OLENOX INDUSTRIES INC.

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

In connection with the Company’s acquisition of NAHD, the Company now operates in the oil and gas industry. During 2024, NAHD acquired Olenox Corp. (“Olenox”), a Wyoming corporation. Olenox is an advanced energy company with three vertically integrated business units: Oil & Gas Production, Energy Services, and Energy Technologies. This 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. Olenoxs’ 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.

Reverse Stock Splits

On May 2, 2024, the Company effected a 1-for-20 reverse stock split of its then-outstanding common stock. All share and per share amounts set forth in the consolidated financial statements of the Company have been recast to reflect the 1-for-20 reverse stock split as if it had occurred as of the earliest period presented and unless otherwise stated, all other share and per share amounts for all periods have been adjusted to reflect this reverse stock split.

On September 8, 2025, the Company effected a 1-for-64 reverse stock split of its then-outstanding common stock (the “September Stock Split”). All share and per share amounts set forth in the consolidated financial statements of the Company have been recast to reflect the 1-for-64 reverse stock split as if it had occurred as of the earliest period presented and unless otherwise stated, all other share and per share amounts for all periods have been adjusted to reflect this reverse stock split.

On May 8, 2026, the Company effected a 1-for-10 reverse stock split of its then-outstanding common stock (the “May Stock Split”). All share and per share amounts set forth in the consolidated financial statements of the Company have been recast to reflect the 1-for-10 reverse stock split as if it had occurred as of the earliest period presented and unless otherwise stated, all other share and per share amounts for all periods have been adjusted to reflect this reverse stock split.

The Company has incurred losses since its inception, has negative working capital of approximately $24.3 million and has negative operating cash flows, which raise substantial doubt about its ability to continue as a going concern. The accompanying 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 meet its capital needs from revenue generated from operations and by containing costs, entering into strategic alliances, as well as exploring other options, including the possibility of raising additional debt or equity capital as necessary. There is, however, no assurance the Company will be successful in meeting its capital requirements prior to becoming cash flow positive. 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 need to materially change its business plan, including delaying implementation of aspects of such business plan or curtailing or abandoning such business plan altogether.

Basis of presentation and principles of consolidation

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) and the applicable rules and regulations of the United States Securities and Exchange Commission (SEC) and include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions are eliminated. Investments in 50% or less owned entities and affiliates are accounted for using the equity method unless it is determined that we have effective control of the entity, in which case we would consolidate the entity.

Other comprehensive income or loss

The Company had no items of other comprehensive income or loss during the periods presented; accordingly, comprehensive income (loss) equals net income (loss), and a separate statement of comprehensive income or loss has not been presented.

Accounting estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates, judgements 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 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.

Operating cycle

The length of the Company’s contracts varies, but is typically between six to twelve months. In some instances, the length of the contract may exceed twelve months. Assets and liabilities relating to contracts are included in current assets and current liabilities, respectively, in the accompanying balance sheets as they will be liquidated in the normal course of contract completion, which at times could exceed one year.

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:

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.

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 rateably 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:

Business Combinations

The Company accounts for business acquisitions using the acquisition method of accounting in accordance with ASC 805 Business Combinations, which requires recognition and measurement of all identifiable assets acquired and liabilities assumed at their fair value as of the date control is obtained. The Company determines the fair value of assets acquired and liabilities assumed based upon its best estimates of the acquisition-date fair value of assets acquired and liabilities assumed in the acquisition. Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired. Subsequent adjustments to fair value of any contingent consideration are recorded to the Company’s consolidated statements of operations. Costs that the Company incurs to complete the business combination are charged to general and administrative expenses as they are incurred.

Cash and Cash Equivalents

The Company considers cash and cash equivalents to include all short-term, highly liquid investments that are readily convertible to known amounts of cash and have original maturities of three months or less upon acquisition. The Company’s cash balances may, at times, exceed amounts insured by the Federal Deposit Insurance Corporation. The Company believe it mitigates this risk by holding its deposits with high quality financial institutions. The Company has not experienced any losses in such account and believes that it is not exposed to any significant credit risk associated with these accounts.

Certificate of Deposit, Restricted

The Company classifies investments consisting of a certificate of deposit with a maturity greater than three months but less than one year as short-term investment. The Company’s certificate of deposit is pledged as a collateral to secure the letter of credit and is therefore restricted and not available for use.

Accounts Receivable and Allowance for Credit Losses

Accounts receivable are receivables generated from sales to customers and progress billings on performance type contracts. Amounts included in accounts receivable are deemed to be collectible within the Company’s operating cycle. The Company recognizes accounts receivable at invoiced amounts.

The allowance for credit losses reflects the Company’s best estimate of expected losses inherent in the accounts receivable balances. Management provides an allowance for credit losses based on the Company’s historical losses, specific customer circumstances, and general economic conditions. The Company estimates expected credit losses on its accounts receivable using an aging-based loss-rate method. Receivables are pooled based on shared risk characteristics and stratified by aging category, and the Company applies expected loss rates to each aging category. These loss rates are derived from the Company’s historical loss experience and are adjusted, as necessary, to reflect current conditions and reasonable and supportable forecasts of future economic conditions. In addition, receivables that no longer share similar risk characteristics - such as balances with customers experiencing financial difficulty or significant disputes - are evaluated individually using a specific-identification approach. Management reviews the allowance at each reporting period and adjusts it for changes in historical loss experience, specific customer circumstances, current conditions, and economic forecasts. Recoveries are recognized when they are received. Actual collection losses may differ from our estimates and could be material to our consolidated financial position, results of operations, and cash flows.

Inventory

Inventory consists of raw materials, finished goods and work-in-process which are valued at the lower of cost (first-in, first-out method for raw materials and specific identification for finished goods and work-in-process) or net realizable value. As of December 31, 2025 and 2024 the Company’s inventory consisted of raw materials of $329,978 and $471,468, respectively. The Company continually analyses its slow-moving, excess and obsolete inventories. Based on historical and projected sales volumes and anticipated selling prices, the Company establishes reserves. If the Company does not meet its sales expectations, these reserves are increased. Products that are determined to be obsolete are written down to net realizable value.

Goodwill

The Company performs its impairment test of goodwill at least annually, at the reporting unit level, or more frequently if events or other circumstance indicate that the Company may not be able to recover the carrying amount of the net assets of the reporting unit. The Company performs the goodwill impairment test by comparing the fair value of the reporting unit with its carrying value and recognizes an impairment charge for the amount by which the carrying value exceeds the fair value, not to exceed the total amount of goodwill. The amount by which the carrying value of the goodwill exceeds its implied fair value, if any, is recognized as an impairment loss.

In evaluating goodwill for impairment, the Company may assess qualitative factors to determine whether it is more likely than not (that is, a likelihood of more than 50%) that the fair value of a reporting unit is less than it’s carrying amount. If the Company elects to not utilize a qualitative assessment, or if the Company concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying value, then the Company performs a quantitative impairment test by comparing the fair value of a reporting unit with its carrying amount.

Intangible assets

Intangible assets with finite lives are reported at cost, less accumulated amortization, and are amortized over their estimated useful lives. Amortization is calculated using the straight-line method, and recorded within selling, general, and administrative expenses, or cost of revenues, depending on the nature and use of the asset.

Property, plant and equipment

Property, plant and equipment is stated at cost. Depreciation is computed using the straight-line method over the estimated lives of each asset. Estimated useful lives and capitalized amounts for significant classes of assets are as follows:

Recoverability and Impairment of Long-Lived Assets

Long-lived assets, including property and equipment and finite-lived intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Recoverability is assessed by comparing the carrying amount of the asset group to the undiscounted future cash flows expected to result from its use and eventual disposition. If the carrying amount is not recoverable, an impairment loss is recognized for the amount by which the carrying amount exceeds the asset group’s fair value. Any resulting write-down establishes a new cost basis, which is depreciated or amortized over the asset’s remaining useful life, and is not subsequently restored. No impairment of long-lived assets was recognized during the years ended December 31, 2025 and 2024.

Leases and Right-of-Use Assets

The Company determines if an arrangement is a lease at its inception. Operating lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The Company generally uses their incremental borrowing rate based on the information available at the lease commencement date in determining the present value of future payments, because the implicit rate of the lease is generally not known. Right-of-use assets related to the Company’s operating lease liabilities are measured at lease inception based on the initial measurement of the lease liability, plus any prepaid lease payments and less any lease incentives. The Company’s lease terms that are used in determining their operating lease liabilities at lease inception may include options to extend or terminate the leases when it is reasonably certain that the Company will exercise such options. The Company amortizes their right-of-use assets as operating lease expense generally on a straight-line basis over the lease term and classify both the lease amortization and imputed interest as operating expenses. The Company does not recognize lease assets and lease liabilities for any lease with an original lease term of less than one year.

Oil and Gas Properties

The Company uses the full cost method of accounting for its in oil and natural gas properties. Under this method of accounting, all costs associated with acquisition, exploration and development of oil and gas reserves, including directly related overhead costs, are capitalized. General and administrative costs related to production and general overhead are expensed as incurred.

All capitalized costs of oil and gas properties, including the estimated future costs to develop proved reserves, are amortized on the unit of production method using estimates of proved reserves. Disposition of oil and gas properties are accounted for as a reduction of capitalized costs, with no gain or loss recognized unless such adjustment would significantly alter the relationship between capitalized costs and proved reserves of oil and gas, in which case the gain or loss is recognized in operations. Unproved properties and major development projects are not amortized until proved reserves associated with the projects can be determined or until impairment occurs. If the results of an assessment indicate that the properties are impaired, the amount of impairment is included in loss from operations before income taxes.

Costs associated with unevaluated properties are excluded from the full cost pool until the Company has made a determination as to the existence of proved reserves. The Company assesses all items classified as unevaluated property on at least an annual basis for possible impairment. The Company assesses properties on a group basis, as a majority of properties are individually insignificant. The assessment includes consideration of the following factors, among others: intent to drill; remaining lease term; geological and geophysical evaluations; drilling results and activity; the assignment of proved reserves; and the economic viability of development if proved reserves are assigned. During any period in which these factors indicate an impairment, the cumulative drilling costs incurred to date for such property and all or a portion of the associated leasehold costs are transferred to the full cost pool and are then subject to amortization.

Limitation on Capitalized Costs

Under the full-cost method of accounting the Company is required, to perform a test to determine the limit on the book value of its oil and natural gas properties (the “Ceiling” test) at the end of each reporting period. If the capitalized costs of the oil and natural gas properties, net of accumulated amortization and related deferred income taxes, exceed the Ceiling, this excess is charged to expense as a full cost ceiling write-down. The expense may not be reversed in future periods, even though higher oil and natural gas prices may subsequently increase the Ceiling. The Ceiling is defined as the sum of:

Oil and Gas Reserves

Reserve engineering is a subjective process that is dependent upon the quality of available data and the interpretation thereof, including evaluations and extrapolations of well flow rates and reservoir pressure. Estimates by different engineers often vary sometimes significantly. In addition, physical factors such as the results of drilling, testing and production subsequent to the date of an estimate, as well as economic factors such as changes in product prices, may justify revision of such estimates. Because proved reserves are required to be estimated using recent prices of the evaluation, estimated reserve quantities can be significantly impacted by changes in product prices.

Depreciation, depletion, and amortization and accretion

The estimates of proved reserves materially impact depreciation, depletion, amortization and accretion (“DD&A”) expense. If the estimates of proved reserves decline, the rate at which the Company records DD&A expense will increase, reducing future net income. Such a decline may result from lower market prices, which may make it uneconomic to drill for and produce from higher-cost fields.

Asset retirement obligations

The Company records a liability for Asset Retirement Obligations (“AROs”) associated with its oil and gas wells when those assets are placed in service. The corresponding cost is capitalized as an asset and included in the carrying amount of oil and gas properties and is depleted over the useful life of the properties. Subsequently, the ARO liability is accreted to its then-present value.

Inherent in the fair value calculation of an ARO are numerous assumptions and judgments including the ultimate settlement amounts, inflation factors, credit adjusted discount rates, timing of settlement, and changes in the legal, regulatory, environmental, and political environments. To the extent future revisions to these assumptions impact the fair value of the existing ARO liability, a corresponding adjustment is made to the oil and gas property balance. Settlements greater than or less than amounts accrued as ARO are recorded as a gain or loss upon settlement.

Oil and gas reserve estimation

All of the Company’s oil and gas reserves are proved reserves. Estimates of oil and gas reserves are prepared in accordance with guidelines promulgated by the SEC for reporting oil and gas reserves and future net revenue. The accuracy of a reserve estimate is a function of:

The Company’s oil and gas reserve information was predominately based on estimates. Because these estimates depend on many assumptions, all of which may substantially differ from future actual results, reserve estimates will be different from the quantities of oil and gas that are ultimately recovered. In addition, results of drilling, testing and production after the date of an estimate may justify material revisions to the estimate.

The estimated proved net recoverable reserves include only those quantities that were expected to be commercially recoverable at prices and costs in effect at the balance sheet dates under the then existing regulatory practices and with conventional equipment and operating methods. All of the Company’s oil and gas reserves are located onshore in the continental United States of America.

Investments

The Company accounted its investment in SG DevCorp at fair value with any changes in value recorded to income or loss.

The Company holds an investment in CycleAIM, Inc.(“CycleAIM”) through the NAHD Merger. The Company has a 51% ownership interest in this joint venture. CycleAIM is consolidated within the accompany financial statements and has had minimal operations since its inception.

The Company purchased an interest in Winchester LLC for $220,000. The Company currently holds a 49% interest and accounted for this investment as unproved oil and gas properties. During December 2025, the Company determined that it may not be able to commence drilling operations prior to the expiry of the underlying leases. Accordingly, the unproved properties were reclassified to the Company’s full cost pool and were derecognized as a component of the Company’s full cost ceiling write-down.

Convertible instruments

The Company bifurcates conversion options from their host instruments and accounts for them as free-standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded instrument would be considered a derivative instrument.

The Company classifies common stock purchase warrants and other derivative financial instruments as equity and contracts that (i) require physical settlement or net-share settlement or (ii) provides a choice of net-cash settlement or settlement in the Company’s own shares (physical settlement or net-share settlement) providing that such contracts are indexed to the Company’s own stock. The Company classifies as assets or liabilities any contracts that (i) require net-cash settlement (including a requirement to net cash settle the contract if any event occurs and if that event is outside the Company’s control) or (ii) gives the counterparty a choice of net-cash settlement or settlement shares (physical settlement or net-cash settlement). The Company assesses classification of common stock purchase warrants and other free-standing derivatives at each reporting date to determine whether a change in classification between assets and liabilities or equity is required.

Debt Issuance Costs

Long-term debt may include capitalized costs related to notes payable net of accumulated amortization. The costs associated with any notes payable are netted against note payable balance and are amortized over the term of the underlying instrument using the effective interest method.

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:

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 and no changes in valuation. The fair value of the Company’s equity-based investment in SG DevCorp was determined based on Level 1 inputs. The Company does not have any financial instruments in the Level 2 or Level 3 category.

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 years ended December 31, 2025:

All changes in the fair value of the embedded derivative conversion features are recorded within “Change in fair value of derivative liabilities” on the consolidated statement of operations. There were no transfers into or out of Level 3 during either year.

Share-based payments

The Company measures the cost of services received in exchange for an award of equity instruments based on the fair value of the award. For employees and directors, including non-employee directors, the fair value of a stock option award is measured on the grant date. The fair value amount is then recognized over the period services are required to be provided in exchange for the award, usually the vesting period. The Company recognizes stock-based compensation expense on a graded-vesting basis over the requisite service period for each separately vesting tranche of each award. Stock-based compensation expense to employees and all directors are reported within payroll and related expenses in the consolidated statements of operations. Stock-based compensation expense to non-employees is reported within marketing and business development expense in the consolidated statements of operations.

Income taxes

The Company accounts for income taxes utilizing the asset and liability approach. Under this approach, deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid. The provision for income taxes generally represents income taxes paid or payable for the current year plus the change in deferred taxes during the year. Deferred taxes result from the differences between the financial and tax bases of the Company’s assets and liabilities and are adjusted for changes in tax rates and tax laws when changes are enacted.

The calculation of tax liabilities involves dealing with uncertainties in the application of complex tax regulations. The Company recognizes liabilities for anticipated tax audit issues based on the Company’s estimate of whether, and the extent to which, additional taxes will be due. If payment of these amounts ultimately proves to be unnecessary, the reversal of the liabilities would result in tax benefits being recognized in the period when the liabilities are no longer determined to be necessary. If the estimate of tax liabilities proves to be less than the ultimate assessment, a further charge to expense would result.

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.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU requires disclosure of specific categories in the rate reconciliation and additional information for reconciling items that meet a quantitative threshold. The amendment also includes other changes to improve the effectiveness of income tax disclosures, including further disaggregation of income taxes paid for individually significant jurisdictions. This ASU is effective for annual periods beginning after December 15, 2024. The Company has adopted the improvements to income tax disclosure requirements with no significant impact on its disclosures.

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 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 consolidated financial statements.

In December 2022, the Company and then owner of 100% of the issued and outstanding securities of SG DevCorp announced its plan to separate the Company and SG DevCorp into two separate publicly traded companies (the “Separation”). To implement the Separation, on September 27, 2023 (the “Distribution Date”), the Company, effected a pro rata distribution to its stockholders of approximately 30% of the outstanding shares of SG DevCorp’s common stock (the “Distribution”). Immediately after the Distribution, SG DevCorp was no longer a wholly owned subsidiary of the Company and the Company held approximately 70% of SG DevCorp’s issued and outstanding securities.

During 2024, the Company’s ownership in SG DevCorp fell below 50%, and the Company deconsolidated SG DevCorp from its financial statements (the “Deconsolidation”). Upon Deconsolidation, the Company recognized a gain of $4,637,013 which resulted from the difference between the fair value of the Company’s investment upon Deconsolidation, and the net assets and carrying value of the non-controlling interest. The gain is included in income (loss) from discontinued operations. The fair value of the Company’s investment in SG DevCorp upon Deconsolidation amounted to $8,126,350. The Deconsolidation represented a strategic shift in the Company’s operations and had a significant effect on the Company’s operations and financial results. Therefore, the financial results of SG DevCorp are presented as income (loss) from discontinued operations for all periods until the entity was deconsolidated.

The assets and liabilities of SG DevCorp at the time of Deconsolidation amounted to the following:

The following table represents the financial results of SG DevCorp for the year ended December 31, 2024:

The total income from discontinued operations for the year ended December 31, 2024, is comprised of the following:

The Company accounted for its residual investment in SG DevCorp at fair value with any changes in value recorded to income or loss. As of December 31, 2024, the Company held 276,425 shares of SG DevCorp (the “Shares”) which represented approximately 19% ownership and amounted to $738,056.

On January 29, 2025, the Company entered into a mutual release and discharge agreement (the “Mutual Release”) with SG DevCorp. pursuant to SG DevCorp. forgiving and releasing from our obligations to them under that certain promissory note, dated August 9, 2023, the principal amount of $908,323 and in respect of $793,590 of inter-company advances from SG DevCorp. to the Company in exchange for the Company forgiving $394,329 of inter-company debt owed to the Company by the Company and for SG DevCorp. (which has already been written off) transferring the Shares, with the Company no longer being a shareholder of SG DevCorp. The Company recognized $311,560 in change in fair value loss of its investment in SG DevCorp for the period ended January 29, 2025. In connection with the Mutual Release, the Company recorded $1,275,416 to additional paid in capital which resulted from the transactions above and the Company’s investment in SG DevCorp write down to $426,496.

At December 31, 2025, and 2024, the Company’s allowance for credit losses for the years ended December 31, 2025 and 2024 consisted of the following:

Changes in the Company’s allowance for credit losses for the years ended December 31, 2025 and 2024 consisted of the following:

Costs and estimated earnings on uncompleted contracts, which represent contract assets and contract liabilities, consisted of the following:

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 year ended December 31, 2025, the Company recognized $593,546 of revenue related to it contract liabilities as of December 31, 2024. The above balances are included within ‘contract liabilities and deferred revenue’ on the consolidated balance sheets.

Property, plant and equipment are stated at cost less accumulated depreciation and amortization and depreciated using the straight-line method over their useful lives. At December 31, 2025 and 2024, the Company’s property, plant and equipment, net consisted of the following:

Depreciation expense for the years ended December 31, 2025 and 2024 amounted to $271,364 and $513,125, respectively.

Authority Loan Agreement

On October 29, 2021, SG Echo entered into a Loan Agreement (the “Authority Loan Agreement”) with the Durant Industrial Authority (the “Authority”) pursuant to which it issued to the Authority a non-interest bearing Forgivable Promissory Note in the principal amount of $750,000 (the” Forgivable Note”) in exchange for $750,000 to be used for renovation improvements related to the Company’s approximately 58,000 square-foot manufacturing facility in Durant, Oklahoma. The Forgivable Note is due on April 29, 2029 and guaranteed by the Company, provided that, if no event of default has occurred under the Forgivable Note or the Authority Loan Agreement, one-third (1/3) of the balance of the Forgivable Note will be forgiven on April 29, 2027, one-half (1/2) of the balance of the Forgivable Note will be forgiven on April 29, 2028, and the remainder of the balance of the Forgivable Note will be forgiven on April 29, 2029. The Loan Agreement includes a covenant by SG Echo to employ a minimum of 75 full-time employees in Durant, Oklahoma and pay them no less than 1.5 times the federal minimum wage, and provides SG Echo 24 months to comply with the provision.

See Note 21 for additional information regarding litigation between the Company and the Authority.

Peak One Transactions

On February 7, 2023, the Company closed a private placement offering (the “Peak One Offering”) of $1,100,000 in principal amount of the Company’s 8% convertible debenture (the “Debenture”) and a warrant (the “Peak Warrant”) to purchase up to 39 shares of the Company’s common stock, to Peak One Opportunity Fund, L.P. (“Peak One”). Pursuant to a Securities Purchase Agreement, dated February 7, 2023 (the “February 2023 Purchase Agreement”), by and between the Company and Peak One, the Debenture was sold to Peak One for a purchase price of $1,000,000, representing an original issue discount of ten percent (10%).

During the year ended December 31, 2024, Peak One converted $730,000 of its principal balance into 40 shares of common stock of the Company. Such conversion was within the terms of the agreement with no gains or losses recognized on the transactions.

In connection with the Peak One Offering, the Company paid $15,000 as a non-accountable fee to Peak One to cover its accounting fees, legal fees and other transactional costs incurred in connection with the transactions contemplated by February 2023 Purchase Agreement and issued 4 shares to Peak One Investments, LLC (Peak One Investments), the general partner of Peak One.

The Debenture matured twelve months from its date of issuance and bore interest at a rate of 8% per annum payable on the maturity date. The Debenture was convertible, at the option of the holder, at any time, into such number of shares of common stock of the Company equal to the principal amount of the Debenture plus all accrued and unpaid interest at a conversion price equal to $19,200 (the “Conversion Price”), subject to adjustment for any stock splits, stock dividends, recapitalizations and similar events and in the event the Company, at any time while the Debenture is outstanding, issues, sells or grants any option to purchase, or sells or grants any right to reprice, or otherwise disposes of, or issues common stock or other securities convertible into, exercisable for, or otherwise entitle any person the right to acquire, shares of common stock, other than with respect to an Exempt Issuance, as defined in the Debenture, at an effective price per share that is lower than the then Conversion Price. In the event of any such anti-dilutive event, the Conversion Price will be reduced at the option of the holder to such lower effective price of the dilutive event, subject to a floor price of $5,120, per share, unless and until the Company obtains shareholder approval for any issuance below such floor price. Upon entering into the January 2024 Purchase Agreement as described below, the Conversion Price was adjusted to $5,120, and then upon entering into the Inducement Agreement as described below, the Conversion Price was further adjusted to $170 (“Conversion Adjustments”).

During the year ended December 31, 2024 Peak One converted the Debenture in full and received a total of 46 shares of the Company’s common stock. Such conversion was within the terms of the agreement with no gains or losses recognized on the transactions.

The Peak Warrant expires five years from its date of issuance. The Peak Warrant is exercisable, at the option of the holder, at any time, for up to 39 of shares of common stock of the Company at an exercise price equal to $28,800, subject to adjustment for any stock splits, stock dividends, recapitalizations and similar events and in the event the Company, at any time while the Peak Warrant is outstanding, issues, sells or grants any option to purchase, or sells or grants any right to reprice, or otherwise disposes of, or issues common stock or other securities convertible into, exercisable for, or otherwise entitle any person the right to acquire, shares of common stock, other than with respect to an Exempt Issuance, at an effective price per share that is lower than the then exercise price. In the event of any such anti-dilutive event, the exercise price will be reduced at the option of the holder to such lower effective price of the dilutive event, subject to a floor price of $5,120 per share, unless and until the Company obtains shareholder approval for any issuance below such floor price.

The number of shares of the Company’s common stock that may be issued upon conversion of the Debenture and exercise of the Peak Warrant, and inclusive of the Commitment Shares and any shares issuable under and in respect of the February 2023 Purchase Agreement, is subject to an exchange cap (the “Exchange Cap”) of 19.99% of the outstanding number of shares of the Company unless shareholder approval to exceed the Exchange Cap is approved.

The Company incurred $80,000 in debt issuance costs in connection with the Debenture. In addition, the initial fair value of the Peak Warrant amounted to $278,239 and the fair value of the restricted shares amounted to $76,000, both of which have been recorded as a debt discount and will be amortized over the effective rate method.

On January 11, 2024, the Company entered into a Securities Purchase Agreement (the “January 2024 Purchase Agreement”) with Peak One, pursuant to which the Company agreed to issue, in a private placement offering (the January Offering), upon the satisfaction of certain conditions specified in the January 2024 Purchase Agreement, two debentures to Peak One in the aggregate principal amount of $1,300,000.

The closing of the first tranche was consummated on January 12, 2024 and the Company issued an 8% convertible debenture in the principal amount of $650,000 (the “Holdings Debenture”) to Peak One and a warrant (the Peak Warrant #3) to purchase up to 29 shares of the Company’s common stock to Peak Ones designee, as described in the January 2024 Purchase Agreement. The Holdings Debenture was sold to Peak One for a purchase price of $585,000, representing an original issue discount of ten percent (10%). In connection with the January Offering, the Company paid $17,500 as a non-accountable fee to Peak One to cover its accounting fees, legal fees and other transactional costs incurred in connection with the transactions contemplated by the January 2024 Purchase Agreement and issued to Peak One and its designee an aggregate of 23 shares of its common stock as provided in the January 2024 Purchase Agreement.

The Holdings Debenture matures twelve months from its date of issuance and bears interest at a rate of 8% per annum payable on the maturity date. The Holdings Debenture is convertible, at the option of the holder, at any time, into such number of shares of common stock of the Company equal to the principal amount of the Holdings Debenture, plus all accrued and unpaid interest, at a conversion price equal to $5,890, subject to adjustment for any stock splits, stock dividends, recapitalizations and similar events, as well as anti-dilution price protection provisions that are subject to a floor price as set forth in the Holdings Debenture. Upon entering into the Inducement Agreement as described below, the conversion price was adjusted to $170. This transaction, along with the conversion adjustments resulted in the Company recording a common stock deemed dividend in the amount of $475,713 during the year ended December 31, 2024 “(Conversion Deemed Dividend”).

The Holdings Debenture is redeemable by the Company at a redemption price equal to 110% of the sum of the principal amount to be redeemed plus accrued interest, if any. While the Holdings Debenture is outstanding, if the Company receives cash proceeds of more than $1,500,000 (the “January 2024 SPA Minimum Threshold”) in the aggregate from any source or series of related or unrelated sources, the Company shall, within two (2) business days of the Company’s receipt of such proceeds, inform Peak One of such receipt, following which Peak One shall have the right, in its sole discretion, to require the Company to immediately apply up to 50% of all proceeds received by the Company (from any source except with respect to proceeds from the issuance of equity or debt to officers and directors of the Company) after the January 2024 SPA Minimum Threshold is reached to repay the outstanding amounts owed under the Debenture.

The Peak Warrant #3 expires five years from its date of issuance. The Peak Warrant #3 is exercisable, at the option of the holder, at any time, for up to 29 of shares of common stock of the Company at an exercise price equal to $6,780, subject to adjustment for any stock splits, stock dividends, recapitalizations and similar events, as well as anti-dilution price protection provisions that are subject to a floor price as set forth in the Peak Warrant #3. The Peak Warrant #3 provides for cashless exercise under certain circumstances.

Maxim Group LLC (Maxim) acted as placement agent in the January Offering. In connection with the closing of the first tranche of the January Offering, the Company paid a placement fee of $40,950 to Maxim.

During the year ending December 31, 2024, the principal balance of the Holdings Debenture was converted and there wasno principal balance remaining. Such conversion was within the terms of the agreement with no gains or losses recognized on the transactions.

Cash Advance Agreements

Maison Capital Group

On January 5, 2024, SG Building and SG Echo (together with SG Building, the “Merchants”) entered into a Cash Advance Agreement (the “January Cash Advance Agreement”) with Maison Capital Group (“Maison”) pursuant to which the Merchants sold to Maison $300,000 of their future receivables for a purchase price of $200,000, less underwriting fees and expenses paid, for net funds provided of $190,000. As of December 31, 2024 there wasno outstanding balance on this advance.

Pursuant to the January Cash Advance Agreement, Maison is expected to withdraw $12,500 a week directly from the Merchants until the $300,000 due to Maison under the January Cash Advance Agreement is paid in full. In the event of a default, as defined in the January Cash Advance Agreement, Maison, among other remedies, can demand payment in full of all amounts remaining due under the January Cash Advance Agreement. The Merchants obligations under the January Cash Advance Agreement are secured by a security interest in all accounts, including without limitation, all deposit accounts, accounts-receivable, and other receivables, chattel paper, documents, equipment, general intangibles, instruments, and inventory, as those terms are defined by Article 9 of the Uniform Commercial Code, now or hereafter owned or acquired by any of them. In addition, SG Buildings obligations under the January Cash Advance Agreement have been guaranteed by SG Echo, and SG Echos’ obligations under the January Cash Advance Agreement have been guaranteed by SG Building Blocks. The amounts outstanding under the January Cash Advance Agreement may be prepaid by the Merchants at any time without penalty.

Cedar Advance LLC (“Cedar”)

On January 29, 2024, SG Building entered into a Cash Advance Agreement (the “Fourth Cash Advance Agreement” and, together with the Cash Advance Agreement, the Second Cash Advance Agreement and the Third Cash Advance Agreement, the” Cedar Cash Advance Agreements”) with Cedar pursuant to which SG Building sold to Cedar $1,733,420 of its future receivables for a purchase price of $1,180,000, less underwriting fees and expenses paid and the repayment of prior amounts due Cedar, for net funds provided of $215,575.

Pursuant to the Fourth Cash Advance Agreement, Cedar is expected to withdraw $49,150 a week directly from SG Building until the $1,733,420 due to Cedar under the Fourth Cash Advance Agreement is paid in full. In the event of a default (as defined in the Fourth Cash Advance Agreement), Cedar, among other remedies, can demand payment in full of all amounts remaining due under the Fourth Cash Advance Agreement. SG Buildings obligations under the Fourth Cash Advance Agreement have been guaranteed by SG Echo. As of December 31, 2024 there wasno outstanding balance on this advance.

On July 31, 2024, SG Building entered into a Cash Advance Agreement (the “July Cash Advance Agreement”) with Cedar pursuant to which SG Building sold to Cedar $1,957,150 of its future receivables for a purchase price of $1,350,000, less underwriting fees and expenses paid and the repayment of prior amounts due Cedar, for net funds provided of $285,180, which are net of repayment of prior Cedar Cash Advance Agreements.

Pursuant to the July Cash Advance Agreement, Cedar is expected to withdraw $49,150 a week directly from SG Building until the $1,957,150 due to Cedar under the July Cash Advance Agreement is paid in full. In the event of a default (as defined in the July Cash Advance Agreement), Cedar, among other remedies, can demand payment in full of all amounts remaining due under the July Cash Advance Agreement. SG Buildings obligations under the July Cash Advance Agreement have been guaranteed by SG Echo. As of December 31, 2025 and 2024 the principal balance on this advance was $1,536,700.

On August 27, 2024, SG Building entered into a Cash Advance Agreement (the “August Cash Advance Agreement”) with Cedar pursuant to which SG Building sold to Pawn $599,600 of its future receivables for a purchase price of $400,000, less underwriting fees and expenses paid and the repayment of prior amounts due Cedar, for net funds provided of $360,000. Pursuant to the August Cash Advance Agreement, Cedar is expected to withdraw $4,999.67 a week directly from SG Building until the $599,600 due to Cedar is paid in full. In the event of a default (as defined in the August Cash Advance Agreement), Cedar, among other remedies, can demand payment in full of all amounts remaining due under the August Cash Advance Agreement. As of December 31, 2024 the principal balance on this advance was $249,833.

On December 17, 2024, SG Building entered into a Cash Advance Agreement (the “December Cash Advance Agreement”) with Cedar pursuant to which SG Building sold to Cedar $194,500 of its future receivables for a purchase price of $138,000, less underwriting fees and expenses paid, for net funds provided of $125,000. Pursuant to the Cedar Cash Advance Agreement, Cedar is expected to withdraw $4,900 a week directly from SG Building until the $194,500 due to Cedar is paid in full. In the event of a default (as defined in the Cedar Cash Advance Agreement), Cedar, among other remedies, can demand payment in full of all amounts remaining due under the Cedar Cash Advance Agreement. As of December 31, 2025 and 2024 the principal balance on this advance was $57,851 and $184,700 respectively.

On December 24, 2024, SG Building entered into a Cash Advance Agreement (the “December Cash Advance Agreement 2”) with Cedar pursuant to which SG Building sold to Cedar $203,000 of its future receivables for a purchase price of $140,000, less underwriting fees and expenses paid, for net funds provided of $126,000. Pursuant to the December Cedar Cash Advance Agreement 2, Cedar is expected to withdraw $5,000 a week directly from SG Building until the $203,000 due to Cedar is paid in full. In the event of a default (as defined in the Cedar Cash Advance Agreement), Cedar, among other remedies, can demand payment in full of all amounts remaining due under the Cedar Cash Advance Agreement. As of December 31, 2025 and 2024 the principal balance on this advance was $132,898 and $203,000, respectively.

Southstar Factoring Agreement

In connection with the exercise of its option to acquire 19 acres of land and the approximately 56,775 square foot facility located at 101 Waldron Road in Durant Oklahoma (the “Premises”), on June 8, 2023, SG Echo issued a secured commercial promissory note, dated June 1, 2023 (the “Secured Note”), in the principal amount of $1,750,000 with SouthStar Financial, LLC, a South Carolina limited liability company (“SouthStar”), and entered into a Non-Recourse Factoring and Security Agreement, dated June 1, 2023 (the “Factoring Agreement”), with SouthStar providing for its purchase from SG Echo of up to $1,500,000 of accounts receivable, subject to reduction by South Star (the “Facility Amount”).

The Secured Note bears interest at 23% per annum and is due and payable on June 1, 2025. The Secured Note is secured by a mortgage (the “Mortgage”) on the Premises and secured by a Security Agreement, dated June 1, 2023 (the “Security Agreement”), pursuant to which SG Echo granted to SouthStar a first priority security interest in all of SG Echo’s presently-owned and hereafter-acquired personal and fixture property, wherever located, including, without limitation, all accounts, goods, chattel paper, inventory, equipment, instruments, investment property, documents, deposit accounts, commercial tort claims, letters-of-credit rights, general intangibles including payment intangibles, patents, software trademarks, trade names, customer lists, supporting obligations, all proceeds and products of the foregoing. SG Echo paid to SouthStar an origination fee in the amount of 3% of the face amount of the Secured Note. Upon the occurrence of an Event of Default (as defined in the Secured Note), the default interest rate will be 28% per annum, or the maximum legal amount provided by law, whichever is greater.

The Factoring Agreement provides that upon acceptance of an account receivable for purchase SouthStar will pay to SG Echo eighty percent (80%) of the face amount of the account receivable, or such lesser percentage as agreed by the parties. SG Echo will also pay to SouthStar one and 95/100 percent (1.95%) of the face amount of the accounts receivable for the first twenty-five (25) day period after payment for the accounts receivable is transmitted to SouthStar plus one and 25/100 percent (1.25%) for each additional fifteen (15) day period or part thereof, calculated from the date of purchase until payments received by SouthStar in collected funds on the purchased accounts receivable equals the purchase price of the accounts receivable, plus all charges due SouthStar from SG Echo at the time. An additional one and 50/100 percent (1.50%) per fifteen (15) day period will be charged for invoices exceeding sixty (60) days from advance date. The Factoring Agreement provides that SG Echo may require additional funding from SouthStar (an “Overadvance”) and SouthStar may provide the Overadvance in its sole discretion. In the event of an Overadvance, SG Echo will pay SouthStar an amount equal to three and 90/100 percent (3.90%) of the amount of the Overadvance for the first twenty-five (25) day period after the Overadvance is transmitted to SouthStar plus two and 50/100 percent (2.50%) for each additional fifteen (15) day period or part thereof until payments received by SouthStar in collected funds equals the amount of the Overadvance, plus all charges due SouthStar from SG Echo at the time.

The Factoring Agreement provides that SG Echo will also pay a transactional administrative fee of $50.00 for each new account debtor submitted to it and a fee equal to 0.25% of the face amount of all purchased accounts receivable for the handling, collecting, mailing, quality assuring, insuring the risk, transmitting, and performing certain data processing services with respect to the maintenance and servicing of the purchased accounts.

As security for the payment and performance of SG Echo’s present and future obligations to SouthStar under the Factoring Agreement, SG Echo granted to SouthStar a first priority security interest in all of SG Echo’s presently-owned and hereafter-acquired personal and fixture property, wherever located, including, without limitation, all accounts, goods, chattel paper, inventory, equipment, instruments, investment property, documents, deposit accounts, commercial tort claims, letters-of-credit rights, general intangibles including payment intangibles, patents, software trademarks, trade names, customer lists, supporting obligations, all proceeds and products of the foregoing.

The Factoring Agreement has an initial term of thirty-six (36) months from the first day of the month following the date the first purchased accounts receivable is purchased. Unless terminated by SG Echo, not less than sixty (60) but not more than ninety (90) days before the end of the initial term, the Factoring Agreement will automatically extend for an additional thirty-six (36) months. SG Echo is required to provide the same not less than sixty (60) but not more than ninety (90) days notice during any and all renewal terms in order to terminate the Factoring Agreement, and if no notice is provided, the renewal term will extend for an additional thirty-six (36) month period.

If SouthStar has not purchased accounts receivable in a quarterly period during any initial or renewal term which exceed fifty percent (50%) of the Facility Amount per calendar quarter, in which $250,000.00 of the purchased accounts each month must be with a specific customer of the Company. (“Minimum Amount”), the Factoring Agreement provides that SG Echo will pay to SouthStar, on demand, an additional amount equal to what the charges provided for elsewhere in the Factoring Agreement would have been on the Minimum Amount assuming the number of days from the date of purchase of the Minimum Amount until receipt of payment of the Minimum Amount is thirty one (31) days, less the actual charges paid by SG Echo to SouthStar during such period.

Bridgecap Advance LLC

On February 23, 2024, the Merchants entered into a Cash Advance Agreement (“February Cash Advance Agreement”) with Bridgecap Advance LLC (“Bridgecap”) pursuant to which the Merchants sold to Bridgecap $224,850 of their future receivables for a purchase price of $150,000, less underwriting fees and expenses paid, for net funds provided of $135,000.

Pursuant to the February Cash Advance Agreement, Bridgecap is expected to withdraw $2,248.50 a day directly from the Merchants until the $224,850 due to Bridgecap under the February Cash Advance Agreement is paid in full. In the event of a default (as defined in the February Cash Advance Agreement), Bridgecap, among other remedies (including penalties and fees) can demand payment in full of all amounts remaining due under the February Cash Advance Agreement. The Merchants obligations under the February Cash Advance Agreement are secured by a security interest in all accounts, including without limitation, all deposit accounts, accounts-receivable, other receivables, and proceeds therefrom, as those terms are defined by Article 9 of the Uniform Commercial Code, now or hereafter owned or acquired by any of them. The amounts outstanding under the February Cash Advance Agreement may be prepaid by the Merchants at any time without penalty. As of December 31, 2024, there wasno outstanding balance on this advance.

Pawn Funding LLC

On August 27, 2024, SG Building entered into a Cash Advance Agreement (the” Pawn Cash Advance Agreement”) with Pawn Funding “(Pawn”) pursuant to which SG Building sold to Pawn $599,600 of its future receivables for a purchase price of $400,000, less underwriting fees and expenses paid and the repayment of prior amounts due Pawn, for net funds provided of $360,000. Pursuant to the Pawn Cash Advance Agreement, Pawn is expected to withdraw $4,999.67 a week directly from SG Building until the $599,600 due to Pawn is paid in full. In the event of a default, as defined in the Pawn Cash Advance Agreement, Pawn, among other remedies, can demand payment in full of all amounts remaining due under the Pawn Cash Advance Agreement. As of December 31, 2025 and 2024, the principal balance on this advance was $249,833.

Core Funding Source LLC

On January 22, 2025, SG Building entered into a Cash Advance Agreement (the “Core Cash Advance Agreement”) with Core Funding Source LLC (“Core”) pursuant to which SG Building sold to Core $104,930 of its future receivables for a purchase price of $70,000, less underwriting fees and expenses paid, for net funds provided of $63,000. Pursuant to the Core Cash Advance Agreement, Core is expected to receive $2,998 a day directly from SG Building until the $104,930 due to Core is paid in full. In the event of a default, as defined in the Core Cash Advance Agreement, Core, among other remedies, can demand payment in full of all amounts remaining due under the Core Cash Advance Agreement. As of December 31, 2025, the outstanding balance amounted to $0.

Enhanced Note

On September 20, 2024, SG Echo entered into a Loan and Security Agreement (the “Enhanced Loan Agreement”) with Enhanced Capital Oklahoma Rural Fund, LLC (“Enhanced”) pursuant to which SG Echo borrowed $4,000,000 (the “Principal”) from Enhanced, and whereby SG Echo executed and delivered a Secured Promissory Note (the “Enhanced Note”) to Enhanced to evidence SG Echos’ obligations under the Enhanced Loan Agreement. The Enhanced Note bears interest at a rate equal to the greater of (i) the Secured Overnight Financing Rate (SOFR) plus 6.65% or (ii)10.0% per annum (the “Interest Rate”). As of December 31, 2025, the interest rate was 10.12%. SG Echo is to pay Enhanced a closing fee of $80,000, which is due and payable on October 1, 2025, unless such date is be extended by the lender. SG Echos’ obligations under the Enhanced Loan Agreement and the Enhanced Note have been guaranteed by the Company. As of December 31, 2025 and 2024 the outstanding balance was $4,000,000.

Pursuant to the terms of the Enhanced Note, SG Echo shall make monthly payments of accrued interest on the first business day of each calendar month until December 31, 2025. Commencing January 2026, SG Echo shall make monthly payments of accrued interest and additionally shall make a monthly principal payment on the Enhanced Note in an amount equal to $22,222. The maturity date of the Enhanced Note shall be thesixty-month anniversary of the closing date (the “Enhanced Maturity Date”). All outstanding principal and accrued interest shall be due and payable on the Enhanced Maturity Date.

Pursuant to the terms of the Enhanced Loan Agreement, on the closing date, $360,000 (the “Interest Reserve”) was deposited in a segregated deposit account in SG Echo name, which account is subject to a Control Agreement in favor of the lender (the “Interest Reserve Account”). The monthly payments due under the Enhanced Note are withdrawn from the Interest Reserve Account until the Interest Reserve has been fully withdrawn. SG Echo shall have no obligation to replenish amounts withdrawn from the Interest Reserve Account.

Pursuant to the terms of the Enhanced Loan Agreement, SG Echo shall grant Enhanced a first priority mortgage on the real property located at 101 Waldron Rd., Durant, Oklahoma. As of December 31, 2025, this property had a carrying value of approximately $3,450,000, which is included in property, plant and equipment, net, in the consolidated balance. Additionally, SG Echo shall grant lender a continuing security interest in, a general lien upon, collateral assignment of, and a right of set-off against all of SG Echos’ right, title, and interest in and to all assets of SG Echo.

In the event of default, as defined in the Enhanced Loan Agreement, Enhanced, among other remedies, can demand all amounts and/or liabilities owing from time to time by SG Echo to Enhanced pursuant to the Enhanced Loan Agreement and the Enhanced Note (with accrued interest thereon) and all other amounts owing under the Enhanced Loan Agreement due and payable.

Galvin Promissory Note

On December 14, 2023, the Company entered into a promissory note with Paul Galvin, the Company’s Chairman and CEO, for $75,000 (the “Galvin Note Payable”). The note shall not accrue interest, and the entire unpaid principal balance is due December 14, 2024. During the three months ended March 31, 2024 the Company entered into an additional promissory note with Mr. Galvin in the amount of $10,000. The note shall not accrue interest, and the entire unpaid principal balance is due December 14, 2024. During the year ended December 31, 2024, $68,000 in principal payments were made. As of December 31, 2025 the principal balance was $17,805.

1800 Diagonal Lending LLC

On March 5, 2024, the Company issued a promissory note (the “1800 Diagonal Note”) in favor of 1800 Diagonal Lending LLC (“1800 Diagonal”) in the aggregate principal amount of $149,500 pursuant to a Securities Purchase Agreement, dated March 5, 2024 (the “SPA”).

The 1800 Diagonal Note was purchased by 1800 Diagonal for a purchase price of $130,000, representing an original issue discount of $19,500. A one-time interest charge of 10% was applied on the issuance date to the principal balance. Under the terms of the 1800 Diagonal Note, beginning on April 15, 2024, the Company is required to make nine monthly payments of accrued, unpaid interest and outstanding principal, subject to adjustment, in the amount of $18,272. The Company shall have a five-business day grace period with respect to each payment. Any amount of principal or interest on the 1800 Diagonal Note which is not paid when due will bear interest at the rate of 22% per annum from the due date thereof until the same is paid (the “Default Interest”). The Company has a right to accelerate payments or prepay in full at any time with no prepayment penalty.

Among other things, an event of default will be deemed to have occurred if the Company fails to pay the principal or interest when due on the 1800 Diagonal Note, whether at maturity, upon acceleration or otherwise, if bankruptcy or insolvency proceedings are instituted by or against the Company or if the Company fails to maintain the listing of its common stock on The Nasdaq Stock Market. Upon the occurrence of an event of default, the 1800 Diagonal Note will become immediately due and payable and the Company will be obligated to pay in satisfaction of its obligations under the 1800 Diagonal Note, an amount equal to 200% times the sum of the then outstanding principal amount of the 1800 Diagonal Note plus accrued and unpaid interest on the unpaid principal amount of this 1800 Diagonal Note to the date of payment plus Default Interest, if any.

After an event of default, at any time following thesix-month anniversary of the 1800 Diagonal Note, 1800 Diagonal will have the right, to convert all or any part of the outstanding and unpaid amount of the 1800 Diagonal Note into shares of the Company’s common stock at a conversion price equal to the greater of $50 or 65% multiplied by the lowest closing bid price during the 10 trading days prior to the conversion date (representing a discount rate of 35%). The 1800 Diagonal Note may not be converted into shares of the Company’s common stock if the conversion would result in 1800 Diagonal and its affiliates owning an aggregate of in excess of 4.99% of the then outstanding shares of the Company’s common stock. In addition, unless the Company obtains shareholder approval of such issuance, the Company shall not issue a number of shares of its common stock under 1800 Diagonal Note, which when aggregated with all other securities that are required to be aggregated for purposes of Nasdaq Rule 5635(d), would exceed 19.99% of the shares of the Company’s common stock outstanding as of the date of definitive agreement with respect to the first of such aggregated transactions (the “Conversion Limitation”). Upon the occurrence of an event of default as a result of the Company being delisted from Nasdaq, the Conversion Limitation shall no longer apply.

On August 28, 2024, the Company issued a promissory note (the “August 1800 Diagonal Note”) in favor of 1800 Diagonal in the principal amount of $290,000 for a purchase price of $250,000, representing an original issue discount of $40,000. A one-time interest charge of twelve percent (12%) was applied on the issuance date to the principal balance. Under the terms of the August 1800 Diagonal Note, beginning on February 28, 2025, the Company is required to make four monthly payments of accrued, unpaid interest and outstanding principal, subject to adjustment, in the amount of $40,600, with $162,400 being due on February 28, 2025. The Company has right to accelerate payments or prepay in full at any time with no prepayment penalty. In connection with the August 1800 Diagonal Note, the Company incurred $8,000 in debt issuance costs. The August 1800 Diagonal Note has default terms similar to the 1800 Diagonal Note as described above.

On October 17, 2024, the Company issued a promissory note (the “October 1800 Diagonal Note”) in favor of 1800 Diagonal in the principal amount of $174,000 for a purchase price of $150,000, representing an original issue discount of $24,000. A one-time interest charge of twelve percent (12%) was applied on the issuance date to the principal balance. Under the terms of the October 1800 Diagonal Note, beginning in November 2024, the Company is required to make nine monthly payments of accrued, unpaid interest and outstanding principal, subject to adjustment, in the amount of $21,653. The Company has right to accelerate payments or prepay in full at any time with no prepayment penalty. In connection with the October 1800 Diagonal Note, the Company incurred $6,000 in debt issuance costs. The October 1800 Diagonal Note has default terms similar to the 1800 Diagonal Note as described above.

On January 22, 2025, the Company issued a promissory note (the “January 1800 Diagonal Note”) in favor of 1800 Diagonal in the principal amount of $143,750 for a purchase price of $125,000, representing an original issue discount of $18,750. A one-time interest charge of fifteen percent (15%) was applied on the issuance date to the principal balance. Under the terms of the January 1800 Diagonal Note, beginning on February 28, 2025, the Company is required to make nine monthly payments of accrued, unpaid interest and outstanding principal, subject to adjustment, in the amount of $18,368. The Company has right to accelerate payments or prepay in full at any time with no prepayment penalty. In connection with the January 1800 Diagonal Note, the Company incurred $8,000 in debt issuance costs. The January 1800 Diagonal Note has default terms similar to the 1800 Diagonal Note as described above. During the year ended December 31, 2025, 1800 Diagonal converted their entire remaining principal balance into 996 shares of common stock.

Firstfire Global Opportunities Fund, LLC

On February 12, 2025, the Company executed and issued a Promissory Note (the “Firstfire Note”) in favor of Firstfire Global Opportunities Fund, LLC (“Firstfire”) in the aggregate principal amount of $360,000 (the “Firstfire Principal”), and an accompanying Securities Purchase Agreement, executed on February 12, 2025 (the “Firstfire SPA”).

The Note was purchased by Firstfire for a purchase price of $300,000, representing an original issue discount of $60,000. The Note bears interest at a rate of fifteen percent (15%) per annum, with the understanding that the first twelve months of interest under the Firstfire Note (equal to $54,000), shall be guaranteed and earned in full as of February 12, 2025. Any amount of Firstfire Principal or interest due under the Firstfire Note which is not paid when due shall bear interest at eighteen percent (18%) per annum (“Firstfire Default Interest”). The Firstfire Note may not be prepaid in whole or in part except as explicitly set forth in the Note. In connection with the issuance of the Firstfire Note and the Firstfire SPA, the Company will issue to the lender common stock purchase warrants (the “Firstfire Warrant”), which shall be exercisable into 3,750 shares of Common Stock. The relative fair value of the Firstfire Warrants amounted to $158,883 and are recorded as a debt discount to the underlying Firstfire Note.

Firstfire will have the right, on any calendar day, at any time on or after the issue date, to convert all or any portion of the then-outstanding Firstfire Principal and interest (including any Firstfire Default Interest) into fully paid and non-assessable shares of common stock, par value $0.01 per share, of the Company. The per share conversion price into which the principal, interest (including any Firstfire Default Interest) shall be equal to $78, subject to adjustment as provided in the Note (the “Firstfire Conversion Price”). If at any time the Firstfire Conversion Price for any conversion would be less than the par value of the common Stock, then at the sole discretion of the lender, the Firstfire Conversion Price may equal such par value for such conversion, and the conversion amount shall be increased to include Additional Principal (where “Additional Principal” means such additional amount to be added to the conversion amount to the extent necessary to cause the number of conversion shares issuable upon such conversion to equal the same number of conversion shares as would have been issued if the Firstfire Conversion Price had not been adjusted by the Lender to the par value price. The Lender shall be entitled to deduct $1,750 from the conversion amount in each notice of conversion to cover Lender’s fees associated with each notice of conversion. The Note may not be converted into shares of the Company’s common stock if the conversion would result in the Lender and its affiliates owning an aggregate of in excess of 4.99% of the then-outstanding shares of the Company’s common stock.

After an Event of Default, as defined in the Firstfire SPA, in addition to all other rights under the Firstfire Note, the Lender shall have the right to convert any portion of the Firstfire Note at any time at a price per share equal to the Alternate Price. The “Alternate Price” shall mean the lesser of (i) the applicable conversion price under the Note, (ii) the closing price of the Common Stock on the date of the Event of Default, or (iii) $333.

The Company evaluated the conversion feature under ASC 815,Derivatives and Hedging, and determined that the embedded conversion option required bifurcation from the host debt instrument and separate accounting as a derivative liability measured at fair value, with changes in fair value recognized in earnings. At issuance, the Company recorded the embedded derivative at its fair value of approximately $4.2 million net of allocated debt issue costs of approximately $98,000, with a corresponding debt discount of approximately $293,000.

The fair value of the embedded derivative was estimated using a Monte Carlo simulation model, which the Company determined to be the most appropriate valuation technique given the various settlement provisions. The embedded derivative is classified within Level 3 of the fair value hierarchy due to the use of significant unobservable inputs. Key inputs to the model at issuance and settlement were as follows:

On April 18, 2025, the Firstfire Note was repaid in cash for total consideration of $360,000. Immediately prior to settlement, the Company remeasured the embedded derivative to its fair value of approximately $2.4 million, recognizing a gain on change in fair value of approximately $1.9 million. Upon settlement, the Company derecognized the carrying value of the Note, the unamortized debt discount, and the bifurcated derivative liability, and recognized a gain on settlement of $2.4 million, included in ‘gain on settlement of derivatives’ in the accompanying consolidated statement of operations. As of December 31, 2025, no derivative liability related to the Firstfire Note remained outstanding. As of December 31, 2025, the outstanding balance of this note was $-0-.

Tysadco Partners LLC

On March 6, 2025, the Company issued a promissory note (the “Tysadco Note”) in favor of Tysadco Partners LLC (“Tysadco”), with an effective date of February 25, 2025, in the aggregate principal amount of up to $1,875,000 (the “Tysadco Principal”), and an accompanying Securities Purchase Agreement (the “Tysadco SPA”). All outstanding Tysadco Principal and interest shall be due on November 30, 2025 (the “Tysadco Maturity Date”). The Tysadco Note was purchased for up to $1,500,000, representing an original issue discount of twenty-five percent (25%), equal to $375,000 if the Note is fully funded. The Tysadco Note bears interest at twelve percent (12%) interest per annum. Tysadco has the right to convert all or any portion of the then-outstanding Tysadco Principal and interest into fully paid and non-assessable shares of common stock of the Company, par value $0.01 per share (the “Tysadco Conversion Shares”). The per share conversion price into which the Tysadco Principal and interest converts was $320. Among others, the following shall be considered events of default under the Tysadco Note, each an Event of Default as defined in the Tysadco SPA: if the Company fails to pay the Tysadco Principal or interest when due under the Tysadco Note; if the Company fails to issue the Tysadco Conversion Shares to Tysadco upon exercise by Tysadco of the conversion rights under the Note; or if the Company breaches any covenant, agreement, or other term or condition of the Tysadco Note or the accompanying Tysadco SPA. Upon the occurrence of an Event of Default, as defined in the Tysadco SPA, then the outstanding balance shall immediately increase to 125% of the outstanding balance immediately prior to the occurrence of the such Event of Default, and a daily penalty of $500 will accrue until the default is remedied.

If the Company has not obtained approval from the holders of the Company’s common stock, as required by applicable rules and regulation of Nasdaq, the Company shall not issue any number of shares of common stock under the Tysadco Note that would exceed 4.99% of the shares of the Company’s common stock outstanding as of the date of the Tysadco Note. Additionally, the Company shall not effect any conversion of the Tysadco Note, and the Lender shall not have the right to convert any portion of the Tysadco Note or receive shares of common stock as payment of interest hereunder to the extent that after giving effect to such conversion or receipt of such interest payment, the Lender, together with any affiliates thereof, would beneficially own in excess of 4.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to such conversion or receipt of shares as payment of interest.

In connection with the issuance of the Tysadco Note and the Tysadco SPA, the Company will issue 294,000 shares of Common Stock (4,594 as adjusted for the September Stock Split) (the “Commitment Shares”) as additional consideration for the purchase of the Tysadco Note.

On September 11, 2025, the Company entered into a Settlement and Release Agreement with Tysadco Partners, LLC (“Tysadco”) to resolve all claims and disputes arising under the Promissory Note and the Securities Purchase Agreement, each dated February 25, 2025 (collectively, the “Transaction Documents”), and to terminate the financing arrangement in its entirety. Pursuant to the agreement, the Company issued 51,563 shares of its common stock in full settlement and satisfaction of the outstanding principal and accrued interest under the note, totaling $575,000, and in exchange for a mutual release of all claims under the Transaction Documents, including the Company’s release from the remaining undrawn tranches under the Securities Purchase Agreement.

The share issuance was a negotiated settlement to extinguish the note and terminate the financing arrangement, rather than a conversion pursuant to the note’s conversion provisions; accordingly, the Company accounted for the transaction as an extinguishment of debt in accordance with ASC 470-50, and not as a conversion or induced conversion under ASC 470-20. The 51,563 shares issued were measured at their aggregate fair value of $4,648,282, based on the $101.13 per share closing price of the Company’s common stock on the September 11, 2025 settlement date. The Company derecognized the $575,000 carrying amount of the note (inclusive of accrued interest) and recognized a loss on extinguishment of $4,648,282, representing the excess of the fair value of the common stock issued over the carrying amount of the note, within loss on extinguishment of debt in the consolidated statements of operations for the year ended December 31, 2025.

GS Capital Partners, LLC

On March 3, 2025, the Company executed and issued a Promissory Note (the “GSA Note”) in favor of GS Capital Partners, LLC (“GSA”) in the aggregate principal amount of $360,000 (the “GSA Principal”), and an accompanying Securities Purchase Agreement (the “GSA SPA”) and Registration Rights Agreement (the “RRA”).

The GSA Note was purchased by GSA for a purchase price of $300,000, representing an original issue discount of $60,000. The GSA Note bears interest at a rate of fifteen percent (15%) per annum, with the first twelve months of interest under the Note (equal to $54,000), being guaranteed and earned in full as of the issue date. Any amount of the GSA Principal or interest due under the GSA Note which is not paid when due shall bear interest at eighteen percent (18%) per annum (the “GSA Default Interest”). The GSA Note may not be prepaid in whole or in part except as explicitly set forth in the GSA Note. The Company shall make monthly payments on the GSA Note in the amount of $44,000, due and payable on the 3rd of each month commencing on June 3, 2025, and ending on February 3, 2026, with a final payment due and payable on March 3, 2026, in the amount equal to any remaining outstanding balance of the GSA Note.

GSA will have the right to convert all or any portion of the then-outstanding GSA Principal and interest including any GSA Default Interest, as defined in the GSA Note, into fully paid and non-assessable shares of common stock of the Company, par value $0.01 per share. Such conversion right is wholly contingent and subject to the approval of such conversion by a sufficient amount of holders of the Company’s common stock to satisfy the shareholder approval requirements for such action as provided in Nasdaq Rule 5635(d) (“Shareholder Approval”). GSA may, on any calendar day, at any time after Shareholder Approval of such conversion, convert all or any portion of the then-outstanding GSA Principal and interest (including any GSA Default Interest) into fully paid and non-assessable share of common stock, par value $0.01 per share, of the Company. The per share conversion price into which the GSA Principal, interest (including any GSA Default Interest) shall be equal to $416, subject to adjustment as provided in the Note (the “GSA Conversion Price”). If at any time the GSA Conversion Price for any conversion would be less than the par value of the common stock, then at the sole discretion of GSA, the GSA Conversion Price may equal such par value for such conversion, and the conversion amount shall be increased to include Additional Principal where “Additional Principal” means such additional amount to be added to the conversion amount to the extent necessary to cause the number of conversion shares issuable upon such conversion to equal the same number of conversion shares as would have been issued if the GSA Conversion Price had not been adjusted by GSA to the par value price. GSA shall be entitled to deduct $1,750 from the conversion amount in each notice of conversion to cover GSA’s fees associated with each notice of conversion. The GSA Note may not be converted into shares of the Company’s common stock if the conversion would result in GSA and its affiliates owning an aggregate of in excess of 4.99% of the then-outstanding shares of the Company’s common stock.

Among others, the following shall be considered events of default under the GSA Note (“GSA Event of Default”): if the Company fails to pay the GSA Principal amount or interest when due on the GSA Note; the Company fails to issue conversion shares to GSA upon exercise by GSA of the conversion rights under the GSA Note; or the Company breaches any covenant, agreement, or other term or condition of the GSA Note or the accompanying Securities Purchase Agreement, Registration Rights Agreement, Irrevocable Transfer Agent Instructions, or Warrants.

After an GSA Event of Default, in addition to all other rights under the GSA Note, GSA shall have the right to convert any portion of the GSA Note at any time at a price per share equal to the Alternate Price. The “Alternate Price” shall mean the lesser of (i) the applicable conversion price under the Note, (ii) the closing price of the Common Stock on the date of the GSA Event of Default, or (iii) $333.

The Company evaluated the conversion feature under ASC 815,Derivatives and Hedging, and determined that the embedded conversion option required bifurcation from the host debt instrument and separate accounting as a derivative liability measured at fair value, with changes in fair value recognized in earnings. At issuance, the Company recorded the embedded derivative at its fair value of approximately $506,000, net of allocation debt issuance costs of approximately $69,000, with a corresponding debt discount of approximately $264,000.

The fair value of the embedded derivative was estimated using a Monte Carlo simulation model, which the Company determined to be the most appropriate valuation technique given the settlement provisions. The embedded derivative is classified within Level 3 of the fair value hierarchy due to the use of significant unobservable inputs. Key inputs to the model at issuance and settlement were as follows:

On November 19, 2025, the Company and GSA refinanced the GSA Note into a new note payable in the amount of $625,000 with substantially similar terms. On November 19, 2025, GSA, converted the outstanding balance of the note payable into 14,710 shares of common under contract terms. As result of the refinancing the Company derecognized the derivative liability associated with the GSA Note. Immediately prior to settlement, the Company remeasured the embedded derivative to its fair value of approximately $28,000, recognizing a gain on change in fair value of approximately $547,000. Upon settlement, the Company derecognized the carrying value of the GSA Note, the unamortized debt discount, and the bifurcated derivative liability, and recognized a loss on settlement of approximately $40,000, included in ‘gain on settlement of derivatives’ in the accompanying consolidated statement of operations. As of December 31, 2025, no derivative liability related to the GSA Note remained outstanding. As of December 31, 2025, the outstanding balance of this note was $-0-.

Generating Alpha

On March 27, 2025, the Company executed and issued a Promissory Note (the “Generating Note”) in favor of Generating Alpha Ltd. (“Generating”) in the aggregate principal amount of $375,700 (the “Generating Principal”), and an accompanying Securities Purchase Agreement (the “Generating SPA”) and Registration Rights Agreement (the “Generating RRA”).

The Generating Note was purchased by Generating for a purchase price of $300,560, representing an original issue discount of $75,140. The Note bears interest at a rate of fifteen percent (15%) per annum, with the understanding that the first twelve months of interest under the Generating Node (equal to $56,355), shall be guaranteed and earned in full as of March 27, 2025. Any amount of the Generating Principal or interest due under the Generating Note which is not paid when due shall bear interest at eighteen percent (18%) per annum (the “Generating Default Interest”). The Company shall make monthly payments on the Generating Note (each an “Amortization Payment”) in the amount of $43,205.50, due and payable on the 6th of each month commencing on June 6, 2025, and ending on March 6, 2026. The Company may accelerate the payment date of any Amortization Payment by giving notice to Generating.

If the Company fails to pay any Amortization Payment when due, in addition to all other rights under the Generating Note, Generating shall have the right to convert at any time any portion of the Generating Note at a price per share equal to the Market Price. “Market Price” shall mean the lesser of (i) the then applicable conversion price under the Generating Note or (ii)80% of the lowest closing price of the Company’s shares of common stock, par value $0.01 on any trading day during the ten trading days prior to the conversion date. If an event of default occurs under the Generating Note, as defined in the Generating SPA, then, in addition to all other rights under the Generating Note, the Lender shall have the right to convert at any time any portion of the Generating Note at a price per share equal to the Alternate Price. “Alternate Price” shall mean the lesser of (i) the then applicable conversion price, (ii) the closing price of the common stock on the date of the event of default (provided, however, that if such date is not a trading day, then the next trading day after the event of default), or (iii) $0.52 ($33.28 as adjusted for the September Stock Split) (subject to adjustment as provided in the Generating Note).

The total cumulative number of shares of common stock issued to Generating under the Generating Note, together with the Generating SPA and the Generating RRA, may not exceed the requirements of Nasdaq Listing Rule 5635(d) (the “Nasdaq 19.99% Cap”), except that is the number of shares of common stock issued to Lender reaches the Nasdaq 19.99% Cap, the Company, at its election, will use reasonable commercial efforts to obtain stockholder approval of the Generating Note and the issuance of additional conversion shares, in accordance with the requirements of Nasdaq Listing Rule 5635(d) (the “Approval”). If the Company is unable to obtain such Approval, any remaining outstanding balance of the Generating Note must be repaid in cash.

Among others, the following shall be considered events of default under the Generating Note (“Generating Event of Default”): if the Company fails to pay an Amortization Payment when due on the Note; the Company fails to perform or observe any covenant, term, provision, condition, agreement, or obligation of the Company under the Generating Note, the Generating SPA, or the Generating RRA; the Company shall make an assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business.

After an Generating Event of Default, in addition to all other rights under the Generating Note, Generating shall have the right to convert any portion of the Generating Note at any time at a price per share equal to the Alternate Price. The “Alternate Price” shall mean the lesser of (i) the applicable conversion price under the Note, (ii) the closing price of the common stock on the date of the Generating Event of Default, or (iii) $0.52 ($33.28 as adjusted for the September Stock Split).

The Company evaluated the conversion feature under ASC 815,Derivatives and Hedging, and determined that the embedded conversion option required bifurcation from the host debt instrument and separate accounting as a derivative liability measured at fair value, with changes in fair value recognized in earnings. At issuance, the Company recorded the embedded derivative at its fair value of approximately $166,000, net of allocated debt issue costs of approximately $20,000 with a corresponding debt discount of $166,000.

The fair value of the embedded derivative was estimated using a Monte Carlo simulation model, which the Company determined to be the most appropriate valuation technique given the settlement provisions. The embedded derivative is classified within Level 3 of the fair value hierarchy due to the use of significant unobservable inputs. Key inputs to the model at issuance and settlement were as follows:

As of December 31, 2025, the outstanding balance amounted to $375,000.

Prosperity

On June 3, 2025 (the “Effective Date”), Olenox entered into a Promissory Note (the “Prosperity Note”) in favor of Prosperity Bank (the “Lender”) in the aggregate principal amount of $2,000,000 (the “Prosperity Principal”). The Prosperity Note evidences a revolving Line of Credit of Olenox with the Lender. The Prosperity Note is secured by the Company’s Certificate of Deposit held with the Lender with an approximate balance of $2,000,000.

The Prosperity Note bears interest at a rate of 5% per annum. Interest shall be calculated based on a year of 360 days. The Prosperity Note shall be due in full immediately upon Lender’s demand. If no demand is made, the Company will pay all outstanding principal and all accrued unpaid interest on June 2, 2026. In addition, the Company will pay regular monthly payments of all accrued interest due as of each payment date, beginning July 2, 2025. The Company may prepay all or a portion of the principal without penalty earlier than it is due. If a payment is 10 days or more late, the Company will be charged a late charge 5.00% of the unpaid portion of the regular payment. The Lender reserves a right of setoff in all of the Company’s accounts with the Lender (whether checking, savings, or some other account). The Company authorizes the Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the indebtedness against any and all such accounts. The Prosperity Note provides for a commercial guaranty by Michael McLaren.

Among others, the following shall constitute an event of default under the Prosperity Note (each an “Prosperity Event of Default”): if the Company fails to make any payment when due under the Prosperity Note; if the Company fails to comply with or to perform any other term, obligation, covenant, or condition contained in the Prosperity Note or any related documents; any representation or statement made by the Company to the Lender is false or misleading in any material respect; a change in ownership of twenty-five percent (25%) or more of the common stock of the Company; or a material adverse change in the Company’s financial condition. Upon an Prosperity Event of Default, the interest rate on the Prosperity Note shall be 18.00%.

The Prosperity Note contains covenants applicable to the Company pertaining to the line of credit, including, among others, that the Company agrees to: maintain books and records of its operations (the “Books and Records”) to the need for the line of credit; permit the Lender or any of the Lender’s representatives, inspect and/or copy the Books and Records; and to provide the Lender any documentation requested which support the reason for making any advance under the line of credit. Further, the Prosperity Note provides that the Company shall furnish from time to time to the Lender, upon the Lender’s request, copies of balance sheets of the Company, and copies of statements of income and cash flows of the Company.

Acquisition Notes

The following notes were acquired in the acquisition of NAHD.

A note payable to a third party dated June 9, 2022, for $350,000, with interest at 9.5% per annum and due on June 1, 2032. This note is secured. As of December 31, 2025, the outstanding balance amounted to $264,786.

A note payable to a third party dated October 10, 2024, for $150,000, with interest at 15.32% per annum and due on October 8, 2029. This note is unsecured. As of December 31, 2025, the outstanding balance amounted to $124,621.

A note payable to a third party dated June 28, 2022 of $500,000, with interest at 10% per annum and due June 28, 2024. This note is originally convertible at a conversion price equal to the lesser of (i) the price paid per share for Equity Securities by the Investors in the Qualified Financing multiplied by 0.80, and (ii) the quotient resulting from dividing $20,000,000 by the number of outstanding shares of common stock of Machfu immediately prior to the Qualified Financing. This note is currently in default. As of December 31, 2025 the outstanding balance amounted to $500,000 and is in default.

A note payable to a third party of $250,000 dated July 12, 2023, with interest at 10% per annum and due July 12, 2025. This note is originally convertible at a conversion price equal to the lesser of (i) the price paid per share for Equity Securities by the Investors in the Qualified Financing multiplied by 0.80, and (ii) the quotient resulting from dividing $20,000,000 by the number of outstanding shares of common stock of Machfu immediately prior to the Qualified Financing. As of December 31, 2025 the outstanding balance amounted to $250,000 and is in default.

A note payable to a related party of $1,674,096 dated February 23, 2023, with interest at 12% per annum and due on August 23, 2023. The Company assumed the convertible note payable held by the Company’s Chief executive officer, a related party. During the year ended December 31, 2025, $1,495,098 of principal and $513,171 of accrued interest was converted into 31,231 shares of common stock under contract terms. As of December 31, 2025, the outstanding principal balance amounted to $255,433. There wasno outstanding accrued interest as of December 31, 2025.

A note payable to a third party of $33,722 on various dates and due on demand. There isno interest on this note. As of December 31, 2025 the outstanding balance amounted to $0.

Giant Container Note

On December 18, 2025, in connection with the acquisition of Giant Group America Inc. (Note 11), the Company issued a promissory note payable to the seller as partial consideration for the acquisition. This note bears interest at a rate of five percent (5%) per annum. The principal balance of the note is $1,750,000, with quarterly payments of principal and interest commencing on April 15, 2026, until April 15, 2028, when the entire unpaid balance of principal and interest shall be due and payable in full. The Company may prepay all or any portion of the principal amount of this note without penalty.

The following tables summarize the above outstanding borrowings by financial statement line item:

The Company’s convertible notes payable are recorded net of unamortized original issue discount, bifurcated conversion/derivative features, and debt issuance costs. These amounts are accreted to interest expense over the contractual term of each instrument using the effective interest method.

Convertible notes payable outstanding at December 31, 2025 consisted of the following:

Interest cost recognized on convertible notes payable for the year ended December 31, 2025, disaggregated between the contractual interest coupon and the amortization of debt discount and issuance costs, was as follows:

The Company’s short-term notes payable had a weighted-average stated interest rate of 1.4% as of December 31, 2025. Several of these obligations are merchant cash advances that do not carry a stated interest rate; the cost of such advances is recognized as the excess of total scheduled remittances over the cash advanced and is amortized to interest expense over the repayment period. Giving effect to the imputed financing cost of these advances, the weighted-average effective interest rate on short-term notes payable was approximately 35.5% as of December 31, 2025.

Scheduled maturities of convertible notes payable, short-term notes payable and notes payable is as follows for the years ending December 31:

The Company’s debt is carried at amortized cost. The Company has not elected the fair value option under ASC 825-10 for any of its debt instruments. As of December 31, 2025, the Company estimated that the fair value of its debt approximated its carrying value, as the instruments bear interest at rates that approximate current market rates available to the Company for debt with similar terms and remaining maturities. The fair value of the Company’s debt was determined using a discounted cash flow analysis based on observable and unobservable inputs and is classified within Level 3 of the fair value hierarchy.

9. OIL AND GAS PROPERTIES

Oil and gas properties include the cost of properties, equipment and facilities for oil and natural-gas producing activities, excluding any asset retirement obligations. At December 31, 2025, the Company’s oil and gas properties, net consisted of the following:

The average depletion rate per barrel equivalent unit of production was $42.67 for the year ended December 31, 2025. Depletion expense for oil and natural gas properties was $199,430 for the year ended December 31, 2025.

10. ASSET RETIREMENT OBLIGATIONS

The Company’s asset retirement obligations primarily relate to the future plugging and abandonment of wells and related assets. The Company estimates the future plugging and abandonment costs of wells, the ultimate productive life of the properties, a risk-adjusted discount rate and an inflation factor in order to determine the current present value of this obligation. To the extent future revisions to these assumptions impact the present value of the existing asset retirement obligation liability, a corresponding adjustment is made to the oil and natural gas property balance.

The following table describes the changes to the Company’s asset retirement obligations liability for the year ended December 31, 2025:

11. ACQUISITIONS

NAHD

On February 2, 2025, the Company entered into the Merger Agreement NAHD. Following the Merger, NAHD and its operating subsidiaries are indirect, wholly owned subsidiaries of the Company. As merger consideration, the Company issued four million (4,000,000) Preferred Shares to NAHD’s shareholders. 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 were completed and closed. The Company has accounted for this transaction as a business combination and has applied the purchase method of accounting in accordance with GAAP.

The following table summarizes the purchase price allocation of the NAHD assets acquired and liabilities assumed.

The purchase price allocation above is based on the fair values of the assets and liabilities of NAHD as of the closing date of the NAHD acquisition. The majority of the value of assets acquired and liabilities assumed was measured based on inputs that are not observable in the market and are therefore considered Level 3 inputs. The goodwill recognized as a result of is attributable primarily to expected synergies and the assembled workforce. None of the goodwill is expected to be deductible for income tax purposes.

The Company issued 4,000,000 shares of non-publicly traded Class A Convertible Preferred Stock (“Series A Preferred”) as consideration in its acquisition of New Asia Holdings, Inc. The consideration was measured at its acquisition-date fair value of $18,800,000 ($4.70 per share) as of February 2, 2025, which was a Level 3 measurement under ASC 820. Fair value was estimated using a hybrid method in which the issuer’s total equity value was derived under a market approach by calibrating (“backsolving”) to the closing price of the Company’s publicly traded common stock on the valuation date, and that value was allocated among equity classes using a Black-Scholes option-pricing model with a breakpoint analysis under two probability-weighted scenarios (60% /40%) reflecting whether the conversion right is approved. Significant unobservable inputs included an expected time to liquidity of 3.0 years, a risk-free rate of 4.3%, a dividend yield of 0.0%, and expected volatility of 95.0% and 75.0% under the respective scenarios.

The fair values of the acquired tangible and intangible assets were determined using the cost and income approaches, including the multi-period excess earnings, lost profits, and relief-from-royalty methods. The trade name intangible asset was valued using the relief-from-royalty method under the income approach. The developed technology intangible asset was valued using the relief-from-royalty method under the income approach, which estimates the present value of the after-tax royalty payments the Company is relieved from paying by owning the technology. The customer relationship intangible assets, which represent the value of existing customer contracts, were valued using the lost profits method under the income approach. The resulting cash flows were discounted at rates determined through a weighted average return on assets analysis. The fair value of acquired property and equipment was determined using the cost approach, which utilized asset listings and cost records with consideration for the reported age, condition, utilization, and economic support of the assets. Oil and natural gas properties were valued using the discounted cash flow method under the income approach, which takes into account production and mineral interest forecasts, projected commodity prices and pricing differentials, and estimates of future capital and operating costs, discounted using a risk adjustment based on expected recoverability. The fair values of asset retirement obligations and inventories were calculated in accordance with the Company’s internal policies as described in Note 3. The fair values of various current assets and liabilities, including accounts receivable and accounts payable, approximate their carrying values as of the closing date of the NAHD acquisition because of the short-term nature of the instruments. The goodwill from this acquisition is included in the SaaS segment.

The results of operations attributable to the NAHD acquisition since the acquisition date have been included in the consolidated statements of operations and include $666,084 in total revenue and $1,765,172 of net loss for the year ended December 31, 2025.

County Line

On April 8, 2025 (the “Effective Date”), the Company entered into an asset purchase agreement (the “Asset Purchase Agreement”) with County Line Industrial LLC (“County Line”) to acquire all of the assets of County Line (the “Assets”) for a purchase price of $1,000,000 (the “Purchase Price”). The acquisition of County Line’s business includes the hiring of County Line’s existing employees, and the hiring of County Line’s sole member.

Pursuant to the Asset Purchase Agreement, the Company was to pay the Purchase Price as follows: a cash payment in the amount of $125,000 due on or before April 15, 2025, a cash payment in the amount of $100,000 due on or before May 15, 2025; a cash payment in the amount of $250,000 due on or before July 15, 2025; and a cash payment in the amount of $525,000 due on or before January 31, 2026. The payments will bear no interest. In addition to the Purchase Price, the Company shall pay its current payable due to County Line, in the amount of $76,000, on or before May 1, 2025. County Line shall pay all obligations of its three vehicles for an approximate total amount of $92,000. The Asset Purchase Agreement was amended during the fourth quarter of 2025 such that the Company was only required to remit $225,000 to acquire the assets.

The Company evaluated the assets acquired as well as the in-place workforce obtained as a result of the purchase of the Assets and determined that the assets and related in-place workforce did not represent an integrated set which included a substantive process. As a result, the Company has accounted for the County Line purchase as an asset acquisition and has allocated the consideration transferred to the Assets on a relative fair value basis. Fair value for the Assets was based on the cost approach, which utilized asset listings and cost records with consideration for the reported age, condition, utilization and economic support of the assets.

Sherman Oil

On May 28, 2025, the Company entered into an asset purchase agreement with Sherman Oil Company LLC and its affiliates (“Sherman”), pursuant to which the Company will acquire approximately 1,600 acres of held-by-production oil leases for oil wells and related equipment located in Wichita County and Wilbarger County, Texas for a purchase price of $1,000,000.

The Company evaluated the assets acquired from Sherman Oil and determined that the assets did not represent an integrated set which included a substantive process. As a result, the Company has accounted for the Sherman Oil assets as an asset acquisition and has allocated the consideration transferred on a relative fair value basis. Fair value for the acquired assets was based on the relative value of the discounted cash of the estimated oil and gas reserves acquired. None of the acquired Sherman leases included unproved properties.

Giant Group

On December 18, 2025 the Company entered into a stock purchase agreement (the “Giant Stock Purchase Agreement”) with Daniel Kroft (the “Seller”) to acquire one hundred percent (100%) of the issued and outstanding securities of Giant Group America Inc. (“Giant”), which operates, through its wholly-owned subsidiary, Giant Containers Inc. (the “Giant Subsidiary”), as a designer and seller of innovative modular shipping container buildings. The purchase price for the acquisition of Giant is $3,500,000 (the “Giant Purchase Price”). The transaction includes the acquisition of Giant’s existing customers and business pipeline,

Pursuant to the Giant Stock Purchase Agreement, the Company will pay the Giant Purchase Price to the Seller as follows: $1,000,000 paid to the Seller in cash at closing; $750,000 paid to the Seller via the issuance of shares of common stock of the Company, par value $0.01, in an agreed share price such that the Seller shall be issued 215,000 shares of Company common stock; and $1,750,000 paid to the Seller via the issuance of a promissory note in favor of Seller (the “Giant Promissory Note”) paid via quarterly installment payments over twenty-four months commencing on April 15, 2026 and ending April 15, 2028, when the entire unpaid balance of principal and interest shall be due and payable in full.

The following table summarizes the purchase price allocation of the Giant assets acquired and liabilities assumed.

The consideration paid for Giant consisted of a promissory note, the fair value of which was determined to be $1,477,000 as of the December 18, 2025 acquisition date using a discounted cash flow analysis under the income approach, in which the contractual principal payments under the note were discounted to present value at a market-based rate of 14.33% reflecting the credit risk and terms of the instrument. The Company also issued 215,000 restricted shares of its common stock as consideration, the fair value of which was determined to be $518,000 based on the quoted market price of the Company’s common stock of $2.41 per share on the December 18, 2025 acquisition date. The fair values of the acquired intangible assets were determined using the income approach. The trade name intangible asset was valued using the relief-from-royalty method, which estimates the present value of the after-tax royalty payments the Company is relieved from paying by owning the trade name, applying a pre-tax royalty rate and a discount rate. The customer relationship intangible assets, which represent the value of existing customer relationships, were valued using the multi-period excess earnings method, which isolates the after-tax cash flows attributable to the existing customers net of contributory asset charges and discounts them to present value. The discount rates applied to the intangible assets were derived from the Company’s weighted average cost of capital and reconciled to the internal rate of return for the transaction through a weighted average return on assets analysis. The fair values of acquired net working capital and other current assets and liabilities approximate their carrying values as of the closing date of the acquisition because of the short-term nature of the instruments. The goodwill from this acquisition is included in the construction segment.

The results of operations attributable to the Giant acquisition since the acquisition date have been included in the consolidated statements of operations and include $-0- in total revenue and $179,322 of net loss for the year ended December 31, 2025.

Unaudited pro-forma information

The following unaudited pro forma consolidated results of operations for the years ended December 31, 2025 and 2024 assume the acquisitions of NAHD and Giant were completed on January 1, 2024:

12. INTANGIBLE ASSETS AND GOODWILL

Intangible assets, which were recorded during the year ended December 31, 2025 in connection with the NAHD and Giant acquisitions (Note 11), is comprised of customer relationships, developed technology and trade names, and consisted of the following as of December 31, 2025:

Amortization expense recognized on intangible assets during the year ended December 31, 2025 was $365,702. Amortization expense related to intangible assets was recorded within general and administrative expenses in the accompanying consolidated statements of operations.

Estimated future amortization expense for intangible assets held at December 31, 2025 is as follows:

The Company tests goodwill for impairment at the reporting unit level annually as of December 31, and more frequently if events or circumstances indicate that the carrying value of a reporting unit may exceed its fair value. The Company has three reporting units, goodwill is allocated to the reporting unit that benefits from the synergies arising from each acquisition.

Changes in the carrying amount of goodwill during the year ended December 31, 2025 were as follows:

The Company performed its annual goodwill impairment assessment as of December 31, 2025. For each reporting unit, the Company elected to perform a qualitative assessment to determine whether it was more likely than not that the fair value of the reporting unit was less than its carrying amount.

In performing this assessment, the Company considered the adverse conditions affecting the consolidated entity, including the substantial doubt about its ability to continue as a going concern described in Note 2, the consolidated gross loss, negative working capital, the full-cost ceiling write-down within the oil and gas operations, and the decline in the Company’s common stock price during the year. The Company determined that these conditions arose principally at the corporate holding-company level and within the oil and gas operations, which are not reporting units to which goodwill is assigned, and that they were not indicative of a decline in the fair value of the Construction and SaaS reporting units that carry goodwill.

The Company also considered the following factors specific to the reporting units carrying goodwill:

Based on the totality of these factors, the Company concluded that it was not more likely than not that the fair value of any reporting unit was less than its carrying amount, and accordingly no goodwill impairment was recognized.

13. LEASES

Finance Lease

The Company leased certain equipment under non-cancellable finance lease agreements. The leases have remaining lease terms of less than one year. The Company has elected the short-term lease recognition exemption for all leases with a term of 12 months or less. Lease payments for short-term leases are recognized as expense on a straight-line basis over the lease term, and noright-of-use asset orlease liability is recorded for these leases. The Company has also elected the practical expedient to not separate lease components from non-lease components and instead accounts for each lease component and its associated non-lease components as a single lease component.

Supplemental balance sheet information related to the Company’s finance lease as of December 31, 2024, is as follows:

As of December 31, 2024 the balance of right-of-use asset was deemed impaired and the Company recorded an impairment loss of $1,015,304. The impairment was due to non-use of such assets. The Company believes it will not be able to recognize the value of the asset further and has thus deemed it fully impaired. Additionally, the Company recorded an amount of $551,502 as an impairment loss for additional potential amounts due through the estimated remainder of the lease.

Operating Lease

The Company leases its manufacturing facility under the terms of an operating lease in Conroe, Texas. The lease has an effective date of October 1, 2025 and ends on October 30, 2027. The Company is required to make monthly lease payments of $16,000 throughout the term of the lease.

The Company recognized a right of use asset and lease liability in the amount of $348,822 based on an incremental borrowing rate of 10.25%. As the lease did not provide an implicit rate, the Company used an incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments.

Anticipated future lease costs, which are based in part on certain assumptions to approximate minimum annual rental commitments under non-cancellable leases, are as follows:

Total lease expense amounted to $114,821 and $370,238 for the years ending December 31, 2025 and 2024, respectively. The Company paid $114,821 and $370,238 in lease payments during the years ended December 31, 2025 and 2024, respectively, which is included within operating cash flows.

14. CONSTRUCTION BACKLOG

The following represents the backlog of signed construction and engineering contracts in existence at December 31, 2025 and 2024, 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 December 31, 2025 and 2024 on which work has not yet begun:

The Company’s remaining backlog as of December 31, 2025 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 December 31, 2025, 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. The Company’s backlog, which represents the remaining unsatisfied performance obligations on contracts as of December 31, 2025, is expected to be satisfied within one year.

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.

15. 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 is currently organized its operations into three segments: Construction, Software-as-a-Service (“SaaS”) and Oil and Gas. We allocate 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 SG ECHO and other modules 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. The medical segment had minimal activity during the year ended December 31, 2025 and is included within the Corporate segment. Corporate consist 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:

16. INCOME TAXES

The Company’s provision (benefit) at statutory rates for income taxes consists of the following for the year ended December 31, 2025 and 2024:

A reconciliation of the federal statutory rate to 0.0% for the year ended December 31, 2025 and 2024 to the effective rate for income from operations before income taxes is as follows:

The tax effects of these temporary differences along with the net operating losses, net of an allowance for credits, have been recognized as deferred tax assets (liabilities) at December 31, 2025 and 2024 as follows:

The Company establishes a valuation allowance, if based on the weight of available evidence, it is more likely than not that some portion or all of the deferred assets will not be realized. During 2024 certain adjustments were made to the Company’s net operating loss carry-forward tax asset for IRC Section 382 limitations. The valuation allowance increased by $3,728,360 and $4,922,575 during the years ended December 31, 2025 and 2024, respectively.

As of December 31, 2025, the Company had a net operating loss carry forward of approximately $80.9 million for Federal and State tax purposes. The net operating loss expires beginning 2030 through 2037 for those losses generated in 2017 and prior years. Approximately $74 million of such net operating losses will carry-forward indefinitely and be available to offset up to 80% of future taxable income each year. Subsequent to December 31, 2019, the Coronavirus Aid, Relief and Economic Security Act (CARES Act) was passed, which temporarily removes such 80% limitation for years 2019 and 2020. The Company’s net operating loss carry-forward may be subject to annual limitations, which could reduce or defer the utilization of the losses as a result of an ownership change as defined in Section 382 of the Internal Revenue Code.

As required by the provisions of ASC 740, the Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more likely than not threshold, the amount recognized in the consolidated financial statements is the largest benefit that has a greater than 0 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. Differences between tax positions taken or expected to be taken in a tax return and the net benefit recognized and measured pursuant to the interpretation are referred to as unrecognized benefits. A liability is recognized (or amount of net operating loss or amount of tax refundable is reduced) for an unrecognized tax benefit because it represents an enterprises potential future obligation to the taxing authority for a tax position that was not recognized as a result of applying the provisions of ASC 740.

The Company recognizes interest and penalties related to uncertain tax positions in general and administrative expenses. As of December 31, 2025, the Company hasno unrecognized tax positions, including interest and penalties. The Company files returns in the United States Federal tax jurisdiction and various other state jurisdictions.

In accordance with ASU 2023-09, the following table presents income taxes paid (net of refunds) for the years ended December 31, 2025 and 2024, disaggregated between domestic federal and state and local jurisdictions. No individual state jurisdiction exceeded 5% of the total income taxes paid in either period.

The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. Tax years 2022 through 2025 remain subject to examination by the federal taxing authority, and tax years 2021 through 2025 remain subject to examination by state taxing authorities. The Company’s 2025 federal and state returns are currently on extension and will be subject to examination upon filing. In addition, because the Company has net operating loss carryforwards, the taxing authorities may examine tax years in which those carryforwards arose to the extent they are utilized in an open year.

17. 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 as of December 31, 2025, 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 tables below reflect the potentially dilutive securities excluded from the Company’s earnings per share calculation:

18. STOCKHOLDERS’ EQUITY

Stock splits

On May 2, 2024, the Company effected a 1-for-20 reverse stock split. On September 8, 2025, the Company effected a 1-for-64 reverse stock split. On May 8, 2026, the Company effected a 1-for-10 reverse stock split. All share and per share amounts within the accompanying consolidated financial statements have been adjusted to reflect all stock splits for the years ended December 31, 2025 and 2024, and the May 8, 2026 reverse stock split.

Equity Purchase Agreement

On February 7, 2023, the Company entered into an Equity Purchase Agreement (the “EP Agreement”) and related Registration Rights Agreement (the “Rights Agreement”) with Peak One, pursuant to which the Company has the right, but not the obligation, to direct Peak One to purchase up to $10,000,000 (the “Maximum Commitment Amount”) in shares of the Company’s common stock in multiple tranches upon satisfaction of certain terms and conditions contained in the EP Agreement and the Rights Agreement which includes but is not limited to filing a registration statement with the SEC and registering the resale of any shares sold to Peak One. Further, under the EP Agreement and subject to the Maximum Commitment Amount, the Company has the right, but not the obligation, to submit a Put Notice, as defined in the EP Agreement, from time to time to Peak One (i) in a minimum amount not less than $25,000 and (ii) in a maximum amount up to the lesser of (a) $750,000 or (b)200% of the Average Daily Trading Value, as defined in the EP Agreement.

In connection with the EP Agreement, the Company issued to Peak One Investments 117 shares of its common stock, and agreed to file a registration statement registering the common stock issued or issuable to Peak One and Peak One Investments under the EP Agreement for resale with the SEC within 60 calendar days of the EP Agreement, as more specifically set forth in the Rights Agreement. The registration statement was declared effective on April 14, 2023

The obligation of Peak One to purchase the Company’s common stock under the EP Agreement began on the date of the EP Agreement, and ends on the earlier of (i) the date on which Peak One shall have purchased common stock pursuant to the EP Agreement equal to the Maximum Commitment Amount, (ii) thirty six (36) months after the date of the EP Agreement, (iii) written notice of termination by the Company or (iv) the Company’s bankruptcy or similar event ((i), (ii) and (iii) collectively, the “Commitment Period”), all subject to the satisfaction of certain conditions set forth in the EP Agreement.

During the Commitment Period, the purchase price to be paid by Peak One for the common stock under the EP Agreement will be 97% of the Market Price, which is defined as the lesser of the (i) closing bid price of the common stock on its principal market on the trading day immediately preceding the respective Put Date, as defined in the EP Agreement, or (ii) lowest closing bid price of the common stock during the Valuation Period, as defined in the EP Agreement, in each case as reported by Bloomberg Finance L.P or other reputable source designated by Peak One.

The EP Agreement and the Rights Agreement contain customary representations, warranties, agreements and conditions to completing future sale transactions, indemnification rights and obligations of the parties. Among other things, Peak One represented to the Company, that it is an accredited investor (as such term is defined in Rule 501(a) of Regulation D under the Securities Act of 1933), and the Company sold the securities in reliance upon an exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933 and Regulation D promulgated thereunder.

During the years ended December 31, 2025 and 2024, the Company issued 0 and 21 shares of common stock, respectively, under the EP Agreement for $28,867.

Issuance of common stock and warrants for debt issuance

During the year ended December 31, 2024, the Company issued 23 shares of common stock and warrants for issuances of debt. The value of the shares and warrants amounted to $251,361, which was originally recorded as a debt discount and fully amortized when the note was extinguished.

Restricted Stock Units

During the year ended December 31, 2024, the Company issued 806 shares of common stock with a value of $1,194,597 for vested restricted stock units.

Conversion

During the year ended December 31, 2024, Peak One converted $802,087 of its principal balance and accrued interest into 241 shares of common stock of the Company. Such conversion was within the terms of the agreement with no gains or losses recognized on the transactions.

Settlement of Accounts Payable

During the years ended December 31, 2025 and 2024,2,000 and 332 shares of common stock, respectively, were issued resulting from the settlement of accounts payable in the amount of $149,545 and $1,259,681, respectively. For the year ended December 31, 2024, a gain of $121,834 which has been included in additional paid in capital, due to the fact the settlement of accounts payable was from a related party at the time of the transaction. For the year ended December 31, 2025, the Company recognized a loss of $48,179.

Noncontrolling Interest

During the year ended December 31, 2024, SG DevCorp recorded $2,976,140 of additional equity transactions which related to transactions in its own stock from debt issuances to third parties, of which $1,803,980 is recorded in additional paid in capital and $1,290,917 is recorded in noncontrolling interest.

Common Stock Deemed Dividend

During the year ended December 31, 2024, the Company recorded a common stock deemed dividend in the amount of $475,713 from the Conversion Deemed Dividend which resulted from the change in fair value of the conversion prices of the underlying agreements.

Inducements

On March 8, 2024, the Company entered into a warrant inducement agreement (the “Inducement Agreement”) with a certain holder (the “Holder”) of warrants to purchase shares of the Company’s common stock issued in a private placement offering that closed on October 27, 2021 (the “Existing Warrants”). Pursuant to the Inducement Agreement, the Holder of the Existing Warrants agreed to exercise for cash the Existing Warrants to purchase up to 148 shares of common stock, at an exercise price of $3,330 $3,330 per share. The Company recognized common stock deemed dividends in the amount of $1,162,436 which resulted from the excess initial fair value of the New Warrant Shares issued described below. In addition, the Company incurred $454,867 of equity related costs which have been netted with the net proceeds from the July 2022 Offering. The Company received aggregate gross proceeds of approximately $494,213, before deducting placement agent fees and other expenses payable by the Company.

In consideration of the Holders immediate exercise of the Existing Warrants, the Company issued unregistered warrants (the “New Warrants”) to purchase 297 shares of common stock (200% of the number of shares of common stock issued upon exercise of the Existing Warrants) (the “New Warrant Shares”) to the Holder.

In addition, pursuant to the Inducement Agreement, the Company agreed not to issue any shares of common stock or common stock equivalents, as defined in the Inducement Agreement, or to file any other registration statement with the SEC, in each case, subject to certain exceptions) until thirty (30) days after the closing. The Company has also agreed not to effect or agree to effect any Variable Rate Transaction, as defined in the Inducement Agreement, until sixty (60) days after closing.

The Company agreed in the Inducement Agreement to file a registration statement to register the resale of the New Warrant Shares (the “Resale Registration Statement”) on or before thirty (30) days from the initial closing of the transactions contemplated by the Inducement Agreement, and to use commercially reasonable efforts to have such Resale Registration Statement declared effective by the SEC within sixty (60) days (or, in the event of a full review, ninety (90) calendar days) following the date of filing the Resale Registration Statement.

Under the Inducement Agreement, to the extent required under the rules and regulations of the Nasdaq Stock Market, the Company agreed to hold a special or annual meeting of shareholders no later than the 60th calendar date following the date of the Inducement Agreement for the purpose of seeking the Stockholder Approval (as defined below). If the Company does not obtain Stockholder Approval at the first meeting, the Company shall call a meeting every ninety (90) days thereafter to seek Stockholder Approval until the earlier of the date Stockholder Approval is obtained or the New Warrants are no longer outstanding.

Maxim served as the Company’s financial advisor in connection with the transactions described in the Inducement Agreement, and the Company paid Maxim (i) a cash fee equal to 7.0% of the aggregate gross proceeds received from the Holder upon exercise of the Existing Warrants and the exercise of the New Warrants, and (ii) $10,000 for legal fees and other out-of-pocket expenses.

May 2024 Securities Purchase Agreement

On May 3, 2024, the Company entered into a Securities Purchase Agreement (the “May 2024 Securities Purchase Agreement”) for a private placement (the “May 2024 Private Placement”) with a single accredited institutional investor (the “May 2024 Purchaser”). Pursuant to the May 2024 Securities Purchase Agreement, the May 2024 Purchaser agreed to purchase 203 shares (the “Shares”) of the Company’s common stock, and pre-funded warrants to purchase 1,952 shares of common stock in lieu thereof (the “Pre-Funded Warrants”) and common warrants (the “Common Warrants”) to purchase up to 4,310 shares of common stock. Pursuant to the May 2024 Securities Purchase Agreement, the combined offering price of each Shares and Common Warrants was set at $1,860 and the combined offering price of each Pre-Funded Warrants and Common Warrants was set at $1,860. The Shares, the Pre-Funded Warrants, the Common Warrants and the shares of common stock issuable upon exercise of the Pre-Funded Warrants and Common Warrants are collectively referred to herein as the “Securities”.

The Pre-Funded Warrants are exercisable immediately following the date of issuance, may be exercised at any time until all of the Pre-Funded Warrants are exercised in full, and have an exercise price of $0.0001 per share. The Common Warrants are exercisable immediately following the date of issuance, have a term of five years from the effective date of the Registration Statement registering the Shares and the shares of common stock issuable upon exercise of the Pre-Funded Warrants and the Common Warrants and have an exercise price of $1,700 per share. A holder may not exercise any Pre-Funded Warrants that would cause the aggregate number of shares of common stock beneficially owned by the holder to exceed 9.99% of the Company’s outstanding common stock immediately after exercise. A holder may not exercise any Common Warrants that would cause the aggregate number of shares of common stock beneficially owned by the holder to exceed 4.99% of the Company’s outstanding common stock immediately after exercise. The Pre-Funded Warrants and the Common Warrants are subject to adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the common stock and also upon any distributions for no consideration of assets to the Company’s stockholders. In the event of certain corporate transactions, the holders of the Pre-Funded Warrants and the Common Warrants will be entitled to receive, upon exercise of the Pre-Funded Warrants and the Common Warrants, respectively, the kind and amount of securities, cash or other property that the holders would have received had they exercised the Pre-Funded Warrants and the Common Warrants immediately prior to such transaction. The Pre-Funded Warrants and the Common Warrants do not entitle the holders thereof to any voting rights or any of the other rights or privileges to which holders of common stock are entitled.

In the event of a Fundamental Transaction, which term is defined in the Pre-Funded Warrants and the Common Warrants and generally includes (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, as defined in the Pre-Funded Warrants and Common Warrants, in which the Company is not the surviving entity (other than a reincorporation in a different state, a transaction for changing the Company’s name, or a similar transaction pursuant to which the surviving company remains a public company), (ii) the Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of the Company’s assets in one or a series of related transactions, which, for the avoidance of doubt, shall not include such transactions that do not require approval of the Company’s stockholders, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer, whether by the Company or another Person, is completed pursuant to which holders of common stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of more than 50% of the voting power of the common equity of the Company, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the common stock or any compulsory share exchange pursuant to which the common stock is effectively converted into or exchanged for other securities, cash or property other than a stock split, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination, including, without limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement, with another Person or group of Persons whereby such other Person or group of Persons acquires more than 50% of the voting power of the common equity of the Company, the holders of the Pre-Funded Warrants and Common Warrants will be entitled to receive upon exercise of the Pre-Funded Warrants and the Common Warrants the kind and amount of securities, cash or other property that the holders would have received had they exercised such warrants immediately prior to such Fundamental Transaction. Additionally, as more fully described in the Common Warrants, in the event of certain Fundamental Transactions, the holders of the Common Warrants will be entitled to receive consideration in an amount equal to the Black Scholes Value, as defined in the Common Warrants, of the remaining unexercised portion of the Common Warrants on the date of consummation of such Fundamental Transaction.

The Private Placement closed on May 7, 2024. The Company received net proceeds from the Private Placement of $3,590,386.

November 2024 inducement

On November 6, 2024, the Company entered into an agreement with a single investor that is an existing holder of warrants to purchase shares of common stock of the Company for cash wherein the investor agreed to exercise the warrants to purchase up 4,310 shares of common stock at a reduced exercise price of $560 per share. The net proceeds amounted to $2,104,868. In consideration for the exercise of the warrants for cash, the investor received new warrants to purchase up to an aggregate of 8,621 shares of common stock. The new warrants are exercisable after stockholder approval at an exercise price of $560 per common share and will expire five years after stockholder approval. The Company recognized common stock deemed dividends in the amount of $3,983,447 which resulted from the excess initial fair value of the new warrants issued.

Pre-funded warrant exercises

Commencing on July 31, 2025, and ending on August 8, 2025, the Company received exercises notices for a total of 27,975 Pre-Funded Warrants and were correspondingly issued 27,975 shares of common stock of the Company. Additionally, during the year ended December 31, 2024,46 Pre-Funded Warrants were exercised.

Issuance of common stock for preferred

During the year ended December 31, 2025, the Company issued 3,913 shares of common stock for the relinquishment of 151,360 preferred shares, which were issued in connection with the Merger of NAHD. Such shares were issued to former stockholders of NAHD. The transaction was accounted for as an equity-to-equity exchange with a reduction to the preferred stock value and a corresponding increase to common stock and additional paid-in capital.

April Private Placement

On April 14, 2025, the Company consummated a private placement (the “April Private Placement”) pursuant to a securities purchase agreement (the “April Purchase Agreement”) with institutional investors (the “April Purchasers”) for the purchase and sale of approximately $8 million of shares of the Company’s common stock and investor warrants at a price of $251 per Common Unit. The Company issued 3,913 shares of common stock in this transaction. This offering consisted of the sale of Common Units (or Pre-Funded Units), each consisting of (i) one (1) share of common stock or one (1) Pre-Funded Warrant (the “April Pre-Funded Warrants”), (ii) one (1) Series A PIPE Common Warrant to purchase one (1) share of common stock per warrant at an exercise price of $402 (the “Series A Warrant”) and (iii) one (1) Series B PIPE Common Warrant to purchase one (1) share of common stock per warrant at an exercise price of $627 (the “Series B Warrant” and together with the Series A Warrant, the “Series Warrants”).

The initial exercise price of each Series A Warrant is $402 per share of common stock. The Series A Warrants are exercisable following stockholder approval and expire five (5) years thereafter. The number of securities issuable under the Series A Warrant is subject to adjustment as described in more detail in the Series A Warrant. The initial exercise price of each Series B Warrant is $627 per share of common stock or pursuant to an alternative cashless exercise option. The Series B Warrants are exercisable following stockholder approval and expire two and one-half (2.5) years thereafter. The number of securities issuable under the Series B Warrant is subject to adjustment as described in the Series B Warrant.

Each April Pre-Funded Warrant is exercisable for one share of common stock for $0.0001 immediately upon issuance until all of the April Pre-Funded Warrants are exercised in full. The number of April Pre-Funded Warrant shares are subject to adjustments for stock splits, recapitalizations, and reorganizations. The shares of common stock, shares underlying the Series A Warrants and shares underlying the Series B Warrants are collectively referred to as the “Securities”.

In connection with the April Private Placement, the Company entered into a registration rights agreement with the April Purchasers on April 14, 2025 (the “April 2025 Registration Rights Agreement”), pursuant to which the Company is required to file a registration statement covering the resale of the Securities by April 30, 2025.

Pursuant to the terms of the letter of engagement with D. Boral Capital LLC (the “Placement Agent”), the Company paid the Placement Agent a placement agent commission equal to 6.0% of the aggregate gross proceeds from the offering, and an additional 1.0% for non-accountable expenses. In addition, the Company agreed to reimburse the Placement Agent for certain of out-of-pocket expenses, including for reasonable legal fees and disbursements for its counsel. Pursuant to the Company’s letter of engagement with Aegis Capital Corp. (“Aegis”), the Company has agreed to pay Aegis a commission equal to 5.0% of the aggregate gross proceeds from the offering.

The April Purchase Agreement contains customary representations and warranties, indemnification rights, agreements and obligations, conditions to closing and termination provisions. The offering closed on April 14, 2025. The net proceeds to the Company from the Offering were $6,636,205, after deducting placement agent fees and the payment of other offering expenses associated with the offering that were payable by the Company.

On July 17, 2025, the Company entered into an Exchange Agreement (the “Exchange Agreement”) by and among the Company and the April Purchasers. Pursuant to the Exchange Agreement, the parties intended to effect a voluntary security exchange transaction (the “Exchange Transaction”) whereby the April Purchasers exchanged the Series Warrants previously purchased in the April Private Placement for an aggregate of 60,000 shares of Series B Preferred Stock (the “Exchange Shares”), with the Series B Convertible Preferred Stock’s rights and preferences being set forth on that certain certificate of designation (the “Certificate of Designation”) of the Company, filed with the State of Delaware on July 17, 2025. The Exchange Agreement contains other customary provisions including representations and warranties for the Company and the April Purchasers, governing law, and notice.

May 2025 ELOC

On May 29, 2025 the Company entered into a Stock Purchase Agreement (the “ELOC Purchase Agreement”) with Generating Alpha Ltd., a Saint Kitts and Nevis Company (the “ELOC Purchaser”), whereby the Company shall issue and sell to the ELOC Purchaser, subject to the terms and conditions of the ELOC Purchase Agreement, up to an aggregate of $100 million (the “ELOC Commitment Amount”) of newly issued shares (the “ELOC Shares”) of the Company’s common stock.

The Company does not have a right to commence any sales of its common stock to the ELOC Purchaser under the ELOC Purchase Agreement until the time when all of the conditions to the Company’s right to commence sales of common stock to the ELOC Purchaser set forth in the ELOC Purchase Agreement have been satisfied, including that a registration statement of such shares is declared effective by the SEC and the final form of prospectus is filed with the SEC (the “ELOC Commencement Date”). Over the period ending on the earlier of May 8, 2026, or the date on which the ELOC Purchaser shall have purchased ELOC Shares pursuant to the ELOC Purchase Agreement for an aggregate purchase price of the ELOC Commitment Amount, the Company will control the timing and amount of any sales of ELOC Shares to the ELOC Purchaser. Actual sales of shares of common stock to the ELOC Purchaser under the ELOC Purchaser Agreement will depend on a variety of factors to be determined by the Company from time to time, including, among others, market conditions, the trading price of the common stock and determinations made by the Company as to appropriate sources of funding.

The purchase price of ELOC Shares that the Company elects to sell to the ELOC Purchaser pursuant to the ELOC Purchase Agreement will be equal to the lowest traded price of Common Stock during the seven (7) trading days prior to the applicable closing date multiplied by 90%.

Series A Preferred Stock

As of December 31, 2025, the Company had 3,848,640 shares of Series A Preferred Stock issued and outstanding. The rights and privileges of the Series A Preferred Stock are as follows:

Series B Preferred Stock

As of December 31, 2025, the Company had 2,084 shares of Series B Preferred Stock issued and outstanding. The rights and privileges of the Series B Preferred Stock are as follows:

Series C Preferred Stock

As of December 31, 2025, the Company had 4,500 shares of Series C Preferred Stock issued and outstanding. The rights and privileges of the Series C Preferred Stock are as follows:

The Company received proceeds of 2,799,500 from the issuance of Series C Preferred Stock during the year ended December 31, 2025.

Series D Preferred Stock

As of December 31, 2025, there wereno outstanding shares of Series D Preferred Stock issued and outstanding. The rights and privileges of the Series D Preferred Stock are as follows:

19. WARRANTS

In connection with the issuance of the Holdings Debenture in January 2024, the Company issued the Peak Warrant #3 to purchase up to 29 shares of the Company’s common stock to Peak Ones designee, as described in the January 2024 Purchase Agreement. The Peak Warrant #3 expires five years from its date of issuance. The Peak Warrant #3 is exercisable, at the option of the holder, at any time, for up to 29 of shares of common stock of the Company at an exercise price equal to $6,780 (the Exercise Price), subject to adjustment for any stock splits, stock dividends, recapitalizations and similar events, as well as anti-dilution price protection provisions that are subject to a floor price as set forth in the Peak Warrant #3. The Peak Warrant #3 provides for cashless exercise under certain circumstances. The initial fair value of the Peak Warrant #3 amounted to $109,161 and was recorded, in combination with common stock issued above, as a debt discount of $251,361 at the time of issuance of the Debenture.

In connection with the Private Placement in May 2024, the Company issued common warrants (the Common Warrants) to purchase up to 4,310 shares of the Company’s common stock. The Common Warrants are exercisable immediately following the date of issuance, have a term offive years from the effective date of the corresponding registration statement registering the shares of Company common stock and the shares of Company common stock issuable upon exercise of the Common Warrants and have an exercise price of $1,700 per share. A holder may not exercise any Common Warrants that would cause the aggregate number of shares of common stock beneficially owned by the holder to exceed 4.99% of the Company’s outstanding common stock immediately after exercise. The Common Warrants are subject to adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the common stock and also upon any distributions for no consideration of assets to the Company’s stockholders. In the event of certain corporate transactions, the holders of the Common Warrants will be entitled to receive, upon exercise of the Common Warrants the kind and amount of securities, cash or other property that the holders would have received had they exercised the Common Warrants immediately prior to such transaction. The Common Warrants do not entitle the holders thereof to any voting rights or any of the other rights or privileges to which holders of common stock are entitled. These warrants were exercised in connection with the November Inducement during the year ended December 31, 2024.

In connection with the November Inducement, in consideration for the exercise of the Existing Warrants for cash, the investor received new warrants (the “New Warrants”) to purchase up to an aggregate of 8,621 shares of common stock. The New Warrants are exercisable after stockholder approval at an exercise price of $560 per common share and will expire five years after stockholder approval.

Warrant activity or the years ended December 31, 2025 and 2024 are summarized as follows:

The fair value of warrants granted during the year ended December 31, 2025 and 2024 were valued using a Black-Scholes Value model, with the following assumptions

20. SHARE-BASED COMPENSATION

On October 26, 2016, the Company’s Board of Directors approved the issuance of up to 2 shares of the Company’s common stock, in the form of restricted stock or options (2016 Stock Plan). Effective January 20, 2017, the 2016 Stock Plan was amended and restated, as further amended effective June 1, 2018, July 30, 2020, August 18, 2021, and as further amended on October 5, 2023, (collectively, the “Incentive Plan”). The Incentive Plan authorizes the issuance of up to 8,625,000 shares of common stock. It authorizes the issuance of equity-based awards in the form of stock options, stock appreciation rights, restricted shares, restricted share units, other share-based awards and cash-based awards to non-employee directors and to officers, employees and consultants of the Company and its subsidiaries, except that incentive stock options may only be granted to the Company’s employees and its subsidiary’s employees. The Incentive Plan expires on October 26, 2026, and is administered by the Company’s Compensation Committee of the Board of Directors. Each of the Company’s employees, directors, and consultants are eligible to participate in the Incentive Plan. As of December 31, 2025, there were 0 shares of common stock available for issuance under the Incentive Plan.

Stock-based compensation expense is included in the consolidated statements of operations as follows:

Because the Company does not have significant historical data on employee exercise behavior, the Company uses the Simplified Method to calculate the expected life of the stock-based option awards granted to employees. The simplified method is calculated by averaging the vesting period and contractual term of the options.

The following table summarizes stock-based option activities and changes during the years ended December 31, 2025 and 2024, as described below:

Restricted Stock Units

During the year ended December 31, 2024, a total of 69,23 and 16 of restricted stock units were granted to Mr. Galvin, Ms. Kaelin and an employee of the Company, respectively, under the Company’s stock-based compensation plan at a fair value of $1,450 per share, which represents the closing price of the Company’s common stock at the grant date. The restricted stock units vested immediately.

As of December 31, 2025 and 2024, there was a total of $56,415 and $401,076, respectively, in unrecognized compensation costs related to non-vested restricted stock units.

The following table summarized restricted stock unit activities during the years ended December 31, 2025 and 2024:

Treasury Stock

The Company accounts for treasury stock under the cost method. Shares repurchased are recorded as treasury stock at the cost of the shares acquired and presented as a reduction of stockholders’ equity in the consolidated balance sheets. Upon reissuance of treasury shares, any excess of the issuance price over cost is credited to additional paid-in capital, and any deficit is charged first to additional paid-in capital to the extent of previously recorded credits arising from reissuances of treasury shares, and then to accumulated deficit. As of December 31, 2025 and 2024, the Company held 5 treasury shares with an aggregate carrying value of $92,396. There wereno treasury share acquisitions or reissuances during the years ended December 31, 2025 or 2024.

21. 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 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.

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 defences 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 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.

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 December 31, 2025, 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 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 December 31, 2025, the estimated potential loss to the Company is approximately $232,000 which is included in accounts payable and accrued expenses on accompanying 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 December 31, 2025, the case remains pending. As of December 31, 2025, the estimated potential loss to the Company is approximately $138,000 which is included in accounts payable and accrued expenses on accompanying consolidated balance sheets.

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 Authoritys allegations. As of December 31, 2025, the case remains pending. As of December 31, 2025, the Company cannot estimate any additional potential loss, however as of December 31, 2025, the $750,000 is included in short-term notes payable on the accompanying consolidated balance sheets.

Rulien Litigation

In March, 2024, Rulien Advisors, LLC (“Rulien”) filed suit 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 entered into by the Company and Rulien dated as of December 17, 2018 (the “Consulting Agreement”), whereby the Company engaged Rulien to act as a non-exclusive independent sales representative to promote the sale of, and to solicit orders for, products and services offered for sale by the Company. Rulien alleges that it has earned commissions of $1,373,750 for (a) the alleged sale of property located at 1900 American Drive, Lago Vista, Texas, and (b) the Company’s spin-off of the Company’s wholly-owned subsidiary, Safe and Green Development Corporation, into a separate publicly traded company listed on the Nasdaq stock exchange. The Company disputes Rulien’s claims. The case remains pending. 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 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 December 31, 2025, the case remains pending. As of December 31, 2025, 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 353 rd 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 December 31, 2024, the case remains pending. As of December 31, 2024, the estimated potential loss to the Company is $183,901 which is included in accounts payable and accrued expenses on accompanying consolidated balance sheets.

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 December 31, 2025, the estimated potential loss to the Company is $513,000, which is included in accounts payable and accrued expenses on accompanying 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 accompanying 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 December 31, 2025, 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.

On March 12, 2021, the HOLA Defendants filed an answer to the Company’s complaint against it denying liability and asserting affirmative defences. On March 12, 2021, the Company filed an answer to the HOLA Defendants First Amended Consolidated Complaint against it, denying liability and asserting affirmative defences.

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.

John Williams Shaw and Leo Patrick Shaw

On March 15, 2023, a complaint was filed against John Williams Shaw and Leo Patrick Shaw (collectively, the “March 2023 Defendants”) in the United States District Court of the Southern District of New York seeking damages to recover short swing profits from the March 2023 Defendants pursuant to Section 16(b) of the Exchange Act of 1933. On September 26, 2023, the matter was settled and on, October 3, 2023, a Stipulation and Order of Dismissal with Prejudice was filed and so-ordered by the assigned judge. The matter is settled and closed.

Concentrations of credit risk

The Company performs ongoing credit evaluations of its customers’ financial condition and generally requires no collateral other than normal lien rights. At December 31, 2025, three customers accounted for 19%,36%, and 16% of the Company’s accounts receivable. At December 31, 2024, a single customer accounted for 100% of the Company’s accounts receivable.

During the year ended December 31, 2025, three customers accounted for 35%,23%, and 10% of revenue. During the year ended December 31, 2024, a single customer accounted for 83% of revenue

For the year ending December 31, 2025 and 2024, there were no vendors that represented 10% or more of our cost of revenue. The Company believes it has access to alternative suppliers, with limited disruption to the business, should circumstances change with its existing suppliers.

Employee retention credits

In 2020, the World Health Organization publicly characterized COVID-19 as a pandemic. The Company recognized a substantial amount of incremental costs during the pandemic, including costs to compensate employees who were not able to work due to facility closures, reduced work schedules or health related reasons. The Coronavirus Aid, Relief, and Economic Security Act was signed into law in March 2020, which provided, among other things, an employee retention credit to eligible employers who paid qualified wages to employees during the pandemic. The employee retention credit represents a government grant. The Company’s policy is to recognize government grants when they are reasonably assured of receipt. The Company recognized employee retention tax credits totalling $284,770 during the year ended December 31, 2025, after concluding the recognition threshold had been met. All such credits were classified within ‘other income’ on the accompanying consolidated statement of operations.

22. RELATED PARTY TRANSACTIONS

As disclosed in Note 8, certain of the Company’s notes payable are held by related parties.

As disclosed in Note 18, the Company issued shares of its common stock in settlement of accounts payable to a related party.

As of December 31, 2025 and 2024, $1,544,794 and $1,716,244, 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 December 31, 2025, accounts payable and accrued expenses include $358,670 relocation costs the Company’s chief executive officer

As disclosed in Note 18, the Company settled certain accounts payable due to a related party during the year ended December 31, 2024.

On January 21, 2020, CPF GP issued the Company Note and issued to Paul Galvin, the Company’s Chairman and CEO, the Galvin Note. The transaction closed on January 22, 2019, on which date the Company loaned CPF GP 2019-1 LLC $400,000 and Mr. Galvin personally loaned CPF GP $100,000 on behalf of the Company.

The Company Note and Galvin Note were issued pursuant to the Loan Agreement and Promissory Note, dated October 3, 2019, as amended on October 15, 2019 and November 7, 2019 by and between the CPF GP and the Company, and bear interest at five percent (5%) per annum, payable, together with the unpaid principal amount of the promissory notes, on the earlier of the July 31, 2023 maturity date or upon the liquidation, redemption sale or issuance of a dividend upon the LLC interests in CPF MF 2019-1 LLC, a Texas limited liability company of which CPF GP is the general partner. The terms of the Galvin Note, however, provide that all interest payments due to Mr. Galvin under the Galvin Note shall be paid directly to, and for the benefit of, the Company. In connection with the issuance of the Company Note and the Galvin Note, CPF GP, the Company and Mr. Galvin entered into a Security Agreement, dated January 21, 2020, pursuant to which CPF GP granted a security interest in its LLC interests in CPF MF 2019-1 LLC to the Company and Mr. Galvin to secure its obligations thereunder. Subsequent to the year ended December 31, 2021, the Galvin Note was assigned to the Company and the principal amount of $100,000 was returned to Mr. Galvin. The Company has a promissory note in the principal amount of $100,000 and the assignment of the promissory note occurred in January 2022.

On December 14, 2023, the Company and Mr. Galvin entered into the Galvin Note Payable. During the year ended December 31, 2024,332 shares of common stock were issued resulting from the settlement of accounts payable in the amount of $1,259,681. Such amount included a gain of $121,834 which has been included in additional paid in capital, due to the fact the settlement of accounts payable was from a related party at the time of the transaction.

As of December 31, 2024, the Company has accrued approximately $450,000 for amounts due to Paul Galvin, the former CEO, for deferred salary due to him.

23. DECONSOLIDATION AND DISCONTINUED OPERATIONS

During 2024, the Company recognized the effects of the deconsolidation of SG DevCorp which was previously consolidated in the Company’s financial statements.

The financial results of SG DevCorp are presented as income (loss) from discontinued operations. The following table represents the financial results of SG DevCorp:

The following table presents the aggregate carrying amounts of assets and liabilities of discontinued operations of SG DevCorp as of December 31, 2024:

24. SUBSEQUENT EVENTS

Reverse Stock Split

On May 8, 2026, the Company effected a one-for-ten (1-for-10) reverse stock split of its issued and outstanding common stock pursuant to which every ten shares of common stock were combined into one share. No fractional shares were issued; stockholders otherwise entitled to a fractional share. Proportionate adjustments were made to the exercise prices and share amounts of all outstanding stock options, restricted stock units, warrants, and other equity-based awards, and to the shares reserved under the Company’s equity incentive plans.

All share and per-share amounts in the accompanying consolidated financial statements and notes have been retroactively adjusted to reflect the Reverse Stock split as if it had occurred at the beginning of the earliest period presented.

Settlement Agreements

On February 10, 2026, the Company executed a mutual settlement and release agreement (the “Cedar Settlement”) with Cedar to resolve an outstanding balance of $1,732,500 (the “Balance”) owed by the Company under certain Standard Merchant Cash Advance Agreements between the Company and Cedar. Under the Cedar Settlement, the Company will issue Cedar up to 500,000 shares of the Company’s common stock (the “Initial Shares”), subject to a beneficial ownership limitation of 4.99% of the outstanding common stock at any given time. Following Cedar’s sale of the Initial Shares, the parties will perform a sales analysis to determine the gross proceeds Cedar received. If those proceeds are less than the Balance, the Company will issue additional restricted shares of common stock as a true-up, calculated by dividing the shortfall by the volume-weighted average price of the Company’s common stock for theten trading days immediately preceding the calculation date, subject to the same beneficial ownership limitation. Cedar and the Company each agreed to waive and release any and all claims against the other, except with respect to performance under the Cedar Settlement. The Company has issued 44,000 shares under the terms of the Cedar Settlement.

On February 11, 2026, the Company executed a settlement agreement with Michael McLaren (in his capacity as note holder) to settle the outstanding balance owed under a convertible promissory note between Mr. McLaren and the Company’s subsidiary, Olenox. Under the settlement, the Company will issue 62,633 shares of its restricted common stock in settlement of accrued interest and principal totaling $338,670, and Mr. McLaren agreed to waive and release any and all claims against the Company relating to the note.

Also on February 11, 2026, the Company executed a separate settlement agreement with Michael McLaren (in his capacity as a shareholder) to resolve any and all actual or potential claims relating to his shares of the Company’s Series A Non-Voting Convertible Preferred Stock (the “Preferred Shares”). Under the settlement, the Company will issue 58,500 shares of restricted common stock, and Mr. McLaren will surrender to the Company 39,000 Series A Preferred Shares, in full release of any and all claims relating to the Preferred Shares.

Series C Preferred Stock - Second Closing

On March 12, 2026, pursuant to the Securities Purchase Agreement dated November 25, 2025 with an institutional investor (the “Institutional Investor”), the Company and the Institutional Investor mutually agreed to effect an additional closing (the “Second Closing”). At the Second Closing, the Company issued and sold to the Institutional Investor 900 shares of its Series C Preferred Stock, representing an aggregate stated value of $900,000, for an aggregate purchase price of $810,000. The additional shares have the same rights, preferences, and privileges as the Series C Preferred Stock issued at the initial closing and are convertible into shares of the Company’s common stock, at a conversion price subject to adjustment as set forth in the applicable Certificate of Designation. In connection with the Second Closing, the Company and the Institutional Investor entered into a registration rights agreement dated March 12, 2026, requiring the Company to file a resale registration statement with the SEC within 30 days of the Second Closing. The additional shares were sold in reliance on the exemption from registration afforded by Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506(b) of Regulation D. The Company paid the placement agent, West Park Capital Inc., a commission equal to 7.0% of the gross proceeds. Net proceeds to the Company from the Second Closing were approximately $718,300, after deducting placement agent fees and other offering expenses.

Series C Preferred Stock Conversions

The Company has issued 167,683 shares of common stock subsequent to December 31, 2025, for the conversion of 1,711 shares of Series C Preferred Stock under contract terms.

Chapter 11 Filing of SG Echo, LLC and Acceleration of Debt

On April 28, 2026, SG Echo, a wholly owned subsidiary of the Company, commenced a voluntary case under Chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Eastern District of Oklahoma (the “Bankruptcy Court”), seeking a court-administered reorganization pursuant to a plan of reorganization. The Chapter 11 case pertains solely to SG Echo and does not include the Company or any of its other subsidiaries or affiliates, which continue to operate normally. SG Echo continues to operate its business as a “debtor-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code.

The commencement of the Chapter 11 case constitutes an event of default that accelerated the obligations of SG Echo under the Enhanced Loan Agreement between SG Echo and Enhanced dated September 20, 2024 under which approximately $4.0 million of principal, plus accrued and unpaid interest, became immediately due and payable. Any efforts to enforce the payment obligations under the Enhanced Loan Agreement are automatically stayed as a result of the Chapter 11 case, and the creditors’ enforcement rights are subject to the applicable provisions of the Bankruptcy Code. The Company is evaluating the impact of the Chapter 11 case on the carrying amounts and classification of SG Echo’s assets and liabilities and on the Company’s consolidated financial statements.

Acquisition of CS Digital Ventures, LLC

On May 26, 2026, the Company entered into a Membership Interest Purchase Agreement (the “CS Digital Purchase Agreement”) with CS Digital Ventures, LLC, a Delaware limited liability company (“CS Digital”), the members of CS Digital (collectively, the “Sellers”), and Bernardo Schucman, as seller representative. On the same date, the Company completed the acquisition of 100% of the issued and outstanding membership interests of CS Digital (the “CS Digital Acquisition”), and CS Digital became a wholly owned subsidiary of the Company. CS Digital is a digital infrastructure company focused on the development and operation of energy-intensive data centers, including bitcoin mining and high-density compute deployments, and had approximately 35 megawatts of installed power capacity in operation as of the closing date.

The aggregate consideration payable by the Company under the CS Digital Purchase Agreement consists of: (i) $30,000,000 in upfront consideration payable at closing, comprised of (a) $14,000,000 in newly issued shares of the Company’s Series D Preferred Stock, issued at a stated value of $1.00 per share, and (b) a $16,000,000 unsecured promissory note issued by the Company to the Sellers (the “Seller Note”); (ii) warrants to purchase an aggregate of 1,500,000 shares of the Company’s common stock, comprised of three equal tranches of 500,000 shares each, with exercise prices of $5.00, $7.00, and $9.00 per share, respectively (the “CS Warrants”); and (iii) up to an additional $20,000,000 in shares of the Series D Preferred Stock (the “Earnout Shares”), issuable upon the achievement of two post-closing milestones tied to the cumulative revenue and cumulative Adjusted EBITDA of CS Digital, as set forth in the CS Digital Purchase Agreement.

The Series D Preferred Stock and the CS Warrants are not convertible or exercisable into common stock prior to receipt of the requisite approval of the Company’s stockholders under applicable Nasdaq listing rules, including Listing Rule 5635 (the “CS Acquisition Stockholder Approval”). The Company has agreed to use its best efforts to convene a stockholder meeting to seek the CS Acquisition Stockholder Approval within 90 days after closing and, if not then obtained, every three months thereafter until obtained. Failure to obtain the CS Acquisition Stockholder Approval will not result in any increase in stated value, accrual of dividends or interest, redemption right, decrease in conversion price, or other economic consequence favorable to the holders. Conversion of the Series D Preferred Stock and exercise of the CS Warrants are further subject to a beneficial ownership limitation of 19.9% of the outstanding common stock or voting power of the Company. The conversion price of the Series D Preferred Stock is fixed at $1.00 per share, which the Company has determined equals or exceeds the “Minimum Price” under Nasdaq Listing Rule 5635(d)(1) as of the closing date, and the Series D Preferred Stock is non-voting (except as required by Delaware law) and is not subject to any redemption right, sinking fund, mandatory conversion right, or price-based anti-dilution protection.

The Series D Preferred Stock and the CS Warrants issued at closing, and any Earnout Shares issued in the future, were and will be issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506(b) of Regulation D. In connection with the closing, the Company filed a Certificate of Designation of Series D Preferred Stock with the Secretary of State of the State of Delaware. The CS Digital Purchase Agreement contains customary representations, warranties, covenants, and indemnification provisions, as well as two-year non-competition and non-solicitation covenants applicable to the principal sellers. The Company is in the process of determining the acquisition-date fair values of the consideration transferred and of the assets acquired and liabilities assumed, and the related purchase price allocation, in accordance with ASC 805, Business Combinations. The initial accounting for the business combination was incomplete as of the date these consolidated financial statements were available to be issued.

Series D Preferred Stock Conversions

The Company has issued 216,000 shares of common stock subsequent to December 31, 2025, for the conversion of 216,000 shares of Series D Preferred Stock under contract terms.

Short-term Note Payable Settlement

The Company 34,948 shares of common stock with a fair value of $345,985 in settlement of note short-term note payable and accrued interest of approximately $10,800. The Company recognized a loss of approximately $335,000 as of result of this settlement.

Shares Issued for Services

Subsequent to December 31, 2025, the Company issued 62,487 shares of common stock with a fair value of $416,072 for services provided during 2026.

25. SUPPLEMENTAL INFORMATION ON OIL AND NATURAL GAS OPERATIONS (UNAUDITED)

The Company is engaged in the acquisition, development, and production of crude oil and, to a lesser extent, natural gas, with operations conducted exclusively within the United States.

The Company completed the acquisition of substantially all of its proved oil and gas reserves in 2025. Accordingly, the Company hadno proved reserves at December 31, 2024.

Net Proved Oil and Gas Reserve Quantities

Proved reserves are those quantities of crude oil and natural gas that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions. Proved developed reserves are reserves expected to be recovered through existing wells with existing equipment and operating methods. Proved undeveloped reserves are reserves expected to be recovered from new wells on undrilled acreage or from existing wells where a relatively major expenditure is required for recompletion.

The Company’s proved reserves were estimated by an independent petroleum engineer, in accordance with the definitions and regulations of the U.S. Securities and Exchange Commission and ASC Topic 932. The reserve estimates are based on a 12-month unweighted arithmetic average of the first-day-of-the-month West Texas Intermediate (WTI) Cushing benchmark price for each month during 2025, which equaled $66.01 per barrel, held constant over the life of the properties. No economic value has been assigned to associated natural gas.

The following table presents changes in the Company’s estimated proved reserves. As of December 31, 2025, none of the Company’s total proved reserves were classified as proved developed non-producing.

Proved reserves by category at December 31, 2025 where:

Capitalized Oil and Natural Gas Costs

The aggregate capitalized costs relating to the Company’s oil and gas producing activities, with applicable accumulated depreciation, depletion, amortization, and impairment, are as follows at December 31, 2025:

Costs Incurred in Oil and Natural Gas Activities

The Company’s costs incurred in oil and gas property acquisition, exploration, and development activities for the year ended December 31, 2025 are summarized below:

Results of Operations from Oil and Natural Gas Producing Activities

The Company’s results of operations from oil and gas producing activities for the year ended December 31, 2025 are presented below. These results exclude corporate general and administrative expenses, interest expense, and other items not directly associated with oil and gas producing activities.

Standardized Measure of Discounted Future Net Cash Flows

The standardized measure of discounted future net cash flows is based on the unweighted arithmetic average, first-day-of-the-month price for the rolling 12-month period. The projections should not be viewed as realistic estimates of future cash flows, nor should the “standardized measure” be interpreted as representing current value to the Company. Material revisions to estimates of proved reserves may occur in the future; development and production of the reserves may not occur in the periods assumed; actual prices realized are expected to vary significantly from those used; and actual costs may vary.

The following table sets forth the standardized measure of discounted future net cash flows attributable to the Company’s proved oil and natural gas reserves as of December 31, 2025:

The changes in the Standardized Measure for the year ended December 31, 2025 are presented below. Because the Company had no proved oil and gas reserves at December 31, 2024, the activity in 2025 reflects (i) the acquisition of substantially all of the Company’s proved reserves in 2025, presented as a purchase of reserves in place; (ii) the sale of oil produced during the period, net of associated production costs; (iii) the accretion of the discount on the acquired Standardized Measure during the remainder of the year; and (iv) the recognition of the related future income tax expense.

Principal changes in the standardized measure of discounted future net cash flows attributable to the Company’s proved reserves are as follows: