UNITED
STATES

SECURITIES
AND EXCHANGE COMMISSION

Washington,
D.C. 20549



FORM
10-K/A

(Amendment
No. 1)



☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For
the fiscal year ended December 31, 2019



OR



☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For
the transition period from ____________ to ____________



Commission
file number: 001-38037



SG
BLOCKS, INC.

(Exact
name of registrant as specified in its charter)



|Delaware                                          |  | 95-4463937             
|------------------------------------------------- |  | -----------------------
|(State
    or other jurisdiction of               |  | (I.R.S.
    Employer   
|incorporation
    or organization)                |  | Identification
    No.)
|                                                  |  |                        
|195
    Montague Street, 14th Floor, Brooklyn, NY |  | 11201                  
|(Address
    of principal executive offices)      |  | (Zip
    Code)         



(646)
240-4235

(Registrant’s
telephone number, including area code)



Securities
registered pursuant to Section 12(b) of the Act:



|Title
    of Each Class           |  | Trading
    Symbol(s) |  | Name
    of Each Exchange on Which Registered
|--------------------------------- |  | --------------------- |  | ---------------------------------------------
|Common
    Stock, par value $0.01 |  | SGBX                  |  | The
    Nasdaq Stock Market LLC              



Securities
registered pursuant to Section 12(g) of the Act:None



Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.   Yes  ☐    No  ☒



Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.   Yes  ☐    No  ☒



Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.   Yes  ☒    No   ☐



Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant
to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit such files).   Yes  ☒    No  ☐



Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.



|Large
    accelerated filer  ☐ | Accelerated
    filer  ☐        
|------------------------------ | --------------------------------
|Non-accelerated
    filer  ☒   | Smaller
    reporting company  ☒
|                               | Emerging
    growth company  ☐  



If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐



Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).   Yes  ☐ No  ☒



The
aggregate market value of the common stock held by non-affiliates of SG Blocks, Inc. based on the closing price of the shares
of common stock on the Nasdaq Capital Market on June 28, 2019 was approximately $3,597,728.



APPLICABLE
ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:



Indicate
by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.   Yes  ☒     No  ☐



As
of April 14, 2020, the issuer had a total of 1,610,524 shares of common stock outstanding.



DOCUMENTS
INCORPORATED BY REFERENCE



The
following documents (or parts thereof) are incorporated by reference into the following parts of this Form 10-K/A: None.


















EXPLANATORY
NOTE



This
Amendment No. 1 to Form 10-K (this “Amendment No. 1”) amends the Annual Report on Form 10-K for the fiscal year
ended December 31, 2019 (the “2019 Form 10-K”) originally filed on March 30, 2020 (the “Original Filing”)
by SG Blocks, Inc., a Delaware corporation (“SG Blocks,” the “Company,” “we,” or “us”).
We are filing this Amendment No. 1 to present the information required by Part III of Form 10-K as we will not file our definitive
proxy statement within 120 days of the end of our fiscal year ended December 31, 2019.



In
addition to providing the omitted information required by Items 10 through 14 of Part III, this Amendment No. 1 amends Item 15
of Part IV to include new certifications being provided with this Amendment No.1 pursuant to Section 302
of the Sarbanes-Oxley Act of 2002 and amends the cover page to update the number of shares of Company stock outstanding and to
remove the statement that information is being incorporated by reference from our definitive proxy statement.



Except
as described above, no other changes have been made to the Original Filing. The Original Filing continues to speak as of the date
of the Original Filing, and we have not updated the disclosures contained therein to reflect any events which occurred at a date
subsequent to the filing of the Original Filing.











SG BLOCKS, INC.

FORM 10-K/A

(Amendment No. 1)



TABLE OF CONTENTS



|ITEM         |                                                                                                | Page
|------------ | ---------------------------------------------------------------------------------------------- | ----
|             |                                                                                                |     
|             | PART III                                                                                       |     
|             |                                                                                                |     
|Item 10.     | Directors, Executive Officers and Corporate Governance                                         | 1   
|             |                                                                                                |     
|Item 11.     | Executive Compensation                                                                         | 7   
|             |                                                                                                |     
|Item 12.     | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 14  
|             |                                                                                                |     
|Item 13.     | Certain Relationships and Related Transactions, and Director Independence                      | 16  
|             |                                                                                                |     
|Item 14.     | Principal Accounting Fees and Services                                                         | 17  
|             |                                                                                                |     
|             | PART IV                                                                                        |     
|             |                                                                                                |     
|Item 15.     | Exhibits, Financial Statement Schedules                                                        | 18  
|             |                                                                                                |     
|Signatures   | 19                                                                                            
|            
|Exhibit 31.3
|            
|Exhibit 31.4



i







Part
III



|Item 10. | Directors,
    Executive Officers and Corporate Governance
|-------- | ----------------------------------------------------------



Our
Directors and Executive Officers



Below
is certain information about our directors and executive officers.



|Name                                      |  | Age |  | Position                                                           |  | Served
    as an Officer
    and/or Director Since
|----------------------------------------- |  | --- |  | ------------------------------------------------------------------ |  | --------------------------------------------------
|Paul
    M. Galvin                        |  | 57  |  | Chairman
    of the Board of Directors and Chief Executive Officer |  | November
    2011                                 
|                                          |  |     |  |                                                                    |  |                                                   
|Stevan
    Armstrong                      |  | 72  |  | Chief
    Technology Officer                                       |  | November
    2011                                 
|                                          |  |     |  |                                                                    |  |                                                   
|Gerald
    Sheeran                        |  | 39  |  | Acting
    Chief Financial Officer                                 |  | August
    2019                                   
|                                          |  |     |  |                                                                    |  |                                                   
|Yaniv
    Blumenfeld (1)(5)(6)            |  | 47  |  | Independent
    Director                                           |  | April
    2018                                    
|                                          |  |     |  |                                                                    |  |                                                   
|Christopher
    Melton (1)(2)(3)(5)(6)(7) |  | 48  |  | Independent
    Director                                           |  | November
    2011                                 
|                                          |  |     |  |                                                                    |  |                                                   
|James
    C. Potts(1)(3)(4)(5)(6)         |  | 73  |  | Independent
    Director                                           |  | December
    2018                                 
|                                          |  |     |  |                                                                    |  |                                                   
|Mahesh
    S. Shetty                      |  | 60  |  | Director                                                           |  | July
    2016                                     








| | (1) | Audit
Committee Member.
| | --- | -----------------------

| | (2) | Audit
Committee Chairman.
| | --- | -------------------------

| | (3) | Compensation
Committee Member.
| | --- | ------------------------------

| | (4) | Compensation
Committee Chairman.
| | --- | --------------------------------

| | (5) | Nominating
and Corporate Governance Committee Member.
| | --- | -----------------------------------------------------

| | (6) | Executive
Committee Member.
| | --- | ---------------------------

| | (7) | Lead
Independent Director.
| | --- | --------------------------



Paul
M. Galvin was appointed as a director and the Company’s Chief Executive Officer upon consummation of the reverse
merger among CDSI Holdings Inc., CDSI Merger Sub, Inc., the Company, and certain stockholders of the Company on November 4, 2011
(the “Merger”). Mr. Galvin is a founder of SG Blocks, LLC, the predecessor entity of the Company. He has served as
the Chief Executive Officer of the Company since April 2009 and as a director of the Company since January 2007. Mr. Galvin has
been a managing member of TAG Partners, LLC (“TAG”), an investment partnership formed for the purpose of investing
in the Company, since October 2007. Mr. Galvin brings over 20 years of experience developing and managing real estate, including
residential condominiums, luxury sales and market rate and affordable rental projects. Prior to his involvement in real estate,
he founded a non-profit organization that focused on public health, housing and child survival, where he served for over a decade
in a leadership position. During that period, Mr. Galvin designed, developed and managed emergency food and shelter programs through
New York City’s Human Resources Administration and other federal and state entities. From November 2005 to June 2007, Mr.
Galvin was Chief Operating Officer of a subsidiary of Yucaipa Investments, where he worked with religious institutions that needed
to monetize underperforming assets. While there, he designed and managed systems that produced highest and best use analyses for
hundreds of religious assets and used them to acquire and re-develop properties across the U.S. Mr. Galvin has served on the
board of directors of ToughBuilt Industries, Inc. (Nasdaq: TBLT), a designer, manufacturer and distributor of innovative tools
and accessories to the building industry, since November 2018, and currently serves as the chair of its compensation committee
and as a member of each of the audit and nominating and governance committees. Mr. Galvin also currently serves on the advisory
board of Callegro Investments, LLC and Sandhill Crane Partners, LLC and the advisory committee of May River Partners, LP. Mr.
Galvin holds a Bachelor of Science in Accounting from LeMoyne College and a Master’s Degree in Social Policy from Fordham
University. He was formerly an adjunct professor at Fordham University’s Graduate School of Welfare. Mr. Galvin previously
served for 10 years on the Sisters of Charity Healthcare System Advisory Board and six years on the Board of SentiCare, Inc. In
2011, the Council of Churches of New York recognized Mr. Galvin with an Outstanding Business Leadership Award.



We
selected Mr. Galvin to serve on our Board as our Chairman because he brings to the board extensive knowledge of the construction
and real estate industries. During his profession career he has gained vast knowledge of the construction and real estate industries
and brings to the Board significant executive leadership and operational experience. His business and managerial experience provides
him with a broad understanding of the operational, financial and strategic issues facing our Company.



1







Stevan
Armstrong has served as the Chief Technology Officer of the Company since February 1, 2018. Prior to that, Mr. Armstrong
served as the Company’s President and Chief Operating Officer since consummation of the Merger on November 4, 2011. Mr.
Armstrong served as a director of the Company from November 4, 2011 until July 1, 2016. Mr. Armstrong is a founder of SGBlocks,
LLC. Prior to the Merger, Mr. Armstrong served as the President and Chief Operating Officer of the Company and its predecessor
entity since April 2009 and as a director of the Company and its predecessor entity since January 2007. From 2003 until fully
phasing out in March 2010, he was a minority partner (owner) and Chief Construction Officer for Stratford Companies, a large senior
housing development group, where he had complete responsibility for all engineering, design construction and commissioning of
over $250,000,000 of facilities over a three-year period. Prior to that, he was the Executive Vice President for Operations of
Hospital Affiliates Development Corp., a proprietary health care company specializing in the development of healthcare and senior
care projects both domestically and internationally. Mr. Armstrong managed the design and construction of healthcare and elderly
care housing projects in 40 states and 16 foreign countries with overall responsibility for operations. His background includes
structural design engineering for large-scale healthcare projects, project scheduling and management of development of construction
budgets. He spent much of his early career working on-site as a field engineer and construction specialist. Mr. Armstrong served
30 years on active and reserve duty as a Civil Engineering Corps Officer for the U.S. Navy, retiring as Assistant Chief of Staff
for Operations for the Atlantic Seabees (Navy Construction Battalions) both Active and Reserve based out of Norfolk, Virginia,
with 8,000 engineering and construction troops reporting to headquarters. Mr. Armstrong was responsible for their operations both
in the U.S. and worldwide. Mr. Armstrong holds a Bachelor of Architectural Engineering from Pennsylvania State University and
a Master’s in Engineering from George Washington University. Mr. Armstrong brings extensive design, construction, and engineering
expertise to the Company and his pertinent experience, qualifications, attributes, and skills include real estate and development
expertise.



Gerald
Sheeran has served as the Controller of the Company since March of 2018 and Acting Chief Financial Officer since
August 22, 2019. Mr. Sheeran brings to our Company extensive experience and expertise in areas of finance and accounting.
Prior to joining the Company, Mr. Sheeran was a Senior Accounting Manager for Lucid Energy Group from March of 2013 to March
of 2018. Before his time at Lucid Energy Group, Mr. Sheeran worked for several different companies in connection with their
accounting, reporting, and financial operations. Mr. Sheeran holds a Bachelor of Business Administration in Accounting from
the University of Texas at Arlington.



Yaniv
Blumenfeld joined the Board in April 2018. He founded Glacier Global Partners LLC in 2009 and is responsible for its strategic
direction and oversees its investments and day-to-day management, including origination, underwriting, closing, investor relations
and asset management functions. Mr. Blumenfeld has over 20 years of real estate experience, 13 years of which have been with leading
Wall Street firms, where he was responsible for structuring, underwriting, pricing, securitizing and syndicating over $16 billion
of commercial real estate loans and equity transactions. Prior to founding Glacier Global Partners LLC, Mr. Blumenfeld was a Managing
Director at The Bear Stearns Companies, Inc. and JPMorgan Chase & Co., and, in such role, was responsible for structuring
and closing over $2 billion in real estate debt and equity transactions for institutional clientele. Prior to that, Mr. Blumenfeld
was a Managing Director and Head of the CMBS Capital Markets Group for the U.S. at EuroHypo AG, then world’s largest real
estate investment bank. In that capacity, Mr. Blumenfeld expanded the large loan CMBS group and oversaw the structuring, pricing,
securitization and syndication functions and served on the bank’s investment committee in charge of approving all transactions.
He designed and implemented risk-control measures, standardized underwriting and pricing models and structured over $4 billion
of real estate loans. Other positions previously held by Mr. Blumenfeld include Senior Vice President at Lehman Brothers, PaineWebber/UBS
and Daiwa Securities. Prior to joining the banking industry, Mr. Blumenfeld worked as a real estate consultant at Ernst &
Young real estate consulting group, advising real estate owners and operators, and various investment banks. Mr. Blumenfeld received
a Bachelor of Science in real estate finance from Cornell University School of Hotel Administration. He is a member of the CRE
Finance Council, was a guest lecturer at Columbia University, and was a recipient of the Young Jewish Professional NYC Real Estate
Entrepreneur & Achievement Award in 2013. He is also involved with various philanthropic organizations, including The American
Israel Public Affairs Committee, White Plains Hospital, American Friends of Rabin Medical Center and is on the board of directors
of ArtsWestchester and the White Plains Business Improvement District.



2







We
selected Mr. Blumenfeld to serve on our Board because he brings extensive knowledge of the real estate finance industry. Mr. Blumenfeld’s
pertinent experience, qualifications, attributes and skills include his real estate finance, risk-control, developments, investment
banking and capital raising.



Christopher
Melton was appointed as a director of the Company upon consummation of the Merger on November 4, 2011. Mr. Melton serves
on several public and private boards, including CBD Brands and funds advised by TNT Capital Advisors. Mr. Melton is a licensed
real estate salesperson in the State of South Carolina and serves as a specialist Land Advisor with SVN. Mr. Melton was a Portfolio
Manager for Kingdon Capital Management (“Kingdon”) in New York City, where he ran an $800 million book in media, telecom
and Japanese investment. Mr. Melton opened Kingdon’s office in Japan, where he set up a Japanese research company. From
1997 to 2000, Mr. Melton served as a Vice President at JPMorgan Investment Management as an equity research analyst, where he
helped manage $500 million in REIT funds under management. Mr. Melton was a Senior Real Estate Equity Analyst at RREEF Funds in
Chicago from 1995 to 1997. RREEF Funds is the real estate investment management business of Deutsche Bank’s Asset Management
division. Mr. Melton earned a Bachelor of Arts in Political Economy of Industrial Societies from the University of California,
Berkeley in 1995. Mr. Melton earned Certification from University of California, Los Angeles’s Anderson Director Education
Program in 2014.



We
selected Mr. Melton to serve on our Board because he brings extensive knowledge of finance and the real estate industry. Mr. Melton’s
pertinent experience, qualifications, attributes and skills include financial literacy and expertise, managerial experience and
the knowledge and experience he has attained through his real estate investment and development activities.



James
C. Potts, who joined the Board on December 27, 2018, currently serves as President of State SteelWorks, LLC (“State
Steel”) in Atlanta, Georgia, a company he founded in 2013. His responsibilities include establishing and overseeing the
strategic direction and operating performance of State Steel. Before his tenure with State Steel, Mr. Potts served as Chairman
of Verde Apartment Communities, a private REIT involved in the development, construction and management of upscale multi-family
communities. Prior to that, Mr. Potts held a number of senior positions with Security Capital Group Incorporated until its sale
to General Electric Capital Corporation, including serving as Co-Chairman and Chief Investment Officer of Security Capital Atlantic
Incorporated, an Atlanta-based equity REIT that owned, acquired, developed and operated income-producing multifamily communities
in the south Atlantic, mid-Atlantic and mid-western regions of the United States, and President and Chief Operating Officer of
Homestead Village Incorporated, an extended-stay hotel company that developed and operated hotels across the continental U.S.
Prior to that, Mr. Potts was a Senior Partner with Trammell Crow Residential and a member of its management board. Mr. Potts earned
a B.S.I.M. degree from the Georgia Institute of Technology and an M.B.A. from Georgia State University. Mr. Potts has been a director
of Borderplex Realty Trust since 2015.



We
selected Mr. Potts to serve on our Board due to his extensive experience in senior positions in the real estate industry, in both
publicly-traded and private organizations, and in multiple markets throughout the U.S., including investment analysis, development,
construction and operations positions, and his prior experience serving on the board of directors of both public and private companies.
Such experience and expertise make Mr. Potts a valuable member of the Board.







Mahesh S. Shetty has served as
a director of the Company since July 1, 2016. From July 29, 2016 until August 2019 he served as the Company’s Chief Financial
Officer and from February 1, 2018 until August 2019 he additionally served as its President. Mr. Shetty previously served in several
senior roles at PFO Global, Inc. (OTC: PFGBQ), an innovative manufacturer and commercial provider of advanced prescription lenses,
including as chief restructuring officer from December 2015 through December 2016; chief financial officer from September 2016
through December 2016; and as a consultant to the company from December 2016 through June 2017, through RSM Advisors, Inc., of
which Mr. Shetty is the principal. From 2008 to 2015, Mr. Shetty served as the Partner, Chief Operating Officer and Chief Financial
Officer at Encore Enterprises, a private real estate investment firm with over $750 million in assets. He had management oversight
and responsibility for all of Encore Enterprise’s finance, risk management, human resources and technology. Prior to joining
Encore Enterprises, Mr. Shetty was the Chief Financial Officer of North American Technologies Group, Inc., a Nasdaq-listed manufacturing
company focused on the transportation industry. Mr. Shetty began his career in public accounting and has served in executive finance
and operational leadership roles with Fortune 500 and mid-size private and public companies in the manufacturing, technology and
service industries. He earned a bachelor’s degree majoring in banking, economics and accounting and a French minor from Osmania
University, India and received his Master of Business Administration, summa cum laude, from the University of Texas at Dallas.
He is a Certified Public Accountant, a Certified Information Technology Professional, a Chartered Global Management Accountant
and a Fellow Chartered Accountant. Mr. Shetty previously served on the board and as the treasurer of Mothers Against Drunk Driving,
on the National Board of Financial Executives International and as chairman of the U.S. India Chamber of Commerce, Dallas-Fort
Worth. He was also previously on the boards of EZlytix, a private cloud-based business intelligence software company, BIG Logistics,
a private logistics company and Scoobeez Global, Inc. (formerly ABT Holdings, Inc.) (OTC: SCBZ).







We
selected Mr. Shetty to serve on our Board due to his pertinent experience, qualifications, attributes and skills in financial
and accounting matters, strategy, technology and operations.



3







THE
BOARD AND ITS COMMITTEES



Board
Leadership Structure



The
Board recognizes that one of its key responsibilities is to evaluate and determine its optimal leadership structure to provide
independent oversight of management. Our Board is currently led by a Chairman of the Board who also serves as our Chief Executive
Officer. The Board understands that the right Board leadership structure may vary depending on the circumstances, and our independent
directors periodically assess these roles and the Board leadership to ensure the leadership structure best serves the interests
of the Company and stockholders.



Mr.
Galvin currently holds the Chairman and Chief Executive Officer roles. Mr. Melton currently serves as the Lead Independent Director
elected by the majority of the Board.



The
responsibilities of the Lead Independent Director include, among others: (i) serving as primary intermediary between non-employee
directors and management; (ii) approving the agenda and meeting schedules for the Board; (iii) advising the Chairman of the Board
as to the quality, quantity and timeliness of the information submitted by management to directors; (iv) recommending director
candidates and selections for the membership and chairman position for each committee of the Board; (v) calling meetings of independent
directors; and (vi) serving as liaison for consultation and communication with stockholders.



We
believe the current leadership structure, with combined Chairman and Chief Executive Officer roles and a Lead Independent Director,
best serves the Company and its stockholders at this time. Mr. Galvin possesses detailed and in-depth knowledge of the Company
and the industry and the issues, opportunities and challenges we face, and is best positioned to ensure the most critical business
issues are brought for consideration by the Board. In addition, having one leader serving as both the Chairman and Chief Executive
Officer provides decisive, consistent and effective leadership, as well as clear accountability to our stockholders and customers.
This enhances our ability to communicate our message and strategy clearly and consistently to our stockholders, employees, customers
and suppliers, particularly during times of turbulent economic and industry conditions. The Board believes the appointment of
a strong Lead Independent Director and the use of regular executive sessions of the non-management directors, along with a majority
the Board being composed of independent directors, allow it to maintain effective oversight of management. We believe that the
combination of the Chairman and Chief Executive Officer roles is appropriate in the current circumstances and, based on the relevant
facts and circumstances, separation of these offices would not serve our best interests and the best interests of our stockholders
at this time.



Director
Independence



Nasdaq
Listing Rule 5605 requires a majority of a listed company’s board to be comprised of independent directors. In addition,
the Nasdaq Listing Rules require that, subject to specified exceptions, each member of a listed company’s audit and compensation
committees be independent under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Members of the
Audit Committee and Compensation Committee must also satisfy the independence criteria set forth in Rules 10A-3 and 10C-1 under
the Exchange Act, respectively. Under Nasdaq Listing Rule 5605(a)(2), a director will only qualify as an “independent director”
if, in the opinion of the Board, that person does not have a relationship that would interfere with the exercise of independent
judgment in carrying out the responsibilities of a director. In order to be considered independent for purposes of Exchange Act
Rule 10A-3, an Audit Committee member may not, other than in his or her capacity as a member of the Audit Committee, the Board
or any other committee of the Board, accept, directly or indirectly, any consulting, advisory or other compensatory fee from the
Company or any of its subsidiaries, or otherwise be affiliated with the Company or any of its subsidiaries. In order for Compensation
Committee members to be considered independent for purposes of Exchange Act Rule 10C-1, the Board must consider all factors specifically
relevant to determining whether a director has a relationship to the Company that is material to that director’s ability
to be independent from management in connection with the duties of a Compensation Committee member, including, but not limited
to: (1) the source of compensation of the director, including any consulting advisory or other compensatory fee paid by the Company
to the director; and (2) whether the director is affiliated with the Company or any of its subsidiaries or affiliates.



The
Board has reviewed the materiality of any relationship that each of our directors has with the Company and has determined that
each of Messrs. Blumenfeld, Melton, and Potts is “independent” in accordance with the Nasdaq Listing Rules. Neither
Mr. Galvin nor Mr. Shetty is considered “independent.” As such independent directors comprise a majority of our Board
and the members of our Audit, Compensation and Nominating and Corporate Governance Committees are fully independent.



There
are no family relationships between any of our directors, director nominees or executive officers.



Board
and Committee Responsibilities



Generally



The
Board is the ultimate decision-making body of the Company, except with respect to those matters to be decided by the stockholders.
It selects the Chief Executive Officer and other members of the senior management team, which is charged with the conduct of the
Company’s day-to-day business. The Board acts as an advisor and counselor to senior management and ultimately monitors its
performance. The function of the Board to monitor the performance of senior management is facilitated by the presence of non-employee
directors who have substantive knowledge of the Company’s business.



Our
Board has established a separate standing Audit Committee, Compensation and Nominating and Corporate Governance Committee. Each
of the Audit Committee, Compensation and Nominating and Corporate Governance Committee operates pursuant to a written charter,
a copy of which may be viewed on the Company’s website at https://www.sgblocks.com under the “Investors—Corporate
Governance” tab.



4







Audit
Committee



The
members of our Audit Committee are Mr. Melton, who serves as chairperson, Mr. Blumenfeld and Mr. Potts. The Audit Committee Charter
requires that the Audit Committee consist of at least three members of the Board, each of whom is required to be independent as
defined by Nasdaq and SEC rules. The Board has determined that each member of the Audit Committee is independent, as defined by
Rule 10A-3 of the Exchange Act and Nasdaq Marketplace Rule 5605(a)(2). The Board has also determined that Mr. Melton is an “audit
committee financial expert,” as defined in Item 407(d)(5) of Regulation S-K under the Exchange Act.



The
Audit Committee is directly responsible for the appointment, compensation, retention and oversight of our independent registered
public accounting firm. Functions of the Audit Committee include, but are not limited to, reviewing the results and scope of the
audit performed, and the financial recommendations provided by, our independent registered public accounting firm and coordinating
the Board’s oversight of our internal financing and accounting processes.



All
audit services to be provided to the Company by our independent public accounting firm, Whitley Penn, are pre-approved by the
Audit Committee prior to the initiation of such services (except for items exempt from pre-approval requirements under applicable
laws and rules). The Audit Committee approved all services provided by Whitley Penn to us during 2019.



Compensation
Committee



The
members of our Compensation Committee are Messrs. Melton and Potts. The Compensation Committee Charter requires that the Compensation
Committee consist of at least two members of the Board, each of whom is required to be independent as defined by Nasdaq rules.
The Board has determined that each member of the Compensation Committee is independent, as defined in Nasdaq Marketplace Rule
5605(a)(2).



Functions
of the Compensation Committee, include, but are not limited to: reviewing and approving, or recommending the Board approve, compensation
arrangements for our executive officers, including salary and payments under the Company’s equity-based plans; reviewing
compensation for non-employee directors and recommending changes to the Board; and administering our stock compensation plans.
Our principal executive officer annually reviews the performance of each of the named executive officers and other officers and
makes recommendations regarding the named executive officers and other officers and managers of the company, while the Compensation
Committee reviews the performance of our principal executive officer. The conclusions and recommendations resulting from our principal
executive officer’s review are then presented to the Compensation Committee for its consideration and approval. The Compensation
Committee can exercise its discretion in modifying any of our principal executive officer’s recommendations. The Compensation
Committee may delegate its authority to a subcommittee of its members.



In
performing its functions, the Compensation Committee may retain or obtain the advice of such compensation consultants, legal counsel
and other advisors. In February 2018, the Compensation Committee retained Haigh & Company as its independent compensation
consultant. With the assistance of Haigh & Company, the Compensation Committee developed and implemented an organizational
framework covering salary, annual bonus and equity ownership, with the goal of attracting and retaining talented individuals who
are critical to the Company’s long-term success and aligning pay with performance. However, the Compensation Committee did
not engage Haigh & Company or any other compensation consultant for 2019. Based on the information received from the consultant,
the Compensation Committee believes that the work Haigh & Company performed in 2018 did not raise a conflict of interest and
that it was fully independent.



Nominating
and Corporate Governance Committee



The
members of our Nominating and Corporate Governance Committee are Messrs. Melton and Potts. The Nominating and Corporate Governance
Committee Charter requires that the Nominating and Corporate Governance Committee consist of at least two members of the Board,
each of whom is required to be independent as defined by Nasdaq rules. The Board has determined that each member of the Nominating
and Corporate Governance Committee is independent, as defined in Nasdaq Marketplace Rule 5605(a)(2). Specific responsibilities
of the Nominating and Corporate Governance Committee include: (i) considering and recommending to the Board, candidates for election
to the Board; (ii) considering recommendations and proposals submitted by stockholders in respect of Board nominees, establishing
policies in respect of such recommendations and proposals (including stockholder communications with the board of directors),
and recommending any action to the Board in respect of such stockholder recommendations and proposals; (iii) identifying, evaluating
and recommending to the board of directors, candidates to serve on committees of the Board; (iv) assessing the performance of
the Board; and (v) reviewing risk governance structure, risk assessment and risk management practices and guidelines, policies
and processes for risk assessment and risk management .



5







Executive
Committee



The
members of our Executive Committee are Messrs. Blumenfeld, Melton and Potts. The Executive Committee was formed in March 2020.
The Executive Committee has, and may exercise, the authority of the full Board, except as may be prohibited by Delaware corporate
law (DGCL §141(c)(2)).



Changes
to Procedures for Recommending Nominees to the Board of Directors.



None.



Conduct
of Board Meetings



The
Chairman sets the agenda for Board meetings with the understanding that the Board is responsible for providing suggestions for
agenda items that are aligned with the advisory and monitoring functions of the Board. Agenda items that fall within the scope
of responsibilities of a committee of the Board are reviewed with the chair of that committee. Any member of the Board may request
that an item be included on the agenda. Board materials related to agenda items are provided to Board members sufficiently in
advance of Board meetings to allow the directors to prepare for discussion of the items at the meeting. At the invitation of the
Board, members of senior management recommended by the Chairman attend Board meetings or portions thereof for the purpose of participating
in discussions.



Role
of the Board in Risk Oversight



Our
executive officers are responsible for the day-to-day management of risks the Company faces, while our Board has an advisory role
in the Company’s risk management process, as a whole and at the committee level, and, in particular, the Board is responsible
for monitoring and assessing strategic and operational risk exposures, including cybersecurity risk. The Board and committees
rely on the representations of management, the external audit of our financial and operating results, our systems of internal
control and our historic practices when assessing the Company’s risks. The Audit Committee oversees management of financial
risk exposures and the steps management has taken to monitor and control these exposures, and additionally provides oversight
of internal controls. The Compensation Committee, in conjunction with the Audit Committee, assesses and monitors whether any of
the Company’s compensation policies and programs have the potential to encourage excessive risk-taking. While each committee
is responsible for evaluating certain risks and overseeing the management of such risks, the entire Board is regularly informed
about such risks by committee reports, as well as advice and counsel from expert advisors.



Certain
Relationships and Related Party Transactions



Any
transaction with a related person is subject to our written policy for transactions with related persons. Pursuant to such policy,
our Audit Committee reviews in advance all related person transactions. The Audit Committee approves only those related person
transactions that are determined to be in, or not inconsistent with, the best interests of the Company and its stockholders, taking
into account all available facts and circumstances as the Audit Committee determines in good faith to be necessary. These facts
and circumstances will typically include, but not be limited to: whether the transaction was undertaken in the ordinary course
of business of the Company; the purpose and potential benefits of the transaction to the Company; the terms of the transaction
and of comparable transactions that would be available to unrelated third parties or to employees generally; and the impact on
a director’s independence in the event the related person is a director, an immediate family member of a director or an
entity in which a director is a partner, stockholder or executive officer. In reviewing and approving such transactions, the Audit
Committee shall obtain, or shall direct management to obtain on its behalf, all information that the Audit Committee believes
to be relevant and important to a review of the transaction prior to its approval. The Audit Committee may adopt any further policies
and procedures relating to the approval of related person transactions that it deems necessary or advisable from time to time.



Anti-Hedging
and Anti-Pledging Policy



We
maintain an insider trading policy that applies to our officers and directors that prohibits trading our securities when in possession
of material non-public information. It also prohibits the hedging of our securities, including short sales or purchases or sales
of derivative securities based on our securities, and, unless an exemption is approved by our Audit Committee, the pledging of
our securities. Since the adoption of our insider trading policy, the Audit Committee has not granted any such exemptions to the
policy’s general prohibition on pledging.



6







Delinquent
Section 16(a) Reports



Section 16(a) of
the Exchange Act requires our executive officers, directors and persons who beneficially own more than 10 percent of a registered
class of SG Blocks, Inc. equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership
of our common stock. Such officers, directors and persons are required by SEC regulation to furnish us with copies of all Section
16(a) forms that they file with the SEC.



Based
solely on a review of the copies of such forms that were received by us, or written representations from certain reporting persons
that no Forms 5 were required for those persons, we are not aware of any failures to file reports or report transactions in a
timely manner during the year ended December 31, 2019 except for the following: (i) Mr. Armstrong who filed a late Form 4 with
respect to two transactions, both of which were grants of restricted stock units (“RSUs), (ii) Mr. Galvin who filed a late
Form 4 with respect to three transactions, all of which were grants of RSUs, (iii) Mr. Potts who filed a late Form 4 with respect
to one transaction, the grant of RSUs, and (iv) Mr. Shetty who filed a late Form 4 with respect to three transactions, all of
which were grants of RSUs.



Code
of Business Conduct and Ethics



Our
Board has adopted a Code of Business Conduct and Ethics that applies to all of our employees, officers and directors, including
our principal executive officer, principal financial officer and principal accounting officer. The Code of Business Conduct and
Ethics is posted on our website at https://www.sgblocks.com under the “Investors—Corporate Governance”
tab, and is available free of charge, upon request to our Corporate Secretary at SG Blocks, Inc., 195 Montague Street, 14th Floor,
Brooklyn, New York 11201; telephone number: (646) 240-4235. Any substantive amendment of the Code of Business Conduct and Ethics,
and any waiver of the Code of Business Conduct and Ethics for executive officers or directors, will be made only after approval
by the Board or a committee of the Board and will be disclosed on our website. In addition, any such waiver will be disclosed
within four days on a Form 8-K filed with the SEC if then required by applicable rules and regulations.



|Item 11. | Executive
    Compensation
|-------- | --------------------------



We
are a “smaller reporting company” and the following compensation disclosure is intended to comply with the requirements
applicable to smaller reporting companies. Although the rules allow us to provide less detail about its executive compensation
program, the Compensation Committee is committed to providing the information necessary to help stockholders understand its executive
compensation-related decisions. Accordingly, this section includes supplemental narratives that describe the 2019 executive compensation
program for our named executive officers.



The
following discussion and table relates to compensation arrangements on behalf of, and compensation paid by our Company to, Paul
M. Galvin, Gerald Sheeran, Stevan Armstrong and Mahesh S. Shetty.



Summary
Compensation Table



The
following table sets forth all compensation awarded to, paid to or earned by the following named executive officers for the fiscal
years ended December 31, 2019 and 2018:



|Name and Principal Position                         |  | Year |  | Salary ($) |         |     | Bonus ($) (1) |   |         | Option Awards ($) (2) |  |   | Non-Equity Incentive Plan Compensation
 ($) (3) |  |  | All Other Compensation
 ($) (4) |        |  | Total ($) |  
|--------------------------------------------------- |  | ---- |  | ---------- | ------- | --- | ------------- | - | ------- | --------------------- |  | - | ----------------------------------------------- |  |  | ------------------------------- | ------ |  | --------- | -
|Paul M. Galvin,                                     |  | 2019 |  | $          | 354,167 | (6) |               | $ | —       |                       |  | $ | —                                               |  |  | $                               | —      |  |           | $
|Chairman and Chief Executive Officer                |  | 2018 |  | $          | 370,000 | (5) |               | $ | 127,500 |                       |  | $ | 105,157                                         |  |  | $                               | 93,624 |  |           | $
|Gerald Sheeran,                                     |  | 2019 |  | $          | 136,346 | (7) |               | $ | —       |                       |  | $ | —                                               |  |  | $                               | —      |  |           | $
|Acting Chief Financial Officer and Controller       |  | 2018 |  | $          | 99,615  |     |               | $ | —       |                       |  | $ | 32,000                                          |  |  | $                               | 22,500 |  |           | $
|Mahesh S. Shetty,                                   |  | 2019 |  | $          | 191,409 | (6) |               | $ | —       |                       |  | $ | —                                               |  |  | $                               | —      |  |           | $
|Former President and Former Chief Financial Officer |  | 2018 |  | $          | 300,000 | (5) |               | $ | 127,500 |                       |  | $ | 104,118                                         |  |  | $                               | 75,000 |  |           | $
|Stevan Armstrong,                                   |  | 2019 |  | $          | 114,786 | (7) |               | $ | —       |                       |  | $ | —                                               |  |  | $                               | —      |  |           | $
|Chief Technology Officer                            |  | 2018 |  | $          | 140,000 |     |               | $ | 30,000  |                       |  | $ | 18,998                                          |  |  | $                               | 11,667 |  |           | $








| | (1) | Amounts
in this column represent a special bonus payment, which was paid in RSUs, to each of Messrs. Galvin and Shetty of $127,500 and
Mr. Armstrong of $30,000, as described further under “Narrative Disclosure to Summary Compensation Table — Special
Retention Bonus Payments” below. Such RSUs will vest in three equal annual installments, beginning on December 31, 2020.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



7







| | (2) | Represents
the aggregate grant date fair value of stock options granted to the named executive officers in the applicable year computed in
accordance with FASB ASC Topic 718, excluding the effect of estimated forfeitures. For a description of the assumptions used in
valuing these awards, see “Note 13 — Share-based Compensation” of the Notes to Consolidated Financial Statements
contained in our Annual Report on Form 10-K for the year ended December 31, 2019.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | On
March 22, 2019, the Compensation Committee approved payment of cash bonuses of $93,624 to Mr. Galvin, $75,000 to Mr. Shetty and
$11,667 to Mr. Armstrong, based their achievement of the performance criteria described under “Narrative Disclosure to Summary
Compensation Table — Bonus Payments” below. The Compensation Committee determined to pay each of these bonus payments
in the form of RSUs, which vested on December 31, 2019.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (4) | For
2019, all other compensation consisted of: Mr. Galvin — automobile allowance of $8,800 and phone allowance of $1,650; Mr.
Sheeran — phone allowance of $1,500; Mr. Shetty — automobile allowance of $6,116, phone allowance of $956, unused
vacation time that was paid to Mr. Shetty after his departure from the Company of $14,236 and $4,000 in matching contributions
under the Company’s qualified 401(k) plan; and Mr. Armstrong — phone allowance of $1,500. For 2018, all other compensation
consisted of: Mr. Galvin — automobile allowance of $9,600 and phone allowance of $1,668; Mr. Sheeran — phone allowance
of $1,250; Mr. Shetty — automobile allowance of $9,600, phone allowance of $1,500 and $4,000 in matching contributions under
the Company’s qualified 401(k) plan; and Mr. Armstrong — phone allowance of $1,800.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (5) | During
2018, Messrs. Galvin and Shetty earned salary compensation of $370,000 and $300,000, respectively, for their duties as Chairman
and Chief Executive Officer, and President and Chief Financial Officer, respectively. Messrs. Galvin and Shetty voluntarily deferred
$110,400 and $106,856, respectively, of their annual base salary during 2018. Such deferred salary amounts were paid during 2019
in the form of RSUs. The RSUs received by Messrs. Galvin and Shetty for deferred salary vested on December 31, 2019.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (6) | During
2019, Messrs. Galvin and Shetty earned salary compensation of $354,167 and $191,409, respectively, for their duties as Chairman
and Chief Executive Officer, and President and Chief Financial Officer, respectively. Messrs. Galvin and Shetty voluntarily deferred
$170,547 and $58,031, respectively, of their annual base salary during 2019. Such deferred salary amounts of $35,000 and $58,031
were paid to Messrs. Galvin and Shetty in 2020.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (7) | During
2019, Messrs. Armstrong and Sheeran deferred salary of $14,333 and $5,000, respectively, of their annual base salary during 2019.
Such deferred salary remains unpaid in 2020.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Narrative
Disclosure to Summary Compensation Table



Following
is a brief summary of each core element of the compensation program for our named executive officers.



Base
Salary



We
provide competitive base salaries that are intended to attract and retain key executive talent. Base salary levels depend on the
executive’s position, responsibilities, experience, market factors, recruitment and retention factors, internal equity factors
and our overall compensation philosophy. Effective January 1, 2017, we entered into employment agreements with Mr. Galvin, Mr.
Shetty and Mr. Armstrong as described further below under “Employment Agreements.” On July 24, 2018, the Compensation
Committee approved an increase to the annual base salary of Messrs. Galvin and Shetty, the Company’s President and Chief
Financial Officer, retroactive to January 1, 2018. Mr. Galvin’s salary increased from $240,000 to $370,000, and Mr. Shetty’s
from $220,000 to $300,000, effective January 1, 2018. Such increases were based on a competitive market assessment provided by
Haigh & Company, the Compensation Committee’s independent compensation consultant. The peer group used to conduct such
assessment, as recommended by Haigh & Company and approved by the Compensation Committee, consisted of the following companies,
chosen based on, among other things, industry, market cap, revenue, net income and headcount:



| |  | ATRM
    Holdings Inc.                 |  | Huttig
    Building Products         |  | Nobility
    Homes Inc. 
| |  | -------------------------------------- |  | ------------------------------------ |  | ------------------------
| |  | BRT
    Apartments Corporation         |  | Innovative
    Industrial Properties |  | Skyline
    Corporation 
| |  | Cadus
    Corporation                  |  | Innsuites
    Hospitality Trust      |  | Sotherly
    Hotels Inc.
| |  | Comstock
    Holding Companies         |  | Inspired
    Builders Inc.           |  | Surna
    Inc.          
| |  | Condor
    Hospitality Trust           |  | Limbach
    Holdings Inc.            |  | Tecogen                 
| |  | First
    Real Estate Investment Trust |  | New
    Home Company                 |  | UCP
    Inc.            



8







On
August 22, 2019, the Board appointed Gerald Sheeran, the former Controller of the Company, as the acting Chief Financial Officer
of the Company. We do not have a written agreement with Mr. Sheeran. Effective on August 21, 2019, the annual base salary of Mr.
Sheeran increased from $120,000 to $180,000 as a result of his appointment to Acting Chief Financial Officer.



On
December 1, 2019, the annual base salary for Mr. Galvin decreased from $370,000 to $180,000. The annual base salary for Mr. Sheeran
decreased from $180,000 to $120,000 effective December 1, 2019.



Bonus
Payments



On
July 24, 2018, based on the assessment provided by Haigh & Company, the Compensation Committee also established the performance
criteria for Messrs. Galvin and Shetty’s 2018 bonus awards and set their target bonus opportunity equal to 100% of base
salary. The performance goals were based on the achievement of certain revenue, EBITDA and backlog results, which represented
45%, 35% and 20%, respectively, of the target award. Actual amounts payable for each component could range from 0% to 150% of
the target award, based upon the extent to which performance under each component was below, met or exceeded the target, as determined
by the Compensation Committee.



Although
the Company did not have an assessment performed by a compensation consultant for 2019, it did rely on similar performance targets
for determining 2019 bonuses. No bonus was earned by any named executive officer for 2019.



Special
Retention Bonus Payments



On
March 22, 2019, the Compensation Committee awarded special retention bonus payments, payable as RSUs, to Messrs. Galvin, Shetty
and Armstrong having values of $127,500, $127,500 and $30,000, respectively, in recognition of their contributions to the Company
and the Company’s 2018 performance. Such RSUs will vest in three equal annual installments, commencing December 31, 2020,
and will be delivered within 90 days of when the executive is no longer employed by the Company. These payments are included in
the Bonus column of the “Summary Compensation Table” of this Proxy Statement.



Stock
Options



In
the past, we generally offered stock options to our key employees, including our named executive officers, as the long-term incentive
component of our compensation program. Our stock options allow key employees to purchase shares of our Common Stock at a price
per share equal to the fair market value of our common stock on the date of grant, and may be intended to qualify as “incentive
stock options” under the Internal Revenue Code.



Effective
March 30, 2018, each of Messrs. Galvin, Shetty and Armstrong were granted options to purchase 4,108, 4,067 and 742 shares of Common
Stock, respectively, with an exercise price of $92.2 per share. The options vest in equal quarterly installments over a two year
period and fully vested by the end of December 2019, in accordance with the underlying option award agreement. The options were
granted in connection with the Company’s performance during 2017, based upon certain revenue and net income targets.



Employment
Agreements



The
following discussion relates to compensation arrangements on behalf of, and compensation paid by the Company to, Messrs. Galvin,
Shetty and Armstrong pursuant to the terms of their employment agreements with the Company:



Paul
M. Galvin



We
employ Mr. Galvin, our Chief Executive Officer and Chairman of the Board, pursuant to employment agreement, effective January
1, 2017. The employment agreement provided for an initial term of two years, with automatic renewals unless earlier terminated
pursuant to the provisions of the employment agreement. The employment agreement originally provided for base compensation in
the amount of $240,000 per year, which was increased to $370,000 in early 2019, but subsequently reduced to $180,000 in December
2019. The employment agreement also provides for incentive compensation at the discretion of our Board. The agreement provides
for the payment of severance compensation in an amount equal to one year of his base annual salary, if his employment is terminated
by the Company other than for “Cause,” as defined therein.



Gerald
Sheeran



We
do not have a written employment agreement with Mr. Sheeran. Effective on August 21, 2019, the annual base salary of Mr. Sheeran
increased from $120,000 to $180,000 as a result of his appointment as the Company’s Acting Chief Financial Officer but subsequently
reduced to $120,000 in December 2019



9







Stevan
Armstrong



Since
January 1, 2017 Mr. Armstrong has served as our Chief Technology Officer. His employment agreement that was effective as of January
1, 2017 provided for base compensation in the amount of $140,000 per year and incentive compensation at the discretion of our
Board, which was reduced to $50,000 in November 2019. The employment agreement provided for an initial term of two years, with
automatic renewals unless earlier terminated pursuant to the provisions of the employment agreement. Mr. Armstrong previously
served as our President and Chief Operating Officer until his appointment as Chief Technology Officer, effective February 1, 2018.
The employment agreement further provided for the payment of severance compensation equal to one year of his base annual salary
if his employment is terminated by the Company other than for “Cause,” as defined therein. Mr. Armstrong currently
provides services to us pursuant to the terms of a consulting agreement on a part-time basis. On April 13, 2019, we entered into
a consulting agreement with SMA Development Group, LLC, an entity of which Mr. Armstrong is the sole member and manager pursuant
to which Mr. Armstrong was retained to serve as our Chief technology Officer and provide services for a monthly fee of $4,166.67
plus a phone reimbursement of $75 per month. The agreement provided for an initial term that expired December 31, 2020, with automatic
renewals of an additional three months unless earlier terminated pursuant to the provisions of the agreement.



Mahesh
S. Shetty



We
employed Mr. Shetty, our former Chief Financial Officer and President, pursuant to an employment agreement, effective January
1, 2017. The employment agreement provided for an initial term of two years, with automatic renewals unless earlier terminated
pursuant to the provisions of the employment agreement. Effective February 1, 2018, Mr. Shetty was appointed President, in addition
to his roles as Chief Financial Officer and member of the Board. Mr. Shetty’s employment agreement provided for base compensation
in the amount of $180,000 per year, as later increased to $300,000, and incentive compensation at the discretion of our Board.
The agreement further provides for the payment of severance compensation equal to one year of his base annual salary if his employment
is terminated by the Company other than for “Cause,” as defined therein. On August 20, 2019, Mr. Shetty terminated
his employment as President and Chief Financial Officer of the Company.



Retirement,
Health, Welfare, and Additional Benefits



Our
executive officers are eligible to participate in our employee benefit plans and programs, including medical benefits, flexible
spending accounts, short and long-term disability and life insurance, to the same extent as our other full-time employees,
subject to the terms and eligibility requirements of those plans. Our executive officers are also eligible to participate in a
tax-qualified 401(k) defined contribution plan to the same extent as our other full-time employees. Currently, we do match contributions
made by participants in the 401(k) plan or make other contributions to participant accounts.



10







Outstanding
Equity Awards at Fiscal Year-End



The
following table sets forth information regarding the outstanding option awards held by the named executive officers as of December
31, 2019:



|                 |  | Options Awards |  | Stock Awards                                                        |      
|---------------- |  | -------------- |  | ------------------------------------------------------------------- | -----
|Name             |  | Grant Date     |  | Number of Securities Underlying Unexercised Options (#) Exercisable |      
|Paul M. Galvin   |  | 3/22/2019      |  |                                                                     | —    
|                 |  | 3/30/2018      |  |                                                                     | 4,108
|                 |  | 3/10/2017      |  |                                                                     | 5,298
|                 |  | 3/10/2017      |  |                                                                     | 3,973
|                 |  | 1/30/2017      |  |                                                                     | 4,841
|                 |  | 11/01/2016     |  |                                                                     | 4,914
|                 |  | 11/01/2016     |  |                                                                     | 667  
|Mahesh S. Shetty |  | 3/30/2018      |  |                                                                     | 4,067
|                 |  | 3/10/2017      |  |                                                                     | 3,973
|                 |  | 3/10/2017      |  |                                                                     | 2,649
|                 |  | 1/30/2017      |  |                                                                     | 3,452
|                 |  | 11/01/2016     |  |                                                                     | 1,092
|                 |  | 11/01/2016     |  |                                                                     | 667  
|Stevan Armstrong |  | 3/22/2019      |  |                                                                     | —    
|                 |  | 3/30/2018      |  |                                                                     | 742  
|                 |  | 1/30/2017      |  |                                                                     | 1,724
|                 |  | 11/01/2016     |  |                                                                     | 2,184
|Gerald Sheeran   |  | 03/30/2018     |  |                                                                     | 729  








| | (1) | In
                                         connection with a public offering by the Company, completed in June 2017, Messrs. Galvin
                                         and Shetty were each granted performance-based option awards, to vest upon the completion
                                         of certain conditions. A portion of the shares were granted at an exercise price to equal
                                         the price per share at which the public purchased shares in the offering ($100.00 per
                                         share), while the remainder were granted at an exercise price equal to 120% of such price
                                         per share ($120.00 per share). In September 2017, the Compensation Committee determined
                                         that each of Messrs. Galvin and Shetty met his respective performance conditions, and
                                         the option awards vested in full.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | With
                                         respect to Mr. Galvin, 990 options vested on the grant date, while the remaining 3,851
                                         vested in equal quarterly installments on the last day of each fiscal quarter following
                                         the date of grant over a two-year period. With respect to Mr. Shetty, 660 options vested
                                         on the grant date, while the remaining 2,792 vested in equal quarterly installments on
                                         the last day of each fiscal quarter following the date of grant over a two-year period.
                                         With respect to Mr. Armstrong, 660 vested on the grant date, while the remaining 1,064
                                         vested in equal quarterly installments on the last day of each fiscal quarter following
                                         the date of grant over a two-year period. All options vested in full as of December
                                         31, 2018.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | Of
                                         these options, 2,184 vested on the grant date, while the remainder vest in three equal
                                         installments of 910 on the three anniversaries following the grant date. Such options
                                         vested in full as of November 1, 2019.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (4) | Messrs.
                                         Galvin and Shetty received these options in connection with their service as directors
                                         of the Company. The options vested in equal quarterly installments on the last day of
                                         each fiscal quarter following the date of grant and vested in full as of September 30,
                                         2017.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (5) | Of
                                         these options, 546 vested on the date of grant, while the remaining 546 vested on February
                                         21, 2017.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (6) | Of
                                         these options, 1,092 vested on the grant date, while the remainder vested in two equal
                                         installments of 546 on the anniversary of the grant date, and vested in full as of November
                                         1, 2018.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (7) | These
                                         options vest in equal quarterly installments over a two year period, beginning March
                                         31, 2018, and vested in full as of December 31, 2019.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (8) | These
                                         options vest in equal quarterly installments over a three year period, beginning March
                                         30, 2018, and vest in full as of March 31, 2021.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (9) | The shares subject to these restricted stock units vest in three equal installments over a three year period, beginning December 31,2020, and vest in full as of December 31, 2022.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



11







EQUITY
COMPENSATION PLAN INFORMATION



As
of December 31, 2019, the following securities issued under equity compensation were outstanding:



|Plan Category                                              |  | Number of Shares Issuable Upon Exercise of Outstanding Options, Warrants or Rights (a) (1) |        |  | Weighted- Average Exercise Price of Outstanding Options (b) |   |       | Number of Shares Remaining Available for Issuance Under Equity Compensation Plans (Excluding Shares Reflected in Column (a)) (c) (2) | 
|---------------------------------------------------------- |  | ------------------------------------------------------------------------------------------ | ------ |  | ----------------------------------------------------------- | - | ----- | ------------------------------------------------------------------------------------------------------------------------------------ | 
|Equity compensation plans approved by security holders     |  |                                                                                            | 75,029 |  |                                                             | $ | 81.26 |                                                                                                                                      | 
|Equity compensation plans not approved by security holders |  |                                                                                            | —      |  |                                                             |   | —     |                                                                                                                                      | 
|Total                                                      |  |                                                                                            | 75,029 |  |                                                             | $ | 81.26 |                                                                                                                                      | 








| | (1) | Includes
                                         53,170 shares issuable upon the exercise of options and 21,859 shares issuable upon the
                                         vesting of restricted stock units outstanding under the SG Blocks, Inc. Stock Incentive
                                         Plan.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Represents
                                         shares available for issuance under the SG Blocks, Inc. Stock Incentive Plan.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------



DIRECTOR
COMPENSATION

Compensation
Program



Our
director compensation program is designed to attract and retain highly qualified directors and align their interests with those
of our stockholders. We compensate directors who are not employed by the Company with a combination of cash and equity awards.
Mr. Galvin did not receive any compensation for serving on our Board in 2019. Mr. Shetty did earn compensation for serving on
our Board after his employment ended in 2019, which amount was a pro-rated to pay him for each full quarter for which he provided
services as a director and was no longer an executive officer.



The
Compensation Committee reviews the director compensation program and recommends proposed changes for approval by the Board. As
part of this review, the Compensation Committee considers the significant amount of time expended, and the skill level required,
by each director not employed by the Company in fulfilling his or her duties on the Board, each director’s role and involvement
on the Board and its committees and the market compensation practices and levels of our peer companies.



During
its annual review of the director compensation program in 2018, the Compensation Committee considered an analysis prepared by
its independent consultant, Haigh & Company, which summarized director compensation trends for independent directors and pay
levels at the same peer companies used to evaluate the compensation of our named executive officers. Following this review, and
after considering the advice of Haigh & Company about market practices and pay levels, the Compensation Committee recommended,
and the Board approved, the new compensation program for non-employee directors described below, which remained in effect during
2019.



Cash
Fees



The
Company’s directors did not receive a cash fee for serving on the Board previously to January 1, 2018. The following table
sets forth the cash fee schedule for compensating non-employee directors, effective January 1, 2018, which remained in effect
during 2019:



|Annual Board Retainer                               |  | $ | 30,000 | 
|--------------------------------------------------- |  | - | ------ | 
|Lead Independent Director                           |  | $ | 10,000 | 
|Audit Committee Chair                               |  | $ | 10,000 | 
|Compensation Committee Chair                        |  | $ | 7,500  | 
|Nominating and Corporate Governance Committee Chair |  | $ | 5,000  | 



The
above fees are to be paid quarterly in advance, in four equal installments, to each person serving as a non-employee director
at the time when such payment is made. Beginning with the 2019 calendar year, non-employee directors may choose to receive the
$30,000 annual Board retainer as equity in restricted stock units (“RSUs”), in either a $15,000 or $30,000 increment,
effective January 15 of the year in which the annual cash retainer is otherwise earned. Among other things, each RSU granted represents
the right to receive one share of Common Stock; vests one year after grant, subject to the recipient’s continued service
as a director of the Company through such date; and is payable six months after the termination of the director from the Board
or death or disability. Directors receive no additional per-meeting fee for Board or committee meeting attendance.



Annual
Equity Awards



In
addition, pursuant to the SG Blocks, Inc. Stock Incentive Plan, non-employee directors will receive an annual grant of RSUs (the
“Equity Awards”), with a grant date value of $30,000. The grant date of the Equity Awards will generally be the date
of the Company’s annual meeting of stockholders during the year of grant. The Equity Awards will be granted pursuant to
the form of Restricted Share Unit Agreement (the “RSU Agreement”) adopted by the Board in connection with the new
compensation arrangements. Among other things, the RSU Agreement provides that each Equity Award (i) represents the right to receive
one share of Common Stock per RSU granted; (ii) vests on the earlier of (A) the first anniversary of the date of grant or (B)
the date of the annual meeting of the Company’s stockholders that occurs in the year immediately following the date of grant,
subject to the recipient’s continued service as a director of the Company through such date; and (iii) is payable six months
after the termination of the director from the Board or death or disability.

12







The
Equity Awards for 2019 service were granted on June 5, 2019 to the non-employee directors serving as of the conclusion of the
Company’s annual meeting of stockholders held on June 5, 2019, with each such director receiving a grant of 1,838 RSUs,
and will vest on the date of the 2020 Annual Meeting.



Additional
Compensation



In
connection with special committees that the Board may form from time to time in connection with various transactions or undertakings,
the Board may award additional compensation to the directors, in its discretion, for membership on such special committees. The
Board may, from time to time, grant additional merit-based cash or equity compensation to non-employee directors for extraordinary
service. All directors are reimbursed for expenses incurred in connection with each Board and committee meeting attended.



Director
Compensation TableThe following table sets forth information regarding all forms of compensation that were both earned by
and paid to our non-employee directors during the year ended December 31, 2019. The compensation arrangements for Mr. Galvin
is disclosed in the Summary Compensation Table set forth in the “Executive Compensation” section of this Annual Report
on Form 10-K/A. The compensation arrangements for Mr. Shetty with respect to fees paid as a director while he served as a named
executive officer is disclosed in the Summary Compensation Table set forth in the “Executive Compensation” section
of this this Annual Report on Form 10-K/A. Mr. Galvin did not receive compensation for his services as a director during the year
ended December 31, 2019. Mr. Shetty earned compensation set forth in the chart below for his services as a director in the fourth
quarter of 2019, after he no longer served as an executive officer.



|Name                      |  | Fees Earned or Paid in Cash ($) |        |  | Stock Awards (1) |   |        | All Other Compensation
 ($) |  |   | Total | 
|------------------------- |  | ------------------------------- | ------ |  | ---------------- | - | ------ | --------------------------- |  | - | ----- | 
|Balan R. Ayyar (2)        |  | $                               | 22,500 |  |                  | $ | 32,713 |                             |  | $ | —     | 
|Yaniv Blumenfeld (4)      |  | $                               | 30,000 |  |                  | $ | 33,785 |                             |  | $ | —     | 
|Christopher Melton (5)    |  | $                               | 45,000 |  |                  | $ | 32,713 |                             |  | $ | —     | 
|A. Richard Moore, Jr. (3) |  | $                               | 23,750 |  |                  | $ | 32,713 |                             |  | $ | —     | 
|James C. Potts (6)        |  | $                               | 33,750 |  |                  | $ | 47,368 |                             |  | $ | —     | 
|Mahesh S. Shetty (7)      |  | $                               | 7,500  |  |                  | $ | —      |                             |  | $ | —     | 








| | (1) | This
                                         column indicates the aggregate grant date fair value, as determined in accordance with
                                         Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation
                                         — Stock Compensation (“FASB ASC Topic 718”), of the RSUs granted in
                                         June 2019. See “Note 13 — Share-based Compensation” of the Notes to
                                         Consolidated Financial Statements contained in our Annual Report on Form 10-K for the
                                         year ended December 31, 2019 for an explanation of the assumptions made in valuing these
                                         awards. Each of our current non-employee directors serving at the time of the 2019 Annual
                                         Meeting received a grant of 1,838 RSUs, effective June 5, 2019, which will vest on the
                                         date of the 2020 Annual Meeting.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Mr.
                                         Ayyar voluntarily resigned from the Board November 6, 2019, at which time his unvested
                                         RSUs were forfeited and were no longer outstanding.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | Mr.
                                         Moore voluntarily resigned from the Board August 19, 2019, at which time his unvested
                                         RSUs were forfeited and were no longer outstanding.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (4) | Amount
                                         includes fees ($15,000 for Mr. Blumenfeld) earned for Board and committee service in
                                         fiscal 2019 of which ($10,000) remains unpaid in 2020. In addition, Mr. Blumenfeld elected
                                         to receive half of the annual board retainer fee ($15,000) in the form of RSUs on January
                                         15, 2019, which $15,000 is included in the $30,000 of fees earned by Mr. Blumenfeld in
                                         2019. The fair value of the RSUs at grant date exceeded the award value by $1,072, which
                                         $1,072 is included in the stock awards column.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (5) | Amount
                                         includes fees ($5,000 for Mr. Melton) earned for Board and committee services in fiscal
                                         2019 of which (5,000) remains unpaid in 2020.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (6) | Amount
                                         includes fees ($11,250 for Mr. Potts) earned for Board and committee services in fiscal
                                         2019 that remains unpaid in 2020. Mr. Potts was granted 271 RSUs with a total award value of
$14,656 effective February 2019 for serving on the Board, which vested on the date of the 2019 Annual Meeting.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (7) | Amount
                                         includes fees ($7,500 for Mr. Shetty) earned for Board services in fiscal 2019 that remains
                                         unpaid in 2020.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The
aggregate number of option and stock awards outstanding (including exercisable and unexercised stock options and vested and unvested
RSUs) as of December 31, 2019 for each non-employee director was as follows:



|Name                  |  | Option Awards (#)     |  | Stock Awards (#)
|--------------------- |  | --------------------- |  | ----------------
|Balan R. Ayyar        |  | 833 (all exercisable) |  | 280 RSUs        
|Yaniv Blumenfeld      |  | —                     |  | 2,372 RSUs      
|Christopher Melton    |  | 833 (all exercisable) |  | 2,117 RSUs      
|A. Richard Moore, Jr. |  | —                     |  | 280 RSUs        
|James C. Potts        |  | —                     |  | 2,109 RSUs      



Options
granted to Mr. Moore during his service on our Board that were exercisable at the time he departed from the Board terminated 90
days after his service ended on August 19, 2019 and were no longer outstanding at December 31, 2019.



13







|Item 12. | Security
    Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|-------- | --------------------------------------------------------------------------------------------------



Security
Ownership of Management and Certain Beneficial Owners



Unless
otherwise indicated the mailing address of each of the stockholders below is c/o SG Blocks, Inc., 195 Montague Street, 14th Floor,
Brooklyn, New York 11201. Except as otherwise indicated, and subject to applicable community property laws, except to the extent
authority is shared by both spouses under applicable law, the Company believes the persons named in the table have sole voting
and investment power with respect to all shares of common stock held by them.



The
following table sets forth the number of shares of Common Stock beneficially owned as of April 14, 2020 by: (i) each person known
by the Company to own beneficially more than 5% of the outstanding shares of common stock; (ii) each director of the Company;
(iii) each executive officer of the Company; and (iv) all directors and executive officers of the Company as a group. The information
is determined in accordance with Rule 13d-3 promulgated under the Exchange Act. Except as indicated below, the stockholders listed
possess sole voting and investment power with respect to their shares of common stock.



|                                                                             |  |        |         |  |            |  |        | Total        |  |  |            | 
|---------------------------------------------------------------------------- |  | ------ | ------- |  | ---------- |  | ------ | ------------ |  |  | ---------- | 
|                                                                             |  |        |         |  | Shares     |  |        | Number of    |  |  |            | 
|                                                                             |  |        |         |  | subject to |  |        | Shares       |  |  |            | 
|                                                                             |  | Common |         |  | Options &  |  |        | Beneficially |  |  | Percentage | 
|Name of Beneficial Owner(1)                                                  |  | Stock  |         |  | RSU        |  |        | Owned        |  |  | Ownership  | 
|Executive Officers & Directors                                               |  |        |         |  |            |  |        |              |  |  |            | 
|                                                                             |  |        |         |  |            |  |        |              |  |  |            | 
|Paul M. Galvin, Chairman and Chief Executive Officer(2)                      |  |        | 6,170   |  |            |  | 23,800 |              |  |  | 29,970     | 
|Yaniv Blumenfeld, Director(3)                                                |  |        | 1,556   |  |            |  | 1,838  |              |  |  | 3,394      | 
|Christopher Melton, Director(4)                                              |  |        | 557     |  |            |  | 2,671  |              |  |  | 3,228      | 
|James C. Potts, Director(5)                                                  |  |        | 271     |  |            |  | 1,838  |              |  |  | 2,109      | 
|Mahesh S. Shetty, Director (Former President and Chief Financial Officer)(6) |  |        | 5,729   |  |            |  | 15,900 |              |  |  | 21,629     | 
|Stevan Armstrong, Chief Technology Officer(7)                                |  |        | 822     |  |            |  | 4,650  |              |  |  | 5,472      | 
|Gerald Sheeran, Acting Chief Financial Officer(8)                            |  |        | 417     |  |            |  | 729    |              |  |  | 1,146      | 
|                                                                             |  |        |         |  |            |  |        |              |  |  |            | 
|All Executive Officers and Directors, as a group (7 persons)                 |  |        | 15,522  |  |            |  | 51,426 |              |  |  | 66,948     | 
|                                                                             |  |        |         |  |            |  |        |              |  |  |            | 
|5% or Greater Stockholders                                                   |  |        |         |  |            |  |        |              |  |  |            | 
|Larry G. Swets, Jr.(9)                                                       |  |        | 143,157 |  |            |  | —      |              |  |  | —          | 
|Empery Asset Management, LP  and affiliates(10)                              |  |        | 120,000 |  |            |  | —      |              |  |  | —          | 
|Altium Growth Fund, LP (11)                                                  |  |        | 116,500 |  |            |  | —      |              |  |  | —          | 








| | * | Less
than 1% ownership interest
| | - | -------------------------------



| | (1) | The
number of shares and the percent beneficially owned by each entity or individual are based upon 1,610,524 shares of Common Stock
outstanding and assume the exercise of all exercisable options and vesting of all outstanding time-based restricted stock units
(including those that would be exercisable or vested within 60 days of April 14, 2020). The percent beneficially owned is a fraction,
the numerator of which is the number of shares of Common Stock beneficially owned by each entity or individual (including any
exercisable options, as described herein) and the denominator of which is the number of outstanding shares of Common Stock plusthe number of shares of Common Stock which would be issued upon (i) exercise by the subject entity or individual of such entity
or individual’s own options and warrants and (ii) vesting of outstanding time-based restricted stock units. This method
of computing the percent beneficially owned results in the aggregate ownership percentages of all owners exceeding 100%.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Includes
5,663 shares of Common Stock held directly by Mr. Galvin and 507 shares held by TAG Partners, LLC (“TAG”), an investment
partnership formed for the purpose of investing in the Company. Mr. Galvin is a managing member of and has a controlling interest
in TAG and may be deemed to beneficially own the share of Common Stock held by TAG, over which he has shared voting and dispositive
power. Mr. Galvin disclaims beneficial ownership of the shares of Common Stock held by TAG except to the extent of his pecuniary
interest therein. Also includes 23,800 options to purchase our common shares presently exercisable or exercisable within 60 days
of April 14, 2020. Does not include 13,692 unvested RSUs that will not vest within 60 days of April 14, 2020.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | Includes 1,556
                                                                                                                                                               shares of Common Stock directly held by Mr. Blumenfeld. Includes 1,838 RSUs that will vest within 60 days of April 14, 2020. Does not include 4,000 unvested RSUs that will not vest within 60 days of April 14, 2020.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (4) | Includes
20 shares of Common Stock held in Mr. Melton’s retirement account, which Mr. Melton indirectly owns, and 537 shares of Common
Stock held directly by Mr. Melton and 1,838 RSUs that will vest within 60 days of April 14, 2020. Includes 833 options held by
Mr. Melton to purchase our Common Stock presently exercisable or exercisable within 60 days of April 14, 2020. Does not include 4,000 unvested RSUs that will not vest within 60 days of April 14, 2020.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





14







| | (5) | Includes
271 of Common Stock held by Mr. Potts. Includes 1,838 RSUs that will vest within 60 days of April 14, 2020. Does not include 4,000 unvested RSUs that will not vest within 60 days of April 14, 2020.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (6) | Includes
5,729 shares of Common Stock held directly by Mr. Shetty and 15,900 options to purchase our Common Stock presently exercisable
or exercisable within 60 days of April 14, 2020. Mr. Shetty separated as an officer from our company on August 20, 2019 but remains
a director.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (7) | Includes
216 shares of Common Stock held directly by Mr. Armstrong and 606 shares of Common Stock held by SMA Development Group, LLC, an
entity controlled by Mr. Armstrong. Mr. Armstrong and SMA Development Group, LLC, share voting and dispositive power over such
shares. Mr. Armstrong disclaims beneficial ownership of such shares, except to the extent of his pecuniary interest therein, and
this shall not be deemed to be an admission that Mr. Armstrong is the beneficial owner of such shares. The business address for
SMA Development Group, LLC, is 912 Bluff Road, Brentwood, Tennessee 37027. Also includes 4,650 options to purchase Common Stock
presently exercisable or exercisable within 60 days of April 14, 2020. Does not include 556 unvested RSUs that will not vest within 60 days of April 14, 2020.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (8) | Includes 417 shares of Common Stock held by Mr. Sheeran. Also includes 729 options to
                                                                                                                                                               purchase Common Stock presently exercisable or exercisable within 60 days of April 14, 2020. Does not include 3,000 unvested RSUs that will not vest within 60 days of April 14, 2020.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (9) | Share
ownership information is based on information contained in a Schedule 13D/A filed with the SEC on April 2, 2020 by Larry G. Swets,
Jr. The principal business address of Mr. Swets is 105 S. Maple, Itasca, Illinois 60143.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (10) | Share
ownership information is based on information contained in a Schedule 13G filed with the Securities and Exchange Commission on
April 3, 2020 by Empery Asset Management, LP (the “Investment Manager”), Ryan M. Lane and Martin D. How with respect
to the shares of our common stock held by funds to which the Investment Manager serves as investment manager (the “Empery
Funds”). The Investment Manager, which serves as the investment manager to the Empery Funds, may be deemed to be the beneficial
owner of all shares of common stock held by the Empery Funds.  Each of Mr. Lane and Mr. How, as Managing Members of
the General Partner of the Investment Manager with the power to exercise investment discretion, may be deemed to be the beneficial
owner of all shares of common stock held by the Empery Funds.   The principal business address of the Investment Manager
is 1 Rockefeller Plaza, Suite 1205, New York, New York 10020.
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (11) | Share
ownership information is based on information contained in a Schedule 13G filed with the Securities and Exchange Commission on  April
10, 2020 by Altium Growth Fund, LP, Altium Capital Management, LLC, and Altium Growth GP, LLC (collectively, the “Altium
Entities”). Altium Growth Fund, LP is the record and direct beneficial owner of these securities. Altium Capital Management,
LP is the investment adviser of, and may be deemed to beneficially own securities, owned by, Altium Growth Fund, LP. Altium Growth
GP, LLC is the general partner of, and may be deemed to beneficially own securities owned by, Altium Growth Fund, LP. The address
of the principal business office of each of the Altium Entities is 152 West 57 Street, FL 20, New York, NY 10019.
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



15







|Item 13. | Certain
    Relationships and Related Transactions, and Director Independence
|-------- | -----------------------------------------------------------------------------



Related
Party Transactions



Pursuant
to our Audit Committee charter, our Audit Committee shall review on an on-going basis our policies and procedures for reviewing
and approving or ratifying all “Related Party Transactions” (defined as transactions required to be disclosed pursuant
to Item 404 of Regulation S-K), including the Company’s Related Person Transaction Policy, and recommend any changes to
the Board. In accordance with our Related Person Transaction Policy and Nasdaq Rule 4350 (h), the Audit Committee shall conduct
appropriate review and oversight of all related person transactions for potential conflict of interest situations on an ongoing
basis.



The
following is a summary of transactions since January 1, 2018 to which we have been a party in which the amount involved exceeded
$120,000 and in which any of our executive officers, directors or beneficial holders of more than five percent of our capital
stock had or will have a direct or indirect material interest, other than compensation arrangements and equity awards granted
to our executive officers and directors during 2018 and 2019 that are described under the sections of this Annual Report on Form 10-K/A
entitled “Part III—Item 11. “Executive Compensation” and “Part III—Item 11.
“Director Compensation.”



On
January 21, 2020, CPF GP 2019-1 LLC (“CPF GP”) issued to the Company a promissory note in the principal amount of
$400,000 (the “Company Note”) and issued to Paul Galvin, the Company’s Chairman and CEO, a promissory note in
the principal amount of $100,000 (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.



On
January 31, 2020, Mahesh Shetty, the Company’s former President and Chief Financial Officer (“Former Employee”),
filed suit against the Company and its Chairman and Chief Executive Officer, Paul Galvin, claiming (i) $372,638 in unpaid
wages and bonuses and (ii) $300,000 due in severance (hereafter the “Action”). The Former Employee has also
named the Company’s third party payroll processing company Staff-One as a co-defendant. The Company maintains that the Former
Employee agreed to accept (and did receive) restricted stock units of the Company’s common stock in full satisfaction and
payment of all alleged unpaid wages and bonuses that are claimed in the Action, and/or has otherwise been paid in full for all
amounts claimed. The Company further maintains that the Former Employee’s employment agreement precludes any entitlement
to or liability for severance. On March 25, 2020, the Former Employee filed an amended complaint raising additional claims of
retaliation and indemnification. The Company denies the merits of the claims set forth in the Former Employee’s amended
complaint and/or asserts that valid defenses preclude any recovery, and intends to vigorously defend against the Action. 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 possible 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 condensed consolidated financial statements.



Independence
of the Board of Directors



Our
Board of Directors undertook a review of the independence of the members of our Board of Directors and considered whether any
director has a material relationship with our company that could compromise his ability to exercise independent judgment in carrying
out his responsibilities. Based on such review, the Board has determined that each of Messrs. Blumenfeld, Melton, and Potts qualifies
as “independent” in accordance with applicable Nasdaq Listing Rules and SEC rules and regulations. See the section
of this Annual Report on Form 10-K/A entitled “Part III—Item 10. Directors, Executive Officers and Corporate Governance—The
Board and its Committee—Director Independence” for a more detailed discussion of our independent directors.



16







|Item 14. | Principal
        Accounting Fees and Services
|-------- | ----------------------------------------------



Independent
Registered Public Accounting Firm Fees



The
following table sets forth the aggregate fees for professional service rendered by Whitley Penn for each of the last two fiscal
years:



|                       |  | 2019 |         |  | 2018 |  
|---------------------- |  | ---- | ------- |  | ---- | -
|Audit fees (1)         |  | $    | 243,128 |  |      | $
|Audit-related fees (2) |  |      | —       |  |      |  
|Tax fees (3)           |  |      | —       |  |      |  
|All other fees (4)     |  |      | —       |  |      |  
|Totals                 |  | $    | 243,128 |  |      | $








| | (1) | Audit
                                         fees include fees paid to Whitley Penn for professional services rendered for the audit
                                         for our annual financial statements and reviews of the financial statements included
                                         in our Quarterly Reports on Form 10-Q and fees related to securities registration statements
                                         and related comfort letter procedures.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Audit-related fees principally involve other assurance and related services.
| | --- | ----------------------------------------------------------------------------

| | (3) | Tax
                                         services include tax compliance and tax planning consulting services. No tax services
                                         were performed for us by Whitley Penn in 2019 or 2018.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (4) | No
                                         other services were performed for us by Whitley Penn in 2019 or 2018.
| | --- | -----------------------------------------------------------------------------------------------------------------



As
discussed in “Part III—Item 10. The Board and its Committees—Board and Committee Responsibilities—Audit
Committee,” the Audit Committee has implemented pre-approval procedures consistent with the rules adopted by the SEC. The
Audit Committee has determined that the provision of the services by Whitley Penn reported hereunder had no impact on its independence.



17







Part
IV



|Item 15. | Exhibits,
    Financial Statement Schedules
|-------- | -------------------------------------------



(a)(3)
Exhibits.



The
exhibits listed in the Exhibit Index of the Original Filing and the exhibits listed in the Exhibit Index of this Amendment No.
1 appearing below after the Signature page are filed with, and incorporated by reference in, this Annual Report on Form 10-K/A.



18







Signature



Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Amendment
No. 1 to be signed on its behalf by the undersigned, thereunto duly authorized, on the 15th day of April 2020.



| | SG BLOCKS, INC.
| | ---------------
| |                
| | By:            
| |                
| |                



19







EXHIBIT
INDEX



The
following Exhibits are included in this Amendment No. 1



|Exhibit
Number |  | Description of Exhibits                                                                                  
|-------------- |  | ---------------------------------------------------------------------------------------------------------
|               |  |                                                                                                          
|31.3*          |  | Certification by Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002       
|               |  |                                                                                                          
|31.4*          |  | Certification by Acting Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002










| | * | Filed herewith.
| | - | ---------------





20