As filed with the Securities and Exchange Commission on December 5, 2011

Registration No. 333-

UNITED STATES

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

CALCULATION OF REGISTRATION FEE

The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the Registration Statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

SG BLOCKS, INC.Blocks, Inc.

This is a public offering of shares of common stock

We are offering       shares of common stock $0.01 par value per share. It is currently estimated that the public offering price per share namedwill be between $        and $       . We intend to list our common stock on The Nasdaq Capital Market under the symbol “SGBX.”

Investing in this prospectusour common stock involves a high degree of 23,090,050risk. See “Risk Factors” on page 7 to read about factors you should consider before buying shares of our common stock including 1,044,584 shares of our common stock issuable upon exercise ofstock.

Neither the warrants held by one of the selling stockholders. These existing holders of our common stock are referred to as “selling stockholders” throughout this prospectus.

____________

(1)     See “Underwriting” for additional information regarding total underwriter compensation.

We have granted the underwriter a 45-day option to purchase up to        additional shares of common stock at the public offering price less the underwriting discount solely to cover over-allotments, if any. If the underwriter exercises this option in any jurisdiction wherefull, the offer is not permitted under applicable local laws.

Delivery of the shares of common stock will be made on or about        , 2017.

Joseph Gunnar & Co.

Prospectus dated       , 2017

Table of Contents

Through and including       , 2017 (the 25thday after the date of this prospectus is ___________, 2011

We have not authorized anyone to provide you with different information.any information or to make any representations other than those contained in this prospectus or in any free writing prospectuses we have prepared. We take no responsibility for and can provide no assurance as to the reliability of any other information that others may give you. This prospectus is an offer to sell only the shares offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date.

For investors outside the United States: Neither we nor the underwriter has done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering and the distribution of this prospectus outside of the United States.

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This prospectus includes statistical and other industry and market data that we obtained from our own internal estimates, industry publications and research, surveys, and studies conducted by third parties. Industry publications and third-party research, surveys, and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. While we believe these industry publications and third-party research, surveys, and studies are reliable, we have not independently verified such data. Accordingly, you are cautioned not to give undue weight to such information.

Our business, financial condition, resultsregistered trademarks include SGBlocks^®. All other registered trademarks or service marks appearing in this prospectus are trademarks or service marks of operations and prospectus may have changed since that date.

PROSPECTUS SUMMARY

This summary highlights and is qualified in its entirety by information contained elsewhere in this document.  Youprospectus and does not contain all of the information that you should consider in making your investment decision. Before investing in our common stock, you should read this entire prospectus carefully, including the sectionsections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the related notes included elsewherenotes.

As used in this document or incorporated by reference herein.  Unlessprospectus, unless the context otherwise requires, “SG Blocks,references to “SGB,” the ““the Company,,” “we,“we,” “our,” “us“us,” and similar expressions“our” refer to SG Blocks, Inc. (formerly CDSI Holdings Inc.), and noteits subsidiaries, as the selling stockholders.  Where context requires,requires.

Description of Business

SGB is in the “Company,” “we,” “our,” “us” and similar expressions refer to SG Blocks together with SG Building Blocks, Inc. (“SG Building”) our wholly-owned subsidiary and only operating business.  As used in this prospectus, the term “common stock” means SG Blocks common stock, par value $0.01 per share.

Once retained for a construction project, SGB selects shipping containers it determines to be appropriate for the customer’s application, and then redesigns and re-engineers the shipping containers to be configured for that particular use. These configurations often require structural changes, such as wall reconfigurations, the addition of door and window openings, and ceiling operations. Configurations can also include interior pre-finish modularization.

We only use containers which bear an approval plate from the International Convention for Safe Containers (the “CSC”) when creating an SG BlockTM. The CSC approval plate confirms that the containers were tested and certified as having strength characteristics greater than traditional use in construction applications. Using solely CSC certified containers provides us with an assurance that the specific containers that we use will be strong enough for use in construction applications. In addition to ensuring that all of our containers have a CSC approval plate, before selection as an SG BlockTM, every container is inspected for structural damage, out-of-plane dents, warping, water tightness, and overall condition.

Our use of SG BlocksTM is consistent with sustainable or “green” building practices intended to conserve natural resources and reduce impact on the environment. As a repurposed shipping container, an SG BlockTM reuses existing materials in a way that is more efficient than construction made of new steel or wood. It also saves the energy that would otherwise be used to recycle the container into new steel products. SGB considers being a “green” construction option one of the many competitive advantages it offers over traditional construction methods and practices.

SGB’s products have been featured in reports by several leading media outlets, including Fortune, NY Times, NY Post, USA Today, CNN, Washington Post, ABC World News, NBC Nightly News, and Bob Vila. SGB has completed projects for: the United States (“U.S.”) Army, U.S. Navy, U.S. Department of Veteran Affairs, U.S. Southern Command, The City of Santa Monica, The City of Jacksonville, Port of Houston Authority, Aman Resorts, BareBurger, Equinox, Graybar, HGTV, Lacoste, Marriott Hotels & Resorts, Mini Cooper, Oracle Team USA, Puma, Schneider Electric, Starbucks Coffee, Taco Bell, and globally.Youngwoo & Assoc. LLC.

Target Markets

SGB sells its SG Blocks^TM throughout North America. The building system is designed to meetmarket for new construction in North America in 2015 was $136 billion. The Modular Building Institute estimated that, in 2015, new permanent modular

•Restaurants/Quick Service Restaurants

With our previous experience, we believe that we have the opportunity of leveraging our advantages in cost and speed of construction to build revenue in the restaurant sector.

•Military

We have been able to capture a portion of military construction spending with both permanent build and mobile units. We will continue to expand our relationship with the military, as we believe SG BlocksTM present a practical logistics solution to a large number of military construction needs both in the U.S. and abroad.

•Education

We believe our product can distinguish ourselves fromcapture a portion of education construction due to our competitorsability to rapidly construct new educational buildings, including student housing, and expand existing educational buildings with minimal site disruption.

•Other markets for expansion

Below are additional sectors we believe have great growth potential for the SG BlocksTM product:

o Electrical and Systems Enclosures

o Office/Commercial

o Hospitality and Entertainment

o Warehouse/Public Storage

o Shopping/Retail Centers

o Athletic Facilities and Support Structures

o Reclamation/Drop Off Centers

o Medical

Our Competitive Strengths

The construction industry is highly competitive. However, SGB believes in the benefits of its technology and views the SG BlocksTM product as complementary to traditional construction methods and not necessarily as competition. There are applications in the construction industry which uniquely lend themselves to the use of SGB’s products, and SGB intends to compete vigorously in those areas.

SGB distinguishes itself on the basis of cost and construction time. OurThe use of SG BlocksTM as a construction methods aremethod is typically 10% to 20% less expensive than traditional construction methods, particularly in urban locations and multi-story projects.  Constructionprojects, and construction time is typically reduced by 30 – 40% using our construction method, reducing construction and soft costs substantially.  Our repurposed containers are designed to withstand harsh climate conditions and theiralso generally reduced. The flexibility of SG BlocksTM construction allows architects, developers, and owners to design the product to meet their needs.be more creative and efficient.

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1       http://www.modular.org/documents/Modular_Advantage/ModularAdvantage_Pub_3-Q_DIGITAL.pdf#282

In addition, SG Blocks Inc., we were known as CDSI Holdings, Inc. and PC411, Inc.  The Company was incorporated in Delaware on December 29, 1993.  On January 12, 1999, the Company’s stockholders voted to change our corporate name from PC411, Inc. to CDSI Holdings Inc. Following consummation of the merger of our wholly-owned subsidiary, CDSI Merger Sub, Inc., a Delaware corporation with and into SG Building (formerly SG Blocks, Inc.), a Delaware corporation, on November 4, 2011, the Company’s name was changed to SG Blocks, Inc.

Corporate Information

Our principal executive offices areoffice is located at 400 Madison Avenue, Suite 16C New York,195 Montague Street, Brooklyn, NY 10017,11201, and our telephone number is (646) 747-2423.  Our240-4235. We maintain a website atwww.sgblocks.com. We do not incorporate the information contained on, or accessible through, our website into this prospectus, and you should not consider it part of this prospectus.

We operate under our trademark “SGBlocks®,” which is www.sgblocks.comregistered under applicable intellectual property laws. This prospectus contains references to our trademarks and service marks and to those belonging to other entities. Solely for convenience, trademarks and trade names referred to in this prospectus may appear without the ® or TM symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensor to these trademarks and trade names. We do not intend our use or display of other companies’ trade names, trademarks, or service marks to imply a relationship with, or endorsement or sponsorship by us of or of us by, any such companies.

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RISK FACTORS

On December 31, 2016 and only operating business,2015, we had cash and cash equivalents of $955,136.$       and $497,000, respectively. However, overduring the nine monthsfiscal years ended September 30, 2011,December 31, 2016 and 2015, we hadreported a net loss of $1,136,551.  While$       and $2,743,116, respectively. If we currently believe that basedare not successful with our efforts to increase sales, we will experience a shortfall in cash over the next twelve months. If there is a shortfall, we may be forced to reduce operating expenses, among other steps, all of which would have a material adverse effect on our current operating plan, we will have sufficient capital to meet our anticipated need for working capital and capital expenditures through October 1, 2012, weoperations going forward.

We may needalso seek to obtain debt or additional equity financing prior to October 1, 2012, if our losses for the next year exceed our expectations or in the future.  It will also be difficult for us to makemeet any acquisitions unless we can raise additional capital.cash shortfalls. The type, timing, and terms of theany financing we may select will depend on, among other things, our cash needs, the availability of other financing sources, and prevailing conditions in the financial markets. However, there can be no assurance that we would be able to secure additional funds if needed and that, if such funds are available, whether the terms or conditions would be acceptable to us. Moreover, the terms of the secured convertible debentures issued to certain investors require that we obtain the consent of such investors prior to our entering into subsequent financing arrangements. If we are unable to secure additional financing, further reduction in operating expenses might need to be substantial in order for us to ensure enough liquidity to sustain our operations. Any equity financing would be dilutive to our stockholders. There canIf we incur additional debt, we will likely be no assurancesubject to restrictive covenants that anysignificantly limit our operating flexibility and require us to encumber our assets. If we fail to raise sufficient funds and continue to incur losses, our ability to fund our operations, take advantage of these sourcesstrategic opportunities, or otherwise respond to competitive pressures will be significantly limited. Any of the above limitations could force us to significantly curtail or cease our operations, and you could lose all of your investment in our common stock. These circumstances raise substantial doubt about our ability to continue as a going concern. Our consolidated financial statements do not include any adjustments that might be necessary should we be unable to continue as a going concern.

We have issued secured convertible debentures that may restrict our ability to obtain additional financing.

We issued two, two-year secured convertible debentures on June 30, 2016 and November 17, 2016 that are convertible into shares of our common stock to Hillair Capital Investments L.P. See “Our Emergence

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From Bankruptcy — Exit Financing” and “Certain Relationships and Related Transactions, and Director Independence — Transactions with Hillair Capital Investments L.P.” Under the terms of the secured debentures, we are restricted in our ability to issue additional shares of common stock as long as any portion of the principal or interest on the secured debentures remains outstanding. Specifically, we may not, without the prior consent of the holders of the secured debentures, sell or grant any option to purchase or sell any common stock (or equivalents thereof) entitling a person to acquire shares of common stock at an effective price per share that is lower than the conversion price for such debentures. We are also precluded under the terms of the secured debentures from, among other things, incurring additional indebtedness (other than permitted indebtedness) or granting any third party a security interest in our assets. Our inability, without the secured debenture holders’ consent, to provide a discount on our stock or to grant a security interest could make it difficult to find parties willing to make additional investments in us or to loan us money and therefore could adversely affect our ability to raise additional funds.

The issuance of shares of our common stock upon conversion of the secured convertible debentures may cause immediate and substantial dilution to our existing stockholders.

The issuance of shares of our common stock upon conversion of the secured convertible debentures may result in substantial dilution to the interests of other stockholders because the selling stockholders may ultimately convert and sell the full amount issuable on conversion. There is no upper limit on the number of shares that may be issued, and therefore HCI may convert the entire amount of their debentures at a ratio of one share for every $3.75 of debt. This will have the effect of further diluting the proportionate equity interest and voting power of holders of our common stock.

If we are required for any reason to repay our outstanding secured convertible debentures, we would be required to deplete our working capital, if available, or raise additional funds. Our failure to repay the secured convertible debentures, if required, could result in legal action against us, atwhich could require the sale of substantially all of our assets, currently pledged under a uniform commercial code filing in the state of Delaware.

Any event of default in our obligations to the holders of the secured convertible debentures, such as our failure to repay the principal when due, our failure to issue shares of common stock upon conversion by the holder, breach of any timecovenant, representation, or that they willwarranty in the securities purchase agreements for such secured convertible debentures or in the secured convertible debentures, or the commencement of a bankruptcy, insolvency, reorganization, or liquidation proceeding against us, could require the early repayment of the secured convertible debentures. If we are required to repay the secured convertible debentures, we would be availablerequired to use our limited working capital and raise additional funds. If we were unable to repay the secured debentures when required, the debenture holders could commence legal action against us and foreclose on satisfactory terms.

Our ability to achieve profitability will depend upon our ability to generate and sustain substantially increased revenues. We may incur operating losses in the future as we execute our growth strategy. We intend to make significant expenditures related to marketing, expansion of our website, hiring of additional personnel, and development of our technology and infrastructure. Although SG Building generated revenue from continuing operations during the fiscal year ended December 31, 2010 and the nine months ended September 30, 2011, it has incurred net losses of $1,247,644 and $1,136,551, respectively, during such periods.  For the fiscal year ended December 31, 2010 and the nine months ended September 30, 2011, we (prior to giving effect to the Merger) incurred net losses of $35,204 and $118,386, respectively, during such periods.  The likelihood that we will generate net income in the future must be considered in light of the difficulties facing the construction and construction management industriesindustry as a whole, economic conditions, and the competitive environment in which we operate and the other risks and uncertainties discussed in this prospectus.operate. Our operating results for future periods are subject to numerous uncertainties, and itwe may not achieve sufficient revenues to sustain or increase profitability on a quarterlyprofitability.

The exercise or annual basis.

Our success depends highly upon the personal efforts and abilities of our senior management team, specifically the efforts of Paul Galvin, the Company’sour Chief Executive Officer and Director, andOfficer; Mahesh Shetty, our Chief Financial Officer; Stevan Armstrong, the Company’sour President and Chief Operating OfficerOfficer; and Director.David Cross, our Vice President of Business Development. The employment agreements with Messrs. Galvin and Armstrong have expired, and the Company is currently negotiating a new agreement with Messrs. Galvin, Armstrong, Cross and Shetty. Although there is a general agreement on the terms of the new agreements, there can be no assurance that SGB will be able to enter into new agreements with Messrs. Galvin, Armstrong, Cross, and Shetty on favorable terms. The loss of the services of one or more of these individuals could have a material adverse effect on our business. Our ability to achieve profitability and generate increased revenue will depend upon our ability to retain and, attract if necessary, attract experienced management personnel.

We have relationships with key materials vendors, and we rely on suppliers for our purchases of products from them. Any inability to obtain materials or services in the volumes required and at competitive prices from our major trading partners, the loss of any major trading partner, or the discontinuation of vendor financing (if any) may seriously harm our business because we may not be able to meet the demands of our customers on a timely basis in sufficient quantities or at all. Other factors, including reduced access to credit by our vendors resulting from economic conditions, may impair our vendors’ ability to provide products in a timely manner or at competitive prices. We also rely on other vendors for critical services such as transportation, supply chain, and professional services. Any negative impacts to our business or liquidity could adversely impact our ability to establish or maintain these relationships.

We rely on subcontractors to perform the actual construction of our building projects and, in many cases, to select and obtain raw materials. Despite our detailed specifications and quality control procedures, in some cases, improper construction processes or defective materials may be used to finish construction of our building projects. We may need to spend money to remediate such problems when they are discovered. Defective products widely used by the construction industry can result in the need to perform extensive repairs to large numbers of buildings. Though subcontracts are written to protect us from substandard performance or materials, pervasive problems could adversely affect our business. The cost to us in complying with itsour warranty obligations in these cases may be significant if it iswe are unable to recover the cost of repair from subcontractors, materials suppliers, and insurers. Further, the timing and quality of our construction depends on the availability and skill of subcontractors. Although we believe that our relationships with our suppliers and subcontractors are good, there can be no assurance that skilled subcontractors will continue to be available at reasonable rates and in the areas in which we conductsconduct our operations. The inability to contract with skilled subcontractors or general contractors at reasonable costs

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and on a timely basis could limit our ability to buildconstruct and deliver buildings and could erode our profit margins and adversely affect our results of operations and cash flows.

The Company uses a proprietary manufacturing process which allows us to be code-compliance in our SG BlocksTM product. Such manufacturing process is unique to the construction industry and proprietary technology areis important to theensure SGB’s continued success, ofand we cannot assure you that our business.  We rely primarily on trade secretsefforts to protect our intellectual propertyproprietary rights will be sufficient or effective. If other companies replicate our methodology, SGB could lose its competitive advantage. In addition, we currently have one patent application pending for the system and proprietary technology.  While we intendmethod for conversion of intermodal shipping containers to makeuniversal building modules. Any pending or future patent or trademark applications may not lead to issued patents and registered trademarks in all instances. The Company also cannot be assured that the appropriate filingsscope of any patents issued in the future will be sufficiently broad to offer meaningful protection. Others may develop or patent similar or superior technologies, products, or services, and protect our intellectual property and proprietary technology, there canrights may be no assurance thatchallenged, invalidated, misappropriated, or infringed by others. If we will be able to so.  In addition, it is difficultare unable to protect against or monitor all possible misappropriations and unauthorized access tomaintain our intellectual property and technology.  To date, we have ordered prior art on five potentialrights, or if there are any successful intellectual property claims.  Significant challenges in protecting our intellectual property and technology are posed by (a) funding limitations and (b) our rapidly evolving adaptation to new product/market/technology challenges.  Dissemination or dilution of the aforementioned intellectual property and technology could have an adverse effect oninfringement proceedings against us, our business financial condition, resultsand revenue could be materially and adversely affected.

Expansion of operations and liquidity.

Increased orders for our product, SG BlocksTM, have placed, and may continue to place, a strain on our operational, financial, and managerial resources and personnel. Any failure to manage growth effectively could have a material adverse effect on our business, operating results, financial condition and liquidity.

We are subject to construction defect and warranty claims arising in the ordinary course of its business. These claims are common in the construction management industry and can be costly. At this time, the third partyour third-party providers offer guarantees and warranties in accordance with industry standards that flow through to our clients. Although we maintain reserves for such claims, which to date have been adequate, there can be no assurance that warranty expense levels will remain at current levels or that such reserves will continue to be adequate.  A large number of warranty claims exceeding our current warranty expense levels could have a material adverse effect on our results of operations.

Although we expect all of our associates (i.e., employees), officers, and directors to comply at all times with all applicable laws, rules, and regulations, there are instances in which subcontractors or others through whom we do business may engage in practices that do not comply with applicable regulations or guidelines. It is possible that our associates may become aware of these practices, but do not take steps to prevent them. If we learn of practices relating to buildings it constructsconstructed on our behalf that do not comply with applicable regulations or guidelines, we will move actively to stop the non-complying practices as soon as possible, and we will take disciplinary action with regard to our associates who were aware of the practices, including, in some instances, terminating their employment. However, regardless of the steps we take, we may be subject to fines or other governmental penalties, and our reputation may be injured.

The construction and construction management industries areindustry is highly cyclical and seasonal and is influenced by many international, national, and regional economic factors, including the availability of consumer and wholesale financing, seasonality

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of demand, consumer confidence, interest rates, income levels, and general economic conditions, including inflation and recessions. As a result of the foregoing factors, our revenues and operating results fluctuate, and we currently expect them to continue to fluctuate in the future. Moreover, we have and may continue to experience operating losses during cyclical downturns in the construction market. These and construction management market.

Our business and earnings depend substantially on our client’sclients’ ability to obtain financing for the development of their construction projects. The availability and cost of such financing is further dependent on the number of financial institutions participating in the industry, the departure of financial institutions from the industry, the financial institutions’ lending practices, the strength of the domestic and international credit markets generally, governmental policies, and other conditions, all of which are beyond our control. In light of the current economic climate, some of our projects may not be successful in obtaining additional funds in a timely manner, on favorable terms, or at all. The availability of borrowed funds, especially for construction financing, has been greatly reduced, and lenders may require project developers to invest increased amounts of equity in a project in connection with both new loans and the extension of existing loans. Unfavorable changes in the availability and terms of financing in the industry will have a material adverse effect on certain privately financed projects.

Our results of operations also depend on the ability of ourany potential privately financed customers to obtain loans for the purchase of new buildings. Over the past few years, lenders have tightened the credit underwriting standards, which have reduced lending volumes. If this trend continues, it would negatively impact our sales.  Our sales, which depend in large part on the availability and cost of financing. In addition, where our potential customers must sell their existing buildings or real estate in order to develop the new buildings, increases in mortgage costs and/or lack of availability of mortgages could prevent buyers of potential customers’ existing buildings from obtaining the mortgages they need to complete their purchases, which would result in our potential customers’ inability to make purchases from us. If our potential buyerscustomers cannot obtain suitable financing, our sales and results of operations would be adversely affected.

We operate in a very competitive environment which is characterized by competition from numerous local, regional, and national builders and others in the real estate development business around the world.builders. We may compete for financing, raw materials, and skilled management and labor

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resources. We also compete with the rental market, as well as with the resale, or “previously owned,” building market, which has increased significantly due to the large number of foreclosures due to the current economic downturn.  An oversupply of buildings available for sale and the heavy discounting of building prices by some of our competitorsA decline in construction starts could adversely affect demand for our buildings and our results of operations. Increased competition could require us to further increase our selling incentives and/or reduce our prices, which could negatively affect our profits.

Various domestic and international rules and regulations concerning building, zoning, sales, and similar matters apply to and/or affect the construction and construction management industries.industry. Governmental regulation affects construction activities as well as sales activities, mortgage lending activities, and other dealings with consumers. These industries also have experienced an increase in domesticU.S. state and local legislation and regulations that limit the availability or use of land. Municipalities may also restrict or place moratoriums on the availability of utilities, such as water and sewer taps. In some areas, municipalities may enact growth control initiatives, which will restrict the number of building permits available in a given year. In addition, we may be required to apply for additional approvals or modify our existing approvals because of changes in local circumstances or applicable law. If governments in locations in which we operate take actions like these, itthe ones described, they could have an adverse effect onadversely affect our business by causing delays, increasing our costs, or limiting our ability to operate in those areas. Further, we may experience delays and increased expenses as a result of legal challenges to our proposed projects, whether brought by governmental authorities or private parties. Failure to comply with laws or regulations applicable to or affecting us, or the passage in the future of new and more stringent laws affecting us, may adversely affect our financial condition or results of operations.

While we believe our insurance coverage is adequate and in line with our industry’s standards, all construction, including modular construction, involves operating hazards that can cause construction delays.  In addition,personal injury or loss of life, severe damage to the extentand destruction of property and equipment, and suspension of operations. The failure of such structures during and after installation can result in similar injuries and damages. Although we believe that our subcontractors incur increased costs associated with higher insurance premiums and compliance with regulations, these costs maycoverage is adequate, there can be passed on to us.  We are generally unable to pass on any unexpected increases in construction costs to those customers who have already entered into sales contracts, as those contracts generally fix the price of the building at the time the contract is signed.  Pricing competition, oversupply of new and existing buildings and tightening mortgage qualifications, among other factors may restrict our ability to pass on any additional costs, and may negatively impact its profit margins.

After this offering, the market price offor our common stock is likely to be highly volatile, and couldin part because our shares are not currently traded publicly. In addition, the market price of our common stock may fluctuate widely in price in response to various factors, many of which are beyond our control, including the following:

•     economic and market conditions or trends in our industry or the economy as a whole and, in particular, in the construction industry;

•     additions or departures of key personnel;

•     sales of our common stock;

•     operating results that fall below expectations;

•     industry developments;

•     new laws or regulations or new interpretations of existing laws or regulations applicable to our business;

•     material litigation or government disputes;

•     the public’s response to press releases or other public announcements by us or third parties, including our filings with the SEC;

•     changes in financial estimates or recommendations by any securities analysts who follow our common stock;

•     future sales of our common stock by our officers, directors, and significant stockholders; and

•     period-to-period fluctuations in our financial results.

In addition, the securities markets have, from time to time, experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of our common stock.

The market price of our prospects in lightcommon stock could decline significantly as a result of the risks, expenses and difficulties we face as an early stage company withsales of a limited operating history, new organizational structure and operating in a highly regulated and competitive industry.

Upon consummation of this offering, we will have       shares of common stock outstanding. The shares of common stock offered in this offering will be freely tradable without restriction under the Securities Act of 1933, as amended (the “Securities Act”), except for any shares of common stock that may be held or appropriate.

Executive Compensation - Stock Options" and "Description of Capital Stock".

Our Board, without any action by our stockholders, is authorized to designate and issue additional classes or series of capital stock (including classes or series of preferred stock) as it deems appropriate and to establish the rights, preferences, and privileges of such classes or series. The issuance of any new class or series of capital stock would not only dilute the ownership interest of our current stockholders, but may also adversely affect the voting power and other rights of holders of common stock. The rights of holders of preferred stock and other classes of common stock that may be issued may be superior to the rights of the holders of the existing class of common stock in terms of the payment of ordinary and liquidating dividends and voting rights.

Description of Securities - Anti-Takeover Effects of Delaware LawFailure to establish and Our Certificate of Incorporation and By-Laws” for a more detailed descriptionmaintain effective internal controls in accordance with Section 404 of the Company’s securitiesSarbanes-Oxley Act of 2002 could have a material adverse effect on our business and stock price.

Rules adopted by the anti-takeover effectU.S. Securities and Exchange Commission (the “SEC”) pursuant to Section 404 of Delaware lawthe Sarbanes-Oxley Act (“Section 404”) require an annual assessment of internal control over financial reporting and, for certain provisions inissuers (but not us), an attestation of this assessment by the Company’s Certificateissuer’s independent registered public accounting firm. During the course of Incorporation.

If we are unable to conclude that we have effective internal control over financial reporting, for combined operations as the Company integrates the business of SG Building it acquired as a result of the Merger, and perhaps other acquired businesses in the future.  In addition, differences in existing controls of acquired businesses may result in weaknesses that require remediation when internal controls over financial reporting are combined.

For the foreseeable future, we intend to retain any earnings to finance the development and expansion of our business, and we do not anticipate paying any cash dividends on our common stock. Any determination to pay dividends in the future will be at the discretion of our Board of Directors and will depend upon results of operations, financial condition, restrictions imposed by applicable law, and other factors our Board of Directors deems relevant. In addition, the 2016 OID Debentures (defined herein) require that HCI be entitled to participate in any dividend or other distribution during the time such debentures remain outstanding, as long as HCI would be deemed to be a holder of common shares on an as-converted basis on the record date for such dividend or distribution. Accordingly, if you purchase shares in this offering, realization of a gain on your investment will depend on the appreciation of the price of our common stock, which may never paid nor do we expectoccur. Investors seeking cash dividends in the foreseeable future to pay any dividends.

If you purchase shares of common stock sold in this offering, you will incur immediate and substantial dilution.

If you purchase shares of common stock in this offering, you will incur immediate and substantial dilution in the amount of $       per share because the public offering price of $       is substantially higher than the pro forma net tangible book value per share of our outstanding common stock. This dilution is due in large part to the fact that our earlier investors paid substantially less than the public offering price when they purchased their shares. In addition, you may also experience additional dilution upon future equity issuances or the exercise of stock options to purchase common stock granted to our directors, management personnel and consultants under our Incentive Plan. See “Dilution.”

Certain provisions of Delaware law could discourage, delay, or prevent a merger or acquisition at a premium price.

Certain provisions of Delaware law could discourage potential acquisition proposals, delay or prevent a change in control of our company, or limit the price that investors may be willing to pay in the future for shares of our common stock. Because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which prohibits a person who owns in excess of 15% of our outstanding voting stock from merging or combining with us for a period of three years after the date of the transaction in which the person acquired in excess of 15% of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner. Such provisions may discourage,

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delay, or prevent a merger or acquisition of the Company, including a transaction in which the acquirer may offer a premium price for our common stock.

We have broad discretion in the use of the net proceeds from this offering and may not use them effectively.

Our management will have broad discretion in the application of the net proceeds from this offering and could spend the proceeds in ways that do not enhance the value of our common stock. The failure by our management to apply these funds effectively could delay the development of our product candidates, have a material adverse effect on our business, or cause the price of our common stock to decline. Pending their use, we may invest the net proceeds from this offering in a manner that does not produce income or that loses value. See “Use of Proceeds.”

We intend to apply for listing of our common stock on the Nasdaq Capital Market. If approved for listing, we will be required to meet the Nasdaq Capital Market’s continued listing requirements and other Nasdaq rules, or we may risk delisting. Delisting could negatively affect the price of our common stock, which could make it more difficult for us to sell securities in a future financing or for you to sell your common stock.

If we are approved for the listing of our common stock on the Nasdaq Capital Market, we will be required to meet the continued listing requirements of the Nasdaq Capital Market and other Nasdaq rules, including those regarding director independence and independent committee requirements, minimum stockholders’ equity, minimum share price, and certain other corporate governance requirements. In particular, we are required to maintain a minimum bid price for our listed common stock of $1.00 per share. If we do not meet these continued listing requirements, our common stock could be delisted. Delisting from the Nasdaq Capital Market would cause us to pursue eligibility for trading of these securities on other markets or exchanges, or on an over-the-counter market (“OTC market”). In such case, our stockholders’ ability to trade or obtain quotations of the market value of our common stock would be severely limited because of lower trading volumes and transaction delays. These factors could contribute to lower prices and larger spreads in the bid and ask prices of these securities. There can be no assurance that the offered securities, if delisted from the Nasdaq Capital Market in the future, would be listed on a national securities exchange, a national quotation service, or the OTC markets. Delisting from the Nasdaq Capital Market, or even the issuance of a notice of potential delisting, would also result in negative publicity, make it more difficult for us to raise additional capital, adversely affect the market liquidity of the offered securities, decrease securities analysts’ coverage of us, or diminish investor, supplier, and employee confidence.

If our shares become subject to the penny stock rules, it would become more difficult to trade our shares.

The SEC has beenadopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or authorized for quotation on certain automated quotation systems, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. If we do not retain a listing on the Nasdaq Capital Market and if the price of our shares of common stock is less than $5.00, our common stock will be deemed a penny stock (meaning that our shares may be considered highly speculative and may trade infrequently, which can make them difficult to accurately price or sell). The penny stock rules require a broker-dealer, before a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document containing specified information. In addition, the penny stock rules require that, before effecting any transaction in a penny stock not otherwise exempt from those rules, a broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive: (i) the purchaser’s written acknowledgment of the receipt of a risk disclosure statement; (ii) a written agreement to transactions involving penny stocks; and (iii) a signed and dated copy of a written suitability statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our common stock, and therefore stockholders may have difficulty selling their shares.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements made in this prospectus are “forward-looking statements” regarding the plans and objectives of management for future operations. Such statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties. Our plans and objectives are based, in part, on assumptions involving judgments with respect to, among other things, future economic, competitive, and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Although we believe that our assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance that the forward-looking statements included in this prospectus will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, particularly in view of our limited operations, the inclusion of such information should not be regarded as a representation by us or any other person that our objectives and plans will be achieved. Readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date on which such statements are made. Factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements include, but are not limited to, the factors set forth in this prospectus under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” We do not undertake to update any forward-looking statement that may be made from time to time on our behalf.

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USE OF PROCEEDS

Assuming a public offering price of $_____ per share (the midpoint of the estimated price range set forth on the cover page of this prospectus), we estimate that we will receive net proceeds from this offering of approximately $_____ million after deducting the underwriting discount and estimated offering expenses payable by us.

A $1.00 increase (decrease) in the assumed public offering price of $______ per share would increase (decrease) the net proceeds to us from this offering by approximately $______ million, assuming the number of shares offered, as set forth on the cover page of this prospectus, remains the same, and after deducting the underwriting discount and estimated offering expenses payable by us.

We intend to use the net proceeds from this offering for general corporate purposes, including working capital and capital expenditures, such as manufacturing integration and product expansion into new markets.

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DIVIDEND POLICY

We have never declared or paid regular cash dividends on our common stock. We currently expect to retain all future earnings for use in the operation and expansion of our business and do not anticipate paying cash dividends in the foreseeable future. The declaration and payment of any dividends in the future will be determined by our Board of Directors, in its discretion, and will depend on a number of factors, including our earnings, capital requirements, overall financial condition, and contractual restrictions.

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MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Our Former Common Stock was quoted on the OTC Bulletin Board since 1999, but no longer trades, as such stock no longer exists. Our New Common Stock has not been listed on any exchange and does not trade.

Stockholders

As of January 31, 2017, there were 163,786 shares of common stock outstanding, held by 110 holders of record.

Equity Compensation Plan Information

As of December 31, 2016, the following equity compensation options were outstanding:

On November 1, 2016, the Board entered into a Non-Qualified Stock Option Agreement with Messrs. Galvin, Armstrong, and Shetty, pursuant to which they were each granted an option to purchase 98,273, 43,677, and 21,839 shares of common stock, respectively. The non-qualified stock options have an exercise price per share of $3.00. For the vesting schedules with respect to these option grants, see “Executive Compensation — Outstanding Equity Awards at Fiscal Year End.”

On November 1, 2016, the Board also entered into an Incentive Stock Option Agreement with each of the directors of SGB who also serves as an executive officer, pursuant to which both Messrs. Galvin and Shetty were granted options to purchase 13,334 shares of common stock. The incentive stock options have an exercise price per share of $3.00. The incentive stock options vest and become exercisable in equal quarterly installments of 3,334 shares on the last day of each fiscal quarter following the date of grant until such options are 100% vested.

On November 1, 2016, the Board entered into Non-Qualified Stock Option Agreements with David Cross and Kevin King to purchase 43,677 and 10,920 shares of common stock, respectively. The non-qualified stock options have an exercise price per share of $3.00. With respect to Mr. Cross’s non-qualified stock option, 21,839 common shares vested on the Effective Date of SGB’s bankruptcy plan of reorganization (the “Plan”) and the remaining 21,838 options will vest and become exercisable in two equal annual installments of 10,919 options on the first and second anniversaries of the grant date. With respect to Mr. King’s non-qualified stock option, all shares granted under the option vested on the Effective Date of SGB’s Plan.

On November 1, 2016, SGB also granted each of Sean McAvoy, Neal Kaufman, and Christopher Melton options to purchase 16,667 shares of common stock in connection with their service on the Board of Directors. The non-qualified stock options have an exercise price per share of $3.00. Messrs. Kaufman and McAvoy subsequently assigned 33,334 of such options to HCI in December 2016. Each of these options vests and becomes exercisable in equal quarterly installments of 4,167 shares on the last day of each fiscal quarter following the grant date.

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SGB Stock Incentive Plan

Effective as of October 26, 2016, our Board of Directors adopted the SG Blocks, Inc. Stock Option Plan (subject to stockholder approval to authorize the issuance of “incentive stock options” thereunder). Effective January 30, 2017, the SG Blocks, Inc. Stock Option Plan was amended and restated as the SG Blocks, Inc. Stock Incentive Plan, and the Incentive Plan was approved by our stockholders on January 31, 2017. The Incentive Plan will become effective on the date that is twenty calendar days after the date the Information Statement on Schedule 14C is furnished to the Company’s stockholders. The following summary describes the material terms of the Incentive Plan. This summary is not a complete description of all provisions of the Incentive Plan and is currently quoted underqualified in its entirety by reference to the symbol “SGBX”.  Prior to November 9, 2011, our common stock was quoted under the symbol “CDSI.”  There is a limited trading market in our shares and a stockholder could likely find it difficult to sell or to obtain quotations as to prices of our common stock.  During 2010, the average daily trading volume of our common stock was approximately 1,209 shares, with 207 days of 252 trading days having no trading activity.  Between consummationtext of the Merger on November 4, 2011, and December 1, 2011,Incentive Plan, which is attached as Exhibit 10.10 to this Registration Statement.

Types of Awards

The Incentive Plan authorizes the average daily trading volumeissuance of our commonawards in the form of stock was approximately 5,852 shares, with 7 days of 17 trading days having no trading activity.

The Incentive Plan provides for awards to our non-employee directors and to officers, employees, and consultants of the Company or its management, are intendedand our subsidiaries, except that incentive stock options may only be granted to identify forward-looking statements.  Such forward-looking statements include, in particular, projections about our future results, statements about our plans, strategies, business prospects, changesemployees and trends in our business and the markets in which we operate.  Additionally, statements concerning future matters such as trends, sales levels, expense levels, and other statements regarding matters that are not historical are forward-looking statements.  Management cautions that these forward-looking statements relate to future events or our future financial performance and are subject to business, economic, and other risks and uncertainties, both known and unknown, that may cause actual results, levels of activity, performance, or achievementsemployees of our business or our industry to be materially different from those expressed or implied by any forward-looking statements.  Factors that could cause or contribute to such differences in results and outcomes include, but are not limited to, those discussed under the section entitled “Risk Factors” in this prospectus.  Readers should carefully review this information as well as other risks and uncertainties described in other filings we make with the SEC.  We do not undertake any obligation to publicly update these forward-looking statements.  As a result, you should not place undue reliance on these forward-looking statements.

SAR will be evidenced by selling stockholders hereunder.

Except as the Compensation Committee otherwise determines, awards granted under the Incentive Plan will not be transferable by a participant other than by will or the laws of descent and distribution. Except as otherwise determined by the Compensation Committee, stock options and SARs will be available for useexercisable during a participant’s lifetime only by him or her or, in the Company.  We intend to use any proceeds received from the exerciseevent of the Warrants for working capital and general corporate purposes.

•        an as adjusted basis to give effect to the periods indicated, the reported high and low closing bid quotations per share for our common stock.  The sale prices set forth below reflect inter-dealer quotations, do not include retail mark-ups, markdowns or commissions and do not necessarily represent actual transactions. 

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On July 27, 2011,DILUTION

If you invest in connection with the Merger, we obtained the written consent of holders of a majority of our outstanding common stock approving the 2011 Incentive Stock Plan.  The 2011 Plan covers up to 8,000,000 shares of common stock, and is designed to enable us to offer our employees, officers, directors, consultants and advisors whose services are considered valuable an opportunity to acquire an interest in the Company, to encourage a sense of proprietorship in the Company and to stimulate the active interest of such persons in the development and financial success of the Company and its subsidiaries.  In addition to the options granted to our Directors and Executive Officers, described in the section entitled “Executive Compensation - 2011 Option Grants” on page 39, the Company has also granted 1,010,000 options to consultants (not including Mr. Wasserman).  Without considering the effect of the Galvin Option, as of December 1, 2011, there were 2,602,500 shares of common stock remaining available for future issuance under the 2011 Plan.

On October 15, 2015, SGB and leasingits subsidiaries voluntarily filed for reorganization under Chapter 11 of the inventory control system.  In November 2003,Bankruptcy Code. On February 29, 2016, SGB filed a disclosure statement and the CompanyPlan, along with a motion seeking approval of the disclosure statement by the U.S. Bankruptcy Court for the Southern District of New York. On May 23, 2016, the Bankruptcy Court entered an order confirming the Plan. On the Effective Date, June 30, 2016, the Plan became effective and CDS (a wholly-owned subsidiary) merged, with the Company as the surviving corporation.  Immediately PriorSGB emerged from bankruptcy. Pursuant to the merger between the Company’s wholly-owned subsidiary, CDSI Merger Sub, Inc. and SG Building (described below under the heading “SG Blocks Merger”) the Company was a shell company, as defined in Rule 12b-2terms of the Exchange Act, seeking acquisitionPlan, all of SGB’s pre-petition debt was converted into preferred stock of SGB, all of SGB’s pre-petition trade creditors were paid in full, and investment opportunities.

Exit Financing

On October 25, 2010, SG Blocks, LLC (“SG LLC”), a Missouri limited liability company, merged withthe Effective Date, and into SG Building, which then continued the business of SG LLC. SG LLC was formed on January 23, 2007 and SG Building (formerly SG Blocks, Inc.) was formed in Delaware on August 16, 2010.  SG Building was not engaged in any business priorpursuant to the merger with SG LLC in 2010.

Prior to the Effective Date of the Company.  The MergerCompany’s Plan, the Company was a reverse merger that will be accounted for as a recapitalization of SG Building, and accordingly SG Building is deemedauthorized to be the accounting acquirer.

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DESCRIPTION OF BUSINESS

SGB is in the Merger as a result of it holding warrants to purchase shares of SG Building common stock prior to the Merger).

Rather than consumingusing new steel and lumber, SG BuildingSGB capitalizes on the structural engineering and design parameters a shipping container must meet and repurposes them for use in building. Offering a product that typically exceeds building code requirements, SG Building seeks to enableSGB enables developers, architects, builders, and owners to achieve greenermore efficient construction, faster execution, and stronger buildings of higher value.value and extended life. Since its inception, in 2007, SG BuildingSGB has developed and implemented the technology to break away from standardized container-construction while maintainingprovide an alternative to traditional site-based construction at reduced costs. Committedcost and is committed to providing a construction methodology that will lessen the global carbon footprint, SG Buildingfootprint.

SGB does not simply recycle old shipping containers (which requires additional energy consumption to break down material and then reform it for another purposes) — it utilizes existing steel materialshipping container structures and repurposes itthem into modules that can be put to a higher and better use with significantly less energy input. In additionEach container is a building block module that can be arranged in virtually any stacking configuration to providing code engineered cargo shipping containers for construction use,create the spaces and volumes needed. Architectural creativity combined with engineering expertise is used in stacking and arranging the blocks, which can be interconnected and modified to suit specific building space requirements. The SG Building also continues to advance a patent pending structural steel framingBlocksTM system affords architects, owners, and the use thereof.

SGB first selects shipping containers appropriate for thea given project, often that have reached the end of their useful life.which are then redesigned to customer specifications. These durable steel containers are then designed, proprietarily engineered andmodified or manufactured into a modified structure that is referred to in this “Description of Business” section as “SGSG BlocksTM”. A combination of engineering and architecture areis used to make the containers adaptable for a wide variety of uses including housing, office buildings, barracks, hotels, schools, dormitories, hospitals, clinicscommercial and institutional facilities.

SGB’s products have been featured in reports by a vast majorityseveral leading media outlets, including Fortune, NY Times, NY Post, USA Today, CNN, Washington Post, ABC World News, NBC Nightly News, and Bob Vila. SGB has completed projects for: the U.S. Army, U.S. Navy, U.S. Department of governmental jurisdictions in the United States.

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Environmentally Responsible Building to manage the logistical task of coordinating the efforts of its strategic partners. These alliances help SG Building maintain a steady supply of containers available around the world. SG Building is actively exploring international opportunities, including in Brazil where it has formed a subsidiary.

Environmentally friendly building is the practice of designing, constructing, operating, maintaining, and removing buildings in ways that conserve natural resources and reduce their impact on climate change.the environment. Builders are increasingly incorporating “green” components in all projects as they adopt the LEEDLeadership in Energy and Environmental Design (“LEED”) system, a third-party certification program and the nationally accepted benchmark for the design, construction, and operation of high performance green buildings. We believe the SG Building’s structuralBlocksTM system contributes significantly towards LEED certification for completed projects by using a repurposed product and helpthrough geographic proximity to the construction site and helping minimize the wasteful practices of traditional construction methods.

The robust structure of the construction industry with the advancement of new technology. Of great importance to the technology is the recycling of standard shipping containers. Intermodal containers generally come in either 40 foot or 20 foot long units that are either 8’6” (standard cube) or 9’6” (high cube).

SGB starts by selecting containers that are approved by the CSC. All CSC approved containers bear a CSC approval plate that is used to track their movement in trade. The ProcessCSC approval plate is also used to verify that the container has been tested and is considered to be able to withstand all of the lateral forces and pressures it could potentially experience while in use. The presence of the CSC plate confirms that the containers were built in compliance with rigorous international standards. Prior to being used as an SG Building Conversion

SGB then provides specific and detailed engineering and fabrication details to qualified contractors and modifiessubcontractors who proceed to modify the containers in various configurations, which often requirerequires structural changes, wall reconfigurations, the creation of window and door openings, and ceiling alterations to allow sheetrock hanging. The exterior walls and roof structure are then insulated with a high techhigh-tech waterproof ceramic insulation. TheNext, the SG BlocksTM are theneither shipped directly to the building site or are run through a modular factory and then delivered to the site. The builder, generally under contract with SGB, places themthe SG BlocksTM into position on their foundation and connects them together by welding. The builder may then add roof trusses or other roof systems, and quickly the builder hascreating an insulated structure under roof. The potential for savings in building time can be significant, particularly if interior pre-finish modularization is introduced at this step.

Our Industry

The building industry has a reputation for resistance to change. By and large, the industry still erects structures using materials such as concrete, lumber, and steel as they have for centuries. The deployment of Shipping Containersthose materials also takes readily recognizable forms. Concrete may be pre-cast or poured in Construction

Off-site construction — prefabricated or modular building structures since their introduction— is working through its growing pains. Factory-built housing has been around for some time, but adapting the concept to high-rise projects is a newer process. Quality control and the ability to scale up modular construction remain issues, but in the 1950s,past two years alone, modular building has made large strides towards adapting its concept to high-rise projects.

The Modular Building Institute estimated that in 2015, $3.71 billion in new permanent modular building was put in place. The total value of new construction in North America in 2015 was $136 billion, giving modular building a market share of 2.72%.²

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²       http://www.modular.org/documents/Modular_Advantage/ModularAdvantage_Pub_3-Q_DIGITAL.pdf#28

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Fabricating whole segments of buildings in a facility and shipping the completed units to the site provides both cost and speed advantages. According to a recent case study comparing modular construction and traditional construction, modular building reduced the overall construction time by an average of 45% and showed average cost savings of 16%.³ Weather is also less of a factor in our modular construction process.

Other benefits to modular construction include more efficient workplace supervision and better training. The controlled construction environment and assembly line techniques remove many of the problems encountered during traditional construction, such applicationsas theft, vandalism, damage to building products and materials, and unskilled labor. Factory employees are trained and managed more effectively and efficiently than on-site contract labor, resulting in better quality and better project management with the trades. This is especially significant because of the country-wide decline in the number of skilled laborers.

Finally, our methods also benefit the greater community by reducing congestion, noise, and dust at the site — a not-insignificant advantage for project sponsors.

Target Markets

SGB sells into a multi-billion dollar market for new construction in North America. SGB believes that SG BlocksTM have been limited. Typically, shipping containers have been re-used to provide temporary shelter or storage. However, the ideaa particular application in a number of fabricating containers in large quantities for the building sector market is a relatively novel idea.

•Multi-Family Housing

We believe the use of shipping containersSG BlocksTM can be an attractive option in the market for construction purposes. Very few, however,of multi-family housing units, as total construction spending on private multi-family residential units has increased in recent years.

•Restaurants/Quick Service Restaurants

With our previous experience, we believe that we have actually designedthe opportunity of leveraging our advantages in cost and built structuresspeed of construction to meet building code requirements. In contrast, SG Building has already completed projects forbuild revenue in the US Military, municipalitiesrestaurant sector, a multi-billion market with a high concentration of fast-food and Fortune 500 companies. Asfast-casual restaurants.

•Military

We have been able to capture a result,portion of military construction spending with both permanent build and mobile units. We will continue to expand our relationship with the military, as we believe SG Building is positioned asBlocksTM present a practical logistics solution to a large number of military construction needs both in the leaderU.S. and abroad.

•Education/Student Housing

Public education construction spending has been on the rise. For instance, colleges and universities are seeking quick and affordable student housing options in this new technology industry.

•Other markets for expansion

Below are additional sectors we believe have great growth potential for the SG Building has already begun to position its concept into the vocabulary of the architectureBlocksTM product:

o Electrical and building industries.

o Office/Commercial

o Hospitality & Entertainment

o Warehouse/Public Storage

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³       http://greenzone.bdcnetwork.com/2015/pdf/PMC_Process-Practice-Perf_Report.pdf

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o Shopping/Retail Centers

o Athletic Facilities and Support Structures

o Reclamation/Drop Off Centers

o Medical

Our Competitive Strengths

The construction industry is highly competitive. SG BuildingSGB competes against numerous local, regional, national, and international builders and others in the real estate business around the world. Going forward, SG BuildingSGB is committed to further educating the building community on the benefits of its technology and positioning SG BlocksTM as complementary to illustrate SG Building is more of a complement totheir strategy, rather than competition for builders. SG Buildingas competition. SGB may compete for investmentbuilding opportunities financing, available land, raw materials and skilled labor with entities that possess greater financial, marketing and other resources than it does. Competition may increase if there is future consolidation in the land development and construction industry or from new building technologies that could arise. Additionally, many of those working with containers focus on the architecture and design element. As they are not fabricators, SG Building can provide the final product.

We believe SG BuildingSGB can distinguish itself from its competitors on the basis of quality, cost, and construction time. SG Building’sSGB’s buildings are constructed through the connection of heavy gauge steel shipping containers that exceed traditional construction quality. SGB’s construction method is typically 10% to 20% less expensive than traditional construction methods, particularly in urban locations and multi-story projects. Construction time is typicallyalso generally reduced by 30 – 40% using SG Building’sSGB’s construction method, reducing both construction and soft costs substantially. The SG BlocksTM are designed to be hurricane, tornadohurricane-, tornado-, and blast resistant,earthquake-resistant, and able to withstand harsh climate conditions and theirconditions. Their flexibility of construction allows architects, developers, and owners to design the productSG BlocksTM to meet their needs.

SGB is the principal complianceonly nationwide provider of container-based modular construction products, and approval requirement for SG Building.

SGB has spent immaterial amounts on research and development during the date of grant.

Employees

SGB directly employs six employees and maintains a network of office space in Brazil pursuant toarchitects and engineers on an unwritten agreement that is terminableon-demand basis.

Description of Property

SGB leases its executive offices at any time, and use of storage and processing space at certain ConGlobal facilities pursuant to the ConGlobal Agreement.  We believe that our current facilities are adequate for the foreseeable future.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

Background

We offer the construction industry a safer, greener, faster, longer lastinglonger-lasting, and more economical alternative to conventional construction methods. SG Building redesigns, repurposes,We redesign, repurpose, and convertsconvert heavy-gauge steel cargo shipping containers into safe, green building blocks for commercial, industrial, and residential building construction.

We provide code engineered cargo shipping containers that it modifieswe modify and deliversdeliver to meet the growing demand for safe and green construction. Rather than consuming new steel and lumber, SG Building capitalizeswe capitalize on the structural engineering and design parameters a shipping container must meet and repurposesrepurpose them for use in building.

Revenue for the yearnine months ended December 31, 2010September 30, 2016 was $1,916,565$1,371,933, compared to $478,340$2,160,455 for the yearnine months ended December 31, 2009.September 30, 2015. This increasedecrease of $1,438,225 results$788,522 resulted primarily from significantly increased a decrease of revenue from modified reinforced containers without any interior fit-out (“block “green steel” salesgreen steel jobs”). Revenue recognized from block green steel jobs decreased by $852,344 for the nine months ended September 30, 2016, compared to the nine months ended September 30, 2015, primarily due to a single customer (2010 salesdecrease in the number of approximately $990,000 vs 2009 sales of approximately 285,000)  and an increase in new engineering and project management jobs completed during 2010.

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Cost of Revenue and Gross Profit

Cost of revenue decreased by $590,554 to $1,117,917 for the nine months ended September 30, 2016 from $1,708,471 for the nine months ended September 30, 2015, primarily because of a decrease of costs from block green steel jobs. Costs recognized from block green steel jobs decreased by $647,788 for the nine months ended September 30, 2016, compared to the nine months ended September 30, 2015. Gross profit decreased to $254,016 for the nine months ended September 30, 2016, compared to $451,984 for the nine months ended September 30, 2015. Gross profit percentage decreased to 19% for the nine months ended September 30, 2016, compared to 21% for the nine months ended September 30, 2015.

Operating Expenses

Payroll and related expense for the nine months ended September 30, 2016 was $522,708, compared to $813,544 for the nine months ended September 30, 2015. This decrease resulted from a reduction in salaries and a decrease in headcount for the nine months ended September 30, 2016, compared to the nine months ended September 30, 2015.

Other operating expense for the nine months ended September 30, 2016 was $881,842, compared to $718,820 for the nine months ended September 30, 2015. This increase was primarily caused by an increase in pre-project expenses, as well as amortization of intangible assets.

Other Income (Expense)

Interest expense for the nine months ended September 30, 2016 was $552,429, compared to $1,820,419 for the nine months ended September 30, 2015. This decrease resulted primarily from the recognition of a default penalty of $1,247,310 during the nine months ended September 30, 2015.

During the nine months ended September 30, 2016, we recognized other income of $18,345 as a result of a change in fair value of financial instruments, compared to $646,671 recognized as a result of a change in fair value of financial instruments during the nine months ended September 30, 2015.

Three Months Ended September 30, 2016 and 2015:

Revenue

Revenue for the three months ended September 30, 2016 was $315,710, compared to $289,581 for the three months ended September 30, 2015. This increase of $26,129 resulted primarily from an increase of revenue from engineering services, which increased by $57,341 for the three months ended September 30, 2016 compared to the three months ended September 30, 2015. Revenue from engineering services increased primarily due to an increase in the number of jobs being completed during the three months ended September 30, 2016, compared to the three months ended September 30, 2015.

Cost of Revenue and Gross Profit

Cost of revenue increased by $1,049,466$10,570 to $1,339,159$257,943 for the yearthree months ended December 31, 2010 from $289,693September 30, 2016, compared to $247,373 for the yearthree months ended December 31, 2009.September 30, 2015. The increase in cost of revenue resultsresulted primarily from an increase in sales offset by a decrease inof costs from engineering services. Costs recognized from engineering services

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increased $53,104 for the gross profit percentage.  three months ended September 30, 2016, compared to the three months ended September 30, 2015.

Gross profit increased to $577,406$57,767 for the yearthree months ended December 31, 2010 from a gross profit of $188,647September 30, 2016, compared to $42,208 for the yearthree months ended December 31, 2009.  The grossSeptember 30, 2015. Gross profit percentage was 30.1%increased to 19% for the yearthree months ended December 31, 2010 asSeptember 30, 2016, compared to a gross profit percentage of 39.4%15% for the yearthree months ended December 31, 2009.  This decrease in gross profit percentage results from a decrease in gross profit percent in engineering (from 58.9% in 2009 to 42.4% in  2010) and project management (from 49.1% in 2009 to 20.1 % in 2010) projects offset by an increase in the gross profit percent in block “green steel” sales (from 29.6% in 2009 to 32.5% in 2010). The decrease in gross profit percentage for engineering and project management projects resulted from jobs which were priced below our normal margin in order to obtain product acceptance and building approvals.

Operating Expenses

Payroll and related expense for the yearthree months ended December 31, 2010September 30, 2016 was $963,075$155,455, compared to $172,537$222,166 for the yearthree months ended December 31, 2009. The increase of $790,538 resultsSeptember 30, 2015. This decrease resulted from an increasea reduction in sales, marketingsalaries and administrative personnel.

Other operating expense for the yearthree months ended December 31, 2010September 30, 2016 was $548,189$275,633, compared to $234,247$170,892 for the yearthree months ended December 31, 2009. TheSeptember 30, 2015. This increase of $313,942 results fromwas primarily caused by an increase in pre-project expenses, as well as amortization of approximately (i) $81,000 in consulting and professional fees, (ii) $65,000 in marketing costs, (iii) $25,000 in travel and entertainment expenses,  (iv) $64,000 in insurance costs and (v) $78,000 other general and administrative expenses.

Other Income (Expense)

Interest expense for the yearthree months ended December 31, 2010September 30, 2016 was $ 396,155$123,412, compared to $81,083$1,442,342 for the yearthree months ended December 31, 2009.September 30, 2015. This increase results from the beneficial conversion feature embedded in the convertible notes and related debt discount and contractual interest on increased borrowings.

During the nine months ended September 30, 2016, we recognized other income of $9,275 recognized due to$18,345 as a result of a change in fair value of derivative conversion option liabilities.

Revenue for the nine monthsyear ended September 30, 2011December 31, 2015 was $2,821,613$2,405,784, compared to $1,538,013$6,036,953 for the nine monthsyear ended September 30, 2010.December 31, 2014. This increasedecrease of $1,283,600 results$3,631,169 resulted primarily from an increasea decrease of $1,799,728revenue from block green steel jobs. Revenue recognized from block green steel jobs decreased by $3,406,377 for the year ended

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December 31, 2015, compared to the year ended December 31, 2014, primarily due to one non-recurring job in block “green steel” sales reduced by $516,128the amount of lower sales in engineering and project management jobs.

Cost of Revenue and Gross Profit

Cost of revenue increaseddecreased by $1,369,077$2,672,276 to $2,417,082$1,897,862 for the nine monthsyear ended September 30, 2011 from $1,048,005December 31, 2015, compared to $4,570,138 for the nine monthsyear ended September 30, 2010.December 31, 2014. The increasedecrease in cost of revenue resultsresulted primarily from an increase in sales offset by a decrease inof costs from block green steel costs. Costs recognized from block green steel jobs decreased by $2,557,226 for the gross profit percentage.  year ended December 31, 2015, compared to the year ended December 31, 2014.

Gross profit decreased by $958,893 to $404,531$507,922 for the nine monthsyear ended September 30, 2011 from a gross profit of $490,008December 31, 2015, compared to $1,466,815 for the nine monthsyear ended September 30, 2010.  The grossDecember 31, 2014. Gross profit percentage was 14.3%decreased to 21% for the nine monthsyear ended September 30, 2011 asDecember 31, 2015, compared to a gross profit percentage of 31.9%24% for the nine monthsyear ended September 30, 2010.  This decrease in gross profit percentage results from a decrease in the gross profit percent in block “green steel” sales (from 33.5% during the period in 2010 compared to 13.3% during the period in 2011) offset by an increase in gross profit percent in project management (from 25.6% during the period in 2010 to 44.4% during the period in 2011) and engineering (from 45.2% during the period in 2010 to 68.7% during the period in 2011). The decrease in the gross profit percentage for block “green steel”  sales was partially the result of the Company bidding projects with lower than usual gross profit margins in order to achieve regulatory approvals and establish market share and proof of concept in certain product  classes. The Company intends to leverage these initial projects to successfully execute similar projects at higher gross margin percentages. The decrease in gross profit percentage also resulted from an increase in commodities costs related to containers used in production.

Operating Expenses

Payroll and related expense was relatively unchanged for the nine monthsyear ended September 30, 2011 ($697,305)December 31, 2015 was $1,003,699, compared to compensation expense$1,216,300 for the nine monthsyear ended September 30, 2010 ($704,207).

Other operating expense for the nine monthsyear ended September 30, 2011December 31, 2015 was $853,948$949,545, compared to $277,056$1,003,311 for the nine monthsyear ended September 30, 2010.December 31, 2014. The increasechange results primarily from a decrease of $576,892 results from an increase of approximately (i) $326,000 in consulting and professional fees, (ii) $97,000$54,653 in marketing costs, (iii) $70,000 in travel and entertainment expenses, and (iv) $84,000 of general and administrative expenses. Operating expenses partially increased by approximately $125,000 duebusiness development expense for the year ended December 31, 2015, compared to non-recurring legal and accounting fees associated with the Merger.

Other Income (Expense)

Interest expense for the nine monthsyear ended September 30, 2011December 31, 2015 was $2,520$1,944,487, compared to $146,388$1,066,833 for the nine monthsyear ended September 30, 2010.December 31, 2014. This decreaseincrease of $877,654 results from a decrease of amortization of debt discount on SGB’s convertible debentures, offset by a default penalty of $1,247,310 being recognized during the maturity and payment or conversion of outstanding interest bearing debts.

During the nine monthsyear ended September 30, 2011 and September 30, 2010 there wasDecember 31, 2015, we recognized $646,671 of other income recognized from (1) cancellation of trade liabilities and unpaid interest of $61,733 and $41,982, respectively and (2)due to a change in the fair value of financial instruments, compared to $1,386,469 in 2014. Also, during the derivative liabilityyear ended December 31, 2014, there was a loss on extinguishment of $49,111 and ($9,275), respectively.

Income Tax Provision

A 100% valuation allowance was provided against the deferred tax asset consisting of available net operating loss carryforwards and accordingly no income tax benefit was provided.

Impact of Inflation

The impact of inflation upon SG Building’sSGB’s revenue and resultsincome (loss) from continuing operations during each of the past two fiscal years has not been material to its financial position or results of operations for those years.

Liquidity and Capital Resources

SGB sustained losses prior to its bankruptcy and continues to sustain losses from operations and itafter its emergence from bankruptcy in June 2016. SGB anticipates that it will continue to generate losses from operations for the foreseeable future. As ofAt December 31, 20102016 and December 31, 2009, SG Building’s stockholders’ equity/(deficit) was approximately $440,2002015, SGB had a cash balance of $        and ($1,191,200),$497,000, respectively. SG Building’s net loss from