Business Context and Reporting Period
Company: Olenox Industries Inc. (formerly Safe & Green Holdings Corp.)
Filing Type: Form 10-Q (Unaudited)
Period Ended: March 31, 2026
Business Overview: A vertically integrated energy company operating in three segments: Construction (prefabricated modules), Oil and Gas (asset revitalization), and SaaS (industrial IoT solutions). The company changed its name and trading symbol to "OLOX" in January 2026.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Revenue | $285,313 | $566,354 |
| Cost of Revenue | $486,146 | $890,109 |
| Gross Loss | $(200,833) | $(323,755) |
| Operating Loss | $(2,883,114) | $(1,831,982) |
| Net Loss | $(2,665,724) | $(2,746,668) |
| Net Loss Attributable to Common Stockholders | $(3,061,691) | $(2,746,668) |
| Cash and Cash Equivalents (End of Period) | $30,883 | $230,509 |
| Working Capital | $(23,432,117) | N/A |
| Total Debt (Current + Long-Term) | ~$10.1M | N/A |
Note: Working capital calculated as Total Current Assets ($1,216,918) minus Total Current Liabilities ($24,649,035). Total Debt includes lines of credit, convertible notes, current/long-term debt, and short-term notes.
Material Changes vs. Prior Period
- Revenue Decline: Revenue decreased 50% to $285,313, primarily due to reduced construction services revenue, partially offset by growth in Oil and Gas and SaaS segments.
- Operating Expenses: Total operating expenses increased 78% to $2,682,281. This was driven by higher payroll (due to acquisitions) and a significant rise in General and Administrative expenses ($1.9M vs $0.9M) related to professional fees and integration costs.
- Debt Extinguishment: The company recognized a net gain of $583,726 from debt settlements ($1.2M gain vs $0.6M loss) achieved by issuing common stock to settle obligations.
- Cash Position: Cash and cash equivalents dropped 93% to $30,883, reflecting a net cash outflow from operating activities of $1.9M.
Guidance, Outlook, Risks, and Unusual Items
Going Concern Warning
Management has raised substantial doubt about the Company's ability to continue as a going concern due to recurring operating losses, negative working capital of approximately $23.4 million, and negative operating cash flows. There are no secured sources of future funding.
Subsequent Events (Post-March 31, 2026)
- Chapter 11 Filing: On April 28, 2026, wholly-owned subsidiary SG Echo LLC filed for Chapter 11 bankruptcy protection. This triggered defaults on approximately $4.0 million in debt.
- Acquisitions: Acquired CS Digital Ventures (May 2026) and Psylinks Neurotech Corp (July 2026).
- Reverse Stock Split: A 1-for-10 reverse stock split was effected on May 8, 2026.
Legal and Contingencies
The company faces numerous pending litigations and default judgments, including:
- Rulien Litigation: Default judgment entered June 24, 2026, for alleged unpaid commissions of $1.37M.
- Crescendo Litigation: Default judgment of $243,521 entered April 9, 2026.
- American Express: Default judgment of ~$232,000 granted September 2024.
- Other: Multiple pending suits regarding leases, employment, and contract breaches with potential losses ranging from $100k to $750k.
Internal Controls
Disclosure controls and procedures were deemed ineffective due to material weaknesses in internal control over financial reporting, specifically regarding the estimation of acquisition-date fair values.
Investor Verification Checklist
- Liquidity Runway: Verify the immediate cash burn rate given the $30,883 cash balance and the subsidiary's Chapter 11 filing.
- Debt Default Status: Confirm the impact of the SG Echo Chapter 11 filing on the parent company's debt covenants and the $4.0M debt default.
- Legal Exposure: Assess the likelihood of collecting on the $1.27M EDI judgment versus the risk of paying out on multiple default judgments (Rulien, Crescendo, AMEX).
- Revenue Quality: Scrutinize the construction backlog ($1.28M) and the ability to convert it to revenue given the historical volatility and cost overruns.
- Equity Dilution: Review the terms of recent preferred stock sales and the potential dilution from convertible notes and warrants outstanding.