UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
Washington,

WASHINGTON, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to SectionPROXY STATEMENT PURSUANT TO SECTION 14(a) of the Securities Exchange Act ofOF THE

SECURITIES EXCHANGE ACT OF 1934

(Amendment No. __)

Check the appropriate box:

SG BLOCKS, INC.

(Name of Registrant as Specified Inin Its Charter)

(Name of Person(s) Filing Proxy Statement, if other thanOther Than the Registrant)

Payment of Filing Fee (Check(check the appropriate box):

195 Montague Street, 14^th14th Floor

Brooklyn, New York 11201

June 25, 2020

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 1, 2018

To the Stockholders of SG Blocks, Inc.:

The 2018

We hereby notify you that the 2020 Annual Meeting of Stockholders (the “2020 Annual Meeting” or “Annual Meeting”) of SG Blocks, Inc., a Delaware corporation, (the “Company”), will be held on Friday, June 1, 2018,July 30, 2020 beginning at 9:10:00 a.m., local time be held at the offices of Thompson Hine LLP (“Thompson Hine”), 335 Madison Avenue, 12^th Floor,200 Broadhollow Road, Melville, New York New York,11747, for the following purposes:

1.      To elect seven

The matters listed in this notice of meeting are described in detail in the accompanying proxy statement. Our Board of Directors until the next annual meeting of stockholders and until their respective successors are duly elected and qualified;

2.      To consider and vote upon an amendment to the SG Blocks, Inc. Stock Incentive Plan to increase the number of shares available for issuance thereunder in the amount of 1,000,000 shares, from 1,500,000 to 2,500,000 shares;

3.      To consider and vote upon ratification of the appointment of Whitley Penn LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2018;

4.      To approve, on an advisory, non-binding basis, the compensation of our named executive officers (Say-on-Pay);

5.      To approve, on an advisory, non-binding basis, the frequency of the stockholder vote to approve the compensation of our named executive officers (Say-When-on-Pay); and

6.      To transact such other business as may properly come before the Annual Meeting or any adjournments or postponements thereof.

Only stockholders of record athas fixed the close of business on April 12, 2018June 22, 2020 as the record date for determining those stockholders who are entitled to notice of and to vote at the meeting or any adjournment or postponement of our 2020 Annual Meeting and at any adjournments or postponementsMeeting. The list of the Annual Meeting. A liststockholders of stockholders entitled to voterecord as of the close of business on June 22, 2020 will be made available for inspection at the meeting will be availableand at our principal place of business for inspection by stockholders, for any purpose germane to the meeting, at the Annual Meeting and during normal business hours during the ten-day period immediatelyten days prior to the 2020 Annual Meeting, at our principal executive offices at 195 Montague Street, 14^th Floor, Brooklyn, New York 11201.Meeting.

All stockholders are cordially invited to attend the Annual Meeting in person. If you plan to attend the Annual Meeting, prior to June 1, 2018, you must inform the Company’s outside counsel, via e-mail at NYC-Reception@thompsonhine.com or by telephone at 212-692-3500, of your intent to attend the Annual Meeting. To gain access to the offices of Thompson Hine, you must present a form of picture identification to the security officer at the desk located on the main floor of 335 Madison Avenue. You will be provided a pass to permit access to the building’s elevators and will proceed to the 12^th floor offices of Thompson Hine.IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JULY 30, 2020.

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting to be held on June 1, 2018:In accordance with the rules of the Securities and Exchange Commission (the “SEC”), we are advising our stockholders of Internet availability of our proxy materials related to the 2020 Annual Meeting. SEC rules allow companies to provide access to proxy materials in one of two ways. Because we have elected to use the “full set delivery” option, we are delivering our proxy materials to our stockholders by providing paper copies, as well as providing access to our proxy materials on a publicly accessible website. Our proxy statement, proxy card Annual Report on Form 10-K for the year ended December 31, 2017 and this notice are available atwww.sgblocks.com orwww.astproxyportal.com/ast/2130623321..

You can vote by proxy over the Internet by following the instructions provided in the proxy materials that were mailed to you onOn or about April 20, 2018, or you can vote by mail or by telephone. Your promptness in voting byJune 30, 2020, we will begin mailing this proxy will assist in its expeditious and orderly processing and will ensure that you are represented at the Annual Meeting. Proxies are being solicited on behalf of the Board. If you vote by proxy, you may nevertheless attend the Annual Meeting and vote your shares in person.statement.

YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, PLEASE SUBMIT A PROXY AS PROMPTLY AS POSSIBLE BY USING THE INTERNET OR THE DESIGNATED TOLL-FREE TELEPHONE NUMBER, OR BY SIGNING, DATING AND RETURNING BY MAIL THE PROXY CARD IN THE RETURN ENVELOPE PROVIDED.

195 Montague Street, 14th Floor

Brooklyn, New York 11201

April 19, 2018

TO ENSURE YOUR REPRESENTATION AT THE MEETING, YOU ARE URGED TO READ THIS PROXY STATEMENT AND SUBMIT YOUR PROXY OR VOTING INSTRUCTIONS AS SOON AS POSSIBLE BY FOLLOWING THE INSTRUCTIONS IN THE PROXY MATERIALS, WHICH WERE MAILED TO YOU ON OR ABOUT APRIL 20, 2018. YOU MAY VOTE ONLINE, BY TELEPHONE OR BY MAILING YOUR SIGNED PROXY CARD IN THE ENCLOSED RETURN ENVELOPE.

Table Of ContentsFor the 2020 Annual Meeting of Stockholders to be held on July 30, 2020

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SG BLOCKS, INC.GENERAL INFORMATION

PROXY STATEMENT FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 1, 2018

This

We are providing these proxy statement is being furnishedmaterials to youholders of shares of common stock, $0.01 par value per share (“Common Stock”), of SG Blocks, Inc., a Delaware corporation (referred to as “SG Blocks,” the “Company,” “we,” or “us”), in connection with the solicitation of proxies by the Board of Directors (the “Board”) of SG Blocks Inc. (the “Company,” “we,” “us”“Board” or “our”“Board of Directors”). The 2018 of proxies to be voted at our 2020 Annual Meeting of Stockholders (the “2020 Annual Meeting” or “Annual Meeting”) willto be held at 200 Broadhollow Road, Melville, New York 11747, on Friday, June 1, 2018,July 30, 2020, beginning at 9:10:00 a.m., local time, and at the officesany adjournment or postponement of Thompson Hine LLP (“Thompson Hine”), 335 Madison Avenue, 12^th Floor, New York, New York 10017. The Company’s telephone number is (646) 240-4235.our 2020 Annual Meeting.

ABOUT THE ANNUAL MEETING

What is the purpose of the Annual Meeting?

The purpose of the 2020 Annual Meeting and the matters to be acted uponon are set forth understated in the headingsProposal 1 — Election of Directors,Proposal 2 — Amendment to the SG Blocks, Inc. Stock Incentive Plan,Proposal 3 — Ratification of Appointment of Independent Registered Public Accounting Firm, Proposal 4 — Advisory Approval of Named Executive Officer Compensation andProposal 5 — Advisory Approval of the Frequency of the Advisory Vote on Named Executive Officer Compensation below and in theaccompanying Notice of Annual MeetingMeeting. The Board of Stockholders. You are requested to promptly vote by proxy by followingDirectors knows of no other business that will come before the instructions provided on the proxy card, which was mailed to you on or about April 20, 2018. You may vote online, by telephone or by mailing your signed proxy card in the enclosed return envelope.

How is the Company distributing the proxy materials?

The rules of the Securities and Exchange Commission (the “SEC”) permit us to make our proxy materials available in one of two ways: the “full set delivery” option or the “notice only” option. A company may use a single method for all of its stockholders or may use both methods. We have elected to use the full set delivery option to deliver the proxy materials for the Annual Meeting to each stockholder of record as of the Record Date (as defined below). As such, on or about April 20, 2018, we will be mailing paper copies of our proxy materials to stockholders, as well as providing access to the proxy materials atwww.sgblocks.com orwww.astproxyportal.com/ast/21306. We may decide not to use the full set delivery option in the future; however, you will still have the right to request a free set of proxy materials by mail.

Who may vote at and attend the Annual Meeting?

You are entitled to notice of the Annual Meeting and to vote, in person or by proxy, at the Annual Meeting if you owned shares of the Company’s common stock, par value $0.01 per share (“Common Stock”), as of the close of business on April 12, 2018, which has been fixed as the record date (the “Record Date”) for the2020 Annual Meeting.

On the Record Date, 4,260,041 shares of Common Stock were issued and outstanding, held by 121 holders of record. Holders of record of our Common Stock are entitled to one vote per share.

All stockholders as of the Record Date, or their duly appointed proxies, may attend the Annual Meeting. If you attend the Annual Meeting in person, you will be asked to present photo identification (such as a state-issued driver’s license) and proof of your ownership of shares of Common Stock before entering the meeting. Please note that if you hold shares in “street name” (through a bank or broker, for example), you will need to bring a recent brokerage statement or a letter from your broker or bank reflecting your ownership of our Common Stock as of the Record Date. If you want to vote shares you hold in street name in person at the Annual Meeting, you must bring a legal proxy in your name from the broker, bank or other nominee that holds your shares.

What constitutes a quorum?

The presence at the Annual Meeting, in person or by proxy, of the holders of a majority of our Common Stock issued and outstanding and entitled to vote as of the Record Date will constitute a quorum. As of the Record Date, 2,130,021 shares of Common Stock constituted a majority. Broker “non-votes” (as described below), abstentions and

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proxies marked “withhold” for the election of directors will be counted for purposes of determining the presence or absence of a quorum for the transaction of business.

What are broker “non-votes”?

If you hold your shares through a broker, your broker’s ability to vote your shares for you is governed by applicable stock exchange rules. Without your specific instruction, a broker or other nominee may only vote your shares on routine proposals. Your broker will submit a proxy card on your behalf, but leave your shares unvoted on non-routine proposals—this is known as a “broker non-vote.” Without your specific instruction, your broker will not vote your shares onProposal 1 — Election of Directors,Proposal 2 — Amendment to the SG Blocks, Inc. Stock Incentive Plan,Proposal 4 — Advisory Approval of Named Executive Officer Compensation orProposal 5 — Advisory Approval of the Frequency of the Advisory Vote on Named Executive Officer Compensation, which are considered “non-routine” proposals under applicable stock exchange rules. Non-votes will not be counted “FOR” or “AGAINST” these proposals.Proposal 3 — Ratification of Appointment of Independent Registered Public Accounting Firm is a routine matter on which your broker will vote without your instruction. Therefore, broker non-votes are not expected to occur with respect to Proposal 3.

How will abstentions be counted?

Generally, choosing to “ABSTAIN” from a vote is counted as a vote “AGAINST” a particular proposal. However, a vote to “ABSTAIN” from the election of any director (as in Proposal 1 of this proxy statement) will not be counted as a “FOR” or “AGAINST” vote. Even if you choose to “ABSTAIN” on any or every proposal, your shares will still be counted toward the quorum.

What vote is required to approve each proposal?

ForProposal 1 — Election of Directors, the nominees for director who receive the most votes cast (also known as a plurality), either in person or by proxy, will be elected. You may vote either FOR all of the nominees, WITHHOLD your vote from all of the nominees or WITHHOLD your vote from any one of the nominees. Votes that are withheld will not be included in the vote tally for, and will have no effect on, the election of directors. Broker non-votes, if any, will not be counted as having been voted and will have no effect on the election of directors, except to the extent the failure to vote for a nominee results in another nominee receiving a larger number of votes.

Adoption ofProposal 2 — Amendment to the SG Blocks, Inc. Stock Incentive Plan,Proposal 3 — Ratification of Appointment of Independent Registered Public Accounting Firm andProposal 4 — Advisory Approval of Named Executive Officer Compensation requires the affirmative vote of a majority of the total number of shares present in person or represented by proxy at the meeting and entitled to vote for each of these proposals. In determining whether Proposals No. 2, No. 3 and No. 4 have received the requisite number of affirmative votes, abstentions will be counted and will have the same effect as a vote against the proposals, and broker non-votes, if any, will have no effect on the votes for the proposals.

With respect toProposal 5 — Advisory Approval of the Frequency of the Advisory Vote on Named Executive Officer Compensation, the frequency (one year, two years or three years) that receives the highest number of votes cast by the stockholders will be deemed the frequency for the advisory approval of named executive officer compensation preferred by the stockholders. The proxy card provides stockholders with the opportunity to choose among four options (holding the vote every one, two or three years, or abstaining) and, therefore, stockholders will not be voting to approve or disapprove the recommendation of the Board. Abstentions and broker non-votes will have no effect on the results of this vote.

How do I vote?

To ensure your shares are voted at the meeting, you are urged to provide your proxy instructions promptly online, by telephone or by mailing your signed proxy card in the enclosed envelope. Please refer to the instructions on the proxy card. Authorizing your proxy will not limit your right to attend the Annual Meeting and vote your shares in person.

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Your proxy (one of the individuals named in your proxy card) will vote your shares per your instructions. If you fail to provide instructions on a properly submitted proxy, your proxy will vote as recommended by the Board, as described below.

If you have shares held by a broker or other nominee, you may instruct your broker or nominee to vote your shares by following the instructions that the broker or nominee provides to you. Most brokers and nominees allow you to vote by mail, telephone and on the Internet. As discussed above, under applicable stock exchange rules,Proposal 1 — Election of Directors,Proposal 2 — Amendment to the SG Blocks, Inc. Stock Incentive Plan,Proposal 4 — Advisory Approval of Named Executive Officer Compensation andProposal 5 — Advisory Approval of the Frequency of the Advisory Vote on Named Executive Officer Compensation are “non-routine” matters, meaning that brokers or other nominees who have not been furnished voting instructions by their clients will not be authorized to vote in their discretion on those proposals.Proposal 3 — Ratification of Appointment of Independent Registered Public Accounting Firm is considered a “routine” matter, which means brokers or nominees who have not been furnished voting instructions by their clients will be authorized to vote on that proposal.

May I change my vote?

You may revoke your proxy and change your vote at any time before the final vote at the Annual Meeting. You may revoke your proxy by attending the Annual Meeting and voting in person or by delivering to our Corporate Secretary a duly executed revocation of proxy or a new proxy bearing a later date. Attendance at the Annual Meeting will not itself constitute a revocation of a proxy.

How does the Board recommend I vote?

If you do not provide instructions on your proxy card, the persons named as proxy holders on the proxy card will vote in accordance with the recommendations of the Board.

The Board unanimously recommends a vote “of Directors is soliciting votes (1)FOR”:

•        election to our Board of each of the seven directorfour (4) nominees named in this proxy statement;

•        approval of the amendment (the “Amendment”)herein for election to the SG Blocks, Inc. Stock Incentive Plan (the “Incentive Plan”) to increaseBoard of Directors; (2)FOR the number of shares authorized for issuance;

• ratification of the appointment of WhitleyWhitney Penn, LLP (“WhitleyWhitney Penn”) as our independent registered public accounting firm for theour fiscal year ending on December 31, 2018;

•2020; (3) FOR the approval of on an advisory, non-binding basis, of the compensation of our named executive officers;officers (Say-on-Pay); and

• (4)FOR the approval on an advisory, non-binding basis, of an annual frequency foramendment to our Stock Incentive Plan to increase the vote onnumber of shares of common stock that we will have authority to grant under the compensationPlan by an additional 1,000,000 shares of our named executive officers.common stock.

We do not expect that any other matters will be presented for consideration at

ANNUAL MEETING ADMISSION

All stockholders as of the record date are welcome to attend the 2020 Annual Meeting. If however, anyyou attend, please note that you will be asked to present government-issued identification (such as a driver’s license or passport) and evidence of your share ownership of our common stock on the record date. This can be your proxy card if you are a stockholder of record. If your shares are held beneficially in the name of a bank, broker or other matters are properly presented,holder of record and you plan to attend the persons named2020 Annual Meeting, you will also be required to present proof of your ownership of our common stock on the record date, such as proxies intenda bank or brokerage account statement or voting instruction card, to vote on such matters in accordance with their judgment, including any proposalbe admitted to adjourn or postpone the 2020 Annual Meeting.

Who pays for expenses incurred in connection with the solicitation of proxies?

We are making this solicitation of proxies and have paid the entire expense of preparing, printing and mailing the proxy materials furnished to stockholders. The solicitation of proxiesNo cameras, recording equipment or electronic devices will be largely by mail, but our directors, officers or other representatives may solicit proxies from stockholders by telephone, e-mail or other electronic means, orpermitted in person. These persons will not receive additional compensation for soliciting proxies. Arrangements also will be made with brokerage houses and other custodians, nominees and fiduciaries for the forwarding of solicitation materials2020 Annual Meeting.

Information on how to obtain directions to attend the beneficial owners of stock held of record by these persons, and we will reimburse them for reasonable out-of-pocket expenses.2020 Annual Meeting is available at:www.sgblocks.com.

INFORMATION ABOUT THE ANNUAL MEETING

PROPOSAL 1 — ELECTION OF DIRECTORS

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE YOUR SHARES FOR THE ELECTION

OF EACH OF THESE NOMINEES

Currently, the Board of Directors consists of five (5) members and may be changed by resolution of the Board of Directors. At the 2020 Annual Meeting, sevenfour (4) nominees will be elected as directors. OurThree of the current members: Paul Galvin (Chairman of the Board), Christopher Melton (Lead Independent Director) and Yaniv Blumenfeld have been nominated by the Nominating and Corporate Governance Committee and the Board currently consists of eight members. Neal Kaufman, who is currently a memberDirectors of SG Blocks for election as directors of SG Blocks at the 2020 Annual Meeting. In addition, Maggie Coleman has been nominated by the Nominating and Corporate Governance Committee of the Board will not standof Directors of SG Blocks for re-election, and his term will expireelection as a director of SG Blocks at the Annual Meeting. Mr. Kaufman has decided not to stand for re-election in order to focus on his other business and personal interests. Pursuant to our bylaws, which permit the Board to set the number of directors from time to time and to appoint directors between annual meetings, and resolutions adopted by the Board, the size of our Board will be reduced from eight to seven members, effective immediately after the2020 Annual Meeting. The sevenBoard of Directors believes that it is in the best interests of SG Blocks to elect the above-described nominees, are named below. Proxies cannot be voted foreach to serve as a greater numberdirector until the next annual meeting of persons thanstockholders and until his/her successor shall have been duly elected and qualified. All the number of nominees named in this proposal.

Our Board, based on the recommendation of the independent members of the Board, has nominated each of Paul M. Galvin, Balan R. Ayyar, Yaniv Blumenfeld, Sean M. McAvoy, Christopher Melton, A. Richard Moore, Jr. and Mahesh S. Shetty to stand for election at the meeting. Each nominee hashave consented to bebeing named in this proxy statement and to serve as a director if elected. However,At the time of the 2020 Annual Meeting, if any nominee becomes unable to stand for election at the Annual Meeting, proxies will be voted in favor of the remainder of the nominees andnamed above is not available to serve as director (an event that the Board of Directors does not currently have any reason to anticipate), all proxies may be voted for substituteany one or more other persons that the Board of Directors designates in their place. It is the intention of the persons named as proxies to vote all shares of Common Stock for which they have been granted a proxy for the election of each of the nominees, unless our Board chooses to reduce the number of directors serving on the Board.

Each nominee, if elected, will be entitledeach to serve as a director until the 2019next annual meeting of stockholders and until ahis/her successor isshall have been duly elected and qualified.

The Board of Directors believes that each of the nominees is highly qualified or until his earlier death, resignation or removal.to serve as a member of the Board of Directors and each has contributed to the mix of skills, core competencies and qualifications of the Board of Directors. When evaluating candidates for election to the Board of Directors, the Nominating and Governance Committee and the Board of Directors seeks candidates with certain qualities that it believes are important, including experience, skills, expertise, personal and professional integrity, character, business judgment, time availability in light of other commitments, dedication, conflicts of interest, those criteria and qualifications described in each director’s biography below and such other relevant factors that the Nominating and Governance Committee considers appropriate in the context of the needs of the Board of Directors.

Director Nomination Process

Because we do not have a standing nominating committee, our independent directors evaluate

The Nominating and Governance Committee evaluates and recommend director nominees for the Board’s consideration. Each of the director nominees for the 2020 Annual Meeting was evaluated and recommended by the independent directorsNominating and Governance Committee and unanimously approved by the Board.Executive Committee of the Board of Directors.

Director Qualifications

The BoardNominating and Governance Committee has not established specific criteria or minimum qualifications that must be met by director nominees, but recognizes the value of nominating candidates who bring a variety of experiences, skills, perspectives and backgrounds to Board deliberations. The independent directors, when identifying nominees to serves as directors of the Company, consider each nominee’s qualifications, including educational, business and professional experience, such as real estate, manufacturing and finance, and whether such nominees will satisfy the independence standards under Nasdaq and SEC rules and regulations. We do not have a set policy or process for considering diversity in identifying nominees, but strive to identity and recruit nominees with a broad diversity of experience, talents, professions, backgrounds, perspective, age, gender, ethnicity and geographic representation,country of citizenship, and who possess the commitment necessary to make a significant contribution to the Company. Board nominees should be committed to enhancing long-term stockholder value and should possess high standards of integrity and ethical behavior. The independent directorsNominating and Governance Committee may also consider other elements as they deemit deems appropriate.

We believe that the continuing service of qualified incumbent directors promotes stability and continuity in the function of the Board of Directors, contributing to the Board’sBoard of Directors’ ability to work as a collective body, while giving us the benefit of the familiarity and insight into our affairs that our directors have accumulated during their tenure. Therefore, the independent directors will generally re-nominate incumbent directors who continue to be qualified for Board of Directors service and are willing to continue in such role. If an incumbent director is not standing for re-election or if a vacancy occurs between annual stockholder meetings, the Committee will seek out potential candidates for Board of Directors appointment who meet the criteria for selection as a nominee and have the specific qualities or skills being sought. Director candidates will be selected based upon input from the members of the Board of Directors, senior management of the Company and, if the Committee deems appropriate, a third-party search firm.

Stockholder Recommendations

We will also consider director candidates submitted in writing by stockholders. A stockholder who wishes to nominate a person for election must provide written notice to the Company in accordance with the procedures set forth in our bylaws. Among other requirements, such notification shall contain certain background information and the consent of each nominee to serve as one our directors, if elected. Stockholder nominations for election to the Board of Directors for the 20192021 annual meeting of stockholders must be made by written notification received by us no later than Tuesday, April 2, 2019.notification. See “Stockholder Proposals For the 2021 Annual Meeting.”

All potential director candidates will be evaluated in the same manner, regardless of the source of the recommendation.

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2018INFORMATION ABOUT THE NOMINEES

2020 Nominees for Election as Directors

The following table sets forth the nominees to be elected at the 2020 Annual Meeting, each nominee’s age as of the Record Date, the year each nominee joined the Board of Directors and each nominee’s principal occupation:current position with the Company:

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(1)     Audit Committee Member.

(2)     Audit Committee Chairman.

(3)     Compensation Committee Member.

(4)     Compensation Committee Chairman.

(5)     Lead Independent Director

Mr. Kaufman, who currently serves on our Compensation Committee, has decided not to stand for re-election. Therefore, immediately after the Annual Meeting Mr. Kaufman will no longer be a member of the Board or any of its committees.

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 and its predecessor entity since April 2009 and as a director of suchthe 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 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 Boardboard 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’s pertinent experience, qualifications, attributesGalvin to serve on our Board of Directors as our Chairman because he brings to our Board of Directors extensive knowledge of the construction and skills includereal estate industries. During his managerial experience and the knowledge and experienceprofession career he has attained ingained vast knowledge of the construction and real estate industry.

Balan R. Ayyar was appointed as a director of the Company on January 30, 2017. General Ayyar is the founderindustries and CEO of Percipient.ai, a Silicon Valley advanced analytics firm providing artificial intelligence, machine learning and computer vision for U.S. national security missions since January 2017. In 2016, he was named the President and Chief Executive Officer of Sevatec, Inc., an IT solutions firm specializing in cyber, data science, cloud engineering and system integration across national security missions, where he had worked as the Chief Operating Officer since 2014. Before joining the private sector, General Ayyar served as the Commanding General of Combined Joined Interagency Task Force 435 in Kabul, Afghanistan, beginning in 2013. Priorbrings to that, General Ayyar led the U.S. Air Force Recruiting Service. He served in four combatant commands, as the military assistant to the Secretary of Defense, and as a White House Fellow. General Ayyar has received a number of awards and decorations

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for his service, including a Bronze Star, an Air Force Commendation Medal and a Presidential Service Badge. He is a member of the Council on Foreign Relations and serves on the Board of Fairfax Futures, an early childhood education non-profit partnership. General Ayyar hasDirectors significant executive leadership and operational experience. His business and managerial experience provides him with a Bachelor of Science in international affairs from the U.S. Air Force Academy, Master’s degrees from Maxwell Air Force Base, Alabama, Auburn University and the Industrial Collegebroad understanding of the Armed Forces, National Defense University in Washington, D.C.operational, financial and strategic issues facing our Company.

General Ayyar’s pertinent experience, qualifications, attributes and skills include his extensive leadership experience and technology background.

Yaniv Blumenfeld joined the Board of Directors 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 ArtsWestchesterArts Westchester and the White Plains Business Improvement District.

We selected Mr. Blumenfeld to serve on our Board of Directors 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, developments,risk-control, development, investment banking and capital raising.

Sean M. McAvoy was appointedMaggie Coleman is a Senior Managing Director and Co-Head of International Capital, Americas at Jones Lang LaSalle Incorporated (NYSE: JLL), a Fortune 500 company, a position she has held since January 2020. In this role, Ms. Coleman leads a team that is primarily focused on cross-border capital deployment from global investors across Canada, EMEA and Asia Pacific. Ms. Coleman is responsible for placing capital from international investors into JLL’s direct transactions, structuring recapitalizations and joint ventures, while also helping offshore capital acquire and finance JLL’s global investment portfolios and large single asset sales. Ms. Coleman has been involved in over $20 billion in transactions and has directed the JLL platform that has executed over $53 billion in transactions since 2011, including over $10 billion in loan sales in the US, Europe and Asia. Further, Ms. Coleman is responsible for business development, client management and the execution of global transactions and is a frequent speaker on global capital flows in the real estate sector. Ms. Coleman also served in various other positions at JLL including as Executive Vice President at JLL form 2013-209 and Managing Director for, 2016-2019. Prior to the its merger with JLL in 2008, Ms. Coleman worked as a directorDirector within the M&A Advisory Services group of Staubach Capital Markets specializing in real estate structured financial solutions and investment banking. Ms. Coleman earned a master’s degree from the University of Chicago in Political Economy and a bachelor’s degree in business economics & public policy (BEPP) and international business from Indiana University’s Kelley School of Business. Ms. Coleman is a council member of the Company on July 1, 2016 by HCI. SeanUrban Development/Mixed-Use Council (UDMUC) at the Urban Land Institute. Commercial Property Executive named Ms. Coleman as a recipient of the “Rising Leader Award” for 2012. In 2012, Ms. Coleman also received the Catalyst Award from JLL for her achievements in team management. Ms. Coleman is a founding memberaffiliated with the Guild Board of HCM, founded in 2010. He has over 20 yearsthe Boys & Girls Clubs of experience in structuringChicago and negotiating transactions, primarily in the public markets. Between 1996 and 2008, Mr. McAvoy wasis a member of the mergers and acquisitions, private equity, and corporate finance practices at Jones Day, an international law firm, where he served as a founding partnerBoard of Directors of the firm’s Silicon Valley office from 2002Jackson Chance Foundation.

We selected Ms. Coleman to 2008. At Jones Day, Mr. McAvoy represented public companiesserve on our Board because she brings extensive knowledge of finance and their boards of directors, as well as financial sponsors, in domestic and cross-border mergers and acquisitions, auctioned dispositions, unsolicited and negotiated tender offers, leveraged buyouts, including going-private transactions, and leveraged recapitalizations. Mr. McAvoy also counseled boards of directors and senior management regarding corporate governance, fiduciary duty, takeover preparedness, and disclosure obligations. Prior to his corporate legal career, Mr. McAvoy served as a legislative aide to Senator William S. Cohen and as a Professional Staff Member of the U.S. Senate Governmental Affairs Committee. Mr. McAvoy also served as a special counsel and senior staff member on Senator John McCain’s 2008 presidential campaign. Currently, Mr. McAvoy serves on the board of The Orvis Company, Inc., a specialty retailer and sporting goods company, and on the board of the Pacific Research Institute, a California-based free-market think tank. Mr. McAvoy is an honors graduate of Williams College and earned advanced degrees at the London School of Economics and Political Science, where he was an Alumni and Friends of the London School of Economics Scholar, and Georgetown University Law School.

Mr. McAvoy’sreal estate industry. Ms. Coleman’s pertinent experience, qualifications, attributes and skills include financial literacy and expertise, inmanagerial experience and the knowledge and experience she has attained through her global capital finance strategy and corporate law.activities.

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Christopher Melton was appointed as a director of the Company upon consummation of the Merger on November 4, 2011. Mr. Melton is Principala licensed real estate salesperson in the State of South Carolina and co-founderuntil June 2019 was a principal of Callegro Investments. Callegro Investments, isLLC, a specialist land investor investing in the southeastern U.S., which he founded 2012. Since June 2019, he has served as a specialist Land Advisor with SVN. Mr. Melton also serves on several public and private boards, including Jupiter Wellness, Inc. since August 2019, and has served on the Board of World Educationsince February 2018 as chief investment officer and Development Fund,analyst at TNT Capital Advisors, a non-profit organization that focuses on education for underprivileged childrencapital advisory firm based in Latin America, since 2008.Florida. He also served as a sales agent as MSK Commercial Services, a commercial real estate company, from February 2018 to June 2019. From 2000 to 2008, 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 of Directors 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.

A. Richard Moore, Jr. joined the Board on February 2, 2017, and has served as Lead Independent Director since his appointment by the Board in April 2018. Mr. Moore is an independent management consultant. From February 2013 through September 2016, he was managing director for non-bank activities of Strategic Growth Bank Incorporated (“Strategic Growth”) in El Paso, Texas, focusing on Strategic Growth’s mortgage activities and new business initiatives. From November 2004 through December 2012, prior to joining Strategic Growth, Mr. Moore held various positions with Verde Realty, a Maryland REIT with headquarters in El Paso and Houston, including Executive Vice President, Chief Financial Officer and Corporate Secretary. Prior to that, Mr. Moore spent 16 years in the Real Estate Department of the Investment Banking Division of Goldman, Sachs & Co., where he developed and led the firm’s sale/leaseback business and later headed the firm’s REIT banking activities. Mr. Moore has been a guest lecturer on real estate finance and the REIT structure at Columbia University, New York University, and Southern Methodist University. He served as director and chairman of the Audit Committee of Guardian Mortgage Company, Inc., in Dallas, Texas, until May 2016. He is currently an advisory trustee of Borderplex Realty Trust, including serving on its compensation committee. He is also a director and chairman of the Investment Committee for the Paso del Norte Health Foundation and a director of the Paso del Norte Charitable Foundation. Mr. Moore holds a B.A. and Master of Divinity from Southern Methodist University and a Master of Business Administration from the Harvard Business School.

Mr. Moore’s pertinent experience, qualifications, attributes and skills include his extensive background in real estate development and financial expertise.

Mr. Shetty’s pertinent experience, qualifications, attributes and skills include expertise in finance, strategy, technology and operations.

On October 15, 2015, the Company and its subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York. At that time, each of Messrs. Galvin and Melton served as a director of the Company and continued to serve as such after the Company’s emergence from bankruptcy on June 30, 2016.

Vote Required

The affirmative vote of a plurality of the votes cast, either in person or by proxy, at the Annual Meeting is required for the election of these nominees as directors. You may vote “FOR” or “WITHHOLD” authority to vote for each of the nominees for director. If you “WITHHOLD” authority to vote with respect to one or more nominees, such vote will have no effect on the election for such nominees.Broker non-votes, if any, will have no effect on the outcome of the vote as long as each nominee receives at least one FOR vote. Shares represented by properly executed proxies will be voted, if specific instructions are not otherwise given, in favor of each nominee.

THE BOARD UNANIMOUSLYOF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE ELECTION OF THE NOMINEES LISTED ABOVE AS DIRECTORS.

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Stockholder Communications with Directors

The Board of Directors has established a process to receive communications from stockholders. Stockholders may contact any member or all members of the Board of Directors, any Board committee, or any chair of any such committee by mail. To communicate with the Board of Directors, any individual director or any group or committee of directors, correspondence should be addressed to the Board of Directors or any such individual director or group or committee of directors by either name or title. All such correspondence should be sent “c/o Corporate Secretary” at SG Blocks, Inc., 195 Montague Street, 14^th Floor, Brooklyn, New York 11201.

All communications received as set forth in the preceding paragraph will be opened by the office of our Secretary and the Corporate Secretary’s office will make sufficient copies of the contents to send to each director who is a member of the group or committee to which the envelope or e-mail is addressed. The Board of Directors has instructed the Corporate Secretary to forward stockholder correspondence only to the intended recipients, and has also instructed the Corporate Secretary to review all stockholder correspondence and, in the Corporate Secretary’s discretion, refrain from forwarding any items deemed to be of a commercial or frivolous nature or otherwise inappropriate for the Board of Directors’ consideration. Any such items may be forwarded elsewhere in our company for review and possible response.

THE BOARD OF DIRECTORS AND ITS COMMITTEES

Board Leadership Structure

The Board of Directors recognizes that one of its key responsibilities is to evaluate and determine its optimal leadership structure so as to provide independent oversight of management. Our Board of Directors is currently led by a Chairman of the Board of Directors who also serves as our Chief Executive Officer. The Board of Directors understands that the right Board leadership structure may vary depending on the circumstances, and our independent directors periodically assess these roles and the Board of Directors 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. In addition, in February 2018, members of the Board agreed to appoint a Lead Independent Director. In April 2018, the Board, upon the recommendation of the independent directors, createdMr. Melton currently serves as the Lead Independent Director position and appointed Mr. Moore to such role.elected by the majority of the Board of Directors.

The responsibilities of the Lead Independent Director include, among others,others: (i) serving as primary intermediary between non-employee directors and management; (ii) approving the agenda and meeting schedules for the Board;Board of Directors; (iii) advising the Chairman of the Board of Directors as to the quality, quantity and timeliness of the information submitted by management to directors; (iv) recommending todirector candidates and selections for the Chairmanmembership and chairman position for each committee of the Board the retention of advisors and consultants who report directly to the Board;Directors; (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 withroles and a Lead Independent Director, leadership structure 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.Board of Directors. 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 of Directors 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 of Directors being composed of independent directors, which, if the director nominees included herein are elected, will be the case following the Annual Meeting, 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 connection with our June 2017 public offering, we are relying on the one-year phase-in period for such requirement. In addition, the Nasdaq Listing Rules require that, subject to specified exceptions, each member of a listed company’s audit, compensation and compensationnominating and governance committees be independent under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Members of the Audit committee membersCommittee and compensation committee membersCompensation 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 of Directors, 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 of Directors or any other committee of the Board of Directors, 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 of Directors 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

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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 of Directors 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, as well as Ms. Coleman, is “independent” in accordance with the Nasdaq Listing Rules. Messrs. Galvin and Shetty are not 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. Mr. Potts who served as a director during 2019 and currently serves as a director was also considered independent. Mr. Shetty who served as a director during 2019 and currently serves as a director was not considered independent due to his prior position as an executive officer.

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

The Board has reviewed the materiality of any relationship that each of our nominated directors has with the Company and has determined that each of Messrs. Ayyar, Blumenfeld, Melton and Moore is “independent” in accordance with the Nasdaq Listing Rules. Messrs. Galvin, Kaufman, McAvoy and Shetty are not considered independent. We are currently relying on the Nasdaq phase-in exemption for newly public companies, as described above. After the Annual Meeting, assuming the election of each of our director nominees, we will have a majority independent Board and fully independent Audit and Compensation Committees.

Board and Committee Responsibilities

Generally

The Board of Directors 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 of Directors acts as an advisor and counselor to senior management and ultimately monitors its performance. The function of the Board of Directors 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 of Directors has established a separate standing Audit Committee, Compensation and CompensationNominating and Corporate Governance Committee. We do not have a standing nominating committee and instead, as permitted by Nasdaq rules, a majority of the independent directors of the Board recommend director nominees for the consideration of the full Board. Each of the Audit Committee, Compensation and CompensationNominating and Corporate Governance Committee operates pursuant to a written charter, a copy of which may be viewed on the Company’s website athttps://www.sgblocks.com under the “Investors — “Investors—Corporate Governance” tab.

From time to time, the Board of Directors may also establish ad hoc committees to address particular matters. During 2020, the Board of directors established an Executive Committee.

Audit Committee

The current members of our Audit Committee are Mr. Melton, who serves as chairperson, General AyyarMr. Blumenfeld and Mr. Moore.Potts. The Audit Committee Charter requires that the Audit Committee consist of at least three members of the Board of Directors, each of whom is required to be independent as defined by Nasdaq and SEC rules.

The Board of Directors has determined that each of the membersmember 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 of Directors has also determined that Mr. MooreMelton, Blumenfeld and Potts each is an “audit committee financial expert,” as defined in Item 407(d)(5) of Regulation S-K under the Exchange Act. Mr. Potts has informed the Nominating and Governance Committee and the Board of Directors that he will not stand for re-election at the Annual Meeting. Following the Annual Meeting, the Board of Directors expects to appoint Ms. Coleman as a member of the Audit Committee.

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’sBoard of Directors’ oversight of our internal financing and accounting processes.

It is the policy of the Audit Committee to pre-approve all

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.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 2017.2019.

Compensation Committee

The current members of our Compensation Committee are Mr. Moore, whoPotts (who serves as chairperson,chairperson), Mr. KaufmanBlumenfeld and Mr. Melton. The Compensation Committee Charter requires that the Compensation Committee consist of at least two members of the Board of Directors, each of whom is required to be independent as defined by Nasdaq rules.

Messrs. Moore and Melton are considered to be “independent” The Board of Directors has determined that each member of the Compensation Committee is independent, as defined in Rule 10C-1 of the Exchange Act and Nasdaq Marketplace Rule 5605(a)(2). We are currently relying onAs stated above, Mr. Potts has informed the Nasdaq phase-in exemptionNominating and Governance Committee and the Board of Directors that he will not stand for newly listed companies with respect

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to Mr. Kaufman’s service onre-election at the Compensation Committee. As Mr. Kaufman will conclude his Board and committee service as ofAnnual Meeting. Following the Annual Meeting, the Board of Directors expects to appoint Ms. Coleman as a member of the Compensation Committee will be fully independent at such time.Committee.

Functions of the Compensation Committee, include, but are not limited to: reviewing and approving, or recommending the Board of Directors 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;Board of Directors; 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 is working to developdeveloped and implementimplemented 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 Board does not have a standing nominating committee; instead,current members of our Nominating and Corporate Governance Committee are Mr. Melton (who serves as permitted under Nasdaq Listing Rule 5605(e), a majoritychairperson) Mr. Blumenfeld and Mr. Potts. The Nominating and Corporate Governance Committee Charter requires that the Nominating and Corporate Governance Committee consist of the independent directors of the Board may recommend director nominees for the consideration of the full Board. The Board believes the independent directors are able to properly select or approve director nominees who will become valuableat least two members of the Board without requiringof Directors, each of whom is required to be independent as defined by Nasdaq rules. The Board of Directors has determined that each member of the formationNominating 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 of Directors, candidates for election to the Board of Directors; (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 of Directors in respect of such stockholder recommendations and proposals; (iii) identifying, evaluating and recommending to the Board of Directors of directors, candidates to serve on committees of the Board of Directors; (iv) assessing the performance of the Board of Directors; and (v) reviewing risk governance structure, risk assessment and risk management practices and guidelines, policies and processes for risk assessment and risk management. As stated above, Mr. Potts has informed the Nominating and Governance Committee and the Board of Directors that he will not stand for re-election at the Annual Meeting. Following the Annual Meeting, the Board of Directors expects to appoint Ms. Coleman as a standing nominating committee at this time. Eachmember of the Nominating and Corporate Governance Committee.

Executive Committee

The current members of our independent directors participates in this process, andExecutive Committee are Messrs. Ayyar, Blumenfeld, Melton and Moore recommendedPotts. The Executive Committee was formed in March 2020. The Executive Committee has, and may exercise, the nomineesauthority of the full Board, except as may be prohibited by Delaware corporate law (DGCL §141(c)(2)).

Changes to Procedures for directors contained in this proxy statement.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 of Directors is responsible for providing suggestions for agenda items that are aligned with the advisory and monitoring functions of the Board.Board of Directors. Agenda items that fall within the scope of responsibilities of a committee of the Board of Directors are reviewed with the chair of that committee. Any member of the Board of Directors 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 of Directors, members of senior management recommended by the Chairman attend Board meetings or portions thereof for the purpose of participating in discussions.

Meeting Attendance

During 2017,2019, our Board of Directors held five7 meetings of the full Board, meetings, four4 Audit Committee meetings and two3 Compensation Committee meetings. Except for General Ayyar, eachThe Nominating and Governance Committee was formed in February 2020 and the Executive Committee was formed in March 2020. Each of the other incumbent directors attended at least seventy-five percent (75%) of the total number of meetings of the Board of Directors held during the period for which he served aswas a director and the total number of meetings held by all committees of the Board of Directors on which he served during the periods that he was a part. General Ayyar’s absences resulted from schedule conflicts due to commitments made prior to his appointmentmember of that committee.

Prior to the Board.

As set forth inCOVID-19 pandemic, our Corporate Governance Guidelines,directors have been encouraged, but not required to attend the Annual Meeting of Stockholders. Due to COVID-19 concerns, one or more of our directors are expected not to attend the 2020 Annual Meeting of Stockholders. All of our annual stockholders’ meeting. We did not hold an annual meeting of stockholders during the year ended December 31, 2017.current directors attended our 2019 Annual Meeting.

Role of the Board of Directors in Risk Oversight

Our executive officers are responsible for the day-to-day management of risks the Company faces, while our Board of Directors has an advisory role in the Company’s risk management process, as a whole and at the committee level, and, in particular, the Board of Directors is responsible for monitoring and assessing strategic and operational risk exposures.exposures, including cybersecurity risk. The

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Board of Directors 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. The Nominating and Corporate Governance Committee manages risks associated with independence. 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

Related Party Transactions

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 proxy statement entitled “Executive Compensation” and “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.

Related Party Review Procedures

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. 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 shall approveapproves 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 availability of other sources for comparable products or services; 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.

CODE OF ETHICSAnti-Hedging and Anti-Pledging Policy

We maintain an insider trading policy that applies to our officers and directors that prohibits trading our securities during certain established periods and 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.

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 of Directors 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 athttps://www.sgblocks.com under the “Investors — “Investors—Corporate Governance” tab, and is available free of charge, upon request to our Corporate Secretary at SG Blocks, Inc., 195 Montague Street, 14^th14th 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 of Directors or a committee of the Board of Directors 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.

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DIRECTOR COMPENSATION

Compensation Program

Our director compensation program is designed to attract and retain highly qualified directors and align their interests with the long-term intereststhose of our stockholders. In connection with their election or appointment to the Board, directors serving on a committee of the Board receive a grant of options to purchase 16,667 shares of Common Stock, andWe 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 of Directors in 2019. Mr. Shetty did not earn any compensation for serving on our Board of Directors until after his employment as a senior executive officer of the Company ended in 2019.

The Compensation Committee reviews the director compensation program and recommends proposed changes for approval by the Board of Directors. 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 of Directors, each director’s role and involvement on the Board of Directors 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 of Directors 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 grantcash fee for serving on the Board of optionsDirectors previously to purchase 13,334 shares of Common Stock.January 1, 2018. The Company intendsfollowing table sets forth the cash fee schedule for compensating non-employee directors, effective January 1, 2018, which remained in effect during 2019:

The above fees are to grant such shares on an annual basis going forward. The option grants to our directors vestbe paid quarterly in advance, in four equal quarterly installments, to each person serving as a non-employee director at the endtime 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 fiscal quarter followingRSU granted represents the right to receive one share of Common Stock; vests one year after grant, date, so longsubject to the recipient’s continued service as the grantee remains a director of the Company. Company through such date; and is payable six months after the termination of the director from the Board of Directors 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 of Directors 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 of Directors or death or disability.

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 vested on the first anniversary of the date of grant.

On April 14, 2020, the Compensation Committee of the Board of Directors granted the following restricted stock units (“RSUs”): 11,331 RSUs were granted to the Chairman of the Board of Directors and Chief Executive Officer, 4,000 RSUs were granted to each of our three independent members of the Board of Directors (Yaniv Blumenfeld, Christopher Melton and James C. Potts). Each RSU represents the contingent right to receive one share of our Common Stock. The RSUs vest in full one year after the date of the grant (April 14, 2021).

Additional Compensation

In connection with special committees that the Board of Directors may form from time to time in connection with various transactions or undertakings, the Board of Directors may award additional compensation to the directors, in its discretion, for membership on such special committees. The Board of Directors 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 Table

The 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, 2017.2019. The compensation arrangements for Messrs.Mr. Galvin and Shetty areis disclosed in the Summary Compensation Table set forth in the “Executive Compensation” section of this proxy statement. NeitherThe compensation arrangements for Mr. Shetty with respect to fees paid 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 proxy statement. Mr. Galvin nor Mr. Shetty receiveddid not receive compensation for theirhis services as a director during the year ended December 31, 2017.2019. Mr. Blumenfeld joined our Board in April 2018, and therefore is not includedShetty earned compensation set forth in the table below.

____________chart below for his services as a director in the fourth quarter of 2019, after he no longer served as an executive officer.

(1)     

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”),number of option and stock option awards. See “Note 15 — Stock Optionsawards outstanding (including exercisable and Grants” of the Notes to Consolidated Financial Statements contained in our Annual Report on Form 10-K for the year ended December 31, 2017 for an explanation of the assumptions made in valuing these awards.

(2)     Each of General Ayyarunexercised stock options and Mr. Moore was granted 16,667 options during the year ended December 31, 2017, which vested in four tranches, one at the end of each fiscal quarter following the grant, and had fully vestedunvested RSUs) as of December 31, 2017.

(3)     Mr. Kaufman received no options during 2017. At December 31, 2017, Mr. Kaufman had no outstanding vested option awards, having assigned all prior options to HCI in December 2016.

(4)     Mr. McAvoy received no options during 2017. At December 31, 2017, Mr. McAvoy had no outstanding vested option awards, having assigned all prior options to HCI in December 2016. Due to his interest in HCI, Mr. McAvoy may be considered the beneficial owner of the 33,334 options held by HCI.

(5)     Mr. Melton received no options during 2017. At December 31, 2017, Mr. Melton had 16,667 outstanding vested option awards.

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PROPOSAL 2 — AMENDMENT TO THE SG BLOCKS, INC. STOCK INCENTIVE PLAN

The Incentive Plan was approved by the Board and our stockholders in January 2017. The Incentive Plan, as adopted, reserved 1,500,000 shares of Common Stock2019 for issuance. The Board requests that stockholders approve the Amendment to the Incentive Plan to increase the maximum number of shares of Common Stock available for issuance of awards under the Incentive Plan by 1,000,000 shares, to 2,500,000 shares.

As of the Record Date, 261,610 shares remained available for grant under the Incentive Plan.

Reasons for the Proposed Amendment

The Board unanimously recommends that stockholders vote “FOR” the adoption of the Amendment to the Incentive Plan to increase the number of authorized shares. In making such recommendation, the Board considered a number of factors, including the following:

•        Equity-based compensation awards are a critical element of our overall compensation program. We believe that our long-term incentive compensation program aligns the interests of management, employees and the stockholders to create long-term stockholder value. The amendment to the Incentive Plan will allow us to continue to attract, motivate and retain the Company’s officers, key employees, non-employee directors and consultants.

•        We believe the current amount of shares remaining available for grant under the Incentive Plan may not be sufficient in light of our compensation structure and strategy, and that the additional 1,000,000 shares being sought will ensure that we continue to have a sufficient number of shares authorized and available for future awards issued under the Incentive Plan.

Stockholders are asked to approve the amendment to the Incentive Plan to satisfy Nasdaq requirements relating to stockholder approval of equity compensation and to qualify certain stock options authorized under the Incentive Plan for treatment as incentive stock options under Section 422 of the Internal Revenue Code.

Text of the Amendment

The proposed amendment to the Company’s Incentive Plan is attached hereto asAppendix A.

Summary of the Incentive Plan

The Incentive Plan authorizes the Company to grant equity-based and cash-based incentive compensation in the form of stock options, stock appreciation rights (or “SARs”), restricted shares, restricted share units, other share-based awards and cash-based awards, for the purpose of providing the Company’s employees, officers, consultants and non-employee directors with incentives and rewards for performance. The principal features of the Incentive Plan are summarized below; such summary does not purport to be a complete description of the Incentive Plan.

Types of Awards

The Incentive Plan authorizes the issuance of awards in the form of stock options (which may be either incentive stock options within the meaning of Section 422 of the Internal Revenue Code or nonqualified stock options), SARs, restricted shares, restricted share units, other share-based awards and cash-based awards.

Administration

The Incentive Plan is administered by our Compensation Committee, which, to the extent required by applicable law or stock exchange listing standards, will consist entirely of two or more individuals who are “non-employee directors” within the meaning of Rule 16b-3 under the Securities Exchange Act and “independent directors” within the meaning of the applicable rules of any securities exchange on which the shares are listed. The Compensation Committee can make rules and regulations and establish such procedures for the administration of the Incentive Plan as it deems appropriate and may delegate any of its authority to one or more directors or executive officers of the Company, to the extent permitted by applicable laws. However, our Board reserves the authority to administer and issue awards under the Incentive Plan.

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Eligibility

The Incentive Plan provides for awards to our non-employee directors and to officers, employees and consultants of the Company, except that incentive stock options may only be granted to our employees. It is currently anticipated that approximately ten employees and consultants and six non-employee directors will be eligible for awards under the Plan.

Shares Available

If our stockholders approve the Amendment to the Incentive Plan, the maximum number of shares of our Common Stock that may be issued or transferred with respect to awards under the Incentive Plan will be 2,500,000 shares (all of which may be granted as incentive stock options), subject to adjustment as provided below. Shares issued under the Incentive Plan may include authorized but unissued shares, treasury shares, shares purchased in the open market or a combination of the foregoing.

Shares underlying awards that are settled in cash or that terminate or are forfeited, cancelled or surrendered without the issuance of shares or the release of a substantial risk of forfeiture will again be available for issuance under the Incentive Plan, as will shares tendered in payment of the exercise price of a stock option, shares withheld to satisfy a tax withholding obligation with respect to any award and shares that are repurchased by the Company with stock option proceeds. Shares granted through awards that are granted in assumption of, or in substitution or exchange for, outstanding awards previously granted by an entity acquired directly or indirectly by the Company or with which the Company directly or indirectly combines will not count against the share limit above, except as may be required by the rules and regulations of any applicable stock exchange or trading market.

Non-Employee Director Award Limit

The Incentive Plan provides that the aggregate grant date fair value (computed as of the date of grant in accordance with applicable financial accounting rules) of all awards granted to anyeach non-employee director under the Incentive Plan during any single calendar year, taken together with any cash fees paid to that person during the calendar year, may not exceed $150,000.was as follows:

Stock Options

Subject to the terms and provisions of the Incentive Plan, options to purchase shares may be granted to eligible individuals at any time and from time to time as determined by the Compensation Committee. Options may be granted as incentive stock options (all of the shares available for issuance under the Incentive Plan may be issued pursuant to incentive stock options) or as nonqualified stock options. Subject to the limits provided in the Incentive Plan, the Compensation Committee, or its delegate, determines the number of options granted to each recipient. Each option grant will be evidenced by a stock option agreement that specifies whether the options are intended to be incentive stock options or nonqualified stock options and such additional limitations, terms and conditions as the Compensation Committee may determine.

The exercise price for each option may not be less than 100% of the fair market value of a share on the date of grant. As of the Record Date, the closing price of a share of Common Stock was $4.62.

All options granted under the Incentive Plan will expire no later than 10 years from the date of grant. The method of exercising an option granted under the Incentive Plan will be set forth in the stock option agreement for that particular option and may include payment of cash or cash equivalent, tender of previously acquired shares with a fair market value equal to the exercise price, a cashless exercise (including withholding of shares otherwise deliverable on exercise or a broker-assisted arrangement as permitted by applicable laws), a combination of the foregoing methods or any other method approved by the Compensation Committee in its discretion.

Stock Appreciation Rights

The Compensation Committee in its discretion may grant SARs under the Incentive Plan. A SAR entitles the holder to receive from the Company, upon exercise, an amount equal to the excess, if any, of the aggregate fair market value of a specified number of shares that are the subject of such SAR, over the aggregate exercise price for the underlying shares.

Restricted Shares

Under the Incentive Plan, the Compensation Committee may grant or sell to plan participants shares that are subject to forfeiture and restrictions on transferability. Except for these restrictions and any others imposed by the Compensation Committee, upon the grant of restricted shares, the recipient will have the rights of a stockholder with respect to the restricted shares, including the right to vote the restricted shares and to receive all dividends and other distributions paid or made with respect to the restricted shares. During the applicable restriction period, the recipient may not sell, transfer, pledge, exchange or otherwise encumber the restricted shares. Each restricted shares award will be evidenced by an award agreement that specifies the terms of the award and such additional limitations, terms and conditions, which may include restrictions based upon the achievement of performance objectives, as the Compensation Committee may determine.

Restricted Share Units

Under the Incentive Plan, the Compensation Committee may grant or sell to plan participants restricted share units, which constitute an agreement to deliver shares to the participant in the future at the end of a restriction period and subject to such other terms and conditions as the Compensation Committee may specify. Restricted share units are not shares and do not entitle the recipients to the rights of a stockholder. Restricted share units granted under the Incentive Plan may or may not be subject to performance conditions. Restricted share units will be settled in cash or shares, in an amount based on the fair market value of a share on the settlement date. Each restricted share unit award will be evidenced by an award agreement that specifies the terms of the award and such additional limitations, terms and conditions as the Compensation Committee may determine, which may include restrictions based upon the achievement of performance objectives.

Other Share-Based Awards

The Incentive Plan also provides for grants of other share-based awards under the Incentive Plan, which may include unrestricted shares or time-based or performance-based unit awards that are settled in shares or cash. Each other share-based award will be evidenced by an award agreement that specifies the terms of the award and such additional limitations, terms and conditions as the Compensation Committee may determine.

Dividend Equivalents

Awards may provide the participant with dividend equivalents, on any of a current, deferred or contingent basis, and either in cash or in additional shares, as determined by the Compensation Committee in its sole discretion and set forth in the related award agreement. However, no dividend equivalents shall be granted with respect to shares underlying a stock option or SAR.

Performance Objectives

The plan provides that performance objectives may be established by the Compensation Committee, in its discretion, in connection with any award granted under the Incentive Plan. Performance objectives may relate to performance of the Company or one or more of our subsidiaries, divisions, departments, units, functions, partnerships, joint ventures or minority investments, product lines or products or the performance of an individual participant, and performance objectives may be made relative to the performance of a group of companies or a special index of companies.

For example, without limiting the Compensation Committee’s discretion, performance objectives may be based on the attainment of specified levels of one or more performance criteria, which may include (but shall not be limited to) the following criteria: revenues, weighted average revenue per unit, earnings from operations, operating

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income, earnings before or after interest and taxes, operating income before or after interest and taxes, net income, cash flow, earnings per share, debt to capital ratio, increase in market capitalization, economic value added, return on total capital, return on invested capital, return on equity, return on assets, total return to stockholders, earnings before or after interest, taxes, depreciation, amortization or extraordinary or special items, operating income before or after interest, taxes, depreciation, amortization or extraordinary or special items, return on investment, free cash flow, cash flow return on investment (discounted or otherwise), net cash provided by operations, cash flow in excess of cost of capital, operating margin, profit margin, contribution margin, stock price and/or strategic business criteria consisting of one or more objectives based on meeting specified product development, strategic partnering, research and development, market penetration, geographic business expansion goals, cost targets, customer satisfaction, gross or net additional customers, average customer life, employee satisfaction, management of employment practices and employee benefits, supervision of litigation and information technology and goals relating to acquisitions or divestitures of subsidiaries, affiliates and joint ventures.

Change in Control

In the event of a change in control of the Company, the Compensation Committee, in its sole discretion, may take such actions, if any, as it deems necessary or desirable with respect to any outstanding award, without the consent of any affected participant. Those actions may include, without limitation: (a) acceleration of the vesting, settlement, and/or exercisability of an award; (b) payment of a cash amount in exchange for the cancellation of an award; (c) cancellation of stock options or SARs without any payment if the fair market value per share on the date of the change in control does not exceed the exercise price per share of the applicable award; or (d) issuance of substitute awards that substantially preserve the value, rights and benefits of any affected awards.

For purposes of the Incentive Plan, a change in control generally means (except as otherwise provided in the applicable award agreement): (a) the acquisition of effective control of more than 50% of the voting securities of the Company (other than by means of conversion or exercise of convertible debt or equity securities of the Company); (b) the Company merges into or consolidates with any other person, or any person merges into or consolidates with the Company and, after giving effect to such transaction, the stockholders of the Company immediately prior to such transaction own less than 50% of the aggregate voting power of the Company or the successor entity of such transaction; or (c) the Company sells or transfers all or substantially all of its assets to another person and the stockholders of the Company immediately prior to such transaction own less than 50% of the aggregate voting power of the acquiring entity immediately after the transaction.

Forfeiture of Awards

Awards granted under the Incentive Plan also may be subject to forfeiture or repayment to us as provided pursuant to any compensation recovery policy that we may adopt.

Adjustments

In the event of any equity restructuring, such as a stock dividend, stock split, spin off, rights offering or recapitalization through a large, nonrecurring cash dividend, the Compensation Committee will adjust the number and kind of shares that may be delivered under the Incentive Plan, the individual award limits and, with respect to outstanding awards, the number and kind of shares subject to outstanding awards and the exercise price or other price of shares subject to outstanding awards, to prevent dilution or enlargement of rights. In the event of any other change in corporate capitalization, such as a merger, consolidation or liquidation, the Compensation Committee may, in its discretion, make such equitable adjustment as described in the foregoing sentence to prevent dilution or enlargement of rights. However, unless otherwise determined by the Compensation Committee, we will always round down to a whole number of shares subject to any award. Moreover, in the event of any such transaction or event, the Compensation Committee, in its discretion, may provide in substitution for any or all outstanding awards such alternative consideration (including cash) as it, in good faith, may determine to be equitable in the circumstances and may require in connection therewith the surrender of all awards so replaced.

Transferability

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

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otherwise determined by the Compensation Committee, stock options and SARs will be exercisable during a participant’s lifetime only by him or her or, in the event of the participant’s incapacity, by his or her guardian or legal representative. Any award made under the Incentive Plan may provide that any shares issued as a result of the award will be subject to further restrictions on transfer.

Term of Plan and Amendment

Unless earlier terminated by our Board, the Incentive Plan will expire on October 25, 2026, and no further awards may be made under the Incentive Plan after that date. However, any awards granted under the Incentive Plan prior to its termination will remain outstanding thereafter in accordance with their terms.

Our Board may amend, alter or discontinue the Incentive Plan at any time, with stockholder approval to the extent required by applicable law (including applicable stock exchange rules). No such amendment or termination, however, may adversely affect in any material way any holder of outstanding awards without his or her consent, except for amendments made to cause the plan to comply with applicable law, stock exchange rules or accounting rules, and no award may be amended or otherwise subject to any action that would be treated as a “repricing” of such award, unless such action is approved by our stockholders.

U.S. Federal Income Tax Consequences

The following is a brief summary of the general U.S. federal income tax consequences relating to the Incentive Plan. This summary is based on U.S. federal tax laws and regulations in effect on the date of this Proxy Statement and does not purport to be a complete description of the U.S. federal income tax laws.

Incentive Stock Options. Incentive stock options are intended to qualify for special treatment available under Section 422 of the Internal Revenue Code. A participant who is granted an incentive stock option will not recognize ordinary income at the time of grant. A participant will not recognize ordinary income upon the exercise of an incentive stock option provided that the participant was, without a break in service, an employee of the Company or a subsidiary during the period beginning on the grant date of the option and ending on the date three months prior to the date of exercise (one year prior to the date of exercise if the participant’s employment is terminated due to permanent and total disability).

If the participant does not sell or otherwise dispose of the shares of Common Stock acquired upon the exercise of an incentive stock option within two years from the grant date of the incentive stock option or within one year after he or she receives the shares of Common Stock, then, upon disposition of such shares of Common Stock, any amount recognized in excess of the exercise price will be taxed to the participant as a capital gain. The participant will generally recognize a capital loss to the extent that the amount recognized is less than the exercise price.

If the foregoing holding period requirements are not met, the participant will generally recognize ordinary income at the time of the disposition of the shares of Common Stock in an amount equal to the lesser of (i) the excess of the fair market value of the shares of Common Stock on the date of exercise over the exercise price or (ii) the excess, if any, of the amount recognized upon disposition of the shares of Common Stock over the exercise price. Any amount recognized in excess of the value of the shares of Common Stock on the date of exercise will be capital gain. If the amount recognized is less than the exercise price, the participant generally will recognize a capital loss equal to the excess of the exercise price over the amount recognized upon the disposition of the shares of Common Stock.

The rules described above that generally apply to incentive stock options do not apply when calculating any alternative minimum tax liability. The rules affecting the application of the alternative minimum tax are complex, and their effect depends on individual circumstances, including whether a participant has items of adjustment other than those derived from incentive stock options.

Nonqualified Stock Options. A participant will not recognize ordinary income when a nonqualified stock option is granted. When a nonqualified stock option is exercised, a participant will recognize ordinary income in an amount equal to the excess, if any, of the fair market value of the shares of Common Stock that the participant purchased over the exercise price he or she paid.

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Stock Appreciation Rights. A participant will not recognize ordinary income when a SAR is granted. When a SAR is exercised, the participant will recognize ordinary income equal to the cash and/or the fair market value of shares of Common Stock the participant receives.

Restricted Shares. A participant who has been granted restricted shares will not recognize ordinary income at the time of grant, assuming that the underlying shares of Common Stock are not transferable and that the restrictions create a “substantial risk of forfeiture” for federal income tax purposes and that the participant does not make an election under Section 83(b) of the Internal Revenue Code. Generally, upon the vesting of restricted shares, the participant will recognize ordinary income in an amount equal to the then fair market value of the shares of Common Stock, less any consideration paid for such shares of Common Stock. Any gains or losses recognized by the participant upon disposition of the shares of Common Stock will be treated as capital gains or losses. However, a participant may elect, pursuant to Section 83(b) of the Internal Revenue Code, to have income recognized at the date of grant of a restricted share award equal to the fair market value of the shares of Common Stock on the grant date (less any amount paid for the restricted shares) and to have the applicable capital gain holding period commence as of that date.

Restricted Share Units. A participant generally will not recognize ordinary income when restricted share units are granted. Instead, a participant will recognize ordinary income when the restricted share units are settled in an amount equal to the fair market value of the shares of Common Stock or the cash he or she receives, less any consideration paid.

Other Share-Based Awards. Generally, participants will recognize ordinary income equal to the fair market value of the shares of Common Stock subject to other share-based awards when they receive the shares of Common Stock.

Cash-Based Awards. Generally, a participant will recognize ordinary income when a cash-based award is settled in an amount equal to the cash he or she receives.

Sale of Shares. When a participant sells shares of Common Stock that he or she has received under an award, the participant will generally recognize long-term capital gain or loss if, at the time of the sale, the participant has held the shares of Common Stock for more than one year (or, in the case of a restricted share award, more than one year from the date the restricted shares vested unless the participant made an election pursuant to Section 83(b) of the Internal Revenue Code, described above). If the participant has held the shares of Common Stock for one year or less, the gain or loss will be a short-term capital gain or loss.

Section 409A of the Tax Code. In 2004, the Internal Revenue Code was amended to add Section 409A, which created new rules for amounts deferred under nonqualified deferred compensation plans. Section 409A includes a broad definition of nonqualified deferred compensation plans which may extend to various types of awards granted under the Incentive Plan. If an award is subject to, but fails to comply with, Section 409A, the participant would generally be subject to accelerated income taxation, plus a 20% penalty tax and an interest charge. The Company intends that awards granted under the Incentive Plan will either be exempt from, or will comply with, Section 409A.

Tax Deductibility of Compensation Provided Under the Incentive Plan. When a participant recognizes ordinary compensation income as a result of an award granted under the Incentive Plan, the Company may be permitted to claim a federal income tax deduction for such compensation, subject to various limitations that may apply under applicable law.

For example, Section 162(m) of the Internal Revenue Code disallows the deduction of certain compensation in excess of $1.0 million per year payable to any of the “covered employees” of a public company. The Compensation Committee has granted stock options under the Plan that were intended to be exempt from the $1 million deduction limit of Section 162(m). However, as a result of changes to Section 162(m) pursuant to the Tax Cuts and Jobs Act, which was enacted on December 22, 2017, compensation paid in 2018 or a later fiscal year to one of our covered employees generally will not be deductible by the Company to the extent that it exceeds $1.0 million, except as otherwise permitted by applicable transition rules.

Further, to the extent that compensation provided under the Incentive Plan may be deemed to be contingent upon a change in control of the Company, a portion of such compensation may be non-deductible by the Company under Section 280G of the Internal Revenue Code and may be subject to a 20% excise tax imposed on the recipient of the compensation.

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Plan Benefits. Because it is within the discretion of the Compensation Committee to determine which non-employee directors, employees and consultants will receive awards and the amount and type of awards received, it is not presently possible to determine the number of individuals to whom awards will be made in the future under the Incentive Plan or the amount of the awards.

Registration with the Securities and Exchange Commission. After approval of the Amendment to the Incentive Plan by our stockholders, we intend to file with the SEC a Registration Statement on Form S-8 relating to the additional shares reserved for issuance under the Incentive Plan.

Vote Required

This proposal requires the affirmative vote of a majority of the total number of shares present in person or represented by proxy at the meeting and entitled to vote. Abstentions will count as a vote “against” the plan, and broker non-votes will have no effect on the vote. Shares represented by properly executed proxies will be voted, if specific instructions are not otherwise given, for the approval of the Amendment.

THE BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE AMENDMENT TO THE SG BLOCKS, INC. STOCK INCENTIVE PLAN TO INCREASE THE NUMBER OF SHARES AVAILABLE FOR ISSUANCE THEREUNDER IN AN AMOUNT OF 1,000,000 SHARES, FROM 1,500,000 TO 2,500,000 SHARES.

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EQUITY COMPENSATION PLAN INFORMATION

As of December 31, 2017, the following securities issued under equity compensation were outstanding: