SecProbe.io

CORRESP
1
filename1.htm

Via
EDGAR Submission and Federal Express

April
13, 2017

United
States Securities and Exchange Commission

Division
of Corporation Finance

Attn:
Craig Slivka

100
F. Street, N.E.

Washington,
D.C. 20549

    Re:
    SG
    Blocks, Inc.

    Amendment No. 1 to Registration Statement on Form S-1

    Filed March 15, 2017

    File No. 333-215922

Dear
Mr. Slivka:

SG
Blocks, Inc., a Delaware corporation (the “Company”), has today filed with the Securities and Exchange Commission
(the “Commission”) Pre-Effective Amendment No. 2 to its Registration Statement on Form S-1 (as amended, the
“Registration Statement”).

On
behalf of the Company, we are writing to respond to the comments raised in the letter to the Company, dated March 28, 2017, from
the Staff of the Commission (the “Staff”). The Company’s responses below correspond to the captions and
numbers of those comments (which are reproduced below in italics). Where applicable, we have referenced in the Company’s
responses the section or appropriate page number(s) of the Registration Statement. Capitalized terms used in this letter but not
otherwise defined herein have the meanings assigned to them in the Registration Statement.

Summary
Consolidated Financial and Other Data, page 5

Balance
Sheet Data, page 6

 1. Please
                                         revise the amounts for cash and cash equivalents, for each period presented, to reconcile
                                         to the cash and cash equivalent line item on your audited balance sheets. It does not
                                         appear to us that the balances of your short-term investments line item should be included
                                         in your cash and cash equivalents.

Response:
In response to the Staff’s comment, the Company respectfully advises the Commission that the cash and cash equivalents amount
for each period presented includes a certificate of deposit (“CD”) held in a large national bank. This CD matured
in November 2016 and, in February 2017, was renewed for another 16 months. The CD originally acted as security for a letter of
credit issued to the Company’s payroll and staffing provider. That letter of credit expired in November 2016. Upon further
consideration and in light of our discussion with the Staff, we have added short-term investments to the description of cash and
cash equivalents.

David.Watson@ThompsonHine.com Phone (216) 566-5598 Fax (216) 566-5800

    Thompson
        Hine llp

        Attorneys
        at Law

    3900
        Key Center

        127
        Public Square

        Cleveland,
        Ohio 44114-1291

    www.ThompsonHine.com

        Phone:
        216.566.5500

        Fax:
        216.566.5800

April 13, 2017

Page 2

 2. Please
                                         revise your total long-term debt line item to say “total debt” since the
                                         December 31, 2015 balance includes $5.0 million of convertible debentures which were
                                         classified as a current liability on your audited balance sheets.

Response:
The Company has revised the total long-term debt line item as requested.

Risk
Factors, page 7

The
Company’s ability to continue as a going concern…, page 9

 3. We
                                         note your response to comment 4. Please expand your risk factor to specifically address
                                         that your independent registered public accounting firm issued a going concern opinion
                                         on your audited financial statements for the year ended December 31, 2016.

Response:
The Company has expanded this risk factor to address the going concern opinion issued by the Company’s independent registered
public accounting firm for the year ended December 31, 2016 as requested.

Capitalization,
page 27

 4. It
                                         does not appear that the total of your capitalization is correct. Please revise your
                                         registration statement as appropriate.

Response:
In response to the Staff’s comment, the Company has corrected the total capitalization amount on page 28 to $8,458,749.

Description
of Business, page 30

Environmentally
Responsible Building, page 31

 5. Please
                                         consider revising your registration statement to include the information in your response
                                         to comment 10.

Response:
In response to the Staff’s comment, the Company has revised its disclosure on page 32 to include a more detailed description
of how the SG BlocksTM system contributes towards LEED certification for completed projects.

April
13, 2017

Page 3

Management’s
Discussion and Analysis of Financial Condition and Results . . ., page 35

Results
of Operations, page 36

 6. We
                                         note your response to comment 14; however, it is not appropriate to discuss the combined
                                         financial information of the predecessor and successor below the revenue line. For amounts
                                         below the revenue line, it is appropriate to discuss the historical results of your predecessor
                                         and successor separately. Please revise your MD&A accordingly.

Response:
The Company has revised its discussion in the MD&A to separately address the historical results of the predecessor and successor
entities with respect to all amounts below the revenue line.

 7. Please
                                         expand your narrative to discuss the significant components included in the reorganization
                                         line item for the successor during the six months ended December 31, 2016, as well as
                                         for the predecessor during the six months ended June 30, 2016.

Response:
In response to the Staff’s comment, the Company has provided a description on page 39 with respect to the significant components
included in the reorganization line item for the six months ended December 31, 2016 and the six months ended June 30, 2016.

Critical
Accounting Policies and New Accounting Pronouncements, page 38

Critical
Accounting Policies, page 38

Revenue
Recognition, page 39

 8. We
                                         note your response to comment 16 and your revised disclosure, and have the following
                                         additional comments:

 a. It
                                         appears that engineering services are the only component of your revenue recognized on
                                         the percentage-of-completion basis. Please confirm if our understanding is correct.

Response:
The Company confirms that engineering services are the only component of our revenue recognized on a percentage-of-completion
basis.

 b. You
                                         state that you also supply repurposed containers to your customers and that this revenue
                                         is recognized when delivered. Please tell us what percentage of your block sales revenue
                                         is attributed to the sales of these repurposed containers.

Response:
Approximately 90% of the Company’s revenues are attributable to block sales.

Goodwill,
page 40

 9. Given
                                         the significance of your goodwill balance, please expand your disclosure:

 a. to
                                         address the significant assumptions you used in your goodwill impairment testing; and

 b. to
                                         identify your reporting units, including the number of reporting units that have goodwill.

Response:
In response to the Staff’s comment, the Company has expanded its disclosure on page 42 to include the significant assumptions
we used in our goodwill impairment testing and to identify that we have one reporting unit that has goodwill.

April 13, 2017

Page 4

Changes
in and Disagreements with Accountants on Accounting and Financial . . ., page 42

 10. We
                                         note your response to comment 17 and your disclosure that your registration statement
                                         has been updated to reflect the financial statements for the years ended December 31,
                                         2016 and December 31, 2015. In this regard, please revise your disclosure to remove the
                                         references to December 31, 2014 in the third, sixth, and seventh paragraphs.

Response:
In response to the Staff’s comment, the Company has corrected the disclosure on page 45 to remove all references to the
Company’s financial statements for the year ended December 31, 2014.

Backlog,
page 43

 11. Please
                                         provide us with a basis for your disclosure that your architectural and engineering projects
                                         of $748,000 in progress will translate into $13.4 million in revenue over the next twelve
                                         months.

Response:
As of March 10, 2017, the Company had entered into contractual commitments for architectural and engineering projects in the amount
of $748,000, which projects are all currently in progress. In light of the Company’s historic practice of recognizing revenue
at three distinct phases in the SG BlockTM product life cycle, the Company expects, although it cannot guarantee, future
revenue of $13.4 million from the third and final phase (product sales) of these projects. As such, the $748,000 figure used by
the Company represents “Backlog” as defined under GAAP. Based on the Company’s analysis of the customer projects
currently in process, the Company expects $13.4 million in revenue (or pipeline) to result from the construction and delivery
phase of these projects.

Upon further consideration
and in light of our discussion with the Staff, we have moved all references to the Company’s pipeline into a separate section
within the Description of Business section for purposes of distinguishing pipeline from Backlog. We have also updated the Backlog
figure to $1,004,160 as of April 11, 2017.

Experts,
page 71

 12. In
                                         the first paragraph, please revise the period covering the consolidated financial statements
                                         to say “as of December 31, 2016 and for the six month periods ended June 30, 2016
                                         (Predecessor) and December 31, 2016 (Successor).

Response:
In response to the Staff’s comment, the Company has revised its disclosure with respect to the periods covered on page 74.

April
13, 2017

Page 5

Consolidated
Financial Statements, page F-1

Note
2. Liquidity and Financial Condition, page F-8

 13. We
                                         note your response to comment 19; however it does not appear that you were responsive
                                         to our comment. Please revise your registration statement to provide the disclosures
                                         required by ASC 852-10-50-7(c).

Response:
In response to the Staff’s comment, the Company has added disclosure on page 43 to directly address the disclosures required
by ASC 852-10-50-7(c).

We
hope that the foregoing has been responsive to the Staff’s comments. Should you have any questions relating to any of the
foregoing, please feel free to contact the undersigned at (216) 566-5598.

    Sincerely,

    /s/
    David D. Watson

    David
    D. Watson

    cc:
    Mahesh Shetty