RenX Enterprises Corp.
For the period ended Mar 31, 2025. Filed May 15, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 15, 2025
RENX$0.92+7.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-14.
0001213900-24-098505
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-15.
0001213900-25-044332
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 133 previous paragraphs and 86 current paragraphs.
33 unchanged; 20 reworded; 33 added; 68 removed; 12 previous and 0 current paragraphs rearranged.
Tables are not compared: 31 previous and 30 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (33)
Current report
In February 2025, we entered into a Membership Interest Purchase Agreement (the “Membership Interest Purchase Agreement”) with Resource Group US Holdings LLC (“Resource Group”) and its members to acquire 100% of the membership interests of Resource Group. See “Membership Interest Purchase Agreement” below for additional information about the Membership Interest Purchase Agreement. While the Company has expressed interest in shifting its primary focus to the business conducted by Resource Group—namely, the transformation of targeted organic green waste materials into engineered, environmentally friendly soil and mulch products—there can be no assurance that the acquisition will be consummated as contemplated, or at all. As a result of this potential acquisition, we have begun evaluating a possible strategic realignment of our business by exploring the monetization of certain real estate holdings held directly by the Company and through its joint ventures. These steps remain preliminary and are contingent on the successful closing of the transaction. Discussions with Resource Group remain ongoing, and the parties continue to negotiate outstanding closing deliverables and satisfy customary closing conditions, including the completion of Resource Group’s audit. Following the potential acquisition, we also anticipate reevaluating the projects, technologies, and operations of our real estate-related AI assets; however, no definitive changes to our strategic direction have been made at this time.
Current report
Milk & Honey
Current report
On January 16, 2025, Sugar Phase I LLC (“Sugar Phase 1”), our joint venture with Milk & Honey LLC, a Texas limited liability company (“Milk & Honey”), acquired twenty-two (22) lots in South Texas (the “Property”) for a purchase price of $440,000 for development of its residential development project (the “Project”). In connection with the acquisition of the Property, Sugar Phase 1 entered into a Loan Agreement, dated as of January 16, 2025 (the “Loan Agreement”), for the periodic draw down of up to $1,092,672.75 in principal amount of loan proceeds to be used for the completion of the construction of the Project, the payment of the lender’s expenses related to the Loan Agreement and the payment of expenses related to the acquisition by Sugar Phase I of the Property. The loan bears interest at the greater of the 1-Month Term Secured Overnight Financing Rate plus 5.710%, as adjusted monthly, or 9.740%, includes a loan origination fee of $23,110, matures on March 12, 2026 and is secured by the Property and other related collateral. The loan is also guaranteed by each of us and Properties by Milk & Honey LLC (each a “Guarantor”) pursuant to an Unconditional Guaranty, dated January 16, 2025 (the “Guaranty”). The obligations of each Guarantor are joint and several. The Guaranty may be enforced against any Guarantor without attempting to collect from Sugar Phase 1, any other Guarantor or any other person, and without attempting to enforce lender’s rights in any of the collateral. We, Properties by Milk & Honey LLC and the principals of Properties by Milk & Honey LLC also entered into an Indemnity Agreement, dated January 16, 2025 (the “Indemnity Agreement”), for the benefit of the lender under the Loan Agreement, with respect to the Project’s compliance with Environmental Laws, Hazardous Substances Laws and Building Laws (as such terms are defined in the Indemnity Agreement).
Current report
On March 6, 2025, we entered into a Buyout Agreement (the “Buyout Agreement”) with Milk & Honey, pursuant to which we agreed to sell to Milk & Honey our 60% membership interest (the “Interest”) in Sugar Phase I LLC, for a purchase price of $700,415.24, reflecting amounts contributed and costs incurred by us in connection with the Sugar Phase I project, to be evidenced by a one-year promissory note (the “Note”) in the principal amount of $700,415.24, bearing interest at 10% per annum.
Current report
The Buyout Agreement and Note provide that Interest will be transferred to Milk & Honey incrementally as the Note is repaid. The closing under the Buyout Agreement occurred on March 7, 2025. In connection therewith, Milk & Honey prepaid $120,000.00 of the principal amount due under the Note and the Company transferred 10.27% of our Interest in Sugar Phase I LLC.
Current report
As of May 15, 2025, we continue to work with Milk & Honey on the buyout of our 60% membership interest in Sugar Phase I LLC. Under the Buyout Agreement, which closed on March 6, 2025, Milk & Honey agreed to purchase our interest in the joint venture for a total purchase price of $700,415.24, to be paid pursuant to a promissory note.
Current report
.As of the date of this filing, Milk & Honey has made two payments totaling $385,867.75, resulting in the transfer of an aggregate 41.5% of our original 60% interest. We currently retain an 18.5% interest in Sugar Phase I LLC, with the remaining balance of $172,000 under the note to be paid in future installments.
Current report
We continue to coordinate with Milk & Honey on the remaining payment schedule and ownership transfers.
Current report
Mutual Release Agreement Safe & Green Holdings Corp.
Current report
On January 29, 2025, we entered into a mutual release and discharge agreement (the “Mutual Release”) with Safe & Green Holdings Corp. (“SGBX”) pursuant to which we forgave and released SGBX from its obligations to us under that certain promissory note, dated August 9, 2023, in the principal amount of $908,322.95 and in respect of $815,522 of inter-company advances from us to SGBX (which amounts had been written off our balance sheet as of December 31, 2023) in exchange for SGBX forgiving $394,329 of inter-company debt owed to SGBX by us and for SGBX transferring 276,425 shares (the “Shares”) of our Common Stock owned by SGBX to us. We currently plan to hold the Shares in our treasury. As a result of this agreement, SGBX will no longer be a stockholder of ours.
Current report
Lago Vista Property
Current report
On January 30, 2025, LV Peninsula Holding, LLC (“LV Holding”), a wholly owned subsidiary of ours, entered into a Commercial Contract (the “Contract of Sale”) with Lithe Development Inc., a Texas corporation (“Lithe”), to sell our approximately 60-acre waterfront Lake Travis site in Lago Vista, Texas (the “Lago Vista Site”) owned by us to Lithe for $6.575 million. The Contract of Sale provided that the closing of the sale by LV Holding to Lithe of the Lago Vista Site would occur on or before February 12, 2025 following satisfaction of all required closing conditions. Within four business days of signing the Contract of Sale, Lithe must provide to LV Holding an executed JV contract which includes the loan agreement.
Current report
Lithe has agreed to provide a $1,000 earnest money deposit to evidence its commitment to purchasing the Lago Vista Site. If Lithe breaches the Contract of Sale, LV Holding may terminate the Contract of Sale and receive the earnest deposit as its sole remedy. The Contract of Sale executed on January 30, 2025, supersedes the previously executed Contract of Sale with Lithe, dated April 25, 2024, as amended effective as of July 18, 2024, July 25, 2024 and August 8, 2024, for the Lago Vista Site.
Current report
As of May 15, 2025, LV Holdings terminated the Contract of Sale as we continue to field additional offers from Lithe and other parties. The Company is also in discussions with Stallion Funding, a private real estate finance company, regarding an extension and renegotiation of the Note.
Current report
JDI Cumberland Inlet
Current report
On February 11, 2025, we entered into an Amendment (this “Amendment”) to the Operating Agreement, dated June 24, 2021 for JDI-Cumberland Inlet, LLC, a Georgia limited liability company, by and between us and Jacoby Development Inc., a Georgia corporation, and a Forced Sale Agreement by and between the Company and JDI, pursuant to which JDI-Cumberland acquired our 10% equity interest JDI-Cumberland in exchange for a promissory note (the “Note”) from JDI-Cumberland in the principal amount of $4.5 million. The Note bears interest at the rate of 6.5% per annum, matures on February 6, 2026 and is secured by a pledge of a 10% equity interest in JDI-Cumberland. Payment of the Note is also guaranteed by JDI. This decision to sell our interest is consistent with our decision to strategically realign the business towards engineered soils and logistics.
Current report
Resource Group US Holdings
Current report
On February 25, 2025, we entered into a Membership Interest Purchase Agreement (the “RG Purchase Agreement”) with Resource Group US Holdings LLC, a Florida limited liability company (“Resource Group”), and the members of RG (the “RG Equityholders”) to acquire 100% of the membership interests of Resource Group. Resource Group is a next-generation, full-service organic recycling and compost technology company specializing in transforming targeted organic green waste materials into engineered, environmentally friendly soil and mulch products. In addition, Resource Group offers year-round collection and disposal services through high-capacity grapple trucks, open-top walking floor trailers, and variable-sized containers serving green waste generators, landscaping companies, golf courses, communities, and municipalities. Resource Group works to streamline operations by internalizing transportation services, reducing over-the-road mileage, lowering disposal costs, and maximizing efficiency. The purchase price for the membership interests of Resource Group is $480,000 in cash, the issuance of shares of our restricted common stock (the “RG Closing Shares”) equal to 19% of our outstanding shares of common stock at closing and a convertible note (the “RG Convertible Note”) in an amount to be determined at closing, convertible into shares of our restricted common stock subject to the receipt of our shareholders’ approval post-closing in accordance with Nasdaq rules. The RG Closing Shares and the shares of our common stock to be issuable under the RG Convertible Note will together equal 49% of our outstanding shares of common stock at closing.
Current report
The RG Purchase Agreement provides that our board of directors will be reorganized at closing such that four current directors will remain on the board of directors and three new directors will be appointed to the board of directors by Resource Group. The RG Purchase Agreement further provides that on or prior to the three-month anniversary of the closing, we will use our best efforts to have on file with and approved by the Securities and Exchange Commission an effective registration statement on Form S-1 or any other allowable form providing for the resale by the RG Equityholders on a pro rata basis of the RG Closing Shares issued to them.
Current report
As of May 15, 2025, the Company continues to evaluate and work toward the potential acquisition of Resource Group; however, there can be no assurance that the transaction will be consummated as contemplated, or at all. Discussions remain ongoing, and the parties are engaged in negotiating outstanding deliverables and conditions to closing, including the completion of Resource Group’s audit. While the Company recognizes the potential strategic benefits of integrating Resource Group’s operations, no final decisions have been made regarding any broader shift in the Company’s business focus pending the successful completion of the transaction.
Current report
Stock Divided
Current report
On March 5, 2025, our Board of Directors approved a stock dividend from its treasury (the “Stock Dividend”) of 0.05 shares of our common stock per each outstanding share of our common stock owned, payable on April 22, 2025 to stockholders of record at the close of business on April 7, 2025, such that holders of the common stock received one (1) share of the Company’s common stock for every 20 (twenty) shares held. Cash will be distributed in lieu of fractional shares based on the opening price of a share of common stock on April 8, 2025.
Current report
Arena Amendment
Current report
On April 4, 2025, we entered into an amendment (the “Arena Amendment”) to the Securities Purchase Agreement, dated August 12, 2024, as amended on August 30, 2024 (the “Purchase Agreement”), previously entered into with Arena Special Opportunities Partners II, LP, Arena Special Opportunities (Offshore) Master, LP, Arena Special Opportunities Partners III, LP, and Arena Special Opportunities Fund, LP (collectively, the “Arena Investors”) in connection with the closing of the third tranche of a private placement offering (the “Offering”) with Arena Investors pursuant to which we issued 10% convertible debentures (the “Third Closing Debentures”) in the aggregate principal amount of $555,555 to Arena Investors. The Third Closing Debentures were sold to the Arena Investors for a purchase price of $500,000, representing an original issue discount of ten percent (10%). The Third Closing Debentures provide that so long as no Event of Default (as defined therein) has then occurred, upon the Third Registration Statement Effectiveness Date (as defined therein), the Arena Investors will provide the Company with an additional $500,000 in cash and the then outstanding principal balance owing under the Third Closing Debentures will increase by $555,555.
Current report
On April 4, 2025we entered into a Global Amendment (the “Global Amendment”) with the Arena Investors to the common stock purchase warrants, dated as of August 12, 2024, and the common stock purchase warrants, dated as of October 25, 2024, previously issued to the Arena Investors (collectively, the “Existing Warrants”) to provide that the exercise price of the Existing Warrants shall be equal to the lesser of (i) $.1.6215, and (ii) 92.5% of lowest daily volume weighted average price (VWAP) of our common stock during the ten trading day period immediately preceding the Third Registration Statement Effectiveness Date, subject to adjustment for any stock splits, stock dividends, recapitalizations, and similar events, as well as anti-dilution price protection provisions.
Current report
Marketing and Business Development Expenses
Current report
Marketing and business development expenses for three months ended March 31, 2025 were $83,661 compared to $69,150 for the three months ended March 31, 2024.
Current report
General And Administrative Expenses
Current report
Interest Income
Current report
During the three months ended March 31, 2025 and 2024, we incurred $23,688 and $0 of interest income. This increase of $23,688 resulted from a notes receivable balance during the three months ended March 31, 2025.
Current report
On February 11, 2025, we entered into an Amendment (this “February Amendment”) to the Operating Agreement, dated June 24, 2021 (the “Operating Agreement”), for Cumberland, by and between us and Jacoby Development Inc., a Georgia corporation (“JDI”), and a Forced Sale Agreement by and between the Company and JDI, pursuant to which Cumberland acquired the Company’s 10% equity interest (the “LLC Interest”) in Cumberland in exchange for a promissory note (the “Cumberland Note”) from Cumberland in the principal amount of $4.5 million. The Cumberland Note bears interest at the rate of 6.5% per annum, matures on February 6, 2026 and is secured by a pledge of a 10% equity interest in Cumberland. Payment of the Cumberland Note is also guaranteed by JDI.
Current report
In connection with the Buyout Agreement, we will no longer consolidate the activities of Sugar Phase in the Company’s financial statements. The Company is now not the primary beneficiary of Sugar Phase and will use the equity method to report the activities as an investment in its condensed consolidated financial statements.
Current report
Intangible assets* *— Intangible assets consist of $22,210 of website costs that will be amortized over 5 years, and $1,028,323 of software development costs will be amortized over 3 years.
Removed paragraphs (68)
Previous report
Additionally, we acquired a majority interest in Majestic World Holdings LLC (“MWH”) during the first quarter of 2024. MWH is a prop-tech company that has created an AI Software platform (the “AI Powered Platform”). The AI Powered Platform, which was launched in April 2024, aims to decentralize the real estate marketplace, creating an all-in-one solution that brings banks, institutions, home builders, clients, agents, vendors, gig workers, and insurers into a seamlessly integrated and structured AI-driven environment. In addition, we purchased all of the assets related to the A.I technology known as My Virtual Online Intelligent Assistant (“MyVONIA”). MyVONIA, an advanced artificial intelligence (AI) assistant, utilizes machine learning and natural language processing algorithms to provide users with human-like conversational interactions, tailored to their specific needs to help simplify daily tasks and improve productivity for individuals and businesses.
Previous report
During the third quarter of 2024, we have generated minimal revenue and our primary source of funding has been from sales of debt and equity described in more detail below.
Previous report
St. Mary’s Site
Previous report
On October 14, 2024, the Company entered into a Modification Agreement with Palermo Lender LLC (“Palermo”), effective as of October 2, 2024 (the “Modification Agreement”), to modify the Deed of Trust (the “Security Deed”) securing the Company’s promissory note issued to Palermo in the original principal amount of $148,300.00, as subsequently modified to increase the principal amount to $200,000.00, to extend the maturity date to March 1, 2025 and to change the interest rate from 10.99% with ACH to 11.99% without ACH.
Previous report
On November 13 th, 2024 we entered into an amendment to the Agreement of Sale (the “Second Amendment”) that amends the closing date to November 15 th, 2024 and increases the purchase price to $1,400,000 payable $439,328 in cash and $960,672 by the issuance of a promissory note to us. The promissory note will bear 10% interest per annum, provide for monthly interest payments and mature on March 15 th, 2025 with the option to extend up to three times by paying $10,000 for each extension.
Previous report
Contract for Sale of Lago Vista
Previous report
On October 10, 2024, the Company retained the $45,000 of non-refundable earnest money pursuant to the terms of the Contract of Sale since the Buyer did not perform under their obligations.
Previous report
As of November 13 th, 2024 we are reviewing a Second Commercial Contract (the “Second Contract of Sale”) with Lithe to sell our approximately 60-acre waterfront Lago Vista site in Lake Travis, Texas (the “Lago Vista Property”) to Lithe for $6,500,000. The contract of sale provides for a closing date of December 20 th, 2024 with no due diligence period and a $10,000 non-refundable earnest money deposit.
Previous report
AI Platform Acquisition
Previous report
On October 30 th, 2024, the Company and the members of Majestic World Holdings (“MWH”) entered into an amendment to the Membership Interest Purchase Agreement dated February 7, 2024. The amendment reduced the cash consideration for the purchase of MWH from $500,000.00 to $154,675. Members receiving less than $5,000 were to be paid their share of cash consideration by October 30 th, 2024. Members receiving more than $5,000 shall be 50% of the consideration of each of October 30 th, 2024 and December 1 st, 2024 (the “Payment Date”). The exception is the Vikash Jain who shall be paid over a 12-month term. On the Payment Date the remaining 31.75% interest in MWH will be transferred to the Company. The amendment also stipulates those commercial notes totaling $337,226.29 will be cancelled and deemed satisfied in full and retired.
Previous report
Credit Extension Agreement
Previous report
On November 12 th, 2024 the Company entered into Credit Extension Agreement (the “Extension”) for the agreement with the Bryan Leighton Revocable Trust Dated December 13, 2023. The Extension extends the maturity date from September 1, 2024 to December 15 th, 2024. The Company paid an extension fee of $8,750 dollars and issued an additional 2,500 shares of the Company’s restricted common stock as consideration for the extension. The rate of interest also increased from 12% per annum to 14% per annum retroactive to September 1, 2024.
Previous report
Nasdaq Notice
Previous report
On April 16, 2024, we received a letter from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) stating that we were not in compliance with Nasdaq Listing Rule 5550(b)(1) (the “Rule”) because our stockholders’ equity of $1,887,777 as of December 31, 2023, as reported in our Annual Report on Form 10-K filed with the SEC on April 1, 2024, was below the minimum requirement of $2,500,000. Pursuant to Nasdaq’s Listing Rules, we had 45 calendar days (until May 31, 2024), to submit a plan to evidence compliance with the Rule (a “Compliance Plan”). We submitted a Compliance Plan within the required time. On July 22, 2024, we received a letter from Nasdaq stating that based on the Quarterly Report on Form 10-Q that we filed with the Securities and Exchange Commission for the period ended March 31, 2024, and our submission to the Staff, dated May 29, 2024, it determined that we were in compliance with Nasdaq Listing Rule 5550(b)(1). The letter further stated that if we fail to evidence compliance with Nasdaq Listing Rule 5550(b)(1) upon filing our next periodic report we may be subject to delisting.
Previous report
On August 26, 2024, we received a letter from Nasdaq stating that the Company was not in compliance with the Rule because the stockholders’ equity of the Company of $2,018,263 as of June 30, 2024, as reported in the Company’s Quarterly Report on Form 10-Q filed with the SEC on August 14, 2024, was below the minimum requirement of $2,500,000.
Previous report
Pursuant to Nasdaq’s Listing Rules, we had 45 calendar days (until October 10, 2024), to submit a Compliance Plan. We submitted a Compliance Plan within the required time, although there can be no assurance that the Compliance Plan will be accepted by Nasdaq. If the Compliance Plan is accepted by Nasdaq, we will be granted an extension of up to 180 calendar days from August 26, 2024 to evidence compliance with the Rule. In the event the Compliance Plan is not accepted by Nasdaq, or in the event the Compliance Plan is accepted but we fail to evidence compliance within the extension period, we will have the right to a hearing before Nasdaq’s Hearing Panel. The hearing request would stay any suspension or delisting action pending the conclusion of the hearing process and the expiration of any additional extension period granted by the panel following the hearing.
Previous report
On October 22, 2024, the “Company, received a notice (the “Notification Letter”) from the Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market LLC notifying the Company that the Staff has determined that for 10 consecutive business days, from October 8, 2024 to October 21, 2024, the closing bid price of the Company’s common stock has been at $1.00 per share or greater. Accordingly, the Staff has determined that the Company has regained compliance with Nasdaq Listing Rule 5550(a)(2) and has indicated that the matter is now closed.
Previous report
Sugar Phase I Joint Venture
Previous report
On July 23, 2024, we entered into a Joint Venture Agreement (the “JV Agreement”) with Milk & Honey LLC, a Texas limited liability company (“Milk & Honey”), for the purpose of establishing a joint venture to be conducted under the name of Sugar Phase I LLC (the “Joint Venture”) for the purpose of developing and constructing single-family homes (the “Project”) on five parcels of land located in Edinburg Texas (the “Land”). We and Milk & Honey are each referred to as a “Joint Venturer” and collectively are referred to as the “Joint Venturers.”
Previous report
Pursuant to JV Agreement, we have agreed to contribute capital in the amount of $100,000 to the Joint Venture to be used for the development and construction of single-family homes on the Land, and Milk & Honey has agreed to contribute the Land, valued at $317,500, to the Joint Venture. The Joint Venturers shall make such other capital contributions required to enable the Joint Venture to carry out its purposes as set forth in the JV Agreement as the Joint Venturers may mutually agree upon. The Joint Venturers shall arrange for or provide any financing as may be required by the Joint Venture for carrying out the purposes of the Joint Venture.
Previous report
The JV Agreement provides that we will have a 60% interest and Milk & Honey will have a 40% interest in the Joint Venture. In addition, it provides that net profits of the Joint Venture as they accrue will be distributed 45% to the Company and 55% to Milk & Honey, and that the expenses of the Joint Venture will be paid by the Joint Venturers, in the ratio which the contribution of each Joint Venturer bears to the total contributions.
Previous report
Pursuant to Joint Venture in the event the Joint Venturers are divided on a material issue and cannot agree on the conduct of the business and affairs of Sugar Phase JV, a deadlock shall be deemed to have occurred in which the Company (the “Offerer”) may elect to purchase the Joint Venture interest of the other Joint Venturer (the “Offeree”) at an agreed upon valuation of $1,100,000 or the Company shall make the final decision to break the deadlock.
Previous report
Arena Investors LP Debentures
Previous report
The First Closing Arena Warrants expire five years from its date of issuance. The First Closing Arena Warrants are exercisable, at the option of the holder, at any time, for up to 1,299,242 of shares of the Company’s common stock (64,962 as adjusted for the Stock Split) at an exercise price equal to $0.279 (the “Exercise Price”) ($5.58 as adjusted for the Stock Split), subject to adjustment for any stock splits, stock dividends, recapitalizations, and similar events, as well as anti-dilution price protection provisions that are subject to a floor price as set forth in the First Closing Arena Warrants. The First Closing Arena Warrants provide for cashless exercise under certain circumstances.
Previous report
Under the Arena Purchase Agreement, a closing of the second, third, fourth or fifth tranche together (the “Additional Tranches” may occur subject to the mutual written agreement of Arena Investors and the Company and satisfaction of the closing conditions set forth in the Purchase Agreement on the later (y) the fifth trading day following the First, Second, Third or Fourth Registration Statement Effectiveness Date (or if such day is not a trading day, on the next succeeding trading day) and (z) such date as the outstanding principal balance of the prior Arena Debenture issued is less than $100,000.00, unless the parties mutually agree in writing to consummate the second, third, fourth or fifth closing on a different date, upon which the Company would issue and sell to Arena Investors on the same terms and conditions a second, third, fourth or fifth 10% original issue discount secured convertible debentures each in the principal amount of $2,222,222 (the “Additional Closing Arena Debentures”) and a warrant (the “Additional Closing Warrants”) to purchase a number of shares of the Company’s common stock equal to 20% of the total principal amount of the Additional Closing Arena Debentures divided by 92.5% of the lowest daily VWAP (as defined in the Purchase Agreement) for the common stock during the ten consecutive trading day period ended on the last trading day immediately preceding the closing of the additional tranches, provided the additional Closings are also contingent on the satisfaction of the following additional condition, unless waived mutually by the parties: the median daily turnover of the Company’s common stock on its principal trading market for the thirty consecutive trading day period ended as of the last trading day immediately preceding the date of the proposed second Closing must be greater than $200,000, subject to a floor price.
Previous report
The Additional Closing Arena Debentures would be sold to Arena Investors each for a purchase price of $2,000,000, representing an original issue discount of ten percent (10%). In connection with each closing of the additional tranches, the Company will enter into a registration rights agreement pursuant to which the Company will agree to register the maximum number of shares of the Company’s common stock issuable under the Second, Third, Fourth or Fifth Closing Debentures and the Second, Third, Fourth, or Fifth Closing Arena Warrants as shall be permitted with terms substantially similar as the terms provided in the RRA. The Company also has agreed to reimburse Arena Investors for its legal fees and expenses related to such each closing.
Previous report
Without giving effect to the Exchange Cap discussed below, assuming the Company issued all of the Arena Debentures and converted accrued interest in full on each of the Debentures into its common stock at the floor price (assuming each of such Arena Debentures accrued interest for a period one year), approximately 232,912,128 shares of the Company’s common stock would be issuable upon conversion.
Previous report
The Arena Purchase Agreement prohibits the Company from entering into a Variable Rate Transaction (other than the Arena ELOC described below) until such time as no Arena Debentures remain outstanding.
Previous report
The Company entered into a Security Agreement, dated August 12, 2024 (the “Security Agreement”), with Arena Investors where it agreed to grant Arena Investors a security interest in all of its assets to secure the prompt payment, performance and discharge in full of all of the Company’s obligations under the Arena Debentures. In addition, each of the Company’s subsidiaries entered into a Guaranty Agreement, dated August 12, 2024 (the “Subsidiary Guaranty”), with Arena Investors pursuant to which they agreed to guarantee the prompt payment, performance and discharge in full of all of the Company’s obligations under the Arena Debentures.
Previous report
The Arena Purchase Agreement and the Registration Rights Agreement contain customary representations, warranties, agreements and conditions to completing future sale transactions, indemnification rights and obligations of the parties. Among other things, Arena Investors represented to the Company, that it is an “accredited investor” (as such term is defined in Rule 501(a) of Regulation D under the Securities Act of 1933, as amended (the “Securities Act”)), and the Company sold the securities in reliance upon an exemption from registration contained in Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder.
Previous report
Arena Investors ELOC
Previous report
On August 12, 2024 , the Company also entered into an Purchase Agreement (the “Arena ELOC”) with Arena Business Solutions Global SPC II, LTD (“Arena Global”), pursuant to which the Company shall have the right, but not the obligation, to direct Arena Global to purchase up to $50,000,000.00 (the “Maximum Commitment Amount”) in shares of the Company’s common stock in multiple tranches upon satisfaction of certain terms and conditions contained in the Arena ELOC, which includes, but is not limited to, filing a registration statement with the SEC and registering the resale of any shares sold to Arena Global. Further, under the Arena ELOC and subject to the Maximum Commitment Amount, the Company has the right, but not the obligation, to submit an Advance Notice (as defined in the Arena ELOC) from time to time to Arena Global calculated as follows: (a) if the Advance Notice is received by 8:30 a.m. Eastern Time. the lower of: (i) an amount equal to seventy percent (70%) of the average of the Daily Value Traded (as defined in the Arena ELOC) of the Company’s common stock on the ten trading days immediately preceding an Advance Notice, or (ii) $20 million, (b) if the Advance Notice is received after 8:30 a.m. Eastern Time but prior to 10:30 a.m. Eastern Time, the lower of (i) an amount equal to forty percent (40%) of the average of the Daily Value Traded of the Company’s common stock on the ten trading days immediately preceding an Advance Notice, or (ii) $15 million, and (c) if the Advance Notice is received after 10:30 a.m. Eastern Time but prior to 12:30 p.m. Eastern Time, the lower of (i) an amount equal to twenty percent (20%) of the average of the Daily Value Traded of the Company’s common stock on the ten trading days immediately preceding an Advance Notice, or (ii) $10 million.
Previous report
During the Commitment Period (as defined below), the purchase price to be paid by Arena Investors for the common stock under the EP Agreement will be 96% of the Market Price, defined as the daily volume weighted average price (VWAP) of the Company’s common stock, on the trading day commencing on the date of the Advance Notice.
Previous report
In connection with the Arena ELOC, the Company agreed, among other things, to issue to Arena Global, in two separate tranches, as a commitment fee, that number of shares of its restricted common stock (“Commitment Fee Shares”) equal to (i) with respect to the first tranche (“First Tranche”), 500,000 divided by the simple average of the daily VWAP of the common stock during the five trading days immediately preceding the effectiveness of the initial registration statement (the “Initial Registration Statement”) on which the Commitment Fee Shares are registered (the “First Tranche Price”), promptly the effectiveness of the Registration Statement (the “Initial Issuance”) and (ii) with respect to the second tranche (“Second Tranche”), 250,000 divided by the simple average of the daily VWAP of the Common Shares during the five trading days immediately preceding the three month anniversary (the “Anniversary”) of the effectiveness of the registration statement on which the Commitment Fee Shares are registered (the “Second Tranche Price”), promptly after the Anniversary.
Previous report
The Commitment Fee Shares shall be subject to a true-up after each issuance pursuant to which the Company shall issue to Arena Global common stock having an aggregate dollar value equal to (i) with respect to the First Tranche, 500,000 based on the lower of (A) the First Tranche Price and (B) the lower of (a) the simple average of the three lowest daily intraday trade prices over the twenty trading days after (and not including) the date of effectiveness of the Initial Registration Statement and (b) the closing price on the twentieth trading day after the effectiveness of the Registration Statement, and (ii) with respect to the Second Tranche, 250,000 based on the lower of (A) the Second Tranche Price and (B) the lower of (a) the simple average of the three lowest daily intraday trade prices over the twenty trading days after (and not including) the Anniversary and (b) the closing price on the twentieth trading day after the Anniversary.
Previous report
In connection with the Arena ELOC, the Company agreed to file a registration statement registering the common stock issued or issuable to Arena Global under the Arena ELOC for resale with the SEC within 30 calendar days of the Arena ELOC.
Previous report
The obligation of Arena Global to purchase the Company’s common stock under the Arena ELOC begins on the date of the Arena ELOC, and ends on the earlier of (i) the date on which Arena Global shall have purchased common stock pursuant to the Arena ELOC equal to the Commitment Amount, (ii) thirty six (36) months after the date of the Arena ELOC or (iii) written notice of termination by the Company (the “Commitment Period”). The Arena ELOC contains customary representations, warranties, agreements and conditions to completing future sale transactions, indemnification rights and obligations of the parties. Among other things, Arena Global represented to the Company, that it is an “accredited investor” (as such term is defined in Rule 501(a) of Regulation D under the Securities Act, and the Company will sell the securities in reliance upon an exemption from registration contained in Section 4(a)(2) of the Securities Act and Regulation D promulgated thereunder.
Previous report
On August 30, 2024, the Company and Arena Global entered into an amendment (the “Amendment”) to the purchase agreement dated August 12, 2024 (as amended, the “ELOC Purchase Agreement).
Previous report
The Amendment revises the manner in which the Company’s obligation to issue shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”), to Arena Global as a commitment fee is determined. The Amendment provides that the Company issue or cause to be issued to Arena Global, in two separate tranches, that number of Common Stock equal to (i) with respect to the first tranche (the “First Tranche”): 925,000 shares of Common Stock together with a warrant to purchase 1,075,000 shares of Common Stock, at an exercise price of $0.01 per share, (the “Warrant Shares” and together with the 925,000 shares of Common Stock issued to Arena Global, the “Initial Commitment Fee Shares”) and (ii) with respect to the second tranche (“Second Tranche”), $250,000 divided by the simple average of the daily VWAP (as defined in the ELOC Purchase Agreement) of the Company’s Common Stock during the five (5) trading days immediately preceding the three month anniversary (the “Anniversary”) of the effectiveness of the registration statement on which the Initial Commitment Fee Shares are registered (the “Second Tranche Price”), promptly (but in no event later than one (1) trading day) after the Anniversary (the “Second Tranche Commitment Fee Shares,” and together with the Initial Commitment Fee Shares, the “Commitment Fee Shares”).”
Previous report
The Amendment also has a provision that provides for the issuance of additional shares of Common Stock as commitment fee shares in the event the value of the Initial Commitment Fee Shares is less than $500,000 measured during a specified period and the value of the Second Tranche Commitment Fee Shares is less than $250,000 measured during a specified period.
Showing the first 40 of 68 passages. Open the source sections for the rest.
Reworded paragraphs (20)
Previous wording
As used in this Quarterly Report on Form 10-Q, unless the context requires otherwise, references to the “Company,” “SG DevCo,” “we,” “us,” and “our” refer to Safe and Green Development Corporation and its subsidiaries. The following discussion and analysis of the financial condition and results of our operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes and schedules included elsewhere in this Quarterly Report on Form 10-Q and with our audited condensed consolidated financial statements and notes for the year ended December 31, 2023 included in our Annual Report for the year ended December 31, 2023 filed with the Securities and Exchange Commission on April 1, 2024 (the “2023 10-K”). This discussion, particularly information with respect to our future operations, includes forward-looking statements that involve risks and uncertainties as described under the heading “Special Note regarding forward-looking statements” in this Quarterly Report on Form10-Q. You should review the disclosure under the heading “Risk Factors” in this Quarterly Report on Form 10-Q and the 2023 10-K for a discussion for important factors that could cause our actual results to differ materially from those anticipated in these forward-looking statements.
Current wording
As used in this Quarterly Report on Form 10-Q, unless the context requires otherwise, references to the “Company,” “SG DevCo,” “we,” “us,” and “our” refer to Safe and Green Development Corporation and its subsidiaries. The following discussion and analysis of the financial condition and results of our operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes and schedules included elsewhere in this Quarterly Report on Form 10-Q and with our audited consolidated financial statements for the year ended December 31, 2024 and 2023 and the accompanying notes, which are included in our Annual Report for the year ended December 31, 2024 filed with the Securities and Exchange Commission on March 31, 2025 (the “2024 10-K”). This discussion, particularly information with respect to our future operations, includes forward-looking statements that involve risks and uncertainties as described under the heading “Special Note Regarding Forward-Looking Statements” in this Quarterly Report on Form10-Q. You should review the disclosure under the heading “Risk Factors” in this Quarterly Report on Form 10-Q and the 2024 10-K for a discussion for important factors that could cause our actual results to differ materially from those anticipated in these forward-looking statements.
Previous wording
We were formed in 2021 by Safe & Green Holdings Corp. (“SG Holdings”) for the purpose of real property development utilizing SG Holdings’ proprietary technologies and SG Holdings’ manufacturing facilities. Our current business focus is primarily on the direct acquisition and indirect investment in properties nationally that will be further developed in the future into green single or multi-family projects. We are focused on increasing our presence in markets with favorable job formation and a favorable demand/supply ratio for multifamily and/or single-family housing. Our business model is flexible and we anticipate developing properties on our own and also through joint ventures in which we partner with third-party equity investors or other developers. To date, we have generated minimal revenue and our activities have consisted mostly of the acquisition and entitlement of three properties, an investment in two entities that have acquired two properties to be further developed, entered into three joint ventures with the intention of developing properties in the Texas market and have invested in real-estate related AI assets and entities, as further described below.
Current wording
We were formed in 2021 by Safe & Green Holdings Corp. (“SG Holdings”) for the purpose of real property development utilizing SG Holdings’ proprietary technologies and SG Holdings’ manufacturing facilities. During 2023 and 2024, our business focus was primarily on the direct acquisition and indirect investment in properties nationally to be developed in the future into green single or multi-family projects and increasing our presence in markets with favorable job formation and a favorable demand/supply ratio for multifamily and/or single-family housing. To date, we have generated minimal revenue and our real estate development related activities have consisted mostly of the acquisition and entitlement of three properties, an investment in two entities that have acquired two properties to be further developed, entry into three joint ventures with the intention of developing properties in the Texas market and an investment in real-estate related artificial intelligence (“AI”) assets and entities, as further described below.
Previous wording
In January 2024, we announced that we would strategically look to monetize our real estate holdings throughout 2024 by identifying markets where our land may have increased in value, as demonstrated by third-party appraisals. In connection with this strategy, we have entered into agreements to sell our St. Mary’s site and our Lago Vista site. Additionally, we expect to subdivide our McLean property into buildable single family lots that can subsequently be sold to developers or developed internally.
Current wording
In January 2024, we announced that we would strategically look to monetize our real estate holdings throughout 2024 by identifying markets where our land may have increased in value, as demonstrated by third-party appraisals and selling those properties. In connection with this strategy, we have entered into agreements to sell our St. Mary’s site and our Lago Vista site described in more detail below. Additionally, we expect to subdivide our McLean property into buildable single family lots that can subsequently be sold to developers or developed internally. We intend to develop the properties that we own and invest the proceeds of sales of our securities and future financings, both at the corporate and project level, and/or sale proceeds from properties that are sold. However, our ability to develop any properties will be subject to our ability to raise capital either through the sale of equity or by incurring debt for which there can be no assurance.’
Previous wording
Recently, we have entered two joint ventures with Milk & Honey LLC , Sugar Phase I LLC and Hacienda Olivia Phase II LLC, with the intention of developing green single-family homes in the Southern Texas market. To date, we have started construction on five single family homes in the Sugar Phase joint venture. The homes are expected to be delivered by the first quarter of 2025. We are currently developing 57 single family lots through our Hacienda Olivia joint venture and expect to begin vertical construction on those lots in the second quarter of 2025. We have also entered into a joint venture named Pulga Internacional with the intention of developing an eco-friendly commercial retail outlet.
Current wording
In August 2024, we entered into joint ventures with Milk & Honey LLC, Sugar Phase I LLC and Hacienda Olivia Phase II LLC, with the intention of developing green single-family homes in the Southern Texas market. To date, we have started construction on five single family homes in the Sugar Phase joint venture. The homes were delivered during the first quarter of 2025. Additionally, we were developing 57 single family lots through our Hacienda Olivia. We have also entered into a joint venture named Pulga Internacional with the intention of developing an eco-friendly commercial retail outlet.
Previous wording
The Second Closing Debentures were sold to the Arena Investors for a purchase price of $2,000,000, representing an original issue discount of ten percent (10%). The Second Closing Debentures mature eighteen months from their date of issuance and bears interest at a rate of 10% per annum paid-in-kind (“PIK Interest”), unless there is an event of default under the applicable Second Closing Debenture. The PIK Interest shall be added to the outstanding principal amount of the applicable Second Closing Debenture on a monthly basis as additional principal obligations thereunder for all purposes thereof (including the accrual of interest thereon at the rates applicable to the principal amount generally). Each Second Closing Debenture is convertible, at the option of the holder, at any time, into such number of shares of our Common Stock equal to the principal amount of such Second Closing Debenture plus all accrued and unpaid interest at a conversion price equal to the lesser of (i) $3.48, and (ii) 92.5% of lowest daily volume weighted average price (VWAP) of our Common Stock during the ten trading day period ending on such conversion date (the “Conversion Price”), subject to adjustment for any stock splits, stock dividends, recapitalizations and similar events, as well as anti-dilution price protection provisions, and subject to a floor price of $0.90 (subject to proportional adjustment for stock splits). Based upon the floor price, the maximum number of shares issuable upon conversion of the Second Closing Debentures is 3,268,197 shares of Common Stock. In connection with the closing of the second tranche, the Company reimbursed Arena Investors $10,000 for its legal fees and expenses.
Current wording
The Third Closing Debentures mature eighteen months from their date of issuance and bears interest at a rate of 10% per annum paid-in-kind (“PIK Interest”), unless there is an event of default under the applicable Third Closing Debenture. The PIK Interest shall be added to the outstanding principal amount of the applicable Third Closing Debenture on a monthly basis as additional principal obligations thereunder for all purposes thereof (including the accrual of interest thereon at the rates applicable to the principal amount generally). Each Third Closing Debenture is convertible, at the option of the holder, at any time, into such number of shares of our common stock equal to the principal amount of such Third Closing Debenture plus all accrued and unpaid interest at a conversion price equal to the lesser of (i) $1.6215, and (ii) 92.5% of lowest daily volume weighted average price (VWAP) of our common stock during the ten trading day period ending on such conversion date (the “Conversion Price”), subject to adjustment for any stock splits, stock dividends, recapitalizations and similar events, as well as anti-dilution price protection provisions, and subject to a floor price of $0.90 (subject to proportional adjustment for stock splits). Based upon the floor price, the maximum number of shares issuable upon conversion of the Third Closing Debentures issued on April 4, 2025, is 461,043 shares of Common Stock. In connection with the closing of the third tranche we reimbursed Arena Investors $20,000.00 for its legal fees and expenses.
Previous wording
The Second Closing Warrants expire five years from their date of issuance. The Second Closing Warrants are exercisable, at the option of the holder, at any time, for up to 170,892 shares of the Company’s Common Stock at an exercise price equal to $3.476 (the “Exercise Price”), subject to adjustment for any stock splits, stock dividends, recapitalizations, and similar events, as well as anti-dilution price protection provisions. The Second Closing Warrants provide for cashless exercise under certain circumstances.
Current wording
Pursuant to the Arena Amendment, we agreed to issue to the Arena Investors common stock purchase warrants (the “Third Closing Warrants”) on each applicable closing date to purchase a number of shares of our common stock (the “Warrant Shares”) equal to 20% (or in the case of any warrant issued on April 4, 2025, 50%) of the total principal amount of the related Third Closing Debentures purchased by the Arena Investors on such closing date divided by 92.5% of the lowest daily VWAP of our common stock during the ten trading day period immediately preceding such closing date, subject to adjustment upon the occurrence of certain events as set forth in such Third Closing Warrants. On April 4, 2025, we issued to the Arena Investors Third Closing Warrants to purchase 461,043 Warrant Shares. The Third Closing Warrants expire five years from their date of issuance. The Third Closing Warrants are exercisable, at the option of the holder, at any time, at an exercise price (the “Exercise Price”) equal to the lesser of (i) $1.6215, and (ii) 92.5% of lowest daily volume weighted average price (VWAP) of our common stock during the ten trading day period immediately preceding the Third Registration Statement Effectiveness Date (as defined therein), subject to adjustment for any stock splits, stock dividends, recapitalizations, and similar events, as well as anti-dilution price protection provisions. The Third Closing Warrants provide for cashless exercise under certain circumstances.
Previous wording
The Company entered into a Registration Rights Agreement, dated August 12, 2024 (the “RRA”), with Arena Investors where it agreed to file with the SEC an initial registration statement within 30 days to register the maximum number of Registrable Securities (as defined in the RRA) issuable under the First Closing Arena Debentures and the First Closing Arena Warrants as shall be permitted to be included thereon in accordance with applicable SEC rules and to use its reasonable best efforts to have the registration statement declared effective by the SEC no later than the “First Registration Statement Effectiveness Date”, which is defined as the 30th calendar day following the First Closing Date (or, in the event of a “full review” by the SEC, no later than the 120th calendar day following the First Closing Date); provided, however, that if the registration statement will not be reviewed or is no longer subject to further review and comments, the First Registration Statement Effectiveness Date will be the fifth trading day following the date on which the Company is so notified if such date precedes the date otherwise required above.
Current wording
On April 4, 2025, we entered into a Registration Rights Agreement (the “RRA”) with the Arena Investors that provides that we will file with the Securities and Exchange Commission (the “SEC”) a registration statement to register the maximum number of Registrable Securities (as defined in the RRA) issuable under the Third Closing Debentures and the Third Closing Warrants as shall be permitted to be included thereon in accordance with applicable SEC rules. The Arena Amendment provides that we will use our reasonable best efforts to have the registration statement declared effective by the SEC no later than the “Third Registration Statement Effectiveness Date,” which is defined in the Arena Amendment as the 75th calendar day following April 4, 2025 (or, in the event of a “full review” by the SEC, no later than the 150th calendar day following April 4, 2025); provided, however, that if the registration statement will not be reviewed or is no longer subject to further review and comments, the Third Registration Statement Effectiveness Date will be the fifth trading day following the date on which the Company is so notified if such date precedes the date otherwise required above.
Previous wording
During the three months ended September 30, 2024 we generated revenues from commissions on residential real estate purchases and sale transactions amounting to $81,210. There were no sales for the three months ended September 30, 2023. This was due to the new lines of business entered into during 2024.
Current wording
During the three months ended March 31, 2025 we generated revenues from commissions on residential real estate purchases and sale transactions amounting to $18,170. For the three months ended March 31, 2024 we generated revenues from commissions on residential real estate purchases and sale transactions amounting to $49,816. This decrease of $31,646 resulted from a lower amount of real estate closings during the three months ended March 31, 2025.
Previous wording
Payroll and related expenses for the three months ended September 30, 2024 were $521,305 compared to $228,779 for the three months ended September 30, 2023. This increase of $292,526 in expenses resulted primarily from stock-based compensation of $58,222 being recognized during the three months ended September 30, 2024, as well as increased salaries during 2024.
Current wording
Payroll and related expenses for the three months ended March 31, 2025 were $451,451 compared to $2,016,087 for the three months ended March 31, 2024. This decrease of $1,564,636 in expenses resulted primarily from stock-based compensation of $1,746,640 being recognized during the three months ended March 31, 2024.
Previous wording
Other operating expenses for three months ended September 30, 2024 were $950,668 compared to $355,208 for the three months ended September 30, 2023. During the three months ended September 30, 2023, these expenses were primarily allocated to us by SG Holdings and consisted of legal fees, professional fees, rent, office expenses, insurance and other general and administrative expenses. During the three months ended September 30, 2024, these expenses were primarily professional and consulting fees. This increase of $595,460 resulted primarily from the increased cost of professional fees in relation of being a public company.
Current wording
General and administrative expenses for three months ended March 31, 2025 were $735,120 compared to $466,254 for the three months ended March 31, 2024. This increase of $268,866 resulted primarily from the increased cost of professional fees in relation of being a public company, as well as an increase in professional fees from various activities.
Previous wording
During the three months ended September 30, 2024 and 2023, we incurred $951,239 and $339,877 of interest expense. This increase resulted from an increase in the balance of our notes payable.
Current wording
During the three months ended March 31, 2025 and 2024, we incurred $954,648 and $565,996 of interest expense. This increase of $388,652 resulted from an increase in the balance of our notes payable.
Previous wording
We have generated limited revenue and have incurred significant net losses in each year since inception. For the nine months ended September 30, 2024 and the year ended December 31, 2023 we incurred a net loss of $7,378,464 and $4,200,541, respectively. We expect to incur increasing losses in the future when we commence development of our McLean Property. As of September 30, 2024 and December 31, 2023, we had cash of $13,707 and $3,236, respectively. Prior to us becoming a public company, our operations were primarily funded through advances from SG Holdings and we had been largely dependent upon SG Holdings for funding. We have recently funded our operations through bridge note financing, project level financing, and the issuance of our equity and debt securities. We intend to develop the properties that we own from the proceeds of sales of our securities to Arena Investors LP and future financings, both at the corporate and project level, and/or sale proceeds from properties that are sold. Additional financing will be required to continue operations, which may not be available at acceptable terms, if at all. If we are unable to obtain additional funding when it becomes necessary, we would likely be forced to delay, reduce, or terminate some or all of our operating activities, including selling some of our properties. There is no guarantee we will be successful in raising capital outside of our current sources, we also have amounts owed to us from SG Holdings for advances we made to them in the amount of $1,720,844, the collectability of which is uncertain. These and other factors raise substantial doubt about our ability to continue as a going concern.
Current wording
We have generated limited revenue and have incurred significant net losses in each year since inception. For the three months ended March 31, 2025, we incurred a net loss of $2,179,993 as compared to a net loss of $3,067,671 for the three months ended March 31, 2024. We expect to incur increasing losses in the future. As of March 31, 2025 and December 31, 2024, we had cash of $17,540 and $296,202, respectively. We have recently funded our operations through bridge note financing, project level financing, and the issuance of our equity and debt securities. Prior to us becoming a public company, our operations were primarily been funded through advances from SG Holdings and we had been largely dependent upon SG Holdings for funding. We have recently funded our operations through bridge note financing, project level financing, and the issuance of our equity and debt securities. We intend to finance Resource Group’s expansion and our operations from the proceeds of sales of our securities to Arena Investors LP and future financings, both at the corporate and project level, and/or sale proceeds from properties that are sold.. Additional financing will be required to continue operations, which may not be available at acceptable terms, if at all. If we are unable to obtain additional funding when it becomes necessary, we would likely be forced to delay, reduce, or terminate some or all of our operating activities, including selling some of our properties. There is no guarantee we will be successful in raising capital outside of our current sources. These and other factors raise substantial doubt about our ability to continue as a going concern.
Previous wording
***Arena ELOC.***On August 12, 2024 , the Company also entered into an Purchase Agreement (the “Arena ELOC”) with Arena Business Solutions Global SPC II, LTD (“Arena Global”), pursuant to which the Company shall have the right, but not the obligation, to direct Arena Global to purchase up to $50,000,000.00 (the “Maximum Commitment Amount”) in shares of the Company’s common stock in multiple tranches upon satisfaction of certain terms and conditions contained in the Arena ELOC, which includes, but is not limited to, filing a registration statement with the SEC and registering the resale of any shares sold to Arena Global. Accordingly, we currently have the right, but not the obligation, to direct Arena Global to purchase up to $50,000,000.00 of our common stock.
Current wording
***Arena ELOC.***On August 12, 2024 , we also entered into an Purchase Agreement (the “Arena ELOC”) with Arena Business Solutions Global SPC II, LTD (“Arena Global”), pursuant to which the Company shall have the right, but not the obligation, to direct Arena Global to purchase up to $50,000,000.00 (the “Maximum Commitment Amount”) in shares of the Company’s common stock in multiple tranches upon satisfaction of certain terms and conditions contained in the Arena ELOC, which includes, but is not limited to, filing a registration statement with the SEC and registering the resale of any shares sold to Arena Global. Accordingly, we currently have the right, but not the obligation, to direct Arena Global to purchase up to $50,000,000.00 of our common stock.
Previous wording
Operating activities used net cash of $1,545,078 during the nine months ended September 30, 2024, and used cash of $4,553,095 during the nine months ended September 30, 2023. Cash used in operating activities decreased by $3,008,017 due to an increase of net loss of $4,762,499, depreciation of $1,724, increase in amortization of debt issuance cost of $1,450,127, stock based compensation of $1,990,170, common stock for services of $784,692, increase change in prepaid assets of $788,583, a decrease in change in accounts payable of $530,324 and an increase in due to affiliates of $2,010,627.
Current wording
Operating activities used net cash of $551,874 during the three months ended March 31, 2025, and used cash of $693,778 during the nine months ended March 31, 2024. Cash used in operating activities decreased by $172,636 due to an decrease of net loss of $1,040,176, depreciation of $204, increase in amortization of debt issuance cost of $286,499, decrease in stock based compensation of $1,658,140, common stock for services of $322,871, increase change in prepaid assets and other current assets of $92,235, and an increase in change in accounts payable of $545,349.
Previous wording
Investing activities used net cash of $240,551 during the nine months ended September 30, 2024, and $81,819 net cash during the nine months ended September 30, 2023, which is a decrease in cash used of $158,732. This change results from a decrease in assets held for sale of $3,535, an increase of cash acquired from a business combination of $1,082, increase in intangible assets of $187,521, decrease in the purchase of computers and software of $2,803, an increase in project pre-development costs of $30,900, and a decrease in equity-based investments of $42,662.
Current wording
Investing activities used net cash of $10,000 during the three months ended March 31, 2025, and $87,799 net cash during the three months ended March 31, 2024, which is a decrease in cash used of $77,799. This change results from, a decrease of cash acquired from a business combination of $1,082, decrease in intangible assets of $20,731, decrease in the purchase of computers and software of $32,000, an increase in project pre-development costs of $26,150.
Previous wording
Cash provided from financing activities was $1,796,100 during the nine months ended September 30, 2024, which resulted from $1,509,852 debt issuance costs paid, increased by $3,081,489 proceeds from short-term note payable, $526,256 in repayments of short-term notes payable and $750,719 from issuance of common stock. Cash provided from financing activities was $4,667,559 during the nine months ended September 30, 2023, which resulted from $441,825 debt issuance costs paid, increased by $6,650,000 proceeds from short-term note payable, decreased by $2,500,000 from issuance of common stock, and increased by $959,384 contributions from SG Holdings.
Current wording
Cash provided from financing activities was $283,211 during the three months ended March 31, 2025, which resulted from 232,784 debt issuance costs paid, increased by $1,094,400 proceeds from short-term note payable and $578,405 in repayments of short-term notes payable. Cash provided from financing activities was $855,878 during the three months ended March 31, 2024, which resulted from $321,117 debt issuance costs paid, increased by $651,700 proceeds from short-term note payable, and $525,295 from issuance of common stock.
Previous wording
Our significant accounting policies are discussed in “Note 2— Summary of Significant Accounting Policies” of the notes to our financial statements for the nine months ended September 30, 2024 and the year ended December 31, 2023 included elsewhere in this Form 10-Q. We believe that the following accounting policies are the most critical in fully understanding and evaluating our reported financial results.
Current wording
Our significant accounting policies are discussed in “Note 2— Summary of Significant Accounting Policies” of the notes to our financial statements for the three months ended March 31, 2025 and the year ended December 31, 2024 included elsewhere in this Form 10-Q. We believe that the following accounting policies are the most critical in fully understanding and evaluating our reported financial results.
Previous wording
Investment Entities – On May 31, 2021, we agreed to contribute $600,000 to acquire a 50% membership interest in Norman Berry II Owner LLC (“Norman Berry”). We contributed $350,329 and $114,433 of the initial $600,000 in the second quarter and third quarter of 2021 respectively, with the remaining $135,183 funded in the fourth quarter of 2021. The purpose of Norman Berry is to develop and provide affordable housing in the Atlanta, Georgia metropolitan area. We have determined we are not the primary beneficiary of Norman Berry and thus will not consolidate the activities in our financial statements. We use the equity method to report the activities as an investment in our financial statements.
Current wording
Investment Entities— On May 31, 2021, we agreed to contribute $600,000 to acquire a 50% membership interest in Norman Berry II Owner LLC (“Norman Berry”). We contributed $350,329 and $114,433 of the initial $600,000 in the second quarter and third quarter of 2021 respectively, with the remaining $135,183 funded in the fourth quarter of 2021. The purpose of Norman Berry is to develop and provide affordable housing in the Atlanta, Georgia metropolitan area. The Company has determined it is not the primary beneficiary of Norman Berry and thus will not consolidate the activities in its financial statements. We will use the equity method to report the activities as an investment in its condensed consolidated financial statements.
Previous wording
On June 24, 2021, we entered into an operating agreement with Jacoby Development for a 10% non-dilutable equity interest for JDI-Cumberland Inlet, LLC (“Cumberland”). We contributed $3,000,000 for our 10% equity interest. The purpose of Cumberland is to develop a waterfront parcel in a mixed-use destination community. We have determined we are not the primary beneficiary of Cumberland and thus will not consolidate the activities in our financial statements. We use the equity method to report the activities as an investment in our financial statements.
Current wording
On June 24, 2021, we entered into an operating agreement with Jacoby Development for a 10% non-dilutable equity interest for JDI-Cumberland Inlet, LLC (“Cumberland”). We contributed $3,000,000 for its 10% equity interest. During the year ended December 31, 2023, we contributed an additional $25,000. The purpose of Cumberland is to develop a waterfront parcel in a mixed-use destination community. We have determined we are not the primary beneficiary of Cumberland and thus will not consolidate the activities in its condensed consolidated financial statements. We will use the equity method to report the activities as an investment in its condensed consolidated financial statements.
Previous wording
During the nine months ended September 30, 2024 and the year ended December 31, 2023, Norman Berry and Cumberland did not have any material earnings or losses as the investments are in development. In addition, management believes there was no impairment as of September 30, 2024.
Current wording
During the three months ended March 31, 2025 and 2024, Norman Berry and Sugar Phase did not have any material earnings or losses as the investments are in development. In addition, management believes there was no impairment as of March 31, 2025 and December 31, 2024.
Rearranged previous paragraphs (12)
Previous report — wording carried elsewhere
We intend to develop the properties that we own and invest in from the proceeds of sales of our securities and future financings, both at the corporate and project level, and/or sale proceeds from properties that are sold. However, our ability to develop any properties will be subject to our ability to raise capital either through the sale of equity or by incurring debt.
Previous report — wording carried elsewhere
On August 12, 2024, the Company entered into a Securities Purchase Agreement, dated August 12, 2024 (the “Arena Purchase Agreement”) with the purchasers named therein (“Arena Investors”), related to a private placement offering (the “Arena Offering”) of up to five tranches of secured convertible debentures to Arena Investors in the aggregate principal amount of $10,277,777 (the “Arena Debentures”) together with warrants to purchase a number of shares of the Company’s common stock equal to 20% of the total principal amount of the Arena Debentures sold divided by 92.5% of the lowest daily VWAP (as defined in the Purchase Agreement) for the Company’s common stock during the ten consecutive trading day period preceding the respective closing dates (the “Arena Warrants”).
Previous report — wording carried elsewhere
The First Closing Arena Debentures mature eighteen months from their date of issuance and bears interest at a rate of 0% per annum. The First Closing Arena Debentures are convertible, at the option of the holder, at any time, into such number of shares of common stock of the Company equal to the principal amount of the First Closing Arena Debentures plus all accrued and unpaid interest at a conversion price equal to the lesser of (i) $0.279 ($5.58 as adjusted for the Stock Split), and (ii) 92.5% of lowest daily volume weighted average price (VWAP) of the Company’s common stock during the ten trading day period ending on such conversion date (the “Conversion Price”), subject to adjustment for any stock splits, stock dividends, recapitalizations and similar events, as well as anti-dilution price protection provisions, and subject to a floor price of $0.04854 ($0.9704 as adjusted for the Stock Split).
Previous report — wording carried elsewhere
Pursuant to the Amendment, the First Closing Debentures bear interest at a rate of 10% per annum paid-in-kind (“PIK Interest”) unless there is an event of default under the applicable First Closing Debenture. The PIK Interest shall be added to the outstanding principal amount of the applicable First Closing Debenture on a monthly basis as additional principal obligations thereunder for all purposes thereof (including the accrual of interest thereon at the rates applicable to the principal amount generally). Upon the occurrence and during the continuance of an event of default under the applicable First Closing Debenture, interest shall accrue on the outstanding principal amount of such First Closing Debenture at the rate of two percent (2%) per month and such default interest shall be due and payable monthly in arrears in cash on the first of each month following the occurrence of any event of default for default interest accrued through the last day of the prior month.
Previous report — wording carried elsewhere
The Company entered into a Registration Rights Agreement, dated October 25, 2024 (the “RRA”), with the Arena Investors where it agreed to file with the Securities and Exchange Commission (the “SEC”) an initial registration statement within 30 days to register the maximum number of Registrable Securities (as defined in the RRA) issuable under the Second Closing Debentures and the Second Closing Warrants as shall be permitted to be included thereon in accordance with applicable SEC rules and to use its reasonable best efforts to have the registration statement declared effective by the SEC no later than the “Second Registration Statement Effectiveness Date”, which is defined in the Purchase Agreement as the 30th calendar day following the Second Closing Date (or, in the event of a “full review” by the SEC, no later than the 120th calendar day following the Second Closing Date); provided, however, that if the registration statement will not be reviewed or is no longer subject to further review and comments, the Second Registration Statement Effectiveness Date will be the fifth trading day following the date on which the Company is so notified if such date precedes the date otherwise required above.
Previous report — wording carried elsewhere
Results of Operations for the Nine Months Ended September 30, 2024 and Nine Months Ended September 30, 2023
Previous report — wording carried elsewhere
The following table sets forth, for the periods indicated, the dollar value represented by certain items in our Statements of Operations:
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During the nine months ended September 30, 2024 we generated revenues from commissions on residential real estate purchases and sale transactions amounting to $173,188. There were no sales for the nine months ended September 30, 2023. This was due to the new lines of business entered into during 2024.
Previous report — wording carried elsewhere
During the nine months ended September 30, 2024 and 2023, we incurred $2,583,053 and $814,922 of interest expense. This increase resulted from an increase in the balance of our notes payable.
Previous report — wording carried elsewhere
A 100% valuation allowance was provided against the deferred tax asset consisting of available net operating loss carry forwards and, accordingly, no income tax benefit was provided.
Previous report — wording carried elsewhere
The closing of the first tranche was consummated on August 12, 2024 (the “First Closing Date”) and the Company issued to Arena Investors 10% original issue discount secured convertible debentures in principal amount of $1,388,888.75 (the “First Closing Arena Debentures”) and a warrant (the “First Closing Arena Warrants”) to purchase up to 1,299,242 shares of the Company’s common stock (64,962 as adjusted for the Stock Split). The First Closing Arena Debentures were sold to Arena Investors for a purchase price of $1,250,000, representing an original issue discount of ten percent (10%). In connection with the closing, the Company reimbursed Arena Investors $55,000 for its legal fees and expenses and placed $250,000 in escrow, to be released to the Company upon the First Registration Statement Effectiveness Date (as defined in the Purchase Agreement).
Previous report — wording carried elsewhere
On October 25, 2024, Safe and Green Development Corporation (the “Company”) closed the second tranche of its private placement offering (the “Offering”) with Arena Special Opportunities Partners II, LP, Arena Special Opportunities (Offshore) Master, LP, Arena Special Opportunities Partners III, LP, and Arena Special Opportunities Fund, LP (collectively, the “Arena Investors”) under a Securities Purchase Agreement, dated August 12, 2024, as amended on August 30, 2024 (the “Purchase Agreement”), between the Company and the Arena Investors, pursuant to which the Company issued 10% convertible debentures (the “Second Closing Debentures”) in the aggregate principal amount of Two Million Two Hundred Twenty-Two Thousand Two Hundred and Twenty-Two Dollars ($2,222,222) to the Arena Investors and warrants (the “Second Closing Warrants”) to purchase up to 170,892 shares (the “Warrant Shares”) of the Company’s common stock, $0.001 par value per share (the “Common Stock”).