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MIAMI - Safe and Green Development Corporation (NASDAQ: SGD), a real estate development and innovation company currently trading at $1.21 per share, has announced the definitive agreement to acquire Resource Group US Holdings LLC, a firm specializing in waste-to-value composting. According to InvestingPro data, SGD has faced significant challenges, with its stock down over 91% in the past year and currently showing a weak financial health score. The transaction involves a cash payment of $480,000, the issuance of 19% of SGD’s restricted common stock at closing, and a convertible note, convertible into SGD’s restricted common stock, pending shareholder approval. The deal is slated to close early in the second quarter of 2025, subject to standard closing conditions and the completion of an audit of Resource Group. With a current ratio of just 0.08 and significant debt burden, as revealed by InvestingPro analysis, this acquisition comes at a crucial time for SGD’s strategic development.
The acquisition will result in Resource Group’s shareholders owning 49% of SGD’s outstanding common stock. The SGD Board of Directors has unanimously approved the transaction, which is expected to significantly enhance cash flow and add substantial value to SGD shareholders by capitalizing on Resource Group’s proprietary composting technology.
Resource Group is recognized for its innovative approach to organic recycling and composting, transforming green waste into environmentally friendly soil and mulch products. Their operations are supported by an established infrastructure with a focus on sustainability and cost efficiency. This acquisition could provide much-needed revenue growth for SGD, which reported just $0.17 million in revenue over the last twelve months. (Get access to 14+ additional key financial insights with InvestingPro). The company’s proprietary Microtec technology and strategic logistics network provide competitive advantages in the growing global compost-to-substrate market, which is valued at approximately $10 billion.
The acquisition also brings a new significant shareholder to SGD, as Bjarne Borg, co-founder of Index Investment Group, will join the SGD Board of Directors upon closing. Index Investment Group is known for its investments in real estate and renewable energy sectors.
David Villarreal and Nicolai Brune will continue as CEO and CFO of SGD, respectively. The current management of Resource Group will remain in place post-acquisition. Additionally, the Company will undergo a name change and trade under a new symbol on the NASDAQ Capital Market after the transaction is finalized.
This press release contains forward-looking statements regarding the anticipated benefits of the acquisition, such as strengthening SGD’s financial profile and expanding its waste-to-value composting business. The statements are based on assumptions and analyses made by the Company and are subject to risks and uncertainties that could cause actual results to differ materially.
The information in this article is based on a press release statement from Safe and Green Development Corporation.
In other recent news, Safe & Green Development Corp has reported several significant developments. The company successfully regained compliance with Nasdaq’s stockholders’ equity requirement, according to an SEC filing. This resolution followed a previous warning from Nasdaq regarding their failure to meet the minimum criteria for stockholders’ equity and other financial metrics. Additionally, Safe & Green completed the sale of its 10% equity interest in JDI-Cumberland Inlet, LLC, receiving a $4.5 million promissory note as part of its compliance strategy.
In other transactions, Safe & Green entered a definitive agreement to sell 60 acres of waterfront land in Lago Vista, Texas, for $6.575 million. This agreement follows several amendments to a previous contract and is expected to close soon, pending the fulfillment of all conditions. Furthermore, the company has secured buyers for all five homes from the first phase of its Sugar Joint Venture in Texas, with sales expected to close in April 2025. Looking forward, Safe & Green plans to construct an additional seven homes, aligning with its target to complete 55 homes within the year.
Analyst notes indicate that the company’s strategic moves, such as asset sales and development projects, are critical for maintaining Nasdaq compliance and enhancing its market position. These developments are part of Safe & Green’s broader initiatives to leverage technology and strategic partnerships in its operations.
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