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Safe & Green Development Corp (NASDAQ:SGD), a real estate company, has finalized the sale of its 10% equity interest in JDI-Cumberland Inlet, LLC, as reported in a recent SEC filing. The transaction, completed on Monday, involved the exchange of the interest for a $4.5 million promissory note bearing a 6.5% annual interest rate, maturing on February 6, 2026. The note is secured by a pledge of the same equity interest and guaranteed by Jacoby Development Inc.
This move comes as part of Safe & Green’s strategy to address its non-compliance with Nasdaq’s minimum stockholders’ equity requirement. The company was previously notified by Nasdaq of its non-compliance due to its stockholders’ equity falling below the required $2.5 million as of June 30, 2024. Safe & Green does not currently meet the alternative compliance standards of having a market value of listed securities of $35 million or net income from continued operations of $500,000 in the most recently completed fiscal year or two of the last three fiscal years.
In response, Safe & Green submitted a Compliance Plan to Nasdaq, outlining initiatives to regain compliance. The sale of its interest in JDI-Cumberland is a significant part of these efforts. The company believes this transaction has restored its compliance with the stockholders’ equity requirement.
Nasdaq has granted Safe & Green an extension until February 24, 2025, to demonstrate sustained compliance. The company must provide a report to the SEC and Nasdaq, detailing the transaction and affirming its compliance. Nasdaq will continue to monitor the company’s compliance with the stockholders’ equity requirement, and failure to demonstrate ongoing compliance in the company’s next periodic report may result in delisting.
Investors and stakeholders are advised that the information in this article is based on the SEC filing by Safe & Green Development Corp.
In other recent news, Safe & Green Development Corp has been active in the real estate market with several significant transactions. The company recently sold a waterfront property in Texas to Lithe Development Inc. for $6.575 million. The property, covering approximately 60 acres on Lake Travis in Lago Vista, was owned by LV Peninsula Holding, a subsidiary of Safe & Green Development Corp.
In a separate development, Safe & Green Development Corp resolved inter-company financial obligations with Safe & Green Holdings Corp. The agreement led to the forgiveness of a promissory note and advances worth over $1.7 million, with Safe & Green Holdings Corp transferring 276,425 shares of Safe & Green Development Corp’s common stock and forgiving nearly $400,000 of debt in return.
The company also secured funding for a real estate project in South Texas. Through its joint venture Sugar Phase I LLC, Safe & Green Development Corp acquired 22 lots for residential development. The construction of this project is financed by a loan agreement for up to $1,092,672.75.
Safe & Green Development Corp also announced that it has reached the halfway point in the construction of its Sugar Phase I project, a significant milestone in the company’s plan to deliver quality single-family homes within the South Texas region.
Finally, Safe & Green Development Corp entered into two joint venture agreements to develop single-family homes in Hidalgo County, Texas. The agreements with Milk & Honey LLC involve the development of Hacienda Olivia Phase III LLC and Hacienda Olivia Phase IV LLC. These recent developments highlight Safe & Green Development Corp’s active role in the real estate market.
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