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Safe & Green Holdings Corp. (NASDAQ:SGBX), a wholesale distributor of lumber and construction materials, has entered into a material definitive agreement with 1800 Diagonal Lending LLC, issuing a promissory note in the principal amount of $143,750. This transaction, dated January 22, 2025, was accompanied by a Note Purchase Agreement (NPA).
The note was sold for $125,000, reflecting an original issue discount of $18,750. It carries a one-time interest charge of 15% applied to the principal on the issue date. Safe & Green Holdings Corp. is obliged to make nine monthly payments beginning February 28, 2025, each totaling $18,368.
A grace period of five business days is provided for each payment. In the event of a default, the principal and interest become immediately due, and the company could owe up to 200% of the outstanding amount plus any default interest.
Additionally, the lender has the option to convert the outstanding principal and unpaid interest into common stock shares. The initial conversion price is set at $1.30 per share for the first 180 days post-issue date, thereafter at $0.10 per share. The conversion is subject to a 4.99% ownership cap and a 19.9% issuance limit in relation to the company’s outstanding common stock, unless shareholder approval is obtained.
Concurrently, SG Building Blocks, Inc., a subsidiary of Safe & Green Holdings Corp., entered into a Cash Advance Agreement with Core Funding Source LLC, selling $104,930 of future receivables for a net amount of $63,000 after fees and expenses. The buyer will withdraw $2,998 daily from SG Building Blocks’ account until the full amount is repaid.
These financial arrangements impose restrictions on the company’s asset disposition outside the ordinary course of business without written consent from the lender.
The details provided here are based on the full text of the note, the NPA, and the Cash Advance Agreement, which are integral parts of the company’s SEC filing. While the stock has shown strong momentum with a 78% year-to-date return, investors should note the significant -88.68% decline over the past year. For comprehensive analysis of SGBX’s financial health and 16 additional ProTips, consider accessing InvestingPro’s detailed metrics and insights.
In other recent news, Safe & Green Holdings Corp. has secured a $100 million equity line of credit (ELOC) from Alumni Capital LP. The agreement allows for potential sales of newly issued common stock shares to Alumni Capital, contingent on certain conditions. In leadership changes, the company has appointed Michael McLaren as CEO and Jim Pendergast as the new Chief Operating Officer.
Furthermore, Safe & Green has announced a binding Letter of Intent to acquire New Asia Holdings Inc., including its subsidiaries Olenox Corp. and Machfu.com. The acquisition is expected to diversify the company’s operations into energy and technology sectors.
In financial maneuvers, Safe & Green disclosed a significant agreement through its subsidiary, SG Building Blocks, selling $203,000 of its future receivables for an immediate cash purchase price of $140,000. However, the company faces potential delisting from Nasdaq due to an equity shortfall and failure to meet the minimum bid price rule. Safe & Green secured two new contracts for the creation of modular containers, marking a continued expansion of its project portfolio.
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