Safe & Green Holdings secures $360,000 through promissory note

Safe & Green Holdings Corp. (NASDAQ:SGBX), a wholesale distributor of lumber and construction materials, announced on Monday that it has entered into a financial agreement with GS Capital Partners (WA:CPAP), LLC. On March 3, 2025, the company issued a promissory note in the principal amount of $360,000, accompanied by a Securities Purchase Agreement (SPA) and Registration Rights Agreement (RRA).

The note, purchased for $300,000, carries an original issue discount of $60,000 and bears interest at an annual rate of 15%. The first twelve months of interest, totaling $54,000, are guaranteed from the issue date. This new debt adds to the company’s existing financial obligations, which InvestingPro data shows may be concerning given the company’s current ratio of 0.15, indicating potential liquidity challenges. In case of late payment, the interest rate increases to 18%. Monthly payments of $44,000 are scheduled to start on June 3, 2025, ending with a final payment on March 3, 2026, for any remaining balance.

GS Capital Partners also gained the right to convert the outstanding principal and interest into common stock of Safe & Green Holdings, contingent upon shareholder approval as per Nasdaq Rule 5635(d). The conversion price is set at $0.65 per share, subject to adjustments, but cannot lead to the lender owning more than 4.99% of the company’s common stock.

In addition to the note, the company will issue 275,000 shares of common stock to GS Capital Partners as "Commitment Shares" for the purchase of the note.

The agreement specifies that certain events, such as failure to make payments or breaches of covenants, would constitute a default. After a default, the lender can convert any part of the note at a price per share defined as the "Alternate Price," which is the lesser of the conversion price, the closing price on the default date, or $0.52.

The company is restricted from paying dividends, repurchasing shares, repaying certain debts, or selling significant assets without the lender’s consent while the note is outstanding.

This strategic financial move comes as Safe & Green Holdings continues to navigate the competitive construction materials market. The details of the agreements are outlined in the exhibits attached to the SEC filing, which provide a comprehensive view of the terms and conditions.

The information in this article is based on a press release statement from Safe & Green Holdings Corp.

In other recent news, Safe & Green Holdings Corp. has announced its return to compliance with Nasdaq’s minimum equity standard, allowing the company’s securities to continue trading on the Nasdaq Capital Market. This development follows the successful completion of a merger with Olenox Corp., which significantly increased the company’s stockholders’ equity by approximately $60 million. Additionally, Safe & Green Holdings has completed another strategic merger with New Asia Holdings, Inc., integrating NAHD and its subsidiaries as indirect, wholly-owned subsidiaries. In a move to further strengthen its financial position, the company has issued a $360,000 promissory note to Firstfire Global Opportunities Fund, LLC, carrying an interest rate of 15% per annum. The note includes provisions that restrict certain financial activities without lender consent, and warrants exercisable into 450,000 shares of common stock will be granted to the lender. Furthermore, Safe & Green Holdings has announced its intention to acquire assets and business operations of County Line Industrial, LLC, as part of its strategic growth plan. This acquisition is expected to enhance the company’s operational efficiency and modular capabilities. These recent developments highlight Safe & Green Holdings’ active efforts to strengthen its financial position and expand its market presence.

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