MIAMI - Safe and Green Development Corporation (NASDAQ: SGD), a company specializing in real estate and technology development, has declared a 1-for-20 reverse stock split of its common stock, scheduled to take effect on October 8, 2024. The action was approved by the company's Board of Directors following authorization from stockholders at the annual meeting on July 2, 2024.
The reverse split will consolidate every 20 shares of the company's common stock into one share, maintaining the par value at $0.001 per share. This move will proportionally decrease the number of outstanding shares from approximately 19 million to about 0.95 million, subject to adjustments for fractional shares, which will be compensated in cash. The reverse split aims to comply with Nasdaq's minimum bid price requirement and is expected to make the stock more appealing to a wider range of investors.
Equiniti Trust Company, LLC, the company's transfer agent, will provide stockholders with instructions on exchanging their shares. Those holding shares in brokerage accounts will not need to take any action. The stock will continue trading on the Nasdaq under the symbol "SGD" and will start on a split-adjusted basis on the effective date.
The reverse split is anticipated to help Safe and Green Development Corporation meet Nasdaq's listing criteria, which includes maintaining a minimum bid price of $1.00 per share. This strategic step is part of the company's broader efforts to strengthen its market position and attract investment.
Safe and Green Development Corporation focuses on environmentally friendly real estate projects and has a subsidiary, Majestic World Holdings LLC, that operates a real estate AI platform. Another subsidiary, MyVONIA Innovations LLC, owns an AI-powered personal assistant designed to enhance productivity for individuals and businesses.
This announcement is based on a press release statement from Safe and Green Development Corporation.
In other recent news, Safe & Green Development Corp has been active in strategic developments. The company has announced amendments to its debt agreement terms with Arena Investors, adjusting the interest provision of the debentures issued. The revised terms stipulate a 10% per annum interest, paid in kind, unless a default occurs, which would result in a 2% per month interest payable in cash. The amendment also outlines the conversion mechanics of the debentures into the company's common stock.
In addition to the debt agreement amendment, Safe & Green Development Corp has made significant strides in its real estate portfolio. The company established a joint venture with Milk & Honey LLC to develop a storage unit facility in Palmview, Texas, contributing $100,000 and retaining a 60% interest. The company also plans to acquire 22 single-family lots in Edinburg, Texas, with a funding agreement with Arena Investors potentially providing up to $10 million to support its growth.
However, Safe & Green Development Corp faces Nasdaq non-compliance issues due to its stockholders' equity falling below the Nasdaq Capital Market's minimum requirement. The company has until October 10, 2024, to submit a Compliance Plan to regain conformity. In the technology realm, Safe & Green Development Corp plans to acquire MyVONIA, an AI assistant platform, and has launched its Xene Home Platform, an AI-powered real estate transaction tool. These recent developments offer insights into the company's strategic initiatives and partnerships.
InvestingPro Insights
The recent announcement of Safe and Green Development Corporation's (NASDAQ: SGD) reverse stock split comes amid challenging financial circumstances for the company. According to InvestingPro data, SGD's revenue for the last twelve months as of Q2 2024 stands at a mere $0.09 million, with an operating income of -$5.21 million, indicating significant operational challenges.
InvestingPro Tips highlight that SGD "operates with a significant debt burden" and is "quickly burning through cash." These factors likely contributed to the decision to implement the reverse stock split, as the company aims to maintain its Nasdaq listing and attract new investors.
The stock's performance has been notably poor, with InvestingPro data showing a year-to-date price total return of -79.99% as of the latest available data. This aligns with another InvestingPro Tip stating that the "price has fallen significantly over the last year."
For investors considering SGD's potential, it's worth noting that InvestingPro offers 14 additional tips that could provide further insights into the company's financial health and market position. These additional tips could be particularly valuable given the company's current strategic moves and financial situation.
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