Safe & Green Holdings Corp. (NASDAQ:SGBX), a wholesale distributor of lumber and construction materials, entered into a Securities Purchase Agreement with Alumni Capital LP on January 21, 2025. This agreement provides the company with a $100 million equity line of credit (ELOC), allowing for the potential sale of newly issued common stock shares to Alumni Capital.
The company will not be able to commence any sales under this agreement until certain conditions are met, including the effectiveness of a registration statement by the SEC and the filing of a final form of prospectus. This funding comes at a critical time, as InvestingPro data shows the company's current ratio stands at just 0.15, indicating potential liquidity challenges.
The sales period is set to end on June 30, 2026, or when the total sales reach the $100 million commitment amount, whichever comes first. The company will have control over the timing and amount of any stock sales to Alumni Capital, which will be contingent on market conditions and other factors.
The purchase price for the common stock will be set at 90% of the lowest traded price of the company's stock in the five business days preceding the closing date of each sale. The company is restricted from issuing more than 4.99% of its outstanding common stock immediately prior to the agreement's execution, unless shareholder approval is obtained for a higher amount. This cap ensures compliance with Nasdaq rules.
Furthermore, the agreement limits Alumni Capital from acquiring shares that would result in them owning more than 4.99% of Safe & Green Holdings' outstanding common stock.
In accordance with the agreement, Safe & Green Holdings plans to file a registration statement for the resale of the maximum number of shares permissible by law within five business days following the date of the agreement. The company aims to have the registration statement declared effective within 120 days of the agreement's date.
This announcement, based on a press release statement, should not be considered an offer to sell or a solicitation of an offer to buy any securities. While the stock has shown significant volatility with a 97.94% gain year-to-date, investors should note the -88.14% decline over the past year. For deeper insights into SGBX's financial health and 16 additional ProTips, consider subscribing to InvestingPro. The shares in question will not be offered or sold in the United States without registration or an applicable exemption from registration requirements.
In other recent news, Safe & Green Holdings Corp has seen significant changes in its leadership and strategic direction. The company recently appointed Michael McLaren as its new CEO, bringing over 30 years of experience in the energy sector. Simultaneously, Safe & Green announced the appointment of Jim Pendergast as the new Chief Operating Officer. Both appointments are part of the company's strategic efforts to enhance operational efficiency.
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. This move is part of the company's broader strategy to manage its capital and cash flows. The company also announced a binding Letter of Intent to acquire New Asia Holdings Inc., including its subsidiaries Olenox Corp. and Machfu.com. This acquisition is expected to diversify the company's operations into energy and technology sectors.
However, Safe & Green faces potential delisting from Nasdaq due to an equity shortfall and failure to meet the minimum bid price rule. The company has appealed these decisions to the Nasdaq's Hearing Panel. On a positive note, Safe & Green secured two new contracts for the creation of modular containers, marking a continued expansion of its project portfolio.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.