Safe & Green Development Corp (NASDAQ:SGD), a real estate company, announced Monday an amendment to its convertible debenture terms with Arena Investors. The modification, effective September 19, 2024, adjusts the interest provision of the debentures issued on August 12, 2024.
The debentures, part of a private placement offering, were originally paired with warrants to purchase company stock. Under the revised terms, the debentures will accrue 10% per annum interest, paid in kind, unless a default occurs. In such an event, interest would rise to 2% per month, payable in cash.
The amendment also details the conversion mechanics of the debentures into Safe & Green Development Corp's common stock. Conversion rates are pegged to the lesser of a fixed price or a percentage of the stock's volume-weighted average price, with a specified minimum threshold.
Additionally, the company's agreement with Arena Global allows for the purchase of up to $50 million in common stock by Arena Global. This includes the issuance of commitment shares and an associated warrant for further stock purchases.
The total potential shares issuable upon full conversion and warrant exercises, without considering the exchange cap or ownership limits, could reach approximately 40.8 million shares, assuming all debentures are held to maturity and converted at the floor price.
In other recent news, Safe & Green Development Corp has made significant strategic moves. The company amended an agreement with Arena Business Solutions Global SPC II, LTD, allowing for the issuance of additional shares if the value of issued shares falls below a predetermined threshold.
In addition, the firm 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 has also announced plans to acquire 22 single-family lots in Edinburg, Texas, further expanding its footprint in the real estate sector. Safe & Green Development Corp has secured a funding agreement with Arena Investors, which could provide up to $10 million to support its growth.
However, Safe & Green Development Corp is grappling with Nasdaq non-compliance issues, with the company's 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 technology-focused developments, the company is planning to acquire MyVONIA, an AI assistant platform, and has launched its Xene Home Platform, an AI-powered real estate transaction tool.
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