Safe & Green Holdings Corp. Announces Entry into Warrant Inducement Transaction for $2.4 Million in Gross Proceeds

Rhea-AI Summary

Safe & Green Holdings Corp. (NASDAQ: SGBX) has entered into a warrant inducement agreement with a single investor, resulting in $2.4 million in gross proceeds. The investor agreed to exercise existing warrants to purchase 2,758,620 shares at a reduced price of $0.8718 per share. In exchange, the investor received new warrants to purchase 5,517,240 shares, exercisable at $0.8718 per share with a five-year expiration after stockholder approval. Aegis Capital Corp. served as the exclusive financial advisor for this transaction.

Positive

• Secured immediate cash injection of $2.4 million in gross proceeds
• Successfully executed warrant inducement transaction to raise capital

Negative

• Dilutive impact from potential issuance of 5,517,240 new warrant shares
• Reduced warrant exercise price to $0.8718 per share
• Additional dilution from immediate issuance of 2,758,620 shares

Insights

Financial Analyst

This warrant inducement deal brings mixed implications for SGBX. While securing $2.4 million in immediate funding provides needed working capital, the transaction terms reveal concerning aspects. The reduced warrant exercise price of $0.8718 represents a significant discount and the issuance of new warrants for double the shares (5.5M vs 2.7M) indicates substantial future dilution potential. The deal structure suggests the company faced challenges raising capital through conventional means. With a micro-cap valuation under $2 million, this dilutive financing could pressure the stock price further. The requirement for shareholder approval adds execution risk and uncertainty to the timeline for completing this capital raise.

MIAMI, FL, Nov. 06, 2024 (GLOBE NEWSWIRE) -- Safe & Green Holdings Corp. (NASDAQ: SGBX) (“Safe & Green Holdings” or the “Company”), a leading developer, designer, and fabricator of modular structures, announced today that it has entered into an agreement with a single investor that is an existing holder of warrants to purchase shares of common stock of the Company for cash (the “Existing Warrants”), wherein the investor agreed to exercise the Existing Warrants to purchase up 2,758,620 shares of common stock at a reduced exercise price of $0.8718 per share, resulting in gross proceeds of approximately $2.4 million, before deducting offering fees and other expenses payable by the Company.

Aegis Capital Corp. acted as the exclusive financial advisor in connection with the transaction.

In consideration for the exercise of the Existing Warrants for cash, the investor received new warrants (the “New Warrants”) to purchase up to an aggregate of 5,517,240 shares of common stock. The New Warrants are exercisable after stockholder approval at an exercise price of $0.8718 per common share and will expire five years after stockholder approval.

The Company issued and sold the New Warrants and any shares of common stock issuable upon exercise of the New Warrants in reliance on the exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”) by virtue of Section 4(a)(2) thereof and Rule 506 of Regulation D thereunder.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Safe & Green Holdings Corp.

Safe & Green Holdings Corp., a leading modular solutions company, operates under core capabilities which include the development, design, and fabrication of modular structures, meeting the demand for safe and green solutions across various industries. The firm supports third-party and in-house developers, architects, builders, and owners in achieving faster execution, greener construction, and buildings of higher value. The Company’s subsidiary, Safe and Green Development Corporation, is a leading real estate development company. Formed in 2021, it focuses on the development of sites using purpose-built, prefabricated modules built from both wood and steel, sourced from one of SG Holdings’ factories and operated by the SG Echo subsidiary.

For more information, visit https://www.safeandgreenholdings.com/ and follow us at @SGHcorp on Twitter. Safe Harbor Statement

Forward-Looking Statements

Certain statements in this press release constitute "forward-looking statements" within the meaning of the federal securities laws. Words such as "may," "might," "will," "should," "believe," "expect," "anticipate," "estimate," "continue," "predict," "forecast," "project," "plan," "intend" or similar expressions, or statements regarding intent, belief, or current expectations, are forward-looking statements. These forward-looking statements are based upon current estimates and assumptions. While the Company believes these forward-looking statements are reasonable, undue reliance should not be placed on any such forward-looking statements, which are based on information available to us on the date of this release. These forward-looking statements are subject to various risks and uncertainties, many of which are difficult to predict that could cause actual results to differ materially from current expectations and assumptions from those set forth or implied by any forward-looking statements. Important factors that could cause actual results to differ materially from current expectations include, but are not limited to, the factors discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, and its subsequent filings with the SEC, including subsequent periodic reports on Forms 10-Q and 8-K. The information in this release is provided only as of the date of this release, and we undertake no obligation to update any forward-looking statements contained in this release on account of new information, future events, or otherwise, except as required by law.

Investor Relations:
Crescendo Communications, LLC
212-671-1020
SGBX@crescendo-ir.com

FAQ

How much did Safe & Green Holdings (SGBX) raise in the warrant inducement transaction?

Safe & Green Holdings raised approximately $2.4 million in gross proceeds before deducting offering fees and expenses.

What is the exercise price for the new warrants issued by SGBX?

The new warrants have an exercise price of $0.8718 per common share.

How many new warrant shares did SGBX issue in the November 2024 transaction?

SGBX issued new warrants to purchase up to 5,517,240 shares of common stock.

Who was the financial advisor for SGBX's warrant inducement transaction?

Aegis Capital Corp. acted as the exclusive financial advisor for the transaction.