Safe and Green Development Corporation Releases Letter to Shareholders

Rhea-AI Summary

Safe and Green Development Corporation (NASDAQ: SGD) has issued a shareholder letter addressing recent stock trading activity. CEO David Villarreal confirmed that the company's pending acquisition of Resource Group US Holdings LLC remains on track, with Resource Group showing revenue growth from $16 million in 2023 to $19.1 million in 2024. Post-acquisition, SGD anticipates pro forma revenues of approximately $25 million in 2025. The acquisition will result in Resource Group receiving 49% of SGD's outstanding shares through a combination of restricted common stock and convertible notes. SGD maintains its focus on real estate development, proprietary technology platforms, and strategic acquisitions. The company believes its current market capitalization undervalues its intrinsic worth, particularly considering the Resource Group transaction's revenue trajectory.

Positive

• Resource Group's revenue grew from $16M (2023) to $19.1M (2024), showing strong growth trajectory
• Projected pro forma revenues of $25M in 2025 post-acquisition
• Acquisition will diversify revenue base and expand market footprint
• No adverse developments affecting company's operational trajectory

Negative

• Significant shareholder dilution with Resource Group receiving 49% of outstanding shares
• Acquisition still pending completion of Resource Group's audit
• Current market capitalization deemed undervalued by management

Insights

M&A Financial Analyst

SGD addresses stock volatility while reassuring investors their Resource Group acquisition remains on track with projected $25M combined revenues for 2025.

Safe and Green Development Corporation's shareholder letter addresses recent stock volatility with a straightforward message: there are no operational changes or issues affecting the company or its pending acquisition of Resource Group. This communication appears strategically timed to counter market concerns that may have triggered abnormal trading patterns.

The letter provides concrete financial metrics worth noting. Resource Group's unaudited revenues grew from $16 million in 2023 to $19.1 million in 2024 - representing 19.4% year-over-year growth. Post-acquisition, SGD projects pro forma revenues reaching approximately $25 million for 2025, though notably, the company doesn't disclose SGD's current standalone revenue baseline for comparison.

The acquisition remains subject only to "customary closing conditions" and completion of Resource Group's audit, with no specific timeline provided. The transaction structure is significant - Resource Group members will receive restricted common stock representing 49% of SGD's outstanding shares post-closing, indicating substantial dilution for current shareholders but also management's confidence in the target's value.

Management explicitly states that "current market capitalization does not reflect the intrinsic value of the Company," suggesting they believe the stock is undervalued given their strategic direction. However, beyond general statements about enhancing financial profile, expanding market footprint, and diversifying revenue, the letter lacks specific details about operational synergies or integration plans.

This appears to be a typical reassurance communication during a period of stock volatility, designed to stabilize investor sentiment while a material acquisition progresses through final stages.

MIAMI, May 2, 2025 /PRNewswire/ -- Safe and Green Development Corporation (NASDAQ: SGD) ("SGD" or the "Company"), a real estate development and innovation company, releases a letter to shareholders from CEO David Villarreal:

Dear SGD Shareholders,

We wanted to take a moment to address the recent trading activity surrounding our stock and reassure our shareholders that there have been no changes to our current operating plans or strategic objectives.

While we are aware of fluctuations in trading volume and stock price, we want to make it clear that there have been no adverse developments internally or externally that have impacted the Company's operational trajectory or its ongoing acquisition of Resource Group US Holdings LLC ("Resource Group"). This transaction remains on track, subject only to customary closing conditions and the completion of Resource Group's audit.

As highlighted in our March shareholder letter, Resource Group has demonstrated significant growth, with unaudited revenues increasing from $16 million in 2023 to $19.1 million in 2024. Upon completion of the acquisition, we anticipate pro forma revenues of approximately $25 million in 2025. We remain confident that this acquisition will fundamentally enhance SGD's financial profile, expand our market footprint, and diversify our revenue base.

Importantly, our core mission has not changed. We continue to focus on unlocking the value of our real estate development pipeline and proprietary technology platforms, while complementing these efforts with strategic acquisitions that generate near-term cash flow and long-term shareholder value. We firmly believe that the current market capitalization does not reflect the intrinsic value of the Company, particularly in light of the strategic direction we have undertaken and the revenue trajectory associated with the Resource Group transaction.

The management team remains focused on executing our business plan and delivering tangible results for our shareholders. We appreciate your continued support and confidence as we advance toward closing this transformative acquisition and continue building a stronger future for SGD.

Sincerely,
David Villarreal
President & CEO

In connection with the proposed transaction between the Company and Resource Group and the members of Resource Group, the Company intends to file with the SEC a proxy statement for its stockholders to vote on the approval of the issuance shares of the Company's restricted common stock under a convertible note to be issued to the members of Resource Group at closing, which together with the issuance of shares of the Company's restricted common stock at closing, will equal 49% of the Company's outstanding shares of common stock at closing. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT AND OTHER DOCUMENTS THAT MAY BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and shareholders will be able to obtain free copies of these documents (if and when available), and other documents containing important information about the Company and Resource Group, once such documents are filed with the SEC through the website maintained by the SEC at http://www.sec.gov. Copies of the documents filed with the SEC by the Company will be available free of charge on the Company's website at www.sgdevco.com.

Participants in the Solicitation

The Company, Resource Group and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information about the directors and executive officers of the Company is set forth in the Company's proxy statement for its 2024 annual meeting of shareholders, which was filed with the SEC on May 31, 2024, and the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024, which was filed with the SEC on March 31, 2025. Other information regarding the participants in the proxy solicitations and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement and other relevant materials to be filed with the SEC regarding the proposed transaction when such materials become available. Investors should read the joint proxy statement/prospectus carefully when it becomes available before making any voting or investment decisions. You may obtain free copies of these documents from the Company using the source indicated above.

No Offer or Solicitation

This communication is not intended to and shall not constitute an offer to buy or sell or the solicitation of an offer to buy or sell any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. No offer of securities shall be made, except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

About Safe and Green Development Corporation

Safe and Green Development Corporation is a 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. The thesis of development is to build strong, innovative and green, single or multifamily projects across all income and asset classes. Additionally, a majority owned subsidiary of SG DevCo, Majestic World Holdings LLC, is a prop-tech company that has created a real estate AI Platform. The Platform aims to decentralize the real estate marketplace, creating an all-in-one solution that brings banks, institutions, home builders, clients, agents, vendors, gig workers, and insurers into a seamlessly integrated and structured AI-driven environment. MyVONIA Innovations LLC, a wholly own subsidiary, is the owner of MyVONIA which is an AI-powered personal assistant designed to help simplify daily tasks and improve productivity for individuals and businesses. MyVONIA aims to assist with managing both personal and professional tasks.

Forward-Looking Statements

This communication may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934 as amended. All statements other than statements of historical fact are or may be deemed to be forward-looking statements. In some cases, forward-looking statements can be identified by terminology such as "may," "should," "potential," "continue," "expects," "anticipates," "intends," "plans," "believes," "estimates" and similar expressions and include all statements regarding the Company's operational trajectory, closing the acquisition of Resource Group, anticipating pro forma revenues of approximately $25 million in 2025, the acquisition fundamentally enhancing SGD's financial profile, expanding its market footprint, and diversifying its revenue base, unlocking the value of SGD's real estate development pipeline and proprietary technology platforms, while complementing these efforts with strategic acquisitions that generate near-term cash flow and long-term shareholder value, the intrinsic value of the Company not being reflected in the Company's current market capitalization, the revenue trajectory associated with the Resource Group transaction, executing the Company's business plan and delivering tangible results for shareholders, the Resource Group acquisition being transformative, building a stronger future for SGD, creating an all-in-one solution that brings banks, institutions, home builders, clients, agents, vendors, gig workers, and insurers into a seamlessly integrated and structured AI-driven environment and MyVONIA helping simplify daily tasks and improve productivity for individuals and businesses. . These forward-looking statements are based on certain assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions, and expected future developments, as well as other factors we believe are appropriate in the circumstances. Important factors that could cause actual results to differ materially from current expectations include, among others, Resource Group's ability to provide SGD with audited financials for the fiscal years ended December 31, 2023 and December 31, 2024 which reflect the estimated unaudited GAAP financials provided to SGD by Resource Group, the Company's ability to acquire the equity interests in Resource Group as planned, the Company's ability to achieve the benefits expected from the Resource Group acquisition, the Company's ability to fundamentally enhance its financial profile, expand its market footprint, and diversify its revenue base, the Company's ability to unlock the value of its real estate development pipeline and proprietary technology platforms, while complementing these efforts with strategic acquisitions that generate near-term cash flow and long-term shareholder value, the Company's ability to execute its business plan and deliver tangible results for shareholders, the Company's ability to create an all-in-one solution that brings banks, institutions, home builders, clients, agents, vendors, gig workers, and insurers into a seamlessly integrated and structured AI-driven environment, the Company's ability to obtain the capital necessary to fund its activities, the Company's ability to monetize its real estate holdings, and other 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. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement, and the Company undertakes no obligation to revise or update this communication to reflect events or circumstances after the date hereof.

For investor relations and media inquiries, please contact:
Barwicki Investor Relations
Andrew@Barwicki.com
516-662-9461

 

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SOURCE Safe and Green Development Corporation

FAQ

What is the expected revenue for SGD after acquiring Resource Group in 2025?

SGD anticipates pro forma revenues of approximately $25 million in 2025 following the completion of the Resource Group acquisition.

How much of SGD will Resource Group own after the acquisition?

Resource Group will receive 49% of SGD's outstanding shares through a combination of restricted common stock and convertible notes at closing.

What was Resource Group's revenue growth from 2023 to 2024?

Resource Group's unaudited revenues increased from $16 million in 2023 to $19.1 million in 2024, showing significant growth.

What are the remaining conditions for SGD's acquisition of Resource Group?

The acquisition is subject to customary closing conditions and the completion of Resource Group's audit.

What is Safe and Green Development Corporation's main business focus?

SGD focuses on real estate development using prefabricated modules, proprietary technology platforms, and strategic acquisitions to generate near-term cash flow and long-term shareholder value.