Safe and Green Development Corporation Releases Letter to Shareholders

Rhea-AI Summary

Safe and Green Development (NASDAQ: SGD) CEO David Villarreal has released a letter to shareholders addressing recent developments. The company completed a reverse stock split to maintain its NASDAQ listing and comply with minimum bid price requirements. Villarreal expressed disappointment with the stock's performance post-split, noting a drop from a $5M market cap to $2.5M without fundamental business changes.

He emphasized that the current market capitalization doesn't reflect the company's true value, citing previously appraised real estate assets of approximately $50M. Villarreal highlighted SGD's growth through strategic acquisitions and joint ventures, which aim to accelerate revenue generation. The company is focusing on developing safe, environmentally conscious housing and enhancing homeownership accessibility through technology platforms. SGD anticipates significant revenue generation from its South Texas growth market in 2025 and beyond, with ongoing strategic asset sales to improve its balance sheet.

Positive

• Maintained NASDAQ listing through reverse stock split
• Real estate assets previously appraised at approximately $50M
• Growth through strategic acquisitions and joint ventures
• Focus on safe and environmentally conscious housing development
• Anticipated revenue generation from South Texas growth market in 2025
• Ongoing strategic asset sales to improve balance sheet

Negative

• Market cap dropped from $5M to $2.5M post-reverse split
• Current market capitalization not reflective of company's value
• Aim to reduce company's interest expense in the long term

Insights

Financial Analyst

The CEO's letter to shareholders addresses recent market developments but lacks substantial financial impact. While it mentions a 50% market cap decline from $5M to $2.5M post-reverse split, it provides no concrete financial figures or revenue projections. The reference to $50M in appraised real estate assets is noteworthy, but without detailed financials or specific growth targets, it's difficult to assess the company's true financial position or near-term prospects.

The letter hints at potential revenue generation in South Texas for 2025, strategic asset sales and efforts to reduce interest expenses, but these remain vague without quantifiable goals or timelines. While the CEO expresses optimism about Q4 and 2025, the lack of specific financial metrics or performance indicators makes it challenging to evaluate the company's actual growth trajectory or investment potential.

MIAMI, Oct. 17, 2024 /PRNewswire/ -- Safe and Green Development Corporation (NASDAQ: SGD) ("SG Devco" or the "Company"), a leading real estate development company releases a letter to shareholders from SG Devco CEO, David Villarreal:

"Dear SGD Shareholders,

I wanted to take a quick moment of your time to address the recent reverse stock split & the subsequent trading of the stock since then.

I would like to begin by stating that our reverse stock split was completed after receiving shareholder approval to do so. We took this step to be able maintain our NASDAQ Listing and comply with NASDAQ minimum bid price requirements. We waited as long as possible prior to having to effectuate a reverse split.

We have been disappointed to see this recent trading in the stock after the split whereby we have gone from trading at an approximately $5M market cap down to a $2.5M market cap without any fundamental changes to the business and / or operations. To put this into perspective, the Company's real estate assets were previously appraised at approximately $50M. Even if we discount appraised value and subtract out the debt on the properties, there is still significantly more value than the $2.5M market cap.

Therefore, we do not believe that the current market capitalization is reflective of the value of the Company. In the past year, the Company has grown via strategic acquisition and joint ventures, both of which should shortened the timeline to revenue generation. The Company is poised to execute its business plan in developing safe and environmentally conscious housing while facilitating the path to homeownership via its current and developing technology platforms. Recent news releases have highlighted the rapid progress in our South Texas growth market that we anticipate will be a main source of revenue generation in 2025 and beyond. Our strategic asset sales remain in play to shore up our balance sheet in an aim to reduce the Company's interest expense in the long term.

Over the past year, the Company has repositioned itself to be able to capitalize on all initiatives in the real estate space and management and the team is ready to accelerate these efforts into rapid growth throughout Q4 and heading into an exciting 2025.

Thank you all for your continued support.

David Villarreal
President & CEO

About Safe and Green Development Corporation (SG Devco)

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.

Safe Harbor Statement

This press release 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 statements regarding the growth via strategic acquisition and joint ventures, shortening the timeline to revenue generation; the Company being poised to execute its business plan in developing safe and environmentally conscious housing while facilitating the path to homeownership via its current and developing technology platforms; the South Texas growth market being a main source of revenue generation in 2025 and beyond; the Company being repositioned to capitalize on all developments in the real estate space and management and staff being ready to accelerate these efforts into rapid growth throughout Q4 and heading into an exciting 2025..

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, the Company's ability to generate revenue when anticipated; the ability to implement its business plan, the Company's ability to deliver homes that meet the growing demand in South Texas, 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 press release 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

Why did Safe and Green Development (SGD) implement a reverse stock split?

SGD implemented a reverse stock split to maintain its NASDAQ listing and comply with NASDAQ minimum bid price requirements.

What is the current market capitalization of SGD after the reverse stock split?

After the reverse stock split, SGD's market capitalization dropped from approximately $5M to $2.5M.

What is the estimated value of SGD's real estate assets?

SGD's real estate assets were previously appraised at approximately $50M.

When does SGD anticipate significant revenue generation from its South Texas growth market?

SGD anticipates significant revenue generation from its South Texas growth market in 2025 and beyond.

What strategies is SGD employing to improve its financial position?

SGD is pursuing strategic asset sales to improve its balance sheet and aims to reduce the company's long-term interest expense.