Safe and Green Development Corporation Secures Strategic Investment of up to $10 Million from Arena Investors

Rhea-AI Summary

Safe and Green Development (NASDAQ: SGD) has secured a strategic investment of up to $10 million from Arena Investors, LP. The initial funding amount is $1.38 million, with access to subsequent tranches up to a total of $10.27 million subject to various conditions. Arena, a global institutional asset manager with $3.5 billion in assets under management, is expected to provide valuable insights and resources to accelerate SG Devco's real estate development projects.

Additionally, SG Devco entered into an equity line of credit purchase agreement with Arena Business Solutions, potentially allowing for up to $50 million in additional funding. Maxim Group acted as the sole placement agent for the offering. This strategic investment is intended to strengthen SG Devco's ability to make a positive impact on the industry while delivering value to shareholders.

Positive

• Secured strategic investment of up to $10 million from Arena Investors
• Initial funding of $1.38 million with potential for additional tranches up to $10.27 million
• Access to Arena's real estate expertise and network for project acceleration
• Equity line of credit agreement potentially providing up to $50 million in additional funding

Negative

• Future funding tranches subject to various conditions
• Potential dilution of existing shareholders through equity line of credit agreement

Insights

Financial Analyst

This strategic investment from Arena Investors is a significant boost for Safe and Green Development (SGD). The initial $1.38 million funding, with potential access to up to $10.27 million, provides SGD with important capital for growth. Moreover, the additional $50 million equity line of credit offers financial flexibility.

However, investors should note that the full $10.27 million and ELOC are subject to conditions, which introduces some uncertainty. The partnership with Arena, a $3.5 billion AUM firm, brings valuable real estate expertise, potentially accelerating SGD's project development. This could lead to faster revenue generation and market expansion, positively impacting SGD's financial outlook.

Real Estate Development Expert

Arena's investment in SGD is a game-changer for the company's real estate development prospects. Access to Arena's real estate-focused capabilities and network can significantly enhance SGD's project execution and market positioning. This partnership could lead to:

• Faster project approvals and development timelines
• Access to prime real estate opportunities
• Improved project design and sustainability features

However, the real value lies in the knowledge transfer from Arena to SGD. This could result in more innovative, market-responsive projects, potentially increasing SGD's competitive edge in the sustainable development sector. The key will be how effectively SGD leverages this expertise to drive tangible results in their project pipeline.

Market Research Analyst

This investment signals growing interest in sustainable real estate development, reflecting a broader market trend. SGD's ability to secure funding from a reputable investor like Arena validates its business model and market potential. The deal structure, combining immediate funding with conditional tranches and an ELOC, provides SGD with financial flexibility while mitigating investor risk.

Investors should watch for:

• How quickly SGD deploys the initial capital
• Progress on meeting conditions for additional tranches
• New project announcements leveraging Arena's expertise

This partnership could position SGD as a more formidable player in the green development space, potentially leading to increased market share and investor interest in the medium to long term.

MIAMI, Aug. 14, 2024 /PRNewswire/ -- Safe and Green Development Corporation (NASDAQ: SGD) ("SG Devco" or the "Company"), announces the successful closing of a strategic purchase agreement for funding of up to $10 million from Arena Investors, LP ("Arena") and its affiliates.

Arena, a global institutional asset manager with approximately $3.5 billion of assets under management, is known for its expertise in providing creative capital solutions.

Maxim Group LLC was sole placement agent in connection with the offering. 

In addition to the potential to accelerate SG Devco's growth, one of the key advantages of this investment by Arena is expected to be the Company's access to Arena's real estate-focused capabilities, which can provide valuable insights and resources to help accelerate the development of SG Devco's real estate development projects.  This collaboration is expected to enable SG Devco to leverage Arena's extensive network and expertise, creating new opportunities and enhancing the Company's capabilities.

David Villarreal, CEO of SG Devco, expressed his excitement about this milestone, stating, "This investment represents a significant achievement for SG Devco. This strategic commitment signifies Arena's support for our vision and demonstrates its confidence in the future potential of SG Devco's real estate projects. We are confident that Arena's support will not only fuel our expansion but also contribute to the long-term success of our real estate projects."

The financing through Arena is intended to further strengthen SG Devco's ability to make a positive impact on the industry while delivering value to its shareholders. The initial funding amount is $1.38 million with the access to subsequent tranches up to a total of $10.27 million subject to various conditions as described in the SG Devco's Form 8-K filing in relation to this transaction. SG Devco also entered into an equity line of credit purchase agreement ("ELOC") with Arena Business Solutions, whereby the Company will have the right, but not the obligation, subject to various conditions, to put shares to the investor for potentially up to $50 million.

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 owned 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.

About Arena Investors

Arena is an institutional asset manager founded in partnership with The Westaim Corporation (TSXV: WED). With $3.5 billion of invested and committed assets under management as of June 30, 2024, and a team of over 180 employees in offices globally, Arena provides creative solutions for those seeking capital in special situations. The firm brings individuals with decades of experience, a track record of comfort with complexity, the ability to deliver within time constraints, and the flexibility to engage in transactions that cannot be addressed by banks and other conventional financial institutions.  For more information, please visit www.arenaco.com.

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 four additional subsequent tranches of funding for up to $10,277,777 in total,  having access to Arena's real estate focused divisions to accelerate the development of SG Devco's real estate development projects, the investment enabling SG Devco to leverage Arena's extensive network and expertise, creating new opportunities and enhancing the Company's capabilities, Arena solidifiing its support for the Company's vision and demonstrating its confidence in the future potential of SG Devco's real estate projects, Arena's support not only fueling the Company's expansion but also contributing to the long-term success of its real estate projects, the financing through Arena strengthening SG Devco's ability to make a positive impact on the industry while delivering value to its shareholders, having the right to put shares to the investor under the ELOC for up to $50 million and 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.

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 satisfy the conditions to closing and close on the four additional subsequent tranches of funding for up to $10,277,777, the Company's ability to accelerate the development of its real estate development projects, the Company's ability to leverage Arena's extensive network and expertise, create new opportunities and enhance the Company's capabilities, the Company's ability to secure funding under the ELOC, the Company's ability to make a positive impact on the industry while delivering value to its 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 press release to reflect events or circumstances after the date hereof.

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SOURCE Safe and Green Development Corporation

FAQ

What is the total amount of funding secured by Safe and Green Development (SGD) from Arena Investors?

Safe and Green Development (SGD) has secured a strategic investment of up to $10 million from Arena Investors, with an initial funding of $1.38 million and potential for additional tranches up to $10.27 million, subject to various conditions.

How much additional funding could SGD potentially access through the equity line of credit agreement?

SGD entered into an equity line of credit purchase agreement with Arena Business Solutions, which could potentially provide up to $50 million in additional funding, subject to various conditions.

What are the expected benefits of Arena Investors' strategic investment in SGD?

The investment is expected to provide SGD with access to Arena's real estate-focused capabilities, valuable insights, and resources to accelerate the development of SG Devco's real estate projects. It also aims to strengthen SGD's ability to make a positive impact on the industry while delivering value to shareholders.

Who acted as the placement agent for SGD's strategic investment deal with Arena Investors?

Maxim Group acted as the sole placement agent in connection with the offering of the strategic investment from Arena Investors to Safe and Green Development (SGD).