[FORM 8-K Filing Information](index=1&type=section&id=FORM%208-K%20Filing%20Information) This chapter details the administrative and legal information for the FORM 8-K filing, including registrant identification and filing status [Registrant Information](index=1&type=section&id=Registrant%20Information) This section details the official registrant information for Safe and Green Development Corporation, including corporate identifiers and registered securities Registrant Details | Detail | Value | | :--- | :--- | | Registrant Name | SAFE AND GREEN DEVELOPMENT CORPORATION | | Jurisdiction of Incorporation | Delaware | | Commission File Number | 001-41581 | | I.R.S. Employer Identification Number | 87-1375590 | | Principal Executive Offices | 100 Biscayne Blvd., 1201 Miami, FL 33132 | | Telephone Number | (904)-496-0027 | Registered Securities | Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | | :--- | :--- | :--- | | Common Stock, par value $0.001 | SGD | The Nasdaq Stock Market LLC | [Filing Status](index=1&type=section&id=Filing%20Status) The registrant is designated as an 'emerging growth company' under relevant securities acts - Safe and Green Development Corporation is designated as an 'emerging growth company'[3](index=3&type=chunk) [Item 2.02. Results of Operations and Financial Condition.](index=2&type=section&id=Item%202.02.%20Results%20of%20Operations%20and%20Financial%20Condition.) This section provides an update on the company's financial performance for the quarter, accompanied by legal disclaimers regarding its filing status [Quarterly Financial Update](index=2&type=section&id=Quarterly%20Financial%20Update) A press release detailing financial results for the quarter ended June 30, 2025, was issued and attached as an exhibit - A press release containing financial information for the quarter ended June 30, 2025, was issued on August 18, 2025[4](index=4&type=chunk) - The press release is attached as Exhibit 99.1 to this Current Report on Form 8-K[4](index=4&type=chunk) [Legal Disclaimers](index=2&type=section&id=Legal%20Disclaimers) Information in Item 2.02 and Exhibit 99.1 is furnished, not filed, limiting liability and preventing incorporation by reference - The information in Item 2.02 and Exhibit 99.1 is not deemed 'filed' for purposes of Section 18 of the Securities Exchange Act of 1934[5](index=5&type=chunk) - The information is not subject to the liabilities of Section 18 or Sections 11 and 12(a)(2) of the Securities Act of 1933[5](index=5&type=chunk) - The information will not be incorporated by reference into any other SEC filings by the Company[5](index=5&type=chunk) [Item 9.01 Financial Statements and Exhibits.](index=2&type=section&id=Item%209.01%20Financial%20Statements%20and%20Exhibits.) This section lists all financial statements and exhibits furnished as part of the Current Report on Form 8-K [Exhibits Filed](index=2&type=section&id=Exhibits%20Filed) This section enumerates the exhibits furnished with this Current Report on Form 8-K, including the press release and interactive data file List of Exhibits | Exhibit Number | Description | | :--- | :--- | | 99.1 | Press Release issued by Safe and Green Development Corporation dated August 18, 2025 | | 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | [SIGNATURES](index=3&type=section&id=SIGNATURES) This chapter contains the formal authorization and signatory details for the Current Report on Form 8-K [Authorization and Signatory](index=3&type=section&id=Authorization%20and%20Signatory) The report is formally signed by the Chief Financial Officer, confirming compliance with Securities Exchange Act requirements - The report was signed by Nicolai Brune, Chief Financial Officer of Safe and Green Development Corporation[10](index=10&type=chunk) - The signing date for the report was August 18, 2025[10](index=10&type=chunk)

Core Insights - Safe and Green Development Corporation (SGD) reported a significant revenue increase of $1.4 million in Q2 2025, marking over 3,200% growth compared to $42 thousand in Q2 2024, primarily due to the acquisition of Resource Group US Holdings LLC [1][5] - The company is evaluating a potential cryptocurrency treasury reserve opportunity, which may require divesting Resource Group, although no acceptable letter of intent has been received [1][5] - Management is focused on expanding the customer base, increasing operational efficiency, and diversifying revenue streams [1][5] Financial Performance - The company reported a net loss of $5.724 million for Q2 2025 [3] - Interest expense was $0.830 million, and depreciation & amortization amounted to $0.181 million [3] - Adjusted EBITDA for Q2 2025 was $(0.634) million, indicating ongoing challenges despite revenue growth [3][6] Strategic Developments - The acquisition of Resource Group has led to revenue acceleration, generating $1.4 million in just one month post-acquisition [7] - The company has exited legacy software and technology operations to concentrate on its core real estate and compost/transportation businesses [7] - A reevaluation of the real estate portfolio is underway, with plans to monetize select assets [7] Leadership and Outlook - The Board of Directors has been restructured to enhance strategic direction and growth initiatives [7] - Management anticipates approximately $4 million in revenue for Q3 2025, reflecting the first full quarter of operations with Resource Group [7] - The integration of Resource Group's operations is expected to unlock additional revenue streams and improve operational efficiencies [7]

Acquisition and Strategic Initiatives - The Company completed the acquisition of Resource Group US Holdings LLC, marking a strategic shift towards engineered soils and organic recycling [194]. - The acquisition of Resource Group was finalized on June 2, 2025, with a purchase price including $480,000 in promissory notes and 1,500,000 shares of Series A Convertible Preferred Stock [208][218]. - The Company plans to monetize real estate holdings by selling properties with significant value appreciation, reinvesting proceeds into operations [193]. - The Company has entered into joint ventures in Southern Texas to develop sustainable single-family housing, expanding its market presence [193]. Financial Instruments and Capital Raising - As of April 4, 2025, the Company issued $555,555 in convertible debentures to Arena Investors for a purchase price of $500,000, with a 10% interest rate [197]. - The debentures are convertible into common stock at a price of $1.6215 or 92.5% of the lowest VWAP during the ten trading days preceding conversion, with a floor price of $0.90 [198]. - The Company issued a 10% convertible debenture for $172,500 to an institutional investor, reflecting a 10% original issue discount [202]. - The Company entered into a Securities Purchase Agreement on July 29, 2025, raising $560,422 through the sale of 309,691 shares of common stock and warrants [212]. - The Company completed a private placement offering with Arena Investors, raising a total of $10,277,777 through secured convertible debentures and warrants [238]. - The first tranche closed on August 12, 2024, issuing $1,388,888.75 in convertible debentures at a 10% original issue discount, resulting in a purchase price of $1,250,000 [239]. - The second tranche closed on October 25, 2024, issuing $2,222,222 in convertible debentures and warrants for 170,892 shares of common stock [240]. - The third tranche, closed on April 4, 2025, involved $555,555 in convertible debentures sold for $500,000, also at a 10% original issue discount [241]. Financial Performance - The Company generated revenues of $1,402,511 from commissions on residential real estate transactions for the three months ended June 30, 2025, a significant increase of $1,360,349 compared to $42,162 for the same period in 2024, primarily due to the acquisition of Resource Group [220]. - Total payroll and related expenses for the three months ended June 30, 2025, were $685,975, an increase of $90,330 from $595,645 in the same period of 2024, attributed to increased payroll following the Resource acquisition [221]. - General and administrative expenses surged to $1,611,549 for the three months ended June 30, 2025, compared to $216,829 in 2024, reflecting a rise of $1,394,720 due to higher professional fees related to being a public company [223]. - The Company reported a net loss of $5,723,955 for the three months ended June 30, 2025, compared to a net loss of $1,968,791 for the same period in 2024 [219]. - Bad debt expense for the three months ended June 30, 2025, was $3,025,000, a significant increase from $0 in the same period of 2024, due to uncertainties regarding the collectability of the Cumberland note receivable [224]. - For the six months ended June 30, 2025, the Company incurred a net loss of $7,903,950, compared to a net loss of $5,036,463 for the same period in 2024 [237]. Cash Flow and Financial Position - The Company had cash of $403,086 as of June 30, 2025, compared to $296,202 as of December 31, 2024, indicating a need for additional financing to continue operations [237]. - Cash provided by operating activities was $313,418 for the six months ended June 30, 2025, compared to cash used of $1,270,494 for the same period in 2024, reflecting a decrease in cash used of $1,583,912 [242]. - Investing activities generated $358,796 in cash during the six months ended June 30, 2025, a significant increase from cash used of $30,820 in the same period in 2024 [243]. - Financing activities resulted in cash used of $496,893 for the six months ended June 30, 2025, compared to cash provided of $1,322,316 in the same period in 2024 [244]. - The Company had no material off-balance sheet arrangements as of June 30, 2025 [245]. Risks and Future Outlook - The Company faces risks related to its limited operating history and potential inability to manage growth effectively [187]. - The Company expects to incur increasing losses in the future, raising substantial doubt about its ability to continue as a going concern [237]. - The Company has elected to take advantage of the extended transition period under the JOBS Act for complying with new or revised accounting standards [248]. - The Company remains classified as an emerging growth company until certain revenue or market value thresholds are met [249][250]. Dividend Policy - The Company does not intend to pay dividends on common stock, relying on stock price appreciation for shareholder returns [188]. Property Management - The Company is evaluating strategies to manage its property portfolio while supporting the growth of Resource Group [195]. Debt Management - The outstanding principal balance of Arena Debentures increased from $1,874,723.51 to $1,921,092.60, reflecting a 2.5% increase due to a waiver agreement [206].

Core Viewpoint - Safe and Green Development Corporation announced the results of two independent appraisals, indicating a combined valuation of $9.9 million for its properties in Lago Vista, Texas, and Durant, Oklahoma, which underscores the strength of its real estate portfolio and development strategy [1][2]. Group 1: Appraisal Results - The Lago Vista property, a 58.82-acre lakefront development site, was appraised at $6.4 million as of June 12, 2025 [6]. - The Durant property, a 113.20-acre site with both residential and industrial zoning, was appraised at $3.5 million as of June 16, 2025 [6]. - The combined valuation of both properties reflects meaningful value across the Company's real estate portfolio, totaling $9.9 million [1]. Group 2: Financial Position - The properties have an associated mortgage loan with a principal balance of approximately $6 million, resulting in net positive equity of approximately $3.9 million [2]. - The Company is exploring monetization options for both properties and will provide updates as progress is made [2]. Group 3: Company Overview - Safe and Green Development Corporation focuses on acquiring and investing in properties across the U.S. for future development into green housing projects [4]. - The Company owns Resource Group US Holdings LLC, which operates an organics processing facility and is expanding into sustainable potting media production [4]. - The Company also owns Majestic World Holdings LLC, which has developed a real estate AI platform to enhance transaction efficiency and increase margins on home sales [4].

Core Insights - Safe and Green Development Corporation (SGD) has appointed three new members to its Board of Directors, enhancing its strategic direction following the acquisition of Resource Group US Holdings LLC [1] - The new directors, Bjarne Borg, James D. Burnham, and Anthony M. Cialone, bring extensive experience in real estate development, environmental engineering, private equity, and renewable technologies [1][5] Company Overview - Safe and Green Development Corporation focuses on real estate development, particularly in acquiring and investing in properties for green housing projects across the United States [6] - The company wholly owns Resource Group US Holdings LLC, which operates an 80+ acre organics processing facility in Florida, processing green waste and producing sustainable potting media [6] New Board Members' Backgrounds - Bjarne Borg has over 35 years of experience in real estate and renewable energy, co-founding Index Investment Group and serving on various advisory boards [2] - James D. Burnham has over 30 years of experience in mergers and acquisitions, primarily in the solid waste industry, and has co-founded Encell Composites [3] - Anthony M. Cialone has over 30 years of executive leadership experience, focusing on corporate operations and strategic planning, and has held multiple leadership roles in various companies [4]

Core Insights - Safe and Green Development Corporation's subsidiary, Resource Group US Holdings LLC, is expanding into high-value potting media and soil substrates using advanced milling technology [1][2] - The company aims to transition from commodity compost to higher-value markets, introducing sustainable products under the "Renewable Earth™" brand, with potential pricing reaching approximately $150 per ton, which is up to five times the value of traditional compost [1][2] - The implementation of Microtec milling technology, which has over 90 global installations, is expected to enhance production capabilities and market access [1][2] Company Overview - Safe and Green Development Corporation focuses on real estate development, particularly in green housing projects across the United States, and wholly owns Resource Group US Holdings LLC, which operates an organics processing facility in Florida [3] - Resource processes source-separated green waste and is expanding into sustainable, high-margin soil products through advanced milling technology [3] - The company also owns Majestic World Holdings LLC, which has developed a real estate AI platform to enhance transaction efficiency and increase margins on home sales [3] Market Potential - The introduction of the Renewable Earth product line is expected to create circular economic value by reducing reliance on environmentally harmful materials like peat and imported coir [2][5] - The company is positioned to lead in sustainable soil solutions for the horticulture, agriculture, and consumer landscaping sectors, focusing on performance, sustainability, and impact [2][5] - Resource's logistics and proprietary processing capabilities are expected to unlock a scalable and environmentally responsible business model with attractive margins and robust growth potential [2][5]

Core Viewpoint - The acquisition of Resource Group by Safe and Green Development Corporation (SGD) is a strategic move aimed at enhancing revenue-generating operations and aligning with the company's vision for sustainable development [2][5]. Company Overview - Safe and Green Development Corporation is a publicly traded real estate and development company focused on innovative and green building practices, utilizing prefabricated modules made from wood and steel [12]. - Resource Group US Holdings LLC specializes in transforming organic green waste into engineered soil and mulch products, providing sustainable solutions for various sectors [3]. Acquisition Details - SGD has completed the acquisition of Resource Group, which includes a permitted composting facility, two green waste aggregation sites, and a transportation fleet [2]. - The acquisition is expected to add significant revenues and growth potential to SGD's core business [5]. - SGD issued 376,818 shares of common stock, 1,500,000 shares of non-voting Series A Convertible Preferred Stock, and $480,000 in unsecured promissory notes as part of the acquisition [5]. Operational Integration - The Resource Group team will continue in their current roles, collaborating with SGD's leadership to ensure a seamless transition and integration of operations [4]. - The combined entity is working on aligning operations, optimizing logistics, and expanding sales of environmentally responsible products [11]. Future Plans - SGD plans to reconstitute its board of directors to include members from Resource Group, enhancing governance and oversight [6]. - The company is in the process of rebranding under a new name, which will be announced soon [11].

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements](index=3&type=section&id=ITEM%201.%20Financial%20Statements) The company reported a reduced net loss of $2.18 million in Q1 2025, driven by lower payroll, while shifting to engineered soils despite going concern doubts [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheet Highlights (Unaudited) | Account | March 31, 2025 (USD) | December 31, 2024 (USD) | Change (USD) | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Cash | $17,540 | $296,202 | ($278,662) | | Notes receivable | $5,460,672 | $960,672 | $4,500,000 | | Total Assets | $13,105,776 | $12,753,792 | $351,984 | | **Liabilities & Equity** | | | | | Total current liabilities | $11,989,079 | $10,400,657 | $1,588,422 | | Total liabilities | $12,804,648 | $11,900,614 | $904,034 | | Total stockholder's equity | $301,128 | $853,178 | ($552,050) | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Condensed Consolidated Statements of Operations (Unaudited) | Account | Three Months Ended Mar 31, 2025 (USD) | Three Months Ended Mar 31, 2024 (USD) | Change (USD) | | :--- | :--- | :--- | :--- | | Sales | $18,170 | $49,816 | ($31,646) | | Gross Profit | $6,370 | $49,816 | ($43,446) | | Payroll and related expenses | $451,451 | $2,016,087 | ($1,564,636) | | General and administrative expenses | $735,120 | $466,254 | $268,866 | | Operating loss | ($1,263,862) | ($2,501,675) | $1,237,813 | | Interest expense | ($954,648) | ($565,996) | ($388,652) | | **Net loss** | **($2,179,993)** | **($3,067,671)** | **$887,678** | | **Net loss per share (Basic and diluted)** | **($1.08)** | **($5.17)** | **$4.09** | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary (Unaudited) | Activity | Three Months Ended Mar 31, 2025 (USD) | Three Months Ended Mar 31, 2024 (USD) | | :--- | :--- | :--- | | Net cash used in operating activities | ($551,874) | ($693,778) | | Net cash used in investing activities | ($10,000) | ($87,799) | | Net cash provided by financing activities | $283,211 | $855,878 | | **Net change in cash** | **($278,662)** | **$74,301** | | Cash – beginning of period | $296,202 | $3,236 | | **Cash – end of period** | **$17,540** | **$77,537** | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) - The company is shifting its primary focus from real estate development to the engineered soils business through the planned acquisition of Resource Group US Holdings LLC, and is monetizing real estate holdings to support this transition[22](index=22&type=chunk) - The company has incurred net losses since inception and has a net capital deficiency, raising substantial doubt about its ability to continue as a going concern, relying on bridge financing and equity/debt issuance[23](index=23&type=chunk) - In March 2025, the company sold its 60% interest in the Sugar Phase I JV to Milk & Honey, deconsolidating Sugar Phase's activities and now accounting for its remaining interest using the equity method[39](index=39&type=chunk)[40](index=40&type=chunk)[146](index=146&type=chunk) - In February 2025, the company sold its 10% equity interest in JDI-Cumberland Inlet, LLC for a **$4.5 million** promissory note due February 2026, recording a deferred gain of **$1.475 million** due to collection uncertainty[48](index=48&type=chunk)[70](index=70&type=chunk) - The company has entered into multiple complex financing agreements, including secured convertible debentures with Arena Investors, with **$1.1 million** of Arena debentures converted into **591,254 shares** of common stock during Q1 2025[93](index=93&type=chunk)[110](index=110&type=chunk) - The company operates in two segments: Real Estate Development and Technology, with Q1 2025 operating losses of **$1.25 million** for Real Estate and **$10,022** for Technology[144](index=144&type=chunk) - Subsequent to quarter end, on April 4, 2025, the company closed the third tranche of financing with Arena Investors, issuing **$555,555** in convertible debentures for a purchase price of **$500,000**[147](index=147&type=chunk) [Management's Discussion and Analysis of Financial Condition and Result of Operations](index=39&type=section&id=ITEM%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Result%20of%20Operations) The company is transitioning to engineered soils, monetizing real estate, and improved Q1 2025 net loss to $2.18 million due to lower payroll, but faces critical liquidity and going concern doubts - The company is strategically shifting its business focus towards the transformation of organic green waste into engineered soil and mulch products, contingent on the closing of the Resource Group acquisition[166](index=166&type=chunk)[178](index=178&type=chunk) - To fund operations and its strategic shift, the company is monetizing its real estate holdings, including selling its interest in the JDI-Cumberland project for a **$4.5 million** note and selling its interest in the Sugar Phase I JV[165](index=165&type=chunk)[168](index=168&type=chunk)[177](index=177&type=chunk) Results of Operations Comparison (Unaudited) | Account | Three Months Ended Mar 31, 2025 (USD) | Three Months Ended Mar 31, 2024 (USD) | | :--- | :--- | :--- | | Sales | $18,170 | $49,816 | | Payroll and related expenses | $451,451 | $2,016,087 | | General and administrative expenses | $735,120 | $466,254 | | Operating loss | ($1,263,862) | ($2,501,675) | | Net loss | ($2,179,993) | ($3,067,671) | - The decrease in net loss for Q1 2025 compared to Q1 2024 was primarily driven by a **$1.56 million** reduction in payroll and related expenses, as the 2024 period included **$1.75 million** in stock-based compensation[190](index=190&type=chunk) - The company's financial condition raises substantial doubt about its ability to continue as a going concern, with cash of only **$17,540** as of March 31, 2025, relying on financing arrangements like the Arena private placement and a **$50 million** equity line of credit (ELOC) to maintain operations[196](index=196&type=chunk)[197](index=197&type=chunk)[200](index=200&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=51&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, the company is exempt from providing quantitative and qualitative market risk disclosures - As a smaller reporting company, the registrant is not required to provide quantitative and qualitative disclosures about market risk[217](index=217&type=chunk) [Controls and Procedures](index=51&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of March 31, 2025, having remediated a material weakness in internal controls during Q1 2025 - Management concluded that as of March 31, 2025, the company's disclosure controls and procedures were effective at a reasonable assurance level[219](index=219&type=chunk) - A material weakness in internal controls over financial reporting, previously identified as of June 30, 2024, and December 31, 2024, was remediated during Q1 2025 by adding four more external consultants to assist in financial statement preparation[221](index=221&type=chunk)[222](index=222&type=chunk) [PART II. OTHER INFORMATION](index=52&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=52&type=section&id=ITEM%201.%20Legal%20Proceedings) The company is not currently involved in any material legal proceedings, though it may face claims in the normal course of business - The Company is not currently involved in any legal proceedings[143](index=143&type=chunk)[225](index=225&type=chunk) [Risk Factors](index=52&type=section&id=ITEM%201A.%20Risk%20Factors) The company faces significant risks including substantial doubt about its going concern ability, capital needs, potential control weaknesses, and Nasdaq delisting risk - Auditors have expressed substantial doubt about the company's ability to continue as a going concern due to a history of significant net losses and the expectation of future losses[227](index=227&type=chunk) - The company needs to raise additional capital to support its business plans but faces uncertainty in obtaining funding on acceptable terms, which may force delays or reductions in development plans[228](index=228&type=chunk)[229](index=229&type=chunk) - The company previously identified and has since remediated a material weakness in its internal control over financial reporting; however, there is a risk that additional weaknesses could be identified in the future, potentially leading to material errors in financial statements[230](index=230&type=chunk)[231](index=231&type=chunk)[232](index=232&type=chunk) - The company faces the risk of its common stock being delisted from Nasdaq if it fails to meet continued listing requirements, having previously received and since regained compliance from non-compliance notices regarding minimum stockholders' equity and minimum bid price requirements[234](index=234&type=chunk)[235](index=235&type=chunk)[239](index=239&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=55&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered equity securities were sold during Q1 2025, except as previously disclosed in SEC filings - No equity securities were sold in unregistered transactions during the quarter ended March 31, 2025, other than as previously disclosed in SEC filings[244](index=244&type=chunk) [Defaults Upon Senior Securities](index=55&type=section&id=ITEM%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon senior securities - The company reports no defaults upon senior securities[245](index=245&type=chunk) [Mine Safety Disclosures](index=55&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - This item is not applicable to the company[246](index=246&type=chunk) [Other Information](index=55&type=section&id=ITEM%205.%20Other%20Information) No directors or executive officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q1 2025 - No directors or executive officers adopted or terminated any "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" during the first quarter of 2025[247](index=247&type=chunk) [Exhibits](index=56&type=section&id=ITEM%206.%20Exhibits) This section provides an index of exhibits filed with the Form 10-Q, including corporate governance, financing, and SOX certifications - The report includes an index of all exhibits filed, such as the Certificate of Incorporation, Bylaws, various financing agreements and amendments, and CEO/CFO certifications[250](index=250&type=chunk)[251](index=251&type=chunk)

Core Insights - Safe and Green Development Corporation (SGD) announced a strategic acquisition of Resource Group US Holdings LLC (RSG), aimed at long-term revenue growth in engineered soils and composting [1][2] - SGD achieved its first quarter of positive Adjusted EBITDA in Q4 2024, indicating progress in financial performance [1][6] - The company is focusing on monetizing non-core assets and advancing residential development projects to support future growth [1][3] Acquisition Details - The acquisition of RSG includes two subsidiaries: RGUS, which has a patented composting and engineered soils machinery, and ZEI, a logistics and trucking business [2] - RSG generated $17.5 million in revenue in 2023 and $18.75 million in 2024, with a reduced net loss from $6.2 million to $936,000 [2] - The transaction is expected to close by Q2 2025, pending customary conditions and RSG's audit completion [2] Financial Performance - For the full year 2024, SGD reported a net loss of $8.91 million, with an Adjusted EBITDA of $(1.77) million [6] - In Q4 2024, the company recorded a net loss of $1.53 million and an Adjusted EBITDA of $38,841, marking a significant improvement [6] Strategic Initiatives - SGD sold its St. Mary's property for $1.4 million to reduce high-interest debt and reinvest in aligned initiatives [3] - The company made construction progress in its Sugar Phase I development in South Texas, completing the first five homes [4] - SGD secured up to $10 million in potential investment from Arena Investors to support its strategic growth [5]

Revenue and Financial Performance - The company generated minimal revenue to date, focusing on acquiring and developing properties for green single or multi-family projects[26]. - The company reported a net loss of $8,908,475 for the year ended December 31, 2024, compared to a net loss of $4,200,541 for the year ended December 31, 2023[102]. - As of December 31, 2024, the company had cash reserves of $296,202 and an accumulated deficit totaling $16 million[104]. - The company expects to incur additional operating losses in the future and does not anticipate generating substantial revenue from its development activities for several years[107]. - The company may experience fluctuations in quarterly operating results due to various factors, including market conditions and competition[144]. - The company has never paid cash dividends on its common stock and does not anticipate doing so in the foreseeable future[223]. Acquisitions and Joint Ventures - The company entered into a Membership Interest Purchase Agreement to acquire Resource Group for $480,000 in cash and shares, shifting focus to engineered soil and mulch products[28][29]. - The company acquired Majestic World Holdings for 500,000 shares and $500,000 in cash, integrating AI technology into real estate operations[37][38]. - The company acquired a 50% membership interest in Norman Berry II Owners, LLC for $600,000, with expected development costs of approximately $35,000,000[66]. - The company acquired a 10% non-dilutable equity interest in JDI-Cumberland for $3 million, which plans to develop a mixed-use community with 3,500 units[217]. - The company invested $600,000 for a 50% membership interest in Norman Berry II Owners, LLC, which is expected to develop 134 multi-family rental apartments[216]. - The company entered into a Joint Venture Agreement with Milk & Honey for developing single-family homes, with the company contributing $100,000 and holding a 60% interest[55][57]. Real Estate Development - The company completed construction of five single-family homes in a joint venture, with delivery expected in Q1 2025, and is developing 57 single-family lots in another project[27]. - The company acquired a 50+ acre site in Lago Vista, Texas for $3,500,000, with plans for 174 condominium units and 30% short-term rental allowance[48]. - The St. Mary's Site was purchased for $296,870, with plans for a 120,000 square foot manufacturing facility, and a promissory note of $148,300 was extended for one year[71]. - The McLean Mixed Use Site was acquired for $868,000, with plans for 800 residential units and 1.1 million square feet of industrial space[75]. - The company acquired the Lago Vista property for $11.5 million, which is approved for 174 condominium units and may include rental units[215]. - The company acquired 100% ownership of approximately 114 mixed-use acres in Durant, Oklahoma for $868,000, anticipating the development of 800 residential units and 1.1 million square feet of industrial space[218]. Financing and Capital Structure - A Short-Term Note of $2,000,000 was issued, with a 12% interest rate, and has been extended to February 1, 2024[49]. - A promissory note of $5,000,000 was issued on March 31, 2023, with a current interest rate of 13.5%, due in full on April 1, 2024[50][51]. - The company has received a secured loan of $1,750,000 from BCV S&G DevCorp, with a potential total of up to $3,000,000, maturing on December 1, 2025[149]. - The company is considering multiple financing alternatives, including equity and debt financings, to support its long-term business plans[105]. - Significant additional capital will be needed in the future, which may lead to substantial dilution for existing stockholders due to potential equity issuances[185]. Regulatory Compliance and Risks - The company is committed to compliance with evolving regulations surrounding AI and data privacy, including the CCPA and GDPR[46][47]. - The company has utilized reduced disclosure obligations as an emerging growth company, allowing it to present only two years of audited financial statements[95]. - The company incurred significant costs related to compliance with the Sarbanes-Oxley Act and other regulatory requirements, impacting management's time and resources[173]. - A material weakness in internal control over financial reporting was identified as of June 30, 2024, and continued to be ineffective as of December 31, 2024[167]. - Compliance with environmental laws may impose significant costs and liabilities, impacting financial position and operational costs[130]. Market Conditions and Competition - The real estate industry is highly cyclical, influenced by economic conditions, which may materially affect business and cash flows[136]. - The company faces significant competition in the composting and AI technology markets from established firms with greater financial resources[112][113]. - The company faces intense competition in the composting and engineered soils industry, which may require significant investments in innovation to maintain market share[198]. - Economic and geopolitical factors, including inflation and supply chain disruptions, could adversely impact the company's business and operating results[154]. Cybersecurity and Technology - The company maintains a comprehensive cybersecurity program to manage and mitigate threats, ensuring the integrity and confidentiality of client information[208]. - The company has engaged a third-party firm to audit its cybersecurity and risk management systems to ensure integrity[210]. - To date, the company has not experienced any cybersecurity incidents, but acknowledges the prevalence of cyber threats in the current landscape[211]. - The company is increasingly dependent on information technology, facing risks related to cybersecurity and data breaches that could adversely affect operations[157]. Future Outlook and Strategic Plans - The company plans to continue entering joint ventures to diversify its portfolio and preserve capital resources[81]. - The company plans to enter a new line of business focused on transforming organic green waste into engineered soil and mulch products, with no prior experience in this market[101]. - The proposed acquisition of Resource Group is subject to various conditions, and failure to complete it could hinder strategic growth plans[203]. - The integration of Resource Group's operations may present challenges that could adversely affect the company's business and financial condition[206].