425: Safe and Green Development Corporation Announces Acquisition of Resource Group US Holdings LLC

Safe and Green Development Corporation (SGD) announces its intent to acquire Resource Group US Holdings LLC, aiming to leverage their technology in the composting and engineered soils industry.

Summary

• Safe and Green Development Corporation (SGD) has announced its decision to acquire 100% of the equity interests in Resource Group US Holdings LLC.
• Resource Group holds an exclusive license to a technology in the composting and engineered soils industry.
• The acquisition is contingent on customary closing conditions and completion of Resource Group's audit.
• SGD intends to leverage Resource Group's technology to redevelop land opportunities.
• The primary focus of SGD will shift to Resource Group's core business.
• Resource Group's vertical integration and ownership of a logistics business offer additional growth opportunities.
• Resource Group's revenues increased from $16 million (unaudited) in 2023 to $19.1 million (unaudited) in 2024.
• SGD anticipates pro forma revenues of approximately $25 million in 2025 after the acquisition.
• SGD believes the acquisition will create value for its shareholders.
• SGD intends to file a proxy statement with the SEC for shareholder approval of the issuance of 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 equal to 19% of the Company's outstanding shares of common stock at closing, will equal 49% of the Company's outstanding shares of common stock at closing.

Sentiment

Score: 7

Explanation: The document expresses a positive outlook regarding the acquisition and its potential benefits, but also acknowledges risks and uncertainties. The sentiment is moderately positive.

Positives

• The acquisition provides SGD with access to exclusive technology in a growing industry.
• Resource Group has demonstrated substantial revenue growth in recent years.
• The combined entity is projected to achieve $25 million in pro forma revenues in 2025.
• Resource Group's business model is scalable and replicable, offering opportunities for rapid expansion.
• Resource Group's vertical integration and ownership of a logistics business offer additional growth opportunities.

Negatives

• The market has not fully recognized the transformative potential and effect this deal will have on the company and the value it will generate for its esteemed shareholders.

Risks

• The acquisition is contingent on customary closing conditions and the completion of Resource Group's audit.
• The company's ability to acquire the equity interests in Resource Group as planned is a risk.
• The company's ability to expand the waste-to-value composting business using Resource Group's proprietary technology and increase cash flow is a risk.
• The company's ability to obtain the capital necessary to fund its activities is a risk.
• The company's ability to monetize its real estate holdings is a risk.

Future Outlook

The company anticipates pro forma revenues of approximately $25 million in 2025 and believes the acquisition will create tremendous value for shareholders.

Management Comments

• We wanted to provide you with insight into our decision to move forward with the acquisition of Resource Group US Holdings LLC and the strategic reasoning behind this pivotal move.
• We firmly believe that this acquisition will create tremendous value for our shareholders.
• We remain committed to executing this acquisition seamlessly and delivering strong financial performance in the years to come.

Industry Context

The acquisition positions Safe and Green Development Corporation in the growing composting and engineered soils industry, potentially allowing them to capitalize on increasing demand for sustainable waste management and soil solutions.

Comparison to Industry Standards

• It is difficult to compare the results to industry standards without knowing the specific metrics of comparable companies in the composting and engineered soils industry.
• Companies like Waste Management and Republic Services are major players in the waste management sector, but their composting operations may not be directly comparable to Resource Group's technology-focused approach.
• Other companies specializing in soil solutions and environmental technologies would provide a better benchmark, but more information is needed to make a detailed comparison.

Stakeholder Impact

• Shareholders are expected to benefit from the anticipated value creation resulting from the acquisition.
• Employees of both companies may experience changes as a result of the integration.
• Customers of Resource Group may see expanded offerings and improved services.
• Suppliers of both companies may experience changes in demand and procurement processes.

Next Steps

• The company intends to file a proxy statement with the SEC for shareholder approval.
• The company will work to satisfy customary closing conditions and complete Resource Group's audit.
• The company will focus on integrating Resource Group's business and leveraging its technology.

Key Dates