MIAMI, Feb. 26,
2025 /PRNewswire/ -- Safe and Green Development
Corporation (NASDAQ: SGD) ("SGD" or the
"Company"), a real estate development and innovation
company, is announcing that it has entered into a definitive
agreement to acquire 100% of the equity interests in Resource Group
US Holdings LLC ("RSG" or "Resource Group")
(https://www.resourcegroupus.com/) for $480,000 in cash, the issuance of 19% shares of
SGD Restricted Common Stock at Closing and a Convertible Note in an
amount to be determined at Closing, convertible into shares of SGD
Restricted Common Stock subject to the receipt of SGD
Shareholder Approval Post-Closing in accordance with Nasdaq rules.
The transaction is expected to close early in the Second Quarter of
2025 subject to customary closing conditions and the completion of
RSG's audit. The shares of SGD Restricted Common Stock to be issued
at Closing and additional shares of SGD restricted common stock to
be issuable under the Convertible Note will together equal 49% of
SGD's outstanding shares of Common Stock at Closing. The SG DevCo
Board of Directors unanimously approved this transaction after
reviewing a fairness opinion, internal and third party buy-side due
diligence and a GAAP review of financials. The acquisition is
expected to add significant cashflow from Resource Group's
waste-to-value composting business.
A message from CEO, David
Villarreal:
"In an effort to ensure the long-term success of the Company, we
have spent a significant amount of time streamlining our operations
and identifying suitable targets to maximize shareholder value. We
have evaluated several prospects and ultimately have negotiated
what we believe is a transaction that brings substantial value to
the existing SG DevCo shareholders in both the short and long
term. This transaction will help transform the Company's financial
profile by strengthening the balance sheet and adding significant
revenues. This strategic acquisition should drive value by focusing
on and expanding the waste-to-value composting business using
Resource Group's proprietary technology. We have determined that
Resource Group has a competitive advantage in a growing market that
will set the foundation for strong and rapid growth in the coming
years. We are excited by the prospect of this transaction and are
looking forward to working with Resource Group's team to scale the
business and increase cash flow to create substantial value for the
shareholders."
Resource Group
RSG is a next-generation, full-service organic recycling and
compost technology company specializing in transforming targeted
organic green waste materials into engineered, environmentally
friendly soil and mulch products. These sustainable solutions
replace costly and environmentally harmful fertilizers, supporting
greener practices across industries. With an established facility
for aggregating organic landscape debris, Resource Group offers
year-round collection and disposal services through high-capacity
grapple trucks, open-top walking floor trailers, and variable-sized
containers serving green waste generators, landscaping companies,
golf courses, communities, and municipalities. Resource Group works
to streamline operations by internalizing transportation services,
reducing over-the-road mileage, lowering disposal costs, and
maximizing efficiency. Through its commitment to Closed-Loop and
Zero-Landfill Solutions, Resource Group seeks to deliver both
economic and environmental value to its customers.
- Market Size: The global compost-to-substrate market is
valued at approximately $10B, driven
by demand from horticulture sectors.
- Intellectual Property: Resource Group maintains an
exclusive license for the use of Microtec technology for biomass
applications in North America,
appraised by a third party valued at $10.5
million.
- Myakka Site: The site on which the composting operations
currently sit in Myakka City, FL
has been appraised at $12.75
million.
- Contracts with Customers: The logistics subsidiary of
Resource Group has contracts with customers that amount to
$10.7 million in aggregate potential
revenue.
- Engineered Soil MOU's: Signed MOUs project incremental
revenues that are not part of the current revenues from various
product categories, including compost, premium blended products,
and woody materials.
- Competitive Advantages:
-
- Cost Efficiency: RSG's production costs using the
Microtec technology are significantly lower than traditional media
feedstock costs, creating significant savings for end users while
maintaining high-quality products.
- Innovative Technology: Microtec's proprietary
kinetic/convection grinding system reduces energy requirements,
optimizes nutrient retention, and creates a high-quality, expanded
volume product.
- Sustainability: Operations focus on green waste
aggregation, nutrient shifting, and non-forestry-derived
feedstocks, providing environmentally friendly and economically
viable solutions.
- Logistics and Scalability:
-
- Established Infrastructure: RGS operates a permitted
compost facility in Myakka City,
FL, supported by 23 tractors and 82 walking-floor trailers
for transportation.
- Green Waste Aggregation Sites: Two green waste
aggregation sites streamline operations and secure 30-40% of
inbound feedstock for the Myakka facility.
- Demand Drivers:
-
- ESG Goals: Increasing corporate commitments to carbon
reduction and green solutions are expected to enhance market
opportunities.
- Rising Input Costs: Potting and growing media prices
have reached record highs, with fertilizer components up 30% alone
in 2022, after being up nearly 80% in 2021 (World Bank).
"At Resource Group US, we are seeking to redefine what it means
to transform waste into value. By integrating cutting-edge
technology with sustainable practices, we aim to not only meet the
growing demand for greener solutions but also create substantial
economic and environmental benefits for our communities. Our
mission is to deliver innovative products that align with both
industry needs and global sustainability goals," stated
Anthony M. Cialone, CEO, Resource
Group
Index Investment Group ("Index")
The transaction will result in Index Investment Group becoming a
significant shareholder of SGD as co-founder of Index, Bjarne Borg, will join the SGD Board of
Directors upon closing. The addition of a strategic shareholder
will be a milestone for the Company as it looks to broaden its
shareholder base. Index Investment Group has made significant
investments in real estate and renewable energy. The real estate
arm spans residential, commercial, and industrial assets in
the United States, Canada, and Sweden while the investments in renewable
energy, particularly deep-sea offshore wind and biomass energy
power plants, are expected to yield over 20 GW gross output of
green energy in the when fully operational. Index Investment Group,
headquartered in Jupiter, FL, has
been involved in over thirty developments across North America, with a focus on Florida since 2011. Additionally, Index owns
nearly 3 million square feet of commercial-industrial properties in
the upstate New York market. Borg
currently holds leadership positions as the Executive Chairman of
the Board of Index Investment Group, chairman of the board of
publicly traded Hexicon Group, and advisory board roles in several
regional banks.
About The Transaction
- Executive Management: David
Villarreal and Nicolai Brune
will remain as the CEO and CFO of the Public Company. The newly
acquired subsidiary, RSG, will keep its current management in
place.
- Company Name: The Company will effectuate a name change and
trade under a new symbol on the NASDAQ Capital Market after the
closing of the transaction.
- Board Structure: The Board will be organized such that 4
directors from SGD will stay on and RSG will appoint 3 directors
for a total of 7 directors.
About Safe and Green Development Corporation (SG
DevCo)
Safe and Green Development Corporation is a real estate
development company. Formed in 2021, it focuses primarily on the
direct acquisition and indirect investment in properties nationally
that will be further developed in the future into green single or
multi-family projects. Additionally, a wholly owned subsidiary of
SG DevCo, Majestic World Holdings LLC, is a prop-tech company
that has created a real estate AI Platform the Company integrates
to strategically increase the margins on homes sold by facilitating
mortgage services and down payment assistance. 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.
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 acquiring the equity interests in
Resource Group, closing the transaction early in the Second Quarter
of 2025 subject to customary closing conditions and the completion
of RSG's audit, the acquisition adding significant cashflow from
Resource Group's waste-to-value composting business, the
transaction bringing substantial value to the existing SG DevCo
shareholders in both the short and long term, transforming the
Company's financial profile by strengthening the balance sheet and
adding significant revenues, the acquisition driving value by
focusing on and expanding the waste-to-value composting business
using Resource Group's proprietary technology, Resource Group's
competitive advantage setting the foundation for strong and rapid
growth in the coming years, working with Resource Group's team to
scale the business and increase cash flow to create substantial
value for the shareholders, streamlining Resource Group's
operations by internalizing transportation services, reducing
over-the-road mileage, lowering disposal costs, and maximizing
efficiency, delivering both economic and environmental value to
Resource Group's customers, contracts with customers of the
logistics subsidiary of Resource Group amounting to
$10.7 million in aggregate potential
revenue, signed MOUs projecting incremental revenues that are not
part of the current revenues from various product categories,
including compost, premium blended products, and woody materials.
increasing corporate commitments to carbon reduction and green
solutions enhancing market opportunities, Resource Group
redefining what it means to transform waste into value, Resource
Group meeting the growing demand for greener solutions but also
creating substantial economic and environmental benefits for the
communities it serves by integrating cutting-edge technology with
sustainable practices, delivering innovative products that align
with both industry needs and global sustainability goals,
broadening the Company's shareholder base, using Majestic World
Holdings LLC's real estate AI Platform to strategically increase
the margins on homes sold by facilitating mortgage services and
down payment assistance and MyVONIA simplifying 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, the Company's ability to acquire the equity
interests in Resource Group as planned, the Company's ability to
strengthen its the balance sheet and add significant revenues, the
Company' ability to expand the waste-to-value composting business
using Resource Group's proprietary technology and increase cash
flow, the Company's ability to meet the growing demand for greener
solutions and create substantial economic and environmental
benefits for the communities Resource Group serves by integrating
cutting-edge technology with sustainable practices, the ability of
Resource Group to convert signed MOUs projecting incremental
revenues that are not part of the current revenues into definitive
agreements, the Company's ability to broaden its shareholder base,
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
