# RenX Enterprises Corp.: Form 10-Q for the period ended Mar 31, 2025

- Company: [RenX Enterprises Corp.](/companies/renx.md) (CIK 1959023)
- Form: 10-Q
- Filed: 2025-05-15
- Accepted by EDGAR: May 15, 2025, 20:56 ET
- Period: 2025-03-31
- Accession: 0001213900-25-044332
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1959023/000121390025044332/ea0242176-10q_safe.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1959023/000121390025044332/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-01-01 to 2025-03-31 | $18.2k | us-gaap:Revenues |
| Cost of revenue | 3 months, 2025-01-01 to 2025-03-31 | $11.8k | us-gaap:CostOfRevenue |
| Gross profit | 3 months, 2025-01-01 to 2025-03-31 | $6.4k | us-gaap:GrossProfit |
| Operating income | 3 months, 2025-01-01 to 2025-03-31 | −$1.3m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2025-01-01 to 2025-03-31 | $954.6k | us-gaap:InterestExpenseNonoperating |
| Net income | 3 months, 2025-01-01 to 2025-03-31 | −$2.2m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-01-01 to 2025-03-31 | −$1.08 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-01-01 to 2025-03-31 | −$1.08 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-01-01 to 2025-03-31 | 2,011,148 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2025-01-01 to 2025-03-31 | −$551.9k | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Current assets | at 2025-03-31 | $5.7m | us-gaap:AssetsCurrent |
| Total assets | at 2025-03-31 | $13.1m | us-gaap:Assets |
| Current liabilities | at 2025-03-31 | $12.0m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-03-31 | $12.8m | us-gaap:Liabilities |
| Short-term borrowings | at 2025-03-31 | $8.7m | us-gaap:ShortTermBorrowings |
| Shareholders' equity | at 2025-03-31 | $301.1k | us-gaap:StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest |

## Management's discussion and analysis

As filed, 45,907 characters.

### Introduction and Certain Cautionary Statements

As used in this Quarterly Report on Form 10-Q, unless the context requires otherwise, references to the “Company,” “SG DevCo,” “we,” “us,” and “our” refer to Safe and Green Development Corporation and its subsidiaries. The following discussion and analysis of the financial condition and results of our operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes and schedules included elsewhere in this Quarterly Report on Form 10-Q and with our audited consolidated financial statements for the year ended December 31, 2024 and 2023 and the accompanying notes, which are included in our Annual Report for the year ended December 31, 2024 filed with the Securities and Exchange Commission on March 31, 2025 (the “2024 10-K”). This discussion, particularly information with respect to our future operations, includes forward-looking statements that involve risks and uncertainties as described under the heading “Special Note Regarding Forward-Looking Statements” in this Quarterly Report on Form10-Q. You should review the disclosure under the heading “Risk Factors” in this Quarterly Report on Form 10-Q and the 2024 10-K for a discussion for important factors that could cause our actual results to differ materially from those anticipated in these forward-looking statements.

### Special Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed in the forward-looking statements. The statements contained in this report that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Statements contained in this Quarterly Report on Form 10-Q may use forward-looking terminology, such as “anticipates,” “believes,” “could,” “would,” “estimates,” “may,” “might,” “plan,” “expect,” “intend,” “should,” “will,” or other variations on these terms or their negatives. All statements other than statements of historical facts are statements that could potentially be forward-looking. We caution that forward-looking statements involve risks and uncertainties, and actual results could differ materially from those expressed or implied in these forward-looking statements or could affect the extent to which a particular objective, projection, estimate or prediction is realized.

Forward-looking statements are subject to risks and uncertainties. Actual results could differ materially from those expressed in or implied by such forward-looking statements due to a variety of factors, including:

- Our limited operating history makes it difficult for us to evaluate our future business prospects.
- Our auditors have expressed substantial doubt about our ability to continue as a going concern.
- Our financial condition and results of operations could be negatively affected if we fail to grow or fail to manage our growth or investments effectively.
- The long-term sustainability of our operations as well as future growth depends in part upon our ability to acquire land parcels suitable for residential projects at reasonable prices.
- We operate in a highly competitive market for investment opportunities, and we may be unable to identify and complete acquisitions of real property assets.
- Our property portfolio has a high concentration of properties located in certain states.
- There can be no assurance that the properties in our development pipeline will be completed in accordance with the anticipated timing or cost.
- Our insurance coverage on our properties may be inadequate to cover any losses we may incur and our insurance costs may increase.
- Our operating results may be negatively affected by potential development and construction delays and resultant increased costs and risks.
- We rely on third-party suppliers and long supply chains, and if we fail to identify and develop relationships with a sufficient number of qualified suppliers, or if there is a significant interruption in our supply chains, our ability to timely and efficiently access raw materials that meet our standards for quality could be adversely affected.
- Previously undetected environmentally hazardous conditions may adversely affect our business.
- Legislative, regulatory, accounting or tax rules, and any changes to them or actions brought to enforce them, could adversely affect us.
- If we were deemed to be an investment company, applicable restrictions could make it impractical for us to continue our business as contemplated and could have an adverse effect on our business.
- Our industry is cyclical and adverse changes in general and local economic conditions could reduce the demand for housing and, as a result, could have a material adverse effect on us.
- Fluctuations in real estate values may require us to write-down the book value of our real estate assets.
- We could be impacted by our investments through joint ventures, which involve risks not present in investments in which we are the sole owner.
- We may not be able to sell our real property assets when we desire.
- Access to financing sources may not be available on favorable terms, or at all, which could adversely affect our ability to maximize our returns.
- If we were to default in our obligation to repay the loan we received from BCV S&G DevCorp, Peak One Opportunity Fund, L.P., by Peak One Investments, LLC, collectively referred to as (“Peak One”), it could disrupt or adversely affect our business and our stock price could decline.
- Future outbreaks of any highly infectious or contagious diseases, could materially and adversely impact our performance, financial condition, results of operations and cash flows.
- SG Holdings beneficially owns a significant portion of our outstanding common stock, and it may therefore be able to substantially control our management and affairs.
- We currently do not intend to pay dividends on our common stock. Consequently, our stockholders’ ability to achieve a return on their investment will depend on appreciation in the price of our common stock.
- We may issue shares of preferred or common stock in the future, which could dilute your percentage ownership of the company.
- If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline
- Provisions in our corporate charter documents and under Delaware law could make an acquisition of our company more difficult and may prevent attempts by our stockholders to replace or remove our management.
- If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline
- Our failure to comply with continued listing requirements of Nasdaq.
- Risks relating to ownership of our common stock, including high volatility and dilution.

The risks and uncertainties included here are not exhaustive or necessarily in order of importance. Other sections of this report and other reports we file with the SEC include additional factors that could affect our business and financial performance, including discussed in “Part II – Item 1A. Risk Factors” to this Quarterly Report on Form 10-Q as well as the Risk Factors set forth in our 2024 10-K. New risk factors emerge from time to time, and it is not possible for management to predict all such risk factors.

In addition, certain information presented below is based on unaudited financial information. There can be no assurance that there will be no changes to this information once audited financial information is available. As a result, readers are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date of this report. We will not undertake to update any forward-looking statement herein or that may be made from time to time on behalf of us.

### Overview

We were formed in 2021 by Safe & Green Holdings Corp. (“SG Holdings”) for the purpose of real property development utilizing SG Holdings’ proprietary technologies and SG Holdings’ manufacturing facilities. During 2023 and 2024, our business focus was primarily on the direct acquisition and indirect investment in properties nationally to be developed in the future into green single or multi-family projects and increasing our presence in markets with favorable job formation and a favorable demand/supply ratio for multifamily and/or single-family housing. To date, we have generated minimal revenue and our real estate development related activities have consisted mostly of the acquisition and entitlement of three properties, an investment in two entities that have acquired two properties to be further developed, entry into three joint ventures with the intention of developing properties in the Texas market and an investment in real-estate related artificial intelligence (“AI”) assets and entities, as further described below.

In January 2024, we announced that we would strategically look to monetize our real estate holdings throughout 2024 by identifying markets where our land may have increased in value, as demonstrated by third-party appraisals and selling those properties. In connection with this strategy, we have entered into agreements to sell our St. Mary’s site and our Lago Vista site described in more detail below. Additionally, we expect to subdivide our McLean property into buildable single family lots that can subsequently be sold to developers or developed internally. We intend to develop the properties that we own and invest the proceeds of sales of our securities and future financings, both at the corporate and project level, and/or sale proceeds from properties that are sold. However, our ability to develop any properties will be subject to our ability to raise capital either through the sale of equity or by incurring debt for which there can be no assurance.’

In August 2024, we entered into joint ventures with Milk & Honey LLC, Sugar Phase I LLC and Hacienda Olivia Phase II LLC, with the intention of developing green single-family homes in the Southern Texas market. To date, we have started construction on five single family homes in the Sugar Phase joint venture. The homes were delivered during the first quarter of 2025. Additionally, we were developing 57 single family lots through our Hacienda Olivia. We have also entered into a joint venture named Pulga Internacional with the intention of developing an eco-friendly commercial retail outlet.

In February 2025, we entered into a Membership Interest Purchase Agreement (the “Membership Interest Purchase Agreement”) with Resource Group US Holdings LLC (“Resource Group”) and its members to acquire 100% of the membership interests of Resource Group. See “Membership Interest Purchase Agreement” below for additional information about the Membership Interest Purchase Agreement. While the Company has expressed interest in shifting its primary focus to the business conducted by Resource Group—namely, the transformation of targeted organic green waste materials into engineered, environmentally friendly soil and mulch products—there can be no assurance that the acquisition will be consummated as contemplated, or at all. As a result of this potential acquisition, we have begun evaluating a possible strategic realignment of our business by exploring the monetization of certain real estate holdings held directly by the Company and through its joint ventures. These steps remain preliminary and are contingent on the successful closing of the transaction. Discussions with Resource Group remain ongoing, and the parties continue to negotiate outstanding closing deliverables and satisfy customary closing conditions, including the completion of Resource Group’s audit. Following the potential acquisition, we also anticipate reevaluating the projects, technologies, and operations of our real estate-related AI assets; however, no definitive changes to our strategic direction have been made at this time.

**Recent Developments.**

Milk & Honey

On January 16, 2025, Sugar Phase I LLC (“Sugar Phase 1”), our joint venture with Milk & Honey LLC, a Texas limited liability company (“Milk & Honey”), acquired twenty-two (22) lots in South Texas (the “Property”) for a purchase price of $440,000 for development of its residential development project (the “Project”). In connection with the acquisition of the Property, Sugar Phase 1 entered into a Loan Agreement, dated as of January 16, 2025 (the “Loan Agreement”), for the periodic draw down of up to $1,092,672.75 in principal amount of loan proceeds to be used for the completion of the construction of the Project, the payment of the lender’s expenses related to the Loan Agreement and the payment of expenses related to the acquisition by Sugar Phase I of the Property. The loan bears interest at the greater of the 1-Month Term Secured Overnight Financing Rate plus 5.710%, as adjusted monthly, or 9.740%, includes a loan origination fee of $23,110, matures on March 12, 2026 and is secured by the Property and other related collateral. The loan is also guaranteed by each of us and Properties by Milk & Honey LLC (each a “Guarantor”) pursuant to an Unconditional Guaranty, dated January 16, 2025 (the “Guaranty”). The obligations of each Guarantor are joint and several. The Guaranty may be enforced against any Guarantor without attempting to collect from Sugar Phase 1, any other Guarantor or any other person, and without attempting to enforce lender’s rights in any of the collateral. We, Properties by Milk & Honey LLC and the principals of Properties by Milk & Honey LLC also entered into an Indemnity Agreement, dated January 16, 2025 (the “Indemnity Agreement”), for the benefit of the lender under the Loan Agreement, with respect to the Project’s compliance with Environmental Laws, Hazardous Substances Laws and Building Laws (as such terms are defined in the Indemnity Agreement).

On March 6, 2025, we entered into a Buyout Agreement (the “Buyout Agreement”) with Milk & Honey, pursuant to which we agreed to sell to Milk & Honey our 60% membership interest (the “Interest”) in Sugar Phase I LLC, for a purchase price of $700,415.24, reflecting amounts contributed and costs incurred by us in connection with the Sugar Phase I project, to be evidenced by a one-year promissory note (the “Note”) in the principal amount of $700,415.24, bearing interest at 10% per annum.

The Buyout Agreement and Note provide that Interest will be transferred to Milk & Honey incrementally as the Note is repaid. The closing under the Buyout Agreement occurred on March 7, 2025. In connection therewith, Milk & Honey prepaid $120,000.00 of the principal amount due under the Note and the Company transferred 10.27% of our Interest in Sugar Phase I LLC.

As of May 15, 2025, we continue to work with Milk & Honey on the buyout of our 60% membership interest in Sugar Phase I LLC. Under the Buyout Agreement, which closed on March 6, 2025, Milk & Honey agreed to purchase our interest in the joint venture for a total purchase price of $700,415.24, to be paid pursuant to a promissory note.

.As of the date of this filing, Milk & Honey has made two payments totaling $385,867.75, resulting in the transfer of an aggregate 41.5% of our original 60% interest. We currently retain an 18.5% interest in Sugar Phase I LLC, with the remaining balance of $172,000 under the note to be paid in future installments.

We continue to coordinate with Milk & Honey on the remaining payment schedule and ownership transfers.

Mutual Release Agreement Safe & Green Holdings Corp.

On January 29, 2025, we entered into a mutual release and discharge agreement (the “Mutual Release”) with Safe & Green Holdings Corp. (“SGBX”) pursuant to which we forgave and released SGBX from its obligations to us under that certain promissory note, dated August 9, 2023, in the principal amount of $908,322.95 and in respect of $815,522 of inter-company advances from us to SGBX (which amounts had been written off our balance sheet as of December 31, 2023) in exchange for SGBX forgiving $394,329 of inter-company debt owed to SGBX by us and for SGBX transferring 276,425 shares (the “Shares”) of our Common Stock owned by SGBX to us. We currently plan to hold the Shares in our treasury. As a result of this agreement, SGBX will no longer be a stockholder of ours.

Lago Vista Property

On January 30, 2025, LV Peninsula Holding, LLC (“LV Holding”), a wholly owned subsidiary of ours, entered into a Commercial Contract (the “Contract of Sale”) with Lithe Development Inc., a Texas corporation (“Lithe”), to sell our approximately 60-acre waterfront Lake Travis site in Lago Vista, Texas (the “Lago Vista Site”) owned by us to Lithe for $6.575 million. The Contract of Sale provided that the closing of the sale by LV Holding to Lithe of the Lago Vista Site would occur on or before February 12, 2025 following satisfaction of all required closing conditions. Within four business days of signing the Contract of Sale, Lithe must provide to LV Holding an executed JV contract which includes the loan agreement.

Lithe has agreed to provide a $1,000 earnest money deposit to evidence its commitment to purchasing the Lago Vista Site. If Lithe breaches the Contract of Sale, LV Holding may terminate the Contract of Sale and receive the earnest deposit as its sole remedy. The Contract of Sale executed on January 30, 2025, supersedes the previously executed Contract of Sale with Lithe, dated April 25, 2024, as amended effective as of July 18, 2024, July 25, 2024 and August 8, 2024, for the Lago Vista Site.

As of May 15, 2025, LV Holdings terminated the Contract of Sale as we continue to field additional offers from Lithe and other parties. The Company is also in discussions with Stallion Funding, a private real estate finance company, regarding an extension and renegotiation of the Note.

JDI Cumberland Inlet

On February 11, 2025, we entered into an Amendment (this “Amendment”) to the Operating Agreement, dated June 24, 2021 for JDI-Cumberland Inlet, LLC, a Georgia limited liability company, by and between us and Jacoby Development Inc., a Georgia corporation, and a Forced Sale Agreement by and between the Company and JDI, pursuant to which JDI-Cumberland acquired our 10% equity interest JDI-Cumberland in exchange for a promissory note (the “Note”) from JDI-Cumberland in the principal amount of $4.5 million. The Note bears interest at the rate of 6.5% per annum, matures on February 6, 2026 and is secured by a pledge of a 10% equity interest in JDI-Cumberland. Payment of the Note is also guaranteed by JDI. This decision to sell our interest is consistent with our decision to strategically realign the business towards engineered soils and logistics.

Resource Group US Holdings

On February 25, 2025, we entered into a Membership Interest Purchase Agreement (the “RG Purchase Agreement”) with Resource Group US Holdings LLC, a Florida limited liability company (“Resource Group”), and the members of RG (the “RG Equityholders”) to acquire 100% of the membership interests of Resource Group. Resource Group 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. In addition, 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. The purchase price for the membership interests of Resource Group is $480,000 in cash, the issuance of shares of our restricted common stock (the “RG Closing Shares”) equal to 19% of our outstanding shares of common stock at closing and a convertible note (the “RG Convertible Note”) in an amount to be determined at closing, convertible into shares of our restricted common stock subject to the receipt of our shareholders’ approval post-closing in accordance with Nasdaq rules. The RG Closing Shares and the shares of our common stock to be issuable under the RG Convertible Note will together equal 49% of our outstanding shares of common stock at closing.

The RG Purchase Agreement provides that our board of directors will be reorganized at closing such that four current directors will remain on the board of directors and three new directors will be appointed to the board of directors by Resource Group. The RG Purchase Agreement further provides that on or prior to the three-month anniversary of the closing, we will use our best efforts to have on file with and approved by the Securities and Exchange Commission an effective registration statement on Form S-1 or any other allowable form providing for the resale by the RG Equityholders on a pro rata basis of the RG Closing Shares issued to them.

As of May 15, 2025, the Company continues to evaluate and work toward the potential acquisition of Resource Group; however, there can be no assurance that the transaction will be consummated as contemplated, or at all. Discussions remain ongoing, and the parties are engaged in negotiating outstanding deliverables and conditions to closing, including the completion of Resource Group’s audit. While the Company recognizes the potential strategic benefits of integrating Resource Group’s operations, no final decisions have been made regarding any broader shift in the Company’s business focus pending the successful completion of the transaction.

Stock Divided

On March 5, 2025, our Board of Directors approved a stock dividend from its treasury (the “Stock Dividend”) of 0.05 shares of our common stock per each outstanding share of our common stock owned, payable on April 22, 2025 to stockholders of record at the close of business on April 7, 2025, such that holders of the common stock received one (1) share of the Company’s common stock for every 20 (twenty) shares held. Cash will be distributed in lieu of fractional shares based on the opening price of a share of common stock on April 8, 2025.

#### Arena Amendment

On April 4, 2025, we entered into an amendment (the “Arena Amendment”) to the Securities Purchase Agreement, dated August 12, 2024, as amended on August 30, 2024 (the “Purchase Agreement”), previously entered into with Arena Special Opportunities Partners II, LP, Arena Special Opportunities (Offshore) Master, LP, Arena Special Opportunities Partners III, LP, and Arena Special Opportunities Fund, LP (collectively, the “Arena Investors”) in connection with the closing of the third tranche of a private placement offering (the “Offering”) with Arena Investors pursuant to which we issued 10% convertible debentures (the “Third Closing Debentures”) in the aggregate principal amount of $555,555 to Arena Investors. The Third Closing Debentures were sold to the Arena Investors for a purchase price of $500,000, representing an original issue discount of ten percent (10%). The Third Closing Debentures provide that so long as no Event of Default (as defined therein) has then occurred, upon the Third Registration Statement Effectiveness Date (as defined therein), the Arena Investors will provide the Company with an additional $500,000 in cash and the then outstanding principal balance owing under the Third Closing Debentures will increase by $555,555.

The Third Closing Debentures mature eighteen months from their date of issuance and bears interest at a rate of 10% per annum paid-in-kind (“PIK Interest”), unless there is an event of default under the applicable Third Closing Debenture. The PIK Interest shall be added to the outstanding principal amount of the applicable Third Closing Debenture on a monthly basis as additional principal obligations thereunder for all purposes thereof (including the accrual of interest thereon at the rates applicable to the principal amount generally). Each Third Closing Debenture is convertible, at the option of the holder, at any time, into such number of shares of our common stock equal to the principal amount of such Third Closing Debenture plus all accrued and unpaid interest at a conversion price equal to the lesser of (i) $1.6215, and (ii) 92.5% of lowest daily volume weighted average price (VWAP) of our common stock during the ten trading day period ending on such conversion date (the “Conversion Price”), subject to adjustment for any stock splits, stock dividends, recapitalizations and similar events, as well as anti-dilution price protection provisions, and subject to a floor price of $0.90 (subject to proportional adjustment for stock splits). Based upon the floor price, the maximum number of shares issuable upon conversion of the Third Closing Debentures issued on April 4, 2025, is 461,043 shares of Common Stock. In connection with the closing of the third tranche we reimbursed Arena Investors $20,000.00 for its legal fees and expenses.

Pursuant to the Arena Amendment, we agreed to issue to the Arena Investors common stock purchase warrants (the “Third Closing Warrants”) on each applicable closing date to purchase a number of shares of our common stock (the “Warrant Shares”) equal to 20% (or in the case of any warrant issued on April 4, 2025, 50%) of the total principal amount of the related Third Closing Debentures purchased by the Arena Investors on such closing date divided by 92.5% of the lowest daily VWAP of our common stock during the ten trading day period immediately preceding such closing date, subject to adjustment upon the occurrence of certain events as set forth in such Third Closing Warrants. On April 4, 2025, we issued to the Arena Investors Third Closing Warrants to purchase 461,043 Warrant Shares. The Third Closing Warrants expire five years from their date of issuance. The Third Closing Warrants are exercisable, at the option of the holder, at any time, at an exercise price (the “Exercise Price”) equal to the lesser of (i) $1.6215, and (ii) 92.5% of lowest daily volume weighted average price (VWAP) of our common stock during the ten trading day period immediately preceding the Third Registration Statement Effectiveness Date (as defined therein), subject to adjustment for any stock splits, stock dividends, recapitalizations, and similar events, as well as anti-dilution price protection provisions. The Third Closing Warrants provide for cashless exercise under certain circumstances.

On April 4, 2025, we entered into a Registration Rights Agreement (the “RRA”) with the Arena Investors that provides that we will file with the Securities and Exchange Commission (the “SEC”) a registration statement to register the maximum number of Registrable Securities (as defined in the RRA) issuable under the Third Closing Debentures and the Third Closing Warrants as shall be permitted to be included thereon in accordance with applicable SEC rules. The Arena Amendment provides that we will use our reasonable best efforts to have the registration statement declared effective by the SEC no later than the “Third Registration Statement Effectiveness Date,” which is defined in the Arena Amendment as the 75th calendar day following April 4, 2025 (or, in the event of a “full review” by the SEC, no later than the 150th calendar day following April 4, 2025); provided, however, that if the registration statement will not be reviewed or is no longer subject to further review and comments, the Third Registration Statement Effectiveness Date will be the fifth trading day following the date on which the Company is so notified if such date precedes the date otherwise required above.

On April 4, 2025we entered into a Global Amendment (the “Global Amendment”) with the Arena Investors to the common stock purchase warrants, dated as of August 12, 2024, and the common stock purchase warrants, dated as of October 25, 2024, previously issued to the Arena Investors (collectively, the “Existing Warrants”) to provide that the exercise price of the Existing Warrants shall be equal to the lesser of (i) $.1.6215, and (ii) 92.5% of lowest daily volume weighted average price (VWAP) of our common stock during the ten trading day period immediately preceding the Third Registration Statement Effectiveness Date, subject to adjustment for any stock splits, stock dividends, recapitalizations, and similar events, as well as anti-dilution price protection provisions.

### Results of Operations for the Three Months Ended March 31, 2025 and Three Months Ended March 31, 2024

The following table sets forth, for the periods indicated, the dollar value represented by certain items in our Statements of Operations:

|  | For the Three Months Ended March 31, 2025 | For the Three Months Ended March 31, 2024 |
| --- | ---: | ---: |
| Sales | $18,170 | $49,816 |
| Commissions expense | 11,800 | - |
| Total Payroll and related expenses | 451,451 | 2,016,087 |
| Total General and administrative expenses | 735,120 | 466,254 |
| Total Marketing and business development expenses | 83,661 | 69,150 |
| Operating loss | $(1,263,862) | (2,501,675) |
| Interest expense | (954,648) | (565,996) |
| Interest income | 23,688 | - |
| Other income | 14,829 | - |
| Net loss | $(2,179,993) | $(3,067,671) |

### Sales

During the three months ended March 31, 2025 we generated revenues from commissions on residential real estate purchases and sale transactions amounting to $18,170. For the three months ended March 31, 2024 we generated revenues from commissions on residential real estate purchases and sale transactions amounting to $49,816. This decrease of $31,646 resulted from a lower amount of real estate closings during the three months ended March 31, 2025.

### Payroll and Related Expenses

Payroll and related expenses for the three months ended March 31, 2025 were $451,451 compared to $2,016,087 for the three months ended March 31, 2024. This decrease of $1,564,636 in expenses resulted primarily from stock-based compensation of $1,746,640 being recognized during the three months ended March 31, 2024.

### Marketing and Business Development Expenses

Marketing and business development expenses for three months ended March 31, 2025 were $83,661 compared to $69,150 for the three months ended March 31, 2024.

### General And Administrative Expenses

General and administrative expenses for three months ended March 31, 2025 were $735,120 compared to $466,254 for the three months ended March 31, 2024. This increase of $268,866 resulted primarily from the increased cost of professional fees in relation of being a public company, as well as an increase in professional fees from various activities.

### Interest Expense

During the three months ended March 31, 2025 and 2024, we incurred $954,648 and $565,996 of interest expense. This increase of $388,652 resulted from an increase in the balance of our notes payable.

### Interest Income

During the three months ended March 31, 2025 and 2024, we incurred $23,688 and $0 of interest income. This increase of $23,688 resulted from a notes receivable balance during the three months ended March 31, 2025.

### Income Tax Provision

A 100% valuation allowance was provided against the deferred tax asset consisting of available net operating loss carry forwards and, accordingly, no income tax benefit was provided.

### Liquidity and Capital Resources

We have generated limited revenue and have incurred significant net losses in each year since inception. For the three months ended March 31, 2025, we incurred a net loss of $2,179,993 as compared to a net loss of $3,067,671 for the three months ended March 31, 2024. We expect to incur increasing losses in the future. As of March 31, 2025 and December 31, 2024, we had cash of $17,540 and $296,202, respectively. We have recently funded our operations through bridge note financing, project level financing, and the issuance of our equity and debt securities. Prior to us becoming a public company, our operations were primarily been funded through advances from SG Holdings and we had been largely dependent upon SG Holdings for funding. We have recently funded our operations through bridge note financing, project level financing, and the issuance of our equity and debt securities. We intend to finance Resource Group’s expansion and our operations from the proceeds of sales of our securities to Arena Investors LP and future financings, both at the corporate and project level, and/or sale proceeds from properties that are sold.. Additional financing will be required to continue operations, which may not be available at acceptable terms, if at all. If we are unable to obtain additional funding when it becomes necessary, we would likely be forced to delay, reduce, or terminate some or all of our operating activities, including selling some of our properties. There is no guarantee we will be successful in raising capital outside of our current sources. These and other factors raise substantial doubt about our ability to continue as a going concern.

#### Financing Activities

***Arena Private Placement.*** On August 12, 2024, the Company entered into a Securities Purchase Agreement, dated August 12, 2024 (the “Arena Purchase Agreement”) with the purchasers named therein (“Arena Investors”), related to a private placement offering (the “Arena Offering”) of up to five tranches of secured convertible debentures to Arena Investors in the aggregate principal amount of $10,277,777 (the “Arena Debentures”) together with warrants to purchase a number of shares of the Company’s common stock equal to 20% of the total principal amount of the Arena Debentures sold divided by 92.5% of the lowest daily VWAP (as defined in the Purchase Agreement) for the Company’s common stock during the ten consecutive trading day period preceding the respective closing dates (the “Arena Warrants”).

The closing of the first tranche was consummated on August 12, 2024 (the “First Closing Date”) and the Company issued to Arena Investors 10% original issue discount secured convertible debentures in principal amount of $1,388,888.75 (the “First Closing Arena Debentures”) and a warrant (the “First Closing Arena Warrants”) to purchase up to 1,299,242 shares of the Company’s common stock (64,962 as adjusted for the Stock Split). The First Closing Arena Debentures were sold to Arena Investors for a purchase price of $1,250,000, representing an original issue discount of ten percent (10%). In connection with the closing, the Company reimbursed Arena Investors $55,000 for its legal fees and expenses and placed $250,000 in escrow, to be released to the Company upon the First Registration Statement Effectiveness Date (as defined in the Purchase Agreement).

On October 25, 2024, Safe and Green Development Corporation (the “Company”) closed the second tranche of its private placement offering (the “Offering”) with Arena Special Opportunities Partners II, LP, Arena Special Opportunities (Offshore) Master, LP, Arena Special Opportunities Partners III, LP, and Arena Special Opportunities Fund, LP (collectively, the “Arena Investors”) under a Securities Purchase Agreement, dated August 12, 2024, as amended on August 30, 2024 (the “Purchase Agreement”), between the Company and the Arena Investors, pursuant to which the Company issued 10% convertible debentures (the “Second Closing Debentures”) in the aggregate principal amount of Two Million Two Hundred Twenty-Two Thousand Two Hundred and Twenty-Two Dollars ($2,222,222) to the Arena Investors and warrants (the “Second Closing Warrants”) to purchase up to 170,892 shares (the “Warrant Shares”) of the Company’s common stock, $0.001 par value per share (the “Common Stock”).

***Arena ELOC.*** On August 12, 2024 , we also entered into an Purchase Agreement (the “Arena ELOC”) with Arena Business Solutions Global SPC II, LTD (“Arena Global”), pursuant to which the Company shall have the right, but not the obligation, to direct Arena Global to purchase up to $50,000,000.00 (the “Maximum Commitment Amount”) in shares of the Company’s common stock in multiple tranches upon satisfaction of certain terms and conditions contained in the Arena ELOC, which includes, but is not limited to, filing a registration statement with the SEC and registering the resale of any shares sold to Arena Global. Accordingly, we currently have the right, but not the obligation, to direct Arena Global to purchase up to $50,000,000.00 of our common stock.

### Cash Flow Summary

| Net cash provided by (used in): | For the Three Months Ended March 31, 2025 | For the Three Months Ended March 31, 2024 |
| --- | ---: | ---: |
| Operating activities | $(551,874) | $(693,778) |
| Investing activities | (10,000) | (87,799) |
| Financing activities | 283,211 | 855,878 |
| Net increase in cash and cash equivalents | $(278,663) | $74,301 |

Operating activities used net cash of $551,874 during the three months ended March 31, 2025, and used cash of $693,778 during the nine months ended March 31, 2024. Cash used in operating activities decreased by $172,636 due to an decrease of net loss of $1,040,176, depreciation of $204, increase in amortization of debt issuance cost of $286,499, decrease in stock based compensation of $1,658,140, common stock for services of $322,871, increase change in prepaid assets and other current assets of $92,235, and an increase in change in accounts payable of $545,349.

Investing activities used net cash of $10,000 during the three months ended March 31, 2025, and $87,799 net cash during the three months ended March 31, 2024, which is a decrease in cash used of $77,799. This change results from, a decrease of cash acquired from a business combination of $1,082, decrease in intangible assets of $20,731, decrease in the purchase of computers and software of $32,000, an increase in project pre-development costs of $26,150.

Cash provided from financing activities was $283,211 during the three months ended March 31, 2025, which resulted from 232,784 debt issuance costs paid, increased by $1,094,400 proceeds from short-term note payable and $578,405 in repayments of short-term notes payable. Cash provided from financing activities was $855,878 during the three months ended March 31, 2024, which resulted from $321,117 debt issuance costs paid, increased by $651,700 proceeds from short-term note payable, and $525,295 from issuance of common stock.

### Off-Balance Sheet Arrangements

As of March 31, 2025 and December 31, 2024, we had no material off-balance sheet arrangements to which we are a party.

### Critical Accounting Estimates

Our financial statements have been prepared using generally accepted accounting principles in the United States of America (“GAAP”). In connection with the preparation of the financial statements, we are required to make assumptions and estimates and apply judgments that affect the reported amounts of assets, liabilities, revenue, and expenses, and the related disclosures. We base our assumptions, estimates, and judgments on historical experience, current trends, and other factors that we believe to be relevant at the time the financial statements are prepared. On a regular basis, we review the accounting policies, assumptions, estimates, and judgments to ensure that our financial statements are presented fairly and in accordance with GAAP. However, because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material.

Our significant accounting policies are discussed in “Note 2— Summary of Significant Accounting Policies” of the notes to our financial statements for the three months ended March 31, 2025 and the year ended December 31, 2024 included elsewhere in this Form 10-Q. We believe that the following accounting policies are the most critical in fully understanding and evaluating our reported financial results.

***Investment Entities —*** On May 31, 2021, we agreed to contribute $600,000 to acquire a 50% membership interest in Norman Berry II Owner LLC (“Norman Berry”). We contributed $350,329 and $114,433 of the initial $600,000 in the second quarter and third quarter of 2021 respectively, with the remaining $135,183 funded in the fourth quarter of 2021. The purpose of Norman Berry is to develop and provide affordable housing in the Atlanta, Georgia metropolitan area. The Company has determined it is not the primary beneficiary of Norman Berry and thus will not consolidate the activities in its financial statements. We will use the equity method to report the activities as an investment in its condensed consolidated financial statements.

On June 24, 2021, we entered into an operating agreement with Jacoby Development for a 10% non-dilutable equity interest for JDI-Cumberland Inlet, LLC (“Cumberland”). We contributed $3,000,000 for its 10% equity interest. During the year ended December 31, 2023, we contributed an additional $25,000. The purpose of Cumberland is to develop a waterfront parcel in a mixed-use destination community. We have determined we are not the primary beneficiary of Cumberland and thus will not consolidate the activities in its condensed consolidated financial statements. We will use the equity method to report the activities as an investment in its condensed consolidated financial statements.

On February 11, 2025, we entered into an Amendment (this “February Amendment”) to the Operating Agreement, dated June 24, 2021 (the “Operating Agreement”), for Cumberland, by and between us and Jacoby Development Inc., a Georgia corporation (“JDI”), and a Forced Sale Agreement by and between the Company and JDI, pursuant to which Cumberland acquired the Company’s 10% equity interest (the “LLC Interest”) in Cumberland in exchange for a promissory note (the “Cumberland Note”) from Cumberland in the principal amount of $4.5 million. The Cumberland Note bears interest at the rate of 6.5% per annum, matures on February 6, 2026 and is secured by a pledge of a 10% equity interest in Cumberland. Payment of the Cumberland Note is also guaranteed by JDI.

In connection with the Buyout Agreement, we will no longer consolidate the activities of Sugar Phase in the Company’s financial statements. The Company is now not the primary beneficiary of Sugar Phase and will use the equity method to report the activities as an investment in its condensed consolidated financial statements.

During the three months ended March 31, 2025 and 2024, Norman Berry and Sugar Phase did not have any material earnings or losses as the investments are in development. In addition, management believes there was no impairment as of March 31, 2025 and December 31, 2024.

***Property, plant and equipment –*** Property, plant and equipment is stated at cost. Depreciation is computed using the straight-line method over the estimated lives of each asset. Repairs and maintenance are charged to expense when incurred.

On May 10, 2021 we acquired a 50+ acre Lake Travis project site in Lago Vista, Texas (“Lago Vista”) for $3,576,130 which is recorded in assets held for sale on the accompanying balance sheets.

During February 2022 and September 2022, we acquired properties in Oklahoma and Georgia for $893,785 and $296,870, respectively, which is recorded as land on the accompanying balance sheets. In addition, during 2024, through its JV Agreements, the Company acquired land with a value of $482,395 in Texas.

***Intangible assets —*** Intangible assets consist of $22,210 of website costs that will be amortized over 5 years, and $1,028,323 of software development costs will be amortized over 3 years.

***Project Development Costs –*** Project development costs are stated at cost. At March 31, 2025 our project development costs are expenses incurred related to development costs on various projects that are capitalized during the period the project is under development.

***Assets Held For Sale –*** During 2023, management implemented a plan to sell Lago Vista, which meets all of the criteria required to classify it as an Asset Held for Sale. Including the project development costs associated with Lago Vista of $824,231, the book value is now $4,400,361.

### JOBS Act

The JOBS Act permits an emerging growth company such as us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies until those standards would otherwise apply to private companies. We have elected to avail ourselves of the extended transition period for complying with new or revised financial accounting standards.

We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year (a) following the fifth anniversary of the date of the first sale of our common stock pursuant to an effective registration statement under the Securities Act, (b) in which we have total annual revenue of at least $1.235 billion, or (c) in which we are deemed to be a large accelerated filer, which generally means the market value of our common equity that is held by non-affiliates exceeds $700 million as of the end of the prior fiscal year’s second fiscal quarter; and (2) the date on which we have issued more than $1 billion in non-convertible debt securities during the prior three-year period.

## Market risk

As filed, 153 characters.

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

## Controls and procedures

As filed, 4,349 characters.

### Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures designed to provide reasonable assurance that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosures.

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, conducted an evaluation, as of the end of the period covered by this report, of the effectiveness of our disclosure controls and procedures, as such term is defined in Exchange Act Rule 13a-1I). Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that as of the end of the period covered by this report, our disclosure controls and procedures, as defined in Rule 13-15(e), were effective at the reasonable assurance level.

### Changes in Internal Control over Financial Reporting

During the fiscal quarter ended March 31, 2025, other than the material weakness discussed below, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

#### Remediation of Previously Reported Material Weakness

During the course of the review of the Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, we identified a material weakness in our internal controls over financial reporting and determined that our disclosure controls and procedures were ineffective as of June 30, 2024. The weaknesses related to the ineffective design of certain management review controls across a portion of the Company’s financial statements. Specifically, the controls related to the review of internal and externally prepared reports and analysis utilized in the financial reporting process of outside consultants that aid in the preparation of our financial statements. The disclosure controls and procedures continued to be ineffective as of December 31, 2024.

In order to remediate these material weaknesses, we added four more external consultants to assist in the preparation of our financial statements.

Management has evaluated these additional controls and believe they are operating effectively and therefore has determined that the Company has remediated these material weaknesses.

### Inherent Limitations on Effectiveness of Controls

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

## Risk factors

As filed, 15,603 characters.

Except as set forth below, there have been no material changes in our risk factors from the risks previously reported in Part 1, Item 1A, “Risk Factors” of our 2024 10-K. You should carefully consider the factors discussed in Form 10-K, which could materially affect our business, financial condition or future results. The risks described in our Form 10-K are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results. We may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.

***Our auditors have expressed substantial doubt about our ability to continue as a going concern.***

We have generated limited revenue and have incurred significant net losses in each year since inception. For the three months ended March 31, 2025, we incurred a net loss of $2,179,993 as compared to a net loss of $3,067,671 for the three months ended March 31, 2024. We expect to incur increasing losses in the future. We cannot offer any assurance as to our future financial results. Our inability to achieve profitability from our current operating plans or to raise capital to cover any potential shortfall would have a material adverse effect on our ability to meet our obligations as they become due. If we are not able to secure additional funding, if, and when needed, we would be forced to curtail our operations or take other action in order to continue to operate. These and other factors raise substantial doubt about our ability to continue as a going concern. If we are unable to meet our obligations and are forced to curtail or cease our business operations, our stockholders could suffer a complete loss of any investment made in our securities.

***We will need to raise additional capital to support our long-term business plans and our failure to obtain funding when needed may force us to delay, reduce or eliminate our development plans.***

During the three months ended March 31, 2025, our operating activities used net cash of $551,874 and as of March 31, 2025, our cash was $17,540. We have experienced significant losses since inception and have a significant accumulated deficit as of March 31, 2025 totaling $18,219,015. We expect to incur additional operating losses in the future and therefore expect our cumulative losses to increase. We do not derive substantial revenue from the properties we own or have an interest in. We expect to potentially generate revenue through our strategy of strategically monetizing the land parcels and joint venture partnerships by selling them in the next years. We do not expect to generate revenue from our AI for years. The payoff of the St. Mary’s note is subject to conditions and there can be no assurance that the sale will be consummated or if consummated that the borrowers will fulfill their obligations under the note .We expect our expenses to increase if and when we are able to close the acquisition of Resource Group.

We will need to raise additional capital to fund our business expansion plans and we cannot be certain that funding will be available to us on acceptable terms on a timely basis, or at all. To meet our financing needs, we are considering multiple alternatives, including, but not limited to, additional equity and debt financings. Our ability to raise capital through the sale of securities may be limited by our number of authorized shares of common stock and various rules of the SEC and Nasdaq that place limits on the number and dollar amount of securities that we may sell. Any additional sources of financing will likely involve the issuance of our equity or debt securities, which will have a dilutive effect on our stockholders, assuming we are able to sufficiently increase our authorized number of shares of common stock. To the extent that we raise additional funds by issuing equity securities, our stockholders may experience significant dilution. Any debt financing, if available, may involve restrictive covenants that may impact our ability to conduct our business. Our current outstanding debentures prohibit us from engaging in certain types of financing while the debentures are outstanding. Although our agreement with the holder of our debentures provides for the issuance of additional debentures, there are conditions to be met in order for us to be able to issue additional debentures and there can be no assurance that we will be able to satisfy the conditions. Our equity line also requires that certain conditions be met before we can use the equity line and there can be no assurance that such conditions will be met. If we fail to raise additional funds on acceptable terms, we may be unable to complete planned development work.

***Although we believe our disclosure controls and procedures are effective as of March 31, 2025, we identified a material weakness in our internal control over financial reporting and determined that our disclosure controls and procedures were ineffective as of June 30, 2024 and continued to be ineffective as of December 31, 2024. In the future, we may identify additional material weaknesses or otherwise fail to maintain an effective system of internal control over financial reporting or adequate disclosure controls and procedures, which may result in material errors in our financial statements or cause us to fail to meet our period reporting obligations.***

Management and our Audit Committee, in consultation with M&K CPAS PLLC (“M&K”), our independent registered public accounting firm, determined that the material weaknesses in our internal controls as of June 30, 2024 continued as of December 31, 2024. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis.

Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, as amended, our management is required to report on the effectiveness of our internal control over financial reporting. The rules governing the standards that must be met for management to assess our internal control over financial reporting are complex and require significant documentation, testing and possible remediation. Annually, we perform activities that include reviewing, documenting and testing our internal control over financial reporting. In addition, if we fail to maintain the adequacy of our internal control over financial reporting, we will not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002. If we fail to achieve and maintain an effective internal control environment, we could suffer misstatements in our financial statements and fail to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial information. This could result in significant expenses to remediate any internal control deficiencies and lead to a decline in our stock price.

Although we believe that our disclosure controls and procedures are effective as of March 31, 2025, we cannot provide assurance that we have identified all, or that we will not in the future have additional, material weaknesses in our internal control over financial reporting. As a result, we may be required to implement further remedial measures and to design enhanced processes and controls to address deficiencies. If we do not effectively remediate the material weaknesses identified by management and maintain adequate internal controls over financial reporting in the future, we may not be able to prepare reliable financial reports and comply with our reporting obligations under the Exchange Act on a timely basis. Any such delays in the preparation of financial reports and the filing of our periodic reports may result in a loss of public confidence in the reliability of our financial statements, which, in turn, could materially adversely affect our business, the market value of our common stock and our access to capital markets.

***Our failure to meet the continued listing requirements of the Nasdaq could result in a de-listing of our common stock.***

Our shares of Common Stock are currently listed on the Nasdaq Capital Market. If we fail to satisfy the continued listing requirements of Nasdaq, such as the corporate governance requirements, minimum bid price requirement or the minimum stockholder’s equity requirement, The Nasdaq Stock Market LLC may take steps to delist our Common Stock. Any delisting would likely have a negative effect on the price of our Common Stock and would impair stockholders’ ability to sell or purchase their Common Stock when they wish to do so.

On April 16, 2024, we received a letter from the Listing Qualifications Department of Nasdaq stating that we were not in compliance with Nasdaq Listing Rule 5550(b)(1) (the “Rule”) because our stockholders’ equity of $1,887,777 as of December 31, 2023, as reported in our Annual Report on Form 10-K filed with the SEC on April 1, 2024, was below the minimum requirement of $2,500,000. Pursuant to Nasdaq’s Listing Rules, we had 45 calendar days (until May 31, 2024), to submit a plan to evidence compliance with the Rule (a “Compliance Plan”). We submitted a Compliance Plan within the required time. On July 22, 2024, we received a letter from Nasdaq stating that based on the Quarterly Report on Form 10-Q that we filed with the Securities and Exchange Commission for the period ended March 31, 2024, and our submission to the Staff, dated May 29, 2024, it determined that we were in compliance with Nasdaq Listing Rule 5550(b)(1). The letter further stated that if we fail to evidence compliance with Nasdaq Listing Rule 5550(b)(1) upon filing our next periodic report we may be subject to delisting.

On August 26, 2024, we received a letter from Nasdaq stating that the Company was not in compliance with the Rule because the stockholders’ equity of the Company of $2,018,263 as of June 30, 2024, as reported in the Company’s Quarterly Report on Form 10-Q filed with the SEC on August 14, 2024, was below the minimum requirement of $2,500,000.

Pursuant to Nasdaq’s Listing Rules, we had 45 calendar days (until October 10, 2024), to submit a Compliance Plan. We submitted a Compliance Plan within the required time, which was accepted; however, there can be no assurance that the Compliance Plan will be fully implemented. We were granted an extension of up to 180 calendar days until October 10, 2024, to evidence compliance with the Rule. In the event the Compliance Plan is not accepted by Nasdaq, or in the event the Compliance Plan is accepted but we fail to evidence compliance within the extension period, we will have the right to a hearing before Nasdaq’s Hearing Panel. The hearing request would stay any suspension or delisting action pending the conclusion of the hearing process and the expiration of any additional extension period granted by the panel following the hearing.

On April 25, 2024, we received written notice from Nasdaq notifying us that for the preceding 30 consecutive business days (March 14, 2024 through April 24, 2024), our Common Stock did not maintain a minimum closing bid price of $1.00 (“Minimum Bid Price Requirement”) per share as required by Nasdaq Listing Rule 5550(a)(2). In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we were provided a 180-calendar day period, or until October 22, 2024, to regain compliance with the minimum bid price requirement. To regain compliance with the Nasdaq Listing Rules, following stockholder approval at our 2024 Annual Meeting of Stockholders held on July 2, 2024, we effected a reverse stock split at a ratio of one (1) to twenty (20) on October 8, 2024, at which time our Common Stock began trading on a post-split basis.

On October 22, 2024, we received a notification letter (the “Notification Letter”) from Nasdaq, informing us that we have regained compliance with the Minimum Bid Price Requirement set forth in Nasdaq Listing Rule 5550(a)(2). To regain compliance with the Minimum Bid Price Requirement, the closing bid of our shares of common stock needed to be at least $1.00 per share for a minimum of ten (10) consecutive business days. The Notification Letter confirmed that we achieved a closing bid price of $1.00 or greater per common share for ten (10) consecutive business days from October 8, 2024 to October 21, 2024, thereby regaining compliance with the Minimum Bid Price Requirement.

On February 14, 2025, we received a letter from Nasdaq stating that based on our Form 8-K, as filed with the Securities and Exchange Commission on February 12, 2025, Nasdaq has determined that we now comply with the stockholders’ equity requirement as set forth in Nasdaq Listing Rule 5550(b)(1).

If we fail to meet any of Nasdaq’s listing standards, our Common Stock will be subject to delisting. If that were to occur, our Common Stock would be subject to rules that impose additional sales practice requirements on broker-dealers who sell our securities. The additional burdens imposed upon broker-dealers by these requirements could discourage broker-dealers from effecting transactions in our Common Stock. This would adversely affect the ability of investors to trade our Common Stock and would adversely affect the value of our Common Stock. Delisting from Nasdaq would cause us to pursue eligibility for trading of our Common Stock on other markets or exchanges, or on an over-the-counter market. In such case, our stockholders’ ability to trade or obtain quotations of the market value of our Common Stock would be severely limited because of lower trading volumes and transaction delays. These factors could contribute to lower prices and larger spreads in the bid and ask prices of these securities. There can be no assurance that our Common Stock, if delisted from the Nasdaq, would be listed on a national securities exchange, a national quotation service or the over-the-counter markets. Delisting from the Nasdaq could also result in negative publicity, adversely affect the market liquidity of our Common Stock, decrease securities analysts’ coverage of us or diminish investor, supplier and employee confidence. In addition, our stock could become a “penny stock,” which would make trading of our Common Stock more difficult.

The delisting of our Common Stock from Nasdaq may make it more difficult for us to raise capital on favorable terms in the future, or at all. Such a delisting would likely have a negative effect on the price of our Common Stock and would impair your ability to sell or purchase our Common Stock when you wish to do so. Further, if our Common Stock were to be delisted from Nasdaq, our Common Stock would cease to be recognized as a covered security, and we would be subject to additional regulation in each state in which we offer our securities. Moreover, there is no assurance that the actions that we have taken to restore our compliance with the Nasdaq Minimum Bid Price Requirement will stabilize the market price or improve the liquidity of our Common Stock, prevent our Common Stock from falling below the Nasdaq minimum bid price required for continued listing again or prevent future non-compliance with other applicable Nasdaq listing requirements.

Filed May 15, 2025.
Source: SEC EDGAR, the filing index for accession 0001213900-25-044332. Last ingested by Listed: Oct 24, 2026, 15:16 ET. No prices; not investment advice.