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Subsequent Events | 9 Months Ended
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Sep. 30, 2024
Subsequent Events [Abstract] |
Subsequent Events |
21. | Subsequent Events
On October 22, 2024, the Board of Directors (the “Board”) of the Company determined not to renew the Executive Employment Agreement, dated as of January 1, 2017 (the “Employment Agreement”), between the Company and Paul Galvin, the Company’s Chief Executive Officer and, in connection with such determination, delivered a written notice of termination to Mr. Galvin on October 24, 2024 in accordance with the terms of the Employment Agreement. Mr. Galvin’s employment with the Company as its Chief Executive Officer will terminate effective as of the close of business on December 31, 2024 (the “Effective Date”). After the Effective Date, Mr. Galvin is expected to continue to serve as the Chairman of the Company’s Board of Directors. The Board is conducting a comprehensive search to identify Mr. Galvin’s successor. On October 22, 2024, the Company executed and issued a Promissory Note in favor of 1800 Diagonal in the aggregate principal amount of $174,000, and an accompanying Note Purchase Agreement, executed on October 22, 2024. The note was purchased by for a purchase price of $150,000, representing an original issue discount of $24,000. A one-time interest charge of twelve percent (12%) will be applied on the issuance on the issuance date to the principal. Under the terms of the note, beginning on November 15, 2024, the Company is required to make nine (9) monthly payments of accrued, unpaid interest and outstanding principal, each payment in the amount of $21,653. During October 2024, 955,000 Pre-Funded Warrants were exercised and the Company issued 955,000 shares of common stock. On November 6, 2024, the Company entered into an agreement with a single investor that is an existing holder of warrants to purchase shares of common stock of the Company for cash (the “Existing Warrants”), wherein the investor agreed to exercise the Existing Warrants to purchase up 2,758,620 shares of common stock at a reduced exercise price of $0.8718 per share, resulting in gross proceeds of approximately $2.4 million, before deducting offering fees and other expenses payable by the Company. In consideration for the exercise of the Existing Warrants for cash, the investor received new warrants (the “New Warrants”) to purchase up to an aggregate of 5,517,240 shares of common stock. The New Warrants are exercisable after stockholder approval at an exercise price of $0.8718 per common share and will expire five years after stockholder approval. The Company issued and sold the New Warrants and any shares of common stock issuable upon exercise of the New Warrants in reliance on the exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”) by virtue of Section 4(a)(2) thereof and Rule 506 of Regulation D thereunder. As of November 20, 2024, 1,179,620 of the Existing Warrants were exercised, with the remaining 1,579,000 is abeyance. On or about November 6, 2024, The Durant Industrial Authority (“DIA”) filed a complaint against the Company and others, seeking unspecified damages for alleged misrepresentations made by the Company to induce DIA to enter into a forgivable promissory note, and alleged fraudulent transfer of real property that the Company purchased from DIA. The lawsuit was filed as The Durant Industrial Authority v. SG Blocks, Inc., Safe & Green Holdings Corp.; SG Echo, LLC; SGB Development Corp.; Safe and Green Development Corp. FKA SGB Development Corp.; LV Peninsula Holdings, LLC; Austerra Stable Growth Fund, LP; Paul Galvin AKA Paul Gavin; Gerald Sheeran; David Villarreal; and Nicolai Brune, Case No. CJ-2024-249 and commenced in the District Court of Bryan County, State of Oklahoma. On or about November 13, 2024, the Company was served the summons and complaint. The Company strongly denies each of the claims set forth in the complaint and will shortly file its answer. Currently, the Company cannot estimate any potential loss. On November 21, 2024, the Company received a letter from Nasdaq notifying the Company that since the Company has not yet filed its Form 10-Q for the period ended September 30, 2024, it no longer complies with Nasdaq’s Listing Rules for continued listing. The Company expects to regain compliance by filing its Form 10-Q for the period ended September 30, 2024, on or about November 26, 2024.

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- Definition The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 855 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/855/tableOfContent Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 855 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147483399/855-10-50-2 + Details
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