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Safe & Green Development Corp (SGD)·Q3 2024 Earnings Summary

Executive Summary

  • Q3 revenue rose to $0.08M while GAAP net loss increased sequentially to $(2.34)M; Adjusted EBITDA was $(0.90)M as the company invested in Texas housing JVs and carried high interest expense .
  • Management reiterated the asset-monetization plan: expects Q4 2024 revenue from the St. Mary’s sale and now targets first Sugar Phase 1 home sales before end of Q1 2025 (6 homes, $1.2M JV revenue), with a 2025 goal of ≥40 homes ($8.0M JV revenue) .
  • Liquidity actions dominated the quarter: Arena financing (debentures, warrants and ELOC) was executed in August; a second tranche closed Oct 25 (post-quarter) and the company later effected a 1-for-20 reverse split and regained minimum bid price compliance in October .
  • No earnings call transcript was furnished with the 8-K; the Nov 14 filing attached the press release only, making the near-term stock narrative dependent on execution milestones (St. Mary’s closing, Sugar Phase deliveries) and financing cadence with Arena rather than call commentary .

What Went Well and What Went Wrong

  • What Went Well

    • Texas development moved from pre-development to build: management “started construction” on Sugar Phase homes (press release cited 6; the 10-Q states five homes underway), establishing early proof-of-execution in the South Texas strategy .
    • Capital access broadened: signed up to $10M with Arena Investors (Aug 14 PR) and later closed first/second debenture tranches (Aug 12 and Oct 25), plus an Arena ELOC up to $50M, providing runway for development and monetization plans .
    • Listing remediation: company implemented a 1-for-20 reverse split and subsequently regained Nasdaq $1.00 minimum bid price compliance in October, reducing delisting risk .

  • What Went Wrong

    • Revenue base remains de minimis while interest burden is heavy: Q3 sales were $0.08M versus interest expense of $0.95M; operating loss widened versus Q2, reflecting financing-related costs and public company overheads .
    • Timelines slipped versus earlier expectations: the St. Mary’s sale, initially guided to contribute ~$1M in Q2 (Q1 press release), was pushed to Q4 2024; Sugar Phase monetization is now targeted for Q1 2025 (first six homes) .
    • Going-concern and leverage conditions persist: management cites substantial doubt about continuation absent additional financing; several debt facilities carry high rates (e.g., 17% LV Note/second lien), elevating execution risk if asset sales slip further .

Financial Results

MetricQ1 2024Q2 2024Q3 2024
Revenue ($USD)$49,816 $42,162 $81,210
Net Income (Loss) ($USD)$(3,067,671) $(1,968,791) $(2,342,002)
Diluted EPS ($)$(0.26) $(0.13) $(2.61)
Operating Loss ($USD)$(2,501,675) $(902,973) $(1,390,763)
Interest Expense ($USD)$565,996 $1,065,818 $951,239
Adjusted EBITDA (Non-GAAP) ($USD)$(432,004) N/A$(900,881)

Notes: Adjusted EBITDA is a non-GAAP metric as defined and reconciled in company materials . EPS in Q3 reflects post–reverse-split share count; the reverse split occurred in October (after quarter-end) but the 10-Q presents retroactive adjustments .

Segment breakdown: Not applicable (company does not report segments).

Guidance Changes

Metric/ItemPeriodPrevious GuidanceCurrent GuidanceChange
St. Mary’s site sale (Georgia) – revenue timing2024Q1 PR guided “around $1 million” in Q2 from St. Mary’s sale Q3 PR: expect revenue in Q4 from St. Mary’s sale ; Q3 10-Q subsequent amendment sets $1.4M price with Nov 15, 2024 target close (cash + note) Delayed; pricing increased and terms revised
Sugar Phase 1 (Edinburg, TX) – first deliveriesQ1 2025July PR anticipated revenues from home sales toward end of 2024 Q3 PR: deliver and sell first 6-home phase before end of Q1 2025 (~$1.2M JV revenue) Timeline clarified/pushed to Q1 2025
Sugar Phase 1 – 2025 full-year target2025Not specifiedGoal ≥40 homes in 2025 (~$8.0M JV revenue) New quantitative target
Operating expensesNear-termNot specifiedReduced operating expenses by ~$135k since quarter-end; ongoing monitoring New cost action commentary
Capital/financing capacity2024–2025Peak One facilities disclosed in Q1/Q2 Arena debentures closed Aug 12 (first tranche) and Oct 25 (second tranche); Arena ELOC up to $50M Expanded capital access

Earnings Call Themes & Trends

(No earnings call transcript was furnished with the 8-K; press release and 10-Q serve as primary sources) .

TopicPrevious Mentions (Q1 2024, Q2 2024)Current Period (Q3 2024)Trend
Asset monetization (St. Mary’s, Lago Vista)Q1: ~“$1M” St. Mary’s revenue targeted for Q2; Lago Vista sale contract signed Apr 25 Q3: St. Mary’s now expected to contribute in Q4 2024; subsequent amendment: $1.4M price, Nov 15 close target; Lago Vista timeline extended (buyer missed, new discussions) Timeline slipped; pricing improved on St. Mary’s
Texas housing expansion (Sugar Phase, Hacienda Olivia)Q2 10-Q: JV formation; expanding South Texas pipeline Q3: Sugar Phase construction started (press: 6 homes; 10-Q: five homes); Hacienda Olivia Phase II JV added post-quarter (57 lots) Execution progressing; pipeline expanding
AI/technology (Majestic/XENE; MyVONIA)Q1 acquisition of Majestic (XENE); MyVONIA asset purchase signed/closed in Q2 Q3 10-Q reiterates AI platform and MyVONIA integration; cash consideration revised post-quarter for Majestic Building tech stack; financing terms adjusted
Capital structure & liquidityQ1/Q2: Peak One debentures/ELOC; high-cost debt (LV Note + 2nd lien at 17%) Q3: Arena debentures (Aug), ELOC, second tranche closed Oct; going-concern remains; reverse split implemented Larger financing platform; dilution/terms a watch item
Listing complianceQ2: Notices on equity and bid price deficiencies Q3: Reverse split (Oct 8) and regained minimum bid price compliance (Oct 22) Compliance restored post-quarter

Management Commentary

  • CEO (David Villarreal): “We are confident in our business plan and strategy to integrate both the development and technology assets of the Company to create sustainable revenues… Starting construction on the Sugar Phase 1 Development was a milestone… We look to close out the year strongly and to lead SGD into a new chapter in 2025.”
  • CFO (Nicolai Brune): “Our strategic outlook… is to generate revenue in the fourth quarter from the sale of our St. Mary’s property… deliver and sell the first phase of the Sugar Phase 1 Development before the end of Q1 2025… The first phase of 6 homes should generate approximately $1,200,000 of revenue to the Joint Venture… Since the end of the third quarter, we have reduced operating expenses by approximately $135,000.”
  • Non-GAAP: Management’s Adjusted EBITDA excludes depreciation/amortization, interest, non-recurring and non-cash items (e.g., stock-based comp); Q3 Adjusted EBITDA was $(900,881) with reconciliation provided .

Q&A Highlights

  • The company did not furnish an earnings call transcript with the Q3 8-K; only the press release was furnished as Exhibit 99.1, and qualitative detail is primarily from the press release and the 10-Q .
  • Clarifications from filings: press release states “6 homes” started at Sugar Phase 1, while the 10-Q notes “five single family homes” in construction—indicating a minor disclosure discrepancy across documents .
  • Financing roadmap: management details Arena debentures/ELOC structures, registration undertakings and subsequent second tranche, underscoring reliance on capital markets to bridge to asset sale and JV milestones .

Estimates Context

  • Street consensus: S&P Global consensus estimates for SGD’s Q3 2024 (EPS, revenue, EBITDA) were unavailable via our data pull at the time of analysis, and coverage appears limited for this micro-cap issuer. As such, no beat/miss comparison versus Wall Street is presented.
  • Implications: With negligible revenue and negative EBITDA, estimate frameworks (where available) likely emphasize milestone timing (asset sales, JV closings, construction progress) rather than quarterly P&L, suggesting estimate risk resides in execution/timing rather than run-rate operations.

Key Takeaways for Investors

  • Execution catalysts cluster near term: (1) St. Mary’s closing/cash receipt in Q4 2024; (2) Sugar Phase 1 deliveries/sales by end of Q1 2025; (3) progression of Arena financing tranches and ELOC utilization .
  • Revenue inflection is milestone-driven: JV home sales (6 in 1H’25, scaling to ≥40 by FY25) are expected to move the revenue needle meaningfully versus current sub-$0.2M YTD sales through Q3 .
  • Balance sheet risk remains elevated: high-cost debt (e.g., 17% project debt), PIK interest debentures, and ongoing going-concern language keep financing risk in focus until asset monetization and JV proceeds materialize .
  • Listing risk abated, but dilution risk persists: reverse split and regained bid-price compliance help, but Arena facilities (debentures, warrants, ELOC) imply continued share issuance potential as a funding lever .
  • Watch disclosure cadence vs. execution: the “6 homes vs. five homes” variance underscores the importance of triangulating press releases and 10-Qs; monitor subsequent 8-Ks for St. Mary’s closing and Lago Vista disposition updates .
  • Stock drivers: timely Q4 St. Mary’s close, on-schedule Sugar Phase 1 Q1 2025 sales, and constructive Arena tranche/registration steps are likely to be the primary narrative movers near term .

Sources: Q3 press release and 8-K exhibit (Nov 14, 2024) ; Q3 10-Q (filed Nov 14, 2024) ; Q2 10-Q (Aug 14, 2024) ; Q1 8-K/10-Q (May 15, 2024) ; Arena investment PR (Aug 14, 2024) .