Business Context and Reporting Period
This Form 8-K Current Report was filed by Safe & Green Holdings Corp. (not Olenox Industries Inc.) on April 11, 2025. The filing discloses the entry into a material definitive agreement involving the issuance of a Promissory Note and accompanying securities agreements.
Key Financial Metrics and Transaction Details
- Principal Amount: $267,000
- Purchase Price: $213,600 (reflecting an Original Issue Discount of $53,400)
- Interest Rate: 15% per annum (18% Default Interest)
- Guaranteed Interest: $40,050 (first 12 months) earned in full as of the Issue Date
- Repayment Terms: Monthly amortization payments of $30,705 commencing July 4, 2025, ending April 6, 2026
- Redemption Premium: 110% of outstanding balance plus accrued interest (available after 60 days of free trading)
- Change of Control Premium: Additional 5% on outstanding balance
Material Changes and Covenants
The filing represents a new direct financial obligation. The agreement includes restrictive covenants prohibiting the Company from paying dividends, repurchasing stock, repaying other indebtedness, or disposing of significant assets without the Lender's written consent while the Note is outstanding. The transaction is subject to the Nasdaq 19.99% Cap on share issuance; if this cap is reached, the Company must seek stockholder approval or repay the remaining balance in cash.
Guidance, Risks, and Unusual Items
- Conversion Rights: The Lender may convert the Note into Common Stock at a "Market Price" (80% of the lowest closing price in the prior 10 trading days) upon failure to make an amortization payment. Upon an Event of Default, conversion is allowed at an "Alternate Price" (the lesser of the conversion price, default date closing price, or $0.52).
- Events of Default: Include failure to pay, breach of covenants, assignment for benefit of creditors, or appointment of a receiver.
- Liquidity Impact: The Company must generate sufficient cash flow to meet monthly payments starting in July 2025 or risk default and potential equity dilution.
Investor Verification Checklist
- Verify the Company's current cash position and ability to fund the first amortization payment due July 4, 2025.
- Confirm the current share count to assess the potential dilution impact if the Note is converted under the 80% discount provision.
- Review the full text of the Promissory Note (Exhibit 4.1) for specific adjustment mechanisms regarding the $0.52 floor price.
- Monitor whether the issuance triggers the Nasdaq 19.99% Cap, which would necessitate a shareholder vote or cash repayment.