OLENOX INDUSTRIES INC.

OLENOX INDUSTRIES INC. (SGBX) 8-K Filing Summary: Debt Settlement via Equity Issuance

OLENOX INDUSTRIES INC. (formerly Safe & Green Holdings Corp., trading as SGBX) recently filed an 8-K with the SEC, revealing a significant shift in its financial strategy. This filing details a debt settlement that could profoundly impact the company's financial structure and its investors.

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1. What Happened? (The Core Event)

OLENOX INDUSTRIES INC. has agreed to settle a debt of $1,732,500 it owed to Cedar Advance LLC. This debt stemmed from previous business cash advance agreements. Instead of paying cash, OLENOX will satisfy this obligation by issuing shares of its common stock to Cedar Advance.

The settlement mechanism works as follows:

• Initial Share Issuance: OLENOX will first issue up to 500,000 shares of its common stock to Cedar Advance.
• Sales and True-Up: Cedar Advance will then sell these shares on the open market. After these sales, the companies will review the proceeds. If the net amount Cedar Advance receives from selling these initial shares is less than the $1,732,500 debt, OLENOX must issue additional shares (called "True-up Shares") to cover the remaining balance. The company didn't provide specific details on how these "True-up Shares" will be priced. This is a big deal because it makes it hard to know the full potential dilution for current shareholders.
• Mutual Release: Both parties have agreed to release each other from any further claims related to these past debt agreements, thereby resolving the dispute.

2. When Did This Happen?

The settlement agreement was officially signed on February 10, 2026. OLENOX made the public filing detailing this agreement on February 13, 2026.

3. Why Did This Happen? (Context and Rationale)

OLENOX owed a substantial amount to Cedar Advance. Settling this debt by issuing equity instead of cash is a strategic move companies often use to preserve their cash reserves. This allows OLENOX to maintain liquidity for ongoing operations, strategic investments, or other critical business needs. It also resolves a financial obligation, removing a liability from the balance sheet and avoiding potential legal disputes with Cedar Advance. Essentially, OLENOX is converting a cash debt into an equity obligation.

To really understand why they chose this path, we'd ideally know more about OLENOX's current cash situation, how much other debt they have, and what their big plans are. The filing doesn't go into those details, but settling debt this way usually means they want to keep their cash for other things.

4. Why Does This Matter? (Impact and Significance)

This transaction significantly alters OLENOX's financial and ownership structure:

• For OLENOX: The company removes a $1.73 million debt from its books, which generally improves its financial health. However, this comes at the cost of issuing new shares, leading to dilution for existing shareholders. Dilution means each existing share represents a smaller percentage of company ownership and a smaller claim on future earnings.
• For Cedar Advance: They transition from being a creditor (owed money) to a shareholder (an owner of OLENOX stock). Their financial outcome now directly depends on the market performance of OLENOX's stock when they sell their holdings.

5. Who Is Affected?

• OLENOX (SGBX) Investors: This group is most directly impacted.
  • The Positive: The company is resolving a significant debt, which improves financial stability and reduces financial risk.
  • The Potential Downside: Issuing new shares will dilute existing shareholder ownership. The "true-up" mechanism introduces uncertainty regarding the total number of shares that could eventually be issued. Furthermore, as Cedar Advance sells its shares on the open market, it could create selling pressure on SGBX stock, potentially leading to increased volatility or a downward price movement.
  • Ownership Cap: The agreement includes a provision preventing Cedar Advance from owning more than 4.99% of OLENOX's outstanding common stock. Companies typically use this cap to avoid triggering certain reporting requirements for large shareholders and to maintain Cedar Advance's status as a passive investor. This means Cedar Advance will likely sell its shares in batches, potentially prolonging the period of selling pressure on the stock.
• OLENOX Management: They have resolved a notable debt, which reflects well on their financial management.
• Cedar Advance LLC: They have converted their debt into equity. Their focus will now be on liquidating their OLENOX shares at favorable prices.

6. What Happens Next? (Immediate and Future Implications)

Immediately, OLENOX will issue the initial 500,000 shares to Cedar Advance. Cedar Advance will then begin selling these shares on the open market. Following these sales, OLENOX and Cedar Advance will review the sales to determine if the proceeds covered the full $1.73 million debt. If not, OLENOX will issue additional "True-up Shares" to cover the remaining amount. This entire process, particularly the staggered selling by Cedar Advance due to the 4.99% ownership cap and the potential for true-up shares, could extend over several weeks or months, creating a potential overhang on the stock.

7. What Should Investors/Traders Know? (Practical Takeaways)

• Short-term: The issuance and subsequent sale of shares by Cedar Advance could increase the supply of SGBX stock in the market. This may result in selling pressure and heightened volatility in OLENOX's stock price over the coming weeks and months.
• Long-term: While debt resolution is generally positive, the long-term impact hinges on the extent of dilution and OLENOX's ability to use its preserved cash for initiatives that create value. Investors need to weigh the benefit of debt reduction against the cost of an increased share count.
• Important Missing Pieces: To fully assess the impact, we'd ideally have:
  • The exact number of shares OLENOX currently has outstanding. Without this, it's tough to calculate the precise dilution from the initial 500,000 shares, let alone any future "true-up" shares.
  • OLENOX's current market capitalization. The filing doesn't tell us OLENOX's current market value. Knowing this would help put the $1.73 million debt settlement into perspective.
  • Crucially, how those "True-up Shares" will be priced. The company didn't detail the specific pricing mechanism, which is a big unknown that could significantly impact the total dilution.
  • Details on OLENOX's current cash reserves. This would help us understand how urgent it was for them to preserve cash by issuing stock.
• What to Watch For: Monitor OLENOX's future filings for updates on the share issuance and any details regarding the true-up calculation. Pay close attention to SGBX's trading volume and price movements, as significant selling by Cedar Advance could become apparent.

In summary, OLENOX is addressing a significant debt by using its equity. While this preserves cash, the resulting dilution and potential for prolonged selling pressure warrant careful consideration from investors. A complete understanding requires more detailed financial metrics from OLENOX.