Financial News
SusGlobal Energy Corp. Reports Third Quarter 2021 Financial Results
Toronto, Ontario--(Newsfile Corp. - November 18, 2021) - SusGlobal Energy Corp. (OTCQB: SNRG) ("SusGlobal") or (the "Company"), the developer of SusGro™, an award-winning revolutionary pathogen-free organic liquid fertilizer and LEADERS IN THE CIRCULAR ECONOMY®, today announced financial results for the third quarter ended September 30, 2021, and provided an update on its operational progress.
Recent Highlights
- On August 17, 2021, the Company purchased through its wholly-owned subsidiary, SusGlobal Energy Canada I Ltd. ("SusGlobal Canada I"), a 40,535 square foot facility on 3.26 acres (the "Property") located at 520 Nash Road North, in Hamilton, Ontario, which includes Environmental Compliance Approvals ("ECAs") to process 65,884 metric tonnes per annum of organic waste, 24 hours per day 7 days a week. The total purchase price including costs of acquisition of $173,996 (C$221,680) totaled $3,557,664 (C$4,532,633). The costs of acquisition, were settled through cash payments of $117,996 (C$150,333) and the issuance of 200,000 common shares valued based on the trading price on the issuance date at $56,000 (C$71,347) to a consultant who assisted on the closing of the transaction. The purchase of the Property was funded by cash of $392,712 (C$500,333), the issuance of 300,000 common shares to the vendor on closing, having a value based on the trading price on the issuance date of $84,000 (C$107,020), the issuance noted above of 200,000 common shares to a consultant who assisted on the closing of the transaction, a vendor take-back 1st mortgage of $1,569,800 (C$2,000,000) and a portion of the increased existing 1st mortgage of $1,455,152 (C$1,853,933).
- On August 19, 2021, the Company retained the award winning firm ZAS Architects to design and develop its recently purchased Hamilton facility. The facility will be designed using Building Information Modelling (BIM) with advanced visualization, energy modelling and a high level of technical detailing to ensure building durability. Built on 3.26 acres, the 40,535 square foot facility will have a 65,884 metric tonne annual capacity to produce, distribute and warehouse the Company's SusGro™ organic liquid fertilizer and other products that are provided under private label and sold through big box retailers, consumer lawn and garden suppliers, and for end use to the wine, cannabis and agriculture industries. With the addition of a further 11,000 square feet of office space and R&D labs, the Hamilton facility will also house the continued development of SusGlobal's proprietary formulations and branded liquid and dry organic fertilizers and other complimentary products.
- On August 24, 2021, the Company announced it is the recipient of the "2021 Product Innovation Award in the Fertilizer Market" awarded by Lucintel for the Company's SusGro™ Organic Liquid Fertilizer which serves the $16 billion organic segment of the $200 billion global fertilizer market. The award marks the most recent for SusGlobal, Leaders in The Circular Economy®, which has also been recognized by The Finnish Innovation Fund Sitra ("Sitra") as one of 39 inspiring circular economy solutions from around the globe during the World Circular Economy Forum. Lucintel chose SusGlobal for this award because of its novel product, a concentrated organic pathogen-free liquid fertilizer. SusGro™ Organic Liquid Fertilizer is an economical, sustainable and highly effective alternative to traditional fertilizers, as it adds nutrients to the soil improving water retention, soil fertility, and pore space to enhance crop productivity and produce healthy plants. With a full complement of nutrients suitable for a wide range of fertilization requirements, SusGro™'s Nitrogen, Phosphorus and Potassium ("NPK") Value is modifiable with a high concentration ratio of 1:100.
- On November 3, 2021, the Company announced that its wholly-owned subsidiary SusGlobal Energy Belleville Ltd. ("SusGlobal Belleville") signed an Offset Development and Marketing Agreement (the "Agreement") with Blue Source Canada ULC ("Bluesource") to develop and market greenhouse gas offset credits from the Company's 49-acre Organic & Non-Hazardous Waste Processing & Composting Facility in Belleville, Ontario, in order for the Company to monetize and realize benefits from its voluntary activities. This monetization is an exciting development for the Company's mission to reduce organic wastes from wood, leaf and yard material, treated municipal sewage waste (biosolids), residential curbside green bin material or source separated organics ("SSO") and paper sludge otherwise destined for landfills, allowing the Company to expand this mission. Bluesource has pioneered creative solutions to climate change for over 20 years.
- On October 29, 2021, the Company entered into two securities purchase agreements (the "SPAs") Pursuant to the SPAs, the Investors purchased 15% unsecured convertible promissory notes (the "Notes") in the aggregate principal amount totaling approximately $1,765,120 (the "Principal Amount") with such Principal Amount and any interest thereon convertible into shares of the Company's common stock (the "Common Stock") from time to time following notice of a Liquidity Event (as defined in the Notes). The maturity date of the Notes is the earlier of (i) July 28, 2022, and (ii) the occurrence of a Liquidity Event (as defined in the Notes) (the "Maturity Date"). The final payment of the Principal Amount (and default interest, if any) shall be paid by the Company to the Investors on the Maturity Date. The Notes carried an original issue discount totaling approximately $265,120 which is included in the principal balance of the Notes. Thus, the total purchase price of the Notes was approximately $1,500,000. On November 3, 2021, the Company received the proceeds on the Notes, in the amount of $1,330,000, net of the original issue discount of approximately $265,120 and other financing fees of $170,000.
Revenue decreased by 53.4% during the third quarter of 2021 to $204,796 compared to the third quarter of 2020 in the amount of $439,507, primarily due to changes in the customer base including an expiring contract at prior year-end and reductions in certain waste disposed of by several customers.
"We continue to process municipal organic waste streams, diverting them from landfills, while producing regenerative products such as Earth's Journey® Organic Compost, as part of our Circular Economy model and will be monetizing carbon credits in the first quarter of 2022. We have confidence in a revenue ramp up for 2022," said Marc Hazout, Executive Chairman, President and CEO of SusGlobal Energy Corp. "We have completed our goal of a regional strategy with a second facility in Hamilton and the commercialization of our proprietary organic liquid fertilizer in order to increase revenue and cash flow, maximizing shareholder value with an objective to up-list to a major exchange."
Unaudited 2021 Third Quarter Financial Results
For the third quarter ended September 30, 2021, SusGlobal recorded:
- Revenue of $204,796.
- Cost of sales of $633,215.
- Operating expenses of $1,018,141, comprised of $235,795 of amortization of financing costs, $233,346 of interest expense, $144,730 of management compensation, including stock-based compensation of $54,259, $96,704 of professional fees, $66,329 of office and administration, $56,148 of rent and occupancy, and other operating expenses totalling $185,089.
- Net loss of $1,420,008, or $0.01 loss per share- basic and diluted.
- Adjusted EBITDA (a non-GAAP financial measure) loss of $746,648.
- $8,962,137 in total assets and $13,572,897 in total liabilities at the end of the third quarter.
About SusGlobal Energy Corp.
SusGlobal Energy Corp., the developer of SusGro™, a revolutionary pathogen-free organic liquid fertilizer is a renewables company focused on acquiring, developing and monetizing a portfolio of proprietary technologies in the waste to energy and regenerative products applications globally. It is management's objective to grow SusGlobal into a significant sustainable waste to energy and regenerative products provider, as Leaders in The Circular Economy®. For more information, please visit the Company's website at: https://susglobalenergy.com.
Safe Harbor Statement
This news release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the Company's objectives. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects," "plans," "anticipates," "believes," "intends," "estimates," "projects," "aims," "potential," "goal," "objective," "prospective," and similar expressions, or that events or conditions "will," "would," "may," "can," "could" or "should" occur. The Company cautions investors that any forward-looking statements by the Company are not guarantees of future results or performance, and that actual results may differ materially from those in forward-looking statements as a result of various factors, including, but not limited to, lack of sufficient financial resources; variations in market conditions, currency and our stock; the Company's ability to obtain any necessary permits, approvals, consents or authorizations required for its activities; the Company's ability to produce energy, biogas, compost or organic fertilizer from its properties successfully or profitably, to continue its projected growth, or to be fully able to implement its business strategies and other risk factors described in the Company's filings with the U.S. Securities and Exchange Commission, which may be viewed at www.sec.gov.
- Financial Tables Follow -
SusGlobal Energy Corp.
Interim Condensed Consolidated Balance Sheets
As at September 30, 2021 and December 31, 2020
(Expressed in United States Dollars)
(unaudited)
| September 30, | December 31, | |||||||
| 2021 | 2020 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash | $ | 36,912 | $ | 6,457 | ||||
| Trade receivables | 65,320 | 182,871 | ||||||
| Government remittances receivable | 34,880 | 3,746 | ||||||
| Inventory | 21,506 | 24,740 | ||||||
| Prepaid expenses and deposits | 197,525 | 94,131 | ||||||
| Deferred assets | - | 215,953 | ||||||
| Total Current Assets | 356,143 | 527,898 | ||||||
| Intangible Assets | 500,295 | 188,180 | ||||||
| Long-lived Assets, net | 8,105,699 | 5,042,225 | ||||||
| Long-Term Assets | 8,605,994 | 5,230,405 | ||||||
| Total Assets | $ | 8,962,137 | $ | 5,758,303 | ||||
| LIABILITIES AND STOCKHOLDERS' DEFICIENCY | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | 1,158,153 | $ | 1,073,454 | ||||
| Government remittances payable | 253,799 | 229,358 | ||||||
| Accrued liabilities | 1,245,906 | 1,206,618 | ||||||
| Advance | - | 15,460 | ||||||
| Deferred revenue | - | 4,790 | ||||||
| Current portion of long-term debt | 7,745,717 | 6,327,520 | ||||||
| Current portion of obligations under capital lease | 123,817 | 375,140 | ||||||
| Convertible promissory notes | 1,046,708 | 1,092,100 | ||||||
| Loan payable to related party | 18,838 | 33,772 | ||||||
| Total Current Liabilities | 11,592,938 | 10,358,212 | ||||||
| Long-term debt | 1,753,184 | 78,540 | ||||||
| Obligations under capital lease | 144,327 | - | ||||||
| Deferred tax liability | 82,448 | 82,501 | ||||||
| Total Long-term Liabilities | 1,979,959 | 161,041 | ||||||
| Total Liabilities | 13,572,897 | 10,519,253 | ||||||
| Stockholders' Deficiency | ||||||||
Preferred stock, $.0001 par value, 10,000,000 authorized, none issued and outstanding | 9,407 | 8,288 | ||||||
| Additional paid-in capital | 11,711,322 | 9,045,187 | ||||||
| Shares to be issued | - | 8,580 | ||||||
| Accumulated deficit | (15,993,098 | ) | (13,468,794 | ) | ||||
| Accumulated other comprehensive loss | (338,391 | ) | (354,211 | ) | ||||
| Stockholders' deficiency | (4,610,760 | ) | (4,760,950 | ) | ||||
| Total Liabilities and Stockholders' Deficiency | $ | 8,962,137 | $ | 5,758,303 |
SusGlobal Energy Corp.
Interim Condensed Consolidated Statements of Operations and Comprehensive Loss
For the three-month periods ended September 30, 2021 and 2020
(Expressed in United States Dollars)
(Unaudited)
| For the three-month periods ended | ||||||||
| September 30, | September 30, | |||||||
| 2021 | 2020 | |||||||
| Revenue | $ | 204,796 | $ | 439,507 | ||||
| Cost of Sales | ||||||||
| Opening inventory | 35,983 | - | ||||||
| Depreciation | 116,632 | 133,467 | ||||||
| Direct wages and benefits | 74,093 | 90,475 | ||||||
| Equipment rental, delivery, fuel and repairs and maintenance | 371,424 | 52,652 | ||||||
| Utilities | 16,872 | 27,185 | ||||||
| Outside contractors | 39,717 | 3,886 | ||||||
| 654,721 | 307,665 | |||||||
| Less: closing inventory | (21,506 | ) | - | |||||
| Total cost of sales | 633,215 | 307,665 | ||||||
| Gross (loss) profit | (428,419 | ) | 131,842 | |||||
| Operating expenses | ||||||||
| Management compensation-stock- based | ||||||||
| compensation | 54,259 | - | ||||||
| Management compensation-fees | 90,471 | 51,812 | ||||||
| Marketing | 30,131 | - | ||||||
| Professional fees | 96,704 | 102,769 | ||||||
| Interest expense and default amounts | 233,346 | 258,796 | ||||||
| Office and administration | 66,329 | 50,042 | ||||||
| Rent and occupancy | 56,148 | 32,420 | ||||||
| Insurance | 19,719 | 10,056 | ||||||
| Filing fees | 49,131 | 12,957 | ||||||
| Amortization of financing costs | 235,795 | 18,677 | ||||||
| Directors' compensation | 14,905 | 56,637 | ||||||
| Stock-based compensation | 31,946 | - | ||||||
| Repairs and maintenance | 3,688 | 1,186 | ||||||
| Foreign exchange income | 35,569 | (33,473 | ) | |||||
| Total operating expenses | 1,018,141 | 561,879 | ||||||
| Net loss from operating activities | (1,446,560 | ) | (430,037 | ) | ||||
| Other loss | - | (424 | ) | |||||
| Net loss before deferred and income taxes recovery | (1,446,560 | ) | (430,461 | ) | ||||
| Deferred taxes recovery | - | 1,415 | ||||||
| Income taxes recovery | 26,552 | - | ||||||
| Total deferred and income taxes recovery | 26,552 | 1,415 | ||||||
| Net loss | (1,420,008 | ) | (429,046 | ) | ||||
| Other comprehensive loss | ||||||||
| Foreign exchange gain (loss) | 123,966 | (80,703 | ) | |||||
| Comprehensive loss | $ | (1,296,042 | ) | $ | (509,749 | ) | ||
| Net loss per share-basic and diluted | $ | (0.01 | ) | $ | (0.01 | ) | ||
| Weighted average number of common shares outstanding- basic and diluted | 92,969,542 | 69,871,179 | ||||||
SusGlobal Energy Corp.
Interim Condensed Consolidated Reconciliation of Non-GAAP Information
For the three-month periods ended September 30, 2021 and 2020
(Expressed in United States Dollars)
(Unaudited)
| For the three-month periods ended | ||||||||||
| September 30, 2021 | September 30, 2020 | |||||||||
| Net loss (GAAP) | $ | (1,420,008 | ) | $ | (429,046 | ) | ||||
| Add the following items: | ||||||||||
| Interest and default amounts | 233,346 | 258,796 | ||||||||
| Depreciation and amortization | 118,014 | 134,903 | ||||||||
| Stock-based compensation | 86,205 | - | ||||||||
| Amortization of financing costs | 235,795 | 18,677 | ||||||||
| Adjusted EBITDA (non-GAAP) | $ | (746,648 | ) | $ | (16,670 | ) | ||||
Contact
SusGlobal Energy Corp.
Marc Hazout, President and CEO
(416) 223-8500 or Toll Free: 1-866-512-7374
Email: info@susglobalenergy.com
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/104081
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