SNRG - SusGlobal Energy Corp. Reports First Quarter 2022 Financial Results
Toronto, Ontario--(Newsfile Corp. - May 24, 2022) - SusGlobal Energy Corp. (OTCQB: SNRG) ("SusGlobal") or (the "Company"), the developer of SusGro™, a revolutionary pathogen-free organic liquid fertilizer and LEADERS IN THE CIRCULAR ECONOMY®, today announced financial results for the first quarter ended March 31, 2022 and provided an update on its operational progress.
Recent Highlights
- 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 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. The Company expects to monetize in Q2, 2022.
- On January 5, 2022, the Company announced that SusGlobal Belleville has received Licence # 2984, at Pt. Lot 20, Conc. 8, Geographic Township of Thurlow, City of Belleville, Hastings County, approved by The Ministry of Northern Development, Mines, Natural Resources and Forestry ("NDMNRF") to operate a pit above water under Section 18(3)1 of the Aggregate Resources Act ("ARA") for a 2.66 hectare site with a tonnage condition authorizing removal of 20,000 tonnes of aggregate annually from the site.
- On March 14, 2022, the Company announced that its wholly owned subsidiary, SusGlobal Energy Canada Corp. ("SusGlobal Canada"), entered into a non-binding letter of intent to acquire a soil media, plant nutrients, and amendments producer approved for organic use and specifically formulated for producing high-quality fruit and flowering crops (the "Target") for an aggregate purchase price of US$15,584,000 (CA$20,000,000) (the "Acquisition"). As a condition of the Acquisition, SusGlobal Canada will make a US$3,896,000 (CA$5,000,000) working capital investment into the Target and provided a US$157,018 (CA$200,000) deposit (the "Deposit") on March 8, 2022. SusGlobal Canada has prepared definitive transaction documents including a Share Purchase Agreement (the "SPA") for all of the shares of Target. If the closing of the Acquisition does not occur by an agreed upon date in June 2022, the Deposit shall be refunded to SusGlobal Canada.
- On March 21, 2022, the Company received Building Permit No. 21 158028 00 I3 from the City of Hamilton Building Division and on March 29th the Company announced that its wholly-owned subsidiary, SusGlobal Energy Hamilton Ltd., commenced the development of its 51,535 square foot facility on 3.26 acres located at 520 Nash Road North, in Hamilton, Ontario, which includes an Environmental Compliance Approval ("ECA") to process up to 65,884 metric tonnes per annum of organic waste into regenerative products as part of the Company's circular economy model and continued climate change initiatives. Completion of the second facility is on track and slated for Q3, 2022. This facility is expected to generate, starting in 2023, an annual revenue run rate of US$105,192,000 (CA$135,000,000), based on 12,000 Metric Tonnes of organic waste processing or 18.5% of the ECA capacity in the first 12 months of processing.
Revenue decreased by 25.01% during the first quarter of 2022 to $144,470 compared to the first quarter of 2021 in the amount of $192,660, from decreased business from the Company's organic waste processing and composting facility.
"We continue to process municipal organic waste streams, diverting them from landfills, while producing regenerative products as part of our Circular Economy model. We have confidence in a revenue ramp up this year," said Marc Hazout, Executive Chairman, President and CEO of SusGlobal Energy Corp. "Our goal is to complete the acquisition strategy and have our second facility commence 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 2022 First Quarter Financial Results
For the first quarter ended March 31, 2022, SusGlobal recorded:
- Revenue of $144,470.
- Cost of sales of $405,635.
- Operating expenses of $1,305,913, comprised primarily of $376,488 of marketing expenses, $261,652 of professional fees, $191,243 of interest expense, 178,582 of total management compensation, $130,512 of stock-based compensation and $60,577 of office and administration expenses.
- Net loss of $2,863,226, or $0.03 loss per share- basic and diluted.
- Included in the other (loss) income for the period was a charge of $1,296,148 on the revaluation of the convertible promissory notes.
- Adjusted EBITDA (a non-GAAP financial measure) loss of $1,095,262.
- $9,966,872 in total assets and $17,365,862 in total current liabilities at the end of the first quarter.
About SusGlobal Energy Corp.
SusGlobal Energy Corp., the developer of SusGro™, an award winning and revolutionary pathogen free organic liquid fertilizer, is an industrial, environmental and agricultural biotechnology company focused on acquiring, developing, and monetizing a portfolio of proprietary technologies in the waste to energy and regenerative product applications globally. It is management's objective to grow SusGlobal into a significant sustainable waste to energy and regenerative products provider and a trusted brand for the fertilizer, soil and aquaculture market, as LEADERS IN THE CIRCULAR ECONOMY®. For more information, please visit the Company's website at: www.susglobalenergy.com
In accordance with SEC Regulation G, the non-GAAP measurements in this press release have been reconciled to the nearest GAAP measurement, which can be viewed under the heading "Interim Condensed Consolidated Reconciliation of Non-GAAP Information" in the financial table included in this press release.
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 March 31, 2022 and December 31, 2021
(Expressed in United States Dollars)
(unaudited)
| March 31, |
| December 31, |
| |
| 2022 |
| 2021 |
| |
| ASSETS |
| Current Assets |
| Cash |
| $ |
| 36,058 |
| $ |
| 36,033 |
| Trade receivables |
| 47,380 |
| 59,665 |
| Government remittances receivable |
| 82,028 |
| 13,265 |
| Inventory |
| 16,806 |
| 20,582 |
| Prepaid expenses and deposits |
| 756,936 |
| 163,343 |
| |
| Total Current Assets |
| 939,208 |
| 292,888 |
| |
| Long-lived Assets, net |
| 9,027,664 |
| 8,278,833 |
| |
| Long-Term Assets |
| 9,027,664 |
| 8,278,833 |
| |
| Total Assets |
| $ |
| 9,966,872 |
| $ |
| 8,571,721 |
| |
| LIABILITIES AND STOCKHOLDERS' DEFICIENCY |
| Current Liabilities |
| Accounts payable |
| $ |
| 1,922,316 |
| $ |
| 1,085,235 |
| Government remittances payable |
| 285,573 |
| 262,047 |
| Accrued liabilities |
| 1,127,852 |
| 942,241 |
| Current portion of long-term debt |
| 7,876,242 |
| 7,765,421 |
| Current portion of obligations under capital lease |
| 89,953 |
| 91,047 |
| Convertible promissory notes |
| 6,063,926 |
| 3,798,516 |
| |
| Total Current Liabilities |
| 17,365,862 |
| 13,944,507 |
| |
| Long-term debt |
| 1,767,933 |
| 1,752,271 |
| Obligations under capital lease |
| 116,670 |
| 130,086 |
| Deferred tax liability |
| 75,003 |
| 73,925 |
| |
| Total Long-term Liabilities |
| 1,959,606 |
| 1,956,282 |
| |
| Total Liabilities |
| 19,325,468 |
| 15,900,789 |
| |
| Stockholders' Deficiency |
| Preferred stock, $.0001 par value, 10,000,000 authorized, none issued and outstanding Common stock, $.0001 par value, 150,000,000 authorized, 97,208,547 (2021- 92,983,547) shares issued and outstanding |
| 9,725 |
| 9,302 |
| Additional paid-in capital |
| 12,267,938 |
| 11,272,599 |
| Shares to be issued |
| 40,100 |
| 59,640 |
| Accumulated deficit |
| (21,197,875 |
| ) |
| (18,334,649 |
| ) |
| Accumulated other comprehensive loss |
| (478,484 |
| ) |
| (335,960 |
| ) |
| Stockholders' deficiency |
| (9,358,596 |
| ) |
| (7,329,068 |
| ) |
| Total Liabilities and Stockholders' Deficiency |
| $ |
| 9,966,872 |
| $ |
| 8,571,721 |
| |
SusGlobal Energy Corp.
Interim Condensed Consolidated Statements of Operations and Comprehensive Loss
For the three-month periods ended March 31, 2022 and 2021
(Expressed in United States Dollars)
(unaudited)
| For the three-month periods ended |
| |
| March 31, 2022 |
| March 31, 2021 |
| |
| Revenue |
| $ |
| 144,470 |
| $ |
| 192,660 |
| Cost of Sales |
| Opening inventory |
| 20,582 |
| 24,740 |
| Depreciation |
| 116,203 |
| 136,560 |
| Direct wages and benefits |
| 52,088 |
| 71,059 |
| Equipment rental, delivery, fuel and repairs and maintenance |
| 170,188 |
| 105,893 |
| Utilities |
| 38,812 |
| 18,263 |
| |
| Outside contractors |
| 24,568 |
| - |
| |
| 422,441 |
| 356,515 |
| Less: closing inventory |
| (16,806 |
| ) |
| (45,923 |
| ) |
| Total cost of sales |
| 405,635 |
| 310,592 |
| Gross (loss) |
| (261,165 |
| ) |
| (117,932 |
| ) |
| Operating expenses |
| Management compensation-stock- based |
| compensation |
| 60,113 |
| 54,259 |
| Management compensation-fees |
| 118,469 |
| 90,049 |
| Marketing |
| 376,488 |
| 45,727 |
| Professional fees |
| 261,652 |
| 69,402 |
| Interest expense |
| 191,243 |
| 163,874 |
| Office and administration |
| 60,577 |
| 75,215 |
| Rent and occupancy |
| 50,925 |
| 32,339 |
| Insurance |
| 28,838 |
| 15,002 |
| Filing fees |
| 54,175 |
| 18,959 |
| Amortization of financing costs |
| 33,532 |
| 13,578 |
| Directors' compensation |
| 14,809 |
| 10,664 |
| Stock-based compensation |
| 130,512 |
| 8,073 |
| Repairs and maintenance |
| 2,329 |
| 13,189 |
| Foreign exchange (income) |
| (77,749 |
| ) |
| (12,118 |
| ) |
| Total operating expenses |
| 1,305,913 |
| 598,212 |
| |
| Net loss from operating activities |
| (1,567,078 |
| ) |
| (716,144 |
| ) |
| Other (expense) income |
| (1,296,148 |
| ) |
| 323,612 |
| Net loss |
| (2,863,226 |
| ) |
| (392,532 |
| ) |
| Other comprehensive (loss) |
| Foreign exchange (loss) |
| (142,524 |
| ) |
| (61,192 |
| ) |
| Comprehensive loss |
| $ |
| (3,005,750 |
| ) |
| $ |
| (453,724 |
| ) |
| Net loss per share-basic and diluted |
| $ |
| (0.03 |
| ) |
| $ |
| (0.01 |
| ) |
| Weighted average number of common shares outstanding- basic and diluted |
| 95,990,936 |
| 86,818,361 |
| |
SusGlobal Energy Corp.
Interim Condensed Consolidated Reconciliation of Non-GAAP Information
For the three-month periods ended March 31, 2022 and 2021
(Expressed in United States Dollars)
(Unaudited)
| For the three-month periods ended |
| March 31, 2022 |
| March 31, 2021 |
| |
| Net loss (GAAP) |
| $ |
| (2,863,226 |
| ) |
| $ |
| (392,532 |
| ) |
| Add the following items: |
| Interest expense |
| 191,243 |
| 163,874 |
| Depreciation and amortization |
| 116,529 |
| 137,751 |
| Stock-based compensation |
| 130,512 |
| 8,073 |
| Amortization of financing costs |
| 33,532 |
| 13,578 |
| Loss on revaluation of convertible promissory notes |
| 1,296,148 |
| 81,197 |
| |
| Adjusted EBITDA (non-GAAP) |
| $ |
| (1,095,262 |
| ) |
| $ |
| 11,941 |
| |
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/125063