SNRG - SusGlobal Energy Corp. Reports First Quarter 2023 Financial Results
Toronto, Ontario--(Newsfile Corp. - May 17, 2023) - SusGlobal Energy Corp. (OTCQB: SNRG) ("SusGlobal") or (the "Company"), an environmental, agricultural, industrial biotechnology and renewables company, today announced financial results for the first quarter ended March 31, 2023 and provided an update on its operational progress.
Recent Highlights
- On February 22, 2023, the Company announced the appointment of Bruce Rintoul to the Company's Board of Directors (the "Board"). Rintoul also serves on the Board's Corporate Governance and Nominating Committee and the Compensation Committee. Previously, Rintoul served as Senior Vice President of Operations at Veolia North America and previously held senior executive positions with environmental and industrial corporations such as Philip Services Corporation, The Churchill Corporation, RSC Equipment Rental, CEDA International Corporation, and Strike Energy Services. Rintoul also previously served on the Board of Directors for CEDA International Corporation in addition to his CEO and President responsibilities. As Senior VP of Operations at Veolia, he led the transformation of U.S. and Canadian energy generation, water/wastewater management, hazardous waste, and environmental service businesses through structural changes, business process improvements, and data management system implementations. The resulting operational and financial performance improvement subsequently facilitated the divestment of several Veolia businesses in North America.
- As previously disclosed, Pace Savings & Credit Union Limited ("Pace") had lent money to the Company and its subsidiaries (collectively, with the Company, referred to as the "Borrowers"). As of March 28, 2023, the Borrowers owed Alterna Savings and Credit Union Limited ("Alterna"), as assignee of that debt, $3,812,765 (CAD$5,195,274), including accrued interest of approximately $387,000 (CAD$527,000). On April 3, 2023, the Company announced that, on March 28th, the Company entered into an escrow agreement, dated March 28, 2023, (the "Escrow Agreement") with a third-party escrow agent (the "Escrow Agent") to facilitate the discharge in full of its indebtedness to Alterna. Pursuant to the Escrow Agreement, the Company deposited into escrow $917,364 (CAD$1,250,000) and signed counterparts of a mutual release agreement and indemnity agreement. On release to Alterna of the letter of credit No. 78 dated May 20, 2020, in the sum of $203,163.53 (CAD$276,830.63) the escrow will be released. Alterna has deposited into escrow an authorization empowering the Company to discharge all security and registrations relating to the debt on its behalf, such that Alterna will no longer have any registered security interests in relation to the Company. When the escrowed property is released, the Company will no longer have any indebtedness to Alterna (or Pace).
- On April 25, 2023, the Company announced that its wholly owned subsidiary, SusGlobal Energy Belleville Ltd. ("SusGlobal Belleville") generated approximately 9,500 additional Verified Emission Reductions and Removals ("VERRs") and sold a further 3,000 carbon credits as part of the Anew™ SusGlobal Belleville Composting Offset Project in Ontario (the "Project"). The Project has generated approximately 114,500 VERRS (generated from 2017 through 2022).
The Project and report are listed on the GHG CleanProjects® Registry, https://www.csaregistries.ca/GHG_VR_Listing/CleanProjectDetail?ProjectId=909 a business unit of the Standards Division of the Canadian Standards Association ("CSA") for developed and marketed greenhouse gas ("GHG") offset credits from the Company's 49-acre Organic & Non-Hazardous Waste Processing & Composting Facility in Belleville, Ontario. The Project was developed by Anew Climate, LLC formerly known as Blue Source Canada ULC) ("Anew").
Revenue increased by 14% during the first quarter of 2023 to $164,687 compared to the first quarter of 2022 in the amount of $144,470, from increased business primarily from an existing customer in the Company's organic waste processing and composting facility, revenue from the sale of carbon credits offset by a reduction in business from the Company's garbage collection operation, which was terminated during the fourth quarter of 2022.
"We continue to process municipal organic waste streams, diverting them from landfills, while producing regenerative products and monetizing carbon offset credits 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 increase landholdings at our second facility and 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 2023 First Quarter Financial Results
For the first quarter ended March 31, 2023, SusGlobal recorded:
- Revenue of $164,687.
- Cost of sales of $181,321.
- Operating expenses of $1,031,351 comprised primarily of $391,891 of total stock-based compensation, $219,675 of interest expenses, $116,688 of professional fees and $116,456 of management compensation-fees.
- Net loss of $1,035,172, or $0.01 loss per share-basic and diluted.
- Included in the other income (expense) for the period was a charge of $20,513 for the loss on conversion of convertible promissory note and income of $33,326 on the revaluation of the convertible promissory notes.
- Adjusted EBITDA (a non-GAAP financial measure) loss of $308,917.
- $10,808,965 in total assets and $23,597,279 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 environmental, agricultural, industrial biotechnology and renewables 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, 2023 and December 31, 2022
(Expressed in United States Dollars)
(unaudited)
| March 31, |
| December 31, |
| |
| 2023 |
| 2022 |
| |
| ASSETS |
| Current Assets |
| Cash |
| $ |
| 5,920 |
| $ |
| 42,900 |
| Funds held in trust |
| 923,625 |
| - |
| Trade receivables |
| 81,469 |
| 69,193 |
| Government remittances receivable |
| 20,503 |
| 6,983 |
| Inventory |
| 60,959 |
| 58,695 |
| Prepaid expenses and deposits |
| 710,540 |
| 580,852 |
| |
| Total Current Assets |
| 1,803,016 |
| 758,623 |
| |
| Long-lived Assets, net |
| 9,005,949 |
| 9,107,152 |
| |
| Long-Term Assets |
| 9,005,949 |
| 9,107,152 |
| |
| Total Assets |
| $ |
| 10,808,965 |
| $ |
| 9,865,775 |
| |
| LIABILITIES AND STOCKHOLDERS' DEFICIENCY |
| |
| Current Liabilities |
| Accounts payable |
| $ |
| 3,685,170 |
| $ |
| 3,475,691 |
| Government remittances payable |
| 394,508 |
| 371,587 |
| Accrued liabilities |
| 1,906,094 |
| 1,781,258 |
| Current portion of long-term debt |
| 9.907,386 |
| 8,816,931 |
| Current portion of obligations under capital lease |
| 60,710 |
| 57,275 |
| Convertible promissory notes |
| 7,563,466 |
| 7,796,433 |
| Loans payable to related parties |
| 79,945 |
| 40,000 |
| |
| Total Current Liabilities |
| 23,597,279 |
| 22,339,175 |
| |
| Long-term debt |
| 42,948 |
| 52,495 |
| Obligations under capital lease |
| 47,008 |
| 64,483 |
| |
| Total Long-term Liabilities |
| 89,956 |
| 116,978 |
| |
| Total Liabilities |
| 23,687,235 |
| 22,456,153 |
| |
| Stockholders' Deficiency |
| Preferred stock, $.0001 par value, 10,000,000 authorized, none issued and outstanding Common stock, $.0001 par value, 150,000,000 authorized, 118,618,245 (2022- 113,438,832) shares issued and outstanding |
| 11,866 |
| 11,348 |
| Additional paid-in capital |
| 18,058,914 |
| 17,152,018 |
| Shares to be issued |
| 60,100 |
| 213,600 |
| Accumulated deficit |
| (31,380,369 |
| ) |
| (30,345,197 |
| ) |
| Accumulated other comprehensive loss |
| 371,219 |
| 377,853 |
| |
| Stockholders' deficiency |
| (12,878,270 |
| ) |
| (12,590,378 |
| ) |
| Total Liabilities and Stockholders' Deficiency |
| $ |
| 10,808,965 |
| $ |
| 9,865,775 |
| |
SusGlobal Energy Corp.
Interim Condensed Consolidated Statements of Operations and Comprehensive Loss
For the three-month periods ended March 31, 2023 and 2022
(Expressed in United States Dollars)
(unaudited)
| For the three-month periods ended |
| |
| March 31, 2023 |
| March 31, 2022 |
| Revenue |
| $ |
| 164,687 |
| $ |
| 144,470 |
| Cost of Sales |
| Opening inventory |
| 58,695 |
| 20,582 |
| Depreciation |
| 108,372 |
| 116,203 |
| Direct wages and benefits |
| 40,852 |
| 52,088 |
| Equipment rental, delivery, fuel and repairs and maintenance |
| 21,424 |
| 170,188 |
| Utilities |
| 12,937 |
| 38,812 |
| |
| Outside contractors |
| - |
| 24,568 |
| |
| 242,280 |
| 422,441 |
| Less: closing inventory |
| (60,959 |
| ) |
| (16,806 |
| ) |
| Total cost of sales |
| 181,321 |
| 405,635 |
| |
| Gross (loss) |
| (16,634 |
| ) |
| (261,165 |
| ) |
| Operating expenses |
| Management compensation-stock- based |
| compensation |
| 57,600 |
| 60,113 |
| Management compensation-fees |
| 116,456 |
| 118,469 |
| Marketing |
| 10,951 |
| 376,488 |
| Professional fees |
| 116,688 |
| 261,652 |
| Interest expense |
| 219,675 |
| 191,243 |
| Office and administration |
| 52,890 |
| 60,577 |
| Rent and occupancy |
| 50,193 |
| 50,925 |
| Insurance |
| 13,543 |
| 28,838 |
| Filing fees |
| 12,457 |
| 54,175 |
| Amortization of financing costs |
| 18,824 |
| 33,532 |
| Directors' compensation |
| 15,969 |
| 14,809 |
| Stock-based compensation |
| 334,291 |
| 130,512 |
| Repairs and maintenance |
| 19,687 |
| 2,329 |
| Foreign exchange (income) |
| (7,873 |
| ) |
| (77,749 |
| ) |
| Total operating expenses |
| 1,031,351 |
| 1,305,913 |
| |
| Net loss from operating activities |
| (1,047,985 |
| ) |
| (1,567,078 |
| ) |
| Other income (expense) |
| 12,813 |
| (1,296,148 |
| ) |
| Net loss |
| (1,035,172 |
| ) |
| (2,863,226 |
| ) |
| Other comprehensive (loss) |
| Foreign exchange (loss) |
| (6,634 |
| ) |
| (142,524 |
| ) |
| Comprehensive loss |
| $ |
| (1,041,806 |
| ) |
| $ |
| (3,005,750 |
| ) |
| Net loss per share-basic and diluted |
| $ |
| (0.01 |
| ) |
| $ |
| (0.03 |
| ) |
| Weighted average number of common shares outstanding- basic and diluted |
| 117,722,279 |
| 95,990,936 |
| |
SusGlobal Energy Corp.
Interim Condensed Consolidated Reconciliation of Non-GAAP Information
For the three-month periods ended March 31, 2023 and 2022
(Expressed in United States Dollars)
(Unaudited)
| For the three-month periods ended |
| March 31, 2023 |
| March 31, 2022 |
| |
| Net loss (GAAP) |
| $ |
| (1,035,172 |
| ) |
| $ |
| (2,863,226 |
| ) |
| Add the following items: |
| Interest expense |
| 219,675 |
| 191,243 |
| Depreciation and amortization |
| 108,678 |
| 116,529 |
| Stock-based compensation |
| 391,891 |
| 130,512 |
| Amortization of financing costs |
| 18,824 |
| 33,532 |
| Loss on conversion of convertible promissory note |
| 20,513 |
| - |
| Gain (loss) on revaluation of convertible promissory notes |
| (33,326 |
| ) |
| 1,296,148 |
| |
| Adjusted EBITDA (non-GAAP) |
| $ |
| (308,917 |
| ) |
| $ |
| (1,095,262 |
| ) |
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/166386