SusGlobal Energy Corp. Reports Third Quarter 2022 Financial Results

November 15, 2022 11:01 AM EST | Source: SusGlobal Energy Corp.

Toronto, Ontario--(Newsfile Corp. - November 15, 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 third quarter ended September 30, 2022 and provided an update on its operational progress.

Recent Highlights

  • On June 28, 2022, the Company received Building Permit No. 21 165172 00 I3 from the City of Hamilton Building Division and on July 5th the Company announced that its wholly owned subsidiary, SusGlobal Energy Hamilton Ltd., continues 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. Completion of the second facility is slated for 2023, subject to the Company's effective registration statement, successful offering of securities of the Company and completion of a US$15,000,000 underwriting. The facility has the potential to generate an annual revenue run rate of US$101,595,000 (CA$135,000,000), based on 12,000 metric tonnes of organic waste processing or 18.5% of the ECA capacity.
  • On July 11, 2022, the Company announced that its wholly-owned subsidiary, SusGlobal Energy Belleville Ltd., completed a Verified Emission Reductions and Removals ("VERRs") report as part of the carbon credit development process for the Anew SusGlobal Belleville Composting Offset Project (the "Project"). This report has been submitted to the GHG CleanProjects® Registry, a business unit of the Standards Division of the Canadian Standards Association ("CSA"). This Project is part of the Offset Development and Marketing Agreement (the "Agreement") with Anew Canada ULC (formerly known as Blue Source Canada ULC) ("Anew Canada") 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 Agreement allows SusGlobal to monetize and realize benefits from voluntary emission reduction activities.
  • On September 21, 2022, the Company announced that its wholly owned subsidiary, SusGlobal Energy Belleville Ltd., generated its first Verified Emission Reductions and Removals ("VERRs") and sold its first carbon credits as part of the Anew™ SusGlobal Belleville Composting Offset Project in Ontario (the "Project"). The Project generated approximately 105,000 VERRS (generated from 2017 through 2021) with an approximate market value of between US$3.76 (CA$5.00) and US$7.52 (CA$10.00) per VERR. The Project report was submitted to the GHG CleanProjects® Registry, a business unit of the Standards Division of the Canadian Standards Association ("CSA"). The Project is part of the Offset Development and Marketing Agreement with Anew Canada ULC (formerly known as Blue Source Canada ULC) ("Anew Canada") 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.

Revenue for the third quarter of 2022, in the amount of $164,376, increased by $54,233 or approximately 49.2 % over the revenue for the second quarter of 2022 in the amount of $110,143. Revenue decreased by $40,420 or approximately 20% during the third quarter of 2022 to $164,376 compared to the third quarter of 2021 in the amount of $204,796, from decreased business as a result of changes in the customer base from the Company's organic waste processing and composting facility.

In addition, included in third quarter of 2022 and noted under note 15, other expenses, in the interim condensed consolidated financial statements, is other revenue of $132,826 (CA$170,333) from the sale of VEERS generated during the years 2017 and 2018.

"We continue to process municipal organic waste streams, diverting them from landfills, while producing regenerative products and monetizing carbon 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 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 Third Quarter Financial Results

For the third quarter ended September 30, 2022, SusGlobal recorded:

  • Revenue of $164,376.
  • Cost of sales of $495,742.
  • Operating expenses of $1,800,821, comprised primarily of $659,050 of stock-based compensation, $378,510 of foreign exchange, $208,537 of interest expense, $190,653 of professional fees, $175,288 of total management compensation including stock-based compensation of $60,113 and $188,783 of other operating expenses.
  • Net loss of $3,696,980, or $0.04 loss per share- basic and diluted.
  • Included in the other expenses for the period was a charge of $1,447,619 on the revaluation of the convertible promissory notes.
  • Adjusted EBITDA (a non-GAAP financial measure) loss of $1,180,853.
  • $10,833,317 in total assets and $17,231,103 in total current liabilities at the end of the third 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 September 30, 2022 and December 31, 2021
(Expressed in United States Dollars)
(unaudited)



September 30,
December 31,


2022
2021
ASSETS



Current Assets



Cash$4,114   $36,033
Trade receivables
70,746
59,665
Government remittances receivable
51,174
13,265
Other receivable
140,431
-
Inventory
48,154
20,582
Prepaid expenses and deposits
1,411,489
163,343
Total Current Assets
1,726,108
292,888





Long-lived Assets, net
9,107,209
8,278,833
Long-Term Assets
9,107,209
8,278,833
Total Assets$10,833,317
   $8,571,721
LIABILITIES AND STOCKHOLDERS' DEFICIENCY



Current Liabilities



Accounts payable $3,686,160   $1,085,235
Government remittances payable
326,360
262,047
Accrued liabilities
1,609,104
942,241
Current portion of long-term debt
4,901,448
7,765,421
Current portion of obligations under capital lease
60,680
91,047
Convertible promissory notes
6,567,989
3,798,516
Due to related party
79,362
-
Total Current Liabilities
17,231,103
13,944,507
Long-term debt
3,857,055
1,752,271
Obligations under capital lease
78,063
130,086
Deferred tax liability
68,377
73,925
Total Long-term Liabilities
4,003,495
1,956,282
Total Liabilities
21,234,598
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, 107,313,135 (2021- 92,983,547) shares issued and outstanding

10,736
9,302
Additional paid-in capital
16,167,554
11,272,599
Shares to be issued
60,100
59,640
Accumulated deficit
(27,123,524)
(18,334,649)
Accumulated other comprehensive income (loss)
483,853
(335,960)





Stockholders' deficiency
(10,401,281)
(7,329,068)





Total Liabilities and Stockholders' Deficiency$10,833,317   $8,571,721

 

SusGlobal Energy Corp.
Interim Condensed Consolidated Statements of Operations and Comprehensive Loss
For the three-month periods ended September 30, 2022 and 2021
(Expressed in United States Dollars)
(unaudited)



For the three-month periods ended


September 30, 2022
September 30, 2021





Revenue$164,376   $204,796





Cost of Sales



Opening inventory
19,555
35,983
Depreciation
112,731
116,632
Direct wages and benefits
52,860
74,093
Equipment rental, delivery, fuel and repairs and maintenance
365,975
371,424
Utilities
(7,760)
16,872
Outside contractors
535
39,717


543,896
654,721
Less: closing inventory
(48,154)
(21,506)
Total cost of sales
495,742
633,215





Gross loss
(331,366)
(428,419)
Operating expenses



Management compensation-stock-based



compensation
60,113
54,259
Management compensation-fees
115,175
90,471
Marketing
(250)
30,131
Professional fees
190,653
100,454
Interest expense and default amounts
208,537
222,271
Office and administration
67,377
66,329
Rent and occupancy
54,586
56,148
Insurance
12,867
19,719
Filing fees
9,699
49,131
Amortization of financing costs
27,752
41,177
Directors' compensation
14,366
14,905
Stock-based compensation
659,050
31,946
Repairs and maintenance
2,386
3,688
Foreign exchange loss (income)
378,510
35,569
Total operating expenses
1,800,821
816,198
Net loss from operating activities
(2,132,187)
(1,244,617)
Other expenses
(1,564,793)
(451,805)
Net Loss before income taxes recovery
(3,696,980)
(1,696,422)
Income taxes recovery
-
26,552
Net loss
(3,696,980)
(1,669,870)
Other comprehensive loss



Foreign exchange income
652,484
123,966





Comprehensive loss$(3,044,496)   $(1,545,904)
Net loss per share-basic and diluted$(0.04)   $(0.02)
Weighted average number of common shares outstanding- basic and diluted
105,189,849
92,969,542

 

SusGlobal Energy Corp.
Interim Condensed Consolidated Reconciliation of Non-GAAP Information
For the three-month periods ended September 30, 2022 and 2021
(Expressed in United States Dollars)
(Unaudited)







For the three-month periods ended

September 30, 2022September 30, 2021
Net loss (GAAP)$(3,696,980)  $(1,669,870)
Add-back the following items:



Interest expense
208,537
222,271
Depreciation and amortization
113,056
117,030
Stock-based compensation
719,163
31,946
Amortization of financing costs
27,752
41,177
Loss on revaluation of convertible promissory notes
1,447,619
451,805
Adjusted EBITDA (non-GAAP) $(1,180,853)  $(832,193)

 

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/144336

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