Aug 17, 2023
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SusGlobal Energy Corp. Reports Second Quarter 2021 Financial Results
August 17, 2021 4:01 PM EDT | Source: SusGlobal Energy Corp.
Toronto, Ontario--(Newsfile Corp. - August 17, 2021) - 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 second quarter ended June 30, 2021 and provided an update on its operational progress.
Recent Highlights
- On February 10, 2021, the Company signed an Agreement of Purchase and Sale (the "APS") for certain assets for $3,630,600 (C$4,500,000), including a vendor take-back mortgage of $1,613,600 (C$2,000,000) at an annual interest rate of 2% maturing two years after closing. A deposit of $161,360 (C$200,000) was paid by the Company on February 10, 2021. The APS was amended on April 8, 2021, to revise the closing date to June 4, 2021, subject to successful completion of the due diligence process and the completion of the Phase II Environmental Site Assessment at a cost of $40,179 (C$49,800), plus applicable harmonized sales taxes, expected on or before May 19, 2021. On May 20, 2021, the Company and the vendor signed a waiver and amending agreement, waiving the due diligence process and revising the closing date to June 16, 2021. A second deposit of $121,020 (C$150,000) was paid by the Company on June 1, 2021. The APS was amended on August 3, 2021, to revise the closing date to August 17, 2021 and the Company will receive a $302,550 (C$375,000) credit on closing for certain deficiencies. In addition, the Company will issue 300,000 common shares to the vendor on closing. To finance the closing, the Company increased its 1st mortgage by $1,532,920 (C$1,900,000). The funds are being held in escrow on August 16, 2021.
- On July 2, 2021, the Company revised a letter of intent with the vendors for the purchase of the shares of their two corporations which own proprietary processes, manufacture liquid organic fertilizers and other products. The transaction is set to close on August 31, 2021 with a total purchase price of $16,136,000 (C$20,000,000), which will consist of cash of $8,068,000 (C$10,000,000) and common shares of the Company having a value of $8,068,000 (C$10,000,000).
Revenue decreased by 44.43% during the second quarter of 2021 to $212,632 compared to the second quarter of 2020 in the amount of $382,639, 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. 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 our regional strategy with a second facility 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 Second Quarter Financial Results
For the second quarter ended June, 2021, SusGlobal recorded:
- Revenue of $212,632.
- Cost of sales of $290,676.
- Operating expenses of $719,917, comprised of $168,718 of interest expenses, $147,134 of management compensation, including stock-based compensation of $54,259, $122,543 of amortization of financing costs, $82,747 of marketing, $70,844 of professional fees, $36,580 of rent and occupancy, $29,620 of office and administration and other operating expenses totalling $61,731.
- Net loss of $797,961, or $0.01 loss per share- basic and diluted.
- Adjusted EBITDA (a non-GAAP financial measure) loss of $286,609.
- $6,059,564 in total assets and $9,914,442 in total liabilities at the end of the second 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 June 30, 2021 and December 31, 2020
(Expressed in United States Dollars)
(unaudited)
| June 30, | December 31, | |||||
| 2021 | 2020 | |||||
| ASSETS | ||||||
| Current Assets | ||||||
| Cash | $ | 21,423 | $ | 6,457 | ||
| Trade receivables | 74,097 | 182,871 | ||||
| Government remittances receivable | 6,441 | 3,746 | ||||
| Inventory | 35,983 | 24,740 | ||||
| Prepaid expenses and deposits | 692,648 | 94,131 | ||||
| Deferred assets | - | 215,953 | ||||
| Total Current Assets | 830,592 | 527,898 | ||||
| Intangible Assets | 196,177 | 188,180 | ||||
| Long-lived Assets, net | 5,032,795 | 5,042,225 | ||||
| Long-Term Assets | 5,228,972 | 5,230,405 | ||||
| Total Assets | $ | 6,059,564 | $ | 5,758,303 | ||
| LIABILITIES AND STOCKHOLDERS' DEFICIENCY | ||||||
| Current Liabilities | ||||||
| Accounts payable | $ | 883,781 | $ | 1,073,454 | ||
| Government remittances payable | 239,342 | 229,358 | ||||
| Accrued liabilities | 820,847 | 1,206,618 | ||||
| Advance | - | 15,460 | ||||
| Deferred revenue | - | 4,790 | ||||
| Current portion of long-term debt | 6,532,597 | 6,327,520 | ||||
| Current portion of obligations under capital lease | 138,364 | 375,140 | ||||
| Convertible promissory notes | 848,022 | 1,092,100 | ||||
| Loan payable to related party | - | 33,772 | ||||
| Total Current Liabilities | 9,462,953 | 10,358,212 | ||||
| Long-term debt | 198,223 | 78,540 | ||||
| Obligations under capital lease | 168,517 | - | ||||
| Deferred tax liability | 84,749 | 82,501 | ||||
| Total Long-term Liabilities | 451,489 | 161,041 | ||||
| Total Liabilities | 9,914,442 | 10,519,253 | ||||
| Stockholders' Deficiency | ||||||
| Preferred stock, $.0001 par value, 10,000,000 authorized, none issued and outstanding Common stock, $.0001 par value, 150,000,000 authorized, 89,184,951 (2020- 82,860,619) shares issued and outstanding | 9,184 | 8,288 | ||||
| Additional paid-in capital | 11,171,385 | 9,045,187 | ||||
| Shares to be issued | - | 8,580 | ||||
| Accumulated deficit | (14,573,090) | (13,468,794) | ||||
| Accumulated other comprehensive loss | (462,357) | (354,211) | ||||
| Stockholders' deficiency | (3,854,878) | (4,760,950) | ||||
| Total Liabilities and Stockholders' Deficiency | $ | 6,059,564 | $ | 5,758,303 |
SusGlobal Energy Corp.
Interim Condensed Consolidated Statements of Operations and Comprehensive Loss
For the three-month periods ended June 30, 2021 and 2020
(Expressed in United States Dollars)
(Unaudited)
| For the three-month periods ended | ||||||
| June 30, | June 30, | |||||
| 2021 | 2020 | |||||
| Revenue | $ | 212,632 | $ | 382,639 | ||
| Cost of Sales | ||||||
| Opening inventory | 45,923 | 4,071 | ||||
| Depreciation | 135,539 | 121,158 | ||||
| Direct wages and benefits | 65,390 | 85,063 | ||||
| Equipment rental, delivery, fuel and repairs and maintenance | 69,280 | 96,854 | ||||
| Utilities | (10,845 | ) | 7,963 | |||
| Outside contractors | 21,372 | 1,706 | ||||
| 326,659 | 316,815 | |||||
| Less: closing inventory | (35,983 | ) | - | |||
| Total cost of sales | 290,676 | 316,815 | ||||
| Gross (loss) profit | (78,044 | ) | 65,824 | |||
| Operating expenses | ||||||
| Management compensation-stock- based | ||||||
| compensation | 54,259 | - | ||||
| Management compensation-fees | 92,875 | 49,825 | ||||
| Marketing | 82,747 | (2,917) | ||||
| Professional fees | 70,844 | 107,887 | ||||
| Interest expense and default amounts | 168,718 | 283,409 | ||||
| Office and administration | 29,620 | 77,000 | ||||
| Rent and occupancy | 36,580 | 28,763 | ||||
| Insurance | 16,385 | 23,921 | ||||
| Filing fees | 17,188 | 8,266 | ||||
| Amortization of financing costs | 122,543 | 30,471 | ||||
| Directors' compensation | 12,672 | 1,853 | ||||
| Stock-based compensation | 28,209 | - | ||||
| Repairs and maintenance | (5,402) | | 2,453 | |||
| Foreign exchange income | (7,321) | (84,635) | ||||
| Total operating expenses | 719,917 | 526,296 | ||||
| Net loss from operating activities | (797,961) | (460,472) | ||||
| Other loss | - | (58,704) | ||||
| Net loss before deferred taxes recovery | (797,961) | (519,176) | ||||
| Deferred taxes recovery | - | 196,005 | ||||
| Net loss | (797,961) | (323,171) | ||||
| Other comprehensive loss | ||||||
| Foreign exchange loss | (46,954) | (157,805) | ||||
| Comprehensive loss | $ | (844,915) | $ | (480,976) | ||
| Net loss per share-basic and diluted | $ | (0.01) | $ | (0.01) | ||
| Weighted average number of common shares outstanding- basic and diluted | 92,767,400 | 63,853,597 | ||||
SusGlobal Energy Corp.
Interim Condensed Consolidated Reconciliation of Non-GAAP Information
For the three-month periods ended June 30, 2021 and 2020
(Expressed in United States Dollars)
(Unaudited)
| For the three-month periods ended | |||||
| June 30, 2021 | June 30, 2020 | ||||
| Net loss (GAAP) | $ | (797,961) | $ | (323,171) | |
| Add the following items: | |||||
| Interest expense | 168,718 | 283,409 | |||
| Depreciation and amortization | 137,623 | 124,070 | |||
| Stock-based compensation | 82,468 | - | |||
| Amortization of financing costs | 122,543 | 30,471 | |||
| Adjusted EBITDA (non-GAAP) | $ | (286,609) | $ | 114,779 | |
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/93424