SusGlobal Energy Corp. Reports First Quarter 2021 Financial Results

TORONTO, Ontario – May 25, 2021 – SusGlobal Energy Corp. (“SusGlobal”) or (the “Company”) (OTCQB: SNRG), 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, 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 $3,578,400 (C$4,500,000), including a vendor take-back mortgage of $1,590,400 (C$2,000,000) at an annual interest rate of 2% maturing two years after closing. A deposit of $159,040 (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 $39,601 (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.
  • On April 8, 2021, the Company completed the purchase of its International Prostar Truck and Trout River Hy-Cube, 53ft wide with a 125.5 cubic yard capacity hauling trailer for a total purchase price of $173,622 (C$218,338), plus the applicable harmonized sales taxes and administrative costs. The Company paid deposits of $39,118 (C$49,193) on this purchase and financed the balance over a period of forty-eight months at a monthly principal and interest payment of $3,659 (C$4,601) at an interest rate of 4.95% per annum.
  • On May 7, 2021, the Company received a signed letter of intent for the purchase of the shares of two corporations which own proprietary processes, manufacture liquid organic fertilizers and other products. The total purchase price will be $15,904,000 (C$20,000,000) consisting of fifty percent in cash and fifty percent in common stock of the Company. The transaction is set to close on August 31, 2021.

Revenue decreased by 44.99% during the first quarter of 2021 to $192,660 compared to the first quarter of 2020 in the amount of $350,197, 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 First Quarter Financial Results

For the first quarter ended March 31, 2021, SusGlobal recorded:

  • Revenue of $192,660.
  • Cost of sales of $310,592.
  • Operating expenses of $593,212, comprised of $163,874 of interest expenses, $144,308 of management compensation, including stock-based compensation of $54,259, $75,215 of office and administration, $64,402 of professional fees, $45,727 of marketing expenses, $32,339 of rent and occupancy and other operating expenses totalling $67,347.
  • Other income of $404,809 consisting of gain on the forgiveness of conversion promissory notes of $359,460 and a gain on the disposal of a long-lived asset of $45,349.
  • Net loss of $306,335, or $0.01 loss per share- basic and diluted.
  • Adjusted EBITDA (a non-GAAP financial measure) income of $72,179.
  • $6,108,081 in total assets and $9,772,324 in total liabilities at the end of the first 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 March 31, 2021 and December 31, 2020

(Expressed in United States Dollars)

(unaudited)

 

 

March 31,

 

 

December 31,

 

 

 

2021

 

 

2020

 

ASSETS            
Current Assets            
Cash $

166,998

  $

6,457

 
Trade receivables  

67,781

   

182,871

 
Government remittances receivable  

5,832

   

3,746

 
Other receivable  

52,559

   

 
Inventory  

45,923

   

24,740

 
Prepaid expenses and deposits  

442,500

   

94,131

 
Deferred assets  

214,704

   

215,953

 
Total Current Assets  

996,297

   

527,898

 
   

 

   

 

 
Intangible Assets  

193,158

   

188,180

 
Long-lived Assets, net  

4,918,626

   

5,042,225

 
Long-Term Assets  

5,111,784

   

5,230,405

 
Total Assets $

6,108,081

  $

5,758,303

 
LIABILITIES AND STOCKHOLDERS’ DEFICIENCY  

 

   

 

 
Current Liabilities  

 

   

 

 
Accounts payable $

1,111,461

  $

1,073,454

 
Government remittances payable  

259,568

   

229,358

 
Accrued liabilities  

979,119

   

1,206,618

 
Advance  

   

15,460

 
Deferred revenue  

2,756

   

4,790

 
Current portion of long-term debt  

6,404,823

   

6,327,520

 
Current portion of obligations under capital lease  

177,830

   

375,140

 
Convertible promissory notes  

479,000

   

1,092,100

 
Loan payable to related party  

18,290

   

33,772

 
Total Current Liabilities  

9,432,847

   

10,358,212

 
Long-term debt  

79,520

   

78,540

 
Obligations under capital lease  

176,427

   

 
Deferred tax liability  

83,530

   

82,501

 
Total Long-term Liabilities  

339,477

   

161,041

 
Total Liabilities  

9,772,324

   

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
 

8,920

   

8,288

 
Additional paid-in capital  

10,451,369

   

9,045,187

 
Shares to be issued  

66,000

   

8,580

 
Accumulated deficit  

(13,775,129

)  

(13,468,794

)
Accumulated other comprehensive loss  

(415,403

)  

(354,211

)
   

 

   

 

 
Stockholders’ deficiency  

(3,664,243

)  

(4,760,950

)
   

 

   

 

 
Total Liabilities and Stockholders’ Deficiency $

6,108,081

  $

5,758,303

 

 

SusGlobal Energy Corp.
Interim Condensed Consolidated Statements of Operations and Comprehensive Loss
For the three-month periods ended March 31, 2021 and 2020
(Expressed in United States Dollars)
(Unaudited)

 

 

 

 

For the three-month periods ended

 

 

 

March 31,

 

 

March 31,

 

 

 

2021

 

 

2020

 

             
Revenue $

192,660

  $

350,197

 
   

 

   

 

 
Cost of Sales  

 

   

 

 
Opening inventory  

24,740

   

5,389

 
Depreciation  

136,560

   

113,109

 
Direct wages and benefits  

71,059

   

76,183

 
Equipment rental, delivery, fuel and repairs and maintenance  

105,893

   

61,302

 
Utilities  

18,263

   

38,277

 
Outside contractors  

   

3,573

 
   

356,515

   

297,833

 
Less: closing inventory  

(45,923

 

(4,071

Total cost of sales  

310,592

   

293,762

 
   

 

   

 

 
Gross (loss) profit  

(117,932

 

56,435

 
   

 

   

 

 
Operating expenses  

 

   

 

 
Management compensation-stock- based  

 

   

 

 
compensation  

54,259

   

 
Management compensation-fees  

90,049

   

51,357

 
Marketing  

45,727

   

2,917

 
Professional fees  

64,402

   

81,448

 
Interest expense and default amounts  

163,874

   

312,291

 
Office and administration  

75,215

   

55,685

 
Rent and occupancy  

32,339

   

28,297

 
Insurance                                                           

15,002

   

18,179

 
Filing fees  

18,959

   

13,880

 
Amortization of financing costs  

13,578

   

92,538

 
Directors’ compensation  

10,664

   

(1,420

)
Stock-based compensation  

8,073

   

 
Repairs and maintenance  

13,189

   

6,458

 
Foreign exchange (income) loss  

(12,118

)  

150,095

 
Total operating expenses  

593,212

   

811,725

 
   

 

   

 

 
Net loss from operating activities  

(711,144

)  

(755,290

)
Other income  

404,809

   

 
Net loss  

(306,335

)  

(755,290

)
Other comprehensive (loss) income  

 

   

 

 
Foreign exchange (loss) gain  

(61,192

)  

301,639

 
   

 

   

 

 
Comprehensive loss $

(367,527

) $

(453,651

)
   

 

   

 

 
Net loss per share-basic and diluted $

(0.01

) $

(0.01

)
   

 

   

 

 
Weighted average number of common shares outstanding- basic and diluted  

86,818,361

   

57,441,740

 

SusGlobal Energy Corp.
Interim Condensed Consolidated Reconciliation of Non-GAAP Information
For the three-month periods ended March 31, 2021 and 2020
(Expressed in United States Dollars)
(Unaudited)

                 
                            For the three-month periods ended
    

         March 31, 2021

   

March 31, 2020

 
Net loss (GAAP)    $

(306,335

)   $

(755,290

Add the following items:                 
Interest expense     

163,874

     

312,291

 
Depreciation and amortization     

138,730

     

114,932

 
Stock-based compensation    

62,332

     

 
Amortization of financing costs     

13,578

     

92,538

 
Adjusted EBITDA (non-GAAP)           $

72,179

    $

(235,529)

 

 

Contact

SusGlobal Energy Corp. 
Marc Hazout, President and CEO
(416) 223-8500 or Toll Free: 1-866-512-7374 
Email: info@susglobalenergy.com