SusGlobal Energy Corp. Reports Second Quarter 2021 Financial Results

SusGlobal Energy Corp. Reports Second Quarter 2021 Financial Results

TORONTO, Ontario – August 17, 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 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