SusGlobal Energy Corp. Reports Second Quarter 2020 Financial Results

TORONTO, ON / ACCESSWIRE / August 19, 2020 / SusGlobal Energy Corp. (OTCQB:SNRG), the developer of SusGro™, a revolutionary pathogen-free organic liquid fertilizer, today announced financial results for the second quarter ended June 30, 2020 and provided an update on its operational progress.

Recent Highlights

On May 27, 2020, the Company commenced The Ydro Process® integration into the existing operations at the Organic Waste Processing and Composting Facility of its wholly owned subsidiary SusGlobal Energy Belleville Ltd. applying the Ydro Series® Microorganisms product once during the preparation stage of the batches in the appropriate Gore® system windrows and continues to see positive results.

On July 16, 2020, the Company received a Certificate of Registration from the United States Patent and Trademark Office ("USPTO") for the trademark LEADERS IN THE CIRCULAR ECONOMY (the "Mark"). The Mark was registered under Registration Number 6,098,063 on July 7, 2020 on the Supplemental Register. The registration will be in effect for an initial term of ten years, expiring on July 7, 2030, with the option of renewing the registration for successive ten-year terms. Now that the Mark is registered, it is permitted to use indicia of registration (e.g. ®, or phrases such as "Reg. U.S. Pat. and T.M. Office").

Revenue remained relatively flat during the second quarter of 2020 in the amount of $382,639 compared to the second quarter of 2019 in the amount of $381,834, including the new revenue from the Company's new garbage collection and landfill management operations, in the amount of $49,544.

During the second quarter of 2020, the Company finalized the purchase price allocation related to the business acquisition of 1684567 Ontario Inc. ("1684567"), which closed on May 28, 2019.

"We continue to process municipal organic waste streams, diverting them from landfills, while producing regenerative products as part of our Circular Economy model. We have confidence in a revenue ramp up for next year," said Marc Hazout, Executive Chairman, President and CEO of SusGlobal Energy Corp. "Our goal is to increase revenue and cash flow as quickly as possible to payoff all outstanding convertible notes, increasing shareholder value with an objective to up-list to a major exchange."

Unaudited 2020 Second Quarter Financial Results

For the second quarter ended June 30, 2020, SusGlobal recorded:

Revenue of $382,639.

Cost of sales of $316,815.

Operating expenses of $526,296 (GAAP), comprised of $283,409 of interest expenses, $107,887 of professional fees, $49,825 of management compensation, $84,635 of foreign exchange income, and $169,810 of other expenses, including, office and administration, amortization of financing fees, rent and occupancy and other operating expenses.

During the second quarter, the land option the Company acquired on the business acquisition of 1684567 had expired and was written off.

Net loss of $323,171, or $0.01 loss per share- basic and diluted.

Adjusted EBITDA (a non-GAAP financial measure) income of $114,779.

$5,166,750 in total assets at the end of the second quarter, with total liabilities of $9,203,951

About SusGlobal Energy Corp.

SusGlobal Energy Corp. (OTCQB: SNRG) 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 application 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: www.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, 2020 and December 31, 2019
(Expressed in United States Dollars)
(unaudited)

 
June 30, 2020
 
 
December 31, 2019
 

ASSETS

Current Assets

Cash and cash equivalents

 
$
12,637
 
 
$
7,926
 

Restricted cash-funds held in trust

 
 
–
 
 
 
467,798
 

Trade receivables

 
 
115,454
 
 
 
121,276
 

Government remittances receivable

 
 
39,118
 
 
 
38,578
 

Other receivables

 
 
–
 
 
 
20,624
 

Inventory

 
 
–
 
 
 
5,389
 

Prepaid expenses and deposits

 
 
68,461
 
 
 
46,028
 

Total Current Assets

 
 
235,670
 
 
 
707,619
 

Intangible Assets

 
 
242,988
 
 
 
237,271
 

Long-lived Assets, net

 
 
4,688,092
 
 
 
4,762,453
 

Total Assets

 
$
5,166,750
 
 
$
5,707,343
 

LIABILITIES AND STOCKHOLDERS' DEFICIENCY

Current Liabilities

Accounts payable

 
$
964,477
 
 
$
958,313
 

Government remittances payable

 
 
116,201
 
 
 
35,187
 

Accrued liabilities

 
 
531,473
 
 
 
487,592
 

Advance

 
 
–
 
 
 
3,255
 

Deferred revenue

 
 
6,441
 
 
 
9,239
 

Current portion of long-term debt

 
 
5,476,357
 
 
 
5,793,677
 

Current portion of obligations under capital lease

 
 
420,063
 
 
 
218,069
 

Convertible promissory notes

 
 
1,556,855
 
 
 
1,406,029
 

Loans payable to related party

 
 
73,380
 
 
 
–
 

Total Current Liabilities

 
 
9,145,247
 
 
 
8,911,361
 

Long-term debt

 
 
58,704
 
 
 
–
 

Total Long-term Liabilities

 
 
58,704
 
 
 
–
 

Total Liabilities

 
 
9,203,951
 
 
 
8,911,361
 

Stockholders' Deficiency

Preferred stock, $.0001 par value, 10,000,000 authorized, none issued and outstanding

Common stock, $.0001 par value, 150,000,000 authorized, 64,329,157 (December 31, 2019- 51,784,504) shares issued and outstanding

 
 
6,435
 
 
 
5,180
 

Additional paid-in capital

 
 
8,544,263
 
 
 
7,450,091
 

Subscriptions payable

 
 
13,000
 
 
 
–
 

Stock compensation reserve

 
 
–
 
 
 
1,000,000
 

Accumulated deficit

 
 
(12,534,941)
 
 
 
(11,449,497
)

Accumulated other comprehensive loss

 
 
(65,958)
 
 
 
(209,792
)

Total stockholders' deficiency

 
 
(4,037,201)
 
 
 
(3,204,018
)

Total Liabilities and Stockholders' Deficiency

 
$
5,166,750
 
 
$
5,707,343
 

SusGlobal Energy Corp.
Interim Condensed Consolidated Statements of Operations and Comprehensive Loss
For the three-month periods ended June 30, 2020 and 2019
(Expressed in United States Dollars)
(unaudited)

 
For the three-month periods ended
 

 
June 30, 2020
 
 
June 30, 2019
 

Revenue

 
$
382,639
 
 
$
381,834
 

Cost of Sales

Opening inventory

 
 
4,071
 
 
 
26,409
 

Depreciation

 
 
121,158
 
 
 
101,072
 

Direct wages and benefits

 
 
85,063
 
 
 
59,667
 

Equipment rental, delivery, fuel and repairs and maintenance

 
 
96,854
 
 
 
104,916
 

Utilities

 
 
7,963
 
 
 
32,695
 

Outside contractors

 
 
1,706
 
 
 
4,597
 

 
 
316,815
 
 
 
329,356
 

Less: closing inventory

 
 
–
 
 
 
(24,738
)

Total cost of sales

 
 
316,815
 
 
 
304,618
 

Gross profit

 
 
65,824
 
 
 
77,216
 

Operating expenses

Management compensation-stock- based compensation

 
 
–
 
 
 
332,500
 

Management compensation-fees

 
 
49,825
 
 
 
80,740
 

Marketing

 
 
(2,917)
 
 
 
(33,323
)

Professional fees

 
 
107,887
 
 
 
72,269
 

Interest expense and default payments

 
 
283,409
 
 
 
150,407
 

Office and administration

 
 
77,000
 
 
 
67,834
 

Rent and occupancy

 
 
28,763
 
 
 
34,820
 

Insurance

 
 
23,921
 
 
 
13,951
 

Filing fees

 
 
8,266
 
 
 
16,414
 

Amortization of financing costs

 
 
30,471
 
 
 
53,768
 

Directors' compensation

 
 
1,853
 
 
 
9,748
 

Repairs and maintenance

 
 
2,453
 
 
 
2,493
 

Foreign exchange income

 
 
(84,635)
 
 
 
(21,454
)

Total operating expenses

 
 
526,296
 
 
 
780,167
 

Net Loss from operating activities

 
 
(460,472)
 
 
 
(702,951
)

Land option expired

 
 
(58,704)
 
 
 
–
 

Net loss before deferred taxes recovery

 
 
(519,176)
 
 
 
(702,951
)

Deferred taxes recovery

 
 
196,005
 
 
 
–
 

Net Loss

 
 
(323,171)
 
 
 
(702,951
)

Other comprehensive loss

Foreign exchange loss

 
 
(157,805)
 
 
 
(49,972
)

Comprehensive loss

 
$
(480,976)
 
 
$
(752,923
)

Net loss per share-basic and diluted

 
$
(0.01)
 
 
$
(0.02
)

Weighted average number of common shares outstanding- basic and diluted

 
 
63,853,597
 
 
 
42,460,795
 

SusGlobal Energy Corp.
Interim Condensed Consolidated Reconciliation of Non-GAAP Information
For the three-month periods ended June 30, 2020 and 2019
(Expressed in United States Dollars)
(Unaudited)

 
For the three-month periods ended
 

 
June 30, 2020
 
 
June 30, 2019
 

Net loss (GAAP)

 
$
(323,171)
 
 
$
(702,951
)

Add the following items:

Interest expense

 
 
283,409
 
 
 
150,407
 

Depreciation and amortization

 
 
124,070
 
 
 
105,546
 

Stock-based compensation and shares issued for professional services

 
 
–
 
 
 
332,500
 

Amortization of financing costs

 
 
30,471
 
 
 
53,768
 

Adjusted EBITDA (non-GAAP)

 
$
114,779
 
 
$
(60,730
)

Contact

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

SOURCE: SusGlobal Energy Corp.

ReleaseID: 602478