Overview of SusGlobal Energy Corp.

SusGlobal Energy Corp. is a renewable energy company focused on acquiring, developing and monetizing a global portfolio of proprietary technologies in the waste-to-energy and regenerative products application. The company was formed in 2014 and is headquartered in Toronto, Ontario, Canada.

SusGlobal’s primary business is processing organic waste, such as food, plant and animal waste, through various technologies to produce renewable energy, organic fertilizers and other valuable end products. The company owns and operates an organic waste processing and composting facility in Belleville, Ontario that has the capacity to accept up to 70,000 metric tonnes of waste annually.

The company also owns a partially completed 41,535 square foot facility in Hamilton, Ontario that is designed to produce and distribute organic liquid fertilizer and other products. SusGlobal is currently seeking funding to complete the Hamilton facility and address compliance issues at the Belleville facility.

Financial Performance

For the six-month period ended June 30, 2024, SusGlobal reported total revenue of $38,575, down significantly from $318,174 in the same period of the prior year. This decrease was due to the company ceasing waste acceptance at the Belleville facility in January 2024 to address compliance issues ordered by regulators.

The company incurred a net loss of $3,904,847 for the six-month period, compared to a net loss of $3,981,950 in the prior year period. The losses were driven by high operating expenses, including $590,319 in interest expense, $420,678 in professional fees, and $474,038 in foreign exchange losses.

As of June 30, 2024, SusGlobal had a working capital deficit of $32,986,136 and an accumulated deficit of $42,475,378. The company does not currently have sufficient funds to satisfy its $33,162,594 in current debt obligations and requires significant new funding to continue operations and complete necessary facility upgrades.

Strengths and Weaknesses

One of SusGlobal’s key strengths is its proprietary technologies and processes for converting organic waste into valuable end products like biogas, organic fertilizers and compost. The company’s facilities have the capacity to process large volumes of waste, which provides opportunities to generate revenue from tipping fees and product sales.

However, the company has struggled with regulatory compliance issues at its Belleville facility, which led to the facility being shut down in January 2024. This has severely impacted SusGlobal’s revenue and cash flow. The company also faces a significant debt burden and working capital deficit, which raises substantial doubt about its ability to continue as a going concern.

Another weakness is the company’s reliance on external financing. SusGlobal has utilized various debt instruments, including convertible promissory notes and mortgages, to fund its operations and capital expenditures. This has resulted in high interest expenses and the risk of default, as evidenced by several of the company’s financing agreements being in default.

Outlook and Future Plans

SusGlobal’s management believes the company’s technologies and services can provide significant value in the growing renewable energy and sustainable waste management markets. However, the company’s near-term outlook is uncertain due to the compliance issues at the Belleville facility and its precarious financial position.

The company is currently focused on securing additional funding, either through equity financing or new debt arrangements, to address the Belleville facility’s compliance matters and complete the Hamilton facility. Management believes these investments are necessary to position SusGlobal for long-term success in the waste-to-energy and regenerative products markets.

If SusGlobal is able to resolve its regulatory issues and secure sufficient funding, the company’s future plans include expanding its organic waste processing capabilities, increasing production of renewable energy and regenerative products, and pursuing strategic acquisitions or partnerships to grow its global footprint. However, the realization of these plans is heavily dependent on the company’s ability to improve its financial condition in the near-term.

In summary, SusGlobal Energy Corp. is a renewable energy company with promising technologies and market opportunities, but it currently faces significant operational and financial challenges that raise substantial doubt about its ability to continue as a going concern. The company’s future success will depend on its ability to address regulatory compliance issues, reduce its debt burden, and secure the necessary funding to invest in its facilities and growth initiatives.