Susglobal Energy Corp (SNRG)

[3p1cdud3]

Good to have you a

[cheusmann]

Took a position here again. Let's see what happens. Have had my eye on this stock for a while now.

[stoneroad]

Good day. Buys down in the .11’s are looking good. Let’s hope we continue up next week!!

[stoneroad]

With it being less than 1/2 a penny, I was thinking the same. Just on principal, I hate gaps.

[Stock Sumo]

Such a miniscule gap I think its irrelevant. I understand your thought process as gaps often like to get filled but in this case I would tend to disagree...

[Horsin around]

Cdel has 100k order at .12. That will get filled. They always get what they want. Then I think it starts going back up fairly quickly

[stoneroad]

Wish we did not have the gap in the chart from yesterday/today

[Stock Sumo]

Agreed I wanna see us atleast back above .23 because thats the 200 DMA and in order for the chart to start shaping back up technically we need to hold above that.

[Horsin around]

Hopefully they are done. Would like to get back to .26 range

[Stock Sumo]

Yup looks like the tax loss selling pressure is starting to dry up. May have just been one or two larger holders who wanted out and through in the towel. Gave others an excellent opportunity to get cheap shares!

[stoneroad]

Looks like our seller may be gone. One can hope.

[Stock Sumo]

Excellent recap. Spot on

[synaphai]

It seems to me to boil down to how much credence you put into Bruce's comment in the offtake press release that the company is expecting strategic funding. Without near-term funding the company could realistically get swallowed by debt. Marc has shown that he can talk a detailed game but has not shown he can deliver and his last company never got off the ground. Bruce, however, has the experience. His Linkedin is impressive including being a Senior VP of Operations for a North American subsidiary that produced $9.8 billion in revenue last year.

But financing has to happen. A $138 million offtake is great but without facilities to generate product it means nothing. There are green economy companies right now with offtake agreements in the billions from major global corporations that can't find the funds needed to build their facilities. Granted, those are much more expensive facilities but it shows how hard it is to square the circle. If Bruce and Susglobal can find the funds, the company should be worth much more than it is today. If not, the future could be even rougher than the past.

[Horsin around]

No. Just no lies and no 80% decrease in share price.

[Stock Sumo]

Want a lollipop?

[Horsin around]

80%

[Horsin around]

Thanks for the deep insight diamond hands. Stock down 800% and your advice is to shut up and take it and hold with zero explanation on why. Solid

[Stock Sumo]

Go grab a pillow to cry in or something. Does it suck? Yea, but your not going to hear me whining or whimpering... I will hold my balls and wait through the shit storm like I have been. It's tax loss season selling.....

[stoneroad]

I’m nibbling.

[Horsin around]

No one is even buying at these disaster levels. I can't believe we're here

[Horsin around]

If great news was around the corner, would we be seeing this action? Has anyone heard anything?

[Horsin around]

This is going sub .1 today. Wtf. Sub .1 I never thought. This is just horrible

[Horsin around]

I'm so mad. He's had years to deliver and he is screwing his long term shareholders. Nothing but crushing share price has occurred for 2 years. Why is it different now? This might eventually go but why now. This is insane and I don't understand why more people aren't pissed. Unless everyone already dumped everything and it's only about 3 people in here.

[Horsin around]

Why? Marc has clearly screwed all the long term investors. He doesn't care about shareholders. It has to run 800% to get to previous highs. Why do you think it's going to run 800%? This sucks

[stoneroad]

I may just have to buy some more today.

[Horsin around]

Diamond hands is one thing. Lying to investors is another. Remember that alpha wolf interview 2 years ago. Nothing from that interview has come true. It was all talk

[Stock Sumo]

Diamond hands bruh! Its an OTC Stock what did you expect? With a high degree of risk there is an opportunity of great rewards... Larger deals always take longer time to come to fruition...

[Horsin around]

Weak hands being shaken out is lame. It's more like they probably don't trust what's going on. Lowest stock has been in years and zero construction. Beyond infuriating with all the talk done by the company. According to their old investors presentations they should be already producing and bringing in over 100 million annually. Clearly that was a lie

[Stock Sumo]

We are also in a period of Tax loss season selling. I can tell in the last week that it feels like some are throwing in the towel and selling for a loss to write off for 2023. Its unfortunate to us longs who continue to sit through the bleeding. I'm not dumping for a loss I have too much at stake. 200k share bid that was sitting at .12 for a few weeks got smashed out today really sucks but is what it is. Have to hunker down and weather the storm. Week hands are being shaken out.

[Horsin around]

We're at .11. He hasn't delivered anything

[stoneroad]

Provided Marc delivers on the financing, share price should recover quickly imo.

[Horsin around]

.11 on the bid. This has to go 800% just to get to previous highs. I lost so much here. This sucks.

[Horsin around]

That's an excellent point. We've been waiting years so hopefully the financing comes soon. I'll be much happier about long term outlook once construction gets going. The lack of construction has me nervous. Marc has said he expected construction to be completed around end of year start of 24. Don't really get how he was so wrong about that. I can see this stock take off again with construction starting back up

[synaphai]

There has been about 30% dilution in the last couple of years so there are more shares but not sure that the float has risen quite that much though. The outstanding shares count on the OTC Markets website hasn't been updated since 11/6 so we don't know if there have been note conversions since then that have then been sold into the market. If so, that could account for the selling or maybe it's been someone or someones else.

But it still comes down to financing. That's the press release that should really make a difference. I've seen many companies, including one I have a big stake in currently, have their shares prices drop waiting on a financing deal in the works but that is taking seemingly forever to finalize, because closing deals takes time. Then the price takes off when funding is secured. We'll see if that happens here.

[Horsin around]

Is this in danger of going back to a penny? We get these pr's that seem like great news and then the price keeps falling and no construction. This makes zero sense. I guess all those years of massive dilution is catching up?

[stoneroad]

I’m certainly not happy.

[Horsin around]

Sub .13. I never thought we would be here again. This flipping sucks. Crushing us shareholders. Marc clearly doesn't care about the shareholders . This is down about 80% and no construction. How is noone else pissed?

[Horsin around]

Talk is fantastic. We've heard all talk for past 3 years. Now we're at lows. That's all I can speak too. Just getting very frustrated with lack of results and low stock price. I'm here for the massive massive potential. I'm just very frustrated. I'll take a step back and reevaluate. I'm just pissed.

Have a great Thanksgiving everyone

[synaphai]

What can he do right now?

Either the strategic financing that will allow the company to move toward fulfilling the offtake is being finalized and the company will have new life or debt could swamp the company. It seems like the last couple of years have led up to a make or break moment.

Bruce did say in the offtake press release on 10/3 that, "this investment grade 10-year agreement with a seasoned and experienced Offtaker is coming at a time of rapid growth, to be funded by strategic equity financing".

That sounds solid coming from Bruce and if there's one thing I know, it's that closing deals takes time but who knows whether a deal will actually materialize or not. Obviously the market thinks otherwise right now but that may or may not mean anything.

[Horsin around]

Marc is screwing his share holders

[Horsin around]

New lows. Wtf

[synaphai]

I probably could have been more clear.

The strategic financier will estimate what they think the company will be worth in the future minus debt and the capital needed to start producing RNG. Then they'll decide what percentage of that they'll be willing to pay today to get an attractive expected return on their investment.

If they want to buy 20% of the company, they can't buy 25 million shares on the open market and if they tried the price would shoot up so maybe that factors in to paying above or well above the current share price.

Given the offtake amount Susglobal has secured, the company should probably be worth more than the $18 million it's trading for today if there is a legitimate financing in the works. If not, debt could become overwhelming quickly.

I used the valuation model in the example I found in my last post to come up with $100 million as a very rough estimate because so much about the RNG business and what specifically could happen with a deal involving Susglobal is unknown to me.

And there's the question of what the company doing the financing is buying. Management, properties with mortgage payments, ECA's? The building at Hamilton is probably part of it because it seems like they'll need to have the waste dumped inside the building for odor control and a recent graphic produced by Suglobal shows the new property provides trucks a route out of the building. Something to watch is the very recent issuance of a Provincial Officer Order to Belleville for some unspecified violation of environmental regulations. That will have to be dealt with so the facility can operate normally again.

We'll just have to see what happens.

[Horsin around]

Thanks for sharing your thoughts. I need to explore more of what you wrote.

We are fast approaching annual lows. I still don't see how they get financing done at these levels. Their strategic partner valuing them around 100 million is their only hope. I don't see how they can do that with zero construction done in over a year and their massive debt. They won't be able to process gas till 2026. What are they waiting for? Like what happens first. They need stock price much much high for financing to occur. I just don't understand how this happens. This is gut wrenching.

[synaphai]

The question is what valuation will the company providing the strategic financing give Susglobal.

There are so many variables that's it's difficult to calculate but I found a case study of a landfill RNG facility, located at the landfill, and using that study adjusting for the numbers in Susglobal's offtake press release would give a NPV of $119 million for Susglobal. That was at a higher carbon credit price, but I'm not sure what percentage credits add to that NPV. A 15% discount for lower credit price would give a NPV of $100 million for Susglobal. Obviously debt will factor in as well, as my last post detailed and the $100 million valuation is just for RNG with no potential revenue from fertilizer added.

I'm not sure if that's for raw methane or if it's scrubbed, as methane from digesters has to be scrubbed before it can be injected into pipelines. A farm that Enbridge partnered with on a RNG project (but didn't finance) contracted a third company to run the scrubbers as they didn't have the expertise and it's unclear whether a portion will come out of the $20/mmbtu in the offtake for scrubbing. The farm expects a payback of less than 10 years (that's vague) according to a news report for their RNG facility that will produce 15% of what Susglobal has planned, maybe 6 years is reasonable but it could be sooner for a larger facility.

So maybe the company providing the financing will value the company at $70-100 million with the offtake in place. A financing at that valuation would obviously be a big boon for the share price but nothing is guaranteed and at this point the company's future definitely seems to depend on it. No financing and the company may not be able to continue operations so there is definitely a lot of risk to go with upside of maybe 2-3x after dilution in the relatively near term if things go well.

My caveat is that I'm just a guy on the internet using somebody else's model for a somewhat similar project so I could be off by a good bit. It all depends on what kind of cash flows the financing company eventually sees Susglobal generating.

Case study page 4

https://theicct.org/wp-content/uploads/2023/05/case-studies-california-rng-outlook-2030-may23.pdf

[synaphai]

Enbridge invested $80 million in more mature RNG company, Divert, that has an offtake agreement not too much larger than Susglobal's but that investment only got them 10% of the company. They would need to buy a much larger percentage of Susglobal to cover current debt and provide working capital. They could do a joint venture but that would still leave Susglobal with all of the current debt. A JV plus an equity financing may be an option but that would really diminish current investors' percentage of the venture.

The debt as it currently stands:

There is $6.5 million in mortgage payments due by March 1, including $1.48 million for Hamilton that is 3 months late today, the 10Q says they are working on an extension with the lender, and another $3.84 due in two weeks on another mortgage for assets that partially secured the mortgage that's 3 months late. Plus the 10Q once again mentions a $6.75 million "commitment" to an architectural firm to complete Hamilton. I'm sure some portion of that has been paid, but probably not too much, and it's unclear how binding that commitment is but Marc keeps including descriptions of what is obviously the work of that architectural firm in press releases so paying them still seems to be the plan. Then there are the convertible notes, which have ballooned to $9.75 million with added interest and a weak Canadian dollar. And another $1.58 million mortgage was obviously taken on recently for the property adjoining Hamilton.

No matter what it, looks to me like the amount of shares authorized will likely need to be raised from the current 150 million as there are only 25 million left.

I don't think the situation is necessarily insurmountable and Bruce specifically mentioning a strategic financing in the recent press release gives me hope but it does seem to be do or die time for the company for real this time and the current share price seems to reflect that.

[Horsin around]

I just commented on this and would love to hear your thoughts. They clearly can't do equity financing at these levels. 4 million wouldn't last very long or even pay off debt. How in the world do they get the stock price up to get financing at levels they need to get going?

[Horsin around]

Financing? How? Were at .15 cents. For the remaining 25 million AS they would only get around 4 million dollars. Unless you're talking RS which would be an absolute disaster and looking at new lows. Stock needs to get around a dollar or 2 to get any real helpful financing and I have no clue how they plan to achieve that.

[Horsin around]

Is .15 going to hold again? This is gut wrenching. This company has been all talk and no action. I'm starting to think this is more of a 2026 investment and that we've been misled by the company. Has anyone heard anything about construction. It's almost 2024 and zero construction updates. Wtf.

[Stock Sumo]

Yes if and when the equity financing comes to fruition that will be a complete game changer!

[stoneroad]

Nice news. Now we need financing news!