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No chatter on Stocktwits or twitter so the rise likely isn't just from day traders finding the stock. Maybe somebody knows something or was at least convinced by Marc into thinking they know something. I bought a little under 3 cents after seeing the last pump so am happy with the increase but we'll see if it sticks.
It's been the same story for the past 3 years: waiting for Marc to raise money. The problem is that debt has been piling up during the 3 years he's failed to raise money. That's why the share price has fallen to where it is.
More debt means more money needs to be raised just to get out of debt before he can start building facilities, and this has caused the value of the company to decrease. For the stock to really turn around he needs money to cover debt plus money to build.
The all-time high was $10.01.
It still needs to be accurate to not run afoul of the SEC. Probably just had to spend so much time on the 10K that the 10Q was put entirely on the backburner until the 10K was completed and it's not like Susglobal has manpower to spare.
Right but does that mean they settled out of court. Settling out of court saves both parties further legal fees and the party that filed the suit formally agrees before the court to never pursue the matter again. I'm not a lawyer but that's my guess as to what happened.
If so, why it happened in this case and not others where the settlement was included in court docs is a mystery to me but filings did show that the two parties were attempting to resolve the matter out of court. Only Jon can provide the answer because I doubt Sonicwall would say anything on the matter.
In a document filed in April regarding Sonicwall asking for an extension of their deadline to respond, Taasera's counsel states that, "Taasera and Sonicwall are actively discussing resolution of this matter". So I guess it was resolved. Your guess is as good as mind as to whether that involved a monetary settlement.
It means that Taasera has dropped its claim against Sonicwall for whatever reason and "with prejudice" means that it won't file the same claim again in the future.
Planet Microcap has uploaded a bunch of videos from the Vegas event but still no Jon. I tweeted at them asking when it would be available but got no reply.
It obviously depends on what somebody would pay for the land but for the most recent Hamilton lot purchased last Nov minus interest that's accrued since November: by my calculation the company probably currently has around $145k in equity. As for the Hamilton land with the building and Belleville, it makes my head hurt to try to figure it out with all the mortgaging but I doubt it's anything, plus Belleville is laden with environmental remediation costs. The Belleville compost covers and buildings are given a net book value of about $1.9 million combined.
It's obviously so frustrating to see the large RNG offtake that should be able to be used as leverage but Marc wouldn't be the first to fail in that respect. Look at Gevo stock, it was $15 bucks at one point and is now at 70 cents because their CEO has not been able to raise the capex to build the facilities to satisfy his billions in sustainable aviation fuel offtake.
It's not over for Marc but the mortgage refinanced in Dec has a $4.2 million payment due in less than two weeks on top of everything else.
I know that he was not factual when he claimed in a publicity video interview posted on the company's Youtube channel in early fall 2021 that waste was at that time being accepted by Belleville from Montreal. I checked with the relevant department in Montreal, who let me know that they were not sending waste to Belleville. I asked Marc about it via email and, if memory serves, he recanted that claim in a later video.
I believe that the statement made in the May 2021 investors presentation that Susglobal products were at that time being sold in 5 big box type stores in Canada was likely untrue. I checked with most of those stores at the time and could find no record of Suglobal products being sold either in the stores or online. Also, that investors presentation claims that revenue for 2021 would be $18 million. Should he have known at the time that it would be nearly impossible to even get remotely close to that target....(revenue for the year was $754k).
If anybody wants to see that presentation, it's here: https://smallpdf.com/file#s=e67d628f-bf80-4c70-b532-1c52d7a2baab
There is also the question of lawsuits the company was a party to not being mentioned in quarterly or annual filings. Beginning in August 2022, lawsuits were filed by subcontractors that worked on Hamilton likely for nonpayment of services. I can't see the filing history for these lawsuits so maybe there's some wiggle room with the status of those suits over time but nothing was mentioned about these types of suits until the 10K that was filed last week.
But as for any legal action against him, the company doesn't have any cash or much in the way of assets given all the mortgages so at this point you can't get blood out of a stone. Maybe he'll miraculously find the $20 million needed to fulfill current contractual obligations, the company has not gone under yet, but it'll take something amazing to happen against long odds. I'd still like to see him succeed but debt has piled up for way too long.
Yeah the company is being crushed by debt and the resultant lawsuits from non-payment of debt. With Marc not fighting the power company's suit earlier this year and the 10K saying that he has been "unable to retain counsel" in the recently filed $4.5 million suit by an uncompensated noteholder...any Canadian legal professionals out there available to work pro bono?
Plus Belleville has had two different environmental problems and is now shut down so that's going to require funds to remediate but it's not like Belleville was a cash cow anyway with a $2 million gross loss last year.
Marc did get mortgages extended but the bulk of them will come due again in the next 7 months.
The bottom line is that we knew he really needs money but he really, really needs money just to cover everything that's piled up, not including actually restarting Hamilton construction or even thinking about funds for RNG facilities.
I believe Marc has until end of day Thursday to file and preserve OTCQB status but it may be end of day Wednesday. It's 45 days from April 1st.
If he doesn't meet that deadline, the stock should drop to the pink sheets, which won't be the end of the world but trading pink along with being late with the 10K, which may bar him from filing an S-3 for 12 months, could make raising money more difficult, as if it hasn't been difficult enough already. If he can sell green bonds that would bypass any of these issues because that would not rely on selling shares but I have no idea about the chances of actually selling bonds.
From what I understand, if he misses the deadline this week he would still have another 135 days to file before trading would be essentially halted for the stock.
Maybe it is an issue with the auditor. If it's still M&K CPAS, they have 3 awful reviews on Google but those are from 7-8 years ago and they did work on the 10K last year that got filed by the extension deadline. Obviously there has been a lot of mortgage juggling going on as 3 big mortgage payments came due from August to March. I do know that the Hamilton mortgage due last August was refinanced late last year.
I'm pretty sure Marc's got 45 days to file the 10K and preserve OTCQB status but I'm not sure whether that 45 days is from the original April 1 deadline or from the extended deadline of April 16th, so he's likely still got time to get it taken care of before dropping to the pink sheets.
To try to answer your question:
In my experience the most common reasons to be this late on an annual filing where the company becomes noncompliant are shoddy work by the accounting company doing the audit, something sketchy found by the auditors that keeps them from signing off on the annual report or simply not having enough money to pay for the audit.
Susglobal used a big, reputable Canadian accounting firm until they resigned in late 2022, maybe because they had problems getting paid. That's what reading between the lines on the 8k announcing the resignation seemed to say to me.
So Marc moved to a Houston accounting firm that has some really bad Google reviews. Maybe this delay is due to the auditor not completing the job, although you'd think that would have been specified in the 10K extension filed a few weeks ago and they did complete last year's 10K.
Not having the money to pay for the audit is obviously the other possible problem. Yearly audits can cost hundreds of thousands of dollars that Marc may not have. It's unclear how much they paid last year but the yearly audit was included in the $900k they paid for accounting and tax services.
Being noncompliant with a 10K filing can cause problems, including potentially not allowing the company to file a prospectus until 12 months after they regain compliance, which could kill the chances of an uplisting if the company ever got that far. An uplisting seems a long ways away at this point but if it did get to that point, a late 10K could stymie it.
This is the fourth year in row Marc's needed an extension. He needed the full 15 extra days to file in 2021 and 2022 and 14 days last year so he's always cut it close. I guess missing the extended deadline is not surprising because when you push that limit too many times you're bound to go past it eventually. We'll see if it gets filed today.
It hasn't been filed yet. All filings are first posted on the official SEC page for the company so it will show up there before anywhere else and if it's not there, it hasn't been filed.
Susglobal SEC page:
https://www.sec.gov/edgar/browse/?CIK=1652539&owner=exclude
I thought Wainwright has been onboard for awhile and was running point on a past fundraising attempt but I could be wrong. I can't find any reference in filings so maybe it was something Marc discussed in an interview, or maybe I'm getting my companies mixed up.
Earnings probably would have if the settlements had included recurring payments. Without that, we probably need big money settlements that set the company up with cash for the future.
The Planet Microcap event at the end of the month Bob linked will be a start and good to see Jon finally making an effort at investor outreach.. PM usually uploads presentations to their Youtube so it should be available for anybody that wants to watch.
Not Bob but I think 68 cents per share is fantastic. The problem is that it was all generated by one-time windfalls, none of the settlements provided continuing licensing payments so Jon is starting from scratch again as far as revenue goes.
Can gets kicked down the road again with the traditional notification that the 10K will be late:
https://www.sec.gov/Archives/edgar/data/1652539/000106299324007587/formnt10k.htm
There's gotta be something new soon with the 10K upcoming. Susglobal's tweet last week sounded promising but it was focused on 2023. I've been thinking for months that the make or break moment for the company has to be revealed soon but time keeps rolling on.
It's due April 1st this year. Hopefully third time is a charm because this is the third year in a row where we're anticipating financing news after the 10K is filed. Deja vu all over again.
Thanks as always for the updates, Bob.
I've followed Susglobal for almost 3 years and to me this seems like the ultimate make or break moment for the company. We all know that Marc does not have the best track record raising money, that would be an understatement, but the question now is whether the substantial offtake agreement that has been signed since Bruce joined the company can be leveraged to get at least an initial tranche of financing closed. Bruce has done his job, can Marc finally do his.
You're not wrong in a sense but a simple calculation belies the difficulty of raising money in a high interest rate and cost of construction environment. I've mentioned ORGN before but that company is the poster child for how capital needs can fail offtake. They have/had more than $9 billion in offtake agreements but the stock is trading around $95 million because they can't meet capital needs for their initial large plant construction.
Marc needs $147 million to make the first RNG facility at Belleville, and presumably fertilizer production, happen. The plan has been to do that stepwise with $35 million in raises, $30 million from Green Bonds, and hopefully leverage that progress to raise the $117 needed for Belleville RNG, maybe through a strategic financing. As Horsin implied, the first tranche will grease the wheels to get the train rolling down the track.
If full funding does materialize, the stock is extremely cheap. But it's all about how you handicap the chances of the plan unfolding optimally, which is no different from most tiny, essentially pre-revenue companies.
The deadline for Oak Hill is today but finalizing agreements or signing deals could still take time and we all know that everything in business takes longer than expected. Give it a little more time. There's also the chance that Oak Hill's hitch could be extended but hopefully we'll get a PR if that happens.
The difference is that if Jon got an $80 million settlement he wouldn't press release it.
It's important to remember that this should just be the first step in a process. The plan as laid out in December was for a $5 million raise first, then $10 million and $15 million, then source the $232 million to build the RNG facilities. The key in the next few weeks will be to see how close Marc can get to the $5 million and what kind of debt restructuring can be done to add a little breathing room.
Oak Hill has until Valentine's Day to handle the first portion of the financing and to help get the company's finances in order in general so we'll if anything happens in the next couple of weeks.
Running an augur doesn't cost much. Probably doesn't determine much either.
We should know within a few weeks or so where the company is with the raise and if it's ready to take the next step with the plan.
Oak Hill's fundraising agreement expires on Valentine's day so we should get news at least around then on the proceeds generated or the raise being extended.
The difference is that the catalyst in the spring of 2022 was external with the invasion of Ukraine and resultant speculation on rising fertilizer prices that caused all stocks in the sector to pop.
This time the catalyst will likely need to be internal with a successful raise to kickstart the execution of the long-term plan.
It's up to Oak Hill to raise the money needed. They've got a couple of months and a strong financial incentive to make it happen so we shall see.
The cynic in me wonders if Jon created that website last year to bolster the doing business in Texas claim. It does prominently mention that "TaaSera has offices in Plano, Texas" on the main page. Looks like the actual Taasera company used to be located in California.
Which Taasera case's Markman claims construction are you referring to or is it for all the cases combined?
Bob, I really appreciate what you do here but maybe you should contact Jon and offer to help the company with investor relations. Jon simply posting the bare bones details on the Quest website and twitter doesn't exactly keep investors or potential investors informed.
Do you know if the $35 million is USD or CAD?
Marc talked about the financing being completed in tranches, and the slide showed potentially a $5 million first tranche, but there are $6.3 million USD in mortgages seemingly due by 3/1 (unless one or more has been extended) and $6.9 million USD in notes that need to be retired to clean up the balance sheet.
Also, do you happen to know how binding the $6.8 million commitment to the architectural firm is? Would be nice if Marc could find a cheaper option if he decides that's the more prudent path.
Something I didn't hear discussed, but I could have missed, was green bonds, loans or grants, although I don't know how applicable they would be to Susglobal's situation. I know in the US both federal and state governments offer access to grants and loans to companies in the sustainable economy.
Kevin's presentation confused me.
In the discussion yesterday it seemed to me from Kevin's comments that it would be an equity financing, and the slide shows it as an equity financing, but he said that it would be non-dilutive and would not require an increase in the authorized share cap (there are only around $4 million worth of authorized shares left at the current share price). Debt financing is the goal for the $232 million RNG capex needs but it's unclear to me the exact plan for the $35 million. The press release yesterday did mention both investors and lenders.
They can issue preferred shares outside of the authorized amount but I thought they said no preferreds yesterday. The problem with borrowing against real estate is that mortgages on Hamilton and possibly Belleville (principal was due 12/1) are now past due. I guess is comes down to how skilled Oak Hill is in raising money by 2/15.
I recorded the first 43 minutes of the call yesterday, which includes Kevin's discussion of financing, but it unfortunately cuts off right when Marc starts talking about where the $35 million will come from so hopefully Susglobal will post a recording of the entire call.
Thanks Bob, I appreciate the thoughtful reply. I'm definitely letting my position ride. It's a tiny portion of my portfolio but would provide a nice return even at a $15 million market cap.