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I just have a small position with 5,000 shares but the settlement with Guangdong, with the similar TCL, Samsung and ZTE suits still pending, plus Taasera, the investment and potential investment by QF3 and the fact that at my cost basis of 44 cents the fully diluted market cap is around $4 million.
Plus the stock has shot up in the past on news and with the low liquidity it should happen again on any significant news and could be very interesting if royalties are involved in a settlement, although the cut of any settlement that Quest could get is uncertain so it's a gamble.
I tried an all or none order and it wasn't quoted on level 2 so from my experience it's not a workaround to the FINRA minimum rules.
What's really frustrating is putting in a 2500 share order but only getting it partially filled then your remaining order becomes invisible because it's now for less than 2500 shares.
How many shares are you trying to buy?
Under FINRA rules for OTC stocks trading between 20 and 51 cents, a bid won't be quoted unless it's for at least 2500 shares. That means if you put a bid in for 1000 shares at 25 cents it won't show up on level 2 so nobody will know it's there to be filled. You can always get a bid filled at the ask price, which is currently 60 cents, but for anything less your order will be invisible unless it's for at least 2500 shares.
Here are the FINRA minimum quote rules:
https://www.finra.org/rules-guidance/rulebooks/finra-rules/6433
It's definitely a legitimate concern. It's been over a year since the S-1 was filed and zero funds have been raised other than convertible notes to keep the company limping along. At the same time shares outstanding has risen without generating any capital needed for expansion. That is poor performance by the CEO.
But things do seem to have changed with Bruce onboard. His Smallcapvoice interview (I missed the webinar) and the 10Q jibes with what Flash has been hinting about as far as land expansion at both Belleville and Hamilton. The waste transfer station at Belleville doesn't seem like it would need capital to get going but we don't know how much revenue that would be expected to create and how long it would take to start revenue flowing.
A biogas facility on a land purchase at Hamilton would obviously need mucho dinero to complete on top of finishing the Hamilton building so the question is whether Bruce's makeover of the company can facilitate that or not. Flash seems to think so and that funding will not be tied to an uplist. Susglobal is still essentially a tiny pre-revenue company like many, many others with a lot of question needing to be answered but it does seem like things have improved from before Bruce joined, when there was seemingly no realistic path forward.
That suit was settled in June of last year and those shares were cancelled. We know that from a 10K (Item 3):
https://materials.proxyvote.com/Approved/02451V/20220916/10K_517798.PDF
That would be a huge change because in the past per the S-1 funding depended on an uplist. No uplist, no money.
I don't think we can assume that ZTE will settle just because Guangdong did but who knows. I wonder what made Guangdong settle. There is the possibility that Quest accepted a small enough amount to make it worth not spending money on a trial.
When I first read the Guangdong Markman document I thought it seemed like a win for Quest but ChatGPT analyzed it as being neutral in the way it constrained the parties' language if it had gone to court.
It's a highly, highly illiquid and low market cap stock. The price fluctuations don't really mean anything. Either there will be significant settlement money to Quest after the lenders get their cut and the price will rocket up or it will languish under a dollar for who knows how long.
Stone, or anybody else, did Marc say yesterday that funding is still dependent on an uplist?
The resources could be there but they are extrapolating to 60m from what they've found on the surface.
Plus a commercial biogas digester is at least $500k.
Bruce has definitely brought a more realistic mentality to the company. It's good to see Marc's overly ambitious dreams of things like projects in Florida being replaced by plans to maximize what they have already. Monetize your existing assets and expand on those. That's the much smarter move.
Now they just need to get the funding nailed down.
I've just started researching the company and the lithium find obviously looks amazing but there are definitely some questions. We'll see what the financials show. I'm looking forward to seeing how much cash is on hand and to trying to get an idea of what dilution could look like. I also have questions about Craig. When he was CEO of Oroplata (now American Battery Metals), he was dismissed effective immediately, which is never good, and there was an allegation about fraudulently issued shares. The litigation with him was eventually settled with those shares cancelled but I'm not sure what exactly that means.
Anyway, the estimates for lithium resources are very rough and based on an extrapolation to depth so there's a lot that's yet to be known about the company's potential.
Maybe the news is a tipping contract for the waste transfer station addition to Belleville.
I missed the webinar but their Linkedin page says that the plan was to record it so hopefully it'll appear on their Youtube channel.
Any possibility the settlements include a royalty or would you expect just a lump sum? I'm just getting up to speed on the company and have no idea what the potential is. Also trying to unpack the obligations to lenders upon the receipt of money from the suits.
The ZTE, TCL and Samsung cases are still progressing through the Texas court and are based on the same patents as the Guangdong case. We'll see what the Guangdong settlement is and how much Quest winds up getting from that though.
So it seems like you're saying that Veolia will be using the waste transfer station. I'm guessing for shipments of hazardous waste and that's why the 10Q states that the new "waste transfer station will be alongside the Organic and Non-Hazardous Waste Processing and Composting Facility".
Do I get a gold star or am I still missing something?
The news is the Belleville waste transfer station? Is that correct? So that's the land Bruce spoke of preparing and is where his contacts in waste management will pay dividends.
After more research I could be wrong about an empty lot on the other side of the highway being part of the ECA's. The highway was built after the ECA's were granted so the address probably changed to Nash Road North when Brampton St was bisected by the highway. So strike my speculation about Bruce's land comment. We'll have to wait and see what he meant and what Flash has been hinting about,
Is it GFL?
Something that stood out to me in the interview was Bruce saying that they are "going through the steps to assemble some land". Not sure if that means land around Belleville or Hamilton but the ECA for Hamilton includes land west of the Nash Road building across the highway. The address on the ECA's is 2380 Brampton Street.
In the last segment of the interview, Bruce specifically talked about the power of the ECA's as a shield against local community members that may push back against having a waste handling facility in their neighborhood. There has already been pushback against the Hamilton project by a local environmentalist. The facility was used to make fertilizer from sewage sludge back in the 1990s when neighbors called it the "warm barf building" and she fought against it back then so she is skeptical that a new project can keep the odors controlled.
If the plan is to process waste at the empty lot across the freeway from the building then that could face stiffer opposition than just bringing waste into the building because it's obviously in the open air and is also closer to homes. Speculation on my part that the plan is to use the empty lot near the Hamilton building but that seems to make sense with the interview.
https://www.thespec.com/news/hamilton-region/2021/08/23/hamilton-fertilizer-plant.html
The stock wants to go. Marc just has to give it some gas.
Raising money is not that simple for struggling OTC companies. When it is raised it's almost always a million here or two million there, often the form of convertible notes as Marc did last year when he issued $5.2 million total in multiple notes.
When notes are involved it tells you what little leverage the company has because notes are the riskiest form of financing. They pay out interest monthly and are usually converted into shares at a discount, allowing noteholders to start selling for a profit, which puts downward pressure on share price. Noteholders can also short the stock at the same time to double dip (maybe that's illegal but I'm sure they do it). That's why the uplisting is so important, it can provide leverage to bring in higher quality capital.
Marc knows all of this. His last company, Silver Dragon Resources, collapsed at least to some degree under the weight of convertible debt and the king of OTC toxic convertible lending himself, John Fife, wound up taking over the company. Fife isn't involved with Susglobal but in the last year Marc has defaulted multiple times on notes sold to other lenders and he's had to renegotiate the deals, giving better and better terms to the defaulted noteholders to keep them at bay and keep the company upright. It can become a vicious cycle.
Marc can still find a way through this but it's not an easy problem to solve.
The news yesterday was that maybe $9,000 in revenue has been generated with another $19,000 potentially in the pipeline. (there is no standard market price for credits but the general price has plummeted this year and I'd expect credits to go for $2 or less right now).
Marc bought Hamilton because he thought he had the financing nailed down with the uplisting scheme, he'd talked bout the uplisting as far back as late 2020, but obviously that hasn't gone well so far.
Thanks.
Flash can you tell us if the news pertains to an updated financing plan or is it something else. Do you expect Marc to announce that he's got the funding to complete Hamilton secured?
It took a month for the amended S-1 to be filed after the 10K a year ago so if there is a new financing plan it may take a while for it to be nailed down and PR'ed/filed with the SEC.
I'm skeptical too and would be pissed off at the lack of progress if I had a significant position in the stock but if you plan to stay in all you can do is wait and see.
If there is some new catalyst beyond a financing plan like Flash may be implying, it needs to be on a level of excitement far beyond the Ernie Els announcement to really juice the share price. I agree that the tweet by the architectural firm was intriguing, or at least interesting that they are still on the job after a couple of years, but Marc will need the money to pay them.
The positive is that with the new Board member and with HC Wainwright as an underwriter Marc has a good team behind him but the increased debt has probably complicated the uplisting process.
The sticking point has been the $14-16 million raise being tied to an uplisting.
It's not lost cause, there are conceivable ways to finance Hamilton but the question of whether an uplist is realistic has obviously loomed large. It's pretty simple, either the market cap needs to stay over $70 million with the stock price above $4.12 for 30 days after the Nasdaq application is filed or the shareholders equity needs be at least positive $4 million with a share price above $4.12 for 5 days after the application is filed.
The problem with the shareholders equity is that it's currently more than negative $9 million, so the company would need to raise at least $13 million after fees to reach the positive $4 million goal.
I've felt like Marc should start smaller but money doesn't grow on trees and he has to buy digesters and bottling equipment and odor-proof Hamilton plus new hires will have to be made to staff Hamilton, although that shouldn't cost much. Operating costs have been pretty consistent at around $600k a month so maybe bump that up a few hundred thousand once Hamilton is operational.
It is doable although I think Marc got overconfident seeing the share price jump up the last two years without realizing that those were very unusual scenarios: first the OTC stock boom early in 2021 then the fertilizer shortage mania last year. Those events aren't necessarily repeatable. In hindsight he should have just done the 1:10 reverse split last summer and gone for the uplist although the price may have not stayed above the $4.12 target long enough to complete the uplisting process.
Let's see what he's got up his sleeve now. I do believe Flash that something is coming. Whether it will finally materialize the financing...we shall see.
Flash said the news was waiting for the quiet period to end with the 10K filing so now that the 10K has been filed the exciting news could be on the way.
You're not gonna find anything good in it, no surprise.
Marc paid the PACE debt off with cash from a second mortgage on the Belleville facility. No explanation about why the debt was settled so cheaply. Convertible debt crept up another million to $7.6 million (after subtracting conversions since the end of the year) due to all of the sweeteners needed to convince noteholders to extend the terms of past due notes.
Marc is making $29k a month and in January he was issued another 3 million shares so it's past time for him to show he's worth that kind of money.
Let's see if Flash is a soothsayer, not that I'm doubting, but I'm on the edge of my seat waiting for the exciting news.
Is it a quiet period issue where Marc has something in the works he can't extoll the virtues of until financials are released?
Yes I'm very curious as well.
Reading through old posts, Flashbulb's association with Marc through business dealings goes back a ways to the Silver Dragon days.
First Flash gave us a teaser of good news in 2 weeks (the loan discharge?) and now it's the 17th. The delayed 10K was filed on the 14th last year so perhaps we can expect the same next Friday with the amended S-1 filed on the Monday after, the 17th. Maybe Marc's got a new angle on the offering he's worked up with HC Wainwright that will get the deal done this time. I'm looking forward to hopefully something exciting.
The market in general has been garbage today and Susglobal is pretty obscure as it is but I think the question with the loan is whether it's good because they are getting out from under the debt or not so good because they presumably were so far behind in their payments that the bank threw in the towel and took pennies on the dollar.
Without more info it's tough to see it as a definitive sign of good things to come. It may be, but there does seem to me to be ambiguity around it.
What are your thoughts about the loan discharge, stone?
I'd love to know more. If loans can be discharged for 25 cents on the dollar, sign me up for one, lol.
As of the last quarterly, Susglobal was behind by more than 6 months in all of its debt obligations to PACE/Alterna so maybe the bank said we'll take what we can get and Marc came up with $917k. Getting rid of that 10.5% interest is really good news but settling the loan at such a huge discount could be another indication of the company's rough financial state. Maybe we'll get more info from Marc or something in the subsequent events section of the 10K.
Wiping out a good sized portion of debt will lessen the shareholders' equity deficit, which could be important when attempting to qualify for an uplisting because the uplisting standards for a company with a market cap below $75 million require positive equity. $5 million in positive shareholders' equity should do it at the current cap and that could likely be accomplished with an associated offering netting $14+ million after fees, provided there will be a reverse split of 1:25 or larger.
It's no surprise. They did the same last year and it took an extra 2 weeks to get the 10K filed. The only impact it has is on the timeline in getting an amended S-1 filed, which is crucial to any attempt to move forward with the offering. Marc has said the S-1 would follow the 10K so that will have to wait and at the current price/cap the company isn't eligible for uplisting yet anyway.
Short interview with Marc uploaded a few days ago to Susglobal's Youtube channel. No new info but Marc sounds confident and very bullish about what Bruce Rintoul will be able to add as a new board member.
The plan is to do a 1:5 reverse split to hit Marc's $4.12 target price for uplisting to Nasdaq. Obviously a price higher than that would be better to add wiggle room in case it the price fell before Nasdaq could approve the uplisting (and the price may need to stay above $4 for 90 days first to qualify for an uplist). So at least $1 before the split would be best
Marc had a 1:10 split offered by an underwriter last year but he rejected it. I think it doing it, completing the offering and moving on would have likely been a good idea in hindsight. Take the financing when it's there and get on with making fertilizer but I guess he didn't want to tighten the share structure to around 15 million shares.
Now he would need a 1:25 to get to $5, which would drop the outstanding share count to 4.7 million.
We'll see if he's got something up his sleeve to put an upward jolt in the share price. It can happen, it did last year, but last year was unusual as the fear about fertilizer shortages after the invasion of Ukraine pumped fertilizer stocks. He needs to produce some really exciting news to move the share price in these lousy market conditions.
Marc needs funds to complete the Hamilton facility. This includes:
Whatever upgrades the building needs to house the company. The plan was for it to be Susglobal's offices.
Odor mitigation components installed. Neighbors complained when the building was used to produce fertilizer pellets from sewage sludge in the 1990s. Organic waste may not smell quite as much as sewage sludge but it's in a very urban setting so the smell of the waste will have to be contained, something Marc is confident can be done but that takes money.
Buying the 10 digesters, bottling equipment and whatever else is needed to turn waste into liquid fertilizer.
He has also spoken about having a testing lab on site but maybe that's for further down the road.
The cost was budgeted to be $6.6 million in November 2021 when the project was started. We know construction was suspended as of the last 10q for the period ending Sept 30. Marc got a good deal on the $1.46 million Hamilton mortgage at 2% (plus SNRG shares) but it's a take-back mortgage which comes due in August, so he'll need to have the money by then to own the building outright or it could revert to the owner he's buying it from, or obviously he could refinance at a higher rate.
And to raise the funds to do this he needs the S-1 offering first filed a year ago to execute, which requires an uplisting, which requires a share price of at least 83 cents and a 1:5 reverse split. I had hoped that the plan could be modified to find away around needing an uplisting but as of Marc's recent interview, the plan is the same: File an amended S-1 after the annual report is filed at the end of this month when hopefully the share price is high enough, complete the offering and resume construction on Hamilton. We've been in a holding pattern for a year now waiting for the offering to raise the necessary funds.
I was hoping that the new board member would be able to provide financing ideas that don't depend on an uplist but the plan is unchanged per the interview posted yesterday. Maybe Bruce will be able to provide input on the situation once he becomes more well-versed with the company, if the need is still there. Obviously these market conditions are brutal for share price appreciation in any stock but things can change. Last year was an anomaly with the looming fertilizer crisis and boom in those stocks though.
The end of March is coming soon. That's when the 10k will be filed with the expectation of the amended S-1 to follow, so something needs to happen. I can't remember a company being stuck in limbo for so long with so many things depending on each other, just waiting for the first domino to start falling, or rising in this case. One thing I'm sure of is that Marc is working tirelessly on trying to make it happen.
The stock seems like it wants to move but is sorely in need of a catalyst.
That's the price Marc has said he's targeting to meet all the requirements. It's a chicken and egg problem, he needs the capital to fulfill the shareholders' equity requirement, although given the most recent quarterly filing he'll be cutting it close with the proposed raise amount, but he can't get the capital without the uplisting presumably being imminent. He could do reverse split larger than 1 for 5 but that would need another shareholders' vote and he said he rejected a 1 for 10 when it was proposed by the previous underwriter last year.
The price needs to be above $4.12 to uplist so a $480 million market cap would be a lot to ask before fertilizer production starts at scale. But a $1+ price would really help to keep the stock above the required level post-split because uplisting won't happen immediately and the current momentum is a great start.