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Not unless he changed his name to Travon.
That's the plan though. Financing depends on an uplisting.
That plan has been pretty much carved in stone for over a year now. Plans can be thrown aside of course, but Marc has not wavered when it comes to the uplisting being the key to the company's future. The goal now is to make it happen after the 10K is filed at the end of March.
He's upgraded to working with a more competent investment bank so maybe that greases the wheel and gets things going. We'll see.
Today's presentation
Here's a link to download or watch.
https://gofile.io/d/dcx1Di
My comments are in parentheses.
The plan is still to file the updated S-1 after the 10K at the end of March through new underwriter HC Wainwright. Need to raise $15 million. $7 million to finish Hamilton and $7.5 million for the acquisition of a Florida company (is this a new plan?). No more convertible notes.
The goal is for Hamilton to be producing Q1 of 2024 and to produce 50,000 liters a day of liquid fertilizer (that's a lot of bottles). Would mean taking in 50 tons a day to Hamilton (about 2.5 garbage trucks worth), so around 12,000 tons in the first year (which is a lot of waste to process in an urban setting so odor mitigation will be important).
Also still hopes to get an increase on the grade of compost to AA that could be sold in 10 kilo bags to big box stores, which would 10x the wholesale price. The projection is for fertilizer to be 70% of revenue and compost and carbon credits to make up the rest.
If he's broke it's because he handled his own finances like he handled the company's.
I don't see him as a devious mastermind stealing money from investors but instead a guy always desperate for cash in his personal life with a chip on his shoulder about it, delusionally rationalizing why he deserved to dip into the till. Thus the recitation of accomplishments at the beginning of every call reminding us that nobody could ever do what he did.
It's on their channel.
It's definitely deja vu all over again.
According to the most recent Youtube interview, the plan is to repeat what was done last year and file an updated S-1 with the annual financials in April or May, this time with a new underwriter. It also sounds like the offering still depends on getting uplisted to the Nasdaq, so a share price of at least 83 cents will be necessary unless Marc wants to do a reverse split larger than the 1 for 5 he got approved last year. If he does want a larger split it would need another shareholder vote.
We're back to pink limited so the stock is tradeable again.
Whether we go to pink current is yet to be seen but that may be pending an annual audit, which is planned.
I don't have insider access, anybody can call him. Just be nice if you do, he's a good guy and berating people never helps. Yes, it's long past time to execute and we all know the history of plans and more plans. Whether this time is different, time will tell.
I definitely don't doubt his conviction towards making Biomass a success and he's working hard everyday but it obviously takes a lot more than conviction to make a project of this scope a success.
There will be massive upside if all comes together but it is an extremely high risk investment in essentially one guy at this point, although WRI is a great partner to have..
Looking at the limited trade data available on OTC Markets site, it's just a steady stream of sells.
The shares outstanding has increased by 9 million since March. I know at one point Marc issued 3 million shares to a consultant, so those could be making their way onto the market. Plus there are notes being converted but those may need a registration statement to be sold. I don't fully understand those rules though so it could be the conversions being sold little by little.without needing an effective S-1 or S-3. How long the selling continues, who knows, but it seems to me to be the price of doing business as time passes without the S-1 offering being finalized. The stock is definitely looking for a catalyst.
And TradeForProfits, it looks to me like those shares were payments to Marc from Susglobal.
I've talked to Jim and he's been working on getting the OTC listing back to Pink Current.
Biomass are obviously current in their filings through SEDAR but separate paperwork has to be filed with the OTC Markets to let them know that financials are up to date in Canada. So they are finishing up the paperwork, there was a formatting issue that caused a little delay, and hopefully the stock should be upgraded to Pink Current next week.
duplicate post
I don't believe SEC requires them to name the investors, they just need to provide the terms of the offering.
It was actually 3 investors who ponied up the $460k for 3 million shares so maybe Ernie brought along family or friends to buy in, although he could have taken stock as compensation I guess.
Definitely means more when somebody signs up to promote the brand and buys into the company after trying the product.
10Q
Good news is that Marc got the due date for the $3.7 million mortgage moved from Sept of this year to Dec of 2023 but he's still paying 10% annual interest due monthly.
The $3.4 million due on the PACE loans is still overdue as of Sept and he's still trying to re-finance and otherwise handle that debt.
He issued 3 million shares at 15 cents in Oct to raise $460k, which was used to get the letter of credit the Ontario environment ministry requires, so that didn't go for general business purposes.
$132k in carbon credit dough for Belleville for 2017 and 2018 so if that pricing holds for 2019-22 he's got another $528k coming.
Those are the main updates I see from the last quarterly. He still needs money, and a lot of it, to cover liabilities plus the $13 million S-1 offering, which is mentioned a few times in the 10Q. It states that the company still expects the offering to be successful.
The fertilizer production process was developed with Fleming College in Ontario, so to my knowledge it doesn't depend on acquisitions. I haven't seen anything suggesting that Susglobal holds patents on the tech though.
There was an agreement with a company called Kentech to get the fertilizer process up and running but it may have expired in May, although with Kentech being an energy services company Marc could probably easily hire them again if that's the plan.
Thanks horsin. So it was no big deal.
We've discussed this. The reason for that default on the investor's notes was a DTC chill that prevented the notes from being converted. Why there was a chill and whether it's been lifted or not is unknown (not all chills are made public). It could be for something as mundane as an issue with the transfer agent or it could be a bigger issue. The notes can be converted when the chill is lifted.
As for the PACE debt being re-financed, we probably won't find out about that until the next quarterly filing in the middle of November.
It's no secret that the company has been very cash poor but Marc brought in probably around $700k in cash from carbon credits and he's a creative guy who is surely working his ass off on resolving financing issues every day.
It's up to investors to decide how much trust they put in him to bring all the pieces together. This is a very high risk investment and a whole lot of OTC companies are currently struggling to raise necessary cash with share prices in the dumps.
Up to a 1:5 reverse split was authorized so the share price would only need to be above 83 cents to get to the $4.12 price Marc has said he needs. That seems like a lot now but we were saying the same thing the last time the price was in the .20's.
New short interview with Marc.
https://www.smallcapvoice.com/october-interview-susglobal-snrg/
Mainly about carbon credits but also talks about working diligently on filing the next amended S-1.
Sorry if I gave everyone the wrong info initially but after re-reading the 8K I don't think there's anything important about November 15 with respect to the uplist. But obviously it needs to happen unless he can find money somewhere else.
The next 10Q should be filed the next day on the 16th though and that will tell the tale of what's going on with debt. Marc had $7.6 million in loans due this month for which he needed to refinance or extend the due dates:
Plus he needs to fund normal operations but the good news is that in Q2 they finished with the marketing campaign they began a year ago, which was the biggest operating expense so that will save money. A portion of it was marketing to investors to try to get the stock price up though. And of course there's something like $600k coming in from selling carbon credits.
Fertilizer prices have dropped some but they are still double what they were a couple of years ago so the fuse is still there ready to be lit if Marc can execute.
https://farmdocdaily.illinois.edu/2022/09/fertilizer-prices-rates-and-costs-for-2023.html
Re-reading the 8k I think it's actually more subtle. If the notes aren't fully paid by Nov 15, the maturity date is automatically extended to Jan 15 unless the noteholders send Marc notice that they are cancelling the automatic extension. The potential extension to Jan might just be to give Marc extra time to get the DTC chill lifted so the conversions can start and still allow for the orderly procession of conversions if it takes longer to get the chill lifted.
The part about the uplist just says that if Marc does have a definitive agreement with an investment bank for the uplist and the notes aren't in default, the note conversions will stop and the maturity dates of the notes will be extended until the date of the uplist.
So the note conversions will happen as planned once the chill is lifted but if there is a definitive uplist agreement the noteholders can't do anything to harm the financing deal associated with the uplisting.
Upon further reflection, I don't think the 8k is telling us that Marc expects to have his uplisting ducks in a row before Nov 15 but just that these notes won't be a hindrance in case he does. Sorry if I relayed the wrong impression about that. He still might expect it to happen soon but I don't think the 8k is telling us that.
If there's one word to describe Susglobal it's contingent. Everything is always heavily contingent on something else.
The smart move would be to take some conversions ASAP at a low price because they'll be worth more if the share price appreciates. That'll provide much better returns than the extra 15% discount if an uplist happens.
If the noteholders are in the company long-term, they may limit the amount of shares they take to mitigate dilution but, if not, they'll probably want to take as many as possible and to have the option of selling as soon as the chill is lifted. That's why Marc added the covenant limiting the amount that can be converted and sold at a time.
The maturity date of the notes has been extended to Nov 15 and can be further extended to Jan 15 if there is a definitive agreement with an investment bank to facilitate the uplisting so Marc thinks Nasdaq is still a possibility before then.
8k filed Wednesday is interesting.
I'm no expert on this stuff but here's how I see it:
Susglobal had $3,871,000 in convertible notes, one from Oct and two from March, mature in the last couple of months. Per the terms of the notes, Marc's intent was to pay them when Nasdaq uplisting happened, either in shares or in cash. Obviously the hope was that the share price had appreciated greatly for the uplisting to have happened so a conversion to shares would mean issuing a minimum of shares to the noteholders.
But since Nasdaq hasn't happened the notes reached their maturity date and went into default. As a result, their amounts have been increased by 10% and the new maturity dates postponed until Nov or Jan if certain things happen.
The reason for default is because, according to an exhibit filed with the 8k, there is a DTC chill in effect, so no conversions can happen. The DTC is the clearinghouse that makes all of our trades happen. A chill is a restriction on the company's access to its securities and could be put in place for everything from an issue with a company's transfer agent to an investigation by a regulatory agency. I've searched on the DTCC website but can't find a chill notice to get more info.
The exhibit to the 8k says that "the Company will remove the DTC chill by no later than September 19, 2022 and will permit Target to begin to submit conversion requests thereafter in accordance with the variable conversion rates previously agreed" and that the notes further increase by 0.1% for each day the chill continues.
So bottom line, why is this important? Because these notes are growing and will start being converted once the chill is lifted (and what is the chill for?). The Oct note converts at 85% of the ten day average (not sure about March), which would be around 26 cents. So that would mean issuing 16.3 million new shares in total for the notes over time.
The good news is that the there is a restriction of $100,000 for each note for each of the two purchasers and their sells can't make up more than 10% of daily volume. The bad is that once these notes start being converted, they could provide constant downward pressure on the share price unless there is momentum to offset or if the noteholders decide to keep shares and stay invested in the company. I'm not sure though, if the company has to issue an S-3 and have it declared effective before the holders of the converted shares can sell them.
Defaulting on the notes could be bad also in that it sours these investors on ever putting more money into the company.
In the last Youtube interview Marc said that Belleville carbon credits from 2017 and 2018 have been sold for $250,000 and that he is expecting to sell the 2019-21 credits for $750,000, so that's something.
We'll see what shows up on the next 10Q and $1 million is still well short of what he needs but maybe some kind of financing can be cobbled together or the share price will get the pump it needs to get to the $4.12 post-split price target, although, depending on the Nasdaq uplisting standard used, it may have to hold that price for 90 days before it can even be considered for uplisting. Time for the reverse split to take effect would have to be figured in as well.
One thing is certain, things are still very complicated and up in the air a year after the closing of the Hamilton purchase. I have no doubt that Marc is working as hard and about as creatively as possible on the situation but money has to come from somewhere.
He has to find the money.
Everything currently hinges on the S-1 offering, which can't close as proposed without an uplisting. It wouldn't surprise me if some form of alternate financing is found and announced at any time but it needs to be significant, the S-1 offering is for $12 million, and the longer Marc takes, the more debt accumulates.
And it appears to me that one of the underwriters of the S-1 offering severed ties with Susglobal. There's a passage in the 10Q about "a settlement agreement and release for the services of a party for an underwritten offering", which provides a $250,000 payment to that ex-underwriter if Marc does an offering of $2 million or more.
Also, I may have gotten something wrong in my last post if anybody is interested. The recent increase in shares outstanding was probably from the 3 million shares issued as payment to a consultant, not from notes.
The shares outstanding increased by 3 million sometime in the last week or so to 105,737,799 so the selling pressure may be from notes that matured in late July, were converted and have had a portion sold.
10Q
Not fun reading. The company had $278 in cash as of June 30. There is $7.6 million in debt due in September. $3.6 million to PACE, for which they have changed payment schedules in the past and are currently 3 payments behind, and a $4 million Hamilton mortgage payment. They are currently trying to refinance the PACE debt and extend the mortgage payment, the mortgage is secured with the Belleville property. They also have to re-provide their assurance for $500k to the MECP (I think it's standard with ECA's) and are working on getting a new bank line of credit for it.
They also issued 3 million shares to a business consultant in July.
I'm not sure if this means anything new or not:
On July 13, 2022, the Company signed a settlement agreement and release for the services of a party for an underwritten offering dated March 23, 2022 and amended May 23, 2022. In exchange, the Company will make a payment in cash in the amount of $250,000, as a settlement payment within five business days of the closing date of the Company’s receipt of a cumulative aggregate of $2,000,000 or more of gross proceeds from the sale of any equity securities, equity-linked securities or debt securities completed after this date.
I agree that if Marc can deliver some significant news it could really light the fuse, especially with high fertilizer prices not expected to relent anytime soon.
That could be dampened if there are holders of note conversions who choose to sell into strength but if we get sustained volume upward that should clear out. There is an note maturing Aug 26th but it's only for $140k. I believe that's the only note outstanding other than the recent one for $2 million that matures Dec 23.
Marc's a creative guy and I have no doubt that he's working his ass off but, yeah, it's an ambitious, high risk plan so this is a risky investment.
It's not like he just threw a plan together though, it is well-thought out. Whether it's achievable or not obviously very much remains to be seen. Maybe he'll come up with an alternate form of financing that doesn't rely on an uplist but there's nothing to suggest that at the moment.
Almost everything in business takes longer than expected. But he can't close the deal on the acquisition as things currently stand until the offering is finalized, which requires Nasdaq uplisting, which requires at least a $1.03 bid price (maybe for 90 days if he can't get to at least $4 million in stockholders equity).
10Q postponed
Like with the Q1 postponement, we get an update on a decline in revenue YOY plus the acknowledgement that 2 convertible notes were fulfilled, likely with shares. We know there haven't been any announcements of new contracts to accept waste but it also tells us that compost sales are still negligible. Maybe the increase in marketing fees will go towards changing that. There's so much possibility in front of Marc but he's still pretty much at the starting gate right now.
Marc's long interview from Jan is available again.
Hopefully Marc is working on an alternate financing plan that's not contingent on an uplist. Generating carbon credit revenue would obviously help but we probably won't see that until Q3 financials and I don't expect it to be anywhere close to the $12 million target in the S-1.
The wildcard is natural gas prices, which could skyrocket this winter if Europe loses its supply from Russia. China could further tighten fertilizer exports as well. If fertilizer prices become an issue again, that could ignite the stock once more.
This has always been a high risk strategy: giant building, renovations, uplisting, acquisitions, 10 digesters.... I can't believe it's already been a year since the purchase of the Hamilton property was closed.
Yeah, there was a $1.8 million note that matured on July 28. I don't think we've seen an increase in outstanding shares on the OTC Markets site but I could be wrong. It's currently at 102,737,799.
Fertilizer prices have been falling so that could be a factor also.
Thanks. I still think this is one of the most interesting investments I've ever seen. I'm back in a little bit after just buying 5k shares.
An obvious reason could be investors simply taking profits on notes that were converted in June. Some microcap lenders buy notes and convert as a business model. I believe $2.8 million in notes were due between June 2nd and June 16th and I can't find any info that any were retired early or settled in cash (please correct me if I'm wrong).
The $350,000 note from last Dec 2nd looks like it has a conversion price of 22 cents, which would be 1.6 million shares and it may take time to have shares converted and transferred to accounts, especially OTC shares, but I'm no expert on that.
There is another $1.7 million note from last Nov that's due July 28 if that is still outstanding.
Marc's done a great job so far. I was very skeptical that he could get the price up but he's proven me wrong (not the first to do that).
I haven't kept up with everything going on but, from reading the amended S-1, it looks like the offering can't happen until the reverse split is done, Nasdaq uplisting is achieved and the S-1 is declared effective by the SEC.
With the fertilizer shortage making the company more attractive, maybe Marc is working on alternate financing routes in the meantime. There was a $2 million convertible note that matured earlier this month. I'm guessing that got converted because OTC Markets has the outstanding shares at 101 million now.
A lot of people are looking to profit off the insane fertilizer prices. If Marc can show even the slightest promise of positive movement with the company, SNRG's price will jump up again. If he can actually show some concrete progress...the price could move into reverse split range and stay there, at least until fertilizer prices fall back down. And who knows, it could take years before prices come back to earth.
A few thoughts.
First, does the wording in the press release of a "national securities exchange" mean Nasdaq? I assume it does, and it seems likely, but it could theoretically mean a national Canadian exchange, likely the CSE which is much easier to get listed on.
Trading OTC means SNRG is not currently on any exchange and it's unclear to me from the way the S-1 is written whether the acquisitions depend on Nasdaq or not (and the S-1 will be updated so it could be changed). This acquisition is probably Nasdaq dependent but the curious wording of the PR made me wonder.
Also, reading the 8k, Marc issued notes that raised $1.5M for $2M worth of stock, the buyer got a 25% discount (quite the bargain). The notes will mature either when uplisting occurs or June 3, whichever is sooner, and the buyer will get their $2M worth of shares at another 30% discount to the share price when that happens. At the current price that would mean 10% dilution but hopefully the price will be much higher at that point.
And I learned a new definition from the 8k: "liquidity event" can mean an uplisting.
I haven't seen any asks under the bid price but I'll look for it going forward.
There are a couple of "big" trades posted today. Big in share amounts relative to volume but still only worth $9,450.
That plus a 65k share order showing now pumped up the bid price 11.7%, which is a lot and definitely does not make me think anything shady is going on. I've watched enough low volume OTC bid movement over the years to think that seems very reasonable.
Looking at the snapshots provided on the OTCmarkets site yesterday and today, I haven't seen any unusually large block sizes. What are you seeing horsin? Also, I thought dark pools by definition and intent wouldn't move the price much. Are you saying that there are big buys that are being done in dark pools to avoid moving the price up?
What obviously stands out about the level 2 quotes is the large spreads the market makers are giving but that's understandable with the low volume and the fact that SNRG is only averaging about $27,000 in trades a day.
Market makers are especially necessary to provide liquidity for a stock like SNRG because without them there might be nobody to buy from, and they can't make money without putting in widely separated bids and asks. I don't fully understand how they operate but I'm pretty sure about that.