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There is big box info on the investor's presentation from Sept
It says "Our Products are Sold Under 3rd Party Private Label at: Lowes, Home Depot, Metro, Rona and Garden Center".
And I'm pretty sure that was on the previous presentation from late spring although I can't find a cached version of it. So not sure if the big box partnership in the USA Today PR is new info or not.
Fertilizer prices are sky high and there doesn't appear to be any relief on the horizon due to high natural gas prices, China hoarding raw materials and weather problems in the US in the last year combining to dampen production and constrain supplies. Could have an effect on the stock price even if Marc can't start producing fast enough to capitalize.
If there's any way he could get Hamilton producing, maybe he should forego tipping fees and just take any waste that can be trucked. That may be a big ask with the company's cash position but now would be a good time to start making liquid fertilizer if at all possible because paying a premium for organic would not be an issue with the way chemical fertilizer prices have risen. The price of a ton of ammonia has increased 10 fold this year.
The SEC will have to declare the S-1 effective after Susglobal files it also. The SEC has to be satisfied that the S-1 provides all the info required and that the company didn't jump the gun and divulge info pertinent to the offering too early to hype the offering.
There is also the issue of authorized shares. It's unclear to me whether this may have been an issue with another company I was in so I'm not sure about it but the amount of authorized shares left could be an issue if there aren't enough left to cover the amount of the offering when outstanding obligations and cash in hand are figured in. If the price goes down to 19 cents, there wouldn't be enough shares to cover the cash and share amounts for initial amounts of the letter of intent purchase outright but Marc could still have some cash from the last offering and, with the deal seemingly being contingent on uplisting...I'm not sure how that figures in.
Anyway, there is a 30 day window for the SEC to provide its initial comments on the S-1 and there could be back and forth after the initial comments, whenever they are provided within the 30 day window.
And here is the NASDAQ info:
The 10Q has been filed and the topline results are not surprising. Revenue down to $204k due to loss of a tipping fee contract and compost production is losing a good bit of money relatively. Not pretty by any standard.
We all know that it's all about whether Marc can execute from here. With the great possible reward, I'd say the 10Q emphasizes the risk.
Edit: This is surprising:
Last Wednesday he said that the 10Q would be filed today and that the S-1 would be filed subsequently.
Sorry if I garbled that info last week, I wasn't having the best day healthwise.
The next 10Q should be out today so we'll see if that affects the share price. I'm expecting Q3 financials to look pretty much like Q1 and Q2, although it would be nice to see an increase in tipping fees and some revenue shown for compost.
Marc has said to expect fertilizer sales to be reported Q1 2022 so that might be the real catalyst.
Reading Marc's comments to me again, he says that part of the $12 million underwritten by Spartan will be used to purchase the assets of the 2 companies that will be used to get Hamilton producing fertilizer and as an answer to my question about whether there will be more financing, he says "only the US$12 Million underwriting with Spartan Capital on up-listing to the Nasdaq".
So it sounds to me like only a portion of the underwritten amount will be used now for some or all of the $2.4 million payment due on closing the deal for the assets (the rest of the $5.6 million cash payment will be due June 2022) and the rest of the underwritten $12 million will wait for a higher share price.
So it doesn't look like we will see massive dilution now, just somewhat incremental financings to get to where the company needs to be to produce product in large volumes. Sorry if I confused anyone.
There are only a little over 55 million shares left so that means the offering price would have to be at least 22 cents to get to 12 million.
To me the bottom line hasn't changed. Marc is going all in on generating significant revenue sooner than later so it definitely seems like a high wire act with the associated high risk.
I'm familiar with micro pharmas doing this type of thing, betting it all on upcoming clinical trial results and this feels like that. If he executes in a timely manner, money won't be a problem but if revenue takes longer to develop, we could be asked to authorize more shares (this is happening right now with a small pharma I'm in because clinical trials are taking much longer than expected to be completed due to various contingencies).
I don't for one second think that Marc is not genuine about his motives and is using Susglobal just to enrich himself, he's got more to lose than anybody if it all crashes, but the reality is that this is still about as high of a risk/reward investment as I've ever seen, at least in the stock market.
There will still be an S-1
I asked Marc about the convertible notes in the 8K and he said they were just a bridge to the primary financing, for which Spartan has underwritten $12 million. And part of that will go to pay for the assets of the 2 companies which have processes that will be instrumental in getting Hamilton producing fertilizer. The S-1 should be filed before the next 10Q.
I'm pretty sure that part of the financing will go toward the purchasing of assets from 2 companies that will be used to get the Hamilton facility producing fertilizer.
I'm expecting some kind of creative financing because Marc's only got about $11 million worth of shares at 20 cents left from what's authorized and I don't think he wants to get close to that limit.
I listened to an interview from August 2019 where he was talking about uplisting happening later that year so it's been imminent for awhile. And almost everything in business takes longer than expected so no reason to expect anything different now.
It all still comes down to Marc acquiring high volume organic waste streams and selling fertilizer. If he gets that right, revenue will follow as will NASDAQ. My guess is even if everything goes according to plan, that will take at least another year or so because there are capitalization requirements for uplisting beyond just share price but we shall see.
Edit: This is the interview.
https://www.smallcapvoice.com/8-14-19-smallcapvoice-interview-susglobal-energy-corp-snrg/
horsin, mine is
generactor at proton mail dot com
The debt is unavoidable to put Marc's plan in place so it's understandable. What concerns me is landing contracts with larger municipalities to have their waste diverted to Susglobal and generate tipping fees, and then being able to sell the compost and fertilizer produced.
Last night it occurred to me that reducing tipping fees might entice more municipalities to divert waste to Belleville, and I'm sure Marc has thought of that, but I think he's counting on tipping fees to generate income until fertilizer sales ramp up. Tipping fees have been the bulk of revenue so far.
The new investors presentation mentions more strategic acquisitions, and he said that's something they are looking at, so there are definitely a lot of moving parts here.
Did you see the last email I sent you? I'll send you another this morning.
These things happen on their own schedule. I asked Marc a couple of questions unrelated to the financing today via email and after answering them, which I greatly appreciated, he re-iterated that the S-1 is coming.
I probably posted this before but this spring it took forever for a similar financing for another company I'm in to get their prospectus finished. And if the financing has to be approved by regulators there can be a back-and-forth that lengthens the timeline.
It's not there because you are searching by the court filing information.
"Case 8:21-cv-02533-PJM Document 27-1" is the identifier for the document filed yesterday in the lawsuit Cytodyn is pursuing against Amarex. It has nothing to do with the FDA and was just added to the document after it was filed in court.
Remember that this is a highly speculative investment so it comes with a lot of risk. If Marc executes on his plan this thing is going to the moon but the company keeps adding debt with little revenue so far.
I'm holding what I have now and won't add more until I see a big increase in revenue but that's just my plan.
Thanks a bunch for the info, Horsin.
Raising money without dilution has me intrigued although it could be convertible notes that may or may not end up being dilution in the long run (which would only matter if revenue does not materialize, then it could really matter depending on the size of the oustanding principal). And as we have discussed after the last small June note, Susglobal doesn't have leverage to get good terms on a note but we shall see what Marc comes up with.
I'm not a fan of discussing uplisting until a company is close to qualifying and SNRG is not close at this point. Share price is an obvious issue as are market cap and stockholder's equity depending on the standard they apply for. The share price will probably have to be a good bit higher to do the reverse split because at these levels it would leave the company with what would likely be untenably low liquidity for institutions to eventually buy in. And it's important to remember that an application doesn't mean acceptance and there are other things Nasdaq may look at.
Here are the listing requirements:
https://listingcenter.nasdaq.com/assets/initialguide.pdf
My preference would be for Marc to show undeniable growth first. If he can do that, institutions will beat a path to his door.
A month ago I asked Marc about it and he told me that assets from these two companies will be used to get Hamilton producing fertilizer. He didn't go into details beyond that but it will directly benefit the Hamilton build-out.
I believe you are correct about the letter of intent, horsin. And I think the S-1 is used by currently listed companies classified as emerging growth to register shares to be issued but I'm no expert on securities law.
Anyway, Marc said there is an S-1 coming, which probably means a prospectus will be filed also and sometimes the S-1's have to be amended, so we'll have to be patient and see. I know that putting these things together can be complicated, especially for a small company, so I guess it will happen when it happens.
Issuing a substantial portion of the 57M shares left in the authorized share count (150M authorized - 93M outstanding as of 6/30).
I just asked him about the financing and he said that they are still in a quiet period until the S-1/prospectus is filed this month. This seems like it's obviously going to be a substantial raise.
It's on their new Youtube channel
Could you give me a link for that interview? Thanks.
What do you mean, stone?
Marc owns 16.8 million shares so he has a huge stake in the future of the company. Plus he's not putting out press release after press release like a lot of OTC companies do just to pump the stock without significant news.
If you are worried about the financing taking so long, these things can take time. Another company I own, Peak Fintech, did a prospectus earlier this year and it took forever to get done. It was months late. The share price drifted down 35% while we were waiting but has tripled since then after the quiet period ended and they were able to release news. I'm not saying this will happen for SNRG but just that my first rule of business is that everything takes longer than expected.
I have no reason to doubt that Marc is committed to executing his plan, the question is whether he will be able attract huge volumes of organic waste from municipalities and then generate substantial revenue from compost or fertilizer sales. That's a big task but I believe he is all in on trying to accomplish it. Whether or not he will succeed very much remains to be seen.
I don't think it's a good idea to focus on share price fluctuations because getting the Hamilton facility producing fertilizer is going to take time and the share price could drop a good bit before then but it could go up also.
They may not only be raising $2.5 million. I don't have any inside knowledge on that but it is a possibility. I am no expert on the legal ins and outs of SEC regulations but I do know that if they are filing a prospectus to issue shares, it is more complicated than just doing a convertible note like they did in June. Plus I think a prospectus needs an S-3 first. I imagine that there could be a back-and-forth with regulators also if they are going this route.
So it could be done tomorrow or it could drag out.
No, he didn't give me a timeframe. In my experience these things happen when they happen and it's not unusual for financings to take long than expected, but who knows, it could be very imminent.
Another company I'm invested in, Peak Fintech, was months late earlier this year in filing their prospectus because there was a lot of back-and-forth with regulators. Not saying that's what will happen with Susglobal because I don't know how complex Sus's financing is in relation to Peak's but it's just an experience I had. The good news is that once Peak's prospectus was filed the share price did well because they were able to start releasing a backlog of news.
Honestly Evil the 13D and current management plans don't sound much different. Both plan to keep the Brazil trials going, keep the same employees, find combo partners for cancer, initiate a longhauler trial. Seems to me it comes down to personalities and whether you think a new Board could pick a better CEO. And, of course, any opinions on Dr Patterson (you know I think he's dreamy - I'm generactor).
And HGEN's CSO has been dumping shares this summer, the same guy who a year ago in a call said he expected "slippage" from lenzilumab's good results in their EIND program when it came to their controlled trials. I sold my shares after I heard him say that.
That's not exactly correct, misiu.
I happened to see the details recently when I was reading old 10K's (I know, the ways I spend my time, lol). From the 2018 10K:
Why did Ken announce on the same day that the Pro 140 purchase agreement became effective that he was stepping down from the board immediately and that he would be leaving his position as CEO a few months later? I'm very interested in what happened to cause him to leave.
I know he filed a suit against the company a few years later alleging unjust enrichment by Nader with respect to options granted and that suit was settled after he passed, so it seems like there could have been some enmity between the two.
The company is also paying 10% APR interest ($3,750 per month) on $405,000, not $300,000, to the note buyer until the principle on the note is paid so that has to be figured in as well.
The caveat is that I far from an expert on this stuff but here is what I believe is correct. Please let me know if I've gotten something wrong.
If the buyer is paid the final $105,000 in cash when the note comes due next June, their actual price paid will be $0.15 per share. $300,000 - $45,000 interest - $105,000 cash to retire the note for 1 million shares. If the remaining $105,000 is paid back earlier the interest would obviously be less and the price per share they paid would be higher.
There is a lockup period of 6 months so the note buyer can't sell shares before then and a registration statement (S-3?, the upcoming one?) has to be filed with and deemed effective by the SEC before any shares can be sold after the 6 months.
The 1 million shares are newly issued, so they come from the authorized shares.
The reason the share price could go down if more shares are issued is because we all own less of the company, but raising money can be seen as a good thing, and should be in this case. I always assume that a company will come close to it's authorized share amount just to be conservative in my valuations.
The important thing is that revenue needs to be generated on schedule because more debt is being added. Marc me told that he expects liquid fertilizer revenue to start showing up in Q1 next year, but obviously he couldn't give me any guarantees on how much revenue there will be. It's always important to remember that we are getting in early on what could be an investment of a lifetime but there is extremely high risk to go along with that.
A company in Susglobal's position doesn't have much leverage so I expect something like the convertible note they did in June but for a much larger amount. We'll see.
Marc just confirmed to me that they are filing a registration statement for new shares to be issued so no news until that is done. It was obvious that they were going to have to raise money at some point soon.
I really appreciate him being so available to answer questions although I hope at some point there will be so much shareholder activity that he won't be able to talk to any of us one on one anymore.
No problem, stone.
A few days ago Marc told me that they are currently in a quiet period. In my experience that may mean a funding round could be in the works so my guess is that we might not get any news until a prospectus is filed. This is just speculation by me so it may or may not be true but it's my best guess.
I agree. Although we still don't know the valuation of the companies and what % of their shares Susglobal is getting, if not all, to have an idea of what kind of a deal Marc got (which really won't matter if this deal leads to production that comes anywhere close to projections).
For me it's about confidence in their ability to execute and position size right now. I'm in for 30k shares, which is a substantial amount of money but small enough that if I lose it all, I can deal with that and the upside is a lottery ticket.
If I were 95% confident that Marc would hit his projections next year, I'd invest over $200k into the stock immediately, which would be a lot of money for me and equal my largest position as far as an initial investment. But right now I've only chosen to invest $8k.
I've probably done more due diligence on Susglobal than any stock I've ever researched and it's not that I don't think Marc can do it, I just don't know. The projections are so crazy that it reminds me of the saying attributed to Carl Sagan regarding claims that defy current scientific understanding, "extraordinary claims require extraordinary evidence". So I'm constantly evaluating the company for evidence.
Sorry if I'm always the more negative poster but I'm this way with all of my investments. So I do question why they need to spend the cash for a fancy facility in an industrial area next to the freeway. It's at 520 Nash Road North, the grey building with the tall section behind the yellow crane trucks, if anyone wants to check it out on street view. Especially when they have a lot of debt currently and are essentially pre-revenue, considering what they expect to make.
If they've got really deep pockets lined up, like stoneroad suggests, then go for it, but my plan would be just to get the building producing liquid fertilizer as-is, then show off the success down the road after the big profits start rolling in.