SolarBank Corp(SUUN) - 2025 Q1 - Quarterly Report

Financial Performance - Revenue from EPC services grew to $11,954,389 in Q3 2024, up from$5,613,015 in Q3 2023, representing a 113% increase[6] - Gross profit for Q3 2024 was $4,551,365, a 94$2,346,695 in Q3 2023[6] - Net income for Q3 2024 was $241,092, a significant decrease from$2,038,968 in Q3 2023, primarily due to higher operating expenses and tax expenses[6] - Revenue from IPP production was $4,031,816 in Q3 2024, compared to$14,896 in Q3 2023, showing a substantial increase in energy production revenue[6] - Operating expenses increased to $3,635,240 in Q3 2024 from$1,776,392 in Q3 2023, reflecting higher costs in consulting fees, professional fees, and insurance[6] - Basic net income per share was $0.01 in Q3 2024, down from$0.08 in Q3 2023, indicating lower profitability on a per-share basis[6] - Net loss for the period ended June 30, 2024 was $841,892, compared to a net income of$2,034,619 for the same period in 2023[8] - Revenue from external customers for the three months ended September 30, 2024 was $16,005,321, with$6,619,182 from Canada and $9,386,139 from the United States[116] - Basic earnings per share for the three months ended September 30, 2024 was$0.01, compared to $0.08 for the same period in 2023[118] Assets and Liabilities - Total assets increased significantly to$180,996,924 in September 2024 from $39,225,861 in June 2024, reflecting substantial growth in property, plant, and equipment ($39,177,567) and goodwill ($37,586,213)[3] - Long-term debt increased to$50,737,450 in September 2024 from $4,379,169 in June 2024, indicating significant financing activities[3] - Shareholders' equity rose to$63,401,476 in September 2024 from $18,724,301 in June 2024, driven by increased share capital and retained earnings[3] - Total shareholders' equity increased to$16,363,368 as of June 30, 2024, up from $16,392,791 in 2023[8] - Long-term debt (non-current portion) increased significantly to$50,737,450 as of September 30, 2024, compared to $4,379,169 as of June 30, 2024[114] - Shareholders' equity increased to$63,401,476 as of September 30, 2024, compared to $18,724,301 as of June 30, 2024[114] Cash Flow and Liquidity - Cash position improved to$14,250,082 in September 2024, up from $5,270,405 in June 2024, reflecting strong liquidity management[3] - Cash generated from operating activities for the three months ended September 30, 2024 was$10,671,392, a significant increase from $1,250,877 in the same period of 2023[10] - Net cash generated from operating activities for the three months ended September 30, 2024 was$8,115,251, compared to $676,858 in 2023[10] - Cash, ending balance as of September 30, 2024 was$14,250,082, a substantial increase from $621,151 in 2023[10] Acquisitions and Investments - The company acquired Solar FlowThrough Funds for$28,640,812 in 2024[8] - The company invested $6,661,405 in development assets during the three months ended September 30, 2024[10] - The company holds three GICs in short-term investments totaling$870,000 with interest rates ranging from 4.7% to 5.2% as of September 30, 2024[30] - Through the acquisition of Solar Flow-Through Funds Ltd., the company obtained five additional GICs totaling $716,097 with interest rates ranging from 3.85$41.8 million, with SFF contributing revenue of $3,708,752 and a net loss of$721,743 for the period July 8, 2024 – September 30, 2024[72][74] - Preliminary fair value of net identified assets acquired in the SFF transaction was $21,377,669, with goodwill arising on acquisition of$37,147,456[76] Receivables and Payables - Accounts receivable increased to $1,101,743 as of September 30, 2024, compared to$966,150 as of June 30, 2024[31] - Other receivables decreased to $122,594 as of September 30, 2024, compared to$323,293 as of June 30, 2024[31] - GST/HST receivable was recorded at $2,749,952 as of September 30, 2024, compared to$0 as of June 30, 2024[31] - The credit loss allowance remained unchanged at $(174,226) as of September 30, 2024, compared to the same amount as of June 30, 2024[31] - Trade and other payables totaled$27,038,344 as of September 30, 2024, up from $4,690,261 at June 30, 2024, with accounts payable and accrued liabilities at$16,669,177[41] - Unearned revenue decreased to $1,106,915 as of September 30, 2024, from$4,600,491 at the beginning of the year, with $3,772,894 recognized as revenue during the period[44] Leases and Loans - The company's right-of-use assets and lease liabilities increased due to additional office space leased on December 1, 2023, raising monthly rent to$8,510[45] - The company acquired shares of OFIT GM Inc. and OFIT RT Inc. on November 1, 2023, with lease payments ranging from $502 to$2,456 monthly and $1,250 to$8,125 quarterly, using a discount rate of 5.74%[46] - On July 8, 2024, the company acquired all shares of Solar Flow-Through Funds Ltd. (SFF), which leases 70 properties with lease terms ending between May 2033 and December 2045, using a discount rate of 5.69%[47] - The right-of-use assets and lease liabilities as of September 30, 2024, totaled $8,303,824, with IPP facilities accounting for$7,989,937[49] - Lease liabilities as of September 30, 2024, amounted to $8,049,809, with IPP facilities contributing$7,841,293[50] - The company entered into a Construction Loan Agreement for the Geddes project on June 20, 2024, with a principal amount of up to USD $2,600,000[52] - The Geddes Construction Loan accrues interest at a variable rate of One Month CME Term SOFR plus 4$1,234,373 (USD $914,418) and accrued interest payable of$33,279 (USD $24,653)[54] - The Geddes project had a total value of$9,124,084 as of September 30, 2024, recorded as a Development Asset[55] - Long-term debt as of September 30, 2024, was $56,263,321, including$55,531,840 from loans assumed from OFIT GM, OFIT RT, and SFF acquisitions[59][60] - Interest recorded and paid for the three months ended September 30, 2024 was $636,235[66] - Estimated principal repayments for 2025 are$4,442,600, with total repayments amounting to $57,846,631[67] - The Company acquired 67$460,607 and an effective interest rate of 9%[68][69] Shareholder and Equity Information - The company's common shares commenced trading on the Nasdaq Global Market under the symbol "SUUN" on April 8, 2024[14] - Total equity as of June 30, 2024 was $18,724,301, including non-controlling interest of$2,360,933[8] - The Company had 30,821,707 common shares issued and outstanding as of September 30, 2024, compared to 26,857,200 in 2023[96] - On July 8, 2024, the Company issued 3,575,632 common shares as part of the acquisition of SFF[97] - On September 24, 2024, 55,000 broker warrants were exercised to purchase common shares at $0.75 per share[98] - The Company's stock options outstanding as of September 30, 2024, totaled 2,759,000, with a weighted average exercise price of$0.38 and a weighted average remaining contractual life of 3.11 years[100][102] - Compensation expense related to stock options for the three months ended September 30, 2024, was $110,667, compared to$381,398 in 2023[103] - The Company's restricted stock units (RSUs) outstanding as of September 30, 2024, totaled 265,000, with compensation expense of $2,580 for the three months ended September 30, 2024[103] - The Company's non-controlling interest (NCI) carrying amount as of September 30, 2024, was$(17,574,588), with net assets (liabilities) of $30,742,886[105] - Net loss comprehensive for the three months ended September 30, 2024 was$1,283,202, with $600,800 allocated to non-controlling interest (NCI)[106] Related Party Transactions - Trade and other payables due to directors and key management personnel increased to$1,312,331 as of September 30, 2024, compared to $124,125 as of June 30, 2024[108] - Due to related parties balance as of September 30, 2024 was$5,922,000, relating to the fair value of CVR[109] - Short-term employee benefits for key management personnel increased to $703,227 for the three months ended September 30, 2024, compared to$299,599 for the same period in 2023[111] Other Financial Information - The company's functional currency for Canadian subsidiaries is the Canadian dollar, while for US subsidiaries, it is the US dollar[25] - The company's unaudited condensed interim consolidated financial statements are presented in Canadian dollars[25] - The company's significant accounting policies and use of judgments and estimates are consistent with those described in the last annual financial statements[29] - The company's significant subsidiaries include Abundant Solar Power Inc. and Solar Alliance Energy DevCo LLC, both with 100% ownership as of September 30, 2024[22] - Prepaid expenses and deposits totaled $3,126,829 as of June 30, 2024, including$2,543,120 for construction in progress deposits and $341,825 for prepaid marketing expenses[32] - Property, plant, and equipment additions for the three months ended September 30, 2024, amounted to$36,484,581, primarily driven by IPP facilities additions of $36,405,337[34] - Unbilled revenue increased by$3,374,135 during the three months ended September 30, 2024, reaching $3,358,129 at the end of the period[37] - Inventory balance as of September 30, 2024, was$8,397,055, up from $6,530,650 at June 30, 2024, with additions of$2,173,040 in development costs[39] - Development assets increased by $17,200,453 during the three months ended September 30, 2024, including$16,321,698 for battery energy storage systems and $541,666 for EV charge point systems[40] - Intangible assets as of September 30, 2024, totaled$36,356,377, with additions of $34,246,377 related to the acquisition of SFF[57] - Fair value change loss of$882,174 was recorded in the statements of income and comprehensive income for the three months ended September 30, 2024[66] - The Company recognized $3,863 related to ITC distribution as other income and$8,388 in interest accretion for the three months ended September 30, 2024[71] - Customer A accounted for 58% of total revenue ($9,359,888) and 24$915,063) for the three months ended September 30, 2024[89] - Total contractual obligations as of September 30, 2024 amounted to $99,407,909, with$35,586,415 due in less than one year[91] - A 100 basis point change in interest rates would impact the Geddes loan by $12,806[93] - Non-current assets as of September 30, 2024 were$148,203,329, with $138,257,264 in Canada and$9,946,065 in the United States[116] - The estimated average annual tax rate used for the three months ended September 30, 2024 was 26.5%[117]