SolarBank Corp(SUUN) - 2025 Q3 - Quarterly Report

Financial Statements Statement of Financial Position As of March 31, 2025, total assets surged to C$194.0 million, primarily due to acquisitions, while liabilities and equity also significantly increased - Significant increases in non-current assets were observed in Property, Plant & Equipment (C$34.8 million vs C$3.5 million), Development Assets (C$32.9 million vs C$8.9 million), Goodwill (C$37.6 million vs C$0.4 million), and Intangible Assets (C$34.5 million vs C$2.0 million), largely due to acquisitions[3] Consolidated Statement of Financial Position (C$) | | Mar 31, 2025 | Jun 30, 2024 | | :--- | :--- | :--- | | Total Assets | $193,972,608 | $39,225,861 | | Current Assets | $45,277,012 | $17,629,849 | | Non-current Assets | $148,695,596 | $21,596,012 | | Total Liabilities | $127,222,702 | $20,501,560 | | Current Liabilities | $40,070,938 | $13,388,850 | | Non-current Liabilities | $87,151,764 | $7,112,710 | | Total Equity | $66,749,906 | $18,724,301 | Statement of (Loss) Income and Comprehensive (Loss) Income The company reported a net loss of C$9.0 million for the nine months ended March 31, 2025, driven by a 42% revenue drop and increased expenses - Revenue from EPC services, the largest contributor, decreased significantly to C$20.3 million from C$47.5 million year-over-year, while IPP production revenue grew to C$6.6 million from C$0.26 million[5] Financial Performance for the Nine Months Ended March 31 (C$) | Metric | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $29,105,028 | $50,400,013 | -42.2% | | Gross Profit | $5,799,820 | $10,269,052 | -43.5% | | Total Operating Expenses | $(12,614,867) | $(8,125,069) | +55.3% | | Net (Loss) Income | $(9,029,169) | $5,522,702 | -263.5% | | Basic (Loss) Income Per Share | $(0.29) | $0.20 | -245.0% | | Diluted (Loss) Income Per Share | $(0.29) | $0.15 | -293.3% | Statement of Changes in Shareholders' Equity Shareholders' equity increased to C$66.7 million, primarily due to C$28.6 million in share issuances for acquisitions and C$6.6 million from offerings Reconciliation of Total Equity (Nine months ended Mar 31, 2025) | Description | Amount (C$) | | :--- | :--- | | Balance at June 30, 2024 | $18,724,301 | | Net Loss | $(9,029,169) | | Other Comprehensive Income | $508,664 | | Shares issued for SFF Acquisition | $44,455,267 | | Shelf Prospectus Shares Issued | $6,615,200 | | Other Share-related Transactions | $4,475,643 | | Balance at March 31, 2025 | $66,749,906 | Statement of Cash Flows Operating activities resulted in a C$2.1 million net cash outflow, offset by C$21.2 million from financing, leading to a C$18.8 million cash increase Cash Flow Summary (Nine months ended Mar 31, C$) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $(2,088,001) | $10,919,336 | | Net Cash from Investing Activities | $(333,706) | $(5,078,827) | | Net Cash from Financing Activities | $21,218,282 | $(310,121) | | Increase in Cash | $18,796,575 | $5,341,685 | | Cash, Ending | $23,929,445 | $6,091,112 | Notes to Financial Statements Nature of Operations and Corporate Developments SolarBank Corporation develops and operates solar projects in Canada and the US, with shares trading on Cboe Canada and Nasdaq Global Market - The company develops and operates solar photovoltaic power generation projects in Canada (Ontario) and the United States (New York)[11] - Common shares commenced trading on the Nasdaq Global Market under the symbol 'SUUN' on April 8, 2024[13] Basis of Presentation and Consolidation Financial statements are prepared under IAS 34, consolidating new subsidiaries from the Solar Flow-Through Funds Ltd. acquisition, with functional currencies based on entity location - Financial statements are prepared in accordance with IAS 34, Interim Financial Reporting[14] - A significant number of new subsidiaries, primarily in Canada, were added during the period as part of the Solar Flow-Through Funds Ltd. transaction[23] Development Assets Development assets surged to C$32.9 million, primarily due to C$22.6 million in BESS and C$0.5 million in EV charge systems from the SFF acquisition - Additions of Battery energy storage systems and EV charge point systems were related to the business acquisition of Solar Flow-Through Funds Ltd.[39][40] Development Assets Breakdown (C$) | Asset Type | Mar 31, 2025 | Jun 30, 2024 | | :--- | :--- | :--- | | IPP facilities | $9,791,246 | $8,909,371 | | Battery energy storage systems | $22,602,603 | $ - | | EV charge point systems | $541,666 | $ - | | Total | $32,935,515 | $8,909,371 | Loan Payables Loan payables totaled C$4.7 million, including a Geddes construction loan, a new USD$1.0 million line of credit, and a C$3.0 million subsidiary loan - The Geddes Construction Loan is for up to USD$2.6 million, secured by Geddes Project assets valued at C$9.8 million[51][54] - A subsidiary obtained a new line of credit for USD$1.0 million in December 2024[55] - Subsidiary Solar High Yield Project 1 Ltd. entered into a C$3.0 million loan agreement with an 11% annual interest rate, maturing in November 2025[56] Intangible Assets Intangible assets increased to C$34.5 million, primarily from C$29.3 million in FIT and C$4.9 million in BESS contracts due to the SFF acquisition - The addition of FIT and BESS contracts is related to the business acquisition of SFF[58] Intangible Assets (C$) | Asset Type | Net Book Value (Mar 31, 2025) | Net Book Value (Jun 30, 2024) | | :--- | :--- | :--- | | FIT contracts | $29,534,574 | $2,001,447 | | BESS contracts | $4,925,500 | $ - | | Total | $34,460,074 | $2,001,447 | Long-Term Debt Long-term debt surged to C$63.8 million, primarily due to C$52.7 million in assumed loans from SFF and OFIT acquisitions, plus a new C$10.1 million RBC credit agreement - The company assumed 51 term loans from the SFF acquisition and 2 loans from the OFIT GM and OFIT RT acquisition[62][66] - The company entered into a credit agreement with RBC, obtaining an advancement of C$10.1 million for the construction of BESS projects in Ontario[68] Long-Term Debt Breakdown (C$) | Component | Mar 31, 2025 | Jun 30, 2024 | | :--- | :--- | :--- | | HASCAP Loan | $675,926 | $759,259 | | Long-term loans (Acquired) | $53,042,265 | $4,068,139 | | Credit agreement (RBC) | $10,090,819 | $ - | | Total | $63,809,010 | $4,827,398 | Acquisitions On July 8, 2024, the company acquired Solar Flow-Through Funds Ltd. for up to C$41.8 million, resulting in C$37.1 million goodwill and contributing C$5.0 million revenue - The company acquired all common shares of SFF on July 8, 2024, through a plan of arrangement[73][75] - Consideration included an upfront payment of 3.6 million SolarBank shares and contingent value rights (CVRs) for up to 2.3 million additional shares[74] Preliminary SFF Purchase Price Allocation (C$) | Item | Value | | :--- | :--- | | Total fair value of consideration | $42,710,670 | | Subtotal identifiable net assets | $21,377,669 | | Goodwill arising on acquisition | $37,147,456 | Financial Instruments and Risk Management The company manages credit, currency, concentration, liquidity, and interest rate risks, with significant customer concentration and C$101.4 million in contractual obligations - For the nine months ended March 31, 2025, one customer (Customer A) accounted for 43% of total revenue, compared to two customers (E and F) accounting for 81% in the prior year[88] - The company uses interest rate swaps to hedge floating rate term loans into fixed-rate arrangements[81][90] Contractual Obligations as at March 31, 2025 (C$) | Obligation | Total | Less than one year | | :--- | :--- | :--- | | Long-Term Debt | $63,809,010 | $5,248,436 | | Operating Lease | $10,552,219 | $987,454 | | Loan payable | $4,738,794 | $4,738,794 | | Accounts Payable | $20,761,894 | $20,761,894 | | Total | $101,372,078 | $32,377,184 | Share Capital Common shares outstanding increased to 34.9 million, driven by issuances for the SFF acquisition, a registered direct offering, and an ATM program - Issued 3.6 million common shares for the SFF acquisition on July 8, 2024[94] - Sold 2.4 million common shares in a registered direct offering at $5.08 per share for gross proceeds of $12.2 million[94] - Sold 1.2 million common shares through at-the-market offerings for gross proceeds of $3.0 million[94] Warrants Outstanding | | Mar 31, 2025 | Mar 31, 2024 | | :--- | :--- | :--- | | Warrants Outstanding | 10,212,085 | 7,928,000 | Non-Controlling Interest (NCI) Non-controlling interests (NCI) totaled C$15.0 million, primarily from SFF acquisition subsidiaries, with a C$3.0 million net loss allocated to NCI NCI Summary (C$) | Metric | As at Mar 31, 2025 | | :--- | :--- | | Total Net Assets of Subsidiaries with NCI | $27,570,209 | | Carrying Amount of NCI | $14,964,443 | | Net Loss Allocated to NCI (9 months) | $(2,980,037) | Segment Information Post-SFF acquisition, segments are Development & EPC (C$22.5M revenue), IPP Production (C$6.6M revenue), and Corporate; US is top revenue source, Canada holds most non-current assets - Effective December 31, 2024, reportable segments are: Development and EPC, IPP Production, and Corporate and other activities[110] Revenue by Segment (Nine months ended Mar 31, 2025, C$) | Segment | External Revenue | Gross Profit | | :--- | :--- | :--- | | Development & EPC | $22,491,700 | $5,431,548 | | IPP Production | $6,575,712 | $547,236 | | Corporate and other | $37,616 | $(178,964) | | Total | $29,105,028 | $5,799,820 | Geographic Information (C$) | Geography | Revenue (9M 2025) | Non-Current Assets (Mar 31, 2025) | | :--- | :--- | :--- | | Canada | $9,919,553 | $138,085,855 | | United States | $19,185,475 | $10,609,741 | Goodwill Goodwill increased to C$37.6 million, primarily driven by C$37.1 million from the Solar Flow-Through Funds Ltd. acquisition Goodwill Balance by Acquisition (C$) | Entity | Goodwill Balance | | :--- | :--- | | OFIT GM | $289,202 | | OFIT RT | $149,555 | | Solar Flow-Through Funds Ltd | $37,147,456 | | Total | $37,586,213 |