Bright Green (BGXX) - 2024 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Unaudited financial statements present the company's financial position and performance for Q1 2024 and 2023 Condensed Consolidated Balance Sheets Total assets decreased, liabilities decreased, and stockholders' equity slightly increased by March 31, 2024 | Metric | March 31, 2024 | December 31, 2023 | | :-------------------------------- | :------------- | :---------------- | | Total Assets | $15,956,333 | $17,403,047 | | Total Liabilities | $4,842,780 | $6,438,102 | | Total Stockholders' Equity | $11,113,553 | $10,964,945 | | Cash | $0 | $10,059 | | Other investment held at fair value | $0 | $726,343 | Condensed Consolidated Statements of Operations and Comprehensive Loss Net loss decreased to $949,450 in Q1 2024, driven by debt extinguishment gain and lower operating expenses | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Revenue | $0 | $0 | | Net Loss | $(949,450) | $(2,613,265) | | Net Loss per Common Share | $(0.01) | $(0.02) | | Gain on extinguishment of debt | $1,008,589 | $0 | | Total operating expenses | $1,877,867 | $2,612,623 | Condensed Consolidated Statements of Changes in Stockholders' Equity Stockholders' equity increased to $11.11 million by March 31, 2024, from stock-based compensation and common stock issuance | Metric | March 31, 2024 | December 31, 2023 | | :----------------------------------- | :------------- | :---------------- | | Total Stockholders' Equity | $11,113,553 | $10,964,945 | | Common Shares Outstanding | 190,166,318 | 184,758,818 | | Common stock issued for settlement of accounts payable | $425,920 | - | | Common stock issued for services | $541,820 | - | Condensed Consolidated Statements of Cash Flows Operating cash flow shifted to a net use of $58,552 in Q1 2024; cash at period end was $0 | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | | Net cash (used in) provided by operating activities | $(58,552) | $273,391 | | Net cash used in investing activities | $(61,507) | $(1,537,668) | | Net cash provided by financing activities | $110,000 | $1,272,205 | | Cash, End of Period | $0 | $422,502 | Notes to the Condensed Consolidated Financial Statements (Unaudited) Notes detail business, accounting policies, financial instruments, related party transactions, and going concern risks - Company is a start-up with no revenue as of March 31, 2024[35][60] - Incurred recurring losses and has an accumulated deficit of $48,152,919 as of March 31, 2024[60] - Substantial doubt about the company's ability to continue as a going concern due to insufficient working capital and reliance on additional financing[37][82] - Received DEA Registration for bulk manufacturing of cannabis on April 28, 2023, and a second DEA registration for Importing Schedule I Controlled Substances in May 2023[171] - Received approval from the New Mexico Board of Pharmacy in February 2024 to produce additional Schedule I and Schedule II controlled substances (e.g., psilocybin, peyote cactus, opium poppy)[201] - Modified EB-5 Program on March 29, 2024, to authorize 20,000,000 shares to be sold at $2.00 per share for up to 50 investors[56] - Recognized a $1,008,589 gain on extinguishment of debt for Q1 2024 due to a Settlement and Release Agreement[123] - Total stock-based compensation costs for Q1 2024 were $672,138, allocated to general and administrative expenses[141] - Subsequent event: Received $749,878 from one accredited investor for the EB-5 Program on April 25, 2024[154] - Subsequent event: Drew an additional $60,000 on the related party line of credit in April 2024[197] 1. Description of Business and Organization Bright Green Corporation, a start-up, holds DEA registrations for cannabis and is expanding into other controlled substances - Incorporated on April 16, 2019, under Delaware General Corporation Law[33] - Received DEA Registration for bulk manufacturing of cannabis on April 28, 2023, and for Importing Schedule I Controlled Substances in May 2023[171] - Approved by the New Mexico Board of Pharmacy in February 2024 to produce additional Schedule I and Schedule II controlled substances (e.g., psilocybin, peyote cactus, opium poppy)[201] - Modified the EB-5 Program on March 29, 2024, to authorize 20,000,000 shares to be sold at $2.00 per share for up to 50 investors[56] - Formed Regional Center Bright Green, LLC (RCBG) on September 20, 2023, to assist foreign investors with the EB-5 program, but it was not yet operational as of March 31, 2024[57] - Company is a start-up and has no revenue as of March 31, 2024[35] 2. Going Concern and Basis of Presentation The company faces significant going concern risks due to recurring losses and negative working capital | Metric | March 31, 2024 | December 31, 2023 | | :------------------- | :------------- | :---------------- | | Accumulated Deficit | $48,152,919 | $47,203,469 | | Negative Working Capital | $4,621,021 | $5,968,030 | | Net Loss (Q1) | $(949,450) | $(2,613,265) | - Substantial doubt about the company's ability to continue as a going concern due to insufficient working capital to pay operating expenses for at least 12 months[37][82] - Company's continued existence depends on its ability to execute its operating plan and obtain additional debt or equity financing[37] 3. Summary of Significant Accounting Policies This section outlines the company's accounting policies, including U.S. GAAP conformity, consolidation, and fair value measurements - Financial statements are prepared in conformity with U.S. GAAP for interim financial information[36] - The company consolidates the accounts of its wholly-owned subsidiary, Regional Center Bright Green, LLC[65] - Depreciation of property, plant, and equipment is provided using the declining balance or straight-line method[41] - Uses a three-level hierarchy for fair value measurements (Level 1, 2, 3)[68][90] - Accounts for stock-based compensation awards under ASC 718, recognizing fair value over the vesting period[98] - Elected to use the extended transition period for complying with new or revised accounting standards under the JOBS Act[233] [4. Concentration of Credit Risk](index=21&type=section&id=4.%20Concentration%20of%20Credit