Exhibit 99.2
SOLARBANK CORPORATION
Condensed Consolidated Interim Financial Statements
(Expressed in Canadian Dollars)
(Unaudited)
For the three months ended September 30, 2024 and 2023
SOLARBANK CORPORATION
Condensed Consolidated Interim Statements of Financial Position
(Expressed in Canadian dollars)
| | | Notes | | (Unaudited)
September 30, 2024 | | | (Audited)
June 30, 2024 | |
| Assets | | | | | | | | | | |
| Current assets: | | | | | | | | | | |
| Cash | | | | $ | 14,250,082 | | | $ | 5,270,405 | |
| Short-term investment | | 4 | | | 1,586,097 | | | | 920,000 | |
| Trade and other receivables | | 5 | | | 3,800,064 | | | | 1,115,217 | |
| Unbilled revenue | | 8 | | | 3,358,129 | | | | 666,748 | |
| Prepaid expenses and deposits | | 6 | | | 1,402,168 | | | | 3,126,829 | |
| Inventory | | 9 | | | 8,397,055 | | | | 6,530,650 | |
| | | | | | 32,793,595 | | | | 17,629,849 | |
| Non-current assets: | | | | | | | | | | |
| Property, plant and equipment | | 7 | | | 39,177,567 | | | | 3,454,923 | |
| Right-of-use assets | | 13 | | | 7,947,990 | | | | 1,085,128 | |
| Development assets | | 10 | | | 25,987,448 | | | | 8,909,371 | |
| Derivative assets | | 19(a) | | | 667,374 | | | | 152,990 | |
| Tax equity assets | | 17 | | | 373,868 | | | | 401,373 | |
| Goodwill | | 18 | | | 37,586,213 | | | | 438,757 | |
| Intangible assets | | 15 | | | 35,652,371 | | | | 2,001,447 | |
| Investment | | | | | - | | | | 5,152,023 | |
| Other assets | | 6 | | | 810,498 | | | | - | |
| | | | | | 148,203,329 | | | | 21,596,012 | |
| Total assets | | | | $ | 180,996,924 | | | $ | 39,225,861 | |
| | | | | | | | | | | |
| Liabilities and Shareholders’ equity | | | | | | | | | | |
| Current liabilities: | | | | | | | | | | |
| Trade and other payables | | 11 | | $ | 27,038,344 | | | $ | 4,690,261 | |
| Unearned revenue | | 12 | | | 1,106,915 | | | | 4,600,491 | |
| Current portion of long-term debt | | 16 | | | 5,525,871 | | | | 448,229 | |
| Loan payables | | 14 | | | 1,321,648 | | | | 1,309,884 | |
| Tax payable | | | | | 442,947 | | | | 2,112,606 | |
| Current portion of lease liability | | 13 | | | 621,597 | | | | 148,787 | |
| Current portion of tax equity | | 17 | | | 75,406 | | | | 78,592 | |
| Non-current liabilities: | | | | | 36,132,728 | | | | 13,388,850 | |
| Long-term debt | | 16 | | | 50,737,450 | | | | 4,379,169 | |
| Other long-term liabilities | | | | | 361,336 | | | | 366,369 | |
| Due to related parties | | 18, 22 | | | 7,357,228 | | | | - | |
| Deferred tax liabilities | | 25 | | | 15,300,694 | | | | 1,073,835 | |
| Lease liabilities | | 13 | | | 7,428,212 | | | | 992,687 | |
| Tax equities | | 17 | | | 277,800 | | | | 300,650 | |
| | | | | | 81,462,720 | | | | 7,112,710 | |
| Total liabilities | | | | $ | 117,595,448 | | | $ | 20,501,560 | |
| | | | | | | | | | | |
| Shareholders’ equity: | | | | | | | | | | |
| Share capital | | 20 | | | 37,707,760 | | | | 9,025,698 | |
| Contributed surplus | | | | | 4,172,422 | | | | 4,059,175 | |
| Accumulated other comprehensive income | | | | | (74,000 | ) | | | 99,681 | |
| Retained earnings | | | | | 4,020,706 | | | | 3,178,814 | |
| Equity attributable to shareholders of the company | | | | | 45,826,888 | | | | 16,363,368 | |
| Non-controlling interest | | 21 | | | 17,574,588 | | | | 2,360,933 | |
| Total equity | | | | | 63,401,476 | | | | 18,724,301 | |
| Total liabilities and shareholders’ equity | | | | $ | 180,996,924 | | | $ | 39,225,861 | |
Approved and authorized for issuance on behalf of the Board of Directors on November 13, 2024 by:
“Richard Lu” | |
“Sam Sun” |
| Richard Lu, CEO, and Director | | Sam Sun, CFO |
See accompanying notes to these condensed consolidated interim financial statements.
SOLARBANK CORPORATION
Condensed Consolidated Interim Statements of Income (loss) and Comprehensive Income (loss)
(Expressed in Canadian dollars)
(Unaudited)
| | | Notes | | Three months ended September 30 | |
| | | | | 2024 | | | 2023 | |
| Revenue from development fees | | | | $ | - | | | $ | 2,011,750 | |
| Revenue from EPC services | | | | | 11,954,389 | | | | 5,613,015 | |
| Revenue from IPP production | | | | | 4,031,816 | | | | 14,896 | |
| Revenue from O&M and other services | | | | | 19,116 | | | | 41,600 | |
| | | | | | 16,005,321 | | | | 7,681,261 | |
| Cost of goods sold | | | | | (11,453,956 | ) | | | (5,334,566 | ) |
| Gross profit | | | | | 4,551,365 | | | | 2,346,695 | |
| Operating expense: | | | | | | | | | | |
| Advertising and promotion | | | | | (448,350 | ) | | | (503,809 | ) |
| Consulting fees | | | | | (935,004 | ) | | | (307,050 | ) |
| Depreciation | | 7,13 | | | (24,539 | ) | | | (21,978 | ) |
| Insurance | | | | | (211,859 | ) | | | (39,246 | ) |
| Office, rent and utilities | | | | | (293,786 | ) | | | (79,193 | ) |
| Professional fees | | | | | (1,086,509 | ) | | | (144,141 | ) |
| Repairs and maintenance | | | | | (40,440 | ) | | | (5,051 | ) |
| Salary and wages | | | | | (423,961 | ) | | | (202,081 | ) |
| Stock based compensation | | 20 | | | (113,248 | ) | | | (429,580 | ) |
| Travel and events | | | | | (57,544 | ) | | | (44,263 | ) |
| Total operating expenses | | | | | (3,635,240 | ) | | | (1,776,392 | ) |
| Other income | | | | | | | | | | |
| Interest income | | | | | 219,450 | | | | 83,169 | |
| Interest expenses | | | | | (802,331 | ) | | | (24,081 | ) |
| Fair value change gain | | 16(2), 18(4) | | | 618,636 | | | | - | |
| Other income | | | | | 94,690 | | | | 1,371,837 | |
| Net income before taxes | | | | $ | 1,046,570 | | | $ | 2,001,228 | |
| Current tax (expense) recovery | | 25 | | | (697,540 | ) | | | 37,740 | |
| Deferred tax expenses | | 25 | | | (107,938 | ) | | | - | |
| Net income | | | | $ | 241,092 | | | $ | 2,038,968 | |
| Items that are or may be reclassified subsequently to profit or loss Current translation adjustments | | | | | (173,681 | ) | | | 86,766 | |
| Other comprehensive income | | | | | (173,681 | ) | | | 86,766 | |
| Net income (loss) and comprehensive income (loss) | | | | $ | 67,411 | | | $ | 2,125,734 | |
| | | | | | | | | | | |
| Net income (loss) attributable to: | | | | | | | | | | |
| Shareholders of the company | | | | | 841,892 | | | | 2,034,619 | |
| Non-controlling interest | | 21 | | | (600,800 | ) | | | 4,349 | |
| Net income (loss) | | | | $ | 241,092 | | | $ | 2,038,968 | |
| Total income (loss) and comprehensive income (loss) attributable to: | | | | | | | | | | |
| Shareholders of the company | | | | | 668,211 | | | | 2,125,734 | |
| Non-controlling interest | | 21 | | | (600,800 | ) | | | - | |
| Total income (loss) and comprehensive income (loss) | | | | $ | 67,411 | | | $ | 2,125,734 | |
| Net income (loss) per share | | | | | | | | | | |
| Basic | | 26 | | | 0.01 | | | | 0.08 | |
| Diluted | | 26 | | | 0.01 | | | | 0.05 | |
| Weighted average number of common shares outstanding | | | | | | | | | | |
| Basic | | 26 | | | 30,459,369 | | | | 26,806,183 | |
| Diluted | | 26 | | | 40,527,524 | | | | 37,122,800 | |
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
SOLARBANK CORPORATION
Condensed Consolidated Interim Statements of Changes in Shareholders’ Equity
(Expressed in Canadian Dollars)
(Unaudited)
| | | Note | | Number of shares | | | Share Capital | | | Contributed Surplus | | | Retained Earnings | | | Accumulated OCI | | | Total Shareholders’ Equity | | | Non-Controlling Interest | | | Total Equity | |
| Balance at June 30, 2024 | | | | | 27,191,075 | | | $ | 9,025,698 | | | $ | 4,059,175 | | | $ | 3,178,814 | | | $ | 99,681 | | | $ | 16,363,368 | | | $ | 2,360,933 | | | $ | 18,724,301 | |
| Net loss | | | | | - | | | | - | | | | - | | | | 841,892 | | | | - | | | | 841,892 | | | | (600,800 | ) | | | 241,092 | |
| Warrant exercised | | | | | 55,000 | | | | 41,250 | | | | - | | | | - | | | | - | | | | 41,250 | | | | - | | | | 41,250 | |
| RSU granted | | 20(e) | | | - | | | | - | | | | 2,580 | | | | - | | | | - | | | | 2,580 | | | | - | | | | 2,580 | |
| Share-based compensation | | 20(d) | | | - | | | | - | | | | 110,667 | | | | - | | | | - | | | | 110,667 | | | | - | | | | 110,667 | |
| Other comprehensive loss | | | | | - | | | | - | | | | - | | | | - | | | | (173,681 | ) | | | (173,681 | ) | | | - | | | | (173,681 | ) |
| Acquisition of Solar Flow-Through Funds | | 18 | | | 3,575,632 | | | | 28,640,812 | | | | - | | | | - | | | | - | | | | 28,640,812 | | | | 15,814,455 | | | | 44,455,267 | |
| Balance at September 30, 2024 | | | | | 30,821,707 | | | $ | 37,707,760 | | | $ | 4,172,422 | | | $ | 4,020,706 | | | $ | (74,000 | ) | | $ | 45,826,888 | | | $ | 17,574,588 | | | $ | 63,401,476 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Balance at June 30, 2023 | | | | | 26,800,000 | | | $ | 6,855,075 | | | $ | 3,001,924 | | | $ | 6,652,551 | | | $ | (116,759 | ) | | $ | 16,392,791 | | | $ | 238,405 | | | $ | 16,631,196 | |
| Net income | | | | | - | | | | - | | | | - | | | | 2,034,619 | | | | - | | | | 2,034,619 | | | | 4,349 | | | | 2,038,968 | |
| Common shares issued, net of costs | | | | | 2,200 | | | | 21,659 | | | | - | | | | - | | | | - | | | | 21,659 | | | | - | | | | 21,659 | |
| Warrant exercised | | | | | 55,000 | | | | 41,250 | | | | - | | | | - | | | | - | | | | 41,250 | | | | - | | | | 41,250 | |
| RSU granted | | | | | - | | | | - | | | | 48,181 | | | | - | | | | - | | | | 48,181 | | | | - | | | | 48,181 | |
| Share-based compensation | | | | | - | | | | - | | | | 381,398 | | | | - | | | | - | | | | 381,398 | | | | - | | | | 381,398 | |
| Other comprehensive loss | | | | | - | | | | - | | | | - | | | | - | | | | 86,766 | | | | 86,766 | | | | - | | | | 86,766 | |
| Balance at September 30, 2023 | | | | | 26,857,200 | | | $ | 6,917,984 | | | $ | 3,431,503 | | | $ | 8,687,170 | | | $ | (29,993 | ) | | $ | 19,006,664 | | | $ | 242,754 | | | $ | 19,249,418 | |
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
SOLARBANK CORPORATION
Condensed Consolidated Interim Statements of Cash Flows
(Expressed in Canadian Dollars)
(Unaudited)
| | | Note | | Three months ended September 30 | |
| | | | | 2024 | | | 2023 | |
| | | | | | | | | |
| Operating activities: | | | | | | | | | | |
| Net Income (loss) | | | | $ | 241,092 | | | $ | 2,038,968 | |
| | | | | | | | | | | |
| Adjustments for: | | | | | | | | | | |
| Depreciation and amortization | | | | | 1,507,854 | | | | 21,978 | |
| Fair value change loss | | 16(2) | | | (618,636 | ) | | | - | |
| Other income related to tax equity | | 17 | | | (3,863 | ) | | | (34,643 | ) |
| Interest accretion | | 13, 17 | | | 192,172 | | | | 14,608 | |
| Income tax expense | | | | | 697,540 | | | | - | |
| Deferred income tax expenses | | | | | 107,938 | | | | - | |
| Share-based compensation | | 20 | | | 113,247 | | | | 429,580 | |
| | | | | | 2,237,344 | | | | 2,470,491 | |
| Changes in: | | | | | | | | | | |
| Trade and other receivables | | | | | 1,211,918 | | | | (1,266,621 | ) |
| Unbilled revenue | | | | | (2,707,396 | ) | | | (448,756 | ) |
| Contract fulfilment costs | | | | | - | | | | (194,781 | ) |
| Inventories | | | | | (1,974,730 | ) | | | (349,550 | ) |
| Prepaid expenses and deposits | | | | | 2,404,401 | | | | (2,045,404 | ) |
| Trade and other payables | | | | | 12,765,795 | | | | 1,576,693 | |
| Income taxes payable | | | | | 220,103 | | | | (84,608 | ) |
| Unearned revenue | | | | | (3,486,043 | ) | | | 1,593,413 | |
| Cash generated from operating activities | | | | | 10,671,392 | | | | 1,250,877 | |
| Income tax paid | | | | | (2,556,141 | ) | | | (574,019 | ) |
| Net cash generated from operating activities | | | | | 8,115,251 | | | | 676,858 | |
| | | | | | | | | | | |
| Investing activities: | | | | | | | | | | |
| Purchase of GIC | | | | | (1,376,109 | ) | | | - | |
| Redemption of GIC | | | | | 1,350,000 | | | | 5,430,000 | |
| Investment in SFF Shares | | | | | - | | | | (2,465,000 | ) |
| Cash from SFF acquisition | | 18 | | | 9,886,679 | | | | - | |
| Acquisition of development asset | | | | | (6,661,405 | ) | | | (3,675,008 | ) |
| Cash generated from (used in) investing activities | | | | $ | 3,199,165 | | | $ | (710,008 | ) |
| | | | | | | | | | | |
| Financing activities: | | | | | | | | | | |
| Proceeds from issuance of common shares, net transaction costs | | | | | - | | | | 21,659 | |
| Proceeds from broker warrants exercised | | | | | 41,250 | | | | 41,250 | |
| Repayment of lease obligation | | | | | (249,860 | ) | | | (14,484 | ) |
| Repayment from long-term debts – principal | | | | | (1,382,272 | ) | | | (27,778 | ) |
| Repayment from long-term debts – interest | | | | | (693,388 | ) | | | (8,680 | ) |
| Cash generated from (used in) financing activities | | | | | (2,284,270 | ) | | | 11,967 | |
| | | | | | | | | | | |
| Increase (decrease) in cash | | | | | 9,030,146 | | | | (21,183 | ) |
| Effect of changes in exchange rates on cash | | | | | (50,469 | ) | | | (107,093 | ) |
| Cash, beginning | | | | | 5,270,405 | | | | 749,427 | |
| Cash, ending | | | | $ | 14,250,082 | | | $ | 621,151 | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
SOLARBANK CORPORATION
Notes to Condensed Consolidated Interim Financial Statements
For the three months ended September 30, 2024 and 2023
(Expressed in Canadian Dollars)
(Unaudited)
SolarBank Corporation (the “Company”) was formed under the laws of the province of Ontario on September 23, 2013. The Company is engaged in the development and operation of solar photovoltaic power generation projects in Canada and the United States with a geographic focus in the province of Ontario, Canada and New York state, USA. The Company changed its name from Abundant Solar Energy Inc. to SolarBank Corporation on October 7, 2022.
The address of the Company and the principal place of the business is 505 Consumers Rd, Suite 803, Toronto, ON, M2J 4Z2.
On March 1, 2023, the Company closed its initial public offering (the “Offering”) of common shares. With completion of the Offering, the Company commenced trading its common shares on the Canadian Securities Exchange (the “CSE”) under the symbol “SUNN” on March 2, 2023. On February 14, 2024, the Company migrated its listing to the Cboe Canada Exchange Inc. under the existing trading symbol “SUNN”. On April 8, 2024, the Company’s common shares commenced trading on the Nasdaq Global market under the symbol “SUUN”.
| (a) | Statement of compliance: |
These accompanying unaudited condensed interim consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and have been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting. They are condensed as they do not include all of the information required for full annual financial statements, and they should be read in conjunction with the audited consolidated financial statements of the company for the year ended June 30, 2024.
The board of directors approved these unaudited condensed interim consolidated financial statements for issue on November 13, 2024.
These unaudited condensed interim consolidated financial statements were prepared on a going concern basis and historical cost basis with the exception of certain financial instruments as disclosed in Note 19.
| (c) | Basis of consolidation: |
These unaudited condensed interim consolidated financial statements include the accounts of the Company and its wholly or partially owned subsidiaries.
Subsidiaries are consolidated from the date on which the Company obtains control up to the date of the disposition of control. Control is achieved when the Company has power over the subsidiary, is exposed or has rights to variable returns from its involvement with the subsidiary and has the ability to use its power to affect its returns. For non-wholly owned subsidiaries over which the Company has control, the net assets attributable to outside equity shareholders are presented as “non-controlling interests” in the equity section of the consolidated statement of financial position. Net income or loss for the period that is attributable to the non-controlling interests is calculated based on the ownership of the non-controlling interest shareholders in the subsidiary.
Balance, transactions, income and expenses between the Company and its subsidiaries are eliminated on consolidation.
SOLARBANK CORPORATION
Notes to Condensed Consolidated Interim Financial Statements
For the three months ended September 30, 2024 and 2023
(Expressed in Canadian Dollars)
(Unaudited)
| 2. | Basis of presentation (continued) |
Details of the Company’s significant subsidiaries are as follows:
| | Country of | | Ownership interest | |
| Name | | Incorporation | | 30-Sep-24 | | | 30-Jun-24 | |
| Abundant Solar Power Inc. | | USA | | | 100 | % | | | 100 | % |
| Abundant Construction Inc. | | Canada | | | 100 | % | | | 100 | % |
| Abundant Energy Solutions Ltd. | | Canada | | | 100 | % | | | 100 | % |
| 2467264 Ontario Inc. | | Canada | | | 49.90 | % | | | 49.90 | % |
| OFIT GM Inc. | | Canada | | | 49.90 | % | | | 49.90 | % |
| OFIT RT Inc. | | Canada | | | 49.90 | % | | | 49.90 | % |
| Solar Alliance Energy DevCo LLC | | USA | | | 100 | % | | | 100 | % |
| Solar Alliance TE HoldCo 1, LLC | | USA | | | 100 | % | | | 100 | % |
| Solar Alliance VC1 LLC | | USA | | | 100 | % | | | 100 | % |
| Abundant Solar Power (US1) LLC | | USA | | | 100 | % | | | 100 | % |
| Abundant Solar Power (New York) LLC | | USA | | | 100 | % | | | 100 | % |
| Abundant Solar Power (Maryland) LLC | | USA | | | 100 | % | | | 100 | % |
| Abundant Solar Power (RP) LLC | | USA | | | 100 | % | | | 100 | % |
| SUNN 1011 LLC | | USA | | | 100 | % | | | 100 | % |
| SUNN 1012 LLC | | USA | | | 100 | % | | | 100 | % |
| Abundant Solar Power (CNY) LLC | | USA | | | 100 | % | | | 100 | % |
| SUNN 1016 LLC | | USA | | | 100 | % | | | 100 | % |
| Abundant Solar Power (TZ1) LLC | | USA | | | 100 | % | | | 100 | % |
| Abundant Solar Power (M1) LLC | | USA | | | 100 | % | | | 100 | % |
| Abundant Solar Power (J1) LLC | | USA | | | 100 | % | | | 100 | % |
| Abundant Solar Power (Steuben) LLC | | USA | | | 100 | % | | | 100 | % |
| ABUNDANT SOLAR POWER (USNY- MARKHAM HOLLOW RD-001) LLC | | USA | | | 100 | % | | | 100 | % |
| SUNN 1015 LLC | | USA | | | 100 | % | | | 100 | % |
| SUNN 1002 LLC | | USA | | | 100 | % | | | 100 | % |
| SUNN 1003 LLC | | USA | | | 100 | % | | | 100 | % |
| ABUNDANT SOLAR POWER (USNY-Richmond-002) LLC | | USA | | | 100 | % | | | 100 | % |
| ABUNDANT SOLAR POWER (USNY-Richmond-003) LLC | | USA | | | 100 | % | | | 100 | % |
| SUNN 1006 LLC | | USA | | | 100 | % | | | 100 | % |
| SUNN 1007 LLC | | USA | | | 100 | % | | | 100 | % |
| SUNN 1008 LLC | | USA | | | 100 | % | | | 100 | % |
| SUNN 1009 LLC | | USA | | | 100 | % | | | 100 | % |
| SUNN 1010 LLC | | USA | | | 100 | % | | | 100 | % |
| SUNN (203 Fuller Rd) LLC | | USA | | | 100 | % | | | 100 | % |
| SUNN 1001 LLC | | USA | | | 100 | % | | | 100 | % |
| Abundant Solar Power (USNY-6882 Rice Road-001) LLC | | USA | | | 100 | % | | | 100 | % |
| Abundant Solar Power (LCP) LLC | | USA | | | 100 | % | | | 100 | % |
| Abundant Solar Power (R1) LLC | | USA | | | 100 | % | | | 100 | % |
| SUNN 1005 LLC | | USA | | | 100 | % | | | 100 | % |
| SUNN 1013 LLC | | USA | | | 100 | % | | | 100 | % |
| SUNN 1014 LLC | | USA | | | 100 | % | | | 100 | % |
| ABUNDANT SOLAR POWER (USNY-327 Hardie Rd-001) LLC | | USA | | | 100 | % | | | 100 | % |
| Abundant Solar Power (Dutch Hill) LLC | | USA | | | 100 | % | | | 100 | % |
| Abundant Solar Power (Dutch Hill 2) LLC | | USA | | | 100 | % | | | 100 | % |
| Abundant Solar Power (Dutch Hill 3) LLC | | USA | | | 100 | % | | | 100 | % |
| SUNN 1004 LLC | | USA | | | 100 | % | | | 100 | % |
| Solar Flow-Through Funds Ltd. | | Canada | | | 100 | % | | | - | |
| Solar High Yield Projects #1 Ltd. | | Canada | | | 100 | % | | | - | |
| 2344215 Ontario Inc. | | Canada | | | 100 | % | | | - | |
| SHY1 2012 FIT2 Ltd. | | Canada | | | 100 | % | | | - | |
| 2343461 Ontario Inc. | | Canada | | | 100 | % | | | - | |
| Icarus Whitesand Solar Limited Partnership | | Canada | | | 85.00 | % | | | - | |
SOLARBANK CORPORATION
Notes to Condensed Consolidated Interim Financial Statements
For the three months ended September 30, 2024 and 2023
(Expressed in Canadian Dollars)
(Unaudited)
| 2. | Basis of presentation (continued) |
| | Country of | | Ownership interest | |
| Name | | Incorporation | | 30-Sep-24 | | | 30-Jun-24 | |
| 2387276 Ontario Inc. | | Canada | | | 49.90 | % | | | - | |
| 2387280 Ontario Inc. | | Canada | | | 24.95 | % | | | - | |
| 2387281 Ontario Inc. | | Canada | | | 49.90 | % | | | - | |
| 2387282 Ontario Inc. | | Canada | | | 49.90 | % | | | - | |
| 2391395 Ontario Inc. | | Canada | | | 49.90 | % | | | - | |
| SPN LP 7 | | Canada | | | 49.90 | % | | | - | |
| 1000234763 Ontario Inc. | | Canada | | | 50.00 | % | | | - | |
| 1000234813 Ontario Inc. | | Canada | | | 50.00 | % | | | - | |
| Solar Flow-Through Project #1 (2013) Ltd. | | Canada | | | 100 | % | | | - | |
| 2405402 Ontario Inc. | | Canada | | | 49.90 | % | | | - | |
| 2405514 Ontario Inc. | | Canada | | | 49.90 | % | | | - | |
| 2467260 Ontario Inc. | | Canada | | | 49.90 | % | | | - | |
| Solar Flow-Through (2014) Ltd. | | Canada | | | 100 | % | | | - | |
| Solar Flow-Through Projects (2014 Subco F2) Ltd. | | Canada | | | 100 | % | | | - | |
| Solar Flow-Through (2015) Ltd. | | Canada | | | 100 | % | | | - | |
| 2405372 Ontario Inc. | | Canada | | | 49.90 | % | | | - | |
| 2469780 Ontario Inc. | | Canada | | | 49.90 | % | | | - | |
| 2405799 Ontario Inc. | | Canada | | | 49.90 | % | | | - | |
| SFF Solar (2015) Ltd. | | Canada | | | 100 | % | | | - | |
| Solar Flow-Through (2016) Ltd. | | Canada | | | 100 | % | | | - | |
| 2503072 Ontario Inc. | | Canada | | | 49.90 | % | | | - | |
| 2503225 Ontario Inc. | | Canada | | | 49.90 | % | | | - | |
| 2503903 Ontario Inc. | | Canada | | | 49.90 | % | | | - | |
| Northern Development Solar 2016 Inc. | | Canada | | | 49.90 | % | | | - | |
| Sunshine Solar Ontario 2016 Inc. | | Canada | | | 49.90 | % | | | - | |
| Solar Flow-Through (2017-I) Ltd. | | Canada | | | 100 | % | | | - | |
| Solar Flow-Through (2017-A) Ltd. | | Canada | | | 100 | % | | | - | |
| Solar Flow-Through (2018-I) Ltd. | | Canada | | | 100 | % | | | - | |
| Solar Flow-Through (2018-A) Ltd. | | Canada | | | 100 | % | | | - | |
| 15155355 Canada Inc. | | Canada | | | 100 | % | | | - | |
| Sustainable Energies Corporation | | Canada | | | 100 | % | | | - | |
| Sustainable Energies OR LLC | | Canada | | | 100 | % | | | - | |
| Sustainable Energies CA LLC | | Canada | | | 100 | % | | | - | |
| Sustainable Energies VA LLC | | Canada | | | 100 | % | | | - | |
| (ii) | Functional and presentation currency: |
The Company’s unaudited condensed interim consolidated financial statements are presented in Canadian dollars. The functional currency of Canadian parent company and its Canadian subsidiaries is the Canadian dollar. The functional currency of its subsidiaries in the United States is the US dollar.
| 3. | Significant accounting policies and use of judgements and estimates |
These unaudited condensed interim consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended June 30, 2024 which includes information necessary or useful to understand the Company’s business and financial statement presentation. In particular, the Company’s significant accounting policies are presented as Note 3 in the audited consolidated financial statements for the year ended June 30, 2024 and have been consistently applied to all periods presented in the preparation of these unaudited condensed interim consolidated financial statements.
SOLARBANK CORPORATION
Notes to Condensed Consolidated Interim Financial Statements
For the three months ended September 30, 2024 and 2023
(Expressed in Canadian Dollars)
(Unaudited)
| 3. | Significant accounting policies and use of judgements and estimates (continued) |
In preparing these unaudited condensed interim consolidated financial statements, management has made judgements and estimates about the future that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.
The significant judgements made by management in applying the Company’s accounting policies and the key sources of estimation uncertainty were the same as those described in the last annual financial statements.
As at September 30, 2024, the Company has three GICs in short-term investment totalling $870,000. The GICs have one year term with interest rate of 4.7%-5.2% (June 30, 2024 - $920,000 with one year term and interest rate of 4.25%-4.95%).
The Company obtained another five GICs, through acquisition of Solar Flow-Through Funds Ltd. (“SFF”), totalling $716,097. The GICs have one year term with interest rate of 3.85% - 4.65%.
| 5. | Trade and other receivables |
| | | September 30, 2024 | | | June 30, 2024 | |
| | | | | | | |
| Accounts receivable | | $ | 1,101,743 | | | $ | 966,150 | |
| Other receivables | | | 122,594 | | | | 323,293 | |
| GST/HST receivable | | | 2,749,952 | | | | - | |
| Credit loss allowance (1) | | | (174,226 | ) | | | (174,226 | ) |
| | | $ | 3,800,064 | | | $ | 1,115,217 | |
| (1) | The Company’s changes in credit loss allowance for the three months ended September 30, 2024 and 2023 are as follows: |
| | | Three months ended September 30 | |
| | | 2024 | | | 2023 | |
| | | | | | | |
| Credit loss allowance, beginning of the period | | $ | (174,226 | ) | | $ | (6,486,838 | ) |
| Recovery (recognition) of credit loss | | | - | | | | 1,195,012 | |
| Credit loss allowance, end of the period | | $ | (174,226 | ) | | $ | (5,291,826 | ) |
SOLARBANK CORPORATION
Notes to Condensed Consolidated Interim Financial Statements
For the three months ended September 30, 2024 and 2023
(Expressed in Canadian Dollars)
(Unaudited)
| 6. | Prepaid expenses and deposits |
| | | September 30, 2024 | | | June 30, 2024 | |
| | | | | | | |
| Interconnection deposits | | $ | 4,232 | | | $ | 4,291 | |
| Construction in progress deposits (1) | | | 608,677 | | | | 2,543,120 | |
| Security deposits | | | 27,035 | | | | 12,352 | |
| Prepaid rent (2) | | | 69,656 | | | | - | |
| Prepaid insurance | | | 479,169 | | | | 128,285 | |
| Prepaid marketing expenses (3) | | | - | | | | 341,825 | |
| Other prepaids and deposits | | | 213,399 | | | | 96,956 | |
| | | $ | 1,402,168 | | | $ | 3,126,829 | |
| (1) | Deposits related to prepayments made on the purchase of raw materials required for construction of EPC projects located in New York, USA. |
| (2) | As at September 30, 2024, the non-current portion of prepaid rent of $810,498 (2023 - $nil) is presented as other assets. |
| (3) | The Company hired investor relations and marketing consultant companies to increase the Company’s visibility in the market and to explore international markets. The balance is related to the payment made to these marketing consultant companies. |
SOLARBANK CORPORATION
Notes to Condensed Consolidated Interim Financial Statements
For the three months ended September 30, 2024 and 2023
(Expressed in Canadian Dollars)
(Unaudited)
| 7. | Property, Plant and Equipment |
| | | Computer equipment | | | Furniture and equipment | | | Vehicle | | | IPP facilities (1) | | | Royalty contract assets (2) | | | Total | |
Cost: | | | | | | | | | | | | | | | | | | | | | | | | |
| Balance, June 30, 2024 | | $ | 19,256 | | | | 57,553 | | | | 35,608 | | | | 3,578,267 | | | | - | | | $ | 3,690,684 | |
| Additions (dispositions) | | | - | | | | - | | | | - | | | | 36,405,337 | | | | 79,244 | | | | 36,484,581 | |
| Foreign currency impact | | | - | | | | - | | | | - | | | | (6,570 | ) | | | - | | | | (6,570 | ) |
| Balance, September 30, 2024 | | $ | 19,256 | | | | 57,553 | | | | 35,608 | | | | 39,977,034 | | | | 79,244 | | | $ | 40,168,695 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Accumulated amortization: | | | | | | | | | | | | | | | | | | | | | | | | |
| Balance, June 30, 2024 | | $ | 16,192 | | | | 44,830 | | | | 4,216 | | | | 170,523 | | | | - | | | $ | 235,761 | |
| Depreciation(3) | | | 402 | | | | 626 | | | | 1,544 | | | | 751,611 | | | | 1,522 | | | | 755,705 | |
| Foreign currency impact | | | - | | | | - | | | | - | | | | (338 | ) | | | - | | | | (338 | ) |
| Balance, September 30, 2024 | | $ | 16,594 | | | | 45,456 | | | | 5,760 | | | | 921,796 | | | | 1,522 | | | $ | 991,128 | |
| Net Book Value, September 30, 2024 | | $ | 2,662 | | | | 12,097 | | | | 29,848 | | | | 39,055,238 | | | | 77,722 | | | $ | 39,177,567 | |
| | | Computer equipment | | | Furniture and equipment | | | Vehicle | | | IPP facilities | | | Royalty contract assets (2) | | | Total | |
Cost: | | | | | | | | | | | | | | | | | | | | | | | | |
| Balance, June 30, 2023 | | $ | 19,256 | | | | 50,253 | | | | - | | | | 937,194 | | | | - | | | $ | 1,006,703 | |
| Additions (dispositions) | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | |
| Balance, September 30, 2023 | | $ | 19,256 | | | | 50,253 | | | | - | | | | 937,194 | | | | - | | | $ | 1,006,703 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Accumulated amortization: | | | | | | | | | | | | | | | | | | | | | | | | |
| Balance, June 30, 2023 | | $ | 13,876 | | | | 42,694 | | | | - | | | | - | | | | - | | | $ | 56,570 | |
| Depreciation | | | 706 | | | | 372 | | | | - | | | | 9,493 | | | | - | | | | 10,571 | |
| Foreign currency impact | | | - | | | | - | | | | - | | | | 78 | | | | - | | | | 78 | |
| Balance, September 30, 2023 | | $ | 14,582 | | | | 43,066 | | | | - | | | | 9,571 | | | | - | | | | 67,219 | |
| Net Book Value, September 30, 2023 | | $ | 4,674 | | | | 7,187 | | | | - | | | | 927,623 | | | | | | | $ | 939,484 | |
| (1) | Addition of IPP facilities for the three months ended September 30, 2024 relate to business acquisitions of Solar Flow-Through Funds Ltd. (Note 18). The IPP facilities held by OFIT GM and OFIT RT totaling $3,100,000 are part collateral for long-term loan guarantee (Note 16 (2)). |
| (2) | Addition of royalty contract asset for the three months ended September 30, 2024 relate to business acquisitions of Solar Flow-Through Funds Ltd. |
| (3) | Total depreciation expense of $753,133 for IPP facilities and royalty contract assets are recorded in cost of goods sold for the three months ended September 30, 2024 (2023- $9,493). The remaining $2,572 depreciation expense is recorded under operating expenses (2023- $1,078). |
SOLARBANK CORPORATION
Notes to Condensed Consolidated Interim Financial Statements
For the three months ended September 30, 2024 and 2023
(Expressed in Canadian Dollars)
(Unaudited)
As of September 30, 2024 and 2023, the Company’s unbilled revenue mostly consists of invoices not yet issued for EPC projects where revenue recognized through percentage of completion.
| | | Three months ended September | |
| | | 2024 | | | 2023 | |
| Beginning of the period | | $ | 666,748 | | | $ | 7,405,866 | |
| Amounts invoices included in the beginning balance | | | (666,738 | ) | | | (4,881,346 | ) |
| Net increase in unbilled revenue recognized during the year | | | 3,374,135 | | | | 6,512,725 | |
| Foreign currency impact | | | (16,016 | ) | | | 169,797 | |
| End of the period | | $ | 3,358,129 | | | $ | 9,207,041 | |
As of September 30, 2024 and 2023, the Company’s inventory is comprised of development costs for the solar projects.
| | | 2024 | | | 2023 | |
| Balance, June 30 | | | 6,530,650 | | | | 448,721 | |
| Additions: development costs | | | 2,173,040 | | | | 484,496 | |
| Minus: recognized as cost of goods sold upon revenue recognition | | | (195,241 | ) | | | (109,040 | ) |
| Minus: costs expensed due to project cancellation (1) | | | (3,068 | ) | | | (25,907 | ) |
| Foreign currency impact | | | (108,326 | ) | | | 10,632 | |
| Balance, September 30 | | $ | 8,397,055 | | | $ | 808,902 | |
| (1) | Inventory provision for the three months ending September 30: |
| | | 2024 | | | 2023 | |
| Balance, opening | | $ | (548,815 | ) | | | (47,664 | ) |
| Additions: cost expensed due to project cancellation | | | (3,068 | ) | | | (25,907 | ) |
| Foreign currency impact | | | 5,389 | | | | (1,217 | ) |
| Balance, closing | | $ | (546,494 | ) | | | (74,788 | ) |
SOLARBANK CORPORATION
Notes to Condensed Consolidated Interim Financial Statements
For the three months ended September 30, 2024 and 2023
(Expressed in Canadian Dollars)
(Unaudited)
Development projects are depreciated over the useful lives of the resulting assets once they become operational. The balance in development assets include costs incurred on self-owned projects. Detail of costs as at September 30, 2024 and 2023 are as follows:
| | | IPP facilities | | | Battery energy storage systems (1) | | | EV charge point systems (2) | | | Total | |
| | | | | | | | | | | | | |
| Balance, June 30, 2024 | | $ | 8,909,371 | | | | - | | | | - | | | $ | 8,909,371 | |
| Additions | | | 337,089 | | | | 16,321,698 | | | | 541,666 | | | | 17,200,453 | |
| Foreign currency impact | | | (122,376 | ) | | | - | | | | - | | | | (122,376 | ) |
| Balance, September 30, 2024 | | $ | 9,124,084 | | | | 16,321,698 | | | | 541,666 | | | $ | 25,987,448 | |
| | | | | | | | | | | | | | | | | |
| Balance, June 30, 2023 | | $ | 1,106,503 | | | | - | | | | - | | | $ | 1,106,503 | |
| Additions | | | 3,704,693 | | | | - | | | | - | | | | 3,704,693 | |
| Foreign currency impact | | | 23,400 | | | | - | | | | - | | | | 23,400 | |
| Balance, September 30, 2023 | | $ | 4,834,596 | | | | - | | | | - | | | $ | 4,834,596 | |
| (1) | Addition of Battery energy storage systems for the three months ended September 30, 2024 relate to business acquisitions of Solar Flow-Through Funds Ltd. (Note 18). |
| (2) | Addition of EV charge point systems for the three months ended September 30, 2024 relate to business acquisitions of Solar Flow-Through Funds Ltd. (Note 18). |
| 11. | Trade and other payables |
| | | September 30, 2024 | | | June 30, 2024 | |
| Accounts payable and accrued liabilities | | $ | 16,669,177 | | | $ | 2,996,308 | |
| Due to related party (Note 22) | | | 1,312,331 | | | | 124,125 | |
| GST/HST payable | | | 4,468,187 | | | | - | |
| Other payable (1) | | | 4,588,649 | | | | 1,569,828 | |
| | | $ | 27,038,344 | | | $ | 4,690,261 | |
| (1) | Balance includes $4,158,947 NYSERDA (New York State Energy Research and Development Authority) grants (June 30, 2024 - $1,097,452) to be paid to various customers for related projects sold in prior years. |
SOLARBANK CORPORATION
Notes to Condensed Consolidated Interim Financial Statements
For the three months ended September 30, 2024 and 2023
(Expressed in Canadian Dollars)
(Unaudited)
As of September 30, 2024 and 2023, the Company’s unearned revenue mostly consists of payments received for EPC projects not started yet.
| | | Three months ended September 30 | |
| | | 2024 | | | 2023 | |
| Beginning of the year | | $ | 4,600,491 | | | | 1,150,612 | |
| Recognition of revenue included in the beginning balance | | | (3,772,894 | ) | | | - | |
| Net increase in unearned revenue recognized during the year | | | 286,850 | | | | 1,606,283 | |
| Foreign currency impact | | | (7,532 | ) | | | - | |
| End of the year | | $ | 1,106,915 | | | | 2,756,895 | |
| 13. | Right-of-use assets and lease liabilities |
The Company commenced leasing its current office space in 2022 in Canada. The lease started on May 1, 2022, with a five-year lease term. The monthly lease payment is $4,697 starting from September 1, 2022, which will be adjusted on an annual basis. The right of use (“ROU”) and lease obligation were measured at the present value of the lease payment and discounted using an incremental borrowing rate of 10%. On December 1, 2023, the Company leased additional office space, which increased monthly rent to $8,510.
On November 1, 2023, the Company acquired shares of OFIT GM Inc. (“OFIT GM”) and OFIT RT Inc. (“OFIT RT”). The OFIT companies leased five properties where IPP facilities are located. The leases commenced during the period from August 28, 2017 to October 6, 2017, each with a 20 year lease term. Two leases are paid on a monthly basis and three leases are paid on a quarterly basis. The monthly lease payments are $502 to $2,456 respectively and quarterly lease payments are in the range of $1,250 to $8,125. The right of use asset and lease liabilities were treated as new assets and liabilities starting from acquisition date of November 1, 2023 in accordance to IFRS 3. The ROU and lease liabilities were measured at the present value of the lease payments and discounted using an incremental borrowing rate of 5.74%. The leases are part collateral for long-term loan guarantee (Note 16(2)).
On July 8, 2024, the Company acquired all of the shares of Solar Flow-Through Funds Ltd. (“SFF”) (Note 18). SFF leases 70 properties where IPP facilities are located. The leases started during the period from May 1, 2015 to December 15, 2020 with terms ending in the periods from May 2033 to December 2045. The right of use asset and lease liabilities were treated as new assets and liabilities starting from acquisition date of July 8, 2024 in accordance to IFRS 3. The ROU and lease liabilities were measured at the present value of the lease payments and discounted using an incremental borrowing rate of 5.69%.
SOLARBANK CORPORATION
Notes to Condensed Consolidated Interim Financial Statements
For the three months ended September 30, 2024 and 2023
(Expressed in Canadian Dollars)
(Unaudited)
| 13. | Right-of-use assets and lease liabilities (continued) |
The continuity of the right-of-use as of September 30, 2024 and 2023 is as follows:
| Right-of-use assets | | Office | | | IPP Facilities | | | Total | |
| Cost: | | | | | | | | | | | | |
| Balance, June 30, 2024 | | $ | 313,887 | | | | 946,943 | | | | 1,260,830 | |
| Addition | | | - | | | | 7,042,994 | | | | 7,042,994 | |
| Balance, September 30, 2024 | | $ | 313,887 | | | | 7,989,937 | | | | 8,303,824 | |
| | | | | | | | | | | | | |
| Accumulated Depreciation: | | | | | | | | | | | | |
| Balance, June 30, 2024 | | $ | 123,501 | | | | 52,201 | | | | 175,702 | |
| Depreciation (1) | | | 21,968 | | | | 158,164 | | | | 180,132 | |
| Balance, September 30, 2024 | | $ | 145,469 | | | | 210,365 | | | | 355,834 | |
| Net Book Value, September 30, 2024 | | $ | 168,418 | | | | 7,779,572 | | | | 7,947,990 | |
| Right-of-use assets | | Office | | | IPP Facilities | | | Total | |
| Cost: | | | | | | | | | | | | |
| Balance, June 30, 2023 | | $ | 197,719 | | | | - | | | | 197,719 | |
| Addition | | | - | | | | - | | | | - | |
| Balance, September 30, 2023 | | | 197,719 | | | | - | | | | 197,719 | |
| | | | | | | | | | | | | |
| Accumulated Depreciation: | | | | | | | | | | | | |
| Balance, June 30, 2023 | | $ | 53,232 | | | | - | | | | 53,232 | |
| Depreciation (1) | | | 11,407 | | | | - | | | | 11,407 | |
| Balance, September 30, 2023 | | $ | 64,639 | | | | - | | | | 64,639 | |
| Net Book Value, September 30, 2023 | | $ | 133,080 | | | | - | | | | 133,080 | |
| (1) | Depreciation expense of $158,164 for IPP facilities is recorded in cost of goods sold for the three months ended September 30, 2024 (2023 - $Nil). The remaining $21,968 depreciation expense is recorded under operating expenses (2023 - $11,407). |
The continuity of the lease liabilities as of September 30, 2024 and 2023 is as follows:
| Lease liabilities | | Office | | | IPP Facilities | | | Total | |
| Balance, June 30, 2024 | | $ | 229,676 | | | | 911,798 | | | | 1,141,474 | |
| Additions | | | - | | | | 7,042,994 | | | | 7,042,994 | |
| Payments | | | (26,737 | ) | | | (215,164 | ) | | | (241,901 | ) |
| Interest accretion | | | 5,577 | | | | 101,665 | | | | 107,242 | |
| Balance, September 30, 2024 | | $ | 208,516 | | | | 7,841,293 | | | | 8,049,809 | |
| Current | | | 100,839 | | | | 520,758 | | | | 621,597 | |
| Long term | | | 107,677 | | | | 7,320,535 | | | | 7,428,212 | |
| Balance, September 30, 2024 | | $ | 208,516 | | | | 7,841,293 | | | | 8,049,809 | |
SOLARBANK CORPORATION
Notes to Condensed Consolidated Interim Financial Statements
For the three months ended September 30, 2024 and 2023
(Expressed in Canadian Dollars)
(Unaudited)
| 13. | Right-of-use assets and lease liabilities (continued) |
| Lease liabilities | | Office | | | Total | |
| Balance, June 30, 2023 | | $ | 173,311 | | | | 173,311 | |
| Payments | | | (14,484 | ) | | | (14,484 | ) |
| Interest accretion | | | 4,252 | | | | 4,252 | |
| Balance, September 30, 2023 | | $ | 163,079 | | | | 163,079 | |
| Current | | | 47,203 | | | | 47,203 | |
| Long term | | | 115,876 | | | | 115,876 | |
| Net Book Value, September 30, 2023 | | $ | 163,079 | | | | 163,079 | |
The maturity analysis of the Company’s contractual undiscounted lease payments as of September 30, 2024 is as follows:
| 2025 | | $ | 734,730 | |
| 2026 | | | 999,724 | |
| 2027 | | | 898,009 | |
| 2028 | | | 877,439 | |
| 2028 onward | | | 7,642,291 | |
| Total | | $ | 11,152,193 | |
On June 20, 2024, the Company entered into a Construction Loan Agreement for the construction of the Geddes project (the “Geddes Construction Loan”). The Geddes Construction Loan is for a principal amount of up to USD $2,600,000, depending on the actual cost of the project.
The Geddes Construction Loan advancement amount shall accrue interest, which is to be added to the outstanding principal balance starting from the date of reception, at a variable rate per annum equal to the One Month CME Term SOFR (Secured Overnight Financing Rate) Reference Rate plus a margin of 4%. Upon receiving permission to operate the Geddes Project, the loan advancement shall convert into a 6-year long-term loan with a fixed interest rate to be determined upon the conversion.
As at September 30, 2024, the loan payable balance included principal payable of $1,234,373 (USD $914,418), accrued interest payable of $33,279 (USD $24,653) and legal retainer of $53,996 (USD $40,000). As at June 30, 2024, the loan payable balance included principal payable of $1,251,565 (USD $914,418), accrued interest payable of $3,571 (USD $2,609) and $54,748 (USD $40,000) legal retainer.
The Geddes Construction Loan is secured against the assets associated with the Geddes Project and the Company has provided a guarantee of completion and payment. As at September 30, 2024, the Geddes project has a total value of $9,124,084 (June 30, 2024 - $8,909,371) which was recorded as Development Asset.
SOLARBANK CORPORATION
Notes to Condensed Consolidated Interim Financial Statements
For the three months ended September 30, 2024 and 2023
(Expressed in Canadian Dollars)
(Unaudited)
| | | FIT contracts | | | BESS contracts | | | Total | |
| Cost: | | | | | | | | | | | | |
| Balance, June 30, 2024 | | $ | 2,110,000 | | | | - | | | $ | 2,110,000 | |
| Additions (1) | | | 29,320,877 | | | | 4,925,500 | | | | 34,246,377 | |
| Balance, September 30, 2024 | | $ | 31,430,877 | | | | 4,925,500 | | | | 36,356,377 | |
| | | | | | | | | | | | | |
| Accumulated amortization: | | | | | | | | | | | | |
| Balance, June 30, 2024 | | $ | 108,553 | | | | - | | | $ | 108,553 | |
| Amortization | | | 595,453 | | | | - | | | | 595,453 | |
| Balance, September 30, 2024 | | $ | 704,006 | | | | - | | | $ | 704,006 | |
| Net Book Value, September 30, 2024 | | $ | 30,726,871 | | | | 4,925,500 | | | $ | 35,652,371 | |
| (1) | Addition of FIT and BESS contracts for the three months ended September 30, 2024 is related to the business acquisitions of SFF (Note 18). |
Intangible asset acquired from OFIT GM and OFIT RT (on November 1, 2023) and SFF (on July 8, 2024). No comparable intangible assets transactions during the three months ended September 30, 2023. Total amortization expenses of $595,453 are recorded in cost of goods sold for the three months ended September 30, 2024 (2023- $Nil).
| | | September 30, 2024 | | | June 30, 2024 | |
| Highly Affected Sectors Credit Availability Program (1) | | $ | 731,481 | | | $ | 759,259 | |
| Long-term loans (2) | | | 55,531,840 | | | | 4,068,139 | |
| Total | | | 56,263,321 | | | | 4,827,398 | |
| Less: current portion | | | 5,525,871 | | | | 448,229 | |
| Long-term portion | | $ | 50,737,450 | | | $ | 4,379,169 | |
| (1) | In 2021, the Company received a Highly Affected Sectors Credit Availability Program (HASCAP) loan for a total of $1,000,000 at 4% annual from Bank of Montreal. The loan has a ten-year amortization period with interest payment only for the first year. Principal payments commenced in May 2022. During the three months ended September 30, 2024, the interest recorded and paid was $7,534 (2023 - $8,680). |
| | | |
| (2) | The Company assumed these loans from the acquisition of OFIT GM and OFIT RT (2 loans totalling $4,068,139) and SFF (51 loans totalling $49,323,661) (Note 18). |
OFIT GM and OFIT RT Loans
The OFIT GM and OFIT RT loans were originally obtained on December 19, 2017 for a total principal amount of $6,070,839 with a variable interest rate based on Three Month Banker’s Acceptance Rate plus 1.98% which OFIT GM and OFIT RT have entered into interest rate swap agreements on the same loan grant date to fix the annual interest rate at 4.75%. The loans will mature on December 19, 2029. The interests are payable quarterly and principal are payable semi-annually, both commenced on March 19, 2018.
During the three months ended September 30, 2024, the interest recorded and paid was $48,857.
Interest rate swaps are accounted for as derivatives assets (liabilities) and recorded at fair value on the consolidated statements of financial position with change in fair value recorded in profit or loss. For the three months ended September 30, 2024, the Company recorded fair value change loss of $130,651 in the statements of income and comprehensive income.
SOLARBANK CORPORATION
Notes to Condensed Consolidated Interim Financial Statements
For the three months ended September 30, 2024 and 2023
(Expressed in Canadian Dollars)
(Unaudited)
| 16. | Long-term debt (continued) |
The loans are guaranteed by Panasonic Corporation North America and collateralized by the solar projects owned by OFIT GM and OFIT RT, including related contracts such as FIT contracts, site leases and similar contracts.
SFF Loans
The Company assumed 51 term loans from SFF acquisition, which are secured by the underlying solar power system assets. The loans have interest payable quarterly with variable interest rates ranging from 1.56% plus Canadian Overnight Repo Rate Average (“CORRA”) to 3.34% plus CORRA and with fixed interest rates ranging from 4.45% to 6.06%. The remaining term range of the loans are 3 to 17 years maturing between 2026 and 2040.
During the three months ended September 30, 2024, the interest recorded and paid was $636,235.
Interest rate swaps are accounted for as derivatives assets or liabilities and recorded at fair value on the consolidated statements of financial position with change in fair value recorded in profit or loss. For the three months ended September 30, 2024, the Company recorded fair value change loss of $882,174 in the statements of income and comprehensive income.
Estimated principal repayments are as follows:
| 2025 | | $ | 4,442,600 | |
| 2026 | | | 5,727,874 | |
| 2027 | | | 5,785,141 | |
| 2028 | | | 8,829,344 | |
| 2028 onwards | | | 33,061,672 | |
| Total | | $ | 57,846,631 | |
On June 20, 2023 (the “acquisition date”) the Company acquired 67% membership interest in Solar Alliance DevCo, an entity which owns and operates certain solar facilities in the US under subsidiaries that are set up as tax equity structures to finance the capital cost of the solar facilities.
Amounts paid by the TEIs for their equity stakes are classified as debt on the consolidated statements of financial position and are measured at amortized cost using the effective interest rate (“EIR”) method. Amortized cost is affected by the allocation of ITCs (in tax equity assets), taxable income, and accelerated tax depreciation. Financing expenses represent the interest accretion using the EIR. The EIR of the tax equity was determined to be 9%, the loan value was $460,607 at acquisition date, with a maturity date (representing the expected flip point as estimated) of 2028 and the percentage of ownership between 99%, reflecting the allocation of taxable income or loss prior to the flip date. The corresponding tax equity asset acquired on acquisition date was $474,547.
Tax equity investors in US solar projects generally require sponsor guarantees as a condition to their investment. To support the tax equity investments, the Company executed guarantees indemnifying the tax equity investors against certain breaches of project level representations, warranties and covenants and other events. The Company believe these indemnifications cover matters which are substantially under its control and are unlikely to occur.
The Company recognized $3,863 related to ITC distribution as other income on the consolidated statements of income for the three months ended September 30, 2024 (2023: $12,793). $8,388 interest accretion was recognized for the three months ended September 30, 2024 (2023: $10,358)
SOLARBANK CORPORATION
Notes to Condensed Consolidated Interim Financial Statements
For the three months ended September 30, 2024 and 2023
(Expressed in Canadian Dollars)
(Unaudited)
Solar Flow-Through Funds Ltd
On March 20, 2024, the Company entered into a definitive agreement with SFF to acquire all of the issued and outstanding common shares of SFF through a plan of arrangement for an aggregate consideration of issuance of up to 5,859,561 common shares of SolarBank (“SolarBank Shares”) for an aggregate purchase price of up to $41.8 million. The number of SolarBank Shares was determined using a 90 trading day volume weighted average trading price as of the date of the Agreement which is equal to $7.14 (the” Agreement Date VWAP”).
The consideration for the SFF Transaction consisted of an upfront payment of approximately 3,575,632 SolarBank Shares and a contingent payment representing up to an additional 2,283,929 SolarBank Shares that will be issued in the form of contingent value rights (“CVRs”). The SolarBank Shares underlying the CVRs will be issued once the final contract pricing terms have been determined between SFF, the Ontario IESO and the major suppliers for the SFF BESS portfolio and the binding terms of the debt financing for the BESS portfolio have been agreed (the “CVR Conditions”). On satisfaction of the CVR Conditions, Evans & Evans, Inc. shall revalue the BESS portfolio and SolarBank shall then issue SolarBank Shares having an aggregate value that is equal to the lesser of (i) $16.31 million and (ii) the final valuation of the BESS portfolio determined by Evans & Evans, Inc. plus the sale proceeds of any portion of the BESS portfolio that may be sold, in either case divided by the Agreement Date VWAP. The maximum number of additional shares issued for the CVRs will be 2,283,929 SolarBank Shares.
For the period during July 8, 2024 – September 30, 2024, SFF contributed revenue of $3,708,752 and net loss of $721,743.
Had the acquisition occurred on July 1, 2024, management estimates that the consolidated revenue would have been $16,317,988 and net income would have been $335,338 for the three months ended September 30, 2024.
SOLARBANK CORPORATION
Notes to Condensed Consolidated Interim Financial Statements
For the three months ended September 30, 2024 and 2023
(Expressed in Canadian Dollars)
(Unaudited)
| 18. | Acquisitions (continued) |
The initial purchase price was provisionally allocated based on the Company’s estimated fair value of the identifiable assets acquired and the liabilities assumed on the acquisition date. The values assigned, including the related goodwill and deferred tax assets and liabilities, are therefore preliminary and subject to change. The allocation of the purchase consideration to the total fair value of net assets acquired is as follows:
| Preliminary Fair value of net identified assets acquired | | | | |
| Cash and cash equivalent | | | 9,886,679 | |
| Trade and other receivables | | | 3,906,143 | |
| Short-term investment | | | 639,990 | |
| Prepaid expenses and deposits | | | 683,597 | |
| Right of use assets | | | 7,042,994 | |
| Property, plant and equipment | | | 36,484,581 | |
| Development assets | | | 10,312,122 | |
| Intangible assets | | | 34,246,377 | |
| Other assets | | | 813,910 | |
| Derivative assets | | | 1,527,208 | |
| Accounts payable and accruals | | | (8,819,904 | ) |
| Long-term debt | | | (52,685,837 | ) |
| Lease obligations | | | (7,042,994 | ) |
| Deferred tax liabilities | | | (14,119,673 | ) |
| Due to related parties | | | (1,497,524 | ) |
| Subtotal identifiable net assets | | | 21,377,669 | |
| | | | | |
| Goodwill arising on acquisition (2) | | | 37,147,456 | |
| Non-controlling interest | | | (15,814,455 | ) |
| Total Net Assets | | | 42,710,670 | |
| | | | | |
| Common shares issued (1) | | | 28,640,812 | |
| Fair value CVR (3) | | | 5,922,000 | |
| Payable due to the Company | | | 1,364,374 | |
| Fair value of SFF shares owned prior to the acquisition(4) | | | 6,783,484 | |
| Total fair value of consideration | | | 42,710,670 | |
| (1) | Consideration paid in the Company’s common shares was valued at $8.01 per shared, which is the closing market value as at July 8, 2024. |
| (2) | The goodwill is attributable to the synergies expected to be achieved from integrating the Company into SFF IPP operations. |
| (3) | Additional shares for CVRs are to be issued to former SFF shareholders, now the Company’s shareholders, upon determination of final value. This balance is accrued under Due to related parties as at September 30, 2024. |
| (4) | Gain of $1,631,461 from increase in fair value of SFF shares owned by the Company prior to acquisition is recognized under Fair value change gain for the three months ended September 30, 2024. |
SOLARBANK CORPORATION
Notes to Condensed Consolidated Interim Financial Statements
For the three months ended September 30, 2024 and 2023
(Expressed in Canadian Dollars)
(Unaudited)
The Company as part of its operations carries financial instruments consisting of cash, trade and other receivables, unbilled revenue, derivative assets, investment, trade and other payables, loan payables, long-term debt, lease obligations, and other long-term liabilities.
The Company’s financial assets and liabilities carried at fair value are measured and recognized according to a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable inputs. The three levels of fair value hierarchy are as follows:
| ● | Level 1: Quoted prices in active markets for identical assets or liabilities. |
| | | |
| ● | Level 2: Inputs other than quoted prices that are observable for the asset or liability. |
| | | |
| ● | Level 3: Inputs for the asset or liability that are not based on observable market data. |
The Company has variable interest rate loans with interest rate swap to effectively hedge the floating rate term loans into fixed rate arrangements by receiving floating rate and paying fixed rate payments (Note 16(2)). The fair value of the interest rate swap is based on discounting estimate of future floating rate and fixed rate cash flows for the remaining term of the interest rate swap. The fair value estimate is subject to a credit risk adjustment that reflects the credit risk of the Company and of the counterparty. The fair value of the interest rate swap are determined using Level 2 inputs.
The carrying amounts of cash, short-term investments, trade and other receivables, unbilled revenue, trade and other payables and loan payable approximate their fair values due to the short-term maturities of these items. The carrying amounts of long term debt, lease liabilities and other long-term liabilities approximate their fair value as they are discounted at the current market rate of interest.
| (b) | Financial risk management: |
| (i) | Credit risk and economic dependence: |
Credit risk is the risk of financial loss associated with the counterparty’s inability to fulfill its payment obligations. The Company has no significant credit risk with its counterparties. The carrying amount of financial assets net of impairment, if any, represents the Company’s maximum exposure to credit risk.
The Company has assessed the creditworthiness of its trade and other receivables and amount determined the credit risk to be low. Receivables from projects are from reputable customers with past working relations with the Company. IPP revenues are due from local government utility with high creditworthiness. Cash and short-term investment have low credit risk as it is held by internationally recognized financial institutions.
The Company conducts business in Canada and United States and have subsidiaries operating in the same countries. The Company, and its subsidiaries, do not hold significant asset and liabilities denominated in foreign currencies. As a result, the Company has low currency risk.
SOLARBANK CORPORATION
Notes to Condensed Consolidated Interim Financial Statements
For the three months ended September 30, 2024 and 2023
(Expressed in Canadian Dollars)
(Unaudited)
| 19. | Financial instruments (continued) |
| (iii) | Concentration risk and economic dependence: |
The outstanding accounts receivable balance is relatively concentrated with a few large customers representing majority of the value. See table below showing a few customers who account for over 10% of total revenue as well as customers who account for over 10% percentage of outstanding Accounts Receivable. Outstanding accounts payable balance is relatively concentrated with a few large customers representing majority of the value. See table below showing a few vendors who account for over 10% of total purchases as well as vendors who account for over 10% of outstanding accounts payable.
Three months ended September 30, 2024 | | Revenue | | | % of Total Revenue | |
| Customer A | | $ | 9,359,888 | | | | 58 | % |
| Customer B | | $ | 1,787,498 | | | | 11 | % |
| September 30, 2023 | | Revenue | | | % of Total Revenue | |
| Customer A | | $ | 5,318,304 | | | | 69 | % |
| Customer C | | $ | 2,011,750 | | | | 27 | % |
| September 30, 2024 | | Account Receivable | | | % of Account Receivable | |
| Customer A | | $ | 915,063 | | | | 24 | % |
| Customer D | | $ | 498,388 | | | | 13 | % |
| June 30, 2024 | | Account Receivable | | | % of Account Receivable | |
| Customer F | | $ | 531,456 | | | | 48 | % |
SOLARBANK CORPORATION
Notes to Condensed Consolidated Interim Financial Statements
For the three months ended September 30, 2024 and 2023
(Expressed in Canadian Dollars)
(Unaudited)
| 19. | Financial instruments (continued) |
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company’s approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due by maintaining adequate reserves, banking facilities, and borrowing facilities. All of the Company’s financial liabilities are subject to normal trade terms.
The following are the remaining contractual obligations as at September 30, 2024
| | | Total | | | Less than one year | | | 1 to 3 years | | | 3 to 5 years | | | More than 5 years | |
| Long-Term Debt Obligations | | $ | 57,846,631 | | | $ | 4,442,600 | | | $ | 11,513,015 | | | $ | 17,548,096 | | | $ | 24,342,920 | |
| Operating Lease Obligations | | | 11,152,193 | | | | 734,730 | | | | 1,897,733 | | | | 1,754,878 | | | | 6,764,852 | |
| Loan payable | | | 1,321,648 | | | | 1,321,648 | | | | - | | | | - | | | | - | |
| Other Long-term liabilities | | | 361,336 | | | | 361,336 | | | | - | | | | - | | | | - | |
| Purchase Obligations | | | 1,687,757 | | | | 1,687,757 | | | | - | | | | - | | | | - | |
| Accounts Payable and Accrued Liabilities | | | 27,038,344 | | | | 27,038,344 | | | | - | | | | - | | | | - | |
| Total | | $ | 99,407,909 | | | $ | 35,586,415 | | | $ | 13,410,748 | | | $ | 19,302,974 | | | $ | 31,107,772 | |
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s long-term loan, obtained from acquisition of OFIT GM, OFIT RT and SFF, have a fixed rate which is achieved by entering into interest rate swap agreement.
The Company held the Geddes loan which is subject to interest rate risk due to variable rate charged (Note 14). A change of 100 basis points in interest rates would have increased or decreased interest amount (added to the loan principal balance) of $12,806 (June 30, 2024 - $13,100).
SOLARBANK CORPORATION
Notes to Condensed Consolidated Interim Financial Statements
For the three months ended September 30, 2024 and 2023
(Expressed in Canadian Dollars)
(Unaudited)
(a) Authorized
Unlimited number of common shares with no par value.
(b) Issued and outstanding share capital
On September 30, 2024, the Company had 30,821,707 common shares issued and outstanding (2023- 26,857,200). A summary of changes in share capital and contributed surplus is contained on the consolidated statements of changes in shareholders’ equity.
During the three months ended September 30, 2024, the Company issued the following shares:
| i. | On July 8, 2024, the Company closed the acquisition of SFF with payment of 3,575,632 SolarBank common shares (Note 18). |
| | | |
| ii. | On September 24, 2024, 55,000 broker warrants were exercised to purchase common shares at $0.75 per share. |
During the three months ended September 30, 2023, the Company issued the following shares:
| i. | On September 20, 2023, 55,000 broker warrants were exercised to purchase common shares at $0.75 per share. |
| | | |
| ii. | In September 2023, the Company sold a total of 2,200 Common Shares through at-the-market offerings at an average price of $10 per share for gross proceeds of $22,000. |
(c) Warrants
| | | Three months ended September 30 | |
| | | 2024 | | | 2023 | |
| Beginning of the period | | | 7,873,000 | | | | 7,983,000 | |
| Exercised | | | (55,000 | ) | | | (55,000 | ) |
| End of the period | | | 7,818,000 | | | | 7,928,000 | |
| Date granted | | Expiry | | Exercise price (CAD) | | | Balance outstanding and exercisable at September 30, 2024 | |
| 03-Oct-2022 | | 10-Jun-2027 | | $ | 0.10 | | | | 2,500,000 | |
| 01-Mar-2023 | | 01-Mar-2026 | | $ | 0.75 | | | | 318,000 | |
| 01-Mar-2023 | | 01-Mar-2028 | | $ | 0.50 | | | | 5,000,000 | |
| | | | | | | | | | 7,818,000 | |
| Weighted average exercise price | | | $ | 0.38 | |
| Weighted average remaining contractual life | | | | 3.11 years | |
SOLARBANK CORPORATION
Notes to Condensed Consolidated Interim Financial Statements
For the three months ended September 30, 2024 and 2023
(Expressed in Canadian Dollars)
(Unaudited)
| 20. | Share Capital (continued) |
(d) Stock Options
The Board of Directors has adopted the Share Compensation Plan on November 4, 2022. Under this plan, the aggregate number of common shares that may be reserved and available for grant and issuance pursuant to the exercise of options and settlement of RSUs, each under the Share Compensation Plan, shall not exceed 20% (in the aggregate) of the issued and outstanding Common Shares at the time of granting. The exercise price per common share for an option and RSU granted shall not be less than the market price. Every option and RSU shall have a term not exceeding and shall expire no later than 5 years after the date of grant.
Details of the stock option outstanding as at September 30, 2024 and 2023 are as follows:
| | | Three months ended | |
| | | September 30, 2024 | | | September 30, 2023 | |
| Beginning of the period | | | 2,759,000 | | | | 7,759,000 | |
| Granted | | | - | | | | - | |
| Forfeited | | | - | | | | - | |
| End of the period | | | 2,759,000 | | | | 7,759,000 | |
| Date granted | | Expiry | | Exercise price (CAD) | | | Outstanding number of options at September 30, 2024 | | | Exercisable number of options at September 30, 2024 | |
| 04-Nov-2022 | | 04-Nov-2027 | | $ | 0.75 | | | | 2,759,000 | | | | 1,379,500 | |
During the three months ended September 30, 2024, compensation expense related to stock options was $110,667 (2023 - $381,398)
(e) Restricted Stock Units
| | | Three months ended | |
| | | September 30, 2024 | | | September 30, 2023 | |
| Beginning and end of the period | | | 265,000 | | | | 265,000 | |
| Date granted | | Vesting Date | | Numbers outstanding and exercisable at September 30, 2024 | |
| 4-Nov-2022 | | 02-Aug-2023 | | | 250,000 | |
| 13-Mar-2023 | | 12-Mar-2024 | | | 7,500 | |
| 13-Mar-2023 | | 12-Mar-2025 | | | 7,500 | |
| | | | | | 265,000 | |
During the three months ended September 30, 2024, compensation expense related to RSU was $2,580 (2023 - $6,675)
SOLARBANK CORPORATION
Notes to Condensed Consolidated Interim Financial Statements
For the three months ended September 30, 2024 and 2023
(Expressed in Canadian Dollars)
(Unaudited)
| 21. | Non-Controlling Interest |
Summarized financial information for the Company’s subsidiaries that have non-controlling interests is set out below. The amounts are before intercompany eliminations.
| As at September 30, 2024 | | Current
assets | | | Non-current assets | | | Current liabilities | | | Non-current liabilities | | | Net assets
(liabilities) | | | Carrying amount of NCI | |
| | | | | | | | | | | | | | | | | | | |
| 2467264 Ontario Inc. | | $ | 3,235 | | | $ | - | | | $ | (928,788 | ) | | $ | - | | | $ | (925,553 | ) | | $ | 44,717 | |
| OFIT GM | | | 752,325 | | | | 4,351,855 | | | | (832,326 | ) | | | (4,027,504 | ) | | | 244,350 | | | | (1,749,227 | ) |
| OFIT RT | | | 233,554 | | | | 1,848,257 | | | | (139,637 | ) | | | (1,565,403 | ) | | | 376,771 | | | | (623,280 | ) |
| 2503072 Ontario Inc. | | | 255,321 | | | | 5,666,191 | | | | (377,385 | ) | | | (3,724,080 | ) | | | 1,820,046 | | | | (896,852 | ) |
| 2503225 Ontario Inc. | | | 1,064,593 | | | | 4,469,192 | | | | (696,752 | ) | | | (3,792,793 | ) | | | 1,044,241 | | | | (523,165 | ) |
| 2503903 Ontario Inc. | | | 171,519 | | | | - | | | | (219,929 | ) | | | (814,792 | ) | | | (863,202 | ) | | | 434,970 | |
| Northern Development Solar 2016 | | | 110,793 | | | | 1,472,217 | | | | (538,384 | ) | | | (1,119,144 | ) | | | (74,518 | ) | | | 37,334 | |
| Sunshine Solar Ontario 2016 Inc. | | | 73,819 | | | | - | | | | (157,107 | ) | | | (56,455 | ) | | | (139,742 | ) | | | 70,010 | |
| 2469780 Ontario Inc. | | | 102,458 | | | | 1,396,528 | | | | (395 | ) | | | (1,352,815 | ) | | | 145,777 | | | | (73,034 | ) |
| 2405372 Ontario Inc. | | | 26,693 | | | | 55,779 | | | | (42,391 | ) | | | (21,965 | ) | | | 18,116 | | | | (9,076 | ) |
| 2405402 Ontario Inc. | | | 121,886 | | | | 2,231,165 | | | | (696,972 | ) | | | (513,500 | ) | | | 1,142,579 | | | | (552,392 | ) |
| 2405514 Ontario Inc | | | 108,930 | | | | 4,415,184 | | | | (159,340 | ) | | | (2,126,670 | ) | | | 2,238,102 | | | | (1,121,289 | ) |
| 2405799 Ontario Inc. | | | 280,443 | | | | 1,484,418 | | | | (151,477 | ) | | | (1,849,901 | ) | | | (236,517 | ) | | | 118,495 | |
| 2467260 Ontario Inc. | | | 44,386 | | | | 35,110 | | | | - | | | | (88,839 | ) | | | (9,343 | ) | | | 4,681 | |
| Icarus Whitesand Solar Limited Partnership | | | 425,091 | | | | 3,665,936 | | | | (43,632 | ) | | | (2,551,594 | ) | | | 1,495,802 | | | | (220,678 | ) |
| 1000234763 Ontario Inc. | | | 1,154,495 | | | | 15,356,369 | | | | (135,159 | ) | | | (12,886,666 | ) | | | 3,489,040 | | | | (1,748,137 | ) |
| 1000234813 Ontario Inc. | | | 656,782 | | | | 7,055,560 | | | | (748,520 | ) | | | (6,042,831 | ) | | | 920,991 | | | | (461,505 | ) |
| SPN LP7 | | | 1,747,444 | | | | 10,138,665 | | | | (235,442 | ) | | | (5,916,867 | ) | | | 5,733,800 | | | | (2,872,637 | ) |
| 2387276 Ontario Inc. | | | 1,465,296 | | | | 9,853,253 | | | | (254,925 | ) | | | (7,262,030 | ) | | | 3,801,594 | | | | (1,904,599 | ) |
| 2387282 Ontario Inc. | | | 1,640,405 | | | | 17,205,393 | | | | (533,802 | ) | | | (11,352,673 | ) | | | 6,959,323 | | | | (3,489,627 | ) |
| 2387281 Ontario Inc. | | | 701,327 | | | | 3,942,852 | | | | (88,276 | ) | | | (3,007,303 | ) | | | 1,548,599 | | | | (775,848 | ) |
| 2387280 Ontario Inc. | | | 675,083 | | | | 2,916,290 | | | | (58,090 | ) | | | (2,513,197 | ) | | | 1,020,085 | | | | (766,184 | ) |
| 2391395 Ontario Inc. | | | 412,256 | | | | 2,150,339 | | | | (54,702 | ) | | | (1,515,348 | ) | | | 992,545 | | | | (497,265 | ) |
| | | $ | 12,228,134 | | | $ | 99,710,553 | | | $ | (7,093,431 | ) | | $ | (74,102,370 | ) | | $ | 30,742,886 | | | $ | (17,574,588 | ) |
| As at June 30, 2024 | | Current
assets | | | Non-current assets | | | Current liabilities | | | Non-current liabilities | | | Net assets
(liabilities) | | | Carrying amount of NCI | |
| | | | | | | | | | | | | | | | | | | |
| 2467264 Ontario Inc. | | $ | 2,343 | | | $ | - | | | $ | (927,790 | ) | | $ | - | | | $ | (925,447 | ) | | $ | 44,717 | |
| OFIT GM | | | 560,757 | | | | 4,526,687 | | | | (770,469 | ) | | | (4,039,128 | ) | | | 277,846 | | | | (1,758,919 | ) |
| OFIT RT | | | 159,990 | | | | 1,917,063 | | | | (98,215 | ) | | | (1,569,411 | ) | | | 409,428 | | | | (639,641 | ) |
| | | | 723,090 | | | | 6,443,750 | | | | (1,796,474 | ) | | | (5,608,539 | ) | | | (238,173 | ) | | | (2,353,842 | ) |
SOLARBANK CORPORATION
Notes to Condensed Consolidated Interim Financial Statements
For the three months ended September 30, 2024 and 2023
(Expressed in Canadian Dollars)
(Unaudited)
| 21. | Non-Controlling Interest (continued) |
| Three months ended September 30, 2024 | | Net loss and comprehensive loss | | | Allocated to NCI | |
| | | | | | | |
| 2467264 Ontario Inc. | | $ | (106 | ) | | $ | - | |
| OFIT GM | | | (33,498 | ) | | | (16,782 | ) |
| OFIT RT | | | (32,657 | ) | | | (16,361 | ) |
| 2503072 Ontario Inc. (1) | | | (103,529 | ) | | | (51,868 | ) |
| 2503225 Ontario Inc. (1) | | | (141,910 | ) | | | (71,097 | ) |
| 2503903 Ontario Inc. (1) | | | 81 | | | | 40 | |
| Northern Development Solar 2016 (1) | | | (92,967 | ) | | | (46,577 | ) |
| Sunshine Solar Ontario 2016 Inc. (1) | | | 193 | | | | 97 | |
| 2469780 Ontario Inc. (1) | | | (52,380 | ) | | | (26,243 | ) |
| 2405372 Ontario Inc. (1) | | | 141 | | | | 71 | |
| 2405402 Ontario Inc. (1) | | | (115,210 | ) | | | (57,720 | ) |
| 2405514 Ontario Inc. (1) | | | (123,240 | ) | | | (61,743 | ) |
| 2405799 Ontario Inc. (1) | | | (46,438 | ) | | | (23,266 | ) |
| 2467260 Ontario Inc. (1) | | | 47 | | | | 24 | |
| Icarus Whitesand Solar Limited Partnership (1) | | | (117,890 | ) | | | (17,683 | ) |
| 1000234763 Ontario Inc. (1) | | | (39,556 | ) | | | (19,778 | ) |
| 1000234813 Ontario Inc. (1) | | | (51,954 | ) | | | (25,977 | ) |
| SPN LP7 (1) | | | (258,226 | ) | | | (129,371 | ) |
| 2387276 Ontario Inc. (1) | | | (128,332 | ) | | | (64,294 | ) |
| 2387282 Ontario Inc. (1) | | | 187,796 | | | | 94,086 | |
| 2387281 Ontario Inc. (1) | | | (77,290 | ) | | | (38,722 | ) |
| 2387280 Ontario Inc. (1) | | | 2,240 | | | | 1,681 | |
| 2391395 Ontario Inc. (1) | | | (58,517 | ) | | | (29,317 | ) |
| | | $ | (1,283,202 | ) | | $ | (600,800 | ) |
| (1) | Entity acquired through SFF acquisition. Net income (loss) considered above is for the acquired period of July 8 to September 30, 2024. |
| Three months ended September 30, 2023 | | Net loss and comprehensive loss | | | Allocated to NCI | |
| | | | | | | |
| 2467264 Ontario Inc. | | $ | (8,506 | ) | | $ | - | |
| | | | (8,506 | ) | | | - | |
SOLARBANK CORPORATION
Notes to Condensed Consolidated Interim Financial Statements
For the three months ended September 30, 2024 and 2023
(Expressed in Canadian Dollars)
(Unaudited)
| 22. | Related Party Balances and Transactions |
As at September 30, 2024, included in trade and other payable was $1,312,331 (June 30, 2024- $124,125) due to directors and other members of key management personnel (Note 11).
As at September 30, 2024, included in Due to related parties balance was $5,922,000 relating to fair value of CVR (Note 18(3)).
Key management compensation
Key management personnel include those persons having authority and responsibility for planning, directing and controlling the activities of the Company as a whole. The Company has determined that key management personnel consists of members of the Company’s Board of Directors and corporate officers, including the Company’s Chief Executive Officer, Chief Financial Officer, Chief Operating Officer and Chief Administrative Officer.
The remuneration of directors and other members of key management personnel, for the three months ended September 30, 2024 and 2023 were as follows:
| | | 2024 | | | 2023 | |
| Short-term employee benefits | | $ | 703,227 | | | $ | 299,599 | |
| Share-based compensation | | $ | 72,160 | | | $ | 180,546 | |
Short-term employee benefits include consulting fees and salaries made to key management.
Transactions with related parties, are described above, were for services rendered to the Company in the normal course of operations and were measured based on the consideration established and agreed to by the related parties. Related party transactions are made without stated terms of repayment or interest. The balances with related parties are unsecured and due on demand.
SOLARBANK CORPORATION
Notes to Condensed Consolidated Interim Financial Statements
For the three months ended September 30, 2024 and 2023
(Expressed in Canadian Dollars)
(Unaudited)
The Company’s objectives in managing liquidity and capital are to safeguard the Company’s ability to continue as a going concern and to provide financial capacity to meet its strategic objectives. The capital structure of the Company consists of the following:
| | | September 30, 2024 | | | June 30, 2024 | |
| Long-term debt -non-current portion (Note 16) | | $ | 50,737,450 | | | | 4,379,169 | |
| Shareholders’ Equity | | $ | 63,401,476 | | | | 18,724,301 | |
The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the capital structure, the strategies employed by the Company may include the issuance or repayment of debt, dividend payments, issuance of equity, or sale of assets. The Company has determined it will have sufficient funds to meet its current operating and development obligations for at least 12 months from the reporting date.
Segmented information is reviewed by the Company’s chief decision maker to assess performance and allocate resources within the Company. The Company has one operating segment, principally being development and operation of solar photovoltaic power generation projects.
| (a) | Geographic Information |
The Company is currently operating development and construction of solar photovoltaic power generation projects in two principal geographical areas - Canada and United States. The revenues from external customers and non-current assets exclusive of financial instruments (i.e. investment in SFF and the derivative asset) by country for the three months ended September 30, 2024 and 2023 are as follows:
| | | Revenue from external customers | | | Non-current assets | |
| | | Three months ended September 30, | | | | |
| | | 2024 | | | 2023 | | | September 30, 2024 | | | June 30, 2024 | |
| Canada | | $ | 6,619,182 | | | | 336,311 | | | $ | 138,257,264 | | | | 6,528,325 | |
| United States | | | 9,386,139 | | | | 7,344,950 | | | | 9,946,065 | | | | 9,762,674 | |
| | | $ | 16,005,321 | | | | 7,681,261 | | | $ | 148,203,329 | | | | 16,290,999 | |
SOLARBANK CORPORATION
Notes to Condensed Consolidated Interim Financial Statements
For the three months ended September 30, 2024 and 2023
(Expressed in Canadian Dollars)
(Unaudited)
The income tax charge is a result of profits and withholding tax in two jurisdictions which are taxable and cannot be offset by accumulated tax benefits in other jurisdictions. Income tax expense is recognized based on management’s best estimate of the weighted average annual income tax rate expected for the full financial year. The estimated average annual tax rate used for the three months ended September 30, 2024 was 26.5% (June 30, 2024 - 26.5%).
The calculation of earnings per share for the three months ended September 30, 2024 and 2023 are as follows:
| | | September 30, 2024 | | | September 30, 2023 | |
| | | | | | | |
| Net income (loss) | | | 241,092 | | | | 2,038,968 | |
| | | | | | | | | |
| Basic weighted average number of shares outstanding | | | 30,459,369 | | | | 26,806,183 | |
| Dilution of securities | | | 10,068,155 | | | | 10,316,617 | |
| Diluted weighted average number of shares outstanding | | | 40,527,524 | | | | 37,122,800 | |
| | | | | | | | | |
| Earnings per share | | | | | | | | |
| Basic | | | 0.01 | | | | 0.08 | |
| Diluted | | | 0.01 | | | | 0.05 | |
