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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

 

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2024

 

OR

 

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ____ to ____

 

Commission File Number: 001-41395

 

BRIGHT GREEN CORPORATION

(Exact Name of Registrant as Specified in its Charter)

 

Delaware   83-4600841

(State or other jurisdiction of

incorporation or organization)

  

(I.R.S. Employer

Identification No.)

 

1033 George Hanosh Boulevard

Grants, NM

   87020
(Address of principal executive offices)   (Zip Code)

 

Registrant’s telephone number, including area code: (833) 658-1799

 

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

 

Securities registered pursuant to Section 12(b) of the Act: 

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
Common Stock, par value $0.0001 per share   BGXX   The Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer ☐ Accelerated filer ☐
       
Non-accelerated filer ☒ Smaller reporting company ☒
       
Emerging growth company ☒    

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

 

As of November 19, 2024, there were 191,166,318 shares of the registrant’s common stock outstanding. 

 

 

 

 

 

 

TABLE OF CONTENTS

 

    Page
PART I. FINANCIAL INFORMATION  
     
Item 1 Financial Statements (unaudited) 1
  Condensed Consolidated Balance Sheets as at September 30, 2024 (unaudited) and December 31, 2023 1
  Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited) for the three and nine months ended September 30, 2024 and September 30, 2023 2
  Condensed Consolidated Statements of Changes in Stockholders’ Equity (unaudited) for the three and nine months ended September 30, 2024 and September 30, 2023 3
  Condensed Consolidated Statements of Cash Flows (unaudited) for the nine months ended September 30, 2024 and September 30, 2023 5
  Notes to the Condensed Consolidated Financial Statements (unaudited) 6
Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations 28
Item 3 Quantitative and Qualitative Disclosures About Market Risk 32
Item 4 Controls and Procedures 32
     
PART II. OTHER INFORMATION  
     
Item 1 Legal Proceedings 33
Item 1A Risk Factors 33
Item 2 Unregistered Sales of Equity Securities 34
Item 3 Defaults Upon Senior Securities 34
Item 4 Mine Safety Disclosures 34
Item 5 Other Information 34
Item 6 Exhibits 34
     
Signatures 35

 

i

 

 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This Quarterly Report on Form 10-Q includes statements that express our opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results and therefore are, or may be deemed to be, “forward-looking statements.” All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q may be forward-looking statements. These forward-looking statements can generally be identified by the use of forward-looking terminology, including the terms “believes,” “estimates,” “continues,” “anticipates,” “expects,” “seeks,” “projects,” “intends,” “plans,” “may,” “will,” “would” or “should” or, in each case, their negative or other variations or comparable terminology. They appear in a number of places throughout this Quarterly Report on Form 10-Q, and include statements regarding our intentions, beliefs or current expectations concerning, among other things, our results of operations, financial condition, liquidity, prospects, growth, strategies, future acquisitions and the industry in which we operate. Such statements may include, but are not limited to, statements concerning the following:

 

  ● the initiation, design, cost, timing, progress and results of, and our expected ability to undertake certain activities and accomplish our goals;
  ● the likelihood or timing of any regulatory approval;
  ● our ability to successfully commercialize, and our expectations regarding commercial potential with respect to, our products;
  ● the rate and degree of market acceptance of our products;
  ● the size and growth potential of the markets for our products, and our ability to serve those markets;
  ● our ability to obtain and maintain intellectual property protection;
  ● interactions with regulatory authorities in the United States and foreign countries;
  ● our ability to attract and retain experienced and seasoned scientific and management professionals to lead the Company;
  ● the performance of our third-party suppliers and manufacturers, including our ability to scale-up manufacturing levels as necessary;
  ● our ability to attract collaborators with relevant development, regulatory and commercialization expertise;
  ● future activities to be undertaken by our strategic alliance partners, collaborators and other third parties;
  ● our ability to develop sales and marketing capabilities, whether alone or with potential future collaborators;
  ● our ability to avoid, settle or be victorious at costly litigation with shareholders, former executives or others, should these situations arise;
  ● our ability to obtain and deploy funding for our operations and to efficiently use our financial and other resources;
  ● our ability to establish trading of our securities on the best listing or quotation service available to us;
  ● our ability to continue as a going concern; and
  ● the accuracy of our estimates regarding future expenses, future revenues, capital requirements and need for additional financing.

 

By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. We believe that these risks and uncertainties include, but are not limited to, those described in the “Risk Factors” section of this Quarterly Report on Form 10-Q.

 

These factors should not be construed as exhaustive and should be read with the other cautionary statements in this Quarterly Report on Form 10-Q. These and other factors should be considered carefully, including those contained in our Annual Report on Form 10-K under “Risk Factors” for the year ended December 31, 2023, and readers should not place undue reliance on our forward-looking statements.

 

Although we base these forward-looking statements on assumptions that we believe are reasonable when made, we caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and industry developments may differ materially from statements made in or suggested by the forward-looking statements contained in this Quarterly Report on Form 10-Q. The matters summarized under “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere in this Quarterly Report on Form 10-Q could cause our actual results to differ significantly from those contained in our forward-looking statements. In addition, even if our results of operations, financial condition and liquidity, and industry developments are consistent with the forward-looking statements contained in this Quarterly Report on Form 10-Q, those results or developments may not be indicative of results or developments in subsequent periods.

 

In light of these risks and uncertainties, we caution you not to place undue reliance on these forward-looking statements. Any forward-looking statement that we make in this Quarterly Report on Form 10-Q speaks only as of the date of such statement, and we undertake no obligation to update any forward-looking statement or to publicly announce the results of any revision to any of those statements to reflect future events or developments, except as required by applicable law. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless specifically expressed as such, and should only be viewed as historical data.

 

ii

 

 

PART I. FINANCIAL INFORMATION

 

ITEM  1. FINANCIAL STATEMENTS (UNAUDITED)

 

BRIGHT GREEN CORPORATION

Condensed Consolidated Balance Sheets

As at September 30, 2024 and December 31, 2023

(Expressed in United States Dollars)

 

   September 30, 2024   December 31, 2023 
   (Unaudited)     
ASSETS          
Current assets          
Cash  $40,366   $10,059 
Prepaid expenses and other assets   11,891    258,230 
Total current assets   52,257    268,289 
           
Other investment held at fair value (Note 5)   -    726,343 
Property, plant, and equipment (Note 6)   15,903,703    16,407,415 
Intangible assets (Note 7)   9,010    1,000 
           
Total assets  $15,964,970   $17,403,047 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
Current liabilities          
Accounts payable (Note 11)  $5,377,859   $4,175,220 
Accrued liabilities   59,882    411,099 
Common stock payable for EB-5 program (Note 9)   800,000    - 
Due to others (Note 5)   -    1,650,000 
Related party short-term note payable (Note 11)   165,000    - 
Related party line of credit (LOC) note (Note 8 and 11)   640,315    - 
Total current liabilities   7,043,056    6,236,319 
           
Long-term liabilities          
Related party line of credit note (Notes 8 and 11)   -    201,783 
Total long-term liabilities   -    201,783 
           
Total liabilities   7,043,056    6,438,102 
           
STOCKHOLDERS’ EQUITY          
Preferred stock; $0.0001 par value; 10,000,000 shares authorized; no shares issued or outstanding as of September 30, 2024 and December 31, 2023, respectively (Note 9)   -    - 
Common stock; $0.0001 par value; 500,000,000 shares authorized; 191,166,318 and 184,758,818 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively (Note 9)   19,117    18,476 
Additional paid-in capital (Note 9)   59,603,574    58,149,938 
Accumulated deficit   (50,700,777)   (47,203,469)
Total stockholders’ equity   8,921,914    10,964,945 
           
Total liabilities and stockholders’ equity  $15,964,970   $17,403,047 
           
Going Concern and Basis of Presentation (Note 2)          
Contingencies (Note 12)          
Subsequent Events (Note 13)          

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

1

 

 

BRIGHT GREEN CORPORATION

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)

For the Three Months and Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 

   September 30, 2024   September 30, 2023   September 30, 2024   September 30, 2023 
   Three Months Ended   Nine Months Ended 
   September 30, 2024   September 30, 2023   September 30, 2024   September 30, 2023 
                 
Revenue  $-   $-   $-   $- 
                     
Expenses                    
                     
General and administrative expenses   966,395    1,650,655    4,080,093    6,933,033 
Depreciation   145,529    160,878    433,585    477,629 
Total operating expenses   1,111,924    1,811,533    4,513,678    7,410,662 
                     
Loss from operations  $(1,111,924)  $(1,811,533)  $(4,513,678)  $(7,410,662)
                     
Other income (expense)                    
                     
Other income (Note 9)   -    -    80,000    - 
Foreign currency transaction loss   (865)   -    (221)   (1,366)
Interest income   14    -    23    - 
Change in fair value of assets, net (Note 5)   -    -    (80,705)   - 
Gain on extinguishment of debt (Note 5)   8,684    -    1,017,273    - 
Total other income (expense)   7,833    -    1,016,370    (1,366)
                     
Loss before income taxes  $(1,104,091)  $(1,811,533)  $(3,497,308)  $(7,412,028)
                     
Income tax expense   -    -    -    - 
                     
Loss before equity in net losses of affiliate  $(1,104,091)  $(1,811,533)  $(3,497,308)  $(7,412,028)
                     
Equity in net losses of affiliate   -    (179,709)   -    (184,650)
                     
Net loss and comprehensive loss  $(1,104,091)  $(1,991,242)  $(3,497,308)  $(7,596,678)
                     
Weighted average common shares outstanding - basic and diluted   191,003,275    180,587,574    189,565,789    176,784,628 
                     
Net loss per common share - basic and diluted  $(0.01)  $(0.01)  $(0.02)  $(0.04)

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

2

 

 

BRIGHT GREEN CORPORATION

Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)

For the Three Months and Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 

   Shares   Amount   capital   deficit   equity 
   Three Months and Nine Months Ended September 30, 2024 
       Additional       Total 
   Common Stock   paid-in   Accumulated   stockholders’ 
   Shares   Amount   capital   deficit   equity 
                     
Balance at June 30, 2024   190,166,318   $19,017   $59,440,356   $(49,596,686)  $     9,862,687 
                       
Stock-based compensation (Note 10)   1,000,000    100    163,218    -    163,318 
Net loss   -    -    -    (1,104,091)   (1,104,091)
                          
Balance at September 30, 2024   191,166,318   $19,117   $59,603,574   $(50,700,777)  $8,921,914 
                          
Balance at December 31, 2023 (Audited)   184,758,818   $18,476   $58,149,938   $(47,203,469)  $10,964,945 
                         
Stock-based compensation (Note 10)   1,000,000    100    486,437    -    486,537 
Common stock issued in lieu of unpaid cash remuneration and bonus compensation (Notes 9 and 11)   2,420,000    242    425,678    -    425,920 
Common stock issued for services (Notes 9 and 11)   2,987,500    299    541,521    -    541,820 
Net loss   -    -    -    (3,497,308)   (3,497,308)
                          
Balance at September 30, 2024   191,166,318   $19,117   $59,603,574   $(50,700,777)  $8,921,914 

 

3

 

 

BRIGHT GREEN CORPORATION

Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) (continued)

For the Three Months and Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 

   Shares   Amount   capital   deficit   equity 
   Three Months and Nine Months Ended September 30, 2023 
       Additional       Total 
   Common Stock   paid-in   Accumulated   stockholders’ 
   Shares   Amount   capital   deficit   equity 
                     
Balance at June 30, 2023   179,483,020   $17,948   $52,984,109   $(39,681,257)  $      13,320,800 
                         
Common stock and warrants issued for a cashless conversion of related party LOC, net of issuance costs of $10,000 (Note 9)   2,827,960    283    3,609,506    -    3,609,789 
Common stock issued for services (Note 9)   1,572,838    157    673,096    -    673,253 
Net loss   -    -    -    (1,991,242)   (1,991,242)
                          
Balance at September 30, 2023   183,883,818   $18,388   $57,266,711   $(41,672,499)  $15,612,600 
                          
Balance at December 31, 2022 (Audited)   173,304,800   $17,329   $45,637,328   $(34,075,821)  $11,578,836 
                         
Common stock and warrants issued for cash in a private placement, net of issuance costs of $395,250 (Note 9)   3,684,210    368    3,104,382    -    3,104,750 
Warrants exercised for cash (Note 9)   200,000    20    209,980    -    210,000 
Common stock issued for cashless conversion from related party LOC for EB-5 program (Note 9)   22,005    2    879,998    -    880,000 
Common stock and warrants issued for a cashless conversion of related party LOC, net of issuance costs of $10,000 (Note 9)   2,827,960    283    3,609,506    -    3,609,789 
Common stock issued for cash for EB-5 program (Note 9)   22,005    2    879,998    -    880,000 
Common stock issued for services (Note 9)   3,822,838    384    2,945,519    -    2,945,903 
Net loss   -    -    -    (7,596,678)   (7,596,678)
                          
Balance at September 30, 2023   183,883,818   $18,388   $57,266,711   $(41,672,499)  $15,612,600 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

4

 

 

BRIGHT GREEN CORPORATION

Condensed Consolidated Statements of Cash Flows (Unaudited)

For the Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 

   September 30, 2024   September 30, 2023 
   Nine Months Ended 
   September 30, 2024   September 30, 2023 
         
CASH FLOWS FROM OPERATING ACTIVITIES          
           
Net loss  $(3,497,308)  $(7,596,678)
           
Adjustments to reconcile net cash (used in) provided by operating activities:          
Foreign currency transaction loss   221    

1,366

 
Equity in net losses of affiliate   -    184,650 
Change in fair value of assets, net   80,705    - 
Gain on extinguishment of debt   (1,017,273)   - 
Depreciation   433,585    477,629 
Stock-based compensation   1,028,357    2,945,903 
Changes in operating assets and liabilities:          
Prepaid expenses and other assets   106,721    (78,874)
Accounts payable   1,780,032    893,699 
Accrued liabilities   74,703    698,866 
Accrued interest   39,179    - 
Net cash used in operating activities   (971,078)   (2,473,439)
           
CASH FLOWS FROM INVESTING ACTIVITIES          
           
Purchase of intangible assets   (8,010)   - 
Purchase of property, plant, and equipment   (354,957)   (2,204,161)
Net cash used in investing activities   (362,967)   (2,204,161)
           
CASH FLOWS FROM FINANCING ACTIVITIES          
           
Proceeds from related party line of credit   564,352    200,000 
Payments to related party line of credit   (150,000)   - 
Proceeds from related party short-term note payable   150,000    - 
Proceeds from issuance of common stock   

-

    880,000 
Proceeds from issuance of common stock and warrants, issued in private placement, net of issuance costs   -    3,104,750 
Payments to issuance costs for issuance of common stock and warrants, issued in cashless conversion of related party line of credit   

-

    (10,000)
Proceeds from common stock payable for EB-5 program   800,000    - 
Proceeds from warrants exercised   -    210,000 
Net cash provided by financing activities   1,364,352    4,384,750 
           
NET INCREASE (DECREASE) IN CASH   30,307    (292,850)
CASH, BEGINNING OF PERIOD   10,059    414,574 
CASH, END OF PERIOD  $40,366   $121,724 
           
CASH PAID FOR          
Interest  $-   $- 
Taxes   $-   $- 
           
SUPPLEMENTAL NON-CASH INVESTING & FINANCING ACTIVITIES          
Transfer from due to related party to related party LOC  $-   $392,194 
Related party LOC in exchange for common stock for EB-5 program  $-   $(880,000)
Related party LOC in exchange for common stock and warrants  $-   $(3,619,789)
Related party payroll liability in exchange for common stock  $(425,920)  $- 
Adjustment to prepaid expenses and other assets for forfeited deposit in settlement of debt  $139,618   $- 
Adjustment to construction in progress for return of equipment in settlement of debt  $425,085   $- 
Adjustment to other investment held at fair value for return of shares in settlement of debt  $645,638   $- 
Settlement of accounts payable in exchange for other investment held at fair value  $(568,930)  $- 
Settlement of due to others in exchange for other investment held at fair value  $(1,650,000)  $

-

 
Conversion of RSU to common shares  $100   $- 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

5

 

 

BRIGHT GREEN CORPORATION

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months and Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 

1. Description of Business and Organization

 

Bright Green Corporation was incorporated on April 16, 2019, under the Delaware General Corporation Law. The Company’s principal executive office is located in Grants, New Mexico. The Company holds the land, greenhouse, and patents required in the growth, production, and research of medicinal plants. When used herein, the terms the “Company,” “our,” “us,” “we,” or “Bright Green” refers to Bright Green Corporation and its consolidated subsidiary, Regional Center Bright Green, LLC.

 

On May 17, 2022, the Company’s common stock commenced trading on Nasdaq under the symbol “BGXX.”

 

On February 1, 2023, the Company initiated a private placement offering of common stock, only to accredited or qualified institutional investors, in reliance upon Rule 506, Regulation D promulgated under the Securities Act, pursuant to the U.S. government’s EB-5 immigrant investor program (the “EB-5 Program”). Under the EB-5 Program as originally constituted, the Company may issue up to an aggregate of 12,609,152 shares of common stock at $39.99 per share. On March 29, 2024, the Company modified the program to authorize 20,000,000 shares to be sold at $2.00 per share. The offering allows for up to 50 investors to participate in the offering by making an $800,000 investment in exchange for 200,000 shares of common stock.

 

On May 21, 2023, the Company entered into a Securities Purchase Agreement with an accredited investor and existing stockholder of the Company for the sale by the Company of (i) 3,684,210 shares of the Company’s common stock, par value $0.0001 per share, and (ii) warrants to purchase up to an aggregate of 3,684,210 shares of the Company’s common stock, in a private placement offering. The combined purchase price of one share and accompanying warrant was $0.95. The shares and the warrants were sold and issued without registration under the Securities Act of 1933, in reliance on the exemptions provided by Section 4(a)(2) of the Securities Act as transactions not involving a public offering and Rule 506 of Regulation D promulgated under the Securities Act as sales to accredited investors, and in reliance on similar exemptions under applicable state laws.

 

On September 20, 2023, the Company formed Regional Center Bright Green, LLC (“RCBG”). RCBG is a wholly-owned subsidiary of the Company and is registered as a limited liability company in New Mexico. RCBG was created to assist foreign investors in obtaining permanent residency in the United States by investing in U.S. businesses, while adhering to the EB-5 Immigrant Investor Program guidelines. The subsidiary became operational on April 25, 2024.

 

On September 19, 2024, the Company was delisted from trading on Nasdaq and is currently trading on the OTC Markets under the symbol “BGXX.”

 

The Company is a start-up company as of September 30, 2024, and has no revenue.

 

6

 

 

BRIGHT GREEN CORPORATION

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months and Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 

2. Going Concern and Basis of Presentation

 

The accompanying unaudited condensed consolidated financial statements have been prepared by the Company in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. The information furnished herein reflects all adjustments, consisting only of normal recurring adjustments, which in the opinion of management, are necessary to fairly state the Company’s financial position, the results of its operations, and cashflows for the periods presented. Certain information and footnote disclosures normally present in annual financial statements prepared in accordance with U.S. GAAP were omitted pursuant to such rules and regulations.

 

The financial information contained in this report should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, which the Company filed on April 16, 2024. The results of operations for the nine months ended September 30, 2024, are not necessarily indicative of the results for the year ending December 31, 2024.

 

For the nine months ended September 30, 2024 and 2023, the Company had no revenue and incurred a net loss of $3,497,308 and $7,596,678, respectively. Net cash used in operations for the nine months ended September 30, 2024, and 2023 was $971,078 and $2,473,439, respectively. The Company has incurred recurring losses from operations, and as of September 30, 2024, had an accumulated deficit of $50,700,777 (December 31, 2023 – $47,203,469) and had a negative working capital of $6,990,799 (December 31, 2023 – $5,968,030).

 

The Company is in its initial stages of building facilities to grow, research, and distribute medical plants. The Company has historically financed its operations through the sale of equity securities and debt financing. The Company does not have sufficient working capital to pay its operating expenses for a period of at least 12 months from the date the condensed consolidated financial statements were authorized to be issued. Therefore, the Company’s continued existence depends on its ability to continue executing its operating plan and obtaining additional debt or equity financing. The Company has developed plans to raise funds and continues to pursue sources of funding that management believes, if successful, would be sufficient to support the Company’s operating plan.

 

During the nine months ended September 30, 2024, the Company raised $800,000 from the Company’s EB-5 Program. The Company also has drawn, inclusive of accrued interest, $640,315 from the Company’s $15 million related party line of credit and received $150,000 from a related party short-term note payable (Note 11). The funds from the related party short-term note payable were used to pay down the related party line of credit $150,000, leaving available $14.36 million to draw from that credit facility (Note 8). There is substantial doubt about the Company’s ability to continue as a going concern due to the necessity to generate positive cash flows from operations and/or obtain additional financing. There is no assurance that the Company will be able to generate positive cash flows from operations or obtain additional financing on terms acceptable to the Company, if at all.

 

7

 

 

BRIGHT GREEN CORPORATION

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months and Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 

2. Going Concern and Basis of Presentation (continued)

 

In addition, the Company’s current and future operations are subject to various risks and uncertainties, including but not limited to general economic conditions, competition, and regulatory matters. Accordingly, the Company’s operation plan is predicated on various assumptions including, but not limited to, the level of product demand, cost estimates, its ability to continue raising additional financing, and the state of the general economic environment in which the Company operates.

 

These risks and uncertainties may have a material adverse effect on the Company’s financial condition and operating results. Management has taken actions to address the Company’s liquidity needs, including managing expenses, developing pathways to revenue, and pursuing additional financing, such as the EB-5 Program announced on February 1, 2023, and modified on March 29, 2024. However, there can be no assurance that such actions will be sufficient to enable the Company to continue as a going concern. There can be no assurance that these assumptions will prove accurate in all material respects or that the Company will be able to successfully execute its operating plan.

 

The condensed consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. In addition, the Company does not have any short or long-term contractual purchases with suppliers for future purchases, capital expenditure commitments that cannot be canceled with minimal fees, noncancelable operating leases, or any commitment or contingency that would hinder management’s ability to scale down operations and management expenses until funding is raised.

 

The Company’s ability to continue as a going concern is dependent upon the outcome of the matters described above. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.

 

This disclosure is intended to inform users of the condensed consolidated financial statements about the Company’s current financial condition and its ability to continue as a going concern. The Company will continue to monitor its liquidity position and take appropriate actions as necessary to address any potential going concern issues.

 

3. Summary of Significant Accounting Policies

 

A. Basis of Measurement

 

The condensed consolidated financial statements of the Company have been prepared on a historical cost basis except as indicated otherwise.

 

8

 

 

BRIGHT GREEN CORPORATION

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months and Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 

3. Summary of Significant Accounting Policies (continued)

 

  B. Principles of Consolidation

 

The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Regional Center Bright Green, LLC. Intercompany transactions and balances have been eliminated upon consolidation.

 

C. Property, Plant, and Equipment

 

Property, plant, and equipment are stated at cost less accumulated depreciation. Expenditures for maintenance and repairs are charged to earnings as incurred; additions, renewals, and betterments are capitalized. When property, plant, and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation of property, plant, and equipment, except land, which is not depreciated, is provided using the declining balance method, or straight-line method, with estimated lives as follows:

  

Building and improvement - declining balance method  10 year life
Furniture and fixtures - straight-line method  3 year life

 

Construction in progress is not depreciated until the asset is placed in service.

 

D. Long-lived Assets

 

The Company applies the provisions of ASC Topic 360, Property, Plant, and Equipment, which addresses financial accounting and reporting for the impairment or disposal of long-lived assets. ASC Topic 360 requires that long-lived assets be reviewed annually for impairment whenever events or changes in circumstances indicate that the assets’ carrying amounts may not be recoverable; it further requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner, except that fair values are reduced for the cost of disposal.

 

E. Intangible Assets

 

The Company’s intangible assets consist of certain licenses and trademarks (Note 7). The licenses will be amortized over the term of each license. The trademarks are expected to contribute to cash flows indefinitely. The intangible assets with finite useful lives are reviewed for impairment when indicators of impairment are present, and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the long-lived assets.

 

9

 

 

BRIGHT GREEN CORPORATION

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months and Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 

3. Summary of Significant Accounting Policies (continued)

 

F. Fair Value of Financial Instruments

 

In accordance with ASC 820 (Topic 820, Fair Value Measurements and Disclosures), the Company uses a three-level hierarchy for fair value measurements of certain assets and liabilities for financial reporting purposes that distinguishes between market participant assumptions developed from market data obtained from outside sources (observable inputs) and our own assumptions about market participant assumptions developed from the best information available to us in the circumstances (unobservable inputs). The fair value hierarchy is divided into three levels based on the source of inputs as follows:

 

  ●

Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets;

 

  ●

Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability other than quoted prices, either directly or indirectly including inputs in markets that are not considered to be active; and

 

  ● Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement.

 

Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The carrying amounts of the Company’s cash, other assets, accounts payable, accrued liabilities, due to others, related party short-term note payable and related party line of credit note approximated their fair values as of September 30, 2024, and December 31, 2023, due to their short-term nature. The Company’s investment in Alterola Biotech, Inc. (“Alterola”) was also accounted for at fair value and recorded in “other investment held at fair value” in the condensed consolidated balance sheets. In accordance with the levels defined above, Level 1, the fair value of the Company’s Alterola investment was $nil as of September 30, 2024, and $726,343 as of December 31, 2023. See Note 5 for more information.

 

10

 

 


BRIGHT GREEN CORPORATION

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months and Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 

3. Summary of Significant Accounting Policies (continued)

 

G. Other Investment Held at Fair Value

 

In accordance with ASC 825, the Company records its investment at fair value under the “other investment held at fair value” in the Company’s condensed consolidated balance sheets, and changes in fair value are recognized as “change in fair value of assets, net,” a component of “other expense (expense)” in the condensed consolidated statements of operations and comprehensive loss.

 

The Company’s Alterola investment is accounted for at fair value under ASC 321 and recorded in “other investment held at fair value” on the condensed consolidated balance sheets, and changes in fair value are recognized as “change in fair value of assets, net,” a component of “other income (expense)” in the condensed consolidated statements of operations and comprehensive loss (Note 5).

 

H. Advertising Costs

 

Advertising costs are charged to operations when incurred. Advertising costs totaled $39,237 and $33,596 for the nine months ended September 30, 2024 and 2023, respectively.

 

I. Income Taxes

 

The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes. ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

 

Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. The Company has not changed its methodology for estimating the valuation allowance. A change in valuation allowance affects earnings in the period the adjustments are made and could be significant due to the large valuation allowance currently established.

 

Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely to be realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Company has no material uncertain tax positions for any of the reporting periods presented.

 

11

 

 


BRIGHT GREEN CORPORATION

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months and Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 

3. Summary of Significant Accounting Policies (continued)

 

J. Basic and Diluted Earnings (Loss) Per Share

 

Basic earnings (loss) per share is calculated using the weighted average number of common shares outstanding during the period. The dilutive effect on earnings (loss) per share is calculated, presuming the exercise of outstanding stock options, warrants, and similar instruments. It assumes that the proceeds of such exercise would be used to repurchase common shares at the average market price during the period.

 

Due to the net loss incurred, potentially dilutive instruments would be anti-dilutive. Accordingly, diluted loss per share is the same as basic loss per share for all periods presented.

 

K. Segment Reporting

 

ASC 280-10, “Disclosures about Segments of an Enterprise and Related Information”, establishes standards for how public business enterprises report information about operating segments in the Company’s condensed consolidated financial statements. Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision-maker in deciding how to allocate resources and in assessing performance. Significantly all of the assets of the Company are located in the United States of America and the Company is a start-up company as at September 30, 2024 and 2023 and has no revenue. The Company’s reportable segments and operating segments will include its growth, production, and research of medicinal plants operations.

 

L. Use of Estimates

 

The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions. The Company bases its estimates and assumptions on current facts, historical experience, various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities, and the accrual of costs and expenses that are not readily apparent from other sources. This applies in particular to valuation allowance for deferred tax assets, valuation of warrants, stock options, and stock-based compensation, going concern assessment, and assignment of the useful lives of property, plant, and equipment. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

 

12

 

 


BRIGHT GREEN CORPORATION

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months and Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 

3. Summary of Significant Accounting Policies (continued)

 

M. Stock-Based Compensation

 

The Company accounts for stock-based payments in accordance with the provision of ASC 718, which requires that all stock-based payments issued to acquire goods or services, including grants of employee stock options, be recognized in the condensed consolidated statements of operations and comprehensive loss based on their fair values, net of estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Compensation expense related to stock-based awards is recognized over the requisite service period, which is generally the vesting period.

 

The Company accounts for stock-based compensation awards issued to non-employees for services, as prescribed by ASC 718-10, at either the fair value of the services rendered or the instruments issued in exchange for such services, whichever is more readily determinable, using the guidelines in ASC 505-50. The Company issues compensatory shares for services including, but not limited to, executive management, management, accounting, operations, corporate communication, and financial and administrative consulting services.

 

N. Warrants

 

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB, ASC 480 and ASC 815. The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each condensed consolidated balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the condensed consolidated statements of operations and comprehensive loss.

 

13

 

 

BRIGHT GREEN CORPORATION

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months and Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 

3. Summary of Significant Accounting Policies (continued)

 

O. Recently Adopted Accounting Standards

 

In October 2023, the FASB issued ASU No. 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative. The amendments in this update modify the disclosure or presentation requirements of a variety of topics in the codification. Certain amendments represent clarifications to or technical corrections of the current requirements. Each amendment in the ASU will only become effective if the SEC removes the related disclosure or presentation requirement from its existing regulations by June 30, 2027. The Company is currently assessing the impact this standard will have on the Company’s future condensed consolidated financial statements.

 

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments in ASU 2023-07 are intended to enhance disclosures for significant segment expenses for all public entities required to report segment information in accordance with ASC 280. ASC 280 requires a public entity to report for each reportable segment a measure of segment profit or loss that its chief operating decision maker (“CODM”) uses to assess segment performance and to make decisions about resource allocations. The amendments in ASU 2023-07 improve financial reporting by requiring disclosure of incremental segment information on an annual and interim basis for all public entities to enable investors to develop more useful financial analyses. Currently, Topic 280 requires that a public entity disclose certain information about its reportable segments. For example, a public entity is required to report a measure of segment profit or loss that the CODM uses to assess segment performance and make decisions about allocating resources. ASC 280 also requires other specified segment items and amounts, such as depreciation, amortization, and depletion expense, to be disclosed under certain circumstances. The amendments in ASU 2023-07 do not change or remove those disclosure requirements. The amendments in ASU 2023-07 also do not change how a public entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments. The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. A public entity should apply the amendments in ASU 2023-07 retrospectively to all prior periods presented in the financial statements. The Company is currently assessing the impact this standard will have on the Company’s future condensed consolidated financial statements.

 

14

 

 

BRIGHT GREEN CORPORATION

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months and Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 

3. Summary of Significant Accounting Policies (continued)

 

P. Recently Issued but Not Adopted Accounting Standards (continued)

 

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in ASU 2023-09 are intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in ASU 2023-09 require annual disclosures of specific categories in the rate reconciliation, additional information for reconciling items that meet a quantitative threshold, and a disaggregation of income taxes paid, net of refunds. The amendments in ASU 2023-09 also eliminate certain existing disclosure requirements related to uncertain tax positions and unrecognized deferred tax liabilities. The amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The amendments in ASU 2023-09 should be applied prospectively. The Company is currently assessing the impact this standard will have on the Company’s future condensed consolidated financial statements.

 

Management does not believe that other recently issued, but not yet effective, accounting standards could have a material effect on the Company’s condensed consolidated financial statements. As new accounting pronouncements are issued, the Company will adopt those that are applicable under the circumstances.

 

4. Concentration of Credit Risk

 

Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash deposits. Accounts at each institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. The Company had $nil in excess of the FDIC insured limit at September 30, 2024 and December 31, 2023.

 

5. Other Investment Held at Fair Value

 

The Company’s Alterola investment was accounted for at fair value under ASC 321 and presented as “other investment held at fair value” on the condensed consolidated balance sheets. Any changes in fair value of the Company’s Alterola investment were recorded as a change in fair value of assets in its condensed consolidated statements of operations and comprehensive loss. Based on quoted market prices the fair value of the Company’s Alterola investment was $645,638 prior to signing a Settlement and Release Agreement with United Science, LLC (United) and Alterola on March 13, 2024. For the nine months ended September 30, 2024, the Company recorded an $80,705 loss to Change in fair value of assets, net.

 

As part of the Settlement and Release Agreement: 1) a deposit made to United in the amount of approximately $1,100,000 was forfeited; 2) leased equipment was returned to United; 3) 118,535,168 shares of common stock of Alterola were transferred to United in lieu of payment of outstanding invoices totaling approximately $568,000; and 4) 83,226,814 shares of common stock of Alterola were returned to the three shareholders (Equipped4 Holdings Limited (“Equipped”), Phytotherapeutix Holdings Ltd. (“Phyto”), and TPR Global Limited (“TPR”)) who had initially sold the shares to the Company in exchange for settlement of the $1,650,000 remaining balance for the Alterola investment. Equipped, Phyto, and TPR each received approximately 27,742,271 shares of common stock of Alterola. For the nine months ended September 30, 2024, the Company recognized a $1,008,589 gain on extinguishment of debt, as a result of the Settlement and Release Agreement.

 

15

 

 

BRIGHT GREEN CORPORATION

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months and Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 

5. Other Investment Held at Fair Value (continued)

 

At September 30, 2024 and December 31, 2023, the other investment held at fair value was $nil and $726,343, respectively.

 

6. Property, Plant, and Equipment

 

The Company owns an expansive 22-acre modern Dutch “Venlo style” glass greenhouse situated on 70 acres in Grants, New Mexico. It is being retrofitted for growing, processing and distribution of medicinal plants, including marijuana, for medical researchers licensed by the Drug Enforcement Administration.

 

Property, plant, and equipment at September 30, 2024 and December 31, 2023 consisted of the following:

 

   September 30, 2024   December 31, 2023 
Furniture and fixtures  $88,690   $88,690 
Land   260,000    260,000 
Construction in progress   10,565,740    10,635,866 
Building and improvements   8,883,851    8,883,851 
Property, plant and equipment gross   19,798,281    19,868,407 
Accumulated depreciation   (3,894,578)   (3,460,992)
Net property, plant, and equipment  $15,903,703   $16,407,415 

 

The amount of interest expense capitalized and included in construction in progress was $39,179 and $223,271 during the periods ended September 30, 2024 and December 31, 2023, respectively (Notes 8 and 11).

 

Since 2020, the Company has had the rights to two land purchase options:

 

-A Real Estate Option Agreement dated October 5, 2020, and expiring on December 31, 2021, for $1,500 monthly payments up until June 30, 2021, and $1,750 monthly payments from July 1, 2021 to December 31, 2021, with a one-year extension starting on January 1, 2022 for $2,000 monthly payments, with the option to purchase 330 acres for $5,000 per acre.

 

-A Real Estate Option Agreement dated October 21, 2020, and expiring on December 31, 2021, for $1,000 monthly payments, with a one-year extension starting on January 1, 2022 for $1,500 monthly payments, with the option to purchase 175 acres for $5,000 per acre.

 

In 2022, the Company notified the two landowners of the Company’s intention to acquire the real estate despite the expiration of the options. The Company is in the process of negotiating final terms of the two acquisitions and intends on closing the acquisitions upon obtaining sufficient financing.

 

16

 

 


BRIGHT GREEN CORPORATION

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months and Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 

6. Property, Plant, and Equipment (continued)

 

As of September 30, 2024, the acquisitions have not been completed.

 

7. Intangible Assets

 

Intangible assets at September 30, 2024 and December 31, 2023 consisted of the following:

  

   September 30, 2024   December 31, 2023 
Licenses  $1,000   $1,000 
Trademarks   8,010    - 
Intangible assets gross   9,010    1,000 
Accumulated amortization   -    - 
Net intangible assets  $9,010   $1,000 

 

8. Related Party Line of Credit Note

 

On June 5, 2022, the Company and LDS Capital LLC (“Lender”), whose managing member is a member of the Company’s Board of Directors (the “Board”), entered into an unsecured line of credit in the form of a note (the “June Note”). The June Note provides that the Company may borrow up to $5.0 million, including an initial loan of $3.0 million, through June 4, 2025 (the “June Note Maturity Date”) from Lender. Prior to the June Note Maturity Date, the Company may borrow up to an additional $2.0 million under the June Note, at Lender’s sole discretion, and subject to the Company’s request of such additional funds from Lender (each loan furnished under the June Note individually, a “Loan,” and collectively, the “Loans”). The Company has the right, but not the obligation, to prepay any Loan, in whole or in part, prior to the June Note Maturity Date. Interest on the unpaid principal amount of any Loan accrues through the earlier of the June Note Maturity Date or the date of prepayment on such Loan, at a rate of 2% per annum plus the Prime Rate (the rate of interest per annum announced from time to time by JP Morgan Chase Bank as its prime rate). If the principal and interest, if any, of any Loan is not paid in full on the June Note Maturity Date, additional penalty interest will accrue on such Loan in the amount of 2% per annum. The Company amended the line of credit on November 14, 2022, to increase the capacity by $10 million. On January 31, 2023, LDS Capital LLC assigned the note to its sole member, Lynn Stockwell, who is the Company’s Chairwoman and majority shareholder.

 

17

 

 

BRIGHT GREEN CORPORATION

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months and Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 

8. Related Party Line of Credit Note (continued)

 

August 2024 Amendment

 

On August 19, 2024, the board of directors of the Company approved an amendment and restatement to the June Note pursuant to which, among other things, upon the Lender making a new advance in the principal amount of at least $3,500,000 (the “August Note”). Under the terms of the August Note all obligations due under the note shall be secured by (i) a first lien mortgage on the Company’s fee interest in the real property and improvements thereon, including, without limitation, the land, buildings, fixtures, equipment and machinery located at 1033 George Hanosh Blvd, Grants, NM 87020 (the “Collateralized Property”) and a first priority assignment of leases and rents, (ii) a first priority security interest in all accounts receivable of Company, (iii) an assignment of all contracts, licenses, permits, plans, specifications and other documentation with respect to the Collateralized Property, and (iv) such other collateral as is customary for a loan of this type, including additional real property if the acquisition of such property occurs while this note is outstanding.

 

The August Note also provides for a conversion feature pursuant to which Lender may, at her discretion, convert the outstanding principal and interest balance of the Secured Note into (i) shares of the Company’s Common Stock at a price of $1.15 per share (the “Shares”) and (ii) warrants at a price of $0.13 per warrant, which warrants shall be exercisable into shares of the Company’s Common Stock at an exercise price of $3.00 per share (the “August Warrant Shares”).

 

Additionally, in connection with the entry into the August Note, the Company and the Lender entered into an amendment to the warrants issued to Lender in connection with an September 1, 2023 conversion of $3,619,789 balance on the Note whereby warrants representing a conversion of outstanding principal at $0.13 per warrant to purchase up to 2,827,960 shares of Common Stock at a price of $3.00 per share were issued to Lender. The amendment modified the expiration date of the warrants to be the earlier of (i) the date that is 45 days after the date on which the closing price of the Company’s Common Stock equals or exceeds $3.00 per share, and (ii) August 31, 2027.

 

The new advance in the principal amount of at least $3,500,000 was not funded by the Lender and the Note was further amended in September 2024.

 

September 2024 Amendment

 

On September 16, 2024, the Company and Lynn Stockwell entered into a Secured Amended and Restated Line of Credit Note, amending and restating the terms of the original note entered into on November 14, 2022, which was originally amended and restated August 19, 2024 (as amended and restated, the “September Note”).

 

The September Note reduced the new advance in principal under the August Note from $3,500,000 to $2,500,000.

 

The September Note also modified the conversion feature of the August Note. Under the September Note, at Lender’s discretion, the Lender may convert up to $4 million of the outstanding principal and interest balance of the Note into shares of the Company’s newly designated Series A Preferred Stock, par value $0.0001 (the “Series A Preferred Stock”) at a conversion price of $0.40 per share. Each share of Series A Preferred Stock, subject to the Stockholder Approval, shall be convertible at the election of the Lender (or automatically if the balance is not repaid by December 31, 2024), into 14 shares of the Company’s common stock, par value $0.0001 per share. Each share of Series A Preferred Stock is generally entitled to one vote per share.

 

As of November 19, 2024, the $2,500,000 has not been funded.

 

18

 

 

BRIGHT GREEN CORPORATION

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months and Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 

8. Related Party Line of Credit Note (continued)

 

As of September 30, 2024, the Lender has funded the Company $6,547,603 (December 31, 2023 – $5,983,250), with the Company paying back $6,260,855 (December 31, 2023 – $6,110,855) of those funds, which includes $327,605 in interest. As of September 30, 2024, there was accrued interest of $25,963 (December 31, 2023 – $1,783). The funds have been used for the construction in progress, and during the nine months ended September 30, 2024, interest expense of $24,179 (December 31, 2023 – $223,271) has been capitalized (Note 6).

 

9. Stockholders’ Equity

 

The Company has authorized 500,000,000 shares of $0.0001 par value common stock and 10,000,000 shares of $0.0001 par value preferred stock. As of September 30, 2024 and December 31, 2023, there were 191,166,318 and 184,758,818, respectively, of shares of common stock issued and outstanding. The Company has not issued any shares of preferred stock to date.

 

During the nine months ended September 30, 2024, the Company issued the following:

 

-450,000 shares of common stock for services rendered, at a fair value of $0.2116 per share, to four consultants of the Company, in January 2024;

 

-2,537,500 shares of common stock for services rendered, at a fair value of $0.1760 per share, to the Company’s former Executive Chairman, in February 2024;

 

-2,420,000 shares of common stock at a fair value of $0.1760 per share to the Company’s former Executive Chairman, in February 2024, in lieu of unpaid cash remuneration and bonus compensation during his tenure with the Company; and

 

-1,000,000 shares of common stock issued to the Company’s Chief Executive Officer, in July 2024, for redemption of 1,000,000 vested RSUs.

 

During the nine months ended September 30, 2023, the Company issued the following:

 

-200,000 warrants exercised in exchange for 200,000 shares of common stock issued for cash at $1.05 per share, to one accredited investor in February 2023;

 

-22,005 shares of common stock issued at $39.99 per share, to a member of the Board in February 2023, through a cashless conversion; the related party line of credit note was paid down $880,000 in exchange for an $880,000 investment, pursuant to the Company’s EB-5 Program;

 

19

 

 

BRIGHT GREEN CORPORATION

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months and Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 

9. Stockholders’ Equity (continued)

 

-22,005 shares of common stock issued at $39.99 per share, to one accredited investor in March 2023, pursuant to the Company’s EB-5 Program;

 

-875,000 shares of common stock for services rendered, at a fair value of $0.9416 per share, to the Company’s former Executive Chairman, in March 2023;

 

-500,000 shares of common stock for services rendered, at a fair value of $1.13 per share, to the Company’s former Chief Executive Officer, in May 2023;

 

-3,684,210 shares of common stock and warrants to purchase up to an aggregate of 3,684,210 shares of common stock, at a combined purchase price of $0.95 per share and accompanying warrant, in a private placement offering, in May 2023 (the “May 2023 Private Placement”);

 

-875,000 shares of common stock for services rendered, at a fair value of $1.01 per share, to the Company’s former Executive Chairman, in June 2023;

 

-137,838 shares of common stock for services rendered, at a fair value of $0.74 per share, to a consultant of the Company, in July 2023;

 

-2,827,960 shares of common stock and warrants to purchase up to an aggregate of 2,827,960 shares of common stock at an exercise price of $3.00 per share, issued at a combined price of $1.28 per share and accompanying warrant, to a member of the Board, through a cashless conversion; the related party line of credit note was paid in full $3,619,789 in exchange for a $3,619,789 investment, in September 2023;

 

-60,000 shares of common stock for services rendered, at a fair value of $0.4015 per share, to a consultant of the Company, in September 2023;

 

-500,000 shares of common stock for services rendered, at a fair value of $0.4015 per share, to the Company’s Chief Financial Officer, in September 2023; and

 

-875,000 shares of common stock for services rendered, at a fair value of $0.3959 per share, to the Company’s Executive Chairman, in September 2023.

 

Common stock payable for EB-5 program

 

During the nine months ended September 30, 2024 and December 31, 2023, the Company recorded $800,000 and $nil, respectively, of common stock payable related to common stock to be issued upon receipt of signed agreement, to one accredited investor pursuant to the Company’s EB-5 program. The common stock payable for the EB-5 Program comprised 400,000 shares to be issued at a purchase price of $2.00 per share, for gross cash proceeds received of $880,000, including administrative fee income of $80,000.

 

20

 

 

BRIGHT GREEN CORPORATION

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months and Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 

9. Stockholders’ Equity (continued)

 

Private Placement Offerings

 

September 2022 Private Placement

 

On September 7, 2022, the Company entered into a Securities Purchase Agreement with investors for the sale by the Company of 9,523,810 shares of common stock and warrants to purchase up to an aggregate of 9,523,810 shares of common stock. The combined purchase price of one share and the accompanying warrant (“September 2022 Warrants”) was $1.05. Subject to certain ownership limitations, the September 2022 Warrants are exercisable immediately after issuance at an exercise price equal to $1.05 per share of Common Stock, subject to adjustments as provided under the terms of the September 2022 Warrants. The September 2022 Warrants have a term of five years from the date of issuance. The September 2022 Private Placement closed on September 12, 2022. The Company received gross proceeds of approximately $10 million before deducting transaction-related fees and expenses payable by the Company. As of September 30, 2024, 200,000 of the September 2022 Warrants have been redeemed for $210,000.

 

In connection with the September 2023 Private Placement, the Company entered into a Registration Rights Agreement with the investors. The Company’s registration statement on Form S-1 to register the securities issued in the September 2022 Private Placement went effective on September 21, 2022.

 

Transaction costs incurred related to the September 2022 Private Placement include the following: (i) placement agent fees of $800,000, (ii) legal expenses of $55,617, and (iii) escrow agent expenses of $7,650.

 

May 2023 Private Placement

 

On May 21, 2023, the Company entered into a Securities Purchase Agreement with an accredited investor and existing stockholder of the Company. The combined purchase price of one share and the accompanying warrant (“May 2023 Warrants”) was $0.95. Subject to certain ownership limitations, the May 2023 Warrants are exercisable immediately after issuance at an exercise price equal to $0.95 per share of Common Stock, subject to adjustments as provided under the terms of the May 2023 Warrants. The May 2023 Warrants have a term of five years from the date of issuance. The May 2023 Private Placement closed on May 24, 2023. The Company received gross proceeds of approximately $3.5 million before deducting transaction related fees and expenses payable by the Company.

 

In connection with the May 2023 Private Placement, the Company entered into a Registration Rights Agreement with the investor. The Company’s registration statement on Form S-3 to register the securities issued in the May 2023 Private Placement went effective on June 5, 2023.

 

Transaction costs incurred related to the May 2023 Private Placement include the following: (i) placement agent fees of $316,850, and (ii) legal expenses of $78,400.

 

21

 

 

BRIGHT GREEN CORPORATION

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months and Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 

9. Stockholders’ Equity (continued)

 

Warrants

 

September 2022 Warrants

 

In the Company’s September 2022 Private Placement, warrants to purchase up to 9,523,810 shares of Common Stock were issued (“September 2022 Warrants”). The September 2022 Warrants were initially exercisable at a price of $1.05 per share, subject to adjustment as set forth in the September 2022 Warrants, at any time after September 12, 2022, and will expire on September 13, 2027. In connection with the May 2023 Private Placement, the exercise price of the September 2022 Warrants issued in the September 2022 Private Placement was reduced to $0.95 per share.

 

The fair value of the September 2022 Warrants immediately prior to the modification was $7,399,000, and the fair value of the September 2022 Warrants immediately after the modification was $6,901,000, representing a decrease in fair value of $498,000. In accordance with ASU 2021- 04, as the modification was a result of issuing equity and there was no increase in fair value, the Company accounted for the adjustment as a reduction of additional paid-in capital with a corresponding offset recorded to additional paid-in capital.

 

May 2023 Warrants

 

In the Company’s May 2023 Private Placement, warrants to purchase up to 3,684,210 shares of Common Stock were issued (“May 2023 Warrants”). The fair value of the May 2023 Warrants was determined utilizing a Black Scholes model considering all relevant assumptions current at the date of issuance (i.e., share price of $0.78, exercise price of $0.95, term of five years, volatility of 165.0%, risk-free rate of 3.8%, and dividend rate of 0.0%). The grant date fair value of the May 2023 Warrants was estimated to be $1.6 million on May 24, 2023, and is reflected within additional paid-in capital.

 

September 2023 Warrants

 

In connection with the repayment obligation of the related party line of credit note in September 2023, warrants to purchase up to 2,827,960 shares of Common Stock were issued (“September 2023 Warrants”). The fair value of the September 2023 Warrants was determined utilizing a Monte Carlo simulation considering all relevant assumptions current at the date of issuance (i.e., share price of $0.46, exercise price of $3.00, expected life of one year, volatility of 149%, risk-free rate of 5.36%, and dividend rate of 0.0%). The grant date fair value of the September 2023 Warrants was estimated to be approximately $149,180 on September 1, 2023, and is reflected within additional paid-in capital.

 

22

 

 

BRIGHT GREEN CORPORATION

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months and Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 

10. Stock-Based Compensation

 

In 2022, the Company adopted the Bright Green Corporation 2022 Omnibus Equity Compensation Plan, which allows for various types of stock-based awards. These awards can be in the form of stock options (including non-qualified and incentive stock options), stock appreciation rights (“SARs”), restricted shares, performance shares, deferred stock, restricted stock units (“RSUs”), dividend equivalents, bonus shares, or other types of stock-based awards.

 

As of September 30, 2024 and 2023, there were 8,626,612 and 625,000, respectively, of awards granted under the Plan. The awards consisted of 2,288,403 shares of stock options and 6,338,209 shares of RSUs as of September 30, 2024 and 625,000 shares of stock options and 625,000 shares of RSUs as of September 30, 2023.

 

The Company’s stock-based compensation costs for the nine months ended September 30, 2024 and 2023 were $1,028,357 and $2,945,903 respectively, with the costs allocated to general and administrative expenses. Stock options accounted for $73,749 and $nil and RSUs accounted for $412,688 and $nil of the total stock-based compensation costs for the nine months ended September 30, 2024 and 2023, respectively.

 

Stock Options

 

The Company uses the Black-Scholes option-pricing model to value stock option grants to employees, non-employees, and directors. The fair value of the Company’s common stock is used to determine the fair value of stock options. The Black-Scholes option pricing model requires inputs based on certain subjective assumptions, including (i) the expected stock price volatility, (ii) the expected term of the award, (iii) the risk-free interest rate, and (iv) expected dividends. The historical volatility is calculated based on a period of time commensurate with the expected term assumption. The Company uses the simplified method to calculate the expected term for options granted to employees whereby the expected term equals the arithmetic average of the vesting term and the original contractual term of the options due to its lack of sufficient historical data. The risk-free interest rate is based on U.S. Treasury securities with a maturity date commensurate with the expected term of the associated award. The expected dividend yield is assumed to be zero as the Company has never paid dividends and has no current plans to pay any dividends on its common stock. The Company recognizes forfeitures as they occur.

 

The fair value of the stock options was estimated using the following assumptions:

 

   2024   2023 
Weighted average fair value at grant date  $0.2013   $0.3303 
Valuation assumptions:          
Expected life of options (years)   5.00    5.00 
Expected stock volatility   186.90%   213.90%
Risk-free interest rate   4.54%   4.42%
Expected dividend yield   0.00%   0.00%

 

23

 

 

BRIGHT GREEN CORPORATION

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months and Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 

10. Stock-Based Compensation (continued)

 

During the nine months ended September 30, 2024, the Company’s stock option activity was as follows:

 

-On March 31, 2024, 625,000 shares of unvested stock options granted to the Chief Executive Officer of the Company in September 2023 were canceled by mutual agreement between the Company and the Chief Executive Officer.

 

-On May 23, 2024, the Company granted 488,403 time-based stock options to the Company’s Chairwoman and majority shareholder, as well as to two Directors. The stock options vest 4/12ths upon issuance, and the remaining in equal increments on the last day of each month for the next eight months, with full vesting on December 31, 2024.

 

During the nine months ended September 30, 2023, there were 625,000 shares of stock options issued to the Company’s Chief Executive Officer on September 20, 2023, which were subsequently canceled and replaced as of March 31, 2024 by mutual agreement between the Company and the Chief Executive Officer.

 

The following table summarizes stock option activity for the nine months ended September 30, 2024:

 

   Stock Options Outstanding & Exercisable 
           Weighted Average 
   Number of   Weighted Average   Remaining Life 
   Stock Options   Exercise Price   (Years) 
Outstanding as at December 31, 2023   2,425,000   $0.3353    9.90 
Granted   488,403    0.3276    9.90 
Exercised   -    -      
Expired/Canceled   (625,000)   0.3353      
Outstanding as at September 30, 2024   2,288,403   $0.3337    9.50 
Exercisable as at September 30, 2024   2,166,302   $0.3340    9.60 

 

Restricted Stock Units

 

The Company accounts for the fair value of restricted stock units (“RSUs”) using the closing market price of the Company’s common stock on the date of the grant. Stock-based compensation cost for RSUs is measured at the grant date based on the estimated fair value of the award and is recognized as expense over the requisite service period (generally the vesting period), net of forfeitures.

 

During the nine months ended September 30, 2024, the Company’s restricted stock unit activity was as follows:

 

-On March 7, 2024, the Company granted 600,000 shares of time-based RSUs, which vest in equal monthly installments over a period of one year beginning March 7, 2024, to the Chief Financial Officer of the Company;

 

24

 

 

BRIGHT GREEN CORPORATION

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months and Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 

10. Stock-Based Compensation (continued)

 

-On March 31, 2024, 625,000 shares of RSUs granted to the Chief Executive Officer of the Company in September 2023 were canceled by mutual agreement and replaced with 5,500,000 RSUs, which consisted of both time-based and performance-based RSUs. The Company granted 500,000 RSUs that vested on March 31, 2024, 3,000,000 RSUs that vest ratably over a period of twenty-four months beginning April 2, 2024, and the remaining 2,000,000 RSUs that vest upon the achievement of certain milestones;

 

-On May 23, 2024, the Company granted 238,209 shares of time-based RSUs to a Director of the Company, which vest 2/10ths upon issuance and the remaining in equal increments on the last day of each month for the next eight months, with full vesting on December 31, 2024; and

 

-On July 15, 2024, the Company’s Chief Executive Officer redeemed 1,000,000 vested RSUs for 1,000,000 shares of common stock.

 

During the nine months ended September 30, 2023, there were 625,000 RSUs issued to the Company’s Chief Executive Officer on September 20, 2023, which were subsequently canceled and replaced with 5,500,000 RSUs as of March 31, 2024 by mutual agreement between the Company and Chief Executive Officer.

 

The following table summarizes restricted stock unit activity for the nine months ended September 30, 2024:

 

   Nonvested RSUs 
       Weighted Average 
   Number of   Fair Value 
   RSUs   (Grant Date) 
Balance, December 31, 2023   625,000   $0.3848 
Granted   6,338,209    0.2397 
Vested   (1,756,198)   0.1310 
Forfeited/Canceled   (625,000)   0.3848 
Balance, September 30, 2024   4,582,011   $0.2814 

 

11. Related Party Transactions

 

Other than the transactions disclosed elsewhere in the condensed consolidated financial statements, the following are the other significant related party transactions and balances:

 

Included in common stock issued for services during the nine months ended September 30, 2024, were 4,957,500 shares of common stock issued to the former Executive Chairman of the Company for services rendered, unpaid cash remuneration, and bonus compensation (Note 9).

 

Included in stock-based awards granted during the nine months ended September 30, 2024, were 5,500,000 shares of RSUs granted to the Chief Executive Officer of the Company. On March 31, 2024, 625,000 shares of RSUs that were granted in September 2023 were canceled by mutual agreement between the Company and the Chief Executive Officer (Note 10).

 

25

 

 

BRIGHT GREEN CORPORATION

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months and Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 

11. Related Party Transactions (continued)

 

Included in stock-based awards granted during the nine months ended September 30, 2024, were 600,000 shares of RSUs granted to the Chief Financial Officer of the Company (Note 10).

 

Included in stock-based awards granted during the nine months ended September 30, 2024, were 238,209 shares of RSUs granted to a Director of the Company (Note 10).

 

Included in stock-based awards granted during the nine months ended September 30, 2024, were 488,403 shares of stock options granted to two Directors of the Company and to the Company’s Chairwoman and majority shareholder (Note 10).

 

At September 30, 2024 and December 31, 2023, $23,682 and $23,460, respectively, was due to a company majority owned by the Company’s former Chief Executive Officer. The amount is included in accounts payable in the condensed consolidated balance sheets.

 

At September 30, 2024 and December 31, 2023, $196,082 and $68,037, respectively, was due to a company wholly owned by the Company’s Chief Financial Officer, who also is a shareholder. The amount is included in accounts payable in the condensed consolidated balance sheets.

 

At September 30, 2024 and December 31, 2023, $299,864, and $66,667, respectively, was due to a company wholly owned by the Company’s Chief Executive Officer. The amount is included in accounts payable in the condensed consolidated balance sheets.

 

At September 30, 2024 and December 31, 2023, $400,000 and $400,000, respectively, was due to a firm that has one of its partners serving on the Company’s Board of Directors. The amount is included in accounts payable in the condensed consolidated balance sheets.

 

At September 30, 2024, $165,000 short-term note payable in the condensed consolidated balance sheets, was due to a Lender, whose company is owned and controlled by a member of the Company’s Board of Directors. The balance includes $15,000 of interest expense that was capitalized and included in construction in progress (Note 6). The note is personally guaranteed by the Company’s Chairwoman and majority shareholder and the principal and interest are payable on or before December 31, 2024.

 

At September 30, 2024, the outstanding balance on the related party line of credit of $640,315 in the condensed consolidated balance sheets, was due to a Lender, who is the Company’s Chairwoman and majority shareholder (Note 8).

 

26

 

 

BRIGHT GREEN CORPORATION

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months and Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 

12. Contingencies

 

In the ordinary course of business, the Company is routinely defendants in, or parties to a number of pending and threatened legal actions including actions brought on behalf of various classes of claimants. In view of the inherent difficulty of predicting the outcome of such matters, the Company cannot state what the eventual outcome of such matters will be. Legal provisions are established when it becomes probable that the Company will incur an expense related to a legal action and the amount can be reliably estimated. Such provisions are recorded at the best estimate of the amount required to settle any obligation related to these legal actions as at the balance sheet date, taking into account the risks and uncertainties surrounding the obligation. Management and internal and external experts are involved in estimating any amounts that may be required. The actual costs of resolving these claims may vary significantly from the amount of the legal provisions. The Company’s estimate involves significant judgement, given the varying stages of the proceedings, the fact that the Company’s liability, if any, has yet to be determined and the fact that the underlying matters will change from time to time. Other than as set forth below, the Company is not presently a party to any litigation. The Company is not able to make a reliable assessment of the potential losses as these matters are at an early stage, accordingly, no amounts have been accrued in the condensed consolidated financial statements.

 

Bright Green Corporation v. John Fikany, State of New Mexico, County of Cibola, Thirteenth Judicial District. In this matter, the Company filed a complaint for declaratory judgment against a consultant of the Bright Green Group of Companies, an entity unrelated to the Company, to determine if defendant is entitled to 5,000,000 shares of the Company’s common stock, based on a failure to fulfill agreed upon conditions precedent to earning such shares from the Company. Defendant counterclaimed and filed a third-party claim against a director of the Company, and her spouse, for claims including wrongful termination and breach of contract. The Company denies defendants allegations and has set forth arguments refuting defendant’s counterclaims and third-party claims. The case proceeded to trial on the declaratory judgment action, and the Court determined in late August 2024 that Bright Green Corporation was not entitled to cancel Defendant’s shares. The Company disagrees with the Court’s determination but has made arrangements to issue but not deliver the shares until the matter can be appealed. The jury trial on the counterclaim for breach of employment contract is set for February 2025.

 

Bright Green Corporation v. Jerry Capussi, State of New Mexico, County of Cibola, Thirteenth Judicial District. In this matter, the Company and defendant, a former consultant of Sunnyland Farms Inc., an entity unrelated to the Company, have each filed claims for declaratory judgment seeking to determine by court order whether defendant is entitled to (i) shares of common stock in the Company (amounting to no more than 108,000 shares) or (ii) fair market value of defendant’s equity ownership of Bright Green Grow Innovations, LLC, a predecessor company of Bright Green Corporation. The lawsuit is in early discovery stages, and the Company is preparing arguments for a summary judgment motion. There are no claims for specific monetary liability against either party. The case has not progressed significantly, and the Company is considering dismissing its claim.

 

13. Subsequent Events

 

The Company’s management has evaluated the subsequent events up to November 19, 2024, the date the condensed consolidated financial statements were issued, pursuant to the requirements of ASC 855, and has determined that there are no material subsequent events to disclose.

 

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ITEM  2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and the accompanying notes thereto included elsewhere in this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements based upon current plans, expectations, and beliefs, involving risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements. You should review the sections titled “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in this Quarterly Report on Form 10-Q, our most recent Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q, and other periodic reports filed with the Securities and Exchange Commission (the “SEC”) for discussions of forward-looking statements and factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis, and elsewhere in this Quarterly Report on Form 10-Q. Our historical results are not necessarily indicative of the results that may be expected for any period in the future.

 

Overview

 

Bright Green Corporation (the “Company,” “BGC,” “Bright Green,” “we,” “us,” or “our) is a first-mover in the U.S. federally-authorized cannabis space. BGC is one of a few companies who have received from the U.S. Drug Enforcement Administration (the “DEA”), a federal controlled substances registration for the bulk manufacturing of cannabis under DEA Registration No. RB0649383 (the “DEA Manufacturing Registration”), which allows the Company to produce and export federally legal cannabis, cannabis extracts, and tetrahydrocannabinol in the U.S. We received the DEA Manufacturing Registration on April 28, 2023, pursuant to the Memorandum of Agreement (the “MOA”) with the DEA entered into on April 27, 2023, which replaced the 2021 Memorandum of Agreement (the “2021 MOA”) (DEA Document Control Number W20078135E). In May 2023, we received a second DEA registration for Importing Schedule I Controlled Substances under DEA registration No. RB0650754 (the “DEA Importer Registration”).

 

Unlike state-licensed cannabis companies, which engage in commercial sales to consumers, and which businesses are legal under state law but not federal law, subject to the milestones and requirements set forth herein, we are authorized by the federal government to sell cannabis commercially for research and manufacturing purposes, export cannabis for international cannabis research purposes, and sell cannabis to DEA-registered pharmaceutical companies for the production of medical cannabis products and preparations. Our business activities under the DEA Manufacturing Registration are subject to applicable federal law and regulations and to our obligations under the MOA we entered into with the DEA. Our DEA Manufacturing Registration and our DEA Importer Registration were valid through July 31, 2024. On July 30, 2024, we received an extension letter from the DEA (the “DEA Extension Letter”), which allows us to operate while the DEA is processing our DEA Manufacturing Registration renewal application, pursuant to 21 CFR 1301.36(i). The extension includes the ability to handle controlled substances throughout the time that the renewal application is being processed. We received DEA Extension Letters for both the DEA Manufacturing Registration and for the DEA Importer Registration. For our cannabis business line, we plan to focus on the development of cannabis strains and sales of cannabis and hemp products with high contents of CBN (cannabinol) and CBG (cannabigerol).

 

In addition to research and pharmaceutical supply sales, Bright Green will be able to sell certain cannabinoids, such as CBN (cannabinol) and CBG (cannabigerol) as hemp isolates or extracts and plans to sell CBN and CBG hemp products to consumers where such products are fully legal under all applicable laws. On August 9, 2022, the DEA confirmed to BGC that cannabinoids, including, but not limited to CBN/CBG, which meet the definition of “hemp” by having a Delta-9-tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis, are outside of the DEA’s jurisdiction because they are not controlled under the CSA. Hemp and hemp products were made legal by the Agriculture Improvement Act of 2018 (the “2018 Farm Bill”), which has been codified in 21 U.S.C. § 802(16)(B)(i), and 7 U.S.C. § 1639o. This hemp product business line will be in addition to our research and pharmaceutical cannabis activities conducted under the DEA Manufacturing Registration.

 

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In addition to hemp and cannabis, we plan to manufacture additional plant-based medicines derived from controlled substance plants and fungi, including but not limited to, psilocybin, peyote cactus, and opium poppy as part of our “Drugs Made in America” strategy. In February 2024, we received approval from the New Mexico Board of Pharmacy to produce additional Schedule I and Schedule II controlled substances at our Grants, NM facility (NM Board of Pharmacy License Nos. CS02324187 (exp. July 31, 2027) and WD20220144 (Exp. December 31, 2025)). We have applied for an additional DEA bulk manufacturing registration for these additional Schedule I and Schedule II controlled substances. Our decision to expand beyond cannabis to other plant-based medicines is in response to increased demand for additional controlled substances, the growing need to bolster domestic supply and production of plant-based medicines, and the DEA’s recent decision to increase quotas for certain psychedelic controlled substances. Psilocybin, in particular, has received significant media attention in recent years, and clinical trials on the drug’s potential are underway at the Johns Hopkins Center for Psychedelic & Consciousness Research, the University of California, New York University, the University of Michigan, Yale University, and the Usona Institute, among others. Additionally, in July 2023, the American Medical Association (“AMA”) published language for new Current Procedural Terminology (“CPT”) III codes for psychedelic therapies. The codes went into effect on January 1, 2024. These new CPT codes will facilitate reimbursement and access to FDA-approved psychedelic therapies in the U.S. While no psychedelic-assisted therapy has yet been approved by the FDA, several potential new drugs are in various phases of clinical trials with the potential for at least one approval in 2024. The additional DEA bulk manufacturing registration that Bright Green is seeking will allow us to supply the growing demand for psychedelic and plant-based medicine research, as well as to produce Active Pharmaceutical Ingredients (“APIs”) for a number of key pharmaceutical drugs. Given the recent prescription drug shortages experienced both in the U.S. and in other countries, our additional approval would allow us to meet U.S. demand for these drugs and contribute a consistent domestic supply of these drugs both for API and for research purposes.

 

Because cannabis, and the other future controlled substances we have applied for DEA registration to manufacture, are still Schedule I and Schedule II controlled substances in the U.S., they have been historically under-researched. Though the majority of Americans now live in states where cannabis is legal, the full potential of the cannabis plant (and other controlled substance plants) for medicinal use remains understudied due to limited access to federally-approved cannabis and other controlled substances. The DEA recently issued a call for more cannabis research supply based on the increased demand for cannabis research in the U.S. As described herein, on April 28, 2023, we received the DEA Manufacturing Registration, which allows us to produce federally legal cannabis, cannabis extracts, and tetrahydrocannabinol and to sell legally within the U.S. to licensed researchers and pharmaceutical companies, in addition to qualifying us to export cannabis internationally. In January 2024, the DEA increased its quotas not only for cannabis but also for psilocybin and other psychedelics to meet medical and scientific needs. Our plan to expand our business to include additional controlled substances is in line with our Company’s mission and is in response to increased demand for these historically understudied plant medicines.

 

BGC must comply with the terms agreed upon pursuant to the MOA which include: submitting an Individual Procurement Quota on or before April 1 of each year utilizing DEA Form 250; submitting an Individual Manufacturing Quota on or before May 1 of each year utilizing DEA Form 189; collecting samples of cannabis and distributing them to DEA-registered analytical laboratories for chemical analysis during the pendency of cultivation and prior to the DEA’s taking possession of the cannabis grown; providing the DEA with 15-day advance written notification, via email, of its intent to harvest cannabis; following the DEA’s packaging, labeling, storage and transportation requirements; distributing DEA’s stocks of cannabis to buyers who entered into bona fide supply agreements with the Company; providing the DEA with 15-day advance written notification of its intent to distribute cannabis; and invoicing the DEA for harvested cannabis that it intends to sell to the DEA.

 

Having received our DEA Manufacturing Registration, we are permitted to cultivate and manufacture cannabis, supply cannabis researchers in the U.S. and globally, and produce cannabis for use in pharmaceutical production of prescription medicines within the U.S. Our DEA Manufacturing Registration permits our cannabis activities under federal law, which sets BGC apart from most other U.S. cannabis companies.

 

We have assembled an experienced team of medical professionals and researchers, international horticultural growers and experts, and construction and cannabis production professionals, which we believe position us as a future industry leader in the production of plant-based medicines.

 

29

 

 

Key Factors Affecting Our Results of Operations and Future Performance

 

We believe that our financial performance has been, and in the foreseeable future will continue to be, primarily driven by multiple factors as described below, each of which presents growth opportunities for our business. These factors also pose important challenges that we must successfully address in order to sustain our growth and improve our results of operations. Our ability to successfully address these challenges is subject to various risks and uncertainties, including those described in the section titled “Risk Factors” of this Quarterly Report on Form 10-Q, in our Annual Report on Form 10-K for the year ended December 31, 2023, and in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2024.

 

Results of Operations

 

This section includes a summary of our historical results of operations, followed by detailed comparisons of our results for the three and nine months ended September 30, 2024 and September 30, 2023.

 

The Company has not started commercial operations but has incurred expenses in connection with corporate and administrative matters, upkeep of acquired properties for future growing, processing and distribution of medical plants, and improvements to those properties. These expenses include stock-based compensation for services rendered, legal and audit fees, and property-related expenses such as depreciation, insurance and taxes. As a result, the Company reported a net loss in both reporting periods.

 

Three and nine months ended September 30, 2024 compared to three and nine months ended September 30, 2023.

 

Revenue:

 

We are a start-up company and have not generated any revenues for the three and nine months ended September 30, 2024 and 2023. We do not anticipate earning revenue until such time that we are able to sell cannabis commercially for research and manufacturing purposes, export cannabis for international cannabis research purposes, and sell cannabis to DEA-registered pharmaceutical companies for the production of medical cannabis products and preparations. We can provide no assurance that we will generate sufficient revenues from our intended business operations to sustain a viable business operation.

 

Operating Expenses:

 

We incurred operating expenses in the amount of $1,111,924 for the three months ended September 30, 2024, as compared to $1,811,533 for the same period ended 2023. We incurred operating expenses in the amount of $4,513,678 for the nine months ended September 30, 2024, as compared to $7,410,662 for the same period ended 2023. Our operating expenses for the three and nine months ended September 30, 2024 and 2023 consisted entirely of general and administrative expenses and depreciation. The detail by major category within general and administrative expenses for the three and nine months ended September 30, 2024 and 2023 are reflected in the table below.

 

   Three Months Ended   Nine Months Ended 
   September 30, 2024   September 30, 2023   September 30, 2024   September 30, 2023 
                 
Revenue  $-   $-   $-   $- 
Expenses                    
General and administrative expenses                    
Professional fees   492,702    469,839    1,881,258    2,116,410 
Stock-based compensation   163,318    673,253    1,028,357    2,945,903 
Officer salaries   182,499    296,764    572,292    1,242,070 
Other expenses   63,449    165,309    334,004    407,202 
Licenses   11,441    1,055    117,320    6,630 
Insurance   27,842    30,492    87,487    108,803 
Property taxes   23,485    13,943    52,466    42,999 
Travel   1,659    -    6,909    63,016 
Total general and administrative expenses   966,395    1,650,655    4,080,093    6,933,033 
Depreciation   145,529    160,878    433,585    477,629 
Total operating expenses   1,111,924    1,811,533    4,513,678    7,410,662 

 

Our general and administrative expenses decreased by $684,260 and $2,852,940, respectively, for the three and nine months ended September 30, 2024, compared to the same periods in 2023, largely due to decreased spending on officer salaries, stock-based compensation to executives, and professional fees.

 

We expect our general and administrative expenses to increase in future quarters as we continue with our reporting obligations with the SEC and the increased expenses associated with increased operational activity, which is expected for the balance of the year.

 

Liquidity and Capital Resources

 

As of September 30, 2024, the Company had cash of $40,366 compared to $10,059 as of December 31, 2023. The increase of $30,307 in cash was primarily due to $880,000 received from the sales of common stock through the Company’s EB-5 Program, a $414,352 net draw on the related party line of credit, and $150,000 from a related party short-term note payable. This was partly offset by the use of funds for the construction in progress, costs associated with the Company’s SEC filings, and the utilization of funds from the related party short-term note payable to pay down the related party line of credit. Since its inception, the Company has incurred net losses and funded its operations primarily through the issuance of equities and draws on the line of credit provided by the Chairwoman of the Company. As of September 30, 2024, the Company had a total stockholders’ equity of $8,921,914 (December 31, 2023 - $10,964,945).

 

The Company is in its initial stages to start building facilities to grow, research, and distribute medical plants. The Company has incurred recurring losses from operations and, as of September 30, 2024, had an accumulated deficit of $50,700,777 (December 31, 2023 - $47,203,469) and a negative working capital of $6,990,799 (December 31, 2023 – $5,968,030).

 

The Company does not have sufficient working capital to pay its operating expenses for a period of at least 12 months from the date the condensed consolidated financial statements were authorized to be issued. The Company’s continued existence is dependent upon its ability to continue to execute its operating plan and to obtain additional debt or equity financing.

 

The Company has developed plans to raise funds and continues to pursue sources of funding that management believes, if successful, would be sufficient to support the Company’s operating plan.

 

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Sources of Liquidity

 

Cash Flows

 

Operating Activities

 

   For the nine months ended 
   September 30, 2024   September 30, 2023 
         
Net cash used in operating activities   (971,078)   (2,473,439)

 

During the nine months ended September 30, 2024 and 2023, all cash used in operating activities was for general and administrative expenses.

 

Investing Activities

 

   For the nine months ended 
   September 30, 2024   September 30, 2023 
         
Net cash used in investing activities   (362,967)   (2,204,161)

 

During the nine months ended September 30, 2024 and 2023, all cash used in investing activities was for the construction of the greenhouse.

 

Financing Activities

 

   For the nine months ended 
   September 30, 2024   September 30, 2023 
         
Net cash provided by financing activities   1,364,352    4,384,750 

 

During the nine months ended September 30, 2024, cash provided by financing activities were proceeds of $800,000 from the sales of common stock through the Company’s EB-5 Program, $150,000 from the related party short-term note payable, and $564,352 from draws on the related party line of credit. These proceeds were offset by a payment of $150,000 to the related party line of credit.

 

The Company has recorded the $800,000 received from the sales of common stock through the Company’s EB-5 Program as common stock payable. The sale is not yet complete, and the common stock will be issued upon receipt of the signed agreement, pursuant to the Company’s EB-5 Program.

 

During the nine months ended September 30, 2023, cash provided by financing activities were proceeds of $3,104,750 from the sales of units, $880,000 from the sales of common stock through the Company’s EB-5 Program, $210,000 from the exercise of warrants, and $200,000 from a draw on the related party line of credit. These proceeds were offset by a payment of $10,000 in issuance costs for the issuance of common stock and warrants, which were issued in a cashless conversion of the related party line of credit.

 

Contractual Obligations and Commitments

 

The Company does not have any short or long-term contractual purchases with suppliers for future purchases, capital expenditure commitments that cannot be cancelled with minimal fees, noncancelable operating leases, or any commitment or contingency that would hinder management’s ability to scale down operations and management expenses until funding is raised.

 

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Inflation

 

Although our operations are influenced by general economic conditions, we do not believe that inflation had a material effect on our results of operations during the three months and nine months ended September 30, 2024.

 

Off-balance sheet arrangements

 

We have not entered into any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources and would be considered material to investors.

 

Critical Accounting Policies and Estimates

 

The discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these condensed consolidated financial statements requires us to make estimates and judgments that affect the amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates based on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily available or apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. For a detailed discussion about the Company’s significant accounting policies, refer to Note 3 “Summary of Significant Accounting Policies,” in the Company’s condensed consolidated financial statements included in this Quarterly Report on Form 10-Q. During the nine months ended September 30, 2024, no material changes were made to the Company’s significant accounting policies.

 

Recently Issued Accounting Pronouncements

 

A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 3 to the Company’s condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

 

JOBS Act Accounting Election

 

We are an emerging growth company, as defined in the JOBS Act. The JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an emerging growth company to delay the adoption of some accounting standards until those standards would otherwise apply to private companies. We have elected to use the extended transition period under the JOBS Act until the earlier of the date we (1) are no longer an emerging growth company or (2) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our condensed consolidated financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

 

ITEM  3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Not Applicable.

 

ITEM  4. CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures

 

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer has evaluated the effectiveness of our disclosure controls and procedures. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

 

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Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost benefit relationship of possible controls and procedures. As required by Rule 13a-15(b) of the Exchange Act, an evaluation as of September 30, 2024 was conducted under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Based on this evaluation as of September 30, 2024, our Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective as of the period ended September 30, 2024.

 

Changes in Internal Control Over Financial Reporting

 

There has been no change in our internal control over financial reporting during the quarter ended September 30, 2024 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

Inherent Limitations on Effectiveness of Controls

 

Management recognizes that a control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud or error, if any, have been detected. These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

 

PART II. OTHER INFORMATION

 

ITEM  1. LEGAL PROCEEDINGS

 

From time to time, we may be involved in legal proceedings arising from the normal course of business activities. Defending such proceedings is costly and can impose a significant burden on management and employees. The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. There are no material updates to litigation previously disclosed.

 

ITEM  1A. RISK FACTORS

 

In addition to the other information set forth in this Quarterly Report on Form 10-Q, carefully consider the risk factors described under the heading “Part I – Item 1A. Risk Factors” in our most recent Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and “Part II – Item 1A. Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2024. Such risks described are not the only risks facing us. Additional risks and uncertainties not currently known to us, or that our management currently deems to be immaterial, also may adversely affect our business, financial condition, and/or operating results. Aside from what follows, there have been no material changes to those risk factors since their disclosure in our most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q.

 

33

 

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES  

 

During the nine months ended September 30, 2024, the Company recorded $800,000 of common stock payable related to common stock to be issued upon receipt of signed agreement, to one accredited investor pursuant to the Company’s EB-5 program. The common stock payable for the EB-5 Program comprised 400,000 shares to be issued at a purchase price of $2.00 per share, for gross cash proceeds received of $880,000, including administrative fee income of $80,000. The Company has recorded the $800,000 received from the sales of common stock through the Company’s EB-5 Program as common stock payable. The sale is not yet complete, and the common stock will be issued upon receipt of the signed agreement, pursuant to the Company’s EB-5 Program.

 

During the nine months ended September 30, 2024, the Company issued the following:

 

  - 2,537,500 shares of common stock for services rendered, at a fair value of $0.1760 per share, to the Company’s former Executive Chairman, in February 2024;

 

These securities were issued pursuant to Section 4(2) of the Securities Act and/or Rule 506 promulgated thereunder. The holders represented their intention to acquire the securities for investment only and not with a view towards distribution. The investors were given adequate information about us to make an informed investment decision. We did not engage in any general solicitation or advertising. We directed our transfer agent to issue the stock certificates with the appropriate restrictive legend affixed to the restricted stock in instances where a restrictive legend was required.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

Not applicable.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable.

 

ITEM 5. OTHER INFORMATION

 

None.

 

ITEM 6. EXHIBITS

 

Exhibit

Number

   Description
     
31.1*   Certification of the Principal Executive Officer pursuant to Exchange Act Rule 13a-14 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*   Certification of the Principal Financial Officer pursuant to Exchange Act Rule 13a-14 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1†   Certification of the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2†   Certification of the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
     
101.INS*   Inline XBRL Instance Document.
     
101.SCH*   Inline XBRL Taxonomy Extension Schema Document.
     
101.CAL*   Inline XBRL Taxonomy Extension Calculation Linkbase Document.
     
101.DEF*   Inline XBRL Taxonomy Extension Definition Linkbase Document.
     
101.LAB*   Inline XBRL Taxonomy Extension Label Linkbase Document.
     
101.PRE*   Inline XBRL Taxonomy Extension Presentation Linkbase Document.
     
104*   Cover Page Interactive Data File (embedded within the Inline XBRL document in Exhibit 101)

 

* Filed herewith.
   
† The certifications attached as Exhibit 32.1 and 32.2 that accompany this Quarterly Report on Form 10-Q are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of the Registrant under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such filing.

 

34

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

  BRIGHT GREEN CORPORATION
     
Date: November 19, 2024 By: /s/ Gurvinder Singh
    Gurvinder Singh
    Chief Executive Officer
     
Date: November 19, 2024 By: /s/ Saleem Elmasri
    Saleem Elmasri
    Chief Financial Officer

  

35

 

 

Exhibit 31.1

 

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

 

I, Gurvinder Singh, certify that:

 

1. I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2024 of Bright Green Corporation;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the condensed financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: November 19, 2024    
    /s/ Gurvinder Singh
  Name: Gurvinder Singh
  Title: Chief Executive Officer
    (Principal Executive Officer)

 

 

 

Exhibit 31.2

 

CERTIFICATION OF CHIEF FINANCIAL OFFICER

 

I, Saleem Elmasri, certify that:

 

1. I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2024 of Bright Green Corporation;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the condensed financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: November 19, 2024    
    /s/ Saleem Elmasri
  Name: Saleem Elmasri
  Title: Chief Financial Officer
    (Principal Financial Officer)

 

 

 

Exhibit 32.1

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of Bright Green Corporation (the “Company”) on Form 10-Q for the quarterly period ended September 30, 2024 (the “Report”), I, Gurvinder Singh, the Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

 

  (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
     
  (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

    /s/ Gurvinder Singh
  Name: Gurvinder Singh
  Title:

Chief Executive Officer

(Principal Executive Officer)

Date: November 19, 2024    

 

 

 

Exhibit 32.2

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of Bright Green Corporation (the “Company”) on Form 10-Q for the quarterly period ended September 30, 2024 (the “Report”), I, Saleem Elmasri, the Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

 

  (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
     
  (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

    /s/ Saleem Elmasri
  Name: Saleem Elmasri
  Title: Chief Financial Officer
    (Principal Financial Officer)
Date: November 19, 2024    

 

 

v3.24.3
Cover - shares
 9 Months Ended
Sep. 30, 2024
Nov. 19, 2024
Cover [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Quarterly Report true  
Document Transition Report false  
Document Period End Date Sep. 30, 2024  
Document Fiscal Period Focus Q3  
Document Fiscal Year Focus 2024  
Current Fiscal Year End Date --12-31  
Entity File Number 001-41395  
Entity Registrant Name BRIGHT GREEN CORPORATION  
Entity Central Index Key 0001886799  
Entity Tax Identification Number 83-4600841  
Entity Incorporation, State or Country Code DE  
Entity Address, Address Line One 1033 George Hanosh Boulevard  
Entity Address, City or Town Grants  
Entity Address, State or Province NM  
Entity Address, Postal Zip Code 87020  
City Area Code (833)  
Local Phone Number 658-1799  
Title of 12(b) Security Common Stock, par value $0.0001 per share  
Trading Symbol BGXX  
Security Exchange Name NASDAQ  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company true  
Elected Not To Use the Extended Transition Period false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   191,166,318
Entity Information, Former Legal or Registered Name Not Applicable  
v3.24.3
Condensed Consolidated Balance Sheets - USD ($)
Sep. 30, 2024
Dec. 31, 2023
Current assets    
Cash $ 40,366 $ 10,059
Prepaid expenses and other assets 11,891 258,230
Total current assets 52,257 268,289
Other investment held at fair value (Note 5) 726,343
Property, plant, and equipment (Note 6) 15,903,703 16,407,415
Intangible assets (Note 7) 9,010 1,000
Total assets 15,964,970 17,403,047
Current liabilities    
Accounts payable (Note 11) 5,377,859 4,175,220
Accrued liabilities 59,882 411,099
Common stock payable for EB-5 program (Note 9) 800,000
Due to others (Note 5) 1,650,000
Total current liabilities 7,043,056 6,236,319
Long-term liabilities    
Related party line of credit note (Notes 8 and 11) 201,783
Total long-term liabilities 201,783
Total liabilities 7,043,056 6,438,102
STOCKHOLDERS’ EQUITY    
Preferred stock; $0.0001 par value; 10,000,000 shares authorized; no shares issued or outstanding as of September 30, 2024 and December 31, 2023, respectively (Note 9)
Common stock; $0.0001 par value; 500,000,000 shares authorized; 191,166,318 and 184,758,818 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively (Note 9) 19,117 18,476
Additional paid-in capital (Note 9) 59,603,574 58,149,938
Accumulated deficit (50,700,777) (47,203,469)
Total stockholders’ equity 8,921,914 10,964,945
Total liabilities and stockholders’ equity 15,964,970 17,403,047
Related Party [Member]    
Current liabilities    
Related party short-term note payable (Note 11) 165,000
Related party line of credit (LOC) note (Note 8 and 11) $ 640,315
v3.24.3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares
Sep. 30, 2024
Dec. 31, 2023
Statement of Financial Position [Abstract]    
Preferred stock, par value $ 0.0001 $ 0.0001
Preferred stock, shares authorized 10,000,000 10,000,000
Preferred stock, shares issued 0 0
Preferred stock, shares outstanding 0 0
Common stock, par value $ 0.0001 $ 0.0001
Common stock, shares authorized 500,000,000 500,000,000
Common stock, shares issued 191,166,318 184,758,818
Common stock, shares outstanding 191,166,318 184,758,818
v3.24.3
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Income Statement [Abstract]        
Revenue
Expenses        
General and administrative expenses 966,395 1,650,655 4,080,093 6,933,033
Depreciation 145,529 160,878 433,585 477,629
Total operating expenses 1,111,924 1,811,533 4,513,678 7,410,662
Loss from operations (1,111,924) (1,811,533) (4,513,678) (7,410,662)
Other income (expense)        
Other income (Note 9) 80,000
Foreign currency transaction loss (865) (221) (1,366)
Interest income 14 23
Change in fair value of assets, net (Note 5) (80,705)
Gain on extinguishment of debt (Note 5) 8,684 1,017,273
Total other income (expense) 7,833 1,016,370 (1,366)
Loss before income taxes (1,104,091) (1,811,533) (3,497,308) (7,412,028)
Income tax expense
Loss before equity in net losses of affiliate (1,104,091) (1,811,533) (3,497,308) (7,412,028)
Equity in net losses of affiliate (179,709) (184,650)
Net loss and comprehensive loss $ (1,104,091) $ (1,991,242) $ (3,497,308) $ (7,596,678)
Weighted average common shares outstanding basic 191,003,275 180,587,574 189,565,789 176,784,628
Weighted average common shares outstanding diluted 191,003,275 180,587,574 189,565,789 176,784,628
Net loss per common share basic $ (0.01) $ (0.01) $ (0.02) $ (0.04)
Net loss per common share diluted $ (0.01) $ (0.01) $ (0.02) $ (0.04)
v3.24.3
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($)
Common Stock [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
Total
Balance at Dec. 31, 2022 $ 17,329 $ 45,637,328 $ (34,075,821) $ 11,578,836
Balance, shares at Dec. 31, 2022 173,304,800      
Net loss (7,596,678) (7,596,678)
Common stock issued for services $ 384 $ 2,945,519 $ 2,945,903
Common stock issued for services, shares 3,822,838      
Common stock and warrants issued for a cashless conversion of related party LOC 283 3,609,506 3,609,789
Common stock and warrants issued for a cashless conversion of related party LOC, shares 2,827,960      
Common stock and warrants issued for cash in a private placement, net of issuance costs of $395,250 (Note 9) $ 368 $ 3,104,382 $ 3,104,750
Common stock and warrants issued for cash in a private placement, net of issuance costs of $395,250 (Note 9), shares 3,684,210      
Warrants exercised for cash (Note 9) $ 20 209,980 210,000
Warrants exercised for cash (Note 9), shares 200,000      
Common stock issued for cashless conversion from related party LOC for EB-5 program (Note 9) $ 2 879,998 880,000
Common stock issued for cashless conversion from related party LOC for EB-5 program (Note 9), shares 22,005      
Common stock issued for cash for EB-5 program (Note 9) $ 2 879,998 880,000
Common stock issued for cash for EB-5 program (Note 9), shares 22,005      
Balance at Sep. 30, 2023 $ 18,388 57,266,711 (41,672,499) 15,612,600
Balance, shares at Sep. 30, 2023 183,883,818      
Balance at Jun. 30, 2023 $ 17,948 52,984,109 (39,681,257) 13,320,800
Balance, shares at Jun. 30, 2023 179,483,020      
Net loss (1,991,242) (1,991,242)
Common stock issued for services $ 157 $ 673,096 $ 673,253
Common stock issued for services, shares 1,572,838      
Common stock and warrants issued for a cashless conversion of related party LOC 283 3,609,506 3,609,789
Common stock and warrants issued for a cashless conversion of related party LOC, shares 2,827,960      
Balance at Sep. 30, 2023 $ 18,388 $ 57,266,711 $ (41,672,499) $ 15,612,600
Balance, shares at Sep. 30, 2023 183,883,818      
Balance at Dec. 31, 2023 $ 18,476 58,149,938 (47,203,469) 10,964,945
Balance, shares at Dec. 31, 2023 184,758,818      
Stock-based compensation (Note 10) $ 100 486,437 486,537
Stock-based compensation (Note 10), shares 1,000,000      
Net loss (3,497,308) (3,497,308)
Common stock issued in lieu of unpaid cash remuneration and bonus compensation (Notes 9 and 11) $ 242 425,678 425,920
Common stock issued in lieu of unpaid cash remuneration and bonus compensation (Notes 9 and 11), shares 2,420,000      
Common stock issued for services $ 299 541,521 541,820
Common stock issued for services, shares 2,987,500      
Balance at Sep. 30, 2024 $ 19,117 59,603,574 (50,700,777) 8,921,914
Balance, shares at Sep. 30, 2024 191,166,318      
Balance at Jun. 30, 2024 $ 19,017 59,440,356 (49,596,686) 9,862,687
Balance, shares at Jun. 30, 2024 190,166,318      
Stock-based compensation (Note 10) $ 100 163,218 163,318
Stock-based compensation (Note 10), shares 1,000,000      
Net loss (1,104,091) (1,104,091)
Balance at Sep. 30, 2024 $ 19,117 $ 59,603,574 $ (50,700,777) $ 8,921,914
Balance, shares at Sep. 30, 2024 191,166,318      
v3.24.3
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) (Parenthetical) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2023
Statement of Stockholders' Equity [Abstract]    
Net of issuance cost $ 10,000 $ 10,000
Payment of financing and stock issuance costs   $ 395,250
v3.24.3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
CASH FLOWS FROM OPERATING ACTIVITIES    
Net loss $ (3,497,308) $ (7,596,678)
Adjustments to reconcile net cash (used in) provided by operating activities:    
Foreign currency transaction loss 221 1,366
Equity in net losses of affiliate 184,650
Change in fair value of assets, net 80,705
Gain on extinguishment of debt (1,017,273)
Depreciation 433,585 477,629
Stock-based compensation 1,028,357 2,945,903
Changes in operating assets and liabilities:    
Prepaid expenses and other assets 106,721 (78,874)
Accounts payable 1,780,032 893,699
Accrued liabilities 74,703 698,866
Accrued interest 39,179
Net cash used in operating activities (971,078) (2,473,439)
CASH FLOWS FROM INVESTING ACTIVITIES    
Purchase of intangible assets (8,010)
Purchase of property, plant, and equipment (354,957) (2,204,161)
Net cash used in investing activities (362,967) (2,204,161)
CASH FLOWS FROM FINANCING ACTIVITIES    
Proceeds from related party line of credit 564,352 200,000
Payments to related party line of credit (150,000)
Proceeds from related party short-term note payable 150,000
Proceeds from issuance of common stock 880,000
Proceeds from issuance of common stock and warrants, issued in private placement, net of issuance costs 3,104,750
Payments to issuance costs for issuance of common stock and warrants, issued in cashless conversion of related party line of credit (10,000)
Proceeds from common stock payable for EB-5 program 800,000
Proceeds from warrants exercised 210,000
Net cash provided by financing activities 1,364,352 4,384,750
NET INCREASE (DECREASE) IN CASH 30,307 (292,850)
CASH, BEGINNING OF PERIOD 10,059 414,574
CASH, END OF PERIOD 40,366 121,724
CASH PAID FOR    
Interest
Taxes 
SUPPLEMENTAL NON-CASH INVESTING & FINANCING ACTIVITIES    
Transfer from due to related party to related party LOC 392,194
Related party LOC in exchange for common stock for EB-5 program (880,000)
Related party LOC in exchange for common stock and warrants (3,619,789)
Related party payroll liability in exchange for common stock (425,920)
Adjustment to prepaid expenses and other assets for forfeited deposit in settlement of debt 139,618
Adjustment to construction in progress for return of equipment in settlement of debt 425,085
Adjustment to other investment held at fair value for return of shares in settlement of debt 645,638
Settlement of accounts payable in exchange for other investment held at fair value (568,930)
Settlement of due to others in exchange for other investment held at fair value (1,650,000)
Conversion of RSU to common shares $ 100
v3.24.3
Description of Business and Organization
 9 Months Ended
Sep. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Description of Business and Organization

1. Description of Business and Organization

 

Bright Green Corporation was incorporated on April 16, 2019, under the Delaware General Corporation Law. The Company’s principal executive office is located in Grants, New Mexico. The Company holds the land, greenhouse, and patents required in the growth, production, and research of medicinal plants. When used herein, the terms the “Company,” “our,” “us,” “we,” or “Bright Green” refers to Bright Green Corporation and its consolidated subsidiary, Regional Center Bright Green, LLC.

 

On May 17, 2022, the Company’s common stock commenced trading on Nasdaq under the symbol “BGXX.”

 

On February 1, 2023, the Company initiated a private placement offering of common stock, only to accredited or qualified institutional investors, in reliance upon Rule 506, Regulation D promulgated under the Securities Act, pursuant to the U.S. government’s EB-5 immigrant investor program (the “EB-5 Program”). Under the EB-5 Program as originally constituted, the Company may issue up to an aggregate of 12,609,152 shares of common stock at $39.99 per share. On March 29, 2024, the Company modified the program to authorize 20,000,000 shares to be sold at $2.00 per share. The offering allows for up to 50 investors to participate in the offering by making an $800,000 investment in exchange for 200,000 shares of common stock.

 

On May 21, 2023, the Company entered into a Securities Purchase Agreement with an accredited investor and existing stockholder of the Company for the sale by the Company of (i) 3,684,210 shares of the Company’s common stock, par value $0.0001 per share, and (ii) warrants to purchase up to an aggregate of 3,684,210 shares of the Company’s common stock, in a private placement offering. The combined purchase price of one share and accompanying warrant was $0.95. The shares and the warrants were sold and issued without registration under the Securities Act of 1933, in reliance on the exemptions provided by Section 4(a)(2) of the Securities Act as transactions not involving a public offering and Rule 506 of Regulation D promulgated under the Securities Act as sales to accredited investors, and in reliance on similar exemptions under applicable state laws.

 

On September 20, 2023, the Company formed Regional Center Bright Green, LLC (“RCBG”). RCBG is a wholly-owned subsidiary of the Company and is registered as a limited liability company in New Mexico. RCBG was created to assist foreign investors in obtaining permanent residency in the United States by investing in U.S. businesses, while adhering to the EB-5 Immigrant Investor Program guidelines. The subsidiary became operational on April 25, 2024.

 

On September 19, 2024, the Company was delisted from trading on Nasdaq and is currently trading on the OTC Markets under the symbol “BGXX.”

 

The Company is a start-up company as of September 30, 2024, and has no revenue.

 

 

BRIGHT GREEN CORPORATION

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months and Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 
v3.24.3
Going Concern and Basis of Presentation
 9 Months Ended
Sep. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Going Concern and Basis of Presentation

2. Going Concern and Basis of Presentation

 

The accompanying unaudited condensed consolidated financial statements have been prepared by the Company in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. The information furnished herein reflects all adjustments, consisting only of normal recurring adjustments, which in the opinion of management, are necessary to fairly state the Company’s financial position, the results of its operations, and cashflows for the periods presented. Certain information and footnote disclosures normally present in annual financial statements prepared in accordance with U.S. GAAP were omitted pursuant to such rules and regulations.

 

The financial information contained in this report should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, which the Company filed on April 16, 2024. The results of operations for the nine months ended September 30, 2024, are not necessarily indicative of the results for the year ending December 31, 2024.

 

For the nine months ended September 30, 2024 and 2023, the Company had no revenue and incurred a net loss of $3,497,308 and $7,596,678, respectively. Net cash used in operations for the nine months ended September 30, 2024, and 2023 was $971,078 and $2,473,439, respectively. The Company has incurred recurring losses from operations, and as of September 30, 2024, had an accumulated deficit of $50,700,777 (December 31, 2023 – $47,203,469) and had a negative working capital of $6,990,799 (December 31, 2023 – $5,968,030).

 

The Company is in its initial stages of building facilities to grow, research, and distribute medical plants. The Company has historically financed its operations through the sale of equity securities and debt financing. The Company does not have sufficient working capital to pay its operating expenses for a period of at least 12 months from the date the condensed consolidated financial statements were authorized to be issued. Therefore, the Company’s continued existence depends on its ability to continue executing its operating plan and obtaining additional debt or equity financing. The Company has developed plans to raise funds and continues to pursue sources of funding that management believes, if successful, would be sufficient to support the Company’s operating plan.

 

During the nine months ended September 30, 2024, the Company raised $800,000 from the Company’s EB-5 Program. The Company also has drawn, inclusive of accrued interest, $640,315 from the Company’s $15 million related party line of credit and received $150,000 from a related party short-term note payable (Note 11). The funds from the related party short-term note payable were used to pay down the related party line of credit $150,000, leaving available $14.36 million to draw from that credit facility (Note 8). There is substantial doubt about the Company’s ability to continue as a going concern due to the necessity to generate positive cash flows from operations and/or obtain additional financing. There is no assurance that the Company will be able to generate positive cash flows from operations or obtain additional financing on terms acceptable to the Company, if at all.

 

 

BRIGHT GREEN CORPORATION

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months and Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 

2. Going Concern and Basis of Presentation (continued)

 

In addition, the Company’s current and future operations are subject to various risks and uncertainties, including but not limited to general economic conditions, competition, and regulatory matters. Accordingly, the Company’s operation plan is predicated on various assumptions including, but not limited to, the level of product demand, cost estimates, its ability to continue raising additional financing, and the state of the general economic environment in which the Company operates.

 

These risks and uncertainties may have a material adverse effect on the Company’s financial condition and operating results. Management has taken actions to address the Company’s liquidity needs, including managing expenses, developing pathways to revenue, and pursuing additional financing, such as the EB-5 Program announced on February 1, 2023, and modified on March 29, 2024. However, there can be no assurance that such actions will be sufficient to enable the Company to continue as a going concern. There can be no assurance that these assumptions will prove accurate in all material respects or that the Company will be able to successfully execute its operating plan.

 

The condensed consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. In addition, the Company does not have any short or long-term contractual purchases with suppliers for future purchases, capital expenditure commitments that cannot be canceled with minimal fees, noncancelable operating leases, or any commitment or contingency that would hinder management’s ability to scale down operations and management expenses until funding is raised.

 

The Company’s ability to continue as a going concern is dependent upon the outcome of the matters described above. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.

 

This disclosure is intended to inform users of the condensed consolidated financial statements about the Company’s current financial condition and its ability to continue as a going concern. The Company will continue to monitor its liquidity position and take appropriate actions as necessary to address any potential going concern issues.

 
v3.24.3
Summary of Significant Accounting Policies
 9 Months Ended
Sep. 30, 2024
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies

3. Summary of Significant Accounting Policies

 

A. Basis of Measurement

 

The condensed consolidated financial statements of the Company have been prepared on a historical cost basis except as indicated otherwise.

 

 

BRIGHT GREEN CORPORATION

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months and Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 

3. Summary of Significant Accounting Policies (continued)

 

  B. Principles of Consolidation

 

The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Regional Center Bright Green, LLC. Intercompany transactions and balances have been eliminated upon consolidation.

 

C. Property, Plant, and Equipment

 

Property, plant, and equipment are stated at cost less accumulated depreciation. Expenditures for maintenance and repairs are charged to earnings as incurred; additions, renewals, and betterments are capitalized. When property, plant, and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation of property, plant, and equipment, except land, which is not depreciated, is provided using the declining balance method, or straight-line method, with estimated lives as follows:

  

Building and improvement - declining balance method  10 year life
Furniture and fixtures - straight-line method  3 year life

 

Construction in progress is not depreciated until the asset is placed in service.

 

D. Long-lived Assets

 

The Company applies the provisions of ASC Topic 360, Property, Plant, and Equipment, which addresses financial accounting and reporting for the impairment or disposal of long-lived assets. ASC Topic 360 requires that long-lived assets be reviewed annually for impairment whenever events or changes in circumstances indicate that the assets’ carrying amounts may not be recoverable; it further requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner, except that fair values are reduced for the cost of disposal.

 

E. Intangible Assets

 

The Company’s intangible assets consist of certain licenses and trademarks (Note 7). The licenses will be amortized over the term of each license. The trademarks are expected to contribute to cash flows indefinitely. The intangible assets with finite useful lives are reviewed for impairment when indicators of impairment are present, and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the long-lived assets.

 

 

BRIGHT GREEN CORPORATION

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months and Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 

3. Summary of Significant Accounting Policies (continued)

 

F. Fair Value of Financial Instruments

 

In accordance with ASC 820 (Topic 820, Fair Value Measurements and Disclosures), the Company uses a three-level hierarchy for fair value measurements of certain assets and liabilities for financial reporting purposes that distinguishes between market participant assumptions developed from market data obtained from outside sources (observable inputs) and our own assumptions about market participant assumptions developed from the best information available to us in the circumstances (unobservable inputs). The fair value hierarchy is divided into three levels based on the source of inputs as follows:

 

  ●

Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets;

 

  ●

Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability other than quoted prices, either directly or indirectly including inputs in markets that are not considered to be active; and

 

  ● Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement.

 

Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The carrying amounts of the Company’s cash, other assets, accounts payable, accrued liabilities, due to others, related party short-term note payable and related party line of credit note approximated their fair values as of September 30, 2024, and December 31, 2023, due to their short-term nature. The Company’s investment in Alterola Biotech, Inc. (“Alterola”) was also accounted for at fair value and recorded in “other investment held at fair value” in the condensed consolidated balance sheets. In accordance with the levels defined above, Level 1, the fair value of the Company’s Alterola investment was $nil as of September 30, 2024, and $726,343 as of December 31, 2023. See Note 5 for more information.

 

 


BRIGHT GREEN CORPORATION

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months and Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 

3. Summary of Significant Accounting Policies (continued)

 

G. Other Investment Held at Fair Value

 

In accordance with ASC 825, the Company records its investment at fair value under the “other investment held at fair value” in the Company’s condensed consolidated balance sheets, and changes in fair value are recognized as “change in fair value of assets, net,” a component of “other expense (expense)” in the condensed consolidated statements of operations and comprehensive loss.

 

The Company’s Alterola investment is accounted for at fair value under ASC 321 and recorded in “other investment held at fair value” on the condensed consolidated balance sheets, and changes in fair value are recognized as “change in fair value of assets, net,” a component of “other income (expense)” in the condensed consolidated statements of operations and comprehensive loss (Note 5).

 

H. Advertising Costs

 

Advertising costs are charged to operations when incurred. Advertising costs totaled $39,237 and $33,596 for the nine months ended September 30, 2024 and 2023, respectively.

 

I. Income Taxes

 

The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes. ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

 

Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. The Company has not changed its methodology for estimating the valuation allowance. A change in valuation allowance affects earnings in the period the adjustments are made and could be significant due to the large valuation allowance currently established.

 

Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely to be realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Company has no material uncertain tax positions for any of the reporting periods presented.

 

 


BRIGHT GREEN CORPORATION

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months and Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 

3. Summary of Significant Accounting Policies (continued)

 

J. Basic and Diluted Earnings (Loss) Per Share

 

Basic earnings (loss) per share is calculated using the weighted average number of common shares outstanding during the period. The dilutive effect on earnings (loss) per share is calculated, presuming the exercise of outstanding stock options, warrants, and similar instruments. It assumes that the proceeds of such exercise would be used to repurchase common shares at the average market price during the period.

 

Due to the net loss incurred, potentially dilutive instruments would be anti-dilutive. Accordingly, diluted loss per share is the same as basic loss per share for all periods presented.

 

K. Segment Reporting

 

ASC 280-10, “Disclosures about Segments of an Enterprise and Related Information”, establishes standards for how public business enterprises report information about operating segments in the Company’s condensed consolidated financial statements. Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision-maker in deciding how to allocate resources and in assessing performance. Significantly all of the assets of the Company are located in the United States of America and the Company is a start-up company as at September 30, 2024 and 2023 and has no revenue. The Company’s reportable segments and operating segments will include its growth, production, and research of medicinal plants operations.

 

L. Use of Estimates

 

The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions. The Company bases its estimates and assumptions on current facts, historical experience, various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities, and the accrual of costs and expenses that are not readily apparent from other sources. This applies in particular to valuation allowance for deferred tax assets, valuation of warrants, stock options, and stock-based compensation, going concern assessment, and assignment of the useful lives of property, plant, and equipment. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

 

 


BRIGHT GREEN CORPORATION

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months and Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 

3. Summary of Significant Accounting Policies (continued)

 

M. Stock-Based Compensation

 

The Company accounts for stock-based payments in accordance with the provision of ASC 718, which requires that all stock-based payments issued to acquire goods or services, including grants of employee stock options, be recognized in the condensed consolidated statements of operations and comprehensive loss based on their fair values, net of estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Compensation expense related to stock-based awards is recognized over the requisite service period, which is generally the vesting period.

 

The Company accounts for stock-based compensation awards issued to non-employees for services, as prescribed by ASC 718-10, at either the fair value of the services rendered or the instruments issued in exchange for such services, whichever is more readily determinable, using the guidelines in ASC 505-50. The Company issues compensatory shares for services including, but not limited to, executive management, management, accounting, operations, corporate communication, and financial and administrative consulting services.

 

N. Warrants

 

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB, ASC 480 and ASC 815. The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each condensed consolidated balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the condensed consolidated statements of operations and comprehensive loss.

 

 

BRIGHT GREEN CORPORATION

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months and Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 

3. Summary of Significant Accounting Policies (continued)

 

O. Recently Adopted Accounting Standards

 

In October 2023, the FASB issued ASU No. 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative. The amendments in this update modify the disclosure or presentation requirements of a variety of topics in the codification. Certain amendments represent clarifications to or technical corrections of the current requirements. Each amendment in the ASU will only become effective if the SEC removes the related disclosure or presentation requirement from its existing regulations by June 30, 2027. The Company is currently assessing the impact this standard will have on the Company’s future condensed consolidated financial statements.

 

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments in ASU 2023-07 are intended to enhance disclosures for significant segment expenses for all public entities required to report segment information in accordance with ASC 280. ASC 280 requires a public entity to report for each reportable segment a measure of segment profit or loss that its chief operating decision maker (“CODM”) uses to assess segment performance and to make decisions about resource allocations. The amendments in ASU 2023-07 improve financial reporting by requiring disclosure of incremental segment information on an annual and interim basis for all public entities to enable investors to develop more useful financial analyses. Currently, Topic 280 requires that a public entity disclose certain information about its reportable segments. For example, a public entity is required to report a measure of segment profit or loss that the CODM uses to assess segment performance and make decisions about allocating resources. ASC 280 also requires other specified segment items and amounts, such as depreciation, amortization, and depletion expense, to be disclosed under certain circumstances. The amendments in ASU 2023-07 do not change or remove those disclosure requirements. The amendments in ASU 2023-07 also do not change how a public entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments. The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. A public entity should apply the amendments in ASU 2023-07 retrospectively to all prior periods presented in the financial statements. The Company is currently assessing the impact this standard will have on the Company’s future condensed consolidated financial statements.

 

 

BRIGHT GREEN CORPORATION

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months and Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 

3. Summary of Significant Accounting Policies (continued)

 

P. Recently Issued but Not Adopted Accounting Standards (continued)

 

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in ASU 2023-09 are intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in ASU 2023-09 require annual disclosures of specific categories in the rate reconciliation, additional information for reconciling items that meet a quantitative threshold, and a disaggregation of income taxes paid, net of refunds. The amendments in ASU 2023-09 also eliminate certain existing disclosure requirements related to uncertain tax positions and unrecognized deferred tax liabilities. The amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The amendments in ASU 2023-09 should be applied prospectively. The Company is currently assessing the impact this standard will have on the Company’s future condensed consolidated financial statements.

 

Management does not believe that other recently issued, but not yet effective, accounting standards could have a material effect on the Company’s condensed consolidated financial statements. As new accounting pronouncements are issued, the Company will adopt those that are applicable under the circumstances.

 
v3.24.3
Concentration of Credit Risk
 9 Months Ended
Sep. 30, 2024
Risks and Uncertainties [Abstract]  
Concentration of Credit Risk

4. Concentration of Credit Risk

 

Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash deposits. Accounts at each institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. The Company had $nil in excess of the FDIC insured limit at September 30, 2024 and December 31, 2023.

 
v3.24.3
Other Investment Held at Fair Value
 9 Months Ended
Sep. 30, 2024
Other Investment Held At Fair Value  
Other Investment Held at Fair Value

5. Other Investment Held at Fair Value

 

The Company’s Alterola investment was accounted for at fair value under ASC 321 and presented as “other investment held at fair value” on the condensed consolidated balance sheets. Any changes in fair value of the Company’s Alterola investment were recorded as a change in fair value of assets in its condensed consolidated statements of operations and comprehensive loss. Based on quoted market prices the fair value of the Company’s Alterola investment was $645,638 prior to signing a Settlement and Release Agreement with United Science, LLC (United) and Alterola on March 13, 2024. For the nine months ended September 30, 2024, the Company recorded an $80,705 loss to Change in fair value of assets, net.

 

As part of the Settlement and Release Agreement: 1) a deposit made to United in the amount of approximately $1,100,000 was forfeited; 2) leased equipment was returned to United; 3) 118,535,168 shares of common stock of Alterola were transferred to United in lieu of payment of outstanding invoices totaling approximately $568,000; and 4) 83,226,814 shares of common stock of Alterola were returned to the three shareholders (Equipped4 Holdings Limited (“Equipped”), Phytotherapeutix Holdings Ltd. (“Phyto”), and TPR Global Limited (“TPR”)) who had initially sold the shares to the Company in exchange for settlement of the $1,650,000 remaining balance for the Alterola investment. Equipped, Phyto, and TPR each received approximately 27,742,271 shares of common stock of Alterola. For the nine months ended September 30, 2024, the Company recognized a $1,008,589 gain on extinguishment of debt, as a result of the Settlement and Release Agreement.

 

 

BRIGHT GREEN CORPORATION

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months and Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 

5. Other Investment Held at Fair Value (continued)

 

At September 30, 2024 and December 31, 2023, the other investment held at fair value was $nil and $726,343, respectively.

 
v3.24.3
Property, Plant, and Equipment
 9 Months Ended
Sep. 30, 2024
Property, Plant and Equipment [Abstract]  
Property, Plant, and Equipment

6. Property, Plant, and Equipment

 

The Company owns an expansive 22-acre modern Dutch “Venlo style” glass greenhouse situated on 70 acres in Grants, New Mexico. It is being retrofitted for growing, processing and distribution of medicinal plants, including marijuana, for medical researchers licensed by the Drug Enforcement Administration.

 

Property, plant, and equipment at September 30, 2024 and December 31, 2023 consisted of the following:

 

   September 30, 2024   December 31, 2023 
Furniture and fixtures  $88,690   $88,690 
Land   260,000    260,000 
Construction in progress   10,565,740    10,635,866 
Building and improvements   8,883,851    8,883,851 
Property, plant and equipment gross   19,798,281    19,868,407 
Accumulated depreciation   (3,894,578)   (3,460,992)
Net property, plant, and equipment  $15,903,703   $16,407,415 

 

The amount of interest expense capitalized and included in construction in progress was $39,179 and $223,271 during the periods ended September 30, 2024 and December 31, 2023, respectively (Notes 8 and 11).

 

Since 2020, the Company has had the rights to two land purchase options:

 

-A Real Estate Option Agreement dated October 5, 2020, and expiring on December 31, 2021, for $1,500 monthly payments up until June 30, 2021, and $1,750 monthly payments from July 1, 2021 to December 31, 2021, with a one-year extension starting on January 1, 2022 for $2,000 monthly payments, with the option to purchase 330 acres for $5,000 per acre.

 

-A Real Estate Option Agreement dated October 21, 2020, and expiring on December 31, 2021, for $1,000 monthly payments, with a one-year extension starting on January 1, 2022 for $1,500 monthly payments, with the option to purchase 175 acres for $5,000 per acre.

 

In 2022, the Company notified the two landowners of the Company’s intention to acquire the real estate despite the expiration of the options. The Company is in the process of negotiating final terms of the two acquisitions and intends on closing the acquisitions upon obtaining sufficient financing.

 

 


BRIGHT GREEN CORPORATION

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months and Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 

6. Property, Plant, and Equipment (continued)

 

As of September 30, 2024, the acquisitions have not been completed.

 
v3.24.3
Intangible Assets
 9 Months Ended
Sep. 30, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
Intangible Assets

7. Intangible Assets

 

Intangible assets at September 30, 2024 and December 31, 2023 consisted of the following:

  

   September 30, 2024   December 31, 2023 
Licenses  $1,000   $1,000 
Trademarks   8,010    - 
Intangible assets gross   9,010    1,000 
Accumulated amortization   -    - 
Net intangible assets  $9,010   $1,000 

 
v3.24.3
Related Party Line of Credit Note
 9 Months Ended
Sep. 30, 2024
Related Party Line Of Credit Note  
Related Party Line of Credit Note

8. Related Party Line of Credit Note

 

On June 5, 2022, the Company and LDS Capital LLC (“Lender”), whose managing member is a member of the Company’s Board of Directors (the “Board”), entered into an unsecured line of credit in the form of a note (the “June Note”). The June Note provides that the Company may borrow up to $5.0 million, including an initial loan of $3.0 million, through June 4, 2025 (the “June Note Maturity Date”) from Lender. Prior to the June Note Maturity Date, the Company may borrow up to an additional $2.0 million under the June Note, at Lender’s sole discretion, and subject to the Company’s request of such additional funds from Lender (each loan furnished under the June Note individually, a “Loan,” and collectively, the “Loans”). The Company has the right, but not the obligation, to prepay any Loan, in whole or in part, prior to the June Note Maturity Date. Interest on the unpaid principal amount of any Loan accrues through the earlier of the June Note Maturity Date or the date of prepayment on such Loan, at a rate of 2% per annum plus the Prime Rate (the rate of interest per annum announced from time to time by JP Morgan Chase Bank as its prime rate). If the principal and interest, if any, of any Loan is not paid in full on the June Note Maturity Date, additional penalty interest will accrue on such Loan in the amount of 2% per annum. The Company amended the line of credit on November 14, 2022, to increase the capacity by $10 million. On January 31, 2023, LDS Capital LLC assigned the note to its sole member, Lynn Stockwell, who is the Company’s Chairwoman and majority shareholder.

 

 

BRIGHT GREEN CORPORATION

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months and Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 

8. Related Party Line of Credit Note (continued)

 

August 2024 Amendment

 

On August 19, 2024, the board of directors of the Company approved an amendment and restatement to the June Note pursuant to which, among other things, upon the Lender making a new advance in the principal amount of at least $3,500,000 (the “August Note”). Under the terms of the August Note all obligations due under the note shall be secured by (i) a first lien mortgage on the Company’s fee interest in the real property and improvements thereon, including, without limitation, the land, buildings, fixtures, equipment and machinery located at 1033 George Hanosh Blvd, Grants, NM 87020 (the “Collateralized Property”) and a first priority assignment of leases and rents, (ii) a first priority security interest in all accounts receivable of Company, (iii) an assignment of all contracts, licenses, permits, plans, specifications and other documentation with respect to the Collateralized Property, and (iv) such other collateral as is customary for a loan of this type, including additional real property if the acquisition of such property occurs while this note is outstanding.

 

The August Note also provides for a conversion feature pursuant to which Lender may, at her discretion, convert the outstanding principal and interest balance of the Secured Note into (i) shares of the Company’s Common Stock at a price of $1.15 per share (the “Shares”) and (ii) warrants at a price of $0.13 per warrant, which warrants shall be exercisable into shares of the Company’s Common Stock at an exercise price of $3.00 per share (the “August Warrant Shares”).

 

Additionally, in connection with the entry into the August Note, the Company and the Lender entered into an amendment to the warrants issued to Lender in connection with an September 1, 2023 conversion of $3,619,789 balance on the Note whereby warrants representing a conversion of outstanding principal at $0.13 per warrant to purchase up to 2,827,960 shares of Common Stock at a price of $3.00 per share were issued to Lender. The amendment modified the expiration date of the warrants to be the earlier of (i) the date that is 45 days after the date on which the closing price of the Company’s Common Stock equals or exceeds $3.00 per share, and (ii) August 31, 2027.

 

The new advance in the principal amount of at least $3,500,000 was not funded by the Lender and the Note was further amended in September 2024.

 

September 2024 Amendment

 

On September 16, 2024, the Company and Lynn Stockwell entered into a Secured Amended and Restated Line of Credit Note, amending and restating the terms of the original note entered into on November 14, 2022, which was originally amended and restated August 19, 2024 (as amended and restated, the “September Note”).

 

The September Note reduced the new advance in principal under the August Note from $3,500,000 to $2,500,000.

 

The September Note also modified the conversion feature of the August Note. Under the September Note, at Lender’s discretion, the Lender may convert up to $4 million of the outstanding principal and interest balance of the Note into shares of the Company’s newly designated Series A Preferred Stock, par value $0.0001 (the “Series A Preferred Stock”) at a conversion price of $0.40 per share. Each share of Series A Preferred Stock, subject to the Stockholder Approval, shall be convertible at the election of the Lender (or automatically if the balance is not repaid by December 31, 2024), into 14 shares of the Company’s common stock, par value $0.0001 per share. Each share of Series A Preferred Stock is generally entitled to one vote per share.

 

As of November 19, 2024, the $2,500,000 has not been funded.

 

 

BRIGHT GREEN CORPORATION

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months and Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 

8. Related Party Line of Credit Note (continued)

 

As of September 30, 2024, the Lender has funded the Company $6,547,603 (December 31, 2023 – $5,983,250), with the Company paying back $6,260,855 (December 31, 2023 – $6,110,855) of those funds, which includes $327,605 in interest. As of September 30, 2024, there was accrued interest of $25,963 (December 31, 2023 – $1,783). The funds have been used for the construction in progress, and during the nine months ended September 30, 2024, interest expense of $24,179 (December 31, 2023 – $223,271) has been capitalized (Note 6).

 
v3.24.3
Stockholders’ Equity
 9 Months Ended
Sep. 30, 2024
Equity [Abstract]  
Stockholders’ Equity

9. Stockholders’ Equity

 

The Company has authorized 500,000,000 shares of $0.0001 par value common stock and 10,000,000 shares of $0.0001 par value preferred stock. As of September 30, 2024 and December 31, 2023, there were 191,166,318 and 184,758,818, respectively, of shares of common stock issued and outstanding. The Company has not issued any shares of preferred stock to date.

 

During the nine months ended September 30, 2024, the Company issued the following:

 

-450,000 shares of common stock for services rendered, at a fair value of $0.2116 per share, to four consultants of the Company, in January 2024;

 

-2,537,500 shares of common stock for services rendered, at a fair value of $0.1760 per share, to the Company’s former Executive Chairman, in February 2024;

 

-2,420,000 shares of common stock at a fair value of $0.1760 per share to the Company’s former Executive Chairman, in February 2024, in lieu of unpaid cash remuneration and bonus compensation during his tenure with the Company; and

 

-1,000,000 shares of common stock issued to the Company’s Chief Executive Officer, in July 2024, for redemption of 1,000,000 vested RSUs.

 

During the nine months ended September 30, 2023, the Company issued the following:

 

-200,000 warrants exercised in exchange for 200,000 shares of common stock issued for cash at $1.05 per share, to one accredited investor in February 2023;

 

-22,005 shares of common stock issued at $39.99 per share, to a member of the Board in February 2023, through a cashless conversion; the related party line of credit note was paid down $880,000 in exchange for an $880,000 investment, pursuant to the Company’s EB-5 Program;

 

 

BRIGHT GREEN CORPORATION

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months and Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 

9. Stockholders’ Equity (continued)

 

-22,005 shares of common stock issued at $39.99 per share, to one accredited investor in March 2023, pursuant to the Company’s EB-5 Program;

 

-875,000 shares of common stock for services rendered, at a fair value of $0.9416 per share, to the Company’s former Executive Chairman, in March 2023;

 

-500,000 shares of common stock for services rendered, at a fair value of $1.13 per share, to the Company’s former Chief Executive Officer, in May 2023;

 

-3,684,210 shares of common stock and warrants to purchase up to an aggregate of 3,684,210 shares of common stock, at a combined purchase price of $0.95 per share and accompanying warrant, in a private placement offering, in May 2023 (the “May 2023 Private Placement”);

 

-875,000 shares of common stock for services rendered, at a fair value of $1.01 per share, to the Company’s former Executive Chairman, in June 2023;

 

-137,838 shares of common stock for services rendered, at a fair value of $0.74 per share, to a consultant of the Company, in July 2023;

 

-2,827,960 shares of common stock and warrants to purchase up to an aggregate of 2,827,960 shares of common stock at an exercise price of $3.00 per share, issued at a combined price of $1.28 per share and accompanying warrant, to a member of the Board, through a cashless conversion; the related party line of credit note was paid in full $3,619,789 in exchange for a $3,619,789 investment, in September 2023;

 

-60,000 shares of common stock for services rendered, at a fair value of $0.4015 per share, to a consultant of the Company, in September 2023;

 

-500,000 shares of common stock for services rendered, at a fair value of $0.4015 per share, to the Company’s Chief Financial Officer, in September 2023; and

 

-875,000 shares of common stock for services rendered, at a fair value of $0.3959 per share, to the Company’s Executive Chairman, in September 2023.

 

Common stock payable for EB-5 program

 

During the nine months ended September 30, 2024 and December 31, 2023, the Company recorded $800,000 and $nil, respectively, of common stock payable related to common stock to be issued upon receipt of signed agreement, to one accredited investor pursuant to the Company’s EB-5 program. The common stock payable for the EB-5 Program comprised 400,000 shares to be issued at a purchase price of $2.00 per share, for gross cash proceeds received of $880,000, including administrative fee income of $80,000.

 

 

BRIGHT GREEN CORPORATION

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months and Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 

9. Stockholders’ Equity (continued)

 

Private Placement Offerings

 

September 2022 Private Placement

 

On September 7, 2022, the Company entered into a Securities Purchase Agreement with investors for the sale by the Company of 9,523,810 shares of common stock and warrants to purchase up to an aggregate of 9,523,810 shares of common stock. The combined purchase price of one share and the accompanying warrant (“September 2022 Warrants”) was $1.05. Subject to certain ownership limitations, the September 2022 Warrants are exercisable immediately after issuance at an exercise price equal to $1.05 per share of Common Stock, subject to adjustments as provided under the terms of the September 2022 Warrants. The September 2022 Warrants have a term of five years from the date of issuance. The September 2022 Private Placement closed on September 12, 2022. The Company received gross proceeds of approximately $10 million before deducting transaction-related fees and expenses payable by the Company. As of September 30, 2024, 200,000 of the September 2022 Warrants have been redeemed for $210,000.

 

In connection with the September 2023 Private Placement, the Company entered into a Registration Rights Agreement with the investors. The Company’s registration statement on Form S-1 to register the securities issued in the September 2022 Private Placement went effective on September 21, 2022.

 

Transaction costs incurred related to the September 2022 Private Placement include the following: (i) placement agent fees of $800,000, (ii) legal expenses of $55,617, and (iii) escrow agent expenses of $7,650.

 

May 2023 Private Placement

 

On May 21, 2023, the Company entered into a Securities Purchase Agreement with an accredited investor and existing stockholder of the Company. The combined purchase price of one share and the accompanying warrant (“May 2023 Warrants”) was $0.95. Subject to certain ownership limitations, the May 2023 Warrants are exercisable immediately after issuance at an exercise price equal to $0.95 per share of Common Stock, subject to adjustments as provided under the terms of the May 2023 Warrants. The May 2023 Warrants have a term of five years from the date of issuance. The May 2023 Private Placement closed on May 24, 2023. The Company received gross proceeds of approximately $3.5 million before deducting transaction related fees and expenses payable by the Company.

 

In connection with the May 2023 Private Placement, the Company entered into a Registration Rights Agreement with the investor. The Company’s registration statement on Form S-3 to register the securities issued in the May 2023 Private Placement went effective on June 5, 2023.

 

Transaction costs incurred related to the May 2023 Private Placement include the following: (i) placement agent fees of $316,850, and (ii) legal expenses of $78,400.

 

 

BRIGHT GREEN CORPORATION

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months and Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 

9. Stockholders’ Equity (continued)

 

Warrants

 

September 2022 Warrants

 

In the Company’s September 2022 Private Placement, warrants to purchase up to 9,523,810 shares of Common Stock were issued (“September 2022 Warrants”). The September 2022 Warrants were initially exercisable at a price of $1.05 per share, subject to adjustment as set forth in the September 2022 Warrants, at any time after September 12, 2022, and will expire on September 13, 2027. In connection with the May 2023 Private Placement, the exercise price of the September 2022 Warrants issued in the September 2022 Private Placement was reduced to $0.95 per share.

 

The fair value of the September 2022 Warrants immediately prior to the modification was $7,399,000, and the fair value of the September 2022 Warrants immediately after the modification was $6,901,000, representing a decrease in fair value of $498,000. In accordance with ASU 2021- 04, as the modification was a result of issuing equity and there was no increase in fair value, the Company accounted for the adjustment as a reduction of additional paid-in capital with a corresponding offset recorded to additional paid-in capital.

 

May 2023 Warrants

 

In the Company’s May 2023 Private Placement, warrants to purchase up to 3,684,210 shares of Common Stock were issued (“May 2023 Warrants”). The fair value of the May 2023 Warrants was determined utilizing a Black Scholes model considering all relevant assumptions current at the date of issuance (i.e., share price of $0.78, exercise price of $0.95, term of five years, volatility of 165.0%, risk-free rate of 3.8%, and dividend rate of 0.0%). The grant date fair value of the May 2023 Warrants was estimated to be $1.6 million on May 24, 2023, and is reflected within additional paid-in capital.

 

September 2023 Warrants

 

In connection with the repayment obligation of the related party line of credit note in September 2023, warrants to purchase up to 2,827,960 shares of Common Stock were issued (“September 2023 Warrants”). The fair value of the September 2023 Warrants was determined utilizing a Monte Carlo simulation considering all relevant assumptions current at the date of issuance (i.e., share price of $0.46, exercise price of $3.00, expected life of one year, volatility of 149%, risk-free rate of 5.36%, and dividend rate of 0.0%). The grant date fair value of the September 2023 Warrants was estimated to be approximately $149,180 on September 1, 2023, and is reflected within additional paid-in capital.

 

 

BRIGHT GREEN CORPORATION

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months and Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 
v3.24.3
Stock-Based Compensation
 9 Months Ended
Sep. 30, 2024
Retirement Benefits [Abstract]  
Stock-Based Compensation

10. Stock-Based Compensation

 

In 2022, the Company adopted the Bright Green Corporation 2022 Omnibus Equity Compensation Plan, which allows for various types of stock-based awards. These awards can be in the form of stock options (including non-qualified and incentive stock options), stock appreciation rights (“SARs”), restricted shares, performance shares, deferred stock, restricted stock units (“RSUs”), dividend equivalents, bonus shares, or other types of stock-based awards.

 

As of September 30, 2024 and 2023, there were 8,626,612 and 625,000, respectively, of awards granted under the Plan. The awards consisted of 2,288,403 shares of stock options and 6,338,209 shares of RSUs as of September 30, 2024 and 625,000 shares of stock options and 625,000 shares of RSUs as of September 30, 2023.

 

The Company’s stock-based compensation costs for the nine months ended September 30, 2024 and 2023 were $1,028,357 and $2,945,903 respectively, with the costs allocated to general and administrative expenses. Stock options accounted for $73,749 and $nil and RSUs accounted for $412,688 and $nil of the total stock-based compensation costs for the nine months ended September 30, 2024 and 2023, respectively.

 

Stock Options

 

The Company uses the Black-Scholes option-pricing model to value stock option grants to employees, non-employees, and directors. The fair value of the Company’s common stock is used to determine the fair value of stock options. The Black-Scholes option pricing model requires inputs based on certain subjective assumptions, including (i) the expected stock price volatility, (ii) the expected term of the award, (iii) the risk-free interest rate, and (iv) expected dividends. The historical volatility is calculated based on a period of time commensurate with the expected term assumption. The Company uses the simplified method to calculate the expected term for options granted to employees whereby the expected term equals the arithmetic average of the vesting term and the original contractual term of the options due to its lack of sufficient historical data. The risk-free interest rate is based on U.S. Treasury securities with a maturity date commensurate with the expected term of the associated award. The expected dividend yield is assumed to be zero as the Company has never paid dividends and has no current plans to pay any dividends on its common stock. The Company recognizes forfeitures as they occur.

 

The fair value of the stock options was estimated using the following assumptions:

 

   2024   2023 
Weighted average fair value at grant date  $0.2013   $0.3303 
Valuation assumptions:          
Expected life of options (years)   5.00    5.00 
Expected stock volatility   186.90%   213.90%
Risk-free interest rate   4.54%   4.42%
Expected dividend yield   0.00%   0.00%

 

 

BRIGHT GREEN CORPORATION

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months and Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 

10. Stock-Based Compensation (continued)

 

During the nine months ended September 30, 2024, the Company’s stock option activity was as follows:

 

-On March 31, 2024, 625,000 shares of unvested stock options granted to the Chief Executive Officer of the Company in September 2023 were canceled by mutual agreement between the Company and the Chief Executive Officer.

 

-On May 23, 2024, the Company granted 488,403 time-based stock options to the Company’s Chairwoman and majority shareholder, as well as to two Directors. The stock options vest 4/12ths upon issuance, and the remaining in equal increments on the last day of each month for the next eight months, with full vesting on December 31, 2024.

 

During the nine months ended September 30, 2023, there were 625,000 shares of stock options issued to the Company’s Chief Executive Officer on September 20, 2023, which were subsequently canceled and replaced as of March 31, 2024 by mutual agreement between the Company and the Chief Executive Officer.

 

The following table summarizes stock option activity for the nine months ended September 30, 2024:

 

   Stock Options Outstanding & Exercisable 
           Weighted Average 
   Number of   Weighted Average   Remaining Life 
   Stock Options   Exercise Price   (Years) 
Outstanding as at December 31, 2023   2,425,000   $0.3353    9.90 
Granted   488,403    0.3276    9.90 
Exercised   -    -      
Expired/Canceled   (625,000)   0.3353      
Outstanding as at September 30, 2024   2,288,403   $0.3337    9.50 
Exercisable as at September 30, 2024   2,166,302   $0.3340    9.60 

 

Restricted Stock Units

 

The Company accounts for the fair value of restricted stock units (“RSUs”) using the closing market price of the Company’s common stock on the date of the grant. Stock-based compensation cost for RSUs is measured at the grant date based on the estimated fair value of the award and is recognized as expense over the requisite service period (generally the vesting period), net of forfeitures.

 

During the nine months ended September 30, 2024, the Company’s restricted stock unit activity was as follows:

 

-On March 7, 2024, the Company granted 600,000 shares of time-based RSUs, which vest in equal monthly installments over a period of one year beginning March 7, 2024, to the Chief Financial Officer of the Company;

 

 

BRIGHT GREEN CORPORATION

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months and Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 

10. Stock-Based Compensation (continued)

 

-On March 31, 2024, 625,000 shares of RSUs granted to the Chief Executive Officer of the Company in September 2023 were canceled by mutual agreement and replaced with 5,500,000 RSUs, which consisted of both time-based and performance-based RSUs. The Company granted 500,000 RSUs that vested on March 31, 2024, 3,000,000 RSUs that vest ratably over a period of twenty-four months beginning April 2, 2024, and the remaining 2,000,000 RSUs that vest upon the achievement of certain milestones;

 

-On May 23, 2024, the Company granted 238,209 shares of time-based RSUs to a Director of the Company, which vest 2/10ths upon issuance and the remaining in equal increments on the last day of each month for the next eight months, with full vesting on December 31, 2024; and

 

-On July 15, 2024, the Company’s Chief Executive Officer redeemed 1,000,000 vested RSUs for 1,000,000 shares of common stock.

 

During the nine months ended September 30, 2023, there were 625,000 RSUs issued to the Company’s Chief Executive Officer on September 20, 2023, which were subsequently canceled and replaced with 5,500,000 RSUs as of March 31, 2024 by mutual agreement between the Company and Chief Executive Officer.

 

The following table summarizes restricted stock unit activity for the nine months ended September 30, 2024:

 

   Nonvested RSUs 
       Weighted Average 
   Number of   Fair Value 
   RSUs   (Grant Date) 
Balance, December 31, 2023   625,000   $0.3848 
Granted   6,338,209    0.2397 
Vested   (1,756,198)   0.1310 
Forfeited/Canceled   (625,000)   0.3848 
Balance, September 30, 2024   4,582,011   $0.2814 

 
v3.24.3
Related Party Transactions
 9 Months Ended
Sep. 30, 2024
Related Party Transactions [Abstract]  
Related Party Transactions

11. Related Party Transactions

 

Other than the transactions disclosed elsewhere in the condensed consolidated financial statements, the following are the other significant related party transactions and balances:

 

Included in common stock issued for services during the nine months ended September 30, 2024, were 4,957,500 shares of common stock issued to the former Executive Chairman of the Company for services rendered, unpaid cash remuneration, and bonus compensation (Note 9).

 

Included in stock-based awards granted during the nine months ended September 30, 2024, were 5,500,000 shares of RSUs granted to the Chief Executive Officer of the Company. On March 31, 2024, 625,000 shares of RSUs that were granted in September 2023 were canceled by mutual agreement between the Company and the Chief Executive Officer (Note 10).

 

 

BRIGHT GREEN CORPORATION

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months and Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 

11. Related Party Transactions (continued)

 

Included in stock-based awards granted during the nine months ended September 30, 2024, were 600,000 shares of RSUs granted to the Chief Financial Officer of the Company (Note 10).

 

Included in stock-based awards granted during the nine months ended September 30, 2024, were 238,209 shares of RSUs granted to a Director of the Company (Note 10).

 

Included in stock-based awards granted during the nine months ended September 30, 2024, were 488,403 shares of stock options granted to two Directors of the Company and to the Company’s Chairwoman and majority shareholder (Note 10).

 

At September 30, 2024 and December 31, 2023, $23,682 and $23,460, respectively, was due to a company majority owned by the Company’s former Chief Executive Officer. The amount is included in accounts payable in the condensed consolidated balance sheets.

 

At September 30, 2024 and December 31, 2023, $196,082 and $68,037, respectively, was due to a company wholly owned by the Company’s Chief Financial Officer, who also is a shareholder. The amount is included in accounts payable in the condensed consolidated balance sheets.

 

At September 30, 2024 and December 31, 2023, $299,864, and $66,667, respectively, was due to a company wholly owned by the Company’s Chief Executive Officer. The amount is included in accounts payable in the condensed consolidated balance sheets.

 

At September 30, 2024 and December 31, 2023, $400,000 and $400,000, respectively, was due to a firm that has one of its partners serving on the Company’s Board of Directors. The amount is included in accounts payable in the condensed consolidated balance sheets.

 

At September 30, 2024, $165,000 short-term note payable in the condensed consolidated balance sheets, was due to a Lender, whose company is owned and controlled by a member of the Company’s Board of Directors. The balance includes $15,000 of interest expense that was capitalized and included in construction in progress (Note 6). The note is personally guaranteed by the Company’s Chairwoman and majority shareholder and the principal and interest are payable on or before December 31, 2024.

 

At September 30, 2024, the outstanding balance on the related party line of credit of $640,315 in the condensed consolidated balance sheets, was due to a Lender, who is the Company’s Chairwoman and majority shareholder (Note 8).

 

 

BRIGHT GREEN CORPORATION

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months and Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 
v3.24.3
Contingencies
 9 Months Ended
Sep. 30, 2024
Commitments and Contingencies Disclosure [Abstract]  
Contingencies

12. Contingencies

 

In the ordinary course of business, the Company is routinely defendants in, or parties to a number of pending and threatened legal actions including actions brought on behalf of various classes of claimants. In view of the inherent difficulty of predicting the outcome of such matters, the Company cannot state what the eventual outcome of such matters will be. Legal provisions are established when it becomes probable that the Company will incur an expense related to a legal action and the amount can be reliably estimated. Such provisions are recorded at the best estimate of the amount required to settle any obligation related to these legal actions as at the balance sheet date, taking into account the risks and uncertainties surrounding the obligation. Management and internal and external experts are involved in estimating any amounts that may be required. The actual costs of resolving these claims may vary significantly from the amount of the legal provisions. The Company’s estimate involves significant judgement, given the varying stages of the proceedings, the fact that the Company’s liability, if any, has yet to be determined and the fact that the underlying matters will change from time to time. Other than as set forth below, the Company is not presently a party to any litigation. The Company is not able to make a reliable assessment of the potential losses as these matters are at an early stage, accordingly, no amounts have been accrued in the condensed consolidated financial statements.

 

Bright Green Corporation v. John Fikany, State of New Mexico, County of Cibola, Thirteenth Judicial District. In this matter, the Company filed a complaint for declaratory judgment against a consultant of the Bright Green Group of Companies, an entity unrelated to the Company, to determine if defendant is entitled to 5,000,000 shares of the Company’s common stock, based on a failure to fulfill agreed upon conditions precedent to earning such shares from the Company. Defendant counterclaimed and filed a third-party claim against a director of the Company, and her spouse, for claims including wrongful termination and breach of contract. The Company denies defendants allegations and has set forth arguments refuting defendant’s counterclaims and third-party claims. The case proceeded to trial on the declaratory judgment action, and the Court determined in late August 2024 that Bright Green Corporation was not entitled to cancel Defendant’s shares. The Company disagrees with the Court’s determination but has made arrangements to issue but not deliver the shares until the matter can be appealed. The jury trial on the counterclaim for breach of employment contract is set for February 2025.

 

Bright Green Corporation v. Jerry Capussi, State of New Mexico, County of Cibola, Thirteenth Judicial District. In this matter, the Company and defendant, a former consultant of Sunnyland Farms Inc., an entity unrelated to the Company, have each filed claims for declaratory judgment seeking to determine by court order whether defendant is entitled to (i) shares of common stock in the Company (amounting to no more than 108,000 shares) or (ii) fair market value of defendant’s equity ownership of Bright Green Grow Innovations, LLC, a predecessor company of Bright Green Corporation. The lawsuit is in early discovery stages, and the Company is preparing arguments for a summary judgment motion. There are no claims for specific monetary liability against either party. The case has not progressed significantly, and the Company is considering dismissing its claim.

 
v3.24.3
Subsequent Events
 9 Months Ended
Sep. 30, 2024
Subsequent Events [Abstract]  
Subsequent Events

13. Subsequent Events

 

The Company’s management has evaluated the subsequent events up to November 19, 2024, the date the condensed consolidated financial statements were issued, pursuant to the requirements of ASC 855, and has determined that there are no material subsequent events to disclose.
v3.24.3
Summary of Significant Accounting Policies (Policies)
 9 Months Ended
Sep. 30, 2024
Accounting Policies [Abstract]  
Basis of Measurement

A. Basis of Measurement

 

The condensed consolidated financial statements of the Company have been prepared on a historical cost basis except as indicated otherwise.

 

 

BRIGHT GREEN CORPORATION

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months and Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 

3. Summary of Significant Accounting Policies (continued)

 
Principles of Consolidation

  B. Principles of Consolidation

 

The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Regional Center Bright Green, LLC. Intercompany transactions and balances have been eliminated upon consolidation.

 
Property, Plant, and Equipment

C. Property, Plant, and Equipment

 

Property, plant, and equipment are stated at cost less accumulated depreciation. Expenditures for maintenance and repairs are charged to earnings as incurred; additions, renewals, and betterments are capitalized. When property, plant, and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation of property, plant, and equipment, except land, which is not depreciated, is provided using the declining balance method, or straight-line method, with estimated lives as follows:

  

Building and improvement - declining balance method  10 year life
Furniture and fixtures - straight-line method  3 year life

 

Construction in progress is not depreciated until the asset is placed in service.

 
Long-lived Assets

D. Long-lived Assets

 

The Company applies the provisions of ASC Topic 360, Property, Plant, and Equipment, which addresses financial accounting and reporting for the impairment or disposal of long-lived assets. ASC Topic 360 requires that long-lived assets be reviewed annually for impairment whenever events or changes in circumstances indicate that the assets’ carrying amounts may not be recoverable; it further requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner, except that fair values are reduced for the cost of disposal.

 
Intangible Assets

E. Intangible Assets

 

The Company’s intangible assets consist of certain licenses and trademarks (Note 7). The licenses will be amortized over the term of each license. The trademarks are expected to contribute to cash flows indefinitely. The intangible assets with finite useful lives are reviewed for impairment when indicators of impairment are present, and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the long-lived assets.

 

 

BRIGHT GREEN CORPORATION

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months and Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 

3. Summary of Significant Accounting Policies (continued)

 
Fair Value of Financial Instruments

F. Fair Value of Financial Instruments

 

In accordance with ASC 820 (Topic 820, Fair Value Measurements and Disclosures), the Company uses a three-level hierarchy for fair value measurements of certain assets and liabilities for financial reporting purposes that distinguishes between market participant assumptions developed from market data obtained from outside sources (observable inputs) and our own assumptions about market participant assumptions developed from the best information available to us in the circumstances (unobservable inputs). The fair value hierarchy is divided into three levels based on the source of inputs as follows:

 

  ●

Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets;

 

  ●

Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability other than quoted prices, either directly or indirectly including inputs in markets that are not considered to be active; and

 

  ● Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement.

 

Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The carrying amounts of the Company’s cash, other assets, accounts payable, accrued liabilities, due to others, related party short-term note payable and related party line of credit note approximated their fair values as of September 30, 2024, and December 31, 2023, due to their short-term nature. The Company’s investment in Alterola Biotech, Inc. (“Alterola”) was also accounted for at fair value and recorded in “other investment held at fair value” in the condensed consolidated balance sheets. In accordance with the levels defined above, Level 1, the fair value of the Company’s Alterola investment was $nil as of September 30, 2024, and $726,343 as of December 31, 2023. See Note 5 for more information.

 

 


BRIGHT GREEN CORPORATION

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months and Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 

3. Summary of Significant Accounting Policies (continued)

 
Other Investment Held at Fair Value

G. Other Investment Held at Fair Value

 

In accordance with ASC 825, the Company records its investment at fair value under the “other investment held at fair value” in the Company’s condensed consolidated balance sheets, and changes in fair value are recognized as “change in fair value of assets, net,” a component of “other expense (expense)” in the condensed consolidated statements of operations and comprehensive loss.

 

The Company’s Alterola investment is accounted for at fair value under ASC 321 and recorded in “other investment held at fair value” on the condensed consolidated balance sheets, and changes in fair value are recognized as “change in fair value of assets, net,” a component of “other income (expense)” in the condensed consolidated statements of operations and comprehensive loss (Note 5).

 
Advertising Costs

H. Advertising Costs

 

Advertising costs are charged to operations when incurred. Advertising costs totaled $39,237 and $33,596 for the nine months ended September 30, 2024 and 2023, respectively.

 
Income Taxes

I. Income Taxes

 

The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes. ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

 

Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. The Company has not changed its methodology for estimating the valuation allowance. A change in valuation allowance affects earnings in the period the adjustments are made and could be significant due to the large valuation allowance currently established.

 

Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely to be realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Company has no material uncertain tax positions for any of the reporting periods presented.

 

 


BRIGHT GREEN CORPORATION

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months and Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 

3. Summary of Significant Accounting Policies (continued)

 
Basic and Diluted Earnings (Loss) Per Share

J. Basic and Diluted Earnings (Loss) Per Share

 

Basic earnings (loss) per share is calculated using the weighted average number of common shares outstanding during the period. The dilutive effect on earnings (loss) per share is calculated, presuming the exercise of outstanding stock options, warrants, and similar instruments. It assumes that the proceeds of such exercise would be used to repurchase common shares at the average market price during the period.

 

Due to the net loss incurred, potentially dilutive instruments would be anti-dilutive. Accordingly, diluted loss per share is the same as basic loss per share for all periods presented.

 
Segment Reporting

K. Segment Reporting

 

ASC 280-10, “Disclosures about Segments of an Enterprise and Related Information”, establishes standards for how public business enterprises report information about operating segments in the Company’s condensed consolidated financial statements. Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision-maker in deciding how to allocate resources and in assessing performance. Significantly all of the assets of the Company are located in the United States of America and the Company is a start-up company as at September 30, 2024 and 2023 and has no revenue. The Company’s reportable segments and operating segments will include its growth, production, and research of medicinal plants operations.

 
Use of Estimates

L. Use of Estimates

 

The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions. The Company bases its estimates and assumptions on current facts, historical experience, various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities, and the accrual of costs and expenses that are not readily apparent from other sources. This applies in particular to valuation allowance for deferred tax assets, valuation of warrants, stock options, and stock-based compensation, going concern assessment, and assignment of the useful lives of property, plant, and equipment. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

 

 


BRIGHT GREEN CORPORATION

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months and Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 

3. Summary of Significant Accounting Policies (continued)

 
Stock-Based Compensation

M. Stock-Based Compensation

 

The Company accounts for stock-based payments in accordance with the provision of ASC 718, which requires that all stock-based payments issued to acquire goods or services, including grants of employee stock options, be recognized in the condensed consolidated statements of operations and comprehensive loss based on their fair values, net of estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Compensation expense related to stock-based awards is recognized over the requisite service period, which is generally the vesting period.

 

The Company accounts for stock-based compensation awards issued to non-employees for services, as prescribed by ASC 718-10, at either the fair value of the services rendered or the instruments issued in exchange for such services, whichever is more readily determinable, using the guidelines in ASC 505-50. The Company issues compensatory shares for services including, but not limited to, executive management, management, accounting, operations, corporate communication, and financial and administrative consulting services.

 
Warrants

N. Warrants

 

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB, ASC 480 and ASC 815. The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each condensed consolidated balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the condensed consolidated statements of operations and comprehensive loss.

 

 

BRIGHT GREEN CORPORATION

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months and Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 

3. Summary of Significant Accounting Policies (continued)

 
Recently Adopted Accounting Standards

O. Recently Adopted Accounting Standards

 

In October 2023, the FASB issued ASU No. 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative. The amendments in this update modify the disclosure or presentation requirements of a variety of topics in the codification. Certain amendments represent clarifications to or technical corrections of the current requirements. Each amendment in the ASU will only become effective if the SEC removes the related disclosure or presentation requirement from its existing regulations by June 30, 2027. The Company is currently assessing the impact this standard will have on the Company’s future condensed consolidated financial statements.

 

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments in ASU 2023-07 are intended to enhance disclosures for significant segment expenses for all public entities required to report segment information in accordance with ASC 280. ASC 280 requires a public entity to report for each reportable segment a measure of segment profit or loss that its chief operating decision maker (“CODM”) uses to assess segment performance and to make decisions about resource allocations. The amendments in ASU 2023-07 improve financial reporting by requiring disclosure of incremental segment information on an annual and interim basis for all public entities to enable investors to develop more useful financial analyses. Currently, Topic 280 requires that a public entity disclose certain information about its reportable segments. For example, a public entity is required to report a measure of segment profit or loss that the CODM uses to assess segment performance and make decisions about allocating resources. ASC 280 also requires other specified segment items and amounts, such as depreciation, amortization, and depletion expense, to be disclosed under certain circumstances. The amendments in ASU 2023-07 do not change or remove those disclosure requirements. The amendments in ASU 2023-07 also do not change how a public entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments. The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. A public entity should apply the amendments in ASU 2023-07 retrospectively to all prior periods presented in the financial statements. The Company is currently assessing the impact this standard will have on the Company’s future condensed consolidated financial statements.

 

 

BRIGHT GREEN CORPORATION

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three Months and Nine Months Ended September 30, 2024 and 2023

(Expressed in United States Dollars)

 

3. Summary of Significant Accounting Policies (continued)

 
Recently Issued but Not Adopted Accounting Standards

P. Recently Issued but Not Adopted Accounting Standards (continued)

 

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in ASU 2023-09 are intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in ASU 2023-09 require annual disclosures of specific categories in the rate reconciliation, additional information for reconciling items that meet a quantitative threshold, and a disaggregation of income taxes paid, net of refunds. The amendments in ASU 2023-09 also eliminate certain existing disclosure requirements related to uncertain tax positions and unrecognized deferred tax liabilities. The amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The amendments in ASU 2023-09 should be applied prospectively. The Company is currently assessing the impact this standard will have on the Company’s future condensed consolidated financial statements.

 

Management does not believe that other recently issued, but not yet effective, accounting standards could have a material effect on the Company’s condensed consolidated financial statements. As new accounting pronouncements are issued, the Company will adopt those that are applicable under the circumstances.
v3.24.3
Summary of Significant Accounting Policies (Tables)
 9 Months Ended
Sep. 30, 2024
Accounting Policies [Abstract]  
Schedule of Estimated Useful Life

  

Building and improvement - declining balance method  10 year life
Furniture and fixtures - straight-line method  3 year life
v3.24.3
Property, Plant, and Equipment (Tables)
 9 Months Ended
Sep. 30, 2024
Property, Plant and Equipment [Abstract]  
Schedule of Property Plant and Equipment

Property, plant, and equipment at September 30, 2024 and December 31, 2023 consisted of the following:

 

   September 30, 2024   December 31, 2023 
Furniture and fixtures  $88,690   $88,690 
Land   260,000    260,000 
Construction in progress   10,565,740    10,635,866 
Building and improvements   8,883,851    8,883,851 
Property, plant and equipment gross   19,798,281    19,868,407 
Accumulated depreciation   (3,894,578)   (3,460,992)
Net property, plant, and equipment  $15,903,703   $16,407,415 
v3.24.3
Intangible Assets (Tables)
 9 Months Ended
Sep. 30, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of Intangible Assets

Intangible assets at September 30, 2024 and December 31, 2023 consisted of the following:

  

   September 30, 2024   December 31, 2023 
Licenses  $1,000   $1,000 
Trademarks   8,010    - 
Intangible assets gross   9,010    1,000 
Accumulated amortization   -    - 
Net intangible assets  $9,010   $1,000 
v3.24.3
Stock-Based Compensation (Tables)
 9 Months Ended
Sep. 30, 2024
Retirement Benefits [Abstract]  
Schedule of Stock Option

The fair value of the stock options was estimated using the following assumptions:

 

   2024   2023 
Weighted average fair value at grant date  $0.2013   $0.3303 
Valuation assumptions:          
Expected life of options (years)   5.00    5.00 
Expected stock volatility   186.90%   213.90%
Risk-free interest rate   4.54%   4.42%
Expected dividend yield   0.00%   0.00%
Schedule of Summarizes Stock Option Activity

The following table summarizes stock option activity for the nine months ended September 30, 2024:

 

   Stock Options Outstanding & Exercisable 
           Weighted Average 
   Number of   Weighted Average   Remaining Life 
   Stock Options   Exercise Price   (Years) 
Outstanding as at December 31, 2023   2,425,000   $0.3353    9.90 
Granted   488,403    0.3276    9.90 
Exercised   -    -      
Expired/Canceled   (625,000)   0.3353      
Outstanding as at September 30, 2024   2,288,403   $0.3337    9.50 
Exercisable as at September 30, 2024   2,166,302   $0.3340    9.60 
Schedule of Restricted Stock Unit

The following table summarizes restricted stock unit activity for the nine months ended September 30, 2024:

 

   Nonvested RSUs 
       Weighted Average 
   Number of   Fair Value 
   RSUs   (Grant Date) 
Balance, December 31, 2023   625,000   $0.3848 
Granted   6,338,209    0.2397 
Vested   (1,756,198)   0.1310 
Forfeited/Canceled   (625,000)   0.3848 
Balance, September 30, 2024   4,582,011   $0.2814 
v3.24.3
Description of Business and Organization (Details Narrative) - USD ($)
 9 Months Ended
May 21, 2023
Feb. 01, 2023
Sep. 30, 2024
Sep. 30, 2023
Mar. 29, 2024
Dec. 31, 2023
Sep. 21, 2022
Entity Incorporation, Date of Incorporation     Apr. 16, 2019        
Shares authorize     500,000,000     500,000,000  
Common stock, par value     $ 0.0001     $ 0.0001  
Revenue     $ 0        
Common Stock [Member]              
Aggregate shares of common stock issued       22,005      
Warrants to purchase shares       3,684,210      
Common Stock [Member] | Accredited Investor and Existing Stockholder [Member]              
Number of shares sold 3,684,210            
Common stock, par value $ 0.0001            
Private Placement [Member]              
Price per share   $ 39.99     $ 2.00    
Shares authorize         20,000,000    
Warrants to purchase shares             9,523,810
Exercise price             $ 1.05
Private Placement [Member] | Accredited Investor and Existing Stockholder [Member]              
Warrants to purchase shares 3,684,210            
Exercise price $ 0.95            
Private Placement [Member] | Common Stock [Member]              
Investors offering     $ 800,000        
Exchange shares of common stock     200,000        
Private Placement [Member] | Maximum [Member]              
Aggregate shares of common stock issued   12,609,152          
v3.24.3
Going Concern and Basis of Presentation (Details Narrative) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Dec. 31, 2023
Defined Benefit Plan Disclosure [Line Items]          
Revenue  
Net loss 1,104,091 $ 1,991,242 3,497,308 7,596,678  
Net cash used in operations     971,078 $ 2,473,439  
Accumulated deficit 50,700,777   50,700,777   $ 47,203,469
Working capital 6,990,799   6,990,799   $ 5,968,030
Proceeds from EB-5 Program     800,000    
Related party line of credit     640,315    
Related party line of credit paid down 15,000,000   15,000,000    
Credit facility 14,360,000   14,360,000    
Related Party [Member]          
Defined Benefit Plan Disclosure [Line Items]          
Related party line of credit paid down 150,000   150,000    
Related party short term note payable $ 150,000   $ 150,000    
v3.24.3
Schedule of Estimated Useful Life (Details)
Sep. 30, 2024
Building and Building Improvements [Member]  
Property, Plant and Equipment [Line Items]  
Estimated useful life 10 years
Furniture and Fixtures [Member]  
Property, Plant and Equipment [Line Items]  
Estimated useful life 3 years
v3.24.3
Summary of Significant Accounting Policies (Details Narrative) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Dec. 31, 2023
Accounting Policies [Abstract]          
Investments     $ 726,343
Advertising cost     $ 39,237 $ 33,596  
Income tax examination, description     The amount recognized is the largest amount of tax benefit that is greater than 50% likely to be realized on examination.    
Revenue  
v3.24.3
Concentration of Credit Risk (Details Narrative) - USD ($)
Sep. 30, 2024
Dec. 31, 2023
Risks and Uncertainties [Abstract]    
Cash FDIC insured amount $ 250,000  
Excess of FDIC insured limit
v3.24.3
Other Investment Held at Fair Value (Details Narrative) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Dec. 31, 2023
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]          
Investments     $ 726,343
Change in fair value of assets and liabilities net 80,705  
Gain on extinguishment of debt 8,684 1,017,273  
Other investment held at fair value     $ 726,343
Settlement And Release Agreement [Member]          
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]          
Investments 645,638   645,638    
Number of value forfeited     $ 1,100,000    
Number of shares forfeited     118,535,168    
Payment of outstanding $ 568,000   $ 568,000    
Payment of lieu Outstanding shares of common stock     83,226,814    
Number of shares purchase assets     $ 1,650,000    
Equipped purchase shares of common stock     27,742,271    
Gain on extinguishment of debt     $ 1,008,589    
v3.24.3
Schedule of Property Plant and Equipment (Details) - USD ($)
Sep. 30, 2024
Dec. 31, 2023
Property, Plant and Equipment [Abstract]    
Furniture and fixtures $ 88,690 $ 88,690
Land 260,000 260,000
Construction in progress 10,565,740 10,635,866
Building and improvements 8,883,851 8,883,851
Property, plant and equipment gross 19,798,281 19,868,407
Accumulated depreciation (3,894,578) (3,460,992)
Net property, plant, and equipment $ 15,903,703 $ 16,407,415
v3.24.3
Property, Plant, and Equipment (Details Narrative)
 6 Months Ended 9 Months Ended 12 Months Ended
Jan. 01, 2022
USD ($)
a
Oct. 21, 2020
Oct. 05, 2020
Dec. 31, 2021
USD ($)
Jun. 30, 2021
USD ($)
Dec. 31, 2021
USD ($)
Sep. 30, 2024
USD ($)
a
Dec. 31, 2023
USD ($)
Grant Greenhouse GrowersInc [Member] | Real Estate Option Agreement One [Member]                
Property, Plant and Equipment [Line Items]                
Area of land for purchase | a 330              
Expiration date     Dec. 31, 2021          
Monthly payments $ 2,000       $ 1,500      
Monthly payments for land       $ 1,750        
Lease payment made per acre $ 5,000              
Grant Greenhouse GrowersInc [Member] | Real Estate Option Agreement Two [Member]                
Property, Plant and Equipment [Line Items]                
Area of land for purchase | a 175              
Expiration date   Dec. 31, 2021            
Monthly payments $ 1,500              
Monthly payments for land           $ 1,000    
Lease payment made per acre $ 5,000              
New Mexico [Member]                
Property, Plant and Equipment [Line Items]                
Area of land for purchase | a             70  
Venlo Style Green House [Member] | New Mexico [Member]                
Property, Plant and Equipment [Line Items]                
Area of land for purchase | a             22  
Construction in Progress [Member]                
Property, Plant and Equipment [Line Items]                
Interest costs capitalized             $ 39,179 $ 223,271
v3.24.3
Schedule of Intangible Assets (Details) - USD ($)
Sep. 30, 2024
Dec. 31, 2023
Finite-Lived Intangible Assets [Line Items]    
Intangible assets gross $ 9,010 $ 1,000
Accumulated amortization
Net intangible assets 9,010 1,000
Licenses [Member]    
Finite-Lived Intangible Assets [Line Items]    
Intangible assets gross 1,000 1,000
Trademarks [Member]    
Finite-Lived Intangible Assets [Line Items]    
Intangible assets gross $ 8,010
v3.24.3
Related Party Line of Credit Note (Details Narrative) - USD ($)
 9 Months Ended 12 Months Ended
Sep. 30, 2024
Dec. 31, 2023
Nov. 19, 2024
Sep. 16, 2024
Sep. 15, 2024
Aug. 19, 2024
Sep. 30, 2023
Nov. 14, 2022
Jun. 05, 2022
Preferred stock, par value $ 0.0001 $ 0.0001              
Common stock par value per share $ 0.0001 $ 0.0001              
Forecast [Member]                  
Principal amount     $ 2,500,000            
Common Stock [Member]                  
Number of securities called by warrants or rights             3,684,210    
Ms Stockwell [Member] | Common Stock [Member]                  
Common stock par value per share       $ 0.0001          
August 2024 Amendment [Member] | Lynn Stockwell [Member]                  
Principal amount $ 3,500,000         $ 3,500,000      
Sale of stock price           $ 1.15      
Exercise price of warrants or rights           $ 0.13      
Conversion of outstanding principal           $ 3,619,789      
Number of securities called by warrants or rights           2,827,960      
Share price           $ 3.00      
August 2024 Amendment [Member] | Ms Stockwell [Member] | Common Stock [Member]                  
Exercise price of warrants or rights           $ 3.00      
Secured Amended and Restated Line of Credit Note [Member] | Lynn Stockwell [Member]                  
Principal amount       $ 2,500,000 $ 3,500,000        
Conversion of outstanding principal       $ 4,000,000          
Secured Amended and Restated Line of Credit Note [Member] | Lynn Stockwell [Member] | Series A Preferred Stock [Member]                  
Preferred stock, par value       $ 0.0001          
Conversion price       $ 0.40          
Conversion of preferred stock       14          
Unsecured Line of Credit [Member] | LDS Capital LLC [Member]                  
Increase in the line of credit capacity amount                 $ 3,000,000.0
Additional borrowing capacity                 $ 2,000,000.0
Interest rate stated percentage                 2.00%
Lender committed funds 6,547,603 $ 5,983,250              
Repayments of other debt 6,260,855 6,110,855              
Accrued interest 25,963 1,783              
Interest costs capitalized 24,179 $ 223,271              
Unsecured Line of Credit [Member] | LDS Capital LLC [Member] | Construction in Progress [Member]                  
Accrued interest $ 327,605                
Unsecured Line of Credit [Member] | LDS Capital LLC [Member] | Prime Rate [Member]                  
Interest rate stated percentage                 2.00%
Unsecured Line of Credit [Member] | LDS Capital LLC [Member] | Maximum [Member]                  
Line of credit facility, maximum borrowing amount                 $ 5,000,000.0
Amended Unsecured Line of Credit [Member]                  
Increase in the line of credit capacity amount               $ 10,000,000  
v3.24.3
Stockholders’ Equity (Details Narrative)
 1 Months Ended 3 Months Ended 9 Months Ended
Jul. 15, 2024
shares
Sep. 01, 2023
USD ($)
Jun. 05, 2023
USD ($)
May 24, 2023
USD ($)
May 24, 2023
USD ($)
Sep. 21, 2022
USD ($)
$ / shares
shares
Sep. 12, 2022
USD ($)
Sep. 07, 2022
USD ($)
$ / shares
shares
Jul. 31, 2024
shares
Sep. 30, 2023
USD ($)
$ / shares
shares
Sep. 30, 2024
USD ($)
$ / shares
shares
Sep. 30, 2023
USD ($)
$ / shares
shares
Mar. 29, 2024
$ / shares
shares
Dec. 31, 2023
USD ($)
$ / shares
shares
May 31, 2023
$ / shares
shares
May 21, 2023
$ / shares
Feb. 01, 2023
$ / shares
Accumulated Other Comprehensive Income (Loss) [Line Items]                                  
Common stock, shares authorized                     500,000,000     500,000,000      
Common stock, par value | $ / shares                     $ 0.0001     $ 0.0001      
Preferred stock, shares authorized                     10,000,000     10,000,000      
Preferred stock par value | $ / shares                     $ 0.0001     $ 0.0001      
Common stock, shares issued                     191,166,318     184,758,818      
Common stock, shares outstanding                     191,166,318     184,758,818      
Related party line of credit paid | $                       $ 880,000          
Investments exchanged for payment of credit | $                       880,000          
Line of credit note paid | $                         $ 726,343      
Common stock payable current | $                     800,000          
Proceeds from common stock payable | $                     800,000          
Gross proceeds from private placement | $                     $ 3,104,750          
Warrants redeemed, shares                     200,000            
Warrants redeemed, value | $                     $ 210,000            
Placement agent fees | $     $ 316,850     $ 800,000                      
Legal fees | $     $ 78,400     55,617                      
Escrow deposit | $           7,650                      
Warrants fair value | $           6,901,000   $ 7,399,000                  
Decrease in fair value of warrants | $           $ 498,000                      
Securities Purchase Agreement [Member]                                  
Accumulated Other Comprehensive Income (Loss) [Line Items]                                  
Exercise price | $ / shares                               $ 0.95  
Purchase price | $ / shares                               $ 0.95  
Warrants and rights outstanding term                               5 years  
Private Placement [Member]                                  
Accumulated Other Comprehensive Income (Loss) [Line Items]                                  
Common stock, shares authorized                         20,000,000        
Issued price per share | $ / shares                         $ 2.00       $ 39.99
Exercise price | $ / shares           $ 1.05                      
Shares of warrants to purchase           9,523,810                      
Gross proceeds from private placement | $       $ 3,500,000     $ 10,000,000                    
Warrants exercise price decrease | $ / shares           $ 0.95                      
Private Placement [Member] | Securities Purchase Agreement [Member]                                  
Accumulated Other Comprehensive Income (Loss) [Line Items]                                  
Issuance of shares               9,523,810                  
Exercise price | $ / shares               $ 1.05                  
Shares of warrants to purchase               9,523,810                  
Purchase price | $ / shares               $ 1.05                  
Warrants and rights outstanding term               5 years                  
One Accredited Investor [Member]                                  
Accumulated Other Comprehensive Income (Loss) [Line Items]                                  
Common stock issued for service, shares                       200,000          
Number of warrants exercised                       200,000          
Exercise price | $ / shares                   $ 1.05   $ 1.05          
Chief Executive Officer [Member]                                  
Accumulated Other Comprehensive Income (Loss) [Line Items]                                  
Common stock issued for service, shares                       500,000          
Issued price per share | $ / shares                   $ 0.4015   $ 0.4015          
Board Member [Member]                                  
Accumulated Other Comprehensive Income (Loss) [Line Items]                                  
Line of credit note paid | $                       $ 3,619,789          
Line of credit note paid | $                   $ 3,619,789   $ 3,619,789          
Former Executive Chairman [Member]                                  
Accumulated Other Comprehensive Income (Loss) [Line Items]                                  
Common stock issued for service, shares                       875,000          
Issued price per share | $ / shares                   $ 1.01   $ 1.01          
Consultant [Member]                                  
Accumulated Other Comprehensive Income (Loss) [Line Items]                                  
Common stock issued for service, shares                       60,000          
Issued price per share | $ / shares                   0.4015   $ 0.4015          
Former Executive Chairman [Member]                                  
Accumulated Other Comprehensive Income (Loss) [Line Items]                                  
Common stock issued for service, shares                       875,000          
Issued price per share | $ / shares                   $ 0.3959   $ 0.3959          
Common Stock [Member]                                  
Accumulated Other Comprehensive Income (Loss) [Line Items]                                  
Common stock issued for service, shares                   1,572,838 2,987,500 3,822,838          
Issuance of shares                       22,005          
Shares of warrants to purchase                   3,684,210   3,684,210          
Common Stock [Member] | Four Consultants [Member]                                  
Accumulated Other Comprehensive Income (Loss) [Line Items]                                  
Common stock issued for service, shares                     450,000            
Issued price per share | $ / shares                     $ 0.2116            
Common Stock [Member] | Former Executive Chairman One [Member]                                  
Accumulated Other Comprehensive Income (Loss) [Line Items]                                  
Common stock issued for service, shares                     2,537,500            
Issued price per share | $ / shares                     $ 0.1760            
Common Stock [Member] | Former Executive Chairman Two [Member]                                  
Accumulated Other Comprehensive Income (Loss) [Line Items]                                  
Issued price per share | $ / shares                     $ 0.1760            
Issuance of shares                     2,420,000            
Common Stock [Member] | Chief Executive Officer [Member]                                  
Accumulated Other Comprehensive Income (Loss) [Line Items]                                  
Issuance of shares 1,000,000                   1,000,000            
Redemption of vested RSUs                 1,000,000                
Common Stock [Member] | Board Member [Member]                                  
Accumulated Other Comprehensive Income (Loss) [Line Items]                                  
Issued price per share | $ / shares                   $ 39.99   $ 39.99          
Issuance of shares                       22,005          
Common Stock [Member] | One Accredited Investor [Member]                                  
Accumulated Other Comprehensive Income (Loss) [Line Items]                                  
Issued price per share | $ / shares                   39.99   $ 39.99          
Issuance of shares                       22,005          
Common Stock [Member] | Former Executive Chairman [Member]                                  
Accumulated Other Comprehensive Income (Loss) [Line Items]                                  
Common stock issued for service, shares                     4,957,500 875,000          
Issued price per share | $ / shares                   0.9416   $ 0.9416          
Common Stock [Member] | Former Chief Executive Officer [Member]                                  
Accumulated Other Comprehensive Income (Loss) [Line Items]                                  
Common stock issued for service, shares                       500,000          
Issued price per share | $ / shares                   1.13   $ 1.13          
Common Stock [Member] | Consultant [Member]                                  
Accumulated Other Comprehensive Income (Loss) [Line Items]                                  
Common stock issued for service, shares                       137,838          
Issued price per share | $ / shares                   0.74   $ 0.74          
Warrant [Member]                                  
Accumulated Other Comprehensive Income (Loss) [Line Items]                                  
Issued price per share | $ / shares                   0.95   $ 0.95          
Issuance of shares                       3,684,210          
Exercise price | $ / shares                   $ 3.00   $ 3.00          
Shares of warrants to purchase                   2,827,960   2,827,960          
Share price | $ / shares                   $ 0.46   $ 0.46          
Warrants estimate value | $   $ 149,180                              
Warrant [Member] | Measurement Input, Expected Term [Member]                                  
Accumulated Other Comprehensive Income (Loss) [Line Items]                                  
Warrants and rights outstanding term                   1 year   1 year          
Warrant [Member] | Measurement Input, Option Volatility [Member]                                  
Accumulated Other Comprehensive Income (Loss) [Line Items]                                  
Dividend rate                   149   149          
Warrant [Member] | Measurement Input, Risk Free Interest Rate [Member]                                  
Accumulated Other Comprehensive Income (Loss) [Line Items]                                  
Dividend rate                   5.36   5.36          
Warrant [Member] | Measurement Input, Expected Dividend Rate [Member]                                  
Accumulated Other Comprehensive Income (Loss) [Line Items]                                  
Dividend rate                   0.00   0.00          
Warrant [Member] | Private Placement [Member]                                  
Accumulated Other Comprehensive Income (Loss) [Line Items]                                  
Exercise price | $ / shares                             $ 0.95    
Shares of warrants to purchase                             3,684,210    
Share price | $ / shares                             $ 0.78    
Warrants estimate value | $         $ 1,600,000                        
Warrant [Member] | Private Placement [Member] | Measurement Input, Expected Term [Member]                                  
Accumulated Other Comprehensive Income (Loss) [Line Items]                                  
Warrants and rights outstanding term                             5 years    
Warrant [Member] | Private Placement [Member] | Measurement Input, Option Volatility [Member]                                  
Accumulated Other Comprehensive Income (Loss) [Line Items]                                  
Dividend rate                             165.00    
Warrant [Member] | Private Placement [Member] | Measurement Input, Risk Free Interest Rate [Member]                                  
Accumulated Other Comprehensive Income (Loss) [Line Items]                                  
Dividend rate                             3.08    
Warrant [Member] | Private Placement [Member] | Measurement Input, Expected Dividend Rate [Member]                                  
Accumulated Other Comprehensive Income (Loss) [Line Items]                                  
Dividend rate                             0.00    
Warrant [Member] | Board Member [Member]                                  
Accumulated Other Comprehensive Income (Loss) [Line Items]                                  
Issued price per share | $ / shares                   $ 1.28   $ 1.28          
Issuance of shares                       2,827,960          
Exercise price | $ / shares                   $ 3.00   $ 3.00          
Shares of warrants to purchase                   2,827,960   2,827,960          
Common stock to be issued [Member] | One Accredited Investor [Member]                                  
Accumulated Other Comprehensive Income (Loss) [Line Items]                                  
Shares to be issues                     400,000            
Purchase price per share | $ / shares                     $ 2.00            
Proceeds from common stock payable | $                     $ 880,000            
Administrative fee income | $                     $ 80,000            
v3.24.3
Schedule of Stock Option (Details) - $ / shares
 9 Months Ended 12 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Dec. 31, 2023
Retirement Benefits [Abstract]      
Weighted average fair value at grant date $ 0.2013   $ 0.3303
Expected life of options (years) 5 years 5 years  
Expected stock volatility 186.90%   213.90%
Risk-free interest rate 4.54%   4.42%
Expected dividend yield 0.00%   0.00%
v3.24.3
Schedule of Summarizes Stock Option Activity (Details) - $ / shares
 9 Months Ended 12 Months Ended
May 23, 2024
Sep. 30, 2024
Dec. 31, 2023
Retirement Benefits [Abstract]      
Number of Stock Options Outstanding, Balance   2,425,000  
Weighted Average Exercise Price, Balance   $ 0.3353  
Weighted Average Remaining Life (Years)   9 years 6 months 9 years 10 months 24 days
Number of Stock Options, Granted 488,403 488,403  
Weighted Average Exercise Price, Granted   $ 0.3276  
Weighted Average Remaining Life (Years)     9 years 10 months 24 days
Number of Stock Options, Exercised    
Weighted Average Exercise Price, Exercised    
Number of Stock Options, Expired/Canceled   (625,000)  
Weighted Average Exercise Price, Expired/Canceled   $ 0.3353  
Number of shares, outstanding ending balance   2,288,403 2,425,000
Weighted Average Exercise Price, Balance   $ 0.3337 $ 0.3353
Number of Stock Options, Exercisable   2,166,302  
Weighted Average Exercise Price, Exercisable   $ 0.3340  
Weighted Average Remaining Life (Years)   9 years 7 months 6 days  
v3.24.3
Schedule of Restricted Stock Unit (Details) - Restricted Stock Units (RSUs) [Member]
 9 Months Ended
Sep. 30, 2024
$ / shares
shares
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]  
Number of Nonvested RSUs begining balance | shares 625,000
Weighted Average Fair Value Grant Date beginning balance | $ / shares $ 0.3848
Number of Nonvested RSUs Granted | shares 6,338,209
Weighted Average Fair Value Grant Date Granted | $ / shares $ 0.2397
Number of Nonvested RSUs Vested | shares (1,756,198)
Weighted Average Fair Value Grant Date Vested | $ / shares $ 0.1310
Number of Nonvested RSUs Forfeited | shares (625,000)
Weighted Average Fair Value Grant Date Forfeited | $ / shares $ 0.3848
Number of Nonvested RSUs ending balance | shares 4,582,011
Weighted Average Fair Value Grant Date ending balance | $ / shares $ 0.2814
v3.24.3
Stock-Based Compensation (Details Narrative) - USD ($)
 1 Months Ended 9 Months Ended
Jul. 15, 2024
May 23, 2024
Mar. 31, 2024
Mar. 07, 2024
Jul. 31, 2024
Sep. 30, 2024
Sep. 30, 2023
Dec. 31, 2023
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]                
Stock options issued shares              
Restricted shares unit           625,000    
Share based compensation costs           $ 1,028,357 $ 2,945,903  
Issuance of shares   488,403       488,403    
Chief Executive Officer [Member]                
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]                
Restricted stock unit     625,000 600,000        
Chief Executive Officer [Member] | Mutual Agreement [Member]                
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]                
Restricted stock unit     5,500,000          
Restricted stock shares vest ratably     500,000          
Remaining restricted stock vested     2,000,000          
Chief Executive Officer [Member] | Mutual Agreement [Member] | Twenty-Four Months Beginning April 2, 2024 [Member]                
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]                
Restricted stock shares vest ratably     3,000,000          
Director [Member]                
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]                
Restricted stock unit   238,209            
Common Stock [Member]                
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]                
Common stock issued for cash for EB-5 program (Note 9), shares             22,005  
Common Stock [Member] | Chief Executive Officer [Member]                
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]                
Common stock issued for cash for EB-5 program (Note 9), shares 1,000,000         1,000,000    
Stock options issued shares             625,000  
Issuance of shares     625,000          
Restricted stock unit             625,000  
Stock redeemed         1,000,000      
Equity Option [Member]                
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]                
Share based compensation costs           $ 73,749  
Restricted Stock Units (RSUs) [Member]                
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]                
Restricted shares unit           4,582,011   625,000
Share based compensation costs           $ 412,688  
Restricted stock shares vest ratably           1,756,198    
Restricted Stock Units (RSUs) [Member] | Chief Executive Officer [Member]                
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]                
Issuance of shares     625,000     5,500,000    
Stock redeemed 1,000,000              
Restricted Stock Units (RSUs) [Member] | Director [Member]                
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]                
Issuance of shares           238,209    
Equity Compensation Plan [Member]                
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]                
Common stock issued for cash for EB-5 program (Note 9), shares           8,626,612 625,000  
Stock options issued shares           2,288,403    
Share based compensation costs           $ 1,028,357 $ 2,945,903  
Equity Compensation Plan [Member] | Restricted Stock [Member]                
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]                
Restricted shares unit           6,338,209 625,000  
Restricted shares unit           625,000    
v3.24.3
Related Party Transactions (Details Narrative) - USD ($)
 3 Months Ended 9 Months Ended
May 23, 2024
Mar. 31, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Dec. 31, 2023
Related Party Transaction [Line Items]            
Issuance of shares 488,403     488,403    
Interest expense       $ 15,000    
Two Directors, Chairwomen and Majority Shareholder [Member]            
Related Party Transaction [Line Items]            
Issuance of shares       488,403    
Former Chief Executive Officer [Member] | Accounts Payable [Member]            
Related Party Transaction [Line Items]            
Due to related party       $ 23,682   $ 23,460
Chief Financial Officer [Member] | Accounts Payable [Member]            
Related Party Transaction [Line Items]            
Due to related party       196,082   68,037
Chief Executive Officer [Member] | Accounts Payable [Member]            
Related Party Transaction [Line Items]            
Due to related party       299,864   66,667
Board of Directors [Member] | Accounts Payable [Member]            
Related Party Transaction [Line Items]            
Due to related party       400,000   400,000
Related Party [Member]            
Related Party Transaction [Line Items]            
Short term note payable       165,000  
Long-term line of credit       $ 640,315  
Former Executive Chairman [Member]            
Related Party Transaction [Line Items]            
Issuance of shares         875,000  
Chief Executive Officer [Member]            
Related Party Transaction [Line Items]            
Issuance of shares         500,000  
Chief Executive Officer [Member] | Restricted Stock Units (RSUs) [Member]            
Related Party Transaction [Line Items]            
Issuance of shares   625,000   5,500,000    
Chief Financial Officer [Member] | Restricted Stock Units (RSUs) [Member]            
Related Party Transaction [Line Items]            
Issuance of shares       600,000    
Director [Member] | Restricted Stock Units (RSUs) [Member]            
Related Party Transaction [Line Items]            
Issuance of shares       238,209    
Common Stock [Member]            
Related Party Transaction [Line Items]            
Issuance of shares     1,572,838 2,987,500 3,822,838  
Common Stock [Member] | Former Executive Chairman [Member]            
Related Party Transaction [Line Items]            
Issuance of shares       4,957,500 875,000  
Common Stock [Member] | Chief Executive Officer [Member]            
Related Party Transaction [Line Items]            
Issuance of shares   625,000        
v3.24.3
Contingencies (Details Narrative)
 9 Months Ended
Sep. 30, 2024
Contingency, taken by defendant description (i) shares of common stock in the Company (amounting to no more than 108,000 shares) or (ii) fair market value of defendant’s equity ownership of Bright Green Grow Innovations, LLC, a predecessor company of Bright Green Corporation.
Chief Executive Officer [Member]  
Contingency, taken by defendant description Bright Green Group of Companies, an entity unrelated to the Company, to determine if defendant is entitled to 5,000,000 shares of the Company’s common stock, based on a failure to fulfill agreed upon conditions precedent to earning such shares from the Company.
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