SecProbe.io

CORRESP
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filename1.htm

December
29, 2023

VIA
EDGAR SUBMISSION

U.S.
Securities and Exchange Commission

Division
of Corporation Finance

Office
of Energy & Transportation

100
F Street, N.E.

Washington,
D.C. 20549

Attention:
Myra Moosariparambil and Craig Arakawa

    Re:

    Sustainable
    Projects Group Inc.

    Form
    10-K for the Year Ended December 31, 2022

    Form
    10-Q for the Quarter Ending June 30, 2023

    Response
    dated August 17, 2023

    File
    No. 000-54875

Ladies
and Gentlemen:

Sustainable
Projects Group Inc. (the “Company”) hereby submits this letter in response to comments from the staff (the “Staff”)
of the U.S. Securities and Exchange Commission (the “Commission”) received by letter dated September 27, 2023 relating to
the Company’s Annual Report Form 10-K for the year ended December 31, 2022, Quarterly Report on Form 10-Q for the quarter ended
June 30, 2023 and response dated August 17, 2023. The numbered paragraphs below correspond to the numbered comments in the Staff’s
letter, the Staff’s comments are presented in bold italics, and the Company’s responses follow each comment.

Form
10-K for the Year Ended December 31, 2022

Report
of Independent Registered Public Accounting Firm, page F-2

    1.
    We
    note that the Public Company Accounting Oversight Board (“PCAOB”) revoked the registration of K.R. Margetson Ltd. on
    September 12, 2023. You can find a copy of the order on the PCAOB’s website at https://assets.pcaobus.org/pcaob-dev/docs/defaultsource/enforcement/decisions/documents/105-2023-023-krmargetson.pdf?sfvrsn=42692443_4.
    As K.R. Margetson Ltd. is no longer registered with the PCAOB, you may not include their audit reports or consents in your filings
    with the Commission on or after the date of revocation. Given that K.R. Margetson is not currently registered with the PCAOB, you
    should have a firm that is currently registered with the PCAOB re-audit the year(s) that are required to be included in your filings
    with the Commission. Additionally, please file an Item 4.01 Form 8-K to include all of the information required by that Item within
    four days of the date of this letter. In providing the information that Item 304 of Regulation S-K requires, please also indicate
    that the PCAOB has revoked the registration of your prior auditor.

The
Company acknowledges the Staff’s comment and respectively advises the Staff of the filing of a Current Report on Form 8-K on October
24, 2023 announcing a change in the Company’s certifying accountant and disclosing that the Public Company Accounting Oversight
Board removed the registration of the Company’s prior auditor. The Company has completed a re-audit with the Company’s new
certifying accountant, Centurion ZD CPA & Co. (“Centurion”). The corresponding restatements for the full year 2021 and
2022 have been included in Amendment No. 1 on Form 10-K/A, which was filed with the Commission on December 12, 2023 (the “Form
10-K/A”).

Note
1. Organization and Nature Operations, page F-8

    2.
    In
    your response to comment 2 you state you believe the transaction was a reverse capitalization, equivalent to the issuance of stock
    by the private company accompanied by a recapitalization which results in accounting similar to that resulting from a reverse acquisition,
    but with no goodwill or similar intangible asset being recorded. Given the guidance in ASC 805-40-45 addresses reverse acquisitions,
    based on the prior statement it appears this guidance would be applicable. Further, it appears you have combined all financial statement
    information for Sustainable Projects Group Inc. and Lithium Harvest, rather than presenting the financial statements for the accounting
    acquirer and continuing entity, Lithium Harvest. In this regard, and based on ASC 805-40-45, we note the following:

    ●
    It
    appears the historical income statements have been presented on a combined basis rather than for only Lithium Harvest.

    ●
    It
    appears you have not adjusted retained earnings and equity balances in accordance with ASC 805-40-45-2(c) and (d) but rather combined
    the equity balances for each entity in your consolidated balance sheets and your consolidated statements of stockholders’ equity.

Please
address these points in a detailed response and provide your proposed revised financial statements and related disclosures. To the extent
necessary, please provide the underlying calculations that support your proposed revisions. If you do not believe revisions are necessary
based on the guidance noted, please explain and provide the authoritative US GAAP guidance that supports your disclosure and presentation

The
Company respectfully acknowledges the Staff’s comment. As part of the re-audit process, the Company, in consultation with
Centurion, determined that the acquisition of Lithium Harvest ApS (“Lithium Harvest”) was a reverse acquisition. Lithium
Harvest was determined to be the accounting acquiree, and the Company’s financial statements for the full years ended December
31, 2022 and 2021, the three months ended March 31, 2023 and 2022 and the three and six months ended June 30, 2023 and 2022 have
been restated accordingly. These restated financial statements are included in the Form 10-K/A, and Amendments No. 1 and No. 2 on
Form 10-Q/A for each of the quarters ended March 31, 2023 and June 30, 2023, which were filed with the Commission on December 12,
2023, December 15, 2023, December 18, 2023 and December 27, 2023 (the “Form 10-Q/As”)..

    3.
    You
    have accounted for the Exchange Transaction as a reverse merger recapitalization and determined Sustainable Projects Group was not
    a business at the time of the transaction. However, we note you have included goodwill and intangibles related to YER Brands in the
    financial statements and that you reflect the Exchange Transaction as a reverse merger recapitalization rather than a reverse acquisition.
    Please clearly explain how you determined Sustainable Projects Group was not a business under ASC 805-10-55-4 and how your conclusion
    is consistent with your view that that goodwill and intangible assets related to YER were not impaired due to its future revenue
    generating capabilities.

The
Company respectfully acknowledges the Staff’s comment. As part of the restatement of the Company’s financial statements included
in the Form 10-K/A, the Company impaired goodwill and intellectual property and wrote-off inventory
of YER Brands Inc. as of the year ended December 31, 2021. This restatement also impacted the Company’s financial statements for
the three months ended March 31, 2023 and 2022 and the three and six months ended June 30, 2023 and 2022 ,
which were also restated and included in the Form 10-Q/As.

Index
to Consolidated Financial Statements

Note
9. Intangible Assets, page F-19

    4.
    We
    note your response to comment 3 related to your intangible and goodwill balances. Please address the following:

    ●
    Despite
    any future plans to find a suitable contract or possible licensing of the brand, please address how you considered the fact that
    you have not recorded revenue related to Soy-yer Dough since 2021 when performing your impairment analysis of both goodwill and intangible
    assets.

    ●
    Clarify
    if you have had any recent offers to license the brand and provide the salient details of the contract. To the extent you do not
    have evidence supporting a contract with another party and given the halted sales since 2021, please further clarify why you believe
    goodwill and the intangible assets should not be impaired based on the requirements of ASC 350-20-35 and ASC 350-30-35, respectively.

    ●
    In
    regards to goodwill, specifically address how you considered ASC 350-20-35- 3C(d) which requires consideration of the overall financial
    performance of the product when assessing goodwill for impairment, including declining cash flows or decline in actual or planned
    revenue or earnings compared with actual and projected results of the relevant period. In addition, given the recapitalization transaction
    which resulted in a change in control and an overall change in the focus of your business, tell us how you considered ASC 250-20-35-3C(e),
    which requires consideration of a change in management, key personnel, strategy or customers when assessing goodwill for impairment.

    ●
    In
    regards to your intangible assets, please tell us the specific assumptions used in developing your estimates of future cash flows
    based on the requirements of ASC 360-10-35-29 through 35-35. We note your response that you plan to find a suitable partner to manufacture
    the products or license the products. However, to the extent you do not have any recent offers or have not yet entered into a contract
    and based on the fact there has been no revenue generated from the product since 2021 and the changes to your business as a result
    of the Exchange agreement with Lithium Harvest, please specifically identify the authoritative accounting literature that supports
    the fact no impairment is necessary.

The
Company respectfully acknowledges the Staff’s comment. As part of the restatement of the Company’s financial statements included
in the Form 10-K/A, the Company impaired goodwill and intellectual property and wrote-off inventory
of YER Brands Inc. as of the year ended December 31, 2021. This restatement also impacted the Company’s financial statements for
the three months ended March 31, 2023 and 2022 and the three and six months ended June 30, 2023 and 2022, which were also restated and
included in the Form 10-Q/As.

Form
10-Q for the Quarter Ended June 30, 2023

Consolidated
Interim Statements of Stockholders’ Equity, page F-4

    5.
    We
    note you included 1,252,100 shares as “Shares to be Issued” and identify these shares as “Shares subscribed”
    in the balance sheet at June 30, 2023. Please explain what these shares represent and why you believe inclusion in your equity balance
    at June 30, 2023 is appropriate.

The
Company respectfully acknowledges the Staff’s comment and agrees that the “shares to be issued” should have been classified
as “Shares subscribed”. The Company has corrected this classification in Amendment No. 1 and Amendment No. 2 on Form 10-Q/A
for the quarter ended June 30, 2023, which were filed with the Commission on December 18, 2023 and December 27, 2023, respectfully.

If
there are further questions or additional information is required, please do not hesitate to contact the undersigned at (305) 209-0844.

    Sincerely,

    SUSTAINABLE
    PROJECTS GROUP INC.

    By:
    /s/
    Stefan Muehlbauer

    Name:
    Stefan
    Muehlbauer

    Title:
    Chief
    Financial Officer

    cc:
    Sune
    Mathiesen, Chief Executive Officer

    Ben
    A. Stacke, Faegre Drinker Biddle & Reath LLP