UNITED STATESSECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2023

[ ] 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

                                                    000-56024

SUSGLOBAL ENERGY CORP.

(Exact name of registrant as specified in its charter)

Delaware	38-4039116
(State or other jurisdiction of incorporation or organization)	(I. R. S. Employer Identification No.)
200 Davenport Road	M5R 1J2 ****
Toronto, ON
(Address of principal executive offices)	(Zip Code)

416-223-8500

                                                    \(Registrant's telephone number, including area code\)

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
N/A	N/A	N/A

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 \[X\]    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 and post such files).

                                            Yes \[X\]    No \[  \]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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 [X]	Smaller reporting company [X]
	Emerging growth company <br> [ ]

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 to Section 7(a)(2)(B) of the Securities Act. [ ]

Indicate by check mark whether the registrant is a shell company (as defined in rule 12b-2 of the Exchange Act). Yes [ ] No [X]

The number of shares of the registrant's common stock outstanding as of November 14, 2023, was 124,783,286 shares.

SusGlobal Energy Corp.

INDEX TO FORM 10-Q

For the Three and Nine-Month Periods Ended September 30, 2023 and 2022

Part I	FINANCIAL INFORMATION
Item 1	Financial Statements	4
Item 2	Management's Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3	Quantitative and Qualitative Disclosures About Market Risk	42
Item 4	Controls and Procedures	42
Part II	OTHER INFORMATION	42
Item 1	Legal Proceedings	42
Item 1A	Risk Factors	42
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	42
Item 3	Defaults Upon Senior Securities	42
Item 4	Mine Safety Disclosures	43
Item 5	Other Information	43
Item 6	Exhibits	43

SUSGLOBAL ENERGY CORP.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 and 2022

(Expressed in United States Dollars)

(unaudited)

Interim Condensed Consolidated Balance Sheets	5
Interim Condensed Consolidated Statements of Operations and Comprehensive Loss	6
Interim Condensed Consolidated Statements of Stockholders' Deficiency	7
Interim Condensed Consolidated Statements of Cash Flows	8
Notes to the Interim Condensed Consolidated Financial Statements	9-25
4
---

SusGlobal Energy Corp.

Interim Condensed Consolidated Balance Sheets

As at September 30, 2023 and December 31, 2022

(Expressed in United States Dollars)

(unaudited)

	September 30,			December 31,
	2023			2022
ASSETS
Current Assets
Cash	6,431		$	42,900
Funds held in trust (note 6)	924,500			-
Trade receivables	111,582			69,193
Government remittances receivable	5,080			6,983
Inventory	42,889			58,695
Prepaid expenses and deposits	687,187			580,852
Total Current Assets	1,777,669			758,623
Long-lived Assets, net (note 7)	8,822,265			9,107,152
Long-Term Assets	8,822,265			9,107,152
Total Assets	10,599,934		$	9,865,775
LIABILITIES AND STOCKHOLDERS' DEFICIENCY	****
Current Liabilities	****
Accounts payable (note 8)	3,871,418		$	3,475,691
Government remittances payable	453,492			371,587
Accrued liabilities (notes 8, 9, 10 and 13)	1,983,650			1,781,258
Current portion of long-term debt (note 9)	9,994,265			8,816,931
Current portion of obligations under capital lease (note 10)	83,950			57,275
Convertible promissory notes (note 11)	9,756,700			7,796,433
Loans payable to related parties (note 13)	59,941			40,000
Total Current Liabilities	26,203,416			22,339,175
Long-term debt (note 9)	-			52,495
Obligations under capital lease (note 10)	-			64,483
Total Long-term Liabilities	-			116,978
Total Liabilities	26,203,416			22,456,153
Stockholders' Deficiency	****
Preferred stock, .0001 par value, 10,000,000 authorized, none issued and outstanding Common stock, .0001 par value, 150,000,000 authorized, 124,783,286 (2022- 113,438,832) shares issued and outstanding (note 14)	12,482			11,348
Additional paid-in capital	19,473,057			17,152,018
Shares to be issued	60,100			213,600
Accumulated deficit	(35,520,256	)		(30,345,197	)
Accumulated other comprehensive income	371,135			377,853
Stockholders' deficiency	(15,603,482	)		(12,590,378	)
Total Liabilities and Stockholders' Deficiency	10,599,934		$	9,865,775
Going concern (note 2)
Commitments (note 15)
Subsequent events (note 19)

All values are in US Dollars.

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

5

SusGlobal Energy Corp.

Interim Condensed Consolidated Statements of Operations and Comprehensive Loss

For the three and nine-month periods ended September 30, 2023 and 2022

(Expressed in United States Dollars)

(unaudited)

		For the three-month periods ended						For the Nine-month periods ended
		September 30, 2023			September 30,2022			September 30, 2023			September 30, 2022
Revenue	$	186,901		$	297,202		$	505,075		$	551,815
Cost of Sales
Opening inventory		64,578			19,555			58,695			20,582
Depreciation (note 7)		87,528			112,731			301,467			344,196
Direct wages and benefits		36,459			52,860			111,984			158,356
Equipment rental, delivery, fuel and repairs and maintenance		14,723			365,975			55,569			477,128
Utilities		32,721			(7,760	)		89,578			35,410
Outside contractors		-			535			-			26,018
		236,009			543,896			617,293			1,061,690
Less: closing inventory		(42,889	)		(48,154	)		(42,889	)		(48,154	)
Total cost of sales		193,120			495,742			574,404			1,013,536
Gross loss		(6,219	)		(198,540	)		(69,329	)		(461,721	)
Operating expenses
Management compensation-stock-based compensation (notes 8 and 14)		57,600			60,113			172,800			180,339
Management compensation-fees (note 8)		117,401			115,175			351,162			350,910
Marketing		923			(250	)		122,098			1,003,959
Professional fees		103,930			190,653			286,723			812,738
Interest expense (notes 8, 9, 10 and 13)		140,161			208,537			499,222			589,488
Office and administration (note 7)		56,567			67,377			176,120			259,193
Rent and occupancy (note 8)		58,385			54,586			161,127			171,177
Insurance		10,974			12,867			33,167			76,304
Filing fees		8,562			9,699			31,852			71,242
Amortization of financing costs		26,901			27,752			72,296			94,916
Directors' compensation (note 8)		18,631			14,366			53,211			43,864
Stock-based compensation (note 14)		254,724			659,050			785,149			955,837
Repairs and maintenance		1,015			2,386			22,636			(8,773	)
Foreign exchange loss (income)		214,406			378,510			(33,037	)		518,690
Total operating expenses		1,070,180			1,800,821			2,734,526			5,119,884
Net loss from operating activities		(1,076,399	)		(1,999,361	)		(2,803,855	)		(5,581,605	)
Other expenses (note 16)		(116,710	)		(1,697,619	)		(2,371,204	)		(3,207,270	)
Net loss		(1,193,109	)		(3,696,980	)		(5,175,059	)		(8,788,875	)
Other comprehensive loss					-						-
Foreign exchange income (loss)		327,961			652,484			(6,718	)		819,813
Comprehensive loss	$	(865,148	)	$	(3,044,496	)	$	(5,181,777	)	$	(7,969,062	)
Net loss per share-basic and diluted	$	(0.01	)	$	(0.04	)	$	(0.04	)	$	(0.09	)
Weighted average number of common shares outstanding- basic and diluted		122,972,355			105,189,849			120,391,943			100,335,858

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

6

SusGlobal Energy Corp.

Interim Condensed Consolidated Statements of Changes in Stockholders' Deficiency

For the three and nine-month periods ended September 30, 2023 and 2022

(Expressed in United States Dollars)

(unaudited)

	Number of <br>Shares	Common <br>Shares		Additional <br>Paid- in <br>Capital		Shares <br>to be <br>Issued			Accumulated <br>Deficit			Accumulated <br>Other <br>Comprehensive <br>Income (Loss)			Stockholders' <br>Deficiency
Balance-December 31, 2022	113,438,832	11,348	$	17,152,018	$	213,600		$	(30,345,197	)	$	377,853		$	(12,590,378	)
Shares issued for proceeds previously received	500,000	50		153,450		(153,500	)		-			-			-
Shares issued to officers	3,100,000	310		446,090		-			-			-			446,400
Shares issued to employee	20,000	2		2,878		****			****			****			2,880
Shares issued to director	100,000	10		20,990		****			****			****			21,000
Shares issued on conversion of debt to equity	1,049,413	105		220,049		-			-			-			220,154
Shares issued for professional services	410,000	41		63,439		-			-			-			63,480
Other comprehensive loss	-	-		-		-			-			(6,634	)		(6,634	)
Net loss	-	-		-		-			(1,035,172	)		-			(1,035,172	)
Balance-March 31, 2023	118,618,245	11,866	$	18,058,914	$	60,100		$	(31,380,369	)	$	371,219		$	(12,878,270	)
Shares issued on conversion of debt	601,296	60		153,786		-			-			-			153,846
Shares issued on conversion of related party accounts payable and debt	1,167,371	117		278,728		-			-			-			278,845
Shares issued on private placement	310,888	31		101,008		-			-			-			101,039
Shares issued for professional services	630,000	63		139,102		-			-			-			139,165
Shares yet to be issued on private placement received	-	-		-		128,248			-			****			128,248
Other comprehensive loss	-	-		-		-			-			(328,045	)		(328,045	)
Net Loss	-	-		-		-			(2,946,778	)		-			(2,946,778	)
Balance-June 30, 2023	121,327,800	12,137		18,731,538		188,348			(34,327,147	)		43,174			(15,351,950	)
Shares issued for proceeds previously received	531,250	53		128,195		(128,248	)		-			-			-
Shares issued on conversion of related party debt and accounts payable	1,254,792	125		233,433		-			-			-			233,558
Shares issued on private placement	694,444	69		151,615		-			-			-			151,684
Shares issued for professional services	750,000	75		194,175		-			-			-			194,250
Shares issued for other services	225,000	23		34,101		-			-			-			34,124
Other comprehensive loss	-	-		-		-			-			327,961			327,961
Net loss	-	-		-		-			(1,193,109	)		-			(1,193,109	)
Balance-September 30, 2023	124,783,286	12,482		19,473,057		60,100			(35,520,256	)		371,135			(15,603,482	)
Balance-December 31, 2021	92,983,547	9,302	$	11,272,599	$	59,640		$	(18,334,649	)	$	(335,960	)	$	(7,329,068	)
Shares issued for proceeds previously received	230,000	23		48,967		(48,990	)		-			-			-
Shares issued to officers	1,050,000	105		240,345		-			-			-			240,450
Shares issued to employee	10,000	1		1,989		-			-			-			1,990
Shares issued for professional services	895,000	90		223,820					-			-			223,910
Shares issued on conversion of debt to equity	2,000,000	200		463,662					-			-			463,862
Shares issued on private placement	40,000	4		16,556					-			-			16,560
Shares yet to be issued	-	-		-		29,450			-			-			29,450
Other comprehensive income	-	-		-		-			-			(142,524	)		(142,524	)
Net loss	-	-		-		-			(2,863,226	)		-			(2,863,226	)
Balance-March 31, 2022	97,208,547	9,725	$	12,267,938	$	40,100		$	(21,197,875	)	$	(478,484	)	$	(9,358,596	)
Shares issued on private placement	1,404,041	140		427,860		-			-			-			428,000
Shares issued on issuance of debt on extinguishment of existing debt	3,975,211	398		1,590,847		-			-			-			1,591,245
Shares yet to be issued	-	-		-		20,000			-			-			20,000
Shares yet to be issued on extinguishment of existing debt	-	-		-		61,470			-			-			61,470
Other comprehensive loss	-	-		-		-			-			309,853			309,853
Net Loss	-	-		-		-			(2,228,669	)		-			(2,228,669	)

All values are in US Dollars.

7

SusGlobal Energy Corp.

Interim Condensed Consolidated Statements of Changes in Stockholders' Deficiency

For the three and nine-month periods ended September 30, 2023 and 2022

(Expressed in United States Dollars)

(unaudited)

	Number of <br>Shares		Common <br>Shares		Additional <br>Paid- in <br>Capital	Shares <br>to be <br>Issued		Accumulated <br>Deficit		Accumulated <br>Other <br>Comprehensive <br>Income (Loss)		Stockholders' <br>Deficiency
Balance-June 30, 2022	102,587,799		10,263		14,286,645	121,570		(23,426,544	)	(168,631	)	(9,176,697	)
Shares issued for proceeds previously received	150,000		15		61,455	(61,470	)	-		-		-
Shares issued for professional services	4,710,000		471		1,780,979	-		-		-		1,781,450
Shares issued on conversion of debt	106,868		11		38,451	-		-		-		38,462
Return of shares to treasury	(241,502	)	(24	)	24	-		-		-		-
Other comprehensive income	-		-		-	-		-		652,484		652,484
Net Loss	-		-		-	-		(3,696,980	)	-		(3,696,980	)
Balance - Sept 30, 2022	107,313,135		10,736		16,167,554	60,100		(27,123,524	)	483,853		(10,401,281	)

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

8

SusGlobal Energy Corp.

Interim Condensed Consolidated Statements of Cash Flows

For the nine-month periods ended September 30, 2023 and 2022

(Expressed in United States Dollars)

(unaudited)

		For the nine-month <br>period ended<br>September 30, 2023			For the nine-month<br>period ended<br>September 30, 2022
Cash flows from operating activities
Net loss	$	(5,175,059	)	$	(8,788,875	)
Adjustments for:		****
Depreciation		302,388			345,163
Amortization of financing fees		72,296			94,916
Stock-based compensation		957,949			1,136,176
Loss on conversion of convertible promissory notes		74,359			-
Loss on revaluation of convertible promissory notes		2,296,845			7,232,090
Gain on extinguishment of convertible promissory notes		-			(4,274,820	)
Changes in non-cash working capital:
Non-cash addition to convertible promissory notes on amendment					387,100
Trade receivables		(42,473	)		(16,628	)
Government remittances receivable		1,925			(41,581	)
Other receivable		-			(150,094	)
Inventory		15,986			(31,119	)
Prepaid expenses and deposits		(235,374	)		(169,383	)
Accounts payable		626,652			2,866,933
Government remittances payable		81,646			89,758
Accrued liabilities		200,225			788,328
Net cash used in operating activities		(822,635	)		(532,036	)
Cash flows from investing activities
Purchase of long-lived assets		-			(1,894,619	)
Net cash (used in) investing activities		-			(1,894,619	)
Cash flows from financing activities
Advances of long-term debt		1,114,800			-
Repayment of long-term debt		(27,884	)		(61,784	)
Financing fee on long-term debt		(44,592	)		-
Repayments of obligations under capital lease		(38,207	)		(70,322	)
Advances on convertible promissory notes		-			2,080,000
Repayment of convertible promissory notes.		-			(85,880	)
Advances of loans payable to related parties		389,520			133,482
Repayment of loans payable to related parties		(92,725	)		(48,660	)
Proceeds on private placement		380,971			444,560
Subscription payable proceeds		-			-
Net cash provided by financing activities		1,681,883			2,391,396
Effect of exchange rate on cash		28,783			3,340
Increase (decrease) in cash		888,031			(31,919	)
Cash and cash equivalents-beginning of period		42,900			36,033
Cash and cash equivalents and restricted cash-end of period	$	930,931		$	4,114
Supplemental Cash Flow Disclosure:
Interest paid	$	322,785		$	406,877
Supplemental Non-Cash Disclosure:
Common stock issued at fair value for conversion of debt, plus accrued interest, and other fees	$	374,000		$	502,324
Common stock issued at fair value on extinguishment of existing debt		-			1,591,245
Common stock yet to be issued on extinguishment of existing debt		-			61,470
Common stock issued at fair value for conversion of related party debt and accounts payable	$	512,403		$	-
Share issued for prepaid services	$	56,650		$	-

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

9

SusGlobal Energy Corp.

Notes to the Interim Condensed Consolidated Financial Statements

September 30, 2023 and 2022

(Expressed in United States Dollars)

(unaudited)

1. Nature of Business and Basis of Presentation

SusGlobal Energy Corp. ("SusGlobal") was formed by articles of amalgamation on December 3, 2014, in the Province of Ontario, Canada and its executive office is in Toronto, Ontario, Canada. SusGlobal, a company in the start-up stages and Commandcredit Corp. ("Commandcredit"), an inactive Canadian public company, amalgamated to continue business under the name of SusGlobal Energy Corp.

On May 23, 2017, SusGlobal filed an Application for Authorization to continue in another Jurisdiction with the Ministry of Government Services in Ontario and a certificate of corporate domestication and certificate of incorporation with the Secretary of State of the State of Delaware under which it changed its jurisdiction of incorporation from Ontario to the State of Delaware (the "Domestication"). In connection with the Domestication each of the currently issued and outstanding common shares were automatically converted on a one-for-one basis into common shares compliant with the laws of the state of Delaware (the "Shares"). As a result of the Domestication, pursuant to Section 388 of the General Corporation Law of the State of Delaware (the "DGCL"), SusGlobal continued its existence under the DGCL as a corporation incorporated in the State of Delaware. The business, assets and liabilities of SusGlobal and its subsidiaries on a consolidated basis, as well as its principal location and fiscal year, were the same immediately after the Domestication as they were immediately prior to the Domestication. SusGlobal filed a Registration Statement on Form S-4 to register the Shares and this registration statement was declared effective by the Securities and Exchange Commission on May 12, 2017.

On December 11, 2018, the Company began trading on the OTCQB venture market exchange, under the ticker symbol SNRG.

SusGlobal is a renewables company focused on acquiring, developing and monetizing a global portfolio of proprietary technologies in the waste to energy and regenerative products application.

These interim condensed consolidated financial statements of SusGlobal and its wholly-owned subsidiaries, SusGlobal Energy Canada Corp. ("SECC"), SusGlobal Energy Canada I Ltd. ("SGECI"), SusGlobal Energy Belleville Ltd. ("SGEBL"), SusGlobal Energy Hamilton Ltd. ("SEHL") and 1684567 Ontario Inc. ("1684567") (together, the "Company"), have been prepared following generally accepted accounting principles in the United States ("US GAAP") for interim financial information and the Securities Exchange Commission ("SEC") instructions to Form 10-Q and Article 8 of SEC Regulation S-X, and are expressed in United States Dollars. The Company's functional currency is the Canadian Dollar ("C$"). In the opinion of management, all adjustments necessary for a fair presentation have been included.

2. Going Concern

The interim condensed consolidated financial statements have been prepared in accordance with US GAAP, which assumes that the Company will be able to meet its obligations and continue its operations for the next twelve months.

The Company incurred a net loss of $5,175,059 (2022-$8,788,875) for the nine months ended September, 2023, and as at that date had a working capital deficit of $24,425,747 (December 31, 2022-$21,580,552) and an accumulated deficit of $35,520,256 (December 31, 2022-$30,345,197) and expects to incur further losses in the development of its business.

On February 18, 2021, PACE Savings and Credit Union Limited ("PACE") and the Company reached a new agreement to repay all amounts owing to PACE on or before July 30, 2021. Management was not able to meet the July 30, 2021, deadline. On August 13, 2021, PACE agreed to allow the Company until August 31, 2021, to bring the arrears current and continue to September 2022, the original maturity date. Management was not able to meet the August 31, 2021, deadline. On November 15, 2021, the Company paid all arrears to PACE and PACE agreed to allow the Company to continue payments to the end of the terms of each obligation, September 2022. Similarly, the Company paid all arrears to PACE on March 15, 2022, and PACE allowed the Company to continue payments to the end of the terms of each obligation, September 2022. On March 28, 2023, the Company and PACE negotiated a full and final mutual release of all obligations owing to PACE. Management continues discussions with equity investors to raise the necessary funds to repay other creditors. The Company was successful in extending the repayment date on a 1st mortgage which had a maturity date of September 1, 2022, to December 1, 2023. One of the Company's significant customer contracts expired at the end of December 31, 2020, and one customer contract was terminated by the Company in September of 2021.

10

SusGlobal Energy Corp. Notes to the Interim Condensed Consolidated Financial Statements September 30, 2023 and 2022 (Expressed in United States Dollars) (unaudited)

2. Going Concern, (continued)

These factors cast substantial doubt as to the Company's ability to continue as a going concern, which is dependent upon its ability to obtain the necessary financing to further the development of its business, satisfy its obligations to its creditors, and upon achieving profitable operations through revenue growth. There is no assurance of funding being available or available on acceptable terms. Realization values may be substantially different from carrying values as shown.

These interim condensed consolidated financial statements do not include any adjustments to reflect the future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result if the Company was unable to continue as a going concern.

3. Significant Accounting Policies

These interim condensed consolidated financial statements do not include all of the information and footnotes required by US GAAP for complete financial statements and should be read in conjunction with the consolidated financial statements of the Company for the years ended December 31, 2022, and 2021 and their accompanying notes.

4. Recently Issued Accounting Pronouncements

Accounting Pronouncements Recently Adopted

The following section provides a description of new accounting pronouncements ("Accounting Standard Update" or "ASU") issued by the Financial Accounting Standards Board ("FASB") that are applicable to the Company.

In March 2022, the FASB issued ASU No. 2022-02, Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures ("ASU 2022-02"), which requires enhanced disclosure of certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty while eliminating certain current recognition and measurement accounting guidance. This ASU also requires the disclosure of current-period gross write-offs by year of origination for financing receivables and net investments in leases. ASU No. 2022-02 became effective for the Company's annual and interim periods beginning on January 1, 2023. The Company adopted this ASU on January 1, 2023. As a result, the adoption of ASU 2022-02 did not have any impact on the opening balances in the interim condensed consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments ("ASU-2016-13"). ASU 2016-13 affects loans, debt securities, trade receivables, and any other financial assets that have the contractual right to receive cash. The ASU requires an entity to recognize expected credit losses rather than incurred losses for financial assets. ASU 2016-13 is effective for the fiscal year beginning after December 15, 2022, including interim periods within that fiscal year. The Company adopted this ASU on January 1, 2023. As a result, the adoption of ASU 2016-13 did not have any impact on the opening balances in the interim condensed consolidated financial statements.

There were no new accounting pronouncements issued and not yet adopted that were expected to have a material impact on the Company's interim condensed consolidated financial position or results of operations in the current or future periods.

5. Financial Instruments

The carrying value of the Company's financial instruments, such as cash, funds held in trust, trade receivables, accounts payable and accrued liabilities approximate fair value due to the short-term nature of these instruments. The carrying amounts of the long-term debt, obligations under capital lease and convertible promissory notes also approximates fair value due to their market interest rate.

Interest, Credit and Concentration Risk

Interest rate risk is the risk borne by an interest-bearing asset or liability as a result of fluctuations in interest rates. Financial assets and financial liabilities with variable interest rates expose the Company to cash flow interest rate risk.

11

SusGlobal Energy Corp. Notes to the Interim Condensed Consolidated Financial Statements September 30, 2023 and 2022 (Expressed in United States Dollars) (unaudited)

5. Financial Instruments, (continued)

The Company is exposed to significant interest rate risk on the current portion of its long-term debt of $3,909,422 (C$5,285,860) (December 31,2022-$7,285,747; C$9,868,274).

Credit risk is the risk of loss associated with a counterparty's inability to perform its payment obligations. As at September 30, 2023, the Company's credit risk is primarily attributable to cash and trade receivables. As at September 30, 2023, the Company's cash was held with reputable Canadian chartered banks and a United States of America bank.

With regards to credit risk with customers, the customers' credit evaluation is reviewed by management and account monitoring procedures are used to minimize the risk of loss. The Company believes that no additional credit risk beyond amounts provided for by the allowance for doubtful accounts is inherent in accounts receivable. As at September 30, 2023, the allowance for doubtful accounts was $nil (C$nil) (December 31, 2022-$nil; C$nil).

As at September 30, 2023, the Company is exposed to concentration risk as it had five customers (December 31, 2022-four customers) representing greater than 5% of total trade receivables and five customers (December 31, 2022-four customers) represented 98% (December 31, 2022-90%) of trade receivables. The Company had certain customers whose revenue individually represented 10% or more of the Company's total revenue. These customers accounted for 93% (37%, 31%, 13% and 12%) (September 30, 2022-85%; 36%, 24%, 13% and 12%) of total revenue.

Certain of the prior period's comparative figures have been reclassified to conform to the current year's presentation. The reclassification on the interim condensed consolidated statement of operations and comprehensive loss for the sale of carbon credits from other expenses to revenue.

Liquidity Risk

Liquidity risk is the risk that the Company is unable to meet its obligations as they fall due. The Company takes steps to ensure it has sufficient working capital and available sources of financing to meet future cash requirements for capital programs and operations. Management is considering all its options to repay its creditors. Refer also to going concern, note 2.

The Company actively monitors its liquidity to ensure that its cash flows and working capital are adequate to support its financial obligations and the Company's capital programs. In order to continue operations, the Company will need to raise capital, and complete the refinancing of its real property and organic waste processing and composting facility. There is no assurance of funding being available or available on acceptable terms. Realization values may be substantially different from carrying values as shown. Refer also to going concern, note 2.

Currency Risk

Although the Company's functional currency is the C$, the Company realizes a portion of its expenses in United States Dollars ("$"). Consequently, certain assets and liabilities are exposed to foreign currency fluctuations. As at September 30, 2023, $352,299 (December 31, 2022-$80,843) of the Company's net monetary liabilities were denominated in $. The Company has not entered into any hedging transactions to reduce the exposure to currency risk.

6. Funds Held in Trust

The Funds held in trust at September 30, 2023, in the amount of $924,500 (C$1,250,000), relate to a full and final mutual release of all obligations owing to PACE, including accrued interest, in exchange for an amount of $924,500 (C$1,250,000). The funds are held in escrow by the Company's Canadian legal counsel. The funds will be released to PACE once the letter of credit, in the amount of $204,744 (C$276,831) is released by the Ministry of the Environment, Conservation and Parks (the "MECP") to PACE and the Company replaces with the new letter of credit in the amount of $471,596 (C$637,637). Immediately prior to this full and final mutual release, the amounts owing to PACE, included in the interim condensed consolidated balance sheets, include $3,452,655 (C$4,668,274) disclosed under long-term debt and accrued interest of $391,785 (C$529,725) disclosed under accrued liabilities. The Company raised the funds by securing a 2nd. mortgage on March 1, 2023, in the amount of $1,109,400 (C$1,500,000) prior to disbursements of $184,900 (C$250,000), on its Belleville, Ontario Canada property.

Refer also to subsequent events, note 19(b).

12

SusGlobal Energy Corp. Notes to the Interim Condensed Consolidated Financial Statements September 30, 2023 and 2022 (Expressed in United States Dollars) (unaudited)

7. Long-lived Assets, net

				September 30,				December 31,
				2023				2022
		Cost		Accumulated <br>depreciation		Net book value		Net book value
Land	$	3,169,512	$	-	$	3,169,512	$	3,163,941
Property under construction		3,554,896		-		3,554,896		3,548,648
Composting buildings		2,242,555		805,110		1,437,445		1,535,656
Gore cover system		1,041,373		604,265		437,108		514,306
Driveway and paving		342,805		165,689		177,116		197,336
Machinery and equipment		107,288		103,342		3,946		28,036
Equipment under capital lease		288,185		288,185		-		39,574
Signage		6,113		4,578		1,535		2,447
Automotive equipment		162,829		122,122		40,707		77,208
****	$	10,915,556	$	2,093,291	$	8,822,265	$	9,107,152

Depreciation for the three and nine-month periods ended September 30, 2023, is disclosed in cost of sales in the amount of $87,528 (C$117,344) and $301,467 (C$405,633) (2022-$112,731; C$144,564 and $344,196; C$441,390) respectively and in office and administration in the amount of $307 (C$413) and $921 (C$1,240) (2022-$325; C$413 and $967; C$1,240) respectively, in the interim condensed consolidated statements of operations and comprehensive loss.

8. Related Party Transactions

For three and nine-month periods ended September 30, 2023, the Company incurred $89,449 (C$120,000) and $267,552 (C$360,000) (2022-$92,189; C$120,000 and $280,728; C$360,000) respectively, in management fees expense with Travellers International Inc. ("Travellers"), an Ontario company controlled by a director and the president and chief executive officer (the "CEO"); and $27,952 (C$37,500) and $83,610 (C$112,500) (2022-$22,986; C$30,000 and $70,182; C$90,000) respectively, in management fees expense with the Company's chief financial officer (the "CFO"). As at September 30, 2023, unpaid remuneration and unpaid expenses in the amount of $204,728 (C$276,809) (December 31, 2022-$161,790; C$219,138) is included in accounts payable and $107,634 (C$145,530) (December 31, 2022-$22,705; C$30,753) is included in accrued liabilities in the interim condensed consolidated balance sheets.

During the three and nine-month periods ended September 30, 2023, Travellers converted $233,558 (C$316,400) and $512,403 (C$688,883) (2022-$nil; C$nil and $nil; C$nil) respectively, in outstanding loans and outstanding accounts payable for 1,254,792 and 2,422,163 (2022-nil and nil) respectively, common shares of the Company, based on closing trading prices on the day prior to each conversion.

For the three and nine-month periods ended September 30, 2023, the Company incurred $30,014 (C$40,046) and $80,452 (C$108,251) (2022-$27,728; C$36,244 and $89,530; C$114,812) respectively, in rent expense paid under a lease arrangement with Haute Inc. ("Haute"), an Ontario company controlled by the CEO.

In addition, during the three and nine-month periods ended September 30, 2023, the Company paid the CFO interest of $nil (C$nil) and $nil (C$nil) (2022-$nil; C$nil and $526; C$674) respectively, on loans totaling $nil (C$nil) (2022-$29,211 (C$36,000) respectively, provided to the Company and repaid during the three month period ended March 31, 2022.

For the independent directors, the Company recorded directors' compensation during the three and nine-month periods ended September 30, 2023 of $18,631 (C$25,000) and $53,211 (C$71,597) (2022-$14,366; C$18,750 and $43,864; C$56,250) respectively. In addition, on February 18, 2023 a new independent director was appointed and was awarded 100,000 common shares of the Company on March 1, 2023 valued at $21,000 based on the closing trading price on the appointed date and included under stock-based compensation in the interim condensed consolidated statements of operations and comprehensive loss. Further, the new independent director provided the Company funds of $101,039 (C$134,483) for a private placement in exchange for 310,888 common shares of the Company priced at $0.3250 per share.

13

SusGlobal Energy Corp. Notes to the Interim Condensed Consolidated Financial Statements September 30, 2023 and 2022 (Expressed in United States Dollars) (unaudited)

8. Related Party Transactions, (continued)

As at September 30, 2023, outstanding directors' compensation of $174,393 (C$235,793) (December 31, 2022-$121,226; C$164,196) is included in accrued liabilities, in the interim condensed consolidated balance sheets.

Pursuant to the terms of the CEO's Consulting Agreement, for his services as the CEO, the compensation is at a rate of $29,728 (C$40,000) per month for twelve (12) months, beginning on the Effective Date, January 1, 2023, and at a rate of $37,160 (C$50,000) per month for twelve (12) months, beginning January 1, 2024. In addition, the Company agreed to grant the CEO 3,000,000 restricted shares of the Company's Common Stock, par value of $0.0001 per share (the "Common Stock") on the Effective Date. The Company has also agreed to reimburse the CEO for certain out-of-pocket expenses incurred by the CEO.

Pursuant to the terms of the CFO's Consulting Agreement for his services as the CFO, the compensation is at a rate of $9,290 (C$12,500) per month for twelve (12) months, beginning on the Effective Date, January 1, 2023. In addition, the Company agreed to grant the CFO 100,000 restricted shares of the Company's Common Stock, par value of $0.0001 per share (the "Common Stock") on the Effective Date. The Company has also agreed to reimburse the CFO for certain out-of-pocket expenses incurred by the CFO.

Furthermore, for the three and nine-month periods ended September 30, 2023, the Company recognized management stock-based compensation expense of $57,600 and $172,800 (2022-$60,113 and $180,339) respectively, on the common stock issued to the CEO and the CFO, 3,000,000 and 100,000 common stock, respectively, as stipulated in their executive consulting agreements, effective January 1, 2023 valued at the trading price on the Effective Date. The total stock-based compensation on the issuance of the common stock totaled $446,400 (2022-$240,450). The portion to be expensed for the balance of the consulting agreements, $273,600 (2022-$60,111) is included in prepaid expenses and deposits in the interim condensed consolidated balance sheets.

9. Long-Term Debt

			September 30,<br>2023			December 31,<br>2022
(a)	PACE Credit Facility-see below	$	697,199		$	695,974
(b)	PACE Credit Facility-see below		389,874			389,188
(c)	PACE Corporate Term Loan-see below		2,365,582			2,361,424
(d)i.)	Mortgage Payable-due December 1, 2023		3,835,462			3,782,751
(d)ii.)	Mortgage Payable-due August 17, 2023		1,479,200			1,476,600
(d)iii.)	Mortgage Payable-due March 1, 2024		1,090,920			-
(e)	Canada Emergency Business Account-Due December 31, 2023		73,960			73,830
(f)	Corporate Term Loan-Due April 7, 2025		62,068			89,659
****	****		9,994,265			8,869,426
Current portion			(9,994,265	)		(8,816,931	)
Long-Term portion		$	-		$	52,495

As disclosed under funds held in trust, note 6, the Company and PACE finalized a full and final mutual release of all obligations owing to PACE, including accrued interest, in exchange for an amount of $924,500 (C$1,250,000). The funds are being held in escrow by the Company's Canadian legal counsel. The funds will be released to PACE once the letter of credit, in the amount of $204,744 (C$276,831) is released by the MECP to PACE and the Company replaces with the new letter of credit in the amount of $471,596 (C$637,637). Immediately prior to this full and final release, the amounts owing to PACE, included above under a), b) and c) totaled $3,452,655 (C$4,668,274).

Refer also to going concern, note 2 and subsequent events, note 19(b).

The PACE long-term debt was initially payable as noted below:

14

SusGlobal Energy Corp. Notes to the Interim Condensed Consolidated Financial Statements September 30, 2023 and 2022 (Expressed in United States Dollars) (unaudited)

9. Long-Term Debt, (continued)

(a) The credit facility bore interest at the PACE base rate of 7.00% plus 1.25% per annum or 12.50% prior to the full and final mutual release, was payable in monthly blended installments of principal and interest of $6,482 (C$8,764) and matured on September 2, 2022. The first and only advance on the credit facility on February 2, 2017, in the amount of $1,183,360 (C$1,600,000), is secured by a business loan general security agreement, a $1,183,360 (C$1,600,000) personal guarantee from the CEO and a charge against the Haute leased premises. Also pledged as security are the shares of the wholly-owned subsidiaries, and a limited recourse guarantee against each of these parties. On April 3, 2020, the pledged shares were delivered by PACE and are currently held as security for the personal guarantee from the CEO and charge against the Haute leased premises. The credit facility was fully open for prepayment at any time without notice or bonus.

(b) The credit facility advanced on June 15, 2017, in the amount of $443,760 (C$600,000), bore interest at the PACE base of 7.00% plus 1.25% per annum or 12.50% prior to the full and final mutual release, was payable in monthly blended installments of principal and interest of $3,625 (C$4,901), and matured on September 2, 2022. The credit facility is secured by a variable rate business loan agreement on the same terms, conditions and security as noted above.

(c) The corporate term loan advanced on September 13, 2017, in the amount of $2,754,379 (C$3,724,147), bore interest at PACE base rate of 7.00% plus 1.25% per annum or 12.50% prior to the full and final mutual release, was payable in monthly blended installments of principal and interest of $21,974 (C$29,711), and matures September 13, 2022. The corporate term loan is secured by a business loan general security agreement representing a floating charge over the assets and undertakings of the Company, a first priority charge under a registered debenture and a lien registered under the Personal Property Security Act in the amount of $2,959,123 (C$4,000,978) against the assets including inventory, accounts receivable and equipment. The corporate term loan also included an assignment of existing contracts included in the asset purchase agreement.

For the three and nine-month periods ended September 30, 2023, $nil (C$nil) and $103,371 (C$139,089) (2022-$100,983; C$131,211 and $255,412; C$327,535) respectively, in interest was incurred on the PACE long-term debt. As at September 30, 2023, $391,785 (C$529,725) (December 31, 2022-$288,407; C$390,636) in accrued interest is included in accrued liabilities in the interim condensed consolidated balance sheets.

(d) i) The Company obtained a 1st mortgage provided by private lenders to finance the acquisition of the shares of 1684567 and to provide funds for additional financing needs, including additional lands, received in four tranches totaling $3,845,920 (C$5,200,000) (December 31, 2022-$3,839,160; C$5,200,000). The fourth tranche was received on August 13, 2021 in the amount of $1,405,240 (C$1,900,000) and a portion of this fourth tranche, $1,371,169 (C$1,853,933), was used to fund a portion of the purchase of the Hamilton Property, described under long-lived assets, net (note 7). The 1st mortgage is repayable interest only on a monthly basis at an annual rate of the higher of the Royal Bank of Canada's prime rate plus 6.05% per annum (currently 13.25%) and 10% per annum with a maturity date of December 1, 2023. The Company continues to be charged at the rate of 10% per annum. The 1st mortgage payable is secured by the shares held of 1684567, a 1st mortgage on the premises located at 704 Phillipston Road, Roslin, Ontario, Canada and a general assignment of rents.

Financing fees on the 1st mortgage totaled $298,369 (C$403,419). In addition, as at September 30, 2023 there is $10,458 (C$14,140) (December 31, 2022-$56,409; C$76,404) of unamortized financing fees included in long-term debt in the interim condensed consolidated balance sheets.

ii) On August 17,2021, the Company obtained a vendor take-back 1st mortgage in the amount of $1,479,200 (C$2,000,000), on the purchase of the Hamilton Property, described under long-lived assets, net (note 7). The 1st mortgage bears interest at an annual rate of 2% per annum, repayable monthly interest only with a maturity date of August 17, 2023, secured by the assets on the Hamilton Property. Management has been in discussions with the mortgagee to extend the maturity date.

iii) On March 1, 2023, the Company obtained a 2nd mortgage in the amount of $1,109,400 (C$1,500,000) bearing interest at the annual rate of 12%, repayable monthly, interest only with a maturity date of March 1, 2024, secured as noted under (d) i) above. The Company incurred financing fees of $44,376 (C$60,000). As at September 30, 2023 $10,577 (C$14,301) (December 31, 2022-$31,555; C$42,740) of accrued interest is included in accrued liabilities in the interim condensed consolidated balance sheets. In addition, as at September 30, 2023 there is $18,480 (C$24,986) of unamortized financing fees included in long-term debt in the interim condensed consolidated balance sheets.

15

SusGlobal Energy Corp. Notes to the Interim Condensed Consolidated Financial Statements September 30, 2023 and 2022 (Expressed in United States Dollars) (unaudited)

9. Long-Term Debt, (continued)

For the three and nine-month periods ended September 30, 2023, $138,015 (C$185,000) and $388,605 (C$522,833) (2022-$104,681; C$136,682 and $324,937; C$416,692) respectively, in interest was incurred on the mortgages payable. As at September 30, 2023 $43,599 (C$58,950) (December 31, 2022- $31,555; C$42,740) in accrued interest is included in accrued liabilities in the interim condensed consolidated balance sheets.

(e) As a result of the COVID-19 virus, the Government of Canada launched the Canada Emergency Business Account (the "CEBA"), a program to ensure that small businesses have access to the capital they need to see them through the current challenges and better position them to quickly return to providing services to their communities and creating employment. The program is administered by Canadian chartered banks and credit unions.

The Company has received a total of $73,960 (C$100,000) under this program, from its Canadian chartered bank.

Under the initial term date of the loans, which is detailed in the CEBA term loan agreements, the amount is due on December 31, 2022 and is interest-free. If the loans are not repaid by December 31, 2022, the Company can make payments, interest only, on a monthly basis at an annual rate of 5%, under the extended term date, beginning January 1, 2023, maturing December 31, 2025.

The CEBA term loan agreements were amended by extending the interest free repayment date by one year to December 31, 2023 (subsequently extended to January 18, 2024). If paid by December 31, 2023, 33.33% ($25,176; C$33,333), previously 25%, of the loans would be forgiven. Repayment terms on the extended period are unchanged.

The CEBA term loan agreements contain a number of positive and negative covenants, for which the Company is not in full compliance.

(f) On April 8, 2021, the Company took delivery of a truck and hauling trailer for a total purchase price of $161,483 (C$218,338) plus applicable harmonized sales taxes. The purchase was financed by a bank term loan of $147,920 (C$200,000), over a forty-eight-month term, bearing interest at 4.95% per annum with monthly blended instalments of principal and interest payments of $3,625 (C$4,901) due April 7, 2025.

For the three and nine-month periods ended September 30, 2023, $823 (C$1,103) and $2,794 (C$3,760) (2022- $1,312; C$1,716 and $4,342; C$5,568) in interest was incurred.

As a result of the Company being in default on its obligations for its convertible promissory notes, the obligations under this bank term loan are disclosed as a current obligation.

10. Obligations under Capital Lease

							September 30, 2023			December 31, 2022
		(a)		(b)			Total			Total
Obligations under Capital Lease	$	-	$	83,950		$	83,950		$	121,758
Less: current portion				(83,950	)		(83,950	)		(57,275	)
Long-term portion	$	-	$	-		$	-		$	64,483

Refer also to going concern, note 2.

(a) The lease agreement for certain equipment for the Company's organic composting facility at a cost of $183,014 (C$247,450), is payable in monthly blended installments of principal and interest of $3,785 (C$5,118), plus applicable harmonized sales taxes for a period of forty-six months plus the first two monthly blended installments of $7,396 (C$10,000) plus applicable harmonized sales taxes and an option to purchase the equipment for a final payment of $18,253 (C$24,680) plus applicable harmonized sales taxes on February 27, 2022. The leasing agreement bears interest at the rate of 6.15% annually, compounded monthly, due January 27, 2022. The final payment was made on June 7, 2022.

16

SusGlobal Energy Corp. Notes to the Interim Condensed Consolidated Financial Statements September 30, 2023 and 2022 (Expressed in United States Dollars) (unaudited)

10. Obligations under Capital Lease, (continued)

(b) The lease agreement for certain equipment for the Company's organic waste processing and composting facility at a cost of $288,185 (C$389,650), is payable in monthly blended installments of principal and interest of $5,068 (C$6,852), plus applicable harmonized sales taxes for a period of fifty-nine months plus an initial deposit of $14,385 (C$19,450) plus applicable harmonized sales taxes and an option to purchase the equipment for a final payment of a nominal amount of $74 (C$100) plus applicable harmonized sales taxes on February 27, 2025. The leasing agreement bears interest at the rate of 3.59% annually, compounded monthly, due February 27, 2025.

The lease liabilities are secured by the equipment under capital lease as described under long-lived assets, net (note 7).

Minimum lease payments as per the original terms of the obligations under capital lease are as follows:

In the three-month period ending December 31, 2023	$	20,272
In the year ending December 31, 2024		60,817
In the year ending December 31, 2025		5,142
		86,231
Less: imputed interest		(2,281	)
Total	$	83,950

For the three and nine-month periods ended September 30, 2023, $785 (C$1,053) and $2,768 (C$3,725) (2022-$1,361; C$1,770 and $3,599; C$4,616) in interest was incurred.

As a result of the Company being in default on its obligations for its convertible promissory notes, the obligations under capital lease are disclosed as a current obligation.

11. Convertible Promissory Notes

	****		September 30, 2023		December 31, 2022
(a)	Convertible promissory notes-October 28 and 29, 2021	$	2,251,696	$	2,599,925
(b)	Convertible promissory notes-March 3 and 7, 2022		5,948,014		3,696,044
(c)	Convertible promissory note- June 23, 2022		1,556,990		1,500,464
		$	9,756,700	$	7,796,433

The convertible promissory notes are accounted for under the fair value option in the interim condensed consolidated balance sheets. The actual principal outstanding on the balance of the convertible promissory notes as at September 30, 2023 is $6,872,575 (December 31, 2022-$5,825,260), including accrued interest of $662,415 (2022-$nil).

(a) On October 28 and 29, 2021, the Company entered into two securities purchase agreement (the "October 2021 SPAs) with two investors (the "October 2021 Investors") pursuant to which the Company issued to the October 2021 Investors two 15% OID unsecured convertible promissory notes (the "October 2021 Investor Notes") in the principal amount of $1,765,118. The October 2021 Investor Notes are convertible, with accrued interest, from time to time on notice of a liquidity event (a "Liquidity Event"). A Liquidity Event is defined as a public offering of the Company's common stock resulting in the listing for trading of the common stock on any one of a number of exchanges. The October 2021 Investor Notes can be prepaid prior to maturity for an amount of 120% of the prepayment amount.

The maturity date of the October 2021 Investor Notes is the earlier of (i) July 28 and 29, 2022 and (ii) the occurrence of a Liquidity Event, as described above (the "Maturity Date"). Upon the occurrence of a Liquidity Event, the October 2021 Investors are entitled to convert all or a portion of their October 2021 Investor Notes including any accrued and unpaid interest at a conversion price (the "Conversion Price") equal to 70% (representing a 30% discount) multiplied by the price per share of the Common Stock at the public offering associated with the Liquidity Event.

17

SusGlobal Energy Corp. Notes to the Interim Condensed Consolidated Financial Statements September 30, 2023 and 2022 (Expressed in United States Dollars) (unaudited)

11. Convertible Promissory Notes, (continued)

Upon the occurrence of an event of default, the interest rate on the October 2021 Investor Notes will immediately accrue at 24% per annum and be paid in cash monthly to the October 2021 Investors, until the default is cured. And the Conversion Price will be reset to 85% of the lowest volume weighted average price for the ten consecutive trading days ending on the trading day that is immediately prior to the applicable conversion date.

On May 11, 2022, the holder of the October 29, 2021 investor note, provided an amendment for an optional conversion of his investor notes. The conversion price was amended to be (i) the product of the Liquidity Event price multiplied by the discount of 35% (previously 30%) or (2) the greater of (i) the product of the closing price per share of the Company's Common Stock as reported by the applicable trading market on the trading day immediately prior to the conversion date multiplied by the discount (35%) or $1.70 multiplied by the discount (35%), provided that in the event of a conversion, of investor note, at a time that a Liquidity Event shall not have previously occurred and be continuing, the conversion price for such conversion shall be as provided in the amendment.

On August 16, 2022, the Company was sent a notice of default from one of the October 2021 Investors, whose investor note was issued on October 29, 2021. On September 15, 2022, the Company and the investor of the October 2021 investor note entered into an amendment to the October 2021 investor note which served as a cure to the previously issued default notice.

Pursuant to the September 15, 2022 amendment, the Company and the October 29, 2021 investor, agreed that the outstanding principal amount of the October 29, 2021 investor note would increase by 10% to $1,618,100 from the previously issued principal amount of $1,471,000. The new agreed upon maturity date was changed to November 15, 2022, subject to certain conditions and the maturity date would automatically be extended to January 15, 2023 provided that the October 29, 2021 investor does not notify the Company in writing prior to the maturity date that the automatic extension of the maturity date has been cancelled. In connection with this amendment, the Company agreed to use its best efforts to promptly facilitate the conversion of the October 29, 2021 investor note into shares of the Company's common stock.

Further, the October 29, 2021 investor agreed not to convert more than $100,000 in any one conversion notice and the October 29, 2021 investor agreed not to issue an additional conversion notice unless and until any previously issued conversion shares have been sold by the October 29, 2021 investor or exceed 10% of the daily trading volume in selling the shares of the Company's common stock

On September 21, 2022 and November 10, 2022, the October 29, 2021 investor issued conversion notices to the Company and the Company issued 372,090 common shares at conversion prices ranging from $0.1885 to $0.2339 per share respectively, on the conversion of $25,000 and $50,000 respectively, of the October 29, 2021 investor note, having a fair market value of $97,129 on conversion. The October 29, 2021 investor has not informed the Company of an extension to the current maturity date but continued to issue conversion notices to the Company prior to the default notice of June 8, 2023, noted below.

On December 22, 2022, the October 28, 2021 investor, whose October 28, 2021 investor note had a previous Principal Amount of $294,118 and a maturity date of July 28, 2022, provided the Company with an amendment whereby the maturity date of the October 28, 2021 investor note was extended to the earlier of July 28, 2023 or the occurrence of a Liquidity Event. In addition, the Company agreed that the investor could convert his October 28, 2021, investor note into shares of the Company's common stock at any time at the investor's option. Previously, the October 28, 2021 Note was only convertible upon the occurrence of the Liquidity Event. The Company also agreed to change the conversion price to be the lowest trading bid price of the Company's common stock on the trading day immediately prior to the conversion date multiplied with a 35% discount to that lowest price. Previously, the conversion price was a 30% discount to the price at which the securities were sold in connection with the Liquidity Event. In consideration for the extension of the maturity date, the Company agreed to issue the investor 500,000 shares of the Company's common stock. The Company used the with-and-without method to allocate the proceeds between the convertible promissory note and the common shares. As a result, all the proceeds were allocated to the convertible promissory note and $nil to the common shares.

18

SusGlobal Energy Corp. Notes to the Interim Condensed Consolidated Financial Statements September 30, 2023 and 2022 (Expressed in United States Dollars) (unaudited)

11. Convertible Promissory Notes, (continued)

On June 8, 2023, the October 29, 2021 investor's counsel sent the Company a notice of default on the October 29, 2021 investor note and the March 2022 Investor Notes, described below. The default was caused by the holders of these promissory notes not being able to receive shares of the Company's common stock, par value $0.0001 (the "Common Stock") pursuant to the conversion terms of these promissory notes. All cure periods available pursuant to the promissory notes had expired prior to June 8, 2023. The October 29, 2021 investor note had a principal balance of $1,300,000 before and after the default and the March 2022 Investor Notes, whose principal balance totaled $2,640,000 prior to the notice of default, increased by 20% or $528,000 in total as a result of the notice of default. In addition, default interest at the rate of 24% per annum accrued on the March 2022 Investor Notes and totaled $424,946 the June 8, 2023.

During the three and nine-month periods ended September 30, 2023, the October 29, 2021 investor provided the Company with notices of conversion to convert in total $nil and $243,100 respectively, of his investor note having a fair value on conversion of $nil and $374,000 respectively, for nil and 1,650,709 respectively, of common shares of the Company. The conversion prices per share for the three and nine-month periods ended September 30, 2023 ranged from $nil to $nil and $0.1294 to $0.3400 respectively.

The Company initially reserved 1,905,000 of its authorized and unissued Common Stock (the "October 2021 Reserved Amount"), free from pre-emptive rights, to be issued upon conversion of the October 2021 Investor Notes.

(b) On March 3 and 7, 2022, the Company executed two unsecured convertible promissory notes with two investors (the "March 2022 Investors"), who purchased 25% original issue discount (the "OID") unsecured convertible promissory notes (the "The March 2022 Investor Notes") in the aggregate principal amount totaling $2,000,000 (the "Principal Amount") with such Principal Amount convertible into shares of the Company's common stock (the "Common Stock") from time to time triggered by the occurrence of certain events. The March 2022 Investor Notes carried an OID totaling $500,000 which is included in the principal balance of the Notes. The funds were received on March 7, 2022 and March 11, 2022 in the total amount of $1,425,000, net of the OID and professional fees.

The maturity date of the Notes is the earlier of (i) June 3 and 7, 2022, and (ii) the occurrence of a Liquidity Event (as defined in the Notes) (the "Maturity Date"). The final payment of the Principal Amount (and default interest, if any) shall be paid by the Company to the Investors on the Maturity Date. On an event of default, the principal amount of the March 2020 Investor Notes will increase to 120% of their original principal amounts. The Investors are entitled to, following an event of default, (as defined in the March 2022 Investor Notes) to convert all or any amount of the Principal Amount and any interest accruing at the default interest rate of 24% per annum into Common Stock, at a conversion price (the "Conversion Price") equal to 70% (representing a 30% discount) multiplied by the price per share of the Common Stock at any national security exchange or over-the-counter marketplace for the five (5) trading days immediately prior to the March 2022 Investors' notice of conversion.

On May 11, 2022, the holder of the March 3, 2022 Investor Note and on May 13, 2022, the holder of the March 7, 2022 Investor Note, each provided an amendment for an optional conversion of their investor notes. The conversion price was amended to be (i) the product of the Liquidity Event price multiplied by the discount of 35% (previously 30%) or (2) the greater of (i) the product of the closing price per share of the Company's Common Stock as reported by the applicable trading market on the trading day immediately prior to the conversion date multiplied by the discount (35%) or $1.70 multiplied by the discount (35%), provided that in the event of a conversion, of his investor note, at a time that a Liquidity Event shall not have previously occurred and be continuing, the conversion price for such conversion shall be as provided in amendment for each.

Further, on June 29, 2022, the March 2022 Investors revised their March 2022 Investor Notes, to extend the maturity date to August 15, 2022 and increase the principal amount of each of the March 2022 Investor Notes by twenty percent (20%), from a Principal Amount of $2,000,000 to $2,400,000. In addition, the Company agreed to issue 100,000 common shares to the March 2022 Investor. These restricted shares of the Company's common stock will survive a reverse stock split prior to listing. The common shares were issued on July 11, 2022. The restructurings were accounted for as extinguishments as they were renegotiated after maturity.

19

SusGlobal Energy Corp. Notes to the Interim Condensed Consolidated Financial Statements September 30, 2023 and 2022 (Expressed in United States Dollars) (unaudited)

11. Convertible Promissory Notes, (continued)

On August 16, 2022, the Company was sent notices of default from the March 2022 Investors. And, on September 15, 2022, the Company and the March 2022 Investors entered into an amendment to the March 2022 Investor Notes which served as a cure to the previously issued default notices.

Pursuant to the September 15, 2022 amendment, the Company and the March 2022 Investors agreed that the outstanding Principal Amount totaling $2,400,000 would increase by 10% to $2,640,000. The new agreed upon maturity date was now November 15, 2022, subject to certain conditions and the maturity date was extended to January 15, 2023. In connection with this amendment, the Company agreed to use its best efforts to promptly facilitate the conversion of the March 2022 Investor Notes into shares of the Company's common stock only after the October 29, 2021 investor note, as described under paragraph (a) above, has been fully converted.

Further, in the event that the October 29, 2021 investor note has been fully converted and the conversion shares sold, thereafter, the March 2022 Investor Notes may both be converted at the March 2022 Investors' discretion on a pari-passu basis, provided, however, that no conversion shall exceed $50,000 for each of the March 2022 Investor Notes and each of the March 2022 Investors shall not sell more than 5% of the daily trading volume in selling the Company's shares of common stock.

As noted above, on June 8, 2023 the counsel for the March 2022 Investors provided the Company with a notice of default. This resulted in the principal balance of the March 2022 Investor Notes increasing in principal from $2,640,000 in total to $3,168,000, in total. In addition, interest is accruing at the rate of 24% per annum. As at September 30, 2023, accrued interest of $662,415 (2022-$nil) is included in the convertible promissory notes balance.

(c) On June 23, 2022, the Company executed one convertible promissory note (the "June 2022 Investor Note") with an investor (the "June 2022 Investor") in the amount of $1,200,000 bearing interest at 10% per annum and having an OID of 10%. The maturity date of the June 2022 Investor Note is the earlier of December 23, 2022 and the date of the Company's uplist to a national securities exchange. The proceeds from the June 2022 Investor Note were used to repay this investor's June 2021 Investor Note and their December 2021 Investor Note which matured June 16, 2022 and June 2, 2022 respectively, plus accrued interest. The net proceeds, after repaying the December 2021 Investor Note and the June 2021 Investor Note with accrued interest and related disbursements totaled approximately $204,000. The net proceeds were received on June 28, 2022. In addition, the Company issued 1,333,333 common shares to the June 2022 Investor on June 29, 2022 which have been included in the determination of the extinguishment gain and recognized at fair value. The restructuring was accounted for as extinguishments as it was renegotiated after maturity.

The June 2022 Investor may convert the principal amount and any accrued but unpaid interest into the Company's common stock from time to time following an event of default ('Event of Default"), as defined in the June 2022 Investor Note, with interest accruing at the default interest rate of 15% per annum from the Event of Default, at a conversion price (the "Conversion Price") equal to the lesser of 90% (representing a 10% discount) multiplied by the price per share of the Common Stock at the public offering associated with the Event of Default.

On December 29, 2022, the Company and the investor agreed to extend the maturity date to the earlier of June 23, 2023 or the occurrence of a Liquidity Event. In consideration for the extension of the maturity date, the Company agreed to: (i) increase the principal amount to $1,320,000.00 (the "Increased Principal Amount"); (ii) that interest is payable on the Increased Principal Amount and that such interest (but not any default interest that becomes due) is paid in full and in advance by the Company issuing to the June 2022 Investor 450,000 shares of the Company's common stock and (iii) issue to the June 2022 Investor 666,667 shares of the Company's common stock (the "Modification Fee Shares"). The parties agreed that the Modification Fee Shares served as an increase in the amount of commitment fee shares issued to the investor pursuant to the securities purchase agreement signed by the Company and the June 2022 Investor on June 23, 2022, in connection with the issuance of the June 2022 Investor Note. The Company used the with-and-without method to allocate the proceeds between the convertible promissory note and the common shares. As a result, all the proceeds were allocated to the convertible promissory note and $nil to the common shares.

On June 29, 2023, the June 2022 Investor provided a 45-day extension of the June 2022 Investor Note in exchange for an increase in the principal balance of the June 2022 Investor Note of $100,000, from $1,320,000 to $1,420,000.

20

SusGlobal Energy Corp. Notes to the Interim Condensed Consolidated Financial Statements September 30, 2023 and 2022 (Expressed in United States Dollars) (unaudited)

11. Convertible Promissory Notes, (continued)

The Company initially reserved 8,000,000 of its authorized and unissued Common Stock (the "June 2022 Reserved Amount"), free from pre-emptive rights, to provide for the issuance of Common Stock upon the full conversion of the June 2022 Investor Note.

Pursuant to the terms of the security purchase agreements for the convertible promissory notes described above, for so long as the noted investors own any shares of Common Stock issued upon the conversion of the applicable investor notes, the Company has covenanted to secure and maintain the listing of such shares of Common Stock. The Company is also subject to certain customary negative covenants under the investor notes and the security purchase agreements, including but not limited to the requirement to maintain its corporate existence and assets, require registration of or stockholder approval for the investor notes or the Common Stock upon the conversion of the applicable investor notes.

The convertible promissory notes described above, contain certain representations, warranties, covenants and events of default including if the Company is delinquent in its periodic report filings with the Securities and Exchange Commission which would increase the amount of the principal and interest rates under the convertible promissory notes in the event of such defaults. In the event of a default, at the option of the applicable investor and in their sole discretion, the applicable investor may consider any of their convertible promissory notes immediately due and payable.

Refer also to going concern, note 2.

Fair value option for the convertible promissory notes

The Company is eligible to elect the fair value option under ASC 825, Financial Instruments and bypass analysis of the potential embedded derivative features described above. The Company believes that the fair value option better reflects the underlying economics of the convertible promissory notes issued after December 31, 2020. As a result, the 2021 and 2022 promissory notes were recorded at fair value upon issuance and subsequently remeasured at each reporting date until settled or converted. The Company recognized the notes initially at fair value, which exceeded the proceeds received resulting in a day one loss that has been recognized in net loss. Transaction and other issuance costs have been expensed as incurred. Subsequently, the Company recognizes the notes at fair value with changes in net loss.

Gains and losses attributable to changes in credit risk were insignificant during the three and nine-month periods ended September 30, 2023 and 2022. The Company recognized a loss of $nil (2022-$659,526) at the time of issuance of the convertible promissory notes and an additional loss of $117,710 and $2,296,845 (2022-$1,447,619 and $6,572,564) attributed to the change in fair value of the convertible promissory notes for the three and nine-month periods ended September 30, 2023. In addition, for the three and nine-month periods ended September 30, 2023, the Company recognized a gain on extinguishment of convertible promissory notes of $nil and $nil (2022-$nil and $4,274,820). Further, for the three and nine-month periods ended September 30, 2023, the Company incurred debt issuance costs of $nil and $nil (2022-$nil and $101,000) respectively, which were expensed as incurred.

12. Fair Value Measurement

The following table presents information about the Company's financial assets and liabilities that are measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation:

		Fair value as at September 30, 2023 and December 31, 2022 Using:
		Level 3		September 30, 2023		December 31, 2022
Assets:	$	-	$	-	$	-
Liabilities:
Convertible promissory notes		9,756,700		9,756,700		7,796,433
	$	9,756,700	$	9,756,700	$	7,796,433
21
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SusGlobal Energy Corp. Notes to the Interim Condensed Consolidated Financial Statements September 30, 2023 and 2022 (Expressed in United States Dollars) (unaudited)

12. Fair Value Measurement, (continued)

During each of the three and nine-month periods ended September 30, 2023 and 2022, there were no transfers between Level 1, Level 2, or Level 3. There were no financial assets or other liabilities measured at fair value on a recurring basis as of September 30, 2023 and December 31, 2022.

The following table summarizes the change in Level 3 financial instruments during the nine-month period ended September 30, 2023 and year ended December 31, 2022.

		September 30, 2023			December 31, 2022
Fair value at December 31, 2022	$	7,796,433		$	3,798,516
Fair value at issuance		-			2,159,526
Amendments		2,180,923			-
Conversions/repayments		(336,578	)		(136,880	)
Mark to market		115,922			7,663,844
Settlement		-			(5,688,573	)
Fair value at September 30, 2023 and December 31, 2022	$	9,756,700		$	7,796,433

Financial instruments measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The fair value of the convertible promissory notes at issuance and subsequent financial reporting dates was estimated based on significant inputs not observable in the market, which represent level 3 measurements within the fair value hierarchy.

The fair value of the convertible promissory notes at issuance and at each reporting period was estimated based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The Company used a scenario-based binomial model to estimate the fair value of the convertible promissory notes. The model determines the fair value from a market participant's perspective by evaluating the payouts under hold, convert, or call decisions. The most significant estimates and assumptions used as inputs are those concerning type, timing and probability of specific scenario outcomes. Specifically, the Company assigned a probability of default, which would increase the required payout as described in note 11 and calculated the fair value under each scenario. At the issuance dates of the convertible promissory notes, the probability of default ("PD") was assumed to be 75% (2022-75%), except for those that were amended post maturity which were assumed to be 100%. The probability of default was determined in reference to a 1-year PD rate for a 'CCC+' rating at issuance, and a combination of 'CC' and 'CCC-' credit ratings at September 30, 2023 and December 31, 2022. Increasing (decreasing) the probability of default would result in a significantly higher (lower) fair value measurement.

Other significant unobservable inputs include the expected volatility, discount for lack of marketability and the credit spread. The expected volatility was based on the historical volatility over a look-back period that was consistent with the balance-remaining term of the instruments. A range of 138.4% to 161.4% was used for the expected volatility (2022-92% to 159%). The discount for lack of marketability was determined using a range of option pricing methodologies using the remaining restriction term corresponding to each instrument on the relevant valuation date. A range of 0% to 40% was used for the discount for lack of marketability. The credit spread was determined in reference to credit yields of companies with similar credit risk at the date of valuation. A premium of 10% was added to the credit spread as an instrument specific adjustment to reflect the Company's risk of default. A figure of 23.92% (2022-24.4% to 25.6%) was used for the credit spread.

Refer also to going concern, note 2.

13. Loans Payable to Related Parties

		September 30,<br>2023		December 31,<br>2022
Directors	$	47,500	$	40,000
Officers		12,441		-
Total	$	59,941	$	40,000
22
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SusGlobal Energy Corp. Notes to the Interim Condensed Consolidated Financial Statements September 30, 2023 and 2022 (Expressed in United States Dollars) (unaudited)

13. Loans Payable to Related Parties, (continued)

The loans owing to directors were received by the Company on June 6, 2022 and March 16, 2023, are unsecured, bearing interest at 5% per annum and due on demand.

During the three and nine-month periods ended September 30, 2023, $538 and $1,684 (2022-$548 and $679) respectively, in interest was incurred on the directors' loans. As at September 30, 2023, $2,839 (December 31, 2022-$1,088) of accrued interest is included in accrued liabilities in the interim condensed consolidated balance sheets.

The loans from the officers are non-interest bearing and due on demand.

14. Capital Stock

As at September 30, 2023, the Company had 150,000,000 common shares authorized with a par value of $.0001 per share and 124,783,286 (December 31, 2022-113,438,832) common shares issued and outstanding.

For the nine -month period ended September 30, 2023, the Company issued 1,650,709 (December 31, 2022-2,372,090) common shares on the conversion of a convertible promissory note having a fair value on conversion in the amount of $374,000 (December 31, 2022-$579,247) at conversion prices ranging from $0.1294 to $0.3400 (December 31, 2022- $0.1885 to $0.2339) per share. This resulted in a loss on conversion of $74,359 disclosed under other expenses, note 16.

In addition, the Company raised $380,971 (December 31, 2022-$907,760, net of share issue costs of $1,440), on a private placement for 1,536,582 (December 31, 2022-4,444,041) common shares at prices ranging from $0.2047 to $0.3250 (December 31, 2022-$0.154 to $0.45) per share, including a private placement to an independent director. Further, 1,790,000 (December 31, 2022-6,655,000) common shares of the Company were issued for professional services valued at $396,895 (December 31, 2022-$2,186,110), based on the closing trading prices on the effective dates of the consulting agreements. The portion relating to the nine-month period ended September 30, 2023, $396,895 (December 31, 2022-$2,092,230) is included in the amount disclosed as stock-based compensation in the interim condensed consolidated statements of operations and comprehensive loss and the balance, $nil (December 31, 2022-$374,531) is included in prepaid expenses and deposits in the interim condensed consolidated balance sheets. In addition, during the year ended December 31, 2022, 4,125,211 shares were issued on the issuance of debt on extinguishment of existing debt having a fair value on issuance of $1,652,715 and 1,616,667 common shares were issued on the extension of the maturity dates on convertible promissory notes having a fair value on issuance of $231,067. Further, on September 8, 2022, 241,502 common shares were returned to treasury.

During the nine-month period ended September 30, 2023, Travellers converted $512,403 (C$688,883) (December 31, 2022-$33,371; C$45,200 in outstanding accounts payable) in outstanding loans and outstanding accounts payable for 2,422,163 (December 31, 2022-193,778) common shares of the Company, based on closing trading prices on the day prior to each conversion.

On January 3, 2023, the Company issued 3,000,000 (January 2, 2022-1,000,000) common shares to the CEO and 100,000 (January 2, 2022-50,000) common shares to the CFO in connection with their executive consulting agreements, valued at $446,400 (December 31, 2022-$240,450), based on the closing trading price on the effective date of their executive consulting agreements. Included under management stock-based compensation in the interim condensed consolidated statements of operations and comprehensive loss for the three and nine-month periods ended September 30, 2023 is an amount of $57,600 and $172,800 (2022-$60,113 and $180,339) respectively. Also, on January 17, 2022 and March 22, 2022, the Company issued 230,000 common shares on proceeds previously received.

Furthermore, on January 3, 2023, the Company issued 20,000 (February 7, 2022-10,000) common shares to an employee valued at $2,880 (December 31, 2022-$1,990) based on the closing trading price on the date of issuance. Also, 100,000 common shares were issued on March 1, 2023 to a new director appointed on February 18, 2023, valued at $21,000, based on the closing trading price on the date appointed. Both amounts are disclosed as stock-based compensation in the interim condensed statements of operations and comprehensive loss. In addition, the Company issued 225,000 common shares for other services relating to satisfying certain outstanding interest expense on a first mortgage, valued at $34,124 (C$45,000) based on the closing trading price on issuance.

23

SusGlobal Energy Corp. Notes to the Interim Condensed Consolidated Financial Statements September 30, 2023 and 2022 (Expressed in United States Dollars) (unaudited)

14. Capital Stock, (continued)

As at September 30, 2023, the Company recorded a balance of $60,100 (December 31, 2022-$213,600 for 750,000 shares to be issued relating to consulting agreements, of which 500,000 were issued on January 27, 2023, valued on the effective dates stipulated in the consulting agreements) for 250,000 shares to be issued relating to a consulting agreement with a service provider for professional services, valued on the effective dates stipulated in the consulting agreement. These professional services are included under stock-based compensation in the interim condensed consolidated statements of operations and comprehensive loss. During the three-month period ended March 31, 2023, the Company issued 500,000 (2022-230,000) common shares for proceeds previously received.

15. Commitments

a) Effective January 1, 2023, as stipulated in each of their respective executive consulting agreements, the CEO's monthly fee is $29,584 (C$40,000) for 2023 and $36,980 (C$50,000) for 2024 and for the CFO $9,245 (C$12,500). The future minimum commitment under these consulting agreements, is as follows:

For the three-month period ending December 31, 2023	$	116,487
For the year ending December 31, 2024		443,760
****	$	560,247

b) The Company has agreed to lease its office premises from Haute on a month-to-month basis, at the monthly rate of $6,656 (C$9,000). The Company is responsible for all expenses and outlays in connection with its occupancy of the leased premises, including, but not limited to utilities, realty taxes and maintenance.

c) Effective February 3, 2021, upon the successful completion of a Nasdaq listing, the Company has committed a payment of $300,000 to a consulting firm providing advisory and consulting services.

d) On November 5, 2021, the Company committed to the design and construction of its Hamilton, Ontario, Canada facility, including architectural and general consulting fees in the amount of $6,749,448 ($9,125,809).

e) On September 15, 2023, the Company signed a one-year marketing agreement with a consulting agency to provide various marketing services. As Compensation, the consulting agency received 750,000 common shares of the Company valued at $194,250, priced at the closing trading price on commencement of the agreement or $0.2590 per share. In addition, the consulting agency will receive as a fee, 10% of an annual marketing budget anticipated to be $1,000,000 annually, subject to a $15,000,000 equity financing by December 31, 2023.

f) Effective November 1, 2022, the Company acquired the exclusive rights to the use of a well-known athlete's name, endorsement and the like, for the purposes of advertisement, promotion and sale of the Company's products. In return, the Company issued 500,000 common shares of the Company and the individual's company is entitled to the following fees:

• $125,000 sixty days subsequent to the Company's shares listed on the Nasdaq or another senior exchange.

• $125,000 on the one-year anniversary of the first payment above and,

• $125,000 on the one-year anniversary of the second payment above.

There is also an arrangement to issue 250,000 warrants to the individual's company once the Company's shares are listed on the Nasdaq or another major exchange.

g) The Company was assigned the land lease on the purchase of certain assets of Astoria Organic Matters Ltd., and Astoria Organic Matters Canada LP. The land lease, which comprises 13.88 acres in Roslin, Ontario, Canada, has a term expiring March 31, 2034. The basic monthly rent on the net lease is $2,219 (C$3,000) and is subject to adjustment based on the consumer price index as published by Statistics Canada ("CPI"). To date, no adjustment for CPI has been charged. The Company is also responsible for any property taxes, maintenance, insurance and utilities. In addition, the Company has the right to extend the lease for five further terms of five years each and one further term of five years less one day. As the Company acquired the business of 1684567, the previous landlord, in 2019, there are no future commitments for this lease.

24

SusGlobal Energy Corp. Notes to the Interim Condensed Consolidated Financial Statements September 30, 2023 and 2022 (Expressed in United States Dollars) (unaudited)

15. Commitments, (continued)

The Company is responsible through a special provision of the site plan agreement with the City of Belleville (the "City"), Ontario, Canada, that it is required to fund road maintenance required by the City through to September 30, 2025 at an annual rate of $7,396 (C$10,000).

The future minimum commitment is as follows:

For the three-month period ending December 31, 2023	$	-
For the year ending December 31, 2024		7,396
For the year ending December 31, 2025		7,396
****	$	14,792

h) PACE had provided the Company a letter of credit in favor of the MECP in the amount of $204,744 (C$276,831) and, as security, has registered a charge of lease over the organic waste processing and composting facility, located at 704 Phillipston Road, Roslin, Ontario, Canada. As noted under funds held in trust, note 6, the Company and PACE finalized a full and final release of all obligations owed to PACE The funds held in trust are being held in escrow with the Company's Canadian legal counsel and will be released to PACE once this current letter of credit is returned to PACE by the MECP. This will occur once the Company replaces this letter of credit with a new letter of credit in the amount of $471,596 ($C637,637). As security, PACE had registered a charge of lease over the premises, located at 704 Phillipston Road, Roslin, Ontario, Canada. The Company is required to provide for environmental remediation and clean-up costs for its organic waste processing and composting facility.

Refer also to subsequent events, note 19(b).

The letter of credit is a requirement of the MECP and is in connection with the financial assurance provided by the Company for it to be in compliance with the MECPs environmental objectives. The MECP regularly evaluates the Company's organic waste processing and composting facility to ensure compliance is adhered to and the letter of credit is subject to change by the MECP. As a result of audits conducted by the MECP in December of 2020, the Company has accrued estimated and actual costs for corrective measures as a result of the MECP's audits totaling $692,799 (C$936,721) (December 31, 2022-$676,635; C$904,287).

As at September 30, 2023, the MECP has not drawn on the letter of credit. The Company is in the process of obtaining a letter of credit for the new financial assurance with the MECP in the amount of $471,596 (C$637,637).

16. Other Expenses

		September 30,2023			September 30,<br>2022
(a) Loss on conversion of convertible promissory note	$	(74,359	)	$	-
(b) Loss on revaluation of convertible promissory notes		(2,296,845	)		(7,232,090	)
(c) Gain on extinguishment of convertible promissory notes		-			4,274,820
(d) Settlement payment		-			(250,000	)
	$	(2,371,204	)	$	(3,207,270	)

(a) As described under convertible promissory notes, note 11(a), the loss is on five conversions of the October 29, 2021 investor note.

(b) Loss on revaluation of convertible promissory notes. Refer to note 11, convertible promissory notes.

(d) Accrued settlement payment for the release of services of a party for an underwriting offering dated March 23, 2022 and amended May 23, 2022.

25

SusGlobal Energy Corp. Notes to the Interim Condensed Consolidated Financial Statements September 30, 2023 and 2022 (Expressed in United States Dollars) (unaudited)

17. Economic Dependence

The Company generated 95% and 93% of its revenue from four customers, during the three and nine-month periods ended September 30, 2023 (2022-93% and 85% from four customers) respectively.

18. Legal Proceedings

From time to time, the Company may become involved in litigation relating to claims arising from the ordinary course of business. Management believes that there are currently no claims or actions pending against us, the ultimate disposition of which would have a material adverse effect on our results of operations, financial condition or cash flows.

The Company has a claim against it for unpaid legal fees in the amount of $48,252 (C$65,241). The amount is included in accounts payable on the Company's interim condensed consolidated balance sheets.

19. Subsequent Events

The Company's management has evaluated subsequent events up to the date the interim condensed consolidated financial statements were issued, pursuant to the requirements of ASC 855 and has determined the following to be material subsequent events:

(a) On November 2, 2023, the Company completed the purchase of additional land, consisting of a 2.03-acre site in Hamilton, Ontario, Canada for $2,292,760 (C$3,100,000). Prior to completing the purchase, the Company paid deposits of $229,276 (C$310,000) to the vendor, included under prepaid expenses and deposits on the interim condensed consolidated balance sheets. The balance of the purchase price was satisfied with a $1,479,200 (C$2,000,000) vendor take-back mortgage bearing interest at 7% annually, maturing in two years and the balance in cash financed by a second mortgage on the additional land bearing interest at 13% annually, maturing in one year and is secured by a third mortgage on the property in Belleville, Ontario, Canada.

(b) On November 3, 2023, the funds held in escrow, in the amount of $924,500 (C$1,250,000), were released to PACE (now Alterna Savings and Credit Union Limited "Alterna") and Alterna released all security it held to the Company.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Certain statements in this Management's Discussion and Analysis ("MD&A"), other than purely historical information, including estimates, projections, statements relating to our business plans, objectives and expected operating results, and the assumptions upon which those statements are based, are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may," "would," "expect," "intend," "could," "estimate," "should," "anticipate," or "believe," and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. Readers should carefully review the risk factors in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with the Securities and Exchange Commission on April 17, 2023.

The following MD&A is intended to help readers understand the results of our operation and financial condition, and is provided as a supplement to, and should be read in conjunction with, our Interim Unaudited Financial Statements and the accompanying Notes to Interim Unaudited Financial Statements under Part 1, Item 1 of this Quarterly Report on Form 10-Q.

Growth and percentage comparisons made herein generally refer to the three and nine-month periods ended September 30, 2023 compared with the three and nine-month periods ended September 30, 2022 unless otherwise noted. Unless otherwise indicated or unless the context otherwise requires, all references in this document to "we, "us, "our," the "Company," and similar expressions refer to SusGlobal Energy Corp., and depending on the context, its subsidiaries.

SPECIAL NOTICE ABOUT GOING CONCERN AUDIT OPINION

OUR AUDITORS ISSUED OPINIONS EXPRESSING SUBSTANTIAL DOUBT AS TO OUR ABILITY TO CONTINUE IN BUSINESS AS A GOING CONCERN FOR THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021. YOU SHOULD READ THIS QUARTERLY REPORT ON FORM 10-Q WITH THE "GOING CONCERN" ISSUES IN MIND.

This Management's Discussion and Analysis should be read in conjunction with the unaudited interim condensed consolidated financial statements included in this Quarterly Report on Form 10-Q (the "Financial Statements"). The financial statements have been prepared in accordance with generally accepted accounting policies in the United States ("GAAP"). Except as otherwise disclosed, all dollar figures included therein and in the following management discussion and analysis are quoted in United States dollars.

OVERVIEW

The following organization chart sets forth our wholly-owned subsidiaries:

On February 4, 2019, the Company registered its common stock, having a par value of $.0001 per share, pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and is effective pursuant to General Instruction A.(d).

SusGlobal Energy Corp. ("SusGlobal") was formed by articles of amalgamation on December 3, 2014, in the Province of Ontario, Canada and its executive office is in Toronto, Ontario, Canada, at 200 Davenport Road. Our telephone number is 416-223-8500. Our website address is www.susglobalenergy.com. Our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K are all available, free of charge, on our website as soon as practicable after we file the reports with the Securities and Exchange Commission (the "SEC"). SusGlobal Energy Corp., a company in the start-up stages and Commandcredit Corp. ("Commandcredit"), an inactive Canadian public company, amalgamated to continue business under the name of SusGlobal Energy Corp.

SusGlobal is a renewables company focused on acquiring, developing and monetizing a global portfolio of proprietary technologies in the waste to energy and regenerative products application.

When the terms "the Company," "we," "us" or "our" are used in this document, those terms refer to SusGlobal Energy Corp., and its wholly-owned subsidiaries, SusGlobal Energy Canada Corp., SusGlobal Energy Canada I Ltd., SusGlobal Energy Belleville Ltd., SusGlobal Energy Hamilton Ltd., and 1684567 Ontario Inc.

On December 11, 2018, the Company began trading on the OTCQB venture market exchange, under the ticker symbol SNRG.

As the global amount of organic waste continues to grow, a solution for sustainable global management of these wastes is paramount. SusGlobal through its proprietary technology and processes, is equipped and confident to deliver this objective. Management believes renewable energy is the energy of the future. Sources of this type of energy are more evenly distributed over the earth's surface than finite energy sources, making it an attractive alternative to petroleum-based energy. Biomass, one of the renewable resources, is derived from organic material such as forestry, food, plant and animal residuals. SusGlobal can therefore help turn what many consider waste into precious energy and regenerative products. The portfolio will be comprised of three distinct types of technologies: (a) Process Source Separated Organics ("SSO") in anaerobic digesters to divert from landfills and recover biogas. This biogas can be converted to gaseous fuel for industrial processes, electricity to the grid or cleaned for compressed renewable gas. (b) Maximizing the capacity of existing infrastructure (anaerobic digesters) to allow processing of SSO to increase biogas yield and (c) process SSO, digestate and leachate to produce an organic compost or a pathogen free organic liquid fertilizer. The convertibility of organic material into valuable end products such as biogas, liquid biofuels, organic fertilizers and compost shows the utility of renewables. These products can be converted into electricity, fuels and marketed to agricultural operations that are looking for an increase in crop yields, soil amendment and environmentally-sound practices. This practice also diverts these materials from landfills and reduces Greenhouse Gas Emissions ("GHG") that result from landfilling organic wastes. The Company can provide peace of mind that the full lifecycle of organic material is achieved, global benefits are realized and stewardship for total sustainability is upheld. It is management's objective to grow SusGlobal into a significant sustainable waste to energy and regenerative products provider, as Leaders in The Circular Economy®.

We believe the products and services offered can benefit both the public and private markets. The following includes some of our work managing organic waste streams: Anaerobic Digestion, Dry Digestion, Wastewater Treatment, In-Vessel Composting, SSO Treatment, Biosolids Heat Treatment, Leachate Management, Composting and Liquid Fertilizers.

The Company can provide a full range of services for handling organic residuals in a period where innovation and sustainability are paramount. From start to finish we offer in-depth knowledge, a wealth of experience and cutting-edge technology for handling organic waste.

The primary focus of the services SusGlobal provides includes integrating our technologies with capital investment to optimizing the processing of SSO. Our processes not only divert significant organic waste from landfills, but also result in methane avoidance, with significant GHG reductions from waste disposal. The processes produce regenerative products through the conversion of organic wastes into biogas, organic fertilizer, both dry compost and liquid.

Currently, the primary customers are municipalities in both rural and urban centers in Ontario, Canada. Where necessary, to be in compliance with provincial and local environmental laws and regulations, SusGlobal submits applications to the respective authorities for approval prior to any necessary engineering being carried out and has existing Environmental Compliance Approvals (ECAs) at its facilities.

We are a "smaller reporting company," as defined under SEC Regulation S-K. As such, we also are exempt from the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and also are subject to less extensive disclosure requirements regarding executive compensation in our periodic reports and proxy statements. We will continue to be deemed a smaller reporting company until (i) our public float exceeds $250 million on the last day of our second fiscal quarter in our prior fiscal year (if our annual revenues exceeded $100 million in such prior fiscal year); or (ii) our public float exceeds $700 million on the last day of our second fiscal quarter in our prior fiscal year (if our annual revenues were less than $100 million in such prior fiscal year). ******

RECENT BUSINESS DEVELOPMENTS

On November 9, 2023, the Company received a Ministry of the Environment, Conservation and Parks (the "MECP") Provincial Officer’s Order issued to the Belleville, Ontario, Canada site for certain compliance items. The Company is requesting a review of the Order by the MECP Director.

On November 3, 2023, the funds held in escrow, in the amount of $924,500 (C$1,250,000), were released to Alterna and Alterna released all security it held back to the Company.

On November 2, 2023, the Company completed the purchase of additional land, consisting of a 2.03-acre site in Hamilton, Ontario, Canada for $2,292,760 (C$3,100,000). Prior to completing the purchase, the Company paid deposits of $229,276 (C$310,000) to the vendor, included under prepaid expenses and deposits on the interim condensed consolidated balance sheets. The balance of the purchase price was satisfied with a $1,479,200 (C$2,000,000) vendor take-back mortgage bearing interest at 7% annually, maturing in two years and the balance in cash financed by a second mortgage on the additional land bearing interest at 13% annually, maturing in one year and is secured by a third mortgage on the property in Belleville, Ontario, Canada.

On October 12, 2023, the Company announced that additional sales of Carbon Credits and Verified Emission Reductions and Renewals ("VERRs") generated from its Belleville Composting Offset Project in Ontario (the "Project"). The Company has generated an additional 12,500 VERRs and sold a further 9,000 carbon credits as part of the Anew™ Project. The Project has generated approximately 137,000 VERRS (generated from 2017 through 2022).

The Project and report are listed on the GHG CleanProjects® Registry, https://www.csaregistries.ca/GHG_VR_Listing/CleanProjectDetail?ProjectId=909, a business unit of the Standards Division of the Canadian Standards Association ("CSA") for developed and marketed greenhouse gas ("GHG") offset credits from the Company's 49-acre Organic & Non-Hazardous Waste Processing & Composting Facility in Belleville, Ontario. The Project was developed by Anew Climate, LLC formerly known as Blue Source Canada ULC ("Anew").

The Project has enabled an increase in the diversion of organic waste from landfills, thereby avoiding methane generation. Methane is a highly potent greenhouse gas which is 28 times more effective at trapping heat energy in our atmosphere than carbon dioxide. As organic waste decomposes in landfills, the methane builds up and must be released to prevent dangerous working conditions. By diverting waste that contributes to this problem, the Project benefits the community as well as the climate.

This initial sale of carbon credits expands the Company's ability to deliver on its mission to reduce organic wastes from wood, leaf and yard material, treated municipal sewage waste (biosolids), residential curbside green bin material or SSO and paper sludge otherwise destined for landfills.

On October 3, 2023, the Company announced that it signed commercial terms for a renewable natural gas Purchase and Sale Agreement Ten Year Offtake (the “Offtake Agreement”) valued at approximately US$138 Million. The Offtake Agreement will not take effect until after the signing of a Transaction Confirmation.

Highlights

The Company will provide up to 674,184 GJs/year while meeting pipeline quality standards and have direct pipeline access to the largest integrated gas storage facility in North America.
The forecasted commercial operation date for the RNG facilities is scheduled for the Company's Belleville Renewable Natural Gas ("RNG") Facility in September 2025, and the Hamilton RNG Facility for September 2026.
The initial transaction term from the date of initial commercial operation of the RNG facilities will be 10 years. The buyer will pay a purchase price of over US$20 (C$27) per Metric Million British Thermal Unit ("MMbtu"), equivalent to approximately one Gigajoule ("GL") of RNG at the delivery point.

The Offtake Agreement is an industry standard summary of the commercial terms for the RNG purchase and sale which allows the parties to maintain confidentiality while finalizing the definitive Renewable Natural Gas Purchase and Sale Agreement ("RNGPA") in the form of a GasEDI Base Contract with special provisions and transaction confirmations. The RNGPA incorporates mutually agreeable and additional, more comprehensive terms, representations, warranties, and covenants customary to meet the local natural gas operating system standards, purchase offtake arrangements and required reporting.

Under the terms of the Offtake Agreement, the Company has committed to produce up to 674,184 GJs annually of RNG to be generated through the anaerobic digestion of organic matter at the Company's licensed facilities in Belleville and Hamilton, Ontario.

On August 1, 2023, the Company announced it has received a RNG Carbon Intensity ("CI") Report. This report uses the GHGenius model to calculate the CI of the produced RNG from Source Separated Organic ("SSO") Feedstock, analyzing the energy balance and emissions of contaminants associated with the production and use of traditional and alternative transportation fuels. Versions of the model are specified in renewable fuel regulations in the provinces of Ontario, Alberta and British Columbia. The GHGenius model is capable of estimating life cycle emissions of the primary greenhouse gases ("GHG") and the criteria pollutants from combustion and process sources. GHGenius can predict emissions for past, present and future years through 2050, using historical data or correlations for changes in energy and process parameters with time that are stored in the model.

The Report and Carbon Intensity Score allows the Company to proceed and enter into a long term and lucrative offtake agreement, leading to project and equity financing. The Company has the infrastructure, assets, licenses and capabilities to produce and distribute RNG which offers lower carbon options adjacent to our existing fertilizer production facilities, building a revolutionary circular economy model for sustainable change, utilizing transformative technology solutions to regenerate organic waste to energy and fertilizers at its strategically located facilities in western and eastern Ontario near the hub of the largest integrated gas storage facility in North America. A long-term offtake agreement can ensure that the Company will continue to lead the organic waste diversion and regenerative products program, helping to reduce the world's GHG emissions creating strong alignment with our ESG and uplisting goals, maximizing shareholder value.

The Company has received a -24.7 on the Report's Carbon Intensity Score. As this system uses a reversed scaled approach, in which lower a number denotes a better value in the RNG and sustainability, the Company is expected to continue to receive these opportunities in the future attracting seasoned offtake partners.

When organic waste decomposes, it naturally releases biogas, a GHG containing carbon dioxide and methane, into the atmosphere. Before this biogas can escape as GHGs it is captured and purified to create RNG. RNG is low carbon, meaning, that using RNG can reduce the amount of GHG emissions released into the atmosphere compared to conventional fossil fuels or natural gas. When added to the North American gas system, it can help reduce greenhouse gas emissions.

The RNG produced is then injected into the natural gas transmission and distribution system, providing for building space heat/hot water, industrial process heat, electricity generation and transportation, thereby reducing GHG emissions and generating additional carbon credits for the Company.

On July 17, 2023, the Company received notice from The Scotts Miracle-Gro Company that it was withdrawing its opposition to the Company's trademark SUSGRO (the "Mark") application in the U.S. and Canada. On July 27, 2023, the Mark was registered under Registration Number TMA1,192,300 with Innovation, Science and Economic Development Canada, Canadian Intellectual Property Office**.** This registration will be in effect for a period of ten years, expiring on July 27, 2033.

On July 14, 2023, the Company paid the final deposit of $159,306 (C$210,000) for an agreement of purchase and sale for 2.03 acres of land in Hamilton, Ontario, Canada, adjacent to the Company's current property. This deposit is in addition to the first deposit of $75,530 (C$100,000) paid on June 15, 2023.

New and Renewed Consulting Contracts

The Company entered into an Executive Chairman Consulting Agreement (the "CEO's Consulting Agreement"), by and among the Company, Travellers International Inc. ("Travellers"), and the CEO, who is also a director, the Executive Chairman and President of the Company, effective January 1, 2023 (the "Effective Date"). The CEO's Consulting Agreement replaced the consulting agreement which expired on December 31, 2022.

Pursuant to the terms of the CEO's Consulting Agreement, for his services as the CEO, the compensation is at a rate of $29,584 (C$40,000) per month for twelve (12) months, beginning on the Effective Date, and at a rate of $36,980 (C$50,000) per month for twelve (12) months, beginning January 1, 2024. In addition, the Company agreed to grant the CEO 3,000,000 restricted shares of the Company's common stock, par value of $0.0001 per share (the "Common Stock") on the Effective Date. This common stock was issued on January 3, 2023. The Company has also agreed to reimburse the CEO for certain out-of-pocket expenses incurred by the CEO.

The CEO's Consulting Agreement is for a term of twenty-four (24) months. Upon a Constructive Discharge (as defined in the CEO's Consulting Agreement) and subject to certain notification requirements and the Company's opportunity to cure the Constructive Discharge, the CEO will be entitled to a compensation of twelve (12) months' fees, as well as any bonus compensation owing.

The Company also entered into an Executive Consulting Agreement (the "CFO Consulting Agreement"), by and between the Company and the CFO of the Company, effective January 1, 2023. Pursuant to the terms of the CFO Consulting Agreement, the CFO is entitled to fees of $9,245 (C$12,500) per month for twelve (12). In addition, the Company has also agreed to grant the CFO 100,000 restricted shares of the Company's common stock, par value of $0.0001 per share on the Effective Date. The Company has also agreed to reimburse the CFO for certain out-of-pocket expenses incurred by the CFO. This common stock was issued on January 3, 2023. The CFO's Consulting Agreement replaced the consulting agreement which expired on December 31, 2022.

The CFO's Consulting Agreement is for a term of twelve (12) months. Upon a Constructive Discharge (as defined in the CFO's Consulting Agreement) and subject to certain notification requirements and the Company's opportunity to cure the Constructive Discharge, the CFO will be entitled to a compensation of two (2) months' fees, as well as any bonus compensation owing.

Financings

(a) Securities Purchase Agreements

As at September 30, 2023, the Company had and currently has 5 security purchase agreements outstanding with 4 investors. The outstanding principal balance, including accrued interest of $662,415, totaled $6,872,575 with a fair value of $9,756,700. The convertible promissory notes are currently in default and management has continued discussions with the investors.

Please refer to the interim condensed consolidated financial statements, convertible promissory notes, note 11 and fair value measurement, note 12 for details on the convertible promissory notes.

(b) Pace Savings & Credit Union Limited ("PACE")

On March 28, 2023, the Company and PACE finalized a full and final mutual release of all obligations owing to PACE, including accrued interest, in exchange for an amount of $924,500 (C$1,250,000). The funds were held in escrow by the Company's Canadian legal counsel until released to PACE (now Alterna) on November 3, 2023. Immediately prior to this full and final mutual release, the amounts owing to PACE, included in the interim condensed consolidated balance sheets, include $3,452,655 (C$4,668,274) disclosed under long-term debt and accrued interest of $391,785 (C$529,725) disclosed under accrued liabilities in the interim condensed consolidated balance sheets. The Company raised the funds by securing a 2^nd^ mortgage on March 1, 2023 in the amount of $1,109,400 (C$1,500,000) prior to disbursements of $184,900 (C$250,000), on its Belleville, Ontario Canada property.

The remaining PACE long-term debt was initially payable as noted below:

(i) The credit facility bore interest at the PACE base rate of 7.00% plus 1.25% per annum, was payable in monthly blended installments of principal and interest of $6,482 (C$8,764) and matured on September 2, 2022. The first and only advance on the credit facility on February 2, 2017, in the amount of $1,183,360 (C$1,600,000), is secured by a business loan general security agreement, a $1,183,360 (C$1,600,000) personal guarantee from the CEO and a charge against the Haute leased premises. Also pledged as security are the shares of the wholly-owned subsidiaries, and a limited recourse guarantee against each of these parties. On April 3, 2020, the pledged shares were delivered by PACE and are currently held as security for the personal guarantee from the CEO and charge against the Haute leased premises. The credit facility is fully open for prepayment at any time without notice or bonus.

(ii) The credit facility advanced on June 15, 2017, in the amount of $443,760 (C$600,000), bore interest at the PACE base of 7.00% plus 1.25% per annum, was payable in monthly blended installments of principal and interest of $3,625 (C$4,901), and matured on September 2, 2022. The credit facility is secured by a variable rate business loan agreement on the same terms, conditions and security as noted above.

(iii) The corporate term loan advanced on September 13, 2017, in the amount of $2,754,379 (C$3,724,147), bore interest at PACE base rate of 7.00% plus 1.25% per annum, was payable in monthly blended installments of principal and interest of $21,974 (C$29,711), and matured September 13, 2022. The corporate term loan is secured by a business loan general security agreement representing a floating charge over the assets and undertakings of the Company, a first priority charge under a registered debenture and a lien registered under the Personal Property Security Act in the amount of $2,959,123 (C$4,000,978) against the assets including inventory, accounts receivable and equipment. The corporate term loan also included an assignment of existing contracts included in the asset purchase agreement.

For the three and nine-month periods ended September 30, 2023, $nil (C$nil) and $103,371 (C$139,089) (2022-$100,983; C$131,211 and $255,412; C$327,535) respectively, in interest was incurred on the PACE long-term debt. As at September 30, 2023 $391,785 (C$529,725) (December 31, 2022-$288,407; C$390,636) in accrued interest is included in accrued liabilities in the interim condensed consolidated balance sheets

(c) Other Financings

(i) The Company obtained a 1st mortgage provided by private lenders to finance the acquisition of the shares of 1684567 and to provide funds for additional financing needs, including additional lands, received in four tranches totaling $3,845,920 (C$5,200,000) (December 31, 2022-$3,839,160; C$5,200,000). The fourth tranche was received on August 13, 2021 in the amount of $1,405,240 (C$1,900,000) and a portion of this fourth tranche, $1,371,169 (C$1,853,933), was used to fund a portion of the purchase of the Hamilton Property, described under long-lived assets, net (note 7), to the interim condensed consolidated financial statements. The 1st mortgage is repayable interest only on a monthly basis at an annual rate of the higher of the Royal Bank of Canada's prime rate plus 6.05% per annum (currently 13.25%) and 10% per annum with a maturity date of December 1, 2023. The Company continues to be charged at the rate of 10% per annum. The 1st mortgage payable is secured by the shares held of 1684567, a 1st mortgage on the premises located at 704 Phillipston Road, Roslin, Ontario, Canada and a general assignment of rents.

(ii) On August 17, 2021, the Company obtained a vendor take-back 1st mortgage in the amount of $1,479,200 (C$2,000,000), on the purchase of the Hamilton Property, described under long-lived assets, net (note 7) to the interim condensed consolidated financial statements. The 1st mortgage bears interest at an annual rate of 2% per annum, repayable monthly interest only with a maturity date of August 17, 2023, secured by the assets on the Hamilton Property. Management has been in discussions with the mortgagee to extend the maturity date.

(iii) On March 1, 2023, the Company obtained a 2nd mortgage in the amount of $1,109,400 (C$1,500,000) bearing interest at the annual rate of 12%, repayable monthly, interest only with a maturity date of March 1, 2024, secured as noted under (d) i) above. The Company incurred financing fees of $44,376 (C$60,0000). In addition, as at September 30, 2023 there is $18,480 (C$24,986) of unamortized financing fees included in long-term debt in the interim condensed consolidated balance sheets

(iv) As a result of the COVID-19 virus, the Government of Canada launched the Canada Emergency Business Account (the "CEBA"), a program to ensure that small businesses have access to the capital they need to see them through the current challenges and better position them to quickly return to providing services to their communities and creating employment. The program is administered by Canadian chartered banks and credit unions.

The Company has received a total of $73,960 (C$100,000) under this program, from its Canadian chartered bank.

The CEBA term loan agreements were amended by extending the interest free repayment date by one year to December 31, 2023. (subsequently extended to January 18, 2024). If paid by December 31, 2023, 33.33% ($25,176; C$33,333), previously 25%, of the loans would be forgiven. Repayment terms on the extended period are unchanged.

The CEBA term loan agreements contain a number of positive and negative covenants, for which the Company is not in full compliance.

(v) On April 8, 2021, the Company took delivery of a truck and hauling trailer for a total purchase price of $161,483 (C$218,338) plus applicable harmonized sales taxes. The purchase was financed by a bank term loan of $147,920 (C$200,000), over a forty-eight-month term, bearing interest at 4.95% per annum with monthly blended instalments of principal and interest payments of $3,625 (C$4,901) due April 7, 2025.

For the three and nine-month periods ended September 30, 2023, $823 (C$1,103) and $2,794(C$3,760) (2022- $1,312; C$1,716 and $4,342; C$5,568) respectively, in interest was incurred.

(vi) During the three and nine-month periods ended September 30, 2023, the CEO converted $233,558 (C$316,400) and $233,558 (C$316,400) respectively, of outstanding accounts payable at prices ranging from $0.1678 to $0.261 per share, priced at the closing trading prices immediately prior to the conversion dates for 1,254,792 common shares of the Company. During the three and nine-month periods ended September 30, 2023, the CEO converted $nil (C$nil) and $278,845 (C$372,483) respectively, of outstanding loans at prices ranging from $nil to $nil and $0.2076 to $0.325 per share respectively, priced at the closing trading prices immediately prior to the conversion dates for nil and 1,167,371 common shares of the Company respectively.

(d) Financings Related to Obligations Under Capital Lease

There were no new capital leases entered into by the Company during the three and nine-month periods ended September 30, 2023.The original terms of the remaining obligation under capital lease outstanding at September 30, 2023 are noted below.

(i) The lease agreement for certain equipment for the Company's organic waste processing and composting facility at a cost of $288,185 (C$389,650), is payable in monthly blended installments of principal and interest of $5,068 (C$6,852), plus applicable harmonized sales taxes for a period of fifty-nine months plus an initial deposit of $14,385 (C$19,450) plus applicable harmonized sales taxes and an option to purchase the equipment for a final payment of a nominal amount of $74 (C$100) plus applicable harmonized sales taxes on February 27, 2025. The leasing agreement bears interest at the rate of 3.59% annually, compounded monthly, due February 27, 2025.

For the three and nine-month periods ended September 30, 2023, $785 (C$1,053) and $2,768 (C$3,725) (2022-$1,361; C$1,770 and $3,599; C$4,616) respectively, in interest was incurred.

Operations

The Company owns Environmental Compliance Approvals (the "ECAs") issued by the MECP from the Province of Ontario, in place to accept up to 70,000 metric tonnes ("MT") of waste annually from the provinces of Ontario, Quebec and from New York state, and to operate a waste transfer station with the capacity to process up to an additional 50,000 MT of waste annually. Once built, the location of the waste transfer station will be alongside the Organic and Non-Hazardous Waste Processing and Composting Facility which is currently operating in Belleville, Ontario, Canada.

Waste Transfer Station- Access to the waste transfer station is critical to haulers who collect waste in areas not in close proximity to disposal facilities where such disposal continues to be permitted. Tipping fees charged to third parties at waste transfer stations are usually based on the type and volume or weight of the waste deposited at the waste transfer station, the distance to the disposal site, market rates for disposal costs and other general market factors.

Organic Composting Facility- As noted above, the Company's organic waste processing and composting facility, located in Belleville, Ontario Canada, has ECAs in place to accept up to 70,000 MT of waste annually and is currently in operation. Certain assets of the organic waste processing and composting facility, including the ECAs for the waste transfer station (not yet built), were acquired by the Company on September 15, 2017, from the Receiver for Astoria, under the APA. The Company charges tipping fees for the waste accepted at the organic waste composting facility based on arrangements in place with the customers and the type of waste accepted. Typical waste accepted includes, SSO, leaf and yard, food, liquid, paper sludge and biosolids. During the nine-month period ended September 30, 2023, tipping fees ranged from $51 (C$69) to $118 (C$159) per MT.

The Company owns a 40,535 square foot facility on 5.29 acres in Hamilton, Ontario (the "Hamilton Facility"), which includes an Environmental Compliance Approval to process 65,884 MT per annum of organic waste, 24 hours per day 7 days a week. The facility will be designed to produce, distribute and warehouse the Company's SusGro™ organic liquid fertilizer and other products that are to be provided under private label and to be sold through big box retailers, consumer lawn and garden suppliers, and for end use to the wine, cannabis and agriculture industries. With the addition of a further 11,000 square feet of office space and R&D labs, the Hamilton facility will also house the continued development of SusGlobal's proprietary formulations and branded liquid and dry organic fertilizers.

LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 2023, the Company had a bank balance of $6,431 (December 31, 2022-$42,900) and current debt obligations and other current liabilities in the amount of $26,203,416 (December 31, 2022-$22,339,175). As at September 30, 2023, the Company had a working capital deficit of $24,425,747 (December 31, 2022-$21,580,552). The Company does not currently have sufficient funds to satisfy the current debt obligations.

The Company's total assets as at September 30, 2023 were $10,599,934 (December 31, 2022-$9,865,775) and total current liabilities were $26,203,416 (December 31, 2022-$22,339,175). Significant losses from operations have been incurred since inception and there is an accumulated deficit of $35,520,256 as at September 30, 2023 (December 31, 2022 -$30,345,197). Continuation as a going concern is dependent upon generating significant new revenue and generating external capital and securing debt to satisfy its creditors' demands and to achieve profitable operations while maintaining current fixed expense levels.

To pay current liabilities and to fund any future operations, the Company requires significant new funds, which the Company may not be able to obtain. In addition to the funds required to liquidate the $26,203,416 in current debt obligations and other current liabilities, the Company estimates that approximately an additional $31,000,000 must be raised to fund capital requirements and general corporate expenses for the next 12 months.

In the normal course of business, we are exposed to market risks, including changes in interest rates, certain commodity prices and Canadian currency rates. The Company does not use derivatives to manage these risks.

During the three and nine-month periods ended September 30, 2023, the October 29, 2021 investor converted part of his unsecured convertible promissory note having a fair value of $nil and $374,000 respectively, for nil and 1,650,709 respectively, common shares of the Company.

As at September 30, 2023, the current and long-term portions of our debt obligations totaled $19,894,856 (December 31, 2022-$16,827,617).

In addition, as at September 30, 2023, the Company had an outstanding letter of credit provided by PACE, in the amount of $204,744 (C$276,831), in favor of the MECP. The letter of credit is a requirement of the MECP and is in connection with the financial assurance provided by the Company, for it to be in compliance with the MECPs environmental objectives. The MECP regularly evaluates the Company's organic waste processing and composting facility to ensure compliance is adhered to and the letter of credit is subject to change by the MECP. The MECP released the expired letter of credit provided by PACE subsequent to September 30, 2023. The Company is in the process of obtaining a letter of credit for the new financial assurance with the MECP in the amount of $471,596 (C$637,637).

CONSOLIDATED RESULTS OF OPERATIONS - FOR THE THREE-MONTH PERIOD ENDED SEPTEMBER 30, 2023 COMPARED TO THE THREE-MONTH PERIOD ENDED SEPTEMBER 30, 2022

		For the three-month periods ended
		September 30, 2023			September 30, 2022
Revenue	$	186,901		$	297,202
Cost of Sales
Opening inventory		64,578			19,555
Depreciation		87,528			112,731
Direct wages and benefits		36,349			52,860
Equipment rental, delivery, fuel and repairs and maintenance		14,723			365,975
Utilities		32,721			(7,760	)
Outside contractors		-			535
		236,009			543,896
Less: closing inventory		(42,889	)		(48,154	)
Total cost of sales		193,120			495,742
Gross loss		(6,219	)		(198,540	)
Operating expenses
Management compensation-stock-based compensation		57,600			60,113
Management compensation-fees		117,401			115,175
Marketing		923			(250	)
Professional fees		103,930			190,653
Interest expense		140,161			208,537
Office and administration		56,567			67,377
Rent and occupancy		58,385			54,586
Insurance		10,974			12,867
Filing fees		8,562			9,699
Amortization of financing costs		26,901			27,752
Directors' compensation		18,631			14,366
Stock-based compensation		254,724			659,050
Repairs and maintenance		1,015			2,386
Foreign exchange loss		214,406			378,510
Total operating expenses		1,070,180			1,800,821
Net Loss Before Other Expenses		(1,076,399	)		(1,999,361	)
Other Expenses		(116,710	)		(1,697,619	)
Net Loss	$	(1,193,109	)	$	(3,696,980	)

During the three-month period ended September 30, 2023, the Company generated $186,901 of revenue from its organic waste processing and composting facility compared to $297,202 in the three-month period ended September 30, 2022. The decrease in revenue is primarily due to lower carbon credit revenue of approximately $83,000 and lower waste revenue of approximately $27,000. In the operation of the organic waste processing and composting facility, the Company processes organic and other waste received and produces the end product, compost. The cost of producing the compost totaled $193,120 for the three-month period ended September 30, 2023 compared to $495,742 for the three-month period ended September 30, 2022. These costs include equipment rental, delivery, fuel, repairs and maintenance, direct wages and benefits, depreciation, utilities and outside contractors. Included are the costs for the estimate of the clean-up of certain waste as ordered by the MECP, which decreased significantly from the prior period. In addition, with ceasing the garbage collection operation, the Company no longer requires the use of outside contractors.

Operating expenses reduced by $730,641 from $1,800,821 in the three-month period ended September 30, 2022 to $1,070,180 in the three-month period ended September 30, 2023, explained further below.

Management compensation related to stock-based compensation reduced by $2,513, in the three-month period ended September 30, 2023 compared to the three-month period ended September 30, 2022, as a result of the new common stock issued to the officers as stipulated in their executive consulting contracts, effective January 1, 2023. The total stock-based compensation valued at $446,400 (2022-$240,450), based on the trading price of the shares on the effective date will be expensed over the terms of the executive consulting contracts. And the management compensation relating to fees was relatively flat, with little change between the three-month period ended September 30, 2023 compared to the three-month period ended September 30, 2022.

Marketing increased by a nominal amount of $1,173, from $(250) in the three-month period ended September 30, 2022 to $923 for the three-month period ended September 30, 2023, primarily the result of a new and scaled back marketing program in 2023 compared to that in 2022.

Professional fees reduced by $86,723, from $190,653 in the three-month period ended September 30, 2022 to $103,930 in the three-month period ended September 30, 2023. The primary reasons for the decrease includes lower estimated and actual costs for various audit, review and tax services totaling approximately $66,500, lower consulting fees resulting from not re-engaging certain consultants totaling approximately $68,000 offset by higher legal fees of approximately $48,000.

Interest expense reduced by $68,376 from $208,537 in the three-month period September 30, 2022 to $140,161 in the three-month period ended September 30, 2023. The decrease is partially due to the absence of interest on the PACE debt, after the Company obtained a full and final mutual release on March 28, 2023, offset by additional interest on the new mortgage effective March 1, 2023, which bears interest at the rate of 12% per annum.

Office and administration expenses reduced by $10,810, from $67,377 in the three-month period ended September 30, 2022 to $56,567 in the three-month period ended September 30, 2023, primarily due to a reduction in various expenditures including lab testing and the state of Delaware franchise tax.

Rent and occupancy increased by $3,799, from $54,586 in the three-month period ended September 30, 2022 to $58,385 in the three-month period ended September 30, 2023 as a result of the effect of the translation rate for a weakening Canadian dollar quarter to quarter.

Insurance expense remained relatively flat with a nominal decrease of $1,893, from $12,867 in the three-month period ended September 30, 2022 to $10,974 in the three-month period ended September 30, 2023.

Filing fees expense remained relatively flat with a nominal decrease of $1,137, from $9,699 in the three-month period ended September 30, 2022 to $8,562 in the three-month period ended September 30, 2023.

The amortization of financing costs remained relatively flat with a nominal decrease of $851, from $27,752 in the three-month period ended September 30, 2022 to $26,901 in the three-month period ended September 30, 2023.

Directors' compensation increased by $4,265 from $14,366 in the three-month period ended September 30, 2022 to $18,631 in the three-month period ended September 30, due to the appointment of a new independent director during the during the three-month period ended March 31, 2023.

Stock-based compensation decreased by $404,326, from $659,050 in the three-month period ended September 30, 2022 to $254,724 in the three-month period ended September 30, 2023, due to the absence of multiple consultants providing services compared to the prior period.

Repairs and maintenance decreased nominally by $1,371, from $2,386 in the three-month period ended September 30, 2022 to $1,015 in the three-month period ended September 30, 2023.

The foreign exchange income decreased by $164,104, from $378,510 in the three-month period ended September 30, 2022 to $214,406 in the three-month period ended September 30, 2023, due primarily to the translation of significant United States dollar denominated transactions and balances during the period including the convertible promissory notes, compared to the prior period, during a period in which the Canadian dollar weakened but not as significantly as in the prior period.

During the current three-month period ended September 30, 2023, the Company recorded a loss on the revaluation of the convertible promissory notes in the amount of $116,710 compared to loss of $1,447,619 in the prior period ended September 30, 2022. In addition, in the prior period the Company recorded an amount of $250,000 for the accrued settlement payment for the release of services of a party for an underwriting offering dated March 23, 2022 and amended May 23, 2022. In total, the other expenses decreased by $1,580,909.

The interim condensed consolidated financial statements do not include any adjustments to reflect the future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result if the Company was unable to continue as a going concern.

CONSOLIDATED RESULTS OF OPERATIONS - FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2023 COMPARED TO THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2022

		For the nine-month periods ended
		September 30, 2023			September 30, 2022
Revenue	$	505,075		$	551,815
Cost of Sales
Opening inventory		58,695			20,582
Depreciation		301,467			344,196
Direct wages and benefits		111,984			158,356
Equipment rental, delivery, fuel and repairs and maintenance		55,569			477,128
Utilities		89,578			35,410
Outside contractors		-			26,018
		617,293			1,061,690
Less: closing inventory		(42,889	)		(48,154	)
Total cost of sales		574,404			1,013,536
Gross loss		(69,329	)		(461,721	)
Operating expenses
Management compensation-stock-based compensation		172,800			180,339
Management compensation-fees		351,162			350,910
Marketing		122,098			1,003,959
Professional fees		286,723			812,738
Interest expense		499,222			589,488
Office and administration		176,120			259,193
Rent and occupancy		161,127			171,177
Insurance		33,167			76,304
Filing fees		31,852			71,242
Amortization of financing costs		72,296			94,916
Directors' compensation		53,211			43,864
Stock-based compensation		785,149			955,837
Repairs and maintenance		22,636			(8,773	)
Foreign exchange (income) loss		(33,037	)		518,690
Total operating expenses		2,734,526			5,119,884
Net Loss Before Other Expenses		(2,803,855	)		(5,581,605	)
Other Expenses		(2,371,204	)		(3,202,270	)
Net Loss	$	(5,175,059	)	$	(8,788,875	)

During the nine-month period ended September 30, 2023, the Company generated $505,075 of revenue from its organic waste processing and composting facility compared to $551,815 in the nine-month period ended September 30, 2022, a decrease of $46,740. The decrease in revenue is due to the reduction in carbon credit revenue of approximately $72,000, the reduction in garbage collection revenue of approximately $27,000 after ceasing this operation in the prior period, offset by an increase in waste processing revenue in the form of tipping fees from new business from existing customers of approximately $52,000.

In the operation of the organic waste processing and composting facility, the Company processes organic and other waste received and produces the end product, compost. The cost of producing the compost totaled $574,404 for the nine-month period ended September 30, 2023 compared to $1,013,536 for the nine-month period ended September 30, 2022. These costs include equipment rental, delivery, fuel, repairs and maintenance, direct wages and benefits, depreciation, utilities and outside contractors. The reduction in costs of $439,132 is attributable to reduced depreciation as several of the Company's mobile equipment were fully depreciated in the current period, a reduction in direct labour and benefits from reduced overtime and one less staff member, offset by increased utilities costs as projected credits offered by the hydro utility expired. In addition, the equipment rental, delivery, fuel, repairs and maintenance include an estimate for the clean-up of certain waste as ordered by the MECP. The cost of this estimate has not increased significantly since the prior period's estimate.

Operating expenses reduced by $2,385,358 from $5,119,884 in the nine-month period ended September 30, 2022 to $2,734,526 in the nine-month period ended September 30, 2023, explained further below.

Management compensation related to stock-based compensation reduced by $7,539, in the nine-month period ended September 30, 2023 compared to the nine-month period ended September 30, 2022, as a result of the new common stock issued to the officers as stipulated in their executive consulting contracts, effective January 1, 2023. The total stock-based compensation valued at $446,400 (2022-$240,450), based on the trading price of the shares on the effective date is being expensed over the terms of the executive consulting contracts. And the management compensation relating to fees increased slightly by $252, from $350,910 in the nine-month period ended September 30, 2022 to $351,162 in the nine-month period ended September 30, 2023.

Marketing expenses decreased by $881,861, from $1,003,959 in the nine-month period ended September 30, 2022 to $122,098 for the nine-month period ended September 30, 2023, primarily the result of a new and scaled back marketing campaign in 2023 compared to that in 2022.

Professional fees reduced by $526,015, from $812,738 in the nine-month period ended September 30, 2022 to $286,723 in the nine-month period ended September 30, 2023. The primary reasons for the decrease included the absence of professional fees incurred on the issuance of convertible promissory notes in the current period whereas $75,000 in such professional fees was incurred in the prior period. In addition, the Company did not re-engage certain consultants who provided services in the prior period, a saving of approximately $296,000 and savings for various audit, review, tax and legal services, including the absence of fees in connection with its S-1/A registration statement, a total savings of approximately $155,000.

Interest expense decreased by $90,266 from $589,488 in the nine-month period ended September 30, 2022 to $499,222 in the nine-month period ended September 30, 2023. The decrease is partially due to the absence of interest on the PACE debt, after the Company obtained a full and final mutual release on March 28, 2023, offset by additional interest on the new mortgage effective March 1, 2023, which bears interest at the rate of 12% per annum.

Office and administration expenses reduced by $83,072, from $259,193 in the nine-month period ended September 30, 2022 to $176,121 in the nine-month period ended September 30, 2023. This is primarily due to the absence of certain expenditures including a claim from a municipality of approximately $29,000, website costs of approximately $16,000, a reduction in other expenditures including lab testing and security and the effect of the translation rate for a weakening Canadian dollar quarter to quarter.

Rent and occupancy reduced by $10,050, from $171,177 in the nine-month period ended September 30, 2022 to $161,127 in the nine-month period ended September 30, 2023, primarily due to the absence of additional rent expense for roof repairs in the prior period and the effect of the translation rate for a weakening Canadian dollar from 2022 to 2023.

Insurance reduced by $43,137, from $76,304 in the nine-month period ended September 30, 2022 to $33,167 in the nine-month period ended September 30, 2023, primarily due to the absence of insurance on the Company's new facility under construction in Hamilton, Ontario, Canada, whose construction had ceased temporarily and the Company self-insuring on certain other insurance.

Filing fees decreased by $39,390, from $71,242 in the nine-month period ended September 30, 2022 to $31,852 in the nine-month period ended September 30, 2023, primarily due to the absence of costs associated with the special meeting of the shareholders held last period on March 24, 2022 and the absence of administrative costs incurred in the filing of the S-1 (and S-1/A) registration statement and reduced investor relations activities.

The amortization of financing costs increased by $22,620, from $94,916 in the nine-month period ended September 30, 2022 to $72,296 in the nine-month period ended September 30, 2023, due to certain financing costs in connection with the mortgages payable having been fully amortized by the end of Q3-2022.

Directors' compensation increased nominally from $43,864 in the nine-month period ended September 30, 2022 to $53,211 in the nine-month period ended September 30, 2023, due to the appointment of a new independent director during the during the three-month period ended March 31, 2023.

Stock-based compensation decreased by $170,688, from $955,837 in the nine-month period ended September 30, 2022 to $785,149 in the nine-month period ended September 30, 2023, as a result of the absence new consulting services provided during the current period.

Repairs and maintenance increased by $31,409, from income of $8,773 in the nine-month period ended September 30, 2022 to an expense of $22,636 in the nine-month period ended September 30, 2023, due to the absence of a credit adjustment on a prior period expenditure.

The foreign exchange income decreased by $551,727, from a loss of $518,690 in the nine-month period ended September 30, 2022 to income of $33,037 in the nine-month period ended September 30, 2023, due primarily to the translation of significant United States dollar denominated transactions and balances during the period including the convertible promissory notes, compared to the prior period, during a period in which the Canadian dollar strengthened.

During the current nine-month period ended September 30, 2023, the Company recorded a loss on the revaluation of convertible promissory notes of in the amount of $2,296,845 compared to a loss of 2,957,270 (including net of the gain on extinguishment of convertible promissory notes) in the prior period ended September 30, 2022. The increase is primarily due to an increase in principal for certain convertible promissory notes due to an amendment and defaults along with the impact of default interest accruing at 24% per annum. In addition, during the nine-month period ended September 30, 2023, the Company recorded a loss of $74,359 on the conversions of a convertible promissory note. Also included in the prior period, the Company recorded an amount of $250,000 for the accrued settlement payment for the release of services of a party for an underwriting offering dated March 23, 2022 and amended May 23, 2022. Overall, the other expenses decreased by $831,066.

As at September 30, 2023, the Company had a working capital deficit of $24,425,747 (December 31, 2022-$21,580,552), incurred a net loss of $5,175,059 (September 30, 2022-$8,788,875) for the nine months ended September 30, 2023 and had an accumulated deficit of $35,520,256 (December 31, 2022-$30,345,197) and expects to incur further losses in the development of its business.

These factors cast substantial doubt as to the Company's ability to continue as a going concern, which is dependent upon its ability to obtain the necessary financing to further the development of its business, satisfy its obligations to its creditors and upon achieving profitable operations. There is no assurance of funding being available or available on acceptable terms. Realization values may be substantially different from carrying values as shown.

CRITICAL ACCOUNTING ESTIMATES

Use of estimates

The preparation of the Company's consolidated financial statements in conformity with US 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 financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are based on management's best knowledge of current events and actions the Company may undertake in the future. The Company regularly evaluates estimates and assumptions. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgements about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. Areas involving significant estimates and assumptions include: the allowance for doubtful accounts, inventory valuation, useful lives of long-lived and intangible assets, impairment of long-lived assets and intangible assets, valuation of asset acquisition, accruals, fair value of convertible promissory notes, deferred income tax assets and related valuation allowance, environmental remediation costs, stock-based compensation and going concern. Actual results could differ from these estimates. These estimates are reviewed periodically and as adjustments become necessary, they are reported in earnings in the period in which they become available.

Stock-based compensation

The Company records compensation costs related to stock-based awards in accordance with ASC 718, Compensation-Stock Compensation, whereby the Company measures stock-based compensation cost at the grant date based on the estimated fair value of the award. Compensation cost is recognized on a straight-line basis over the requisite service period of the award. Where necessary, the Company utilizes the Black-Scholes option-pricing model to estimate the fair value of stock options granted, which requires the input of highly subjective assumptions including: the expected option life, the risk-free rate, the dividend yield, the volatility of the Company's stock price and an assumption for employee forfeitures. The risk-free rate is based on the U.S. Treasury bill rate at the date of the grant with maturity dates approximately equal to the expected term of the option. The Company has not historically issued any dividends and does not expect to in the near future. Changes in any of these subjective input assumptions can materially affect the fair value estimates and the resulting stock- based compensation recognized. The Company has not issued any stock options and has no stock options outstanding at September 30, 2023 and as of the date of the filing of this document.

Indefinite Asset Impairments

The Company evaluates the intangible assets for impairment annually in the fourth quarter or when triggering events are identified and whether events and circumstances continue to support the indefinite useful life using Level 3 inputs.

Long-Lived Asset Impairments

In accordance with ASC 360, "Property, Plant and Equipment", long-lived assets to be held and used are analyzed for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable.

The Company evaluates at each balance sheet date whether events or circumstances have occurred that indicate possible impairment. If there are indications of impairment, the Company uses future undiscounted cash flows of the related asset or asset grouping over the remaining life in measuring whether the carrying amounts are recoverable. In the event that such cash flows are not expected to be sufficient to recover the recorded asset values, the assets are written down to their estimated fair value.

Convertible Promissory Notes

The Company has elected the fair value option to account for its convertible promissory notes issued after December 31, 2020. In accordance with ASC 825, the convertible promissory notes are marked-to-market at each reporting date with changes in fair value recorded as a component of other income (expense), in the interim condensed consolidated statements of operations and comprehensive loss. The Company has elected to include interest expense in the changes in fair value. Transaction costs are incurred as expensed. The Company did not elect the fair value option for the convertible promissory notes issued in 2019. These notes are measured at amortized cost.

RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS

In March 2022, the FASB issued ASU No. 2022-02, Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures ("ASU 2022-02"), which requires enhanced disclosure of certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty while eliminating certain current recognition and measurement accounting guidance. This ASU also requires the disclosure of current-period gross write-offs by year of origination for financing receivables and net investments in leases. ASU No. 2022-02 became effective for the Company's annual and interim periods beginning on January 1, 2023. As a result, the adoption of ASU 2022-02 did not have any impact on the opening balances in the interim condensed consolidated financial statements.

EQUITY

As at September 30, 2023, the Company had 124,783,286 common shares issued and outstanding. As at November 14, 2023, the Company had 124,783,286 common shares issued and outstanding.

STOCK OPTIONS, WARRANTS AND RESTRICTED STOCK UNITS

The Company has no stock options, warrants or restricted stock units outstanding as at September 30, 2023 and as of the date of the filing of this document.

RELATED PARTY TRANSACTIONS

OFF-BALANCE SHEET ARRANGEMENTS

We do not have any off-balance sheet arrangements that 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 that is material to investors.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

As a smaller reporting company, as that term is defined in Item 10(f)(1) of Regulation S-K, we are not required to provide information required by this Item.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our CEO and CFO, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15 under the Securities Exchange Act of 1934, as amended (the "Exchange Act") as of the end of the period covered by this Quarterly Report on Form 10-Q.

Our disclosure controls and procedures are designed to provide reasonable, not absolute, assurance that the objectives of our disclosure control system are met. Due to inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within a company have been detected. Based on our evaluation, our CEO and CFO have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were not effective. The matters involving internal controls over financial reporting that may be considered material weaknesses included the small size of the Company and the resulting lack of a segregation of duties.

Notwithstanding these material weaknesses, management has concluded that the unaudited interim condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q present fairly, in all material respects, the financial position, results of operations and cash flows in conformity with generally accepted accounting principles.

Changes in Internal Control over Financial Reporting

During the nine-month period ended September, 2023, there were no changes made by management to its internal controls over financial reporting.

PART II: OTHER INFORMATION

Item 1. Legal Proceedings.

Item 1A. Risk Factors.

As a smaller reporting company, we are not required to provide the information required by this item.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

During the nine-month period ended September 30, 2023, the Company issued:

(i) 500,000 common shares for proceeds previously received.

(ii) 3,000,000 common shares issued to the CEO as stipulated in his 2023 executive consulting agreement and 100,000 common shares issued to the CFO as stipulated in his 2023 executive consulting agreement.

(iii) 1,650,709 common shares issued on the conversion of a convertible promissory note to equity.

(iv) 1,790,000 common shares were issued for professional services.

(v) 225,000 common shares issued for other services.

(vi) 20,000 common shares issued to an employee.

(vii) 100,000 common shares were issued to a new director.

(viii) 1,536,582 common shares issued on a private placement.

(ix) 2,422,163 of common shares issued on the conversion of related party debt and accounts payable.

The securities above were offered and sold pursuant to an exemption from the registration requirements under Section 4(a)(2) of the Securities Act since, among other things, the transactions did not involve a public offering.

Item 3. Defaults upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not Applicable.

Item 5. Other Information.

Not Applicable.

Item 6. Exhibits.

The following exhibits are filed as part of this quarterly report on Form 10-Q:

Exhibit No.	Description
10.1*	Purchase of land by and between Snave Holdings Ltd., (the vendor) and SusGlobal Energy Canada Corp., (the purchaser) on November 2, 2023.
10.2*	Mortgage commitment by and between Snave Holdings Ltd, (the lender) and SusGlobal Energy Canada Corp., (the borrower) dated November 2, 2023.
10.3*	Mortgage commitment by and between R. Williamson Consultants Limited, P.I.C.K.S. Inc., and 2654666 Ontario Inc., (the lenders) and 1684567 Ontario Inc., (the borrower) and SusGlobal Energy Canada Corp., (the guarantor) on November 2, 2023 for the land purchase.
31.1*	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1+	Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 (Section 906 of Sarbanes-Oxley Act of 2002).
101.INS*	Inline XBRL Instance Document-the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL 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 (formatted as Inline XBRL and contained in Exhibit 101)
*	Filed herewith
---	---
**	Management contract or compensatory plan or arrangement
+	In accordance with SEC Release 33-8238, Exhibit 32.1 is being furnished and not filed.

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.

	SUSGLOBAL ENERGY CORP.
November 14, 2023	By:	/s/ Marc Hazout
		Marc Hazout
		Executive Chairman, President and Chief Executive Officer
November 14, 2023	By:	/s/ Ike Makrimichalos
		Ike Makrimichalos
		Chief Financial Officer (Principal Financial and Accounting Officer)

SusGlobal Energy Corp.: Exhibit 10.1 - Filed by newsfilecorp.com

LRO # 62 Transfer	Receipted as WE1708026 on 2023 11 02 at 15:55
The applicant(s) hereby applies to the Land Registrar.	yyyy mm dd Page 1 of 3
Properties
---
PIN	17566 - 0052 LT Interest/Estate Fee Simple
---	---
Description	PT LT 28 CON 1 SALTFLEET BEING PTS 9,10 & 28 PL 62R15125; CITY OF HAMILTON
Address	490 NASH ROAD NORTH
	HAMILTON
Consideration
---

Consideration $3,100,000.00

Transferor(s)

The transferor(s) hereby transfers the land to the transferee(s).

Name	SNAVE HOLDINGS LTD.
Address for Service	206 Lakeside Avenue
	Burlington, ON L7N 1T5

A person or persons with authority to bind the corporation has/have consented to the registration of this document.

This document is not authorized under Power of Attorney by this party.

Transferee(s)	Capacity	Share
Name	SUSGLOBAL ENERGY CANADA CORP.
Address for Service	200 Davenport Road
	Toronto, Ontario M5R 1J2
Statements
---

STATEMENT OF THE TRANSFEROR (S): The transferor(s) verifies that to the best of the transferor's knowledge and belief, this transfer does not contravene the Planning Act.

STATEMENT OF THE SOLICITOR FOR THE TRANSFEROR (S): I have explained the effect of the Planning Act to the transferor(s) and I have made inquiries of the transferor(s) to determine that this transfer does not contravene that Act and based on the information supplied by the transferor(s), to the best of my knowledge and belief, this transfer does not contravene that Act. I am an Ontario solicitor in good standing.

STATEMENT OF THE SOLICITOR FOR THE TRANSFEREE (S): I have investigated the title to this land and to abutting land where relevant and I am satisfied that the title records reveal no contravention as set out in the Planning Act, and to the best of my knowledge and belief this transfer does not contravene the Planning Act. I act independently of the solicitor for the transferor(s) and I am an Ontario solicitor in good standing.

Signed By
Paul Douglas Michael Mazza		69 Markland Street	acting for	Signed	2023 11 02
---	---	---	---	---	---
		Hamilton	Transferor(s)
		L8P 2J8
Tel	905-777-1136
Fax	905-777-1140
I am the solicitor for the transferor(s) and I am not one and the same as the solicitor for the transferee(s).
I have the authority to sign and register the document on behalf of the Transferor(s).
Anthony Tyler D'Angelo		Bay Adelaide Centre 333 Bay	acting for	Signed	2023 11 02
		Street Suite 3400	Transferee(s)
		Toronto
		M5H 2S7
Tel	416-979-2211
Fax	416-979-1234
I am the solicitor for the transferee(s) and I am not one and the same as the solicitor for the transferor(s).
I have the authority to sign and register the document on behalf of the Transferee(s).
Submitted By
---
GOODMANS LLP		Bay Adelaide Centre 333 Bay Street	2023 11 02
---	---	---	---
		Suite 3400
		Toronto
		M5H 2S7
Tel	416-979-2211
Fax	416-979-1234
LRO # 62 Transfer	Receipted as WE1708026 on 2023 11 02 at 15:55
---	---
The applicant(s) hereby applies to the Land Registrar.	yyyy mm dd Page 2 of 3
Fees/Taxes/Payment
---
Statutory Registration Fee	$69.00
---	---
Provincial Land Transfer Tax	$58,475.00
Total Paid	$58,544.00
File Number
---
Transferor Client File Number :	517737
---	---
Transferee Client File Number :	23.1069 [ATD/SM]
LAND TRANSFER TAX STATEMENTS
---
In the matter of the conveyance of:	17566 - 0052	PT LT 28 CON 1 SALTFLEET BEING PTS 9,10 & 28 PL 62R15125; CITY OF HAMILTON
---	---	---
BY:	SNAVE HOLDINGS LTD.
---	---
TO:	SUSGLOBAL ENERGY CANADA CORP.

MARC HAZOUT

I am

☐ (a) A person in trust for whom the land conveyed in the above-described conveyance is being conveyed;

☐ (b) A trustee named in the above-described conveyance to whom the land is being conveyed;

☐ (c) A transferee named in the above-described conveyance;

☐ (d) The authorized agent or solicitor acting in this transaction for _____ described in paragraph(s) (_) above.

☑ (e) The President, Vice-President, Manager, Secretary, Director, or Treasurer authorized to act for SUSGLOBAL ENERGY CANADA CORP. described in paragraph(s) (c) above.

☐ (f) A transferee described in paragraph (_) and am making these statements on my own behalf and on behalf of _____ who is my spouse described in paragraph (_) and as such, I have personal knowledge of the facts herein deposed to.

I have read and considered the definition of "single family residence" set out in subsection 1(1) of the Act. The land being conveyed herein:

does not contain a single family residence or contains more than two single family residences.

3. The total consideration for this transaction is allocated as follows:

(a) Monies paid or to be paid in cash	$1,100,000.00
(b) Mortgages (i) assumed (show principal and interest to be credited against purchase price)	$0.00
(ii) Given Back to Vendor	$2,000,000.00
(c) Property transferred in exchange (detail below)	$0.00
d) Fair market value of the land(s)	$0.00
(e) Liens, legacies, annuities and maintenance charges to which transfer is subject $0.00	$0.00
(f) Other valuable consideration subject to land transfer tax (detail below) $0.00	$0.00
(g) Value of land, building, fixtures and goodwill subject to land transfer tax (total of (a) to (f))	$3,100,000.00
(h) VALUE OF ALL CHATTELS -items of tangible personal property	$0.00
(i) Other considerations for transaction not included in (g) or (h) above	$0.00
(j) Total consideration	$3,100,000.00

Other remarks and explanations, if necessary.
The information prescribed for purposes of section 5.0.1 of the Land Transfer Tax Act is not required to be provided for this conveyance.
The transferee(s) has read and considered the definitions of "designated land", "foreign corporation", "foreign entity", "foreign national", "Greater Golden Horseshoe Region", "specified region", "spouse" and "taxable trustee" as set out in subsection 1(1) of the Land Transfer Tax Act and O. Reg 182/17. The transferee(s) declare that this conveyance is not subject to additional tax as set out in subsection 2(2.1) of the Act because:
(b) This is not a conveyance of "designated land".
The transferee(s) declare that they will keep at their place of residence in Ontario (or at their principal place of business in Ontario) such documents, records and accounts in such form and containing such information as will enable an accurate determination of the taxes payable under the Land Transfer Tax Act for a period of at least seven years.
The transferee(s) agree that they or the designated custodian will provide such documents, records and accounts in such form and containing such information as will enable an accurate determination of the taxes payable under the Land Transfer Tax Act, to the Ministry of Finance upon request.

PROPERTY Information Record
A. Nature of Instrument:	Transfer
	LRO 62 Registration No.		WE1708026			Date:	2023/11/02
B. Property(s):	PIN 17566 - 0052	Address 490 NASH ROAD				Assessment	-
		NORTH				Roll No
		HAMILTON
C. Address for Service:	200 Davenport Road
	Toronto, Ontario M5R 1J2
D. (i) Last Conveyance(s):	PIN	Registration No.		WE697915
(ii) Legal Description for Property Conveyed: Same as in last conveyance?				Yes ☑	No ☐	Not known ☐
E. Tax Statements Prepared By:	Anthony Tyler D'Angelo
	Bay Adelaide Centre 333 Bay Street Suite 3400<br>Toronto M5H 2S7

SusGlobal Energy Corp.: Exhibit 10.2 - Filed by newsfilecorp.com

LRO # 62 Charge/Mortgage	Receipted as WE1708027 on 2023 11 02	at 15:55
The applicant(s) hereby applies to the Land Registrar.	yyyy mm dd	Page 1 of 2
Properties
---
PIN	17566 - 0052 LT	Interest/Estate	Fee Simple
---	---	---	---
Description	PT LT 28 CON 1 SALTFLEET BEING PTS 9,10 & 28 PL 62R15125; CITY OF HAMILTON
Address	490 NASH ROAD NORTH
	HAMILTON
Chargor(s)
---

The chargor(s) hereby charges the land to the chargee(s). The chargor(s) acknowledges the receipt of the charge and the standard charge terms, if any.

Name	SUSGLOBAL ENERGY CANADA CORP.
Address for Service	200 Davenport Road
	Toronto, Ontario M5R 1J2
A person or persons with authority to bind the corporation has/have consented to the registration of this document.
This document is not authorized under Power of Attorney by this party.
Chargee(s)	Capacity	Share
---	---	---
Name	SNAVE HOLDINGS LTD.
---	---	---
Address for Service	206 Lakeside Avenue
	Burlington, ON L7N 1T5
Provisions
Principal	2,000,000.00	CDN
Calculation Period	Monthly, not in advance
Balance Due Date	2025/11/02
Interest Rate	7% per annum
Payments	11,666.67
Interest Adjustment Date	2023 11 02
Payment Date	Monthly
First Payment Date	2023 12 02
Last Payment Date	2025 11 02
Standard Charge Terms	200033
Insurance Amount	Full insurable value
Guarantor

All values are in US Dollars.

Additional Provisions

The Chargor shall have the option to prepay this charge, in whole or in part, without bonus or penalty.

This charge shall be repayable, interest only, on a monthly basis until the balance due date.

Section 14 of the standard charge terms are hereby amended by adding the following sentence immediately after the first sentence "Notwithstanding the foregoing, nothing herein shall prevent the Chargor from registering subsequent charges on title to the land.".

Signed By
Pamela Margaret Lord		69 Markland Street	acting for	Signed 2023 11 02
---	---	---	---	---
		Hamilton	Chargor(s)
		L8P 2J8
Tel	905-777-1136
Fax	905-777-1140
I have the authority to sign and register the document on behalf of the Chargor(s).
Submitted By
---
PAUL D. MAZZA	69 Markland Street	2023 11 02
---	---	---
	Hamilton	Hamilton
	L8P 2J8
Tel 905-777-1136
Fax 905-777-1140
LRO # 62 Charge/Mortgage	Receipted as WE1708027 on 2023 11 02	at 15:55
---	---	---
The applicant(s) hereby applies to the Land Registrar.	yyyy mm dd	Page 2 of 2
Fees/Taxes/Payment
---
Statutory Registration Fee	$69.00
---	---
Total Paid	$69.00
File Number
---
Chargor Client File Number :	23.1069 [ATD/SM]
---	---

SusGlobal Energy Corp.: Exhibit 10.3 - Filed by newsfilecorp.com

LRO # 21 Charge/Mortgage	Receipted as HT339120 on 2023 11 02	at 15:56
The applicant(s) hereby applies to the Land Registrar.	yyyy mm dd	Page 1 of 6
Properties
---
PIN	40532 - 0031	LT	Interest/Estate	Fee Simple
---	---	---	---	---
Description	PT LT 20 CON 8 THURLOW PT 1 21R18453; BELLEVILLE ; COUNTY OF HASTINGS
Address	PHILLIPSTON ROAD
	BELLEVILLE
PIN	40532 - 0032	LT	Interest/Estate	Fee Simple
Description	PT LT 20 CON 8 THURLOW PT 1 21R19513; BELLEVILLE; COUNTY OF HASTINGS
Address	704 PHILLIPSTON ROAD
	ROSLIN
PIN	40532 - 0033	LT	Interest/Estate	Fee Simple
Description	PT LT 20 CON 8 THURLOW PT 2 21R19513; S/T QR266045; BELLEVILLE ; COUNTY
	OF HASTINGS
Address	PHILLIPSTON ROAD
	BELLEVILLE
PIN	40532 - 0041	LT	Interest/Estate	Fee Simple
Description	PT LT 20 CON 8 THURLOW PT 25, 27 AND 29 21R6801; BELLEVILLE ; COUNTY OF
	HASTINGS
Address	PHILLIPSTON ROAD
	BELLEVILLE
Chargor(s)
---

The chargor(s) hereby charges the land to the chargee(s). The chargor(s) acknowledges the receipt of the charge and the standard charge terms, if any.

Name	1684567 ONTARIO INC.
Address for Service	200 Davenport Road, Toronto, Ontario,
	M5R 1J2
A person or persons with authority to bind the corporation has/have consented to the registration of this document.
This document is not authorized under Power of Attorney by this party.
Chargee(s)	Capacity	Share
---	---	---
Name	R. WILLIAMSON CONSULTANTS LIMITED	350000/105000
		0
Address for Service	86 Carrick Trail, Gravenhurst, Ontario, P1P 0A6
Name	P.I.C.K.S. INC.	350000/105000
		0
Address for Service	1-85 West Wilmot Street, Richmond Hill, Ontario L4B 1K7
Name	2654666 ONTARIO INC.	350000/105000
		0
Address for Service	98-83 Mondeo Drive, Scarborough, Ontario M1P 5B6
Statements
---

Schedule: See Schedules

Provisions
Principal	1,050,000.00	CDN
---	---	---
Calculation Period	monthly
Balance Due Date	2024/11/02
Interest Rate	13%
Payments	11,375.00
Interest Adjustment Date	2023 11 02
Payment Date	2nd day, monthly
First Payment Date	2023 12 02
Last Payment Date	2024 11 02
Standard Charge Terms	200033
Insurance Amount	Full insurable value
Guarantor	Susglobal Energy Canada Corp.

All values are in US Dollars.

LRO # 21 Charge/Mortgage	Receipted as HT339120 on 2023 11 02	at 15:56
The applicant(s) hereby applies to the Land Registrar.	yyyy mm dd	Page 2 of 6
Signed By
---
Timothy Alex Petrou		200-9100 Jane Street, Building A	acting for	Signed	2023 10 30
---	---	---	---	---	---
		Vaughan	Chargor(s)
		L4K 0A4
Tel	905-695-5300
Fax	905-695-5301
I have the authority to sign and register the document on behalf of the Chargor(s).
Submitted By
---
CIRILLO PETROU LAW PROFESSIONAL		200-9100 Jane Street, Building A	2023 11 02
---	---	---	---
CORPORATION		Vaughan
		L4K 0A4
Tel	905-695-5300
Fax	905-695-5301
Fees/Taxes/Payment
---
Statutory Registration Fee	$69.00
---	---
Total Paid	$69.00
File Number
---
Chargee Client File Number :	10362-23
---	---

ADDITIONAL PROVISIONS

1. POST-DATED CHEQUES

PROVIDED that the Chargors do hereby covenant and agree to provide to the each of the Chargees, upon the execution of this mortgage and thereafter during the term of this mortgage, a series of post-dated cheques each in the amount of the monthly installment due hereunder for the duration of the term of this mortgage as set out herein.

2. SALES CLAUSE

PROVIDED that if the Chargor, at any time, shall sell, transfer, convey or otherwise dispose of the herein described lands and building(s) without the prior consent of the Chargee at the Chargee's option, the within mortgage shall immediately become due and payable in full including interest to the maturity date of the mortgage herein set forth.

3. BY-LAW CONFORMITY AND OCCUPANCY CLAUSE

PROVIDED that if at any time, the said property and/or the building(s) located on the said property, do not comply with the municipal by-laws, or the by-laws of any other level of government and/or the building becomes unoccupied, then in either of these events the balance of the principal monies hereby secured, together with interest as herein provided shall forthwith become due and payable upon demand. PROVIDED further that nothing herein shall be construed so as to permit the Chargor the privilege of prepaying the said mortgage in whole or in part.

4. ADMINISTRATIVE FEES

a. In the event it is necessary for the Chargee to have a letter sent by the Chargee's solicitor to the Chargor because of default or non-payment, then the Chargor shall be charged the sum of $250.00 plus applicable taxes for such letter and such sum shall be a charge on the said lands and shall bear interest at the rate herein stated.

b. In the event of any of the Chargor's post-dated or pre-authorized cheques are not honoured when presented for payment to the Bank or Trust Company on which they are drawn, the Chargor shall pay to each of the Chargees for each such returned cheque the sum of $250.00 plus applicable taxes as a liquidated amount to cover each of the Chargees' administration costs and not as a penalty and such sum shall be a charge upon the said lands and shall bear interest at the rate hereinbefore stated.

c. In the event that the Chargor fails to provide proof of insurance on an annual basis, the Chargee is entitled to charge the Chargor the sum of $250.00 plus applicable taxes as an administrative fee.

d. Failure to provide post-dated cheques will result in default and the Chargee will be entitled to charge the Chargor the sum of $250.00 plus applicable taxes and in addition will be entitled to commence default proceedings at the expense of the Chargor with all costs including but not limited to legal fees on a solicitor and client basis to be added to the principal balance then outstanding as of the date the bill is submitted to the Chargee.

5. ADMINISTRATION FEES

a. In the event that the Chargee is required by the Chargor or is otherwise required to provide a mortgage statement, there shall be an administrative fee of $250.00 plus applicable taxes for each such statement.

b. The Chargee shall have the exclusive right to prepare and execute the Discharge of the Charge/Mortgage of Land. The Chargor shall pay an additional $350.00 plus applicable taxes to the chargee as an administrative fee for the preparation of the said Discharge of Charge.

6. PREPAYMENT

Provided that the Chargors are not in default herein, the Chargors have the right to prepay the whole amount of the principal herein then outstanding, upon a payment of TWO (2) months' interest on the principal being prepaid as of the date of prepayment, as a bonus and not as a penalty.

7. INTEREST CALCULATION

For the purpose of calculation of interest, any payment of principal received after 1:00 p.m. shall be deemed to have been received on the next following banking day.

8. RENT AND MANAGEMENT

PROVIDED also, and it is hereby further agreed by and between the Chargor and the Chargee, that should default be made by the Chargor in the observance or performance of any of the covenants, provisos, agreements or conditions contained in this Mortgage, the Chargee reserves the right to enter into the said lands and premises and to receive the rents and profits and to be entitled to receive in addition to all other fees, charges and disbursements to which the Chargee is entitled, a management fee so as to reimburse the Chargee for reasonable time and trouble in the management of the said lands and premises it being understood and agreed that in the circumstances a management fee equal to $100.00 plus applicable taxes per day is a just and equitable fee, having regard to all of the circumstances.

9. MATRIMONIAL HOME

PROVIDED that in the event that any part of the properties herein becomes the matrimonial home of either of the Chargors herein, then the monies secured hereby shall become due and payable unless the spouse of such party consents to this mortgage and releases to the Chargee his or her interest herein.

10. EXPROPRIATION

PROVIDED that if the said lands shall be expropriated by any government, authority, body or corporation clothed with the powers of expropriation, the amount of the principal hereby secured remaining unpaid shall forthwith become due and payable together with interest at the said rate to the date of payment and together with a bonus equal to the sum of three months interest at the said rate calculated on the remaining principal balance from the said date of payment to the date the said principal sum or balance thereof remaining unpaid would otherwise under the provision of this mortgage become due and payable.

11. DEFAULT PROCEEDINGS

The Chargor agrees that should the Chargee commence legal action due to default under the Charge/Mortgage of Land that the Chargee shall be entitled to charge an additional fee equivalent to three months interest.

12. DEFAULT OF OTHER CHARGES

In the event that the Chargor is in default in any other Charge/Mortgage of Land registered against the property herein charged, the Chargor shall be deemed to be in default under this Mortgage and the Chargee shall have all of the remedies contained herein for a default under this Charge/Mortgage of Land.

13. SEVERABILITY

Should any clause and/or clauses contained in the Charge/Mortgage of Land be found to be illegal, void as against public policy or unenforceable in law, the offending clause or clauses as the case may be, is and or are to be severed from this Charge/Mortgage of Land and deemed never to be part of this Charge/Mortgage of Land.

14. LEGAL PROCEEDINGS

The Chargor covenants and agrees that if collection or other legal proceedings are taken in connection with or to realize upon this security, an administrative fee of $3,500.00 plus applicable taxes shall be added to the Charge debt on each occasion such proceedings are so taken and said fee or fees, shall form a Charge upon the charged property in favour of the Chargee.

GUARANTORS CLAUSE

The Guarantor, in consideration of such advance or advances as the mortgagee may make under this mortgage and in consideration of the sum of One ($1.00) Dollar now paid to him by the mortgagee, the receipt whereof is hereby acknowledged:

Hereby covenants and agrees with the mortgagee, as principal debtor and not as surety, to well and truly pay or cause to be paid to the mortgagee the principal money, interest, taxes and all other monies which the mortgagor has by this mortgage covenanted to pay to the mortgagee or which are secured by this mortgage or intended so to be secured, the said payments to be made on the days and times and in the manner provided for in this mortgage;
Hereby further covenants and agrees to keep, observe and perform the covenants, terms, provisos, stipulations and conditions of this mortgage which are to be kept, observed and performed by the mortgagor and at all times to indemnify, protect and save harmless the

mortgagee from all loss, costs and damage in respect of the advances of the mortgage money and every matter and thing contained in this mortgage;

Further agrees that the mortgagee may from time to time without notice to him extend the time for payment of all monies secured by this mortgage, amend the terms and times of payment and the rate of interest with respect to the said monies refrain from enforcing payment of the said monies, release any portion or portions of the mortgaged premises and waive or vary any of the covenants and conditions in this mortgage to be kept observed and performed by the mortgagor and grant any indulgence to the mortgagor in respect of any default by the mortgagor which may arise under this mortgage, and that notwithstanding any such act by the mortgagee, the guarantor shall be bound by the provisions of this mortgage until all of the monies secured under this said mortgage shall have been fully paid and satisfied;
Further acknowledges that the mortgagee may at any time grant or refuse any additional credit to the mortgagor, accept or release or renounce any collateral or other security, administer or otherwise deal with the land and premises described in this mortgage, take an assignment of the rentals with respect to the said lands and premises and apply any and all monies at any time received from the mortgagor or from any other person or from the proceeds of any securities given in connection with this mortgage in any manner the mortgagee may deem appropriate. The mortgagee may also utilize any and all insurance proceeds in reduction of the principal monies and interest secured, by this mortgage or for the refurbishing of the lands and premises or in any other manner that the mortgagee may in its absolute discretion deem advisable.
Agrees that all of the matters mentioned herein may be performed by the mortgagee without notice to him, the guarantor, without releasing or in any way modifying, altering, varying or in any way affecting the liability of the guarantor hereunder; and
Agrees that all of the covenants and agreements of him the guarantor, contained herein shall be binding upon him and his respective heirs, executors, administrators, and assigns and shall accrue to the benefit of the mortgagee, its successors and assigns and that his liability as guarantor hereunder and the liability of his executors, administrators and assigns shall be joint and several.

Collateral Provisions

The Chargor and Chargee herein agree that this Charge is given as collateral security to a charge of even date, with identical terms and conditions, made by SUSGLOBAL ENERGY CANADA CORP, as Chargor, in favour of R. WILLIAMSON CONSULTANTS LTD., P.I.C.K.S. INC., and 2654666 ONTAIRO INC., as Chargee, and registered against the lands and premises described as 490 Nash Road North, Hamilton (bearing PIN 17566-0052LT) ("Nash Charge").

PROVIDED that all payments made under the said Nash Charge shall constitute payments under the charge herein and all payments made under the charge herein shall constitute payments under the said Nash Charge. Upon payment of the principal and interest secured hereunder in accordance with the terms and conditions hereof, a discharge of charge/mortgage shall be given to the Chargor by the Chargee in respect of the charge herein and the Nash Charge.

SusGlobal Energy Corp.: Exhibit 31.1 - Filed by newsfilecorp.com

Exhibit 31.1

CERTIFICATION

I, Marc Hazout, certify that:

I have reviewed this quarterly report on Form 10-Q of SusGlobal Energy Corp. (the "Company");
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;
Based on my knowledge, the 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 Company as of, and for, the periods presented in this report;
The Company's other certifying officer 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 Company 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 Company, 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 Company'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 Company's internal control over financial reporting that occurred during the Company's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting; and

The Company's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company's auditors and the Company's board of directors:

(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 Company'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 Company's internal control over financial reporting.

Date: November 14, 2023
	By:	/s/ Marc Hazout
		Marc Hazout
		Executive Chairman, President and Chief Executive Officer
		(Principal Executive Officer)

SusGlobal Energy Corp.: Exhibit 31.2 - Filed by newsfilecorp.com

Exhibit 31.2

CERTIFICATION

I, Ike Makrimichalos, certify that:

I have reviewed this quarterly report on Form 10-Q of SusGlobal Energy Corp. (the "Company");
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;
Based on my knowledge, the 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 Company as of, and for, the periods presented in this report;
The Company's other certifying officer 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 Company and have:

The Company's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company's auditors and the Company's board of directors:

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

Date: November 14, 2023
	By:	/s/ Ike Makrimichalos
		Ike Makrimichalos
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

SusGlobal Energy Corp.: Exhibit 32.1 - Filed by newsfilecorp.com

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 accordance with 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, Marc Hazout, the Chief Executive Officer of SusGlobal Energy Corp. (the "Registrant"), and Ike Makrimichalos, the Chief Financial Officer of the Registrant, each hereby certifies that, to the best of his knowledge:

The Registrant's Quarterly Report on Form 10-Q for the period ended September 30, 2023, to which this Certification is attached as Exhibit 32.1 (the "Report"), fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and
The information contained in the Report fairly presents, in all material respects, the financial condition of the Registrant at the end of the period covered by the Report and results of operations of the Registrant for the periods covered by the Report.

Date: November 14, 2023

By:	/s/ Marc Hazout
	Marc Hazout
	Chief Executive Officer
	(Principal Executive Officer)
By:	/s/ Ike Makrimichalos
	Ike Makrimichalos
	Chief Financial Officer
	(Principal Financial and Accounting Officer)

10-Q

UNITED STATESSECURITIES AND EXCHANGE COMMISSION

FORM 10-Q

Commission file number

SUSGLOBAL ENERGY CORP.

416-223-8500

INDEX TO FORM 10-Q

SUSGLOBAL ENERGY CORP.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONTENTS

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

SPECIAL NOTICE ABOUT GOING CONCERN AUDIT OPINION

OVERVIEW

RECENT BUSINESS DEVELOPMENTS

LIQUIDITY AND CAPITAL RESOURCES

CONSOLIDATED RESULTS OF OPERATIONS - FOR THE THREE-MONTH PERIOD ENDED SEPTEMBER 30, 2023 COMPARED TO THE THREE-MONTH PERIOD ENDED SEPTEMBER 30, 2022

CONSOLIDATED RESULTS OF OPERATIONS - FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2023 COMPARED TO THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2022

CRITICAL ACCOUNTING ESTIMATES

RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS

EQUITY

STOCK OPTIONS, WARRANTS AND RESTRICTED STOCK UNITS

RELATED PARTY TRANSACTIONS

OFF-BALANCE SHEET ARRANGEMENTS

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

Item 4. Controls and Procedures.

PART II: OTHER INFORMATION

Item 1. Legal Proceedings.

Item 1A. Risk Factors.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Item 3. Defaults upon Senior Securities.

Item 4. Mine Safety Disclosures.

Item 5. Other Information.

Item 6. Exhibits.

SIGNATURES