UNITED STATES
SECURITIES 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 March 31, 20202021

or

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

For the transition period from ________________to ________________

Commission file number 000-56024

SUSGLOBAL ENERGY CORP.
(Exact name of registrant as specified in its charter)

    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:

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.

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. [X]

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 May 15, 202021, 2021 was 64,859,12789,584,951 shares.

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

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

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

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

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

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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 23, 2017.

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

SusGlobal is a renewable energyrenewables 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") 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 ("CAD"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.

As at March 31, 2020, theThe Company had a working capital deficit of $8,367,335 (December 31, 2019-$8,203,742), incurred a net loss of $755,290 (2019-$306,335 (2020-$1,080,544)755,290) for the three months ended March 31, 20202021 and as at that date had a working capital deficit of $8,436,550 (December 31, 2020-$9,830,314) and an accumulated deficit of $12,204,787$13,775,129 (December 31, 2019-2020-$11,449,497)13,468,794) and expects to incur further losses in the development of its business.

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On SusGlobal Energy Corp.
Notes to the Interim Condensed Consolidated Financial Statements
March 31, 2021 and 2020 Pace Savings & Credit Union Limited ("PACE")
(Expressed in United States Dollars)
(unaudited)

2. Going Concern, (continued)

On February 18, 2021, PACE and the Company reached ana new agreement for the repayment of the outstandingto repay all amounts owing to PACE. One of the credit facilities, in the amount of $34,391 ($48,788 CAD), was repaid in full on April 3, 2020 and the remaining credit facilities and the corporate term loan are to be repaidPACE on or before SeptemberJuly 30, 2020.2021. Management continues discussions with equity investors and a Canadian chartered bank to re-finance its remaining obligations to PACE.

The Company has defaulted on the convertible promissory notes (see note 12). As a result, the amounts owing to PACE (see note 10) and the obligations under capital lease (see note 11), are also in default.

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2. Going Concern, (continued)repay other creditors. 

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 PACE and its other creditors, whose debts are also in default, 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.

Beginning in March 2020 the Governments of Canada and Ontario, as well as foreign governments, instituted emergency measures as a result of the novel strain of coronavirus ("COVID-19)COVID-19"). The virus has had a major impact on Canadian and international securities and currency markets and consumer activity which may impact the Company's financial position, its results of operations and its cash flows significantly. The situation is constantly evolving, however, so the extent to which the COVID-19 outbreak will impact businesses and the economy is highly uncertain and cannot be predicted. Accordingly, the Company cannot predict the extent to which its financial position, results of operations and cash flows will be affected in the future.

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, 20192020 and 20182019 and their accompanying notes.

4. Recent Adopted Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the financial accounting standards board (the "FASB") or other standard setting bodies and adopted by the Company as of the specified effective date or possibly early adopted, where permitted. Unless otherwise discussed, the impact of recently issued standards that are not yet effective are not expected to have a material impact on the Company's financial position, results of operations or cash flows.

On January 1, 2020, the Company adopted ASU No. 2018-13, "Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurements to ASC Topic 820, Fair Value Movement. ASU No. 2018-13 modifies the disclosure requirements for fair value measurements by removing, modifying, and/or adding certain disclosures. The adoption of ASU No. 2018-13, did not have a significant impact on the Company's consolidated financial statements.

On January 1, 2020, the Company adopted ASU No. 2017-04, "Intangibles-Goodwill and Other (Topic 350) - Simplifying the Test for GoodwillImpairment". The new standard simplifies the accounting for goodwill impairments by eliminating step 2 from the goodwill quantitative impairment test. Instead, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss is to be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. The adoption of ASU No. 2017-04, did not have a significant impact on the Company's consolidated financial statements. 

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5. Financial Instruments

The carrying value of cash, and cash equivalents, funds held in trust, trade andreceivables, other receivables, accounts payable, and accrued liabilities and deferred revenue approximated their fair values as of March 31, 20202021 and December 31, 2019,2020, due to their short-term nature. The carrying value of the advance, long-term debt, obligations under capital lease, convertible promissory notes mortgage payable and loansloan payable to related party approximated their fair values due to their market interest rates.

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.

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InSusGlobal Energy Corp.
Notes to the opinion of management, theInterim Condensed Consolidated Financial Statements
March 31, 2021 and 2020
(Expressed in United States Dollars)
(unaudited)

4. Financial Instruments, (continued)

The Company is exposed to significant interest rate risk on the current portion of its long-term debt and a portion of its convertible promissory notes and mortgage payable of $6,830,907 ($9,690,604 CAD) (2019-$6,583,823 (C$8,279,455) (2020-$7,199,706; $9,351,482 CAD)6,327,520; C$8,056,430).

Credit risk is the risk of loss associated with a counterparty's inability to perform its payment obligations. As at March 31, 2020,2021, the Company's credit risk is primarily attributable to cash and cash equivalents and trade receivables.  As at March 31, 2020,2021, 2021, the Company's cash and cash equivalents werewas held with reputable Canadian chartered banks, a credit union and a credit union.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 are inherent in accounts receivable. As at March 31, 2020,2021, the allowance for doubtful accounts was $668 ($948 CAD)$nil (C$nil) (December 31, 2019-2020-$730; $948 CAD)nil; C$nil).

As at March 31, 2020,2021, the Company is exposed to concentration risk as it had sixthree customers (December 31, 2019-six2020-five customers) representing greater than 5% of total trade receivables and sixthree customers (December 31, 2019-six2020-five customers) represented 85%82% (December 31, 2019-90%2020-96%) 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 86% (27%,14%82% (39%, 26% and 17%) (March 31, 2020-86%; 27%, 14%, 12%, 12%, 11% and 10%) (March 31, 2019-90%; 42%, 26%, 11% and 11%) of total 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 in discussions with a Canadian chartered bank to refinance its obligations to PACE and to another creditor.repay other 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, repay PACE for all of its outstanding obligations by July 30, 2021 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 CAD,C$, the Company realizes a portion of its expenses in USD.United States Dollars ("$"). Consequently, certain assets and liabilities are exposed to foreign currency fluctuations. As at March 31, 2020, $379,2282021, $61,849 (December 31, 2019-2020-$258,403)527,847, net monetary liabilities) of the Company's net monetary liabilitiesassets were denominated in USD.$. The Company has not entered into any hedging transactions to reduce the exposure to currency risk.

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SusGlobal Energy Corp.

SusGlobal Energy Corp.

Notes to the Interim Condensed Consolidated Financial Statements

March 31, 2020 and 2019

Notes to the Interim Condensed Consolidated Financial Statements March 31, 2021 and 2020 (Expressed in United States Dollars)

(unaudited)

6. Restricted Cash-Funds Held in TrustUnited States Dollars)
(unaudited)

The funds held in trust are required to satisfy certain outstanding payments to PACE, including the repayment in full of one of the credit facilities in the amount of $34,391 ($48,788 CAD) and to bring the remaining outstanding PACE amounts current. The funds held in trust were provided to PACE on April 3, 2020. Refer also to going concern, note 2 and long-term debt, note 10.

7.5. Intangible Assets

In 2019 and forFor the three-month period ended March 31, 2020,2021, the Company incurred fees to registerin connection with various trademarks in the United States and Canada, in the amount $13,347 ($18,935 CAD)$3,616 (C$4,547) (December 31, 2020-$21,723; C$27,658).

On September 15, 2017, the Company acquired the environmental compliance approvals, having an indefinite life, on the purchase of certain assets from BDO Canada Limited ("BDO") under an asset purchase agreement (the "APA").

Effective May 24, 2019, the Company acquired an additional environmental compliance approval, having an indefinite life,customer lists of $74,370 ($100,000 CAD). The Company also acquired a customer list of $6,645 ($8,617 CAD), net of accumulated amortization of $1,222 ($1,588 CAD),$22,608 (C$30,400) relating to certain municipal contracts (forty-five-month life) oncontracts. These customer lists are being amortized over terms ranging from forty-five to sixty-six months. During the purchasethree -month period ended March 31, 2021, amortization of $979 (C$1,239) (2020-$506; $C680), disclosed under office and administration in the sharesstatements of 1684567.operations and comprehensive loss and under amortization of intangible assets in the statements of cash flows.

86. Long-lived Assets, net

Depreciation is disclosed in cost of sales in the amount of $136,560 (C$172,883) (2020-$113,109; C$151,966) and in office and administration in the amount of $1,191 (C$1,508) (2020-$1,267; C$1,702), in the interim condensed consolidated statements of operations and comprehensive loss.

In addition, under deferred assets in the interim condensed consolidated balance sheets is an accrual in the amount of $214,704 ($C270,000) (December 31, 2020-$215,953; C$274,959), for certain long-lived assets not received by March 31, 2021.

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9.SusGlobal Energy Corp.
Notes to the Interim Condensed Consolidated Financial Statements
March 31, 2021 and 2020
(Expressed in United States Dollars)
(unaudited)

7. Related Party Transactions

For the three-month period ended March 31, 2020,2021, the Company incurred $33,494 ($45,000 CAD)  (2019-$71,091 (C$90,000) (2020-$33,849; $45,000 CAD)33,494; C$45,000), 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"); $nil ($nil CAD)  (2019-$33,849; $45,000 CAD) in management fees expense with Landfill Gas Canada Ltd. ("LFGC"), an Ontario company controlled by a former director and former chief executive officer and $17,863 ($24,000 CAD) (2019-$18,958 (C$24,000) (2020-$13,540; $18,000 CAD)17,863; C$24,000) in management fees expense with the Company's chief financial officer (the "CFO").  As at March 31, 2020,2021, unpaid remuneration and unpaid expenses in the amount of $304,324 ($431,727 CAD)$388,948 (C$489,120) (December 31, 2019-2020-$324,303; $421,227 CAD)396,160; C$504,405) is included in accounts payable and $11,278 ($16,000 CAD) (December 31, 2019-$12,318; $16,000 CAD) is included in accrued liabilities in the interim condensed consolidated balance sheets.This balance includes amounts owing to the former chief executive officer in the amount of $314,502 (C$395,500).

In addition, during the three-month period ended March 31, 2020,2021, the Company incurred interest expense of $441 ($592 CAD) (2019-$nil (C$nil) (2020-$3,802; $5,055 CAD)441; C$592), on outstanding loans from Travellers and $nil ($nil CAD) (2019-$1,669; $2,219 CAD) on outstanding loans from the directors. As at March 31, 2020, interest of $417 ($592 CAD) (December 31, 2019-$nil; $nil CAD) on the loans outstanding to Travellers is included in accrued liabilities in the interim condensed consolidated balance sheets.Travellers. 

For the three-month period ended March 31, 2020,2021, the Company incurred $17,523 ($23,543 CAD) (2019-$21,165 (C$26,795) (2020-$16,998; $22,598 CAD)17,523; C$23,543) in rent expense paid under a rentallease agreement with Haute Inc. ("Haute"), an Ontario company controlled by the CEO.

For those independent directors providing their services throughout 2019,2021, the Company accrued directors' compensation totaling $1,200, based on the subsequent issuance of 20,000 common shares of the Company to each of the five directors that are expected to be issued subsequent to March 31, 2020. And, for services provideddirector in the three-month period ended March 31, 2020, $240 (2019-$2,200). The directors' compensation was priced based on the trading priceamount of the shares at the close of business on March 31, 2020 and will be recorded based on the trading price of the shares, immediately prior to issuance.$4,937 (C$6,250), in total, $9,874 (C$12,500) (2020-($2,164)).  Also included in directors' compensation for the three-month period ended March 31, 2020, are2021, is the audit committee chairman's fees, in the amount of $744 ($1,000 CAD) (2019 $752; $1,000 CAD)$790 (C$1,000) (2020-$744; C$1,000). As at March 31, 2020,2021, outstanding directors' compensation of $797 ($1,130 CAD)$24,991 (C$31,427) (December 31, 2019-2020-$3,480; $4,520 CAD)2,663; C$3,390) is included in accounts payable and $2,145$28,714 (C$36,109) (December 31, 2019-2020-$3,650)37,244; C$47,421) is included in accrued liabilities, in the interim condensed consolidated balance sheets.

Furthermore, for the three-month period ended March 31, 2020,2021, the Company recognized management stock-based compensation expense of $nil (2019-$332,500),$54,259, on the vesting of restrictedcommon stock units ("RSUs") granted in prior yearsissued to the CEO and the former chiefCFO, 1,000,000 and 50,000 common stock, respectively, on commencement of their new executive officer. consulting agreements, effective January 1, 2021. The total stock-based compensation on the issuance of the common stock totaled $217,035. The portion to be expensed for the balance of the year, $162,776 is included in prepaid expenses and deposits in the interim condensed consolidated balance sheets.

8. Advance

On January 10,August 4, 2020, the CEO's remaining RSUs were exchanged into 1,000,000 common sharesCompany received an advance in the amount of $82,992 (C$110,700) from a private lender. The advance was repayable weekly at an amount of $4,881 (C$6,138). The amount was paid in full on January 26, 2021. For the Company. Based on private placement pricing atthree-month period ended March 31, 2021, the timeCompany incurred interest charges of the granting of the RSUs, the common shares issued to the CEO on the exchange of the 1,000,000 RSUs, was determined to be valued at $1,000,000.$697 (C$883) (2020-$nil; C$nil).

9. Long-Term Debt

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10.SusGlobal Energy Corp.
Notes to the Interim Condensed Consolidated Financial Statements
March 31, 2021 and 2020
(Expressed in United States Dollars)
(unaudited)

9. Long-Term Debt,

The presentation above is based on the due on demand terms of the long-term debt. (continued)

On March 31, 2020,February 18, 2021, PACE and the Company reached ana new agreement with respect to the repayment of the outstanding balancesrepay all amounts owing to PACE. One of the credit facilities, in the amount of $34,391 ($48,788 CAD), was repaid in full on April 3, 2020, as noted below and the remaining credit facilities and the corporate term loan are duePACE on or before SeptemberJuly 30, 2020. On April 3, 2020, the Company provided2021. Management continues discussions with equity investors and a Canadian chartered bank to re-finance its remaining obligations to PACE with funds, held in trust on March 31, 2020, to bring the remaining credit facilities and the corporate term loan current. The funds remaining, which were held in trust on March 31, 2020 are to be used to satisfy the principal and interest payments on the noted debt through July 2020.repay other creditors. In addition, the letter of credit the Company has with PACE in favor of the Ministry of the Environment, Conservation and Parks (the "MECP"), was renewed and will be renewed from the current expiry date of June 30, 2020remain in effect to September 30, 2020, at the appropriate time.2021, unless terminated by PACE. On April 3, 2020, the shares previously pledged as security to PACE, were released. However,released and are currently held as security for the personal guarantee from the CEO and charge against the Company's premises lease remain unchanged. This long-term debt is considered to be in default as a result of defaults on the convertible promissory notes (see note 12). As a result, PACE may demand repayment before September 30, 2020.Haute leased premises.

Refer also to going concern, note 2.

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

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10. Long-Term Debt, (continued)

For the three-month period ended March 31, 2020, $76,749 ($103,116 CAD) (2019-2021, $77,265 (C$97,816) (2020-$77,619; $103,189 CAD)76,749; C$103,116) in interest was incurred.incurred on the PACE long-term debt. As at March 31, 2020 $187,066 ($265,379 CAD)2021 $42,686 (C$53,680) (December 31, 2019-2020-$124,926; $162,263 CAD)18,319; C$23,325) in accrued interest is included in accrued liabilities.liabilities in the interim condensed consolidated balance sheets.

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SusGlobal Energy Corp.
Notes to the Interim Condensed Consolidated Financial Statements
March 31, 2021 and 2020
(Expressed in United States Dollars)
(unaudited)

11.9. Long-Term Debt, (continued)

10. Obligations under Capital Lease

As a result of the convertible promissory notes defaults, these leases are also in default (see note 12). The lessor may demand full repayment of these obligations under capital lease. As a result, the obligations under capital lease have been presented as current liabilities. The original terms of the obligations under capital lease are noted below under paragraphs (a), (b) and (c). Refer also to going concern, note 2.

The lease liabilities are secured by the equipment under capital lease as described in note 8.6.

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SusGlobal Energy Corp.
Notes to the Interim Condensed Consolidated Financial Statements
March 31, 2021 and 2020
(Expressed in United States Dollars)
(unaudited)

10. Obligations under Capital Lease, (continued)

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

For the three-month period ended March 31, 2020, $3,089 ($4,150 CAD) (2019-2021, $4,093 (C$5,181) (2020-$3,670; $4,879 CAD3,089; C$4,150) in interest was incurred.

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12.11. Convertible Promissory Notes

(a)		On January 28, 2019, the Company entered into securities purchase agreements (the "January 2019 SPAs") with three investors (the "January 2019 Investors") pursuant to which the Company issued to the January 2019 Investors 12% unsecured convertible promissory notes (the "January 2019 Investor Notes") in the aggregate principal amount of $337,500, with such principal and the interest thereon convertible into shares of the Company's common stock (the "Common Stock") at the January 2019 Investors' option. Although the January 2019 SPAs are dated January 28, 2019 (the "January 2019 Effective Date"), they became effective upon the receipt in cash of the issue price by the January 2019 Investors.
	The amounts of $102,500, $100,000, and $100,000, totaling $302,500, represented the proceeds to the Company, net of transaction-related expenses, for the January 2019 Notes from the January 2019 Investors and were received in cash from February 1 through February 4, 2019.
	The maturity date of each of the January 2019 Investor Notes is January 28, 2020 (the "January 2019 Maturity Dates"). The Notes bear interest at a rate of twelve percent (12%) per annum (the "January 2019 Interest Rate"), which interest shall be paid by the Company to the January 2019 Investors in Common Stock at any time the January 2019 Investors send a notice of conversion to the Company. The January 2019 Investors are entitled to, at their option, convert all or any amount of the principal face amount and any accrued but unpaid interest of the January 2019 Notes into Common Stock, at any time, at a conversion price for each share of Common Stock equal to 65% multiplied by the lowest trading price (as defined in the January 2019 Notes) of the Common Stock as reported on the National Quotations Bureau OTC Marketplace exchange upon which the Company's shares are traded during the twenty (20) consecutive Trading Day period immediately preceding (i) the January 2019 Effective Date; or (ii) the conversion date.
	The Company has reserved a minimum of eight (8) times the number of its authorized and unissued Common Stock (the "January 2019 Reserved Amounts"), free from pre-emptive rights, to provide for the issuance of Common Stock upon the full conversion of the January 2019 Notes. Upon full conversion of the January 2019 Investor Notes, any shares remaining in such reserve shall be cancelled. The Company increases the January 2019 Reserved Amount in accordance with the Company's obligations under the January 2019 Investor Notes. Since the January 2019 Investor Notes were not repaid by their January 28, 2020 maturity date, they are in default and the outstanding balance (principal plus accrued interest) of each of the January 2019 Investor Notes was increased by 50% and increased by a further $15,000 (together the "Default Amounts") along with the interest rate increasing from 12% to 24% annually. The January 2019 Investors continue to have the option to require the Company to immediately issue, in lieu of the Default Amount, the number of shares of common stock of the Company equal to the Default Amount divided by the conversion price then in effect. During the three-month period ended March 31, 2020, the January 2019 Investors converted a total of $17,000 of their January 2019 Investor Notes.

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SusGlobal Energy Corp. Notes to the Interim Condensed Consolidated Financial Statements March 31, 2020 and 2019 (Expressed in United States Dollars) (unaudited)

12. Convertible Promissory Notes, (continued)

(b)	On March 7 and March 8, 2019, the Company entered into two securities purchase agreements (the "March 2019 SPAs") with two investors (the "March 2019 Investors") pursuant to which the Company issued to each March 2019 Investor two 12% unsecured convertible promissory notes comprised of the first notes (the "First Notes") being in the amount of $275,000 each, and the remaining notes in the amount of $275,000 each (the "Back-End Notes," and, together with the First Notes, the "March 2019 Investor Notes") in the aggregate principal amount of $1,100,000, with such principal and the interest thereon convertible into Common Stock at the March 2019 Investors' option. Each First Note contains a $25,000 Original Issue Discount such that the issue price of each First Note was $250,000. The proceeds on the issuance of the First Notes were received from the March 2019 Investors upon the signing of the March 2019 SPAs. The proceeds on the issuance of the Back-End Notes were initially received by the issuance of two offsetting $250,000 secured notes to the Company by the March 2019 Investors (the "Buyer Notes"), provided that prior to conversion of the Back-End Notes, the March 2019 Investors must have paid back the Back-End Notes in cash.
	Although the March 2019 SPAs are dated March 7, 2019 and March 8, 2019 (each, a "March 2019 Effective Date"), they became effective upon the receipt in cash of the issue price by the March 2019 Investors. On March 11, 2019, the Company received cash of $456,000, net of transaction-related expenses, for the First Notes from the March 2019 Investors.
	On April 24, 2019, the Company received one of the Back-End Notes from the March 2019 Investors in the face value amount of $275,000. The proceeds received by the Company was $228,000, net of $25,000 discount and financing costs. The maturity dates of the March 2019 Investor Notes arewere March 7, 2020 and March 8, 2020. The March 2019 Investor Notes bear interest at a rate of twelve percent (12%) per annum (the "March 2019 Interest Rate"), which interest shall be paid by the Company to the March 2019 Investors in Common Stock at any time the March 2019 Investors send a notice of conversion to the Company.

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11. Convertible Promissory Notes, (continued)

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SusGlobal Energy Corp.
Notes to the Interim Condensed Consolidated Financial Statements
March 31, 2021 and 2020
(Expressed in United States Dollars)
(unaudited)

11. Convertible Promissory Notes, (continued)

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The original terms of the convertible promissory notes described in paragraphs (a) through (e) above may be prepaid until 180 days from their applicable effective date with the following penalties: (i) if any of the convertible promissory notes are prepaid within sixty (60) days following their applicable effective date, then the prepayment premium shall be 125% of the face amount plus any accrued interest; (ii) if any of the convertible promissory notes are prepaid during the period beginning on the date which is sixty-one (61) days following their applicable effective date, and ending on the date which is ninety (90) days following their applicable effective date, then the prepayment premium shall be 135% of the face amount plus any accrued interest; (iii) if any of the convertible promissory notes are prepaid during the period beginning on the date which is ninety-one (91) days following their applicable effective date, and ending on the date which is one hundred eighty (180) days following their applicable effective date, then the prepayment premium shall be 145% of the face amount plus any accrued interest. Such prepayment redemptions must be closed and funded within three days of giving notice of prepayment or the right to prepay shall be forfeited.

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.

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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.

For the three-month period ended March 31, 2020,2021, the Company recorded interest of $14,756 (2020-$183,482, interest and Default Amounts of $183,482 (March 31, 2019-$11,039)default amounts). As at March 31, 2020, $262,3852021, $nil (December 31, 2019-2020-$130,249)316,048) of accrued interest and Default Amounts areis included in accrued liabilities in the interim condensed consolidated balance sheets. In addition, during the three-month period ended March 31, 2020, $5,311 (March 31, 2019-2021, $32,444 (2020-$nil)5,311) of accrued interest was converted.

Refer also to going concern, note 2.

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13. Mortgage12. Loan Payable to Related Party

The Company obtained a mortgage provided by private lendersbalance owing to finance the acquisition of the shares of 1684567. The mortgage has a principal amount of $1,268,820 ($1,800,000 CAD),director, is repayable interest onlyunsecured, non-interest bearing and due on a monthly basis at an annual rate of the higher of the Royal Bank of Canada's prime rate plus 6.05% (currently 8.50%) and 10% per annum with a revised maturity date of October 19, 2020. The mortgage payable is secured by the shares held of 1684567, a first mortgage on the land described in note 8, long-lived assets, with a carrying value of $1,304,694 ($1,850,892 CAD), a general assignment of rents, and a fire insurance policy. In addition, on December 19, 2019, the Company received a further advance of $563,920 ($800,000 CAD) from current and additional private lenders, on the same terms as the mortgage above. Financing fees on the mortgage totaled $120,820 ($156,929 CAD).  As at March 31, 2020, $7,451 ($10,570 CAD) (December 31, 2019-$8,138; $10,570 CAD) of accrued interest is included in accrued liabilities in the interim condensed consolidated balance sheets.demand.

ForDuring the three-month period ended March 31, 2020, $48,380 ($65,000 CAD) (2019-$nil $nil CAD) in interest was incurred.

14. Loans Payable to Related Party

Loans payable in2021, the amountdirector's company, Travellers, converted a total of $70,490 ($100,000 CAD)$205,321 (C$261,620) (December 31, 2019-2020-$nil; $nil CAD),C$nil) of loans provided during the period and $80,323 (C$101,700) of accounts payable owing to Travellers bear interest at the rate of 12% per annum, are due on demand and unsecured.  As at March 31, 2020 $417 ($592 CAD) (December 31, 2019-$nil; $nil CAD) in interest was included in accrued liabilities.for 1,005,728 common shares.

For the three-month period ended March 31, 2020, $441 ($592 CAD) (March 31, 2019-$3,802; $5,055 CAD) in interest expense was incurred on loans payable to Travellers. In addition, for the three-month period ended March 31, 2020, $nil ($nil CAD) (three months ended March 31, 2019-$1,669; $2,219 CAD) in interest expense was incurred on loans payable to directors, outstanding as at March 31, 2019, in the amount of $56,122 ($75,000 CAD).

15.13. Capital Stock

As at March 31, 2020,2021, the Company had 150,000,000 authorized common shares authorized with a par value of $.0001 per share and 60,501,830 (December 31, 2019-51,784,504)89,184,951 (2020-82,860,619) common shares issued and outstanding common shares. outstanding.

For the three-month period ended March 31, 2020,2021, the Company issued 7,717,3263,175,124 common shares on the conversion of unsecuredconvertible promissory notes, in the amount of $70,000,$713,716, including accrued interest and related costcosts of $6,727,$32,716. The share conversion prices ranged from $0.156 to $0.26 per share. The Company also issued 1,005,728 common shares on the conversion of loans payable and accounts payable to related party (Travellers), in the amount of $285,644 (C$363,320).

In addition, the Company raised $157,620 (C$200,000) on a private place for 630,480 common shares at an issue price of $0.25 per share. Further, 63,000 common shares of the Company were issued for professional services valued at $24,219, based on the closing trading prices on issuance, disclosed as stock-based compensation in the interim condensed consolidated statements of operations and comprehensive loss.

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SusGlobal Energy Corp.
Notes to the Interim Condensed Consolidated Financial Statements
March 31, 2021 and 2020
(Expressed in United States Dollars)
(unaudited)

13. Capital Stock, (continued)

On March 31, 2021, the Company issued a convertible promissory note to an investor, the March 2021 Investor, and issued, subsequent to March 31, 2021, 200,000 common shares, representing financing fees valued at $66,000, based on the closing trading price on issuance, disclosed under note 11(e), convertible promissory notes.

On January 4, 2021, the Company issued 1,000,000 common shares to the CEO and 50,000 common shares to the CFO in connection with their executive consulting agreements, valued at $217,035, based on the closing trading price on issuance. Included under management stock-based compensation in the interim condensed consolidated statements of operations and comprehensive loss, is an amount of $54,259, representing that portion of the stock-based compensation for the period. Also, on January 4, 2021, the Company issued 400,000 common shares on proceeds previously received on a conversion of debt in December 2020.

During the year ended December 31, 2020, the convertible promissory note holders converted a total of $76,727.$181,058 of their convertible notes, including accrued interest and related costs of $20,910 for 27,118,109 common shares. The share conversion prices ranged from $0.0036 to $0.0176 per share. On January 10,December 31, 2020, the Company issued 1,000,000287,984 (2019-80,000 common shares onshares) in the exchange of the CEO's 1,000,000amount $60,670 to certain independent directors for their 2019 RSUs.

During the year ended December 31,2019,and 2020 services. In addition, the Company issued 9,289,973a total of 15,000 common shares to employees in the amount of $2,550 and 3,184,992 common shares on the conversion of unsecured convertible promissory notesloans payable to related party.

The Company canceled the 529,970 shares previously held by BDO Canada Limited, whose shares were returned to the Company on April 1, 2020, in the amount of $248,618 including accrued interest and related costs of $21,162, for a total of $269,780 at conversion prices ranging from $0.0176 to $0.0910 per share. The Company also issued 100,000$7,036. Further, on January 10, 2020, the CEO's remaining RSUs were exchanged into 1,000,000 common shares for professional services determined to be valued at $53,000, 80,000 common shares to directors determined to be valued at $39,200 and 5,000 common shares to each of two employees determined to be valued at $400 in total, with amounts determined based on the closing trading price on the day immediately prior to issuance. Further, 5,000 common shares were issued for proceeds received prior to December 31, 2018 of $4,600, net of share issue costs of $400.Company. In addition, on January 8, 2019,December 21, 2020, the Company issued 1,000,000received a notice of conversion from one of the January 2019 Investors in the amount of $7,830 plus legal fees of $750. The 400,000 common shares on the exchange of the CEO's 2018 RSUs determined to be valued at $1,000,000, basedthis conversion were issued on private placement pricing at the time of granting the RSUs and on April 2, 2019, the Company issued 1,000,000 common shares on the exchange of the former chief executive officer's 2018 RSUs determined to be valued at $330,000, based on private placement pricing at the time of granting the RSUs.January 4, 2021, as noted above.

All non-cash transactions during December 31, 2019, were valued based on the proceeds of a recent private placement

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1614. Commitments

For the nine-month period ending December 31, 2020	$	7,049
For the year ending December 31, 2021		7,049
For the year ending December 31, 2022		7,049
For the year ending December 31, 2023		7,049
For the year ending December 31, 2024		7,049
Thereafter		7,049
	$	42,294

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SusGlobal Energy Corp.
Notes to the Interim Condensed Consolidated Financial Statements
March 31, 2021 and 2020
(Expressed in United States Dollars)
(unaudited)

14. Commitments, (continued)