SusGlobal Energy Corp.: Form 10-Q - Filed by newsfilecorp.com

0001062993-18-003318.txt : 20180813 0001062993-18-003318.hdr.sgml : 20180813 20180813165210 ACCESSION NUMBER: 0001062993-18-003318 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 64 CONFORMED PERIOD OF REPORT: 20180630 FILED AS OF DATE: 20180813 DATE AS OF CHANGE: 20180813 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SusGlobal Energy Corp. CENTRAL INDEX KEY: 0001652539 STANDARD INDUSTRIAL CLASSIFICATION: REFUSE SYSTEMS [4953] IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 333-209143 FILM NUMBER: 181012890 BUSINESS ADDRESS: STREET 1: 200 DAVENPORT ROAD CITY: TORONTO STATE: A6 ZIP: M5R 1J2 BUSINESS PHONE: 4162238500 MAIL ADDRESS: STREET 1: 200 DAVENPORT ROAD CITY: TORONTO STATE: A6 ZIP: M5R 1J2 10-Q 1 form10q.htm FORM 10-Q SusGlobal Energy Corp.: Form 10-Q - Filed by newsfilecorp.com

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 June 30, 2018

[ ] 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 333-209143

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

Delaware	38-4039116
(State or other jurisdiction of incorporation or	(I. R. S. Employer Identification No.)
organization)

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)

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

pg. 1

Large accelerated filer [ ]	Accelerated filer [ ]
Non-accelerated filer [ ]	Smaller reporting company [X]
(Do not check if a smaller reporting company)
	Emerging growth company [X]

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 August 13, 2018 was 40,040,031 shares.

Explanatory Note: The Company is not required to file reports under Section 13 or 15(d) of the Securities Exchange Act of 1934.

pg. 2

SusGlobal Energy Corp.

INDEX TO FORM 10-Q

For the Three and Six-Month Periods Ended June 30, 2018 and 2017

Part I	FINANCIAL INFORMATION
Item 1	Financial Statements	4
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3	Quantitative and Qualitative Disclosures About Market Risk	32
Item 4	Controls and Procedures	32
Part II	OTHER INFORMATION	33
Item 1A	Legal Proceedings	33
Item 1B	Risk Factors	33
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 3	Defaults Upon Senior Securities	33
Item 4	Mine Safety Disclosures	33
Item 5	Other Information	34
Item 6	Exhibits	34

pg. 3

SUSGLOBAL ENERGY CORP.

CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2018 and 2017

(Expressed in United States Dollars)

CONTENTS

Interim Condensed Consolidated Balance Sheets	5
Interim Condensed Consolidated Statements of Operations and Comprehensive Loss	6
Interim Condensed Consolidated Statements of Stockholders’ Deficit	7
Interim Condensed Consolidated Statements of Cash Flows	8
Notes to the Interim Condensed Consolidated Financial Statements	9-18

pg. 4

SusGlobal Energy Corp.

Interim Condensed Consolidated Balance Sheets

As at June 30, 2018 and December 31, 2017

(Expressed in United States Dollars)

(unaudited)

		June 30, 2018			December 31, 2017
ASSETS
Current Assets
Cash and cash equivalents	$	58,446		$	126,117
Trade receivables		103,968			192,194
Inventory		115,733			53,964
Prepaid expenses and deposits		9,092			53,719

Total Current Assets		287,239			425,994

Intangible Assets (note 6)		140,112			147,100

Long-lived Assets, net (note 7)		3,680,597			3,864,588
Total Assets	$	4,107,948		$	4,437,682

LIABILITIES AND STOCKHOLDERS’
DEFICIENCY
Current Liabilities
Accounts payable (note 8)	$	352,578		$	413,442
Accrued liabilities (notes 8 and 10)		340,343			347,417
Current portion of long-term debt (note 9)		1,747,810			1,828,900
Current portion of obligations under capital lease (note 10)		89,821			59,204
Loans payable to related parties (note 11)		208,835			15,942

Total Current Liabilities		2,739,387			2,664,905

Long-Term Liabilities
Long-term debt (note 9)		2,151,212			2,332,535
Obligations under capital lease (note 10)		257,725			160,580
Total Long-term Liabilities		2,408,937			2,493,115
Total Liabilities		5,148,324			5,158,020
Stockholders’ Deficiency
Preferred stock, $.0001 par value, 10,000,000 authorized, none issued and outstanding
Common stock, $.0001 par value, 150,000,000 authorized, 39,913,031 (2017- 37,393,031) shares issued and outstanding (note 12)		3,992			3,740
Additional paid-in capital		5,388,559			3,576,111
Subscriptions payable		-			178,200
Stock compensation reserve		665,000			330,000
Accumulated deficit		(6,970,848	)		(4,660,296	)
Accumulated other comprehensive loss		(127,079	)		(148,093	)

Stockholders’ deficiency		(1,040,376	)		(720,338	)

Total Liabilities and Stockholders’ Deficiency	$	4,107,948		$	4,437,682

Going concern (note 2)
Commitments (note 13)

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

pg. 5

SusGlobal Energy Corp.

Interim Condensed Consolidated Statements of Operations and Comprehensive Loss

For the three and six-month periods ended June 30, 2018 and 2017

(Expressed in United States Dollars)

(unaudited)

		For the three-month periods ended						For the six-month periods ended
		June 30, 2018			June 30, 2017			June 30, 2018			June 30, 2017

Revenue	$	227,423		$	-		$	360,144		$	-

Cost of Sales

Opening inventory		67,210			-			53,964			-
Depreciation		98,268			-			192,311
Direct wages and benefits		44,049			-			84,108			-
Equipment rental, delivery and repairs and maintenance		26,158			-			61,198			-
Utilities		9,688			-			31,888			-
Outside contractors		12,837			-			16,681
		258,210			-			440,150			-
Less: closing inventory		(115,733	)		-			(115,733	)		-
Total cost of sales		142,477			-			324,417			-

Gross profit		84,946			-			35,727			-

Operating expenses

Financing costs		-			-			-			882,153
Management compensation-stock-based compensation (note 8)		1,582,500			82,500			1,665,000			165,000
Management compensation-fees (note 8)		83,584			40,149			173,758			80,946
Interest expense (note 8)		91,779			22,096			177,019			42,686
Professional fees (note 13(c))		76,220			36,374			137,042			88,359
Office and administration (note 13(c))		12,501			13,244			63,585			32,942
Rent and occupancy (note 8)		34,716			13,752			68,917			25,178
Insurance		15,466			21,983			30,585			36,949
Repairs and maintenance		10,760			-			18,769			-
Filing fees		3,581			5,467			10,039			9,356
Directors compensation		774			13,200			1,565			24,800
Contribution to Advanced Water Technology Program (note 13 (c))		-			-			-			71,017
Total operating expenses		1,911,881			248,765			2,346,279			1,459,386

Net loss		(1,826,935	)		(248,765	)		(2,310,552	)		(1,459,386	)
Other comprehensive (loss) income
Foreign exchange (loss) income		(7,300	)		(39,884	)		21,014			(47,727	)

Comprehensive loss	$	(1,834,235	)	$	(288,649	)	$	(2,289,538	)	$	(1,507,113	)

Net loss per share-basic and diluted	$	(0.05	)	$	(0.01	)	$	(0.06	)	$	(0.04	)

Weighted average number of common shares outstanding- basic and diluted		39,090,613			36,190,291			38,824,909			36,042,945

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

pg. 6

SusGlobal Energy Corp.

Interim Condensed Consolidated Statements of Changes in Stockholders’ Deficiency

For the six-month periods ended June 30, 2018 and year ended December 31, 2017

(Expressed in United States Dollars)

(unaudited)

	Number of		Common			Additional Paid-		Share			Stock			Accumulated			Accumulated Other			Stockholders’
	Shares		Shares			in Capital		Subscriptions			Compensation			Deficit			Comprehensive			Deficiency
								Payable			Reserve						Loss

Balance – December 31, 2016	34,128,910	$	2,004,407		$	-	$	-		$	-		$	(2,447,815	)	$	(41,745	)	$	(485,153	)
Shares issued to directors	40,000		11,600			-		-			-			-			-			11,600
Shares issued to employee	5,000		1,450			-		-			-			-			-			1,450
Shares issued for consulting services	15,000		4,950			-		-			-			-			-			4,950
Shares issued on exercise of offer to acquire shares	115,000		11,500			-		-			-			-			-			11,500
Shares issued to agents on financing	1,620,000		469,800			-		-			-			-			-			469,800
Shares issued on private placement, net of share issue costs	329,176		98,048			-		-			-			-			-			98,048
Reallocation between common shares and additional paid-in capital	-		(2,598,130	)		2,598,130		-			-			-			-			-
Shares issued to directors	40,000		4			13,196		-			-			-			-			13,200
Shares issued as compensation for director nomination	20,000		2			6,598		-			-			-			-			6,600
Shares issued to employee	4,000		1			3,999		-			-			-			-			4,000
Shares issued for consulting services	20,000		2			19,998		-			-			-			-			20,000
Shares issued for private placement compensation	5,000		1			4,999		-			-			-			-			5,000
Shares issued on acquisition of assets	529,970		53			529,917														529,970
Shares issued on private placement, net of share issue costs	520,975		52			399,274		-			-			-			-			399,326
Stock compensation expensed on vesting of stock award	-		-			-		-			330,000			-			-			330,000
Proceeds received on shares yet to be issued	-		-			-		178,200			-			-			-			178,200
Other comprehensive loss	-		-			-		-			-			-			(106,348	)		(106,348	)
Net loss	-		-			-		-			-			(2,212,481	)		-			(2,212,481	)
Balance – December 31, 2017	37,393,031		3,740			3,576,111		178,200			330,000			(4,660,296	)		(148,093	)		(720,338	)
Shares issued for proceeds previously received	190,000		19			178,181		(178,200	)		-			-			-			-
Shares issued on vesting of 2017 stock award	2,000,000		200			1,329,800		-			(330,000	)		-			-			1,000,000
Shares issued for private placement, net of share issue costs	330,000		33			304,467		-			-			-			-			304,500
Stock compensation expensed on vesting of stock award	-		-			-		-			665,000			-			-			665,000
Other comprehensive income	-		-			-		-			-			-			21,014			21,014
Net loss	-		-			-		-			-			(2,310,552	)		-			(2,310,552	)
Balance-June 30, 2018	39,913,031	$	3,992		$	5,388,559	$	-		$	665,000		$	(6,970,848	)	$	(127,079	)	$	(1,040,376	)

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

pg. 7

SusGlobal Energy Corp.

Interim Condensed Consolidated Statements of Cash Flows

For the six-month periods ended June 30, 2018 and 2017

(Expressed in United States Dollars)

(unaudited)

		For the six-month			For the six-month
		period ended			period ended
		June 30, 2018			June 30, 2017

Cash flows from operating activities
Net loss	$	(2,310,552	)	$	(1,459,386	)
Adjustments for:
Depreciation		196,491			292
Amortization of intangible asset		100			100
Non-cash financing fees		-			469,800
Stock-based compensation		1,665,000			191,250
Interest capitalized		54,276			-
Changes in non-cash working capital:
Trade receivables		81,565			20,646
Inventory		(66,295	)		-
Prepaid expenses and deposits		43,378			(28,396	)
Accounts payable		(50,177	)		(114,870	)
Accrued liabilities		9,646			(35,334	)
Net cash used in operating activities		(376,568	)		(955,898	)

Cash flows from investing activities
Disposal of term deposit		-			151,100
Asset purchase commitment		-			(451,680	)
Purchase of long-lived assets		(1,565	)		(2,119	)
Net cash used in investing activities		(1,565	)		(302,699	)

Cash flows from financing activities
Advances of long-term debt		-			1,695,320
Repayment of long-term debt		(121,878	)		(451,680	)
Repayments of obligations under capital lease		(51,283	)		-
Repayments of loans payable to related parties		(15,654	)		(61,951	)
Advances of loans payable to related parties		215,243
Private placement proceeds (net of share issue costs)		304,500			138,894
Net cash provided by financing activities		330,928			1,320,583

Effect of exchange rate on cash		(20,466	)		(31,762	)
(Decrease) increase in cash		(67,671	)		30,224
Cash and cash equivalents-beginning of period		126,117			1,774
Cash and cash equivalents-end of period	$	58,446		$	31,998

Supplemental Cash Flow Disclosures:

Interest paid	$	137,782		$	35,253
Income taxes paid		-			-

(i)	Refer to note 10, obligations under capital lease, for details on the non-cash purchase of certain long-lived assets

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

pg. 8

SusGlobal Energy Corp.

Notes to the Interim Condensed Consolidated Financial Statements

June 30, 2018 and 2017

(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, 23, 2017.

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

These interim condensed consolidated financial statements of SusGlobal and its wholly-owned subsidiaries, SusGlobal Energy Canada Corp., SusGlobal Energy Canada I Ltd. and SusGlobal Energy Belleville Ltd. (“SGECI”) (together, the “Company”), have been prepared following generally accepted accounting principles in the United States (“US GAAP”), and are expressed in United States Dollars. The Company’s functional currency is the Canadian Dollar (“CAD”). 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 June 30, 2018, the Company had a working capital deficit of $2,452,148 (December 31, 2017-$2,238,911), incurred a net loss of $2,310,552 (2017-$1,459,386) for the six months ended June 30, 2018 and had an accumulated deficit of $6,970,848 (December 31, 2017-$4,660,296) 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 PACE Savings & Credit Union Limited (“PACE”) and upon achieving profitable operations. Management believes that the Company will be able to obtain the necessary funding by equity or debt; however, there is no assurance of funding being available or available on acceptable terms. Subsequent to June 30, 2018, the long-term debt with PACE was refinanced (see note 15(a)). 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.

pg. 9

SusGlobal Energy Corp.

Notes to the Interim Condensed Consolidated Financial Statements

June 30, 2018 and 2017

(Expressed in United States Dollars)

(unaudited)

3. Significant Accounting Policies

These interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company for the years ended December 31, 2017 and 2016.

Recently Adopted Accounting Pronouncements:

On January 1, 2018, the Company adopted accounting standards (“ASU”) update No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash”. The Company now includes restricted cash as part of cash and cash equivalents. The Company has adopted this policy on a retrospective basis. The reference to restricted cash included in the interim condensed consolidated statements of cash flow for the three-month period ended March 31, 2017, has been reclassified to cash and cash equivalents at the end of this prior period.

On January 1 2018, the Company adopted ASU No. 2014-09, Revenue from Contracts with Customers, which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers that supersedes most current revenue recognition guidance. The updated guidance, and subsequent clarifications, collectively referred to as accounting standards codification (“ASC”) 606, require an entity to recognize revenue when it transfers control of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. In addition, the guidance requires the disclosure of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The Company adopted this standard, utilizing the modified retrospective approach, with the cumulative effect of initially applying the new standard recognized in deficit. Accordingly, comparative prior period information has not been restated and continues to be reported under that accounting standard. The adoption of ASC 606 had no impact on the Company’s interim condensed consolidated balance sheets as of January 1, 2018.

On January 1, 2018, the Company adopted ASU No. 2017, Compensation-Stock Compensation: Topic 718: Scope of Modification Accounting (ASU 2017-09) to provide clarity and reduce both the (1) diversity in practice and (2) cost and complexity when changing the terms or conditions of share-based payment awards. Under ASU 2017-09, modification accounting is required to be applied unless all of the following are the same immediately before and after the change:

1.	The award’s fair value (or calculated value or intrinsic value if those measurement methods are used).
2.	The award’s vesting conditions.
3.	The award’s classification as an equity or liability instrument.

The adoption of ASC 606 had no impact on the Company’s interim condensed consolidated balance sheets as of January 1, 2018.

4. Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by 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 will not have a material impact on the Company’s financial position, results of operations or cash flows.

pg. 10

SusGlobal Energy Corp.

Notes to the Interim Condensed Consolidated Financial Statements

June 30, 2018 and 2017

(Expressed in United States Dollars)

(unaudited)

4. Recent Accounting Pronouncements, (continued)

In February 2016, the FASB issued ASU No. 2016-02, “Leases” (Topic 842). The standard requires lessees to recognize the assets and liabilities that arise from leases on the balance sheet. ASU 2016-02 requires the recognition on the balance sheet of a lease liability to make lease payments by lessees and a right-of-use asset representing its right to use the underlying asset for the lease term. The new guidance will also require significant additional disclosure about the amount, timing and uncertainty of cash flows from leases. The new guidance is effective for annual and interim reporting periods beginning after December 15, 2018 (January 1, 2019 for the Company). The amendments should be applied at the beginning of the earliest period presented using a modified retrospective approach with earlier application permitted as of the beginning of an interim or annual reporting period. In March 2018, the FASB approved a new, optional transition method that will give companies the option to use the effective date as the date of initial application on transition. The Company plans to elect this transition method, and as a result, the Company will not adjust the comparative financial information or make the new required lease disclosures for periods before the effective date. The Company anticipates the adoption of this new standard will result in a significant increase in lease-related assets and liabilities in the consolidated balance sheet. As the impact of this standard is non-cash in nature, the Company does not anticipate its adoption having an impact on the Company’s consolidated statement of cash flows. The Company is currently evaluating the impact of adopting ASU No. 2016-02 on the consolidated statement of income.

In January 2017, the FASB issued ASU No. 2017-04, “Intangibles-Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment”. 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 standard is to be effective for interim and annual periods beginning after December 15, 2019 and early adoption is permitted. The Company is currently evaluating the impact of adopting ASU No. 2017-04.

5. Financial Instruments

The carrying value of cash and cash equivalents, trade receivables, certain deposits under prepaid expenses and deposits, accounts payable and accrued liabilities approximated their fair values as of June 30, 2018 and December 31, 2017 due to their short-term nature. The carrying value of the long-term debt, obligations under capital lease and loans payable to related parties approximated their fair value due to their market interest rates.

Interest, Credit and Concentration Risk

In the opinion of management, the Company is exposed to significant interest rate risk on its variable corporate term loan of $3,899,022 ($5,134,345 CAD) (December 31, 2017-$4,161,435; $5,220,719 CAD). As at June 30, 2018, the Company is exposed to concentration risk as it had six customers (December 31, 2017-four customers) representing greater than 5% of total trade receivables and six customers (December 31, 2017-four customers) represented 80% (December 31 2017-91%) 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 63% (25% and 38%) (June 30, 2017-nil) 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.

pg. 11

SusGlobal Energy Corp.

Notes to the Interim Condensed Consolidated Financial Statements

June 30, 2018 and 2017

(Expressed in United States Dollars)

(unaudited)

5. Financial Instruments, (continued)

The Company intends to continue to raise funds through the issuance of common shares under a private placement, to ensure it has sufficient access to cash to meet current and foreseeable financial requirements. 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.

Currency Risk

Although the Company’s functional currency is the CAD, the Company realizes a portion of its expenses in USD. Consequently, certain assets and liabilities are exposed to foreign currency fluctuations. As at June 30, 2018, $7,002 (2017-$6,057) of the Company’s net monetary liabilities were denominated in USD. The Company has not entered into any hedging transactions to reduce the exposure to currency risk.

6. Intangible Assets

		June 30, 2018		December 31, 2017
Technology license (net of accumulated amortization of $631 (2017- $531))	$	1,370	$	1,470
Environmental compliance approvals-indefinite life- $182,700 CAD		138,742		145,630
	$	140,112	$	147,100

On May 6, 2015, the Company acquired an exclusive license from Syngas SDN BHD (“Syngas”), a Malaysian company to use Syngas intellectual property within North America for a period of five years for $1 consideration, renewable every five years upon written request. Syngas manufactures equipment that produces liquid transportation fuel from plastic waste material. The Company issued 20,000 common shares of the Company to an introducing party, determined to be valued at $2,000.

On September 15, 2017, the Company acquired the environmental approvals on the purchase of certain assets of Astoria from BDO Canada Limited (‘BDO”) under an asset purchase agreement (the “APA”).

7. Long-lived Assets, net

June 30, 2018

December 31, 2017

Cost

Accumulated

Net book value

Net book value

depreciation

Composting buildings

2,233,208

107,123

2,126,085

2,302,651

Gore cover system

890,017

70,460

819,557

906,953

Driveway and paving

351,982

22,292

329,690

360,835

Machinery and equipment

46,323

10,717

35,606

44,667

Equipment under capital lease

418,642

65,426

353,216

229,561

Office trailer

6,455

1,533

4,922

6,182

Computer equipment

6,712

2,840

3,872

3,368

Computer software

6,986

2,765

4,221

6,264

Automotive equipment

1,519

304

1,215

1,514

Signage

2,578

365

2,213

2,593

3,964,422

283,825

3,680,597

3,864,588

pg. 12

SusGlobal Energy Corp.

Notes to the Interim Condensed Consolidated Financial Statements

June 30, 2018 and 2017

(Expressed in United States Dollars)

(unaudited)

7. Long-lived Assets, net, continued

Included above are certain assets of Astoria acquired from BDO under the APA, which closed on September 15, 2017. The purchase price for the purchased assets, described as an organic composting facility, including composting buildings, gore cover system, driveway and paving, certain machinery and equipment, an office trailer, certain computer equipment and computer software consisted of cash of $2,974,798 ($3,917,300 CAD) and 529,970 restricted common shares of the Company, determined to be valued at $529,970 ($700,000 CAD), based on recent private placement pricing. In addition, legal costs in connection with acquiring the assets of $22,215 ($29,253 CAD), are included in the cost of the composting buildings. The purchase price was allocated to the assets acquired based on their estimated relative fair value as at the date the assets were acquired.

8. Related Party Transactions

During the six-month period ended June 30, 2018, the Company incurred $70,443 ($90,000 CAD) (2017-$22,484; $30,000 CAD) in management fees expense with Travellers International Inc. (“Travellers”), an Ontario company controlled by a director and president of the Company (the “President”); $70,443 ($90,000 CAD) (2017-$22,484; $30,000 CAD) in management fees expense with Landfill Gas Canada Ltd. (“LFGC”), an Ontario company controlled by a director and chief executive officer of the Company (the “CEO”); $ 23,481 ($30,000 CAD) (2017-$17,987; $24,000 CAD) in management fees expense with the Company’s chief financial officer (the “CFO”); and $9,391 ($12,000 CAD) (2017-$17,987; $24,000 CAD) in management fees expense with the Company’s vice-president of corporate development (the “VPCD”). As at June 30, 2018, unpaid remuneration and unpaid expenses in the amount of $72,544 ($95,528 CAD) (December 31, 2017-$111,426; $139,789 CAD) is included in accounts payable and $202,969 ($267,275 CAD) (December 31, 2017-$102,935; $129,137 CAD) is included in accrued liabilities.

In addition, during the six-month period ended June 30, 2018, the Company incurred interest expense of $4,818 ($6,156 CAD) (2017-$10,154; $13,548 CAD) on the outstanding loans from Travellers and $1,544 ($1,973 CAD) (2017-$nil; $nil CAD) from the directors. As at June 30, 2018, interest of $5,892 ($7,759 CAD) (December 31, 2017-$22,120; $27,750 CAD) is included in accrued liabilities.

During the six-month period ended June 30, 2018, the Company incurred $32,499 ($41,521 CAD) (2017-$11,426; $15,124 CAD) in rent paid under a rental agreement to Haute Inc. (“Haute”), an Ontario company controlled by the President.

And, during the six-month period ended June 30, 2018, the Company sold $15,728 ($20,095 CAD) of compost product to LFGC.

Furthermore, the Company granted the CEO 3,000,000 restricted stock units (“RSU”), under a consulting agreement effective January 1, 2017, determined to be valued at $990,000 based on recent private placement. On January 1, 2018, 1,000,000 RSUs were exchanged into 1,000,000 common stock. The RSUs for the remaining two installments are to vest annually on January 1, 2019 and 2020. On May 17, 2018, at a meeting of the board of directors (the “Board”), the Board approved an amendment to the President’s consulting agreement, to include the granting of 3,000,000 RSUs to the President on the same terms and conditions as those granted to the CEO. Effective May 17, 2018, 1,000,000 RSUs were exchanged into 1,000,000 common stock. Based on recent private placement pricing, the common stock issued on exchange for the RSUs, were determined to be valued at $1,000,000, disclosed as management compensation expense.

For the six-month period ended June 30, 2018, the Company recognized management compensation expense of $665,000 (2017-$165,000) on these awards, representing one sixth of the total value of the awards of $3,990,000, based on recent private placement pricing, on the dates of the awards.

9. Long-Term Debt

Credit

Corporate

June 30, 2018

December 31, 2017

Facility

Term

Total

Loan

(a)

(b)

(c)

(d)

Long-Term Debt

779,247

435,793

37,970

2,646,012

3,899,022

4,161,435

Current portion

(779,247

)

(435,793

)

(37,970

)

(494,800

)

(1,747,810

)

(1,828,900

)

Long-term Debt

2,151,212

2,332,535

pg. 13

SusGlobal Energy Corp.

Notes to the Interim Condensed Consolidated Financial Statements

June 30, 2018 and 2017

(Expressed in United States Dollars)

(unaudited)

9. Long-Term Debt, continued

(a)	The credit facility bears interest at the PACE base rate of 6.75% plus 1.25% per annum, payable on a monthly basis, interest only, due February 2, 2019. The credit facility is secured by a business loan general security agreement, a $1,215,040 ($1,600,000 CAD) personal guarantee from the President and a charge against the Company’s premises lease. Also pledged as security are the shares of the wholly-owned subsidiaries, a pledge of 3,300,000 of the Company’s shares held by LFGC, 500,000 of the Company’s shares held by the CFO, 2,000,000 of the Company’s shares held by a director’s company and a limited recourse guarantee by each of these parties. The credit facility is fully open for prepayment at any time without notice or bonus.

(b)	On June 15, 2017, PACE loaned the Company $455,640 ($600,000 CAD) under a variable rate business loan agreement, for its bid for the purchase of the assets of Astoria on the same terms, conditions and security as noted above, except that the loan is due February 2, 2019.

(c)	On August 4, 2017, PACE loaned the Company $37,970 ($50,000 CAD) under a variable rate business loan agreement to satisfy an outstanding liability on the same terms, conditions and security as noted above, except that the loan is due February 4, 2019.

(d)	On September 13, 2017, PACE loaned the Company $2,828,117 ($3,724,147 CAD) under a corporate term loan. The funds were used for the purpose of acquiring certain assets of Astoria from the court appointed receiver on September 15, 2017. The corporate term loan bears interest at the PACE base rate of 6.75% plus 1.25% per annum, payable in monthly blended instalments of principal and interest of $57,383 ($75,564 CAD), due 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 $3,038,343 ($4,000,978 CAD) against the assets including inventory, accounts receivable and equipment. The corporate term loan also included an assignment of existing contracts included in the APA.

	The unpaid and previously deferred interest on the corporate term loan for the period from March 13, 2018 to June 13, 2018, in the amount of $52,659 ($69,343 CAD), has been capitalized and included in the principal balance of the corporate term loan.

	The shares of the wholly-owned subsidiaries and those shares held by the companies and the CFO noted under (a) above, also represent security for the corporate term loan.

See subsequent events note 15(a) for details on the refinancing of all the outstanding long-term debt with PACE.

Repayments are as follows:

For the six months ending December 31, 2018	$	242,469
For the year ending December 31, 2019		1,767,935
For the year ending December 31, 2020		557,664
For the year ending December 31, 2021		603,949
For the year ending December 31, 2022		485,636
For the year ending December 31, 2023		241,369
Total	$	3,899,022

For the six-month period ended June 30, 2018, $158,433 ($202,419 CAD) (2017-$32,532; $43,405 CAD) in interest was charged.

pg. 14

SusGlobal Energy Corp.

Notes to the Interim Condensed Consolidated Financial Statements

June 30, 2018 and 2017

(Expressed in United States Dollars)

(unaudited)

10. Obligations under Capital Lease

June 30,

December 31,

2018

2017

(a)

(b)

(c)

Total

Obligations under Capital Lease

4,746

178,187

164,613

347,546

219,784

Less: current portion

(4,746

)

(47,513

)

(37,562

)

(89,821

)

(59,204

)

Obligations under Capital Lease

130,674

127,051

257,725

160,580

(a)	On September 21, 2017, the Company finalized a lease agreement for certain equipment for its organic composting facility in the amount of $13,046 ($17,180 CAD). The lease agreement is payable in monthly blended instalments of principal and interest of $983 ($1,268 CAD) at a monthly interest rate of 5.95%, due November 10, 2018.

(b)	On October 30, 2017, the Company finalized a lease agreement for certain equipment, which commenced on October 30, 2017, in the amount of $217,682 ($286,650 CAD). The lease agreement matures on September 30, 2021, with monthly blended instalments of principal and interest of $4,435 ($5,840 CAD), plus applicable harmonized sales taxes and an option to purchase the equipment for a final payment of $21,719 ($28,600 CAD), plus applicable harmonized sales taxes on October 31, 2021. The leasing agreement bears interest at the rate of 5.982% annually, compounded monthly.

(c)	On February 16, 2018, the Company finalized a lease agreement on certain equipment, which was on monthly rental. The lease is for a period of forty-eight months, with the first two monthly instalments of $7,594 ($10,000 CAD), plus applicable harmonized sales taxes, followed by forty-six monthly blended instalments of principal and interest of $3,887 ($5,118 CAD), plus applicable harmonized sales taxes. The Company has the option to purchase the equipment on the forty-ninth month for an amount of $18,742 ($24,680 CAD), plus applicable harmonized sales taxes. The leasing agreement bears interest at the rate of 6.15% annually, compounded monthly, due January 27, 2022.

The lease liabilities are secured by the equipment under capital lease as described in note 7.

Minimum lease payments are as follows:

For the six-month period ending December 31, 2018	$	59,181
For the year ending December 31, 2019		99,860
For the year ending December 31, 2020		99,860
For the year ending December 31, 2021		108,275
For the year ending December 31, 2022		22,629
		389,805
Less: imputed interest		(42,259	)
Total	$	347,546

For the six-month period ended June 30, 2018, $9,738 (12,441 CAD) (December 31, 2017-$nil; ($nil CAD)) in interest was charged.

11. Loans Payable to Related Parties

		June 30, 2018		December 31, 2017

Travellers International Inc.	$	151,880	$	15,942
Directors		56,955		-
	$	208,835	$	15,942

Loan payable in the amount of $151,880 ($200,000 CAD) (December 31, 2017-$15,942; $20,000 CAD), owing to Travellers and bearing interest at the rate of 12% per annum, is due on demand and unsecured. As at June 30, 2018, $4,394 ($5,786 CAD) (December 31, 2017-$22,120; $27,750 CAD) in interest is included in accrued liabilities.

pg. 15

SusGlobal Energy Corp.

Notes to the Interim Condensed Consolidated Financial Statements

June 30, 2018 and 2017

(Expressed in United States Dollars)

(unaudited)

11. Loans Payable to Related Parties, continued

During the six-month period ended June 30, 2018, three directors each loaned the Company $18,985 ($25,000 CAD). The loans bear interest at the rate of 12% per annum, are due on demand and unsecured. As at June 30, 2018, $1,498 ($1,973 CAD) (December 31, 2017-$nil; $nil CAD) in interest is included in accrued liabilities.

During the six-month period ended June 30, 2018, $6,362 ($8,129 CAD) (2017-$10,154; $13,548 CAD) in interest was charged on the loans payable to related parties.

12. Capital Stock

At June 30, 2018, the Company had 150,000,000 of common shares authorized with a par value of $.0001 per share and 39,913,031 (2017-37,393,031) common shares issued and outstanding.

During the six-month period ended June 30, 2018, the Company raised $304,500 (December 31, 2017-$497,374) cash on a private placement, net of share issue costs of $25,800 (2017-$48,100), on the issuance of 330,000 (December 31, 2017-850,151) common shares of the Company. In addition, during the six-month period ended June 30, 2018, the Company issued 190,000 common shares of the Company, on $178,200 cash received on a private placement received prior to December 31, 2017, net of share issue costs of $11,800.

During the prior year, on January 5, 2017 and January 30, 2017, the Company issued, in total, 1,620,000 common shares of the Company, determined to be valued at $469,800, based on recent private placement pricing, to agents for their services in assisting in establishing the first credit facility with PACE. On each of January 30, 2017 and June 8, 2017, the Company issued a total of 40,000 common shares to two new directors, determined to be valued at $11,600 and $13,200 respectively, based on recent private placement pricing. For the six-month period ended June 30, 2018, the services provided by the directors was disclosed under directors’ compensation in the interim condensed consolidated statements of operations and comprehensive loss.

On February 6, 2017, the Company issued 5,000 common shares and on August 23, 2017, the Company issued 4,000 common shares to a current employee for services and a new employee as an incentive to join the Company, respectively, determined to be valued at $1,450 and $4,000, respectively, based on recent private placement pricing and disclosed under office and administration in the interim condensed consolidated statements of operations and comprehensive loss. On May 9, 2017, the Company issued 15,000 common shares, on June 8, 2017, another 20,000 common shares and then on August 23, 2017, a further 20,000 common shares to consultants for their services, determined to be valued at $4,950, $6,600 and $20,000 respectively, based on recent private placement pricing. These services were disclosed under professional fees in the interim condensed consolidated statements of operations and comprehensive loss. On May 9, 2017, the Company issued 115,000 common shares on the exercise of the offer to acquire common shares at a price of $0.10 per common share by the VPCD. On September 5, 2017, the Company issued 5,000 common shares as compensation for a private placement, determined to be valued at $5,000. In addition, on September 11, 2017, the Company issued 529,970 common shares on the acquisition of assets, determined to be valued at $529,970 ($700,000 CAD), based on recent private placement pricing (see note 7).

All non-cash transactions were valued based on the proceeds of a recent private placement.

The Company also granted the CEO 3,000,000 restricted stock units (“RSU”), under a new consulting agreement effective January 1, 2017. The RSUs are to vest in three equal installments annually on January 1, 2018, 2019 and 2020. On January 1, 2018 the Company issued 1,000,000 common shares in exchange for 1,000,000 RSUs and recorded management compensation expense of $165,000 on the vesting of the RSUs. In addition, on May 17, 2018, at a meeting of the board of directors (the “Board”), the Board approved an amendment to the President’s consulting agreement, to include the granting of 3,000,000 RSUs to the President on the same terms and conditions as those granted to the CEO. Effective May 17, 2018, 1,000,000 RSUs were exchanged into 1,000,000 common stock. Based on recent private placement pricing, the common stock issued on exchange for the RSUs, were determined to be valued at $1,000,000. For the six-month period ended June 30, 2018, this management compensation of $1,000,000 and the vesting of the RSUs for the President in the amount of $500,000 are disclosed under management compensation expense totaling $ 1,500,000.

pg. 16

SusGlobal Energy Corp.

Notes to the Interim Condensed Consolidated Financial Statements

June 30, 2018 and 2017

(Expressed in United States Dollars)

(unaudited)

13. Commitments

Effective January 1, 2017, new consulting agreements were finalized for the services of the President and for the CEO. The consulting agreements are for a period of three years, commencing January 1, 2017. For each of these two executive officers, the monthly fees are as follows: $3,797 ($5,000 CAD) for 2017 and $11,391 ($15,000 CAD) for 2018 and 2019. In addition, the CEO was granted 3,000,000 RSUs on January 1, 2017. On January 1, 2018, 1,000,000 RSUs were exchanged into 1,000,000 common stock. The RSUs of the remaining two installments are to vest annually on January 1, 2019 and 2020. On May 17, 2018, the President’s consulting agreement was amended by the Board to add the granting of 3,000,000 RSUs, on the same terms and conditions as those of the CEO. On this date, the President was issued 1,000,000 common stock on the exchange of 1,000,000 RSUs. The future minimum commitment under these consulting agreements, is as follows:

For the six-month period ending December 31, 2018	$	136,692
For the year ending December 31, 2019		273,384
	$	410,076

Effective January 1, 2017, the Company entered into a new three-year premises lease agreement with Haute at a monthly amount of $3,038 ($4,000 CAD) for 2017, $ 3,797 ($5,000 CAD) for 2018 and $4,556 ($6,000 CAD) for 2019. The Company is also 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. The future minimum commitment under this premises lease agreement is as follows:

For the six-month period ending December 31, 2018	$	22,782
For the year ending December 31, 2019		54,677
	$	77,459

The Company is a partner in a business led collaboration in the water sector, a program known as the Advanced Water Technologies (“AWT”) Program. This program is administered by the Southern Ontario Water Consortium to assist small and medium sized business in the Province of Ontario, Canada, leverage world-class research facility and academic expertise to develop and demonstrate water technologies for successful introduction to market. The Company’s commitment under this program is as follows:

For the six-month period ending December 31, 2018

18,117

	The Company has already completed and provided its commitment for the first year of the program which ended March 31, 2017, which consisted of professional fees of $7,217 ($9,432 CAD) and a contribution to the capital requirements of the program, totaling $71,017 ($94,000 CAD), for equipment to be used in the AWT Program and to be retained by Fleming College, an academic institution. The Company’s commitment in the amount of $19,947 ($25,217 CAD) for the second year of the program which ended March 31, 2018, is included under accounts payable in the interim condensed consolidated balance sheets and under office and administration in the amount of $12,006 ($15,178 CAD) and professional fees in the amount of $7,941 ($10,039 CAD) in the interim condensed statements of operations and comprehensive loss.

d)	The Company was assigned the land lease on the purchase of certain assets of Astoria. 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 $2,278 ($3,000 CAD) 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 by the landlord. 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. The future minimum commitment under this land lease (excluding any CPIadjustment) is as follows:

pg. 17

SusGlobal Energy Corp.

Notes to the Interim Condensed Consolidated Financial Statements

June 30, 2018 and 2017

(Expressed in United States Dollars)

(unaudited)

13. Commitments, (continued)

For the six-month period ending December 31, 2018	$	13,669
For the year ending December 31, 2019		27,338
For the year ending December 31, 2020		27,338
For the year ending December 31, 2021		27,338
For the year ending December 31, 2022		27,338
For the year ending December 31, 2023		27,338
Thereafter		280,219
	$	430,578

e)	On April 9, 2018, a new one-year consulting agreement was finalized for the services of the Company’s CFO, effective April 1, 2018, at a monthly rate of $4,556 ($6,000 CAD). The future minimum commitment under this agreement is as follows:

For the six-month period ending December 31, 2018	$	27,336
For the year ending December 31, 2019		13,668

	$	41,004

PACE has provided the Company a letter of credit in favor of the Ministry of the Environment and Climate Change (“MOECC”) in the amount of $210,225 ($276,831 CAD) and, as a security, has 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 composting facility. The letter of credit is a requirement of the MOECC and is in connection with the financial assurance provided by the Company for it to be in compliance with the MOECCs environmental objectives. The MOECC regularly evaluates the Company’s organic composting facility to ensure compliance is adhered to and the letter of credit is subject to change by the MOECC. Since the fair value of the environmental remediation costs cannot be determined at this time, no estimate of such costs has been recorded in the accounts. As of June 30, 2018, the MOECC has not drawn on the letter of credit

14. Economic Dependence

The Company generated 63% of its revenue from two customers. The Company’s ability to continue operations is dependent on continuing to generate a similar amount of revenue from these customers.

15. 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 July 26 and 27, 2018, the outstanding long-term debt with PACE was re-financed. The re-financing will result in each of the credit facilities and the corporate term loan having terms of five years and a twenty-year amortization period, resulting in monthly repayment amounts totaling $33,264 ($43,803 CAD).

	(b)	Subsequent to June 30, 2018, the Company raised $116,840 on a private placement, net of share issue costs of $10,160, on the issuance of 127,000 common shares.

16. Comparative Figures

Certain of the prior period’s comparative figures have been reclassified to conform to the current period’s presentation.

pg. 18

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 and related notes included on our Registration Statement on Form S-4 filed with the Securities and Exchange Commission on April 5, 2017.

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 six-month period ended June 30, 2018 compared with the six-month period ended June 30, 2017 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 AUDITOR ISSUED AN OPINION 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, 2017 AND 2016. 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.

pg. 19

OVERVIEW

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

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. and SusGlobal Energy Belleville Ltd.

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

With the growing amount of organic wastes being produced by society as a whole, a solution for sustainable global management of these wastes must be achieved. 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 you turn what many consider waste into precious energy. The portfolio will be comprised of four 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) Increasing the capacity of existing infrastructure (anaerobic digesters) to allow processing of SSO to increase biogas yield. (c) Utilize recycled plastics to produce liquid fuels and (d) process digestate to produce a pathogen free organic fertilizer.

The convertibility of organic material into valuable end products such as biogas, liquid biofuels, organic fertilizers and compost shows the utility of renewable energy. 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 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.

The project and services offered can benefit the public and private markets. The following includes some of our work managing organic waste streams: Anaerobic Digestion, Dry Digestion, Biogas Production, Wastewater Treatment, In- Vessel Composting, SSO Treatment, Biosolids Heat Treatment and Composting.

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.

pg. 20

The primary focus of the services SusGlobal provides includes identifying idle or underutilized anaerobic digesters and integrating our technologies with capital investment to optimizing the operation of the existing digesters to reach their full capacity for processing SSO. Our processes not only divert significant organic waste from landfills, but also result in methane avoidance, with significant Greenhouse Gas (“GHG”) reductions from waste disposal. The processes also produce renewable energy through the conversion of wastewater biosolids and organic wastes in the same equipment (co-digestion) and valuable end products such as biogas, electricity and organic fertilizer, considered Class AA organic fertilizer.

Currently, the primary customers are municipalities in both rural and urban centers throughout southern and central Ontario, Canada. Much of the research and development that has been carried out has been completed by our CEO through multiple projects carried out on projects prior to the formation of SusGlobal. 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.

RECENT BUSINESS DEVELOPMENTS

Asset Purchase

On September 15, 2017, the Company closed the purchase of certain assets from Astoria Organic Matters Ltd., and Astoria Organic Matters Canada LP (“Astoria”), under the asset purchase agreement (the “APA”) from the court appointed receiver of Astoria, BDO Canada Limited (“BDO”). The purchase price for the composting buildings, Gore cover system, driveway and paving, office trailer, certain machinery and equipment, computer equipment, computer software and intangible assets consisted of cash of $3,113,540 ($4,100,000 CAD), funded by PACE Savings and Credit Union Limited (“PACE”) and 529,970 restricted common shares of the Company, determined to be valued at $529,970 ($700,000 CAD) based on recent private placement pricing. In addition, legal costs in connection with acquiring the assets of $22,215 ($29,253 CAD) are included in the cost of the organic composting facility. In addition, the Company purchased certain accounts receivable which it was required to collect, totaling $132,247 ($174,147 CAD) and a deposit with a local municipality in the amount of $37,970 ($50,000 CAD).

Financing Agreement with PACE

Effective January 1, 2017, the Company obtained a Line of Credit of up to $4,176,700 ($5,500,000 CAD) with PACE. The Line of Credit was to be advanced in tranches to allow for the funding of engineering, permitting, construction costs and equipment purchases for a project located near Owen Sound, Ontario, Canada, (the “BioGrid Project”). On February 2, 2017, the company received the first and only advance in the amount of $1,215,040 ($1,600,000 CAD). The Line of Credit is due on February 2, 2019. The Line of Credit is now one of multiple credit facilities with PACE.

The funds advanced on this Line of Credit, $1,215,040 ($1,600,000) bear interest at the PACE base rate of 6.75% plus 1.25% per annum, payable on a monthly basis, interest only. The Line of Credit is secured by a business loan general security agreement, a $1,215,040 ($1,600,000 CAD) personal guarantee from the President and a charge against the Company’s premises lease. Also pledged as security are the shares of the wholly-owned subsidiaries and a pledge of 3,300,000 shares of the Company held by Landfill Gas Canada Ltd. (“LFGC”), an Ontario company controlled by a director and chief executive officer of the Company (the “CEO”), 500,000 shares of the Company held by the chief financial officer (the “CFO”) and 2,000,000 shares of the Company held by a director’s company, and a limited recourse guarantee by each. The Line of Credit is fully open for prepayment at any time without notice or bonus. A total commitment fee of $83,534 ($110,000 CAD) was paid to PACE. In addition, the agents who assisted in establishing the Line of Credit received 1,620,000 common shares of the Company determined to be valued at $469,800, based on the pricing of a recent private placement offering and cash of $300,000, on closing, for their services. Other closing costs in connection with the Line of Credit included legal fees of $29,399 ($38,713 CAD). As at June 30, 2018, $779,247 ($1,026,135 CAD) remains outstanding (December 31, 2017-$817,932; $1,026,135 CAD). During the six months ended June 30, 2018, the Company incurred interest charges of $31,862 ($40,708 CAD) (2017-$30,981; $41,336 CAD) on this Line of Credit.

On July 27, 2018, the Company refinanced this credit facility at the PACE base rate of 7% plus 1.25% per annum, payable in monthly blended instalments of principal and interest of $6,655 ($8,764), commencing August 2, 2018, amortized over a twenty-year period and due September 2, 2022.

pg. 21

On June 15, 2017, PACE loaned the Company $455,640 ($600,000 CAD) under a variable rate business loan agreement, for its bid for the purchase of certain assets of Astoria on the same terms and conditions to the Line of Credit above, except that the loan is due February 2, 2019. As at June 30, 2018, $435,793 ($573,865 CAD) (December 31, 2017-$457,428; $573,865 CAD) remains outstanding. During the six months ended June 30, 2018, the Company incurred interest charges of $17,819 ($22,766 CAD) (2017-$1,550; $2,069 CAD) on this credit facility.

On July 27, 2018, the Company refinanced this credit facility at the PACE base rate of 7% plus 1.25% per annum, payable in monthly blended instalments of principal and interest of $3,722 ($4,901 CAD), commencing August 2, 2018, amortized over a twenty-year period and due September 2, 2022.

On August 4, 2017, PACE loaned the Company $37,970 ($50,000 CAD) under a variable business loan agreement, to satisfy an outstanding liability on the same terms and conditions to the Line of Credit above, except that the loan is due February 4, 2019. As at June 30, 2018, $37,970 ($50,000 CAD) (December 31, 2017-$39,855; $50,000 CAD) remains outstanding. During the six months ended June 30, 2018, the Company incurred interest charges of $1,553 ($1,984 CAD) (2017-$nil; $nil CAD) on this credit facility.

On July 27, 2018, the Company refinanced this credit facility at the PACE base rate of 7% plus 1.25% per annum, payable in monthly blended instalments of principal and interest of $324 ($427 CAD), commencing August 4, 2018, amortized over a twenty-year period and due September 4, 2022.

On September 13, 2017, PACE loaned the Company $2,828,117 ($3,724,147) under a corporate term loan. The funds were used for the purpose of acquiring certain assets of Astoria from the court appointed receiver on September 15, 2017. The corporate term loan bears interest at the PACE base rate of 6.75% plus 1.25% per annum, payable in monthly blended instalments of principal and interest of $57,383 ($75,564 CAD), due 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 Securities Act in the amount of $3,38,343 ($4,000,978 CAD) against the assets, including accounts receivable, inventory and equipment. PACE has also provided the Company with a letter of credit in the favor of the Ministry of the Environment and Climate Change (“MOECC”) in the amount of $210,226 ($276,831 CAD) and, as security, has registered a charge of lease over the premises, located at 704 Phillipston Road, Roslin, Ontario, Canada. The corporate term loan also includes an assignment of existing contracts included in the APA. On June 13, 2018, the unpaid and previously deferred interest on the corporate term loan for the period from March 13, 2018 to June 13, 2018, in the amount of $52,659 ($69,343 CAD), has been capitalized and included in the principal balance of the corporate term loan. As at June 30, 2018, $2,646,012 ($3,484,345 CAD) remains outstanding. During the six months ended June 30, 2018, the Company incurred interest charges of $107,1199 ($136,961 CAD) on this corporate term loan. As of June 30, 2018, and the date of this filing, the MOECC has not drawn on the letter of credit.

The shares pledged as security for the Line of Credit and the other credit facility also pertain to this corporate term loan.

On July 26, 2018, the Company refinanced this corporate term loan. The first and only blended instalment of principal and interest of $22,147 ($29,164 CAD) due August 1, 2018 will be at the PACE base rate of 6.75% plus 1.25% per annum, for this payment, amortized over a twenty-year period. This will be followed, commencing August 13, 2018, by monthly blended instalments of principal and interest of $22,562 ($29,711 CAD) at the PACE base rate of 7% plus 1.25% per annum, amortized over a twenty-year period. This refinanced corporate term loan is due September 13, 2022.

Other

On April 11, 2018, three directors each loaned the Company $18,985 ($25,000 CAD). The loans bear interest at the rate of 12% per annum, are due on demand and unsecured. During the six-month period ended June 30, 2018, $1,544 ($1,973 CAD) of interest was charged on this loan. As at June 30, 2018, $1,498 ($1,973 CAD) (December 31, 2017-$nil; $nil CAD) in interest is included in accrued liabilities and the loans remain outstanding.

On April 3, 2018, a new loan was provided by Travellers International Inc. (“Travellers”), an Ontario company controlled by the Executive Chairman and President (the “President”), who is also a director of the Company, in the amount of $151,880 ($200,000 CAD). A portion of the funds, $114,766 ($151,128 CAD), was used to pay two overdue monthly principal and interest instalments on the Company’s corporate term loan with PACE. This new loan is due on demand, unsecured and bears interest at the rate of 12% per annum. During the six-month period ended June 30, 2018, $4,529 ($5,786 CAD) of interest was charged on this loan. As at June 30, 2018, $4,394 ($5,786 CAD) (December 31, 2017-$nil; $nil CAD) in interest is included in accrued liabilities and the loans remain outstanding.

pg. 22

On February 16, 2018, the Company finalized a lease agreement for certain equipment for its organic composting facility, which was previously on monthly rental, in the amount of $187,914 ($247,450). The lease is for a period of forty-eight months, with two initial monthly instalments of $7,594 ($10,000 CAD) each, plus the applicable harmonized sales taxes, followed by forty-six monthly blended instalments of principal and interest of $3,887 ($5,118 CAD), plus the applicable harmonized sales taxes. The Company has the option to purchase the equipment on the forty ninth month for an amount of $18,742 ($24,680 CAD), plus the applicable harmonized sales taxes. The leasing agreement bears interest at the rate of 6.15% annually, compounded monthly, due January 27, 2022.

On October 30, 2017, the Company finalized a lease agreement for certain equipment for its organic composting facility, which commenced on October 30, 2017, in the amount of $217,682 ($286,650 CAD). The lease agreement requires monthly blended instalments of principal and interest of $4,435 ($5,840 CAD), plus applicable harmonized sales taxes and a final balloon payment of $21,719 ($28,600 CAD), plus applicable harmonized sales taxes on October 31, 2021. The lease agreement bears interest at the rate of 5.982% annually, compounded monthly, due September 30, 2021.

On September 21, 2017, the company finalized a lease agreement for the lease of certain equipment for its organic composting facility, in the amount of $13,046 ($17,180 CAD). The lease agreement requires monthly blended instalments of principal and interest of $983 ($1,268 CAD) at a monthly interest rate of 5.95%, due November 10, 2018.

On May 11, 2017, the Company signed a posting agreement with CrowdVest, a Tennessee limited liability company to act as the Company’s online intermediary technology platform in connection with the Company’s offering of common stock under Rule 506 of Regulation D under the Securities Act of 1933. As compensation, CrowdVest received 20,000 restricted common shares of the Company, based on an issue price of $5 per share, once the 506(c)-general solicitation offering commenced. The offering terminated on October 27, 2017 and was not extended.

On May 9, 2017, the company signed a memorandum of agreement (the “Agreement”) with Kentech, a corporation existing under the laws of the province of Ontario, Canada. The Agreement provides the Company the right to acquire and the right to use the equipment and innovative processes of Kentech in relation to the production of liquid fertilizer from organic waste material. The Agreement is for a period of five years, commencing on the date of the Agreement. The Agreement may be terminated by either party on providing six months’ notice.

Effective January 1, 2017, new consulting agreements were finalized for the services of the “President” and for the chief executive officer (the “CEO”). The consulting agreements are for a period of three years, commencing January 1, 2017. For each of these two executive officers, the monthly fees are to be as follows: $3,797 ($5,000 CAD) plus applicable taxes for 2017 and $11,391 ($15,000 CAD) plus applicable taxes for 2018 and 2019. In addition, the CEO was granted 3,000,000 Restricted Stock Units (“RSU”). The RSUs are to vest in three equal installments annually on January 1, 2018, 2019 and 2020. At a meeting of the board of directors (the “Board”) on May 17, 2017, the Board approved an amendment to the President’s consulting agreement, to include the granting of 3,000,000 RSUs to the President on the same terms and conditions as those granted to the CEO.

On December 7, 2016, the Company was awarded funding for the Advanced Water Technologies Program (the “AWT”), a program for business led collaborations in the water sector. AWT is administered by the Southern Ontario Water Consortium to assist small and medium sized businesses in the Province of Ontario, Canada to leverage world-class research facilities and academic expertise to develop and demonstrate water technologies for successful introduction to market. In addition, the program is designed to enhance the Ontario water cluster and continue to build Ontario’s reputation for water excellence around the world. The Company’s academic partner is the CAWT at Fleming College in Lindsay, Ontario, Canada. The program budget is for $607,520 ($800,000 CAD), of which the Company contributes 50% in cash and in-kind contributions and CAWT contributes 50%.

The Company has already completed and provided its commitment for the first year of the program which ended March 31, 2017, which consisted of professional fees of $7,217 ($9,432 CAD) and a contribution to the capital requirements of the program, totaling $71,017 ($94,000 CAD), for equipment to be used in the AWT Program and to be retained by Fleming College, the academic institution. The Company’s commitment in the amount of $19,150 ($25,217 CAD) for the second year of the program which ended March 31, 2018, is included under accounts payable in the interim condensed consolidated balance sheets.

On October 21, 2016, the Company hired the services of a contractor to assume the role of vice-president of corporate development (“VPCD”), effective November 1, 2016, for a period of fourteen months, at the rate of $3,038 ($4,000 CAD) per month, plus applicable taxes. In addition, the contractor was offered up to 115,000 common shares of the Company, at a price of $0.10 per common share, exercisable within 180 days of the effective date of the contract. On April 30, 2017, the contractor exercised the offer to purchase 115,000 common shares of the Company. Effective January 1, 2018, the VPCD performed her services on a month to month basis, at the same monthly rate and completed her services on March 31, 2018.

pg. 23

On November 4, 2016, the Company’s BioGrid Project, a project described in the expansion and operation agreement (the “BioGrid Agreement”) with the Township of Georgian Bluffs and the Township of Chatsworth (the “Municipalities”), was terminated.

On August 19, 2016, Travellers, provided a further loan in the amount of 159,474 ($210,000 CAD) which was required to initiate a letter of credit in the amount of $151,880 ($200,000 CAD), in favor of the Municipalities. As at This loan was repaid in full during the three months ended March 31, 2018. During the six months ended June 30, 2018, the Company incurred interest charges of $290 ($371 CAD) on this loan. On April 3, 2018, the Company fully repaid the accrued interest outstanding on this loan.

The letter of credit was a requirement of the BioGrid Agreement noted above. Fees for the letter of credit included $7,594 ($10,000 CAD) incurred and charged by Travellers and $2,278 ($3,000 CAD) charged by the Company’s chartered bank. There is no written agreement evidencing this loan or the previous loan with Travellers. The interest-bearing loans with Travellers are due on demand and were approved by the Board of Directors of the Company.

On August 3, 2016, the Company signed an agreement with Grimsby Energy Inc. from Grimsby, Ontario, Canada, to allow hydrolyzed and pasteurized organic wastes to be processed at their Anaerobic Biodigester. The agreement commenced November 1, 2016 and can be terminated by either party within three hundred and sixty-five days minimum written notice. Up to the date of this filing, there has been no activity under this agreement.

On May 14, 2015, the Ontario Ministry of Environment and Climate Change announced formal targets to be met to satisfy a commitment necessary to join the WCI along with Quebec and California, who are in the WCI with Cap and Trade commitments since 2014. The Ontario targets are very ambitious, with greenhouse gas (“GHG”) emission reductions of 15% by 2020, 37% by 2030 and 80% by 2050, all from a 1990 baseline. Ontario achieved a 6% reduction in GHG emissions from 1990 levels in 2014, mainly by closing all coal-fired power plants. The targets announced will require a focused program to reduce GHG emissions. The Company’s activities all contribute to GHG reductions, so will be a key part of Ontario’s initiative. The Company has also contacted counterparties in Quebec and California to explore opportunities for relevant projects. SusGlobal is committed to making all its commercial activities carbon neutral. The new Cap and Trade regulations were effective January 2017. Subsequently, on July 3, 2018, the new premier of the Province of Ontario announced the end of the Cap and Trade program in Ontario.

On May 6, 2015, the Company finalized an agreement with Syngas, a company incorporated under the laws of Malaysia, providing an exclusive license for the Company to use Syngas Intellectual Property within North America for a period of five years from the date of this agreement, for $1 consideration, renewable every five years upon written request. Syngas produces equipment that uses an innovative process to produce liquid transportation fuel from plastic waste material. The Company issued 20,000 common shares of the Company to an introducing party, determined to be valued at $2,000. The technology license is being amortized on a straight-line basis, over a period of 10 years. There are no other obligations under this agreement.

The Company and Syngas intend to collaborate and cooperate with a view to achieving economic and financial success for their respective businesses. The Company will continue to pursue other similar intellectual property around the world as we combine this and other technologies in innovative configurations to monetize the portfolio of proprietary technologies and processes to deliver value to our customers and shareholders.

Operations

Waste Transfer Station: The Company owns the Environmental Compliance Approvals (the “ECAs”) issued by the Ministry of the Environment and Climate Change (the “MOECC”), from the Province of Ontario, in place to operate a waste transfer station with the capacity to process up to 50,000 metric tonnes of waste annually. The Company is reviewing plans to construct and equip the waste transfer station. The location of the waste transfer station, once built, will be alongside our organic composting facility, noted below, near Belleville, Ontario, Canada.

Access to the waste transfer stations 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 transfer station, the distance to the disposal site, market rates for disposal costs and other general market factors.

pg. 24

Organic Composting Facility. Our organic composting facility, located near Belleville, Ontario Canada, has ECAs in place to accept up to 70,000 metric tonnes of waste annually and is currently in operation. Certain assets of the organic composting facility, including the ECAs for the waste transfer station, were acquired by the Company on September 15, 2017, from the court appointed receiver, BDO, for Astoria, under the APA. The Company charges tipping fees for the waste accepted at the organic composting facility based on arrangements in place with the customers and the type of waste accepted. Typical waste accepted includes, leaf and yard, biosolids, food, liquid and paper sludge. During 2018, tipping fees ranged from $23 ($30 CAD) to $63 ($80 CAD) per metric tonne.

Compost Sales. The Company also sells organic compost (screened and unscreened) to local customers. During 2018, the average selling price of the compost per metric tonne was approximately $16 ($21 CAD).

LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 2018, the Company had a cash balance of $58,446 (December 31, 2017-$126,117) and current debt obligations in the amount of $2,739,387 (December 31, 2017-$2,664,905). As at June 30, 2018, the Company had a working capital deficit of $2,452,148 (December 31, 2017-$2,238,911). The Company does not currently have sufficient funds to satisfy the current debt obligations. Should the Company’s creditors seek or demand payment, the Company does not have the resources to pay or satisfy any such claims currently. Subsequent to June 30, 2018, PACE and the Company agreed to re-finance the outstanding debt and to amortize such debt over a period of twenty years.

The Company’s total assets at June 30, 2018 were $4,107,948 and total current liabilities were $2,739,387. Significant losses from operations have been incurred since inception and there is an accumulated deficit of $6,970,848 as of June 30, 2018. Continuation as a going concern is dependent upon generating significant new revenue and generating external capital and securing debt to achieve profitable operations while maintaining current fixed expense levels.

To pay current debt obligations 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 $2,739,387 in current liabilities, the Company estimates that approximately $5,000,000 must be raised to fund capital requirements and general corporate expenses for the next 12 months.

Effective January 1, 2017, the Company obtained a Line of Credit of up to $4,176,700 ($5,500,000 CAD) with PACE. The Line of Credit was to be advanced in tranches to allow for the funding of engineering, permitting, construction costs and equipment purchases for its BioGrid Project. On February 2, 2017, the company received the first and only advance in the amount of $1,215,040 ($1,600,000 CAD). The Line of Credit is due on February 2, 2019. The Line of Credit is now one of multiple credit facilities with PACE.

pg. 25

On July 27, 2018, the Company refinanced this credit facility at the PACE base rate of 7% plus 1.25% per annum, payable in monthly blended instalments of principal and interest of $3,722 ($4,901 CAD), commencing August 2, 2018, amortized over a twenty-year period and due September 2, 2022.

On July 27, 2018, the Company refinanced this credit facility at the PACE base rate of 7% plus 1.25% per annum, payable in monthly blended instalments of principal and interest of $324 ($427 CAD), commencing August 4, 2018, amortized over a twenty-year period and due September 4, 2022.

The shares pledged as security for the Line of Credit and the other credit facility also pertain to this corporate term loan.

pg. 26

Refer to notes 9, 10 and 13 to the interim condensed consolidated financial statements for details on the long-term debt, obligations under capital lease and commitments respectively, as at June 30, 2018.

CONSOLIDATED RESULTS OF OPERATIONS – FOR THE THREE-MONTH PERIOD ENDED JUNE 30, 2018 COMPARED TO THE THREE-MONTH PERIOD ENDED JUNE 30, 2017

		2018			2017
Revenue	$	227,423		$	-
Cost of sales		142,477			-
Operating expenses
Management compensation-stock-based compensation		1,582,500			82,500
Management compensation-fees		83,584			40,149
Interest expense		91,779			22,096
Professional fees		76,220			36,374
Rent and occupancy		34,716			13,752
Insurance		15,466			21,983
Office and administration		12,501			13,244
Repairs and maintenance		10,760			-
Filing fees		3,581			5,467
Directors compensation		774			13,200
Total operating expenses		1,911,881			248,765

Net loss	$	(1,826,935	)	$	(248,765	)

During the three-month period ended June 30, 2018, the Company generated $227,423 of revenue from its organic composting facility. No revenue was generated in the prior three-month period ended June 30, 2017.The Company’s cost of sales in connection with this revenue totaled $142,477, primarily depreciation, direct wages and benefits, equipment rental, delivery, repairs and maintenance and utilities.

The net loss for the three-month period ended June 30, 2018 was $1,826,935, significantly higher than the net loss of $248,765 in the prior three-month period ended June 30, 2017, primarily due to the increase in management compensation, interest expense and professional fees, explained further below, offset by the increase in gross profit from the organic composting facility operations.

Operating expenses increased by $1,663,116, from $248,765 in the prior three-month period ended June 30, 2017 to $1,911,881 for the current three-month period ended June 30, 2018. This was primarily due to the increase in management compensation, interest expense and professional fees.

Management compensation increased by $1,543,435, from $122,649 in the prior three-month period ended June 30, 2017 to $1,666,084 in the current three-month period ended June 30, 2018, as a result of both an increase in the management compensation charged by the President and the CEO, beginning January 1, 2018, the recognition of the executive compensation for the President on the issuance of 1,000,000 common shares of the Company in exchange for 1,000,000 RSUs totaling $1,000,000, as approved by the Board on May 17, 2018 and the recognition of the executive compensation for the 1,000,000 RSUs which are to vest January 1, 2019, in the amount of $500,000

Interest expense increased by $69,683 from $22,096 in the prior three-month period ended June 30, 2017 to $91,779 for the current three-month period ended June 30, 2018, primarily as a result of the new corporate term loan obtained by the Company on September 15, 2017, for its organic composting facility.

Insurance decreased by $6,517 from $21,983 in the prior three-month period ended June 30, 2017 to $15,466 for the current three-month period ended June 30, 2018, primarily due to a lower premium for directors’ and officers’ insurance.

Professional fees increased by $39,846, from $36,374 in the prior three-month period ended June 30, 2017 to $76,220 in the current three-month period ended June 30, 2018, primarily from increases in audit and accounting services of $37,103, an increase for legal fees of $13,649 incurred in connection with the Company’s claim it launched against a third party, related to the purchase of certain assets of the organic composting facility on September 15, 2017, an increase in legal fees of $815 in connection with the Advances Water Technology Program offset by the absence of legal fees in connection with the Company’s Form S-4 filings in the prior three-month period ended June 30, 2017.

pg. 27

Rent and occupancy increased by $20,964, from $13,752 in the prior three-month period ended June 30, 2017 to $34,716 for the current three-month period ended June 30, 2018, due to the rent and occupancy costs associated with the Company’s new organic composting facility of $14,021 and additional rent and occupancy costs of $6,943 for the Company’s Toronto office location.

Office and administration decreased insignificantly by $743.

Repairs and maintenance of $10,760, is primarily related to costs associated with the premises of the Company’s organic composting facility.

Director’s compensation decreased by $12,426, from $13,200 for the prior three-month period ended June 30, 2017 to $774 for the current three-month period ended June 30, 2018. The current expense relates to fees charged by the Company’s audit committee chairman and the prior period’s charge relates to the Company’s issuance of 20,000 common shares each to two new directors, determined to be valued at $13,200, based on recent private placement.

CONSOLIDATED RESULTS OF OPERATIONS – FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2018 COMPARED TO THE SIX-MONTH PERIOD ENDED JUNE 30, 2017

		2018			2017
Revenue	$	360,144		$	-
Cost of sales		324,417			-
Operating expenses
Financing costs		-			882,153
Management compensation-stock-based compensation		1,665,000			165,000
Management compensation-fees		173,758			80,946
Interest expense		177,019			42,686
Professional fees		137,042			88,359
Rent and occupancy		68,917			25,178
Office and administration		63,585			32,942
Insurance		30,585			36,949
Repairs and maintenance		18,769			-
Filing fees		10,039			9,356
Directors compensation		1,565			24,800
Contribution to Advanced Water Technology Program		-			71,017
Total operating expenses		2,346,279			1,459,386

Net loss	$	(2,310,552	)	$	(1,459,386	)

During the six-month period ended June 30, 2018, the Company generated $360,144 of revenue from its organic composting facility. No revenue was generated in the prior six-month period ended June 30, 2017. The Company’s cost of sales in connection with this revenue totaled $324,417, primarily depreciation, direct wages and benefits, equipment rental, delivery, repairs and maintenance and utilities.

The net loss for the six-month period ended June 30, 2018 was $2,310,552, significantly higher than the net loss of $1,459,386 in the prior six-month period ended June 30, 2017, primarily due to the increase in management compensation, interest expense, professional fees, rent and occupancy and office and administration, offset by reductions in financing costs, directors’ compensation and the contribution to the Advanced Water Technology Program, explained further below. The Company also generated a gross profit of $35,727 from its organic composting facility operations.

Operating expenses increased by $886,893, from $1,459,386 in the prior six-month period ended June 30, 2017 to $2,346,279 in the current six-month period ended June 30, 2018. This was primarily due to the increase in management compensation, interest expense, professional fees, rent and occupancy and office and administration, offset by reductions in financing costs, directors’ compensation and the contribution to the Advanced Water Technology Program, explained further below.

Management compensation increased by $1,592,812, from $245,946 in the prior six-month period ended June 30, 2017 to $1,838,758 in the current six-month period ended June 30, 2018, as a result of both an increase in the management compensation charged by the President and the CEO, beginning January 1, 2018, the recognition of the executive compensation for the President on the issuance of 1,000,000 common shares of the Company in exchange for 1,000,000 RSUs totaling $1,000,000, as approved by the Board on May 17, 2018 and the recognition of the executive compensation for the 1,000,000 RSUs which are to vest January 1, 2019, in the amount of $500,000.

Interest expense increased by $134,333 from $42,686 in the prior six-month period ended June 30, 2017 to $177,019 in the current six-month period ended June 30, 2018, primarily as a result of the new corporate term loan obtained by the Company on September 15, 2017, for its organic composting facility.

pg. 28

Professional fees increased by $48,683, from $88,359 in the prior six-month period ended June 30, 2017 to $137,042 in the current six-month period ended June 30, 2018, primarily from increases in audit and accounting services of $42,336, an increase for legal fees of $34,848 incurred in connection with the Company’s claim it launched against a third party, related to the purchase of certain assets of the organic composting facility on September 15, 2017, an increase in legal fees of $872 in connection with the Advanced Water Technology Program offset by the absence of legal fees in connection with the Company’s Form S-4 filings and other consulting fees of $29,373 in the prior six-month period ended June 30, 2017.

Rent and occupancy increased by $43,739, from $25,178 in the prior six-month period ended June 30, 2017 to $68,917 in the current six-month period ended June 30, 2018, due to the rent and occupancy costs associated with the Company’s new organic composting facility of $36,420 and additional rent and occupancy costs of $7,319 for the Company’s Toronto location.

Office and administration increased by $30,643 from $32,942 in the prior six-month period ended June 30, 2017 to $63,585 in the current six-month period ended March 31, 2018. The increase is primarily the result of new expenses incurred at the Company’s organic composting facility, including administrative wages of $12,818, automotive expenses and travel of $6,937, depreciation of $3,897 and other various expenses.

Insurance decreased by $6,364, from $36,949 for the prior six-month period ended June 30, 2017 to $30,585 in the current six-month period ended June 30, 2018, primarily due to a reduction in the premium for the Company’s directors’ and officers’ liability insurance. The Company’s premiums for the pollution coverage and the general and equipment liability for the organic composting facility was comparable to the premium paid for similar coverage for the Company’s BioGrid Project which it continued to incur in the prior period.

Repairs and maintenance of $18,769 related primarily to costs associated with the premises of the Company’s new organic composting facility.

Director’s compensation decreased by $23,235, from $24,800 in the prior six-month period ended June 30, 2017 to $1,565 in the current six-month period ended June 30, 2018. The current expense relates to fees charged by the Company’s audit committee chairman and the prior period’s charge relates to the Company’s issuance of 20,000 common shares each to four new directors, determined to be valued at $24,800, based on recent private placement.

The Contribution to the Advanced Water Technology Program in the prior six-month period ended June 30, 2017 was not repeated in the current six-month period ended June 30, 2018.

The Company’s 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 June 30, 2018, the Company had a working capital deficit of $2,452,148 (December 31, 2017-$2,238,911), incurred a net loss of $2,310,552 (2017-$1,459,386) for the six months ended June 30, 2018 and had an accumulated deficit of $6,970,848 (December 31, 2017-$4,660,296) 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 PACE and upon achieving profitable operations. Management believes that the Company will be able to obtain the necessary funding by equity or debt; however, there is no assurance of funding being available or available on acceptable terms. Subsequent to June 30, 2018, the long-term debt with PACE was refinanced. Realization values may be substantially different from carrying values as shown.

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.

pg. 29

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 judgments 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, valuation of asset acquisition, impairments of long-lived and intangible assets, deferred income tax assets and related valuation allowance, environmental remediation costs and stock-based compensation. 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

From time to time the Company may grant options and/or warrants to management, directors, employees and consultants. The Company recognizes compensation expense at fair value. Under this method, the fair value of each warrant is estimated on the date of the grant and amortized over the vesting period, with the resulting amortization credited to paid in capital. The fair value of each grant is determined using the Black-Scholes option-pricing model. Consideration paid upon exercise of stock options and/or warrants is recorded in equity as share capital.

Long-Lived Asset Impairments

We assess our long-lived assets for impairment as required under the applicable accounting standards. If necessary, impairments are recorded in (income) expense from divestitures, asset impairments and unusual items, net in our Consolidated Statements of Operations and Comprehensive Loss.

Indefinite-Lived Intangible Assets

At least annually, and more frequently if warranted, we assess the indefinite-lived intangible assets, including the goodwill of our reporting units for impairment using Level 3 inputs.

RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS

The adoption of ASC 606 had no impact on the Company’s interim condensed consolidated balance sheets as of January 1, 2018.

pg. 30

1.	The award’s fair value (or calculated value or intrinsic value if those measurement methods are used).
2.	The award’s vesting conditions.
3.	The award’s classification as an equity or liability instrument.

The adoption of ASC 606 had no impact on the Company’s interim condensed consolidated balance sheets as of January 1, 2018.

RECENT ACCOUNTING PRONOUNCEMENTS

From time to time, new accounting pronouncements are issued by 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 will not have a material impact on the Company’s financial position, results of operations or cash flows.

EQUITY

As at June 30, 2018, the Company had 39,913,031 common shares issued and outstanding. At the date of this filing, the Company had 40,040,031 common shares issued and outstanding.

STOCK OPTIONS AND WARRANTS

Effective January 1, 2017, the Company’s CEO was granted 3,000,000 RSUs. On January 1, 2018, 1,000,000 RSUs were exchanged into 1,000,000 common stock. On May 17, 2018, at a meeting of the Board, the Board approved an amendment to the President’s consulting agreement, to include the granting of 3,000,000 RSUs to the President on the same terms and conditions as those granted to the CEO. Effective May 17, 2018, 1,000,000 RSUs were exchanged into 1,000,000 common stock. Based on recent private placement pricing, the common stock issued on exchange for the RSUs, were determined to be valued at $1,000,000.

The RSUs for the remaining two installments are to vest annually on January 1, 2019 and 2020. The Company has recorded a stock compensation reserve of $665,000 as at June 30, 2018, representing one sixth of the total value of the RSUs of $3,990,000, based on private placement pricing at the time of the grant for each of the RSUs.

pg. 31

The Company has no other stock options or warrants outstanding as at June 30, 2018 and as of the date of this filing.

RELATED PARTY TRANSACTIONS

The Company transacts with related parties in the normal course of business.

And, during the six-month period ended June 30, 2018, the Company sold $15,728 ($20,095 CAD) of compost product to LFGC.

For the six-month period ended June 30, 2018, the Company recognized management compensation expense of $665,000 (2017-$165,000) on this award, representing one sixth of the total value of the awards of $3,990,000, based on recent private placement pricing, on the dates of the awards.

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.

pg. 32

Our disclosure controls and procedures are designed to provide reasonable, not absolute, assurance that the objectives of our disclosure control system are met. Because of 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 due primarily to the small size of the Company and the lack of a segregation of duties.

Notwithstanding this material weakness, 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

There was no change in our internal control over financial reporting during our most recently completed fiscal quarter that has materially affected or is reasonably likely to materially affect our internal control over financial reporting.

PART II: OTHER INFORMATION

Item 1A. Legal Proceedings.

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. Except as set forth in this Form 10-Q, we are not currently aware of any such legal proceedings or claims that we believe will have, individually or in the aggregate, a material adverse effect on our business, financial condition, or operating results.

On December 15, 2017, the Company filed a motion record in the Ontario Superior Court of Justice against the Business Development Bank of Canada, the applicant and Astoria Organic Matters Ltd. and Astoria Organic Matters Canada LP, together, the respondents, in the amount of $573,651 ($755,400 CAD) in connection with the Company’s purchase of certain assets from the court appointed receiver for Astoria, BDO Canada Limited on September 15, 2017. The basis for the claim is for the Company’s costs to process biosolids stored onsite that amounted to approximately more than 10 times the amount permitted to be stored by conditions in the Environmental Compliance Approval for the site. The processing costs are paid when the biosolids are received onsite. Costs to process are incurred over the 12 weeks it takes to incorporate the biosolids into a compost product. The motion is scheduled to be heard on September 21, 2018.

Item 1B. 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 six months ended June 30, 2018, the Company issued 330,000 common shares for net proceeds of $304,500 and 190,000 common shares on a private placement received prior to December 31, 2017, for working capital purposes.

In addition, the Company issued a total of 2,000,000 common stock to executive officers on the exchange of 2,000,000 restricted stock units.

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.

pg. 33

Item 5. Other Information.

None.

Item 6. Exhibits.

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

Exhibit No.	Description
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1	Certification of the Chief Executive Officer and the Chief Financial Officer pursuant to U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
101.INS	XBRL Instance Document*
101.SCH	XBRL Taxonomy Extension Schema Document*
101.CAL	XBRL Taxonomy Calculation Linkbase Document*
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document*
101.LAB	XBRL Taxonomy Label Linkbase Document*
101.PRE	XBRL Taxonomy Presentation Linkbase Document*

*Filed herewith.
**Furnished herewith.

pg. 34

SIGNATURES

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

	SUSGLOBAL ENERGY CORP.

August 13, 2018	By:	/s/ Gerald Hamaliuk
		Gerald Hamaliuk
		Chief Executive Officer


August 13, 2018	By:	/s/ Ike Makrimichalos
		Ike Makrimichalos
		Chief Financial Officer (Principal Financial and Accounting
		Officer)

pg. 35

EX-31.1 2 exhibit31-1.htm EXHIBIT 31.1 SusGlobal Energy Corp.: Exhibit 31.1 - Filed by newsfilecorp.com

Exhibit 31.1

CERTIFICATION

I, Gerald Hamaliuk, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of SusGlobal Energy Corp. (the “Company”);

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

3.	Based on my knowledge, the 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;

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

5.	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: August 13, 2018

	By:	/s/ Gerald Hamaliuk
		Gerald Hamaliuk
		Chief Executive Officer
		(Principal Executive Officer)

EX-31.2 3 exhibit31-2.htm EXHIBIT 31.2 SusGlobal Energy Corp.: Exhibit 31.2 - Filed by newsfilecorp.com

Exhibit 31.2

CERTIFICATION

I, Ike Makrimichalos, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of SusGlobal Energy Corp. (the “Company”);

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

3.	Based on my knowledge, the 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;

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

5.	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: August 13, 2018

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

EX-32.1 4 exhibit32-1.htm EXHIBIT 32.1 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, Gerald Hamaliuk, 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:

	1.	The Registrant’s Quarterly Report on Form 10-Q for the period ended June 30, 2018, 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

	2.	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: August 13, 2018

	By:	/s/ Gerald Hamaliuk
		Gerald Hamaliuk
		Chief Executive Officer
		(Principal Executive Officer)

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

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-127079

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. SusGlobal is a renewable energy company focused on acquiring, developing and monetizing a global portfolio of proprietary technologies in the waste to energy application. These interim condensed consolidated financial statements of SusGlobal and its wholly-owned subsidiaries, SusGlobal Energy Canada Corp., SusGlobal Energy Canada I Ltd. and SusGlobal Energy Belleville Ltd. (“SGECI”) (together, the “Company”), have been prepared following generally accepted accounting principles in the United States (“US GAAP”), and are expressed in United States Dollars. The Company’s functional currency is the Canadian Dollar (“CAD”). 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 June 30, 2018, the Company had a working capital deficit of $2,452,148 (December 31, 2017-$2,238,911), incurred a net loss of $2,310,552 (2017-$1,459,386) for the six months ended June 30, 2018 and had an accumulated deficit of $6,970,848 (December 31, 2017-$4,660,296) 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 PACE Savings & Credit Union Limited (“PACE”) and upon achieving profitable operations. Management believes that the Company will be able to obtain the necessary funding by equity or debt; however, there is no assurance of funding being available or available on acceptable terms. Subsequent to June 30, 2018, the long-term debt with PACE was refinanced (see note 15(a)). 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.

2452148 2238911 2310552 1459386 6970848 4660296

3. Significant Accounting Policies These interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company for the years ended December 31, 2017 and 2016. Recently Adopted Accounting Pronouncements: On January 1, 2018, the Company adopted accounting standards (“ASU”) update No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash”. The Company now includes restricted cash as part of cash and cash equivalents. The Company has adopted this policy on a retrospective basis. The reference to restricted cash included in the interim condensed consolidated statements of cash flow for the three-month period ended March 31, 2017, has been reclassified to cash and cash equivalents at the end of this prior period. On January 1 2018, the Company adopted ASU No. 2014-09, Revenue from Contracts with Customers, which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers that supersedes most current revenue recognition guidance. The updated guidance, and subsequent clarifications, collectively referred to as accounting standards codification (“ASC”) 606, require an entity to recognize revenue when it transfers control of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. In addition, the guidance requires the disclosure of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The Company adopted this standard, utilizing the modified retrospective approach, with the cumulative effect of initially applying the new standard recognized in deficit. Accordingly, comparative prior period information has not been restated and continues to be reported under that accounting standard. The adoption of ASC 606 had no impact on the Company’s interim condensed consolidated balance sheets as of January 1, 2018. On January 1, 2018, the Company adopted ASU No. 2017, Compensation-Stock Compensation : Topic 718: Scope of Modification Accounting (ASU 2017-09) to provide clarity and reduce both the (1) diversity in practice and (2) cost and complexity when changing the terms or conditions of share-based payment awards. Under ASU 2017-09, modification accounting is required to be applied unless all of the following are the same immediately before and after the change: <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times, serif;" width="100%"> <tr> <td valign="top" width="5%">1.</td> <td> The award’s fair value (or calculated value or intrinsic value if those measurement methods are used). </td> </tr> <tr> <td valign="top" width="5%">2.</td> <td> The award’s vesting conditions. </td> </tr> <tr> <td valign="top" width="5%">3.</td> <td> The award’s classification as an equity or liability instrument. </td> </tr> </table> The adoption of ASC 606 had no impact on the Company’s interim condensed consolidated balance sheets as of January 1, 2018.

Recently Adopted Accounting Pronouncements: On January 1, 2018, the Company adopted accounting standards (“ASU”) update No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash”. The Company now includes restricted cash as part of cash and cash equivalents. The Company has adopted this policy on a retrospective basis. The reference to restricted cash included in the interim condensed consolidated statements of cash flow for the three-month period ended March 31, 2017, has been reclassified to cash and cash equivalents at the end of this prior period. On January 1 2018, the Company adopted ASU No. 2014-09, Revenue from Contracts with Customers, which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers that supersedes most current revenue recognition guidance. The updated guidance, and subsequent clarifications, collectively referred to as accounting standards codification (“ASC”) 606, require an entity to recognize revenue when it transfers control of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. In addition, the guidance requires the disclosure of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The Company adopted this standard, utilizing the modified retrospective approach, with the cumulative effect of initially applying the new standard recognized in deficit. Accordingly, comparative prior period information has not been restated and continues to be reported under that accounting standard. The adoption of ASC 606 had no impact on the Company’s interim condensed consolidated balance sheets as of January 1, 2018. On January 1, 2018, the Company adopted ASU No. 2017, Compensation-Stock Compensation : Topic 718: Scope of Modification Accounting (ASU 2017-09) to provide clarity and reduce both the (1) diversity in practice and (2) cost and complexity when changing the terms or conditions of share-based payment awards. Under ASU 2017-09, modification accounting is required to be applied unless all of the following are the same immediately before and after the change: <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times, serif;" width="100%"> <tr> <td valign="top" width="5%">1.</td> <td> The award’s fair value (or calculated value or intrinsic value if those measurement methods are used). </td> </tr> <tr> <td valign="top" width="5%">2.</td> <td> The award’s vesting conditions. </td> </tr> <tr> <td valign="top" width="5%">3.</td> <td> The award’s classification as an equity or liability instrument. </td> </tr> </table> The adoption of ASC 606 had no impact on the Company’s interim condensed consolidated balance sheets as of January 1, 2018.

4. Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by 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 will not have a material impact on the Company’s financial position, results of operations or cash flows. In February 2016, the FASB issued ASU No. 2016-02, “Leases” (Topic 842 ) . The standard requires lessees to recognize the assets and liabilities that arise from leases on the balance sheet. ASU 2016-02 requires the recognition on the balance sheet of a lease liability to make lease payments by lessees and a right-of-use asset representing its right to use the underlying asset for the lease term. The new guidance will also require significant additional disclosure about the amount, timing and uncertainty of cash flows from leases. The new guidance is effective for annual and interim reporting periods beginning after December 15, 2018 (January 1, 2019 for the Company). The amendments should be applied at the beginning of the earliest period presented using a modified retrospective approach with earlier application permitted as of the beginning of an interim or annual reporting period. In March 2018, the FASB approved a new, optional transition method that will give companies the option to use the effective date as the date of initial application on transition. The Company plans to elect this transition method, and as a result, the Company will not adjust the comparative financial information or make the new required lease disclosures for periods before the effective date. The Company anticipates the adoption of this new standard will result in a significant increase in lease-related assets and liabilities in the consolidated balance sheet. As the impact of this standard is non-cash in nature, the Company does not anticipate its adoption having an impact on the Company’s consolidated statement of cash flows. The Company is currently evaluating the impact of adopting ASU No. 2016-02 on the consolidated statement of income. In January 2017, the FASB issued ASU No. 2017-04, “Intangibles-Goodwill and Other ( Topic 350) - Simplifying the Test for Goodwill Impairment”. 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 standard is to be effective for interim and annual periods beginning after December 15, 2019 and early adoption is permitted. The Company is currently evaluating the impact of adopting ASU No. 2017-04.

5. Financial Instruments The carrying value of cash and cash equivalents, trade receivables, certain deposits under prepaid expenses and deposits, accounts payable and accrued liabilities approximated their fair values as of June 30, 2018 and December 31, 2017 due to their short-term nature. The carrying value of the long-term debt, obligations under capital lease and loans payable to related parties approximated their fair value due to their market interest rates. Interest, Credit and Concentration Risk In the opinion of management, the Company is exposed to significant interest rate risk on its variable corporate term loan of $3,899,022 ($5,134,345 CAD) (December 31, 2017-$4,161,435 ; $5,220,719 CAD). As at June 30, 2018, the Company is exposed to concentration risk as it had six customers (December 31, 2017-four customers) representing greater than 5% of total trade receivables and six customers (December 31, 2017-four customers) represented 80% (December 31 2017- 91%) 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 63% ( 25% and 38%) (June 30, 2017- nil) 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. The Company intends to continue to raise funds through the issuance of common shares under a private placement, to ensure it has sufficient access to cash to meet current and foreseeable financial requirements. 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. Currency Risk Although the Company’s functional currency is the CAD, the Company realizes a portion of its expenses in USD. Consequently, certain assets and liabilities are exposed to foreign currency fluctuations. As at June 30, 2018, $7,002 (2017-$6,057) of the Company’s net monetary liabilities were denominated in USD. The Company has not entered into any hedging transactions to reduce the exposure to currency risk.

3899022 5134345 4161435 5220719 0.05 0.80 0.91 0.10 0.63 0.25 0.38 0 7002 6057

6. Intangible Assets <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times, serif;" width="100%"> <tr valign="top"> <td align="left" nowrap="nowrap" valign="bottom"> </td> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="right" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%"> June 30, 2018 </td> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="right" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%">December 31, 2017</td> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff" valign="bottom"> Technology license (net of accumulated amortization of $631 ( 2017 - $531)) </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td> <td align="right" bgcolor="#e6efff" valign="bottom" width="12%">   1,370 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td> <td align="right" bgcolor="#e6efff" valign="bottom" width="12%"> 1,470 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" valign="bottom"> Environmental compliance approvals-indefinite life- $182,700 CAD </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%"> 138,742 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%"> 145,630 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff" valign="bottom"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="12%"> 140,112 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="12%"> 147,100 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td> </tr> </table> On May 6, 2015, the Company acquired an exclusive license from Syngas SDN BHD (“Syngas”), a Malaysian company to use Syngas intellectual property within North America for a period of five years for $1 consideration, renewable every five years upon written request. Syngas manufactures equipment that produces liquid transportation fuel from plastic waste material. The Company issued 20,000 common shares of the Company to an introducing party, determined to be valued at $2,000. On September 15, 2017, the Company acquired the environmental approvals on the purchase of certain assets of Astoria from BDO Canada Limited (‘BDO”) under an asset purchase agreement (the “APA”).

631

2017

531

1370

1470

182700

138742

145630

1 20000 2000

7 . Long-lived Assets, net <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times, serif;" width="100%"> <tr valign="top"> <td align="left" nowrap="nowrap" valign="bottom"> </td> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%"> </td> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="right" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%"> June 30, 2018 </td> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="right" colspan="4" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="23%">December 31, 2017</td> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" nowrap="nowrap" valign="bottom"> </td> <td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td> <td align="right" nowrap="nowrap" valign="bottom" width="10%"> Cost </td> <td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td> <td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td> <td align="right" nowrap="nowrap" valign="bottom" width="10%"> Accumulated </td> <td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td> <td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td> <td align="right" nowrap="nowrap" valign="bottom" width="10%"> Net book value </td> <td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td> <td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td> <td align="right" nowrap="nowrap" valign="bottom" width="10%">Net book value</td> <td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" nowrap="nowrap" valign="bottom"> </td> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%"> </td> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="right" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%"> depreciation </td> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%"> </td> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%"> </td> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff" valign="bottom">Composting buildings</td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> 2,233,208 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> 107,123 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> 2,126,085 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td> <td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> 2,302,651 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" valign="bottom">Gore cover system</td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="10%"> 890,017 </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="10%"> 70,460 </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="10%"> 819,557 </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="10%"> 906,953 </td> <td align="left" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff" valign="bottom">Driveway and paving</td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> 351,982 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> 22,292 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> 329,690 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> 360,835 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" valign="bottom">Machinery and equipment</td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="10%"> 46,323 </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="10%"> 10,717 </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="10%"> 35,606 </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="10%"> 44,667 </td> <td align="left" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff" valign="bottom">Equipment under capital lease</td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> 418,642 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> 65,426 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> 353,216 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> 229,561 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" valign="bottom">Office trailer</td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="10%"> 6,455 </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="10%"> 1,533 </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="10%"> 4,922 </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="10%"> 6,182 </td> <td align="left" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff" valign="bottom">Computer equipment</td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> 6,712 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> 2,840 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> 3,872 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> 3,368 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" valign="bottom">Computer software</td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="10%"> 6,986 </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="10%"> 2,765 </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="10%"> 4,221 </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="10%"> 6,264 </td> <td align="left" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff" valign="bottom">Automotive equipment</td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> 1,519 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> 304 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> 1,215 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> 1,514 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" valign="bottom">Signage</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%"> 2,578 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%"> 365 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%"> 2,213 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%"> 2,593 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff" valign="bottom"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="10%"> 3,964,422 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="10%"> 283,825 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="10%"> 3,680,597 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="10%"> 3,864,588 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td> </tr> </table> Included above are certain assets of Astoria acquired from BDO under the APA, which closed on September 15, 2017. The purchase price for the purchased assets, described as an organic composting facility, including composting buildings, gore cover system, driveway and paving, certain machinery and equipment, an office trailer, certain computer equipment and computer software consisted of cash of $2,974,798 ($3,917,300 CAD) and 529,970 restricted common shares of the Company, determined to be valued at $529,970 ($700,000 CAD), based on recent private placement pricing. In addition, legal costs in connection with acquiring the assets of $22,215 ($29,253 CAD), are included in the cost of the composting buildings. The purchase price was allocated to the assets acquired based on their estimated relative fair value as at the date the assets were acquired.

<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times, serif;" width="100%"> <tr valign="top"> <td align="left" nowrap="nowrap" valign="bottom"> </td> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%"> </td> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="right" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%"> June 30, 2018 </td> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="right" colspan="4" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="23%">December 31, 2017</td> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" nowrap="nowrap" valign="bottom"> </td> <td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td> <td align="right" nowrap="nowrap" valign="bottom" width="10%"> Cost </td> <td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td> <td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td> <td align="right" nowrap="nowrap" valign="bottom" width="10%"> Accumulated </td> <td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td> <td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td> <td align="right" nowrap="nowrap" valign="bottom" width="10%"> Net book value </td> <td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td> <td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td> <td align="right" nowrap="nowrap" valign="bottom" width="10%">Net book value</td> <td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" nowrap="nowrap" valign="bottom"> </td> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%"> </td> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="right" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%"> depreciation </td> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%"> </td> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%"> </td> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff" valign="bottom">Composting buildings</td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> 2,233,208 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> 107,123 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> 2,126,085 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%">$</td> <td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> 2,302,651 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" valign="bottom">Gore cover system</td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="10%"> 890,017 </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="10%"> 70,460 </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="10%"> 819,557 </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="10%"> 906,953 </td> <td align="left" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff" valign="bottom">Driveway and paving</td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> 351,982 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> 22,292 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> 329,690 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> 360,835 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" valign="bottom">Machinery and equipment</td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="10%"> 46,323 </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="10%"> 10,717 </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="10%"> 35,606 </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="10%"> 44,667 </td> <td align="left" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff" valign="bottom">Equipment under capital lease</td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> 418,642 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> 65,426 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> 353,216 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> 229,561 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" valign="bottom">Office trailer</td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="10%"> 6,455 </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="10%"> 1,533 </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="10%"> 4,922 </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="10%"> 6,182 </td> <td align="left" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff" valign="bottom">Computer equipment</td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> 6,712 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> 2,840 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> 3,872 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> 3,368 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" valign="bottom">Computer software</td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="10%"> 6,986 </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="10%"> 2,765 </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="10%"> 4,221 </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="10%"> 6,264 </td> <td align="left" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff" valign="bottom">Automotive equipment</td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> 1,519 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> 304 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> 1,215 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="10%"> 1,514 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" valign="bottom">Signage</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%"> 2,578 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%"> 365 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%"> 2,213 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="10%"> 2,593 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff" valign="bottom"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="10%"> 3,964,422 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="10%"> 283,825 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="10%"> 3,680,597 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%">$</td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="10%"> 3,864,588 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td> </tr> </table>

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2126085

2302651

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70460

819557

906953

351982

22292

329690

360835

46323

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418642

65426

353216

229561

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1533

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2765

4221

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2578

365

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283825

2974798 3917300 529970 529970 700000 22215 29253

8. Related Party Transactions During the six-month period ended June 30, 2018, the Company incurred $70,443 ($90,000 CAD) (2017-$22,484 ; $30,000 CAD) in management fees expense with Travellers International Inc. (“Travellers”), an Ontario company controlled by a director and president of the Company (the “President”); $70,443 ($90,000 CAD) (2017-$22,484 ; $30,000 CAD) in management fees expense with Landfill Gas Canada Ltd. (“LFGC”), an Ontario company controlled by a director and chief executive officer of the Company (the “CEO”); $23,481 ($30,000 CAD) (2017-$17,987 ; $24,000 CAD) in management fees expense with the Company’s chief financial officer (the “CFO”); and $9,391 ($12,000 CAD) (2017-$17,987 ; $24,000 CAD) in management fees expense with the Company’s vice-president of corporate development (the “VPCD”). As at June 30, 2018, unpaid remuneration and unpaid expenses in the amount of $72,544 ($95,528 CAD) (December 31, 2017-$111,426 ; $139,789 CAD) is included in accounts payable and $202,969 ($267,275 CAD) (December 31, 2017-$102,935 ; $129,137 CAD) is included in accrued liabilities. In addition, during the six-month period ended June 30, 2018, the Company incurred interest expense of $4,818 ($6,156 CAD) (2017-$10,154 ; $13,548 CAD) on the outstanding loans from Travellers and $1,544 ($1,973 CAD) (2017-$nil ; $nil CAD) from the directors. As at June 30, 2018, interest of $5,892 ($7,759 CAD) (December 31, 2017-$22,120 ; $27,750 CAD) is included in accrued liabilities. During the six-month period ended June 30, 2018, the Company incurred $32,499 ($41,521 CAD) (2017-$11,426 ; $15,124 CAD) in rent paid under a rental agreement to Haute Inc. (“Haute”), an Ontario company controlled by the President. And, during the six-month period ended June 30, 2018, the Company sold $15,728 ($20,095 CAD) of compost product to LFGC. Furthermore, the Company granted the CEO 3,000,000 restricted stock units (“RSU”), under a consulting agreement effective January 1, 2017, determined to be valued at $990,000 based on recent private placement. On January 1, 2018, 1,000,000 RSUs were exchanged into 1,000,000 common stock. The RSUs for the remaining two installments are to vest annually on January 1, 2019 and 2020. On May 17, 2018, at a meeting of the board of directors (the “Board”), the Board approved an amendment to the President’s consulting agreement, to include the granting of 3,000,000 RSUs to the President on the same terms and conditions as those granted to the CEO. Effective May 17, 2018, 1,000,000 RSUs were exchanged into 1,000,000 common stock. Based on recent private placement pricing, the common stock issued on exchange for the RSUs, were determined to be valued at $1,000,000, disclosed as management compensation expense. For the six-month period ended June 30, 2018, the Company recognized management compensation expense of $665,000 (2017-$165,000) on these awards, representing one sixth of the total value of the awards of $3,990,000, based on recent private placement pricing, on the dates of the awards.

70443 90000 22484 30000 70443 90000 22484 30000 23481 30000 17987 24000 9391 12000 17987 24000 72544 95528 111426 139789 202969 267275 102935 129137 4818 6156 10154 13548 1544 1973 0 0 5892 7759 22120 27750 32499 41521 11426 15124 15728 20095 3000000 990000 1000000 1000000 3000000 1000000 1000000 1000000 665000 165000 3990000

9. Long-Term Debt <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times, serif;" width="100%"> <tr valign="top"> <td align="left" valign="bottom"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="9%"> Credit </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="9%"> Credit </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="9%"> Credit </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="9%"> Corporate </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="9%"> June 30, 2018 </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="9%"> December 31, 2017 </td> <td align="left" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" valign="bottom"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="9%"> Facility </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="9%"> Facility </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="9%"> Facility </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="9%"> Term </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="9%"> Total </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="9%"> Total </td> <td align="left" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" valign="bottom"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="left" valign="bottom" width="9%"> </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="left" valign="bottom" width="9%"> </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="left" valign="bottom" width="9%"> </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="9%"> Loan </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="left" valign="bottom" width="9%"> </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="left" valign="bottom" width="9%"> </td> <td align="left" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" valign="bottom"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="center" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="9%"> (a) </td> <td align="center" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td> <td align="center" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="center" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="9%"> (b) </td> <td align="center" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td> <td align="center" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="center" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="9%"> (c) </td> <td align="center" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td> <td align="center" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="center" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="9%"> (d) </td> <td align="center" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td> <td align="center" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="center" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="9%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="9%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff" valign="bottom"> Long-Term Debt </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="9%"> 779,247 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="9%"> 435,793 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="9%"> 37,970 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="9%"> 2,646,012 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="9%">   3,899,022 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="9%">   4,161,435 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" valign="bottom"> Current portion </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="9%"> (779,247 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> ) </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="9%"> (435,793 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> ) </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="9%"> (37,970 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> ) </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="9%"> (494,800 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> ) </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="9%"> (1,747,810 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> ) </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="9%"> (1,828,900 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> ) </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff" valign="bottom"> Long-term Debt </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="9%">   - </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="9%">   - </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="9%">   - </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="9%"> 2,151,212 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="9%">   2,151,212 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="9%">   2,332,535 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td> </tr> </table> <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times, serif;" width="100%"> <tr> <td valign="top" width="5%">(a)</td> <td> The credit facility bears interest at the PACE base rate of 6.75% plus 1.25% per annum, payable on a monthly basis, interest only, due February 2, 2019. The credit facility is secured by a business loan general security agreement, a $1,215,040 ($1,600,000 CAD) personal guarantee from the President and a charge against the Company’s premises lease. Also pledged as security are the shares of the wholly-owned subsidiaries, a pledge of 3,300,000 of the Company’s shares held by LFGC, 500,000 of the Company’s shares held by the CFO, 2,000,000 of the Company’s shares held by a director’s company and a limited recourse guarantee by each of these parties. The credit facility is fully open for prepayment at any time without notice or bonus. </td> </tr> <tr> <td width="5%"> </td> <td> </td> </tr> <tr> <td valign="top" width="5%">(b)</td> <td> On June 15, 2017, PACE loaned the Company $455,640 ($600,000 CAD) under a variable rate business loan agreement, for its bid for the purchase of the assets of Astoria on the same terms, conditions and security as noted above, except that the loan is due February 2, 2019. </td> </tr> <tr> <td width="5%"> </td> <td> </td> </tr> <tr> <td valign="top" width="5%">(c)</td> <td> On August 4, 2017, PACE loaned the Company $37,970 ($50,000 CAD) under a variable rate business loan agreement to satisfy an outstanding liability on the same terms, conditions and security as noted above, except that the loan is due February 4, 2019. </td> </tr> <tr> <td width="5%"> </td> <td> </td> </tr> <tr> <td valign="top" width="5%">(d)</td> <td> On September 13, 2017, PACE loaned the Company $2,828,117 ($3,724,147 CAD) under a corporate term loan. The funds were used for the purpose of acquiring certain assets of Astoria from the court appointed receiver on September 15, 2017. The corporate term loan bears interest at the PACE base rate of 6.75% plus 1.25% per annum, payable in monthly blended instalments of principal and interest of $57,383 ($75,564 CAD), due 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 $3,038,343 ($4,000,978 CAD) against the assets including inventory, accounts receivable and equipment. The corporate term loan also included an assignment of existing contracts included in the APA. </td> </tr> <tr> <td width="5%"> </td> <td> </td> </tr> <tr> <td width="5%"> </td> <td> The unpaid and previously deferred interest on the corporate term loan for the period from March 13, 2018 to June 13, 2018, in the amount of $52,659 ($69,343 CAD), has been capitalized and included in the principal balance of the corporate term loan. </td> </tr> <tr> <td width="5%"> </td> <td> </td> </tr> <tr> <td width="5%"> </td> <td> The shares of the wholly-owned subsidiaries and those shares held by the companies and the CFO noted under (a) above, also represent security for the corporate term loan. </td> </tr> </table> See subsequent events note 15(a) for details on the refinancing of all the outstanding long-term debt with PACE. Repayments are as follows: <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times, serif;" width="100%"> <tr valign="top"> <td align="left" bgcolor="#e6efff" valign="bottom"> For the six months ending December 31, 2018 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="12%"> 242,469 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" valign="bottom"> For the year ending December 31, 2019 </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="12%"> 1,767,935 </td> <td align="left" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff" valign="bottom"> For the year ending December 31, 2020 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="12%"> 557,664 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" valign="bottom"> For the year ending December 31, 2021 </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="12%"> 603,949 </td> <td align="left" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff" valign="bottom"> For the year ending December 31, 2022 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="12%"> 485,636 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" valign="bottom"> For the year ending December 31, 2023 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%"> 241,369 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff" valign="bottom"> Total </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="12%"> 3,899,022 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td> </tr> </table> For the six-month period ended June 30, 2018, $158,433 ($202,419 CAD) (2017-$32,532 ; $43,405 CAD) in interest was charged.

<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times, serif;" width="100%"> <tr valign="top"> <td align="left" valign="bottom"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="9%"> Credit </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="9%"> Credit </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="9%"> Credit </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="9%"> Corporate </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="9%"> June 30, 2018 </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="9%"> December 31, 2017 </td> <td align="left" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" valign="bottom"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="9%"> Facility </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="9%"> Facility </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="9%"> Facility </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="9%"> Term </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="9%"> Total </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="9%"> Total </td> <td align="left" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" valign="bottom"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="left" valign="bottom" width="9%"> </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="left" valign="bottom" width="9%"> </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="left" valign="bottom" width="9%"> </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="9%"> Loan </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="left" valign="bottom" width="9%"> </td> <td align="left" valign="bottom" width="2%"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="left" valign="bottom" width="9%"> </td> <td align="left" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" valign="bottom"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="center" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="9%"> (a) </td> <td align="center" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td> <td align="center" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="center" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="9%"> (b) </td> <td align="center" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td> <td align="center" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="center" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="9%"> (c) </td> <td align="center" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td> <td align="center" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="center" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="9%"> (d) </td> <td align="center" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td> <td align="center" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="center" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="9%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="9%"> </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff" valign="bottom"> Long-Term Debt </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="9%"> 779,247 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="9%"> 435,793 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="9%"> 37,970 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="9%"> 2,646,012 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="9%">   3,899,022 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="9%">   4,161,435 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" valign="bottom"> Current portion </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="9%"> (779,247 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> ) </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="9%"> (435,793 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> ) </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="9%"> (37,970 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> ) </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="9%"> (494,800 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> ) </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="9%"> (1,747,810 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> ) </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="9%"> (1,828,900 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> ) </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff" valign="bottom"> Long-term Debt </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="9%">   - </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="9%">   - </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="9%">   - </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="9%"> 2,151,212 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="9%">   2,151,212 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="9%">   2,332,535 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td> </tr> </table>

779247

435793

37970

2646012

3899022

4161435

779247

435793

37970

494800

2151212

<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times, serif;" width="100%"> <tr valign="top"> <td align="left" bgcolor="#e6efff" valign="bottom"> For the six months ending December 31, 2018 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="12%"> 242,469 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" valign="bottom"> For the year ending December 31, 2019 </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="12%"> 1,767,935 </td> <td align="left" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff" valign="bottom"> For the year ending December 31, 2020 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="12%"> 557,664 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" valign="bottom"> For the year ending December 31, 2021 </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="12%"> 603,949 </td> <td align="left" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff" valign="bottom"> For the year ending December 31, 2022 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="12%"> 485,636 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" valign="bottom"> For the year ending December 31, 2023 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%"> 241,369 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff" valign="bottom"> Total </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="12%"> 3,899,022 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td> </tr> </table>

242469

1767935

557664

603949

485636

241369

3899022

0.0675 0.0125 1215040 1600000 3300000 500000 2000000 455640 600000 37970 50000 2828117 3724147 0.0675 0.0125 57383 75564 3038343 4000978 52659 69343 158433 202419 32532 43405

10. Obligations under Capital Lease <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times, serif;" width="100%"> <tr valign="top"> <td align="left" nowrap="nowrap" valign="bottom"> </td> <td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td> <td align="left" nowrap="nowrap" valign="bottom" width="8%"> </td> <td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td> <td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td> <td align="left" nowrap="nowrap" valign="bottom" width="8%"> </td> <td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td> <td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td> <td align="left" nowrap="nowrap" valign="bottom" width="8%"> </td> <td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td> <td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td> <td align="right" nowrap="nowrap" valign="bottom" width="8%"> June 30, </td> <td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td> <td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td> <td align="right" nowrap="nowrap" valign="bottom" width="8%"> December 31, </td> <td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" nowrap="nowrap" valign="bottom"> </td> <td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td> <td align="left" nowrap="nowrap" valign="bottom" width="8%"> </td> <td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td> <td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td> <td align="left" nowrap="nowrap" valign="bottom" width="8%"> </td> <td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td> <td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td> <td align="left" nowrap="nowrap" valign="bottom" width="8%"> </td> <td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td> <td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td> <td align="right" nowrap="nowrap" valign="bottom" width="8%"> 2018 </td> <td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td> <td align="left" nowrap="nowrap" valign="bottom" width="1%"> </td> <td align="right" nowrap="nowrap" valign="bottom" width="8%"> 2017 </td> <td align="left" nowrap="nowrap" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" nowrap="nowrap" valign="bottom"> </td> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="8%"> (a) </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="8%"> (b) </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="center" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="8%"> (c) </td> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="right" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="8%"> Total </td> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="right" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="8%"> Total </td> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff" valign="bottom"> Obligations under Capital Lease </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="8%"> 4,746 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="8%"> 178,187 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="8%"> 164,613 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="8%"> 347,546 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="8%"> 219,784 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" valign="bottom"> Less: current portion </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="8%"> (4,746 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> ) </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="8%"> (47,513 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> ) </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="8%"> (37,562 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> ) </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="8%"> (89,821 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> ) </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="8%"> (59,204 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> ) </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff" valign="bottom"> Obligations under Capital Lease </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="8%">   - </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="8%"> 130,674 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="8%"> 127,051 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="8%"> 257,725 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="8%"> 160,580 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td> </tr> </table> <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times, serif;" width="100%"> <tr> <td valign="top" width="5%">(a)</td> <td> On September 21, 2017, the Company finalized a lease agreement for certain equipment for its organic composting facility in the amount of $13,046 ($17,180 CAD). The lease agreement is payable in monthly blended instalments of principal and interest of $983 ($1,268 CAD) at a monthly interest rate of 5.95%, due November 10, 2018. </td> </tr> <tr> <td width="5%"> </td> <td> </td> </tr> <tr> <td valign="top" width="5%">(b)</td> <td> On October 30, 2017, the Company finalized a lease agreement for certain equipment, which commenced on October 30, 2017, in the amount of $217,682 ($286,650 CAD). The lease agreement matures on September 30, 2021, with monthly blended instalments of principal and interest of $4,435 ($5,840 CAD), plus applicable harmonized sales taxes and an option to purchase the equipment for a final payment of $21,719 ($28,600 CAD), plus applicable harmonized sales taxes on October 31, 2021. The leasing agreement bears interest at the rate of 5.982% annually, compounded monthly. </td> </tr> <tr> <td width="5%"> </td> <td> </td> </tr> <tr> <td valign="top" width="5%">(c)</td> <td> On February 16, 2018, the Company finalized a lease agreement on certain equipment, which was on monthly rental. The lease is for a period of forty-eight months, with the first two monthly instalments of $7,594 ($10,000 CAD), plus applicable harmonized sales taxes, followed by forty-six monthly blended instalments of principal and interest of $3,887 ($5,118 CAD), plus applicable harmonized sales taxes. The Company has the option to purchase the equipment on the forty-ninth month for an amount of $18,742 ($24,680 CAD), plus applicable harmonized sales taxes. The leasing agreement bears interest at the rate of 6.15% annually, compounded monthly, due January 27, 2022. </td> </tr> </table> The lease liabilities are secured by the equipment under capital lease as described in note 7. Minimum lease payments are as follows: <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times, serif;" width="100%"> <tr valign="top"> <td align="left" bgcolor="#e6efff" valign="bottom"> For the six-month period ending December 31, 2018 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="12%"> 59,181 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" valign="bottom"> For the year ending December 31, 2019 </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="12%"> 99,860 </td> <td align="left" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff" valign="bottom"> For the year ending December 31, 2020 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="12%"> 99,860 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" valign="bottom"> For the year ending December 31, 2021 </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="12%"> 108,275 </td> <td align="left" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff" valign="bottom"> For the year ending December 31, 2022 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%"> 22,629 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" valign="bottom"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="12%"> 389,805 </td> <td align="left" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff" valign="bottom"> Less: imputed interest </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%"> (42,259 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%">)</td> </tr> <tr valign="top"> <td align="left" valign="bottom"> Total </td> <td align="left" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> $ </td> <td align="right" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="12%"> 347,546 </td> <td align="left" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td> </tr> </table> For the six-month period ended June 30, 2018, $9,738 ( 12,441 CAD) (December 31, 2017-$nil ; ($nil CAD)) in interest was charged.

4746

178187

164613

347546

219784

4746

47513

37562

130674

127051

<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times, serif;" width="100%"> <tr valign="top"> <td align="left" bgcolor="#e6efff" valign="bottom"> For the six-month period ending December 31, 2018 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="12%"> 59,181 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" valign="bottom"> For the year ending December 31, 2019 </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="12%"> 99,860 </td> <td align="left" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff" valign="bottom"> For the year ending December 31, 2020 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="12%"> 99,860 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" valign="bottom"> For the year ending December 31, 2021 </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="12%"> 108,275 </td> <td align="left" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff" valign="bottom"> For the year ending December 31, 2022 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%"> 22,629 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" valign="bottom"> </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="12%"> 389,805 </td> <td align="left" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff" valign="bottom"> Less: imputed interest </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%"> (42,259 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%">)</td> </tr> <tr valign="top"> <td align="left" valign="bottom"> Total </td> <td align="left" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> $ </td> <td align="right" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="12%"> 347,546 </td> <td align="left" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td> </tr> </table>

59181

99860

108275

22629

389805

42259

347546

13046 17180 983 1268 0.0595 217682 286650 4435 5840 21719 28600 0.05982 7594 10000 3887 5118 18742 24680 0.0615 9738 12441 0 0 11. Loans Payable to Related Parties <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times, serif;" width="100%"> <tr valign="top"> <td align="left" nowrap="nowrap" valign="bottom">  </td> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">  </td> <td align="right" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%"> June 30, 2018</td> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%">  </td> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">  </td> <td align="right" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%"> December 31, 2017</td> <td align="left" nowrap="nowrap" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%">  </td> </tr> <tr> <td valign="bottom">  </td> <td valign="bottom" width="1%">  </td> <td valign="bottom" width="12%">  </td> <td valign="bottom" width="2%">  </td> <td valign="bottom" width="1%">  </td> <td valign="bottom" width="12%">  </td> <td valign="bottom" width="2%">  </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff" valign="bottom"> Travellers International Inc.</td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> $</td> <td align="right" bgcolor="#e6efff" valign="bottom" width="12%"> 151,880 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%">  </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> $</td> <td align="right" bgcolor="#e6efff" valign="bottom" width="12%"> 15,942</td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%">  </td> </tr> <tr valign="top"> <td align="left" valign="bottom"> Directors</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">  </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%"> 56,955 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%">  </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">  </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%"> -</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%">  </td> </tr> <tr valign="top"> <td align="left" bgcolor="#e6efff" valign="bottom">  </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> $</td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="12%"> 208,835 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%">  </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> $</td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="12%"> 15,942</td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%">  </td> </tr> </table> Loan payable in the amount of $151,880 ($200,000 CAD) (December 31, 2017-$15,942 ; $20,000 CAD), owing to Travellers and bearing interest at the rate of 12% per annum, is due on demand and unsecured. As at June 30, 2018, $4,394 ($5,786 CAD) (December 31, 2017-$22,120 ; $27,750 CAD) in interest is included in accrued liabilities. During the six-month period ended June 30, 2018, three directors each loaned the Company $18,985 ($25,000 CAD). The loans bear interest at the rate of 12% per annum, are due on demand and unsecured. As at June 30, 2018, $1,498 ($1,973 CAD) (December 31, 2017-$nil ; $nil CAD) in interest is included in accrued liabilities. During the six-month period ended June 30, 2018, $6,362 ($8,129 CAD) (2017-$10,154 ; $13,548 CAD) in interest was charged on the loans payable to related parties.

151880

15942

56955

151880 200000 15942 20000 0.12 4394 5786 22120 27750 18985 25000 0.12 1498 1973 0 0 6362 8129 10154 13548

12. Capital Stock At June 30, 2018, the Company had 150,000,000 of common shares authorized with a par value of $.0001 per share and 39,913,031 (2017- 37,393,031) common shares issued and outstanding. During the six-month period ended June 30, 2018, the Company raised $304,500 (December 31, 2017-$497,374) cash on a private placement, net of share issue costs of $25,800 (2017-$48,100), on the issuance of 330,000 (December 31, 2017- 850,151) common shares of the Company. In addition, during the six-month period ended June 30, 2018, the Company issued 190,000 common shares of the Company, on $178,200 cash received on a private placement received prior to December 31, 2017, net of share issue costs of $11,800. During the prior year, on January 5, 2017 and January 30, 2017, the Company issued, in total, 1,620,000 common shares of the Company, determined to be valued at $469,800, based on recent private placement pricing,  to agents for their services in assisting in establishing the first credit facility with PACE. On each of January 30, 2017 and June 8, 2017, the Company issued a total of 40,000 common shares to two new directors, determined to be valued at $11,600 and $13,200 respectively, based on recent private placement pricing. For the six-month period ended June 30, 2018, the services provided by the directors was disclosed under directors’ compensation in the interim condensed consolidated statements of operations and comprehensive loss. On February 6, 2017, the Company issued 5,000 common shares and on August 23, 2017, the Company issued 4,000 common shares to a current employee for services and a new employee as an incentive to join the Company, respectively, determined to be valued at $1,450 and $4,000, respectively, based on recent private placement pricing and disclosed under office and administration in the interim condensed consolidated statements of operations and comprehensive loss. On May 9, 2017, the Company issued 15,000 common shares, on June 8, 2017, another 20,000 common shares and then on August 23, 2017, a further 20,000 common shares to consultants for their services, determined to be valued at $4,950, $6,600 and $20,000 respectively, based on recent private placement pricing. These services were disclosed under professional fees in the interim condensed consolidated statements of operations and comprehensive loss. On May 9, 2017, the Company issued 115,000 common shares on the exercise of the offer to acquire common shares at a price of $0.10 per common share by the VPCD. On September 5, 2017, the Company issued 5,000 common shares as compensation for a private placement, determined to be valued at $5,000. In addition, on September 11, 2017, the Company issued 529,970 common shares on the acquisition of assets, determined to be valued at $529,970 ($700,000 CAD), based on recent private placement pricing (see note 7). All non-cash transactions were valued based on the proceeds of a recent private placement. The Company also granted the CEO 3,000,000 restricted stock units (“RSU”), under a new consulting agreement effective January 1, 2017. The RSUs are to vest in three equal installments annually on January 1, 2018, 2019 and 2020. On January 1, 2018 the Company issued 1,000,000 common shares in exchange for 1,000,000 RSUs and recorded management compensation expense of $165,000 on the vesting of the RSUs. In addition, on May 17, 2018, at a meeting of the board of directors (the “Board”), the Board approved an amendment to the President’s consulting agreement, to include the granting of 3,000,000 RSUs to the President on the same terms and conditions as those granted to the CEO. Effective May 17, 2018, 1,000,000 RSUs were exchanged into 1,000,000 common stock. Based on recent private placement pricing, the common stock issued on exchange for the RSUs, were determined to be valued at $1,000,000. For the six-month period ended June 30, 2018, this management compensation of $1,000,000 and the vesting of the RSUs for the President in the amount of $500,000 are disclosed under management compensation expense totaling $1,500,000.

150000000 0.0001 39913031 37393031 304500 497374 25800 48100 330000 850151 190000 178200 11800 1620000 469800 40000 11600 13200 5000 4000 1450 4000 15000 20000 20000 4950 6600 20000 115000 0.10 5000 5000 529970 529970 700000 3000000 1000000 1000000 165000 3000000 1000000 1000000 1000000 1000000 500000 1500000

13 . Commitments <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times, serif;" width="100%"> <tr> <td valign="top" width="5%"> a)</td> <td> Effective January 1, 2017, new consulting agreements were finalized for the services of the President and for the CEO. The consulting agreements are for a period of three years, commencing January 1, 2017. For each of these two executive officers, the monthly fees are as follows: $3,797 ($5,000 CAD) for 2017 and $11,391 ($15,000 CAD) for 2018 and 2019. In addition, the CEO was granted 3,000,000 RSUs on January 1, 2017. On January 1, 2018, 1,000,000 RSUs were exchanged into 1,000,000 common stock. The RSUs of the remaining two installments are to vest annually on January 1, 2019 and 2020. On May 17, 2018, the President’s consulting agreement was amended by the Board to add the granting of 3,000,000 RSUs, on the same terms and conditions as those of the CEO. On this date, the President was issued 1,000,000 common stock on the exchange of 1,000,000 RSUs. The future minimum commitment under these consulting agreements, is as follows: </td> </tr> </table> <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times, serif;" width="100%"> <tr valign="top"> <td width="5%">  </td> <td align="left" bgcolor="#e6efff" valign="bottom"> For the six-month period ending December 31, 2018</td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> $</td> <td align="right" bgcolor="#e6efff" valign="bottom" width="12%"> 136,692 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%">  </td> </tr> <tr valign="top"> <td width="5%">  </td> <td align="left" valign="bottom"> For the year ending December 31, 2019</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">  </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%"> 273,384 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%">  </td> </tr> <tr valign="top"> <td width="5%">  </td> <td align="left" bgcolor="#e6efff" valign="bottom">  </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> $</td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="12%"> 410,076 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%">  </td> </tr> </table> <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times, serif;" width="100%"> <tr> <td valign="top" width="5%"> b)</td> <td> Effective January 1, 2017, the Company entered into a new three-year premises lease agreement with Haute at a monthly amount of $3,038 ($4,000 CAD) for 2017, $3,797 ($5,000 CAD) for 2018 and $4,556 ($6,000 CAD) for 2019. The Company is also 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. The future minimum commitment under this premises lease agreement is as follows: </td> </tr> </table> <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times, serif;" width="100%"> <tr valign="top"> <td width="5%">  </td> <td align="left" bgcolor="#e6efff" valign="bottom"> For the six-month period ending December 31, 2018</td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> $</td> <td align="right" bgcolor="#e6efff" valign="bottom" width="12%"> 22,782 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%">  </td> </tr> <tr valign="top"> <td width="5%">  </td> <td align="left" valign="bottom"> For the year ending December 31, 2019</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">  </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%"> 54,677 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%">  </td> </tr> <tr valign="top"> <td width="5%">  </td> <td align="left" bgcolor="#e6efff" valign="bottom">  </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> $</td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="12%"> 77,459 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%">  </td> </tr> </table> <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times, serif;" width="100%"> <tr> <td valign="top" width="5%"> c)</td> <td> The Company is a partner in a business led collaboration in the water sector, a program known as the Advanced Water Technologies (“AWT”) Program. This program is administered by the Southern Ontario Water Consortium to assist small and medium sized business in the Province of Ontario, Canada, leverage world-class research facility and academic expertise to develop and demonstrate water technologies for successful introduction to market. The Company’s commitment under this program is as follows: </td> </tr> </table> <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times, serif;" width="100%"> <tr valign="top"> <td valign="bottom" width="5%">  </td> <td align="left" bgcolor="#e6efff" valign="bottom"> For the six-month period ending December 31, 2018</td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> $</td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="12%"> 18,117 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%">  </td> </tr> </table> <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times, serif;" width="100%"> <tr> <td width="5%">  </td> <td> The Company has already completed and provided its commitment for the first year of the program which ended March 31, 2017, which consisted of professional fees of $7,217 ($9,432 CAD) and a contribution to the capital requirements of the program, totaling $71,017 ($94,000 CAD), for equipment to be used in the AWT Program and to be retained by Fleming College, an academic institution. The Company’s commitment in the amount of $19,947 ($25,217 CAD) for the second year of the program which ended March 31, 2018, is included under accounts payable in the interim condensed consolidated balance sheets and under office and administration in the amount of $12,006 ($15,178 CAD) and professional fees in the amount of $7,941 ($10,039 CAD) in the interim condensed statements of operations and comprehensive loss. </td> </tr> <tr> <td width="5%">  </td> <td>  </td> </tr> <tr> <td valign="top" width="5%"> d)</td> <td> The Company was assigned the land lease on the purchase of certain assets of Astoria. 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 $2,278 ($3,000 CAD) 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 by the landlord. 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. The future minimum commitment under this land lease (excluding any CPIadjustment) is as follows: </td> </tr> </table> <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times, serif;" width="100%"> <tr valign="top"> <td width="5%">  </td> <td align="left" bgcolor="#e6efff" valign="bottom"> For the six-month period ending December 31, 2018</td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> $</td> <td align="right" bgcolor="#e6efff" valign="bottom" width="12%"> 13,669 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%">  </td> </tr> <tr valign="top"> <td width="5%">  </td> <td align="left" valign="bottom"> For the year ending December 31, 2019</td> <td align="left" valign="bottom" width="1%">  </td> <td align="right" valign="bottom" width="12%"> 27,338 </td> <td align="left" valign="bottom" width="2%">  </td> </tr> <tr valign="top"> <td width="5%">  </td> <td align="left" bgcolor="#e6efff" valign="bottom"> For the year ending December 31, 2020</td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%">  </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="12%"> 27,338 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%">  </td> </tr> <tr valign="top"> <td width="5%">  </td> <td align="left" valign="bottom"> For the year ending December 31, 2021</td> <td align="left" valign="bottom" width="1%">  </td> <td align="right" valign="bottom" width="12%"> 27,338 </td> <td align="left" valign="bottom" width="2%">  </td> </tr> <tr valign="top"> <td width="5%">  </td> <td align="left" bgcolor="#e6efff" valign="bottom"> For the year ending December 31, 2022</td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%">  </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="12%"> 27,338 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%">  </td> </tr> <tr valign="top"> <td width="5%">  </td> <td align="left" valign="bottom"> For the year ending December 31, 2023</td> <td align="left" valign="bottom" width="1%">  </td> <td align="right" valign="bottom" width="12%"> 27,338 </td> <td align="left" valign="bottom" width="2%">  </td> </tr> <tr valign="top"> <td width="5%">  </td> <td align="left" bgcolor="#e6efff" valign="bottom"> Thereafter</td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">  </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%"> 280,219 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%">  </td> </tr> <tr valign="top"> <td width="5%">  </td> <td align="left" valign="bottom">  </td> <td align="left" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> $</td> <td align="right" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="12%"> 430,578 </td> <td align="left" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%">  </td> </tr> </table> <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times, serif;" width="100%"> <tr> <td valign="top" width="5%"> e)</td> <td> On April 9, 2018, a new one-year consulting agreement was finalized for the services of the Company’s CFO, effective April 1, 2018, at a monthly rate of $4,556 ($6,000 CAD). The future minimum commitment under this agreement is as follows: </td> </tr> </table> <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times, serif;" width="100%"> <tr valign="top"> <td valign="bottom" width="5%">  </td> <td align="left" bgcolor="#e6efff" valign="bottom"> For the six-month period ending December 31, 2018</td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> $</td> <td align="right" bgcolor="#e6efff" valign="bottom" width="12%"> 27,336 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%">  </td> </tr> <tr valign="top"> <td valign="bottom" width="5%">  </td> <td align="left" valign="bottom"> For the year ending December 31, 2019</td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%">  </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%"> 13,668 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%">  </td> </tr> <tr> <td valign="bottom" width="5%">  </td> <td bgcolor="#e6efff" valign="bottom">  </td> <td bgcolor="#e6efff" valign="bottom" width="1%">  </td> <td bgcolor="#e6efff" valign="bottom" width="12%">  </td> <td bgcolor="#e6efff" valign="bottom" width="2%">  </td> </tr> <tr valign="top"> <td valign="bottom" width="5%">  </td> <td align="left" valign="bottom">  </td> <td align="left" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> $</td> <td align="right" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="12%"> 41,004 </td> <td align="left" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%">  </td> </tr> </table> <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times, serif;" width="100%"> <tr> <td valign="top" width="5%"> f)</td> <td> PACE has provided the Company a letter of credit in favor of the Ministry of the Environment and Climate Change (“MOECC”) in the amount of $210,225 ($276,831 CAD) and, as a security, has 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 composting facility. The letter of credit is a requirement of the MOECC and is in connection with the financial assurance provided by the Company for it to be in compliance with the MOECCs environmental objectives. The MOECC regularly evaluates the Company’s organic composting facility to ensure compliance is adhered to and the letter of credit is subject to change by the MOECC. Since the fair value of the environmental remediation costs cannot be determined at this time, no estimate of such costs has been recorded in the accounts. As of June 30, 2018, the MOECC has not drawn on the letter of credit </td> </tr> </table>

<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times, serif;" width="100%"> <tr valign="top"> <td width="5%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom"> For the six-month period ending December 31, 2018 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="12%"> 136,692 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td width="5%"> </td> <td align="left" valign="bottom"> For the year ending December 31, 2019 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%"> 273,384 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td width="5%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="12%"> 410,076 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td> </tr> </table>

136692

273384

410076

<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times, serif;" width="100%"> <tr valign="top"> <td width="5%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom"> For the six-month period ending December 31, 2018 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="12%"> 22,782 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td width="5%"> </td> <td align="left" valign="bottom"> For the year ending December 31, 2019 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%"> 54,677 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td width="5%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom"> </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="12%"> 77,459 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td> </tr> </table>

22782

54677

77459

<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times, serif;" width="100%"> <tr valign="top"> <td valign="bottom" width="5%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom"> For the six-month period ending December 31, 2018 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="12%"> 18,117 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td> </tr> </table>

18117

<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times, serif;" width="100%"> <tr valign="top"> <td width="5%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom"> For the six-month period ending December 31, 2018 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="12%"> 13,669 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td width="5%"> </td> <td align="left" valign="bottom"> For the year ending December 31, 2019 </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="12%"> 27,338 </td> <td align="left" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td width="5%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom"> For the year ending December 31, 2020 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="12%"> 27,338 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td width="5%"> </td> <td align="left" valign="bottom"> For the year ending December 31, 2021 </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="12%"> 27,338 </td> <td align="left" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td width="5%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom"> For the year ending December 31, 2022 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="12%"> 27,338 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td width="5%"> </td> <td align="left" valign="bottom"> For the year ending December 31, 2023 </td> <td align="left" valign="bottom" width="1%"> </td> <td align="right" valign="bottom" width="12%"> 27,338 </td> <td align="left" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td width="5%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom"> Thereafter </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="right" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%"> 280,219 </td> <td align="left" bgcolor="#e6efff" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td width="5%"> </td> <td align="left" valign="bottom"> </td> <td align="left" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> $ </td> <td align="right" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="12%"> 430,578 </td> <td align="left" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td> </tr> </table>

13669

27338

280219

430578

<table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times, serif;" width="100%"> <tr valign="top"> <td valign="bottom" width="5%"> </td> <td align="left" bgcolor="#e6efff" valign="bottom"> For the six-month period ending December 31, 2018 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="1%"> $ </td> <td align="right" bgcolor="#e6efff" valign="bottom" width="12%"> 27,336 </td> <td align="left" bgcolor="#e6efff" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td valign="bottom" width="5%"> </td> <td align="left" valign="bottom"> For the year ending December 31, 2019 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="1%"> </td> <td align="right" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="12%"> 13,668 </td> <td align="left" style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" width="2%"> </td> </tr> <tr> <td valign="bottom" width="5%"> </td> <td bgcolor="#e6efff" valign="bottom"> </td> <td bgcolor="#e6efff" valign="bottom" width="1%"> </td> <td bgcolor="#e6efff" valign="bottom" width="12%"> </td> <td bgcolor="#e6efff" valign="bottom" width="2%"> </td> </tr> <tr valign="top"> <td valign="bottom" width="5%"> </td> <td align="left" valign="bottom"> </td> <td align="left" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="1%"> $ </td> <td align="right" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="12%"> 41,004 </td> <td align="left" style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" width="2%"> </td> </tr> </table>

27336

13668

41004

3797 5000 11391 15000 3000000 1000000 1000000 3000000 1000000 1000000 3038 4000 3797 5000 4556 6000 7217 9432 71017 94000 19947 25217 12006 15178 7941 10039 13.88 2278 3000 4556 6000 210225 276831

14. Economic Dependence The Company generated 63% of its revenue from two customers. The Company’s ability to continue operations is dependent on continuing to generate a similar amount of revenue from these customers.

0.63

15. 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: <table border="0" cellpadding="0" cellspacing="0" style="border-color: black; font-size: 10pt; border-collapse: collapse; font-family: times, serif;" width="100%"> <tr> <td width="5%"> </td> <td valign="top" width="5%">(a)</td> <td> On July 26 and 27, 2018, the outstanding long-term debt with PACE was re-financed. The re-financing will result in each of the credit facilities and the corporate term loan having terms of five years and a twenty-year amortization period, resulting in monthly repayment amounts totaling $33,264 ($43,803 CAD). </td> </tr> <tr> <td width="5%"> </td> <td width="5%"> </td> <td> </td> </tr> <tr> <td width="5%"> </td> <td valign="top" width="5%">(b)</td> <td> Subsequent to June 30, 2018, the Company raised $116,840 on a private placement, net of share issue costs of $10,160, on the issuance of 127,000 common shares. </td> </tr> </table>

33264 43803 116840 10160 127000

16. Comparative Figures Certain of the prior period’s comparative figures have been reclassified to conform to the current period’s presentation.

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Accumulated other comprehensive loss Stockholders' deficiency Total Liabilities and Stockholders' Deficiency Preferred Stock, Par Value Per Share Preferred Stock, Shares Authorized Preferred Stock, Shares Issued Preferred Stock, Shares Outstanding Common Stock, Par Value Per Share Common Stock, Shares Authorized Common Stock, Shares, Issued Common Stock, Shares, Outstanding Statement of Operations [Abstract] Revenue Cost of Sales Opening inventory Depreciation Direct wages and benefits Equipment rental, delivery and repairs and maintenance Utilities Outside contractors Costs of Good Purchased Cost of Good Purchased Less: closing inventory Total cost of sales Gross profit Operating expenses Financing costs Financing costs Management compensation-stock-based compensation Management compensation-stock-based compensation Management compensation-fees Interest expense Professional fees Office and administration Rent and occupancy Insurance Repairs and maintenance Filing fees Filing fees Directors compensation Contribution to Advanced Water Technology Program Contribution to Advanced Water Technology Program Total operating expenses Net loss Other comprehensive (loss) income Foreign exchange (loss) income Comprehensive loss Net loss per share-basic and diluted Weighted average number of common shares outstanding- basic and diluted Equity Components [Axis] Equity Components [Domain] Common Shares [Member] Additional Paid-in Capital [Member] Share Subscription Payable [Member] Share Subscriptions Payable Stock Compensation Reserve [Member] Stock Compensation Reserve Accumulated Deficit [Member] Accumulated Other Comprehensive Loss [Member] Statement of Stockholders Equity [Abstract] Beginning Balance Beginning Balance (Shares) Shares Issued (Shares) Shares issued for proceeds previously received Shares issued for proceeds previously received Shares issued for proceeds previously received (Shares) Shares issued for proceeds previously received (Shares) Shares Issued (Shares) (SharesIssued) Shares issued on vesting of 2017 stock award Shares issued on vesting of 2017 stock award Shares issued on vesting of 2017 stock award (Shares) Shares issued on vesting of 2017 stock award (Shares) Shares issued to directors Shares issued to directors Shares issued to directors (Shares) Shares issued to directors (Shares) Shares issued to employee Shares issued to employee Shares issued to employee (Shares) Shares issued to employee (Shares) Shares issued for consulting services Shares issued for consulting services (Shares) Shares issued on exercise of offer to acquire shares Shares issued on exercise of offer to acquire shares Shares issued on exercise of offer to acquire shares (Shares) Shares issued on exercise of offer to acquire shares (Shares) Shares issued to agents on financing Shares issued to agents on financing Shares issued to agents on financing (Shares) Shares issued to agents on financing (Shares) Shares issued on private placement, net of share issue costs Shares issued on private placement, net of share issue costs (Shares) Reallocation between common shares and additional paid-in capital Reallocation between common shares and additional paid-in capital Shares issued to directors 2 Shares issued to directors 2 Shares issued to directors 2 (Shares) Shares issued to directors 2 (Shares) Shares issued as compensation for director nomination Shares issued as compensation for director nomination Shares issued as compensation for director nomination (Shares) Shares issued as compensation for director nomination (Shares) Shares issued to employee 2 Shares issued to employee 2 Shares issued to employee 2 (Shares) Shares issued to employee 2 (Shares) Shares issued for consulting services 2 Shares issued for consulting services 2 Shares issued for consulting services 2 (Shares) Shares issued for consulting services 2 (Shares) Shares issued for private placement compensation Shares issued for private placement compensation Shares issued for private placement compensation (Shares) Shares issued for private placement compensation (Shares) Shares issued on acquisition of assets Shares issued on acquisition of assets (Shares) Shares issued on private placement, net of share issue costs Shares issued on private placement, net of share issue costs Shares issued on private placement, net of share issue costs (Shares) Shares issued on private placement, net of share issue costs (Shares) Stock compensation expensed on vesting of stock award Stock compensation expensed on vesting of stock award Proceeds received on shares yet to be issued Proceeds received on shares yet to be issued Subscription proceeds for shares yet to be issued Subscription proceeds for shares yet to be issued Other comprehensive loss Net loss Ending Balance Ending Balance (Shares) Statement of Cash Flows [Abstract] Cash flows from operating activities Net loss Adjustments for: Depreciation Amortization of intangible asset Non-cash financing fees Stock-based compensation Interest capitalized Changes in non-cash working capital: Trade receivables Inventory Prepaid expenses and deposits Accounts payable Accrued liabilities Net cash used in operating activities Cash flows from investing activities Disposal of term deposit Asset purchase commitment Asset purchase commitment Purchase of long-lived assets Net cash used in investing activities Cash flows from financing activities Advances of long-term debt Repayment of long-term debt Repayments of obligations under capital lease Repayments of loans payable to related parties Advances of loans payable to related parties Private placement proceeds (net of share issue costs) Net cash provided by financing activities Effect of exchange rate on cash (Decrease) increase in cash Cash and cash equivalents-beginning of period Cash and cash equivalents-end of period Supplemental Cash Flow Disclosures: Interest paid Income taxes paid Notes to Financial Statements [Abstract] Notes to Financial Statements [Abstract] Nature of Business and Basis of Presentation [Text Block] Going Concern [Text Block] Significant Accounting Policies [Text Block] Recent Accounting Pronouncements [Text Block] Financial Instruments [Text Block] Intangible Assets [Text Block] Long-lived Assets, net [Text Block] Related Party Transactions [Text Block] Long-Term Debt [Text Block] Obligations under Capital Lease [Text Block] Loans Payable to Related Party [Text Block] Loans Payable to Related Party Capital Stock [Text Block] Commitments [Text Block] Economic Dependence [Text Block] EX-101.PRE 10 susg-20180630_pre.xml XBRL PRESENTATION FILE XML 11 R1.htm IDEA: XBRL DOCUMENT

Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 30, 2018	Aug. 13, 2018
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2018
Trading Symbol	susg
Entity Registrant Name	SusGlobal Energy Corp.
Entity Central Index Key	0001652539
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		40,040,031
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well Known Seasoned Issuer	No
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q2

XML 12 R2.htm IDEA: XBRL DOCUMENT

Interim Condensed Consolidated Balance Sheets - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Current Assets
Cash and cash equivalents	$ 58,446	$ 126,117
Trade receivables	103,968	192,194
Inventory	115,733	53,964
Prepaid expenses and deposits	9,092	53,719
Total Current Assets	287,239	425,994
Intangible Assets	140,112	147,100
Long-lived Assets, net	3,680,597	3,864,588
Total Assets	4,107,948	4,437,682
Current Liabilities
Accounts payable	352,578	413,442
Accrued liabilities	340,343	347,417
Current portion of long-term debt	1,747,810	1,828,900
Current portion of obligations under capital lease	89,821	59,204
Loans payable to related parties	208,835	15,942
Total Current Liabilities	2,739,387	2,664,905
Long-Term Liabilities
Long-term debt	2,151,212	2,332,535
Obligations under capital lease	257,725	160,580
Total Long-term Liabilities	2,408,937	2,493,115
Total Liabilities	5,148,324	5,158,020
Stockholders' Deficiency
Preferred stock, $.0001 par value, 10,000,000 authorized, none issued and outstanding	0	0
Common stock, $.0001 par value, 150,000,000 authorized, 39,913,031 (2017- 37,393,031) shares issued and outstanding	3,992	3,740
Additional paid-in capital	5,388,559	3,576,111
Subscriptions payable	0	178,200
Stock compensation reserve	665,000	330,000
Accumulated deficit	(6,970,848)	(4,660,296)
Accumulated other comprehensive loss	(127,079)	(148,093)
Stockholders' deficiency	(1,040,376)	(720,338)
Total Liabilities and Stockholders' Deficiency	$ 4,107,948	$ 4,437,682

XML 13 R3.htm IDEA: XBRL DOCUMENT

Interim Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2018	Dec. 31, 2017
Preferred Stock, Par Value Per Share	$ 0.0001	$ 0.0001
Preferred Stock, Shares Authorized	10,000,000	10,000,000
Preferred Stock, Shares Issued
Preferred Stock, Shares Outstanding
Common Stock, Par Value Per Share	$ 0.0001	$ 0.0001
Common Stock, Shares Authorized	150,000,000	150,000,000
Common Stock, Shares, Issued	39,913,031	37,393,031
Common Stock, Shares, Outstanding	39,913,031	37,393,031

XML 14 R4.htm IDEA: XBRL DOCUMENT

Interim Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Revenue	$ 227,423	$ 0	$ 360,144	$ 0
Cost of Sales
Opening inventory	67,210	0	53,964	0
Depreciation	98,268	0	192,311	0
Direct wages and benefits	44,049	0	84,108	0
Equipment rental, delivery and repairs and maintenance	26,158	0	61,198	0
Utilities	9,688	0	31,888	0
Outside contractors	12,837	0	16,681	0
Costs of Good Purchased	258,210	0	440,150	0
Less: closing inventory	(115,733)	0	(115,733)	0
Total cost of sales	142,477	0	324,417	0
Gross profit	84,946	0	35,727	0
Operating expenses
Financing costs	0	0	0	882,153
Management compensation-stock-based compensation	1,582,500	82,500	1,665,000	165,000
Management compensation-fees	83,584	40,149	173,758	80,946
Interest expense	91,779	22,096	177,019	42,686
Professional fees	76,220	36,374	137,042	88,359
Office and administration	12,501	13,244	63,585	32,942
Rent and occupancy	34,716	13,752	68,917	25,178
Insurance	15,466	21,983	30,585	36,949
Repairs and maintenance	10,760	0	18,769	0
Filing fees	3,581	5,467	10,039	9,356
Directors compensation	774	13,200	1,565	24,800
Contribution to Advanced Water Technology Program	0	0	0	71,017
Total operating expenses	1,911,881	248,765	2,346,279	1,459,386
Net loss	(1,826,935)	(248,765)	(2,310,552)	(1,459,386)
Other comprehensive (loss) income
Foreign exchange (loss) income	(7,300)	(39,884)	21,014	(47,727)
Comprehensive loss	$ (1,834,235)	$ (288,649)	$ (2,289,538)	$ (1,507,113)
Net loss per share-basic and diluted	$ (0.05)	$ (0.01)	$ (0.06)	$ (0.04)
Weighted average number of common shares outstanding- basic and diluted	39,090,613	36,190,291	38,824,909	36,042,945

XML 15 R5.htm IDEA: XBRL DOCUMENT

Interim Condensed Consolidated Statements of Changes in Stockholders Equity Deficiency - USD ($)	Common Shares [Member]	Additional Paid-in Capital [Member]	Share Subscription Payable [Member]	Stock Compensation Reserve [Member]	Accumulated Deficit [Member]	Accumulated Other Comprehensive Loss [Member]	Total
Beginning Balance at Dec. 31, 2016	$ 2,004,407				$ (2,447,815)	$ (41,745)	$ (485,153)
Beginning Balance (Shares) at Dec. 31, 2016	34,128,910
Shares issued to directors	$ 11,600						11,600
Shares issued to directors (Shares)	40,000
Shares issued to employee	$ 1,450						1,450
Shares issued to employee (Shares)	5,000
Shares issued for consulting services	$ 4,950						4,950
Shares issued for consulting services (Shares)	15,000
Shares issued on exercise of offer to acquire shares	$ 11,500						11,500
Shares issued on exercise of offer to acquire shares (Shares)	115,000
Shares issued to agents on financing	$ 469,800						469,800
Shares issued to agents on financing (Shares)	1,620,000
Shares issued on private placement, net of share issue costs	$ 98,048						98,048
Shares issued on private placement, net of share issue costs (Shares)	329,176
Reallocation between common shares and additional paid-in capital	$ (2,598,130)	$ 2,598,130
Shares issued to directors 2	$ 4	13,196					13,200
Shares issued to directors 2 (Shares)	40,000
Shares issued as compensation for director nomination	$ 2	6,598					6,600
Shares issued as compensation for director nomination (Shares)	20,000
Shares issued to employee 2	$ 1	3,999					4,000
Shares issued to employee 2 (Shares)	4,000
Shares issued for consulting services 2	$ 2	19,998					20,000
Shares issued for consulting services 2 (Shares)	20,000
Shares issued for private placement compensation	$ 1	4,999					5,000
Shares issued for private placement compensation (Shares)	5,000
Shares issued on acquisition of assets	$ 53	529,917					529,970
Shares issued on acquisition of assets (Shares)	529,970
Shares issued on private placement, net of share issue costs	$ 52	399,274					399,326
Shares issued on private placement, net of share issue costs (Shares)	520,975
Stock compensation expensed on vesting of stock award				$ 330,000			330,000
Proceeds received on shares yet to be issued			$ 178,200				178,200
Other comprehensive loss						(106,348)	(106,348)
Net loss					(2,212,481)		(2,212,481)
Ending Balance at Dec. 31, 2017	$ 3,740	3,576,111	178,200	330,000	(4,660,296)	(148,093)	(720,338)
Ending Balance (Shares) at Dec. 31, 2017	37,393,031
Shares issued for proceeds previously received	$ 19	178,181	$ (178,200)
Shares issued for proceeds previously received (Shares)	190,000
Shares issued on vesting of 2017 stock award	$ 200	1,329,800		(330,000)			1,000,000
Shares issued on vesting of 2017 stock award (Shares)	2,000,000
Shares issued on private placement, net of share issue costs	$ 33	304,467					304,500
Shares issued on private placement, net of share issue costs (Shares)	330,000
Stock compensation expensed on vesting of stock award				665,000			665,000
Other comprehensive loss						21,014	21,014
Net loss					(2,310,552)		(2,310,552)
Ending Balance at Jun. 30, 2018	$ 3,992	$ 5,388,559		$ 665,000	$ (6,970,848)	$ (127,079)	$ (1,040,376)
Ending Balance (Shares) at Jun. 30, 2018	39,913,031

XML 16 R6.htm IDEA: XBRL DOCUMENT

Interim Condensed Consolidated Statements of Cash Flows - USD ($)	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Cash flows from operating activities
Net loss	$ (2,310,552)	$ (1,459,386)
Adjustments for:
Depreciation	196,491	292
Amortization of intangible asset	100	100
Non-cash financing fees	0	469,800
Stock-based compensation	1,665,000	191,250
Interest capitalized	54,276	0
Changes in non-cash working capital:
Trade receivables	81,565	20,646
Inventory	(66,295)	0
Prepaid expenses and deposits	43,378	(28,396)
Accounts payable	(50,177)	(114,870)
Accrued liabilities	9,646	(35,334)
Net cash used in operating activities	(376,568)	(955,898)
Cash flows from investing activities
Disposal of term deposit	0	151,100
Asset purchase commitment	0	(451,680)
Purchase of long-lived assets	(1,565)	(2,119)
Net cash used in investing activities	(1,565)	(302,699)
Cash flows from financing activities
Advances of long-term debt	0	1,695,320
Repayment of long-term debt	(121,878)	(451,680)
Repayments of obligations under capital lease	(51,283)	0
Repayments of loans payable to related parties	(15,654)	(61,951)
Advances of loans payable to related parties	215,243	0
Private placement proceeds (net of share issue costs)	304,500	138,894
Net cash provided by financing activities	330,928	1,320,583
Effect of exchange rate on cash	(20,466)	(31,762)
(Decrease) increase in cash	(67,671)	30,224
Cash and cash equivalents-beginning of period	126,117	1,774
Cash and cash equivalents-end of period	58,446	31,998
Supplemental Cash Flow Disclosures:
Interest paid	137,782	35,253
Income taxes paid	$ 0	$ 0

XML 17 R7.htm IDEA: XBRL DOCUMENT

Nature of Business and Basis of Presentation

6 Months Ended

Jun. 30, 2018

Nature of Business and Basis of Presentation [Text Block]

1. Nature of Business and Basis of Presentation

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

XML 18 R8.htm IDEA: XBRL DOCUMENT

Going Concern

6 Months Ended

Jun. 30, 2018

Going Concern [Text Block]

2. Going Concern

XML 19 R9.htm IDEA: XBRL DOCUMENT

Significant Accounting Policies

6 Months Ended

Jun. 30, 2018

Significant Accounting Policies [Text Block]

3. Significant Accounting Policies

These interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company for the years ended December 31, 2017 and 2016.

Recently Adopted Accounting Pronouncements:

On January 1, 2018, the Company adopted ASU No. 2017, Compensation-Stock Compensation : Topic 718: Scope of Modification Accounting (ASU 2017-09) to provide clarity and reduce both the (1) diversity in practice and (2) cost and complexity when changing the terms or conditions of share-based payment awards. Under ASU 2017-09, modification accounting is required to be applied unless all of the following are the same immediately before and after the change:

1.	The award’s fair value (or calculated value or intrinsic value if those measurement methods are used).
2.	The award’s vesting conditions.
3.	The award’s classification as an equity or liability instrument.

The adoption of ASC 606 had no impact on the Company’s interim condensed consolidated balance sheets as of January 1, 2018.

XML 20 R10.htm IDEA: XBRL DOCUMENT

Recent Accounting Pronouncements

6 Months Ended

Jun. 30, 2018

Recent Accounting Pronouncements [Text Block]

4. Recent Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, “Leases” (Topic 842 ) . The standard requires lessees to recognize the assets and liabilities that arise from leases on the balance sheet. ASU 2016-02 requires the recognition on the balance sheet of a lease liability to make lease payments by lessees and a right-of-use asset representing its right to use the underlying asset for the lease term. The new guidance will also require significant additional disclosure about the amount, timing and uncertainty of cash flows from leases. The new guidance is effective for annual and interim reporting periods beginning after December 15, 2018 (January 1, 2019 for the Company). The amendments should be applied at the beginning of the earliest period presented using a modified retrospective approach with earlier application permitted as of the beginning of an interim or annual reporting period. In March 2018, the FASB approved a new, optional transition method that will give companies the option to use the effective date as the date of initial application on transition. The Company plans to elect this transition method, and as a result, the Company will not adjust the comparative financial information or make the new required lease disclosures for periods before the effective date. The Company anticipates the adoption of this new standard will result in a significant increase in lease-related assets and liabilities in the consolidated balance sheet. As the impact of this standard is non-cash in nature, the Company does not anticipate its adoption having an impact on the Company’s consolidated statement of cash flows. The Company is currently evaluating the impact of adopting ASU No. 2016-02 on the consolidated statement of income.

In January 2017, the FASB issued ASU No. 2017-04, “Intangibles-Goodwill and Other ( Topic 350) - Simplifying the Test for Goodwill Impairment”. 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 standard is to be effective for interim and annual periods beginning after December 15, 2019 and early adoption is permitted. The Company is currently evaluating the impact of adopting ASU No. 2017-04.

XML 21 R11.htm IDEA: XBRL DOCUMENT

Financial Instruments

6 Months Ended

Jun. 30, 2018

Financial Instruments [Text Block]

5. Financial Instruments

Interest, Credit and Concentration Risk

In the opinion of management, the Company is exposed to significant interest rate risk on its variable corporate term loan of $3,899,022 ($5,134,345 CAD) (December 31, 2017-$4,161,435 ; $5,220,719 CAD). As at June 30, 2018, the Company is exposed to concentration risk as it had six customers (December 31, 2017-four customers) representing greater than 5% of total trade receivables and six customers (December 31, 2017-four customers) represented 80% (December 31 2017- 91%) 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 63% ( 25% and 38%) (June 30, 2017- nil) of total revenue.

Liquidity Risk

Currency Risk

XML 22 R12.htm IDEA: XBRL DOCUMENT

Intangible Assets

6 Months Ended

Jun. 30, 2018

Intangible Assets [Text Block]

6. Intangible Assets

		June 30, 2018		December 31, 2017
Technology license (net of accumulated amortization of $631 ( 2017 - $531))	$	1,370	$	1,470
Environmental compliance approvals-indefinite life- $182,700 CAD		138,742		145,630
	$	140,112	$	147,100

XML 23 R13.htm IDEA: XBRL DOCUMENT

Long-lived Assets, net

6 Months Ended

Jun. 30, 2018

Long-lived Assets, net [Text Block]

7 . Long-lived Assets, net

June 30, 2018

December 31, 2017

Cost

Accumulated

Net book value

Net book value

depreciation

Composting buildings

2,233,208

107,123

2,126,085

2,302,651

Gore cover system

890,017

70,460

819,557

906,953

Driveway and paving

351,982

22,292

329,690

360,835

Machinery and equipment

46,323

10,717

35,606

44,667

Equipment under capital lease

418,642

65,426

353,216

229,561

Office trailer

6,455

1,533

4,922

6,182

Computer equipment

6,712

2,840

3,872

3,368

Computer software

6,986

2,765

4,221

6,264

Automotive equipment

1,519

304

1,215

1,514

Signage

2,578

365

2,213

2,593

3,964,422

283,825

3,680,597

3,864,588

XML 24 R14.htm IDEA: XBRL DOCUMENT

Related Party Transactions

6 Months Ended

Jun. 30, 2018

Related Party Transactions [Text Block]

8. Related Party Transactions

During the six-month period ended June 30, 2018, the Company incurred $70,443 ($90,000 CAD) (2017-$22,484 ; $30,000 CAD) in management fees expense with Travellers International Inc. (“Travellers”), an Ontario company controlled by a director and president of the Company (the “President”); $70,443 ($90,000 CAD) (2017-$22,484 ; $30,000 CAD) in management fees expense with Landfill Gas Canada Ltd. (“LFGC”), an Ontario company controlled by a director and chief executive officer of the Company (the “CEO”); $23,481 ($30,000 CAD) (2017-$17,987 ; $24,000 CAD) in management fees expense with the Company’s chief financial officer (the “CFO”); and $9,391 ($12,000 CAD) (2017-$17,987 ; $24,000 CAD) in management fees expense with the Company’s vice-president of corporate development (the “VPCD”). As at June 30, 2018, unpaid remuneration and unpaid expenses in the amount of $72,544 ($95,528 CAD) (December 31, 2017-$111,426 ; $139,789 CAD) is included in accounts payable and $202,969 ($267,275 CAD) (December 31, 2017-$102,935 ; $129,137 CAD) is included in accrued liabilities.

In addition, during the six-month period ended June 30, 2018, the Company incurred interest expense of $4,818 ($6,156 CAD) (2017-$10,154 ; $13,548 CAD) on the outstanding loans from Travellers and $1,544 ($1,973 CAD) (2017-$nil ; $nil CAD) from the directors. As at June 30, 2018, interest of $5,892 ($7,759 CAD) (December 31, 2017-$22,120 ; $27,750 CAD) is included in accrued liabilities.

During the six-month period ended June 30, 2018, the Company incurred $32,499 ($41,521 CAD) (2017-$11,426 ; $15,124 CAD) in rent paid under a rental agreement to Haute Inc. (“Haute”), an Ontario company controlled by the President.

And, during the six-month period ended June 30, 2018, the Company sold $15,728 ($20,095 CAD) of compost product to LFGC.

XML 25 R15.htm IDEA: XBRL DOCUMENT

Long-Term Debt

6 Months Ended

Jun. 30, 2018

Long-Term Debt [Text Block]

9. Long-Term Debt

Credit

Corporate

June 30, 2018

December 31, 2017

Facility

Term

Total

Loan

(a)

(b)

(c)

(d)

Long-Term Debt

779,247

435,793

37,970

2,646,012

3,899,022

4,161,435

Current portion

(779,247

)

(435,793

)

(37,970

)

(494,800

)

(1,747,810

)

(1,828,900

)

Long-term Debt

2,151,212

2,332,535

(a)	The credit facility bears interest at the PACE base rate of 6.75% plus 1.25% per annum, payable on a monthly basis, interest only, due February 2, 2019. The credit facility is secured by a business loan general security agreement, a $1,215,040 ($1,600,000 CAD) personal guarantee from the President and a charge against the Company’s premises lease. Also pledged as security are the shares of the wholly-owned subsidiaries, a pledge of 3,300,000 of the Company’s shares held by LFGC, 500,000 of the Company’s shares held by the CFO, 2,000,000 of the Company’s shares held by a director’s company and a limited recourse guarantee by each of these parties. The credit facility is fully open for prepayment at any time without notice or bonus.

(b)	On June 15, 2017, PACE loaned the Company $455,640 ($600,000 CAD) under a variable rate business loan agreement, for its bid for the purchase of the assets of Astoria on the same terms, conditions and security as noted above, except that the loan is due February 2, 2019.

(c)	On August 4, 2017, PACE loaned the Company $37,970 ($50,000 CAD) under a variable rate business loan agreement to satisfy an outstanding liability on the same terms, conditions and security as noted above, except that the loan is due February 4, 2019.

(d)	On September 13, 2017, PACE loaned the Company $2,828,117 ($3,724,147 CAD) under a corporate term loan. The funds were used for the purpose of acquiring certain assets of Astoria from the court appointed receiver on September 15, 2017. The corporate term loan bears interest at the PACE base rate of 6.75% plus 1.25% per annum, payable in monthly blended instalments of principal and interest of $57,383 ($75,564 CAD), due 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 $3,038,343 ($4,000,978 CAD) against the assets including inventory, accounts receivable and equipment. The corporate term loan also included an assignment of existing contracts included in the APA.

	The unpaid and previously deferred interest on the corporate term loan for the period from March 13, 2018 to June 13, 2018, in the amount of $52,659 ($69,343 CAD), has been capitalized and included in the principal balance of the corporate term loan.

	The shares of the wholly-owned subsidiaries and those shares held by the companies and the CFO noted under (a) above, also represent security for the corporate term loan.

See subsequent events note 15(a) for details on the refinancing of all the outstanding long-term debt with PACE.

Repayments are as follows:

For the six months ending December 31, 2018	$	242,469
For the year ending December 31, 2019		1,767,935
For the year ending December 31, 2020		557,664
For the year ending December 31, 2021		603,949
For the year ending December 31, 2022		485,636
For the year ending December 31, 2023		241,369
Total	$	3,899,022

For the six-month period ended June 30, 2018, $158,433 ($202,419 CAD) (2017-$32,532 ; $43,405 CAD) in interest was charged.

XML 26 R16.htm IDEA: XBRL DOCUMENT

Obligations under Capital Lease

6 Months Ended

Jun. 30, 2018

Obligations under Capital Lease [Text Block]

10. Obligations under Capital Lease

June 30,

December 31,

2018

2017

(a)

(b)

(c)

Total

Obligations under Capital Lease

4,746

178,187

164,613

347,546

219,784

Less: current portion

(4,746

)

(47,513

)

(37,562

)

(89,821

)

(59,204

)

Obligations under Capital Lease

130,674

127,051

257,725

160,580

(a)	On September 21, 2017, the Company finalized a lease agreement for certain equipment for its organic composting facility in the amount of $13,046 ($17,180 CAD). The lease agreement is payable in monthly blended instalments of principal and interest of $983 ($1,268 CAD) at a monthly interest rate of 5.95%, due November 10, 2018.

(b)	On October 30, 2017, the Company finalized a lease agreement for certain equipment, which commenced on October 30, 2017, in the amount of $217,682 ($286,650 CAD). The lease agreement matures on September 30, 2021, with monthly blended instalments of principal and interest of $4,435 ($5,840 CAD), plus applicable harmonized sales taxes and an option to purchase the equipment for a final payment of $21,719 ($28,600 CAD), plus applicable harmonized sales taxes on October 31, 2021. The leasing agreement bears interest at the rate of 5.982% annually, compounded monthly.

(c)	On February 16, 2018, the Company finalized a lease agreement on certain equipment, which was on monthly rental. The lease is for a period of forty-eight months, with the first two monthly instalments of $7,594 ($10,000 CAD), plus applicable harmonized sales taxes, followed by forty-six monthly blended instalments of principal and interest of $3,887 ($5,118 CAD), plus applicable harmonized sales taxes. The Company has the option to purchase the equipment on the forty-ninth month for an amount of $18,742 ($24,680 CAD), plus applicable harmonized sales taxes. The leasing agreement bears interest at the rate of 6.15% annually, compounded monthly, due January 27, 2022.

The lease liabilities are secured by the equipment under capital lease as described in note 7.

Minimum lease payments are as follows:

For the six-month period ending December 31, 2018	$	59,181
For the year ending December 31, 2019		99,860
For the year ending December 31, 2020		99,860
For the year ending December 31, 2021		108,275
For the year ending December 31, 2022		22,629
		389,805
Less: imputed interest		(42,259	)
Total	$	347,546

For the six-month period ended June 30, 2018, $9,738 ( 12,441 CAD) (December 31, 2017-$nil ; ($nil CAD)) in interest was charged.

XML 27 R17.htm IDEA: XBRL DOCUMENT

Loans Payable to Related Party

6 Months Ended

Jun. 30, 2018

Loans Payable to Related Party [Text Block]

11. Loans Payable to Related Parties

		June 30, 2018		December 31, 2017

Travellers International Inc.	$	151,880	$	15,942
Directors		56,955		-
	$	208,835	$	15,942

Loan payable in the amount of $151,880 ($200,000 CAD) (December 31, 2017-$15,942 ; $20,000 CAD), owing to Travellers and bearing interest at the rate of 12% per annum, is due on demand and unsecured. As at June 30, 2018, $4,394 ($5,786 CAD) (December 31, 2017-$22,120 ; $27,750 CAD) in interest is included in accrued liabilities.

During the six-month period ended June 30, 2018, three directors each loaned the Company $18,985 ($25,000 CAD). The loans bear interest at the rate of 12% per annum, are due on demand and unsecured. As at June 30, 2018, $1,498 ($1,973 CAD) (December 31, 2017-$nil ; $nil CAD) in interest is included in accrued liabilities.

During the six-month period ended June 30, 2018, $6,362 ($8,129 CAD) (2017-$10,154 ; $13,548 CAD) in interest was charged on the loans payable to related parties.

XML 28 R18.htm IDEA: XBRL DOCUMENT

Capital Stock

6 Months Ended

Jun. 30, 2018

Capital Stock [Text Block]

12. Capital Stock

At June 30, 2018, the Company had 150,000,000 of common shares authorized with a par value of $.0001 per share and 39,913,031 (2017- 37,393,031) common shares issued and outstanding.

During the six-month period ended June 30, 2018, the Company raised $304,500 (December 31, 2017-$497,374) cash on a private placement, net of share issue costs of $25,800 (2017-$48,100), on the issuance of 330,000 (December 31, 2017- 850,151) common shares of the Company. In addition, during the six-month period ended June 30, 2018, the Company issued 190,000 common shares of the Company, on $178,200 cash received on a private placement received prior to December 31, 2017, net of share issue costs of $11,800.

All non-cash transactions were valued based on the proceeds of a recent private placement.

XML 29 R19.htm IDEA: XBRL DOCUMENT

Commitments

6 Months Ended

Jun. 30, 2018

Commitments [Text Block]

13 . Commitments

For the six-month period ending December 31, 2018	$	136,692
For the year ending December 31, 2019		273,384
	$	410,076

Effective January 1, 2017, the Company entered into a new three-year premises lease agreement with Haute at a monthly amount of $3,038 ($4,000 CAD) for 2017, $3,797 ($5,000 CAD) for 2018 and $4,556 ($6,000 CAD) for 2019. The Company is also 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. The future minimum commitment under this premises lease agreement is as follows:

For the six-month period ending December 31, 2018	$	22,782
For the year ending December 31, 2019		54,677
	$	77,459

For the six-month period ending December 31, 2018

18,117

	The Company has already completed and provided its commitment for the first year of the program which ended March 31, 2017, which consisted of professional fees of $7,217 ($9,432 CAD) and a contribution to the capital requirements of the program, totaling $71,017 ($94,000 CAD), for equipment to be used in the AWT Program and to be retained by Fleming College, an academic institution. The Company’s commitment in the amount of $19,947 ($25,217 CAD) for the second year of the program which ended March 31, 2018, is included under accounts payable in the interim condensed consolidated balance sheets and under office and administration in the amount of $12,006 ($15,178 CAD) and professional fees in the amount of $7,941 ($10,039 CAD) in the interim condensed statements of operations and comprehensive loss.

d)	The Company was assigned the land lease on the purchase of certain assets of Astoria. 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 $2,278 ($3,000 CAD) 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 by the landlord. 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. The future minimum commitment under this land lease (excluding any CPIadjustment) is as follows:

For the six-month period ending December 31, 2018	$	13,669
For the year ending December 31, 2019		27,338
For the year ending December 31, 2020		27,338
For the year ending December 31, 2021		27,338
For the year ending December 31, 2022		27,338
For the year ending December 31, 2023		27,338
Thereafter		280,219
	$	430,578

e)	On April 9, 2018, a new one-year consulting agreement was finalized for the services of the Company’s CFO, effective April 1, 2018, at a monthly rate of $4,556 ($6,000 CAD). The future minimum commitment under this agreement is as follows:

For the six-month period ending December 31, 2018	$	27,336
For the year ending December 31, 2019		13,668

	$	41,004

XML 30 R20.htm IDEA: XBRL DOCUMENT

Economic Dependence

6 Months Ended

Jun. 30, 2018

Economic Dependence [Text Block]

14. Economic Dependence

The Company generated 63% of its revenue from two customers. The Company’s ability to continue operations is dependent on continuing to generate a similar amount of revenue from these customers.

XML 31 R21.htm IDEA: XBRL DOCUMENT

Subsequent Events

6 Months Ended

Jun. 30, 2018

Subsequent Events [Text Block]

15. Subsequent Events

	(a)	On July 26 and 27, 2018, the outstanding long-term debt with PACE was re-financed. The re-financing will result in each of the credit facilities and the corporate term loan having terms of five years and a twenty-year amortization period, resulting in monthly repayment amounts totaling $33,264 ($43,803 CAD).

	(b)	Subsequent to June 30, 2018, the Company raised $116,840 on a private placement, net of share issue costs of $10,160, on the issuance of 127,000 common shares.

XML 32 R22.htm IDEA: XBRL DOCUMENT

Comparative Figures

6 Months Ended

Jun. 30, 2018

Comparative Figures [Text Block]

16. Comparative Figures

Certain of the prior period’s comparative figures have been reclassified to conform to the current period’s presentation.

XML 33 R23.htm IDEA: XBRL DOCUMENT

Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2018

Recently Adopted Accounting Pronouncements [Policy Text Block]

Recently Adopted Accounting Pronouncements:

1.	The award’s fair value (or calculated value or intrinsic value if those measurement methods are used).
2.	The award’s vesting conditions.
3.	The award’s classification as an equity or liability instrument.

The adoption of ASC 606 had no impact on the Company’s interim condensed consolidated balance sheets as of January 1, 2018.

XML 34 R24.htm IDEA: XBRL DOCUMENT

Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2018

Schedule of Finite-Lived Intangible Assets [Table Text Block]

		June 30, 2018		December 31, 2017
Technology license (net of accumulated amortization of $631 ( 2017 - $531))	$	1,370	$	1,470
Environmental compliance approvals-indefinite life- $182,700 CAD		138,742		145,630
	$	140,112	$	147,100

XML 35 R25.htm IDEA: XBRL DOCUMENT

Long-lived Assets, net (Tables)

6 Months Ended

Jun. 30, 2018

Schedule of Long-lived Assets [Table Text Block]

June 30, 2018

December 31, 2017

Cost

Accumulated

Net book value

Net book value

depreciation

Composting buildings

2,233,208

107,123

2,126,085

2,302,651

Gore cover system

890,017

70,460

819,557

906,953

Driveway and paving

351,982

22,292

329,690

360,835

Machinery and equipment

46,323

10,717

35,606

44,667

Equipment under capital lease

418,642

65,426

353,216

229,561

Office trailer

6,455

1,533

4,922

6,182

Computer equipment

6,712

2,840

3,872

3,368

Computer software

6,986

2,765

4,221

6,264

Automotive equipment

1,519

304

1,215

1,514

Signage

2,578

365

2,213

2,593

3,964,422

283,825

3,680,597

3,864,588

XML 36 R26.htm IDEA: XBRL DOCUMENT

Long-Term Debt (Tables)

6 Months Ended

Jun. 30, 2018

Schedule of Long-term Debt Instruments [Table Text Block]

Credit

Corporate

June 30, 2018

December 31, 2017

Facility

Term

Total

Loan

(a)

(b)

(c)

(d)

Long-Term Debt

779,247

435,793

37,970

2,646,012

3,899,022

4,161,435

Current portion

(779,247

)

(435,793

)

(37,970

)

(494,800

)

(1,747,810

)

(1,828,900

)

Long-term Debt

2,151,212

2,332,535

Long-term Debt [Member]

Schedule of Repayments [Table Text Block]

For the six months ending December 31, 2018	$	242,469
For the year ending December 31, 2019		1,767,935
For the year ending December 31, 2020		557,664
For the year ending December 31, 2021		603,949
For the year ending December 31, 2022		485,636
For the year ending December 31, 2023		241,369
Total	$	3,899,022

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.22)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=84159872&loc=d3e21475-112644

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 470
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=75038535&loc=d3e64711-112823

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(e),(f))
-URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 55
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=64930739&loc=d3e28878-108400

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=84159872&loc=d3e21538-112644

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=84159872&loc=d3e21506-112644

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 1A
-URI http://asc.fasb.org/extlink&oid=64930785&loc=d3e28541-108399

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=64930785&loc=d3e28551-108399

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=84159872&loc=d3e21521-112644

+ Details

XML 37 R27.htm IDEA: XBRL DOCUMENT

Obligations under Capital Lease (Tables)

6 Months Ended

Jun. 30, 2018

Schedule of Capital Leased Assets [Table Text Block]

June 30,

December 31,

2018

2017

(a)

(b)

(c)

Total

Obligations under Capital Lease

4,746

178,187

164,613

347,546

219,784

Less: current portion

(4,746

)

(47,513

)

(37,562

)

(89,821

)

(59,204

)

Obligations under Capital Lease

130,674

127,051

257,725

160,580

Schedule of Future Minimum Lease Payments for Capital Leases [Table Text Block]

For the six-month period ending December 31, 2018	$	59,181
For the year ending December 31, 2019		99,860
For the year ending December 31, 2020		99,860
For the year ending December 31, 2021		108,275
For the year ending December 31, 2022		22,629
		389,805
Less: imputed interest		(42,259	)
Total	$	347,546

XML 38 R28.htm IDEA: XBRL DOCUMENT

Loans Payable to Related Party (Tables)

6 Months Ended

Jun. 30, 2018

		June 30, 2018		December 31, 2017

Travellers International Inc.	$	151,880	$	15,942
Directors		56,955		-
	$	208,835	$	15,942

XML 39 R29.htm IDEA: XBRL DOCUMENT

Commitments (Tables)

6 Months Ended

Jun. 30, 2018

The President and CEO [Member]

Commitments [Table Text Block]

For the six-month period ending December 31, 2018	$	136,692
For the year ending December 31, 2019		273,384
	$	410,076

Haute Inc [Member]

Commitments [Table Text Block]

For the six-month period ending December 31, 2018	$	22,782
For the year ending December 31, 2019		54,677
	$	77,459

Advanced Water Technologies Program [Member]

Commitments [Table Text Block]

For the six-month period ending December 31, 2018

18,117

Astoria Organic Matters Ltd. [Member]

Commitments [Table Text Block]

For the six-month period ending December 31, 2018	$	13,669
For the year ending December 31, 2019		27,338
For the year ending December 31, 2020		27,338
For the year ending December 31, 2021		27,338
For the year ending December 31, 2022		27,338
For the year ending December 31, 2023		27,338
Thereafter		280,219
	$	430,578

Chief Financial Officer [Member]

Commitments [Table Text Block]

For the six-month period ending December 31, 2018	$	27,336
For the year ending December 31, 2019		13,668

	$	41,004

XML 40 R30.htm IDEA: XBRL DOCUMENT

Going Concern (Narrative) (Details)	6 Months Ended
Going Concern (Narrative) (Details)	Jun. 30, 2018 USD ($)
Going Concern 1	$ 2,452,148
Going Concern 2	2,238,911
Going Concern 3	2,310,552
Going Concern 4	1,459,386
Going Concern 5	6,970,848
Going Concern 6	$ 4,660,296

XML 41 R31.htm IDEA: XBRL DOCUMENT

Financial Instruments (Narrative) (Details)	6 Months Ended
Financial Instruments (Narrative) (Details)	Jun. 30, 2018 USD ($)	Jun. 30, 2018 CAD ($)
Financial Instruments 1	$ 3,899,022
Financial Instruments 2		$ 5,134,345
Financial Instruments 3	$ 4,161,435
Financial Instruments 4		$ 5,220,719
Financial Instruments 5	5.00%	5.00%
Financial Instruments 6	80.00%	80.00%
Financial Instruments 7	91.00%	91.00%
Financial Instruments 8	10.00%	10.00%
Financial Instruments 9	63.00%	63.00%
Financial Instruments 10	25.00%	25.00%
Financial Instruments 11	38.00%	38.00%
Financial Instruments 12	0	0
Financial Instruments 13	$ 7,002
Financial Instruments 14	$ 6,057

XML 42 R32.htm IDEA: XBRL DOCUMENT

Intangible Assets (Narrative) (Details)	6 Months Ended
Intangible Assets (Narrative) (Details)	Jun. 30, 2018 USD ($) shares
Intangible Assets 1	$ 1
Intangible Assets 2 \| shares	20,000
Intangible Assets 3	$ 2,000

XML 43 R33.htm IDEA: XBRL DOCUMENT

Long-lived Assets, net (Narrative) (Details)	6 Months Ended
Long-lived Assets, net (Narrative) (Details)	Jun. 30, 2018 USD ($)	Jun. 30, 2018 CAD ($)
Long-lived Assets, Net 1	$ 2,974,798
Long-lived Assets, Net 2		$ 3,917,300
Long-lived Assets, Net 3	529,970	529,970
Long-lived Assets, Net 4	$ 529,970
Long-lived Assets, Net 5		$ 700,000
Long-lived Assets, Net 6	$ 22,215
Long-lived Assets, Net 7		$ 29,253

XML 44 R34.htm IDEA: XBRL DOCUMENT

Related Party Transactions (Narrative) (Details)	6 Months Ended
Related Party Transactions (Narrative) (Details)	Jun. 30, 2018 USD ($)	Jun. 30, 2018 CAD ($)
Related Party Transactions 1	$ 70,443
Related Party Transactions 2		$ 90,000
Related Party Transactions 3	22,484
Related Party Transactions 4		30,000
Related Party Transactions 5	70,443
Related Party Transactions 6		90,000
Related Party Transactions 7	22,484
Related Party Transactions 8		30,000
Related Party Transactions 9	23,481
Related Party Transactions 10		30,000
Related Party Transactions 11	17,987
Related Party Transactions 12		24,000
Related Party Transactions 13	9,391
Related Party Transactions 14		12,000
Related Party Transactions 15	17,987
Related Party Transactions 16		24,000
Related Party Transactions 17	72,544
Related Party Transactions 18		95,528
Related Party Transactions 19	111,426
Related Party Transactions 20		139,789
Related Party Transactions 21	202,969
Related Party Transactions 22		267,275
Related Party Transactions 23	102,935
Related Party Transactions 24		129,137
Related Party Transactions 25	4,818
Related Party Transactions 26		6,156
Related Party Transactions 27	10,154
Related Party Transactions 28		13,548
Related Party Transactions 29	1,544
Related Party Transactions 30		1,973
Related Party Transactions 31	0
Related Party Transactions 32		0
Related Party Transactions 33	5,892
Related Party Transactions 34		7,759
Related Party Transactions 35	22,120
Related Party Transactions 36		27,750
Related Party Transactions 37	32,499
Related Party Transactions 38		41,521
Related Party Transactions 39	11,426
Related Party Transactions 40		15,124
Related Party Transactions 41	$ 15,728
Related Party Transactions 42		$ 20,095
Related Party Transactions 43	3,000,000	3,000,000
Related Party Transactions 44	$ 990,000
Related Party Transactions 45	1,000,000	1,000,000
Related Party Transactions 46	1,000,000	1,000,000
Related Party Transactions 47	3,000,000	3,000,000
Related Party Transactions 48	1,000,000	1,000,000
Related Party Transactions 49	1,000,000	1,000,000
Related Party Transactions 50	$ 1,000,000
Related Party Transactions 51	665,000
Related Party Transactions 52	165,000
Related Party Transactions 53	$ 3,990,000

XML 45 R35.htm IDEA: XBRL DOCUMENT

Long-Term Debt (Narrative) (Details)	6 Months Ended
Long-Term Debt (Narrative) (Details)	Jun. 30, 2018 USD ($)	Jun. 30, 2018 CAD ($)
Long-term Debt 1	6.75%	6.75%
Long-term Debt 2	1.25%	1.25%
Long-term Debt 3	$ 1,215,040
Long-term Debt 4		$ 1,600,000
Long-term Debt 5	3,300,000	3,300,000
Long-term Debt 6	500,000	500,000
Long-term Debt 7	2,000,000	2,000,000
Long-term Debt 8	$ 455,640
Long-term Debt 9		$ 600,000
Long-term Debt 10	37,970
Long-term Debt 11		50,000
Long-term Debt 12	$ 2,828,117
Long-term Debt 13		$ 3,724,147
Long-term Debt 14	6.75%	6.75%
Long-term Debt 15	1.25%	1.25%
Long-term Debt 16	$ 57,383
Long-term Debt 17		$ 75,564
Long-term Debt 18	3,038,343
Long-term Debt 19		4,000,978
Long-term Debt 20	52,659
Long-term Debt 21		69,343
Long-term Debt 22	158,433
Long-term Debt 23		202,419
Long-term Debt 24	$ 32,532
Long-term Debt 25		$ 43,405

XML 46 R36.htm IDEA: XBRL DOCUMENT

Obligations under Capital Lease (Narrative) (Details)	6 Months Ended
Obligations under Capital Lease (Narrative) (Details)	Jun. 30, 2018 USD ($)	Jun. 30, 2018 CAD ($)
Obligations Under Capital Lease 1	$ 13,046
Obligations Under Capital Lease 2		$ 17,180
Obligations Under Capital Lease 3	$ 983
Obligations Under Capital Lease 4		$ 1,268
Obligations Under Capital Lease 5	5.95%	5.95%
Obligations Under Capital Lease 6	$ 217,682
Obligations Under Capital Lease 7		$ 286,650
Obligations Under Capital Lease 8	4,435
Obligations Under Capital Lease 9		5,840
Obligations Under Capital Lease 10	$ 21,719
Obligations Under Capital Lease 11		$ 28,600
Obligations Under Capital Lease 12	5.982%	5.982%
Obligations Under Capital Lease 13	$ 7,594
Obligations Under Capital Lease 14		$ 10,000
Obligations Under Capital Lease 15	3,887
Obligations Under Capital Lease 16		5,118
Obligations Under Capital Lease 17	$ 18,742
Obligations Under Capital Lease 18		$ 24,680
Obligations Under Capital Lease 19	6.15%	6.15%
Obligations Under Capital Lease 20	$ 9,738
Obligations Under Capital Lease 21		$ 12,441
Obligations Under Capital Lease 22	$ 0
Obligations Under Capital Lease 23		$ 0

XML 47 R37.htm IDEA: XBRL DOCUMENT

Loans Payable to Related Party (Narrative) (Details)	6 Months Ended
Loans Payable to Related Party (Narrative) (Details)	Jun. 30, 2018 USD ($)	Jun. 30, 2018 CAD ($)
Loans Payable To Related Party 1	$ 151,880
Loans Payable To Related Party 2		$ 200,000
Loans Payable To Related Party 3	$ 15,942
Loans Payable To Related Party 4		$ 20,000
Loans Payable To Related Party 5	12.00%	12.00%
Loans Payable To Related Party 6	$ 4,394
Loans Payable To Related Party 7		$ 5,786
Loans Payable To Related Party 8	22,120
Loans Payable To Related Party 9		27,750
Loans Payable To Related Party 10	$ 18,985
Loans Payable To Related Party 11		$ 25,000
Loans Payable To Related Party 12	12.00%	12.00%
Loans Payable To Related Party 13	$ 1,498
Loans Payable To Related Party 14		$ 1,973
Loans Payable To Related Party 15	0
Loans Payable To Related Party 16		0
Loans Payable To Related Party 17	6,362
Loans Payable To Related Party 18		8,129
Loans Payable To Related Party 19	$ 10,154
Loans Payable To Related Party 20		$ 13,548

XML 48 R38.htm IDEA: XBRL DOCUMENT

Capital Stock (Narrative) (Details) - 6 months ended Jun. 30, 2018	USD ($) $ / shares shares	CAD ($) shares
Capital Stock 1	150,000,000	150,000,000
Capital Stock 2 \| $ / shares	$ 0.0001
Capital Stock 3	39,913,031	39,913,031
Capital Stock 4 \| shares	37,393,031	37,393,031
Capital Stock 5	$ 304,500
Capital Stock 6	497,374
Capital Stock 7	25,800
Capital Stock 8	$ 48,100
Capital Stock 9	330,000	330,000
Capital Stock 10 \| shares	850,151	850,151
Capital Stock 11 \| shares	190,000	190,000
Capital Stock 12	$ 178,200
Capital Stock 13	$ 11,800
Capital Stock 14 \| shares	1,620,000	1,620,000
Capital Stock 15	$ 469,800
Capital Stock 16 \| shares	40,000	40,000
Capital Stock 17	$ 11,600
Capital Stock 18	$ 13,200
Capital Stock 19 \| shares	5,000	5,000
Capital Stock 20 \| shares	4,000	4,000
Capital Stock 21	$ 1,450
Capital Stock 22	$ 4,000
Capital Stock 23 \| shares	15,000	15,000
Capital Stock 24 \| shares	20,000	20,000
Capital Stock 25 \| shares	20,000	20,000
Capital Stock 26	$ 4,950
Capital Stock 27	6,600
Capital Stock 28	$ 20,000
Capital Stock 29 \| shares	115,000	115,000
Capital Stock 30	$ 0.10
Capital Stock 31 \| shares	5,000	5,000
Capital Stock 32	$ 5,000
Capital Stock 33 \| shares	529,970	529,970
Capital Stock 34	$ 529,970
Capital Stock 35		$ 700,000
Capital Stock 36	3,000,000	3,000,000
Capital Stock 37 \| shares	1,000,000	1,000,000
Capital Stock 38	1,000,000	1,000,000
Capital Stock 39	$ 165,000
Capital Stock 40	3,000,000	3,000,000
Capital Stock 41	1,000,000	1,000,000
Capital Stock 42	1,000,000	1,000,000
Capital Stock 43	$ 1,000,000
Capital Stock 44	1,000,000
Capital Stock 45	500,000
Capital Stock 46	$ 1,500,000

XML 49 R39.htm IDEA: XBRL DOCUMENT

Commitments (Narrative) (Details) - 6 months ended Jun. 30, 2018	USD ($) a	CAD ($) a
Commitments 1	$ 3,797
Commitments 2		$ 5,000
Commitments 3	$ 11,391
Commitments 4		$ 15,000
Commitments 5	3,000,000	3,000,000
Commitments 6	1,000,000	1,000,000
Commitments 7	1,000,000	1,000,000
Commitments 8	3,000,000	3,000,000
Commitments 9	1,000,000	1,000,000
Commitments 10	1,000,000	1,000,000
Commitments 11	$ 3,038
Commitments 12		$ 4,000
Commitments 13	3,797
Commitments 14		5,000
Commitments 15	4,556
Commitments 16		6,000
Commitments 17	7,217
Commitments 18		9,432
Commitments 19	71,017
Commitments 20		94,000
Commitments 21	19,947
Commitments 22		25,217
Commitments 23	12,006
Commitments 24		15,178
Commitments 25	$ 7,941
Commitments 26		$ 10,039
Commitments 27 \| a	13.88	13.88
Commitments 28	$ 2,278
Commitments 29		$ 3,000
Commitments 30	4,556
Commitments 31		6,000
Commitments 32	$ 210,225
Commitments 33		$ 276,831

XML 50 R40.htm IDEA: XBRL DOCUMENT

Economic Dependence (Narrative) (Details)	6 Months Ended
Economic Dependence (Narrative) (Details)	Jun. 30, 2018
Economic Dependence 1	63.00%

XML 51 R41.htm IDEA: XBRL DOCUMENT

Subsequent Events (Narrative) (Details)	6 Months Ended
Subsequent Events (Narrative) (Details)	Jun. 30, 2018 USD ($) shares	Jun. 30, 2018 CAD ($) shares
Subsequent Events 1	$ 33,264
Subsequent Events 2		$ 43,803
Subsequent Events 3	116,840
Subsequent Events 4	$ 10,160
Subsequent Events 5 \| shares	127,000	127,000

XML 52 R42.htm IDEA: XBRL DOCUMENT

Schedule of Finite-Lived Intangible Assets (Details)	6 Months Ended
Schedule of Finite-Lived Intangible Assets (Details)	Jun. 30, 2018 USD ($)	Jun. 30, 2018 CAD ($)	Dec. 31, 2017 USD ($)
Intangible Assets Schedule Of Finite-lived Intangible Assets 2	$ 2,017
Intangible Assets	140,112		$ 147,100
Technology License [Member]
Accumulated Amortization	631		531
Intangible Assets	1,370		1,470
Environmental compliance approvals [Member]
Intangible Assets	$ 138,742	$ 182,700	$ 145,630

XML 53 R43.htm IDEA: XBRL DOCUMENT

Schedule of Long-lived Assets (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Cost	$ 3,964,422
Accumulated Depreciation	283,825
Net book value	3,680,597	$ 3,864,588
Composting buildings [Member]
Cost	2,233,208
Accumulated Depreciation	107,123
Net book value	2,126,085	2,302,651
Gore cover system [Member]
Cost	890,017
Accumulated Depreciation	70,460
Net book value	819,557	906,953
Driveway and Paving [Member]
Cost	351,982
Accumulated Depreciation	22,292
Net book value	329,690	360,835
Machinery and equipment, including under capital lease [Member]
Cost	46,323
Accumulated Depreciation	10,717
Net book value	35,606	44,667
Equipment under capital lease [Member]
Cost	418,642
Accumulated Depreciation	65,426
Net book value	353,216	229,561
Officer trailer [Member]
Cost	6,455
Accumulated Depreciation	1,533
Net book value	4,922	6,182
Computer equipment [Member]
Cost	6,712
Accumulated Depreciation	2,840
Net book value	3,872	3,368
Computer software [Member]
Cost	6,986
Accumulated Depreciation	2,765
Net book value	4,221	6,264
Automotive equipment [Member]
Cost	1,519
Accumulated Depreciation	304
Net book value	1,215	1,514
Signage [Member]
Cost	2,578
Accumulated Depreciation	365
Net book value	$ 2,213	$ 2,593

XML 54 R44.htm IDEA: XBRL DOCUMENT

Schedule of Long-term Debt Instruments (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Long-Term Debt	$ 3,899,022	$ 4,161,435
Current portion	(1,747,810)	(1,828,900)
Long-term Debt	2,151,212	$ 2,332,535
Credit facility (a) [Member]
Long-Term Debt	779,247
Current portion	(779,247)
Long-term Debt	0
Credit facility (b) [Member]
Long-Term Debt	435,793
Current portion	(435,793)
Long-term Debt	0
Credit facility (c) [Member]
Long-Term Debt	37,970
Current portion	(37,970)
Long-term Debt	0
Corporate Term Loan [Member]
Long-Term Debt	2,646,012
Current portion	(494,800)
Long-term Debt	$ 2,151,212

XML 55 R45.htm IDEA: XBRL DOCUMENT

Schedule of Repayments (Details) - Long-term Debt [Member]	Jun. 30, 2018 USD ($)
2018	$ 242,469
2019	1,767,935
2020	557,664
2021	603,949
2022	485,636
2023	241,369
Total	$ 3,899,022

XML 56 R46.htm IDEA: XBRL DOCUMENT

Schedule of Capital Leased Assets (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Obligations under Capital Lease	$ 347,546	$ 219,784
Less: current portion	(89,821)	(59,204)
Obligations under capital lease	257,725	$ 160,580
Capital Lease (a) [Member]
Obligations under Capital Lease	4,746
Less: current portion	(4,746)
Obligations under capital lease	0
Capital Lease (b) [Member]
Obligations under Capital Lease	178,187
Less: current portion	(47,513)
Obligations under capital lease	130,674
Capital Lease (c) [Member]
Obligations under Capital Lease	164,613
Less: current portion	(37,562)
Obligations under capital lease	$ 127,051

XML 57 R47.htm IDEA: XBRL DOCUMENT

Schedule of Future Minimum Lease Payments for Capital Leases (Details)	Jun. 30, 2018 USD ($)
2018	$ 59,181
2019	99,860
2020	99,860
2021	108,275
2022	22,629
Minimum Payments Due	389,805
Less: imputed interest	(42,259)
Total	$ 347,546

XML 58 R48.htm IDEA: XBRL DOCUMENT

Schedule of Related Party Transactions (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Loans payable to related parties	$ 208,835	$ 15,942
Travellers International Inc. [Member]
Loans payable to related parties	151,880	15,942
Directors [Member]
Loans payable to related parties	$ 56,955	$ 0

XML 59 R49.htm IDEA: XBRL DOCUMENT

Commitments (Details)	Jun. 30, 2018 USD ($)
The President and CEO [Member]
2018	$ 136,692
2019	273,384
Total	410,076
Haute Inc [Member]
2018	22,782
2019	54,677
Total	77,459
Advanced Water Technologies Program [Member]
2018	18,117
Astoria Organic Matters Ltd. [Member]
2018	13,669
2019	27,338
2020	27,338
2021	27,338
2022	27,338
2023	27,338
Thereafter	280,219
Total	430,578
Chief Financial Officer [Member]
2018	27,336
2019	13,668
Total	$ 41,004

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