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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 September 30, 2023

or

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

For the transition period from ________________to ________________

Commission file number 000-56024

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

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

416-223-8500
(Registrant's telephone number, including area code)

Not applicable
(Former name, former address and former fiscal year, if changed since last report)

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

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

N/A

N/A

N/A

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

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

form10qxu002.jpg
1

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

Large accelerated filer [  ] Accelerated filer [  ]
Non-accelerated filer [X] Smaller reporting company [X]
  Emerging growth company [ ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided to Section 7(a)(2)(B) of the Securities Act. [  ]

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

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

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2

SusGlobal Energy Corp.

INDEX TO FORM 10-Q

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

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

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3


SusGlobal Energy Corp.

Interim Condensed Consolidated Balance Sheets

As at September 30, 2023 and December 31, 2022

(Expressed in United States Dollars)

(unaudited)

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

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

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5

SusGlobal Energy Corp.

Interim Condensed Consolidated Statements of Operations and Comprehensive Loss

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

(Expressed in United States Dollars)

(unaudited)

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

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

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6

SusGlobal Energy Corp.

Interim Condensed Consolidated Statements of Changes in Stockholders' Deficiency

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

(Expressed in United States Dollars)

(unaudited)

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

 

form10qxu002.jpg
7

SusGlobal Energy Corp.

Interim Condensed Consolidated Statements of Changes in Stockholders' Deficiency

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

(Expressed in United States Dollars)

(unaudited)

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

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

form10qxu002.jpg
8

SusGlobal Energy Corp.

Interim Condensed Consolidated Statements of Cash Flows

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

(Expressed in United States Dollars)

(unaudited)

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

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

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9

SusGlobal Energy Corp.

Notes to the Interim Condensed Consolidated Financial Statements

September 30, 2023 and 2022

(Expressed in United States Dollars)

(unaudited)

1. Nature of Business and Basis of Presentation

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

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

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

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

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

 

2. Going Concern

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

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

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

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10

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

2. Going Concern, (continued)

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

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

 

3. Significant Accounting Policies

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

 

4. Recently Issued Accounting Pronouncements

Accounting Pronouncements Recently Adopted

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

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

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

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

 

5. Financial Instruments

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

Interest, Credit and Concentration Risk

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

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11

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

5. Financial Instruments, (continued)

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

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

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

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

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

Liquidity Risk

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

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

Currency Risk

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

 

6. Funds Held in Trust

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

Refer also to subsequent events, note 19(b).
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12

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

7. Long-lived Assets, net

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

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

 

8. Related Party Transactions

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

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

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

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

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

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13

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

8. Related Party Transactions, (continued)

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

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

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

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

 

9. Long-Term Debt

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

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

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

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

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14

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

9. Long-Term Debt, (continued)

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

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

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

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

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

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

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

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

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15

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

9. Long-Term Debt, (continued)

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

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

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

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

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

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

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

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

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

 

10. Obligations under Capital Lease

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

Refer also to going concern, note 2.

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

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16

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

10. Obligations under Capital Lease, (continued)

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

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

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

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

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

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

 

11. Convertible Promissory Notes

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

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

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

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

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17

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

11. Convertible Promissory Notes, (continued)

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

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

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

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

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

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

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

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18

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

11.    Convertible Promissory Notes, (continued)

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

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

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

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

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

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

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

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19

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

11.    Convertible Promissory Notes, (continued)

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

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

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

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

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

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

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

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

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20

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

11. Convertible Promissory Notes, (continued)

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

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

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

Refer also to going concern, note 2.

Fair value option for the convertible promissory notes

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

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

 

12. Fair Value Measurement

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

    Fair value as at September 30, 2023 and December 31, 2022 Using:  
    Level 3     September 30, 2023     December 31, 2022  
Assets: $ -   $ -   $ -  
Liabilities:                  
Convertible promissory notes   9,756,700     9,756,700     7,796,433  
  $ 9,756,700   $ 9,756,700   $ 7,796,433  
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21

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

12. Fair Value Measurement, (continued)

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

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

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

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

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

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

Refer also to going concern, note 2.

 

13. Loans Payable to Related Parties

    September 30,
2023		     December 31,
2022		  
Directors $ 47,500   $ 40,000  
Officers   12,441     -  
Total $ 59,941   $ 40,000  
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22

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

13. Loans Payable to Related Parties, (continued)

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

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

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

 

14. Capital Stock

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

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

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

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

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

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

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23

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

14. Capital Stock, (continued)

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

 

15. Commitments

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

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

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

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

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

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

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

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

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

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

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

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

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

15. Commitments, (continued)

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

The future minimum commitment is as follows:

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

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

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

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

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

 

16. Other Expenses

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

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

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

(c) Gain on extinguishment of convertible promissory notes. Refer to note 11, convertible promissory notes.

(d) Accrued settlement payment for the release of services of a party for an underwriting offering dated March 23, 2022 and amended May 23, 2022.
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SusGlobal Energy Corp.
Notes to the Interim Condensed Consolidated Financial Statements
September 30, 2023 and 2022
(Expressed in United States Dollars)
(unaudited)

17. Economic Dependence

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

 

18. Legal Proceedings

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

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

 

19. Subsequent Events

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

 

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

 

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

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

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

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

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

SPECIAL NOTICE ABOUT GOING CONCERN AUDIT OPINION

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

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

OVERVIEW

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

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

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

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

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

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

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

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

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

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

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

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

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

RECENT BUSINESS DEVELOPMENTS

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

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

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

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

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

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

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

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

Highlights

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

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

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

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

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

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

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

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

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

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

New and Renewed Consulting Contracts

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

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

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

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

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

Financings

(a) Securities Purchase Agreements

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

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

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

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

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

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

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

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

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

(c) Other Financings

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

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

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

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

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

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

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

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

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

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

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

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

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

(d) Financings Related to Obligations Under Capital Lease

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

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

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

Operations

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

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

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

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

LIQUIDITY AND CAPITAL RESOURCES

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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.

CRITICAL ACCOUNTING ESTIMATES

Use of estimates

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

Stock-based compensation

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

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39

 

Indefinite Asset Impairments

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

Long-Lived Asset Impairments

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

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

Convertible Promissory Notes

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

RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS

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

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

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

EQUITY

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

STOCK OPTIONS, WARRANTS AND RESTRICTED STOCK UNITS

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

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40

 

RELATED PARTY TRANSACTIONS

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

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

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

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

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

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

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

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

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

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

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.

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41

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

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

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

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

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

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

Changes in Internal Control over Financial Reporting

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

PART II: OTHER INFORMATION

Item 1. Legal Proceedings.

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

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

Item 1A. Risk Factors.

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

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

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

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

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

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

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

form10qxu002.jpg
42

 

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

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

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

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

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

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

Item 3. Defaults upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not Applicable.

Item 5. Other Information.

Not Applicable.

Item 6. Exhibits.

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

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

 

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43

 

SIGNATURES

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

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

 

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44


LRO # 62 Transfer Receipted as WE1708026 on 2023 11 02     at 15:55     
The applicant(s) hereby applies to the Land Registrar. yyyy mm dd     Page 1 of 3

Properties

PIN 17566 - 0052 LT                  Interest/Estate          Fee Simple
Description PT LT 28 CON 1 SALTFLEET BEING PTS 9,10 & 28 PL 62R15125; CITY OF HAMILTON
Address 490 NASH ROAD NORTH
  HAMILTON

Consideration

Consideration                  $3,100,000.00

Transferor(s)

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

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

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

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

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

Statements    

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

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

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

Signed By

Paul Douglas Michael Mazza 69 Markland Street acting for Signed 2023 11 02
    Hamilton Transferor(s)    
    L8P 2J8      
Tel 905-777-1136        
Fax 905-777-1140        
 
I am the solicitor for the transferor(s) and I am not one and the same as the solicitor for the transferee(s).
 
I have the authority to sign and register the document on behalf of the Transferor(s).
         
Anthony Tyler D'Angelo Bay Adelaide Centre 333 Bay acting for Signed 2023 11 02
    Street Suite 3400 Transferee(s)    
    Toronto      
    M5H 2S7      
Tel 416-979-2211        
Fax 416-979-1234        
     
I am the solicitor for the transferee(s) and I am not one and the same as the solicitor for the transferor(s).
       
I have the authority to sign and register the document on behalf of the Transferee(s).

Submitted By

GOODMANS LLP Bay Adelaide Centre 333 Bay Street 2023 11 02
    Suite 3400  
    Toronto  
    M5H 2S7  
Tel 416-979-2211    
Fax 416-979-1234    


LRO # 62 Transfer Receipted as WE1708026 on 2023 11 02     at 15:55     
The applicant(s) hereby applies to the Land Registrar. yyyy mm dd     Page 2 of 3

Fees/Taxes/Payment

Statutory Registration Fee

$69.00

Provincial Land Transfer Tax

$58,475.00

Total Paid

$58,544.00

File Number

Transferor Client File Number :

517737

Transferee Client File Number :

23.1069 [ATD/SM]

LAND TRANSFER TAX STATEMENTS

In the matter of the conveyance of: 17566 - 0052 PT LT 28 CON 1 SALTFLEET BEING PTS 9,10 & 28 PL 62R15125; CITY OF HAMILTON

BY: SNAVE HOLDINGS LTD.
TO: SUSGLOBAL ENERGY CANADA CORP.

1. MARC HAZOUT

I am

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

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

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

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

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

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

 

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

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

 

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

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

 

6. Other remarks and explanations, if necessary.

1. The information prescribed for purposes of section 5.0.1 of the Land Transfer Tax Act is not required to be provided for this conveyance.

2. The transferee(s) has read and considered the definitions of "designated land", "foreign corporation", "foreign entity", "foreign national", "Greater Golden Horseshoe Region", "specified region", "spouse" and "taxable trustee" as set out in subsection 1(1) of the Land Transfer Tax Act and O. Reg 182/17. The transferee(s) declare that this conveyance is not subject to additional tax as set out in subsection 2(2.1) of the Act because:

3. (b) This is not a conveyance of "designated land".

4. The transferee(s) declare that they will keep at their place of residence in Ontario (or at their principal place of business in Ontario) such documents, records and accounts in such form and containing such information as will enable an accurate determination of the taxes payable under the Land Transfer Tax Act for a period of at least seven years.

5. The transferee(s) agree that they or the designated custodian will provide such documents, records and accounts in such form and containing such information as will enable an accurate determination of the taxes payable under the Land Transfer Tax Act, to the Ministry of Finance upon request.

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


LRO # 62 Charge/Mortgage

Receipted as WE1708027 on 2023 11 02

at 15:55

The applicant(s) hereby applies to the Land Registrar.

yyyy mm dd

Page 1 of 2

Properties

PIN

17566 - 0052 LT

Interest/Estate

Fee Simple

Description

PT LT 28 CON 1 SALTFLEET BEING PTS 9,10 & 28 PL 62R15125; CITY OF HAMILTON

Address

490 NASH ROAD NORTH

 

 

 

HAMILTON

 

 

Chargor(s)

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

Name

SUSGLOBAL ENERGY CANADA CORP.

Address for Service

200 Davenport Road

 

Toronto, Ontario M5R 1J2
 

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

This document is not authorized under Power of Attorney by this party.
 
Chargee(s)     Capacity Share

Name SNAVE HOLDINGS LTD.      
Address for Service 206 Lakeside Avenue      
  Burlington, ON L7N 1T5      
         
Provisions        
         
Principal $2,000,000.00 Currency CDN  
Calculation Period Monthly, not in advance      
Balance Due Date 2025/11/02      
Interest Rate 7% per annum      
Payments $11,666.67      
Interest Adjustment Date 2023 11 02      
Payment Date Monthly      
First Payment Date 2023 12 02      
Last Payment Date 2025 11 02      
Standard Charge Terms 200033      
Insurance Amount Full insurable value      
Guarantor        

Additional Provisions

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

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

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


Signed By

Pamela Margaret Lord

69 Markland Street

acting for

Signed 2023 11 02

 

 

Hamilton

Chargor(s)

 

 

 

L8P 2J8

 

 

Tel

905-777-1136

 

 

 

Fax

905-777-1140

 

 

 

I have the authority to sign and register the document on behalf of the Chargor(s).

 

 

Submitted By

PAUL D. MAZZA

69 Markland Street

 2023 11 02

 

Hamilton

Hamilton

 

L8P 2J8

 

Tel        905-777-1136

 

 

Fax       905-777-1140

 

 



LRO # 62 Charge/Mortgage

Receipted as WE1708027 on 2023 11 02

at 15:55

The applicant(s) hereby applies to the Land Registrar.

yyyy mm dd

Page 2 of 2

Fees/Taxes/Payment

Statutory Registration Fee $69.00
Total Paid $69.00

File Number

Chargor Client File Number : 23.1069 [ATD/SM]


LRO # 21 Charge/Mortgage Receipted as HT339120 on 2023 11 02
at 15:56
The applicant(s) hereby applies to the Land Registrar. yyyy mm dd Page 1 of 6

Properties

PIN 40532 - 0031 LT Interest/Estate Fee Simple
Description PT LT 20 CON 8 THURLOW PT 1 21R18453; BELLEVILLE ; COUNTY OF HASTINGS
Address PHILLIPSTON ROAD    
  BELLEVILLE      
         
PIN 40532 - 0032 LT Interest/Estate Fee Simple
Description PT LT 20 CON 8 THURLOW PT 1 21R19513; BELLEVILLE; COUNTY OF HASTINGS
Address 704 PHILLIPSTON ROAD    
  ROSLIN      
         
PIN 40532 - 0033 LT Interest/Estate Fee Simple
Description PT LT 20 CON 8 THURLOW PT 2 21R19513; S/T QR266045; BELLEVILLE ; COUNTY
  OF HASTINGS      
Address PHILLIPSTON ROAD    
  BELLEVILLE      
         
PIN 40532 - 0041 LT Interest/Estate Fee Simple
Description PT LT 20 CON 8 THURLOW PT 25, 27 AND 29 21R6801; BELLEVILLE ; COUNTY OF
  HASTINGS      
       
Address PHILLIPSTON ROAD    
  BELLEVILLE      

Chargor(s)

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

Name

1684567 ONTARIO INC.

Address for Service

200 Davenport Road, Toronto, Ontario,

 

M5R 1J2
 

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

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

Chargee(s)

Capacity

Share

 

 

 

Name

R. WILLIAMSON CONSULTANTS LIMITED

350000/105000

 

 

0

Address for Service

86 Carrick Trail, Gravenhurst, Ontario, P1P 0A6

 

Name

P.I.C.K.S. INC.

350000/105000

 

 

0

Address for Service

1-85 West Wilmot Street, Richmond Hill, Ontario L4B 1K7

 

Name

2654666 ONTARIO INC.

350000/105000

 

 

0

Address for Service

98-83 Mondeo Drive, Scarborough, Ontario M1P 5B6

 

Statements

Schedule: See Schedules

Provisions

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


LRO # 21 Charge/Mortgage Receipted as HT339120 on 2023 11 02 at 15:56
The applicant(s) hereby applies to the Land Registrar. yyyy mm dd Page 2 of 6

Signed By

Timothy Alex Petrou 200-9100 Jane Street, Building A acting for Signed 2023 10 30
    Vaughan Chargor(s)    
    L4K 0A4      
Tel 905-695-5300        
Fax 905-695-5301        
       
I have the authority to sign and register the document on behalf of the Chargor(s).      

Submitted By

CIRILLO PETROU LAW PROFESSIONAL 200-9100 Jane Street, Building A 2023 11 02
CORPORATION Vaughan  
    L4K 0A4  
Tel 905-695-5300    
Fax 905-695-5301    

Fees/Taxes/Payment

Statutory Registration Fee $69.00
Total Paid $69.00

File Number

Chargee Client File Number :

10362-23

ADDITIONAL PROVISIONS

1. POST-DATED CHEQUES

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

2. SALES CLAUSE

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

3. BY-LAW CONFORMITY AND OCCUPANCY CLAUSE

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

4. ADMINISTRATIVE FEES

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

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

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

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

5. ADMINISTRATION FEES

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

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

6. PREPAYMENT

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

7. INTEREST CALCULATION

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

8. RENT AND MANAGEMENT

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

9. MATRIMONIAL HOME

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

10. EXPROPRIATION

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

11. DEFAULT PROCEEDINGS

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

12. DEFAULT OF OTHER CHARGES

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

13. SEVERABILITY

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

14. LEGAL PROCEEDINGS

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

GUARANTORS CLAUSE

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

1. Hereby covenants and agrees with the mortgagee, as principal debtor and not as surety, to well and truly pay or cause to be paid to the mortgagee the principal money, interest, taxes and all other monies which the mortgagor has by this mortgage covenanted to pay to the mortgagee or which are secured by this mortgage or intended so to be secured, the said payments to be made on the days and times and in the manner provided for in this mortgage;

2. Hereby further covenants and agrees to keep, observe and perform the covenants, terms, provisos, stipulations and conditions of this mortgage which are to be kept, observed and performed by the mortgagor and at all times to indemnify, protect and save harmless the

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

3. Further agrees that the mortgagee may from time to time without notice to him extend the time for payment of all monies secured by this mortgage, amend the terms and times of payment and the rate of interest with respect to the said monies refrain from enforcing payment of the said monies, release any portion or portions of the mortgaged premises and waive or vary any of the covenants and conditions in this mortgage to be kept observed and performed by the mortgagor and grant any indulgence to the mortgagor in respect of any default by the mortgagor which may arise under this mortgage, and that notwithstanding any such act by the mortgagee, the guarantor shall be bound by the provisions of this mortgage until all of the monies secured under this said mortgage shall have been fully paid and satisfied;

4. Further acknowledges that the mortgagee may at any time grant or refuse any additional credit to the mortgagor, accept or release or renounce any collateral or other security, administer or otherwise deal with the land and premises described in this mortgage, take an assignment of the rentals with respect to the said lands and premises and apply any and all monies at any time received from the mortgagor or from any other person or from the proceeds of any securities given in connection with this mortgage in any manner the mortgagee may deem appropriate. The mortgagee may also utilize any and all insurance proceeds in reduction of the principal monies and interest secured, by this mortgage or for the refurbishing of the lands and premises or in any other manner that the mortgagee may in its absolute discretion deem advisable.

5. Agrees that all of the matters mentioned herein may be performed by the mortgagee without notice to him, the guarantor, without releasing or in any way modifying, altering, varying or in any way affecting the liability of the guarantor hereunder; and

6. Agrees that all of the covenants and agreements of him the guarantor, contained herein shall be binding upon him and his respective heirs, executors, administrators, and assigns and shall accrue to the benefit of the mortgagee, its successors and assigns and that his liability as guarantor hereunder and the liability of his executors, administrators and assigns shall be joint and several.

Collateral Provisions

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

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

Exhibit 31.1

CERTIFICATION

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

 

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 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: November 14, 2023

 

  

 

    

 

By:

/s/ Ike Makrimichalos

 

  

Ike Makrimichalos

 

  

Chief Financial Officer

 

  

(Principal Financial and Accounting Officer)

Exhibit 32.1

CERTIFICATION
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

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

1. The Registrant's Quarterly Report on Form 10-Q for the period ended September 30, 2023, to which this Certification is attached as Exhibit 32.1 (the "Report"), fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and

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: November 14, 2023

By:

/s/ Marc Hazout

 

Marc Hazout

 

Chief Executive Officer

 

(Principal Executive Officer)

By:

/s/ Ike Makrimichalos

 

Ike Makrimichalos

 

Chief Financial Officer

 

(Principal Financial and Accounting Officer)

v3.23.3
Document and Entity Information - shares
 9 Months Ended
Sep. 30, 2023
Nov. 14, 2023
Cover [Abstract]    
Entity Registrant Name SUSGLOBAL ENERGY CORP.  
Entity Central Index Key 0001652539  
Entity Current Reporting Status Yes  
Current Fiscal Year End Date --12-31  
Entity Filer Category Non-accelerated Filer  
Entity Common Stock, Shares Outstanding   124,783,286
Document Type 10-Q  
Document Period End Date Sep. 30, 2023  
Amendment Flag false  
Document Fiscal Period Focus Q3  
Document Fiscal Year Focus 2023  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Interactive Data Current Yes  
Document Quarterly Report true  
Document Transition Report false  
Entity File Number 000-56024  
Entity Incorporation, State or Country Code DE  
Entity Address, Address Line One 200 Davenport Road  
Entity Address, City or Town Toronto  
Entity Address, State or Province ON  
Entity Address, Postal Zip Code M5R 1J2  
City Area Code 416  
Local Phone Number 223-8500  
Entity Tax Identification Number 38-4039116  
v3.23.3
Interim Condensed Consolidated Balance Sheets
Sep. 30, 2023
USD ($)
Dec. 31, 2022
USD ($)
Current Assets    
Cash $ 6,431 $ 42,900
Funds held in trust 924,500 0
Trade receivables 111,582 69,193
Government remittances receivable 5,080 6,983
Inventory 42,889 58,695
Prepaid expenses and deposits 687,187 580,852
Total Current Assets 1,777,669 758,623
Long-lived Assets, net 8,822,265 9,107,152
Long-Term Assets 8,822,265 9,107,152
Total Assets 10,599,934 9,865,775
Current Liabilities    
Accounts payable 3,871,418 3,475,691
Government remittances payable 453,492 371,587
Accrued liabilities 1,983,650 1,781,258
Current portion of long-term debt 9,994,265 8,816,931
Current portion of obligations under capital lease 83,950 57,275
Convertible promissory notes 9,756,700 7,796,433
Loans payable to related parties 59,941 40,000
Total Current Liabilities 26,203,416 22,339,175
Long-term debt 0 52,495
Obligations under capital lease 0 64,483
Total Long-term Liabilities 0 116,978
Total Liabilities 26,203,416 22,456,153
Stockholders' Deficiency    
Preferred stock, $.0001 par value, 10,000,000 authorized, none issued and outstanding Common stock, $.0001 par value, 150,000,000 authorized, 124,783,286 (2022- 113,438,832) shares issued and outstanding 12,482 11,348
Additional paid-in capital 19,473,057 17,152,018
Shares to be issued 60,100 213,600
Accumulated deficit (35,520,256) (30,345,197)
Accumulated other comprehensive income 371,135 377,853
Stockholders' deficiency (15,603,482) (12,590,378)
Total Liabilities and Stockholders' Deficiency $ 10,599,934 $ 9,865,775
v3.23.3
Interim Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares
Sep. 30, 2023
Dec. 31, 2022
Statement of Financial Position [Abstract]    
Preferred Stock, Par Value Per Share $ 0.0001 $ 0.0001
Preferred Stock, Shares Authorized 10,000,000 10,000,000
Preferred Stock, Shares Issued 0 0
Preferred Stock, Shares Outstanding 0 0
Common Stock, Par Value Per Share $ 0.0001 $ 0.0001
Common Stock, Shares Authorized 150,000,000 150,000,000
Common Stock, Shares, Issued 124,783,286 113,438,832
Common Stock, Shares, Outstanding 124,783,286 113,438,832
v3.23.3
Interim Condensed Consolidated Statements of Operations and Comprehensive Loss
 3 Months Ended 9 Months Ended
Sep. 30, 2023
CAD ($)
shares
Sep. 30, 2023
USD ($)
$ / shares
shares
Sep. 30, 2022
CAD ($)
shares
Sep. 30, 2022
USD ($)
$ / shares
shares
Sep. 30, 2023
CAD ($)
shares
Sep. 30, 2023
USD ($)
$ / shares
shares
Sep. 30, 2022
CAD ($)
shares
Sep. 30, 2022
USD ($)
$ / shares
shares
Revenue   $ 186,901   $ 297,202   $ 505,075   $ 551,815
Cost of Sales                
Opening inventory   64,578   19,555   58,695   20,582
Depreciation $ 117,344 87,528 $ 144,564 112,731 $ 405,633 301,467 $ 441,390 344,196
Cost of sales   236,009   543,896   617,293   1,061,690
Less: closing inventory   (42,889)   (48,154)   (42,889)   (48,154)
Total cost of sales   193,120   495,742   574,404   1,013,536
Gross loss   (6,219)   (198,540)   (69,329)   (461,721)
Operating expenses                
Management compensation-stock-based compensation   57,600   60,113   172,800   180,339
Management compensation-fees   117,401   115,175   351,162   350,910
Marketing   923   (250)   122,098   1,003,959
Professional fees   103,930   190,653   286,723   812,738
Interest expense   140,161   208,537   499,222   589,488
Office and administration   56,567   67,377   176,120   259,193
Rent and occupancy   58,385   54,586   161,127   171,177
Insurance   10,974   12,867   33,167   76,304
Filing fees   8,562   9,699   31,852   71,242
Amortization of financing costs   26,901   27,752   72,296   94,916
Directors' compensation   18,631   14,366   53,211   43,864
Stock-based compensation   254,724   659,050   785,149   955,837
Repairs and maintenance   1,015   2,386   22,636   (8,773)
Foreign exchange loss (income)   214,406   378,510   (33,037)   518,690
Total operating expenses   1,070,180   1,800,821   2,734,526   5,119,884
Net loss from operating activities   (1,076,399)   (1,999,361)   (2,803,855)   (5,581,605)
Other expense   (116,710)   (1,697,619)   (2,371,204)   (3,207,270)
Net loss   (1,193,109)   (3,696,980)   (5,175,059)   (8,788,875)
Other comprehensive loss                
Foreign exchange income (loss)   327,961   652,484   (6,718)   819,813
Comprehensive loss   $ (865,148)   $ (3,044,496)   $ (5,181,777)   $ (7,969,062)
Net loss per share basic | $ / shares   $ (0.01)   $ (0.04)   $ (0.04)   $ (0.09)
Net loss per share diluted | $ / shares   $ (0.01)   $ (0.04)   $ (0.04)   $ (0.09)
Weighted average number of common shares outstanding basic | shares 122,972,355 122,972,355 105,189,849 105,189,849 120,391,943 120,391,943 100,335,858 100,335,858
Weighted average number of common shares outstanding diluted | shares 122,972,355 122,972,355 105,189,849 105,189,849 120,391,943 120,391,943 100,335,858 100,335,858
Direct wages and benefits [Member]                
Cost of Sales                
Cost of sales   $ 36,459   $ 52,860   $ 111,984   $ 158,356
Equipment rental, delivery, fuel and repairs and maintenance [Member]                
Cost of Sales                
Cost of sales   14,723   365,975   55,569   477,128
Utilities [Member]                
Cost of Sales                
Cost of sales   32,721   (7,760)   89,578   35,410
Outside contractors [Member]                
Cost of Sales                
Cost of sales   $ 0   $ 535   $ 0   $ 26,018
v3.23.3
Interim Condensed Consolidated Statements of Changes in Stockholders' Equity - USD ($)
Common Stock [Member]
Additional Paid-in Capital [Member]
Shares to be Issued [Member]
Accumulated Deficit [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Total
Beginning Balance at Dec. 31, 2021 $ 9,302 $ 11,272,599 $ 59,640 $ (18,334,649) $ (335,960) $ (7,329,068)
Beginning Balance (Shares) at Dec. 31, 2021 92,983,547          
Shares issued for proceeds previously received $ 23 48,967 (48,990)      
Shares issued for proceeds previously received (Shares) 230,000          
Shares issued to officers $ 105 240,345       240,450
Shares issued to officers (Shares) 1,050,000          
Shares issued to employee $ 1 1,989       1,990
Shares issued to employee (in shares) 10,000          
Shares issued for professional services $ 90 223,820       223,910
Shares issued for professional services (Shares) 895,000          
Shares issued on conversion of debt to equity $ 200 463,662       463,862
Shares issued on conversion of debt to equity (shares) 2,000,000          
Shares issued on private placement $ 4 16,556       16,560
Shares issued on private placement (Shares) 40,000          
Shares yet to be issued     29,450     29,450
Other comprehensive loss         (142,524) (142,524)
Net loss       (2,863,226)   (2,863,226)
Ending Balance at Mar. 31, 2022 $ 9,725 12,267,938 40,100 (21,197,875) (478,484) (9,358,596)
Ending Balance (Shares) at Mar. 31, 2022 97,208,547          
Beginning Balance at Dec. 31, 2021 $ 9,302 11,272,599 59,640 (18,334,649) (335,960) (7,329,068)
Beginning Balance (Shares) at Dec. 31, 2021 92,983,547          
Shares issued to officers           240,450
Net loss           (8,788,875)
Ending Balance at Sep. 30, 2022 $ 10,736 16,167,554 60,100 (27,123,524) 483,853 (10,401,281)
Ending Balance (Shares) at Sep. 30, 2022 107,313,135          
Beginning Balance at Dec. 31, 2021 $ 9,302 11,272,599 59,640 (18,334,649) (335,960) (7,329,068)
Beginning Balance (Shares) at Dec. 31, 2021 92,983,547          
Shares issued for professional services           $ 2,186,110
Shares issued for professional services (Shares)           6,655,000
Shares issued on private placement           $ 907,760
Shares issued on private placement (Shares)           4,444,041
Shares issued on issuance of debt on extinguishment of existing debt           $ 1,652,715
Shares issued on issuance of debt on extinguishment of existing debt (in Shares)           4,125,211
Ending Balance at Dec. 31, 2022 $ 11,348 17,152,018 213,600 (30,345,197) 377,853 $ (12,590,378)
Ending Balance (Shares) at Dec. 31, 2022 113,438,832          
Beginning Balance at Mar. 31, 2022 $ 9,725 12,267,938 40,100 (21,197,875) (478,484) (9,358,596)
Beginning Balance (Shares) at Mar. 31, 2022 97,208,547          
Shares yet to be issued on extinguishment of existing debt     61,470     61,470
Shares issued on private placement $ 140 427,860       428,000
Shares issued on private placement (Shares) 1,404,041          
Shares issued on issuance of debt on extinguishment of existing debt $ 398 1,590,847       1,591,245
Shares issued on issuance of debt on extinguishment of existing debt (in Shares) 3,975,211          
Shares yet to be issued     20,000     20,000
Other comprehensive loss         309,853 309,853
Net loss       (2,228,669)   (2,228,669)
Ending Balance at Jun. 30, 2022 $ 10,263 14,286,645 121,570 (23,426,544) (168,631) (9,176,697)
Ending Balance (Shares) at Jun. 30, 2022 102,587,799          
Shares issued for proceeds previously received $ 15 61,455 (61,470)      
Shares issued for proceeds previously received (Shares) 150,000          
Shares issued for professional services $ 471 1,780,979       1,781,450
Shares issued for professional services (Shares) 4,710,000          
Shares issued on conversion of debt to equity $ 11 38,451       38,462
Shares issued on conversion of debt to equity (shares) 106,868          
Return of shares to treasury $ (24) 24        
Return of shares to treasury (Shares) (241,502)          
Other comprehensive loss         652,484 652,484
Net loss       (3,696,980)   (3,696,980)
Ending Balance at Sep. 30, 2022 $ 10,736 16,167,554 60,100 (27,123,524) 483,853 (10,401,281)
Ending Balance (Shares) at Sep. 30, 2022 107,313,135          
Beginning Balance at Dec. 31, 2022 $ 11,348 17,152,018 213,600 (30,345,197) 377,853 (12,590,378)
Beginning Balance (Shares) at Dec. 31, 2022 113,438,832          
Shares issued for proceeds previously received $ 50 153,450 (153,500)      
Shares issued for proceeds previously received (Shares) 500,000          
Shares issued to officers $ 310 446,090       446,400
Shares issued to officers (Shares) 3,100,000          
Shares issued to employee $ 2 2,878       2,880
Shares issued to employee (in shares) 20,000          
Shares issued to directors $ 10 20,990       21,000
Shares issued to directors (Shares) 100,000          
Shares issued for professional services $ 41 63,439       63,480
Shares issued for professional services (Shares) 410,000          
Shares issued on conversion of debt to equity $ 105 220,049       220,154
Shares issued on conversion of debt to equity (shares) 1,049,413          
Other comprehensive loss         (6,634) (6,634)
Net loss       (1,035,172)   (1,035,172)
Ending Balance at Mar. 31, 2023 $ 11,866 18,058,914 60,100 (31,380,369) 371,219 (12,878,270)
Ending Balance (Shares) at Mar. 31, 2023 118,618,245          
Beginning Balance at Dec. 31, 2022 $ 11,348 17,152,018 213,600 (30,345,197) 377,853 (12,590,378)
Beginning Balance (Shares) at Dec. 31, 2022 113,438,832          
Shares issued to officers           446,400
Shares issued for professional services           $ 396,895
Shares issued for professional services (Shares)           1,790,000
Shares issued on private placement           $ 380,971
Shares issued on private placement (Shares)           1,536,582
Net loss           $ (5,175,059)
Ending Balance at Sep. 30, 2023 $ 12,482 19,473,057 60,100 (35,520,256) 371,135 (15,603,482)
Ending Balance (Shares) at Sep. 30, 2023 124,783,286          
Beginning Balance at Mar. 31, 2023 $ 11,866 18,058,914 60,100 (31,380,369) 371,219 (12,878,270)
Beginning Balance (Shares) at Mar. 31, 2023 118,618,245          
Shares issued on conversion of related party debt and accounts payable $ 117 278,728       278,845
Shares issued on conversion of related party debt and accounts payable (Shares) 1,167,371          
Shares issued for professional services $ 63 139,102       139,165
Shares issued for professional services (Shares) 630,000          
Shares issued on conversion of debt to equity $ 60 153,786       153,846
Shares issued on conversion of debt to equity (shares) 601,296          
Shares issued on private placement $ 31 101,008       101,039
Shares issued on private placement (Shares) 310,888          
Shares yet to be issued on private placement received     128,248     128,248
Other comprehensive loss         (328,045) (328,045)
Net loss       (2,946,778)   (2,946,778)
Ending Balance at Jun. 30, 2023 $ 12,137 18,731,538 188,348 (34,327,147) 43,174 (15,351,950)
Ending Balance (Shares) at Jun. 30, 2023 121,327,800          
Shares issued for proceeds previously received $ 53 128,195 (128,248)      
Shares issued for proceeds previously received (Shares) 531,250          
Shares issued on conversion of related party debt and accounts payable $ 125 233,433       233,558
Shares issued on conversion of related party debt and accounts payable (Shares) 1,254,792          
Shares issued for professional services $ 75 194,175       194,250
Shares issued for professional services (Shares) 750,000          
Shares issued for other services $ 23 34,101       34,124
Shares issued for other services (Shares) 225,000          
Shares issued on private placement $ 69 151,615       151,684
Shares issued on private placement (Shares) 694,444          
Other comprehensive loss         327,961 327,961
Net loss       (1,193,109)   (1,193,109)
Ending Balance at Sep. 30, 2023 $ 12,482 $ 19,473,057 $ 60,100 $ (35,520,256) $ 371,135 $ (15,603,482)
Ending Balance (Shares) at Sep. 30, 2023 124,783,286          
v3.23.3
Interim Condensed Consolidated Statements of Cash Flows - USD ($)
 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Cash flows from operating activities    
Net loss $ (5,175,059) $ (8,788,875)
Adjustments for:    
Depreciation 302,388 345,163
Amortization of financing fees 72,296 94,916
Stock-based compensation 957,949 1,136,176
Loss on conversion of convertible promissory notes 74,359 0
Loss on revaluation of convertible promissory notes 2,296,845 7,232,090
Gain on extinguishment of convertible promissory notes 0 (4,274,820)
Changes in non-cash working capital:    
Non-cash addition to convertible promissory notes on amendment   387,100
Trade receivables (42,473) (16,628)
Government remittances receivable 1,925 (41,581)
Other receivable 0 (150,094)
Inventory 15,986 (31,119)
Prepaid expenses and deposits (235,374) (169,383)
Accounts payable 626,652 2,866,933
Government remittances payable 81,646 89,758
Accrued liabilities 200,225 788,328
Net cash used in operating activities (822,635) (532,036)
Cash flows from investing activities    
Purchase of long-lived assets 0 (1,894,619)
Net cash (used in) investing activities 0 (1,894,619)
Cash flows from financing activities    
Advances of long-term debt 1,114,800 0
Repayment of long-term debt (27,884) (61,784)
Financing fee on long-term debt (44,592) 0
Repayments of obligations under capital lease (38,207) (70,322)
Advances on convertible promissory notes 0 2,080,000
Repayment of convertible promissory notes 0 (85,880)
Advances of loans payable to related parties 389,520 133,482
Repayment of loans payable to related parties (92,725) (48,660)
Proceeds on private placement 380,971 444,560
Subscription payable proceeds 0 0
Net cash provided by financing activities 1,681,883 2,391,396
Effect of exchange rate on cash 28,783 3,340
Increase (decrease) in cash 888,031 (31,919)
Cash and cash equivalents-beginning of period 42,900 36,033
Cash and cash equivalents and restricted cash-end of period 930,931 4,114
Supplemental Cash Flow Disclosure:    
Interest paid 322,785 406,877
Supplemental Non-Cash Disclosure:    
Common stock issued at fair value for conversion of debt, plus accrued interest, and other fees 374,000 502,324
Common stock issued at fair value on extinguishment of existing debt 0 1,591,245
Common stock yet to be issued on extinguishment of existing debt 0 61,470
Common stock issued at fair value for conversion of related party debt and accounts payable 512,403 0
Share issued for prepaid services $ 56,650 $ 0
v3.23.3
Nature of Business and Basis of Presentation
 9 Months Ended
Sep. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Nature of Business and Basis of Presentation [Text Block]

1. Nature of Business and Basis of Presentation

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

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

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

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

These interim condensed consolidated financial statements of SusGlobal and its wholly-owned subsidiaries, SusGlobal Energy Canada Corp. ("SECC"), SusGlobal Energy Canada I Ltd. ("SGECI"), SusGlobal Energy Belleville Ltd. ("SGEBL"), SusGlobal Energy Hamilton Ltd. ("SEHL") and 1684567 Ontario Inc. ("1684567") (together, the "Company"), have been prepared following generally accepted accounting principles in the United States ("US GAAP") for interim financial information and the Securities Exchange Commission ("SEC") instructions to Form 10-Q and Article 8 of SEC Regulation S-X, and are expressed in United States Dollars. The Company's functional currency is the Canadian Dollar ("C$"). In the opinion of management, all adjustments necessary for a fair presentation have been included.
v3.23.3
Going Concern
 9 Months Ended
Sep. 30, 2023
Going Concern [Abstract]  
Going Concern [Text Block]

2. Going Concern

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

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

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

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

These interim condensed consolidated financial statements do not include any adjustments to reflect the future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result if the Company was unable to continue as a going concern.
v3.23.3
Significant Accounting Policies
 9 Months Ended
Sep. 30, 2023
Accounting Policies [Abstract]  
Significant Accounting Policies [Text Block]

3. Significant Accounting Policies

These interim condensed consolidated financial statements do not include all of the information and footnotes required by US GAAP for complete financial statements and should be read in conjunction with the consolidated financial statements of the Company for the years ended December 31, 2022, and 2021 and their accompanying notes.
v3.23.3
Recently Issued Accounting Pronouncements
 9 Months Ended
Sep. 30, 2023
Recently Issued Accounting Pronouncements [Abstract]  
Recently Issued Accounting Pronouncements [Text Block]

4. Recently Issued Accounting Pronouncements

Accounting Pronouncements Recently Adopted

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

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

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

There were no new accounting pronouncements issued and not yet adopted that were expected to have a material impact on the Company's interim condensed consolidated financial position or results of operations in the current or future periods.
v3.23.3
Financial Instruments
 9 Months Ended
Sep. 30, 2023
Investments, All Other Investments [Abstract]  
Financial Instruments [Text Block]

5. Financial Instruments

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

Interest, Credit and Concentration Risk

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

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

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

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

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

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

Liquidity Risk

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

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

Currency Risk

Although the Company's functional currency is the C$, the Company realizes a portion of its expenses in United States Dollars ("$"). Consequently, certain assets and liabilities are exposed to foreign currency fluctuations. As at September 30, 2023, $352,299 (December 31, 2022-$80,843) of the Company's net monetary liabilities were denominated in $. The Company has not entered into any hedging transactions to reduce the exposure to currency risk.
v3.23.3
Funds Held in Trust
 9 Months Ended
Sep. 30, 2023
Funds Held In Trust [Abstract]  
Funds Held in Trust [Text Block]

6. Funds Held in Trust

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

Refer also to subsequent events, note 19(b).
v3.23.3
Long-lived Assets, net
 9 Months Ended
Sep. 30, 2023
Long lived Assets net [Abstract]  
Long-lived Assets, net [Text Block]

7. Long-lived Assets, net

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

Depreciation for the three and nine-month periods ended September 30, 2023, is disclosed in cost of sales in the amount of $87,528 (C$117,344) and $301,467 (C$405,633) (2022-$112,731; C$144,564 and $344,196; C$441,390) respectively and in office and administration in the amount of $307 (C$413) and $921 (C$1,240) (2022-$325; C$413 and $967; C$1,240) respectively, in the interim condensed consolidated statements of operations and comprehensive loss.
v3.23.3
Related Party Transactions
 9 Months Ended
Sep. 30, 2023
Related Party Transactions [Abstract]  
Related Party Transactions [Text Block]

8. Related Party Transactions

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

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

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

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

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

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

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

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

Furthermore, for the three and nine-month periods ended September 30, 2023, the Company recognized management stock-based compensation expense of $57,600 and $172,800 (2022-$60,113 and $180,339) respectively, on the common stock issued to the CEO and the CFO, 3,000,000 and 100,000 common stock, respectively, as stipulated in their executive consulting agreements, effective January 1, 2023 valued at the trading price on the Effective Date. The total stock-based compensation on the issuance of the common stock totaled $446,400 (2022-$240,450). The portion to be expensed for the balance of the consulting agreements, $273,600 (2022-$60,111) is included in prepaid expenses and deposits in the interim condensed consolidated balance sheets.
v3.23.3
Long-Term Debt
 9 Months Ended
Sep. 30, 2023
Debt Disclosure [Abstract]  
Long-Term Debt [Text Block]

9. Long-Term Debt

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

As a result of the Company being in default on its obligations for its convertible promissory notes, the obligations under this bank term loan are disclosed as a current obligation.
v3.23.3
Obligations under Capital Lease
 9 Months Ended
Sep. 30, 2023
Obligations Under Capital Lease [Abstract]  
Obligations under Capital Lease [Text Block]

10. Obligations under Capital Lease

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

Refer also to going concern, note 2.

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

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

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

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

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

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

As a result of the Company being in default on its obligations for its convertible promissory notes, the obligations under capital lease are disclosed as a current obligation.
v3.23.3
Convertible Promissory Notes
 9 Months Ended
Sep. 30, 2023
Convertible Notes Payable [Abstract]  
Convertible Promissory Notes [Text Block]

11. Convertible Promissory Notes

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Refer also to going concern, note 2.

Fair value option for the convertible promissory notes

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

Gains and losses attributable to changes in credit risk were insignificant during the three and nine-month periods ended September 30, 2023 and 2022. The Company recognized a loss of $nil (2022-$659,526) at the time of issuance of the convertible promissory notes and an additional loss of $117,710 and $2,296,845 (2022-$1,447,619 and $6,572,564) attributed to the change in fair value of the convertible promissory notes for the three and nine-month periods ended September 30, 2023. In addition, for the three and nine-month periods ended September 30, 2023, the Company recognized a gain on extinguishment of convertible promissory notes of $nil and $nil (2022-$nil and $4,274,820). Further, for the three and nine-month periods ended September 30, 2023, the Company incurred debt issuance costs of $nil and $nil (2022-$nil and $101,000) respectively, which were expensed as incurred.
v3.23.3
Fair Value Measurement
 9 Months Ended
Sep. 30, 2023
Fair Value Disclosures [Abstract]  
Fair Value Measurement [Text Block]

12. Fair Value Measurement

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

    Fair value as at September 30, 2023 and December 31, 2022 Using:  
    Level 3     September 30, 2023     December 31, 2022  
Assets: $ -   $ -   $ -  
Liabilities:                  
Convertible promissory notes   9,756,700     9,756,700     7,796,433  
  $ 9,756,700   $ 9,756,700   $ 7,796,433  

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

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

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

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

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

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

Refer also to going concern, note 2.
v3.23.3
Loans Payable to Related Parties
 9 Months Ended
Sep. 30, 2023
Loan Payable To Related Party [Abstract]  
Loans Payable to Related Parties [Text Block]

13. Loans Payable to Related Parties

    September 30,
2023		     December 31,
2022		  
Directors $ 47,500   $ 40,000  
Officers   12,441     -  
Total $ 59,941   $ 40,000  

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

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

The loans from the officers are non-interest bearing and due on demand.
v3.23.3
Capital Stock
 9 Months Ended
Sep. 30, 2023
Equity [Abstract]  
Capital Stock [Text Block]

14. Capital Stock

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

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

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

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

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

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

As at September 30, 2023, the Company recorded a balance of $60,100 (December 31, 2022-$213,600 for 750,000 shares to be issued relating to consulting agreements, of which 500,000 were issued on January 27, 2023, valued on the effective dates stipulated in the consulting agreements) for 250,000 shares to be issued relating to a consulting agreement with a service provider for professional services, valued on the effective dates stipulated in the consulting agreement. These professional services are included under stock-based compensation in the interim condensed consolidated statements of operations and comprehensive loss. During the three-month period ended March 31, 2023, the Company issued 500,000 (2022-230,000) common shares for proceeds previously received.
v3.23.3
Commitments
 9 Months Ended
Sep. 30, 2023
Commitments and Contingencies Disclosure [Abstract]  
Commitments [Text Block]

15. Commitments

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

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

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

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

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

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

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

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

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

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

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

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

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

The future minimum commitment is as follows:

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

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

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

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

As at September 30, 2023, the MECP has not drawn on the letter of credit. The Company is in the process of obtaining a letter of credit for the new financial assurance with the MECP in the amount of $471,596 (C$637,637).
v3.23.3
Other Expenses
 9 Months Ended
Sep. 30, 2023
Other Income and Expenses [Abstract]  
Other Expenses [Text Block]

16. Other Expenses

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

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

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

(c) Gain on extinguishment of convertible promissory notes. Refer to note 11, convertible promissory notes.

(d) Accrued settlement payment for the release of services of a party for an underwriting offering dated March 23, 2022 and amended May 23, 2022.
v3.23.3
Economic Dependence
 9 Months Ended
Sep. 30, 2023
Risks and Uncertainties [Abstract]  
Economic Dependence [Text Block]

17. Economic Dependence

The Company generated 95% and 93% of its revenue from four customers, during the three and nine-month periods ended September 30, 2023 (2022-93% and 85% from four customers) respectively.
v3.23.3
Legal Proceedings
 9 Months Ended
Sep. 30, 2023
Legal Proceeding [Abstract]  
Legal Proceedings [Text Block]

18. Legal Proceedings

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

The Company has a claim against it for unpaid legal fees in the amount of $48,252 (C$65,241). The amount is included in accounts payable on the Company's interim condensed consolidated balance sheets.
v3.23.3
Subsequent Events
 9 Months Ended
Sep. 30, 2023
Subsequent Events [Abstract]  
Subsequent Events [Text Block]

19. Subsequent Events

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

 

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

 

(b) On November 3, 2023, the funds held in escrow, in the amount of $924,500 (C$1,250,000), were released to PACE (now Alterna Savings and Credit Union Limited "Alterna") and Alterna released all security it held to the Company.
v3.23.3
Long-lived Assets, net (Tables)
 9 Months Ended
Sep. 30, 2023
Long lived Assets net [Abstract]  
Schedule of long-lived assets [Table Text Block]
          September 30,           December 31,  
          2023           2022  
    Cost     Accumulated
depreciation		     Net book value     Net book value  
                         
Land $ 3,169,512   $ -   $ 3,169,512   $ 3,163,941  
Property under construction   3,554,896     -     3,554,896     3,548,648  
Composting buildings   2,242,555     805,110     1,437,445     1,535,656  
Gore cover system   1,041,373     604,265     437,108     514,306  
Driveway and paving   342,805     165,689     177,116     197,336  
Machinery and equipment   107,288     103,342     3,946     28,036  
Equipment under capital lease   288,185     288,185     -     39,574  
Signage   6,113     4,578     1,535     2,447  
Automotive equipment   162,829     122,122     40,707     77,208  
  $ 10,915,556   $ 2,093,291   $ 8,822,265   $ 9,107,152  
v3.23.3
Long-Term Debt (Tables)
 9 Months Ended
Sep. 30, 2023
Debt Disclosure [Abstract]  
Schedule of long-term debt instruments [Table Text Block]
      September 30,
2023		     December 31,
2022		  
(a) PACE Credit Facility-see below $ 697,199   $ 695,974  
(b) PACE Credit Facility-see below   389,874     389,188  
(c) PACE Corporate Term Loan-see below   2,365,582     2,361,424  
(d)i.) Mortgage Payable-due December 1, 2023   3,835,462     3,782,751  
(d)ii.) Mortgage Payable-due August 17, 2023   1,479,200     1,476,600  
(d)iii.) Mortgage Payable-due March 1, 2024   1,090,920     -  
(e) Canada Emergency Business Account-Due December 31, 2023   73,960     73,830  
(f) Corporate Term Loan-Due April 7, 2025   62,068     89,659  
      9,994,265     8,869,426  
Current portion   (9,994,265 )   (8,816,931 )
Long-Term portion $ -   $ 52,495  
v3.23.3
Obligations under Capital Lease (Tables)
 9 Months Ended
Sep. 30, 2023
Obligations Under Capital Lease [Abstract]  
Schedule of obligations under capital lease [Table Text Block]
                September 30, 2023     December 31, 2022  
    (a)     (b)     Total     Total  
Obligations under Capital Lease $ -   $ 83,950   $ 83,950   $ 121,758  
Less: current portion         (83,950 )   (83,950 )   (57,275 )
Long-term portion $ -   $ -   $ -   $ 64,483  
Schedule of future minimum lease payments for capital leases [Table Text Block]
In the three-month period ending December 31, 2023 $ 20,272  
In the year ending December 31, 2024   60,817  
In the year ending December 31, 2025   5,142  
    86,231  
Less: imputed interest   (2,281 )
Total $ 83,950  
v3.23.3
Convertible Promissory Notes (Tables)
 9 Months Ended
Sep. 30, 2023
Convertible Notes Payable [Abstract]  
Schedule of convertible promissory notes [Table Text Block]
      September 30, 2023     December 31, 2022
               
(a) Convertible promissory notes-October 28 and 29, 2021 $ 2,251,696   $ 2,599,925  
(b) Convertible promissory notes-March 3 and 7, 2022   5,948,014     3,696,044  
(c) Convertible promissory note- June 23, 2022   1,556,990     1,500,464  
    $ 9,756,700   $ 7,796,433  
v3.23.3
Fair Value Measurement (Tables)
 9 Months Ended
Sep. 30, 2023
Fair Value Disclosures [Abstract]  
Schedule of financial assets and liabilities that measured at fair value on a recurring basis [Table Text Block]
    Fair value as at September 30, 2023 and December 31, 2022 Using:  
    Level 3     September 30, 2023     December 31, 2022  
Assets: $ -   $ -   $ -  
Liabilities:                  
Convertible promissory notes   9,756,700     9,756,700     7,796,433  
  $ 9,756,700   $ 9,756,700   $ 7,796,433  
Schedule of change in Level 3 financial instruments [Table Text Block]
    September 30, 2023     December 31, 2022  
Fair value at December 31, 2022 $ 7,796,433   $ 3,798,516  
Fair value at issuance   -     2,159,526  
Amendments   2,180,923     -  
Conversions/repayments   (336,578 )   (136,880 )
Mark to market   115,922     7,663,844  
Settlement   -     (5,688,573 )
Fair value at September 30, 2023 and December 31, 2022 $ 9,756,700   $ 7,796,433  
v3.23.3
Loans Payable to Related Parties (Tables)
 9 Months Ended
Sep. 30, 2023
Loan Payable To Related Party [Abstract]  
Schedule of loan payable to related party [Table Text Block]
    September 30,
2023		     December 31,
2022		  
Directors $ 47,500   $ 40,000  
Officers   12,441     -  
Total $ 59,941   $ 40,000  
v3.23.3
Commitments (Tables)
 9 Months Ended
Sep. 30, 2023
The CEO and the CFO [Member]  
Other Commitments [Line Items]  
Schedule of commitments [Table Text Block]
For the three-month period ending December 31, 2023 $ 116,487  
For the year ending December 31, 2024   443,760  
  $ 560,247  
Astoria Organic Matters Ltd. [Member]  
Other Commitments [Line Items]  
Schedule of commitments [Table Text Block]
For the three-month period ending December 31, 2023 $ -  
For the year ending December 31, 2024   7,396  
For the year ending December 31, 2025   7,396  
  $ 14,792  
v3.23.3
Other Expenses (Tables)
 9 Months Ended
Sep. 30, 2023
Other Income and Expenses [Abstract]  
Schedule of other expense [Table Text Block]
    September 30,
2023		     September 30,
2022		  
(a) Loss on conversion of convertible promissory note $ (74,359 ) $ -  
(b) Loss on revaluation of convertible promissory notes   (2,296,845 )   (7,232,090 )
(c) Gain on extinguishment of convertible promissory notes   -     4,274,820  
(d) Settlement payment   -     (250,000 )
  $ (2,371,204 ) $ (3,207,270 )
v3.23.3
Going Concern (Narrative) (Details) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Jun. 30, 2023
Mar. 31, 2023
Sep. 30, 2022
Jun. 30, 2022
Mar. 31, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Going Concern [Abstract]                  
Net loss $ (1,193,109) $ (2,946,778) $ (1,035,172) $ (3,696,980) $ (2,228,669) $ (2,863,226) $ (5,175,059) $ (8,788,875)  
Working capital deficit 24,425,747           24,425,747   $ 21,580,552
Accumulated deficit $ (35,520,256)           $ (35,520,256)   $ (30,345,197)
v3.23.3
Financial Instruments (Narrative) (Details)
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2023
CAD ($)
Sep. 30, 2022
Sep. 30, 2023
CAD ($)
Customer
Sep. 30, 2022
Dec. 31, 2022
CAD ($)
Customer
Sep. 30, 2023
USD ($)
Dec. 31, 2022
USD ($)
Product Information [Line Items]              
Current portion of long term debt and convertible promissory notes $ 5,285,860   $ 5,285,860   $ 9,868,274 $ 3,909,422 $ 7,285,747
Allowance for doubtful accounts $ 0   $ 0   $ 0 0 0
Net monetary liabilities denominated in USD | $           $ 352,299 $ 80,843
Customer Concentration Risk [Member] | Greater Than 5% Total Trade Receivables [Member]              
Product Information [Line Items]              
Number of customers     5   4    
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer Three [Member]              
Product Information [Line Items]              
Number of customers         4    
Concentration Risk, Percentage         90.00%    
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer Five [Member]              
Product Information [Line Items]              
Number of customers     5        
Concentration Risk, Percentage     98.00%        
Customer Concentration Risk [Member] | Revenue Benchmark [Member]              
Product Information [Line Items]              
Concentration Risk Threshold Percentage     93.00%        
Concentration Risk, Benchmark Description     10% or more of the Company's total revenue.   10% or more of the Company's total revenue.    
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Four Customers [Member]              
Product Information [Line Items]              
Concentration Risk, Percentage 95.00% 93.00% 93.00% 85.00%      
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Customer One [Member]              
Product Information [Line Items]              
Concentration Risk, Percentage     37.00% 85.00%      
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Customer Two [Member]              
Product Information [Line Items]              
Concentration Risk, Percentage     31.00% 36.00%      
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Customer Three [Member]              
Product Information [Line Items]              
Concentration Risk, Percentage     13.00% 24.00%      
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Customer Four [Member]              
Product Information [Line Items]              
Concentration Risk, Percentage     12.00% 13.00%      
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Customer Five [Member]              
Product Information [Line Items]              
Concentration Risk, Percentage       12.00%      
v3.23.3
Funds Held in Trust (Narrative) (Details)
Mar. 01, 2023
CAD ($)
Mar. 01, 2023
USD ($)
Sep. 30, 2023
CAD ($)
Sep. 30, 2023
USD ($)
Mar. 01, 2023
USD ($)
Dec. 31, 2022
USD ($)
Funds held in trust     $ 1,250,000 $ 924,500   $ 0
Long-term debt       9,994,265   8,869,426
Accrued liabilities       1,983,650   $ 1,781,258
Secured Debt [Member]            
Description of collateral raised the funds by securing a 2nd. mortgage raised the funds by securing a 2nd. mortgage        
Collateral amount $ 1,500,000       $ 1,109,400  
Amount prior to disbursements $ 250,000 $ 184,900        
PACE [Member]            
Funds held in trust     1,250,000 924,500    
Long-term debt     4,668,274 3,452,655    
Accrued liabilities     529,725 391,785    
PACE [Member] | Letter of Credit [Member]            
Other commitment     276,831 204,744    
PACE [Member] | New Letter of Credit [Member]            
Other commitment     $ 637,637 $ 471,596    
v3.23.3
Long-lived Assets, net (Narrative) (Details)
 3 Months Ended 9 Months Ended
Sep. 30, 2023
CAD ($)
Sep. 30, 2023
USD ($)
Sep. 30, 2022
CAD ($)
Sep. 30, 2022
USD ($)
Sep. 30, 2023
CAD ($)
Sep. 30, 2023
USD ($)
Sep. 30, 2022
CAD ($)
Sep. 30, 2022
USD ($)
Property, Plant and Equipment [Line Items]                
Depreciation disclosed in cost of sales $ 117,344 $ 87,528 $ 144,564 $ 112,731 $ 405,633 $ 301,467 $ 441,390 $ 344,196
Office and administration $ 413 $ 307 $ 413 $ 325 $ 1,240 $ 921 $ 1,240 $ 967
v3.23.3
Long-lived Assets, net - Schedule of long-lived assets (Details) - USD ($)
Sep. 30, 2023
Dec. 31, 2022
Property, Plant and Equipment [Line Items]    
Cost $ 10,915,556  
Accumulated Depreciation 2,093,291  
Net book value 8,822,265 $ 9,107,152
Land [Member]    
Property, Plant and Equipment [Line Items]    
Cost 3,169,512  
Accumulated Depreciation 0  
Net book value 3,169,512 3,163,941
Property under construction [Member]    
Property, Plant and Equipment [Line Items]    
Cost 3,554,896  
Accumulated Depreciation 0  
Net book value 3,554,896 3,548,648
Composting buildings [Member]    
Property, Plant and Equipment [Line Items]    
Cost 2,242,555  
Accumulated Depreciation 805,110  
Net book value 1,437,445 1,535,656
Gore cover system [Member]    
Property, Plant and Equipment [Line Items]    
Cost 1,041,373  
Accumulated Depreciation 604,265  
Net book value 437,108 514,306
Driveway and paving [Member]    
Property, Plant and Equipment [Line Items]    
Cost 342,805  
Accumulated Depreciation 165,689  
Net book value 177,116 197,336
Machinery and equipment [Member]    
Property, Plant and Equipment [Line Items]    
Cost 107,288  
Accumulated Depreciation 103,342  
Net book value 3,946 28,036
Equipment under capital lease [Member]    
Property, Plant and Equipment [Line Items]    
Cost 288,185  
Accumulated Depreciation 288,185  
Net book value 0 39,574
Signage [Member]    
Property, Plant and Equipment [Line Items]    
Cost 6,113  
Accumulated Depreciation 4,578  
Net book value 1,535 2,447
Automotive equipment [Member]    
Property, Plant and Equipment [Line Items]    
Cost 162,829  
Accumulated Depreciation 122,122  
Net book value $ 40,707 $ 77,208
v3.23.3
Related Party Transactions (Narrative) (Details)
 3 Months Ended 9 Months Ended 12 Months Ended
Mar. 01, 2023
USD ($)
shares
Jan. 03, 2023
shares
Sep. 30, 2023
CAD ($)
shares
Sep. 30, 2023
USD ($)
shares
Jun. 30, 2023
USD ($)
Mar. 31, 2023
USD ($)
Sep. 30, 2022
CAD ($)
shares
Sep. 30, 2022
USD ($)
shares
Jun. 30, 2022
USD ($)
Mar. 31, 2022
USD ($)
Sep. 30, 2023
CAD ($)
shares
Sep. 30, 2023
USD ($)
shares
Sep. 30, 2022
CAD ($)
shares
Sep. 30, 2022
USD ($)
shares
Dec. 31, 2024
CAD ($)
Dec. 31, 2024
USD ($)
Dec. 31, 2022
USD ($)
shares
Sep. 30, 2023
USD ($)
$ / shares
Dec. 31, 2022
CAD ($)
Dec. 31, 2022
USD ($)
Sep. 30, 2022
USD ($)
Related Party Transaction [Line Items]                                          
Rent expense | $       $ 58,385       $ 54,586       $ 161,127   $ 171,177              
Director compensation | $       18,631       14,366       53,211   43,864              
Unpaid remuneration and expenses included in accounts payable     $ 276,809               $ 276,809             $ 204,728 $ 219,138 $ 161,790  
Due to related party     145,530               $ 145,530             107,634 30,753 22,705  
Management compensation-stock- based compensation | $       57,600       60,113       $ 172,800   180,339              
Number of shares issued   225,000                 1,790,000 1,790,000         6,655,000        
Shares issued to officers | $           $ 446,400       $ 240,450   $ 446,400   240,450              
Prepaid expenses and deposits | $                       273,600   60,111              
Shares issued on private placement | $       151,684 $ 101,039       $ 428,000 $ 16,560   $ 380,971         $ 907,760        
Shares issued on private placement (Shares)                     1,536,582 1,536,582         4,444,041        
Travellers International Inc. [Member]                                          
Related Party Transaction [Line Items]                                          
Management fees expense     120,000 89,449     $ 120,000 92,189     $ 360,000 $ 267,552 $ 360,000 280,728              
Loans converted     316,400 $ 233,558     $ 0 $ 0     688,883 $ 512,403 $ 0 $ 0              
Unpaid remuneration and expenses included in accounts payable     $ 688,883               $ 688,883             512,403 45,200 33,371  
Shares issued to officers (Shares)                     2,422,163 2,422,163         193,778        
Common shares issued upon conversion     1,254,792 1,254,792     0 0     2,422,163 2,422,163 0 0              
Chief Financial Officer [Member]                                          
Related Party Transaction [Line Items]                                          
Management fees expense     $ 37,500 $ 27,952     $ 30,000 $ 22,986     $ 112,500 $ 83,610 $ 90,000 $ 70,182              
Interest expense     0 0     0 0     0 $ 0 674 526              
Loans payable to related parties     0       36,000       $ 0   36,000         $ 0     $ 29,211
Number of shares issued                     100,000 100,000                  
Chief Financial Officer [Member] | Consulting Agreement [Member]                                          
Related Party Transaction [Line Items]                                          
Management compensation-stock- based compensation                     $ 12,500 $ 9,290                  
Shares issued to officers (Shares)                     100,000 100,000                  
Par value of shares issued to officers | $ / shares                                   $ 0.0001      
Haute Inc [Member]                                          
Related Party Transaction [Line Items]                                          
Rent expense     40,046 30,014     36,244 27,728     $ 108,251 $ 80,452 114,812 89,530              
Director [Member]                                          
Related Party Transaction [Line Items]                                          
Accrued director compensation     25,000 $ 18,631     $ 18,750 $ 14,366     71,597 53,211 $ 56,250 $ 43,864              
Unpaid remuneration and expenses included in accounts payable     $ 235,793               235,793             $ 174,393 $ 164,196 $ 121,226  
Shares issued to officers (Shares) 100,000                                        
Shares issued to officers | $ $ 21,000                                        
Director [Member] | Private Placement [Member]                                          
Related Party Transaction [Line Items]                                          
Shares issued on private placement                     $ 134,483 $ 101,039                  
Shares issued on private placement (Shares)                     310,888 310,888                  
Share price | $ / shares                                   $ 0.325      
Chief Executive Officer [Member]                                          
Related Party Transaction [Line Items]                                          
Number of shares issued                     3,000,000 3,000,000                  
Chief Executive Officer [Member] | Consulting Agreement [Member]                                          
Related Party Transaction [Line Items]                                          
Management compensation-stock- based compensation                     $ 40,000 $ 29,728     $ 50,000 $ 37,160          
Shares issued to officers (Shares)                     3,000,000 3,000,000                  
Par value of shares issued to officers | $ / shares                                   $ 0.0001      
v3.23.3
Long-Term Debt (Narrative) (Details)
 1 Months Ended 3 Months Ended 9 Months Ended
Aug. 13, 2021
CAD ($)
Aug. 13, 2021
USD ($)
Apr. 08, 2021
CAD ($)
Apr. 08, 2021
USD ($)
Sep. 13, 2017
CAD ($)
Sep. 13, 2017
USD ($)
Jun. 15, 2017
CAD ($)
Jun. 15, 2017
USD ($)
Sep. 30, 2023
CAD ($)
Sep. 30, 2023
USD ($)
Sep. 30, 2022
CAD ($)
Sep. 30, 2022
USD ($)
Sep. 30, 2023
CAD ($)
Sep. 30, 2023
USD ($)
Sep. 30, 2022
CAD ($)
Sep. 30, 2022
USD ($)
Sep. 30, 2023
USD ($)
Mar. 01, 2023
CAD ($)
Mar. 01, 2023
USD ($)
Dec. 31, 2022
CAD ($)
Dec. 31, 2022
USD ($)
Aug. 17, 2021
CAD ($)
Aug. 17, 2021
USD ($)
Apr. 08, 2021
USD ($)
Sep. 13, 2017
USD ($)
Jun. 15, 2017
USD ($)
Feb. 02, 2017
CAD ($)
Feb. 02, 2017
USD ($)
Debt Instrument [Line Items]                                                        
Funds held in trust                 $ 1,250,000       $ 1,250,000       $ 924,500       $ 0              
Long-term debt                                 9,994,265       8,869,426              
Accrued interest and default amounts                 58,950       58,950       43,599     $ 42,740 31,555              
PACE [Member]                                                        
Debt Instrument [Line Items]                                                        
Funds held in trust                 1,250,000       1,250,000       924,500                      
Long-term debt                 4,668,274       $ 4,668,274       3,452,655                      
Credit facility (a) [Member]                                                        
Debt Instrument [Line Items]                                                        
Long-term debt                                 697,199       695,974              
Line of credit facility, interest rate description                         The credit facility bore interest at the PACE base rate of 7.00% plus 1.25% per annum The credit facility bore interest at the PACE base rate of 7.00% plus 1.25% per annum                            
Line of credit facility, interest rate during period                         12.50% 12.50%                            
Debt instrument, periodic payment                         $ 8,764 $ 6,482                            
Credit facility (a) [Member] | Chief Executive Officer [Member]                                                        
Debt Instrument [Line Items]                                                        
Amount of personal guarantee                                                     $ 1,600,000 $ 1,183,360
Credit facility (b) [Member]                                                        
Debt Instrument [Line Items]                                                        
Long-term debt                                 389,874       389,188              
Line of credit facility, interest rate description             bore interest at the PACE base of 7.00% plus 1.25% per annum bore interest at the PACE base of 7.00% plus 1.25% per annum                                        
Line of credit facility, interest rate during period             12.50% 12.50%                                        
Debt face amount             $ 600,000                                     $ 443,760    
Debt instrument, periodic payment             $ 4,901 $ 3,625                                        
Credit facility (c) [Member]                                                        
Debt Instrument [Line Items]                                                        
Long-term debt                                 2,365,582       2,361,424              
Corporate Term Loan [Member]                                                        
Debt Instrument [Line Items]                                                        
Line of credit facility, interest rate description         bore interest at PACE base rate of 7.00% plus 1.25% per annum bore interest at PACE base rate of 7.00% plus 1.25% per annum                                            
Line of credit facility, interest rate during period         12.50% 12.50%                                            
Debt face amount         $ 3,724,147                                       $ 2,754,379      
Debt instrument, periodic payment         29,711 $ 21,974                                            
Cash collateral for letter of credit         $ 4,000,978                                       $ 2,959,123      
Interest expense, debt                 0 $ 0 $ 131,211 $ 100,983 139,089 $ 103,371 $ 327,535 $ 255,412                        
Accrued interest and default amounts                 529,725       $ 529,725       391,785     390,636 288,407              
First mortgage [Member]                                                        
Debt Instrument [Line Items]                                                        
Long-term debt                                 3,835,462       3,782,751              
Line of credit facility, interest rate description                         is repayable interest only on a monthly basis at an annual rate of the higher of the Royal Bank of Canada's prime rate plus 6.05% per annum is repayable interest only on a monthly basis at an annual rate of the higher of the Royal Bank of Canada's prime rate plus 6.05% per annum                            
Line of credit facility, interest rate during period                         13.25% 13.25%                            
Debt face amount                 5,200,000       $ 5,200,000       3,845,920     5,200,000 3,839,160 $ 2,000,000 $ 1,479,200          
Fourth tranche amount of long-term debt received $ 1,900,000 $ 1,405,240                                                    
Portion of fourth tranche used for portion fund to purchase property $ 1,853,933 $ 1,371,169                                                    
Financing fees on mortgage                 403,419       403,419       298,369                      
Unamortized finance fees                 $ 14,140       $ 14,140       $ 10,458     76,404 56,409              
Debt instrument, interest rate, stated percentage                 10.00%       10.00%       10.00%                      
Second mortgage [Member]                                                        
Debt Instrument [Line Items]                                                        
Debt face amount                                   $ 1,500,000 $ 1,109,400                  
Financing fees on mortgage                                   $ 60,000 $ 44,376                  
Unamortized finance fees                 $ 24,986       $ 24,986       $ 18,480                      
Debt instrument, interest rate, stated percentage                                   12.00% 12.00%                  
Accrued interest and default amounts                 14,301       14,301       10,577     $ 42,740 31,555              
Canada Emergency Business Account [Member]                                                        
Debt Instrument [Line Items]                                                        
Long-term debt                                 73,960       73,830              
Proceeds from the Canadian Emergency Benefit Account                         $ 100,000 $ 73,960                            
Description of terms of government grants                         If the loans are not repaid by December 31, 2022, the Company can make payments, interest only, on a monthly basis at an annual rate of 5%, under the extended term date, beginning January 1, 2023, maturing December 31, 2025. If the loans are not repaid by December 31, 2022, the Company can make payments, interest only, on a monthly basis at an annual rate of 5%, under the extended term date, beginning January 1, 2023, maturing December 31, 2025.                            
Description terms of partial forgiveness                         The CEBA term loan agreements were amended by extending the interest free repayment date by one year to December 31, 2023 (subsequently extended to January 18, 2024). If paid by December 31, 2023, 33.33% ($25,176; C$33,333), previously 25%, of the loans would be forgiven. Repayment terms on the extended period are unchanged. The CEBA term loan agreements were amended by extending the interest free repayment date by one year to December 31, 2023 (subsequently extended to January 18, 2024). If paid by December 31, 2023, 33.33% ($25,176; C$33,333), previously 25%, of the loans would be forgiven. Repayment terms on the extended period are unchanged.                            
Corporate Term Loans [Member]                                                        
Debt Instrument [Line Items]                                                        
Long-term debt                                 62,068       $ 89,659              
Purchase price     $ 218,338                                         $ 161,483        
Bank term loan     200,000                                         $ 147,920        
Debt instrument, periodic payment     $ 4,901 $ 3,625                                                
Debt instrument, interest rate, stated percentage     4.95%                                         4.95%        
Interest expense, debt                 1,103 823 1,716 1,312 $ 3,760 $ 2,794 5,568 4,342                        
Mortgages payable [Member]                                                        
Debt Instrument [Line Items]                                                        
Interest expense, debt                 185,000 $ 138,015 $ 136,682 $ 104,681 522,833 $ 388,605 $ 416,692 $ 324,937                        
Letter of Credit [Member] | PACE [Member]                                                        
Debt Instrument [Line Items]                                                        
Other commitment                 276,831       276,831       204,744                      
Letter of Credit [Member] | Ministry of the Environment, Conservation and Parks [Member]                                                        
Debt Instrument [Line Items]                                                        
Other commitment                 276,831       276,831       204,744                      
New Letter Of Credit [Member] | PACE [Member]                                                        
Debt Instrument [Line Items]                                                        
Other commitment                 $ 637,637       $ 637,637       $ 471,596                      
Business Loan General Security Agreement [Member] | Credit facility (a) [Member]                                                        
Debt Instrument [Line Items]                                                        
Cash collateral for borrowed securities                                                     $ 1,600,000 $ 1,183,360
v3.23.3
Long-Term Debt - Schedule of long-term debt instruments (Details) - USD ($)
Sep. 30, 2023
Dec. 31, 2022
Debt Instrument [Line Items]    
Long-term debt $ 9,994,265 $ 8,869,426
Current portion (9,994,265) (8,816,931)
Long-Term portion 0 52,495
PACE Credit Facility (a) [Member]    
Debt Instrument [Line Items]    
Long-term debt 697,199 695,974
PACE Credit Facility (b) [Member]    
Debt Instrument [Line Items]    
Long-term debt 389,874 389,188
PACE Corporate Term Loan [Member]    
Debt Instrument [Line Items]    
Long-term debt 2,365,582 2,361,424
Mortgage Payable-due December 1, 2023 [Member]    
Debt Instrument [Line Items]    
Long-term debt 3,835,462 3,782,751
Mortgage Payable-due August 17, 2023 [Member]    
Debt Instrument [Line Items]    
Long-term debt 1,479,200 1,476,600
Mortgage Payable-due March 1, 2024 [Member]    
Debt Instrument [Line Items]    
Long-term debt 1,090,920 0
Canada Emergency Business Account-Due December 31, 2023 [Member]    
Debt Instrument [Line Items]    
Long-term debt 73,960 73,830
Corporate Term Loan-Due April 7, 2025 [Member]    
Debt Instrument [Line Items]    
Long-term debt $ 62,068 $ 89,659
v3.23.3
Obligations under Capital Lease (Narrative) (Details)
 3 Months Ended 9 Months Ended
Sep. 30, 2023
CAD ($)
Sep. 30, 2023
USD ($)
Sep. 30, 2022
CAD ($)
Sep. 30, 2022
USD ($)
Sep. 30, 2023
CAD ($)
Sep. 30, 2023
USD ($)
Sep. 30, 2022
CAD ($)
Sep. 30, 2022
USD ($)
Obligations Under Capital Lease [Line Items]                
Finance lease, interest expense $ 1,053 $ 785 $ 1,770 $ 1,361 $ 3,725 $ 2,768 $ 4,616 $ 3,599
Capital Lease (a) [Member]                
Obligations Under Capital Lease [Line Items]                
Capital lease obligations incurred         247,450 183,014    
Debt instrument, periodic payment         $ 5,118 $ 3,785    
Lessee, finance lease, option to terminate         an option to purchase the equipment for a final payment of $18,253 (C$24,680) plus applicable harmonized sales taxes on February 27, 2022. an option to purchase the equipment for a final payment of $18,253 (C$24,680) plus applicable harmonized sales taxes on February 27, 2022.    
Debt instrument interest rate 6.15% 6.15%     6.15% 6.15%    
Capital Lease (a) [Member] | First two monthly instalments [Member]                
Obligations Under Capital Lease [Line Items]                
Debt instrument, periodic payment         $ 10,000 $ 7,396    
Capital Lease (b) [Member]                
Obligations Under Capital Lease [Line Items]                
Capital lease obligations incurred         389,650 288,185    
Debt instrument, periodic payment         $ 6,852 $ 5,068    
Lessee, finance lease, option to terminate         an option to purchase the equipment for a final payment of a nominal amount of $74 (C$100) plus applicable harmonized sales taxes on February 27, 2025. an option to purchase the equipment for a final payment of a nominal amount of $74 (C$100) plus applicable harmonized sales taxes on February 27, 2025.    
Debt instrument interest rate 3.59% 3.59%     3.59% 3.59%    
Capital Lease (b) [Member] | First two monthly instalments [Member]                
Obligations Under Capital Lease [Line Items]                
Debt instrument, periodic payment         $ 19,450 $ 14,385    
v3.23.3
Obligations under Capital Lease - Schedule of obligations under capital lease (Details) - USD ($)
Sep. 30, 2023
Dec. 31, 2022
Obligations Under Capital Lease [Line Items]    
Obligations under Capital Lease $ 83,950 $ 121,758
Less: current portion (83,950) (57,275)
Long-term portion 0 $ 64,483
Capital Lease (a) [Member]    
Obligations Under Capital Lease [Line Items]    
Obligations under Capital Lease 0  
Long-term portion 0  
Capital Lease (b) [Member]    
Obligations Under Capital Lease [Line Items]    
Obligations under Capital Lease 83,950  
Less: current portion (83,950)  
Long-term portion $ 0  
v3.23.3
Obligations under Capital Lease - Schedule of future minimum lease payments for capital leases (Details) - USD ($)
Sep. 30, 2023
Dec. 31, 2022
Obligations Under Capital Lease [Abstract]    
In the three-month period ending December 31, 2023 $ 20,272  
In the year ending December 31, 2024 60,817  
In the year ending December 31, 2025 5,142  
Minimum Payments Due 86,231  
Less: imputed interest (2,281)  
Total $ 83,950 $ 121,758
v3.23.3
Convertible Promissory Notes (Narrative) (Details)
 1 Months Ended 3 Months Ended 9 Months Ended 12 Months Ended
Jun. 08, 2023
USD ($)
$ / shares
Nov. 10, 2022
USD ($)
$ / shares
shares
May 11, 2022
$ / shares
Mar. 11, 2022
USD ($)
Mar. 07, 2022
USD ($)
Day
Jun. 29, 2023
USD ($)
Dec. 29, 2022
USD ($)
shares
Dec. 22, 2022
USD ($)
shares
Sep. 21, 2022
USD ($)
$ / shares
shares
Sep. 15, 2022
USD ($)
Jun. 29, 2022
USD ($)
shares
Jun. 23, 2022
USD ($)
shares
Oct. 29, 2021
USD ($)
shares
Sep. 30, 2023
USD ($)
$ / shares
shares
Sep. 30, 2022
USD ($)
Jun. 30, 2022
USD ($)
Sep. 30, 2023
USD ($)
$ / shares
shares
Sep. 30, 2022
USD ($)
Dec. 31, 2022
USD ($)
$ / shares
shares
Debt Instrument [Line Items]                                      
Aggregate principal amount                                 $ 6,872,575   $ 5,825,260
Convertible promissory notes, accrued interest                                 $ 662,415   $ 0
Common Stock, Par Value Per Share | $ / shares                           $ 0.0001     $ 0.0001   $ 0.0001
Convertible promissory notes                           $ 9,756,700     $ 9,756,700   $ 7,796,433
Loss on conversion of notes                                 0 $ 659,526  
Additional gain (loss) attributed to change in fair value of convertible promissory notes                           (117,710) $ (1,447,619)   (2,296,845) (6,572,564)  
Gain on extinguishment of note                           0 0   0 4,274,820  
Shares issued on issuance of debt on extinguishment of existing debt (in Shares) | shares                                     4,125,211
Shares issued on issuance of debt on extinguishment of existing debt                               $ 1,591,245     $ 1,652,715
Debt issuance costs                           $ 0 $ 0   $ 0 $ 101,000  
Minimum [Member]                                      
Debt Instrument [Line Items]                                      
Conversion price | $ / shares                           $ 0.1294     $ 0.1294   $ 0.1885
Share price | $ / shares                           0.2047     0.2047   0.154
Maximum [Member]                                      
Debt Instrument [Line Items]                                      
Conversion price | $ / shares                           0.34     0.34   0.2339
Share price | $ / shares                           $ 0.325     $ 0.325   $ 0.45
Convertible promissory note-October 28 and 29, 2021 [Member]                                      
Debt Instrument [Line Items]                                      
Convertible promissory notes                           $ 2,251,696     $ 2,251,696   $ 2,599,925
Convertible promissory notes October 29, 2021 investor note and the March 2022 Investor Notes [Member]                                      
Debt Instrument [Line Items]                                      
Convertible promissory notes, accrued interest $ 424,946                                    
Common Stock, Par Value Per Share | $ / shares $ 0.0001                                    
Increase in principal balance of notes $ 528,000                                    
Percentage increase in principal amount 20.00%                                    
Convertible promissory notes dated October 29 2021 [Member]                                      
Debt Instrument [Line Items]                                      
Debt instrument, face amount $ 1,300,000                                    
Convertible promissory note-March 3 and 7, 2022 [Member]                                      
Debt Instrument [Line Items]                                      
Debt instrument, interest rate, stated percentage 24.00%                                    
Percentage of Original Issue Discount         25.00%                            
Aggregate principal amount         $ 2,000,000           $ 2,400,000                
Amount of original issue discount         $ 500,000                            
Convertible promissory notes, accrued interest                                 662,415   0
Common shares issued upon conversion | shares                     100,000                
Debt instrument, convertible, threshold percentage of stock price trigger         70.00%                            
Debt instrument, convertible, threshold trading days | Day         5                            
Convertible notes, increase in outstanding balance due to default, percentage         120.00%         10.00%                  
Convertible notes, increase in outstanding balance due to default, amount                   $ 2,640,000                  
Maximum debt conversion amount                   50,000                  
Debt instrument, face amount $ 2,640,000                 $ 2,400,000                  
Proceeds received, net of OID and professional fees       $ 1,425,000 $ 1,425,000                            
Convertible promissory notes                           5,948,014     5,948,014   3,696,044
Convertible notes, interest rate after default         24.00%                            
Discount rate of conversion price     35.00%                                
Previous discount rate of conversion price     30.00%                                
Share price | $ / shares     $ 1.7                                
Percentage increase in principal amount                     20.00%                
Increase in principal amount of debt instrument $ 3,168,000                                    
Convertible promissory note- June 23, 2022 [Member]                                      
Debt Instrument [Line Items]                                      
Debt instrument, interest rate, stated percentage                       10.00%              
Percentage of Original Issue Discount                       10.00%              
Aggregate principal amount             $ 1,320,000         $ 1,200,000              
Common shares issued upon conversion | shares             450,000       1,333,333                
Debt instrument, convertible, threshold percentage of stock price trigger                       90.00%              
Debt instrument, face amount           $ 1,320,000                          
Increase in principal balance of notes           100,000                          
Convertible promissory notes                           $ 1,556,990     $ 1,556,990   $ 1,500,464
Modification fee shares issued | shares             666,667                        
Unissued common stock stock reserved for issuance upon full conversion of convertible promissory note | shares                       8,000,000              
Convertible notes, interest rate after default                       15.00%              
Convertible promissory note disbursement expenses                       $ 204,000              
Increase in principal amount of debt instrument           $ 1,420,000                          
Securities purchase agreements [Member] | Convertible promissory note-October 28 and 29, 2021 [Member]                                      
Debt Instrument [Line Items]                                      
Percentage of Original Issue Discount                         15.00%            
Percentage of prepayment premium                         120.00%            
Debt instrument, convertible, threshold percentage of stock price trigger                         70.00%            
Debt instrument, face amount                         $ 1,765,118            
Unissued common stock stock reserved for issuance upon full conversion of convertible promissory note | shares                         1,905,000            
Convertible notes, interest rate after default                         24.00%            
Percentage of conversion price reset to lowest volume weighted average price                         85.00%            
Discount rate of conversion price     35.00%                                
Previous discount rate of conversion price     30.00%                                
Share price | $ / shares     $ 1.7                                
Securities purchase agreements [Member] | Convertible promissory notes dated October 28, 2021 [Member]                                      
Debt Instrument [Line Items]                                      
Aggregate principal amount               $ 294,118                      
Common shares issued upon conversion | shares               500,000                      
Discount rate of conversion price               35.00%                      
Previous discount rate of conversion price               30.00%                      
Securities purchase agreements [Member] | Convertible promissory notes dated October 29 2021 [Member]                                      
Debt Instrument [Line Items]                                      
Common shares issued upon conversion | shares   372,090             372,090         0     1,650,709    
Convertible notes, increase in outstanding balance due to default, percentage                   10.00%                  
Convertible notes, increase in outstanding balance due to default, amount                   $ 1,618,100                  
Maximum debt conversion amount                   100,000                  
Fair value of converted debt   $ 97,129             $ 97,129                    
Converted amount   $ 50,000             $ 25,000         $ 0     $ 243,100    
Debt instrument, face amount                   $ 1,471,000                  
Convertible debt, fair value on conversion                           $ 0     $ 374,000    
Securities purchase agreements [Member] | Convertible promissory notes dated October 29 2021 [Member] | Minimum [Member]                                      
Debt Instrument [Line Items]                                      
Conversion price | $ / shares   $ 0.1885             $ 0.1885                    
Increase in conversion price | $ / shares                           $ 0     $ 0.1294    
Securities purchase agreements [Member] | Convertible promissory notes dated October 29 2021 [Member] | Maximum [Member]                                      
Debt Instrument [Line Items]                                      
Conversion price | $ / shares   $ 0.2339             $ 0.2339                    
Increase in conversion price | $ / shares                           $ 0     $ 0.34    
v3.23.3
Convertible Promissory Notes - Schedule of convertible promissory notes (Details) - USD ($)
Sep. 30, 2023
Dec. 31, 2022
Debt Instrument [Line Items]    
Convertible promissory notes $ 9,756,700 $ 7,796,433
Convertible promissory note-October 28 and 29, 2021 [Member]    
Debt Instrument [Line Items]    
Convertible promissory notes 2,251,696 2,599,925
Convertible promissory note-March 3 and 7, 2022 [Member]    
Debt Instrument [Line Items]    
Convertible promissory notes 5,948,014 3,696,044
Convertible promissory note- June 23, 2022 [Member]    
Debt Instrument [Line Items]    
Convertible promissory notes $ 1,556,990 $ 1,500,464
v3.23.3
Fair Value Measurement - (Narrative) (Details)
 9 Months Ended 12 Months Ended
Sep. 30, 2023
Dec. 31, 2022
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Convertible promissory notes maturity terms which were assumed to be 100%. The probability of default was determined in reference to a 1-year PD rate for a 'CCC+' rating at issuance, and a combination of 'CC' and 'CCC-' credit ratings at September 30, 2023 and December 31, 2022.  
Probability of default [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Convertible promissory notes, Measurement input 75.00% 75.00%
Probability of default [Member] | Minimum [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Convertible promissory notes, Measurement input 0.00%  
Probability of default [Member] | Maximum [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Convertible promissory notes, Measurement input 40.00%  
Expected volatility [Member] | Minimum [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Convertible promissory notes, Measurement input 138.40% 92.00%
Expected volatility [Member] | Maximum [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Convertible promissory notes, Measurement input 161.40% 159.00%
Credit spread [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Convertible promissory notes, Measurement input 23.92%  
Premium percentage added to credit spread 10.00%  
Credit spread [Member] | Minimum [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Convertible promissory notes, Measurement input   24.40%
Credit spread [Member] | Maximum [Member]    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Convertible promissory notes, Measurement input   25.60%
v3.23.3
Fair Value Measurement - Schedule of fair value on a recurring basis (Details) - Fair Value, Recurring [Member] - USD ($)
Sep. 30, 2023
Dec. 31, 2022
Liabilities, Fair Value Disclosure [Abstract]    
Convertible promissory notes $ 9,756,700 $ 7,796,433
Financial assets and liabilities measured at fair value 9,756,700 $ 7,796,433
Level 3 [Member]    
Liabilities, Fair Value Disclosure [Abstract]    
Convertible promissory notes 9,756,700  
Financial assets and liabilities measured at fair value $ 9,756,700  
v3.23.3
Fair Value Measurement - Schedule of Summarizes change in Level 3 financial instruments (Details) - Level 3 [Member] - Fair Value, Recurring [Member] - USD ($)
 9 Months Ended 12 Months Ended
Sep. 30, 2023
Dec. 31, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Fair value, Beginning Balance $ 7,796,433 $ 3,798,516
Fair value at issuance 0 2,159,526
Amendments 2,180,923 0
Conversions/repayments (336,578) (136,880)
Mark to market 115,922 7,663,844
Settlement 0 (5,688,573)
Fair value, Ending Balance $ 9,756,700 $ 7,796,433
v3.23.3
Loans Payable to Related Parties (Narrative) (Details) - USD ($)
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Related Party Transaction [Line Items]          
Interest rate on loan payable to related parties     5.00%    
Interest incurred on the director loan $ 538 $ 548 $ 1,684 $ 679  
Accrued interest in accrued liabilities $ 2,839   $ 2,839   $ 1,088
Travellers International Inc. [Member]          
Related Party Transaction [Line Items]          
Shares issued to officers (Shares)     2,422,163   193,778
v3.23.3
Loans Payable to Related Parties - Schedule of loan payable to related party (Details) - USD ($)
Sep. 30, 2023
Dec. 31, 2022
Related Party Transaction [Line Items]    
Loans payable to related parties $ 59,941 $ 40,000
Director [Member]    
Related Party Transaction [Line Items]    
Loans payable to related parties 47,500 40,000
Officers [Member]    
Related Party Transaction [Line Items]    
Loans payable to related parties $ 12,441 $ 0
v3.23.3
Capital Stock (Narrative) (Details)
 1 Months Ended 3 Months Ended 9 Months Ended 12 Months Ended
Mar. 01, 2023
USD ($)
shares
Jan. 27, 2023
shares
Jan. 03, 2023
CAD ($)
shares
Jan. 03, 2023
USD ($)
shares
Feb. 07, 2022
shares
Jan. 02, 2022
shares
Mar. 22, 2022
shares
Jan. 17, 2022
shares
Sep. 30, 2023
USD ($)
shares
Jun. 30, 2023
USD ($)
Mar. 31, 2023
USD ($)
Sep. 30, 2022
USD ($)
shares
Jun. 30, 2022
USD ($)
Mar. 31, 2022
USD ($)
Sep. 30, 2023
CAD ($)
shares
Sep. 30, 2023
USD ($)
shares
Sep. 30, 2022
USD ($)
shares
Dec. 31, 2022
USD ($)
shares
Sep. 30, 2023
USD ($)
$ / shares
shares
Dec. 31, 2022
CAD ($)
shares
Dec. 31, 2022
USD ($)
$ / shares
shares
Sep. 08, 2022
shares
Capital Stock [Line Items]                                            
Common Stock, Shares Authorized                             150,000,000       150,000,000 150,000,000 150,000,000  
Common Stock, Par or Stated Value Per Share | $ / shares                                     $ 0.0001   $ 0.0001  
Common Stock, Shares, Issued                             124,783,286       124,783,286 113,438,832 113,438,832  
Common Stock, Shares, Outstanding                             124,783,286       124,783,286 113,438,832 113,438,832  
Stock issued during period, shares, conversion of unsecured convertible promissory notes                             1,650,709 1,650,709   2,372,090        
Stock issued during period, value, conversion of unsecured convertible promissory notes | $                               $ 374,000   $ 579,247        
Loss on conversion of convertible promissory notes | $                               74,359 $ 0          
Shares issued on conversion of related party debt and accounts payable | $                 $ 233,558 $ 278,845                        
Shares issued on private placement | $                 151,684 101,039     $ 428,000 $ 16,560   $ 380,971   907,760        
Share issue costs | $                                   $ 1,440        
Shares issued on private placement (Shares)                             1,536,582 1,536,582   4,444,041        
Shares issued for professional services (Shares)     225,000 225,000                     1,790,000 1,790,000   6,655,000        
Shares issued for professional services     $ 45,000 $ 34,124         194,250 $ 139,165 $ 63,480 $ 1,781,450   223,910   $ 396,895   $ 2,186,110        
Management compensation-stock-based compensation included in prepaid expenses and deposits | $                               0   $ 374,531        
Stock-based compensation | $                               396,895 2,092,230          
Shares issued to officers | $                     $ 446,400     $ 240,450   446,400 240,450          
Management compensation-stock-based compensation | $                 $ 57,600     $ 60,113       172,800 180,339          
Shares issued on issuance of debt on extinguishment of existing debt (in Shares)                                   4,125,211        
Shares issued on issuance of debt on extinguishment of existing debt | $                         $ 1,591,245         $ 1,652,715        
Number of common shares that were returned to treasury                                           241,502
Stock issued during period, conversion of units (Shares)             230,000 230,000                            
Loss on conversion of convertible promissory note | $                               $ 74,359 $ (0)          
Shares issued on extension of the maturity dates on convertible promissory notes (in Shares)                                   1,616,667        
Shares issued on extension of the maturity dates on convertible promissory notes | $                                   $ 231,067        
Accounts payable related party                             $ 276,809       $ 204,728 $ 219,138 $ 161,790  
Consulting agreements [Member]                                            
Capital Stock [Line Items]                                            
Shares issued for professional services (Shares)   500,000                         750,000 750,000            
Shares issued for professional services | $                               $ 60,100   213,600        
Shares issued to officers | $                               $ 446,400   $ 240,450        
Shares issued for proceeds previously received (Shares)                             500,000 500,000 230,000          
Consulting agreements [Member] | Private Placement [Member]                                            
Capital Stock [Line Items]                                            
Shares issued for professional services (Shares)   250,000                                        
Minimum [Member]                                            
Capital Stock [Line Items]                                            
Conversion price | $ / shares                                     $ 0.1294   $ 0.1885  
Share price | $ / shares                                     0.2047   0.154  
Maximum [Member]                                            
Capital Stock [Line Items]                                            
Conversion price | $ / shares                                     0.34   0.2339  
Share price | $ / shares                                     $ 0.325   $ 0.45  
Travellers International Inc. [Member]                                            
Capital Stock [Line Items]                                            
Common shares issued upon conversion of loans payable to related party                 1,254,792     0     2,422,163 2,422,163 0          
Shares issued to officers (Shares)                             2,422,163 2,422,163   193,778        
Accounts payable related party                             $ 688,883       $ 512,403 45,200 $ 33,371  
Chief Executive Officer [Member]                                            
Capital Stock [Line Items]                                            
Shares issued for professional services (Shares)                             3,000,000 3,000,000            
Chief Executive Officer [Member] | Consulting agreements [Member]                                            
Capital Stock [Line Items]                                            
Shares issued to officers (Shares)     3,000,000 3,000,000   1,000,000                                
Chief Financial Officer [Member]                                            
Capital Stock [Line Items]                                            
Shares issued for professional services (Shares)                             100,000 100,000            
Chief Financial Officer [Member] | Consulting agreements [Member]                                            
Capital Stock [Line Items]                                            
Shares issued to officers (Shares)     100,000 100,000   50,000                                
Employees [Member]                                            
Capital Stock [Line Items]                                            
Number of shares issued to employees     20,000 20,000 10,000                                  
Value of shares issued to employees | $       $ 2,880                           $ 1,990        
Director [Member]                                            
Capital Stock [Line Items]                                            
Shares issued to officers (Shares) 100,000                                          
Shares issued to officers | $ $ 21,000                                          
Accounts payable related party                             $ 235,793       $ 174,393 $ 164,196 $ 121,226  
Director [Member] | Private Placement [Member]                                            
Capital Stock [Line Items]                                            
Shares issued on private placement                             $ 134,483 $ 101,039            
Shares issued on private placement (Shares)                             310,888 310,888            
Share price | $ / shares                                     $ 0.325      
v3.23.3
Commitments (Narrative) (Details)
 1 Months Ended 3 Months Ended 9 Months Ended 12 Months Ended
Jan. 27, 2023
shares
Jan. 03, 2023
CAD ($)
shares
Jan. 03, 2023
USD ($)
shares
Nov. 05, 2021
CAD ($)
Nov. 05, 2021
USD ($)
Sep. 15, 2023
USD ($)
$ / shares
shares
Sep. 30, 2023
USD ($)
Jun. 30, 2023
USD ($)
Mar. 31, 2023
USD ($)
Sep. 30, 2022
USD ($)
Mar. 31, 2022
USD ($)
Sep. 30, 2023
CAD ($)
shares
Sep. 30, 2023
USD ($)
shares
Sep. 30, 2022
USD ($)
Dec. 31, 2022
CAD ($)
shares
Dec. 31, 2022
USD ($)
shares
Sep. 30, 2023
USD ($)
shares
Feb. 03, 2021
USD ($)
Other Commitments [Line Items]                                    
Shares issued for professional services (Shares) | shares   225,000 225,000                 1,790,000 1,790,000   6,655,000 6,655,000    
Value of shares issued for services   $ 45,000 $ 34,124       $ 194,250 $ 139,165 $ 63,480 $ 1,781,450 $ 223,910   $ 396,895     $ 2,186,110    
Fees to acquired exclusive rights - sixty days subsequent to shares listed on Nasdaq                         125,000          
Fees to acquired exclusive rights - one-year anniversary of first payment                         125,000          
Fees to acquired exclusive rights - one-year anniversary of second payment                         125,000          
Warrants issue shares | shares | shares                       250,000         250,000  
Consulting fee             $ 103,930     $ 190,653     $ 286,723 $ 812,738        
Consulting agreements [Member]                                    
Other Commitments [Line Items]                                    
Shares issued for professional services (Shares) | shares 500,000                     750,000 750,000          
Value of shares issued for services                         $ 60,100     213,600    
Chief Executive Officer [Member]                                    
Other Commitments [Line Items]                                    
Shares issued for professional services (Shares) | shares                       3,000,000 3,000,000          
Chief Executive Officer [Member] | Consulting agreements [Member]                                    
Other Commitments [Line Items]                                    
Commitments, monthly amount                       $ 40,000 $ 29,584          
Commitments, monthly amount next 12 months                       $ 50,000 $ 36,980          
Consultant [Member] | New investor relations consulting agreement [Member]                                    
Other Commitments [Line Items]                                    
Shares issued for professional services (Shares) | shares                       500,000 500,000          
Consulting Agency [Member]                                    
Other Commitments [Line Items]                                    
Consulting fee percentage           10.00%                        
Consulting fee           $ 1,000,000                        
Consulting Agency [Member] | Equity Financing By December 31, 2023 [Member]                                    
Other Commitments [Line Items]                                    
Debt face amount           $ 15,000,000                        
Chief Financial Officer [Member] | Consulting agreements [Member]                                    
Other Commitments [Line Items]                                    
Commitments, monthly amount                       $ 12,500 $ 9,245          
Haute Inc [Member]                                    
Other Commitments [Line Items]                                    
Commitments, monthly amount       $ 9,125,809 $ 6,749,448             9,000 6,656          
Consulting For Nasdaq Listing [Member]                                    
Other Commitments [Line Items]                                    
Other commitment                                   $ 300,000
Land Lease [Member]                                    
Other Commitments [Line Items]                                    
Commitments, monthly amount                       3,000 2,219          
Commitments, annual amount                       10,000 7,396          
Letter of Credit [Member] | Ministry of the Environment, Conservation and Parks [Member]                                    
Other Commitments [Line Items]                                    
Other commitment                       276,831         $ 204,744  
Disposal Costs                       936,721 $ 692,799   $ 904,287 $ 676,635    
Letter of Credit                       $ 637,637         $ 471,596  
Marketing Program [Member] | Consulting Agency [Member]                                    
Other Commitments [Line Items]                                    
Shares issued for professional services (Shares) | shares           750,000                        
Value of shares issued for services           $ 194,250                        
Shares issued price per share | $ / shares           $ 0.259                        
v3.23.3
Commitments - Schedule of commitments (Details)
Sep. 30, 2023
USD ($)
Chief Executive Officer and Chief Financial Officer [Member]  
Other Commitments [Line Items]  
For the three-month period ending December 31, 2023 $ 116,487
For the year ending December 31, 2024 443,760
Contractual Obligation 560,247
Land Lease [Member]  
Other Commitments [Line Items]  
For the three-month period ending December 31, 2023 0
For the year ending December 31, 2024 7,396
For the year ending December 31, 2025 7,396
Contractual Obligation $ 14,792
v3.23.3
Other Expenses - Schedule of other expenses (Details) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Other Income and Expenses [Abstract]        
Loss on conversion of convertible promissory note     $ (74,359) $ 0
Loss on revaluation of convertible promissory notes     (2,296,845) (7,232,090)
Gain on extinguishment of convertible promissory notes $ 0 $ 0 0 4,274,820
Settlement payment     0 (250,000)
Other expenses     $ (2,371,204) $ (3,207,270)
v3.23.3
Economic Dependence (Narrative) (Details)
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Four Customers [Member] | Revenue [Member] | Customer Concentration Risk [Member]        
Concentration risk, percentage 95.00% 93.00% 93.00% 85.00%
v3.23.3
Legal Proceedings (Narrative) (Details) - Sep. 30, 2023
CAD ($)
USD ($)
Legal Proceeding [Line Items]    
Unpaid legal fees $ 65,241 $ 48,252
v3.23.3
Subsequent Events (Narrative) (Details)
Nov. 02, 2023
CAD ($)
a
Nov. 03, 2023
CAD ($)
Nov. 03, 2023
USD ($)
Nov. 02, 2023
USD ($)
a
Sep. 30, 2023
CAD ($)
Sep. 30, 2023
USD ($)
Dec. 31, 2022
USD ($)
Subsequent Event [Line Items]              
Long-term debt | $           $ 9,994,265 $ 8,869,426
Funds held in escrow         $ 1,250,000 $ 924,500 $ 0
Subsequent Event [Member]              
Subsequent Event [Line Items]              
Land $ 3,100,000     $ 2,292,760      
Long-term debt $ 2,000,000     $ 1,479,200      
Interest rate 7.00%            
Debt instrument, maturity description maturing in two years and the balance in cash financed by a second mortgage on the additional land bearing interest at 13% annually, maturing in one year            
Subsequent Event [Member] | Canada [Member]              
Subsequent Event [Line Items]              
Area of land for sale | a 2.03     2.03      
Subsequent Event [Member] | PACE [Member]              
Subsequent Event [Line Items]              
Funds held in escrow   $ 1,250,000 $ 924,500        
Subsequent Event [Member] | Prepaid Expenses and Deposits [Member]              
Subsequent Event [Line Items]              
Final deposit amount $ 310,000     $ 229,276      
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