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"large accelerated filer,” “accelerated filer”" "accelerated filer," "smaller reporting company" and “smaller reporting company” and “emerging"emerging growth company”company" in Rule 12b-2 of the Exchange Act.

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

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

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

The number of shares of the registrant’sregistrant's common stock outstanding as of May 15,August 14, 2019 was 42,484,53143,218,948 shares.

SusGlobal Energy Corp.
INDEX TO FORM 10-Q
For the Three-MonthThree and Six-Month Periods Ended March 31,June 30, 2019 and 2018

SUSGLOBAL ENERGY CORP.
CONSOLIDATED FINANCIAL STATEMENTS
March 31,June 30, 2019 and 2018

(Expressed in United States Dollars)

CONTENTS

SusGlobal Energy Corp.
Interim Condensed Consolidated Balance Sheets
As at March 31,June 30, 2019 and December 31, 2018
(Expressed in United States Dollars)
(unaudited)

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

SusGlobal Energy Corp.
Interim Condensed Consolidated Statements of Operations and Comprehensive Loss
For the three-monththree and six-month periods ended March 31,June 30, 2019 and 2018
(Expressed in United States Dollars)
(unaudited)

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

SusGlobal Energy Corp.
Interim Condensed Consolidated Statements of Changes in Stockholders’Stockholders' Deficiency
For the three-monththree and six-month periods ended March 31,June 30, 2019 and year ended December 31, 2018
(Expressed in United States Dollars)
(unaudited)

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

SusGlobal Energy Corp.
Interim Condensed Consolidated Statements of Cash Flows
For the three-monththree and six-month periods ended March 31,June 30, 2019 and 2018
(Expressed in United States Dollars)
(unaudited)

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

1. Nature of Business and Basis of Presentation

SusGlobal Energy Corp. (“SusGlobal”("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”("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”"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”"Shares"). As a result of the Domestication, pursuant to Section 388 of the General Corporation Law of the State of Delaware (the “DGCL”"DGCL"), SusGlobal continued its existence under the DGCL as a corporation incorporated in the State of Delaware. The business, assets and liabilities of SusGlobal and its subsidiaries on a consolidated basis, as well as its principal location and fiscal year, were the same immediately after the Domestication as they were immediately prior to the Domestication. SusGlobal filed a Registration Statement on Form S-4 to register the Shares and this registration statement was declared effective by the Securities and Exchange Commission on May, 23, 2017.

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

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

2. Going Concern

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

As at March 31,June 30, 2019, the Company had a working capital deficit of $5,565,973$7,616,175 (December 31, 2018-$4,830,948), incurred a net loss of $1,080,544$1,783,495 (2018-$483,617)2,310,552) for the threesix months ended March 31,June 30, 2019 and had an accumulated deficit of $9,634,856$10,337,807 (December 31, 2018-$8,554,312) and expects to incur further losses in the development of its business. These factors cast substantial doubt as to the Company’sCompany's ability to continue as a going concern, which is dependent upon its ability to obtain the necessary financing to further the development of its business, satisfy its obligations to PACE Savings & Credit Union Limited (“PACE”("PACE") and its other 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.

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, 2018 and 2017 and their accompanying notes.

Recently Adopted Accounting Pronouncements:

On January 1, 2019, the Company adopted Accounting Standards Update (“ASU”("ASU") No. 2016-02, Leases which is also known as Accounting Standard Codification (“ASC”("ASC") Topic 842, that requires lessees to recognize for all operating leases a right-of-use asset and a lease obligation in the interim condensed consolidated balance sheets. Expenses are recognized in the interim condensed consolidated statements of operations and comprehensive loss in a manner similar to previous accounting guidance. Lessor accounting under the new standard is substantially unchanged and is not relevant to the Company. The Company adopted the accounting standard using a prospective transition approach, which applies the provisions of the new guidance at the effective date without adjusting the comparative periods presented, with certain practical expedients available to ease the burden of adoption.

The Company elected the following practical expedients upon adoption: not to reassess whether any expired or existing contracts are or contain leases, not to reassess the lease classification for any expired or existing leases, not to reassess initial direct costs for any existing leases, not to separately identify lease and non-lease components (i.e. maintenance costs) except for fleet vehicles and real estate, and not to evaluate historical land easements under the new guidance. Additionally, the Company elected the short-term lease exemption policy, applying the requirements of ASC 842 to long-term leases (leases greater than 1 year) for which it only has one.

Adoption of the new standard resulted in $217,755 ($297,074 CAD) of additional right-of-use lease asset and lease liability as of January 1, 2019. The new standard did not have a significant impact on the interim condensed consolidated statements of operations and comprehensive loss. See note 8,9, operating lease right-of-use asset and operating lease liability, for additional information.

4. Recent Accounting Pronouncements

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

In January 2017, the FASB issued ASU No. 2017-04, “Intangibles-Goodwill"Intangibles-Goodwill and Other (Topic 350) - Simplifying the Test for GoodwillImpairment”GoodwillImpairment". The new standard simplifies the accounting for goodwill impairments by eliminating step 2 from the goodwill quantitative impairment test. Instead, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss is to be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. The standard is to be effective for interim and annual periods beginning after December 15, 2019 and early adoption is permitted. The Company is currently evaluating the impact of adopting ASU No. 2017-04.

In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments (Topic 326), which replaces the incurred-loss impairment methodology and requires immediate recognition of estimated credit losses expected to occur for most financial assets, including trade receivables. Credit losses on available-for-sale debt securities with unrealized losses will be recognized as allowances for credit losses limited to the amount by which fair value is below amortized cost. ASU 2016-13 is effective for the Company beginning January 1, 2020 and early adoption is permitted. The Company does not believe the potential impact of the new guidance and related codification improvements will be material to its financial position, results of operations and cash flows.

5. Financial Instruments

The carrying value of cash and cash equivalents, trade receivables, bank indebtedness, accounts payable, and accrued liabilities approximated their fair values as of March 31,June 30, 2019 due to their short-term nature. The carrying value of the long-term debt, obligations under capital lease, convertible promissory notes, operating lease obligationmortgage payable and loans payable to related parties approximated their fair values due to their market interest rates.

Interest, Credit and Concentration Risk

In the opinion of management, the Company is exposed to significant interest rate risk on its long-term debt of $3,784,588$3,844,309 ($5,057,5815,031,160 CAD) (December 31, 2018-$3,727,778; $5,085,645 CAD). As at March 31,June 30, 2019, the Company is exposed to concentration risk as it had sixfour customers (2018-five(December 31, 2018-five customers) representing greater than 5% of total trade receivables and these sixfour customers (December 31, 2018-five customers) represented 93%72% (2018-90%) of trade receivables. The Company had certain customers whose revenue individually represented 10% or more of the Company’sCompany's total revenue. These customers accounted for 90% (42%, 26%, 11% and 11%) (March 31, 2018-69%; 24%74% (37%, 23%, and 22%14%) (June 30, 2018-63%; 38% and 25%) of total revenue.

Liquidity Risk

Liquidity risk is the risk that the Company is unable to meet its obligations as they fall due. The Company takes steps to ensure it has sufficient working capital and available sources of financing to meet future cash requirements for capital programs and operations.

The Company actively monitors its liquidity to ensure that its cash flows and working capital are adequate to support its financial obligations and the Company’sCompany's capital programs. In order to continue operations, the Company will need to raise capital. There is no assurance of funding being available or available on acceptable terms. Realization values may be substantially different from carrying values as shown.

Currency Risk

Although the Company’sCompany's functional currency is the CAD, the Company realizes a portion of its expenses in USD. Consequently, certain assets and liabilities are exposed to foreign currency fluctuations. As at March 31,June 30, 2019, $63,104$110,307 (December 31, 2018-$68,393) of the Company’sCompany's net monetary liabilities were denominated in USD. The Company has not entered into any hedging transactions to reduce the exposure to currency risk.

6. Business Acquisition

Effective May 24, 2019, the Company purchased all the issued and outstanding shares of 1684567. The acquisition was accounted for as a business combination using the acquisition method of accounting. The purchase price paid in the acquisition has been preliminarily allocated to record the assets acquired and liabilities assumed based on their estimated fair value. When determining the fair values of assets acquired and liabilities assumed, management made significant estimates. The transaction closed on May 28, 2019. The purchase consideration consisted of cash from working capital of $200,402 ($269,466 CAD) and cash from a third-party mortgage obtained in the amount of $1,258,273 ($1,691,910 CAD, net of financing fees of $80,387 ($108,090 CAD)). The total purchase price includes the original offer of $1,314,304 ($1,767,250 CAD) and acquisition costs of $144,371 ($194,126 CAD).

6. Business Acquisition, (continued)

The allocation of the purchase price is as follows:

7. Intangible Assets

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

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

On March 14, 2019, the Company incurred fees to register various trademarks in the United States and Canada.

On September 15, 2017,Effective May 24, 2019, the Company acquired thean additional environmental approvalscompliance approval ($76,410) and a customer list ($7,798) relating to certain municipal contracts (forty-five-month life) on the purchase of certain assetsthe shares of Astoria from BDO Canada Limited (‘BDO”) under an asset purchase agreement (the “APA”).1684567.

78.Long-lived Assets, net

Included above are certain assets of Astoria acquired from BDO under the APA, which closed on September 15, 2017. The purchase price for the purchased assets, described as an organic composting facility, including composting buildings, gore cover system, driveway and paving, certain machinery and equipment, an office trailer, certain computer equipment and computer software consisted of cash of $3,026,114 ($3,917,300 CAD) and 529,970 restricted common shares of the Company, determined to be valued at $529,970 ($700,000 CAD), based on recent private placement pricing. In addition, legal costs in connection with acquiring the assets of $22,598 ($29,253 CAD), are included in the cost of the composting buildings. The purchase price was allocated to thelong-lived assets acquired based on their estimated relative fair value as at the date the assets were acquired.business acquisition described under note 6.

8.9. Operating Lease Right-of-Use Asset and Operating Lease Liability

The Company hashad one operating lease right-of-use asset and related operating leasaelease liability and hashad recognized as such, effective January 1, 2019, based on the present value of lease payments over the lease term that expires on March 31, 2034, calculated to be $217,755 ($297,074 CAD) which were included in the interim condensed consolidated balance sheet.. The Company has used its estimated secured incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The operating lease right-of-use asset iswas being amortized on a straight-line basis over the lease term which expires March 31, 2034 and amortization expense is included under office and administration expense in the interim condensed consolidated statements of operations and comprehensive loss. The Company does not act as a lessor nor does it have any leases classified as financing leases.

The operating lease right-of-use asset iswas periodically reviewed for impairment losses. The Company usesused the long-lived assets impairment guidance in ASC Subtopic 360-10, Property, Plant and Equipment-Overall, to determine whether the operating lease right-of-use asset iswas impaired, and if so, the amount of the impairment loss to recognize.

The Company monitorsmonitored for events or changes in circumstances that requirerequired a reassessment of its operating lease right-of-use asset. When a reassessment results in the remeasurement of a lease liability, a corresponding adjustment is made to the carrying amount of the corresponding operating lease right-of-use asset.

9. Operating Lease Right-of-Use Asset and Operating Lease Liability, (continued)

Effective May 24, 2019, the Company acquired the shares of 1684567., the company that owned the land upon which the right-of-use asset was situated. As a result, the Company is both the tenant and the landlord and as such, no longer recognizes an operating right-of-use asset and related operating lease liability.

For the three-monthsix-month period ended March 31,June 30, 2019, the Company recorded $3,663$6,087 ($4,8708,117 CAD (2018-$nil; $nil CAD) for the amortization of the operating lease right-of-use asset.

The following summarizes quantitative information aboutFor the Company’ssix-month period ended June 30, 2019, the Company incurred interest of $2,429 ($3,239 CAD) (2018-$nil; $nil CAD) on the operating lease:lease liability.

9.10. Related Party Transactions

During the three-monthsix-month period ended March 31,June 30, 2019, the Company incurred $33,849$67,491 ($45,00090,000 CAD) (2018-$35,595; $45,00070,443; $90,000 CAD) in management fees expense with Travellers International Inc. (“Travellers”("Travellers"), an Ontario company controlled by a director and president of the Company (the “President”"President"); $33,849$67,491 ($45,00090,000 CAD) (2018-$35,595; $45,00070,443; $90,000 CAD) in management fees expense with Landfill Gas Canada Ltd. (“LFGC”("LFGC"), an Ontario company controlled by a director and chief executive officer of the Company (the “CEO”"CEO"); $13,540$26,996 ($18,00036,000 CAD) (2018-$9,492;23,481; $30,000 CAD) in management fees expense with the Company's chief financial officer (the "CFO"); and $nil ($nil CAD) (2018-$9,391; $12,000 CAD) in management fees expense with the Company’s chief financial officer (the “CFO”); and $nil ($nil CAD) (2018-$9,492; $12,000 CAD) in management fees expense with the Company’sCompany's vice-president of corporate development (the “VPCD”"VPCD"). As at March 31,June 30, 2019, unpaid remuneration and unpaid expenses in the amount of $80,759$94,086 ($107,923123,133 CAD) (December 31, 2018-$48,691; $66,426 CAD) is included in accounts payable and $177,347$210,892 ($237,000276,000 CAD) (December 31, 2018-$184,714; $251,997 CAD) is included in accrued liabilities.

In addition, during the three-monthsix-month period ended March 31,June 30, 2019, the Company incurred interest expense of $3,802$4,481 ($5,0555,975 CAD) (2018-$293; $3714,818; $6,156 CAD) on the outstanding loansloan from Travellers and $1,669$3,347 ($2,2194,463 CAD) (2018-$nil; $nil1,544; $1,973 CAD) on the outstanding loans from the directors. As at March 31,June 30, 2019, interest of $23,698$8,384 ($31,66910,973 CAD) (December 31, 2018-$17,882; $24,395 CAD) on these loans is included in accrued liabilities.

During the three-monthsix-month period ended March 31,June 30, 2019, the Company incurred $16,998$32,296 ($22,59843,067 CAD) (2018-$15,500; $19,59532,499; $41,521 CAD) in rent paid under a rental agreement to Haute Inc. (“Haute”("Haute"), an Ontario company controlled by the President.

The Company accrued directors’recorded directors' compensation for its five independent directors for services provided for the three-monthsix-month period ended March 31,June 30, 2019, including the audit committee chairman's fees, in the amount of $2,952$12,700 (2018-$791)1,565). As at March 31,June 30, 2019, $54,200$24,454 (December 31, 2018-$52,000) of outstanding fees to the directors is included in accrued liabilities.

Furthermore, the Company granted the CEO 3,000,000 restricted stock units (“RSU”("RSU"), under a consulting agreement effective January 1, 2017, determined to be valued at $990,000 based on private placement pricing at the time. On each of February 25, 2018 and April 2, 2019, 1,000,000 RSUs were exchanged into 1,000,000 common stock of the Company. The RSUs for the remaining installment are expected to vest annually on January 1, 2020, subject to meeting certain performance objectives. On May 17, 2018, at a meeting of the board of directors (the “Board”"Board"), approved an amendment to the President’sPresident's consulting agreement, to include the granting of 3,000,000 RSUs to the President, determined to be valued at $3,000,000, based on private placement pricing at the time, on the same terms and conditions as those granted to the CEO. Immediately thereafter, 1,000,000 of the President’sPresident's RSUs were exchanged for 1,000,000into1,000,000 common stock of the Company. On January 9,8, 2019, 1,000,000 of the President’sPresident's RSUs were exchanged into 1,000,000 common stock of the Company. Based on private placement pricing at the time, the common stock issued to the President on each exchange of the RSUs, was determined to be valued at $1,000,000. The RSUs for the remaining installment are expected to vest annually on January 1, 2020, subject to meeting certain performance objectives.

10. Related Party Transactions, (continued)

For the three-monthsix-month period ended March 31,June 30, 2019, the Company recognized management compensation expense of $332,500$665,000 (2018-$82,500 on the award to the CEO)665,000) on the awards to the President and the CEO, representing one-sixth of the total value of the awards of $3,990,000, based on private placement pricing at the time.

10.11. Long-Term Debt

Repayments are as follows:

For the three-monthsix-month period ended March 31,June 30, 2019, $77,619$155,522 ($103,189207,390 CAD) (2018-$80,775; $102,118158,433; $202,419 CAD) in interest was charged.incurred.

11.12. Obligations under Capital Lease