OTC: 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.

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 you 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. (c) Process SSO and digestate 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, once operations recommence, 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 optimize 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 organic fertilizer, both dry compost and liquid.

When the Company was operational, its primary customers were municipalities in both rural and urban centers in Ontario, Canada. Where necessary, to follow provincial and local environmental laws and regulations, SusGlobal submits applications to the respective authorities for approval prior to any necessary engineering being carried out.

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 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

The Company owned a 41,535 square foot facility (approximately 27% complete) 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 has been originally designed to produce, distribute and warehouse the Company's SusGro™ organic liquid fertilizer and other products that were anticipated 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.

On July 28, 2024, the Company's real estate broker listed the Company's Hamilton Facility for sale. On the recommendation of the real estate broker, there was no selling price noted. The Hamilton Facility was re-listed on March 9, 2026 for a price of $9,120,000 (C$12,500,000) and on June 30, 2026 was sold for $7,843,200 (C$10,750,000).

On or around November 27, 2023 and March 6, 2024, the Company experienced an outflow of contaminated water from its stormwater pond, which spilled over into the City of Belleville's roadside ditch and has continued to periodically overflow. The Company is working with its environmental consultants and its Canadian legal counsel to assess the damage caused, remediate this occurrence and report regularly to the Ministry of the Environment, Conservation and Parks from the Province of Ontario (the "MECP").

As a result of a lightning storm that caused a power outage with the local hydro provider and a consequential power surge at the Company's facility, certain electrical systems were rendered inoperable. Following this incident, the Ministry of Labour, Immigration, Training and Skills Development issued an order relating to elevated ammonia levels detected in one of the Company's composting buildings. The Company ceased accepting waste after January 10, 2024, to address this and other compliance matters issued by the MECP. The Company received orders from the MECP to address repairs, the clean-up of unusable waste on site, re-habilitating its stormwater management system and other matters. Management anticipates these matters will take the balance of the year to be completed and be able to re-open. This will require significant investment and is dependent on the Company securing funding. Our operating property, vehicle and equipment will require significant investment to carry out repairs and improvements as ordered by the MECP. This will also include replacement of certain equipment at the Company's Belleville Facility.

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Consulting Contracts

The Company's 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, expired on December 31, 2024.The CEO continues to offer his services on a month-to-month basis at a rate of $36,480 (C$50,000) per month.

The Company's Executive Consulting Agreement by and between the Company and the CFO of the Company, expired December 31, 2023. The CFO continues to offer his services to the Company on a month-to-month basis at the rate of $9,120 (C$12,500) per month.

Financings

(a) Securities Purchase Agreements

On December 31, 2025, the Company had and currently has 6 security purchase agreements outstanding with 4 investors. The outstanding principal balance at December 31, 2025 of the convertible promissory notes was $9,907,272, including accrued interest of $3,564,889 with a fair value of $14,458,322. Please refer to the consolidated financial statements, convertible promissory notes, note 10 and fair value measurement, note 11 for details on the convertible promissory notes. The convertible promissory notes are all past due, thus in default.

(b) Mortgages

On December 31, 2025, the Company had and currently has 6 mortgages with private lenders with outstanding principal balances totaling $9,730,662 (C$13,336,982) (2024-$8,920,726; C$12,835,577).

As at December 31, 2025, $1,934,432 (C$2,651,359) (December 31, 2024-$867,045; C$1,247,547) of accrued interest is included in accrued liabilities in the consolidated balance sheets.

For the year ended December 31, 2025, $1,096,557 (C$1,532,145) (2024-$1,126,326; C$1,542,490) in interest was incurred on the mortgages payable.

The mortgages payable are all past due, thus in default.

(c) Canada Emergency Business Account (the "CEBA")

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.

These CEBA loans were repaid on January 9, 2024 and January 11, 2024, in total $48,650 (C$70,000) and $22,242 (C$30,000) was forgiven as outlined in the CEBA term loan agreements. For the prior year ended December 31, 2024, the forgiven amount is recorded under other expenses in the consolidated statements of operations and comprehensive loss.

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(d) Financings Related to Obligations Under Capital Lease

The Company had one remaining lease obligation under capital lease for machinery and equipment at the Belleville Facility. The Company was in arrears with payments to the lessor. The last payment made was on January 27, 2024. As a result, on May 24, 2024, the lessor repossessed the equipment. On December 18, 2024, the Company received the net proceeds from the sale of the leased equipment at the auction, in the amount of $1,391 (C$2,001), net of the outstanding obligation under capital lease, including outstanding interest.

For the year ended December 31, 2025, $nil (C$nil) (2024-$172; C$236) in interest was incurred.

(e) Other

On April 8, 2021, the Company took delivery of a truck and hauling trailer for a total purchase price of $151,745 (C$218,338) plus applicable harmonized sales taxes. The purchase was financed by a bank term loan of $139,000 (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 $3,406 (C$4,901) due April 7, 2025. The last payment made was on February 7, 2024. On August 13, 2024, the lender of the Company's truck and hauling trailer took possession to be auctioned. On December 18, 2024, the Company received the net proceeds from the creditor on the auction sale, net of disposal costs and the balance of the outstanding corporate loan and interest with the creditor in the amount of $47,049 (C$67,697).

For the year ended December 31, 2025, $nil (C$nil) (2024-$246; C$337) in interest was incurred.

During the year ended December 31, 2025, the Company raised $220,000 (December 31, 2024-$120,000), in a private placement on the issuance of 11,000,000 (2024-6,000,000) common shares of the Company to Travellers.

During the year ended December 31, 2025, Travellers converted $nil (C$nil) (December 31, 2024-$101,130; C$135,600) in outstanding accounts payable for nil (December 31, 2024-809,044) common shares of the Company, based on closing trading prices on the day prior to each conversion.

On January 9, 2024, the Company received a loan in the amount of $240,572 (C$329,670) from Haute Inc., an Ontario company controlled by the CEO. The proceeds received on January 9, 2024 net of capitalized interest for six months and a financing fee amounted to $218,880 (C$300,000).

Treatment of Organic Waste and Septage

On February 28, 2019, the Company announced that it had received the project completion report titled: Development Optimization and Validation of an Innovative Integrated Anaerobic Thermophilic Digester Treatment of Organic Waste and Septage. The report was written by a research team at Fleming College's Centre for Advancement of Water and Wastewater Technologies, located in Lindsay, Ontario, Canada. The collaborative project was supported by the Advancing Water Technologies Program (the "AWT Program") of Southern Ontario Water Consortium. The project focused on the development of a new and innovative technology for handling and processing organic residuals. This new technology utilizes the anaerobic mesophilic digestion process coupled with thermophilic digestion to maximize biogas yields and produce organic fertilizer through optimal operations.

On September 21, 2022, the Company announced that its wholly owned subsidiary SusGlobal Energy Belleville Ltd. ("SusGlobal Belleville") has generated its first Verified Emission Reductions and Removals ("VERRs") and sold its first carbon credits as part of the Anew™ SusGlobal Belleville Composting Offset Project in Ontario (the "Project"). The Project generated approximately 137,000 VERRS from 2017 through 2022 with an approximate market value of between $2.55 (C$3.50) and $7.48 (C$10.25) per VERR. From September 2022 through the date of this filing, the Company has sold 73,464 VERRS. The Project report was submitted to the GHG CleanProjects® Registry, a business unit of the Standards Division of the Canadian Standards Association ("CSA"). The Project is part of the Offset Development and Marketing Agreement with Anew Canada ULC (formerly known as Blue Source Canada ULC) ("Anew Canada") 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 and report are listed on the GHG CleanProject® Registry, https://www.csaregistries.ca/GHG_VR_Listing/CleanProjectDetail?ProjectId=909.

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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.

Operations

The Company owns Environmental Compliance Approvals (the "ECAs") issued by the MECP from the Province of Ontario, Canada 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, in Belleville, Ontario Canada (the "Belleville Facility"), which is currently not operating.

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 (the "Belleville Facility"), has ECAs in place to accept up to 70,000 MT of waste annually. 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 asset purchase agreement (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 year ended December 31, 2025 and to the date of this filing, no tipping fees were earned on waste accepted at the Belleville Facility.

Market Opportunity

Industry Overview

Sustainable solutions to processing organic waste streams and diverting them from landfills to reduce GHG provides an opportunity for the infrastructure which SusGlobal operates with the ECA's attached to the Company's facilities. As more governments legislate and mandate that no organic waste is to be landfilled as part of a climate change initiative SusGlobal can process these waste streams and produce regenerative products as part of the Company's Circular Economy initiative.

Industry Trends

The organic fertilizer market is expected to grow at a compounded annual growth rate. The major drivers for this market are increasing consumption of organic food and products such as cannabis, wine and favorable government rules and regulations. SusGlobal had been producing a dry compost in small quantities up until the date the operations were shut down on January 10, 2024.

Operating Businesses and Revenue

The Company has five wholly owned subsidiaries: SusGlobal Energy Canada Corp., SusGlobal Energy Canada I Ltd., SusGlobal Energy Belleville Ltd., SusGlobal Energy Hamilton Ltd.. and 1684567 Ontario Inc. The Company currently has one full-time employee and two independent contractors. The full-time employee is employed in an administrative position. Toronto, Ontario. The two independent contractors provide services in management positions. None of our employees are covered by collective bargaining agreements.

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We operate the following businesses:

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Environmental Compliance Approvals: The Company owns the Environmental Compliance Approvals (the "ECAs") issued by the MECP from the Province of Ontario, in place to accept up to 70,000 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 waste processing and composting facility located at the Belleville Facility. The Company owns the Environmental Compliance Approvals (the "ECAs") issued by the MECP from the Province of Ontario, in place to accept up to 65,884 MT of waste annually from the province of Ontario at the Hamilton Facility. The Hamilton Facility was sold on June 30, 2026.

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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. The Waste Transfer Station has not yet been constructed.

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Organic Composting Facility: As noted above, the Company's Belleville Facility has ECAs in place to accept up to 70,000 MT of waste annually. Certain assets at the Belleville 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 the previous owner, under an asset purchase agreement. Up until shutting down operations on January 10, 2024, the Company was charging tipping fees for the waste accepted at the Belleville Facility, based on arrangements in place with the customers and the type of waste accepted. Typical waste accepted included SSO, leaf and yard, food, liquid, paper sludge and biosolids. Once the rehabilitation and the capital improvements have been completed, which requires significant funding, management anticipates that the Belleville Facility will commence operations in the first quarter of 2027 based on certain timelines provided by the contractor for the rehabilitation.

We generate revenue from the following activities:

• Tipping fees paid by municipalities and haulers from green bin programs of SSO and other non-hazardous waste,

• the sale of the regenerative products such as organic dry compost and in the future organic liquid fertilizer at our Hamilton Facility with solution-specific brands sold to consumer markets, agriculture, wine and the cannabis industry; and

• the sale of carbon credits generated by the Belleville Facility.

The direct costs of our revenue consist primarily of employee costs, utilities, various equipment and automotive-related expenses, landfilling costs and depreciation.

Our Strengths

SusGlobal has the expertise, proprietary processes, technologies, the environmental compliance approvals and permits to operate and process high volumes of organic waste streams to produce proprietary regenerative products and sell in a high demand market.

Our Growth Strategy

SusGlobal owns the Belleville Facility. As noted previously, the Belleville Facility has not re-commenced operations. On March 10, 2025, the Company signed a service agreement to refurbish the Belleville Facility to bring it to operational readiness, subject to financing.. Subject to financing, the Company will continue to acquire, develop and monetize proprietary technologies and processes in the waste to regenerative products globally, focusing on implementing a robust intellectual property strategy. The Company will, subject to financing, invest in research and development to bring more products to market and increase revenue and cash flow by increasing output, higher production speeds and overall efficiency of all segments of our business.

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Sales and Marketing Strategy

The Company contacts major organic waste generators such as municipalities, commercial and industrial organic waste sources and bids for municipal and commercial contracts. The Company, once the Belleville Facility recommences operations, is expected to employ a sales team to market its products to the various agriculture, wine and cannabis industries and lawn and garden consumer market for its fertilizer products.

Competition

Many of our current and potential competitors are well established and have longer operating histories, significantly greater financial and operational resources and name recognition. Although some of our competitors have been in business for over 100 years, we believe that with our diverse product line, current and expected, better efficiencies resulting in lower wholesale cost of sales, we could obtain a large market share and continue to generate sales growth and compete in the industry. The principal competitive factors in all our product markets are technical features, quality, availability, price, customer support and distribution coverage. The relative importance of each of these factors varies depending on the region. We believe using our expected direct store distribution model nationwide will open significant opportunities for growth.

The markets in which we operate currently and, in the future, can be generally categorized as highly competitive. To maximize our competitive advantages, we expect to continue to expand our product portfolio to capitalize on market trends, changes in technology and new product releases.

Intellectual Property

The protection of our intellectual property is an essential aspect of our business. We own our domain names and trademarks relating to our website's design and content, including our brand name and various logos and slogans. We rely upon a combination of trademarks, trade secrets, copyrights, confidentiality procedures, contractual commitments and other legal rights to establish and protect our intellectual property. We generally enter into confidentiality agreements and invention or work product assignment agreements with our employees and consultants to control access to and clarify ownership of our processes, documentation, and other proprietary information.

As of the date of this filing, we held 4 registered trademarks in the United States. Trademarks include the terms SUSGLOBAL®, CARING FOR EARTH'S JOURNEY®, EARTH'S JOURNEY®, LEADERS IN THE CIRCULAR ECONOMY®. Our SUSGRO trademark application had been opposed but has since been withdrawn by The Scotts Miracle-Gro Company (NYSE: SMG) and is now being registered for use by the Company.

Seasonal Trends

Prior to shutting down operations on January 10, 2024, our operating revenues have tended to be somewhat higher in summer months, primarily due to waste volumes resulting from higher construction and demolition waste volumes and the availability of leaf and yard waste along with any contracts involving the grinding of leaf and yard waste. In addition, revenue from the sale of organic compost would be higher beginning in late spring and tapering off in the fall.

Employees

As at December 31, 2025 we had two full-time employees and two independent contractors. At the date of this filing, we have one full-time employee, and two independent contractors. The full-time employee is employed in a management and administrative position. The two independent contractors provide services in management positions. None of our employees are covered by collective bargaining agreements.

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Financial Assurance and Insurance Obligations

Financial Assurance

Municipal and governmental waste service contracts generally require contracting parties to demonstrate financial responsibility for their obligations under the contract. Financial assurance is also a requirement for (i) obtaining or retaining disposal site or waste transfer station operating permits; and (ii) estimated post-closure and environmental remedial obligations at our operations. We have established financial assurance using letters of credit and/or deposits with the municipalities. The type of assurance used is based on several factors, most importantly: jurisdiction, contractual requirements, market factors and availability of credit capacity.

As required by the MECP, on a tri-annual basis, financial assurance is reviewed and updated. The financial assurance requested by the MECP was updated to $465,220 (C$637,637) and now reduced to $106,877 (C$146,487). On July 2, 2026, the Company issued a certified cheque for $106,877 (C$146,487) and will be delivered to the Client Services & Permissions Branch (“CSPB”) located in Toronto, Ontario , Canada, once agreed to with the MECP.

Insurance

In the past we carried a broad range of insurance coverages, which may include general liability, automobile liability, workers' compensation, real and personal property, directors' and officers' liability, environmental and pollution legal liability and other coverages we believe are customary to the industry. Our exposure to loss for insurance claims would be limited to the per-incident deductible under the related insurance policy. The impact of any known casualty, property, environmental or other contingency may have a material impact on our financial condition, results of operations or cash flows. As a result of the lack of funding, we have not been able to pay the required premiums for any insurance coverage.

Regulation

Our business is subject to extensive and evolving federal, provincial and local environmental, health, safety and transportation laws and regulations. These laws and regulations are administered by the MECP, Environment Canada, and various other federal, provincial and local environmental, zoning, transportation, land use, health and safety agencies in Canada. Many of these agencies regularly examine our operations to monitor compliance with these laws and regulations and have the power to enforce compliance, obtain injunctions or impose civil or criminal penalties in case of non-compliance. During 2020 and 2023, the MECP carried out inspections of our Belleville Facility to address certain items of non-compliance with our ECAs. These inspections and orders issued by the MECP have and will result in significant expenditures to begin addressing the items of non-compliance. Some of the corrective action includes certain sampling, testing, removal of excess waste from the facility and addressing the water level in the facility's stormwater pond which far exceeds the required level as stipulated in its ECA. The Company has completed some of the corrective action and communicates regularly with the MECP and will continue with the remaining corrective action through 2026 pending financing. As at December 31, 2025, the Company has accrued the estimated costs totaling $2,824,245 (C$3,870,950) (2024-$2,344,600; C$3,373,525) in connection with the corrective action. In addition, the Company will also be required to incur significant capital expenditures to ensure the MECP orders are fulfilled and to allow the Belleville Facility to re-open.

On November 5, 2025, the Company's Belleville subsidiary and the CEO received a summons from the Ontario Court of Justice (the "Court"), issued under the Provincial Offenses Act, served by the MECP. The current fine levied by the Court subsequent to the appearance before the Court is $200,640 (C$275,000). The Company has accrued this amount and is included under accrued liabilities in the consolidated balance sheets. The fine may be adjusted after hearing final arguments from the Company and the CEO before the end of September 30, 2026.

Since the primary mission of our business is to manage solid and liquid waste hauled to our Belleville Facility in an environmentally sound manner, our capital expenditures are related, either directly or indirectly, to environmental protection measures, including compliance with federal, provincial and local rules. There are costs associated with siting, design, permitting, operations, monitoring, site maintenance, corrective actions, financial assurance, and facility closure and post-closure obligations. With acquisition, development or expansion of a waste management or waste transfer station, we must often spend considerable time, effort and money to obtain or maintain required permits and approvals. There are no assurances that we will be able to obtain or maintain required governmental approvals. Once obtained, operating permits are subject to renewal, modification, suspension or revocation by the issuing agency. Compliance with current regulations and future requirements will require us to make significant capital and operating expenditures. The re-opening of the Belleville Facility will only occur when the MECP accepts the satisfactory completion of the significant capital and operating expenditures. As a result, this will delay the re-opening of the Belleville Facility and will place us in a competitive disadvantage.

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The primary Provincial statutes affecting our business are summarized below:

Provincial and Local Regulations

Various provincial and local regulations affect our operations. The Province of Ontario has its own laws and regulations governing solid waste disposal, water and air pollution, and, in most cases, releases and cleanup of hazardous substances and liabilities for such matters. The Province of Ontario has also adopted regulations governing the design, operation, maintenance and closure of waste transfer stations. Some regions, municipalities and other local governments in Ontario have adopted similar laws and regulations. Our facilities and operations are likely to be subject to these types of requirements.

Our operations are affected by the increasing preference for alternatives to landfill disposal. Many regional and local governments in Ontario mandate recycling and waste reduction at the source and prohibit the disposal of certain types of waste, such as yard waste, food waste and electronics at landfills. The number of regional and local governments in Ontario with recycling requirements and disposal bans continues to grow, while the logistics and economics of recycling the items remain challenging. In addition, Ontario has imposed timelines for the ban of organics from landfills in the province in an effort to totally divert these wastes from landfills. This will provide opportunities for the expansion of facilities like ours. This had already occurred in the province of Quebec and in the United States of America (the "USA"), where various states have enacted, or are considering enacting, laws that restrict the disposal within the state of solid waste generated outside the state. While laws that overtly discriminate against out-of-state waste have been found to be unconstitutional, some laws that are less overtly discriminatory have been upheld in court. From time to time, the United States Congress has considered legislation authorizing states to adopt regulations, restrictions, or taxes on the importation of out-of-state or out-of-jurisdiction waste. Additionally, several state and local governments have enacted "flow control" regulations, which attempt to require that all waste generated within the state or local jurisdiction be deposited at specific sites. In 1994, the U.S. Supreme Court ruled that a flow control ordinance that gave preference to a local facility that was privately owned was unconstitutional, but in 2007, the Court ruled that an ordinance directing waste to a facility owned by the local government was constitutional. The United States Congress' adoption of legislation allowing restrictions on interstate transportation of out-of-state or out-of-jurisdiction waste or certain types of flow control, or courts' interpretations of interstate waste and flow control legislation, could adversely affect our solid and hazardous waste management services.

Federal, Provincial and Local Climate Change Initiatives

Considering regulatory and business developments related to concerns about climate change, we have identified a strategic business opportunity to provide our public and private sector customers with sustainable solutions to reduce their Greenhouse Gas ("GHG") emissions. As part of our on-going marketing evaluations, we assess customer demand for and opportunities to develop waste services offering verifiable carbon reductions, such as waste reduction, increased recycling, and conversion of biogas and discarded materials into electricity and fuel. We use carbon life cycle tools in evaluating potential new services and in establishing the value proposition that makes us attractive as an environmental service provider. We are active in support of public policies that encourage development and use of lower carbon energy and waste services that lower users' carbon footprints. We understand the importance of broad stakeholder engagement in these endeavors and actively seek opportunities for public policy discussion on more sustainable materials management practices. In addition, we work with stakeholders at the federal and provincial level in support of legislation that encourages production and use of renewable, low-carbon fuels and electricity. Despite the past U.S. withdrawal from the Paris Climate Accords, we have seen no reduction in customer demand for services aligned with their GHG reduction goals and strategies. Ontario is part of the WCI led by the state of California and, if anything, California has doubled down on their GHG reduction goals. The states of Oregon and Washington are also considering joining the WCI that currently includes, amongst other states and provinces, California, Ontario and Quebec as members.

We continue to assess the physical risks to company operations from the effects of severe weather events and use risk mitigation to increase our resiliency in the face of such events. Pending financing we will be investing in infrastructure to withstand more severe storm events, which may afford us a competitive advantage and reinforce our reputation as a reliable service provider through continued service in the aftermath of such events.

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