10-Q: SusGlobal Energy Corp. Q1 2026 Financial Update

SusGlobal Energy Corp. reports significant net loss and ongoing going concern doubts in its Q1 2026 10-Q filing, with substantial liabilities and limited cash.

Summary

• SusGlobal Energy Corp. filed its Form 10-Q for the quarterly period ended March 31, 2026.
• The company reported a net loss of $1,516,559 for the three-month period, compared to a net loss of $1,881,658 in the same period of 2025.
• As of March 31, 2026, the company had a working capital deficit of $41,168,330 and an accumulated deficit of $53,633,130.
• The company has stopped receiving waste at its Belleville facility since January 10, 2024, due to non-compliance matters.
• SusGlobal continues to seek financing through debt or equity, having been unsuccessful in a recent advisory and distribution agreement.
• The company's ability to continue as a going concern is dependent on obtaining necessary financing, satisfying creditors, and achieving profitable operations.

Sentiment

Score: 2

Explanation: StockSavvy.ai views this filing as highly negative due to the significant net loss, worsening liquidity, ongoing operational issues, and substantial legal and financial risks, all contributing to severe going concern doubts.

Positives

• The company's Hamilton Facility was sold on June 30, 2026, for $7,712,050 (C$10,750,000), settling claims and mortgages.
• A cash deposit of $105,090 (C$146,487) was issued for financial assurance to the MECP on June 30, 2026.
• A payment of $93,291 (C$130,040) was made to the Corporation of the County of Hastings on June 30, 2026.

Negatives

• The company incurred a net loss of $1,516,559 for the three-month period ended March 31, 2026.
• A significant working capital deficit of $41,168,330 exists as of March 31, 2026.
• The company has an accumulated deficit of $53,633,130 as of March 31, 2026.
• The Belleville facility has been non-operational since January 10, 2024, due to environmental compliance issues.
• The company has substantial liabilities, including $41,203,452 in current liabilities as of March 31, 2026.
• The company has no cash balance as of March 31, 2026.

Risks

• Substantial doubt exists regarding the company's ability to continue as a going concern.
• The company's operations are dependent on its ability to secure necessary financing.
• Failure to satisfy obligations to creditors could have a material adverse effect.
• The Belleville facility requires significant investment for repairs and improvements to reopen.
• The company faces numerous legal proceedings and claims, including unpaid legal fees, contractor claims, and investor disputes.
• Environmental compliance issues at the Belleville facility have led to operational shutdowns and potential fines.
• The company has significant debt obligations, all of which are past due.

Future Outlook

The company's ability to continue as a going concern is dependent on its ability to obtain necessary financing to further its business development, satisfy its obligations to creditors, and achieve profitable operations. Management anticipates that the repairs and improvements at the Belleville Facility will take several months to complete and require significant investment, dependent on securing funding.

Management Comments

• Management believes that renewable energy is the energy of the future and that SusGlobal is equipped to turn waste into valuable energy and regenerative products.
• Management believes that the additional claim amount of $189,834 from Tradigital is without merit.
• Management intends to repay the balance owed on convertible promissory notes when financially able to do so.
• Management has been in discussions with the CRA to repay outstanding amounts over a reasonable amount of time once funding is received.
• Management has been in discussions with the claimant's key principal and the architectural firm's counsel to resolve the timing of settlement of outstanding accounts payable.
• Management has been in discussions to settle the amounts owing tied into the sale of the Hamilton Facility.

Industry Context

StockSavvy.ai notes that SusGlobal Energy Corp. operates in the waste-to-energy and regenerative products sector, an industry focused on sustainability and circular economy principles. The company's challenges in operationalizing its Belleville facility and securing financing are significant hurdles in this capital-intensive and highly regulated sector.

Comparison to Industry Standards

• The company's lack of revenue and significant net loss for the quarter is a stark contrast to established players in the waste management and renewable energy sectors who typically generate consistent revenue streams and are often profitable.
• The company's reliance on external financing and its going concern status highlight a significant deviation from industry standards where stable financial footing is crucial for development and expansion.
• Competitors in the waste-to-energy sector, such as Covanta Holding Corporation or Waste Management, Inc., generally operate at scale with established revenue models and positive cash flows, demonstrating a different financial profile.

Legal Proceedings

• Claim against the company for unpaid legal fees in the amount of $46,804.
• Action launched by an October 2021 Investor claiming $1,300,000 plus accrued interest.
• Outflow of leachate impacted water from the Belleville Facility stormwater pond into the City of Belleville's roadside ditch.
• Unpaid hydro bills totaling $325,371 as at December 31, 2025.
• Amended claim from Tradigital for owed fees, stock, and attorney fees.
• Default judgment filed by a March 2022 Investor in the amount of $2,848,744 plus pre-judgement interest.
• Order issued by the City of Belleville against the Belleville Facility for repayment of contaminated water pumping costs.
• Statement of claim from Gillam Construction Group Ltd. for the construction of the Hamilton Facility.
• Construction lien on the Belleville Facility property for outstanding accounts payable for environmental services.
• Notice from the Ontario Supreme Court of Justice for unpaid fees with the Company's prior auditors.
• Garnishment of the Company's two bank accounts for unpaid auditor fees.
• Outstanding property taxes, annual road maintenance assessments, interest, penalties and related costs for the Belleville Facility.
• Notice of outstanding harmonized sales taxes and payroll remittance amounts, including interest and penalties, owing for the Belleville Facility.
• Claim from the architectural firm for the Hamilton Facility for outstanding accounts payable.
• Summons from the MECP for the Belleville subsidiary and CEO, resulting in an accrued fine of $200,640.

Related Party Transactions

• Management fees expense of $109,350 (C$150,000) for the three-month period ended March 31, 2026, with Travellers International Inc.
• Management fees expense of $27,338 (C$37,500) for the three-month period ended March 31, 2026, with the CFO.
• Rent expense of $25,616 (C$35,138) for the three-month period ended March 31, 2026, with Haute Inc.
• Advances on loans payable to related parties totaled $8,748 (C$12,000) during the three-month period ended March 31, 2026.
• Loans payable to directors totaling $48,500 as of March 31, 2026.
• Loans payable to officers totaling $53,789 as of March 31, 2026.
• Loan from Haute Inc. totaling $666,945 as of March 31, 2026.

Stakeholder Impact

• Shareholders: The company's financial distress and ongoing losses negatively impact shareholder value and increase the risk of dilution if further capital is raised.
• Creditors: The company has substantial past-due debt obligations, creating significant risk for creditors.
• Employees: The company's going concern issues and operational challenges may lead to uncertainty regarding job security.
• Suppliers: The company's financial instability and legal proceedings may affect its ability to meet payment obligations to suppliers.
• Regulatory Bodies (MECP, CRA): The company faces ongoing scrutiny and potential penalties related to environmental compliance and tax remittances.

Next Steps

• Secure necessary financing to further the development of its business.
• Satisfy its obligations to its creditors.
• Achieve profitable operations.
• Complete repairs and improvements at the Belleville Facility to enable reopening.
• Settle outstanding legal proceedings and judgments.

Key Dates

Recommendation

The company exhibits severe financial distress, including significant losses, a substantial working capital deficit, and an ongoing going concern issue. The operational challenges at the Belleville facility, coupled with numerous legal proceedings and past-due debt, present a high level of risk. Without a clear path to immediate and substantial financing, the outlook is extremely negative, suggesting a sell recommendation.

Keywords

SusGlobal Energy Corp., Form 10-Q, Quarterly Report, Financial Statements, Going Concern, Net Loss, Liabilities, Financing