SNRG 10-K & 10-Q changes, risk factors and insider trading

To the extent available and where financially possible, we maintain insurance coverage that we believe is customary in our industry. Such insurance does not, however, provide coverage for all liabilities, including certain hazards incidental to our business, and we cannot assure you that our insurance coverage will be adequate to cover claims that may arise or that we will be able to maintain adequate insurance at rates we consider reasonable. As a result of the lack of fundingfunding, we have not been able to pay the required premiums for complete insurance coverage.

Part of our strategy is to grow through acquisitions.acquisitions dependent on financing. Consummating acquisitions of related businesses, or our failure to integrate such businesses successfully into our existing businesses, could result in unanticipated expenses and losses. Furthermore, we may not be able to realize any of the anticipated benefits from the acquisitions.

Statements in this Annual Report on Form 10-K may be "forward-looking statements." Forward-looking statements include, but are not limited to, statements that express our intentions, beliefs, expectations, strategies, predictions or any other statements relating to our future activities or other future events or conditions. These statements are based on current expectations, estimates and projections about our business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may, and are likely to, differ materially from what is expressed or forecasted in the forward-looking statements due to numerous factors, including those described above and those risks discussed from time to time in this prospectus,Annual Report, including the risks described under "Risk Factors," and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this prospectusAnnual Report and in other documents which we file with the SEC.

Any forward-looking statements speak only as of the date on which they are made, and except as may be required under applicable securities laws, we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this prospectus.Annual Report.

We also have a significant financial obligation relating to closure, post-closure and environmental remediation at our existing facility. This obligation will need to be supported by a letter of credit or a payment in the form of a certified cheque in favor of the MECP, which the Company hasis not been ableplanning to satisfy asthis of December 31, 2024 andrequirement as at the date of this filing. Environmental regulatory changes could accelerate or increase such costs, requiring our expenditure to materially exceed any current letter of credit.

On or around November 27, 2023 and March 6, 2024, the Company experienced an outflow of leachate impacted water from its stormwater pond into the City of Belleville's roadside ditch and has continued to periodically overflow. The Company ishas been working with its environmental consultants and its Canadian legal counsel to assess the damage caused, remediate this occurrence and report regularly to the MECP.

As a result of ana orderlightning issuedstorm bythat 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,Development specificallyissued an order relating to highelevated ammonia levels detected in one of the Company's composting buildings,buildings. theThe Company ceased accepting waste after January 10, 2024, to address this and other compliance matters issued by the MECP. The Company also 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.re-open in the first quarter of 2027. This will require significant investment and is dependent on the Company securing funding. We believe that ourOur operating property, vehicle and equipment had been adequately maintained but 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.

We use computers in substantially all aspects of our business operations. We also use mobile devices, social networking and other online activities to connect with our employees and our customers. Such uses give rise to cybersecurity risks, including security breach, espionage, system disruption, theft and inadvertent release of information. Our business involves the storage and transmission of numerous classes of sensitive and/or confidential information and intellectual property, including customers' personal information, private information about employees, and financial and strategic information about the Company and its business partners. Further, as the Company pursues its strategy to grow through potential acquisitions and to pursue new initiatives that improve our operations and cost structure, the Company is also expanding and improving its information technologies, resulting in a larger technological presence and corresponding exposure to cybersecurity risk. Much of this is dependent on the availability of the necessary funding. If we fail to assess and identify cybersecurity risks associated with acquisitions and new initiatives, we may become increasingly vulnerable to such risks. Additionally, while we have implemented measures to prevent security breaches and cyber incidents, our preventative measures and incident response efforts may not be entirely effective. The theft, destruction, loss, misappropriation, or release of sensitive and/or confidential information or intellectual property, or interference with our information technology systems or the technology systems of third parties on which we rely, could result in business disruption, negative publicity, brand damage, violation of privacy laws, loss of customers, potential litigation and liability and competitive disadvantage.

The amount of insurance we are required to maintain for environmental liability is governed by statutory requirements. We believe that the cost for such insurance is high relative to the coverage it would provide and therefore, our coverages, wherever financially possible, are generally maintained at the minimum statutorily required levels. We face the risk of incurring additional costs for environmental damage if our insurance coverage is ultimately inadequate to cover that damage. The inability of our insurers to meet their commitments in a timely manner and the effect of significant claims or litigation against insurance companies may subject us to additional risks. To the extent our insurers are unable to meet their obligations, or our own obligations for claims are more than we estimated, there could be a material adverse effect to our financial results. As a result of the lack of fundingfunding, we have not been able to pay the required premiums for complete insurance coverage.

Additionally, as of December 31, 2024,2025, we have no debt that is exposed to changes in market interest rates as our interest rates are fixed. TheOn July 2, 2026, the Company hasprepared nota beencertified ablecheque to obtain a letter of credit forsatisfy the new financial assurance requirement with the MECP in the amount of $443,158 (C$637,637) and currently reduced to $101,808$106,877 (C$146,487),. subjectThe certified cheque will be delivered to the CompanyCSPB re-submittinglocated itsin financialToronto, assuranceOntario re-evaluation., Canada, once agreed to with the MECP. If interest rates on our debt becomes variable, our interest expense would also increase, increasing our net losses and decreasing our cash flow.

As at December 31, 2024,2025, and the date of this filing, the Company did not have any revolving credit facility to support cash flow requirements. As a result of defaults on all our convertibledebt promissory notesinstruments, we could be required to immediately repay such debt which we currently are not able to satisfy. Additionally, any such default may cause a default under many of our other credit agreements and debt instruments. Without waivers from the lenders to those agreements, and/or the availability of other financing, either debt or equity, anythese such default woulddefaults have a material adverse effect on our ability to continue to operate.

As a result of ana orderlightning issuedstorm bythat 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,Development specificallyissued an order relating to highelevated ammonia levels detected in one of the Company's composting buildingsbuildings. at its Belleville Facility, theThe Company ceased accepting waste after January 10, 2024, to address this and other compliance matters issued by the MECP. The Company also 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 reopen.re-open. This will require significant investment and is dependent on the Company securing funding. TheOur Companyoperating property, vehicle and equipment will require significant investment to carry out repairs and improvements, some of whichimprovements as ordered by the MECP. This will also include replacement of certain equipment at the Company's Belleville Facility.

During the year ended December 31, 2024,2025, the Company generated revenue totaling $79,886$32,240 from its Belleville Facility compared to $610,461$79,886 in the year ended December 31, 2023.2024. The decrease in revenue is due to the result of not accepting waste after January 10, 2024. The current year's revenue is entirely from the sale of carbon credits whereas in the prior year the revenue included both tipping fee revenue from the acceptance of waste and from the sale of carbon credits.

In the typicalnormal operation of the Belleville Facility, the Company processes organic and other waste received and produces the end product, compost. The cost of sales totaled $1,292,286$738,970 during the current year compared to $1,292,826 for the yearprior ended December 31, 2024, compared to $2,169,025 for the year ended December 31, 2023. Although the acceptance of waste ceased after January 10, 2024, costs continued to be incurred primarily for repairs and ongoing maintenance.year. These costs include equipment rental, delivery, fuel, repairs and maintenance, direct wages and benefits, depreciationdepreciation, utilities and utilities.outside Thesecontractors. Included are costs includefor estimatesactual and estimated expenditures for completing certain known compliance matters as ordered by the MECP.

Operating expenses increaseddecreased by $978,334$2,432,752 from $3,717,248 in the year ended December 31, 2023 to $4,695,582 in the year ended December 31, 2024,2024 to $2,262,830 in the year ended December 31, 2025, explained further below.

Management compensation related to stock-based compensation reduced by $14,400,$216,000, in the year ended December 31, 20242025 compared to the year ended December 31, 2023.2024, Thesince currentany remaining stock-based compensation reflectsbecame thefully stock-basedvested compensationby issuedDecember to31, the CEO as stipulated in his executive consulting contract, effective January 1, 2023.2024. And the management compensation relating to fees increaseddecreased by $80,820,$10,875 reflectingimpacted only by the increasetranslation inof the CEO'sCanadian compensationdollar forfees to the currentUnited year.States dollar. In Canadian dollars, the fees were unchanged.

Professional fees increasedreduced by $102,369$416,648, from $580,596$682,965 in year ended December 31, 2024 to $266,317 in the year ended December 31, 20232025, to $682,965 in the year ended December 31, 2024. The primary reason for the increase isprimarily due to additionala reduction in legal fees and consulting fees for environmental services incurred in addressing the orders issued by the MECP and the Cityreduction or absence of Belleville.legal fees defending a previous claim.

RentInterest and occupancyexpense increased by $28,122$254,667, from $212,521$1,214,288 in the year ended December 31, 20232024 to $240,643$1,468,955 in year ended December 31, 2024,2025. This increase was primarily due to anthe increasenew infourth rent and related expensesmortgage for the Company'sBelleville Toronto,Facility Ontario,received Canadain officeApril 2024 and additionalthe propertyinterest taxesaccruing on the obligation owing to the Company's general contractor for the entireHamilton current year on the additional land purchased in Hamilton, Ontario, Canada in November of 2023.Facility.

Directors'Filing compensationfees decreasedincreased nominally by $3,123,$3,736 from $71,579$34,520 in the year ended December 31, 20232024, to $68,456$38,256 in the year ended December 31, 2024.2025. The Company continues to not have any investor relations website service.

The foreign exchange lossincome in the year ended December 31, 20242025 of $1,168,768$757,288 wasrepresented an increase of $1,494,132$1,926,056 from the incomeloss of $325,364$1,168,768 recorded in the year ended December 31, 2023,2024, due primarily to the translation of significant United States dollar denominated transactions and balances during the current year including the convertible promissory notes, compared to the prior year, during a period of a weakeningstrengthening Canadian dollar compared to the United States dollar. In the prior year the Canadian dollar had strengthenedweakened compared to the United States dollar.

OnIn the prior year, on December 31, 2024, due to the current market conditions, the Company recorded an impairment loss of $1,564,401$nil (2024-$1,564,401), on the assets held for sale.

At December 31, 2024,2025, the Company tested the long-lived assets for impairment to determine whether the carrying value exceeded the fair value. The Company used quoted market values and recent offers for of its long-lived assets and determined that an asset impairment of $1,564,401$nil (2024-$1,564,401) was required to be recognized.

As at December 31, 2024,2025, the Company had a cash balance of $1,295$nil (2023-$1,2632024-$1,295) and current liabilities in the amount of $33,510,297$40,448,765 (2023-$30,823,9632024-$33,510,297). As at December 31, 2024,2025, the Company had a working capital deficit of $33,441,301$40,416,007 (2023-$30,390,4232024-$33,441,301). The Company does not currently have sufficient funds to satisfy the current debt obligations. Should the Company's creditors seek or demand payment, the Company does not have the resources to pay for or satisfy any such claims currently. The Company has been in discussions with other creditors and equity investors for new financing options to repay or re-finance certain current debt obligations.

Credit Risk Exposure - is the risk of loss associated with a counterparty's inability to perform its payment obligations. As at December 31, 2024,2025, the Company's credit risk is primarily attributable to cash and trade receivables.cash. As at December 31, 2024,2025, the Company's cash was held with a Canadian chartered bank and a US bank.

Refer to Security Purchase Agreements, FinancingMortgages Agreements with PACEPayable and Other financings noted above for details.

Refer to notes 9, 10, 1110 and 1312 to the consolidated financial statements for additional information related to our various borrowings.

Growth and percentage comparisons made herein generally refer to the three-monththree and six-month period ended MarchJune 31,30, 2026 compared with the three-monththree and six-month period ended MarchJune 31,30, 2025 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.

On March 10, 2025, the Company signed a service agreement which provides for the overall rehabilitation to operational readiness of the Company's Belleville facility in Belleville, Ontario Canada (the "Belleville Facility"). Once the Belleville Facility becomes operationally ready and all government orders have been fulfilled, the Company willintends to retain a third party to operate the Belleville Facility including an operate and manage agreement.

As at MarchJune 31,30, 2026, the Company had and currently has 6 security purchase agreements outstanding with 4 investors. The outstanding principal balance at MarchJune 31,30, 2026 of the convertible promissory notes was $10,246,190,$10,552,150, including accrued interest of $3,931,852$4,237,812 with a fair value of $14,760,920.$14,968,408. Please refer to the interim condensed consolidated financial statements, convertible promissory notes, note 10 and fair value measurement, note 11 for details on the convertible promissory notes.

As at MarchJune 31,30, 2026, the Company had a total of sixfour mortgages totaling $9,742,824$5,728,295 (C$13,580,742C$8,140,252). The mortgages are all past due.due and due on demand. Please refer to long-term debt, note 9, for details on the mortgages.

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, pending funding, 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.

As of MarchJune 31,30, 2026 and December 31, 2025,2026, the Company had cash balances of $nil.$213,375 (December 31, 2025-$nil) and current debt obligations and other current liabilities in the amount of $41,203,358$33,228,709 (December 31, 2025-$40,448,765). As at MarchJune 3130, 2026, the Company had a working capital deficit of $41,168,330$32,937,502 (December 31, 2025-$40,416,007). The Company does not currently have sufficient funds to satisfy the current debt obligations.

The Company's total assets as at MarchJune 31,30, 2026 were $8,631,369$3,030,394 (December 31, 2025-$8,840,820) and total current liabilities were $41,203,452$33,228,709 (December 31, 2025-$40,448,765). Significant losses from operations have been incurred since inception and there is an accumulated deficit of $53,633,130$51,819,958 as at MarchJune 31,30, 2026 (December 31, 2025 -$52,116,571). 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.

As at MarchJune 31,30, 2026, the Company's debt obligations totaled $25,281,587$20,779,425 (December 31, 2025-$24,970,575). All debt obligations are past due.

TheA letter of credit or cash deposit 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 Belleville Facility to ensure compliance is adhered to and the letter of creditamount is subject to change by the MECP. As a result of inspections carried out by the MECP during the prior years, some of which have resulted in MECP orders having been issued, the Company has accrued estimated and actual costs for corrective measures in orders issued by the MECP in the amount of $2,777,020$2,723,988 (C$3,870,950) (December 31, 2025-$2,824,245; C$3,870,950).

CONSOLIDATED RESULTS OF OPERATIONS - FOR THE THREE-MONTH PERIOD ENDED MARCHJUNE 31,30, 2026 COMPARED TO THE THREE-MONTH PERIOD ENDED MARCHJUNE 31,30, 2025

As a result of an order issued by the Ministry of Labour, Immigration, Training and Skills Development, specifically relating to high ammonia levels in one of the Company's composting buildings at its Belleville Facility, the Company ceased accepting waste after January 10, 2024, to address this and other compliance matters issued by the MECP. The Company also 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 and into early 2026 to be completed and be able to reopen in early 2027. This will require significant investment and is dependent on the Company securing funding. The Company will require significant investment to carry out repairs and improvements, some of which as ordered by the MECP. This will also include replacement of certain equipment at the Belleville Facility.

The Company did not earn any revenue during the three-month period ended March 31, 2026 and $6,345 during the three-month period ended March 31, 2025 from the sale of carbon credits. Under normal operating conditions of the Belleville Facility, the Company processes organic and other waste received and produces the end product, compost. The cost of sales totaled $74,529$70,364 for the three-month period ended MarchJune 31,30, 2026, compared to $450,720$108,481 for the three-month period ended MarchJune 31,30, 2025. These costs include equipment rental, delivery, fuel, repairs and maintenance, direct wages and benefits, depreciation, utilities and outside contractors. Included are costs for actual and estimated expenditures for completing certain known compliance matters as ordered by the MECP, which did not increase in the current three-month period.

Operating expenses increased by $320,904$1,211,927 from $709,930a credit of $77,007 in the three-month period ended MarchJune 31,30, 2025 to $1,030,834$1,134,920 in the three-month period ended MarchJune 31,30, 2026, explained further below.

Management compensation relating to fees reducedincreased by $6,038a nominal amount, impacted only by the translation of the Canadian dollar fees to the United States dollar. In Canadian dollars, the fees were unchanged.

Professional fees reduced by $37,770,$72,260 from $106,395$64,535 in the three-month period ended MarchJune 31,30, 2025, to $68,625a credit of $7,725 in the three-month period ended MarchJune 31,30, 2026, primarily due to a reduction in legal fees and consulting fees for environmental services incurred in addressing the orders issued by the MECP.MECP and adjustments to previous professional fee accruals.

Interest expense increased by $51,318$159,480 from $348,090$369,001 in the three-month period ended MarchJune 31,30, 2025, to $399,408$528,481 in the three-month period ended MarchJune 31,30, 2026. This increase was primarily due to the interest accruing on the obligation owing to the Company's general contractor for the Hamilton Facility and the increased mortgage balance during the current three-month period. In addition, the mortgagees requested an adjustment to their accrued interest which was then capitalized to one of their mortgages. This was immediately before certain accrued interest they forgave in connection with the sale of the Hamilton Facility.

Office and administration expenses decreasedreduced by $12,722$8,694 from $69,132$32,111 in the three-month period ended MarchJune 31,30, 2025 to $56,410$23,417 in the three-month period ended MarchJune 31,30, 2026. The decrease was primarily due to a decreasereduction in interest and penalties relatedon to unpaidoverdue accounts payableand by a reduction in wages and governmentadministrative remittancesexpenses payable.in the Belleville Facility with the resignation of the lone employee.

Rent and occupancy decreasedincreased by $8,620$17,084 from $55,513$66,003 in the three-month period ended MarchJune 31,30, 2025, to $46,893$83,087 in the three-month period ended MarchJune 31,30, 2026 primarily due to reductionsincreases in both property taxes and rent expense.expense and adjustments made to previous accruals.

The Company has no active insurance policies in place and thus no insurance expense in the current and prior three-month periods Filing fees increased by a nominal amount $1,245 from $7,021 in the three-month period ended March 31, 2025, to $8,266 in the three-month period ended March 31, 2026.periods.

ThereFiling werefees nodecreased repairsby and$4,737 maintenancefrom in the current three-month period ended March 31 2026 compared to $261$9,928 in the three-month period ended MarchJune 31,30, 2025.2025, to $5,191 in the three-month period ended June 30, 2026.

The foreign exchange income in the three-month period ended MarchJune 31,30, 2025, in the amount of $20,197$767,824 reduced to an expense of $300,875$353,433 in the three-month period ended MarchJune 31,30, 2026, a change of $321,072,$1,121,257, due primarily to the translation of significant United States dollar denominated balances, such as the convertible promissory notes during a period where the Canadian dollar weakened compared to the United States dollar.

During the current three-month period ended MarchJune 31,30, 2026, the Company recorded a loss on the revaluation of the convertible promissory notes in the amount of $302,598$207,488 compared to a loss of $618,755$730,973 in the three-month period ended MarchJune 31,30, 2025. In addition, the companyCompany recognized a provision for loss for a March 2022 convertible promissory note in the amount of $108,598 in both three-month periodsperiod ended MarchJune 31,30, 2025 and March$109,804 31,in the three-month period ended June 30, 2026. Further in connection with the sale of the Hamilton Facility, the Company recognized a gain on the sale of $1,829,626, forgiveness of interest and certain debt of $1,191,850 and a reversal of a previous provision of $296,941, in connection with additional debt owed to the general contractor for the Hamilton Facility. Overall, the other expenses decreased by $316,157.$3,815,137 from a loss of $814,012 in the three-month period ended June 30, 2025 to income of $3,001,125.

As at MarchJune 31,30, 2026, the Company had a working capital deficit of $41,168,330$32,937,502 (December 31, 2025-$40,416,007), incurrednet aincome netof $296,613 (June 30, 2025-net loss of $1,516,559 (March 31, 2025-$1,881,658$2,701,149) for the three-monthsix-month period ended MarchJune 31,30, 2026 and had an accumulated deficit of $53,633,130$51,819,958 (December 31, 2025-$52,116,571) and expects to incur further losses in the development of its business.

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 MarchJune 31,30, 2026.

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 (expenses), in the interim condensed consolidated statements of operations and comprehensive loss.income (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.

There were no new accounting pronouncements adopted during the three-month period ended MarchJune 31,30, 2026.

As at MarchJune 31,30, 2026, the Company had 142,332,019 common shares issued and outstanding. As of the date of this filing, the Company also had 142,332,019 common shares issued and outstanding.

The Company has no stock options, warrants or restricted stock units outstanding as at MarchJune 31,30, 2026 and as of the date of this filing.

For the three-monththree periodand six-month periods ended MarchJune 31,30, 2026, the Company incurred $109,350$110,390 (C$150,000) and $217,740 (2025-$104,520C$300,000) (2025-$108,420; C$140,000C$150,000 and $212,940; C$300,000) 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 $27,338$27,097 (C$37,500) and $54,435 (2025-$26,130C$75,000) (2025-$27,105; C$37,500 and $53,235; C$75,000) respectively, in management fees expense with the Company's chief financial officer (the "CFO"). As at MarchJune 31,30, 2026, unpaid remuneration and unpaid expenses in the amount of $1,112,028$1,210,069 (C$1,550,081C$1,719,581) (December 31, 2025-$1,007,247; C$1,380,547) is included in accounts payable and $354,063$373,690 (C$493,536C$531,036) (December 31, 2025-$332,724; C$456,036) is included in accrued liabilities in the interim condensed consolidated balance sheets.

For the three-monththree periodand six-month periods ended MarchJune 31,30, 2026, the Company incurred $25,616$28,450 (C$35,138C$39,353) and $54,066 (C$74,491) (2025-$24,5112025-$32,717; C$35,176C$45,449 and $57,228; C$80,625), respectively, in rent expense paid under a lease agreement with Haute Inc. ("Haute"), an Ontario company controlled by the CEO. The lease agreement had expired and the Company is currently on a month-to-month arrangement. As at MarchJune 31,30, 2026, $43,617$106,757 (C$60,722C$151,708) (December 31, 2025-$62,411; C$85,541) in outstanding rent expense including the related goods and services tax is included in accounts payable in the interim condensed consolidated balance sheets.

For the independent directors, the Company recorded directors' compensation during the three-monththree periodand six-month periods ended MarchJune 31,30, 2026 of $13,669$13,549 (C$18,750) and $27,218 (2025-$13,065C$37,500) (2025-$13,353; C$18,750 and $26,618; C$37,500). respectively. As at MarchJune 31,30, 2026,2025, outstanding directors' compensation of $321,606$328,658 (C$448,293C$467,043) (December 31, 2025-$313,395; C$429,543) is included in accrued liabilities in the interim condensed consolidated balance sheets.

During the three-monthsix-month period ended MarchJune 31,30, 2026, advances on loans payable to related parties totaled $8,748$26,627 (C$12,000C$36,687) (2025-$14,6332025-$19,014; C$21,000C$26,788) and repayment of loans payable to related parties totaled $nil$714,207 (C$nilC$984,027) (2025-$14,6332025-$17,745; C$21,000C$25,000).