Cautionary Note Regarding Forward Looking Statements





This quarterly report on Form 10-Q contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. These
forward-looking statements involve risks and uncertainties, including statements
regarding Sustainable Projects Group Inc. (SPGX's) capital needs, business plans
and expectations. Such forward-looking statements involve risks and
uncertainties regarding SPGX's ability to carry out its planned development and
production of products. Forward-looking statements are made, without limitation,
in relation to SPGX's operating plans, SPGX's liquidity and financial condition,
availability of funds, operating and exploration costs and the market in which
SPGX competes. Any statements contained herein that are not statements of
historical facts may be deemed to be forward-looking statements. In some cases,
you can identify forward-looking statements by terminology such as "may",
"will", "should", "expect", "plan", "intend", "anticipate", "believe",
"estimate", "predict", "potential" or "continue", the negative of such terms or
other comparable terminology. Actual events or results may differ materially. In
evaluating these statements, you should consider various factors, including the
risks outlined below, and, from time to time, in other reports SPGX files with
the SEC. These factors may cause SPGX's actual results to differ materially from
any forward-looking statement. SPGX disclaims any obligation to publicly update
these statements, or disclose any difference between its actual results and
those reflected in these statements. The information constitutes forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995. Given these uncertainties, readers are cautioned not to place undue
reliance on such forward-looking statements.



Overview

The following discussion of SPGX's financial condition, changes in financial condition and results of operations for the six months ended June 30, 2019 should be read in conjunction with SPGX's unaudited consolidated interim financial statements and related notes for the six months ended June 30, 2019.





SPGX is a business development company engaged in project development and
holdings through value based investments and collaborative partnerships with
companies across sustainable sectors. It is continually evaluating and acquiring
assets for holding and or development. SPGX initiated its goals by pursuing
investment and partnerships amongst diversified holdings and companies globally.
SPGX is currently involved in the evaluation and acquisition of assets and
partnerships for holding or business development activities with a continued
focus on sustainability projects.



Plan of Operation




SPGX's plan of operation for the next 12 months is to continue to evaluate and
acquire assets and partnerships for holding or business development activities,
and to collaborate, develop and create new assets with a continued focus on
sustainability. SPGX is currently evaluating other projects to find attractive
partnerships to expand SPGX's business development activities. Other projects of
interest that management is currently researching are in the field of
sustainability. Currently, SPGX is engaged in the following projects:



  1. Cormo USA Inc.;
  2. Gator Lotto; and
  3. Hero Wellness Systems Inc.

Form 10-Q Sustainable Projects Group Inc. Page 3






  1. Cormo USA Inc.




Cormo USA Inc. - Based on a letter of intent and a shareholder agreement, SPGX
entered into a joint venture with Cormo AG to assist in the business development
of Cormo's operations in the United States. Cormo AG is in the business of
producing and developing peat moss replacement and natural foam products and
technologies. Also, for its participation in the joint venture, SPGX will be
required to provide certain services, including U.S. business development,
management, market research, and determination of potential distribution
channels. Under the agreement, Cormo USA Inc has exclusive marketing and
distribution rights to Cormo AG's sustainable agriculture business and suite of
patents. Cormo's technology allows field waste from maize farms to be turned
into a variety of products, including peat moss. In May 2019, a site was chosen
for its first production facility, with production scheduled to start in early
2020. The joint venture is controlled by Cormo AG (35%) and SPGX (35%) equally
with the balance of shares held by eight non-controlling shareholders.

See Exhibit 10.13 - Letter of Intent and Exhibit 10.20 - Shareholder's Agreement for more details.





  2. Gator Lotto





Gator Lotto - In 2018 SPGX acquired all technology assets including source code,
graphics, and online assets for US$400,000 through the issuance of new shares.
SPGX aims to commercialize this project which features a fully functioning lotto
ticket management app (currently in version 2.0) with more than 40,000
downloads. Management plans to spin out this technology into a newly formed
partnership within the next 18 months with the aim to increase monetization,
user growth and eventual sale or licensing. SPGX spent an additional $11,000 to
further develop the technology. See Exhibit 10.12 - Asset Purchase Agreement for
more details. The latest version of the Lotto App was launched February 2019. At
December 31, 2018, SPGX recorded an impairment of $168,000 which approximate its
market value. SPGX currently does not have the resources to exploit the app and
may consider selling this asset in the future.

See Exhibit 10.12 - Asset Purchase Agreement for more details.





  3. Hero Wellness Systems Inc.




Hero Wellness Systems Inc. -Pursuant to the terms and conditions of a
shareholder's agreement dated in September, 2018, SPGX entered into a joint
venture relationship for the purpose of importing, selling and distributing
products offered by Vitalizer International of Switzerland. SPGX's participation
in the joint venture is 55%. SPGX's role is to provide certain services,
including general management and day to day operations of the joint venture. The
joint venture is comprised of the following ownership: 55% SPGX, with the
balance of ownership held by six non-controlling owners. See Exhibit 10.14 -
Shareholder's Agreement for more details.



     RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2019 AND 2018



                             For the three       For the three       For

the six For the six


                             months ended        months ended       months ended      months ended
                               June 30,            June 30,           June 30,          June 30,
                                 2019                2018               2019              2018
Revenues
Revenues                    $           986     $        20,000     $      95,986     $      35,000

Operating Expenses
Administrative and other
operating expenses          $        26,295     $        41,938     $     

71,619     $      10,493
Advertising and
Promotion                             2,660               1,499             6,181             1,998
Depreciation                         30,805               1,229            61,590             2,104
Consulting fees                     137,500              10,500           178,000            21,000
Management fees                      22,500               1,579            45,000            25,279

Professional fees                    28,178              44,500            52,124            42,332
Rent                                  8,069                 750            18,961             1,250
Salaries and wages                   45,945              11,166           103,054            11,166
Travel                               23,863               1,572            30,969             1,572
Amortized right of use
assets                               16,312                 473            32,625               473
Loss/Gain on disposition
of assets                                 -               1,596                 -            30,596
                                    342,127             116,802           600,123           148,263

Operating income/loss
before interest expense
and impairment                     (341,141 )           (96,802 )        (504,137 )        (113,263 )
Other interest income                 1,819               2,341             3,605             4,067
Interest expense                       (437 )                 -              (585 )               -
Impairment                                -                   -

- (307,318 )



Operating loss before
income taxes                       (339,759 )           (94,461 )        (501,117 )        (416,514 )
Income Taxes                              -                   -                 -                 -
Net income/loss
attributed to
non-controlling interest            206,644                   -           308,443                 -

Net loss and comprehensive loss $ (133,115 ) $ (94,461 ) $ (192,674 ) $ (416,514 )

Form 10-Q Sustainable Projects Group Inc. Page 4

In addition, management anticipates incurring the following expenses during the next 12 month period:

? Management anticipates spending approximately $7,500 in ongoing general and

administrative expenses per month for the next 12 months, for a total

anticipated expenditure of $90,000 over the next 12 months. The general and

administrative expenses for the year will consist primarily of professional

fees for the audit and legal work relating to SPGX's regulatory filings

throughout the year, as well as transfer agent fees, development costs and

general office expenses.

? Management anticipates spending approximately $16,000 in complying with SPGX's

obligations as a reporting company under the Securities Exchange Act of 1934.

These expenses will consist primarily of professional fees relating to the

preparation of SPGX's financial statements and completing and filing its

annual report, quarterly report, and current report filings with the SEC.






As at June 30, 2019, SPGX had cash of $142,758 and total liabilities of
$349,169. During the 12 month period following the date of this report,
management anticipates that SPGX will not generate enough revenue to continue
the development of current projects and projects in the pipeline. Accordingly,
SPGX will be required to obtain additional financing in order to continue its
plan of operations. Management believes that debt financing will not be an
alternative for funding SPGX's plan of operations as it does not have tangible
assets to secure any debt financing. Rather management anticipates that
additional funding will be in the form of equity financing from the sale of
SPGX's common stock. However, SPGX does not have any financing arranged and
cannot provide investors with any assurance that it will be able to raise
sufficient funding from the sale of its common stock to fund its plan of
operations. In the absence of such financing, SPGX will not be able to develop
its products and its business plan will fail. Even if SPGX is successful in
obtaining equity financing and developing its various business ventures,
additional development of its website and marketing program will be required. If
SPGX does not continue to obtain additional financing, it will be forced to
abandon its business and plan of operations.

Liquidity and Capital Resources

Six Month Period Ended June 30, 2019

At June 30, 2019, SPGX had a cash balance of $142,758 and a working capital of $391,581, compared to a cash balance of $249,675 and a working capital of $675,830 for the fiscal period ended December 31, 2018.


The notes to SPGX's financial statements as of June 30, 2019, disclose its
uncertain ability to continue as a going concern. SPGX has accumulated a deficit
of $2,301,045 since inception and has yet to achieve profitable operations and
further losses are anticipated in the development of its business. SPGX's
ability to continue as a going concern is in substantial doubt and is dependent
upon obtaining additional financing and/or achieving a sustainable profitable
level of operations. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.

Form 10-Q Sustainable Projects Group Inc. Page 5


SPGX has $142,758 cash on hand as at June 30, 2019. Cash used in operations was
$257,041 for the six month period ended June 30, 2019. SPGX will need to raise
additional cash in order to fund ongoing operations over the next 12 month
period. SPGX may seek additional equity as necessary and it expects to raise
funds through private or public equity investment in order to support existing
operations and expand the range of its business. There is no assurance that such
additional funds will be available for SPGX on acceptable terms, if at all.

Net Cash Flows Provided By (Used in) Operating Activities.


Net cash flows from operating activities during the six month period ended June
30, 2019 was net cash used in operations $257,041, which was primarily due to
the increase of our operating activities. We incurred an increase in receivables
of $175,575 from the sale of assets, increase in interest receivables of $3,594,
and decrease in prepaid expenses of $24,730, compared to a net cash used in
operations of $216,088 for the same time period for the prior fiscal period,
which was primarily due to non-cash items consisting of a loss on acquisition of
asset of $29,750, impairment of $276,318 on the mineral properties, impairment
of intangible asset of $31,000, changes in current assets and liabilities
consisting of an increase in prepaid expenses of $7,704, an increase in accounts
payable and accrued expenses of $11,713, and a decrease in deferred revenue

of
$5,000.

Net Cash Flows From Investing Activities.





SPGX's net cash flow used in investing activities during the six month period
ended June 30, 2019 was $1,869, which was primarily due to purchase of office
equipment, as compared to a net cash flow provided by investing activities of
$252,147 for the same time period for the prior fiscal period, which was
primarily due to payment from the sale of assets of $258,996, proceeds of $6,000
from the disposal of investments and acquisition of $12,849 for purchase of
office equipment, furniture and other assets.

Net Cash Flows From Financing Activities.


SPGX's net cash flow from financing activities during the six month period ended
June 30, 2019 was $151,993 which consisted of $50,000 from proceeds of notes
payable, $1,993 from issuance of common stock and $100,000 from contribution
from non-controlling interests as compared to $6,000 for the same time period
for the prior fiscal period.

Operations Results for the Three Month Period Ended June 30, 2019


Net Loss. During the three month period ended June 30, 2019, SPGX had a net loss
of $133,115, which include a net loss attributed to non-controlling interest of
$206,644. The loss consisted generally from consulting fees and other operating
expenses such as management fees, salaries and wages, and professional fees,
compared to the same time period for the prior fiscal period, when SPGX had a
net loss of $94,461, which was primarily due to professional fees, consulting
fees, administrative and other operating expenses. These costs during the three
month period ended June 30, 2019 was primarily attributable to our continued
growth of our operations.



Revenue. During the three month period ended June 30, 2019, SPGX had revenues of
$986 compared to $20,000 from the same period in the prior year. The decrease in
revenue was primarily due to the termination of our consulting agreement and our
shortage of staff.




Operating Expenses. SPGX's operating expenses during the three month period
ended June 30, 2019 were $342,127 as compared to the same time period for the
prior fiscal period of $116,802. The increased operating expenses were due to
the expansion of the Company's business and primarily attributing to consulting
fees, salaries and wages, travel costs and management fees.

Form 10-Q Sustainable Projects Group Inc. Page 6

Operations Results for the Six Month Period Ended June 30, 2019





Net Loss. During the six month period ended June 30, 2019, SPGX had a net loss
of $192,674, which include a net loss attributed to non-controlling interest of
$308,443, as compared to a net loss of $416,514 for the same period in the prior
year which was primarily due to an impairment of $307,318 on investments. The
loss was primarily attributable to our continued growth of our operations for
the current period.




Revenue. During the six month period ended June 30, 2019, SPGX had revenues of
$95,986 as compared to $35,000 for the same period in the prior year. The
increase in revenue was primarily due the new consulting agreement the Company
had, but was terminated during the period.



Operating Expenses. SPGX's operating expenses during the six month period ended
June 30, 2019 were $600,123 as compared to $148,263 for the same period in the
prior year. The increase in operating expenses were primarily attributable to
our continued growth of operations and the expansion of our business which
increased our general and administrative expenses, advertising and promotion
expenses, consulting fees, management fees, professional fees, salaries and
wages, travel costs and our rent.



Going Concern




SPGX has not attained profitable operations and is dependent upon obtaining
financing to pursue any extensive business activities. For these reasons the
financial statements have been prepared assuming SPGX will continue as a going
concern. SPGX has accumulated a deficit of $2,301,045 since inception and has
yet to achieve profitable operations and further losses are anticipated in the
development of its business. SPGX's ability to continue as a going concern is in
substantial doubt and is dependent upon obtaining additional financing and/or
achieving a sustainable profitable level of operations. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty. SPGX has $142,758 cash on hand as at June 30, 2019. Cash used in
operations was $257,041 for the six month period ended June 30, 2019. SPGX will
need to raise additional cash in order to fund ongoing operations over the next
12 month period. SPGX may seek additional equity as necessary and it expects to
raise funds through private or public equity investment in order to support
existing operations and expand the range of its business. There is no assurance
that such additional funds will be available for SPGX on acceptable terms,

if at
all.



Future Financings




Management anticipates raising financing through debt financing or the sale of
SPGX's common stock in order to continue to fund its business operations.
Issuances of additional common stock will result in dilution to SPGX's existing
stockholders. There is no assurance that SPGX will achieve any additional sales
of its common stock or arrange for debt or other financing to fund its planned
activities.



Inflation

Management does not believe that inflation will have a material impact on SPGX's future operations.

Off-balance Sheet Arrangements





SPGX has no significant off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on its financial condition,
changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources that is material to
stockholders.



Contingencies and Commitments




The Company entered into an agreement to sub-lease office space in Naples,
Florida effective September 1, 2018 to March 31, 2021. The monthly base rent for
the first year is $4,552.56 (annual $54,630.75); the monthly base rent for the
second year is $4,684.52 (annual $56,214.25); and the monthly base rent for the
third year is $4,816.48 (annual $57,797.75). See notes to the unaudited
financial statements.

Form 10-Q Sustainable Projects Group Inc. Page 7

Tabular Disclosure of Contractual Obligations

SPGX is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information required under this item.





Critical Accounting Policies



SPGX's financial statements and accompanying notes are prepared in accordance
with generally accepted accounting principles in the United States. Preparing
financial statements requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities, revenue, and expenses. These
estimates and assumptions are affected by management's application of accounting
policies. Management believes that understanding the basis and nature of the
estimates and assumptions involved with the following aspects of SPGX's
financial statements is critical to an understanding of SPGX's financial
statements.

Interim reporting and significant accounting policies


While the information presented is unaudited, it includes all adjustments, which
are, in the opinion of management, necessary to present fairly the financial
position, result of operation and cash flows for the interim periods presented
in accordance with accounting principles generally accepted in the United States
of America. All adjustments are of a normal recurring nature. It is suggested
that the condensed consolidated interim financial statements be read in
conjunction with SPGX's December 31, 2018 annual financial statements. Operating
results for the six month period ended June 30, 2019, are not necessarily
indicative of the results that can be expected for the period ended December 31,
2019.



Consolidation



The consolidated interim financial statements include the accounts of the
Company's joint ventures, Hero Wellness Systems Inc. (formerly Vitalizer
Americas Inc.) and Cormo USA Inc. The Company controls 55% of Hero Wellness
Systems Inc. and 35% of Cormo USA Inc. Pursuant to Accounting Standards
Codification Topic 810, both of these companies are considered variable interest
entities that requires the Company to consolidate. All intercompany balances and
transactions have been eliminated in the consolidation. The operating results of
the joint ventures have been included in the Company's consolidated interim
financial statements commencing September 01, 2018. The non-controlling interest
that were not attributable to the Company have been reported separately. (See
Note 13)



Segment Reporting




The Company reports segment information based on the "management" approach. The
management approach designates the internal reporting used by management for
making decisions and assessing performance of its corporation wide basis in
comparison to its various businesses. The Company has three reportable segments.
The business operating ventures consist of Hero Wellness Systems, Cormo USA and
Sustainable Projects Group. The segments are determined based on several factors
including the nature of products and services, nature of production processes
and delivery channels and consultancy services. The operating segment's
performance is evaluated based on its segment income. Segment income is defined
as the net sales less cost of sales, general and administrative expenses and
does not include amortization of any sorts, stock-based compensation or any
other charges (income), and interest. As at June 30, 2019, the Company only has
revenue to report for the consultancy work it performed. There were no revenues
from Hero Wellness Systems or Cormo USA.



Revenue Recognition



In May 2014, the FASB issued guidance on the recognition of Revenue from
Contracts with Customers. The core principle of the guidance is that a company
should recognize revenue to depict the transfer of promised goods or services to
customers in an amount that reflects the consideration which the company expects
to receive in exchange for those goods or services. To achieve this core
principle, the guidance provides a five-step analysis of transactions to
determine when and how revenue is recognized. The guidance addresses several
areas including transfer of control, contracts with multiple performance
obligations, and costs to obtain and fulfil contracts. The guidance also
requires additional disclosure about the nature, amount, timing, and uncertainty
of revenue and cash flows arising from customer contracts, including significant
judgments and changes in judgments and assets recognized from costs incurred to
obtain or fulfil a contract.

Form 10-Q Sustainable Projects Group Inc. Page 8






The Company adopted the ASC Topic 606, Revenue from Contracts with Customers
("ASC 606"), from June 01, 2018 using the modified retrospective method. The
adoption of Topic 606 did not have a material impact to the Company's financial
statements. The Company recognizes revenue when the Company transfers promised
services to the customer. The Company has one main revenue source which is
providing consulting services. Accordingly, the Company recognizes revenue from
consulting services when the Company's performance obligation is complete. Even
though the Company entered into contract with the customer, the contract could
be terminated at any time with two weeks' notice. The Company may receive
payments from customers in advance of the satisfaction of performance
obligations for services. These advance payments are recognized as deferred
revenue until the performance obligations are completed and then, recognized as
revenues. Revenue is from several customers and the Company has one contract
with one customer. Termination penalties are non-substantive and can be
performed by either party. For the six months ended June 30, 2019, all of the
revenues were from related parties.



Operating Leases



In February 2016, the FASB issued ASU 2016-02, Leases ("Topic 842"). The new
standard establishes a right-of-use model that requires a lessee to record a
right-of-use asset and a lease liability on the balance sheet for all leases
with terms longer than 12 months. For leases with an initial term of 12 months
or less, a lessee is permitted to make an accounting policy election by class of
underlying asset not to recognize lease assets and lease liabilities. If a
lessee makes this election, it should recognize lease expense for such leases
generally on a straight-line basis over the term of the lease. Leases will be
classified as either finance or operating, with classification affecting the
pattern of expense recognition. Similarly, lessors will be required to classify
leases as sales-type, finance or operating, with classification affecting the
pattern of income recognition. Classification for both lessees and lessors will
be based on an assessment of whether risks and rewards as well as substantive
control have been transferred through a lease contract. The new standard is
effective for fiscal years beginning after December 15, 2018, including interim
periods within those fiscal years, with early adoption permitted. The Company
adopted the new standard June 01, 2018. The Company will also elect to not
recognize lease assets and lease liabilities for leases with an initial term of
12 months or less.



Inventory



Inventories are stated at the lower of cost or net realizable value using the
first-in, first out (FIFO) cost method of accounting. Cost is determined using
the first in, first out (FIFO) cost method. Costs include the cost of purchase
and transportation costs that are directly incurred to bring the inventories to
their present location, and duty. Net realizable value is the estimated selling
price of the inventory in the ordinary course of business, less any estimated
selling costs.

Current Expected Credit Loss


In June 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit
Losses". The ASU sets forth a "current expected credit loss" (CECL) model which
requires the Company to measure all expected credit losses for financial
instruments held at the reporting date based on historical experience, current
conditions, and reasonable supportable forecasts. This replaces the existing
incurred loss model and is applicable to the measurement of credit losses on
financial assets measured at amortized cost and applies to some off-balance
sheet credit exposures. This ASU is effective for fiscal years beginning after
December 15, 2019, including interim periods within those fiscal years, with
early adoption permitted. Recently, the FASB issued the final ASU to delay
adoption for smaller reporting companies to calendar year 2023. The Company is
currently assessing the impact of the adoption of this ASU on its financial
statements.



SPGX adopts new pronouncements relating to generally accepted accounting
principles applicable to SPGX as they are issued, which may be in advance of
their effective date. Management does not believe that any pronouncements not
included above do not expect to have a material effect on the accompanying

financial statements.

Form 10-Q Sustainable Projects Group Inc. Page 9

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