What changed in this filing

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Item 1. Financial Statements

2021-11-15 compared with 2021-08-16 · 320 added, 219 removed, 497 unchanged (52% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS

June 30, 2021

December 31, 2020

September 30,

Current Assets

Cash and cash equivalents

Accounts receivable, net of allowance for doubtful accounts of $ 800 and $ 11,800 , respectively

Accounts receivable, net of allowance for doubtful accounts of $ 800 and $ 11,800 ,

Costs and estimated earnings in excess of billings on uncompleted contracts

4 unchanged sentences

Right of use assets

LIABILITIES AND STOCKHOLDER’S DEFICIT

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current Liabilities

22 unchanged sentences

Common stock;

70,000,000 shares

70,000,000 shares authorized;

65,088,575 and 65,088,575

shares issued, issuable ** and outstanding June 30, 2020, and December 31, 2020, respectively

shares issued, issuable ** and outstanding September 30, 2021 and December 31, 2020, respectively

Common stock issuable

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

* These numbers were

derived from the audited financial statements for the year ended December 31, 2020.

issuable as of June 30, 2021, and 3,185,000 shares issuable as of December 31, 2020,

per terms of note agreements.

numbers were derived from the audited financial statements for the year ended December 31, 2020.

2,985,000 shares issuable as of September 30, 2021, and 3,185,000 shares issuable as of December 31, 2020, per terms of note agreements.

ENVIRONMENTAL & ENERGY RESOURCES, INC.

1 unchanged sentence

For the Three Months Ended

For the Six Months Ended

September 30,

For the Nine Months Ended

September 30,

Total revenue

5 unchanged sentences

Total operating expenses

Loss from operations

( 1,051,200 )

Income (loss) from operations

Other income (expense):

Interest expense

Total non-operating expense, net

( 1,254,600 )

Net loss attributable to non-controlling interest

Net loss attributable to SEER common stockholders

Gain on abandonment

Gain on debt extinguishment

Total non-operating income (expense), net

Income (loss) from continuing operations

( 1,565,500 )

Income (loss) from discontinued operations, net of tax

Net income (loss)

( 1,910,300 )

Net income (loss) attributable to non-controlling interest

Net income (loss) attributable to SEER common stockholders

$ ( 625,000 )

$ ( 1,814,300 )

Net loss per share, basic and diluted

Weighted average shares outstanding – basic and diluted

Basic earnings per share

Income (loss) from continuing operations, per share

Income (loss) from discontinued operations, per share

Net income (loss) per share, basic

Fully diluted earnings per share

Income (loss) from continuing operations, per share

Income (loss) from discontinued operations, per share

Net income (loss) per share, diluted

Weighted average shares outstanding – basic

Weighted average shares outstanding – diluted

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

8 unchanged sentences

of common stock upon debt penalty

of common stock upon debt penalty , shares

value of common stock and warrants

related to debt

Allocated value of common stock and warrants related to debt, shares

at March 31, 2021

7 unchanged sentences

( 9,689,600 )

of common stock upon debt penalty

value of common stock and warrants

related to debt

at September 30, 2021

$ ( 28,908,600 )

$ ( 1,851,500 )

$ ( 7,721,200 )

Non-controller

5 unchanged sentences

of common stock upon debt penalty

value of common stock and warrants

related to debt

value of common stock and warrants related to debt

at March 31, 2020

2 unchanged sentences

( 6,883,800 )

of common stock upon debt penalty

at June 30, 2020

( 28,153,600 )

1 unchanged sentence

( 7,442,200 )

( 28,153,600 )

( 2,092,000 )

( 7,442,200 )

of common stock upon debt penalty

at June 30, 2020

value of common stock and warrants related to debt

income (loss)

at September 30, 2020

$ ( 28,778,600 )

7 unchanged sentences

CONSOLIDATED STATEMENT OF CASH FLOWS

For the six months ended June 30,

For the nine months ended September 30,

Cash flows from operating activities:

Net loss from continuing operations

Income (loss) from continuing operations

$ ( 1,565,500 )

Income (loss) from discontinued operations

Net income (loss)

( 1,910,300 )

4 unchanged sentences

Provision for doubtful accounts receivable

Gain on abandonment of subsidiary

( 1,458,000 )

Non-cash expense for interest, accretion of debt discount

Gain on debt distinguishment – PPP Loan

Gain on disposition of assets

8 unchanged sentences

Net cash used in operating activities

( 1,418,200 )

( 1,324,500 )

Cash flows from investing activities:

1 unchanged sentence

Proceeds from the sale of fixed assets

Net cash provided by (used) in investing activities

Net cash provided (used) by investing activities

Cash flows from financing activities:

12 unchanged sentences

Non-cash repayment of debt

Non-cash repayment of debt - PPP Loan

Non-cash repayment of debt – PPP Loan, discontinued

Non-cash payment of interest

3 unchanged sentences

Environmental & Energy Resources, Inc.

(“SEER,” or the “Company”), a Nevada corporation, is a provider of

next-generation clean-technologies, waste management innovations and related services.

SEER has three wholly owned operating subsidiaries

and three majority-owned subsidiaries;

all of which together provide technology solutions and services to companies primarily in the

oil and gas, refining, landfill, food, beverage & agriculture, and renewable fuel industries.

The three wholly owned subsidiaries

1) REGS, LLC (d/b/a Resource Environmental Group Services (“REGS”)) provided industrial and proprietary cleaning

services to refineries, oil fields and other private and governmental entities, which is included in discontinued operations for fiscal

After the industrial cleaning was discontinued as of 2019, REGS continued with its manufacturing and assembly operations

during 2020 and into 2021.

These operations consisted primarily of building kilns and related equipment.

The company expects to

wind down REGS for all purposes and cease all operations in September 2021;

2) MV, LLC (d/b/a MV Technologies) (“MV”),

designs and builds biogas conditioning solutions for the production of renewable natural gas, odor control systems and natural gas vapor

capture primarily for landfill operations, waste-water treatment facilities, oil and gas fields, refineries, municipalities and food,

beverage & agriculture operations throughout the U.S.;

3) Strategic Environmental Materials, LLC, (“SEM”), a materials

technology company focused on development of cost-effective chemical absorbents.

(“SEER,” or the “Company”), a Nevada corporation, is a provider

of next-generation clean-technologies, waste management innovations and related services.

SEER has two wholly owned operating

subsidiaries and three majority-owned subsidiaries;

all of which together provide technology solutions and services to companies

primarily in the oil and gas, refining, landfill, food, beverage & agriculture, and renewable fuel industries.

wholly owned subsidiaries include:

1) MV, LLC (d/b/a MV Technologies) (“MV”), designs and builds biogas conditioning

solutions for the production of renewable natural gas, odor control systems and natural gas vapor capture primarily for landfill

operations, waste-water treatment facilities, oil and gas fields, refineries, municipalities and food, beverage & agriculture

operations throughout the U.S.;

2) Strategic Environmental Materials, LLC, (“SEM”), a materials technology

company focused on development of cost-effective chemical absorbents.

The Company had a third wholly owned subsidiary, REGS, LLC

(d/b/a Resource Environmental Group Services (“REGS”)), which was discarded and abandoned September 1, 2021, and all

operations included in discontinued operations (See Note 17).

two majority-owned subsidiaries include 1) Paragon Waste Solutions, LLC (“PWS”), and 2) PelleChar, LLC (“PelleChar”).

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using the patented pyrolytic process.

For the six months ended June 30, 2021, PelleChar activity related to startup of operations that

were interrupted by the pandemic in 2020, and a commencement to market its product.

For the nine months ended September 30, 2021, PelleChar activity related to startup of operations

that were interrupted by the pandemic in 2020, and a commencement to market its product.

Revenue and expenses of PelleChar were not material

for the six months then ended.

for the nine months then ended.

of Consolidation

accompanying consolidated financial statements include the accounts of SEER, its wholly owned subsidiaries, REGS, MV and SEM and its

majority-owned subsidiaries PWS and PelleChar, since their respective acquisition or formation dates.

All material intercompany accounts,

transactions, and profits have been eliminated in consolidation.

The Company has non-controlling interest in joint ventures, which are

reported on the equity method.

accompanying consolidated financial statements include the accounts of SEER, its wholly owned subsidiaries, SEM, MV and REGS (no longer

operational), and its majority-owned subsidiaries PWS and PelleChar, since their respective acquisition or formation dates.

intercompany accounts, transactions, and profits have been eliminated in consolidation.

The Company has non-controlling interest in joint

ventures, which are reported on the equity method.

shown in the accompanying consolidated financial statements, the Company has experienced recurring losses, and has accumulated a deficit

of approximately $ 28.9

million as of June 30, 2021, and $ 29.7

million as of September 30, 2021, and $ 29.7

million as of December 31, 2020.

months ended June 30, 2021, and 2020, the Company incurred net losses from continuing operations of approximately $ 1.0

million and $ 1 .3

million, respectively.

The Company had a working

capital deficit of approximately $ 9.8

million as of June 30, 2021, consistent with a working capital

deficit of $ 9.8 million

as of December 31, 2020.

These factors raise substantial doubt about the ability of the Company to continue to operate as a going concern.

of a major portion of the Company’s assets as of June 30, 2021, is dependent upon continued operations.

months ended September 30, 2021, the Company incurred net income approximately $ 1.0

million and 2020, the Company incurred a

net loss of approximately $ 1.9

The Company had a working capital deficit

of approximately $ 7.3 million

as of September 30, 2021, and a working capital deficit of $ 9.8

million as of December 31, 2020.

These factors

raise substantial doubt about the ability of the Company to continue to operate as a going concern.

of a major portion of the Company’s assets as of September 30, 2021, is dependent upon continued operations.

The Company is dependent

on generating additional revenue or obtaining adequate capital to fund operating losses until it becomes profitable.

For the six months

ended June 30, 2021, the Company raised approximately $ 1.0

million from the Payroll Protection Program,

and the issuance of short-term and long-term debt, offset by payments of principal on short term notes and capital leases of $ 0.1

million, for a net cash provided by financing

activities of approximately $ 0.9

In addition, the Company has undertaken

a number of specific steps to continue to operate as a going concern.

The Company continues to focus on developing organic growth in

our operating companies and improving gross and net margins through increased attention to pricing, aggressive cost management and overhead

reductions, including discontinuing a line of business with insufficient margins.

Critical to achieving profitability will be the ability

to license and or sell, permit and operate though the Company’s joint ventures and licensees the CoronaLux™ waste destruction

The Company has increased business development efforts to address opportunities identified in expanding markets attributable to

increased interest in energy conservation and emission control regulations.

In addition, the Company is evaluating various forms of financing

which may be available to it.

There can be no assurance that the Company will secure additional financing for working capital, increase

revenues and achieve the desired result of net income and positive cash flow from operations in future years.

These financial statements

do not give any effect to any adjustments that would be necessary should the Company be unable to report on a going concern basis.

For the nine months

ended September 30, 2021, the Company raised approximately $ 1.5 million from the Payroll Protection Program, and the issuance of short-term

and long-term debt, offset by payments of principal on short term notes and capital leases of $ 0.2 million, for a net cash provided by

financing activities of approximately $ 1.3 million.

In addition, the Company has undertaken a number of specific steps to continue to

operate as a going concern.

The Company continues to focus on developing organic growth in our operating companies and improving gross

and net margins through increased attention to pricing, aggressive cost management and overhead reductions, including discontinuing a

line of business with insufficient margins.

Critical to achieving profitability will be the ability to license and or sell, permit and

operate though the Company’s joint ventures and licensees the CoronaLux™ waste destruction units.

The Company has increased

business development efforts to address opportunities identified in expanding markets attributable to increased interest in energy conservation

and emission control regulations.

In addition, the Company is evaluating various forms of financing which may be available to it.

can be no assurance that the Company will secure additional financing for working capital, increase revenues and achieve the desired

result of net income and positive cash flow from operations in future years.

These financial statements do not give any effect to any

adjustments that would be necessary should the Company be unable to report on a going concern basis.

of Presentation Unaudited Interim Financial Information

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R&D expenses were

$ 0 for both the six months ended June 30, 2021, and 2020.

$ 0 for both the nine months ended September 30, 2021, and 2020.

are stated at the lower of cost or net realizable value on a first in, first out basis and includes the following amounts:

SCHEDULE OF INVENTORY

September 30,

Finished goods

Work in process

Raw materials

Company accounts for income taxes pursuant to Accounting Standards Codification (“ASC”) 740, Income Taxes, which

7 unchanged sentences

to be recognized.

During the six months ended June 30, 2021, and 2020 the Company recognized no adjustments for uncertain tax positions.

During the nine months ended September 30, 2021, and 2020 the Company recognized no adjustments for uncertain tax positions.

Company recognizes interest and penalties related to uncertain tax positions in income tax expense.

No interest and penalties related

to uncertain tax positions were recognized as of June 30, 2021, and 2020.

The Company expects no material changes to unrecognized tax

positions within the next twelve months.

to uncertain tax positions were recognized as of September 30, 2021, and 2020.

The Company expects no material changes to unrecognized

tax positions within the next twelve months.

Company has filed federal and state tax returns through December 31, 2020.

The tax periods for the years ending December 31, 2017,

through 2019 are open to examination by federal and state authorities.

The tax periods for the years ending December 31, 2017, through

2020 are open to examination by federal and state authorities.

revenue generated from contracts with customers, for the manufacture of products for the removal and treatment of hazardous vapor and

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SCHEDULE OF DISAGGREGATION OF REVENUE

Three months ended June 30, 2021

Environmental Solutions

Three months ended September 30, 2021

Environmental Solutions

Sources of Revenue

4 unchanged sentences

Total Revenue

months ended June 30, 2020

Environmental

Six months ended June 30, 2021

Environmental Solutions

Three months ended September 30, 2020

Environmental Solutions

Sources of Revenue

4 unchanged sentences

Total Revenue

Six months ended June 30, 2020

$ 142,300 of revenue included in discontinued operations.

Environmental Solutions

Nine months ended September 30, 2021

Environmental Solutions

Sources of Revenue

4 unchanged sentences

Total Revenue

$ 177,200 of revenue included in discontinued operations.

Environmental Solutions

Nine months ended September 30, 2020

Environmental Solutions

Sources of Revenue

Product sales (3)

Licensing fees

Operating fees

Management fees

Total Revenue

$ 171,400 of revenue included in discontinued operations.

a performance obligation has been satisfied but not yet invoiced at the reporting date, a contract asset is recognized on the balance

3 unchanged sentences

SCHEDULE OF CONTRACT BALANCES

Receivable, net

Contract Assets

Contract Liabilities

Accounts Receivable, net

Revenue Contract Assets

Revenue Contract Liabilities

Deferred Revenue

1 unchanged sentence

(non-current)

Balance as of June 30, 2021

Balance as of September 30, 2021

Balance as of December 31, 2020

(Decrease) increase

Increase (Decrease)

majority of the Company’s revenue is generally invoiced on a weekly or monthly basis, and the payments are generally received within

3 unchanged sentences

Performance Obligations

of June 30, 2021, the aggregate amount of the transaction price allocated to the remaining performance obligations was approximately

$ 1.3 million, of which the Company expects to recognize approximately 75 % of this revenue over the next 12 months.

of September 30, 2021, the aggregate amount of the transaction price allocated to the remaining performance obligations was approximately

$ 1.0 million, of which the Company expects to recognize 100 % of this revenue over the next 12 months.

Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected term of one year

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expenses and other current assets are assets and payments previously made, that benefit future periods.

The balance as of June 30, 2021,

The balance as of September 30,

2021, includes Employee Retention Tax Credit (“ERTC”) program from the U.S Treasury, as part of the COVID-19 stimulus package.

The ERTC program refunds a portion of taxes paid for payroll.

We accrued the amounts that we qualify for, and this reduced our payroll

expenses during the quarter applied for and approved.

We accrued the amounts that we qualify for, and this reduced our salaries

and related expenses during the quarter applied for and approved.

Prepaid and other current assets comprised of the following:

SCHEDULE OF PREPAID AND OTHER CURRENT ASSETS

June 30, 2021

December 31, 2020

September 30,

Prepaid expenses

3 unchanged sentences

SCHEDULE OF PROPERTY PLANT AND EQUIPMENT

June 30, 2021

September 30, 2021

December 31, 2020

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Property and equipment, net

expense for the three months ended June 30, 2021, and 2020 was $ 26,600 and $ 37,900 , respectively.

For the three months ended June 30,

expense for the three months ended September 30, 2021, and 2020 was $ 26,800 and $ 33,700 , respectively.

For the three months ended September

30, 2021, and 2020, depreciation expense included in cost of goods sold was $ 20,400 and $ 26,500 , respectively.

For the three months ended

June 30, 2021, and 2020, depreciation expense included in selling, general and administrative expenses was $ 6,500 and $ 13,300 , respectively.

expense for the six months ended June 30, 2021, and 2020 was $ 53,200 and $ 73,900 , respectively.

For the six months ended June 30, 2021,

September 30, 2021, and 2020, depreciation expense included in selling, general and administrative expenses was $ 6,400 and $ 7,200 , respectively.

expense for the nine months ended September 30, 2021, and 2020 was $ 80,000 and $ 107,600 , respectively.

For the nine months ended September

30, 2021, and 2020, depreciation expense included in cost of goods sold was $ 60,700 and $ 72,200 , respectively.

For the six months ended June 30,

2021, and 2020, depreciation expense included in selling, general and administrative expenses was $ 12,900 and $ 28,200 , respectively.

expense on leased CoronaLux™ units included in depreciation and amortization above is $ 0 and $ 19,400 as of June 30, 2021, and 2020,

For the nine months ended

September 30, 2021, and 2020, depreciation expense included in selling, general and administrative expenses was $ 19,300 and $ 35,300 ,

respectively.

expense on leased CoronaLux™ units included in depreciation and amortization above is $ 0 and $ 29,200 as of September 30, 2021,

and 2020, respectively.

and equipment included the following amounts for leases that have been capitalized at:

SCHEDULE OF PROPERTY AND EQUIPMENT FOR LEASES CAPITALIZED

June 30, 2021

September 30, 2021

December 31, 2020

6 unchanged sentences

SCHEDULE OF INTANGIBLE ASSETS

June 30, 2021 (Unaudited)

September 30, 2021 (Unaudited)

Gross carrying amount

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Amortization expense was $ 6,400 and $ 8,000 for the three

months ended June 30, 2021, and 2020, respectively.

Amortization expense was $ 16,100 for both six months ended June 30, 2021, and 2020.

months ended September 30, 2021, and 2020, respectively.

Amortization expense was $ 22,400 and $ 24,100 for the nine months ended September

30, 2021, and 2020, respectively.

Company has entered into operating leases primarily for real estate.

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These operating leases are included in “Right

of use assets” on the Company’s June 30, 2021, Consolidated Balance Sheets and represent the Company’s right to use

the underlying asset for the lease term.

of use assets” on the Company’s September 30, 2021, Consolidated Balance Sheets and represent the Company’s right to

use the underlying asset for the lease term.

The Company’s obligation to make lease payments are included in “Current portion

of lease liabilities” and “Lease liabilities net of current portion” on the Company’s June 30, 2021, Condensed

Consolidated Balance Sheets.

Based on the present value of the lease payments for the remaining lease term of the Company’s existing

leases, the Company recognized right-of-use assets of approximately $ 226,600

of lease liabilities” and “Lease liabilities net of current portion” on the Company’s September 30, 2021, Consolidated

Balance Sheets.

Based on the present value of the lease payments for the remaining lease term of the Company’s existing leases,

the Company recognized right-of-use assets of approximately $ 226,600

and lease liabilities for operating leases of

approximately $ 246,100 on

January 1, 2019.

Operating lease right-of-use assets and liabilities commencing after January 1, 2019, are recognized at commencement

date based on the present value of lease payments over the lease term.

As of June 30, 2021, total right-of-use assets and operating lease

liabilities were approximately $ 326,600 and

January 1, 2019, when the new lease standard was effective.

Operating lease right-of-use assets and liabilities commencing after

January 1, 2019, are recognized at commencement date based on the present value of lease payments over the lease term.

As of September

30, 2021, total right-of-use assets and operating lease liabilities were approximately $ 425,000

and $ 457,400 ,

respectively.

All operating lease expense is recognized on a straight-line basis over the lease term.

In the six months ended June 30,

In the nine months ended September

30, 2021, the Company recognized approximately $ 93,700

6 unchanged sentences

SCHEDULE OF RIGHT-OF-USE ASSETS AND RELATED LEASE LIABILITIES

Six Months Ended June 30,

Nine Months Ended September 30,

Cash paid for operating lease liabilities

2 unchanged sentences

Weighted-average discount rate

Maturities of lease liabilities as of June 30, 2021 were as follows:

of lease liabilities as of September 30, 2021, were as follows:

SCHEDULE OF MATURITIES OF LEASE LIABILITIES

June 30, 2021

Lease liabilities

Less imputed interest

Total lease liabilities

Current operating lease liabilities

Non-current operating lease liabilities

Total lease liabilities

8 – ACCRUED LIABILITIES

1 unchanged sentence

SCHEDULE OF ACCRUED LIABILITIES

June 30, 2021

December 31, 2020

September 30,

Accrued compensation and related taxes

6 unchanged sentences

SCHEDULE OF UNCOMPLETED CONTRACTS

June 30, 2021

December 31, 2020

September 30,

Revenue recognized

4 unchanged sentences

( 1,392,900 )

Revenue contract liabilities

10 – INVESTMENT IN PARAGON WASTE SOLUTIONS LLC

its inception through June 30, 2021, the Company has provided approximately $ 6.9 million in funding to PWS for working capital and the

further development and construction of various prototypes and commercial waste destruction units.

its inception through September 30, 2021, the Company has provided approximately $ 6.4 million in funding to PWS for working capital and

the further development and construction of various prototypes and commercial waste destruction units.

No members of PWS have made capital

3 unchanged sentences

received for non-refundable licensing and placement fees have been recorded as deferred revenue in the accompanying consolidated balance

The balance as of June 30, 2021, and December 31, 2020, are $ 13,700 and $ 30,200 , respectively, and are being recognized as revenue

ratably over the term of the contract.

The balance as of September 30, 2021, and December 31, 2020, are $ 38,400 and $ 63,100 , respectively, and are being recognized

as revenue ratably over the term of the contract.

11 – PAYROLL TAXES PAYABLE

2009 and 2010, REGS, a subsidiary of the Company, became delinquent for unpaid federal employer and employee payroll taxes, accrued interest

and penalties were incurred related to these unpaid payroll taxes.

2009 and 2010, REGS, a former subsidiary of the Company, became delinquent for unpaid federal employer and employee payroll taxes,

accrued interest and penalties were incurred related to these unpaid payroll taxes.

2010 the IRS filed notices of federal tax liens against certain of REGS assets in order to secure certain tax obligations.

2 unchanged sentences

of the taxes if REGS does not pay the liability.

of June 30, 2021, and December 31, 2020, the outstanding balance due to the IRS by REGS was $ 1,074,000 , and $ 1,085,400 , respectively.

than this outstanding payroll tax matter, which is owed exclusively by REGS, arising in 2009 and 2010, all state and federal payroll

taxes have been paid by REGS in a timely manner.

as of June 30, 2021 (Unaudited), and December 31, 2020, was comprised of the following:

of September 30, 2021, as a result of the abandonment of REGS, there was no outstanding payroll liabilities

as of September 30, 2021.

The outstanding balance due to the IRS by REGS at December 31, 2020 was $ 1,085,400 ,

respectively.

than this prior outstanding payroll tax matter, which was owed exclusively by REGS, and arose in 2009 and 2010,

all state and federal payroll taxes have been paid by the Company in a timely manner.

as of September 30, 2021 (Unaudited), and December 31, 2020, was comprised of the following:

SCHEDULE OF DEBT

6 unchanged sentences

Increase in borrowing

1,335,000 (3)

Principal reductions

( 17,900 )(5)

Long term debt to current

Amortization of debt discount

Balance June 30, 2021

Balance September 30, 2021

$ 2,849,000 (4)

2 unchanged sentences

on November 1, 2021 .

Unsecured note payable dated January 19, 2021, interest at an annual rate of 8 %

Unsecured note payable of $ 150,000 dated January 19, 2021, interest at an annual rate of 8 %

simple interest and matures on January

included as part of a series of anticipated notes, all of which will be converted into common equity of Paragon Waste Services, LLC., in accordance with the note’s provisions.

For the six months ended June 30, 2021, the Company recorded

interest expense of $ 5,400 .

Unpaid interest at June 30, 2021 was approximately $ 5,400 .

Note payable dated February 2, 2021, interest at an annual rate of 8 %

This note is included as part of a series of anticipated notes, all of which will be converted into common equity

of Paragon Waste Services, LLC.

(Note 1), in accordance with the note’s provisions.

For the nine months ended September 30,

2021, the Company recorded interest expense of $ 8,400 .

Unpaid interest at September 30, 2021 was approximately $ 8,400 .

B) Note payable of $ 500,000 dated February 2, 2021, interest at an annual rate of 8 %

simple interest and matures on January

included as part of a series of anticipated notes, all of which will be converted into common equity of Paragon Waste Services, LLC., in accordance with the note’s provisions.

For the six months ended June 30, 2021, the Company recorded

interest expense of $ 16,200 .

Unpaid interest at June 30, 2021 was approximately $ 16,200 .

Note payable dated May 25, 2021, interest at an annual rate of 8 %

This note is included as part of a series of anticipated notes, all of which will be converted into common equity

of Paragon Waste Services, LLC.

(Note 1), in accordance with the note’s provisions.

For the nine months ended September 30,

2021, the Company recorded interest expense of $ 26,300 .

Unpaid interest at September 30, 2021 was approximately $ 26,300 .

C) Note payable of $ 185,000 dated May 25, 2021, interest at an annual rate of 8 %

simple interest and matures on January

included as part of a series of anticipated notes, all of which will be converted into common equity of Paragon Waste Services, LLC., in accordance with the note’s provisions.

For the six months ended June 30, 2021, the Company recorded

interest expense of $ 2,200 .

Unpaid interest at June 30, 2021 was approximately $ 2,200 .

This note is included as part of a series of anticipated notes, all of which will be converted into common equity

of Paragon Waste Services, LLC.

(Note 1), in accordance with the note’s provisions.

For the Nine months ended September 30,

2021, the Company recorded interest expense of $ 5,200 .

Unpaid interest at September 30, 2021 was approximately $ 5,200 .

D) Note payable of $ 500,000 dated August 6, 2021, interest at an annual rate of 8 %

simple interest and matures on August

This note is included as part of a series of anticipated notes, all of which will be converted into common equity of

Paragon Waste Services, LLC.

(Note 1), in accordance with the note’s provisions.

For the Nine months ended September 30, 2021,

the Company recorded interest expense of $ 5,800 .

Unpaid interest at September 30, 2021 was approximately $ 5,800 .

balance consists of $ 2,410,200 of secured notes, and $ 438,800 unsecured notes payable.

3 unchanged sentences

SCHEDULE OF RELATED PARTIES, NOTES PAYABLE AND ACCRUED INTEREST

June 30, 2021

December 31, 2020

September 30,

Short term notes

Accrued interest

Total short-term notes and accrued

interest - Related parties

January 6, 2021, the Company signed a $ 10,000

short-term note payable to the CEO.

accrued interest at 8 %

interest per annum, with a $ 250

minimum interest to be paid.

interest due was paid back within the first quarter, and $ 250

was recorded as interest expense.

Total short-term notes and accrued interest - Related parties

January 6, 2021, the Company signed a $ 10,000 short-term note payable to the CEO.

The note accrued interest at 8 % interest per annum,

with a $ 250 minimum interest to be paid.

The loan and interest due was paid back within the first quarter, and $ 250 was recorded as interest

14 – EQUITY TRANSACTIONS

Common Stock Transactions

the six months ended June 30, 2021, no new equity transactions have occurred.

the nine months ended September 30, 2021, no new equity transactions have occurred.

Common Stock Transactions

the six months ended June 30, 2020, the Company recorded 742,500 shares of $ .001 par value common stock as issued and issuable to short-term

note holders as required under their respective short-term notes valued at approximately $ 74,700 (See Note 12).

the six months ended June 30, 2020, the Company issued options to purchase 60,000 shares of $ 0.001 par value common stock to a short-term

note holder of the Company, at $ 0.10 per share.

The options were in connection with a new short-term note, and therefore recorded as

debt discount.

The Company valued the options using the Black-Sholes model, using a volatility of 134 %, a risk-free rate of 0.29 %, and

an expected term, using the simplified method, of 3 .0 years.

the nine months ended September 30, 2020, the Company issued 1,132,500 shares of $ .001 par value common stock to short-term note holders

as required under their respective short-term notes valued at approximately $ 125,400 .

the nine months ended September 30, 2020, the Company issued 575,000 shares of $ .001 par value common stock to short-term note holders

as required under origination agreements for the respective short-term notes, valued at approximately $ 60,500 in aggregate, and this

debt discount is amortized over the life of the agreements as interest expense.

the nine months ended September 30, 2020, the Company issued 200,000 shares of $ .001 par value common stock to short-term note holders

as required under an extension agreement for the respective short-term note, valued at approximately $ 20,000 .

the nine months ended September 30, 2020, the Company issued options to purchase 60,000 shares of $ 0.001 par value common stock to a

short-term note holder of the Company, at $ 0.10 per share.

The options were in connection with a new short-term note, and therefore recorded

as debt discount.

The Company valued the options using the Black-Sholes model, using a volatility of 134 %, a risk-free rate of 0.29 %,

and an expected term, using the simplified method, of 3.0 years.

The fair value at grant date of $ 3,500 will be amortized over the vesting

period and recorded as interest expense.

the six months ended June 30, 2020, the Company issued options to purchase 30,000 shares of $ 0.001 par value common stock to a short-term

note holder of the Company, at $0.10 per share.

The options were in connection with a new short-term note, and therefore recorded as

debt discount.

The Company valued the options using the Black-Sholes model, using a volatility of 134 %, a risk-free rate of 0.30 %, and

an expected term, using the simplified method, of 3 .0 years.

the nine months ended September 30, 2020, the Company issued options to purchase 30,000 shares of $ 0.001 par value common stock to a

short-term note holder of the Company, at $ 0.10 per share.

The options were in connection with a new short-term note, and therefore recorded

as debt discount.

The Company valued the options using the Black-Sholes model, using a volatility of 134 %, a risk-free rate of 0.30 %,

and an expected term, using the simplified method, of 3.0 years.

The fair value at grant date of $ 2,000 will be amortized over the vesting

7 unchanged sentences

15 – CUSTOMER CONCENTRATIONS

Company had sales from operations to five and one customers, for the six months ended June 30, 2021, and 2020 that surpassed the 10 %

Company had sales from operations to two and one customers, for the nine months ended September 30, 2021, and 2020 that surpassed

threshold of total revenue, respectively.

In total, these customers represented approximately 76 % and 14 % of our total sales, respectively.

The concentration of the Company’s business with a relatively small number of customers may expose us to a material adverse effect

if one or more of these large customers were to experience financial difficulty or were to cease being customers for non-financial related

16 – NET LOSS PER SHARE

net loss per share is computed by dividing net loss attributable to common shareholders by the weighted average number of common shares

Diluted net loss per share is computed by dividing net loss attributable to common shareholders by the weighted average

number of common shares outstanding plus the number of common shares that would be issued assuming exercise or conversion of all potentially

dilutive common shares.

Potentially dilutive securities are excluded from the calculation when their effect would be anti-dilutive.

all periods presented in the condensed consolidated financial statements, all potentially dilutive securities have been excluded from

the diluted share calculations as they were anti-dilutive as a result of the net losses incurred for the respective years.

basic shares equal diluted shares for all years presented.

In total, these customers represented approximately 32 %

of our total sales, respectively.

The concentration of the Company’s business with a relatively small number of customers may expose

us to a material adverse effect if one or more of these large customers were to experience financial difficulty or were to cease being

customers for non-financial related issues.

16 – NET GAIN OR LOSS PER SHARE

net gain or loss per share is computed by dividing net gain or loss attributable to common shareholders by the weighted average number

of common shares outstanding.

Diluted net gain or loss per share is computed by dividing net loss attributable to common shareholders

by the weighted average number of common shares outstanding plus the number of common shares that would be issued assuming exercise or

conversion of all potentially dilutive common shares.

Potentially dilutive securities are excluded from the calculation when their effect

would be anti-dilutive.

For three and nine months ended September 30, 2021, 90,000

potentially dilutive securities as they were in the money.

For three and nine months ended September 30, 2020, all potentially dilutive

securities have been excluded from the diluted share calculations because they were anti-dilutive as a result of the net losses incurred

for the respective period, or were dilutive, but the exercise prices were above the stock price for the entire period, deeming them not

to be converted, or exercised during the period.

Accordingly, basic shares equal diluted shares for all periods presented.

dilutive securities were comprised of the following (unaudited):

SCHEDULE OF POTENTIALLY DILUTIVE SECURITIES

Six Months Ended June 30,

Nine Months Ended September 30,

Convertible notes payable, including accrued interest

Potentially dilutive

NOTE 17 – ABANDONMENT OF SUBSIDIARY

On September 1, 2021, the Company’s

board of directors, by unanimous consent, adopted a resolution to abandon the Company’s wholly owned subsidiary, REGS, LLC.

abandonment resulted in a gain to the Company of approximately $ 1.5

million for both the three-month period and the nine-month period ended September 30, 2021.

For the three and nine months

ended September 30, 2021 and 2020, all operations from REGS have been reported as discontinued operations.

Major classes of line items constituting pretax

income (loss) on discontinued operations:

SCHEDULE OF DISPOSAL GROUPS, INCLUDING DISCONTINUED OPERATIONS

For the three months ended

For the nine months ended

September 30,

Services revenue

Services costs

General and administrative expenses

Salaries and related expenses

Other income (expense)

Gain on debt extinguishment

Total expenses

Operating income (loss)

Income tax benefit

Total income (loss) from discontinued operations

$ ( 136,600 )

$ ( 344,800 )

The net assets and liabilities disposed

of, resulting in the gain on the abandonment, are summarized in the following table:

Three and Nine

September 30, 2021

Liabilities - Other, net including intercompany assets

IRS payroll tax liability

Gain on abandonment

18 – SEGMENT INFORMATION AND MAJOR CUSTOMERS

Company currently has identified two segments as follows:

SEM, PelleChar, REGS

SEM, PelleChar

Environmental

4 unchanged sentences

All intercompany transactions have been eliminated.

information for the three and six months ended June 30, 2021 (Unaudited), and 2020 is as follows:

information for the three and nine months ended September 30, 2021 (Unaudited), and 2020 is as follows:

SCHEDULE OF SEGMENT INFORMATION

Three Months Ended June 30,

Three Months ended September 30, 2021

Environmental

10 unchanged sentences

Capital expenditures (cash and noncash)

Six Months Ended June 30,

Nine months ended September 30, 2021

Environmental

6 unchanged sentences

Depreciation and amortization (1)

Depreciation and amortization

Interest expense

2 unchanged sentences

( 1,481,500 )

( 1,910,300 )

Capital expenditures (cash and noncash)

depreciation of property, equipment and leasehold improvement and amortization of intangibles

NOTE 18 – SUBSEQUENT EVENTS

In July 2021, the Company received approval for the forgiveness of

the full amount of one loan under the Payroll Protection Program in the amount of approximately $ 87,000 .

environmental solutions segment contains the total net income (loss) from discontinued operations

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements