What changed in this filing

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Item 1. Financial Statements

2022-05-16 compared with 2021-11-15 · 214 added, 413 removed, 404 unchanged (61% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS

September 30,

December 31, *

Current Assets

Cash and cash equivalents

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

Costs and estimated earnings in excess of billings on uncompleted contracts

Accounts receivable, net of allowance for doubtful accounts of $ 19,800 and $ 0 , respectively

Contract assets

Prepaid expenses and other current assets

7 unchanged sentences

Accrued liabilities

Billings in excess of costs and estimated earnings on uncompleted contracts

Deferred revenue

Payroll taxes payable

Customer deposits

Contract liabilities

Paycheck protection program liabilities

15 unchanged sentences

Common stock;

$ .001 par value;

70,000,000 shares authorized;

65,088,575 and 65,088,575

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

65,088,575 shares issued, issuable ** and outstanding March 31, 2022 and December 31, 2021

Common stock issuable

16 unchanged sentences

numbers were derived from the audited financial statements for the year ended December 31, 2021.

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.

2,785,000 shares issuable as of March 31, 2022, and December 31, 2021, per terms of note agreements.

ENVIRONMENTAL & ENERGY RESOURCES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three Months Ended

September 30,

For the Nine Months Ended

September 30,

For the Three Months Ended March 31,

Total revenue

5 unchanged sentences

Total operating expenses

Income (loss) from operations

Loss from operations

Other income (expense):

2 unchanged sentences

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 )

Total non-operating expense, net

Loss from continuing operations

Gain from discontinued operations, net of tax

Net income (loss) attributable to non-controlling interest

Net income (loss) attributable to SEER common stockholders

Net loss attributable to SEER common stockholders

$ ( 386,600 )

$ ( 317,600 )

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

Basic and diluted loss per share attributable to SEER common stockholders

Loss from continuing operations, per share

Income from discontinued operations, per share

Net loss per share, basic and diluted

Weighted average shares outstanding – basic and diluted

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

1 unchanged sentence

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT

Non-controller

Preferred Stock

Stockholders’

at December 31, 2020

$ ( 29,693,700 )

$ ( 2,061,400 )

$ ( 8,728,800 )

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

( 30,011,300 )

( 2,074,300 )

( 9,054,600 )

of common stock upon debt penalty

at June 30, 2021

Balances at December 31, 2021

$ ( 29,364,800 )

1 unchanged sentence

$ ( 8,196,500 )

of common stock upon debt penalty

value of common stock and warrants

related to debt

at September 30, 2021

Issuance of common stock upon debt penalty

Stock-based compensation

Allocated value of common stock and warrants related to debt

Balances at March 31, 2022

( 29,751,400 )

1 unchanged sentence

( 8,587,200 )

Non-controller

Preferred Stock

Stockholders’

at December 31, 2019

$ ( 26,964,300 )

$ ( 2,026,700 )

$ ( 6,277,300 )

of common stock upon debt penalty

value of common stock and warrants related to debt

at March 31, 2020

( 27,590,400 )

( 2,054,000 )

( 6,883,800 )

of common stock upon debt penalty

at June 30, 2020

Balances at December 31, 2020

$ ( 29,693,700 )

4 unchanged sentences

$ ( 8,728,800 )

of common stock upon debt penalty

value of common stock and warrants related to debt

income (loss)

at September 30, 2020

Issuance of common stock upon debt penalty

Stock-based compensation

Allocated value of common stock and warrants related to debt

Balances at March 31, 2021

( 30,011,300 )

7 unchanged sentences

CONSOLIDATED STATEMENT OF CASH FLOWS

For the nine months ended September 30,

For the years ended March 31,

Cash flows from operating activities:

Income (loss) from continuing operations

Loss from continuing operations

$ ( 390,700 )

Income (loss) from discontinued operations

Net income (loss)

$ ( 363,900 )

Income from discontinued operations

Adjustments to reconcile net loss to net cash provided by operating activities:

1 unchanged sentence

Stock-based compensation expense

Non-cash expense for interest, common stock issued for debt penalty

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 debt distinguishment

Gain on disposition of assets

1 unchanged sentence

Accounts receivable

Costs in excess of billings on uncompleted contracts

Contract assets

Prepaid expenses and other assets

Accounts payable, accrued liabilities, and customer deposits

Billings in excess of revenue on uncompleted contracts

Contract liabilities

Deferred revenue

Payroll taxes payable

Net cash used in operating activities

( 1,418,200 )

( 1,324,500 )

Cash flows from investing activities:

15 unchanged sentences

Financing of prepaid insurance premiums

Cash paid for income taxes

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 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).

(“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.

The two 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.

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 15).

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

PWS is currently owned 54 % by SEER and PelleChar is owned 51 % by SEER.

has and continues to develop specific opportunities to deploy and commercialize patented technologies for a non-thermal plasma-assisted

oxidation process that makes possible the clean and efficient destruction of solid hazardous chemical and biological waste ( i.e .,

regulated medical waste, chemicals, pharmaceuticals and refinery tank waste, etc .) without landfilling or traditional incineration

and without harmful emissions.

Additionally, PWS’ technology “cleans” and conditions emissions and gaseous waste streams

( i.e ., volatile organic compounds and other greenhouse gases) generated from diverse sources such as refineries, oil fields, and

has developed specific opportunities to deploy and commercialize patented technologies for a non-thermal plasma-assisted oxidation process

that makes possible the clean and efficient destruction of solid hazardous chemical and biological waste ( i.e ., regulated medical

waste, chemicals, pharmaceuticals and refinery tank waste, etc .) without landfilling or traditional incineration and without harmful

Additionally, PWS’ technology “cleans” and conditions emissions and gaseous waste streams ( i.e .,

volatile organic compounds and other greenhouse gases) generated from diverse sources such as refineries, oil fields, and many others.

was established in September 2018 and is owned 51 % by SEER.

5 unchanged sentences

using the patented pyrolytic process.

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

For the three months ended March 31, 2022, 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 nine months then ended.

for the three months then ended.

of Consolidation

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.

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

September 1, 2021, as discontinued operations), 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.

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 September 30, 2021, and $ 29.7

million as of December 31, 2020.

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.

of approximately $ 29.8 million as of March 31, 2022, and $ 29.4 million as of December 31, 2021.

For the three months ended March 31,

2022, the Company incurred a net loss of approximately $ 0.4 million and for the three months ended March 31, 2021, the Company incurred

a net loss of approximately $ 0.3 million.

The Company had a working capital deficit of approximately $ 7.6 million as of March 31, 2022,

and a working capital deficit of $ 7.5 million as of December 31, 2021.

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 March 31, 2022, 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 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.

For the three months

ended March 31, 2022, the Company raised approximately $ 0.3

million from the issuance of short-term and long-term

debt, offset by payments of principal on short term notes and capital leases of $ 23,400 ,

for a net cash provided by financing activities of approximately $ 0.3

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 REGS, a line of business with historically 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 limited common shares available for issue which may limit the ability to raise capital or

settle debt through issuance of shares.

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.

of Presentation Unaudited Interim Financial Information

46 unchanged sentences

and uncertainty of revenue and cash flows arising from contracts with customers.

December 31, 2021, the Company adopted a sequencing policy under ASC 815-40-35 whereby in the event that reclassification of contracts

from equity to assets or liabilities is necessary pursuant to ASC 815 due to the Company’s inability to demonstrate it has sufficient

authorized shares as a result of certain securities with a potentially indeterminable number of shares, shares will be allocated on the

basis of the earliest issuance date of potentially dilutive instruments, with the earliest grants receiving the first allocation of shares.

Pursuant to ASC 815, issuance of securities to the Company’s employees or directors are not subject to the sequencing policy.

and Development

3 unchanged sentences

R&D expenses were

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

$ 0 for both the three months ended March 31, 2022, and 2021.

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

1 unchanged sentence

Raw materials

Inventory, net

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

7 unchanged sentences

to be recognized.

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

During the three months ended March 31, 2022, and 2021 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 September 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 March 31, 2022, and 2021.

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.

33 unchanged sentences

SCHEDULE OF DISAGGREGATION OF REVENUE

Environmental Solutions

Three months ended September 30, 2021

Environmental Solutions

Sources of Revenue

Product sales

Licensing fees

Operating fees

Management fees

Total Revenue

Environmental Solutions

Three months ended September 30, 2020

Environmental Solutions

Sources of Revenue

Product sales (1)

Licensing fees

Operating fees

Management fees

Total Revenue

$ 142,300 of revenue included in discontinued operations.

Environmental Solutions

Nine months ended September 30, 2021

Environmental Solutions

Sources of Revenue

Product sales (2)

Licensing fees

Operating fees

Management fees

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.

Environmental

months ended March 31, 2022

Environmental

months ended March 31, 2021

Environmental

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

Contract Liabilities

Accounts Receivable, net

Revenue Contract Assets

Revenue Contract Liabilities

Deferred Revenue

(non-current)

Balance as of September 30, 2021

Contract Assets

Contract Liabilities

Balance as of March 31, 2022

Balance as of December 31, 2021

2 unchanged sentences

approximately 30-60 days.

Deferred revenue is recorded when cash payments are received or due in advance of the Company’s performance,

including amounts that are refundable.

Contract liabilities are recorded when cash payments are received or due in advance of the Company’s

performance, including amounts that are refundable.

Performance Obligations

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.

of March 31, 2022, the aggregate amount of the transaction price allocated to the remaining performance obligations was approximately

$ 1.6 million,

of which the Company expects to recognize approximately 85 %

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

or less and (ii) contracts for which the Company recognizes revenue at the amounts to which it has the right to invoice for services

4 – PREPAID EXPENSES AND OTHER CURRENT ASSETS

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

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 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

September 30,

Prepaid expenses

Total prepaid expenses and other current assets

4 – PROPERTY AND EQUIPMENT

and equipment was comprised of the following:

SCHEDULE OF PROPERTY PLANT AND EQUIPMENT

September 30, 2021

December 31, 2020

OF PROPERTY PLANT AND EQUIPMENT

Field and shop equipment

3 unchanged sentences

Building and improvements

Property and equipment, gross

and equipment, gross

accumulated depreciation and amortization

2 unchanged sentences

Property and equipment, net

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

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 nine months ended

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

expense for the three months ended March 31, 2022, and 2021 was $ 24,800

and $ 26,500 ,

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.

For the three months ended March 31,

2022, and 2021, depreciation expense included in cost of goods sold was $ 18,400

and $ 20,100 ,

respectively.

For the three months ended March 31,

2022, and 2021, depreciation expense included in selling, general and administrative expenses was $ 6,400

and $ 6,400 ,

respectively.

expense on leased CoronaLux™ units included in depreciation and amortization above is $0 as of March 31, 2022, and 2021, respectively.

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

SCHEDULE OF PROPERTY AND EQUIPMENT FOR LEASES CAPITALIZED

September 30, 2021

December 31, 2020

Vehicles, field and shop equipment

accumulated amortization

Property and equipment

for leases capitalized

and equipment for lease capitalized

5 – INTANGIBLE ASSETS

assets were comprised of the following:

SCHEDULE OF INTANGIBLE ASSETS

September 30, 2021 (Unaudited)

Gross carrying amount

1 unchanged sentence

Net carrying value

March 31, 2022

Gross carrying amount

Accumulated amortization

Net carrying value

Customer list

$ ( 983,300 )

Gross carrying amount

Accumulated amortization

Net carrying value

December 31, 2021

4 unchanged sentences

$ ( 977,800 )

estimated useful lives of the intangible assets range from seven to ten years.

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

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

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

estimated useful lives of the intangible assets range from seven

Amortization expense was $ 5,500

for the three months ended March 31, 2022,

and 2021, respectively.

Company has entered into operating leases primarily for real estate.

These leases have terms which range from 1

years, and often include one or more options

These renewal terms can extend the lease term from 1

year to month-to-month and are included in the

lease term when it is reasonably certain that the Company will exercise the option.

These leases have terms which range from 1 to 8 years, and often

include one or more options to renew.

These renewal terms can extend the lease term from 1 year to month-to-month and are included in

the lease term when it is reasonably certain that the Company will exercise the option.

These operating leases are included in “Right

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.

of use assets” on the Company’s March 31, 2022, 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 September 30, 2021, Consolidated

of lease liabilities” and “Lease liabilities net of current portion” on the Company’s March 31, 2022, 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, 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 nine months ended September

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

in operating lease costs for right-of-use assets.

the Company recognized right-of-use assets of approximately $ 225,300 and lease liabilities for operating leases of approximately $ 246,100

on 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 March 31, 2022,

total right-of-use assets and operating lease liabilities were approximately $ 289,600 and $ 322,200 , respectively.

All operating lease

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

In the three months ended March 31, 2022, the Company recognized

approximately $ 20,900 in operating lease costs for right-of-use assets.

the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present

4 unchanged sentences

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

Nine Months Ended September 30,

Ended March 31,

Cash paid for operating lease liabilities

2 unchanged sentences

Weighted-average discount rate

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

Maturities of lease liabilities as of March 31, 2022 were as follows:

SCHEDULE OF MATURITIES OF LEASE LIABILITIES

1 unchanged sentence

Total lease liabilities

Current operating lease liabilities

Non-current operating lease liabilities

Total lease liabilities

7 – ACCRUED LIABILITIES

1 unchanged sentence

SCHEDULE OF ACCRUED LIABILITIES

September 30,

Accrued compensation and related taxes

6 unchanged sentences

SCHEDULE OF UNCOMPLETED CONTRACTS

September 30,

Revenue recognized

billings to date

Costs and estimated earnings in excess of billings on uncompleted contracts

Contract assets

Billings to date

1 unchanged sentence

( 1,052,400 )

Revenue contract liabilities

Contract liabilities

9 – INVESTMENT IN PARAGON WASTE SOLUTIONS LLC

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.

its inception through March 31, 2022, 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

2 unchanged sentences

against future earnings distributions made by PWS.

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

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 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.

to release this lien if and when REGS pays the full amount due.

Two of the officers of REGS also have liability exposure for a portion

of the taxes if REGS does not pay the liability.

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:

as of March 31, 2022 (Unaudited), and December 31, 2021, was comprised of the following:

SCHEDULE OF DEBT

5 unchanged sentences

Balance December 31, 2021

Increase in borrowing

$ 1,619,600 (4)

Increase in borrowing

Principal reductions(1)

( 17,900 )(5)

Long term debt to current

Amortization of debt discount

Balance September 30, 2021

Balance March 31, 2022

$ 2,832,300 (3)

Protection Program (“PPP”) draw #2, received the first quarter of 2021.

note payable insurance premium financing, interest at approximately 5.1 % per annum, payable in 10 installments of $ 5,400 , maturing

on November 1, 2021 .

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

simple interest and matures on January

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

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

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 .

The Payroll Protection Program final note forgiveness was confirmed during the first quarter of 2022.

Secured note payable of $ 13,300 , secured by and proceeds used to buy a forklift, dated March 15, 2022, interest at an annual rate

of 6.5 % simple interest and matures on February 15, 2025 , with payments of approx $ 400 per month, in accordance with the note’s

For the three months ended March 31, 2022, the Company recorded interest expense of $ 100 .

Unpaid interest at March 31,

2022 was $ 0 .

$ 4,200 of this note is included in the current portion of long-term debt.

B) Note payable of $ 250,000 dated February

11, 2022, interest at an annual rate of 8 % simple interest and matures on February 10, 2027 .

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 three months ended March 31, 2022, the Company recorded interest expense of $ 2,700 .

Unpaid interest

at March 31, 2022 was approximately $ 2,700 .

balance consists of $ 2,410,200 of secured notes, and $ 422,100 unsecured notes payable.

3 unchanged sentences

SCHEDULE OF RELATED PARTIES, NOTES PAYABLE AND ACCRUED INTEREST

September 30,

Short term notes

1 unchanged sentence

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

12 – EQUITY TRANSACTIONS

Common Stock Transactions

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

the three months ended March 31, 2022, no new equity transactions have occurred.

Common Stock Transactions

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 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

period and recorded as interest expense.

the three months ended March 31, 2021, no new equity transactions have occurred.

Non-controlling

5 unchanged sentences

13 – CUSTOMER CONCENTRATIONS

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 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.

Company had sales from operations to three, for the three months ended March 31, 2022, and 2021 that surpassed the 10 % threshold of total

revenue, respectively.

In total, these customers represented approximately 68 % and 64 % 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.

14 – NET GAIN OR LOSS PER SHARE

6 unchanged sentences

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.

For three months ended March 31, 2022, 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.

1 unchanged sentence

SCHEDULE OF POTENTIALLY DILUTIVE SECURITIES

Nine Months Ended September 30,

Three Months Ended March 31,

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:

15 – ABANDONMENT OF SUBSIDIARY

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.

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

million for the year ended December 31, 2021.

For the three months ended March 31, 2021, all operations from REGS have been reported as discontinued operations.

classes of line items constituting pretax income on discontinued operations:

SCHEDULE OF DISPOSAL GROUPS, INCLUDING DISCONTINUED OPERATIONS

For the three months ended

For the nine months ended

September 30,

Services revenue

2 unchanged sentences

Salaries and related expenses

Other income (expense)

Gain on debt extinguishment

Total expenses

Operating income (loss)

Operating income

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

Total income from discontinued operations

16 – SEGMENT INFORMATION AND MAJOR CUSTOMERS

7 unchanged sentences

All intercompany transactions have been eliminated.

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

information for the three months ended March 31, 2022 (Unaudited), and 2021 is as follows:

SCHEDULE OF SEGMENT INFORMATION

Three Months ended September 30, 2021

Environmental

Depreciation and amortization (1)

Interest expense

Stock-based compensation

Net income (loss) (2)

Capital expenditures (cash and noncash)

Environmental

Depreciation and amortization (1)

Interest expense

Stock-based compensation

Net income (loss) (2)

Capital expenditures (cash and noncash)

Nine months ended September 30, 2021

Months ended March 31,

Environmental

1 unchanged sentence

Interest expense

Stock-based compensation

Net income (loss)

2 unchanged sentences

Depreciation and amortization (1)

Depreciation and amortization

Interest expense

1 unchanged sentence

Net income (loss)

( 1,481,500 )

( 1,910,300 )

Capital expenditures (cash and noncash)

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

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