Strategic Environmental & Energy Resources, Inc. 10-K

ITEM 9A. CONTROLS AND PROCEDURES We carried out an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and Principal Accounting Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”)) as of the end of the period covered by this report. Based upon that evaluation, the Chief Executive Officer and the Principal Accounting Officer concluded that our disclosure controls and procedures were not effective as of December 31, 2022. Management’s Annual Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements. Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2022. In making this assessment, management used the criteria set forth in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 28 Based on its assessment of internal control over financial reporting, management has concluded that, as of December 31, 2022, our internal control over financial reporting were not effective, and material weaknesses over financial reporting were identified. Material weakness means a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the registrant’s annual or interim financial statements will not be prevented or detected on a timely basis. The material weaknesses identified were: ● due to ongoing financial constraints, we have not been devoting adequate resources to our accounting and reporting functions in order to properly record, file and review our financial transactions on a regular basis in order to ensure accuracy;and ● we do not have a properly documented internal control system in accordance with the requirements of COSO or some similarly appropriate internal control methodology or formal documentation of our systems of internal control. We are currently working to remediate the material weaknesses. We cannot be sure when we will successfully remediate the material weaknesses or whether compensating controls will be effective in preventing or detecting material errors. The remediation may require substantial time and resources to successfully implement. We may be unable to remediate these weaknesses until we have received additional funding that may be necessary to hire additional personnel. Until we have sufficient internal finance and accounting staff, we plan to work closely with external financial advisors to document the existing financial processes, risk assessment, and internal controls systematically. These material weaknesses could cause creditors, customers, investors, regulators, strategic alliances and others to lose confidence in the effectiveness of our internal controls and the accuracy of our financial statements and other information, all of which could have a material adverse impact on our business, results of operations and financial condition. This Annual Report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this Annual Report. Changes In Internal Control Over Financial Reporting There were no significant changes in our internal control over financial reporting during the year ended December 31, 2022, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. ITEM 9B. OTHER INFORMATION None 29 PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS The following table sets forth certain information regarding our executive officers and directors as of April 13, 2023. Name Age Position J. John Combs III 64 President, Chief Executive Officer, Director, Chairman of the Board, Secretary Christopher H. Dieterich 75 Director Scott Yezner 56 Director Ian Smith 44 Interim Chief Financial Officer Joseph John Combs III, Esq., President, Chief Executive Officer, Chairman of the Board, and Secretary. Mr. Combs, a SEER Founder, is currently CEO. He also serves as General Counsel. Before joining the Company, he owned and operated the law firm of Combs & Associates from 1989 to 2003. Prior to that he was an associate in the law firm of Berman & Blanchard in Los Angeles from 1987 to 1989, and an associate in the law firm of Parker, Milliken, Clark, O’hara & Samuelian, in Los Angeles from 1983 to 1987. His experience in private practice has included corporate maintenance, international finance, and business litigation. Over the last 30 years he has served as an officer and director of various sized corporations, both public and private, and was a Director and Officer of Armada Water Assets, Inc until his resignation in September 2014. For the past five years Mr. Combs has not served as a director of a public company, other than SEER. He received his B.A. from the University of Colorado, with honors, and a J uris Doctorate from Duke University School of Law in 1983. Mr. Combs was chosen as a Director because of his leadership experience, public company experience, experience serving on the boards of directors and committees of both public and private entities and other experience as a practicing attorney. Christopher H. Dieterich, Director, has served on the board since January 2008 . Mr. Dieterich is the founder and managing partner of Dieterich & Associates, a litigation and commercial law firm based in Los Angeles, California, providing legal services to entrepreneurial and emerging technology companies during the past 34 years. His firm specializes in venture capital and private equity financings, as well as in SEC compliance issues for public companies. He obtained his undergraduate engineering degree from Virginia Tech, graduate engineering degree from UC Berkeley (1970) and graduated from the joint Law and Economics program at UCLA in 1979, after serving six years in the US Air Force as a flight instructor in advanced jets. He has been a Director of the Company since 2008 and was Secretary from 2008 until November 2013. Mr. Dieterich was chosen as a Director because of his experience in a broad range of businesses as well experience serving on the boards of directors and committees of private entities. Christopher Scott Yenzer, Director , has served on the board since January 2019. Mr. Yenzer has served as corporate development officer of Blackeagle Energy Services from May 2018 until May 2019, is a 30-year engineering industry veteran with demonstrated strengths in the area of global relationships and operations growth plans. Mr. Yenzer’s extensive engineering and management background includes domestic and global, commercial oil and gas transaction management for some of the world’s largest engineering firms. He provides the SEER management team with a complementary perspective that is grounded in practical, hands-on experience in growing diverse businesses in both up and down cycles. Prior to his current role, Mr. Yenzer was COO and co-owner of Caribou Energy Corporation, which was sold in 2017. Prior to Caribou Energy, Mr. Yenzer served as vice president of Jacobs/CH2M, responsible for developing Enterprise Account Management on the executive committee for all business groups: Oil & Gas and Chemicals, Environmental & Nuclear, Water, and Infrastructure and Power. Mr. Yenzer built the successful Oil & Gas and Chemicals Global Strategic Account Team which included BP, ExxonMobil, Shell, Conoco, Hess TransCanada and Noble and led development of uniform account plans and growth strategies. During his tenure with Jacobs, Mr. Yenzer has held various positions from Project Engineer to Program Manager to VP of Business Development and his CV hosts a list of impressive ‘wins’ resulting from his ability to grow relationships and revenues across all markets, while increasing value to clients. 30 Ian Smith, Interim Chief Financial Officer. Mr. Smith joined the Company in October 2022 as a consultant in the role of Interim Chief Financial Officer. Mr. Smith has extensive experience with positions in accounting, finance, Securities and Exchange Commission (SEC) financial reporting, Sarbanes Oxley (SOX) compliance, and strategic planning. Mr. Smith also began his career at Ernst and Young, LLLP. Mr. Smith received an Masters in Business Administration and a B.B.A degree in Accounting from the Sam Houston State University. Director Independence The board of directors has determined that Christopher Dieterich is considered an “independent director.” Under the National Association of Securities Dealers Automated Quotations (“NASDAQ”) definition, an “independent director” means a person other than an officer or employee of the Company or its subsidiaries or any other individuals having a relationship that, in the opinion of the Company’s board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of the director. The board of directors’ discretion in determining director independence is not completely unfettered. Further, under the NASDAQ definition, an independent director is a person who (1) is not currently (or whose immediate family members are not currently), and has not been over the past three years (or whose immediate family members have not been over the past three years), employed by the company; (2) has not (or whose immediate family members have not) been paid more than $120,000 during the current or past three fiscal years; (3) has not (or whose immediately family has not) been a partner in or controlling shareholder or executive officer of an organization which the company made, or from which the company received, payments in excess of the greater of $200,000 or 5% of that organizations consolidated gross revenues, in any of the most recent three fiscal years; (4) has not (or whose immediate family members have not), over the past three years been employed as an executive officer of a company in which an executive officer of the company has served on that company’s compensation committee; or (5) is not currently (or whose immediate family members are not currently), and has not been over the past three years (or whose immediate family members have not been over the past three years) a partner of the company’s outside auditor. Board Meetings and committees; annual meeting attendance There is no Nominating Committee for directors, which the Company considers reasonable, as there is no direct compensation to directors who are not also officers, and there is no liability insurance available for errors and omissions, should they occur. Therefore, the Company has found it extremely difficult to attract independent directors. There were no changes to the procedures by which security holders may recommend nominees to the Company’s board of directors. Audit Committee and Audit Committee Financial Expert We do not have a standing audit committee, an audit committee financial expert, or any committee or person performing a similar function. The entire board of directors acts as the audit committee. We currently have limited working capital and a history of losses. Our board of directors does not believe that it would be in our best interests at this time to identify and retain independent directors to sit on an audit committee or a director that qualifies as an audit committee financial expert under SEC regulations. Compensation Committee As of this filing there was no compensation committee. The entire board of directors acts as the compensation committee. Delinquent Section 16(a) Reports Scott Yenzer, a director, is delinquent in filing a Form 3, and a Form 4 at the time of this filing. 31 Code of Ethics Our board of directors has adopted a Code of Ethics and Business Conduct for Officers, Directors and Employees, which includes our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions. A current copy of the code is posted on our website, www.seer-corp.com. ITEM 11. EXECUTIVE COMPENSATION SUMMARY COMPENSATION TABLE The following table sets forth a summary of the compensation for each of our named executive officers for the financial years ended December 31, 2022, and 2021. Fiscal Year Salary ($) Bonus ($) Stock Awards ($) Warrants or Option Awards Non-Equity Incentive Plan Compensation ($) Nonqualified Deferred Compensation Earnings ($) All Other Compensation ($) Total ($) Officers J. John Combs III 2022 166,600 - - - - - - 166,600 Chief Execurive Officer, President and Secretary 2021 166,600 - - - - - - 166,600 Tom Jones 2022 160,000 - - - - - - 160,000 VP Business Development, MV Technologies 2021 156,000 - - - - - - 156,000 Employment Agreements There are no employment agreements or contracts with any named executive officers. Director Compensation For the fiscal year ended December 31, 2022, no compensation was paid to directors other than those listed in the Summary Compensation Table above. We may implement director compensation arrangements or programs in the future. 32 Outstanding Equity Awards at Fiscal Year-End 2021 Number of Securities Underlying Unexercised Options (#) Exercisable Number of Securities Underlying Unexercised Options (#) Unexercisable Option Exercise Price ($) Option Expiration Date Directors Christopher H. Dieterich - - - Director Scott Yezner 1,000,000 (1) - 0.70 09/01/2026 Director (1) In September 2019, Mr. Yezner was granted options to purchase 1,000,000 shares of common stock at $0.70. The options vest quarterly over 2 years, becoming fully vested on September 1, 2021. Each tranche of vested options begins to expire 5 years after they vest, therefore these options expire quarterly, as they vested, between September 1, 2024 through September 1, 2026. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth as of April 13, 2023, certain information regarding beneficial ownership of our common stock by: ● Each person known to us to beneficially own 5% or more of our common stock; ● Each executive officer who in this report are collectively referred to as the “Named Executive Officers;” ● Each of our directors; and ● All of our executive officers (as that term is defined under the rules and regulations of the SEC) and directors as a group. We have determined beneficial ownership in accordance with Rule 13d-3 under the Exchange Act. Beneficial ownership generally means having sole or shared voting or investment power with respect to securities. Unless otherwise indicated in the footnotes to the table, each shareholder named in the table has sole voting and investment power with respect to the shares of common stock set forth opposite the shareholder’s name. As of March 30, 2022, 65,088,575 shares of our Common Stock were issued and outstanding. 33 Name and address of beneficial owners Number of shares beneficially owned (1) Percentage of class Joseph John Combs, III 3,606,315 (2) 5.5 % CEO, President, Secretary 370 Interlocken Blvd., Ste 680 Broomfield, CO 80021 Christopher H. Dieterich - * Director 370 Interlocken Blvd., Ste 680 Broomfield, CO 80021 Scott Yezner 1,000,000 (3) 1.5 % Director 370 Interlocken Blvd., Ste 680 Broomfield, CO 80021 Fortunato Villamagna - * President - PWS 370 Interlocken Blvd., Ste 680 Broomfield, CO 80021 Clark Knopik - * Interim Chief Financial Officer 370 Interlocken Blvd., Ste 680 Broomfield, CO 80021 LPD Investments, Ltd. 6,290,832 (4) 9.7 % 25025 145 North, Ste 410 The Woodlands, TX 77380 Clyde Berg 6,010,000 (5) 9.2 % 10050 Brandley Drive Cupertino, CA 95014 Tracy Miller 3,925,316 6.0 % 1814 Larchmont Ct Lafayette, CO 80026 Carl Berg 3,500,000 (6) 5.4 % 10050 Brandley Drive Cupertino, CA 95014 All Officers and Directors as a Group (4 persons) 4,606,315 7.0 % * Represents less than 1% (1) “Beneficial ownership” is defined in the regulations promulgated by the U.S. Securities and Exchange Commission as having or sharing, directly or indirectly (1) voting power, which includes the power to vote or to direct the voting, or (2) investment power, which includes the power to dispose or to direct the disposition, of shares of the common stock of an issuer. The definition of beneficial ownership includes shares underlying options or warrants to purchase common stock, or other securities convertible into common stock, that currently are exercisable or convertible or that will become exercisable or convertible within 60 days. Unless otherwise indicated, the beneficial owner has sole voting and investment power. (2) Consists of 3,606,315 shares owned by Mr. Combs. (3) Consists of options to purchase 1,000,000 shares of common stock, which were excersiable as of the date of this report, and shares becoming vested within 60 days of this report. (4) Consists of 5,140,832 shares according to Form 13G filed on August 29, 2014, 200,000 shares of common stock issued in August 2017 related to penalty on payment of short-term debt, 250,000 shares of common stock issued in March 2018 related to a private offering, and 700,000 shares which were issued to LPD during fiscal year 2019 related to penalty on late payment of short-term note. (5) Consists of 3,800,000 shares owned by Mr. Clyde Berg, and 2,210,000 shares which are issuable as of December 31, 2021, related to penalty on late payment of short-term notes, issued in fiscal year 2019. (6) Consists of 400,000 shares owned by Mr. Carl Berg and 2,400,000 shares owned by Carl and Mary Ann Berg CRT for which Mr. Berg has beneficial ownership, 125,000 shares issuable related to a short-term note issued July 8, 2020, and 575,000 shares which are issuable as of December 31, 2021, related to long term debt issued in July 2018. 34 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE. CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS Notes payable, related parties Notes payable, related parties and accrued interest due to certain related parties as of December 31, 2021, and 2020 are as follows: December 31, December 31, 2022 2021 Secured short term note payable dated August 21, 2019 with principal and interest due 60 days from issuance. The note requires a one-time fee in the amount of $4,150 to compensate for the first two weeks of the term and each week thereafter (weeks 3-8) a fee of $415 shall be due and owing accruing on the first day of the week, after which the fee is $600 per week, which is recorded as interest expense. The note is from a family member of the CEO, and thus classified as a related party note. For the year ended December 31, 2021, the Company recorded interest expense of $28,800. Unpaid interest as of December 31, 2021 is approximately $55,200. 125,000 125,000 Total short-term notes - related party $ 125,000 $ 125,000 December 31, December 31, 2022 2021 Accrued Interest $ 59,000 $ 55,800 $ 59,000 $ 55,800 35 Review, Approval or Ratification of Transactions with Related Persons The Company does not maintain a written policy with respect to related party transactions and our board of directors does not routinely review potential transactions with those parties we have identified as related parties prior to the consummation of the transaction. ITEM 14. Principal Accountant Fees and Services The following table presents aggregate fees billed to the Company for professional services rendered by L J Soldinger Associates, LLC for the years ended December 31, 2022, and 2021: 2022 Fees 2021 Fees Audit Fees $ 278,100 $ 270,700 Audit-Related Fees - - Tax Fees 24,500 53,200 Total Fees $ 302,600 $ 323,900 Audit Fees were for professional services rendered for the audit of the Company’s annual consolidated financial statements and review of consolidated financial statements included in the Company’s Quarterly Reports on Form 10-Q and services that are normally provided by the independent registered public accounting firm in connection with statutory and regulatory filings or engagements. The 2022 and 2021 fees include not only the annual audit fees but the review of the three quarterly 10-Q’s in 2022 and 2021, respectively. Audit-Related Fees were for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements and are not reported under “Audit Fees.” Tax Fees were for professional services rendered for federal, state and international tax compliance, tax advice and tax planning. ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS a) Financial Statements The following financial statements are included as Exhibit 99.1 and are hereby incorporated by reference: Audited Financial Statements Page Report of Independent Registered Public Accounting Firm F-1 Consolidated Balance Sheets as of December 31, 2022 and 2021 F-2 Consolidated Statements of Operations for the Years Ended December 31, 2022 and 2021 F-3 Consolidated Statements of Stockholders’ Deficit for the Years Ended December 31, 2022 and 2021 F-4 Consolidated Statements of Cash Flows for the Years Ended December 31, 2022 and 2021 F-5 Notes to Consolidated Financial Statements F-6 36 (b) Exhibits EXHIBIT INDEX 3.1 Articles of Incorporation, dated February 13, 2002 (1) 3.2 Amendment to the Articles of Incorporation, dated December 19, 2007, changing the name and effecting a reverse stock split (1) 3.3 Bylaws of the corporation, effective February 13, 2002 (1) 4.1 $225,000 Convertible Note and Note Agreement of the Corporation, issued February 14, 2012 (2) 4.2 Form of Warrant, having a 3-year life with $0.50 exercise price (1) 4.3 Form of Warrant, having a 5-year life with $0.50 exercise price (1) 10.1 Agreement for acquisition of MV, dated June 13, 2008 (1) 10.2 Agreement for acquisition of intellectual property from Black Stone Management Services, LLC, dated August 10, 2011 (1) 10.3 Agreement for Merger with Satellite Organizing Solutions, Inc. (1) 10.4 Consulting Agreement between the Company and Monty R. Lamirato, dated October 8, 2013 (3) 10.5 Irrevocable License and Royalty Agreement between the Company and Paragon Waste Solutions, LLC, dated March 21, 2012 (3) 14.1 Code of Ethics (1) 21.1 Subsidiaries of Registrant (1) 31.1* Certification of Principal Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 31.2* Certification of Principal Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 32.1** Certification of Principal Executive Officer ) pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 32.2** Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 99.1 Financial Statements 101.INS*** Inline XBRL Instance Document 101.SCH*** Inline XBRL Taxonomy Extension Schema Document 101.CAL*** Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF*** Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB*** Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE*** Inline XBRL Taxonomy Extension Presentation Linkbase Document 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) (1) Incorporated by reference to the Company’s Report on Form 10 filed May 21, 2013. (2) Incorporated by reference to the Company’s Report on Form 10 Amendment No. 1 filed July 23, 2013. (3) Incorporated by reference to the Company’s Report on Form 10-Q filed November 14, 2013 (4) Incorporated by reference to the Company’s Report on Form 10-K filed March 27, 2014 * Filed herewith ** This certification is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended or the Exchange Act. *** Pursuant to applicable securities laws and regulations, these interactive data files will not be deemed “filed” for the purposes of Section 18 of the Securities and Exchange Act of 1934 or otherwise subject to the liability of that section, nor will they be deemed filed or made a part of a registration statement or prospectus for purposes of Sections 11 and 12 of the Securities Act of 1933, or otherwise subject to liability under those sections. 37 SIGNATURES Pursuant to the requirements of Section 13or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized. Dated: April 13, 2023 STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC. By /s/ J. John Combs III J. John Combs III Chief Executive Officer with Responsibility to sign on behalf of Registrant as a Duly authorized officer and principal executive officer By /s/ Ian Smith Ian Smith Interim Chief Financial Officer with responsibility to sign on behalf of Registrant as a duly authorized officer and principal financial officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated: /s/ J. John Combs III Chairman of the Board of Directors April 13, 2023 J. John Combs III /s/ Christopher Scott Yenzer Director April 13, 2023 Christopher Scott Yenzer /s/ Christopher Dieterich Director April 13, 2023 Christopher Dieterich 38 Exhibit 99.1 Financial Statements Annual Audited Consolidated Financial Statements Page Report of Independent Registered Public Accounting Firm F-1 Consolidated Balance Sheets as of December 31, 2022 and 2021 F-2 Consolidated Statements of Operations for the Years Ended December 31, 2022 and 2021 F-3 Consolidated Statements of Stockholders’ Deficit for the Years Ended December 31, 2022 and 2021 F-4 Consolidated Statements of Cash Flows for the Years Ended December 31, 2022 and 2021 F-5 Notes to Consolidated Financial Statements F-6 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Strategic Environmental & Energy Resources, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Strategic Environmental & Energy Resources, Inc. and subsidiaries (the “Company”) as of December 31, 2022 and 2021 and the related consolidated statements of operations, stockholders’ deficit, and cash flows for each of the two years in the period ended December 31, 2022 and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America. Explanatory Paragraph – Going Concern The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1, the Company has (i) incurred significant losses since inception, (ii) has an accumulated deficit of approximately $32.0 million as of December 31, 2022 and (iii) needs to raise substantial amounts of additional funds to meet its obligations as well as afford it time to develop profitable operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there were no critical audit matters. /s/ LJ Soldinger Associates, LLC We have served as the Company’s auditor since 2013. Deer Park, IL April 13, 2023 PCAOB Audit ID # 318 F- 1 STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC. CONSOLIDATED BALANCE SHEETS 2022 2021 December 31, December 31, 2022 2021 * * ASSETS Current Assets Cash and cash equivalents $ 21,500 $ 188,800 Accounts receivable, net of allowance for doubtful accounts of $ 179,000 and $ 0 , respectively 640,500 536,600 Inventory 9,400 201,700 Contract assets 138,700 3,600 Prepaid expenses and other current assets 85,800 111,300 Total Current Assets 895,900 1,042,000 Property and equipment, net 255,700 433,000 Intangible Assets, net 20,700 419,300 Right of use assets 249,700 302,300 Investments 182,200 - Other assets 40,200 40,600 TOTAL ASSETS $ 1,644,400 $ 2,237,200 LIABILITIES AND STOCKHOLDERS’ DEFICIT Current Liabilities Accounts payable $ 1,085,700 $ 471,200 Accrued liabilities 2,963,800 2,230,100 Contract liabilities 536,000 525,900 Paycheck protection program liabilities - 96,600 Short term notes 3,517,000 2,843,900 Short term notes and accrued interest - related party 184,000 180,800 Convertible notes 1,605,000 1,605,000 Current portion of long term debt 531,300 525,600 Current portion of lease liabilities 63,100 54,700 Total Current Liabilities 10,485,900 8,533,800 Lease liabilities net of current portion 217,400 280,300 Long term debt, net of current portion 1,849,100 1,619,600 Total Liabilities 12,552,400 10,433,700 Commitments and contingencies - - Stockholders’ deficit Preferred stock; $ .001 par value; 5,000,000 shares authorized; - 0 - shares issued - - Common stock; $ .001 par value; 70,000,000 shares authorized; 65,088,575 shares issued, issuable ** and outstanding December 31, 2022 and December 31, 2021 65,100 65,100 Common stock issuable 25,000 25,000 Additional paid-in capital 22,973,800 22,973,800 Stock Subscription receivable ( 25,000 ) ( 25,000 ) Accumulated deficit ( 32,005,100 ) ( 29,364,800 ) Total stockholders’ deficit ( 8,966,200 ) ( 6,325,900 ) Non-controlling interest ( 1,941,800 ) ( 1,870,600 ) Total Deficit ( 10,908,000 ) ( 8,196,500 ) TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT $ 1,644,400 $ 2,237,200 ** Includes 2,785,000 shares issuable at December 31, 2022 and December 31, 2021, per terms of note agreements. The accompanying notes are an integral part of these consolidated financial statements. F- 2 STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS 2022 2021 For The Years Ended December 31, 2022 2021 Revenue: Products $ 4,037,900 $ 3,238,300 Solid waste 100,000 240,100 Total revenue 4,137,900 3,478,400 Operating expenses: Products costs 3,374,900 2,221,300 Solid waste costs 14,800 29,100 General and administrative expenses 1,257,700 1,018,200 Salaries and related expenses 1,250,300 946,100 Impairment - Intangibles 41,900 - Impairment - Goodwill 277,800 Total operating expenses 6,217,400 4,214,700 Loss from operations ( 2,079,500 ) ( 736,300 ) Other income (expense): Interest expense ( 805,700 ) ( 738,600 ) Gain on abandonment - 1,458,200 Gain on debt extinguishment 96,600 213,200 Other 77,100 31,100 Total non-operating expense, net ( 632,000 ) 963,900 Income (loss) from continuing operations ( 2,711,500 ) 227,600 Income from discontinued operations, net of tax - 292,100 Net lncome (loss) ( 2,711,500 ) 519,700 Less: Net income (loss) attributable to non-controlling interest ( 71,200 ) 190,800 Net income (loss) attributable to SEER common stockholders $ ( 2,640,300 ) $ 328,900 Basic earnings per share attributable to SEER common stockholders Loss from continuing operations, per share $ ( 0.04 ) $ 0.00 Income from discontinued operations, per share - 0.01 Net income (loss) per share, basic $ ( 0.04 ) $ 0.01 Fully diluted earnings per share attributable to SEER common stockholders Loss from continuing operations, per share ( 0.04 ) 0.00 Income from discontinued operations, per share - 0.01 Net income (loss) per share, basic $ ( 0.04 ) $ 0.01 Weighted average shares outstanding – basic 65,088,575 65,088,575 Weighted average shares outstanding – diluted 65,088,575 65,178,575 The accompanying notes are an integral part of these consolidated financial statements. F- 3 STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC. CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT Shares Amount Shares Amount Capital Subscribed Receivable Deficit Interest Deficit Additional Total Preferred Stock Common Stock Paid-in Common Stock Stock Subscription Accumulated Non-controller Stockholders’ Shares Amount Shares Amount Capital Subscribed Receivable Deficit Interest Deficit Balances at December 31, 2020 - - 65,088,600 65,100 22,961,200 25,000 ( 25,000 ) ( 29,693,700 ) ( 2,061,400 ) ( 8,728,800 ) Stock-based compensation - - - - 12,600 - - - - 12,600 Net income - - - - - - - 328,900 190,800 519,700 Balances at December 31, 2021 - - 65,088,600 65,100 22,973,800 25,000 ( 25,000 ) ( 29,364,800 ) ( 1,870,600 ) ( 8,196,500 ) Net loss - - - - - - - ( 2,640,300 ) ( 71,200 ) ( 2,711,500 ) Balances at December 31, 2022 - - 65,088,600 65,100 22,973,800 25,000 ( 25,000 ) ( 32,005,100 ) ( 1,941,800 ) ( 10,908,000 ) The accompanying notes are an integral part of these consolidated financial statements. F- 4 STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC. CONSOLIDATED STATEMENT OF CASH FLOWS For the year ended December 31, Cash flows from operating activities: 2022 2021 Loss from continuing operations $ ( 2,711,500 ) $ 227,600 Loss from discontinued operations - 292,100 Net income (loss) ( 2,711,500 ) 519,700 Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 90,800 134,000 Stock-based compensation expense - 12,600 Gain on abandoment of subsidiary ( 1,458,000 ) Non-cash expense for interest, accretion of debt discount - 29,900 Gain on debt distinguishment ( 96,600 ) ( 623,800 ) Other Income ( 50,800 ) Loss/(Gain) on disposition of assets 4,900 ( 217,300 ) Impairment Loss 319,700 - Bad debt 179,200 ( 1,000 ) Changes in operating assets and liabilities: Accounts receivable ( 283,100 ) ( 160,000 ) Contract assets ( 135,100 ) 3,200 Inventory 192,300 ( 106,200 ) Prepaid expenses and other assets 79,900 120,900 Accounts payable, accrued liabilities, and customer deposits 1,376,200 26,700 Contract liabilities 10,100 202,000 Deferred revenue - ( 30,200 ) Net cash used in operating activities ( 1,024,000 ) ( 1,547,500 ) Cash flows from investing activities: Purchase of property and equipment ( 18,400 ) ( 3,000 ) Proceeds from the sale of fixed assets 10,100 192,100 Net cash (used in) provided by investing activities ( 8,300 ) 189,100 Cash flows from financing activities: Payments of notes ( 85,000 ) ( 154,100 ) Payments of short-term notes - related party ( 25,000 ) ( 71,100 ) Proceeds from short-term notes and accrued interest - related party - 10,000 Proceeds from short-term and long-term debt 975,000 1,585,000 Proceeds from paycheck protection program - 130,100 Net cash provided by financing activities 865,000 1,499,900 Net increase (decrease) in cash ( 167,300 ) 141,500 Cash at the beginning of period 188,800 47,300 Cash at the end of period $ 21,500 $ 188,800 Supplemental disclosures of cash flow information: Cash paid for interest $ 34,600 $ 37,500 Cash paid for income taxes $ - $ - Investment in PSMW $ 182,200 $ - Financing of prepaid insurance premiums $ 56,000 $ 52,400 Non-cash repayment of debt $ - $ 188,900 Non-cash purcahse of equipment $ 13,300 $ - Non-cash payment of interest $ 15,400 $ 22,500 The accompanying notes are an integral part of these consolidated financial statements. F- 5 STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC. Notes to Consolidated Financial Statements NOTE 1 - ORGANIZATION AND FINANCIAL CONDITION Organization and Going Concern Strategic 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. 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”), is 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 on September 1, 2021, all operations are included in discontinued operations (See Note 14). The three majority-owned subsidiaries are 1) Paragon Waste Solutions, LLC (“PWS”), 2) PelleChar, LLC (“PelleChar”), and 3) Benefules, LLC (“Benefuels”). PWS is currently owned 54 % by SEER, PelleChar is owned 51 % by SEER, and Benefuels is owned 85 % by SEER. Benefuels, focuses specifically on treating biogas for conversion to pipeline quality gas and/or compressed natural gas (“CNG”) for fleet vehicle fuel. Benefuels had minimal operations during the years ended December 31, 2022 and 2021. PWS 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 emissions. Additionally, this 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. In July 2022, the Company exchanged its patents and related technology, to its joint venture, Paragon Southwest Medical Waste (“PSMW”), in exchange for units in PSMW (See Note 9.) PelleChar was established in September 2018 and is owned 51 % by SEER. Pellechar has secured third-party pellet manufacturing capabilities from one of the nation’s premier pellet manufacturers. Working closely with Biochar Now, LLC, Pellechar commenced sales in late 2019 of its proprietary pellets containing the proven and superior Biochar Now product starting with the landscaping and big agriculture markets. At this time, Pellechar is the only company able to offer a soil amendment pellet containing the Biochar Now product that is produced using the patented pyrolytic process. Principals of Consolidation The accompanying consolidated financial statements include the accounts of SEER, its wholly owned subsidiaries, SEM, and MV, 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. Going Concern As shown in the accompanying consolidated financial statements, the Company has experienced recurring losses, and has an accumulated deficit of approximately $ 32.0 million as of December 31, 2022, and for the year ended December 31, 2022, we incurred a net loss from continuing operations of approximately $ 2.7 million. As of December 31, 2022, our current liabilities exceeded our current assets by approximately $ 9.6 million. These factors raise substantial doubt about the ability of the Company to continue to operate as a going concern. F- 6 Realization of a major portion of the Company’s assets as of December 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 year ended December 31, 2022, the Company raised approximately $ 1.0 million from the issuance of short-term and long-term debt, offset by payments of principal on short term notes of $ 0.1 million, for a net cash provided by financing activities of approximately $ 0.9 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. Critical to achieving profitability will be the ability to license and or sell, permit and operate though the Company’s joint ventures. 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. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of these consolidated financial statements in conformity with accounting principles generally accepted in the United States (U.S. GAAP) requires management to make a number of estimates and assumptions related to the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. Significant items subject to such estimates and assumptions include the forecasted cash flows used in the impairment testing of goodwill and intangible assets. The carrying amount of intangible assets; valuation allowances and reserves for receivables; revenue recognition related to contracts accounted for under the percentage of completion method; and the Company’s ability to continue as a going concern. Actual results could differ from those estimates. Reclassifications Certain reclassifications have been made in 2021 consolidated financial statements to conform to the 2022 presentation. These reclassifications have no effect on net income for the year ended December 31, 2021. Cash and Cash Equivalents We consider all highly liquid debt investments with an original maturity of three months or less at the date of acquisition to be cash equivalents. Periodically, we maintain deposits in financial institutions in excess of federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents. As of December 31, 2022, and 2021, we did not hold any assets that would be deemed to be cash equivalents. Accounts Receivable and Concentration of Credit Risk Accounts receivable are recorded at the invoiced amounts less an allowance for doubtful accounts. The allowance for doubtful accounts is based on our estimate of the amount of probable credit losses in our accounts receivable. We determine the allowance for doubtful accounts based upon an aging of accounts receivable, historical experience and management judgment. Accounts receivable balances are periodically reviewed for collectability, and balances are charged off against the allowance when we determine that the potential for recovery is remote. An allowance for doubtful accounts of approximately $ 179,000 and $ 0 had been reserved as of December 31, 2022, and 2021, respectively. F- 7 We are exposed to credit risk in the normal course of business, primarily related to accounts receivable. Our customers operate primarily in the oil production and refining, biogas generating landfill and wastewater treatment industries in the United States. Accordingly, we are affected by the economic conditions in these industries as well as general economic conditions in the United States. To limit credit risk, management periodically reviews and evaluates the financial condition of its customers and maintains an allowance for doubtful accounts. As of December 31, 2022, we had four customers who comprised 10% or more of our accounts receivable and had a balance of approximately $ 461,700 . As of December 31, 2021, we had three customers who comprised 10% or more of our accounts receivable and had a balance of approximately $ 295,900 . For the year ended December 31, 2022, we had two customers who each had sales in excess of 10% of our revenue and they represented approximately 23 % of total revenue. For the year ended December 31, 2021, we had three customers who each had sales in excess of 10% of our revenue and they represented approximately 36 % of total revenue. Inventories Inventories are stated at the lower of cost or net realizable value and maintained on a first in, first out basis and includes the following amounts at December 31: SCHEDULE OF INVENTORY December 31, 2022 December 31, 2021 Finished goods $ 9,400 $ 98,200 Work in process - 28,400 Raw materials - 75,100 Inventory, net $ 9,400 $ 201,700 Vendor Concentration The Company has purchases from three vendors in 2022 and one vendor in 2021, each comprising more that 10% of total purchases. The Company does not believe it is substantially dependent upon nor exposed to any significant concentration risk related to purchases from any single vendor. Fair Value of Financial Instruments The carrying amounts of our financial instruments, including accounts receivable and accounts payable, are carried at cost, which approximates their fair value due to their short-term maturities. We believe that the carrying value of notes payable with third parties, including their current portion, approximate their fair value, as those instruments carry market interest rates based on our current financial condition and liquidity. Receivables and payables, due to short term nature, approximate their fair values. Fair Value As defined in authoritative guidance, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (“exit price”). To estimate fair value, the Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated or generally unobservable. F- 8 The authoritative guidance establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (“Level 1” measurements) and the lowest priority to unobservable inputs (“Level 3” measurements). The three levels of the fair value hierarchy are as follows: Level 1 - Observable inputs such as quoted prices in active markets at the measurement date for identical, unrestricted assets or liabilities. Level 2 - Other inputs that are observable, directly or indirectly, such as quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. Level 3 - Unobservable inputs for which there is little or no market data and which the Company makes its own assumptions about how market participants would price the assets and liabilities. In instances in which multiple levels of inputs are used to measure fair value, hierarchy classification is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. Property and Equipment Property and equipment are recorded at cost less accumulated depreciation. Expenditures for replacements, renewals and betterments are capitalized. Repairs and maintenance costs are expensed as incurred. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets of generally five to seven years for equipment, five to ten years for vehicles and three years for computer related assets. Assets are depreciated starting at the time they are placed into service. A portion of depreciation expense is charged to cost of product revenue on the consolidated statement of operations. Leasehold improvements are amortized using the straight-line method over the shorter of the lease term (including reasonably assured renewal periods), which range from three to seven years, or their estimated useful life. Goodwill and Intangible Assets Intangible Assets. Intangible assets deemed to have finite lives are amortized on a straight-line basis over their estimated useful lives, where the useful life is the period over which the asset is expected to contribute directly, or indirectly, to our future cash flows. Intangible assets are reviewed for impairment on an interim basis when certain events or circumstances exist. For amortizable intangible assets, impairment exists when the carrying amount of the intangible asset exceeds its fair value. At least annually, the remaining useful life is evaluated. An intangible asset with an indefinite useful life is not amortized but assessed for impairment annually, or more frequently, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired. Impairment exists when the carrying amount exceeds its fair value. In testing for impairment, the Company has the option to first perform a qualitative assessment to determine whether it is more likely than not that an impairment exists. If it is determined that it is not more likely than not that an impairment exists, a quantitative impairment test is not necessary. If the Company concludes otherwise, it is required to perform a quantitative impairment test. To the extent an impairment loss is recognized, the loss establishes the new cost basis of the asset that is amortized over the remaining useful life of that asset, if any. Subsequent reversal of impairment losses is not permitted. Goodwill represents the excess of purchase price of acquired businesses over the fair value of the assets acquired and liabilities assumed. Goodwill is allocated to the reporting unit in which the business that created the goodwill resides. The Company evaluates the recoverability of goodwill annually; however, we could be required to evaluate the recoverability of goodwill more often if impairment indicators exist. In 2022, we early adopted ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment , which eliminates the two-step goodwill impairment process. Goodwill is first qualitatively assessed to determine whether further impairment testing is necessary. Factors that management considers in this assessment include macroeconomic conditions, industry and market considerations, overall financial performance (both current and projected), changes in management and strategy, and changes in the composition or carrying amount of net assets. If this qualitative assessment indicates that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, a one-step test is then performed by comparing the fair value of a reporting unit to its carrying amount. If the fair value of a reporting unit is less than its carrying value, an impairment charge will be recorded for the difference between the fair value and carrying value, but is limited to the carrying value of the reporting unit’s goodwill. An impairment loss was charged to goodwill in the amount of $ 277,800 for the year ended December 31, 2022. No impairment was recorded for the year ended December 31, 2021. Impairment of Long-lived Assets We evaluate the carrying value of long-lived assets for impairment on an annual basis or whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. Further testing of specific assets or grouping of assets is required when undiscounted future cash flows associated with the assets is less than their carrying amounts. An asset is considered to be impaired when the anticipated undiscounted future cash flows of an asset group are estimated to be less than its carrying value. The amount of impairment recognized is the difference between the carrying value of the asset group and its fair value. Fair value estimates are based on assumptions concerning the amount and timing of estimated future cash flows. We recorded no impairment of long-lived assets for the year ended December 31, 2022. F- 9 Revenue Recognition In May 2014, the FASB issued guidance on revenue from contracts with customers that superseded most current revenue recognition guidance, including industry-specific guidance. The underlying principle of the guidance is to recognize revenue to depict the transfer of goods or services to customers at an amount to which the company expects to be entitled in exchange for those goods or services. The new guidance requires an evaluation of revenue arrangements with customers following a five-step approach: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations; and (5) recognize revenue when (or as) the company satisfies each performance obligation. Revenues are recognized when control of the promised services are transferred to the customers in an amount that reflects the expected consideration in exchange for those services. A customer obtains control when it has the ability to direct the use of and obtain the benefits from the services. Other major provisions of the guidance include capitalization of certain contract costs, consideration of the time value of money in the transaction price and allowing estimates of variable consideration to be recognized before contingencies are resolved in certain circumstances. The guidance also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. (See Note 3) Stock-based Compensation We account for stock-based awards at fair value on the date of grant and recognize compensation over the service period that they are expected to vest. We estimate the fair value of stock options and stock purchase warrants using the Black-Scholes option pricing model. The estimated value of the portion of a stock-based award that is ultimately expected to vest, taking into consideration estimated forfeitures, is recognized as expense over the requisite service periods. The estimate of stock awards that will ultimately vest requires judgment, and to the extent that actual forfeitures differ from estimated forfeitures, such differences are accounted for using the simplified method to estimate the expected term of the option and recorded in the period that estimates are revised. Research and Development Research and development (“R&D”) costs are charged to expense as incurred and are included in selling, general and administrative costs in the accompanying consolidated statement of operations. R&D expenses consist primarily of salaries, project materials, contract labor and other costs associated with ongoing product development and enhancement efforts. R&D expenses were $ 0 for the years ended December 31, 2022, and 2021. R & D expenses are included in general and administrative expenses, when incurred. Income Taxes The Company accounts for income taxes pursuant to Accounting Standards Codification (“ASC”) 740, Income Taxes, which utilizes the asset and liability method of computing deferred income taxes. The objective of this method is to establish deferred tax assets and liabilities for any temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities at enacted tax rates expected to be in effect when such amounts are realized or settled. ASC 740 also provides detailed guidance for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in the financial statements. Tax positions must meet a “more-likely-than-not” recognition threshold at the effective date to be recognized. During the years ended December 31, 2022, and 2021 the Company recognized no adjustments for uncertain tax positions. The 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 at December 31, 2022 and 2021. The Company expects no material changes to unrecognized tax positions within the next twelve months. The Company has filed federal and state tax returns through December 31, 2021. The tax periods for the years ending December 31, 2019, through 2022 are open to examination by federal and state authorities. F- 10 Recently issued accounting pronouncements Changes to accounting principles generally accepted in the United States of America (U.S. GAAP) are established by the Financial Accounting Standards Board (FASB) in the form of accounting standards updates (ASU’s) to the FASB’s Accounting Standards Codification. The Company considers the applicability and impact of all new or revised ASU’s. In March 2020, the FASB issued ASU No. 2020 - 04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . ASU 2020 - 04 provides optional expedient and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. In response to the concerns about structural risks of interbank offered rates and, particularly, the risk of cessation of the London Interbank Offered Rate (“LIBOR”), regulators in several jurisdictions around the world have undertaken reference rate reform initiatives to identify alternative reference rates that are more observable or transaction-based and less susceptible to manipulation. The ASU provides companies with optional guidance to ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued. In January 2021, the FASB issued ASU 2021 - 01, Reference Rate Reform — Scope , which clarified the scope and application of the original guidance. In December 2022, the FASB issued ASU 2022 - 06, Reference Rate Reform — Deferral of the Sunset Date of Topic 848 . This update extends the sunset provision of ASU 2020 - 04 to December 31, 2024. The Company has not yet adopted this ASU and is evaluating the effect of adopting this new accounting guidance. In June 2016, the FASB issued ASU No. 2016 - 13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . ASU 2016 - 13 requires companies to measure credit losses utilizing a methodology that reflects expected credit losses and requires a consideration of a broader range of reasonable and supportable information to inform credit loss estimates. For companies that qualified as Smaller Reporting Companies as defined by the SEC as of November 19, 2019, ASU 2016 - 13 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. The Company is evaluating the impact of the guidance on its financial statements. NOTE 3 – REVENUE Products Revenue Product revenue is generated from contracts with customers, for the design and manufacturing of odor and emission control solutions. Total estimated revenue includes all of the following: (1) the basic contract price, (2) contract options, and (3) change orders and is recognized as the contract progresses and costs are incurred. Once contract performance is underway, the Company may experience changes in conditions, client requirements, specifications, designs, materials and expectations regarding the period of performance. Such changes are “change orders” and may be initiated by us or by our clients. In many cases, agreement with the client as to the terms of change orders is reached prior to work commencing; however, sometimes circumstances require that work progress without obtaining client agreement. Revenue related to change orders is recognized as costs are incurred if it is probable that costs will be recovered by changing the contract price. The Company does not incur pre-contract costs. Under the new revenue recognition guidance, we found no significant change in the manner we recognize product revenue. Provisions for estimated losses on uncompleted contracts are recorded in the period in which the losses are identified and included as additional loss. Provisions for estimated losses on contracts are shown separately as liabilities on the balance sheet, if significant, except in circumstances in which related costs are accumulated on the balance sheet, in which case the provisions are deducted from the accumulated costs. A provision as a liability is reported as a current liability. The Company includes in current assets and current liabilities amounts related to contracts realizable and payable. Costs and estimated earnings in excess of billings on uncompleted contracts represent the excess of contract costs and profits recognized to date over billings to date and are recognized as a current asset. Revenue contract liabilities represent the excess of billings to date over the amount of contract costs and profits recognized to date and are recognized as a current liability. Products revenue also includes media sales which are recognized as the product is shipped to the customer for use. F- 11 Disaggregation of Revenue SCHEDULE OF DISAGGREGATION OF REVENUE Environmental Solutions Solid Waste Total Year ended December 31, 2022 Environmental Solutions Solid Waste Total Sources of Revenue Product sales $ 2,826,700 $ - $ 2,826,700 Media sales 1,211,200 - 1,211,200 Management fees - 100,000 100,000 Total Revenue $ 4,037,900 $ 100,000 $ 4,137,900 Environmental Solutions Solid Waste Total Year ended December 31, 2021 Environmental Solutions Solid Waste Total Sources of Revenue Product sales (1) $ 2,430,500 - $ 2,430,500 Media sales 807,800 - 807,800 Licensing fees - 30,200 30,200 Operating fees - 9,900 9,900 Management fees - 200,000 200,000 Total Revenue $ 3,238,300 $ 240,100 $ 3,478,400 (1) Includes $ 177,200 of revenue included in discontinued operations Contract Balances Where a performance obligation has been satisfied but not yet invoiced at the reporting date, a contract asset is recognized on the balance sheet. Where a performance obligation has not yet been satisfied but an invoice has been raised at the reporting date, a contract liability is recognized on the balance sheet. The opening and closing balances of the Company’s accounts receivables, contract assets, and contract liabilities (current and non-current) are as follows: SCHEDULE OF CONTRACT BALANCES Contract Liabilities Accounts Deferred Deferred Receivable, net Contract Assets Contract Liabilities Revenue (current) Revenue (non-current) Balance as of December 31, 2022 $ 640,500 $ 138,700 $ 536,000 $ - $ - Balance as of December 31, 2021 536,600 3,600 525,900 - - Increase (decrease) $ 103,900 $ 135,100 $ 10,100 $ - $ - The majority of the Company’s revenue is generally invoiced on a weekly or monthly basis, and the payments are generally received within 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. F- 12 Remaining Performance Obligations As of December 31, 2022, the aggregate amount of the transaction price allocated to the remaining performance obligations was approximately $ 0.8 million, of which the Company expects to recognize approximately 85 % over the next 12 months. The 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 performed. NOTE 4 - PROPERTY AND EQUIPMENT Property and equipment was comprised of the following: SCHEDULE OF PROPERTY PLANT AND EQUIPMENT December 31, 2022 December 31, 2021 * Field and shop equipment $ 507,200 $ 553,200 Vehicles 72,500 72,500 Waste destruction equipment, placed in service 0 553,300 Furniture and office equipment 333,800 342,400 Leasehold improvements 36,200 36,200 Building and improvements 0 21,200 Land 162,900 162,900 Property and equipment, gross 1,112,600 1,741,700 Less: accumulated depreciation and amortization ( 856,900 ) ( 1,308,700 ) Property and equipment, net $ 255,700 $ 433,000 Depreciation expense for the years ended December 31, 2022, and 2021 was $ 70,900 and $ 105,900 , respectively. For the year ended December 31, 2022, and 2021, depreciation expense included in cost of goods sold was $ 59,900 and $ 80,200 , respectively. For the year ended December 31, 2022, and 2021 depreciation expense included in selling, general and administrative expenses was $ 11,000 and $ 25,700 , respectively. The Company evaluated its fixed assets for impairment, and determined that no impairment charges were incurred in fiscal years ended December 31, 2022 and 2021. F- 13 NOTE 5 – INTANGIBLE ASSETS Intangible assets were comprised of the following: SCHEDULE OF INTANGIBLE ASSETS December 31, 2022 Gross carrying amount Accumulated amortization Impairment Net carrying value Goodwill $ 277,800 $ - $ ( 277,800 ) $ - Customer list 42,500 ( 42,500 ) - - Technology 875,900 ( 813,300 ) ( 41,900 ) 20,700 Trade name 54,900 ( 54,900 ) - - $ 1,251,100 $ ( 910,700 ) $ ( 319,700 ) $ 20,700 December 31, 2021 Gross carrying amount Accumulated amortization Impairment Net carrying value Goodwill $ 277,800 $ - $ - $ 277,800 Customer list 42,500 ( 42,500 ) - - Technology 1,021,900 ( 880,400 ) - 141,500 Trade name 54,900 ( 54,900 ) - - $ 1,397,100 $ ( 977,800 ) $ - $ 419,300 The estimated useful lives of the intangible assets range from seven to twenty years . Amortization expense, included in selling, general and administrative expenses in the accompanying consolidated statements of operations, was $ 19,900 and $ 28,000 for the years ended December 31, 2022, and 2021, respectively. As of December 31, 2022, the Company qualitatively assessed whether it is more likely than not that the fair value of the SEER Environmental Materials reporting unit was less than its carrying amount. In 2022, SEM became aware of quality issues concerning its inventory production process and determined that as of December 31, 2022 it was more likely than not that the carrying value of the SEER Environmental Materials reporting unit exceeded its estimated fair value. Accordingly, the Company performed an impairment analysis as of December 31, 2022 using the income approach. This analysis generally requires management to make significant estimates and assumptions related to forecasts of future revenues, operating margins, and discount rates. Pursuant to Accounting Standard Update (“ASU”) 2017-04, the Company recorded an impairment of goodwill of approximately $ 277,800 for the year ended December 31, 2022. No impairment of goodwill was recorded for the year ended December 31, 2021. NOTE 6 – LEASES The Company has entered into operating leases primarily for real estate. 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 December 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 December 31, 2022, Consolidated Balance Sheets. As of December 31, 2022, total right-of-use assets were approximately $ 249,700 , and operating lease liabilities were approximately $ 280,500 respectively . All operating lease expense is recognized on a straight-line basis over the lease term. In the year ended December 31, 2022, the Company recognized approximately $ 83,600 in operating lease costs for right-of-use assets. Because the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present value of the lease payments. The Company has certain contracts for real estate which may contain lease and non-lease components which it has elected to treat as a single lease component. F- 14 Information related to the Company’s right-of-use assets and related lease liabilities were as follows: SCHEDULE OF RIGHT-OF-USE-ASSETS AND RELATED LEASE LIABILITIES Years Ended December 31, 2022 2021 Cash paid for operating lease liabilities $ 124,900 $ 247,600 Right-of-use assets obtained in exchange for new operating lease obligations - - Weighted-average remaining lease term 44 months 56 months Weighted-average discount rate 10 % 10 % Maturities of lease liabilities as of September 30, 2022 were as follows: SCHEDULE OF MATURITIES OF LEASE LIABILITIES 2023 $ 88,300 2024 90,900 2025 93,600 2026 64,500 2027 - Thereafter - Lease liabilities 337,300 Less imputed interest ( 56,800 ) Total lease liabilities 280,500 Current operating lease liabilities 63,100 Non-current operating lease liabilities 217,400 Total lease liabilities $ 280,500 NOTE 7 - ACCRUED LIABILITIES Accrued liabilities were comprised of the following: SCHEDULE OF ACCRUED LIABILITIES December 31, December 31, 2022 2021 * Accrued compensation and related taxes $ 81,900 $ 124,600 Accrued interest 2,562,300 1,818,500 Accrued settlement/litigation claims 150,000 150,000 Warranty and defect claims 57,000 40,000 Other 112,600 97,000 Total Accrued Liabilities $ 2,963,800 $ 2,230,100 F- 15 NOTE 8 - UNCOMPLETED CONTRACTS Costs, estimated earnings and billings on uncompleted contracts are as follows: SCHEDULE OF UNCOMPLETED CONTRACTS December 31, December 31, 2022 2021 Revenue recognized $ 440,200 $ 285,600 Less: billings to date ( 301,500 ) ( 282,000 ) Contract assets 138,700 3,600 Billings to date 2,849,400 1,578,300 Revenue recognized ( 2,313,400 ) ( 1,052,400 ) Contract liabilities $ 536,000 $ 525,900 NOTE 9 – INVESTMENT IN PARAGON WASTE SOLUTIONS LLC Paragon Waste Solutions LLC In 2010, the Company and Black Stone Management Services, LLC (“Black Stone”) formed PWS, whereby a total of 1,000,000 membership units were issued, 600,000 membership units to the Company and 400,000 membership units to Black Stone. Fortunato Villamagna, who serves as President of our PWS subsidiary, is a managing member and Chairman of Black Stone. In June 2012, the Company and Blackstone each allocated 10 % of their respective membership units in PWS to Mr. J John Combs III, an officer and shareholder of the Company and Mr. Michael Cardillo, a shareholder of the Company and an officer of a subsidiary. There was no value attributable to the units at the time of the allocation. As of December 31, 2021, and 2020 the Company owned 54 % of the membership units, Black Stone owned 36 % of the membership units, and two related parties (as noted above), each owned 5 % of the membership units. In August 2011, the Company acquired certain intellectual property in regard to waste destruction technology (the “IP”) from Black Stone in exchange for 1,000,000 shares of our common stock valued at $ 100,000 . We estimated the useful life of the IP at ten years, which was consistent with the useful life of other technology included in our intangible assets, and management’s initial assessment of the potential marketability of the IP. In March 2012, the Company entered into an Irrevocable License & Royalty Agreement with PWS that grants PWS an irrevocable world-wide license to the IP in exchange for a 5 % royalty on all revenues from the sale or lease of all CoronaLux™ units from PWS and its affiliates. The term commenced as of the date of the Agreement and shall continue for a period not to exceed the life of the patent or patents filed by the Company. PWS may sub license the IP and any revenue derived from sub licensing shall be included in the calculation of Gross Revenue for purposes of determining royalty payments due the Company. Royalty payments are due 30 days after the end of each calendar quarter. PWS generated licensing and unit sales revenues of approximately $ 0 and $ 30,200 for the years ended December 31, 2022, and 2021, respectively. Since its inception through December 31, 2022, we have 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 contributions or other funding to PWS other than SEER. The intent of the operating agreement is that we will provide the funding as an advance against future earnings distributions made by PWS. F- 16 Licensing Agreements On November 17, 2014, PWS entered into an Exclusive Licensing and Equipment Lease Agreement, for a limited license territory, with Medical Waste Services, LLC (“MWS”). The License Agreement grants to MWS the use of the PWS Technology and the CoronaLux™ waste destruction units for an initial term of seven years and required a payment of $ 225,000 as a non-refundable initial licensing fee and distributions of 50 % of net operating profits, as defined in the agreement, in lieu of continuing royalty payments for the use of the licensed technology. PWS and Medical Waste Services, LLC (“MWS”) formed a contractual joint venture to exploit the PWS medical waste destruction technology. MWS has received approval from the California Department of Public Health and a restricted permit from the South Coast Air Quality Management District (“SCAQMD”) to operate the CoronaLux™ unit licensed by MWS at its facility in Southern California. The original licensing and partnership agreement was formally canceled in 2019, because MWS failed to implement the expansion plan outlined in the original agreement), with both parties agreeing to continue operating the CoronaLux under the original terms of the agreement, for strategic reasons. PWS has no obligations, commitments, or liabilities relative to MWS, and is free to sublicense to anyone or develop company owned facilities. Operations to date have included the destruction of medical waste under a temporary operating permit issued by SCAQMD since May 2015 and efforts to obtain a full operating permit from SCAQMD were successful and SCAQMD issued a ‘Notice of Intent to Issue Permit to Operate’ in March 2017. In November 2017, the full operating permit was issued by SCAQMD. In December 2017, PWS and GulfWest Waste Solutions, LLC (“GWWS”) formed Paragon Southwest Medical Waste, LLC (“PSMW”) to exploit the PWS medical waste destruction technology. PSMW has an exclusive license to the CoronaLux™ technology in a six-state area of the Southern United States. In 2017, PSMW purchased and installed three CoronaLux™ units for $ 600,000 . PWS incurred costs of $ 525,700 to prepare the three units for sale. Operations in the form of medical waste destruction began in 2018. Paragon Southwest Medical Waste, LLC On July 20, 2022, PWS transferred all patents owned covering medical waste destruction, and related technology, to its joint venture, Paragon Southwest Medical Waste (“PSMW”), in exchange for non-voting units in PSMW. The units in PSMW transferred in connection with this transaction increased SEER’s equity in PSMW to approximately 20 %, on a total consolidated basis. This transaction also canceled the irrevocable license and royalty agreement, and the management agreement between PWS and PSMW. The Company recorded its investment in PSMW of $ 182,200 under the cost method of accounting. The Company assessed its investment in PSMW for impairment, and as of December 31, 2022, determined that no impairment was required. NOTE 10 – INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES The Company has a non-controlling interest in other joint ventures, currently three primarily for licensing and operating PWS CoronaLux™ waste destruction units and one for development of hybrid scrubber systems. Two joint ventures have limited their activity to formation only, no other operations have commenced. The Company has no fixed commitment to fund any losses of the operating joint ventures and has no investment basis in any of the joint ventures therefore the Company has suspended the recognition of losses under the equity method of accounting, in accordance with ASC 323-10-35-20. F- 17 NOTE 11 – DEBT Debt as of December 31, 2022, and 2021 was comprised of the following: SCHEDULE OF DEBT December 31, December 31, 2022 2021 PAYROLL PROTECTION PROGRAM Under the Small Business Administration (“SBA”), the Company applied for the Paycheck Protection Program (“PPP”) loan. These loans are forgiven if used for payroll, payroll benefits, including health insurance and retirement plans, as well as certain rent payments, leases, and utility payments, which are limited to 40 % of the loan proceeds, all of which if paid within either 8 weeks or 24 weeks of the receipt of the loan proceeds . At the time of this filing, the loans were forgiven by the SBA and recorded as a gain on debt extinguishment. $ - $ 96,600 SHORT TERM NOTES Secured short term note payable dated October 13, 2017 with principal and interest due 60 days from issuance. The note requires a one-time fee in the amount of $ 4,000 to compensate for the first two weeks of the term and each week thereafter (weeks 3-8) a fee of $ 400 shall be due and owing accruing on the first day of the week. The total one-time fee paid was $ 6,400 and was recorded as interest. A fee of 40,000 shares of restricted common stock shall be issued as a penalty for each month or prorated for any two-week portion of any month the note is outstanding past the original maturity date for months 3 through 6, and a fee of 80,000 shares of restricted common stock shall be issued to lender for each month or prorated for each two-week portion of any month the note is outstanding past the original maturity date beginning in month 7 until paid in full. The note is secured by the future sale of CoronaLux units and a personal guarantee of an officer of the Company. The penalty period for shares to be issued has been reached, however, the debt holder agreed to a reduction and a fixed amount of penalty shares in 2018, as issuable under the terms of this agreement. No additional shares will be issued by the Company. The reduction of penalty shares was accounted for as debt extinguishment and a gain was recorded in 2018. No interest accrues on the unpaid balance. 100,000 100,000 Secured short term note payable dated November 6, 2017 with principal and interest due 60 days from issuance. The note requires a one-time fee in the amount of $ 5,000 to compensate for the first two weeks of the term and each week thereafter (weeks 3-8) a fee of $ 400 shall be due and owing accruing on the first day of the week. The total one-time fee paid was $ 7,400 and was recorded as interest. A fee of 50,000 shares of restricted common stock shall be issued as a penalty for each month or prorated for any two-week portion of any month the note is outstanding past the original maturity date for months 3 through 6, and a fee of 100,000 shares of restricted common stock shall be issued to lender for each month or prorated for each two-week portion of any month the note is outstanding past the original maturity date beginning in month 7 until paid in full. The note is secured by the future sale of CoronaLux units and a personal guarantee of an officer of the Company. The penalty period for shares to be issued has been reached, however, the debt holder agreed to a reduced and fixed amount of penalty shares during 2018. No additional shares will be issued by the Company. The reduction of penalty shares was accounted for as debt extinguishment and a gain was recorded in 2018. No interest accrues on the unpaid balance. 125,000 125,000 Note payable dated November 20, 2017, interest at 30 % per annum, principal and accrued interest due on or before February 28, 2018 . The note is unsecured. During 2018, a verbal agreement was made to allow month-to-month extension of the due date as long as interest payments were made monthly. The Company made interest payments totaling $ 84,100 of which $ 37,726 of interest and principal reduction of $ 1,900 was paid by the issuance of 140,000 shares of common stock during 2018 and the note holder has continued to extend the due date . Unpaid interest at December 31, 2022 is approximately $ 375,700 . 297,000 298,100 F- 18 Secured short term note payable dated February 1, 2019 with principal and interest due 90 days from issuance. The note requires a one-time fee in the amount of $15,000 to compensate for the first two weeks of the term and each week thereafter (weeks 3-12) a fee of $ 1,500 shall be due and owing accruing on the first day of the week. The total one-time fee totals $ 30,000 and was recorded as interest. A fee of 50,000 shares of restricted common stock shall be issued as a penalty for each month or prorated for any two-week portion of any month the note is outstanding past the original maturity date for months 4 through 6, and a fee of 100,000 shares of restricted common stock shall be issued to lender for each month or prorated for each two-week portion of any month the note is outstanding past the original maturity date beginning in month 7 until paid in full . The note is secured by the future sale of any and all PelleChar products and a personal guarantee of an officer of the Company. The penalty period for shares to be issued has been reached, and the maximum agreed common shares have been accrued, and has been recorded as interest expense in prior periods. Unpaid one-time fees at December 31, 2022 is approximately $ 30,000 . 500,000 500,000 Secured short term note payable dated July 2, 2019 with principal and interest due 60 days from issuance. The note requires a one-time issuance of 500,000 options, which the company recorded the fair value of $ 37,300 as debt discount, amortized over the life of the note. The note accrues interest at 12 % annually. The note is past due as the date of this filing. The Company has not received notice from the lender and continue to accrue interest. For the year ended December 31, 2022, the Company recorded interest expense of $ 12,000 . Unpaid interest at December 31, 2022 is approximately $ 30,000 . 100,000 100,000 Secured short term note payable dated July 18, 2019 with principal and interest due 60 days from issuance. The note requires a one-time fee in the amount of $ 5,000 to compensate for the first two weeks of the term and each week thereafter (weeks 3-12) a fee of $ 500 shall be due and owing accruing on the first day of the week and was recorded as interest. A fee of 15,000 shares of restricted common stock shall be issued as a penalty for each month or prorated for any two-week portion of any month the note is outstanding past the original maturity date for months 3 through 6, and a fee of 30,000 shares of restricted common stock shall be issued to lender for each month or prorated for each two-week portion of any month the note is outstanding past the original maturity date beginning in month 7 until paid in full . The note is secured by the future sale of any and all MV Technology, LLC products. The penalty period for shares to be issued has been reached, and the maximum agreed common shares have been accrued, and has been recorded as interest expense in prior periods. Unpaid interest at December 31, 2022 is approximately $ 10,000 . 150,000 150,000 Secured short term note payable dated October 17, 2019 with principal and interest due 6 months from issuance. On April 24, 2020, this note was extended to October 15, 2020. The note requires a one-time issuance of 200,000 common shares of the Company upon the maturity date of the note, which the company recorded the fair value of $ 13,000 as debt discount, amortized over the life of the note. The note extension requires a one-time issuance of 200,000 common shares of the Company upon the extended maturity date of the note, which the company recorded the fair value of $ 20,000 as debt discount, amortized over the life of the note. On November 3, 2020, this note was extended to October 15, 2021. The note is past due as the date of this filing. The note accrues interest at 15 % annually. For the year ended December 31, 2022, the Company recorded interest expense of $ 45,000 . Unpaid interest at December 31, 2022 is approximately $ 144,500 . 300,000 300,000 Secured short term note payable dated December 14, 2019 with principal and interest due 6 months from issuance. The note requires a one-time issuance of 250,000 common shares of the Company upon the maturity date of the note, which the company recorded the fair value of $ 16,300 as debt discount, amortized over the life of the note. The note accrues interest at 15 % annually. The note is past due as the date of this filing. For the year ended December 31, 2022, the Company recorded interest expense of $ 67,500 . Unpaid interest at December 31, 2022 is approximately $ 205,800 . 450,000 450,000 Secured short term note payable dated October 1, 2019. The note accrues interest at 6 % annually. The note’s principal is to be paid in twelve monthly installments commencing on January 15, 2020. In 2021, an extension was negotiated with the lender. In 2022 the lender’s note balance of $50m800 and $ 15,400 of accrued interest was paid by the repurchase of units the Company held in the lender. - 50,800 F- 19 Secured short term note payable dated March 16, 2020, maturing on March 15, 2021 . The note bears annual simple interest, at a rate of 14 %, and matures on March 15, 2021. The Lender receives a one-time option grant to purchase 60,000 shares of the Company’s common stock for $ 0.10 per share for a period of 3 years from grant date, on the maturity date, with payment of principal and interest. These options were value at approximately $ 3,500 , and are recorded as debt discount, and amortized over the life of the loan. The note is past due as the date of this filing. For the year ended December 31, 2022, the Company recorded interest expense of $ 14,000 , and $ 800 of interest related to debt discount. Unpaid interest at December 31, 2022 is approximately $ 39,100 . 100,000 100,000 Secured short term note payable dated March 17, 2020, maturing on March 16, 2021 . The note bears annual simple interest, at a rate of 14 %. The Lender receives a one-time option grant to purchase 30,000 shares of the Company’s common stock for $ 0.10 per share for a period of 3 years from grant date, on the maturity date, on the maturity date, with payment of principal and interest. These options were value at approximately $ 2,000 , and are recorded as debt discount, and amortized over the life of the loan. The note is past due as the date of this filing. For the year ended December 31, 2022, the Company recorded interest expense of $ 7,000 . Unpaid interest at December 31, 2022 is approximately $ 19,500 . 50,000 50,000 Secured short term note payable dated July 8, 2020, maturing on December 7, 2020 , bearing annual simple interest at a rate of 15 %. The note requires a one-time issuance of 200,000 common shares of the Company upon the maturity date of the note, which the company recorded the fair value of $ 11,300 as debt discount, amortized over the life of the note. The note is past due as the date of this filing. For the year ended December 31 2022, the Company recorded interest expense of $ 33,000 . Unpaid interest at December 31, 2022 is approximately $ 81,900 220,000 220,000 Unsecured short term note payable dated August 18, 2020, maturing on November 17, 2020 , bearing annual simple interest at a rate of 15 %. The note is past due as the date of this filing. For theyear ended December 31, 2022, the Company recorded interest expense of $ 18,000 . Unpaid interest at December 31, 2022 is approximately $ 42,600 . 120,000 120,000 Secured short term note payable dated September 3, 2020, maturing on December 4, 2020 , bearing annual simple interest at a rate of 15 %. The note is past due as the date of this filing. For the year ended December 31, 2022, the Company recorded interest expense of $ 42,000 . Unpaid interest at December 31, 2022 is approximately $ 97,700 . 280,000 280,000 A secured note payable of $ 500,000 dated August 15, 2022 , secured by net revenue from sale of any and all MV Technology products, bearomg interest at an annual rate of 10 % simple interest and matures on August 15, 2023. Monthly payments of $ 25,000 a month on the last day of the third month and continue in months four and five. At the end of the sixth month monthly payments in the amount of $ 50,000 and continue until the end month twelve at which time all outstanding principal and interest shall be due. For the year ended December 31, 2022 the company recorded interest expense of $ 18,800 . Unpaid interest at December 31, 2022 was approximately $ 18,800 . 500,000 - An unsecured note of $ 100,000 payable, dated July 20, 2022, interest at an annual rate of 8 % payable on or before July 19, 2023. For the year ended December 31, 2022 the Copmany recorded interest expense of $ 3,600 . Unpaid interest at December 31, 2022 was approximately $ 3,600 . 100,000 - Secured short term note payable dated November 17, 2022, interest at an annual rate of 12 % payable on or before February 17, 2023. Unpaid interest at December 31, 2022 was approximately $ 5,000 . 125,000 - Total Short-term notes $ 3,517,000 $ 2,843,900 F- 20 Secured short term note payable dated August 21, 2019 with principal and interest due 60 days from issuance. The note requires a one-time fee in the amount of $ 4,150 to compensate for the first two weeks of the term and each week thereafter (weeks 3-8) a fee of $ 415 shall be due and owing accruing on the first day of the week, after which the fee is $ 600 per week, which is recorded as interest expense. The note is from a family member of the CEO, and thus classified as a related party note. For the year ended December 31, 2021, the Company recorded interest expense of $ 28,800 . Unpaid interest as of December 31, 2021 is approximately $ 55,200 . 125,000 125,000 Total short-term notes - related party $ 125,000 $ 125,000 Convertible notes payable, interest at 8 % per annum, unpaid principal and interest maturing 3 years from note date between August 2018 and October 2019, convertible into common stock at the option of the lenders at a rate of $ 0.70 per share; one convertible note for $ 250,000 has a personal guarantee of an officer of the Company. The notes that matured in August 2018, were subsequently extended by one year to August 2019, all other terms remained the same. The note that matured November 2018 was subsequently extended to May 2019 and the interest rate increased to 13 % per annum. No default notice has been received from the noteholders. For the year ended December 31, 2022, the Company recorded interest expense of $ 155,300 . Unpaid interest at December 31, 2022 is approximately $ 666,700 . $ 1,605,000 $ 1,605,000 Total convertible notes 1,605,000 1,605,000 Less: current portion ( 1,605,000 ) ( 1,605,000 ) Long term convertible notes, including debt discount $ - $ - F- 21 LONG TERM NOTES Note payable dated July 13, 2018, interest at 20 % per annum, payable July 13, 2021. No monthly payments are due for the first six months, commencing in month seven, principal and accrued interest will be amortized and payable over the remaining 30 months. Monthly payments of principal and accrued interest did not commence in 2019. The note is secured by all assets of SEM and personally guaranteed by an officer of the Company. A fee of 200,000 shares of restricted common stock was issuable at the time of funding. During the year ended December 31, 2018, the Company recorded 200,000 shares of its common stock as issuable under the terms of this agreement. The shares were valued at $ 44,000 recorded as debt discount. For the year ended December 31, 2022, the Company recorded interest expense of $ 100,000 . Unpaid interest at December 31, 2022 was approximately $ 446,600 . $ 500,000 $ 500,000 Note payable dated April 2020, interest at 6.8 % per annum, secured by a piece of heavy equipment, of which the borrowing was used to purchase. Forty-eight monthly payments of principal and accrued interest of $ 2,400 , commence on April 17, 2020. For the year ended December 31, 2022, the Company recorded interest expense of $ 2,600 . 34,600 60,200 Note payable dated January 19, 2021, interest at an annual rate of 8 % simple interest and matures on January 18, 2026 . 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., in accordance with the note’s provisions. For the year ended December 31, 2022, the Company recorded interest expense of $ 12,000 Unpaid interest at December 31, 2022 was approximately $ 23,400 150,000 150,000 Note payable dated February 2, 2021, interest at an annual rate of 8 % simple interest and matures on January 18, 2026 . 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., in accordance with the note’s provisions. For the year ended December 31, 2022, the Company recorded interest expense of $ 40,000 . Unpaid interest at December 31, 2021 was approximately $ 76,400 . 500,000 500,000 Note payable dated May 25, 2021, interest at an annual rate of 8 % simple interest and matures on January 18, 2026 . 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., in accordance with the note’s provisions. For the year ended December 31, 2022, the Company recorded interest expense of $ 14,800 . Unpaid interest at December 31, 2022 was approximately $ 23,300 . 185,000 185,000 Note payable dated August 5, 2021, interest at an annual rate of 8 % simple interest and matures on January 18, 2026 . 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., in accordance with the note’s provisions. For the year ended December 31, 2022, the Company recorded interest expense of $ 40,000 . Unpaid interest at December 31, 2022 was approximately $ 55,900 . 500,000 500,000 Note payable dated November 2, 2021, interest at an annual rate of 8 % simple interest and matures on January 18, 2026 . 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., in accordance with the note’s provisions. For the year ended December 31, 2022, the Company recorded interest expense of $ 20,000 . Unpaid interest at December 31, 2021 was approximately $ 23,300 . 250,000 250,000 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 year ended December 31, 2022, the Company recorded interest expense of $ 17,800 . Unpaid interest at December 31, 2022 was approximately $ 17,800 . 250,000 - Other 10,800 Total long-term notes 2,380,400 2,145,200 Less: current portion ( 531,300 ) ( 525,600 ) Long term notes, long-term, including debt discount $ 1,849,100 $ 1,619,600 F- 22 Debt maturities as of December 31, 2022, are as follows: SCHEDULE OF DEBT MATURITIES Year Ending December 31, 2022(Past Due) $ 3,290,300 2023 759,500 2024 11,400 2025 1,200 2026 1,835,000 Thereafter - Debt maturities $ 5,897,400 NOTE 12 – RELATED PARTY TRANSACTIONS NOT DISCLOSED ELSEWHERE Notes payable and accrued interest, related parties Notes payable (See Note 11), and accrued interest due to certain related parties as of December 31, 2022, and 2021 are as follows: SCHEDULE OF RELATED PARTIES NOTES PAYABLE AND ACCRUED INTEREST December 31, December 31, 2022 2021 Short term notes $ 125,000 $ 125,000 Accrued interest 59,000 55,800 Total short-term notes and accrued interest - Related parties $ 184,000 $ 180,800 NOTE 13 - COMMITMENTS AND CONTINGENCIES Operating Lease Commitments Future commitments under non-cancellable operating leases with terms longer than one year for office and warehouse space as of December 31, 2022, are as follows: SCHEDULE OF FUTURE COMMITMENTS UNDER NON-CANCELLABLE OPERATING LEASES Year Ending December 31, 2023 $ 88,300 2024 90,900 2025 93,600 2026 64,000 2027 - Thereafter - $ 336,800 For the years ended December 31, 2022, and 2021, rent expense, including prorated charges and net of sub-lease income, was $ 141,400 and $ 145,600 , respectively. F- 23 NOTE 14 – 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. The abandonment resulted in a gain to the Company of approximately $ 1.5 million for the year ended December 31, 2021. For the years ended December 31, 2021, and 2020, all operations from REGS have been reported as discontinued operations. Major classes of line items constituting the balance sheet on discontinued operations: SCHEDULE OF CONSTITUTING BALANCE SHEET AND PRETAX INCOME (LOSS) ON DISCONTINUED OPERATIONS September 30, 2021 ASSETS Cash and cash equivalents $ - Inventory - Prepaid expenses and other current assets - Property and equipment, net - Right of use assets - Other assets 18,900 TOTAL ASSETS $ 18,900 LIABILITIES Accounts payable $ 169,100 Accrued liabilities 220,800 Payroll taxes payable 1,076,800 Customer deposits 10,200 Paycheck protection program liabilities - Current portion of lease liabilities - Accrued interest - related party - TOTAL LIABILITIES $ 1,476,900 Major classes of line items constituting pretax income (loss) on discontinued operations: For the year ended December 31, 2021 Services revenue $ 177,200 Services costs ( 314,900 ) General and administrative expenses ( 40,800 ) Salaries and related expenses ( 150,800 ) Other income 210,800 Gain on debt extinguishment 410,600 Total expenses 114,900 Operating income 292,100 Income tax benefit - Total income from discontinued operations $ 292,100 The net assets and liabilities disposed of, resulting in the gain on the abandonment, are summarized in the following table: SCHEDULE OF NET ASSETS AND LIABILITIES DISPOSED OF RESULTING IN THE GAIN ON THE ABANDONMENT Year Ended December 31, 2021 Assets, net ( 18,900 ) Liabilities - Other, net including intercompany assets 391,500 IRS payroll tax liability 1,085,400 Gain on abandonment 1,458,000 NOTE 15 – EQUITY TRANSACTIONS 2022 Common Stock Transactions During the year ended December 31, 2022, no new equity transactions have occurred. F- 24 2021 Common Stock Transactions During the year ended December 31, 2021, no new equity transactions have occurred. Non-controlling Interest The non-controlling interest presented in our condensed consolidated financial statements reflects a 46 % non-controlling equity interest in PWS, a 49 % non-controlling equity interest in PelleChar, and a 15 % non-controlling interest in Benefuels . Net losses attributable to non-controlling interest, as reported on our condensed consolidated statements of operations, represents the net loss of each entity attributable to the non-controlling equity interest. The non-controlling interest is reflected within stockholders’ equity on the condensed consolidated balance sheet. Warrants In 2022 and 2021, no warrants were issued. A summary of warrant activity for the years ended December 31, 2022, and December 31, 2021, is presented as follows: SCHEDULE OF WARRANT ACTIVITY Weighted Weighted Average Average Remaining Exercise Number of Contractual Price Warrants Term in Years Balance as of December 31, 2020 $ 0.74 271,000 1.5 Granted - - Exercised - - Cancelled 0.85 ( 71,000 ) - Balance as of December 31, 2021 $ 0.70 200,000 0.7 Granted - - Exercised - - Cancelled - - - Balance as of December 31, 2022 $ 0.70 200,000 0.3 Vested and exercisable as of December 31, 2022 $ 0.70 200,000 0.3 NOTE 16 – STOCK-BASED COMPENSATION AND EMPLOYEE BENEFIT PLAN Except as noted below, we do not have a qualified stock option plan, but have issued stock purchase warrants and stock options on a discretionary basis to employees, directors, service providers, private placement participants and outside consultants. The Company utilizes ASC 718, Stock Compensation, related to accounting for share-based payments and, accordingly, records compensation expense for share-based awards based upon an assessment of the grant date fair value for stock options and restricted stock awards. The Black Scholes option pricing model was used to estimate the fair value of the options granted. This option pricing model requires a number of assumptions, of which the most significant are the expected stock price volatility and the expected option term (the amount of time from the grant date until the options are exercised or expire). The Company does not estimate forfeitures, and accounts for forfeitures as they occur. The Company estimated a volatility factor utilizing a weighted average of comparable published volatilities. The Company applied the simplified method to determine the expected term of all stock-based compensation grants. The risk-free interest rate is based on or approximates the U.S. Treasury yield curve in effect at the time of the grant. F- 25 Stock compensation expense for stock options is recognized on a straight-line basis over the vesting period of the award. The Company accounts for stock options as equity awards. A summary of stock option activity for the year ended December 31, 2022, and 2021 is presented as follows: SCHEDULE OF STOCK OPTION ACTIVITY Weighted Weighted Average Average Weighted Remaining Optioned Average Number of Contractual Grant Aggregate Exercise Optioned Term in Date Intrinsic Price Shares Years Fair Value Value Balance as of December 31, 2020 $ 0.66 1,640,000 2.83 $ 0.04 $ - Granted - - - Exercised - - - Cancelled/expired 0.60 ( 50,000 ) 0.19 Balance as of December 31, 2021 $ 0.67 1,590,000 1.91 $ 0.04 $ - Granted - - - Exercised - - - Cancelled/expired 0.70 ( 500,000 ) 0.03 Balance as of December 31, 2022 $ 0.65 1,090,000 1.55 $ 0.04 $ - Vested and exercisable as ofDecember 31, 2022 $ 0.65 1,090,000 1.55 $ 0.04 $ - For the years ended December 31, 2022, and 2021, we recorded stock-based compensation awarded to employees of $ 0 and $ 12,600 , respectively, which is included in selling, general and administrative expense in our consolidated statements of operations. As of December 31, 2021, there was no unrecognized compensation cost related to non-vested stock options. F- 26 Employee Benefit Plan The Company has a defined contribution 401(k) plan that covers substantially all employees. Additionally, at the discretion of management, the Company may make contributions to eligible participants, as defined. During the years ended December 31, 2022, and 2021, we made no contributions in each year. NOTE 17 – NET EARNINGS (LOSS) PER SHARE Basic net loss per share is computed by dividing net loss attributable to common shareholders by the weighted average number of common shares outstanding. 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. For the year ended December 31, 2022, all potentially dilutive securities were excluded from the diluted share calculations as they were anti-dilutive as a result of the net loss incurred. Accordingly, basic shares equal diluted shares for the year ended December 31, 2022. As of December 31, 2021, 90,000 potentially dilutive stock options were included in the diluted earnings per share calculation. Potentially dilutive securities were comprised of the following: SCHEDULE OF POTENTIALLY DILUTIVE SECURITIES 2022 2021 Years Ended December 31, 2022 2021 Warrants 0 200,000 Options 1,090,000 1,500,000 Convertible notes payable, including accrued interest 3,292,400 3,070,900 Potentially dilutive securities 4,382,400 4,770,900 NOTE 18 - SEGMENT INFORMATION AND MAJOR SEGMENT CUSTOMERS The Company currently has identified two segments as follows: MV, SEM, PelleChar, Environmental Solutions PWS Solid Waste The composition of our reportable segments is consistent with that used by our chief decision makers to evaluate performance and allocate resources. All of our operations are located in the U.S. The Company has not allocated corporate selling, general and administrative expenses, and stock-based compensation to the segments. All intercompany transactions have been eliminated. F- 27 Segment information as of December 31, 2022, and 2021 and for the years then ended is as follows: SCHEDULE OF SEGMENT INFORMATION Year ended December 31, 2022 Environmental Solid Solutions Waste Corporate Total Revenue $ 4,037,900 $ 100,000 $ - $ 4,137,900 Depreciation and amortization (1) 45,100 14,700 11,000 70,800 Impairment loss - goodwill 277,800 - - 277,800 Impairment loss - other intangible assets 41,900 - - 41,900 Interest expense 4,400 12,000 789,700 806,100 Net income (loss) ( 586,300 ) ( 213,100 ) ( 1,912,100 ) ( 2,711,500 ) Capital expenditures (cash and noncash) 31,800 - - 31,800 Total assets $ 1,103,400 $ 100 $ 540,900 $ 1,644,400 2021 Environmental Solid Solutions Waste Corporate Total Revenue $ 3,238,300 $ 240,100 $ - $ 3,478,400 Depreciation and amortization (1) 68,300 34,000 31,700 134,000 Interest expense 1,500 300 736,800 738,600 Stock-based compensation - - 12,600 12,600 Net income (loss) 413,000 437,600 ( 330,900 ) 519,700 Capital expenditures (cash and noncash) 3,000 - - 3,000 Total assets $ 1,359,200 $ 305,400 $ 572,600 $ 2,237,200 (1) Includes depreciation of property, equipment and leasehold improvement and amortization of intangibles. NOTE 19 - INCOME TAXES As of December 31, 2022, we estimate we will have net operating loss carryforwards available to offset future federal income tax of approximately $ 24.4 million. These carryforwards will expire between the years 2028 through 2037 . Under the Tax Reform Act of 1986, the amount of and the benefit from net operating losses that can be carried forward may be limited in certain circumstances. Events that may cause changes in our tax carryovers include, but are not limited to, a cumulative ownership change of more than 50% over a three-year period. Therefore, the amount available to offset future taxable income may be limited. We carry a deferred tax valuation allowance equal to 100% of total deferred assets. In recording this allowance, we have considered a number of factors, but chiefly, our operating losses from inception. We have concluded that a valuation allowance is required for 100% of the total deferred tax assets as it is more likely than not that the deferred tax assets will not be realized. F- 28 The non-current deferred tax asset is summarized below: SCHEDULE OF NON-CURRENT DEFERRED TAX ASSETS 2022 2021 Deferred tax assets Net operating loss carry forwards $ 6,245,000 $ 5,557,000 Intangible and fixed assets $ 75,000 Other 50,000 30,000 Total deferred tax assets 6,370,000 5,587,000 Deferred tax liabilities Depreciation and amortization - ( 107,000 ) Valuation allowance ( 6,370,000 ) ( 5,480,000 ) Net deferred tax asset $ - $ - The benefit for income taxes differed from the amount computed using the U.S. federal income tax rate of 21 % for December 31, 2022 and 2021, as follows: SCHEDULE OF COMPONENTS OF INCOME TAX EXPENSE (BENEFIT) 2022 2021 Income tax benefit $ 570,000 $ ( 69,000 ) Non-deducible items ( 18,000 ) ( 142,000 ) State and other benefits included in valuation 103,000 16,000 Provision to return adjustments 55,000 Impairment of intangible assets 82,000 Exclusion of income (losses) of pass-through entity 55,000 52,000 Other 43,000 - Change in valuation allowance ( 890,000 ) 143,000 Income tax benefit $ - $ - NOTE 20 – ENVIRONMENTAL COMPLIANCE Significant federal environmental laws affecting us are the Resource Conservation and Recovery Act (“RCRA”), the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), also known as the “Superfund Act”, the Clean Air Act, the Clean Water Act and the Toxic Substances Control Act (“TSCA”). Pursuant to the EPA’s authorization of the RCRA equivalent programs, a number of states have regulatory programs governing the operations and permitting of hazardous waste facilities. Our facilities are regulated pursuant to state statutes, including those addressing clean water and clean air. Our facilities are also subject to local siting, zoning and land use restrictions. We believe we are in substantial compliance with all federal, state and local laws regulating our business. NOTE 21 – EMPLOYEE RETENTION CREDIT During the year ended December 31, 2021, the Company applied for certain Employee Retention Credits (“ERTC”) under the CARES Act in the approximate amount of $ 0.2 million, which is reflected within the statement of operations as a reduction to salaries and related expenses. The remaining balance of the ERTC receivable as of December 31, 2022 was $ 0 . NOTE 22 – SUBSEQUENT EVENTS In March 2023, the Company received proceeds of $ 300,000 by issuing a secured promissory note, bearing interest at a rate of 8 % per annum, and maturing in November 2023 . F- 29