Strategic Environmental & Energy Resources, Inc. (Form: 10-12B, Received: 05/21/2013 13:22:04)

Strategic Environmental & Energy Resources, Inc. 10-12b

EXHIBIT 10.3

ACQUISITION AGREEMENT

DATED AS OF

JANUARY 9, 2008

BY AND AMONG

REGS, LLC, TACTICAL CLEANING COMPANY, LLC

STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

AND

INFINITY CAPITAL GROUP, INC.

AGREEMENT AND PLAN OF ACQUISITION

This ACQUISITION AGREEMENT, is dated as of January 9, 2008 (this “Agreement”), by and among INFINITY CAPITAL GROUP, INC., a Maryland corporation (“ICG”), STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC. a Nevada corporation and partially-owned subsidiary of ICG (“Acquisition SEER”), and REGS, LLC and TACTICAL CLEANING COMPANY, LLC, both of which are Colorado Limited Liability Companies, (“collectively hereafter called REGS where not otherwise designated as REGS and Tactical respectively”).

WHEREAS, the boards of directors of ICG, SEER, and REGS, respectively, have each approved, as being in the best interests of the respective corporations and LLCs and their stockholders and interest holders, the acquisition of the REGS LLCs (the “Acquisition”) by SEER, in accordance with the applicable provisions of the Nevada Revised Statutes (the “NRS”) and the Colorado Revised Statutes (the “CRS”);

WHEREAS, pursuant to the Acquisition, each interest holder of R EGS and Tactical shall, in accordance with the provisions of this Agreement, allow their interests to be acquired for a number of shares of SEER common stock, no par value (“SEER Common Stock”), equal to the Conversion Amount;

WHEREAS, a reverse stock split of SEER Common Stock has been consummated on a one for four basis; pursuant to which each four (4) outstanding shares of SEER Common Stock has been converted into one (1) share of SEER Common Stock (the “Reverse Stock Split”);

WHEREAS, for federal income tax purposes, it is intended that the Acquisition shall qualify as a tax free transfer to a controlled corporation under the provisions of Section 351 of the Internal Revenue Code of 1986, as amended (the “Code”);

WHEREAS, ICG, SEER, and REGS desire to make certain representations, warranties, covenants, and agreements in connection with the Acquisition and also to prescribe various conditions to the Acquisition; and

WHEREAS, this Agreement is intended to set forth the terms upon which REGS will be acquired by SEER;

WHEREAS, ICG, SEER, and REGS are in agreement that so long as the substance of this transaction does not materially change the mechanics of the Agreement may be restructured to achieve desired tax objectives;

NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants, and agreements set forth herein, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound hereby, the parties do hereby agree as follows:

THE ACQUISITION

1. Effects of the Acquisition.

1.1 AT THE TIME OF CLOSING (AS DEFINED IN SECTION 2.01) AND BY VIRTUE OF THE ACQUISITION, ALL OF THE ISSUED AND OUTSTANDING REGS OWNERSHIP INTERESTS SHALL BE ACQUIRED AS PROVIDED IN SECTION 1.03.

1.2 WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, AND SUBJECT THERETO AND TO ANY OTHER APPLICABLE LAWS, AT THE TIME OF CLOSING, ALL THE PROPERTIES, RIGHTS, PRIVILEGES, POWERS, AND FRANCHISES OF REGS AND SEER SHALL BE OWNED BY SEER ON A CONSOLIDATED BASIS, AND, SUBJECT TO THE TERMS OF THIS AGREEMENT, ALL DEBTS, LIABILITIES, RESTRICTIONS, DISABILITIES, AND DUTIES OF REGS AND SEER SHALL REMAIN AS THEY ARE PRIOR TO THE ACQUISITION. SEER HAS CHANGED ITS NAME TO STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC. AND HAS APPLIED FOR A NEW TRADING SYMBOL.

2. Conversion of Securities.

As of the time of Closing, by virtue of the Acquisition and without any action on the part of any holder thereof:

2.1 EACH OWNERSHIP INTEREST IN REGS THAT IS ISSUED AND OUTSTANDING IMMEDIATELY PRIOR TO THE CLOSING, OTHER THAN OWNERSHIP INTERESTS THAT ARE OWNED BY INTEREST HOLDERS WHO HAVE NOT CONSENTED TO THE ACQUISITION AND WHO HAVE OTHERWISE TAKEN ALL OF THE STEPS REQUIRED BY THE CRS TO PROPERLY EXERCISE AND PERFECT SUCH OWNERSHIP HOLDERS’ DISSENTERS’ RIGHTS (THE “DISSENTING INTERESTS”) SHALL, EXCEPT AS SET FORTH BELOW, BE ACQUIRED FOR THAT NUMBER OF SHARES OF SEER COMMON STOCK EQUAL TO THE CONVERSION AMOUNT. ALL SUCH REGS OWNERSHIP INTERESTS SHALL BE OWNED BY SEER IN CONSIDERATION THEREFOR UPON SURRENDER FOR ACQUISITION OF EACH SUCH CERTIFICATE IN ACCORDANCE WITH SECTION 1.03.

2.2 EACH OWNERSHIP INTEREST IN REGS THAT IS ISSUED AND OUTSTANDING IMMEDIATELY PRIOR TO THE CLOSING SHALL BE ACQUIRED FOR THE SHARES OF COMMON STOCK OF SEER SET FORTH ON THE CAPITALIZATION TABLE (SCHEDULE 1.02(B) TO THIS AGREEMENT), AND EACH CERTIFICATE EVIDENCING OWNERSHIP OF ANY SUCH OWNERSHIP INTERESTS OF REGS SHALL THEREUPON EVIDENCE OWNERSHIP OF THE SAME OWNERSHIP INTERESTS IN REGS, BUT WILL BE HELD BY SEER.

2.3 EACH OUTSTANDING OPTION AND WARRANT TO PURCHASE ANY INTEREST IN REGS (EACH A “REGS OPTION OR WARRANT” AND, COLLECTIVELY, “REGS OPTIONS AND WARRANTS”) WHETHER VESTED OR UNVESTED, SHALL BE ASSUMED BY SEER, ON A SHARE-FOR-SHARE BASIS. EACH REGS OPTION AND WARRANT SO ASSUMED BY SEER UNDER THIS AGREEMENT WILL CONTINUE TO HAVE, AND BE SUBJECT TO, THE SAME TERMS AND CONDITIONS OF SUCH REGS OPTION AND WARRANT, AS THE CASE MAY BE, IMMEDIATELY PRIOR TO THE CLOSING (INCLUDING WITHOUT LIMITATION, ANY REPURCHASE RIGHTS OR VESTING PROVISIONS AND PROVISIONS REGARDING THE ACCELERATION OF VESTING ON CERTAIN TRANSACTIONS, OTHER THAN THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT), EXCEPT THAT (I) EACH REGS OPTION OR WARRANT, AS THE CASE MAY BE, WILL BE EXERCISABLE (OR WILL BECOME EXERCISABLE IN ACCORDANCE WITH ITS TERMS) FOR THAT NUMBER OF WHOLE SHARES OF SEER COMMON STOCK EQUAL TO THE NUMBER OF SHARES OF SEER SET FORTH ON SCHEDULE 1.02(B), , AND (II) THE PER SHARE EXERCISE PRICE FOR THE SHARES OF SEER COMMON STOCK ISSUABLE UPON EXERCISE OF SUCH ASSUMED REGS OPTION OR WARRANT, AS THE CASE MAY BE, WILL BE EQUAL TO THE EXERCISE PRICE PER SHARE OF REGS COMMON STOCK AT WHICH SUCH REGS OPTION OR WARRANT, WAS EXERCISABLE IMMEDIATELY PRIOR TO THE CLOSING, ROUNDED DOWN TO THE NEAREST WHOLE CENT.

3. Acquisition Procedures.

3.1 AS SOON AS PRACTICABLE AFTER THE CLOSING, SEER SHALL MAIL TO EACH REGS INTEREST HOLDER A LETTER OF TRANSMITTAL AND INSTRUCTIONS FOR USE IN EFFECTING THE SURRENDER OF CERTIFICATES REPRESENTING OWNERSHIP INTERESTS IN REGS OUTSTANDING IMMEDIATELY PRIOR TO THE CLOSING (THE “CERTIFICATES”) IN APPROPRIATE AND CUSTOMARY FORM WITH SUCH PROVISIONS AS THE BOARD OF DIRECTORS OF SEER INCIDENT TO THE ACQUISITION MAY SPECIFY. UPON SURRENDER OF A CERTIFICATE FOR ACQUISITION TO SEER, TOGETHER WITH SUCH LETTER OF TRANSMITTAL, DULY AND PROPERLY EXECUTED, THE HOLDER OF SUCH CERTIFICATE SHALL BE ENTITLED TO RECEIVE IN EXCHANGE THEREFORE A CERTIFICATE REPRESENTING THAT NUMBER OF SHARES OF SEER COMMON STOCK SET FORTH ON SCHEDULE 1.02(B),

TOGETHER WITH ANY DIVIDENDS AND OTHER DISTRIBUTIONS PAYABLE AS PROVIDED IN SECTION 1.04 HEREOF, AND THE CERTIFICATE SO SURRENDERED SHALL BE CANCELED AND RE-ISSUED IN THE NAME OF SEER. UNTIL SURRENDERED AS CONTEMPLATED BY THIS SECTION 1.03, EACH CERTIFICATE SHALL, AT AND AFTER THE CLOSING, BE DEEMED TO REPRESENT ONLY THE RIGHT TO RECEIVE, UPON SURRENDER OF SUCH CERTIFICATE, SEER COMMON STOCK AS CONTEMPLATED BY THIS SECTION 1.03, TOGETHER WITH ANY DIVIDENDS AND OTHER DISTRIBUTIONS PAYABLE AS PROVIDED IN SECTION 1.04, AND THE HOLDERS THEREOF SHALL HAVE NO RIGHTS WHATSOEVER AS STOCKHOLDERS OF SEER. SHARES OF SEER COMMON STOCK ISSUED IN THE ACQUISITION SHALL BE ISSUED, AND BE DEEMED TO BE OUTSTANDING, AT THE TIME OF CLOSING. SEER SHALL CAUSE ALL SUCH SHARES OF SEER COMMON STOCK ISSUED PURSUANT TO THE ACQUISITION TO BE DULY AUTHORIZED, VALIDLY ISSUED, FULLY PAID AND NON-ASSESSABLE AND NOT SUBJECT TO PREEMPTIVE RIGHTS.

3.2 IF ANY CERTIFICATE REPRESENTING SHARES OF SEER COMMON STOCK IS TO BE ISSUED IN A NAME OTHER THAN THAT IN WHICH THE CERTIFICATE SURRENDERED IN EXCHANGE THEREFORE IS REGISTERED, IT SHALL BE A CONDITION OF SUCH EXCHANGE THAT THE CERTIFICATE SO SURRENDERED SHALL BE PROPERLY ENDORSED AND OTHERWISE IN PROPER FORM FOR TRANSFER AND THAT THE PERSON REQUESTING SUCH EXCHANGE SHALL PAY ANY TRANSFER OR OTHER TAXES REQUIRED BY REASON OF THE ISSUANCE OF CERTIFICATES FOR SUCH SHARES OF SEER COMMON STOCK IN A NAME OTHER THAN THAT OF THE REGISTERED HOLDER OF THE CERTIFICATE SO SURRENDERED.

3.3 IN THE EVENT ANY CERTIFICATE SHALL HAVE BEEN LOST, STOLEN OR DESTROYED, UPON THE MAKING OF AN AFFIDAVIT OF THAT FACT BY THE PERSON CLAIMING SUCH CERTIFICATE TO BE LOST, STOLEN OR DESTROYED AND UPON THE POSTING BY SUCH PERSON OF A BOND IN SUCH AMOUNT AS SEER MAY REASONABLY DIRECT AS AN INDEMNITY AGAINST ANY CLAIM THAT MAY BE MADE AGAINST IT WITH RESPECT TO SUCH CERTIFICATE, SEER WILL ISSUE IN RESPECT OF SUCH LOST, STOLEN OR DESTROYED CERTIFICATE ONE OR MORE CERTIFICATES REPRESENTING SHARES OF SEER COMMON STOCK AS CONTEMPLATED BY THIS SECTION 1.03 AND SUCH PERSON SHALL BE ENTITLED TO THE DIVIDEND AND OTHER DISTRIBUTION RIGHTS PROVIDED IN SECTION 1.04 HEREOF.

3.4 IF ANY CERTIFICATES SHALL NOT HAVE BEEN SURRENDERED PRIOR TO THREE YEARS AFTER THE CLOSING (OR IMMEDIATELY PRIOR TO SUCH EARLIER DATE ON WHICH ANY PAYMENT IN RESPECT HEREOF WOULD OTHERWISE ESCHEAT OR BECOME THE PROPERTY OF ANY GOVERNMENTAL UNIT OR AGENCY), THE OPPORTUNITY FOR EXCHANGE WILL LAPSE AND NO LONGER BE AN OBLIGATION OF SEER.

3.5 SEER SHALL BE ENTITLED TO DEDUCT AND WITHHOLD FROM THE CONSIDERATION OTHERWISE PAYABLE PURSUANT TO THIS AGREEMENT TO ANY HOLDER OF A CERTIFICATE SURRENDERED FOR SHARES OF SEER COMMON STOCK (AND DIVIDENDS OR DISTRIBUTIONS WITH RESPECT TO SEER COMMON STOCK AS CONTEMPLATED BY SECTION 1.04 HEREOF) SUCH AMOUNT AS SEER IS REQUIRED TO DEDUCT AND WITHHOLD WITH RESPECT TO THE MAKING OF SUCH PAYMENT UNDER THE CODE, OR PROVISIONS OF ANY STATE, LOCAL OR FOREIGN TAX LAW. TO THE EXTENT THAT AMOUNTS ARE SO DEDUCTED AND WITHHELD, SUCH AMOUNTS SHALL BE TREATED FOR ALL PURPOSES OF THIS AGREEMENT AS HAVING BEEN PAID TO THE HOLDER OF SUCH CERTIFICATE.

4. Dividends and Distributions .

NO DIVIDENDS OR OTHER DISTRIBUTIONS DECLARED OR MADE WITH RESPECT TO SEER COMMON STOCK WITH A RECORD DATE ON OR AFTER THE CLOSING SHALL BE PAID TO THE HOLDER OF A CERTIFICATE ENTITLED BY REASON OF THE ACQUISITION TO RECEIVE CERTIFICATES REPRESENTING SEER COMMON STOCK UNTIL SUCH HOLDER SURRENDERS SUCH CERTIFICATE AS PROVIDED IN SECTION 1.03 HEREOF. UPON SUCH SURRENDER, THERE SHALL BE PAID BY SEER TO THE PERSON IN WHOSE NAME CERTIFICATES REPRESENTING SHARES OF SEER COMMON STOCK SHALL BE ISSUED PURSUANT TO THE TERMS OF THIS ARTICLE I (I) AT THE TIME OF THE SURRENDER OF SUCH CERTIFICATE, THE AMOUNT OF ANY DIVIDENDS AND OTHER DISTRIBUTIONS THERETOFORE PAID WITH RESPECT TO THAT NUMBER OF WHOLE SHARES OF SUCH SEER COMMON STOCK REPRESENTED BY SUCH SURRENDERED CERTIFICATE PURSUANT TO THE TERMS OF THIS ARTICLE I, WHICH DIVIDENDS OR OTHER DISTRIBUTIONS HAD A RECORD DATE ON OR AFTER THE CLOSING AND A PAYMENT DATE PRIOR TO SUCH SURRENDER AND (II) AT THE APPROPRIATE PAYMENT DATE, THE AMOUNT OF DIVIDENDS AND OTHER DISTRIBUTIONS PAYABLE WITH RESPECT TO THAT NUMBER OF WHOLE SHARES OF SEER COMMON STOCK REPRESENTED BY SUCH SURRENDERED CERTIFICATE PURSUANT TO THE TERMS OF THIS ARTICLE I, WHICH DIVIDENDS OR OTHER DISTRIBUTIONS HAVE A RECORD DATE ON OR AFTER THE CLOSING AND A PAYMENT DATE SUBSEQUENT TO SUCH SURRENDER.

5. Directors .

Subject to applicable law, the directors of REGS immediately prior to the Closing shall be the initial directors of SEER, in addition to retaining their respective positions in REGS and Tactical, and shall hold office until their respective successors are duly elected and qualified, or their earlier death, resignation or removal, in accordance with applicable law and SEER’s certificate of incorporation and bylaws. Immediately after the Closing, the pre-acquisition directors of SEER shall resign and the directors of REGS immediately prior to the Closing shall be elected as the directors of SEER. The directors of SEER prior to the Closing shall remain entitled to indemnification for acts and omissions prior to the Closing to the fullest extent permitted under Nevada law and the certificate of incorporation and bylaws of SEER in effect prior to the Closing.

6. Officers .

The officers of REGS immediately prior to the Closing shall be the initial officers of SEER and shall hold office until their respective successors are duly elected and qualified, or their earlier death, resignation or removal. Immediately after the Closing, the officers of SEER shall resign and the officers of REGS immediately prior to the Closing shall be appointed as the officers of SEER. The officers of SEER prior to the Closing shall remain entitled to indemnification for acts and omissions prior to the Closing to the fullest extent permitted under Nevada law and the certificate of incorporation and bylaws of SEER in effect prior to the Closing.

7. No Liability.

Neither SEER nor REGS shall be liable to any holder of REGS Ownership Interests or SEER Common Stock, as the case may be, for such shares (or dividends or distributions with respect thereto) or cash delivered to a public official pursuant to any applicable abandoned property, escheat or similar law.

THE CLOSING

1. Closing.

Unless this Agreement shall have been terminated and the transactions herein contemplated shall have been abandoned pursuant to Article VIII, and subject to the satisfaction or waiver of the conditions set forth in Article VII, the closing of the Acquisition (the “Closing”) shall take place on January 9, 2008 or as soon thereafter as the conditions in Article VII has been satisfied or waived (but in no event on written notice of less than two (2) business days) after all of the conditions set forth in Article VII are satisfied or, to the extent permitted hereunder, waived, at the offices of REGS, located at 7801 Brighton Road, Commerce City 80022 or at such other time and place as may be agreed to in writing by the parties hereto (the date of such Closing being referred to as the “Closing Date”).

REPRESENTATIONS AND WARRANTIES OF ICG AND SEER

Except as set forth in the applicable section of the disclosure schedule delivered by SEER to REGS prior to the execution of this Agreement (the “SEER Disclosure Schedule”), SEER represents and warrants to REGS as follows:

1. Organization of ICG and SEER; Authority.

ICG is a corporation duly organized, validly existing and in good standing under the laws of the State of Maryland. SEER is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada. Each of ICG and SEER has all requisite corporate power and corporate authority to enter into the Transaction Documents to which it is a party, to consummate the transactions contemplated hereby and thereby, to own, lease and operate its properties and to conduct its business. Subject to the receipt of stockholder approval, the execution, delivery and performance by each of ICG and SEER of the Transaction Documents to which it is a party and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action on the part of ICG and SEER, including, without limitation the approval of the board of directors of each SEER & ICG. The Transaction Documents have been duly executed and delivered by each of ICG and SEER and, assuming that the Transaction Documents constitute a valid and binding obligation of the other parties thereto, constitute a valid and binding obligation of each of ICG and SEER, enforceable against ICG and SEER in accordance with its terms. Each of ICG and SEER is duly qualified or licensed to do business as a foreign corporation and is in good standing in each jurisdiction in which the property owned, leased or operated by it or the nature of the business conducted by it makes such qualification necessary, except where the failure to obtain such qualification or license would not, individually or in the aggregate, have a SEER Material Adverse Effect. SEER has heretofore delivered or made available to REGS complete and correct copies of the certificate of incorporation and by-laws of SEER, the minute books and stock transfer records of SEER, as in effect as of the date of this Agreement. Neither ICG nor SEER is in violation of its organizational documents.

2. Capitalization.

The authorized capital stock of SEER consists of 70,000,000 shares of SEER Common Stock of which 3,507,252 shares are outstanding on the date hereof. After giving effect to the Reverse Stock Split, the authorized capital stock of SEER at the closing hereof shall consist of 70,000,000 shares of SEER Common Stock, of which 876,813 shares (as a result of the Reverse Stock Split) shall be issued and outstanding. No other shares of any other class or series of SEER Common Stock or securities exercisable or convertible into or exchangeable for SEER Common Stock (“SEER Common Stock Equivalents”) are authorized, issued or outstanding. The outstanding shares of SEER Common Stock have been duly authorized and validly issued and are fully paid and non-assessable and were not issued in violation of, and are not subject to, any preemptive, subscription or similar rights. To SEER’s knowledge, none of the outstanding shares of SEER Common Stock was issued in violation of any Law, including without limitation, federal and state securities laws. There are no outstanding warrants, options, subscriptions, calls, rights, agreements, convertible or exchangeable securities or other commitments or arrangements relating to the issuance, sale, purchase, return or redemption, and, to SEER’s knowledge, voting or transfer of any shares, whether issued or unissued, of SEER Common Stock, SEER Common Stock Equivalents or other securities of SEER. On the Closing Date, the shares of SEER Common Stock for which shares of REGS Ownership Interests shall be exchanged in the Acquisition will have been duly authorized and, when issued and delivered in accordance with this Agreement, such shares of SEER Common Stock, will be validly issued, fully paid, and nonassessable.

3. No Violation; Consents and Approvals.

The execution and delivery by ICG & SEER of the Transaction Documents does not, and the consummation of the transactions contemplated hereby and thereby and compliance with the terms hereof and thereof will not, conflict with or result in any violation of or default (or an event which, with notice or lapse of time or both, would constitute a default) under, (a) the terms and conditions or provisions of the certificate of incorporation or by-laws of ICG or any SEER Subsidiary, (b) any Law applicable to ICG or SEER or the property or assets of SEER or (c) give rise to any right of termination, cancellation or acceleration under, or result in the creation of any Lien upon any of the properties of SEER under any Contract to which SEER is a party or by which SEER or any assets of SEER may be bound, except, in the case of clauses (b) and (c), for such conflicts, violations or defaults which are set forth in Section 3.04 of the SEER Disclosure Schedule and as to which requisite waivers or consents will have been obtained prior to the Closing or which, individually or in the aggregate, would not have a SEER Material Adverse Effect. No Governmental Approval is required to be obtained or made by or with respect to ICG or SEER in connection with the execution and delivery of this Agreement or the consummation by ICG and SEER of the transactions contemplated hereby.

4. Litigation; Compliance with Laws.

4.1 THERE ARE: (I) NO CLAIMS, ACTIONS, SUITS, INVESTIGATIONS OR PROCEEDINGS PENDING OR, TO THE KNOWLEDGE OF ICG OR SEER, THREATENED AGAINST, RELATING TO OR AFFECTING SEER, THE BUSINESS, THE ASSETS, OR ANY EMPLOYEE, OFFICER, DIRECTOR, STOCKHOLDER, OR INDEPENDENT CONTRACTOR OF SEER AND (II) NO ORDERS OF ANY GOVERNMENTAL ENTITY OR ARBITRATOR OUTSTANDING AGAINST SEER, THE BUSINESS, THE ASSETS, OR ANY EMPLOYEE, OFFICER, DIRECTOR, STOCKHOLDER, OR INDEPENDENT CONTRACTOR OF SEER OR THE SEER SUBSIDIARIES IN THEIR CAPACITIES AS SUCH, OR THAT COULD PREVENT OR ENJOIN, OR DELAY IN ANY RESPECT, CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY. SECTION 3.12 OF THE SEER DISCLOSURE SCHEDULE INCLUDES A DESCRIPTION OF ALL PENDING OR THREATENED CLAIMS, ACTIONS, SUITS, INVESTIGATIONS OR PROCEEDINGS INVOLVING SEER OR THE SEER SUBSIDIARIES, THE BUSINESS, THE ASSETS, OR ANY EMPLOYEE, OFFICER, DIRECTOR, STOCKHOLDER OR INDEPENDENT CONTRACTOR OF SEER.

4.2 ICG AND SEER HAVE COMPLIED AND ARE IN COMPLIANCE IN ALL MATERIAL RESPECTS WITH ALL LAWS APPLICABLE TO ICG, SEER, ITS BUSINESS OR ITS ASSETS. NEITHER ICG NOR SEER HAS RECEIVED NOTICE FROM ANY GOVERNMENTAL ENTITY OR OTHER PERSON OF ANY MATERIAL VIOLATION OF LAW APPLICABLE TO ICG, SEER, THEIR BUSINESS OR THEIR ASSETS. ICG AND SEER HAVE OBTAINED AND HOLD ALL REQUIRED LICENSES (ALL OF WHICH ARE IN FULL FORCE AND EFFECT) FROM ALL GOVERNMENT ENTITIES APPLICABLE TO ICG, AND SEER, THEIR BUSINESS OR THEIR ASSETS. NO VIOLATIONS ARE OR HAVE BEEN RECORDED IN RESPECT OF ANY SUCH LICENSE AND NO PROCEEDING IS PENDING, OR, TO THE KNOWLEDGE OF ICG OR SEER, THREATENED TO REVOKE OR LIMIT ANY SUCH LICENSE.

REPRESENTATIONS AND WARRANTIES OF RGS , LLC AND TACTICAL CLEANING COMPANY, LLC

Except as set forth in the applicable section of the disclosure schedule delivered by REGS to SEER prior to the execution of this Agreement (the “REGS Disclosure Schedule”), REGS and Tactical represent and warrant to SEER as follows:

1. Organization of REGS; Authority.

REGS and Tactical are Limited Liability Companies duly organized, validly existing and in good standing under the laws of the State of Colorado and have all requisite power and authority to enter into the Transaction Documents, to consummate the transactions contemplated hereby and thereby, to own, lease and operate their properties and to conduct business. Subject to the receipt of interest holder approval by REGS and Tactical, and the Acquisition of REGS and Tactical by SEER and the execution, delivery and performance by REGS of the Transaction Documents and the consummation of the transactions contemplated hereby and thereby, shall have been duly authorized by all necessary action on the part of REGS, including, without limitation, the approval of the then board of directors or managing members of REGS.

The Transaction Documents have been duly executed and delivered by REGS & Tactical and, assuming that the Transaction Documents constitute a valid and binding obligation of SEER and ICG, constitute a valid and binding obligation of REGS and Tactical. REGS and Tactical are each duly qualified or licensed to do business as a foreign LLC and each is in good standing in every jurisdiction in which the property owned, leased or operated by it or the nature of the business conducted by it makes such qualification necessary, except where the failure to obtain such qualification or license would not, individually or in the aggregate, have a Material Adverse Effect. REGS has heretofore delivered or made available to SEER complete and correct copies of the articles of organization and by-laws of REGS and Tactical, and the minute books and ownership interest transfer records of the LLC’s, as in effect as of the date of this Agreement. Neither REGS nor Tactical are in violation of their organizational documents.

2. Capitalization.

2.1 THE AUTHORIZED AND OUTSTANDING OWNERSHIP INTERESTS OF REGS SHALL BE EQUIVALENT TO 18,282,630 SHARES (PRE REVERSE SPLIT) OF COMMON STOCK AFTER ACQUISITION OF REGS BY SEER. ALL OF THE OUTSTANDING INTERESTS OF REGS AND TACTICAL ARE VALIDLY ISSUED, FULLY PAID AND NON-ASSESSABLE. TO THEIR MANAGING MEMBER’S KNOWLEDGE, NONE OF THE OUTSTANDING OWNERSHIP INTERESTS OF REGS OR TACTICAL OR OTHER SECURITIES OF SUCH COMPANIES HAS BEEN ISSUED IN VIOLATION OF ANY LAW, INCLUDING, WITHOUT LIMITATION, STATE AND FEDERAL SECURITIES LAWS. THERE ARE NO LIENS ON OR WITH RESPECT TO ANY OUTSTANDING INTEREST OF EITHER REGS OR TACTICAL.

2.2 OTHER THAN AS LISTED ON SCHEDULE 4.02, NO OUTSTANDING: (I) SECURITIES CONVERTIBLE INTO OR EXCHANGEABLE FOR REGS INTERESTS; (II) OPTIONS, WARRANTS OR OTHER RIGHTS TO PURCHASE OR SUBSCRIBE FOR REGS INTERESTS; OR (III) CONTRACTS, COMMITMENTS, AGREEMENTS, UNDERSTANDINGS OR ARRANGEMENTS OF ANY KIND RELATING TO THE ISSUANCE OF ANY REGS INTERESTS, ANY SUCH CONVERTIBLE OR EXCHANGEABLE SECURITIES OR ANY SUCH OPTIONS, WARRANTS OR RIGHTS. THERE IS NO OUTSTANDING RIGHT, OPTION OR OTHER AGREEMENT OF ANY KIND TO PURCHASE OR OTHERWISE TO RECEIVE FROM REGS, OR ANY HOLDER OF REGS TACTICAL, ANY OWNERSHIP INTEREST IN REGS OR, AND THERE IS NO OUTSTANDING RIGHT OR SECURITY OF ANY KIND CONVERTIBLE INTO ANY SUCH OWNERSHIP INTEREST. TO REGS’S KNOWLEDGE, THERE ARE NO VOTING TRUSTS, PROXIES OR OTHER SIMILAR AGREEMENTS OR UNDERSTANDINGS WITH RESPECT TO THE REGS INTERESTS. THERE ARE NO OBLIGATIONS, CONTINGENT OR OTHERWISE, OF REGS TO REPURCHASE, REDEEM OR OTHERWISE ACQUIRE ANY INTERESTS OF REGS OR TO PROVIDE FUNDS TO OR MAKE ANY INVESTMENT (IN THE FORM OF A LOAN, CAPITAL CONTRIBUTION OR OTHERWISE) IN ANY OTHER PERSON. THERE ARE NO ACCRUED AND UNPAID DIVIDENDS WITH RESPECT TO ANY OUTSTANDING INTERESTS OF REGS.

3. No Violation; Consents and Approvals.

The execution and delivery by REGS of the Transaction Documents does not, and the consummation of the transactions contemplated hereby and thereby and compliance with the terms hereof and thereof will not conflict with, or result in any violation of or default (or an event which, with notice or lapse of time or both, would constitute a default) under, (a) the terms and conditions or provisions of the articles of organization or by-laws of REGS or Tactical, (b) any Laws applicable to REGS Tactical or the property or assets of REGS or Tactical, or (c) give rise to any right of termination, cancellation or acceleration under, or result in the creation of any Lien upon any of the properties of REGS or Tactical under, any Contracts to which REGS or Tactical is a party or by which REGS or Tactical or any of its assets may be bound, except, in the case of clauses (b) and (c), for such conflicts, violations or defaults as to which requisite waivers or consents will have been obtained prior to the Closing or which, individually or in the aggregate, would not have a Material Adverse Effect. Except as set forth in Section 4.04 or in the REGS Disclosure Schedule, no Governmental Approval is required to be obtained or made by or with respect to REGS or Tactical or any REGS or Tactical Subsidiary in connection with the execution and delivery of this Agreement or the consummation by REGS or Tactical of the transactions contemplated hereby, except where the failure to obtain such Governmental Approval would not, individually or in the aggregate, have a Material Adverse Effect.

4. Litigation ; Compliance with Laws.

4.1 EXCEPT AS WOULD NOT HAVE A MATERIAL ADVERSE EFFECT, THERE ARE: (I) NO CLAIMS, ACTIONS, SUITS, INVESTIGATIONS OR PROCEEDINGS PENDING OR, TO THE KNOWLEDGE OF REGS, THREATENED AGAINST, RELATING TO OR AFFECTING REGS, ITS BUSINESS, ITS ASSETS, OR ANY EMPLOYEE, OFFICER, DIRECTOR, STOCKHOLDER, OR INDEPENDENT CONTRACTOR OF REGS IN THEIR CAPACITIES AS SUCH, AND (II) NO ORDERS OF ANY GOVERNMENTAL ENTITY OR ARBITRATOR ARE OUTSTANDING AGAINST REGS OR , ITS BUSINESS, ITS ASSETS, OR ANY EMPLOYEE, OFFICER, DIRECTOR, STOCKHOLDER, OR INDEPENDENT CONTRACTOR OF REGS IN THEIR CAPACITIES AS SUCH, OR THAT COULD PREVENT OR ENJOIN, OR DELAY IN ANY RESPECT, CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY. SECTION 4.04 OF THE REGS DISCLOSURE SCHEDULE INCLUDES A DESCRIPTION OF ALL CLAIMS, ACTIONS, SUITS, INVESTIGATIONS OR PROCEEDINGS INVOLVING REGS, ITS BUSINESS, ITS ASSETS, OR ANY EMPLOYEE, OFFICER, DIRECTOR, INTEREST HOLDER OR INDEPENDENT CONTRACTOR OF REGS IN THEIR CAPACITIES AS SUCH. REGS HAS REACHED AGREEMENT TO RESCIND ITS TRANSACTION WITH REDROCK AND SUCH RESCISSION WILL BE SETTLED AND COMPLETED PRIOR TO OR CONCURRENT WITH CLOSING, OR WITH CONDITIONS ACCEPTABLE TO SEER AT CLOSING.

4.2 EXCEPT AS WOULD NOT HAVE A MATERIAL ADVERSE EFFECT, REGS HAS COMPLIED AND IS IN COMPLIANCE IN ALL MATERIAL RESPECTS WITH ALL LAWS APPLICABLE TO REGS AND THE BUSINESS OR ASSETS. REGS HAS NOT RECEIVED NOTICE FROM ANY GOVERNMENTAL ENTITY OR OTHER PERSON OF ANY MATERIAL VIOLATION OF LAW APPLICABLE TO REGS, ITS BUSINESS OR ITS ASSETS. REGS HAS OBTAINED AND HOLDS ALL REQUIRED LICENSES (ALL OF WHICH ARE IN FULL FORCE AND EFFECT) FROM ALL GOVERNMENT ENTITIES APPLICABLE TO IT, ITS BUSINESS OR ITS ASSETS. NO VIOLATIONS ARE OR HAVE BEEN RECORDED IN RESPECT OF ANY SUCH LICENSE AND NO PROCEEDING IS PENDING, OR, TO THE KNOWLEDGE OF REGS THREATENED TO REVOKE OR LIMIT ANY SUCH LICENSE.

COVENANTS RELATING TO CONDUCT OF

BUSINESS PENDING THE ACQUISITION

1. Conduct of the Business Pending the Acquisition.

1.1 DURING THE PERIOD FROM THE DATE OF THIS AGREEMENT AND CONTINUING UNTIL THE CLOSING, SEER AGREES THAT SEER SHALL NOT ENGAGE IN ANY BUSINESS WHATSOEVER OTHER THAN IN CONNECTION WITH THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, AND SHALL USE COMMERCIALLY REASONABLE EFFORTS TO PRESERVE INTACT ITS BUSINESS AND ASSETS, MAINTAIN ITS ASSETS IN GOOD OPERATING CONDITION AND REPAIR (ORDINARY WEAR AND TEAR EXCEPTED), RETAIN THE SERVICES OF ITS OFFICERS, EMPLOYEES AND INDEPENDENT CONTRACTORS AND USE REASONABLE COMMERCIAL EFFORTS TO KEEP IN FULL FORCE AND EFFECT LIABILITY INSURANCE AND BONDS COMPARABLE IN AMOUNT AND SCOPE OF COVERAGE TO THAT CURRENTLY MAINTAINED WITH RESPECT TO ITS BUSINESS, UNLESS, IN ANY CASE, REGS CONSENTS OTHERWISE IN WRITING.

1.2 DURING THE PERIOD FROM THE DATE OF THIS AGREEMENT AND CONTINUING UNTIL THE CLOSING, REGS AGREES THAT, OTHER THAN IN CONNECTION WITH THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY, IT SHALL CARRY ON ITS BUSINESS ONLY IN THE ORDINARY COURSE OF BUSINESS CONSISTENT WITH PAST PRACTICE, USE COMMERCIALLY REASONABLE EFFORTS TO PRESERVE INTACT THE BUSINESS AND ASSETS AND USE REASONABLE COMMERCIAL EFFORTS TO KEEP IN FULL FORCE AND EFFECT LIABILITY INSURANCE AND BONDS COMPARABLE IN AMOUNT AND SCOPE OF COVERAGE TO THAT CURRENTLY MAINTAINED WITH RESPECT TO THE BUSINESS, UNLESS, IN ANY CASE, SEER CONSENTS OTHERWISE IN WRITING; PROVIDED THAT REGS MAY TAKE ANY AND ALL OF THE ACTIONS LISTED IN SCHEDULE 5.01(B) OF THE REGS DISCLOSURE SCHEDULES AT ANY TIME PRIOR TO OR AFTER THE DATE OF THIS AGREEMENT WITHOUT THE CONSENT OF SEER.

1.3 DURING THE PERIOD FROM THE DATE OF THIS AGREEMENT AND CONTINUING UNTIL THE CLOSING, EACH OF REGS, AND SEER AGREES AS TO ITSELF AND, RESPECTIVELY, THAT EXCEPT AS EXPRESSLY CONTEMPLATED OR PERMITTED BY THIS AGREEMENT, AS DISCLOSED IN SECTION 5.01(C) OF THE REGS DISCLOSURE SCHEDULE OR THE SEER DISCLOSURE SCHEDULE, AS APPLICABLE, OR TO THE EXTENT THAT THE OTHER PARTY SHALL OTHERWISE CONSENT IN WRITING:

(a) They shall not amend nor propose to amend their certificate of incorporation, articles of organization or by-laws or equivalent organizational documents except as contemplated in this Agreement.

(b) They shall not issue, deliver, sell, redeem, acquire, authorize or propose to issue, deliver, sell, redeem, acquire or authorize, any shares of its capital stock of any class, any ownership interests or any securities convertible into, or any rights, warrants or options to acquire, any such shares or convertible securities or other ownership interest, provided that: (1) SEER shall be permitted to issue the shares of SEER Common Stock to be issued to REGS interest holders hereunder, and (2) each party shall be permitted to issue shares of its common stock or ownership interests pursuant to the exercise of stock options, warrants and other convertible securities outstanding as of the date hereof and listed on the REGS Disclosure Schedule or the SEER Disclosure Schedule, as the case may be.

(c) They shall not, nor shall they propose to: (i) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or ownership interests or (ii) except with respect to the Reverse Stock Split, reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of their capital stock or ownership interests.

(d) Other than dispositions in the ordinary course of business consistent with past practice which would not cause a Material Adverse Effect, individually or in the aggregate, to them and their subsidiaries, taken as a whole, they shall not, nor shall they permit any of their subsidiaries to, sell, lease, encumber or otherwise dispose of, or agree to sell, lease (whether such lease is an operating or capital lease), encumber or otherwise dispose of their assets.

(e) They shall promptly advise the other party hereto in writing of any change in the condition (financial or otherwise), operations or properties, businesses or business prospects of such party or any of their subsidiaries which would result in a Material Adverse Effect.

(f) They shall not permit to occur any (1) change in accounting principles, methods or practices, investment practices, claims, payment and processing practices or policies regarding inter-company transactions, (2) incurrence of Indebtedness or any commitment to incur Indebtedness, any incurrence of a contingent liability, Contingent Obligation or other liability of any type, except for, with respect to REGS, other than obligations related to the acquisition of Inventory in the ordinary course of business consistent with past practices, (3) cancellation of any debt or waiver or release of any contract, right or claim, except for cancellations, waivers and releases in the ordinary course of business consistent with its past practice which do not exceed $50,000 in the aggregate, (4) amendment, termination or revocation of, or a failure to perform obligations or the occurrence of any default under, (a) any contract or agreement (including, without limitation, leases) to which they are or, as of January 3, 2007, were a party, other than in the ordinary course of business consistent with past practice, or (b) any License, (5) execution of termination, severance or similar agreements with any of their officers, directors, employees, agents or independent contractors or (6) entering into any leases of real property or agreement to acquire real property.

2. No Action.

During the period from the date of this Agreement and continuing until the Closing, each of SEER and ICG agrees as to itself and, with respect to SEER, that it shall not, permit SEER to take or agree or commit to take any action, (i) that is reasonably likely to make any of its representations or warranties hereunder inaccurate; or (ii) that is prohibited pursuant to the provisions of this Article V.

ADDITIONAL AGREEMENTS

1. Preparation of Notice to REGS Interest Holders.

REGS agrees that as promptly as practicable following the date of this Agreement it shall prepare a notice to interest holders describing the Acquisition (the “REGS Notice”). REGS shall use commercially reasonable efforts to cause the REGS Notice to be mailed to its interest holders at the earliest practicable date following such filing.

2. Access to Information.

From the date hereof until the Closing or the earlier termination of this Agreement, each party shall give the other party and its respective counsel, accountants, representatives and agents full access, upon reasonable notice and during normal business hours, to such party’s facilities and the financial, legal, accounting and other representatives of such party with knowledge of the business and the assets of such party and, upon reasonable notice, shall be furnished all relevant documents, records and other information concerning the business, finances and properties of such party and its subsidiaries that the other party and its respective counsel, accountants, representatives and agents, may reasonably request. No investigation pursuant to this Section 6.02 shall affect or be deemed to modify any of the representations or warranties hereunder or the condition to the obligations of the parties to consummate the Acquisition; it being understood that the investigation will be made for the purposes among others of the board of directors of each party determining in its good faith reasonable business judgment the accuracy of the representations and warranties of the other party. In the event of the termination of this Agreement, each party, if so requested by the other party, will return or destroy promptly every document furnished to it by or on behalf of the other party in connection with the transactions contemplated hereby, whether so obtained before or after the execution of this Agreement, and any copies thereof (except for copies of documents publicly available) which may have been made, and will use reasonable efforts to cause its representatives and any representatives of financial institutions and investors and others to whom such documents were furnished promptly to return or destroy such documents and any copies thereof any of them may have made.

3. No Shop; Acquisition Proposals

From the date hereof until the Closing or the earlier termination of this Agreement, neither REGS nor SEER shall, nor shall they authorize or permit any of their respective officers, directors or employees or Subsidiaries or any investment banker, financial advisor, attorney, accountant or other representative retained by it to, solicit, initiate or encourage (including by way of furnishing information), or take any other action to facilitate, any inquiries or the making of any proposal which constitutes, or may reasonably be expected to lead to, any Takeover Proposal (as hereinafter defined), or negotiate with respect to, agree to or endorse any Takeover Proposal (except in any case if the board of directors or special committee of SEER or REGS, as the case may be, determines in good faith, based upon the written opinion of its outside legal counsel, that the failure to do so would constitute a breach of the fiduciary duties of the SEER’s or REGS’s board of directors or special committee, as the case may be, to its stockholders under applicable law). REGS shall promptly advise SEER and SEER shall promptly advise REGS, as the case may be, orally and in writing of any such inquiries or proposals and shall also promptly advise SEER or REGS, as the case may be, of any developments or changes regarding such inquiries or proposals. REGS and SEER shall immediately cease and cause to be terminated any existing discussions or negotiations with any persons (other than REGS, SEER and ICG) conducted heretofore with respect to any Takeover Proposal. REGS and SEER agree not to release (by waiver or otherwise) any third party from the provisions of any confidentiality or standstill agreement to which REGS or SEER is a party to.

4. Legal Conditions to Acquisition; Reasonable Efforts.

Each of REGS and SEER shall take all reasonable actions necessary to comply promptly with all legal requirements which may be imposed on itself with respect to the Acquisition and will promptly cooperate with and furnish information to each other in connection with any such requirements imposed upon any of them or any of their Subsidiaries in connection with the Acquisition. Each of REGS and SEER will take all reasonable actions necessary to obtain (and will cooperate with each other in obtaining) any consent, authorization, order or approval of, or any exemption by, any Governmental Entity or other public or private third party, required to be obtained or made by REGS, or SEER or ICG in connection with the Acquisition or the taking of any action contemplated thereby or by this Agreement.

5. Public Announcements and Filings.

Each party shall give the other a reasonable opportunity to comment upon, and, unless disclosure is required, in the opinion of counsel, by applicable law, approve (which approval shall not be unreasonably withheld), all press releases or other public communications of any sort relating to this Agreement or the transactions contemplated hereby.

6. Tax Treatment.

SEER and REGS shall each report the Acquisition as a tax-free contribution to a controlled corporation or in any manner as further agreed after consultation with their respective financial advisors, and shall not take, and shall use commercially reasonable efforts to prevent any of their respective Subsidiaries or affiliates from taking, any actions that could prevent the Acquisition from qualifying, as tax free under the provisions of Section 351 of the Code.

7. Tax Matters.

7.1 REGS SHALL PREPARE AND FILE ON A TIMELY BASIS ALL TAX RETURNS WHICH ARE DUE TO BE FILED WITH RESPECT TO REGS (GIVING EFFECT TO ANY EXTENSION OF TIME) ON OR PRIOR TO THE CLOSING DATE. SEER SHALL BE RESPONSIBLE FOR THE PREPARATION AND FILING OF ALL TAX RETURNS WHICH ARE DUE TO BE FILED (GIVING EFFECT TO ANY EXTENSION OF TIME) AFTER THE CLOSING DATE, BUT REGS SHALL USE BEST EFFORTS TO CONDUCT ITS AFFAIRS SUCH THAT ANY TAX RETURNS DUE AFTER THE CLOSING DATE CAN BE FILED ON A TIMELY BASIS.

7.2 FROM THE DATE HEREOF UNTIL THE CLOSING OR THE EARLIER TERMINATION OF THIS AGREEMENT, WITHOUT THE PRIOR WRITTEN CONSENT OF THE OTHER PARTY OR IF REQUIRED IN THE OPINION OF COUNSEL, NEITHER SEER NOR REGS SHALL MAKE OR CHANGE ANY ELECTION, CHANGE AN ANNUAL ACCOUNTING PERIOD, ADOPT OR CHANGE ANY ACCOUNTING METHOD, FILE ANY AMENDED TAX RETURN, ENTER INTO ANY CLOSING AGREEMENT, SETTLE ANY TAX CLAIM OR ASSESSMENT RELATING TO IT, SURRENDER ANY RIGHT TO CLAIM A REFUND OF TAXES, CONSENT TO ANY EXTENSION OR WAIVER OF THE LIMITATION PERIOD APPLICABLE TO ANY TAX CLAIM OR ASSESSMENT RELATING TO IT, OR TAKE ANY OTHER ACTION RELATING TO THE FILING OF ANY TAX RETURN OR THE PAYMENT OF ANY TAX .

8. Supplements to Schedules.

Prior to the Closing, REGS will supplement or amend the disclosure schedule with respect to any matter hereafter arising which, if existing or occurring at the date of this Agreement, would have been required to be set forth or described in such disclosure schedule. No supplement to or amendment of the disclosure schedule made pursuant to this Section 6.08 shall be deemed to cure any breach of any representation or warranty made in this Agreement unless the other parties hereto specifically agree thereto in writing. Prior to the Closing, SEER may supplement or amend its disclosure schedule with respect to any matter which, if existing or occurring at the date of this Agreement, would have been required to be set forth or described in such disclosure schedule. No supplement to or amendment of the disclosure schedule made pursuant to this Section 6.08 shall be deemed to cure any breach of any representation or warranty made in this Agreement unless the other parties hereto specifically agree thereto in writing.

SECTION 6.09. Board Membership

ICG shall have the irrevocable right to designate a Board member who will be appointed to SEER’s Board post-Acquisition and post-closing, which will have a total of no more than seven members, at least three (3) of whom shall be an “independent director” as defined by the AMEX listing requirements.

CONDITIONS OF THE ACQUISITION

1. Conditions to Each Party’s Obligation to Effect the Acquisition.

The respective obligations of each party to effect the Acquisition and the other transactions contemplated herein shall be subject to the satisfaction at or prior to the Closing of the following conditions, any or all of which may be waived, in whole or in part to the extent permitted by applicable law:

1.1 OWNERSHIP INTEREST/STOCKHOLDER APPROVAL. THIS AGREEMENT SHALL HAVE BEEN DULY ADOPTED AND APPROVED BY THE HOLDERS OF (I) A MAJORITY OF THE OUTSTANDING REGS OWNERSHIP INTERESTS; AND (II) A MAJORITY OF THE OUTSTANDING SHARES OF CAPITAL STOCK OF SEER.

1.2 NO INJUNCTIONS OR RESTRAINTS. NO GOVERNMENTAL AUTHORITY OF COMPETENT JURISDICTION SHALL HAVE ENACTED, ISSUED, PROMULGATED, ENFORCED OR ENTERED ANY STATUTE, RULE, REGULATION, EXECUTION ORDER, DECREE, INJUNCTION OR OTHER ORDER (WHETHER TEMPORARY, PRELIMINARY OR PERMANENT) WHICH IS IN EFFECT AND WHICH MATERIALLY RESTRICTS, PREVENTS OR PROHIBITS CONSUMMATION OF THE ACQUISITION OR ANY TRANSACTION CONTEMPLATED BY THIS AGREEMENT; PROVIDED, HOWEVER, THAT THE PARTIES SHALL USE THEIR REASONABLE COMMERCIAL EFFORTS TO CAUSE ANY SUCH DECREE, JUDGMENT, INJUNCTION OR OTHER ORDER TO BE VACATED OR LIFTED.

2. Additional Conditions of Obligations of SEER.

The obligations of SEER and ICG to effect the Acquisition and the other transactions contemplated by this Agreement are also subject to the satisfaction at or prior to the Closing Date of the following additional conditions unless waived by SEER:

2.1 REPRESENTATIONS AND WARRANTIES. THE REPRESENTATIONS AND WARRANTIES OF REGS SET FORTH IN THIS AGREEMENT SHALL BE TRUE AND CORRECT IN ALL MATERIAL RESPECTS (EXCEPT FOR THOSE REPRESENTATIONS AND WARRANTIES QUALIFIED BY MATERIALITY, WHICH SHALL BE TRUE AND CORRECT IN ALL RESPECTS) AS OF THE DATE OF THIS AGREEMENT AND AS OF THE CLOSING DATE AS THOUGH MADE ON AND AS OF THE CLOSING DATE, EXCEPT AS OTHERWISE CONTEMPLATED BY THIS AGREEMENT.

2.2 PERFORMANCE OF OBLIGATIONS OF REGS. REGS SHALL HAVE PERFORMED IN ALL MATERIAL RESPECTS ALL CONDITIONS, COVENANTS, AGREEMENTS AND OBLIGATIONS REQUIRED TO BE PERFORMED BY IT UNDER THIS AGREEMENT AT OR PRIOR TO THE CLOSING DATE.

2.3 NO MATERIAL ADVERSE CHANGE TO REGS. FROM THE DATE HEREOF THROUGH AND INCLUDING THE TIME OF CLOSING, NO EVENT SHALL HAVE OCCURRED WHICH WOULD HAVE A REGS MATERIAL ADVERSE EFFECT.

2.4 THIRD PARTY CONSENTS. REGS SHALL HAVE OBTAINED ALL CONSENTS AND APPROVALS, REQUIRED TO BE OBTAINED PRIOR TO OR AT THE CLOSING DATE, FROM THIRD PARTIES OR GOVERNMENTAL AND REGULATORY AUTHORITIES IN CONNECTION WITH THE EXECUTION, DELIVERY AND PERFORMANCE BY REGS OF THIS AGREEMENT AND THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY.

(E) NO GOVERNMENTAL ORDER OR OTHER PROCEEDING OR LITIGATION . NO ORDER OF ANY GOVERNMENTAL ENTITY SHALL BE IN EFFECT THAT RESTRAINS OR PROHIBITS THE TRANSACTIONS CONTEMPLATED HEREBY AND BY THE OTHER TRANSACTION DOCUMENTS, AND NO SUIT, ACTION OR OTHER PROCEEDING BY ANY GOVERNMENTAL ENTITY SHALL HAVE BEEN INSTITUTED OR THREATENED WHICH SEEKS TO RESTRAIN OR PROHIBIT THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

(F) DISSENTERS’ RIGHTS . HOLDERS OF NOT MORE THAN 10% OF THE AGGREGATED AMOUNT OF REGS OWNERSHIP INTERESTS SHALL HAVE ELECTED TO EXERCISE ANY APPRAISAL RIGHTS OR SIMILAR RIGHTS WITHIN THE LAW OF THE STATE OF COLORADO, WHICH DEMAND WAS NOT WITHDRAWN OR TERMINATED AS OF THE CLOSING DATE.

(G) REGS INDEBTEDNESS . OTHER THAN NOTED ON THE REGS DISCLOSURE SCHEDULE, ALL OUTSTANDING INDEBTEDNESS, EXCEPT TRADE PAYABLES, ORDINARY EQUIPMENT FINANCING, ORDINARY REVOLVING FACTORING DEBT, AND CERTAIN REDROCK INDEBTEDNESS INCURRED IN CONNECTION TO THE RESCISSION (INDEBTEDNESS) SHALL HAVE BEEN FULLY PAID AND/OR A SETTLEMENT IN SHARES TO BE ISSUED AT THE CLOSING SHALL HAVE BEEN AGREED TO AND ICG AND SEER SHALL HAVE RECEIVED EVIDENCE OF SUCH REPAYMENT OR AGREEMENT IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO ICG AND SEER. REGS CAN AGREE TO THE ISSUANCE OF UP TO 659,515 COMMON SHARES OF SEER TO DEBT HOLDERS TO SETTLE THE INDEBTEDNESS AND SUCH SHARES ARE TO BE ISSUED AT CLOSING (OR REASONABLY SHORTLY THEREAFTER).

(H) DELIVERIES .

At the Closing, REGS shall have delivered to SEER:

(a) a certificate, dated the Closing Date, signed on behalf of REGS by the Chief Executive Officer of REGS, certifying as to the fulfillment of the conditions specified in subsections (a), (b) and (c) of this Section 7.02;

(b) the consents set forth in Section 4.04 of the REGS Disclosure Schedule;

(c) true, correct and complete copies of (1) the articles of organization or other charter document, as amended to date, of REGS, certified as of a recent date by the Secretary of State or other appropriate official of the state or other jurisdiction of the organization of REGS, (2) the by-laws or other similar organizational document of REGS, and (3) resolutions duly and validly adopted by the Board of Directors and interest holders of REGS evidencing the authorization of the execution and delivery of this Agreement, the other Transaction Documents to which it is a party and the consummation of the transactions contemplated hereby and thereby, in each case, accompanied by a certificate of the Secretary or Assistant Secretary of REGS, dated as of the Closing Date, stating that no amendments have been made thereto from the date thereof through the Closing Date; and

(d) good standing certificates for REGS from the Secretary of State or other appropriate official of their respective states or other jurisdiction of organization and from the Secretary of State or other appropriate official of each other jurisdiction in which the operation of the business in such jurisdiction requires REGS to qualify to do business as a foreign LLC, in each case dated as of a recent date prior to the Closing Date;

3. Additional Conditions of Obligations of REGS.

The obligation of REGS to effect the Acquisition and the other transactions contemplated by this Agreement is also subject to the satisfaction at or prior to the Closing Date of the following additional conditions unless waived by REGS:

3.1 REPRESENTATIONS AND WARRANTIES. THE REPRESENTATIONS AND WARRANTIES OF ICG AND SEER SET FORTH IN THIS AGREEMENT SHALL BE TRUE AND CORRECT IN ALL MATERIAL RESPECTS (EXCEPT FOR THOSE REPRESENTATIONS AND WARRANTIES QUALIFIED BY MATERIALITY) AS OF THE DATE OF THIS AGREEMENT AND AS OF THE CLOSING DATE AS THOUGH MADE ON AND AS OF THE CLOSING DATE, EXCEPT AS OTHERWISE CONTEMPLATED BY THIS AGREEMENT.

3.2 PERFORMANCE OF OBLIGATIONS OF ICG AND SEER. ICG AND SEER SHALL HAVE PERFORMED IN ALL MATERIAL RESPECTS ALL CONDITIONS, COVENANTS, AGREEMENTS AND OBLIGATIONS REQUIRED TO BE PERFORMED BY THEM UNDER THIS AGREEMENT AT OR PRIOR TO THE CLOSING DATE.

(C) NO MATERIAL ADVERSE CHANGE TO SEER . FROM THE DATE HEREOF THROUGH AND INCLUDING THE TIME OF CLOSING, NO EVENT SHALL HAVE OCCURRED WHICH WOULD HAVE A SEER MATERIAL ADVERSE EFFECT.

(D) THIRD PARTY CONSENTS. SEER SHALL HAVE OBTAINED ALL CONSENTS AND APPROVALS REQUIRED TO BE OBTAINED PRIOR TO OR AT THE CLOSING DATE FROM THIRD PARTIES OR GOVERNMENTAL AND REGULATORY AUTHORITIES IN CONNECTION WITH THE EXECUTION, DELIVERY AND PERFORMANCE BY SEER OF THIS AGREEMENT AND THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY.

(F) REVERSE STOCK SPLIT AND NAME CHANGE . THE REVERSE STOCK SPLIT ON A ONE-FOR-4 BASIS AND NAME CHANGE OF SEER HAS BEEN CONSUMMATED AND IS EFFECTIVE TO STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

(G) DELIVERIES .

At the Closing, SEER shall have delivered to REGS:

(a) certificates, dated the Closing Date, signed on behalf of each of SEER and SEER by the President of each of SEER and Acquisition, certifying as to the fulfillment of the conditions specified in subsections (a), (b) and (c) of this Section 7.03;

(b) the consents set forth in Section 3.04 of the SEER Disclosure Schedule;

(c) true, correct and complete copies of (1) the certificate of incorporation or other charter document, as amended to date, of SEER, certified as of a recent date by the Secretary of State or other appropriate official of the state or other jurisdiction of incorporation of such company, (2) the by-laws or other similar organizational document of SEER, and (3) resolutions duly and validly adopted by the Board of Directors of each of ICG and SEER evidencing the authorization of the execution and delivery of this Agreement, the other Transaction Documents to which it is a party and the consummation of the transactions contemplated hereby and thereby, in each case, accompanied by a certificate of the Secretary of SEER, dated as of the Closing Date, stating that no amendments have been made thereto from the date thereof through the Closing Date; and

(d) good standing certificates for SEER from the Secretary of State or other appropriate official of their respective states or other jurisdiction of incorporation and from the Secretary of State or other appropriate official of each other jurisdiction in which the operation of the business in such jurisdiction requires SEER to qualify to do business as a foreign corporation, in each case dated as of a recent date prior to the Closing Date.

TERMINATION

1. Termination.

This Agreement may be terminated at any time prior to the Closing, by ICG, SEER or REGS as set forth below:

1.1 BY MUTUAL CONSENT OF THE BOARDS OF DIRECTORS OF ICG, SEER AND REGS; OR

1.2 BY SEER UPON WRITTEN NOTICE TO REGS, IF: (A) ANY CONDITION TO THE OBLIGATION OF SEER TO CLOSE CONTAINED IN ARTICLE VII HEREOF HAS NOT BEEN SATISFIED BY JANUARY 31, 2008 (THE “END DATE”) (UNLESS SUCH FAILURE IS THE RESULT OF SEER’ BREACH OF ANY OF ITS REPRESENTATIONS, WARRANTIES, COVENANTS OR AGREEMENTS CONTAINED HEREIN) OR (B) THE SEER STOCKHOLDERS DO NOT APPROVE THE ACQUISITION; OR

1.3 BY REGS UPON WRITTEN NOTICE TO SEER, IF: (A) ANY CONDITION TO THE OBLIGATION OF REGS TO CLOSE CONTAINED IN ARTICLE VII HEREOF HAS NOT BEEN SATISFIED BY THE END DATE (UNLESS SUCH FAILURE IS THE RESULT OF REGS’S BREACH OF ANY OF ITS REPRESENTATIONS, WARRANTIES, COVENANTS OR AGREEMENTS CONTAINED HEREIN); OR (B) THE REGS INTEREST HOLDERS DO NOT APPROVE THE ACQUISITION; OR

1.4 BY SEER IF THE BOARD OF DIRECTORS OR SPECIAL COMMITTEE OF SEER DETERMINES IN GOOD FAITH, BASED UPON THE WRITTEN OPINION OF ITS OUTSIDE LEGAL COUNSEL, THAT THE FAILURE TO TERMINATE THIS AGREEMENT WOULD CONSTITUTE A BREACH OF THE FIDUCIARY DUTIES OF THE SEER BOARD OF DIRECTORS OR SPECIAL COMMITTEE TO THE SEER STOCKHOLDERS UNDER APPLICABLE LAW; OR

1.5 BY REGS IF THE MANAGERS, OR BOARD OF DIRECTORS OR A SPECIAL COMMITTEE OF REGS DETERMINES IN GOOD FAITH, BASED UPON THE WRITTEN OPINION OF ITS OUTSIDE LEGAL COUNSEL, THAT THE FAILURE TO TERMINATE THIS AGREEMENT WOULD CONSTITUTE A BREACH OF THE FIDUCIARY DUTIES OF THE REGS MANAGERS, OR BOARD OF DIRECTORS OR SPECIAL COMMITTEE TO THE REGS STOCKHOLDERS UNDER APPLICABLE LAW.

2. Fees and Expenses.

Whether or not the Acquisition is consummated, all costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such expense, and, in connection therewith, each of SEER and REGS shall pay, with its own funds and not with funds provided by the other party, any and all property or transfer taxes imposed on such party.

SURVIVAL OF REPRESENTATIONS AND WARRANTIES

None of the representations and warranties of the parties set forth in this Agreement shall survive the Closing. Following the Closing Date with respect to any particular representation or warranty, no party hereto shall have any further liability with respect to such representation and warranty. None of the covenants, agreements and obligations of the parties hereto shall survive the Closing.

MISCELLANEOUS

1. Notices.

All notices, requests and other communications to any party hereunder shall be in writing (including telecopy, telex or similar writing) and shall be deemed given or made as of the date delivered, if delivered personally or by telecopy (provided that delivery by telecopy shall be followed by delivery of an additional copy personally, by mail or overnight courier), one day after being delivered by overnight courier or three days after being mailed by registered or certified mail (postage prepaid, return receipt requested), to the parties at the following addresses:

if to ICG & SEER to:

INFINITY CAPITAL GROUP, INC.

80 Broad St., 5 th Floor

New York, NY 10004

Attention:

Fax: (212) 962-4422

with a copy to (which shall not constitute notice):

Michael Littman, Esq.

7609 Ralston Road

Arvada, CO 80002

Fax: (303) 431-1567

if to REGS, to:

REGS, LLC

Attention: J. John Combs III

7801 Brighton Road

Commerce City, CO 80022

Fax: (303) 295-6498

with a copy to (which shall not constitute notice):

Christopher H. Dieterich, Esq.

Dieterich & Mazarei

11300 West Olympic Boulevard, Suite 800

Los Angeles, California 90064

or such other address or telex or telecopy number as such party may hereafter specify for the purpose by notice to the other party hereto.

2. Amendment; Waiver.

This Agreement may be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may be given, provided that the same are in writing and signed by or on behalf of the parties hereto.

3. Successors and Assigns.

The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, provided that no party shall assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the written consent of the other party hereto.

4. Governing Law.

This Agreement shall be construed in accordance with and governed by the law of the State of Nevada without regard to principles of conflict of laws.

5. Waiver of Jury Trial.

Each party hereto hereby irrevocably and unconditionally waives any rights to a trial by jury in any legal action or proceeding in relation to this Agreement and for any counterclaim therein.

6. Consent to Jurisdiction.

Each of the Parties hereby irrevocably and unconditionally submits to the exclusive jurisdiction of any court of the State of Colorado or any federal court sitting in Colorado for purposes of any suit, action or other proceeding arising out of this Agreement and the Transaction Documents (and agrees not to commence any action, suit or proceedings relating hereto or thereto except in such courts). Each of the Parties agrees that service of any process, summons, notice or document pursuant to the laws of the State of Colorado and on the individuals designated in Section 10.01 shall be effective service of process for any action, suit or proceeding brought against it in any such court.

7. Counterparts; Effectiveness.

Facsimile transmissions of any executed original document and/or retransmission of any executed facsimile transmission shall be deemed to be the same as the delivery of an executed original. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

8. Entire Agreement; No Third Party Beneficiaries; Rights of Ownership.

Except as expressly provided herein, this Agreement (including the documents and the instruments referred to herein) constitute the entire agreement and supersede all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof. Except as expressly provided herein, this Agreement is not intended to confer upon any person other than the parties hereto any rights or remedies hereunder. The parties hereby acknowledge that no person shall have the right to acquire or shall be deemed to have acquired shares of common stock or ownership interests of the other party pursuant to the Acquisition until consummation thereof.

9. Headings.

The headings contained in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.

10. No Strict Construction.

The parties hereto have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises under any provision of this Agreement, this Agreement shall be construed as if drafted jointly by the parties thereto, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement.

11. Severability.

If any term or other provision of this Agreement is invalid, illegal or unenforceable, all other provisions of this Agreement shall remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in a manner that is materially adverse to any party.

DEFINITIONS

“Acquisition” shall have the meaning set forth in the recitals of this Agreement.

“Affiliate” shall mean (a) with respect to an individual, any member of such individual’s family including lineal ancestors and descendents; (b) with respect to an entity, any officer, director, stockholder, partner, manager, investor or holder of an ownership interest of or in such entity or of or in any Affiliate of such entity; and (c) with respect to a Person, any Person which directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with such Person or entity.

“Agreement” shall have the meaning set forth in the preamble to this Agreement.

“CRS” shall have the meaning set forth in the recitals of this Agreement.

“Certificates” shall have the meaning set forth in Section 1.05(a) of this Agreement.

“Closing” shall have the meaning set forth in Section 2.01 of this Agreement.

“Closing Date” shall have the meaning set forth in Section 2.01 of this Agreement.

“Code” shall have the meaning set forth in the recitals of this Agreement.

“Contingent Obligation” as to any Person shall mean the undrawn face amount of any letters of credit issued for the account of such Person and shall also mean any obligation of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness, leases, dividends, letters of credit or other obligations (“Primary Obligations”) of any other Person (the “Primary Obligor”) in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent, (a) to purchase any such Primary Obligation or any property constituting direct or indirect security therefore, (b) to advance or supply funds (i) for the purchase or payment of any such Primary Obligation or (ii) to maintain working capital or equity capital of the Primary Obligor or otherwise to maintain the financial condition or solvency of the Primary Obligor, (c) to purchase property, securities or services primarily for the purpose of assuring the obligee under any such Primary Obligation of the ability of the Primary Obligor to make payment of such Primary Obligation, or (d) otherwise to assure or hold harmless the obligee under such Primary Obligation against loss in respect thereof; provided, however, that the term Contingent Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business.

“Contracts” shall mean all contracts, leases, subleases, notes, bonds, mortgages, indentures, Permits and Licenses, non-competition agreements, joint venture or partnership agreements, powers of attorney, purchase orders, and all other agreements, arrangements and other instruments, in each case whether written or oral, to which such Person is a party or by which any of them or any of its assets are bound.

“Conversion Amount” shall mean one share of SEER stock for one REGS ownership interest; the total amount issued upon conversion shall equal 18,282,630 shares of SEER Common Stock.

“End Date” shall have the meaning set forth in Section 8.01 of this Agreement.

“Governmental Approval” shall mean the consent, approval, order or authorization of, or registration, declaration or filing with any court, administrative agency or commission or other Governmental Entity, authority or instrumentality, domestic or foreign.

“Governmental Entity” means the government of the United States of America, any other nation or any political subdivision thereof, whether foreign, state or local, and any agency, authority, instrumentality, regulatory body, court, tribunal, arbitrator, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

“Indebtedness” shall mean as to any Person and whether recourse is secured by or is otherwise available against all or only a portion of the assets of such Person and whether or not contingent, but without duplication: (a) every obligation of such Person for money borrowed; (b) every obligation of such Person evidenced by bonds, debentures, notes or other similar instruments, including obligations incurred in connection with the acquisition of property, assets or businesses; (c) every reimbursement obligation of such Person with respect to letters of credit, bankers’ acceptances or similar facilities issued for the account of such Person; (d) every obligation of such Person issued or assumed as the deferred purchase price of property or services (including securities repurchase agreements but excluding trade accounts payable or accrued liabilities arising in the ordinary course of business which are not more than 120 days overdue or which are being contested in good faith by appropriate proceedings and for which adequate reserves have been provided in accordance with GAAP); (e) every Capital Lease Obligation of such Person; (f) any obligation of such Person to pay any discount, interest, fees, indemnities, penalties, recourse, expenses or other amounts in connection with any sales by such Person unless such sales are on a non-recourse basis (as to collectibility) of (i) accounts or general intangibles for money due or to become due, (ii) chattel paper, instruments or documents creating or evidencing a right to payment of money or (iii) other receivables, whether pursuant to a purchase facility or otherwise, other than in connection with the disposition of the business operations of such Person relating thereto or a disposition of defaulted receivables for collection and not as a financing arrangement; (g) every obligation of such Person under any forward contract, futures contract, swap, option or other financing agreement or arrangement (including, without limitation, caps, floors, collars and similar agreements), the value of which is dependent upon interest rates, currency exchange rates, commodities or other indices (a “derivative contract”); (h) every obligation in respect of Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent that such Person is liable therefore as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent that the terms of such Indebtedness provide that such Person is not liable therefore and such terms are enforceable under applicable law; and (i) every Contingent Obligation of such Person with respect to Indebtedness of another Person.

“Interest” shall refer to a Limited Liability Company Interest as defined in the context of a sentence, and “Interest Holder” will be a holder of that Interest

“Laws” shall mean all foreign, federal, state and local statutes, laws, ordinances, regulations, rules, resolutions, orders, writs, injunctions, judgments and decrees applicable to the specified Person and to the businesses and assets thereof.

“License” shall mean any franchise, authorization, license, permit, certificate of occupancy, easement, variance, exemption, certificate, consent or approval of any Governmental Entity or other Person.

“Lien” shall mean any mortgage, pledge, assessment, security interest, lease, lien, adverse claim, levy, charge or other encumbrance of any kind.

“NRS” shall have the meaning set forth in the recitals of this Agreement.

“Person” shall mean any individual, sole proprietorship, partnership, joint venture, trust, unincorporated organization, limited liability company, association, corporation, institution, entity, party, Governmental Entity or any other juridical entity of any kind or nature whatsoever.

“Post-Closing Tax Period” means a taxable period (or portion thereof) that begins after the Closing Date.

“REGS” shall have the meaning set forth in the preamble to this Agreement and will constitute the combination of Tactical and REGS for purposes of this Agreement

“Resource Environmental Group Services” shall mean REGS, LLC, a Colorado limited liability company.

Material Adverse Effect” shall mean an event or change, individually or in the aggregate with other events or changes, that could reasonably be expected to have a material adverse effect on (a) the business, properties, prospects, condition (financial or otherwise) or results of operations of the entity taken as a whole (other than those events, changes or effects resulting from general economic conditions or the industry in which any party is engaged generally) or (b) the ability of any party to consummate the transactions contemplated hereby.

“SEER” shall have the meaning set forth in the preamble to this Agreement.

“SEER Common Stock” shall have the meaning set forth in the recitals to this agreement.

“SEER Common Stock Equivalents” shall have the meaning set forth in Section 3.02 of this Agreement.

“Subsidiary” shall mean any Person in which another Person, directly or indirectly, owns 50% of either the equity interests in or voting control of, such Person.

“Takeover Proposal” shall mean any proposal for a tender or exchange offer, Acquisition, consolidation, sale of all or substantially all of such party’s assets, sale of in excess of fifteen percent of the shares of capital stock or other business combination involving such party or any proposal or offer to acquire in any manner a substantial equity interest (including any interest exceeding fifteen percent of the equity outstanding) in, or all or substantially all of the assets of, such party other than the transactions contemplated by this Agreement.

“Taxes” means all federal, state, county, local, municipal, foreign and other taxes, assessments, duties or similar charges of any kind whatsoever, including all corporate franchise, income, gross receipts, occupation, windfall profits, sales, use, ad valorem, value-added, profits, license, withholding, payroll, employment, excise, premium, real property, personal property, customs, net worth, capital gains, transfer, stamp, documentary, social security, disability, environmental, alternative minimum, recapture and other taxes, and including all interest, penalties and additions imposed with respect thereto, whether disputed or not and including any obligations to indemnify or otherwise assume or succeed to the Tax liability of any Person, and any liability in respect of any Tax as a result of being a member of any affiliated, combined, consolidated, unitary or similar group.

“Tax Return” means any report, return, statement, estimate, informational return, declaration or other written information required to be supplied to a taxing authority in connection with Taxes.

“Taxing Authority” means any domestic, foreign, federal, national, state, county or municipal or other local government, any subdivision, agency, commission or authority thereof, or any quasi-governmental body exercising tax regulatory authority.

“Tactical” shall mean Tactical Cleaning Company, LLC”

“Transaction Documents” shall mean this Agreement

IN WITNESS WHEREOF, the parties hereto have caused this Acquisition Agreement to be duly executed as of the day and year first above written.

	INFINITY CAPITAL GROUP, INC.

	By:	/s/ Gregory H. Laborde
		Name: Gregory H. Laborde
	Title:	President

	STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

	By:	/s/ Gregory H. Laborde
		Name: Gregory H. Laborde
		Title: President

	REGS, LLC

	By:	/s/ J. John Combs
		Name: J. John Combs
		Title:Vice President

	TACTICAL CLEANING COMPANY, LLC

	By:	/s/ J. John Combs
		Name: J. John Combs
		Title:Vice President

REGS/Tactical Capitalization Sheet

Cardillo Enterprises, Inc.	7,216,315	0.394709
J. John Combs III	7,216,315	0.394709
Private Investment Partners/ Steve Bathgate	1,050,000	0.057432
Russ Coburn	100,000	0.00547
Chris Dieterich	200,000	0.010939
Nigel Hunter	1,250,000	0.068371
Ahmed Al-Neama	1,250,000	0.068371

Total Shares Outstanding	18,282,630

Debt		Lender	Amount
Type	Company	Name	Due

Capital Leases
	REGS	Creekridge Capital		5,096.94
	REGS	Park Western Lease 358601		30,191.25
	REGS	Park Western Lease 358602		10,131.85
	REGS	Park Western Lease 358603		16,886.41
	REGS	Park Western Lease 358604		18,288.73
	REGS	Marlin Lease 001-0185486-002		7,031.71
	REGS	Marlin Lease 001-0185486-003		10,754.24
		Total Capital Leases		98,381.13

Notes Payable
	REGS	Horizon Bank 15		447,925.14
	REGS	Horizon Bank 25		7,607.53
	REGS	John Deere		16,743.73
	REGS	Infinity Capital		50,000.00
	REGS	Jamie Temple		90,793.30
	REGS	Steve Bathgate		100,000.00
	REGS	GMAC 46679		775.98
	REGS	GMAC 47250		775.98
	REGS	GMAC 05440		5,222.18
	REGS	GMAC 73168		3,229.24
	TCC	Wells Fargo		103,636.63
	REGS	Redrock		1,070,000.00
		Total Notes Payable		1,896,709.71

Strategic Environmental & Energy Resources, Inc. 10-12b

Exhibit 99.1

STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

Consolidated Financial Statements

For the Years Ended December 31, 2012 and 2011

STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

Consolidated Financial Statements

		Page

Report of Independent Registered Public Accounting Firm		F-1

Consolidated Balance Sheets as of December 31, 2012 and 2011		F-2

Consolidated Statements of Operations for the Years Ended December 31, 2012 and 2011		F-3

Consolidated Statements of Stockholders’ Deficit for the Years Ended December 31, 2012 and 2011		F-4

Consolidated Statements of Cash Flows for the Years Ended December 31, 2012 and 2011		F-5

Notes to Consolidated Financial Statements		F-7

		Page

Condensed Consolidated Balance Sheets as of March 31, 2013 and December 31, 2012		F-26

Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2013 and 2012-Unaudited		F-27

Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2013 and 2012-Unaudited		F-28

Notes to Unaudited Condensed Consolidated Financial Statements		F-29

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and

Stockholders of Strategic Environmental & Energy Resources, Inc.

We have audited the accompanying consolidated balance sheets of Strategic Environmental & Energy Resources, Inc. as of December 31, 2012 and 2011, and the related consolidated statements of operations, stockholders’ deficit, and cash flows for the years then ended. Strategic Environmental & Energy Resources, Inc.’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, 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. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Strategic Environmental & Energy Resources, Inc. as of December 31, 2012 and 2011, and the consolidated results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

L J Soldinger Associates, LLC

Deer Park, Illinois

May 7, 2013

F-1

STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

CONSOLIDATED BALANCE SHEETS

ASSETS	December 31,
Current assets:	2012			2011
Cash	$	70,400		$	81,100
Cash - restricted		220,000
Accounts receivable, net of allowance for doubtful accounts of $92,900 and $299,700, respectively		1,173,800			478,100
Costs and estimated earnings in excess billings on uncompleted contracts		35,500			165,900
Inventory		46,000			2,200
Prepaid expenses and other assets		41,600			41,600
Total current assets		1,587,300			768,900

Property and equipment, net		752,100			796,800
Intangible assets, net		450,900			536,000
Other assets		9,400			9,700
TOTAL ASSETS	$	2,799,700		$	2,111,400

LIABILITIES & STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	1,323,300		$	1,418,900
Accrued liabilities		499,100			469,200
Billings in excess of costs and estimated earnings on uncompleted contracts		327,400			38,000
Current portion of payroll taxes payable		335,400			232,000
Current portion of notes payable and capital lease obligations		319,800			766,800
Notes payable - related parties, including accrued interest		190,400			255,800
Total current liabilities		2,995,400			3,180,700

Payroll taxes payable, net of current portion		745,400			903,600
Notes payable and capital lease obligations, net of current portion		281,600			69,100
Total liabilities		4,022,400			4,153,400

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; 40,349,400 and 27,484,000 shares issued and outstanding 2012 and 2011, respectively		40,300			27,500
Additional paid-in capital		10,632,200			8,036,600
Stock subscription receivable		(100,000	)		—
Accumulated deficit		(11,595,500	)		(10,106,100	)
Non-controlling interest		(199,700	)		—
Total stockholders’ deficit		(1,222,700	)		(2,042,000	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	2,799,700		$	2,111,400

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

F-2

STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS

	For the Year Ended December 31,
Revenue:	2012			2011
Products	$	1,439,800		$	1,788,200
Services		5,401,600			4,779,900
Total revenue		6,841,400			6,568,100

Operating expenses:
Products costs		1,037,800			1,239,000
Services costs		3,297,700			3,208,100
Selling, general and administrative expenses		4,127,200			3,352,300
Total operating expenses		8,462,700			7,799,400

Loss from operations		(1,621,300	)		(1,231,300	)

Other income (expenses):
Interest income		1,300			—
Interest expense		(303,900	)		(188,100	)
Penalties and late fees		(26,200	)		(104,600	)
Gain (loss) on conversion of debt to equity		305,800			40,900
Gain (loss) on sale of property and equipment		—			(63,200	)
Other		(44,800	)		(23,600	)
Total non-operating expenses, net		(67,800	)		(338,600	)

Net loss		(1,689,100	)		(1,569,900	)
Less: Net loss attributable to non-controlling interest		(199,700	)		—
Net loss attributable to SEER common stockholders	$	(1,489,400	)	$	(1,569,900	)

Net loss per share, basic and diluted	$	(0.05	)	$	(0.06	)

Weighted average shares outstanding – basic and diluted		32,963,000			26,056,100

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

F-3

STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC. CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)

	Preferred Stock				Common Stock				Additional Paid-in		Stock Subscription			Accumulated			Non-controlling			Total Stockholders’
	Shares		Amount		Shares		Amount		Capital		Receivable			Deficit			Interest			Deficit
Balances, January 1, 2011		—		—		24,763,300	$	24,800	$	7,336,400	$	—		$	(8,536,200	)	$	—		$	(1,175,000	)
Sale of common stock and warrants, net of fees						920,000		900		198,100					—						199,000
Issuance of common stock for services						460,000		500		45,900					—						46,400
Issuance of common stock for extension of non-binding agreement						100,000		100		49,900					—						50,000
Issuance of warrants for services										19,900					—						19,900
Stock-based compensation										171,100					—						171,100
Conversion of note payable into common stock						240,700		200		103,300					—						103,500
Issuance of common stock for purchase of asset						1,000,000		1,000		99,000					—						100,000
Debt discount on notes payable										13,000					—						13,000
Net loss															(1,569,900	)					(1,569,900	)
Balances, December 31, 2011		—		—		27,484,000		27,500		8,036,600		—			(10,106,100	)		—			(2,042,000	)
Sale of common stock and warrants, net of fees						6,225,000		6,200		1,308,800					—						1,315,000
Sale of common stock and warrants with bridge loans						350,000		300							—						300
Debt discount related to bridge loans										93,900					—						93,900
Conversion of bridge loans and related interest into common stock						1,790,400		1,800		356,200					—						358,000
Conversion of note payable into common stock						900,000		900		147,600					—						148,500
Issuance of common stock for note receivable						500,000		500		99,500		(100,000	)		—						—
Issuance of common stock for services						3,100,000		3,100		508,400					—						511,500
Vesting of warrants for services								—		21,200					—						21,200
Stock-based compensation								—		60,000					—						60,000
Net loss															(1,489,400	)		(199,700	)		(1,689,100	)
Balances, December 31, 2012		—		—		40,349,400	$	40,300	$	10,632,200	$	(100,000	)	$	(11,595,500	)	$	(199,700	)	$	(1,222,700	)

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:	2012			2011
Net loss	$	(1,689,100	)	$	(1,569,900	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Provision for doubtful accounts receivable		115,600			330,200
Depreciation and amortization		327,900			399,400
Stock-based compensation expense		592,800			287,400
Loss on sale of property and equipment		—			63,200
Gain on extinguishment of debt		(305,800	)		(40,900	)
Amortization of debt discount		99,900			7,200
Changes in operating assets and liabilities:
Cash - restricted		(220,000	)		—
Accounts receivable		(816,400	)		113,300
Costs in Excess of billings on uncompleted contracts		130,400			(24,000	)
Inventory		(43,800	)		9,000
Prepaid expenses and other assets		300			84,100
Accounts payable		(28,700	)		342,200
Accrued liabilities and related party notes payable accrued interest		156,400			71,900
Billings in excess of revenue on uncompleted contracts		289,400			(170,100	)
Payroll taxes payable		(54,700	)		22,200
Net cash used in operating activities		(1,445,800	)		(74,800	)

Cash flows from investing activities:
Purchase of property and equipment		(76,900	)		(100,600	)
Proceeds the sale of property and equipment		—			7,500
Net cash used in investing activities		(76,900	)		(93,100	)

Cash flows from financing activities:
Proceeds from notes payable		575,000			105,000
Payments of notes payments and capital lease obligations		(308,500	)		(173,300	)
Proceeds from related party notes payable		—			61,400
Payments of related party notes payable and accrued interest		(69,500	)		(15,900	)
Proceeds from the sale of common stock and warrants, net of expenses		1,315,000			199,000
Net cash provided by financing activities		1,512,000			176,200

Net increase (decrease) in cash		(10,700	)		8,300
Cash at the beginning of year		81,100			72,800
Cash at the end of year	$	70,400		$	81,100

F-5

STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC. CONSOLIDATED STATEMENT OF CASH FLOWS - Continued

Supplemental disclosures of cash flow information:

Cash paid for interest	$	74,500	$	35,800

Supplemental disclosure of noncash financing and investing activities:

Accounts receivable offset against notes payable	$	5,000	$	—
Conversion of accounts payable and accrued expenses to notes payable	$	66,900	$	—
Conversion of accrued interest to note payable	$	—	$	3,000
Conversion of notes payable and accrued interest to common stock	$	812,400	$	144,500
Discount on note payable	$	99,900	$	5,700
Disposition of property, equipment, other assets and accounts payable under settlement agreement	$	—	$	154,800
Purchase of assets under capital leases	$	121,300	$	10,200
Purchase of intangible assets for common stock	$	—	$	100,000
Transfer of prepaid asset to equipment	$	—	$	1,800

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

F-6

STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

Notes to Consolidated Financial Statements

NOTE 1 - ORGANIZATION AND FINANCIAL CONDITION

Organization

Strategic Environmental & Energy Resources, Inc. (“SEER”, “we” or the “Company”), a Nevada corporation, is a provider of industrial products and services in the environmental, energy, and rail transportation sectors. SEER has three wholly-owned operating subsidiaries which provide industrial services to companies in the petroleum, industrial, manufacturing, and medical industries: REGS, LLC (d/b/a Resource Environmental Group Services (“REGS”)) provides mobile cleaning services to refineries and other entities in Colorado, Wyoming, Oklahoma, Kansa and Utah and also operates a site in Utah, on behalf of another company, to treat frac water resulting from oil and gas exploration; Tactical Cleaning Company, LLC (“TCC”) provides cleaning services to railcar tankers from its sites in Colorado and Kansas; MV, LLC (“MV”), located in Colorado, designs and builds emission and odor control units for refineries, municipalities and other corporate entities; and two majority-owned subsidiaries, Paragon Waste Solutions, LLC (“PWS”) a newly formed operating company, owned 54% by SEER (see Note 7) th at is developing specific opportunities to deploy and commercialize certain patent-pending technologies for a cold plasma oxidation process that makes possible the clean destruction of hazardous chemical and biological waste ( i.e ., hospital red bag waste) without traditional incineration with harmful emissions and BeneFuels, LLC (“BeneFuels”), formed in February 2013, owned 90% by SEER and was formed to focus specifically on treating biogas for conversion to pipeline quality gas and/or CNG for fleet vehicles. BeneFuels had no operations as of May 7, 2013.

Principals of Consolidation

The accompanying consolidated financial statements include the accounts of SEER, its wholly-owned subsidiaries, REGS, TCC and MV and its majority-owned subsidiaries PWS and BeneFuels, since their respective acquisition or formation dates. All material intercompany accounts, transactions, and profits have been eliminated in consolidation.

Basis of Presentation- Liquidity

As shown in the accompanying consolidated financial statements, the Company has experienced recurring losses, and has accumulated a deficit of approximately $11.6millionas of December 31, 2012 and for the years ended December 31, 2012, and 2011, we incurred net losses of approximately $1.7million and $1.57 million, respectively. As of December 31, 2012 and 2011, our current liabilities exceeded our current assets by $1.4 million and $2.4 million, respectively, and our total liabilities exceeded our total assets by $1.2 million and $2 million, respectively.

Realization of a major portion of our assets as of December 31, 2012, is dependent upon our continued operations. Accordingly, we have undertaken a number of specific steps to continue to operate as a going concern. In 2012, we raised approximately $1.3 million through the sale of common stock and converted approximately $.5 million in debt to equity. In addition, we have focused 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. We made additions to our senior management team to support these initiatives, and focused on streamlining our business model to improve profitability. We also increased our business development efforts in MV to address opportunities identified in expanding markets attributable to increased interest in energy conservation and emission control regulations. For the period January 1, 2013 through April 26, 2013, we raised approximately $516,000 in equity financing through the sale of common stock and management plans to raise additional equity financing through the sale of common stock. There can be no assurance that the Company will achieve the desired result of net income and positive cash flow from operations in future years. Management believes that current working capital and proceeds from the sale of common stock in 2013 will be sufficient to allow the Company to maintain its operations through December 31, 2013 and into the foreseeable future.

Reclassifications

Certain reclassifications have been made in the 2011consolidated financial statements to conform to the 2012 presentation.

F-7

STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

Notes to Consolidated Financial Statements

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 carrying amount of intangible assets; valuation allowances and reserves for receivables and inventory and deferred income taxes; revenue recognition related to contracts accounted for under the percentage of completion method; share-based compensation; and loss contingencies, including those related to litigation. Actual results could differ from those estimates.

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. As of December 31, 2012 and 2011, we did not hold any assets that would be deemed to be cash equivalents.

Restricted Cash

At December 31, 2012, the company had $220,000 of self-imposed restricted cash that was maintained by its attorney in a special trust account created for the purpose of making payments to the IRS in accordance with an installment plan (see Note 8).

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 $92,900 and $299,700 has been reserved as of December 31, 2012 and 2011, respectively.

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, rail transport, biogas generating 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, 2012, we do not believe that we have significant credit risk.

As of December 31, 2012, we had one customer who comprised approximately 38% of our accounts receivable. As of December 31, 2011, we had one customer who comprised 38%, respectively, of our accounts receivable.

As of December 31, 2012, we had two customers with sales in excess of 10% of our revenue and combined were in excess of 27%. We did not have any customers with sales in excess of 10% of our revenue in 2011.

F-8

STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

Notes to Consolidated Financial Statements

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued

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. We believe the amounts due to related parties also approximate their fair value, as their carried interest rates are consistent with those of our notes payable with third parties.

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.

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.

Inventory

Inventory is stated at the lower of cost or market, generally using the specific identification method. Our inventory is primarily comprised of accumulated costs related to MV contracts. These costs represent recoverable costs incurred for production, including materials, engineering time billed as incurred and allocable operating overhead. Inventories are reviewed periodically and items considered to be slow-moving or obsolete are reduced to estimated net realizable value through an appropriate reserve. At December 31, 2012 and 2011, there was no inventory reserve.

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.

F-9

STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

Notes to Consolidated Financial Statements

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued

Property and Equipment, continued

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.

Intangible Assets

Intangible assets with estimable useful lives are amortized using the straight-line method over their respective estimated useful lives verses their estimated residual values, and are reviewed for impairment annually, or whenever events or circumstances indicate their carrying amount may not be recoverable. We conduct our annual impairment test on December 31 of each year. The Company has evaluated its intangibles for impairment and has determined that intangibles were not impaired.

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. 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. No impairment was determined as of December 31, 2012 and 2011.

Revenue Recognition

We recognize revenue related to contract projects and services when all of the following criteria are met: (i) persuasive evidence of an agreement exists, (ii) delivery has occurred or services have been rendered, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured. Our revenue is primarily comprised of services related to industrial cleaning and railcar cleaning, which we recognize as services are rendered.

Product revenue generated from projects, which include the manufacturing of products, for removal and treatment of hazardous vapor and gasses is accounted for under the percentage-of-completion method for projects with durations in excess of three months and the completed-contract method for all other projects. Total estimated revenue includes all of the following: (1) the basic contract price (2) contract options (3) change orders (4) claims and (5) contract provisions for penalties and incentive payments, including award fees and performance incentives.

Under the percentage-of-completion method, we recognize revenue primarily based on the ratio of costs incurred to date to total estimated contract costs. Performance incentives are included in our estimates of revenue using the percentage-of-completion method when their realization is reasonably assured. Cancellation fees are included in our estimates of revenue using the percentage-of-completion method when the cancellation notice is received from the client.

Provisions for estimated losses on uncompleted contracts are made in the period in which the losses are identified. The cumulative effect of changes to estimated contract profit and loss, including those arising from contract penalty provisions such as liquidated damages, final contract settlements, warranty claims and reviews of our costs performed by clients, are recognized in the period in which the revisions are identified. To the extent that these adjustments result in a reduction or elimination of previously reported profits, we report such a change by recognizing a charge against current earnings.

F-10

STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

Notes to Consolidated Financial Statements

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued

Revenue Recognition, continued

For contracts accounted for under the percentage-of-completion method, we include in current assets and current liabilities amounts related to construction 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. Billings in excess of costs and estimated earnings on uncompleted contracts represents the excess of billings to date over the amount of contract costs and profits recognized to date, and are recognized as a current liability.

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 as a cumulative adjustment to compensation expenses and recorded in the period that estimates are revised.

Research and Development

Research and development costs are charged to expense as incurred. Such expenses were $416,000 and $2,000, respectively, for the years ended December 31, 2012 and 2011.

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. The current and deferred tax provision is allocated among the members of the consolidated group on the separate income tax return basis.

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, 2012 and 2011 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, 2012 and 2011. The Company expects no material changes to unrecognized tax positions within the next twelve months.

The Company has not filed federal and state tax returns since inception. The tax periods for the years ending December 31, 2008 through 2012 are open to examination by federal and state authorities.

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.

F-11

STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

Notes to Consolidated Financial Statements

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued

Recently issued accounting pronouncements, continued

In December 2011, the FASB issued an amendment to the accounting guidance for disclosure of offsetting assets and liabilities and related arrangements. The amendment expands the disclosure requirements in that entities will be required to disclose both gross information and net information about both instruments and transactions eligible for offset in the statement of financial position and instruments and transactions subject to an agreement similar to a master netting arrangement. The amendment is effective for fiscal years, and interim periods within those years, beginning on or after January 1, 2013, and shall be applied retrospectively. We do not expect the adoption of this accounting pronouncement to have a material impact on our financial statements when implemented.

In July 2012, the Financial Accounting Standards Board (“FASB”) issued guidance which amends the guidance on testing indefinite-lived intangible assets, other than goodwill, for impairment. Under the new guidance, an entity testing an indefinite-lived intangible asset for impairment has the option of performing a qualitative assessment before calculating the fair value of the asset. If the entity determines, on the basis of qualitative factors, that the fair value of the indefinite-lived intangible asset is not more likely than not impaired, the entity would not need to calculate the fair value of the asset. The guidance is effective for the Company for our annual impairment test for fiscal 2014. The adoption of this guidance is not expected to have a significant impact on our consolidated financial position, results of operations, or cash flows.

In October 2012, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2012-04, “Technical Corrections and Improvements” in Accounting Standards Update No. 2012-04. The amendments in this update cover a wide range of Topics in the Accounting Standards Codification. These amendments include technical corrections and improvements to the Accounting Standards Codification and conforming amendments related to fair value measurements. The amendments in this update will be effective for fiscal periods beginning after December 15, 2012. The adoption of ASU 2012-04 is not expected to have a material impact on our financial position or results of operations.

In March 2013, the FASB issued ASU 2013-05, “Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity,” (“ASU 2013-05”). The objective of ASU 2013-05 is to clarify the applicable guidance for the release into net income of the cumulative translation adjustment upon derecognition of a subsidiary or group of assets within a foreign entity. ASU 2013-05 is effective for annual and interim reporting periods beginning after December 15, 2013 with early adoption permitted. The Company is currently evaluating the impact that the adoption will have on the determination or reporting of its financial results.

Risks From Concentrations Not Noted Elsewhere

In 2012, 66% of the revenues of TCC were derived from two customers.

F-12

STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

Notes to Consolidated Financial Statements

NOTE 3 - PROPERTY AND EQUIPMENT

Property and equipment was comprised of the following:

	December 31,
	2012			2011

Field and shop equipment	$	1,051,900		$	1,081,200
Vehicles		382,500			421,600
Furniture and office equipment		24,500			31,000
Leasehold improvements		55,500			55,500
		1,514,400			1,589,300
Less: accumulated depreciation and amortization		(762,300	)		(792,500	)
Property and equipment, net	$	752,100		$	796,800

Depreciation expense and amortization of leasehold improvements for the years ended December 31, 2012 and 2011, was $242,800 and $295,400, respectively.

Property and equipment included the following amounts for leases that have been capitalized at December 31:

	2012			2011

Field and shop equipment	$	148,500		$	27,200
Less: accumulated amortization		(29,500	)		(13,100	)
	$	119,000		$	14,100

NOTE 4 – INTANGIBLE ASSETS

Intangible assets were comprised of the following:

	December 31, 2012
	Gross carrying amount		Accumulated amortization			Net carrying value

Customer list	$	42,500	$	(27,800	)	$	14,700
Technology		712,100		(294,700	)		417,400
Trade name		54,600		(35,800	)		18,800

	$	809,200	$	(358,300	)	$	450,900

	December 31, 2011
	Gross carrying amount		Accumulated amortization			Net carrying value

Customer list	$	42,500	$	(21,800	)	$	20,700
Technology		712,100		(223,500	)		488,600
Trade name		54,600		(27,900	)		26,700

	$	809,200	$	(273,200	)	$	536,000

F-13

STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

Notes to Consolidated Financial Statements

NOTE 4 – INTANGIBLE ASSETS, continued

The estimated useful lives of the intangible assets range from seven to ten years. Amortization expense was $85,100and $104,000 for the years ended December 31, 2012 and 2011, respectively. The estimated aggregate amortization expense for each of the next five years is as follows:

2013	$	85,100
2014		85,100
2015		77,000
2016		71,200
2017		71,200
Thereafter		61,300
	$	450,900

NOTE 5 - ACCRUED LIABILITIES

Accrued liabilities were comprised of the following:

	December 31,
	2012		2011

Accrued compensation and related taxes	$	385,100	$	144,400
Accrued interest		61,600		142,200
Accrued material and other job related costs		30,700		172,200
Other		21,700		10,400
	$	499,100	$	469,200

NOTE 6 - UNCOMPLETED CONTRACTS

Costs, estimated earnings and billings on uncompleted contracts are as follows:

	December 31,
	2012			2011

Revenue Recognized	$	63,800		$	477,200
Less: Billings to date		(28,300	)		(311,300	)
Costs and estimated earnings in excess of billings on uncompleted contracts	$	35,500		$	165,900

Billings to date	$	775,800		$	69,500
Revenue recognized		(448,400	)		(31,500	)
Billings in excess of costs and estimated earnings on uncompleted contracts	$	327,400		$	38,000

F-14

STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

Notes to Consolidated Financial Statements

NOTE 7– INVESTMENT IN PARAGON WASTE SOLUTIONS LLC

In 2010, the Company and Black Stone Management Services, Inc. (“Black Stone”) formed PWS whereby 1,000,000 membership units were issued, the Company acquired 60% (600,000) of the membership units in PWS and Black Stone acquired 40% (400,000) of the membership units in PWS, respectively. In June 2012, the Company and Blackstone each allocated 10% of their respective membership units in PWS to two individuals, one of which is an officer of the Company and one which is a shareholder of the Company and an officer of a subsidiary. There was no value to the units at the time of the allocation. As of December 31, 2012 the Company owns 54% of the membership units, Black Stone 36% of the membership units and two individuals, one of which is an officer of the Company and one who is a shareholder, each own 5% each of the membership units.

In August, 2011, we acquired certain waste destruction technology intellectual property (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.

During 2012, we have provided approximately $415,000 in funding to PWS for further development and construction of a prototype commercial waste destruction unit. Black Stone has made no capital contributions or other funding to PWS. The intent of the operating agreement is that we will provide the funding as an advance against future earnings distributions made by PWS.

NOTE 8 - PAYROLL TAXES PAYABLE

In 2009 and 2010, the Company became delinquent for unpaid federal employer and employee payroll taxes and accrued interest and penalties related to the unpaid payroll taxes. Additionally, we had amounts outstanding for certain unpaid state payroll taxes and accrued interest and penalties applicable to 2012 and 2011. All interest and penalties related to the delinquent federal and state payroll taxes are included in the section labeled “other income and expenses” in the consolidated statement of operations.

In September 2011, we received approval from the IRS to begin paying our outstanding federal payroll tax and related interest and penalties liabilities totaling approximately $971,000, for the aforementioned years in installments (the “Installment Plan”). Under the Installment Plan, we were required to pay minimum monthly installments of $12,500 commencing September 2011, which increased to $25,000 per month in September 2012, until the liability is paid in full. Through the duration of the Installment Plan, the IRS continues to charge penalties and interest at statutory rates. If the conditions of the Installment Plan are not met, the IRS may cancel it and may demand the outstanding liability to be repaid through a levy on income, bank accounts or other assets, or by seizing certain of our assets. Additionally, the IRS has filed a notice of federal tax lien against certain of our assets to satisfy the obligation. The IRS is to release this lien if and when we pay the full amount due. As of December 31, 2012 and 2011, the outstanding balance due to the IRS was $1,045,400, and $1,103,500, respectively. Two of the officers of the Company also have liability exposure for a portion of the taxes if the Company does not pay them.

As of December 31, 2012 and 2011, the amounts due for past due state payroll taxes, interest and penalties, was $35,400, and $32,100, respectively.

F-15

STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

Notes to Consolidated Financial Statements

NOTE 9 – DEBT

In June 2011, we issued an unsecured promissory note to a third party in the amount of $40,000 (the “June 2011 Note”) bearing interest at a rate of 10% per annum and a three year warrant to purchase 13,000 shares of our common stock at an exercise price of $1.00 per share. In addition, a second note payable, to the same third party, in the amount of $25,000 plus $3,000 of accrued interest was also converted into the June 2011 Note, resulting in a new principal balance of $68,000. Principal payments were due beginning November 2011 and the June 2011 Note is in default as of December 31, 2012, as no payments have been made to date. We valued the warrant at $170 using the Black-Scholes model and recorded this amount as a debt discount. The debt discount was fully amortized during 2011.

In December 2011, we issued a secured promissory note to a third party in the amount of $50,000 (the “December 2011 Note”) bearing interest at 18% per year, secured by certain assets in TCC and a five year warrant to purchase 25,000 shares of our common stock at an exercise price of $0.50 per share. We valued the warrant at $5,749 using the Black-Scholes model and recorded this amount as a debt discount. The December 2011 Note was paid in full in June 2012.

The Company entered into a loan agreement evidenced by a convertible secured promissory note with Advanced Technology Materials, Inc. on February 14, 2012. The amount of the convertible secured promissory note is $225,000. The loan agreement allows for an additional $225,000 to be borrowed upon meeting certain defined milestones and stipulates the Company provide the lenders, among other things, a security agreement which also identifies the collateral, a registration rights agreement granting piggy-back registration rights to the lender, a development agreement and use the loan proceeds for projects and transactions contemplated in the term sheet and development agreement. The note bears interest at 5 percent per annum. The entire loan and/or unpaid balance of the loan and accrued interest can be converted into the Company’s common stock at $0.50 per share at any time at the option of the holder. However, if the lender does not convert any of the principal or interest into common stock then $112,500 of principal plus accrued interest will be due on demand on or after December 31, 2014.

F-16

STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

Notes to Consolidated Financial Statements

NOTE 9 – DEBT, continued

Debt as of December 31, 2012 and 2011, was comprised of the following:

	2012			2011

June 2011 Note (See above)	$	68,000		$	68,000

December 2011 Note, net of debt discount (See above)		—			44,200

Note payable dated January 2008, unsecured, default interest rate of 10% per annum, 18 monthly payments of $22,315 commencing March 2008, maturing August 2009. Note payable was in default as of December 31, 2011. (A)		—			340,000

Note payable dated February 2012, interest at 5% per annum, $112,500 is due December 31, 2014, convertible in whole or in part to common stock at $.50 per share.		225,000			—

Promissory note dated April 2008, secured by certain of our assets, bearing interest at 6.65% per annum; 60 monthly payments of $14,276, maturing April 2013.		70,200			231,000

Promissory note dated December 2009, unsecured, bearing interest at 6% per annum, six monthly payments ranging from $10,000 to $25,000 commencing February 2010, balloon payment for outstanding balance due July 2010. The promissory note is in default as of December 31, 2012 and 2011.		104,200			109,200

Promissory note dated November 2010, unsecured, bearing interest at 8% per annum, balloon payment for outstanding balance due October 2011. The promissory note is in default as of December 31, 2012 and 2011.		25,000			25,000

Capital lease obligations, secured by certain assets, maturing September 2011 through August 2016		109,000			18,500
Total notes payable and capital lease obligation		601,400			835,900

Less: current portion, including debt discount		(319,800	)		(766,800	)
Notes payable and capital lease obligation, long-term	$	281,600		$	69,100

In June 2012, a final payment of $25,000 was made and we and the note holder agreed to a settlement amount for all principal and interest due of $446,000, which the notes holder converted into 900,000 shares of our common stock. Debt maturities as of December 31, 2012 are as follows:

Year:
2013	$	319,800
2014		270,200
2015		9,800
2016		1,600
	$	601,400

F-17

STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

Notes to Consolidated Financial Statements

NOTE 9 – DEBT, continued

Future minimum lease payments under capital leases, which include bargain purchase options, are as follows at December 31, 2012:

2013	$	59,900
2014		48,400
2015		10,100
2016		1,700
Total minimum lease payments		120,100
Amount representing interest		11,100
Present value of lease payments		109,000
Less current portion		(52,400	)
Non-current portion	$	56,600

NOTE 10 – RELATED PARTY TRANSACTIONS

Notes payable, related parties

In February 2011, we executed a secured, promissory note with one of our officers in the amount of $50,000 (the “2011 Officer Note”). The 2011 Officer Note is secured by certain assets in MV and bears interest at 8% per annum and was originally due on August 15, 2011. It is currently due on demand. As additional consideration, we issued to the officer a five-year warrant to purchase 25,000 shares of our common stock at an exercise price of $0.60 per share. We valued the warrant at approximately $6,000 using the Black-Scholes model and recorded this amount as a debt discount. The debt discount was fully amortized during 2011.

Notes payable, related parties and accrued interest due to certain related parties as of December 31, 2012 and 2011areas follows:

	2012		2011

Note payable dated February 2004, bearing interest at 8% per annum, originally due January 2008; assigned to CEO by a third party in 2010; due on demand, in default	$	97,000	$	97,000

Notes payable due to our CEO, bearing interest at 8% per annum, originally due February and March 2009; due on demand, in default		—		42,700

Note payable due to President of our subsidiary, REGS, interest at 8% per annum, originally due February 2009, in default		4,200		12,200

Note payable due to President of our subsidiary, REGS, interest at 8% per annum, due December 2013		—		11,400

2011 Officer Note (see description above), in default		50,000		50,000

Accrued interest		39,200		42,500

	$	190,400	$	255,800

We believe the stated interest rates on the related party notes payable represent reasonable market rates based on the note payable arrangements we have executed with third parties.

F-18

STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

Notes to Consolidated Financial Statements

NOTE 11 - COMMITMENTS AND CONTINGENCIES

Operating lease commitments

Future commitments under non-cancellable operating leases for office and warehouse space as of December 31, 2012are as follows:

Year
2013	$	188,200
2014		133,500
2015		120,000
2016		120,000
2017		120,000
Thereafter		415,000
Total	$	1,096,700

For the years ended December 31, 2012 and 2011, rent expense was $292,100 and $372,000, respectively.

Litigation

In 2011, a former employee filed suit in the United States District Court for the District of Colorado, in which general allegations of discrimination were made against us arising out of the individual’s employment with us. In2011, we settled this claim for a cash payment of $33,000 and the issuance of 60,000 shares of our common stock valued at approximately $12,000.

NOTE 12–EQUITY TRANSACTIONS

Common Stock – Authorized common stock of the Company consists of 70,000,000 shares of $.001 par value, of which 40,349,400 shares were issued and outstanding at December 31, 2012.

Preferred Stock – Authorized preferred stock consists of 5,000,000 shares of preferred stock, $.001 par value, no shares of preferred stock are issued and outstanding.

2012 Common Stock Transactions

During 2012, we executed subscription agreements for the sale of units in various private placements. Each unit was priced at $50,000 and was comprised of 250,000 shares our common stock and 125,000 warrants. Each warrant is exercisable for a period of five years at an exercise price of $0.50 per share. Under the 2012 Private Placements, we sold a total of 5,825,000 shares of common stock and 2,912,500 warrants for net cash proceeds of $1,165,000. In 2012 we also sold 200,000 shares of our common stock at $.50 per share to a private investor for cash proceeds of $100,000. In December 2012, we initiated a new private placement comprised of 200,000 shares and 100,000 warrants for $50,000. One unit was subscribed to in 2012.

During 2012, the Company received a subscription receivable of $100,000 for the purchase of two units consisting of 500,000 shares of common stock and 250,000 warrants. As of December 31, 2012 the subscription receivable was still outstanding and the receivable is reported in stockholder’s equity.

During 2012, the Company issued 3.1 million shares of common stock for services valued at $512,000.

During 2012, the Company issued 900,000 shares of common stock upon the conversion of a delinquent note payable of $446,500 resulting in a gain on debt settlement of $305,800.

F-19

STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

Notes to Consolidated Financial Statements

NOTE 12 – EQUITY TRANSACTIONS, continued

2012 Common Stock Transactions, continued

During 2012, the Company received $350,000 in return for issuing convertible debt. As an inducement to enter into the convertible debt, the convertible note holders received 350,000 shares of common stock and warrants to purchase 350,000 shares of common stock at $.50 per share exercisable for a period of 5 years. In 2012, the convertible debt and accrued interest totaling $358,100 was converted into 1,790,400 shares of common stock. The Company recorded a discount related to the common stock, warrants and beneficial conversion feature which was fully amortized upon conversion.

2011 Common Stock Transactions

During the period from May through August 2011, we executed subscription agreements for the sale of units at a price of $50,000 per unit in a private placement (the “2011 Private Placement”). Each unit was comprised of 250,000 shares our common stock and 250,000 warrants to purchase a share of our common stock at an exercise price of $0.50 per share for a period of three years from the date the warrant was issued. Under the 2011 Private Placement, we sold total of 820,000 shares of our common stock and 820,000 warrants for net cash proceeds of $149,000. As compensation for the 2011 Private Placement, we issued the broker 320,000 shares of our common stock and warrants to purchase 320,000 shares of common stock. The compensation was valued at $15,000. The warrants are exercisable for a period of three years at an exercise price of $0.50 per share.

In October 2011, we sold 100,000 shares of our common stock at $.50 per share to a private investor for cash proceeds of $50,000.

In July 2011, we executed a non-binding letter of intent to acquire a company. In December 2011, we issued 100,000 shares of our common stock, valued at $.50 per share, to extend the term of a non-binding letter of intent until April 2012. The transaction was not consummated, and the letter of intent expired.

In 2011, the Company settled a claim of discrimination by a former employee for a cash payment of $33,000 and the issued 60,000 shares of common stock valued at $12,000.

In 2011 the Company settled a debt by issuing 240,700 shares of common stock valued at $103,500, which resulted in a gain of $41,000.

During the period from January through August 2011, we issued a total of 80,000 shares of our common stock to Black Stone, a related party, for consulting services, valued at $34,400.

Warrants

In September 2010 the Company issued warrants to purchase 250,000 of the Company’s common stock, 115,301 vested in 2011 and 48,217 in 2012. The Company recorded consulting expense of $18,900 and $6,900 in 2011 and 2012, respectively. In 2012 the Company issued 200,000 warrants, 150,000 vested in 2012 and 50,000 vested in 2013. The exercise price is $0.40. The Company recorded $14,300 of expense.

In June 2011, for consulting services rendered by a third party, we issued a five year warrant to purchase 50,000 shares of our common stock at an exercise price of $1.00 per share for consulting services. We valued the warrant at $1,063 using the Black-Scholes model and recorded the charge to our consolidated statement of operations upon issuance of the warrant.

F-20

STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

Notes to Consolidated Financial Statements

NOTE 12 – EQUITY TRANSACTIONS, continued

Warrants, continued

A summary of warrant activity for the year ended December 31, 2012 and December 31, 2011 is presented as follows:

	Number of			Exercise
	Warrants			Price

Warrants Outstanding at January 1, 2011		2,389,000		$	1.00 to $1.50
Issued		1,253,000		$	0.50 to $1.00
Exercised		—
Forfeited/expired/canceled		(725,000	)		—
Warrants Outstanding at January 1, 2012		2,917,000		$	0.50 to $1.50
Issued		3,562,500		$	0.40 to $0.50
Exercised		—			—
Forfeited/expired/canceled		(140,000	)		—

Warrants Outstanding at December 31, 2012		6,339,500		$	0.40 to $1.50

NOTE 13 – STOCK-BASED COMPENSATION AND EMPLOYEE BENEFIT PLAN

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 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: expected stock price volatility, the expected pre-vesting forfeiture rate, and the expected option term (the amount of time from the grant date until the options are exercised or expire). 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 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.

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.

Share-based compensation expense recognized in the statements of operations is based on awards ultimately expected to vest, which considers estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company recognizes the expense or benefit from the effect of adjusting the estimated forfeiture rate in the period that the forfeiture estimate changes.

F-21

STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

Notes to Consolidated Financial Statements

NOTE 13 – STOCK-BASED COMPENSATION AND EMPLOYEE BENEFIT PLAN, continued

The weighted average estimated fair value of stock option grants and the weighted average assumptions that were used in calculating such values for the years ended December 31, 2012 and 2011 are as follows:

	2012			2011

Risk-free interest rate		.36	%		.6	%
Expected volatility		77	%		77	%
Expected life (in years)		3.67			2.5
Dividend rate		0			0
Weighted-average estimated fair value per award	$	.05		$	.02

For the years ended December 31, 2012 and 2011, we recorded stock-based compensation of $60,100 and $171,100, respectively, which is included in selling, general and administrative expense in our consolidated statements of operations.

A summary of stock option activity for the year ended December 31, 2012 is presented as follows:

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life	Weighted Average Grant Date Fair Value Value

Outstanding at January 1, 2012		752,667		$	1.01	2.4 years	$	.47
Granted		1,800,000		$	.50	3.7 years	$	.05
Exercised		—			—
Forfeited/expired/canceled		(318,667	)	$	1.00	1.4 years
Outstanding at December 31, 2012		2,234,000		$	.60	2.4 years	$	.13
Vested and exercisable at December 31, 2012		1,242,026		$	.68	2.14 years	$	.19

A summary of stock option activity for the year ended December 31, 2011 is presented as follows:

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life	Weighted Average Grant Date Fair Value

Outstanding at January 1, 2011		962,667		$	1.00	3.4 years	$	.57
Granted		132,000		$	1.00	2.5 years	$	.02
Exercised		—			—
Forfeited/expired/canceled		(342,000	)		1.00	2.4 years
Outstanding at December 31, 2011		752,667		$	1.00	2.4 years	$	.47
Vested and exercisable at December 31, 2011		692,061		$	1.00	2.4 years	$	.51

As of December 31, 2012, there was approximately $23,000 of total unrecognized compensation cost related to non-vested stock options that is expected to be recognized over a weighted-average period of approximately 2.0 years.

F-22

STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

Notes to Consolidated Financial Statements

NOTE 13 – STOCK-BASED COMPENSATION AND EMPLOYEE BENEFIT PLAN, continued

Employee Benefit Plan

We have a defined contribution 401(k) plan that covers substantially all employees. Additionally, at the discretion of management, we may make contributions to eligible participants, as defined. During the years ended December 31, 2012 and 2011, we made contributions of approximately $30,750and $13,800, respectively.

NOTE 14 – NET 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 all years presented in the consolidated financial statements, all potentially dilutive securities have been excluded from the diluted share calculations as they were anti-dilutive as a result of the net losses incurred for the respective years. Accordingly, basic shares equal diluted shares for all years presented.

Potentially dilutive securities were comprised of the following:

	December 31,
	2012		2011

Warrants		6,339,500		2,917,000
Options		2,234,000		752,667
Convertible notes payable		225,000		900,000
		8,798,500		4,569,667

NOTE 15 - SEGMENT INFORMATION AND MAJOR CUSTOMERS

We operate in three business segments; industrial cleaning, railcar cleaning, and environmental solutions. The composition of our reportable segments is consistent with that used by our chief operating decision maker to evaluate performance and allocate resources. All of our operations are located in the U.S. We have allocated corporate selling, general and administrative expenses, interest expense, depreciation and amortization and stock-based compensation to the segments based on a percentage of a segment’s revenue to total consolidated revenue. All intercompany transactions have been eliminated.

F-23

STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

Notes to Consolidated Financial Statements

NOTE 15 - SEGMENT INFORMATION AND MAJOR CUSTOMERS continued

Segment information as of December 31, 2012 and 2011, and for the years then ended is as follows:

2012	Industrial			Railcar		Environmental			Solid
	Cleaning			Cleaning		Solutions			Waste			Corporate			Total

Revenue	$	3,064,700		$	2,336,900	$	1,439,800		$	—		$	—		$	6,841,400
Depreciation and amortization (1)	$	172,400		$	29,500	$	116,000		$	—		$	10,000		$	327,900
Interest expense	$	121,900		$	41,200	$	13,100		$	—		$	127,700		$	303,900
Stock-based compensation	$	—		$	—	$	—		$	—		$	571,600		$	571,600
Net income (loss)	$	(145,300	)	$	397,200	$	(142,000	)	$	(434,200	)	$	(1,364,800	)	$	(1,689,100	)
Capital expenditures (cash and noncash)	$	6,300		$	1,700	$	68,900		$	—		$	—		$	76,900
Total assets	$	1,350,000		$	444,300	$	892,300		$	1,000		$	112,200		$	2,799,800

2011	Industrial			Railcar			Environmental		Solid
	Cleaning			Cleaning			Solutions		Waste		Corporate			Total

Revenue	$	2,321,100		$	2,458,800		$	1,788,200	$	—	$	—		$	6,568,100
Depreciation and amortization (1)	$	223,700		$	51,000		$	120,600	$	—	$	4,100		$	399,400
Interest expense	$	131,700		$	40,400		$	5,200	$	—	$	10,800		$	188,100
Stock-based compensation	$	101,300		$	107,600		$	78,500	$	—	$	—		$	287,400
Net income (loss)	$	(628,600	)	$	(78,200	)	$	128,900	$	—	$	(992,000	)	$	(1,569,900	)
Capital expenditures (cash and noncash)	$	2,600		$	58,700		$	39,200	$	—				$	100,500
Total assets	$	869,000		$	399,300		$	739,800	$	—	$	103,300		$	2,111,400

(1)	Includes depreciation of property, equipment and leasehold improvement and amortization of intangibles

NOTE 16 - INCOME TAXES

As of December 31, 2012, once we files our federal and state income tax returns we estimate we will have net operating loss carryforwards available to offset future federal income tax of approximately $11 million. These carryforwards will expire between the years 2028 through 2031. 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 the 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.

Deferred tax assets, all of which were long-term, were comprised of the following as of December 31, 2012 and 2011:

	2012			2011

Allowance for doubtful accounts	$	35,900		$	115,700
Accrued expenses		66,300			18,300
Current deferred tax asset		102,200			134,000

Intangible and fixed assets		(25,500	)		(56,200	)
NOL carryforward		2,225,200			1,889,200
Long-term deferred tax asset		2,199,700			1,833,000

Total deferred tax asset		2,301,900			1,967,000
Less valuation allowance		(2,301,900	)		(1,967,000	)

Net deferred tax asset	$	—		$	—

F-24

STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

Notes to Consolidated Financial Statements

NOTE 16 - INCOME TAXES, continued

The benefit for income taxes differed from the amount computed using the U.S. federal income tax rate of 34% for December 31, 2012 and 2011 as follows:

	2012			2011

Income tax benefit (federal and state)	$	574,200		$	533,800
Non-deductible items		(306,000	)		(138,000	)
Other		66,700			24,700
Change in valuation allowance		(334,900	)		(420,500	)

Income tax benefit	$	—		$	—

NOTE 17 - ENVIRONMENTAL MATTERS AND REGULATION

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 their 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. Although our facilities occasionally have been cited for regulatory violations, we believe we are in substantial compliance with all federal, state and local laws regulating our business.

NOTE 18 - SUBSEQUENT EVENTS

For the period January 1, 2013 through the date of this report the Company raised approximately $516,000 from the private placement sale of common stock and warrants.

F-25

STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31,			December 31 ,
	2013			2012
ASSETS	Unaudited				*
Current assets:
Cash	$	130,200		$	70,400
Cash – restricted		131,600			220,000
Accounts receivable, net of allowance of $109,400 and $92,900, respectively		1,279,600			1,173,800
Costs and estimated earnings in excess billings on uncompleted contracts		177,500			35,500
Inventory		18,500			46,000
Prepaid expenses and other assets		196,100			41,600
Total current assets		1,933,500			1,587,300

Property and equipment, net		878,400			752,100
Intangible assets, net		429,700			450,900
Other assets		9,400			9,400
TOTAL ASSETS	$	3,251,000		$	2,799,700

LIABILITIES & STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	1,421,800		$	1,323,300
Accrued liabilities		488,700			499,100
Billings in excess of costs and estimated earnings on uncompleted contracts		462,500			327,400
Current portion of payroll taxes payable		336,100			335,400
Current portion of notes payable and capital lease obligations		281,000			319,800
Notes payable - related parties, including accrued interest		191,400			190,400
Total current liabilities		3,181,500			2,995,400

Payroll taxes payable, net of current portion		750,800			745,400
Notes payable and capital lease obligations, net of current portion		281,600			281,600
Total liabilities		4,213,900			4,022,400

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; and 42,245,300 40,349,300 shares issued and outstanding 2013 and 2012, respectively		42,200			40,300
Additional paid-in capital		11,130,000			10,632,200
Stock subscription receivable		(100,000	)		(100,000	)
Accumulated deficit		(11,767,000	)		(11,595,500	)
Non-controlling interest		(268,100	)		(199,700	)
Total stockholders’ deficit		(962,900	)		(1,222,700	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	3,251,000		$	2,799,700

* These numbers were derived from the audited financial statements for the year ended December 31, 2012.

See accompanying notes.

F-26

STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

	For the Three Months Ended
Revenue:	2013			2012
Products	$	901,600		$	204,800
Services		1,667,200			898,000
Total revenue		2,568,800			1,102,800

Operating expenses:
Products costs		572,200			182,300
Services costs		1,038,700			553,800
Selling, general and administrative expenses		1,174,500			709,700
Total operating expenses		2,785,400			1,445,800

Loss from operations		(216,600	)		(343,000	)

Other income (expenses):
Interest income		2,000			-
Interest expense		(23,900	)		(64,500	)
Penalties and late fees		(1,400	)		(6,100	)
Other		-			(2,900	)
Total non-operating expenses, net		(23,300	)		(73,500	)

Net loss		(239,900	)		(416,500	)
Less: Net loss attributable to non-controlling interest		(68,400	)		-
Net loss attributable to SEER common stockholders	$	(171,500	)	$	(416,500	)

Net loss per share, basic and diluted	$	(.004	)	$	(.015	)

Weighted average shares outstanding – basic and diluted		41,281,000			27,498,100

See accompanying notes.

F-27

STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)

	For the Three Months Ended March 31,
Cash flows from operating activities:	2013			2012
Net loss	$	(239,900	)	$	(416,500	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Provision for doubtful accounts receivable		22,800			14,000
Depreciation and amortization		86,900			84,900
Stock-based compensation expense		5,500			30,400
Amortization of debt discount		-			2,900
Changes in operating assets and liabilities:
Cash – restricted		88,400			-
Accounts receivable		(128,600	)		119,300
Costs in Excess of billings on uncompleted contracts		(142,000	)		(63,100	)
Inventory		27,500			(25,000	)
Prepaid expenses and other assets		(154,600	)		(32,000	)
Accounts payable		98,500			(131,900	)
Accrued liabilities and related party notes payable accrued interest		2,000			102,500
Billings in excess of revenue on uncompleted contracts		135,200			35,900
Payroll taxes payable		(3,400	)		(1,900	)
Net cash used in operating activities		(201,700	)		(280,500	)

Cash flows from investing activities:
Purchase of property and equipment		(191,800	)		(22,600	)
Proceeds the sale of property and equipment		-
Net cash used in investing activities		(191,800	)		(22,600	)

Cash flows from financing activities:
Proceeds from notes payable		-			225,000
Payments of notes payments and capital lease obligations		(38,800	)		(52,100	)
Payments of related party notes payable and accrued interest		(1,900	)		(2,900	)
Proceeds from the sale of common stock and warrants, net of expenses		494,000			100,000
Net cash provided by financing activities		453,300			270,000

Net increase (decrease) in cash		59,800			(33,100	)
Cash at the beginning of period		70,400			81,100
Cash at the end of period	$	130,200		$	48,000

Supplemental disclosures of cash flow information:

Cash paid for interest	$	2,900		$	(7,800	)
Conversion of accounts payable and accrued expenses to notes payable		-		$	66,900
Discount on note payable		-		$	(2,900	)
Purchase of assets under capital leases		-		$	121,300

See accompanying notes.

F-28

STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 1 - ORGANIZATION AND FINANCIAL CONDITION

Organization

Strategic Environmental & Energy Resources, Inc. ("SEER", "we" or the "Company"), a Nevada corporation, is a provider of industrial products and services in the environmental, energy, and rail transportation sectors. SEER has three wholly-owned operating subsidiaries which provide industrial services to companies in the petroleum, industrial, manufacturing, and medical industries: REGS, LLC (d/b/a Resource Environmental Group Services ("REGS")) provides mobile cleaning services to refineries and other entities in Colorado, Wyoming, Oklahoma, Kansas and Utah and also operates a site in Utah, on behalf of another company, to treat frac water resulting from oil and gas exploration; Tactical Cleaning Company, LLC ("TCC") provides cleaning services to railcar tankers from its sites in Colorado and Kansas; MV, LLC ("MV"), located in Colorado, designs and builds emission and odor control units for refineries, municipalities and other corporate entities; and two majority-owned subsidiaries, Paragon Waste Solutions, LLC ("PWS") a newly formed operating company, owned 54% by SEER (see Note 7) th at is developing specific opportunities to deploy and commercialize certain patent-pending technologies for a cold plasma oxidation process that makes possible the clean destruction of hazardous chemical and biological waste ( i.e ., hospital red bag waste) without traditional incineration with harmful emissions and BeneFuels, LLC (“BeneFuels”), formed in February 2013, owned 90% by SEER and was formed to focus specifically on treating biogas for conversion to pipeline quality gas and/or CNG for fleet vehicles. BeneFuels had no operations as of May 7, 2013.

Principals of Consolidation

Basis of presentation Unaudited Interim Financial Information

The accompanying interim condensed consolidated financial statements are unaudited. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all of the normal recurring adjustments necessary to present fairly the financial position and results of operations as of and for the periods presented. The interim results are not necessarily indicative of the results to be expected for the full year or any future period .

Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The Company believes that the disclosures are adequate to make the interim information presented not misleading. These consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto included elsewhere in this Form 10.

Use of Estimates

F-29

STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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. As of March 31, 2013 and December 31, 2012, we did not hold any assets that would be deemed to be cash equivalents.

Restricted Cash

At March 31, 2013 and December 31, 2012, the company had $131,600 and $220,000, respectively, of self-imposed restricted cash that was maintained by its attorney in a special trust account created for the purpose of making payments to the IRS in accordance with an installment plan (see Note 8).

Accounts Receivable

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 $109,400 and $92,900 has been reserved as of March 31, 2013 and December 31, 2012, respectively.

Fair Value of Financial Instruments

Inventory

Inventory is stated at the lower of cost or market, generally using the specific identification method. Our inventory is primarily comprised of accumulated costs related to MV contracts. These costs represent recoverable costs incurred for production, including materials, engineering time billed as incurred and allocable operating overhead. Inventories are reviewed periodically and items considered to be slow-moving or obsolete are reduced to estimated net realizable value through an appropriate reserve. At March 31, 2013 and December 31, 2012, there was no inventory reserve.

Property and Equipment

F-30

STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued

Property and Equipment, continued

Intangible Assets

Long-lived Assets

Revenue Recognition

F-31

STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued

Revenue Recognition, continued

Stock-based Compensation

Research and Development

Research and development costs are charged to expense as incurred. Such expenses were $93,200 and $0, respectively, for the three months ended March 31, 2013 and 2012.

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. The current and deferred tax provision is allocated among the members of the consolidated group on the separate income tax return basis.

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 three months ended March 31, 2013 and 2012 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 March 31, 2013 and December 31, 2012. The Company expects no material changes to unrecognized tax positions within the next twelve months.

The Company has not filed federal and state tax returns since inception. The tax periods for the years ending December 31, 2008 through 2012 are open to examination by federal and state authorities.

F-32

STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued

Recently issued accounting pronouncements

In December 2011, the FASB issued an amendment to the accounting guidance for disclosure of offsetting assets and liabilities and related arrangements. The amendment expands the disclosure requirements in that entities will be required to disclose both gross information and net information about both instruments and transactions eligible for offset in the statement of financial position and instruments and transactions subject to an agreement similar to a master netting arrangement. The amendment is effective for fiscal years, and interim periods within those years, beginning on or after January 1, 2013, and shall be applied retrospectively. The adoption of this accounting pronouncement did not have a material impact on our financial statements.

In October 2012, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2012-04, “Technical Corrections and Improvements” in Accounting Standards Update No. 2012-04. The amendments in this update cover a wide range of Topics in the Accounting Standards Codification. These amendments include technical corrections and improvements to the Accounting Standards Codification and conforming amendments related to fair value measurements. The amendments in this update will be effective for fiscal periods beginning after December 15, 2012. The adoption of ASU 2012-04 did not have a material impact on our financial position or results of operations.

F-33

STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 3 - PROPERTY AND EQUIPMENT

Property and equipment was comprised of the following:

	March 31,			December 31,
	2013			2012

Field and shop equipment	$	1,110,100		$	1,051,900
Vehicles		442,900			382,500
Furniture and office equipment		17,000			24,500
Leasehold improvements		55,500			55,500
		1,625,500			1,514,400
Less: accumulated depreciation and amortization		(747,100	)		(762,300	)
Property and equipment, net	$	878,400		$	752,100

Depreciation expense and amortization of leasehold improvements for the three months ended March 31, 2013 and 2012, was $65,600 and $63,700, respectively.

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

	March 31,			December 31,
	2012			2011

Field and shop equipment	$	131,500		$	148,500
Less: accumulated amortization		(24,400	)		(29,500	)
	$	107,100		$	119,000

NOTE 4 – INTANGIBLE ASSETS

Intangible assets were comprised of the following:

	March 31, 2013
	Gross carrying amount		Accumulated amortization			Net carrying value

Customer list	$	42,500	$	(29,400	)	$	13,100
Technology		712,100		(312,400	)		399,700
Trade name		54,600		(37,700	)		16,900

	$	809,200	$	(379,500	)	$	429,700

	December 31, 2012
	Gross carrying amount		Accumulated amortization			Net carrying value

Customer list	$	42,500	$	(27,800	)	$	14,700
Technology		712,100		(294,700	)		417,400
Trade name		54,600		(35,800	)		18,800

	$	809,200	$	(358,300	)	$	450,900

F-34

STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 4 – INTANGIBLE ASSETS, continued

The estimated useful lives of the intangible assets range from seven to ten years. Amortization expense was $21,300 and $21,300 for the three months ended March 31, 2013 and 2012, respectively. The estimated aggregate amortization expense for each of the next five years is as follows:

2013	$	85,100
2014		85,100
2015		77,000
2016		71,200
2017		71,200
Thereafter		61,300
	$	450,900

NOTE 5 - ACCRUED LIABILITIES

Accrued liabilities were comprised of the following:

	March 31,		December 31,
	2013		2012

Accrued compensation and related taxes	$	367,700	$	385,100
Accrued interest		59,000		61,600
Accrued material and other job related costs		51,100		30,700
Other		10,900		21,700
	$	488,700	$	499,100

NOTE 6 - UNCOMPLETED CONTRACTS

Costs, estimated earnings and billings on uncompleted contracts are as follows:

	March 31,			December 31,
	2013			2012

Revenue Recognized	$	929,400		$	63,800
Less: Billings to date		(751,900	)		(28,300	)
Costs and estimated earnings in excess of billings on uncompleted contracts	$	177,500		$	35,500

Billings to date	$	846,800		$	775,800
Revenue recognized		(384,300	)		(448,400	)
Billings in excess of costs and estimated earnings on uncompleted contracts	$	462,500		$	327,400

F-35

STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 7– INVESTMENT IN PARAGON WASTE SOLUTIONS LLC

In 2010, the Company and Black Stone Management Services, Inc. ("Black Stone") formed PWS whereby 1,000,000 membership units were issued, the Company acquired 60% (600,000) of the membership units in PWS and Black Stone acquired 40% (400,000) of the membership units in PWS, respectively. In June 2012, the Company and Blackstone each allocated 10% of their respective membership units in PWS to two individuals, one of which is an officer of the Company and one which is a shareholder of the Company and an officer of a subsidiary. There was no value to the units at the time of the allocation. As of December 31, 2012 the Company owns 54% of the membership units, Black Stone 36% of the membership units and two individuals, one of which is an officer of the Company and one who is a shareholder, each own 5% each of the membership units.

In August, 2011, we acquired certain waste destruction technology intellectual property (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.

During 2012, we have provided approximately $415,000 in funding to PWS for further development and construction of a prototype commercial waste destruction unit. For the three months ended March 31, 2013 we provided $135,800 in funding to PWS. Black Stone has made no capital contributions or other funding to PWS. The intent of the operating agreement is that we will provide the funding as an advance against future earnings distributions made by PWS.

NOTE 8 - PAYROLL TAXES PAYABLE

In September 2011, we received approval from the IRS to begin paying our outstanding federal payroll tax and related interest and penalties liabilities totaling approximately $971,000, for the aforementioned years in installments (the "Installment Plan"). Under the Installment Plan, we were required to pay minimum monthly installments of $12,500 commencing September 2011, which increased to $25,000 per month in September 2012, until the liability is paid in full. Through the duration of the Installment Plan, the IRS continues to charge penalties and interest at statutory rates. If the conditions of the Installment Plan are not met, the IRS may cancel it and may demand the outstanding liability to be repaid through a levy on income, bank accounts or other assets, or by seizing certain of our assets. Additionally, the IRS has filed a notice of federal tax lien against certain of our assets to satisfy the obligation. The IRS is to release this lien if and when we pay the full amount due. As of March 31, 2013 and December 31, 2012, the outstanding balance due to the IRS was $988,300, and $1,045,400, respectively. Two of the officers’ of the Company also have liability exposure for a portion of the taxes if the Company does not pay them.

As of March 31, 2013 and December 31, 2012, the amounts due for past due state payroll taxes, interest and penalties, was $65,100 and $35,400, respectively.

F-36

STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 9 – DEBT

In June 2011, we issued an unsecured promissory note to a third party in the amount of $40,000 (the "June 2011 Note") bearing interest at a rate of 10% per annum and a three year warrant to purchase 13,000 shares of our common stock at an exercise price of $1.00 per share. In addition, a second note payable, to the same third party, in the amount of $25,000 plus $3,000 of accrued interest was also converted into the June 2011 Note, resulting in a new principal balance of $68,000. Principal payments were due beginning November 2011 and the June 2011 Note is in default as of December 31, 2012, as no payments have been made to date. We valued the warrant at $170 using the Black-Scholes model and recorded this amount as a debt discount. The debt discount was fully amortized during 2011.

In December 2011, we issued a secured promissory note to a third party in the amount of $50,000 (the "December 2011 Note") bearing interest at 18% per year, secured by certain assets in TCC and a five year warrant to purchase 25,000 shares of our common stock at an exercise price of $0.50 per share. We valued the warrant at $5,749 using the Black-Scholes model and recorded this amount as a debt discount. The December 2011 Note was paid in full in June 2012.

F-37

STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 9 – DEBT, continued

Debt as of March 31, 2013 and December 31, 2012, was comprised of the following:

	2013			2012

June 2011 Note (See above)	$	68,000		$	68,000

Note payable dated February 2012, interest at 5% per annum, $112,500 is due December 31, 2014, convertible in whole or in part to common stock at $.50 per share.		225,000			225,000

Promissory note dated April 2008, secured by certain of our assets, bearing interest at 6.65% per annum; 60 monthly payments of $14,276, maturing April 2013.		42,400			70,200

Promissory note dated December 2009, unsecured, bearing interest at 6% per annum, six monthly payments ranging from $10,000 to $25,000 commencing February 2010, balloon payment for outstanding balance due July 2010. The promissory note is in default as of December 31, 2012 and 2011.		104,200			104,200

Promissory note dated November 2010, unsecured, bearing interest at 8% per annum, balloon payment for outstanding balance due October 2011. The promissory note is in default as of December 31, 2012 and 2011.		25,000			25,000

Capital lease obligations, secured by certain assets, maturing September 2011 through August 2016		98,000			109,000
Total notes payable and capital lease obligation		562,600			601,400
Less: current portion, including debt discount		(281,000	)		(319,800	)
Notes payable and capital lease obligation, long-term	$	281,600		$	281,600

NOTE 10 – RELATED PARTY TRANSACTIONS

Notes payable, related parties

F-38

STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 10 – RELATED PARTY TRANSACTIONS, continued

Notes payable, related parties and accrued interest due to certain related parties as of March 31, 2013 and December 31, 2012 are as follows:

	2013		2012

Note payable dated February 2004, bearing interest at 8% per annum, originally due January 2008; assigned to CEO by a third party in 2010; due on demand, in default	$	97,000	$	97,000

Note payable due to President of our subsidiary, REGS, interest at 8% per annum, originally due February 2009, in default		2,300		4,200

2011 Officer Note (see description above), in default		50,000		50,000

Accrued interest		42,100		39,200

	$	191,400	$	190,400

We believe the stated interest rates on the related party notes payable represent reasonable market rates based on the note payable arrangements we have executed with third parties.

NOTE 11 – EQUITY TRANSACTIONS

In December 2012, we initiated a new private placement comprised of 200,000 shares and 100,000 warrants for $50,000. Each warrant is exercisable for a period of three years at an exercise price of $.50 per share. For the three months ended March 31, 2013 we sold 9.9 units for proceeds of $494,000.

NOTE 12 – CUSTOMER CONCENTRATIONS

The Company had sales from operations to two customers for the three months ended March 31, 2013 and 2012 that represented approximately 34% and 30% of our sales. The concentration of the Company’s business with a relatively small number of customers may expose us to a material adverse effect if one or more of these large customers were to experience financial difficulty or were to cease being customer for non-financial related issues.

F-39

STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 13 – NET LOSS PER SHARE

Potentially dilutive securities were comprised of the following:

	March 31,
	2013		2012

Warrants		6,487,500		2,777,000
Options		2,234,000		2,552,700
Convertible notes payable		225,000		900,000
		8,946,500		6,229,700

NOTE 14 - ENVIRONMENTAL MATTERS AND REGULATION

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 their 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. Although our facilities occasionally have been cited for regulatory violations, we believe we are in substantial compliance with all federal, state and local laws regulating our business.

F-40

STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 15 - SEGMENT INFORMATION AND MAJOR CUSTOMERS

Segment information for the three months ended March 31, 2013 and 2012 is as follows:

2013	Industrial		Railcar		Environmental		Solid
	Cleaning		Cleaning		Solutions		Waste			Corporate			Total

Revenue	$	1,118,100	$	549,100	$	901,600		-			-		$	2,568,800,
Depreciation and amortization (1)	$	47,100	$	5,900	$	31,400		-		$	2,500		$	86,900
Interest expense	$	7,800	$	9,700	$	2,600		-		$	3,800		$	23,900
Stock-based compensation		-		-		-		-		$	5,500		$	5,500
Net income (loss)	$	22,100	$	75,400	$	118,900	$	(80,300	)	$	(376,000	)	$	(239,900	)
Capital expenditures (cash and noncash)	$	150,900	$	40,900		-		-			-		$	191,800
Total assets	$	1,580,900	$	448,700	$	1,063,700		-		$	157,700		$	3,251,000

2012	Industrial			Railcar		Environmental			Solid
	Cleaning			Cleaning		Solutions			Waste		Corporate			Total

Revenue	$	351,600		$	546,300	$	204,900			-		-		$	1,102,800
Depreciation and amortization (1)	$	46,700		$	6,300	$	29,400			-	$	2,500		$	84,900
Interest expense	$	44,100		$	13,800	$	1,800			-	$	7,600		$	67,300
Stock-based compensation		-			-		-			-	$	30,400		$	30,400
Net income (loss)	$	(144,100	)	$	69,300	$	(75,000	)		-	$	(266,700	)	$	(416,500	)
Capital expenditures (cash and noncash)	$	1,300			-	$	21,300			-		-		$	22,600
Total assets	$	738,900		$	453,000	$	827,100			-	$	105,100		$	2,124,100

(2)	Includes depreciation of property, equipment and leasehold improvement and amortization of intangibles

F-41

Nevada				02-0565834
(State or other jurisdiction of Incorporation or organization)		(Commission File No.)		(IRS Employee Identification Number)

Large accelerated filer o	Accelerate filer o
Non-accelerated filer o ( Do not check if a smaller reporting company )	Smaller reporting company x

Item 1.	Business	2
Item 1A.	Risk Factors	6
Item 2.	Financial Information	11
Item 3.	Properties	18
Item 4.	Security Ownership of Certain Beneficial Owners and Management	18
Item 5.	Directors and Executive Officers	18
Item 6.	Executive Compensation	20
Item 7.	Certain Relationships and Related Transactions, and Director Independence	22
Item 8.	Legal Proceedings	22
Item 9.	Market Price of and Dividends On the Registrants Common Equity and Related Stockholder Matters	23
Item 10.	Recent Sales of Unregistered Securities	23
Item 11.	Description of Registrant’s Securities to be Registered	24
Item 12.	Indemnification of Officers and Directors	24
Item 13.	Financial Statements and Supplementary Data	24
Item 14.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	24
Item 15.	Financial Statements and Exhibits	25

Beneficial Owners	Ownership			Address
Michael Cardillo		17.28	%	7801 Brighton Road, Commerce City, CO 80022
Joseph John Combs		16.24	%	7801 Brighton Road, Commerce City, CO 80022
Clyde Berg		7.53	%	7801 Brighton Road, Commerce City, CO 80022
Ahmed Al Neama		5.97	%	7801 Brighton Road, Commerce City, CO 80022
Nigel Hunter		5.94	%	7801 Brighton Road, Commerce City, CO 80022
Chris Dieterich		0.26	%	7801 Brighton Road, Commerce City, CO 80022
John Jenkins		0.06	%	7801 Brighton Road, Commerce City, CO 80022

Name and Principal Position	Grant Date		All Other Stock Awards: Number of Shares of Stock or Units		All Other Option Awards: Number of Securities Underlying Options		Exercise or Base Price of Option Award		Grant Date Fair Value of Awards
J John Combs III,	3/31/10			—		92,250	$	1.00	$	52,600
CEO, President	1/1/2012			—		300,000	$	.50	$	13,500
John Jenkins, Executive VP, Director	1/1/2012			—		240,000	$	.50	$	10,800
Chris Dieterich, Secretary, Director		—		—		—		—		—
Fortunato Villamagna, President PWS		—		—		—		—		—
Mike Cardillo, President REGS	3/31/2010			—		92,250	$	1.00	$	52,600
	1/1/2012			—		300,000	$	.50	$	13,500

	Three Months Ended March 31,						Years Ended December 31,
	2013			2012			2012			2011
Consolidated Statements of Operations Data:
Revenues	$	2,568,800		$	1,102,800		$	6,841,400		$	6,568,100
Operating loss		(216,600	)		(343,000	)		(1,621,300	)		(1,250,300	)
Net loss		(239,900	)		(416,500	)		(1,689,100	)		(1,569,900	)
Non controlling interest		(68,400	)		—			( 199,700	)		—
Net loss attributable to SEER common stockholders	$	(171,500	)	$	(416,500	)	$	(1,489,400	)	$	(1,569,900	)

Net loss per share, basic and diluted	$	(.004	)	$	(.015	)	$	(.05	)	$	(.06	)
Weighted average shares outstanding – basic and diluted		41,281,000			27,498,100			32,963,000			26,056,100

	As of March 31,			As of December 31,
	2013			2012			2011
Consolidated Balance Sheet Data:
Total assets	$	3,251,000		$	2,799,700		$	2,111,400
Total debt	$	4,213,900		$	4,022,400		$	4,153,400
Total stockholder’s deficit	$	(962,900	)	$	(1,222,700	)	$	(2,042,000	)

Name and Title	Fiscal Year	Base Salary		Bonus		Stock Awards		Option Awards		Non-Equity Incentive Plan Compensation		Change in Pension Value and Non-Qualified Deferred Compensation Earnings		All Other Compensation		Total Compensation

J. John Combs III	2012	$	125,000		—		—	$	13,500		—		—		—	$	138,500
President/CEO	2011	$	125,000		—		—		—		—		—		—	$	125,000

Chris Dieterich	2012		—		—		—		—		—		—		—		—
Secretary, Director	2011		—		—		—		—		—		—		—		—

John Jenkins	2012	$	72,000		—		—	$	10,800		—		—		—	$	82,800
Executive Vice President, Director	2011	$	72,000		—		—		—		—		—		—	$	72,000

Fortunato Villamagna	2012	$	150,000		—		—		—		—		—		—	$	150,000
President, Paragon Waste Systems	2011		—		—		—		—		—		—		—		—

Mike Cardillo	2012	$	125,000		—		—	$	13,500		—		—		—	$	138,500
President, REGS LLC	2011	$	125,000		—		—		—		—		—		—	$	125,000

	Option Awards
Name	Number of Securities Underlying Unexercised Options (#) Exercisable			Number of Securities Underlying Unexercised Options (#) Unexercisable			Option Exercise Price ($)(c)		Option Expiration Date
J John Combs III, CEO, President		227,250	(b)		165,000	(b)	$	.64	12/31/15
John Jenkins, Executive VP, Director		108,000	(a)		132,000	(a)	$	.50	12/31/15
Chris Dieterich, Secretary, Director		—			—			—		—
Fortunato Villamagna, President PWS		—			—			—		—
Mike Cardillo, President REGS		227,250	(b)		165,000	(b)	$	.64	12/31/15

	For the Years Ended December 31,
	2011				2012
	High		Low		High		Low
First Quarter	$	1.15	$	.90	$	.90	$	.40
Second Quarter	$	.90	$	.06	$	.58	$	.40
Third Quarter	$	.90	$	.15	$	.52	$	.10
Fourth Quarter	$	.90	$	.15	$	.45	$	.34

3.1	Articles of Incorporation, dated February 13, 2002
3.2	Amendment to the Articles of Incorporation, dated December 19, 2007, changing the name and effecting a reverse
3.3	ByLaws of the corporation, effective February 13, 2002
4.1	$225,000 Convertible Note of the Corporation, issued February 14, 2012
4.2	Form of Warrant, having a 3-year life with $0.50 exercise price
4.3	Form of Warrant, having a 5-year life with $0.50 exercise price
10.1	Agreement for acquisition of MV, dated June 13, 2008
10.2	Agreement for acquisition of intellectual property from Black Stone Management Services, LLC, dated August 10, 2011
10.3	Agreement for Merger with Satellite Organizing Solutions, Inc.
14.1	Code of Ethics
21.1	Subsidiaries of Registrant
31.1	Certification of Principal Executive Officer
31.2	Certification of Principal Financial Officer
32.1	Certification of Principal Executive Officer (Section 1350)
32.2	Certification of Principal Financial Officer (Section 1350)
99.1	Financial Statements

Dated: May 21, 2013	STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

	By	/s/ J. John Combs
		J. John Combs Chief Executive Officer with Responsibility to sign on behalf of Registrant as a Duly authorized officer and principal executive officer

	By	/s/ Monty Lamirato
		Monty Lamirato
		Acting Chief Financial Officer with
		responsibility to sign on behalf of Registrant as a
		duly authorized officer and principal financial officer

ARTICLE ONE.	NAME:	The name of the corporation shall be Satellite Organizing Solutions, Inc.

ARTICLE TWO.	DURATION:	The corporation shall exist perpetually.

ARTICLE THREE.	PURPOSES:

NAME		Mailing Address

Camaran A. Lewis		PO Box 91731, Henderson NV 89009

ROSS MILLER Secretary of State		SCOTT W. ANDERSON Deputy Secretary for Commercial Recordings
	OFFICE OF THE SECRETARY OF STATE

Job Number:	C20130506-2474
Reference Number:	20130304867-04

Document Number(s)	Description	Number of Pages
20070859661-44	Amendment	1 Pages/1 Copies

	Filed in the office of Ross Miller Secretary of State State of Nevada	Document Number 20070859661-44
		Filing Date and Time 12/19/2007 10:36 AM
Certificate of Amendment (PURSUANT TO NRS 78.385 AND 78.390)		Entity Number C3894-2002

4. Effective date of filing (optional):
5. Officer Signature (Required):

ARTICLE I – Offices		Pg. 1

ARTICLE II – Meeting of Stockholders		Pg. 1-3

SECTION 1. – Annual Meetings		Pg. 1
SECTION 2. – Special Meetings		Pg, 1
SECTION 3. – Place of Meetings		Pg. 1
SECTION 4. – Notice of Meeting		Pg. 1-2
SECTION 5. – Quorum		Pg. 2
SECTION 6. – Voting		Pg. 2-3

ARTICLE III – Board of Directors		Pg. 3-7

SECTION 1. – Number, Election and Term of Office		Pg. 3
SECTION 2. – Duties and Powers		Pg- 4
SECTION 3. – Annual and Regular Meetings; Notice		Pg. 4
SECTION 4. – Special Meeting; Notice		Pg. 4
SECTION 5. – Chairman		Pg. 5
SECTION 6. – Quorum and Adjournments		Pg. 5
SECTION 7. – Manner of Acting		Pg- 5
SECTION 8. – Vacancies		Pg. 6
SECTION 9. – Resignation		Pg. 6
SECTION 10. – Removal		Pg- 6
SECTION 11. – Salary		Pg. 6
SECTION 12. – Contracts		Pg- 6-7
SECTION 13. – Committees		Pg- 7

ARTICLE IV – Officers		Pg. 7-8

SECTION 1. – Number, Qualifications, Election and Term of Office		Pg. 7
SECTION 2. – Resignation		Pg- 7-8
SECTION 3. – Removal		Pg- 8
SECTION 4. – Vacancies		Pg- 8
SECTION 5. – Duties of Officers		Pg. 8
SECTION 6. – Sureties and Bonds		Pg- 8
SECTION 7. – Shares of Stock of Other Corporations		Pg. 8

ARTICLE V – Shares of Stock		Pg- 8-10

SECTION 1. – Certificate of Stock		Pg. 8-9
SECTION 2. – Lost or Destroyed Certificates		Pg. 9
SECTION 3. – Transfer of Shares		Pg. 9-10
SECTION 4. – Record Date		Pg- 10

ARTICLE VI – Dividends		Pg. 10

ARTICLE VII – Fiscal Year		Pg. 10

ARTICLE VIII – Corporate Seal		Pg. 10

ARTICLE IX – Indemnity		Pg- 11

ARTICLE X – Amendments		Pg. 11

SECTION 1. – By Stockholders		Pg. 11
SECTION 2. – By Directors		Pg. 11

CERTIFICATE OF PRESIDENT		Pg- 12

	MAKERS :

	STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

	By:	/s/ John Combs
		Name: John Combs
		Title: CEO

	MV, LLC

	By :	/s/ John Jenkins
		Name: John Jenkins
		Title: President

By:	/ s/ Douglas A Newgold
	Name: Douglas A. Newgold
	Title: Chairman, CEO

By:	/s/ J. John Combs III
Name:	J. John Combs III
Title:	Chief Executive Officer

Name	MV Units Sold	Consideration Shares Received
Mtarri, Inc.Paul Trost	600,000	600,000
Fred Varani	600,000	600,000

Dated: May 21, 2013
		/s/ J. John Combs
		J. John Combs
		Chief Executive Officer

		/s/ J. John Combs
		J. John Combs
		President and Chief Executive Officer
		May 21, 2013

		/s/ Monty Lamirato
		Monty Lamirato
		Acting Chief Financial Officer
		May 21, 2013