UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, ~~2016~~2017

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________ to________________

Commission file number 333-145939

CleanTech Biofuels, Inc.

(Exact Name of Registrant as Specified in Its charter)

Delaware	33-0754902
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

7386 Pershing Ave., University City, Missouri	63130
(Address of principal executive offices)	(Zip Code)

(Registrant's telephone number): (314) 802-8670

Securities registered under Section 12(b) of the Exchange Act: None

Securities registered under Section 12(g) of the Exchange Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes [ ] No [X]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.

Yes [X ] No [X]

Indicate by check mark whether registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T ( 232.405) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (229.405) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or aan ~~smaller~~emerging ~~reporting~~growth company. See the definitions of “large accelerated filer,” “accelerated filer,” ~~and~~ “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. ~~(Check one):~~

Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] Smaller reporting company [X] (Do not check if a smaller reporting company) ~~Smaller~~Emerging ~~reporting~~growth company [X ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes[] No[X]

The aggregate market value of the voting and non-voting common equity held by non-affiliates as of June 30, ~~2016~~2017 (the last business day of our most recently completed second quarter) - $24,~~863~~127,~~064~~737

As of March 30, ~~2017~~2018, the number of shares outstanding of the Company's common stock was 9497,~~188~~633,~~413~~129.

Table of Contents

CLEANTECH BIOFUELS, INC.

TABLE OF CONTENTS

PART I		PAGE
		PAGE
PART I		3
ITEM 1	Business	3
ITEM 1A	Risk Factors	12
ITEM 1B	Unresolved Staff Comments	18
ITEM 2	Properties	18
ITEM 3	Legal Proceedings	19
ITEM 4	Mine Safety Disclosures	19
PART II		19
ITEM 5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	19
ITEM 6	Selected Financial Data	2021
ITEM 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2021
ITEM 7A	Quantitative and Qualitative Disclosures About Market Risk	26
ITEM 8	Consolidated Financial Statements and Supplemental Data	27
ITEM 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	4648
ITEM 9A	Controls and Procedures	4648
ITEM 9B	Other Information	4749
PART III		4749
ITEM 10	Directors, Executive Officers and Corporate Governance	4749
ITEM 11	Executive Compensation	5052
ITEM 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	5355
ITEM 13	Certain Relationships and Related Transactions and Director Independence	5456
ITEM 14	Principal Accountant Fees and Services	5557
PART IV		5658
ITEM 15	Exhibits and Financial Statement Schedules	5658
ITEM 16	Summary of Form 10-K	5658
	Signatures	5759
	Index to Exhibits	5860

Table of Contents

Statement Regarding Forward-Looking Information

From time to time, we make written or oral statements that are “forward-looking,” including statements contained in this report and other filings with the Securities and Exchange Commission (“SEC”) and in our reports to stockholders. The Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended, provide a safe harbor for such forward-looking statements. All statements, other than statements of historical facts, included herein regarding our strategy, future operations, financial position, future revenues, projected costs, prospects, plans, objectives and other future events and circumstances are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “would,” “should” and similar expressions or negative expressions of these terms. Such statements are only predictions and, accordingly, are subject to substantial risks, uncertainties and assumptions.

Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. We caution you that any forward-looking statement reflects only our belief at the time the statement is made. Although we believe that the expectations reflected in our forward-looking statements are reasonable, we cannot guarantee our future results, levels of activity, performance or achievements. Refer to our Risk Factors section of this report for a full description of factors we believe could cause actual results or events to differ materially from the forward-looking statements that we make. These factors include:

●

our ability to raise additional capital on favorable terms or identify another source of outside liquidity,

●

our ability to continue operating and to implement our business plan,

●

the commercial viability of our technologies,

●

our ability to maintain and enforce our exclusive rights to our technologies,

●

the demand for and production costs of various energy products that could be made from our biomass,

●

competition from other alternative energy technologies, and

●

other risks and uncertainties detailed from time to time in our filings with the SEC.

Although we believe the expectations reflected in our forward-looking statements are based upon reasonable assumptions, it is not possible to foresee or identify all factors that could have a material and negative impact on our future performance. The forward-looking statements in this report are made on the basis of management’s assumptions and analyses, as of the time the statements are made, in light of their experience and perception of historical conditions, expected future developments and other factors believed to be appropriate under the circumstances.

PART I

ITEM 1.

Business

The following description of our business should be read in conjunction with the consolidated financial statements and related notes to the consolidated financial statements included elsewhere in this report. This discussion contains forward-looking statements that relate to future events or our future financial performance. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity or performance to be materially different from any future results, levels of activity or performance. These risks and other factors include, among others, those listed under “Statement Regarding Forward-Looking Information.”

Company Overview

The Company is in its development stage and is focused on being a provider of: (i) cellulosic biomass derived from municipal solid waste, also known as MSW, as a feedstock for producing energy and other chemical products and (ii) recyclables (metals, plastics, glass) from the MSW. We are the exclusive licensee in the United States and Canada of patented technology, which we refer to as our Biomass Recovery Process, that cleans and separates MSW and generates a clean, homogeneous biomass feedstock that we believe can be converted into various energy products. Our license permits us to use the biomass we derive from MSW to produce all energy products. In addition, we own the patent for a pressurized steam classification technology originally developed by the University of Alabama in Huntsville that we refer to as our PSC technology. The PSC technology is the underlying technology upon which the Biomass Recovery Process is based. Prior to March 2011, we had licensed the PSC technology to Bio-Products International, Inc. (“Bio-Products”). However, pursuant to a settlement agreement with Bio-Products in March 2009, we had the right to use the Biomass Recovery Process technology worldwide, for any product that we desired and with no royalty due to Bio-Products. We terminated the license to Bio-Products in March 2011 as further described in the section entitled “Intellectual Property Terms.” The Company has spent $-0- on research and development activities during ~~2016~~2017 and ~~2015~~2016.

WeTable are a Delaware corporation. We were originally incorporated in 1996 as Long Road Entertainment, Inc., and were formed to operate as a holding company for businesses in the theater, motion picture and entertainment industries. We ceased conducting that business in 2005 and were dormant until the fall of ~~2006, at which time our founder and then controlling stockholder decided to pursue the sale of the company. In anticipation of that sale, we changed our name to Alternative Ethanol Technologies, Inc.~~Contents

OnWe ~~March~~are ~~27,~~a ~~2007,~~Delaware wecorporation. ~~entered~~We ~~into~~were anoriginally ~~Agreement~~incorporated ~~and~~in ~~Plan~~1996 ofas ~~Merger~~Long ~~and~~Road ~~Reorganization~~Entertainment, inInc., ~~which~~and wewere ~~agreed~~formed to ~~acquire~~operate ~~SRS~~as ~~Energy,~~a ~~Inc.~~holding company for businesses in the theater, amotion ~~Delaware~~picture ~~corporation~~and ~~that~~entertainment atindustries. ~~that~~We ~~time~~ceased ~~was~~conducting ~~seeking~~that tobusiness ~~commercialize~~in ~~various~~2005 ~~technologies~~and ~~for~~were dormant until the ~~processing~~fall of ~~waste~~2006, ~~materials~~at ~~into~~which ~~usable~~time ~~products.~~our Wefounder ~~consummated~~and ~~the~~then ~~merger~~controlling onstockholder ~~May~~decided ~~31,~~to ~~2007~~pursue ~~resulting~~the insale ~~SRS~~of ~~Energy~~the ~~becoming~~company. ~~our~~In ~~wholly-owned~~anticipation ~~subsidiary.~~of ~~Effective~~that ~~August 2~~sale, ~~2007,~~ we changed our name to ~~CleanTech~~Alternative ~~Biofuels~~Ethanol Technologies, Inc.

WeOn ~~have~~March no27, ~~operating~~2007, ~~history~~we asentered ainto ~~producer~~an ofAgreement ~~biomass~~and ~~feedstocks~~Plan orof ~~any~~Merger ~~energy products~~ and ~~have~~Reorganization ~~not~~in ~~constructed~~which ~~any~~we ~~operating~~agreed ~~plants~~ to ~~date.~~acquire WeSRS ~~have~~Energy, ~~not~~Inc., ~~earned~~a ~~any~~Delaware ~~revenues~~corporation tothat ~~date~~at ~~and~~that ~~our~~time ~~current~~was ~~capital~~seeking ~~and~~to ~~other~~commercialize ~~existing~~various ~~resources~~technologies ~~are~~for ~~not sufficient to fund~~ the ~~implementation~~processing of ~~our~~waste ~~business~~materials ~~plan~~into orusable ~~our required working capital~~products. We ~~will~~consummated ~~require~~the ~~substantial~~merger ~~additional~~on ~~capital~~May to31, ~~implement~~2007 ~~our~~resulting ~~business~~in ~~plan~~SRS ~~and~~Energy webecoming ~~may~~our bewholly-owned ~~unable~~subsidiary. toEffective ~~immediately~~August ~~obtain~~2, ~~the~~2007, ~~capital~~we ~~required~~changed our name to ~~continue~~CleanTech ~~operating.~~Biofuels, Inc.

~~Plan~~We have no operating history as a producer of ~~Operation~~biomass feedstocks or any energy products and have not constructed any operating plants to date. We have not earned any revenues to date and our current capital and other existing resources are not sufficient to fund the implementation of our business plan or our required working capital. We will require substantial additional capital to implement our business plan and we may be unable to immediately obtain the capital required to continue operating.

~~Our~~Plan ~~focus is to secure sufficient capital to fund our current working capital requirements and the construction~~ of a commercial plant as described further in this section. We have had an ongoing lack of liquidity, and currently do not have sufficient capital to continue to fund our proposed operations, and are relying on the minimal assets on hand to fund our limited operations and corporate existence. All of our on-going and proposed developments/projects require a significant amount of capital that we currently do not have. While we continue to pursue outside sources of funding, we have not had success securing meaningful amounts of outside capital in recent years. As a result, we can provide no assurance that we will secure any source of funding in the immediate time frame required and the failure to do so will likely result in an inability to continue operations.Operation

Our ~~company~~focus ~~was~~is ~~initially~~to ~~conceived~~secure assufficient acapital ~~fully-integrated~~to ~~producer~~fund ~~of cellulosic ethanol from MSW. Based on~~ our ~~investigation~~current ~~and~~working ~~acquisition~~capital ofrequirements ~~new technologies~~ and ~~research and development of our existing technologies in 2008, we re-focused our business to~~ the ~~commercialization~~construction of ~~our Biomass Recovery Process technology for cleaning and separating MSW into its component parts and initiated~~ a ~~plan~~commercial toplant ~~consolidate~~as ~~the~~described ~~ownership~~further ~~and/or~~in ~~rights to use intellectual property around~~ this ~~technology~~section. ~~The~~We ~~technology~~have ishad ~~currently~~an inongoing ~~commercial~~lack ~~use~~of ~~in Coffs Harbor~~liquidity, ~~Australia~~and bycurrently ando ~~operator~~ not ~~owned~~have bysufficient ~~the~~capital ~~Company~~to ~~(the~~continue ~~“Third-Party~~to ~~Operator”).~~fund Asour aproposed ~~result~~operations, weand ~~believe~~are ~~this~~relying ~~technology~~on ~~could~~the beminimal ~~implemented~~assets ~~commercially~~on inhand ~~the~~to ~~United~~fund ~~States~~our limited operations and ~~elsewhere~~corporate existence. InAll ~~furtherance~~ of our ~~focus,~~on-going weand ~~are~~proposed ~~continuing~~developments/projects ~~our~~require ~~ongoing~~a ~~search~~significant ~~for~~amount ~~an outside source~~ of ~~financing~~capital that ~~will~~we ~~provide~~currently ~~the~~do ~~capital~~not ~~for~~have. usWhile towe ~~design,~~continue ~~build, and operate a commercial biomass recovery plant that will allow us~~ to ~~produce~~pursue ~~biomass~~outside ~~feedstock~~sources ~~for~~of ~~customer evaluation~~funding, ~~trial~~we ~~purchases,~~have ~~and/or~~not behad ~~used~~success insecuring ~~equipment~~meaningful ~~selection~~amounts ~~for~~of ~~power~~outside ~~generation~~capital ~~and~~in ~~possibly~~recent ~~combined heat and power (CHP)~~years. ~~Initially,~~As ~~the~~a ~~biomass feedstock output is expected to be sold or provided to electric utilities~~result, ~~power~~we ~~and~~can ~~steam~~provide ~~producers,~~no ~~power~~assurance ~~and~~that ~~CHP~~we ~~equipment~~will ~~suppliers,~~secure ~~and~~any ~~biofuel research firms for evaluation. In addition to seeking a~~ source of funding ~~for~~in ~~plant development,~~ the ~~Company~~immediate ~~hopes~~time toframe ~~license~~required and~~/or~~ ~~develop~~the ~~potential~~failure ~~commercial projects as they present themselves. All of our developments plan~~ to ~~focus~~do onso ~~cleaning~~will ~~and~~likely ~~separating~~result ~~MSW into its component parts~~ in ~~order~~an inability to ~~obtain:~~continue ~~(i) a homogenous feedstock of cellulosic biomass for producing energy and other chemical products and (ii) recyclable products (metals, plastics)~~operations. ~~Our plans may also include possibility of operating a MSW transfer station where we could install our technology.~~

4Our company was initially conceived as a fully-integrated producer of cellulosic ethanol from MSW. Based on our investigation and acquisition of new technologies and research and development of our existing technologies in 2008, we re-focused our business to the commercialization of our Biomass Recovery Process technology for cleaning and separating MSW into its component parts and initiated a plan to consolidate the ownership and/or rights to use intellectual property around this technology. The technology is currently in commercial use in Coffs Harbor, Australia by an operator not owned by the Company (the “Third-Party Operator”). As a result, we believe this technology could be implemented commercially in the United States and elsewhere. In furtherance of our focus, we are continuing our ongoing search for an outside source of financing that will provide the capital for us to design, build, and operate a commercial biomass recovery plant that will allow us to produce biomass feedstock for customer evaluation, trial purchases, and/or be used in equipment selection for power generation and possibly combined heat and power (CHP). Initially, the biomass feedstock output is expected to be sold or provided to electric utilities, power and steam producers, power and CHP equipment suppliers, and biofuel research firms for evaluation. In addition to seeking a source of funding for plant development, the Company hopes to license and/or develop potential commercial projects as they present themselves. All of our developments plan to focus on cleaning and separating MSW into its component parts in order to obtain: (i) a homogenous feedstock of cellulosic biomass for producing energy and other chemical products and (ii) recyclable products (metals, plastics). Our plans may also include possibility of operating a MSW transfer station where we could install our technology.

~~Biomass Feedstock Production~~4

~~The~~Table ~~Company~~of strives to design and build a commercial biomass recovery plant to provide biomass feedstock for customer evaluation, trial purchases, and/or power generation. Initially, the biomass feedstock output is expected to be sold or provided to electric utilities, power and steam producers, power and CHP equipment suppliers, and biofuel and chemical research firms for evaluation. In addition to research and development, the Company also plans to license and/or develop potential commercial projects. Contents

WeBiomass ~~hope~~Feedstock to develop a plant in a major metropolitan area. We are working to develop one or more locations where waste collected would be processed using our technology and the biomass produced used to create heat and/or power.Production

InThe ~~addition~~Company strives to ~~the~~design ~~developments~~and webuild ~~are~~a ~~currently~~commercial ~~contemplating,~~biomass ~~from~~recovery ~~time~~plant to ~~time~~provide ~~other~~biomass ~~development~~feedstock ~~opportunities~~for ~~are~~customer ~~presented~~evaluation, totrial uspurchases, and/or wepower ~~evaluate~~generation. ~~those~~Initially, ~~potential~~the ~~developments.~~biomass Iffeedstock weoutput ~~are~~is ~~able~~expected to ~~operate~~be asold ~~plant,~~or ~~and~~provided ~~thereafter~~to ~~refine~~electric ~~our~~utilities, ~~know-how~~power ~~with~~and ~~respect~~steam toproducers, ~~implementation~~power ofand ~~the~~CHP ~~technology~~equipment suppliers, weand ~~intend~~biofuel toand ~~seek~~chemical toresearch ~~partner~~firms ~~with~~for ~~waste~~evaluation. ~~haulers,~~In ~~landfill~~addition ~~owners~~to research and ~~municipalities~~development, ~~to implement~~ the ~~technology~~Company ~~across~~also ~~the~~plans ~~United~~to ~~States~~license and/or ~~internationally~~develop potential commercial projects.

~~Any~~We ~~development~~hope ofto ~~commercial~~develop ~~plants~~a ~~and/or~~plant ~~implementation~~in ofa ~~the~~major ~~licensing~~metropolitan ~~of our technology described above will require significant additional capital, which we currently do not have~~area. ToWe ~~date,~~are weworking ~~have~~to ~~not~~develop ~~been~~one ~~successful~~or inmore ~~raising~~locations ~~the~~where ~~amount~~waste ofcollected ~~capital~~would ~~necessary~~be toprocessed ~~implement~~using our ~~business~~technology ~~plan~~ and ~~we cannot provide any assurance that we will be able to raise sufficient additional capital. While we anticipate that financing for~~ the ~~commercial~~ biomass ~~recovery~~produced ~~plant~~used ~~and~~to ~~these~~create ~~other~~heat ~~potential projects could also be provided in part via tax exempt bond financing~~ and/or ~~through the use of loan guarantees from local, state and federal authorities, we have not secured any such financing and there can be no assurance that we will be able to secure any such financing~~power.

In ~~October~~addition ~~2014,~~to wethe ~~entered~~developments ~~into~~we aare ~~nonbinding~~currently ~~Memorandum of Understanding (“MOU”) with various parties (combined~~contemplating, ~~the~~from ~~“Parties”)~~time ~~which~~to ~~memorializes~~time ~~the~~other ~~Parties’~~development ~~intent~~opportunities ~~for~~are ~~CleanTech~~presented to ~~develop~~us and ~~operate~~we aevaluate ~~MSW~~those ~~transfer~~potential ~~station and biomass recovery plant on land in Jersey City, NJ not owned by CleanTech~~developments. ~~All~~If ~~Parties~~we ~~agree~~are able to ~~work~~operate ~~towards~~a ~~Definitive Agreements~~plant, asand ~~soon~~thereafter asrefine ~~reasonably~~our ~~practicable,~~know-how ~~including~~with ~~but~~respect ~~not limited~~ to: animplementation ~~escrow~~of ~~agreement whereby CleanTech would fund engineering and legal expenses incurred during~~ the ~~permitting application process~~technology, anwe ~~option~~intend ~~agreement~~to ~~providing~~seek ~~CleanTech the right~~ to ~~purchase~~partner ~~the~~with ~~permit~~waste ~~applicant~~haulers, alandfill ~~lease~~owners ~~agreement~~and ~~for~~municipalities ~~a period of not less than 20 years, including two 5 year options~~ to ~~extend~~implement the ~~term~~technology ofacross the ~~lease~~United toStates ~~30 years,~~ and ~~non-compete agreements from the parties~~internationally. This MOU will terminate upon the earlier of: (i) execution of the Definitive Agreements, (ii) mutual agreement between the Parties, and (iii) 5 PM (EST) on June 29, 2015. While this MOU has expired, we continue to work towards a Definitive Agreement.

OnAny ~~June~~development 23of commercial plants and/or implementation of the licensing of our technology described above will require significant additional capital, ~~2016~~which we currently do not have. To date, we ~~entered~~have ~~into~~not anbeen ~~Acquisition~~successful ~~Agreement~~in ~~with~~raising 25the ~~Van~~amount ~~Keuren~~of ~~LLC,~~capital anecessary ~~New~~to ~~Jersey~~implement ~~Limited~~our ~~Liability~~business ~~Company~~plan ~~(“Van~~and ~~Keuren”),~~we ~~pursuant~~cannot provide any assurance that we will be able to ~~which~~raise ~~the~~sufficient ~~Company~~additional ~~acquired~~capital. ~~99%~~While ofwe anticipate that financing for the ~~outstanding~~commercial ~~membership~~biomass ~~interests~~recovery plant and these other potential projects could also be provided in ~~Van~~part ~~Keuren~~via ~~with~~tax ~~the~~exempt ~~former~~bond ~~members~~financing or through the use of ~~Van~~loan ~~Keuren~~guarantees ~~retaining~~from alocal, 1%state ~~interest~~and federal authorities, we have not secured any such financing and there can be no assurance that we will be able to secure any such financing.

~~The~~In ~~New~~October ~~Jersey~~2014, ~~Sports~~we ~~and~~entered ~~Exposition~~into ~~Authority~~a ~~has~~nonbinding ~~received~~Memorandum ~~certification~~ of anUnderstanding ~~amendment~~(“MOU”) towith ~~the~~various ~~Solid~~parties ~~Waste~~(combined, ~~Management Plan from~~ the ~~New Jersey Department of Environmental Protection (~~“~~DEP~~Parties”) towhich ~~include~~memorializes the ~~proposed~~Parties’ ~~operation~~intent offor aCleanTech ~~municipal~~to ~~solid~~develop ~~waste~~and operate a MSW transfer station and ~~material~~biomass recovery ~~facility~~plant ~~(“TS/MRF”)~~on atland ~~a site located~~ in Jersey City, ~~New~~NJ ~~Jersey.~~not ~~CleanTech~~owned ~~Biofuels~~by ~~and~~CleanTech. ~~Van~~All ~~Keuren~~Parties ~~intend~~agree to ~~seek~~work ~~the~~towards ~~necessary~~Definitive ~~permits~~Agreements, ~~and~~as ~~approvals~~soon ~~from~~as ~~the~~reasonably ~~New~~practicable, ~~Jersey~~including ~~DEP~~but not limited to: ~~build,~~an ~~own~~escrow ~~and~~agreement ~~operate~~whereby ~~the~~CleanTech ~~TS/MRF.~~would Asfund ~~part~~engineering ofand legal expenses incurred during the ~~acquisition,~~permitting ~~CleanTech~~application ~~acquired~~process, an option agreement providing CleanTech the right to ~~lease~~purchase the ~~property~~permit inapplicant, ~~Jersey~~a ~~City~~lease ~~within~~agreement 30for ~~days~~a ~~after~~period of not less than 20 years, including two 5 year options to extend the ~~final~~term ~~permit~~of ~~issues~~the lease to 30 years, and non-compete agreements from the ~~New~~parties. ~~Jersey~~This ~~DEP.~~MOU ~~The~~will ~~Company~~terminate ~~intends~~upon tothe earlier of: (1i) ~~install~~execution ~~its~~of ~~Biomass~~the ~~Recovery~~Definitive ~~Process~~Agreements, on(ii) mutual agreement between the ~~site~~Parties, and (2iii) ~~operate~~5 ~~the~~PM ~~TS/MRF~~(EST) on June 29, 2015. While this MOU has expired, we continue to work towards a Definitive Agreement.

~~Van~~On ~~Keuren~~June ~~has~~23, ~~had~~2016, nowe ~~operations~~entered orinto ~~revenue~~an ~~since~~Acquisition ~~inception~~Agreement ~~and~~with ~~has~~25 ~~solely~~Van ~~been~~Keuren ~~working~~LLC, ~~towards~~a ~~obtaining~~New ~~the~~Jersey ~~permits~~Limited ~~required~~Liability toCompany ~~operate~~(“Van ~~the~~Keuren”), ~~TS/MRF.~~pursuant Asto ~~payment~~which ~~for~~ the ~~acquisition, the~~ Company ~~issued~~acquired in99% ~~the aggregate 1,000,000 shares~~ of ~~restricted common stock of~~ the ~~Company~~outstanding ~~(par value $0.001) to certain holders of~~ membership interests in Van Keuren. Aswith of the ~~close~~former ofmembers ~~business on June 23, 2016, the Company stock quote was $0.05. The total assets~~ of Van Keuren atretaining ~~the~~a ~~time of the acquisition were $51,000 (2.3~~1% ~~of the Company’s assets)~~interest. The liabilities and equity consisted of accounts payable of $27,000 and member equity of $24,000. The assets consist solely of costs incurred towards obtaining the required permits and have been recorded as an intangible asset on our consolidated financial statements. This intangible will be expensed if and when the Company and Van Keuren complete the permit process and begin operations.

5The New Jersey Sports and Exposition Authority has received certification of an amendment to the Solid Waste Management Plan from the New Jersey Department of Environmental Protection (“DEP”) to include the proposed operation of a municipal solid waste transfer station and material recovery facility (“TS/MRF”) at a site located in Jersey City, New Jersey. CleanTech Biofuels and Van Keuren intend to seek the necessary permits and approvals from the New Jersey DEP to build, own and operate the TS/MRF. As part of the acquisition, CleanTech acquired an option to lease the property in Jersey City within 30 days after the final permit issues from the New Jersey DEP. The Company intends to: (1) install its Biomass Recovery Process on the site, and (2) operate the TS/MRF.

OnVan ~~December~~Keuren 6,has ~~2016~~had no operations or revenue since inception and has solely been working towards obtaining the permits required to operate the TS/MRF. As payment for the acquisition, the Company ~~entered~~issued ~~into~~in athe ~~non-binding~~aggregate ~~Memorandum~~1,000,000 shares of ~~Understanding~~restricted common stock of the Company (~~“MOU”~~par value $0.001) ~~with~~to ~~Mercer~~certain ~~Group~~holders ~~International,~~of ~~Inc~~membership interests in Van Keuren. ~~which~~As ~~memorializes~~of the ~~Parties~~close ~~intent~~of ~~for~~business ~~CleanTech~~on toJune ~~lease~~23, 42016, ~~acres~~the ~~inside~~Company ofstock ~~Mercer~~quote ~~Groups’~~was ~~solid~~$0.05. ~~waste~~The ~~transfer~~total ~~station~~assets ~~facility~~of ~~where~~Van ~~CleanTech~~Keuren ~~intends~~at tothe ~~install~~time ~~its~~of ~~Biomass~~the ~~Recovery~~acquisition ~~Process~~were ~~technology~~$51,000 (2.3% ~~The~~of ~~MOU~~the ~~also~~Company’s ~~includes~~assets). aThe ~~provision~~liabilities ~~for~~and ~~Mercer~~equity ~~Group~~consisted toof ~~supply~~accounts ~~MSW~~payable ~~and~~of ~~pay~~$27,000 aand ~~tipping~~member ~~fee~~equity toof ~~the~~$24,000. ~~CleanTech~~The ~~operation.~~assets ~~This~~consist ~~MOU~~solely ~~was~~of ~~for~~costs anincurred ~~initial~~towards ~~term~~obtaining ofthe 90required ~~days~~permits and ~~expired~~have been recorded as an intangible asset on ~~March~~our 6,consolidated ~~2017~~financial statements. ~~The~~This ~~Parties~~intangible ~~continue~~will tobe ~~work~~expensed ~~toward~~if aand ~~definitive~~when ~~lease~~the Company and ~~supply~~Van ~~agreement~~Keuren complete the permit process and begin operations.

~~Bio-Fuel and Bio-Chemical Joint Testing/Research~~5

IfTable we are able to process MSW into biomass through our potential future biomass recovery plant and/or in future commercial vessels, we hope to enter into joint research agreements with companies looking to process biomass in their system(s) for various types of ~~energy and chemical production. We believe that this testing and research could provide possible revenue streams, projects and additional opportunities for use of our biomass.~~Contents

InOn ~~February~~December ~~2012~~6, we2016, the Company entered into a ~~Confidentiality~~non-binding ~~Agreement~~Memorandum ~~and~~of ~~Material~~Understanding ~~Transfer Agreement with Sweetwater Energy, Inc.~~ (“~~Sweetwater~~MOU”), ~~a renewable energy company~~ with ~~patent-pending~~Mercer ~~technology~~Group ~~to produce sugars from several types of biomass for use in the biofuel~~International, ~~biochemical and bioplastics markets~~Inc. Wewhich ~~agreed~~memorializes ~~and coordinated with~~ the ~~Third-Party~~Parties ~~Operator~~intent infor ~~Australia~~CleanTech to ~~ship~~lease 104 ~~pounds~~acres inside of ~~biomass~~Mercer ~~produced~~Groups’ atsolid ~~the~~waste ~~Third-Party~~transfer ~~Operator’s~~station facility towhere ~~the~~CleanTech ~~Sweetwater~~intends ~~lab~~to ~~for~~install ~~testing.~~its ~~The~~Biomass ~~shipment~~Recovery ~~arrived~~Process ~~in May 2012 and Sweetwater has completed their initial testing~~technology. InThe ~~June~~MOU ~~2011,~~also weincludes ~~entered into~~ a ~~Confidential~~provision ~~Disclosure~~for ~~and~~Mercer ~~Sampling~~Group ~~Agreement~~to ~~with~~supply ~~Novozymes~~MSW ~~North America, Inc., a developer of industrial enzymes, microorganisms,~~ and ~~biopharmaceutical~~pay ~~ingredients for conversion into~~ a ~~variety~~tipping offee ~~energy~~to ~~and~~the ~~chemical~~CleanTech ~~products~~operation. InThis ~~July~~MOU ~~2011,~~was ~~we supplied a sample of our biomass product~~ for ~~testing~~an ~~in their enzymatic hydrolysis process. Some~~ initial ~~testing~~term ~~was completed during the 3rd Quarter~~ of ~~2011.~~90 Wedays ~~expect further testing to occur for both of these companies~~ and ~~for~~expired ~~possible~~on ~~additional~~March ~~companies~~6, ~~upon~~2017. ~~securing~~The ~~the~~Parties ~~requisite~~continue ~~financing~~ to ~~build~~work toward a ~~biomass~~definitive ~~recovery~~lease ~~plant~~and tosupply ~~process MSW~~agreement.

~~New~~Bio-Fuel ~~Technologies;~~and ~~Commercializing~~Bio-Chemical ~~Existing~~Joint ~~Technologies~~Testing/Research

~~Because~~If ofwe ~~our~~are ~~ability~~able to ~~produce~~process aMSW ~~clean,~~into ~~homogenous~~ biomass ~~feedstock,~~through weour ~~are~~potential ~~frequently~~future ~~presented~~biomass ~~with~~recovery ~~the~~plant ~~opportunity to partner with~~ and/or ~~acquire~~in ~~new~~future ~~technologies.~~commercial Invessels, ~~addition~~we hope to ~~developing~~enter ~~our~~into ~~current~~joint ~~technologies,~~research weagreements ~~intend~~with tocompanies ~~continue~~looking to ~~add~~process ~~technologies~~biomass toin ~~our~~their ~~suite~~system(s) offor ~~solutions~~various ~~that~~types ~~complement~~of ~~our~~energy ~~core~~and ~~operations~~chemical production. We believe that ~~our~~this ~~current~~testing ~~technologies~~ and ~~aspects~~research ofcould ~~technologies~~provide inpossible ~~development~~revenue ~~or contemplation will enable us to eventually expand our business to use organic material from other waste~~ streams, ~~such~~projects ~~as municipal bio-solids from waste water facilities~~ and ~~animal~~additional ~~waste~~opportunities for ~~fuel~~use ~~production~~of our biomass.

ToIn ~~commercialize~~February ~~our~~2012, we entered into a Confidentiality Agreement and Material Transfer Agreement with Sweetwater Energy, Inc. (“Sweetwater”), a renewable energy company with patent-pending technology to produce sugars from several types of biomass for use in the biofuel, biochemical and bioplastics markets. We agreed and coordinated with the Third-Party Operator in Australia to ship 10 pounds of biomass produced at the Third-Party Operator’s facility to the Sweetwater lab for testing. The shipment arrived in May 2012 and Sweetwater has completed their initial testing. In June 2011, we ~~anticipate~~entered into a Confidential Disclosure and Sampling Agreement with Novozymes North America, Inc., a developer of industrial enzymes, microorganisms, and biopharmaceutical ingredients for conversion into a variety of energy and chemical products. In July 2011, we ~~will~~supplied ~~need~~a sample of our biomass product for testing in their enzymatic hydrolysis process. Some initial testing was completed during the 3rd Quarter of 2011. We expect further testing to: occur for both of these companies and for possible additional companies upon securing the requisite financing to build a biomass recovery plant to process MSW.

●New ~~construct~~Technologies; ~~and~~Commercializing ~~operate~~Existing ~~a commercial plant that: (i) processes MSW into cellulosic biomass for conversion into energy or chemical products and (ii) separates recyclables (metals, plastics, glass) for single-stream recycling;~~Technologies

●Because ~~identify~~of ~~and~~our ability to produce a clean, homogenous biomass feedstock, we are frequently presented with the opportunity to partner with ~~landfill~~or ~~owners~~acquire new technologies. In addition to developing our current technologies, ~~waste~~we ~~haulers~~intend ~~and~~to ~~municipalities~~continue to ~~identify~~add ~~locations~~technologies ~~suitable~~to ~~for~~our suite of solutions that complement our ~~technology;~~core operations. We believe that our current technologies and aspects of technologies in development or contemplation will enable us to eventually expand our business to use organic material from other waste streams such as municipal bio-solids from waste water facilities and animal waste for fuel production.

●To ~~pursue~~commercialize ~~additional opportunities to implement~~ our technology, inwe ~~commercial~~anticipate ~~settings~~we atwill ~~transfer~~need ~~stations and landfills in our licensed territories.~~to:

~~Our~~● ~~ability~~construct toand ~~implement~~operate ~~this~~a ~~strategy~~commercial isplant ~~heavily~~that: ~~dependent~~(i) onprocesses ~~our~~MSW ~~ability~~into tocellulosic ~~raise~~biomass ~~significant~~for ~~amounts~~conversion ofinto ~~additional~~energy ~~capital~~or ~~and~~chemical toproducts ~~hire appropriate managers~~ and ~~staff.~~(ii) ~~Our~~separates ~~success~~recyclables ~~will~~(metals, ~~also~~plastics, ~~depend~~glass) onfor asingle-stream ~~variety of market forces and other developments beyond our control.~~ recycling;

~~Industry~~● ~~Overview~~ identify and partner with landfill owners, waste haulers and municipalities to identify locations suitable for our technology; and

~~There~~● ~~are~~pursue ~~two~~additional ~~types~~opportunities ofto ~~MSW~~implement ~~Disposal:~~our technology in commercial settings at transfer stations and landfills in our licensed territories.

●Our ~~Municipal~~ability ~~Solid~~to ~~Waste~~implement ~~Landfills~~this ~~(“MSWLFs”)~~strategy -is ~~includes~~heavily ~~municipal~~dependent ~~solid~~on ~~waste,~~our ~~commercial~~ability ~~waste,~~to ~~industrial~~raise ~~waste,~~significant ~~construction~~amounts of additional capital and ~~demolition~~to ~~debris,~~hire appropriate managers and ~~bioreactors,~~staff. Our success will also depend on a variety of market forces and other developments beyond our control.

●Industry ~~Mass Burn/Incineration Plants~~Overview

6There are two types of MSW Disposal:

● Municipal Solid Waste Landfills (“MSWLFs”) - includes municipal solid waste, commercial waste, industrial waste, construction and demolition debris, and bioreactors, and

~~MSWLFs~~● ~~primarily~~Mass ~~receive~~Burn/Incineration household waste and commercial waste. MSWLFs can also receive non-hazardous sludge, industrial solid waste, and construction and demolition debris. All MSWLFs must comply with various federal, state and local laws and regulations. Plants

Disposing of waste in a landfill involves burying waste, and this remains a common practice in most countries. Historically, landfills were often established in disused quarries, mining voids or borrow pits. A properly-designed and well-managed landfill can be a hygienic and relatively inexpensive method of disposing of waste materials. Older, poorly-designed or poorly-managed landfills can create a number of adverse environmental impacts such as wind-blown litter, attraction of vermin, and generation of liquid leachate. Another common byproduct of landfills is gas (mostly composed of methane and carbon dioxide), which is produced as organic waste breaks down anaerobically. This gas can create odor problems, kill surface vegetation, and contributes to global warming.6

~~Waste~~Table ~~haulers or municipalities pay tipping fees, or gate rates, on a per ton basis to dispose~~ of garbage at a landfill. Gate rates operate in a manner similar to the published prices for airline tickets or hotels, before discounts or contract prices (which could be higher or lower) are considered. The gate rate is the true daily market value of the tipping fee. Contents

~~Mass~~Municipal ~~Burn/Incineration~~Solid ~~Plants~~Waste Landfills

~~Mass~~MSWLFs ~~Burn~~primarily -receive ~~Mass~~household ~~burn~~waste isand ~~combusting~~commercial ~~MSW generally without any pre-processing or separation~~waste. ~~The~~MSWLFs ~~resulting~~can ~~steam~~also isreceive ~~employed~~non-hazardous ~~for~~sludge, industrial ~~uses or for generating electricity. Mass burn facilities are sized according to the daily amount of~~ solid waste, ~~they~~and ~~expect~~construction toand ~~receive~~demolition debris. ~~Most~~All ~~mass~~MSWLFs ~~burn~~must ~~plants~~comply ~~can~~with ~~remove~~various ~~non-combustible~~federal, ~~steel~~state and ~~iron~~local ~~for~~laws ~~recycling~~and ~~before combustion using magnetic separation processes~~regulations. ~~Other non-ferrous metals can be recovered from the leftover ash.~~

~~Waste-to-Energy~~Disposing ~~(WTE)~~of ~~Plants~~waste -in ~~Current~~a ~~operating~~landfill ~~WTE~~involves ~~plants~~burying ~~burn~~waste, ~~MSW~~and inthis remains a ~~controlled~~common ~~environment~~practice toin ~~create~~most ~~steam~~countries. Historically, landfills were often established in disused quarries, mining voids or ~~electricity~~borrow pits. ~~Through~~A ~~this~~properly-designed ~~process~~and ~~the~~well-managed ~~volume~~landfill can be a hygienic and relatively inexpensive method of ~~solid~~disposing of waste materials. Older, poorly-designed or poorly-managed landfills can create a number of adverse environmental impacts such as wind-blown litter, attraction of vermin, and generation of liquid leachate. Another common byproduct of landfills is ~~reduced~~gas by(mostly ~~about~~composed ~~90%~~of methane and carbon dioxide), which is produced as organic waste breaks down anaerobically. This gas can create odor problems, kill surface vegetation, and contributes to global warming.

~~Modular~~Waste ~~Incinerators~~haulers -or ~~Modular~~municipalities ~~incinerators~~pay ~~are~~tipping ~~small~~fees, ~~mass~~or ~~burn~~gate ~~plants~~rates, ~~with~~on a ~~capacity~~per ofton 15basis to ~~100~~dispose ~~tons~~of ~~per~~garbage ~~day.~~at ~~The~~a ~~boilers~~landfill. ~~for~~Gate ~~modular~~rates ~~incinerators~~operate ~~are built~~ in a ~~factory~~manner ~~and~~similar ~~shipped~~ to the ~~WTE~~published ~~site,~~prices ~~rather~~for ~~than~~airline ~~being~~tickets ~~built~~or onhotels, ~~the~~before ~~WTE~~discounts ~~site~~or ~~itself.~~contract ~~The~~prices ~~advantage~~(which ofcould ~~a modular WTE incinerator is flexibility. If more capacity is needed, modular WTE units can~~ be ~~added.~~higher ~~These~~or ~~facilities~~lower) are ~~used primarily by small communities and industrial sites~~considered. ~~Costs~~The ~~limit~~gate ~~the~~rate ~~use~~is ~~of this technology because~~ the ~~return~~true ondaily ~~investment~~market invalue ~~terms~~ of ~~energy~~the ~~produced~~tipping ~~over time is much lower than in mass burn plants~~fee.

~~Refuse-Derived~~Mass ~~Fuel~~Burn/Incineration ~~(RDF)~~ Plants - RDF plants process solid waste before it is burned. A typical plant will remove non-combustible items, such as glass, metals and other recyclable materials. The remaining solid waste is then shredded into smaller pieces for burning. RDF plants require significantly more sorting and handling than mass burn, but can recover recyclables and remove some potentially environmentally harmful materials prior to combustion. RDF can be burned in power boilers at factories or even at large housing complexes. Sometimes RDF materials are "densified" (compacted at high pressure) to make fuel pellets. The "pellet fuel" may also include various sludges, by-products of municipal or industrial sewage treatment plants.

~~MSW~~Mass ~~contains~~Burn a- ~~diverse~~Mass ~~mix~~burn ofis ~~waste~~combusting ~~materials, some benign and some very toxic. Effective environmental management of~~ MSW ~~plants~~generally ~~aims~~without toany ~~exclude toxics from the MSW~~pre-~~fuel~~processing ~~and~~or ~~to control air pollution emissions from the WTE plants~~separation. ~~Toxic~~The ~~materials~~resulting ~~include~~steam ~~trace~~is ~~metals~~employed ~~such~~for asindustrial ~~lead,~~uses ~~cadmium~~or ~~and~~for ~~mercury,~~generating ~~and trace organics, such as dioxins and furans~~electricity. ~~Such~~Mass ~~toxins~~burn ~~pose~~facilities ~~an environmental problem if they~~ are ~~released~~sized ~~into~~according to the ~~air~~daily ~~with~~amount ~~plant~~of ~~emissions~~solid orwaste if they ~~are~~expect ~~dispersed~~to inreceive. ~~the~~Most ~~soil~~mass ~~and~~burn ~~allowed~~plants tocan ~~migrate~~remove ~~into~~non-combustible ~~ground~~steel ~~water~~and ~~supplies~~iron ~~and~~for ~~work~~recycling ~~their~~before ~~way~~combustion ~~into~~using ~~the~~magnetic ~~food~~separation ~~chain~~processes. ~~The~~Other ~~control~~non-ferrous ofmetals ~~such~~can ~~toxics~~be ~~and~~recovered ~~air~~from ~~pollution~~the ~~are~~leftover ~~key features of environmental regulations governing MSW fueled electric generation~~ash.

~~U.S.~~Waste-to-Energy ~~EPA~~(WTE) ~~rules~~Plants ~~are~~- ~~among~~Current ~~the~~operating ~~most~~WTE ~~stringent~~plants ~~environmental~~burn ~~standards~~MSW ~~for WTE facilities~~ in ~~the~~a ~~world.~~controlled ~~These~~environment ~~rules mandate that all facilities use the most modern air pollution control equipment available~~ to ~~ensure~~create ~~that~~steam ~~WTE~~or ~~smokestack~~electricity. ~~emissions~~Through ~~are~~this asprocess ~~clean~~the asvolume ~~possible,~~of ~~and~~solid ~~are~~waste ~~safe~~is ~~for~~reduced ~~human~~by ~~health~~about ~~and the environment~~90%.

7Modular Incinerators - Modular incinerators are small mass burn plants, with a capacity of 15 to 100 tons per day. The boilers for modular incinerators are built in a factory and shipped to the WTE site, rather than being built on the WTE site itself. The advantage of a modular WTE incinerator is flexibility. If more capacity is needed, modular WTE units can be added. These facilities are used primarily by small communities and industrial sites. Costs limit the use of this technology because the return on investment in terms of energy produced over time is much lower than in mass burn plants.

~~Burning~~Refuse-Derived ~~any~~Fuel ~~fuel,~~(RDF) ~~including~~Plants ~~MSW,~~- ~~can~~RDF ~~produce~~plants aprocess ~~number~~solid ofwaste ~~pollutants,~~before ~~such~~it asis ~~carbon~~burned. ~~monoxide~~A typical plant will remove non-combustible items, ~~sulfur~~such ~~dioxide~~as glass, metals and ~~fine~~other ~~particles~~recyclable ~~containing~~materials. ~~heavy~~The ~~metals.~~remaining ~~Other~~solid ~~toxic~~waste ~~organic~~is ~~compounds,~~then ~~such~~shredded asinto ~~dioxins,~~smaller ~~are~~pieces ~~also~~for ~~potential~~burning. ~~emissions~~RDF ~~from~~plants ~~any~~require ~~combustive~~significantly ~~activity~~more ~~where~~sorting ~~certain~~and ~~chemical~~handling ~~compounds~~than ~~are~~mass ~~present~~burn, abut ~~situation~~can ~~that~~recover ~~could~~recyclables ~~take~~and ~~place~~remove insome ~~the~~potentially ~~WTE~~environmentally ~~process~~harmful materials prior to combustion. ~~Air~~RDF ~~emission~~can ~~control~~be ~~devices~~burned in apower ~~WTE~~boilers ~~facility~~at ~~usually~~factories or even at large housing complexes. Sometimes RDF materials are "densified" (compacted at high pressure) to make fuel pellets. The "pellet fuel" may also include: various sludges, by-products of municipal or industrial sewage treatment plants.

●MSW ~~Dry~~contains ~~Scrubbers~~a –diverse ~~these~~mix ~~"wash"~~of waste materials, some benign and some very toxic. Effective environmental management of MSW plants aims to exclude toxics from the MSW-fuel and to control air pollution emissions from the WTE ~~process~~plants. ~~(called~~Toxic materials include trace metals such as lead, cadmium and mercury, and trace organics, such as dioxins and furans. Such toxins pose an environmental problem if they are released into the ~~gas~~air ~~stream)~~with plant emissions or if they are dispersed in the soil and ~~remove~~allowed ~~any~~to ~~acidic~~migrate ~~gases~~into byground ~~passing~~water supplies and work their way into the ~~gas~~food ~~stream~~chain. ~~through~~The acontrol ~~liquid~~of such toxics and air pollution are key features of environmental regulations governing MSW fueled electric generation.

●U.S. ~~Electrostatic~~EPA ~~Precipitators~~rules ~~(ESP)~~are –among ~~these~~the ~~use~~most ~~high~~stringent ~~voltage~~environmental ~~electricity~~standards tofor ~~remove~~WTE upfacilities toin ~~98%~~the ofworld. ~~all~~These ~~particles~~rules ~~remaining~~mandate inthat all facilities use the ~~gas~~most ~~stream~~modern ~~after~~air ~~passing~~pollution ~~through~~control ~~the~~equipment ~~scrubbers~~available to ensure that WTE smokestack emissions are as clean as possible, ~~including~~and ~~any~~are ~~heavy~~safe ~~metal~~for ~~particles~~human health and the environment.

● Fabric Filters (baghouses) – these consist of a series of nearly two thousand fabric bags made of heat-resistant material which filter remaining particles from the gas stream. This includes any large concentrations of condensed toxic organic compounds (such as dioxins) and heavy metal compounds.7

~~Incinerators~~Table ~~and RDF processors are paid tipping fees for the garbage that they accept. Typically, these fees are costlier than the fees paid to landfill operators, largely because~~ of ~~the high capital and operating costs at combustion facilities.~~ Contents

~~Competition~~Burning any fuel, including MSW, can produce a number of pollutants, such as carbon monoxide, sulfur dioxide, and fine particles containing heavy metals. Other toxic organic compounds, such as dioxins, are also potential emissions from any combustive activity where certain chemical compounds are present, a situation that could take place in the WTE process. Air emission control devices in a WTE facility usually include:

~~Competition~~● inDry ~~our~~Scrubbers ~~industry~~– ~~will~~these ~~primarily~~"wash" ~~come~~the ~~from~~air ~~Mass~~emissions ~~Burn,~~from ~~RFD,~~the ~~and/or~~ WTE ~~plants~~process if(called wethe ~~produce~~gas ~~power~~stream) and ~~steam.~~remove ~~All~~any ofacidic ~~these~~gases ~~types~~by ofpassing ~~plants~~the ~~use~~gas ~~MSW~~stream ~~for~~through ~~their~~a ~~feedstock~~liquid.

~~Many~~● ofElectrostatic ~~these~~Precipitators ~~plants~~(ESP) ~~are~~– ~~operational~~these ~~and~~use ~~have~~high ~~been~~voltage ~~operating~~electricity ~~for~~to ~~years~~remove inup ~~the~~to ~~United~~98% ~~States,~~of ~~and~~all ~~thus~~particles ~~have~~remaining ~~substantially~~in ~~more~~the ~~operating~~gas ~~experience~~stream ~~than~~after ~~our~~passing ~~company.~~through Wethe ~~believe our Biomass Recovery Process may produce a cleaner~~scrubbers, ~~more~~including ~~homogenous~~any ~~fuel~~heavy ~~for~~metal ~~boilers and gasifiers~~particles.

~~Environmental~~● ~~Matters~~Fabric Filters (baghouses) – these consist of a series of nearly two thousand fabric bags made of heat-resistant material which filter remaining particles from the gas stream. This includes any large concentrations of condensed toxic organic compounds (such as dioxins) and heavy metal compounds.

WeIncinerators ~~believe our operations will be subject to international, federal, state~~ and ~~local~~RDF ~~laws~~processors ~~and~~are ~~regulations~~paid ~~with~~tipping ~~regard~~fees tofor ~~air~~the ~~and~~garbage ~~water quality, hazardous and solid waste disposal and other environmental matters upon operation. There is always a risk~~ that ~~the~~they ~~federal agencies may enforce certain rules and regulations differently than state and local environmental administrators~~accept. ~~Federal~~Typically, ~~state~~these ~~and~~fees ~~local rules and regulations~~ are ~~subject~~costlier tothan ~~change,~~the ~~and~~fees ~~any~~paid ~~such changes could result in greater regulatory burdens on plant operations. We could also be subject~~ to ~~environmental~~landfill ~~or nuisance claims from adjacent property owners or residents in the areas arising from possible foul smells~~operators, ~~noise~~largely orbecause ~~other~~of ~~air or water discharges from~~ the ~~plant.~~high Wecapital doand ~~not~~operating ~~know~~costs ~~the~~at ~~potential~~combustion ~~cost of these requirements or potential claims~~facilities. ~~Environmental laws and regulations that may affect us in the future may include, but are not limited to:~~

● The Clean Air Act, as well as state laws and regulations impacting air emissions, including State Implementation Plans related to existing and new National Ambient Air Quality Standards for ozone and particulate matter. Owners and/or operators of air emission sources are responsible for obtaining permits and for annual compliance and reporting.Competition

●Competition ~~The~~in ~~Clean~~our ~~Water~~industry ~~Act~~will ~~which~~primarily ~~requires~~come ~~permits~~from ~~for~~Mass ~~facilities~~Burn, ~~that~~RFD, ~~discharge~~and/or ~~wastewaters~~WTE ~~into~~plants ~~the~~if ~~environment~~we produce power and steam. All of these types of plants use MSW for their feedstock.

●Many ~~The~~of ~~Solid~~these ~~Waste~~plants ~~Disposal~~are ~~Act,~~operational asand ~~amended~~have bybeen operating for years in the ~~Resource~~United ~~Conservation~~States, and ~~Recovery~~thus ~~Act,~~have ~~which~~substantially ~~requires~~more ~~certain~~operating ~~solid~~experience ~~wastes,~~than ~~including~~our ~~hazardous~~company. ~~wastes,~~We tobelieve beour ~~managed~~Biomass ~~pursuant~~Recovery toProcess may produce a ~~comprehensive~~cleaner, ~~regulatory~~more ~~regime~~homogenous fuel for boilers and gasifiers.

~~● The National~~ Environmental ~~Policy Act, which requires federal agencies to consider potential environmental impacts in their decisions, including siting approvals.~~Matters

~~Government~~We ~~Approvals~~believe our operations will be subject to international, federal, state and local laws and regulations with regard to air and water quality, hazardous and solid waste disposal and other environmental matters upon operation. There is always a risk that the federal agencies may enforce certain rules and regulations differently than state and local environmental administrators. Federal, state and local rules and regulations are subject to change, and any such changes could result in greater regulatory burdens on plant operations. We could also be subject to environmental or nuisance claims from adjacent property owners or residents in the areas arising from possible foul smells, noise or other air or water discharges from the plant. We do not know the potential cost of these requirements or potential claims. Environmental laws and regulations that may affect us in the future may include, but are not limited to:

● The ~~Company~~Clean isAir ~~not currently subject to any government approvals or oversight for its current operations other than normal corporate governance and taxes. However~~Act, ifas wewell ~~are~~as ~~able to begin developing commercial production facilities, we will be subject to multiple federal,~~ state ~~and local environmental~~ laws and regulations, ~~such~~impacting asair ~~those~~emissions, ~~described~~including ~~above~~State ~~and~~Implementation ~~for~~Plans ~~employee~~related ~~health~~to ~~and~~existing ~~safety. In addition, some of these laws~~ and ~~regulations~~new ~~will~~National ~~require~~Ambient ~~our~~Air ~~prospective~~Quality ~~facilities~~Standards tofor ~~operate~~ozone ~~under~~and ~~permits~~particulate ~~that are subject to renewal or modification~~matter. AOwners ~~violation of these laws~~ and ~~regulations~~ /or ~~permit~~operators ~~conditions~~of ~~can~~air ~~result~~emission insources ~~substantial~~are ~~fines,~~responsible ~~natural~~for ~~resource~~obtaining ~~damages,~~permits ~~criminal~~and ~~sanctions,~~for ~~permit~~annual ~~revocations~~compliance and~~/or~~ ~~facility shutdowns~~reporting.

8● The Clean Water Act which requires permits for facilities that discharge wastewaters into the environment.

~~Our~~● ~~Technology~~The Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act, which requires certain solid wastes, including hazardous wastes, to be managed pursuant to a comprehensive regulatory regime.

We● ~~believe~~The weNational ~~can~~Environmental ~~convert~~Policy ~~MSW into cellulosic material using our Biomass Recovery Process~~Act, which ~~can~~requires ~~then~~federal beagencies ~~used by a variety of third party technologies as a feedstock~~ to ~~process~~consider ~~that~~potential ~~cellulosic~~environmental ~~material~~impacts ~~into~~in atheir ~~variety~~decisions, ofincluding ~~energy~~siting ~~and chemical products~~approvals.

~~Biomass~~Government ~~Recovery Process~~Approvals

~~MSW~~The ~~contains~~Company ~~valuable~~is ~~resources~~not ifcurrently ~~they~~subject ~~can~~to beany ~~recovered~~government ~~economically.~~approvals ~~Waste~~or ~~haulers~~oversight ~~often~~for ~~bring~~its ~~unsorted~~current ~~waste~~operations byother ~~truck~~than normal corporate governance and taxes. However, if we are able to ~~material~~begin ~~recovery~~developing commercial production facilities, ~~also~~we ~~known~~will asbe ~~MRFs~~subject to multiple federal, ~~for~~state ~~sorting~~and local environmental laws and ~~removal~~regulations, ofsuch ~~selected~~as ~~materials~~those ~~prior~~described toabove ~~disposal~~and infor ~~sanitary~~employee ~~landfills~~health and safety. In addition, ~~certain~~some ~~customers~~ of ~~waste~~these ~~haulers~~laws ~~separate~~and ~~recyclables~~regulations ~~prior~~will torequire ~~collection.~~our ~~Per~~prospective afacilities ~~February~~to ~~2016~~operate ~~U.S.~~under ~~Environmental~~permits ~~Protection~~that ~~Agency~~are ~~(“EPA”)~~subject ~~update~~to onrenewal ~~MSW,~~or ~~approximately 34~~modification.3% A violation of ~~MSW~~these ~~was~~laws ~~recycled~~and regulations or ~~composted~~permit conditions can result in ~~2013.~~substantial fines, natural resource damages, criminal sanctions, permit revocations and/or facility shutdowns.

The PSC technology was developed at the University of Alabama in Huntsville and improved by Anthony Noll into the technology we refer to as the Biomass Recovery Process. The process separates curbside MSW into organic and inorganic materials using a patented and proprietary process that involves a unique combination of steam, pressure and agitation. The separation is accomplished by placing waste material in a rotating pressure vessel, or autoclave. In the autoclave, the material is heated to several hundred degrees, which sterilizes the waste material, while the pressure and agitation cause a pulping action. This combination is designed to result in a large volume reduction, yielding the following two sterilized resource streams for further manufacturing of new products:8

●Table ~~Cellulosic biomass, a decontaminated, homogeneous feedstock that we expect will represent approximately 50 to 60 percent~~ of ~~the incoming MSW and will be suitable for conversion to multiple energy or chemical products, and~~Contents

●Our Separated recyclables (steel cans and other ferrous materials, aluminum cans, plastics, and glass), which we expect will represent about 25 percent of the MSW input and are sorted and can be sold to recyclers.Technology

~~The~~We ~~process~~believe ~~also~~we ~~creates~~can ~~residual~~convert ~~waste~~MSW ~~(fines,~~into ~~rocks,~~cellulosic ~~soil,~~material ~~textiles~~using ~~and~~our ~~non-recyclable~~Biomass ~~fractions)~~Recovery Process, which wecan ~~expect~~then ~~will~~be ~~represent~~used ~~the~~by ~~remaining~~a 15variety ~~to 25 percent~~ of ~~the~~third ~~MSW~~party ~~input.~~technologies Weas doa ~~not~~feedstock ~~expect~~ to beprocess ~~able~~that tocellulosic ~~recover~~material ~~any~~into ~~value~~a invariety ~~this~~of ~~residual~~energy ~~waste. We will be required to deliver this waste to landfills~~ and ~~incur~~chemical ~~the tipping fees expense~~products.

~~The~~Biomass ~~process~~Recovery is currently used in a commercial plant operated by a Third-Party Operator in Coffs Harbor, Australia that has been in operation for over seven years. We believe that our process represents a significant improvement over other autoclave technologies currently in use because of: Process

●MSW ~~the~~contains ~~relationship~~valuable ~~between~~resources ~~agitation~~if ofthey ~~the~~can be recovered economically. Waste haulers often bring unsorted waste by truck to material, ~~moisture~~recovery facilities, ~~and~~also ~~the~~known ~~temperature~~as MRFs, for sorting and ~~pressure~~removal of ~~steam~~selected materials prior to disposal in ~~the~~sanitary ~~vessel~~landfills. ~~uses~~In ~~less~~addition, ~~energy~~certain ~~while~~customers ~~obtaining~~of waste haulers separate recyclables prior to collection. Per a ~~cleaner~~February ~~biomass~~2016 ~~resource;~~U.S. Environmental Protection Agency (“EPA”) update on MSW, approximately 34.3% of MSW was recycled or composted in 2013.

●The PSC technology was developed at the ~~method~~University of ~~introduction~~Alabama ofin ~~steam~~Huntsville and improved by Anthony Noll into the ~~autoclave~~technology ~~vessel,~~we refer to as the Biomass Recovery Process. The process separates curbside MSW into organic and inorganic materials using a patented and proprietary process that involves a unique combination of steam, pressure ~~range~~and agitation. The separation is accomplished by placing waste material in a rotating pressure vessel, ~~along~~or ~~with~~autoclave. In the ~~method~~autoclave, ofthe ~~full~~material ~~depressurization~~is heated to several hundred degrees, ~~and~~which ~~treatment~~sterilizes ofthe waste material, while the ~~steam~~pressure ~~being~~and ~~vented~~agitation ~~from~~cause ~~the~~a ~~process~~pulping action. This combination is designed to ~~prevent~~result ~~air~~in ~~pollution~~a ~~make~~large ~~our~~volume ~~process~~reduction, ~~more~~yielding ~~environmentally~~the ~~friendly~~following ~~than~~two ~~any~~sterilized ~~other~~resource ~~means~~streams tofor ~~handle~~further ~~MSW;~~manufacturing of new products:

● ~~the~~Cellulosic ~~method~~biomass, ofa ~~mixing~~decontaminated, ~~the~~homogeneous ~~heat~~feedstock ~~and~~that ~~steam~~we ~~with~~expect ~~the~~will ~~waste~~represent ~~uniformly~~approximately ~~throughout~~50 to 60 percent of the ~~vessel~~incoming ~~creates~~MSW aand ~~homogenous~~will ~~feedstock~~be suitable for ~~fuel~~conversion ~~production;~~to multiple energy or chemical products, and

● ~~the~~Separated ~~direct~~recyclables ~~and~~(steel ~~critical~~cans ~~correlation~~and ~~between~~other ~~the~~ferrous ~~length~~materials, ~~and~~aluminum ~~diameter~~cans, ofplastics, ~~the~~and ~~vessel~~glass), ~~internal~~which ~~flighting~~we ~~and~~expect ~~the~~will ~~total~~represent ~~tonnage~~about of25 ~~waste~~percent toof bethe ~~processed~~MSW ~~for~~input ~~proper~~and ~~mixing~~are sorted and ~~product~~can ~~yield~~be sold to recyclers.

IfThe weprocess ~~are~~also ~~able~~creates toresidual ~~continue~~waste to(fines, ~~develop~~rocks, ~~our~~soil, ~~business~~textiles and ~~pursue~~non-recyclable ~~opportunities~~fractions), which we ~~may~~expect ~~incur~~will ~~research~~represent ~~and~~the ~~development~~remaining ~~costs~~15 to 25 percent of the MSW input. We ~~incurred~~do nonot ~~costs~~expect to be able to recover any value in ~~2016~~this ~~and~~residual ~~2015~~waste. ~~for~~We ~~research~~will be required to deliver this waste to landfills and ~~development.~~incur the tipping fees expense.

9The process is currently used in a commercial plant operated by a Third-Party Operator in Coffs Harbor, Australia that has been in operation for over seven years. We believe that our process represents significant improvement over other autoclave technologies currently in use because of:

~~Principal~~● ~~Products~~the orrelationship ~~Services~~between agitation of the waste material, moisture, and ~~their~~the ~~Markets~~temperature and pressure of steam in the vessel uses less energy while obtaining a cleaner biomass resource;

If● wethe ~~determine~~method ~~that~~of ~~our~~introduction ~~licensed~~of ~~technologies~~steam ~~are~~into ~~commercially~~the ~~viable~~autoclave ~~and~~vessel, wethe ~~are~~pressure ~~able~~range, toalong ~~raise~~with athe ~~significant~~method ~~amount~~ of ~~additional~~full ~~capital~~depressurization, ~~we may be in a position to begin to license~~ and~~/or~~ ~~enter~~treatment ~~into~~of ~~long-term~~the ~~contracts~~steam ~~with~~being ~~municipalities,~~vented ~~solid~~from ~~waste~~the ~~haulers,~~process ~~and~~to ~~operators~~prevent ofair ~~landfills~~pollution ~~and~~make ~~materials~~our ~~recovery facilities to~~ process amore ~~large~~environmentally ~~portion~~friendly ofthan ~~their~~any ~~waste~~other ~~streams~~means ~~into~~to ~~biomass~~handle ~~and recyclable materials.~~MSW;

~~Energy/Chemicals~~● the method of mixing the heat and steam with the waste uniformly throughout the vessel creates a homogenous feedstock for fuel production; and

We● ~~expect~~ the ~~primary~~direct ~~product~~and wecritical ~~will~~correlation ~~sell~~between ~~will~~the belength ~~biomass~~and ~~from~~diameter ~~our Biomass Recovery Process to be used for conversion to energy or chemical products. We believe our potential biomass product can be used in multiple varieties~~ of ~~energy~~the ~~production~~vessel, ~~systems.~~internal Weflighting ~~expect~~and the ~~uses~~total ~~for~~tonnage ~~our~~of ~~biomass~~waste ~~product~~ to ~~potentially~~be ~~expand~~processed asfor ~~new~~proper ~~energy~~mixing ~~production~~and ~~technologies~~product ~~are developed~~yield.

~~MSW~~If ~~Processing~~we ~~Services~~are able to continue to develop our business and pursue opportunities, we may incur research and development costs. We incurred no costs in 2017 and 2016 for research and development.

We believe that the opportunity to help communities, haulers and landfill managers reduce the amount of material transported and deposited in landfills is large and growing. The Resource Conservation and Recovery Act of 1991, referred to as RCRA, requires landfills to install expensive liners and other equipment to control leaching toxics. Due to the increased costs and expertise required to manage landfills under RCRA, many small, local landfills closed during the 1990’s. Larger regional landfills were built requiring increased transportation costs for the waste haulers. As a result, landfill space is increasingly scarce and disposal costs have been increasing. 9

~~Currently,~~Table landfill operators charge a tipping fee to deliver MSW to a landfill, waste-to-energy facility, recycling facility, transfer station or similar facility. Tipping fees vary widely based on geographic location and the number of available places to dispose of MSW in a given location. Because of the increasing cost pressures on waste haulers and based on current tipping fee pricing, we believe we will be able to negotiate a payment of part of their tipping fee from waste haulers who deliver MSW to us for processing that would range from as low as $15 per ton in some central parts of the country to over $90 per ton in the Northeast and parts of the Southeast. The availability of tipping fees at favorable rates will be a key component of our business.Contents

~~Recyclable~~Principal ~~Byproducts~~Products or Services and their Markets

WeIf ~~anticipate~~we determine that our ~~Biomass~~licensed ~~Recovery~~technologies ~~Process~~are ~~will~~commercially ~~generate~~viable ~~other~~and ~~recyclable~~we ~~byproducts~~are ~~from~~able ~~the~~to ~~processing~~raise ofa ~~MSW,~~significant ~~such~~amount asof ~~aluminum,~~additional ~~metals~~capital, ~~tin,~~we ~~steel,~~may ~~glass~~be ~~and~~in ~~plastic~~a ~~(typically~~position 20 to 25begin ~~percent~~to oflicense ~~the~~and/or ~~total~~enter ~~waste~~into ~~stream).~~long-term ~~The~~contracts ~~markets~~with ~~for~~municipalities, ~~these~~solid ~~recovered~~waste ~~products~~haulers, ~~are volatile~~ and ~~subject~~operators toof ~~rapid~~landfills and ~~unpredictable~~materials ~~market~~recovery ~~changes~~facilities ~~making~~to itprocess ~~impossible~~a atlarge ~~this~~portion ~~time~~of totheir ~~provide~~waste ~~estimated~~streams ~~per~~into ~~ton~~biomass ~~cost~~and torecyclable ~~revenue information~~materials.

~~Sources and Availability of Raw Materials~~Energy/Chemicals

We ~~believe~~expect the ~~emergence~~primary ofproduct ~~technologies~~we towill ~~convert~~sell ~~MSW~~will tobe ~~energy~~biomass orfrom ~~chemicals~~our isBiomass ~~opening~~Recovery ~~new~~Process ~~opportunities.~~to ~~What~~be ~~was~~used ~~once~~for ~~perhaps~~conversion ~~the~~to ~~greatest~~energy ~~sanitation~~or ~~and~~chemical ~~health~~products. ~~challenge~~We ~~for~~believe ~~communities~~our ~~may~~potential ~~eventually~~biomass ~~become~~product ancan ~~economic~~be ~~and~~used ~~environmental~~in ~~asset.~~multiple ~~Instead~~varieties of ~~adding~~energy toproduction ~~landfills~~systems. ~~already~~We ~~nearing~~expect ~~capacity~~the ~~limits,~~uses ~~converting~~for ~~MSW~~our ~~into~~ biomass ~~may~~product ~~provide~~to ~~one~~potentially ofexpand ~~the~~as ~~building~~new ~~blocks~~energy toproduction atechnologies ~~more~~are ~~sustainable energy future~~developed.

~~Americans produce more than 250 million tons of~~ MSW ~~annually.~~Processing About 35% of this waste is currently recovered and recycled. We estimate that approximately up to an additional 45-50% could potentially be recovered. As various waste processing technologies are refined, competition for this future resource will likely intensify. As a result, it will be important for us to attempt to secure access to as much MSW as possible through long-term feedstock supply agreements with operators of materials recovery facilities and landfills.Services

10We believe that the opportunity to help communities, haulers and landfill managers reduce the amount of material transported and deposited in landfills is large and growing. The Resource Conservation and Recovery Act of 1991, referred to as RCRA, requires landfills to install expensive liners and other equipment to control leaching toxics. Due to the increased costs and expertise required to manage landfills under RCRA, many small, local landfills closed during the 1990’s. Larger regional landfills were built requiring increased transportation costs for the waste haulers. As a result, landfill space is increasingly scarce and disposal costs have been increasing.

~~Intellectual~~Currently, ~~Property~~landfill ~~Terms~~operators charge a tipping fee to deliver MSW to a landfill, waste-to-energy facility, recycling facility, transfer station or similar facility. Tipping fees vary widely based on geographic location and the number of available places to dispose of MSW in a given location. Because of the increasing cost pressures on waste haulers and based on current tipping fee pricing, we believe we will be able to negotiate a payment of part of their tipping fee from waste haulers who deliver MSW to us for processing that would range from as low as $15 per ton in some central parts of the country to over $90 per ton in the Northeast and parts of the Southeast. The availability of tipping fees at favorable rates will be a key component of our business.

~~Biomass~~Recyclable ~~North America Licensing, Inc.~~Byproducts

OnWe ~~September~~anticipate ~~15,~~that ~~2008,~~our ~~the Company consummated the acquisition of~~ Biomass ~~North~~Recovery ~~America~~Process ~~Licensing,~~will ~~Inc.,~~generate another ~~Illinois~~recyclable ~~corporation~~byproducts ~~(“Biomass”),~~from ~~pursuant~~the toprocessing ~~a merger between Biomass and a wholly-owned subsidiary~~ of ~~the~~MSW, ~~Company~~such ~~(with Biomass~~ as ~~the~~aluminum, ~~surviving~~metals, ~~subsidiary~~tin, ofsteel, ~~the~~glass ~~Company)~~and inplastic ~~accordance~~(typically ~~with~~20 anto ~~Agreement~~25 ~~and~~percent ~~Plan~~ of ~~Merger by and between~~ the ~~Company~~total ~~and~~waste ~~Biomass~~stream). ByThe ~~virtue~~markets offor ~~the~~these ~~merger,~~recovered ~~the~~products ~~Company~~are ~~acquired~~volatile ~~a license agreement pursuant to which the Company holds a license in the United States~~ and ~~Canada~~subject to ~~use~~rapid ~~the patented technology that cleans~~ and ~~separates~~unpredictable ~~MSW~~market ~~that~~changes wemaking ~~refer~~it toimpossible asat the Biomass Recovery Process, which is owned by Biomass North America, LLC, the former parent of Biomass (the “Licensor”). In July 2010, the United States Patent and Trademark Office issued US patent number 7,745,208 for this ~~process~~time ~~(the~~to ~~“BRP~~provide ~~Patent”).~~estimated ~~The~~per ~~BRP~~ton ~~Patent~~cost ~~expires~~to inrevenue ~~June 2028~~information.

InSources ~~accordance with a November 2013 amendment, the Company has an exclusive license in the United States~~ and ~~Canada~~Availability ~~to use the Biomass Recovery Process and includes no performance requirements on the Company; the license agreement is for a term~~ of 21Raw years from the date of the amendment or the life of any patent issued for the Biomass Recovery Process, including any amendments, modifications or extensions; the license requires that the Company pay a royalty in the amount of $2.00 per ton of MSW used in the Biomass Recovery Process to the Licensor; and the Company released the 4,000,000 shares of common stock to the Licensor previously held in escrow since the merger.Materials

~~PSC~~We ~~Patent~~believe the emergence of technologies to convert MSW to energy or chemicals is opening new opportunities. What was once perhaps the greatest sanitation and health challenge for communities may eventually become an economic and environmental asset. Instead of adding to landfills already nearing capacity limits, converting MSW into biomass may provide one of the building blocks to a more sustainable energy future.

~~The~~Americans ~~Company~~produce ~~owns~~more ~~U.S.~~than ~~Patent~~250 ~~No.~~million ~~6,306,248~~tons ~~(the~~of ~~“PSC~~MSW ~~Patent”), which is the underlying technology upon which the BRP Patent is based~~annually. ~~The~~About ~~Company~~35% ~~acquired~~of ~~the~~this ~~PSC~~waste ~~Patent on October 22, 2008, pursuant to a Patent Purchase Agreement with World Waste Technologies, Inc. (“WWT”). The Patent~~ is ~~the~~currently ~~basis~~recovered ~~for the pressurized steam classification technology that cleans~~ and ~~separates MSW into its component parts, which we refer to as the PSC technology~~recycled. ~~The~~We ~~PSC~~estimate ~~Patent expires in November 2017. Pursuant to a Master License Agreement with Bio-Products~~ that ~~the~~approximately ~~Company~~up acquired in connection with the acquisition of the PSC Patent (the “Bio-Products License Agreement”), Bio-Products was the exclusive licensee of the PSC technology (but not the Biomass Recovery Process), although pursuant to aan ~~settlement~~additional ~~agreement with Bio~~45-~~Products~~50% incould ~~March~~potentially ~~2009,~~be ~~the Company has the right to use the Biomass Recovery Process worldwide, for any product and with no royalty due to Bio-Products~~recovered. OnAs ~~September~~various ~~22,~~waste ~~2010,~~processing ~~the~~technologies ~~Company~~are ~~sent a Notice of Breach to the licensee of our PSC Patent. We received a response from the licensee on November 5~~refined, ~~2010.~~competition Infor ~~February~~this ~~2011,~~future weresource ~~became~~will ~~aware~~likely ~~that the licensee affected a transfer of the license in violation of the Bio-Products License Agreement~~intensify. As a result, onit ~~March~~will ~~21,~~be ~~2011,~~important we sent a notice of termination to the licensee and the transferee terminating the Bio-Products License Agreement. On June 16, 2011, Steve Vande Vegte, a shareholder of the parent of Bio-Products, filed a lawsuit against various individuals and companies, including the Company. The only Cause of Action against the Company was for ~~Declaratory~~us ~~Relief seeking~~ to ~~void~~attempt ~~our March 2011 termination of the license~~ to ~~which~~secure ~~Mr.~~access ~~Vande Vegte is not a party. On August 5, 2011, the Company filed a demurrer requesting that the court dismiss the case on the grounds that Mr. Vande Vegte lacks standing~~ to ~~pursue~~as amuch ~~claim~~MSW ~~concerning~~as ~~the~~possible ~~license~~through ~~and that the claim raised in the complaint is not ripe. On December 8, 2011, the demurrer to dismiss the Company was granted. In October 2011, a Cross~~long-~~Complaint~~term ~~was~~feedstock ~~filed~~supply byagreements ~~Clean~~with ~~Conversion~~operators ~~Technologies, Inc. (“CCT”) and Michael Failla against the Company. CCT was seeking to void the Company’s termination~~ of ~~the~~materials ~~Bio-Products~~recovery ~~License~~facilities ~~Agreement. This case was voluntarily dismissed per the filing with the court in February 2014. Additionally, CCT filed suit against the Company~~ and ~~Steve Vande Vegte alleging anti-trust violations~~landfills. ~~This case was voluntarily dismissed per the filing with the court in August 2013.~~

~~Employees~~10

~~The~~Table ~~Company~~of currently has one full-time employee, its Chief Executive Officer and Interim Chief Financial Officer, Edward P. Hennessey, Jr., and two part-time employees, its Chief Technology Officer, David Fenton and its VP-Business Development, Scott Fenton. Both David and Scott Fenton are continuing their engineering consulting business, Fenton Engineering International, on a full-time basis and are available to the Company as needed. Neither David nor Scott Fenton receive a salary from the Company but they are eligible for stock awards.Contents

11Intellectual Property Terms

~~Access~~Biomass toNorth ~~SEC~~America ~~Filings~~Licensing, Inc.

WeOn ~~electronically~~September ~~file~~15, ~~our~~2008, ~~annual~~the ~~report~~Company onconsummated ~~Form 10-K~~the acquisition of Biomass North America Licensing, ~~quarterly~~ ~~reports~~Inc., onan ~~Form 10-Q~~Illinois corporation (“Biomass”), ~~current~~ ~~reports~~pursuant onto ~~Form 8-K~~ a merger between Biomass and ~~all~~a ~~amendments~~wholly-owned tosubsidiary ~~those~~of ~~reports~~the Company (with Biomass as the ~~Securities~~surviving ~~and~~subsidiary ~~Exchange~~of ~~Commission~~the ~~(SEC~~Company). ~~The~~in ~~public~~accordance ~~may~~with ~~read~~an Agreement and ~~copy~~Plan ~~any~~of Merger by and between the Company and Biomass. By virtue of the ~~reports~~merger, ~~that~~the ~~are~~Company ~~filed~~acquired ~~with~~a license agreement pursuant to which the ~~SEC~~Company atholds a license in the ~~SEC’s~~United ~~Public~~States ~~Reference~~and ~~Room~~Canada atto ~~100~~use Fthe ~~Street,~~patented ~~NE,~~technology ~~Washington,~~that DCcleans ~~20549.~~and ~~The~~separates ~~public~~MSW ~~may~~that ~~obtain~~we ~~information~~refer onto as the ~~operation~~Biomass ofRecovery ~~the~~Process, ~~Public~~which ~~Reference~~is ~~Room~~owned by ~~calling~~Biomass North America, LLC, the ~~SEC~~former at parent of Biomass (~~800~~the “Licensor”)~~-SEC-0330~~. ~~The~~ ~~SEC~~In ~~maintains~~July an2010, ~~Internet~~the ~~site~~United atStates ~~www.sec.gov~~Patent ~~that~~and ~~contains~~Trademark ~~reports~~Office issued US patent number 7,745,208 ~~proxy~~for ~~and~~this ~~information~~process ~~statements~~(the ~~and~~“BRP ~~other~~Patent”). ~~information~~The ~~regarding~~BRP ~~issuers~~Patent ~~that~~expires ~~file~~in ~~electronically~~June 2028.

~~Interested~~In ~~readers~~accordance ~~can~~with ~~access,~~a ~~free~~November of2013 ~~charge~~amendment, ~~all~~the ofCompany ~~our~~has ~~filings~~an ~~with~~exclusive license in the ~~SEC~~United States and ~~any~~Canada ~~amendments~~ to ~~those~~use ~~reports~~the ~~filed~~Biomass orRecovery ~~furnished~~Process ~~pursuant~~and toincludes ~~Section~~no ~~13(a)~~performance orrequirements ~~15(d)~~on of the ~~Securities~~Company; ~~Exchange~~the ~~Act~~license ofagreement ~~1934,~~is asfor ~~amended,~~a ~~through~~term ~~the~~of ~~About~~21 ~~Us/Investor~~years ~~Relations/SEC~~from ~~Filings~~the ~~section~~date of ~~our~~the ~~website~~amendment ator ~~www.cleantechbiofuels.net~~the aslife ~~soon~~of asany ~~reasonably~~patent ~~practicable~~issued ~~after~~for wethe ~~electronically~~Biomass ~~file~~Recovery ~~such~~Process, ~~materials~~including ~~with~~any amendments, modifications or ~~furnish~~extensions; ~~them~~the ~~to,~~license requires that the ~~SEC.~~Company Wepay ~~will~~a ~~also~~royalty ~~provide~~in athe ~~copy~~amount of ~~these~~$2.00 ~~documents,~~per ~~free~~ton of ~~charge,~~MSW toused ~~any~~in ~~stockholder~~the ~~upon~~Biomass ~~written~~Recovery ~~request~~Process ~~addressed~~ to: ~~CleanTech~~the ~~Biofuels,~~Licensor; ~~Inc.,~~and ~~7386~~the ~~Pershing~~Company ~~Ave,~~released ~~University~~the ~~City~~4,000,000 MOshares ~~63130.~~of common stock to the Licensor previously held in escrow since the merger.

~~ITEM~~PSC ~~1A. Risk Factors~~Patent

~~You~~The ~~should~~Company ~~carefully~~owns ~~consider~~U.S. Patent No. 6,306,248 (the ~~following~~“PSC ~~risk~~Patent”), ~~factors~~which ~~and~~is ~~other~~the ~~information~~underlying ~~contained~~technology inupon ~~this~~which ~~annual~~the ~~report~~BRP Patent is based. The Company acquired the PSC Patent on ~~Form~~October ~~10-K~~22, ~~when~~2008, ~~evaluating~~pursuant ~~our~~to ~~business~~a Patent Purchase Agreement with World Waste Technologies, Inc. (“WWT”). The Patent is the basis for the pressurized steam classification technology that cleans and ~~financial~~separates ~~condition~~MSW into its component parts, which we refer to as the PSC technology. ~~Additional~~The ~~risks~~PSC Patent expired in November 2017. Pursuant to a Master License Agreement with Bio-Products that the Company acquired in connection with the acquisition of the PSC Patent (the “Bio-Products License Agreement”), Bio-Products was the exclusive licensee of the PSC technology (but not ~~presently~~the ~~known~~Biomass Recovery Process), although pursuant to usa settlement agreement with Bio-Products in March 2009, the Company has the right to use the Biomass Recovery Process worldwide, for any product and ~~risks~~with no royalty due to Bio-Products. On September 22, 2010, the Company sent a Notice of Breach to the licensee of our PSC Patent. We received a response from the licensee on November 5, 2010. In February 2011, we became aware that the licensee affected a transfer of the license in violation of the Bio-Products License Agreement. As a result, on March 21, 2011, we ~~currently~~sent ~~deem~~a ~~immaterial~~notice ~~may~~of ~~also~~termination ~~impair~~to the licensee and the transferee terminating the Bio-Products License Agreement. On June 16, 2011, Steve Vande Vegte, a shareholder of the parent of Bio-Products, filed a lawsuit against various individuals and companies, including the Company. The only Cause of Action against the Company was for Declaratory Relief seeking to void our ~~business~~March ~~operations~~2011 termination of the license to which Mr. Vande Vegte is not a party. On August 5, 2011, the Company filed a demurrer requesting that the court dismiss the case on the grounds that Mr. Vande Vegte lacks standing to pursue a claim concerning the license and ~~prospects~~that the claim raised in the complaint is not ripe. On December 8, 2011, the demurrer to dismiss the Company was granted. In October 2011, a Cross-Complaint was filed by Clean Conversion Technologies, Inc. (“CCT”) and Michael Failla against the Company. CCT was seeking to void the Company’s termination of the Bio-Products License Agreement. This case was voluntarily dismissed per the filing with the court in February 2014. Additionally, CCT filed suit against the Company and Steve Vande Vegte alleging anti-trust violations. This case was voluntarily dismissed per the filing with the court in August 2013.

~~Risks Related to Our Business~~Employees

WeThe ~~need~~Company tocurrently ~~obtain~~has ~~significant~~one ~~additional~~full-time ~~capital~~employee, toits ~~fund~~Chief ~~our~~Executive ~~current~~Officer and ~~planned~~Interim ~~operations~~Chief Financial Officer, Edward P. Hennessey, Jr., and ~~complete~~two ~~the~~part-time ~~implementation~~employees, ofits ~~our~~Chief Technology Officer, David Fenton and its VP-Business Development, Scott Fenton. Both David and Scott Fenton are continuing their engineering consulting business, ~~plan~~Fenton Engineering International, on a full-time basis and ~~the~~are ~~failure~~available to ~~secure~~the ~~additional~~Company ~~capital~~as ~~will~~needed. ~~prevent~~Neither usDavid nor Scott Fenton receive a salary from ~~commercializing~~the ~~our~~Company, ~~technology~~but ~~and~~they ~~executing~~are ~~our~~eligible ~~plan~~for ofstock ~~operation~~awards.

We have a history of losses and working capital deficits. We do not currently have enough cash or other liquid assets to fund our proposed business operations, although to date we have been able to fund our basic corporate obligations. If we are not able to obtain additional financing in the immediate future, we will be required to further delay our development until such financing becomes available and may be required to cease operations. In order to fund the development of our business plan, we will be required to identify and execute upon some form of outside funding, such as to:11

●Table ~~obtain~~of ~~additional debt or equity financing,~~Contents

●Access ~~secure~~to ~~significant~~SEC ~~government grants, and/or~~Filings

●We ~~enter~~electronically ~~into~~file aour ~~strategic~~annual ~~alliance~~report ~~with~~on aForm 10-K, quarterly ~~larger~~reports ~~energy~~on orForm 10-Q, current ~~chemical~~reports ~~company~~on Form 8-K and all amendments to ~~provide~~those ~~funding~~reports with the Securities and Exchange Commission (SEC). The public may read and copy any of the reports that are filed with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at (800)-SEC-0330. The SEC maintains an Internet site at www.sec.gov that contains reports, proxy and information statements and other information regarding issuers that file electronically.

~~The~~Interested ~~amount~~readers ofcan ~~funding~~access, ~~needed~~free toof ~~complete~~charge, ~~the~~all ~~development and implementation~~ of our ~~business~~filings ~~plan~~with ~~will~~the beSEC ~~very substantial~~ and ~~may~~any beamendments into ~~excess~~those ofreports ~~the~~filed ~~amount~~or offurnished ~~funding~~pursuant ~~we may be able~~ to ~~obtain.~~Section We13(a) ~~are~~or ~~continuing~~15(d) toof ~~attempt to identify~~ the ~~sources~~Securities ~~for~~Exchange ~~additional~~Act ~~financing that we will require, but currently do not have binding commitments from any third parties to provide this financing. Our ability to obtain additional funding will be subject to a number~~ of ~~factors~~1934, ~~including~~as ~~market conditions~~amended, ~~acceptance~~through ofthe ~~our~~About ~~business~~Us/Investor ~~plan,~~Relations/SEC ~~the~~Filings ~~quality~~section of our ~~biomass~~website ~~and~~at ~~investor sentiment~~www.cleantechbiofuels.net ~~These~~as ~~factors~~soon ~~may~~as ~~make~~reasonably ~~the~~practicable ~~timing,~~after ~~amount,~~we ~~terms~~electronically ~~and~~file ~~conditions~~such ofmaterials ~~additional funding unattractive. For these reasons sufficient funding~~with, ~~whether~~or onfurnish ~~terms~~them ~~acceptable~~ to ~~us or not~~, ~~may~~the ~~not be available~~SEC. IfWe wewill ~~are~~also ~~unable~~provide toa ~~obtain~~copy ~~sufficient~~of ~~financing~~these ~~on a timely basis~~documents, ~~the~~free ~~development~~ of ~~our technology~~charge, ~~facilities~~to ~~and/or~~any ~~products~~stockholder ~~will~~upon bewritten ~~further~~request ~~delayed~~addressed ~~and we could be forced~~ to: ~~limit~~CleanTech orBiofuels, ~~terminate our operations altogether~~Inc. ~~Further~~, ~~any~~7386 ~~additional~~Pershing ~~funding~~Ave, ~~that~~University weCity, ~~obtain~~MO ~~in the form of equity will reduce the percentage ownership held by our existing stockholders~~63130.

WeITEM ~~have~~1A. noRisk ~~operating experience and may not be able to implement our business plan.~~Factors

AsYou ashould ~~company~~carefully inconsider the ~~development~~following ~~stage,~~risk ~~there~~factors ~~is no material operating history upon which to evaluate our business~~ and ~~prospects.~~other Weinformation docontained ~~not~~in ~~expect~~this toannual ~~commence~~report ~~any~~on ~~significant~~Form ~~operations~~10-K ~~until~~when weevaluating ~~test~~our ~~and~~business ~~refine information from a commercial plant for biomass production~~ and~~/or~~ ~~develop~~financial ~~or license an operating facility~~condition. AsAdditional arisks ~~result,~~not wepresently ~~expect~~known to ~~sustain~~us ~~losses~~and ~~without~~risks ~~corresponding revenues, which could result in the Company incurring a net operating loss~~ that ~~will increase continuously for the foreseeable future. We cannot provide any assurance that~~ we ~~will~~currently bedeem ~~profitable~~immaterial inmay ~~any~~also ~~given~~impair ~~period~~our orbusiness atoperations ~~all~~and prospects.

12Risks Related to Our Business

InWe ~~addition,~~need weto ~~currently~~obtain ~~have~~significant ~~only~~additional ~~one~~capital ~~full-time~~to ~~employee,~~fund our ~~Chief~~current ~~Executive~~and ~~Officer~~planned ~~who~~operations isand ~~acting~~complete as the ~~Company’s~~implementation ~~Interim~~of ~~Chief Financial Officer, who spends at least 40 hours a week on~~ our business. ~~Collectively~~plan, heand ~~has~~the ~~less~~failure ~~experience~~to insecure ~~operating~~additional ancapital ~~alternative~~will ~~energy~~prevent ~~company~~us ~~compared~~from tocommercializing ~~many of~~ our ~~competitors.~~technology ~~Moreover, given the rapid changes in the industry, we face challenges in planning~~ and ~~forecasting~~executing ~~accurately. Our lack of expertise and resources may have a negative impact on~~ our ~~ability~~plan ~~to implement our strategic plans, which may result in our inability to commence meaningful operations, achieve profitable operations or otherwise succeed in other aspects~~ of ~~our business plan~~operation.

~~Our~~We ~~financial~~have ~~statements~~a ~~reflect~~history aof ~~“going~~losses ~~concern”~~and ~~qualification~~working capital deficits. We do not currently have enough cash or other liquid assets to fund our proposed business operations, although to date we have been able to fund our basic corporate obligations. If we are not able to obtain additional financing in the immediate future, we will be required to further delay our development until such financing becomes available and may be required to cease operations. In order to fund the development of our business plan, we will be required to identify and execute upon some form of outside funding, such as to:

~~Because~~● ofobtain ~~our~~additional ~~lack~~debt ofor ~~revenues,~~equity ~~lack of working capital, and lack of any assured~~ financing ~~sources~~, our financial statements raise doubt about our ability to continue as a going concern because of our financial condition, and substantial losses. The opinion of our auditors for the year ended December 31, 2016 expressed a qualification about our ability to continue as a going concern. This condition has continued since those financial statements, and we expect that these conditions will continue for the foreseeable future unless we are able to raise a substantial amount of additional financing. In view of the matters described, our ability to continue to pursue our plan of operations as described herein is dependent upon our ability to raise the capital necessary to meet our financial requirements on a continuing basis.

~~Our~~● ~~Biomass~~secure ~~Recovery~~significant ~~Process~~government ~~technology~~grants, ~~may have design~~ and ~~engineering issues that may increase the costs of using the technology.~~/or

~~The~~● ~~Biomass~~enter ~~Recovery~~into ~~Process~~a ~~technology~~strategic ~~involves~~alliance ~~the~~with ~~use of~~ a ~~rotating~~larger ~~pressure~~energy ~~vessel,~~ or ~~autoclave,~~chemical tocompany ~~combine heat, pressure and agitation~~ to ~~convert~~provide ~~MSW into biomass~~funding. Although technologies that involve the separation and processing of MSW using large-scale autoclaves have not been widely adapted in commercial applications, two vessels using this process are currently operating in Australia. We have completed a small scale research and testing vessel that initially processed MSW for testing purposes.

~~Although~~The weamount ~~believe~~of funding needed to complete the ~~autoclaves~~development and implementation of our business plan will ~~operate~~be ~~properly~~very onsubstantial aand ~~commercial~~may ~~scale,~~be in excess of the amount of funding we may ~~encounter~~be ~~design~~able ~~and~~to ~~engineering~~obtain. ~~problems~~We ~~when~~are continuing to attempt to identify the sources for additional financing that we ~~try~~will require, but currently do not have binding commitments from any third parties to ~~implement~~provide this ~~technology~~financing. onOur ability to obtain additional funding will be subject to a ~~large-scale~~number ~~for~~of factors, including market conditions, acceptance of our business plan, the quality of our biomass and ~~energy~~investor ~~production~~sentiment. ~~Any~~These ~~design~~factors may make the timing, ~~engineering~~amount, orterms ~~other~~and ~~issue~~conditions of additional funding unattractive. For these reasons sufficient funding, whether on terms acceptable to us or not, may ~~cause~~not ~~delays~~be available. If we are unable to obtain sufficient financing on a timely basis, ~~increase~~the ~~production~~development of our technology, facilities and/or ~~development~~products ~~costs~~will be further delayed and ~~require~~we uscould be forced to ~~shut~~limit ~~down~~or terminate our ~~operation~~operations altogether. Further, any additional funding that we obtain in the form of equity will reduce the percentage ownership held by our existing stockholders.

We ~~may not~~ have ~~sufficient~~no ~~legal~~operating ~~protection~~experience ~~of our technologies~~ and ~~other~~may ~~proprietary~~not ~~rights,~~be ~~which~~able ~~could~~to ~~result~~implement ~~in the loss of some or all of~~ our ~~rights~~business ~~or the use of our intellectual properties by our competitors~~plan.

~~Our~~As ~~success~~a ~~depends~~company ~~substantially~~in onthe ~~our~~development ~~ability~~stage, tothere ~~use~~is ~~our~~no ~~owned~~material ~~and/or~~operating ~~licensed~~history ~~technologies~~upon ~~and~~which to ~~keep~~evaluate our ~~licenses~~business ~~in full force,~~ and ~~for us and our technology licensor to maintain our patents, maintain trade secrecy and not infringe the proprietary rights of third parties~~prospects. ~~There~~We ~~can~~do ~~be no assurance that the patents of others will~~ not ~~have~~expect anto ~~adverse~~commence ~~effect~~any onsignificant ~~our~~operations ~~ability~~until towe ~~conduct~~test ~~our~~and ~~business.~~refine ~~Further,~~information wefrom ~~cannot~~a becommercial ~~sure~~plant ~~that~~for ~~others~~biomass ~~will~~production ~~not~~and/or ~~independently~~ develop ~~similar~~ or ~~superior~~license ~~technologies,~~an ~~duplicate~~operating ~~elements of our technologies or design around them~~facility. ~~Even~~As ifa result, we ~~are~~expect ~~able~~ to ~~obtain~~sustain orlosses ~~license~~without ~~patent~~corresponding ~~protection for our process or products~~revenues, ~~there~~which iscould noresult ~~guarantee~~in ~~that~~ the ~~coverage~~Company ofincurring ~~these~~a ~~patents~~net ~~will~~operating beloss ~~sufficiently broad to protect us from competitors or~~ that we will beincrease ~~able~~continuously tofor ~~enforce~~the ~~our~~foreseeable ~~patents against potential infringers~~future. ~~Patent~~We ~~litigation~~cannot isprovide ~~expensive,~~any ~~and~~assurance that we ~~may~~will ~~not~~ be ~~able~~profitable toin ~~afford~~any ~~the~~given ~~costs.~~period ~~Third parties could also assert that our process~~ or ~~products~~at ~~infringe patents or other proprietary rights held by them~~all.

We also rely on trade secrets, proprietary know-how and technology that we will seek to protect, in part, by confidentiality agreements with our prospective joint venture partners, employees and consultants. There can be no assurance that these agreements will not be breached, that we will have adequate remedies for any breach, or that our trade secrets and proprietary know-how will not otherwise become known or be independently discovered by others.12

13Table of Contents

WeIn ~~will~~addition, bewe ~~dependent~~currently have only one full-time employee, our Chief Executive Officer who is acting as the Company’s Interim Chief Financial Officer, who spends at least 40 hours a week on our ~~ability~~business. Collectively, he has less experience in operating an alternative energy company compared to ~~negotiate~~many ~~favorable~~of ~~feedstock~~our ~~supply~~competitors. Moreover, given the rapid changes in the industry, we face challenges in planning and ~~biomass~~forecasting ~~off-take~~accurately. ~~agreements~~Our lack of expertise and resources may have a negative impact on our ability to implement our strategic plans, which may result in our inability to commence meaningful operations, achieve profitable operations or otherwise succeed in other aspects of our business plan.

InOur ~~addition~~consolidated tofinancial ~~proving~~statements ~~and~~reflect commercializing our technology, the viability of our business plan will depend on our ability to develop long-term supply relationships with municipalities, municipal waste haulers, MRF operators, and/or landfills to provide us with the necessary waste streams on a ~~long-term~~“going ~~basis.~~concern” ~~We also will depend on these haulers, operators and facilities to take residual waste streams from our plants and to deliver or accept these streams for land filling~~qualification. Additionally, we will need to develop off-take agreements with conversion technology companies and/or energy companies for the consumption of our biomass. We currently have no such relationships or agreements and there can be no assurance that we will be able to enter into any such relationships or agreements. If we are unable to create these relationships and receive supply agreements and/or off-take agreements on terms favorable to us, we may not be able to implement our business plan and achieve profitability.

WeBecause ~~may~~of ~~not~~our belack ~~able~~of revenues, lack of working capital, and lack of any assured financing sources, our consolidated financial statements raise doubt about our ability to ~~attract~~continue as a going concern because of our financial condition, and ~~retain~~substantial ~~management~~losses. The opinion of our auditors for the year ended December 31, 2017 expressed a qualification about our ability to continue as a going concern. This condition has continued since those consolidated financial statements, and ~~other~~we ~~personnel~~expect that these conditions will continue for the foreseeable future unless we ~~need~~are able to ~~succeed~~raise a substantial amount of additional financing. In view of the matters described, our ability to continue to pursue our plan of operations as described herein is dependent upon our ability to raise the capital necessary to meet our financial requirements on a continuing basis.

WeOur ~~currently~~Biomass ~~have~~Recovery ~~one~~Process ~~full-time~~technology ~~employee,~~may ~~our~~have ~~Chief~~design Executive Officer who is also the Company’s Interim Chief Financial Officer. If we are able to implement our business plan, part of our success is expected to depend on our ability to recruit senior management and ~~other~~engineering ~~key~~issues ~~technology development, construction and operations employees. Especially given our lack of financial resources, we cannot be certain~~ that wemay ~~will~~increase be able to attract, retain and motivate such employees. The inability to hire and retain one or more of these employees could cause delays or prevent us from implementing our business strategy. The majority of our new hires could be engineers, project managers and operations personnel. There is intense competition from other companies and research and academic institutions for qualified personnel in the ~~areas~~costs of ~~our~~using ~~activities. If we cannot attract and retain, on acceptable terms,~~ the ~~qualified personnel necessary for the development of our business, we may not be able to commence operations or grow at an acceptable pace~~technology.

WeThe ~~incur~~Biomass ~~significant~~Recovery ~~costs~~Process astechnology involves the use of a ~~result~~rotating pressure vessel, or autoclave, to combine heat, pressure and agitation to convert MSW into biomass. Although technologies that involve the separation and processing of ~~being~~MSW using large-scale autoclaves have not been widely adapted in commercial applications, two vessels using this process are currently operating in Australia. We have completed a ~~public~~small-scale ~~company~~research and testing vessel that initially processed MSW for testing purposes.

AsAlthough ~~a public company,~~ we ~~are~~believe incurring significant legal, accounting and other expenses and our corporate governance and financial reporting activities are more time-consuming. These costs and obligations divert resources from developing and furthering our business plan and operations. The Sarbanes-Oxley Act of 2002, as well as rules subsequently implemented by the ~~Securities~~autoclaves ~~and~~will ~~Exchange~~operate ~~Commission,~~properly ~~has~~on ~~required changes in corporate governance practices of public companies. For example, as~~ a ~~public~~commercial ~~company~~scale, we ~~are~~may ~~required~~encounter todesign ~~adopt policies regarding internal controls~~ and ~~disclosure~~engineering ~~controls~~problems ~~and~~when ~~procedures. In addition,~~ we ~~are~~try ~~incurring~~to ~~additional~~implement ~~costs~~this ~~associated~~technology ~~with~~on ~~our~~a ~~public~~large-scale ~~company~~for ~~reporting~~biomass ~~requirements. These rules~~ and ~~regulations~~energy ~~could~~production. ~~make~~Any itdesign, ~~more~~engineering ~~difficult~~or ~~and~~other ~~more~~issue ~~expensive for us to obtain director and officer liability insurance and we~~ may because ~~required~~delays, toincrease ~~accept~~production ~~reduced policy limits~~ and ~~coverage~~development ~~or incur substantially higher~~ costs toand ~~obtain~~require ~~the same or similar coverage. As a result, it may be more difficult for~~ us to ~~attract~~shut ~~and~~down ~~retain qualified persons to serve on~~ our ~~board of directors or as executive officers~~operation.

~~The~~We ~~Company~~may ~~has~~not ~~incurred~~have ~~significant~~sufficient ~~indebtedness~~legal protection of our technologies and ~~has~~other ~~various~~proprietary ~~obligations~~rights, towhich ~~satisfy~~could result in the loss of some or ~~repay~~all ~~that~~of ~~indebtedness~~our rights or the use of our intellectual properties by our competitors.

~~The~~Our ~~Company~~success ~~has~~depends ~~issued~~substantially ~~various~~on ~~forms~~our ofability ~~debt~~to ~~instruments~~use toour ~~raise~~owned ~~capital~~and/or licensed technologies and ~~certain~~to ofkeep ~~these~~our ~~obligations~~licenses ~~have~~in ~~matured~~full force, and ~~are~~for ~~due.~~us ~~The~~and ~~Company~~our ~~has~~technology ~~obligations~~licensor to ~~repay~~maintain orour ~~otherwise~~patents, ~~satisfy~~maintain ~~its~~trade ~~debt~~secrecy ~~obligations.~~and ~~This~~not ~~indebtedness~~infringe ~~could limit~~ the ~~Company’s~~proprietary ~~ability~~rights toof ~~incur~~third ~~additional~~parties. ~~indebtedness~~There ~~for~~can ~~capital~~be ~~raising~~no ~~purposes,~~assurance ~~securing~~that athe ~~line~~patents of ~~credit,~~others orwill ~~otherwise.~~not Ahave ~~significant~~an ~~portion~~adverse ofeffect ~~the~~on ~~Company’s~~our ~~resources~~ability ~~may~~to ~~need~~conduct toour business. Further, we cannot be ~~dedicated~~sure tothat ~~the~~others ~~repayment~~will ofnot ~~such~~independently ~~indebtedness~~develop ~~which~~similar ~~would~~or ~~reduce~~superior ~~the~~technologies, ~~amount~~duplicate elements of ~~funds~~our ~~available~~technologies ~~for~~or ~~other~~design ~~corporate~~around ~~purposes~~them. ~~The~~Even ~~Company’s~~if ~~ability~~we are able to ~~meet~~obtain ~~its~~or ~~expected~~license ~~debt~~patent ~~obligations~~protection ~~and~~for ~~reduce~~our ~~its~~process ~~indebtedness~~or products, there is no guarantee that the coverage of these patents will be ~~dependent~~sufficiently ~~upon~~broad ~~the~~to ~~Company’s~~protect ~~future~~us ~~performance,~~from ~~which~~competitors or that we will be ~~subject~~able to ~~the~~enforce ~~success~~our ofpatents ~~its~~against ~~business~~potential ~~strategy,~~infringers. ~~general~~Patent ~~economic~~litigation ~~conditions~~is expensive, and ~~other~~we ~~factors~~may ~~affecting~~not be able to afford the ~~Company’s~~costs. ~~operations,~~Third ~~many~~parties ofcould ~~which~~also ~~are~~assert ~~beyond~~that ~~the~~our ~~Company’s~~process ~~control~~or products infringe patents or other proprietary rights held by them.

~~Our~~We ~~senior~~also ~~management’s~~rely ~~limited~~on ~~experience~~trade ~~managing~~secrets, aproprietary ~~publicly~~know-how ~~traded~~and ~~company~~technology ~~diverts~~that ~~management’s~~we ~~attention~~will ~~from~~seek ~~operations~~to protect, in part, by confidentiality agreements with our prospective joint venture partners, employees and ~~could~~consultants. ~~harm~~There can be no assurance that these agreements will not be breached, that we will have adequate remedies for any breach, or that our ~~business~~trade secrets and proprietary know-how will not otherwise become known or be independently discovered by others.

Our management team has limited experience managing a publicly traded company and complying with federal securities laws, including compliance with disclosure requirements on a timely basis. Our management is required to design and implement appropriate programs and policies in response to increased legal, regulatory compliance and reporting requirements, and any failure to do so could lead to the imposition of fines and penalties and harm our business.13

14Table of Contents

~~Our~~We ~~failure~~will tobe ~~adequately~~dependent ~~adhere~~on toour ~~the~~ability ~~established~~to ~~corporate~~negotiate ~~governance~~favorable ~~practices~~feedstock orsupply ~~the failure or circumvention of our controls~~ and ~~procedures~~biomass ~~could~~off-take ~~seriously harm our business~~agreements.

~~Compliance~~In ~~with~~addition to proving and commercializing our technology, the ~~evolving~~viability ~~corporate~~of ~~governance~~our ~~practices~~business ~~takes~~plan awill ~~significant~~depend ~~amount~~on ofour ~~management~~ability ~~time~~to ~~and~~develop ~~attention,~~long-term ~~particularly~~supply relationships with ~~regard~~municipalities, tomunicipal ~~disclosure~~waste ~~controls~~haulers, ~~and~~MRF ~~procedures~~operators, and/or ~~internal~~landfills ~~control~~to ~~over~~provide ~~financial~~us ~~reporting.~~with ~~Although~~the wenecessary ~~have~~waste ~~reviewed~~streams ~~our~~on ~~disclosure~~a ~~and~~long-term ~~internal~~basis. ~~controls~~We ~~and~~also ~~procedures~~will independ ~~order~~on these haulers, operators and facilities to ~~determine~~take ~~whether~~residual ~~they~~waste ~~are~~streams ~~effective,~~from our ~~controls~~plants and ~~procedures~~to ~~may~~deliver ~~not~~or beaccept ~~able~~these tostreams ~~prevent~~for ~~errors~~land orfilling. ~~frauds~~Additionally, inwe ~~the~~will ~~future.~~need ~~Faulty~~to ~~judgments,~~develop ~~simple~~off-take ~~errors~~agreements orwith ~~mistakes,~~conversion technology companies and/or energy companies for the ~~failure~~consumption of our ~~personnel~~biomass. toWe ~~adhere~~currently tohave ~~established~~no ~~controls~~such relationships or agreements and ~~procedures~~there ~~may~~can ~~make~~be itno ~~difficult~~assurance ~~for~~that uswe will be able to ~~ensure~~enter ~~that~~into ~~the~~any ~~objectives~~such ofrelationships ~~the~~or ~~control~~agreements. ~~system~~If we are ~~met.~~unable Ato ~~failure~~create ofthese ~~our~~relationships ~~controls~~and receive supply agreements and/or ~~procedures~~off-take toagreements ~~detect~~on ~~other~~terms ~~than~~favorable ~~inconsequential~~to ~~errors~~us, orwe ~~fraud~~may ~~could~~not ~~seriously~~be ~~harm~~able to implement our business plan and ~~results~~achieve ~~of operations~~profitability.

~~Risks~~We ~~Related~~may not be able to ~~our~~attract ~~Industry~~and retain management and other personnel we need to succeed.

AsWe acurrently ~~small~~have ~~company~~one ~~with~~full-time ~~minimal~~employee, ~~financial~~our ~~resources,~~Chief Executive Officer who is also the Company’s Interim Chief Financial Officer. If we are atable ato ~~competitive~~implement ~~disadvantage~~our business plan, part of our success is expected to depend on our ~~competitors,~~ability ~~which~~to ~~include~~recruit ~~larger~~senior management and other key technology development, ~~established~~construction ~~companies~~and ~~that~~operations ~~have~~employees. ~~substantially~~Especially ~~greater~~given our lack of financial, ~~technical~~resources, ~~manufacturing~~we cannot be certain that we will be able to attract, ~~marketing~~retain and motivate such employees. The inability to hire and retain one or more of these employees could cause delays or prevent us from implementing our business strategy. The majority of our new hires could be engineers, ~~distribution~~project managers and operations personnel. There is intense competition from other ~~resources~~companies ~~than~~and usresearch and academic institutions for qualified personnel in the areas of our activities. If we cannot attract and retain, on acceptable terms, the qualified personnel necessary for the development of our business, we may not be able to commence operations or grow at an acceptable pace.

~~The~~We ~~alternative~~incur ~~energy~~significant ~~and~~costs ~~waste hauling/landfill industries in the United States are highly competitive and continually evolving~~ as ~~participants~~a ~~strive~~result ~~to distinguish themselves. Competition is likely to continue to increase with the emergence and commercialization~~ of ~~new~~being ~~alternative~~a ~~energy~~public ~~technologies~~company. Even if we are successful in implementing our business plan, we may not be able to compete within these industries. Moreover, the success of alternative energy generation technologies may cause larger, conventional energy companies with substantial financial resources to enter the alternative energy industry. These companies, due to their greater capital resources and substantial technical expertise, may be better positioned to develop and exploit new technologies. Our inability to respond effectively to our competition could result in our inability to commence meaningful operations, achieve profitable operations or otherwise succeed in other aspects of our business plan.

~~Our~~As ~~success~~a public company, we are incurring significant legal, accounting and other expenses and our corporate governance and financial reporting activities are more time-consuming. These costs and obligations divert resources from developing and furthering our business plan and operations. The Sarbanes-Oxley Act of 2002, as well as rules subsequently implemented by the Securities and Exchange Commission, has required changes in corporate governance practices of public companies. For example, as a public company, we are required to adopt policies regarding internal controls and disclosure controls and procedures. In addition, we are incurring additional costs associated with our public company reporting requirements. These rules and regulations could make it more difficult and more expensive for us to obtain director and officer liability insurance and we may be ~~dependent~~required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified persons to serve on ~~continued~~our ~~high~~board ~~energy~~of ~~prices~~directors or as executive officers.

~~Prices~~The ~~for~~Company ~~energy~~has ~~can~~incurred ~~vary~~significant ~~significantly~~indebtedness ~~over time~~ and ~~decreases~~has invarious ~~price~~obligations ~~levels could adversely affect our profitability and viability. Worldwide energy prices are subject~~ to asatisfy ~~myriad~~or ofrepay ~~factors~~that ~~almost all of which are completely beyond our ability to control~~indebtedness. Frequently, unforeseen events can have a dramatic impact on the price paid for energy. If the prices for more traditional sources of energy remain relatively low, such a pricing environment could cause our business model to be unviable and our technology worthless.

~~Waste~~The ~~processing~~Company ~~and~~has ~~energy~~issued ~~production~~various isforms ~~subject~~of debt instruments to ~~inherent~~raise ~~operational~~capital ~~accidents~~and certain of these obligations have matured and ~~disasters~~are ~~from~~due. ~~which~~The weCompany has obligations to repay or otherwise satisfy its debt obligations. This indebtedness could limit the Company’s ability to incur additional indebtedness for capital raising purposes, securing a line of credit, or otherwise. A significant portion of the Company’s resources may ~~not~~need to be ~~able~~dedicated to ~~recover~~the repayment of such indebtedness which would reduce the amount of funds available for other corporate purposes. The Company’s ability to meet its expected debt obligations and reduce its indebtedness will be dependent upon the Company’s future performance, ~~especially~~which ifwill webe ~~have~~subject ~~only~~to ~~one~~the orsuccess aof ~~very~~its ~~small~~business ~~number~~strategy, general economic conditions, and other factors affecting the Company’s operations, many of ~~facilities~~which are beyond the Company’s control.

Our ~~anticipated~~senior ~~operations~~management’s ~~would~~limited ~~be subject to significant interruption if any of our potential facilities~~ experience managing a ~~major~~publicly ~~accident~~traded orcompany ~~are~~diverts ~~damaged~~management’s byattention ~~severe~~from weather or other natural disasters. In particular, processing waste and producing energy products is subject to various inherent operational hazards, such as equipment failures, fires, explosions, abnormal pressures, blowouts, transportation accidents and natural disasters. Some of these operational hazards may cause personal injury or loss of life, severe damage to or destruction of property and equipment or environmental damage, and may result in suspension of operations and ~~the~~could ~~imposition~~harm ~~of civil or criminal penalties. Currently we do not have any insurance to cover those risks. We intend to seek insurance appropriate for~~ our business ~~before we commence significant operations~~. ~~The insurance that we plan to obtain, if obtained, may not be adequate to cover fully the potential operational hazards described above.~~

~~Alternative~~Our ~~technologies~~management team has limited experience managing a publicly traded company and complying with federal securities laws, including compliance with disclosure requirements on a timely basis. Our management is required to design and implement appropriate programs and policies in response to increased legal, regulatory compliance and reporting requirements, and any failure to do so could ~~make~~lead to the imposition of fines and penalties and harm our business ~~obsolete~~.

Even if our technology proves to be commercially feasible, there is extensive research and development being conducted in alternative energy sources. Technological developments in any of a large number of competing processes and technologies could make our technology obsolete and we have little ability to manage that risk.14

15Table of Contents

~~Risks~~Our ~~Related~~failure to ~~Government~~adequately ~~Regulation~~adhere to the established corporate governance practices or the failure or circumvention of our controls and procedures could seriously harm our business.

~~Enforcement~~Compliance with the evolving corporate governance practices takes a significant amount of ~~energy~~management ~~policy~~time ~~regulations~~and attention, particularly with regard to disclosure controls and procedures and internal control over financial reporting. Although we have reviewed our disclosure and internal controls and procedures in order to determine whether they are effective, our controls and procedures may not be able to prevent errors or frauds in the future. Faulty judgments, simple errors or mistakes, or the failure of our personnel to adhere to established controls and procedures may make it difficult for us to ensure that the objectives of the control system are met. A failure of our controls and procedures to detect other than inconsequential errors or fraud could ~~change~~seriously harm our business and results of operations.

~~Energy~~Risks ~~policy~~Related ~~in the United States is subject~~ to ongoing change. Over the last few decades, the United States Congress has passed separate major pieces of legislation addressing energy policy and related regulations. We anticipate that energy policy will continue to be a very important legislative priority on a national, state and local level. As energy policy continues to evolve, the existing rules and regulations that benefit our industry may change. It is difficult, if not impossible, to predict changes in energy policy that could occur on a federal, state or local level in the future. The elimination of or a change in any of the current rules and regulations could create a regulatory environment that prevents us from developing a commercially viable or profitable business.Industry

~~Costs~~As ofa ~~compliance~~small ~~may~~company ~~increase~~ with ~~changing~~minimal ~~environmental~~financial resources, we are at a competitive disadvantage to our competitors, which include larger, established companies that have substantially greater financial, technical, manufacturing, marketing, distribution and ~~operational~~other ~~safety~~resources ~~regulations~~than us.

AsThe wealternative ~~implement~~energy ~~our~~and ~~business~~waste ~~plan,~~hauling/landfill weindustries ~~will~~in ~~become~~the ~~subject~~United toStates ~~various~~are ~~federal,~~highly ~~state~~competitive and ~~local~~continually ~~environmental~~evolving ~~laws~~as ~~and~~participants ~~regulations,~~strive ~~including~~to ~~those~~distinguish ~~relating~~themselves. toCompetition ~~the~~is ~~discharge~~likely ofto ~~materials~~continue ~~into~~to ~~the~~increase ~~air,~~with ~~water~~the emergence and ~~ground,~~commercialization ~~the~~of ~~generation,~~new ~~storage,~~alternative ~~handling,~~energy ~~use,~~technologies. ~~transportation~~Even ~~and~~if ~~disposal~~we ofare ~~hazardous~~successful ~~materials~~in implementing our business plan, ~~and~~we ~~the~~may ~~health~~not ~~and~~be ~~safety~~able ofto ~~our~~compete ~~employees.~~within Inthese ~~addition~~industries. Moreover, ~~some~~the success of ~~these~~alternative ~~laws~~energy ~~and~~generation ~~regulations~~technologies ~~require~~may ~~our~~cause ~~contemplated~~larger, ~~facilities~~conventional toenergy ~~operate~~companies ~~under~~with ~~permits~~substantial ~~that~~financial ~~are~~resources ~~subject~~ to ~~renewal~~enter orthe ~~modification~~alternative energy industry. These ~~laws~~companies, ~~regulations~~due ~~and~~to ~~permits~~their ~~can~~greater ~~often~~capital ~~require~~resources ~~expensive~~and ~~pollution~~substantial ~~control~~technical ~~equipment~~expertise, ormay ~~operational~~be ~~changes~~better positioned to ~~limit~~develop ~~actual~~and orexploit ~~potential~~new ~~impacts~~technologies. Our inability to ~~the~~respond ~~environment.~~effectively Ato ~~violation~~our ofcompetition ~~these~~could ~~laws~~result ~~and~~in ~~regulations~~our orinability ~~permit~~to ~~conditions~~commence ~~can~~meaningful ~~result~~operations, inachieve ~~substantial~~profitable ~~fines,~~operations ~~natural~~or ~~resource~~otherwise ~~damages,~~succeed ~~criminal~~in ~~sanctions,~~other ~~permit~~aspects ~~revocations~~of ~~and/or~~our ~~facility~~business ~~shutdowns~~plan.

~~Furthermore,~~Our wesuccess may become liable for the investigation and cleanup of environmental contamination at any property that we would own or operate and at off-site locations where we may arrange for the disposal of hazardous substances. If these substances have been or are disposed of or released at sites that undergo investigation and/or remediation by regulatory agencies, we may be ~~responsible~~dependent ~~under~~on ~~CERCLA,~~continued orhigh ~~other~~energy ~~environmental laws for all or part of the costs of investigation and/or remediation, and for damages to natural resources~~prices. We may also be subject to related claims by private parties alleging property damage and personal injury due to exposure to hazardous or other materials at or from those properties. Some of these matters may require expending significant amounts for investigation, cleanup, or other costs.

InPrices ~~addition,~~for ~~new~~energy ~~laws,~~can ~~new~~vary ~~interpretations~~significantly ofover ~~existing~~time ~~laws,~~and ~~increased~~decreases ~~governmental~~in ~~enforcement~~price oflevels ~~environmental laws, or other developments~~ could ~~require~~adversely usaffect toour ~~make~~profitability ~~additional~~and ~~significant expenditures~~viability. ~~Continued~~Worldwide ~~government~~energy ~~and~~prices ~~public~~are ~~emphasis~~subject onto ~~environmental~~a ~~issues~~myriad ~~can~~of befactors ~~expected~~almost toall ~~result~~of inwhich ~~increased~~are ~~future~~completely ~~investments~~beyond ~~for~~our ~~environmental~~ability ~~controls~~to atcontrol. ~~any~~Frequently, ~~future~~unforeseen ~~production~~events ~~facility.~~can ~~Present~~have ~~and~~a ~~future~~dramatic ~~environmental~~impact ~~laws~~on ~~and~~the ~~regulations~~price ~~applicable~~paid tofor ~~MSW~~energy. ~~processing~~If ~~and~~the ~~energy~~prices ~~production,~~for more ~~vigorous~~traditional ~~enforcement~~sources ~~policies and discovery~~ of ~~currently~~energy ~~unknown~~remain ~~conditions~~relatively ~~may~~low, ~~require~~such ~~substantial~~a ~~expenditures~~pricing ~~that~~environment could ~~have~~cause aour ~~material~~business ~~adverse~~model ~~effect~~to onbe ~~the~~unviable ~~results~~and of our ~~contemplated~~technology ~~operations and financial position~~worthless.

~~The~~Waste ~~hazards and risks associated with~~ processing ~~MSW~~ and ~~producing and/or transporting various~~ energy orproduction ~~chemical~~is ~~products~~subject ~~(such~~to asinherent ~~fires,~~operational ~~natural~~accidents ~~disasters, explosions,~~ and ~~abnormal~~disasters ~~pressures~~from ~~and~~which ~~blowouts)~~we may ~~also~~not ~~result~~be inable ~~personal injury claims or damage~~ to ~~property~~recover, ~~and~~especially ~~third~~if ~~parties. As protection against operating hazards,~~ we ~~intend~~have toonly ~~maintain~~one ~~insurance coverage against some, but not all, potential losses. We could, however, sustain losses for uninsurable~~ or uninsured risks, or in amounts in excess of existing insurance coverage. Events that result in significant personal injury or damage to our property or third parties or other losses that are not fully covered by insurance could have a ~~material~~very ~~adverse~~small ~~effect~~number ~~on the results~~ of ~~our contemplated operations and financial position~~facilities.

~~Risks~~Our ~~related~~anticipated operations would be subject to significant interruption if any of our ~~Common~~potential ~~Stock~~facilities experience a major accident or are damaged by severe weather or other natural disasters. In particular, processing waste and ~~Stock~~producing ~~Price~~energy ~~Fluctuation~~products is subject to various inherent operational hazards, such as equipment failures, fires, explosions, abnormal pressures, blowouts, transportation accidents and natural disasters. Some of these operational hazards may cause personal injury or loss of life, severe damage to or destruction of property and equipment or environmental damage, and may result in suspension of operations and the imposition of civil or criminal penalties. Currently we do not have any insurance to cover those risks. We intend to seek insurance appropriate for our business before we commence significant operations. The insurance that we plan to obtain, if obtained, may not be adequate to cover fully the potential operational hazards described above.

~~Our~~Alternative ~~stock~~technologies iscould ~~thinly~~make ~~traded,~~our sobusiness ~~you may be unable to sell at or near ask prices or at all~~obsolete.

~~Our~~Even ~~common~~if ~~stock~~our ~~trades~~technology onproves ~~the~~to ~~OTCQB.~~be ~~Shares~~commercially offeasible, ~~our~~there ~~common~~is ~~stock~~extensive ~~are~~research ~~thinly-traded,~~and ~~meaning~~development ~~that~~being ~~the~~conducted ~~number~~in ofalternative ~~persons~~energy ~~interested~~sources. inTechnological ~~purchasing~~developments ~~our~~in ~~common~~any ~~shares~~of ata orlarge ~~near~~number ~~ask~~of ~~prices~~competing atprocesses ~~any~~and ~~given~~technologies ~~time~~could ~~may~~make beour ~~relatively~~technology ~~small~~obsolete orand ~~non-existent.~~we ~~This~~have ~~situation~~little isability ~~attributable~~ to amanage ~~number~~that ~~of factors, including:~~risk.

~~● we are a small company that is relatively unknown to stock analysts, stock brokers, institutional investors and others in the investment community that generate or influence sales volume; and~~15

●Table ~~stock analysts, stock brokers and institutional investors may be risk-averse and be reluctant to follow an unproven, early stage company such as ours or purchase or recommend the purchase~~ of ~~our shares until such time as we became more seasoned and viable.~~Contents

16Risks Related to Government Regulation

AsEnforcement ~~a consequence, our stock price may not reflect an actual or perceived value. Also, there are periods~~ of ~~several~~energy ~~days~~policy orregulations ~~more~~could when trading activity in our shares is minimal or non-existent, as compared to a seasoned issuer that has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on share pricechange. A broader or more active public trading market for our common shares may not develop or if developed, may not be sustained. Due to these conditions, you may not be able to sell your shares at or near ask prices or at all if you need money or otherwise desire to liquidate your shares.

~~Even~~Energy ifpolicy anin ~~active~~the ~~trading~~United ~~market~~States ~~develops~~is subject to ongoing change. Over the last few decades, the ~~market~~United ~~price~~States ~~for~~Congress ~~our~~has ~~common~~passed ~~stock~~separate ~~may~~major bepieces ~~highly~~of ~~volatile~~legislation addressing energy policy and ~~could~~related regulations. We anticipate that energy policy will continue to be ~~subject~~a very important legislative priority on a national, state and local level. As energy policy continues to ~~wide~~evolve, ~~fluctuations~~the existing rules and regulations that benefit our industry may change. It is difficult, if not impossible, to predict changes in energy policy that could occur on a federal, state or local level in the future. The elimination of or a change in any of the current rules and regulations could create a regulatory environment that prevents us from developing a commercially viable or profitable business.

WeCosts ~~believe~~of ~~that~~compliance ~~newer alternative energy companies and companies that effect reverse mergers, such as our company, are particularly susceptible to speculative trading that~~ may ~~not~~increase bewith ~~based~~changing onenvironmental the actual performance of the company, which increases the risk of price volatility in a common stock. In addition, the price of the shares of our common stock could decline significantly if our future operating results fail to meet or exceed the expectations of market analysts and ~~investors.~~operational ~~Some~~safety ~~of the factors that could affect the volatility of our share price include:~~ regulations.

●As ~~significant~~we ~~sales~~implement our business plan, we will become subject to various federal, state and local environmental laws and regulations, including those relating to the discharge of materials into the air, water and ground, the generation, storage, handling, use, transportation and disposal of hazardous materials, and the health and safety of our ~~common~~employees. ~~stock~~In addition, some of these laws and regulations require our contemplated facilities to operate under permits that are subject to renewal or ~~other~~modification. ~~securities~~These inlaws, regulations and permits can often require expensive pollution control equipment or operational changes to limit actual or potential impacts to the ~~open~~environment. ~~market;~~A violation of these laws and regulations or permit conditions can result in substantial fines, natural resource damages, criminal sanctions, permit revocations and/or facility shutdowns.

●Furthermore, ~~speculation~~we inmay become liable for the ~~press~~investigation and cleanup of environmental contamination at any property that we would own or ~~investment~~operate ~~community;~~and at off-site locations where we may arrange for the disposal of hazardous substances. If these substances have been or are disposed of or released at sites that undergo investigation and/or remediation by regulatory agencies, we may be responsible under CERCLA, or other environmental laws for all or part of the costs of investigation and/or remediation, and for damages to natural resources. We may also be subject to related claims by private parties alleging property damage and personal injury due to exposure to hazardous or other materials at or from those properties. Some of these matters may require expending significant amounts for investigation, cleanup, or other costs.

●In ~~actual~~addition, new laws, new interpretations of existing laws, increased governmental enforcement of environmental laws, or ~~anticipated~~other ~~variations~~developments could require us to make additional significant expenditures. Continued government and public emphasis on environmental issues can be expected to result in ~~quarterly~~increased ~~operating~~future investments for environmental controls at any future production facility. Present and future environmental laws and regulations applicable to MSW processing and energy production, more vigorous enforcement policies and discovery of currently unknown conditions may require substantial expenditures that could have a material adverse effect on the results; of our contemplated operations and financial position.

●The ~~changes~~hazards and risks associated with processing MSW and producing and/or transporting various energy or chemical products (such as fires, natural disasters, explosions, and abnormal pressures and blowouts) may also result in ~~earnings~~personal ~~estimates;~~injury claims or damage to property and third parties. As protection against operating hazards, we intend to maintain insurance coverage against some, but not all, potential losses. We could, however, sustain losses for uninsurable or uninsured risks, or in amounts in excess of existing insurance coverage. Events that result in significant personal injury or damage to our property or third parties or other losses that are not fully covered by insurance could have a material adverse effect on the results of our contemplated operations and financial position.

~~● publication (or lack of publication) of research reports about us;~~16

●Table ~~increases in market interest rates, which may increase our cost~~ of ~~capital;~~Contents

●Risks ~~changes~~related into ~~applicable~~our ~~laws~~Common orStock ~~regulations, court rulings~~ and ~~other~~Stock ~~legal~~Price ~~actions;~~Fluctuation

●Our ~~changes~~stock inis ~~market~~thinly ~~valuations~~traded, ofso ~~similar~~you ~~companies;~~may be unable to sell at or near ask prices or at all.

●Our ~~additions~~common stock trades on the OTCQB. Shares of our common stock are thinly-traded, meaning that the number of persons interested in purchasing our common shares at or ~~departures~~near ask prices at any given time may be relatively small or non-existent. This situation is attributable to a number of ~~key~~factors, ~~personnel;~~including:

● ~~actions~~we byare ~~our~~a ~~stockholders~~small company that is relatively unknown to stock analysts, stock brokers, institutional investors and others in the investment community that generate or influence sales volume; and

● ~~general~~stock ~~market~~analysts, stock brokers and ~~economic~~institutional ~~conditions~~investors may be risk-averse and be reluctant to follow an unproven, early stage company such as ours or purchase or recommend the purchase of our shares until such time as we became more seasoned and viable.

~~Trading~~Consequently, our stock price may not reflect an actual or perceived value. Also, there are periods of several days or more when trading activity in our ~~common~~shares ~~stock~~ is ~~subject~~minimal or non-existent, as compared to ~~special~~a ~~sales~~seasoned ~~practices~~issuer that has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on share price. A broader or more active public trading market for our common shares may not develop or if developed, may not be ~~difficult~~sustained. Due to these conditions, you may not be able to sell your shares at or near ask prices or at all if you need money or otherwise desire to liquidate your shares.

~~Our~~Even ~~common~~if stock is subject to the Securities and Exchange Commission’s “penny stock” rule, which imposes special sales practice requirements upon broker-dealers who sell such securities to persons other than established customers or accredited investors. Penny stocks are generally defined to be an ~~equity~~active ~~security~~trading ~~that has a~~ market ~~price of less than $5.00 per share. For purposes of the rule~~develops, the ~~phrase~~market ~~“accredited~~price investors” means, in general terms, institutions with assets in excess of $5,000,000, or individuals having a net worth or a joint net worth with the person’s spouse, in excess of $1,000,000 or having an annual income that exceeds $200,000 (or that, when combined with a spouse’s income, exceeds $300,000). For transactions covered by the rule, the broker-dealer must make a special suitability determination for ~~the~~our ~~purchaser~~common ~~and~~stock ~~receive the purchaser’s written agreement to the transaction prior to the sale. Consequently, the rule~~ may ~~affect~~be ~~the~~highly ~~ability~~volatile ~~of broker-dealers to sell our securities~~ and ~~also~~could ~~may~~be ~~affect~~subject ~~the ability of our shareholders in this offering~~ to ~~sell~~wide ~~their securities in any market that might develop~~fluctuations.

17We believe that newer alternative energy companies and companies that effect reverse mergers, such as our company, are particularly susceptible to speculative trading that may not be based on the actual performance of the company, which increases the risk of price volatility in a common stock. In addition, the price of the shares of our common stock could decline significantly if our future operating results fail to meet or exceed the expectations of market analysts and investors. Some of the factors that could affect the volatility of our share price include:

~~Stockholders~~● ~~should~~significant besales ~~aware~~of ~~that,~~our ~~according~~common tostock ~~Securities~~or ~~and~~other ~~Exchange~~securities ~~Commission~~in ~~Release No. 34-29093,~~ the ~~market~~open ~~for penny stocks has suffered from patterns of fraud and abuse. Such patterns include:~~market;

● ~~control~~speculation ofin the ~~market~~press ~~for the security by one~~ or ainvestment ~~few broker-dealers that are often related to the promoter or issuer~~community;

● ~~manipulation~~actual ofor ~~prices~~anticipated ~~through~~variations ~~prearranged~~in ~~matching~~quarterly ofoperating ~~purchases and sales and false and misleading press releases~~results;

● ~~“boiler~~changes ~~room”~~in ~~practices~~earnings ~~involving high-pressure sales tactics and unrealistic price projections by inexperienced sales persons~~estimates;

● ~~excessive~~publication ~~and~~(or ~~undisclosed~~lack ~~bid-ask~~of ~~differentials~~publication) ~~and~~of ~~markups~~research byreports ~~selling~~about ~~broker-dealers~~us; ~~and~~

● ~~the~~increases ~~wholesale~~in ~~dumping~~market ofinterest ~~the same securities by promoters and broker-dealers after prices have been manipulated to a desired level~~rates, ~~along~~which ~~with~~may ~~the~~increase ~~resulting~~our ~~inevitable~~cost ~~collapse~~ of ~~those prices and with consequent investor losses.~~capital;

~~Our~~● ~~management~~changes ~~is aware of the abuses that have occurred historically~~ in ~~the~~applicable ~~penny~~laws ~~stock market. Although we do not expect to be in a position to dictate the behavior of the market~~ or ~~of broker-dealers who participate in the market~~regulations, ~~management~~court ~~will~~rulings ~~strive~~and ~~within~~other ~~the~~legal ~~confines of practical limitations to prevent the described patterns from being established with respect to our common stock.~~actions;

~~Substantial~~● ~~future~~changes ~~sales of our common stock shares~~ in ~~the public~~ market ~~could~~valuations ~~cause~~of ~~our~~similar ~~stock price to fall.~~companies;

If● ~~our~~additions ~~stockholders sell substantial amounts of our common stock,~~ or ~~the~~departures ~~public market perceives that stockholders might sell substantial amounts~~ of ~~our~~key common stock, the market price of our common stock could decline significantly. Such sales also might make it more difficult for us to sell equity or equity-related securities in the future at a time and price that our management deems appropriate. As of December 31, 2016, we had: (i) 94,188,413 shares of our common stock outstanding, and (ii) also have outstanding convertible notes (including accrued interest) with warrants convertible into approximately 55.0 million shares of our common stock, and warrants, immediately exercisable and representing the right to purchase approximately 19.1 million shares of our common stock. An additional 14,000,000 shares of our common stock have been reserved for issuance pursuant to our 2007 Stock Option Plan. personnel;

~~Potential~~● ~~issuance~~actions ofby ~~additional~~our ~~common~~stockholders; and ~~preferred stock could dilute existing stockholders.~~

We● ~~are~~general ~~authorized~~market to issue up to 240,000,000 shares of common stock. To the extent of such authorization, our board of directors has the ability, without seeking stockholder approval, to issue additional shares of common stock in the future for such consideration as the board of directors may consider sufficient. We are also authorized to issue up to ten million shares of preferred stock, the rights and ~~preferences~~economic ~~of which may be designated in series by the board of directors~~conditions. Such designation of new series of preferred stock may be made without stockholder approval, and could create additional securities which would have dividend and liquidation preferences over the common stock offered hereby. Preferred stockholders could adversely affect the rights of holders of common stock by:

●Trading ~~exercising~~in ~~voting,~~our ~~redemption~~common ~~and~~stock ~~conversion~~is ~~rights~~subject to ~~the~~special ~~detriment~~sales ofpractices ~~the~~and ~~holders~~may ofbe ~~common~~difficult ~~stock;~~to sell.

●Our ~~receiving~~common ~~preferences~~stock ~~over~~is subject to the ~~holders~~Securities ofand ~~common~~Exchange Commission’s “penny stock” ~~regarding~~rule, which imposes special sales practice requirements upon broker-dealers who sell such securities to persons other than established customers or accredited investors. Penny stocks are generally defined to be an equity security that has a ~~surplus~~market price of ~~funds~~less than $5.00 per share. For purposes of the rule, the phrase “accredited investors” means, in general terms, institutions with assets in excess of $5,000,000, or individuals having a net worth or a joint net worth with the ~~event~~person’s spouse, in excess of ~~our~~$1,000,000 ~~dissolution~~or having an annual income that exceeds $200,000 (or ~~liquidation;~~that, when combined with a spouse’s income, exceeds $300,000). For transactions covered by the rule, the broker-dealer must make a special suitability determination for the purchaser and receive the purchaser’s written agreement to the transaction prior to the sale. Consequently, the rule may affect the ability of broker-dealers to sell our securities and also may affect the ability of our shareholders in this offering to sell their securities in any market that might develop.

~~● delaying, deferring or preventing a change in control of our company; and~~17

●Table ~~discouraging~~of ~~bids for our common stock.~~Contents

InStockholders ~~all~~should ~~the~~be ~~situations~~aware ~~described above~~that, ~~the~~according ~~issuance~~to ofSecurities ~~additional~~and ~~common~~Exchange ~~stock~~Commission inRelease ~~the~~No. ~~future~~34-29093, ~~will~~the ~~reduce~~market ~~the~~for ~~proportionate~~penny ~~ownership~~stocks ~~and~~has ~~voting~~suffered ~~power~~from patterns of ~~our~~fraud ~~current~~and ~~stockholders~~abuse. Such patterns include:

~~ITEM~~● ~~1B.~~control ~~Unresolved~~of ~~Staff~~the ~~Comments~~market for the security by one or a few broker-dealers that are often related to the promoter or issuer;

~~Not~~● ~~applicable.~~manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases;

~~ITEM~~● 2.“boiler ~~Properties~~room” practices involving high-pressure sales tactics and unrealistic price projections by inexperienced sales persons;

We● ~~currently~~excessive ~~occupy~~and ~~1,800~~undisclosed ~~square~~bid-ask ~~feet~~differentials ofand ~~office~~markups ~~space~~by inselling ~~St. Louis, Missouri. The initial term of the lease has expired, however, are continuing to lease on a month~~broker-~~to-month~~dealers; ~~basis (current term ended December 2016). The monthly lease payment is $1,800, plus utilities. We took possession of the leased space in January, 2008.~~and

18● the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the resulting inevitable collapse of those prices and with consequent investor losses.

~~ITEM~~Our 3management is aware of the abuses that have occurred historically in the penny stock market. ~~Legal~~Although ~~Proceedings~~we do not expect to be in a position to dictate the behavior of the market or of broker-dealers who participate in the market, management will strive within the confines of practical limitations to prevent the described patterns from being established with respect to our common stock.

~~None~~Substantial future sales of our common stock shares in the public market could cause our stock price to fall.

~~ITEM~~If 4our stockholders sell substantial amounts of our common stock, or the public market perceives that stockholders might sell substantial amounts of our common stock, the market price of our common stock could decline significantly. ~~Mine~~Such ~~Safety~~sales ~~Disclosures~~also might make it more difficult for us to sell equity or equity-related securities in the future at a time and price that our management deems appropriate. As of December 31, 2017, we had: (i) 97,633,409 shares of our common stock outstanding, and (ii) also have outstanding convertible notes (including accrued interest) with warrants convertible into approximately 58.0 million shares of our common stock, and warrants, immediately exercisable and representing the right to purchase approximately 14.7 million shares of our common stock. An additional 14,000,000 shares of our common stock have been reserved for issuance pursuant to our 2007 Stock Option Plan.

~~Not~~Potential ~~applicable~~issuance of additional common and preferred stock could dilute existing stockholders.

~~PART~~We IIare authorized to issue up to 240,000,000 shares of common stock. To the extent of such authorization, our board of directors has the ability, without seeking stockholder approval, to issue additional shares of common stock in the future for such consideration as the board of directors may consider sufficient. We are also authorized to issue up to ten million shares of preferred stock, the rights and preferences of which may be designated in series by the board of directors. Such designation of new series of preferred stock may be made without stockholder approval, and could create additional securities which would have dividend and liquidation preferences over the common stock offered hereby. Preferred stockholders could adversely affect the rights of holders of common stock by:

~~ITEM~~● 5.exercising ~~Market~~voting, ~~for~~redemption ~~Registrant’s~~and ~~Common~~conversion ~~Equity,~~rights ~~Related~~to ~~Stockholder~~the ~~Matters~~detriment ~~and~~of ~~Issuer~~the ~~Purchases~~holders of ~~Equity~~common ~~Securities~~stock;

~~Our~~● ~~Common~~receiving ~~Stock~~preferences ~~(“Common~~over ~~Stock”) (symbol: CLTH) is currently posted on~~ the ~~OTCQB~~holders ~~Market.~~of ~~The~~common ~~following~~stock ~~table~~regarding ~~sets~~a ~~forth~~surplus ~~for~~of ~~the~~funds ~~periods~~in ~~indicated~~ the ~~high~~event ~~and low bid prices per share~~ of our ~~Common~~dissolution ~~Stock:~~or liquidation;

	Price Range of Common Stock
Year Ended December 31, 2014
First Quarter	$	0.04	$	0.01
Second Quarter	$	0.04	$	0.02
Third Quarter	$	0.03	$	0.01
Fourth Quarter	$	0.03	$	0.01
Year Ended December 31, 2015
First Quarter	$	0.03	$	0.01
Second Quarter	$	0.03	$	0.02
Third Quarter	$	0.04	$	0.02
Fourth Quarter	$	0.04	$	0.01
Year Ended December 31, 2016
First Quarter	$	0.06	$	0.02
Second Quarter	$	0.10	$	0.04
Third Quarter	$	0.10	$	0.05
Fourth Quarter	$	0.11	$	0.08

●

delaying, deferring or preventing a change in control of our company; and

~~These~~● ~~bid~~discouraging ~~and~~bids ~~ask~~for ~~prices~~our ~~represent~~common ~~prices quoted by broker-dealers on the OTC Market~~stock. ~~The quotations reflect inter-dealer prices, without retail mark-up, mark-down or commissions, and may not represent actual transactions.~~

OnIn ~~March~~all ~~29,~~the ~~2017~~situations described above, the ~~closing~~issuance ~~price~~ of ~~our~~additional ~~Common~~common ~~Stock~~stock ~~was~~in ~~$0.085~~the ~~per~~future ~~share.~~will Asreduce ofthe ~~March 30,~~proportionate ~~2017,~~ownership weand ~~had~~voting ~~approximately~~power ~~125~~of ~~stockholders~~our ofcurrent ~~record~~stockholders.

~~Dividend~~ITEM ~~Policy~~1B. Unresolved Staff Comments

WeNot ~~have no material operating history and therefore have had no earnings to distribute to stockholders~~applicable. We do not anticipate paying any cash dividends in the foreseeable future. Rather, we currently intend to retain our earnings, if any, and reinvest them in the development of our business. Any future determination to pay cash dividends will be at the discretion of our board of directors and will be dependent upon our financial condition, results of operations, capital requirements, restrictions under any existing indebtedness and other factors the board of directors may deem relevant.

~~Recent~~ITEM ~~Sales~~2. ~~of Unregistered Securities~~ Properties

InWe ~~August~~currently ~~2013~~occupy 1,800 ~~the~~square ~~Company~~feet ~~commenced an offering~~ of ~~units,~~office ~~under~~space ain ~~Subscription~~St. ~~Agreement~~Louis, ~~at a purchase price of $1,000 per unit (Equity Offering 8/13)~~Missouri. ~~Each~~The ~~unit~~initial ~~consists~~term of: ~~(i) 10,000 shares of~~ the ~~Company’s~~lease ~~authorized~~has ~~but~~expired, ~~unissued~~however, ~~restricted~~we ~~Common~~are ~~Stock~~continuing ~~and (ii) warrants~~ to ~~purchase~~lease ~~30,000~~on ~~additional shares of Common Stock for~~ a ~~three~~month-~~year~~to-month ~~period~~basis ~~from~~(current ~~the~~term ~~date~~ended ~~of issuance of the units at an initial exercise price of $0.15 per share. As of~~ December ~~31,~~ 2016,). ~~the~~The ~~Company~~monthly ~~raised~~lease apayment ~~total~~is of $~~663~~1,~~500~~800, ofplus ~~investment proceeds pursuant to the Equity Offering 8/13~~utilities. ~~The~~We ~~issuance~~took ofpossession ~~units and the issuance~~ of ~~Common Stock were exempt from~~ the ~~registration~~leased ~~requirements~~space ofin ~~the~~January Securities Act of 1933, as amended (the “Securities Act”), pursuant to Rule 506(b) of Regulation D (“Rule 506(b)”) promulgated under the Securities Act and/or Section 4(a)(2) of the Securities Act2008.

1918

InTable ~~January 2014, the Company issued 500,000 shares~~ of ~~restricted Common Stock to GWS Environmental Consultants in consideration for services. These shares were issued in a private transaction in reliance on Section 4(a)(2) of the Securities Act.~~Contents

InITEM ~~April 2014, the Company issued to certain Board members and management an aggregate of 4,250,000 shares of restricted Common Stock~~3. ~~Such~~Legal ~~shares were issued in consideration of services. These shares were issued in a private transaction in reliance on Section 4(a)(2) of the Securities Act.~~Proceedings

InOn ~~January~~February ~~2015~~27, 2018, Gary Giordano, Thomas Giordano, and James Avenue, LLC, the minority members of Van Keuren (the "Plaintiffs"), filed a complaint (the "Complaint") against the Company ~~issued~~and ~~500~~Mr. Hennessey in the Chancery Division of the Superior Court of Hudson County,~~000~~ ~~shares~~New Jersey arising out of ~~restricted~~the ~~Common~~Acquisition ~~Stock~~Agreement towith aVan ~~member~~Keuren (the "Van Keuren Agreement"). The Complaint asserts, among other things, breach of ~~management~~contract, inbreach ~~consideration~~of ~~for~~implied ~~services~~covenant of good faith and fair dealing, and fraud. ~~These~~The ~~shares~~Complaint ~~were~~alleges ~~issued~~that inthe Company failed to take reasonable actions to effectuate certain of its obligations under the Van Keuren Agreement within a ~~private~~reasonable ~~transaction~~time, insuch ~~reliance~~as (i) acquiring approval of the New Jersey Department of Environmental Protection to establish a transfer station and material recovery facility ("TS/MRF") on ~~Section~~property 4owned by James Avenue, LLC, (aii) acquiring the other governmental approvals needed to operate the TS/MRF, and (2iii) entering a lease with James Avenue, LLC to operate the TS/MRF, and furthermore that the Company misrepresented its ability to carry out these obligations. The Complaint also alleges that the Company never delivered 1,000,000 shares of restricted common stock due to the ~~Securities~~plaintiffs ~~Act~~as consideration under the Van Keuren Agreement. The Complaint requests a return of the shares in Van Keuren to the Plaintiffs, as well as compensatory damages for the loss of rental income and preferential tipping fees. See Item 1—Business—Plan of Operation—Biomass Feedstock Production for additional information regarding the Van Keuren Agreement.

~~During~~We ~~September~~are ~~2015,~~currently ~~the~~working ~~Company~~with ~~commenced~~the anPlaintiffs ~~offering~~to ofreach ~~units comprised of~~ a ~~convertible promissory note and a warrant (2015 Offering)~~settlement. AsTo ofthat ~~December 31~~end, ~~2016,~~we ~~the~~have ~~Company~~requested ~~raised~~and areceived ~~total~~from ~~of $85,000 of investment proceeds pursuant to~~ the ~~2015~~court ~~Offering. Each convertible promissory note carries~~ an ~~18-month~~extension ~~term and a 6% interest rate. In addition, each note can be converted into shares~~ of ~~the~~time ~~Company’s~~to ~~Common~~file ~~Stock~~our atresponse ~~$0.10~~to ~~per share at~~ the ~~noteholders option~~Complaint. ~~Each~~Due ~~note was issued with a warrant~~ to ~~purchase additional shares of Common Stock to provide three times coverage of~~ the ~~potential~~uncertainty ~~shares issued on the principal value~~ of the ~~note~~ultimate atoutcome ~~a price~~ of ~~$0.15~~these ~~per~~matters, ~~share. The issuance of units and~~ the ~~issuance~~impact ofon ~~Common~~our ~~Stock~~future ~~upon~~financial ~~conversion~~results ofcannot ~~notes~~be ~~were~~reasonably ~~exempt~~estimated ~~from~~at ~~the~~this ~~registration requirements of the Securities Act, pursuant to Rule 506(b) and/or Section 4(a)(2) of the Securities Act~~time.

InITEM ~~February 2016, the Company issued~~ 4~~,000,000 shares of restricted Common Stock to a members of management in consideration for services~~. ~~These~~Mine ~~shares~~Safety ~~were issued in a private transaction in reliance on Section 4(a)(2) of the Securities Act.~~Disclosures

~~ITEM~~Not 6applicable. ~~Selected Financial Data~~

~~Not~~PART ~~applicable.~~II

ITEM 75. ~~Management~~ Market for Registrant’s ~~Discussion~~Common ~~and~~Equity, ~~Analysis~~Related ofStockholder ~~Financial~~Matters ~~Condition~~ and ~~Results~~Issuer Purchases of ~~Operations~~Equity Securities

~~The~~Our ~~following~~Common ~~discussion~~Stock of(“Common ~~our~~Stock”) ~~plan~~(symbol: ofCLTH) ~~operation~~is ~~should~~currently beposted ~~read~~on ~~in conjunction with~~ the ~~financial~~OTCQB ~~statements and related notes to the financial statements included elsewhere in this report~~Market. ~~This~~The ~~discussion~~following ~~contains~~table ~~forward-looking~~sets ~~statements~~forth ~~that~~for ~~relate~~the toperiods ~~future~~indicated ~~events~~the orhigh ~~our future financial performance. These statements involve known~~ and ~~unknown~~low ~~risks,~~bid ~~uncertainties~~prices ~~and~~per ~~other~~share ~~factors~~of ~~that may cause~~ our ~~actual~~Common results, levels of activity or performance to be materially different from any future results, levels of activity or performance. These risks and other factors include, among others, those listed under “Statement Regarding Forward-Looking Statements” and “Risk Factors” and those included elsewhere in this report.Stock:

As a result of the limited operating history of our company, prior years’ financial statements provide little information and virtually no guidance as to our future performance (except to the extent we continue to incur net losses). In order to finance our business beyond this stage, we will be required to raise additional capital or identify another source of outside funding. All of our potential developments/projects will require a significant amount of capital. While we continue to pursue outside sources of funding, we have not had success securing meaningful amounts of financing. As a result, we can provide no assurance that we will secure any funding in the immediate time frame required and the failure to do so will likely result in an inability to continue operations. Management hopes to secure additional funds through equity or debt financing, government grants, or project financings, until such time as the Company begins to generate revenue and the Company’s revenues and cash flow are sufficient to meet its cost structure and ultimately achieve profitable operations. The consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties. We may not be able to secure financing on favorable terms, or at all. If we are unable to obtain acceptable financing on a timely basis, our business will likely fail and our common stock may become worthless.

	Price Range of Common Stock
Year Ended December 31, 2015
First Quarter	$	0.03	$	0.01
Second Quarter	$	0.03	$	0.02
Third Quarter	$	0.04	$	0.02
Fourth Quarter	$	0.04	$	0.01

Year Ended December 31, 2016
First Quarter	$	0.06	$	0.02
Second Quarter	$	0.10	$	0.04
Third Quarter	$	0.10	$	0.05
Fourth Quarter	$	0.11	$	0.08

Year Ended December 31, 2017
First Quarter	$	0.13	$	0.08
Second Quarter	$	0.08	$	0.07
Third Quarter	$	0.08	$	0.02
Fourth Quarter	$	0.11	$	0.02

20These bids and ask prices represent prices quoted by broker-dealers on the OTC Market. The quotations reflect inter-dealer prices, without retail mark-up, mark-down or commissions, and may not represent actual transactions.

~~Overview~~On March 30, 2018, the closing price of our Common Stock was $0.030 per share. As of March 30, 2017, we had approximately 129 stockholders of record.

~~Our~~Dividend focus is to secure sufficient capital to fund our current working capital requirements and the construction of a commercial plant as described previously in Item 1 of this report – Plan of Operations. Policy

~~Results~~We have no material operating history and therefore have had no earnings to distribute to stockholders. We do not anticipate paying any cash dividends in the foreseeable future. Rather, we currently intend to retain our earnings, if any, and reinvest them in the development of ~~Operations~~our business. Any future determination to pay cash dividends will be at the discretion of our board of directors and will be dependent upon our financial condition, results of operations, capital requirements, restrictions under any existing indebtedness and other factors the board of directors may deem relevant.

The company’s activities and related primary expenses are in the following categories: General and administrative – payroll (including share-based compensation, stock grants, and payroll taxes), general office expenses, travel, and business insurance; Professional fees - consulting, accounting and legal fees; Interest – interest on convertible notes.19

~~The~~Table ~~following tables set forth the amounts~~ of ~~expenses and changes in our consolidated statements of operations:~~Contents

~~Year~~Recent ~~ended~~Sales ~~December 31,~~of ~~2016~~Unregistered ~~compared to the year ended December 31, 2015~~Securities

	Years ended December 31,
	2016		2015			Change		% Change
Costs and expenses:
General and administrative	$	394,709	$	363,933		$	30,776		8	%
Professional fees		91,402		81,107			10,295		13	%
		486,111		445,040			41,071
Other expense (income):
Interest expense		225,268		206,728			18,540		9	%
Interest income, net of accrued interest written-off		9,315		(1,672	)		10,987		-657	%
Net loss applicable to common stockholders	$	720,694	$	650,096		$	70,598		11	%

In August 2013, the Company commenced an offering of units, under a Subscription Agreement, at a purchase price of $1,000 per unit (Equity Offering 8/13). Each unit consists of: (i) 10,000 shares of the Company’s authorized but unissued restricted Common Stock and (ii) warrants to purchase 30,000 additional shares of Common Stock for a three-year period from the date of issuance of the units at an initial exercise price of $0.15 per share. As of December 31, 2017, the Company raised a total of $763,500 of investment proceeds pursuant to the Equity Offering 8/13. The issuance of units and the issuance of Common Stock were exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Rule 506(b) of Regulation D (“Rule 506(b)”) promulgated under the Securities Act and/or Section 4(a)(2) of the Securities Act.

~~Costs~~During September 2015, the Company commenced an offering of units comprised of a convertible promissory note and ~~expenses:~~a warrant (2015 Offering). As of December 31, 2017, the Company raised a total of $85,000 of investment proceeds pursuant to the 2015 Offering. Each convertible promissory note carries an 18-month term and a 6% interest rate. In addition, each note can be converted into shares of the Company’s Common Stock at $0.10 per share at the noteholders option. Each note was issued with a warrant to purchase additional shares of Common Stock to provide three times coverage of the potential shares issued on the principal value of the note at a price of $0.15 per share. The issuance of units and the issuance of Common Stock upon conversion of notes were exempt from the registration requirements of the Securities Act, pursuant to Rule 506(b) and/or Section 4(a)(2) of the Securities Act.

~~General~~In ~~and~~February ~~administrative~~2017, –the ~~The~~Company ~~increase~~issued in500,000 ~~2016~~shares isof restricted ~~due~~Common ~~primarily~~Stock to ana ~~increase~~Board ~~of:~~Member in exchange for $4850,000. ~~related~~This tooffering ~~stock~~of ~~grants,~~securities ~~$12,000~~was exempt infrom ~~travel~~registration ~~and~~under ~~entertainment,~~the ~~offset~~Securities byAct ain ~~decrease~~accordance ofwith ~~$30~~Section 4(a)(2) thereof,~~000~~ ina ~~payroll~~transaction ~~and~~by ~~business~~the ~~insurance.~~issuer not involving a public offering.

~~Professional~~In ~~Fees~~May –2017, ~~The~~the ~~increase~~Company inissued ~~2016~~100,000 isshares ~~due~~of ~~primarily~~restricted Common Stock to ana ~~increase~~consultant as compensation for accounting services provided to the Company. This offering of ~~$10,000~~securities was exempt from registration under the Securities Act in ~~accounting~~accordance ~~and~~with ~~consulting~~Section 4(a)(2) ~~fees~~thereof, a transaction by the issuer not involving a public offering.

~~Interest~~In ~~expense~~June –2017, ~~The~~the ~~increase~~Company inissued ~~2016~~500,000 isshares ~~due~~of restricted Common Stock to ~~the~~a ~~compounding~~Board ~~effect~~Member in exchange for $50,000. This offering of ~~interest~~securities was onexempt ~~our~~from ~~notes~~registration ~~payable~~under ~~along~~the Securities Act in accordance with ~~two~~Section 4(a)(2) ~~new~~thereof, ~~notes~~a intransaction ~~June~~by ~~and~~the ~~October~~issuer ofnot ~~2016~~involving a public offering.

~~Year~~In ~~ended~~July ~~December 31~~2017, ~~2015~~the ~~compared~~Company issued 200,000 shares of restricted Common Stock to a consultant as compensation for accounting services provided to the ~~year~~Company. ~~ended~~This ~~December~~offering 31of securities was exempt from registration under the Securities Act in accordance with Section 4(a)(2) thereof, ~~2014~~a transaction by the issuer not involving a public offering.

	Years ended December 31,
	2015			2014			Change			% Change
Costs and expenses:
General and administrative	$	363,933		$	425,842		$	(61,909	)		-15	%
Professional fees		81,107			92,661			(11,554	)		-12	%
		445,040			518,503			(73,463	)
Other expense (income):
Interest expense		206,728			196,432			10,296			5	%
Interest income, net of accrued interest written-off		(1,672	)		(3,076	)		1,404			-46	%
Net loss applicable to common stockholders	$	650,096		$	711,859		$	(61,763	)		-9	%

In August 2017, the Company issued 2,000,000 shares of restricted Common Stock to consultants for business consulting services regarding the collection and disposal of MSW in the New York and New Jersey markets to be provided over a two-year term. These offerings of securities were exempt from registration under the Securities Act in accordance with Section 4(a)(2) thereof, as transactions by the issuer not involving a public offering.

2120

~~Costs~~Table ~~and~~of ~~expenses:~~Contents

~~General~~ITEM ~~and~~6. ~~administrative~~Selected –Financial ~~The decrease in 2015 is due primarily to decreases of: $29,000 related to stock grants, $10,000 in travel and entertainment, and $8,000 each in payroll and business insurance.~~ Data

~~Professional~~Not ~~Fees – The decrease in 2015 is due primarily to a decrease of $10,000 in consulting fees~~applicable.

~~Interest~~ITEM ~~expense~~7. –Management’s ~~The~~Discussion ~~increase~~and inAnalysis ~~2015~~of isFinancial ~~due~~Condition toand ~~the~~Results ~~compounding effect~~ of ~~interest on our notes payable along with a full years’ interest in 2015 on one note issued in February 2014.~~Operations

~~Liquidity~~The following discussion of our plan of operation should be read in conjunction with the consolidated financial statements and ~~Capital~~related ~~Resources~~notes to the consolidated financial statements included elsewhere in this report. This discussion contains forward-looking statements that relate to future events or our future financial performance. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity or performance to be materially different from any future results, levels of activity or performance. These risks and other factors include, among others, those listed under “Statement Regarding Forward-Looking Statements” and “Risk Factors” and those included elsewhere in this report.

As a ~~development-stage~~result of the limited operating history of our company, weprior ~~have~~years’ noconsolidated ~~revenues~~financial statements provide little information and ~~will~~virtually beno ~~required~~guidance as to ~~obtain~~our anfuture ~~outside~~performance ~~source~~(except ofto ~~capital~~the inextent we continue to incur net losses). In order to ~~execute~~finance our business ~~plan~~beyond ~~and~~this ~~commercialize~~stage, ~~our~~we ~~products.~~will ~~Beginning~~be inrequired ~~September~~to ~~2008~~raise ~~and~~additional ascapital ofor ~~March~~identify ~~30,~~another ~~2017,~~source weof ~~raised~~outside anfunding. ~~aggregate~~All of: ~~(i)~~our ~~approximately~~potential ~~$3.15~~developments/projects ~~million~~will inrequire ~~separate~~a ~~offerings~~significant amount of ~~units~~capital. ~~comprised~~While ofwe acontinue ~~convertible~~to ~~note~~pursue ~~and~~outside ~~warrants~~sources inof ~~separate~~funding, ~~offerings~~we ~~from~~have ~~2008~~not ~~through~~had ~~2016~~success ~~and~~securing ~~(ii)~~meaningful ~~$713~~amounts of financing. As a result,~~500~~ inwe ancan ~~equity~~provide ~~offering~~no ofassurance ~~restricted~~that ~~Common~~we ~~Stock~~will ~~through~~secure ~~our~~any ~~Subscription~~funding ~~Agreements~~in ~~(our~~the ~~Equity~~immediate ~~Offering~~time ~~8/13).~~frame Werequired ~~are~~and ~~continuing~~the failure to ~~explore~~do ~~opportunities~~so will likely result in an inability to ~~raise~~continue ~~cash~~operations. ~~through~~Management ~~the~~hopes ~~issuance~~to ofsecure ~~these~~additional ~~units~~funds ~~and~~through ~~other~~equity ~~financing~~or ~~opportunities~~debt financing, ~~however~~government togrants, ~~date~~or weproject ~~have~~financings, ~~not~~until ~~been~~such ~~successful~~time inas ~~doing~~the ~~so.~~Company Asbegins ofto ~~March~~generate ~~30,~~revenue ~~2017,~~and ~~our~~the ~~current~~Company’s ~~cash~~revenues and ~~other~~cash ~~assets~~flow are ~~not~~ sufficient to ~~fund~~meet ~~our~~its cost structure and ultimately achieve profitable operations. AsThe ofconsolidated ~~December~~financial ~~31,~~statements ~~2016,~~do wenot ~~had~~include aany ~~significant~~adjustments ~~working~~that ~~capital~~might ~~deficit~~result from the outcome of these uncertainties. ~~Our~~We ~~liabilities~~may ~~are~~not ~~substantially~~be ~~greater~~able ~~than~~to ~~our~~secure ~~current~~financing ~~assets.~~on ~~Our~~favorable ~~only~~terms, ~~significant~~or ~~assets~~at all. If we are ~~our~~unable ~~intellectual~~to ~~property~~obtain ~~rights~~acceptable financing on a timely basis, ~~which~~our ~~are~~business ~~intangible~~will likely fail, and ~~not~~our ~~readily~~common ~~convertible~~stock ~~into~~may ~~liquid~~become ~~assets~~worthless.

We are attempting to identify one or more potential sources of additional financing, such as through the sale of additional equity, various government funding opportunities and/or possibly through strategic alliances with larger energy or waste management companies. The Company will continue to explore, and if identified, evaluate financing alternatives and/or other transactions, including potentially retaining a financial advisor. However, we may not be successful in securing additional financing. If we are not able to obtain additional financing in the immediate future, we will be required to further delay our development until such financing becomes available. Further, even assuming that we secure additional funds, we may never achieve profitability or positive cash flow. If we are not able to timely and successfully raise additional capital and/or achieve profitability or positive cash flow, we will not have sufficient capital resources to implement our business plan or to continue our operations.Overview

~~Debt~~Our focus is to secure sufficient capital to fund our current working capital requirements and the construction of a commercial plant as described previously in Item 1 of this report – Plan of Operations.

~~Convertible~~Results ~~Notes Payable - Since September 2008, the Company has conducted six offerings~~ of ~~units comprised of a convertible promissory note and a warrant, and one offering of a convertible note (with no warrant), having the terms set forth below:~~Operations

Offering	Note Interest Rate		Note Conversion Price		Warrant Exercise Price		Term	Closed or Open
2008 Offering		6.0%	$	0.25	$	0.45	One-year	Closed
2009 Offering		6.0%	$	0.08	$	0.30	One-year	Closed
6/10 Offering		12.0%	$	0.08	$	0.30	One-year	Closed
11/10 Offering		6.0%	$	0.06	$	0.30	One-year	Closed
5/12 Offering		6.0%	$	0.10	$	0.35	18 months	Closed
2/14 Offering		6.0%	$	0.10		n/a	18 months	Closed
2015 Offering		6.0%	$	0.10	$	0.15	18 months	Closed

~~Each~~Year ~~note~~ended ~~holder retains the option of cash repayment of the note plus interest~~December 31, or2017 ~~can~~compared ~~convert the note at any time during the term of the note or prior~~ to the ~~closing~~year ofended any Qualifying Equity Financing (minimum capital received of $5 million) into shares of Common Stock at the conversion price noted above. All notes have been recorded as debt (notes payable) in the financial statements, net of discounts for the conversion and warrant features (except for the 11/10, 5/12, 2/14, and 2015 Offerings which carried no discounts). The discounts have been amortized on a straight-line basis over the term of each note and were fully amortized as of December 31, ~~2011.~~ 2016

	Years ended December 31,
	2017		2016		Change			% Change
Costs and expenses:
General and administrative	$	243,971	$	394,709	$	(150,738	)		-38	%
Professional fees		117,214		91,402		25,812			28	%
		361,185		486,111		(124,926	)

Other expense (income):
Interest expense		241,107		225,268		15,839			7	%
Interest income, net of accrued interest written-off		6,981		9,315		(2,334	)		-25	%

Net loss applicable to common stockholders	$	609,273	$	720,694	$	(111,421	)		-15	%

2008 Offering - During September 2008, the Company commenced an offering of units and raised a total of $642,000 of investment proceeds through March 31, 2009. As of March 31, 2010, all of these notes had either been converted to shares of our common stock or exchanged into our 2009 Offering (resulting in new notes with a total face value of $539,829, which included the original principal and interest through the date of exchange). 21

~~2009~~Table ~~Offering - During April 2009, the Company commenced an offering~~ of units and raised a total of $1,198,500 of investment proceeds through August 2010. Three notes have been converted to shares of Common Stock (one each in 2009, 2010, and 2014). Beginning in March 2011, certain notes were exchanged into our 11/10 Offering or our 7.1.15 Note Payable. As a result, as of December 31, 2016, we had $199,790 face value of notes outstanding, which includes the exchanged notes from our 2008 Offering. All of these notes have matured. We plan to work with each remaining note holder to exchange, convert or repay these notes.Contents

~~6/10~~Costs ~~Offering - During June 2010, the Company commenced an offering of units~~ and ~~raised a total of $75,000 of investment proceeds in one note. Upon maturity in June 2011, this note was exchanged into our 11/10 Offering. As a result, the balance due on this offering is $-0-.~~expenses:

~~11/10~~General ~~Offering~~and -administrative ~~During~~– ~~November~~The ~~2010,~~decrease ~~the~~in ~~Company~~2017 ~~commenced~~was andue ~~offering~~primarily ofto ~~units,~~decreases ~~and raised a total~~ of: $~~451~~49,~~713~~000 ofrelated ~~investment proceeds. Three notes were converted~~ to ~~shares~~stock ofgrants, ~~common~~$17,000 ~~stock~~ in ~~2011~~travel and ~~four notes were converted to common stock in 2012. As of December 31~~entertainment, ~~2016, we had~~ $190,~~877,162~~000 ~~face~~in ~~value of notes outstanding~~payroll, ~~which~~offset ~~includes~~by ~~the~~an ~~exchanged~~increase ~~notes~~in ~~from~~insurance ~~our 2009 Offering. As~~ of ~~December 31, 2016, approximately~~ $~~1.75 million of these notes matured. We plan to work with each remaining note holder to exchange~~7, ~~convert or repay these notes~~000.

~~5/12~~Professional ~~Offering~~Fees -– ~~During~~The ~~May~~increase ~~2012,~~in ~~the~~2017 ~~Company~~was ~~commenced~~due anprimarily ~~offering~~to ofan ~~units~~increase ~~and raised a total~~ of $~~583~~25,~~510~~000 ofin ~~investment~~consulting ~~proceeds~~fees. ~~As of December 31, 2016, all of these notes are outstanding and have matured. We plan to work with each remaining note holder to exchange, convert or repay these notes.~~

~~2/14~~Interest ~~Offering~~expense -– ~~During~~The ~~February~~increase ~~2014,~~in ~~the~~2017 ~~Company~~was ~~commenced~~due anto ~~offering~~the ofcompounding ~~units~~effect ~~and~~of ~~raised~~interest aon ~~total~~our ofnotes ~~$100~~payable,~~000~~ ofinterest ~~investment~~on ~~proceeds~~two innew ~~one~~notes ~~note.~~payable Asin ofJanuary ~~December~~and ~~31,~~October ~~2016,~~of ~~this~~2017 ~~note is outstanding~~ and ~~has~~a ~~matured.~~full Weyears’ ~~plan~~worth toof ~~work~~interest ~~with~~for the ~~note~~June ~~holder~~2016 toand ~~exchange,~~October ~~convert~~of or2016 ~~repay this note~~notes.

~~2015~~Year ~~Offering~~ended -December 31, ~~During~~2016 ~~September~~compared ~~2015,~~to the ~~Company~~year ~~commenced~~ended ~~an offering of units and, as of~~ December 31, ~~2016, raised a total of $85,000 of investment proceeds.~~2015

WL Meyer Legacy Trust (formerly CMS Acquisition, LLC) Note Payable - In September 2010, the Company issued a note in the amount of $100,000 (interest at 6.0% per annum through May 15, 2011 and 10.0% thereafter and secured by a security interest in the PSC Patent) and issued warrants to purchase 2,000,000 shares of Common Stock at a price of $0.05 per share. The note is due the earlier of: (i) September 17, 2016 (extended from February 28, 2011 through various amendments) or (ii) the date on which $500,000 or more in the aggregate is raised by the Company in future offerings. The warrants are exercisable at any time for five years from the date of issuance or reissuance. As consideration in these amendments, the Company has: (i) paid $25,000 in February 2011 towards accrued interest to date and principal on the Note, (ii) increased the interest rate to 10% as of May 15, 2011, (iii) re-dated the original warrants to March 17, 2015, (iv) issued new warrants for 300,000 shares of the Company’s Common Stock with an exercise price of $0.05 and exercisable at any time until March 17, 2020, (v) issued new warrants for 150,000 shares of the Company’s Common Stock with an exercise price of $0.10 and exercisable at any time until March 17, 2020, and (vi) the Company has approved the assignment of the note by CMS to the WL Meyer Legacy Trust as of the March 17, 2015 amendment. As of December 31, 2016, $77,696 face value of this note is outstanding.

	Years ended December 31,
	2016		2015			Change		% Change
Costs and expenses:
General and administrative	$	394,709	$	363,933		$	30,776		8	%
Professional fees		91,402		81,107			10,295		13	%
		486,111		445,040			41,071

Other expense (income):
Interest expense		225,268		206,728			18,540		9	%
Interest income, net of accrued interest written-off		9,315		(1,672	)		10,987		-657	%

Net loss applicable to common stockholders	$	720,694	$	650,096		$	70,598		11	%

~~7.1.15~~Costs ~~Convertible Note Payable - On July 1, 2015, one noteholder in our 2009 Offering exchanged two notes into this note. This new note carries a 6% annual interest, compounded annually,~~ and ~~is due in quarterly installment payments~~expenses: ~~the greater of $3,000 or 10% of all investment proceeds received during the calendar quarter preceding the quarterly installment payment. As of December 31, 2016, this note has been paid in full.~~

23General and administrative – The increase in 2016 was due primarily to an increase of: $48,000 related to stock grants, $12,000 in travel and entertainment, offset by a decrease of $30,000 in payroll and business insurance.

~~The~~Professional ~~following~~Fees is– aThe ~~summary~~increase ofin ~~warrants~~2016 ~~issued~~was ~~and~~due ~~outstanding~~primarily asto ofan ~~the~~increase ~~dates~~of ~~below~~$10,000 atin ~~the~~accounting ~~exercise price~~ and ~~the~~consulting ~~amount of shares of Common Stock (these warrants have not been exercised or converted to common shares):~~fees.

	Exercise		As of December 31,
Warrants issued to:	Price		2016		2015		2014
Noteholders, 11/10 Offering	$	0.30		398,221		842,221		798,649
Noteholders, 5/12 Offering (c)	$	0.35		-		-		571,428
Noteholder in 2015 Offering	$	0.15		2,550,000		2,550,000		-
Investors in Subscription Agreements (a)	$	0.15		13,725,000		16,605,000		13,605,000
WL Meyer Legacy Trust	$	0.05		2,300,000		2,300,000		2,300,000
WL Meyer Legacy Trust	$	0.10		150,000		150,000		-
Vertex Energy, Inc. (b)	$	0.11		-		-		-
Vertex Energy, Inc. (b)	$	0.10		-		-		-
				19,123,221		22,447,221		17,275,077

Interest expense – The increase in 2016 was due to the compounding effect of interest on our notes payable along with two new notes in June and October of 2016.

~~(a)~~Liquidity ~~Warrants~~and ~~issued~~Capital toResources ~~investors under these Subscription Agreements can be exercised anytime within three years from date of Agreement. These warrants currently expire at various dates from August 2016 through May 2018.~~

As a development-stage company, we have no revenues and will be required to obtain an outside source of capital in order to execute our business plan and commercialize our products. Beginning in September 2008 and as of March 30, 2018, we raised an aggregate of: (bi) ~~These~~approximately $3.50 million in separate offerings of units comprised of notes payable and warrants ~~expired~~in onseparate ~~October~~offerings 22from 2008 through 2017 and (ii) $763,500 ~~2014~~in an equity offering of restricted Common Stock through our Subscription Agreements (our Equity Offering 8/13). We are continuing to explore opportunities to raise cash through the issuance of these units and other financing opportunities, however to date we have not been successful in doing so. As of March 30, 2018, our current cash and other assets are not sufficient to fund our operations. As of December 31, 2017, we had a significant working capital deficit. Our liabilities are substantially greater than our current assets. Our only significant assets are our intellectual property rights, which are intangible and not readily convertible into liquid assets.

~~(c)~~We ~~The~~are ~~last~~attempting to identify one or more potential sources of ~~these~~additional ~~warrants~~financing, ~~expired~~such onas ~~July~~through 5the sale of additional equity, ~~2015~~various government funding opportunities and/or possibly through strategic alliances with larger energy or waste management companies. The Company will continue to explore, and if identified, evaluate financing alternatives and/or other transactions, including potentially retaining a financial advisor. However, we may not be successful in securing additional financing. If we are not able to obtain additional financing in the immediate future, we will be required to further delay our development until such financing becomes available. Further, even assuming that we secure additional funds, we may never achieve profitability or positive cash flow. If we are not able to timely and successfully raise additional capital and/or achieve profitability or positive cash flow, we will not have sufficient capital resources to implement our business plan or to continue our operations.

~~Summary of Cash Flow Activity~~22

	For the Years Ended December 31,
	2016			2015			2014
Net cash used by operating activities	$	(179,619	)	$	(165,301	)	$	(350,202	)
Net cash used by investing activities		-			-			-
Net cash provided by financing activities		177,170			168,224			349,961

Table of Contents

~~Net cash used by operating activities~~Debt

~~During~~Convertible ~~2016,~~Notes ~~2015~~Payable ~~and~~- ~~2014~~Since September 2008, ~~cash~~the ~~used~~Company byhas ~~operating~~conducted ~~activities~~six ~~was~~offerings ~~impacted~~of ~~primarily~~units bycomprised ~~increases~~of ina ~~accounts~~convertible ~~payable~~promissory note and ~~other~~a ~~accrued~~warrant, ~~liabilities.~~and one offering of a convertible note (with no warrant), having the terms set forth below:

Net cash provided by financing activities

Offering	Note Interest Rate		Note Conversion Price	Warrant Exercise Price	Term	Closed or Open
2008 Offering		6.0%	$0.25	$0.45	One-year	Closed
2009 Offering		6.0%	$0.08	$0.30	One-year	Closed
6/10 Offering		12.0%	$0.08	$0.30	One-year	Closed
11/10 Offering		6.0%	$0.06	$0.30	One-year	Closed
5/12 Offering		6.0%	$0.10	$0.35	18 months	Closed
2/14 Offering		6.0%	$0.10	n/a	18 months	Closed
2015 Offering		6.0%	$0.10	$0.15	18 months	Closed

~~During~~Each ~~2016,~~note holder retains the option of cash ~~provided~~repayment byof ~~financing~~the ~~activities~~note ~~was~~plus ~~primarily~~interest, ~~due~~or ~~from~~can convert the ~~continuance~~note ofat ~~our~~any ~~Equity~~time ~~Offering~~during ~~and~~ the ~~issuance~~term of ~~equity~~the ~~and~~note aor ~~note~~prior ~~payable for~~to athe ~~total~~closing of ~~$195,000,~~any ~~offset~~Qualifying byEquity ~~note~~Financing ~~payable~~(minimum ~~payments~~capital received of $~~17,377. During~~5 ~~2015,~~million) ~~cash~~into ~~provided~~shares byof ~~financing~~Common ~~activities~~Stock ~~was~~at ~~primarily~~the ~~due~~conversion ~~from~~price ~~the~~noted ~~continuance~~above. ofAll ~~our~~notes ~~Equity~~have ~~Offering~~been ~~and~~recorded as debt (notes payable) in the ~~issuance~~consolidated offinancial astatements, ~~Convertible~~net ~~Note~~of ~~combining~~discounts for athe ~~total~~conversion ofand ~~$185,000,~~warrant ~~offset~~features by(except ~~note~~for ~~payable~~the ~~payments~~11/10, of5/12, $2/14,~~500.~~ ~~During~~and ~~2014,~~2015 ~~cash~~Offerings ~~provided~~which bycarried ~~financing~~no ~~activities~~discounts). ~~was~~The ~~primarily~~discounts ~~from~~have ~~the~~been ~~continuance~~amortized ofon ~~our~~a ~~Equity~~straight-line ~~Offering~~basis ~~and~~over the ~~issuance~~term of aeach ~~Convertible~~note ~~Note~~and ~~combining~~were ~~for~~fully aamortized ~~total~~as of ~~$347~~December 31,~~500~~ 2011.

242008 Offering - During September 2008, the Company commenced an offering of units and raised a total of $642,000 of investment proceeds through March 31, 2009. As of March 31, 2010, all of these notes had either been converted to shares of our common stock or exchanged into our 2009 Offering (resulting in new notes with a total face value of $539,829, which included the original principal and interest through the date of exchange).

~~Contractual~~2009 ~~Obligations~~Offering - During April 2009, the Company commenced an offering of units and ~~Commitments~~raised a total of $1,198,500 of investment proceeds through August 2010. Four notes have been converted to shares of Common Stock (one each in 2009, 2010, 2014 and 2017). Beginning in March 2011, certain notes were exchanged into our 11/10 Offering or our 7.1.15 Convertible Note Payable. As a result, as of December 31, 2017, we had $189,185 face value of notes outstanding due to this offering, which includes the exchanged notes from our 2008 Offering. All of these notes have matured. We plan to work with each remaining note holder to exchange, convert or repay these notes.

In6/10 ~~the~~Offering ~~table~~- ~~below,~~During weJune ~~set forth our obligations as of December 31~~2010, ~~2016. Some of~~ the ~~figures~~Company wecommenced ~~include~~an inoffering ~~this~~of ~~table~~units ~~are based on our estimates~~ and ~~assumptions~~raised ~~about~~a ~~these~~total ~~obligations,~~of ~~including their durations~~$75,000 ~~anticipated~~of ~~actions~~investment byproceeds ~~third~~in ~~parties~~one ~~and other factors~~note. ~~The~~Upon ~~obligations~~maturity ~~we may pay~~ in ~~future~~June ~~periods~~2011, ~~may vary from those reflected in~~ this ~~table~~note ~~because~~was ofexchanged ~~estimates~~into orour ~~actions~~11/10 ofOffering. ~~third~~As ~~parties~~a asresult, ~~disclosed~~the inbalance ~~the~~due ~~notes~~on tothis ~~the~~offering ~~table~~is $-0-.

	Payments due by Period
	Total		Less than 1 year		1 to 3 years		4 to 5 years		More than 5 years
Convertible Notes (1)	$	3,756,009	$	3,756,009	$	-	$	-	$	-
WL Meyer Legacy Trust (CMS) Note (2)		122,670		122,670		-		-		-
Note Payable (Non-convertible) (3)		52,614		52,614		-		-		-
Note Payable (Non-convertible) (5)		35,690		35,690		-		-		-
Operating Lease (4)		-		-		-		-		-
Total contractual obligations	$	3,966,983	$	3,966,983	$	-	$	-	$	-

11/10 Offering - During November 2010, the Company commenced an offering of units, and raised a total of $451,713 of investment proceeds. Three notes were converted to shares of common stock in 2011 and four notes were converted to common stock in 2012. As of December 31, 2017, we had $1,877,162 face value of notes outstanding, which includes the exchanged notes from our 2009 Offering. As of December 31, 2017, all of these notes have matured. We plan to work with each remaining note holder to exchange, convert or repay these notes.

(1)	Amount represents value of principal amount of notes and estimates for interest. These notes are with various individuals, carry one-yr terms and are convertible into shares of the Company's C/S at the noteholders option. The first of these notes came due in April 2010. If the noteholders do not convert their notes into shares of C/S, the notes will have to be repaid or refinanced.
(2)	Amount represents value of principal amount of note and interest. Final payment on this note was due Sept 17, 2016.
(3)	Amount represents value of principal amount of note and interest. Final payment on this note was due December 3, 2016.
(4)	Represents lease for office space. The original lease expired in Dec-2010 and can be extended for two year periods at expiring terms and conditions (current term ended Dec-2016).
(5)	Amount represents value of principal amount of note and interest. Final payment on this note is due April 12, 2017.

5/12 Offering - During May 2012, the Company commenced an offering of units and raised a total of $583,510 of investment proceeds. As of December 31, 2017, all of these notes are outstanding and have matured. We plan to work with each remaining note holder to exchange, convert or repay these notes.

~~Off~~2/14 Offering -~~Balance~~ ~~Sheet~~During ~~Arrangements~~February 2014, the Company commenced an offering of units and raised a total of $100,000 of investment proceeds in one note. As of December 31, 2017, this note is outstanding and has matured. We plan to work with the note holder to exchange, convert or repay this note.

~~We have no off-balance sheet arrangements. We have not entered into any transaction, agreement or other contractual arrangement with an unconsolidated entity under which we have:~~23

●Table aof ~~retained or contingent interest in assets transferred to the unconsolidated entity or similar arrangement that serves as credit;~~Contents

●2015 ~~liquidity~~Offering or- ~~market~~During ~~risk~~September ~~support~~2015, the Company commenced an offering of units and, as of December 31, 2017, raised a total of $85,000 of investment proceeds. As of December 31, 2017, this note is outstanding and has matured. We plan to ~~such~~work ~~entity~~with ~~for~~the ~~such~~note ~~assets;~~holder to exchange, convert or repay this note.

●WL anMeyer ~~obligation~~Legacy Trust (formerly CMS Acquisition, ~~including~~LLC) aNote ~~contingent~~Payable ~~obligation~~- In September 2010, ~~arising~~the ~~out~~Company issued a note in the amount of $100,000 (interest at 6.0% per annum through May 15, 2011 and 10.0% thereafter and secured by a ~~variable~~security interest in the PSC Patent) and issued warrants to purchase 2,000,000 shares of Common Stock at a price of $0.05 per share. The note is due the earlier of: (i) April 26, 2018 pursuant to an ~~unconsolidated~~amendment ~~entity~~on ~~that~~April 26, 2017 or (ii) the date on which $500,000 or more in the aggregate is ~~held~~raised by, the Company in future offerings. The warrants are exercisable at any time for five years from the date of issuance or reissuance. The value of these warrants has been recorded as a contra-balance amount discount with the note and ~~material~~was tofully amortized (interest expense) as of February 28, us2011 ~~where~~(the ~~such~~original ~~entity~~due ~~provides~~date). ~~financing~~As consideration in these amendments, ~~liquidity~~the Company has: (i) paid $30,000 ~~market~~towards ~~risk~~accrued orinterest ~~credit~~to ~~risk~~date ~~support~~and principal on the note, (ii) increased the interest rate to 10% as of May 15, or2011, ~~engages~~(iii) inre-dated ~~leasing~~the original warrants to April 26, ~~hedging~~2017, or(iv) ~~research~~issued new warrants for 300,000 shares of Common Stock with an exercise price of $0.05 and ~~development~~exercisable ~~services~~at any time until April 26, 2022, (v) issued new warrants for 150,000 shares of Common Stock with usan exercise price of $0.10 and exercisable at any time until April 26, 2022, and (vi) the Company has approved the assignment of the note by CMS Acquisition LLC to the WL Meyer Legacy Trust per the March 17, 2015 amendment. As of December 31, 2017, $72,696 face value of this note is outstanding.

~~Critical~~7.1.15 ~~Accounting~~Convertible ~~Estimates~~Note Payable - On July 1, 2015, one noteholder in our 2009 Offering exchanged two notes into this note. This new note carries a 6% annual interest, compounded annually, and is due in quarterly installment payments: the greater of $3,000 or 10% of all investment proceeds received during the calendar quarter preceding the quarterly installment payment. As of December 31, 2017, this note has been paid in full.

~~Long-Lived~~The ~~Assets~~following –is ~~Our~~a ~~acquisition~~summary ~~and~~of ~~merger~~warrants ~~activities~~issued ~~have resulted in aggregate licensing~~ and ~~patent~~outstanding ~~assets of approximately $2.2 million~~ as of ~~December~~the 31dates below, ~~2016.~~at Wethe ~~are~~exercise ~~required~~price ~~to conduct impairment tests of long-lived assets on an annual basis~~ and ~~between annual tests if an event occurs or circumstances change that would more likely than not reduce~~ the ~~fair~~number ~~value~~ of anshares ~~asset~~of ~~below~~Common ~~its~~Stock ~~carrying value. As we have not commenced commercial operations,~~ (these ~~assets~~warrants have not ~~yet~~ been ~~placed~~exercised inor ~~service.~~converted to common shares):

Deferred Taxes - We recognize deferred income tax liabilities and assets for the expected future tax consequences of events that have been recognized in the financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the differences between the financial statement carrying amounts and the tax basis of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. The Company has incurred no income taxes to date. Any benefits are the result of temporary differences (start-up costs, stock compensation and other items) and operating loss carryforwards. The difference between the expected income tax benefit and non-recognition of an income tax benefit in each period is the result of a valuation allowance applied to deferred tax assets. A valuation allowance in the same amount of the benefit has been provided to reduce the deferred tax asset, as realization of the asset is not assured.

	Exercise		As of December 31,
Warrants issued to:	Price		2017		2016		2015
Noteholders, 11/10 Offering	$	0.30		398,221		398,221		842,221
Noteholder in 2015 Offering	$	0.15		2,550,000		2,550,000		2,550,000
Investors in Subscription Agreements (a)	$	0.15		9,300,000		13,725,000		16,605,000
WL Meyer Legacy Trust	$	0.05		2,300,000		2,300,000		2,300,000
WL Meyer Legacy Trust	$	0.10		150,000		150,000		150,000
				14,698,221		19,123,221		22,447,221

~~Stock-Based~~(a) ~~Compensation~~Warrants -issued Weto ~~account~~investors ~~for~~under stock-based compensation in accordance with accounting guidance that requires measuring all stock-based compensation awards at fair value and recognizing an expense in the financial statements. We compensate certain employees, officers, directors and consultants with share-based payment awards and recognize compensation costs for these ~~awards~~Subscription ~~based~~Agreements oncan ~~their~~be ~~fair~~exercised ~~values~~anytime ~~and~~within ~~expense~~three isyears ~~recognized~~from ~~over~~date ~~the~~of ~~requisite service period~~Agreement. ~~The~~These ~~fair~~warrants ~~values~~expire ofat ~~certain~~various ~~awards~~dates ~~are~~from ~~estimated~~February on2018 ~~the~~to ~~grant~~April ~~date using the Black-Scholes-Merton option-pricing formula, which incorporates certain assumptions including the expected term of an award and expected stock price volatility~~2022.

25Summary of Cash Flow Activity

Convertible Notes Payable and Warrants – The Company has issued various Convertible Promissory Notes (“Notes”). These Notes may be converted at the option of the note holder into shares of the Company’s common stock. Additionally, these Notes carry warrants for shares of the Company’s common stock. These promissory notes have been recorded as debt (notes payable) in the financial statements, net of discounts, if any, for the conversion and warrant features. The discounts have been amortized on a straight-line basis over the term of each note.

	For the Years Ended December 31,
	2017			2016			2015
Net cash used by operating activities	$	(133,131	)	$	(179,619	)	$	(165,301	)
Net cash used by investing activities		-			-			-
Net cash provided by financing activities		135,000			177,170			168,224

~~Fair~~Net ~~Value~~cash ~~Measurement~~used -by Weoperating use fair value accounting and reporting to specify a hierarchy of valuation techniques based upon whether the inputs to those valuation techniques reflect assumptions other market participants would use based upon market data obtained from independent sources or reflect our own assumptions of market participant valuation. The hierarchy is broken down into three levels based on the reliability of the inputs as follows:activities

●During ~~Level~~2017, 12016 –and ~~Quoted~~2015, ~~prices~~cash inused ~~active~~by ~~markets~~operating ~~that~~activities ~~are~~was ~~unadjusted~~impacted ~~and~~primarily ~~accessible~~by at the ~~measurement~~net ~~date~~loss ~~for~~reduced ~~identical,~~by ~~unrestricted~~increases ~~assets~~in oraccrued interest and other accrued liabilities;.

● Level 2 – Quoted prices for identical assets and liabilities in markets that are not active, quoted prices for similar assets and liabilities in active markets, or financial instruments for which significant inputs are observable, either directly or indirectly; and24

●Table ~~Level~~of ~~3 – Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.~~Contents

AsNet ~~of and during the year ended December 31, 2016 and 2015, we utilized Level 1 inputs to determine the fair value of~~ cash ~~equivalents~~provided ~~and~~by wefinancing ~~utilized Level 2 inputs to determine the fair value of certain long-lived assets.~~activities

~~Restricted~~During ~~Stock Compensation – From time to time~~2017, wecash ~~issue~~provided ~~restricted~~by ~~Common~~financing ~~Stock~~activities towas ~~employees,~~primarily ~~directors,~~due ~~and~~from ~~consultants~~the ascontinuance ~~compensation. The cost~~ of ~~these~~our ~~grants~~Equity isOffering ~~recorded in general~~ and ~~administrative expense. The cost is determined using~~ the ~~amount~~issuance of ~~shares~~equity ~~granted~~and atnote apayables ~~discount to the market value on the date of the grant. The discount is applied~~ for a ~~Lack~~total of ~~Marketability due to: (i) shares issued are unregistered shares and subject to Rule 144 of the Securities Act~~$140,000, ~~(ii)~~offset ~~minimal~~by ~~trading~~note ~~activity~~payable inpayments ~~our shares, only about 1/3rd~~ of ~~which are registered and free-trading shares~~$5, ~~and (iii) the Company has yet to begin operations and has had no revenue~~000.

~~Contingent~~During ~~Liabilities – We are~~2016, ~~from~~cash ~~time~~provided toby ~~time,~~financing ~~subject~~activities towas ~~litigation~~primarily todue ~~our~~from ~~business. Assessments regarding~~ the ~~ultimate~~continuance ~~cost~~ of ~~lawsuits~~our ~~require~~Equity ~~judgments~~Offering ~~concerning~~and ~~matters such as~~ the ~~anticipated~~issuance ~~outcome~~ of ~~negotiations,~~equity ~~the number~~ and ~~cost~~a ofnote ~~pending~~payable ~~and~~for ~~future~~a ~~claims,~~total ~~and the impact~~ of ~~evidentiary~~$195,000, ~~requirements.~~offset Aby ~~significant~~note ~~amount~~payable ofpayments ~~judgment and use~~ of ~~estimates is required to quantify our ultimate exposure in these matters~~$17,377. ~~We regularly review the valuation of these liabilities and account for changes in circumstances for ongoing and emerging issues. The Company intends to defend itself vigorously in all litigation.~~

~~ITEM~~During ~~7A. Quantitative~~2015, cash provided by financing activities was primarily due from the continuance of our Equity Offering and ~~Qualitative~~the ~~Disclosures~~issuance ~~About~~of ~~Market~~a ~~Risk~~Convertible Note combining for a total of $185,000, offset by note payable payments of $14,500.

AsContractual ofObligations ~~December 31, 2016, all of our debt instruments (Notes Payable) carry fixed interest rates. We do not have any arrangements for borrowings under a credit facility. We currently have no operations~~ and ~~are not subject to any currency fluctuations or credit risk.~~Commitments

26In the table below, we set forth our obligations as of December 31, 2017. Some of the figures we include in this table are based on our estimates and assumptions about these obligations, including their durations, anticipated actions by third parties and other factors. The obligations we may pay in future periods may vary from those reflected in this table because of estimates or actions of third parties as disclosed in the notes to the table.

ITEM 8. Financial Statements and Supplemental Data

	Payments due by Period
	Total		Less than 1 year		1 to 3 years		4 to 5 years		More than 5 years
Convertible Notes (1)	$	3,964,297	$	3,964,297	$	-	$	-	$	-
WL Meyer Legacy Trust (CMS) Note (2)		125,063		125,063		-		-		-
Note Payable (Non-convertible) (3)		57,318		57,318		-		-		-
Note Payable (Non-convertible) (4)		38,888		38,888		-		-		-
Note Payable (Non-convertible) (5)		15,832		15,832		-		-		-
Note Payable (Non-convertible) (6)		25,304		25,304
Total contractual obligations	$	4,226,702	$	4,226,702	$	-	$	-	$	-

~~REPORT~~(1) OFAmount ~~INDEPENDENT~~represents ~~REGISTERED~~value ~~PUBLIC~~of ~~ACCOUNTING~~principal ~~FIRM~~amount of notes and estimates for interest. These notes are with various individuals, carry one-year terms and are convertible into shares of the Company's Common Stock at the noteholders option. The first of these notes came due in April 2010. If the noteholders do not convert their notes into shares of Common Stock, the notes will have to be repaid or refinanced. (2) Amount represents value of principal amount of note and interest. Final payment on this note is due April 26, 2018. (3) Amount represents value of principal amount of note and interest. Final payment on this note was due December 3, 2016. (3) Amount represents value of principal amount of note and interest. Final payment on this note was due April 12, 2017. (5) Amount represents value of principal amount of note and interest. Final payment on this note was due March 20, 2017. (6) Amount represents value of principal amount of note and interest. Final payment on this note is due October 18, 2018.

ToOff-Balance ~~the~~Sheet ~~Board~~Arrangements ~~of Directors and Stockholders of~~

~~CleanTech~~We ~~Biofuels,~~have ~~Inc~~no off-balance sheet arrangements. We have not entered into any transaction, agreement or other contractual arrangement with an unconsolidated entity under which we have:

~~St.~~● ~~Louis,~~a ~~Missouri~~retained or contingent interest in assets transferred to the unconsolidated entity or similar arrangement that serves as credit;

We● ~~have~~liquidity ~~audited~~or ~~the~~market ~~accompanying~~risk ~~consolidated~~support ~~balance~~to ~~sheets~~such ofentity ~~CleanTech Biofuels, Inc. and subsidiaries as of December 31, 2016 and 2015, and the related consolidated statements of operations, changes in stockholders’ equity, and cash flows~~ for ~~each~~such ofassets; the years in the three-year period ended December 31, 2016. CleanTech Biofuels Inc.’s management is responsible for these consolidated financial statements. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.or

We● ~~conducted~~an 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 consolidated financial statements are free of material misstatement. The Company and its subsidiaries are not required to haveobligation, ~~nor~~including ~~were~~a wecontingent ~~engaged to perform~~obligation, anarising ~~audit~~out of ~~their internal control over financial reporting. Our audit included consideration of internal control over financial reporting as~~ a ~~basis~~variable ~~for~~interest ~~designing audit procedures that are appropriate~~ in ~~the circumstances, but not for the purpose of expressing~~ an ~~opinion~~unconsolidated onentity ~~the~~that ~~effectiveness~~is ofheld ~~the~~by, ~~company’s~~and ~~internal~~material ~~control over financial reporting. Accordingly~~to, weus ~~express~~where no such ~~opinion.~~entity Anprovides ~~audit~~financing, ~~also includes examining~~liquidity, onmarket arisk ~~test~~or ~~basis,~~credit ~~evidence~~risk ~~supporting~~support ~~the~~to, ~~amounts~~or ~~and~~engages ~~disclosures~~ in ~~the~~leasing, ~~consolidated financial statements~~hedging, ~~assessing~~or ~~the~~research ~~accounting principles used~~ and ~~significant~~development ~~estimates~~services ~~made~~with ~~by management, as well as evaluating the overall financial statement presentation~~us. ~~We believe that our audits provide a reasonable basis for our opinion.~~

InCritical ~~our~~Accounting opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of CleanTech Biofuels, Inc. and subsidiaries as of December 31, 2016 and 2015, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2016, in conformity with accounting principles generally accepted in the United States of America.Estimates

~~The~~Long-Lived ~~accompanying~~Assets ~~consolidated~~– ~~financial~~Our ~~statements~~acquisition ~~have~~and ~~been~~merger ~~prepared~~activities ~~assuming~~have ~~that~~resulted ~~the~~in ~~Company~~aggregate licensing and ~~its~~patent ~~subsidiaries~~assets ~~will~~of ~~continue~~approximately $2.2 million as aof ~~going~~December ~~concern~~31, 2017. AsWe ~~discussed~~are inrequired ~~Note~~to 15conduct toimpairment ~~the~~tests ~~financial~~of ~~statements,~~long-lived ~~the~~assets ~~Company’s~~on ~~significant~~an ~~operating~~annual ~~losses~~basis and ~~recent~~between ~~inability~~annual totests ~~secure~~if ~~additional~~an ~~capital~~event tooccurs ~~implement~~or ~~its~~circumstances ~~business~~change ~~plan~~that ~~raise~~would ~~substantial~~more ~~doubt~~likely ~~about~~than ~~its~~not ~~ability~~reduce tothe ~~continue~~fair asvalue aof ~~going~~an ~~concern.~~asset ~~The~~below ~~consolidated~~its ~~financial~~carrying ~~statements~~value. doAs we have not ~~include~~commenced ~~any~~commercial ~~adjustments~~operations, ~~that~~these ~~might~~assets ~~result~~have ~~from~~not ~~the~~yet ~~outcome~~been ofplaced ~~this~~in ~~uncertainty~~service.

~~MILHOUSE & NEAL, LLP~~25

~~Certified~~Table ~~Public~~of ~~Accountants~~Contents

~~Maryland~~Deferred ~~Heights~~Taxes – We recognize deferred income tax liabilities and assets for the expected future tax consequences of events that have been recognized in the consolidated financial statements or tax returns. Under this method, ~~Missouri~~deferred tax liabilities and assets are determined based on the differences between the financial statement carrying amounts and the tax basis of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. The Company has incurred no income taxes to date. Any benefits are the result of temporary differences (start-up costs, stock compensation and other items) and operating loss carryforwards. The difference between the expected income tax benefit and non-recognition of an income tax benefit in each period is the result of a valuation allowance applied to deferred tax assets. A valuation allowance in the same amount of the benefit has been provided to reduce the deferred tax asset, as realization of the asset is not assured.

~~March~~Stock-Based 30Compensation – We account for stock-based compensation in accordance with accounting guidance that requires measuring all stock-based compensation awards at fair value and recognizing an expense in the consolidated financial statements. We compensate certain employees, ~~2017~~officers, directors and consultants with share-based payment awards and recognize compensation costs for these awards based on their fair values and expense is recognized over the requisite service period. The fair values of certain awards are estimated on the grant date using the Black-Scholes-Merton option-pricing formula, which incorporates certain assumptions including the expected term of an award and expected stock price volatility.

27Convertible Notes Payable and Warrants – The Company has issued various Convertible Promissory Notes (“Notes”). These Notes may be converted at the option of the note holder into shares of the Company’s common stock. Additionally, these Notes carry warrants for shares of the Company’s common stock. These promissory notes have been recorded as debt (notes payable) in the consolidated financial statements, net of discounts, if any, for the conversion and warrant features. The discounts have been amortized on a straight-line basis over the term of each note.

~~CLEANTECH~~Fair ~~BIOFUELS,~~Value ~~INC~~Measurement – We use fair value accounting and reporting to specify a hierarchy of valuation techniques based upon whether the inputs to those valuation techniques reflect assumptions other market participants would use based upon market data obtained from independent sources or reflect our own assumptions of market participant valuation. The hierarchy is broken down into three levels based on the reliability of the inputs as follows:

~~(formerly~~● ~~Alternative~~Level ~~Ethanol~~1 ~~Technologies~~– Quoted prices in active markets that are unadjusted and accessible at the measurement date for identical, ~~Inc.)~~unrestricted assets or liabilities;

~~CONSOLIDATED~~● ~~BALANCE~~Level ~~SHEETS~~2 – Quoted prices for identical assets and liabilities in markets that are not active, quoted prices for similar assets and liabilities in active markets, or financial instruments for which significant inputs are observable, either directly or indirectly; and

	December 31,			December 31,
	2016			2015
ASSETS
Current Assets:
Cash and cash equivalents	$	636		$	3,085
Prepaids and other current assets		29,119			38,666
		29,755			41,751
Property and equipment, net		-			-
Non-Current Assets:
Technology license		1,569,250			1,569,250
Patents		600,000			600,000
Intangibles		50,914			-
Goodwill		26,582			-
Total Assets	$	2,276,501		$	2,211,001
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
Accounts payable	$	421,839		$	399,297
Accrued interest		958,825			741,139
Accrued payroll and professional fees		1,593,892			1,359,257
Notes payable, net		3,008,158			2,852,447
Total Current Liabilities		5,982,714			5,352,140
Notes Payable - Long-Term		-			85,000
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock, $0.001 par value; 10,000,000 authorized shares; no shares issued or outstanding		-			-
Common stock, $0.001 par value; 240,000,000 authorized shares; 94,188,413 and 87,488,413 shares issued and outstanding at December 31, 2016 and 2015, respectively		94,188			87,488
Minority Interest		505			-
Additional paid-in capital		7,380,114			7,178,514
Notes receivable - restricted common stock		(94,884	)		(126,699	)
Accumulated deficit		(11,086,136	)		(10,365,442	)
Total Stockholders' Equity (Deficit)		(3,706,213	)		(3,226,139	)
Total Liabilities and Stockholders' Equity (Deficit)	$	2,276,501		$	2,211,001

●

Level 3 – Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

~~The~~As ~~accompanying~~of ~~notes~~and ~~are~~during anthe ~~integral~~years ~~part~~ended December 31, 2017 and 2016, we utilized Level 1 inputs to determine the fair value of ~~these~~cash ~~financial~~equivalents ~~statements~~and we utilized Level 2 inputs to determine the fair value of certain long-lived assets.

28Restricted Stock Compensation – From time to time, we issue restricted Common Stock to employees, directors, and consultants as compensation. The cost of these grants is recorded in general and administrative expense. The cost is determined using the number of shares granted at a discount to the market value on the date of the grant. The discount is applied for a Lack of Marketability due to: (i) shares issued are unregistered shares and subject to Rule 144 of the Securities Act, (ii) minimal trading activity in our shares, only about 1/3rd of which are registered and free-trading shares, and (iii) the Company has yet to begin operations and has had no revenue.

~~CLEANTECH~~Contingent ~~BIOFUELS~~Liabilities – We are, ~~INC~~from time to time, subject to litigation to our business. Assessments regarding the ultimate cost of lawsuits require judgments concerning matters such as the anticipated outcome of negotiations, the number and cost of pending and future claims, and the impact of evidentiary requirements. A significant amount of judgment and use of estimates is required to quantify our ultimate exposure in these matters. We regularly review the valuation of these liabilities and account for changes in circumstances for ongoing and emerging issues. The Company intends to defend itself vigorously in all litigation.

~~(formerly~~ITEM ~~Alternative~~7A. ~~Ethanol~~Quantitative ~~Technologies,~~and ~~Inc.)~~Qualitative Disclosures About Market Risk

~~CONSOLIDATED~~As ~~STATEMENTS~~of OFDecember ~~OPERATIONS~~31, 2017, all of our debt instruments (Notes Payable) carry fixed interest rates. We do not have any arrangements for borrowings under a credit facility. We currently have no operations and are not subject to any currency fluctuations or credit risk.

	Years ended December 31,
	2016		2015			2014
Costs and expenses:
General and administrative	$	394,709	$	363,933		$	425,842
Professional fees		91,402		81,107			92,661
Total		486,111		445,040			518,503
Other expense (income):
Interest expense		225,268		206,728			196,432
Interest income, net of accrued interest written-off		9,315		(1,672	)		(3,076	)
Total		234,583		205,056			193,356
Income tax benefit		-		-			-
Net loss	$	720,694	$	650,096		$	711,859
Basic and diluted net loss per common share	$	0.01	$	0.01		$	0.01
Weighted average common shares outstanding		92,817,580		87,292,580			83,492,089

~~The~~Table ~~accompanying notes are an integral part~~ of ~~these financial statements~~Contents

29ITEM 8. Consolidated Financial Statements and Supplemental Data

~~CLEANTECH~~REPORT ~~BIOFUELS,~~OF ~~INC.~~INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

~~(formerly~~To ~~Alternative~~the ~~Ethanol~~Board ~~Technologies,~~of ~~Inc.)~~Directors and Stockholders of

~~Consolidated~~CleanTech ~~Statements~~Biofuels, ofIn ~~Changes in Stockholders' Equity (Deficit)~~c.

												Notes Rec -
							Additional					restricted
	Common Stock						Paid-in			Minority		common			Accumulated
	Shares			Amount			Capital			Interest		stock			deficit
Balances at December 31, 2013		78,546,647			$78,547			$6,781,286			$-		$(151,951	)		$(9,003,487	)
Issuance of restricted shares to consultant in January at $0.012/share		500,000			500			5,500			-		-			-
Issuance of restricted shares to investors during year at $0.10/share		2,475,000			2,475			245,025			-		-			-
Issuance of restricted shares to certain board members and an employee in April at $0.008/share		4,250,000			4,250			29,750			-		-			-
Expiration of Note Receivable in September at $0.10/share		(150,000	)		(150	)		(14,850	)		-		20,054			-
Conversion of Convertible Note in October at $0.08/share		516,766			516			40,825			-
Interest on Notes Receivable		-			-			-			-		(8,130	)		-
Stock-based compensation		-			-			2,128			-		-			-
Net loss		-			-			-			-		-			(711,859	)
Balances at December 31, 2014		86,138,413			86,138			7,089,664					(140,027	)		(9,715,346	)
Issuance of restricted shares to employee in January at $0.01/share		500,000			500			4,700			-		-			-
Issuance of restricted shares to investors during year at $0.10/share		1,000,000			1,000			99,000			-		-			-
Expiration of Note Receivable in February at $0.10/share		(150,000	)		(150	)		(14,850	)		-		20,049			-
Interest on Notes Receivable		-			-			-			-		(6,721	)		-
Net loss		-			-			-			-		-			(650,096	)
Balances at December 31, 2015		87,488,413			87,488			7,178,514			-		(126,699	)		(10,365,442	)
Issuance of restricted shares to investors at $0.10/share		1,100,000			1,100			108,900			-		-			-
Issuance of restricted shares to BOoard of Directors & mgmt. at $0.01/share in February		4,000,000			4,000			48,800			-		-			-
Issuance of restricted shares for Van Keuren acquisition at $0.05/share in June		1,000,000			1,000			49,000			505		-			-
Note Receivable expired/Shares forfeited in August at $0.10/share		(150,000	)		(150	)		(22,350	)		-		38,049			-
Issuance of restricted shares to consultant at $0.024/share in September		750,000			750			17,250			-		-			-
Interest on Notes Receivable		-			-			-			-		(6,234)			-
Net loss		-			-			-			-		-			(720,694	)
Balances at December 31, 2016		94,188,413			$94,188			$7,380,114			$505		$(94,884	)		$(11,086,136	)

St. Louis, Missouri

~~The~~Opinion ~~accompanying notes are an integral part~~ of ~~these~~the ~~financial~~Financial ~~statements.~~Statements

30We have audited the accompanying consolidated balance sheets of CleanTech Biofuels, Inc. and subsidiaries (the Company) as of December 31, 2017 and 2016, and the related consolidated statements of operations, changes in stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2017 and the related notes [and schedules] (collectively referred to as the “financial statements”). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of CleanTech Biofuels, Inc. and subsidiaries as of December 31, 2017 and 2016, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2017, in conformity with accounting principles generally accepted in the United States of America.

~~CLEANTECH~~Going ~~BIOFUELS, INC.~~Concern

~~(formerly~~The ~~Alternative~~accompanying ~~Ethanol~~consolidated ~~Technologies~~financial statements have been prepared assuming that the Company and its subsidiaries will continue as a going concern. As discussed in Note 15 to the financial statements, ~~Inc~~the Company’s significant operating losses and recent inability to secure additional capital to implement its business plan raise substantial doubt about its ability to continue as a going concern.) The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

~~CONSOLIDATED~~Basis ~~STATEMENTS~~for ~~OF CASH FLOWS~~Opinion

	Years Ended December 31,
Operating Activities	2016			2015			2014
Net loss applicable to common stockholders	$	(720,694	)	$	(650,096	)	$	(711,859	)
Adjustments to reconcile net loss applicable to common stockholders to net cash used by operating activities:
Items that did not use (provide) cash:
Depreciation		-			-			-
Interest income		9,315			(1,672	)		(3,076	)
Share-based compensation expense		-			-			2,128
Issuance of restricted common stock		70,800			5,200			40,000
Changes in operating assets and liabilities that provided (used) cash, net:
Prepaids and other current assets		10,000			2,000			600
Accounts payable		22,542			7,300			(6,654	)
Other assets and other liabilities		220,774			205,950			195,712
Accrued liabilities		207,644			266,017			132,947
Net cash used by operating activities		(179,619	)		(165,301	)		(350,202	)
Cash Flows Provided (Used) by Investing Activities
Expenditures for equipment		-			-			-
Net cash used by investing activities		-			-			-
Cash Flows Provided (Used) by Financing Activities
Advances - related parties		(453	)		(2,276	)		2,461
Issuance of Convertible Notes Payable		-			85,000			100,000
Issuance of Note Payable		85,000			-			-
Payments on Notes Payable		(17,377	)		(14,500	)		-
Sale of common stock		110,000			100,000			247,500
Net cash provided by financing activities		177,170			168,224			349,961
Net (decrease) increase in cash and cash equivalents		(2,449	)		2,923			(241	)
Cash and cash equivalents at beginning of period		3,085			162			403
Cash and cash equivalents at end of period	$	636		$	3,085		$	162
Supplemental disclosure of cash flow information:
Cash paid for interest	$	3,484		$	777		$	721
Supplemental disclosure of noncash investing and financing activities:
Common stock issued to consultant, directors, and employee	$	70,800		$	5,200		$	40,000
Common stock issued for acquisition of Van Keuren		50,000			-			-
Common stock issued for convertible notes converted	$	-		$	-		$	41,341
Common stock released from escrow for acquisition of Biomass	$	-		$	-		$	-

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The ~~accompanying~~Company ~~notes~~and its subsidiaries are not required to have, nor were we engaged to perform, an ~~integral~~audit of their internal control over financial reporting. As part of ~~these~~our audits we are required to obtain an understanding of internal control over financial ~~statements~~reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

31Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement

~~CLEANTECH~~presentation. We ~~BIOFUELS,~~believe ~~INC~~that our audits provide a reasonable basis for our opinion.

~~NOTES~~MILHOUSE TO& ~~CONSOLIDATED~~NEAL, ~~FINANCIAL STATEMENTS~~LLP

~~Note~~Certified 1Public ~~– Organization and Business~~Accountants

~~Alternative~~We ~~Ethanol~~have ~~Technologies,~~served Inc. (the “Company”), was incorporated in Delaware on December 20, 1996. Effective August 2, 2007, the Company changed its name to CleanTech Biofuels, Inc. Except where otherwise noted, the words “we,” “us,” “our,” and similar terms, as ~~well as “CleanTech” or~~ the “Company~~,” refer to CleanTech Biofuels, Inc. and its~~’s ~~subsidiaries,~~auditor ~~collectively.~~since 2010

OnMaryland ~~March 27~~Heights, 2007, the Company acquired SRS Energy, Inc., a Delaware corporation (“SRS Energy”), pursuant to an Agreement and Plan of Merger and Reorganization. In accordance with the merger agreement, SRS Acquisition Sub, Inc., a Delaware corporation and wholly-owned subsidiary of the Company, merged with and into SRS Energy. The merger was consummated on May 31, 2007 and resulted in SRS Energy becoming a wholly-owned subsidiary of the Company. As a result of the merger, the stockholders of SRS Energy surrendered all of their issued and outstanding common stock and received shares of the Company’s common stock, $.001 par value per share (“Common Stock”). The former parent of SRS Energy, Supercritical Recovery Systems, Inc., immediately prior to the merger, distributed 78.8% of its 96% ownership in SRS Energy to its shareholders on a pro rata basis. For accounting purposes, because the Company had been a public shell company prior to the merger, the merger was treated as an acquisition of the Company and a recapitalization of SRS Energy. Missouri

~~The~~March Company is in its development stage and has been engaged in technology development and pre-operational activities since its formation. The Company is currently seeking outside sources of funding to design and build a commercial biomass recovery plant to provide biomass feedstock for customer evaluation and trial purchases. Initially30, the biomass feedstock output is expected to be sold or provided to electric utilities, power and steam producers, and biofuel and chemical research firms for evaluation. In addition to research and development, the Company is also working towards licensing and/or developing potential commercial projects. These projects plan to focus on cleaning and separating municipal solid waste (also referred to as MSW) into its component parts in order to obtain: (i) a homogenous feedstock of cellulosic biomass for producing energy and other chemical products and (ii) recyclable products (metals, plastics, aluminum). 2018

The Company has no operating history as a producer of biomass or energy sources and has not constructed any plants to date. We have no revenues and will be required to secure outside funding in order to execute our business plan and commercialize our products. Our current cash is not sufficient to fund our current operations. Our liabilities are substantially greater than our current available funds and current assets. Although we continue to seek additional financing through the sale of additional equity, various government funding opportunities and/or possibly through strategic alliances with larger energy or waste management companies, we have not had recent success securing meaningful amounts of financing. The Company will require substantial additional financing to implement its business plan and it may be unable to obtain the capital required to do so. If we are not able to immediately and successfully raise additional capital and/or achieve profitability or positive cash flow, we may not be able to continue operations.27

~~Note~~Table ~~2 – Summary~~ of ~~Significant Accounting Policies~~Contents

~~Use~~CLEANTECH ofBIOFUELS, Estimates - The preparation of financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notesINC. ~~Management~~(formerly ~~makes~~Alternative ~~these~~Ethanol ~~estimates using the best information available at the time the estimates are made; however~~Technologies, ~~actual~~Inc.) ~~results~~CONSOLIDATED ~~could~~BALANCE ~~differ materially from those estimates.~~ SHEETS

Consolidation - The financial statements include the accounts of CleanTech Biofuels, Inc. and its wholly owned subsidiaries, SRS Energy, In., CTB Licensing, LLC and Van Keuren LLC. All significant intercompany transactions and balances are eliminated in consolidation.

	December 31,			December 31,
	2017			2016
ASSETS
Current Assets:
Cash and cash equivalents	$	2,505		$	636
Prepaids and other current assets		64,718			29,119
		67,223			29,755

Property and equipment, net		-			-

Non-Current Assets:
Technology license		1,569,250			1,569,250
Patents		600,000			600,000
Intangibles		50,914			50,914
Goodwill		26,582			26,582
Total Assets	$	2,313,969		$	2,276,501

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
Accounts payable	$	429,699		$	421,839
Accrued interest		1,194,149			958,825
Accrued payroll and professional fees		1,784,870			1,593,892
Notes payable, net		3,032,553			3,008,158
Total Current Liabilities		6,441,271			5,982,714

Notes Payable - Long-Term		-			-

STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock, $0.001 par value; 10,000,000 authorized shares; no shares issued or outstanding		-			-
Common stock, $0.001 par value; 240,000,000 authorized shares; 97,633,409 and 94,188,413 shares issued and outstanding at December 31, 2017 and 2016, respectively		97,633			94,188
Minority Interest		505			505
Additional paid-in capital		7,536,257			7,380,114
Notes receivable - restricted common stock		(66,288	)		(94,884	)
Accumulated deficit		(11,695,409	)		(11,086,136	)
Total Stockholders' Equity (Deficit)		(4,127,302	)		(3,706,213	)
Total Liabilities and Stockholders' Equity (Deficit)	$	2,313,969		$	2,276,501

~~Research~~The ~~and~~accompanying ~~Development~~notes ~~Costs~~are -an ~~Research~~integral ~~and~~part ~~development expenditures (which are comprised~~ of ~~costs~~these ~~incurred~~consolidated infinancial performing research and development activities including wages and associated employee benefits, facilities and overhead costs), including payments to collaborative research partners are expensed as incurredstatements.

3228

~~Impairment~~Table of Long-Lived Assets - The Company continually evaluates whether events and circumstances have occurred that indicate the remaining estimated useful life of long-lived assets may warrant revision or that the remaining balance may not be recoverable primarily through reviewing changes in business plans and use of such assets. When factors indicate that an asset should be evaluated for possible impairment, the Company reviews long-lived assets to assess future use or recoverability of such asset. Impairments are recognized in earnings to the extent that the carrying value exceeds fair value. Contents

~~Intellectual~~CLEANTECH ~~Property - Intellectual property~~BIOFUELS, ~~consisting~~INC. of(formerly ~~our~~Alternative ~~licensed/owned~~Ethanol ~~patents and other proprietary technology~~Technologies, ~~are stated at cost and will be amortized on a straight-line basis over their economic estimated useful life~~Inc.) ~~Costs~~CONSOLIDATED ~~and~~STATEMENTS ~~expenses~~OF incurred in creating intellectual property are expensed as incurred. The cost of purchased intellectual property is capitalized. Amortization of these assets has not yet begun as the assets have not been placed in service as we have not yet commenced operations.OPERATIONS

Property, plant and equipment - Newly acquired property, plant and equipment are carried at cost less accumulated depreciation. Depreciation is provided over the estimated useful lives of the assets, on the straight-line method for financial reporting purposes. Expenditures for maintenance and repairs are charged to expense as incurred.

Years ended December 31,

2017

2016

2015

Costs and expenses:

General and administrative

243,971

394,709

363,933

Professional fees

117,214

91,402

81,107

361,185

486,111

445,040

Other expense (income):

Interest expense

241,107

225,268

206,728

Interest income, net of accrued interest written-off

6,981

9,315

(1,672

)

248,088

234,583

205,056

Income tax benefit

Net loss

609,273

720,694

650,096

Basic and diluted net loss per common share

0.01

Weighted average common shares outstanding

96,001,745

92,817,580

87,292,580

~~Income Taxes -~~ The ~~Company~~accompanying ~~accounts~~notes ~~for~~are ~~income~~an ~~taxes~~integral inpart ~~accordance with accounting guidance, which requires the Company to provide a net deferred tax asset/liability equal to the expected future tax benefit/expense~~ of ~~temporary~~these ~~reporting~~consolidated ~~differences between~~ financial ~~statement and tax accounting methods and any available operating loss or tax credit carry forwards~~statements. The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will either be deductible or taxable when the assets and liabilities are recovered or settled. Deferred taxes also are recognized for operating losses and tax credits that are available to offset future taxable income.

The standards on accounting for uncertainty in income taxes (incorporated into the FASB Accounting Standards Codification (Codification) Topic 740, Income Taxes) clarify the accounting and recognition for income tax positions taken or expected to be taken in the Company’s income tax returns. The Company’s income tax filings are subject to audit by various taxing authorities. The Company’s open audit periods are 2013-2016. In evaluating the Company’s tax provisions and accruals, future taxable income, and the reversal of temporary differences, interpretations and tax planning strategies are considered. The Company believes their estimates are appropriate based on facts and circumstances.29

~~Convertible~~Table ~~Notes Payable and Warrants – The Company has issued various Convertible Promissory Notes (the “Notes”). These Notes may be converted at the option~~ of the note holder into shares of the Company’s common stock. Additionally, some of these Notes carry warrants for shares of the Company’s common stock. These Notes have been recorded as debt (notes payable) in the financial statements, net of discounts, if any, for the conversion and warrant features. The discounts have been amortized on a straight-line basis over the term of each note.Contents

~~Stock-based~~CLEANTECH ~~compensation~~BIOFUELS, - The Company accounts for stock-based compensation in accordance with accounting guidance that requires measuring all stock-based compensation awards at fair value and recognizing an expense in the financial statementsINC. ~~In March 2007, the Company adopted the 2007 Stock Option Plan~~ (~~“Stock~~formerly ~~Plan”)~~Alternative ~~for~~Ethanol ~~its employees~~Technologies, ~~officers, directors and consultants~~Inc. ~~The~~) ~~Company~~Consolidated ~~has~~Statements ~~reserved a maximum~~ of ~~14,000,000~~Changes shares of common stock to be issued for stock options or shares of restricted stock under the Stock Plan. We compensate certain employees, officers, directors and consultants with stock-based payment awards and recognize compensation costs for these awards based on their fair values and expense is recognized over the requisite service period. The fair values of certain awards are estimated on the grant date using the Black-Scholes-Merton option-pricing formula, which incorporates certain assumptions including the expected term of an award and expected stock price volatility. Our key assumptions are described in ~~further~~Stockholders' ~~detail~~Equity ~~in the Share-Based Payments Note to the Consolidated Financial Statements.~~ (Deficit)

Fair Value Measurement - We use fair value accounting and reporting to specify a hierarchy of valuation techniques based upon whether the inputs to those valuation techniques reflect assumptions other market participants would use based upon market data obtained from independent sources or reflect our own assumptions of market participant valuation. The hierarchy is broken down into three levels based on the reliability of the inputs as follows:

Notes Rec -

Additional

restricted

Common Stock

Paid-in

Minority

common

Accumulated

Shares

Amount

Capital

Interest

stock

deficit

Balances at December 31, 2014

86,138,413

86,138

7,089,664

(140,027

)

(9,715,346

)

Issuance of restricted shares to employee in January at $0.01/share

500,000

500

4,700

Issuance of restricted shares to investors during year at $0.10/share

1,000,000

1,000

99,000

Note Receivable expired - Shares forfeited in February at $0.10/share

(150,000

)

(150

)

(14,850

)

20,049

Interest on Notes Receivable

(6,721

)

Net loss

(650,096

)

Balances at December 31, 2015

87,488,413

87,488

7,178,514

(126,699

)

(10,365,442

)

Issuance of restricted shares to investors at $0.10/share

1,100,000

1,100

108,900

Issuance of restricted shares to Board of Directors & mgmt. at $0.01/share in February

4,000,000

4,000

48,800

Issuance of restricted shares for Van Keuren acquisition at $0.05/share in June

1,000,000

1,000

49,000

505

Note Receivable expired - Shares forfeited in August at $0.10/share

(150,000

)

(150

)

(22,350

)

38,049

Issuance of restricted shares to consultant at $0.024/share in September

750,000

750

17,250

Interest on Notes Receivable

(6,234

)

Net loss

(720,694

)

Balances at December 31, 2016

94,188,413

94,188

7,380,114

505

(94,884

)

(11,086,136

)

Issuance of restricted shares to investors at $0.10/share

1,000,000

1,000

99,000

Issuance of restricted shares to consultant at $0.032/share in May

100,000

100

3,100

Issuance of restricted shares to consultant at $0.028/share in July

200,000

200

5,400

Issuance of restricted shares to consultant at $0.028/share in August

2,000,000

2,000

54,000

Conversion of Note Payable at $.08/share in September

204,996

205

16,183

Note Receivable expired - Shares forfeited in December at $0.36/share

(60,000

)

(60

)

(21,540

)

33,505

Interest on Notes Receivable

(4,909

)

Net loss

(609,273

)

Balances at December 31, 2017

97,633,409

97,633

7,536,257

505

(66,288

)

(11,695,409

)

●The ~~Level~~accompanying 1notes ~~– Quoted prices in active markets that~~ are ~~unadjusted~~an ~~and~~integral ~~accessible~~part atof ~~the~~these ~~measurement~~consolidated ~~date~~financial ~~for identical, unrestricted assets or liabilities;~~statements.

●Table ~~Level~~of ~~3 – Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.~~Contents

33CLEANTECH BIOFUELS, INC. (formerly Alternative Ethanol Technologies, Inc.) CONSOLIDATED STATEMENTS OF CASH FLOWS

As of December 31, 2016 and 2015, and during the years ended December 31, 2016, 2015, and 2014, we utilized Level 1 inputs to determine the fair value of cash equivalents and we utilized Level 2 inputs to determine the fair value of certain long-lived assets.

Years Ended December 31,

2017

2016

2015

Operating Activities

Net loss applicable to common stockholders

(609,273

)

(720,694

)

(650,096

)

Adjustments to reconcile net loss applicable to common stockholders to net cash used by operating activities:

Items that did not use (provide) cash:

Depreciation

Interest income

(4,909

)

9,315

(1,672

)

Share-based compensation expense

Issuance of restricted common stock

64,800

70,800

5,200

Changes in operating assets and liabilities that provided (used) cash, net:

Prepaids and other current assets

(35,599

)

10,000

2,000

Accounts payable

7,860

22,542

7,300

Other assets and other liabilities

253,012

220,774

205,950

Accrued liabilities

190,978

207,644

266,017

Net cash used by operating activities

(133,131

)

(179,619

)

(165,301

)

Cash Flows Provided (Used) by Investing Activities

Expenditures for equipment

Net cash used by investing activities

Cash Flows Provided (Used) by Financing Activities

Advances - related parties

(453

)

(2,276

)

Issuance of Convertible Notes Payable

85,000

Issuance of Note Payable

40,000

85,000

Payments on Notes Payable

(5,000

)

(17,377

)

(14,500

)

Sale of common stock

100,000

110,000

100,000

Net cash provided by financing activities

135,000

177,170

168,224

Net (decrease) increase in cash and cash equivalents

1,869

(2,449

)

2,923

Cash and cash equivalents at beginning of period

636

3,085

162

Cash and cash equivalents at end of period

2,505

636

3,085

Supplemental disclosure of cash flow information:

Cash paid for interest

3,484

777

Supplemental disclosure of noncash investing and financing activities:

Common stock issued to consultant, directors, and employee

64,800

70,800

5,200

Common stock issued for acquisition of Van Keuren

50,000

Common stock issued for convertible notes converted

16,388

~~Restricted Stock Compensation – From time to time, we issue restricted Common Stock to employees, directors, and consultants as compensation.~~ The ~~cost~~accompanying ofnotes these grants is recorded in general and administrative expense. The cost is determined using the amount of shares granted at a discount to the market value on the date of the grant. The discount is applied for a Lack of Marketability due to: (i) shares issued are ~~unregistered~~an ~~shares~~integral ~~and~~part ~~subject to Rule 144~~ of ~~the~~these ~~Securities~~consolidated ~~Act~~financial ~~of 1933, (ii) minimal trading activity in our shares, only about 1/3rd of which are registered and free-trading shares, and (iii) the Company has yet to begin operations and has had no revenue~~statements. ~~The Company issued shares in 2014, 2015 and 2016 as detailed further in Note 10.~~

Contingent Liabilities – We are, from time to time, subject to litigation to our business. Assessments regarding the ultimate cost of lawsuits require judgments concerning matters such as the anticipated outcome of negotiations, the number and cost of pending and future claims, and the impact of evidentiary requirements. A significant amount of judgment and use of estimates is required to quantify our ultimate exposure in these matters. We regularly review the valuation of these liabilities and account for changes in circumstances for ongoing and emerging issues. The Company intends to defend itself vigorously in all litigation. 31

~~Dividends~~Table - We have no material operating history and therefore have had no earnings to distribute to stockholders. We currently intend to retain our earnings, if any, and reinvest them in the development and growth of ~~our business and do not foresee payment of a dividend in any upcoming fiscal period.~~ Contents

~~Net~~ CLEANTECH Loss per Common Share - The Company calculates basic loss per share ("EPS") and diluted EPS. Basic loss per share is computed as net loss divided by the weighted average number of common shares outstanding for the period. Diluted EPS would reflect the potential dilution that could occur from common shares issuable through stock optionsBIOFUELS, ~~warrants, and other convertible securities~~INC. As of December 31, 2016, 2015 and 2014, the Company had options, warrants and convertible notes to purchase an aggregate of approximately 86 million, 87 million and 78 million shares of common stock, respectively, that were excluded from the calculation of diluted loss per share as their effects would have been anti-dilutive. Therefore, the Company only presents basic loss per share on the face of the statements of operations and in its disclosure of unaudited quarterly financial data in Note 14.

~~Recent~~NOTES ~~Accounting~~TO ~~Pronouncements~~CONSOLIDATED –FINANCIAL In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") No. 2016-09, “Compensation-Stock Compensation.” This ASU simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The standard is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted. We are currently assessing the impact the guidance will have on our consolidated financial statements and related disclosures. STATEMENTS

InNote ~~February~~1 ~~2016,~~– ~~the~~Organization ~~FASB issued ASU No. 2016-02, “Leases.” This ASU requires lessees to recognize most leases on their balance sheets for the rights~~ and obligations created by those leases. The guidance requires enhanced disclosures regarding the amount, timing, and uncertainty of cash flows arising from leases and will be effective for interim and annual periods beginning after December 15, 2018. Early adoption is permitted. The ASU requires adoption based upon a modified retrospective approach. We are currently assessing the impact the guidance will have on our consolidated financial statements and related disclosures. Business

InAlternative ~~November~~Ethanol ~~2015~~Technologies, Inc. (the ~~FASB issued ASU 2015-17,~~ “~~Balance Sheet Classification of Deferred Taxes.~~Company”), ~~The~~was ~~guidance~~incorporated ~~requires~~in ~~that~~Delaware ~~all~~on December ~~deferred~~20, ~~tax~~1996. ~~assets~~Effective August ~~and liabilities~~2, ~~along with any related valuation allowance~~2007, bethe ~~classified~~Company aschanged ~~noncurrent~~its onname ~~the~~to ~~balance~~CleanTech ~~sheet~~Biofuels, Inc. ~~The~~Except ~~standard~~where isotherwise ~~effective~~noted, ~~for~~the ~~annual~~words ~~periods~~“we,” ~~beginning after December 15~~“us,” ~~2016~~“our,” and ~~interim~~similar ~~periods~~terms, ~~within~~as ~~the~~well ~~fiscal~~as ~~years.~~“CleanTech” ~~Early~~or ~~adoption is permitted. We are currently assessing~~ the ~~impact~~“Company,” ~~the~~refer ~~guidance~~to ~~will~~CleanTech ~~have~~Biofuels, onInc. ~~our consolidated financial statements~~ and ~~related~~its’ ~~disclosures~~subsidiaries, collectively.

InOn March ~~April~~27, ~~2015~~2007, the ~~Financial~~Company ~~Accounting~~acquired ~~Standards~~SRS ~~Board~~Energy, Inc., a Delaware corporation (“~~FASB~~SRS Energy”), ~~issued~~pursuant ~~Accounting~~to ~~Standards~~an ~~Update~~Agreement ~~("ASU")~~and NoPlan of Merger and Reorganization. ~~2015-03,~~In ~~"Simplifying~~accordance with the ~~Presentation~~merger ofagreement, ~~Debt~~SRS ~~Issuance~~Acquisition ~~Costs~~Sub, Inc.", ~~This~~a ~~ASU~~Delaware ~~amends~~corporation ~~existing~~and ~~guidance~~wholly-owned tosubsidiary ~~require~~of the ~~presentation~~Company, ofmerged ~~debt~~with ~~issuance~~and ~~costs~~into inSRS ~~the~~Energy. ~~balance~~The ~~sheet~~merger aswas consummated on May 31, 2007 and resulted in SRS Energy becoming a ~~deduction~~wholly-owned ~~from~~subsidiary of the ~~carrying~~Company. ~~amount~~As a result of the ~~related~~merger, ~~debt~~the ~~liability~~stockholders ~~instead~~of SRS Energy surrendered all of atheir ~~deferred~~issued ~~charge.~~and Itoutstanding iscommon ~~effective~~stock ~~for~~and ~~annual~~received ~~reporting~~shares ~~periods~~of ~~beginning~~the ~~after~~Company’s ~~December~~common 15stock, ~~2015,~~$.001 ~~but~~par ~~early~~value ~~adoption~~per isshare ~~permitted~~(“Common Stock”). The ~~adoption~~former parent of ~~this~~SRS ~~guidance did~~Energy, ~~not~~Supercritical ~~have~~Recovery aSystems, ~~material~~Inc., ~~impact~~immediately prior to the merger, distributed 78.8% of its 96% ownership in SRS Energy to its shareholders on ~~our~~a ~~consolidated~~pro ~~financial~~rata ~~statements~~basis. For accounting purposes, because the Company had been a public shell company prior to the merger, the merger was treated as an acquisition of the Company and ~~related~~a ~~disclosures~~recapitalization of SRS Energy.

InThe ~~August~~Company ~~2014,~~is ~~the~~in ~~FASB~~its ~~issued~~development ~~ASU~~stage ~~No.~~and ~~2014-15,~~has ~~“Presentation~~been ofengaged ~~Financial~~in ~~Statements~~technology –development ~~Going~~and ~~Concern~~pre-operational ~~(Subtopic~~activities ~~205-40)~~since –its ~~Disclosure~~formation. ofThe ~~Uncertainties~~Company ~~about~~is ancurrently ~~Entity’s~~seeking ~~ability~~outside sources of funding to ~~continue~~design asand build a ~~Going~~commercial ~~Concern.”~~biomass ~~This~~recovery ~~ASU~~plant ~~provides~~to ~~guidance~~provide onbiomass ~~determining~~feedstock ~~when~~for customer evaluation and ~~how~~trial topurchases. ~~disclose~~Initially, ~~going-concern~~the ~~uncertainties~~biomass infeedstock ~~the~~output ~~financial~~is ~~statements~~expected ~~and~~to ~~requires~~be ~~management~~sold or provided to ~~perform~~electric ~~interim~~utilities, power and ~~annual~~steam ~~assessments~~producers, ofand anbiofuel ~~entity’s~~and ~~ability~~chemical toresearch ~~continue~~firms asfor aevaluation. ~~going~~In ~~concern~~addition ~~within~~to ~~one~~research ~~year~~and ofdevelopment, the ~~date~~Company ~~the~~is ~~financial~~also ~~statements~~working ~~are~~towards ~~issued.~~licensing Anand/or ~~entity~~developing ~~must~~potential ~~provide~~commercial ~~certain~~projects. ~~disclosures~~These ifprojects ~~conditions~~plan orto ~~events~~focus ~~raise~~on ~~substantial~~cleaning ~~doubt~~and ~~about~~separating ~~the~~municipal ~~entity’s~~solid ~~ability~~waste to(also ~~continue~~referred to as aMSW) ~~going~~into ~~concern.~~its ~~This~~component ~~new~~parts ~~guidance~~in isorder ~~effective~~to ~~for~~obtain: ~~annual~~(i) ~~periods~~a ~~ending~~homogenous ~~after~~feedstock ~~December 15,~~of ~~2016,~~cellulosic biomass for producing energy and ~~interim~~other ~~periods~~chemical ~~thereafter,~~products ~~with~~and ~~early~~(ii) ~~adoption~~recyclable ~~permitted~~products (metals, plastics, aluminum).

34The Company has no operating history as a producer of biomass or energy sources and has not constructed any plants to date. We have no revenues and will be required to secure outside funding in order to execute our business plan and commercialize our products. Our current cash is not sufficient to fund our current operations. Our liabilities are substantially greater than our current available funds and current assets. Although we continue to seek additional financing through the sale of additional equity, various government funding opportunities and/or possibly through strategic alliances with larger energy or waste management companies, we have not had recent success securing meaningful amounts of financing. The Company will require substantial additional financing to implement its business plan and it may be unable to obtain the capital required to do so. If we are not able to immediately and successfully raise additional capital and/or achieve profitability or positive cash flow, we may not be able to continue operations.

InNote ~~June~~2 ~~2014,~~– ~~the~~Summary ~~FASB issued ASU No. 2014-10, “Development Stage Entities (Topic 915) - Elimination~~ of ~~Certain~~Significant Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation.” This ASU removes the definition of a development stage entity from the Master Glossary of the Accounting Standards Codification, thereby removing the financial reporting distinction between development stage entities and other reporting entities from U.S. GAAP. In addition, the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information in the statements of income, cash flows, and shareholder equity, (2) label the financial statements as those of a development stage entity, (3) disclose a description of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. This new guidance is effective for annual periods beginning on or after December 15, 2014 and interim periods within those years. Early application is permitted. The Company elected to early adopt this ASU for the annual period ended December 31, 2014. The adoption of this ASU allows the Company to remove the inception to date information and all references to development stage.Policies

InUse ~~May~~of ~~2014,~~Estimates ~~the~~- ~~FASB~~The ~~issued~~preparation ~~ASU~~of ~~No.~~financial ~~2014-09,~~statements ~~“Revenue~~in ~~from~~conformity ~~Contracts~~ with ~~Customers.”~~United ~~This~~States ~~ASU~~generally ~~will~~accepted ~~supersede~~accounting ~~most~~principles ofrequires ~~the~~management ~~existing~~to ~~revenue~~make ~~recognition~~estimates ~~requirements in U.S. GAAP~~ and ~~will~~assumptions ~~require entities to recognize revenue at an amount~~ that ~~reflects~~affect the ~~consideration~~amounts toreported ~~which the Company expects to be entitled~~ in ~~exchange for transferring goods or services to a customer. The new standard also specifies new accounting for costs associated with obtaining or fulfilling contracts with customers and expands~~ the ~~required~~consolidated ~~disclosures~~financial ~~related~~statements ~~to revenue~~ and ~~cash~~accompanying ~~flows from contracts with customers~~notes. ~~This~~Management ~~new~~makes ~~guidance~~these isestimates ~~effective~~using for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period and can be adopted either retrospectively to each prior reporting period presented or as a cumulative-effect adjustment as of the ~~date~~best ofinformation ~~adoption,~~available ~~with~~at ~~early application not permitted. In August 2015,~~ the ~~FASB~~time ~~approved a one-year deferral of~~ the ~~effective~~estimates ~~date~~are ofmade; ~~this~~however, ~~ASU.~~actual ~~This~~results ~~standard~~could ~~will~~differ ~~now~~materially ~~become~~from ~~effective~~those ~~beginning with the first quarter 2018 and can be adopted either retrospectively to each prior reporting period presented or as a cumulative effect adjustment as of the date of adoption~~estimates. ~~The Company is currently evaluating the impact of adopting this new guidance on the consolidated financial statements.~~

InConsolidation ~~April~~- ~~2014,~~The ~~the~~consolidated ~~FASB~~financial ~~issued~~statements ~~ASU~~include ~~No.~~the ~~2014-08,~~accounts ~~“Presentation~~ of ~~Financial~~CleanTech ~~Statements and Property~~Biofuels, ~~Plant,~~Inc. and ~~Equipment~~its -wholly ~~Reporting~~owned ~~Discontinued~~subsidiaries, ~~Operations~~SRS ~~and~~Energy, ~~Disclosures~~Inc., ofCTB ~~Disposals of Components of an Entity”~~Licensing, ~~which~~LLC ~~amends~~and ~~the~~Van ~~definition~~Keuren ~~of a discontinued operation by raising the threshold for a disposal to qualify as discontinued operations~~LLC. ~~This~~All ~~ASU~~significant ~~will~~intercompany ~~also require entities to provide additional disclosures about discontinued operations as well as disposal~~ transactions ~~that do not meet the discontinued operations criteria. This new guidance is effective for annual periods beginning on or after December 15, 2014~~ and ~~interim~~balances ~~periods~~are ~~within~~eliminated ~~those years. Beginning~~ in ~~2015, we will apply the new guidance, as applicable, to future disposals of components or classifications as held for sale~~consolidation.

~~There~~Research ~~were~~and ~~various~~Development ~~other~~Costs ~~accounting~~- ~~standards~~Research ~~updates~~and ~~recently~~development ~~issued,~~expenditures ~~most of~~ (which ~~represented~~are ~~technical~~comprised ~~corrections~~of tocosts ~~the~~incurred ~~accounting~~in ~~literature~~performing orresearch ~~were~~and ~~applicable~~development toactivities ~~specific~~including ~~industries,~~wages and ~~are~~associated ~~not~~employee ~~expected~~benefits, tofacilities ~~have~~and aoverhead ~~material~~costs), ~~impact~~including onpayments ~~the~~to ~~Company's~~collaborative ~~financial~~research ~~position,~~partners ~~results~~are ofexpensed ~~operations~~as ~~or cash flows~~incurred.

~~Note 3 – Mergers/Acquisitions~~32

OnTable ~~September 15, 2008, the Company consummated the acquisition~~ of Biomass North America Licensing, Inc. (“Biomass”) pursuant to a merger between Biomass and a wholly-owned subsidiary of the Company (with Biomass as the surviving subsidiary of the Company) in accordance with an Agreement and Plan of Merger by and between the Company and Biomass. By virtue of the merger, the Company acquired a license agreement pursuant to which the Company holds a license in the United States and Canada to use patented technology licensed from Biomass North America, LLC, the former parent of Biomass (the “Licensor”), to clean and separate MSW (the “Biomass Recovery Process”). In July 2010, the United States Patent and Trademark Office issued US patent number 7,745,208 for this process (the “BRP Patent”).Contents

35Impairment of Long-Lived Assets - The Company continually evaluates whether events and circumstances have occurred that indicate the remaining estimated useful life of long-lived assets may warrant revision or that the remaining balance may not be recoverable primarily through reviewing changes in business plans and use of such assets. When factors indicate that an asset should be evaluated for possible impairment, the Company reviews long-lived assets to assess future use or recoverability of such asset. Impairments are recognized in earnings to the extent that the carrying value exceeds fair value.

~~Upon~~Intellectual ~~consummation~~Property of- ~~the~~Intellectual ~~merger~~property, ~~the~~consisting ~~Company~~of ~~paid~~our ~~$20,000~~licensed/owned inpatents ~~cash~~ and ~~issued~~other aproprietary ~~promissory note in the original principal amount of $80~~technology,~~000~~ ~~bearing~~are ~~interest~~stated at ancost ~~annual~~and ~~rate~~will ofbe 6%amortized toon a ~~shareholder~~straight-line ofbasis ~~the~~over ~~Licensor.~~their ~~This~~economic ~~note~~estimated ~~has~~useful ~~been paid in full~~life. ~~Additionally,~~Costs ~~the Company issued to the four shareholders of the Licensor a total of 1,895,000 shares of Common Stock~~ and ~~deposited~~expenses anincurred ~~additional~~in ~~4,000,000~~creating ~~shares~~intellectual ofproperty ~~Common~~are ~~Stock~~expensed ~~into~~as ~~an escrow account (collectively, the “Shares”)~~incurred. The ~~Shares~~cost ~~were issued as part~~ of ~~the~~purchased ~~merger~~intellectual ~~consideration~~property received by the shareholders of the Licensor. In accordance with a November 2013 amendment, the Company has an exclusive license in the United States and Canada to use the Biomass Recovery Process and includes no performance requirements on the Company; the license agreement is for a term of 21 years from the date of the amendment or the life of any patent issued for the Biomass Recovery Process, including any amendments, modifications or extensions; the license requires that the Company pay a royalty in the amount of $2capitalized.00 ~~per~~Amortization ~~ton~~ of ~~MSW~~these ~~used~~assets inhas ~~the~~not ~~Biomass~~yet ~~Recovery~~begun ~~Process~~as to the ~~Licensor;~~assets ~~and~~have ~~the~~not ~~Company~~been ~~released~~placed ~~the 4,000,000 shares of common stock to the Licensor previously held~~ in ~~escrow~~service ~~since~~as ~~the~~we ~~merger.~~have ~~The~~not ~~Company~~yet ~~has~~commenced ~~recorded a long-term asset of approximately $1.6 million which it will begin to amortize upon utilizing the license in our~~ operations.

OnProperty, ~~June~~plant ~~23,~~and ~~2016,~~equipment ~~the~~- ~~Company~~Newly ~~entered~~acquired ~~into~~property, anplant ~~Acquisition~~and ~~Agreement~~equipment ~~with~~are 25carried ~~Van~~at ~~Keuren~~cost ~~LLC,~~less aaccumulated ~~New~~depreciation. ~~Jersey~~Depreciation ~~Limited~~is ~~Liability~~provided ~~Company~~over ~~(“Van~~the ~~Keuren”),~~estimated ~~pursuant~~useful tolives ~~which~~of the ~~Company~~assets, ~~acquired~~on ~~99% of~~ the ~~outstanding~~straight-line ~~membership~~method ~~interests~~for infinancial ~~Van~~reporting ~~Keuren~~purposes. ~~with~~Expenditures ~~the~~for ~~former~~maintenance ~~members~~and ofrepairs ~~Van~~are ~~Keuren~~charged ~~retaining~~to aexpense 1%as ~~interest~~incurred.

~~The~~Income ~~New~~Taxes ~~Jersey~~- ~~Sports~~The ~~and~~Company ~~Exposition~~accounts ~~Authority~~for ~~has~~income ~~received~~taxes ~~certification~~in ofaccordance anwith ~~amendment~~accounting toguidance, ~~the~~which ~~Solid~~requires ~~Waste~~the ~~Management~~Company ~~Plan~~to ~~from~~provide ~~the~~a ~~New~~net ~~Jersey~~deferred ~~Department~~tax ofasset/liability ~~Environmental~~equal ~~Protection (“DEP”)~~ to ~~include~~ the ~~proposed~~expected ~~operation~~future tax benefit/expense of atemporary ~~municipal~~reporting ~~solid~~differences ~~waste~~between ~~transfer~~financial ~~station~~statement and ~~material~~tax ~~recovery~~accounting ~~facility~~methods ~~(“TS/MRF”)~~and atany aavailable ~~site~~operating ~~located~~loss inor ~~Jersey~~tax ~~City,~~credit ~~New~~carry ~~Jersey~~forwards. ~~CleanTech~~The ~~Biofuels~~deferred ~~and~~tax ~~Van~~assets ~~Keuren intend to seek the necessary permits~~ and ~~approvals~~liabilities ~~from~~represent the ~~New~~future ~~Jersey~~tax ~~DEP~~return toconsequences ~~build, own and operate the TS/MRF. As part~~ of ~~the~~those ~~acquisition~~differences, ~~CleanTech~~which ~~acquired~~will aneither ~~option~~be todeductible ~~lease~~or ~~the~~taxable ~~property~~when ~~in Jersey City within 30 days after~~ the ~~final~~assets ~~permit~~and ~~issues~~liabilities ~~from~~are ~~the~~recovered ~~New~~or ~~Jersey DEP~~settled. ~~The~~Deferred ~~Company~~taxes ~~intends~~also ~~to:~~are ~~(1)~~recognized ~~install~~for ~~its~~operating ~~Biomass~~losses ~~Recovery~~and ~~Process~~tax oncredits ~~the~~that ~~site,~~are ~~and~~available ~~(2)~~to ~~operate~~offset ~~the~~future ~~TS/MRF~~taxable income.

~~Van~~The ~~Keuren~~standards ~~has~~on ~~had~~accounting nofor ~~operations~~uncertainty orin ~~revenue~~income ~~since~~taxes ~~inception~~(incorporated ~~and~~into ~~has solely been working towards obtaining~~ the ~~permits~~FASB ~~required~~Accounting toStandards ~~operate~~Codification ~~the~~(Codification) ~~TS/MRF.~~Topic ~~As payment for the acquisition~~740, ~~the~~Income ~~Company~~Taxes) ~~issued~~clarify in the ~~aggregate~~accounting ~~1,000,000~~and ~~shares~~recognition offor ~~restricted~~income ~~common~~tax ~~stock~~positions oftaken ~~the~~or ~~Company~~expected ~~(par value $0.001)~~ to ~~certain~~be ~~holders~~taken ~~of membership interests~~ in ~~Van Keuren. As of~~ the ~~close of business on June 23, 2016, the~~ Company’s ~~stock~~income ~~quote~~tax ~~was $0~~returns.~~05.~~ The ~~total~~Company’s ~~assets~~income oftax ~~Van~~filings ~~Keuren~~are atsubject ~~the~~to ~~time~~audit ofby ~~the~~various ~~acquisition~~taxing ~~were $51,000 (2~~authorities.3% ofThe ~~the~~ Company’s ~~assets).~~open ~~The~~audit ~~liabilities~~periods ~~and~~are ~~equity~~2014-2017. ~~consisted~~In ofevaluating ~~accounts~~the ~~payable~~Company’s oftax ~~$27,000~~provisions and ~~member~~accruals, ~~equity~~future oftaxable ~~$24~~income,~~000.~~ ~~The~~and ~~assets~~the ~~consist~~reversal ~~solely~~ of ~~costs~~temporary ~~incurred~~differences, ~~towards~~interpretations ~~obtaining the required permits~~ and ~~have~~tax ~~been~~planning ~~recorded~~strategies asare ~~an intangible asset on our consolidated financial statements~~considered. ~~This~~The ~~intangible~~Company ~~will~~believes betheir ~~expensed~~estimates ifare ~~and~~appropriate ~~when~~based ~~the~~on ~~Company~~facts and ~~Van Keuren complete the permit process and begin operations~~circumstances.

~~Note~~The 4Company’s –policy ~~Property~~is to classify income tax related interest and ~~Equipment~~penalties in interest expense and general and administrative expenses, respectively.

AtConvertible ~~December~~Notes 31Payable and Warrants – The Company has issued various Convertible Promissory Notes (the “Notes”). These Notes may be converted at the option of the note holder into shares of the Company’s common stock. Additionally, ~~our~~some ~~property~~of these Notes carry warrants for shares of the Company’s common stock. These Notes have been recorded as debt (notes payable) in the consolidated financial statements, net of discounts, if any, for the conversion and ~~equipment~~warrant ~~consisted~~features. The discounts have been amortized on a straight-line basis over the term of: each note.

	Dec 31, 2016			Dec 31, 2015
Computers	$	-		$	-
Furniture and fixtures		15,799			15,799
Plant and equipment		18,700			18,700
		34,499			34,499
Accumulated Depreciation		(34,499	)		(34,499	)
Total	$	-		$	-

Stock-based compensation - The Company accounts for stock-based compensation in accordance with accounting guidance that requires measuring all stock-based compensation awards at fair value and recognizing an expense in the consolidated financial statements. In March 2007, the Company adopted the 2007 Stock Option Plan (“Stock Plan”) for its employees, officers, directors and consultants. The Company has reserved a maximum of 14,000,000 shares of common stock to be issued for stock options or shares of restricted stock under the Stock Plan. We compensate certain employees, officers, directors and consultants with stock-based payment awards and recognize compensation costs for these awards based on their fair values and expense is recognized over the requisite service period. The fair values of certain awards are estimated on the grant date using the Black-Scholes-Merton option-pricing formula, which incorporates certain assumptions including the expected term of an award and expected stock price volatility. Our key assumptions are described in further detail in the Share-Based Payments Note to the Consolidated Financial Statements.

~~For the years ended December 31, 2016 and 2015, we had no depreciation expense.~~ 33

~~Note~~Table 5of ~~– Patent~~Contents

~~The~~Fair ~~Company~~Value ~~owns~~Measurement US- ~~Patent~~We ~~No.~~use ~~6,306,248~~fair ~~(the~~value ~~“PSC~~accounting ~~Patent”),~~and ~~which~~reporting ~~is the underlying technology upon which the BRP Patent is based. The Company acquired the PSC Patent on October 22, 2008 pursuant~~ to specify a ~~Patent~~hierarchy ~~Purchase Agreement (“Agreement”) with World Waste Technologies, Inc. (“WWT”). As part~~ of ~~the~~valuation ~~acquisition~~techniques ofbased ~~the~~upon ~~PSC~~whether ~~Patent, we also became~~ the ~~licensor~~inputs ~~of such technology under the existing license agreement between Bio-Products International, Inc., the licensee (“Bio-Products”) and WWT. The Company has paid WWT $600,000 and issued warrants~~ to ~~purchase~~those ~~1,800,000~~valuation ~~shares~~techniques ofreflect ~~Common~~assumptions ~~Stock~~other atmarket ~~$0.10~~participants ~~per~~would ~~share~~use ~~and~~based ~~500,000~~upon ~~shares~~market ofdata ~~Common~~obtained ~~Stock~~from atindependent ~~$0.11~~sources ~~per~~or ~~share.~~reflect ~~WWT~~our ~~assigned~~own ~~all~~assumptions of ~~its~~market ~~rights,~~participant ~~title and interest in the note, warrants, security agreement and purchase agreement to Vertex Energy, Inc~~valuation. ~~(“Vertex”) as a result of a merger in March 2009.~~ The ~~warrants~~hierarchy ~~had~~is anbroken ~~exercisable~~down ~~term~~into ofthree ~~five~~levels ~~years~~based ~~which expired~~ on ~~October~~the ~~22,~~reliability ~~2014. The cost~~ of the ~~PSC~~inputs ~~Patent acquisition of $600,000 is recorded~~ as ~~a long-term asset on the Balance Sheet.~~ follows:

36● Level 1 – Quoted prices in active markets that are unadjusted and accessible at the measurement date for identical, unrestricted assets or liabilities;

On● ~~September 1,~~Level 2010, the Company issued a promissory note to CMS Acquisition, LLC (“CMS”) in the amount of $100,000 and bearing interest at 6.0% per annum. The note is secured with a security interest in the PSC Patent. In connection with the financing, the Company issued a warrant to CMS to purchase 2~~,000,000~~ ~~shares~~– ofQuoted ~~Common~~prices ~~Stock at a price of $0.05 per share. The warrant is exercisable at any time~~ for ~~five~~identical ~~years~~assets ~~from the date of issuance or re-issuance. The note was originally to mature on February 28, 2011. The Company~~ and ~~CMS~~liabilities ~~have entered into various amendments extending the due date, the most recent of which was March 17, 2015, which extended the due date to September 17, 2016. As consideration~~ in ~~these~~markets ~~amendments,~~that ~~the~~are ~~Company~~not ~~has: (i) paid $25~~active,~~000~~ inquoted ~~February~~prices 2011 towards accrued interest to date and principal on the Note, (ii) increased the interest rate to 10% as of May 15, 2011, (iii) re-dated the original warrants to March 17, 2015, (iv) issued new warrants for ~~300,000~~similar ~~shares~~assets ~~of Common Stock with an exercise price of $0.05~~ and ~~exercisable~~liabilities atin ~~any~~active ~~time until March 17~~markets, ~~2020,~~or ~~(v)~~financial ~~issued~~instruments ~~new warrants~~ for ~~150,000~~which ~~shares~~significant ofinputs ~~Common~~are ~~Stock with an exercise price of $0.10 and exercisable at any time until March 17~~observable, ~~2020,~~either ~~and~~directly ~~(vi)~~or ~~the~~indirectly; ~~Company has approved the assignment of the note by CMS to the WL Meyer Legacy Trust as of the March 17, 2015 amendment. As of December 31, 2016, the note is curcurrently due.~~and

~~Note~~● 6Level -3 ~~Technology~~– ~~Licenses~~Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

~~Biomass~~As ~~North~~of December ~~America~~31, ~~Licensing~~2017, ~~Inc.~~and 2016, and during the years ended December 31, 2017, 2016, and 2015, we utilized Level 1 inputs to determine the fair value of cash equivalents and we utilized Level 2 inputs to determine the fair value of certain long-lived assets.

WeRestricted ~~own~~Stock anCompensation ~~exclusive~~– ~~license~~From intime ~~the~~to ~~United~~time, ~~States~~we ~~and~~issue ~~Canada~~restricted Common Stock to ~~use~~employees, ~~the~~directors, ~~Biomass~~and ~~Recovery~~consultants ~~Process~~as ~~(See~~compensation. ~~Note~~The 3cost –of ~~Mergers/Acquisitions).~~these Wegrants ~~have~~is recorded ain ~~long-term~~general ~~asset~~and ofadministrative ~~approximately~~expense ~~$1.6~~for ~~million~~employees and directors and professional fees for consultants. The cost is determined using the number of shares granted at a discount to the market value on the date of ~~this~~the ~~license~~grant. ~~Amortization~~The discount is applied for a Lack of ~~this~~Marketability ~~asset~~due ~~will~~to: ~~begin~~(i) ~~upon~~shares ~~commencement~~issued are unregistered shares and subject to Rule 144 of the ~~use~~Securities Act of 1933, (ii) minimal trading activity in our shares, only about 1/3rd of which are registered and free-trading shares, and (iii) the ~~Biomass~~Company ~~Recovery~~has ~~Process~~yet to begin operations and has had no revenue. The Company issued shares in 2015, 2016 and 2017 as detailed further in Note 10.

InContingent ~~accordance~~Liabilities ~~with~~– aWe ~~November 2013 amendment~~are, ~~the~~from ~~Company~~time ~~has~~to antime, ~~exclusive~~subject ~~license~~to inlitigation ~~the~~to ~~United~~our ~~States~~business. ~~and~~Assessments ~~Canada~~regarding ~~to use~~ the ~~Biomass~~ultimate ~~Recovery~~cost ~~Process~~of ~~and~~lawsuits ~~includes~~require nojudgments ~~performance~~concerning ~~requirements~~matters onsuch as the ~~Company;~~anticipated ~~the~~outcome ~~license~~of ~~agreement~~negotiations, isthe ~~for~~number aand ~~term~~cost of 21pending ~~years~~and ~~from~~future claims, and the ~~date~~impact of ~~the~~evidentiary ~~amendment~~requirements. orA ~~the~~significant ~~life~~amount of ~~any~~judgment ~~patent~~and ~~issued~~use ~~for~~of ~~the~~estimates ~~Biomass~~is ~~Recovery~~required ~~Process,~~to ~~including~~quantify ~~any~~our ~~amendments,~~ultimate ~~modifications~~exposure orin ~~extensions;~~these ~~and~~matters. We regularly review the ~~license~~valuation ~~requires~~of ~~that~~these ~~the~~liabilities ~~Company~~and ~~pay~~account afor ~~royalty~~changes in ~~the~~circumstances ~~amount~~for ofongoing ~~$2.00~~and ~~per~~emerging ~~ton~~issues. ofThe ~~MSW~~Company ~~used~~intends into ~~the~~defend ~~Biomass~~itself ~~Recovery~~vigorously ~~Process~~in toall ~~the Licensor~~litigation.

~~Bio~~Dividends -~~Products~~ ~~International~~We have no material operating history and therefore have had no earnings to distribute to stockholders. We currently intend to retain our earnings, ~~Inc~~if any, and reinvest them in the development and growth of our business and do not foresee payment of a dividend in any upcoming fiscal period.

AsNet ~~disclosed~~Loss inper ~~Note~~Common 5Share - ~~Patent,~~The ~~the~~ Company ~~acquired~~calculates ~~the~~basic ~~PSC~~loss ~~Patent~~per inshare ~~2008~~("EPS") and asdiluted aEPS. ~~result,~~Basic ~~became~~loss ~~the~~per ~~licensor~~share tois ~~Bio-Products~~computed ~~for the PSC Patent pursuant to a Master License Agreement dated~~ as ofnet ~~August~~loss ~~18,~~divided ~~2003~~by (the ~~“PSC~~weighted ~~License~~average ~~Agreement”).~~number ~~Pursuant~~of tocommon ~~the~~shares ~~terms~~outstanding offor the ~~PSC License Agreement, Bio-Products (a wholly-owned subsidiary of Clean Earth Solutions, Inc~~period., ~~“CES”)~~Diluted isEPS ~~the~~would ~~exclusive~~reflect ~~licensee of~~ the ~~PSC~~potential ~~Patent~~dilution ~~and has the right to sublicense the technology~~ that iscould ~~part~~occur offrom ~~the~~common ~~PSC~~shares ~~Patent~~issuable ~~(but~~through ~~not~~stock ~~the~~options, ~~BRP Patent) to any party. In addition~~warrants, ~~we are entitled to be paid 5% of any revenue derived by Bio-Products from the use of the technology~~ and ~~40%~~other ofconvertible ~~any sublicensing fees paid to Bio-Products for the use of the technology~~securities. ~~The~~As ~~Master License Agreement is for a term~~ of December 2031, ~~years that commenced on August 18~~2017, ~~2003.~~2016 Onand ~~September 22~~2015, ~~2010,~~ the Company ~~sent~~had ~~a Notice of Breach to Bio-Products~~options, ~~which~~warrants ~~included~~and ~~removing~~convertible ~~the~~notes ~~exclusivity~~to ofpurchase ~~the~~an ~~license.~~aggregate ~~We received a response from Bio-Products on November 5, 2010 disputing our claims. In February 2011, we became aware that Bio-Products effected a transfer~~ of ~~the~~approximately ~~license~~85 ~~in violation of the PSC License Agreement. As a result~~million, on86 ~~March~~million ~~21,~~and ~~2011,~~87 wemillion ~~sent~~shares ~~a notice~~ of ~~termination~~common ~~to Bio-Products and the transferee terminating the License Agreement. In June 2011~~stock, ~~Steve Vande Vegte~~respectively, athat ~~shareholder~~were inexcluded ~~CES,~~from ~~filed a lawsuit against various parties, including~~ the ~~Company.~~calculation ~~The only Cause~~ of ~~Action~~diluted ~~against~~loss ~~the~~per ~~Company~~share isas ~~for~~their ~~Declaratory~~effects ~~Relief~~would ~~seeking~~have tobeen ~~avoid our March 2011 termination of the license to which Mr~~anti-dilutive. ~~Vande Vegte is not a party. On August 5~~Therefore, ~~2011,~~ the Company ~~filed~~only apresents ~~demurrer~~basic ~~requesting~~loss ~~that~~per ~~the~~share ~~court~~on ~~dismiss~~ the ~~case~~face onof the ~~grounds~~statements ~~that~~of ~~Mr.~~operations ~~Vande Vegte lacks standing to pursue a claim concerning the license~~ and ~~that the claim raised~~ in ~~the~~its ~~complaint~~disclosure isof ~~not~~unaudited ~~ripe.~~quarterly ~~The~~financial ~~court~~data ~~granted~~in ~~our~~Note ~~demurrer to dismiss Cleantech from this lawsuit on December 8, 2011~~14.

25Recent ~~Van~~Accounting ~~Keuren~~Pronouncements ~~LLC~~– In July 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") No. 2017-11 Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815). This ASU changes the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. For freestanding equity classified financial instruments, the amendments require entities that present earnings per share (“EPS”) in accordance with Topic 260 to recognize the effect of the down round feature when it is triggered. The standard is effective for annual reporting periods beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, including adoption in any interim period. We are currently assessing the impact the guidance will have on our consolidated financial statements and related disclosures.

As discussed in Note 3, the Company entered into an Acquisition Agreement with 25 Van Keuren LLC ("Van Keuren"). The total assets of Van Keuren at the time of the acquisition were $51,000. The assets have been recorded as an intangible asset in our consolidated financial statements. This intangible will be expensed if and when the Company and Van Keuren complete the permit process and begin operations.34

~~All~~Table intangible assets are reviewed for impairment whenever events or other changes in circumstances indicate that the carrying amount may not be recoverable. An impairment charge is recognized if the carrying amount of ~~an intangible asset exceeds its implied fair value.~~Contents

37In May 2017, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2017-09 Compensation – Stock Compensation (Topic 718) Scope of Modification Accounting. This ASU, which amends the scope of modification accounting for share-based payment arrangements, provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting under ASC 718. Specifically, an entity would not apply modification accounting if the fair value, vesting conditions, and classification of the awards are the same immediately before and after the modification. The standard is effective for annual reporting periods, including interim periods within those annual reporting periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period. We are currently assessing the impact the guidance will have on our consolidated financial statements and related disclosures.

~~Note~~In January 72017, –the ~~Debt~~Financial Accounting Standards Board (“FASB”) issued ASU No. 2017-04 Intangibles —Goodwill and Other (Topic 350) “Simplifying the Test for Goodwill Impairment.” This ASU simplifies several aspects of the accounting for goodwill impairment. The guidance requires an entity to perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The standard is effective for annual periods beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We are currently assessing the impact the guidance will have on our consolidated financial statements and related disclosures.

	Dec 31, 2016			Dec 31, 2015
Convertible Notes Payable (2009 Offering), which are made up of various individual notes with an aggregate face value of $199,790 at December 31, 2016 and 2015 due one year from date of note, interest at 6.0%	$	199,790		$	199,790
Convertible Notes Payable (11/10 Offering), which are made up of various individual notes with an aggregate face value of $1,877,162 and $1,874,074 at December 31, 2016 and 2015, respectively, due one year from date of note, interest at 6.0%		1,877,162			1,874,074
WL Meyer Legacy Trust (formerly CMS Acquisition LLC) Note Payable, with a face value of $77,696 due on September 17, 2016, interest at 6.0% thru May 15,2011; 10.0% thereafter		77,696			77,696
Convertible Notes Payable (5/12 Offering), made up of various individual notes with a face value of $583,510, due in 18 months from date of note, interest at 6.0%		583,510			583,510
Convertible Note Payable (2/14 Offering), which is made up of one note with a face value of $100,000 due in 18 months from date of note, interest at 6.0%		100,000			100,000
Convertible Note Payable (7.1.2015), which is made up of one note with a face value of $17,377, minimum quarterly payments of $3,000, interest at 6.0%		-			17,377
Convertible Note Payable (2015 Offering), which is made up of one note with a face value of $85,000 due in 18 months from date of note, interest at 6.0%		85,000			85,000
Note Payable, which is made up of one note with a face value of $50,000 due in six months from the date of note, interest at 9.0%		50,000			-
Note Payable, which is made up of one note with a face value of $35,000 due in six months from the date of note, interest at 9.0%		35,000			-
Total debt		3,008,158			2,937,447
Current maturities		(3,008,158	)		(2,852,447	)
Long-term debt	$	-		$	85,000

In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") No. 2016-09, “Compensation-Stock Compensation.” This ASU simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The standard is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted. The adoption of this guidance did not have a material impact on our consolidated financial statements and related disclosures.

~~Convertible~~In February ~~Notes~~2016, ~~Payable~~the -FASB ~~Since~~issued ~~September~~ASU ~~2008~~No. 2016-02, “Leases.” This ASU requires lessees to recognize most leases on their balance sheets for the ~~Company~~rights ~~has~~and ~~conducted~~obligations ~~six~~created ~~offerings~~by ofthose ~~units~~leases. ~~comprised~~The guidance requires enhanced disclosures regarding the amount, timing, and uncertainty of acash ~~convertible~~flows ~~promissory~~arising ~~note~~from leases and awill ~~warrant,~~be effective for interim and ~~one~~annual ~~offering~~periods ofbeginning after December 15, 2018. Early adoption is permitted. The ASU requires adoption based upon a ~~convertible~~modified ~~note~~retrospective ~~(with~~approach. noThe ~~warrant),~~adoption ~~having~~of ~~the~~this ~~terms~~guidance ~~set~~is ~~forth~~not ~~below:~~expected to have a material impact on our consolidated financial statements and related disclosures.

Offering	Note Interest Rate		Note Conversion Price		Warrant Exercise Price		Term	Closed or Open
2008 Offering		6.0%	$	0.25	$	0.45	One-year	Closed
2009 Offering		6.0%	$	0.08	$	0.30	One-year	Closed
6/10 Offering		12.0%	$	0.08	$	0.30	One-year	Closed
11/10 Offering		6.0%	$	0.06	$	0.30	One-year	Closed
5/12 Offering		6.0%	$	0.10	$	0.35	18 months	Closed
2/14 Offering		6.0%	$	0.10		n/a	18 months	Closed
2015 Offering		6.0%	$	0.10	$	0.15	18 months	Closed

In November 2015, the FASB issued ASU 2015-17, “Balance Sheet Classification of Deferred Taxes.” The guidance requires that all deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent on the balance sheet. The standard is effective for annual periods beginning after December 15, 2016, and interim periods within the fiscal years. Early adoption is permitted. The adoption of this guidance did not have a material impact on our consolidated financial statements and related disclosures.

~~Each~~In April ~~note~~2015, ~~holder~~the ~~retains~~Financial ~~the~~Accounting ~~option~~Standards ofBoard a(“FASB”) ~~cash~~issued ~~repayment~~Accounting ofStandards ~~the~~Update ~~note~~("ASU") ~~plus~~No. ~~interest~~2015-03, or"Simplifying the ~~note~~Presentation ~~can~~of beDebt ~~converted~~Issuance atCosts." ~~any~~This ~~time~~ASU ~~during~~amends ~~the~~existing ~~term~~guidance ~~of the note or prior~~ to require the ~~closing~~presentation of ~~any~~debt ~~Qualifying~~issuance ~~Equity~~costs ~~Financing~~in ~~(minimum~~the ~~capital~~balance ~~received~~sheet ofas $5a ~~million),~~deduction ~~into~~from ~~shares~~the ofcarrying ~~Common~~amount ~~Stock~~of at the ~~conversion~~related ~~price~~debt ~~noted~~liability ~~above.~~instead ~~All~~of ~~notes~~a ~~have~~deferred ~~been~~charge. ~~recorded~~It asis ~~debt~~effective ~~(notes~~for ~~payable)~~annual inreporting ~~the~~periods ~~financial~~beginning ~~statements~~after December 15, ~~net~~2015, ofbut ~~discounts~~early ~~for~~adoption ~~the~~is ~~conversion~~permitted. ~~and~~The ~~warrant~~adoption ~~features~~of ~~(except~~this ~~for~~guidance ~~the~~did ~~11/10,~~not ~~5/12,~~have ~~2/14,~~a ~~and~~material ~~2015~~impact ~~Offerings~~on ~~which~~our ~~carried~~consolidated nofinancial ~~discounts).~~statements ~~See~~and ~~Subsequent~~related ~~Event footnote for further disclosure regarding our notes~~disclosures.

38In August 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements – Going Concern (Subtopic 205-40) – Disclosure of Uncertainties about an Entity’s ability to continue as a Going Concern.” This ASU provides guidance on determining when and how to disclose going-concern uncertainties in the financial statements and requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued. An entity must provide certain disclosures if conditions or events raise substantial doubt about the entity’s ability to continue as a going concern. This new guidance is effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. (See Note 15)

6/In June 2014, the FASB issued ASU No. 2014-10, ~~Offering~~“Development Stage Entities (Topic 915) - ~~During~~Elimination ~~June~~of ~~2010~~Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation.” This ASU removes the ~~Company~~definition ~~commenced~~of ana ~~offering~~development stage entity from the Master Glossary of ~~units~~the Accounting Standards Codification, thereby removing the financial reporting distinction between development stage entities and ~~raised~~other areporting ~~total~~entities from U.S. GAAP. In addition, the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information in the statements of ~~$75~~income,~~000~~ cash flows, and shareholder equity, (2) label the financial statements as those of ~~investment~~a ~~proceeds~~development instage ~~one~~entity, ~~note.~~(3) ~~Upon~~disclose ~~maturity~~a description of the development stage activities in ~~June~~which ~~2011~~the entity is engaged, ~~this~~and ~~note~~(4) ~~was~~disclose ~~exchanged~~in ~~into~~the ~~our~~first ~~11/10~~year ~~Offering.~~in Aswhich the entity is no longer a ~~result,~~development stage entity that in prior years it had been in the ~~balance~~development ~~due~~stage. This new guidance is effective for annual periods beginning on ~~this~~or ~~offering~~after December 15, 2014 and interim periods within those years. Early application is ~~$-0-~~permitted. The Company elected to early adopt this ASU for the annual period ended December 31, 2014. The adoption of this ASU allows the Company to remove the inception to date information and all references to development stage.

~~11/10~~In May ~~Offering~~2014, -the ~~During~~FASB ~~November~~issued ~~2010~~ASU No. 2014-09, ~~the~~“Revenue ~~Company~~from ~~commenced~~Contracts anwith ~~offering~~Customers.” This ASU will supersede most of ~~units~~the existing revenue recognition requirements in U.S. GAAP and ~~raised~~will arequire ~~total~~entities ofto ~~$451,713~~recognize ofrevenue ~~investment~~at ~~proceeds.~~an ~~Three~~amount ~~notes~~that ~~were~~reflects ~~converted~~the consideration to ~~shares~~which ofthe ~~common~~Company ~~stock~~expects ~~during~~to ~~2011~~be entitled in exchange for transferring goods or services to a customer. The new standard also specifies new accounting for costs associated with obtaining or fulfilling contracts with customers and ~~four~~expands ~~notes~~the ~~were~~required ~~converted~~disclosures related to ~~shares~~revenue ofand ~~common~~cash ~~stock~~flows infrom ~~2012~~contracts with customers. AsThis ofnew guidance is effective for annual reporting periods beginning after December 3115, 2016, weincluding ~~had~~interim ~~$1,877,162~~periods ~~face~~within ~~value~~that ofreporting ~~notes~~period ~~outstanding,~~and ~~which~~can ~~includes~~be ~~the~~adopted ~~exchanged~~either ~~notes~~retrospectively ~~from~~to ~~our~~each ~~2009~~prior ~~Offering.~~reporting Asperiod presented or as a cumulative-effect adjustment as of ~~December~~the ~~31,~~date ~~2016~~of adoption, ~~approximately~~with $1early application not permitted.75 ~~million~~In August 2015, the FASB approved a one-year deferral of ~~these~~the ~~notes~~effective ~~matured~~date of this ASU. WeThis ~~plan~~standard towill ~~work~~now become effective beginning with ~~each~~the ~~remaining~~first ~~note~~quarter ~~holder~~2018 and can be adopted either retrospectively to ~~exchange,~~each ~~convert~~prior reporting period presented or ~~repay~~as ~~these~~a ~~notes~~cumulative effect adjustment as of the date of adoption. The Company is currently evaluating the impact of adopting this new guidance on the consolidated financial statements.

~~5/12~~In April ~~Offering~~2014, the FASB issued ASU No. 2014-08, ~~During~~“Presentation ~~May~~of ~~2012~~Financial Statements and Property, ~~the~~Plant, ~~Company~~and ~~commenced~~Equipment an- ~~offering~~Reporting ofDiscontinued ~~units~~Operations and ~~raised~~Disclosures aof ~~total~~Disposals of ~~$583~~Components of an Entity”,~~510~~ which amends the definition of ~~investment~~a ~~proceeds~~discontinued operation by raising the threshold for a disposal to qualify as discontinued operations. AsThis ofASU ~~December~~will ~~31,~~also ~~2016,~~require ~~all~~entities ofto ~~these~~provide ~~notes~~additional ~~were~~disclosures ~~outstanding~~about discontinued operations as well as disposal transactions that do not meet the discontinued operations criteria. This new guidance is effective for annual periods beginning on or after December 15, 2014 and ~~have~~interim ~~matured~~periods within those years. WeIn ~~plan~~2015, we began to ~~work~~apply ~~with~~the ~~each~~new ~~remaining~~guidance, ~~note~~as ~~holder~~applicable, to ~~exchange,~~disposals ~~convert~~of components or ~~repay~~classifications ~~these~~as ~~notes~~held for sale.

~~2/14~~There ~~Offering~~were -various ~~During~~other ~~February~~accounting ~~2014,~~standards ~~the~~updates ~~Company~~recently ~~commenced~~issued, anmost ~~offering~~ of ~~units~~which ~~and~~represented ~~raised~~technical acorrections ~~total~~to ofthe ~~$100,000~~accounting ofliterature ~~investment~~or ~~proceeds~~were inapplicable ~~one~~to ~~note.~~specific ~~As of December 31~~industries, ~~2016,~~and ~~this~~are ~~note~~not isexpected ~~outstanding~~to ~~and~~have ~~has~~a ~~matured.~~material Weimpact ~~plan~~on ~~to work with~~ the ~~note~~Company's ~~holder~~financial ~~to exchange~~position, ~~convert~~results orof ~~repay~~operations ~~this~~or ~~note.~~cash flows.

~~2015~~Note ~~Offering~~3 -– ~~During September 2015, the Company commenced an offering of units and, as of December 31, 2016, had raised a total of $85,000 of investment proceeds.~~ Mergers/Acquisitions

WLOn September ~~Meyer Legacy Trust (formerly CMS Acquisition~~15, ~~LLC) Note Payable - In September 2010~~2008, the Company ~~issued~~consummated ~~a note in~~ the ~~amount~~acquisition of ~~$100,000~~Biomass ~~(interest~~North atAmerica ~~6.0% per annum through May 15~~Licensing, ~~2011 and 10~~Inc.0% ~~thereafter~~(“Biomass”) ~~and~~pursuant ~~secured~~to by a ~~security~~merger ~~interest~~between inBiomass ~~the PSC Patent)~~ and ~~issued~~a ~~warrants~~wholly-owned tosubsidiary ~~purchase 2,000,000 shares~~ of ~~Common Stock at a price of $0.05 per share. The note is due~~ the ~~earlier~~Company ~~of:~~ (i)with ~~September~~Biomass ~~17,~~as ~~2016 pursuant to an amendment on March 17, 2015 or (ii)~~ the ~~date~~surviving onsubsidiary ~~which~~of ~~$500,000 or more in~~ the ~~aggregate is raised by the~~ Company) in ~~future~~accordance ~~offerings.~~with ~~The~~an ~~warrants~~Agreement ~~are~~and ~~exercisable~~Plan atof ~~any~~Merger ~~time~~by ~~for~~and ~~five~~between ~~years from~~ the ~~date~~Company ofand ~~issuance or reissuance~~Biomass. ~~The~~By ~~value~~virtue of ~~these warrants has been recorded as a contra-balance amount discount with~~ the ~~note and was fully amortized (interest expense) as of February 28~~merger, ~~2011 (~~the ~~original~~Company ~~due~~acquired ~~date).~~a Aslicense ~~consideration~~agreement inpursuant ~~these~~to ~~amendments,~~which the Company ~~has:~~holds ~~(i)~~a ~~paid~~license ~~$25,000~~ in ~~February~~the ~~2011~~United ~~towards~~States ~~accrued~~and ~~interest~~Canada to ~~date~~use ~~and~~patented ~~principal~~technology onlicensed ~~the~~from ~~note,~~Biomass ~~(ii)~~North ~~increased the interest rate to 10% as of May 15~~America, ~~2011~~LLC, ~~(iii) re-dated~~ the ~~original~~former ~~warrants~~parent toof ~~March~~Biomass ~~17, 2015,~~ (~~iv)~~the ~~issued new warrants for 300~~“Licensor”),~~000~~ ~~shares~~to ofclean ~~Common Stock with an exercise price of $0.05~~ and ~~exercisable~~separate atMSW ~~any~~(the ~~time~~“Biomass ~~until~~Recovery ~~March 17, 2020, (v~~Process”). ~~issued~~In July ~~new warrants for 150~~2010,~~000~~ ~~shares~~the ofUnited ~~Common~~States ~~Stock~~Patent ~~with an exercise price of $0.10~~ and ~~exercisable~~Trademark atOffice ~~any~~issued ~~time~~US ~~until~~patent ~~March~~number 177, ~~2020~~745,208 ~~and~~for ~~(vi)~~this ~~the~~process ~~Company has approved~~ (the ~~assignment~~“BRP ~~of the note by CMS to the WL Meyer Legacy Trust as of the March 17, 2015 amendment~~Patent”). ~~As of December 31, 2016, $77,696 face value of this note is outstanding.~~

~~7.1.15~~Upon ~~Convertible~~consummation ~~Note~~of ~~Payable~~the -merger, Onthe ~~July~~Company 1,paid ~~2015~~$20,000 ~~one~~in ~~noteholder~~cash and issued a promissory note in ~~our~~the ~~2009~~original ~~Offering~~principal ~~exchanged~~amount ~~two~~of ~~notes~~$80,000 ~~into~~bearing ~~this~~interest ~~note~~at an annual rate of 6% to a shareholder of the Licensor. This ~~new~~ note ~~carries~~has been paid in full. Additionally, the Company issued to the four shareholders of the Licensor a 6%total ~~annual~~of ~~interest~~1,895,000 ~~compounded~~shares ~~annually~~of Common Stock and deposited an additional 4,000,000 shares of Common Stock into an escrow account (collectively, the “Shares”). The Shares were issued as part of the merger consideration received by the shareholders of the Licensor. In accordance with a November 2013 amendment, the Company has an exclusive license in the United States and Canada to use the Biomass Recovery Process and includes no performance requirements on the Company; the license agreement is ~~due~~for ina ~~quarterly~~term ~~installment~~of ~~payments:~~21 years from the ~~greater~~date of ~~$3,000~~the amendment or ~~10%~~the life of ~~all~~any ~~investment~~patent ~~proceeds~~issued ~~received~~for ~~during~~the Biomass Recovery Process, including any amendments, modifications or extensions; the ~~calendar~~license ~~quarter~~requires ~~preceding~~that the ~~quarterly~~Company ~~installment~~pay ~~payment~~a royalty in the amount of $2.00 Asper ton of ~~December~~MSW ~~31,~~used ~~2016~~in the Biomass Recovery Process to the Licensor; and the Company released the 4,000,000 ~~this~~shares ~~note~~of common stock to the Licensor previously held in escrow since the merger. The Company has ~~been~~recorded ~~paid~~a long-term asset of approximately $1.6 million which it will begin to amortize upon utilizing the license in ~~full~~our operations.

~~In June and October of 2016 the Company issued notes payable, with no conversion feature, to a current Board of Directors member, James Russell, in the amounts of $35,000 and $50,000, respectively.~~36

39Table of Contents

~~The~~On June ~~discounts~~23, on2016, ~~all~~the ~~notes~~Company ~~payable~~entered ~~have~~into ~~been~~an ~~amortized~~Acquisition onAgreement awith ~~straight-line~~25 ~~basis~~Van ~~over~~Keuren ~~the~~LLC, ~~original~~a ~~term~~New ofJersey ~~each~~Limited ~~note.~~Liability ~~All~~Company ~~discounts~~(“Van ~~were fully amortized and expensed as of June 30~~Keuren”), ~~2011.~~pursuant ~~The~~to ~~following~~which isthe aCompany ~~summary~~acquired of99% ~~warrants issued and outstanding as~~ of the ~~dates~~outstanding ~~below,~~membership atinterests ~~the~~in ~~exercise~~Van ~~price~~Keuren ~~and~~with the ~~amount~~former ofmembers ~~shares~~ of ~~Common~~Van ~~Stock~~Keuren ~~(these~~retaining ~~warrants~~a ~~have~~1% ~~not been exercised or converted to common shares):~~interest.

	Exercise		As of December 31,
Warrants issued to:	Price		2016		2015		2014
Noteholders, 11/10 Offering	$	0.30		398,221		842,221		798,649
Noteholders, 5/12 Offering (c)	$	0.35		-		-		571,428
Noteholder in 2015 Offering	$	0.15		2,550,000		2,550,000		-
Investors in Subscription Agreements (a)	$	0.15		13,725,000		16,605,000		13,605,000
WL Meyer Legacy Trust	$	0.05		2,300,000		2,300,000		2,300,000
WL Meyer Legacy Trust	$	0.10		150,000		150,000		-
Vertex Energy, Inc. (b)	$	0.11		-		-		-
Vertex Energy, Inc. (b)	$	0.10		-		-		-
				19,123,221		22,447,221		17,275,077

The New Jersey Sports and Exposition Authority has received certification of an amendment to the Solid Waste Management Plan from the New Jersey Department of Environmental Protection (“DEP”) to include the proposed operation of a municipal solid waste transfer station and material recovery facility (“TS/MRF”) at a site located in Jersey City, New Jersey. CleanTech Biofuels and Van Keuren intend to seek the necessary permits and approvals from the New Jersey DEP to build, own and operate the TS/MRF. As part of the acquisition, CleanTech acquired an option to lease the property in Jersey City within 30 days after the final permit issues from the New Jersey DEP. The Company intends to: (1) install its Biomass Recovery Process on the site, and (2) operate the TS/MRF.

~~(a)~~Van ~~Warrants~~Keuren ~~issued~~has had no operations or revenue since inception and has solely been working towards obtaining the permits required to ~~investors~~operate ~~under~~the ~~these~~TS/MRF. ~~Subscription~~As ~~Agreements~~payment ~~can~~for bethe ~~exercised~~acquisition, ~~anytime~~the ~~within~~Company ~~three~~issued ~~years~~in ~~from~~the ~~date~~aggregate 1,000,000 shares of ~~Agreement~~restricted common stock of the Company (par value $0.001) ~~These~~to ~~warrants~~certain ~~currently~~holders ~~expire~~of atmembership ~~various~~interests ~~dates~~in ~~from~~Van ~~August~~Keuren. As of the close of business on June 23, 2016, ~~through~~the ~~May~~Company ~~2018~~stock quote was $0.05. The total assets of Van Keuren at the time of the acquisition were $51,000 (2.3% of the Company’s assets). The liabilities and equity consisted of accounts payable of $27,000 and member equity of $24,000. The assets consist solely of costs incurred towards obtaining the required permits and have been recorded as an intangible asset on our consolidated financial statements. This intangible will be expensed if and when the Company and Van Keuren complete the permit process and begin operations.

~~(b)~~Note ~~These~~4 ~~warrants~~– ~~expired~~Property onand ~~October 22, 2014.~~Equipment

~~(c)~~At December ~~The~~31, ~~last~~our ofproperty ~~these~~and ~~warrants~~equipment ~~expired~~consisted onof: ~~July 5, 2015.~~

Note 8 - Stockholders' Equity (Deficit)

	2017			2016
Computers	$	-		$	-
Furniture and fixtures		15,799			15,799
Plant and equipment		18,700			18,700
		34,499			34,499
Accumulated Depreciation		(34,499	)		(34,499	)
Total	$	-		$	-

InFor ~~August 2013,~~ the ~~Company~~years ~~commenced~~ended December ~~an offering of units~~31, ~~under~~2017 ~~a Subscription Agreement, at a purchase price of $1,000 per unit (Equity Offering 8/13). Each unit consists of: (i) 10,000 shares of the Company’s authorized but unissued restricted Common Stock~~ and ~~(ii) warrants to purchase 30,000 additional shares of Common Stock for a three-year period from the date of issuance of the units at an initial exercise price of $0.15 per share. As of December 31,~~ 2016, ~~the~~we ~~Company~~ had ~~issued~~no ~~6,635,000~~depreciation ~~restricted shares (at $0~~expense.10 per share) of our Common Stock in exchange for $663,500 in investment in this offering. See Subsequent Event footnote for further updates to this offering and other share grants affecting Stockholders Equity.

~~In November 2013, the Company released 4,000,000 shares (at $0.012 per share) from escrow in accordance with the amended technology license previously disclosed in~~ Note 6.5 – Patent

InThe ~~January~~Company ~~2014~~owns US Patent No. 6,306,248 (the “PSC Patent”), which is the underlying technology upon which the BRP Patent is based. The Company ~~issued~~acquired ~~500~~the PSC Patent on October 22, 2008 pursuant to a Patent Purchase Agreement (“Agreement”) with World Waste Technologies, Inc. (“WWT”). As part of the acquisition of the PSC Patent, we also became the licensor of such technology under the existing license agreement between Bio-Products International, Inc., the licensee (“Bio-Products”) and WWT. The Company has paid WWT $600,000 ~~restricted~~and issued warrants to purchase 1,800,000 shares (of Common Stock at $0.~~012~~10 per share) ofand ~~our~~500,000 shares of Common Stock ~~per~~at ~~the~~$0.11 ~~consulting~~per ~~agreement~~share. ~~with~~WWT ~~GWS~~assigned ~~Environmental~~all ~~Consultants.~~of ~~GWS~~its ~~has~~rights, ~~certain~~title ~~expertise~~ and ~~contacts~~interest in the ~~collection~~note, ~~recycling~~warrants, ~~transfer,~~security agreement and ~~disposal~~purchase agreement to Vertex Energy, Inc. (“Vertex”) as a result of ~~MSW~~a ~~and~~merger ~~will~~in March ~~provide~~2009. The warrants had an exercisable term of five years which expired on October 22, 2014. The cost of the ~~Company~~PSC ~~consulting~~Patent ~~for~~acquisition of $600,000 is recorded as a ~~three~~long-~~year~~term ~~period~~asset ~~regarding~~on ~~these~~the ~~items~~Balance Sheet.

In April 2014, the Board approved a grant to certain Board members and management for an aggregate of 4,250,000 shares of restricted common stock (at $0.008 per share). In January 2015, the Board approved a grant to a member of management for 500,000 shares of restricted common stock ($0.01 per share). The Board granted these awards in recognition of the efforts of the recipients towards the furtherance and implementation of the Company’s strategic plan and to induce the recipients to continue those efforts on behalf of the Company. Based on the foregoing, the Board determined such grants were in the best interest of the Company and its stockholders.37

InTable ~~September 2014, a note receivable from a former director matured and was not paid. The note was originally issued in September 2009 to purchase shares~~ of our common stock. As a result, 150,000 shares of restricted common stock, issued at $0.10 per share were forfeited and cancelled. In February 2015, a note receivable from a former director matured and was not paid. The note was originally issued in February 2010 to purchase shares of our common stock. As a result, 150,000 shares of restricted common stock, issued at $0.10 per share were forfeited and cancelled.Contents

On September 1, 2010, the Company issued a promissory note to CMS Acquisition, LLC (“CMS”) in the amount of $100,000 and bearing interest at 6.0% per annum. The note is secured with a security interest in the PSC Patent. In ~~October~~connection ~~2014~~with the financing, the Company issued ~~516~~a warrant to CMS to purchase 2,~~766~~000,000 shares of ~~restricted~~ Common Stock (at a price of $0.0805 per share. The warrant is exercisable at any time for five years from the date of issuance or re-issuance. The note was originally to mature on February 28, 2011. The Company and CMS have entered into various amendments extending the due date, the most recent of which was April 26, 2017, which extended the due date to April 26, 2018. As consideration in these amendments, the Company has: (i) paid $30,000 towards accrued interest to date and principal on the Note, (ii) increased the interest rate to 10% as of May 15, 2011, (iii) re-dated the original warrants to April 26, 2017, (iv) issued new warrants for 300,000 shares of Common Stock with an ~~investor~~exercise ~~upon~~price of $0.05 and exercisable at any time until April 26, 2022, (v) issued new warrants for 150,000 shares of Common Stock with an exercise price of $0.10 and exercisable at any time until April 26, 2022, and (vi) approved the ~~conversion~~assignment of athe ~~Convertible~~note ~~Note~~by CMS to the WL Meyer Legacy Trust as of the March 17, 2015 amendment. As of December 31, 2017, $72,696 face value of this note is outstanding.

InNote ~~February~~6 ~~2016,~~- ~~the~~Technology Board approved a grant to certain Board members and management for an aggregate of 4,000,000 shares of restricted common stock (at $0.013 per share). The Board granted these awards in recognition of the efforts of the recipients towards the furtherance and implementation of the Company®€™s strategic plan and to induce the recipients to continue those efforts on behalf of the Company. Based on the foregoing, the Board determined such grants were in the best interest of the Company and its stockholders. Licenses

InBiomass ~~June~~North ~~2016,~~America ~~the Company completed an acquisition of Van Keuren~~Licensing, ~~as previously disclosed in Note 3, and issued in the aggregate 1,000,000 shares of restricted common stock of the Company (at $0~~Inc.05 ~~per share) to certain holders of membership interests in Van Keuren.~~

InWe ~~August~~own ~~2016,~~an aexclusive ~~note~~license ~~receivable~~in ~~from~~the aUnited ~~former~~States ~~director~~and ~~matured~~Canada ~~and~~to ~~was~~use ~~not~~the ~~paid.~~Biomass ~~The~~Recovery ~~note~~Process ~~was~~(See ~~originally~~Note ~~issued~~3 in– ~~August~~Mergers/Acquisitions). ~~2007~~We tohave ~~purchase~~recorded ~~shares~~a oflong-term ~~our~~asset ~~common~~of ~~stock~~approximately $1.6 Asmillion afor ~~result,~~the ~~150,000~~value ~~shares~~of this license. Amortization of ~~restricted~~this ~~common~~asset ~~stock,~~will ~~issued~~begin atupon ~~$0.15~~commencement ~~per~~of ~~share~~the ~~were~~use ~~forfeited~~of ~~and~~the ~~cancelled~~Biomass Recovery Process.

In ~~September~~accordance ~~2016~~with a November 2013 amendment, the Company ~~issued~~has ~~750,000~~an ~~shares~~exclusive oflicense ~~common~~in ~~stock~~the United States and Canada to use the Biomass Recovery Process and includes no performance requirements on the Company; the license agreement is for a ~~consultant~~term of 21 years from the date of the amendment or the life of any patent issued for ~~business~~the ~~transactions~~Biomass Recovery Process, including any amendments, modifications or extensions; and ~~financing~~the ~~services~~license torequires bethat ~~provided~~the ~~over~~Company pay a ~~one-year~~royalty ~~term~~in the amount of $2.00 per ton of MSW used in the Biomass Recovery Process to the Licensor.

40Bio-Products International, Inc.

As disclosed in Note 95 - ~~Related~~Patent, ~~Party~~the ~~Transactions~~Company acquired the PSC Patent in 2008 and as a result, became the licensor to Bio-Products for the PSC Patent pursuant to a Master License Agreement dated as of August 18, 2003 (the “PSC License Agreement”). Pursuant to the terms of the PSC License Agreement, Bio-Products (a wholly-owned subsidiary of Clean Earth Solutions, Inc., “CES”) is the exclusive licensee of the PSC Patent and has the right to sublicense the technology that is part of the PSC Patent (but not the BRP Patent) to any party. In addition, we are entitled to be paid 5% of any revenue derived by Bio-Products from the use of the technology and 40% of any sublicensing fees paid to Bio-Products for the use of the technology. The Master License Agreement is for a term of 20 years that commenced on August 18, 2003. On September 22, 2010, the Company sent a Notice of Breach to Bio-Products, which included removing the exclusivity of the license. We received a response from Bio-Products on November 5, 2010 disputing our claims. In February 2011, we became aware that Bio-Products effected a transfer of the license in violation of the PSC License Agreement. As a result, on March 21, 2011, we sent a notice of termination to Bio-Products and the transferee terminating the License Agreement. In June 2011, Steve Vande Vegte, a shareholder in CES, filed a lawsuit against various parties, including the Company. The only Cause of Action against the Company is for Declaratory Relief seeking to avoid our March 2011 termination of the license to which Mr. Vande Vegte is not a party. On August 5, 2011, the Company filed a demurrer requesting that the court dismiss the case on the grounds that Mr. Vande Vegte lacks standing to pursue a claim concerning the license and that the claim raised in the complaint is not ripe. The court granted our demurrer to dismiss Cleantech from this lawsuit on December 8, 2011.

~~The~~25 ~~Company~~Van ~~has~~Keuren entered into stock purchase agreements with its executive officers and certain members of the Board of Directors. The executive officers and directors issued notes to the Company in exchange for their stock purchases. These notes and accumulated interest are recorded as notes receivable in Stockholders’ Deficit.LLC

InAs ~~September~~discussed ~~2013~~in Note 3, the Company ~~hired,~~entered oninto aan ~~part-time~~Acquisition ~~basis,~~Agreement awith ~~Chief~~25 ~~Technology~~Van ~~Officer~~Keuren ~~(CTO)~~LLC ~~and a VP-Business Development~~ (~~VP-BD~~“Van Keuren”). ~~These~~The ~~individuals~~total ~~maintain~~assets ~~their~~of ~~engineering~~Van ~~firm~~Keuren ~~Fenton~~at ~~Engineering~~the ~~International~~time ~~(FEI)~~of onthe aacquisition ~~full-time~~were ~~basis~~$51,000. ~~and~~The ~~receive~~assets nohave ~~salary~~been inrecorded ~~their~~as ~~part-time~~an ~~positions~~intangible ~~but~~asset ~~are~~in ~~eligible~~our ~~for~~consolidated ~~grants~~financial ~~of stock options~~statements. WeThis ~~have~~intangible ~~used~~will ~~and~~be ~~continue~~expensed toif ~~use~~and ~~their~~when ~~services.~~the AsCompany ~~of December 31, 2016~~ and ~~2015,~~Van ~~all~~Keuren ~~amounts~~complete ~~have~~the ~~been~~permit ~~paid~~process toand ~~FEI~~begin ~~except for approximately $48,000~~operations.

~~Beginning~~All inintangible ~~2009,~~assets ~~the~~are ~~Company~~reviewed ~~has~~for ~~provided~~impairment ~~advances~~whenever toevents ~~two~~or ~~employees~~other –changes Edin ~~Hennessey~~circumstances ~~and~~indicate ~~Mike~~that ~~Kime. Mr. Kime resigned from his position with~~ the ~~Company~~carrying ~~effective~~amount may ~~June~~not ~~21,~~be ~~2010~~recoverable. AsAn ofimpairment ~~December~~charge ~~31,~~is ~~2016~~recognized ~~and~~if ~~2015,~~ the ~~aggregate~~carrying ~~balance~~amount of ~~Mr.~~an ~~Hennessey’s~~intangible ~~advances~~asset ~~totaled~~exceeds ~~approximately~~its ~~$33,000.~~implied ~~Mr.~~fair ~~Kime’s advance has been netted against monies due and paid to him in 2016 pursuant to a settlement agreement following his departure from the Company~~value. ~~The balance of Mr. Hennessey’s advances are included in Prepaids and Other Current Assets on the Balance Sheet.~~

Two members of our current Board of Directors, James Russell and David Bransby, are parties in investments made in our convertible note offerings. As of December 31, 2016 and 2015, the aggregate amount due on these investments, including interest, is approximately $677,000. 38

InTable ~~June and October~~ of ~~2016 the Company issued notes payable, with no conversion feature, to a current Board of Directors member, James Russell, in the amounts of $35,000 and $50,000, respectively.~~Contents

Note 107 – ~~Share-based Payments~~ Debt

The Company recognizes share-based compensation expense for all share-based payment awards including stock options and restricted stock issued to employees, directors and consultants and is measured at the grant date, based on the estimated fair value of the award, and is recognized as expense over the requisite service period. The Company has no awards with market or performance conditions.

	December 31, 2017			December 31, 2016
Convertible Notes Payable (2009 Offering), which are made up of various individual notes with an aggregate face value of $189,185 and $199,790 at December 31, 2017 and 2016, respectively, due one year from date of note, interest at 6.0%	$	189,185		$	199,790
Convertible Notes Payable (11/10 Offering), which are made up of various individual notes with an aggregate face value of $1,877,162 at December 31, 2017 and 2016, due one year from date of note, interest at 6.0%		1,877,162			1,877,162
WL Meyer Legacy Trust (formerly CMS Acquisition LLC) Note Payable, with a face value of $72,696 and $77,696 at December 31, 2017 and 2016, respectively, due on April 26, 2018, interest at 6.0% thru May 15, 2011; 10.0% thereafter		72,696			77,696
Convertible Notes Payable (5/12 Offering), made up of various individual notes with a face value of $583,510, due in 18 months from date of note, interest at 6.0%		583,510			583,510
Convertible Note Payable (2/14 Offering), which is made up of one note with a face value of $100,000 due in 18 months from date of note, interest at 6.0%		100,000			100,000
Convertible Note Payable (2015 Offering), which is made up of one note with a face value of $85,000 due in 18 months from date of note, interest at 6.0%		85,000			85,000
Note Payable, which is made up of one note with a face value of $50,000 due in six months from the date of note, interest at 9.0%		50,000			50,000
Note Payable, which is made up of one note with a face value of $35,000 due in six months from the date of note, interest at 9.0%		35,000			35,000
Note Payable, which is made up of one note with a face value of $15,000 due March 20, 2017, interest at 6.0%		15,000			-
Note Payable, which is made up of one note with a face value of $25,000 due October 18, 2018 interest at 6.0%		25,000			-
Total debt		3,032,553			3,008,158
Current maturities		(3,032,553	)

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