Amincor : Amended Footnotes to Consolidated Financial Statement

AMINCOR, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2020

1. Organization and Nature of Business

ORGANIZATION

Amincor, Inc. ("Amincor") was incorporated on October 8, 1997 and is headquartered in New York, New York. Amincor's operations are derived from its subsidiary company T- Environmental, Inc. ("T-Env")

Amincor, along with T-Env, is herein referred to as the "Company."

T-Env was formed on November 10, 2014 as a new subsidiary of the Company. In 2015 T-Env formally began operations and is in the business of servicing the retail petroleum fueling needs and providing environmental remediation and consulting services to its customers.

DISCONTINUED OPERATIONS AND ASSET SALES

The consolidated financial statements include the discontinued operations and asset sales of Advanced Waste & Water Technology, Inc. ("AWWT"), Baker's Pride, Inc. ("BPI") Environmental Quality Services, Inc. ("EQS"), Epic Sports International, Inc. ("ESI"), Masonry Supply Holdings Corp. ("Masonry"), Tulare Holdings, Inc. ("Tulare"), and Tyree Holdings Corp. ("Tyree"). See Note 10 for further disclosure of discontinued operations or asset sales.

2. Going Concern and Management Plans

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has suffered recurring net losses and had a working capital deficit of $139,131,044 and a stockholders' deficiency of $140,386,854 as of December 31, 2020. The Company's operating subsidiaries are heavily dependent on on-going funding from its lender. These matters raise substantial doubt about the Company's ability to continue as a going concern. The Company's ability to continue as a going concern is dependent upon its ability to raise additional funds through debt and equity financing and its lender's' willingness to continue to fund operations. Management's additional plans to continue as a going concern are as follows:

• T-Environmental

1. Install emergency generators for first responders at its customers' retail petroleum locations through the metropolitan New York area outside of the 500 year flood plain.

1. Provide consulting services to developers that are decommissioning coal fired power plants and convert them into waste to energy power plants.

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AMINCOR, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2020

• Amincor, Inc.

1. Secure new financing from a financial institution to provide needed working capital to the subsidiary companies.

While management believes that it will be able to implement the plans contemplated above and continue to obtain financing from its lender in such amounts sufficient to sustain operations at the Company's current levels, if the Company is not able to do so and if the Company is unable to become profitable, the Company would likely need to modify its plans and/or cut back on its operations and potentially seek protection in federal bankruptcy court. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

3. Summary of Significant Accounting Policies

BASIS OF PRESENTATION

The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP").

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of Amincor and all of its consolidated subsidiaries disclosed in Note 1. All intercompany balances and transactions have been eliminated in consolidation.

USE OF ESTIMATES

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Significant estimates include reserves and write-downs related to receivables and inventories, earnings on uncompleted contracts, the recoverability of long-lived assets, the valuation allowance relating to the Company's deferred tax assets and stock- based compensation. Actual results could differ from those estimates. Certain of the Company's estimates, including the carrying amount of the intangible assets, could be affected by external conditions, including those unique to the Company and general economic conditions. It is reasonably possible that these external factors could have an effect on the Company's estimates and could cause actual results to differ from those estimates.

REVENUE RECOGNITION

T-Env

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AMINCOR, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2020

T-Env provided environmental consulting, site assessment, analysis and management of site remediation for owners and operators of property with petroleum storage facilities. Revenue is recognized as services are provided, prices are fixed and determinable, and collectability is reasonably assured. Revenues are reduced for estimated discounts and allowances, if any.

ACCOUNTS RECEIVABLE

Accounts receivable represents amounts due from customers that are not factored by the Company, are full recourse to the Company and are reported net of an allowance for doubtful accounts. The allowance for doubtful accounts is based on management's estimate of the amount of receivables that will actually be collected after analyzing the credit worthiness of its customers and historical experience, as well as the prevailing business and economic environment. Accounts are written off when significantly past due and after exhaustive efforts at collection. Recoveries of accounts receivables previously written off are recorded as income when subsequently collected.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment is stated at cost, less accumulated depreciation and amortization. Depreciation is calculated using the straight-line method over the estimated useful lives of the respective assets. Leasehold improvements are amortized over the lesser of their estimated useful lives or the remaining lease terms. Expenditures for repairs and maintenance are charged to operations as incurred. Renewals and betterments are capitalized. Upon the sale or retirement of an asset, the related costs and accumulated depreciation are removed from the accounts and any gain or loss is recognized in the results of operations.

ALLOWANCE FOR LOAN LOSSES

An allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses charged to operations. A loan is determined to be non- accrual when it is probable that scheduled payments of principal and interest will not be received when due according to the contractual terms of the loan agreement. See Note 8.

INCOME TAXES

The Company accounts for income taxes using the liability method, which provides for an asset and liability approach to accounting for income taxes. Under this method, deferred tax assets and liabilities are recorded for future tax effects of temporary differences between the financial reporting and tax basis of assets and liabilities, and measured when using the current tax rates and laws that are expected to be in effect when the underlying assets or liabilities are anticipated to be recovered or settled. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount of tax benefits expected to be realized.

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AMINCOR, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2020

In applying the liability method, the financial statement effects of an uncertain tax position be recognized based on the outcome that is more likely than not to occur. Under the criterion the most likely resolution of an uncertain tax position should be analyzed based on technical merits and on the outcome that would likely be sustained under examination.

EARNINGS (LOSS) PER SHARE

Basic earnings (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings (loss) per share considers the potential dilution that could occur if securities or other contracts to issue common stock were exercised or could otherwise cause the issuance of common stock.

Convertible Preferred Stock Shares totaling 1,752,823 are excluded from the calculation of the weighted average dilutive common shares because their inclusion would have been anti-dilutive for the year ended December 31, 2020

STOCK-BASED COMPENSATION

The Company measures the cost of services received in exchange for an award of equity instruments based on the fair value of the award. For employees, the fair value of the award is measured on the grant date and for non-employees, the fair value of the award is generally re-measured on vesting dates and interim financial reporting dates until the service period is complete. The fair value amount is then recognized over the period during which services are required to be provided in exchange for the award, usually the vesting period. The Company estimates the fair value of the awards granted based on the fair value of the stock on the date of the grant. Awards granted to directors are treated on the same basis as awards granted to employees.

4. Accounts Receivable and Factoring

Accounts Receivable consists of:

• Receivables generated during the regular course of business
• Amounts due from the factor when receivables are sold and collected

T-Env entered into a collection factoring agreement on May 1, 2016 in exchange for a 0.5% of invoice value fee.

5. Property, Plant and Equipment

As of December 31, 2020, property, plant and equipment from continuing operations consisted entirely of office equipment.

6. Loans Payable

Loans payable consist of the following at December 31, 2020:

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AMINCOR, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2020

T-Env Revolving working capital line of credit with its lender bearing
interest at 18% per annum. The loan is secured by a
subordinated interest in T-Env's assets.	$	37,738,640
Amincor, Inc. loan and security agreement with its lender. No		4,275,279
maturity date or interest rate is specified
Total loans and amounts payable to related parties	$	42,013,919

Interest expense for these loans amounted to $7,393,418 for the year ended December 31, 2020.

7. Commitments and Contingencies

The Company is not presently a party to any litigation, claim or assessment against it, and is unaware of any unasserted claim or assessment which will have a material effect on the financial position or future operations of the Company. No director, executive officer or affiliate of the Company or owner of record or beneficially of more than five percent of the Company's common stock is a party adverse to the Company or has a material interest adverse to the Company in any proceeding.

8. Stockholders' Deficiency

CONVERTIBLE PREFERRED STOCK

The Company, at its sole discretion, may at any time, or from time to time, redeem on a pro rata basis issued and outstanding preferred shares by paying the holders of preferred stock $100 for each share redeemed. In the event of liquidation, dissolution, or winding up of the Company, the preferred shares are entitled to a payment of $100 per share before any payment is made to, or set aside for, the holders of common shares.

Holders of convertible preferred shares are entitled to convert their shares into Class B common shares on the basis of 10 shares of common stock for each preferred share.

COMMON STOCK

The holders of both Class A and Class B common shares are entitled to dividends, if declared by the Board of Directors. However, no dividends can be paid on common stock until all shares of convertible preferred stock have been redeemed or converted into common stock. The holders of Class B common stock do not have any voting rights. In the event of liquidation, the holders of both classes are entitled to share ratably in all assets remaining after payment of all liabilities and any preferences on preferred stock that may be then outstanding. The common stockholders do not have any cumulative or preemptive rights.

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