UNITED
STATES

SECURITIES
AND EXCHANGE COMMISSION

Washington,
DC 20549



FORM
10-K



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



For
the fiscal year ended December 31, 2018



or



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



For
the transition period from _____________ to _____________



Commission
file number: 000-52444



PLASTIC2OIL,
INC.

(Exact
name of registrant as specified in its charter)



|Nevada                                                            |  | 90-0822950                          
|----------------------------------------------------------------- |  | ------------------------------------
|(State
    or other jurisdiction ofincorporation or organization) |  | (IRS
    EmployerIdentification No.)



20
Iroquois StreetNiagara Falls, NY 14303

(Address
of Principal Executive Offices) (Zip Code)



Registrant’s
telephone number: (716) 278-0015



Securities
registered pursuant to Section 12(b) of the Act: None.



Securities
registered pursuant to Section 12(g) of the Act: Common Stock, par value $0.001 per share.



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 Section 15(d) of the Exchange Act. Yes
[  ] No [X]



Indicate
by check mark whether the 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 preceding 12 months (or for such shorter period that the registrant was required to file such report(s)),
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 of this chapter) 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 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. [  ]



Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller
reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.



| | Large
    accelerated filer [  ] | Accelerated
    filer [  ]       
| | -------------------------------- | ---------------------------------
| | Non-accelerated
    filer [X]    | Smaller
    reporting company [X]
| |                                  | Emerging
    growth company [  ] 



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



The
aggregate market value of the voting and non-voting common equity held by non-affiliates of the Registrant was approximately $2.4
million as of June 30, 2018 based upon the closing price of $0.02 per share on June 30, 2018.



As
of June 3, 2019, there were 124,756,158 shares of the Registrant’s common stock, $0.001 par value, outstanding.



Documents
Incorporated by Reference



None


















PLASTIC2OIL,
INC.

Table
of Contents



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    I  
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|PART
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2







CAUTIONARY
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS



This
annual report on Form 10-K (“Report”) contains “forward looking statements” within the meaning of applicable
securities laws. Such statements include, but are not limited to, statements with respect to management’s beliefs, plans,
strategies, objectives, goals and expectations, including expectations about the future financial or operating performance of
our Company and its projects, capital expenditures, capital needs, government regulation of the industry, environmental risks,
limitations of insurance coverage, and the timing and possible outcome of regulatory matters, including the granting of patents
and permits. Words such as “expect”, “anticipate”, “intend”, “attempt”, “may”,
“will”, “plan”, “believe”, “seek”, “estimate”, and variations of such
words and similar expressions are intended to identify such forward looking statements. These statements are not guarantees of
future performance and involve assumptions, risks and uncertainties that are difficult to predict.



These
statements are based on and were developed using a number of factors and assumptions including, but not limited to: stability
in the U.S. and other foreign economies; stability in the availability and pricing of raw materials, energy and supplies; stability
in the competitive environment; the continued ability of our Company to access cost effective capital when needed; and no unexpected
or unforeseen events occurring that would materially alter the Company’s current plans. All of these assumptions have been
derived from information currently available to the Company including information obtained by our Company from third party sources.
Although management believes that these assumptions are reasonable, these assumptions may prove to be incorrect in whole or in
part. As a result of these and other factors, actual results may differ materially from those expressed, implied or forecasted
in such forward looking information, which reflect our Company’s expectations only as of the date hereof.



Factors
that could cause actual results or outcomes to differ materially from the results expressed, implied or forecasted by the forward-looking
statements include risks associated with general business, economic, competitive, political and social uncertainties; risks associated
with changes in project parameters as plans continue to be refined; risks associated with failure of plant, equipment or processes
to operate as anticipated; risks associated with accidents or labor disputes; risks associated in delays in obtaining governmental
approvals or financing, or in the completion of development or construction activities; risks associated with financial leverage
and the availability of capital; risks associated with the price of commodities and the inability of our Company to control commodity
prices; risks associated with the regulatory environment within which our Company operates; risks associated with litigation including
the availability of insurance; and risks posed by competition. These and other factors could cause actual results or outcomes
to differ materially from the results expressed, implied or forecasted by the forward looking statements.



Some
of the forward-looking statements may be considered to be financial outlooks for purposes of applicable securities legislation
including, but not limited to, statements concerning capital expenditures. These financial outlooks are presented to allow the
Company to benchmark the results of our Company’s Plastic2Oil business. These financial outlooks may not be appropriate
for other purposes and readers should not assume they would be achieved.



Our
Company does not intend to, and the Company disclaims any obligation to, update any forward-looking statements (including any
financial outlooks), whether written or oral, or whether as a result of new information, future events or otherwise, except as
required by law.



Unless
otherwise noted, references in this Report to “P2O”, the “Company,” “we,” “our”
or “us” means Plastic2Oil, Inc., a Nevada corporation



3







PART
I



ITEM
1. BUSINESS



Overview



We
are a technology development and licensing company. We have developed technology that converts waste plastic into ultra-clean,
ultra-low sulphur fuel products through our proprietary plastic-to-oil, or P2O, process. Previously, our business model was the
sale of fuel produced from our own P2O processors and subsequently we sought to manufacture P2O processors for sale to commercial
customers. These prior experiences allowed the Company to hone and solidify its technology, however, the capital requirements
were significant. For this and other reasons, management shifted its business strategy to technology development and licensing
model. We no longer produce and market fuel for sale and no longer manufacture processors ourselves, instead we rely on third
party manufacturers. Under our current business model, we seek to license our technology to companies that generate significant
waste plastics and desire to have a P2O processor on site to convert the plastics to useable fuel for their operations. We charge
our customers for the P2O processor and related equipment, a royalty fee based on the amount of fuel generated, a licensing fee
for the use of our proprietary catalyst, and a set up and service fee.



As
of May 2019, we had three fully-permitted, P2O processors at our Niagara Falls, NY facility and have the capability to produce
and store the fuels at, and ship from, such facility. However, it is our strategy to license our P2O technology and know-how to
licensees for their use in producing fuel for their own operations directly from the waste plastics that such licensees generate
from their own operations.



Of
our three P2O processors, one is dedicated to research and development and two dedicated to fuel production during pilot runs
for customer demonstration. We have components for two additional processors, Nos. 4 and 5, which are in process of assembly for
future sale. For the reasons described in Item 7, Management’s Discussion and Analysis of Financial Condition and Results
of Operations, our three P2O processors have been idle since late December 2013 and assembly of processors #4 and #5 was suspended.
In light of the change in our business model, management has determined that it only requires an operational processor to demonstrate
the Company’s technology. Thus, our processors are likely to remain idle or incomplete, as applicable. We currently are
offering one of our processors for sale, along with certain real estate in an effort to raise operating capital



We
conduct our P2O business at our facilities located in Niagara Falls, New York. Our corporate address is 20 Iroquois Street, Niagara
Falls, NY 14303.



Organizational
History



We
were incorporated on April 20, 2006 under the laws of the State of Nevada under the name 310 Holdings Inc. (“310”).
On April 24, 2009, the Company’s founder, former CEO and Chief of Technology, John Bordynuik, purchased 63% of the issued
and outstanding shares of 310 and became the Chairman of the Board of Directors and Chief Executive Officer. On June 25, 2009,
we purchased certain assets from John Bordynuik, Inc., a corporation founded by Mr. Bordynuik. The assets acquired included tape
drives, computer hardware, servers and a mobile data recovery container to read and transfer data from magnetic tapes. From inception
until August 2009, we were a shell company within the meaning of the rules of the Securities and Exchange Commission. On August
24, 2009, we acquired all of the outstanding shares of Javaco, Inc., a wholly owned subsidiary of Domark International, Inc. On
September 30, 2009, we acquired 100% of the issued and outstanding equity interests of Pak-It, LLC. We formed JBI (Canada) Inc.
on February 9, 2010 for purposes of distributing Pak-It products in Canada. We formed Plastic2Oil of NY, #1, LLC on May 4, 2010,
for the development and commercialization of our Plastic2Oil business in Niagara Falls, NY.



On
October 5, 2009, we changed our corporate name to JBI, Inc.



On
August 24, 2009, the Company acquired Javaco, Inc. (“Javaco”), a distributor of electronic components, including home
theater and audio video products. On July 9, 2012, we announced the closure of our Javaco operations and sold substantially all
of its assets to an unrelated third party. In July 2012, the Company closed Javaco and sold substantially all its inventory and
fixed assets.





4







In
September 2009, the Company acquired Pak-It, LLC (“Pak-It”). Pak-It operated a bulk chemical processing, mixing, and
packaging facility. It also developed and patented a delivery system that packages condensed cleaners in small water-soluble packages.
.. On February 10, 2012, we sold substantially all the assets of Pak-It.



In
December 2010, the Company entered into a twenty year lease for a recycling facility in Thorold, Ontario. During the period ended
December 31, 2013, the Company determined that it would no longer operate the facility and shut down all operations. The property
was vacated on November 10, 2015 and the lease was terminated on January 15, 2016 effective October 31, 2015.



On
July 31, 2014, we changed our corporate name to Plastic2Oil, Inc. On January 6, 2015, we changed the names of our two Canadian
subsidiaries from JBI (Canada) Inc. to Plastic2Oil (Canada), Inc., and from JBI RE ONE, Inc. to Plastic2Oil RE ONE, Inc.



On
March 2, 2018, we sold the Data Business. There were no operations in the Data Business during 2017.



Our
common stock is quoted on the OTCQB Market under the symbol “PTOI”.



Organizational
Chart



The
following outlines our corporate structure, as of May 31, 2019, and identifies the jurisdiction of organization of each of our
material subsidiaries. Each material subsidiary is wholly-owned by the company.



|Plastic2Oil,
    Inc.         | - | Parent
    company with corporate office in Niagara Falls, NY.                                               
|----------------------------- | - | -------------------------------------------------------------------------------------------------------------
|                              |   |                                                                                                              
|Plastic2Oil
    of NY #1, LLC | - | Operates
    our P2O business in Niagara Falls, NY.                                                          
|                              |   |                                                                                                              
|Plastic2Oil
    (Canada) Inc. | - | Conducts
    our P2O business in Canada, including management of our idle Ontario, Canada fuel blending site.
|                              |   |                                                                                                              
|JBI
    RE#1, Inc.            |   | Real
    Estate holding subsidiary operating out of the Niagara Fall, NY                                     
|                              |   |                                                                                                              
|Plastic2Oil
    RE ONE, Inc.  |   | Real
    Estate subsidiary operating out of Ontario, Canada                                                  



P2O
Overview



We
are a technology development and licensing company. We have developed technology that converts waste plastic into ultra-clean,
ultra-low sulphur fuel products through our proprietary plastic-to-oil, or P2O, process. We have constructed several fully operational
P2O processors to demonstrate our technology and process to potential customers. Previously, our business model was the sale of
fuel produced from our own P2O processors and subsequently we sought to manufacture P2O processors for sale to commercial customers.
These prior experiences allowed the Company to hone and solidify its technology, however, the attendant capital requirements management
were significant. For this and other reasons, management shifted its business strategy to technology development and licensing
model. We no longer produce and market fuel for sale and no longer manufacture processors ourselves, instead we rely on third
party manufactures. Under our current business model, we seek to license our technology to companies that generate significant
waste plastics and desire to have a P2O processor on site to convert the plastics to useable fuel for their operations. We charge
the company for the P2O equipment, a royalty fee based on the amount of fuel generated, a license fee for the use of our proprietary
catalyst, and a set up and service fee.





5







We
provide environmentally-friendly solutions through our processors and technologies. Our primary offering is our Plastic2Oil®,
or P2O®, solution, which is our proprietary process that converts waste plastic into fuel through a series of chemical reactions
(our “P2O business”).



During
the years ended December 31, 2018 and 2017, neither manufacturing nor sales activity took place. We plan to grow mainly from sale
of P2O equipment, a royalty fee based on the amount of fuel generated, a license fee for the use of our proprietary catalyst,
and a set up and service fee. We continue seeking opportunities to execute on our business strategy with the goal of becoming
a leading North American company whose technology transforms waste plastic into ultra-clean, ultra-low sulphur fuel. We have years
of operating data and have solved numerous challenges that vexed the plastics-to-oil industry. Since inception we have produced
approximately 670,000 gallons of fuel. Our P2O processors have evolved into a modular solution with the completion of our third
P2O processor in 2013. We use third party contract manufacturers to supply us with many of the key modular components of our processors,
including the kilns, distillation towers and other key components that require specialized machining and fabrication.



Our
proprietary P2O process converts waste plastic into fuel through a series of chemical reactions. We developed this process in
2009 and began very limited commercial production in 2010 following our receipt of a consent order from the New York State Department
of Environmental Conservation (“NYSDEC”) allowing us to commercially operate our first large-scale P2O processor at
our Niagara Falls, New York facility. Currently, we have three fully-permitted P2O processors, which are capable of producing
Naphtha, Fuel Oil No. 2 and Fuel Oil No. 6, all of which are fuels produced to the specifications published by ASTM. One fully-permitted
P2O processor is dedicated to research and development activities. We have components for two additional processors at an outside
vendor, which were impaired in the 4th quarter of 2016. Our P2O process is capable of producing two by-products, an
off-gas similar to natural gas and a petcoke carbon residue.



We
shut down our fuel production late in the fourth quarter of 2013 due to severe cold weather that caused damage to condensers and
other components of our processors and we have not resumed fuel production due to the repair costs as well as our shift in strategy
toward manufacturing processors for sale, as opposed to producing and selling fuel products. Management estimates that the repair
of the processors will require the expenditure of between $275,000 and $300,000. An additional $500,000 of startup working capital
will be required to resume operations mainly for hiring operational personnel and incremental overhead expenses. We lacked the
working capital or access to bank credit to make these repairs. We are reviewing our financing options, including the sale of
shares of our common stock or other securities, and or the sale of property and or equipment in order to allow us to obtain sufficient
funds to possibly recapitalize the company.



Currently,
we understand that there are several plastic-to-oil processes operational globally. These other processes employ a wide range
of technologies and yield varying purities of fuel output. We believe that our process has many advantages over many other commercially
available processes in that our P2O solution requires a comparatively less initial capital investment and yields high-quality,
ultra-low sulphur fuel, with no need for further refinement. Additionally, our process uses comparatively little energy and physical
space, which, in our view, makes it well suited for high-volume production and expansion to multiple sites.



P2O
Process and Operations



Our
patent-pending P2O conversion process involves the cracking of the plastic hydrocarbon chains at ambient pressure using a catalyst.
There are various processes in existence for converting plastic and other hydrocarbon materials into products for use in the production
of fuels, chemicals and recycled items. These processes include: pyrolysis (conversion using dry materials at high pressure and
temperature in the absence of oxygen), catalytic conversion (conversion using a catalyst for stimulating a chemical reaction),
depolymerization (conversion using superheated water and high pressure and temperature) and gasification (conversion at high temperature
using oxygen or steam).





6







We
have developed our P2O processors with the ability to be continuously running, energy-efficient and environmentally-friendly while
converting waste plastics into end-user ready, and ultra-clean, ultra-low sulfur fuels. The processors are periodically shut-down
for maintenance and residue removal during operations. The fuels produced can be used directly by our customers without further
refining or processing. Over a three year development period from 2009-2012, we scaled our processing operations from a one gallon
processor to three processors, each permitted to feed up to 4,000 pounds of feedstock per hour. In prior years, some of the milestones
that we have reached include:



| | ● | Manufacturing
    and operating multiple processors at our Niagara Falls, NY site;                                                                                             
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                
| | ● | From
    inception, the processors were designed with safety and green emissions as top priorities;                                                                            
| |   |                                                                                                                                                                                
| | ● | Standardization
    and modularization of the components of our processors;                                                                                                    
| |   |                                                                                                                                                                                
| | ● | Ability
    to continuously feed waste plastic 24 hours a day;                                                                                                                 
| |   |                                                                                                                                                                                
| | ● | Approximately
    86% of waste plastic by weight is converted to liquid fuel conversion;                                                                                       
| |   |                                                                                                                                                                                
| | ● | Approximately
    8% of waste plastic by weight is converted to gas and is used to fuel the process;                                                                           
| |   |                                                                                                                                                                                
| | ● | Operating
    at atmospheric pressure, not susceptible to pinhole leaks and other problems with pressure and vacuum-based systems;                                             
| |   |                                                                                                                                                                                
| | ● | No
    requirement for incinerators, thermal oxidizers or scrubbers and no stack monitoring is necessary;                                                                      
| |   |                                                                                                                                                                                
| | ● | Three
    stack tests (two on the initial processor and one on the second processor) conducted by Conestoga-Rovers & Associates
    (“CRA”), prove emissions are extremely low;
| |   |                                                                                                                                                                                
| | ● | Process
    validation by SAIC Energy, Environment & Infrastructure, LLC and IsleChem, LLC; and                                                                                
| |   |                                                                                                                                                                                
| | ● | Permitted
    to operate three processors commercially in New York by the NYSDEC.                                                                                              



Processor
Input



Waste
Plastics: We are able to feed mainly mixed unwashed waste plastics into the Plastic2Oil processors. Waste plastic is widely
available, and we are focused on maximizing the types and densities of the plastic we procure for optimal processor performance.



Heat
Transfer Fluid: We are also able to include hydrocarbon base fluid as feed into the P2O processors.



Processor
Output



We
are currently permitted to feed two tons, or 4,000 pounds, of waste plastic per hour into each processor by a continuous conveyor
belt where it is heated by a burner that mainly burns off-gases produced from the P2O process. Plastic hydrocarbons are cracked
into various shorter hydrocarbon chains and exit in a gaseous state. Any residue, metals, and or non-usable substances remain
in the reactor and are periodically removed. Through our proprietary process, Fuel Oil No. 6, Fuel Oil No. 2, and Naphtha are
condensed from the reactor through the remainder of the process. The fuel output is then transferred to storage tanks automatically
by the system. Our process is mainly operated by an automated computer system that controls the conveyor feed rate, system temperatures,
off-gas systems, and the pumping out of newly created fuel to storage tanks. The plastic to liquid fuel conversion is approximately
86% by weight. Therefore, twenty tons of plastic can be processed into approximately 4,100 gallons of fuel. We have three processors
at our Niagara Falls, NY facility. One processor was dedicated to research and development and all three processors remained idle
due to maintenance and repair issues.



Fuel
Produced: The fuel produced in our processors is ultra-low sulfur fuel and is ready for end-users without the need for further
refinement.





7







Off-gas:
Approximately 8-10% of waste plastics fed into the processors are converted to a mixture of hydrogen, methane, ethane, butane
and propane gas, which we call “off-gas”. Once our processors are in a state to begin the P2O process, they use their
own off-gas to fuel the burners in the process.



Residue:
There is approximately 2-4% residue from our process, which is petroleum coke or carbon black (which we call “petcoke”)
that needs to be removed on a periodic basis to a waste facility.



Feedstock



Our
P2O process primarily uses post-commercial and industrial waste plastic that might otherwise be sent to a landfill by the commercial
and industrial producers of such waste plastic. We believe that this can be costly for these producers due to the large volumes
of plastic waste that they generate. As such, our business model is premised on the processor’s ability to accept numerous
types of waste plastics from such sources at a relatively low cost. We believe that our processor ability to accept mainly mixed,
unwashed waste plastics is a significant advantage of our P2O process compared to similar operations in our industry.



Fuel
Products



Our
P2O process makes both light and heavy fuel products which are Naphtha, Fuel Oil No. 2 and Fuel Oil No. 6, as defined by ASTM.
Our process also generates two main by-products, a reusable off-gas similar to natural gas and a carbon residue known as petcoke.



Naphtha
is a very light fuel product that is used as a cutting component for both high and regular grade gasoline. Fuel Oil No. 2 is a
mid-range fuel commonly known as diesel and has numerous transportation, manufacturing, and industrial uses. Fuel Oil No. 6 is
a heavy fuel generally used in industrial boilers and ships. Our process produces high quality, ultra-low sulphur fuels, without
the need for further refinement which enables fuel sales directly from the processors to the end-user.



The
reusable off-gas that is produced by the P2O process is used to fuel the burner that heats the entire processor.



P2O
Facilities



We
currently own one main facility (located in Niagara Falls, NY) that we use in our P2O business, as well as a second owned facility,
our fuel blending site (located in Thorold, Canada), for use in the future. These are briefly described below. Additional information
on our properties can be found in Item 2 of this report.



Niagara
Falls, NY facility: Our Niagara Falls, NY facility currently is comprised of two buildings that are owned by the Company, a 10,000
square foot building that currently houses one commercial-scale P2O processor and one P2O processor devoted to research and development
activities, and a 7,200 square foot building housing the third commercial-scale P2O processor. Our Niagara Falls operations are
situated on eight acres that can accommodate expansion of our operations. This facility also serves as the center of our research
and development operations and our administrative offices.



Blending
Site: We own a 250,000 gallon fuel-blending facility in Thorold, Ontario, Canada, which, when in use, would allow us to blend
and self-certify certain fuels that are produced from our process to meet government specifications.



All
properties are pledged under various agreements as described in Item 7, Transactions with Related Parties.



Sales
and Distribution



Our
P2O business is a commercial manufacturing and production business. We plan to grow mainly from the licensing of technology and
the sale of processors.





8







Suppliers



We
rely on third party manufacturers for the manufacture of many components of our processors, including kilns and distillation towers.



During
the years ended December 31, 2018 and 2017, two suppliers, accounted for 34.3% of accounts payable. The two consist of Colgate Industries and 2335524 Ontario, Inc., for which terms are all past due.



Licenses,
Permits and Testing



We
maintain the following permits and licenses in connection with the operation of our P2O business.



|License/Permit                 |  | Issuing
    Authority                              |  | Registration
    Number |  | Issue
    date                           
|------------------------------ |  | -------------------------------------------------- |  | ----------------------- |  | -----------------------------------------
|Air
    Permit                 |  | NYSDEC                                             |  | 9-2911-00348/00002      |  | 06/30/2018(Annual)                       
|Solid
    Waste Permit         |  | NYSDEC                                             |  | 9-2911-00348/00003      |  | 06/30/2018(Annual)                       
|Bulk
    Fuel Blending License |  | Ontario
    Technical Standards & Safety Authority |  | 000184322               |  | 10/12/2018(Annual)                       
|Waste
    Disposal Site        |  | Ontario
    Ministry of the Environment            |  | A121029                 |  | Perpetual
    (subject to annual reviews)



Industry
Background



Alternative
fuels are generally considered to be any substances that can be used as fuel, other than conventional fossil fuels such as naturally
occurring oil, gas and coal. There have been many approaches taken to producing alternative fuels, including conversion of corn
oil, vegetable oil and non-food-based materials. These approaches have demonstrated varying degrees of commercial potential. Some
of the challenges that alternative fuel producers have faced include high feedstock supply costs, lower perceived value of fuel
product, higher capital costs and dependence on government regulations for economic viabilities. We believe our company is distinguishable
from other producers of alternative or renewable fuels because our P2O solution represents a process and product that is commercially
viable and designed to provide immediate benefit for industries, communities and government organizations with waste plastic recycling
challenges. Our business model is premised on the need for a more efficient and cost-effective alternative to disposing of waste
plastic in jurisdictions where the cost of transporting and landfilling large amounts of plastic is quite costly.



Competition



Our
P2O business has elements of both a recycling business and a fuel refiner/production business, which makes it difficult to identify
and make direct comparisons to competitors. Both the recycling and energy sectors are characterized by rapid technological change.
Our future success will depend on our ability to achieve and maintain a competitive position with respect to technological advances
in both of these sectors. We believe that our business currently faces competition in the plastics-to-energy market, including
competition from PK Clean, Green Envirotec Holdings LLC, Vadaxx and RES polyflow, each of which has developed alternative methods
for obtaining and generating fuel from plastics. Because P2O solution end products include a variety of fuels, we also face competition
from the broader petroleum industry.



Business
Model



We
believe that our business model provides a unique proposition for both the “supply side” and the “end-user”
side of the waste-to-fuel value chain. Our P2O technology is positioned to link these two sides by offering economic incentives
in both directions. We believe P2O offers value to suppliers of waste plastic by saving transport and landfill tipping fees, and
value to fuel end-users by providing ultra-low sulphur green fuel. Given these incentives, we believe that our business will be
sought after by those industries that can benefit from the added value that we provide, thus allowing the potential for our company’s
growth through sale and license of our technology and equipment.





9







Business
Strategy



Under
our current business model, we seek to license our technology to companies that generate significant waste plastics and desire
to have a P2O processor on site to convert the plastics to useable fuel for their operations. Our target customers for our processors
are private companies and municipalities in the recycling industry who can operate on a commercial scale. We charge the company
for the P2O equipment, a royalty fee based on the amount of fuel generated, a license fee for the use of our proprietary catalyst,
and a set up and service fee. In light of the change in our business model, management has determined that it only requires an
operational processor to demonstrate the Company’s technology. Thus, our processors are likely to remain idle or incomplete,
as applicable. The key elements of our strategy to achieve this goal are as follows:



Marketing
Strategy



We
target post-commercial and industrial waste plastic partners. We believe this allows us to identify sources of large plastic waste
streams, such as industrial sites and material recovery facilities and recycling centers. We also seek to partner with businesses
and municipalities that collect waste plastics. Our vision is to help redirect these waste plastic streams, preventing them from
entering landfills.



Manufacturing
and Procurement Strategy



Our
P2O business model allows us to simultaneously pursue sales to multiple commercial opportunities (partners) across the waste plastic
and fuel markets. Our P2O processors have evolved to be modular solutions with the completion of processor #3 in 2013. We use
third party contract manufacturers for the manufacture of many of the key modular components of our processors, including the
kilns, distillation towers as well as other key components that require specialized machining and fabrication. We will license
our P2O technology, including construction operation and maintenance of processors for operation at our partners’ sites.
Our strategy is to have our partners construct clusters of P2O processors at sources of large plastic waste streams, such as industrial
sites, material recovery facilities and recycling centers.



Competitive
Strengths



We
believe that our competitive strengths are as follows:



Our
processors convert unwashed waste plastics into “in specification fuels” ready for use by the end-user customer.
Our process does not generate any waste water. The fuel is Halide-free and there is no further need for refinement. The process
does not produce any hazardous waste.



In
addition to producing fuel, our P2O solution simultaneously addresses the problem of disposing of waste plastic. We offer
an alternative to disposing of waste plastic in a landfill. Our processors can accept mainly mixed, unwashed plastic feedstock.
In the United States and Canada, a substantial amount of plastic is currently considered waste and is disposed of in landfills,
resulting in tipping fees levied by the landfill or other waste disposal facility fees. We believe that the current low landfill
diversion rates for waste plastic in the United States and Canada, together with the costs of transporting and disposing of plastic
in bulk, present a significant opportunity to provide an alternative to conventional recycling and waste disposal.



The
P2O process provides a highly efficient means of converting plastic into fuel.Our proprietary P2O process and catalyst
provide a highly efficient means of converting plastic into fuel. Our business model depends on us being able to provide both
a cost-competitive means of disposing of waste plastic and an efficient and non-energy intensive means of producing fuel. Our
process requires comparatively minimal electricity to operate, and the energy balance of the process is positive, meaning that
more energy can be produced than is consumed by the process.



Low
capital costs and small footprint.We have designed the processors with a modular design with standardized components,
making construction of our processors relatively simple and cost effective. We have designed our processors to take up approximately
3,000 square feet of space, giving the processors a relatively small footprint. We believe that this design facilitates the construction
and operation of multiple processors on a single site. We estimate that the costs of constructing our processors on industrial
partner sites will be substantially less than the cost of constructing waste-to-fuel facilities offered by our competitors.





10







Lower
emissions



In
the United States, businesses and other producers of emissions are subject to various regulatory requirements, including the National
Emission Standards for Hazardous Air Pollutants, or “NESHAP.” These emission standards may be established according
to Maximum Achievable Control Technology requirements set by the EPA, often referred to as “MACT standards”. MACT
standards apply to a number of sources of emissions, including operators of boilers, process heaters and certain solid waste incinerators.
Because our P2O fuel products have ultra-low sulphur content, we believe that our P2O fuel can assist industrial partners with
meeting MACT requirements through reduced hazardous emissions.



Our
processors produce fuels that have very low sulphur content, which allows the end-user to potentially lower the emissions generated
by its operations while using our fuels. These lower emissions potentially could save the end-user from expensive environmental
compliance costs, stemming from such initiatives as the NESHAP regulations and more specifically the MACT standards for each pollution
source.



Validation
of repeatability and scalability of P2O processors.



Our
P2O business has been validated for repeatability and scalability by extensive testing by our customers and multiple independent
tests by outside consultants and third party laboratories.



Intellectual
Property



To
ensure the protection of our proprietary technology, we have applied for patent protection for both the P2O process and P2O processor.
As of May 2019, we have pending two United States and one Canadian applications. A lack of patent protection could have a material
adverse effect on our ability to gain a competitive advantage for our process and processors, since it is possible that our competitors
may be able to duplicate the P2O process for their own purposes. We also rely on our trade secrets to provide protection from
portions of our process and proprietary catalyst.



We
also hold a U.S. patent relating to our Data Business for the recovery of tape information. This was sold to 2335524Ontario Inc.
on March 2, 2018.



We
also hold three United States trademarks and are as follows:



(1)
The standard character mark P2O®



(2)
Miscellaneous design



(3)
The standard character mark Plastic2Oil®



Research
and Development



Given
our strategic focus on developing our P2O business, we anticipate that our research and development activities related to our
P2O processors and the construction, operation and systems management of those processors will decrease. Specifically, we will
seek to increase the operational capabilities and performance of our P2O processors as opportunities arise. Research and development
expenditures was $0 in 2018 and 2017.



Employees



As
of May 2019, we employed three persons full-time and one person part-time, of which one were executive management, one and one
half were in finance and administration, one was in operations. None of our employees are subject to a collective bargaining agreement
and we believe that our labor relations are good.





11







Environmental
and Other Regulatory Matters



As
we seek to further develop and commercialize our P2O business, we will be subject to extensive and frequently developing federal,
state, provincial and local laws and regulations, including, but not limited to those relating to emissions requirements, fuel
production, fuel transportation, fuel storage, waste management, waste storage, composition of fuels and permitting. Compliance
with current and future regulations could increase our operational costs. Management believes that the company is currently in
substantial compliance with applicable environmental regulations and permitting.



Our
operations require various governmental permits and approvals. We believe that we have obtained, or are in the process of obtaining,
all necessary permits and approvals for the operations of our P2O business; however, any of these permits or approvals may be
subject to denial, revocation or modification under various circumstances. Failure to obtain or comply with the conditions of
permits and approvals or to have the necessary approvals in place may adversely affect our operations and may subject us to penalties.



Company
Information



We
are a reporting company and file annual, quarterly and current reports, proxy statements and other information with the SEC. You
may read and copy these reports, proxy statements and other information at the SEC’s Public Reference Room at 100 F Street
N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 or e-mail the SEC at publicinfo@sec.gov for more information
on the operation of the public reference room. Our SEC filings are also available at the SEC’s website at http://www.sec.gov.
Our Internet address is http://www.plastic2oil.com. There we make available, free of charge, our Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendments to those reports, as soon as reasonably practicable
after we electronically file such material with, or furnish such material to, the SEC.



ITEM
1A. RISK FACTORS



Not
Applicable



ITEM
1B. UNRESOLVED STAFF COMMENTS



Not
Applicable



ITEM
2. PROPERTIES



The
following is a summary of our properties. We believe that these facilities are sufficient to support our research and development,
operational, processing and administrative needs under our current operating plan.



1.
Corporate Office and Niagara Falls, NY facility



Our
Niagara Falls, NY facility currently has two operating buildings, a 10,000 square foot building that currently houses two commercial-scale
P2O processors and a 7,200 square foot building that houses one commercial-scale processor of our P2O business and other fabrication
equipment and parts relevant to the process. This facility serves as the center of our research and development operations and
our corporate and administrative offices and is situated on eight acres of land which we own.



2.
Fuel Blending Facility



We
own approximately six acres of land in Thorold, Ontario, Canada where we have the capability to operate our fuel blending tanks
facility with a 250,000 gallon capacity. When active, the idle fuel-blending facility gives us the capability to store, blend,
analyze and self-certify the fuels produced from the P2O process. The facility was not in use during 2018 and 2017. We own the
property and have no mortgage debt outstanding in relation to this facility.





12







3.
Thorold, Ontario, Canada Office Building



We
owned approximately 21,000 square feet in Thorold, Ontario, consisting of 5,000 square feet of office space and 16,000 square
feet of warehousing and storage space, which serves as storage for our company as well as offsite IT operations. This property
has a mortgage securing approximately $206,910 of debt. On March 31, 2017, the Company sold this land and building located at
1783 Allanport Road, Thorold, Ontario for a gain of approximately $254,000. The proceeds were used towards repayment of the outstanding
mortgage, real estate taxes and closing costs.



ITEM
3. LEGAL PROCEEDINGS



As
of December 31, 2018, the Company was involved in litigation and claims which arise from time to time in the normal course of
business. In the opinion of management, based upon the information and facts known to them, any liability that may arise from
such contingencies would not have a material adverse effect on the consolidated financial statements of the Company.



ITEM
4. MINE SAFETY DISCLOSURES



Not
Applicable.



PART
II



ITEM
5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES



Market
Information



Our
common stock is quoted for trading on the OTCQB under symbol “PTOI”. The following table sets forth, for each of the
quarterly periods indicated, the high and low bid prices of our common stock. The prices reflect inter-dealer quotations, do not
include retail mark-ups, markdowns or commissions and do not necessarily reflect actual transactions.



|Quarter        |  | High |      |  | Low |  
|-------------- |  | ---- | ---- |  | --- | -
|2018           |  |      |      |  |     |  
|First Quarter  |  | $    | 0.05 |  |     | $
|Second Quarter |  |      | 0.04 |  |     |  
|Third Quarter  |  |      | 0.02 |  |     |  
|Fourth Quarter |  |      | 0.02 |  |     |  
|               |  |      |      |  |     |  
|2017           |  |      |      |  |     |  
|First Quarter  |  | $    | 0.05 |  |     | $
|Second Quarter |  |      | 0.05 |  |     |  
|Third Quarter  |  |      | 0.03 |  |     |  
|Fourth Quarter |  |      | 0.04 |  |     |  



Holders



On
May 31, 2019, there were 450 holders of record of our common stock, $0.001 par value per share.



As
of May 31, 2019, we had issued and outstanding 124,756,158 shares of common stock, $0.001 par value per share.



Dividend
Policy



We
have never declared or paid any cash dividends on our common stock. For the foreseeable future, we intend to retain any earnings
to finance the development and expansion of our business, and we do not anticipate paying any cash dividends on our common stock.
Any future determination to pay dividends will be at the discretion of the Board of Directors and will be dependent upon then
existing conditions, including our financial condition and results of operations, capital requirements, contractual restrictions,
business prospects and other factors that the Board of Directors considers relevant.





13







Recent
Sales of Unregistered Securities



Our
sales of unregistered securities have been previously reported in our reports on Forms 8-K and 10-Q filed with the SEC.



Securities
Authorized for Issuance under Equity Compensation Plans



The
following table sets forth certain information as of December 31, 2018 with respect to equity compensation plans under which the
Company’s common stock may be issued.



|Plan
    Name                                                        |  | Number
    of securities to be issued upon exercise of outstanding options, warrants and rights |           |  | Weighted
    average exercise price of outstanding options, warrants and rights |   |      | Number
    of securities remaining available for future issuance under equity compensation plans | 
|-------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------- | --------- |  | ------------------------------------------------------------------------------- | - | ---- | ------------------------------------------------------------------------------------------------ | 
|Equity Compensation
    Plans                                        |  |                                                                                                 |           |  |                                                                                 |   |      |                                                                                                  | 
|                                                                     |  |                                                                                                 |           |  |                                                                                 |   |      |                                                                                                  | 
|JBI, Inc. 2012 Long-Term
    Incentive Plan Approved by Stockholders |  |                                                                                                 | 1,600,000 |  |                                                                                 | $ | .12  |                                                                                                  | 
|Equity Compensation Plans not Approved
    by Stockholders           |  |                                                                                                 | 220,000   |  |                                                                                 |   | 0.41 |                                                                                                  | 



Purchases
of Equity Securities by the Issuer and Affiliated Purchasers



None.



ITEM
6. SELECTED FINANCIAL DATA



Not
Applicable.



ITEM
7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



The
following management’s discussion and analysis (the “MD&A”) of the results of operations of the Company
should be read in conjunction with the consolidated financial statements of the Company, together with the accompanying notes,
as well as other financial information included elsewhere in this Report. This discussion contains forward-looking statements
that involve certain risks and uncertainties, and that reflect estimates and assumptions. See the section titled, “Cautionary
Statement Regarding Forward-Looking Statements” for more information on forward-looking statements. Our actual results may
differ materially from those indicated in forward-looking statements.



Business
Overview



For
the twelve months ended December 31, 2018 and 2017, the Company has no P2O revenue. The Company’s P2O processors were idle
for all of 2017 and 2018. The Company’s data storage and recovery business was idle during the twelve months ended December
31, 2017.



On
April 17, 2017, the Company recorded $779,287 to Other Income from the settlement of the Glenny and Maskell lawsuit. Net cash
received was $524,010, net of legal expenses.





14







For
financial reporting purposes, we currently operate in one business segment. Prior to 2017, we had operated in two business segments,
(i) our P2O® solution business, which manufactured and sold the fuel produced through our two P2O processors and (ii) data
storage and recovery (the “Data Business”). On March 2, 2018, we exited the Data Business; it was sold to 2335524
Ontario Inc. As of this filing date of the report, all three of our fully-permitted P2O processors were idle and not producing
fuel products. In light of the change in our business model, management has determined that it only requires an operational processor
to demonstrate the Company’s technology. Thus, our processors are likely to remain idle or incomplete, as applicable.



Our
P2O business is a technology development and licensing company. We have developed technology that converts waste plastic into
ultra-clean, ultra-low sulphur fuel products through our proprietary plastic-to-oil, or P20, process. Under our current business
model, we seek to license our technology to companies that generate significant waste plastics and desire to have a P2O processor
on site to convert the plastics to useable fuel for their operations. We charge the company for the P2O equipment, a royalty fee
based on the amount of fuel generated, a license fee for the use of our proprietary catalyst, and a set up and service fee. We
anticipate that this segment will account for substantially all of our revenues in 2018 and beyond. Historically, however, our
revenues have been derived primarily from our other segments and products, including those noted above as discontinued operations.



The
following table highlights since inception the proceeds from financings, research and development expenditures, investment in
property, plant and equipment and fuel produced:





|                                          |  | FY 2009-2013 |            |  | FY 2014-2015 |   |           | FY 2016 |  |   | FY 2017 |  |  | FY 2018 |   |  | Total |  
|----------------------------------------- |  | ------------ | ---------- |  | ------------ | - | --------- | ------- |  | - | ------- |  |  | ------- | - |  | ----- | -
|Cash raised                               |  | $            | 31,088,110 |  |              | $ | 1,730,095 |         |  | $ | 600,000 |  |  | $       | 0 |  |       | $
|R&D cost                                  |  | $            | 2,452,560  |  |              | $ | 22,652    |         |  | $ | 0       |  |  | $       | 0 |  |       | $
|Investment in property, plant & Equipment |  | $            | 4,792,433  |  |              | $ | 13,775    |         |  | $ | 0       |  |  | $       | 0 |  |       | $
|Fuel produced in gallons                  |  |              | 655,037    |  |              |   | 12,959    |         |  |   | 0       |  |  |         | 0 |  |       |  





Plastic2Oil
Business



Under
our current business model, we seek to license our technology to companies that generate significant waste plastics and desire
to have a P2O processor on site to convert the plastics to useable fuel for their operations. Our target customers for our processors
are private companies and municipalities in the recycling industry who can operate on a commercial scale. We charge the company
for the P2O equipment, a royalty fee based on the amount of fuel generated, a license fee for the use of our proprietary catalyst,
and a set up and service fee. In light of the change in our business model, management has determined that it only requires an
operational processor to demonstrate the Company’s technology. Thus, our processors are likely to remain idle or incomplete,
as applicable



We
believe that our business model provides a unique proposition for both the “supply side” and the “end-user”
side of the waste-to-fuel value chain. Our P2O technology is positioned to link these two sides by offering economic incentives
in both directions. We believe P2O offers value to suppliers of waste plastic by saving transport and landfill tipping fees, and
value to fuel end-users by providing ultra-low sulphur green fuel. Given these incentives, we believe that our business will be
sought after by those industries that can benefit from the added value that we provide, thus allowing the potential for our company’s
growth through sale of P2O equipment, a royalty fee based on the amount of fuel generated, a license fee for the use of our proprietary
catalyst, and a set up and service fee.



Our
future success will depend on our ability to achieve and maintain a competitive position with respect to technological advances.
We believe that our business currently faces competition in the plastics-to-energy market, including competition from PK Clean,
Green Envirotec Holdings LLC, Vadxx and RES polyflow, each of which has developed alternative methods for obtaining and generating
fuel from plastics.



15







Effective
as of October 12, 2017 the Company’s Board of Directors increased the number of directors comprising the Board from two
to four members and appointed Jason C. Aspin and Lee C. Brain to fill the vacancies created thereby.



In
2018, we substantially reduced the Company’s monthly cash burn rate as a result of actions taken in 2016 and 2017, which
resulted in a $327,438 reduction of operating expenses for the twelve months ended December 31, 2018. We continue to monitor
our operating expenses closely and exploring every avenue, including the March 31, 2017 sale of vacant land and building we own
in Thorold, Canada and also seeking to rent or sell the idle blending facility to a qualified independent operator.



Our
2018 and 2017 financing activities came from cash raised through short-term loans from our CEO, related party strategic investors
and non-related party strategic investors. Some of these investors have experience in systems integration and we believe that
their engineering and operations experience will be instrumental towards delivery, set-up and sale of the P2O processors through
commercials partnerships.



U.S.
Patent Application No.: 15/362,102 Titled, SYSTEM AND PROCESS FOR CONVERTING PLASTICS TO PETROLEUM PRODUCTs, was published on
March 16, 2017 under Publication No. US 20170073584 and is available on the USPTO website at http://patft.uspto.gov/.



Our
P2O sales and marketing program are expected to include direct sales as well as new partnerships. To that end, we made the decision
in early 2016 not to further extend our agreement with EcoNavigation LLC as their firm has been unable to conclude processor sales
on acceptable terms.



On
December 21, 2017, we executed a Master Agreement (the “Master Agreement”) with Veridisyn Technologies, LLC, a company
engaged in processing waste plastics (the “Customer”), pursuant to which the Customer agreed to purchase all of its
requirements for the catalyst and processors for its plastic-to-oil (P2O) operations from the Company and to license from the
Company certain related P2O technology. The Master Agreement was executed pursuant to the Company’s previously disclosed
Memorandum of Understanding with a then un-disclosed party. Under the Master Agreement, the Customer agreed to submit purchase
orders for six processors during the first three years of the Master Agreement, two of which shall be ordered within the first
one hundred twenty days of executing the Master Agreement. The purchase price of the P2O processors will be $2 million for each
of the initial two processors and $3 million for each subsequent processor. In connection with the sale of processors, the Company
agreed to provide certain monitoring and technical support services. In addition, as consideration for the non-exclusive license
of certain P2O technology, The Customer agreed to pay the Company a royalty fee of 5% of gross sales of fuel products by the Customer
or its customers. The Company granted the Customer a right of first refusal to purchase P2O processors for facilities to be developed
in certain southern U.S. States. This could lead to purchase of two processors in 2018, although there can be no assurance as
negotiations remain ongoing. This agreement lapsed as of December 2018, but the Customer is still working with the Company on
restructuring the business arrangement.



Through
years of testing and refinement in conjunction with our outside engineering firm, we considered and initiated worked towards bringing
our flagship processor #3 back online. We are still considering our ability to work towards this goal, but we are presently undercapitalized
to fully engage this effort. We believe it will be important to be able to demonstrate the commercial viability of this processor
by regular (pilot) operations at our Niagara Falls plant to potential customers. Of primary influence to our decision to expand
our sales efforts and to bring the flagship processor #3 back online is our view based on analysis and consultation that oil prices
have reached a bottom and could rise and stay above $50 a barrel in the foreseeable future.



While
the price of crude is a factor in certain economic analysis pertaining to our processor sales, it is not the only factor. There
are significant costs associated with landfill disposal. Financial decisions regarding P2O’s technology are based on the
results of models that are tailored specifically to each potential client. These include, but are not limited to, the anticipated
life of a processor or cluster, specific configurations of customers’ sites and facilities on hand, and the ability to integrate
P2O’s technology into existing operations.



16









Data
Recovery & Migration Business



On
March 2, 2018, the Data Business was sold to 2335524Ontario Inc.



Listing
on the OTCQB



On
June 3, 2019, we had 124,756,158 shares of common stock issued and outstanding. Our common stock is currently trading on
the OTCQB marketplace in the United States of America under the stock ticker symbol “PTOI.” On June 3, 2019,
the last trading day prior to the date of this filing, the closing price of the common stock on the OTCQB was $0.02.



Sources
of Revenues and Expenses



Revenues



In
2018, we did not derive revenue from our either P2O business or Data Business.



17







Cost
of Sales



We
did not incur cost of sales in 2018 or 2017. Costs of Sales for P2O when operating consist of the following:



|● | feedstock
    procurement costs;                                                                   
|- | ---------------------------------------------------------------------------------------------------
|  |                                                                                                    
|● | overhead
    incurred at our Niagara Falls Facility related to the operation of the processors; and
|  |                                                                                                    
|● | freight
    costs incurred in shipping of plastics and fuels.                                      



Costs
of sales for our Data Business mainly consist of direct labor costs incurred in reading and interpreting the tape data as well
as costs for transferring the tape data to storage media.



Operating
Expenses



Operating
expenses consist primarily of the following:



|● | personnel-related
    costs including employee payroll, payroll taxes, stock based compensation and insurance;                                                                                                    
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                   
|● | plant
    and processor related costs including repairs and maintenance, processing and welding consumables, safety equipment and related
    costs;                                                              
|  |                                                                                                                                                                                                                   
|● | professional
    fees including legal fees, accounting fees including audit and tax professional costs, certain public company required fees,
    consulting fees and other professional and administrative costs;
|  |                                                                                                                                                                                                                   
|● | insurance
    costs consisting of pollution, workers compensation, general liability, and directors’ and officers’ insurance
    policies;                                                                        
|  |                                                                                                                                                                                                                   
|● | compliance
    related costs including environmental consulting fees, stack test and other related testing costs and permitting costs;                                                                            
|  |                                                                                                                                                                                                                   
|● | depreciation
    expense related to our property plant and equipment; and                                                                                                                                         
|  |                                                                                                                                                                                                                   
|● | Impairment
    expense related to our deposits and property, plant and equipment.                                                                                                                                 



Other
Income (Expense).







In 2018, total other
expenses of $1,786,609 consists of $10,498 of the sale of the Tape Reading Equipment to 2335524 Ontario Inc., $1,161,337
of interest expenses on secured promissory notes and amortization on debt discount, along with $635,770 from the impairment
loss of property, plant and equipment.



In 2017, total other
expenses of $111,166 consisted mainly of $1,134,839 of interest expenses on secured promissory notes and
amortization of debt discount, $13,158 impairment loss of property, plant, and equipment, $255,676 gain on disposable of the 1783
Allanport Road land and building and $781,155 income from the Glenny and Maskell settlement.



18









Results
of Operations – Year ended December 31, 2018 compared to Year ended December 31, 2017



Revenue



As
we only recently shifted our business strategy to selling fuel processors, we did not derive any revenue from processor sales
in 2018 or 2017. The following table shows a breakdown of our revenues from these sources.





|Revenue           |  | Period Ended December 31, |  
|----------------- |  | ------------------------- | -
|                  |  | 2018                      |  
|P2O Revenue       |  |                           |  
|Fuels             |  | $                         | -
|Total P2O Revenue |  |                           | -
|                  |  |                           |  
|Data Business     |  |                           | -
|TOTAL REVENUE     |  | $                         | -



There
was no fuel production in the year ended December 31, 2018 and 2017. Consequently, there was neither fuel shipment nor fuel revenue.
The lack of fuel revenue for these years was mainly due to management’s decision to shut down its production in the fourth
quarter of 2013 due to the severe cold weather that caused damage to condensers and other components of our processors and the
lack of operating cash. The damage requires substantial working capital for general repairs and replacement of damaged condensers.
These processors were idle for all of 2018 and 2017 and are currently idle.



Cost
of Goods Sold & Total Gross Profit



As
indicated earlier, we had no fuel produced in 2018 and 2017. The following tables are a breakdown of the costs of goods sold and
Total Gross Profit:





|Cost of Goods Sold               |  | Periods Ended December 31, |  
|-------------------------------- |  | -------------------------- | -
|                                 |  | 2018                       |  
|P2O Cost of Goods Sold           |  |                            |  
|Fuels                            |  | $                          | -
|Total P2O Cost of Goods Sold     |  |                            | -
|                                 |  |                            |  
|Data Business Cost of Goods Sold |  |                            | -
|TOTAL COST OF GOODS SOLD         |  | $                          | -





|Gross
    Profit (Loss)        |  | Periods
    Ended December 31, |  
|------------------------------ |  | ------------------------------ | -
|                               |  | 2018                           |  
|P2O
    Gross Loss             |  |                                |  
|Fuels                          |  | $                              | -
|Total
    P2O Gross Loss       |  |                                | -
|                               |  |                                |  
|Data
    Business Gross Profit |  |                                | -
|TOTAL
    GROSS PROFIT         |  | $                              | -





The
cost of goods sold related to the Data Business was primarily the direct labor incurred in the reading and interpreting of the
magnetic tape data.





Operating
Expenses



We
incurred operating expenses of $990,882 during the year ended December 31, 2018, compared to $1,363,320 for the
year ended December 31, 2017. This $372,438 decrease was driven by a $226,659 decrease in professional fees (from legal
fees incurred in the recovery of $779,287 from the Glenny & Maskell class action suit in 2017), a $141,108 reduction
in wages from less full-time equivalent (FTE) employees, $18,489 from reduction in depreciation expenses offset by an
increase in other operating expenses of $13,818. For the years ended December 31, 2018 and 2017, compensation expense
includes $22,665 and $63,170 for shares of common stock issued for services. A breakdown of the components
of operating expenses for the fiscal years ended December 31, 2018 and 2017, are as follows:





19









|Operating Expenses                               |  |                                              |        
|------------------------------------------------ |  | -------------------------------------------- | -------
|                                                 |  | For
    the Twelve Months Ended December 31, |        
|                                                 |  | 2018                                         |        
|Selling, General
    and Administrative expenses |  |                                              |        
|Professional
    Fees                            |  | $                                            | 115,799
|Compensation                                     |  |                                              | 493,392
|Other                                            |  |                                              | 206,993
|Depreciation
    & Accretion                     |  |                                              | 174,698
|Total
    Operating Expenses                     |  | $                                            | 990,882



Non-Operating
Expenses



Interest
Expenses



For
the year ended December 31, 2018, we incurred net interest expense of $1,161,337 as compared to $1,134,839 for the
year ended December 31, 2017.



Income
Tax Expenses



For
the years ended December 31, 2018, and 2017, we had no federal taxable income due to net losses and recorded a deferred tax asset
and a valuation allowance to the extent that those assets are attributable to net operating losses. We recognized the valuation
allowance because we are unsure as to the ability to use these assets in the near future due to continued operating losses.



For
the years ended December 31, 2018 and 2017, we incurred $0 current income tax or future income tax expenses from continuing
operations.



Net
Loss





We incurred a net
loss of $2,777,491 for the year ended December 31, 2018 as compared to a net loss of $1,474,005 for the year ended December 31,
2017. The primary reason for the increase in net loss was from a $622,612 increase in Impairment Losses on Long lived assets,
an increase in interest expense of $26,498, a gain on disposal of property, plant and equipment incurred in 2017 of $255,676
and a gain on the settlement of a lawsuit in 2017 of $781,155.



Liquidity
and Capital Resources



We
do not have sufficient cash to operate our business which has forced us to suspend our operations until such time as we receive
a capital infusion or cash advances on the sale of our processors. We intend to source additional capital through the sale of
our equity and debt securities and other financing methods. We plan to use the cash proceeds from any financing to complete the
repairs on Processors #3 to resume production of fuels for pilot runs and customer demonstrations. At December 31, 2018, we had
a cash balance of $47,808. Our principal sources of liquidity in 2018 was from the sale of the property located at 1783 Allanport
Road, Thorold, Ontario, Canada and proceeds from the settlement of the Glenny and Maskell (Canadian Insurance Broker) lawsuit.
Our principal sources of liquidity in 2017 were the proceeds from the related party short-term loans from our chief executive
officer, and proceeds from the sale of related –party and non-related party secured long –term debt.



As
discussed earlier in this MD&A, our processors are currently idle and, thus, we are not producing fuel or generating fuel
sales. Furthermore, we have shifted our business strategy to processor sales, rather than fuel sales. Our current cash levels
are not sufficient to enable us to make the required repairs to our processors or to execute our business strategy as described
in this Report. As a result, we intend to seek significant additional capital through the sale of our equity and debt securities
and other financing methods to enable us to make the repairs, to meet ongoing operating costs and reduce existing current liabilities.
We also intend to seek to cash advances or deposits under any new processor sale agreements and/or related technology licenses.
Management currently anticipates that the processors will remain idle until at least late 2018 and then pilot, or demo, runs for
sale of processors. Due to the many factors and uncertainties involved in capital markets transactions, there can be no assurance
that we will raise sufficient capital to allow us to resume operations in 2018, or at all. In the interim, we anticipate that
our level of operations will continue to be nominal, although we plan to continue to market our P2O processors with the intention
of making additional P2O processor sales and technology licenses.





20







Our
limited capital resources and recurring losses from operations raise substantial doubt about our ability to continue as a going
concern and may adversely affect our ability to raise additional capital. The financial statements do not include any adjustments
that might be necessary if we are unable to continue as a going concern.



The
following table provides a comparative summary of our cash flows for the fiscal years ended December 31, 2018 and 2017.



|Cash Flow from Operating Activities       |  |                                               |           
|----------------------------------------- |  | --------------------------------------------- | ----------
|                                          |  | For
    the Twelve Months Ended  December 31, |           
|                                          |  | 2018                                          |           
|Net Loss                                  |  | $                                             | (2,777,491
|Net cash used in operating activities     |  |                                               | (552,932  
|Cash flow from investing
    activities   |  |                                               |           
|Net cash used in investing activities     |  |                                               | 100,524   
|Cash flows from Financing
    activities: |  |                                               |           
|Net cash provided by financing activities |  |                                               | 327,930   
|Cash at beginning of period               |  |                                               | 172,286   
|Cash
    at end of period                 |  | $                                             | 47,808    



Cash
Flow from Operations



Cash
used in operations was $552,932 and $184,424 for the years ended December 31, 2018 and 2017, respectively. In 2018 and 2017 cash
was mainly used to continue funding the minimum operating costs. In 2017, the Glenny and Maskell settlement provided cash in the
amount of $524,010, net of legal expenses.



Cash
Flow from Investing Activities



Cash
used in investing was $100,524 and $101 for the years ended December 31, 2018 and 2017 and was attributable to restricted cash.



Cash
Flow from Financing Activities



Cash
flow from financing activities was $327,930, and $85,913, for the years ended December 31, 2018 and 2017, respectively. For 2018
and 2017, these amounts were mainly driven by the proceeds sale of property in Ontario, Canada, Glenny Maskell settlement and
amounts received from short-term notes from related parties



Off-Balance
Sheet Arrangements



We
had no off-balance sheet arrangements in the years ended December 31, 2018 and 2017.



Transactions
with Related Parties







As of December 31, 2018 and 2017, Richard
Heddle, CEO is due $1,200,000 and $960,000 in accrued payroll, respectively, which is included in accrued expenses on the balance
sheets. Further, as of December 31, 2018 and 2017, Richard Heddle is owed $9,594,893 and $8,867,649, respectively,
in secured Promissory Notes.



See Note 7 of our financial statements
for additional Secured Promissory Notes Payable to related parties.





21







At
December 31, 2018 and 2017, the Company’s accounts payable and accrued expenses included a $132,217 (adjusted for
currency fluctuation) outstanding balance due to Heddle Marine Services, a business controlled by Mr. Heddle. The amounts payable
arose from payments made in 2014 by Heddle Marine on behalf of the company to a logistics company to transport fuel from the Niagara
Falls site to the blending tanks at our facility in Thorold, Ontario, as well as for labor and material provided by Heddle Marine
towards upkeep of our Canadian facilities including 2015 cleanup costs incurred in order to terminate the lease with Avondale
properties on the discontinued RRON Operation.



Plastic2Oil
Marine, Inc., one of the Company’s subsidiaries, which is currently not operating, entered into a consulting service contract
in 2010 with a company owned by Mr. Heddle, who later (in 2014) became the Company’s Chief Executive Officer. The contract
provides the related company with a share of the operating income earned from Plastic2Oil technology installed on marine vessels
which are owned by the related company. The contract provides a minimum future payment equal to fifty percent of the operating
income generated from the operations of two of the most profitable marine vessel processors and 10% from all other marine vessel
processors. At December 31, 2018, there were no installed marine vessel processors pursuant to the contract.



Critical
Accounting Policies



Basis
of Consolidation



The
consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries, Plastic2Oil (Canada)
Inc., JBI CDE Inc., Plastic2OilI Re One Inc., and JBI Re #1 Inc., Plastic2Oil of NY #1, and Plastic2Oil Marine Inc. All of our
intercompany transactions and balances have been eliminated on consolidation. Amounts in the consolidated financial statements
are expressed in U.S. dollars.



Estimates



The
preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities, 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 period. Actual results could differ from these
estimates. Significant estimates include amounts for impairment of long-lives assets, share based compensation, asset retirement
obligations, inventory obsolescence, accrued liabilities and accounts receivable exposures.





22







Cash



The
Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents.
The Company held no cash equivalents as of December 31, 2018 and 2017.



Restricted
Cash



At
December 31, 2018 and December 31, 2017, the Company had $0 and $100,524, respectively, of restricted cash, which is used to secure
a line of credit that secures a performance bond on behalf of the Company.



Property
Plant and Equipment



Property,
Plant and Equipment are recorded at cost. Depreciation is provided using the straight-line method over the estimated useful lives
of the various classes of assets as follows:



|Leasehold
    improvements          | lesser
    of useful life or term of the lease
|----------------------------------- | ----------------------------------------------
|Machinery
    and office equipment  | 3-15
    years                                
|Furniture
    and fixtures          | 7
    years                                   
|Office
    and industrial buildings | 25-30
    years                               



Gains
and losses on depreciable assets retired or sold are recognized in the statement of operations in the year of disposal. Repairs
and maintenance expenditures are expensed as incurred and expenditures that increase the value or useful life of the asset are
capitalized.



Construction
in Process



The
Company capitalizes customized equipment built to be used in the future day to day operations at cost. Once complete and available
for use, the cost for accounting purposes is transferred to property, plant and equipment, where normal depreciation rates are
applied.



Impairment
of Long-Lived Assets



The
Company reviews for impairment of long-lived assets on an asset by asset basis. Impairment is recognized on properties held for
use when the expected undiscounted cash flows for a property are less than its carrying amount at which time the property is written
down to fair value. Properties held for sale are recorded at the lower of the carrying amount or the expected sales price less
costs to sell. The sale or disposal of a “component of an entity” is treated as discontinued operations.



As
of December 31, 2018 and 2017, we recorded impairment losses of $635,770 and $13,158, respectively. The charge in 2017 relates
specifically to the sale of the property at 1783 Allanport Road, Thorold, Ontario, Canada.



23









Asset
Retirement Obligations



The
fair value of the estimated asset retirement obligation is recognized in the consolidated balance sheets when identified and a
reasonable estimate of fair value can be made. The asset retirement cost, equal to the estimated fair value of the asset retirement
obligation, is capitalized as part of the cost of the related long-lived asset. The balance of the asset retirement obligation
is determined through an assessment made by the Company’s engineers, of the total costs expected to be incurred by the Company
when closing a facility. The total estimated cost is then discounted using the current market rates to determine the present value
of the asset as of the date of this valuation. As of the date of the creation of the asset retirement obligation in the amount
of $67,897, the Company determined the present value of the obligation using a discount rate equal to 2.96%. The present value
of the asset retirement obligation is then capitalized on the consolidated balance sheets and is depreciated over the asset’s
estimated useful life and is included in depreciation and accretion expense in the unaudited condensed consolidated statements
of operations. Increases in the asset retirement obligation resulting from the passage of time are recorded as accretion of asset
retirement obligations in the unaudited condensed consolidated statements of operations. Actual expenditures incurred are charged
against the accumulated obligation. The December 31, 2018 and 2017 assessment, amounted to a net increase of $0 and $0, respectively.
As of December 31, 2018 and December 31, 2017, both the carrying value of the asset retirement obligations were $67,897 and $65,920,
respectively. These costs include disposal of plastic and other non-hazardous waste, site closing labor and testing and sampling
of the site upon closure. This liability is included in other long-term liabilities.



Environmental
Contingencies



The
Company records environmental liabilities at their undiscounted amounts on our consolidated balance sheets as other current or
long-term liabilities when environmental assessments indicate that remediation efforts are probable, and the costs can be reasonably
estimated. These costs may be discounted to reflect the time value of money if the timing of the cash payments is fixed or reliably
determinable and extends beyond a current period. Estimates of our liabilities are based on currently available facts, existing
technology and presently enacted laws and regulations, taking into consideration the likely effects of other societal and economic
factors, and include estimates of associated legal costs. These amounts also consider prior experience in remediating contaminated
sites, other companies’ clean-up experience and data released by the Environmental Protection Agency (EPA) or other organizations.
Our estimates are subject to revision in future periods based on actual costs or new circumstances. We capitalize costs that benefit
future periods and we recognize a current period charge in operation and maintenance expense when clean-up efforts do not benefit
future periods.



We
evaluate any amounts paid directly or reimbursed by government sponsored programs and potential recoveries or reimbursements of
remediation costs from third parties including insurance coverage separately from our liability. Recovery is evaluated based on
the creditworthiness or solvency of the third party, among other factors. When recovery is assured, we record and report an asset
separately from the associated liability on our balance sheet. No amounts for recovery have been accrued to date.



Revenue
Recognition



The
Company recognizes revenue when it is realized or realizable and collection is reasonably assured. The Company considers revenue
realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists,
(ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable,
and (iv) collectability is reasonably assured.



P2O
equipment and catalyst sales are recognized when the customer takes possession of the items since title to the goods and the risk
of loss transfers from P2O to Customer upon delivery. Royalty fee from production are recognized when the customer produces fuel
from its P2O processors and related equipment. License fees from the use of our catalyst and a setup fee and service fee are recognized
when the customer is in production mode.



Foreign
Currency Translation



The
consolidated financial statements have been translated into U.S. dollars in accordance with Financial Accounting Standards Board
(“FASB”) Accounting Standards Codification (“ASC”) Topic 830. All monetary items have been translated
using the exchange rates in effect at the balance sheet date. All non-monetary items have been translated using the historical
exchange rates at the time of transactions. Income statement amounts have been translated using the average exchange rate for
the year. Foreign exchange of $0 and gain of $57,301 for monetary items are included as general and administrative expenses in
the condensed consolidated statements of operations for the twelve months ended December 31, 2018 and 2017, respectively. The
2017 foreign exchange gain results from the payoff of the 1783 Allanport property mortgage. Resulting differences are reflected
in accumulated other comprehensive income in the accompanying consolidated balance sheets.





24







Income
Taxes



The
Company utilizes the asset and liability method to measure and record deferred income tax assets and liabilities. Deferred tax
assets and liabilities reflect the future income tax effects of temporary differences between the financial statement carrying
amounts of existing assets and liabilities and their respective tax basis and are measured using enacted tax rates that apply
to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets
are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of
the deferred tax assets will not be realized.



Loss
Per Share



The
financial statements include basic and diluted per share information. Basic net loss per share is computed by dividing net loss
by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed
by dividing net loss by the weighted average number of shares of common stock and potentially outstanding shares of common stock
during each period. Common stock equivalents are excluded from the computation of diluted loss per share when their effect is
anti-dilutive. For the year ended December 31, 2018, potential dilutive common stock equivalents consisted of 1,600,000 shares
underlying common stock warrants and 220,000 shares underlying stock options, which were not included in the calculation of the
diluted loss per share because they would be antidilutive. For the year ended December 31, 2017, potential dilutive common stock
equivalents consisted of 14,950,000 shares underlying common stock warrants and 6,650,000 shares underlying stock options, which
were not included in the calculation of the diluted loss per share because they would be antidilutive.



Concentrations
and Credit Risk



The
Company maintains cash balances, at times, with financial institutions in excess of amounts insured by the Canada Deposit Insurance
Corporation and the U.S. Federal Deposit Insurance Corporation. Management monitors the soundness of these institutions and has
not experienced any collection losses with these financial institutions.



Financial
instruments which potentially expose the Company to concentrations of credit risk consist principally of operating demand deposit
accounts and accounts receivable. The Company’s policy is to place our operating demand deposit accounts with high credit
quality financial institutions that are insured by the FDIC, however, account balances may at times exceed insured limits. The
Company extends limited credit to its customers based upon their creditworthiness and establishes an allowance for doubtful accounts
based upon the credit risk of specific customers, historical trends and other pertinent information.



During
the years ended December 31, 2018 and 2017, two suppliers accounted for 34.3% of accounts payable, respectively.



The
carrying amounts of cash, accounts payable, accrued expenses capital leases, and promissory notes, approximate fair value because
of the short-term nature of these items or prevailing interest rates.



Going
Concern



The
accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and
the satisfaction of liabilities and commitments in the normal course of business. We have experienced negative cash flows from
operations since inception, have a history of net losses from continuing operations of $2,777,491 and $1,474,005 for the
years ended December 31, 2018 and 2017, respectively, and have an accumulated deficit of $82,195,628 at December 31, 2018. These
factors raise substantial doubt about our ability to continue to operate in the normal course of business. We have funded our
activities to date almost exclusively from equity financings and issuance of secured long-term debt.



Financial
Instruments and Other Instruments



We
do not have any outstanding financial instruments and/or other instruments.



Disclosure
of Outstanding Securities



As
of May 31, 2019, we had 124,756,158 shares of common stock issued and outstanding.





25







In
conjunction with the Company’s 2012 Long Term Incentive Plan, options to purchase 220,000 shares of common stock with the
exercise price of $0.32, and 1,600,000 warrants with a weighted average exercise price of $0.12 per shares are vested at December
31, 2018.



In
conjunction with the Company’s August 10, 2016 private placement, the Company sold a $100,000 principal amount of 12% Promissory
Note, together with a five-year warrant to purchase up to one hundred thousand shares of the company’s common stock at an
exercisable price of $0.12 per share. The gross proceeds to the Company were $100,000.



In
conjunction with the Company’s August 25, 2016 private placement, the Company sold a $100,000 principal amount of 12% Promissory
Note, together with a five-year warrant to purchase up to one hundred thousand shares of the company’s common stock at an
exercisable price of $0.12 per share. The gross proceeds to the Company were $100,000.



In
conjunction with the Company’s October 18, 2016 private placement, the Company sold a $400,000 principal amount of 12% Promissory
Note, together with a five-year warrant to purchase up to four hundred thousand shares of the company’s common stock at
an exercisable price of $0.12 per share. The gross proceeds to the Company were $400,000.



ITEM
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK



Disclosures
About Market Risk



We
may be exposed to changes in financial market conditions in the normal course of business. Market risk generally represents the
risk that losses may occur as a result of movements in interest rates and equity prices. We currently do not use financial instruments
in the normal course of business that are subject to changes in financial market conditions.



Currency
Fluctuations and Foreign Currency Risk



We
mainly operate in the United States and Canada. Due to the relative stability of the Canadian Dollar in comparison to the U.S.
Dollar, we have not experienced foreign currency risk, however, should this stability change, we could be exposed to such risk.



Interest
Rate Risk



We
do not feel that we are subject to significant interest rate risk. We deposit surplus funds with banks earning daily interest
at fixed rates and we do not invest in any instruments for trading purposes. Additionally, all of our outstanding debt instruments
(our mortgage and capital leases) carry fixed rates of interests. We are exposed to opportunity risk should interest rates decrease.
The amount of interest bearing short-term debt outstanding as of December 31, 2018 and 2017 was $9,924,418 and $7,304,262 respectively.



Credit
Risk



Financial
instruments which potentially expose us to concentrations of credit risk consist principally of operating demand deposit accounts
and accounts receivable. Our policy is to place our operating demand deposit accounts with high credit quality financial institutions
that are insured by the FDIC, however, account balances may at times exceed insured limits. We extend limited credit to our customers
based upon their creditworthiness and establish an allowance for doubtful accounts based upon the credit risk of specific customers,
historical trends and other pertinent information.



We
maintain cash balances, at times, with financial institutions in excess of amounts insured by the Canada Deposit Insurance Corporation
and the U.S. Federal Deposit Insurance Corporation. Management monitors the soundness of these institutions and has not experienced
any collection losses with these financial institutions.



There
were no revenue and accounts receivable for the years ended December 31, 2018 and December 31, 2017.



During
the years ended December 31, 2018 and 2017, two suppliers accounted for 34.3% of accounts payable.



Inflation
Risk



Inflationary
factors such as increases in the cost of our product and overhead costs may adversely affect our operating results. Although we
do not believe that inflation has had a material impact on our financial position or results of operations to date, a high rate
of inflation in the future may have an adverse effect on our ability to maintain current levels of gross margin and selling, general
and administrative expenses as a percentage of net revenues if the selling prices of our products do not increase with these increased
costs.



26







ITEM
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA



Index.



|Report
    of Independent Registered Public Accounting Firm                                                   | F-1
|------------------------------------------------------------------------------------------------------------- | ---
|Consolidated
    Balance Sheets as of – December 31, 2018 and 2017                                            | F-2
|Consolidated
    Statements of Operations for the years ended December 31, 2018, and 2017                     | F-3
|Consolidated
    Statements of Comprehensive Loss for the years ended December 31, 2018 and 2017              | F-4
|Consolidated
    Statements of Changes in Stockholders Deficit for the years ended December 31, 2018 and 2017 | F-5
|Consolidated
    Statements of Cash Flows for the years ended December 31, 2018 and 2017                      | F-7
|Notes
    to Consolidated Financial Statements                                                                | F-8



27









REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To
the Board of Directors and

Stockholders
of Plastic2Oil, Inc.



Opinion
on the Consolidated Financial Statements





We have audited the accompanying consolidated
balance sheets of Plastic2Oil, Inc. (the Company) as of December 31, 2018 and 2017, and the related consolidated statements of
operations, comprehensive income and stockholders’ deficit, and cash flows for each of the years in the two-year period ended
December 31, 2018, and the related notes to the consolidated financial statements (collectively referred to as the consolidated
financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated
financial position of the Company as of December 31, 2018 and 2017, and the results of its operations and its cash flows for each
of the years in the two- year period ended December 31, 2018, in conformity with accounting principles generally accepted in the
United States of America.



Basis
for Opinion



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



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



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





The accompanying consolidated financial statements
have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial
statements, the Company has incurred operating losses, has incurred negative cash flows from operations and has a working capital
deficit. These and other factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s
plan regarding these matters is also described in Note 1 to the consolidated financial statements. The consolidated financial statements
do not include any adjustments that might result from the outcome of this uncertainty.









D.
Brooks and Associates CPA’s, P.A.



We
have served as the Company’s auditor since 2014.





Palm
Beach Gardens, Florida



June 3, 2019







F-1









PART
I - FINANCIAL INFORMATION



Item
1. Financial Statements.



PLASTIC2OIL,
INC. AND SUBSIDIARIES

CONSOLIDATED
BALANCE SHEETS



|                                                                                                |  | As
                                         of December
                                         31, 2018 |             |   | As
                                         of December
                                         31, 2017 |  
|----------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------- | ----------- | - | --------------------------------------------------------------------------------------------------------- | -
|ASSETS                                                                                          |  |                                                                                                           |             |   |                                                                                                           |  
|CURRENT
    ASSETS:                                                                             |  |                                                                                                           |             |   |                                                                                                           |  
|Cash
    and cash equivalents                                                                   |  | $                                                                                                         | 47,808      |   |                                                                                                           | $
|Restricted
    cash (Note 2 )                                                                   |  |                                                                                                           | -           |   |                                                                                                           |  
|                                                                                                |  |                                                                                                           |             |   |                                                                                                           |  
|Prepaid
    expenses and other current assets                                                   |  |                                                                                                           | 11,575      |   |                                                                                                           |  
|TOTAL
    CURRENT ASSETS                                                                        |  |                                                                                                           | 59,383      |   |                                                                                                           |  
|                                                                                                |  |                                                                                                           |             |   |                                                                                                           |  
|Property,
    plant and equipment, net (Note 4)                                                 |  |                                                                                                           | 537,192     |   |                                                                                                           |  
|Property
    held for sale (Note 5)                                                             |  |                                                                                                           | 180,235     |   |                                                                                                           |  
|                                                                                                |  |                                                                                                           |             |   |                                                                                                           |  
|Deposits
    (Note 2)                                                                           |  |                                                                                                           | 18,800      |   |                                                                                                           |  
|                                                                                                |  |                                                                                                           |             |   |                                                                                                           |  
|TOTAL
    ASSETS                                                                                |  | $                                                                                                         | 795,610     |   |                                                                                                           | $
|                                                                                                |  |                                                                                                           |             |   |                                                                                                           |  
|LIABILITIES
    AND STOCKHOLDERS’ DEFICIT                                                       |  |                                                                                                           |             |   |                                                                                                           |  
|                                                                                                |  |                                                                                                           |             |   |                                                                                                           |  
|CURRENT
    LIABILITIES:                                                                        |  |                                                                                                           |             |   |                                                                                                           |  
|Accounts
    payable                                                                            |  | $                                                                                                         | 1,846,669   |   |                                                                                                           | $
|Accrued
    expenses                                                                            |  |                                                                                                           | 2,888,224   |   |                                                                                                           |  
|Secured
    promissory notes – related parties, current portion (Note 7)                        |  |                                                                                                           | 9,924,418   |   |                                                                                                           |  
|Capital
    lease (Note 9)                                                                      |  |                                                                                                           | 22,210      |   |                                                                                                           |  
|TOTAL
    CURRENT LIABILITIES                                                                   |  |                                                                                                           | 14,681,521  |   |                                                                                                           |  
|                                                                                                |  |                                                                                                           |             |   |                                                                                                           |  
|LONG-TERM
    LIABILITIES:                                                                      |  |                                                                                                           |             |   |                                                                                                           |  
|Asset
    retirement obligations (Note 2)                                                       |  |                                                                                                           | 67,897      |   |                                                                                                           |  
|Secured
    promissory notes – related parties, less current portion (Note 7)                   |  |                                                                                                           | 632,533     |   |                                                                                                           |  
|Secured
    promissory notes (Note 8)                                                           |  |                                                                                                           | 130,274     |   |                                                                                                           |  
|TOTAL
    LONG-TERM LIABILITIES                                                                 |  |                                                                                                           | 830,704     |   |                                                                                                           |  
|                                                                                                |  |                                                                                                           |             |   |                                                                                                           |  
|TOTAL
    LIABILITIES                                                                           |  |                                                                                                           | 15,512,225  |   |                                                                                                           |  
|                                                                                                |  |                                                                                                           |             |   |                                                                                                           |  
|Commitments
    and contingencies ( Note 10)                                                    |  |                                                                                                           |             |   |                                                                                                           |  
|                                                                                                |  |                                                                                                           |             |   |                                                                                                           |  
|STOCKHOLDERS’
    DEFICIT:                                                                      |  |                                                                                                           |             |   |                                                                                                           |  
|Common
    stock, par $0.001; 250,000,000 authorized, 124,756,158 shares issued and outstanding |  |                                                                                                           | 124,756     |   |                                                                                                           |  
|Additional
    paid in capital                                                                  |  |                                                                                                           | 67,199,658  |   |                                                                                                           |  
|Accumulated
    other comprehensive income (loss)                                               |  |                                                                                                           | 154,599     |   |                                                                                                           |  
|Accumulated
    deficit                                                                         |  |                                                                                                           | (82,195,628 | ) |                                                                                                           |  
|TOTAL
    STOCKHOLDERS’ DEFICIT                                                                 |  |                                                                                                           | (14,716,615 | ) |                                                                                                           |  
|                                                                                                |  |                                                                                                           |             |   |                                                                                                           |  
|TOTAL
    LIABILITIES AND STOCKHOLDERS’ DEFICIT                                                 |  | $                                                                                                         | 795,610     |   |                                                                                                           | $



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



F-2











PLASTIC2OIL,
INC. AND SUBSIDIARIES

CONSOLIDATED
STATEMENTS OF OPERATIONS





|                                                                             |  | December
    31, |            
|---------------------------------------------------------------------------- |  | ---------------- | -----------
|                                                                             |  | 2018             |            
|OPERATING
    EXPENSES                                                       |  |                  |            
|Selling
    general and administrative expenses                              |  |                  |            
|Professional
    Fees                                                        |  |                  | 115,799    
|Compensation                                                                 |  |                  | 493,392    
|Other                                                                        |  |                  | 206,993    
|Depreciation
of property, plant and equipment                                |  |                  | 174,698    
|TOTAL
    OPERATING EXPENSES                                                 |  |                  | 990,882    
|                                                                             |  |                  |            
|LOSS
    FROM OPERATIONS                                                     |  |                  | (990,882   
|                                                                             |  |                  |            
|OTHER
    (INCOME) EXPENSES                                                  |  |                  |            
|Impairment
    loss - property, plant and equipment.                         |  |                  | 635,770    
|Gain
    on disposal of property, plant and equipment                        |  |                  | -          
|Interest
    expense, net                                                    |  |                  | 1,161,337  
|Other
    expense, net                                                       |  |                  | (10,498    
|TOTAL
    OTHER (INCOME) EXPENSES                                            |  |                  | (1,786,609 
|                                                                             |  |                  |            
|LOSS
    BEFORE INCOME TAXES                                                 |  |                  | (2,777,491 
|                                                                             |  |                  |            
|Provision
    for Income taxes                                               |  |                  | -          
|                                                                             |  |                  |            
|NET
    LOSS                                                                 |  |                  | (2,777,491 
|                                                                             |  |                  |            
|Basic
    and diluted loss per share                                         |  | $                | (0.02      
|                                                                             |  |                  |            
|Basic
    and diluted weighted average number of shares outstanding (Note 2) |  |                  | 124,756,158





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



F-3









PLASTIC2OIL,
INC. AND SUBSIDIARIES

CONSOLIDATED
STATEMENTS OF COMPREHENSIVE LOSS



|                                                         |  | December
    31, |           
|-------------------------------------------------------- |  | ---------------- | ----------
|                                                         |  | 2018             |           
|                                                         |  |                  |           
|NET
    LOSS                                             |  | $                | (2,777,491
|                                                         |  |                  |           
|OTHER
    COMPREHENSIVE INCOME (LOSS), NET OF INCOME TAX |  |                  |           
|Foreign
    currency items                               |  |                  | 183,044   
|COMPREHENSIVE
    LOSS                                   |  | $                | (2,594,447



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



F-4









Plastic2Oil,
Inc. and Subsidiaries

CONSOLIDATED
STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

Years
Ended December 31, 2018 and 2017



|                                                                                     |  | Common
                                         Stock
                                                                                $0.001
                                         Par Value |             |  | Additional
    Paid |   |         | Accumulated    |  |   | Other
    Comprehensive |  |  | Total
    Stockholder |            
|------------------------------------------------------------------------------------ |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------- |  | ------------------- | - | ------- | -------------- |  | - | ----------------------- |  |  | --------------------- | -----------
|                                                                                     |  | Shares                                                                                                                                                                                          |             |  | Amount              |   |         | in
    Capital |  |   | Deficit                 |  |  | Income
    (Loss)     |            
|                                                                                     |  |                                                                                                                                                                                                 |             |  |                     |   |         |                |  |   |                         |  |  |                       |            
|BALANCES
    - DECEMBER 31, 2016                                                     |  |                                                                                                                                                                                                 | 124,756,158 |  |                     | $ | 124,756 |                |  | $ | 67,113,822              |  |  | $                     | (77,944,132
|                                                                                     |  |                                                                                                                                                                                                 |             |  |                     |   |         |                |  |   |                         |  |  |                       |            
|To
    book Stock compensation expense related to granting of stock options at $0.05 |  |                                                                                                                                                                                                 | -           |  |                     |   | -       |                |  |   | 63,170                  |  |  |                       | -          
|                                                                                     |  |                                                                                                                                                                                                 |             |  |                     |   |         |                |  |   |                         |  |  |                       |            
|Foreign
    currency adjustment                                                      |  |                                                                                                                                                                                                 | -           |  |                     |   | -       |                |  |   | -                       |  |  |                       | -          
|                                                                                     |  |                                                                                                                                                                                                 |             |  |                     |   |         |                |  |   |                         |  |  |                       |            
|Net
    loss                                                                         |  |                                                                                                                                                                                                 | -           |  |                     |   | -       |                |  |   | -                       |  |  |                       | (1,474,005 
|                                                                                     |  |                                                                                                                                                                                                 |             |  |                     |   |         |                |  |   |                         |  |  |                       |            
|BALANCES
    - DECEMBER 31, 2017                                                     |  |                                                                                                                                                                                                 | 124,756,158 |  |                     | $ | 124,756 |                |  | $ | 67,176,992              |  |  | $                     | (79,418,137





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



(Continued
next page)



F-5











Plastic2Oil,
Inc. and Subsidiaries

CONSOLIDATED
STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

Years
Ended December 31, 2018 and 2017



|                                 |  | Common
                                         Stock
                                                                                $0.001
                                         Par Value |             |  | Additional
    Paid |  |         | Accumulated    |  |   | Other
    Comprehensive |  |  | Total
    Stockholder |            
|-------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------- |  | ------------------- |  | ------- | -------------- |  | - | ----------------------- |  |  | --------------------- | -----------
|                                 |  | Shares                                                                                                                                                                                          |             |  | Amount              |  |         | in
    Capital |  |   | Deficit                 |  |  | Income
    (Loss)     |            
|                                 |  |                                                                                                                                                                                                 |             |  |                     |  |         |                |  |   |                         |  |  |                       |            
|BALANCES
    - DECEMBER 31, 2017 |  |                                                                                                                                                                                                 | 124,756,158 |  |                     |  | 124,756 |                |  | $ | 67,176,992              |  |  | $                     | (79,418,137
|                                 |  |                                                                                                                                                                                                 |             |  |                     |  |         |                |  |   |                         |  |  |                       |            
|Stock
    compensation expense   |  |                                                                                                                                                                                                 | -           |  |                     |  | -       |                |  |   | 22,666                  |  |  |                       | -          
|                                 |  |                                                                                                                                                                                                 |             |  |                     |  |         |                |  |   |                         |  |  |                       |            
|Foreign
    currency adjustment  |  |                                                                                                                                                                                                 | -           |  |                     |  | -       |                |  |   | -                       |  |  |                       | -          
|                                 |  |                                                                                                                                                                                                 |             |  |                     |  |         |                |  |   |                         |  |  |                       |            
|Net
    loss                     |  |                                                                                                                                                                                                 | -           |  |                     |  | -       |                |  |   | -                       |  |  |                       | (2,777,491 
|                                 |  |                                                                                                                                                                                                 |             |  |                     |  |         |                |  |   |                         |  |  |                       |            
|BALANCES
    - DECEMBER 31, 2018 |  |                                                                                                                                                                                                 | 124,756,158 |  |                     |  | 124,756 |                |  | $ | 67,199,658              |  |  | $                     | (82,195,628







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



F-6











PLASTIC2OIL,
INC. AND SUBSIDIARIES

CONSOLIDATED
STATEMENTS OF CASH FLOWS

For
the Twelve Months Ended December 31,



|                                                               |  | 2018 |            |   | 2017 |  
|-------------------------------------------------------------- |  | ---- | ---------- | - | ---- | -
|                                                               |  |      |            |   |      |  
|CASH
    FLOWS FROM OPERATING ACTIVITIES:                      |  |      |            |   |      |  
|                                                               |  |      |            |   |      |  
|NET
    LOSS                                                   |  | $    | (2,777,491 | ) |      | $
|Reconciliation
    of net loss to net cash used in operations: |  |      |            |   |      |  
|Depreciation
    of property plant and equipment               |  |      | 174,699    |   |      |  
|Amortization
    of debt discount                              |  |      | 147,836    |   |      |  
|Impairment
    loss - property, plant and equipment            |  |      | 635,770    |   |      |  
|Accrued
    interest expense                                   |  |      | 1,013,501  |   |      |  
|Stock
    compensation expense                                 |  |      | 22,665     |   |      |  
|Gain
    on sale of property plant and equipment               |  |      | -          |   |      |  
|                                                               |  |      |            |   |      |  
|Changes
    in assets and liabilities:                         |  |      |            |   |      |  
|Accounts
    receivable                                        |  |      | -          |   |      |  
|Prepaid
    expenses and other current assets                  |  |      | (7,990     | ) |      |  
|Accounts
    payable                                           |  |      | (15,511    | ) |      |  
|Accrued
    expenses                                           |  |      | 253,589    |   |      |  
|NET
    CASH USED IN OPERATING ACTIVITIES                      |  |      | (552,932   | ) |      |  
|                                                               |  |      |            |   |      |  
|CASH
    FLOW FROM INVESTMENT ACTIVITIES:                      |  |      |            |   |      |  
|Decrease
    (increase) in restricted cash                     |  |      | 100,524    |   |      |  
|NET
    CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES        |  |      | 100,524    |   |      |  
|                                                               |  |      |            |   |      |  
|CASH
    FLOWS FROM FINANCING ACTIVITIES:                      |  |      |            |   |      |  
|Proceeds
    from sale of property, plant and equipment        |  |      | -          |   |      |  
|Proceeds
    from short-term loans – related party             |  |      | 327,930    |   |      |  
|Repayment
    of mortgages and capital leases                  |  |      | -          |   |      |  
|NET
    CASH PROVIDED BY FINANCING ACTIVITIES                  |  |      | 327,930    |   |      |  
|                                                               |  |      |            |   |      |  
|NET
    DECREASE IN CASH                                       |  |      | (124,478   | ) |      |  
|                                                               |  |      |            |   |      |  
|CASH
    AT BEGINNING OF YEAR                                  |  |      | 172,286    |   |      |  
|                                                               |  |      |            |   |      |  
|CASH
    AT END OF YEAR                                        |  | $    | 47,808     |   |      | $
|                                                               |  |      |            |   |      |  
|SUPPLEMENTAL
    DISCLOSURE OF CASH FLOW INFORMATION:          |  |      |            |   |      |  
|Cash
    paid for income taxes                                 |  | $    | -          |   |      | $
|Cash
    paid for interest                                     |  | $    | 578        |   |      | $



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



F-7











PLASTI2OIL,
INC. AND SUBSIDIARIES

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE
1 – ORGANIZATION AND GOING CONCERN



Plastic2Oil,
Inc. (the “Company” or “P2O”) was originally incorporated as 310 Holdings, Inc. (“310”) in
the State of Nevada on April 20, 2006. 310 had no significant activity from inception through 2009. In April 2009, John Bordynuik
purchased 63% of the issued and outstanding shares of 310. During 2009, the Company changed its name to JBI, Inc. and began operations
of its main business operation, transforming waste plastics to oil and other fuel products. During 2014, the Company changed its
name to Plastic2Oil, Inc. (“P2O”). P2O is a combination of proprietary technologies and processes developed by P2O
which convert waste plastics into fuel. P2O currently, as of the date of this filing, has three processors at its Niagara Falls,
NY facility (the “Niagara Falls Facility”). The processors have been idle since December 2013. Our P2O business has
begun the transition from research and development to a commercial business that plans to grow through the licensing of technology
and or from the sale of processors.



Presently,
we do not have sufficient cash to operate our business which has forced us to suspend our operations until such time as we receive
a capital infusion or cash advances on the sale of our processors.



Going
Concern



These
consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United
States of America (“US GAAP”), which contemplates continuation of the Company as a going concern which assumes the
realization of assets and satisfaction of liabilities and commitments in the normal course of business. The Company has experienced
negative cash flows from operations since inception, has net losses from continuing operations of $2,777,491, and $1,474,005
for the years ended December 31, 2018 and 2017, respectively, and has a working capital deficit of $14,622,138 and an accumulated
deficit of $82,195,628, at December 31, 2018. These factors raise substantial doubt about the Company’s ability to continue
as a going concern and to operate in the normal course of business. The Company has funded its activities to date almost exclusively
from equity financings, loans from related parties and issuance of secured long-term debt.



The
Company will continue to require substantial funds to continue the expansion of its P2O business to achieve significant commercial
productions, and to significantly increase sales and marketing efforts. Management’s plans in order to meet its operating
cash flow requirements include financing activities such as private placements of its common stock, issuances of debt and convertible
debt instruments.



While
the Company believes that it will be successful in obtaining the necessary financing to fund its operations, meet regulatory requirements
and achieve commercial production goals, there are no assurances that such additional funding will be achieved and that it will
succeed in its future operations. The consolidated financial statements do not include any adjustments relating to the recoverability
and classification of recorded asset amounts or amounts of liabilities that might be necessary should we be unable to continue
in existence.



F-8











NOTE
2 – SUMMARY OF ACCOUNTING POLICIES



Basis
of Consolidation



The
consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Plastic2Oil of NY#1 Inc.,
Plastic2Oil (Canada) Inc., JBI CDE Inc., Plastic2Oil Re One Inc., JBI Re #1 Inc., Plastic2Oil Marine Inc., Javaco, and Pak-it.
All intercompany transactions and balances have been eliminated in consolidation. Amounts in the consolidated financial statements
are expressed in US dollars. Recycling Center, Pak-It and Javaco have also been consolidated.



Estimates



The
preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities, 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 period. Actual results could differ from these
estimates. Significant estimates include amounts for impairment of long-lived assets, share based compensation, asset retirement
obligations, inventory obsolescence, accrued liabilities, accounts receivable exposures and valuation of options and warrants.



Cash



The
Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents.
The Company held no cash equivalents as of December 31, 2018 and 2017. As of December 31, 2018 and December 31, 2017, the Company
has cash of $47,808 and $172,286, respectively.



Restricted
Cash



As
of December 31, 2018 and 2017, the Company had $0 and $100,524, respectively, of restricted cash, which was used to secure a line
of credit that secured a performance bond on behalf of the Company. Given the Company is no longer producing fuel, the State of
New York released the bond requirement.





F-9









Property,
Plant and Equipment



Property,
plant and equipment are recorded at cost. Depreciation is provided using the straight-line method over the estimated useful lives
of the various classes of assets, and capital leased assets are given useful lives coinciding with the asset classification they
are classified as. These lives are as follows:



|Leasehold
    improvements          | lesser
    of useful life or term of the lease
|----------------------------------- | ----------------------------------------------
|Machinery
    and office equipment  | 3-15
    years                                
|Furniture
    and fixtures          | 7
    years                                   
|Office
    and industrial buildings | 25
    -30 years                              



Gains
and losses on depreciable assets retired or sold are recognized in the statements of operations in the year of disposal. Repairs
and maintenance expenditures are expensed as incurred and expenditures that increase the value or useful life of the asset are
capitalized.



Construction
in Process



The
Company capitalizes customized equipment built to be used in the future day to day operations at cost. Once complete and available
for use, the cost for accounting purposes is transferred to property, plant and equipment, where normal depreciation rates are
applied.



Impairment
of Long-Lived Assets



The
Company reviews for impairment of long-lived assets on an asset by asset basis. Impairment is recognized on properties held for
use when the expected undiscounted cash flows for a property are less than its carrying amount at which time the property is written
down to fair value. Properties held for sale are recorded at the lower of the carrying amount or the expected sales price less
costs to sell. The sale or disposal of a “component of an entity” is treated as discontinued operations.



During
the years ended December 31, 2018 and 2017, the Company recorded impairment losses on deposits and property, plant and equipment
of $635,770 and $13,158, respectively, in accordance to ASC 360-10-50-2 where an impairment loss will be recognized only if the
carrying amount of the long-lived assets are not recoverable and exceeds its fair value. The Company estimates the fair value
of its long-lived assets for impairment purposes using an undiscounted cash flow method.



Asset
Retirement Obligations



The
fair value of the estimated asset retirement obligation is recognized in the consolidated balance sheets when identified and a
reasonable estimate of fair value can be made. The asset retirement cost, equal to the estimated fair value of the asset retirement
obligation, is capitalized as part of the cost of the related long-lived asset. The balance of the asset retirement obligation
is determined through an assessment made by the Company’s engineers, of the total costs expected to be incurred by the Company
when closing a facility. The total estimated cost is then discounted using the current market rates to determine the present value
of the asset as of the date of this valuation. As of the date of the creation of the asset retirement obligation in the amount
of $58,363, the Company determined the present value of the obligation using a discount rate equal to 2.96%. The present value
of the asset retirement obligation is then capitalized on the consolidated balance sheets and is depreciated over the asset’s
estimated useful life and is included in depreciation and accretion expense in the consolidated statements of operations. Increases
in the asset retirement obligation resulting from the passage of time are recorded as accretion of asset retirement obligations
in the consolidated statements of operations. Actual expenditures incurred are charged against the accumulated obligation. As
of December 31, 2018 and December 31, 2017, the carrying value of the asset retirement obligations was $67,897 and $65,920, respectively.
These costs include disposal of plastic and other non-hazardous waste, site closing labor and testing and sampling of the site
upon closure.



F-10









Environmental
Contingencies



The
Company records environmental liabilities at their undiscounted amounts on our balance sheets as other current or long-term liabilities
when environmental assessments indicate that remediation efforts are probable, and the costs can be reasonably estimated. These
costs may be discounted to reflect the time value of money if the timing of the cash payments is fixed or reliably determinable
and extends beyond a current period. Estimates of our liabilities are based on currently available facts, existing technology
and presently enacted laws and regulations, taking into consideration the likely effects of other societal and economic factors,
and include estimates of associated legal costs. These amounts also consider prior experience in remediating contaminated sites,
other companies’ clean-up experience and data released by the Environmental Protection Agency (EPA) or other organizations.
Our estimates are subject to revision in future periods based on actual costs or new circumstances. We capitalize costs that benefit
future periods and we recognize a current period charge in operation and maintenance expense when clean-up efforts do not benefit
future periods.



We
evaluate any amounts paid directly or reimbursed by government sponsored programs and potential recoveries or reimbursements of
remediation costs from third parties including insurance coverage separately from our liability. Recovery is evaluated based on
the creditworthiness or solvency of the third party, among other factors. When recovery is assured, we record and report an asset
separately from the associated liability on our balance sheets. No amounts for recovery have been accrued to date.



F-11









Foreign
Currency Translation



The
consolidated financial statements have been translated into U.S. dollars in accordance with Financial Accounting Standards Board
(“FASB”) Accounting Standards Codification (“ASC”) Topic 830. All monetary items have been translated
using the exchange rates in effect at the balance sheet date. All non-monetary items have been translated using the historical
exchange rates at the time of transactions. Income statement amounts have been translated using the average exchange rate for
the year. Foreign exchange of $0 and gain of $57,301 are included as general and administrative expenses in the consolidated statements
of operations for the years ended December 31, 2018 and 2017, respectively.



Income
Taxes



The
Company utilizes the asset and liability method to measure and record deferred income tax assets and liabilities. Deferred tax
assets and liabilities reflect the future income tax effects of temporary differences between the financial statement carrying
amounts of existing assets and liabilities and their respective tax basis and are measured using enacted tax rates that apply
to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets
are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of
the deferred tax assets will not be realized.





F-12









Loss
Per Share



The
financial statements include basic and diluted per share information. Basic net loss per share is computed by dividing net
loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is
computed by dividing net loss by the weighted average number of shares of common stock and potentially outstanding shares of
common stock during each period. Common stock equivalents are excluded from the computation of diluted loss per share when
their effect is anti-dilutive. For the year ended December 31, 2018, potential dilutive common stock equivalents consisted
1,600,000 shares underlying common stock warrants and 220,000 shares underlying stock options, which were not included in the
calculation of the diluted loss per share because their effect is anti-dilutive. For the year ended December 31, 2017,
potential dilutive common stock equivalents consisted 4,850,000 shares underlying common stock warrants and 2,380,000 shares
underlying stock options, which were not included in the calculation of the diluted loss per share because of their effect is
anti-dilutive.



Concentrations
and Credit Risk



Financial
instruments which potentially expose the Company to concentrations of credit risk consist principally of operating demand deposit
accounts and accounts receivable. The Company’s policy is to place our operating demand deposit accounts with high credit
quality financial institutions that are insured by the Federal Deposit Insurance Corporation, however, account balances may at
times exceed insured limits.



During
the years ended December 31, 2018 and 2017 two suppliers accounted for 34.3% of accounts payable.



Fair
Value of Financial Instruments



The
carrying amounts of cash, accounts payable, accrued expenses, capital leases, and promissory notes approximate fair value because
of the short-term nature of these items or prevailing interest rates.





F-13









Recently
Issued Accounting Pronouncements



In
February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), that replaces existing lease guidance. Under this ASU, leases
will be required to record right-of-use assets and corresponding lease liabilities on the balance sheet. This guidance is effective
beginning January 1, 2019. The new standard is required to be applied with a modified retrospective approach to each prior reporting
period presented. The Company has not yet determined the impact that the adoption of this guidance will have on our consolidated
financial statements.



Management
does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material
effect on the accompanying consolidated financial statements.



F-14









NOTE
4 - PROPERTY, PLANT AND EQUIPMENT, NET



Property,
Plant and Equipment consist of the following at:



|As
    of December 31, 2018         |  | Cost |         |  | Accumulated
    Depreciation |   |          | Net
    BookValue | 
|----------------------------------- |  | ---- | ------- |  | ---------------------------- | - | -------- | ----------------- | 
|                                    |  |      |         |  |                              |   |          |                   | 
|Machinery
    and office equipment  |  |      | 47,137  |  |                              |   | (47,056  | )                 | 
|Furniture
    and fixtures          |  |      | 14,166  |  |                              |   | (14,166  | )                 | 
|Land                                |  |      | 109,203 |  |                              |   | -        |                   | 
|Asset
    retirement obligation     |  |      | 58,363  |  |                              |   | (12,497  | )                 | 
|Office
    and industrial buildings |  |      | 542,450 |  |                              |   | (160,408 | )                 | 
|                                    |  |      |         |  |                              |   |          |                   | 
|Equipment
    under capital lease   |  |      | 53,257  |  |                              |   | (53,257  | )                 | 
|Total                               |  | $    | 824,576 |  |                              | $ | (287,387 | )                 | 



|As
    of December 31, 2017         |  | Cost |           |  | Accumulated
    Depreciation |   |            | Net
    BookValue | 
|----------------------------------- |  | ---- | --------- |  | ---------------------------- | - | ---------- | ----------------- | 
|                                    |  |      |           |  |                              |   |            |                   | 
|Leasehold
    improvements          |  | $    | 218,054   |  |                              | $ | (40,635    | )                 | 
|Machinery
    and office equipment  |  |      | 1,626,379 |  |                              |   | (1,385,432 | )                 | 
|Furniture
    and fixtures          |  |      | 16,368    |  |                              |   | (16,368    | )                 | 
|Land                                |  |      | 243,859   |  |                              |   | -          |                   | 
|Asset
    retirement obligation     |  |      | 58,363    |  |                              |   | (9,799     | )                 | 
|Office
    and industrial buildings |  |      | 1,084,899 |  |                              |   | (271,672   | )                 | 
|Equipment
    under capital lease   |  |      | 53,257    |  |                              |   | (51,355    | )                 | 
|Total                               |  | $    | 3,301,179 |  |                              | $ | (1,775,261 | )                 | 



At
December 31, 2018 and 2017, the Company recognized $172,796, and $190,009, respectively, of depreciation expense. At December
31, 2018 and 2017, machinery and equipment with a cost of $53,257 and accumulated amortization of $53,256 and $51,355, respectively,
were under capital lease. During the periods ended December 31, 2018 and 2017, the Company recognized $1,902, and $7,608, respectively,
of depreciation expense related to these assets under capital lease.



At
December 31, 2018 and 2017, we recorded impairment loss on property, plant and equipment of $635,770 and $13,158, respectively
in accordance to ASC 360-10-50-2 where an impairment loss will be recognized only if the carrying amount of the long-lived assets
are not recoverable and exceeds its fair value. The change in 2017 relates specifically to the sale of the 1783 Allanport
property.



NOTE
5 - PROPERTY HELD FOR SALE



The
Company has offered for sale its land and building of its blending site located in Thorold, Ontario. Canada. The Company no longer
requires the land or building as part of its plans to either assemble and or manufacture or license its technology. The land and
building are currently listed for sale and the Company anticipates a sale in less than twelve (12) months. Accordingly, these
assets have been reclassified from property, plant and equipment to property held for sale in the accompanying balance sheet as
of December 31, 2018. The Company has determined the fair value of its property held for sale exceeds its carrying value and no
valuation allowance is necessary. The net book value of the land and building of $180,235 has been presented in the accompanying
balance sheet as property held for sale at December 31, 2018.





F-15









NOTE
6 - INCOME TAXES



The
following table summarizes the activities for the year ended December 31, 2018 and December 31, 2017, respectively:



|                                                          |  | 2018 |            |   | 2017 |  
|--------------------------------------------------------- |  | ---- | ---------- | - | ---- | -
|Statutory
    tax rate:                                   |  |      |            |   |      |  
|U.S.                                                      |  |      | 21         | % |      |  
|Foreign                                                   |  |      | 26.5       | % |      |  
|                                                          |  |      |            |   |      |  
|Loss
    from operations before recovery of income taxes: |  |      |            |   |      |  
|U.S.                                                      |  | $    | (2,622,093 | ) |      | $
|Foreign                                                   |  |      | (155,398   | ) |      |  
|                                                          |  |      | (2,777,491 | ) |      | $
|                                                          |  |      |            |   |      |  
|Expected
    income tax recovery                          |  |      | (591,820   | ) |      | $
|                                                          |  |      |            |   |      |  
|Permanent
    differences                                 |  |      | 265        |   |      |  
|Other
    adjustments                                     |  |      | (35,662    | ) |      |  
|Change
    in Tax Rate                                    |  |      | -          |   |      |  
|Increase
    in valuation allowance                       |  |      | 627,217    |   |      |  
|                                                          |  |      |            |   |      |  
|Income
    tax recovery from continuing operations        |  | $    | -          |   |      | $



The
Company’s income tax recovery is allocated as follows:



The
Company’s deferred tax assets and liabilities as at December 31, are as follows:



|                                  |  | 2018 |             |   | 2017 |  
|--------------------------------- |  | ---- | ----------- | - | ---- | -
|Deferred
    Tax Assets           |  |      |             |   |      |  
|Net
    operating losses          |  | $    | 13,395,733  |   |      | $
|Reserve
    – contingency         |  |      | 64,563      |   |      |  
|Property,
    plant and equipment |  |      | 239,907     |   |      |  
|Accounts
    receivable           |  |      | 137,144     |   |      |  
|Accrued
    expenses              |  |      | 296         |   |      |  
|Stock
    based compensation      |  |      | 225,466     |   |      |  
|Impairment
    Reserve            |  |      | 458,121     |   |      |  
|Other                             |  |      | 1,171       |   |      |  
|                                  |  |      | 14,522,401  |   |      |  
|Deferred
    Tax Liability        |  |      |             |   |      |  
|Property,
    plant and equipment |  |      | (451,476    | ) |      |  
|                                  |  |      |             |   |      |  
|Less:
    Valuation allowance     |  |      | (14,070,925 | ) |      |  
|                                  |  | $    | -           |   |      | $



The
Company has $46,166,933 of US and $5,928,358 of foreign, net operating tax losses that begin to expire in the year 2038.



F-16











The
Company calculates its income tax expense by estimating the annual effective tax rate and applying that rate to the year-to-date
ordinary income (loss) at the end of the period. The Company records a tax valuation allowance when it is more likely than not
that it will not be able to recover the value of its deferred tax assets. For the years ended December 31, 2018 and 2017, the
Company calculated its estimated annualized effective tax rate at 0% and 0%, respectively, for both the United States and Canada.
The Company had no income tax expense on its $2,777,491 and $1,474,005 losses for the years ended December 31, 2018 and 2017,
respectively.



The
Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would
more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the
amount recognized in the financial statements is the largest benefit that has a greater than 50% likelihood of being realized
upon ultimate settlement with the relevant tax authority. The Company recognizes interest accrued on uncertain tax positions as
well as interest received from favorable tax settlements within interest expense. The Company recognizes penalties accrued on
unrecognized tax benefits within selling, general and administrative expenses. As of December 31, 2018 and 2017, the Company had
no uncertain tax positions.



On
December 22, 2017, the Tax Cuts and Jobs Act (the “Act”) was signed into law. The Act decreases the U.S. corporate
federal income tax rate from a maximum of 35% to a flat 21% effective January 1, 2018. The impact of the re-measurement on the
Corporation’s net deferred tax asset, as of December 31, 2017, was an approximately $7,000,000 decrease in deferred tax
assets, with a corresponding decrease in the Company’s valuation allowance, and no impact on income tax expense. The Act
also includes a number of other provisions including, among others, the elimination of net operating loss carrybacks and limitations
on the use of future losses, the repeal of the Alternative Minimum Tax regime and the repeal of the domestic production activities
deduction. These provisions are not expected to have a material effect on the Corporation.



Given
the significant complexity of the Act and anticipated additional implementation guidance from the Internal Revenue Service, further
implications of the Act may be identified in future periods.



The
Company does not anticipate any significant changes to the total amounts of unrecognized tax benefits in the next twelve months.
The years ended December 31, 2014 through December 31, 2018 are open tax years.



F-17









NOTE
7 – SECURED PROMISSORY NOTES - RELATED PARTIES



Secured
promissory notes with related parties consists of the following:



|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  | As
    ofDecember 31, 2018 |            |  | As
    ofDecember 31, 2017 |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------- | ---------- |  | -------------------------- | -
|Secured
    Demand Promissory Notes bearing interest ranging from 4 to 12% per annum.                                                                                                                                                                                                                                                                                                                                                                                                               |  | $                          | 1,907,636  |  |                            | $
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  |                            |            |  |                            |  
|Secured
    Demand Promissory Notes bearing interest ranging from 4 to 12% per annum.                                                                                                                                                                                                                                                                                                                                                                                                               |  |                            | 628,382    |  |                            |  
|Secured
    Demand Promissory Note - $100,000 Canadian dollars in February 16, 2018 bearing interest of 4% per annum, payable on demand
    and secured by the blending site property located at 1776 Allanport, Road, Thorold, Ontario CA.                                                                                                                                                                                                                                                         |  |                            | 75,892     |  |                            |  
|Secured
    Promissory Notes of-$1,000,000 in November 19, 2014 bearing interest of 12% per annum compounded annually, together with a
    five-year warrant to purchase up to one million shares of the Company’s common stock at an exercise price of $0.12 per
    share, and payable upon maturity in 2019 and secured by a security interest in substantially all of the assets of the Company
    and its subsidiaries.                                                                       |  |                            | 1,595,798  |  |                            |  
|Secured
    Demand Promissory Note - $125,000, July 11, 2018 bearing interest of 4% per annum, payable on demand and secured by the blending
    site property located at 1776 Allanport, Road, Thorold, Ontario CA.                                                                                                                                                                                                                                                                                |  |                            | 126,711    |  |                            |  
|Secured
    Promissory Notes ($1,000,000 in August 29, 2013 and $2,000,000 in September 31, 2014) bearing interest of 12% per annum compounded
    annually, together with a five-year warrant to purchase up to three million shares of the Company’s common stock at
    an exercise price of $0.54 per share and payable upon maturity in 2018 and secured by a security interest in substantially
    all of the assets of the Company and its subsidiaries. This note is currently in default. |  |                            | 5,463,259  |  |                            |  
|Secured
    Demand Promissory Note - $125,000 in July 31, 2018 bearing interest of 4% per annum, payable on demand and secured by the
    blending site property located at 1776 Allanport, Road, Thorold, Ontario CA.                                                                                                                                                                                                                                                                              |  |                            | 126,740    |  |                            |  
|Secured
    Promissory Note -$100,000 in August 24, 2016 bearing interest of 12% per annum compounded annually, together with a five-year
    warrant to purchase up to one million shares of the Company’s common stock at an exercise price of $0.12 per share,
    and payable upon maturity in 2021 and secured by a security interest in substantially all of the assets of the Company and
    its subsidiaries.                                                                              |  |                            | 129,685    |  |                            |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  |                            |            |  |                            |  
|Secured
    Promissory Note -$400,000 in October 18, 2016 bearing interest of 12% per annum compounded annually, together with a five-year
    warrant to purchase up to one million shares of the Company’s common stock at an exercise price of $0.12 per share,
    and payable upon maturity in 2021 and secured by a security interest in substantially all of the assets of the Company and
    its subsidiaries.                                                                             |  |                            | 502,848    |  |                            |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  |                            |            |  |                            |  
|Total                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |                            | 10,556,951 |  |                            |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  |                            |            |  |                            |  
|Less:
    Current portion short term secured promissory notes – related parties                                                                                                                                                                                                                                                                                                                                                                                                                     |  | $                          | 9,924,418  |  |                            | $
|Long
    Term Secured promissory notes – related parties                                                                                                                                                                                                                                                                                                                                                                                                                                            |  | $                          | 632,533    |  |                            | $





|Continuity of Secured Promissory Notes – Related Parties |  | As of  December 31, 2018 |            |   | As of  December 31, 2017 |  
|-------------------------------------------------------- |  | ------------------------ | ---------- | - | ------------------------ | -
|Face value of secured notes payable                      |  | $                        | 6,996,441  |   |                          | $
|Accrued interest on secured promissory notes             |  |                          | 3,581,343  |   |                          |  
|Less: Unamortized debt discount                          |  |                          | (20,833    | ) |                          |  
|Carrying value secured promissory notes                  |  | $                        | 10,556,951 |   |                          | $







The following annual payments of principal and interest are required over the next five years in respect to
these short term and long term related party secured notes payables:



|Years
    Ending December 31, |  | Annual
    Payments |           
|----------------------------- |  | ------------------- | ----------
|                              |  |                     |           
|2019                          |  | $                   | 9,924,418 
|2020                          |  |                     |           
|2021                          |  |                     | -         
|2022                          |  |                     | 632,533   
|Total                         |  | $                   | 10,556,951



F-18











NOTE
8 – SECURED PROMISSORY NOTE



Secured
promissory note consists of the following at periods ended:



|                                                                                                                                                                                                                                                                                                                                                                                                                       |  | As
    ofDecember 31, 2018 |         |  | As
    ofDecember 31, 2017 |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------- | ------- |  | -------------------------- | -
|                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                            |         |  |                            |  
|Secured
    Promissory Note -$100,000 in August 10, 2016 bearing interest of 12% per annum compounded annually, together with a five-year
    warrant to purchase up to one million shares of the Company’s common stock at an exercise price of $0.12 per share,
    and payable upon maturity in 2021 and secured by a security interest in substantially all of the assets of the Company and
    its subsidiaries. |  |                            | 130,275 |  |                            |  
|Total                                                                                                                                                                                                                                                                                                                                                                                                                  |  |                            | 130,275 |  |                            |  
|Less:
    current portion                                                                                                                                                                                                                                                                                                                                                                                              |  |                            | -       |  |                            |  
|Secured
    promissory notes                                                                                                                                                                                                                                                                                                                                                                                           |  | $                          | 130,275 |  |                            | $



|Continuity
    of Secured Promissory Notes                                         |  | As
    ofDecember 31, 2018 |         |   | As
    ofDecember 31, 2017 |  
|---------------------------------------------------------------------------------- |  | -------------------------- | ------- | - | -------------------------- | -
|Face
    value of August 10, 2016 secured note payable                             |  | $                          | 100,000 |   |                            | $
|Total
    face value of promissory notes payable                                   |  |                            | 100,000 |   |                            |  
|Discount
    on August 10, 2016 secured notes payable (100,000 warrants)           |  |                            | (2,000  | ) |                            |  
|Accretion
    of discount on secured notes payable ($100,000 secured note payable) |  |                            | 933     |   |                            |  
|Accrued
    interest on secured notes payable                                      |  |                            | 31,342  |   |                            |  
|Carrying
    value of Secured Promissory Notes                                     |  | $                          | 130,275 |   |                            | $





The
following annual payments of principal and accrued interest are required over the next five years in respect to these secured
notes payable:





|Years
    Ending December 31, |  | Annual
    Payments |        
|----------------------------- |  | ------------------- | -------
|2019                          |  | $                   | -      
|2020                          |  |                     | -      
|2021                          |  |                     | 130,275
|                              |  |                     |        
|Total                         |  | $                   | 130,275





F-19











NOTE
9 - CAPITAL LEASES



The
Capital Leases consist of the following at periods ending:



|                                                                                                                                                                                                                                                                                           |  | As
    ofDecember 31, 2018 |        |  | As
    ofDecember 31, 2017 |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | -------------------------- | ------ |  | -------------------------- | -
|                                                                                                                                                                                                                                                                                           |  |                            |        |  |                            |  
|Equipment
    capital lease bears interest at 3.9% per annum, secured by the equipment and matured on May 10, 2016, Principal and interest
    were due, in their entirety, at maturity. The maturity was extended to May 10, 2016 by the Lessor. The capital lease is in
    default (1). |  |                            | 22,210 |  |                            |  
|                                                                                                                                                                                                                                                                                           |  |                            |        |  |                            |  
|Total                                                                                                                                                                                                                                                                                      |  |                            | 22,210 |  |                            |  
|Less:
    current portion                                                                                                                                                                                                                                                                  |  |                            | 22,210 |  |                            |  
|Mortgages
    payable and capital leases                                                                                                                                                                                                                                                   |  | $                          | -      |  |                            | $



(1)
Includes accrued interest



F-20









NOTE
10 – COMMITMENTS AND CONTINGENCIES



Commitments



Plastic2Oil
Marine, Inc., one of the Company’s subsidiaries, which is currently not operating, entered into a consulting service contract
in 2010 with a company owned by the Company’s chief executive officer. The contract provides the related company with a
share of the operating income earned from Plastic2Oil technology installed on marine vessels which are owned by the related company.
The contract provides a minimum future payment equal to fifty percent of the operating income generated from the operations of
two of the most profitable marine vessel processors and 10% from all other marine vessel processors. As of December 31, 2018,
there were no currently installed marine vessel processors pursuant to the contract.



As
of December 31, 2018, the Company has committed to purchase certain pieces of key machinery from vendors related to the future
expansion of its operations.



Contingencies



As
of December 31, 2018, the Company is involved in litigation and claims which arise from time to time in the normal course of business.
In the opinion of management, based upon the information and facts known to them, any liability that may arise from such contingencies
would not have a material adverse effect on the consolidated financial statements of the Company.



F-21









NOTE
11 – STOCKHOLDERS’ DEFICIT



Warrants



The
following table summarizes the activities for the years ended December 31, 2018 and 2017:



|                                   |  |          |            |  | Weighted           |   |      | Weighted           | 
|---------------------------------- |  | -------- | ---------- |  | ------------------ | - | ---- | ------------------ | 
|                                   |  | Warrants |            |  | Average            |   |      | Average            | 
|                                   |  | Number   |            |  | Exercise
    Price |   |      | Remaining
    Term | 
|OUTSTANDING,
    December 31, 2016 |  |          | 14,950,000 |  |                    | $ | 0.18 |                    | 
|Expired                            |  |          | 10,100,000 |  |                    |   | 0.09 |                    | 
|OUTSTANDING,
    December 31, 2017 |  |          | 4,850,000  |  |                    | $ | 0.38 |                    | 
|Expired                            |  |          | 3,250,000  |  |                    |   | 0.06 |                    | 
|OUTSTANDING,
    December 31, 2018 |  |          | 1,600,000  |  |                    | $ | 0.12 |                    | 



Pursuant
to a secured debt issuance on August 10, 2016, August 24, 2016 and October 25, 2016, the Company issued 600,000 warrants, to purchase
shares of common stock for $0.12 per share to the holder of the secured debt. The warrants have a five year term from the date
of issuance, as such the corresponding expiry dates are August 10, 2021, August 25, 2021 and October 25, 2021 respectively. The
Company allocated $24,000 of the proceeds to the warrants based on their relative fair value. Such amount was recorded as a discount
against the debt and is being amortized in to interest expense through the maturity date of the debt. The relative fair value
of the warrants was determined on the date of the grant using the Black-Scholes pricing model.





NOTE
12 – STOCK-BASED COMPENSATION PLANS AND AWARDS



The
Company’s 2012 Long Term Incentive Plan (the “2012 Plan”) provides for the issuance of stock options, restricted
stock units and other stock-based awards to members of management and key employees. The 2012 Plan is administered by the compensation
committee of the Board of Directors of the Company, or in the absence of a committee, the full Board of Directors of the Company.
The Plan was enacted in July 2012, and prior to this time, no plan and consequently, no stock options or shares of restricted
stock were granted under an equity compensation plan.



Stock
Options-2012 Plan



There
were no options granted during the year ended December 31, 2018. There were 50,000 options granted during the year ended December
31, 2017 whose fair value was deemed insignificant. For years ended December 31, 2018 and 2017, the Company recorded stock-based
compensation expense (included in selling, general and administrative expense) of $22,665 and $63,170, respectively, related
to stock options that vested. As of December 31, 2018, 195,000 options are vested.



Valuation
of Awards



The
per-share fair value of each stock option granted during the year ended December 31, 2017 was determined on the date of grant
using the Black-Scholes option pricing model using the following assumptions:



|                             |  | 2017 |       
|---------------------------- |  | ---- | ------
|Expected
    life (in years) |  |      | 7.00  
|Risk-free
    interest rate  |  |      | 0.05  
|Expected
    volatility      |  |      | 306.83
|Expected
    dividend yield  |  |      | 0     





F-22









A
summary of stock option activity for the years ended December 31, 2018 and 2017 is as follows:



|                                        |  | Outstanding       |            |   | Weighted-Average   |   |      | Aggregate               | 
|--------------------------------------- |  | ----------------- | ---------- | - | ------------------ | - | ---- | ----------------------- | 
|                                        |  | Stock
    Options |            |   | Exercise
    Price |   |      | Intrinsic
    Value (1) | 
|Balance
    as of December 31, 2016     |  |                   | 4,390,000  |   |                    |   | 1.12 |                         | 
|Issued                                  |  |                   | 50,000     |   |                    |   | .05  |                         | 
|Expired/Forfeited                       |  |                   | (2,060,000 | ) |                    |   | .38  |                         | 
|Balance
    as of December 31, 2017     |  |                   | 2,380,000  |   |                    | $ | 0.42 |                         | 
|Expired/Forfeited                       |  |                   | (2,160,000 | ) |                    |   | 0.38 |                         | 
|                                        |  |                   |            |   |                    |   |      |                         | 
|Balance
    as of December 31, 2018     |  |                   | 220,000    |   |                    |   | 0.41 |                         | 
|Exercisable
    as of December 31, 2018 |  |                   | 195,000    |   |                    | $ | 0.46 |                         | 



|(1) | Amounts
    represent the difference between the exercise price and the fair value of common stock at period end for all in the money
    options outstanding based on the fair value per share of common stock.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------







F-23









Stock
Options-2016 Plan





On October 25, 2016, the Board awarded
Rahoul S Banerjea, the former chief financial officer 2,250,000 options to purchase shares of common stock at $0.17 per share.
This grant was independent of the Company’s 2012 long term incentive plan. The purpose of this award was to further incentivize
Mr. Banerjea and promote the interests of the Company, its subsidiaries and its stockholders by enabling the Company and its subsidiaries
to attract, retain and motivate executive employees of the Company and/or its subsidiaries, and to align the interests of those
individuals and the Company’s stockholders. At December 31, 2017, all 2,250,000 were vested and an expense of $90,000 was
recognized. As of April 18, 2018 Rahoul S Banerjea, CFO, resigned and forfeited his vested options 90 days after that date.



A
summary of stock option activity for the years ended December 31, 2018 and 2017 is as follows:





|                                    |  | Outstanding       |            |   | Weighted-Average   |   |     | Aggregate               | 
|----------------------------------- |  | ----------------- | ---------- | - | ------------------ | - | --- | ----------------------- | 
|                                    |  | Stock
    Options |            |   | Exercise
    Price |   |     | Intrinsic
    Value (1) | 
|Balance
    as of December 31, 2016 |  |                   | 2,250,000  |   |                    |   | .17 |                         | 
|Expired/Forfeited                   |  |                   | -          |   |                    |   |     |                         | 
|Balance
    as of December 31, 2017 |  |                   | 2,250,000  |   |                    | $ | .17 |                         | 
|Expired/Forfeited                   |  |                   | (2,250,000 | ) |                    | $ | .17 |                         | 
|Balance
    as of December 31, 2018 |  |                   | -          |   |                    |   |     |                         | 



NOTE
13 – RETIREMENT PLAN



The
Company adopted a defined contribution benefit plan (the “Defined Contribution Plan”) for our U.S. employees which
complies with section 401(k) of the Internal Revenue Code. The Company does not currently match any of the employee contributions.
Employees are not required to make contributions into the fund. For the years ended December 31, 2018 and 2017, $8,357 and $31,051
respectively were contributed by employees. Total administrative expense under this plan was $3,039, and $3,055 for the years
ended December 31, 2018, and 2017 respectively.



NOTE
14 – RELATED PARTY TRANSACTIONS AND BALANCES





As of December 31, 2018 and 2017, Richard
Heddle, CEO is due $1,200,000 and $960,000 in accrued payroll, respectively, which is included in Accrued
Expenses on the Balance Sheets.



At December 31, 2018 and 2017, the company’s
accounts payable and accrued expenses included $132,217 outstanding balance due to Heddle Marine Services, a business controlled
by Mr. Richard Heddle, the company’s Chief Executive Officer and member of the Company’s board of directors. The amounts
payable arose from payments made in 2014 by Heddle Marine on behalf of the Company to a logistics company to transport fuel from
the Niagara Falls site to the blending tanks at our facility in Thorold, Ontario, as well as for labor and material provided by
Heddle Marine towards upkeep of our Canadian facilities including 2015 cleanup costs incurred in order to terminate the lease with
Avondale properties on the discontinued (RRON) Operation.



See also Note 7 for secured promissory notes with related parties.







Plastic2Oil
Marine, Inc., one of the Company’s subsidiaries, which is currently not operating, entered into a consulting service contract
in 2010 with a company owned by Mr. Heddle, who later (in 2014) became the Company’s Chief Executive Officer. The contract
provides the related company with a share of the operating income earned from Plastic2Oil technology installed on marine vessels
which are owned by the related company. The contract provides a minimum future payment equal to fifty percent of the operating
income generated from the operations of two of the most profitable marine vessel processors and 10% from all other marine vessel
processors. As of December 31, 2018 and December 31, 2017, there were no currently installed marine vessel processors pursuant
to the contract.





F-24









NOTE
15 – RISK MANAGEMENT



Concentration
of Credit Risk



The
Company maintains cash balances, at times, with financial institutions in excess of amounts insured by the Canada Deposit Insurance
Corporation and the U.S. Federal Deposit Insurance Corporation. Management monitors the soundness of these institutions and has
not experienced any collection losses with these financial institutions.



During
the years ended December 31, 2018 and 2017 two suppliers accounted for 34.3% of accounts payable.



Contingencies



As
of December 31, 2018, the Company is involved in litigation and claims which arise from time to time in the normal course of business.
In the opinion of management, based upon the information and facts known to them, any liability that may arise from such contingencies
would not have a material adverse effect on the consolidated financial statements of the Company.



NOTE
16 – SUBSEQUENT EVENTS



None.



F-25









ITEM
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE



Not
applicable.



ITEM
9A. CONTROLS AND PROCEDURES



Evaluation
of disclosure controls and procedures



Under
the supervision and with the participation of our management, including our principal executive officer and principal financial
officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and
Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of December
31, 2018. Based on this evaluation, our principal executive officer and principal financial officer concluded that as of December
31, 2018 our disclosure controls and procedures were ineffective to ensure that information required to be disclosed by us in
the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods
specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s
management, including the Company’s CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.



The
company does not maintain separately designated audit, compensation, nominating and corporate governance committees.



28







MANAGEMENT’S
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING



Management
of the Company is responsible for establishing and maintaining effective internal control over our financial reporting as defined
in Rule 13a-15(f) under the Exchange Act. The Company’s internal control over financial reporting is intended to be designed
to provide reasonable assurance to the Company’s management and Board of Directors regarding the preparation and fair presentation
of published financial statements in accordance with United States generally accepted accounting principles (U.S. GAAP), including
those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the Company, (ii) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP and that receipts and expenditures
are being made only in accordance with authorizations of management and directors of the Company, and (iii) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets
that could have a material effect on our financial statements. Management conducted an evaluation of the effectiveness of our
internal control over financial reporting based on the framework in Internal Control- Integrated Framework issued by the Committee
of Sponsoring Organizations of the Treadway Commission. Management’s assessment included an evaluation of the design of
our internal control over financial reporting and testing of the operational effectiveness of our internal control over financial
reporting as of December 31, 2018. Based on this assessment, management, including our principal executive officer and our principal
financial officer, concluded that the Company’s internal controls over financial reporting were ineffective as of December
31, 2018.



Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even
those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation
and presentation. Management’s report was not subject to attestation by our registered public accounting firm.



Management’s
Discussion of Material Weakness



A
material weakness is a significant deficiency in internal controls that results in more than a remote likelihood that a material
misstatement of the financial statements may occur as a result of the deficiency and is important enough to merit attention by
those responsible for oversight of a company’s financial reporting. The Company’s material weaknesses are a result
of a lack of policies and procedures, with the associated internal controls, to appropriately address entity level matters. Management
concluded that the lack of adherence to the Board of Directors’ policies and more specifically, the Audit Committee Charter,
which requires a three member committee with one member qualified as a “financial expert”, caused a failure at the
entity level for proper governance over the Company’s financial reporting environment. Additionally, the company does not
have a control in place to identify and communicate related party transactions to those charged with financial reporting.



Management
acknowledges its responsibility for internal controls over financial reporting and seeks to continually improve these controls.
In order to achieve compliance with Section 404 of the Sarbanes Oxley Act (“Section 404”), we are performing the system
and process documentation and evaluation needed to comply with Section 404, which is both costly and challenging. We believe our
process for documenting, evaluating and monitoring our internal control over financial reporting is consistent with the objectives
of Section 404.



Changes
in Internal Controls over Financial



There
have been no changes in our internal controls during the year ended December 31, 2018.



ITEM
9B. OTHER INFORMATION



None.



29







PART
III



ITEM
10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE



The
following table sets forth, as of, the names and ages of all of our directors and executive officers and all positions and offices
held by such individuals. Each director will hold such office until the next annual meeting of shareholders and until his or her
successor has been elected and qualified.



|Name               |  | Age |  | Position                       
|------------------ |  | --- |  | -------------------------------
|                   |  |     |  |                                
|Rick
    W. Heddle |  | 53  |  | President,
    CEO and Director
|                   |  |     |  |                                
|Jason
    C. Aspin |  | 52  |  | Director                       
|                   |  |     |  |                                
|Lee
    C. Brain   |  | 51  |  | Director                       



Certain
Biographical Information



The
following summarizes the occupation and business experience of our officers and directors:



Richard
W. Heddle has served as a director and as the President and Chief Executive Officer of our company since August 14, 2013.
Mr. Heddle is an entrepreneur with over 25 years of executive business experience. Since 1987, Mr. Heddle has been the owner and
President of Heddle Marine Services, Inc., the largest marine repair firm that operates floating dry docks on the Canadian side
of the Great Lakes. Mr. Heddle grew the company from a small start-up with two employees to a company that employs over 60 people.
Mr. Heddle has significant expertise in logistics, supply chain analytics and managing production and brings over 25 years of
comprehensive experience in fabrication, engineering and machinery. This experience and these qualifications led the Board to
conclude that Mr. Heddle should serve as a director of our company.



Jason
C. Aspin has served as a director of our company since October 12, 2017. He is the Chief Executive Officer and Chief Technology
Officer of Aspin Kemp & Associates (AKA), a Canadian technology company providing innovation and solutions to marine and land
based power, energy and power to process applications. Mr. Aspin cofounded AKA in 1996 and has served on AKA’s board of
directors for 21 years. He is a graduate of the Canadian Coast Guard College Marine Engineering program. The Board has concluded
that Mr. Aspin is qualified to serve as a director of the Company because of his 22 years of executive business experience in
the industrial electrical, automation and mechanical industry.



Lee
C. Brain has served as a director of our company since October 12, 2017. He is the owner and operator of Hess Millwork, a
custom commercial cabinetry manufacturing business that services architectural and commercial construction firms. He founded Hess
Millwork in 1996 and currently manages and oversees sales, estimating and production management staff with a focus on logistics,
safety and quality. The Board has concluded that Mr. Brain is qualified to serve as a director of the Company due to his 27 years
of executive experience, as well as his significant experience in business strategy and decision-making



30







Family
Relationships



There
are no family relationships between any of the Company’s directors or officers.



Involvement
in Certain Legal Proceedings



Except
as set forth above, to the best of our knowledge, during the past ten years, no director or officer of the Company has been involved
in any of the following: (1) any bankruptcy petition filed by or against such person individually, or any business of which such
person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;
(2) any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and
other minor offenses); (3) being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of
any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his or her
involvement in any type of business, securities or banking activities; and (4) being found by a court of competent jurisdiction
(in a civil action), the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities
law, and the judgment has not been reversed, suspended, or vacated.



Adverse
Proceedings



There
exists no material proceeding to which any director or officer is a party adverse to the Company or has a material interest adverse
to the Company.



Section
16(a) Beneficial Ownership Reporting Compliance



Section
16 of the Exchange Act requires that reports of beneficial ownership of common shares and changes in such ownership be filed with
the SEC by Section 16 “reporting persons,” including directors, certain officers, holders of more than 10% of the
outstanding common shares and certain trusts of which reporting persons are trustees. The Company is required to disclose in this
Annual Report each reporting person whom we know to have failed to file any required reports under Section 16 on a timely basis
during the fiscal year ended December 31, 2018. To our knowledge, based solely on a review of copies of Forms 3, 4 and 5 filed
with the SEC and written representations that no other reports were required, during the fiscal year ended December 31, 2018,
our officers, directors and 10% stockholders complied with all Section 16(a) filing requirements applicable to them.



Committees
of the Board of Directors



Due
to the fact that the Company currently has just directors, one of whom is member of executive management and not independent,
the Company does not maintain separately designated audit, compensation and nominating and corporate governance committees of
the Board. Upon the appointment of additional directors, the Company intends to reconstitute such committees of the Board.



Committees
of the Board of Directors



Due
to the fact that the Company currently has just two directors, one of whom is member of executive management and not independent,
the Company does not maintain separately designated audit, compensation and nominating and corporate governance committees of
the Board. Upon the appointment of additional directors, the Company intends to reconstitute such committees of the Board.



Independence
of the Board of Directors



The
Board is currently composed of three (3) members, three of whom qualify as an independent director in accordance with the published
listing requirements of the NASDAQ Capital Market. The NASDAQ independence definition includes a series of objective tests, such
as that the director is not, and has not been for at least three years, one of our employees and that neither the director nor
any of his or her family members has engaged in various types of business dealings with us. Mr. Richard Heddle, one of the current
directors, also serves as an executive officer of the Company, and thus is not independent.



31







Code
of Ethics



We
have adopted a code of ethics that applies to all of our executive officers, directors and employees. Code of ethics codifies
the business and ethical principles that govern all aspects of our business. This document will be made available in print, free
of charge, to any shareholder requesting a copy in writing from the Company. A copy of our code of ethics was filed with the Form
10-K for the year ended December 31, 2006, filed on March 2, 2007.



ITEM
11. EXECUTIVE COMPENSATION



Summary
Compensation Table



The
following summary compensation table sets forth all compensation awarded to, earned by, or paid to our “named executive
officers” during the years ended December 31, 2018 and 2017:



Summary
Compensation Table



|Name
    and Principal Position                                         |  | Year
    Ended December 31, |      |  | Salary
                                                                                ($) |  |        | Bonus
                                                                                ($) |  |  | Stock
                                                                                Awards
                                                                                ($)
                                         (1) |  |  | Stock
                                                                                Awards
                                                                                ($)
                                         (2) |   |  | Non-Equity
                                                                                Incentive
                                         Plan
                                                                                Compensation
                                                                                ($) |  |   | Nonqualified
                                                                                Deferred
                                                                                Compensation
                                                                                Earnings
                                                                                ($) |  |  | All
                                         Other
                                                                                Compensation
                                                                                ($) |  |  | Total
                                                                                ($) |  
|----------------------------------------------------------------------- |  | --------------------------- | ---- |  | ------------------------------------------------------------------------------------------ |  | ------ | ----------------------------------------------------------------------------------------- |  |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  | ----------------------------------------------------------------------------------------- | -
|                                                                        |  |                             |      |  |                                                                                            |  |        |                                                                                           |  |  |                                                                                                                                                                                                                               |  |  |                                                                                                                                                                                                                               |   |  |                                                                                                                                                                                                                                                                                                                                     |  |   |                                                                                                                                                                                                                                                                                                                                                                                 |  |  |                                                                                                                                                                                                                                     |  |  |                                                                                           |  
|Richard
    W. Heddle President & Chief Executive Officer, Director (1) |  |                             | 2018 |  |                                                                                            |  | -      |                                                                                           |  |  | -                                                                                                                                                                                                                             |  |  |                                                                                                                                                                                                                               | - |  |                                                                                                                                                                                                                                                                                                                                     |  | - |                                                                                                                                                                                                                                                                                                                                                                                 |  |  | -                                                                                                                                                                                                                                   |  |  |                                                                                           | -
|                                                                        |  |                             | 2017 |  |                                                                                            |  | -      |                                                                                           |  |  | -                                                                                                                                                                                                                             |  |  |                                                                                                                                                                                                                               | - |  |                                                                                                                                                                                                                                                                                                                                     |  | - |                                                                                                                                                                                                                                                                                                                                                                                 |  |  | -                                                                                                                                                                                                                                   |  |  |                                                                                           | -
|                                                                        |  |                             | 2016 |  |                                                                                            |  |        |                                                                                           |  |  |                                                                                                                                                                                                                               |  |  |                                                                                                                                                                                                                               |   |  |                                                                                                                                                                                                                                                                                                                                     |  |   |                                                                                                                                                                                                                                                                                                                                                                                 |  |  |                                                                                                                                                                                                                                     |  |  |                                                                                           |  
|                                                                        |  |                             |      |  |                                                                                            |  |        |                                                                                           |  |  |                                                                                                                                                                                                                               |  |  |                                                                                                                                                                                                                               |   |  |                                                                                                                                                                                                                                                                                                                                     |  |   |                                                                                                                                                                                                                                                                                                                                                                                 |  |  |                                                                                                                                                                                                                                     |  |  |                                                                                           |  
|Rahoul
    S. Banerjea Chief Financial Officer                          |  |                             | 2018 |  |                                                                                            |  | 23,860 | (2)                                                                                       |  |  | -                                                                                                                                                                                                                             |  |  |                                                                                                                                                                                                                               | - |  |                                                                                                                                                                                                                                                                                                                                     |  | - |                                                                                                                                                                                                                                                                                                                                                                                 |  |  | -                                                                                                                                                                                                                                   |  |  |                                                                                           | -
|                                                                        |  |                             | 2017 |  |                                                                                            |  | 72,454 | (2)                                                                                       |  |  | -                                                                                                                                                                                                                             |  |  |                                                                                                                                                                                                                               | - |  |                                                                                                                                                                                                                                                                                                                                     |  | - |                                                                                                                                                                                                                                                                                                                                                                                 |  |  | -                                                                                                                                                                                                                                   |  |  |                                                                                           | -
|                                                                        |  |                             | 2016 |  |                                                                                            |  | 72,453 |                                                                                           |  |  |                                                                                                                                                                                                                               |  |  |                                                                                                                                                                                                                               |   |  |                                                                                                                                                                                                                                                                                                                                     |  |   |                                                                                                                                                                                                                                                                                                                                                                                 |  |  |                                                                                                                                                                                                                                     |  |  |                                                                                           |  



Notes:



| | (1) | Mr.
    Heddle’s employment commenced on August 14, 2013. Mr. Heddle’s elected to receive all of his annual salary compensation
    in shares of common stock which has not been paid or issued. $240,000, respectively has been accrued in each of 2018 and 2017
    for such obligation.                                                                                                                                                                                                          
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (2) | Cash
    compensation paid is noted in the above table. Mr. Banerjea’s employment commenced on March 17, 2014. Mr. Banerjea significantly
    reduced his hours starting March 2016 to redirect cash towards operating expenses. Mr. Banerjea’s elected to receive
    $50,000 of his annual salary compensation in shares of common stock which was not been paid. $21,780 and $72,600, respectively
    has been accrued in 2018 and 2017 for such obligation. No shares have been paid or issued.



32







Outstanding
Equity Awards at Fiscal Year-End





The following table provides information on
all restricted stock and stock option awards held by our named executive officers as of December 31, 2018.



OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END



|                      |  | Option
    Awards                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |  | Stock
    Awards                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 
|--------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|                      |  | Number
                                         of
                                                                                Securities
                                                                                Underlying
                                                                                Unexercised
                                                                                Options
                                         (#)
                                                                                Exercisable |   |  | Number
                                         of
                                                                                Securities
                                                                                Underlying
                                                                                Unexercised
                                                                                Options
                                         (#)
                                                                                Unexercisable | 
|Richard
    W. Heddle |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | - |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 



Option
Exercises and Stock Vested During the Fiscal Year





During the fiscal year ended December 31, 2018,
there were no awards to, no exercises of stock options by, no vesting of shares of restricted stock held by, our named executive
officers.



33







OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END



DIRECTOR
COMPENSATION



|Name                  |  | Year |      |  | Fees
                                                                                Earned
                                         or
                                                                                Paid
                                         in
                                                                                Cash
                                                                                ($) |  |   | Stock
                                                                                Awards
                                                                                ($) |  |  | Option
                                                                                Awards
                                                                                ($) |  |  | Non-Equity
                                                                                Incentive
                                         Plan
                                                                                Compensation
                                                                                (S) |       |     | Change
                                         in
                                                                                Pension
                                         Value
                                                                                and
                                                                                Nonqualified
                                                                                Deferred
                                                                                Compensation
                                                                                Earnings($) |  |   | All
                                         Other
                                                                                Compensation
                                                                                ($) |  |  | Total
                                                                                ($) | 
|--------------------- |  | ---- | ---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----- | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  | ----------------------------------------------------------------------------------------- | 
|                      |  |      |      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |   |                                                                                                                                                                                  |  |  |                                                                                                                                                                                   |  |  |                                                                                                                                                                                                                                                                                                                                     |       |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |   |                                                                                                                                                                                                                                     |  |  |                                                                                           | 
|Richard
    W. Heddle |  |      | 2018 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  | - |                                                                                                                                                                                  |  |  | -                                                                                                                                                                                 |  |  |                                                                                                                                                                                                                                                                                                                                     | -     |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  | - |                                                                                                                                                                                                                                     |  |  | -                                                                                         | 
|                      |  |      | 2017 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  | - |                                                                                                                                                                                  |  |  | -                                                                                                                                                                                 |  |  |                                                                                                                                                                                                                                                                                                                                     | -     |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  | - |                                                                                                                                                                                                                                     |  |  | -                                                                                         | 
|                      |  |      | 2016 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |   |                                                                                                                                                                                  |  |  |                                                                                                                                                                                   |  |  |                                                                                                                                                                                                                                                                                                                                     |       |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |   |                                                                                                                                                                                                                                     |  |  |                                                                                           | 
|                      |  |      |      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |   |                                                                                                                                                                                  |  |  |                                                                                                                                                                                   |  |  |                                                                                                                                                                                                                                                                                                                                     |       |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |   |                                                                                                                                                                                                                                     |  |  |                                                                                           | 
|Jason
    C. Aspin    |  |      | 2018 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  | - |                                                                                                                                                                                  |  |  | -                                                                                                                                                                                 |  |  |                                                                                                                                                                                                                                                                                                                                     | 1,250 | (1) |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  | - |                                                                                                                                                                                                                                     |  |  | -                                                                                         | 
|                      |  |      | 2017 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  | - |                                                                                                                                                                                  |  |  | -                                                                                                                                                                                 |  |  |                                                                                                                                                                                                                                                                                                                                     |       |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  | - |                                                                                                                                                                                                                                     |  |  | -                                                                                         | 
|                      |  |      | 2016 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |   |                                                                                                                                                                                  |  |  |                                                                                                                                                                                   |  |  |                                                                                                                                                                                                                                                                                                                                     |       |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |   |                                                                                                                                                                                                                                     |  |  |                                                                                           | 
|                      |  |      |      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |   |                                                                                                                                                                                  |  |  |                                                                                                                                                                                   |  |  |                                                                                                                                                                                                                                                                                                                                     |       |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |   |                                                                                                                                                                                                                                     |  |  |                                                                                           | 
|Lee
    C. Brain      |  |      | 2018 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  | - |                                                                                                                                                                                  |  |  | -                                                                                                                                                                                 |  |  |                                                                                                                                                                                                                                                                                                                                     | 1,250 | (1) |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  | - |                                                                                                                                                                                                                                     |  |  | -                                                                                         | 
|                      |  |      | 2017 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  | - |                                                                                                                                                                                  |  |  | -                                                                                                                                                                                 |  |  |                                                                                                                                                                                                                                                                                                                                     |       |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  | - |                                                                                                                                                                                                                                     |  |  | -                                                                                         | 
|                      |  |      | 2016 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |   |                                                                                                                                                                                  |  |  |                                                                                                                                                                                   |  |  |                                                                                                                                                                                                                                                                                                                                     |       |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |   |                                                                                                                                                                                                                                     |  |  |                                                                                           | 



| | (1) | Mr.
    Aspin and Mr. Brain received 25,000 option awards at $0.50 vesting over two years, upon joining the Board on October 18, 2017.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------



Narrative
Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table



Employment
Agreements, Severance and Change in Control Plans



We
currently have not entered into employment agreements with Richard W. Heddle, our President and Chief Executive Officer, and Mr.
Rahoul S. Banerjea, our Chief Financial Officer resigned in April of 2018.



2012
Long-Term Incentive Plan



On
May 23, 2012, the Board adopted the JBI, Inc. 2012 Long-Term Incentive Plan (the “Plan”). The plan was subsequently
approved by the Company’s stockholders at the Company’s 2012 annual meeting of stockholders.



The
purpose of the Plan is to further and promote the interests of the Company, its subsidiaries and its stockholders by enabling
the Company and its subsidiaries to attract, retain and motivate employees, directors and consultants or those who will become
employees, directors and of the Company and/or its subsidiaries, and to align the interests of those individuals and the Company’s
stockholders. To do this, the Plan offers performance-based incentive awards and equity-based opportunities providing employees,
directors and consultants with a proprietary interest in maximizing the growth, profitability and overall success of the Company
and/or its subsidiaries.



34







The
maximum number of shares of our common stock as to which awards may be granted under the Plan may not exceed 10,000,000 shares.
In the case of any individual participant, the maximum amount payable in respect of awards subject to performance criteria in
any calendar year may not exceed four million shares of common stock. The limits on the numbers of shares described in this paragraph
and the number of shares subject to any award under the Plan are subject to proportional adjustment as determined by the Board,
to reflect certain stock changes, such as stock dividends and stock splits (see “Recapitalization Adjustments” below).



If
any awards under the Plan expire or terminate unexercised, the shares of common stock allocable to the unexercised or terminated
portion of such award shall again be available for award under the Plan.



Administration
and Eligibility



The
administration, interpretation and operation of the Plan will be vested in the Compensation Committee of the Board if and when
one is designated, otherwise the Board itself shall administer the Plan (the Board or the Compensation Committee, if applicable,
acting in such capacity, the “Committee”). The Committee may designate persons other than members of the Committee
to carry out the day-to-day administration of the Plan. In addition, the Committee may, in its sole discretion, delegate day-to-day
ministerial administration to persons other than members of the Committee, except that the Committee shall not delegate its authority
with regard to selection for participation in the Plan and/or the granting of any awards to participants.



Employees,
directors and consultants, or those who will become employees, directors and consultants of the Company and/or its subsidiaries
are eligible to receive awards under the Plan. Awards under the Plan are granted by the Committee.



Awards
Under the Plan



Awards
under the Plan may consist of stock options, stock appreciation rights (“SARs”), restricted shares or performance
unit awards, each of which is described below. All awards are evidenced by an award agreement between the Company and the individual
participant and approved by the Committee. In the discretion of the Committee, an eligible employee, director or consultant may
receive awards from one or more of the categories described below, and more than one award may be granted to an eligible employee,
director or consultant.



Stock
Options and Stock Appreciation Rights.



A
stock option is an award that entitles a participant to purchase shares of common stock at a price fixed at the time the option
is granted. Stock options granted under the Plan may be in the form of incentive stock options (which qualify for special tax
treatment) or non-qualified stock options and may be granted alone or in addition to other awards under the Plan. Non-qualified
stock options may be granted alone or in tandem with SARs.



An
SAR entitles a participant to receive, upon exercise, an amount equal to (a) the excess of (i) the fair market value on the exercise
date of a share of common stock, over (ii) the fair market value of a share of common stock on the date the SAR was granted, multiplied
by (b) the number of shares of common stock for which the SAR has been exercised.



The
exercise price and other terms and conditions of stock options and the terms and conditions of SARs will be determined by the
Committee at the time of grant, provided, however, that the exercise price per share may not be less than 100 percent of the fair
market value of a share of common stock on the date of the grant. In addition, the term of any incentive stock options granted
under the Plan may not exceed ten years. An option or SAR grant under the Plan does not provide an optionee any rights as a stockholder
and such rights will accrue only as to shares actually purchased through the exercise of an option or the settlement of an SAR.
If stock options and SARs are granted together in tandem, the exercise of such stock option or the related SAR will result in
the cancellation of the related stock option or SAR to the extent of the number of shares in respect of which such option or SAR
has been exercised. Stock options and SARs granted under the Plan shall become exercisable at such time as designated by the Committee
at the time of grant.





In
addition, the Committee, in its sole discretion, may provide in any stock option or SAR award agreement that the recipient of
the stock option or SAR will be entitled to dividend equivalents with respect to such award. In such instance, in respect of any
such award which is outstanding on a dividend record date for common stock, the participant would be entitled to an amount equal
to the amount of cash or stock dividends that would have paid on the shares of common stock covered by such stock option or SAR
award had such shares of common stock been outstanding on the dividend record date.





35







Restricted
Share Awards.



Restricted
share awards are grants of common stock made to a participant subject to conditions established by the Committee in the relevant
award agreement on the date of grant. The restricted shares only become unrestricted in accordance with the conditions and vesting
schedule, if any, provided in the relevant award agreement. A participant may not sell or otherwise dispose of restricted shares
until the conditions imposed by the Committee with respect to such shares have been satisfied. Restricted share awards under the
Plan may be granted alone or in addition to any other awards under the Plan. Restricted shares which vest will be reissued as
unrestricted shares of common stock. Each participant who receives a grant of restricted shares will have the right to receive
all dividends and vote or execute proxies for such shares. Any stock dividends granted with respect to such restricted shares
will be treated as additional restricted shares.



Performance
Units.



Performance
units (with each unit representing a monetary amount designated in advance by the Committee) are awards which may be granted to
participants alone or in addition to any other awards under the Plan. Participants receiving performance unit grants will only
earn such units if the Company and/or the participant achieve certain performance goals during a designated performance period.
The Committee will establish such performance goals and may use measures such as total stockholder return, return on equity, net
earnings growth, sales or revenue growth, comparison to peer companies, individual or aggregate participant performance or such
other measures the Committee deems appropriate. The participant may forfeit such units in the event the performance goals are
not met. If all or a portion of a performance unit is earned, payment of the designated value thereof will be made in cash, in
unrestricted common stock or in restricted shares or in any combination thereof, as provided in the relevant award agreement.



Recapitalization
Adjustments.



In
the event that the Board determines that any dividend or other distribution (whether in the form of cash, common stock, other
securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up,
spin-off, combination, repurchase, or exchange of common stock or other securities of the Company, or other corporate transaction
or event affects the common stock such that an adjustment is determined by the Board, in its sole discretion, to be necessary
or appropriate in order to prevent dilution or enlargement of benefits or potential benefits intended to be made available under
the Plan, the Board may, in any manner that it in good faith deems equitable, adjust any or all of (i) the number of shares of
common stock or other securities of the Company (or number and kind of other securities or property) with respect to which awards
may be granted, (ii) the number of shares of common stock or other securities of the Company (or number and kind of other securities
or property) subject to outstanding awards, and (iii) the exercise price with respect to any stock option, or make provision for
an immediate cash payment to the holder of an outstanding award in consideration for the cancellation of such award.



Mergers.



If
the Company enters into or is involved in any merger, reorganization, recapitalization, sale of all or substantially all of the
Company’s assets, liquidation, or business combination with any person or entity (a “Merger Event”), the Board
may, prior to such Merger Event and effective upon such Merger Event, take any action that it deems appropriate, including, replacing
such stock options with substitute stock options and/or SARs in respect of the shares, other securities or other property of the
surviving corporation or any affiliate of the surviving corporation on such terms and conditions, as to the number of shares,
pricing and otherwise, which shall substantially preserve the value, rights and benefits of any affected stock options or SARs
granted hereunder as of the date of the consummation of the Merger Event. If any Merger Event occurs, the Company has the right,
but not the obligation, to cancel each participant’s stock options and/or SARs and to pay to each affected participant in
connection with the cancellation of such stock options and/or SARs, an amount equal to the excess of the fair market value, as
determined by the Board, of the common stock underlying any unexercised stock options or SARs (whether then exercisable or not)
over the aggregate exercise price of such unexercised stock options and/or SARs. Upon receipt by any affected participant of any
such substitute stock options, SARs (or payment) as a result of any such Merger Event, such participant’s affected stock
options and/or SARs for which such substitute options and/or SARs (or payment) were received shall be thereupon cancelled without
the need for obtaining the consent of any such affected participant.



36







Amendment,
Suspension or Termination of the Plan



Unless
earlier terminated by the Board, the Plan will terminate on May 23, 2022. The Board may amend, suspend or terminate the Plan (or
any portion thereof) at any time. However, no amendment may (a) materially adversely affect the rights of any participant under
any outstanding award, without the consent of such participant, or (b) make any change that would disqualify the Plan from the
benefits provided under Sections 422 and 162(m) of the Internal Revenue Code of 1986 (the “Code”), or (c) increase
the number of shares available for awards under the Plan without stockholder approval; provided , however , that the Board and/or
Committee may amend the Plan, without the consent of any participants, in any way it deems appropriate to satisfy Code Section
409A and any regulations or other authority promulgated thereunder, including any amendment to the Plan to cause certain awards
not to be subject to Code Section 409A.



2016
Incentive Plan (Rahoul S Banerjea)



On
October 25, 2016, the Board awarded Rahoul S Banerjea, the chief financial officer 2,250,000 options to purchase shares of common
stock at $0.17 per share. This grant was independent of the Company’s 2012 long term incentive plan. The purpose of this
award was to further incentivize Mr. Banerjea and promote the interests of the Company, its subsidiaries and its stockholders
by enabling the Company and its subsidiaries to attract, retain and motivate executive employees of the Company and/or its subsidiaries,
and to align the interests of those individuals and the Company’s stockholders. At December 31, 2017, all 2,250,000 were
vested and an expense of $90,000 was recognized. As of April 18, 2018 Rahoul S Banerjea, CFO, resigned and forfeited his vested
options 90 days after that date.



ITEM
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS



Our
authorized capital stock consists of 250,000,000 shares of Common Stock. As of May 31, 2019, we had outstanding 124,756,158 common
stock outstanding.



The
following table sets forth certain information regarding the beneficial ownership of our Common Stock as of May 31, 2019 by:



| | ● | each
    person known by us to be a beneficial owner of more than 5% of our outstanding Common Stock;
| | - | -----------------------------------------------------------------------------------------------------
| |   |                                                                                                      
| | ● | each
    of our directors;                                                                           
| |   |                                                                                                      
| | ● | each
    of our named executive officers; and                                                        
| |   |                                                                                                      
| | ● | all
    directors and executive officers as a group.                                                 



37







In
the table below, as of May 31, 2019, the percentage of ownership of our Common Stock is based on 124,756,158 shares of outstanding
Common Stock, 1,600,000 outstanding warrants and 220,000 outstanding stock option. Unless otherwise noted below,
the address of the persons listed on the table is c/o Plastic2Oil, Inc., 20 Iroquois Street, Niagara Falls, New York 14303.



|                                                            |  | Common
    Stock Beneficially Owned |           
|----------------------------------------------------------- |  | ----------------------------------- | ----------
|Name
    of Beneficial Owner                                |  | Number                              |           
|Executive
    Officers and Directors                        |  |                                     |           
|                                                            |  |                                     |           
|Richard
    W. Heddle, Chief Executive Officer and Director |  |                                     | 7,000,000 
|                                                            |  |                                     |           
|Jason
    C. Aspin, Director                                |  |                                     | 805,000   
|                                                            |  |                                     |           
|Lee
    C. Brain, Director                                  |  |                                     | 1,152,567 
|                                                            |  |                                     |           
|All
    named executive officers and directors as a group   |  |                                     | 13,207,567
|                                                            |  |                                     |           
|5%
    or More Stockholders                                 |  |                                     | -         



| | (1) | Includes warrants to purchase
                                         1,000,000 shares of Common Stock.                     
| | --- | -----------------------------------------------------------------------------------------------------------------------------
| | (2) | Includes
    warrants to purchase 500,000 shares of Common Stock and option awards to purchase 25,000 shares of common stock.
| | (3) | Includes
    option awards to purchase 25,000 shares of Common Stock.                                                        





| | Common
    Stock Beneficially Owned | 
| | ----------------------------------- | 





The
amounts and percentages of Common Stock beneficially owned are reported on the basis of regulations of the SEC governing the determination
of beneficial ownership of securities. Under the rules of the SEC, a person is deemed to be a “beneficial owner” of
a security if that person has or shares “voting power,” which includes the power to vote or to direct the voting of
such security, or “investment power,” which includes the power to dispose of or to direct the disposition of such
security. A person is also deemed to be a beneficial owner of any securities of which that person has a right to acquire beneficial
ownership within 60 days after, April 2, 2018. Under these rules, more than one person may be deemed a beneficial owner of the
same securities and a person may be deemed a beneficial owner of securities as to which he has no economic interest. Except as
indicated by footnote, to our knowledge, the persons named in the table below have sole voting and investment power with respect
to all shares of Common Stock shown as beneficially owned by them.



Changes
in Control



We
are not aware of any arrangements that may result in a change in control of the Company.



38







Securities
Authorized for Issuance under Equity Compensation Plans



The
following table sets forth certain information as of December 31, 2018 with respect to equity compensation plans under which the
Company’s common stock may be issued.



|Plan
    Name                                                        |  | Number
                                         of
                                                                                securities
                                         to be
                                                                                issued
                                         upon
                                                                                exercise
                                         of
                                                                                outstanding
                                                                                options,
                                         warrants
                                                                                and
                                         rights |         |  | Weighted
                                         average
                                                                                exercise
                                         price of
                                                                                outstanding
                                                                                options,
                                         warrants
                                                                                and
                                         rights |   |     | Number
                                         of
                                                                                securities
                                                                                remaining
                                                                                available
                                         for
                                                                                future
                                         issuance
                                                                                under
                                         equity
                                                                                compensation
                                                                                plans | 
|-------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | 
|Equity
    Compensation Plans                                        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 
|                                                                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 
|JBI,
    Inc. 2012 Long-Term Incentive Plan Approved by Stockholders |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 220,000 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | $ | .12 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 



ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE



Review,
Approval or Ratification of Transactions with Related Persons



The
Board is responsible for the review, approval or ratification of all “transactions with related persons” as that term
refers to transactions required to be disclosed by Item 404 of Regulation S-K promulgated by the SEC. In reviewing a proposed
transaction, the Board must (i) satisfy itself that it has been fully informed as to the related party’s relationship and
interest and as to the material facts of the proposed transaction and (ii) consider all of the relevant facts and circumstances
available to the Board. After its review, the Board will only approve or ratify transactions that are fair to the Company and
not inconsistent with the best interests of the Company and its stockholders.



ITEM
14. PRINCIPAL ACCOUNTANT FEES AND SERVICES



As
outlined in the table below, we incurred the following fees for the fiscal years ended December 31, 2018 and 2017, respectively,
for professional services rendered by D. Brooks and Associates CPA’s, P.A., for the audit of the Company’s annual
financial statements and for audit-related services, tax services and all other services, as applicable.



|Service
    Provided                                   |  | Fiscal
    2018 |        |     | Fiscal
    2017 |  
|------------------------------------------------------ |  | --------------- | ------ | --- | --------------- | -
|                                                       |  |                 |        |     |                 |  
|Audit
    Fees                                         |  |                 |        |     |                 |  
|Annual
    Audit – D. Brooks and Associates CPA’s, P.A |  | $               | 30,000 | (1) |                 | $
|                                                       |  |                 |        |     |                 |  
|Tax
    Fees                                           |  |                 | -      |     |                 |  
|                                                       |  |                 |        |     |                 |  
|All
    Other Fees                                     |  |                 | -      |     |                 |  
|                                                       |  |                 |        |     |                 |  
|Total
    Fees                                         |  | $               | 30,000 |     |                 | $



|(1) | Includes
    the interim Quarterly Reviews reported on Form 10-Q and annual Audit reported on Form 10-K.
|--- | --------------------------------------------------------------------------------------------------------



The
Company has policies and procedures that require the pre-approval of the Board of all fees paid to, and all services performed
by, the Company’s independent registered public accounting firm. At the beginning of each year, the Board approves the proposed
services, including the nature, type and scope of services contemplated and the related fees, to be rendered by these firms during
the year. In addition, pre-approval of the Board is also required for those engagements that may arise during the course of the
year that are outside the scope of the initial services and fees initially pre-approved by the Board.



PART
IV



ITEM
15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES



The
exhibits required by this item are listed on the Exhibit Index attached hereto.



39







Signatures



Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report
has been signed on its behalf by the undersigned, thereunto duly authorized on this 3rd day of June 2019.



|      | PLASTIC2OIL,
    INC.
|----- | ---------------------
|      |                      
|Date: | By:                  
|      | Name:                
|      | Title:               



Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf
of the registrant and in the capacities and on the dates indicated.



|Signature              |  | Title                                                                                                                        |  | Date     
|---------------------- |  | ---------------------------------------------------------------------------------------------------------------------------- |  | ---------
|                       |  |                                                                                                                              |  |          
|/s/
    Richard Heddle |  | President,
    Chief Executive Officer                                                                                       |  | 3-June-19
|Richard
    Heddle     |  | (Principal
    Executive Officer, Principal Accounting Officer and Financial Officer) and Chairman of the Board of Directors |  |          
|                       |  |                                                                                                                              |  |          
|/s/
    Jason C. Aspin |  | Director                                                                                                                     |  | 3-June-19
|Jason
    C. Aspin     |  |                                                                                                                              |  |          
|                       |  |                                                                                                                              |  |          
|/s/
    Lee C. Brain   |  | Director                                                                                                                     |  | 3-June-19
|Lee
    C. Brain       |  |                                                                                                                              |  |          



40









EXHIBIT
INDEX.



|Exhibit
    No. |  | Description                                                                                                                                                                                                                                        
|--------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                |  |                                                                                                                                                                                                                                                    
|2.1             |  | Asset Purchase Agreement, dated February 10, 2012, by and between the Company. and Big 3 Packaging LLC (Incorporated herein by reference to Exhibit 2.1 to our Current Report on Form 8-K filed on February 16, 2012).                             
|                |  |                                                                                                                                                                                                                                                    
|3.1             |  | Articles of Incorporation of the Company. (Incorporated by reference to Exhibit 3(a) to our Registration Statement on Form SB-2 filed on December 11, 2006).                                                                                       
|                |  |                                                                                                                                                                                                                                                    
|3.2             |  | Certificate of Amendment to Articles of Incorporation of the Company. dated January 10, 2007 (Incorporated herein by reference to Exhibit 3.1 to our Quarterly Report on Form 10-Q filed on August 9, 2012).                                       
|                |  |                                                                                                                                                                                                                                                    
|3.2             |  | Certificate of Amendment to Articles of Incorporation of the Company. dated October 5, 2009 (Incorporated herein by reference to Exhibit 3.1 to our Current Report on Form 8-K filed on October 6, 2009).                                          
|                |  |                                                                                                                                                                                                                                                    
|3.4             |  | Certificate of Amendment to Articles of Incorporation of the Company dated December 11, 2009 (Incorporated herein by reference to Exhibit 3.2 to our Quarterly Report on Form 10-Q filed on August 9, 2012).                                       
|                |  |                                                                                                                                                                                                                                                    
|3.5             |  | Certificate of Amendment to Articles of Incorporation of the Company dated May 11, 2012 (Incorporated herein by reference to Exhibit 3.5 to our Quarterly Report on Form 10-Q filed on August 9, 2012).                                            
|                |  |                                                                                                                                                                                                                                                    
|3.6             |  | Amended and Restated Bylaws of the Company (Incorporated herein by reference to Exhibit 3.2 to our Current Report on Form 8-K filed on December 31, 2012).                                                                                         
|                |  |                                                                                                                                                                                                                                                    
|3.7             |  | Certificate of Designation of Series A Super Voting Preferred Stock of the Company dated December 1, 2009 (Incorporated herein by reference to Exhibit 3.3 to our Quarterly Report on Form 10-Q filed on August 9, 2012).                          
|                |  |                                                                                                                                                                                                                                                    
|3.8             |  | Amendment to Certificate of Designation of Series A Super Voting Preferred Stock of the Company dated May 10, 2012 (Incorporated herein by reference to Exhibit 3.4 to our Quarterly Report on 10-Q filed on August 9, 2012).                      
|                |  |                                                                                                                                                                                                                                                    
|3.9             |  | Certificate of Correction to Certificate of Designation of Series A Super Preferred Voting Stock of the Company dated May 14, 2012 (Incorporated herein by reference to Exhibit 3.6 to our Quarterly Report on Form 10-Q filed on August 9, 2012). 
|                |  |                                                                                                                                                                                                                                                    
|3.10            |  | Certificate of Designation of Series B Convertible Preferred Stock of the Company dated December 24, 2012 (Incorporated herein by reference to Exhibit 3.1 to our Current Report on Form 8-K filed on December 31, 2012).                          
|                |  |                                                                                                                                                                                                                                                    
|3.11            |  | Certificate of Amendment to Certificate of Designation of Series B Convertible Preferred Stock of the Company dated January 11, 2013 (Incorporated herein by reference to Exhibit 3.1 to our Current Report on Form 8-K filed on January 17, 2013).
|                |  |                                                                                                                                                                                                                                                    
|3.12            |  | Certificate of Withdrawal of Certificate of Designation of Series A Super Voting Preferred Stock of the Company dated June 3, 2014. (Incorporated herein by reference to our Annual Report on Form 10-K filed on June 4, 2014).                    
|                |  |                                                                                                                                                                                                                                                    
|3.13            |  | Certificate of Amendment to Articles of Incorporation of the Company dated June 24, 2014 (Incorporated by reference to our Current Report on Form 8-K filed on June 26, 2014).                                                                     
|                |  |                                                                                                                                                                                                                                                    
|3.14            |  | Certificate of Withdrawal of Certificate of Designation Series B Convertible Preferred Stock of the Company dated July 29, 2014 (Incorporated herein by reference to Exhibit 3.2 to our Quarterly Report filed on July 31, 2014)                   



41







|10.1  |  | Form of Subscription Agreement (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on January 6, 2012).                                                                                 
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |  |                                                                                                                                                                                                                               
|10.2  |  | Promissory Note, dated February 14, 2012, by Big 3 Packaging LLC in favor of the Company (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on February 16, 2012).                     
|      |  |                                                                                                                                                                                                                               
|10.3  |  | Lease, dated December 1, 2011, between the Company and Avondale Stores Limited. (Incorporated herein by reference to Exhibit 10.5 to our Annual Report on Form 10-K, filed on March 19, 2012)                                 
|      |  |                                                                                                                                                                                                                               
|10.4  |  | Form of Warrant (Incorporated herein by reference to Exhibit 4.1 to our Current Report on Form 8-K filed on January 6, 2012).                                                                                                 
|      |  |                                                                                                                                                                                                                               
|10.5  |  | Form of Subscription Agreement (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on May 17, 2012).                                                                                    
|      |  |                                                                                                                                                                                                                               
|10.6  |  | 2012 Long-Term Incentive Plan of the Company dated as of May 23, 2012 (Incorporated herein by reference to Appendix A of our Definitive Proxy Statement on Schedule 14A filed on June 20, 2012).                              
|      |  |                                                                                                                                                                                                                               
|10.7  |  | Form of Incentive Stock Option Agreement pursuant to the 2012 Long-Term Incentive Plan of the Company (Incorporated herein by reference to Exhibit 10.4 to our Current Report on Form 8-K filed on October 19, 2012)          
|      |  |                                                                                                                                                                                                                               
|10.8  |  | Form of Subscription Agreement (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on December 31, 2012).                                                                               
|      |  |                                                                                                                                                                                                                               
|10.9  |  | Stipulation Agreement, dated August 8, 2013, between the Company, and certain settling parties signatory thereto (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on August 9, 2013).
|      |  |                                                                                                                                                                                                                               
|10.10 |  | Subscription Agreement, dated August 29, 2013, between the Company and Richard Heddle (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on August 30, 2013).                          



42









|10.11 |  | Secured Promissory Note, dated August 29, 2013, issued by the Company in favor of Richard Heddle (Incorporated herein by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on August 30, 2013).                                                                        
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |  |                                                                                                                                                                                                                                                                                        
|10.12 |  | Warrant, dated August 29, 2013, issued by the Company in favor of Richard Heddle (Incorporated herein by reference to Exhibit 10.3 to our Current Report on Form 8-K filed on August 30, 2013).                                                                                        
|      |  |                                                                                                                                                                                                                                                                                        
|10.13 |  | Security Agreement, dated August 29, 2013, between the Company, Plastic2Oil of NY #1, LLC, JBI RE #1, Inc., Christiana Trust and Richard Heddle (Incorporated herein by reference to Exhibit 10.4 to our Current Report on Form 8-K filed on August 30, 2013).                         
|      |  |                                                                                                                                                                                                                                                                                        
|10.14 |  | Form of Subscription Agreement (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on February 24, 2014).                                                                                                                                        
|      |  |                                                                                                                                                                                                                                                                                        
|10.15 |  | Form of Warrant (Incorporated herein by reference to Exhibit 4.1 to our Current Report on Form 8-K filed on February 24, 2014).                                                                                                                                                        
|      |  |                                                                                                                                                                                                                                                                                        
|10.16 |  | Joint
    Venture and Services Agreement between the Company and RWH Marine Consulting dated February 12, 2010. (Incorporated herein
    by reference to Exhibit 10.26 to our Annual Report on Form 10-K filed on June 24, 2014).                                                      
|      |  |                                                                                                                                                                                                                                                                                        
|10.17 |  | Unsecured Demand Promissory Note dated August 13, 2014 in favor of Richard Heddle (Incorporated herein by reference to Exhibit 10.1 to our Quarterly Report filed on August 14, 2014).                                                                                                 
|      |  |                                                                                                                                                                                                                                                                                        
|10.18 |  | Subscription Agreement dated November 19, 2014 in favor of Heddle Marine Inc. (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on November 20, 2014).                                                                                         
|      |  |                                                                                                                                                                                                                                                                                        
|10.19 |  | 12% Secured Promissory Note dated November 19, 2014 in favor of Heddle Marine Inc. (Incorporated herein by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on November 20, 2014).                                                                                    
|      |  |                                                                                                                                                                                                                                                                                        
|10.20 |  | Warrant dated November 19, 2014 in favor of Heddle Marine Inc. (Incorporated herein by reference to Exhibit 10.3 to our Current Report on Form 8-K filed on November 20, 2014).                                                                                                        
|      |  |                                                                                                                                                                                                                                                                                        
|10.21 |  | Equipment Supply Contract, dated January 4, 2015, by and between Plastic2Oil, Inc. and EcoNavigation, LLC. (Incorporated herein by reference to Exhibit 10.21 to our Current Report on Form 10-K filed on March 31, 2015).                                                             
|      |  |                                                                                                                                                                                                                                                                                        
|10.22 |  | Technology License and Referral Agreement, dated January 4, 2015, by and between Plastic2Oil, Inc. and EcoNavigation, LLC. (Incorporated herein by reference to Exhibit 10.22 to our Current Report on Form 10-K filed on March 31, 2015).                                             
|      |  |                                                                                                                                                                                                                                                                                        
|10.23 |  | Catalyst Supply Agreement, dated April 4, 2015, by and between Plastic2Oil, Inc. and EcoNavigation, LLC. (Incorporated herein by reference to Exhibit 10.23 to our Current Report on Form 10-K filed on March 31, 2015).                                                               
|      |  |                                                                                                                                                                                                                                                                                        
|10.24 |  | Monitoring, Maintenance, Repair and Upgrade Agreement, dated April 4, 2015, by and between Plastic2Oil, Inc. and EcoNavigation, LLC. (Incorporated herein by reference to Exhibit 10.24 to our Current Report on Form10-K filed on March 31, 2015).                                    
|      |  |                                                                                                                                                                                                                                                                                        
|10.25 |  | Promissory Note dated February 11, 2015 between Mr. Richard Heddle and Plastic2Oil, Inc. to be used for working capital purposes (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on February 18, 2016).                                      
|      |  |                                                                                                                                                                                                                                                                                        
|10.26 |  | Surrender of Lease dated January 15, 2016 between Avondale Stores Limited Properties and JBI (Canada), Inc. related to the 1786 Allanport Road, Thorold, Ontario dated (Incorporated herein by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on February 18, 2016).



43







|10.27 |  | Equipment Supply Agreement Amendment, dated May 1, 2015, by and between the Company and EcoNavigation LLC. (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on May 5, 2015).                                                                                      
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |  |                                                                                                                                                                                                                                                                                                            
|10.28 |  | Catalyst Supply Agreement Amendment, dated May 1, 2015, by and between the Company and EcoNavigation LLC. (Incorporated herein by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on May 5, 2015).                                                                                       
|      |  |                                                                                                                                                                                                                                                                                                            
|10.29 |  | Technology License and Referral Agreement Amendment, dated May 1, 2015, by and between the Company and EcoNavigation LLC. (Incorporated herein by reference to Exhibit 10.3 to our Current Report on Form 8-K filed on May 5, 2015).                                                                       
|      |  |                                                                                                                                                                                                                                                                                                            
|10.30 |  | MMRU Agreement Amendment, dated May 1, 2015, by and between the Company and EcoNavigation LLC. (Incorporated herein by reference to Exhibit 10.4 to our Current Report on Form 8-K filed on May 5, 2015).                                                                                                  
|      |  |                                                                                                                                                                                                                                                                                                            
|10.31 |  | Third Amendment, dated November 6, 2015, between Plastic2Oil, Inc. and EcoNavigation, LLC Third Amendment to Sections 27.1 and 27.2 of Equipment Supply Contract. (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 10-Q filed on November 12, 2015).                        
|      |  |                                                                                                                                                                                                                                                                                                            
|10.32 |  | Third Amendment, dated November 6, 2015, between Plastic2Oil, Inc. and EcoNavigation, LLC Third Amendment to Sections 13.1 and 13.2 of Technology License and Referral Agreement. (Incorporated herein by reference to Exhibit 10.2 to our Current Report on Form 10-Q filed on November 12, 2015).        
|      |  |                                                                                                                                                                                                                                                                                                            
|10.33 |  | Third Amendment, dated November 6, 2015, between Plastic2Oil, Inc. and EcoNavigation, LLC Third Amendment to Sections 23.1 and 23.2 of Catalyst Supply Agreement. (Incorporated herein by reference to Exhibit 10.3 to our Current Report on Form 10-Q filed on November 12, 2015).                        
|      |  |                                                                                                                                                                                                                                                                                                            
|10.34 |  | Third Amendment, dated November 6, 2015, between Plastic2Oil, Inc. and EcoNavigation, LLC Third Amendment to Sections 13.13.1 and 13.13.2 of Monitoring, Maintenance, Repair and Upgrade. (Incorporated herein by reference to Exhibit 10.4 to our Current Report on Form 10-Q filed on November 12, 2015).
|      |  |                                                                                                                                                                                                                                                                                                            
|10.35 |  | Subscription
Agreement, dated August 10, 2016, between the Company and Lawrence Leahy (Incorporated herein by reference to Exhibit 10.1 to
our Current Report on Form 8-K filed on August 16, 2016).                                                                                                       
|      |  |                                                                                                                                                                                                                                                                                                            
|10.36 |  | 12% Secured Promissory Note dated August 10, 2016 on Form 8-K filed on August 10, 2016 in favor of Lawrence Leahy. (Incorporated herein by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on August 16, 2016).                                                                          
|      |  |                                                                                                                                                                                                                                                                                                            
|10.37 |  | Warrant dated August 10, 2016 in favor of Lawrence Leahey. (Incorporated herein by reference to Exhibit 10.3 to our Current Report on Form 8-K filed on August 16, 2016).                                                                                                                                  
|      |  |                                                                                                                                                                                                                                                                                                            
|10.38 |  | Amended And Restated Security Agreement dated August 10, 2016, between the Company, Plastic2Oil of NY #1, LLC, JBI RE #1, Inc., Christiana Trust and Lawrence Leahey (Incorporated herein by reference to Exhibit 10.4 to our Current Report on Form 8-K filed on August 16, 2016).                        
|      |  |                                                                                                                                                                                                                                                                                                            
|10.39 |  | Form of Incentive Stock Option Agreement pursuant to the 2012 Long-Term Incentive Plan of the Company (Incorporated herein by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on October 31, 2016)                                                                                       
|      |  |                                                                                                                                                                                                                                                                                                            
|10.40 |  | Form of Incentive Stock Option Agreement pursuant to the 2016 Executive Incentive Plan of the Company (Incorporated herein by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on October 31, 2016)                                                                                       



44







|21.1 |  | Subsidiaries
    of the Registrant.                                                                                                                               
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |  |                                                                                                                                                                   
|     |  | Plastic2Oil
    RE ONE Inc., an Ontario, Canada corporation.                                                                                                      
|     |  | Plastic2Oil
    (Canada), Inc., an Ontario Canada corporation.                                                                                                    
|     |  | Plastic2Oil
    Marine, Inc. a Nevada corporation.                                                                                                                
|     |  |                                                                                                                                                                   
|     |  | JBI
    CDE., a New York corporation                                                                                                                              
|     |  | Plastic2Oil
    of NY #1, LLC a New York corporation.                                                                                                             
|     |  | JBI
    RE #1, Inc., a New York corporation.                                                                                                                      
|     |  |                                                                                                                                                                   
|23.1 |  | Consent of D. Brooks & Associates CPA’s, P.A. (1)                                                                                                                 
|     |  |                                                                                                                                                                   
|31.1 |  | Certification
    of our Chief Executive Officer pursuant to Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934, as amended.
    (1)               
|     |  |                                                                                                                                                                   
|31.2 |  | Certification
    of our Chief Financial Officer pursuant to Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934, as amended.
    (1)               
|     |  |                                                                                                                                                                   
|32.1 |  | Certification
    of our Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
    Act of 2002. (2)



|32.2    |  | Certification
    of our Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
    Act of 2002. (2)
|------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |  |                                                                                                                                                                   
|101.INS |  | XBRL
    Instance Document. (2)                                                                                                                                   
|        |  |                                                                                                                                                                   
|101.SCH |  | XBRL
    Taxonomy Extension Schema Document. (2)                                                                                                                  
|        |  |                                                                                                                                                                   
|101.CAL |  | XBRL
    Taxonomy Extension Calculation Linkbase Document. (2)                                                                                                    
|        |  |                                                                                                                                                                   
|101.DEF |  | XBRL
    Taxonomy Extension Definition Linkbase Document. (2)                                                                                                     
|        |  |                                                                                                                                                                   
|101.LAB |  | XBRL
    Taxonomy Extension Label Linkbase Document. (2)                                                                                                          
|        |  |                                                                                                                                                                   
|101.PRE |  | XBRL
    Taxonomy Extension Presentation Linkbase Document. (2)                                                                                                   



|* | Certain
    Confidential Information contained in this Exhibit was omitted by means of redacting a portion of the text and replacing it
    with an asterisk. This Exhibit has been filed separately with the Secretary of the Securities and Exchange Commission without
    the redaction pursuant to a Confidential Treatment Request under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(1) | Filed
    herewith.    
|--- | -----------------------
|    |                        
|(2) | Furnished
    herewith.



45