SENR 10-Q

Strategic Environmental & Energy Resources, Inc. (SENR)

10-Q 2021-08-16 For: 2021-06-30

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Added on April 06, 2026

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Title of each class		Trading Symbol(s)		Name of each exchange on which registered
N/A		N/A		N/A

Large accelerated filer ☐	Accelerated filer ☐	Emerging growth company ☐

Non-accelerated filer ☐	Smaller reporting company ☒

PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements

	Condensed Consolidated Balance Sheets as of June 30, 2021 (unaudited) and December 31, 2020	3

	Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2021, and 2020 (unaudited)	4

	Condensed Consolidated Statement of Changes in Stockholders’ Deficit as of June 30, 2021, and 2020 (unaudited)	5

	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2021, and 2020 (unaudited)	6

	Notes to Unaudited Condensed Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27

Item 4.	Controls and Procedures	27

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	27

Item 1A.	Risk Factors	27

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27

Item 3.	Defaults Upon Senior Securities	27

Item 4.	Mine Safety Disclosures	28

Item 5.	Other Information	28

Item 6.	Exhibits	29

SIGNATURES		30

	June 30, 2021			December 31, 2020 *
	June 30,			December 31,
	2021			2020
		(Unaudited)			*
ASSETS
Current Assets
Cash and cash equivalents	$	181,500		$	47,300
Accounts receivable, net of allowance for doubtful accounts of $800 and $11,800, respectively		535,900			375,600
Inventory		99,000			250,200
Costs and estimated earnings in excess of billings on uncompleted contracts		-			6,800
Prepaid expenses and other current assets		223,200			110,600
Total Current Assets		1,039,600			790,500

Property and equipment, net		497,800			548,000
Intangible Assets, net		431,300			447,300
Right of use assets		326,600			380,400
Other assets		50,500			50,500

TOTAL ASSETS	$	2,345,800		$	2,216,700

LIABILITIES AND STOCKHOLDER’S DEFICIT

Current Liabilities
Accounts payable	$	816,000		$	1,109,200
Accrued liabilities		2,283,000			1,977,200
Billings in excess of costs and estimated earnings on uncompleted contracts		616,300			323,900
Deferred revenue		13,700			30,200
Payroll taxes payable		1,074,000			1,085,400
Customer deposits		16,400			16,400
Paycheck protection program liabilities		720,400			590,300
Short term notes		2,898,800			3,032,800
Short term notes and accrued interest - related party		226,100			208,100
Convertible notes		1,605,000			1,605,000
Current portion of long-term debt and capital lease obligations		524,900			523,900
Current portion of lease liabilities		48,900			78,100
Total Current Liabilities		10,843,500			10,580,500

Lease liabilities net of current portion		310,600			334,700
Long term debt and capital lease obligations, net of current portion		881,300			30,300
Total Liabilities		12,035,400			10,945,500

Commitments and contingencies		-			-

Stockholders’ deficit
Preferred stock; $.001 par value; 5,000,000 shares authorized; -0- shares issued		-			-
Common stock; $.001 par value; 70,000,000 shares authorized; 65,288,575 and 65,088,575 shares issued, issuable ** and outstanding June 30, 2020, and December 31, 2020, respectively		65,100			65,100
Common stock issuable		25,000			25,000
Additional paid-in capital		22,970,700			22,961,200
Stock Subscription receivable		(25,000	)		(25,000	)
Accumulated deficit		(30,622,900	)		(29,693,700	)
Total stockholders’ deficit		(7,587,100	)		(6,667,400	)
Non-controlling interest		(2,102,500	)		(2,061,400	)
Total Deficit		(9,689,600	)		(8,728,800	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	2,345,800		$	2,216,700

	2021			2020			2021			2020
	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2021			2020			2021			2020
Revenue:
Products	$	862,700		$	734,300		$	1,725,900		$	1,500,100
Solid waste		58,300			58,300			116,500			116,500
Total revenue		921,000			792,600			1,842,400			1,616,600

Operating expenses:
Products costs		674,200			502,100			1,342,700			1,125,600
Solid waste costs		7,400			9,700			14,800			33,300
Costs		7,400			9,700			14,800			33,300
General and administrative expenses		324,400			293,600			638,100			711,400
Salaries and related expenses		372,000			389,100			537,400			797,500
Total operating expenses		1,378,000			1,194,500			2,533,000			2,667,800

Loss from operations		(457,000	)		(401,900	)		(690,600	)		(1,051,200	)

Other income (expense):
Interest expense		(189,200	)		(200,800	)		(391,700	)		(394,800	)
Other		6,400			1,500			112,000			191,400
Total non-operating expense, net		(182,800	)		(199,300	)		(279,700	)		(203,400	)

Net loss		(639,800	)		(601,200	)		(970,300	)		(1,254,600	)

Less: Net loss attributable to non-controlling interest		(28,200	)		(38,000	)		(41,100	)		(65,300	)

Net loss attributable to SEER common stockholders	$	(611,600	)	$	(563,200	)	$	(929,200	)	$	(1,189,300	)

Net loss per share, basic and diluted	$	(0.01	)	$	(0.01	)	$	(0.01	)	$	(0.02	)

Weighted average shares outstanding – basic and diluted		65,009,454			63,773,834			64,949,348			63,241,891

	Shares		Amount		Shares		Amount		Capital		Subscribed		Receivable			Deficit			Interest			Deficit
	Preferred Stock				Common Stock				Additional Paid-in		Common Stock		Stock Subscription			Accumulated			Non-controller			Total Stockholders’
	Shares		Amount		Shares		Amount		Capital		Subscribed		Receivable			Deficit			Interest			Deficit

Balances at December 31, 2020		-	$	-		65,088,600	$	65,100	$	22,961,200	$	25,000	$	(25,000	)	$	(29,693,700	)	$	(2,061,400	)	$	(8,728,800	)

Issuance of common stock upon debt penalty		-		-		-		-		-		-		-			-			-			-

Stock-based compensation		-		-		-		-		4,700		-		-			-			-			4,700

Allocated value of common stock and warrants related to debt		-		-		-		-		-		-		-			-			-			-

Net loss		-		-		-		-		-		-		-			(317,600	)		(12,900	)		(330,500	)

Balances at March 31, 2021		-		-		65,088,600		65,100		22,965,900		25,000		(25,000	)		(30,011,300	)		(2,074,300	)		(9,054,600	)

Issuance of common stock upon debt penalty		-		-		-		-		-		-		-			-			-			-

Stock-based compensation		-		-		-		-		4,800		-		-			-			-			4,800

Net loss		-		-		-		-		-		-		-			(611,600	)		(28,200	)		(639,800	)

Balances at June 30, 2021		-		-		65,088,600		65,100		22,970,700		25,000		(25,000	)		(30,622,900	)		(2,102,500	)		(9,689,600	)

	2021			2020
	For the six months ended June 30,
	2021			2020
Cash flows from operating activities:
Net loss from continuing operations	$	(970,300	)	$	(1,254,600	)

Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		69,200			90,000
Stock-based compensation expense		9,500			9,500
Non-cash expense for interest, common stock issued for debt penalty		-			74,700
Provision for doubtful accounts receivable		(200	)		(10,800	)
Non-cash expense for interest, accretion of debt discount		28,700			31,400
Gain on disposition of assets		(81,400	)		-
Changes in operating assets and liabilities:
Accounts receivable		(160,100	)		357,200
Costs in excess of billings on uncompleted contracts		6,800			(144,500	)
Inventory		(3,500	)		(42,000	)
Prepaid expenses and other assets		(6,400	)		(56,600	)
Accounts payable, accrued liabilities, and customer deposits		30,600			59,700
Billings in excess of revenue on uncompleted contracts		292,400			(2,000	)
Deferred revenue		(16,500	)		67,700
Payroll taxes payable		(11,400	)		16,600
Net cash used in operating activities		(812,600	)		(803,700	)
Cash flows from investing activities:
Purchase of property and equipment		(3,000	)		(131,600	)
Proceeds from the sale of fixed assets		81,400			-
Net cash provided by (used) in investing activities		78,400			(131,600	)
Cash flows from financing activities:
Payments of notes and capital lease obligations		(96,700	)		(113,400	)
Payments of short-term notes - related party		(10,000	)		-
Proceeds from short-term notes - related party		10,000			-
Proceeds from short-term and long-term debt		835,000			262,200
Proceeds from paycheck protection program		130,100			590,300

Net cash provided by financing activities		868,400			739,100

Net increase (decrease) in cash		134,200			(196,200	)
Cash at the beginning of period		47,300			354,700
Cash at the end of period	$	181,500		$	158,500

Supplemental disclosures of cash flow information:
Cash paid for interest	$	26,700		$	8,300
Financing of prepaid insurance premiums	$	52,400		$	94,700
Non-cash repayment of debt	$	154,700		$	-
Non-cash payment of interest	$	22,500		$	-

	June 30, 2021		December 31, 2020
	(Unaudited)
Finished goods	$	59,000	$	158,100
Work in process		36,100		88,800
Raw materials		3,900		3,300

Inventories	$	99,000	$	250,200

	Three months ended June 30, 2021
	Environmental Solutions		Solid Waste		Total

Sources of Revenue
Product sales	$	675,100		-	$	675,100
Media sales		187,600		-		187,600
Licensing fees		-		8,300		8,300
Operating fees		-		-		-
Management fees		-		50,000		50,000
Total Revenue	$	862,700	$	58,300	$	921,000

	Three months ended June 30, 2020
	Environmental Solutions		Solid Waste		Total

Sources of Revenue
Product sales		353,000		-		353,000
Media sales		381,300		-		381,300
Licensing fees		-		8,300		8,300
Operating fees		-		-		-
Management fees		-		50,000		50,000
Total Revenue	$	734,300	$	58,300	$	792,600

	Six months ended June 30, 2021
	Environmental Solutions		Solid Waste		Total

Sources of Revenue
Product sales	$	1,283,900		-	$	1,283,900
Media sales		442,000		-		442,000
Licensing fees		-		16,500		16,500
Operating fees		-		-		-
Management fees		-		100,000		100,000
Total Revenue	$	1,725,900	$	116,500	$	1,842,400

	Six months ended June 30, 2020
	Environmental Solutions		Solid Waste		Total

Sources of Revenue
Product sales	$	977,700		-	$	977,700
Media sales		522,400		-		522,400
Licensing fees		-		16,500		16,500
Operating fees		-		-		-
Management fees		-		100,000		100,000
Total Revenue	$	1,500,100	$	116,500	$	1,616,600

							Contract Liabilities
		Accounts Receivable, net		Revenue Contract Assets			Revenue Contract Liabilities		Deferred Revenue (current)			Deferred Revenue (non-current)

Balance as of June 30, 2021 (Unaudited)	$	535,900	$	-		$	616,300	$	13,700		$	-

Balance as of December 31, 2020		375,600		6,800			323,900		30,200			-

(Decrease) increase	$	160,300	$	(6,800	)	$	292,400	$	(16,500	)	$	-

	June 30, 2021 (Unaudited)
	Gross carrying amount		Accumulated amortization			Net carrying value

Goodwill	$	277,800	$	-		$	277,800
Customer list		42,500		(42,500	)		-
Technology		1,021,900		(868,400	)		153,500
Trade name		54,900		(54,900	)		-
	$	1,397,100	$	(965,800	)	$	431,300

	Six Months Ended June 30,
	2021			2020

Cash paid for operating lease liabilities	$	72,700		$	108,200
Right-of-use assets obtained in exchange for new operating lease obligations		-			118,100
Weighted-average remaining lease term		62 months			62 months
Weighted-average discount rate		10	%		10	%

		June 30, 2021
2022	$	84,500
2023		87,000
2024		89,600
2025		92,300
2026		95,000
Thereafter		16,200
Lease liabilities		464,600
Less imputed interest		(105,300	)
Total lease liabilities		359,300
Current operating lease liabilities		48,900
Non-current operating lease liabilities		310,400
Total lease liabilities	$	359,300

	Paycheck protection program			Short term notes			Convertible notes, unsecured		Current portion of long-term debt and capital lease obligations		Long term debt and capital lease obligations			Total


Balance December 31, 2020	$	590,300		$	3,032,800		$	1,605,000	$	523,900	$	30,300(5)	(5)	$	5,782,300
Increase in borrowing		130,100	(1)		52,400	(2)		-		-		835,000	(3)		1,017,500
Principal reductions		-			(186,400	)		-		-		(11,700	) (5)		(198,100	)
Long term debt to current		-			-			-		1,000		(1,000)			-
Amortization of debt discount		-			-			-		-		28,700			28,700
Balance June 30, 2021	$	720,400		$	2,898,800(4)	(4)	$	1,605,000	$	524,900	$	881,300		$	6,630,400

	(1)	Paycheck Protection Program (“PPP”) draw #2, received the first quarter of 2021.
	(2)	Unsecured note payable insurance premium financing, interest at approximately 5.1% per annum, payable in 10 installments of $5,400, maturing on November 1, 2021.
	(3)	A) Unsecured note payable dated January 19, 2021, interest at an annual rate of 8% simple interest and matures on January 18, 2026. This note is included as part of a series of anticipated notes, all of which will be converted into common equity of Paragon Waste Services, LLC., in accordance with the note’s provisions. For the six months ended June 30, 2021, the Company recorded interest expense of $5,400. Unpaid interest at June 30, 2021 was approximately $5,400. B) Note payable dated February 2, 2021, interest at an annual rate of 8% simple interest and matures on January 18, 2026. This note is included as part of a series of anticipated notes, all of which will be converted into common equity of Paragon Waste Services, LLC., in accordance with the note’s provisions. For the six months ended June 30, 2021, the Company recorded interest expense of $16,200. Unpaid interest at June 30, 2021 was approximately $16,200. C) Note payable dated May 25, 2021, interest at an annual rate of 8% simple interest and matures on January 18, 2026. This note is included as part of a series of anticipated notes, all of which will be converted into common equity of Paragon Waste Services, LLC., in accordance with the note’s provisions. For the six months ended June 30, 2021, the Company recorded interest expense of $2,200. Unpaid interest at June 30, 2021 was approximately $2,200.
	(4)	The balance consists of $2,460,000 of secured notes, and $438,800 unsecured notes payable.
	(5)	Secured notes.

	MV, SEM, PelleChar, REGS	Environmental Solutions
	PWS	Solid Waste

Three Months Ended June 30,

2021		Environmental			Solid
		Solutions			Waste			Corporate			Total

Revenue	$	862,700		$	58,300		$	-		$	921,000
Depreciation and amortization (1)		17,100			8,500			9,000			34,600
Interest expense		9,600			-			179,600			189,200
Stock-based compensation		-			-			4,800			4,800
Net income (loss)		(102,100	)		(55,500	)		(482,200	)		(639,800	)
Capital expenditures (cash and noncash)		-			-			-			-
Total assets	$	1,395,800		$	331,800		$	618,200		$	2,345,800

31.1*		Certification of Principal Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934
31.2*		Certification of Principal Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934
32.1**		Certification of Principal Executive Officer) pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**		Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS***		XBRL Instance Document
101.SCH***		XBRL Taxonomy Extension Schema Document
101.CAL***		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF***		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB***		XBRL Taxonomy Extension Label Linkbase Document
101.PRE***		XBRL Taxonomy Extension Presentation Linkbase Document

*	Filed herewith.

**	This certification is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended or the Exchange Act.

***	Pursuant to applicable securities laws and regulations, these interactive data files will not be deemed “filed” for the purposes of Section 18 of the Securities and Exchange Act of 1934 or otherwise subject to the liability of that section, nor will they be deemed filed or made a part of a registration statement or prospectus for purposes of Sections 11 and 12 of the Securities Act of 1933, or otherwise subject to liability under those sections.

Dated: August 16, 2021	STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

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

	By	/s/ Clark Knopik
		Clark Knopik
		Interim Chief Financial Officer with responsibility to sign on behalf of Registrant as a duly authorized officer and principal financial officer