What changed in this filing

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Item 1. Financial Statements

2021-08-16 compared with 2021-05-14 · 327 added, 530 removed, 389 unchanged (69% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS

June 30, 2021

December 31, 2020

Current Assets

Cash and cash equivalents

Accounts receivable, net of allowance for doubtful accounts of $800

and $11,800, respectively

Accounts receivable, net of allowance for doubtful accounts of $ 800 and $ 11,800 , respectively

Costs and estimated earnings in excess of billings on uncompleted contracts

4 unchanged sentences

Right of use assets

LIABILITIES AND STOCKHOLDERS’

LIABILITIES AND STOCKHOLDER’S DEFICIT

Current Liabilities

12 unchanged sentences

Total Current Liabilities

Deferred revenue, non-current

Lease liabilities net of current portion

2 unchanged sentences

Commitments and contingencies

Stockholders’

Stockholders’ deficit

Preferred stock;

3 unchanged sentences

Common stock;

$.001 par value;

70,000,000 shares authorized;

65,088,575 shares issued,

issuable ** and outstanding December 31, 2020 and December 31, 2019

70,000,000 shares

65,288,575 and 65,088,575

shares issued, issuable ** and outstanding June 30, 2020, and December 31, 2020, respectively

Common stock issuable

4 unchanged sentences

( 29,693,700 )

Total stockholders’

Total stockholders’ deficit

( 7,587,100 )

( 6,667,400 )

Non-controlling interest

( 2,102,500 )

( 2,061,400 )

Total Deficit

TOTAL LIABILITIES AND STOCKHOLDERS’

( 9,689,600 )

( 8,728,800 )

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT

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

numbers were derived from the audited financial statements for the year ended December 31, 2020.

3,185,000 shares issuable as of March 31, 2021 and December 31, 2020, per terms of note agreements.

* These numbers were

derived from the audited financial statements for the year ended December 31, 2020.

issuable as of June 30, 2021, and 3,185,000 shares issuable as of December 31, 2020,

per terms of note agreements.

ENVIRONMENTAL & ENERGY RESOURCES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three Months Ended March 31,

For the Three Months Ended

For the Six Months Ended

Total revenue

6 unchanged sentences

Loss from operations

( 1,051,200 )

Other income (expense):

1 unchanged sentence

Total non-operating expense, net

( 1,254,600 )

Net loss attributable to non-controlling interest

Net loss attributable to SEER common stockholders

$ ( 611,600 )

$ ( 563,200 )

$ ( 929,200 )

$ ( 1,189,300 )

Net loss per share, basic and diluted

Weighted average shares outstanding –

basic and diluted

Weighted average shares outstanding – basic and diluted

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

ENVIRONMENTAL & ENERGY RESOURCES, INC.

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’

Stockholders’

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT

Non-controller

Stockholders’

at December 31, 2020

7 unchanged sentences

( 30,011,300 )

Preferred Stock

Stockholders’

( 2,074,300 )

( 9,054,600 )

of common stock upon debt penalty

at June 30, 2021

( 30,622,900 )

( 2,102,500 )

( 9,689,600 )

Non-controller

Stockholders’

at December 31, 2019

7 unchanged sentences

( 27,590,400 )

( 2,054,000 )

( 6,883,800 )

( 27,590,400 )

( 2,054,000 )

( 6,883,800 )

of common stock upon debt penalty

at June 30, 2020

( 28,153,600 )

( 2,092,000 )

( 7,442,200 )

( 28,153,600 )

( 2,092,000 )

( 7,442,200 )

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

1 unchanged sentence

CONSOLIDATED STATEMENT OF CASH FLOWS

For the three months ended March 31,

For the six months ended June 30,

Cash flows from operating activities:

Loss from continuing operations

Net loss from continuing operations

$ ( 970,300 )

$ ( 1,254,600 )

Adjustments to reconcile net loss to net cash provided by operating activities:

2 unchanged sentences

Non-cash expense for interest, common stock issued for debt penalty

Provision for doubtful accounts receivable

Non-cash expense for interest, accretion of debt discount

Gain on disposition of assets

Non-cash relief of aged accounts payable

Changes in operating assets and liabilities:

10 unchanged sentences

Proceeds from the sale of fixed assets

Net cash provided (used) by investing activities

Net cash provided by (used) in investing activities

Cash flows from financing activities:

1 unchanged sentence

Payments of short-term notes - related party

Proceeds of short-term notes - related party

Proceeds from short-term notes - related party

Proceeds from short-term and long-term debt

1 unchanged sentence

Net cash provided by financing activities

Net (decrease) increase in cash

Net increase (decrease) in cash

Cash at the beginning of period

3 unchanged sentences

Financing of prepaid insurance premiums

Non-cash repayment of

Non-cash repayment of debt

Non-cash payment of interest

3 unchanged sentences

Environmental & Energy Resources, Inc.

(“SEER,”

or the “Company”), a Nevada corporation, is a provider of

(“SEER,” or the “Company”), a Nevada corporation, is a provider of

next-generation clean-technologies, waste management innovations and related services.

4 unchanged sentences

The three wholly owned subsidiaries

1) REGS, LLC (d/b/a Resource Environmental Group Services (“REGS”)) provided industrial and proprietary cleaning

services to refineries, oil fields and other private and governmental entities, which is included in discontinued operations for fiscal

REGS is solely engaged in building kilns after the industrial cleaning has been discontinued;

2) MV, LLC (d/b/a MV Technologies)

(“MV”), designs and builds biogas conditioning solutions for the production of renewable natural gas, odor control systems

and natural gas vapor capture primarily for landfill operations, waste-water treatment facilities, oil and gas fields, refineries, municipalities

and food, beverage & agriculture operations throughout the U.S.;

3) Strategic Environmental Materials, LLC, (“SEM”),

a materials technology company focused on development of cost-effective chemical absorbents.

three majority-owned subsidiaries include 1) Paragon Waste Solutions, LLC (“PWS”), 2) ReaCH4Biogas (“Reach”),

and 3) PelleChar, LLC (“PelleChar”).

PWS is currently owned 54% by SEER, Reach is owned 85% by SEER and PelleChar is owned

After the industrial cleaning was discontinued as of 2019, REGS continued with its manufacturing and assembly operations

during 2020 and into 2021.

These operations consisted primarily of building kilns and related equipment.

The company expects to

wind down REGS for all purposes and cease all operations in September 2021;

2) MV, LLC (d/b/a MV Technologies) (“MV”),

designs and builds biogas conditioning solutions for the production of renewable natural gas, odor control systems and natural gas vapor

capture primarily for landfill operations, waste-water treatment facilities, oil and gas fields, refineries, municipalities and food,

beverage & agriculture operations throughout the U.S.;

3) Strategic Environmental Materials, LLC, (“SEM”), a materials

technology company focused on development of cost-effective chemical absorbents.

two majority-owned subsidiaries include 1) Paragon Waste Solutions, LLC (“PWS”), and 2) PelleChar, LLC (“PelleChar”).

PWS is currently owned 54 % by SEER and PelleChar is owned 51 % by SEER.

has and continues to develop specific opportunities to deploy and commercialize patented technologies for a non-thermal plasma-assisted

2 unchanged sentences

and without harmful emissions.

Additionally, PWS’

technology “cleans”

and conditions emissions and gaseous waste streams

Additionally, PWS’ technology “cleans” and conditions emissions and gaseous waste streams

( i.e ., volatile organic compounds and other greenhouse gases) generated from diverse sources such as refineries, oil fields, and

(the trade name for BeneFuels, LLC), is currently owned 85% by SEER and focuses specifically on treating biogas for conversion to pipeline

quality gas and/or compressed natural gas (“CNG”) for fleet vehicle fuel.

Reach had no operations for the three months

ended March 31, 2021.

PelleChar was established in September 2018 and

is owned 51% by SEER.

Pellechar has secured third-party pellet manufacturing capabilities from one of the nation’s premier

pellet manufacturer.

Working closely with Biochar Now, LLC, Pellechar commenced sales in late 2019 of its proprietary pellets containing

the proven and superior Biochar Now product starting with the landscaping and big agriculture markets.

At this time, Pellechar is the

only company able to offer a soil amendment pellet containing the Biochar Now product that is produced using the patented pyrolytic process.

For the three months ended March 31, 2021 PelleChar activity related to startup of operations that were interrupted by the pandemic

in 2020, and a commencement to market its product.

Revenue and expenses of PelleChar were not material for the nine months

was established in September 2018 and is owned 51% by SEER.

Pellechar has secured third-party pellet manufacturing capabilities from

one of the nation’s premier pellet manufacturers.

Working closely with Biochar Now, LLC, Pellechar commenced sales in late 2019

of its proprietary pellets containing the proven and superior Biochar Now product starting with the landscaping and big agriculture markets.

At this time, Pellechar is the only company able to offer a soil amendment pellet containing the Biochar Now product that is produced

using the patented pyrolytic process.

For the six months ended June 30, 2021, PelleChar activity related to startup of operations that

were interrupted by the pandemic in 2020, and a commencement to market its product.

Revenue and expenses of PelleChar were not material

for the six months then ended.

of Consolidation

accompanying consolidated financial statements include the accounts of SEER, its wholly owned subsidiaries, REGS, MV and SEM and its

majority-owned subsidiaries PWS, Reach and PelleChar, since their respective acquisition or formation dates.

All material intercompany

accounts, transactions, and profits have been eliminated in consolidation.

The Company has non-controlling interest in joint ventures,

which are reported on the equity method.

shown in the accompanying consolidated financial statements, the Company has experienced recurring losses, and has accumulated

a deficit of approximately $30.0 million as of March 31, 2021, and $29.7 million as of December 31, 2020.

For the three months

ended March 31, 2021 and 2020, the Company incurred net losses from continuing operations of approximately $0.2 million

and $0.6 million, respectively.

The Company had a working capital deficit of approximately $9.4 million as of March 31,

2021, a decrease of $0.4 million in working capital deficit from $9.8 million as of December 31, 2020.

These factors raise substantial

doubt about the ability of the Company to continue to operate as a going concern.

of a major portion of the Company’s assets as of March 31, 2021, is dependent upon continued operations.

majority-owned subsidiaries PWS and PelleChar, since their respective acquisition or formation dates.

All material intercompany accounts,

transactions, and profits have been eliminated in consolidation.

The Company has non-controlling interest in joint ventures, which are

reported on the equity method.

shown in the accompanying consolidated financial statements, the Company has experienced recurring losses, and has accumulated a deficit

of approximately $ 30.6

million as of June 30, 2021, and $ 29.7

million as of December 31, 2020.

months ended June 30, 2021, and 2020, the Company incurred net losses from continuing operations of approximately $ 1.0

million and $ 1 .3

million, respectively.

The Company had a working

capital deficit of approximately $ 9.8

million as of June 30, 2021, consistent with a working capital

deficit of $ 9.8 million

as of December 31, 2020.

These factors raise substantial doubt about the ability of the Company to continue to operate as a going concern.

of a major portion of the Company’s assets as of June 30, 2021, is dependent upon continued operations.

The Company is dependent

on generating additional revenue or obtaining adequate capital to fund operating losses until it becomes profitable.

For the three months

ended March 31, 2021 the Company raised approximately $0.7 million from the issuance of short-term and long-term debt, offset by payments

of principal on short term notes and capital leases of $0.2 million, for a net cash provided by financing activities of approximately

$0.1 million.

In addition, the Company has undertaken a number of specific steps to continue to operate as a going concern.

continues to focus on developing organic growth in our operating companies and improving gross and net margins through increased attention

to pricing, aggressive cost management and overhead reductions, including discontinuing a line of business with insufficient margins.

Critical to achieving profitability will be the ability to license and or sell, permit and operate though the Company’s joint ventures

and licensees the CoronaLux™

waste destruction units.

The Company has increased business development efforts to address opportunities

identified in expanding markets attributable to increased interest in energy conservation and emission control regulations.

the Company is evaluating various forms of financing which may be available to it.

There can be no assurance that the Company will secure

additional financing for working capital, increase revenues and achieve the desired result of net income and positive cash flow from

operations in future years.

These financial statements do not give any effect to any adjustments that would be necessary should the Company

be unable to report on a going concern basis.

For the six months

ended June 30, 2021, the Company raised approximately $ 1.0

million from the Payroll Protection Program,

and the issuance of short-term and long-term debt, offset by payments of principal on short term notes and capital leases of $ 0.1

million, for a net cash provided by financing

activities of approximately $ 0.9

In addition, the Company has undertaken

a number of specific steps to continue to operate as a going concern.

The Company continues to focus on developing organic growth in

our operating companies and improving gross and net margins through increased attention to pricing, aggressive cost management and overhead

reductions, including discontinuing a line of business with insufficient margins.

Critical to achieving profitability will be the ability

to license and or sell, permit and operate though the Company’s joint ventures and licensees the CoronaLux™ waste destruction

The Company has increased business development efforts to address opportunities identified in expanding markets attributable to

increased interest in energy conservation and emission control regulations.

In addition, the Company is evaluating various forms of financing

which may be available to it.

There can be no assurance that the Company will secure additional financing for working capital, increase

revenues and achieve the desired result of net income and positive cash flow from operations in future years.

These financial statements

do not give any effect to any adjustments that would be necessary should the Company be unable to report on a going concern basis.

of presentation Unaudited Interim Financial Information

7 unchanged sentences

principles generally accepted in the United States have been condensed or omitted pursuant to the rules and regulations of the Securities

and Exchange Commission (“SEC”).

The Company believes that the disclosures are adequate to make the interim information presented

not misleading.

These consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial

statements and the notes thereto included in the Company’s Report on Form 10-K filed on April 15, 2021 for the year ended December

These consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial

statements and the notes thereto included in the Company’s Report on Form 10-K filed on April 15, 2021, for the year ended December

2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

33 unchanged sentences

and Development

and development (“R&D”) costs are charged to expense as incurred.

R&D expenses consist primarily of salaries, project

1 unchanged sentence

R&D expenses were

$0 for both the three months ended March 31, 2021 and 2020.

$ 0 for both the six months ended June 30, 2021, and 2020.

are stated at the lower of cost or net realizable value on a first in, first out basis and includes the following amounts:

December 31, 2020

Finished goods

Work in process

Raw materials

Company accounts for income taxes pursuant to Accounting Standards Codification (“ASC”) 740, Income Taxes, which

SCHEDULE OF INVENTORY

Company accounts for income taxes pursuant to Accounting Standards Codification (“ASC”) 740, Income Taxes, which

utilizes the asset and liability method of computing deferred income taxes.

The objective of this method is to establish deferred tax

assets and liabilities for any temporary differences between the financial reporting basis and the tax basis of the Company’s assets

and liabilities at enacted tax rates expected to be in effect when such amounts are realized or settled.

1 unchanged sentence

in the financial statements.

Tax positions must meet a “more-likely-than-not”

recognition threshold at the effective date

Tax positions must meet a “more-likely-than-not” recognition threshold at the effective date

to be recognized.

During the three months ended March 31, 2021 and 2020 the Company recognized no adjustments for uncertain tax positions.

During the six months ended June 30, 2021, and 2020 the Company recognized no adjustments for uncertain tax positions.

Company recognizes interest and penalties related to uncertain tax positions in income tax expense.

No interest and penalties related

to uncertain tax positions were recognized as of March 31, 2021 and 2020.

to uncertain tax positions were recognized as of June 30, 2021, and 2020.

The Company expects no material changes to unrecognized tax

1 unchanged sentence

Company has filed federal and state tax returns through December 31, 2019.

The tax periods for the years ending December 31, 2017 through

2019 are open to examination by federal and state authorities.

The tax periods for the years ending December 31, 2017,

through 2019 are open to examination by federal and state authorities.

revenue generated from contracts with customers, for the manufacture of products for the removal and treatment of hazardous vapor and

3 unchanged sentences

materials, and expectations regarding the period of performance.

Such changes are “change orders”

and may be initiated by

Such changes are “change orders” and may be initiated by

us or by our clients.

17 unchanged sentences

Waste Revenue

Company’s revenues from waste destruction licensing agreements are recognized as a single accounting unit over the term of the

Revenue from joint venture operations of the Company’s CoronaLux™

units is recognized as the revenue is earned by

Company’s revenues from waste destruction licensing agreements are recognized as a single accounting unit over the term of the

Revenue from joint venture operations of the Company’s CoronaLux™ units is recognized as the revenue is earned by

the joint venture.

1 unchanged sentence

Disaggregation

Three months ended March 31, 2021

of Revenue (Unaudited)

SCHEDULE OF DISAGGREGATION OF REVENUE

Three months ended June 30, 2021

Environmental Solutions

5 unchanged sentences

Total Revenue

Three months ended March 31, 2020

months ended June 30, 2020

Environmental

Six months ended June 30, 2021

Environmental Solutions

5 unchanged sentences

Total Revenue

Six months ended June 30, 2020

Environmental Solutions

Sources of Revenue

Product sales

Licensing fees

Operating fees

Management fees

Total Revenue

a performance obligation has been satisfied but not yet invoiced at the reporting date, a contract asset is recognized on the balance

1 unchanged sentence

is recognized on the balance sheet.

opening and closing balances of the Company’s accounts receivables and contract liabilities (current and non-current) are as follows:

SCHEDULE OF CONTRACT BALANCES

Receivable, net

Contract Assets

Contract Liabilities

Deferred Revenue

(non-current)

Balance as of March 31, 2021

Balance as of June 30, 2021

Balance as of December 31, 2020

(Decrease) increase

majority of the Company’s revenue is generally invoiced on a weekly or monthly basis, and the payments are generally received within

approximately 30-60 days.

Deferred revenue is recorded when cash payments are received or due in advance of the Company’s performance,

including amounts that are refundable.

Performance Obligations

of March 31, 2021, the aggregate amount of the transaction price allocated to the remaining performance obligations was approximately

of June 30, 2021, the aggregate amount of the transaction price allocated to the remaining performance obligations was approximately

$ 1.3 million, of which the Company expects to recognize approximately 75 % of this revenue over the next 12 months.

3 unchanged sentences

expenses and other current assets are assets and payments previously made, that benefit future periods.

The balance as of March

31, 2021 includes Employee Retention Tax Credit (“ERTC”) program from the U.S Treasury, as part of the COVID-19 stimulus

The balance as of June 30, 2021,

includes Employee Retention Tax Credit (“ERTC”) program from the U.S Treasury, as part of the COVID-19 stimulus package.

The ERTC program refunds a portion of taxes paid for payroll.

We accrued the amounts that we qualify for, and this reduced

our payroll expenses during the quarter applied for and approved.

We accrued the amounts that we qualify for, and this reduced our payroll

expenses during the quarter applied for and approved.

Prepaid and other current assets comprised of the following:

SCHEDULE OF PREPAID AND OTHER CURRENT ASSETS

June 30, 2021

December 31, 2020

Prepaid expenses

2 unchanged sentences

and equipment was comprised of the following:

SCHEDULE OF PROPERTY PLANT AND EQUIPMENT

June 30, 2021

December 31, 2020

4 unchanged sentences

Building and improvements

Property and equipment, gross

accumulated depreciation and amortization

( 2,278,700 )

( 2,330,900 )

Property and equipment, net

expense for the three months ended March 31, 2021 and 2020 was $26,600 and $35,900, respectively.

For the three months ended March 31,

expense for the three months ended June 30, 2021, and 2020 was $ 26,600 and $ 37,900 , respectively.

For the three months ended June 30,

2021, and 2020, depreciation expense included in cost of goods sold was $ 20,300 and $ 24,600 , respectively.

For the three months ended

March 31, 2021 and 2020, depreciation expense included in selling, general and administrative expenses was $6,400 and $14,900, respectively.

expense on leased CoronaLux™

units included in depreciation and amortization above is $0 and $9,700 as of March 31, 2021 and 2020,

June 30, 2021, and 2020, depreciation expense included in selling, general and administrative expenses was $ 6,500 and $ 13,300 , respectively.

expense for the six months ended June 30, 2021, and 2020 was $ 53,200 and $ 73,900 , respectively.

For the six months ended June 30, 2021,

and 2020, depreciation expense included in cost of goods sold was $ 40,400 and $ 45,700 , respectively.

For the six months ended June 30,

2021, and 2020, depreciation expense included in selling, general and administrative expenses was $ 12,900 and $ 28,200 , respectively.

expense on leased CoronaLux™ units included in depreciation and amortization above is $ 0 and $ 19,400 as of June 30, 2021, and 2020,

respectively.

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

SCHEDULE OF PROPERTY AND EQUIPMENT FOR LEASES CAPITALIZED

June 30, 2021

December 31, 2020

Vehicles, field and shop equipment

accumulated amortization

Property and equipment

for leases capitalized

6 – INTANGIBLE ASSETS

assets were comprised of the following:

March 31, 2021 (Unaudited)

SCHEDULE OF INTANGIBLE ASSETS

June 30, 2021 (Unaudited)

Gross carrying amount

2 unchanged sentences

Customer list

$ ( 965,800 )

December 31, 2020

3 unchanged sentences

Customer list

$ ( 949,800 )

estimated useful lives of the intangible assets range from seven to ten years .

Amortization expense was $ 9,700 and $ 8,000 for the three

months ended March 31, 2021 and 2020, respectively.

months ended June 30, 2021, and 2020, respectively.

Amortization expense was $ 16,100 for both six months ended June 30, 2021, and 2020.

Company has entered into operating leases primarily for real estate.

These leases have terms which range from 4 to 6 years, and often

include one or more options to renew.

These renewal terms can extend the lease term from 1 year to month-to-month and are included in

the lease term when it is reasonably certain that the Company will exercise the option.

These operating leases are included in “Right

of use assets”

on the Company’s December 31, 2020 Consolidated Balance Sheets and represent the Company’s right to

use the underlying asset for the lease term.

The Company’s obligation to make lease payments are included in “Current portion

of lease liabilities”

and “Lease liabilities net of current portion”

on the Company’s March 31, 2021 Condensed

These leases have terms which range from 1

years, and often include one or more options

These renewal terms can extend the lease term from 1

year to month-to-month and are included in the

lease term when it is reasonably certain that the Company will exercise the option.

These operating leases are included in “Right

of use assets” on the Company’s June 30, 2021, Consolidated Balance Sheets and represent the Company’s right to use

the underlying asset for the lease term.

The Company’s obligation to make lease payments are included in “Current portion

of lease liabilities” and “Lease liabilities net of current portion” on the Company’s June 30, 2021, Condensed

Consolidated Balance Sheets.

Based on the present value of the lease payments for the remaining lease term of the Company’s existing

leases, the Company recognized right-of-use assets of approximately $225,300 and lease liabilities for operating leases of approximately

$246,100 on January 1, 2019.

Based on the present value of the lease payments for the remaining lease term of the Company’s existing

leases, the Company recognized right-of-use assets of approximately $ 226,600

and lease liabilities for operating leases of

approximately $ 246,100 on

January 1, 2019.

Operating lease right-of-use assets and liabilities commencing after January 1, 2019, are recognized at commencement

date based on the present value of lease payments over the lease term.

As of March 31, 2021, total right-of-use assets and operating

lease liabilities were approximately $338,300.

As of June 30, 2021, total right-of-use assets and operating lease

liabilities were approximately $ 326,600 and

respectively.

All operating lease expense is recognized on a straight-line basis over the lease term.

In the three months ended March 31, 2021, the Company recognized approximately $20,900 in operating lease costs for right-of-use assets.

In the six months ended June 30,

2021, the Company recognized approximately $ 72,900

in operating lease costs for right-of-use assets.

the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present

2 unchanged sentences

it has elected to treat as a single lease component.

related to the Company’s right-of-use assets and related lease liabilities were as follows (unaudited):

Three Months Ended March 31,

related to the Company’s right-of-use assets and related lease liabilities were as follows (Unaudited):

SCHEDULE OF RIGHT-OF-USE ASSETS AND RELATED LEASE LIABILITIES

Six Months Ended June 30,

Cash paid for operating lease liabilities

2 unchanged sentences

Weighted-average discount rate

Maturities of lease liabilities as of March 31, 2021 were as follows:

Maturities of lease liabilities as of June 30, 2021 were as follows:

SCHEDULE OF MATURITIES OF LEASE LIABILITIES

June 30, 2021

Lease liabilities

Less imputed interest

5 unchanged sentences

liabilities were comprised of the following:

SCHEDULE OF ACCRUED LIABILITIES

June 30, 2021

December 31, 2020

Accrued compensation and related taxes

5 unchanged sentences

estimated earnings and billings on uncompleted contracts are as follows:

SCHEDULE OF UNCOMPLETED CONTRACTS

June 30, 2021

December 31, 2020

Revenue recognized

billings to date

Costs and estimated earnings in excess of billings on uncompleted

Costs and estimated earnings in excess of billings on uncompleted contracts

Billings to date

Revenue recognized

( 2,278,700 )

( 1,392,900 )

Revenue contract liabilities

10 – INVESTMENT IN PARAGON WASTE SOLUTIONS LLC

its inception through March 31, 2021, the Company has provided approximately $6.9 million in funding to PWS for working capital and the

its inception through June 30, 2021, the Company has provided approximately $ 6.9 million in funding to PWS for working capital and the

further development and construction of various prototypes and commercial waste destruction units.

4 unchanged sentences

received for non-refundable licensing and placement fees have been recorded as deferred revenue in the accompanying consolidated balance

The balance as of March 31, 2021 and December 31, 2020 are $22,000 and $30,200, respectively, and are being recognized as revenue

The balance as of June 30, 2021, and December 31, 2020, are $ 13,700 and $ 30,200 , respectively, and are being recognized as revenue

ratably over the term of the contract.

6 unchanged sentences

of the taxes if REGS does not pay the liability.

of March 31, 2021, and December 31, 2020, the outstanding balance due to the IRS by REGS was $1,093,700, and $1,085,400, respectively.

of June 30, 2021, and December 31, 2020, the outstanding balance due to the IRS by REGS was $ 1,074,000 , and $ 1,085,400 , respectively.

than this outstanding payroll tax matter, which is owed exclusively by REGS, arising in 2009 and 2010, all state and federal payroll

taxes have been paid by REGS in a timely manner.

as of March 31, 2021 and December 31, 2020, was comprised of the following:

as of June 30, 2021 (Unaudited), and December 31, 2020, was comprised of the following:

SCHEDULE OF DEBT

Paycheck protection program

1 unchanged sentence

Convertible notes, unsecured

Current portion of long-term

debt and capital lease obligations

Current portion of long-term debt and capital lease obligations

Long term debt and capital lease obligations

2 unchanged sentences

Principal reductions

Long term debt to current

Amortization of debt discount

Balance March 31, 2021

Balance June 30, 2021

2,898,800 (4) (4)

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.

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.

(Note 1), in accordance

with the note’s provisions.

For the three months ended March 31, 2021, the Company

recorded interest expense of $2,400.

Unpaid interest at March 31, 2021 was approximately

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.

(Note 1), in accordance

with the note’s provisions.

For the three months ended March 31, 2021, the Company

recorded interest expense of $6,200.

Unpaid interest at March 31, 2021 was approximately

Protection Program (“PPP”) draw #2, received the first quarter of 2021.

note payable insurance premium financing, interest at approximately 5.1 % per annum, payable in 10 installments of $ 5,400 , maturing

on November 1, 2021 .

Unsecured note payable dated January 19, 2021, interest at an annual rate of 8 %

simple interest and matures on January

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 .

Note payable dated February 2, 2021, interest at an annual rate of 8 %

simple interest and matures on January

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 .

Note payable dated May 25, 2021, interest at an annual rate of 8 %

simple interest and matures on January

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 .

balance consists of $ 2,460,000 of secured notes, and $ 438,800 unsecured notes payable.

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parties accrued interest due to certain related parties are as follows:

SCHEDULE OF RELATED PARTIES, NOTES PAYABLE AND ACCRUED INTEREST

June 30, 2021

December 31, 2020

Short term notes

Accrued interest

Total short-term notes and accrued interest - Related parties

On January 6, 2021, the Company signed

a $10,000 short-term note payable to the CEO.

The note accrued interest at 8% interest per annum, with a $250 minimum interest

The loan was paid back withing the quarter, and $250 was recorded as interest expense.

Total short-term notes and accrued

interest - Related parties

January 6, 2021, the Company signed a $ 10,000

short-term note payable to the CEO.

accrued interest at 8 %

interest per annum, with a $ 250

minimum interest to be paid.

interest due was paid back within the first quarter, and $ 250

was recorded as interest expense.

14 – EQUITY TRANSACTIONS

Common Stock Transactions

the three months ended March 31, 2021, no new equity transactions have occurred.

the six months ended June 30, 2021, no new equity transactions have occurred.

Common Stock Transactions

During the three months ended March 31, 2020,

the Company recorded 352,500 shares of $.001 par value common stock as issued and issuable to short-term note holders as required under

their respective short-term notes valued at approximately $33,100.

(See Note 11)

During the three months ended March 31, 2020,

the Company issued options to purchase 60,000 shares of $0.001 par value common stock to a short-term note holder of the Company, at

$0.10 per share.

The options were in connection with a new short-term note, and therefore recorded as debt discount.

The Company valued

the options using the Black-Sholes model, using a volatility of 134%, a risk-free rate of 0.29%, and an expected term, using the simplified

method, of 3.0 years.

The fair value at grant date of $3,500 will be amortized over the vesting period and recorded as interest expense.

During the three months ended March 31, 2020,

the Company issued options to purchase 30,000 shares of $0.001 par value common stock to a short-term note holder of the Company, at

$0.10 per share.

The options were in connection with a new short-term note, and therefore recorded as debt discount.

The Company valued

the options using the Black-Sholes model, using a volatility of 134%, a risk-free rate of 0.30%, and an expected term, using the simplified

method, of 3.0 years.

The fair value at grant date of $2,000 will be amortized over the vesting period and recorded as interest expense.

the six months ended June 30, 2020, the Company recorded 742,500 shares of $ .001 par value common stock as issued and issuable to short-term

note holders as required under their respective short-term notes valued at approximately $ 74,700 (See Note 12).

the six months ended June 30, 2020, the Company issued options to purchase 60,000 shares of $ 0.001 par value common stock to a short-term

note holder of the Company, at $ 0.10 per share.

The options were in connection with a new short-term note, and therefore recorded as

debt discount.

The Company valued the options using the Black-Sholes model, using a volatility of 134 %, a risk-free rate of 0.29 %, and

an expected term, using the simplified method, of 3 .0 years.

The fair value at grant date of $ 3,500 will be amortized over the vesting

period and recorded as interest expense.

the six months ended June 30, 2020, the Company issued options to purchase 30,000 shares of $ 0.001 par value common stock to a short-term

note holder of the Company, at $0.10 per share.

The options were in connection with a new short-term note, and therefore recorded as

debt discount.

The Company valued the options using the Black-Sholes model, using a volatility of 134 %, a risk-free rate of 0.30 %, and

an expected term, using the simplified method, of 3 .0 years.

The fair value at grant date of $ 2,000 will be amortized over the vesting

period and recorded as interest expense.

Non-controlling

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condensed consolidated statements of operations, represents the net loss of each entity attributable to the non-controlling equity interest.

The non-controlling interest is reflected within stockholders’

equity on the condensed consolidated balance sheet.

The non-controlling interest is reflected within stockholders’ equity on the condensed consolidated balance sheet.

15 – CUSTOMER CONCENTRATIONS

Company had sales from operations to three customers, for the three months ended March 31, 2021 and

2020 that surpassed the 10% threshold of total revenue.

In total, these customers represented approximately 64% and 50%

of our total sales, respectively.

The concentration of the Company’s business with a relatively small number of customers may

expose us to a material adverse effect if one or more of these large customers were to experience financial difficulty or were to cease

being customers for non-financial related issues.

Company had sales from operations to five and one customers, for the six months ended June 30, 2021, and 2020 that surpassed the 10 %

threshold of total revenue, respectively.

In total, these customers represented approximately 76 % and 14 % of our total sales, respectively.

The concentration of the Company’s business with a relatively small number of customers may expose us to a material adverse effect

if one or more of these large customers were to experience financial difficulty or were to cease being customers for non-financial related

16 – NET LOSS PER SHARE

8 unchanged sentences

dilutive securities were comprised of the following (unaudited):

Three Months Ended March 31,

SCHEDULE OF POTENTIALLY DILUTIVE SECURITIES

Six Months Ended June 30,

Convertible notes payable, including accrued interest

8 unchanged sentences

All intercompany transactions have been eliminated.

information for the three and three months ended March 31, 2021 and 2020 is as follows:

information for the three and six months ended June 30, 2021 (Unaudited), and 2020 is as follows:

SCHEDULE OF SEGMENT INFORMATION

Three Months Ended June 30,

Environmental

10 unchanged sentences

Capital expenditures (cash and noncash)

Six Months Ended June 30,

Environmental

Depreciation and amortization (1)

Interest expense

Stock-based compensation

Net income (loss)

Capital expenditures (cash and noncash)

Environmental

Depreciation and amortization (1)

Interest expense

Stock-based compensation

Net income (loss)

( 1,254,600 )

Capital expenditures (cash and noncash)

depreciation of property, equipment and leasehold improvement and amortization of intangibles

Management’s Discussion and Analysis of Financial Condition and Results of Operations

following discussion is intended to assist you in understanding our business and the results of our operations.

It should be read in

conjunction with the Condensed Consolidated Financial Statements and the related notes that appear elsewhere in this report as well as

our Report on Form 10-K filed with the Securities and Exchange Commission on April 15, 2021.

Certain statements made in our discussion

may be forward looking.

Forward-looking statements involve risks and uncertainties and a number of factors could cause actual results

or outcomes to differ materially from our expectations.

These risks, uncertainties, and other factors include, among others, the risks

described in our Annual Report on Form 10-K filed with the Securities and Exchange Commission, as well as other risks described in this

Quarterly Report.

Unless the context requires otherwise, when we refer to “we,”

“us”

and “our,”

are describing Strategic Environmental & Energy Resources, Inc.

and its consolidated subsidiaries on a consolidated basis.

BUSINESS OVERVIEW

Environmental & Energy Resources, Inc.

(“the Company”

or “SEER”) was originally organized under the laws

of the State of Nevada on February 13, 2002 for the purpose of acquiring one or more businesses, under the name of Satellite Organizing

Solutions, Inc.

(“SOZG”).

In January 2008, SOZG changed its name to Strategic Environmental & Energy Resources, Inc.,

reduced its number of outstanding shares through a reverse stock split and consummated the acquisition of both, REGS, LLC and Tactical

Cleaning Company, LLC.

SEER is dedicated to assembling complementary service and environmental, clean-technology businesses that provide

safe, innovative, cost effective, and profitable solutions in the environmental, waste management and renewable energy industries.

currently operates five companies with four offices in the western and mid-western U.S.

Through these operating companies, SEER provides

products and services throughout the U.S.

and has licensed and owned technologies with many customer installations throughout the U.S.

Each of the five operating companies is discussed in more detail below.

The Company also has non-controlling interests in joint ventures,

some of which have no or minimal operations.

Company’s domestic strategy is to grow internally through SEER’s subsidiaries that have well established revenue streams

and, simultaneously, establish long-term alliances with and/or acquire complementary domestic businesses in rapidly growing markets for

renewable energy, waste and water treatment and industrial services.

The focus of the SEER family of companies, however, is to increase

margins by securing or developing proprietary patented and patent-pending technologies and then leveraging its 20 plus-year service experience

to place these innovations and solutions into the growing markets of emission capture and control, renewable “green gas”

capture and sale, compressed natural gas fuel generation, as well as general solid waste and medical/pharmaceutical waste destruction.

Many of SEER’s current operating companies share customer bases and each provides synergistic services, technologies and products.

company now owns and manages four operating entities and two entities that have no significant operations to date.

LLC d/b/a Resource Environmental Group Services (“REGS”):

(operating since 1994) designs and manufactures environmental

systems and provides general industrial cleaning services and waste management consulting to many industry sectors.

During the fourth

quarter of 2019, the Company ceased bidding on, and accepting contracts for the services division of its REGS subsidiary.

from the subsidiary are included in discontinued operations for the years ended 2019 and 2018.

No contracts have been uncompleted relating

to the services division;

therefore, the division did not have any performance obligations as of December 31, 2019, nor thereafter.

employees in the division were terminated at December 31, 2019.

Subsequent to January 1, 2020, REGS is engaged solely to build kilns

for PWS, and other customers.

LLC (d/b/a MV Technologies), (“MV”) :

(operating since 2003) MV designs and sells patented and/or proprietary,

dry scrubber solutions for management of Hydrogen Sulfide (H 2 S) in biogas, landfill gas, and petroleum processing operations.

These system solutions are marketed under the product names H2SPlus™

and OdorFilter™.

The markets for these products include

land fill operations, agricultural and food product processors, wastewater treatment facilities, and petroleum product refiners.

develops and designs proprietary technologies and systems used to condition biogas for use as renewable natural gas (“RNG”),

for a number of applications, such as transportation fuel and natural gas pipeline injection.

Environmental Materials, LLC (“SEM”):

(formed September 2015) is a wholly owned subsidiary established as a materials

technology business with the purpose of developing advanced chemical absorbents and catalysts that enhance the capability of biogas produced

from, landfill, wastewater treatment operations and agricultural digester operations.

Waste Solutions, LLC (“PWS”):

(formed late 2010) PWS is an operating company that has developed a patented waste destruction

technology using a pyrolytic heating process combined with “non-thermal plasma”

assisted oxidation.

This technique involves

gasification of solid waste by heating the waste in a low-oxygen environment, followed by complete oxidation at higher temperatures in

the presence of plasma.

The term “non-thermal plasma”

refers to a low energy ionized gas that is generated by electrical

discharges between two electrodes.

This technology, commercially referred to as CoronaLux™, is designed and intended for the “clean”

destruction of hazardous chemical and biological waste (i.e ., hospital “red bag”

waste) thereby eliminating the need

for costly segregation, transportation, incineration or landfill (with their associated legacy liabilities).

PWS is a 54% owned subsidiary.

(“Reach”) (trade name for Benefuels, LLC):

(formed February 2013) owned 85% by SEER.

Reach develops renewable natural

gas projects that convert raw biogas into pipeline quality gas and/or Renewable, “RNG”, for fleet vehicles.

Reach had minimal

operations as of March 31, 2021.

LLC (“PelleChar”):

(formed September 2018) owned 51% by SEER.

PelleChar has secured third-party pellet manufacturing

capabilities from one of the nation’s premier pellet manufacturer.

Working closely with Biochar Now, LLC, PelleChar commenced sales

in 2019 of its proprietary pellets containing the proven and superior Biochar Now product starting with the landscaping and big agriculture

At this time, PelleChar is the only company able to offer a soil amendment pellet containing the Biochar Now product that is

produced using the patented pyrolytic process.

PelleChar activity to date relates to startup of operations, and an increasing sales effort.

Revenue and expenses of PelleChar were not material for the three months ended March 31, 2021.

Waste (UK) Ltd :

In June 2014, PWS and PCI Consulting Ltd (“PCI”) formed Paragon Waste (UK) Ltd (“Paragon UK Joint

Venture”) to develop, permit and exploit the PWS waste destruction technology within the territory of Ireland and the United Kingdom.

PWS and PCI each own 50% of the voting shares of Paragon UK Joint Venture.

Operations to date of the Paragon UK Joint Venture have been

limited to formation, the delivery of a CoronaLux™

unit with a third party in the United Kingdom and application and permitting

efforts with regulatory entities.

In February 2015, PWS and Particle Science Tech of Environmental Protection, Inc.

(“Particle Science”) formed

a joint venture, Particle & Paragon Environmental Solutions, Inc (“P&P”) to exploit the PWS technology in China,

including Hong Kong, Macao and Taiwan.

PWS and Particle Science each own 50% of P&P.

Operations to date have been limited to formation

of P&P and the sale and delivery of a CoronaLux™

unit to Particle Science in China.

MWS Joint Venture :

In October 2014, PWS and Medical Waste Services, LLC (“MWS”) formed a contractual joint venture to

exploit the PWS medical waste destruction technology.

In 2015, MWS licensed and installed a CoronaLux™

unit at an MWS facility,

and subsequently received a limited permit to operate from the South Coast Air Quality Management District (“SCAQMD”) and

the California Department of Public Health.

In November 2017, PWS received final air quality permit approval from SCAQMD allowing for

full operations of the CoronaLux™

unit at the MWS facility.

Southwest Joint Venture :

In December 2017, PWS and GulfWest Waste Solutions, LLC (“GWWS”) formed Paragon Southwest Medical

Waste, LLC (“PSMW”) to exploit the PWS medical waste destruction technology.

PSMW will have an exclusive license to the CoronaLux™

technology in a six-state area of the Southern United States.

In addition to the equity position, PWS will be the operating partner for

the business and intends to sell a number of additional systems to the joint venture.

In 2017, PSMW purchased and installed three CoronaLux™

units at an PSMW facility.

Financial Condition and Liquidity

shown in the accompanying consolidated financial statements, the Company has experienced recurring losses, and has accumulated a deficit

of approximately $30.0 million as of March 31, 2021, and $29.7 million as of December 31, 2020.

For the three months ended March 31,

2021 and 2020 we had net losses from continuing operations before adjustment for losses attributable to non-controlling interest of approximately

$0.3 million and $0.7 million, respectively.

As of March 31, 2021, and December 31, 2020 our current liabilities exceed our current assets

by approximately $9.4 million and $9.8 million, respectively.

The primary reason for the decrease in negative working capital from December

31, 2020 to March 31, 2021 is due to a net increase in COVID-19 related stimulus related payroll tax credits.

The Company has limited

common shares available for issue which may limit the ability to raise capital or settle debt through issuance of shares.

These factors

raise substantial doubt about the ability of the Company to continue to operate as a going concern for a period of at least one year

after the date of the issuance of our audited financial statements for the period ended March 31, 2021.

of a major portion of our assets as of March 31, 2021, is dependent upon our continued operations.

The Company is dependent on generating

additional revenue or obtaining adequate capital to fund operating losses until it becomes profitable.

In addition, we have undertaken

a number of specific steps to continue to operate as a going concern.

We continue to focus on developing organic growth in our operating

companies, diversifying our service customer base and market concentrations and improving gross and net margins through increased attention

to pricing, aggressive cost management and overhead reductions, including discontinuing a line of business with insufficient margins.

Critical to achieving profitability will be our ability to license and or sell, permit and operate through our joint ventures and licensees

our CoronaLux™

waste destruction units.

We have increased our business development focus to address opportunities identified in

domestic markets attributable to increased federal and state emission control regulations and a growing demand for energy conservation

and renewable energies.

In addition, the Company is evaluating various forms of financing that may be available to it.

There can be no

assurance that the Company will secure additional financing for working capital on favorable terms or at all, increase revenues and achieve

the desired result of net income and positive cash flow from operations in future years.

These financial statements do not give any effect

to any adjustments that would be necessary should the Company be unable to report on a going concern basis.

of Operations for the Three Months Ended March 31, 2021 and 2020

revenues were $0.9 million and $0.8 million for the three months ended March 31, 2021 and 2020, respectively.

The increase of approximately

$0.1 million or 12% in revenues comparing the three months ended March 31, 2021 to the three months ended March 31, 2020 is attributable

to the increases in revenues from our products segment revenue, which includes our environmental solutions segment, which increased from

$765,800 for the three months ended March 31, 2020 to $863,200 for the three months ended March 31, 2021, an increase of approximately

$97,400 or approximately 13%.

Environmental solutions segment generated more revenue as 10 internally built kilns were delivered during

the first quarter of 2021, and an increased volume of media sales from the first quarter of 2021 over the first quarter of 2020, partially

offset by reduced revenue recognized in our construction contracts, due to a general slowdown in the economy attributable to the COVID-19

expenses, which include cost of products, cost of solid waste and general and administrative (G&A) expenses, and salaries and related

expenses, were approximately $1.2 million for the three months ended March 31, 2021 compared to $1.5 million for the three months ended

March 31, 2020.

The decrease primarily consists of a decrease in general and administrative costs of approximately $0.1 million, as a

result of reduced professional fees during the quarter, and a reduction in salaries and related of approximately $0.2 million due to

the Employee Retention Tax Credit (“ERTC”) program from the U.S Treasury, as part of the COVID-19 stimulus package.

program refunds a portion of taxes paid for payroll.

We accrued the amounts that we qualify for, and this reduced our payroll expenses

during the quarter.

non-operating other expense, net was $0.1 million for the three months ended March 31, 2021 compared to $4,100 for the three months ended

March 31, 2020.

The increase in expense in 2021 compared to 2020 is primarily due to the reduced other income, which in 2020 included

a greater amount of gain on sale of fixed assets.

is no provision for income taxes for both the three months ended March 31, 2021 and 2020, due to our net losses for both periods and

we continue to maintain full allowances covering our net deferred tax benefits as of March 31, 2021 and 2020.

Net loss, before non-controlling

interest, for the three months ended March 31, 2021 was $330,400 compared to a net loss, before non-controlling interest,

of $653,400 for the three months ended March 31, 2020.

The net loss attributable to SEER after deducting $12,800

for the non-controlling interest was $317,600 for the three months ended March 31, 2021 as compared to $626,100, after deducting

$27,300 in non-controlling interest, for the three months ended March 31, 2020.

As noted above, a decrease in operating expenses

during 2021 of 22%, an increase in revenue of 12%, offset by increase in non-operating expenses, was the primary reason for the

decrease in the net loss.

Company had net cash used by operating activities for the three months ended March 31, 2021 of $0.7 million compared to net cash used

by operating activities for the three months ended March 31, 2020 of $0.3 million, an increase of cash used of approximately $0.4 million.

Cash used by operating activities is driven by our net loss and adjusted by non-cash items as well as changes in operating assets and

Non-cash adjustments primarily include depreciation, amortization of intangible assets, stock-based compensation expense,

provision for bad debt, and non-cash interest expense.

Non-cash adjustments reduced cash flows $16,500 for the three months ended March

31, 2021, compared to increasing cash flows $68,100 for the three months ended March 31, 2020.

Depreciation and amortization totalled

$34,600 during first quarter 2021 compared to $44,000 in the first quarter of 2020, non-cash expense for interest was $33,100 in the

first quarter 2020, and $0 in the first quarter of 2021, and gain on disposal of fixed assets was $75,800 in the first quarter of 2021,

and $0 in the first quarter of 2020.

In addition to the non-cash adjustments to net income, changes in assets and liabilities include:

a) changes in account receivable used $0.2 million in cash in the first quarter of 2021, compared to providing $0.2 million

in the first quarter of 2020, a net decrease in cash of $0.6 million, b) changes in prepaid expenses and other assets used

$0.2 million in the first quarter of 2021, compared to use of $0.1 million in the first quarter of 2020, c) changes in accounts payable

and accrued expenses used $25,400 in the first quarter of 2021, compared to providing $112,300 in the first quarter of 2020, a net increase

in cash of $0.1 million, d) changes in billings in excess of revenue on uncompleted contracts provided $6,800 in the first quarter

of 2021, compared to using $243,100 in the first quarter of 2020, a net increase in cash of $0.2 million, e) changes in deferred

revenue used $8,200 in the first quarter of 2021, compared to providing $76,000 in the first quarter of 2020, a net decrease in cash

of $0.1 million, and f) changes in prepaid expenses and other assets used $0.2 million in the first quarter of 2021, compared

to using $0.1 million in the first quarter of 2020, a net decrease in cash of $0.1 million.

cash provided by investing activities was $0.1 million for the three months ended March 31, 2021 compared to using $19,300 of cash for

the three months ended March 31, 2020.

The purchase of property and equipment was $19,300 for the three months ended March 30, 2020,

while $0 for the three months ended March 31, 2021.

The proceeds from sale of fixed assets totalled $75,800 for the three months ended

March 31, 2021, while $0 for the three months ended March 31, 2020.

cash provided by financing activities was $0.7 million for the three months ended March 31, 2021 compared to $0.1 million for

the three months ended March 31, 2020.

The net of proceeds and payments related to debt of approximately $0.6

million in the three months ended March 31, 2021 compared to approximately $0.1 million in the three months ended March

31, 2020 and the net proceeds related to paycheck protection program of approximately $0.1 in the three months ended March 31,

2021 compared to approximately $0 in the three months ended March 31, 2020.

Accounting Policies, Judgments and Estimates

preparation of these consolidated financial statements in conformity with accounting principles generally accepted in the United States

GAAP) requires management to make a number of estimates and assumptions related to the reported amount of assets and liabilities

and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts

of revenues and expenses during the period.

Significant items subject to such estimates and assumptions include the carrying amount of

intangible assets;

valuation allowances and reserves for receivables, inventory and deferred income taxes;

revenue recognition related

to contracts accounted for under the percentage of completion method;

share-based compensation;

and loss contingencies, including those

related to litigation.

Actual results could differ from those estimates.

Receivable and Concentration of Credit Risk

receivable are recorded at the invoiced amounts less an allowance for doubtful accounts and do not bear interest.

The allowance

for doubtful accounts is based on our estimate of the amount of probable credit losses in our accounts receivable.

the allowance for doubtful accounts based upon an aging of accounts receivable, historical experience and management judgment.

Accounts receivable balances are reviewed individually for collectability, and balances are charged off against the allowance

when we determine that the potential for recovery is remote.

An allowance for doubtful accounts of approximately $800 and $11,800

has been reserved as of March 31, 2021 and December 31, 2020, respectively.

Company is exposed to credit risk in the normal course of business,

primarily related to accounts receivable.

Our customers operate primarily in the biogas generating and wastewater treatment industries

in the United States.

Accordingly, we are affected by the economic conditions in these industries as well as general economic conditions

in the United States.

To limit credit risk, management periodically reviews and evaluates the financial condition of its customers and

maintains an allowance for doubtful accounts.

As of March 31, 2021, and December 31, 2020, we do not believe that we have significant

Value of Financial Instruments

carrying amounts of our financial instruments, including accounts receivable and accounts payable, are carried at cost, which approximates

their fair value due to their short-term maturities.

We believe that the carrying value of notes payable with third parties, including

their current portion, approximate their fair value, as those instruments carry market interest rates based on our current financial

condition and liquidity.

We believe the amounts due to related parties also approximate their fair value, as their carried interest rates

are consistent with those of our notes payable with third parties.

Company evaluates the carrying value of long-lived assets for

impairment on an annual basis or whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable.

An asset is considered to be impaired when the anticipated undiscounted future cash flows of an asset group are estimated to be less

than its carrying value.

The amount of impairment recognized is the difference between the carrying value of the asset group and its

Fair value estimates are based on assumptions concerning the amount and timing of estimated future cash flows.

No impairments

were determined as of March 31, 2021.

is recognized under FASB guidelines, which requires an evaluation of revenue arrangements with customers following a five-step approach:

(1) identify the contract with a customer;

(2) identify the performance obligations in the contract;

(3) determine the transaction price;

(4) allocate the transaction price to the performance obligations;

and (5) recognize revenue when (or as) the company satisfies each

performance obligation.

Revenues are recognized when control of the promised services are transferred to the customers in an amount that

reflects the expected consideration in exchange for those services.

A customer obtains control when it has the ability to direct the

use of and obtain the benefits from the services.

Other major provisions of the guidance include capitalization of certain contract costs,

consideration of the time value of money in the transaction price and allowing estimates of variable consideration to be recognized before

contingencies are resolved in certain circumstances.

The guidance also requires enhanced disclosures regarding the nature, amount, timing

and uncertainty of revenue and cash flows arising from contracts with customers.

account for stock-based awards at fair value on the date of grant and recognize compensation over the service period that they are expected

We estimate the fair value of stock options and stock purchase warrants using the Black-Scholes option pricing model.

The estimated

value of the portion of a stock-based award that is ultimately expected to vest, taking into consideration estimated forfeitures, is

recognized as expense over the requisite service periods.

The estimate of stock awards that will ultimately vest requires judgment, and

to the extent that actual forfeitures differ from estimated forfeitures, such differences are accounted for as a cumulative adjustment

to compensation expenses and recorded in the period that estimates are revised.

Quantitative and Qualitative Disclosures About Market Risk

NOTE 18 – SUBSEQUENT EVENTS

In July 2021, the Company received approval for the forgiveness of

the full amount of one loan under the Payroll Protection Program in the amount of approximately $ 87,000 .

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements