Strategic Environmental & Energy Resources, Inc. 10-Q

Item 1. Financial Statements STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS March 31, December 31, * 2023 2022 Unaudited * ASSETS Current Assets Cash and cash equivalents $ 45,100 $ 21,500 Accounts receivable, net of allowance for doubtful accounts of $ 179,000 219,200 640,500 Inventory 24,100 9,400 Contract assets 155,900 138,700 Prepaid expenses and other current assets 158,900 85,800 Assets held for sale 217,200 217,200 Total Current Assets 820,400 1,113,100 Property and equipment, net 33,600 38,600 Intangible Assets, net 20,000 20,700 Right of use assets 235,700 249,700 Investments 182,200 182,200 Other assets 40,100 40,100 TOTAL ASSETS $ 1,332,000 $ 1,644,400 LIABILITIES AND STOCKHOLDERS’ DEFICIT Current Liabilities Accounts payable $ 780,200 $ 1,044,800 Accrued liabilities 3,111,900 2,953,800 Contract liabilities 446,200 536,000 Short term notes 4,208,300 3,517,000 Short term notes and accrued interest - related party 179,800 184,000 Convertible notes 1,605,000 1,605,000 Current portion of long-term debt 504,300 505,900 Current portion of lease liabilities 65,300 63,100 Liabilities held for sale 76,400 85,500 Total Current Liabilities 10,977,400 10,495,100 Lease liabilities net of current portion 200,400 217,400 Long term debt 1,838,800 1,839,900 Total Liabilities 13,016,600 12,552,400 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; 65,088,575 shares issued, issuable ** and outstanding December 31, 2022 and December 31, 2021 65,100 65,100 Common stock issuable 25,000 25,000 Additional paid-in capital 22,973,800 22,973,800 Stock Subscription receivable ( 25,000 ) ( 25,000 ) Accumulated deficit ( 32,784,500 ) ( 32,005,100 ) Total stockholders’ deficit ( 9,745,600 ) ( 8,966,200 ) Non-controlling interest ( 1,939,000 ) ( 1,941,800 ) Total Deficit ( 11,684,600 ) ( 10,908,000 ) TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT $ 1,332,000 $ 1,644,400 * These numbers were derived from the audited financial statements for the year ended December 31, 2022. ** Includes 2,785,000 shares issuable as of March 31, 2023, and December 31, 2022, per terms of note agreements. The accompanying notes are an integral part of these consolidated financial statements. 3 STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) For the Three Months Ended March 31, 2023 2022 Revenue: Products $ 553,200 $ 756,000 Solid waste - 50,000 Total revenue 553,200 806,000 Operating expenses: Products costs 489,000 557,200 Solid waste costs - 7,400 General and administrative expenses 335,300 263,100 Salaries and related expenses 308,500 332,300 Total operating expenses 1,132,800 1,160,000 Loss from operations ( 579,600 ) ( 354,000 ) Other income (expense): Interest expense ( 206,000 ) ( 189,000 ) Gain on debt extinguishment - 96,600 Other 20,700 77,000 Total non-operating expense, net ( 185,300 ) ( 15,400 ) Loss from continuing operations ( 764,900 ) ( 369,400 ) Loss from discontinued operations, net of tax ( 11,700 ) ( 21,300 ) Net Loss ( 776,600 ) ( 390,700 ) Less: Net income (loss) attributable to non-controlling interest 2,800 ( 4,100 ) Net Loss attributable to SEER common stockholders $ ( 779,400 ) $ ( 386,600 ) Basic earnings per share attributable to SEER common stockholders Loss from continuing operations, per share $ ( 0.01 ) $ ( 0.01 ) Income from discontinued operations, per share ( 0.00 ) ( 0.00 ) Net Loss per share, basic $ ( 0.01 ) $ ( 0.01 ) Fully diluted earnings per share attributable to SEER common stockholders Loss from continuing operations, per share ( 0.01 ) ( 0.01 ) Income from discontinued operations, per share ( 0.00 ) ( 0.00 ) Net Loss per share, basic $ ( 0.01 ) $ ( 0.01 ) Weighted average shares outstanding – basic 65,088,575 65,088,575 Weighted average shares outstanding – diluted 65,088,575 65,088,575 * less than $0.01 The accompanying notes are an integral part of these consolidated financial statements. 4 STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC. CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT (Unaudited) 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, 2022 - - 65,088,600 65,100 22,973,800 25,000 ( 25,000 ) ( 32,005,100 ) ( 1,941,800 ) ( 10,908,000 ) Net loss - - - - - - - ( 779,400 ) 2,800 ( 776,600 ) Balances at March 31, 2023 - - 65,088,600 65,100 22,973,800 25,000 ( 25,000 ) ( 32,784,500 ) ( 1,939,000 ) ( 11,684,600 ) 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, 2021 - $ - 65,088,600 $ 65,100 $ 22,973,800 $ 25,000 $ ( 25,000 ) $ ( 29,364,800 ) $ ( 1,870,600 ) $ ( 8,196,500 ) Net loss - - - - - - - ( 386,600 ) ( 4,100 ) ( 390,700 ) Balances at March 31, 2022 - - 65,088,600 65,100 22,973,800 25,000 ( 25,000 ) ( 29,751,400 ) ( 1,874,700 ) ( 8,587,200 ) The accompanying notes are an integral part of these consolidated financial statements. 5 STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC. CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) For the three Months Ended March 31. 2023 2022 Cash flows from operating activities: Loss from continuing operations $ ( 764,900 ) $ ( 369,400 ) Income from discontinued operations ( 11,700 ) ( 21,300 ) Net Loss ( 776,600 ) ( 390,700 ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 5,600 30,300 Gain on debt distinguishment - ( 96,600 ) Bad debt - 19,800 Changes in operating assets and liabilities: Accounts receivable 421,300 ( 212,700 ) Contract assets ( 17,200 ) ( 11,300 ) Inventory ( 14,700 ) 71,300 Prepaid expenses and other assets ( 73,800 ) ( 70,000 ) Accounts payable, accrued liabilities, and customer deposits ( 72,100 ) 274,300 Contract liabilities ( 89,800 ) ( 2,400 ) Change in assets and liabilities held for sale ( 9,100 ) - Net cash used in operating activities ( 626,400 ) ( 388,000 ) Cash flows from investing activities: Purchase of property and equipment - ( 28,300 ) Net cash (used) provided by investing activities - ( 28,300 ) Cash flows from financing activities: Payments of notes - ( 23,400 ) Proceeds from short-term and long-term debt 650,000 319,300 Net cash provided by financing activities 650,000 295,900 Effect of exchange rate changes on cash - Net increase (decrease) in cash 23,600 ( 120,400 ) Cash at the beginning of period 21,500 188,800 Cash at the end of period $ 45,100 $ 68,400 Supplemental disclosures of cash flow information: Cash paid for interest $ 13,600 $ 1,500 Financing of prepaid insurance premiums $ 35,800 $ - Non-cash repayment of debt $ - $ 50,800 Non-cash repayment of debt - PPP Loan $ - $ 96,600 Non-cash payment of interest $ - $ 15,400 The accompanying notes are an integral part of these consolidated financial statements. 6 NOTE 1 – ORGANIZATION AND FINANCIAL CONDITION Organization and Going Concern Strategic Environmental & Energy Resources, Inc. (“SEER,” or the “Company”), a Nevada corporation, is a provider of next-generation clean-technologies, waste management innovations and related services. SEER has two wholly owned operating subsidiaries and three majority-owned subsidiaries; all of which together provide technology solutions and services to companies primarily in the oil and gas, refining, landfill, food, beverage & agriculture, and renewable fuel industries. The two wholly owned subsidiaries include: 1) 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.; 2) Strategic Environmental Materials, LLC, (“SEM”), is a materials technology company focused on development of cost-effective chemical absorbents. SEM was discontinued in 2023 due to its products not meeting customer requirements. The three majority-owned subsidiaries are 1) Paragon Waste Solutions, LLC (“PWS”), 2) PelleChar, LLC (“PelleChar”), and 3) Benefules, LLC (“Benefuels”). PWS is currently owned 54 % by SEER, PelleChar is owned 51 % by SEER, and Benefuels is owned 85 % by SEER. Benefuels, focuses specifically on treating biogas for conversion to pipeline quality gas and/or compressed natural gas (“CNG”) for fleet vehicle fuel. PWS developed specific opportunities to deploy and commercialize patented technologies for a non-thermal plasma-assisted oxidation process that makes possible the clean and efficient destruction of solid hazardous chemical and biological waste ( i.e ., regulated medical waste, chemicals, pharmaceuticals and refinery tank waste, etc .) without landfilling or traditional incineration and without harmful emissions. Additionally, this 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 many others. In July 2022, the Company exchanged its patents and related technology, to its joint venture, Paragon Southwest Medical Waste (“PSMW”), in exchange for units in PSMW (See Note 9.) 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 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. Principals of Consolidation The accompanying consolidated financial statements include the accounts of SEER, its wholly owned subsidiaries, SEM, and MV, and its 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. Going Concern As shown in the accompanying consolidated financial statements, the Company has experienced recurring losses, and has accumulated a deficit of approximately $ 32.8 million as of March 31, 2023, and $ 32.0 million as of December 31, 2022. For the three months ended March 31, 2023, the Company incurred a net loss of approximately $ 0.8 million and for the three months ended March 31, 2022, the Company incurred a net loss of approximately $ 0.4 million. The Company had a working capital deficit of approximately $ 10.2 million as of March 31, 2023, and a working capital deficit of $ 9.4 million as of December 31, 2022. These factors raise substantial doubt about the ability of the Company to continue to operate as a going concern. 7 Realization of a major portion of the Company’s assets as of March 31, 2023, 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, 2023, the Company raised approximately $ 0.7 million from the issuance of short-term and long-term debt, for a net cash provided by financing activities of approximately $ 0.7 million. 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 SEM, a line of business with historically insufficient margins. The Company has limited common shares available for issue which may limit the ability to raise capital or settle debt through issuance of shares. 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. Basis of Presentation Unaudited Interim Financial Information The accompanying interim condensed consolidated financial statements are unaudited. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all the normal recurring adjustments necessary to present fairly the financial position and results of operations as of and for the periods presented. The interim results are not necessarily indicative of the results to be expected for the full year or any future period. Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with accounting 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, 2022, for the year ended December 31, 2022. NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of these consolidated financial statements in conformity with accounting principles generally accepted in the United States (U.S. 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 forecasted cash flows used in the impairment testing of goodwill and intangible assets. The carrying amount of intangible assets; valuation allowances and reserves for receivables; revenue recognition related to contracts accounted for under the percentage of completion method; and the Company’s ability to continue as a going concern. Actual results could differ from those estimates. Reclassifications Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported consolidated net loss. 8 Revenue Recognition In May 2014, the FASB issued guidance on revenue from contracts with customers that superseded most current revenue recognition guidance, including industry-specific guidance. The underlying principle of the guidance is to recognize revenue to depict the transfer of goods or services to customers at an amount to which the company expects to be entitled in exchange for those goods or services. The new guidance 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. (See Note 3) Research and Development Research and development (“R&D”) costs are charged to expense as incurred. R&D expenses consist primarily of salaries, project materials, contract labor and other costs associated with ongoing product development and enhancement efforts. R&D expenses were $ 0 for both the three months ended March 31, 2023, and 2022. Inventories Inventories are stated at the lower of cost or net realizable value on a first in, first out basis and includes the following amounts: SCHEDULE OF INVENTORY March 31, 2023 December 31, 2022 Finished goods $ 24,100 $ 9,400 Inventory, net $ 24,100 $ 9,400 Income Taxes The 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. ASC 740 also provides detailed guidance for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in the financial statements. 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, 2023, and 2022 the Company recognized no adjustments for uncertain tax positions. The 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, 2023, and 2022. The Company expects no material changes to unrecognized tax positions within the next twelve months. The Company has filed federal and state tax returns through December 31, 2021. The tax periods for the years ending December 31, 2019, through 2022 are open to examination by federal and state authorities. 9 NOTE 3 – REVENUE Products Revenue Product revenue generated from contracts with customers, for the manufacture of products for the removal and treatment of hazardous vapor and gasses. Total estimated revenue includes all of the following: (1) the basic contract price, (2) contract options, and (3) change orders. Once contract performance is underway, the Company may experience changes in conditions, client requirements, specifications, designs, materials, and expectations regarding the period of performance. Such changes are “change orders” and may be initiated by us or by our clients. In many cases, agreement with the client as to the terms of change orders is reached prior to work commencing; however, sometimes circumstances require that work progress without obtaining client agreement. Revenue related to change orders is recognized as costs are incurred if it is probable that costs will be recovered by changing the contract price. The Company does not incur pre-contract costs. Under the new revenue recognition guidance, the Company found no change in the manner product revenue is recognized. Provisions for estimated losses on uncompleted contracts are recorded in the period in which the losses are identified and included as additional loss. Provisions for estimated losses on contracts are shown separately as liabilities on the balance sheet, if significant, except in circumstances in which related costs are accumulated on the balance sheet, in which case the provisions are deducted from the accumulated costs. A provision as a liability is reported as a current liability. The Company includes in current assets and current liabilities amounts related to contracts realizable and payable. Costs and estimated earnings in excess of billings on uncompleted contracts represent the excess of contract costs and profits recognized to date over billings to date and are recognized as a current asset. Revenue contract liabilities represent the excess of billings to date over the amount of contract costs and profits recognized to date and are recognized as a current liability. Products revenue also includes media sales which are recognized as the product is shipped to the customer for use. Disaggregation of Revenue (Unaudited) SCHEDULE OF DISAGGREGATION OF REVENUE Environmental Solutions Solid Waste Total Three Months Ended March 31, 2023 Environmental Solutions Solid Waste Total Sources of Revenue Product sales $ 377,500 $ - $ 377,500 Media sales 175,700 - 175,700 Total Revenue $ 553,200 $ - $ 553,200 Environmental Solutions Solid Waste Total Three Months Ended March 31, 2022 Environmental Solutions Solid Waste Total Sources of Revenue Product sales $ 666,300 - $ 666,300 Media sales 89,700 - 89,700 Management fees - 50,000 50,000 Total Revenue $ 756,000 $ 50,000 $ 806,000 10 Contract Balances Where a performance obligation has been satisfied but not yet invoiced at the reporting date, a contract asset is recognized on the balance sheet. Where a performance obligation has not yet been satisfied but an invoice has been raised at the reporting date, a contract liability is recognized on the balance sheet. The opening and closing balances of the Company’s accounts receivables and contract liabilities (current and non-current) are as follows: SCHEDULE OF CONTRACT BALANCES Contract Liabilities Accounts Receivable, Contract Contract Deferred Revenue Deferred Revenue net Assets Liabilities (current) (non-current) Balance as of March 31, 2023 $ 219,200 $ 155,900 $ 446,200 $ - $ - Balance as of December 31, 2022 640,500 138,700 536,000 - - Increase (decrease) $ ( 421,300 ) $ 17,200 $ ( 89,800 ) $ - $ - The 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. Contract liabilities are recorded when cash payments are received or due in advance of the Company’s performance, including amounts that are refundable. Remaining Performance Obligations As of March 31, 2023, the aggregate amount of the transaction price allocated to the remaining performance obligations was approximately $ 1.2 million, of which the Company expects to recognize approximately 85 % of this revenue over the next 12 months. The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected term of one year or less and (ii) contracts for which the Company recognizes revenue at the amounts to which it has the right to invoice for services performed. NOTE 4 – PROPERTY AND EQUIPMENT Property and equipment was comprised of the following: SCHEDULE OF PROPERTY PLANT AND EQUIPMENT March 31, 2023 December 31, 2022 (unaudited) * Field and shop equipment $ 394,900 $ 395,000 Vehicles 72,500 72,500 Furniture and office equipment 293,400 333,800 Leasehold improvements 36,200 36,200 Property and equipment, gross 797,000 837,500 Less: accumulated depreciation and amortization ( 763,400 ) ( 798,900 ) Property and equipment, net $ 33,600 $ 38,600 Depreciation expense for the three months ended March 31, 2023, and 2022 was $ 4,900 and $ 24,800 , respectively. For the three months ended March 31, 2023, and 2022, depreciation expense included in cost of goods sold was $ 4,900 and $ 18,400 , respectively. For the three months ended March 31, 2023, and 2022, depreciation expense included in selling, general and administrative expenses was $ 0 and $ 6,400 , respectively. 11 NOTE 5 – INTANGIBLE ASSETS SCHEDULE OF INTANGIBLE ASSETS March 31, 2023 (Unaudited) Gross carrying amount Accumulated amortization Impairment Net carrying value Goodwill $ - $ - $ - $ - Customer list 42,500 ( 42,500 ) - - Technology 684,000 ( 664,000 ) - 20,000 Trade name 54,900 ( 54,900 ) - - $ 781,400 $ ( 761,400 ) $ - $ 20,000 December 31, 2022 Gross carrying amount Accumulated amortization Impairment Net carrying value Goodwill $ 277,800 $ - $ ( 277,800 ) $ - Customer list 42,500 ( 42,500 ) - - Technology 875,900 ( 813,300 ) ( 41,900 ) 20,700 Trade name 54,900 ( 54,900 ) - - $ 1,251,100 $ ( 910,700 ) $ ( 319,700 ) $ 20,700 The estimated useful lives of the intangible assets range from seven to twenty years. Amortization expense was $ 700 and $ 5,500 for the three months ended March 31, 2023, and 2022, respectively. NOTE 6 – LEASES The Company has entered into operating leases primarily for real estate. These leases have terms which range from 1 to 8 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 March 31, 2023, 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, 2023, Consolidated Balance Sheets. As of March 31, 2023, total right-of-use assets and operating lease liabilities were approximately $ 235,700 and $ 265,700 , respectively. All operating lease expense is recognized on a straight-line basis over the lease term. In the three months ended March 31, 2023, the Company recognized approximately $ 20,900 in operating lease costs for right-of-use assets. Because the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present value of the lease payments. The Company has certain contracts for real estate which may contain lease and non-lease components which it has elected to treat as a single lease component. 12 Information 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 Three Months Ended March 31, 2023 2022 Cash paid for operating lease liabilities $ 36,700 $ 36,700 Right-of-use assets obtained in exchange for new operating lease obligations - - Weighted-average remaining lease term 41 months 53 months Weighted-average discount rate 10 % 10 % Maturities of lease liabilities as of March 31, 2023 were as follows: SCHEDULE OF MATURITIES OF LEASE LIABILITIES 2023 $ 66,600 2024 90,900 2025 93,600 2026 64,500 2027 - Thereafter - 315,600 Less imputed interest ( 49,900 ) Total lease liabilities 265,700 Current operating lease liabilities 65,300 Non-current operating lease liabilities 200,400 Total lease liabilities $ 265,700 NOTE 7 – ACCRUED LIABILITIES Accrued liabilities were comprised of the following: SCHEDULE OF ACCRUED LIABILITIES March 31, December 31, 2023 2022 (unaudited) * Accrued compensation and related taxes $ 86,800 $ 81,900 Accrued interest 2,759,400 2,562,300 Accrued settlement/litigation claims 150,000 150,000 Warranty and defect claims 59,800 57,000 Other 55,900 102,600 Total Accrued Liabilities $ 3,111,900 $ 2,953,800 13 NOTE 8 – UNCOMPLETED CONTRACTS Costs, estimated earnings and billings on uncompleted contracts are as follows: SCHEDULE OF UNCOMPLETED CONTRACTS March 31, December 31, 2023 2022 (unaudited) * Revenue recognized $ 353,300 $ 440,200 Less: billings to date ( 197,400 ) ( 301,500 ) Contract assets 155,900 138,700 Billings to date 2,575,100 2,849,400 Revenue recognized ( 2,128,900 ) ( 2,313,400 ) Contract liabilities $ 446,200 $ 536,000 NOTE 9 – INVESTMENTS Paragon Waste Solutions LLC Since its inception through March 31, 2023, the Company has provided approximately $ 6.5 million in funding to PWS for working capital and the further development and construction of various prototypes and commercial waste destruction units. No members of PWS have made capital contributions or other funding to PWS other than SEER. The intent of the operating agreement is to provide the funding as an advance against future earnings distributions made by PWS. Paragon Southwest Medical Waste On July 20, 2022, PWS transferred all patents owned covering medical waste destruction, and related technology, to its joint venture, Paragon Southwest Medical Waste (“PSMW”), in exchange for units in PSMW. The units in PSMW transferred in connection with this transaction increased SEER’s equity in PSMW to approximately 30 %, on a total consolidated basis. This transaction also canceled the irrevocable license and royalty agreement, and the management agreement between PWS and PSMW. NOTE 10 – DEBT Debt as of March 31, 2023 (Unaudited), and December 31, 2022, was comprised of the following: SCHEDULE OF DEBT Short term notes Convertible notes, unsecured Current portion of long-term debt Long term debt Total Balance December 31, 2022 $ 3,517,000 $ 1,605,000 $ 531,300 $ 1,849,100 $ 7,502,400 Increase in borrowing 691,300 (1) - - - 691,300 Principal reductions - - ( 27,000 ) ( 10,800 ) ( 37,800 ) Amortization of debt discount - - - - - Balance September 30, 2022 $ 4,208,300 (2) $ 1,605,000 $ 504,300 $ 1,838,300 (3) $ 8,155,900 (1) A) Secured note payable of $ 350,000 , secured by certain real estate and equity, dated January 20, 203, interest at an annual rate of 8.0 % simple interest and matures on October 18, 2023 . For the three months ended March 31, 2023, the Company recorded interest expense of $ 5,300 . There was no unpaid interest as of March 31, 2023. B) A secured note payable of $ 300,000 , secured by real estate and equity in subsidiaries dated March 10, 2023, interest at an annual rate of 8 % simple interest and matures on December 10, 2023 . For the three months ended March 31, 2023, the Company recorded interest expense of $ 1,800 . There was no unpaid interest as of March 31, 2023. (C) Insurance premium financing note for $ 51,100 (2) The balance consists of $ 3,717,100 of secured notes, and $ 493,200 unsecured notes payable. (3) Secured notes. 14 NOTE 11 – RELATED PARTY TRANSACTIONS Notes payable and accrued interest, related parties Related parties accrued interest due to certain related parties are as follows: SCHEDULE OF RELATED PARTIES NOTES PAYABLE AND ACCRUED INTEREST March 31, December 31, 2023 2022 (unaudited) Short term notes $ 125,000 $ 125,000 Accrued interest 54,800 59,000 Total short-term notes and accrued interest - Related parties $ 179,800 $ 184,000 NOTE 12 – EQUITY TRANSACTIONS 2023 Common Stock Transactions During the three months ended March 31, 2022, no new equity transactions have occurred. 2022 Common Stock Transactions During the three months ended March 31, 2023, no new equity transactions have occurred. Non-controlling Interest The non-controlling interest presented in our condensed consolidated financial statements reflects a 46 % non-controlling equity interest in PWS and 49 % non-controlling equity interest in PelleChar. Net losses attributable to non-controlling interest, as reported on our 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. NOTE 13 – CUSTOMER CONCENTRATIONS The Company had sales from operations to three customers, for the three months ended March 31, 2023, and 2022 that surpassed the 10% threshold of total revenue, respectively. In total, these customers represented approximately 68 % and 64 % 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. NOTE 14 – NET GAIN OR LOSS PER SHARE Basic net gain or loss per share is computed by dividing net gain or loss attributable to common shareholders by the weighted average number of common shares outstanding. Diluted net gain or loss per share is computed by dividing net loss attributable to common shareholders by the weighted average number of common shares outstanding plus the number of common shares that would be issued assuming exercise or conversion of all potentially dilutive common shares. Potentially dilutive securities are excluded from the calculation when their effect would be anti-dilutive. For three months ended March 31, 2023, all potentially dilutive securities have been excluded from the diluted share calculations because they were anti-dilutive as a result of the net losses incurred for the respective period, or were dilutive, but the exercise prices were above the stock price for the entire period, deeming them not to be converted, or exercised during the period. Accordingly, basic shares equal diluted shares for all periods presented. 15 Potentially dilutive securities were comprised of the following (unaudited): SCHEDULE OF POTENTIALLY DILUTIVE SECURITIES Three Months Ended March 31, 2023 2022 Warrants - 200,000 Options 1,000,000 1,590,000 Convertible notes payable, including accrued interest 3,342,000 3,120,500 Potentially dilutive securities 4,342,000 4,910,500 NOTE 15 – DISCONTINUED SEM OPERATIONS On March 31, 2023, the Company’s board of directors, by unanimous consent, adopted a resolution to discontinue operations of the Company’s wholly owned subsidiary, SEM, LLC. For the unaudited three months ended March 31, 2023 and March 31, 2022, all operations from SEMS have been reported as discontinued operations. The following table presents the assets and liabilities associated with the discontinued operations of SEM: SCHEDULE OF DISCONTINUED OPERATIONS March 31, December 31, 2023 2022 (unaudited) * ASSETS Property and equipment, net $ 217,200 $ 217,200 Total assets held for sale $ 217,200 $ 217,200 LIABILITIES Current Liabilities Accounts payable $ 36,100 $ 40,900 Accrued liabilities 12,400 10,000 Current portion of long-term debt 25,400 25,400 Total Current Liabilities 73,900 76,300 Long term debt 2,500 9,200 Total liabilities held for sale $ 76,400 $ 85,500 Major classes of line items constituting pretax income on discontinued operations: 2023 2022 For the three months ended March 31, 2023 2022 Services revenue $ - $ 103,900 Services costs ( 6,400 ) ( 101,900 ) General and administrative expenses ( 4,800 ) ( 9,900 ) Salaries and related expenses - ( 12,300 ) Other expense ( 500 ) ( 1,100 ) Total expenses ( 11,700 ) ( 125,200 ) Operating loss ( 11,700 ) ( 21,300 ) Income tax benefit - - Total Loss from discontinued operations $ ( 11,700 ) $ ( 21,300 ) NOTE 16 – SEGMENT INFORMATION AND MAJOR CUSTOMERS The Company currently has identified two segments as follows: MV, PelleChar Environmental Solutions PWS Solid Waste The composition of our current reportable segments is consistent with that used by our chief decision makers to evaluate performance and allocate resources. All of our operations are located in the U.S. The Company has not allocated corporate selling, general and administrative expenses, and stock-based compensation to the segments. All intercompany transactions have been eliminated. 16 Segment information for the (unaudited) three months ended March 31, 2023 and 2022 is as follows: SCHEDULE OF SEGMENT INFORMATION Three Months ended March 31, Environmental Solid 2023 Solutions Waste Corporate Total Revenue $ 553,200 $ - $ - $ 553,200 Depreciation and amortization (1) 5,600 - - 5,600 Interest expense 800 - 205,700 206,500 Net income (loss) attributable to SEER common stockholders ( 147,600 ) 9,500 ( 641,300 ) ( 779,400 ) Capital expenditures (cash and noncash) - - - - Total assets $ 711,700 $ 100 $ 620,200 $ 1,332,000 Environmental (1) Solid 2022 Solutions (1) Waste Corporate Total Revenue $ 756,000 $ 50,000 $ - $ 806,000 Depreciation and amortization 5,100 7,400 11,900 24,400 Interest expense 300 4,100 184,600 189,000 Net income (loss) attributable to SEER common stockholders 36,500 ( 5,900 ) ( 417,200 ) ( 386,600 ) Capital expenditures (cash and noncash) 28,300 - - 28,300 Total assets $ 1,547,700 $ 277,600 $ 492,500 $ 2,317,800 (1) Excluded the Results of SEM which was discontinued January 1, 2023. (See Note 15) 17