Strategic Environmental & Energy Resources, Inc. 10-K

ITEM 1. BUSINESS Overview Strategic 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. 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. SEER currently operates four companies with its headquarters in Broomfield, Colorado. Through its operating companies, SEER provides environmental products and solutions throughout North America and is pursuing international markets for its technologies and products. SEER’s operating companies are discussed in more detail below. 3 The 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 management/treatment, emissions capture and conditioning, and environmental soil amendments and organic fertilizers. 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 25-plus-year service experience to place these innovations and solutions into several, growing international markets. With its diverse technologies and environmental solution offerings, SEER currently participates in worldwide markets of environmental compliance, renewable “green gas” energy, gaseous and solid medical/pharmaceutical waste minimization/management, and organic fertilizers and soil amendments. Most recently, SEER is focusing on decarbonization technologies and strategies, as well as monetization and tokenization of fully-insured biochar carbon credits. There are ever-increasing domestic and international carbon emissions regulations and offset programs, as well as statutory programs at the local, state, federal and international levels that create and mandate the need for renewable energies and waste minimization, proper handling, storage, treatment and disposal of virtually all types of waste. Subsidiaries Wholly owned MV, 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 (H2S) 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 landfill operations, agricultural and food product processors, wastewater treatment facilities, and petroleum product refiners. MV also 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. SEER Environmental Materials, LLC (“SEM”): (formed September 2015) is a wholly owned Colorado limited liability company registered to do business in Texas. It was established as a materials technology development business with its sole operating facility in central Texas. Initially, its primary purpose was developing advanced chemical absorbents and catalysts that enhance the capability of biogas produced from landfills, wastewater treatment operations, and agricultural digester operations. SEM’s central Texas media operations were discontinued during the year ended December 31, 2023. SEM’s current objective is to arrange the manufacturing and sale of biochar production kilns and related equipment, as well as own and operate a biochar production facility in northeast Texas under a joint venture license agreement from Biochar Now, LLC. Majority owned Paragon 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. This technology, commercially referred to as CoronaLux™, is designed and intended for the “clean” destruction of hazardous chemical and biological waste (i.e ., medical waste) thereby eliminating the need for costly segregation, transportation, incineration or landfill (with their associated legacy liabilities). In 2023 SEER sold its North American patent rights in a stock transaction and now holds a small, minority interest in Amlon Holdings. SEER continues to have the rights to develop the technology internationally (outside of North America) and continues to promote and market the CoronaLux technology in international markets. 4 PelleChar, 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 manufacturers. 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 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. PelleChar activity to date relates to promoting both domestic and international sales. Revenue and expenses of PelleChar were not material for the period ended December 31, 2024. Joint Ventures Eco SEER Saudi : On December 17, 2022, SEER and Eco Tadweer (“ET”), a business entity incorporated in the Kingdom of Saudi Arabia (“KSA”) entered into a joint venture with SEER owning a minority, non-controlling 49% interest in the joint venture. The purpose of the joint venture is to market and monetize SEER’s technologies in and around the KSA. While SEER is entitled to appoint one of three managers, ET is responsible for funding, operation and management of the joint venture. Eco SEER has had minimal operations as of December 31, 2024. Segment Information The Company currently has identified two segments as follows: % of Annual Revenues 2024 2023 MV, SEM, PelleChar Environmental Solutions 100 % 100 % PWS Solid Waste - % - % The Eco SEER Saudi Joint Venture is not currently operating but when operations commence it will be part of the Environmental Solutions segment. Having been sold, the Paragon Southwest Joint Venture is not currently operating. Any revenue generated from PWS’s international marketing efforts will be part of the Solid Waste segment. As of December 31, 2024, we had four customers who comprised 10% or more of our accounts receivable and had a balance of approximately $481,800. As of December 31, 2023, we had three customers who comprised 10% or more of our accounts receivable and had a balance of approximately $289,100. See Item 1A Risk Factors. Financial Condition As shown in the accompanying consolidated financial statements, we have has experienced recurring losses and has an accumulated deficit of approximately $36.2 million as of December 31, 2024, and for the year ended December 31, 2024, we incurred a net loss from continuing operations of approximately $1.8 million. As of December 31, 2024, our current liabilities exceeded our current assets by approximately $13.3 million. These factors raise substantial doubt about our ability to continue to operate as a going concern. Industry With its diverse services, technologies, and environmental solution offerings, SEER participates in the worldwide markets of environmental compliance, renewable energy, gaseous and solid waste minimization/management, and organic fertilizers and soil amendments. There are ever-increasing emissions and solid waste regulations, as well as statutory programs at the local, state, federal and international levels that create and mandate the need for renewable energies and waste minimization, proper handling, storage, treatment and disposal of virtually all types of waste. Most recently, there has been a growing number of international policies and programs encouraging and, in some instances, mandating the offset of carbon footprint by the reduction of CO2 generation or purchase of carbon offsets. This has given rise to a rapidly growing industry and an increasing value of decarbonization technologies and associated carbon credits. 5 The industrial waste management industry in North America was shaped first by the Resource Conservation and Recovery Act of 1976 (“RCRA”), which requires waste generators to, among other things, transport, treat, store and dispose of hazardous waste in accordance with specific regulations. After RCRA, growing national awareness of environmental issues, coupled with corporate and institutional awareness of environmental liabilities, have contributed to the growth of the industry and associated governing legislation on the state and federal levels. Today, collection and disposal of solid and hazardous wastes are subject to local, state, and federal requirements and controls that regulate health, safety, the environment, zoning and land-use. Included in these regulations is the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”), of the United States. CERCLA holds generators and transporters of hazardous substances, as well as past and present owners and operators of sites where there has been a hazardous release, strictly, jointly and severally liable for environmental cleanup costs resulting from the release or threatened release of hazardous materials. The enactment of the federal Clean Air Act of 1970 (CAA) resulted in a major shift in the federal government’s role in air pollution control. This legislation authorized the development of comprehensive federal and state regulations to limit emissions from both stationary (industrial) sources and mobile sources. The Act has been amended and expanded in scope many times since its enactment and remains a major consideration for safely and responsibly conducting business in the U.S. These and countless other similar regulatory and carbon offset programs mandate the need for environmental technologies such as those offered by SEER and its companies. Business Strategy SEER’s operations to date have been fueled by a combination of synergistic and vertical integration, acquisitions, strategic alliances and organic growth. SEER acquired MV as a wholly owned subsidiary. In 2015 SEM was created to produce the media required for MV systems. Cheaper alternatives have arisen in the market and it is no longer profitable to produce in house media. We intend to repurpose the SEM entity and continue pursuing an aggressive strategy of both acquisitions, strategic partnerships, and organic growth while expanding our geographic footprint into other regions of the United States and foreign markets. Potential go-forward strategies include utilizing our wholly-owned SEM entity and developing a biochar production facility in Texas. This facility would not only generate high-margin revenue from the sale of biochar, it would create a recurring stream of valuable biochar carbon credits that can be insured and sold on the international markets. SEER has established strategic partnerships with specialized carbon credits trading companies to assist it in potential sales and SEER will continue to leverage and monetize its patented technologies such a s the V3RU and the CoronaLux™ technologies. We intend to explore licensing relationships with larger, established companies to generate sustainable revenue streams from domestic and international applications. Intellectual Property MV was issued a patent in 2012 related to “Oil-Gas Vapor Collection, Storage, and Recovery System, etc.” Patent No. US 8,206,124 B1. MV was issued a second patent in 2014 titled “Fugitive Gas Capture”, US Patent No. 8,708,663 B1, that expanded claims in the earlier patent. In 2017, MV was issued a third patent titled “Dry Chemical Scrubber with Ph Adjustment” Patent No. US 9,630,144 B2. The patents will expire in 2029 and 2031, unless otherwise extended. MV is in the process of expanding the scope and number of claims of this issued patent. In 2013, PWS filed provisional and non-provisional patent applications in the name and for the benefit of SEER arising out of and related to its waste disposal technology involving a “pyrolytic first phase and a “cold plasma” second phase system referred to as “plasma light,” or CoronaLux™ technology. In October 2014 SEER was issued patent No. 8,870,735 for this CoronaLux™ technology. In 2014, PWS filed a provisional patent related to destruction of volatile organic compounds. A pyrolytic process is basically the decomposition of any material at elevated temperatures in a very low oxygen-containing atmosphere, as compared to conventional incineration or pyrolysis processes. In July 2016 SEER was issued patent No. 9,393,519 for this CoronaLux™ technology. In January 2017 SEER was issued patent No. 9,550,148 for heavy metal control adding to the pollution control aspect of the CoronaLux™ technology. The patents will expire in or around 2033. In July 2022, the Company exchanged its patents and related technology to its joint venture, PSMW, in exchange for units in PSMW. IN or around 2023, those units were sold in a stock-for-stock transaction, and the Company now has a small equity ownership in Amlon Holdings. 6 Competition The industrial services industry is highly competitive. We compete with several small and medium-sized companies in the gas treatment sector. In the face of this competition, we have been effective in maintaining our revenue opportunities due to the wide range of environmental solutions we offer, a competitive pricing structure, our innovative and proprietary/patent-pending technologies, and a reputation for reliability, built over the nearly 25 years of business operations as well as the care we take in performing and completing each customer project. The international medical waste industry is also highly competitive with fewer, but larger businesses in the space and one entity having a dominant position in the industry. In all its businesses, the Company currently holds very small parts of very large and growing markets. MV competes by providing superior hydrogen sulfide (“H2S”) “scrubbing” solutions that result in more cost-effective removal of H2S from process gas streams. H2S is highly corrosive and is a precursor to sulfur dioxide, a highly regulated air pollutant. Therefore, removing H2S from industrial process waste streams is essential to enhance personnel safety, extend the life of industrial equipment, and minimize resulting air pollution. In the markets served by MV there are several competing technologies employed such as: biological scrubbing, chemical scrubbing, and dry scrubbing with activated carbon. PWS competes by offering a unique on-site, on-demand waste destruction solution, eliminating the need for waste segregation, transportation, incineration, autoclaving and/or landfilling; in turn, eliminating all of the associated costs and legacy liabilities associated with current options for medical waste handling. We believe that the patented CoronaLux™ technology results in a superior option in the medical waste management sector and in ultimate emissions cleaner than other solutions available in the market. In July 2022, the Company exchanged its patents and related technology to its joint venture, PSMW, in exchange for units in PSMW which were then sold on a stock-for-stock exchange. Insurance To cover potential risks associated with the variety of services that the operating companies provide, we maintain adequate insurance coverages, including: 1) Casualty Insurance providing coverage for Commercial General Liability, Automotive Liability, Professional Liability Insurance and Employee Benefits Liability in the amounts of $1 million each, respectively, per year; 2) Contractor’s Pollution Liability Insurance, which has limits of $1 million per occurrence and $1 million in the aggregate; and 3) An Excess Umbrella Liability Policy of $5 million per occurrence and $5 million aggregate limit overall. Health, Safety and Compliance Preserving the health and safety of our employees and the communities in which we operate, as well as remaining in compliance with local, state and federal rules and regulations are the highest priorities for us and our companies. We strive to maintain the highest professional standards in our compliance and health and safety activities. To achieve this objective, we engage with a professional safety firm and emphasize comprehensive training programs for new employees as well as ongoing mandatory refresher programs, and safety bonus programs for existing employees. These programs are administered at both the corporate and field levels on a daily basis. Our efforts to ensure the health and safety of employees have been formally recognized by our customers as well as by the Colorado Department of Labor and Employment. Research and Development Research and Development (“R&D”) costs are charged to operations when incurred and are included in operating expenses. R&D expenses consist primarily of salaries, project materials, contract labor and other costs associated with ongoing product development and enhancement efforts. We spent approximately $0 on R&D for the years ended December 31, 2024, and 2023. As the Company brings its organic fertilizer products, Pellechar10™ and Pellechar30™, to market, it plans to allocate a small R&D budget in fiscal year 2025, anticipated to be less than $50,000. 7 Employees As of December 31, 2024, we employed 11 non-union hourly and salaried employees, 2 of which was part-time.