SENR.OTC.PinkStrategic Environmental & Energy Resources, INC
10-Q: SEER Reports Q2 2025 Losses, Going Concern Doubts Persist
Sentiment:
Quarterly Report
Strategic Environmental & Energy Resources, Inc. reported continued losses and a significant working capital deficit, raising substantial doubt about its ability to continue as a going concern.
Delay expectedNumerous secured short-term and long-term notes are past due as of June 30, 2025, with ongoing discussions with lenders for extensions or revised terms.The $500,000 secured short-term note issued on February 1, 2019, was past due as of June 30, 2025.The $100,000 secured short-term note issued on July 2, 2019, was past due as of June 30, 2025.The $150,000 secured short-term note issued on July 18, 2019, was past due as of June 30, 2025.The $300,000 secured short-term note issued on October 17, 2019, was past due as of June 30, 2025.The $450,000 secured short-term note issued on December 14, 2019, was past due as of June 30, 2025.The $100,000 secured short-term note issued on March 16, 2020, was past due as of June 30, 2025.The $50,000 secured short-term note issued on March 17, 2020, was past due as of June 30, 2025.The $220,000 secured short-term note issued on July 8, 2020, was past due as of June 30, 2025.The $120,000 secured short-term note issued on August 18, 2020, was past due as of June 30, 2025.The $280,000 secured short-term note issued on September 3, 2020, was past due as of June 30, 2025.The $500,000 secured short-term note issued on August 15, 2022, was past due as of June 30, 2025.The $100,000 secured short-term note issued on July 20, 2022, was past due as of June 30, 2025.The $500,000 secured long-term note issued on July 13, 2018, was past due as of June 30, 2025.The $350,000 secured short-term note issued on January 20, 2023, was past due as of June 30, 2025.The $300,000 secured short-term note issued on March 10, 2023, was past due as of June 30, 2025.The $200,000 secured short-term note issued on May 16, 2023, was past due as of June 30, 2025.The $150,000 secured short-term note issued on January 31, 2024, was past due as of June 30, 2025.The $30,000 secured short-term note issued on March 27, 2024, was past due as of June 30, 2025.The $200,000 secured short-term note issued on April 12, 2024, was past due as of June 30, 2025.The $100,000 secured short-term note issued on October 30, 2024, was past due as of June 30, 2025.The $12,000 secured short-term note issued on February 21, 2025, was past due as of June 30, 2025.The $150,000 secured short-term note issued on April 25, 2025, was past due as of June 30, 2025.
Capital raiseReceived $9,000 net proceeds from the sale of 200,000 shares of restricted common stock during the six months ended June 30, 2025.Converted 4 million shares of preferred stock into 3.6 million shares of common stock, which also extinguished $225,000 of debt and $8,600 in accrued interest.Received proceeds of $162,000 from the issuance of short-term and long-term debt during the six months ended June 30, 2025.Subsequent to June 30, 2025, received $100,000 from a secured short-term promissory note maturing August 18, 2025.Subsequent to June 30, 2025, received $100,000 from a secured short-term promissory note maturing September 7, 2025.Subsequent to June 30, 2025, received $200,000 from a secured short-term promissory note maturing November 18, 2025.Management is evaluating various forms of financing.
Worse than expectedThe company continues to report significant net losses and an accumulated deficit of $37.2 million.A working capital deficit of $14.0 million and recurring losses raise substantial doubt about the company's ability to continue as a going concern.Cash and cash equivalents decreased by over 67% from December 31, 2024, to June 30, 2025.Net cash used in financing activities shifted from providing cash in the prior year to using cash in the current period.A substantial portion of short-term notes ($4,450,000) are in default, indicating severe liquidity and debt management issues.Disclosure controls and internal control over financial reporting were deemed ineffective, highlighting significant operational weaknesses.
Summary
- Reported a net loss attributable to common stockholders of $576,600 for the three months ended June 30, 2025, an improvement from $674,600 in the prior year period.
- For the six months ended June 30, 2025, the net loss attributable to common stockholders was $1,023,200, consistent with $1,026,800 in the prior year.
- Total revenue increased by 13% to $948,100 for the three months ended June 30, 2025, and by 11% to $2,002,700 for the six months ended June 30, 2025, driven by increased product revenue from more projects.
- Accumulated deficit reached approximately $37.2 million as of June 30, 2025.
- Current liabilities exceeded current assets by approximately $14.0 million as of June 30, 2025.
- The company's disclosure controls and internal control over financial reporting were deemed ineffective.
- Approximately $4,450,000 of short-term notes are in default, along with several other secured notes that are past due.
Sentiment
Score: 2
Explanation: The company faces severe financial distress, including recurring losses, a significant accumulated deficit, a large working capital deficit, and numerous defaulted debt obligations. While revenue increased and net loss slightly improved for the quarter, the overall financial health and going concern warning indicate a highly negative outlook. Ineffective internal controls further exacerbate the negative sentiment.
Positives
- Revenue increased by 13% for the three months ended June 30, 2025, to $948,100, and by 11% for the six months ended June 30, 2025, to $2,002,700, primarily due to increased product revenue from more projects and improved project progress.
- Net loss for the three months ended June 30, 2025, improved to $576,600 from $674,600 in the prior year period.
- Net cash used in operating activities decreased to $187,600 for the six months ended June 30, 2025, from $345,600 in the prior year period.
- General and administrative expenses decreased by 25% for the three months and 12% for the six months ended June 30, 2025.
- Salaries and related expenses decreased by 11% for the three months and 9% for the six months ended June 30, 2025.
Negatives
- The company has experienced recurring losses and has an accumulated deficit of approximately $37.2 million as of June 30, 2025.
- Current liabilities exceeded current assets by approximately $14.0 million as of June 30, 2025, raising substantial doubt about the company's ability to continue as a going concern.
- Cash and cash equivalents decreased significantly from $537,100 at December 31, 2024, to $175,500 at June 30, 2025.
- Net cash used in financing activities was approximately $173,200 for the six months ended June 30, 2025, compared to providing $315,200 in the prior year period.
- Net cash used in investing activities was $800 for the six months ended June 30, 2025, compared to providing $36,800 in the prior year period.
- Approximately $4,450,000 of short-term notes are in default, along with several other secured notes that are past due, incurring significant accrued interest and penalty shares.
- Disclosure controls and procedures were not effective.
- Internal control over financial reporting was not effective as of June 30, 2025.
- The company is in default of its office lease and is not occupying the leased space.
Risks
- Substantial doubt about the company's ability to continue as a going concern due to recurring losses, an accumulated deficit of $37.2 million, and a working capital deficit of $14.0 million.
- Dependence on generating additional revenue or obtaining adequate capital to fund operating losses until profitability is achieved, with no assurance of securing such financing.
- Significant portion of short-term notes ($4,450,000) are in default, along with numerous other secured notes, leading to substantial accrued interest and penalty shares, and potential legal action from lenders.
- Ineffective disclosure controls and internal control over financial reporting, increasing the risk of financial misstatements and regulatory non-compliance.
- Concentration of business with a relatively small number of customers (39% from three customers for the six months ended June 30, 2025) exposes the company to material adverse effects if these customers face financial difficulty or cease business.
- Default on office lease obligations, potentially leading to further liabilities or operational disruptions.
Future Outlook
The company continues to focus on developing organic growth in its operating companies and improving gross and net margins through increased attention to pricing, aggressive cost management, and overhead reductions. Critical to achieving profitability will be the ability to license and/or sell, permit, and operate through its joint ventures. The company has increased business development efforts to address opportunities in expanding markets attributable to increased interest in energy conservation and emission control regulations. It is also evaluating various forms of financing.
Management Comments
- "We continue 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."
- "Critical to achieving profitability will be the ability to license and or sell, permit and operate through the Company's joint ventures."
- "We have increased business development efforts to address opportunities identified in expanding markets attributable to increased interest in energy conservation and emission control regulations."
- "We are evaluating various forms of financing which may be available to us."
- "Although we have not obtained a written waiver(s) or entered into an amendment(s) formally extending or revising debt terms in all instances, the lenders, most of whom are also shareholders, have and are continuing to cooperate with the company in order to resolve the matters in the best interest of all parties."
Industry Context
The company operates in the environmental, waste management, and renewable energy industries, which are experiencing increased interest due to energy conservation and emission control regulations. Its focus on biogas conditioning, waste destruction, and biochar production aligns with growing demand for clean technologies and sustainable solutions. However, the company's severe financial distress, including recurring losses and significant debt defaults, suggests it is not effectively capitalizing on these trends or is facing intense competition and capital constraints within these markets.
Management Changes
| Role | Previous Person | New Person | Effective Date | Reason |
|---|---|---|---|---|
| Interim Chief Financial Officer | NA | Clark Knopik | NA | NA (implied interim status) |
Corporate Governance
| Change Type | Description | Effective Date | Impact Assessment |
|---|---|---|---|
| Internal Control Deficiency | Disclosure controls and procedures were not effective. Internal control over financial reporting was not effective due to failure to engage sufficient resources regarding accounting and reporting obligations during startup and failure to fully document internal control policies and procedures. | June 30, 2025 | Increases risk of financial misstatements and regulatory non-compliance, undermining investor confidence. |
Related Party Transactions
- Short term notes and accrued interest due to certain related parties totaled $229,900 as of June 30, 2025 ($125,000 in notes, $104,900 in accrued interest).
- Lenders for defaulted notes, most of whom are also shareholders, are cooperating with the company to resolve the matters.
Stakeholder Impact
- Shareholders face significant risk of value erosion due to recurring losses, accumulated deficit, going concern doubts, and potential dilution from future capital raises or debt conversions. Existing penalty shares for defaulted debt further dilute ownership.
- Creditors, particularly those with defaulted notes, face high credit risk and potential for non-recovery or delayed recovery of principal and interest.
- Employees may experience job insecurity due to ongoing losses, cost management efforts, and the company's precarious financial position.
- Customers may face potential disruptions in service or product delivery if the company's financial difficulties escalate.
- Suppliers face increased risk of delayed payments or non-payment due to the company's liquidity issues and high accounts payable.
Next Steps
- Focus on developing organic growth in operating companies.
- Improve gross and net margins through increased attention to pricing, aggressive cost management, and overhead reductions.
- License and/or sell, permit, and operate through joint ventures to achieve profitability.
- Increase business development efforts in expanding markets related to energy conservation and emission control regulations.
- Evaluate various forms of financing.
- Continue ongoing discussions with lenders regarding terms and conditions of past-due loans.
- Address ineffective disclosure controls and internal control over financial reporting.
Key Dates
| Date | Description |
|---|---|
| 2002-02-13 | Strategic Environmental & Energy Resources, Inc. (SEER) originally organized under Nevada laws. |
| 2008-01-01 | SOZG changed its name to Strategic Environmental & Energy Resources, Inc. |
| 2018-07-13 | Secured long-term note of $500,000 issued, past due as of June 30, 2025. |
| 2018-09-01 | PelleChar, LLC established. |
| 2019-02-01 | Secured short-term note of $500,000 issued, past due as of June 30, 2025. |
| 2019-07-02 | Secured short-term note of $100,000 issued, past due as of June 30, 2025. |
| 2019-07-18 | Secured short-term note of $150,000 issued, past due as of June 30, 2025. |
| 2019-10-17 | Secured short-term note of $300,000 issued, past due as of June 30, 2025. |
| 2019-12-14 | Secured short-term note of $450,000 issued, past due as of June 30, 2025. |
| 2020-03-16 | Secured short-term note of $100,000 issued, past due as of June 30, 2025. Penalty shares increased for $150,000 note. |
| 2020-03-17 | Secured short-term note of $50,000 issued, past due as of June 30, 2025. |
| 2020-07-08 | Secured short-term note of $220,000 issued, past due as of June 30, 2025. |
| 2020-08-18 | Secured short-term note of $120,000 issued, past due as of June 30, 2025. |
| 2020-09-03 | Secured short-term note of $280,000 issued, past due as of June 30, 2025. |
| 2022-07-20 | PWS transferred patents and technology to Paragon Southwest Medical Waste (PSMW) in exchange for units, increasing SEER's equity in PSMW to 30% and granting an international license. Secured short-term note of $100,000 issued, past due as of June 30, 2025. |
| 2022-08-15 | Secured short-term note of $500,000 issued, past due as of June 30, 2025. |
| 2022-12-17 | SEER and Eco Tadweer (ET) entered into a joint venture, Eco SEER Saudi. |
| 2023-01-01 | Company's board adopted a resolution to discontinue SEM's media production operations. |
| 2023-01-20 | Secured short-term note of $350,000 issued, past due as of June 30, 2025. |
| 2023-03-10 | Secured short-term note of $300,000 issued, past due as of June 30, 2025. |
| 2023-05-16 | Secured short-term note of $200,000 issued, past due as of June 30, 2025. |
| 2023-06-30 | Company exchanged its interest in PSMW for a 2% interest in Amlon Holdings. |
| 2024-01-31 | Secured short-term note of $150,000 issued, past due as of June 30, 2025. |
| 2024-03-27 | Secured short-term note of $30,000 issued, past due as of June 30, 2025. |
| 2024-04-12 | Secured short-term note of $200,000 issued, past due as of June 30, 2025. |
| 2024-10-30 | Secured short-term note of $100,000 issued, past due as of June 30, 2025. |
| 2024-12-31 | End of prior fiscal year. |
| 2025-01-01 | Unsecured note payable of $52,200 issued. |
| 2025-02-21 | Unsecured note payable of $12,000 issued, matured March 21, 2025, past due as of June 30, 2025. |
| 2025-02-28 | 4 million shares of preferred stock converted into 3.6 million shares of common stock, extinguishing $225,000 debt and $8,600 accrued interest. |
| 2025-04-08 | 200,000 shares of restricted common stock sold for $9,000 net proceeds. |
| 2025-04-25 | Unsecured note payable of $150,000 issued, matured June 20, 2025, past due as of June 30, 2025. |
| 2025-06-30 | End of current reporting period. Company in default of office lease. |
| 2025-07-01 | Company received $100,000 from a secured short-term promissory note maturing August 18, 2025. |
| 2025-07-31 | Company received $100,000 from a secured short-term promissory note maturing September 7, 2025. |
| 2025-09-01 | Company received $200,000 from a secured short-term promissory note maturing November 18, 2025. |
| 2025-10-01 | Registrant had 68,698,575 shares outstanding of common stock. |
| 2025-10-02 | Date of filing of this 10-Q report. |
Recommendation
strong sellThe company is in severe financial distress, evidenced by recurring losses, a substantial accumulated deficit, a significant working capital deficit, and an explicit 'going concern' warning. Numerous debt obligations are in default, and cash reserves are rapidly depleting. While revenue saw a modest increase, it is insufficient to offset the deep operational losses and debt burden. The ineffective internal controls further highlight fundamental weaknesses. The risk of bankruptcy or significant shareholder dilution is extremely high, making this a highly speculative and dangerous investment.
Keywords
Environmental Technology, Waste Management, Renewable Energy, Biogas, Biochar, SEC Filing, 10-Q, Financial Results, Going Concern, Debt Default, Clean Technology, Corporate Governance
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