10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10 - Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2017

OR

☐      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________________________

000-54987

(Commission File Number)

Strategic Environmental & Energy Resources, Inc.

(Exact name of registrant as specified in its charter)

Nevada	02-0565834
(State or other jurisdiction of incorporation)	(IRS Employer Identification Number)

751 Pine Ridge Road, Golden, CO 80403

(Address of principal executive offices including zip code)

303-277-1625

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes  ☒   No  ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Date File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files).    Yes  ☒   No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “small reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes  ☐   No  ☒

As of April 30, 2017 the Registrant had 54,538,575 shares outstanding of its $.001 par value common stock.

Strategic Environmental & Energy Resources, Inc.

Quarterly Report on FORM 10-Q For The Period Ended

March 31, 2017

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets as of March 31, 2017 (unaudited) and December 31, 2016	3
	Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2017 and 2016 (unaudited)	4
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2017 and 2016 (unaudited)	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4.	Controls and Procedures	27
PART II.  OTHER INFORMATION
Item 1.	Legal Proceedings	27
Item 1A.	Risk Factors	27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27
Item 3.	Defaults Upon Senior Securities	28
Item 4.	Mine Safety Disclosures	28
Item 5.	Other Information	28
Item 6.	Exhibits	29
SIGNATURES		30

2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31, 2017			December 31, 2016
	Unaudited			*
ASSETS
Current assets:
Cash	$	342,600		$	233,200
Accounts receivable, net of allowance for doubtful accounts
of $300,500 and $300,500, respectively		2,273,600			2,029,900
Costs and estimated earnings in excess billings on uncompleted contracts		—			13,600
Prepaid expenses and other current assets		1,033,800			535,900
Total current assets		3,650,000			2,812,600
Property and equipment, net		2,795,800			2,961,300
Intangible assets, net		712,900			738,000
Other assets		25,600			25,600
TOTAL ASSETS	$	7,184,300		$	6,537,500
LIABILITIES & STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	2,338,800		$	2,158,500
Accrued liabilities		1,462,900			1,469,100
Billings in excess of costs and estimated earnings on uncompleted contracts		956,500			1,090,800
Deferred revenue		188,300			188,300
Payroll taxes payable		999,000			993,300
Customer deposits		330,000			330,000
Current portion of notes payable and capital lease obligations		1,280,300			571,800
Notes payable - related parties, including accrued interest		11,800			11,800
Total current liabilities		7,567,600			6,813,600
Deferred revenue, non-current		236,500			283,600
Notes payable and capital lease obligations, net of current portion		1,749,500			1,751,500
Total liabilities		9,553,600			8,848,700
Commitments and contingencies
Stockholders’ Equity):
Preferred stock; $.001 par value; 5,000,000 shares authorized; -0- shares issued
Common stock; $.001 par value; 70,000,000 shares authorized; 55,038,575 and		55,000			54,500
54,525,079 shares issued, issuable** and outstanding 2017 and 2016, respectively
Common stock subscribed		25,000			25,000
Additional paid-in capital		19,438,900			19,077,600
Stock subscription receivable		(25,000	)		(25,000	)
Accumulated deficit		(19,642,200	)		(19,273,500	)
Total stockholders’ equity		(148,300	)		(141,400	)
Non-controlling interest		(2,221,000	)		(2,169,800	)
Total equity		(2,369,300	)		(2,311,200	)
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		7,184,300		$	6,537,500

*These numbers were derived from the audited financial statements for the year ended December 31, 2016.   See accompanying notes

**Includes 500,000 shares issuable at March 31, 2017 per terms of short-term note agreements.

3

STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	For the Three Months Ended March 31,
	2017			2016
Revenue:
Products	$	1,689,000		$	572,800
Services		2,436,000			2,860,100
Solid waste		69,300			71,600
Total revenue		4,194,300			3,504,500
Operating expenses:
Products costs		1,178,400			368,100
Services costs		1,789,500			1,690,300
Solid waste costs		57,300			103,900
General and administrative expenses		568,200			570,000
Salaries and related expenses		587,800			690,700
Total operating expenses		4,181,200			3,423,000
Income (loss) from operations		13,100			81,500
Other income (expense):
Interest expense		(427,100	)		(47,700	)
Other		(5,900	)		13,000
Total non-operating expense, net		(433,000	)		(34,700	)
Net income (loss)		(419,900	)		46,800
Less:  Net loss attributable to non-controlling interest		(51,200	)		(82,600	)
Net income attributable to SEER common stockholders	$	(368,700	)	$	129,400
Net loss per share, basic and diluted	$	(0.01	)		*
Weighted average shares outstanding – basic and diluted		54,532,727			52,593,211

• Less than $(.01) per share

See accompanying notes.

4

STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)

	For the Three Months Ended March 31,
Cash flows from operating activities:	2017			2016
Net income (loss)	$	(419,900	)	$	46,800
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		191,900			194,300
Stock-based compensation expense		17,000			29,600
Non-cash expense for interest, common stock issued for debt penalty		345,000			—
Non-cash expense for interest, warrants – accretion of debt discount		1,600			1,200
Gain on disposition of assets		—			(12,800	)
Changes in operating assets and liabilities:
Accounts receivable		(243,700	)		(380,700	)
Costs in Excess of billings on uncompleted contracts		13,600			111,400
Prepaid expenses and other assets		(59,600	)		146,900
Accounts payable and accrued liabilities		174,100			156,200
Billings in excess of revenue on uncompleted contracts		(134,300	)		26,900
Deferred revenue		(47,100	)		(4,600	)
Payroll taxes payable		5,700			5,700
Net cash provided by operating activities		(155,700	)		320,900
Cash flows from investing activities:
Insurance proceeds from property damage		—			39,300
Purchase of property and equipment		(1,300	)		(136,700	)
Purchase of intangibles		—			(20,300	)
Net cash used in investing activities		(1,300	)		(117,700	)
Cash flows from financing activities:
Payments of notes payments and capital lease obligations		(183,600	)		(124,500	)
Payments of related party notes payable and accrued interest		—			(20,000	)
Proceeds from short-term notes		450,000			25,000
Proceeds from warrant extensions		—			22,000
Proceeds from the sale of common stock and warrants, net of expenses		—			300,000
Net cash provided by (used in) financing activities		266,400			202,500
Net increase in cash		109,400			405,700
Cash at the beginning of period		233,200			257,100
Cash at the end of period	$	342,600		$	662,800
Supplemental disclosures of cash flow information:
Cash paid for interest	$	12,400		$	33,400
Financing of prepaid insurance premiums	$	438,300		$	278,600

See accompanying notes.

5

STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 1 - ORGANIZATION AND FINANCIAL CONDITION

Organization and Going Concern

Strategic Environmental & Energy Resources, Inc. (“SEER,” “we,” or the “Company”), a Nevada corporation, is a provider of next-generation clean-technologies, waste management innovations and related services. SEER has four wholly-owned operating subsidiaries and two 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 four wholly-owned subsidiaries include: 1) REGS, LLC (d/b/a Resource Environmental Group Services (“REGS”)) provides industrial and proprietary cleaning services to refineries, oil fields and other private and governmental entities; 2) Tactical Cleaning Company, LLC (“Tactical”), provides proprietary cleaning services related to railcar tankers, tank trucks and frac tanks to customers from its sites in Colorado and Kansas; 3) MV, LLC (d/b/a MV Technologies) (“MV”), designs and builds biogas conditioning solutions for the production of renewable natural gas and odor control systems primarily for landfill operations, waste-water treatment facilities, oil and gas fields, refineries, municipalities and food, beverage & agriculture operations throughout the U.S.; 4) SEER Environmental Materials, LLC,(“SEM”), a materials technology company focused on development of cost-effective chemical absorbents.

The two majority-owned subsidiaries are; 1) Paragon Waste Solutions, LLC (“PWS”) and 2) ReaCH4Biogas (“Reach”). PWS is currently owned 54% by SEER (see Note 7) and Reach is owned 85% by SEER.

PWS is developing 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, 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 many others.

Reach (the trade name for BeneFuels, LLC), is currently owned 85% by SEER and focuses specifically on developing renewable biomethane projects that convert raw biogas to pipeline quality gas and/or compressed natural gas (“CNG”) for fleet vehicle fuel. Reach had minimal operations for the quarter ended March 31, 2017 and 2016.

Principals of Consolidation

The accompanying consolidated financial statements include the accounts of SEER, its wholly-owned subsidiaries, REGS, TCC, MV and SEM and its majority-owned subsidiaries PWS and Reach, 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 $19.6 million as of March 31, 2017, and $19.3 million as of December 31, 2016. For the three months ended March 31, 2017 we had net loss before adjustment for losses attributable to non-controlling interest of approximately $419,900 and for the year ended December 31, 2016, we incurred net losses before adjustment for losses attributable to non-controlling interest of approximately $4.7 million. The Company had a working capital deficit of approximately $3.9 million at March 31, 2017, an improvement of approximately $100,000 in the working capital deficit of $4 million at December 31, 2016. REGS, a wholly owned subsidiary, was notified that effective April 1, 2016 it would no longer be providing routine maintenance services to its largest customer but would still be eligible to provide other industrial cleaning services. The loss of revenue from this customer was approximately $2.5 for the year ended December 31, 2016. 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 December 31, 2016.

6

STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 1 - ORGANIZATION AND FINANCIAL CONDITION, continued

Going Concern, continued

Realization of a major portion of our assets as of March 31, 2017 and December 31, 2016, 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. The Company opened an additional rail car cleaning facility in the Midwest (Illinois) and East Coast (Maryland) during 2016 to offset some of the lost revenue previously derived from the refinery sector. Revenue from the new rail car cleaning facilities began in mid-2016 (Illinois) and fourth quarter of 2016 (Maryland) and both locations are experiencing monthly revenue growth for the three months ending March 31, 2017. In addition, we have undertaken a number of specific steps to improve operating efficiencies, revenues and income to continue to operate as a going concern. 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 our ability to license and or sell, permit and operate our CoronaLux™ waste destruction units either though our joint ventures and/or licensees. We have increased our business development efforts to address opportunities identified in expanding markets attributable to increased interest in energy conservation and emission control regulations, particularly the landfill gas and oil field emissions sectors. In addition, the Company is evaluating various forms of financing which may be available to it, i.e., debt and/or equity financing while carefully evaluating the impact on share dilution. 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 of 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 14, 2017 for the years ended December 31, 2016 and 2015.

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 carrying amount of intangible assets; valuation allowances and reserves for receivables and 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.

7

STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued

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 income (loss). 

Revenue Recognition

We recognize revenue related to contract projects and services when all of the following criteria are met: (i) persuasive evidence of an agreement exists, (ii) delivery has occurred or services have been rendered, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured. Our revenue is primarily comprised of services related to industrial cleaning and railcar cleaning, which we recognize as services are rendered.

Product revenue generated from projects, which include the manufacturing of products, for removal and treatment of hazardous vapor and gasses is accounted for under the percentage-of-completion method for projects with durations in excess of three months and the completed-contract method for all other projects. 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, we 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 percentage-of-completion method, we recognize revenue primarily based on the ratio of costs incurred to date to total estimated contract costs. 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.

For contracts accounted for under the percentage-of-completion method, we include in current assets and current liabilities amounts related to construction 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. Billings in excess of costs and estimated earnings on uncompleted contracts represents the excess of billings to date over the amount of contract costs and profits recognized to date, and are recognized as a current liability.

The Company’s revenues from waste destruction licensing agreements are recognized as a single accounting unit over the term of the license.  In accordance with Accounting Standards Codification (“ASC”) 605, for revenues which contain multiple deliverables, the Company separates the deliverables into separate accounting units if they meet the following criteria: (i) the delivered items have a stand-alone value to the customer; (ii) the fair value of any undelivered items can be reliably determined; and (iii) if the arrangement includes a general right of return, delivery of the undelivered items is probable and substantially controlled by the seller.  Deliverables that do not meet these criteria are combined with one or more other deliverables into one accounting unit.  Revenue from each accounting unit is recognized based on the applicable accounting literature, primarily ASC 605.

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 $600 and $48,500 for the three months ended March 31, 2017 and 2016, respectively.

8

STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

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, 2017 and 2016 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 at March 31, 2017 and December 31, 2016. 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, 2015. The tax periods for the years ending December 31, 2009 through 2015 are open to examination by federal and state authorities.

Recently issued accounting pronouncements

Changes to accounting principles generally accepted in the United States of America (U.S. GAAP) are established by the Financial Accounting Standards Board (FASB) in the form of accounting standards updates (ASU’s) to the FASB’s Accounting Standards Codification. The Company considers the applicability and impact of all new or revised ASU’s. 

NOTE 3 - PROPERTY AND EQUIPMENT

Property and equipment was comprised of the following:

	March 31, 2017			December 31, 2016
Field and shop equipment	$	2,292,700		$	2,292,700
Vehicles		689,700			689,700
Waste destruction equipment, placed in service		1,355,400			1,355,400
Waste destruction equipment, not placed in service		656,200			656,200
Furniture and office equipment		326,600			325,300
Leasehold improvements		65,400			65,400
Building and improvements		21,200			21,200
Land		162,900			162,900
		5,570,100			5,568,800
Less: accumulated depreciation and amortization		(2,774,300	)		(2,607,500	)
Property and equipment, net	$	2,795,800		$	2,961,300

Depreciation expense for the three months ended March 31, 2017 and 2016 was $166,700 and $171,500, respectively. For the three months ended March 31, 2017 depreciation expense included in cost of goods sold and selling, general and administrative expenses was $142,400 and $24,300 respectively. For the three months ended March 31, 2016 depreciation expense included in cost of goods sold and selling, general and administrative expenses was $147,300 and $24,200, respectively.

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STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

Accumulated depreciation on leased CoronaLux™ units included in accumulated depreciation and amortization above is $335,875 and $206,300 for the three months ended March 31, 2017 and 2016, respectively.

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

	March 31,			December 31
	2017			2016
Vehicles, field and shop equipment	$	462,700		$	462,700
Less: accumulated amortization		(246,200	)		(222,800	)
	$	216,500		$	239,900

NOTE 4 – INTANGIBLE ASSETS

Intangible assets were comprised of the following:

	March 31, 2017
	Gross carrying amount		Accumulated amortization			Net carrying value
Goodwill	$	277,800		—		$	277,800
Customer list		42,500		(42,500	)		—
Technology		1,069,500		(634,400	)		435,100
Trade name		57,300		(57,300	)		—
	$	1,447,100	$	(734,200	)	$	712,900

	December 31, 2016
	Gross carrying amount		Accumulated amortization			Net carrying value
Goodwill	$	277,800		—		$	277,800
Customer list		42,500		(42,500	)		—
Technology		1,069,500		(609,300	)		460,200
Trade name		57,300		(57,300	)		—
	$	1,447,100	$	(709,100	)	$	738,000

The estimated useful lives of the intangible assets range from seven to ten years. Amortization expense was $25,100 and $22,800 for the three months ended March 31, 2017 and 2016, respectively.

NOTE 5 - ACCRUED LIABILITIES

Accrued liabilities were comprised of the following:

	March 31, 2017		December 31, 2016
Accrued compensation and related taxes	$	644,000	$	644,800
Accrued interest		121,500		58,900
Accrued litigation claims		219,300		277,500
Other		478,100		487,900
Total Accrued Liabilities	$	1,462,900	$	1,469,100

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STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 6 - UNCOMPLETED CONTRACTS

Costs, estimated earnings and billings on uncompleted contracts are as follows:

	March 31,			December 31,
	2017			2016
Revenue Recognized	$	1,184,968		$	324,500
Less: Billings to date		(1,184,968	)		(310,900	)
Costs and estimated earnings in excess of billings on uncompleted contracts	$	—		$	13,600
Billings to date	$	2,141,468		$	3,063,500
Revenue recognized		(1,184,968	)		(1,972,700	)
Billings in excess of costs and estimated earnings on uncompleted contracts	$	956,500		$	1,090,800

NOTE 7– INVESTMENT IN PARAGON WASTE SOLUTIONS LLC

In 2010, the Company and Black Stone Management Services, LLC (“Black Stone”) formed PWS, whereby a total of 1,000,000 membership units were issued, 600,000 membership units to the Company and 400,000 membership units to Black Stone. Fortunato Villamagna, who serves as President of our PWS subsidiary, is a managing member and Chairman of Black Stone. In June 2012, the Company and Blackstone each allocated 10% of their respective membership units in PWS to Mr. J John Combs III, an officer and shareholder of the Company and Mr. Michael Cardillo, a shareholder of the Company and an officer of a subsidiary. There was no value attributable to the units at the time of the allocation. At March 31, 2017 and December 31, 2016 the Company owned 54% of the membership units, Black Stone owned 26% of the membership units, an outside third party 10% of the membership units and two related parties (as noted above), each owned 5% of the membership units.

In August, 2011, we acquired certain intellectual property in regards to waste destruction technology (the “IP”) from Black Stone in exchange for 1,000,000 shares of our common stock valued at $100,000. We estimated the useful life of the IP at ten years, which was consistent with the useful life of other technology included in our intangible assets, and management’s initial assessment of the potential marketability of the IP.

Since its inception through March 31, 2017, we have provided approximately $5.7 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 that we will provide the funding as an advance against future earnings distributions made by PWS.

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STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 7– INVESTMENT IN PARAGON WASTE SOLUTIONS LLC, continued

Licensing Agreements

In 2014, Sterall ordered a total of six CoronaLux™ units, of which one unit was delivered during the year ending December 31, 2014, and five units are pending delivery at March 31, 2017. Sterall paid a non-refundable placement fee of $236,300 for the unit delivered in 2014. The fee is being recognized over the term of the agreement. Sterall also has paid a deposit of $330,000 for the five units ordered and a balance of $851,500 is still owed and has been fully reserved by the Company.

On February 22, 2014, SEER and PWS entered into an Agreement with Daniel McAteer & Associates (“DMA”) to develop, permit and exploit the PWS waste destruction technology in Ireland and United Kingdom (“Limited Territory”). The Agreement called for the formation of a Joint Venture to be owned 50% by SEER and 50% by DMA. In accordance with the agreement, DMA was to pay a one-time license fee of $350,000 for an exclusive license for the limited purpose of medical waste destruction in the Limited Territory. On June 10, 2014 Paragon Waste (UK) Ltd (“Paragon UK”, “UK Joint Venture”), was formed in accordance with the laws of Northern Ireland. A total of 300,100 shares were issued upon formation, 100 Ordinary A voting shares were issued, of which PWS received 50 Ordinary A shares and 300,000 Ordinary B non-voting shares were issued. In 2015, the Agreement with DMA was amended to where Paragon UK purchased the CoronaLux™ unit from PWS for $350,000. 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. As of March 31, 2017 a balance of $176,000 is still owed and has been fully reserved by the Company.

On March 4, 2014, PWS entered into a Licensing and Equipment Lease Agreement with eCycling International of South Carolina, LLC (“eCycling”). The License Agreement grants to eCycling the use of the PWS Technology and the CoronaLux™ waste destruction units for an initial term of five years and requires a payment of $176,875 as a non-refundable initial licensing fee and distributions of 50% of net operating profits, as defined in the agreement, in lieu of continuing royalty payments for the use of the licensed technology. eCycling originally paid the $176,875 placement fee to PWS and an additional $176,875 per the amended agreement during the year ended December 31, 2016 and the revenue is being recognized over the term of the Agreement. eCycling is still in the process of permitting the unit, and therefore, has not yet generated any NOP.

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STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 7– INVESTMENT IN PARAGON WASTE SOLUTIONS LLC, continued

On November 17, 2014, PWS entered into an Exclusive Licensing and Equipment Lease Agreement, for a limited license territory, with Medical Waste Services, LLC (“MWS”). The License Agreement grants to MWS the use of the PWS Technology and the CoronaLux™ waste destruction units for an initial term of seven years and requires a payment of $225,000 as a non-refundable initial licensing fee and distributions of 50% of net operating profits, as defined in the agreement, in lieu of continuing royalty payments for the use of the licensed technology. PWS and Medical Waste Services, LLC (“MWS”) formed a contractual joint venture to exploit the PWS medical waste destruction technology. MWS has received approval from the California Department of Public Health and a restricted permit from the South Coast Air Quality Management District (“SCAQMD”) to operate the CoronaLux™ unit licensed by MWS at its facility in Southern California. Operations to date have included the destruction of medical waste under a temporary operating permit issued by SCAQMD since May 2015 and efforts to obtain a full operating permit from SCAQMD were successful and SCAQMD issued a ‘Notice of Intent to Issue Permit to Operate’ in March 2017.

In February 2015, PWS entered into a License Agreement with Particle Science Tech of Environmental Protection, Inc (“Particle”) a US subsidiary of Xinhua Energy Environmental Technology Co., Ltd (“Xinhua”), a large multi-national environmental company based in China. The agreement provides for the exclusive rights to distribute PWS’s patented technology in China, Hong Kong, Macau and the Taiwan territories (“Territory”). The grant was for both the medical waste, as well as the refinery vertical markets within the Territory. The Agreement calls for, among other things, the formation of a U.S. joint venture company, (“P&P Company”), to be owned 50/50 by PWS and Particle) and an obligation by Xinhua to fund all necessary and reasonable capital requirements to permit and roll out the PWS technology in the Territory as well as staff and manage the JV Entity’s operations. In 2015, PWS sold a CoronaLux™ unit to Xinhua for $430,500.

Upon the occurrence of certain events and timely performance by Xinhua, a second placement fee of $350,000 is required to be paid and, upon that second payment, it will then be granted exclusive manufacturing rights to produce the units to be deployed in the Territory.

Payments received for non-refundable licensing and placement fees have been recorded as deferred revenue in the accompanying consolidated balance sheets at March 31, 2017 and December 31, 2016 and are recognized as revenue ratably over the term of the contract.

NOTE 8 - PAYROLL TAXES PAYABLE

In 2009 and 2010, REGS, a subsidiary of the Company, became delinquent for unpaid federal employer and employee payroll taxes, accrued interest and penalties were incurred related to these unpaid payroll taxes.

Two of the officers of REGS also have personal liability exposure for a portion of the taxes if REGS does not pay them.

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STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 8 - PAYROLL TAXES PAYABLE, continued

In May 2013, REGS filed an Offer in Compromise (“OIC”) with the IRS. While the OIC was under review by the IRS, the requirement to pay $25,000 a month under the Installment Plan was suspended. REGS was informed by its legal counsel that the IRS had accepted REGS’ OIC. However by a letter dated March 27, 2014, REGS was notified that the OIC had been rejected. REGS then appealed that rejections decision. However that appeal has been denied. As a result, the Installment Plan is terminated. In June 2014, REGS received notices of intent to levy property or rights to property from the IRS for the amounts owed for the past due payroll taxes, penalty and interest. The IRS has not taken any current action against REGS and REGS continues to be represented by its legal counsel.

As of March 31, 2017 and December 31, 2016, the outstanding balance due to the IRS was $976,200, and $970,500, respectively.

Other than this outstanding payroll tax matter arising in 2009 and 2010, all state and federal taxes have been paid by REGS in a timely manner.

NOTE 9 – DEBT

Debt as of March 31, 2017 and December 31, 2016, was comprised of the following:

	2017	2016
Convertible notes payable, interest at 8% per annum, unpaid principal and interest maturing 3 years from note date between August 2018 and October 2019 , convertible into common stock at the option of the lenders at a rate of $0.70 per share; one convertible note for $250,000 has a personal guarantee of an officer of the Company	1,605,000	1,605,000
Debt discount on convertible notes	(13,200)	(14,900)
Secured short term note payable dated October 24, 2016 with principal and interest due 60 days from issuance.  The note requires a one-time fee in the amount of $10,000 to compensate for the first two weeks of the term and each week thereafter (weeks 3-8) a fee of $1,000 shall be due and owing accruing on the first day of the week.  A fee of 100,000 shares of restricted common stock shall be issued as a penalty for each month or prorated for any two-week portion of any month the note is outstanding for months 3 through 6, and a fee of 200,000 shares of restricted common stock shall be issued to lender for each month or prorated for each two-week portion of any month the note is outstanding beginning in month 7 until paid in full. The note is secured by specific customer accounts receivables and a personal guarantee of an officer of the Company.  This note was paid in full in April 2017.  The penalty period for shares to be issued has been reached and for the three months ended March 31, 2017, the Company recorded 300,000 shares of its common stock as issuable under the terms of this agreement. The shares were valued at $210,000 recorded as interest expense. Additional shares will be issued by the Company under the terms of the agreement.	200,000	200,000

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STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

Secured short term note payable dated December 1, 2016 with principal and interest due 60 days from issuance.  The note requires a one-time fee in the amount of $10,000 to compensate for the first two weeks of the term and each week thereafter (weeks 3-8) a fee of $1,000 shall be due and owing accruing on the first day of the week.  A fee of 100,000 shares of restricted common stock shall be issued as a penalty for each month or prorated for any two-week portion of any month the note is outstanding for months 3 through 6, and a fee of 200,000 shares of restricted common stock shall be issued to lender for each month or prorated for each two-week portion of any month the note is outstanding beginning in month 7 until paid in full. The note is secured by specific customer accounts receivables and a personal guarantee of an officer of the Company. The penalty period for shares to be issued has been reached and for the three months ended March 31, 2017, the Company recorded 200,000 shares of its common stock as issuable under the terms of this agreement. The shares were valued at $135,000 recorded as interest expense. Additional shares will be issued by the Company under the terms of the agreement.	200,000	200,000
Secured short term note payable dated January 23, 2017 with principal and interest due 60 days from issuance.  The note requires a one-time fee in the amount of $10,000 to compensate for the first two weeks of the term and each week thereafter (weeks 3-8) a fee of $1,000 shall be due and owing accruing on the first day of the week.  A fee of 100,000 shares of restricted common stock shall be issued as a penalty for each month or prorated for any two-week portion of any month the note is outstanding for months 3 through 6, and a fee of 200,000 shares of restricted common stock shall be issued to lender for each month or prorated for each two-week portion of any month the note is outstanding beginning in month 7 until paid in full. The note is secured by specific customer accounts receivables and a personal guarantee of an officer of the Company. The penalty period for shares to be issued has been reached, however, no shares have yet been issued.	200,000	—
Secured short term note payable dated March 30, 2017 with principal and interest due 60 days from issuance.  The note requires a one-time fee in the amount of $10,000 to compensate for the first two weeks of the term and each week thereafter (weeks 3-8) a fee of $1,000 shall be due and owing accruing on the first day of the week.  A fee of 100,000 shares of restricted common stock shall be issued as a penalty for each month or prorated for any two-week portion of any month the note is outstanding for months 3 through 6, and a fee of 200,000 shares of restricted common stock shall be issued to lender for each month or prorated for each two-week portion of any month the note is outstanding beginning in month 7 until paid in full. The note is secured by specific customer accounts receivables and a personal guarantee of an officer of the Company. The penalty period for shares to be issued has not been reached.	250,000	—
Note payable dated October 13, 2015, interest at 8% per annum, payable in 24 monthly installments of principal and interest $4,523, due October 1, 2017.   Secured by certain assets of SEM and guaranteed by SEER and MV	30,800	43,600
Note payable dated October 13, 2015, interest at 8% per annum, payable in 60 monthly installments of principal and interest $4,562, due October 1, 2020.   Secured by real estate and other assets of SEM and guaranteed by SEER and MV	169,800	180,000
Note payable insurance premium financing, interest at 4.25% per annum, payable in 10 installments of $44,706, due November 1, 2017	306,400	—
Capital lease obligations, secured by certain assets, maturing through March 2019	81,000	109,600
Total notes payable and capital lease obligations	3,029,800	2,323,300
Less:  current portion	(1,280,300)	(571,800)
Notes payable and capital lease obligations, long-term, including debt discount	$  1,749,500	$  1,751,500

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STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 10 – RELATED PARTY TRANSACTIONS

Notes payable, related parties

Related parties accrued interest due to certain related parties as of March 31, 2017 and December 31, 2016 are as follows:

	2017		2016
Accrued interest	$	11,800	$	11,800
	$	11,800	$	11,800

We believe the stated interest rates on the related party notes payable represent reasonable market rates based on the note payable arrangements we have executed with third parties.

In March 2012, the Company entered into an Irrevocable License & Royalty Agreement with PWS that grants PWS an irrevocable world-wide license to the IP in exchange for a 5% royalty on all revenues from PWS and its affiliates. The term shall commence as of the date of this Agreement and shall continue for a period not to exceed the life of the patent or patents filed by the Company. PWS may sub license the IP and any revenue derived from sub licensing shall be included in the calculation of Gross Revenue for purposes of determining royalty payments due the Company. Royalty payments are due 30 days after the end of each calendar quarter. PWS generated licensing revenues of approximately $47,100 for the three months ended March 31, 2017 and $156,500 for the year ended December 31, 2016, as such, royalties of approximately $19,600 and $17,200 were due at March 31, 2017 and December 31, 2016, respectively.

In August 2014, the Company entered into a second Exchange and Acquisition Agreement (“New Technologies Agreement”) with Black Stone for the acquisition of additional intellectual property (“IP”) from Black Stone in exchange for 1,000,000 shares of common stock valued at $1,050,000. In 2015 the Company and Black Stone executed a rescission agreement of the New Technologies Agreement noted above that was effective December 31, 2014. The shares issued by the Company in accordance with the agreement were returned and all acquired IP returned to Black Stone.

In September 2014, the Company entered into an Equity Purchase Agreement (“Equity Agreement”) with a third party (“Seller”) whereby the Company issued 1,200,000 shares of the Company’s common stock, valued at $1,212,000, in exchange for 22.5 membership interest units, representing 15% ownership interest in Sterall, LLC, a Delaware corporation. In March 2015 the Company and the Seller entered into a revised agreement whereby the 1,200,000 shares issued by the Company would be held by the Seller until the completion of an independent third party valuation. Based on the fair market value of the Purchased Units from the valuation obtained by the Company, an amount of Consideration Shares will be returned to the Company to the extent that the fair market value of the Consideration Shares issued (see below) are greater than the fair market value of the Purchased Units. In no event shall the Company be obligated to issue additional shares as consideration for the Purchased Units. For purposes of this amendment, the fair market value of each Consideration Share will be $0.83333. In the event the parties are unwilling to accept the fair market value of the Purchased Units, as determined by the independent valuation specialist, on or before the Closing Date this Agreement, the transaction covered by this Agreement (the “Contemplated Transaction”) may be rescinded by either Party in writing.

In December 2014, PWS, Sterall, Inc and Sterall LLC entered into a Successor-In-Interest Agreement. The Successor-In-Interest Agreement states that Sterall Inc and Sterall LLC are in the process of consolidating their business under Sterall LLC and all agreements between PWS and Sterall Inc shall be binding in all regards Sterall LLC.

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. Operations to date have included the destruction of medical waste. For the three months ended March 31, 2017 and the year ended December 31, 2016, PWS has recorded $6,200 and $15,700 in income which represents their 50% interest in the net income of the joint venture, respectively. In addition, for the three months ended March 31, 2017 and the year ended December 31, 2016, PWS billed the joint venture approximately $16,000 and $68,000 in costs incurred on behalf of the joint venture, respectively.

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STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

Due to the ability of the Company to rescind the shares issued at the commencement of the transaction the shares were considered contingently issuable shares and as such the 1,200,000 share not considered issued and outstanding at December 31, 2015. The 15% ownership interest in Sterall was considered contingently held until the conclusion of this transaction.

As of December 31, 2015 an independent appraisal was not performed and the Amended Equity Agreement expired by its terms. The 1,200,000 shares subject to the original Equity Agreement and the Amended Equity Agreement became unrestricted in 2016 and are now considered issued and outstanding. The shares were valued at $720,000 and have been recorded as a long term other asset pending resolution of claims by the parties involved related to the Sterall licensing agreement from September 2013, Sterall equipment deposits of $330,000 from 2014 and the equity purchase agreement noted above. As of December 31, 2016, a settlement has not been reached by the parties however, they continue to negotiate an agreement and an impairment of the long term asset in the amount of $720.000 was recorded by the Company.

NOTE 11 – EQUITY TRANSACTIONS

2017

During the three months ended March 31, 2017, the Company recorded 500,000 shares of $.001 par value common stock as issuable to short-term note holders as required under their respective agreements. (See Note 9)

During the three months ended March 31, 2017, the Company issued 13,496 shares of its $.001 par value common stock upon the cashless exercise of 166,666 common stock options.

During the three months ended March 31, 2017, the Company issued an option to purchase 1,000,000 shares of its $.001 par value common stock at a strike price of $1.00 to Richard Robertson in connection with his employment agreement dated January 9, 2017. At the date of issuance 100,000 shares vested immediately and the remaining 900,000 options vest over a period of four years in a series of 16 successive equal quarterly installments of 56,250 commencing March 31, 2017 and ending December 31, 2020. The Company used the Black Scholes option pricing model to estimate the fair value of the options granted at $102,354. The assumptions used in calculating such value include a risk-free interest rate of 1.89%, expected volatility of 36.87%, an expected life of 5.5 years and a dividend rate of 0. 

2016

During the three months ended March 31, 2016, the Company sold 600,000 shares of $.001 par value common stock at $.50 per share in a private placement, receiving proceeds of $300,000.

During the three months ended March 31, 2016, the Company issued 50,000 shares of its $.001 par value common stock upon exercise of common stock warrants receiving proceeds of $25,000.

Non-controlling Interest

The non-controlling interest presented in our condensed consolidated financial statements reflects a 46% non-controlling equity interest in PWS (see Note 7). Net loss attributable to non-controlling interest, as reported on our condensed consolidated statements of operations, represents the net loss of PWS attributable to the non-controlling equity interest. The non-controlling interest is reflected within stockholders’ equity on the condensed consolidated balance sheet.

NOTE 12 – CUSTOMER CONCENTRATIONS

The Company had sales from operations to two customers and one customer for the three months ended March 31, 2017 and 2016 that represented approximately 25% and 55%, respectively, of our total sales. 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 customer for non-financial related issues.

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STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 13 – NET LOSS PER SHARE

Basic net loss per share is computed by dividing net loss attributable to common shareholders by the weighted average number of common shares outstanding. Diluted net 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 all years presented in the consolidated financial statements, all potentially dilutive securities have been excluded from the diluted share calculations as they were anti-dilutive as a result of the net losses incurred for the respective years. Accordingly, basic shares equal diluted shares for all years presented.

Potentially dilutive securities were comprised of the following:

	Three Months Ended March 31,
	2017		2016
Warrants		9,665,400		9,314,400
Options		1,190,000		1,055,000
Convertible notes payable, including accrued interest		2,384,300		1,136,400
Contingently issuable shares, Sterall LLC		—		1,200,000
		13,239,700		12,705,800

NOTE 14 - ENVIRONMENTAL MATTERS AND REGULATION

Significant federal environmental laws affecting us are the Resource Conservation and Recovery Act (“RCRA”), the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), also known as the “Superfund Act”, the Clean Air Act, the Clean Water Act and the Toxic Substances Control Act (“TSCA”).

Pursuant to the EPA’s authorization of the RCRA equivalent programs, a number of states have regulatory programs governing the operations and permitting of hazardous waste facilities. Our facilities are regulated pursuant to state statutes, including those addressing clean water and clean air. Our facilities are also subject to local siting, zoning and land use restrictions. We believe we are in substantial compliance with all federal, state and local laws regulating our business.

NOTE 15 - SEGMENT INFORMATION AND MAJOR CUSTOMERS

The Company currently has identified four segments as follows:

REGS	Industrial Cleaning
Tactical	Rail Car Cleaning
MV and SEM	Environmental Solutions
PWS	Solid Waste

Reach has had minimal operations through March 31, 2017.

The composition of our reportable segments is consistent with that used by our Chief Operating Decision Maker (“CODM”) to evaluate performance and allocate resources. All of our operations are located in the U.S. We have not allocated corporate selling, general and administrative expenses, and stock-based compensation to the segments. All intercompany transactions have been eliminated.

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STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

Segment information for the three months ended March 31, 2017 and 2016 is as follows:

2017	Industrial		Railcar		Environmental		Solid
	Cleaning		Cleaning		Solutions		Waste			Corporate			Total
Revenue	$	1,411,100	$	1,024,900	$	1,689,000	$	69,300		$	—		$	4,194,300
Depreciation and amortization (1)		83,000		10,400		40,700		32,800			25,000			191,900
Interest expense		6,300		200		4,800		100			415,700			427,100
Stock-based compensation		—		—		—		—			17,000			17,000
Net income (loss)		123,800		207,600		217,400		(111,300	)		(806,200	)		(368,700	)
Capital expenditures (cash and noncash)		—		—		1,320		—			—			1,320
Total assets	$	1,576,700	$	687,500	$	2,114,000	$	1,795,100		$	1,011,000		$	7,184,300

2016	Industrial		Railcar		Environmental			Solid
	Cleaning		Cleaning		Solutions			Waste			Corporate			Total
Revenue	$	1,984,900	$	875,200	$	572,800		$	71,600		$	—		$	3,504,500
Depreciation and amortization (1)		87,700		10,800		40,100			33,300			22,400			194,300
Interest expense		8,000		2,400		6,500			400			30,400			47,700
Stock-based compensation		—		—		—			—			29,600			29,600
Net income (loss)		583,000		186,600		(97,200	)		(168,700	)		(456,900	)		46,800
Capital expenditures (cash and noncash)		110,700		13,200		9,000			3,800			—			136,700
Total assets	$	2,187,000	$	746,500	$	1,717,400		$	2,967,100		$	574,300		$	8,192,300

(1) Includes depreciation of property, equipment and leasehold improvement and amortization of intangibles

NOTE 16 – LITIGATION

In March 2016, a complaint was filed by a lessor of property leased by REGS, a subsidiary of the Company. The month-to-month lease expired February 29, 2016, when REGS vacated the property. The landlord made certain claims including property damage, and loss of rents, attorney fees and other costs totaling approximately $97,000. REGS engaged defense counsel and zealously opposed the claims. In December 2016, the Company and the lessor reached a settlement of $65,000. At March 31, 2017 and December 31, 2016 $6,800 and $39,000 was outstanding, respectively, and subsequently paid in 2017 per the terms of the settlement agreement. The case was dismissed with prejudiced and the matter is closed.

In January 2016, an employee of SEM was involved in a vehicle accident while on Company business. Various actions were filed by the claimants in both state and federal courts. In August 2016, an involuntary proceeding was commenced by one of the claimants against SEM under Chapter 7 of the Bankruptcy code. In September 2016, the case was converted to a Chapter 11 under the Bankruptcy code. During the pendency of all actions, SEM continued to manage its affairs and operate normally. In the fourth quarter of 2016, the parties reached a settlement concerning the distribution of insurance proceeds and all issues of liability. On March 27, 2017 the Bankruptcy Courts confirmed the dismissal of the SEM Chapter 11 case. As part of the bankruptcy proceedings, the Company reached a settlement with claimants and recorded an accrued litigation expense of $212,500 at December 31, 2016. It was agreed among the parties that all pending state and/or federal claims will be dismissed with prejudice.

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STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 17 - SUBSEQUENT EVENTS

In April 2017, the Company paid one short-term note for $200,000 in full with accrued interest. The penalty period for shares to be issued was reached and the Company recorded 300,000 common stock shares as issuable at March 31, 2017 and will record another 50,000 shares as issuable in April 2017. These shares will be issued in the second quarter of 2017.

The Company will issue an additional 350,000 common stock shares related to penalty on three short-term note penalty periods through May 15, 2017.

Effective as of May 1, 2017, we entered into an agreement with Donald F. Moorehead, Jr. in connection with his services as Chairman of the Board of SEER and CEO of Paragon Waste Services (PWS). Mr. Moorhead’s agreement provides for an initial payment of $30,000 and subsequent monthly payments of $5,000. Additionally, Mr. Moorhead will receive 1,000,000 common stock options with strike price of $0.70 and vests over two years at 125,000 per quarter.

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

The 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 10K filed with the Securities and Exchange Commission on April 14, 2017. 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 10K 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,” we are describing Strategic Environmental & Energy Resources, Inc. and its consolidated subsidiaries on a consolidated basis.

SEER 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., 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 oil & gas, environmental, waste management and renewable energy industries. SEER currently operates six companies with five 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 technologies with many customer installations throughout the U.S. Each of the six 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.

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 and water treatment and oil & gas 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 (“CNG”) 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 truly synergistic services, technologies and products as well as annuity type revenue streams.

The Company now owns and manages five operating entities and one entity that has no significant operations to date.

Subsidiaries

REGS, LLC d/b/a Resource Environmental Group Services (“REGS”): (operating since 1994) provides general industrial cleaning services and waste management to many industry sectors focusing primarily on oil & gas production (upstream) and refineries (downstream).

Tactical Cleaning Company, LLC (“Tactical”): (operating since 2005) provides cleaning services to the tanker rail car industry with offices in two states and a focus on both food-grade and petroleum based products, i.e., fuel oil and asphalt. Tactical is now permitted to operate a flare at its Kansas facility and will continue the expansion of its operations in 2017 in both the cleaning of gas and propane rail cars.

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 land fill 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.

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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. 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.

ReaCH4BioGas (“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 has had minimal operations as of March 31, 2017.

SEER Environmental Materials, LLC (“SEM”) formed September 2015. SEM 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.

Joint Ventures

MV RCM Joint Venture: In April 2013, MV Technologies, Inc (“MV”) and RCM International, LLC (“RCM”) entered into an Agreement to develop hybrid scrubber systems that employ elements of RCM Technology and MV Technology (the “Joint Venture”). RCM and MV Technologies will independently market the hybrid scrubber systems. The contractual Joint Venture has an initial term of five years and will automatically renew for successive one-year periods unless either Party gives the other Party one hundred and eighty (180) days’ notice prior to the applicable renewal date. Operations to date of the Joint Venture have been limited to formation activities.

Paragon 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.

P&P Company: 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.

PWS 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. Operations to date have included the destruction of medical waste under a temporary operating permit issued by SCAQMD since May 2015 and efforts to obtain a full operating permit from SCAQMD were successful and SCAQMD issued a ‘Notice of Intent to Issue Permit to Operate’ in March 2017.

22

SEER’s Financial Condition

As shown in the accompanying consolidated financial statements, the Company has experienced recurring losses, and has accumulated a deficit of approximately $19.6 million as of March 31, 2017, and $19.3 million as of December 31, 2016. For the three months ended March 31, 2017 we had net loss before adjustment for losses attributable to non-controlling interest of approximately $419,900 and for the year ended December 31, 2016, we incurred net losses before adjustment for losses attributable to non-controlling interest of approximately $4.7 million. The Company had a working capital deficit of approximately $3.9 million at March 31, 2017, an improvement of approximately $100,000 in the working capital deficit of $4 million at December 31, 2016. REGS, a wholly owned subsidiary, was notified that effective April 1, 2016 it would no longer be providing routine maintenance services to its largest customer but would still be eligible to provide other industrial cleaning services. The loss of revenue from this customer was approximately $2.5 for the year ended December 31, 2016. These factors raise substantial doubt about the ability of the Company to continue to operate as a going concern.

Realization of a major portion of our assets as of March 31, 2017 and December 31, 2016, 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. The Company opened an additional rail car cleaning facility in the Midwest (Illinois) and East Coast (Maryland) during 2016 to offset some of the lost revenue previously derived from the refinery sector. Revenue from the new rail car cleaning facilities began in mid-2016 (Illinois) and fourth quarter of 2016 (Maryland) and both locations are experiencing monthly revenue growth for the three months ending March 31, 2017. In addition, we have undertaken a number of specific steps to improve operating efficiencies, revenues and income to continue to operate as a going concern. 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 our ability to license and or sell, permit and operate our CoronaLux™ waste destruction units either though our joint ventures and/or licensees. We have increased our business development efforts to address opportunities identified in expanding markets attributable to increased interest in energy conservation and emission control regulations, particularly the landfill gas and oil field emissions sectors. In addition, the Company is evaluating various forms of financing which may be available to it, i.e., debt and/or equity financing while carefully evaluating the impact on share dilution. 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.

Results of Operations for the Three Months Ended March 31, 2017 and 2016

Total revenues were approximately $4.2 million and $3.5 million for the three months ended March 31, 2017 and 2016, respectively. The increase in revenue comparing Q1 2017 to Q1 2016 is driven by an increase of approximately $1.1 million or 195% in the environmental solutions revenue, offset by an approximate $425,000 reduction or 15% in services revenue. The increase in the environmental solutions revenue is due to greater long term contract revenue, one time revenue and recurring media sales to new and existing customers. Our railcar cleaning service revenues increased approximately $150,000, or 17%. The increase in the number of railcars serviced is a result of the downturn in the oil and gas market, and the railcar industry transition to transporting other liquid products thus increasing service opportunities. Industrial cleaning services revenues was down approximately $574,000 due to the loss of a refinery customer in April 2016. Solid waste revenues were relatively flat at approximately $70,000, in both Q1 2017 to Q1 2016.

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Operating costs, which include cost of products, cost of services, solid waste costs, general and administrative (G&A) expenses and salaries and related expenses, were $4.2 million for the quarter ended March 31, 2017 compared to $3.4 million for the quarter ended March 31, 2016. The increase in operating costs of approximately $700,000 is primarily the result of a 1) a 195% increase in environmental solutions revenue resulting in a 220% increase in environmental solutions costs, 2) an increase in industrial and railcar cleaning services costs of approximately $100,000. Service costs as a percentage of service revenues were 73% for the quarter ended March 31, 2017 and 59% for the quarter ended March 31, 2016. In Q1 2016 the services segment was able to fully utilize our manpower to where they were fully chargeable and based on the type of work we were able to utilize and bill our own equipment and rent less third party equipment. The services segment did not experience that same utilization of manpower in Q1 2017. Product costs as a percentage of product revenues were 70% for the quarter ended March 31, 2017 and 64% for the quarter ended March 31, 2016. The decrease in margin costs for the product sales is due to higher costs of chemical absorbents. G&A expenses remained relatively constant for the quarters ended March 31, 2017 and 2016. Salaries and related expenses were $587,800 for the quarter ended March 31, 2017 compared to $690,700 for the quarter ended March 31, 2016 a decrease of $102,900. The decrease is attributable to a decrease in staffing at the industrial services segment and administrative employees.

Total non-operating other income (expense), net was $(433,000) for the quarter ended March 31, 2017 compared to $(34,700) for the quarter ended March 31, 2016. For the quarter ended March 31, 2017 non-operating expenses were comprised of interest expense of $(427,100) and other expenses of $(5,900). For the quarter ended March 31, 2016 non-operating expenses were comprised of interest expense of $(47,700) offset by other income of $13,000. The increase in interest expense in Q1 2017 compared to Q1 2016 was an increase in interest bearing debt, in particular short-term debt of $850,000 added in Q4 2016 and Q1 2017. Additionally, that short-term debt resulted in penalty shares issuable at March 31, 2017 valued at $345,000.

There is no provision for income taxes for the quarter ended March 31, 2017 due to prior year losses and for the quarter ended March 31, 2016, due to our net loss for the period.

The Company had a net loss, before non-controlling interest, for the quarter ended March 31, 2017 $(419,900) compared to net income, before non-controlling interest, of $46,800 for the quarter ended March 31, 2016. Net loss attributable to SEER after deducting $51,200 for the non-controlling interest loss was $(368,700) for the quarter ended March 31, 2017 compared to net income attributable to SEER of $129,400, after deducting $82,600 in non-controlling interest loss for the quarter ended March 31, 2016. As noted above, although revenues increased when comparing Q1 2017 to Q1 2016, our margins on both the service revenues and environmental solutions decreased due to lower utilization of manpower and owned equipment as well as higher cost of chemical absorbents. In addition, general and administrative expense were fairly consistent between Q1 2017 compared to Q1 2016 and salaries and related expenses decreased approximately $100,000 in Q1 2017 compared to Q1 2016.

Changes in Cash Flow

Operating Activities

The Company had net cash used in operating activities for the three months ended March 31, 2017 of $(155,700) compared to net cash provided by operating activities for the three months ended March 31, 2016 of $320,900, a decrease of nearly $477,000. Cash provided by operating activities is driven by our net income (loss) and adjusted by non-cash items as well as changes in operating assets and liabilities. Non-cash adjustments primarily include depreciation, amortization of intangible assets, stock based compensation expense and non-cash interest expense related to issuable common stock shares as penalty for delay in repayment of short-term notes. Non-cash adjustment totaled $555,500 and $212,300 for the three months ended March 31, 2017 and 2016, respectively, so non-cash adjustments had a significantly larger impact on net cash provided by operating activities for Q1 2017 when compared to Q1 2016. For the three months ended March 31, 2017, the net negative change in operating assets and liabilities was $(282,300) compared to the three months ended March 31, 2016 where the net positive change in operating assets and liabilities, as described above, was $61,800. The negative change in operating assets and liabilities had a much greater impact on net cash used by operating activities for Q1 2017 compared to Q1 2016.

Investing activities

The purchase of property, equipment and intangibles were significantly lower in Q1 2017 compared to Q1 2016. In Q1 2017 the additions totaled $1,300 compared to additions in Q1 2016 of $157,000. In Q1 2016 we received insurance proceeds of $39,300 from property damage and there were no such proceeds in Q1 2017.

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Financing Activities

Net cash provided by financing activities was $266,400 for the three months ended March 31, 2017 compared to net cash provided by financing activities of $202,500 for the three months ended March 31, 2016. The primary difference is that in Q1 2017, we had proceeds from short-term notes of $450,000, whereas in Q1 2016, we had proceeds for the sale of stock, exercise of warrants and warrant extensions totaling $347,000.

Critical Accounting Policies, Judgments and Estimates

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 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.

Accounts Receivable and Concentration of Credit Risk

Accounts 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. We determine 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 $300,500 and $300,500 has been reserved as of March 31, 2017 and December 31, 2016, respectively.

We are exposed to credit risk in the normal course of business, primarily related to accounts receivable. Our customers operate primarily in the oil production and refining, rail transport, 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, 2017 and December 31, 2016, we do not believe that we have significant credit risk.

Fair Value of Financial Instruments

The 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.

Long-lived Assets

We evaluate 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. Fair value estimates are based on assumptions concerning the amount and timing of estimated future cash flows. No impairment was determined as of March 31, 2017. As of December 31, 2016 the Company determined an impairment to five CoronaLux ™ units of $809,000 incurred due to lack of sale or license of the five units for a period of more than 12 months since completion of the units.

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Revenue Recognition

We recognize revenue related to contract projects and services when all of the following criteria are met: (i) persuasive evidence of an agreement exists, (ii) delivery has occurred or services have been rendered, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured. Our revenue is primarily comprised of services related to industrial cleaning and railcar cleaning, which we recognize as services are rendered.

Product revenue generated from projects, which include the manufacturing of products, for removal and treatment of hazardous vapor and gasses is accounted for under the percentage-of-completion method for projects with durations in excess of three months and the completed-contract method for all other projects. 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, we 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 percentage-of-completion method, we recognize revenue primarily based on the ratio of costs incurred to date to total estimated contract costs. 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.

For contracts accounted for under the percentage-of-completion method, we include in current assets and current liabilities amounts related to construction 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. Billings in excess of costs and estimated earnings on uncompleted contracts represents the excess of billings to date over the amount of contract costs and profits recognized to date, and are recognized as a current liability.

The Company’s revenues from waste destruction licensing agreements are recognized as a single accounting unit over the term of the license.  In accordance with Accounting Standards Codification (“ASC”) 605, for revenues which contain multiple deliverables, the Company separates the deliverables into separate accounting units if they meet the following criteria: (i) the delivered items have a stand-alone value to the customer; (ii) the fair value of any undelivered items can be reliably determined; and (iii) if the arrangement includes a general right of return, delivery of the undelivered items is probable and substantially controlled by the seller.  Deliverables that do not meet these criteria are combined with one or more other deliverables into one accounting unit.  Revenue from each accounting unit is recognized based on the applicable accounting literature, primarily ASC 605.

Stock-based Compensation

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

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Item 3: Quantitative and Qualitative Disclosures About Market Risk

Not Applicable.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our filings with the Securities and Exchange Commission (SEC) are recorded, processed, summarized and reported within the time period specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our chief executive officer and chief financial officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure based on the definition of “disclosure controls and procedures” as defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

As of the end of the period covered by this report, and under the supervision and with the participation of our management, including our Chief Executive Officer and the person performing the similar function as Chief Financial Officer, we evaluated the effectiveness of the design and operation of these disclosure controls and procedures. Based on this evaluation and subject to the foregoing, our Chief Executive Officer and Acting Chief Financial Officer concluded that our disclosure controls and procedures were not effective.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15 (f) under the Exchange Act) during the quarter ended March 31, 2017 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 

PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings

From time to time, the Company may become a party to legal actions or proceedings in the ordinary course of its business.  As of March 31, 2017, there were no other such actions or proceedings, either individually or in the aggregate, that, if decided adversely to the Company’s interests, the Company believes would be material to its business.

ITEM 1A. Risk Factors

Please review our report on Form 10K Part 1, Item 1A for a complete statement of “Risk Factors” that pertain to our business.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds.

During the three months ended March 31, 2017, the Company recorded 500,000 shares of $.001 par value common stock as issuable to short-term note holders as required under their respective agreements for reaching the penalty period for non-payment.

During the three months ended March 31, 2017, the Company issued 13,496 shares of its $.001 par value common stock upon the cashless exercise of 166,666 common stock options.

During the three months ended March 31, 2017, the Company issued an option to purchase 1,000,000 shares of its $.001 par value common stock at a strike price of $1.00 to Richard Robertson in connection with his employment agreement dated January 9, 2017. At the date of issuance 100,000 shares vested immediately and the remaining 900,000 options vest over a period of four years in a series of 16 successive equal quarterly installments of 56,250 commencing March 31, 2017 and ending December 31, 2020. The Company used the Black Scholes option pricing model to estimate the fair value of the options granted at $102,354. The assumptions used in calculating such value include a risk-free interest rate of 1.89%, expected volatility of 36.87%, an expected life of 5.5 years and a dividend rate of 0. 

27

The issuance of the shares of our common stock described above was pursuant to the exemption from registration provided by Section 4(2) of the Securities Act of 1933, as amended and related state private offering exemptions. All of the investors were Accredited Investors as defined in the Securities Act who took their shares for investments purposes without a view to distribution and had access to information concerning the company and its business prospects, as required by the Securities Act.

In addition, there was no general solicitation or advertising for the purchase of these shares. All certificates for these shares issued pursuant to Section 4(2) contain a restrictive legend. Finally, our stock transfer agent has been instructed not to transfer any of such shares unless such shares are registered for resale or there is an exemption with respect to their transfer.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable.

ITEM 5. OTHER INFORMATION

None

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ITEM 6. EXHIBITS

EXHIBIT INDEX

3.1	Articles of Incorporation, dated February 13, 2002 (1)
3.2	Amendment to the Articles of Incorporation, dated December 19, 2007, changing the name and effecting a reverse (1)
3.3	Bylaws of the corporation, effective February 13, 2002 (1)
4.1	$225,000 Convertible Note and Note Agreement of the Corporation, issued February 14, 2012 (2)
4.2	Form of Warrant, having a 3-year life with $0.50 exercise price (1)
4.3	Form of Warrant, having a 5-year life with $0.50 exercise price (1)
10.1	Agreement for acquisition of MV, dated June 13, 2008 (1)
10.2	Agreement for acquisition of intellectual property from Black Stone Management Services, LLC, dated August 10, 2011 (1)
10.3	Agreement for Merger with Satellite Organizing Solutions, Inc. (1)
10.4	Consulting Agreement between the Company and Monty R. Lamirato, dated October 8, 2013 (3)
10.5	Irrevocable License and Royalty Agreement between the Company and Paragon Waste Solutions, LLC, dated March 21, 2012 (3)
10.6	SEER 2013 Equity Incentive Plan (4)
10.7	Form of Option Grant SEER 2013 Equity Incentive Plan (4)
10.8	Equity Purchase Agreement – Sterall LLC
14.1	Code of Ethics (1)
21.1	Subsidiaries of Registrant (1)
31.1*	Certification of Principal Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934
31.2*	Certification of Principal Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934
32.1**	Certification of Principal Executive Officer ) pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS***	XBRL Instance Document
101.SCH***	XBRL Taxonomy Extension Schema Document
101.CAL***	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF***	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB***	XBRL Taxonomy Extension Label Linkbase Document
101.PRE***	XBRL Taxonomy Extension Presentation Linkbase Document

(1)       

Incorporated by reference to the Company’s Report on Form 10 filed May 21, 2013.

(2)       

Incorporated by reference to the Company’s Report on Form 10 Amendment No. 1 filed July 23, 2013.

(3)       

Incorporated by reference to the Company’s Report on Form 10-Q filed November 14, 2013

(4)       

Incorporated by reference to the Company’s Report on Form 10-K filed March 27, 2014

*       

Filed herewith

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

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

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SIGNATURES

Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated:  May 12, 2017	STRATEGIC ENVIRONMENTAL & ENERGY RESOURCES, INC.
	By	/s/ J. John Combs III
		J. John Combs III Chief Executive Officer with Responsibility to sign on behalf of Registrant as a Duly authorized officer and principal executive officer
	By	/s/ Heidi Anderson
		Heidi Anderson
		Interim Chief Financial Officer with
		responsibility to sign on behalf of Registrant as a
		duly authorized officer and principal financial officer

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EX-31.1

Strategic Environmental & Energy Resources, Inc. 10-Q

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, J. John Combs III, certify that:

1.          I have reviewed this Form 10-Q for the period ended March 31, 2017, of Strategic Environmental & Energy Resources, Inc.;

2.          Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.          Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.          The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the Registrant and have:

(a)          Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated Subsidiary, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)          Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; 

(c)          Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)          Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5.          The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of Registrant’s board of directors (or persons performing the equivalent functions):

(a)          All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

(b)          Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Dated:  May 12, 2017
	/s/ J. John Combs III
	J. John Combs III
	Chief Executive Officer

EX-31.2

Strategic Environmental & Energy Resources, Inc. 10-Q

EXHIBIT 31.2

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Heidi Anderson, certify that:

1.          I have reviewed this Form 10-Q for the period ended March 31, 2017, of Strategic Environmental & Energy Resources, Inc.;

2.          Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.          Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.          The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the Registrant and have:

(e)          Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated Subsidiary, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(f)          Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; 

(g)          Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(h)          Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5.          The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of Registrant’s board of directors (or persons performing the equivalent functions):

(a)          All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

(b)          Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Dated:  May 12, 2017
	/s/ Heidi Anderson
	Heidi Anderson
	Interim Chief Financial Officer

EX-32.1

Strategic Environmental & Energy Resources, Inc. 10-Q

EXHIBIT 32.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER

Pursuant to 18 U.S.C. 1350

(Section 906 of the Sarbanes-Oxley Act of 2002)

In connection with the Strategic Environmental & Energy Resources, Inc. (the “Company”) Quarterly Report on Form 10-Q for the period ended March 31, 2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, J. John Combs III, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the consolidated financial condition and results of operations of the Company.

Dated: May 12, 2017

/s/ J. John Combs III

J. John Combs III

President and Chief Executive Officer

EX-32.2

Strategic Environmental & Energy Resources, Inc. 10-Q

EXHIBIT 32.2

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER

Pursuant to 18 U.S.C. 1350

(Section 906 of the Sarbanes-Oxley Act of 2002)

In connection with the Strategic Environmental & Energy Resources, Inc. (the “Company”) on Report on Form 10-Q for the period ended March 31, 2017, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Heidi Anderson, Interim Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the consolidated financial condition and results of operations of the Company.

Dated: May 12, 2017

/s/ Heidi Anderson

Heidi Anderson

Interim Chief Financial Officer

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Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2017	Apr. 30, 2017
Document And Entity Information
Entity Registrant Name	Strategic Environmental & Energy Resources, Inc.
Entity Central Index Key	0001576197
Document Type	10-Q
Trading Symbol	SENR
Document Period End Date	Mar. 31, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity a Well-known Seasoned Issuer	No
Entity a Voluntary Filer	No
Entity's Reporting Status Current	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		54,538,575
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2017

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)		Mar. 31, 2017	Dec. 31, 2016
Current assets:
Cash		$ 342,600	$ 233,200	[1]
Accounts receivable, net of allowance for doubtful accounts of $300,500 and $300,500, respectively		2,273,600	2,029,900	[1]
Costs and estimated earnings in excess billings on uncompleted contracts	[1]		13,600
Prepaid expenses and other current assets		1,033,800	535,900	[1]
Total current assets		3,650,000	2,812,600	[1]
Property and equipment, net		2,795,800	2,961,300	[1]
Intangible assets, net		712,900	738,000	[1]
Other assets		25,600	25,600	[1]
TOTAL ASSETS		7,184,300	6,537,500	[1]
Current liabilities:
Accounts payable		2,338,800	2,158,500	[1]
Accrued liabilities		1,462,900	1,469,100	[1]
Billings in excess of costs and estimated earnings on uncompleted contracts		956,500	1,090,800	[1]
Deferred revenue		188,300	188,300	[1]
Payroll taxes payable		999,000	993,300	[1]
Customer deposits		330,000	330,000	[1]
Current portion of notes payable and capital lease obligations		1,280,300	571,800	[1]
Notes payable - related parties, including accrued interest		11,800	11,800	[1]
Total current liabilities		7,567,600	6,813,600	[1]
Deferred revenue, non-current		236,500	283,600	[1]
Notes payable and capital lease obligations, net of current portion		1,749,500	1,751,500	[1]
Total liabilities		9,553,600	8,848,700	[1]
Commitments and contingencies
Stockholders' Equity):
Preferred stock; $.001 par value; 5,000,000 shares authorized; -0- shares issued
Common stock; $.001 par value; 70,000,000 shares authorized; 55,038,575 and 54,525,079 shares issued, issuable** and outstanding 2017 and 2016, respectively		55,000	54,500	[1]
Common stock subscribed		25,000	25,000	[1]
Additional paid-in capital		19,438,900	19,077,600	[1]
Stock subscription receivable		(25,000)	(25,000)	[1]
Accumulated deficit		(19,642,200)	(19,273,500)	[1]
Total stockholders' equity		(148,300)	(141,400)	[1]
Non-controlling interest		(2,221,000)	(2,169,800)	[1]
Total equity		(2,369,300)	(2,311,200)	[1]
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$ 7,184,300	$ 6,537,500	[1]

[1] These numbers were derived from the audited financial statements for the year ended December 31, 2016.

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CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($)	Mar. 31, 2017		Dec. 31, 2016
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 300,500		$ 300,500
Preferred stock, par value (in dollars per shares)	$ 0.001		$ 0.001
Preferred stock, authorized	5,000,000		5,000,000
Preferred stock, issued	0		0
Common stock, par value (in dollars per shares)	$ 0.001		$ 0.001
Common stock, authorized	70,000,000		70,000,000
Common stock, issued	55,038,575	[1]	54,525,079
Common stock, outstanding	55,038,575		54,525,079
Shares issuable per short-term note agreements	500,000

[1] Includes 500,000 shares issuable at March 31, 2017 per terms of short-term note agreements.

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Revenue:
Products	$ 1,689,000	$ 572,800
Services	2,436,000	2,860,100
Solid waste	69,300	71,600
Total revenue	4,194,300	3,504,500
Operating expenses:
Products costs	1,178,400	368,100
Services costs	1,789,500	1,690,300
Solid waste costs	57,300	103,900
General and administrative expenses	568,200	570,000
Salaries and related expenses	587,800	690,700
Total operating expenses	4,181,200	3,423,000
Income (loss) from operations	13,100	81,500
Other income (expense):
Interest expense	(427,100)	(47,700)
Other	(5,900)	13,000
Total non-operating expense, net	(433,000)	(34,700)
Net income (loss)	(419,900)	46,800
Less: Net loss attributable to non-controlling interest	(51,200)	(82,600)
Net income attributable to SEER common stockholders	$ (368,700)	$ 129,400
Net loss per share, basic and diluted (in dollars per share)	$ (0.01)		[1]
Weighted average shares outstanding - basic and diluted (in shares)	54,532,727	52,593,211

[1] Less than $(.01) per share

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CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) - USD ($)		3 Months Ended
		Mar. 31, 2017		Mar. 31, 2016
Cash flows from operating activities:
Net income (loss)		$ (419,900)		$ 46,800
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	[1]	191,900		194,300
Stock-based compensation expense		17,000		29,600
Non-cash expense for interest, common stock issued for debt penalty		345,000
Non-cash expense for interest, warrants - accretion of debt discount		1,600		1,200
Gain on disposition of assets				(12,800)
Changes in operating assets and liabilities:
Accounts receivable		(243,700)		(380,700)
Costs in Excess of billings on uncompleted contracts		13,600		111,400
Prepaid expenses and other assets		(59,600)		146,900
Accounts payable and accrued liabilities		174,100		156,200
Billings in excess of revenue on uncompleted contracts		(134,300)		26,900
Deferred revenue		(47,100)		(4,600)
Payroll taxes payable		5,700		5,700
Net cash provided by operating activities		(155,700)		320,900
Cash flows from investing activities:
Insurance proceeds from property damage				39,300
Purchase of property and equipment		(1,300)		(136,700)
Purchase of intangibles				(20,300)
Net cash used in investing activities		(1,300)		(117,700)
Cash flows from financing activities:
Payments of notes payments and capital lease obligations		(183,600)		(124,500)
Payments of related party notes payable and accrued interest				(20,000)
Proceeds from short-term notes		450,000		25,000
Proceeds from warrant extensions				22,000
Proceeds from the sale of common stock and warrants, net of expenses				300,000
Net cash provided by (used in) financing activities		266,400		202,500
Net increase in cash		109,400		405,700
Cash at the beginning of period		233,200	[2]	257,100
Cash at the end of period		342,600		662,800
Supplemental disclosures of cash flow information:
Cash paid for interest		12,400		33,400
Financing of prepaid insurance premiums		$ 438,300		$ 278,600

[1] Includes depreciation of property, equipment and leasehold improvement and amortization of intangibles

[2] These numbers were derived from the audited financial statements for the year ended December 31, 2016.

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ORGANIZATION AND FINANCIAL CONDITION

3 Months Ended

Mar. 31, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

ORGANIZATION AND FINANCIAL CONDITION

NOTE 1 - ORGANIZATION AND FINANCIAL CONDITION

Organization and Going Concern

Strategic Environmental & Energy Resources, Inc. (“SEER,” “we,” or the “Company”), a Nevada corporation, is a provider of next-generation clean-technologies, waste management innovations and related services. SEER has four wholly-owned operating subsidiaries and two 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 four wholly-owned subsidiaries include: 1) REGS, LLC (d/b/a Resource Environmental Group Services (“REGS”)) provides industrial and proprietary cleaning services to refineries, oil fields and other private and governmental entities; 2) Tactical Cleaning Company, LLC (“Tactical”), provides proprietary cleaning services related to railcar tankers, tank trucks and frac tanks to customers from its sites in Colorado and Kansas; 3) MV, LLC (d/b/a MV Technologies) (“MV”), designs and builds biogas conditioning solutions for the production of renewable natural gas and odor control systems primarily for landfill operations, waste-water treatment facilities, oil and gas fields, refineries, municipalities and food, beverage & agriculture operations throughout the U.S.; 4) SEER Environmental Materials, LLC,(“SEM”), a materials technology company focused on development of cost-effective chemical absorbents.

The two majority-owned subsidiaries are; 1) Paragon Waste Solutions, LLC (“PWS”) and 2) ReaCH4Biogas (“Reach”). PWS is currently owned 54% by SEER (see Note 7) and Reach is owned 85% by SEER.

PWS is developing 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, 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 many others.

Reach (the trade name for BeneFuels, LLC), is currently owned 85% by SEER and focuses specifically on developing renewable biomethane projects that convert raw biogas to pipeline quality gas and/or compressed natural gas (“CNG”) for fleet vehicle fuel. Reach had minimal operations for the quarter ended March 31, 2017 and 2016.

Principals of Consolidation

The accompanying consolidated financial statements include the accounts of SEER, its wholly-owned subsidiaries, REGS, TCC, MV and SEM and its majority-owned subsidiaries PWS and Reach, 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 $19.6 million as of March 31, 2017, and $19.3 million as of December 31, 2016. For the three months ended March 31, 2017 we had net loss before adjustment for losses attributable to non-controlling interest of approximately $368,700 and for the year ended December 31, 2016, we incurred net losses before adjustment for losses attributable to non-controlling interest of approximately $4.7 million. The Company had a working capital deficit of approximately $3.9 million at March 31, 2017, a improvement of approximately $100,000 in the working capital deficit of $4 million at December 31, 2016. REGS, a wholly owned subsidiary, was notified that effective April 1, 2016 it would no longer be providing routine maintenance services to its largest customer but would still be eligible to provide other industrial cleaning services. The loss of revenue from this customer was approximately $2.5 for the year ended December 31, 2016. 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 December 31, 2016.

Realization of a major portion of our assets as of March 31, 2017 and December 31, 2016, 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. The Company opened an additional rail car cleaning facility in the Midwest (Illinois) and East Coast (Maryland) during 2016 to offset some of the lost revenue previously derived from the refinery sector. Revenue from the new rail car cleaning facilities began in mid-2016 (Illinois) and fourth quarter of 2016 (Maryland) and both locations are experiencing monthly revenue growth for the three months ending March 31, 2017. In addition, we have undertaken a number of specific steps to improve operating efficiencies, revenues and income to continue to operate as a going concern. 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 our ability to license and or sell, permit and operate our CoronaLux™ waste destruction units either though our joint ventures and/or licensees. We have increased our business development efforts to address opportunities identified in expanding markets attributable to increased interest in energy conservation and emission control regulations, particularly the landfill gas and oil field emissions sectors. In addition, the Company is evaluating various forms of financing which may be available to it, i.e., debt and/or equity financing while carefully evaluating the impact on share dilution. 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 of 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 14, 2017 for the years ended December 31, 2016 and 2015.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 2017

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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 carrying amount of intangible assets; valuation allowances and reserves for receivables and 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.

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 income (loss). 

Revenue Recognition

We recognize revenue related to contract projects and services when all of the following criteria are met: (i) persuasive evidence of an agreement exists, (ii) delivery has occurred or services have been rendered, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured. Our revenue is primarily comprised of services related to industrial cleaning and railcar cleaning, which we recognize as services are rendered.

Product revenue generated from projects, which include the manufacturing of products, for removal and treatment of hazardous vapor and gasses is accounted for under the percentage-of-completion method for projects with durations in excess of three months and the completed-contract method for all other projects. 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, we 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 percentage-of-completion method, we recognize revenue primarily based on the ratio of costs incurred to date to total estimated contract costs. 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.

For contracts accounted for under the percentage-of-completion method, we include in current assets and current liabilities amounts related to construction 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. Billings in excess of costs and estimated earnings on uncompleted contracts represents the excess of billings to date over the amount of contract costs and profits recognized to date, and are recognized as a current liability.

The Company’s revenues from waste destruction licensing agreements are recognized as a single accounting unit over the term of the license.  In accordance with Accounting Standards Codification (“ASC”) 605, for revenues which contain multiple deliverables, the Company separates the deliverables into separate accounting units if they meet the following criteria: (i) the delivered items have a stand-alone value to the customer; (ii) the fair value of any undelivered items can be reliably determined; and (iii) if the arrangement includes a general right of return, delivery of the undelivered items is probable and substantially controlled by the seller.  Deliverables that do not meet these criteria are combined with one or more other deliverables into one accounting unit.  Revenue from each accounting unit is recognized based on the applicable accounting literature, primarily ASC 605.

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 $600 and $48,500 for the three months ended March 31, 2017 and 2016, respectively.

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, 2017 and 2016 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 at March 31, 2017 and December 31, 2016. 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, 2015. The tax periods for the years ending December 31, 2009 through 2015 are open to examination by federal and state authorities.

Recently issued accounting pronouncements

Changes to accounting principles generally accepted in the United States of America (U.S. GAAP) are established by the Financial Accounting Standards Board (FASB) in the form of accounting standards updates (ASU’s) to the FASB’s Accounting Standards Codification. The Company considers the applicability and impact of all new or revised ASU’s. 

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PROPERTY AND EQUIPMENT

3 Months Ended

Mar. 31, 2017

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT

NOTE 3 - PROPERTY AND EQUIPMENT

Property and equipment was comprised of the following:

	March 31, 2017			December 31, 2016
Field and shop equipment	$	2,292,700		$	2,292,700
Vehicles		689,700			689,700
Waste destruction equipment, placed in service		1,355,400			1,355,400
Waste destruction equipment, not placed in service		656,200			656,200
Furniture and office equipment		326,600			325,300
Leasehold improvements		65,400			65,400
Building and improvements		21,200			21,200
Land		162,900			162,900
		5,570,100			5,568,800
Less: accumulated depreciation and amortization		(2,774,300	)		(2,607,500	)
Property and equipment, net	$	2,795,800		$	2,961,300

Depreciation expense for the three months ended March 31, 2017 and 2016 was $166,700 and $171,500, respectively. For the three months ended March 31, 2017 depreciation expense included in cost of goods sold and selling, general and administrative expenses was $142,400 and $24,300 respectively. For the three months ended March 31, 2016 depreciation expense included in cost of goods sold and selling, general and administrative expenses was $147,300 and $24,200, respectively.

Accumulated depreciation on leased CoronaLux™ units included in accumulated depreciation and amortization above is $335,875 and $206,300 for the three months ended March 31, 2017 and 2016, respectively.

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

	March 31,			December 31
	2017			2016
Vehicles, field and shop equipment	$	462,700		$	462,700
Less: accumulated amortization		(246,200	)		(222,800	)
	$	216,500		$	239,900

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INTANGIBLE ASSETS

3 Months Ended

Mar. 31, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS

NOTE 4 – INTANGIBLE ASSETS

Intangible assets were comprised of the following:

	March 31, 2017
	Gross carrying amount		Accumulated amortization			Net carrying value
Goodwill	$	277,800		—		$	277,800
Customer list		42,500		(42,500	)		—
Technology		1,069,500		(634,400	)		435,100
Trade name		57,300		(57,300	)		—
	$	1,447,100	$	(734,200	)	$	712,900

	December 31, 2016
	Gross carrying amount		Accumulated amortization			Net carrying value
Goodwill	$	277,800		—		$	277,800
Customer list		42,500		(42,500	)		—
Technology		1,069,500		(609,300	)		460,200
Trade name		57,300		(57,300	)		—
	$	1,447,100	$	(709,100	)	$	738,000

The estimated useful lives of the intangible assets range from seven to ten years. Amortization expense was $25,100 and $22,800 for the three months ended March 31, 2017 and 2016, respectively.

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ACCRUED LIABILITIES

3 Months Ended

Mar. 31, 2017

Payables and Accruals [Abstract]

ACCRUED LIABILITIES

NOTE 5 - ACCRUED LIABILITIES

Accrued liabilities were comprised of the following:

	March 31, 2017		December 31, 2016
Accrued compensation and related taxes	$	644,000	$	644,800
Accrued interest		121,500		58,900
Accrued litigation claims		219,300		277,500
Other		478,100		487,900
Total Accrued Liabilities	$	1,462,900	$	1,469,100

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UNCOMPLETED CONTRACTS

3 Months Ended

Mar. 31, 2017

Contractors [Abstract]

UNCOMPLETED CONTRACTS

NOTE 6 - UNCOMPLETED CONTRACTS

Costs, estimated earnings and billings on uncompleted contracts are as follows:

	March 31,			December 31,
	2017			2016
Revenue Recognized	$	1,184,968		$	324,500
Less: Billings to date		(1,184,968	)		(310,900	)
Costs and estimated earnings in excess of billings on uncompleted contracts	$	—		$	13,600
Billings to date	$	2,141,468		$	3,063,500
Revenue recognized		(1,184,968	)		(1,972,700	)
Billings in excess of costs and estimated earnings on uncompleted contracts	$	956,500		$	1,090,800

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INVESTMENT IN PARAGON WASTE SOLUTIONS LLC

3 Months Ended

Mar. 31, 2017

Business Combinations [Abstract]

INVESTMENT IN PARAGON WASTE SOLUTIONS LLC

NOTE 7– INVESTMENT IN PARAGON WASTE SOLUTIONS LLC

In 2010, the Company and Black Stone Management Services, LLC (“Black Stone”) formed PWS, whereby a total of 1,000,000 membership units were issued, 600,000 membership units to the Company and 400,000 membership units to Black Stone. Fortunato Villamagna, who serves as President of our PWS subsidiary, is a managing member and Chairman of Black Stone. In June 2012, the Company and Blackstone each allocated 10% of their respective membership units in PWS to Mr. J John Combs III, an officer and shareholder of the Company and Mr. Michael Cardillo, a shareholder of the Company and an officer of a subsidiary. There was no value attributable to the units at the time of the allocation. At March 31, 2017 and December 31, 2016 the Company owned 54% of the membership units, Black Stone owned 26% of the membership units, an outside third party 10% of the membership units and two related parties (as noted above), each owned 5% of the membership units.

In August, 2011, we acquired certain intellectual property in regards to waste destruction technology (the “IP”) from Black Stone in exchange for 1,000,000 shares of our common stock valued at $100,000. We estimated the useful life of the IP at ten years, which was consistent with the useful life of other technology included in our intangible assets, and management’s initial assessment of the potential marketability of the IP.

Since its inception through March 31, 2017, we have provided approximately $5.7 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 that we will provide the funding as an advance against future earnings distributions made by PWS.

Licensing Agreements

In 2014, Sterall ordered a total of six CoronaLux™ units, of which one unit was delivered during the year ending December 31, 2014, and five units are pending delivery at March 31, 2017. Sterall paid a non-refundable placement fee of $236,300 for the unit delivered in 2014. The fee is being recognized over the term of the agreement. Sterall also has paid a deposit of $330,000 for the five units ordered and a balance of $851,500 is still owed and has been fully reserved by the Company.

On February 22, 2014, SEER and PWS entered into an Agreement with Daniel McAteer & Associates (“DMA”) to develop, permit and exploit the PWS waste destruction technology in Ireland and United Kingdom (“Limited Territory”). The Agreement called for the formation of a Joint Venture to be owned 50% by SEER and 50% by DMA. In accordance with the agreement, DMA was to pay a one-time license fee of $350,000 for an exclusive license for the limited purpose of medical waste destruction in the Limited Territory. On June 10, 2014 Paragon Waste (UK) Ltd (“Paragon UK”, “UK Joint Venture”), was formed in accordance with the laws of Northern Ireland. A total of 300,100 shares were issued upon formation, 100 Ordinary A voting shares were issued, of which PWS received 50 Ordinary A shares and 300,000 Ordinary B non-voting shares were issued. In 2015, the Agreement with DMA was amended to where Paragon UK purchased the CoronaLux™ unit from PWS for $350,000. 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. As of March 31, 2017 a balance of $176,000 is still owed and has been fully reserved by the Company.

On March 4, 2014, PWS entered into a Licensing and Equipment Lease Agreement with eCycling International of South Carolina, LLC (“eCycling”). The License Agreement grants to eCycling the use of the PWS Technology and the CoronaLux™ waste destruction units for an initial term of five years and requires a payment of $176,875 as a non-refundable initial licensing fee and distributions of 50% of net operating profits, as defined in the agreement, in lieu of continuing royalty payments for the use of the licensed technology. eCycling originally paid the $176,875 placement fee to PWS and an additional $176,875 per the amended agreement during the year ended December 31, 2016 and the revenue is being recognized over the term of the Agreement. eCycling is still in the process of permitting the unit, and therefore, has not yet generated any NOP.

On November 17, 2014, PWS entered into an Exclusive Licensing and Equipment Lease Agreement, for a limited license territory, with Medical Waste Services, LLC (“MWS”). The License Agreement grants to MWS the use of the PWS Technology and the CoronaLux™ waste destruction units for an initial term of seven years and requires a payment of $225,000 as a non-refundable initial licensing fee and distributions of 50% of net operating profits, as defined in the agreement, in lieu of continuing royalty payments for the use of the licensed technology. PWS and Medical Waste Services, LLC (“MWS”) formed a contractual joint venture to exploit the PWS medical waste destruction technology. MWS has received approval from the California Department of Public Health and a restricted permit from the South Coast Air Quality Management District (“SCAQMD”) to operate the CoronaLux™ unit licensed by MWS at its facility in Southern California. Operations to date have included the destruction of medical waste under a temporary operating permit issued by SCAQMD since May 2015 and efforts to obtain a full operating permit from SCAQMD were successful and SCAQMD issued a ‘Notice of Intent to Issue Permit to Operate’ in March 2017.

In February 2015, PWS entered into a License Agreement with Particle Science Tech of Environmental Protection, Inc (“Particle”) a US subsidiary of Xinhua Energy Environmental Technology Co., Ltd (“Xinhua”), a large multi-national environmental company based in China. The agreement provides for the exclusive rights to distribute PWS’s patented technology in China, Hong Kong, Macau and the Taiwan territories (“Territory”). The grant was for both the medical waste, as well as the refinery vertical markets within the Territory. The Agreement calls for, among other things, the formation of a U.S. joint venture company, (“P&P Company”), to be owned 50/50 by PWS and Particle) and an obligation by Xinhua to fund all necessary and reasonable capital requirements to permit and roll out the PWS technology in the Territory as well as staff and manage the JV Entity’s operations. In 2015, PWS sold a CoronaLux™ unit to Xinhua for $430,500.

Upon the occurrence of certain events and timely performance by Xinhua, a second placement fee of $350,000 is required to be paid and, upon that second payment, it will then be granted exclusive manufacturing rights to produce the units to be deployed in the Territory.

Payments received for non-refundable licensing and placement fees have been recorded as deferred revenue in the accompanying consolidated balance sheets at March 31, 2017 and December 31, 2016 and are recognized as revenue ratably over the term of the contract.

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PAYROLL TAXES PAYABLE

3 Months Ended

Mar. 31, 2017

Notes to Financial Statements

PAYROLL TAXES PAYABLE

NOTE 8 - PAYROLL TAXES PAYABLE

In 2009 and 2010, REGS, a subsidiary of the Company, became delinquent for unpaid federal employer and employee payroll taxes, accrued interest and penalties were incurred related to these unpaid payroll taxes.

Two of the officers of REGS also have personal liability exposure for a portion of the taxes if REGS does not pay them.

In May 2013, REGS filed an Offer in Compromise (“OIC”) with the IRS. While the OIC was under review by the IRS, the requirement to pay $25,000 a month under the Installment Plan was suspended. REGS was informed by its legal counsel that the IRS had accepted REGS’ OIC. However by a letter dated March 27, 2014, REGS was notified that the OIC had been rejected. REGS then appealed that rejections decision. However that appeal has been denied. As a result, the Installment Plan is terminated. In June 2014, REGS received notices of intent to levy property or rights to property from the IRS for the amounts owed for the past due payroll taxes, penalty and interest. The IRS has not taken any current action against REGS and REGS continues to be represented by its legal counsel.

As of March 31, 2017 and December 31, 2016, the outstanding balance due to the IRS was $976,200, and $970,500, respectively.

Other than this outstanding payroll tax matter arising in 2009 and 2010, all state and federal taxes have been paid by REGS in a timely manner.

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DEBT

3 Months Ended

Mar. 31, 2017

Debt Disclosure [Abstract]

DEBT

NOTE 9 – DEBT

Debt as of March 31, 2017 and December 31, 2016, was comprised of the following:

	2017	2016
Convertible notes payable, interest at 8% per annum, unpaid principal and interest maturing 3 years from note date between August 2018 and October 2019 , convertible into common stock at the option of the lenders at a rate of $0.70 per share; one convertible note for $250,000 has a personal guarantee of an officer of the Company	1,605,000	1,605,000
Debt discount on convertible notes	(13,200)	(14,900)
Secured short term note payable dated October 24, 2016 with principal and interest due 60 days from issuance.  The note requires a one-time fee in the amount of $10,000 to compensate for the first two weeks of the term and each week thereafter (weeks 3-8) a fee of $1,000 shall be due and owing accruing on the first day of the week.  A fee of 100,000 shares of restricted common stock shall be issued as a penalty for each month or prorated for any two-week portion of any month the note is outstanding for months 3 through 6, and a fee of 200,000 shares of restricted common stock shall be issued to lender for each month or prorated for each two-week portion of any month the note is outstanding beginning in month 7 until paid in full. The note is secured by specific customer accounts receivables and a personal guarantee of an officer of the Company.  This note was paid in full in April 2017.  The penalty period for shares to be issued has been reached and for the three months ended March 31, 2017, the Company recorded 300,000 shares of its common stock as issuable under the terms of this agreement. The shares were valued at $210,000 recorded as interest expense. Additional shares will be issued by the Company under the terms of the agreement.	200,000	200,000
Secured short term note payable dated December 1, 2016 with principal and interest due 60 days from issuance.  The note requires a one-time fee in the amount of $10,000 to compensate for the first two weeks of the term and each week thereafter (weeks 3-8) a fee of $1,000 shall be due and owing accruing on the first day of the week.  A fee of 100,000 shares of restricted common stock shall be issued as a penalty for each month or prorated for any two-week portion of any month the note is outstanding for months 3 through 6, and a fee of 200,000 shares of restricted common stock shall be issued to lender for each month or prorated for each two-week portion of any month the note is outstanding beginning in month 7 until paid in full. The note is secured by specific customer accounts receivables and a personal guarantee of an officer of the Company. The penalty period for shares to be issued has been reached and for the three months ended March 31, 2017, the Company recorded 200,000 shares of its common stock as issuable under the terms of this agreement. The shares were valued at $135,000 recorded as interest expense. Additional shares will be issued by the Company under the terms of the agreement.	200,000	200,000
Secured short term note payable dated January 23, 2017 with principal and interest due 60 days from issuance.  The note requires a one-time fee in the amount of $10,000 to compensate for the first two weeks of the term and each week thereafter (weeks 3-8) a fee of $1,000 shall be due and owing accruing on the first day of the week.  A fee of 100,000 shares of restricted common stock shall be issued as a penalty for each month or prorated for any two-week portion of any month the note is outstanding for months 3 through 6, and a fee of 200,000 shares of restricted common stock shall be issued to lender for each month or prorated for each two-week portion of any month the note is outstanding beginning in month 7 until paid in full. The note is secured by specific customer accounts receivables and a personal guarantee of an officer of the Company. The penalty period for shares to be issued has been reached, however, no shares have yet been issued.	200,000	—
Secured short term note payable dated March 30, 2017 with principal and interest due 60 days from issuance.  The note requires a one-time fee in the amount of $10,000 to compensate for the first two weeks of the term and each week thereafter (weeks 3-8) a fee of $1,000 shall be due and owing accruing on the first day of the week.  A fee of 100,000 shares of restricted common stock shall be issued as a penalty for each month or prorated for any two-week portion of any month the note is outstanding for months 3 through 6, and a fee of 200,000 shares of restricted common stock shall be issued to lender for each month or prorated for each two-week portion of any month the note is outstanding beginning in month 7 until paid in full. The note is secured by specific customer accounts receivables and a personal guarantee of an officer of the Company. The penalty period for shares to be issued has not been reached.	250,000	—
Note payable dated October 13, 2015, interest at 8% per annum, payable in 24 monthly installments of principal and interest $4,523, due October 1, 2017.   Secured by certain assets of SEM and guaranteed by SEER and MV	30,800	43,600
Note payable dated October 13, 2015, interest at 8% per annum, payable in 60 monthly installments of principal and interest $4,562, due October 1, 2020.   Secured by real estate and other assets of SEM and guaranteed by SEER and MV	169,800	180,000
Note payable insurance premium financing, interest at 4.25% per annum, payable in 10 installments of $44,706, due November 1, 2017	306,400	—
Capital lease obligations, secured by certain assets, maturing through March 2019	81,000	109,600
Total notes payable and capital lease obligations	3,029,800	2,323,300
Less:  current portion	(1,280,300)	(571,800)
Notes payable and capital lease obligations, long-term, including debt discount	$  1,749,500	$  1,751,500

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RELATED PARTY TRANSACTIONS

3 Months Ended

Mar. 31, 2017

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

NOTE 10 – RELATED PARTY TRANSACTIONS

Notes payable, related parties

Related parties accrued interest due to certain related parties as of March 31, 2017 and December 31, 2016 are as follows:

	2017		2016
Accrued interest	$	11,800	$	11,800
	$	11,800	$	11,800

We believe the stated interest rates on the related party notes payable represent reasonable market rates based on the note payable arrangements we have executed with third parties.

In March 2012, the Company entered into an Irrevocable License & Royalty Agreement with PWS that grants PWS an irrevocable world-wide license to the IP in exchange for a 5% royalty on all revenues from PWS and its affiliates. The term shall commence as of the date of this Agreement and shall continue for a period not to exceed the life of the patent or patents filed by the Company. PWS may sub license the IP and any revenue derived from sub licensing shall be included in the calculation of Gross Revenue for purposes of determining royalty payments due the Company. Royalty payments are due 30 days after the end of each calendar quarter. PWS generated licensing revenues of approximately $47,100 for the three months ended March 31, 2017 and $156,500 for the year ended December 31, 2016, as such, royalties of approximately $19,600 and $17,200 were due at March 31, 2017 and December 31, 2016, respectively.

In August 2014, the Company entered into a second Exchange and Acquisition Agreement (“New Technologies Agreement”) with Black Stone for the acquisition of additional intellectual property (“IP”) from Black Stone in exchange for 1,000,000 shares of common stock valued at $1,050,000. In 2015 the Company and Black Stone executed a rescission agreement of the New Technologies Agreement noted above that was effective December 31, 2014. The shares issued by the Company in accordance with the agreement were returned and all acquired IP returned to Black Stone.

In September 2014, the Company entered into an Equity Purchase Agreement (“Equity Agreement”) with a third party (“Seller”) whereby the Company issued 1,200,000 shares of the Company’s common stock, valued at $1,212,000, in exchange for 22.5 membership interest units, representing 15% ownership interest in Sterall, LLC, a Delaware corporation. In March 2015 the Company and the Seller entered into a revised agreement whereby the 1,200,000 shares issued by the Company would be held by the Seller until the completion of an independent third party valuation. Based on the fair market value of the Purchased Units from the valuation obtained by the Company, an amount of Consideration Shares will be returned to the Company to the extent that the fair market value of the Consideration Shares issued (see below) are greater than the fair market value of the Purchased Units. In no event shall the Company be obligated to issue additional shares as consideration for the Purchased Units. For purposes of this amendment, the fair market value of each Consideration Share will be $0.83333. In the event the parties are unwilling to accept the fair market value of the Purchased Units, as determined by the independent valuation specialist, on or before the Closing Date this Agreement, the transaction covered by this Agreement (the “Contemplated Transaction”) may be rescinded by either Party in writing.

In December 2014, PWS, Sterall, Inc and Sterall LLC entered into a Successor-In-Interest Agreement. The Successor-In-Interest Agreement states that Sterall Inc and Sterall LLC are in the process of consolidating their business under Sterall LLC and all agreements between PWS and Sterall Inc shall be binding in all regards Sterall LLC.

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. Operations to date have included the destruction of medical waste. For the three months ended March 31, 2017 and the year ended December 31, 2016, PWS has recorded $6,200 and $15,700 in income which represents their 50% interest in the net income of the joint venture, respectively. In addition, for the three months ended March 31, 2017 and the year ended December 31, 2016, PWS billed the joint venture approximately $16,000 and $68,000 in costs incurred on behalf of the joint venture, respectively.

Due to the ability of the Company to rescind the shares issued at the commencement of the transaction the shares were considered contingently issuable shares and as such the 1,200,000 share not considered issued and outstanding at December 31, 2015. The 15% ownership interest in Sterall was considered contingently held until the conclusion of this transaction.

As of December 31, 2015 an independent appraisal was not performed and the Amended Equity Agreement expired by its terms. The 1,200,000 shares subject to the original Equity Agreement and the Amended Equity Agreement became unrestricted in 2016 and are now considered issued and outstanding. The shares were valued at $720,000 and have been recorded as a long term other asset pending resolution of claims by the parties involved related to the Sterall licensing agreement from September 2013, Sterall equipment deposits of $330,000 from 2014 and the equity purchase agreement noted above. As of December 31, 2016, a settlement has not been reached by the parties however, they continue to negotiate an agreement and an impairement of the long term asset in the amount of $720.000 was recorded by the Company.

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EQUITY TRANSACTIONS

3 Months Ended

Mar. 31, 2017

Equity [Abstract]

EQUITY TRANSACTIONS

NOTE 11 – EQUITY TRANSACTIONS

2017

During the three months ended March 31, 2017, the Company recorded 500,000 shares of $.001 par value common stock as issuable to short-term note holders as required under their respective agreements. (See Note 9)

During the three months ended March 31, 2017, the Company issued 13,496 shares of its $.001 par value common stock upon the cashless exercise of 166,666 common stock options.

During the three months ended March 31, 2017, the Company issued an option to purchase 1,000,000 shares of its $.001 par value common stock at a strike price of $1.00 to Richard Robertson in connection with his employment agreement dated January 9, 2017. At the date of issuance 100,000 shares vested immediately and the remaining 900,000 options vest over a period of four years in a series of 16 successive equal quarterly installments of 56,250 commencing March 31, 2017 and ending December 31, 2020. The Company used the Black Scholes option pricing model to estimate the fair value of the options granted at $102,354. The assumptions used in calculating such value include a risk-free interest rate of 1.89%, expected volatility of 36.87%, an expected life of 5.5 years and a dividend rate of 0. 

2016

During the three months ended March 31, 2016, the Company sold 600,000 shares of $.001 par value common stock at $.50 per share in a private placement, receiving proceeds of $300,000.

During the three months ended March 31, 2016, the Company issued 50,000 shares of its $.001 par value common stock upon exercise of common stock warrants receiving proceeds of $25,000.

Non-controlling Interest

The non-controlling interest presented in our condensed consolidated financial statements reflects a 46% non-controlling equity interest in PWS (see Note 7). Net loss attributable to non-controlling interest, as reported on our condensed consolidated statements of operations, represents the net loss of PWS attributable to the non-controlling equity interest. The non-controlling interest is reflected within stockholders’ equity on the condensed consolidated balance sheet.

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CUSTOMER CONCENTRATIONS

3 Months Ended

Mar. 31, 2017

Risks and Uncertainties [Abstract]

CUSTOMER CONCENTRATIONS

NOTE 12 – CUSTOMER CONCENTRATIONS

The Company had sales from operations to two customers and one customer for the three months ended March 31, 2017 and 2016 that represented approximately 25% and 55%, respectively, of our total sales. 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 customer for non-financial related issues.

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NET LOSS PER SHARE

3 Months Ended

Mar. 31, 2017

Earnings Per Share [Abstract]

NET LOSS PER SHARE

NOTE 13 – NET LOSS PER SHARE

Basic net loss per share is computed by dividing net loss attributable to common shareholders by the weighted average number of common shares outstanding. Diluted net 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 all years presented in the consolidated financial statements, all potentially dilutive securities have been excluded from the diluted share calculations as they were anti-dilutive as a result of the net losses incurred for the respective years. Accordingly, basic shares equal diluted shares for all years presented.

Potentially dilutive securities were comprised of the following:

	Three Months Ended March 31,
	2017		2016
Warrants		9,665,400		9,314,400
Options		1,190,000		1,055,000
Convertible notes payable, including accrued interest		2,384,300		1,136,400
Contingently issuable shares, Sterall LLC		—		1,200,000
		13,239,700		12,705,800

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ENVIRONMENTAL MATTERS AND REGULATION

3 Months Ended

Mar. 31, 2017

Environmental Remediation Obligations [Abstract]

ENVIRONMENTAL MATTERS AND REGULATION

NOTE 14 - ENVIRONMENTAL MATTERS AND REGULATION

Significant federal environmental laws affecting us are the Resource Conservation and Recovery Act (“RCRA”), the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), also known as the “Superfund Act”, the Clean Air Act, the Clean Water Act and the Toxic Substances Control Act (“TSCA”).

Pursuant to the EPA’s authorization of the RCRA equivalent programs, a number of states have regulatory programs governing the operations and permitting of hazardous waste facilities. Our facilities are regulated pursuant to state statutes, including those addressing clean water and clean air. Our facilities are also subject to local siting, zoning and land use restrictions. We believe we are in substantial compliance with all federal, state and local laws regulating our business.

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SEGMENT INFORMATION AND MAJOR SEGMENT CUSTOMERS

3 Months Ended

Mar. 31, 2017

Segment Reporting [Abstract]

SEGMENT INFORMATION AND MAJOR SEGMENT CUSTOMERS

NOTE 15 - SEGMENT INFORMATION AND MAJOR CUSTOMERS

The Company currently has identified four segments as follows:

REGS	Industrial Cleaning
Tactical	Rail Car Cleaning
MV and SEM	Environmental Solutions
PWS	Solid Waste

Reach has had minimal operations through March 31, 2017.

The composition of our reportable segments is consistent with that used by our Chief Operating Decision Maker (“CODM”) to evaluate performance and allocate resources. All of our operations are located in the U.S. We have not allocated corporate selling, general and administrative expenses, and stock-based compensation to the segments. All intercompany transactions have been eliminated.

Segment information for the three months ended March 31, 2017 and 2016 is as follows:

2017	Industrial		Railcar		Environmental		Solid
	Cleaning		Cleaning		Solutions		Waste			Corporate			Total
Revenue	$	1,411,100	$	1,024,900	$	1,689,000	$	69,300		$	—		$	4,194,300
Depreciation and amortization (1)		83,000		10,400		40,700		32,800			25,000			191,900
Interest expense		6,300		200		4,800		100			415,600			427,000
Stock-based compensation		—		—		—		—			17,000			17,000
Net income (loss)		123,800		207,600		217,400		(111,300	)		(806,200	)		(368,700	)
Capital expenditures (cash and noncash)		—		—		1,320		—			—			1,320
Total assets	$	1,576,700	$	687,500	$	2,149,000	$	1,795,100		$	671,900		$	6,880,200

2016	Industrial		Railcar		Environmental			Solid
	Cleaning		Cleaning		Solutions			Waste			Corporate			Total
Revenue	$	1,984,900	$	875,200	$	572,800		$	71,600		$	—		$	3,504,500
Depreciation and amortization (1)		87,700		10,800		40,100			33,300			22,400			194,300
Interest expense		8,000		2,400		6,500			400			30,400			47,700
Stock-based compensation		—		—		—			—			29,600			29,600
Net income (loss)		583,000		186,600		(97,200	)		(168,700	)		(456,900	)		46,800
Capital expenditures (cash and noncash)		110,700		13,200		9,000			3,800			—			136,700
Total assets	$	2,187,000	$	746,500	$	1,717,400		$	2,967,100		$	574,300		$	8,192,300

(1) Includes depreciation of property, equipment and leasehold improvement and amortization of intangibles

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LITIGATION

3 Months Ended

Mar. 31, 2017

Commitments and Contingencies Disclosure [Abstract]

LITIGATION

NOTE 16 – LITIGATION

In March 2016, a complaint was filed by a lessor of property leased by REGS, a subsidiary of the Company. The month-to-month lease expired February 29, 2016, when REGS vacated the property. The landlord made certain claims including property damage, and loss of rents, attorney fees and other costs totaling approximately $97,000. REGS engaged defense counsel and zealously opposed the claims. In December 2016, the Company and the lessor reached a settlement of $65,000. At March 31, 2017 and December 31, 2016 $6,800 and $39,000 was outstanding, respectively, and subsequently paid in 2017 per the terms of the settlement agreement. The case was dismissed with prejudiced and the matter is closed.

In January 2016, an employee of SEM was involved in a vehicle accident while on Company business. Various actions were filed by the claimants in both state and federal courts. In August 2016, an involuntary proceeding was commenced by one of the claimants against SEM under Chapter 7 of the Bankruptcy code. In September 2016, the case was converted to a Chapter 11 under the Bankruptcy code. During the pendency of all actions, SEM continued to manage its affairs and operate normally. In the fourth quarter of 2016, the parties reached a settlement concerning the distribution of insurance proceeds and all issues of liability. On March 27, 2017 the Bankruptcy Courts confirmed the dismissal of the SEM Chapter 11 case. As part of the bankruptcy proceedings, the Company reached a settlement with claimants and recorded an accrued litigation expense of $212,500 at December 31, 2016. It was agreed among the parties that all pending state and/or federal claims will be dismissed with prejudice.

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SUBSEQUENT EVENTS

3 Months Ended

Mar. 31, 2017

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 17 - SUBSEQUENT EVENTS

In April 2017, the Company paid one short-term note for $200,000 in full with accrued interest. The penalty period for shares to be issued was reached and the Company recorded 300,000 common stock shares as issuable at March 31, 2017 and will record another 50,000 shares as issuable in April 2017. These shares will be issued in the second quarter of 2017.

The Company will issue an additional 350,000 common stock shares related to penalty on three short-term note penalty periods through May 15, 2017.

Effective as of May 1, 2017, we entered into an agreement with Donald F. Moorehead, Jr. in connection with his services as Chairman of the Board of SEER and CEO of Paragon Waste Services (PWS). Mr. Moorhead’s agreement provides for an initial payment of $30,000 and subsequent monthly payments of $5,000. Additionally, Mr. Moorhead will receive 1,000,000 common stock options with strike price of $0.70 and vests over two years at 125,000 per quarter.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

Mar. 31, 2017

Accounting Policies [Abstract]

Use of estimates

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 carrying amount of intangible assets; valuation allowances and reserves for receivables and 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.

Reclassifications

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 income (loss).

Revenue Recognition

Revenue Recognition

We recognize revenue related to contract projects and services when all of the following criteria are met: (i) persuasive evidence of an agreement exists, (ii) delivery has occurred or services have been rendered, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured. Our revenue is primarily comprised of services related to industrial cleaning and railcar cleaning, which we recognize as services are rendered.

Product revenue generated from projects, which include the manufacturing of products, for removal and treatment of hazardous vapor and gasses is accounted for under the percentage-of-completion method for projects with durations in excess of three months and the completed-contract method for all other projects. 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, we 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 percentage-of-completion method, we recognize revenue primarily based on the ratio of costs incurred to date to total estimated contract costs. 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.

For contracts accounted for under the percentage-of-completion method, we include in current assets and current liabilities amounts related to construction 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. Billings in excess of costs and estimated earnings on uncompleted contracts represents the excess of billings to date over the amount of contract costs and profits recognized to date, and are recognized as a current liability.

The Company’s revenues from waste destruction licensing agreements are recognized as a single accounting unit over the term of the license.  In accordance with Accounting Standards Codification (“ASC”) 605, for revenues which contain multiple deliverables, the Company separates the deliverables into separate accounting units if they meet the following criteria: (i) the delivered items have a stand-alone value to the customer; (ii) the fair value of any undelivered items can be reliably determined; and (iii) if the arrangement includes a general right of return, delivery of the undelivered items is probable and substantially controlled by the seller.  Deliverables that do not meet these criteria are combined with one or more other deliverables into one accounting unit.  Revenue from each accounting unit is recognized based on the applicable accounting literature, primarily ASC 605.

Research and Development

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 $600 and $48,500 for the three months ended March 31, 2017 and 2016, respectively.

Income Taxes

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, 2017 and 2016 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 at March 31, 2017 and December 31, 2016. 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, 2015. The tax periods for the years ending December 31, 2009 through 2015 are open to examination by federal and state authorities.

Recently issued accounting pronouncements

Recently issued accounting pronouncements

Changes to accounting principles generally accepted in the United States of America (U.S. GAAP) are established by the Financial Accounting Standards Board (FASB) in the form of accounting standards updates (ASU’s) to the FASB’s Accounting Standards Codification. The Company considers the applicability and impact of all new or revised ASU’s. 

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PROPERTY AND EQUIPMENT (Tables)

3 Months Ended

Mar. 31, 2017

Property, Plant and Equipment [Abstract]

Schedule of property plant and equipment

Property and equipment was comprised of the following:

	March 31, 2017			December 31, 2016
Field and shop equipment	$	2,292,700		$	2,292,700
Vehicles		689,700			689,700
Waste destruction equipment, placed in service		1,355,400			1,355,400
Waste destruction equipment, not placed in service		656,200			656,200
Furniture and office equipment		326,600			325,300
Leasehold improvements		65,400			65,400
Building and improvements		21,200			21,200
Land		162,900			162,900
		5,570,100			5,568,800
Less: accumulated depreciation and amortization		(2,774,300	)		(2,607,500	)
Property and equipment, net	$	2,795,800		$	2,961,300

Schedule of capital leased assets

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

	March 31,			December 31
	2017			2016
Vehicles, field and shop equipment	$	462,700		$	462,700
Less: accumulated amortization		(246,200	)		(222,800	)
	$	216,500		$	239,900

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INTANGIBLE ASSETS (Tables)

3 Months Ended

Mar. 31, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of intangible assets

Intangible assets were comprised of the following:

	March 31, 2017
	Gross carrying amount		Accumulated amortization			Net carrying value
Goodwill	$	277,800		—		$	277,800
Customer list		42,500		(42,500	)		—
Technology		1,069,500		(634,400	)		435,100
Trade name		57,300		(57,300	)		—
	$	1,447,100	$	(734,200	)	$	712,900

	December 31, 2016
	Gross carrying amount		Accumulated amortization			Net carrying value
Goodwill	$	277,800		—		$	277,800
Customer list		42,500		(42,500	)		—
Technology		1,069,500		(609,300	)		460,200
Trade name		57,300		(57,300	)		—
	$	1,447,100	$	(709,100	)	$	738,000

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ACCRUED LIABILITIES (Tables)

3 Months Ended

Mar. 31, 2017

Payables and Accruals [Abstract]

Schedule of accrued liabilities

Accrued liabilities were comprised of the following:

	March 31, 2017		December 31, 2016
Accrued compensation and related taxes	$	644,000	$	644,800
Accrued interest		121,500		58,900
Accrued litigation claims		219,300		277,500
Other		478,100		487,900
Total Accrued Liabilities	$	1,462,900	$	1,469,100

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UNCOMPLETED CONTRACTS (Tables)

3 Months Ended

Mar. 31, 2017

Contractors [Abstract]

Schedule of uncompleted contracts

Costs, estimated earnings and billings on uncompleted contracts are as follows:

	March 31,			December 31,
	2017			2016
Revenue Recognized	$	1,184,968		$	324,500
Less: Billings to date		(1,184,968	)		(310,900	)
Costs and estimated earnings in excess of billings on uncompleted contracts	$	—		$	13,600
Billings to date	$	2,141,468		$	3,063,500
Revenue recognized		(1,184,968	)		(1,972,700	)
Billings in excess of costs and estimated earnings on uncompleted contracts	$	956,500		$	1,090,800

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DEBT (Tables)

3 Months Ended

Mar. 31, 2017

Debt Disclosure [Abstract]

Schedule of debt

Debt as of March 31, 2017 and December 31, 2016, was comprised of the following:

	2017	2016
Convertible notes payable, interest at 8% per annum, unpaid principal and interest maturing 3 years from note date between August 2018 and October 2019 , convertible into common stock at the option of the lenders at a rate of $0.70 per share; one convertible note for $250,000 has a personal guarantee of an officer of the Company	1,605,000	1,605,000
Debt discount on convertible notes	(13,200)	(14,900)
Secured short term note payable dated October 24, 2016 with principal and interest due 60 days from issuance.  The note requires a one-time fee in the amount of $10,000 to compensate for the first two weeks of the term and each week thereafter (weeks 3-8) a fee of $1,000 shall be due and owing accruing on the first day of the week.  A fee of 100,000 shares of restricted common stock shall be issued as a penalty for each month or prorated for any two-week portion of any month the note is outstanding for months 3 through 6, and a fee of 200,000 shares of restricted common stock shall be issued to lender for each month or prorated for each two-week portion of any month the note is outstanding beginning in month 7 until paid in full. The note is secured by specific customer accounts receivables and a personal guarantee of an officer of the Company.  This note was paid in full in April 2017.  The penalty period for shares to be issued has been reached and for the three months ended March 31, 2017, the Company recorded 300,000 shares of its common stock as issuable under the terms of this agreement. The shares were valued at $210,000 recorded as interest expense. Additional shares will be issued by the Company under the terms of the agreement.	200,000	200,000
Secured short term note payable dated December 1, 2016 with principal and interest due 60 days from issuance.  The note requires a one-time fee in the amount of $10,000 to compensate for the first two weeks of the term and each week thereafter (weeks 3-8) a fee of $1,000 shall be due and owing accruing on the first day of the week.  A fee of 100,000 shares of restricted common stock shall be issued as a penalty for each month or prorated for any two-week portion of any month the note is outstanding for months 3 through 6, and a fee of 200,000 shares of restricted common stock shall be issued to lender for each month or prorated for each two-week portion of any month the note is outstanding beginning in month 7 until paid in full. The note is secured by specific customer accounts receivables and a personal guarantee of an officer of the Company. The penalty period for shares to be issued has been reached and for the three months ended March 31, 2017, the Company recorded 200,000 shares of its common stock as issuable under the terms of this agreement. The shares were valued at $135,000 recorded as interest expense. Additional shares will be issued by the Company under the terms of the agreement.	200,000	200,000
Secured short term note payable dated January 23, 2017 with principal and interest due 60 days from issuance.  The note requires a one-time fee in the amount of $10,000 to compensate for the first two weeks of the term and each week thereafter (weeks 3-8) a fee of $1,000 shall be due and owing accruing on the first day of the week.  A fee of 100,000 shares of restricted common stock shall be issued as a penalty for each month or prorated for any two-week portion of any month the note is outstanding for months 3 through 6, and a fee of 200,000 shares of restricted common stock shall be issued to lender for each month or prorated for each two-week portion of any month the note is outstanding beginning in month 7 until paid in full. The note is secured by specific customer accounts receivables and a personal guarantee of an officer of the Company. The penalty period for shares to be issued has been reached, however, no shares have yet been issued.	200,000	—
Secured short term note payable dated March 30, 2017 with principal and interest due 60 days from issuance.  The note requires a one-time fee in the amount of $10,000 to compensate for the first two weeks of the term and each week thereafter (weeks 3-8) a fee of $1,000 shall be due and owing accruing on the first day of the week.  A fee of 100,000 shares of restricted common stock shall be issued as a penalty for each month or prorated for any two-week portion of any month the note is outstanding for months 3 through 6, and a fee of 200,000 shares of restricted common stock shall be issued to lender for each month or prorated for each two-week portion of any month the note is outstanding beginning in month 7 until paid in full. The note is secured by specific customer accounts receivables and a personal guarantee of an officer of the Company. The penalty period for shares to be issued has not been reached.	250,000	—
Note payable dated October 13, 2015, interest at 8% per annum, payable in 24 monthly installments of principal and interest $4,523, due October 1, 2017.   Secured by certain assets of SEM and guaranteed by SEER and MV	30,800	43,600
Note payable dated October 13, 2015, interest at 8% per annum, payable in 60 monthly installments of principal and interest $4,562, due October 1, 2020.   Secured by real estate and other assets of SEM and guaranteed by SEER and MV	169,800	180,000
Note payable insurance premium financing, interest at 4.25% per annum, payable in 10 installments of $44,706, due November 1, 2017	306,400	—
Capital lease obligations, secured by certain assets, maturing through March 2019	81,000	109,600
Total notes payable and capital lease obligations	3,029,800	2,323,300
Less:  current portion	(1,280,300)	(571,800)
Notes payable and capital lease obligations, long-term, including debt discount	$  1,749,500	$  1,751,500

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RELATED PARTY TRANSACTIONS (Tables)

3 Months Ended

Mar. 31, 2017

Related Party Transactions [Abstract]

Schedule of notes payable and accrued interest, related parties

Related parties accrued interest due to certain related parties as of March 31, 2017 and December 31, 2016 are as follows:

	2017		2016
Accrued interest	$	11,800	$	11,800
	$	11,800	$	11,800

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NET LOSS PER SHARE (Tables)

3 Months Ended

Mar. 31, 2017

Earnings Per Share [Abstract]

Schedule of potentially dilutive securities

Potentially dilutive securities were comprised of the following:

	Three Months Ended March 31,
	2017		2016
Warrants		9,665,400		9,314,400
Options		1,190,000		1,055,000
Convertible notes payable, including accrued interest		2,384,300		1,136,400
Contingently issuable shares, Sterall LLC		—		1,200,000
		13,239,700		12,705,800

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SEGMENT INFORMATION (Tables)

3 Months Ended

Mar. 31, 2017

Segment Reporting [Abstract]

Schedule of segment information

Segment information for the three months ended March 31, 2017 and 2016 is as follows:

2017	Industrial		Railcar		Environmental		Solid
	Cleaning		Cleaning		Solutions		Waste			Corporate			Total
Revenue	$	1,411,100	$	1,024,900	$	1,689,000	$	69,300		$	—		$	4,194,300
Depreciation and amortization (1)		83,000		10,400		40,700		32,800			25,000			191,900
Interest expense		6,300		200		4,800		100			415,600			427,000
Stock-based compensation		—		—		—		—			17,000			17,000
Net income (loss)		123,800		207,600		217,400		(111,300	)		(806,200	)		(368,700	)
Capital expenditures (cash and noncash)		—		—		1,320		—			—			1,320
Total assets	$	1,576,700	$	687,500	$	2,149,000	$	1,795,100		$	671,900		$	6,880,200

2016	Industrial		Railcar		Environmental			Solid
	Cleaning		Cleaning		Solutions			Waste			Corporate			Total
Revenue	$	1,984,900	$	875,200	$	572,800		$	71,600		$	—		$	3,504,500
Depreciation and amortization (1)		87,700		10,800		40,100			33,300			22,400			194,300
Interest expense		8,000		2,400		6,500			400			30,400			47,700
Stock-based compensation		—		—		—			—			29,600			29,600
Net income (loss)		583,000		186,600		(97,200	)		(168,700	)		(456,900	)		46,800
Capital expenditures (cash and noncash)		110,700		13,200		9,000			3,800			—			136,700
Total assets	$	2,187,000	$	746,500	$	1,717,400		$	2,967,100		$	574,300		$	8,192,300

(1) Includes depreciation of property, equipment and leasehold improvement and amortization of intangibles

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ORGANIZATION AND FINANCIAL CONDITION (Details Narrative) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2017	Dec. 31, 2016		Dec. 31, 2015
Accumulated deficit	$ (19,642,200)	$ (19,273,500)	[1]
Net losses before adjustment for losses attributable to non-controlling interest	(368,700)	(4,700,000)		$ (3,400,000)
Working capital	(3,900,000)	(4,000,000)
Change in working capital	$ 100,000
Paragon Waste Solutions, LLC [Member]
Percentage ownership	54.00%
ReaCH4Biogas [Member]
Percentage ownership	85.00%
Resource Environmental Group Services [Member] | Sales Revenue [Member]
Reduction in revenue		$ 2,500,000

[1] These numbers were derived from the audited financial statements for the year ended December 31, 2016.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Accounting Policies [Abstract]
Research and development expenses	$ 600	$ 48,500

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PROPERTY AND EQUIPMENT (Details) - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 5,570,100	$ 5,568,800
Less: accumulated depreciation and amortization	(2,774,300)	(2,607,500)
Property and equipment, net	2,795,800	2,961,300	[1]
Field and Shop Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	2,292,700	2,292,700
Vehicles [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	689,700	689,700
Waste Destruction Equipment Placed In Service [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	1,355,400	1,355,400
Waste Destruction Equipment, Not Placed In Service [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	656,200	656,200
Furniture And Office Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	326,600	325,300
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	65,400	65,400
Building and Improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	21,200	21,200
Land [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 162,900	$ 162,900

[1] These numbers were derived from the audited financial statements for the year ended December 31, 2016.

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PROPERTY AND EQUIPMENT (Details 1) - Field and Shop Equipment [Member] - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Property, Plant and Equipment [Line Items]
Vehicles, field and shop equipment	$ 462,700	$ 462,700
Less: accumulated amortization	(246,200)	(222,800)
Capital lease, net	$ 216,500	$ 239,900

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PROPERTY AND EQUIPMENT (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Depreciation expense	$ 166,700	$ 171,500
CoronaLux Units [Member]
Accumulated depreciation	335,875	206,300
Cost of Sales [Member]
Depreciation expense	142,400	147,300
Selling, general and administrative expense [Member]
Depreciation expense	$ 24,300	$ 24,200

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INTANGIBLE ASSETS (Details) - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	$ 1,447,100	$ 1,447,100
Accumulated amortization	(734,200)	(709,100)
Net carrying value	712,900	738,000	[1]
Goodwill [Member]
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	277,800	277,800
Net carrying value	277,800	277,800
Customer List [Member]
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	42,500	42,500
Accumulated amortization	(42,500)	(42,500)
Technology [Member]
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	1,069,500	1,069,500
Accumulated amortization	(634,400)	(609,300)
Net carrying value	435,100	460,200
Trade Name [Member]
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	57,300	57,300
Accumulated amortization	$ (57,300)	$ (57,300)

[1] These numbers were derived from the audited financial statements for the year ended December 31, 2016.

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INTANGIBLE ASSETS (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Amortization expense	$ 25,100	$ 22,800
Lower Range [Member]
Estimated useful lives of intangible assets	7 years
Upper Range [Member]
Estimated useful lives of intangible assets	10 years

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ACCRUED LIABILITIES (Details) - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Payables and Accruals [Abstract]
Accrued compensation and related taxes	$ 644,000	$ 644,800
Accrued interest	121,500	58,900
Accrued litigation claims	219,300	277,500
Other	478,100	487,900
Total Accrued Liabilities	$ 1,462,900	$ 1,469,100

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UNCOMPLETED CONTRACTS (Details) - USD ($)		3 Months Ended	12 Months Ended
		Mar. 31, 2017	Dec. 31, 2016
Less: Billings to date		$ 2,141,468	$ 3,063,500
Costs and estimated earnings in excess of billings on uncompleted contracts	[1]		13,600
Revenue recognized		(1,184,968)	(1,972,700)
Billings in excess of costs and estimated earnings on uncompleted contracts		956,500	1,090,800
Contracts Receivable [Member]
Revenue Recognized		1,184,968	324,500
Less: Billings to date		$ (1,184,968)	$ (310,900)

[1] These numbers were derived from the audited financial statements for the year ended December 31, 2016.

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INVESTMENT IN PARAGON WASTE SOLUTIONS LLC (Details Narrative) - USD ($)

1 Months Ended

3 Months Ended

12 Months Ended

62 Months Ended

Nov. 17, 2014

Jun. 10, 2014

Mar. 04, 2014

Feb. 22, 2014

Feb. 28, 2015

Jun. 30, 2012

Aug. 31, 2011

Mar. 31, 2017

Mar. 31, 2016

Dec. 31, 2016

Dec. 31, 2014

Dec. 31, 2010

Mar. 31, 2017

Business Acquisition [Line Items]

License initiation fee

$ 69,300

$ 71,600

Customer deposits

330,000

$ 330,000

^[1]

$ 330,000

Formation of Joint Venture Agreement [Member] | Ordinary A Voting Shares [Member]

Business Acquisition [Line Items]

Membership units issued

100

Formation of Joint Venture Agreement [Member] | Ordinary B Non-Voting Shares [Member]

Business Acquisition [Line Items]

Membership units issued

300,000

Exclusive Use License and Joint Operations Agreement with Sterall Inc [Member]

Business Acquisition [Line Items]

Non-refundable placement fees received

$ 236,300

Customer deposits

$ 330,000

Description of order

Sterall also has paid a deposit of $330,000 for the five units ordered and a balance of $851,500 is still owed and has been fully reserved by the Company.

Accounts receivable

$ 851,500

$ 851,500

Exclusive Use License and Equipment Lease Agreement with eCycling International [Member]

Business Acquisition [Line Items]

License initiation fee

$ 176,875

Percentage of net operating profits to be distributed

50.00%

Licensing fees paid

176,875

Additional licensing fees paid

$ 176,875

Exclusive Use License and Equipment Lease Agreement with Medical Waste Services, LLC [Member]

Business Acquisition [Line Items]

License initiation fee

$ 225,000

Percentage of net operating profits to be distributed

50.00%

Outside Third Party [Member]

Business Acquisition [Line Items]

Percentage ownership

10.00%

10.00%

10.00%

Daniel McAteer & Associates ("DMA") [Member] | Formation of Joint Venture Agreement [Member]

Business Acquisition [Line Items]

Percentage ownership

50.00%

License initiation fee

$ 350,000

Paragon Waste (UK) Ltd [Member] | Formation of Joint Venture Agreement [Member]

Business Acquisition [Line Items]

Membership units issued

300,100

Accounts receivable

$ 176,000

$ 176,000

Paragon Waste (UK) Ltd [Member] | Formation of Joint Venture Agreement [Member] | Ordinary A Voting Shares [Member]

Business Acquisition [Line Items]

Membership units issued

50

Black Stone Management Services [Member]

Business Acquisition [Line Items]

Membership units acquired

400,000

Percentage ownership

26.00%

26.00%

26.00%

Percentage allocated to two individuals

10.00%

Stock issued for acquisition of intellectual property

$ 100,000

Stock issued for acquisition of intellectual property (in shares)

1,000,000

Black Stone Management Services [Member] | Waste Destruction Technology [Member]

Business Acquisition [Line Items]

Useful life

10 years

Related Parties [Member]

Business Acquisition [Line Items]

Percentage ownership

5.00%

5.00%

5.00%

Xinhua Energy Environmental Technology [Member]

Business Acquisition [Line Items]

Sale of waste destruction unit

$ 430,500

Second phase royalty fees payment

$ 350,000

Percentage of net operating profits to be distributed

50.00%

Paragon Waste Solutions, LLC [Member]

Business Acquisition [Line Items]

Membership units issued

1,000,000

Membership units acquired

600,000

Percentage ownership

54.00%

54.00%

54.00%

Payment for funding of subsidiary

$ 5,700,000

[1] These numbers were derived from the audited financial statements for the year ended December 31, 2016.

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PAYROLL TAXES PAYABLE (Details Narrative) - IRS [Member] - USD ($)	1 Months Ended
	May 31, 2013	Mar. 31, 2017	Dec. 31, 2016
Past due payroll taxes		$ 976,200	$ 970,500
Monthly installment payments, payroll taxes	$ 25,000

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DEBT (Details)

3 Months Ended

Mar. 31, 2017

USD ($)

Number

$ / shares

shares

Dec. 31, 2016

USD ($)

Debt Instrument [Line Items]

Notes and capital lease obligation, total

$ 3,029,800

$ 2,323,300

Notes and capital lease obligation, current

(1,280,300)

(571,800)

^[1]

Notes and capital lease obligation, long-term

$ 1,749,500

1,751,500

^[1]

Shares issuable per short-term note agreements | shares

500,000

October 24, 2016 Short Term Note Payable [Member]

Debt Instrument [Line Items]

Debt issuance date

Oct. 24, 2016

Long term debt, carrying amount

$ 200,000

200,000

Debt term

60 days

One-time commitment fee

$ 10,000

Recurring commitment fees

$ 1,000

Description of commitment fees

The note requires a one-time fee in the amount of $10,000 to compensate for the first two weeks of the term and each week thereafter (weeks 3-8) a fee of $1,000 shall be due and owing accruing on the first day of the week. 

Collateral description

The note is secured by specific customer accounts receivables and a personal guarantee of an officer of the Company.

Description of debt penalty

A fee of 100,000 shares of restricted common stock shall be issued as a penalty for each month or prorated for any two-week portion of any month the note is outstanding for months 3 through 6, and a fee of 200,000 shares of restricted common stock shall be issued to lender for each month or prorated for each two-week portion of any month the note is outstanding beginning in month 7 until paid in full.

Shares to be issued per month if note outstanding months 3 through 6 | shares

100,000

Shares to be issued per month if notes outsatnding 7 months or longer | shares

200,000

Shares issuable per short-term note agreements | shares

300,000

Interest expense - debt

$ 210,000

Short Term Note Payable December 2016 [Member]

Debt Instrument [Line Items]

Debt issuance date

Dec. 01, 2016

Long term debt, carrying amount

$ 200,000

200,000

Debt term

60 days

One-time commitment fee

$ 10,000

Recurring commitment fees

$ 1,000

Description of commitment fees

The note requires a one-time fee in the amount of $10,000 to compensate for the first two weeks of the term and each week thereafter (weeks 3-8) a fee of $1,000 shall be due and owing accruing on the first day of the week.

Collateral description

The note is secured by specific customer accounts receivables and a personal guarantee of an officer of the Company.

Description of debt penalty

A fee of 100,000 shares of restricted common stock shall be issued as a penalty for each month or prorated for any two-week portion of any month the note is outstanding for months 3 through 6, and a fee of 200,000 shares of restricted common stock shall be issued to lender for each month or prorated for each two-week portion of any month the note is outstanding beginning in month 7 until paid in full.

Shares to be issued per month if note outstanding months 3 through 6 | shares

100,000

Shares to be issued per month if notes outsatnding 7 months or longer | shares

200,000

Shares issuable per short-term note agreements | shares

200,000

Interest expense - debt

$ 135,000

Short Term Note Payable January 23, 2017 [Member]

Debt Instrument [Line Items]

Debt issuance date

Jan. 23, 2017

Long term debt, carrying amount

$ 200,000

Debt term

60 days

One-time commitment fee

$ 10,000

Recurring commitment fees

$ 1,000

Description of commitment fees

The note requires a one-time fee in the amount of $10,000 to compensate for the first two weeks of the term and each week thereafter (weeks 3-8) a fee of $1,000 shall be due and owing accruing on the first day of the week.  

Collateral description

The note is secured by specific customer accounts receivables and a personal guarantee of an officer of the Company.

Description of debt penalty

A fee of 100,000 shares of restricted common stock shall be issued as a penalty for each month or prorated for any two-week portion of any month the note is outstanding for months 3 through 6, and a fee of 200,000 shares of restricted common stock shall be issued to lender for each month or prorated for each two-week portion of any month the note is outstanding beginning in month 7 until paid in full.

Shares to be issued per month if note outstanding months 3 through 6 | shares

100,000

Shares to be issued per month if notes outsatnding 7 months or longer | shares

200,000

Short Term Note Payable March 30, 2017 [Member]

Debt Instrument [Line Items]

Debt issuance date

Mar. 30, 2017

Long term debt, carrying amount

$ 250,000

Debt term

60 days

One-time commitment fee

$ 10,000

Recurring commitment fees

$ 1,000

Description of commitment fees

The note requires a one-time fee in the amount of $10,000 to compensate for the first two weeks of the term and each week thereafter (weeks 3-8) a fee of $1,000 shall be due and owing accruing on the first day of the week.  

Collateral description

The note is secured by specific customer accounts receivables and a personal guarantee of an officer of the Company.

Description of debt penalty

A fee of 100,000 shares of restricted common stock shall be issued as a penalty for each month or prorated for any two-week portion of any month the note is outstanding for months 3 through 6, and a fee of 200,000 shares of restricted common stock shall be issued to lender for each month or prorated for each two-week portion of any month the note is outstanding beginning in month 7 until paid in full.

Shares to be issued per month if note outstanding months 3 through 6 | shares

100,000

Shares to be issued per month if notes outsatnding 7 months or longer | shares

200,000

8% Convertible Secured Promissory Note due August 2018 and October 2019 [Member]

Debt Instrument [Line Items]

Long term debt, carrying amount

$ 1,605,000

1,605,000

Interest rate

8.00%

Debt term

3 years

Debt discount

$ (13,200)

(14,900)

Debt conversion, price | $ / shares

$ 0.70

Collateral description

one convertible note for $250,000 has a personal guarantee of an officer of the Company

8% Convertible Secured Promissory Note due August 2018 and October 2019 [Member] | Lower Range [Member]

Debt Instrument [Line Items]

Debt, maturity date

Aug. 01, 2018

8% Convertible Secured Promissory Note due August 2018 and October 2019 [Member] | Upper Range [Member]

Debt Instrument [Line Items]

Debt, maturity date

Oct. 31, 2019

8% Secured Notes Payable Due October 1, 2017 [Member]

Debt Instrument [Line Items]

Debt issuance date

Oct. 13, 2015

Long term debt, carrying amount

$ 30,800

43,600

Interest rate

8.00%

Frequency of payments

Monthly

Payment amount

$ 4,523

Number of installment payments | Number

24

Debt term

24 months

Debt, maturity date

Oct. 01, 2017

Collateral description

Secured by certain assets of SEM and guaranteed by SEER and MV

8% Secured Notes Payable Due October 1, 2020 [Member]

Debt Instrument [Line Items]

Debt issuance date

Oct. 13, 2015

Long term debt, carrying amount

$ 169,800

180,000

Interest rate

8.00%

Frequency of payments

Monthly

Payment amount

$ 4,562

Number of installment payments | Number

60

Debt, maturity date

Oct. 01, 2020

Collateral description

Secured by real estate and other assets of SEM and guaranteed by SEER and MV

Notes Payable Due November 1, 2017 [Member]

Debt Instrument [Line Items]

Long term debt, carrying amount

$ 306,400

Interest rate

4.25%

Description of debt instrument interest payment

44,706

Number of installment payments | Number

10

Debt, maturity date

Nov. 01, 2017

Capital lease obligations [Member]

Debt Instrument [Line Items]

Capital lease obligation, carrying amount

$ 81,000

$ 109,600

[1] These numbers were derived from the audited financial statements for the year ended December 31, 2016.

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RELATED PARTY TRANSACTIONS (Details) - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Related Party Transaction [Line Items]
Accrued interest	$ 1,462,900	$ 1,469,100	[1]
Related Parties [Member]
Related Party Transaction [Line Items]
Accrued interest	$ 11,800	$ 11,800

[1] These numbers were derived from the audited financial statements for the year ended December 31, 2016.

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RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)	1 Months Ended			3 Months Ended		12 Months Ended
	Sep. 30, 2014	Aug. 30, 2014	Mar. 31, 2012	Mar. 31, 2017		Dec. 31, 2016		Dec. 31, 2015
Related Party Transaction [Line Items]
Common stock, issued				55,038,575	[1]	54,525,079
Common stock, outstanding				55,038,575		54,525,079
Long term other asset				$ 25,600		$ 25,600	[2]
Paragon Waste Solutions, LLC [Member]
Related Party Transaction [Line Items]
Percentage ownership				54.00%
Income from joint venture				$ 6,200		15,700
Percentage of net income in joint venture				50.00%
Cost incurred for joint venture				$ 16,000		68,000
Paragon Waste Solutions, LLC [Member] | Irrevocable License & Royalty Agreement [Member]
Related Party Transaction [Line Items]
Percentage of royalty revenue			5.00%
Irrevocable License & Royalty Agreement with PWS [Member]
Related Party Transaction [Line Items]
Related party revenues				47,100		156,500
Royalties due				$ 19,600		17,200
New Technologies Agreement with Black Stone [Member]
Related Party Transaction [Line Items]
Issuance of common stock for intangible assets		$ 1,050,000
Number of shares of common stock issued for intangible asset		1,000,000
Equity Agreement With Third Party [Member]
Related Party Transaction [Line Items]
Issuance of common stock for investment in unconsolidated subsidaiary	$ 1,212,000
Membership interests acquired	22.5
Number of shares issued for investment in unconsolidated affiliate	1,200,000
Common stock, fair value (in dollars per shares)	$ 0.83333
Percentage ownership				15.00%
Common stock, issued								1,200,000
Common stock, outstanding								1,200,000
Long term other asset						720,000
Sterall equipment deposits						$ 330,000

[1] Includes 500,000 shares issuable at March 31, 2017 per terms of short-term note agreements.

[2] These numbers were derived from the audited financial statements for the year ended December 31, 2016.

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EQUITY TRANSACTIONS (Details Narrative) - USD ($)

3 Months Ended

Mar. 31, 2017

Mar. 31, 2016

Dec. 31, 2016

Common stock, par value (in dollars per shares)

$ 0.001

$ 0.001

Shares issuable per short-term note agreements

500,000

Cashless stock option exercise

13,496

Paragon Waste Solutions, LLC [Member]

Non-controlling Interest

46.00%

Warrants [Member]

Common stock, par value (in dollars per shares)

$ 0.001

Proceeds from warrant exercises

$ 25,000

Number of warrants exercised

50,000

2016 Private Placement [Member]

Common stock, par value (in dollars per shares)

$ 0.001

Number of shares issued during the period

600,000

Proceeds from stock issuance

$ 300,000

Sale price per share

$ 0.50

Stock Options [Member]

Cashless stock option exercise

(166,666)

Options issued

1,000,000

Exercise price of options issued

$ 1.00

Vesting terms of options

100,000 shares vested immediately and the remaining 900,000 options vest over a period of four years in a series of 16 successive equal quarterly installments of 56,250 commencing March 31, 2017 and ending December 31, 2020

Shares vested on issuance of option

100,000

Vesting period of options

4 years

Fair value of options at grant date

$ 102,354

Risk-free interest rate

1.89%

Expected volatility

36.87%

Expected life

5 years 6 months

Dividend rate

0.00%

Short Term Notes [Member]

Common stock, par value (in dollars per shares)

$ 0.001

Shares issuable per short-term note agreements

500,000

XML

CUSTOMER CONCENTRATIONS (Details Narrative) - Sales [Member] - Number	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Number of customers	2	1
Concentration risk	25.00%	55.00%

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NET LOSS PER SHARE (Details) - shares	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities	13,239,700	12,705,800
Convertible Notes Payable [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities	2,384,300	1,136,400
Contingently Issuable Shares Sterall LLC [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities		1,200,000
Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities	1,190,000	1,055,000
Warrants [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities	9,665,400	9,314,400

XML

SEGMENT INFORMATION AND MAJOR CUSTOMERS (Details) - USD ($)		3 Months Ended
		Mar. 31, 2017	Mar. 31, 2016
Segment Reporting Information [Line Items]
Revenue		$ 4,194,300	$ 3,504,500
Depreciation and amortization	[1]	191,900	194,300
Interest expense		427,100	47,700
Stock-based compensation		17,000	29,600
Net income (loss)		(368,700)	46,800
Capital expenditures (cash and noncash)		1,320	136,700
Total assets		7,184,300	8,192,300
Industrial Cleaning [Member]
Segment Reporting Information [Line Items]
Revenue		1,411,100	1,984,900
Depreciation and amortization	[1]	83,000	87,700
Interest expense		6,300	8,000
Net income (loss)		123,800	583,000
Capital expenditures (cash and noncash)			110,700
Total assets		1,576,700	2,187,000
Railcar Cleaning [Member]
Segment Reporting Information [Line Items]
Revenue		1,024,900	875,200
Depreciation and amortization	[1]	10,400	10,800
Interest expense		200	2,400
Net income (loss)		207,600	186,600
Capital expenditures (cash and noncash)			13,200
Total assets		687,500	746,500
Environmental Solutions [Member]
Segment Reporting Information [Line Items]
Revenue		1,689,000	572,800
Depreciation and amortization	[1]	40,700	40,100
Interest expense		4,800	6,500
Net income (loss)		217,400	(97,200)
Capital expenditures (cash and noncash)		1,320	9,000
Total assets		2,149,000	1,717,400
Solid Waste [Member]
Segment Reporting Information [Line Items]
Revenue		69,300	71,600
Depreciation and amortization	[1]	32,800	33,300
Interest expense		100	400
Net income (loss)		(111,300)	(168,700)
Capital expenditures (cash and noncash)			3,800
Total assets		1,795,100	2,967,100
Corporate [Member]
Segment Reporting Information [Line Items]
Depreciation and amortization	[1]	25,000	22,400
Interest expense		415,600	30,400
Stock-based compensation		17,000	29,600
Net income (loss)		(806,200)	(456,900)
Total assets		$ 671,900	$ 574,300

[1] Includes depreciation of property, equipment and leasehold improvement and amortization of intangibles

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LITIGATION (Details Narrative) - USD ($)

1 Months Ended

12 Months Ended

Dec. 31, 2016

Mar. 31, 2016

Jan. 31, 2016

Dec. 31, 2016

Mar. 31, 2017

Litigation Case - Property Leased [Member]

Loss Contingencies [Line Items]

Lease expiration date

Feb. 29, 2016

Damages sought value

$ 97,000

Settlement amount

$ 65,000

Settlement payable

$ 39,000

$ 39,000

$ 6,800

Description of allegation

certain claims including property damage, and loss of rents, attorney fees and other costs

Description of settlement

In December 2016, the Company and the lessor reached a settlement of $65,000.

Name of plaintiff

Landlord

Name of defendant

REGS, a subsidiary of the Company.

Accrued litigation expense

$ 212,500

Litigation Case - Vehicle Accident [Member]

Loss Contingencies [Line Items]

Description of allegation

an employee of SEM was involved in a vehicle accident while on Company business. Various actions were filed by the claimants in both state and federal courts.

Description of settlement

In the fourth quarter of 2016, the parties reached a settlement concerning the distribution of insurance proceeds and all issues of liability.

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SUBSEQUENT EVENTS (Details Narrative) - USD ($)

1 Months Ended

3 Months Ended

May 15, 2017

Apr. 30, 2017

Mar. 31, 2017

Subsequent Event [Line Items]

Shares issuable per short-term note agreements

500,000

Stock Options [Member]

Subsequent Event [Line Items]

Options issued

1,000,000

Exercise price of options issued

$ 1.00

Vesting terms of options

100,000 shares vested immediately and the remaining 900,000 options vest over a period of four years in a series of 16 successive equal quarterly installments of 56,250 commencing March 31, 2017 and ending December 31, 2020

Vesting period of options

4 years

Subsequent Event [Member]

Subsequent Event [Line Items]

Shares issuable per short-term note agreements

50,000

Repayment of short-term debt

$ 200,000

Number of shares issued for penalty

350,000

Subsequent Event [Member] | Board of Directors Chairman [Member]

Subsequent Event [Line Items]

Options issued

1,000,000

Exercise price of options issued

$ 0.70

Vesting terms of options

vests over two years at 125,000 per quarter

Vesting period of options

2 years

Subsequent Event [Member] | Board of Directors Chairman [Member] | Stock Options [Member]

Subsequent Event [Line Items]

Terms of agreement with director

provides for an initial payment of $30,000 and subsequent monthly payments of $5,00

Initial payment paid to director

$ 30,000

Monthly payments to be paid to director

$ 5,000