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As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 11/10/22 Correlate Infrastructure Par… Inc 10-Q 9/30/22 41:2.9M Discount Edgar/FA |
Document/Exhibit Description Pages Size
1: 10-Q Quarterly Report HTML 704K
2: EX-31.1 Certification -- §302 - SOA'02 HTML 18K
3: EX-31.2 Certification -- §302 - SOA'02 HTML 18K
4: EX-32.1 Certification -- §906 - SOA'02 HTML 14K
5: EX-32.2 Certification -- §906 - SOA'02 HTML 14K
11: R1 Cover HTML 62K
12: R2 Condensed Consolidated Balance Sheets HTML 120K
13: R3 Condensed Consolidated Balance Sheets HTML 35K
(Parenthetical)
14: R4 Condensed Consolidated Statements of Operations HTML 77K
(Unaudited)
15: R5 Condensed Consolidated Statements of Stockholders' HTML 65K
Equity (Deficit) (Unaudited)
16: R6 Condensed Consolidated Statements of Cash Flows HTML 80K
(Unaudited)
17: R7 Nature of the Organization and Business HTML 20K
18: R8 Summary of Significant Accounting Policies HTML 32K
19: R9 Commitments and Contingencies HTML 17K
20: R10 Debt HTML 22K
21: R11 Equity HTML 40K
22: R12 Concentrations HTML 47K
23: R13 Related Party Transactions HTML 20K
24: R14 Subsequent Events HTML 21K
25: R15 Summary of Significant Accounting Policies HTML 65K
(Policies)
26: R16 Equity (Tables) HTML 32K
27: R17 Concentrations (Tables) HTML 45K
28: R18 Summary of Significant Accounting Policies HTML 19K
(Details Narrative)
29: R19 Commitments and Contingencies (Details Narrative) HTML 25K
30: R20 Debt (Details Narrative) HTML 51K
31: R21 Equity (Details) HTML 30K
32: R22 Equity (Details 1) HTML 34K
33: R23 Equity (Details Narrative) HTML 97K
34: R24 Concentrations (Details) HTML 32K
35: R25 Related Party Transactions (Details Narrative) HTML 32K
36: R26 Subsequent Events (Details Narrative) HTML 43K
39: XML IDEA XML File -- Filing Summary XML 65K
37: XML XBRL Instance -- cipi_10q_htm XML 668K
38: EXCEL IDEA Workbook of Financial Reports XLSX 66K
8: EX-101.CAL XBRL Calculations -- cipi-20220930_cal XML 97K
10: EX-101.DEF XBRL Definitions -- cipi-20220930_def XML 293K
7: EX-101.LAB XBRL Labels -- cipi-20220930_lab XML 529K
9: EX-101.PRE XBRL Presentations -- cipi-20220930_pre XML 413K
6: EX-101.SCH XBRL Schema -- cipi-20220930 XSD 101K
40: JSON XBRL Instance as JSON Data -- MetaLinks 214± 293K
41: ZIP XBRL Zipped Folder -- 0001477932-22-008312-xbrl Zip 123K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM i 10-Q
i ☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended i September 30, 2022 OR
i ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission File No. i 000-55825
i CORRELATE INFRASTRUCTURE PARTNERS INC. |
(Exact name of registrant as specified in its charter) |
i Nevada |
| i 84-4250492 |
(State or other jurisdiction of incorporation or organization) |
| (I.R.S. Employer Identification No.) |
|
|
|
i 220 Travis Street, i Suite 501 i Shreveport, i Louisiana |
| i 71101 |
(Address of Principal Executive Offices) |
| (Zip Code) |
( i 855)- i 264-4060
(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)
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. i Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). i Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated Filer | ☐ | Smaller reporting company | i ☒ |
Accelerated Filer | ☐ | Emerging growth company | i ☐ |
i Non-accelerated Filer | ☒ |
|
|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes i ☐ No ☒
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. The number of shares of Common Stock, par value $0.0001 per share, outstanding as of November 10, 2022 was i 35,229,420.
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
None | N/A | N/A |
CORRELATE INFRASTRUCTURE PARTNERS INC.
| 2 |
| Table of Contents |
PART 1 — FINANCIAL INFORMATION
CORRELATE INFRASTRUCTURE PARTNERS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2022 AND DECEMBER 31, 2021
(Unaudited)
|
| September 30, |
|
|
| |||
|
| 2022 |
|
| 2021 |
| ||
|
|
|
|
| ||||
Assets |
| |||||||
Current assets |
|
|
|
|
|
| ||
Cash |
| $ | i 348,688 |
|
| $ | i 252,189 |
|
Accounts receivable, net of allowance for doubtful accounts |
|
| i 423,835 |
|
|
| i 40,807 |
|
Inventory |
|
| i 174,843 |
|
|
| i - |
|
Prepaid expenses and other current assets |
|
| i 94,983 |
|
|
| i - |
|
Total current assets |
|
| i 1,042,349 |
|
|
| i 292,996 |
|
|
|
|
|
|
|
|
|
|
Property and equipment |
|
|
|
|
|
|
|
|
Property and equipment |
|
| i 8,305 |
|
|
| i - |
|
Accumulated depreciation |
|
| ( i 400 | ) |
|
| i - |
|
Total property and equipment |
|
| i 7,905 |
|
|
| i - |
|
|
|
|
|
|
|
|
|
|
Other assets |
|
|
|
|
|
|
|
|
Intangible assets - trademark/trade name |
|
| i 139,700 |
|
|
| i 139,700 |
|
Intangible assets - customer relationships, net |
|
| i 198,730 |
|
|
| i 233,800 |
|
Intangible assets - developed technology, net |
|
| i 17,340 |
|
|
| i 27,750 |
|
Goodwill |
|
| i 762,851 |
|
|
| i 762,851 |
|
Total other assets |
|
| i 1,118,621 |
|
|
| i 1,164,101 |
|
|
|
|
|
|
|
|
|
|
Total assets |
| $ | i 2,168,875 |
|
| $ | i 1,457,097 |
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity (Deficit) | ||||||||
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
Accounts payable |
| $ | i 814,780 |
|
| $ | i 819,413 |
|
Accrued expenses |
|
| i 1,101,497 |
|
|
| i 58,345 |
|
Customer deposits |
|
| i 32,816 |
|
|
| i - |
|
Shareholder advancesx |
|
| i 96,519 |
|
|
| i 96,519 |
|
Line of credit |
|
| i 30,000 |
|
|
| i 30,000 |
|
Notes payable, current portion, net of discounts |
|
| i 1,212,546 |
|
|
| i - |
|
Total current liabilities |
|
| i 3,288,158 |
|
|
| i 1,004,277 |
|
|
|
|
|
|
|
|
|
|
Notes payable, net of current portion and discounts |
|
| i 207,051 |
|
|
| i 20,400 |
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
| i 3,495,209 |
|
|
| i 1,024,677 |
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies (Note 3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity (deficit) |
|
|
|
|
|
|
|
|
Preferred stock $ i 0.0001 par value; authorized i 50,000,000 shares with - i 0- issued and outstanding at September 30, 2022 and December 31, 2021, respectively |
|
| i - |
|
|
| i - |
|
Common stock- Class A $ i 0.0001 par value; authorized i 372,500,000 shares with - i 0- and i 34,639,920 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively |
|
| i - |
|
|
| i 3,464 |
|
Common stock- Class B $0.0001 par value; authorized i 27,500,000 shares with - i 0 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively |
|
| i - |
|
|
| i - |
|
Common stock $ i 0.0001 par value; authorized i 400,000,000 shares with i 35,139,920 and - i 0- shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively |
|
| i 3,514 |
|
|
| i - |
|
Additional paid-in capital |
|
| i 5,037,377 |
|
|
| i 1,534,474 |
|
Accumulated deficit |
|
| ( i 6,367,225 | ) |
|
| ( i 1,105,518 | ) |
Total stockholders' equity (deficit) |
|
| ( i 1,326,334 | ) |
|
| i 432,420 |
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders' equity (deficit) |
| $ | i 2,168,875 |
|
| $ | i 1,457,097 |
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 3 |
| Table of Contents |
CORRELATE INFRASTRUCTURE PARTNERS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021
(Unaudited)
|
| For the three months ended |
|
| For the nine months ended |
| ||||||||||
|
| September 30, |
|
|
| |||||||||||
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Revenues |
| $ | i 2,312,577 |
|
| $ | i 15,291 |
|
| $ | i 2,617,675 |
|
| $ | i 24,526 |
|
Cost of revenues |
|
| i 2,169,138 |
|
|
| i 13,370 |
|
|
| i 2,432,198 |
|
|
| i 17,086 |
|
Gross profit (loss) |
|
| i 143,439 |
|
|
| i 1,921 |
|
|
| i 185,477 |
|
|
| i 7,440 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative |
|
| i 2,301,539 |
|
|
| i 406 |
|
|
| i 3,496,747 |
|
|
| i 3,911 |
|
Insurance |
|
| i 1,487 |
|
|
| i - |
|
|
| i 4,879 |
|
|
| i - |
|
Legal and professional |
|
| i 75,552 |
|
|
| i 418 |
|
|
| i 1,014,474 |
|
|
| i 3,156 |
|
Travel |
|
| i 35,340 |
|
|
| i 2,083 |
|
|
| i 85,820 |
|
|
| i 9,074 |
|
Depreciation and amortization |
|
| i 15,560 |
|
|
| i - |
|
|
| i 45,880 |
|
|
| i - |
|
Total operating expenses |
|
| i 2,429,478 |
|
|
| i 2,907 |
|
|
| i 4,647,800 |
|
|
| i 16,141 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
| ( i 2,286,039 | ) |
|
| ( i 986 | ) |
|
| ( i 4,462,323 | ) |
|
| ( i 8,701 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
| ( i 43,381 | ) |
|
| i - |
|
|
| ( i 113,745 | ) |
|
| i - |
|
Amortization of debt discount |
|
| ( i 257,497 | ) |
|
| i - |
|
|
| ( i 685,639 | ) |
|
| i - |
|
Total other income (expense) |
|
| ( i 300,878 | ) |
|
| i - |
|
|
| ( i 799,384 | ) |
|
| i - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
| $ | ( i 2,586,917 | ) |
| $ | ( i 986 | ) |
| $ | ( i 5,261,707 | ) |
| $ | ( i 8,701 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per share |
| $ | ( i 0.07 | ) |
| $ | ( i 0.00 | ) |
| $ | ( i 0.15 | ) |
| $ | ( i 0.00 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding - basic |
|
| i 35,139,920 |
|
|
| i 20,000,000 |
|
|
| i 34,876,184 |
|
|
| i 58,966,790 |
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 4 |
| Table of Contents |
CORRELATE INFRASTRUCTURE PARTNERS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021
(Unaudited)
|
| Class A Common Stock |
|
| Class B Common Stock |
|
| Common Stock |
|
| Additional |
|
|
|
|
|
| |||||||||||||||||||
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Paid in Capital |
|
| Accumulated Deficit |
|
| Total |
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Balances, December 31, 2020 |
|
| i 72,500,000 |
|
| $ | i 7,250 |
|
|
| i 27,500,000 |
|
| $ | i 2,750 |
|
|
| - |
|
| $ | i - |
|
| $ | i 457,700 |
|
| $ | ( i 1,015,269 | ) |
| $ | ( i 547,569 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
| - |
|
|
| i - |
|
|
| - |
|
|
| i - |
|
|
| - |
|
|
| i - |
|
|
| i - |
|
|
| ( i 3,507 | ) |
|
| ( i 3,507 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances, March 31, 2021 |
|
| i 72,500,000 |
|
| $ | i 7,250 |
|
|
| i 27,500,000 |
|
| $ | i 2,750 |
|
|
| - |
|
| $ | i - |
|
| $ | i 457,700 |
|
| $ | ( i 1,018,776 | ) |
| $ | ( i 551,076 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of pre-merger TCCR transactions |
|
| ( i 52,500,000 | ) |
|
| ( i 5,250 | ) |
|
| ( i 27,500,000 | ) |
|
| ( i 2,750 | ) |
|
| - |
|
|
| i - |
|
|
| i 8,000 |
|
|
| i - |
|
|
| i - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
| - |
|
|
| i - |
|
|
| - |
|
|
| i - |
|
|
| - |
|
|
| i - |
|
|
| i - |
|
|
| ( i 4,208 | ) |
|
| ( i 4,208 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances, June 30, 2021 |
|
| i 20,000,000 |
|
| $ | i 2,000 |
|
|
| - |
|
| $ | i - |
|
|
| - |
|
| $ | i - |
|
| $ | i 465,700 |
|
| $ | ( i 1,022,984 | ) |
| $ | ( i 555,284 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
| - |
|
|
| i - |
|
|
| - |
|
|
| i - |
|
|
| - |
|
|
| i - |
|
|
| i - |
|
|
| ( i 986 | ) |
|
| ( i 986 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances, September 30, 2021 |
|
| i 20,000,000 |
|
| $ | i 2,000 |
|
|
| - |
|
| $ | i - |
|
|
| - |
|
| $ | i - |
|
| $ | i 465,700 |
|
| $ | ( i 1,023,970 | ) |
| $ | ( i 556,270 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances, December 31, 2021 |
|
| i 34,639,920 |
|
| $ | i 3,464 |
|
|
| - |
|
| $ | i - |
|
|
| - |
|
| $ | i - |
|
| $ | i 1,534,474 |
|
| $ | ( i 1,105,518 | ) |
| $ | i 432,420 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of warrants in connection with debt |
|
| - |
|
|
| i - |
|
|
| - |
|
|
| i - |
|
|
| - |
|
|
| i - |
|
|
| i 799,128 |
|
|
| i - |
|
|
| i 799,128 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock based compensation |
|
| - |
|
|
| i - |
|
|
| - |
|
|
| i - |
|
|
| - |
|
|
| i - |
|
|
| i 150,504 |
|
|
| i - |
|
|
| i 150,504 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuances of shares for cash |
|
| - |
|
|
| i - |
|
|
| - |
|
|
| i - |
|
|
| - |
|
|
| i - |
|
|
| i 150,000 |
|
|
| i - |
|
|
| i 150,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
| - |
|
|
| i - |
|
|
| - |
|
|
| i - |
|
|
| - |
|
|
| i - |
|
|
| i - |
|
|
| ( i 973,460 | ) |
|
| ( i 973,460 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances, March 31, 2022 |
|
| i 34,639,920 |
|
| $ | i 3,464 |
|
|
| - |
|
| $ | i - |
|
|
| - |
|
| $ | i - |
|
| $ | i 2,634,106 |
|
| $ | ( i 2,078,978 | ) |
| $ | i 558,592 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock based compensation |
|
| - |
|
|
| i - |
|
|
| - |
|
|
| i - |
|
|
| - |
|
|
| i - |
|
|
| i 179,234 |
|
|
| i - |
|
|
| i 179,234 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Elimination of Class A and Class B common stock for single class of common stock |
|
| ( i 34,639,920 | ) |
|
| ( i 3,464 | ) |
|
| - |
|
|
| i - |
|
|
| i 34,639,920 |
|
|
| i 3,464 |
|
|
| i - |
|
|
| i - |
|
|
| i - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuances of shares for services |
|
| - |
|
|
| i - |
|
|
| - |
|
|
| i - |
|
|
| i 500,000 |
|
|
| i 50 |
|
|
| i 499,950 |
|
|
| i - |
|
|
| i 500,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
| - |
|
|
| i - |
|
|
| - |
|
|
| i - |
|
|
| - |
|
|
| i - |
|
|
| i - |
|
|
| ( i 1,701,330 | ) |
|
| ( i 1,701,330 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances, June 30, 2022 |
|
| - |
|
| $ | i - |
|
|
| - |
|
| $ | i - |
|
|
| i 35,139,920 |
|
| $ | i 3,514 |
|
| $ | i 3,313,290 |
|
| $ | ( i 3,780,308 | ) |
| $ | ( i 463,504 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of warrants in connection with debt |
|
| - |
|
|
| i - |
|
|
| - |
|
|
| i - |
|
|
| - |
|
|
| i - |
|
|
| i 417,314 |
|
|
| i - |
|
|
| i 417,314 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock based compensation |
|
| - |
|
|
| i - |
|
|
| - |
|
|
| i - |
|
|
| - |
|
|
| i - |
|
|
| i 1,306,773 |
|
|
| i - |
|
|
| i 1,306,773 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
| - |
|
|
| i - |
|
|
| - |
|
|
| i - |
|
|
| - |
|
|
| i - |
|
|
| i - |
|
|
| ( i 2,586,917 | ) |
|
| ( i 2,586,917 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances, September 30, 2022 |
|
| - |
|
| $ | i - |
|
|
| - |
|
| $ | i - |
|
|
| i 35,139,920 |
|
| $ | i 3,514 |
|
| $ | i 5,037,377 |
|
| $ | ( i 6,367,225 | ) |
| $ | ( i 1,326,334 | ) |
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 5 |
| Table of Contents |
CORRELATE INFRASTRUCTURE PARTNERS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021
(Unaudited)
|
| For the nine months ended |
| |||||
|
|
| ||||||
|
| 2022 |
|
| 2021 |
| ||
Operating activities |
|
|
|
|
|
| ||
Net loss |
| $ | ( i 5,261,707 | ) |
| $ | ( i 8,701 | ) |
Adjustments to reconcile net loss to net cash used in |
|
|
|
|
|
|
|
|
operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
| i 45,880 |
|
|
| i - |
|
Amortization of debt discount |
|
| i 685,639 |
|
|
| i - |
|
Shares issued for services |
|
| i 500,000 |
|
|
| i - |
|
Stock-based compensation |
|
| i 1,636,511 |
|
|
| i - |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
| ( i 383,028 | ) |
|
| ( i 6,859 | ) |
Inventory |
|
| ( i 174,843 | ) |
|
| i - |
|
Prepaid expenses and other current assets |
|
| ( i 94,983 | ) |
|
| i - |
|
Accounts payable |
|
| ( i 4,633 | ) |
|
| ( i 27,224 | ) |
Accrued expenses |
|
| i 1,043,152 |
|
|
| ( i 960 | ) |
Customer deposits |
|
| i 32,816 |
|
|
| i - |
|
Net cash used in operating activities |
|
| ( i 1,975,196 | ) |
|
| ( i 43,744 | ) |
|
|
|
|
|
|
|
|
|
Investing activities |
|
|
|
|
|
|
|
|
Purchase of property and equipment |
|
| ( i 8,305 | ) |
|
| i - |
|
Net cash used in investing activities |
|
| ( i 8,305 | ) |
|
| i - |
|
|
|
|
|
|
|
|
|
|
Financing activities |
|
|
|
|
|
|
|
|
Proceeds from issuance of notes payable |
|
| i 1,930,000 |
|
|
| i - |
|
Proceeds from issuance of common stock |
|
| i 150,000 |
|
|
| i - |
|
Net cash provided by financing activities |
|
| i 2,080,000 |
|
|
| i - |
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash |
| $ | i 96,499 |
|
| $ | ( i 43,744 | ) |
Cash - beginning of period |
|
| i 252,189 |
|
|
| i 74,375 |
|
Cash - end of period |
| $ | i 348,688 |
|
| $ | i 30,631 |
|
|
|
|
|
|
|
|
|
|
Cash paid for income taxes |
| $ | - |
|
| $ | i - |
|
Cash paid for interest |
| $ | i 32,141 |
|
| $ | i - |
|
|
|
|
|
|
|
|
|
|
Supplemental schedule of non-cash investing and financing activities |
|
|
|
|
|
|
|
|
Discount on notes payable from issuance of warrants |
| $ | i 1,216,442 |
|
| $ | i - |
|
Original issuance discount on note payable |
| $ | i 135,000 |
|
| $ | i - |
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 6 |
| Table of Contents |
CORRELATE INFRASTRUCTURE PARTNERS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
i
NOTE 1 – NATURE OF THE ORGANIZATION AND BUSINESS |
Name Change
Effective April 5, 2022, Triccar, Inc. changed its name to Correlate Infrastructure Partners Inc. (“CIPI” or the “Company”) to better reflect its operations.
Nature of the Business
The accompanying condensed consolidated financial statements include the accounts of the Company, and its subsidiaries Correlate, Inc. (“Correlate”), a Delaware corporation, and Loyal Enterprises LLC dba Solar Site Design (“Loyal”), a Tennessee limited liability company.
Correlate Infrastructure Partners, Inc. is a tech-enabled development, finance, and fulfillment platform for distributed energy solutions across North America. Our integrated solutions include solar, cogeneration, energy storage, electric vehicle infrastructure, and intelligent efficiency retrofits for community-scale applications. We reduce costs, improve comfort, and increase energy reliability for home, work, and commerce while eliminating the adoption barriers to net zero carbon goals.
Loyal was integrated into Correlate for its solar project development tools.
Going Concern
The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Company has incurred losses since inception and has not generated positive cash flows from operations. These matters, among others, raise substantial doubt about the Company's ability to continue as a going concern.
The Company’s ability to continue in existence is dependent on its ability to develop additional sources of capital, and/or achieve profitable operations and positive cash flows. Management’s plans with respect to operations include aggressive marketing, acquisitions, and raising additional capital through sales of equity or debt securities as may be necessary to pursue its business plans and sustain operations until such time as the Company can achieve profitability. Management believes that aggressive marketing combined with acquisitions and additional financing as necessary will result in improved operations and cash flow in 2022 and beyond. However, there can be no assurance that management will be successful in obtaining additional funding or in attaining profitable operations. The accompanying condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
i
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
The accompanying condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and the interim reporting rules of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s latest Annual Report filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments (unless otherwise indicated), necessary for a fair presentation of the financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.
Principles of Consolidation
i
The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant inter-company transactions and balances have been eliminated in consolidation.
/
| 7 |
| Table of Contents |
CORRELATE INFRASTRUCTURE PARTNERS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Use of Estimates
i
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents
i
The Company considers all highly liquid debt instruments and other short-term investments with maturity of three months or less, when purchased, to be cash equivalents. There were no cash equivalents as of September 30, 2022 and December 31, 2021.
The Company maintains its cash balances at financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”). The FDIC provides coverage of up to $ i 250,000 per depositor, per financial institution, for the aggregate total of depositors' interest and non-interest-bearing accounts. At September 30, 2022, $ i 65,497 of the Company's cash balances were in excess of FDIC limits. The Company has not experienced any losses on these accounts and management does not believe that the Company is exposed to any significant risks.
/
Accounts Receivable
i
Accounts receivable consists of unpaid revenues. The Company records an allowance for doubtful accounts to allow for any amounts that may not be recoverable, which is based on an analysis of the Company’s prior collection experience, customer credit worthiness, and current economic trends. Accounts are considered delinquent when payments have not been received within the agreed upon terms and are written off when management determines that collection is not probable. As of September 30, 2022 and December 31, 2021, the Company’s allowance for doubtful accounts was $ i 90,189, respectively.
/
Intangible Assets
i
Intangible assets are amortized over their estimated useful lives. Each period, the Company evaluates the estimated remaining useful life of its intangible assets and whether events or changes in circumstances warrant a revision to the remaining period of amortization. Management tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets.
Impairment Assessment
i
The Company evaluates intangible assets and other long-lived assets for possible impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. This includes but is not limited to significant adverse changes in business climate, market conditions or other events that indicate an asset's carrying amount may not be recoverable. Recoverability of these assets is measured by comparing the carrying amount of each asset to the future cash flows the asset is expected to generate. If the cash flows used in the test for recoverability are less than the carrying amount of these assets, the carrying amount of such assets is reduced to fair value.
The Company evaluates and tests the recoverability of its goodwill for impairment at least annually during its fourth quarter of each fiscal year or more often if and when circumstances indicate that goodwill may not be recoverable.
| 8 |
| Table of Contents |
CORRELATE INFRASTRUCTURE PARTNERS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Revenue Recognition
i
The Company accounts for revenue in accordance with FASB ASC 606, Revenue from Contracts with Customers.
A performance obligation is a promise in a contract to transfer a distinct good or service to the client and is the unit of accounting in Topic 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation based on the relative standalone selling price. Determining relative standalone selling price and identifying separate performance obligations require judgment. Contract modifications may occur in the performance of the Company’s contracts. Contracts may be modified to account for changes in the contract specifications, requirements or duration. If a contract modification results in the addition of performance obligations priced at a standalone selling price or if the post-modification services are distinct from the services provided prior to the modification, the modification is accounted for separately. If the modified services are not distinct, they are accounted for as part of the existing contract.
The Company’s revenues are derived from contracts for engineering, procurement and construction services (“EPC”) and consulting. These contracts may have different terms based on the scope, performance obligations and complexity of the engagement, which may require us to make judgments and estimates in recognizing revenues.
The Company’s performance obligations are satisfied as work progresses or at a point in time (for defined milestones). The selection of the method to measure progress towards completion requires judgment and is based on the contract and the nature of the services to be provided.
The Company’s contracts for consulting services are typically less than a year in duration and require us to a) assist the client in achieving certain defined milestones for milestone fees or b) provide a series of distinct services each period over the contract term for a pre-determined fee for each period. When contractual billings represent an amount that corresponds directly with the value provided to the client, revenues are recognized as amounts become billable in accordance with contract terms.
The Company’s contracts for EPC services are typically less than a year in duration and require us to a) provide engineering services, b) obtain materials, and c) install materials to agreed-upon specifications. The Company recognizes revenues for engineering services as the services are provided. Revenues for materials are recognized as materials are transferred to the client. Installation results in enhancements to customer-controlled assets and therefore installation revenues are recognized over time utilizing the input method wherein revenues are recognized on the basis of efforts or inputs to the satisfaction of the performance obligation.
Financial Instruments
i
The Company’s financial instruments include cash and cash equivalents, receivables, payables, and debt and are accounted for under the provisions of ASC Topic 825, “Financial Instruments”. The carrying amount of these financial instruments, with the exception of discounted debt, as reflected in the balance sheets approximates fair value.
Commitments and Contingencies
i
Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties and other sources are recorded when management assesses that it is probable that a liability has been incurred and the amount can be reasonable estimated.
| 9 |
| Table of Contents |
CORRELATE INFRASTRUCTURE PARTNERS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Income Taxes
i
In accordance with FASB ASC Topic 740, "Income Taxes," the Company provides for the recognition of deferred tax assets if realization of such assets is more likely than not. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax basis of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities.
In addition, the Company’s management performs an evaluation of all uncertain income tax positions taken or expected to be taken in the course of preparing the Company’s income tax returns to determine whether the income tax positions meet a “more likely than not” standard of being sustained under examination by the applicable taxing authorities. This evaluation is required to be performed for all open tax years, as defined by the various statutes of limitations, for federal and state purposes. If the Company has interest or penalties associated with insufficient taxes paid, such expenses are reported in income tax expense.
Basic and Diluted Loss Per Share
i
FASB ASC Topic 260, Earnings Per Share, requires a reconciliation of the numerator and denominator of the basic and diluted earnings (loss) per share (EPS) computations.
Basic earnings (loss) per share are computed by dividing income (loss) available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive.
The Company had no potential additional dilutive securities outstanding at September 30, 2022 except for the options and warrants detailed at Note 5.
Recently Issued Accounting Standards
i
During the period ended September 30, 2022, there were several new accounting pronouncements issued by the FASB. Each of these pronouncements, as applicable, has been or will be adopted by the Company. Management does not believe the adoption of any of these accounting pronouncements has had or will have a material impact on the Company’s condensed consolidated financial statements.
i
| NOTE 3 – COMMITMENTS AND CONTINGENCIES |
From time to time, the Company may be involved in litigation in the ordinary course of business. The Company is not currently involved in any litigation that the Company believes could have a material adverse effect on its financial condition or results of operations.
Executive Employment Agreements
On January 18, 2022, the Company entered into an employment agreement with Mr. Channing Chen, CFO, providing for an annual salary of $ i 200,000 per year. As part of the agreement, the Company issued Mr. Chen i 1,000,000 options exercisable at $ i 0.96 per share for ten years. The options, valued at approximately $ i 868,000, i vest monthly over 36 months from issuance.
/
| 10 |
| Table of Contents |
CORRELATE INFRASTRUCTURE PARTNERS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
i
NOTE 4 – DEBT |
Notes Payable
On May 29, 2020, Loyal received a $ i 20,400 Economic Injury Disaster Loan through the Small Business Administration. The note bears interest at i 3.75% until maturity in i March 2050. i The note requires $100 monthly payments beginning in May 2022 until maturity.
On January 11, 2022, the Company entered into a i 10% note agreement with P&C Ventures, Inc. totaling $ i 1,485,000, including an original issuance discount of $ i 135,000. The note requires i quarterly interest payments with the principal due at maturity on January 11, 2023. In connection with the note agreement, the Company issued P&C Ventures, Inc., 2 i ,700,000 warrants exercisable at $0.25 per share (Note 5). The warrants were fully vested at issuance and expire on July 11, 2023. The warrants, valued at approximately $ i 1,958,000, represented approximately 59% of the total consideration received and resulted in an additional discount on the note totaling $ i 799,128 pursuant to FASB ASC 470-20-30, Debt. The discount is being amortized over the life of the note with a discount balance of $ i 272,454 at September 30, 2022.
From July 29, 2022 to September 29, 2022, the Company entered into eight i 10% note agreements totaling $ i 580,000. The notes, which have identical terms, require i quarterly interest payments with the principal due at maturity eighteen months from issuance. In connection with the note agreement, the Company issued a total of i 580,000 warrants exercisable at $1.00 per share (Note 5). The warrants were fully vested at issuance and expire from January 29, 2024 to September 29, 2024. The warrants, valued at approximately $ i 842,000, represented approximately 59% of the total consideration received and resulted in an additional discount on the notes totaling $ i 417,314 pursuant to FASB ASC 470-20-30, Debt. The discount is being amortized over the life of the notes with a discount balance of $ i 393,349 at September 30, 2022.
Line of Credit
On October 3, 2014, Loyal entered into a $ i 30,000 line of credit agreement. The line of credit has no maturity with interest increasing from i 8.00% at issuance to 34.00% for the period ended September 30, 2022. As of September 30, 2022, the outstanding principal and accrued interest totaled $ i 41,530.
/i
NOTE 5 – EQUITY |
The total number of common stock authorized that may be issued by the Company is four hundred million ( i 400,000,000) shares of common stock with a par value of one hundredth of one cent ($ i 0.0001) per share.
The total number of preferred stock authorized that may be issued by the Company is fifty million (50,000,000) shares of preferred stock with a par value of one hundredth of one cent ($0.0001) per share.
At December 31, 2021, common stock authorized consisted of three hundred seventy-two million five hundred thousand ( i 372,500,000) Class A shares with i 1:1 voting rights and twenty-seven million five hundred thousand ( i 27,500,000) Class B shares with i 20:1 voting rights, and fifty million ( i 50,000,000) shares of preferred stock with a par value of one hundredth of a cent ($ i 0.0001) per share.
On April 5, 2022, the Company amended its Articles of Incorporation such that Class A and Class B common shares were eliminated and replaced by a single class of common stock with i 1:1 voting rights.
At September 30, 2022, common stock authorized consisted of four hundred million ( i 400,000,000) common shares with i 1:1 voting rights and fifty million ( i 50,000,000) shares of preferred stock with a par value of one hundredth of a cent ($ i 0.0001) per share.
To the fullest extent permitted by the laws of the state of Nevada (currently set forth in NRS 78.195), as the same now exists or may hereafter be amended or supplemented, the board of directors may fix and determine the designations, rights, preferences or other variations of each class or series within each class of capital stock of the corporation.
During January 2022, the Company received proceeds totaling $ i 150,000 for i 600,000 Class A shares issued in December 2021.
During May 2022, the Company issued i 500,000 shares of common stock valued at $ i 500,000 for services.
/
| 11 |
| Table of Contents |
CORRELATE INFRASTRUCTURE PARTNERS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Warrants
During the period ended September 30, 2022, the Company calculated the fair value of the warrants granted based on assumptions used in the Cox-Ross-Rubinstein binomial pricing model using the following inputs: the price of the Company’s common stock on the date of issuance; risk-free interest rates ranging from i 0.70% to i 4.16%, volatility ranging from i 378% to i 428% based on the historical volatility of the Company’s common stock, exercise prices ranging from $ i 0.25 to $ i 1.00, and terms of 18 to 24 months.
During January 2022, the Company issued i 2,700,000 warrants valued at approximately $ i 1,958,000 as part of a note agreement (Note 4).
From July 29, 2022 to September 29, 2022, the Company issued i 580,000 warrants valued at approximately $ i 842,000 as part of note agreements (Note 4).
The following table presents the Company’s warrants as of September 30, 2022:
i
|
| Number of Shares |
|
| Weighted Average Exercise Price |
|
| Weighted Average Remaining Life (in years) |
| |||
Warrants as of December 31, 2021 |
|
| - |
|
| $ | - |
|
|
| - |
|
Issued |
|
| i 3,280,000 |
|
| i 0.38 |
|
|
| i 1.55 |
| |
Exercised |
|
| - |
|
| - |
|
|
| - |
| |
Warrants as of September 30, 2022 |
|
| i 3,280,000 |
|
| $ | i 0.38 |
|
|
| i 0.95 |
|
At September 30, 2022, all of the Company’s outstanding warrants were vested.
Options
During the period ended September 30, 2022, the Company calculated the fair value of the options granted based on assumptions used in the Cox-Ross-Rubinstein binomial pricing model using the following inputs: the price of the Company’s common stock on the date of issuance, risk-free interest rates ranging from i 1.65% to i 3.87%, volatility ranging from i 282% to i 330% based on the historical volatility of the Company’s common stock, exercise prices ranging from $ i 0.92 to $ i 1.55, and terms ranging from 3 to i 5 years. The fair value of options granted is expensed as vesting occurs over the applicable service periods.
During January 2022, the Company issued i 1,000,000 options valued at approximately $ i 868,000 as part of an executive employment agreement (Note 3). The options vest monthly over 36 months from issuance.
From February to July 2022, the Company issued i 345,000 options valued at approximately $ i 351,000 as part of five non-executive employment agreements. The options vest monthly over 24 months from issuance.
From May to September 2022, the Company issued i 30,000 options valued at approximately $ i 38,000 as part of three consulting agreements. The options vest monthly over 36 months from issuance.
During August 2022, the Company issued i 750,000 options valued at approximately $ i 1,123,000 as part of compensation to three directors (Note 7). The options vested immediately upon issuance.
| 12 |
| Table of Contents |
CORRELATE INFRASTRUCTURE PARTNERS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following table presents the Company’s options as of September 30, 2022:
i
|
| Number of Shares |
|
| Weighted Average Exercise Price |
|
| Weighted Average Remaining Life (in years) |
| |||
Options as of December 31, 2021 |
|
| i 2,059,068 |
|
| $ | i 0.52 |
|
|
| i 5.13 |
|
Issued |
|
| i 2,125,000 |
|
| i 1.16 |
|
|
| i 4.97 |
| |
Forfeited |
|
| - |
|
| - |
|
|
| - |
| |
Exercised |
|
| - |
|
| - |
|
|
| - |
| |
Options as of September 30, 2022 |
|
| i 4,184,068 |
|
| $ | i 0.85 |
|
|
| i 4.45 |
|
At September, 2022, options to purchase i 1,621,350 shares of common stock were vested and options to purchase i 2,562,718 shares of common stock remained unvested. The Company expects to incur expenses for the unvested options totaling $ i 1,680,658 as they vest.
i
| NOTE 6 – CONCENTRATIONS |
The Company had the following revenue concentrations for the three and nine months ended September 30, 2022 and 2021 and accounts receivable concentrations as of September 30, 2022 and December 31, 2021:
i
|
| Revenues |
|
| Revenues |
|
| Accounts Receivable |
| |||||||||||||||
|
| Three Months Ended September 30, |
|
| Nine Months Ended September 30, |
|
| September 30, |
|
| December 31, |
| ||||||||||||
Customer |
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| ||||||
Customer A |
|
| i 41% |
| * |
|
|
| i 42% |
| * |
|
| * |
|
| * |
| ||||||
Customer B |
|
| i 39% |
| * |
|
|
| i 39% |
| * |
|
|
| i 56% |
| * |
| ||||||
Customer C |
|
| i 14% |
| * |
|
|
| i 12% |
| * |
|
|
| i 24% |
| * |
| ||||||
Customer D |
| * |
|
|
| i 100% |
| * |
|
|
| i 69% |
| * |
|
| * |
| ||||||
Customer E |
| * |
|
| * |
|
| * |
|
|
| i 31% |
| * |
|
|
| i 69% | ||||||
Customer F |
| * |
|
| * |
|
| * |
|
| * |
|
|
| i 16% |
| * |
| ||||||
Customer F |
| * |
|
| * |
|
| * |
|
| * |
|
| * |
|
|
| i 19% | ||||||
Customer F |
| * |
|
| * |
|
| * |
|
| * |
|
| * |
|
|
| i 12% | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* = Less than 10% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
i
NOTE 7 – RELATED PARTY TRANSACTIONS |
Shareholder Advances and Payables
At September 30, 2022 and December 31, 2021, the Company had informal advances payable of $ i 22,154, respectively, due to the Company’s President and CEO, Mr. Todd Michaels.
At September 30, 2022 and December 31, 2021, the Company had advances payable of $ i 11,865, respectively, due to an individual who holds 3% of the Company’s Common Stock.
At September 30, 2022 and December 31, 2021, the Company had advances payable of $ i 62,500, respectively due to an individual who is the Company’s largest shareholder.
At September 30, 2022 and December 31, 2021, the Company had accounts payable of $ i 120,000, respectively, due to Elysian Fields Disposal, LLC, an entity owned by the Company’s largest shareholder.
Michaels Consulting
As of September 30, 2022 and December 31, 2021, the Company had accounts payable due to Michaels Consulting totaling $ i 344,000 and $ i 364,000, respectively.
/
| 13 |
| Table of Contents |
CORRELATE INFRASTRUCTURE PARTNERS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
P&C Ventures, Inc.
Mr. Cory Hunt, who was named a director of the Company on December 28, 2021, is an owner and officer of P&C Ventures, Inc. During January 2022, the Company entered into a note agreement with P&C Ventures, Inc. and issued warrants related to the note, as disclosed in Note 4.
Director Options
During August 2022, the Company’s directors, Robert Powell, Cory Hunt, and Matthew Flemming, each received i 250,000 options valued at approximately $ i 374,000 (Note 5). The options vested immediately upon issuance.
Accrued Bonus
At September 30, 2022, the Company accrued bonus compensation for its CEO and CFO of approximately $ i 112,500 and $ i 85,151, respectively.
i
NOTE 8 – SUBSEQUENT EVENTS |
Options
During October 2022, the Company issued i 100,000 options valued at $ i 168,678 as part of a non-executive employment agreement.
Asset Purchase Agreement
During October 2022, the Company entered into an Asset Purchase Agreement whereby the Company acquired the rights to solar projects from a third party. As consideration, the Company agreed to pay the third party 25% of the developer fees received for each of the projects that are developed and issued the third party i 75,000 warrants. The warrants, valued at $ i 238,765, vested immediately and are exercisable for three years at an exercise price of $ i 1.59 per share.
Securities Purchase Agreement
During November 2022, the Company entered into a securities purchase agreement with a third party Investor whereby the Company may issue up to five notes in the aggregate principal amount of $ i 1,100,000. Each note shall have a face amount of $ i 220,000, including an original issuance discount of $ i 20,000, a guaranteed interest rate of i 7%, and ten installments of $ i 23,540 every 30 days commencing 90 days from the issuance date until maturity i 12 months after issuance. The guaranteed interest shall be added to the principal balance immediately on the issuance date. Each note shall be issued with commitment shares, returnable shares, and detachable warrants.
On the closing date of the first note, the Company shall issue the Investor a total of i 9,500 commitment shares as additional consideration for the purchase of the note (the “First Closing Commitment Shares”). The value of each of the Commitment Shares shall be equal to the closing price of the Company’s Common Stock on the Closing Date. At each subsequent closing, the Company will issue the Buyer that number of commitment shares equal in monetary value to the value of the First Closing Commitment Shares on the first closing date.
On the closing date of the first note, the Company shall issue the Investor a total of i 80,000 restricted shares of common stock as returnable shares (the “First Closing Returnable Shares”). The shares shall be returned to the Company by the Investor if no event of default occurs under the note. At each subsequent closing, the Company will issue the Investor that number of returnable shares equal in monetary value to the value of the First Closing Returnable Shares on the first closing date.
On the closing date of each note, the Company shall issue the Investor warrants to purchase i 150,000 shares of common stock at an exercise price of $ i 1.00 per share. The warrants shall vest immediately and be exercisable for two years from the issuance date.
Any time following an Event of Default, the Investor shall have the right to convert the note into common stock of the Company. The conversion price shall be fixed at $1.00 per share. However, if the Company’s common stock has a closing price below $1.00 for at least 5 consecutive trading days, then the fixed conversion price shall be adjusted to $0.50 per share and the Investor may convert any amounts due under the note into the lower of the $0.50 fixed conversion price or 70% of the lowest daily VWAP of the Company’s common stock for the 20 trading days immediately preceding the delivery of a conversion notice.
On November 7, 2022, the Company and the Investor closed on the first of the notes under the Securities Purchase Agreement and issued a note payable in the amount of $ i 220,000. The note included an original issuance discount of $ i 20,000, a guaranteed interest rate of i 7%, and ten installments of $ i 23,540 every 30 days commencing 90 days from the issuance date until maturity on November 7, 2023. In connection with the note, the Company issued the investor i 9,500 shares of common stock valued at $11,875 for the First Closing Commitment Shares, i 80,000 restricted shares of common stock for the First Closing Returnable Shares, and warrants to purchase i 150,000 shares of common stock valued at $ i 186,151.
/
| 14 |
| Table of Contents |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our results of operations and financial condition should be read in conjunction with our financial statements and related notes appearing elsewhere in this report. This discussion and analysis contain forward looking statements that involve risks, uncertainties and assumptions. The actual results may differ materially from those anticipated in these forwarding looking statements as a result of certain factors, including but not limited to, those which are not within our control.
Overview
Correlate Infrastructure Partners Inc. (OTCQB: CIPI), formerly Triccar Inc., together with its subsidiaries (collectively the “Company”, “Correlate”, “we”, “us” and “our”), is a tech-enabled development, finance, and fulfillment platform for distributed energy solutions across North America. Our integrated solutions include solar, cogeneration, energy storage, electric vehicle infrastructure, and intelligent efficiency retrofits for community-scale applications. We reduce costs, improve comfort, and increase energy reliability for home, work, and commerce while eliminating the adoption barriers to net zero carbon goals.
We were originally formed as a Texas corporation in 1995 under the name TBX Resources, Inc. In December 2011 we changed our name to Frontier Oilfield Services Inc. In January 2020, we merged with and into Triccar Inc., a Nevada corporation and Triccar Inc. was the surviving entity. In December 2021, we acquired one hundred percent of the equity interests of each of Correlate Inc. and Loyal Enterprises LLC. In February 2022, a majority of our stockholders approved an amendment to our articles of incorporation and the change of our corporate name from Triccar Inc. to Correlate Infrastructure Partners Inc., to better reflect our future growth and focus. On April 5, 2022, we filed an amendment to our articles of incorporation with the State of Nevada to change our corporate name from Triccar Inc. to Correlate Infrastructure Partners Inc. Our principal executive offices are located at 220 Travis Street, Suite 501, Shreveport, Louisiana 71101, and our telephone number is (855) 264-4060.
Recently Issued Accounting Pronouncements
During the nine months ended September 30, 2022, and through November 10, 2022, there were several new accounting pronouncements issued by the Financial Accounting Standards Board (“FASB”). Each of these pronouncements, as applicable, has been or will be adopted by the Company. Management does not believe the adoption of any of these accounting pronouncements has had or will have a material impact on the Company’s financial statements.
All other new accounting pronouncements issued but not yet effective or adopted have been deemed not to be relevant to us, hence are not expected to have any impact once adopted.
Summary of Significant Accounting Policies
There have been no changes from the Summary of Significant Accounting Policies described in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 14, 2022.
Liquidity and Capital Resources
At September 30, 2022, the Company had a cash balance of $348,688, as compared to a cash balance of $252,189 at December 31, 2021. The Company incurred negative cash flow from operations of $1,975,196 for the nine months ended September 30, 2022, as compared to negative cash flow from operations of $43,744 in the prior year. The increase in negative cash flow from operations was primarily the result of increased compensation costs for additional employees beginning during the current period, added legal and professional fees primarily related to the Company’s growth, acquisition and capital raising plans, inventory purchases and prepaid expenses. Cash flows from financing activities during the nine months ended September 30, 2022, totaled $2,080,000 and were the result of $1,930,000 in proceeds from loan agreements (see Footnote 4) and $150,000 from the issuance of our common stock (see Footnote 5). Going forward, the Company expects capital expenditures to increase significantly as operations are expanded pursuant to its current growth plans. The Company anticipates the requirement to raise significant debt or equity capital in order to fund future operations.
| 15 |
| Table of Contents |
Results of Operations
Comparison of the Three Months Ended September 30, 2022 and 2021
For the three months ended September 30, 2022 and 2021, the Company’s revenues totaled $2,312,577 and $15,291, respectively. The increase of $2,297,286, or 15,024%, was driven by the Company increasing operations during the current period coupled with the negative impacts of the COVID pandemic during the prior period. We anticipate the Company’s revenues in upcoming quarters to continue to increase as revenues are recognized from projects in progress.
Gross profit for the three months ended September 30, 2022, totaled $143,439 compared to a gross profit of $1,921 in the comparable prior year period. The $141,518 increase in gross profit was due to the Company’s increased operations, growth plans, and efforts to optimize project installation and equipment costs. We anticipate future gross margins to increase from the current level as we commercialize new project opportunities and cover more fixed costs within cost of sales and expand our margins.
For the three months ended September 30, 2022, our operating expenses increased to $2,429,478 compared to $2,907 for the comparable period in 2021. The increase of $2,426,571, or 83,473%, was primarily driven by higher legal and professional fees and greater compensation expenses associated with added strategic management and staff commencing during the period ended September 30, 2022. The increased legal and professional fees were incurred primarily in connection with the Company’s acquisition and capital raising programs. Compensation expenses for the three months ended September 30, 2022 included approximately $363,000, $372,000, and $1,307,000 in salaries and wages, bonuses, and the non-cash expenses of stock-based compensation, respectively, compared to $-0- in the prior period. Of the stock-based compensation, approximately $1,123,000 was from options issued to the Company’s directors. We anticipate future operating expenses to increase with the expansion of operations, resulting in increased expenses related to wages and compensation, advertising, and insurance partially offset by added contribution margins from anticipated revenue growth.
For the three months ended September 30, 2022, other expenses totaled $300,878, compared to $-0- in the comparable period in 2021. This increase in other expenses was due to $43,381 in added interest expense and $257,497 in amortization of debt discount incurred during 2022. We anticipate our other expenses to increase as the Company incurs interest from debt and related financing costs to expand its operations.
The activities above resulted in a net loss of $2,586,917 for the three months ended September 30, 2022.
Comparison of the Nine Months Ended September 30, 2022 and 2021
For the nine months ended September 30, 2022 and 2021, the Company’s revenues totaled $2,617,675 and $24,526, respectively. The increase of $2,593,149, or 10,573%, was driven by the Company increasing operations during the current period coupled with the negative impacts of the COVID pandemic during the prior period. We anticipate the Company’s revenues in upcoming quarters to continue to increase as revenues are recognized on projects in progress.
Gross profit for the nine months ended September 30, 2022, totaled $185,477 compared to a gross profit of $7,440 in the comparable prior year period. The $178,037 increase in gross profit was due to the Company’s increased operations, growth plans and efforts to optimize project installation and equipment costs. We anticipate future gross margins to increase from the current level as we commercialize new project opportunities, increase revenues, cover more fixed costs within cost of sales and expand our margins.
For the nine months ended September 30, 2022, our operating expenses increased to $4,647,800 compared to $16,141 for the comparable period in 2021. The increase of $4,631,659, or 28,695%, was primarily driven by higher legal and professional fees and greater compensation expenses associated with added strategic management and staff commencing during the period ended September 30, 2022. The increased legal and professional fees were incurred primarily in connection with the Company’s acquisition and capital raising programs. Compensation expenses for the nine months ended September 30, 2022 included approximately $969,000, $372,000, and $1,637,000 in salaries and wages, bonuses, and the non-cash expenses of stock-based compensation, respectively, compared to $-0- in the prior period. We anticipate future operating expenses to increase with the expansion of operations, resulting in increased expenses related to wages and compensation, advertising, and insurance partially offset by added contribution margins from anticipated revenue growth.
For the nine months ended September 30, 2022, other expenses totaled $799,384, compared to $-0- in the comparable period in 2021. This increase in other expenses was due to $685,639 in amortization of debt discounts and $113,745 in added interest expense incurred during 2022. We anticipate our other expenses to increase as the Company incurs interest from debt and related financing costs to expand its operations.
Off Balance Sheet Arrangements
We do not have any off-balance sheet arrangements.
| 16 |
| Table of Contents |
Item 3. Qualitative and Quantitative Disclosures about Market Risk.
We are a smaller reporting company and, therefore, we are not required to provide information required by this item.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures: Our management carried out an evaluation of the effectiveness and design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended (the Exchange Act). Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that, at September 30, 2022, such disclosure controls and procedures were not effective.
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that the information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to management including our Chief Executive Officer and Interim Chief Financial Officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.
Limitations on the Effectiveness of Controls: Our disclosure controls and procedures are designed to provide reasonable, not absolute, assurance that the objectives of our disclosure control system are met. Because of inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within a company have been detected. Our Chief Executive Officer and Chief Financial Officer have concluded, based on their evaluation as of the end of the period covered by this Quarterly Report that our disclosure controls and procedures were not sufficiently effective to provide reasonable assurance that the objectives of our disclosure control system were met.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal controls over financial reporting that occurred during the three month period ended September 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
| 17 |
| Table of Contents |
None.
We are a smaller reporting company and, therefore, we are not required to provide information required by this item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
During November 2022, the Company entered into a securities purchase agreement with a third party Investor whereby the Company may issue up to five notes in the aggregate principal amount of $1,100,000. Each note shall have a face amount of $220,000, including an original issuance discount of $20,000, a guaranteed interest rate of 7%, and ten installments of $23,540 every 30 days commencing 90 days from the issuance date until maturity 12 months after issuance. The guaranteed interest shall be added to the principal balance immediately on the issuance date. Each note shall be issued with commitment shares, returnable shares, and detachable warrants.
On the closing date of the first note, the Company shall issue the Investor a total of 9,500 commitment shares as additional consideration for the purchase of the note (the “First Closing Commitment Shares”). The value of each of the Commitment Shares shall be equal to the closing price of the Company’s Common Stock on the Closing Date. At each subsequent closing, the Company will issue the Buyer that number of commitment shares equal in monetary value to the value of the First Closing Commitment Shares on the first closing date.
On the closing date of the first note, the Company shall issue the Investor a total of 80,000 restricted shares of common stock as returnable shares (the “First Closing Returnable Shares”). The shares shall be returned to the Company by the Investor if no event of default occurs under the note. At each subsequent closing, the Company will issue the Investor that number of returnable shares equal in monetary value to the value of the First Closing Returnable Shares on the first closing date.
On the closing date of each note, the Company shall issue the Investor warrants to purchase 150,000 shares of common stock at an exercise price of $1.00 per share. The warrants shall vest immediately and be exercisable for two years from the issuance date.
| 18 |
| Table of Contents |
Exhibit No. |
| Description of Document |
|
|
|
| ||
| ||
| ||
| ||
101.INS |
| XBRL Instance Document |
101.SCH |
| XBRL Taxonomy Extension Schema Document |
101.CAL |
| XBRL Taxonomy Calculation Linkbase Document |
101.DEF |
| XBRL Taxonomy Definition Linkbase Document |
101.LAB |
| XBRL Taxonomy Label Linkbase Document |
101.PRE |
| XBRL Taxonomy Presentation Linkbase Document |
* A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
| 19 |
| Table of Contents |
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Dated: November 10, 2022 |
| Correlate Infrastructure Partners Inc. (Registrant)
/s/ Todd Michaels |
|
|
| Todd Michaels Chief Executive Officer (Principal Executive Officer) |
|
Dated: November 10, 2022 |
|
Correlate Infrastructure Partners Inc. (Registrant)
/s/ Channing F. Chen |
|
|
| Chief Financial Officer (Principal Financial Officer) |
|
| 20 |
| This ‘10-Q’ Filing | Date | Other Filings | ||
|---|---|---|---|---|
 | ||||
| 9/29/24 | ||||
| 1/29/24 | ||||
| 11/7/23 | ||||
| 7/11/23 | ||||
| 1/11/23 | ||||
| 12/31/22 | ||||
| Filed on: | 11/10/22 | |||
| 11/7/22 | ||||
| For Period end: | 9/30/22 | |||
| 9/29/22 | ||||
| 7/29/22 | ||||
| 6/30/22 | 10-Q | |||
| 4/14/22 | 10-K | |||
| 4/5/22 | ||||
| 3/31/22 | 10-Q | |||
| 1/18/22 | 3 | |||
| 1/11/22 | ||||
| 12/31/21 | 10-K, NT 10-K | |||
| 12/28/21 | 3 | |||
| 9/30/21 | 10-Q | |||
| 6/30/21 | 10-Q, 10-Q/A, NT 10-Q | |||
| 3/31/21 | 10-Q, 10-Q/A | |||
| 12/31/20 | 10-K, 10-K/A | |||
| 5/29/20 | 10-K | |||
| 10/3/14 | ||||
| List all Filings | ||||