SEC Info℠

Home

Search

My Interests

Help

Sign In

Please Sign In

Correlate Energy Corp. – ‘S-1/A’ on 1/24/24

On:  Wednesday, 1/24/24, at 5:20pm ET   ·   Accession #:  1477932-24-351   ·   File #:  333-274999

Previous ‘S-1’:  ‘S-1/A’ on 12/18/23   ·   Next:  ‘S-1/A’ on 4/5/24   ·   Latest:  ‘S-1/A’ on 4/26/24   ·   10 References:   By:  Correlate Energy Corp. – Next ‘S-1/A’ on 4/5/24 To:  Correlate Energy Corp. – ‘S-1/A’ on 12/1/23 To:  Correlate Energy Corp. – ‘S-1’ on 10/16/23 To:  Correlate Energy Corp. – ‘DEF 14C’ on / for 5/16/23 To:  Correlate Energy Corp. – ‘10-K’ on 4/14/22 for 12/31/21 To:  Correlate Energy Corp. – ‘DEF 14C’ on / for 2/23/22 To:  Correlate Energy Corp. – ‘8-K’ on 1/25/22 for 1/24/22 To:  Correlate Energy Corp. – ‘8-K’ on / for 1/3/22 To:  Worksport Ltd. – ‘S-1’ on 5/14/21 To:  Correlate Energy Corp. – ‘8-K’ on 3/6/20 for 2/28/20 

in

this entire Filing. an “Entity” Search.

Show

Documents searched

and

each “hit”. the 1st “hit”.

↓↑Hints

 Text Wildcards:  ? (any letter/digit),  * (many).  Search Logic:  for Documents:  & (and),  | (or);  for Text:  | (anywhere),  "(&)" (near).  Details... 

  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 1/24/24  Correlate Energy Corp.            S-1/A                 65:9.9M                                   Discount Edgar/FA

Document/Exhibit                   Description                      Pages   Size 

 1: S-1/A       Pre-Effective Amendment to Registration Statement   HTML   2.93M 
                (General Form)                                                   
 2: EX-23.1     Consent of Expert or Counsel                        HTML     19K 
 3: EX-FILING FEES  Filing Fees                                     HTML     32K 
 9: R1          Cover                                               HTML     47K 
10: R2          Condensed Consolidated Balance Sheets               HTML    143K 
11: R3          Condensed Consolidated Balance Sheets               HTML     43K 
                (Parenthetical)                                                  
12: R4          Condensed Consolidated Statements of Operations     HTML     97K 
                (Unaudited)                                                      
13: R5          Condensed Consolidated Statements of Changes in     HTML    140K 
                Stockholders Deficit (Unaudited)                                 
14: R6          Condensed Consolidated Statements of Cash Flows     HTML    141K 
                (Unaudited)                                                      
15: R7          Nature of the Organization and Business             HTML     33K 
16: R8          Summary of Significant Accounting Policies          HTML     83K 
17: R9          Commitments and Contingencies                       HTML     24K 
18: R10         Debt                                                HTML    248K 
19: R11         Equity                                              HTML     92K 
20: R12         Concentrations                                      HTML     37K 
21: R13         Related Party Transactions                          HTML     36K 
22: R14         Federal Income Tax                                  HTML     37K 
23: R15         Intangible Assets                                   HTML     45K 
24: R16         Business Combination                                HTML     54K 
25: R17         Subsequent Events                                   HTML     27K 
26: R18         Nature of the Organization and Business (Policies)  HTML     22K 
27: R19         Summary of Significant Accounting Policies          HTML    148K 
                (Policies)                                                       
28: R20         Summary of Significant Accounting Policies          HTML     43K 
                (Tables)                                                         
29: R21         Debt (Tables)                                       HTML    230K 
30: R22         Equity (Tables)                                     HTML     75K 
31: R23         Intangible Assets (Tables)                          HTML     45K 
32: R24         Concentrations (Tables)                             HTML     35K 
33: R25         Federal Income Tax (Tables)                         HTML     37K 
34: R26         Business Combination (Tables)                       HTML     54K 
35: R27         Nature of the Organization and Business (Details    HTML     27K 
                Narrative)                                                       
36: R28         Summary of Significant Accounting Policies          HTML     28K 
                (Details)                                                        
37: R29         Summary of Significant Accounting Policies          HTML     28K 
                (Details 1)                                                      
38: R30         Summary of Significant Accounting Policies          HTML     57K 
                (Details Narrative)                                              
39: R31         Commitments and Contingencies (Details Narrative)   HTML     39K 
40: R32         Debt (Details)                                      HTML    150K 
41: R33         Debt (Details 1)                                    HTML     82K 
42: R34         Debt (Details 2)                                    HTML     44K 
43: R35         Debt (Details Narrative)                            HTML    165K 
44: R36         Equity (Details)                                    HTML     41K 
45: R37         Equity (Details 1)                                  HTML     43K 
46: R38         Equity (Details 2)                                  HTML     37K 
47: R39         Equity (Details Narrative)                          HTML    226K 
48: R40         Concentrations (Details)                            HTML     32K 
49: R41         Related Party Transactions (Details Narrative)      HTML     69K 
50: R42         Federal Income Tax (Details)                        HTML     28K 
51: R43         Federal Income Tax (Details 1)                      HTML     27K 
52: R44         Federal Income Tax (Details Narrative)              HTML     24K 
53: R45         Intangible Assets (Details)                         HTML     37K 
54: R46         Intangible Assets (Details 1)                       HTML     29K 
55: R47         Business Combinations (Details)                     HTML     24K 
56: R48         Business Combinations (Details 1)                   HTML     49K 
57: R49         Business Combinations (Details 2)                   HTML     48K 
58: R50         Business Combinations (Details 3)                   HTML     41K 
59: R51         Business Combination (Details Narrative)            HTML     21K 
60: R52         Subsequent Events (Details Narrative)               HTML     86K 
63: XML         IDEA XML File -- Filing Summary                      XML    118K 
61: XML         XBRL Instance -- cipi_s1a_htm                        XML   2.48M 
62: EXCEL       IDEA Workbook of Financial Report Info              XLSX    162K 
 6: EX-101.CAL  XBRL Calculations -- cipi-20230930_cal               XML     61K 
 8: EX-101.DEF  XBRL Definitions -- cipi-20230930_def                XML    665K 
 5: EX-101.LAB  XBRL Labels -- cipi-20230930_lab                     XML   1.08M 
 7: EX-101.PRE  XBRL Presentations -- cipi-20230930_pre              XML    894K 
 4: EX-101.SCH  XBRL Schema -- cipi-20230930                         XSD    241K 
64: JSON        XBRL Instance as JSON Data -- MetaLinks              422±   595K 
65: ZIP         XBRL Zipped Folder -- 0001477932-24-000351-xbrl      Zip    614K 

As filed with the Securities and Exchange Commission on January 24, 2024

Registration No. 333-274999

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 FORM  i S-1/A

REGISTRATION STATEMENT

Under

The Securities Act of 1933

 i 176 S. Capitol Blvd.,  i 2nd Floor

 i Boise,  i Idaho  i 83702

( i 855)  i 264-4060

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

Todd Michaels

176 S. Capitol Blvd., 2^nd Floor

Boise, Idaho 83702

(855) 264-4060

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Please send copies of all communications to:

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

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:

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 7(a)(2)(B) of the Securities Act. ☐

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and the Company is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

[●] Units, Each Unit Consisting of One Share of Common Stock

and One Warrant to Purchase One Share of Common Stock,

 [●] Pre-Funded Units, Each Pre-Funded Unit Consisting of One Pre-Funded Warrant to Purchase

One Share of Common Stock and One Warrant to Purchase One Share of Common Stock,

and the shares of Common Stock underlying such Warrants and Pre-Funded Warrants

CORRELATE ENERGY CORP. 

This is a firm commitment underwritten public offering (the “Offering”) of [●] units (each, a “Unit,” collectively, the “Units”). Each Unit consists of one share of Common Stock, $0.0001 par value per share (the “Common Stock”) and one warrant to purchase one share of Common Stock (each, a “Warrant,” collectively, the “Warrants”) at an assumed public offering price of $[●] per Unit, of Correlate Energy Corp., a Nevada corporation (the “Company,” “we,” “us,” “our”).

We are also offering to those purchasers, if any, whose purchase of Units in this Offering would otherwise result in the purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99% (or, at the election of the purchaser, 9.99%) of our outstanding shares of Common Stock immediately following the consummation of this Offering, the opportunity to purchase, if the purchaser so chooses, Pre-Funded Units (each, a “Pre-Funded Unit” collectively, the “Pre-Funded Units”) in lieu of Units that would otherwise result in the purchaser’s beneficial ownership exceeding 4.99% (or, at the election of the purchaser, 9.99%) of our outstanding shares of common stock. Each Pre-Funded Unit will consist of a pre-funded warrant to purchase one share of Common Stock at an exercise price of $0.001 per share (each a “Pre-Funded Warrant,” collectively, the “Pre-Funded Warrants”) and one Warrant. The purchase price of each Pre-Funded Unit will be equal to the price per Unit being sold to the public in this offering, minus $0.001, and the exercise price of each Pre-Funded Warrant included in the Pre-Funded Units will be $0.001 per share. The Pre-Funded Warrants will be immediately exercisable and may be exercised at any time until all of the Pre-Funded Warrants are exercised in full. For each Pre-Funded Unit we sell, the number of Units we are offering will be decreased on a one-for-one basis. The offering also includes the shares of Common Stock issuable from time to time upon exercise of the Warrants included in the Pre-Funded Units and the Pre-Funded Warrants.

The Units or Pre-Funded Units have no stand-alone rights and will not be certificated or issued as stand-alone securities. The shares of Common Stock and the Warrants underlying the Units are immediately separable and will be issued separately in this Offering. Each Warrant offered as part of this Offering will have an exercise price of $[●] per share (the public offering price per Unit minus $0.125), is immediately exercisable on the date of issuance and will expire five (5) years after the initial issuance date.

We are a fully reporting company under Section 12(g) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Our Common Stock is currently quoted on the OTCQB Marketplace (the “OTCQB”) under the symbol “CIPI.” As of [●], 2024, the last reported sales price for our Common Stock as quoted on the OTCQB was $[●] per share ($[●] per share, assuming a reverse stock split of 1-for-[●]). We intend to list our Common Stock on the New York Stock Exchange (“NYSE”) under the symbol CIPI. There can be no assurance that we will be successful in listing our Common on NYSE. Prices of our Common Stock as reported on the OTCQB may not be indicative of the prices of our Common Stock if our Common Stock were traded on the NYSE. This Offering is contingent upon the listing of our Common Stock on the NYSE. There is no established trading market for the Warrants or the Pre-Funded Warrants, and we do not expect a market to develop. In addition, we do not intend to apply for the listing of the Warrants or the Pre-Funded Warrants on any national securities exchange or other trading market. Without an active trading market, the liquidity of the Warrants and the Pre-Funded Warrants will be limited.

The actual offering price (the “Offering Price”) per Unit will be determined by us and Aegis Capital Corp. (“Aegis” or the “Underwriter””), in connection with this offering, taking into consideration several factors as described between Aegis and us at the time of pricing, considering our historical performance and capital structure, prevailing market conditions, and overall assessment of our business, and will not be based upon the price of our Common Stock on the OTCQB. Therefore, the assumed public offering price used throughout this prospectus may not be indicative of the actual public offering price for our Common Stock.

Unless otherwise noted and other than in our financial statements and the notes thereto, the share and per share information in this prospectus reflects a proposed 1-for-[●] reverse stock split of our outstanding Common Stock and treasury stock to occur concurrently with the effective date of the registration statement of which this prospectus is a part and prior to the closing of this offering.

Investing in our securities involves a high degree of risk. See “Risk Factors” beginning on page 9 of this prospectus. You should carefully consider these risk factors, as well as the information contained in this prospectus, before you invest.

Neither the Securities and Exchange Commission (the “SEC”) nor any state securities commission has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

We have granted the Underwriter a 45-day option after closing of the Offering, exercisable one or more times in whole or in part, to purchase up to [●] additional shares of Common Stock and/or Pre-Funded Warrants, representing 15% of the shares and Pre-funded Warrants sold in the Offering and/or up to [●] additional Warrants, representing 15% of the Warrants sold in the Offering. (the “Underwriter’s Over-Allotment Option”), in all cases less the underwriting discount, solely to cover over-allotments, if any.

The Underwriter expects to deliver the securities against payment to the investors in this Offering on or about ______, 2024.

Sole Book-Running Manager

Aegis Capital Corp.

The date of this prospectus is [●], 2024.

TABLE OF CONTENTS

You should rely only on information contained in this prospectus. We have not, and the Underwriter has not, authorized anyone to provide you with additional information or information different from that contained in this prospectus. Neither the delivery of this prospectus nor the sale of our securities means that the information contained in this prospectus is correct after the date of this prospectus. This prospectus is not an offer to sell or the solicitation of an offer to buy our securities in any circumstances under which the offer or solicitation is unlawful or in any state or other jurisdiction where the offer is not permitted.

For investors outside the United States: Neither we nor the Underwriter have taken any action that would permit this Offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the Offering of the securities covered hereby and the distribution of this prospectus outside of the United States.

The information in this prospectus is accurate only as of the date on the front cover of this prospectus. Our business, financial condition, results of operations and prospects may have changed since those dates.

No person is authorized in connection with this prospectus to give any information or to make any representations about us, the securities offered hereby or any matter discussed in this prospectus, other than the information and representations contained in this prospectus. If any other information or representation is given or made, such information or representation may not be relied upon as having been authorized by us.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “anticipate,” “predict,” “project,” “forecast,” “potential,” “continue,” and the negatives thereof or similar expressions. Forward-looking statements speak only as of the date they are made, are based on various underlying assumptions and current expectations about the future and are not guarantees of future performance. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, level of activity, performance or achievement to be materially different from the results of operations or plans expressed or implied by such forward-looking statements. You are cautioned to not place undue reliance on these forward-looking statements, which speak only as of their dates.

We cannot predict all the risks and uncertainties that may impact our business, financial condition or results of operations. Accordingly, the forward-looking statements in this prospectus should not be regarded as representations that the results or conditions described in such statements will occur or that our objectives and plans will be achieved, and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. These forward-looking statements are found at various places throughout this prospectus.

Important factors that could cause actual results to differ materially from those in the forward-looking statements included herein include, but are not limited to, information concerning possible or projected future results of our operations, including statements about potential acquisition or merger targets, strategies or plans; business strategies; prospects; future cash flows; financing plans; plans and objectives of management; limited working capital; limited access to capital; changes from anticipated levels of sales; future national or regional economic and competitive conditions; changes in relationships with customers; difficulties in developing and marketing new products; difficulties in marketing existing products; customer acceptance of existing and new products; technological change; dependence on key personnel; availability of key component parts, vendors and contractors; product liability; any other statements regarding future acquisitions, future cash needs, future operations, business plans and future financial results; and any other statements that are not historical facts.

These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to a variety of factors and risks, including, but not limited to, those set forth under “Risk Factors” starting page 9 of this prospectus.

Many of those risks and factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. Considering these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this prospectus. All subsequent written and oral forward-looking statements concerning other matters addressed in this prospectus and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this prospectus.

Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.

All references to “Correlate,” “CIPI,” “the Company”, “we” or “our” as used herein refers to the consolidated operations of the Company and its operating subsidiaries.

We express all amounts in this prospectus in U.S. dollars, except where otherwise indicated. References to “$” and “US$” are to U.S. dollars.

CAUTIONARY NOTE REGARDING INDUSTRY DATA

This prospectus includes industry data that we obtained from market research, publicly available information and industry publications. We did not fund and are not otherwise affiliated with any of the sources cited in this prospectus. We obtained the industry, market and competitive position data used throughout this prospectus from our own internal estimates and research, as well as from independent market research, industry and general publications and surveys, governmental agencies and publicly available information in addition to research, surveys and studies conducted by third parties. Internal estimates are derived from publicly available information released by industry analysts and third-party sources, our internal research and our industry experience, and are based on assumptions made by us based on such data and our knowledge of our industry and market, which we believe to be reasonable. In some cases, we do not expressly refer to the sources from which this data is derived. In that regard, when we refer to one or more sources of this type of data in any paragraph, you should assume that other data of this type appearing in the same paragraph is derived from the same sources, unless otherwise expressly stated or the context otherwise requires. In addition, while we believe the industry, market and competitive position data included in this prospectus is reliable and based on reasonable assumptions, such data involve risks and uncertainties and are subject to change based on various factors, including those discussed in “Risk Factors.” These and other factors could cause results to differ materially from those expressed in the estimates made by third parties or by us.

PROSPECTUS SUMMARY

This summary highlights certain information appearing elsewhere in this prospectus. Because this is only a summary, it does not contain all of the information you should consider before investing in our securities and it is qualified in its entirety by, and should be read in conjunction with, the more detailed information included elsewhere in this prospectus. Before you make an investment decision, you should read this entire prospectus carefully, including the risks of investing in our securities discussed under the section of this prospectus entitled “Risk Factors” and similar headings. You should also carefully read our financial statements, and the exhibits to the registration statement of which this prospectus is a part.

Overview

Correlate Energy Corp. (formerly Correlate Infrastructure Partners Inc.), together with its subsidiaries (collectively the “Company”, “Correlate”, “we”, “us” and “our”), is a technology-enabled vertically integrated sales, development, and fulfillment platform focused on distributed clean and resilient energy solutions in North America.

We focus on real estate assets that have a complex energy profile, but do not have the resources of time, expertise, or capital available to invest in technology and sustainable infrastructure upgrades that will improve the net operating income (NOI) and resiliency of those properties. Complexities can stem from building and property owners having a large portfolio of sites in different locations, or a single location that has a variety of different business processes, operations, and equipment that require a wide skillset of expertise to continually optimize (such as achieving the ISO 50001 standard).

We provide property owners and real estate investment trusts (REITs) access to a multitude of energy experts and solutions via a lean software-driven process, with end-to-end engineering, finance, project management, and fulfillment services for all major facility energy improvements. Through our processes, we manage client opportunities with the correct experts, solutions, and execution resources across their entire portfolio to help our clients achieve their sustainability mandates, extend facility uptime, and/or improve bottom line operating margins. The Company leverages on-demand and in-house experts with our internal systems and technology to turn our clients drive for a competitive edge into a comprehensive energy optimization and management program. Each custom program can significantly lower our client’s energy usage, costs, and carbon footprint, thereby improving NOI and providing our clients more flexibility to focus and invest in other areas of their businesses.

The Company is also involved in the development of microgrid infrastructure opportunities in areas that cannot be properly served by centralized electrical infrastructure because of a lack of grid capacity or transmission infrastructure, lack of funding available for new buildouts, or long lead times for electricity to be delivered by the utilities. Microgrids are emerging as a flexible approach to deploying distributed energy resources that can meet the electricity needs of existing communities and new developments without necessarily being connected to the power grid.

Behind this platform is a team of multi-decade industry experts in renewable energy generation, efficiency technology, software development, project finance, supply chain, and construction. The Company’s team is comprised of serial entrepreneurs and innovators that have built some of the leading companies in the clean energy space, including technology-based startups and F500 divisions. Our CEO, Todd Michaels, has been in the solar industry since 2005, formerly as VP of Product Innovations at SunEdison, Senior Director - Distributed Solar at NRG Energy (NYSE: NRG), and SVP of Project Development and Marketing at Solar Power Partners (acquired by NRG Energy in 2011). Jason Loyet, our Director of Commercial Solar, has over 20 years in the cleantech industry and was a U.S. Department of Energy SunShot Catalyst award winner for his work building the Solar Site Design technology platform. Our Chief Revenue Officer, Dave Bailey, brings over 15 years of executive sales, supply chain management, and energy efficiency experience from Wesco’s Distributed Energy Resource division (formerly Westinghouse) and GE Supply. Our CFO, Johan Themaat, has held key financial positions at private, public, and startup companies, including Mission Energy, NGL Energy Partners, and RBS. As CFO of Mission Energy, he led financial strategy, back-office operations, and corporate development. As VP of M&A and Investor Relations of NGL Energy Partners (NYSE:NGL), he was instrumental in executing the acquisition strategy, forecasting, and board communications. He gained his financial experience as an investment banker, including RBS's energy investment bank. Mr. Themaat brings his proficiency in financial strategy, planning and analysis, M&A, and capital-raising transactions to the Company. Jed Freedlander, our Director of Corporate Development, has played a central role in the development of several high-profile Public-Private Partnership (P3) projects in the United States. His expertise in creating sustainable and resilient infrastructure has been instrumental in enhancing communities and driving economic growth. With a career spanning over two decades, Mr. Freedlander has garnered extensive experience in the field of infrastructure development where his roles have encompassed a wide range of responsibilities, from strategic planning to project implementation. Roger Baum, our Executive VP of Operations, has successfully sourced and implemented over $1 billion in projects where Mr. Baum’s roles have spanned the entire spectrum of turnkey project delivery, from legal structuring and financing to design and construction. Prior to joining the Company, Mr. Baum was most recently the Vice President of Public-Private Partnerships for CORE Construction, a leading billion-dollar construction management firm in the U.S.

We believe that building and property owners will choose our services for actionable, cashflow-positive/NOI improving energy programs. Furthermore, numerous states throughout the U.S. are setting renewable portfolio standards and goals, in addition to the critical and significant underlying carbon reduction mandates taking effect in the U.S. and beyond. Finally, with environmental, social, and governance (ESG) mandates increasingly becoming a priority for businesses, we believe that we are well-positioned to be one of the premier net-zero carbon, smart building platform sources in the United States.

Our Solutions

Our management team understands the barriers that are prohibiting the scalable deployment of distributed energy solutions and has developed innovative processes and tools targeted at bulk real estate owners, educating them on the financial benefits of energy projects, allowing them to compare potential energy upgrade options, and facilitating the actual implementation of the retrofit measures via attractive turnkey offerings with no-money down, 100% funding options. We also provide custom solutions for energy contractors to more efficiently target potential clients and offer more compelling energy services - fully funded and easy to comprehend.

We use software to bring together energy project development, institutional project financing, and certified installers into a process that is standardized with strong quality, investment grade controls. This ‘market-making’ model allows us to optimize and keep fixed costs low which, in turn, leads to high scalability and improved pricing for consumers while preserving financial returns to project investors and lenders.

Competitive Strengths

Our competitive strengths include the following:

Low-Cost Origination with Ongoing Upsell: We have an extensive referral partner network that brings us qualified leads keeping our cost of customer acquisition low. Our referral partner network includes original equipment manufacturers (OEMs), industry consultants, facility management providers, and industry peers. Additionally, since we stay with the customer’s facility over a multi-year contract, subsequent sales are very low cost and can be coordinated on a timely basis based on market and facility conditions we actively monitor. Our programs facilitate rapid engagements and get facilities to take action to manage their energy. Our proprietary process workflow tools for site data capture and project development are also used by our third-party Energy Service/Product providers to unlock their regional markets and historic client base. We believe that this provides an aggregation that further reduces our costs and increases the velocity of our growth for our ecosystem model, which is an integrated set of formal, contracted relationships for project origination, development, financing, and installation of solar, efficiency, storage, and EV charging that combine in-house resources with third-party regional and niche expertise to meet a nationwide scalable offering.

Simple, Transparent, Turnkey Customer Experience (Efficiency, Generation, Electric Vehicle (EV) charging infrastructure and power): When a client opts-in to our program services, the client gains access to a multitude of products, services, and installation capacity via a lean software driven process. Facility surveys, analytics, engineering, finance, project management and fulfillment services are all provided from one source for all major energy improvements. We address heating, cooling and lighting solutions, with clean onsite generation, that allows us to reach for Net Zero goals, while supporting new electric load growth, given high growth applications such as electric vehicle charging impact sites. Industry standard is separating providers by solution, forcing clients to manage multiple relationships, sort through complex proposals, and manage challenging contractors through completion. Our proactive management and monitoring systems address these issues allowing facility owners to focus on their core business as we provide a transparent turnkey experience for them.

Competition Across All Supply Chains: We are not tied to any particular product, equipment type, technology or project finance fund, allowing us to seek the best partner and supplier for each project to our advantage. A majority of facility owners and our clients put a premium on the disaggregation of our products and services for pricing transparency, but seek integrated solutions with a single, simple interface that we provide. Our ability to drive competition across the full supply chain from materials and labor, to project capital given our scale and diverse project portfolio provides us with a consistent margin advantage. Our procurement software further drives competition, decisions, insights, and speed to completion of client projects over time.

Highly Scalable National Development to Regional/Local Installation: Our team is comprised of multi-decade industry experts in sales, technology, project finance, supply chain, and construction. Our team includes serial entrepreneurs and innovators that have built and scaled leading companies in the clean energy and commercial construction space. We believe that we have achieved the optimal the balance between sophisticated, shared, centralized, remote development resources that then leverage local fulfilment teams across the diverse national U.S. markets. We optimize for margin, risk, and customer satisfaction for each opportunity by market.

Consistent Ongoing Customer Management via Software Driven Process: We provide unique tools and simple reports online for clients that make clear the benefits, timelines, actions, and approvals required upfront and over time. Our software and solutions allow us to streamline our processes and services without the need for a large-scale customer support staff to manage hundreds of new locations per year. Our internal staff uses customized, customer engagement methods and support software to quickly and accurately respond to current and potential clients.

Although we believe that our competitive strengths described above will help us achieve our strategic plans, there are also certain challenges that we face and there are risks and limitations that could harm our business and/or inhibit our strategic plans, which include, but are not limited to, the following:

In addition to the foregoing, please review the section entitled “Risk Factors” commencing on page 9, for a more complete description of the risks that we may experience with respect to our Company.

Intellectual Property

While the success of our business depends more on such factors as our employees’ technical expertise and innovative skills, the success of our business also relies on our ability to protect our proprietary technology. Accordingly, we seek to protect our intellectual property rights in a variety of ways. Although we do not currently have any patented technologies that we use in our business, we seek to protect our proprietary technology and other proprietary rights by requiring our employees and contractors to execute confidentiality and invention assignment agreements. We also rely on employee and third-party nondisclosure agreements and other intellectual property protection methods, including proprietary know-how, to protect our confidential information and our other intellectual property.

We have registered each of Correlate and the Correlate logo as service marks with the U.S. Patent and Trademark Office.

Market Opportunity

Solar deployment in the U.S., relative to other energy sources, has reached a tipping point, where in 2022 solar PV is projected to account for over 50% of new generating capacity brought online according to the U.S. Energy Information Administration, Preliminary Monthly Electric Generator Inventory. Yet market penetration remains below 5% according to the U.S. Energy Information Administration, 2020 Residential Energy Consumption Survey and the 2018 Commercial Energy Consumption Survey. We believe that a software-centered, asset-light development and financing business model that is focused on continuous design and process improvement will allow solar to achieve large-scale adoption.

The U.S. Energy Information Administration (EIA) estimates that there are 6 million commercial buildings in the U.S. This sector is the largest single consumer of energy in the country - using over $2 trillion of energy each year. The EIA and the U.S. Department of Energy (DOE) estimate that up to 30%, or approximately $600 billion, is wasted through inefficiencies, representing 15% of greenhouse gas emissions, according to industry experts. According to the U.S. Green Building Council, as of 2022, only 100,000 buildings in the country have a Leadership in Energy and Environmental Design (LEED) certification, a global rating system that acts as a framework to guide energy efficiency, among others. While energy upgrades have real, tangible results, this reveals that a majority of buildings still lack energy programs. According to the DOE, some of the primary barriers that prevent businesses from adopting energy measures include lack of funding, perceived insufficient return of investment, lack of the ability to investigate and implement projects, and lack of general knowledge and technical expertise to implement and maintain such projects. Despite the hesitancy of building and property owners to investigate and implement such projects, we believe that opportunities for improved energy efficiency, lower costs, and lower carbon emissions are enormous, and there are favorable market conditions that point towards market opportunities for us to significantly grow our business. For instance, rapid technological advancements and decreasing costs have driven renewable energy as the second-most widespread electricity source in the country. The EIA reports that renewable energy reached a record high of 14% of total energy consumption in 2022 (latest data available). Among renewable energy sources, solar power has become the most predominant, with solar power capacity growing from just 0.34 GW in 2008 to approximately 142.3 GW in 2022, per the Solar Energy Industries Association (SEIA). When it comes to commercial building retrofits, the Rocky Mountain Institute estimates that portfolio energy optimization is a $290 billion market in the U.S., driving deep financial savings and energy efficiency across the commercial sector.

At the same time, the U.S. is powering itself with clean, renewable energy to strategically phase out carbon pollution by 2050. The U.S. government has recently outlined long-term goals to cut emissions by 50% to 52% by 2030 based on 2005 levels and accomplishing a net zero economy by 2050. States and local governments are also taking action to phase out carbon pollution. There are 38 states and the District of Columbia (DC) that have renewable portfolio standards (RPS) and in 12 of those states (plus DC), the requirement is for 100% clean energy by 2050 or earlier. More than 2,000 businesses and financial institutions have partnered with the Science Based Targets initiative (SBTi) to reduce their emissions in line with climate science; meanwhile, over 400 corporations worldwide are working with RE100, a corporate initiative of businesses committed to 100% renewable energy. With massive market demand for carbon reduction and energy optimization, we believe that our scalable offerings are well-positioned to meet these goals.

Listing on the NYSE

Our Common Stock is currently quoted on the OTC Market’s OTCQB under the symbol “CIPI.” In connection with this Offering, we intend to apply to have our Common Stock listed on the New York Stock Exchange under the symbol “CIPI”. This Offering is contingent upon the listing of our Common Stock on the NYSE. If NYSE approves our listing application, we expect to list our Common Stock upon consummation of the Offering, at which point our Common Stock will cease to be traded on the OTCQB. NYSE’s listing requirements include, among other things, a stock price threshold. As a result, prior to effectiveness of our registration statement of which this prospectus is a part, we will need to take the necessary steps to meet NYSE’s listing requirements, including, but not limited to, effectuating a reverse split of our Common Stock (as further discussed below). Prices of our Common Stock as reported on the OTCQB may not be indicative of the prices of our Common Stock if our Common Stock were traded on the NYSE. If NYSE does not approve the listing of our Common Stock, we will not proceed with this Offering. There can be no assurance that our listing application will be approved or that our Common Stock will be listed on NYSE.

Reverse Stock Split

We intend to effect a 1-for-[●] reverse stock split of our outstanding Common Stock concurrently with the effectiveness of the registration statement of which this prospectus is a part, and prior to the closing of this Offering. No fractional shares will be issued in connection with the reverse stock split and all such fractional shares resulting from the reverse stock split will be rounded up to the nearest whole number. The shares issuable upon the exercise of our outstanding warrants and the exercise prices of such warrants will be adjusted to reflect the reverse stock split. Unless otherwise noted, the share and per share information in this prospectus reflects, other than in our financial statements and the notes thereto, the intended 1-for-[●] reverse stock split. There will be no effect on the number of shares of Common Stock or preferred stock authorized for issuance under our articles of incorporation or the par value of such securities.

Principal Risks

We are subject to various risks discussed in detail under “Risk Factors” starting on page 9 of this prospectus and which include risks related to the following:

Corporate Information

Our executive offices are located at 176 S. Capitol Blvd., 2^nd Floor, Boise, Idaho 83702. Our main telephone number is (855) 264-4060. Our main website is www.correlate.energy, the contents of which are not incorporated by reference into this prospectus.

SUMMARY OF THE OFFERING

SUMMARY FINANCIAL DATA

The following tables summarize our financial data. We derived the summary financial statement data for the nine months ended September 30, 2023 and 2022 and the years ended December 31, 2022 and 2021 set forth below from our unaudited and audited financial statements and related notes contained in this prospectus. Our historical results are not necessarily indicative of the results that may be expected in the future. You should read the information presented below together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” our financial statements, the notes to those statements and the other financial information contained in this prospectus.

Summary of Operations in U.S. Dollars:

Balance Sheet Data in U.S. Dollars:

RISK FACTORS

Any investment in our securities involves a high degree of risk. You should consider carefully the risks and uncertainties described below and all information contained in this prospectus, before you decide whether to purchase our securities. If any of the following risks or uncertainties actually occurs, our business, financial condition, results of operations and prospects would likely suffer, possibly materially. In addition, the trading price of our securities could decline due to any of these risks or uncertainties, and you may lose part or all of your investment.

Risks Related to Our Business

We have incurred net losses before income taxes and may be unable to achieve or sustain profitability in the future.

We have incurred net losses from operations during the nine month period ended September 30, 2023 and for each of the last two years, which as of September 30, 2023, accumulated to $14,155,814, including a net loss of $8,363,407, $5,717,158 and $75,249 for the nine months ended September 30, 2023, and the years ended December 31, 2022 and 2021, respectively. We may continue to incur net losses as we increase our spending to finance the expansion of our operations, expand our installation, engineering, administrative, sales and marketing staffs, increase spending on our brand awareness and other sales and marketing initiatives, make significant investments to drive future growth in our business and implement internal systems and infrastructure to support our growth. We do not know whether our revenue will grow rapidly enough to absorb these costs and our limited operating history makes it difficult to assess the extent of these expenses or their impact on our results of operations. Our ability to sustain profitability depends on a number of factors, including but not limited to:

We may be unable to achieve positive cash flows from operations in the future.

Our management has concluded that uncertainties around our ability to raise additional capital raise substantial doubt about our ability to continue as a going concern. We will require additional financing to fund our future operations. Any failure to obtain additional capital when needed on acceptable terms, or at all, could force us to delay, limit, reduce or terminate our operations.

We have concluded that we do not have sufficient cash to fund our operations and to meet our obligations as they become due within one year from the date that our consolidated financial statements are issued and as a result, there is substantial doubt about our ability to continue as a going concern.

Our ability to continue as a going concern is an issue raised as a result of ongoing operating losses and a lack of financing commitments to meet cash requirements and is subject to our 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 2024 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.

We cannot assure you that we will be able to raise additional capital on commercially reasonable terms or at all. The perception that we may not be able to continue as a going concern may materially limit our ability to raise additional funds through the issuance of new debt or equity securities or otherwise and no assurance can be given that sufficient funding will be available when needed to allow us to continue as a going concern. This perception may also make it more difficult to operate our business due to concerns about our ability to meet our contractual obligations. If we cannot continue as a going concern, we may have to liquidate our assets and may receive less than the value at which those assets are carried on our financial statements, and it is likely that our stockholders may lose some or all of their investment in us.

Our growth strategy depends on the widespread adoption of solar power and renewable energy technology.

The market for solar power products is emerging and rapidly evolving, and our future success is uncertain. If solar power technology proves unsuitable for widespread commercial deployment or if demand for solar power products fails to develop sufficiently, it is likely that we would be unable to generate enough revenues to achieve and sustain profitability and positive cash flow. The factors influencing the widespread adoption of solar power technology include but are not limited to:

If we cannot compete successfully against other companies that provide services that compete with ours, we may not be successful in developing our operations and our business may suffer.

The solar and energy industries are characterized by intense competition and rapid technological advances, both in the U.S. and internationally. We compete with other technology-enabled clean energy optimization companies with business models that are similar to ours. In addition, we compete with solar companies in the downstream value chain of solar energy. We face competition from purely sales and finance driven organizations that acquire customers and then subcontract out the installation of solar energy systems, from installation businesses that seek financing from external parties, from large construction companies and utilities, and increasingly from sophisticated electrical and roofing companies. Further, some competitors are integrating vertically in order to ensure supply and to control costs. Many of our competitors also have significant brand name recognition and have extensive knowledge of our target markets, as well as significantly greater personnel and financial resources than us. If we are unable to compete in the market, there will be an adverse effect on our business, financial condition, and results of operations.

With respect to providing electricity on a price-competitive basis, solar systems face competition from traditional regulated electric utilities, from less-regulated third party energy service providers and from new renewable energy companies.

The solar energy and renewable energy industries are both highly competitive and continually evolving as participants strive to distinguish themselves within their markets and compete with large traditional utilities. We believe that our primary competitors are the traditional utilities that supply electricity to our potential customers. Traditional utilities generally have substantially greater financial, technical, operational and other resources than us and the partners we contract with. As a result, these competitors may be able to devote more resources to the research, development, promotion, and sale of their products or respond more quickly to evolving industry standards and changes in market conditions than we can. Traditional utilities could also offer other value-added products or services that could help them to compete with us even if the cost of electricity they offer is higher than the energy solutions we can offer them. In addition, a majority of utilities’ sources of electricity is non-solar, which may allow utilities to sell electricity more cheaply than electricity generated by the renewable energy solutions we can offer.

We also compete with companies that are not regulated like traditional utilities, but that have access to the traditional utility electricity transmission and distribution infrastructure pursuant to state and local pro-competitive and consumer choice policies. These energy service companies are able to offer customers electricity supply-only solutions that are competitive with our solar energy system options on both price and usage of renewable energy technology while avoiding the long-term agreements and physical installations that our third party financed business model requires. This may limit our ability to attract new customers, particularly those who wish to avoid long-term contracts or have an aesthetic or other objection to putting solar panels on their roofs.

Our failure to adapt to changing market conditions and to compete successfully with existing or new competitors will limit our growth and will have a material adverse effect on our business and prospects.

A material reduction in the retail price of traditional utility-generated electricity or electricity from other sources could harm our business, financial condition, results of operations and prospects.

We believe that a significant number of our customers decide to install solar energy systems and retrofit their internal building systems with more efficient systems and controls because they want to pay less for electricity than what is offered by the traditional utilities. However, distributed commercial and industrial (C&I) solar energy has yet to achieve broad market adoption as evidenced by the fact that distributed solar has penetrated less than 5% of its total addressable market in the U.S. C&I sector.

The customer’s decision to choose solar energy and to retrofit their internal building systems with more efficient systems and controls may also be affected by the cost of other renewable energy sources. Decreases in the retail prices of electricity from the traditional utilities or from other renewable energy sources would harm our ability to offer competitive pricing and could harm our business. The price of electricity from traditional utilities could decrease as a result of:

A reduction in utility electricity prices would make the purchase or the lease of our solar energy systems and the retrofit of their internal building operating systems less economically attractive. If the retail price of energy available from traditional utilities were to decrease due to any of these reasons, or other reasons, we would be at a competitive disadvantage, we may be unable to attract new customers and our growth would be limited.

Due to the limited number of suppliers in the solar industry, the acquisition of any of these suppliers by a competitor or any shortage, delay, quality issue, price change, or other limitations in our ability to obtain components or technologies we use in our projects could result in adverse effects.

While we purchase our products from several different suppliers, If one or more of the solar industry suppliers that we rely upon to meet anticipated demand ceases or reduces production due to its financial condition, acquisition by a competitor, or otherwise, is unable to increase production as industry demand increases or is otherwise unable to allocate sufficient production to us or our subcontractors, it may be difficult to quickly identify alternate suppliers or to qualify alternative products on commercially reasonable terms, and our ability to complete our solar projects may be adversely affected. At times, suppliers may have issues with the quality of their products, which may not be realized until the product has been installed at a customer site. This may result in additional cost incurred. There are a limited number of suppliers of solar energy system components and technologies. While we believe there are other sources of supply for these products available, transitioning to a new supplier may result in additional costs and delays in acquiring our solar products and completing our projects. These issues could harm our business or financial performance.

There have also been periods of industry-wide shortages of key components, including solar panels, in times of industry disruption. The manufacturing infrastructure for some of these components has a long lead-time, requires significant capital investment and relies on the continued availability of key commodity materials, potentially resulting in an inability to meet demand for these components. The solar industry is frequently experiencing significant disruption and, as a result, shortages of key components, including solar panels, may be more likely to occur, which in turn may result in price increases for such components. Even if industry-wide shortages do not occur, suppliers may decide to allocate key components with high demand or insufficient production capacity to more profitable customers, customers with long-term supply agreements or customers other than us and our supply of such components may be reduced as a result. Delays would push out project completion dates in our timelines.

Any supply shortages, delays, quality issues, price changes or other limitations in our ability to obtain components or technologies for our projects could limit our growth, cause cancellations or adversely affect our profitability, and result in loss of market share and damage to our brand.

Our business, financial condition, results of operations and prospects could suffer if we are not able to attract third party project financing or capital sources to finance or purchase completed projects from us.

Third party project financing and project capital sources are critical to our business. The lack of or absence of these capital sources could severely and adversely affect the growth, operations and profitability of our business.

Our business, financial condition, results of operations and prospects could suffer if we do not proceed with projects under development or are unable to complete the construction of, or capital improvements to, facilities on schedule or within budget.

Our ability to proceed with projects under development and to complete the construction of, or capital improvements to, facilities on schedule and within budget may be adversely affected by escalating costs for materials and labor and regulatory compliance, inability to obtain or renew necessary licenses, rights-of-way, permits or other approvals on acceptable terms or on schedule, disputes involving contractors, labor organizations, land owners, governmental entities, environmental groups, Native American and aboriginal groups, lessors, joint venture partners and other third parties, negative publicity, interconnection issues and other factors. If any development project or construction or capital improvement project is not completed, is delayed or is subject to cost overruns, certain associated costs may not be approved for recovery or otherwise be recoverable through regulatory mechanisms that may be available, and we could become obligated to make delay or termination payments or become obligated for other damages under contracts, could experience the loss of tax credits or tax incentives, or delayed or diminished returns, and could be required to write off all or a portion of its investment in the project. Any of these events could have a material adverse effect on our business, financial condition, results of operations and prospects.

We may not be able to effectively manage our growth.

Our future growth, if any, may cause a significant strain on our management and our operational, financial, and other resources. Our ability to manage our growth effectively will require us to implement and improve our operational, financial, and management systems and to expand, train, manage, and motivate our employees. These demands will require the hiring of additional management personnel and the development of additional expertise by management. Any increase in resources used without a corresponding increase in our operational, financial, and management systems could have a negative impact on our business, financial condition, and results of operations.

We may not realize the anticipated benefits of acquisitions, and integration of these acquisitions may disrupt our business and management.

We have in the past, and in the future we may, acquire companies, project pipelines, products or technologies or enter into joint ventures or other strategic initiatives. We may not realize the anticipated benefits of these acquisitions, and any acquisition has numerous risks. These risks include the following:

Acquisitions of companies, businesses and assets are inherently risky and, if we do not complete the integration of these acquisitions successfully and in a timely manner, we may not realize the anticipated benefits of the acquisitions to the extent anticipated, which could adversely affect our business, financial condition, or results of operations.

Our growth depends in part on the success of our relationships with third parties.

A key component of our growth strategy is to expand our relationships with third parties and develop new relationships with third-parties, including but not limited to independent sales organizations (ISO’s), Energy Solution Providers (ESPs), engineering firms, electrical, roofing and civil contractors. The majority of our revenues are expected to be generated from leads sourced by independent sales organizations (ISOs) whom we select, control and direct using the Company’s platform. Sales only organizations or ESPs that we have relationships with include electrical contractors, software, hardware and other service providers that provide, install and maintain energy improvement measures on customer facilities, who are paid a commission for each transaction that is installed and completed. Additionally, the installation of our projects are completed by third-party contractors under our direction and control, which include engineering firms, electrical, roofing and civil contractors. Negotiating new relationships with ISOs, training such ISOs and third-party contractors and monitoring them for compliance with our standards require significant time and resources and may present greater risks and challenges than expanding a direct sales or installation team. If we are unsuccessful in maintaining our relationships with these third parties and establishing new relationships with other third parties as we seek to expand our business, our ability to grow our business and address our market opportunity could be impaired. Even if we are able to maintain these relationships and establish new ones, we may not be able to execute on our goal of leveraging these relationships to meaningfully expand our business, brand recognition and customer base. This would limit our growth potential and our opportunities to generate significant additional revenue or cash flows.

If we are unable to recruit and retain qualified technicians, advisors, industry professionals, or if our board of directors, key executives, key employees or consultants discontinue their employment or consulting relationship with us, it may delay our development efforts or otherwise harm our business.

We may not be able to attract or retain qualified management or technical personnel in the future due to the intense competition for qualified personnel among solar, energy, and other businesses. Our industry has experienced a high rate of turnover of management personnel in recent years. If we are not able to attract, retain, and motivate necessary personnel to accomplish our business objectives, we may experience constraints that will significantly impede the successful development of any product candidates, our ability to raise additional capital, and our ability to implement our overall business strategy.

We are highly dependent on members of our management and technical staff. The loss of any of our executive officers, key employees, or consultants and our inability to find suitable replacements could potentially harm our business, financial condition, and prospects. We may be unable to attract and retain personnel on acceptable terms given the competition among solar and energy companies. Certain of our current officers, directors, and/or consultants hereafter appointed may from time to time serve as officers, directors, scientific advisors, and/or consultants of other solar and energy companies. We do not maintain “key man” insurance policies on any of our officers or employees. Other than certain members of our senior management team, all of our employees are employed “at will” and, therefore, each employee may leave our employment and join a competitor at any time.

We plan to grant stock options, restricted stock grants, restricted stock unit grants, or other forms of equity awards in the future as a method of attracting and retaining employees, motivating performance, and aligning the interests of employees with those of our shareholders. If we are unable to implement and maintain equity compensation arrangements that provide sufficient incentives, we may be unable to retain our existing employees and attract additional qualified candidates. If we are unable to retain our existing employees and attract additional qualified candidates, our business and results of operations could be adversely affected.

We may be unable to implement and maintain an attractive incentive compensation structure in order to attract and retain the right talent. These actions could lead to disruptions in our business, reduced employee morale and productivity, increased attrition, and problems with retaining existing and recruiting future employees.

The requirements of being a public company may strain our resources, divert management’s attention and affect our ability to attract and retain qualified board members and officers.

We are subject to the reporting requirements of the Exchange Act, and our shares are quoted on the OTCQB operated by the OTC Markets and are subject to various securities rules and regulations. Compliance with these rules and regulations has increased our legal and financial compliance costs, made some activities more difficult, time-consuming or costly and increased demand on our systems and resources. The Exchange Act requires, among other things, that we file annual, quarterly and current reports with respect to our business and results of operations and maintain effective disclosure controls, procedures, and internal controls over financial reporting. Maintaining our disclosure controls and procedures and internal controls over financial reporting in accordance with this standard requires significant resources and management oversight. As a result, management’s attention may be diverted from other business concerns, which could harm our business and results of operations. We will need to hire more employees in the future, which will increase our costs and expenses.

Our management has limited experience in operating a public company.

Our executive officers have limited experience in the management of a publicly traded company subject to significant regulatory oversight and reporting obligations under federal securities laws. Their limited experience in dealing with the increasingly complex laws pertaining to public companies could be a significant disadvantage in that it is likely that an increasing amount of their time may be devoted to these activities which will result in less time being devoted to our management and growth. We may not have adequate personnel with the appropriate level of knowledge, experience and training in the accounting policies, practices or internal controls over financial reporting required of public companies in the United States. It is possible that we will be required to expand our employee base and hire additional employees to support our operations as a public company, which will increase our operating costs in future periods.

Our results of operations may fluctuate from quarter to quarter, which could make our future performance difficult to predict and could cause our results of operations for a particular period to fall below expectations, resulting in a decline in the price of our Common Stock.

Our quarterly results of operations are difficult to predict and may fluctuate significantly in the future. We have experienced seasonal and quarterly fluctuations in the past and expect these fluctuations to continue. However, given that we are operating in a rapidly changing industry, those fluctuations may be masked by our recent growth rates and thus may not be readily apparent from our historical results of operations. As such, our past quarterly results of operations may not be good indicators of likely future performance. In addition to the other risks described in this “Risk Factors” section, as well as the factors discussed in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section, the following factors, among others, could cause our results of operations and key performance indicators to fluctuate:

Our actual revenue or key operating metrics in one or more future quarters may fall short of the expectations of investors and financial analysts. If that occurs, the market price of our Common Stock could decline and stockholders could lose part or all of their investment.

Adverse economic conditions may have negative consequences on our business, results of operations and financial condition.

Unpredictable and unstable changes in economic conditions, including recession, inflation, increased government intervention, or other changes, may adversely affect our general business strategy. We rely upon our ability to generate additional sources of liquidity and we may need to raise additional funds through public or private debt or equity financings in order to fund existing operations or to take advantage of opportunities, including acquisitions of complementary businesses or technologies. Any adverse change in economic conditions would have a negative impact on our business, results of operations and financial condition and on our ability to generate or raise additional capital on favorable terms, or at all.

Our ability to obtain insurance and the terms of any available insurance coverage could be materially adversely affected by international, national, state or local events or company-specific events, as well as the financial condition of insurers.

Insurance coverage may not continue to be available or may not be available at rates or on terms similar to those presently available to us. Our ability to obtain insurance and the terms of any available insurance coverage could be materially adversely affected by international, national, state or local events or company-specific events, as well as the financial condition of insurers. If insurance coverage is not available or obtainable on acceptable terms, we may be required to pay costs associated with adverse future events which could have a material adverse effect on our business, financial condition or operating results.

Our ability to be successful is dependent upon the efforts of certain key personnel. The loss of key personnel could negatively impact the operations and profitability of our business and its financial condition could suffer as a result.

Our ability to be successful is dependent upon the efforts of our key personnel. Our success depends to a significant degree upon the continued contributions of senior management, certain of whom would be difficult to replace. Departure by certain of our officers could have a material adverse effect on our business, financial condition, or operating results.

We may need to raise additional funds and these funds may not be available when needed.

We may need to raise additional capital in the future to further scale our business and expand to additional markets. We may raise additional funds through the issuance of equity, equity-related or debt securities, through tax equity partnerships, or through obtaining credit from government or financial institutions. We cannot be certain that additional funds will be available on favorable terms when required, or at all. If we cannot raise additional funds when needed, our financial condition, results of operations, business and prospects could be materially and adversely affected. If we raise funds through the issuance of debt securities or through loan arrangements, the terms of which could require significant interest payments, contain covenants that restrict our business, or other unfavorable terms. Also, changes in tax law or market conditions could negatively impact the availability of tax equity or the terms on which investors are willing to acquire tax equity and therefore reduce our access to capital on favorable terms for new solar energy projects. In addition, to the extent we raise funds through the sale of additional equity securities, our stockholders would experience dilution.

As a smaller reporting company within the meaning of the Securities Act, we will utilize certain modified disclosure requirements, and we cannot be certain if these reduced requirements will make our Common Stock less attractive to investors.

We are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of our Common Stock held by non-affiliates is greater than or equal to $250 million as of the end of that fiscal year’s second fiscal quarter, and (ii) our annual revenues are greater than or equal to $100 million during the last completed fiscal year and the market value of our Common Stock held by non- affiliates exceeds $700 million as of the end of that fiscal year’s second fiscal quarter. To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult or impossible and make our Common Stock less attractive to potential investors.

We have an ineffective system of internal control over financial reporting. If we fail to develop and maintain an effective system of internal control over financial reporting other business practices, and of board-level oversight, we may not be able to report our financial results accurately or prevent and detect fraud and other improprieties. Consequently, investors could lose confidence in our financial reporting, and this may decrease the trading price of our stock.

We must maintain effective internal controls to provide reliable financial reports and to prevent and detect fraud and other improprieties. We are responsible for reviewing and assessing our internal controls and implementing additional controls when improvement is needed. The process of designing and implementing effective internal controls is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environments and to expend significant resources to maintain a system of internal controls that is adequate to satisfy our reporting obligations as a public company. If we are unable to establish or maintain appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations on a timely basis, result in material misstatements in our consolidated financial statements and harm our results of operations.

The Sarbanes-Oxley Act requirements regarding internal control over financial reporting, and other internal controls over business practices, are costly to implement and maintain, and such costs are relatively more burdensome for smaller companies such as us than for larger companies. We have limited internal personnel to implement procedures and rely on outside professionals including accountants and attorneys to support our control procedures. We are working to improve all of our controls but, if our controls are not effective, we may not be able to report our financial results accurately or prevent and detect fraud and other improprieties, which could lead to a decrease in the market price of our stock. Failure to implement any required changes to our internal controls or other changes we identify as necessary to maintain an effective system of internal controls could harm our operating results and cause investors to lose confidence in our reported financial information. Any such loss of confidence would have a negative effect on the market price of our Common Stock.

We have identified material weaknesses in our internal control over financial reporting for which we will incur material costs and have a remediation timetable set for the end of fiscal year 2024. If we are unable to remediate these material weaknesses, or otherwise fail to maintain an effective system of internal control over financial reporting, this may result in material misstatements of our consolidated financial statements or cause us to fail to meet our periodic reporting obligations.

As a public company, we have, pursuant to Section 404(a) of the Sarbanes-Oxley Act, furnished a report by management on, among other things, the effectiveness of our internal control over financial reporting in our annual report for the year ended December 31, 2022. This assessment includes disclosure of any material weaknesses identified by our management in our internal control over financial reporting.

A material weakness is a deficiency or combination of deficiencies in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the financial statements would not be prevented or detected on a timely basis.

We have identified material weaknesses in our internal control over financial reporting that we are currently working to remediate, which relate to: (a) insufficient qualified personnel, which caused management to be unable to appropriately define responsibilities to create an effective control environment; (b) the lack of a formalized risk assessment process; and (c) selection and development of control activities, including over information technology.

Our management has concluded that these material weaknesses in our internal control over financial reporting are due to the fact that we were a private company with limited resources and did not have the necessary business processes and related internal controls formally designed and implemented coupled with the appropriate resources with the appropriate level of experience and technical expertise to oversee our business processes and controls.

Our management has developed a remediation plan which we have begun and will continue to implement. These remediation measures are ongoing and include: hiring additional accounting and financial reporting personnel and implementing additional policies, procedures and controls. The material weaknesses will be considered remediated when our management designs and implements effective controls that operate for a sufficient period of time and management has concluded, through testing, that these controls are effective. Our management will monitor the effectiveness of its remediation plans and will make changes management determines to be appropriate, however we may encounter problems or delays in completing the remediation of the material weaknesses. In connection with the material weaknesses identified in our internal control over financial reporting we determined that our internal control over financial reporting is not effective and were not effective as of December 31, 2022.

If not remediated, these material weaknesses could result in material misstatements to our annual or interim consolidated financial statements that might not be prevented or detected on a timely basis, or in delayed filing of required periodic reports. If we are unable to assert that our internal control over financial reporting is effective, or when required in the future, if our independent registered public accounting firm is unable to express an unqualified opinion as to the effectiveness of the internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our Common Stock could be adversely affected and our company could become subject to litigation or investigations by the SEC, or other regulatory authorities, which could require additional financial and management resources. Each of these material weaknesses could result in a misstatement of account balances or disclosures that would result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected.

In order to maintain and improve the effectiveness of its internal control over financial reporting, we have expended, and anticipate that we will continue to expend, significant resources, including accounting-related costs and significant management oversight. Any failure to maintain effective disclosure controls and internal control over financial reporting, and remediate identified material weaknesses could adversely affect our business and operating results and could cause a decline in the market price of our Common Stock.

The rules governing the standards that must be met for our management to assess our internal control over financial reporting are complex and require significant documentation, testing and possible remediation. Testing and maintaining internal controls may divert our management’s attention from other matters that are important to our business. Our testing, or the subsequent testing by our independent registered public accounting firm, may reveal additional deficiencies in our internal controls over financial reporting that are deemed to be material weaknesses. A material weakness in internal controls could result in our failure to detect a material misstatement of our annual or quarterly consolidated financial statements or disclosures. We may not be able to conclude on an ongoing basis that we have effective internal controls over financial reporting in accordance with Section 404. If we are unable to conclude that we have effective internal controls over financial reporting, investors could lose confidence in our reported financial information, which could have a material adverse effect on the market price of our Common Stock.

Certain estimates of market opportunity and forecasts of market growth may prove to be inaccurate.

From time to time, we make statements with estimates of the addressable market for our solutions and the clean energy market in general. Market opportunity estimates and growth forecasts, whether obtained from third-party sources or developed internally, are subject to significant uncertainty and are based on assumptions and estimates that may prove to be inaccurate. The estimates and forecasts relating to the size and expected growth of the target market, market demand and adoption, capacity to address this demand and pricing may also prove to be inaccurate. In particular, estimates regarding the current and projected market opportunity are difficult to predict. The estimated addressable market may not materialize for many years, if ever, and even if the markets meet the size estimates and growth forecasts, our business could fail to grow at similar rates.

We currently face and will continue to face competition.

We compete for customers, financing partners and incentive dollars with other clean energy providers including but not limited to utility companies, deregulated suppliers, energy services companies, project developers, OEMs, specialty finance companies and IoT data start-ups. We face increasing competition in the energy efficiency solutions industry, including competitors who could duplicate our model. Our competitors may be able to provide customers with different or greater capabilities or benefits than we can provide in areas such as technical qualifications, past contract performance, geographic presence, and driver price. Further, many of our competitors may be able to utilize substantially greater resources and economies of scale to develop competing service offerings and technologies, divert sales away from us by winning broader contracts or hire away our employees by offering more lucrative compensation packages. In the event that the market for energy efficiency solutions expands, we expect that competition will intensify as additional competitors enter the market and current competitors expand their service offerings. In order to secure contracts successfully when competing with larger, well-financed companies, we may be forced to agree to contractual terms that provide for lower aggregate payments to us over the life of the contract, or result in us assuming higher liability risks, which could adversely affect our margins. If we fail to adapt to changing market conditions and to compete successfully with new competitors, we will limit our growth and adversely affect our business, financial condition, and results of operations.

We face competition from our own customers, which may elect to finance energy efficiency or generation systems themselves by relying upon our initial analysis of customer sites.

In the process of customer pursuits, we typically perform an initial analysis of one or more customer sites in order to inform and present our proposed deployment of one or more energy efficiency or generation systems. Presenting these analyses results in a knowledge transfer to the customer, and in some cases after receiving such information, customers have elected to forego working with us, and to instead finance the development and installation of energy efficiency or generation systems themselves. Thus, given the long sales cycles for our services, there is an inherent opportunity cost risk that company resources could be tied-up for many months on a pursuit only to be disintermediated closer to consummating a transaction. This type of disintermediation is difficult to predict, however, if it happened with a high number of customer pursuits, it could limit our growth and adversely affect our business, financial condition, and results of operations.

Litigation and Regulatory Risks

Our business, financial condition, results of operations and prospects may be materially adversely affected by the extensive regulation of our business.

Our operations are subject to complex and comprehensive federal, state and other regulation. This extensive regulatory framework, portions of which are more specifically identified in the following risk factors, regulates, among other things and to varying degrees, our industry, businesses, rates and cost structures, operation and licensing of solar power facilities, construction and operation of electricity generation facilities and acquisition, disposal, depreciation and amortization of facilities and other assets, decommissioning costs and funding, service reliability, wholesale and retail competition, and trading in solar renewable energy credits (“SRECs”). In our business planning and in the management of our operations, we must address the effects of regulation on our business and any inability or failure to do so adequately could have a material adverse effect on our business, financial condition, results of operations and prospects. Our business, financial condition, results of operations and prospects could be materially adversely affected as a result of new or revised laws, regulations, interpretations or ballot or regulatory initiatives.

Our business is influenced by various legislative and regulatory initiatives, including, but not limited to, new or revised laws, including international trade laws, regulations, interpretations or ballot or regulatory initiatives regarding deregulation or restructuring of the energy industry, and regulation of environmental matters, such as environmental permitting. Changes in the nature of the regulation of our business could have a material adverse effect on our business, financial condition, results of operations and prospects. We are unable to predict future legislative or regulatory changes, initiatives or interpretations, although any such changes, initiatives or interpretations may increase costs and competitive pressures on us, which could have a material adverse effect on our business, financial condition, results of operations and prospects.

We are subject to Federal Energy Regulatory Commission (“FERC”) rules related to energy generation that are designed to facilitate competition on practically a nationwide basis by providing greater certainty, flexibility and more choices to power customers. We cannot predict the impact of changing FERC rules or the effect of changes in levels of wholesale supply and demand, which are typically driven by factors beyond our control. There can be no assurance that we will be able to respond adequately or sufficiently quickly to such rules and developments, or to any changes that reverse or restrict the competitive restructuring of the energy industry in those jurisdictions in which such restructuring has occurred. Any of these events could have a material adverse effect on our business, financial condition, results of operations and prospects.

Any reductions or modifications to, or the elimination of, governmental incentives or policies that support solar energy, including, but not limited to, tax laws, policies and incentives, renewable portfolio standards (“RPS”) or feed-in-tariffs, or the imposition of additional taxes or other assessments on solar energy, could result in, among other items, the lack of a satisfactory market for the development and/or financing of new solar energy projects, our abandoning the development of solar energy projects, a loss of our investments in solar energy projects and reduced project returns, any of which could have a material adverse effect on our business, financial condition, results of operations and prospects.

The growth and success of our business depends heavily on government incentives and policies that support the economic feasibility of developing and operating solar energy solutions in regions in which we operate or plan to develop and operate. The federal government and a majority of state governments in the U.S. provide incentives, such as tax incentives, RPS or feed-in-tariffs, that support or are designed to support the sale of energy from utility scale renewable energy facilities, such as wind and solar energy facilities. As a result of budgetary constraints, political factors or otherwise, governments from time to time may review their laws and policies that support renewable energy and consider actions that would make the laws and policies less conducive to the development and operation of renewable energy facilities. Any reductions or modifications to, or the elimination of, governmental incentives or policies that support renewable energy or the imposition of additional taxes or other assessments on renewable energy, could result in, among other items, the lack of a satisfactory market for the development and/or financing of new renewable energy projects, our abandoning the development of renewable energy projects, and reduced project returns, any of which could have a material adverse effect on our business, financial condition, results of operations and prospects.

The absence of net energy metering and related policies to offer competitive pricing to our customers in our current markets, and adverse changes to net energy metering policies, may significantly reduce demand for electricity from our solar energy systems.

Each of the states where we currently serve customers has adopted a net energy metering policy. Net energy metering typically allows our customers to interconnect their on-site solar energy systems to the utility grid and offset their utility electricity purchases by receiving a bill credit at the utility’s retail rate for energy generated by their solar energy system that is exported to the grid in excess of the electric load used by the customers. At the end of the billing period, the customer simply pays for the net energy used or receives a credit at the retail rate if more energy is produced than consumed. Utilities operating in states without a net energy metering policy may receive solar electricity that is exported to the grid when there is no simultaneous energy demand by the customer without providing retail compensation to the customer for this generation. Each of the states where we currently serve customers has adopted a net energy metering policy. In addition to net metering policies, certain of our primary markets, including Massachusetts, New Jersey and Maryland have adopted programs specifically aimed at providing renewable energy benefits to specific customers, such as community solar and low- and moderate-income customers. Many of these programs are set-up with a finite capacity of MW installed. Historically, regulators in our primary markets have continuously rolled out new incentive programs as the caps on existing programs begin to fill to promote continued investment in renewables in order to meet the goals set forth in their Renewable Portfolio Standards, however the continuous roll-out of such programs is not guaranteed.

Our ability to sell solar energy systems and the electricity they generate may be adversely impacted by the failure to expand existing limits on the amount of net energy metering in states that have implemented it, the failure to adopt a net energy metering policy where it currently is not in place, the imposition of new charges that only or disproportionately impact customers that utilize net energy metering, or reductions in the amount or value of credit that customers receive through net energy metering. If such charges are imposed, the cost savings associated with switching to solar energy may be significantly reduced and our ability to attract future customers and compete with traditional utility providers could be impacted. Our ability to sell solar energy systems and the electricity they generate also may be adversely impacted by the unavailability of expedited or simplified interconnection for grid-tied solar energy systems or any limitation on the number of customer interconnections or amount of solar energy that utilities are required to allow in their service territory or some part of the grid.

Limits on net energy metering, interconnection of solar energy systems and other operational policies in key markets could limit the number of solar energy systems installed in those markets. If the caps on net energy metering in jurisdictions are reached, and new caps are not put in place, or if the amount or value of credit that customers receive for net energy metering is significantly reduced, future customers will be unable to recognize the current cost savings associated with net energy metering. We rely substantially on net energy metering when we establish competitive pricing for our prospective customers and the absence of net energy metering for new customers would greatly limit demand for our solar energy systems.

Existing electric utility industry regulations, and changes to regulations, may present technical, regulatory and economic barriers to the purchase and use of solar energy offerings that may significantly reduce demand for our solar energy offerings.

Federal, state and local government regulations and policies concerning the electric utility industry, and internal policies and regulations promulgated by electric utilities, heavily influence the market for electricity generation products and services. These regulations and policies often relate to electricity pricing and the interconnection of customer-owned electricity generation. In the U.S., governments and utilities continuously modify these regulations and policies. These regulations and policies could deter customers from purchasing renewable energy, including solar energy systems. This could result in a significant reduction in the potential demand for our solar energy systems. For example, utilities commonly charge fees to larger, industrial customers for disconnecting from the electric grid or for having the capacity to use power from the electric grid for back-up purposes. These fees could increase our customers’ cost to use our systems and make them less desirable, thereby harming our business, prospects, financial condition and results of operations. In addition, depending on the region, electricity generated by solar energy systems competes most effectively with expensive peak-hour electricity from the electric grid, rather than the less expensive average price of electricity. Modifications to the utilities’ peak hour pricing policies or rate design, such as to a flat rate, would require us to lower the price of our solar energy systems to compete with the price of electricity from the electric grid.

In addition, any changes to government or internal utility regulations and policies that favor electric utilities could reduce our competitiveness and cause a significant reduction in demand for our products and services. For example, certain jurisdictions have proposed assessing fees on customers purchasing energy from solar energy systems or imposing a new charge that would disproportionately impact solar energy system customers who utilize net energy metering, either of which would increase the cost of energy to those customers and could reduce demand for our solar energy systems. It is possible charges could be imposed on not just future customers but our existing customers, causing a potentially significant consumer relations problem and harming our reputation and business.

Regulatory decisions that are important to us may be materially adversely affected by political, regulatory and economic factors.

The local and national political, regulatory and economic environment has had, and may in the future have, an adverse effect on regulatory decisions with negative consequences for us. These decisions may require, for example, us to cancel or delay planned development activities, to reduce or delay other planned capital expenditures or to pay for investments or otherwise incur costs that we may not be able to recover, each of which could have a material adverse effect on our business, financial condition, results of operations and prospects.

We may in the future be named in legal proceedings, become involved in regulatory inquiries or be subject to litigation, all of which are costly, distracting to our core business and could result in an unfavorable outcome or a material adverse effect on our business, financial condition, results of operations or the market price for our Common Stock.

We may in the future be involved in legal proceedings and/or receive inquiries from government and regulatory agencies from time to time. In the event that we are involved in significant disputes or are the subject of a formal action by a regulatory agency, we could be exposed to costly and time-consuming legal proceedings that could result in any number of outcomes. Although outcomes of such actions vary, any future claims or regulatory actions initiated by or against us, whether successful or not, could result in significant costs, costly damage awards or settlement amounts, injunctive relief, increased costs of business, fines or orders to change certain business practices, significant dedication of management time, diversion of significant operational resources, or otherwise harm our business, financial condition and results of operations or adversely affect the market price for our Common Stock. If we are not successful in any such legal proceedings and litigation, we may be required to pay significant monetary damages, which could hurt our results of operations. Lawsuits are time-consuming and expensive to resolve and divert management’s time and attention. Although we carry general liability insurance, our insurance may not cover potential claims or may not be adequate to indemnify us for all liability that may be imposed. We cannot predict how the courts will rule in any potential lawsuit against us. Decisions in favor of parties that bring lawsuits against us could subject us to significant liability for damages, adversely affect our results of operations and harm our reputation.

As part of our business model is to acquire complementary businesses, we may become subject to claims arising from the operations of any such acquired businesses for periods prior to the dates we acquired them.

We may be subject to claims or liabilities arising from the ownership or operation of acquired solar systems for the periods prior to our acquisition of them, including environmental, employee-related, indemnification for tax equity partnerships and other liabilities and claims not covered by insurance. These claims or liabilities could be significant. Our ability to seek indemnification from the former owners of our acquired businesses for these claims or liabilities may be limited by various factors, including the specific time, monetary or other limitations contained in the respective acquisition agreements and the financial ability of the former owners to satisfy our indemnification claims. In addition, insurance companies may be unwilling to cover claims that have arisen from acquired businesses or locations, or claims may exceed the coverage limits that our acquired businesses had in effect prior to the date of acquisition. If we are unable to successfully obtain insurance coverage of third-party claims or enforce our indemnification rights against the former owners, or if the former owners are unable to satisfy their obligations for any reason, including because of their current financial position, we could be held liable for the costs or obligations associated with such claims or liabilities, which could adversely affect our financial condition and results of operations.

Changes in laws, regulations or rules, or a failure to comply with any laws, regulations or rules, may adversely affect our business and results of operations.

We are subject to laws, regulations and rules enacted by national, regional and local governments. In particular, we are required to comply with certain SEC and other legal or regulatory requirements. Compliance with, and monitoring of, applicable laws, regulations and rules may be difficult, time consuming and costly. Those laws, regulations or rules and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our business and results of operations. In addition, a failure to comply with applicable laws, regulations or rules, as interpreted and applied, could have a material adverse effect on our business and results of operations.

Intellectual Property and Data Privacy Risks

If we are unsuccessful in developing and maintaining our proprietary technology, our ability to attract and retain independent sales partners and solar partners could be impaired, our competitive position could be harmed and our revenue could be reduced.

Our future growth depends on our ability to continue to develop and maintain our proprietary technology that supports our solar and renewable energy solutions. In addition, we rely, and expect to continue to rely, on licensing agreements with certain third parties for aerial images that allow us to efficiently and effectively analyze a customer’s rooftop for solar energy system specifications. In the event that our current or future products require features that we have not developed or licensed, or we lose the benefit of an existing license, we will be required to develop or obtain such technology through purchase, license or other arrangements. If the required technology is not available on commercially reasonable terms, or at all, we may incur additional expenses in an effort to internally develop the required technology. If we are unable to maintain our existing proprietary technology, our ability to attract and retain our independent sales partners and solar partners could be impaired, our competitive position could be harmed and our revenue could be reduced.

Our business may be harmed if we fail to properly protect our intellectual property, and we may also be required to defend against claims or indemnify others against claims that our intellectual property infringes on the intellectual property rights of third parties.

We believe that the success of our business depends in part on our proprietary technology, including our software, information, processes and know-how.

We rely on copyright, trade secret and other protections to secure our intellectual property rights. Although we may incur substantial costs in protecting our technology, we cannot be certain that we have adequately protected or will be able to adequately protect it, that our competitors will not be able to utilize our existing technology or develop similar technology independently or that foreign intellectual property laws will adequately protect our intellectual property rights. Despite our precautions, it may be possible for third parties to obtain and use our intellectual property without our consent. Unauthorized use of our intellectual property by third parties, and the expenses incurred in protecting our intellectual property rights, may adversely affect our business. In the future, some of our products could be alleged to infringe existing patents or other intellectual property of third parties, and we cannot be certain that we will prevail in any intellectual property dispute. In addition, any future litigation required to enforce our patents, to protect our trade secrets or know- how or to defend us or indemnify others against claimed infringement of the rights of third parties could harm our business, financial condition, and results of operations.

We use open source software, which may require that we release the source code of certain software subject to open source licenses or subject us to possible litigation or other actions that could adversely affect our business.

We utilize software that is licensed under so-called “open source,” “free” or other similar licenses. Open source software is made available to the general public on an “as-is” basis under the terms of a non-negotiable license. We currently combine our proprietary software with open source software but not in a manner that we believe requires the release of the source code of our proprietary software to the public. However, our use of open source software may entail greater risks than use of third-party commercial software. Open-source licensors generally do not provide support, warranties, indemnification or other contractual protections regarding infringement claims or the quality of the code. In addition, if we combine our proprietary software with open-source software in a certain manner, we could, under certain open source licenses, be required to release the source code of our proprietary software to the public. This would allow our competitors to create similar offerings with lower development effort and time.

We may also face claims alleging noncompliance with open-source license terms or infringement or misappropriation of proprietary software. These claims could result in litigation, require us to purchase a costly license or require us to devote additional research and development resources to change our software, any of which would have a negative effect on our business and results of operations. In addition, if the license terms for open-source software that we use change, we may be forced to re-engineer our solutions, incur additional costs or discontinue the use of these solutions if re-engineering cannot be accomplished on a timely basis. Although we monitor our use of open-source software to avoid subjecting our offerings to unintended conditions, few courts have interpreted open source licenses, and there is a risk that these licenses could be construed in a way that could impose unanticipated conditions or restrictions on our ability to use our proprietary software. We cannot guarantee that we have incorporated or will incorporate open-source software in our software in a manner that will not subject us to liability or in a manner that is consistent with our current policies and procedures.

If we experience a significant disruption in our information technology systems, fail to implement new systems and software successfully or if we experience cyber security incidents or have a deficiency in cybersecurity, our business could be adversely affected.

We depend on information systems to provide proprietary clean energy assessment and deployment solutions for commercial and industrial (C&I) building and property owners, process orders, process and bill customers and collect payments from our customers, respond to customer inquiries, contribute to our overall internal control processes, and record and pay amounts due vendors and other creditors. These systems may experience damage or disruption from a number of causes, including power outages, computer and telecommunication failures, computer viruses, malware, ransomware or other destructive software, internal design, manual or usage errors, cyberattacks, terrorism, workplace violence or wrongdoing, catastrophic events, natural disasters and severe weather conditions. We may also be impacted by breaches of our third-party processors.

If we were to experience a prolonged disruption in our information systems that involve interactions with customers, independent sales partners and subcontractors, it could result in the loss of sales and customers and/or increased costs, which could adversely affect our overall business operation. Although no such incidents have had a direct, material impact on us, we are unable to predict the direct or indirect impact of any future incidents to our business.

In addition, numerous and evolving cybersecurity threats, including advanced and persistent cyberattacks, phishing and social engineering schemes, particularly on internet applications, could compromise the confidentiality, availability, and integrity of data in our systems. The security measures and procedures we and our customers have in place to protect sensitive data and other information may not be successful or sufficient to counter all data breaches, cyberattacks, or system failures. Although we devote resources to our cybersecurity programs and have implemented security measures to protect our systems and data, and to prevent, detect and respond to data security incidents, there can be no assurance that our efforts will prevent these threats.

Because the techniques used to obtain unauthorized access, or to disable or degrade systems change frequently, have become increasingly more complex and sophisticated, and may be difficult to detect for periods of time, we may not anticipate these acts or respond adequately or timely. As these threats continue to evolve and increase, we may be required to devote significant additional resources in order to modify and enhance our security controls and to identify and remediate any security vulnerabilities.

Risks Related to Ownership of our Securities and Purchasing our Common Stock

There is a limited trading market for our shares and you may not be able to sell your shares if you need immediate liquidity.

Our Common Stock is traded on the OTCQB Venture Market (herein “OTC Market”), an inter-dealer automated quotation system for equity securities. According to OTC Markets, during the thirty days preceding filing of this prospectus, the average daily trading volume of our Common Stock was approximately 1,100  shares traded per day, on average, and currently is thinly traded. As of September 30, 2023, we had 1,022 record holders of our Common Stock (not including an indeterminate number of stockholders whose shares are held by brokers in “street name”). There has been limited trading activity in our stock, and when it has traded, the price has fluctuated widely. We consider our Common Stock to be “thinly traded” and any last reported sale prices may not be a true market-based valuation of the common stock. Stockholders may experience difficulty selling their shares if they choose to do so because of the illiquid market and limited public float for our Common Stock.

We are subject to the penny stock rules and these rules may adversely affect trading in our Common Stock.

Our Common Stock is a “low-priced” security under rules promulgated under the Securities Exchange Act of 1934. In accordance with these rules, broker-dealers participating in transactions in low-priced securities must first deliver a risk disclosure document which describes the risks associated with such stocks, the broker-dealer’s duties in selling the stock, the customer’s rights and remedies and certain market and other information. Furthermore, the broker-dealer must make a suitability determination approving the customer for low-priced stock transactions based on the customer’s financial situation, investment experience and objectives. Broker-dealers must also disclose these restrictions in writing to the customer, obtain specific written consent from the customer, and provide monthly account statements to the customer. The effect of these restrictions probably decreases the willingness of broker-dealers to make a market in our Common Stock, decreases liquidity of our Common Stock and increases transaction costs for sales and purchases of our Common Stock as compared to other securities.

Our officers, directors and ten percent or greater shareholders collectively own a majority of our outstanding Common Stock, and as long as they do, they will be able to control the outcome of stockholder voting.

Our officers, directors and ten percent or greater shareholders are collectively the beneficial owners of approximately 58.4% of the outstanding shares of our Common Stock as of the date of this prospectus. As long as our officers, directors and ten percent or greater shareholders collectively own a majority of our Common Stock, our other shareholders will be unable to affect or change the management or the direction of our company without the support of our officers, directors and ten percent or greater shareholders. As a result, some investors may be unwilling to purchase our Common Stock. If the demand for our Common Stock is reduced because our officers, directors and ten percent or greater shareholders control our company, the price of our Common Stock could be materially depressed. The officers, directors and ten percent or greater shareholders will be able to control the outcome of all corporate actions requiring stockholder approval, including the election of directors, amendments to our certificate of incorporation and approval of significant corporate transactions.

We have the ability to issue additional shares of our Common Stock and shares of preferred stock without asking for stockholder approval, which could cause your investment to be diluted.

Our authorized capital stock consists of 400,000,000 shares of Common Stock, of which approximately [●] remain available for issuance, including shares of Common Stock issuable upon the exercise of outstanding options and warrants, and 50,000,000 million shares of preferred stock, none of which are outstanding. Our management will continue to have broad discretion to issue shares of our Common Stock, preferred stock, warrants and options, in a range of transactions, including capital-raising transactions, mergers, acquisitions and other transactions, without obtaining stockholder approval, unless stockholder approval is required under law or, if our Common Stock is listed on NYSE, under NYSE rules, which requires stockholder approval for change of control transactions where a stockholder acquires 20% of a NYSE-listed company’s Common Stock or securities convertible into Common Stock, calculated on a post-transaction basis. If our management determines to issue shares of our Common Stock from the large pool of authorized but unissued shares for any purpose in the future and is not required to obtain stockholder approval, your ownership position would be diluted without your further ability to vote on that transaction.

By issuing preferred stock, we may be able to delay, defer or prevent a change of control.

Our Certificate of Incorporation permits us to issue, without approval from our shareholders, a total of 50,000,000 shares of preferred stock, none of which are outstanding. Our Board of Directors can determine the rights, preferences, privileges and restrictions granted to, or imposed upon, the shares of preferred stock and to fix the number of shares constituting any series and the designation of such series. It is possible that our Board of Directors, in determining the rights, preferences and privileges to be granted when the preferred stock is issued, may include provisions that have the effect of delaying, deferring or preventing a change in control, discouraging bids for our Common Stock at a premium over the market price, or that adversely affect the market price of and the voting and other rights of the holders of our Common Stock.

Our stock price is volatile.

The trading price of our Common Stock has been and continues to be subject to fluctuations. The stock price may fluctuate in response to a number of events and factors, such as quarterly variations in operating results, the operating and stock performance of other companies that investors may deem as comparable and news reports relating to trends in the marketplace, among other factors. Significant volatility in the market price of our Common Stock may arise due to factors such as:

As long as there is only a limited public market for our Common Stock, the sale of a significant number of shares of our Common Stock at any particular time could be difficult to achieve at the market prices prevailing immediately before such shares are offered and could cause a severe decline in the price of our common stock.

A significant portion of our Common Stock is restricted from immediate resale, but may be sold into the market in the future. This could cause the market price of our Common Stock to drop significantly, even if our business is doing well.

Sales of a substantial number of shares of our Common Stock in the public market or the perception that these sales might occur could depress the market price of our Common Stock and could impair our ability to raise capital through the sale of additional equity securities. We are unable to predict the effect that sales may have on the prevailing market price of our Common Stock. Sales of significant number of shares of Common Stock may make it more difficult for us to sell equity or equity-related securities in the future at a time and price that we deem reasonable or appropriate, and make it more difficult for you to sell shares of our Common Stock.

We have identified material weaknesses in our internal control over financial reporting. Failure to maintain effective internal controls could cause our investors to lose confidence in us and adversely affect the market price of our Common Stock. If our internal controls are not effective, we may not be able to accurately report our financial results or prevent fraud.

Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, requires that we maintain internal control over financial reporting that meets applicable standards. We may err in the design or operation of our controls, and all internal control systems, no matter how well designed and operated, can provide only reasonable assurance that the objectives of the control system are met. Because there are inherent limitations in all control systems, there can be no assurance that all control issues have been or will be detected.

In prior periods we identified certain material weaknesses in our internal controls. Specifically, we did not maintain effective controls over the control environment. Our weaknesses related to a lack of a sufficient number of personnel with appropriate training and experience in accounting principles generally accepted in the United States of America. Furthermore, we have not developed and effectively communicated to our employees the accounting policies and procedures necessary to maintain effective controls over the control environment. and lack staffing in accounting and finance operations.

If we are unable, or are perceived as unable, to produce reliable financial reports due to internal control deficiencies, investors could lose confidence in our reported financial information and operating results, which could result in a negative market reaction and a decrease in our stock price.

Sales of our currently issued and outstanding shares of Common Stock may become freely tradable pursuant to Rule 144 and may dilute the market for your shares and have a depressive effect on the price of the shares of our Common Stock.

Approximately [●]% of the shares of Common Stock that will be outstanding following this Offering (including shares issuable pursuant to (based on an assumed market price equal to the assumed $[●] offering price) are both (a) “restricted securities” within the meaning of Rule 144 under the Securities Act (“Rule 144”) and (b) available to be sold within three (3) months of the date of this prospectus utilizing Rule 144 as described in this risk factor. As restricted securities, these shares may be resold only pursuant to an effective registration statement or under the requirements of Rule 144 or other applicable exemptions from registration under the Securities Act and as required under applicable state securities laws. Rule 144 provides in essence that a non-affiliate who has held restricted securities for a period of at least six months may sell their shares of Common Stock.

Under Rule 144, affiliates who have held restricted securities for a period of at least six months may, under certain conditions, sell every three months, in brokerage transactions, a number of shares that does not exceed the greater of 1% of a company’s outstanding shares of Common Stock or the average weekly trading volume during the four calendar weeks prior to the sale. A sale under Rule 144 or under any other exemption from the Securities Act, if available, or pursuant to subsequent registrations of our shares of Common Stock, may have a depressive effect upon the price of our shares of Common Stock in any active market that may develop.

An active, liquid, and orderly market for our Common Stock may not develop.

Our Common Stock is expected to trade on NYSE as of the effective date of the registration statement of which this prospectus forms a part. An active trading market for our Common Stock may never develop or be sustained. If an active market for our Common Stock does not continue to develop or is not sustained, it may be difficult for investors to sell their shares of Common Stock without depressing the market price and investors may not be able to sell their securities at all. An inactive market may also impair our ability to raise capital by selling our securities and may impair our ability to acquire other businesses, applications, or technologies using our securities as consideration, which, in turn, could materially adversely affect our business and the market prices of your shares of Common Stock.

While we are seeking to list our Common Stock on NYSE, there is no assurance that such securities will be listed on NYSE.

While we are seeking to list our Common Stock on the NYSE, we cannot assure you that such securities will be accepted for listing on NYSE.

Shares of our Common Stock may continue to be subject to illiquidity because our shares may continue to be thinly traded and may never become eligible for trading on a national securities exchange.

While we have applied to have our Common Stock listed for trading on the NYSE in connection with this Offering, we cannot assure you that our application will be approved or even if approved, that we will maintain listing on NYSE or another national exchange. Our Common Stock is currently quoted on the OTCQB, which is not an exchange. Initial listing on a national securities exchange is subject to a variety of requirements, including minimum trading price and minimum public “float” requirements, and could also be affected by the general skepticism of such markets concerning companies that are the result of mergers with inactive publicly-held companies. There are also continuing eligibility requirements for companies listed on public trading markets. If we are unable to satisfy the initial or continuing eligibility requirements of any such market, then our Common Stock may not be listed or could be delisted. This could result in a lower trading price for our Common Stock and may limit your ability to sell your shares, any of which could result in you losing some or all of your investments.

The market valuation of our business may fluctuate due to factors beyond our control and the value of your investment may fluctuate correspondingly.

The market valuation of smaller reporting companies, such as us, frequently fluctuate due to factors unrelated to the past or present operating performance of such companies. Our market valuation may fluctuate significantly in response to a number of factors, many of which are beyond our control, including:

As a result, the value of your investment in us may fluctuate.

The trading price of our Common Stock could be volatile and could decline following this Offering at a time when you want to sell your holdings.

Numerous factors, many of which are beyond our control, may cause the trading price of our Common Stock to fluctuate significantly. These factors include:

Securities class action litigation is often instituted against companies following periods of volatility in their stock price. This type of litigation could result in substantial costs to us and divert our management’s attention and resources.

Moreover, securities markets may from time to time experience significant price and volume fluctuations for reasons unrelated to operating performance of particular companies, such as the uncertainty associated with the COVID-19 pandemic. These market fluctuations may adversely affect the price of our Common Stock and other interests in our Company at a time when you want to sell your interest in us.

Future sales or perceived sales of our Common Stock could depress the trading price of our Common Stock.

This prospectus covers [●] shares of Common Stock. If the holders of these securities were to attempt to sell a substantial amount of their holdings at once, the market prices of our Common Stock could decline. Moreover, the perceived risk of this potential dilution could cause stockholders to attempt to sell their securities and investors to short such securities, a practice in which an investor sells securities that he or she does not own at prevailing market prices, hoping to purchase such securities later at a lower price to cover the sale. All of these events could combine to make it very difficult for us to sell equity or equity-related securities in the future at a time and price that we deem appropriate.

Our Common Stock may be affected by limited trading volume and price fluctuations, which could adversely impact the value of our Common Stock.

Our Common Stock has experienced, and is likely to experience in the future, significant price and volume fluctuations, which could adversely affect the market prices of our Common Stock without regard to our operating performance. In addition, we believe that factors such as quarterly fluctuations in our financial results and changes in the overall economy or the condition of the financial markets could cause the market prices of our Common Stock to fluctuate substantially. These fluctuations may also cause short sellers to periodically enter the market in the belief that we will have poor results in the future. We cannot predict the actions of market participants and, therefore, can offer no assurances that the market for our Common Stock will be stable or appreciate over time.

We currently do not intend to declare dividends on our Common Stock in the foreseeable future and, as a result, your returns on your investment may depend solely on the appreciation of our Common Stock, if any.

We currently do not expect to declare any dividends on our Common Stock in the foreseeable future. Instead, we anticipate that all of our earnings in the foreseeable future will be used to provide working capital, to support our operations and to finance the growth and development of our business. Any determination to declare or pay dividends in the future will be at the discretion of our Board of Directors, subject to applicable laws and dependent upon a number of factors, including our earnings, capital requirements and overall financial conditions. In addition, terms of any future debt or preferred securities may further restrict our ability to pay dividends on our Common Stock. Accordingly, your only opportunity to achieve a return on your investment in our Common Stock may be if the market price of our Common Stock appreciates and you sell your shares at a profit. The market price for our Common Stock may never exceed, and may fall below, the price that you pay for such Common Stock. See “Dividend Policy.”

Risks Relating to this Offering and our Reverse Stock Split

Investors in this Offering will experience immediate and substantial dilution in net tangible book value.

The public offering price per share of Common Stock included in the Units or issuable upon exercise of the Pre-Funded Warrants included in the Pre-Funded Units will be substantially higher than the net tangible book value per share of our outstanding shares of Common Stock. As a result, investors in this Offering will incur immediate dilution of $[●] per share based on the assumed public offering price of $[●] per share of Common Stock. Investors in this Offering will pay a price per share that substantially exceeds the book value of our assets after subtracting our liabilities. See “Dilution” for a more complete description of how the value of your investment will be diluted upon the completion of this Offering.

Participation in this Offering by certain of our directors and their affiliates would reduce the available public float for our shares.

It is possible that one or more of our directors or their affiliates or related parties could purchase portions of Common Stock in this Offering at the public offering price and on the same terms as the other purchasers in this Offering. Any purchases by our directors or their affiliates or related parties would reduce the available public float for our shares because such stockholders would be restricted from selling the Common Stock underlying any purchased Common Stock by a lock-up agreement they have agreed to enter into with the Representative and by restrictions under applicable securities laws. As a result, any purchase of Common Stock by such stockholders in this Offering may reduce the liquidity of your shares of Common Stock relative to what it would have been had these shares of Common Stock been purchased by non-affiliated investors.

Our management will have broad discretion over the use of proceeds from this Offering and may not use the proceeds effectively.

We intend to use the net proceeds from this Offering to provide funding for the following purposes: project acquisition and finance, marketing and sales and working capital. Our management will have considerable discretion in the application of the net proceeds, and you will not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used appropriately. The net proceeds may be used for corporate purposes that do not improve our operating results or enhance the value of our securities.

The failure by our management to apply these funds effectively could harm our business. Pending their use, we may invest the net proceeds from this Offering in short-term, investment-grade, interest-bearing securities. These investments may not yield a favorable return to our stockholders. If we do not invest or apply the net proceeds from this Offering in ways that enhance stockholder value, we may fail to achieve expected financial results, which could cause our stock price to decline. See “Use of Proceeds.”

Even if the proposed reverse stock split increases the market price of our Common Stock and we meet the initial listing requirements of NYSE, there can be no assurance that we will be able to comply with the continued listing standards of NYSE, a failure of which could result in a delisting of our Common Stock.

The NYSE requires that the trading price of its listed stocks remain above $1.00 per share in order for the stock to remain listed. If a listed stock trades below $1.00 per share for more than 30 consecutive trading days, then it is subject to delisting from the NYSE. In addition, to maintain a listing on the NYSE, we must satisfy minimum financial and other continued listing requirements and standards, including those regarding director independence and independent committee requirements, minimum stockholders’ equity, and certain corporate governance requirements. If we are unable to satisfy these requirements or standards, we could be subject to delisting, which would have a negative effect on the price of our Common Stock and would impair your ability to sell or purchase your shares of our Common Stock when you wish to do so. In the event of a delisting, we would expect to take actions to restore our compliance with the listing requirements, but we can provide no assurance that any such action taken by us would allow our Common Stock to become listed again, stabilize the market price or improve the liquidity of our Common Stock, prevent our Common Stock from dropping below the minimum bid price requirement, or prevent future non-compliance with the listing requirements.

The reverse stock split may decrease the liquidity of our Common Stock.

The liquidity of the shares of our Common Stock may be affected adversely by the reverse stock split given the reduced number of shares that will be outstanding following the reverse stock split, especially if the market price of our Common Stock does not increase as a result of the reverse stock split. In addition, the reverse stock split may increase the number of stockholders who own odd lots (less than 100 shares) of our Common Stock, creating the potential for such stockholders to experience an increase in the cost of selling their shares of Common Stock and greater difficulty effecting such sales.

Following the reverse stock split, the resulting market price of our Common Stock may not attract new investors, including institutional investors, and may not satisfy the investing requirements of those investors. Consequently, the trading liquidity of our Common Stock may not improve.

Although we believe that a higher market price of our Common Stock may help generate greater or broader investor interest, there can be no assurance that the 1-for-[●] reverse stock split will result in a share price that will attract new investors, including institutional investors. In addition, there can be no assurance that the market price of our Common Stock will satisfy the investing requirements of those investors. As a result, the trading liquidity of our Common Stock may not necessarily improve.

There is no assurance that once listed on NYSE we will not continue to experience volatility in our share price.

The OTCQB, where our Common Stock is currently traded, is an inter-dealer, over-the-counter market that provides significantly less liquidity than NYSE. Our Common Stock is thinly traded due to the limited number of shares available for trading on the OTCQB, thus causing large swings in price. Our public offering price per share may vary from the market price of our Common Stock after the Offering. If an active market for our stock develops and continues, our stock price may nevertheless be volatile. As such, investors and potential investors may find it difficult to obtain accurate stock price quotations, and holders of our securities may be unable to resell their securities at or near the original offering price or at any price.

Certain recent initial public offerings of companies with public floats comparable to our anticipated public float have experienced extreme volatility that was seemingly unrelated to the underlying performance of the respective company. We may experience similar volatility, which may make it difficult for prospective investors to assess the value of its shares of Common Stock.

In addition to the risks addressed above in the preceding risk factors, our Common Stock may be subject to extreme volatility that is seemingly unrelated to the underlying performance of our business. Recently, companies with comparable public floats and initial public offering sizes have experienced instances of extreme stock price run-ups followed by rapid price declines, and such stock price volatility was seemingly unrelated to the respective company’s underlying performance. Upon the consummation of this Offering, we will have a relatively small public float due to the relatively small size of this Offering, the ownership percentage of its executive officers and directors, and greater than 5% shareholders. As a result of its small public float, our shares of Common Stock may be less liquid and have greater stock price volatility than the shares of companies with broader public ownership. The rapid and substantial price volatility, including any stock run-up, may be unrelated to our actual or expected operating performance and financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of our Common Stock. This volatility may prevent you from being able to sell your securities at or above the price you paid for your securities. In addition, you may experience losses, which may be material, if the price of our Common Stock declines after this Offering or if you purchase our Common Stock prior to any price decline.

Holders of the Warrants or the Pre-Funded Warrants will have no rights as a stockholder until they acquire our Common Stock.

Until holders of the Warrants and the Pre-Funded Warrants acquire our Common Stock upon exercise of those Warrants and those Pre-Funded Warrants, the holders will have no rights with respect to the Common Stock issuable upon exercise of those Warrants and those Pre-Funded Warrants. Upon exercise of those Warrants and those Pre-Funded Warrants, the holder will be entitled to exercise the rights of a stockholder as to the purchased shares of Common Stock only as to matters for which the record date occurs after such exercise.

The Warrants Included in the Units and the Pre-Funded Units Are Speculative in Nature.

The Warrants represent the right to acquire shares of common stock at a fixed price. Specifically, commencing on the date of issuance, holders of the Warrants may acquire the shares of common stock issuable upon exercise of such Warrants at exercise price of $[●] per share (the public offering price per Unit minus $0.125). Moreover, following this Offering, the market value of the Warrants is uncertain and there can be no assurance that the market value of the Warrants will equal or exceed the public offering price. There can be no assurance that the market price of our Common Stock will ever equal or exceed the exercise price of the Warrants, and consequently, whether it will ever be profitable for holders of Warrants to exercise the Warrants.

There is no public market for the Warrants or the Pre-Funded Warrants offered in this Offering.

There is no established public trading market for the Warrants or the Pre-Funded Warrants being offered in this Offering, and we do not expect a market to develop. In addition, we do not intend to apply to list the Warrants or the Pre-Funded Warrants on any national securities exchange or other nationally recognized trading system, including NYSE. Without an active trading market, the liquidity of the Warrants and the Pre-Funded Warrants will be limited.

Since the Warrants are executory contracts, they may have no value in a bankruptcy or reorganization proceeding.

In the event a bankruptcy or reorganization proceeding is commenced by or against us, a bankruptcy court may hold that any unexercised warrants are executory contracts that are subject to rejection by us with the approval of the bankruptcy court. As a result, holders of the Warrants may, even if we have sufficient funds, not be entitled to receive any consideration for their Warrants or may receive an amount less than they would be entitled to if they had exercised their warrants prior to the commencement of any such bankruptcy or reorganization proceeding.

Provisions of the Warrants offered pursuant to this prospectus could discourage an acquisition of us by a third-party.

Certain provisions of the Warrants offered pursuant to this prospectus could make it more difficult or expensive for a third-party to acquire us. The Warrants prohibit us from engaging in certain transactions constituting “fundamental transactions” unless, among other things, the surviving entity assumes our obligations under the Warrants. These and other provisions of the Warrants could prevent or deter a third-party from acquiring us even where the acquisition could be beneficial to you.

If we do not file and maintain a current and effective prospectus relating to the Common Stock issuable upon exercise of the Warrants, holders will only be able to exercise the Warrants on a “cashless basis.”

If we do not file and maintain a current and effective registration statement relating to the Common Stock issuable upon exercise of the Warrants at the time that holders wish to exercise such Warrants, such holders will only be able to exercise them on a “cashless basis,” provided that an exemption from registration is available. As a result, the number of shares of Common Stock that holders will receive upon exercise of the warrants will be fewer than it would have been had such holder exercised his, her or its warrants for cash. Further, if an exemption from registration is not available, holders would not be able to exercise on a cashless basis and would only be able to exercise their warrants for cash if a current and effective registration statement relating to the Common Stock issuable upon exercise of the warrants is available. If we are unable to maintain a current and effective registration statement relating to the Common Stock issuable upon exercise of the warrants, the potential “upside” of the holder’s investment in us may be reduced or the warrants may expire worthless.

The Warrants may have an adverse effect on the market price of our Common Stock and make it more difficult to effect a business combination.

To the extent we issue shares of Common Stock to effect a future business combination, the potential for the issuance of a substantial number of additional shares of Common Stock upon exercise of the Warrants could make us a less attractive acquisition vehicle in the eyes of a target business. Such Warrants, when exercised, will increase the number of issued and outstanding shares of Common Stock and reduce the value of the shares issued to complete the business combination. Accordingly, the Warrants may make it more difficult to effectuate a business combination or increase the cost of acquiring a target business. Additionally, the sale, or even the possibility of a sale, of the shares of Common Stock underlying the Warrants could have an adverse effect on the market price for our securities or on our ability to obtain future financing. If and to the extent the Warrants are exercised, you may experience dilution to your holdings.

USE OF PROCEEDS

We estimate that the net proceeds from this Offering will be approximately $[●] after deducting estimated underwriting discounts, estimated offering expenses payable by us and assuming no sale of any Pre-Funded Units offered in this Offering. If the Underwriters’ Over-Allotment Option is exercised in full, we estimate that our net proceeds will be approximately $[●]. We intend to use the net proceeds from this Offering for the following purposes:

We anticipate that the proceeds from this Offering will satisfy the Company’s cash requirements for the next 12 months.

The amounts and timing of our actual expenditures will depend on numerous factors, including the status of our product sales and marketing efforts, and the amount of cash generated through our existing strategic collaborations and any additional strategic collaborations into which we may enter.

The actual allocation of proceeds realized from this Offering will depend upon our operating revenues and cash position and our working capital requirements and may change.

Therefore, as of the date of this prospectus, we cannot specify with certainty all of the particular uses for the net proceeds to be received upon the completion of this Offering. Accordingly, we will have discretion in the application of the net proceeds, and investors will be relying on our judgment regarding the application of the proceeds of this Offering.

Pending our use of the net proceeds from this Offering, we intend to invest the net proceeds in a variety of capital preservation investments, including short-term, investment-grade, interest-bearing instruments and U.S. government securities. In addition, we intend to use the net proceeds of this Offering to provide funding for the following purposes: project acquisition and finance, sales and marketing, and working capital. However, as of the date of this prospectus, we have not identified, or engaged in any material discussions regarding, any potential project or acquisition target. We anticipate that the proceeds from this Offering will enable us to further grow the business and increase cash flows from operations.

CAPITALIZATION

The following table sets forth our consolidated cash and capitalization as of September 30, 2023. Such information is set forth on the following basis:

The pro forma information below is illustrative only and our capitalization following the completion of this Offering will be adjusted based on the actual public offering price and other terms of this Offering determined at pricing. You should read this table together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our audited and unaudited consolidated financial statements and the related notes appearing elsewhere in this prospectus.

A $1.00 increase or decrease in the assumed public offering price per Unit would increase or decrease our pro forma cash, additional paid-in capital, total stockholders’ equity (deficit) and total capitalization by approximately $[●] assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the underwriting discount and estimated offering expenses payable by us. We may also increase or decrease the number of shares of Common Stock we are offering in the Units. An increase (decrease) of 100,000 in the number of Units offered by us at the assumed public offering price of $[●] per Unit would increase (decrease) our stockholders’ equity, as adjusted, after this Offering by approximately $[●], assuming that the assumed public offering price remains the same, and after deducting the estimated underwriting discounts and commissions payable by us.

DETERMINATION OF OFFERING PRICE

The offering price of the Units will be negotiated between the Underwriter and us considering our historical performance and capital structure, prevailing market conditions, and overall assessment of our business.

MARKET FOR OUR COMMON STOCK

Our Common Stock is currently quoted on the OTCQB under the trading symbol “CIPI.” Quotations on the OTCQB reflect inter-dealer prices, without retail mark-up, mark-down commission, and may not represent actual transactions. On [●], the reported closing price of our Common Stock was $[●] per share (assuming a 1-for-[●] reverse stock split of our Common Stock).

Holders

As of September 30, 2023, there were 1,022 stockholders of record of our Common Stock. The number of stockholders of record does not include certain beneficial owners of our Common Stock whose shares are held in the names of various dealers, clearing agencies, banks, brokers and other fiduciaries.

Dividend Policy

Any determination to pay dividends will be at the discretion of our Board and will depend on our financial condition, results of operations, capital requirements and other factors that our Board deems relevant. In addition, the terms of any future debt or credit facility may preclude us from paying dividends. At this time, we do not anticipate paying any future dividends.

DILUTION

If you invest in our securities in this Offering, your ownership interest will be immediately diluted to the extent of the difference between the Offering Price per share of our Common Stock that is a part of the Unit or the Pre-Funded Unit and the pro forma as adjusted net tangible book value per share of our Common Stock immediately after this Offering.

Net tangible book value (deficit) represents the amount of our total tangible assets reduced by our total liabilities. Tangible assets equal our total assets less intangible assets. As of September 30, 2023, our actual net tangible deficit value was $[●] and our net tangible book deficit per share was $[●].

Pro forma as adjusted net tangible book value per share represents our pro forma as adjusted net tangible book value divided by the number of shares of Common Stock outstanding. After giving effect to the sale of Units that we are offering at the assumed public offering price of $[●] per Unit, assuming no sale of any Pre-Funded Units in this Offering, no exercise of any of the Warrants being offered in this Offering, and after deducting the underwriting discount and commission and estimated offering expenses, our pro forma as adjusted net tangible book value per share of Common Stock as of September 30, 2023, would have been $[●], or $[●] per share. This represents an immediate increase in pro forma as adjusted net tangible book value of $[●] per share to existing stockholders and immediate dilution of $[●] per share to new investors in the Offering.

The following table illustrates per share dilution (1):

If the Underwriter’s Over-Allotment Option is exercised in full, our adjusted pro forma net tangible book value following the Offering will be $[●] per share, and the dilution to new investors in the Offering will be $[●] per share.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our financial statements and notes thereto appearing elsewhere in this prospectus. Our financial statements are prepared and presented in accordance with generally accepted accounting principles in the United States. In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties, and assumptions. Our actual results could differ materially from those anticipated by these forward-looking statements as a result of many factors. We discuss factors that we believe could cause or contribute to these differences below and elsewhere in this prospectus, including those set forth under “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements.”

The following discussion and analysis of the results of financial condition and results of operations for the nine months ended September 30, 2023 and September 30, 2022 and the fiscal years ended December 31, 2022 and 2021 should be read in conjunction with our consolidated financial statements, and the notes to those consolidated financial statements that are included elsewhere in this prospectus.

Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors. We use words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “anticipate,” “predict,” “project,” “forecast,” “potential,” “continue,” and the negatives thereof or similar expressions to identify forward-looking statements. See “Cautionary Statement Regarding Forward-Looking Statements.”

Overview

Correlate Energy Corp. (OTCQB: CIPI), formerly Correlate Infrastructure Partners Inc., through its main operating subsidiary, Correlate Inc., offers a complete suite of proprietary clean energy assessment and fulfilment solutions for the commercial real estate industry. The Company believes scaling distributed clean energy solutions is critical in mitigating the effects of climate change. We believe that we are at the forefront in creating an industry-leading energy solution and financing platform for the commercial and industrial sector. The Company sees tremendous market opportunity in reducing site-specific energy consumption and deploying clean energy generation and energy efficiency solutions at scale.

Recently Issued Accounting Pronouncements

During the year ended December 31, 2022, and through September 30, 2023, 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 consolidated 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

Use of Estimates

The preparation of consolidated 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Revenue Recognition

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 require us to assist the client in achieving certain defined project milestones. The consulting agreements typically may be terminated by either party in connection with a breach of the agreement that has not been timely cured, or at any time by either party provided all payments required to be made to the other party have been made, including expense reimbursement and other costs incurred by the non-terminating party in connection with preparing to provide services pursuant to the agreement.  Revenues are recognized over time as the Company performs the consulting services and value is provided to the client.

The Company’s contracts for EPC services require us to a) provide engineering services, b) obtain materials, and c) install materials to agreed-upon specifications. The EPC agreement typically may be terminated by either party in connection with a breach of the agreement that has not been timely cured, or at any time by either party provided all payments required to be made to the other party have been made, including expense reimbursement and other costs incurred by the non-terminating party in connection with preparing to provide services pursuant to the EPC agreement. The Company recognizes revenues for engineering services upon client acceptance of the project at a point in time. Revenues for materials are recognized as materials are transferred and risk of loss transfers to the client at a point in time. Installation results in enhancements to customer-controlled assets and therefore installation revenues are recognized over time utilizing the input method wherein revenues are recognized based on efforts or inputs to the satisfaction of the performance obligation.

Financial Instruments

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 sheet approximates fair value.

Derivative Financial Instruments

FASB ASC Topic 820, “Fair Value Measurement” requires bifurcation of certain embedded derivative instruments, and measurement at their fair value for accounting purposes. A holder redemption feature embedded in the Company’s notes payable requires bifurcation from its host instrument and is accounted for as a freestanding derivative.

Income Taxes

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.

Share-Based Payment

All share-based payments to employees, directors and contractors, including grants of stock options, restricted shares or warrants, are recognized in the statement of operations based on their fair values at the time of grant in accordance with ASC Topic 718, “Compensation - Stock Compensation”. During the periods ended December 31, 2022 and 2021, the Company calculated the fair value of the options granted based on assumptions used in the Cox-Ross-Rubinstein binomial pricing model. The fair value of options granted is expensed as vesting occurs over the applicable service periods.

Liquidity and Capital Resources

At September 30, 2023, the Company had a cash balance of $3,218,263, as compared to a cash balance of $96,308 at December 31, 2022. The Company incurred positive cash flow from operations of $583,590 for the nine months ended September 30, 2023, as compared to negative cash flow from operations of $1,975,196 in the comparable prior year period. The increase in cash flow from operations was primarily the result of increased revenues and contract assets during the current period. Cash used in investing activities during the nine months ended September 30, 2023 totaled $465,785 and were the result of the purchase of property and equipment and intangible assets. Cash flows from financing activities during the nine months ended September 30, 2023, totaled $3,004,150 and were the result of $3,474,950 in proceeds from loan agreements and $470,800 in repayments of loan agreements. 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.

At December 31, 2022, the Company had cash of $96,308, contract assets of $684,185, and prepaid expenses and other assets of $395,953, which equal total current assets of $1,176,446. The Company incurred negative cash flows from operations of $(2,756,076) for the year ended December 31, 2022 compared to $(39,645) for the year ended December 31, 2021. The increase in negative cash flows were primarily driven by increases in payroll and related expenses as well as legal and professional fees, both of which were incurred in preparation for the Company’s planned operational expansion. The Company incurred negative cash flows from investing activities of $(4,805) during 2022, all of which related to the purchase of property and equipment, compared to cash provided from investing activities of $217,459 during 2021, all of which related to cash received in merger and acquisition. The Company had net cash provided by financing activities totaling $2,605,000 during 2022 compared to $-0- in 2021. The increase during 2022 related to $2,455,000 in proceeds from notes payable and $150,000 in proceeds from the sale of common stock.

Our ability to successfully execute our business plan is contingent upon us obtaining additional financing and/or upon realizing revenues sufficient to fund our ongoing expenses. Until we are able to sustain our ongoing operations through revenues, we intend to fund operations through debt and/or equity financing arrangements, which may be insufficient to fund our capital expenditures, working capital, or other cash requirements. There can be no assurance that such additional financing will be available to us on acceptable terms, or at all.

The Company expects to raise significant debt or equity capital in order to fund expanding operations in the near future.

Results of Operations

Comparison of the Three Months Ended September 30, 2023 and 2022

For the three months ended September 30, 2023 and 2022, the Company’s revenues totaled $930,277 and $2,312,577, respectively. The source of revenues which increased period over period was from new EPC services and consulting services performed for solar energy projects. The decrease in revenues for the three months ended September 30, 2023, is primarily driven by the timing of contracted revenue recognized for engineering, procurement and construction services (“EPC”) and consulting. We anticipate the Company’s revenues in upcoming quarters to grow as revenues are recognized from projects in progress and in the pipeline. Gross profit for the three months ended September 30, 2023, totaled $232,021 compared to $143,439 in the comparable prior year period. 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, 2023, our operating expenses decreased to $1,820,560 compared to $2,429,478 for the comparable period in 2022. The decrease of $608,918, or 25%, was primarily driven by a decrease in compensation expenses, including stock-based compensation. Compensation expenses for the three months ended September 30, 2023 included approximately $533,000 and $459,000 in salaries and wages and the non-cash expenses of stock-based compensation, respectively, compared to approximately $735,000 and $1,307,000, respectively, 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 three months ended September 30, 2023, other expenses totaled $1,795,178, compared to $300,878 in the comparable prior year period. This increase in other expenses was primarily driven by $1,611,905 and $183,273 in amortization of debt discount and interest expense, respectively, incurred during the period ended September 30, 2023 compared to $257,497 and $43,381, respectively, during the prior year period. We anticipate our other expenses to remain elevated as the Company incurs interest from debt and related financing costs to expand its operations.

The activities above resulted in net losses of $3,383,717 and $2,586,917 for the three months ended September 30, 2023 and 2022, respectively.

Comparison of the Nine Months Ended September 30, 2023 and 2022

For the nine months ended September 30, 2023 and 2022, the Company’s revenues totaled $5,139,133 and $2,617,675, respectively. The source of revenues which increased period over period was from new engineering, procurement and construction services (“EPC”) and consulting services performed for solar energy projects. The increase in revenues for the nine months ended September 30, 2023 as compared to the prior year is primarily driven from a higher volume of contracts for engineering, procurement and construction services (“EPC”) and consulting for the nine months ended September 30, 2023. We anticipate the Company’s revenues in upcoming quarters to continue to grow as revenues are recognized from projects in progress and in the pipeline. Gross profit for the nine months ended September 30, 2023, totaled $1,311,704 compared to $185,477 in the comparable prior year period. 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 nine months ended September 30, 2023, our operating expenses decreased to $4,489,070 compared to $4,647,800 for the comparable period in 2022. The decrease of $158,730, or 3%, was primarily driven by increased travel costs and compensation expenses associated with added strategic management and staff offset by a decrease in legal and professional fees and stock based compensation. Compensation expenses for the nine months ended September 30, 2023 included approximately $1,532,000 and $1,043,000 in salaries and wages and the non-cash expenses of stock-based compensation, respectively, compared to approximately $1,341,000 and $1,637,000, respectively, 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, 2023, other expenses totaled $5,186,041, compared to $799,384 in the comparable prior year period. This increase in other expenses was primarily driven by financing costs totaling $4,156,291 which were the result of derivative liabilities, and $3,700,034 in amortization of debt discount incurred during the period ended September 30, 2023 compared to $685,639 during the prior year period. The expenses during the period ended September 30, 2023 were partially offset by a $3,107,808 decrease in the fair value of derivative liabilities. We anticipate our other expenses to remain elevated as the Company incurs interest from debt and related financing costs to expand its operations.

The activities above resulted in net losses of $8,363,407 and $5,261,707 for the nine months ended September 30, 2023 and 2022, respectively.

Comparison of Years Ended December 31, 2022 and 2021

For the years ended December 31, 2022 and 2021, the Company’s revenue was $3,403,648 and $98,446, respectively. The increase of $3,305,202, or 3,357%, was driven primarily by the expansion of 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 and in the pipeline.

Gross profit for the year ended December 31, 2022, totaled $207,682 compared to a gross profit of $9,695 for the year ended December 31, 2021. The $197,987 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 year ended December 31, 2022, our operating expenses increased to $5,924,840 compared to $84,944 for 2021. The increase of $5,839,896, or 6,875%, was primarily driven by higher legal and professional fees and greater compensation expenses associated with added strategic management and staff commencing and accelerating throughout 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 year ended December 31, 2022 included approximately $1,393,000, $293,000, and $1,983,000 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 offset by added contribution margins from anticipated revenue growth.

For the year ended December 31, 2022, other expenses totaled $1,445,750, compared to $15,000 in 2021. The change in other expenses during 2022 was due to interest expenses of $198,845, amortization of debt discounts of $1,019,319, financing costs of $368,118, and a gain on the change in fair value of the derivative liability of $140,532. Comparatively, during 2021, the Company had interest expenses totaling $15,000. We anticipate our other expenses to remain elevated 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.

BUSINESS

Our Business

Correlate Energy Corp., together with its subsidiaries (collectively the “Company”, “Correlate”, “we”, “us” and “our”), is a technology-enabled vertically integrated sales, development, and fulfillment platform focused on distributed clean and resilient energy solutions in North America.

We focus on real estate assets that have a complex energy profile, but do not have the resources of time, expertise, or capital available to invest in technology and sustainable infrastructure upgrades that will improve the net operating income (NOI), resiliency of those properties. Complexities can stem from building and property owners having a large portfolio of sites in different locations, or a single location that has a variety of different business processes, operations, and equipment that require a wide skillset of expertise to continually optimize (such as achieving the ISO 50001 standard).

We provide property owners and REITs access to a multitude of energy experts and solutions via a lean software-driven process, with end-to-end engineering, finance, project management, and fulfillment services for all major facility energy improvements. Through our processes, we manage client opportunities with the correct experts, solutions, and execution resources across their entire portfolio to help our clients achieve their sustainability mandates, ensure facility uptime, and/or improve bottom line operating margins. The Company leverages on-demand and in-house experts with our internal systems and technology to turn our clients drive for a competitive edge into a comprehensive energy optimization and management program. Each custom program can significantly lower our client’s energy usage, costs, and carbon footprint, thereby improving NOI and providing our clients more flexibility to focus and invest in other areas of their businesses.

The Company is also involved in the development of microgrid infrastructure opportunities in areas that cannot be properly served by centralized electrical infrastructure. These reasons include a lack of grid capacity or transmission infrastructure, lack of funding available for new buildouts, or long lead times for electricity to be delivered by the utilities. Microgrids are emerging as a flexible approach to deploying distributed energy resources that can meet the electricity needs of existing communities and new developments without necessarily being connected to the power grid. 

Behind this platform is a team of multi-decade industry experts in renewable energy generation, efficiency technology, software development, project finance, supply chain, and construction. The Company’s team is comprised of serial entrepreneurs and innovators that have built some of the leading companies in the clean energy space, including technology-based startups and F500 divisions. Our CEO, Todd Michaels, has been in the solar industry since 2005, formerly as VP of Product Innovations at SunEdison, Senior Director - Distributed Solar at NRG Energy (NYSE: NRG), and SVP of Project Development and Marketing at Solar Power Partners (acquired by NRG Energy in 2011). Jason Loyet, our Director of Commercial Solar, has over 20 years in the cleantech industry and was a U.S. Department of Energy SunShot Catalyst award winner for his work building the Solar Site Design technology platform. Our Chief Revenue Officer, Dave Bailey, brings over 15 years of executive sales, supply chain management, and energy efficiency experience from Wesco’s Distributed Energy Resource division (formerly Westinghouse) and GE Supply. Our CFO, Johan Themaat, has held key financial positions at private, public, and startup companies, including Mission Energy, NGL Energy Partners, and RBS. As CFO of Mission Energy, he led financial strategy, back-office operations, and corporate development. As VP of M&A and Investor Relations of NGL Energy Partners (NYSE:NGL), he was instrumental in executing the acquisition strategy, forecasting, and board communications. He gained his financial experience as an investment banker, including RBS's energy investment bank. Mr. Themaat brings his proficiency in financial strategy, planning and analysis, M&A, and capital-raising transactions to the Company. Jed Freedlander, our Director of Corporate Development, has played a central role in the development of several high-profile Public-Private Partnership (P3) projects in the United States. His expertise in creating sustainable and resilient infrastructure has been instrumental in enhancing communities and driving economic growth. With a career spanning over two decades, Mr. Freedlander has garnered extensive experience in the field of infrastructure development where his roles have encompassed a wide range of responsibilities, from strategic planning to project implementation. Roger Baum, our Executive VP of Operations, has successfully sourced and implemented over $1 billion in projects where Mr. Baum’s roles have spanned the entire spectrum of turnkey project delivery, from legal structuring and financing to design and construction. Prior to joining the Company, Mr. Baum was most recently the Vice President of Public-Private Partnerships for CORE Construction, a leading billion-dollar construction management firm in the U.S.

We believe that building and property owners will choose our services for actionable, cashflow-positive/NOI improving energy programs. Furthermore, numerous states in the U.S. are setting renewable portfolio standards and goals, in addition to the critical and significant underlying carbon reduction mandates taking effect in the U.S. and beyond. Finally, with environmental, social, and governance (ESG) mandates increasingly becoming a priority for businesses, we believe that we are well-positioned to be one of the premier net-zero carbon, smart building platform sources in the United States.

Market Opportunity

Solar deployment in the U.S., relative to other energy sources, has reached a tipping point, where in 2022 solar PV is projected to account for over 50% of new generating capacity brought online according to the U.S. Energy Information Administration, Preliminary Monthly Electric Generator Inventory, yet market penetration remains below 5% according to the U.S. Energy Information Administration, 2020 Residential Energy Consumption Survey and the 2018 Commercial Energy Consumption Survey. We believe that a software-centered, asset-light development and financing business model that is focused on continuous design and process improvement will allow solar to achieve large-scale adoption.

The U.S. Energy Information Administration (EIA) estimates that there are 6 million commercial buildings in the U.S. This sector is the largest single consumer of energy in the country - using over $2 trillion of energy each year. The EIA and DOE estimate that up to 30%, or approximately $600 billion, is wasted through inefficiencies, representing 15% of greenhouse gas emissions, according to industry experts. According to the U.S. Green Building Council, as of 2022, only 100,000 buildings in the country have a Leadership in Energy and Environmental Design (LEED) certification, a global rating system that acts as a framework to guide energy efficiency, among others. While energy upgrades have real, tangible results, this reveals that a majority of buildings still lack energy programs. According to the U.S. Department of Energy (DOE), some of the primary barriers that prevent businesses from adopting energy measures include lack of funding, perceived insufficient return of investment, lack of the ability to investigate and implement projects, and lack of general knowledge and technical expertise to implement and maintain such projects. Despite the hesitancy of building and property owners to investigate and implement such projects, we believe that opportunities for improved energy efficiency, lower costs, and lower carbon emissions are enormous, and there are favorable market conditions that point towards market opportunities for us to significantly grow our business. For instance, rapid technological advancements and decreasing costs have driven renewable energy as the second-most widespread electricity source in the country. The U.S. Energy Information Administration (EIA) reports that renewable energy reached a record high of 14% of total energy consumption in 2022 (latest data available). Among renewable energy sources, solar power has become the most predominant, with solar power capacity growing from just 0.34 GW in 2008 to approximately 142.3 GW in 2022, per Solar Energy Industries Association (SEIA). When it comes to commercial building retrofits, the Rocky Mountain Institute estimates that portfolio energy optimization is a $290 billion market in the U.S., driving deep financial savings and energy efficiency across the commercial sector.

At the same time, the U.S. is powering itself with clean, renewable energy to strategically phase out carbon pollution by 2050. The U.S. government has recently outlined long-term goals to cut emissions by 50% to 52% by 2030 based on 2005 levels and accomplishing a net zero economy by 2050. States and local governments are also taking action to phase out carbon pollution. There are 38 states and the District of Columbia that have renewable portfolio standards (RPS) and in 12 of those states (plus DC), the requirement is for 100% clean energy by 2050 or earlier. More than 2,000 businesses and financial institutions have partnered with the Science Based Targets initiative (SBTi) to reduce their emissions in line with climate science; meanwhile, over 400 corporations worldwide are working with RE100, a corporate initiative of businesses committed to 100% renewable energy. With massive market demand for carbon reduction and energy optimization, we believe that our scalable offerings are well- positioned to meet these goals.

Our Solutions

Our management team understands the barriers that are prohibiting the scalable deployment of distributed energy solutions and has developed innovative processes and tools targeted at bulk real estate owners, educating them on the financial benefits of energy projects, allowing them to compare potential energy upgrade options, and facilitating the actual implementation of the retrofit measures via attractive turnkey offerings with no-money down, 100% funding options. We also provide custom solutions for energy contractors to more efficiently target potential clients and offer more compelling energy services - fully funded and easy to comprehend.

We use software to bring together energy project development, institutional project financing, and certified installers into a process that is standardized with strong quality, investment grade controls. This ‘market-making’ model allows us to optimize and keep fixed costs low which, in turn, leads to high scalability and improved pricing for consumers while preserving financial returns to project investors and lenders. We do not need to subsidize the marketplace as there are already large pools of installers who need more consistent, quality work.

Our Proprietary Customer Acquisition Tool

We use our proprietary customer acquisition processes and online project development platform to generate a regular flow of qualified energy project opportunities. Expensive customer acquisition is one of the major barriers to entry in the distributed energy industry which we believe our process addresses and helps to sustain profitability and standardization. We aggregate the project data entered by regional energy professionals and connect the projects to our approved centralized engineers and analysts to finalize the design and explore financing options for the site, thereby reducing customer development costs and increasing close rates. By leveraging a collaborative marketplace model, we are also able to provide clients with additional energy services and additional sources of revenue for the Company.

An Integrated Platform for Deploying Commercial Energy Solutions at Scale

Our platform was created by a team of clean energy pioneers. The innovative platform, tools, and business model were developed as a result of the team's average 20+ years of experience with energy customers and countless "voice of the customer" research engagements. The service was officially created after the results of a business model innovation project at SunEdison made it clear that any strategic energy plan requires end users to have the resources to create, implement, and manage an ongoing plan, regardless of the magnitude of the economic opportunity. These insights - combined with additional research efforts conducted by California investor-owned utilities for their energy efficiency business plans, from DNV GL, and other entities - informed the need for a platform to connect on-demand energy managers with end users of energy and develop a streamlined software workflow process based on the ISO 50001 framework for Strategic Energy Management (aka Energy Management System).

Our management team has conducted over 100 structured interviews with energy product/service providers to understand the challenges they are facing with the commercialization, deployment, and financing of their products and services. Our research was focused on gaining insights into six key areas: priority initiatives, success factors, perceived barriers, decision criteria, buying influencers, and resources that buyers trust. We have used the results of our research to create three target buyer profiles and have been designing and adjusting our go-to market, product, and pricing strategies around the target buyer’s specific needs. We believe that we have either significantly mitigated or removed risks for customers to highly prioritize and execute their sustainability initiatives based on direct customer feedback. Contracts, pricing, and payment programs have also been created based on this feedback.

Technology Capabilities

The Company leverages a cloud-based, energy project platform designed to streamline, accelerate, and scale retrofit projects in commercial and industrial buildings. The platform uses advanced energy retrofit simulation and algorithms to manage the entire energy retrofit cycle: origination, building energy performance assessment, project development, project financing, implementation oversight, and ongoing monitoring. This technology stack typically reduces project transaction costs and execution timeline by a factor of five, and thus, is particularly well-suited for medium-sized commercial buildings.

Our central management platform is a SaaS-based Building Relationship Manager (BRM) that connects data and solution applications for up to 90% faster energy decisions. As disparate data, products, and applications make energy-related decision-making exceedingly difficult in buildings, our platform solves that problem by bringing all data points and applications into a single platform, making building energy analysis more actionable. The platform is open and standards-based, allowing us to have digital relationships with customers, partners, and utilities throughout the U.S.

Our services have already been deployed across more than 30 major U.S. metropolitan areas. We have processed and completed project simulations and use cases on more than 250,000 buildings (representing over 15 billion sq ft of real estate) resulting in more than $11 billion in annual energy savings opportunities identified. We are leveraging our platform to catalyze energy retrofits in owner occupied buildings and those owned by REITs. Our bulk portfolio analysis is similar to a “Zillow for energy projects" in buildings through its ability to model properties with five basic inputs. We will increasingly adapt and simplify the user interface (UI), user experience (UX) and workflows to make them more compelling to non-energy expert stakeholders (such as SMBs), and breakdown the retrofit value proposition and business case in terms that resonate directly with the owners’ key business metrics, such as savings as a percent of profit margins, or improving bottom line net operating income (NOI).

Our Process

Correlate uses its complete building energy model to rapidly create a best-fit solution bundle for each of the buildings in a given territory. The Company uses a database of building data archetypes derived from the U.S. Department of Energy’s Commercial Reference Building Models. With this model, and a handful of building physical characteristics, the Company rapidly creates an initial assessment of current building energy performance. The data points - exact address, building use, square footage, number of floors, and year built - are enhanced by other data such as building codes, weather, energy prices, rebates, and grid programs.

Correlate creates solution scenarios with a business case for each and in aggregate as a bundle - efficiency, solar, storage, EV infrastructure, and other grid revenue opportunities. Appropriate financing based on the asset owners’ goals will be included to eliminate the need for upfront capital and remove performance risk.

Correlate automatically drives contract level pricing on the created building model to simulate and match each measure in its solution library to estimate the cost, energy savings, payback period, internal rate of return, carbon savings, and NOI. These measures include solar, plus upgraded HVAC systems, installation of ground or air source heat pumps, lighting upgrades, smart thermostats/controls, or real time energy management systems. The library was developed by multiple research projects and initiatives, including the DOE Building Component, the LBNL Commercial Building Energy Saver, and the Commercial Buildings Sector Agent-Based Model (CoBAM), a project of Georgia Institute of Technology and Argonne National Laboratory.

Step-by-Step Sale to Project Completion Process

The customer engagement process begins by benchmarking and prioritizing goals of our potential customer, followed by acquiring building data to analyze energy consumption to quickly identify savings (and hence, improved NOI) with intelligent machine learning. By analyzing and comparing data, numerous incentives are created through this process.

At its core, the Company uses a physics-based hourly building energy simulation model to create a “digital twin” of each building in its database. The model is used throughout the process to originate, develop, finance, and deliver retrofit projects to building owners meeting precise metrics. We provide end-to-end building energy analytics to support the development, financing, and ongoing monitoring of building energy retrofit projects. Once a lead is acquired, the following illustrates the project development workflow of our systems-based approach:

Business Model

The majority of our revenues are originated by third-party generation programs whom we select, control and direct and through in-house sales using the Company’s platform. Referral only organizations will be paid a commission for each transaction that we install and complete. Revenues are generated by our in-house and end-to-end development and fulfilment resources for engineering, procurement and construction services (“EPC”) and consulting services. 

The Company’s contracts for consulting services require us to assist the client in achieving certain defined project milestones. Revenues are recognized over time as the Company performs the consulting services and value is provided to the client.

The Company’s contracts for EPC services 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 upon client acceptance of the project at a point in time. Revenues for materials are recognized as materials are transferred and risk of loss transfers to the client at a point in time. Installation results in enhancements to customer-controlled assets and therefore installation revenues are recognized over time utilizing the input method wherein revenues are recognized based on efforts or inputs to the satisfaction of the performance obligation.

Acquisition and Growth Strategy

The Company actively seeks to acquire private companies that can complement its business model, grow pipeline, bring critical execution capabilities, and contribute to EBITDA. Potential acquisition targets will include specialized software companies that help further scale aspects of project development, financing, supply chain management, and unique regional fulfillment needs. However, as of the date of this prospectus, we have not identified, or engaged in any material discussions regarding, any potential project or acquisition target.

Value Proposition to the Building Owner

We offer a multi-value proposition to building owners, as set forth below:

Industry Performance and Outlook

Renewable energy has become the second-most prevalent electricity source in the U.S. Rapid technology advancements and decreasing costs of renewable energy resources, along with the increased competitiveness of battery storage, have made renewables one of the most competitive energy sources.

The industry has moved past the supply chain constraints, increased shipping costs, and rising commodity prices experienced during the Covid-19 pandemic (2020-2021). Furthermore, in 2022 the Inflation Reduction Act of 2022 was signed into Law, providing increased federal tax incentives for renewable energy projects.

Many cities, states, and utilities in the U.S. are setting ambitious clean energy goals, increasing renewable portfolio standards, and enacting energy storage procurement mandates. Furthermore, more than 4,500 businesses and financial institutions worldwide are working with the Science Based Targets initiative (SBTi) to reduce their emissions in line with climate science.

Renewable Energy Consumption in the U.S. 2020-2050 (U.S. Energy Information Administration)

Renewable energy growth is poised to accelerate in 2023 and beyond, as concern for climate change and support for environmental, sustainability, and governance (ESG) considerations grow, along with accelerated demand for cleaner energy sources from most market segments. At the same time, federal and state mandates are helping spur activity in the renewable sector that will likely drive further growth. By 2025, the EIA projects that approximately 15.21 quadrillion Btu of renewable energy are expected to be consumed in the U.S. And by 2050, this could reach 21.51 quadrillion Btu, almost doubling the estimated renewable energy consumed in 2020.

Solar is the Fastest Growing Generation Resource

Solar power is more affordable, accessible, and prevalent in the U.S. than ever before. From just 0.34 gigawatts (GW) in 2008, solar power capacity has grown to an estimated 142.3 (GW) today, as per the SEIA. This is enough to power the equivalent of 25 million average American homes. To add, over 3.4% of U.S. electricity comes from solar energy in the form of solar photovoltaics (PV) and concentrating solar-thermal power (CSP). Since 2014, the average cost of solar PV panels has dropped nearly 70% and markets for solar energy are maturing rapidly around the U.S. since solar electricity is now economically competitive with conventional energy sources in most states.

It is estimated that solar PV panels on just 22,000 square miles of the nation’s total land area - about the size of Lake Michigan - could supply enough electricity to power the entire country, according to a report from the National Renewable Energy Laboratory. Solar panels can also be installed on rooftops with essentially no land use impacts, and it is projected that more than 1 in 7 homes will have a rooftop solar PV system by 2030. The EIA, in a December 2021 report, said it projects the U.S. will add about 78 GW of new electricity generation capacity in 2022 through year-end 2023. The agency said 62% of that total, or about 49 GW, will come from large-scale solar power and energy storage projects. This means 2023 could well see the industry growing solar-plus-storage buildouts, exploring floating solar PV modules, and expanding community solar projects to new markets. Pairing storage with solar offers cost synergies, operational efficiencies, and the opportunity to reduce storage capital costs with the solar investment tax credit.

Moreover, the solar market is a proven incubator for job growth throughout the nation. Further data from DOE shows that solar jobs in the U.S. have increased 167% over the past decade, which is 5 times faster than the overall job growth rate in the U.S. economy. There are more than 255,000 solar workers in the U.S. in fields spanning manufacturing, installation, project development, trade, distribution, and more.

Clean Energy Goals Boost Commercial Solar Demand

EIA’s Commercial Buildings Energy Consumption Survey estimated that there were 6 million commercial buildings in the U.S. in 2018, and this sector accounts for about 76% of electricity use and 40% of all U.S. primary energy use and associated greenhouse gas (GHG) emissions. In 2019, only 69,066 buildings had a Leadership in Energy and Environmental Design (LEED) certification - one of the most commonly used green building rating systems in the world. Developed by the U.S. Green Building Council, this system acts as a framework to guide buildings when it comes to energy efficiency, among other cost-saving standards.

Further data from EIA shows that while large buildings (greater than 100,000 square feet, such as high-rise office buildings) represent just 2% of U.S. commercial buildings, they represent nearly 35% of the U.S. commercial building stock floor area, and they are more likely to have smart building technology components such as distributed energy resources. Small and medium buildings (100,000 square feet or smaller) represent nearly 98% of U.S. commercial buildings and typically lack smart building technologies. This shows that a majority of commercial buildings still lack energy projects, and therefore represent a large market opportunity for the Company. Particularly, the portfolio energy optimization market, according to Rocky Mountain Institute, is a $290 billion opportunity in the U.S.

Buildings Sector: A Snapshot

Expected Growth in Corporate Investments

Environmental, social, and governance (ESG) has emerged as a major influence on corporate policies and practices as businesses and investors are increasingly called upon to address topics such as sustainability and environmental equity, among others. As a result, many large companies are pledging to utilize renewable energy. Climate change is having a major effect on the ways businesses plan, assess risk, and deploy resources, and investors are now asking how businesses are reducing their carbon footprint. These initiatives are fueling the dramatic growth of renewable energy, especially investment in solar power. As a result, total corporate spending for solar projects, including venture capital funding and debt financing, reached $24.1 billion in 2022 according to Mercom Capital.

Furthermore, a 2022 survey completed by Net Zero Tracker found that more than a third of publicly-traded companies have net zero targets, up from only one-fifth in 2020. This trend is only expected to grow, as net-zero initiatives become more critical to an organization’s longevity. Energy cost savings, increasing energy security, and customer attraction / retention are the biggest drivers of investment.

Reasons for Investment in Smart Building Technologies (Johnson Controls Energy Efficiency Indicator Survey, 2020)

Rated as ‘extremely or very significant’ by organizations

Clean Energy Commitments and Initiatives

In 2022, more than 4,500 businesses and financial institutions (including American Express, Owens Corning, Molson Coors, BNSF Railway, etc.) are working with the Science Based Targets initiative (SBTi) to reduce their emissions in line with climate science. Additionally, 60% of Fortune 500 companies (2020) have set a climate or energy-related commitment. This represents a 12% increase from 2017. While renewable generation is an essential strategy for these companies to meet their climate and sustainability promises, energy efficiency solutions are expected to be the single largest strategy to reduce their emissions and carbon footprint, as per EIA.

Also, as of March 2022, approximately 400 corporations worldwide have joined RE100 and have made a commitment to go 100% renewable. According to RE100, if the current roster of RE100 members were a country, they would be the 21st largest electricity consumer in the world - bigger than South Africa. In December of 2021, President Biden signed an Executive Order that directed the Federal Government to use its scale and procurement power to achieve 100% carbon pollution-free electricity by 2023 with half to be locally supplied clean energy, 100% zero-emission vehicle acquisitions by 2035, net-zero emissions from Federal procurement, net-zero emissions building portfolio by 2045, and net-zero emissions from overall Federal operations by 2050 including a 65% emissions reduction by 2030.

Barriers to Renewable Energy Technologies

Renewable energy has overcome numerous barriers to become competitive with coal, natural gas, and nuclear power. Nonetheless, renewables still face major obstacles when it comes to adoption. Data from Johnson Controls shows the leading deterrents to successful smart building carbon reduction programs. In order to solve these issues, the Company’s solutions involve no money upfront (100% financing), deployment of energy managers and resources, performing detailed analytics, and continuous performance monitoring, among others. By providing a solution to these deterrents, we believe that our solutions unlock significant opportunities that exist in renewable energy.

Lack of Funding / Uncertainty in Savings Performance

The most obvious and widely publicized barrier to renewable energy is capital costs, or the upfront expense of building and installing solar farms. According to McKinsey, a holistic U.S. Energy efficiency program would yield gross energy savings worth more than $1.2 trillion, well above the $520 billion needed for upfront investment in efficiency measures. Such a program is estimated to reduce end use energy consumption by 9.1 quadrillion Btus, roughly 23% of projected demand, abating up to 1.1 gigatons of greenhouse gases annually. Like most renewables, solar is exceedingly cheap to operate - its “fuel” is free, and maintenance is minimal - so the bulk of the expense comes from building the technology.

According to the Solar Energy Industries Association (SEIA), commercial solar panel systems cost an average of $1.45 per watt as of Q3 2022. For example, a factory with a system size of 350 kW would cost around $507,500. Limited access to commercial financing has long been recognized by experts to be one of the major barriers to implementing energy efficiency projects. Competing for financing with other core business investment projects, energy efficiency projects often rank low on the priority lists of high-level private sector managers or investors. Higher construction costs also make financial institutions more likely to perceive renewables as risky, lending money at higher rates, and making it harder for utilities or developers to justify the investment. Funding can be difficult to secure and as a result can deter building owners, however, the Company has the ability to provide financing options for 100% of the project costs with no out-of-pocket cost to building owners leveraging experience from the solar industry where power purchase agreements (PPAs) have helped drive the rapid adoption of commercial solar since 2005.

Reasons Smart Building Carbon Reduction Programs Fail (Johnson Controls Energy Efficiency Indicator Survey, 2020)

Perceived Insufficient Payback / ROI

A common barrier in the utility sector is the perception that energy efficiency actions will reduce a company’s revenue. Businesses also face uncertainty about how long it will take to pay back their energy investments. While true in some cases, energy efficiency programs can help electricity companies better manage peak demand and also defer the need for investing in new power infrastructure, and thus can be very profitable for electricity companies. The Company’s solutions also provide recommendations such as short, medium, and long-term pay back with ROI scenarios to make it extremely transparent and easy for our clients to understand and analyze the benefits of our product offerings and programs.

Lack of Technical Expertise to Evaluate or Execute

Since renewable energy technology is comparatively new and not optimally developed, there is a lack of knowledge about operation and maintenance. Efficiency cannot be achieved if a system is not optimally operated and if maintenance is not carried out regularly. We quickly identify and analyze energy savings potential, helping building owners determine current building performance, benchmarking, and retrofit plans.

Lack of Awareness

Approximately 11% of respondents to the Johnson Controls survey pointed to a general lack of awareness of the importance, benefits, and potential of renewable energy both among the general public and major stakeholders, thus constraining rapid adoption. There is often a lack of awareness of the cost of solar systems in particular, and many operators assume they are cost prohibitive without understanding ROI benefits.

Expanding Government Energy Policies

A combination of federal incentives, state policies, and market conditions have accelerated increases in renewable electricity generation, and is expected to drive demand for the Company’s services. For example, the U.S. has recently set long-term goals to reach net zero emissions by 2050. As part of this initiative, the U.S. will not only move to 100% clean energy, but will also prioritize clean fuels like hydrogen and biofuels where needed, cut energy waste, reduce methane and non-carbon emissions, and scale up carbon removal. Additionally, the current administration plans to cut emissions from 50% to 52% by 2030 based on 2005 levels, achieving total carbon free power by 2035 and achieving a net zero economy by 2050.

Building Energy Codes Program

Some commercial and/or residential construction codes mandate certain energy performance requirements for the design, materials, and equipment used in new construction and renovation. The DOE’s Building Energy Codes Program, for instance, aims to improve building energy efficiency, and to help states achieve maximum savings. This program assesses the savings impacts of model energy codes, calculating energy, cost, and carbon savings, and coordinates with key stakeholders to improve model energy codes, including architects, engineers, builders, code officials, and a variety of other energy professionals.

According to the U.S. government, energy codes for residential and commercial buildings are projected to save $138 billion in energy costs, 900 MMT of avoided Co2 emissions, and 13.5 Btus of primary energy (cumulative 2010-2040). These savings equate to the annual emissions of 195 million passenger vehicles, 227 coal power plants, and 108 million homes.

States’ Renewable Portfolio Standards and Goals

As of the end of 2021, 31 states and the District of Columbia had established renewable portfolio standards (RPS) or renewable goals, and in 12 of those states (and the District of Columbia), the requirement is for 100% clean electricity by 2050 or earlier. Designed to increase the use of renewable energy sources for electricity generation, state RPS programs vary widely in terms of program structure, enforcement mechanisms, size, and application. According to EIA, states have generally met their interim RPS targets in recent years, with only a few exceptions reflecting unique, state-specific policy designs. Roughly half of all growth in U.S. renewable electricity generation and capacity since 2000 is associated with state RPS requirements. Nationally, the role of RPS policies represented about 23% of all U.S. renewable electricity capacity additions in 2019. Within particular regions - especially the Northeast - RPS policies continue to serve a central role in motivating growth in renewable electricity generation.

California’s RPS Milestones - In California, the state’s ambitious RPS was established in 2002 and requires that by 2020, at least 33% of all electricity flowing into households and commercial buildings should be sourced from renewable energy. According to the Natural Resources Defense Council (NRDC), billion-dollar renewable energy investments in the state has created more than 100,000 jobs as early as 2015. In 2021, Los Angeles Times reported that the state hit nearly 95% of its renewable energy goals - supplying power to over 6.4 million homes and reducing harmful carbon emissions by over 21 million metric tons annually. The program is growing so fast in part because of the measurable economic benefits. Through the end of 2020, participants collectively saved nearly $1.2 billion. These efforts are widely supported by Californians. 83% of California residents support setting a target for the state to generate 50% of its electricity from renewable resources.

A number of factors helped create an environment favorable for RPS compliance, including RPS-qualified generation projects that take advantage of federal incentives; reductions in the cost of renewable technologies; complementary state and local policies that either reduce costs or increase revenue streams associated with RPS-eligible technologies. States have adopted a number of other policies to support greater investment in the adoption of renewable energy, including Public Benefits Funds for Renewable Energy, Output-Based Environmental Regulations, Interconnection Standards, Net Metering, Feed-In Tariffs, and programs by the U.S. EPA.

The Future is Renewable

The Solar Market Insight Report ranks the top states across the country based on the total amount of solar electric capacity installed and in operation as of the end of the first quarter of 2021. To put into context, SEIA figures also include the equivalent number of homes that can be powered by that solar capacity in the individual state. Here are the current leaders for solar power in the U.S.:

Top Solar Energy States (Solar Market Insight Report, 2021)

While California has dominated the U.S. solar market, other markets are continuing to expand rapidly and are emerging solar hotbeds. For instance, some smaller Northeastern states, like Massachusetts and New Jersey, are emerging solar states. The above leaderboard shows that it is not just about land space and the natural sunshine; the policies and economics driving these installations are just as impactful.

We believe that as the price of solar continues to fall, new state entrants will grab an increasingly larger share of the national market. In order to illustrate this opportunity, the table below shows the states that have adopted official zero-GHG or 100% renewable energy goals for their power sector or whole economy.

100% Clean Energy States