Bimergen Energy Corp 10-K

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This management discussion and analysis (“MD&A”) of the financial condition and results of operations of Bitech Technologies Corporation (the “Company,” “Bitech Technologies,” “our” or “we”) is for the years ended December 31, 2023 and 2022. It is supplemental to, and should be read in conjunction with, our financial statements for the period January 8, 2021 (inception) through December 31, 2023 and the accompanying notes for such period included in our Current Report on Form 8-K filed with the Securities and Exchange Commission, or SEC, on April 4, 2022. Our financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Financial information presented in this MD&A is presented in United States dollars (“$” or “US$”), unless otherwise indicated. 16 The information about us provided in this MD&A, including information incorporated by reference, may contain “forward-looking statements” and certain “forward-looking information” as defined under applicable United States securities laws. All statements, other than statements of historical fact, made by us that address activities, events or developments that we expect or anticipate will or may occur in the future are forward-looking statements, including, but not limited to, statements preceded by, followed by or that include words such as “may”, “will”, “would”, “could”, “should”, “believes”, “estimates”, “projects”, “potential”, “expects”, “plans”, “intends”, “anticipates”, “targeted”, “continues”, “forecasts”, “designed”, “goal”, or the negative of those words or other similar or comparable words and includes, among others, information regarding: our future business activities; our ability to generate revenues; our need for substantial additional financing to operate our current and future business and difficulties we may face acquiring additional financing on terms acceptable to us or at all; risks related to competition; risks related to our lack of internal controls over financial reporting and their effectiveness; increased costs we are subject to as a result of being a public company in the United States; and other events or conditions that may occur in the future. Forward-looking statements may relate to future financial conditions, results of operations, plans, objectives, performance or business developments. These statements speak only as at the date they are made and are based on information currently available and on the then current expectations of the party making the statement and assumptions concerning future events, which are subject to a number of known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from that which was expressed or implied by such forward-looking statements. Although we believe that the expectations and assumptions on which such forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements, because no assurance can be given that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks discussed above. Consequently, all forward-looking statements made in this MD&A and other documents, as applicable, are qualified by such cautionary statements, and there can be no assurance that the anticipated results or developments will actually be realized or, even if realized, that they will have the expected consequences to or effects on us. The cautionary statements contained or referred to in this section should be considered in connection with any subsequent written or oral forward-looking statements that we and/or persons acting on its behalf may issue. We do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, other than as required under securities legislation. Overview of the Business We have refocused our business development plans as we seek to position ourselves as a global technology solution enabler dedicated to providing a suite of green energy solutions with plans to develop Battery Energy Storage System (BESS) projects, commercial and residential renewable energy solutions, enterprise utility services, public service engagements, and other renewable energy initiatives. We plan to pursue these innovative energy technologies through research and development, technology integration, planned acquisitions of other early stage green energy development projects and plans to become a grid-balancing operator using BESS solutions and applying new green technologies as a technology enabler in the green energy sector. Our team has identified two highly competitive battery energy storage suppliers who have expressed interest in establishing partnerships with us, as we seek to integrate their products into projects that we identify, including grid-balancing BESS projects we plan to pursue following the Business Combination with Bridgelink discussed below. In addition, we are seeking business partnerships with defensible technology innovators and renewable energy providers to facilitate investments, provide new market entries toward emerging-growth regions and implement innovative, scalable energy system solutions with technological focuses on smart grid, Home Energy Management System (HEMS), Building Energy Management System (BEMS), City Energy Management System (CEMS), energy storage, and EV infrastructure. In December 2023, we received an initial purchase order from a strategic customer to implement a BEMS Virtual Power Plant (VPP) Program designed to save electricity for approximately 4,000 multi-dwelling units (MDUs). Our customer is working with PJM, a Regional Transmission Organization (RTO) that coordinates the movement of wholesale electricity in the District of Columbia in the U.S. and all or parts of 13 states including Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia. We have commenced providing services pursuant to this purchase order and we expect to complete our work during [__]. 17 We are also developing a suite of services and bundled products we call the Bitech Smart Energy Technology Solutions. Our planned solutions are expected to integrate a variety of Energy Management Systems (X-EMS) that allow for efficient management of energy usage, Energy Storage Systems (ESS) for storing excess energy and Smart Power Systems (SPS) that regulate the flow of energy in homes and commercial buildings. We also offer Power Control Conversion solutions that are designed to optimize the utilization of renewable energy sources. With our planned portfolio of integrated solutions, we believe that individuals and businesses will be capable of reducing their carbon footprint while also enjoying significant cost savings on their energy bills. With combined experience in the power industry ranging from EMS, energy storage, Industrial IoT and system integration, we plan to leverage this expertise to develop a three-pronged Green Energy Technology Enabler Business model to effectively cater to the rapidly growing demand for sustainable energy solutions. We plan to execute a “Dual Growth Business Model” as discussed in Part I, Item 1. Business which includes an in-house technology innovation implementing system integration approach enhanced with our plans to carry out technology merger and acquisitions for specific green energy applications, and (2) revenue growth by executing planned BESS operations following our planned Business Combination with Bridgelink discussed below, additional potential joint ventures and/or partnerships with operating partners to collect operating and joint venture revenues from BESS operations. As described in our Dual Growth Business Model, we aim to grow by strategically acquiring intellectual property (IP) assets. In light of these practical initiatives and other reasons noted below, we have, however, elected to discontinue our efforts to commercialize the electric power generation and charging system (the “Tesdison Technology”) we formerly licensed from SuperGreen Energy Corporation (“SuperGreen”) pursuant to the Patent & Technology Exclusive and Non-Exclusive License Agreement dated January 15, 2021, as amended, entered into between SuperGreen and the Company’s wholly owned subsidiary Bitech Mining Corporation (“Bitech Mining”) (the “SuperGreen License”) . In addition, we paused the further development of Intellisys-8, our planned chipset and related software due to the unfavorable market conditions within the cryptocurrency market in 2023. Our business expansion plans will require a significant amount of additional capital. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources” and involve a significant number of future business, financial, operational and regulatory risks. See “Note About Forward-Looking Statements.” Recent Transactions As previously disclosed in the Company’s Current Report on Form 8-K filed with the SEC on January 12, 2024, on January 8, 2024, the Company, Bridgelink Development, LLC, a Delaware limited liability company (“Bridgelink”), a solar and energy storage development company based in Fort Worth, Texas and C & C Johnson Holdings LLC, the sole member of Bridgelink (the “Member”) entered into a Letter Agreement (the “Letter Agreement”) for a business combination (the “Business Combination”). See “Part I, Item 1. Business – Recent Transactions.” Completion of the Business Combination is contingent upon the parties entering into a definitive agreement which will contain certain conditions to close, including a commitment for a capital investment or other financing transaction of not less than $50,000,000 (the “Capital Infusion”) prior to closing. In addition, the definitive agreement is expected to include additional covenants, representations and warranties that are customary of business combination agreements of this type. Acquisition of Bitech Mining Corporation The Company acquired Bitech Mining Corporation (“Bitech Mining”) on March 31, 2022 (the “Closing Date”) through a share exchange pursuant to a Share Exchange Agreement (the “Share Exchange Agreement”) by and among the Company, Bitech Mining, each of Bitech Mining’s shareholders (each, a “Seller” and collectively, the “Sellers”), and Benjamin Tran, solely in his capacity as Sellers’ Representative (“Sellers’ Representative”). The transaction contemplated by the Share Exchange Agreement is hereinafter referred to as the “Share Exchange”). Pursuant to the Share Exchange Agreement the Company acquired from the Sellers, an aggregate of 94,312,250 shares of Bitech Mining’s Common Stock representing 100% of the issued and outstanding shares of Bitech Mining (collectively, the “Bitech Mining Shares”). In consideration of the Bitech Mining Shares, the Company issued to the Sellers an aggregate of 9,000,000 shares of the Company’s newly authorized Series A Convertible Preferred Stock, par value $0.001 per share (the “Series A Preferred Stock”). Each Bitech Mining Share was entitled to receive 0.09543 shares of Series A Preferred Stock. Each share of Series A Preferred Stock automatically converted into 53.975685 shares (an aggregate of approximately 485,781,300) of the Company’s Common Stock upon filing of an amendment to its Certificate of Incorporation increasing the number of the Company’s authorized common stock so that there were a sufficient number of shares of Common Stock authorized but unissued to permit a full conversion of all the Series A Preferred Stock. Effective as of June 27, 2022, the Series A Preferred Stock automatically converted into 485,781,168 shares of Common Stock following the June 27, 2022 filing of an amendment to the Company’s Certificate of Incorporation increasing the number of the Company’s authorized common stock to 1,000,000,000 shares. Upon conversion of the Series A Preferred Stock, the Sellers held, in the aggregate, approximately 96% of the issued and outstanding shares of Company capital stock on a fully diluted basis. 18 The Share Exchange was treated as a recapitalization and reverse acquisition for financial reporting purposes, and Bitech Mining was considered the acquirer for accounting purposes. Disposition of Quad Video Assets On June 30, 2022 (the “Effective Date”), we completed the sale of all of the assets of our wholly owned subsidiary Quad Video Halo, Inc. (“Quad Video”) pursuant to the terms of an Asset Purchase Agreement entered into among Quad Video, Quad Video Holdings Corporation (“Quad Holdings”) and Peter Dalrymple, a former officer, director and substantial shareholder of the Company (“Dalrymple,” together with Quad Holdings, collectively, the “Buyers”) dated as of the Effective Date (the “Quad Video APA”). Pursuant to the terms of the Quad Video APA, Quad Video sold all of its assets to Quad Holdings which included its accounts receivables, fixed assets, intangible assets and all customer lists associated with Quad Video’s business (the “Quad Video Assets”). Prior to March 31, 2022, we were engaged in the business of owning, developing and leasing the Quad Video Halo video recording system (“QVH”) used to record medical procedures including the collection of accounts receivables related to previously provided spine injury diagnostic services (collectively, the “QVH Business”). On June 30, 2022, we sold the assets related to the QVH Business. Comparison of the years ended December 31, 2023 and 2022. We have generated minimal revenues for the year ended December 31, 2023 and no revenues from its primary business for the year ended December 31, 2022. The Company generated $7,000 of other income for the year ended December 31, 2023 not related to it’s primary business. We invoiced and collected $26,197 from our QVH legacy business and recorded other income of $50,275 generated from accounts receivable previously written-off as uncollectible for the year ended December 31, 2022. During the year ended December 31, 2023, we incurred $819,001 of general and administrative expenses compared to $888,106 for the same period in 2022. General and administrative expenses have decreased during 2023 compared to 2022 as the Company moves from development stage to revenue generation and keeps overhead lean. As a result of the foregoing, we had net loss of ($811,693) for the year ended December 31, 2023, compared to a net loss of ($811,635) for the year ended December 31, 2022. Working Capital The calculation of Working Capital provides additional information and is not defined under GAAP. We define Working Capital as current assets less current liabilities. This measure should not be considered in isolation or as a substitute for any standardized measure under GAAP. This information is intended to provide investors with information about our liquidity. Other companies in our industry may calculate this measure differently than we do, limiting its usefulness as a comparative measure. Liquidity and Capital Resources As of December 31, 2023 and December 31, 2022, we had total current liabilities of $35,229 and $11,397, respectively, and current assets of $163,417 and $210,723, respectively, to meet our current obligations. As of December 31, 2023, we had working capital of $128,188, a decrease of working capital of $71,138 as compared to December 31, 2022, driven primarily by cash used in operations. For the year ended December 31, 2023, cash used in operations was ($457,806) which primarily included the net loss of ($811,693) partially offset by $147,455 related to the issuance of common stock for services and $180,600 related to a stock option issued as compensation. 19 We have a history of operating losses. We have not yet achieved profitable operations and expect to incur further losses. We have funded our operations primarily from equity financing. As of December 31, 2023, cash generated from financing activities was not sufficient to fund our growth strategy in the short-term or long-term. The primary need for liquidity is to fund working capital requirements of the business, including operational expenses in connection with our efforts to become a provider of a suite of green energy solutions and to fund the development projects we expect to pursue following completion of the Business Combination with Bridgelink. The primary source of liquidity has primarily been private financing transactions. The ability to fund operations and pursue these opportunities and projects within the green energy industry depends on our ability to raise funds from debt and/or equity financing which is subject to prevailing economic conditions and financial, business and other factors, some of which are beyond our control. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. Off-Balance Sheet Arrangements As of the date of this Annual Report on Form 10-K, we do not have any off-balance-sheet arrangements that have, or are reasonably likely to have, a current or future effect on our results of operations or financial condition, including, and without limitation, such considerations as liquidity and capital resources. Changes in or Adoption of Accounting Practices There were no material changes in or adoption of new accounting practices during the year ended December 31, 2023. Critical Accounting Policies See Note 2 of the accompanying notes to unaudited condensed consolidated financial statements, which note is incorporated herein by reference. Income Tax Expense (Benefit) We have not made a provision for income taxes in 2023 or 2022, which reflects our valuation allowance established against our benefits from net operating loss carryforwards. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not Applicable.