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 three months ended March 31, 2022 and
2021 and for period January 21, 2022 (inception) through December 31, 2021. It
is supplemental to, and should be read in conjunction with, our condensed
consolidated financial statements for the three months ended March 31, 2022 and
2021 and our financial statements for the period January 21, 2021 (inception)
through December 31, 2021 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.
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 and Canadian 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 ability to become profitable
and generate cash in our operating activities; our need for substantial
additional financing to operate our business and difficulties we may face
acquiring additional financing on terms acceptable to us or at all; our
significant indebtedness and significant restrictions on our operations; our
ability to develop and manufacture each of the components of our planned
Evirontek Integrated Platform; the impact of global climate change on our
ability to conduct future operations; our dependence on key inputs, suppliers
and skilled labor for the production of each of the components of the Evirontek
Integrated Platform; our ability to attract and retain key personnel;
growth-related risks, including capacity constraints and pressure on our
internal systems and controls; risk related to the protection of our
intellectual property and our exposure to infringement or misappropriation
claims by third parties; 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,
including, but not limited to, risks and uncertainties described in "Risk
Factors."
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. These include, but are not
limited to the risks described in "Risk Factors."
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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 are a development-stage technology company dedicated to providing a suite of
green energy solutions which we call the Evirontek Integrated Platform with a
focus on cryptocurrency mining, data centers, commercial and residential
utility, electric vehicle, and other renewable energy initiatives. We seek to
offer our Evirontek Integrated Platform to resolve the exorbitantly high cost of
electricity in crypto mining and related industries. Our initial core technology
is Tesdison; a revolutionary U.S. patented self-charging dual-battery system
technology providing increased efficiency in power generation. We plan to seek
business partnerships with renewable energy providers for various applications
and engage with value-added resellers to facilitate and implement our scalable
and modular system solution.
There is an urgency in the global needs of today's ever-changing energy
landscape in the world of cryptocurrency mining where power saving is the most
challenging issue for this business. Our goal is to change the future of the
cryptocurrency mining businesses by providing our patented revolutionary green
technology power-saving solution that has been designed to be safe, reliable,
cost effective, and easily scalable.
We plan to initially market the Evirontek Integrated Platform to the
cryptocurrency mining industry to reduce the exorbitant high cost of
electricity. The Evirontek Integrated Platform, once fully developed, will be
comprised of (1) a patented high efficiency electric power generation and
charging system which we license and call the "Tesdison Technology", (2) a
chipset and related software component we plan to develop which we call the
"Bitech Intellisys-8 Chipset Solution" or "Intellisys-8", (3) Battery Energy
Storage Systems (BESS) technology solution for power grid efficiency, and (4)
other complementary clean energy technologies that we plan to acquire. Combined,
we refer to these technologies as the Evirontek Integrated Platform.
To respond to the current increasing demand in energy efficiency solutions while
expanding our potential revenue options, we also plan to (1) become a Resource
Entity (RE) operating our own state-of-the-art Battery Energy Storage Systems
(BESS) solution in order to re-optimize the power capacity and balance the grid
with intelligent time peak shifting control, and (2) penetrate into the solar
power plant market and partner with or acquire outdated, mid-field solar power
plants in the U.S., especially in California and Texas, and implement a BESS
solution to increase energy efficiency and monetize time peak shifting
implementation with targeted power plants ranging from 20MW to 500MW. Our
planned containerized BESS solution is expected to provide a high level of
user-friendly and seamless integration, intelligent monitoring ability with
multimode authorization for dynamic connection, ultimate safety features, and
flexible application via modular design, while enhancing robustness for
interference from external factors in the field.
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The Company acquired Bitech Mining Corporation, a Wyoming 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"). The Share Exchange Agreement provides that the Company will
acquire from the Sellers, an aggregate of 94,312,250 shares of Bitech Mining's
Common Stock, par value $0.001 per share, 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 shall be entitled to receive 0.09543 shares of
Series A Preferred Stock. Each share of Series A Preferred Stock shall
automatically convert into 53.975685 shares (an aggregate of approximately
485,781,300) of the Company's Common Stock (the "Company 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 are a sufficient number
of shares of Company Common Stock authorized but unissued to permit a full
conversion of all the Series A Preferred Stock. Upon conversion of the Series A
Preferred Stock, the Sellers will hold, in the aggregate, approximately 96% of
the issued and outstanding shares of Company capital stock on a fully diluted
basis.
The Share Exchange was treated as a recapitalization and reverse acquisition for
financial reporting purposes, and Bitech Mining is considered the acquirer for
accounting purposes. As a result of the Share Exchange and the change in our
business and operations, a discussion of the past financial results of our
predecessor, Spine Injury Solutions Inc., is not pertinent, and under applicable
accounting principles, the historical financial results of Bitech Mining, the
accounting acquirer, prior to the Share Exchange are considered our historical
financial results.
The following agreements were entered into in connection with the acquisition of
Bitech Mining:
Management Services Agreement
On the Closing Date, the Company, Quad and Peter L. Dalrymple ("Dalrymple"), a
former director of the Company, entered into a Management Services Agreement
(the "MSA") whereby Dalrymple agreed to act as the general manager of the video
recording operations of Quad and collect certain accounts receivable of the
Company (the "Services"). In exchange for providing the Services, the Company
agreed to pay Dalrymple a fee equal to the net revenues derived from these
operations after payment of all operating expenses related to such operations.
The term of the MSA commences on the Closing Date and continues until the
earlier to occur of the following: (i) 90 days after the Closing Date; (ii) the
Company and Dalrymple's mutual written consent; or (iii) any material breach of
the MSA by either party, provided that the breaching party has been provided
written notice of such breach and has failed to cure such breach within ten (10)
days of receipt of such written notice.
Amendment to the Note
On the Closing Date, the Company, Quad and Dalrymple, entered into an Amendment
to the Secured Promissory Note (the "Note Amendment") whereby Dalrymple agreed
that (i) the principal and accrued interest outstanding under the Secured
Promissory Note dated August 31, 2020 as amended on October 29, 2021 issued by
the Company in favor of Dalrymple (collectively, the "Note") is $95,000 as of
the Closing Date, (ii) the date on which the outstanding principal and accrued
interest is due is 90 days after the Closing Date, (iii) any obligations of (x)
the Company that become due and owing to Bitech Mining or the Sellers under
Section 4.07(c) of the Share Exchange Agreement or (y) that become due and owing
under Section 6.12 of the MSA may be offset against any amounts owed by the
Company or Quad under the Note and (iv) all claims or causes of action (whether
in contract or in tort, in law or in equity) that may be based upon, arise out
of or relate to the Note, or the negotiation, execution or performance of the
Note (including any representation or warranty made in or in connection with the
Note or as an inducement to enter into the Note or this Amendment), may be made
only against Quad, and SPIN who is not a party to the Note as of the Closing
Date, including without limitation any past, present or future director,
officer, employee, incorporator, member, manager, partner, equity holder,
affiliate, agent, attorney or representative of SPIN ("SPIN Parties"), shall
have no liability (whether in contract or in tort, in law or in equity, or based
upon any theory that seeks to impose liability of the SPIN Parties) for any
obligations or liabilities arising under, in connection with or related to the
Note or for any claim based on, in respect of, or by reason of the Note or its
negotiation or execution, and Dalrymple waives and releases all such
liabilities, claims and obligations against any such SPIN Parties.
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Amendment to the Security Agreement
On the Closing Date, the Company, Quad and Dalrymple, entered into an Amendment
to Security Agreement (the "Security Agreement Amendment") whereby the parties
to that agreement agreed that (i) Quad shall be included with the Company as an
additional debtor for all purposes in the Security Agreement entered into
between the Company and Dalrymple dated August 31, 2020 (the "Security
Agreement"), (ii) Quad's collateral obligations under the Security Agreement
shall only relate to its accounts receivable, and the collateral described
relating to "Pledged Securities" as defined in the Security Agreement shall not
apply to Quad's obligations under the Security Agreement, (iii) the Company's
pledge of its accounts receivables as provided for in the Security Agreement
will be limited solely to the Company's accounts receivables in existence as of
March 27, 2022 at 11:59 P.M. ET, and shall not apply to any after acquired
accounts receivables and (iv) the Company is authorized to file an amended
financing statement to reflect the terms of Security Agreement Amendment and
Quad shall promptly file a financing statement reflecting the terms set for in
such amendment.
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").
Additionally, the COVID-19 pandemic has made it difficult for us to collect our
accounts receivable, as attorney and medical offices are closed resulting in
delayed settlements and medical procedures being canceled, which affects our
lease revenue. We are uncertain how this pandemic will affect our ability to
collect in the future or its overall effect on our lease revenue.
Comparison of the three month period ended March 31, 2022 with the three month
period ended March 31, 2021.
The Company has not generated any revenues from its primary business for the
three months ended March 31, 2022 and March 31, 2021.
During the three months ended March 31, 2022, we incurred $229,162 of general
and administrative expenses compared to $17,131 for the same period in 2021.
General and administrative expenses have increased during 2022 compared to 2021
as the Company moves from development stage to revenue generation.
As a result of the foregoing, we had net loss of ($229,162) for the three months
ended March 31, 2022, compared to a net loss of ($17,131) for the three months
ended March 31, 2021.
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 March 31, 2022 and December 31, 2021, we had total current liabilities of
$491,834 and $11,106, respectively, and current assets of $1,168,653 and
$976,947, respectively, to meet our current obligations. As of March 31, 2022,
we had working capital of $676,810, a decrease of working capital of $289,031 as
compared to December 31, 2021, driven primarily by cash used in operations.
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For the three months ended March 31, 2022, cash used in operations was
($145,686) which primarily included the net loss of ($229,162) partially offset
by an increase of accounts payable and accrued liabilities of $85,747.
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 March 31, 2022, cash generated from
financing activities was not sufficient to fund the full development of the
components of the Evirontek Integrated Platform, in particular, 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, develop and commercialize the Evirontek Integrated Platform and the
capital expenditures associated with that project. The primary source of
liquidity has primarily been private financing transactions. The ability to fund
operations, to make planned capital expenditures, to execute on the development
and commercialization of the Evirontek Integrated Platform 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 Quarterly Report on Form 10-Q/A (Amendment No. 2), 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.
Transactions with Related Parties
Up until March 31, 2022, the Company maintained its executive offices at 5151
Mitchelldale A2, Houston, Texas 77092. This office space encompasses
approximately 200 square feet and was provided to us at the rental rate of
$1,000 per month under a month-to-month agreement with Northshore Orthopedics,
Assoc. ("NSO"), a company owned by William Donovan, M.D., our former director
and Chief Executive Officer. The rent included the use of the telephone system,
computer server, and copy machines. We discontinued paying rent in December 2021
due to a lack of funds, and since then NSO has provided the Company this office
space rent free.
Also, see discussion above regarding the MSA, the Note, the Note Amendment, the
Security Agreement and the Security Agreement Amendment.
Changes in or Adoption of Accounting Practices
There were no material changes in or adoption of new accounting practices during
the three months ended March 31, 2022.
Critical Accounting Policies
See Note 2 of the accompanying notes to unaudited condensed consolidated
financial statements, which note is incorporated herein by reference.
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