The following discussion and analysis of our results of operations and financial
condition should be read in conjunction with our financial statements and
related notes appearing elsewhere in this report. This discussion and analysis
contains forward looking statements that involve risks, uncertainties and
assumptions. The actual results may differ materially from those anticipated in
these forwarding looking statements as a result of certain factors, including
but not limited to, those which are not within our control.
Overview
Correlate Infrastructure Partners Inc. (OTCQB: CIPI), formerly Triccar Inc.,
together with its subsidiaries (collectively the "Company", "Correlate", "we",
"us" and "our"), is a technology-enabled clean energy optimization provider that
offers a complete suite of proprietary clean energy assessment and deployment
solutions for commercial and industrial (C&I) building and property owners in
the United States. Through our true tech-enabled project development and
financing platform, we provide portfolio energy optimization and clean energy
solutions for sustainable profit growth in buildings nationwide and bring
project financing where needed.
We were originally formed as a Texas corporation in 1995 under the name TBX
Resources, Inc. In December 2011 we changed our name to Frontier Oilfield
Services Inc. In January 2020, we merged with and into Triccar Inc., a Nevada
corporation and Triccar Inc. was the surviving entity. In December 2021, we
acquired one hundred percent of the equity interests of each of Correlate Inc.
and Loyal Enterprises LLC. In February 2022, a majority of our stockholders
approved an amendment to our articles of incorporation and the change of our
corporate name from Triccar Inc. to Correlate Infrastructure Partners Inc., to
better reflect our future growth and focus. On April 5, 2022, we filed an
amendment to our articles of incorporation with the State of Nevada to change
our corporate name from Triccar Inc. to Correlate Infrastructure Partners Inc.
Our principal executive offices are located at 220 Travis Street, Suite 501,
Shreveport, Louisiana 71101, and our telephone number is (855) 264-4060.
Recently Issued Accounting Pronouncements
During the six months ended June 30, 2022, and through August 12, 2022, there
were several new accounting pronouncements issued by the Financial Accounting
Standards Board ("FASB"). Each of these pronouncements, as applicable, has been
or will be adopted by the Company. Management does not believe the adoption of
any of these accounting pronouncements has had or will have a material impact on
the Company's financial statements.
All other new accounting pronouncements issued but not yet effective or adopted
have been deemed not to be relevant to us, hence are not expected to have any
impact once adopted.
Summary of Significant Accounting Policies
There have been no changes from the Summary of Significant Accounting Policies
described in our Annual Report on Form 10-K filed with the Securities and
Exchange Commission on April 14, 2022.
Liquidity and Capital Resources
At June 30, 2022, the Company had a cash balance of $414,940, as compared to a
cash balance of $252,189 at December 31, 2021. The Company incurred negative
cash flow from operations of $1,337,249 for the six months ended June 30, 2022,
as compared to negative cash flow from operations of $42,961 in the prior year.
The increase in negative cash flow from operations was primarily the result of
increased compensation costs for additional employees beginning during the
current period, added legal and professional fees primarily related to the
Company's growth, acquisition and capital raising plans, inventory purchases and
prepaid expenses. Cash flows from financing activities during the six months
ended June 30, 2022, totaled $1,500,000 and were the result of proceeds from a
loan agreement (see Footnote 4) and $150,000 from the issuance of our common
stock. 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.
Loan Agreement
On January 11, 2022, the Company entered into a 10% note agreement with P&C
Ventures, Inc. in the amount of $1,485,000, pursuant to which we received
proceeds of $1,350,000. The note requires quarterly interest payments with the
principal due at maturity on January 11, 2023.
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Results of Operations
Comparison of the Three Months Ended June 30, 2022 and 2021
For the three months ended June 30, 2022 and 2021, the Company's revenues
totaled $236,690 and $1,584, respectively. The increase of $235,106, or 14,843%,
was driven by the Company increasing operations during the current period
coupled with the negative impacts of the COVID pandemic during the prior period.
We anticipate the Company's revenues in upcoming quarters to increase as
revenues are recognized on projects in progress, including the $1,114,000 in
customer deposits, and as we begin projects in our current pipeline.
Gross profit for the three months ended June 30, 2022, totaled $42,744 compared
to a gross profit of $729 in the comparable prior year period. The $42,015
increase in gross profit was due to the Company's increased operations and its
growth plans. We anticipate future gross margins to increase from the current
level as we commercialize new project sales opportunities, increase revenues,
cover more fixed costs within cost of sales and expand our margins.
For the three months ended June 30, 2022, our operating expenses increased to
$1,444,794 compared to $4,937 for the comparable period in 2021. The increase of
$1,439,857, or 29,165%, was primarily driven by higher legal and professional
fees and greater compensation expenses associated with added strategic
management and staff commencing during the period ended June 30, 2022. The
increased legal and professional fees were incurred primarily in connection with
the Company's acquisition and capital raising programs. Compensation expenses
for the three months ended June 30, 2022 included approximately $327,000 and
$179,000 in salaries and wages and the non-cash expenses from stock-based
compensation, respectively, compared to no similar expenses in the comparable
period in 2021. Additionally, the Company incurred non-cash operating expenses
from depreciation and amortization and shares issued for services totaling
$15,160 and $500,000, respectively, for the three months ended June 30, 2022
compared to no similar non-cash operating expenses during the three months ended
June 30, 2021. 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 June 30, 2022, Other Expenses totaled $299,280,
compared to $-0- in the comparable period in 2021. This increase in Other
Expenses was due to $37,623 in added interest expense and $261,657 in
amortization of debt discount incurred during 2022. We anticipate our Other
Expenses to increase as the Company incurs interest from debt and related
financing costs to expand its operations.
The activities above resulted in a net loss of $1,701,330 for the three months
ended June 30, 2022.
Comparison of the Six Months Ended June 30, 2022 and 2021
For the six months ended June 30, 2022 and 2021, the Company's revenues totaled
$305,098 and $9,235, respectively. The increase of $295,863, or 3,204%, was
driven by the Company increasing operations during the current period coupled
with the negative impacts of the COVID pandemic during the prior period. We
anticipate the Company's revenues in upcoming quarters to increase as revenues
are recognized on projects in progress, including the $1,114,000 in customer
deposits, and as we begin projects in our current pipeline.
Gross profit for the six months ended June 30, 2022, totaled $42,038 compared to
a gross profit of $5,519 in the comparable prior year period. The $36,519
increase in gross profit was due to the Company's increased operations and its
growth plans. We anticipate future gross margins to increase from the current
level as we commercialize new project sales opportunities, increase revenues,
cover more fixed costs within cost of sales and expand our margins.
For the six months ended June 30, 2022, our operating expenses increased to
$2,218,322 compared to $13,234 for the comparable period in 2021. The increase
of $2,205,088, or 16,662%, was primarily driven by higher legal and professional
fees and greater compensation expenses associated with added strategic
management and staff commencing during the six months ended June 30, 2022. The
increased legal and professional fees were incurred primarily in connection with
the Company's acquisition and capital raising programs. Compensation expenses
for the six months ended June 30, 2022 included approximately $606,000 and
$330,000 in salaries and wages and the non-cash expenses of stock-based
compensation, respectively, compared to no similar expenses in the comparable
period in 2021. Additionally, the Company incurred non-cash operating expenses
from depreciation and amortization and shares issued for services totaling
$30,320 and $500,000, respectively, for the six months ended June 30, 2022
compared to no similar non-cash operating expenses during the six months ended
June 30, 2021. 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 six months ended June 30, 2022, Other Expenses totaled $498,506,
compared to $-0- in the comparable period in 2021. This increase in Other
Expenses was due to $70,364 in added interest expense and $428,142 in
amortization of debt discount incurred during 2022. We anticipate our Other
Expenses to increase as the Company incurs interest from debt and related
financing costs to expand its operations.
The activities above resulted in a net loss of $2,674,790 for the six months
ended June 30, 2022.
Off Balance Sheet Arrangements
We do not have any off-balance sheet arrangements.
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