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, 2022 and 2021.
It is supplemental to, and should be read in conjunction with, our financial
statements for the period January 8, 2021 (inception) through December 31, 2022
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. 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.
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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
Currently, 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 industry focus on green data
centers, commercial and residential utility, EV infrastructure, and other
renewable energy initiatives. We have been developing and evaluating the
commercial viability of our Evirontek™ Integrated Platform to resolve the
exorbitantly high cost of electricity in several industries. We plan to pursue
these innovative energy technologies through research and development, planned
acquisitions of other green energy technologies and plans to become a
grid-balancing operator using Battery Energy Storage System (BESS) solutions and
applying new green technologies in power plants as a technology enabler in the
green energy sector. While participating in the clean energy economy, 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 or manufacture these innovative,
scalable energy system solutions with technological focuses on smart grids,
Building Energy Management System (BEMS), energy storage, and EV infrastructure.
To accelerate growth of a planned intellectual property (IP) portfolio through
acquisition strategies, we plan to execute our Smart Acquisition Model with
selected acquisitions of defensible technologies accompanied with visionary
management teams who can demonstrate a common goal with us in order to unlock
the full potential with capital infusion, accelerate growth. To achieve our
development plans, we plan to incubate those acquired companies toward
foreseeable plans for mergers and acquisitions, formation of global joint
ventures, while facilitating new market entry to today's fastest growing
Southeast Asia region. With this acquisition model, we expect to build a
valuable technology portfolio of IP assets in various innovative green energy
technologies, leveraging our network of global capital partners with low-cost
manufacturing capacity and oversea outsourcing technical talents from our niche
sources in Vietnam.
Further, we plan to execute a Dual Growth Business Model as depicted in the
diagram below encompassing (1) IP portfolio growth which includes technology
licensing or technology acquisitions, enhanced with our plans to carry out
research and development for specific applications, and (2) sustainable revenue
growth by executing planned BESS acquisitions via joint ventures with capital
partners to collect joint venture income from BESS operations or Vietnam-based
manufacturing partners which can manufacture products derived from our
technology solutions.
In light of these initiatives and other reasons noted below, the Company has,
however, elected to discontinue its efforts to commercialize the electric power
generation and charging system (the "Tesdison Technology") it licensed from
SuperGreen pursuant to the SuperGreen License. The Company has determined that
the Tesdison Technology was not functional nor was it capable of being developed
into a commercially viable product as had been represented to the Company by
SuperGreen, its founder Calvin Cao, and his brother Michael Cao, leading up to
Bitech Mining entering into the SuperGreen License. In addition, the Company
will temporarily pause the further development of Intellisys-8, the Company's
planned chipset and related software that had been designed to reduce power
consumption and heat in computer systems and accelerate their computational
speed due to the currently unfavorable market conditions within the
cryptocurrency market.
The Company acquired Bitech Mining on March 31, 2022 pursuant to a Share
Exchange Agreement. Pursuant to the Share Exchange Agreement we acquired an
aggregate of 94,312,250 shares of Bitech Mining's Common Stock representing 100%
of the issued and outstanding shares of Bitech Mining in exchange for an
aggregate of 9,000,000 shares of the Company's newly authorized Series A
Convertible 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 (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 were a sufficient number
of shares of Company 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
Company Common Stock following the June 27, 2022 filing of an amendment to its
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.
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:
Agreements involving Peter L. Dalrymple. On March 31, 2022, the Company, Quad
and Peter L. Dalrymple ("Dalrymple"), a former director of the Company, entered
into the MSA, Note Amendment and Security Agreement Amendment. See "Item 1 -
Business - Acquisition of Bitech Mining Corporation."
Disposition of Quad Video Assets. On June 30, 2022, we completed the sale of the
Quad Video Assets pursuant to the terms of the Quad Video APA and the sale of
certain accounts receivables related to our former spine pain management
business pursuant to the terms of the SPIN Accounts Receivable APA. See "Item 1
- Business - Disposition of 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.
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Historically, the Company acquired Bitech Mining Corporation, a Wyoming
corporation ("Bitech Mining") on
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Comparison of the years ended December 31, 2022 and 2021.
The Company has not generated any revenues from its primary business for the
year ended December 31, 2022. We invoiced and collected $26,197 from 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.
There was no revenue for the year ended December 31, 2021.
During the year ended December 31, 2022, we incurred $888,106 of general and
administrative expenses compared to $284,959 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 ($811,635) for the year ended
December 31, 2022, compared to a net loss of ($284,959) for the year ended
December 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 December 31, 2022 and December 31, 2021, we had total current liabilities
of $11,397 and $11,106, respectively, and current assets of $210,723 and
$976,947, respectively, to meet our current obligations. As of December 31,
2022, we had working capital of $199,326, a decrease of working capital of
$766,515 as compared to December 31, 2021, driven primarily by cash used in
operations.
For the year ended December 31, 2022, cash used in operations was ($789,344)
which primarily included the net loss of ($811,635) partially offset by a
$35,000 full amortization of exclusive license agreement.
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, 2022, 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. The primary source of liquidity has primarily been private financing
transactions. The ability to fund operations and pursue opportunities 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, 2022.
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 2022 or 2021, which reflects
our valuation allowance established against our benefits from net operating loss
carryforwards.
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