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
contain 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 tech-enabled development, finance, and fulfillment
platform for distributed energy solutions across North America. Our integrated
solutions include solar, cogeneration, energy storage, electric vehicle
infrastructure, and intelligent efficiency retrofits for community-scale
applications. We reduce costs, improve comfort, and increase energy reliability
for home, work, and commerce while eliminating the adoption barriers to net zero
carbon goals.
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 nine months ended September 30, 2022, and through November 10, 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 September 30, 2022, the Company had a cash balance of $348,688, as compared
to a cash balance of $252,189 at December 31, 2021. The Company incurred
negative cash flow from operations of $1,975,196 for the nine months ended
September 30, 2022, as compared to negative cash flow from operations of $43,744
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 nine months ended September 30, 2022, totaled $2,080,000 and were the
result of $1,930,000 in proceeds from loan agreements (see Footnote 4) and
$150,000 from the issuance of our common stock (see Footnote 5). 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.
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Results of Operations
Comparison of the Three Months Ended September 30, 2022 and 2021
For the three months ended September 30, 2022 and 2021, the Company's revenues
totaled $2,312,577 and $15,291, respectively. The increase of $2,297,286, or
15,024%, 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 continue to
increase as revenues are recognized from projects in progress.
Gross profit for the three months ended September 30, 2022, totaled $143,439
compared to a gross profit of $1,921 in the comparable prior year period. The
$141,518 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 and cover more fixed costs within cost
of sales and expand our margins.
For the three months ended September 30, 2022, our operating expenses increased
to $2,429,478 compared to $2,907 for the comparable period in 2021. The increase
of $2,426,571, or 83,473%, 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 September 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 September 30, 2022 included approximately $363,000,
$372,000, and $1,307,000 in salaries and wages, bonuses, and the non-cash
expenses of stock-based compensation, respectively, compared to $-0- in the
prior period. Of the stock-based compensation, approximately $1,123,000 was from
options issued to the Company's directors. 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, 2022, other expenses totaled $300,878,
compared to $-0- in the comparable period in 2021. This increase in other
expenses was due to $43,381 in added interest expense and $257,497 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 $2,586,917 for the three months
ended September 30, 2022.
Comparison of the Nine Months Ended September 30, 2022 and 2021
For the nine months ended September 30, 2022 and 2021, the Company's revenues
totaled $2,617,675 and $24,526, respectively. The increase of $2,593,149, or
10,573%, 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 continue to
increase as revenues are recognized on projects in progress.
Gross profit for the nine months ended September 30, 2022, totaled $185,477
compared to a gross profit of $7,440 in the comparable prior year period. The
$178,037 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 nine months ended September 30, 2022, our operating expenses increased
to $4,647,800 compared to $16,141 for the comparable period in 2021. The
increase of $4,631,659, or 28,695%, 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 September 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 nine months ended September 30, 2022 included
approximately $969,000, $372,000, and $1,637,000 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 partially offset by added
contribution margins from anticipated revenue growth.
For the nine months ended September 30, 2022, other expenses totaled $799,384,
compared to $-0- in the comparable period in 2021. This increase in other
expenses was due to $685,639 in amortization of debt discounts and $113,745 in
added interest expense 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.
Off Balance Sheet Arrangements
We do not have any off-balance sheet arrangements.
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