10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023 OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File No. 000-55825

CORRELATE INFRASTRUCTURE PARTNERS INC.

(Exact name of registrant as specified in its charter)

Nevada	84-4250492
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
220 Travis Street, Suite 501 Shreveport, Louisiana	71101
(Address of Principal Executive Offices)	(Zip Code)

(855)-264-4060

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated Filer	☐	Smaller reporting company	☒
Accelerated Filer	☐	Emerging growth company	☐
Non-accelerated Filer	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. The number of shares of Common Stock, par value $0.0001 per share, outstanding as of May 15, 2023 was 35,350,571.

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None	N/A	N/A

CORRELATE INFRASTRUCTURE PARTNERS INC.

Index

	Pg. No.
PART I — Financial Information
Item 1. Financial Statements	3
Condensed Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022 (Unaudited)	3
Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2023 and 2022 (Unaudited)	4
Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the Three Months Ended March 31, 2023 and 2022 (Unaudited)	5
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2023 and 2022 (Unaudited)	6
Notes to Condensed Consolidated Financial Statements	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3. Quantitative and Qualitative Disclosures about Market Risk	18
Item 4. Controls and Procedures	18
PART II — Other Information
Item 1. Legal Proceedings	19
Item 1A. Risk Factors	19
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	19
Item 3. Defaults Upon Senior Securities	19
Item 4. Mine Safety Disclosures	19
Item 5. Other Information	19
Item 6. Exhibits	20
SIGNATURES	21

2

PART 1 — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CORRELATE INFRASTRUCTURE PARTNERS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

MARCH 31, 2023 AND DECEMBER 31, 2022

(Unaudited)

	March 31,			December 31,
	2023			2022
Assets
Current assets
Cash	$	741,405		$	96,308
Contract assets		342,649			684,185
Prepaid expenses and other current assets		564,783			395,953
Total current assets		1,648,837			1,176,446
Property and equipment
Property and equipment, net		3,604			4,004
Total property and equipment		3,604			4,004
Other assets
Intangible assets - customer relationships, net		175,350			187,040
Intangible assets - developed technology, net		10,400			13,870
Intangible assets - development rights, net		102,796			112,744
Goodwill		762,851			762,851
Total other assets		1,051,397			1,076,505
Total assets	$	2,703,838		$	2,256,955
Liabilities and Stockholders' Equity (Deficit)
Current liabilities
Accounts payable	$	1,049,872		$	1,069,743
Accrued expenses		963,579			1,285,898
Shareholder advances		96,519			96,519
Line of credit		30,000			30,000
Notes payable, current portion, net of discount		932,664			1,513,546
Convertible notes payable, current portion, net of discount		126,888			-
Derivative liability		5,357,570			722,328
Total current liabilities		8,557,092			4,718,034
Notes payable, net of current portion and discount		31,251			344,595
Total liabilities		8,588,343			5,062,629
Commitments and contingencies (Note 3)
Stockholders' equity (deficit)
Preferred stock $0.0001 par value; authorized 50,000,000 shares with -0- issued and outstanding at March 31, 2023 and December 31, 2022, respectively		-			-
Common stock $0.0001 par value; authorized 400,000,000 shares with 35,350,571 and 35,323,626 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively		3,535			3,532
Additional paid-in capital		5,790,739			5,459,220
Accumulated deficit		(11,678,779	)		(8,268,426	)
Total stockholders' equity (deficit)		(5,884,505	)		(2,805,674	)
Total liabilities and stockholders' equity (deficit)	$	2,703,838		$	2,256,955

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

CORRELATE INFRASTRUCTURE PARTNERS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022

(Unaudited)

	For the three months ended
	March 31,
	2023			2022
Revenues	$	50,734		$	68,408
Cost of revenues		45,859			69,114
Gross profit (loss)		4,875			(706	)
Operating expenses
General and administrative		1,023,930			546,234
Insurance		2,230			1,171
Legal and professional		120,225			182,008
Travel		36,255			28,955
Depreciation and amortization		25,508			15,160
Total operating expenses		1,208,148			773,528
Loss from operations		(1,203,273	)		(774,234	)
Other income (expense)
Interest expense		(97,353	)		(32,741	)
Amortization of debt discount		(788,282	)		(166,485	)
Financing costs		(3,808,565	)		-
Change in fair value of derivative liability		2,487,120			-
Total other income (expense)		(2,207,080	)		(199,226	)
Net loss	$	(3,410,353	)	$	(973,460	)
Loss per share	$	(0.10	)	$	(0.03	)
Weighted average shares outstanding - basic		35,332,384			35,159,920

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

CORRELATE INFRASTRUCTURE PARTNERS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022

(Unaudited)

	Class A Common Stock				Class B Common Stock				Common Stock				Additional Paid in		Accumulated
	Shares		Amount		Shares		Amount		Shares		Amount		Capital		Deficit			Total
Balances, December 31, 2021		34,639,920	$	3,464		-	$	-		-	$	-	$	1,534,474	$	(1,105,518	)	$	432,420
Issuance of warrants in connection with debt		-		-		-		-		-		-		799,128		-			799,128
Stock-based compensation		-		-		-		-		-		-		150,504		-			150,504
Issuance of shares for cash		600,000		60		-		-		-		-		149,940		-			150,000
Net loss		-		-		-		-		-		-		-		(973,460	)		(973,460	)
Balances, March 31, 2022		35,239,920	$	3,524		-	$	-		-	$	-	$	2,634,046	$	(2,078,978	)	$	558,592
Balances, December 31, 2022		-	$	-		-	$	-		35,323,626	$	3,532	$	5,459,220	$	(8,268,426	)	$	(2,805,674	)
Issuance of shares for services		-		-		-		-		17,045		2		14,998		-			15,000
Issuance of shares for financing costs		-		-		-		-		4,245		-		4,500		-			4,500
Issuance of shares for the payment of accrued interest		-		-		-		-		5,655		1		7,588		-			7,589
Stock based compensation		-		-		-		-		-		-		253,851		-			253,851
Settlement of derivative liability		-		-		-		-		-		-		50,582		-			50,582
Net loss		-		-		-		-		-		-		-		(3,410,353	)		(3,410,353	)
Balances, March 31, 2023		-	$	-		-	$	-		35,350,571	$	3,535	$	5,790,739	$	(11,678,779	)	$	(5,884,505	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

CORRELATE INFRASTRUCTURE PARTNERS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022

(Unaudited)

	For the three months ended
	March 31,
	2023			2022
Operating activities
Net loss	$	(3,410,353	)	$	(973,460	)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization		25,508			15,160
Amortization of debt discount		788,282			166,485
Stock issued for services		15,000			-
Stock-based compensation		253,851			150,504
Financing costs		3,808,565			-
Change in fair value of derivative liability		(2,487,120	)		-
Changes in operating assets and liabilities:
Accounts receivable		-			(51,180	)
Contract assets		341,536			-
Prepaid expenses and other current assets		(168,830	)		(11,000	)
Accounts payable		(19,871	)		(75,080	)
Accrued expenses		(235,801	)		46,919
Net cash used in operating activities		(1,089,233	)		(731,652	)
Investing activities
Net cash provided by investing activities		-			-
Financing activities
Proceeds from issuance of notes payable		-			1,350,000
Proceeds from issuance of convertible notes payable		1,804,950			-
Repayment of notes payable		(70,620	)		-
Proceeds from issuance of common stock		-			150,000
Net cash provided by financing activities		1,734,330			1,500,000
Net increase in cash	$	645,097		$	768,348
Cash – beginning of period		96,308			252,189
Cash – end of period	$	741,405		$	1,020,537
Cash paid for income taxes	$	-		$	-
Cash paid for interest	$	70,274		$	-
Supplemental schedule of non-cash investing and financing activities
Discount on note payable from issuance of warrants	$	-		$	799,128
Discount on notes payable from derivative liability	$	1,563,929		$	-
Discount on convertible notes payable from derivative liability	$	1,804,950		$	-
Shares issued for settlement of accrued interest	$	7,589		$	-
Accrued interest settled through note payable	$	78,929		$	-
Settlement of derivative liability	$	50,582		$	-

The accompanying notes are an integral part of these condensed consolidated financial statements.

6

CORRELATE INFRASTRUCTURE PARTNERS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – NATURE OF THE ORGANIZATION AND BUSINESS

Nature of the Business

The accompanying condensed consolidated financial statements include the accounts of the Company, and its subsidiaries Correlate, Inc. (“Correlate”), a Delaware corporation, and Loyal Enterprises LLC dba Solar Site Design (“Loyal”), a Tennessee limited liability company.

Correlate is a portfolio-scale development and finance platform offering commercial and industrial facilities access to clean electrification solutions focused on locally-sited solar, energy storage, EV infrastructure, and intelligent efficiency measures. Its unique data-driven approach is powered by proprietary analytics and concierge subscription services.

Loyal provided consulting services on acquisitions and project development tools to customers in the commercial solar industry. Effective November 2022, all of Loyal’s assets and operations were transferred to Correlate and Loyal was dissolved.

Going Concern

The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Company has incurred losses since inception and has not generated positive cash flows from operations. These matters, among others, raise substantial doubt about the Company's ability to continue as a going concern.

The Company’s ability to continue in existence is dependent on its ability to develop additional sources of capital, and/or achieve profitable operations and positive cash flows. Management’s plans with respect to operations include aggressive marketing, acquisitions, and raising additional capital through sales of equity or debt securities as may be necessary to pursue its business plans and sustain operations until such time as the Company can achieve profitability. Management believes that aggressive marketing combined with acquisitions and additional financing as necessary will result in improved operations and cash flow in 2023 and beyond. However, there can be no assurance that management will be successful in obtaining additional funding or in attaining profitable operations. The accompanying condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the interim reporting rules of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s latest Annual Report filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments (unless otherwise indicated), necessary for a fair presentation of the financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant inter-company transactions and balances have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

7

CORRELATE INFRASTRUCTURE PARTNERS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments and other short-term investments with maturity of three months or less, when purchased, to be cash equivalents. There were no cash equivalents as of March 31, 2023 and December 31, 2022.

The Company maintains its cash balances at financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”). The FDIC provides coverage of up to $250,000 per depositor, per financial institution, for the aggregate total of depositors’ interest and non-interest-bearing accounts. At March 31, 2023, approximately $280,000 of the Company’s cash balances were in excess of FDIC limits. The Company has not experienced any losses on these accounts and management does not believe that the Company is exposed to any significant risks.

Accounts Receivable

Accounts receivable consists of invoiced and unpaid sales. The Company records an allowance for doubtful accounts to allow for any amounts that may not be recoverable, which is based on an analysis of the Company’s prior collection experience, customer credit worthiness, and current economic trends. Accounts are considered delinquent when payments have not been received within the agreed upon terms and are written off when management determines that collection is not probable. As of March 31, 2023 and December 31, 2022, the Company’s allowance for doubtful accounts was $90,189.

Intangible Assets

Intangible assets are amortized over their estimated useful lives. Each period, the Company evaluates the estimated remaining useful life of its intangible assets and whether events or changes in circumstances warrant a revision to the remaining period of amortization. Management tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets.

Impairment Assessment

The Company evaluates intangible assets and other long-lived assets for possible impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. This includes but is not limited to significant adverse changes in business climate, market conditions or other events that indicate an asset's carrying amount may not be recoverable. Recoverability of these assets is measured by comparing the carrying amount of each asset to the future cash flows the asset is expected to generate. If the cash flows used in the test for recoverability are less than the carrying amount of these assets, the carrying amount of such assets is reduced to fair value.

The Company evaluates and tests the recoverability of its goodwill for impairment at least annually during its fourth quarter of each fiscal year or more often if and when circumstances indicate that goodwill may not be recoverable.

Revenue Recognition

The Company accounts for revenue in accordance with FASB ASC 606, Revenue from Contracts with Customers.

A performance obligation is a promise in a contract to transfer a distinct good or service to the client and is the unit of accounting in ASC 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation based on the relative standalone selling price. Determining relative standalone selling price and identifying separate performance obligations requires judgment. Contract modifications may occur in the performance of the Company’s contracts. Contracts may be modified to account for changes in the contract specifications, requirements or duration. If a contract modification results in the addition of performance obligations priced at a standalone selling price or if the post-modification services are distinct from the services provided prior to the modification, the modification is accounted for separately. If the modified services are not distinct, they are accounted for as part of the existing contract.

The Company’s revenues are derived from contracts for engineering, procurement and construction services (“EPC”) and consulting. These contracts may have different terms based on the scope, performance obligations and complexity of the engagement, which may require us to make judgments and estimates in recognizing revenues.

8

CORRELATE INFRASTRUCTURE PARTNERS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company’s performance obligations are satisfied as work progresses or at a point in time (for defined milestones). The selection of the method to measure progress towards completion requires judgment and is based on the contract and the nature of the services to be provided.

The Company’s contracts for consulting services are typically less than a year in duration and require us to a) assist the client in achieving certain defined milestones for milestone fees or b) provide a series of distinct services each period over the contract term for a pre-determined fee for each period. When contractual billings represent an amount that corresponds directly with the value provided to the client, revenues are recognized as amounts become billable in accordance with contract terms.

The Company’s contracts for EPC services are typically less than a year in duration and require us to a) provide engineering services, b) obtain materials, and c) install materials to agreed-upon specifications. The Company recognizes revenues for engineering services as the services are provided. Revenues for materials are recognized as materials are transferred to the client. Installation results in enhancements to customer-controlled assets and therefore installation revenues are recognized over time utilizing the input method wherein revenues are recognized on the basis of efforts or inputs to the satisfaction of the performance obligation.

Financial Instruments

The Company’s financial instruments include cash and cash equivalents, receivables, payables, and debt and are accounted for under the provisions of ASC Topic 825, “Financial Instruments”. The carrying amount of these financial instruments, with the exception of discounted debt, as reflected in the accompanying condensed consolidated balance sheets approximates fair value.

Fair Value Measurement

ASC Topic 820, “Fair Value Measurement”, requires that certain financial instruments be recognized at their fair values at our condensed consolidated balance sheet dates. However, other financial instruments, such as debt obligations, are not required to be recognized at their fair values, but GAAP provides an option to elect fair value accounting for these instruments. GAAP requires the disclosure of the fair values of all financial instruments, regardless of whether they are recognized at their fair values or carrying amounts in our condensed consolidated balance sheets. For financial instruments recognized at fair value, GAAP requires the disclosure of their fair values by type of instrument, along with other information, including changes in the fair values of certain financial instruments recognized in income or other comprehensive income. For financial instruments not recognized at fair value, the disclosure of their fair values is provided below under “Financial Instruments.”

Nonfinancial assets, such as property, plant and equipment, and nonfinancial liabilities are recognized at their carrying amounts in the Company’s condensed consolidated balance sheets. GAAP does not permit nonfinancial assets and liabilities to be remeasured at their fair values. However, GAAP requires the remeasurement of such assets and liabilities to their fair values upon the occurrence of certain events, such as the impairment of property, plant and equipment. In addition, if such an event occurs, GAAP requires the disclosure of the fair value of the asset or liability along with other information, including the gain or loss recognized in income in the period the remeasurement occurred.

Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities;

Level 2 – Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; or

Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

The Company did not have any Level 1 or Level 2 assets and liabilities at March 31, 2023 or December 31, 2022. The Derivative liabilities are Level 3 fair value measurements.

9

CORRELATE INFRASTRUCTURE PARTNERS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following is a summary of activity of Level 3 liabilities during the three months ended March 31, 2023:

Balance – December 31, 2022	$	722,328
Additions		7,172,944
Settlement		(50,582	)
Change in fair value		(2,487,120	)
Balance – March 31, 2023	$	5,357,570

Under the Company’s contract ordering policy, the Company first considers common shares issued and outstanding as well as reserved but unissued equity awards, such as under an equity award program. All remaining equity linked instruments such as, but not limited to, options, warrants, and debt and equity with conversion features are evaluated based on the date of issuance. If the number of shares which may be issued under the Company’s agreements exceed the authorized number of shares or are unable to be determined, equity linked instruments from that date forward are considered to be derivative liabilities until such time as the number of shares which may be issued under the Company’s agreements no longer exceed the authorized number of shares and are able to be determined.

On November 7, 2022 and December 21, 2022, the Company issued note payable agreements which contain default provisions that contain a conversion feature meeting the definition of a derivative liability which therefore require bifurcation. Further, pursuant to the Company’s contract ordering policy, the warrant and convertible note issuances subsequent to November 7, 2022, resulted in derivative liabilities.

At December 31, 2022, the Company estimated the fair value of the conversion feature derivatives embedded in the notes payable and warrants based on assumptions used in the Cox-Ross-Rubinstein binomial pricing model using the following inputs: the price of the Company’s common stock of $1.06; risk-free interest rates ranging from 4.41% to 4.73%; expected volatility of the Company’s common stock ranging from 164% to 379%; exercise prices of $1.00; and terms from one to two years.

At March 31, 2023, the Company estimated the fair value of the conversion feature derivatives embedded in the notes payable, convertible notes payable and warrants based on assumptions used in the Cox-Ross-Rubinstein binomial pricing model using the following inputs: the price of the Company’s common stock of $0.70; risk-free interest rates ranging from 3.60% to 4.94%; expected volatility of the Company’s common stock ranging from 97% to 305%; exercise prices ranging from $0.46 to $3.20; and terms ranging from six months to five years.

Commitments and Contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties and other sources are recorded when management assesses that it is probable that a liability has been incurred and the amount can be reasonably estimated.

Income Taxes

In accordance with FASB ASC Topic 740, "Income Taxes," the Company provides for the recognition of deferred tax assets if realization of such assets is more likely than not. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax basis of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities.

In addition, the Company’s management performs an evaluation of all uncertain income tax positions taken or expected to be taken in the course of preparing the Company’s income tax returns to determine whether the income tax positions meet a “more likely than not” standard of being sustained under examination by the applicable taxing authorities. This evaluation is required to be performed for all open tax years, as defined by the various statutes of limitations, for federal and state purposes. If the Company has interest or penalties associated with insufficient taxes paid, such expenses are reported in income tax expense.

Basic and Diluted Loss Per Share

FASB ASC Topic 260, “Earnings Per Share”, requires a reconciliation of the numerator and denominator of the basic and diluted earnings (loss) per share (“EPS”) computations.

Basic earnings (loss) per share are computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive.

10

CORRELATE INFRASTRUCTURE PARTNERS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company had potential additional dilutive securities outstanding at March 31, 2023 and 2022, as follows.

	March 31,		March 31,
	2023		2022
Options		5,784,068		3,059,068
Warrants		10,517,758		2,700,000
Notes payable		877,897		-
Convertible notes payable		564,048		-
		17,743,771		5,759,068

Recently Issued Accounting Standards

During the period ended March 31, 2023, there were several new accounting pronouncements issued by the 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 condensed consolidated financial statements.

NOTE 3 – COMMITMENTS AND CONTINGENCIES

From time to time, the Company may be involved in litigation in the ordinary course of business. The Company is not currently involved in any litigation that the Company believes could have a material adverse effect on its financial condition or results of operations.

NOTE 4 – DEBT

Convertible Notes Payable

From January 24, 2023 to March 30, 2023, the Company entered into eight 14% convertible note payable agreements with proceeds totaling $1,804,950. The convertible notes, which have identical terms, require quarterly interest payments with the principal due at maturity eighteen months from issuances and are convertible at $3.20 per share of common stock. The conversion features were valued at $358,176 and recorded as a derivative liability pursuant to the Company’s contract ordering policy. In connection with the convertible notes, the Company issued a total of 3,609,900 warrants to purchase shares of common stock exercisable at $0.85 per share. The warrants, which were immediately vested, were valued at $3,505,723 and recorded as a derivative liability pursuant to the Company’s contract ordering policy. As a result of the derivative liabilities, the Company recorded additional debt discounts totaling $3,505,723.

Included in the eight convertible notes payable is a 14% convertible note payable agreement with proceeds totaling $100,000 with the Company’s CEO issued on January 24, 2023. The convertible note requires quarterly interest payments with the principal due at maturity eighteen months from issuance and is convertible at $3.20 per share of common stock. The conversion feature was valued at $22,569 and recorded as a derivative liability pursuant to the Company’s contract ordering policy. In connection with the convertible note, the Company issued 200,000 warrants to purchase shares of common stock exercisable at $0.85 per share. The warrants, which were immediately vested, were valued at $209,180 and recorded as a derivative liability pursuant to the Company’s contract ordering policy. As a result of the derivative liabilities, the Company recorded a debt discount totaling $100,000.

The following table presents a summary of the Company’s convertible notes payable at March 31, 2023:

						Balances - At Issuance				Balances - 3/31/2023
Origination	Maturity	Interest			Conversion Rate	Principal		Discount		Principal		Discount
1/24/2023	7/24/2024		14	%	$3.20/Share	$	100,000	$	100,000	$	100,000	$	87,888
1/25/2023	7/25/2024		14	%	$3.20/Share		74,975		74,975		74,975		66,145
1/30/2023	7/30/2024		14	%	$3.20/Share		100,000		100,000		100,000		88,888
2/17/2023	8/17/2024		14	%	$3.20/Share		1,000,000		1,000,000		1,000,000		916,666
3/7/2023	9/7/2024		14	%	$3.20/Share		100,000		100,000		100,000		96,000
3/14/2023	9/10/2024		14	%	$3.20/Share		250,000		250,000		250,000		243,000
3/27/2023	9/27/2024		14	%	$3.20/Share		100,000		100,000		100,000		99,500
3/30/2023	9/30/2024		14	%	$3.20/Share		79,975		79,975		79,975		79,975
										$	1,804,950	$	1,678,062

11

CORRELATE INFRASTRUCTURE PARTNERS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Notes Payable

On May 29, 2020, Loyal received a $20,400 Economic Injury Disaster Loan through the Small Business Administration. The note bears interest at 3.75% until maturity in March 2050. The note requires $100 monthly payments beginning in May 2022 until maturity.

On January 11, 2022, the Company entered into a 10% note agreement with P&C Ventures, Inc. totaling $1,485,000, including an original issuance discount of $135,000. The note requires quarterly interest payments with the principal due at maturity on January 11, 2023.

On January 11, 2023, the Company and P&C Ventures, Inc. agreed to amend the January 11, 2022, note payable. The Company accounted for the amendment as an extinguishment of existing debt and issuance of new debt pursuant to ASC 470-50-40. As part of the agreement, $78,929 in accrued and unpaid interest was added to the principal balance, bringing the total principal balance of the note payable to $1,563,929. Additionally, the interest rate and maturity date were amended to 14% and October 11, 2023, respectively. In connection with the amendment, the Company issued P&C Ventures, Inc. 3,127,858 warrants to purchase shares of common stock exercisable at $0.85 per share. The warrants, which were immediately vested, were valued at $3,309,045 and recorded as a derivative liability pursuant to the Company’s contract ordering policy and resulted in additional debt discounts totaling $1,563,929.

The following table presents a summary of the Company’s notes payable at March 31, 2023:

					Balances - At Issuance				Balances - 3/31/2023
Origination	Maturity	Interest			Principal		Discount		Principal		Discount
5/29/2020	3/31/2050		4	%	$	20,400	$	-	$	20,400	$	-
7/29/2022	1/29/2024		10	%		50,000		29,664		50,000		16,480
8/11/2022	2/11/2024		10	%		150,000		88,247		150,000		51,476
8/15/2022	2/15/2024		10	%		50,000		29,513		50,000		17,213
8/31/2022	2/28/2024		10	%		80,000		45,827		80,000		28,005
9/1/2022	3/1/2024		10	%		50,000		29,922		50,000		18,288
9/7/2022	3/7/2024		10	%		50,000		29,922		50,000		18,288
9/12/2022	3/12/2024		10	%		50,000		30,316		50,000		19,370
9/29/2022	3/29/2024		10	%		100,000		59,839		100,000		39,893
11/7/2022	11/7/2023		7	%		200,000		220,000		188,320		137,497
11/9/2022	5/9/2024		10	%		25,000		25,000		25,000		18,750
11/15/2022	5/15/2024		10	%		100,000		100,000		100,000		74,999
12/21/2022	12/21/2023		7	%		200,000		220,000		211,860		155,831
1/11/2023	10/11/2023		14	%		1,563,929		1,563,929		1,563,929		1,129,504
									$	2,689,509	$	1,725,594

12

CORRELATE INFRASTRUCTURE PARTNERS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following table presents a summary of the Company’s notes payable at December 31, 2022:

					Balances - At Issuance				Balances - 12/31/2022
Origination	Maturity	Interest			Principal		Discount		Principal		Discount
5/29/2020	3/31/2050		4	%	$	20,400	$	-	$	20,400	$	-
1/11/2022	1/11/2023		10	%		1,350,000		934,128		1,485,000		38,922
7/29/2022	1/29/2024		10	%		50,000		29,664		50,000		21,424
8/11/2022	2/11/2024		10	%		150,000		88,247		150,000		66,185
8/15/2022	2/15/2024		10	%		50,000		29,513		50,000		22,133
8/31/2022	2/28/2024		10	%		80,000		45,827		80,000		35,643
9/1/2022	3/1/2024		10	%		50,000		29,922		50,000		23,274
9/7/2022	3/7/2024		10	%		50,000		29,922		50,000		23,274
9/12/2022	3/12/2024		10	%		50,000		30,316		50,000		24,422
9/29/2022	3/29/2024		10	%		100,000		59,839		100,000		49,866
11/7/2022	11/7/2023		7	%		200,000		220,000		235,400		192,499
11/9/2022	5/9/2024		10	%		25,000		25,000		25,000		22,917
11/15/2022	5/15/2024		10	%		100,000		100,000		100,000		91,667
12/21/2022	12/21/2023		7	%		200,000		220,000		235,400		210,833
									$	2,681,200	$	823,059

Line of Credit

On October 3, 2014, the Company entered into a $30,000 line of credit agreement with a former member of Loyal. The line of credit has no maturity with interest at 8.00%. As of March 31, 2023 and December 31, 2022, the outstanding principal and accrued interest totaled $30,200 and $42,130, respectively.

Future Maturities

The table below summarizes future maturities of the Company’s debt as of March 31, 2023:

December 31,	Amount
2023	$	1,994,109
2024		2,509,950
2025		-
2026		-
2027		-
Thereafter		20,400
		4,524,459
Less - Discounts		(3,403,656	)
	$	1,120,803

NOTE 5 – EQUITY

Common Stock

During January 2023, the Company issued 4,245 shares of common stock valued at $4,500 for financing costs.

During March 2023, the Company issued 17,045 shares of common stock valued at $15,000 for services.

During January 2023, the Company paid $7,589 in accrued interest due to four noteholders by issuing 5,655 shares of common stock.

13

CORRELATE INFRASTRUCTURE PARTNERS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Warrants

During the period ended March 31, 2023, the Company calculated the fair value of the warrants granted based on assumptions used in the Cox-Ross-Rubinstein binomial pricing model using the following inputs: the price of the Company’s common stock on the date of issuance; risk-free interest rates ranging from 3.66% to 5.00%; volatility ranging from 278% to 346% based on the historical volatility of the Company’s common stock; exercise prices of $0.85; and terms of 24 to 60 months.

On January 11, 2023, the Company issued 3,127,858 warrants valued at $3,309,000 as part of a note agreement amendment (Note 4).

From January 24, 2023 to March 30, 2023, the Company issued warrants to purchase 3,609,900 shares of common stock valued at approximately $3,506,000 as part of note agreements (Note 4). Included in these warrants is a warrant to purchase 200,000 shares of common stock which was issued to the Company’s CEO.

The table below summarizes the Company’s warrants for the period ended March 31, 2023:

	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Life (in years)
Warrants as of December 31, 2022		3,780,000	$	0.48		0.87
Issued		6,737,758	$	0.85		3.39
Exercised		-	$	-		-
Warrants as of March 31, 2023		10,517,758	$	0.72		2.30

Options

During the period ended March 31, 2023, the Company calculated the fair value of the options granted based on assumptions used in the Cox-Ross-Rubinstein binomial pricing model using the following inputs: the price of the Company’s common stock on the date of issuance; risk-free interest rate of 4.27%; volatility of 277% based on the historical volatility of the Company’s common stock; exercise price of $0.99; and terms of 5 years. The fair value of options granted is expensed as vesting occurs over the applicable service periods.

During March 2023, the Company issued 500,000 options to purchase shares of common stock exercisable at $0.99 per share. The options, which were issued as part of a services agreement, vest over 36 months and were valued at $448,950.

The following table summarizes the Company’s options for the period ended March 31, 2023:

	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Life (in years)
Options as of December 31, 2022		5,284,068	$	0.80		4.17
Issued		500,000	$	0.99		5.00
Exercised		-	$	-		-
Options as of March 31, 2023		5,784,068	$	0.82		4.01

At March 31, 2023, options to purchase 2,630,803 shares of common stock were vested and options to purchase 3,153,265 shares of common stock remained unvested. The Company expects to incur expenses for the unvested options totaling $2,167,081 as they vest.

14

CORRELATE INFRASTRUCTURE PARTNERS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6 – RELATED PARTY TRANSACTIONS

Shareholder Advances and Payables

At March 31, 2023 and December 31, 2022, the Company had advances payable of $22,154, respectively, due to the Company’s President and CEO, Mr. Todd Michaels. Mr. Michaels is also a member of the Company’s Board of Directors and holds approximately 10% of the Company’s common stock.

At March 31, 2023 and December 31, 2022, the Company had advances payable of $11,865, respectively, due to an individual who holds less than 5% of the Company’s common stock.

At March 31, 2023 and December 31, 2022, the Company had advances payable of $62,500 due to an individual who is the Company’s largest shareholder. At March 31, 2023, this individual held approximately 31% of the Company’s common stock.

At March 31, 2023 and December 31, 2022, the Company had accounts payable of $259,000 and $256,000, respectively, due to Elysian Fields Disposal, LLC, an entity owned by the Company’s largest shareholder. The Company incurred $3,000 of operating expenses with the entity during the period ended March 31, 2023.

At March 31, 2023 and December 31, 2022, the Company had accounts payable of $73,000, respectively, due to Loutex Production Company, an entity owned by the Company’s largest shareholder.

At March 31, 2023, the Company had accounts payable of $20,000 due to P&C Ventures, Inc. The Company incurred $20,000 of operating expenses with P&C Ventures Inc. during the period ended March 31, 2023. Mr. Cory Hunt, who was named a director of the Company on December 28, 2021, is an owner and officer of P&C Ventures, Inc.

Michaels Consulting

At March 31, 2023 and December 31, 2022, the Company had accounts payable of $344,000, respectively, due to Michaels Consulting, an entity owned by the wife of Mr. Michaels.

Notes Payable

During January 2023, the Company amended the January 2022 note agreement with P&C Ventures, Inc. and issued warrants related to the amendment, as disclosed in Note 4.

Convertible Notes Payable

During January 2023, the Company entered into a convertible note agreement with Mr. Michaels totaling $100,000 and issued 200,000 warrants, valued at approximately $209,000, related to the note, as disclosed in Note 4.

Accrued Bonus

At March 31, 2023, the Company accrued bonus compensation for its CEO and CFO of approximately $150,000 and $115,000, respectively. The accrued bonus compensation was unchanged from December 31, 2022.

NOTE 7 – SUBSEQUENT EVENTS

From April to May 2023, the Company entered into four 14% convertible note payable agreements with proceeds totaling $700,000. The convertible notes, which have identical terms, require quarterly interest payments with the principal due at maturity eighteen months from issuances and are convertible at $3.20 per share of common stock. The conversion features were valued at $93,549 and recorded as a derivative liability pursuant to the Company’s contract ordering policy. In connection with the convertible notes, the Company issued a total of 1,400,000 warrants to purchase shares of common stock exercisable at $0.85 per share. The warrants, which were immediately vested, were valued at $932,739 and recorded as a derivative liability pursuant to the Company’s contract ordering policy. As a result of the derivative liabilities, the Company recorded additional debt discounts totaling $700,000.

From April to May 2023, the Company issued 150,000 options to purchase shares of common stock exercisable at prices ranging from $0.54 to $0.572 per share. The options, which vest over 36 months, were valued at $105,796.

During April 2023, the Company entered into a consulting agreement. Pursuant to the consulting agreement, the Company issued 500,000 shares of common stock valued at $425,000. 125,000 shares vested immediately, with the remaining 375,000 shares vested over 24 months.

During April 2023, the Company paid $6,995 in accrued interest due to four noteholders by issuing 7,661 shares of common stock. Included in these shares were 1,350 shares issued to the wife of the Company’s CEO and 2,815 shares issued to the Company’s CEO.

During April 2023, the Company issued 58,496 warrants to purchase shares of common stock exercisable at $0.85 per share for two years. The warrants, which were immediately vested, were valued at $47,858.  

15

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

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.

Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors. We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions to identify forward- looking statements.

Overview

Correlate Infrastructure Partners Inc. (OTCQB: CIPI), formerly Triccar Inc., through its main operating subsidiary, Correlate Inc., offers a complete suite of proprietary clean energy assessment and fulfilment solutions for the commercial real estate industry. The Company believes scaling distributed clean energy solutions is critical in mitigating the effects of climate change. We believe that we are at the forefront in creating an industry-leading energy solution and financing platform for the commercial and industrial sector. The Company sees tremendous market opportunity in reducing site-specific energy consumption and deploying clean energy generation and energy efficiency solutions at scale.

Recently Issued Accounting Pronouncements

During the three months ended March 31, 2023, and through May 15, 2023, 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 March 31, 2023.

Liquidity and Capital Resources

At March 31, 2023, the Company had a cash balance of $741,405, as compared to a cash balance of $96,308 at December 31, 2022. The Company incurred negative cash flow from operations of $1,089,233 for the three months ended March 31, 2023, as compared to negative cash flow from operations of $731,652 in the comparable prior year period. The increase in negative cash flow from operations was primarily the result of increased compensation costs for additional employees during the current period. Cash flows from financing activities during the three months ended March 31, 2023, totaled $1,734,330 and were the result of $1,804,950 in proceeds from loan agreements and $70,620 in repayments of loan agreements. 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.

16

Results of Operations

Comparison of the Three Months Ended March 31, 2023 and 2022

For the three months ended March 31, 2023 and 2022, the Company’s revenues totaled $50,734 and $68,408, respectively. We anticipate the Company’s revenues in upcoming quarters to increase significantly as revenues are recognized from projects in progress and in the pipeline.

Gross profit for the three months ended March 31, 2023, totaled $4,875 compared to a gross loss of $706 in the comparable prior year period. 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 March 31, 2023, our operating expenses increased to $1,208,148 compared to $773,528 for the comparable period in 2022. The increase of $434,620, or 56%, was primarily driven by compensation expenses associated with added strategic management and staff. Compensation expenses for the three months ended March 31, 2023 included approximately $481,691 and $253,851 in salaries and wages and the non-cash expenses of stock-based compensation, respectively, compared to $279,345 and $150,504, respectively, 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 three months ended March 31, 2023, other expenses totaled $2,207,080, compared to $199,226 in the comparable period in 2022. This increase in other expenses was primarily driven by financing costs totaling $3,808,565 which were the result of derivative liabilities, and $788,282 in amortization of debt discount incurred during the period ended March 31, 2023 compared to $166,485 during the period ended March 31, 2022. The expenses during the period ended March 31, 2023 were partially offset by a $2,487,120 decrease in the fair value of derivative liabilities. We anticipate our other expenses to remain elevated as the Company incurs interest from debt and related financing costs to expand its operations.

The activities above resulted in net losses of $3,410,353 and $973,460 for the three months ended March 31, 2023 and 2022, respectively.

Off Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

17

Item 3. Qualitative and Quantitative Disclosures about Market Risk.

We are a smaller reporting company and, therefore, we are not required to provide information required by this item.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures: Our management carried out an evaluation of the effectiveness and design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended (the Exchange Act). Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that, at March 31, 2023, such disclosure controls and procedures were not effective.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that the information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to management including our Chief Executive Officer and Interim Chief Financial Officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

Limitations on the Effectiveness of Controls: Our disclosure controls and procedures are designed to provide reasonable, not absolute, assurance that the objectives of our disclosure control system are met. Because of inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within a company have been detected. Our Chief Executive Officer and Chief Financial Officer have concluded, based on their evaluation as of the end of the period covered by this Quarterly Report that our disclosure controls and procedures were not sufficiently effective to provide reasonable assurance that the objectives of our disclosure control system were met.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal controls over financial reporting that occurred during the three-month period ended March 31, 2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

18

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

None.

Item 1A. Risk Factors.

We are a smaller reporting company and, therefore, we are not required to provide information required by this item.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

During the three-month period ended March 31, 2023, we sold an aggregate of $1,804,950 of our convertible promissory notes and issued an aggregate of 3,609,900 warrants to purchase shares of our common stock in connection with the issuance of the notes and 3,127,858 warrants to purchase shares of our common stock in connection with a note amendment.  Each of the purchasers of the notes represented to the Company that such purchaser is an "accredited" for purposes of Rule 501 of Regulation D. The issuance of the warrants was made in a private placement exempt from registration under Section 4(2) of the Act and/or Rule 506 of Regulation D promulgated under the Act.

Item 3. Defaults upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

19

Item 6. Exhibits.

Exhibit No.	Description of Document
31.1 *	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934.
31.2 *	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934.
32.1 *	Certification pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. §1350).
32.2 *	Certification pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. §1350).
101.INS	Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

20

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated: May 15, 2023	Correlate Infrastructure Partners Inc. (Registrant) /s/ Todd Michaels
	Todd Michaels Chief Executive Officer (Principal Executive Officer)
Dated: May 15, 2023	Correlate Infrastructure Partners Inc. (Registrant) /s/ Channing F. Chen
	Channing F. Chen Chief Financial Officer (Principal Financial Officer)

21

EX-31.1

EXHIBIT 31.1

CERTIFICATION

Pursuant to 18 U.S.C. Section 1350,

As adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Todd Michaels, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Correlate Infrastructure Partners Inc. (the “registrant”);
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements and other financial information included in this report fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting, which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 15, 2023

	/s/ Todd Michaels
Name:	Todd Michaels
Title:	Chief Executive Officer (Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION 

Pursuant to 18 U.S.C. Section 1350, 

As adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Channing F. Chen, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Correlate Infrastructure Partners Inc. (the “registrant”);
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements and other financial information included in this report fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting, which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 15, 2023
	/s/ Channing F. Chen
Name:	Channing F. Chen
Title:	Chief Financial Officer (Principal Financial and Accounting Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Correlate Infrastructure Partners Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2023 (the “Report”), Todd Michaels, Chief Executive Officer of the Company, certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:

(1)	The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 15, 2023		/s/ Todd Michaels
	Name:	Todd Michaels
	Title:	Chief Executive Officer
		(Principal Executive Officer)

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO 

18 U.S.C. SECTION 1350, 

AS ADOPTED PURSUANT TO 

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Correlate Infrastructure Partners Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2023 (the “Report”), Channing F. Chen, Chief Financial Officer of the Company, certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:

(1)	The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 15, 2023		/s/ Channing F. Chen
	Name:	Channing F. Chen
	Title:	Chief Financial Officer
		(Principal Financial and Accounting Officer)

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

XML

Cover - shares	3 Months Ended
	Mar. 31, 2023	May 15, 2023
Cover [Abstract]
Entity Registrant Name	CORRELATE INFRASTRUCTURE PARTNERS INC.
Entity Central Index Key	0001108645
Document Type	10-Q
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Small Business	true
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes
Document Period End Date	Mar. 31, 2023
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2023
Entity Common Stock Shares Outstanding		35,350,571
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	000-55825
Entity Incorporation State Country Code	NV
Entity Tax Identification Number	84-4250492
Entity Interactive Data Current	Yes
Entity Address Address Line 1	220 Travis Street
Entity Address Address Line 2	Suite 501
Entity Address City Or Town	Shreveport
Entity Address State Or Province	LA
Entity Address Postal Zip Code	71101
City Area Code	855
Local Phone Number	264-4060

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Current assets
Cash	$ 741,405	$ 96,308
Contract assets	342,649	684,185
Prepaid expenses and other current assets	564,783	395,953
Total current assets	1,648,837	1,176,446
Property and equipment
Property and equipment, net	3,604	4,004
Total property and equipment	3,604	4,004
Other assets
Intangible assets - customer relationships, net	175,350	187,040
Intangible assets - developed technology, net	10,400	13,870
Intangible assets - development rights, net	102,796	112,744
Goodwill	762,851	762,851
Total other assets	1,051,397	1,076,505
Total assets	2,703,838	2,256,955
Current liabilities
Accounts payable	1,049,872	1,069,743
Accrued expenses	963,579	1,285,898
Shareholder advances	96,519	96,519
Line of credit	30,000	30,000
Notes payable, current portion, net of discount	932,664	1,513,546
Convertible notes payable, current portion, net of discount	126,888	0
Derivative liability	5,357,570	722,328
Total current liabilities	8,557,092	4,718,034
Notes payable, net of current portion and discount	31,251	344,595
Total liabilities	8,588,343	5,062,629
Stockholders' equity (deficit)
Preferred stock $.0001 par value; authorized 50,000,000 shares with -0- issued and outstanding at March 31, 2023 and December 31, 2022, respectively	0	0
Common stock $0.0001 par value; authorized 400,000,000 shares with 35,350,571 and 35,323,626 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively	3,535	3,532
Additional paid-in capital	5,790,739	5,459,220
Accumulated deficit	(11,678,779)	(8,268,426)
Total stockholders' equity (deficit)	(5,884,505)	(2,805,674)
Total liabilities and stockholders' equity (deficit)	$ 2,703,838	$ 2,256,955

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2023	Dec. 31, 2022
CONDENSED CONSOLIDATED BALANCE SHEETS
Preferred Stock, Par or Stated Value Per Share	$ 0.0001	$ 0.0001
Preferred Stock, Shares Authorized	50,000,000	50,000,000
Preferred Stock, Shares Issued	0	0
Preferred Stock, Shares Outstanding	0	0
Common Stock, Par or Stated Value Per Share	$ 0.0001	$ 0.0001
Common Stock, Shares Authorized	400,000,000	400,000,000
Common Stock, Shares, Issued	35,350,571	35,323,626
Common Stock, Shares, Outstanding	35,350,571	35,323,626

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Revenues	$ 50,734	$ 68,408
Cost of revenues	45,859	69,114
Gross profit (loss)	4,875	(706)
Operating expenses
General and administrative	1,023,930	546,234
Insurance	2,230	1,171
Legal and professional	120,225	182,008
Travel	36,255	28,955
Depreciation and amortization	25,508	15,160
Total operating expenses	1,208,148	773,528
Loss from operations	(1,203,273)	(774,234)
Other income (expense)
Interest expense	(97,353)	(32,741)
Amortization of debt discount	(788,282)	(166,485)
Financing costs	(3,808,565)	0
Change in fair value of derivative liability	2,487,120	0
Total other income (expense)	(2,207,080)	(199,226)
Net loss	$ (3,410,353)	$ (973,460)
Loss per share	$ (0.10)	$ (0.03)
Weighted average shares outstanding - basic	35,332,384	35,159,920

XML

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY (DEFICIT) - USD ($)	Total	Common Class B [Member]	Common Stock	Additional Paid-In Capital	Retained Earnings (Accumulated Deficit)	Common Class A [Member]
Balance, shares at Dec. 31, 2021						34,639,920
Balance, amount at Dec. 31, 2021	$ 432,420	$ 0	$ 0	$ 1,534,474	$ (1,105,518)	$ 3,464
Issuance of warrants in connection with debt	799,128	0	0	799,128	0	0
Stock-based compensation	150,504	0	0	150,504	0	$ 0
Issuance of shares for cash, shares						600,000
Issuance of shares for cash, amount	150,000	0	0	149,940	0	$ 60
Net loss	(973,460)	0	0	0	(973,460)	$ 0
Settlement of derivative liability	0
Balance, shares at Mar. 31, 2022						35,239,920
Balance, amount at Mar. 31, 2022	558,592	0	$ 0	2,634,046	(2,078,978)	$ 3,524
Balance, shares at Dec. 31, 2022			35,323,626
Balance, amount at Dec. 31, 2022	(2,805,674)	0	$ 3,532	5,459,220	(8,268,426)	0
Stock-based compensation	253,851	0	0	253,851	0	0
Net loss	(3,410,353)	0	$ 0	0	(3,410,353)	0
Issuance of shares for services, shares			17,045
Issuance of shares for services, amount	15,000	0	$ 2	14,998	0	0
Issuance of shares for financing costs, shares			4,245
Issuance of shares for financing costs, amount	4,500	0	$ 0	4,500	0	0
Issuance of shares for the payment of accrued interest, shares			5,655
Issuance of shares for the payment of accrued interest, amount	7,589	0	$ 1	7,588	0	0
Settlement of derivative liability	50,582	$ 0	$ 0	50,582	0	0
Balance, shares at Mar. 31, 2023			35,350,571
Balance, amount at Mar. 31, 2023	$ (5,884,505)		$ 3,535	$ 5,790,739	$ (11,678,779)	$ 0

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Operating activities
Net loss	$ (3,410,353)	$ (973,460)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	25,508	15,160
Amortization of debt discount	788,282	166,485
Stock issued for services	15,000	0
Stock-based compensation	253,851	150,504
Financing costs	3,808,565	0
Change in fair value of derivative liability	(2,487,120)	0
Changes in operating assets and liabilities:
Accounts receivable	0	(51,180)
Contract assets	341,536	0
Prepaid expenses and other current assets	(168,830)	(11,000)
Accounts payable	(19,871)	(75,080)
Accrued expenses	(235,801)	46,919
Net cash used in operating activities	(1,089,233)	(731,652)
Investing activities
Net cash provided by investing activities	0	0
Financing activities
Proceeds from issuance of notes payable	0	1,350,000
Proceeds from issuance of convertible notes payable	1,804,950	0
Repayment of notes payable	(70,620)	0
Proceeds from issuance of common stock	0	150,000
Net cash provided by financing activities	1,734,330	1,500,000
Net increase in cash	645,097	768,348
Cash - beginning of period	96,308	252,189
Cash - end of period	741,405	1,020,537
Cash paid for income taxes	0	0
Cash paid for interest	70,274	0
Supplemental schedule of non-cash investing and financing activities
Discount on note payable from issuance of warrants	0	799,128
Discount on notes payable from derivative liability	1,563,929	0
Discount on convertible notes payable from derivative liability	1,804,950	0
Shares issued for settlement of accrued interest	7,589	0
Accrued interest settled through note payable	78,929	0
Settlement of derivative liability	$ 50,582	$ 0

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NATURE OF THE ORGANIZATION AND BUSINESS

3 Months Ended

Mar. 31, 2023

NATURE OF THE ORGANIZATION AND BUSINESS

NATURE OF THE ORGANIZATION AND BUSINESS

NOTE 1 – NATURE OF THE ORGANIZATION AND BUSINESS

Nature of the Business

The accompanying condensed consolidated financial statements include the accounts of the Company, and its subsidiaries Correlate, Inc. (“Correlate”), a Delaware corporation, and Loyal Enterprises LLC dba Solar Site Design (“Loyal”), a Tennessee limited liability company.

Correlate is a portfolio-scale development and finance platform offering commercial and industrial facilities access to clean electrification solutions focused on locally-sited solar, energy storage, EV infrastructure, and intelligent efficiency measures. Its unique data-driven approach is powered by proprietary analytics and concierge subscription services.

Loyal provided consulting services on acquisitions and project development tools to customers in the commercial solar industry. Effective November 2022, all of Loyal’s assets and operations were transferred to Correlate and Loyal was dissolved.

Going Concern

The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Company has incurred losses since inception and has not generated positive cash flows from operations. These matters, among others, raise substantial doubt about the Company's ability to continue as a going concern.

The Company’s ability to continue in existence is dependent on its ability to develop additional sources of capital, and/or achieve profitable operations and positive cash flows. Management’s plans with respect to operations include aggressive marketing, acquisitions, and raising additional capital through sales of equity or debt securities as may be necessary to pursue its business plans and sustain operations until such time as the Company can achieve profitability. Management believes that aggressive marketing combined with acquisitions and additional financing as necessary will result in improved operations and cash flow in 2023 and beyond. However, there can be no assurance that management will be successful in obtaining additional funding or in attaining profitable operations. The accompanying condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 2023

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the interim reporting rules of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s latest Annual Report filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments (unless otherwise indicated), necessary for a fair presentation of the financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant inter-company transactions and balances have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments and other short-term investments with maturity of three months or less, when purchased, to be cash equivalents. There were no cash equivalents as of March 31, 2023 and December 31, 2022.

The Company maintains its cash balances at financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”). The FDIC provides coverage of up to $250,000 per depositor, per financial institution, for the aggregate total of depositors’ interest and non-interest-bearing accounts. At March 31, 2023, approximately $280,000 of the Company’s cash balances were in excess of FDIC limits. The Company has not experienced any losses on these accounts and management does not believe that the Company is exposed to any significant risks.

Accounts Receivable

Accounts receivable consists of invoiced and unpaid sales. The Company records an allowance for doubtful accounts to allow for any amounts that may not be recoverable, which is based on an analysis of the Company’s prior collection experience, customer credit worthiness, and current economic trends. Accounts are considered delinquent when payments have not been received within the agreed upon terms and are written off when management determines that collection is not probable. As of March 31, 2023 and December 31, 2022, the Company’s allowance for doubtful accounts was $90,189.

Intangible Assets

Intangible assets are amortized over their estimated useful lives. Each period, the Company evaluates the estimated remaining useful life of its intangible assets and whether events or changes in circumstances warrant a revision to the remaining period of amortization. Management tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets.

Impairment Assessment

The Company evaluates intangible assets and other long-lived assets for possible impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. This includes but is not limited to significant adverse changes in business climate, market conditions or other events that indicate an asset's carrying amount may not be recoverable. Recoverability of these assets is measured by comparing the carrying amount of each asset to the future cash flows the asset is expected to generate. If the cash flows used in the test for recoverability are less than the carrying amount of these assets, the carrying amount of such assets is reduced to fair value.

The Company evaluates and tests the recoverability of its goodwill for impairment at least annually during its fourth quarter of each fiscal year or more often if and when circumstances indicate that goodwill may not be recoverable.

Revenue Recognition

The Company accounts for revenue in accordance with FASB ASC 606, Revenue from Contracts with Customers.

A performance obligation is a promise in a contract to transfer a distinct good or service to the client and is the unit of accounting in ASC 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation based on the relative standalone selling price. Determining relative standalone selling price and identifying separate performance obligations requires judgment. Contract modifications may occur in the performance of the Company’s contracts. Contracts may be modified to account for changes in the contract specifications, requirements or duration. If a contract modification results in the addition of performance obligations priced at a standalone selling price or if the post-modification services are distinct from the services provided prior to the modification, the modification is accounted for separately. If the modified services are not distinct, they are accounted for as part of the existing contract.

The Company’s revenues are derived from contracts for engineering, procurement and construction services (“EPC”) and consulting. These contracts may have different terms based on the scope, performance obligations and complexity of the engagement, which may require us to make judgments and estimates in recognizing revenues.

The Company’s performance obligations are satisfied as work progresses or at a point in time (for defined milestones). The selection of the method to measure progress towards completion requires judgment and is based on the contract and the nature of the services to be provided.

The Company’s contracts for consulting services are typically less than a year in duration and require us to a) assist the client in achieving certain defined milestones for milestone fees or b) provide a series of distinct services each period over the contract term for a pre-determined fee for each period. When contractual billings represent an amount that corresponds directly with the value provided to the client, revenues are recognized as amounts become billable in accordance with contract terms.

The Company’s contracts for EPC services are typically less than a year in duration and require us to a) provide engineering services, b) obtain materials, and c) install materials to agreed-upon specifications. The Company recognizes revenues for engineering services as the services are provided. Revenues for materials are recognized as materials are transferred to the client. Installation results in enhancements to customer-controlled assets and therefore installation revenues are recognized over time utilizing the input method wherein revenues are recognized on the basis of efforts or inputs to the satisfaction of the performance obligation.

Financial Instruments

The Company’s financial instruments include cash and cash equivalents, receivables, payables, and debt and are accounted for under the provisions of ASC Topic 825, “Financial Instruments”. The carrying amount of these financial instruments, with the exception of discounted debt, as reflected in the accompanying condensed consolidated balance sheets approximates fair value.

Fair Value Measurement

ASC Topic 820, “Fair Value Measurement”, requires that certain financial instruments be recognized at their fair values at our condensed consolidated balance sheet dates. However, other financial instruments, such as debt obligations, are not required to be recognized at their fair values, but GAAP provides an option to elect fair value accounting for these instruments. GAAP requires the disclosure of the fair values of all financial instruments, regardless of whether they are recognized at their fair values or carrying amounts in our condensed consolidated balance sheets. For financial instruments recognized at fair value, GAAP requires the disclosure of their fair values by type of instrument, along with other information, including changes in the fair values of certain financial instruments recognized in income or other comprehensive income. For financial instruments not recognized at fair value, the disclosure of their fair values is provided below under “Financial Instruments.”

Nonfinancial assets, such as property, plant and equipment, and nonfinancial liabilities are recognized at their carrying amounts in the Company’s condensed consolidated balance sheets. GAAP does not permit nonfinancial assets and liabilities to be remeasured at their fair values. However, GAAP requires the remeasurement of such assets and liabilities to their fair values upon the occurrence of certain events, such as the impairment of property, plant and equipment. In addition, if such an event occurs, GAAP requires the disclosure of the fair value of the asset or liability along with other information, including the gain or loss recognized in income in the period the remeasurement occurred.

Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities;

Level 2 – Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; or

Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

The Company did not have any Level 1 or Level 2 assets and liabilities at March 31, 2023 or December 31, 2022. The Derivative liabilities are Level 3 fair value measurements.

The following is a summary of activity of Level 3 liabilities during the three months ended March 31, 2023:

Balance – December 31, 2022	$	722,328
Additions		7,172,944
Settlement		(50,582	)
Change in fair value		(2,487,120	)
Balance – March 31, 2023	$	5,357,570

Under the Company’s contract ordering policy, the Company first considers common shares issued and outstanding as well as reserved but unissued equity awards, such as under an equity award program. All remaining equity linked instruments such as, but not limited to, options, warrants, and debt and equity with conversion features are evaluated based on the date of issuance. If the number of shares which may be issued under the Company’s agreements exceed the authorized number of shares or are unable to be determined, equity linked instruments from that date forward are considered to be derivative liabilities until such time as the number of shares which may be issued under the Company’s agreements no longer exceed the authorized number of shares and are able to be determined.

On November 7, 2022 and December 21, 2022, the Company issued note payable agreements which contain default provisions that contain a conversion feature meeting the definition of a derivative liability which therefore require bifurcation. Further, pursuant to the Company’s contract ordering policy, the warrant and convertible note issuances subsequent to November 7, 2022, resulted in derivative liabilities.

At December 31, 2022, the Company estimated the fair value of the conversion feature derivatives embedded in the notes payable and warrants based on assumptions used in the Cox-Ross-Rubinstein binomial pricing model using the following inputs: the price of the Company’s common stock of $1.06; risk-free interest rates ranging from 4.41% to 4.73%; expected volatility of the Company’s common stock ranging from 164% to 379%; exercise prices of $1.00; and terms from one to two years.

At March 31, 2023, the Company estimated the fair value of the conversion feature derivatives embedded in the notes payable, convertible notes payable and warrants based on assumptions used in the Cox-Ross-Rubinstein binomial pricing model using the following inputs: the price of the Company’s common stock of $0.70; risk-free interest rates ranging from 3.60% to 4.94%; expected volatility of the Company’s common stock ranging from 97% to 305%; exercise prices ranging from $0.46 to $3.20; and terms ranging from six months to five years.

Commitments and Contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties and other sources are recorded when management assesses that it is probable that a liability has been incurred and the amount can be reasonably estimated.

Income Taxes

In accordance with FASB ASC Topic 740, "Income Taxes," the Company provides for the recognition of deferred tax assets if realization of such assets is more likely than not. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax basis of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities.

In addition, the Company’s management performs an evaluation of all uncertain income tax positions taken or expected to be taken in the course of preparing the Company’s income tax returns to determine whether the income tax positions meet a “more likely than not” standard of being sustained under examination by the applicable taxing authorities. This evaluation is required to be performed for all open tax years, as defined by the various statutes of limitations, for federal and state purposes. If the Company has interest or penalties associated with insufficient taxes paid, such expenses are reported in income tax expense.

Basic and Diluted Loss Per Share

FASB ASC Topic 260, “Earnings Per Share”, requires a reconciliation of the numerator and denominator of the basic and diluted earnings (loss) per share (“EPS”) computations.

Basic earnings (loss) per share are computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive.

The Company had potential additional dilutive securities outstanding at March 31, 2023 and 2022, as follows.

	March 31,		March 31,
	2023		2022
Options		5,784,068		3,059,068
Warrants		10,517,758		2,700,000
Notes payable		877,897		-
Convertible notes payable		564,048		-
		17,743,771		5,759,068

Recently Issued Accounting Standards

During the period ended March 31, 2023, there were several new accounting pronouncements issued by the 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 condensed consolidated financial statements.

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COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2023

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

NOTE 3 – COMMITMENTS AND CONTINGENCIES

From time to time, the Company may be involved in litigation in the ordinary course of business. The Company is not currently involved in any litigation that the Company believes could have a material adverse effect on its financial condition or results of operations.

XML

DEBT

3 Months Ended

Mar. 31, 2023

DEBT

DEBT

NOTE 4 – DEBT

Convertible Notes Payable

From January 24, 2023 to March 30, 2023, the Company entered into eight 14% convertible note payable agreements with proceeds totaling $1,804,950. The convertible notes, which have identical terms, require quarterly interest payments with the principal due at maturity eighteen months from issuances and are convertible at $3.20 per share of common stock. The conversion features were valued at $358,176 and recorded as a derivative liability pursuant to the Company’s contract ordering policy. In connection with the convertible notes, the Company issued a total of 3,609,900 warrants to purchase shares of common stock exercisable at $0.85 per share. The warrants, which were immediately vested, were valued at $3,505,723 and recorded as a derivative liability pursuant to the Company’s contract ordering policy. As a result of the derivative liabilities, the Company recorded additional debt discounts totaling $3,505,723.

Included in the eight convertible notes payable is a 14% convertible note payable agreement with proceeds totaling $100,000 with the Company’s CEO issued on January 24, 2023. The convertible note requires quarterly interest payments with the principal due at maturity eighteen months from issuance and is convertible at $3.20 per share of common stock. The conversion feature was valued at $22,569 and recorded as a derivative liability pursuant to the Company’s contract ordering policy. In connection with the convertible note, the Company issued 200,000 warrants to purchase shares of common stock exercisable at $0.85 per share. The warrants, which were immediately vested, were valued at $209,180 and recorded as a derivative liability pursuant to the Company’s contract ordering policy. As a result of the derivative liabilities, the Company recorded a debt discount totaling $100,000.

The following table presents a summary of the Company’s convertible notes payable at March 31, 2023:

						Balances - At Issuance				Balances - 3/31/2023
Origination	Maturity	Interest			Conversion Rate	Principal		Discount		Principal		Discount
1/24/2023	7/24/2024		14	%	$3.20/Share	$	100,000	$	100,000	$	100,000	$	87,888
1/25/2023	7/25/2024		14	%	$3.20/Share		74,975		74,975		74,975		66,145
1/30/2023	7/30/2024		14	%	$3.20/Share		100,000		100,000		100,000		88,888
2/17/2023	8/17/2024		14	%	$3.20/Share		1,000,000		1,000,000		1,000,000		916,666
3/7/2023	9/7/2024		14	%	$3.20/Share		100,000		100,000		100,000		96,000
3/14/2023	9/10/2024		14	%	$3.20/Share		250,000		250,000		250,000		243,000
3/27/2023	9/27/2024		14	%	$3.20/Share		100,000		100,000		100,000		99,500
3/30/2023	9/30/2024		14	%	$3.20/Share		79,975		79,975		79,975		79,975
										$	1,804,950	$	1,678,062

Notes Payable

On May 29, 2020, Loyal received a $20,400 Economic Injury Disaster Loan through the Small Business Administration. The note bears interest at 3.75% until maturity in March 2050. The note requires $100 monthly payments beginning in May 2022 until maturity.

On January 11, 2022, the Company entered into a 10% note agreement with P&C Ventures, Inc. totaling $1,485,000, including an original issuance discount of $135,000. The note requires quarterly interest payments with the principal due at maturity on January 11, 2023.

On January 11, 2023, the Company and P&C Ventures, Inc. agreed to amend the January 11, 2022, note payable. The Company accounted for the amendment as an extinguishment of existing debt and issuance of new debt pursuant to ASC 470-50-40. As part of the agreement, $78,929 in accrued and unpaid interest was added to the principal balance, bringing the total principal balance of the note payable to $1,563,929. Additionally, the interest rate and maturity date were amended to 14% and October 11, 2023, respectively. In connection with the amendment, the Company issued P&C Ventures, Inc. 3,127,858 warrants to purchase shares of common stock exercisable at $0.85 per share. The warrants, which were immediately vested, were valued at $3,309,045 and recorded as a derivative liability pursuant to the Company’s contract ordering policy and resulted in additional debt discounts totaling $1,563,929.

The following table presents a summary of the Company’s notes payable at March 31, 2023:

					Balances - At Issuance				Balances - 3/31/2023
Origination	Maturity	Interest			Principal		Discount		Principal		Discount
5/29/2020	3/31/2050		4	%	$	20,400	$	-	$	20,400	$	-
7/29/2022	1/29/2024		10	%		50,000		29,664		50,000		16,480
8/11/2022	2/11/2024		10	%		150,000		88,247		150,000		51,476
8/15/2022	2/15/2024		10	%		50,000		29,513		50,000		17,213
8/31/2022	2/28/2024		10	%		80,000		45,827		80,000		28,005
9/1/2022	3/1/2024		10	%		50,000		29,922		50,000		18,288
9/7/2022	3/7/2024		10	%		50,000		29,922		50,000		18,288
9/12/2022	3/12/2024		10	%		50,000		30,316		50,000		19,370
9/29/2022	3/29/2024		10	%		100,000		59,839		100,000		39,893
11/7/2022	11/7/2023		7	%		200,000		220,000		188,320		137,497
11/9/2022	5/9/2024		10	%		25,000		25,000		25,000		18,750
11/15/2022	5/15/2024		10	%		100,000		100,000		100,000		74,999
12/21/2022	12/21/2023		7	%		200,000		220,000		211,860		155,831
1/11/2023	10/11/2023		14	%		1,563,929		1,563,929		1,563,929		1,129,504
									$	2,689,509	$	1,725,594

The following table presents a summary of the Company’s notes payable at December 31, 2022:

					Balances - At Issuance				Balances - 12/31/2022
Origination	Maturity	Interest			Principal		Discount		Principal		Discount
5/29/2020	3/31/2050		4	%	$	20,400	$	-	$	20,400	$	-
1/11/2022	1/11/2023		10	%		1,350,000		934,128		1,485,000		38,922
7/29/2022	1/29/2024		10	%		50,000		29,664		50,000		21,424
8/11/2022	2/11/2024		10	%		150,000		88,247		150,000		66,185
8/15/2022	2/15/2024		10	%		50,000		29,513		50,000		22,133
8/31/2022	2/28/2024		10	%		80,000		45,827		80,000		35,643
9/1/2022	3/1/2024		10	%		50,000		29,922		50,000		23,274
9/7/2022	3/7/2024		10	%		50,000		29,922		50,000		23,274
9/12/2022	3/12/2024		10	%		50,000		30,316		50,000		24,422
9/29/2022	3/29/2024		10	%		100,000		59,839		100,000		49,866
11/7/2022	11/7/2023		7	%		200,000		220,000		235,400		192,499
11/9/2022	5/9/2024		10	%		25,000		25,000		25,000		22,917
11/15/2022	5/15/2024		10	%		100,000		100,000		100,000		91,667
12/21/2022	12/21/2023		7	%		200,000		220,000		235,400		210,833
									$	2,681,200	$	823,059

Line of Credit

On October 3, 2014, the Company entered into a $30,000 line of credit agreement with a former member of Loyal. The line of credit has no maturity with interest at 8.00%. As of March 31, 2023 and December 31, 2022, the outstanding principal and accrued interest totaled $30,200 and $42,130, respectively.

Future Maturities

The table below summarizes future maturities of the Company’s debt as of March 31, 2023:

December 31,	Amount
2023	$	1,994,109
2024		2,509,950
2025		-
2026		-
2027		-
Thereafter		20,400
		4,524,459
Less - Discounts		(3,403,656	)
	$	1,120,803

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EQUITY

3 Months Ended

Mar. 31, 2023

EQUITY

EQUITY

NOTE 5 – EQUITY

Common Stock

During January 2023, the Company issued 4,245 shares of common stock valued at $4,500 for financing costs.

During March 2023, the Company issued 17,045 shares of common stock valued at $15,000 for services.

During January 2023, the Company paid $7,589 in accrued interest due to four noteholders by issuing 5,655 shares of common stock.

Warrants

During the period ended March 31, 2023, the Company calculated the fair value of the warrants granted based on assumptions used in the Cox-Ross-Rubinstein binomial pricing model using the following inputs: the price of the Company’s common stock on the date of issuance; risk-free interest rates ranging from 3.66% to 5.00%; volatility ranging from 278% to 346% based on the historical volatility of the Company’s common stock; exercise prices of $0.85; and terms of 24 to 60 months.

On January 11, 2023, the Company issued 3,127,858 warrants valued at $3,309,000 as part of a note agreement amendment (Note 4).

From January 24, 2023 to March 30, 2023, the Company issued warrants to purchase 3,609,900 shares of common stock valued at approximately $3,506,000 as part of note agreements (Note 4). Included in these warrants is a warrant to purchase 200,000 shares of common stock which was issued to the Company’s CEO.

The table below summarizes the Company’s warrants for the period ended March 31, 2023:

	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Life (in years)
Warrants as of December 31, 2022		3,780,000	$	0.48		0.87
Issued		6,737,758	$	0.85		3.39
Exercised		-	$	-		-
Warrants as of March 31, 2023		10,517,758	$	0.72		2.30

Options

During the period ended March 31, 2023, the Company calculated the fair value of the options granted based on assumptions used in the Cox-Ross-Rubinstein binomial pricing model using the following inputs: the price of the Company’s common stock on the date of issuance; risk-free interest rate of 4.27%; volatility of 277% based on the historical volatility of the Company’s common stock; exercise price of $0.99; and terms of 5 years. The fair value of options granted is expensed as vesting occurs over the applicable service periods.

During March 2023, the Company issued 500,000 options to purchase shares of common stock exercisable at $0.99 per share. The options, which were issued as part of a services agreement, vest over 36 months and were valued at $448,950.

The following table summarizes the Company’s options for the period ended March 31, 2023:

	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Life (in years)
Options as of December 31, 2022		5,284,068	$	0.80		4.17
Issued		500,000	$	0.99		5.00
Exercised		-	$	-		-
Options as of March 31, 2023		5,784,068	$	0.82		4.01

At March 31, 2023, options to purchase 2,630,803 shares of common stock were vested and options to purchase 3,153,265 shares of common stock remained unvested. The Company expects to incur expenses for the unvested options totaling $2,167,081 as they vest.

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RELATED PARTY TRANSACTIONS

3 Months Ended

Mar. 31, 2023

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

NOTE 6 – RELATED PARTY TRANSACTIONS

Shareholder Advances and Payables

At March 31, 2023 and December 31, 2022, the Company had advances payable of $22,154, respectively, due to the Company’s President and CEO, Mr. Todd Michaels. Mr. Michaels is also a member of the Company’s Board of Directors and holds approximately 10% of the Company’s common stock.

At March 31, 2023 and December 31, 2022, the Company had advances payable of $11,865, respectively, due to an individual who holds less than 5% of the Company’s common stock.

At March 31, 2023 and December 31, 2022, the Company had advances payable of $62,500 due to an individual who is the Company’s largest shareholder. At March 31, 2023, this individual held approximately 31% of the Company’s common stock.

At March 31, 2023 and December 31, 2022, the Company had accounts payable of $259,000 and $256,000, respectively, due to Elysian Fields Disposal, LLC, an entity owned by the Company’s largest shareholder. The Company incurred $3,000 of operating expenses with the entity during the period ended March 31, 2023.

At March 31, 2023 and December 31, 2022, the Company had accounts payable of $73,000, respectively, due to Loutex Production Company, an entity owned by the Company’s largest shareholder.

At March 31, 2023, the Company had accounts payable of $20,000 due to P&C Ventures, Inc. The Company incurred $20,000 of operating expenses with P&C Ventures Inc. during the period ended March 31, 2023. Mr. Cory Hunt, who was named a director of the Company on December 28, 2021, is an owner and officer of P&C Ventures, Inc.

Michaels Consulting

At March 31, 2023 and December 31, 2022, the Company had accounts payable of $344,000, respectively, due to Michaels Consulting, an entity owned by the wife of Mr. Michaels.

Notes Payable

During January 2023, the Company amended the January 2022 note agreement with P&C Ventures, Inc. and issued warrants related to the amendment, as disclosed in Note 4.

Convertible Notes Payable

During January 2023, the Company entered into a convertible note agreement with Mr. Michaels totaling $100,000 and issued 200,000 warrants, valued at approximately $209,000, related to the note, as disclosed in Note 4.

Accrued Bonus

At March 31, 2023, the Company accrued bonus compensation for its CEO and CFO of approximately $150,000 and $115,000, respectively. The accrued bonus compensation was unchanged from December 31, 2022.

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SUBSEQUENT EVENTS

3 Months Ended

Mar. 31, 2023

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

NOTE 7 – SUBSEQUENT EVENTS

From April to May 2023, the Company entered into four 14% convertible note payable agreements with proceeds totaling $700,000. The convertible notes, which have identical terms, require quarterly interest payments with the principal due at maturity eighteen months from issuances and are convertible at $3.20 per share of common stock. The conversion features were valued at $93,549 and recorded as a derivative liability pursuant to the Company’s contract ordering policy. In connection with the convertible notes, the Company issued a total of 1,400,000 warrants to purchase shares of common stock exercisable at $0.85 per share. The warrants, which were immediately vested, were valued at $932,739 and recorded as a derivative liability pursuant to the Company’s contract ordering policy. As a result of the derivative liabilities, the Company recorded additional debt discounts totaling $700,000.

From April to May 2023, the Company issued 150,000 options to purchase shares of common stock exercisable at prices ranging from $0.54 to $0.572 per share. The options, which vest over 36 months, were valued at $105,796.

During April 2023, the Company entered into a consulting agreement. Pursuant to the consulting agreement, the Company issued 500,000 shares of common stock valued at $425,000. 125,000 shares vested immediately, with the remaining 375,000 shares vested over 24 months.

During April 2023, the Company paid $6,995 in accrued interest due to four noteholders by issuing 7,661 shares of common stock. Included in these shares were 1,350 shares issued to the wife of the Company’s CEO and 2,815 shares issued to the Company’s CEO.

During April 2023, the Company issued 58,496 warrants to purchase shares of common stock exercisable at $0.85 per share for two years. The warrants, which were immediately vested, were valued at $47,858.  

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

Mar. 31, 2023

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant inter-company transactions and balances have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments and other short-term investments with maturity of three months or less, when purchased, to be cash equivalents. There were no cash equivalents as of March 31, 2023 and December 31, 2022.

The Company maintains its cash balances at financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”). The FDIC provides coverage of up to $250,000 per depositor, per financial institution, for the aggregate total of depositors’ interest and non-interest-bearing accounts. At March 31, 2023, approximately $280,000 of the Company’s cash balances were in excess of FDIC limits. The Company has not experienced any losses on these accounts and management does not believe that the Company is exposed to any significant risks.

Accounts Receivable

Accounts receivable consists of invoiced and unpaid sales. The Company records an allowance for doubtful accounts to allow for any amounts that may not be recoverable, which is based on an analysis of the Company’s prior collection experience, customer credit worthiness, and current economic trends. Accounts are considered delinquent when payments have not been received within the agreed upon terms and are written off when management determines that collection is not probable. As of March 31, 2023 and December 31, 2022, the Company’s allowance for doubtful accounts was $90,189.

Intangible Assets

Intangible assets are amortized over their estimated useful lives. Each period, the Company evaluates the estimated remaining useful life of its intangible assets and whether events or changes in circumstances warrant a revision to the remaining period of amortization. Management tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets.

Impairment Assessment

The Company evaluates intangible assets and other long-lived assets for possible impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. This includes but is not limited to significant adverse changes in business climate, market conditions or other events that indicate an asset's carrying amount may not be recoverable. Recoverability of these assets is measured by comparing the carrying amount of each asset to the future cash flows the asset is expected to generate. If the cash flows used in the test for recoverability are less than the carrying amount of these assets, the carrying amount of such assets is reduced to fair value.

The Company evaluates and tests the recoverability of its goodwill for impairment at least annually during its fourth quarter of each fiscal year or more often if and when circumstances indicate that goodwill may not be recoverable.

Revenue Recognition

The Company accounts for revenue in accordance with FASB ASC 606, Revenue from Contracts with Customers.

A performance obligation is a promise in a contract to transfer a distinct good or service to the client and is the unit of accounting in ASC 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation based on the relative standalone selling price. Determining relative standalone selling price and identifying separate performance obligations requires judgment. Contract modifications may occur in the performance of the Company’s contracts. Contracts may be modified to account for changes in the contract specifications, requirements or duration. If a contract modification results in the addition of performance obligations priced at a standalone selling price or if the post-modification services are distinct from the services provided prior to the modification, the modification is accounted for separately. If the modified services are not distinct, they are accounted for as part of the existing contract.

The Company’s revenues are derived from contracts for engineering, procurement and construction services (“EPC”) and consulting. These contracts may have different terms based on the scope, performance obligations and complexity of the engagement, which may require us to make judgments and estimates in recognizing revenues.

The Company’s performance obligations are satisfied as work progresses or at a point in time (for defined milestones). The selection of the method to measure progress towards completion requires judgment and is based on the contract and the nature of the services to be provided.

The Company’s contracts for consulting services are typically less than a year in duration and require us to a) assist the client in achieving certain defined milestones for milestone fees or b) provide a series of distinct services each period over the contract term for a pre-determined fee for each period. When contractual billings represent an amount that corresponds directly with the value provided to the client, revenues are recognized as amounts become billable in accordance with contract terms.

The Company’s contracts for EPC services are typically less than a year in duration and require us to a) provide engineering services, b) obtain materials, and c) install materials to agreed-upon specifications. The Company recognizes revenues for engineering services as the services are provided. Revenues for materials are recognized as materials are transferred to the client. Installation results in enhancements to customer-controlled assets and therefore installation revenues are recognized over time utilizing the input method wherein revenues are recognized on the basis of efforts or inputs to the satisfaction of the performance obligation.

Financial Instruments

The Company’s financial instruments include cash and cash equivalents, receivables, payables, and debt and are accounted for under the provisions of ASC Topic 825, “Financial Instruments”. The carrying amount of these financial instruments, with the exception of discounted debt, as reflected in the accompanying condensed consolidated balance sheets approximates fair value.

Fair Value Measurement

ASC Topic 820, “Fair Value Measurement”, requires that certain financial instruments be recognized at their fair values at our condensed consolidated balance sheet dates. However, other financial instruments, such as debt obligations, are not required to be recognized at their fair values, but GAAP provides an option to elect fair value accounting for these instruments. GAAP requires the disclosure of the fair values of all financial instruments, regardless of whether they are recognized at their fair values or carrying amounts in our condensed consolidated balance sheets. For financial instruments recognized at fair value, GAAP requires the disclosure of their fair values by type of instrument, along with other information, including changes in the fair values of certain financial instruments recognized in income or other comprehensive income. For financial instruments not recognized at fair value, the disclosure of their fair values is provided below under “Financial Instruments.”

Nonfinancial assets, such as property, plant and equipment, and nonfinancial liabilities are recognized at their carrying amounts in the Company’s condensed consolidated balance sheets. GAAP does not permit nonfinancial assets and liabilities to be remeasured at their fair values. However, GAAP requires the remeasurement of such assets and liabilities to their fair values upon the occurrence of certain events, such as the impairment of property, plant and equipment. In addition, if such an event occurs, GAAP requires the disclosure of the fair value of the asset or liability along with other information, including the gain or loss recognized in income in the period the remeasurement occurred.

Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities;

Level 2 – Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; or

Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

The Company did not have any Level 1 or Level 2 assets and liabilities at March 31, 2023 or December 31, 2022. The Derivative liabilities are Level 3 fair value measurements.

The following is a summary of activity of Level 3 liabilities during the three months ended March 31, 2023:

Balance – December 31, 2022	$	722,328
Additions		7,172,944
Settlement		(50,582	)
Change in fair value		(2,487,120	)
Balance – March 31, 2023	$	5,357,570

Under the Company’s contract ordering policy, the Company first considers common shares issued and outstanding as well as reserved but unissued equity awards, such as under an equity award program. All remaining equity linked instruments such as, but not limited to, options, warrants, and debt and equity with conversion features are evaluated based on the date of issuance. If the number of shares which may be issued under the Company’s agreements exceed the authorized number of shares or are unable to be determined, equity linked instruments from that date forward are considered to be derivative liabilities until such time as the number of shares which may be issued under the Company’s agreements no longer exceed the authorized number of shares and are able to be determined.

On November 7, 2022 and December 21, 2022, the Company issued note payable agreements which contain default provisions that contain a conversion feature meeting the definition of a derivative liability which therefore require bifurcation. Further, pursuant to the Company’s contract ordering policy, the warrant and convertible note issuances subsequent to November 7, 2022, resulted in derivative liabilities.

At December 31, 2022, the Company estimated the fair value of the conversion feature derivatives embedded in the notes payable and warrants based on assumptions used in the Cox-Ross-Rubinstein binomial pricing model using the following inputs: the price of the Company’s common stock of $1.06; risk-free interest rates ranging from 4.41% to 4.73%; expected volatility of the Company’s common stock ranging from 164% to 379%; exercise prices of $1.00; and terms from one to two years.

At March 31, 2023, the Company estimated the fair value of the conversion feature derivatives embedded in the notes payable, convertible notes payable and warrants based on assumptions used in the Cox-Ross-Rubinstein binomial pricing model using the following inputs: the price of the Company’s common stock of $0.70; risk-free interest rates ranging from 3.60% to 4.94%; expected volatility of the Company’s common stock ranging from 97% to 305%; exercise prices ranging from $0.46 to $3.20; and terms ranging from six months to five years.

Commitments and Contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties and other sources are recorded when management assesses that it is probable that a liability has been incurred and the amount can be reasonably estimated.

Income Taxes

In accordance with FASB ASC Topic 740, "Income Taxes," the Company provides for the recognition of deferred tax assets if realization of such assets is more likely than not. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax basis of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities.

In addition, the Company’s management performs an evaluation of all uncertain income tax positions taken or expected to be taken in the course of preparing the Company’s income tax returns to determine whether the income tax positions meet a “more likely than not” standard of being sustained under examination by the applicable taxing authorities. This evaluation is required to be performed for all open tax years, as defined by the various statutes of limitations, for federal and state purposes. If the Company has interest or penalties associated with insufficient taxes paid, such expenses are reported in income tax expense.

Basic and Diluted Loss Per Share

FASB ASC Topic 260, “Earnings Per Share”, requires a reconciliation of the numerator and denominator of the basic and diluted earnings (loss) per share (“EPS”) computations.

Basic earnings (loss) per share are computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive.

The Company had potential additional dilutive securities outstanding at March 31, 2023 and 2022, as follows.

	March 31,		March 31,
	2023		2022
Options		5,784,068		3,059,068
Warrants		10,517,758		2,700,000
Notes payable		877,897		-
Convertible notes payable		564,048		-
		17,743,771		5,759,068

Going Concern

The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Company has incurred losses since inception and has not generated positive cash flows from operations. These matters, among others, raise substantial doubt about the Company's ability to continue as a going concern.

The Company’s ability to continue in existence is dependent on its ability to develop additional sources of capital, and/or achieve profitable operations and positive cash flows. Management’s plans with respect to operations include aggressive marketing, acquisitions, and raising additional capital through sales of equity or debt securities as may be necessary to pursue its business plans and sustain operations until such time as the Company can achieve profitability. Management believes that aggressive marketing combined with acquisitions and additional financing as necessary will result in improved operations and cash flow in 2023 and beyond. However, there can be no assurance that management will be successful in obtaining additional funding or in attaining profitable operations. The accompanying condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Recently Issued Accounting Standards

During the period ended March 31, 2023, there were several new accounting pronouncements issued by the 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 condensed consolidated financial statements.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

3 Months Ended

Mar. 31, 2023

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Fair Value Measurement

Balance – December 31, 2022	$	722,328
Additions		7,172,944
Settlement		(50,582	)
Change in fair value		(2,487,120	)
Balance – March 31, 2023	$	5,357,570

potential additional dilutive securities outstanding

	March 31,		March 31,
	2023		2022
Options		5,784,068		3,059,068
Warrants		10,517,758		2,700,000
Notes payable		877,897		-
Convertible notes payable		564,048		-
		17,743,771		5,759,068

XML

DEBT (Tables)

3 Months Ended

Mar. 31, 2023

DEBT

summary of the Company's convertible notes payable

						Balances - At Issuance				Balances - 3/31/2023
Origination	Maturity	Interest			Conversion Rate	Principal		Discount		Principal		Discount
1/24/2023	7/24/2024		14	%	$3.20/Share	$	100,000	$	100,000	$	100,000	$	87,888
1/25/2023	7/25/2024		14	%	$3.20/Share		74,975		74,975		74,975		66,145
1/30/2023	7/30/2024		14	%	$3.20/Share		100,000		100,000		100,000		88,888
2/17/2023	8/17/2024		14	%	$3.20/Share		1,000,000		1,000,000		1,000,000		916,666
3/7/2023	9/7/2024		14	%	$3.20/Share		100,000		100,000		100,000		96,000
3/14/2023	9/10/2024		14	%	$3.20/Share		250,000		250,000		250,000		243,000
3/27/2023	9/27/2024		14	%	$3.20/Share		100,000		100,000		100,000		99,500
3/30/2023	9/30/2024		14	%	$3.20/Share		79,975		79,975		79,975		79,975
										$	1,804,950	$	1,678,062

summary of the Company's notes payable

					Balances - At Issuance				Balances - 3/31/2023
Origination	Maturity	Interest			Principal		Discount		Principal		Discount
5/29/2020	3/31/2050		4	%	$	20,400	$	-	$	20,400	$	-
7/29/2022	1/29/2024		10	%		50,000		29,664		50,000		16,480
8/11/2022	2/11/2024		10	%		150,000		88,247		150,000		51,476
8/15/2022	2/15/2024		10	%		50,000		29,513		50,000		17,213
8/31/2022	2/28/2024		10	%		80,000		45,827		80,000		28,005
9/1/2022	3/1/2024		10	%		50,000		29,922		50,000		18,288
9/7/2022	3/7/2024		10	%		50,000		29,922		50,000		18,288
9/12/2022	3/12/2024		10	%		50,000		30,316		50,000		19,370
9/29/2022	3/29/2024		10	%		100,000		59,839		100,000		39,893
11/7/2022	11/7/2023		7	%		200,000		220,000		188,320		137,497
11/9/2022	5/9/2024		10	%		25,000		25,000		25,000		18,750
11/15/2022	5/15/2024		10	%		100,000		100,000		100,000		74,999
12/21/2022	12/21/2023		7	%		200,000		220,000		211,860		155,831
1/11/2023	10/11/2023		14	%		1,563,929		1,563,929		1,563,929		1,129,504
									$	2,689,509	$	1,725,594

					Balances - At Issuance				Balances - 12/31/2022
Origination	Maturity	Interest			Principal		Discount		Principal		Discount
5/29/2020	3/31/2050		4	%	$	20,400	$	-	$	20,400	$	-
1/11/2022	1/11/2023		10	%		1,350,000		934,128		1,485,000		38,922
7/29/2022	1/29/2024		10	%		50,000		29,664		50,000		21,424
8/11/2022	2/11/2024		10	%		150,000		88,247		150,000		66,185
8/15/2022	2/15/2024		10	%		50,000		29,513		50,000		22,133
8/31/2022	2/28/2024		10	%		80,000		45,827		80,000		35,643
9/1/2022	3/1/2024		10	%		50,000		29,922		50,000		23,274
9/7/2022	3/7/2024		10	%		50,000		29,922		50,000		23,274
9/12/2022	3/12/2024		10	%		50,000		30,316		50,000		24,422
9/29/2022	3/29/2024		10	%		100,000		59,839		100,000		49,866
11/7/2022	11/7/2023		7	%		200,000		220,000		235,400		192,499
11/9/2022	5/9/2024		10	%		25,000		25,000		25,000		22,917
11/15/2022	5/15/2024		10	%		100,000		100,000		100,000		91,667
12/21/2022	12/21/2023		7	%		200,000		220,000		235,400		210,833
									$	2,681,200	$	823,059

summarizes future maturities

December 31,	Amount
2023	$	1,994,109
2024		2,509,950
2025		-
2026		-
2027		-
Thereafter		20,400
		4,524,459
Less - Discounts		(3,403,656	)
	$	1,120,803

XML

EQUITY (Tables)

3 Months Ended

Mar. 31, 2023

EQUITY

Company's warrants

	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Life (in years)
Warrants as of December 31, 2022		3,780,000	$	0.48		0.87
Issued		6,737,758	$	0.85		3.39
Exercised		-	$	-		-
Warrants as of March 31, 2023		10,517,758	$	0.72		2.30

Company's options

	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Life (in years)
Options as of December 31, 2022		5,284,068	$	0.80		4.17
Issued		500,000	$	0.99		5.00
Exercised		-	$	-		-
Options as of March 31, 2023		5,784,068	$	0.82		4.01

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)	3 Months Ended
	Mar. 31, 2023 USD ($)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Balance	$ 722,328
Additions	7,172,944
Settlement	(50,582)
Change in fair value	(2,487,120)
Balance at end	$ 5,357,570

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Options	5,784,068	3,059,068
Warrants	10,517,758	2,700,000
Notes payable	877,897
Convertible notes payable	$ 564,048	$ 0
Dilutive Securities	17,743,771	5,759,068

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
FDIC coverage amount	$ 250,000
FDIC cash balances limits	280,000
Allowance for doubtful accounts	$ 90,189		$ 90,189
Share price	$ 0.70		$ 1.06
Risk-free interest rate, minimum	3.60%	4.41%
Risk-free interest rate, maximum	4.94%	4.73%
Expected volatility rate, minimum	97.00%	164.00%
Expected volatility rate, maximum	305.00%	379.00%
Exercise prices			$ 1.00
Expected term	six months to five years	one to two years
Minimum [Member]
Exercise prices	$ 0.46
Maximum [Member]
Exercise prices	$ 3.20

XML

DEBT (Details) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Principal	$ 2,689,509	$ 2,681,200
Convertible Notes Payable [Member]
Principal amount	100,000
Debt Discount	100,000
Principal	100,000
Discount	$ 87,888
Origination date	Jan. 24, 2023
Maturity date	Jul. 24, 2024
Interest Rate	14.00%
Conversion Rate	$ 3.20
Convertible Notes Payable One [Member]
Principal amount	$ 74,975
Debt Discount	74,975
Principal	74,975
Discount	$ 66,145
Origination date	Jan. 25, 2023
Maturity date	Jul. 25, 2024
Interest Rate	14.00%
Conversion Rate	$ 3.20
Convertible Notes Payable Two [Member]
Principal amount	$ 100,000
Debt Discount	100,000
Principal	100,000
Discount	$ 88,888
Origination date	Jan. 30, 2023
Maturity date	Jul. 30, 2024
Interest Rate	14.00%
Conversion Rate	$ 3.20
Convertible Notes Payable Three [Member]
Principal amount	$ 1,000,000
Debt Discount	1,000,000
Principal	1,000,000
Discount	$ 916,666
Origination date	Feb. 17, 2023
Maturity date	Aug. 17, 2024
Interest Rate	14.00%
Conversion Rate	$ 3.20
Convertible Notes Payable Four [Member]
Principal amount	$ 100,000
Debt Discount	100,000
Principal	100,000
Discount	$ 96,000
Origination date	Mar. 07, 2023
Maturity date	Sep. 07, 2024
Interest Rate	14.00%
Conversion Rate	$ 3.20
Convertible Notes Payable Five [Member]
Principal amount	$ 250,000
Debt Discount	250,000
Principal	250,000
Discount	$ 243,000
Origination date	Mar. 14, 2023
Maturity date	Sep. 10, 2024
Interest Rate	14.00%
Conversion Rate	$ 3.20
Convertible Notes Payable Six [Member]
Principal amount	$ 100,000
Debt Discount	100,000
Principal	100,000
Discount	$ 99,500
Origination date	Mar. 27, 2023
Maturity date	Sep. 27, 2024
Interest Rate	14.00%
Conversion Rate	$ 3.20
Convertible Notes Payable Seven [Member]
Principal amount	$ 79,975
Debt Discount	79,975
Principal	79,975
Discount	$ 79,975
Origination date	Mar. 30, 2023
Maturity date	Sep. 30, 2024
Interest Rate	14.00%
Conversion Rate	$ 3.20
Convertible Notes Payable Total [Member]
Principal	$ 1,804,950
Discount	$ 1,678,062

XML

DEBT (Details 1) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Principal	$ 2,689,509	$ 2,681,200
Discount	1,725,594	823,059
Notes Payable [Member]
Principal amount	20,400	20,400
Debt Discount	0	0
Principal	20,400	20,400
Discount	$ 0	$ 0
Origination date	May 29, 2020	May 29, 2020
Maturity date	Mar. 31, 2050	Mar. 31, 2050
Interest Rate	4.00%	4.00%
Notes Payable One [Member]
Principal amount	$ 50,000	$ 1,350,000
Debt Discount	29,664	934,128
Principal	50,000	1,485,000
Discount	$ 16,480	$ 38,922
Origination date	Jul. 29, 2022	Jan. 11, 2022
Maturity date	Jan. 29, 2024	Jan. 11, 2023
Interest Rate	10.00%	10.00%
Notes Payable Two [Member]
Principal amount	$ 150,000	$ 50,000
Debt Discount	88,247	29,664
Principal	150,000	50,000
Discount	$ 51,476	$ 21,424
Origination date	Aug. 11, 2022	Jul. 29, 2022
Maturity date	Feb. 11, 2024	Jan. 29, 2024
Interest Rate	10.00%	10.00%
Notes Payable Four [Member]
Principal amount	$ 80,000	$ 50,000
Debt Discount	45,827	29,513
Principal	80,000	50,000
Discount	$ 28,005	$ 22,133
Origination date	Aug. 31, 2022	Aug. 15, 2022
Maturity date	Feb. 28, 2024	Feb. 15, 2024
Interest Rate	10.00%	10.00%
Notes Payable Three [Member]
Principal amount	$ 50,000	$ 150,000
Debt Discount	29,513	88,247
Principal	50,000	150,000
Discount	$ 17,213	$ 66,185
Origination date	Aug. 15, 2022	Aug. 11, 2022
Maturity date	Feb. 15, 2024	Feb. 11, 2024
Interest Rate	10.00%	10.00%
Notes Payable Six [Member]
Principal amount	$ 50,000	$ 50,000
Debt Discount	29,922	29,922
Principal	50,000	50,000
Discount	$ 18,288	$ 23,274
Origination date	Sep. 07, 2022	Sep. 01, 2022
Maturity date	Mar. 07, 2024	Mar. 01, 2024
Interest Rate	10.00%	10.00%
Notes Payable Seven [Member]
Principal amount	$ 50,000	$ 50,000
Debt Discount	30,316	29,922
Principal	50,000	50,000
Discount	$ 19,370	$ 23,274
Origination date	Sep. 12, 2022	Sep. 07, 2022
Maturity date	Mar. 12, 2024	Mar. 07, 2024
Interest Rate	10.00%	10.00%
Notes Payable Five [Member]
Principal amount	$ 50,000	$ 80,000
Debt Discount	29,922	45,827
Principal	50,000	80,000
Discount	$ 18,288	$ 35,643
Origination date	Sep. 01, 2022	Aug. 31, 2022
Maturity date	Mar. 01, 2024	Feb. 28, 2024
Interest Rate	10.00%	10.00%
Notes Payable Eight [Member]
Principal amount	$ 100,000	$ 50,000
Debt Discount	59,839	30,316
Principal	100,000	50,000
Discount	$ 39,893	$ 24,422
Origination date	Sep. 29, 2022	Sep. 12, 2022
Maturity date	Mar. 29, 2024	Mar. 12, 2024
Interest Rate	10.00%	10.00%
Notes Payable Nine [Member]
Principal amount	$ 200,000	$ 100,000
Debt Discount	220,000	59,839
Principal	188,320	100,000
Discount	$ 137,497	$ 49,866
Origination date	Nov. 07, 2022	Sep. 29, 2022
Maturity date	Nov. 07, 2023	Mar. 29, 2024
Interest Rate	7.00%	10.00%
Notes Payable Twelve [Member]
Principal amount	$ 200,000	$ 100,000
Debt Discount	220,000	100,000
Principal	211,860	100,000
Discount	$ 155,831	$ 91,667
Origination date	Dec. 21, 2022	Nov. 15, 2022
Maturity date	Dec. 21, 2023	May 15, 2024
Interest Rate	7.00%	10.00%
Notes Payable Ten [Member]
Principal amount	$ 25,000	$ 200,000
Debt Discount	25,000	220,000
Principal	25,000	235,400
Discount	$ 18,750	$ 192,499
Origination date	Nov. 09, 2022	Nov. 07, 2022
Maturity date	May 09, 2024	Nov. 07, 2023
Interest Rate	10.00%	7.00%
Notes Payable Eleven [Member]
Principal amount	$ 100,000	$ 25,000
Debt Discount	100,000	25,000
Principal	100,000	25,000
Discount	$ 74,999	$ 22,917
Origination date	Nov. 15, 2022	Nov. 09, 2022
Maturity date	May 15, 2024	May 09, 2024
Interest Rate	10.00%	10.00%
Notes Payable Thirteen [Member]
Principal amount	$ 1,563,929	$ 200,000
Debt Discount	1,563,929	220,000
Principal	1,563,929	235,400
Discount	$ 1,129,504	$ 210,833
Origination date	Jan. 11, 2023	Dec. 21, 2022
Maturity date	Oct. 11, 2023	Dec. 21, 2023
Interest Rate	14.00%	7.00%

XML

DEBT (Details 2)	Mar. 31, 2023 USD ($)
DEBT
2023	$ 1,994,109
2024	2,509,950
2025	0
2026	0
2027	0
Thereafter	20,400
Future maturity	4,524,459
Less - Discounts	(3,403,656)
Net future maturity	$ 1,120,803

XML

DEBT (Details Narrative) - USD ($)		1 Months Ended	3 Months Ended
	Jan. 11, 2023	May 29, 2020	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022	Oct. 03, 2014
Note Interest Rate		3.75%				8.00%
Exercisable price per share			$ 0.70		$ 1.06
Line of credit			$ 30,000		$ 30,000	$ 30,000
Loans Received		$ 20,400
Maturity note		March 2050
Description of Monthly payments		The note requires $100 monthly payments beginning in May 2022 until maturity
Fair value outstanding amount			30,200		$ 42,130
Issuance of debt discount			$ 3,808,565	$ 0
P C Ventures [Member]
Exercisable price per share	$ 0.85
Accrued and unpaid interest	$ 78,929
Warrants purchase shares	3,127,858
Additional debt discount	$ 1,563,929
Note payable balance	$ 1,563,929
Interest rate	14.00%
Warrants vested, value	$ 3,309,045
On January 11, 2022 [Member]
Note Interest Rate			10.00%
Convertible notes payable			$ 1,485,000
Issuance of debt discount			$ 135,000
Description of short term debt			quarterly interest payments with the principal due at maturity on January 11, 2023
From January 24, 2023 to March 30, 2023 [Member]
Note Interest Rate			14.00%
Convertible notes payable			$ 1,804,950
Description of short term debt			The convertible notes, which have identical terms, require quarterly interest payments with the principal due at maturity eighteen months from issuances and are convertible at $3.20 per share of common stock
Description of warrants			the Company issued a total of 3,609,900 warrants to purchase shares of common stock exercisable at $0.85 per share
Additional discount on debt			$ 3,505,723
Derivative liability values			358,176
Derivative liability values vested			$ 3,505,723
From January 24, 2023 to March 30, 2023 [Member] | CEO Member
Note Interest Rate			14.00%
Convertible notes payable			$ 100,000
Description of short term debt			The convertible note requires quarterly interest payments with the principal due at maturity eighteen months from issuance and is convertible at $3.20 per share of common stock
Description of warrants			the Company issued 200,000 warrants to purchase shares of common stock exercisable at $0.85 per share
Fair value of warrants			$ 209,180
Issue of warrants			200,000
Additional discount on debt			$ 100,000
Derivative liability values			$ 22,569

XML

EQUITY (Details) - Company Warrants [Member]	3 Months Ended
	Mar. 31, 2023 $ / shares shares
Warrants, Number of Shares begnning | shares	3,780,000
Warrants, Number of Shares ending | shares	10,517,758
Issued | shares	6,737,758
Warrants, Weighted Average Exercise Price begnning | $ / shares	$ 0.48
Warrants, Weighted Average Exercise Price ending | $ / shares	0.72
Issued in Period, Weighted Average Exercise Price | $ / shares	$ 0.85
Issued, Weighted average remaining life	3 years 4 months 20 days
Warrants,Weighted Average Remaining Life ending	2 years 3 months 18 days
Warrants,Weighted Average Remaining Life beginning	10 months 13 days

XML

EQUITY (Details 1) - Company Options [Member]	3 Months Ended
	Mar. 31, 2023 $ / shares shares
Warrants, Number of Shares begnning | shares	5,284,068
Issued | shares	500,000
Warrants, Number of Shares ending | shares	5,784,068
Warrants, Weighted Average Exercise Price begnning | $ / shares	$ 0.80
Issued, Weighted Average Exercise Price | $ / shares	0.99
Warrants, Weighted Average Exercise Price ending | $ / shares	$ 0.82
Options, Weighted Average Remaining Life beginning	4 years 2 months 1 day
Options, Weighted Average Remaining Life ending	5 years
Issued, Weighted average remaining life	4 years 3 days

XML

EQUITY (Details Narrative) - USD ($)		1 Months Ended		2 Months Ended	3 Months Ended
	Jan. 11, 2023	Jan. 31, 2023	Oct. 31, 2022	Mar. 30, 2023	Mar. 31, 2023	Mar. 31, 2022
Shares of common Stock issued		4,245			17,045
Shares value of common Stock issued		$ 4,500			$ 15,000
Vested, number of shares					3,153,265
Warrant issued value			$ 119,383		$ 2,167,081
Warrants issued					5,655
Accrued interest					$ 7,589
Options to purchase shares					2,630,803
Risk free interest rate, maximum					4.94%	4.73%
Risk free interest rate, minimum					3.60%	4.41%
Expected volatility rate, minimum					97.00%	164.00%
Expected volatility rate, maximum					305.00%	379.00%
Five NonExcecutive Agreement [Member]
Stock issued options					500,000
Stock issued option, value					$ 448,950
Exercise price					$ 0.99
Options [Member]
Risk free interest rate					4.27%
Expected volatility rate					277.00%
Fair value assumptions, expected term					5 years
Exercise price					$ 0.99
Warrants [Member]
Risk free interest rate, maximum					5.00%
Risk free interest rate, minimum					3.66%
Expected volatility rate, minimum					278.00%
Expected volatility rate, maximum					346.00%
Exercise price					$ 0.85
Warrants [Member] | Minimum [Member]
Fair value assumptions, expected term					24 months
Warrants [Member] | Maximum [Member]
Fair value assumptions, expected term					60 months
Note Agreement [Member]
Warrant issued value	$ 3,309,000			$ 3,506,000
Warrants purchase shares				200,000
Warrants issued	3,127,858			3,609,900

XML

RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)	1 Months Ended	3 Months Ended		12 Months Ended
	Oct. 31, 2022	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Warrant issued, value	$ 119,383	$ 2,167,081
Advances payable		1,049,872		$ 1,069,743
Operating expenses		1,208,148	$ 773,528
Loutex Production Company [Member]
Advances payable		73,000		$ 73,000
CEO [Member]
Warrant issued, value		209,000
Common stock percentage held				10.00%
Consulting expenses		100,000
Advances payable		$ 22,154		$ 22,154
Warrant issued		200,000
Accrued bonus compensation		$ 150,000
CFO [Member]
Accrued bonus compensation		115,000
P C Ventures [Member]
Advances payable		20,000
Operating expenses		$ 20,000
Three Percent Holder [Member]
Common stock percentage held, description		individual who holds less than 5% of the Company’s common stock
Advances payable		$ 11,865		$ 11,865
Largest Shareholder [Member]
Common stock percentage held		31.00%		31.00%
Advances payable		$ 62,500		$ 62,500
Elysian Fields Disposal [Member]
Advances payable		259,000		256,000
Operating expenses		3,000
Michaels Consulting [Member]
Advances payable		$ 344,000		$ 344,000

XML

SUBSEQUENT EVENTS (Details Narrative) - USD ($)	1 Months Ended		3 Months Ended
	May 31, 2023	Apr. 30, 2023	Mar. 31, 2023	Dec. 31, 2022
Exercisable price per share			$ 0.70	$ 1.06
Options to purchase shares			2,630,803
Accrued interest			$ 7,589
Subsequent Event [Member]
Exercisable price per share		$ 3.20
Convertible note terms, description		quarterly interest payments with the principal due at maturity eighteen months from issuances
Warrants to purchase shares		500,000
Exercise price of shares	$ 0.85	$ 0.572
Warrants vested, value		$ 425,000
Additional debt discount		$ 93,549
Stock issued options	58,496	1,350
Subsequent Event [Member] | 14% Convertible Note Payable [Member]
Exercisable price per share		$ 0.85
Options to purchase shares		150,000
Warrants to purchase shares		1,400,000
Options vested, value		$ 105,796
Exercise price of shares		$ 0.572
Warrants vested, value		$ 932,739
Proceeds from convertible note payable		$ 700,000
Subsequent Event [Member] | CEO [Member]
Stock issued options	30,637
Subsequent Event [Member] | CFO [Member]
Stock issued options	14,706
Subsequent Event [Member] | Director [Member]
Stock issued options	18,382
Four Noteholders [Member] | Subsequent Event [Member]
Stock issued options		7,661
Accrued interest		$ 6,995
Four Noteholders [Member] | Subsequent Event [Member] | CEO [Member]
Stock issued options		2,815
Four Noteholders [Member] | Subsequent Event [Member] | CEO's Wife [Member]
Stock issued options		1,350