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: September 30, 2022

Commission File Number: 000-56256

SOLAR INTEGRATED ROOFING CORP.

(Exact name of registrant as specified in its charter)

Nevada	90-1502972
(State or other jurisdiction of incorporation or organization)	(I.R.S. EIN)

2831 St. Rose Parkway, Ste 200

Henderson, Nevada 89052

(Address of principal executive offices, Zip Code)

(702) 589-4651

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None.

Title of each class	Trading Symbol	Name of each exchange on which registered
Not applicable.

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

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 ☒

As of November 18, 2022, the registrant had 625,898,657 shares of common stock outstanding.

SOLAR INTEGRATED ROOFING CORP.

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements	3
	Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021 (unaudited)	3
	Consolidated Statements of Operations for the three months and nine months ended September 30, 2022 and 2021 (unaudited)	4
	Consolidated Statements of Stockholders’ Equity for the three months and nine months ended September 30, 2022 and 2021 (unaudited)	5
	Consolidated Statements of Cash Flows for the nine months ended September 30, 2022 and 2021 (unaudited)	6
	Notes to Consolidated Financial Statements (unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35
Item 4.	Controls and Procedures	35
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	35
Item 1A	Risk Factors	35
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 3.	Defaults Upon Senior Securities	37
Item 4.	Mine Safety Disclosures	37
Item 5.	Other Information	37
Item 6.	Exhibits	38
SIGNATURES		40

2

PART I. FINANCIAL INFORMATION

SOLAR INTEGRATED ROOFING CORP.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	September 30,			December 31,
	2022			2021
ASSETS
Cash	$	480,141		$	1,124,533
Accounts receivable, net		5,511,696			3,652,176
Work in progress receivable, net		76,976,192			33,242,296
Note receivable		4,200,000			4,200,000
Prepaid and other current assets		273,826			736,548
Inventory		151,363			142,955
TOTAL CURRENT ASSETS		87,593,218			43,098,508
OTHER ASSETS
Operating lease right-of-use assets		2,888,171			1,646,049
Property and equipment, net		1,004,016			1,122,057
Goodwill		62,047,800			58,401,851
Other assets		154,390			265,071
TOTAL ASSETS		153,687,595			104,533,536
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities	$	8,516,321		$	7,984,710
Accrued interest		1,519,387			1,157,113
Due to related parties		11,204,126			11,510,413
Operating lease liabilities, current portion		504,981			115,623
Notes payable		21,955,667			5,112,773
Debenture payable		2,400,000			2,400,000
Convertible note payable, net of unamortized discounts		10,684,800			23,688,886
Derivative liabilities		53,295			10,049
Total Current Liabilities		56,838,577			51,979,567
OTHER LIABILITIES
Note payable, long-term		2,273,531			2,426,698
Operating lease liabilities, non-current portion		2,383,190			1,530,426
TOTAL LIABILITIES		61,495,298			55,936,691
COMMITMENTS AND CONTINGENCIES (Note 13)
STOCKHOLDER’S EQUITY
Preferred stock, $0.00001 par value: authorized 25,000,041 shares		—			—
Series A Preferred stock, $0.00001 par value: 5,000,000 shares authorized, 2,500,000 shares issued and outstanding, respectively		25			25
Series B Preferred stock, $0.00001 par value: 20,000,000 shares authorized, 5,701,000 and 8,000,000 shares issued and outstanding, respectively		57			80
Series C Preferred stock, $0.00001 par value: 1 share authorized, 1 share issued and outstanding, respectively		-			-
Series D Preferred stock, $0.00001 par value: 40 shares authorized, 40 shares issued and outstanding, respectively		-			-
Common stock, $0.00001 par value: 900,000,000 shares authorized, 542,817,941 and 453,498,555 shares issued and outstanding, respectively		5,428			4,535
Stock payable		2,652,300			11,790,200
Stock receivable		-			(36,450,000	)
Additional paid-in capital		59,570,943			74,087,246
Non-controlling interest		(415,389	)		(60,487	)
Retained earnings (accumulated deficit)		30,378,933			(774,754	)
TOTAL STOCKHOLDER’S EQUITY		92,192,297			48,596,845
TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY	$	153,687,595		$	104,533,536
The accompanying notes are an integral part of these consolidated unaudited financial statements

3

SOLAR INTEGRATED ROOFING CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2022			2021			2022			2021
Revenue	$	57,267,460		$	13,224,759		$	150,541,535		$	24,674,807
Cost of Sales		43,071,432			8,418,340			94,558,164			19,484,806
Gross Profit		14,196,028			4,806,419			55,983,371			5,190,001
Operating expenses
Salaries and wages		3,989,043			2,863,858			12,437,116			5,488,167
Professional fees		1,400,473			1,585,673			4,499,397			4,474,413
Depreciation expense		69,807			222,613			277,601			303,982
Marketing		186,093			229,259			445,828			575,038
General and administrative		1,179,561			1,275,383			3,768,121			3,136,619
Total operating expenses		6,824,977			6,176,786			21,428,063			13,978,219
Income (loss) from operations		7,371,051			(1,370,367	)		34,555,308			(8,788,218	)
Other income (expense)
Interest expense		(1,077,710	)		(586,638	)		(2,190,637	)		(949,454	)
Other income (expense)		-			(108,489	)		(253,707	)		90,793
PPP loans forgiveness		-			20,830			-			1,018,130
Loss on debt modification		-			-			(1,268,933	)		-
Gain (loss) on change in fair value of derivative liabilities		(53,295	)		359,009			(43,246	)		1,285,675
Total other income (expense)		(1,131,005	)		(315,288	)		(3,756,523	)		1,445,144
Income (loss) before taxes		6,240,046			(1,685,655	)		30,798,785			(7,343,074	)
Provision for income taxes		-			-			-			-
Net income (loss)		6,240,046			(1,685,655	)		30,798,785			(7,343,074	)
Net income (loss) attributable to non-controlling interest		(331,918	)		(24,233	)		(354,902	)		(40,415	)
Net income (loss) attributable to the Company	$	6,571,964			(1,661,422	)	$	31,153,687			(7,302,659	)
Basic income (loss) per Common Share	$	0.01		$	(0.00	)	$	0.06		$	(0.02	)
Diluted income (loss) per Common Share	$	0.01		$	(0.00	)	$	0.06		$	(0.02	)
Basic weighted average number of common shares outstanding		539,902,975			378,468,171			502,470,756			343,348,974
Diluted weighted average number of common shares outstanding		616,917,439			481,083,476			579,485,220			445,964,279

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

4

SOLAR INTEGRATED ROOFING CORP.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021

(Unaudited)

	Series A Preferred Stock				Series B Preferred Stock						Series C Preferred Stock				Series D Preferred Stock				Common Stock						Additional									Non
	Shares Outstanding		Amount		Shares Outstanding			Amount			Shares Outstanding		Amount		Shares Outstanding		Amount		Shares			Amount			Paid in  Capital			Stock  Receivable			Stock  Payable			controlling  Interest			Accumulated  Deficit			Total
Balance, December 31, 2020		5,000,000	$	50		13,000,000		$	130			-	$	-		-	$	-		209,003,623		$	2,090		$	11,808,329		$	-		$	-		$	-		$	(14,835,507	)	$	(3,024,908	)
Common stock issued for services		-		-		-			-											500,000			5			54,995												-			55,000
Common stock issued for conversion of debt and interest		-		-		-			-											49,393,025			494			617,192			-						-			-			617,686
Common stock issued for cash		-		-		-			-											2,000,000			20			139,980			-						-			-			140,000
Common stock issued for compensation		-		-		-			-											1,850,000			18			283,482												-			283,500
Common stock issued for warrant exercise		-		-		-			-											306,148			3			(3	)											-			-
Common stock issued for acquisition		-		-		-			-											45,000,000			450			39,128,050												-			39,128,500
Series B stock to be issued for acquisition																																4,870,000									4,870,000
Non controlling interest		-		-		-			-			-																							11,195			-			11,195
Net loss		-		-		-			-											-			-			-			-						-			(2,282,511	)		(2,282,511	)
Balance, March 31, 2021		5,000,000	$	50		13,000,000		$	130			-	$	-		-	$	-		308,052,796		$	3,080		$	52,032,025		$	-		$	4,870,000		$	11,195		$	(17,118,018	)	$	39,798,462
Common stock issued for services		-		-		-			-											818,090			8			449,992												-			450,000
Common stock issued for conversion of debt and interest		-		-		-			-											30,856,201			309			693,957			-						-			-			694,266
Common stock issued for warrant exercise		-		-		-			-											16,479,564			165			16,315												-			16,480
Common stock issued for acquisition		-		-		-			-																							24,403,900						-			24,403,900
Non controlling interest		-		-		-			-			-																							(27,377	)		-			(27,377	)
Net loss		-		-		-			-											-			-			-			-						-			(3,358,726	)		(3,358,726	)
Balance, June 30, 2021		5,000,000	$	50		13,000,000		$	130			-	$	-		-	$	-		356,206,651		$	3,562		$	53,192,289		$	-		$	29,273,900		$	(16,182	)	$	(20,476,744	)	$	61,977,005
Common stock issued for services		-		-		-			-											250,000			2			140,148															140,150
Common stock issued for conversion of debt and interest		-		-		-			-											10,383,782			104			86,592															86,695
Common stock repurchased and cancelled		-		-		-			-											(200,000	)		(2	)		(99,998	)														(100,000	)
Common stock issued for acquisition																				37,500,000			375			22,530,970						(24,403,900	)								(1,872,555	)
Preferred stock Class B issued for acquisition		-		-		1,000,000			10														-			4,869,990						(4,870,000	)								-
Preferred stock Class B cancelled and retired						(5,000,000	)		(50	)																(9,999,950	)														(10,000,000	)
Preferred stock Class C issued for acquisition		-		-		-			-		1																														-
Preferred stock Class D issued for acquisition																40		-																	-
Non controlling interest		-		-		-			-			-																							(24,233	)					(24,233	)
Net profit		-		-		-			-											-			-			-			-									(1,661,422	)		(1,661,422	)
Balance, September 30, 2021		5,000,000	$	50		9,000,000		$	90		1		$	-		40	$	-		404,140,433		$	4,041		$	70,720,041		$	-		$	-		$	(40,415	)	$	(22,138,166	)	$	48,545,641
Balance, December 31, 2021		2,500,000	$	25		8,000,000		$	80		1		$	-		40	$	-		453,498,555		$	4,535		$	74,087,246		$	(36,450,000	)		11,790,200		$	(60,487	)	$	(774,754	)	$	48,596,845
Common stock issued for services		-		-		-			-											500,000			5			177,895									-			-			177,900
Common stock issued for conversion of debt and interest		-		-		-			-			-		-		-		-		27,075,035			271			26,804									-			-			27,075
Common stock issued for compensation		-		-		-			-											150,000		1				74,024						-			-			-			74,025
Common stock payable for cash																																514,040									514,040
Non controlling interest		-		-		-			-											-															(29,058	)					(29,058	)
Net profit		-		-		-			-			-		-		-		-														-			-			5,693,889			5,693,889
Balance, March 31, 2022		2,500,000	$	25		8,000,000		$	80		1		$	-		40	$	-		481,223,590		$	4,812		$	74,365,969		$	(36,450,000	)	$	12,304,240		$	(89,545	)	$	4,919,135		$	55,054,716
Common stock issued for services		-		-		-			-											1,500,000			15			336,735									-			-			336,750
Common stock issued for conversion of debt and interest		-		-		-			-			-		-		-		-		7,559,285			76			1,058,224									-			-			1,058,300
Common stock issued for compensation		-		-		-			-											4,104,603			41			1,869,736						1,820,387						-			3,690,164
Common stock issued for acquisition																				35,339,242			353			11,229,496						(9,137,900	)								2,091,949
Non controlling interest		-		-		-			-											-															6,074						6,074
Net profit		-		-		-			-			-		-		-		-														-			-			18,887,834			18,887,834
Balance, June 30, 2022		2,500,000	$	25		8,000,000		$	80			1	$	-		40	$	-		529,726,720		$	5,297		$	88,860,160		$	(36,450,000	)	$	4,986,727		$	(83,471	)	$	23,806,969		$	81,125,787
Common stock issued for services		-		-		-			-											200,000			2			98,698									-			-			98,700
Common stock issued for conversion of debt and interest		-		-		-			-			-		-		-		-		25,074,285			251			1,754,949									-			-			1,755,200
Common issued for cash		-		-		-			-			-		-		-		-		3,315,000			33			594,507						(514,040	)		-			-			80,500
Common stock issued for compensation		-		-		-			-											11,111,936			111			2,523,540						(1,820,387	)					-			703,264
Common stock issued for acquisition																				3,400,000			34			781,966															782,000
Common stock returned and cancelled																				(45,000,000	)		(450	)		(36,449,550	)		36,450,000												-
Conversion of preferred stock Class B into common shares						(1,499,000	)		(15	)										14,990,000			150			(135	)														-
Preferred stock cancelled and retired						(800,000	)		(8	)																8															-
Warrant expense																										147,500															147,500
Stock option expense																										1,259,300															1,259,300
Non controlling interest		-		-		-			-																										(331,918	)					(331,918	)
Net profit		-		-		-			-			-		-		-		-																				6,571,964			6,571,964
Balance, September 30, 2022		2,500,000	$	25		5,701,000		$	57			1	$	-		40	$	-		542,817,941		$	5,428		$	59,570,943		$	-		$	2,652,300		$	(415,389	)	$	30,378,933		$	92,192,297

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

5

SOLAR INTEGRATED ROOFING CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the Nine Months Ended
	September 30, 2022			September 30, 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	30,798,785		$	(7,343,074	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Stock-based compensation		3,260,418			928,650
Loss on debt modification		1,268,933			-
Amortization of debt discount		6,724			186,146
(Gain) Loss on change in fair value of derivative liabilities		43,246			(1,285,675	)
Depreciation		277,601			303,982
Warrant expense		147,500			-
Stock option expense		1,259,300			-
PPP loans forgiveness		-			(1,018,130	)
Changes in operating assets and liabilities:
Accounts and work in progress receivable		(45,593,416	)		(2,456,396	)
Prepaid expenses and other assets		462,722			(617,892	)
Inventory		(8,408	)		141,162
Accounts payables and accrued liabilities		2,773,650			1,734,326
Due to related parties		(306,287	)		8,104,145
Net Cash Used in Operating Activities		(5,609,232	)		(1,322,756	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash paid in acquisition of subsidiaries		(600,000	)		(10,100,000	)
Purchase of property and equipment		(159,560	)		(1,112,644	)
Net Cash Used in Investing Activities		(759,560	)		(11,212,644	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable		5,452,105			6,813,218
Repayments of notes payable		(2,762,245	)		(1,841,218	)
Proceeds from convertible notes payable		2,440,000			21,055,610
Proceeds from warrant exercise		-			16,480
Repurchase of preferred stock class B					(10,000,000	)
Repurchase of common stock					(100,000	)
Proceeds from sale of common stock		594,540			140,000
Net Cash Provided by Financing Activities		5,724,400			16,084,090
Net change in cash and cash equivalents		(644,392	)		3,548,690
Cash and cash equivalents, beginning of period		1,124,533			710,091
Cash and cash equivalents, end of period	$	480,141		$	4,258,781
Supplemental cash flow information
Cash paid for interest	$	-		$	-
Cash paid for taxes	$	-		$	-
Non-cash investing and financing transactions:
Issuance of common stock for conversion of debt and accrued interest	$	2,840,575		$	1,398,647
Common stock issued for acquisition of subsidiaries	$	12,011,849		$	63,532,400
Modification of convertible notes in exchange for promissory note	$	14,000,000		$	-
Acquisition of subsidiary via issuance of preferred stock class B	$	-		$	4,870,000
Net assets acquired in acquisition	$	-		$	1,007,535
Assets acquired from financing	$	-		$	54,807
Net assets acquired in acquisitions	$	-		$	866,000
Return and cancellation of common stock	$	36,450,000		$	-
Right-of-use assets and corresponding liabilities on new building leases	$	1,454,939		$	-

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

6

SOLAR INTEGRATED ROOFING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2022

(Unaudited)

NOTE 1 – BACKGROUND AND ORGANIZATION

Business Operations

Solar Integrated Roofing Corporation (“SIRC” or the “Company”) is a fully integrated roofing, residential solar, commercial solar/microgrid, electric vehicle (EV) charging and financing business focused on selling and installing systems, specializing in commercial and residential properties, targeting the North American solar market with specific strength in the Southern California market. Under the SIRC brand, the company has acquired 14 companies that provide specific services to solar customers. The acquired businesses have a high degree of complimentary services and as such, SIRC is setting up divisions to specifically address the strengths of each product offering and provide significant cross selling opportunities across roofing, residential solar, commercial solar/microgrids, EV charging/battery back-up and project financing. To date, the major areas of operations include delivery of installation services, battery storage solutions, electric vehicle charging solutions, and roofing services.

The Company was incorporated under the laws of the state of Nevada on May 1, 2007 as Sterling Oil & Gas Company. The name was changed on February 14, 2014 to Landstar Development Group. On November 9, 2015 the Board of Directors of SIRC approved a name changed to Solar Integrated Roofing Corporation.

On February 11, 2016, the Company acquired the issued and outstanding shares of Secure Roofing and Solar Inc. (“SRS”) whereby the shareholders of SIRC became the controlling shareholders of the combined entity. David Massey held 100% share ownership in SRS and was issued 10,000,000 common shares of SIRC for 100% of the issued and outstanding shares of SRS.

Impacts of COVID-19 on Our Business

The COVID-19 pandemic and the resulting impact on the U.S. economy have accelerated many of our operational initiatives to deliver best-in-class customer value and to reduce costs. The COVID-19 pandemic has had an unprecedented impact on the U.S. economy, resulting in governments and organizations implementing public health measures in an effort to contain the virus, including physical distancing, work from home, supply chain logistical changes and closure of non-essential businesses. With vaccine administration and adoption rising, governments and organizations have responded by adjusting such restrictions and guidelines accordingly. We are monitoring this fluid situation and will continue to follow official regulations to protect our employees and customers.

The ultimate impact of the COVID-19 pandemic (and virus variants, such as Delta and Omicron) is still highly uncertain and subject to change, and we do not yet know the full extent of potential delays or impacts on our business, operations or the global economy as a whole. We will continue to monitor developments affecting our workforce, our customers, and our business operations generally and will take actions that we determine are necessary in order to mitigate these impacts.

Global supply chain disruptions are prevalent in the renewable energy industry and are most acute in the residential and commercial PV markets. While domestic and international manufacturers in this space are starting to make strides in rectifying some of the major issues, several factors are having overall detrimental impacts to US renewable installers and developers. The three main factors contributing to adverse market conditions are equipment pricing, manufacturing delays and shortages, labor disruptions and logistics. At times these factors overlap, but each factor has a unique impact on business operations and metrics.

Pricing for renewable energy equipment, after trending downward for the last decade, have seen substantial price increases in the past 12-months. Raw material such as copper, aluminum, steel, plastic resin, and tempered glass, all of which are integral to renewable energy equipment, remain at stubbornly high price points. Manufacturers have consistently passed these raw material increases downstream in 2022, equating to an estimated 13.5% higher aggregate equipment pricing in the 12 months ended October 31, 2022. A percentage of the equipment pricing increase has been passed downstream once again, this time to end users, but to maintain a competitive position some of the increase has been absorbed internally. We estimate the overall impact to gross profit has been roughly 5% during the 12 months ended December 31, 2022.

Manufacturing delays and product shortages have been particularly painful in 2022. The initial COVID-19 wave and the precipitous drop off in consumer demand led to a massive ramp down in global production for key components such as solar modules, inverter technology and PV racking equipment. While consumer demand has roared back to life, manufacturing capacity and production have not kept pace. Fulfillment lead times for key construction equipment have increased 40-60% in some instances. These effects are particularly present in semi-conductor intensive equipment. Increased lead times have a direct impact on customer sales through an increased cancelation rate and in doing so has a negative impact on our revenue stream. Increased customer cancelation has had an estimated 6% negative impact on our revenue stream.

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Renewable energy equipment is heavily tied to the global logistics industry. Most major components, including solar modules and inverter technology, are made outside of the US and rely on an interplay of shipping, railway, and roadway transportation to arrive at its destination. When coupled with manufacturing delays and increased consumer demand, these logistics pathways have proven slow to rebound. Logistics costs had started to flatten out in the 2^nd half of 2022, but with new uncertainty in the oil markets we expect that flattening curve to be short lived. There is a fine correlation between logistics costs and equipment pricing and a portion of the overall negative impact on gross profits can be attributed to logistics costs. Delays in transits from manufacturers as well as decreased availability with transportation providers are also adding to the issue of increased customer cancelation and the decrease in revenue stream.

With regards to mitigation strategies, we have substantially increased our equipment and demand forecasting with our vendor partners as well as established lines of communication with manufacturers to better identify trends in the market. By increasing our presence and communication frequency with our vendors and manufacturers, we are better able to identify forward-looking issues and adjust our strategy accordingly to mitigate future monetary impacts.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”), including the instructions to Form 10-Q and Regulation S-X. Certain information and note disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”), have been condensed or omitted from these statements pursuant to such rules and regulations and, accordingly, they do not include all the information and notes necessary for comprehensive financial statements and should be read in conjunction with our audited consolidated financial statements for the year ended December 31, 2021. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included. 

Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of Solar Integrated Roofing Corporation and its wholly-owned subsidiaries: Secure Roofing and Solar Inc., Narrate LLC, McKay Roofing Company, Inc., Milholland Electric, Inc., Montross Companies, Inc., Approved Home Pros, LLC, Enerev LLC, Cornerstone Construction Team, LLC, Balance Authority, LLC, Kinetic Investments Inc. dba Future Home power, USA Solar Network LLC, SunUp Solar LLC and Renovation Roofing, Inc., which are included in the financial statements of the Company as of their respective acquisition dates. Pacific Lighting Management, Inc. was the only subsidiary acquired at 60% so the Company includes non-controlling interest in its consolidated financial statements. During the nine months ended September 30, 2021, the Company acquired Enerev LLC, Cornerstone Construction Team LLC, 60% of Pacific Lighting Management, Inc., Balance Authority, LLC, Kinetic Investments, Inc. dba Future Home Power, USA Solar Network LLC and SunUp Solar LLC. All intercompany accounts have been eliminated upon consolidation.

During the nine months ended September 30, 2022, the Company did not acquire any entities. During the nine months ending September 30, 2022, the Company eliminated and rescinded the agreement regarding Cornerstone Construction Team, LLC as of May 31, 2022. The Company has consolidated the operations for the entity up until the recission date of May 31, 2022. The Company received the previously issued 45,000,000 shares of common stock issued in connection with the merger to the entity’s previous ownership group. The Company also issued 8,000,000 in common stock valued at $1,748,000 from the stock price on the day of legal settlement. All Cornerstone assets and liabilities were eliminated from the Company’s consolidated financial statements on May 31, 2022.

During the nine months ended September 30, 2021, the Company acquired Enerev LLC, Cornerstone Construction Team LLC, 60% of Pacific Lighting Management, Inc., Balance Authority LLC, Kinetic Investments, Inc. dba Future Home Power, USA Solar Network LLC, SunUp Solar LLC and Renovation Roofing, Inc.

Use of Estimates

The preparation of financial statements in conformity with U.S. 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include the estimated useful lives of property and equipment, allowance for doubtful accounts, impairment of long-lived assets, and the valuation of debt and equity transactions. Actual results could differ from those estimates.

Concentrations of Credit Risk

The Company maintains its cash in bank deposit accounts, the balances of which at times may exceed federally insured limits. The Company continually monitors its banking relationships and consequently has not experienced any losses in its accounts. As of September 30, 2022 and December 31, 2021, management believes the Company is not exposed to any significant credit risk on cash.

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Cash Equivalents

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cash and cash equivalents were $480,141 as of September 30, 2022 and $1,124,533 as of December 31, 2021.

Accounts Receivable

Management reviews accounts receivable periodically to determine if any receivables will potentially be uncollectible. Management’s evaluation includes several factors including the aging of the account balances, a review of significant past due accounts, economic conditions, and our historical write- off experience, net of recoveries. The Company includes any accounts receivable balances that are determined to be uncollectible, along with a general reserve, in its allowance for doubtful accounts. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. The Company’s allowance for doubtful accounts was $340,874 and $253,652 as of September 30, 2022 and December 31, 2021, respectively, and no individual customer owed in excess of 10% of the trade accounts receivable balances of $5,511,696 or $3,652,176, respectively.

Inventory

The Company’s inventory is valued at the lower of cost (the purchase price) or market. Inventory costs are determined based on the average cost basis. A reserve for slow-moving and potentially obsolete inventories is recorded as of each balance sheet date and total inventories are presented net of that reserve. Inventory consists primarily of solar panels. As of September 30, 2022, management evaluated all held inventory for obsolete or slow-moving parts and did not identify any. 

Property and Equipment

Property and equipment are carried at cost less amortization and depreciation. Major betterments that extend the useful lives of assets are also capitalized. Normal maintenance and repairs are charged to expense as incurred. When assets are sold or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in operations. Property and equipment consist of Vehicles, Computer Equipment, Machinery and Equipment, Furniture and Equipment which are depreciated on a straight-line basis over their expected useful lives as follows.

Vehicles	5 years
Computer Equipment	5 years
Machinery and Equipment	5 years
Furniture & Equipment	5 years

Leases

The Company follows the Financial Accounting Standards Board’s (the “FASB”) Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), and additional ASUs issued to clarify and update the guidance in ASU 2016-02 (collectively, the “new leases standard”), which modifies lease accounting for lessees to increase transparency and comparability by recording lease assets and liabilities for operating leases and disclosing key information about leasing arrangements. The new lease standard requires an entity to recognize a right-of-use asset and a lease liability for virtually all leases. The Company elected to exclude from its balance sheets recognition of leases having a term of 12 months or less (“short-term leases”). Lease expense is recognized on a straight-line basis over the lease term. See Note 12 for further information regarding the Company’s leases.

Advertising

The Company conducts advertising for the promotion of its services. In accordance with ASC 720-35, advertising costs are charged to operations when incurred. The Company incurred $445,828 in marketing and advertising expenses during the nine months ended September 30, 2022 and $575,038 during the nine months ended September 30, 2021.

Fair Value of Financial Instruments

Accounting Standards Codification subtopic 825-10, Financial Instruments (“ASC 825-10”) requires disclosure of the fair value of certain financial instruments. The carrying value of cash and cash equivalents, accounts payable and accrued liabilities, and short-term borrowings, as reflected in the balance sheets, approximate fair value because of the short-term maturity of these instruments. All other significant financial assets, financial liabilities and equity instruments of the Company are either recognized or disclosed in the financial statements together with other information relevant for making a reasonable assessment of future cash flows, interest rate risk and credit risk. Where practicable the fair values of financial assets and financial liabilities have been determined and disclosed; otherwise only available information pertinent to fair value has been disclosed.

The Company follows Accounting Standards Codification subtopic 820-10, Fair Value Measurements and Disclosures (“ASC 820-10”) and Accounting Standards Codification subtopic 825-10, Financial Instruments (“ASC 825-10”), which permits entities to choose to measure many financial instruments and certain other items at fair value. ASC 820 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by ASC 820 are described below:

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Level 1: Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.

Level 2: Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.

Level 3: Pricing inputs that are generally unobservable inputs and not corroborated by market data.

The carrying value of the Company’s current assets and liabilities are deemed to be fair market value due to the short-term nature of these instruments.  The Company did not have any Level 2 financial instruments as of September 30, 2022 or December 31, 2021, while the Company’s Level 3 derivative liabilities are detailed in Note 10.

Revenue Recognition

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers, when satisfying the performance obligation of the associated contract that reflects the consideration expected to be received based on the terms of the contract.

Solar Integrated Roofing Corporation has chosen to utilize the “Output Method” of ASC 606 as a means of recognizing revenue in accordance with performance obligation milestones within their executed contracts. The Output Method as defined in ASC 606 are incremental goods or services that are instrumental and necessary to fulfill the complete project that have been verified to be completed. These outputs are the result of processes applied to inputs in a business. In other words, the Output Method measures results achieved and value that is passed on to the customer in relation to the contract as a whole. In implementation, the Company has determined the incremental milestones of a project ranging from contract inception to project completion, with each progressing milestone providing additional services to the end client. Per the guidelines of ASC 606, the Company then tracks the progress toward completion of the contract by measuring outputs to date relative to total estimated outputs needed to satisfy the performance obligation.

As the different subsidiaries of the Company encompass many different business models, there exists different metrics for each of the subsidiaries in regard to intervals/milestones qualifying a specific level of revenue recognition. The business types are as follows:

☐	Roofing Companies
☐	Sales Organizations
☐	Claims Management Companies
☐	Solar Installation Companies
☐	Alternative Energy Companies
☐	Service Organizations

ASC 606 has five general components which formulate the basis of the revenue process. In observation of the Output Method, the five components and brief explanations as to how each applies to the revenue recognition model the Company has adopted are as follows:

(i) Identify the contract, or contracts, with a customer.

A contract is an agreement or purchase order between two or more parties that creates enforceable rights and obligations. In evaluating the contract, the Company analyzes the customer’s intent and ability to pay the amount of promised consideration (credit risk) and considers the probability of collecting substantially all of the consideration.

(ii) Identify the performance obligations in the contract.

At a contract’s inception, the Company assesses the goods or services promised in a contract with a customer and identifies the performance obligations. The main performance obligations are the provisions of the following:

☐	Project Specifics
	o	Site Visit
	o	Engineering Design
	o	Permitting
	o	Utility Interconnection, if applicable
	o	Project Installation
	o	Project Completion

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(iii)	Determine the transaction price
	The transaction price is the amount of consideration to which the Company is entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties. When a contract provides a customer with payment terms of more than a year, the Company considers whether those terms create variability in the transaction price and whether a significant financing component exists. As of September 30, 2022, the Company has not provided payment terms of more than a year.
(iv)	Allocate the transaction price to the performance obligations in the contract.
	The Company performs an allocation of the transaction price to each separate performance obligation, known as milestones. The allocated milestone payments are based upon multiple factors:
	☐	Hard costs for materials needed to fulfill the current milestone.
	☐	Soft costs upon the milestone being achieved (sales commissions, labor costs)
	☐	Overhead and incidentals to be allocated at the specific milestones of a project.
(v)	Recognize revenue when, or as, the Company satisfies a performance obligation.
	The Company recognizes revenue incrementally upon its fulfillment of each specific performance obligation milestone as outlined in the underlying contract utilizing the Output Method.

During the nine months ended September 30, 2022 and 2021, the Company derived its revenues from the following:

- residential solar panels sales and installation: approximately $60.1 million and $11.7 million, respectively commercial solar: approximately $74.6 million and $0, respectively

- roofing constructions: approximately $13.7 million and $12.5 million, respectively

- EV charging stations: approximately $2.1 million and $0.5 million, respectively

The Company analyses whether gross sales as the principal, or net sales as the agent, should be recorded. Since the Company assumes all risk of loss, has control over establishing price, and has control over the related costs associated with earning revenues, the Company is the principal, and as such has recorded all revenues at the gross price.

Concentration of Revenue by Customer

During the nine months ended September 30, 2022 and 2021, no individual customers comprised above 10% of total revenue recognized.

Concentration of Revenue by Segment during the nine months ended September 30, 2022 and 2021:

- residential solar sales and installation: approximately 40% and 47.5%, respectively commercial solar: approximately 50% and 0%, respectively

- roofing construction: approximately 9% and 50.5%, respectively

- EV charging stations: approximately 1% and 2%, respectively

Segments and Disaggregated Revenue

The Company is a single source solar power and roofing system installation company operating and specializing in commercial and residential properties across the United States. The Company’s operations are conducted in specific reportable segments: roofing construction, residential solar, commercial solar & microgrids, battery back-up & EV charging and project financing. The Company defines its segments because the operations are distinctly different from other areas within the Company as the Company has roofing contracts, solar installations (residential / commercial / microgrids), battery back-up and EV charging installations as well as finance and maintenance. All of these areas are supported by our sales, marketing and general and administrative teams. The Company’s Chief Operating Officer regularly reviews these segments to align resources and analyze performance.

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All of the Company’s segments operate within the United States as the Company does not have any foreign sales or operations at this time. The Company’s roofing segment is dedicated to services and products serving roofing construction, design and maintenance. Construction of roofing projects and the design of roofing installations as well as the construction of the roofing projects all fall under this segment. The Company’s residential solar segment serves the installation of solar systems within residential properties selling directly to consumers. The Company’s commercial solar segments sells to larger renewal energy companies and to corporations seeking solar installations to offset utility expenses (i.e. urban housing, commercial properties, apartment buildings, etc.). The Company’s EV charging services are centered around providing solutions for EV charging platforms through the planning, sourcing and installation of these platforms for businesses and other agencies. Our financing efforts are done in support of these operating activities.

The Company measures the results of the segments by the following among other attributes: gross margin, operating income (which includes overhead corporate expense allocations), costs of sales and revenue. The Company revises the measurement of the reporting segments operating income, gross margin and corporate overhead allocations from time to time as these metrics are regularly reviewed by the Chief Operating Officer. Information on the Company’s operating segments, including the reconciliation to income is provided in the following table.

	Solar Residential			Solar Commercial		Roofing Construction			EV Charging			Consolidated
Nine Months Ended
September 30, 2021
Revenue	$	11,735,260		$	-	$	12,481,941		$	457,606		$	24,674,807
Cost of sales		9,575,946			-		9,654,975			253,885			19,484,806
Gross margin		2,159,314			-		2,826,966			203,721			5,190,001
Operating (loss)		(4,006,196	)		-		(4,638,906	)		(143,116	)		(8,788,218	)
Nine Months Ended
September 30, 2022
Revenue	$	60,150,528		$	74,590,743	$	13,679,707		$	2,120,557		$	150,541,535
Cost of sales		41,911,157			42,278,932		8,549,924			1,818,151			94,558,164
Gross margin		18,239,371			32,311,811		5,129,783			302,406			55,983,371
Operating Income (loss)		16,176,064			20,816,516		(1,537,903	)		(899,369	)		34,555,308

	Solar Residential			Solar Commercial		Roofing Construction			EV Charging			Consolidated
Three Months Ended
September 30, 2021
Revenue	$	6,758,884		$	-	$	6,220,147		$	245,728		$	13,224,759
Cost of sales		5,008,450			-		3,300,787			109,103			8,418,340
Gross margin		1,750,434			-		2,919,360			136,625			4,806,419
Operating (loss)		(1,225,839	)		-		(69,174	)		(75,354	)		(1,370,367	)
Three Months Ended
September 30, 2022
Revenue	$	10,356,762		$	41,891,554	$	4,791,303		$	227,841		$	57,267,460
Cost of sales		9,367,592			30,770,051		2,346,818			586,971			43,071,432
Gross margin		989,170			11,121,503		2,444,485			(359,130	)		14,196,028
Operating Income (loss)		1,896,023			5,699,027		628,979			(852,978	)		7,371,051

As of September 30, 2022, approximately $291.6 million of revenue is expected to be recognized from remaining performance obligations for solar commercial contracts. The Company expects to recognize revenue on these remaining performance obligations over the next 12 months. The Company has elected to accrue installation and construction activities until the customer obtains control of the solar commercial project. Accordingly, the Company will accrue all related construction and installation costs (Work in progress accounts payable) and recognize Work in progress accounts receivable as revenue and Work in progress accounts payable as cost of sales once the project has been completed. The Company generally has payment terms with its customers of one year or less and has elected the practical expedient applicable to such contracts not to consider the time value of money over a longer period of time.

Cost of Revenue

Cost of revenue consists primarily of costs related to raw materials, freight and delivery, product warranty, and personnel costs (salaries, bonuses, benefits, and stock-based compensation). Personnel costs in cost of revenue includes both direct labor costs as well as costs attributable to any individuals whose activities relate to the procurement, installment and delivery of the finished product and services. Deferred cost of revenue results from the timing differences between the costs incurred in advance of the satisfaction of all revenue recognition criteria consistent with our revenue recognition policy.

During the nine months ended September 30, 2022 and 2021, the Company incurred cost of revenue of $94,558,164 and $19,484,806, respectively, of which $62,751,055 and $0 were included in work in progress payable at September 30, 2022 and 2021, respectively.

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Work in progress receivable is recorded when the Company has transferred services to the customers prior to receiving consideration and when the payment of consideration is contingent upon milestones performance obligation. The Company recognizes also the cost associated with reaching specific milestone in form of work in progress payable. As of September 30, 2022, the work in progress receivable was $139,727,247 and work in progress payable was $62,751,055, which were netted together as a contract asset work in progress receivable on the consolidated balance sheets in the amount of $76,976,192. As of December 31, 2021, the work in progress receivable was $48,400,253 and work in progress payable was $15,157,957, which were netted together as a contract asset work in progress receivable on the consolidated balance sheets in the amount of $33,242,296.

Income Taxes

The Company follows ASC 740, Income Taxes, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Statements of Operations in the period that includes the enactment date.

The Company follows section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”) with regards to uncertainty in income taxes. Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures.

Stock-based Compensation

The Company accounts for employee and non-employee stock-based compensation in accordance with ASC 718, Compensation—Stock Compensation, which requires all share-based payments to employees and non-employees, including grants of stock options, to be recognized in the financial statements based on the grant date fair values of the equity instruments issued, which is charged directly to compensation expense over the requisite service or vesting period.

Net Income (Loss) per Common Share

Net income (loss) per common share is computed pursuant to ASC 260, Earnings Per Share. Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period.

During the three and nine months ended September 30, 2022, the Company’s basic income per share was $0.01 and $0.06, respectively, and diluted income per share was $0.01 $0.06, respectively.

During the three and nine months ended September 30, 2021, the Company’s basic loss per share was $0.00 and $0.02, respectively, and diluted loss per share was also $0.00 and $0.02, respectively.

The Company’s diluted loss per share is the same as the basic loss per share for the same periods, as the inclusion of any potential shares would have had an anti-dilutive effect due to the Company generating a loss.

For the nine months ended September 30, 2022 and 2021, the Company’s potentially-dilutive instruments include convertible notes and associated accrued interest. The total amount of “if-converted” shares of 77,014,464 and 102,615,305, respectively, are comprised of the following:

☐	convertible notes with interest– 5,504,464 and 6,834,227, respectively
☐	common shares to be issued – 7,000,000 and 0, respectively
☐	warrants and options – 7,500,000 and 5,781,078, respectively
☐	convertible preferred shares Class B – 57,010,000 and 90,000,000, respectively

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Diluted income (loss) per share is computed as follows:

	Nine Months Ended September 30, 2022		Nine Months Ended September 30, 2021
Numerator:
Net income (loss)	$	30,798,785	$	(7,343,074	)
(Gain) loss on change in fair value of derivatives		43,246		(1,285,675	)
Interest on convertible debt		766,770		866,477
Net income (loss) - diluted	$	31,608,801	$	(7,762,272	)
Denominator:
Weighted average common shares outstanding - basic		502,470,756		343,348,974
Effect of dilutive shares		77,014,464		102,615,305
Diluted		579,485,220		445,964,279
Net income (loss) per common share:
Basic	$	0.06	$	(0.02	)
Diluted	$	0.06	$	(0.02	)
	Three Months Ended September 30, 2022		Three Months Ended September 30, 2021
Numerator:
Net income (loss)	$	6,240,046	$	(1,685,655	)
(Gain) loss on change in fair value of derivatives		53,295		(359,009	)
Interest on convertible debt		164,573		540,450
Net income (loss) - diluted	$	6,457,914	$	(1,504,214	)
Denominator:
Weighted average common shares outstanding - basic		539,902,975		378,468,171
Effect of dilutive shares		77,014,464		102,615,305
Diluted		616,917,439		481,083,476
Net income (loss) per common share:
Basic	$	0.01	$	(0.00	)
Diluted	$	0.01	$	(0.00	)

Business Combinations

In accordance with ASC 805, Business Combinations, the Company accounts for all business combinations using the acquisition method of accounting. Under this method, assets and liabilities, including any remaining non-controlling interests, are recognized at fair value at the date of acquisition. The excess of the purchase price over the fair value of assets acquired, net of liabilities assumed, and non-controlling interests is recognized as goodwill. Certain adjustments to the assessed fair values of the assets, liabilities, or non-controlling interests made subsequent to the acquisition date, but within the measurement period, which is up to one year, are recorded as adjustments to goodwill. Any adjustments subsequent to the measurement period are recorded in income. Any cost or equity method interest that the Company holds in the acquired company prior to the acquisition is re-measured to fair value at acquisition with a resulting gain or loss recognized in income for the difference between fair value and the existing book value. Results of operations of the acquired entity are included in the Company’s results from the date of the acquisition onward and include amortization expense arising from acquired tangible and intangible assets.

Goodwill

The Company allocates goodwill to reporting units based on the reporting unit expected to benefit from the business combination. We evaluate our reporting units on an annual basis and, if necessary, reassign goodwill using a relative fair value allocation approach. Goodwill is tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. These events or circumstances could include a significant change in the business climate, legal factors, operating performance indicators, competition, or sale or disposition of a significant portion of a reporting unit.

Application of the goodwill impairment test requires judgment, including the identification of reporting units, assignment of assets and liabilities to reporting units, assignment of goodwill to reporting units, and determination of the fair value of each reporting unit. The fair value of each reporting unit is estimated primarily using a discounted cash flow methodology. This analysis requires significant judgments, including estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term rate of growth for our business, estimation of the useful life over which cash flows will occur, and determination of our weighted average cost of capital.

The estimates used to calculate the fair value of a reporting unit change from year to year based on operating results, market conditions, and other factors. Changes in these estimates and assumptions could materially affect the determination of fair value and goodwill impairment for each reporting unit.

During the nine months ended September 30, 2022 and 2021, there was no goodwill impairment recorded.

Impairment of Long-Lived Assets

Tangible and intangible assets (excluding goodwill) are assessed at each reporting date for indications that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Company makes an estimate of the asset’s recoverable amount. The asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less costs of disposal and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or a group of assets exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or the group of assets.

Derivative Financial Instruments

The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses the Black Scholes valuation model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.

Recent Accounting Pronouncements

In August 2020, the FASB issued ASU 2020-06, ASC Subtopic 470-20 “Debt—Debt with “Conversion and Other Options” and ASC subtopic 815-40 “Hedging—Contracts in Entity’s Own Equity”. The standard reduced the number of accounting models for convertible debt instruments and convertible preferred stock. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting; and, (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. The amendments in this update are effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company adopted this standard on January 1, 2021, but there was no resulting material impact on the financial statements.

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

Warrants and options

The Company has issued Common Stock warrants in connection with the execution of certain equity and debt financings. The fair value of warrants is determined by its fixed exercise price. During the three months ended September 30, 2022, the Company issued a warrant for 500,000 shares at the exercise price of $0.50 per share.

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On September 22, 2022, the Company issued Nonqualified Stock Option Award Agreement for 25,000,000 shares of common stock over 3 years at the price of $0.1799 per share. 7,000,000 shares of common stock qualify for the year of 2022.

NOTE 3 – GOING CONCERN

The accompanying consolidated financial statements have been prepared in accordance with U.S. GAAP, which contemplates the continuation of the Company as a going concern and realization of assets and the satisfaction of liabilities in the normal course of business. At September 30, 2022, the Company had cash of $480,141 and a working capital of $30,754,641. The Company has retained earnings of $30,378,933 at September 30, 2022, and accumulated deficit of $774,754 at December 31, 2021. The Company had a net income of $30,798,785 for the nine months ended September 30, 2022 and net loss of $7,343,074 for the nine months ended September 30, 2021. Net cash used in operating activities for the nine months ended September 30, 2022 was $5,609,232 and $1,322,756 for the nine months ended September 30, 2021. These factors among others present substantial doubt about the Company’s ability to continue as going concern. The Company’s ability to continue as a going concern is dependent upon its ability to repay or settle its current indebtedness, generate positive cash flow from an operating company, and/or raise capital through equity and debt financing or other means on desirable terms. If the Company is unable to obtain additional funds when they are required or if the funds cannot be obtained on favorable terms, management may be required to restructure the Company or cease operations. The consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.

The Company is aware that its current cash on hand will not be sufficient to fund its projected operating requirements through the month of December 2022 and is pursuing alternative opportunities to funding.

The Company intends to raise additional capital through private placements of debt and equity securities, but there can be no assurance that these funds will be available on terms acceptable to the Company, or will be sufficient to enable the Company to fully complete its development activities or sustain operations. If the Company is unable to raise sufficient additional funds, it will have to develop and implement a plan to further extend payables, reduce overhead, or scale back its current business plan until sufficient additional capital is raised to support further operations. There can be no assurance that such a plan will be successful.

The Company’s management does not know the full extent or foresee the impact COVID-19 has had on our business or our operations or its ability to carry out our plans. We will continue to monitor and follow this situation closely.

NOTE 4 – PROPERTY AND EQUIPMENT

Property and equipment stated at cost, less accumulated depreciation consisted of the following:

	September 30, 2022			December 31, 2021
Vehicles	$	2,427,093		$	2,660,504
Land		250,000			-
Computer Equipment		3,518			3,518
Machinery and Equipment		191,566			224,807
Leasehold Improvements		13,473			36,646
Office Equipment		146,391			146,391
Furniture and Equipment		142,494			137,231
		3,174,535			3,209,097
Less: accumulated depreciation		(2,170,519	)		(2,087,040	)
Property and equipment, net	$	1,004,016		$	1,122,057

Depreciation expense for fixed assets was $227,601 and $303,982, respectively, for the nine months ended September 30, 2022 and 2021. Depreciation expense for September 30, 2022 is offset by the elimination of Cornerstone Construction Team LLC assets and accumulated depreciation of $158,620. During the nine months ended September 30, 2022, there was a purchase of a Genie Scissorlift in the amount of $8,453 and computer equipment of $8,038 and there was an initial deposit of $250,000 towards purchase of a land from Opal Investments, Inc. (total purchase price $13,000,000) and proceeds from sale of $106,931. During the nine months ended September 30, 2021, there were purchases in the amount of $1,112,644 and fixed assets acquired through acquisitions in the amount of $178,749.

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NOTE 5 – OTHER ASSETS

Prepaids and Other Current Assets

The balances as of September 30, 2022 and December 31, 2021 were $273,836 and $736,548, respectively, and included prepaid D&O insurance, general liability, prepaid interest on debt and workers’ compensation insurance in the amount of $117,372 and $701,023, respectively, prepaid rent in the amount of $9,464 and $0, respectively, and accrued interest receivable of $147,000 and $35,525 (Note 6), respectively.

Other Assets

The balances as of September 30, 2022 and December 31, 2021 were $154,390 and $265,071, respectively, and included trade mark, brand asset and website valued $123,194 and $207,320, respectively, reserves with Worth Technologies of $23,142 and $0, respectively, and security deposits of $8,054 and $57,751, respectively.

NOTE 6 – NOTE RECEIVABLE

On October 5, 2021, the Company invested $4,200,000 in Arbiter Capital LLC pursuant to a promissory note receivable that carries 3.5% interest payable in full (principal and accrued interest) on the maturity date on September 30, 2022. The accrued interest receivable of $147,000 and $35,525 as of September 30, 2022 and December 31, 2021, respectively, is included in prepaid and other current assets on the balance sheet. As of September 30, 2022, the note with accrued interest is still outstanding. The note is in default as of October 1, 2022, and a demand letter for payment has been issued.

NOTE 7 – RELATED PARTY TRANSACTIONS

As of September 30, 2022 and December 31, 2021, amounts owed to related parties totaled $11,204,126 and $11,510,413, respectively. As of September 30, 2022, the amounts owed to related parties consisted of $7,000,000 owed to prior management, $654,573 for the Balance Authority acquisition, $2,000,000 for the Future Home Power acquisition, $744,985 for USA Solar Network LLC acquisition and $804,568 to current management for cash advances. As of December 31, 2021, $7,000,000 was owed to prior management, $855,769 to related entities, $2,000,000 for the Future Home Power acquisitions, $1,000,000 for USA Solar Network LLC acquisition and $654,644 to current management. The amounts due are non-interest bearing.

During the nine months ended September 30, 2022 and 2021, the Company recognized new obligations to related parties of $448,102 and $12,288,686, respectively and repaid $754,389 and $4,184,541, respectively, of amounts owed to related parties, respectively, for net decrease in Due to related parties of $306,287 and net increase of $8,104,145, respectively.

During the nine months ended September 30, 2022 and 2021, the Company issued 3,604,603 and 1,500,000 shares of common stock to directors and officers for compensation valued at $1,131,352 and $840,000, respectively and 20,000,000 and 25,133,334 shares to officers for acquisitions valued at $6,302,000 and $13,276,667, for the nine months ended September 30, 2022 and 2021, respectively.

During the nine months ended September 30, 2021, the Company repurchased 5,000,000 shares of preferred stock class B for $10,000,000 from former officer of the Company.

NOTE 8 – DEBENTURE PAYABLE

In January 2020, the Company received $2,400,000 for the issuance of a senior secured redeemable debenture. The debenture bears interest at 16% and matures 24 months after issuance. As of September 30, 2022 and December 31, 2021, no principal has been repaid, and accrued interest totals $635,807 and $363,318, respectively. The Company has not been able to make any payments on this debenture as investor’s bank account has been closed and there is no contact information available. As such there has been no provision for default terms upon the January 2022 maturity.

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NOTE 9 – CONVERTIBLE NOTES PAYABLE

Convertible notes as of September 30, 2022:

Noteholder	Issuance Date	Maturity Date	Conversion Price		Interest Rate			Outstanding Principal Balance
RB Capital Partners, Inc.	2/18/2021	2/18/2022	$	3.00		5	%	$	1,744,800
RB Capital Partners, Inc.	2/26/2021	2/26/2022	$	3.00		5	%	$	4,500,000
Jefferson Street Capital	10/5/2021	10/5/2022	$	6.75		10	%	$	1,500,000
Jefferson Street Capital	11/18/2021	1/5/2022	$	6.75		5	%	$	500,000
Mammoth Corporation	1/19/2022	4/19/2022	$	0.50		0	%	$	600,000
Jefferson Street Capital	3/1/2022	12/1/2022	$	6.00		14	%	$	500,000
RB Capital Partners, Inc.	4/22/2022	4/22/2023	$	3.00		5	%	$	800,000
AJB Capital Investments LLC	9/9/2022	3/9/2023		*		12	%	$	600,000
TOTAL								$	10,744,800
UNAMORTIZED DEBT DISCOUNT									(60,000	)
NET CONVERTIBLE NOTES								$	10,684,800

*conversion price will be equal to the lowest trading price during the previous 20 trading day period either ending on the date of the conversion or the issue price.

During the nine months ended September 30, 2022, $2,782,275 in principal and $58,300 in interest was converted to 59,708,605 shares of common stock. On June 23, 2022, the Company entered into Buyout Agreement with Granite Global Value Investments LTD, where the Company agreed to pay $14,000,000 for all outstanding convertible notes between the parties (the “New Note”) upon the Company receiving funding from third parties or investors or until they have the funds available to pay the New Note. The aggregate principal of the convertible notes was $12,668,535, plus accrued interest of $62,532, for a total of $12,731,067 (collectively the “Old Note”). The terms and cash flows of the New Note are significantly different than the terms and cash flows of the Old Note, as the New Note is non-interest bearing, and has no maturity date or conversion feature. As such, note modification has been accounted for as an extinguishment of the Old Note and issuance of the “New note”, and the difference between the Old Note and New Note of $1,268,933 has been recorded as loss on modification of debt. On September 9, 2022, the Company received $540,000 from AJB Capital Investments LLC.

Currently most of above convertible notes are in default but there are no penalties initiated or associated with the notes in default.

Convertible notes as of December 31, 2021:

Noteholder	Issuance Date	Maturity Date	Conversion Price		Interest Rate			Outstanding Principal Balance
Granite Global Value	1/19/2021	1/19/2022	*			1	%	$	155,886
Granite Global Value	1/27/2021	1/27/2022	$	2.70		1	%	$	1,035,250
RB Capital Partners, Inc.	2/8/2021	2/8/2022	$	3.00		5	%	$	1,000,000
RB Capital Partners, Inc.	2/18/2021	2/18/2022	$	3.00		5	%	$	3,500,000
Granite Global Value	2/23/2021	2/23/2022	$	6.75		1	%	$	1,035,250
RB Capital Partners, Inc.	2/26/2021	2/26/2022	$	3.00		5	%	$	4,500,000
Granite Global Value	3/18/2021	3/18/2022	$	5.45		1	%	$	3,282,500
Granite Global Value	6/1/2021	6/1/2022	$	2.50		10	%	$	5,500,000
Granite Global Value	8/30/2021	8/30/2022	$	0.35		5	%	$	1,680,000
Jefferson Street Capital	10/5/2021	10/5/2022	$	6.75		10	%	$	1,500,000
Jefferson Street Capital	11/18/2021	1/15/2022	$	6.75		5	%	$	500,000
TOTAL								$	23,688,886
UNAMORTIZED DEBT DISCOUNT									-
NET CONVERTIBLE NOTES								$	23,688,886

*Conversion price based on volume weighted average price during previous trading day.

The Company recognized amortization expense related to the debt discount of $6,724 and $186,146 for the nine months ended September 30, 2022 and 2021, respectively, which is included in interest expense in the statements of operations. Interest expense on convertible notes totaled $766,770 and $866,477 for the nine months ended September 30, 2022 and 2021, respectively.

During the nine months ended September 30, 2022 and 2021, the Company received proceeds of $1,900,000 and $21,055,610, respectively.

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NOTE 10 – DERIVATIVE LIABILITIES

The Company analyzed the conversion option for derivative accounting consideration under ASC 815, “Derivatives and Hedging,” and determined that the variable conversion option within one of the Company’s convertible notes should be classified as a liability since the conversion option becomes effective at issuance resulting in there being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options. On June 23, 2022, the underlying convertible note was extinguished, thereby eliminating the derivative liability. On September 9, 2022, the Company entered into a new convertible note agreement for $600,000 where conversion price is equal the lower of the lowest trading price during the previous twenty (20) trading day period either (i) ending on date of Conversion; or (ii) the Issue Date. The new derivative liability was calculated using the Black-Scholes option-pricing model.

The Company determined our derivative liabilities to be a Level 3 fair value measurement and used the Black-Scholes pricing model to calculate the fair value. The Black-Scholes model requires six basic data inputs: the exercise or strike price, time to expiration, the risk-free interest rate, the current stock price, the estimated volatility of the stock price in the future, and the dividend rate. Changes to these inputs could produce a significantly higher or lower fair value measurement. The fair value of each derivative is estimated using the Black-Scholes valuation model.

The following table summarizes the derivative liabilities included in the balance sheet at September 30, 2022 and December 31, 2021 and their activity for the nine months ended September 30, 2022 and 2021:

Fair Value Measurements Using Significant Observable Inputs (Level 3)
Balance – December 31, 2020	$	1,560,851
Reduction of new derivative liabilities from payoff of convertible notes and conversion of convertible notes to common shares		(230,456	)
Addition of new derivative liabilities		162,610
Amortization of debt discount on convertible debt		67,846
Gain on change in fair value of derivative liabilities		(1,285,675	)
Balance – September 30, 2021	$	275,176
Balance - December 31, 2021	$	10,049
Elimination of derivative liabilities due to extinguishment of underlying convertible debt		(10,049	)
Addition of new derivative liabilities		53,295
Balance – September 30, 2022	$	53,295

The table below shows the Black-Scholes option-pricing model inputs used by the Company to value the derivative liability at each measurement date:

	Nine months ended			Year ended
	September 30, 2022			December 31, 2021
Expected term	0.6 years			0.21 -0.49 years
Expected average volatility		156	%	138% - 177%
Expected dividend yield		-			-
Risk-free interest rate	3.2 – 4.05			0.08 – 0.11

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NOTE 11 – NOTES PAYABLE    

As of September 30, 2022, the Company owed notes payable totaling $24,829,198 as follows:

· $888,889 loan from TVT2.0 LLC with a 36-week term and weekly payments of $60,278 with 40% interest rate.

· $147,304 SBA loan with 3.75% interest rate and payable by May 16, 2050 and $175,772 line of credit with 5% interest.

· $162,115 in loans from On-Deck with 52 weekly payments of $11,413 with 44% interest rate.

· $555,104 vehicle financings from prior years with total monthly payment of $17,628, 2-3% interest, 2024 maturity dates.

· $6,375,014 in PPP loans. All PPP loans were received in May 2021 payable within 2 years and bearing interest rate of 1% annually.

· $1,000,000 bridge loan from RB Capital Partners, Inc. with 10% interest payable by December 31, 2022.

· $275,000 promissory note with Large Investment Group, Inc. with 10% interest and payable by August 10, 2022.

· $150,000 loan from Stephanie Hooper with 0% interest rate and payable within 12 months. 150,000 shares of common stock were subsequently issued in August 2022 as a commitment fee valued at $35,265 recorded as interest expense

· $14,000,000 note with Granite Global Value Investments LTD payable upon the Company receiving funding (see Note 12).

· $500,000 loan from Agile Capital Funding with weekly payments of $36,000 and 15% interest rate.

Current portion of the notes at September 30, 2022 was $21,955,667 and non-current portion was $2,273,531.

During the nine months ended September 30, 2022, the Company received proceeds pursuant to a $1,550,000 loan with TVT 2.0 LLC, $430,000 loan from On-Deck Capital, $1,500,000 from RB Capital Partners, Inc., $150,000 from Stephanie Hooper, $275,000 from Large Investment Group, Inc., $700,000 from Agile Capital Funding, $450,000 with CapitalNow LLC, and $397,105 from LOC. The Company also refinanced convertible debt into $14,000,000 in notes payable with Granite Global Value Investments LTD (Note 9).

The Company made repayments to TVT 2.0 LLC of $661,111, On-Deck Capital of $90,000, Agile Capital Funding of $200,000, CapitalNow LLC of $450,000, RB Capital Partners LLC of $500,000, $396,974 in LOC and vehicle financing of $464,160.

During the nine months ended September 30, 2021, the Company entered into several loan in participation of the PPP loan program in the amount of $6,375,014 as well as obtained a line of credit from the SBA in the amount of $438,204 and acquired debt of $1,007,535 with acquired entities. The Company made repayments of $98,958 to Echo Investments, $41,102 to On-Deck Capital, $118,830 to Silverline Services, $1,000,000 to SBA and vehicle financing of $582,328. The Company’s PPP loans of $1,018,130 were forgiven during the nine months ended September 30, 2021.

As of December 31, 2021, the Company owed notes payable totaling $7,539,471 as follows:

· $156,883 in SBA loan with 3.75% interest rate and payable by May 16, 2050.

· $653,750 vehicle financings from prior years with total monthly payment of $11,612, 2-3%, 2023 maturity dates. Current portion as of December 31, 2021 was $110,088

· $272,714 revolving line of credit with a 5% interest rate and no maturity date.

· $6,456,124 in PPP loans. All PPP loans were received in May 2021 payable within 2 years and bearing interest rate of 1% annually.

Current portion of the notes at December 31, 2021 was $5,112,773 and non-current portion was $2,426,698.

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NOTE 12 – LEASES

As of September 30, 2022 and December 31, 2021, the Company reported Right-of-Use (“ROU”) assets under operating leases for six office premises, and corresponding lease liabilities. Related party operating lease ROU assets and corresponding liability at September 30, 2022 was $1,547,325. The Company entered into four new lease agreements during the nine months ended September 30, 2022. During the nine months ended September 30, 2022 and 2021, the Company recorded $149,177 and $41,435, respectively, of lease expense. The lease components are as follows:

	As of September 30, 2022		As of December 31, 2021
Operating lease ROU assets	$	2,888,171	$	1,646,049
Current portion of operating lease liabilities		504,981		115,623
Noncurrent portion of operating lease liabilities		2,383,190		1,530,426
Total operating lease liabilities	$	2,888,171	$	1,646,049

Information associated with the measurement of our remaining operating lease obligations as of September 30, 2022 is as follows:

Weighted-average remaining lease term	10.36 years
Weighted-average discount rate		4.32	%

The Company has the following lease obligations for the years ended December 31:

2022 (remaining three months)	$	181,661
2023		523,106
2024		502,289
2025		366,161
2026		288,005
Thereafter		1,423,847
Total lease payments		3,285,069
Less: imputed interest		(396,898	)
Present value of lease liabilities	$	2,888,171

NOTE 13 – COMMON STOCK

The Company is authorized to issue 900,000,000 shares of common stock par value $0.00001. Effective October 31, 2022, the Company increased its authorized shares from 650,000,000 to 900,000,000. Following is a detail of Common Stock transactions during the nine months ended September 30, 2022 and 2021:

Nine months ended September 30, 2022

· Issued 2,200,000 shares of common stock for services of $613,350.

· Issued 59,708,605 shares of common stock for debt conversion of $2,840,575.

· Issued 15,366,539 shares of common stock for compensation of $2,647,066.

· Issued 38,739,242 shares of common stock for prior acquisition valued $12,011,850.

· Issued 3,315,000 shares of common stock for $514,040 for common stock payable and $80,500 cash.

· Received and cancelled 45,000,000 shares of common stock valued $36,450,000 for rescission agreement with Cornerstone Construction Team LLC.

Nine months ended September 30, 2021

· Issued 1,568,090 shares of common stock for services of $645,150.

· Issued 90,633,008 shares of common stock for debt conversion of $1,398,287.

· Issued 306,148 shares of common stock for cashless warrant exercise and 16,479,564 share for warrant exercise of $16,480.

· Issued 2,000,000 shares of common stock for total cash proceeds of $140,000.

· Issued 1,850,000 shares of common stock for compensation of $283,500.

· Issued 82,500,000 shares of common stock for acquisitions valued at $63,532,400.

· Repurchased and cancelled 200,000 shares of common stock for $200,000.

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Warrants and options

During the nine months ended September 30, 2022, the Company issued a warrant for 500,000 shares of common stock in connection with some financing, at the exercise price of $0.1799 per share. The warrant expense of $147,500 was recorded on Company’s statement of operations as an interest expense.

During the nine months ended September 30, 2022, the Company issued a stock option award for 25,000,000 shares of common stock, of which 7,000,000 shares were granted for the year of 2022, at the exercise price of $0.1799 per share. The option expense of $1,259,300 was recorded on Company’s statement of operations as salaries and wages.

The following summarizes the Company’s warrant and option activity:

Date	Number of shares			Weighted average exercise price
Outstanding - 12/31/2020		42,844,881			0.0747
Exercised		(42,844,881	)	$	0.078
Outstanding – 9/30/2021		-			-
Outstanding - 12/31/2021		-			-
Issued		7,500,000			0.20
Outstanding – 9/30/2022		7,500,000			0.20

The Company used the Black-Scholes pricing model to calculate the fair value of warrants on the grant date. The Black-Scholes model requires basic data inputs: the exercise or strike price, time to expiration, the current stock price and the estimated volatility of the stock price in the future. Changes to these inputs could produce a significantly higher or lower fair value measurement. The fair values of the warrants and options are estimated using the Black Scholes valuation model as follows:

Warrant

	Nine months ended
	September 30, 2022
Expected term	5 years
Expected average volatility		156	%
Expected dividend yield		-
Risk-free interest rate	3.2 – 4.05

Stock option

	Nine months ended
	September 30, 2022
Expected term	0.4 years
Expected average volatility		78	%
Expected dividend yield		-
Risk-free interest rate		3.33

NOTE 14 – PREFERRED STOCK

The Company is authorized to issue up to 5,000,000 shares of Class A preferred stock, Par value $0.00001, 20,000,000 shares of Class B preferred stock, par value $0.00001, 1 share of Class C preferred stock, par value $0.00001, and 40 shares of Class D preferred stock, par value $0.00001. As of September 30, 2022 and December 31, 2021, there are 2,500,000 shares of Class A preferred stock issued and outstanding. As of September 30, 2022 and December 31, 2021, there are 5,701,000 and 8,000,000 shares of Class B preferred stock issued and outstanding, respectively. As of September 30, 2022 and December 31, 2021, there is 1 share of Class C and 40 shares of Class D preferred stock issued and outstanding.

Class A preferred shares:

☐	Each share of Class A preferred stock has voting rights equal to 10,000 shares of common stock.
☐	No conversion is permitted.
☐	Holders are entitled, in the event of any voluntary liquidation or dissolution, to receive payment or distribution of preferential amount before any payments or distributions are received by any class of common stock.
☐	Holders are not entitled to receive dividends.

Class B preferred shares:

☐	If the Board of Directors declares a dividend payable, these shares are entitled to receive cumulative dividends.
☐	In the event of liquidation, holders are entitled to receive a distributive share of the Company’s assets and funds.
☐	One share of Series B preferred stock is convertible into 10 shares of common stock.

Class C preferred share:

☐	Holders are entitled to receive dividends in the amount of 49% of net annual profit of Enerev LLC paid annually 60 days closing year end.
☐	In case of liquidation of Enerev, LLC, the holders of Series C shares are entitled to receive their share of 49% of the net proceeds.
☐	Holders have no voting rights.

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Class D preferred shares:

☐	Holders are entitled to receive dividends in the amount of 40% of net annual profit of Kinetic Investments, Inc. dba Future Home Power paid annually 60 days closing year end.
☐	In case of liquidation of Kinetic Investments, Inc. dba Future Home Power, the holders of shares Series D are entitled to receive their share of 40% of the net proceeds.
☐	Holders have no voting rights.

The Class B, C, and D preferred stocks issued during the year ended December 31, 2021 were valued by an independent valuation specialist using a market approach.

Following is a detail of Preferred Stock transactions during the nine months ended September 30, 2022 and 2021:

Nine months ended September 30, 2022

1,499,000 shares of preferred stock class B were converted into 14,990,000 shares of common stock.

800,000 shares of preferred stock class B were retired and cancelled.

Nine months ended September 30, 2021

1,000,000 shares of preferred stock class B were issued for acquisition valued at $4,870,000.

5,000,000 shares of preferred stock class B were repurchased for $10,000,000 and retired.

1 share of preferred stock class C was issued for acquisition.

40 shares of preferred stock class D were issued for acquisition.

NOTE 15 – NON-CONTROLLING INTEREST

	September 30, 2022			December 31, 2021
Net loss Subsidiary	$	(887,255	)		(151,217	)
Net loss attributable to the non-controlling interest		532,353			90,730
Net loss affecting the Company		(354,902	)		(60,487	)
Accumulated losses		(1,038,472	)		(151,217	)
Accumulated losses attributable to the non-controlling interest		623,083			90,730
Accumulated losses affecting the Company		(415,389	)		(2,218,929	)
Net equity non-controlling interest	$	(354,902	)		(60,487	)

NOTE 16 – ACQUISITIONS

During the nine months ended September 30, 2022, the Company did not acquire any companies.

During the nine months ended September 30, 2021, the Company acquired 100% of the membership units of Enerev LLC, Cornerstone Construction Team LLC, Balance Authority LLC, Kinetic Investments, Inc., USA Solar Networks LLC and SunUp Solar LLC, Renovation Roofing Inc. and 60% of Pacific Lighting Management, Inc., as follows:

Enerev LLC

On April 28, 2021, the Company completed the acquisition, effective January 21, 2021, of 100% of the membership interest in Enerev LLC (“Enerev”). As of this date Enerev became a wholly owned subsidiary of the Company and became a consolidated entity under Solar Integrated Roofing Corporation (the “Company”). Enerev is a solar energy solutions provider to residential and commercial properties in Southern California with capabilities of installing solar panels. As a result of the acquisition of Enerev the Company is expected to expand installation efforts as well as expansion through known marketing and sales channels of Enerev.

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The following table summarizes the consideration transferred to acquire Enerev and the amounts of identified assets acquired and liabilities assumed at the acquisition date.

Fair value of consideration transferred:
Cash:	$	200,000
Common shares:	$	2,678,500
Series B preferred shares	$	4,870,000
Total	$	7,748,500

The 1,000,000 shares of series B preferred shares issued had a total fair value of $4,870,000 and the 1 share of series C preferred stock issued had a value of $0, both of which valuations were based on an independent expert valuation and price allocation using a market approach. The 5,500,000 shares of common stock issued had a fair value of $2,678,500 based on the January 21, 2021 acquisition date stock price. The series B preferred shares were issued on July 1, 2021.

Recognized amounts of identifiable assets acquired, and liabilities assumed:

Total assets:
Accounts receivable	$	40,384
Liabilities:	None
Goodwill:	$	7,708,116

The goodwill is attributable to the workforce of the acquired business and the significant synergies expected to arise from the acquisition of the installation and sales force of Enerev. The goodwill is not deductible for tax purposes. All Enerev’s goodwill was recorded in the Company’s intangible assets as a non-current asset and recorded on the balance sheet of the Company. The carrying value of the Company’s goodwill is reviewed annually for impairment by management of the Company. No impairment of Enerev goodwill was noted during the nine months ended September 30, 2022 or 2021.

Cornerstone Construction Team LLC

On March 1, 2021 the Company completed the acquisition of 100% of the membership interest in Cornerstone Construction Team LLC (“Cornerstone”). As of this date Cornerstone Construction Team LLC became a wholly owned subsidiary of the Company and became a consolidated entity under Solar Integrated Roofing Corporation (the “Company”). Cornerstone is a general construction company operating in the United States, particularly within the Midwest and East Coast. As a result of the acquisition the Company had expected to expand the Company’s solar efforts into these other regions of the United States.

The following table summarizes the consideration transferred to acquire Cornerstone and the amounts of identified assets acquired and liabilities assumed at the acquisition date.

Fair value of consideration transferred:
Cash:	$	3,000,000
Common Shares:	$	36,450,000
Total	$	39,450,000

The Company issued 45,000,000 amount of common shares that had a total fair value of $36,900,000 based on the closing market price of $0.81 per share on April 1, 2021, the acquisition date.

Recognized amounts of identifiable assets acquired, and liabilities assumed:

Assets:
Cash	$	176,403
Accounts receivable		959,423
Other current assets		1,928,743
Fixed assets		197,565
Total Assets:	$	3,262,134
Liabilities:
Accounts payable and accrued expenses	$	946,810
Notes payable		647,663
Customer deposits		1,054,692
Total Liabilities:	$	2,649,165
Goodwill:	$	38,837,031

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The goodwill was attributable to the workforce of the acquired business and the significant synergies expected to arise after the Company’s acquisition of Cornerstone. The goodwill is not deductible for tax purposes. All of Cornerstone’s goodwill was recorded in the Company’s intangible assets as a non-current asset and recorded on the balance sheet of the Company. The carrying value of the Company’s goodwill is reviewed annually for impairment by management of the Company and was impaired at 100% at December 31, 2021 due to pending lawsuit that effected termination of the agreement between both parties effective May 31, 2022. On August 29, 2022, the Company received and cancelled the previously issued 45,000,000 shares of common stock issued in connection with the merger to the entity’s previous ownership group. Also on August 29, 2022, the Company issued in settlement of the related legal proceedings 8,000,000 in common stock valued at $1,748,000 from the stock price on the day of legal settlement. All Cornerstone assets and liabilities were eliminated from the Company’s consolidated financial statements on May 31, 2022.

Pacific Lighting Management, Inc.

On March 16, 2021, the Company acquired Pacific Lighting Management, Inc. (“PlemCo”), which is a provider of energy and water conservation and renewable energy design, consulting and installation services to businesses of all sizes throughout the US. The overall purchase price of 60% of PlemCo was $1,500,000 in cash. In consolidation the overall net assets of the Company amounted to $273,000, with approximately $1.2 million assigned to Goodwill.

Fair value of consideration transferred:
Cash:	$	1,500,000
Total	$	1,500,000

Recognized amounts of identifiable assets acquired, and liabilities assumed:

Assets:
Cash	$	549,847
Accounts receivable		14,537
Fixed assets		2,440
Total Assets:	$	566,824
Liabilities:
Accounts payable and accrued expenses	$	52,800
Notes payable		241,442
Total Liabilities:	$	294,242
Goodwill:	$	1,227,418

The goodwill is attributable to the workforce of the acquired business and the significant synergies expected to arise from the acquisition of the installation and sales force of PlemCo. The goodwill is not deductible for tax purposes. All PlemCo’s goodwill was recorded in the Company’s intangible assets as a non-current asset and recorded on the balance sheet of the Company. The carrying value of the Company’s goodwill is reviewed annually for impairment by management of the Company. No impairment of PlemCo goodwill was noted during the nine months ended September 30, 2022 or 2021.

Balance Authority LLC

On April 28, 2021, the Company completed the acquisition of 100% of the membership interest in Balance Authority LLC (“Balance”). As of this date Balance Authority LLC became a wholly owned subsidiary of the Company and became a consolidated entity under Solar Integrated Roofing Corporation (the “Company”). Balance is a business consulting management company that provides supplemental organizational and managerial services to companies in the scientific, management and technical services industry. As a result of the acquisition the Company is expected to centralize administrative and supplemental services throughout Solar Integrated Roofing Corporation and its’ subsidiaries.

The following table summarizes the consideration transferred to acquire Balance and the amounts of identified assets acquired and liabilities assumed at the acquisition date.

Fair value of consideration transferred:
Cash:	$	2,700,000
Common Shares:	$	6,950,000
Total	$	9,650,000

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The Company issued 10,000,000 shares of common shares that had a total fair value of $6,950,000 based on the closing market price of $0.69 per share on April 28, 2021, the acquisition date. $1,500,000 cash was paid at the closing. Two additional payments of $600,000 each were due six and twelve months from acquisition date. During the nine months ended September 30, 2022, $545,427 was paid towards the first $600,000 payment due. The remaining balance together with second payment of $600,000 totaling $654,473 is outstanding in the form of related party note payable.

Recognized amounts of identifiable assets acquired, and liabilities assumed:

Assets:
Cash	$	131,188
Accounts receivable		38,237
Fixed assets		45,715
Investment		23,783
Total Assets:	$	238,923
Liabilities:
Accrued expenses	$	121,344
Notes payable		555,891
Total Liabilities:	$	677,235
Goodwill:	$	10,088,312

The goodwill is attributable to the workforce of the acquired business and the significant synergies expected to arise after the Company’s acquisition of Balance. The goodwill is not deductible for tax purposes. All of Balance’s goodwill was recorded in the Company’s intangible assets as a non-current asset and recorded on the balance sheet of the Company. The carrying value of the Company’s goodwill is reviewed annually for impairment by management of the Company. No impairment of Balance was noted during the nine months ended September 30, 2022 or 2021.

Kinetic Investments, Inc. dba Future Home Power

On June 1, 2021, the Company completed the acquisition of 100% of the membership interest in Future Home Power (“FHP”). As of this date FHP became a wholly owned subsidiary of the Company and became a consolidated entity under Solar Integrated Roofing Corporation (the “Company”). FHP specializes in the sales of residential solar panels, roofing repair and construction as well as battery storage – partnering with local installers to finalize on-site installation. As a result of the acquisition of FHP the Company is expected to expand efforts in sales and increase the sales force and outreach of the Company through the numerous sales associates FHP employs.

The following table summarizes the consideration transferred to acquire FHP and the amounts of identified assets acquired and liabilities assumed at the acquisition date.

Fair value of consideration transferred:
Cash:	$	5,200,000
Common Shares:	$	23,548,850
Total	$	28,748,850

The Company also issued 40 shares of preferred stock class D, valued at $0 in the acquisition of FHP. The 51,000,000 shares of common shares had a total fair value of $20,236,900 based on the closing market price of $0.40 per share on June 1, 2021, the acquisition date. As of December 31, 2021, 29,000,000 of the 51,000,000 shares of common stock had not yet been issued and have been included in stock payable in the amount of $9,137,900. Out of $5,200,000 cash, $3,200,000 was paid and $2,000,000 is accrued as related party transaction. During the nine months ended September 30, 2021, $3,200,000 was paid in cash. During the nine months ended September 30, 2022, additional 9,739,242 shares of common stock were issued valued $2,873,950.

Recognized amounts of identifiable assets acquired, and liabilities assumed:

Assets:	None
Liabilities:
Accounts payable and accrued liabilities	$	561,022
Goodwill:	$	28,089,422

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The goodwill is attributable to the workforce of the acquired business and the significant synergies expected to arise after the Company’s acquisition of FHP. The goodwill is not deductible for tax purposes. All of FHP’s goodwill was recorded in the Company’s intangible assets as a non-current asset and recorded on the balance sheet of the Company. The carrying value of the Company’s goodwill is reviewed annually for impairment by management of the Company. No impairment of the FHP goodwill was noted during the nine months ended September 30, 2022 or 2021.

USA Solar Networks LLC

On June 30, 2021, the Company completed the acquisition of 60% of the membership interest in USA Solar Networks LLC (“USA Solar”) and additional 40% on October 6, 2021. As of June 30, 2021, USA Solar became a consolidated entity under Solar Integrated Roofing Corporation (the “Company”), and on October 6, 2021, became a wholly owned subsidiary of the Company. USA Solar helps customers install the best available solar energy or Electric Vehicle (“EV”) charging system by comparing local installers and financing options. USA Solar also works on large scale solar fields, micro-grids, commercial solar systems and renewable energy solutions. As a result of the acquisition of USA Solar the Company is expected to expand within the commercial solar space and increase sales from EV installations and other renewable energy opportunities.

The following table summarizes the consideration transferred to acquire USA Solar and the amounts of identified assets acquired and liabilities assumed at the acquisition date.

Fair value of consideration transferred:
Cash:	$	1,200,000
Common Shares:	$	8,706,300
Total	$	9,906,300

The Company issued 12,000,000 shares of common shares that had a total fair value of $6,054,000 based on the closing market price of $0.5045 per share on the June 30, 2021 acquisition date. As of December 31, 2021, 7,000,000 shares to be issued for additional 40% of USA Solar were included in stock payable in the amount of $2,652,300 based on closing market price of $0.38 per share on October 6, 2021. The Company paid $200,000 cash on October 6, 2021, $255,015 during the nine months ended September 30, 2022. $744,985 and $1,000,000 is due and included in due to related parties at September 30, 2022 and December 31, 2021, respectively.

Recognized amounts of identifiable assets acquired, and liabilities assumed:

Assets:	None
Liabilities:
Note payable	$	53,131
Goodwill:	$	9,959,431

The goodwill is attributable to the workforce of the acquired business and the significant synergies expected to arise after the Company’s acquisition of USA Solar. The goodwill is not deductible for tax purposes. All of USA Solar’s goodwill was recorded in the Company’s intangible assets as a non-current asset and recorded on the balance sheet of the Company. The carrying value of the Company’s goodwill is reviewed annually for impairment by management of the Company. No impairment of the USA Solar goodwill was noted during the nine months ended September 30, 2022 or 2021.

SunUp Solar LLC

On June 30, 2021, the Company completed the acquisition of 100% of the membership interest in SunUp Solar LLC (“SunUp”). As of this date SunUp became a wholly owned subsidiary of the Company and became a consolidated entity under Solar Integrated Roofing Corp. (the “Company”). SunUp offers solar education and resources for consumers looking to invest in solar powered energy for the homes and vehicles. As a result of the acquisition of SunUp the Company is expected to expand selling efforts and increase the sales force and outreach of the Company through the numerous sales associates SunUp employs.

The following table summarizes the consideration transferred to acquire SunUp and the amounts of identified assets acquired and liabilities assumed at the acquisition date.

Fair value of consideration transferred:
Cash:	$	200,000
Common Shares:	$	100,900
Total	$	300,900

The Company issued 200,000 shares of common shares had a total fair value of $100,900 based on the closing market price of $0.51 per share on June 30, 2021, the acquisition date. During the nine months ended September 30, 2021 no cash was paid in consideration to the acquisition of SunUp Solar. $200,000 was paid subsequently during 2021.

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Recognized amounts of identifiable assets acquired, and liabilities assumed:

Assets:	None
Liabilities:	None
Goodwill:	$	300,900

The goodwill is attributable to the workforce of the acquired business and the significant synergies expected to arise after the Company’s acquisition of SunUp. The goodwill is not deductible for tax purposes. All of SunUp’s goodwill was recorded in the Company’s intangible assets as a non-current asset and recorded on the balance sheet of the Company. The carrying value of the Company’s goodwill is reviewed annually for impairment by management of the Company.No impairment of the SunUp goodwill was noted during the nine months ended September 30, 2022 or 2021.

Renovation Roofing, Inc.

On July 3, 2021, the Company completed the acquisition of 100% of the membership interest in Renovation Roofing, Inc. (“Renovate”), whereby Renovate became a wholly owned subsidiary of the Company. Renovate is a full-service roofing company with licenses to install and construct various types of roofing projects. As a result of the acquisition of Renovate the Company is expected to expand installation efforts in the residential solar panels the Company sells.

The acquired business contributed revenue of $506,610 and net earnings from operations of $103,269 to the Company from the period from July 3, 2021 through December 31, 2021.

The following table summarizes the consideration transferred to acquire Renovation Roofing, Inc. and the amounts of identified assets acquired and liabilities assumed at the acquisition date.

Fair value of consideration transferred:
Cash	$	50,000
Common Shares	$	252,250
Total	$	302,250

The Company issued 500,000 shares of common shares had a total fair value of $252,250 based on the closing market price of $0.51 per share on July 3, 2021, the acquisition date.

Recognized amounts of identifiable assets acquired, and liabilities assumed:

Assets:
Cash	$	137,222
Accounts receivable		83,837
Total assets:	$	221,059
Liabilities	None
Goodwill	$	81,191

The goodwill is attributable to the workforce of the acquired business and the significant synergies expected to arise after the Company’s acquisition of Renovate. The goodwill is not deductible for tax purposes and was recorded as an intangible asset on the Company’s balance sheet. The carrying value of the Company’s goodwill is reviewed annually for impairment by management of the Company, and no impairment of the Renovation Roofing Inc. goodwill was noted during the nine months ended September 30, 2022 or 2021.

NOTE 17 – COMMITMENTS AND CONTINGENCIES

Litigation

In the normal course of business, the Company may be involved in legal proceedings, claims and assessments arising in the ordinary course of business. Such matters are subject to many uncertainties, and outcomes are not predictable with assurance. Legal fees for such matters are expensed as incurred and we accrue for adverse outcomes as they become probable and estimable.

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Below is the summary of current legal proceedings:

1.	United Stated District Court, District of Arizona Case No. 2:21-cv-01076-JAT styled as SinglePoint Direct Solar, LLC v. Pablo Diaz Curiel, et al. -- This is a pending lawsuit in the United States District of Arizona initiated in June 2021. The principal parties are SinglePoint Inc. (“SING”), SinglePoint Direct (“SDS”), Greg Lambrecht, Corey Lambrecht, William Ralston, SIRC, Pablo Diaz (“Diaz”), and USA Solar Networks, LLC (“USN”). This case concerns the business relationship between SING and Diaz regarding SDS, which was formed after Diaz entered into an Asset Purchase Agreement with SING in February 2019. The litigation first started with Diaz’s lawsuit against SING and SDS (Case No. 2:21-cv-00989-MSB), which was eventually consolidated with this case (Case No. 2:21-cv-01076-JAT). While the majority of claims brought against SIRC and USA Solar are pleaded generally against all defendants, SING’s specific claims against SIRC and USA Solar arise out of SDS’s alleged confidential and proprietary information, trade secrets, and other assets for use in their business operations. SING has alleged two claims against SIRC: false designation of origin, and misappropriation of trade secrets. In or around August 2021, SING sought to enjoin SIRC, Diaz, USN and others, however, the court denied SING’s request finding that, inter alia, SING’s claims were unlikely to succeed on the merits. SIRC is contesting the claims.
2.	Superior Court of California, County of San Diego Case Nos. 30-z0a I-0 Iz34T0s-cU-BC-ClC and 37 -2022-000 1 7 1 7 7 -C U -BC-CTL styled as Heather Griffin, et al. vs. SIRC, et al. This lawsuit was initiated in the Superior Court of California, County of Orange in December 2021. The principal parties are SIRC, David Massey, Narrate, LLC (“Narrate”), Heather Griffin (“Griffin”), and Josiah Carroll (“Carroll”). The claims factually arise out of Heather Griffin and Josiah Carroll’s sale of Narrate LLC to SIRC, their subsequent executive employment agreement, and their requested relief for damages for an alleged breach by SIRC. All claims were dismissed for improper venue and transferred to Superior Court of California, County of San Diego. SIRC is contesting the claims. The matter is in very early pleading stages.
3.	Eighth Judicial District Court of Nevada Case No: A-22-852172-C styled as Milholland Family Trust LP v. Solar Integrated Roofing Corp. -- This lawsuit was initiated in the Eighth Judicial District Court of Nevada on May 5, 2022. The principal parties are SIRC and Milholland Family Trust, LP (“MFT”). This lawsuit pertains to an alleged breach of contract between SIRC and MFT for approximately $7 million dollars. SIRC contested the claims, and in or around September 2, 2022, a settlement was reached between the parties. The amount is accrued as a liability at September 30, 2022 and December 31, 2021.
4.	SIRC v. Pablo Diaz Curiel – This is a pending lawsuit in the Superior Court of California, County of San Diego (Case No. 37-2022-00036984-CU-FR-CTL). SIRC initiated suit on September 15, 2022, alleging, among other things, that Diaz fraudulently induced SIRC into acquiring a 60% interest in USA Solar Networks LLC. SIRC obtained a temporary restraining order against Diaz preventing him from selling the 12 million shares of SIRC stock he received through the acquisition. SIRC intends to amend the complaint to seek damages related to the acquisition of the remaining 40% interest in USA Solar as well. In the suit, SIRC seeks rescission and/or monetary damages in excess of $40 million. The matter is still in the pleading stage.

NOTE 18 – SUBSEQUENT EVENTS

In accordance with ASC 855-10 management has performed an evaluation of subsequent events through November 14, 2022, the date that the financial statements were available to be issued, and did not, other than what is disclosed in the below, identify any further subsequent events requiring disclosure:

October 5, 2022 – 37,000,000 shares of common stock issued to David Massey for conversion of 3,700,000 shares of Class B preferred stock.

October 18,2022 – 1,925,134 shares of common stock issued to consultant at the price of $0.187 per share for a total of $360,000 for services.

October 18, 2022 – 630,000 shares of common stock to employees as compensation for a price of $0.287 per share valued $180,810.

October 26, 2022 – 2,717,351 shares of common stock issued to Continuation Capital Inc. for consulting services at a price of $0.18 per share valued $489,123.

On October 26, 2022 – 552,792 shares of common stock issued for consulting services at the price of $0.18 per share valued $99,503.

October 26, 2022 – 1,111,112 shares of common stock issued to an investor for cash at the price of $0.09 per share valued $100,000.

October 26, 2022 – 3,500,000 shares of preferred stock class B issued to debt holder at the price of $1.70 per share for consideration valued $5,950,000.

October 31, 2022 - authorized shares of common stock increased from 650,000,000 shares to 900,000,000 shares.

November 2, 2022 - 3,500,000 shares of preferred stock clad B converted into 35,000,000 shares of common stock.

November 15, 2022 – 2,800,000 shares of common stock issued for compensation for services at the price of $0.17 per share valued $476,000

November 17, 2022 – 1,344,327 shares of common stock issued for debt at the price of $0.11 per share valued $150,000.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 As used in this periodic report, unless the context otherwise requires, the terms the “Company,” “Registrant,” “registrant,” “we,” “us,” “our,” or “SIRC” refer to Solar Integrated Roofing Corp., a Nevada corporation.

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Rule 175 of the Securities Act of 1933, as amended, and Rule 3b-6 of the Securities Act of 1934, as amended, that involve substantial risks and uncertainties. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about our industry, our beliefs and our assumptions. Words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks” and “estimates” and variations of these words and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. You should not place undue reliance on these forward-looking statements, which apply only as of the date of this Form 10-Q. Investors should carefully consider all of such risks, as well as the risks included in our Registration Statement on Form 10, as amended, before making an investment decision with respect to the Company’s stock. The following discussion and analysis should be read in conjunction with our consolidated financial statements and summary of selected financial data. Such discussion represents only the best present assessment from our management.

Business Overview

Solar Integrated Roofing Corp. is an alternative energy solution provider in North America. The Company’s business model consists of the following revenue producing divisions:

· Roofing

o Residential

o Commercial

o Government

o Roofing Claims Management

· Solar

o Residential

o Commercial

■ Microgrids

· Electric Vehicle Charging

· Commercial Solar Finance

Management of these divisions is conducted by a Senior Management Team with a cumulative 60 years’ experience in the alternative energy space. Further, each division is managed by an industry expert in that specific market with extensive division-based experience.

The Company’s previous operations took place primarily in the State of California, but in 2021, generated revenue in 34 states. Further, over the last couple of years from 2020-2022, SIRC sourced, onboarded, and trained approximately 250 sales representatives that sell SIRC products that will allow it to expand its footprint on a national and even international scale.

SIRC is also heavily involved in finding cutting-edge technologies in the alternative energy space that creates the best economic solution for the client, as well as marketing and development of microgrid projects, which will provide businesses throughout North America an energy solution that is self-sustainable, reliant and that will not fall victim to grid instability creating compelling economics for the SIRC client.

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In addition to growth resulting from increased sales efforts, the Company is expanding its reach and increasing its growth potential by acquiring other established alternative energy companies. We believe our continued execution of the Company’s business plan will result in our Company being recognized as a national leader in the alternative energy and roofing industries.

Our principal executive office is located at 2831 St. Rose Pkwy # 200, Henderson, NV 89052. The telephone number at our principal executive office is (702) 589-4651. Our website is www.solarintegratedroofing.com. Our fiscal year end is December 31.

Management’s Plan of Operation

Management is focused on several avenues of business development, including, but not limited to, joint ventures, mergers and acquisitions, and licensing agreements, for the purpose of diversifying corporate assets. While no assurances are expressed or implied that any agreement will be consummated in the future, the Company is committed toward executing on opportunities at hand.

We currently are planning to expand our solar installation business. We plan to continue to execute our marketing and sales strategy in California and, with additional capital, we plan to continue to expand our business in each region that we operate. The planned expansion is expected to occur through acquiring smaller installation companies in targeted regions and/or through the establishment of subsidiaries in these regions, which we believe will boost our installation profits. We have also started on new commercial power projects inside and outside California, which we expect to expand our installation business revenues significantly.

Critical Accounting Policies and Estimates

Management’s discussion and analysis of financial condition and results of operations are based upon our accompanying financial statements, which have been prepared in conformity with U.S. generally accepted accounting principles, or U.S. GAAP, and which requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. Note 2. Significant Accounting Policies and Recent Accounting Pronouncements, to the financial statements, describes the significant accounting policies and methods used in the preparation of the Company’s financial statements. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances. These estimates are the basis for our judgments about the carrying values of assets and liabilities, which in turn may impact our reported revenue and expenses. Our actual results could differ significantly from these estimates under different assumptions or conditions.

Recently Issued Accounting Pronouncements

Please see Note 2 to the consolidated financial statements, Significant Accounting Policies and Recent Accounting Pronouncements, for a discussion of recent accounting pronouncements and their effect, if any, on our condensed consolidated unaudited financial statements.

Results of Operations

We currently anticipate that continuing operations for the next 12 months from the date of this filing is very much dependent upon our ability to raise equity from existing or new financing sources. There can be no assurance as to the availability or terms upon which such financing and capital might be available.

The Company’s ability to continue as a going concern is dependent upon its ability to repay or settle its current indebtedness, generate positive cash flow from an operating company, and/or raise capital through equity and debt financing or other means on desirable terms. If the Company is unable to obtain additional funds when they are required or if the funds cannot be obtained on favorable terms, management may be required to restructure the Company or cease operations.

The Company is aware that its current cash on hand will not be sufficient to fund its projected operating requirements through the month of December 2022 and is pursuing alternative opportunities to funding.

The Company intends to raise additional capital through private placements of debt and equity securities, but there can be no assurance that these funds will be available on terms acceptable to the Company, or will be sufficient to enable the Company to fully complete its development activities or sustain operations. If the Company is unable to raise sufficient additional funds, it will have to develop and implement a plan to further extend payables, reduce overhead, or scale back its current business plan until sufficient additional capital is raised to support further operations. There can be no assurance that such a plan will be successful.

For the three months ended September 30, 2022 and 2021

Revenue

	For the three months ended						Change
	September 30,						2022 vs. 2021
	2022			2021			$			%
Revenue	$	57,267,460		$	13,224,759		$	44,042,701			333.0	%
Cost of sales		(43,071,432	)		(8,418,340	)		(34,653,092	)		411.6	%
Gross profit		14,196,028			4,806,419			9,389,609			195.4	%

During the three months ended September 30, 2022, compared to the three months ended September 30, 2021, revenue increased by $44,042,701, or approximately 333%, due to the Company completing acquisitions, entering into new markets, and securing new commercial projects. Revenue increased significantly from that of the prior year in part because the Company was able to secure and recognize revenue from newly acquired commercial projects, which have significantly increased the Company’s revenue over that of the prior year as the Company was able to focus on additional revenue that was not solely from roofing and residential solar projects, which were previously the Company’s primary focus and source of revenue. Gross profit increased by $9,389,609, or approximately 195.4% accordingly.

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Operating Expenses

Operating expenses consist mainly of compensation expenses and associated fringe benefits, as well as management, business development, accounting, information technology and administration costs, recruiting, consulting and professional services, travel and meals, sales commissions, facilities, depreciation and other office expenses.

Below is a summary of our operating expenses:

	For the three months ended				Change
	September 30,				2022 vs. 2021
	2022		2021		$			%
Salaries and wages	$	3,989,043	$	2,863,858	$	1,125,185			39.3	%
Professional fees		1,400,473		1,585,673		(185,200	)		(11.7	)%
Depreciation expense		69,807		222,613		(152,806	)		(68.6	)%
Marketing		186,093		229,259		(43,166	)		(18.8	)%
General and administrative		1,179,561		1,275,383		(95,822	)		(7.5	)%
Total	$	6,824,977	$	6,176,786	$	(648,191	)		(10.5	)%

The Company experienced a decrease in expenses during the three months ended September 30, 2022, compared to the three months ended September 30, 2021, due to implementing shared services and consolidating and reducing operating expenses across acquired entities. Salaries and wages increased by $1,125,185, or approximately 39.3% due primarily to the issuance of approximately $1.3 million in stock options as compensation to executives; marketing and advertising decreased by $43,166, or approximately 18.8%; depreciation expense decreased by $152,806, or approximately 68.6%; general and administrative expenses decreased by $95,822, or approximately 7.5%; and professional fees decreased by $185,200, or approximately 11.7%.

Other Income (Expense)

Below is a summary of our other income (expense):

	For the Three months ended						Change
	September 30,						2022 vs. 2021
	2022			2021			$			%
Interest expense	$	(1,077,710	)		(586,638	)	$	(491,072	)		83.7	%
Other income (expense)		-			(108,489	)		108,489			(100.0	)%
PPP loans forgiveness		-			20,830			(20,830	)		(100.0	)%
Gain (loss) on change in fair value of derivative liability		(53,295	)		359,009			(412,304	)		(114.8	)%
Other Income (expense), net	$	(1,131,005	)	$	(315,288	)	$	(815,717	)		58.7	%

Interest expense increased by $491,072, or approximately 83.7%, during the three months ended September 30, 2022, compared to the three months ended September 30, 2021, due to issuances of convertible debt accruing interest and due to warrant expense. Change in fair value of derivative liability decreased by $412,304, or approximately 114.8%, during the three months ended September 30, 2022. There was also a decrease in other income of $20,830 during the three months ended September 30, 2022, due to forgiveness of Paycheck Protection Program (PPP) loans during the three months ended September 30, 2021. Miscellaneous other income (expense) increased by $108,489 during the three months ended September 30, 2022, as other expense of $108,489 consisting of asset impairment was incurred during the three months ended September 30, 2021 (with no other expense during the three months ended September 30, 2022).

Net Income (Loss)

We generated net income of $6,240,046 and net loss of $1,685,655 for the three months ended September 30, 2022 and 2021, respectively, primarily as a result of the above-mentioned factors.

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For the nine months ended September 30, 2022 and 2021

Revenue

	For the nine months ended						Change
	September 30,						2022 vs. 2021
	2022			2021			$			%
Revenue	$	150,541,535		$	24,674,807		$	125,866,728			510.1	%
Cost of sales		(94,558,164	)		(19,484,806	)		(75,073,358	)		385.3	%
Gross profit	$	55,983,371		$	5,190,001		$	50,793,370			978.7	%

During the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021, revenue increased by $125,866,728, or approximately 510.1%, due to the Company completing acquisitions, entering into new markets, and securing new commercial projects. Revenue increased significantly from that of the prior year in part because the Company was able to secure and recognize revenue from newly acquired commercial projects, which have significantly increased the Company’s revenue over that of the prior year as the Company was able to focus on additional revenue that was not solely from roofing and residential solar projects, which were previously the Company’s primary focus and source of revenue. Gross profit increased by $50,793,370, or approximately 978.7%, accordingly. The significant increase in gross profit in 2022 as compared to 2021 was primarily the result of the Company’s acquisitions of several entities that increased the Company’s operational footprint and the Company’s focus on transforming from a traditional roofing company into an alternative energy company, with operations in the residential and commercial solar industry, including providing services in connection with microgrids and electric vehicle (“EV”) charging station installation.

Operating Expenses

Operating expenses consist mainly of compensation expenses and associated fringe benefits, as well as management, business development, accounting, information technology and administration costs, recruiting, consulting and professional services, travel and meals, sales commissions, facilities, depreciation and other office expenses.

Below is a summary of our operating expenses:

	For the Nine months ended				Change
	September 30,				2022 vs. 2021
	2022		2021		$			%
Salaries and wages	$	12,437,116	$	5,488,167	$	6,948,949			126.6	%
Professional fees		4,499,397		4,474,413		24,984			0.6	%
Depreciation expense		277,601		303,982		(26,381	)		(8.7	)%
Marketing		445,828		575,038		(129,210	)		(22.5	)%
General and administrative		3,768,121		3,136,619		631,502			20.1	%
Total	$	21,428,063	$	13,978,219		7,449,844			53.3	%

The Company experienced an increase in expenses during the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021, due to entering new markets and the addition of additional business units resulting in an increase in personnel, additional general and administrative expenses, and increased professional fees. Salaries and wages increased by $6,948,949, or approximately 126.6% due primarily to stock-based compensation of approximately $4.5 million; marketing and advertising decreased by $129,210, or approximately 22.5%; depreciation expense decreased by $26,381, or approximately 8.7%; general and administrative expenses increased by $631,502, or approximately 20.1%; and professional fees increased by $24,984 or 0.6%.

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Other Income (Expense)

Below is a summary of our other income (expense):

	For the Nine months ended						Change
	September 30,						2022 vs. 2021
	2022			2021			$			%
Interest expense	$	(2,190,637	)		(949,454	)	$	(1,241,183	)		(130.7	)%
Other income (expense)		(253,707	)		90,793			(344,500	)		(379.4	)%
PPP loans forgiveness		-			1,018,130		$	(1,018,130	)		100.0	%
Loss on debt modification		(1,268,933	)		-		$	(1,268,933	)		100.0	%
Gain (loss) on change in fair value of derivative liability		(43,246	)		1,285,675		$	(1,301,921	)		103.4	%
Other Income (Expense), net	$	(3,756,523	)	$	1,445,144		$	(5,201,667	)		(359.9	)%

Interest expense increased by $1,241,183, or approximately 130.7%, during the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021, due to issuances of convertible debt accruing interest and warrant and option expense. Loss on debt modification increased by $1,268,933 during the nine months ended September 30, 2022, due to the consolidation of various convertible notes with a lender into a single promissory note with modified terms that included the removal of conversion provisions. No such transactions occurred during the same period for 2021. Change in fair value of derivative liability decreased by $1,301,921, or approximately 103.4%, during the nine months ended September 30, 2022. There was also an increase in other income of $1,018,130 during the nine months ended September 30, 2022, due to forgiveness of Paycheck Protection Program (PPP) loans during the nine months ended September 30, 2021. Miscellaneous other income (expense) decreased by $344,500, or approximately 379.4%, during the nine months ended September 30, 2022, as compared to the same period for 2021.

Net Income (Loss)

We generated net income of $30,798,785 and a loss of $7,343,074 for the nine months ended September 30, 2022 and 2021, respectively, primarily as a result of the above-mentioned factors.

Liquidity and Capital Resources

Projected Future Working Capital Requirements - Next 12 Months

As of September 30, 2022, we had $480,141 in cash compared to $1,124,533 of cash as of December 31, 2021, and as of the date of this filing, we have approximately $500,000 in cash. We currently anticipate that future budget expenditures will be approximately $30 million for the next 12 months.

Our ability to successfully raise sufficient funds through the sale of equity securities, when needed, is subject to many risks and uncertainties, and even if we are successful, future equity issuances would result in dilution to our existing stockholders.

If we are unable to generate enough working capital from our current or future financing agreements with when needed or secure additional sources of funding, it may be necessary to significantly reduce our current rate of spending through reductions in staff and delaying, scaling back or stopping solar programs. Insufficient liquidity may also require us to relinquish greater rights to product candidates at an earlier stage of development or on less favorable terms to us and our stockholders than we would otherwise choose in order to obtain up-front license fees needed to fund operations. These events could prevent us from successfully executing our operating plan.

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Cash Flows

The following table provides information regarding our cash position, cash flows and capital expenditures for the nine months ended September 30, 2022 and 2021:

	Nine months Ended						Change
	September 30,						Increase/
	2022			2021			(Decrease)
							%
Net cash used in operating activities	$	(5,609,232	)	$	(1,322,756	)		324.1	%
Net cash used in investing activities		(759,560	)		(11,212,644	)		(93.2	)%
Net cash provided by financing activities		5,724,400			16,084,090			(64.4	)%
Net increase (decrease) in cash	$	(644,392	)	$	3,548,690			(118.2	)%

Net Cash Used in Operating Activities

Net cash used in operating activities for the nine months ended September 30, 2022 and 2021, was $5,669,232 and $1,322,756, respectively.

Net cash used in operating activities for the nine months ended September 30, 2022, was due to net income of $30,798,785, which was increased by stock-based compensation of $3,260,418, loss on debt modification of $1,268,933, depreciation of $277,601, warrant expense of $147,500, stock option expense of $1,259,300, amortization of debt discount of $6,724, change in fair market value of derivative liability of $43,246, offset by net change in operating assets and liabilities of $(42,671,738). Comparatively, during the nine months ended September 30, 2021, net cash used in operating activities was comprised of net loss of $7,343,074, which was offset by stock-based compensation of $928,650, amortization of debt discount of $186,146, and depreciation of $303,982, and decreased by change in fair market value of derivative liability of $(1,285,675), PPP loan forgiveness of $(1,018,130), and net change in operating assets and liabilities of $5,887,216.

The increase in net cash used in operating activities from $1,322,756 in the nine months ended September 30, 2021, to $5,609,232 in the nine months ended September 30, 2022, was primarily due to (i) an increase in stock-based compensation from $928,650 in 2021 to $3,260,418 in 2022, (ii) a decrease in the fair value of derivative liabilities of $1,328,921 in the nine months 2022 as compared to 2021, (iii) PPP loan forgiveness of $1,018,130 during the nine months 2021 as compared to $0 in 2022, and (iv) increase in warrant and stock option expense of $1,406,800, (v) change in accounts receivable and work in progress receivables increasing by $43,137,020 in 2022 as a result of the Company starting to recognize revenue in accordance with contractual performance obligation milestones and accruing receivables based on reaching specific milestones; partially offset by (i) loss on debt modification in 2022 of $1,268,933, due to converting convertible notes with accrued interest into a promissory note, as compared to $0 in loss on debt modification in 2021, (ii) the change in prepaid expenses and other assets decreasing by $1,080,614 from 2021 to 2022 due to the Company prepaying D&O, worker’s compensation and general liability insurance, prepaying interest on debt and an interest receivable, and (iii) the change in accounts payable and accrued liabilities decreasing by $774,338 during nine months ended September 30, 2022 due to increasing operations as a result of operational acquisitions during 2021 and related expenses.

Net Cash Used in Investing Activities 

Net cash used in investing activities for the nine months ended September 30, 2022 and 2021, was $759,560 and $11,212,644, respectively. This was the result of cash paid for acquisitions of subsidiaries of $600,000 and $10,100,000 and the purchase of property and equipment of $159,560 and $1,112,644 during the nine months ended September 30, 2022 and 2021, respectively.

The decrease in net cash used in investing activities from $11,212,644 in the nine months ended September 30, 2021, to $759,560 in the nine months ended September 30, 2022, was primarily due to (i) a decrease in cash paid in acquisitions of subsidiaries by $9,500,000 as the Company did not complete any acquisitions in 2022, and (ii) a decrease in purchase of property and equipment by $953,084 due to acquisition of fewer vehicles during 2022.

Net Cash Provided by Financing Activities

Net cash provided by financing activities for the nine months ended September 30, 2022 and 2021, was $5,724,400 and $16,084,090, respectively. This was the result of proceeds from notes payable of $5,452,105 and $6,813,218, repayments on notes payable of $2,762,245 and $1,841,218, proceeds from convertible notes payable of $2,440,000 and $21,055,610, proceeds from exercise of warrants of $0 and $16,480, repurchase of preferred stock class B for $0 and $10,000,00 and common stock for $0 and $100,000, and proceeds from the sale of common stock of $594,540 and $140,000 during the nine months ended September 30, 2022 and 2021, respectively.

The decrease in net cash used in financing activities from $16,084,090 during the nine months ended September 30, 2021, to $5,724,400 during the nine months ended September 30, 2022, was primarily due to (i) a decrease in net proceeds from notes payable in 2022 compared to 2021 by $1,361,113 as the Company received $56,452,105 in loans and repaid $2,762,245 during the nine months ended September 30, 2022, and (ii) an increase in proceeds from selling common stock for $594,540 during 2022, as compared to $140,000 during 2021 and (iii) a decrease in net proceeds from convertible notes payable in 2022 compared to 2021 by $18,615,610.

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As of September 30, 2022, the Company had $480,141 in cash to fund its operations. The Company does not believe its current cash balance will be sufficient to allow the Company to fund its planned operating activities for the next twelve months. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operations via debt and equity financing.

Commitments and Contingencies

Please see Note 17 Commitments and Contingencies of the Notes to Consolidated Unaudited Financial Statements included in Part I, Item 1 in this Quarterly Report on Form 10-Q, for a discussion of recent contractual commitments and contingent liability.

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements, as defined in Item 304(a)(4)(ii) of Regulation S-K under the Securities Exchange Act of 1934, as amended.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We have established disclosure controls and procedures to ensure that the information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

As of September 30, 2022, management, with the participation of our principal executive officer and principal financial officer, carried out an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act). Based on such evaluation, as of September 30, 2022, the principal executive officer and principal financial officer of the Company have concluded that the Company’s disclosure controls and procedures are not effective.

Changes in Internal Controls

There have been no changes in our internal control over financial reporting during the quarter ended September 30, 2022, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are not presently a party to any material litigation, nor to the knowledge of management is any litigation threatened against us, which may materially affect us, other than as set forth herein.

SinglePoint Direct Solar, LLC v. Pablo Diaz Curiel, et al. – This is a pending lawsuit in the United States District Court for the District of Arizona initiated in June 2021 (Case No. 2:21-cv-01076-JAT). The principal parties are SinglePoint Inc. (“SING”), SinglePoint Direct (“SDS”), Greg Lambrecht, Corey Lambrecht, William Ralston, SIRC, Pablo Diaz (“Diaz”), and USA Solar Networks, LLC (“USN”). This case concerns the business relationship between SING and Diaz regarding SDS, which was formed after Diaz entered into an Asset Purchase Agreement with SING in February 2019. The litigation first started with Diaz’s lawsuit against SING and SDS (Case No. 2:21-cv-00989-MSB), which was eventually consolidated with this case (Case No. 2:21-cv-01076-JAT). While the majority of claims brought against SIRC and USA Solar are pleaded generally against all defendants, SING’s specific claims against SIRC and USA Solar arise out of SDS’s alleged confidential and proprietary information, trade secrets, and other assets for use in their business operations. SING has alleged two claims against SIRC: false designation of origin, and misappropriation of trade secrets. In or around August 2021, SING sought to enjoin SIRC, Diaz, USN and others, however, the court denied SING’s request finding that, inter alia, SING’s claims were unlikely to succeed on the merits. SIRC is contesting the claims. The lawsuit is in the discovery phase.

Heather Griffin, et al. vs. SIRC, et al. – This lawsuit was initiated in the Superior Court of California, County of Orange in December 2021 (Case Nos. 30-z0a I-0 Iz34T0s-cU-BC-ClC and 37 -2022-000 1 7 1 7 7 -C U -BC-CTL). The principal parties are SIRC, David Massey, Narrate, LLC (“Narrate”), Heather Griffin (“Griffin”), and Josiah Carroll (“Carroll”). The claims factually arise out of Heather Griffin and Josiah Carroll’s sale of Narrate LLC to SIRC, their subsequent executive employment agreement, and their requested relief for damages for an alleged breach by SIRC. All claims were dismissed for improper venue and transferred to Superior Court of California, County of San Diego. SIRC is contesting the claims. The matter is in very early pleading stages.

Milholland Family Trust LP v. Solar Integrated Roofing Corp. – This lawsuit was initiated in the Eighth Judicial District Court of Nevada on May 5, 2022 (Case No: A-22-852172-C). The principal parties are SIRC and Milholland Family Trust, LP (“MFT”). This lawsuit pertains to an alleged breach of contract between SIRC and MFT for approximately $7 million dollars. SIRC contested the claims, and in or around September 2, 2022, a settlement was reached between the parties. The amount has been accrued as a liability since 2021.

SIRC v. Pablo Diaz Curiel – This is a pending lawsuit in the Superior Court of California, County of San Diego (Case No. 37-2022-00036984-CU-FR-CTL). SIRC initiated suit on September 15, 2022, alleging, among other things, that Diaz fraudulently induced SIRC into acquiring a 60% interest in USA Solar Networks LLC. SIRC obtained a temporary restraining order against Diaz preventing him from selling the 12 million shares of SIRC stock he received through the acquisition. SIRC intends to amend the complaint to seek damages related to the acquisition of the remaining 40% interest in USA Solar as well. In the suit, SIRC seeks rescission and/or monetary damages in excess of $40 million. The matter is still in the pleading stage.

ITEM 1A. RISK FACTORS

As a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, the Company is not required to provide the information under this item. Our operations and financial results are subject to various risks and uncertainties, including those described in Part I, Item 1A, “Risk Factors,” in our Registration Statement on Form 10, as amended, which could adversely affect our business, financial condition, results of operations, cash flows, and the trading price of our common and capital stock.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES

August 2, 202 – 200,000 shares issued to Mammoth Corporation at the price of $0.4935 per share as a consideration for no interest on convertible debt valued $98,700.

August 2, 2022 – 600,000 shares of common stock issued to Marlena LeBrun at $0.1342 for cash of $80,500.

August 2, 2022 – 2,715,000 shares of common stock issued to Kiersten Massey at $0.1893 for cash of $514,040.

August 2, 2022 – 150,000 shares of common stock issued to Stephanie Hooper at the price of $0.2351 per share as a consideration for no interest on promissory note valued $35,265.

August 5, 2022 – 361,936 shares of common stock issued to James DiPrima at $0.1999 per share as consideration for legal settlement valued $72,387.

August 8, 2022 -1,200,000 shares of common stock issued to employees at $0.21 per share for compensation valued at $252,000.

August 18, 2022 – 25,074,285 shares of common stock issued to RB Capital Partners, Inc. at $0.07 per share as consideration for convertible notes valued $1,755,200.

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             August 23, 2022 – 14,990,000 shares of common stock issued to SIRC Family LLC for conversion of 1,499,999 shares of preferred stock Class B.

            August 29, 2022 – 45,000,000 shares of common stock were returned and cancelled as part of rescission of an acquisition agreement with Cornerstone Construction Team LLC at $0.81 per share valued at $36,450,000.

            August 29, 2022 – 8,000,000 shares of common stock issued to Cornerstone Construction Team employees at $0.2185 per share as part of cancellation of acquisition agreement valued $1,748,000.

            September 1, 2022 – 200,000 shares of common stock issued to directors at $0.31 per share as compensation valued $62,000.

            September 7, 2022 – 3,400,000 shares of common stock issued to Future Home Power employees at $0.23 as an additional consideration for the acquisition of an existing subsidiary valued $782,000.

            September 14, 2022 – 1,200,000 shares of common stock issued to AJB Capital Investments LLC in conjunction with a promissory note at $0.295 per share valued at $354,000.

            October 5, 2022 – 37,000,000 shares of common stock issued to David Massey for conversion of 3,700,000 shares of Class B preferred stock.

            October 18, 2022 – 1,925,134 shares of common stock issued to consultant at the price of $0.187 per share for a total of $360,000 for services.

            October 18, 2022 – 630,000 shares of common stock to employees as compensation for a price of $0.287 per share valued $180,810.

           October 26, 2022 – 2,717,351 shares of common stock issued to Continuation Capital Inc. for consulting services at a price of $0.18 per share valued $489,123.

           On October 26, 2022 – 552,792 shares of common stock issued for consulting services at the price of $0.18 per share valued $99,503.

           October 26, 2022 – 1,111,112 shares of common stock issued to an investor for cash at the price of $0.09 per share valued $100,000.

           October 26, 2022 – 3,500,000 shares of preferred stock class B issued to debt holder at the price of $1.70 per share for consideration valued $5,950,000.

           November 2, 2022 - 3,500,000 share of preferred stock clad B was converted into 35,000,000 shares of common stock.

           November 15, 2022 – 2,800,000 shares of common stock issued for compensation for services at the price of $0.17 per share valued $476,000

           November 17, 2022 – 1,344,327 shares of common stock issued for debt at the price of $0.11 per share valued $150,000.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS

(a)	Exhibit index
(1)	The documents set forth below are filed herewith or incorporated herein by reference to the location indicated.

EXHIBIT INDEX

Exhibit No.	Description
3.1	Articles of Incorporation
3.2	Bylaws of the Registrant
3.3	Certificate of Designation of Series A & B Preferred filed with the Secretary of State of the State of Nevada, dated 01/13/2020
3.4	Certificates of Designation of Series C & D Preferred filed with the Secretary of the State of Nevada, dated 06/11/2021
10.1	Share Exchange Agreement between Registrant and Secure Roofing and Solar, Inc., dated 02/11/2019
10.2	Membership Interest Purchase Agreement by and between Registrant and Narrate, LLC, dated 08/20/2019
10.3	Stock Purchase Agreement by and between Registrant and McKay Roofing Company Inc., dated 09/10/2019 as amended
10.4	Stock Purchase Agreement by and between Registrant and Milholland Electric, Inc., dated 01/17/2020
10.5	Amended Stock Purchase Agreement by and between Registrant and Montross Companies, Inc., LLC, dated 03/01/2020 as amended
10.6	Contract for the Purchase and Sale of a Business by and between Registrant and Approved Home Pres dated 11/4/2020 and revised 4/12/2021
10.7	Agreement and Plan of Merger by and between Registrant and Enerev LLC dated 1/21/2021
10.8	Stock Purchase Agreement by and between Registrant and Cornerstone Construction Team, LLC, dated 02/24/2021
10.9	Stock Purchase Agreement by and between Registrant and Pacific Lighting Management, Inc. dated 3/16/2021
10.10	Agreement and Plan of Merger by and between Registrant and Balance Authority, LLC dated 04/28/2021
10.11	Agreement and Plan of Merger by and between Registrant and Kinetic Investments, Inc. dba Future Home Power, dated 06/01/2021
10.12	Membership Interest Purchase and Employment Agreement by and between Registrant, USA Solar Network LLC, Pablo Diaz, SunUp Solar LLC, and Elijah Chaffino dated 6/30/2021 and 10/6/2021
10.13	Agreement and Plan of Merger by and between Registrant and Renovation Roofing, Inc. dated 7/3/2021
10.14	Employment Agreement with David Massey dated 4/7/2021
10.15	Employment Agreement with Troy Clymer dated 6/1/2021
10.16	Employment Agreement with Wanda Witoslawski dated 11/30/2021
10.17	$161,000 Redeemable Note with Granite Global Value Investments, LTD. dated 1/19/2021
10.18	$1,025,000 Redeemable Note with Granite Global Value Investments, LTD. dated 1/27/2021
10.19	Convertible promissory note with RB Capital Partners, Inc. dated 2/8/2021
10.20	Convertible promissory note with RB Capital Partners, Inc. dated 2/18/2021
10.21	$1,025,000 Redeemable Note with Granite Global Value Investments, LTD. dated 2/23/2021
10.22	Convertible promissory note with RB Capital Partners, Inc. dated 2/26/2021
10.23	$3,250,000 Redeemable Note with Granite Global Value Investments, LTD. dated 3/18/2021
10.24	$5,000,000 Redeemable Note with Granite Global Value Investments, LTD. dated 6/1/2021
10.25	$1,600,000 Redeemable Note with Granite Global Value Investments, LTD. dated 8/30/2021
10.26	Convertible promissory note with Jefferson Street Capital, LLC dated 10/5/2021
10.27	Convertible promissory note with Jefferson Street Capital, LLC dated 11/18/2021
10.28	Convertible promissory note with Mammoth Corporation dated 1/19/2022
10.29	Convertible promissory note with Jefferson Street Capital, LLC dated 3/1/2022
10.30	Promissory note receivable from Arbiter Capital LLC dated 10/5/2021
10.31	Senior secured redeemable debenture with TCA Special Situations Credit Strategies ICAV dated 1/2/2020
10.32	Stock purchase agreement by and between Registrant and Milholland Family Trust LP dated 7/20/2021
10.33	Novation to irrevocable purchase offer to David Massey dated 7/1/2021
10.34	Confidential settlement agreement and mutual release between Solar Integrated Roofing Corp and Cornerstone Construction Team LLC effective May 31,2022
10.35	Loan with Agile Capital Funding dated 7/29/2022
10.36	Promissory note with AJB Capital Investments LLC dated 9/9/2022
10.37	Warrant issued to AJB Capital Investments LLC
10.38	Employment agreement with Stefan Abbruzzese dated 9/22/2022
31.1	Certification of Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-1 Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes- Oxley Act of 2002
31.2	Certification of Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-1 Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes- Oxley Act of 2002
32.1	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as 906 of the Sarbanes- Oxley Act of 2002
32.2	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as 906 of the Sarbanes- Oxley Act of 2002

38

EX-101.INS	XBRL INSTANCE DOCUMENT
EX-101.SCH	XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT
EX-101.CAL	XBRL TAXONOMY EXTENSION CALCULATION LINKBASE
EX-101.DEF	XBRL TAXONOMY EXTENSION DEFINITION LINKBASE
EX-101.LAB	XBRL TAXONOMY EXTENSION LABELS LINKBASE
EX-101.PRE	XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE

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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.

	SOLAR INTEGRATED ROOFING CORP.
Dated: November 21, 2022	By:	/s/ David Massey
	Name:	David Massey
	Title:	Chief Executive Officer and Director
		(Principal Executive Officer)
Dated: November 21, 2022	By:	/s/ Wanda Witoslawski
	Name:	Wanda Witoslawski
	Title:	Chief Financial Officer
		(Principal Financial Officer and Principal Accounting Officer)

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EX-10.35

EXHIBIT 10.35

Agreement for the Purchase and Sale of Future Receipts

 

Seller’s Legal Name: SOLAR INTEGRATED ROOFING CORP.

D/B/A:  SOLAR INTEGRATED ROOFING CORP.

Form of Business Entity: ☐ Corporation; ☐ Limited Liability Company; ☐ Partnership; ☐ Limited Partnership; ☐ Limited Liability Partnership; ☐ Sole Proprietorship; ☐ Other:                                                                       

 

Street Address:	1475 N CUYAMACA ST	City:	EL CAJON	State:	CA	Zip:	92020
Mailing Address:	2831 ST ROSE PKWY #200	City:	HENDERSON	State:	NV	Zip	89052
Primary Contact:		Title:	Owner	Time in Business:		Federal Tax ID:	90-1502972

  

Purchase Price:		Purchased Amount:
	$700,000.00		$1,008,000.00

Average Projected Monthly Sales:
	$4,631,873.63

 

Specified Percentage:      15% (Average Projected Monthly Sales x Specified Percentage / Average Business Days in a Calendar Month)

Initial Weekly Amount: $36,000.00 Origination Fee: $35,000.00 (to be deducted from the Purchase Price)

Payment will be withdrawn every  Friday  

Account for the Deposit of All Future Receipts: Bank:  NA  

Account No:  NA

Effective,  July 29, 2022   Seller, identified above, hereby sells, assigns and transfers to AGILE CAPITAL FUNDING, LLC (“Buyer” or

“Agile Capital Funding”) located at 104 E 25th St, Suite 1001, New York, NY 10010 without recourse, the Specified Percentage of the proceeds of each future sale made by Seller (collectively “Future Receipts”) until Seller has received the Purchased Amount. “Future Receipts” includes all payments made by cash, check, ACH or other electronic transfer, credit card, debit card, bank card, charge card (each such card shall be referred to herein as a “Payment Card”) or other form of monetary payment in the ordinary course of Seller’s business. As payment for the Purchased Amount, Buyer will deliver to Seller the Purchase Price, shown above, minus any Origination Fee shown above. Seller acknowledges that it has no right to repurchase the Purchased Amount from Buyer.

Both parties agree that the obligation of Buyer under this Agreement will not be effective unless and until Buyer has completed its review of the Seller and has accepted this Agreement by delivering the Purchase Price, minus any Origination Fee. Prior to accepting this Agreement, Buyer may conduct a processing trial to confirm its access to the Account and the ability to withdraw the Initial Daily Amount If the processing trial is not completed to the satisfaction of Buyer, Buyer will refund to Seller all funds that were obtained by Buyer during the processing trial.

Agreement of Seller: By signing below Seller agrees to the terms and conditions contained in this Agreement, including those terms and conditions on the following pages, and further agrees that this transaction is for business purposes and not for personal, family, or household purposes.

	Seller: SOLAR INTEGRATED ROOFING CORP.
Agreed to by:		signature),	its	Authorized Representative	(Title)
Name:	DAVID M MASSEY
Agreed to by:		(Signature),	its	Authorized Representative	(Title)
Name:	WANDA WITOSLAWSKI
Buyer:	Agile Capital Funding
Agreed to by:		(Signature),	its	CFO	(Title)

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1. Delivery of Purchased Amount: Seller must deposit all Future Receipts into the single business banking account specified above, which may not be used for any personal, family or household purposes (the “Account”) and must instruct Seller’s credit card processor, which must be approved by Buyer (the “Processor”) to deposit all Payment Card receipts of Seller into the Account. Seller agrees not to change the Account or add an additional Account without the express written consent of Buyer. Seller authorizes Buyer to debit the Weekly Amount from the Account each business day by either ACH or electronic check. Seller will provide Buyer with all required access codes and agrees not to change them without prior written consent from Buyer. Seller will provide an appropriate ACH authorization to Buyer. Seller understands that it is responsible for either ensuring that the Weekly Amount is available in the Account each business day or advising Buyer prior to each weekly withdrawal of a shortage of funds. Otherwise, Seller will be responsible for any fees incurred by Buyer resulting from a rejected electronic check or ACH debit attempt, as set forth on Appendix A. Buyer is not responsible for any overdrafts or rejected transactions that may result from Buyer’s debiting any amount authorized under the terms of this Agreement. Seller understands that the foregoing ACH authorization is a fundamental condition to induce Buyer to accept the Agreement. Consequently, such authorization is intended to be irrevocable.

2. Reconciliation and Changes to the Weekly Amount: The Initial Weekly Amount is intended to represent the Specified Percentage of Seller’s weekly Future Receipts. For as long as no Event of Default has occurred, Buyer shall on or about the fifteenth day of each month reconcile the Seller’s Account (“Account Reconciliation”) by either crediting or further debiting the Seller’s Account by the difference between the actual amount debited since the date of the last Account Reconciliation and the Specific Percentage of the actual Future Receipts collected by the Seller since the date of the last Account Reconciliation. Failure by Buyer to make an Account Reconciliation at any time for one or more months or portions thereof shall not be deemed as a breach of Buyer’s obligation hereunder and each Account Reconciliation shall be made for the entire period of time since the date of the last Account Reconciliation. Buyer may, at Buyer’s sole discretion as it deems appropriate and upon Seller’s request, adjust the amount of the then- applicable Weekly Amount due under this Agreement in order to cause such Weekly Amount to more accurately reflect an amount which will reduce the need to credit Seller’s account on a consistently recurring basis.

3. Weekly Amount Upon Default. Upon the occurrence of an Event of Default, the Weekly Amount shall equal 100% of all Future Receipts.

4. Sale of Future Receipts (THIS IS NOT A LOAN):Seller is selling a portion of a future revenue stream to Buyer at a discount, not borrowing money from Buyer. There is no interest rate or payment schedule and no time period during which the Purchased Amount must be collected by Buyer. If Future Receipts are remitted more slowly than Buyer may have anticipated or projected because Seller’s business has slowed down, or if the full Purchased Amount is never remitted because Seller’s business went bankrupt or otherwise ceased operations in the ordinary course of business, and Seller has not breached this Agreement, Seller would not owe anything to Buyer and would not be in breach of or default under this Agreement. Buyer is buying the Purchased Amount of Future Receipts knowing the risks that Seller’s business may slow down or fail, and Buyer assumes these risks based on Seller’s representations, warranties and covenants in this Agreement that are designed to give Buyer a reasonable and fair opportunity to receive the benefit of its bargain. By this Agreement, Seller transfers to Buyer full and complete ownership of the Purchased Amount of Future Receipts and Seller retains no legal or equitable interest therein. Seller agrees that it will treat Purchase Price and Purchased Amount in a manner consistent with a sale in its accounting records and tax returns. Seller agrees that Buyer is entitled to audit Seller’s accounting records upon reasonable Notice in order to verify compliance. Seller waives any rights of privacy, confidentiality or tax payer privilege in any such litigation or arbitration in which Seller asserts that this transaction is anything other than a sale of future receipts.

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5. Power of Attorney Seller irrevocably appoints Buyer as its agent and attorney-in-fact with full authority to take any action or execute any instrument or document to settle all obligations due to Buyer from Seller, or in the case of a violation by Seller of this Agreement or the occurrence of an Event of Default under Section 15 hereof by Seller, including without limitation (i) to obtain and adjust insurance;(ii) to collect monies due or to become due under or in respect of any of the Future Receipts; (iii) to receive, endorse and collect any checks, notes, drafts, instruments, documents or chattel paper in connection with clause (i) or clause (ii) above; (iv) to sign Seller’s name on any invoice, bill of lading, or assignment directing customers or account debtors to direct payables to Buyer; (v) to file any claims or take any action or institute any proceeding which Buyer may deem necessary for the collection of any of the remaining Purchased Amount of the Future Receipts, or otherwise to enforce its rights with respect to delivery of the Purchased Amount; and/or (vi) to contact any Processor of Seller and to direct such Processor(s) to deliver directly to Buyer all or any portion of the amounts received by such Processor(s) and to provide any information regarding Seller requested by Buyer. Each Processor may rely on the previous sentence as written authorization of Seller to provide any information requested by Buyer. Each Processor is hereby irrevocably authorized and directed by Seller to follow any instruction of Buyer without inquiry as to Buyer’s right or authority to give such instructions. Seller acknowledges the terms of the preceding sentence and agrees not to (a) interfere with Buyer’s instructions or a Processor’s compliance with this Agreement or (b) request any modification thereto without Buyer’s prior written consent. Notwithstanding anything to the contrary herein, the power of attorney shall only be effected thirty (30) days after an Event of Default under this Agreement.

6. Fees and Charges: Other than the Origination Fee, if any, set forth above, Buyer is NOT CHARGING ANY ORIGINATION OR BROKER FEES to Seller. If Seller is charged another such fee, it is not being charged by Buyer. A list of all fees and charges applicable under this Agreement is contained in Appendix A.

7. Credit Report and Other Authorizations: Seller and each of the Owners signing above authorize Buyer, its agents and representatives and any credit reporting agency engaged by Buyer, to (i) investigate any references given or any other statements or data obtained from or about Seller or any of its Owners for the purpose of this Agreement, (ii) obtain consumer and business credit reports on the Seller and any of its Owners, and (iii) to contact personal and business references provided by the Seller in the Application, at any time now or for so long as Seller and/or Owners continue to have any obligation owed to Buyer as a consequence of this Agreement or for Buyer’s ability to determine Seller’s eligibility to enter into any future agreement with Buyer.

8. Authorization to Contact Current and Prior Banks: Seller hereby authorizes Buyer to contact any current or prior bank of the Seller in order to obtain whatever information it may require regarding Seller’s transactions with any such bank. Such information may include but is not limited to, information necessary to verify the amount of Future Receipts previously processed on behalf of Seller and any fees that may have been charged by the bank. In addition, Seller authorizes Buyer to contact any current or prior bank of the Seller for collections and in order to confirm that Seller is exclusively using the Account identified above, or any other account approved by Buyer, for the deposit of all business receipts.

9. Financial Information. Seller authorizes Buyer and its agents to investigate its financial responsibility and history, and will provide to Buyer any authorizations, bank or financial statements, tax returns, etc., as Buyer deems necessary in its sole discretion prior to or at any time after execution of this Agreement. A photocopy of this authorization will be deemed acceptable as an authorization for release of financial and credit information. Buyer is authorized to update such information and financial and credit profiles from time to time as it deems appropriate. Seller waives, to the maximum extent permitted by law, any claim for damages against Buyer or any of its affiliates relating to any investigation undertaken by or on behalf of Buyer as permitted by this Agreement or disclosure of information as permitted by this Agreement.

10. Transactional History. Seller authorizes all of its banks and brokers and Payment Card processors to provide Buyer with Seller’s banking, brokerage and/or processing history to determine qualification or continuation in this program, or for collections upon an Event of Default.

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11. Publicity. Seller hereby authorizes Buyer to use its name in listings of clients and in advertising and marketing materials.

12. Application of Amounts Received by Buyer. Buyer reserves the right to apply amounts received by it under this Agreement to any fees or other charges due to Buyer from Seller prior to applying such amounts to reduce the amount of any outstanding Purchased Amount.

13. Representations, Warranties and Covenants of Seller:

13.1 Good Faith, Best Efforts and Due Diligence. Seller will conduct its business in good faith and will use its best efforts to continue its business at least at its current level, to ensure that Buyer obtains the Purchased Amount.

13.2 Stacking Prohibited. Seller shall not enter into any Seller cash advance or any loan agreement that relates to or involves its Future Receipts with any party other than Buyer for the duration of this Agreement. Buyer may share information regarding this Agreement with any third party in order to determine whether Seller is in compliance with this provision.

13.3 Financial Condition and Financial Information. Any bank statements and financial statements of Seller that have been furnished to Buyer, and future statements that will be furnished to Buyer, fairly represent the financial condition of Seller at such dates, and Seller will notify Buyer immediately if there are material adverse changes, financial or otherwise, in the condition or operation of Seller or any change in the ownership of Seller. Buyer may request statements at any time during the performance of this Agreement and the Seller shall provide them to Buyer within five business days. Furthermore, Seller represents that all documents, forms and recorded interviews provided to or with Buyer are true, accurate and complete in all respects, and accurately reflect Seller’s financial condition and results of operations. Seller further agrees to authorize the release of any past or future tax returns to Seller.

13.4 Governmental Approvals. Seller is in compliance and shall comply with all laws and has valid permits, authorizations and licenses to own, operate and lease its properties and to conduct the business in which it is presently engaged and/or will engage in hereafter.

13.5. Authority to Enter Into This Agreement. Seller and the person(s) signing this Agreement on behalf of Seller, have full power and authority to incur and perform the obligations under this Agreement, all of which have been duly authorized.

13.6. Change of Name or Location or Sale or Closing of Business. Seller will not conduct Seller’s businesses under any name other than as disclosed to Buyer or change any of its places of business without prior written consent of Buyer. Seller will not sell, dispose, transfer or otherwise convey all or substantially all of its business or assets without (i) the express prior written consent of Buyer, and (ii) the written agreement of any purchaser or transferee assuming all of Seller’s obligations under this Agreement pursuant to documentation satisfactory to Buyer. Except as disclosed to Buyer in writing, Seller has no current plans to close its business either temporarily, whether for renovations, repairs or any other purpose, or permanently. Seller agrees that until Buyer has received all of the Purchased Amount Seller will not voluntarily close its business on a temporarily basis for renovations, repairs, or any other purposes. This provision, however, does not prohibit Seller from closing its business temporarily if such closing is required to conduct renovations or repairs that are required by local ordinance or other legal order, such as from a health or fire inspector, or if otherwise forced to do so by circumstances outside of the control of Seller. Prior to any such closure, Seller will provide Buyer ten business days’ notice to the extent practicable.

13.7. No Pending or Contemplated Bankruptcy. As of the date Seller executes this Agreement, Seller is not insolvent and does not contemplate and has not filed any petition for bankruptcy protection under Title 11 of the United States Code and there has been no involuntary petition brought or pending against Seller. Seller represents that it has not consulted with a bankruptcy attorney within six months prior to the date of this Agreement. Seller further warrants that it does not anticipate filing a bankruptcy petition and it does not anticipate that an involuntary petition will be filed against it.

13.8. Seller to Maintain Insurance. Seller will possess and maintain insurance in such amounts and against such risks as are necessary to protect its business and will provide proof of such insurance to Buyer upon demand.

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13.9. Seller to Pay Taxes Promptly. Seller will promptly pay all necessary taxes, including but not limited to employment and sales and use taxes.

13.10. No Violation of Prior Agreements. Seller’s execution and performance of this Agreement will not conflict with any other agreement, obligation, promise, court order, administrative order or decree, law or regulation to which Seller is subject, including any agreement the prohibits the sale or pledge of Seller’s future receipts.

13.11. No Diversion of Receipts. Seller will not permit any event to occur that could cause a diversion of any of Seller’s Future Receipts from the Account to any other entity.

13.12. Seller’s Knowledge and Representation. Seller represents warrants and agrees that it is a sophisticated business entity familiar with the kind of transaction covered by the Agreement; it was represented by counsel or had full opportunity to consult with counsel.

14. Rights of Buyer:

14.1 Financing Statements Financing Statements and Security Interest. Seller grants Buyer a security interest in all of Seller’s present and future accounts receivable in an amount not to exceed the Purchased Amount, and in the Event of Default, not to exceed the Purchased Amount and all fees and cost contemplated under this Agreement, wherever located, and related proceeds now or hereafter owned or acquired by Seller.

Seller authorizes Buyer to file one or more UCC-1 forms consistent with the Uniform Commercial Code (“UCC”) in order to give notice of this security interest and that the Purchased Amount of Future Receipts is the sole property of Buyer. The UCC filing may state that such sale is intended to be a sale and not an assignment for security and may state that the Seller is prohibited from obtaining any financing that impairs the value of the Future Receipts or Buyer’s right to collect same. Seller authorizes Buyer to debit the Account for all costs incurred by Buyer associated with the filing, amendment, or termination of any UCC filings.

14.2 Right of Access. In order to ensure that Seller is complying with the terms of this Agreement, Buyer shall have the right to (i) enter, without notice, the premises of Seller’s business for the purpose of inspecting and checking Seller’s transaction processing terminals to ensure the terminals are properly programmed to submit and or batch Seller’s weekly receipts to the Processor and to ensure that Seller has not violated any other provision of this Agreement, and (ii) Seller shall provide access to its employees and records and all other items as requested by Buyer, and (iii) have Seller provide information about its business operations, banking relationships, vendors, landlord and other information to allow Buyer to interview any relevant parties.

14.3 Phone Recordings and Contact. Seller agrees that any call between Buyer and Seller, and their agents and employees may be recorded or monitored. Further, Seller agrees that (i) it has an established business relationship with Buyer, its employees and agents and that Seller may be contacted from time-to-time regarding this or other business transactions; (ii) that such communications and contacts are not unsolicited or inconvenient; and (iii) that any such contact may be made at any phone number, emails address, or facsimile number given to Buyer by the Seller, its agents or employees, including cellular telephones.

15. Events of Default. The occurrence of any of the following events shall constitute an “Event of Default”: (a) Seller interferes with Buyer’s right to collect the Weekly Amount; (b) Seller violates any term of covenant in this Agreement; (c) Seller uses multiple depositary accounts without the prior written consent of Buyer; (d) Seller changes its depositing account or its payment card processor without the prior written consent of Buyer; (e) Seller defaults under any of the terms, covenants and conditions of any other agreement with Buyer; or (f) Seller fails to provide timely notice to Buyer such that (i) where Seller is on a daily payment plan, two or more ACH transactions attempted by Buyer within one calendar month are rejected by Seller’s bank, or (ii) where Seller is on a weekly payment plan, one or more ACH transaction attempted by Buyer is rejected by Seller’s bank at any given time that such payment under the payment plan is due.

16. Remedies. If any Event of Default occurs, Buyer may proceed to protect and enforce its rights including, but not limited to, the following:

16.1. The Specified Percentage shall equal 100%. The full uncollected Purchased Amount plus all fees and charges (including legal fees) due under this Agreement will become due and payable in full immediately.

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16.2. Buyer may enforce the provisions of the Guaranty of Performance against the guarantor. Notwithstanding anything to the contrary herein, in the event that Seller receives funds, from its clients or customers or any entity holding its receivables or otherwise (collectively, the “A/C Holder”), for which the applicable A/C Holder for any reason is or may be responsible to make payment to Seller, then the Seller, agrees to make prompt payment of such funds to Buyer or to reimburse A/C Holder therefore in the event the A/C Holder has made such payment to their detriment, and Seller hereby guarantees to Buyer the prompt payment of such funds by Seller and further hereby indemnifies Buyer and any applicable A/C Holder from and against any and all loss, cost or expense in connection therewith.

16.3. Buyer may proceed to protect and enforce its rights and remedies by arbitration or lawsuit. In any such arbitration or lawsuit, under which Buyer shall recover Judgment against Seller, Seller shall be liable for all of Buyer’s costs of the lawsuit, including but not limited to all reasonable attorneys’ fees and court costs. However, the rights of Buyer under this provision shall be limited as provided in the arbitration provision set forth below.

16.4. [Intentionally Omitted]

16.5. Buyer may debit Seller’s depository accounts wherever situated by means of ACH debit or facsimile signature on a computer- generated check drawn on Seller’s bank account or otherwise for all sums due to Buyer

16.6. Seller shall pay to Buyer all reasonable costs associated with the Event of Default and the enforcement of Buyer’s remedies, including but not limited to court costs and attorneys’ fees

16.7. Buyer may exercise and enforce its rights as a secured party under the UCC.

16.8. All rights, powers and remedies of Buyer in connection with this Agreement may be exercised at any time by Buyer after the occurrence of an Event of Default, are cumulative and not exclusive, and shall be in addition to any other rights, powers or remedies provided by law or equity.

17. Modifications; Agreements. No modification, amendment, waiver or consent of any provision of this Agreement shall be effective unless the same shall be in writing and signed by Buyer

18. Assignment. Buyer may assign, transfer or sell its rights to receive the Purchased Amount or delegate its duties hereunder, either in whole or in part, with or without prior written notice to Seller.

19. Notices.

19.1. Notices from Buyer to Seller. Buyer may send any notices, disclosures, terms and conditions, other documents, and any future changes to Seller by regular mail or by e-mail, at Buyer’s option and Seller consents to such electronic delivery. Notices sent by e- mail are effective when sent. Notices sent by regular mail become effective upon mailing to Seller’s address set forth in this Agreement.

19.2. Notices from Seller to Buyer. Seller may send any notices to Buyer by e-mail only upon the prior written consent of Buyer, which consent may be withheld or revoked at any time in Buyer’s sole discretion. Otherwise, any notices or other communications from Seller to Buyer must be delivered by certified mail, return receipt requested, to Buyer’s address set forth in this Agreement. Notices sent to Buyer shall become effective only upon receipt by Buyer.

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20. Binding Effect; Governing Law, Venue and Jurisdiction. This Agreement shall be binding upon and inure to the benefit of Seller, Buyer and their respective successors and assigns, except that Seller shall not have the right to assign its rights hereunder or any interest herein without the prior written consent of Buyer which consent may be withheld in Buyer’s sole discretion. This Agreement shall be governed by and construed in accordance with the laws of the state of New York, without regards to any applicable principals of conflicts of law. Any suit, action or proceeding arising hereunder, or the interpretation, performance or breach of this Agreement, shall, if Buyer so elects, be instituted in any court sitting in New York, (the “Acceptable Forums”). Seller agrees that the Acceptable Forums are convenient to it, and submits to the jurisdiction of the Acceptable Forums and waives any and all objections to jurisdiction or venue. Should such proceeding be initiated in any other forum, Seller waives any right to oppose any motion or application made by Buyer to transfer such proceeding to an Acceptable Forum.

21. Survival of Representation, etc. All representations, warranties and covenants herein shall survive the execution and delivery of this Agreement and shall continue in full force until all obligations under this Agreement shall have been satisfied in full.

22. Interpretation. All Parties hereto have reviewed this Agreement with an attorney of their own choosing and have relied only on their own attorney’s guidance and advice. No construction determinations shall be made against either Party hereto as drafter.

23. Entire Agreement and Severability. This Agreement embodies the entire agreement between Seller and Buyer and supersedes all prior agreements and understandings relating to the subject matter hereof. In case any of the provisions in this Agreement is found to be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of any other provision contained herein shall not in any way be affected or impaired.

24. Facsimile Acceptance. Facsimile signatures hereon, or other electronic means reflecting the party’s signature hereto, shall be deemed acceptable for all purposes.

25. Confidentiality: The terms and conditions of this Agreement are proprietary and confidential unless required by law. Seller shall not disclose this information to anyone other than its attorney, accountant or similar service provider and then only to the extent such person uses the information solely for purpose of advising Seller and first agrees in writing to be bound by the terms of this Section. A breach entitles Buyer to damages and legal fees as well as temporary restraining order and preliminary injunction without bond.

26. Monitoring, Recording, and Solicitations.

26.1. Authorization to Contact Seller by Phone. Seller authorizes Buyer, its affiliates, agents and independent contractors to contact Seller at any telephone number Seller provides to Buyer or from which Seller places a call to Buyer, or any telephone number where Buyer believes it may reach Seller, using any means of communication, including but not limited to calls or text messages to mobile, cellular, wireless or similar devices or calls or text messages using an automated telephone dialing system and/or artificial voices or prerecorded messages, even if Seller incurs charges for receiving such communications

26.2. Authorization to Contact Seller by Other Means. Seller also agree that Buyer, its affiliates, agents and independent contractors, may use any other medium not prohibited by law including, but not limited to, mail, e-mail and facsimile, to contact Seller. Seller expressly consents to conduct business by electronic means.

27. JURY WAIVER. THE PARTIES WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY COURT IN ANY SUIT, ACTION OR PROCEEDING ON ANY MATTER ARISING IN CONNECTION WITH OR IN ANY WAY RELATED TO THE TRANSACTIONS OF WHICH THIS AGREEMENT IS A PART OR ITS ENFORCEMENT, EXCEPT WHERE SUCH WAIVER IS PROHIBITED BY LAW OR DEEMED BY A COURT OF LAW TO BE AGAINST PUBLIC POLICY. THE PARTIES ACKNOWLEDGE THAT EACH MAKES THIS WAIVER KNOWINGLY, WILLINGLY AND VOLUNTARILY AND WITHOUT DURESS, AND ONLY AFTER EXTENSIVE CONSIDERATION OF THE RAMIFICATIONS OF THIS WAIVER WITH THEIR ATTORNEYS.

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28. CLASS ACTION WAIVER. THE PARTIES WAIVE ANY RIGHT TO ASSERT ANY CLAIMS AGAINST THE OTHER PARTY AS A REPRESENTATIVE OR MEMBER IN ANY CLASS OR REPRESENTATIVE ACTION, EXCEPT WHERE SUCH WAIVER IS PROHIBITED BY LAW OR DEEMED BY A COURT OF LAW TO BE AGAINST PUBLIC POLICY. TO THE EXTENT EITHER PARTY IS PERMITTED BY LAW OR COURT OF LAW TO PROCEED WITH A CLASS OR REPRESENTATIVE ACTION AGAINST THE OTHER, THE PARTIES AGREE THAT: (I) THE PREVAILING PARTY SHALL NOT BE ENTITLED TO RECOVER ATTORNEYS’ FEES OR COSTS ASSOCIATED WITH PURSUING THE CLASS OR REPRESENTATIVE ACTION (NOT WITHSTANDING ANY OTHER PROVISION IN THIS AGREEMENT); AND (II) THE PARTY WHO INITIATES OR PARTICIPATES AS A MEMBER OF THE CLASS WILL NOT SUBMIT A CLAIM OR OTHERWISE PARTICIPATE IN ANY RECOVERY SECURED THROUGH THE CLASS OR REPRESENTATIVE ACTION.

29. ARBITRATION. IF BUYER, SELLER OR ANY GUARANTOR REQUESTS, THE OTHER PARTIES AGREE TO ARBITRATE ALL DISPUTES AND CLAIMS ARISING OUT OF OR RELATING TO THIS AGREEMENT. IF BUYER, SELLER OR ANY GUARANTOR SEEKS TO HAVE A DISPUTE SETTLED BY ARBITRATION, THAT PARTY MUST FIRST SEND TO ALL OTHER PARTIES, BY CERTIFIED MAIL, A WRITTEN NOTICE OF INTENT TO ARBITRATE. IF BUYER, SELLER OR ANY GUARANTOR DO NOT REACH AN AGREEMENT TO RESOLVE THE CLAIM WITHIN 30 DAYS AFTER THE NOTICE IS RECEIVED, BUYER, SELLER OR ANY GUARANTOR MAY COMMENCE AN ARBITRATION PROCEEDING WITH THE AMERICAN ARBITRATION ASSOCIATION (“AAA”) OR NATIONAL ARBITRATION FORUM (“NAF”). BUYER WILL PROMPTLY REIMBURSE SELLER OR THE GUARANTOR ANY ARBITRATION FILING FEE, HOWEVER, IN THE EVENT THAT BOTH SELLER AND THE GUARANTOR MUST PAY FILING FEES, BUYER WILL ONLY REIMBURSE SELLER’S ARBITRATION FILING FEE AND, EXCEPT AS PROVIDED IN THE NEXT SENTENCE, BUYER WILL PAY ALL ADMINISTRATION AND ARBITRATOR FEES. IF THE ARBITRATOR FINDS THAT EITHER THE SUBSTANCE OF THE CLAIM RAISED BY SELLER OR THE GUARANTOR OR THE RELIEF SOUGHT BY SELLER OR THE GUARANTOR IS IMPROPER OR NOT WARRANTED, AS MEASURED BY THE STANDARDS SET FORTH IN FEDERAL RULE OF PROCEDURE 11(B), THEN BUYER WILL PAY THESE FEES ONLY IF REQUIRED BY THE AAA OR NAF RULES. SELLER AND THE GUARANTOR AGREE THAT, BY ENTERING INTO THIS AGREEMENT, THEY ARE WAIVING THE RIGHT TO TRIAL BY JURY. BUYER, SELLER OR ANY GUARANTOR MAY BRING CLAIMS AGAINST ANY OTHER PARTY ONLY IN THEIR INDIVIDUAL CAPACITY, AND NOT AS A PLAINTIFF OR CLASS MEMBER IN ANY PURPORTED CLASS OR REPRESENTATIVE PROCEEDING. FURTHER, BUYER, SELLER AND ANY GUARANTOR AGREE THAT THE ARBITRATOR MAY NOT CONSOLIDATE PROCEEDINGS FOR MORE THAN ONE PERSON’S CLAIMS, AND MAY NOT OTHERWISE PRESIDE OVER ANY FORM OF A REPRESENTATIVE OR CLASS PROCEEDING, AND THAT IF THIS SPECIFIC PROVISION IS FOUND UNENFORCEABLE, THEN THE ENTIRETY OF THIS ARBITRATION CLAUSE SHALL BE NULL AND VOID.

30. RIGHT TO OPT OUT OF ARBITRATION. SELLER AND GUARANTOR(S) MAY OPT OUT OF THIS CLAUSE. TO OPT OUT OF THIS ARBITRATION CLAUSE, SELLER AND EACH GUARANTOR MUST SEND BUYER A NOTICE THAT THE SELLER AND EACH GUARANTOR DOES NOT WANT THIS CLAUSE TO APPLY TO THIS AGREEMENT. FOR ANY OPT OUT TO BE EFFECTIVE, SELLER AND EACH GUARANTOR MUST SEND AN OPT OUT NOTICE TO THE FOLLOWING ADDRESS BY REGISTERED MAIL, WITHIN 14 DAYS AFTER THE DATE OF THIS AGREEMENT: BUYER – ARBITRATION OPT OUT, Agile Capital Funding, 104 E 25th St, Suite 1001, New York, NY 10010, ATTENTION: LEGAL DEPARTMENT.

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31. SERVICE OF PROCESS. IN ADDITION TO THE METHODS OF SERVICE ALLOWED BY THE NEW YORK STATE CIVIL PRACTICE LAW & RULES (“CPLR”), SELLER HEREBY CONSENTS TO SERVICE OF PROCESS UPON IT BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, SERVICE HEREUNDER SHALL BE COMPLETE UPON SELLER’S ACTUAL RECEIPT OF PROCESS OR UPON BUYER’S RECEIPT OF THE RETURN THEREOF BY THE UNITED STATES POSTAL SERVICE AS REFUSED OR UNDELIVERABLE. SELLER MUST PROMPTLY NOTIFY BUYER, IN WRITING, OF EACH AND EVERY CHANGE OF ADDRESS TO WHICH SERVICE OF PROCESS CAN BE MADE. SERVICE BY BUYER TO THE LAST KNOWN ADDRESS SHALL BE SUFFICIENT. SELLER WILL HAVE (30) CALENDAR DAYS AFTER SERVICE HEREUNDER IS COMPLETE IN WHICH TO RESPOND. FURTHERMORE, SELLER EXPRESSLY CONSENTS THAT ANY AND ALL NOTICE(S), DEMAND(S), REQUEST(S) OR OTHER COMMUNICATION(S) UNDER AND PURSUANT TO THIS AGREEMENT FOR THE PURCHASE AND SALE OF FUTURE RECEIVABLES SHALL BE DELIVERED IN ACCORDANCE WITH THE PROVISIONS OF THIS AGREEMENT FOR THE PURCHASE AND SALE OF FUTURE RECEIVABLES.

32. FEE STRUCTURE.

a.	NSF: $75.00
b.	ACH REJECTION: $100.00
c.	BANK CHANGE: $50.00
d.	BLOCKED ACCOUNT: $2,500.00
e.	DEFAULT: $5,000.00

 

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EX-10.36

EXHIBIT 10.36

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT OR OTHER APPLICABLE EXEMPTION. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

Principal Amount: $600,000.00	Issue Date: September 9, 2022
Purchase Price: $540,000.00

PROMISSORY NOTE

FOR VALUE RECEIVED,SOLAR INTEGRATED ROOFING CORPORATION, a Nevada corporation ( the “Borrower”) (Trading Symbol: SIRC), hereby promises to pay to the order of AJB CAPITAL INVESTMENTS, LLC, a Delaware limited liability company, or registered assigns (the “Holder”) the sum of $600,000 (“Principal”) together with guaranteed interest (“Interest”) on the Principal balance hereof at the rate of twelve percent (12%) (the “Interest Rate”) per annum from the date hereof (the “Issue Date”).

Interest shall (a) accrue on a monthly basis commencing on the Issue Date; (b) be computed on the basis of a 360-day year and the actual number of days elapsed; and (c) and is payable on the first day of each calendar month following the Issue Date.

All Principal and accrued but unpaid Interest owing hereunder, along with any and all other amounts, shall be due and owing on March 9, 2023 (the “Maturity Date”) or such earlier date on which such amounts become due by acceleration or prepayment as provided for herein.

This Note may be prepaid in whole or in part as set forth herein.

Following the occurrence and during the continuance of an Event of Default (as hereinafter defined), Interest on the outstanding Principal balance of and accrued but unpaid Interest on this Note shall bear interest at a rate equal to the lesser of (a) eighteen percent (18%) per annum and (b) the maximum amount permitted under law from the due date thereof until the same is paid (“Default Interest”). Default Interest shall commence accruing upon an Event of Default and shall be computed on the basis of a 360-day year and the actual number of days elapsed.

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All payments due hereunder, to the extent not converted into shares of the Company’s common stock, $0.00001 par value per share (the “Common Stock”) in accordance with the terms hereof, shall be made in lawful money of the United States of America. All payments shall be made at such address as the Holder shall hereafter give to the Borrower by written notice made in accordance with the provisions of this Note.

Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a business day, the same shall instead be due on the next succeeding day which is a business day and, in the case of any interest payment date which is not the date on which this Note is paid in full, the extension of the due date thereof shall not be taken into account for purposes of determining the amount of interest due on such date. As used in this Note, the term “business day” shall mean any day other than a Saturday, Sunday or a day on which commercial banks in the city of New York, New York are authorized or required by law or executive order to remain closed.

Each capitalized term used herein and not otherwise defined, shall have the meaning ascribed thereto in that certain Securities Purchase Agreement dated the Issue Date between the Borrower and the Holder (the “Purchase Agreement”), pursuant to which this Note was originally issued and the terms of which are incorporated herein by reference.

This Note carries an original issue discount of $60,000 (the “OID”), to cover the Holder’s monitoring costs associated with the purchase and sale of the Note, which is included in the original Principal of this Note. Accordingly, the purchase price of this Note shall be $540,000 (the original Principal less the OID).

This Note is free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other similar rights of stockholders of the Borrower and will not impose personal liability upon the holder thereof.

This obligations of the Borrower evidenced by this Note are secured by a security interest granted by the Borrower to the Holder in all of the Borrower’s assets pursuant to that certain Security Agreement of even date herewith between the Borrower and the Holder (the “Security Agreement”), the terms of which Security Agreement are incorporated herein in their entirety by reference.

The following terms shall also apply to this Note:

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Article I. CONVERSION RIGHTS UPON EVENT OF DEFAULT

1.1 Conversion Right. The Holder shall have the right beginning on the date that is 180 days from the date hereof, from time to time following an Event of Default, and ending on the date of payment of the Default Amount (as hereinafter defined) pursuant to Section 1.6(a) or Article III, each in respect of the remaining outstanding Principal balance of this Note to convert all or any part of the outstanding and unpaid Principal, Interest, penalties, and all other amounts under this Note into shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Borrower into which such Common Stock shall hereafter be changed or reclassified at the Conversion Price (as hereinafter defined) (a “Conversion”); provided, however, that in no event shall the Holder be entitled to convert any portion of this Note in excess of that portion of this Note upon a Conversion of which the sum of (a) the number of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unconverted portion of the Notes or the unexercised or unconverted portion of any other security of the Borrower subject to a limitation on conversion or exercise analogous to the limitations contained herein); and (b) the number of shares of Common Stock issuable upon the conversion of the portion of this Note with respect to which the determination of this proviso is being made, would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the outstanding shares of Common Stock. For purposes of the proviso to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Regulations 13D-G thereunder, except as otherwise provided in clause (a) of such proviso. The number of shares of Common Stock to be issued upon each Conversion shall be determined by dividing the Conversion Amount (as hereinafter defined) by the applicable Conversion Price then in effect on the date specified in the notice of conversion, in the form attached hereto as Exhibit A (the “Notice of Conversion”), delivered to the Borrower or Borrower’s transfer agent by the Holder in accordance with Section 1.4 below; provided that the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting in, or reasonably expected to result in, notice) to the Borrower or Borrower’s transfer agent before 11:59 p.m., New York, New York time on the date of such Conversion (the “Conversion Date”). As used in this Note, the term “Conversion Amount” means, with respect to any Conversion of this Note, the sum of (i) the Principal amount of this Note to be converted in such Conversion; plus (ii) at the Holder’s option, accrued and unpaid Interest, if any, on such Principal amount at the Interest Rate provided in this Note to the Conversion Date, provided however, that the Borrower shall have the right to pay any or all such accrued but unpaid Interest in cash; plus (iii) at the Holder’s option, Default Interest, if any, on the amounts referred to in the immediately preceding clauses (i) and/or (ii); plus (iv) at the Holder’s option, any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof.

1.2 Conversion Price.

(a) Calculation of Conversion Price. Subject to the adjustments described herein, the conversion price (the “Conversion Price”) shall equal the lower of the lowest trading price during the previous twenty (20) Trading Day period either (i) ending on date of Conversion; or (ii) the Issue Date. To the extent the Conversion Price of the Borrower’s Common Stock closes below the par value per share, the Borrower will take all steps necessary to solicit the consent of the Borrower’s stockholders to reduce the par value to the lowest value possible under law. The Borrower agrees to honor all Conversions submitted pending this adjustment.If certificates or book entry statements evidencing the shares of the Borrower’s Common Stock issuable upon the Conversion have not been delivered within three (3) business days to the Borrower or Borrower’s transfer agent, the Notice of Conversion may be rescinded. At any time after the Closing Date, if in the case that the Borrower’s Common Stock is not deliverable by DWAC (including if the Borrower’s transfer agent has a policy prohibiting or limiting delivery of shares of the Borrower’s Common Stock specified in a Notice of Conversion), an additional 10% discount will apply for all future Conversions under the Note until DWAC delivery becomes available. If in the case that the Borrower’s Common Stock is “chilled” for deposit into the DTC system and only eligible for clearing deposit, a 15% discount shall apply for all future Conversions under the Note until such chill is lifted. Additionally, if the Borrower is not subject to or ceases to be subject to the reporting requirements of Sections 13 or 15(d) of the Exchange Act or if the Note cannot be converted into free trading shares after one hundred eighty-one (181) days from the Issue Date (other than as a result of the Holder’s status as an affiliate of the Company), an additional 15% discount will be attributed to the Conversion Price. If the trading price cannot be calculated for such security on such date in the manner provided above, the trading price shall be the fair market value as mutually determined by the Borrower and the Holder. As used in this Note, “Trading Day” shall mean any day on which the Common Stock is tradable for any period on the OTC Pink, OTCQB or on a national securities exchange or other securities market on which the Common Stock is then being traded. The Borrower shall be responsible for the fees of its transfer agent and all DTC fees associated with any such issuance. The Holder shall be entitled to deduct $500.00 from the Conversion Amount in each Notice of Conversion to cover Holder’s deposit fees associated with each Notice of Conversion.

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While this Note is outstanding, each time any third party has the right to convert monies owed to that third party (or receive shares of Common Stock pursuant to a settlement or otherwise), including but not limited to transactions effected under Section 3(a)(9) and Section 3(a)(10) of the Securities Act of 1933, as amended (the “Securities Act”), at a discount to market greater than the Conversion Price in effect at that time (prior to all other applicable adjustments in the Note), but excluding any third party loans that are already outstanding on the Issue Date, then the Holder, in Holder’s sole discretion, may utilize such greater discount percentage (prior to all applicable adjustments in this Note) until this Note has either been paid or converted in full. While this Note is outstanding, each time any third party has a look back period greater than the look back period in effect under the Note at that time, including but not limited to under Section 3(a)(9) and Section 3(a)(10) of the Securities Act, excluding any third party loans that are already outstanding on the Issue Date, then the Holder, in Holder’s sole discretion, may utilize such greater number of look back days until this Note has either been paid or converted in full. The Borrower shall give written notice to the Holder within one (1) business day of becoming aware of any event that could permit the Holder to make any adjustment described in the two immediately preceding sentences.

(b) Conversion Price During Major Announcements. Notwithstanding anything contained in Section 1.2(a) to the contrary, in the event the Borrower (i) makes a public announcement that it intends to consolidate or merge with any other corporation (other than a merger in which the Borrower is the surviving or continuing corporation and its capital stock is unchanged) or sell or transfer all or substantially all of the assets of the Borrower; or (ii) any person, group or entity (including the Borrower) publicly announces a tender offer to purchase 50% or more of the Borrower’s Common Stock (or any other takeover scheme) (the date of the announcement referred to in clause (i) or (ii) being the “Announcement Date”), then the Conversion Price shall, effective upon the Announcement Date and continuing through the Adjusted Conversion Price Termination Date (as hereinafter defined), be equal to the lower of (x) the Conversion Price which would have been applicable for a Conversion occurring on the Announcement Date and (y) the Conversion Price that would otherwise be in effect. From and after the Adjusted Conversion Price Termination Date, the Conversion Price shall be determined as set forth in this Section 1.2(a). For purposes hereof, “Adjusted Conversion Price Termination Date” shall mean, with respect to any proposed transaction or tender offer (or takeover scheme) for which a public announcement as contemplated by this Section 1.2(b) has been made, the date upon which the Borrower (in the case of clause (i) above) or the person, group or entity (in the case of clause (ii) above) consummates or publicly announces the termination or abandonment of the proposed transaction or tender offer (or takeover scheme) which caused this Section 1.2(b) to become operative.

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(c) Pro Rata Conversion; Disputes. In the event of a dispute as to the number of shares of Common Stock issuable to the Holder in connection with a Conversion, the Borrower shall issue to the Holder the number of shares of Common Stock not in dispute and resolve such dispute in accordance with Section 4.13.

(d) Conversion Price less than Par Value. If at any time the Conversion Price as determined hereunder for any conversion would be less than the par value of the Common Stock, then the Conversion Price hereunder shall equal such par value for such Conversion and the Conversion Amount for such conversion shall be increased to include Additional Principal, where “Additional Principal” means such additional amount to be added to the Conversion Amount to the extent necessary to cause the number of shares of common stock issuable upon such Conversion to equal the same number of shares as of Common Stock would have been issued had the Conversion Price not been subject to the minimum price set forth in this Section 1.2(c).

1.3 Authorized Shares. The Borrower covenants that during the period while any outstanding balance is owing hereunder or any Conversion of the Note is available, the Borrower will reserve from its authorized and unissued Common Stock a sufficient number of shares, free from preemptive rights, to provide for the issuance of Common Stock upon the full conversion of this Note. The Borrower is required at all times to have authorized and reserved at least four (4) times the number of shares that is actually issuable upon full conversion of the Note (based on the Conversion Price of the Notes in effect from time to time) (the “Reserved Amount”). The Reserved Amount shall be increased from time to time in accordance with the Borrower’s obligations pursuant to Section 3(d) of the Purchase Agreement. The initial Reserved Amount shall be 10,000,000 shares of Common Stock. The Reserved Amount shall be increased from time to time in accordance with the Borrower’s obligations pursuant to the Purchase Agreement. The Borrower represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable. In addition, if the Borrower shall issue any securities or make any change to its capital structure which would change the number of shares of Common Stock into which the Note shall be convertible at the then current Conversion Price, the Borrower shall at the same time make proper provision so that thereafter there shall be a sufficient number of shares of Common Stock authorized and reserved, free from preemptive rights, for conversion of then outstanding Principal Amount of the Note. The Borrower (i) acknowledges that it has irrevocably instructed its transfer agent to issue certificates or book entry statements for the Common Stock issuable upon conversion of this Note; and (ii) agrees that its issuance of this Note shall constitute full authority to its officers and agents who are charged with the duty of executing stock certificates to execute and issue the necessary certificates or book entry statements for shares of Common Stock in accordance with the terms and conditions of this Note. Notwithstanding the foregoing, in no event shall the Reserved Amount be lower than the initial Reserved Amount, regardless of any prior Conversions.

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If, at any time the Borrower does not maintain or replenish the Reserved Amount as required hereunder within three (3) business days of the request of the Holder, the outstanding Principal amount of the Note shall increase by $5,000) (under Holder’s and Borrower’s expectation that any principal amount increase will tack back to the Issue Date) per occurrence.

1.4 Method of Conversion.

(a) Mechanics of Conversion. Subject to Section 1.1, this Note may be converted by the Holder in whole or in part at any time from time to time after an Event of Default, by (i) submitting to the Borrower or Borrower’s transfer agent a Notice of Conversion (by facsimile, e-mail or other reasonable means of communication dispatched on the Conversion Date prior to 11:59 p.m., New York, New York time); and (ii) subject to Section 1.4(b), surrendering this Note at the principal office of the Borrower.

(b) Surrender of Note Upon Conversion. Notwithstanding anything to the contrary set forth herein, upon a Conversion of this Note, the Holder shall not be required to physically surrender this Note to the Borrower unless the entire then outstanding Principal amount of this Note is so converted. The Holder and the Borrower shall maintain records showing the Principal amount so converted and the dates of such conversions or shall use such other method, reasonably satisfactory to the Holder and the Borrower, so as not to require physical surrender of this Note upon each such Conversion. In the event of any dispute or discrepancy, such records of the Borrower shall, primafacie, be controlling and determinative in the absence of manifest error. Notwithstanding the foregoing, if any portion of this Note is converted as aforesaid, the Holder may not transfer this Note unless the Holder first physically surrenders this Note to the Borrower, whereupon the Borrower will forthwith issue and deliver upon the order of the Holder a new Note of like tenor, registered as the Holder (upon payment by the Holder of any applicable transfer taxes) may request, representing in the aggregate the remaining unpaid principal amount of this Note. The Holder and any assignee, by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this Section 1.4(b), following conversion of a portion of this Note, the unpaid and unconverted Principal amount of this Note represented by this Note may be less than the amount stated on the face hereof.

(c) Payment of Taxes. The Borrower shall not be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of shares of Common Stock or other securities or property on conversion of this Note in a name other than that of the Holder (or in street name), and the Borrower shall not be required to issue or deliver any such shares or other securities or property unless and until the person or persons (other than the Holder or the custodian in whose street name such shares are to be held for the Holder’s account) requesting the issuance thereof shall have paid to the Borrower the amount of any such tax or shall have established to the satisfaction of the Borrower that such tax has been paid.

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(d) Delivery of Common Stock Upon Conversion. Upon receipt by the Borrower from the Holder of a facsimile transmission or e-mail (or other reasonable means of communication) of a Notice of Conversion meeting the requirements for conversion as provided in this Section 1.4, the Borrower shall issue and deliver or cause to be issued and delivered to or upon the order of the Holder certificates or book entry statements for the Common Stock issuable upon such Conversion within three (3) business days after such receipt (the “Deadline”) (and, solely in the case of conversion of the entire unpaid Principal Amount hereof, surrender of this Note) in accordance with the terms hereof and the Purchase Agreement.

(e) Obligation of Borrower to Deliver Common Stock. Upon receipt by the Borrower of a Notice of Conversion, the Holder shall be deemed to be the holder of record of the Common Stock issuable upon such Conversion, the outstanding principal amount and the amount of accrued and unpaid interest on this Note shall be reduced to reflect such Conversion, and, unless the Borrower defaults on its obligations under this Article I, all rights with respect to the portion of this Note being so converted shall forthwith terminate except the right to receive the Common Stock or other securities, cash or other assets, as herein provided, on such Conversion. If the Holder shall have given a Notice of Conversion as provided herein, the Borrower’s obligation to issue and deliver the certificates for Common Stock shall be absolute and unconditional, irrespective of the absence of any action by the Holder to enforce the same, any waiver or consent with respect to any provision thereof, the recovery of any judgment against any person or any action to enforce the same, any failure or delay in the enforcement of any other obligation of the Borrower to the holder of record, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder of any obligation to the Borrower, and irrespective of any other circumstance which might otherwise limit such obligation of the Borrower to the Holder in connection with such conversion. The Conversion Date specified in the Notice of Conversion shall be the Conversion Date so long as the Notice of Conversion is received by the Borrower before 11:59 p.m., New York, New York time, on such date.

(f) Delivery of Common Stock by Electronic Transfer. In lieu of delivering physical certificates or book entry statements representing the Common Stock issuable upon conversion, provided the Borrower is participating in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer (“FAST”) program, upon request of the Holder and its compliance with the provisions contained in Section 1.1 and in this Section 1.4, the Borrower shall use its commercially reasonable best efforts to cause its transfer agent to electronically transmit the Common Stock issuable upon Conversion to the Holder by crediting the account of Holder’s Prime Broker with DTC through its Deposit Withdrawal At Custodian (“DWAC”) system.

(g) DTC Eligibility and Market Loss. If the Borrower fails to maintain its status as “DTC Eligible” for any reason, the principal amount of the Note shall increase by $5,000 (under Holder’s and Borrower’s expectation that any principal amount increase will tack back to the Issue Date) and the Conversion Price shall be redefined to mean seventy percent (70%) multiplied by the Market Price, subject to adjustment as provided in this Note.

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(h) Failure to Deliver Common Stock Prior to Delivery Deadline. Without in any way limiting the Holder’s right to pursue other remedies, including actual damages and/or equitable relief, the parties agree that if delivery of the Common Stock issuable upon conversion of this Note is not delivered by the Deadline (other than a failure due to the circumstances described in Section 1.3 above, which failure shall be governed by such Section) the Borrower shall pay to the Holder $1,000 per day in cash, for each day beyond the Deadline that the Borrower fails to deliver such Common Stock until the Borrower issues and delivers a certificate to the Holder or credit the Holder’s balance account with DTC for the number of shares of Common Stock to which the Holder is entitled upon such Conversion of any Conversion Amount (under Holder’s and Borrower’s expectation that any damages will tack back to the Issue Date). Such cash amount shall be paid to Holder by the fifth (5^th) day of the month following the month in which it has accrued or, at the option of the Holder (by written notice to the Borrower by the first day of the month following the month in which it has accrued), shall be added to the principal amount of this Note, in which event interest shall accrue thereon in accordance with the terms of this Note and such additional Principal Amount shall be convertible into Common Stock in accordance with the terms of this Note. The Borrower agrees that the right to convert is a valuable right to the Holder. The damages resulting from a failure, attempt to frustrate, interference with such conversion right are difficult if not impossible to qualify. Accordingly, the parties acknowledge that the liquidated damages provision contained in this Section 1.4(h) are justified.

(i) Rescindment of a Notice of Conversion. If (i) the Borrower fails to respond to Holder within one (1) business day from the Conversion Date confirming the details of Notice of Conversion; (ii) the Borrower fails to provide any of the shares of the Borrower’s Common Stock requested in the Notice of Conversion within three (3) business days from the date of receipt of the Note of Conversion; (iii) the Holder is unable to procure a legal opinion required to have the shares of the Borrower’s Common Stock issued unrestricted and/or deposited to sell for any reason related to the Borrower’s standing; (iv) the Holder is unable to deposit the shares of the Borrower’s Common Stock requested in the Notice of Conversion for any reason related to the Borrower’s standing,;(v) at any time after a missed Deadline, at the Holder’s sole discretion; or (vi) if OTC Markets changes the Borrower’s designation to ‘Limited Information’ (Yield), ‘No Information’ (Stop Sign), ‘Caveat Emptor’ (Skull & Crossbones), ‘OTC’, ‘Other OTC’, ‘Expert Market’ or ‘Grey Market’ (Exclamation Mark Sign) or other trading restriction on the day of or any day after the Conversion Date, the Holder maintains the option and sole discretion to rescind the Notice of Conversion (“Rescindment”) with a “Notice of Rescindment.”

1.5 Concerning the Shares. The shares of Common Stock issuable upon conversion of this Note may not be sold or transferred unless (a) such shares are sold pursuant to an effective registration statement under the Securities Act; or (b) the Borrower or its transfer agent shall have been furnished with an opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that the shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration; or (c) such shares are sold or transferred pursuant to Rule 144 under the Securities Act (or a successor rule) (“Rule 144”) or other applicable exemption; or (d) such shares are transferred to an “affiliate” (as defined in Rule 144) of the Holder who agrees to sell or otherwise transfer the shares only in accordance with this Section 1.5 and who is an Accredited Investor (as defined in the Purchase Agreement). Except as otherwise provided in the Purchase Agreement (and subject to the removal provisions set forth below), until such time as the shares of Common Stock issuable upon conversion of this Note have been registered under the Securities Act or otherwise may be sold pursuant to Rule 144 or other applicable exemption without any restriction as to the number of securities as of a particular date that can then be immediately sold, each certificate for shares of Common Stock issuable upon conversion of this Note that has not been so included in an effective registration statement or that has not been sold pursuant to an effective registration statement or an exemption that permits removal of the legend, shall bear a legend substantially in the following form, as appropriate:

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“NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT OR OTHER APPLICABLE EXEMPTION. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”

The legend set forth above shall be removed and the Borrower shall issue to the Holder a new certificate therefore free of any transfer legend if (i) the Borrower or its transfer agent shall have received an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such Common Stock may be made without registration under the Securities Act, which opinion shall be reasonably accepted by the Borrower so that the sale or transfer is effected; or (ii) in the case of the Common Stock issuable upon conversion of this Note, such security is registered for sale by the Holder under an effective registration statement filed under the Securities Act or otherwise may be sold pursuant to Rule 144 or other applicable exemption without any restriction as to the number of securities as of a particular date that can then be immediately sold. In the event that the Borrower does not accept the opinion of counsel provided by the Holder with respect to the transfer of Securities pursuant to an exemption from registration, such as Rule 144, at the Deadline, it will be considered an Event of Default pursuant to Section 3.2 of the Note.

1.6 Effect of Certain Events.

(a) Effect of Merger, Consolidation, Etc. At the option of the Holder, the sale, conveyance or disposition of all or substantially all of the assets of the Borrower, the effectuation by the Borrower of a transaction or series of related transactions in which more than 50% of the voting power of the Borrower is disposed of, or the consolidation, merger or other business combination of the Borrower with or into any other Person (as defined below) or Persons when the Borrower is not the survivor shall either: (i) be deemed to be an Event of Default (as defined in Article III) pursuant to which the Borrower shall be required to pay to the Holder upon the consummation of and as a condition to such transaction an amount equal to the Default Amount (as defined in Article III); or (ii) be treated pursuant to Section 1.6(b) hereof. As used in this Note, “Person” shall mean any individual, corporation, limited liability company, partnership, association, trust or other entity or organization.

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(b) Adjustment Due to Merger, Consolidation, Etc. If, at any time when this Note is issued and outstanding and prior to conversion of all of the Notes, there shall be any merger, consolidation, exchange of shares, recapitalization, reorganization, or other similar event, as a result of which shares of Common Stock of the Borrower shall be changed into the same or a different number of shares of another class or classes of stock or securities of the Borrower or another entity, or in case of any sale or conveyance of all or substantially all of the assets of the Borrower other than in connection with a plan of complete liquidation of the Borrower, then the Holder of this Note shall thereafter have the right to receive upon conversion of this Note, upon the basis and upon the terms and conditions specified herein and in lieu of the shares of Common Stock immediately theretofore issuable upon conversion, such stock, securities or assets which the Holder would have been entitled to receive in such transaction had this Note been converted in full immediately prior to such transaction (without regard to any limitations on conversion set forth herein), and in any such case appropriate provisions shall be made with respect to the rights and interests of the Holder of this Note to the end that the provisions hereof (including, without limitation, provisions for adjustment of the Conversion Price and of the number of shares issuable upon conversion of the Note) shall thereafter be applicable, as nearly as may be practicable in relation to any securities or assets thereafter deliverable upon the conversion hereof. The Borrower shall not affect any transaction described in this Section 1.6(b) unless (a) it first gives, to the extent practicable, fifteen (15) days prior written notice (but in any event at least ten (10) days prior written notice) of the record date of the special meeting of stockholders to approve, or if there is no such record date, the consummation of, such merger, consolidation, exchange of shares, recapitalization, reorganization or other similar event or sale of assets (during which time the Holder shall be entitled to convert this Note) and (b) the resulting successor or acquiring entity (if not the Borrower) assumes by written instrument the obligations of this Section 1.6(b). The above provisions shall similarly apply to successive consolidations, mergers, sales, transfers or share exchanges.

(c) Adjustment Due to Distribution. If the Borrower shall declare or make any distribution of its assets (or rights to acquire its assets) to holders of Common Stock as a dividend, stock repurchase, by way of return of capital or otherwise (including any dividend or distribution to the Borrower’s stockholders in cash or shares (or rights to acquire shares) of capital stock of a subsidiary (i.e., a spin-off)) (a “Distribution”), then the Holder of this Note shall be entitled, upon any Conversion of this Note after the date of record for determining stockholders entitled to such Distribution, to receive the amount of such assets which would have been payable to the Holder with respect to the shares of Common Stock issuable upon such Conversion had such Holder been the holder of such shares of Common Stock on the record date for the determination of stockholders entitled to such Distribution.

(d) Adjustment Due to Dilutive Issuance. If, at any time when any Notes are issued and outstanding, the Borrower issues or sells, or in accordance with this Section 1.6(d) hereof is deemed to have issued or sold, except for shares of Common Stock issued in an Exempt Issuance (as hereinafter defined) and any shares issued under conversion or exercise of third party securities that are already outstanding on the Issue Date, any shares of Common Stock for a consideration per share (before deduction of reasonable expenses or commissions or underwriting discounts or allowances in connection therewith) less than the Conversion Price in effect on the date of such issuance (or deemed issuance) of such shares of Common Stock (a “Dilutive Issuance”), then immediately upon the Dilutive Issuance, the Conversion Price will be reduced to the amount of the consideration per share received by the Borrower in such Dilutive Issuance.

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As used in this Note, an “Exempt Issuance” shall mean any transaction involving (i) issuances of securities in a firm commitment underwritten public offering (excluding a continuous offering pursuant to Rule 415 under the Securities Act); (ii) issuances to employees, officers, directors, contractors, consultants or other advisors approved by the Board; (iii) issuances to strategic partners or other parties in connection with a commercial relationship; or providing the Company with equipment leases, real property leases or similar transactions approved by the Board; or (iv) issuances of securities as consideration for a merger, consolidation or purchase of assets, or in connection with any strategic partnership or joint venture (the primary purpose of which is not to raise equity capital), or in connection with the disposition or acquisition of a business, product or license by the Company.

The Borrower shall be deemed to have issued or sold shares of Common Stock if the Borrower in any manner issues or grants any warrants, rights or options (not including employee stock option plans), whether or not immediately exercisable, to subscribe for or to purchase Common Stock or other securities convertible into or exchangeable for Common Stock (“Convertible Securities”) (such warrants, rights and options to purchase Common Stock or Convertible Securities are hereinafter referred to as “Options”) and the price per share for which Common Stock is issuable upon the exercise of such Options is less than the Conversion Price then in effect, then the Conversion Price shall be equal to such price per share. For purposes of the preceding sentence, the “price per share for which Common Stock is issuable upon the exercise of such Options” is determined by dividing (i) the total amount, if any, received or receivable by the Borrower as consideration for the issuance or granting of all such Options, plus the minimum aggregate amount of additional consideration, if any, payable to the Borrower upon the exercise of all such Options, plus, in the case of Convertible Securities issuable upon the exercise of such Options, the minimum aggregate amount of additional consideration payable upon the conversion or exchange thereof at the time such Convertible Securities first become convertible or exchangeable; by (ii) the maximum total number of shares of Common Stock issuable upon the exercise of all such Options (assuming full conversion of Convertible Securities, if applicable). No further adjustment to the Conversion Price will be made upon the actual issuance of such Common Stock upon the exercise of such Options or upon the conversion or exchange of Convertible Securities issuable upon exercise of such Options.

Additionally, the Borrower shall be deemed to have issued or sold shares of Common Stock if the Borrower in any manner issues or sells any Convertible Securities, whether or not immediately convertible (other than in an Exempt Issuance), and the price per share for which Common Stock is issuable upon such conversion or exchange is less than the Conversion Price then in effect, then the Conversion Price shall be equal to such price per share. For the purposes of the preceding sentence, the “price per share for which Common Stock is issuable upon such conversion or exchange” is determined by dividing (i) the total amount, if any, received or receivable by the Borrower as consideration for the issuance or sale of all such Convertible Securities, plus the minimum aggregate amount of additional consideration, if any, payable to the Borrower upon the conversion or exchange thereof at the time such Convertible Securities first become convertible or exchangeable; by (ii) the maximum total number of shares of Common Stock issuable upon the conversion or exchange of all such Convertible Securities. No further adjustment to the Conversion Price will be made upon the actual issuance of such Common Stock upon conversion or exchange of such Convertible Securities.

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(e) Purchase Rights. If, at any time when any Notes are issued and outstanding, the Borrower issues any convertible securities or rights to purchase stock, warrants, securities or other property (the “Purchase Rights”) pro rata to the record holders of any class of Common Stock, then the Holder of this Note will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which such Holder could have acquired if such Holder had held the number of shares of Common Stock acquirable upon complete conversion of this Note (without regard to any limitations on conversion contained herein) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights or, if no such record is taken, the date as of which the record holders of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights.

(f) Notice of Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Price as a result of the events described in this Section 1.6, the Borrower, at its expense, shall promptly compute such adjustment or readjustment and prepare and furnish to the Holder a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Borrower shall, upon the written request at any time of the Holder, furnish to such Holder a like certificate setting forth () such adjustment or readjustment; (ii) the Conversion Price at the time in effect; and (iii) the number of shares of Common Stock and the amount, if any, of other securities or property which at the time would be received upon conversion of the Note.

1.7 Status as Stockholder. Upon submission of a Notice of Conversion by the Holder, (i the shares covered thereby (other than the shares, if any, which cannot be issued because their issuance would exceed such Holder’s allocated portion of the Reserved Amount or Maximum Share Amount) shall be deemed converted into shares of Common Stock; and (b) the Holder’s rights as a Holder of such converted portion of this Note shall cease and terminate, excepting only the right to receive certificates for such shares of Common Stock and to any remedies provided herein or otherwise available at law or in equity to such Holder because of a failure by the Borrower to comply with the terms of this Note. Notwithstanding the foregoing, if a Holder has not received certificates or book entry statements for all shares of Common Stock prior to the tenth (10th) business day after the expiration of the Deadline with respect to a Conversion of any portion of this Note for any reason, then (unless the Holder otherwise elects to retain its status as a holder of Common Stock by so notifying the Borrower) the Holder shall regain the rights of a Holder of this Note with respect to such unconverted portions of this Note and the Borrower shall, as soon as practicable, return such unconverted Note to the Holder or, if the Note has not been surrendered, adjust its records to reflect that such portion of this Note has not been converted. In all cases, the Holder shall retain all of its rights and remedies (including, without limitation, (a) the right to receive Conversion Default Payments pursuant to Section 1.3 to the extent required thereby for such Conversion Default and any subsequent Conversion Default and (b) the right to have the Conversion Price with respect to subsequent conversions determined in accordance with Section 1.3) for the Borrower’s failure to convert this Note.

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1.8 Prepayment. The Borrower may at any time pay or prepay all or any portion of the amounts outstanding hereunder by making a payment to the Holder of an amount in cash equal to the sum of: (a) the then outstanding principal amount of this Note; plus (b) accrued but unpaid interest on the then outstanding Principal Amount of this Note; plus (c) Default Interest, if any.

Article II. CERTAIN COVENANTS

2.1 Distributions on Capital Stock. So long as the Borrower shall have any obligation under this Note, the Borrower shall not without the Holder’s written consent (a) pay, declare or set apart for such payment, any dividend or other distribution (whether in cash, property or other securities) on shares of capital stock other than dividends on shares of Common Stock solely in the form of additional shares of Common Stock; or (b) directly or indirectly or through any subsidiary make any other payment or distribution in respect of its capital stock except for distributions pursuant to any stockholders’ rights plan which is approved by a majority of the Borrower’s disinterested directors.

2.2 Restriction on Stock Repurchases. So long as the Borrower shall have any obligation under this Note, the Borrower shall not without the Holder’s written consent redeem, repurchase or otherwise acquire (whether for cash or in exchange for property or other securities or otherwise) in any one transaction or series of related transactions any shares of capital stock of the Borrower or any warrants, rights or options to purchase or acquire any such shares.

2.3 Borrowings. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s written consent, create, incur, assume guarantee, endorse, contingently agree to purchase or otherwise become liable upon the obligation of any person, firm, partnership, joint venture or corporation, except by the endorsement of negotiable instruments for deposit or collection, or suffer to exist any liability for borrowed money, except (a) borrowings in existence or committed on the Issue Date and of which the Borrower has informed Holder in writing prior to the Issue Date; (b) indebtedness to trade creditors financial institutions or other lenders incurred in the ordinary course of business; (c) borrowings, the proceeds of which shall be used to repay this Note; (d) borrowings which are expressly subordinated to this Note; and (e) indebtedness incurred by the Borrower solely for the purposes of immediate material working capital needs. The Borrower shall use the proceeds from any borrowings or financings following the date hereof to repay this Note and the Borrower’s failure to comply with this covenant shall constitute an Event of Default hereunder.

2.4 Sale of Assets. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s written consent, sell, lease or otherwise dispose of any significant portion of its assets outside the ordinary course of business. Any consent to the disposition of any assets shall be conditioned on a specified use of the proceeds towards the repayment of this Note.

2.5 Advances and Loans. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s written consent, lend money, give credit or make advances to any person, firm, joint venture or corporation, including, without limitation, officers, directors, employees, subsidiaries and affiliates of the Borrower, except loans, credits or advances (a) in existence or committed on the date hereof and which the Borrower has informed Holder in writing prior to the date hereof; (b) made in the ordinary course of business; or (c) not in excess of $100,000 individually or in the aggregate.

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2.6 Section 3(a)(9) or 3(a)(10) Transaction. So long as this Note is outstanding, the Borrower shall not enter into any transaction or arrangement structured in accordance with, based upon, or related or pursuant to, in whole or in part, either Section 3(a)(9) of the Securities Act (a “3(a)(9) Transaction”) or Section 3(a)(10) of the Securities Act (a “3(a)(10) Transaction”). In the event that the Borrower does enter into, or makes any issuance of Common Stock related to a 3(a)(9) Transaction or a 3(a)(10) Transaction while this note is outstanding, a liquidated damages charge of 25% of then outstanding Principal Amount of this Note, but not less than $1,500, will be assessed and will become immediately due and payable to the Holder at its election in the form of cash payment or addition to the then outstanding Principal Balance of this Note.

2.7 Preservation of Existence, etc. The Borrower shall maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, its existence, rights and privileges, and become or remain, and cause each of its Subsidiaries (other than dormant Subsidiaries that have no or minimum assets) to become or remain, duly qualified and in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction of its business makes such qualification necessary.

2.8 Non-circumvention. The Borrower hereby covenants and agrees that the Borrower will not, by amendment of its Certificate or Articles of Incorporation or Bylaws, or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Note, and will at all times in good faith carry out all the provisions of this Note and take all action as may be required to protect the rights of the Holder.

Article III. EVENTS OF DEFAULT

If any of the following events of default (each, an “Event of Default”) shall occur:

3.1 Failure to Pay Principal or Interest. The Borrower fails to pay the principal hereof or interest thereon when due on this Note, whether at maturity, upon acceleration or otherwise within five (5) business days of the date such amount is due.

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3.2 Conversion and issuance of the Shares. The Borrower (a) fails to issue shares of Common Stock to the Holder (or announces or threatens in writing that it will not honor its obligation to do so) upon exercise by the Holder of the conversion rights of the Holder in accordance with the terms of this Note; (b) fails to transfer or cause its transfer agent to transfer (issue) (electronically or in certificated form) any certificate for shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note; (c) directs its transfer agent not to transfer or delays, impairs, and/or hinders its transfer agent in transferring (or issuing) (electronically or in certificated form) any certificate or book entry statement for shares of Common Stock to be issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note; (iv) fails to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate or book entry statement for any shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note (or makes any written announcement, statement or threat that it does not intend to honor the obligations described in this paragraph) and any such failure shall continue uncured (or any written announcement, statement or threat not to honor its obligations shall not be rescinded in writing) for three (3) business days after the Holder shall have delivered a Notice of Conversion; (v) fails to remain current in its obligations to its transfer agent,;(vi) causes a conversion of this Note to be delayed, hindered or frustrated due to a balance owed by the Borrower to its transfer agent; (vii) fails to repay Holder, within forty eight (48) hours of a demand from the Holder, any amount of funds advanced by Holder to Borrower’s transfer agent in order to process a conversion, (viii) fails to reserve sufficient amount of shares of common stock to satisfy the Reserved Amount at all times; (ix) fails to provide a Rule 144 opinion letter from the Borrower’s legal counsel to the Holder, covering the Holder’s resale into the public market of the respective conversion shares under this Note, within two (2) business days of the Holder’s submission of a Notice of Conversion to the Borrower (provided that the Holder must request the opinion from the Borrower at the time that Holder submits the respective Notice of Conversion and the date of the respective Notice of Conversion must be on or after the date which is six (6) months after the date that the Holder funded the Purchase Price under this Note); and/or (x) an exemption under Rule 144 is unavailable for the Holder’s deposit into Holder’s brokerage account and resale into the public market of any of the conversion shares under this Note at any time after the date which is six (6) months after the date that the Holder funded the Purchase Price under this Note (other than as a result of the Holder’s status as an affiliate of the Borrower).

3.3 Failure to Deliver Transaction Expense Amount. The Borrower fails to deliver the Transaction Expense Amount (as defined in the Purchase Agreement) to the Holder within three (3) business days of the date such amount is due.

3.4 Breach of Covenants. The Borrower breaches any material covenant or other material term or condition contained in this Note and any collateral documents including but not limited to the Purchase Agreement and such breach continues for a period of five (5) days after written notice thereof to the Borrower from the Holder.

3.5 Breach of Representations and Warranties. Any representation or warranty of the Borrower made herein or in any agreement, statement or certificate given in writing pursuant hereto or in connection herewith (including, without limitation, the Purchase Agreement), shall be false or misleading in any material respect when made and the breach of which has (or with the passage of time will have) a material adverse effect on the rights of the Holder with respect to this Note or the Purchase Agreement.

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3.6 Receiver or Trustee. The Borrower or any subsidiary of the Borrower shall make an assignment for the benefit of creditors or commence proceedings for its dissolution, or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business, or such a receiver or trustee shall otherwise be appointed for the Borrower or for a substantial part of its property or business without its consent and shall not be discharged within sixty (60) days after such appointment.

3.7 Judgments. Any money judgment, writ or similar process shall be entered or filed against the Borrower or any subsidiary of the Borrower or any of its property or other assets for more than $100,000, and shall remain unvacated, unbonded or unstayed for a period of thirty (30) days unless otherwise consented to by the Holder.

3.8 Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings, voluntary or involuntary, for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower or any subsidiary of the Borrower, or the Borrower admits in writing its inability to pay its debts generally as they mature, or have filed against it an involuntary petition for bankruptcy relief, all under federal or state laws as applicable or the Borrower admits in writing its inability to pay its debts generally as they mature, or have filed against it an involuntary petition for bankruptcy relief, all under international, federal or state laws as applicable.

3.9 Failure to Comply with the Exchange Act. If, one the Borrower becomes subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, the Borrower shall fail to comply with such reporting requirements of the Exchange Act (including but not limited to becoming delinquent in its filings); and/or the Borrower shall cease to be subject to such reporting requirements of the Exchange Act.

3.10 Liquidation. Any dissolution, liquidation, or winding up of Borrower or any substantial portion of its business.

3.11 Cessation of Operations. Any cessation of operations by Borrower or Borrower admits it is otherwise generally unable to pay its debts as such debts become due, provided, however, that any disclosure of the Borrower’s ability to continue as a “going concern” shall not be an admission that the Borrower cannot pay its debts as they become due.

3.12 Maintenance of Assets. The failure by Borrower to maintain any material intellectual property rights, personal, real property or other assets which are necessary to conduct its business (whether now or in the future), or any disposition or conveyance of any material asset of the Borrower.

3.13 Financial Statement Restatement. The restatement of any financial statements filed by the Borrower with the SEC or OTC Markets for any date or period from two (2) years prior to the Issue Date of this Note and until this Note is no longer outstanding, if the result of such restatement would, by comparison to the unrestated financial statement, have constituted a material adverse effect on the rights of the Holder with respect to this Note or the Purchase Agreement.

3.14 Reverse Splits. The Borrower effectuates a reverse split of its Common Stock without twenty (20) days prior written notice to the Holder.

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3.16 Replacement of Transfer Agent. In the event that the Borrower proposes to replace its transfer agent, the Borrower fails to provide, prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to the Purchase Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock in the Reserved Amount) signed by the successor transfer agent to Borrower and the Borrower.

3.17 Cross-Default. Notwithstanding anything to the contrary contained in this Note or the other Transaction Documents (as defined in the Purchase Agreement),a breach of or the occurrence of an Event of Default under any of the other Transaction Documents or under loans, credits or advances (a) in existence or committed on the date hereof and which the Borrower has informed Holder in writing prior to the date hereof; (b) made in the ordinary course of business; or (c) otherwise permitted under Section 2.5 of this Note, which in any instance is continuing after the expiration of applicable notice, grace or cure periods shall, at the option of the Holder, be considered and Event of Default under this Note and the other Transaction Documents. In such event, the Holder shall be entitled (but in no event required) to apply all rights and remedies of the Holder under the terms of this Note and the other Transaction Documents by reason of a breach, default or Event of Default having occurred under this Note or any other Transaction Document.

3.18 OTC Markets Designation. OTC Markets changes the Borrower’s designation to ‘No Information’ (Stop Sign), ‘Caveat Emptor’ (Skull and Crossbones), or ‘OTC’, ‘Other OTC’, ‘Expert Market’ or ‘Grey Market’ (Exclamation Mark Sign).

3.19 Delisting or Suspension of Trading of Common Stock. If, at any time on or after the Issue Date, the Borrower’s Common Stock (i) is suspended from trading; (ii) halted from trading; and/or (iii) fails to be quoted or listed (as applicable) on any level of the OTC Markets, any tier of the Nasdaq Stock Market, the New York Stock Exchange, or the NYSE MKT.

3.20 Inside Information. Any attempt by the Borrower or its officers, directors, and/or affiliates to transmit, convey, disclose, or any actual transmittal, conveyance, or disclosure by the Borrower or its officers, directors, and/or affiliates of, material non-public information concerning the Borrower, to the Holder or its successors and assigns, which is not immediately cured by Borrower’s filing of a Current Report on Form 8-K pursuant to Regulation FD with the SEC on that same date.

3.21 Unavailability of Rule 144. If, at any time on or after the date which is six (6) months after the Issue Date (unless the Borrower is not then subject to the reporting requirements of Section 13(d) or 15 of the Exchange Act, in which case such date will be the earlier of ninety (90) days after the Borrower becomes subject to such reporting requirements or one year after the Issue Date), the Holder is unable to (i) obtain a standard “144 legal opinion letter” from an attorney reasonably acceptable to the Holder, the Holder’s brokerage firm (and respective clearing firm), and the Borrower’s transfer agent in order to facilitate the Holder’s conversion of any portion of the Note into free trading shares of the Borrower’s Common Stock pursuant to Rule 144; and (ii) thereupon deposit such shares into the Holder’s brokerage account (in each case, other than as a result of Holder’s status as an affiliate of the Borrower).

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3.22 Failure to File Registration Statement. If the Borrower shall fail to timely file and cause to be declared and maintained effective a registration statement under the Securities Act as required under Section 4(q) of the Purchase Agreement.

UPON THE OCCURRENCE OF ANY EVENT OF DEFAULT SPECIFIED IN SECTION 3 OF THIS NOTE, THE NOTE SHALL BECOME IMMEDIATELY AND AUTOMATICALLY DUE AND PAYABLE WITHOUT DEMAND, PRESENTMENT, OR NOTICE AND THE BORROWER SHALL PAY TO THE HOLDER, IN FULL SATISFACTION OF ITS OBLIGATIONS HEREUNDER, AN AMOUNT EQUAL TO: (A) IN THE EVENT OF AN OCCURRENCE OF ANY EVENT OF DEFAULT SPECIFIED IN OF SECTION 3.2, 3.9, 3.10, 3.11, 3.15, 3.16, 3.17, 3.18, 3.19, 3.20, 3.21 or 3.22, (W) THE THEN OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE; PLUS (X) ACCRUED AND UNPAID INTEREST ON THE UNPAID PRINCIPAL AMOUNT OF THIS NOTE TO THE DATE OF PAYMENT (THE “MANDATORY PREPAYMENT DATE”); PLUS (Y) DEFAULT INTEREST, IF ANY, ON THE AMOUNTS REFERRED TO IN CLAUSES (W) AND/OR (X); PLUS (Z) ANY AMOUNTS OWED TO THE HOLDER PURSUANT TO SECTIONS 1.3 AND 1.4(G) HEREOF, MULTIPLIED BY TWO (2); OR (B) IN THE EVENT OF THE OCCURRENCE OF ANY EVENT OF DEFAULT SPECIFIED IN ANY OTHER SECTION, (W) THE THEN OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE; PLUS (X) ACCRUED AND UNPAID INTEREST ON THE UNPAID PRINCIPAL AMOUNT OF THIS NOTE TO THE MANDATORY PREPAYMENT DATE; PLUS (Y) DEFAULT INTEREST, IF ANY, ON THE AMOUNTS REFERRED TO IN CLAUSES (W) AND/OR (X) PLUS; (Z) ANY AMOUNTS OWED TO THE HOLDER PURSUANT TO SECTIONS 1.3 AND 1.4(G) HEREOF (THE THEN OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AS OF THE DATE OF PAYMENT PLUS THE AMOUNTS REFERRED TO IN CLAUSES (X), (Y) AND (Z) SHALL COLLECTIVELY BE KNOWN AS THE “DEFAULT SUM”) or at the option of the Holder, the “parity value” of the Default Sum to be prepaid, where parity value means (a) the highest number of shares of Common Stock issuable upon conversion of or otherwise pursuant to such Default Sum in accordance with Article I, treating the Trading Day immediately preceding the Mandatory Prepayment Date as the “Conversion Date” for purposes of determining the lowest applicable Conversion Price, unless the Default Event arises as a result of a breach in respect of a specific Conversion Date in which case such Conversion Date shall be the Conversion Date),; multiplied by (b) the highest trading price for the Common Stock during the period beginning on the date of first occurrence of the Event of Default and ending one day prior to the Mandatory Prepayment Date (the “Default Amount”) and all other amounts payable hereunder shall immediately become due and payable, all without demand, presentment or notice, all of which hereby are expressly waived, together with all costs, including, without limitation, legal fees and expenses, of collection, and the Holder shall be entitled to exercise all other rights and remedies available at law or in equity. Further, if a breach of Sections 3.9, 3.18 and/or 3.19 occurs or is continuing after the nine (9) month anniversary of this Note, then the principal amount of the Note shall increase by $15,000 (under Holder’s and Borrower’s expectation that any principal amount increase will tack back to the Issue Date) and the Holder shall be entitled to use the lowest trading price during the delinquency period as a base price for the conversion with the Conversion Price shall be redefined to mean forty percent (40%) multiplied by the Market Price, subject to adjustment as provided in this Note. For example, if the lowest trading price during the delinquency period is $0.50 per share and the conversion discount is 50%, then the Holder may elect to convert future conversions at $0.25 per share. If this Note is not paid at Maturity Date, then the outstanding principal due under this Note shall increase by $15,000.

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The Holder shall have the right at any time after an Event of Default occurs under this Note to require the Borrower, to immediately issue, in lieu of the Default Amount and/or Default Sum, the number of shares of Common Stock of the Borrower equal to the Default Amount and/or Default Sum divided by the Conversion Price then in effect, pursuant to the terms of this Note (including but not limited to any beneficial ownership limitations contained herein). This requirement by the Borrower shall automatically apply upon the occurrence of an Event of Default without the need for any party to give any notice or take any other action.

If the Holder shall commence an action or proceeding to enforce any provisions of this Note, including, without limitation, engaging an attorney, then if the Holder prevails in such action, the Holder shall be reimbursed by the Borrower for its attorneys’ fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.

If the Holder shall commence an action or proceeding to enforce any provisions of this Note, including, without limitation, engaging an attorney, the Holder shall be entitled to use the lowest trading price during the delinquency period as a base price for the conversion and the Conversion Price shall be redefined to mean forty percent (40%) multiplied by the Market Price, subject to adjustment as provided in this Note.

Article IV. MISCELLANEOUS

4.1 Failure or Indulgence Not Waiver. No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privileges. All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.

4.2 Notices. Any notices or other communications required or permitted to be given under the terms of this Note that must be in writing will be deemed to have been delivered (a) upon receipt, when delivered personally; (b) upon receipt, when sent by email; or (c) one (1) day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the same. The addresses for such communications shall be as follows.

If to the Borrower:	Solar Integrated Roofing Corporation
	2831 St. Rose Pkwy
	Suite 200
	Henderson, NV 89052
	Attention: Chief Executive Officer
If to the Holder:	AJB Capital Investments, LLC
	4700 Sheridan Street
	Suite J
	Hollywood, FL 33021
	Attention: Managing Partner

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Each party shall provide five (5) business days prior notice to the other party of any change in address in accordance with the provisions of this Section 4.2.

4.3 Amendments. This Note and any provision hereof may only be amended by an instrument in writing signed by the Borrower and the Holder. The term “Note” and all reference thereto, as used throughout this instrument, shall mean this instrument (and the other Notes issued pursuant to the Purchase Agreement) as originally executed, or if later amended or supplemented, then as so amended or supplemented.

4.4 Assignability. This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to be the benefit of the Holder and its successors and assigns. Neither the Borrower nor the Holder shall assign this Note or any rights or obligations hereunder without the prior written consent of the other. Notwithstanding the foregoing, the Holder may assign its rights hereunder to any “accredited investor” (as defined in Rule 501(a) of Regulation D under the Securities Act) in a private transaction from the Holder or to any of its “affiliates”, as that term is defined under the Exchange Act, without the consent of the Borrower. Notwithstanding anything in this Note to the contrary, this Note may be pledged as collateral in connection with a bona fide margin account or other lending arrangement. The Holder and any assignee, by acceptance of this Note, acknowledge and agree that following conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note represented by this Note may be less than the amount stated on the face hereof.

4.5 Cost of Collection. Without in any way limiting Article III of this Note, if default is made in the payment of this Note, the Borrower shall pay the Holder hereof reasonable costs of collection, including reasonable attorneys’ fees.

4.6 Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of Nevada without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Note shall be brought only in the state courts located in the State of New York or federal courts located in the State of New York. The parties to this Note hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. THE BORROWER HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS NOTE OR ANY TRANSACTION CONTEMPLATED HEREBY. The prevailing party shall be entitled to recover from the other party its reasonable attorney’s fees and costs. In the event that any provision of this Note or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Agreement or any other Transaction Document by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

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4.7 Certain Amounts. Whenever pursuant to this Note the Borrower is required to pay an amount in excess of the outstanding principal amount (or the portion thereof required to be paid at that time) plus accrued and unpaid interest plus Default Interest on such interest, the Borrower and the Holder agree that the actual damages to the Holder from the receipt of cash payment on this Note may be difficult to determine and the amount to be so paid by the Borrower represents stipulated damages and not a penalty and is intended to compensate the Holder in part for loss of the opportunity to convert this Note and to earn a return from the sale of shares of Common Stock acquired upon conversion of this Note at a price in excess of the price paid for such shares pursuant to this Note. The Borrower and the Holder hereby agree that such amount of stipulated damages is not plainly disproportionate to the possible loss to the Holder from the receipt of a cash payment without the opportunity to convert this Note into shares of Common Stock.

4.8 Purchase Agreement. By its acceptance of this Note, each party agrees to be bound by the applicable terms of the Purchase Agreement.

4.9 Notice of Corporate Events. Except as otherwise provided below, the Holder of this Note shall have no rights as a Holder of Common Stock unless and only to the extent that it converts this Note into Common Stock. The Borrower shall provide the Holder with prior notification of any meeting of the Borrower’s stockholders (and copies of proxy materials and other information sent to stockholders). In the event of any taking by the Borrower of a record of its stockholders for the purpose of determining stockholders who are entitled to receive payment of any dividend or other distribution, any right to subscribe for, purchase or otherwise acquire (including by way of merger, consolidation, reclassification or recapitalization) any share of any class or any other securities or property, or to receive any other right, or for the purpose of determining stockholders who are entitled to vote in connection with any proposed sale, lease or conveyance of all or substantially all of the assets of the Borrower or any proposed liquidation, dissolution or winding up of the Borrower, the Borrower shall mail a notice to the Holder, at least twenty (20) days prior to the record date specified therein (or thirty (30) days prior to the consummation of the transaction or event, whichever is earlier), of the date on which any such record is to be taken for the purpose of such dividend, distribution, right or other event, and a brief statement regarding the amount and character of such dividend, distribution, right or other event to the extent known at such time. The Borrower shall make a public announcement of any event requiring notification to the Holder hereunder substantially simultaneously with the notification to the Holder in accordance with the terms of this Section 4.9 including, but not limited to, name changes, recapitalizations, etc. as soon as possible under law.

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4.10 Usury. If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury, the applicable provision shall automatically be revised to equal the maximum rate of interest or other amount deemed interest permitted under applicable law. The Borrower covenants (to the extent that it may lawfully do so) that it will not seek to claim or take advantage of any law that would prohibit or forgive the Borrower from paying all or a portion of the principal or interest on this Note.

4.11 Remedies. The Borrower acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder, by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Borrower acknowledges that the remedy at law for a breach of its obligations under this Note will be inadequate and agrees, in the event of a breach or threatened breach by the Borrower of the provisions of this Note, that the Holder shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Note and to enforce specifically the terms and provisions thereof, without the necessity of showing economic loss and without any bond or other security being required. No provision of this Note shall alter or impair the obligation of the Borrower, which is absolute and unconditional, to pay the principal of, and interest on, this Note at the time, place, and rate, and in the form, herein prescribed.

4.12 Severability. In the event that any provision of this Note is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision hereof.

4.13 Dispute Resolution. In the case of a dispute as to the determination of the Conversion Price, Conversion Amount, any prepayment amount or Default Amount, Default Sum, Closing or Maturity Date, the closing bid price, or fair market value (as the case may be) or the arithmetic calculation of the Conversion Price or the applicable prepayment amount(s) (as the case may be), the Borrower or the Holder shall submit the disputed determinations or arithmetic calculations via facsimile (a) within two (2) business days after receipt of the applicable notice giving rise to such dispute to the Borrower or the Holder; or (b) if no notice gave rise to such dispute, at any time after the Holder learned of the circumstances giving rise to such dispute. If the Holder and the Borrower are unable to agree upon such determination or calculation within two (2) business days of such disputed determination or arithmetic calculation (as the case may be) being submitted to the Borrower or the Holder, then the Borrower shall, within two (2) business days, submit via facsimile (a) the disputed determination of the Conversion Price, the closing bid price, the or fair market value (as the case may be) to an independent, reputable investment bank selected by the Borrower and approved by the Holder; or (b) the disputed arithmetic calculation of the Conversion Price, Conversion Amount, any prepayment amount or Default Amount, Default Sum to an independent, outside accountant selected by the Holder that is reasonably acceptable to the Borrower. The Borrower shall cause at its expense the investment bank or the accountant to perform the determinations or calculations and notify the Borrower and the Holder of the results no later than ten (10) Business Days from the time it receives such disputed determinations or calculations. Such investment bank’s or accountant’s determination or calculation shall be binding upon all parties absent demonstrable error.

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IN WITNESS WHEREOF, the Borrower has caused this Note to be signed in its name by its duly authorized officer as of the date first above written.

THE BORROWER
SOLAR INTEGRATED ROOFING CORPORATION
By:	/s/ David Massey
Name:	David Massey
Title:	CEO

       

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EXHIBIT A

NOTICE OF CONVERSION

The undersigned hereby elects to convert $_________________ in principal amount of the Note (defined below) together with $                                                                     of accrued but unpaid interest thereto, totaling $_____________ into that number of shares of Common Stock to be issued pursuant to the conversion of the Note (“Common Stock”) as set forth below, of Solar Integrated Roofing Corporation,, a Nevada corporation (the “Borrower”), according to the conditions of the convertible note of the Borrower dated as of August __, 2022 (the “Note”), as of the date written below. No fee will be charged to the Holder for any conversion, except for transfer taxes, if any.

Box Checked as to applicable instructions:

☐	The Borrower shall electronically transmit the Common Stock issuable pursuant to this Notice of Conversion to the account of the undersigned or its nominee with DTC through its Deposit Withdrawal At Custodian system (“DWAC Transfer”).
	Name of DTC Prime Broker:
	Account Number:
☐	The undersigned hereby requests that the Borrower issue a certificate or book entry statement or certificates or book entry statements for the number of shares of Common Stock set forth below (which numbers are based on the Holder’s calculation attached hereto) in the name(s) specified immediately below or, if additional space is necessary, on an attachment hereto:
	Name:
	Address:
	Date of Conversion:
	Applicable Conversion Price: $
	Number of Shares of Common Stock to be Issued
	Pursuant to Conversion of the Notes:
	Amount of Principal Balance Due remaining
	Under the Note after this conversion:
	Accrued and unpaid interest remaining: $

AJB CAPITAL INVESTMENTS, LLC
By:		Date:
	Name
	Title

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EX-10.37

EXHIBIT 10.37

NEITHER THE ISSUANCE AND SALE OF THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER THE SECURITIES ACT OR OTHER APPLICABLE EXEMPTION. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

COMMON STOCK PURCHASE WARRANT

SOLAR INTEGRATED ROOFING CORPORATION

Warrant Shares: 500,000

Date of Issuance: September 9, 2022 (“Issuance Date”)

This COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received by SOLAR INTEGRATED ROOFING CORPORATION, a Nevada corporation (the “Company”), AJB CAPITAL INVESTMENTS, LLC, a Delaware limited liability company (the “Holder”) , is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the Issuance Date, to, up to 500,000 shares of Common Stock (as hereinafter defined) of the Company(as may be adjusted from time to time pursuant to the terms and conditions of this Warrant, the “Warrant Shares), in whole or in part, at any time or from time to time during the period commencing on the Issuance Date and ending on 5:00 p.m. Eastern Time on the fifth anniversary thereof (the “Exercise Period’), at an exercise price of $0.50 per Warrant Share (as may be adjusted from time pursuant to the terms and conditions of this Warrant, the “Exercise Price”),

This Warrant is issued by the Company pursuant to that certain securities purchase agreement dated September 9, 2022, by and between the Company and the Holder (the “Purchase Agreement”). Capitalized terms not otherwise defined in this Warrant shall have the meanings set forth in the Purchase Agreement

1. EXERCISE OF WARRANT.

(a) Mechanics of Exercise. Subject to the terms and conditions hereof, the rights represented by this Warrant may be exercised in whole or in part at any time or from time to time times during the Exercise Period by delivery of a written notice, in the form attached hereto as Exhibit A (the “Exercise Notice”), of the Holder’s election to exercise this Warrant. The Holder shall not be required to deliver the original Warrant in order to effect an exercise hereunder. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. On or before the second Trading Day (the “Warrant Share Delivery Date”) following the date on which the Holder sent the Exercise Notice to the Company or the Company’s transfer agent, and upon receipt by the Company of payment to the Company of an amount equal to the applicable Exercise Price multiplied by the number of Warrant Shares as to which all or a portion of this Warrant is being exercised (the “Aggregate Exercise Price” and together with the Exercise Notice, the “Exercise Delivery Documents”) in cash or by wire transfer of immediately available funds (except for cashless exercise hereunder), the Company shall (or direct its transfer agent to) issue and dispatch by overnight courier to the address as specified in the Exercise Notice, a certificate or book entry statement in the name of the Holder or its designee, representing the number of Warrant Shares to which the Holder is entitled pursuant to such exercise (or deliver such shares of Common Stock in electronic format if requested by the Holder). Upon delivery of the Exercise Delivery Documents, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the certificates evidencing such Warrant Shares. If this Warrant is submitted in connection with any exercise and the number of Warrant Shares represented by this Warrant submitted for exercise is greater than the number of Warrant Shares being acquired upon an exercise, then the Company shall as soon as practicable and in no event later than three Business Days after any exercise and at its own expense, issue a new Warrant (in accordance with Section 6) representing the right to purchase the number of Warrant Shares purchasable immediately prior to such exercise under this Warrant, less the number of Warrant Shares with respect to which this Warrant is exercised.

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If the Company fails to cause its transfer agent to transmit to the Holder the respective shares of Common Stock by the respective Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise in Holder’s sole discretion, and such failure shall be deemed an Event of Default as defined under that certain $600,000.00 principal amount promissory note of even date herewith, issued by the Company to the Holder pursuant to the Purchase Agreement..

(b) Cashless Exercise. Notwithstanding Section 1(a) above, in the event the Company fails to file and have declared and maintained effective, a registration statement under the Securities Act covering the resale of the Warrant Shares by the Holder, then at the option of the Holder, this Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

(A) = as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to this Section 1(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on the principal Trading Market as reported by Bloomberg L.P. (“Bloomberg”) as of the time of the Holder’s execution of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to this Section 1(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 1(a) hereof after the close of “regular trading hours” on such Trading Day;

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(B) = the Exercise Price of this Warrant, as then in effect; and

(X) = the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise.

If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the holding period of the Warrant Shares being issued may be tacked on to the holding period of this Warrant. The Company agrees not to take any position contrary to this Section 1(b).

“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading Market on which the Common Stock are then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (Eastern Time) to 4:02 p.m. (Eastern Time)); (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable; (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on OTC Pink (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a shares of Common Stock as determined by an independent appraiser selected in good faith by the Holder reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

(c) No Fractional Shares. No fractional shares shall be issued upon the exercise of this Warrant as a consequence of any adjustment pursuant hereto. All Warrant Shares (including fractions) issuable upon exercise of this Warrant may be aggregated for purposes of determining whether the exercise would result in the issuance of any fractional share. If, after aggregation, the exercise would result in the issuance of a fractional share, the Company shall, in lieu of issuance of any fractional share, pay the Holder otherwise entitled to such fraction a sum in cash equal to the product resulting from multiplying the then-current fair market value of a Warrant Share by such fraction.

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(d) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, to the extent that after giving effect to issuance of Warrant Shares upon exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other persons acting as a group together with the Holder or any of the Holder’s Affiliates), would beneficially own in excess of the Beneficial Ownership Limitation, as defined below. For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, non-exercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates; and (ii) exercise or conversion of the unexercised or non-converted portion of any other securities of the Company (including without limitation any other Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates. Except as set forth in the preceding sentence, for purposes of this Section 1(d), beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 1(d) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any affiliates) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination.

For purposes of this Section1(d), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (i) the Company’s most recent periodic or annual report filed under the Exchange Act; (B) a more recent public announcement by the Company; or (C) a more recent written notice by the Company or its transfer agent setting forth the number of shares of Common Stock outstanding. Upon the request of a Holder, the Company shall within two (2) Trading Days confirm to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its affiliates since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The limitations contained in this paragraph shall apply to a successor Holder of this Warrant.

2. ADJUSTMENTS. The Exercise Price and the number of Warrant Shares shall be adjusted from time to time as follows:

(a) Distribution of Assets. If the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including without limitation any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, any Exercise Price in effect immediately prior to the close of business on the record date fixed for the determination of holders of shares of Common Stock entitled to receive the Distribution shall be reduced, effective as of the close of business on such record date, to a price determined by multiplying such Exercise Price by a fraction (A) the numerator of which shall be the Closing Sale Price of the shares of Common Stock on the Trading Day immediately preceding such record date minus the value of the Distribution (as determined in good faith by the Company’s Board of Directors) applicable to one share of Common Stock; and (B) the denominator of which shall be the Closing Sale Price of the shares of Common Stock on the Trading Day immediately preceding such record date.

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(b) Adjustments to Exercise Price. If and whenever, at any time while this Warrant is outstanding, the Company issues or sells, or in accordance with this Section 2 is deemed to have issued or sold, any warrant or option to purchase Common Stock and/or Common Stock Equivalents (including shares of Common Stock owned or held by or for the account of the Company), but excluding any securities issued or sold or deemed to have been issued or sold solely in connection with an Exempt Issuance, with a purchase price per share (the “New Issuance Price”) less than the Exercise Price in effect immediately prior to such issuance or sale or deemed issuance or sale, then immediately after such issuance or sale or deemed issuance or sale, the Exercise Price then in effect shall be reduced to an amount equal to the New Issuance Price (subject to adjustment as provided herein). For the avoidance of doubt the parties agree that any issuance of shares upon a conversion or exercise of any outstanding security entered into prior to this Warrant, shall not qualify for any adjustments to exercise price.

(c) Subdivision or Combination of Common Stock. If the Company at any time on or after the Issuance Date subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into a greater number of shares, the Exercise Price in effect immediately prior to such subdivision will be proportionately reduced and the number of Warrant Shares will be proportionately increased. If the Company at any time on or after the Issuance Date combines (by combination, reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the Exercise Price in effect immediately prior to such combination will be proportionately increased and the number of Warrant Shares will be proportionately decreased. Any adjustment under this Section 2(c) shall become effective at the close of business on the date the subdivision or combination becomes effective. Each such adjustment of the Exercise Price shall be calculated to the nearest one-hundredth of a cent. Such adjustment shall be made successively whenever any event covered by this Section 2(c) shall occur.

3. FUNDAMENTAL TRANSACTIONS. If, at any time while this Warrant is outstanding, (a) the Company effects any merger of the Company with or into another entity and the Company is not the surviving entity (such surviving entity, the “Successor Entity”); (b) the Company effects any sale of all or substantially all of its assets in one or a series of related transactions; (c) any tender offer or exchange offer (whether by the Company or by another individual or entity, and approved by the Company) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares of Common Stock for other securities, cash or property and the holders of at least 50% of the Common Stock accept such offer; or (d) the Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (other than as a result of a subdivision or combination of shares of Common Stock) (in any such case, a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive the number of shares of Common Stock of the Successor Entity or of the Company and any additional consideration (the “Alternate Consideration”) receivable upon or as a result of such reorganization, reclassification, merger, consolidation or disposition of assets by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such event (disregarding any limitation on exercise contained herein solely for the purpose of such determination). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. To the extent necessary to effectuate the foregoing provisions, any Successor Entity in such Fundamental Transaction shall issue to the Holder a new warrant consistent with the foregoing provisions and evidencing the Holder’s right to exercise such warrant into Alternate Consideration.

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4. NON-CIRCUMVENTION. The Company covenants and agrees that it will not, by amendment of its certificate of incorporation, bylaws or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will at all times in good faith carry out all the provisions of this Warrant and take all action as may be required to protect the rights of the Holder. Without limiting the generality of the foregoing, the Company (a) shall not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect; (b shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable shares of Common Stock upon the exercise of this Warrant, and (c) shall, for so long as this Warrant is outstanding, have authorized and reserved, free from preemptive rights, ten times the number of shares of Common Stock that is actually issuable upon full exercise of the Warrant (based on the Exercise Price in effect from time to time, and without regard to any limitations on exercise).

5. WARRANT HOLDER NOT DEEMED A SHAREHOLDER. Except as otherwise specifically provided herein, this Warrant, in and of itself, shall not entitle the Holder to any voting rights or other rights as a shareholder of the Company. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company.

6. REISSUANCE.

(a) Lost, Stolen or Mutilated Warrant. If this Warrant is lost, stolen, mutilated or destroyed, the Company will, on such terms as to indemnity or otherwise as it may reasonably impose (which shall, in the case of a mutilated Warrant, include the surrender thereof), issue a new Warrant of like denomination and tenor as this Warrant so lost, stolen, mutilated or destroyed.

(b) Issuance of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant shall be of like tenor with this Warrant, and shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date.

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7. TRANSFER. This Warrant shall be binding upon the Company and its successors and assigns, and shall inure to be the benefit of the Holder and its successors and assigns. Notwithstanding anything to the contrary herein, the rights, interests or obligations of the Company hereunder may not be assigned, by operation of law or otherwise, in whole or in part, by the Company without the prior signed written consent of the Holder, which consent may be withheld at the sole discretion of the Holder (any such assignment or transfer shall be null and void if the Company does not obtain the prior signed written consent of the Holder). This Warrant or any of the severable rights and obligations inuring to the benefit of or to be performed by Holder hereunder may be assigned by Holder to a third party, in whole or in part, without the need to obtain the Company’s consent thereto.

8. NOTICES. Any notices or other communications required or permitted to be given under the terms of this Warrant that must be in writing will be deemed to have been delivered (a) upon receipt, when delivered personally; (b) upon receipt, when sent by email; or (c) one (1) day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the same. The addresses for such communications shall be as set forth in the preamble to this Agreement. Each party shall provide five (5) business days prior notice to the other party of any change in address in accordance with the provisions of this Section 8.

9. AMENDMENT AND WAIVER. The terms of this Warrant may be amended or waived (either generally or in a particular instance and either retroactively or prospectively) only with the written consent of the Company and the Holder.

10. GOVERNING LAW AND VENUE. This Warrant shall be governed by and construed in accordance with the laws of the State of Nevada without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Warrant shall be brought only in the state courts located in the State of New York or in the federal courts located in the State of New York, County of New York. The parties to this Warrant hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY. The prevailing party shall be entitled to recover from the other party its reasonable attorney’s fees and costs. In the event that any provision of this Warrant or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Agreement or any other Transaction Document by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under the Purchase Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

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11. ACCEPTANCE. Receipt of this Warrant by the Holder shall constitute acceptance of and agreement to all of the terms and conditions contained herein.

12. CERTAIN DEFINITIONS. In addition to capitalized terms not otherwise defined herein or in the Purchase Agreement, the following capitalized terms as used herein shall have the following meanings:

(a) “Nasdaq” means the Nasdaq Stock Market, LLC.

(b) “Closing Sale Price” means, for any security as of any date, (a) the last closing trade price for such security on the Principal Market, as reported by Nasdaq, or, if the Principal Market begins to operate on an extended hours basis and does not designate the closing trade price, then the last trade price of such security prior to 4:00 p.m., Eastern Time, as reported by Nasdaq; or (b) if the foregoing does not apply, the last trade price of such security in the over-the-counter market for such security as reported by Nasdaq, or (c) if no last trade price is reported for such security by Nasdaq, the average of the bid and ask prices of any market makers for such security as reported by the OTC Markets Group, Inc.. If the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Sale Price of such security on such date shall be the fair market value as mutually determined by the Company and the Holder as provided for herein. All such determinations to be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during the applicable calculation period.

(c) “Common Stock” means the Company’s common stock, par value $0.00001 per share and any other class of securities into which such securities may hereafter be reclassified or changed.

(d) “Common Stock Equivalents” means any securities of the Company that would entitle the holder thereof to acquire at any time Common Stock, including without limitation any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

(f) “Exempt Issuance” means the issuance of (i) shares of Common Stock or options to employees, officers, or directors of the Company pursuant to any stock or option plan duly adopted by a majority of the non-employee members of the Board of Directors of the Company or a majority of the members of a committee of non-employee directors established for such purpose, (ii) shares of Common Stock issued pursuant to real property leasing arrangement from a bank approved by the Board of Directors of the Company; and (iii) any issuance of shares upon a conversion or exercise of any outstanding security entered into prior to this Warrant.

(g) “Principal Market” means the primary national securities exchange on which the Common Stock is then traded.

(h) “Trading Day” means (i) any day on which the Common Stock is listed or quoted and traded on its Principal Market; (ii) if the Common Stock is not then listed or quoted and traded on any national securities exchange, then a day on which trading occurs on any over-the-counter markets; or (iii) if trading does not occur on the over-the-counter markets, any Business Day.

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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed as of the Issuance Date set forth above.

SOLAR INTEGRATED ROOFING CORPORATION
By:	/s/ David Massey
Name:	David Massey
Title:	CEO

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EXHIBIT A

EXERCISE NOTICE

(To be executed by the registered holder to exercise this Common Stock Purchase Warrant)

THE UNDERSIGNED holder hereby exercises the right to purchase _________________ of the shares of Common Stock (“Warrant Shares”) of Solar Integrated Roofing Corporation., a Nevada corporation (the “Company”), evidenced by the attached copy of the Common Stock Purchase Warrant (the ”Warrant”). Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant.

1.	Payment of Exercise Price. The holder shall pay the applicable Aggregate Exercise Price in the sum of $___________________ to the Company in accordance with the terms of the Warrant.
2.	Cashless Exercise. If permitted, the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in Section 1(b), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 1(a).
3.	Delivery of Warrant Shares. The Company shall deliver to the holder __________________ Warrant Shares in accordance with the terms of the Warrant.

Date:                                                                     

(Print Name of Registered Holder)

By:

Name:

Title:

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EXHIBIT B

ASSIGNMENT OF WARRANT

(To be signed only upon authorized transfer of the Warrant)

For Value Received, the undersigned hereby sells, assigns, and transfers unto ____________________ the right to purchase _______________ shares of common stock of Solar Integrated Roofing Corporation, a Nevada corporation (the “Company”) to which the within Common Stock Purchase Warrant relates and appoints ____________________, as attorney-in-fact, to transfer said right on the books of the Company, with full power of substitution and re-substitution in the premises. By accepting such transfer, the transferee has agreed to be bound in all respects by the terms and conditions of the within Warrant.

Dated:                                                                   

 

(Signature) *

(Name)

(Address)

(Social Security or Tax Identification No.)

* The signature on this Assignment of Warrant must correspond to the name as written upon the face of the Common Stock Purchase Warrant in every particular without alteration or enlargement or any change whatsoever. When signing on behalf of a corporation, partnership, trust or other entity, please indicate your position(s) and title(s) with such entity.

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EX-10.38

EXHIBIT 10.38

Executive Employment Agreement

Stefan Abbruzzese

2460 Queen Esther Dr.

Park City, UT 84060

Dear Stefan,

It is my pleasure to extend the following offer of full-time employment to you on behalf of Solar Integrated Roofing Corporation (referred to as “SIRC” or the “Company”), a Nevada corporation with its principal place of business at 2831 St Rose Parkway, Suite 200, Henderson, NV 89052. This letter sets forth the basic terms and conditions of your employment (the “Agreement”). For purposes of this Agreement, you shall be referred to as “you”, “Employee”, or “Executive.”

By signing the letter, you and the Company are agreeing to the following terms:

Employment terms:

Effective Date: The effective date of this Agreement will be 09/22/2022. The start date for your role will be 9/22/2022. Your job title will be President. Your duties will be customary with industry standards, however, you may be asked to take on additional duties based on the needs of the Company and your skills, as determined by the Company and agreed upon by you in writing.

Supervisor: You will report directly to David Massey, Chief Executive Officer (“CEO”) of SIRC.

Compensation: The base compensation for this exempt (salaried) position is initially $13,846.15 per pay period ($360,000 per year annualized) and increased as set forth herein (“Base Salary”). You will get paid bi-weekly and compensation will be subject to deductions for taxes and other withholdings as required by law and the policies of the Company.

Executive shall be eligible to participate in the Executive Bonus Pool as approved by the Company’s Board of Directors. Bonus amounts in the Executive Bonus Pool are determined annually by and paid at the discretion of the Company’s Chief Executive Officer.

Benefits: During your employment you will be eligible for benefits offered to similarly situated employees. This could include health insurance benefits, liability and other insurance, retirement benefits, paid time off, and discretionary incentive bonus programs (collectively “Benefits”) in effect at the time of employment. The Company reserves the right to change these Benefits at its sole discretion. Upon signing of this Agreement, the Company will provide a written summary of all Benefits in effect and to be offered to Executive.

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Director and Officer Liability Insurance; Indemnification: The Company shall indemnify, defend and hold Executive harmless against any liability incurred by Executive as an employee of the Company. The Company shall be obligated to pay the claims or expenses of the Executive, including defense cost, directly to the third party to whom payment is due and owing, without the necessity of the Executive to make such payment and seek reimbursement from the Company. For the avoidance of doubt, these indemnification provisions shall survive the termination of Executive’s employment under this Agreement irrespective of the reason for such termination. In addition, the Company shall maintain in full force and effect directors’ and officers’ liability insurance (the “D&O Insurance”) in reasonable amounts and Executive shall be covered under such D&O Insurance, fully paid by the Company.

Performance: Your performance will be reviewed on an annual basis. At the discretion of the CEO, you will be eligible for a pay increase or other discretionary incentive income and benefits consistent with your performance as determined by the Company.

Severance and Change in Control Agreement and Stock Option Agreement: The Company and Executive agree that the terms of the (i) Severance and Change in Control Agreement (see Exhibit A), and (ii) Stock Option Agreement (see Exhibit B) attached hereto shall apply.

Equity: In accordance with the Stock Option Agreement, Executive shall be granted the right to purchase twenty-five million (25,000,000) shares of the Company’s Common Stock (the “Shares”) at the Option Exercise Price and upon the terms and conditions set forth in the Stock Option Agreement.

Conditions of employment:

Employment Eligibility: For purposes of federal immigration law, you will be required to provide the Company documentary evidence of your identity and eligibility for employment in the United States. Such documentation must be provided to us within three (3) business days of your date of hire, or our employment relationship with you may be terminated.

Background Check: You have satisfactorily completed a background check prior to your start of work.

YOUR EMPLOYMENT WITH THE COMPANY IS AT-WILL. IN OTHER WORDS, EITHER YOU OR THE COMPANY CAN TERMINATE YOUR EMPLOYMENT AT ANY TIME FOR ANY REASON, WITH OR WITHOUT CAUSE AND WITH OR WITHOUT NOTICE.

Confidentiality and Nondisclosure: “Confidential Information” means any non-public information, regardless of form, disclosed by or on behalf of either party (such disclosing party, the “Disclosing Party”) to the other party (such receiving party, the “Recipient”) in connection with the services performed during the Executive’s term of employment that is designated in writing or some other tangible form as confidential, or that, given the nature of the information or circumstances surrounding its disclosure, reasonably should be considered to be confidential. Confidential Information shall include information disclosed by or through either party, its affiliates, or their respective owners, officers, directors, employees, members, or representatives.

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Confidential Information does not include information that: (a) is or becomes available to the public other than as a result of a violation of this Agreement; (b) is or becomes available on a non-confidential basis from a third-party source provided that such third-party was not prohibited from disclosing such information pursuant to a legal, contractual or fiduciary obligation to the Disclosing Party; (c) Recipient can demonstrate that the information was in the possession of the Recipient prior to disclosure by the Disclosing Party; (d) was independently developed by the Recipient without use or reference to the Confidential Information; or (e) is disclosed pursuant to any law or regulation, the binding order or requirement of a court, regulatory authority, or other governmental body, provided that the Recipient shall provide, to the extent legally permissible, prompt notice of such requirement to the Disclosing Party so that the Disclosing Party, at its sole cost, may seek an appropriate protective order or otherwise prevent or restrict such disclosure.

Nondisclosure and Use of Confidential Information: The Recipient shall not: (a) use, or permit the Confidential Information to be used, for any purpose other than to fulfill or deliver on the performance of the Executive’s role covered by this Agreement; (b) disclose the Confidential Information to any person or entity without the express prior written consent of the Disclosing Party, unless otherwise permitted within this Agreement, other than to the Recipient’s affiliates, or to the Recipient’s or its affiliates’ respective advisors, directors, officers, employees, accountants, attorneys, agents, consultants, auditors, providers or prospective providers of financing and their advisors (hereinafter a Party’s “Representatives”) for the purpose of fulfilling or delivering on the performance of the Services covered by this Agreement; and (c) exercise a degree of care less than what the Recipient uses to protect its own information of a similar nature, which shall be no less than the reasonable care, to protect and avoid disclosure of the Disclosing Party’s Confidential Information. In any event, the Recipient shall be responsible for any breach of this Agreement by the Recipient or any of its Representatives and agrees, at its sole expense, to take reasonable measures to restrain its Representatives from any prohibited disclosure of Confidential Information and to promptly notify the Disclosing Party of any use or disclosure of Confidential Information by itself or its Representatives in contravention of this Agreement.

Notwithstanding any provision contained herein to the contrary, nothing in this Agreement limits, restricts or in any other way affects Executive’s right to communicate in good faith with any governmental agency or entity and Executive will not be civilly liable under any federal, state, or local law for the good faith disclosure of a trade secret to a federal, state, or local governmental official.

Return or Destruction of Confidential Information: At any time, upon the Disclosing Party’s written request, the Recipient shall promptly return to the Disclosing Party or destroy all Confidential Information held by the Recipient and its Representatives. Notwithstanding the foregoing, the Recipient shall not be required to return or destroy Confidential Information: (a) that has been prepared for or incorporated into materials prepared for the Recipient’s board of directors, tax or legal advisors, governing body or any committee of Recipient or its Representatives; (b) which have been retained to comply with any regulatory or legal requirements or internal record retention policies and procedures of Recipient or its Representatives; (c) in the event there is pending or threatened litigation between the Parties with respect to this Agreement; or (d) that are stored by electronic back-up systems, automatic archiving or electronic saving procedures; provided, such Confidential Information shall remain confidential in accordance with the terms hereof. The Recipient shall, upon written request of the Disclosing Party, cause one of its duly authorized officers to confirm in writing that the requirements of this section have been satisfied in full.

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Remedies: The Recipient acknowledges and agrees that money damages would not be a sufficient remedy for any breach of this agreement and that Disclosing Party may seek injunctive or other equitable relief to remedy or prevent any breach of this Agreement, in addition to all other rights and remedies available at law or in equity. The parties agree that the parties hereto should not be liable for any punitive damages for any claim arising from or in any way related to this Agreement.

No Representations or Warranties: Neither the Disclosing Party nor any of its Representatives make any representation or warranty, expressed or implied, as to the accuracy or completeness of the Confidential Information disclosed hereunder. Each party also agrees that it is not entitled to rely on the accuracy or completeness of any Confidential Information and that it shall be entitled to rely solely on such representations and warranties regarding Confidential Information as may be made to it in a definitive written agreement relating to the Services performed under this Agreement, if any, subject to the terms and conditions of such agreement.

No Transfer of Rights: Each party retains its entire respective right, title and interest in and to all of its Confidential Information. Any disclosure of such Confidential Information hereunder shall not be construed as an assignment, grant, option, license or other transfer of any right, title or interest to the Recipient or any of its Representatives, except as set forth in this Agreement.

Non-Solicitation:

(a) Non-Solicitation.

(i) . Beginning on the date hereof and through the date that is one (1) year following the termination of Executive’s employment under this Agreement (the “Restricted Period”), Executive will not, and will cause his affiliates not to, directly or indirectly, through or in association with any third party (1) call on, solicit, or service, engage or contract with, or take any action which may interfere with, impair, subvert, disrupt, or negatively alter the relationship, contractual or otherwise, between the Company and any current or prospective customer, supplier, distributor, service provider, licensor, or licensee or other material business relation of the Company, (2) divert or take away the business or patronage (with respect to products or services of the kind or type developed, produced, marketed, furnished, or sold by the Company) of any of the customers or accounts, or prospective customers or accounts, of the Company or (3) attempt to do any of the foregoing, either for Executive’s own purposes or for any other third party.

(ii) During the Restricted Period, Executive will not, and will cause his affiliates not to, directly or indirectly, through or in association with any third party (1) solicit, induce, recruit, or encourage any employees or independent contractors of or consultants to the Company, who has access to or possesses knowledge that would give a competitor of the Company an unfair business advantage over the Company or with respect to whom the Company otherwise has a protectable interest, to terminate their relationship with the Company or take away or hire such employees, independent contractors, or consultants or (2) attempt to do any of the foregoing, either for Executive’s own purposes or for any other third party.

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(b) Remedies for Breach. Executive acknowledges that a breach or threatened breach by Executive of the Non-Solicitation provisions of this Agreement may cause irreparable harm to the Company and that money damages may be incapable of precise measurement and will not be adequate relief for such injury. Accordingly, notwithstanding any other dispute mechanism contained in this Agreement, Executive agrees that the Company may seek and obtain, through a court of competent jurisdiction, temporary, preliminary and/or permanent injunctive relief to restrain or prohibit such breach or threatened breach, or to otherwise enforce this Agreement, in addition to any other legal, equitable or statutory remedies that may be available, including the recovery of monetary damages. Executive further agrees that, in addition to all other relief to which the Company shall be entitled, the Company shall be entitled to recover from Executive its costs and reasonable attorneys’ fees incurred in any action or proceeding in which the Company prevails in enforcing these provisions of this Agreement.

Cooperation: The Employee agrees to reasonably cooperate with the Company and its financial and legal advisors when and as the Company requests in connection with any claims, investigations, or other proceedings involving the Company with respect to matters occurring while the Employee was employed by the Company. The Employee shall receive no additional compensation for rendering such services pursuant to this Section.

Choice of Law: The validity, interpretation, construction and performance of this Agreement will be governed by the laws of the State of New York without giving effect to provisions governing the choice of law.

Dispute Resolution: If any dispute arises among the parties, except with respect to enforcement of the Confidentiality and Non-Solicitation provisions of this Agreement, the parties agree to try first in good faith to settle the dispute by mediation administered by the American Arbitration Association (AAA) under its Employment Arbitration Rules and Mediation Procedures. All unresolved disputes shall then be decided by final and binding arbitration in accordance with the Employment Arbitration Rules and Mediation Procedures of the AAA. In agreeing to arbitration, Company and Executive both acknowledge that each of the parties is giving up the right to have the dispute decided in a court of law before a judge or jury and instead the parties are accepting the use of arbitration for resolution.

Enforcement: If the Arbitrator or any court of competent jurisdiction determines that the Employee or the Company has violated any of the Employee’s or the Company’s promises or obligations contained in this Agreement, then the injured party shall be entitled to recover, in addition to its damages, all costs and expenses incurred in its successful enforcement efforts, including actual attorneys’ fees, from the violating party. In addition, the parties acknowledge and agree that a breach by a party of any of its promises or obligations contained in this Agreement may cause the other party irreparable harm and that the other party and its affiliates may thus be entitled to injunctive relief or any other equitable remedy, in addition to damages, for any such breach.

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Taxes: The Employee recognizes that the payments and benefits provided under this Agreement will result in taxable income to the Employee that the Company will report to appropriate taxing authorities. The Company shall have the right to deduct from any payment made under this Agreement any federal, state, local, or other income, employment, or other taxes it determines are required by law to be withheld with respect to such payments and benefits.

Consultation with Counsel/Legal Fees: THE EMPLOYEE ACKNOWLEDGES THAT THE EMPLOYEE HAS BEEN ADVISED, IN THIS WRITING, TO CONSULT WITH AN ATTORNEY OF THE EMPLOYEE’S CHOICE PRIOR TO SIGNING THIS AGREEMENT AND THAT THE EMPLOYEE HAS SIGNED THIS AGREEMENT KNOWINGLY, VOLUNTARILY, AND FREELY, AND WITH SUCH COUNSEL (IF ANY) AS

THE EMPLOYEE DEEMED APPROPRIATE. The Employee understands, however, that whether or not to consult with an attorney is the Employee’s decision. The Company shall reimburse Employee for the full amount of reasonable legal fees incurred by Employee in connection with drafting and executing this Agreement and related agreements. Such reimbursement shall be made to Employee within thirty (30) calendar days after the submission of the invoices evidencing the legal fees.

No Reliance: The parties acknowledge that they execute this Agreement in reliance on their own personal knowledge and are not relying on any representation or promise made by any other party that is not contained in this Agreement.

Severability: It is the desire and intent of the parties hereto that the provisions of this Agreement be enforced to the fullest extent permissible under the laws and public policies applied in any jurisdiction in which enforcement is sought. Accordingly, if any particular provision of this Agreement shall be adjudicated by a court of competent jurisdiction or arbitrator to be invalid, prohibited, or unenforceable for any reason, such provision, as to such jurisdiction, shall be ineffective, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction. Notwithstanding the foregoing, if such provision could be more narrowly drawn so as not to be invalid, prohibited, or unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.

Entire Agreement: This Agreement, the Severance and Change in Control Agreement and the Stock Option Agreement attached hereto contain the entire agreement between the parties concerning the subject matter of this Agreement, and this Agreement supersedes all prior and collateral negotiations, statements, agreements, or understandings between the parties including the “Nonqualified Stock Option Award Agreement” dated August 3, 2022 between the Employee and the Company, which such nonqualified stock option grant to Employee will be null and void. The Company and Executive also agree that the Consulting Agreement between the Company and Shire Ventures, LLC, with an effective date of August 3, 2022 shall also be null and void. The terms and execution of this Agreement and the Executive’s Severance and Change in Control Agreement and the Stock Option Agreement attached hereto have been unanimously approved and consented to by the Company’s Board of Directors prior to signing and execution of each of these agreements.

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No promises or oral or written statements have been made to the Employee other than those in this Agreement. If any portion of this Agreement is found to be unenforceable, all other portions that can be separated from it, or appropriately limited in scope, shall remain fully valid and enforceable.

We look forward to having you join our team.

Sincerely,

David Massey

Chief Executive Officer

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Effective Date.

Acceptance:

Solar Integrated Roofing Corporation

By:
Name:	Dave Massey
Title:	Chairman & Chief Executive Officer
Executive
By:
Name:	Stefan Abbruzzese

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SOLAR INTEGRATED ROOFING CORPORATION

NONQUALIFIED STOCK OPTION

AWARD AGREEMENT

Participant: Stefan Abbruzzese

Date of Grant: September 22, 2022

Number of Shares Subject to Option: Twenty-Five Million (25,000,000)

Option Exercise Price per Share: $0.1799

This Award Agreement (this “Agreement”) is entered into as of September 22, 2022 between Solar Integrated Roofing Corporation (the “Company”) and Stefan Abbruzzese (“Participant”).

1. Grant of Nonqualified Stock Option. The Company hereby grants on the “Date of Grant” set forth above to the Participant an Option (the “Option”) to purchase all or any part of an aggregate amount of Twenty-Five Million (25,000,000) shares of the Company’s Common Stock of the Company (“Shares”) at a purchase price (“Option Exercise Price”) of $0.1799 per Share which is the fair market value of a Share on the Date of Grant, on the terms and conditions set forth herein. The Option is intended to constitute a nonqualified stock option and not intended to constitute an incentive stock option under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”).

2. Vesting and Exercisability. Subject to acceleration of vesting described herein, the Option granted and issued to Participant under this Agreement shall vest and become exercisable upon the satisfaction of the applicable “Service -Based Requirement” set forth below. All Shares covered by the Option which do not become vested will be immediately forfeited. However, the Participant will retain any portion of the Option which has met the Service-Based Requirement as of the date the Participant’s employment ends or otherwise have become vested as described below.

(a) The Service-Based Requirement shall be satisfied for the number of Shares set forth below subject to the Participant remaining employed on each date corresponding to the number of Shares set forth below; provided, that the Service-Based Requirement shall be fully satisfied with respect to all the Shares subject to the Option and all of the Shares subject to the Option shall vest and become exercisable in the event of the Participant’s termination of employment by the Company without Cause, resignation by the Participant with Good Reason or upon his death or Disability (capitalized terms not otherwise defined herein shall have the meanings set forth under the Severance and Change in Control Agreement between the Participant and the Company, dated September 22, 2022 (the “Severance and Change in Control Agreement”)).

7,000,000 Shares on September 22, 2022;

1,500,000 Shares on January 1, 2023;

1,500,000 Shares on April 1, 2023;

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1,500,000 Shares on July 1, 2023;

1,500,000 Shares on October 1, 2023;

1,500,000 Shares on January 1, 2024;

1,500,000 Shares on April 1, 2024;

1,500,000 Shares on July 1, 2024;

1,500,000 Shares on October 1, 2024;

1,500,000 Shares on January 1, 2025;

1,500,000 Shares on April 1, 2025;

1,500,000 Shares on July 1, 2025;

1,500,000 Shares on October 1, 2025

(b) Change in Control. Notwithstanding the Service-Based Requirement set forth above, immediately upon a Change in Control (as defined under the Severance and Change in Control Agreement) while the Participant is employed by the Company, all of the Shares subject to the Option shall become vested and exercisable. With respect to the treatment of the Option in the event of a Change in Control, unless otherwise agreed upon between the Company and the Participant, the Participant shall receive a cash payment equal to the product of (i) the difference between (a) the value per share of Common Stock offered to holders of Common Stock and the

(b) the Option Exercise Price per Share, multiplied by (ii) all of the Shares subject to the Option not yet exercised.

3. Expiration of Option. The Option shall expire and cease to be exercisable on the tenth (10^th) anniversary of the Date of Grant (the “Option Term”). During the Participant’s employment and in the event the Participant’s employment ends for any reason, the Participant (or the Participant’s legal representative(s) in the case of the Participant’s death or Disability) shall have the right to exercise the vested and exercisable portion of the Option for the remaining period of the Option Term.

4. Exercise of Option. The Participant (or the Participant’s legal representative(s) in the case of the Participant’s death or Disability) may exercise all or any portion of the vested and exercisable Option by delivering written notice substantially in the form attached hereto as Exhibit “A” to the Company prior to the close of business on the last regular business day of the Company prior to the date the Option expires. The notice of exercise shall:

(a) State the number of Shares with respect to which the Option is being exercised; and

(b) Be signed by the person or persons entitled to exercise the Option.The notice of exercise shall also be accompanied by payment in full of the Option Exercise Price for the number of Shares being acquired, plus any applicable withholding taxes, which payment shall be made by certified check, bank draft or postal or express money order payable to the Company or through a cashless exercise procedure.

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5. Securities Law Restrictions. The Participant represents, warrants and covenants that: (a) the Participant is acquiring the Option and, upon exercise of the Option, the Shares solely for investment purposes and for an indefinite and indeterminate time without the intent of making any sale, distribution or disposition thereof in violation of the Securities Act of 1933, as amended (the “Securities Act”); (b) the Participant has been advised and understands that neither the Option nor the Shares have been registered for sale pursuant to federal and state securities laws and that the Option and the Shares are “restricted securities” under such laws; (c) the Option is nontransferable (except in the case of death or Disability), the Shares received upon exercise of the Option may not be sold, transferred, encumbered or otherwise disposed of without registration or exemption under such securities laws, and the Option and Shares may therefore be required to be held indefinitely; (d) the Participant is accepting and acquiring the Option and upon exercise will be acquiring the Shares for investment for the Participant’s own account only and not with a view to, or for resale in connection with, any “distribution” thereof within the meaning of the Securities Act in violation of such act; and (e) upon exercise of the Option, certificates representing the Shares received will bear the legend set forth in Section 6 below (or if not certificated, will be subject to comparable stop transfer instructions). The Company represents to the Participant that it is not, and has never been, an “issuer with no or nominal operations and no or nominal non-cash assets” as defined in Rule 144(i) under the Securities Act.

6. Delivery of Shares. No Shares shall be registered on the books of the Company upon exercise of the Option until the purchase price shall have been paid in full in the manner herein provided. The Participant understands and agrees that, to the extent applicable, the Company shall cause the legends set forth below or legends substantially equivalent thereto, to be placed upon any certificate(s) evidencing ownership of the Shares, together with any other legends that may be required by state or federal securities laws:

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS, IN RELIANCE UPON EXEMPTIONS FROM SUCH REGISTRATION REQUIREMENTS, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. THE SECURITIES MAY NOT BE SOLD, PLEDGED, TRANSFERRED OR OTHERWISE DISPOSED OF WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO SOLAR INTEGRATED ROOFING CORPORATION (THE “COMPANY”), THAT SUCH REGISTRATION IS NOT REQUIRED.

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7. Legend Removal and Rule 144. In connection with a sale of Shares issued to Participant pursuant to this Agreement in reliance on Rule 144 promulgated under the Securities Act, Participant or his or her broker shall deliver to the Company a broker representation letter in customary form to allow a determination that such sale is made in compliance with Rule 144 promulgated under the Securities Act, including, as may be appropriate, a certification as to the length of time the Shares have been held. If Participant seeks to sell Shares under a different Securities Act exemption, Participant and the Company shall cooperate to determine the content of a representation letter that would allow the proposed sale under such other exemption if available. Upon receipt of a representation letter as contemplated by this section, the Company shall promptly remove the restrictive legend, and the Company shall bear all costs associated with the removal of such legend. The Company shall cooperate with Participant to effect the removal of the restrictive legend at any time such legend is no longer appropriate. The Company currently provides, and will continue to provide, “adequate current public information” as contemplated by Rule 144(c) and is not, and has not been, an issuer described in Rule 144(i). If, at any time after the first anniversary of the date hereof, Participant is unable to sell Shares under Rule 144 due to the Company’s failure to provide “adequate current public information”, failure to file required reports under the Securities Exchange Act of 1934, as amended, failure to file “Form 10 information” (as that term is defined in Rule 144) or similar action or inaction, the Company will repurchase from Participant, at the then-current trading price, such number of Shares as Participant may request up to the maximum number that Participant would have been able to sell under Rule 144 in the absence of such failure, action or inaction.

8. Registration Rights. Within one year of the effective date of Participant’s initial exercise of Option for Shares, the Company shall use its reasonable best efforts to (i) file a registration statement registering the sale of Shares, (ii) have the registration statement declared effective within 180 days after filing with the SEC and (iii) maintain the effectiveness of the registration statement until such time as the Shares can be sold without limitation under Rule 144. Participant shall also have customary piggyback rights, other than in connection with an underwriting that is solely a new equity issuance by the Company.

9. Company Obligations under Sections 7 and 8. The Company’s obligations under Sections 7 and 8 hereof are absolute and shall not be conditioned upon the absence of any dispute, action or proceeding between or involving the Company and Participant.

10. Adjustment in the Event of Common Stock Subdivision, Consolidation, or Dividend. The Shares with respect to which Options are granted are shares of Common Stock as presently constituted, but if, and whenever, prior to the expiration of the Option, the Company will effect a subdivision or consolidation of shares of Common Stock or the payment of a stock dividend on Common Stock without receipt of consideration by the Company, the number of shares of Common Stock with respect to which such Option may thereafter be exercised (1) in the event of an increase in the number of outstanding shares, will be proportionately increased, and the Option Exercise Price will be proportionately reduced, and (2) in the event of a reduction in the number of outstanding shares, will be proportionately reduced, and the Option Exercise Price will be proportionately increased, without changing the aggregate purchase price or value as to which outstanding Options remain exercisable.

11. Other Adjustments. In the event of changes in the outstanding Common Stock by reason of recapitalizations, mergers, consolidations, reorganizations, liquidations, combinations, split-ups, split-offs, spin-offs, exchanges, issuances of rights or warrants, or other relevant changes in capitalization or distributions to the holders of Common Stock, the Option will be appropriately adjusted as to the number of Shares and the Option Exercise Price other consideration subject to Option, without changing the aggregate purchase price or value as to which outstanding Option remains.

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12. Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given: (i) when personally delivered or when mailed by U.S. registered or certified mail, return receipt requested and postage prepaid, or (ii) when sent electronically via email utilizing DocuSign or other electronic delivery solution that provides for e-signature of receipt and notification. In the case of Participant, mailed notices to Participant will be addressed to him or her at the home address which he or she most recently communicated to the Company in writing. In the case of the Company, mailed notices will be addressed to Company as its corporate headquarters, and all notices will be directed to the attention of its Chief Executive Officer, Chief Financial Officer and General Counsel.

13. Participant’s Successors. The terms of this Agreement and all rights of Participant hereunder will inure to the benefit of, and be enforceable by, Participant’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

14. Governing Law. All transactions contemplated hereunder and all rights of the parties hereto shall be governed as to validity, construction, enforcement and in all other respects by the laws and decisions of the State of Nevada, without regard to principles of conflicts of law.

15. Amendment. This Agreement shall not be modified or amended except by written agreement signed by all of the parties hereto. The Company and the Participant acknowledge that changes in federal tax laws enacted subsequent to the Date of Grant, and applicable to stock options, may provide for tax benefits to the Company or the Participant. In any such event, the Company and the Participant agree that this Agreement may be amended as necessary to secure for the Company and the Participant any benefits that may result from such legislation. Any such amendment shall be made in writing only upon the mutual consent of the parties, which consent (of either party) may be withheld for any reason.

16. Entire Agreement. This Agreement contains all of the representations, declarations and statements from either party to the other and expresses the entire understanding between the parties with respect to the transactions provided for herein.

17. Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective legal representatives, successors and assigns.

18. 409A. The Option granted herein and the terms of this Agreement are intended to be exempt from the requirements of Section 409A of the Code and the Agreement shall be administered, interpreted, and construed to carry out such intention.

19. No Tax Consequences. The Company makes no representation, warranty or guarantee of any federal, state or local tax consequences concerning any Option, including, but not limited to, under Section 409A of the Code. Accordingly, in the event that any Option or this Agreement shall be deemed not to comply with Section 409A of the Code, the Company and its directors, officers, employees and agents shall not be liable to Participant or other person for such failure. Instead, Participant is solely responsible and liable for the satisfaction of all taxes and penalties that may arise in connection with the Options and their exercise pursuant to this Agreement (including any taxes or penalties arising under Section 409A of the Code), and the Company shall not have any obligation to indemnify or otherwise hold Participant harmless from any or all of such taxes and penalties.

(Signature page follows)

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IN WITNESS WHEREOF, the parties have executed this Agreement the day and year first above written.

Participant:	Company:
	SOLAR INTEGRATED ROOFING CORPORATION
	By:
Print Name: Stefan Abbruzzese		Print Name: Dave Massey
Address:		Title: Chairman and Chief Executive Officer
2460 Queen Esther Drive
Park City, UT 84060

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SEVERANCE AND CHANGE IN CONTROL AGREEMENT

This Severance and Change in Control Agreement (the “Agreement”) is made and entered into by and between Stefan Abbruzzese (“Executive”) and Solar Integrated Roofing Corporation (SIRC), a Nevada corporation with its principal place of business at 2831 St Rose Parkway, Suite 200, Henderson, NV 89052, (the “Company”), effective as of September 22, 2022 (the “Effective Date”). Certain capitalized terms used in the Agreement are defined in Section 6 below or in the Executive’s Executive Employment Agreement, dated September 22, 2022 (the “Employment Agreement”).

RECITALS

A.	The Board of Directors of the Company (the “Board”) recognizes that it is possible that the Company could terminate Executive’s employment with the Company and from time to time the Company may consider the possibility of an acquisition by another company or other change in control transaction. The Board also recognizes that such considerations can be a distraction to Executive and can cause Executive to consider alternative employment opportunities. The Board has determined that it is in the best interests of the Company and its stockholders to assure that the Company will have the continued dedication and objectivity of Executive, notwithstand- ing the possibility, threat or occurrence of such a termination of employment or the occurrence of a Change in Control (as defined herein) of the Company.
B.	The Board believes that it is in the best interests of the Company and its stockholders to provide Executive with an incentive to continue his or her employment with the Company and to moti- vate Executive to maximize the value of the Company for the benefit of its stockholders.
C.	The Board believes that it is imperative to provide Executive with certain severance benefits upon Executive’s termination of employment and with certain additional benefits following a Change in Control. These benefits will provide Executive with enhanced financial security and incentive and encouragement to remain with the Company notwithstanding the possibility of a Change in Control.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties hereto agree as follows:

1. Term of Agreement. This Agreement will not terminate until all of the obligations of the parties hereto with respect to this Agreement have been satisfied.

2. At-Will Employment. The Company and Executive acknowledge that Executive’s employment is and will continue to be at-will, as defined under applicable law. If Executive’s employment terminates for any reason not specified in Section 3, Executive will not be entitled to any payments, benefits, damages, awards or compensation other than the payment of accrued but unpaid wages, as required by law, and any unreimbursed reimbursable expenses or pursuant to written agreements with the Company, including equity award agreements.

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3. Severance Benefits.

(a)	Termination without Cause or Resignation for Good Reason in Connection with a Change of Control. If at any time during the term of Executive’s employment for the six (6) month period prior to a Change in Control or the eighteen (18)-month period immediately following a Change in Control (x) the Company terminates Executive’s employment with the Company for a reason other than Cause, Executive becoming Disabled or Executive’s death, or (y) Executive resigns from such employment for Good Reason, then, subject to Section 4, Executive will receive the following severance benefits from the Company:
	(i)	Accrued Compensation. The Company will pay Executive all earned but unpaid salary and wages, accrued but unpaid vacation pay, expense reimbursements, and other benefits due to Executive under any Company- provided or paid plans, policies, and arrangements.
	(ii)	Severance Payment. Executive will receive a lump sum severance payment in an amount equal to eighteen (18) months of Executive’s base salary as in effect immediately prior to the date of Executive’s termination of employment, less all required tax withholdings and other applicable deductions, which will be paid as soon as practicable following Executive’s termination of employment but in no event later than the next pay period following Executive’s termination of employment.
	(iii)	Target Bonus Payment. Executive will receive a lump sum severance payment equal to fifty percent (50%) of Executive’s full target bonus for the fiscal year in effect at the date of such termination of employment (or, if greater, as in effect for the fiscal year in which termination notice occurs), less all required tax withholdings and other applicable deductions. The target bonus is the amount Executive would be entitled to receive if all of Executive’s goals for the applicable period are achieved. The target bonus will be paid as soon as practicable following Executive’s termination of employment but in no event later than the next pay period following Executive’s termination of employment.
	(iv)	Continued Health Insurance Benefits. If Executive is eligible for and elects continuation coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) for Executive and Executive’s eligible dependents (as applicable) under a health, dental, or vision plan sponsored by the Company, within the time period prescribed pursuant to COBRA, the Company will reimburse Executive, as and when due to the COBRA carrier, for the COBRA premiums for such coverage for Executive and his eligible dependents (at the coverage levels in effect immediately prior to Executive’s termination of employment) until the earliest to occur of (A) a period of eighteen (18) months from the last date of employment of Executive with the Company, (B) the date upon which Executive becomes eligible for coverage under a health, dental, or vision insurance plan of a subsequent employer, and (C) the date Executive or his or her dependents cease to be eligible for COBRA coverage. These payments will be subject to any applicable tax withholdings (including tax withholdings necessary to ensure that the provision of this benefit is not deemed a discriminatory practice giving rise to penalties to the Company under applicable laws) and will be counted as coverage pursuant to COBRA to the maximum extent permitted under applicable law.

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	(v)	Equity. One hundred percent (100%) of the then unvested and not previously forfeited portion of all of Executive’s outstanding Options granted to Executive under that Nonqualified Stock Option Award Agreement dated as of the Effective Date (the “Stock Option Agreement “) shall immediately vest and be exercisable in accordance with the terms and conditions of the Stock Option Agreement . In addition, one hundred percent (100%) of any unvested and not previously forfeited portion of any other stock options, stock appreciation rights, or similar rights to acquire Company common stock granted to Executive shall be fully vested and to the extent applicable, Executive shall have the period to exercise as set forth in the award agreement applicable to such other awards but in no event will such equity award be permitted to be exercised beyond the earlier of the original maximum term of such equity award or ten (10) years from the original grant date of such equity award.
	(vi)	Outplacement Benefits. If requested by Executive, the Company will pay the expense for outplacement benefits provided by a service to be determined by the Company in its discretion for a period of twelve (12) months, up to a maximum dollar value of five thousand dollars ($5,000) following Executive’s termination.
	(vii)	Payments or Benefits Required by Law. Executive will receive such other compensation or benefits from the Company as may be required by law.
(b)	Termination without Cause or Resignation for Good Reason and not in Connection with a Change in Control. If at any time during the term of Executive’s employment, except during the pe- riod set forth in Section 3(a) hereof in which case Section 3(a) applies, (x) the Company terminates Executive’s employment with the Company for a reason other than Cause, Executive becoming Dis- abled or Executive’s death, or (y) Executive resigns from such employment for Good Reason, then, subject to Section 4, Executive will receive the following severance benefits from the Company:
	(i)	Accrued Compensation. The Company will pay Executive all earned but unpaid salary and wages, accrued but unpaid vacation pay, expense reimbursements, and other benefits due to Executive under any Company- provided or paid plans, policies, and arrangements.
	(ii)	Severance Payment. Executive will receive a lump sum severance payment in an amount equal to twelve (12) months of Executive’s base salary as in effect immediately prior to the date of Executive’s termination of employment, less all required tax withholdings and other applicable deductions, which will be paid as soon as practicable following Executive’s termination of employment but in no event later than the next pay period after Executive’s termination of employment.
	(iii)	Target Bonus Payment. Executive will receive a lump sum severance payment equal to fifty percent (50%) of Executive’s full target bonus for the fiscal year in effect at the date of such termination of employment (or, if greater, as in effect for the fiscal year in which termination notice occurs), less all required tax withholdings and other applicable deductions. The target bonus is the amount Executive would be entitled to receive if all of Executive’s goals for the applicable fiscal year are achieved. The target bonus will be paid as soon as practicable following Executive’s termination of employment but in no event later than the next pay period following Executive’s termination of employment.

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	(iv)	Continued Health Insurance Benefits. If Executive is eligible for, and elects continuation coverage pursuant to COBRA for Executive and Executive’s eligible dependents (as applicable) under a health, dental, or vision plan sponsored by the Company, within the time period prescribed pursuant to COBRA, the Company will reimburse Executive, as and when due to the COBRA carrier, for the COBRA premiums for such coverage for Executive and his eligible dependents (at the coverage levels in effect immediately prior to Executive’s termination of employment) until the earliest to occur of (A) a period of eighteen (18) months from the last date of employment of Executive with the Company, (B) the date upon which Executive becomes eligible for coverage under a health, dental, or vision insurance plan of a subsequent employer, and (C) the date Executive or his or her dependents cease to be eligible for COBRA coverage. These payments will be subject to any applicable tax withholdings (including tax withholdings necessary to ensure that the provision of this benefit is not deemed a discriminatory practice giving rise to penalties to the Company under applicable laws) and will be counted as coverage pursuant to COBRA to the maximum extent permitted under applicable law.
	(v)	Equity. One hundred percent (100%) of the then unvested and not previously forfeited portion of all of Executive’s outstanding Options granted to Executive under the Stock Option Agreement shall immediately vest and be exercisable in accordance with the terms and conditions of the Stock Option Agreement. In addition, one hundred percent (100%) of any unvested and not previously forfeited portion of any other stock options, stock appreciation rights, or similar rights to acquire Company common stock granted to Executive shall be fully vested and to the extent applicable, Executive shall have the period to exercise as set forth in the award agreement applicable to such other awards but in no event will such equity award be permitted to be exercised beyond the earlier of the original maximum term of such equity award or ten (10) years from the original grant date of such equity award.
	(vi)	Outplacement Benefits. If requested by Executive, the Company will pay the expense for outplacement benefits provided by a service to be determined by the Company in its discretion for a period of twelve (12) months, up to a maximum dollar value of five thousand dollars ($5,000) following Executive’s termination.
	(vii)	Payments or Benefits Required by Law. Executive will receive such other compensation or benefits from the Company as may be required by law.
(c)	Disability; Death. If Executive’s employment with the Company is terminated due to Executive becoming Disabled or Executive’s death, then Executive or Executive’s estate (as the case may be) will (i) receive all earned but unpaid base salary and wages through the date of termination of em- ployment, (ii) receive all accrued but unpaid vacation pay, expense reimbursements and any other benefits (including insurance proceeds) due to Executive through the date of termination of employ- ment in accordance with established Company-provided or paid plans, policies and arrangements, and (iii) not be entitled to any other compensation or benefits from the Company except to the extent required by law (for example, COBRA). All payments under clauses (i) through (ii) above shall be made in accordance with the law for the State in which the Employment Agree- ment specifies, and Executive’s estate will be entitled to accelerated vesting as to one hundred percent (100%) of the then unvested and not previously forfeited portion of all of Executive’s outstanding equity awards regardless of type including, but not limited to, restricted stock, re- stricted stock units or stock option grants under the Stock Option Agreement.
(d)	Voluntary Resignation Without Good Reason; Termination for Cause. If Executive voluntarily terminates Executive’s employment with the Company without Good Reason or if the Company terminates Executive’s employment with the Company for Cause, then Executive will (i) receive his or her earned but unpaid base salary and wages through the effective date of termination of employment, (ii) receive all accrued but unpaid vacation pay, expense reimbursements and any other vested benefits due to Executive through the effective date of termination of employment in accordance with established Company-provided or paid plans, policies and arrangements,
	(iii)	retain all vested equity awards regardless of type through the effective date of termination, and (iii) not be entitled to any other compensation, benefits or unvested equity awards from the Company except to the extent required by law (for example, COBRA).
(e)	Timing of Payments. Except as required by law, subject to any specific timing provisions in Section 3(a), 3(b) or 3(c) as applicable, or the provisions of Section 4, payment of the severance and benefits hereunder shall be made or commence to be made as soon as practicable following Executive’s termination of employment but in no event later than the next pay period after Ex- ecutive’s effective termination date of employment.

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4. Conditions to Receipt of Severance.

(a)	The Company’s obligation to provide any severance payments or benefits shall be contingent upon Executive tendering to the Company a document executed by Executive that uncondition- ally and effectively releases any and all claims Executive may have against the Company as of the date of termination (other than as set forth in the attached release) which is substantially in the attached form and substance (Exhibit A).
(b)	Confidential Information. Executive’s receipt of any payments or benefits under this Agreement will be subject to Executive continuing to comply with the terms of any confidential information and nondisclosure agreements provisions contained in the Employment Agreement.
(c)	Application of Section 409A
	(I)	Notwithstanding anything to the contrary in this Agreement, no severance pay or benefits to be paid or provided to Executive, if any, pursuant to this Agreement that, when considered together with any other severance payments or separation benefits, are considered deferred compensation not exempt under Section 409A (together, the “Deferred Payments”) will be paid or otherwise provided until Executive has a “separation from service” within the meaning of Section 409A. And for purposes of this Agreement, any reference to “termination of employment,” “termination” or any similar term shall be construed to mean a “separation from service” within the meaning of Section 409A. Similarly, no severance payable to Executive, if any, pursuant to this Agreement that otherwise would be exempt from Section 409A pursuant to Treasury Regulation Section 1.409A-1(b) (9) will be payable until Executive has a “separation from service” within the meaning of Section 409A.

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(ii)	Notwithstanding anything to the contrary in this Agreement, if Executive is a “specified employee” within the meaning of Section 409A at the time of Executive’s termination of employment (other than due to death), then the Deferred Payments, if any, that are payable within the first six (6) months following Executive’s separation from service, will become payable on the first payroll date that occurs on or after the date six (6) months and one (1) day following the date of Executive’s separation from service. All subsequent Deferred Payments, if any, will be payable in accordance with the payment schedule applicable to each payment or benefit. Notwithstanding anything herein to the contrary, if Executive dies following Executive’s separation from service, but prior to the six (6) month anniversary of the separation from service, then any payments delayed in accordance with this paragraph will be payable in a lump sum as soon as administratively practicable after the date of Executive’s death and all other Deferred Payments will be payable in accordance with the payment schedule applicable to each payment or benefit. Each payment, installment and benefit payable under this Agreement is intended to constitute a separate payment for purposes of Section 1.409A-2(b) (2) of the Treasury Regulations.
(iii)	Without limitation, any amount paid under this Agreement that satisfies the requirements of the “short-term deferral” rule set forth in Section 1.409A- 1(b)(4) of the Treasury Regulations is not intended constitute to Deferred Payments for purposes of clause (i) above.
(iv)	Without limitation, any amount paid under this Agreement that qualifies as a payment made as a result of an involuntary separation from service pursuant to Section 1.409A-1(b)(9)(iii) of the Treasury Regulations that does not exceed the Section 409A Limit is not intended to constitute Deferred Payments for purposes of clause (i) above. Any payment intended to qualify under this exemption must be made within the allowable time period specified in Section 1.409A-1(b) (9) (iii) of the Treasury Regulations.
(v)	To the extent that reimbursements or in-kind benefits under this Agreement constitute non-exempt “nonqualified deferred compensation” for purposes of Section 409A, (1) all reimbursements hereunder shall be made on or prior to the last day of the calendar year following the calendar year in which the expense was incurred by Executive, (2) any right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, and (3) the amount of expenses eligible for reimbursement or in-kind benefits provided in any calendar year shall not in any way affect the expenses eligible for reimbursement or in-kind benefits to be provided, in any other calendar year.
(vi)	Any tax gross-up that Executive is entitled to receive under this Agreement or otherwise shall be paid to Executive no later than December 31 of the calendar year following the calendar year in which Executive remits the related taxes.

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(vii)	Notwithstanding any other provision of this Agreement to the contrary, in no event shall any payment under this Agreement that constitutes “nonqualified deferred compensation” for purposes of Code Section 409A be subject to offset by any other amount unless otherwise permitted by Code Section 409A.
(viii)	The payments and benefits provided under Section 3 are intended to be exempt from or comply with the requirements of Section 409A so that none of the severance payments and benefits to be provided hereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities or ambiguous terms herein will be interpreted to be exempt or so comply. The Company and Executive agree to work together in good faith to consider amendments to this Agreement and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to Executive under Section 409A.
(ix)	The Company makes no representation, warranty or guarantee of any federal, state or local tax consequences of any payments and benefits made or that may be made to Executive pursuant to this Agreement, including, but not limited to, under Section 409A. Accordingly, in the event that any payment or benefit provided in this Agreement shall be deemed not to comply with Section 409A, even after the application of clause (viii) above, the Company and its directors, officers, employees and agents shall not be liable to Executive or other person for such failure. Instead, Executive is solely responsible and liable for the satisfaction of all taxes and penalties that may arise in connection with the payments and benefits provided pursuant to this Agreement (including any taxes or penalties arising under Section 409A), and the Company shall not have any obligation to indemnify or otherwise hold Executive harmless from any or all of such taxes and penalties.

5. Limitation on Payments.

(a) Anything in this Agreement to the contrary notwithstanding, if any payment or benefit Executive would receive from the Company or otherwise (“Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code; and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment shall be equal to either (x) the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax; or (y) the largest portion, up to and including the total, of the Payment, whichever amount, after taking into ac- count all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in Executive’s receipt, on an after- tax basis, of the greater amount of the Payment. Any reduction made pursuant to this Section 5(a) shall be made in accordance with the following order of priority: (i) stock options whose exercise price exceeds the fair market value of the optioned stock (“Underwater Options”) (ii) Full Credit Payments (as defined below) that are payable in cash, (iii) non-cash Full Credit Payments that are taxable, (iv) non-cash Full Credit Payments that are not taxable, (v) Partial Credit Payments (as defined below) and (vi) non-cash employee welfare benefits. In each case, reductions shall be made in reverse chronological order such that the payment or benefit owed on the latest date following the occurrence of the event triggering the excise tax will be the first payment or benefit to be reduced (with reductions made pro-rata in the event payments or ben- efits are owed at the same time). “Full Credit Payment” means a payment, distribution or benefit, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, that if reduced in value by one dollar reduces the amount of the para- chute payment (as defined in Section 280G of the Code) by one dollar, determined as if such payment, distribution or benefit had been paid or distributed on the date of the event triggering the excise tax. “Partial Credit Payment” means any payment, distribution or benefit that is not a Full Credit Payment. In no event shall Executive have any discretion with respect to the or- dering of payment reductions.

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(b) Unless the Company and Executive otherwise agree in writing, any determination required under this Section 5 will be made in writing by an independent firm (the “Firm”), whose determination will be conclusive and binding upon Executive and the Company for all purposes. For purposes of making the calculations required by this Section 5, the Firm may make reasonable assump- tions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Com- pany and Executive will furnish to the Firm such information and documents as the Firm may reasonably request in order to make a determination under this Section 5. The Company will bear all costs the Firm may reasonably incur in connection with any calculations contemplated by this Section 5.

6. Definition of Terms. The following terms referred to in this Agreement will have the following meanings:

(a)

Cause. “Cause” means (i) a breach by Executive of his fiduciary duties to the Company; (ii) Ex- ecutive’s refusal or failure to carry out a lawful directive of the Company or any member of the Board or any of their respective designees, which directive is consistent with the scope and nature of Executive’s responsibilities; (iii) Executive’s material failure to substantially perform his duties for the Company; (iv) Executive’s commission of any act of fraud, embezzlement, dishonesty, or moral turpitude, or any other misconduct that has caused or is reasonably ex- pected to result in material economic or reputational injury to the Company; (v) unauthorized use or disclosure by Executive of any proprietary information of the Company or any other party to whom Executive owes an obligation of nondisclosure as a result of his or her relationship with the Company; or (vi) Executive’s material breach of this Agreement or the Employment Agreement or any other written agreement or violation of a material written Company policy or covenant of or with the Company, in each case in the reasonable determination of the Board. In addition, Executive’s employment shall be deemed to have terminated for Cause if, on the date Executive’s employment terminates, facts and circumstances exist that would have justified a termination for Cause, even if such facts and circumstances are discovered after such termina- tion. For purposes of this definition, “Company” shall be interpreted to include any parent, sub- sidiary, affiliate or successor thereto, if appropriate. Notwithstanding the foregoing, Cause shall not exist based on conduct described in clauses (i) through (vi) unless any remediable conduct has not been cured within 30 days following Executive’s receipt of written notice from the Company specifying the particulars of the conduct constituting Cause.

(b)

Change in Control. “Change in Control” means shall be deemed to have occurred if as a result of a tender offer, other acquisition, merger, consolidation or sale or transfer of assets, any per- son(s) or entity becomes the beneficial owner of a total of more than fifty percent (50%) of either the outstanding shares of Company’s stock or Company’s assets. However, no event will be treated as a Change in Control unless it constitutes a change in the ownership or effective control of the Company, or in the ownership of a substantial portion of the assets of the Com- pany, within the meaning of Code Section 409A (a) (2)(A)(v).

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(c)	Code. “Code” means the Internal Revenue Code of 1986, as amended.
(d)	Disability. “Disability” or “Disabled” means that Executive is unable to engage in any substan- tial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted, or can be expected to last, for a continuous period of not less than 180 days.
(e)	Good Reason. “Good Reason” means the occurrence of one or more of the following, without Executive’s express written consent:
	(i)	a material reduction in Executive’s job responsibilities at any time, provided that neither a mere change in title alone nor reassignment following a Change in Control to a position that is substantially similar to the position held prior to the Change in Control shall constitute a material reduction in job responsibilities;
	(ii)	relocation by the Company or a subsidiary, parent, affiliate or successor thereto, as appropriate, of Executive’s primary business location that increases Executive’s one way commute by more than 35 miles;
	(iii)	a reduction in Executive’s then-current base salary by at least 10%, provided that an across-the-board reduction in the salary level of all other employees or consultants in positions similar to Executive’s by the same percentage amount as part of a general salary level reduction shall not constitute such a salary reduction; or
	(iv)	a material breach of this Agreement or the Employment Agreement.

Provided, however, that in order for an event to qualify as Good Reason, Executive must (1) provide the Company with written notice of the acts or omissions constituting the grounds for Good Reason within 90 days of the initial existence of the grounds for Good Reason, (2) allow the Company at least 30 days from receipt of such written notice to cure such event, and (3) if such event is not reasonably cured within such period, Executive’s resignation from all positions then held by Executive with the Company must be effective not later than 30 days after the expiration of the cure period.

(f)

Section 409A. “Section 409A” means Code Section 409A, and the final regulations and any guidance promulgated thereunder or any state law equivalent.

(g)

Section 409A Limit. “Section 409A Limit” will mean two (2) times the lesser of: (i) Executive’s annualized compensation based upon the annual rate of pay paid to Executive during Execu- tive’s taxable year preceding Executive’s taxable year of his or her separation from service as determined under Treasury Regulation Section 1.409A-1(b)(9)(iii)(A)(1) and any Internal Rev- enue Service guidance issued with respect thereto; or (ii) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Internal Revenue Code for the year in which Executive’s separation from service occurred.

23

7. Successors and Assigns.

(a)	Assignment. This Agreement is personal to Executive and without the prior written consent of the Company shall not be assignable by Executive. This Agreement shall be binding upon and shall inure to the benefit of and be enforceable by the Company’s successors and assigns.
(b)	The Company’s Successors. Any successor to the Company (whether direct or indirect and whether by purchase, merger, consolidation, liquidation or otherwise) to all or substantially all of the Company’s business and/or assets will assume the obligations under this Agreement and agree expressly to perform the obligations under this Agreement in the same manner and to the same extent as the Company would be required to perform such obligations in the absence of a succession. For all purposes under this Agreement, the term “Company” will include any suc- cessor to the Company’s business and/or assets which executes and delivers the assumption agreement described in this Section 7(a) or which becomes bound by the terms of this Agree- ment by operation of law.
(c)	Executive’s Successors. The terms of this Agreement and all rights and obligations of Executive hereunder shall be binding upon and will inure to the benefit of, and be enforceable by, Execu- tive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

8. Notice.

(a)

General. Notices and all other communications contemplated by this Agreement will be in writing and will be deemed to have been duly given when (i) personally delivered or when mailed by U.S. registered or certified mail, return receipt requested and postage prepaid, or (ii) when sent electronically via email utilizing DocuSign or other electronic delivery solution that provides for e-signature of receipt and notification. In the case of Executive, mailed notices will be ad- dressed to him or her at the home address which he or she most recently communicated to the Company in writing. In the case of the Company, mailed notices will be addressed to its corpo- rate headquarters, and all notices will be directed to the attention of its General Counsel.

(b)

Notice of Termination. Any termination by the Company for Cause or by Executive for Good Reason will be communicated by a notice of termination to the other party hereto given in ac- cordance with Section 8(a) of this Agreement. Such notice will indicate the specific termination provision in this Agreement relied upon, will set forth in reasonable detail the facts and circum- stances claimed to provide a basis for termination under the provision so indicated, and will specify the termination date (which will be not more than thirty (30) days after the giving of such notice), subject to any applicable cure period. The failure by Executive or the Company to include in the notice any fact or circumstance which contributes to a showing of Good Reason or Cause, as applicable, will not waive any right of Executive or the Company, as applicable, hereunder or preclude Executive or the Company, as applicable, from asserting such fact or circumstance in enforcing his or her or its rights hereunder, as applicable.

9. MiscellaneousProvisions.

(a)	No Duty to Mitigate. Executive will not be required to mitigate the amount of any payment contemplated by this Agreement, nor will any such payment be reduced by any earnings that Executive may receive from any other source.
(b)	Waiver. No provision of this Agreement will be modified, waived or discharged unless the mod- ification, waiver or discharge is agreed to in writing and signed by Executive and by an authorized officer of the Company (other than Executive). No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party will be con- sidered a waiver of any other condition or provision or of the same condition or provision at another time.
(c)	Headings. All captions and section headings used in this Agreement are for convenient reference only and do not form a part of this Agreement.
(b)	Entire Agreement. This Agreement, the Employment Agreement and the Executive’s Stock Option Agreement together constitute the entire agreement of the parties hereto with respect to the subject matter hereof and thereof, and these agreements together supersede in their entirety all prior or contemporaneous representations, understandings, undertakings or agreements (whether oral or written and whether expressed or implied) of the parties with respect to such matters. Executive acknowledges and agrees that this Agreement encompasses all the rights of Executive to any severance payments and/or benefits based on the termination of Executive’s employment and Executive hereby agrees that he or she has no such rights except as stated herein. No waiver, alteration, or modification of any of the provisions of this Agreement will be binding unless in writing and signed by duly authorized representatives of the parties hereto and which specifically mention this Agreement.
(e)	Choice of Law. The validity, interpretation, construction and performance of this Agreement will be governed by the laws of the State of New York without giving effect to provisions gov- erning the choice of law.
(f)	Dispute Resolution. If any dispute arises among the parties, the parties agree to try first in good faith to settle the dispute by mediation administered by the American Arbitration Association (AAA) under its Employment Arbitration Rules and Mediation Procedures. All unresolved dis- putes shall then be decided by final and binding arbitration in accordance with the Employment Arbitration Rules and Mediation Procedures of the AAA. In agreeing to arbitration, Company and Executive both acknowledge that each of the parties is giving up the right to have the dispute decided in a court of law before a judge or jury and instead the parties are accepting the use of arbitration for resolution.
(g)	Severability. The invalidity or unenforceability of any provision or provisions of this Agreement will not affect the validity or enforceability of any other provision hereof, which will remain in full force and effect.
(h)	Withholding. All payments made pursuant to this Agreement will be subject to withholding of applicable income, employment and other taxes, as required by law.
(i)	Counterparts. This Agreement may be executed in counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.

Notwithstanding any contrary provisions contained herein, the Agreement shall not be amended, modified, or terminated in a manner that would cause the timing of any payment to be made hereunder if to do so would cause its inclusion in income earlier than the actual receipt of payment by the Executive.

[Signature Page to Follow]

24

IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by its duly authorized officer, as of the day and year set forth below.

COMPANY:
Solar Integrated Roofing Company (SIRC)
By:
Name:	David Massey
Title:	Chief Executive Officer

EXECUTIVE:
By:
Name:	Stefan Abbruzzese

25

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, David Massey, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Solar Integrated Roofing Corp.;
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; and
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.

Dated: November 21, 2022	By:	/s/ David Massey
	Name:	David Massey
	Title:	Chief Executive Officer and Director (Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Wanda Witoslawski, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Solar Integrated Roofing Corp.;
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; and
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.

Dated: November 21, 2022	By:	/s/ Wanda Witoslawski
	Name:	Wanda Witoslawski
	Title:	Chief Financial Officer (Principal Financial Officer and Principal 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 Solar Integrated Roofing Corp. (the “Company”) on Form 10-Q for the quarterly period ended September 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David Massey, Principal Executive Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of Section 13(a) or 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.

/s/ David Massey  

David Massey

Principal Executive Officer

November 21, 2022 

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 Solar Integrated Roofing Corp. (the “Company”) on Form 10-Q for the quarterly period ended September 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Wanda Witoslawski, Principal Financial and Accounting Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of Section 13(a) or 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.

/s/ Wanda Witoslawski

Wanda Witoslawski

Principal Financial and Accounting Officer

November 21, 2022 

XML

Cover - shares	9 Months Ended
	Sep. 30, 2022	Nov. 18, 2022
Cover [Abstract]
Entity Registrant Name	SOLAR INTEGRATED ROOFING CORP.
Entity Central Index Key	0001756704
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	No
Document Period End Date	Sep. 30, 2022
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2022
Entity Common Stock Shares Outstanding		625,898,657
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	000-56256
Entity Incorporation State Country Code	NV
Entity Tax Identification Number	90-1502972
Entity Address Address Line 1	2831 St. Rose Parkway
Entity Address Address Line 2	Ste 200
Entity Address City Or Town	Henderson
Entity Address State Or Province	NV
Entity Address Postal Zip Code	89052
City Area Code	702
Local Phone Number	589-4651
Entity Interactive Data Current	Yes

XML

CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)	Sep. 30, 2022	Dec. 31, 2021
ASSETS
Cash	$ 480,141	$ 1,124,533
Accounts receivable, net	5,511,696	3,652,176
Work in progress receivable, net	76,976,192	33,242,296
Note receivable	4,200,000	4,200,000
Prepaid and other current assets	273,826	736,548
Inventory	151,363	142,955
TOTAL CURRENT ASSETS	87,593,218	43,098,508
OTHER ASSETS
Operating lease right-of-use assets	2,888,171	1,646,049
Property and equipment, net	1,004,016	1,122,057
Goodwill	62,047,800	58,401,851
Other assets	154,390	265,071
TOTAL ASSETS	153,687,595	104,533,536
CURRENT LIABILITIES
Accounts payable and accrued liabilities	8,516,321	7,984,710
Accrued interest	1,519,387	1,157,113
Due to related parties	11,204,126	11,510,413
Operating lease liabilities, current portion	504,981	115,623
Notes payable	21,955,667	5,112,773
Debenture payable	2,400,000	2,400,000
Convertible note payable, net of unamortized discounts	10,684,800	23,688,886
Derivative liabilities	53,295	10,049
Total Current Liabilities	56,838,577	51,979,567
OTHER LIABILITIES
Note payable, long-term	2,273,531	2,426,698
Operating lease liabilities, non-current portion	2,383,190	1,530,426
TOTAL LIABILITIES	61,495,298	55,936,691
STOCKHOLDER'S EQUITY
Common stock, $0.00001 par value: 900,000,000 shares authorized, 542,817,941 and 453,498,555 shares issued and outstanding, respectively	5,428	4,535
Stock payable	2,652,300	11,790,200
Stock receivable	0	(36,450,000)
Additional paid-in capital	59,570,943	74,087,246
Non-controlling interest	(415,389)	(60,487)
Retained earnings (accumulated deficit)	30,378,933	(774,754)
TOTAL STOCKHOLDER'S EQUITY	92,192,297	48,596,845
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY	153,687,595	104,533,536
Series A Preferred Stock [Member]
STOCKHOLDER'S EQUITY
Preferred stock, value	25	25
Series B Preferred Stocks [Member]
STOCKHOLDER'S EQUITY
Preferred stock, value	57	80
Series C, Preferred Stock [Member]
STOCKHOLDER'S EQUITY
Preferred stock, value	0	0
Series D, Preferred Stock [Member]
STOCKHOLDER'S EQUITY
Preferred stock, value	0	0
Preferred Stock [Member]
STOCKHOLDER'S EQUITY
Preferred stock, value	$ 0	$ 0

XML

CONSOLIDATED BALANCE SHEETS (Unaudited) (Parentheticals) - $ / shares	Sep. 30, 2022	Dec. 31, 2021
Preferred stock, shares authorized	25,000,041	25,000,041
Preferred stock, par value	$ 0.00001	$ 0.00001
Common stock, shares authorized	900,000,000	900,000,000
Common stock, value	$ 0.00001	$ 0.00001
Common stock shares outstanding	542,817,941	453,498,555
Common stock shares issued	542,817,941	453,498,555
Series A Preferred Stock [Member]
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, par value	$ 0.00001	$ 0.00001
Preferred stock, shares outstanding	2,500,000	2,500,000
Preferred stock, shares issued	2,500,000	2,500,000
Series B Preferred Stocks [Member]
Preferred stock, shares authorized	20,000,000	20,000,000
Preferred stock, par value	$ 0.00001	$ 0.00001
Preferred stock, shares outstanding	5,701,000	8,000,000
Preferred stock, shares issued	5,701,000	8,000,000
Series C, Preferred Stock [Member]
Preferred stock, shares authorized	1	1
Preferred stock, par value	$ 0.00001	$ 0.00001
Preferred stock, shares outstanding	1	1
Preferred stock, shares issued	1	1
Series D, Preferred Stock [Member]
Preferred stock, shares authorized	40	40
Preferred stock, par value	$ 0.00001	$ 0.00001
Preferred stock, shares outstanding	40	40
Preferred stock, shares issued	40	40

XML

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Revenue	$ 57,267,460	$ 13,224,759	$ 150,541,535	$ 24,674,807
Cost of Sales	43,071,432	8,418,340	94,558,164	19,484,806
Gross Profit	14,196,028	4,806,419	55,983,371	5,190,001
Operating expenses
Salaries and wages	3,989,043	2,863,858	12,437,116	5,488,167
Professional fees	1,400,473	1,585,673	4,499,397	4,474,413
Depreciation expense	69,807	222,613	277,601	303,982
Marketing	186,093	229,259	445,828	575,038
General and administrative	1,179,561	1,275,383	3,768,121	3,136,619
Total operating expenses	(6,824,977)	6,176,786	(21,428,063)	13,978,219
Income (loss) from operations	7,371,051	(1,370,367)	34,555,308	(8,788,218)
Other income (expense)
Interest expense	(1,077,710)	(586,638)	(2,190,637)	(949,454)
Other income (expense)	0	(108,489)	(253,707)	90,793
PPP loans forgiveness	0	20,830	0	1,018,130
Loss on debt modification	0	0	(1,268,933)	0
Gain (loss) on change in fair value of derivative liabilities	(53,295)	359,009	(43,246)	1,285,675
Total other income (expense)	(1,131,005)	(315,288)	(3,756,523)	1,445,144
Income (loss) before taxes	6,240,046	(1,685,655)	30,798,785	(7,343,074)
Provision for income taxes	0	0	0	0
Net income (loss)	6,240,046	(1,685,655)	30,798,785	(7,343,074)
Net income (loss) attributable to non-controlling interest	(331,918)	(24,233)	(354,902)	(40,415)
Net income (loss) attributable to the Company	$ 6,571,964	$ (1,661,422)	$ 31,153,687	$ (7,302,659)
Basic income (loss) per Common Share	$ 0.01	$ (0.00)	$ 0.06	$ (0.02)
Diluted income (loss) per Common Share	$ 0.01	$ (0.00)	$ 0.06	$ (0.02)
Basic weighted average number of common shares outstanding	539,902,975	378,468,171	502,470,756	343,348,974
Diluted weighted average number of common shares outstanding	616,917,439	481,083,476	579,485,220	445,964,279

XML

CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (Unaudited) - USD ($)	Total	Common Stock	Additional Paid-In Capital	Stock Receivable [Member]	Stock Payable [Member]	Noncontrolling Interest	Accumulated Deficit	Series A, Preferred Stock	Series C, Preferred Stock	Series B, Preferred Stock	Series D, Preferred Stock
Balance, shares at Dec. 31, 2020		209,003,623						5,000,000		13,000,000
Balance, amount at Dec. 31, 2020	$ (3,024,908)	$ 2,090	$ 11,808,329	$ 0	$ 0	$ 0	$ (14,835,507)	$ 50	$ 0	$ 130	$ 0
Common stock issued for services, shares		500,000
Common stock issued for services, amount	55,000	$ 5	54,995				0	0		0
Common stock issued for conversion of debt and interest, shares		49,393,025
Common stock issued for conversion of debt and interest, amount	617,686	$ 494	617,192	0		0	0	0		0
Common stock issued for cash, shares		2,000,000
Common stock issued for cash, amount	140,000	$ 20	139,980	0		0	0	0		0
Common stock issued for compensation, shares		1,850,000
Common stock issued for compensation, amount	283,500	$ 18	283,482				0	0		0
Common stock issued for warrant exercise, shares		306,148
Common stock issued for warrant exercise, amount	0	$ 3	(3)				0	0		0
Common stock issued for acquisition, shares		45,000,000
Common stock issued for acquisition, amount	39,128,500	$ 450	39,128,050				0	0		0
Series B stock to be issued for acquisition	4,870,000				4,870,000
Non controlling interest	11,195					11,195	0	0		0
Net loss	(2,282,511)	$ 0	0	0		0	(2,282,511)	$ 0		$ 0
Balance, shares at Mar. 31, 2021		308,052,796						5,000,000		13,000,000
Balance, amount at Mar. 31, 2021	39,798,462	$ 3,080	52,032,025	0	4,870,000	11,195	(17,118,018)	$ 50	0	$ 130	0
Balance, shares at Dec. 31, 2020		209,003,623						5,000,000		13,000,000
Balance, amount at Dec. 31, 2020	$ (3,024,908)	$ 2,090	11,808,329	0	0	0	(14,835,507)	$ 50	$ 0	$ 130	$ 0
Common stock issued for services, shares	1,568,090
Common stock issued for services, amount	$ 645,150
Common stock issued for compensation, shares	1,850,000
Common stock issued for compensation, amount	$ 283,500
Common stock issued for acquisition, shares	82,500,000
Common stock issued for acquisition, amount	$ 63,532,400
Net loss	(7,343,074)
Net profit	(7,343,074)
Warrant expense	0
Balance, shares at Sep. 30, 2021		404,140,433						5,000,000	1	9,000,000	40
Balance, amount at Sep. 30, 2021	48,545,641	$ 4,041	70,720,041	0	0	(40,415)	(22,138,166)	$ 50	$ 0	$ 90	$ 0
Balance, shares at Dec. 31, 2020		209,003,623						5,000,000		13,000,000
Balance, amount at Dec. 31, 2020	(3,024,908)	$ 2,090	11,808,329	0	0	0	(14,835,507)	$ 50	$ 0	$ 130	$ 0
Balance, shares at Dec. 31, 2021		453,498,555						2,500,000	1	8,000,000	40
Balance, amount at Dec. 31, 2021	48,596,845	$ 4,535	74,087,246	(36,450,000)	11,790,200	(60,487)	(774,754)	$ 25	$ 0	$ 80	$ 0
Balance, shares at Mar. 31, 2021		308,052,796						5,000,000		13,000,000
Balance, amount at Mar. 31, 2021	39,798,462	$ 3,080	52,032,025	0	4,870,000	11,195	(17,118,018)	$ 50	0	$ 130	0
Common stock issued for services, shares		818,090
Common stock issued for services, amount	450,000	$ 8	449,992				0	0		0
Common stock issued for conversion of debt and interest, shares		30,856,201
Common stock issued for conversion of debt and interest, amount	694,266	$ 309	693,957	0		0	0	0		0
Common stock issued for warrant exercise, shares		16,479,564
Common stock issued for warrant exercise, amount	16,480	$ 165	16,315				0	0		0
Common stock issued for acquisition, amount	24,403,900				24,403,900		0	0		0
Non controlling interest	(27,377)					(27,377)	0	0		0
Net loss	(3,358,726)	$ 0	0	0		0	(3,358,726)	$ 0		$ 0
Balance, shares at Jun. 30, 2021		356,206,651						5,000,000		13,000,000
Balance, amount at Jun. 30, 2021	61,977,005	$ 3,562	53,192,289	0	29,273,900	(16,182)	(20,476,744)	$ 50	$ 0	$ 130	$ 0
Common stock issued for services, shares		250,000
Common stock issued for services, amount	140,150	$ 2	140,148					0		0
Common stock issued for conversion of debt and interest, shares		10,383,782
Common stock issued for conversion of debt and interest, amount	86,695	$ 104	86,592					0		0
Common stock issued for acquisition, shares		37,500,000
Non controlling interest	(24,233)					(24,233)		0		0
Net loss	(1,685,655)	$ 0	0	0			(1,661,422)	0		0
Common stock repurchased and cancelled, shares		(200,000)
Common stock repurchased and cancelled, amount	(100,000)	$ (2)	(99,998)					0		$ 0
Common stock issued for acquisition, amount	(1,872,555)	375	22,530,970		(24,403,900)
Preferred stock Class B issued for acquisition, shares										1,000,000
Preferred stock Class B issued for acquisition, amount	0	$ 0	4,869,990		(4,870,000)			0		$ 10
Preferred stock Class B cancelled and retired, shares										(5,000,000)
Preferred stock Class B cancelled and retired, amount	(10,000,000)		(9,999,950)							$ (50)
Preferred stock Class C issued for acquisition								$ 0		$ 0
Preferred stock Class D issued for acquisition, shares											40
Balance, shares at Sep. 30, 2021		404,140,433						5,000,000	1	9,000,000	40
Balance, amount at Sep. 30, 2021	48,545,641	$ 4,041	70,720,041	0	0	(40,415)	(22,138,166)	$ 50	$ 0	$ 90	$ 0
Balance, shares at Dec. 31, 2021		453,498,555						2,500,000	1	8,000,000	40
Balance, amount at Dec. 31, 2021	48,596,845	$ 4,535	74,087,246	(36,450,000)	11,790,200	(60,487)	(774,754)	$ 25	$ 0	$ 80	$ 0
Common stock issued for services, shares		500,000
Common stock issued for services, amount	177,900	$ 5	177,895			0	0	0		0
Common stock issued for conversion of debt and interest, shares		27,075,035
Common stock issued for conversion of debt and interest, amount	27,075	$ 271	26,804			0	0	0	0	0	0
Common stock issued for compensation, shares		150,000
Common stock issued for compensation, amount								0		0
Non controlling interest	(29,058)					(29,058)		0		0
Common stock payable for cash	514,040				514,040
Net profit	5,693,889				0	0	5,693,889	$ 0	$ 0	$ 0	$ 0
Balance, shares at Mar. 31, 2022		481,223,590						2,500,000	1	8,000,000	40
Balance, amount at Mar. 31, 2022	55,054,716	$ 4,812	74,365,969	(36,450,000)	12,304,240	(89,545)	4,919,135	$ 25	$ 0	$ 80	$ 0
Balance, shares at Dec. 31, 2021		453,498,555						2,500,000	1	8,000,000	40
Balance, amount at Dec. 31, 2021	$ 48,596,845	$ 4,535	74,087,246	(36,450,000)	11,790,200	(60,487)	(774,754)	$ 25	$ 0	$ 80	$ 0
Common stock issued for services, shares	2,200,000
Common stock issued for services, amount	$ 613,350
Common stock issued for cash, amount	$ 1,748,000
Common stock issued for compensation, shares	15,366,539
Common stock issued for compensation, amount	$ 2,647,066
Common stock issued for acquisition, shares	38,739,242
Common stock issued for acquisition, amount	$ 12,011,849
Net loss	30,798,785
Net profit	30,798,785
Warrant expense	147,500
Balance, shares at Sep. 30, 2022		542,817,941						2,500,000	1	5,701,000	40
Balance, amount at Sep. 30, 2022	92,192,297	$ 5,428	59,570,943	0	2,652,300	(415,389)	30,378,933	$ 25	$ 0	$ 57	$ 0
Balance, shares at Mar. 31, 2022		481,223,590						2,500,000	1	8,000,000	40
Balance, amount at Mar. 31, 2022	55,054,716	$ 4,812	74,365,969	(36,450,000)	12,304,240	(89,545)	4,919,135	$ 25	$ 0	$ 80	$ 0
Common stock issued for services, shares		1,500,000
Common stock issued for services, amount	336,750	$ 15	336,735			0	0	0		0
Common stock issued for conversion of debt and interest, shares		7,559,285
Common stock issued for conversion of debt and interest, amount	1,058,300	$ 76	1,058,224			0	0	0	0	0	0
Common stock issued for compensation, shares		4,104,603
Common stock issued for compensation, amount	3,690,164	$ 41	1,869,736		1,820,387		0	0		0
Common stock issued for acquisition, shares		35,339,242
Common stock issued for acquisition, amount	2,091,949	$ 353	11,229,496		(9,137,900)
Non controlling interest	6,074					6,074		0		0
Net loss	18,887,834				0	0	18,887,834	$ 0	$ 0	$ 0	$ 0
Balance, shares at Jun. 30, 2022		529,726,720						2,500,000	1	8,000,000	40
Balance, amount at Jun. 30, 2022	81,125,787	$ 5,297	88,860,160	(36,450,000)	4,986,727	(83,471)	23,806,969	$ 25	$ 0	$ 80	$ 0
Common stock issued for services, shares		200,000
Common stock issued for services, amount	98,700	$ 2	98,698			0	0	0		0
Common stock issued for conversion of debt and interest, shares		25,074,285
Common stock issued for conversion of debt and interest, amount	1,755,200	$ 251	1,754,949			0	0	0	0	0	0
Common stock issued for cash, shares		3,315,000
Common stock issued for compensation, shares		11,111,936
Common stock issued for compensation, amount	703,264	$ 111	2,523,540		(1,820,387)		0	0		0
Common stock issued for acquisition, shares		3,400,000
Common stock issued for acquisition, amount	782,000	$ 34	781,966
Non controlling interest	(331,918)					(331,918)		0		0
Net loss	6,240,046						6,571,964	0	0	0	0
Common stock issued for cash, amount		$ 33	594,507		(514,040)	0	0	$ 0	$ 0	$ 0	$ 0
Common stock returned and cancelled, shares		(45,000,000)
Common stock returned and cancelled, amount	0	$ (450)	(36,449,550)	36,450,000
Conversion of preferred stock Class B into common shares, shares		14,990,000								(1,499,000)
Conversion of preferred stock Class B into common shares, amount	0	$ 150	(135)							$ (15)
Preferred stock cancelled and retired, shares										(800,000)
Preferred stock cancelled and retired, amount	0		8							$ (8)
Warrant expense	147,500		147,500
Stock option expense	1,259,300		1,259,300
Balance, shares at Sep. 30, 2022		542,817,941						2,500,000	1	5,701,000	40
Balance, amount at Sep. 30, 2022	$ 92,192,297	$ 5,428	$ 59,570,943	$ 0	$ 2,652,300	$ (415,389)	$ 30,378,933	$ 25	$ 0	$ 57	$ 0

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CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$ 30,798,785	$ (7,343,074)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Stock-based compensation	3,260,418	928,650
Loss on debt modification	1,268,933	0
Amortization of debt discount	6,724	186,146
(Gain) Loss on change in fair value of derivative liabilities	43,246	(1,285,675)
Depreciation	277,601	303,982
Warrant expense	147,500	0
Stock option expense	1,259,300	0
PPP loans forgiveness	0	(1,018,130)
Changes in operating assets and liabilities:
Accounts and work in progress receivable	(45,593,416)	(2,456,396)
Prepaid expenses and other assets	462,722	617,892
Inventory	(8,408)	141,162
Accounts payables and accrued liabilities	2,773,650	1,734,326
Due to related parties	(306,287)	8,104,145
Net Cash Used in Operating Activities	(5,609,232)	(1,322,756)
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash paid in acquisition of subsidiaries	(600,000)	(10,100,000)
Purchase of property and equipment	(159,560)	(1,112,644)
Net Cash Used in Investing Activities	(759,560)	(11,212,644)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable	5,452,105	6,813,218
Repayments of notes payable	(2,762,245)	(1,841,218)
Proceeds from convertible notes payable	2,440,000	21,055,610
Proceeds from warrant exercise	0	16,480
Repurchase of preferred stock class B		(10,000,000)
Repurchase of common stock		(100,000)
Proceeds from sale of common stock	594,540	140,000
Net Cash Provided by Financing Activities	5,724,400	16,084,090
Net change in cash and cash equivalents	(644,392)	3,548,690
Cash and cash equivalents, beginning of period	1,124,533	710,091
Cash and cash equivalents, end of period	480,141	4,258,781
Supplemental cash flow information
Cash paid for interest	0	0
Cash paid for taxes	0	0
Non-cash investing and financing transactions:
Issuance of common stock for conversion of debt and accrued interest	2,840,575	1,398,647
Common stock issued for acquisition of subsidiaries	12,011,849	63,532,400
Modification of convertible notes in exchange for promissory note	14,000,000	0
Acquisition of subsidiary via issuance of preferred stock class B	0	4,870,000
Net assets acquired in acquisition	0	1,007,535
Assets acquired from financing	0	54,807
Net assets acquired in acquisitions	0	866,000
Return and cancellation of common stock	36,450,000	0
Right-of-use assets and corresponding liabilities on new building leases	$ 1,454,939	$ 0

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BACKGROUND AND ORGANIZATION

9 Months Ended

Sep. 30, 2022

BACKGROUND AND ORGANIZATION

BACKGROUND AND ORGANIZATION

NOTE 1 – BACKGROUND AND ORGANIZATION

Business Operations

Solar Integrated Roofing Corporation (“SIRC” or the “Company”) is a fully integrated roofing, residential solar, commercial solar/microgrid, electric vehicle (EV) charging and financing business focused on selling and installing systems, specializing in commercial and residential properties, targeting the North American solar market with specific strength in the Southern California market. Under the SIRC brand, the company has acquired 14 companies that provide specific services to solar customers. The acquired businesses have a high degree of complimentary services and as such, SIRC is setting up divisions to specifically address the strengths of each product offering and provide significant cross selling opportunities across roofing, residential solar, commercial solar/microgrids, EV charging/battery back-up and project financing. To date, the major areas of operations include delivery of installation services, battery storage solutions, electric vehicle charging solutions, and roofing services.

The Company was incorporated under the laws of the state of Nevada on May 1, 2007 as Sterling Oil & Gas Company. The name was changed on February 14, 2014 to Landstar Development Group. On November 9, 2015 the Board of Directors of SIRC approved a name changed to Solar Integrated Roofing Corporation.

On February 11, 2016, the Company acquired the issued and outstanding shares of Secure Roofing and Solar Inc. (“SRS”) whereby the shareholders of SIRC became the controlling shareholders of the combined entity. David Massey held 100% share ownership in SRS and was issued 10,000,000 common shares of SIRC for 100% of the issued and outstanding shares of SRS.

Impacts of COVID-19 on Our Business

The COVID-19 pandemic and the resulting impact on the U.S. economy have accelerated many of our operational initiatives to deliver best-in-class customer value and to reduce costs. The COVID-19 pandemic has had an unprecedented impact on the U.S. economy, resulting in governments and organizations implementing public health measures in an effort to contain the virus, including physical distancing, work from home, supply chain logistical changes and closure of non-essential businesses. With vaccine administration and adoption rising, governments and organizations have responded by adjusting such restrictions and guidelines accordingly. We are monitoring this fluid situation and will continue to follow official regulations to protect our employees and customers.

The ultimate impact of the COVID-19 pandemic (and virus variants, such as Delta and Omicron) is still highly uncertain and subject to change, and we do not yet know the full extent of potential delays or impacts on our business, operations or the global economy as a whole. We will continue to monitor developments affecting our workforce, our customers, and our business operations generally and will take actions that we determine are necessary in order to mitigate these impacts.

Global supply chain disruptions are prevalent in the renewable energy industry and are most acute in the residential and commercial PV markets. While domestic and international manufacturers in this space are starting to make strides in rectifying some of the major issues, several factors are having overall detrimental impacts to US renewable installers and developers. The three main factors contributing to adverse market conditions are equipment pricing, manufacturing delays and shortages, labor disruptions and logistics. At times these factors overlap, but each factor has a unique impact on business operations and metrics.

Pricing for renewable energy equipment, after trending downward for the last decade, have seen substantial price increases in the past 12-months. Raw material such as copper, aluminum, steel, plastic resin, and tempered glass, all of which are integral to renewable energy equipment, remain at stubbornly high price points. Manufacturers have consistently passed these raw material increases downstream in 2022, equating to an estimated 13.5% higher aggregate equipment pricing in the 12 months ended October 31, 2022. A percentage of the equipment pricing increase has been passed downstream once again, this time to end users, but to maintain a competitive position some of the increase has been absorbed internally. We estimate the overall impact to gross profit has been roughly 5% during the 12 months ended December 31, 2022.

Manufacturing delays and product shortages have been particularly painful in 2022. The initial COVID-19 wave and the precipitous drop off in consumer demand led to a massive ramp down in global production for key components such as solar modules, inverter technology and PV racking equipment. While consumer demand has roared back to life, manufacturing capacity and production have not kept pace. Fulfillment lead times for key construction equipment have increased 40-60% in some instances. These effects are particularly present in semi-conductor intensive equipment. Increased lead times have a direct impact on customer sales through an increased cancelation rate and in doing so has a negative impact on our revenue stream. Increased customer cancelation has had an estimated 6% negative impact on our revenue stream.

Renewable energy equipment is heavily tied to the global logistics industry. Most major components, including solar modules and inverter technology, are made outside of the US and rely on an interplay of shipping, railway, and roadway transportation to arrive at its destination. When coupled with manufacturing delays and increased consumer demand, these logistics pathways have proven slow to rebound. Logistics costs had started to flatten out in the 2^nd half of 2022, but with new uncertainty in the oil markets we expect that flattening curve to be short lived. There is a fine correlation between logistics costs and equipment pricing and a portion of the overall negative impact on gross profits can be attributed to logistics costs. Delays in transits from manufacturers as well as decreased availability with transportation providers are also adding to the issue of increased customer cancelation and the decrease in revenue stream.

With regards to mitigation strategies, we have substantially increased our equipment and demand forecasting with our vendor partners as well as established lines of communication with manufacturers to better identify trends in the market. By increasing our presence and communication frequency with our vendors and manufacturers, we are better able to identify forward-looking issues and adjust our strategy accordingly to mitigate future monetary impacts.

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Summary of significant accounting policies

9 Months Ended

Sep. 30, 2022

Summary of significant accounting policies

Significant Accounting Policies

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”), including the instructions to Form 10-Q and Regulation S-X. Certain information and note disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”), have been condensed or omitted from these statements pursuant to such rules and regulations and, accordingly, they do not include all the information and notes necessary for comprehensive financial statements and should be read in conjunction with our audited consolidated financial statements for the year ended December 31, 2021. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included. 

Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of Solar Integrated Roofing Corporation and its wholly-owned subsidiaries: Secure Roofing and Solar Inc., Narrate LLC, McKay Roofing Company, Inc., Milholland Electric, Inc., Montross Companies, Inc., Approved Home Pros, LLC, Enerev LLC, Cornerstone Construction Team, LLC, Balance Authority, LLC, Kinetic Investments Inc. dba Future Home power, USA Solar Network LLC, SunUp Solar LLC and Renovation Roofing, Inc., which are included in the financial statements of the Company as of their respective acquisition dates. Pacific Lighting Management, Inc. was the only subsidiary acquired at 60% so the Company includes non-controlling interest in its consolidated financial statements. During the nine months ended September 30, 2021, the Company acquired Enerev LLC, Cornerstone Construction Team LLC, 60% of Pacific Lighting Management, Inc., Balance Authority, LLC, Kinetic Investments, Inc. dba Future Home Power, USA Solar Network LLC and SunUp Solar LLC. All intercompany accounts have been eliminated upon consolidation.

During the nine months ended September 30, 2022, the Company did not acquire any entities. During the nine months ending September 30, 2022, the Company eliminated and rescinded the agreement regarding Cornerstone Construction Team, LLC as of May 31, 2022. The Company has consolidated the operations for the entity up until the recission date of May 31, 2022. The Company received the previously issued 45,000,000 shares of common stock issued in connection with the merger to the entity’s previous ownership group. The Company also issued 8,000,000 in common stock valued at $1,748,000 from the stock price on the day of legal settlement. All Cornerstone assets and liabilities were eliminated from the Company’s consolidated financial statements on May 31, 2022.

During the nine months ended September 30, 2021, the Company acquired Enerev LLC, Cornerstone Construction Team LLC, 60% of Pacific Lighting Management, Inc., Balance Authority LLC, Kinetic Investments, Inc. dba Future Home Power, USA Solar Network LLC, SunUp Solar LLC and Renovation Roofing, Inc.

Use of Estimates

The preparation of financial statements in conformity with U.S. 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include the estimated useful lives of property and equipment, allowance for doubtful accounts, impairment of long-lived assets, and the valuation of debt and equity transactions. Actual results could differ from those estimates.

Concentrations of Credit Risk

The Company maintains its cash in bank deposit accounts, the balances of which at times may exceed federally insured limits. The Company continually monitors its banking relationships and consequently has not experienced any losses in its accounts. As of September 30, 2022 and December 31, 2021, management believes the Company is not exposed to any significant credit risk on cash.

Cash Equivalents

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cash and cash equivalents were $480,141 as of September 30, 2022 and $1,124,533 as of December 31, 2021.

Accounts Receivable

Management reviews accounts receivable periodically to determine if any receivables will potentially be uncollectible. Management’s evaluation includes several factors including the aging of the account balances, a review of significant past due accounts, economic conditions, and our historical write- off experience, net of recoveries. The Company includes any accounts receivable balances that are determined to be uncollectible, along with a general reserve, in its allowance for doubtful accounts. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. The Company’s allowance for doubtful accounts was $340,874 and $253,652 as of September 30, 2022 and December 31, 2021, respectively, and no individual customer owed in excess of 10% of the trade accounts receivable balances of $5,511,696 or $3,652,176, respectively.

Inventory

The Company’s inventory is valued at the lower of cost (the purchase price) or market. Inventory costs are determined based on the average cost basis. A reserve for slow-moving and potentially obsolete inventories is recorded as of each balance sheet date and total inventories are presented net of that reserve. Inventory consists primarily of solar panels. As of September 30, 2022, management evaluated all held inventory for obsolete or slow-moving parts and did not identify any. 

Property and Equipment

Property and equipment are carried at cost less amortization and depreciation. Major betterments that extend the useful lives of assets are also capitalized. Normal maintenance and repairs are charged to expense as incurred. When assets are sold or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in operations. Property and equipment consist of Vehicles, Computer Equipment, Machinery and Equipment, Furniture and Equipment which are depreciated on a straight-line basis over their expected useful lives as follows.

Vehicles	5 years
Computer Equipment	5 years
Machinery and Equipment	5 years
Furniture & Equipment	5 years

Leases

The Company follows the Financial Accounting Standards Board’s (the “FASB”) Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), and additional ASUs issued to clarify and update the guidance in ASU 2016-02 (collectively, the “new leases standard”), which modifies lease accounting for lessees to increase transparency and comparability by recording lease assets and liabilities for operating leases and disclosing key information about leasing arrangements. The new lease standard requires an entity to recognize a right-of-use asset and a lease liability for virtually all leases. The Company elected to exclude from its balance sheets recognition of leases having a term of 12 months or less (“short-term leases”). Lease expense is recognized on a straight-line basis over the lease term. See Note 12 for further information regarding the Company’s leases.

Advertising

The Company conducts advertising for the promotion of its services. In accordance with ASC 720-35, advertising costs are charged to operations when incurred. The Company incurred $445,828 in marketing and advertising expenses during the nine months ended September 30, 2022 and $575,038 during the nine months ended September 30, 2021.

Fair Value of Financial Instruments

Accounting Standards Codification subtopic 825-10, Financial Instruments (“ASC 825-10”) requires disclosure of the fair value of certain financial instruments. The carrying value of cash and cash equivalents, accounts payable and accrued liabilities, and short-term borrowings, as reflected in the balance sheets, approximate fair value because of the short-term maturity of these instruments. All other significant financial assets, financial liabilities and equity instruments of the Company are either recognized or disclosed in the financial statements together with other information relevant for making a reasonable assessment of future cash flows, interest rate risk and credit risk. Where practicable the fair values of financial assets and financial liabilities have been determined and disclosed; otherwise only available information pertinent to fair value has been disclosed.

The Company follows Accounting Standards Codification subtopic 820-10, Fair Value Measurements and Disclosures (“ASC 820-10”) and Accounting Standards Codification subtopic 825-10, Financial Instruments (“ASC 825-10”), which permits entities to choose to measure many financial instruments and certain other items at fair value. ASC 820 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by ASC 820 are described below:

Level 1: Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.

Level 2: Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.

Level 3: Pricing inputs that are generally unobservable inputs and not corroborated by market data.

The carrying value of the Company’s current assets and liabilities are deemed to be fair market value due to the short-term nature of these instruments.  The Company did not have any Level 2 financial instruments as of September 30, 2022 or December 31, 2021, while the Company’s Level 3 derivative liabilities are detailed in Note 10.

Revenue Recognition

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers, when satisfying the performance obligation of the associated contract that reflects the consideration expected to be received based on the terms of the contract.

Solar Integrated Roofing Corporation has chosen to utilize the “Output Method” of ASC 606 as a means of recognizing revenue in accordance with performance obligation milestones within their executed contracts. The Output Method as defined in ASC 606 are incremental goods or services that are instrumental and necessary to fulfill the complete project that have been verified to be completed. These outputs are the result of processes applied to inputs in a business. In other words, the Output Method measures results achieved and value that is passed on to the customer in relation to the contract as a whole. In implementation, the Company has determined the incremental milestones of a project ranging from contract inception to project completion, with each progressing milestone providing additional services to the end client. Per the guidelines of ASC 606, the Company then tracks the progress toward completion of the contract by measuring outputs to date relative to total estimated outputs needed to satisfy the performance obligation.

As the different subsidiaries of the Company encompass many different business models, there exists different metrics for each of the subsidiaries in regard to intervals/milestones qualifying a specific level of revenue recognition. The business types are as follows:

☐	Roofing Companies
☐	Sales Organizations
☐	Claims Management Companies
☐	Solar Installation Companies
☐	Alternative Energy Companies
☐	Service Organizations

ASC 606 has five general components which formulate the basis of the revenue process. In observation of the Output Method, the five components and brief explanations as to how each applies to the revenue recognition model the Company has adopted are as follows:

(i) Identify the contract, or contracts, with a customer.

A contract is an agreement or purchase order between two or more parties that creates enforceable rights and obligations. In evaluating the contract, the Company analyzes the customer’s intent and ability to pay the amount of promised consideration (credit risk) and considers the probability of collecting substantially all of the consideration.

(ii) Identify the performance obligations in the contract.

At a contract’s inception, the Company assesses the goods or services promised in a contract with a customer and identifies the performance obligations. The main performance obligations are the provisions of the following:

☐	Project Specifics
	o	Site Visit
	o	Engineering Design
	o	Permitting
	o	Utility Interconnection, if applicable
	o	Project Installation
	o	Project Completion

(iii)	Determine the transaction price
	The transaction price is the amount of consideration to which the Company is entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties. When a contract provides a customer with payment terms of more than a year, the Company considers whether those terms create variability in the transaction price and whether a significant financing component exists. As of September 30, 2022, the Company has not provided payment terms of more than a year.
(iv)	Allocate the transaction price to the performance obligations in the contract.
	The Company performs an allocation of the transaction price to each separate performance obligation, known as milestones. The allocated milestone payments are based upon multiple factors:
	☐	Hard costs for materials needed to fulfill the current milestone.
	☐	Soft costs upon the milestone being achieved (sales commissions, labor costs)
	☐	Overhead and incidentals to be allocated at the specific milestones of a project.
(v)	Recognize revenue when, or as, the Company satisfies a performance obligation.
	The Company recognizes revenue incrementally upon its fulfillment of each specific performance obligation milestone as outlined in the underlying contract utilizing the Output Method.

During the nine months ended September 30, 2022 and 2021, the Company derived its revenues from the following:

- residential solar panels sales and installation: approximately $60.1 million and $11.7 million, respectively commercial solar: approximately $74.6 million and $0, respectively

- roofing constructions: approximately $13.7 million and $12.5 million, respectively

- EV charging stations: approximately $2.1 million and $0.5 million, respectively

The Company analyses whether gross sales as the principal, or net sales as the agent, should be recorded. Since the Company assumes all risk of loss, has control over establishing price, and has control over the related costs associated with earning revenues, the Company is the principal, and as such has recorded all revenues at the gross price.

Concentration of Revenue by Customer

During the nine months ended September 30, 2022 and 2021, no individual customers comprised above 10% of total revenue recognized.

Concentration of Revenue by Segment during the nine months ended September 30, 2022 and 2021:

- residential solar sales and installation: approximately 40% and 47.5%, respectively commercial solar: approximately 50% and 0%, respectively

- roofing construction: approximately 9% and 50.5%, respectively

- EV charging stations: approximately 1% and 2%, respectively

Segments and Disaggregated Revenue

The Company is a single source solar power and roofing system installation company operating and specializing in commercial and residential properties across the United States. The Company’s operations are conducted in specific reportable segments: roofing construction, residential solar, commercial solar & microgrids, battery back-up & EV charging and project financing. The Company defines its segments because the operations are distinctly different from other areas within the Company as the Company has roofing contracts, solar installations (residential / commercial / microgrids), battery back-up and EV charging installations as well as finance and maintenance. All of these areas are supported by our sales, marketing and general and administrative teams. The Company’s Chief Operating Officer regularly reviews these segments to align resources and analyze performance.

All of the Company’s segments operate within the United States as the Company does not have any foreign sales or operations at this time. The Company’s roofing segment is dedicated to services and products serving roofing construction, design and maintenance. Construction of roofing projects and the design of roofing installations as well as the construction of the roofing projects all fall under this segment. The Company’s residential solar segment serves the installation of solar systems within residential properties selling directly to consumers. The Company’s commercial solar segments sells to larger renewal energy companies and to corporations seeking solar installations to offset utility expenses (i.e. urban housing, commercial properties, apartment buildings, etc.). The Company’s EV charging services are centered around providing solutions for EV charging platforms through the planning, sourcing and installation of these platforms for businesses and other agencies. Our financing efforts are done in support of these operating activities.

The Company measures the results of the segments by the following among other attributes: gross margin, operating income (which includes overhead corporate expense allocations), costs of sales and revenue. The Company revises the measurement of the reporting segments operating income, gross margin and corporate overhead allocations from time to time as these metrics are regularly reviewed by the Chief Operating Officer. Information on the Company’s operating segments, including the reconciliation to income is provided in the following table.

	Solar Residential			Solar Commercial		Roofing Construction			EV Charging			Consolidated
Nine Months Ended
September 30, 2021
Revenue	$	11,735,260		$	-	$	12,481,941		$	457,606		$	24,674,807
Cost of sales		9,575,946			-		9,654,975			253,885			19,484,806
Gross margin		2,159,314			-		2,826,966			203,721			5,190,001
Operating (loss)		(4,006,196	)		-		(4,638,906	)		(143,116	)		(8,788,218	)
Nine Months Ended
September 30, 2022
Revenue	$	60,150,528		$	74,590,743	$	13,679,707		$	2,120,557		$	150,541,535
Cost of sales		41,911,157			42,278,932		8,549,924			1,818,151			94,558,164
Gross margin		18,239,371			32,311,811		5,129,783			302,406			55,983,371
Operating Income (loss)		16,176,064			20,816,516		(1,537,903	)		(899,369	)		34,555,308

	Solar Residential			Solar Commercial		Roofing Construction			EV Charging			Consolidated
Three Months Ended
September 30, 2021
Revenue	$	6,758,884		$	-	$	6,220,147		$	245,728		$	13,224,759
Cost of sales		5,008,450			-		3,300,787			109,103			8,418,340
Gross margin		1,750,434			-		2,919,360			136,625			4,806,419
Operating (loss)		(1,225,839	)		-		(69,174	)		(75,354	)		(1,370,367	)
Three Months Ended
September 30, 2022
Revenue	$	10,356,762		$	41,891,554	$	4,791,303		$	227,841		$	57,267,460
Cost of sales		9,367,592			30,770,051		2,346,818			586,971			43,071,432
Gross margin		989,170			11,121,503		2,444,485			(359,130	)		14,196,028
Operating Income (loss)		1,896,023			5,699,027		628,979			(852,978	)		7,371,051

As of September 30, 2022, approximately $291.6 million of revenue is expected to be recognized from remaining performance obligations for solar commercial contracts. The Company expects to recognize revenue on these remaining performance obligations over the next 12 months. The Company has elected to accrue installation and construction activities until the customer obtains control of the solar commercial project. Accordingly, the Company will accrue all related construction and installation costs (Work in progress accounts payable) and recognize Work in progress accounts receivable as revenue and Work in progress accounts payable as cost of sales once the project has been completed. The Company generally has payment terms with its customers of one year or less and has elected the practical expedient applicable to such contracts not to consider the time value of money over a longer period of time.

Cost of Revenue

Cost of revenue consists primarily of costs related to raw materials, freight and delivery, product warranty, and personnel costs (salaries, bonuses, benefits, and stock-based compensation). Personnel costs in cost of revenue includes both direct labor costs as well as costs attributable to any individuals whose activities relate to the procurement, installment and delivery of the finished product and services. Deferred cost of revenue results from the timing differences between the costs incurred in advance of the satisfaction of all revenue recognition criteria consistent with our revenue recognition policy.

During the nine months ended September 30, 2022 and 2021, the Company incurred cost of revenue of $94,558,164 and $19,484,806, respectively, of which $62,751,055 and $0 were included in work in progress payable at September 30, 2022 and 2021, respectively.

Work in progress receivable is recorded when the Company has transferred services to the customers prior to receiving consideration and when the payment of consideration is contingent upon milestones performance obligation. The Company recognizes also the cost associated with reaching specific milestone in form of work in progress payable. As of September 30, 2022, the work in progress receivable was $139,727,247 and work in progress payable was $62,751,055, which were netted together as a contract asset work in progress receivable on the consolidated balance sheets in the amount of $76,976,192. As of December 31, 2021, the work in progress receivable was $48,400,253 and work in progress payable was $15,157,957, which were netted together as a contract asset work in progress receivable on the consolidated balance sheets in the amount of $33,242,296.

Income Taxes

The Company follows ASC 740, Income Taxes, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Statements of Operations in the period that includes the enactment date.

The Company follows section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”) with regards to uncertainty in income taxes. Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures.

Stock-based Compensation

The Company accounts for employee and non-employee stock-based compensation in accordance with ASC 718, Compensation—Stock Compensation, which requires all share-based payments to employees and non-employees, including grants of stock options, to be recognized in the financial statements based on the grant date fair values of the equity instruments issued, which is charged directly to compensation expense over the requisite service or vesting period.

Net Income (Loss) per Common Share

Net income (loss) per common share is computed pursuant to ASC 260, Earnings Per Share. Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period.

During the three and nine months ended September 30, 2022, the Company’s basic income per share was $0.01 and $0.06, respectively, and diluted income per share was $0.01 $0.06, respectively.

During the three and nine months ended September 30, 2021, the Company’s basic loss per share was $0.00 and $0.02, respectively, and diluted loss per share was also $0.00 and $0.02, respectively.

The Company’s diluted loss per share is the same as the basic loss per share for the same periods, as the inclusion of any potential shares would have had an anti-dilutive effect due to the Company generating a loss.

For the nine months ended September 30, 2022 and 2021, the Company’s potentially-dilutive instruments include convertible notes and associated accrued interest. The total amount of “if-converted” shares of 77,014,464 and 102,615,305, respectively, are comprised of the following:

☐	convertible notes with interest– 5,504,464 and 6,834,227, respectively
☐	common shares to be issued – 7,000,000 and 0, respectively
☐	warrants and options – 7,500,000 and 5,781,078, respectively
☐	convertible preferred shares Class B – 57,010,000 and 90,000,000, respectively

Diluted income (loss) per share is computed as follows:

	Nine Months Ended September 30, 2022		Nine Months Ended September 30, 2021
Numerator:
Net income (loss)	$	30,798,785	$	(7,343,074	)
(Gain) loss on change in fair value of derivatives		43,246		(1,285,675	)
Interest on convertible debt		766,770		866,477
Net income (loss) - diluted	$	31,608,801	$	(7,762,272	)
Denominator:
Weighted average common shares outstanding - basic		502,470,756		343,348,974
Effect of dilutive shares		77,014,464		102,615,305
Diluted		579,485,220		445,964,279
Net income (loss) per common share:
Basic	$	0.06	$	(0.02	)
Diluted	$	0.06	$	(0.02	)
	Three Months Ended September 30, 2022		Three Months Ended September 30, 2021
Numerator:
Net income (loss)	$	6,240,046	$	(1,685,655	)
(Gain) loss on change in fair value of derivatives		53,295		(359,009	)
Interest on convertible debt		164,573		540,450
Net income (loss) - diluted	$	6,457,914	$	(1,504,214	)
Denominator:
Weighted average common shares outstanding - basic		539,902,975		378,468,171
Effect of dilutive shares		77,014,464		102,615,305
Diluted		616,917,439		481,083,476
Net income (loss) per common share:
Basic	$	0.01	$	(0.00	)
Diluted	$	0.01	$	(0.00	)

Business Combinations

In accordance with ASC 805, Business Combinations, the Company accounts for all business combinations using the acquisition method of accounting. Under this method, assets and liabilities, including any remaining non-controlling interests, are recognized at fair value at the date of acquisition. The excess of the purchase price over the fair value of assets acquired, net of liabilities assumed, and non-controlling interests is recognized as goodwill. Certain adjustments to the assessed fair values of the assets, liabilities, or non-controlling interests made subsequent to the acquisition date, but within the measurement period, which is up to one year, are recorded as adjustments to goodwill. Any adjustments subsequent to the measurement period are recorded in income. Any cost or equity method interest that the Company holds in the acquired company prior to the acquisition is re-measured to fair value at acquisition with a resulting gain or loss recognized in income for the difference between fair value and the existing book value. Results of operations of the acquired entity are included in the Company’s results from the date of the acquisition onward and include amortization expense arising from acquired tangible and intangible assets.

Goodwill

The Company allocates goodwill to reporting units based on the reporting unit expected to benefit from the business combination. We evaluate our reporting units on an annual basis and, if necessary, reassign goodwill using a relative fair value allocation approach. Goodwill is tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. These events or circumstances could include a significant change in the business climate, legal factors, operating performance indicators, competition, or sale or disposition of a significant portion of a reporting unit.

Application of the goodwill impairment test requires judgment, including the identification of reporting units, assignment of assets and liabilities to reporting units, assignment of goodwill to reporting units, and determination of the fair value of each reporting unit. The fair value of each reporting unit is estimated primarily using a discounted cash flow methodology. This analysis requires significant judgments, including estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term rate of growth for our business, estimation of the useful life over which cash flows will occur, and determination of our weighted average cost of capital.

The estimates used to calculate the fair value of a reporting unit change from year to year based on operating results, market conditions, and other factors. Changes in these estimates and assumptions could materially affect the determination of fair value and goodwill impairment for each reporting unit.

During the nine months ended September 30, 2022 and 2021, there was no goodwill impairment recorded.

Impairment of Long-Lived Assets

Tangible and intangible assets (excluding goodwill) are assessed at each reporting date for indications that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Company makes an estimate of the asset’s recoverable amount. The asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less costs of disposal and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or a group of assets exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or the group of assets.

Derivative Financial Instruments

The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses the Black Scholes valuation model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.

Recent Accounting Pronouncements

In August 2020, the FASB issued ASU 2020-06, ASC Subtopic 470-20 “Debt—Debt with “Conversion and Other Options” and ASC subtopic 815-40 “Hedging—Contracts in Entity’s Own Equity”. The standard reduced the number of accounting models for convertible debt instruments and convertible preferred stock. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting; and, (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. The amendments in this update are effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company adopted this standard on January 1, 2021, but there was no resulting material impact on the financial statements.

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

Warrants and options

The Company has issued Common Stock warrants in connection with the execution of certain equity and debt financings. The fair value of warrants is determined by its fixed exercise price. During the three months ended September 30, 2022, the Company issued a warrant for 500,000 shares at the exercise price of $0.50 per share.

On September 22, 2022, the Company issued Nonqualified Stock Option Award Agreement for 25,000,000 shares of common stock over 3 years at the price of $0.1799 per share. 7,000,000 shares of common stock qualify for the year of 2022.

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GOING CONCERN

9 Months Ended

Sep. 30, 2022

GOING CONCERN

GOING CONCERN

NOTE 3 – GOING CONCERN

The accompanying consolidated financial statements have been prepared in accordance with U.S. GAAP, which contemplates the continuation of the Company as a going concern and realization of assets and the satisfaction of liabilities in the normal course of business. At September 30, 2022, the Company had cash of $480,141 and a working capital of $30,754,641. The Company has retained earnings of $30,378,933 at September 30, 2022, and accumulated deficit of $774,754 at December 31, 2021. The Company had a net income of $30,798,785 for the nine months ended September 30, 2022 and net loss of $7,343,074 for the nine months ended September 30, 2021. Net cash used in operating activities for the nine months ended September 30, 2022 was $5,609,232 and $1,322,756 for the nine months ended September 30, 2021. These factors among others present substantial doubt about the Company’s ability to continue as going concern. The Company’s ability to continue as a going concern is dependent upon its ability to repay or settle its current indebtedness, generate positive cash flow from an operating company, and/or raise capital through equity and debt financing or other means on desirable terms. If the Company is unable to obtain additional funds when they are required or if the funds cannot be obtained on favorable terms, management may be required to restructure the Company or cease operations. The consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.

The Company is aware that its current cash on hand will not be sufficient to fund its projected operating requirements through the month of December 2022 and is pursuing alternative opportunities to funding.

The Company intends to raise additional capital through private placements of debt and equity securities, but there can be no assurance that these funds will be available on terms acceptable to the Company, or will be sufficient to enable the Company to fully complete its development activities or sustain operations. If the Company is unable to raise sufficient additional funds, it will have to develop and implement a plan to further extend payables, reduce overhead, or scale back its current business plan until sufficient additional capital is raised to support further operations. There can be no assurance that such a plan will be successful.

The Company’s management does not know the full extent or foresee the impact COVID-19 has had on our business or our operations or its ability to carry out our plans. We will continue to monitor and follow this situation closely.

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PROPERTY AND EQUIPMENT

9 Months Ended

Sep. 30, 2022

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT

NOTE 4 – PROPERTY AND EQUIPMENT

Property and equipment stated at cost, less accumulated depreciation consisted of the following:

	September 30, 2022			December 31, 2021
Vehicles	$	2,427,093		$	2,660,504
Land		250,000			-
Computer Equipment		3,518			3,518
Machinery and Equipment		191,566			224,807
Leasehold Improvements		13,473			36,646
Office Equipment		146,391			146,391
Furniture and Equipment		142,494			137,231
		3,174,535			3,209,097
Less: accumulated depreciation		(2,170,519	)		(2,087,040	)
Property and equipment, net	$	1,004,016		$	1,122,057

Depreciation expense for fixed assets was $227,601 and $303,982, respectively, for the nine months ended September 30, 2022 and 2021. Depreciation expense for September 30, 2022 is offset by the elimination of Cornerstone Construction Team LLC assets and accumulated depreciation of $158,620. During the nine months ended September 30, 2022, there was a purchase of a Genie Scissorlift in the amount of $8,453 and computer equipment of $8,038 and there was an initial deposit of $250,000 towards purchase of a land from Opal Investments, Inc. (total purchase price $13,000,000) and proceeds from sale of $106,931. During the nine months ended September 30, 2021, there were purchases in the amount of $1,112,644 and fixed assets acquired through acquisitions in the amount of $178,749.

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OTHER ASSETS

9 Months Ended

Sep. 30, 2022

Other income (expense)

OTHER ASSETS

NOTE 5 – OTHER ASSETS

Prepaids and Other Current Assets

The balances as of September 30, 2022 and December 31, 2021 were $273,836 and $736,548, respectively, and included prepaid D&O insurance, general liability, prepaid interest on debt and workers’ compensation insurance in the amount of $117,372 and $701,023, respectively, prepaid rent in the amount of $9,464 and $0, respectively, and accrued interest receivable of $147,000 and $35,525 (Note 6), respectively.

Other Assets

The balances as of September 30, 2022 and December 31, 2021 were $154,390 and $265,071, respectively, and included trade mark, brand asset and website valued $123,194 and $207,320, respectively, reserves with Worth Technologies of $23,142 and $0, respectively, and security deposits of $8,054 and $57,751, respectively.

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NOTE RECEIVABLE

9 Months Ended

Sep. 30, 2022

NOTE RECEIVABLE

NOTE RECEIVABLE

NOTE 6 – NOTE RECEIVABLE

On October 5, 2021, the Company invested $4,200,000 in Arbiter Capital LLC pursuant to a promissory note receivable that carries 3.5% interest payable in full (principal and accrued interest) on the maturity date on September 30, 2022. The accrued interest receivable of $147,000 and $35,525 as of September 30, 2022 and December 31, 2021, respectively, is included in prepaid and other current assets on the balance sheet. As of September 30, 2022, the note with accrued interest is still outstanding. The note is in default as of October 1, 2022, and a demand letter for payment has been issued.

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RELATED PARTY TRANSACTIONS

9 Months Ended

Sep. 30, 2022

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

NOTE 7 – RELATED PARTY TRANSACTIONS

As of September 30, 2022 and December 31, 2021, amounts owed to related parties totaled $11,204,126 and $11,510,413, respectively. As of September 30, 2022, the amounts owed to related parties consisted of $7,000,000 owed to prior management, $654,573 for the Balance Authority acquisition, $2,000,000 for the Future Home Power acquisition, $744,985 for USA Solar Network LLC acquisition and $804,568 to current management for cash advances. As of December 31, 2021, $7,000,000 was owed to prior management, $855,769 to related entities, $2,000,000 for the Future Home Power acquisitions, $1,000,000 for USA Solar Network LLC acquisition and $654,644 to current management. The amounts due are non-interest bearing.

During the nine months ended September 30, 2022 and 2021, the Company recognized new obligations to related parties of $448,102 and $12,288,686, respectively and repaid $754,389 and $4,184,541, respectively, of amounts owed to related parties, respectively, for net decrease in Due to related parties of $306,287 and net increase of $8,104,145, respectively.

During the nine months ended September 30, 2022 and 2021, the Company issued 3,604,603 and 1,500,000 shares of common stock to directors and officers for compensation valued at $1,131,352 and $840,000, respectively and 20,000,000 and 25,133,334 shares to officers for acquisitions valued at $6,302,000 and $13,276,667, for the nine months ended September 30, 2022 and 2021, respectively.

During the nine months ended September 30, 2021, the Company repurchased 5,000,000 shares of preferred stock class B for $10,000,000 from former officer of the Company.

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DEBENTURE PAYABLE

9 Months Ended

Sep. 30, 2022

DEBENTURE PAYABLE

DEBENTURE PAYABLE

NOTE 8 – DEBENTURE PAYABLE

In January 2020, the Company received $2,400,000 for the issuance of a senior secured redeemable debenture. The debenture bears interest at 16% and matures 24 months after issuance. As of September 30, 2022 and December 31, 2021, no principal has been repaid, and accrued interest totals $635,807 and $363,318, respectively. The Company has not been able to make any payments on this debenture as investor’s bank account has been closed and there is no contact information available. As such there has been no provision for default terms upon the January 2022 maturity.

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CONVERTIBLE NOTES PAYABLE

9 Months Ended

Sep. 30, 2022

RELATED PARTY TRANSACTIONS

CONVERTIBLE NOTES PAYABLE

NOTE 9 – CONVERTIBLE NOTES PAYABLE

Convertible notes as of September 30, 2022:

Noteholder	Issuance Date	Maturity Date	Conversion Price		Interest Rate			Outstanding Principal Balance
RB Capital Partners, Inc.	2/18/2021	2/18/2022	$	3.00		5	%	$	1,744,800
RB Capital Partners, Inc.	2/26/2021	2/26/2022	$	3.00		5	%	$	4,500,000
Jefferson Street Capital	10/5/2021	10/5/2022	$	6.75		10	%	$	1,500,000
Jefferson Street Capital	11/18/2021	1/5/2022	$	6.75		5	%	$	500,000
Mammoth Corporation	1/19/2022	4/19/2022	$	0.50		0	%	$	600,000
Jefferson Street Capital	3/1/2022	12/1/2022	$	6.00		14	%	$	500,000
RB Capital Partners, Inc.	4/22/2022	4/22/2023	$	3.00		5	%	$	800,000
AJB Capital Investments LLC	9/9/2022	3/9/2023		*		12	%	$	600,000
TOTAL								$	10,744,800
UNAMORTIZED DEBT DISCOUNT									(60,000	)
NET CONVERTIBLE NOTES								$	10,684,800

*conversion price will be equal to the lowest trading price during the previous 20 trading day period either ending on the date of the conversion or the issue price.

During the nine months ended September 30, 2022, $2,782,275 in principal and $58,300 in interest was converted to 59,708,605 shares of common stock. On June 23, 2022, the Company entered into Buyout Agreement with Granite Global Value Investments LTD, where the Company agreed to pay $14,000,000 for all outstanding convertible notes between the parties (the “New Note”) upon the Company receiving funding from third parties or investors or until they have the funds available to pay the New Note. The aggregate principal of the convertible notes was $12,668,535, plus accrued interest of $62,532, for a total of $12,731,067 (collectively the “Old Note”). The terms and cash flows of the New Note are significantly different than the terms and cash flows of the Old Note, as the New Note is non-interest bearing, and has no maturity date or conversion feature. As such, note modification has been accounted for as an extinguishment of the Old Note and issuance of the “New note”, and the difference between the Old Note and New Note of $1,268,933 has been recorded as loss on modification of debt. On September 9, 2022, the Company received $540,000 from AJB Capital Investments LLC.

Currently most of above convertible notes are in default but there are no penalties initiated or associated with the notes in default.

Convertible notes as of December 31, 2021:

Noteholder	Issuance Date	Maturity Date	Conversion Price		Interest Rate			Outstanding Principal Balance
Granite Global Value	1/19/2021	1/19/2022	*			1	%	$	155,886
Granite Global Value	1/27/2021	1/27/2022	$	2.70		1	%	$	1,035,250
RB Capital Partners, Inc.	2/8/2021	2/8/2022	$	3.00		5	%	$	1,000,000
RB Capital Partners, Inc.	2/18/2021	2/18/2022	$	3.00		5	%	$	3,500,000
Granite Global Value	2/23/2021	2/23/2022	$	6.75		1	%	$	1,035,250
RB Capital Partners, Inc.	2/26/2021	2/26/2022	$	3.00		5	%	$	4,500,000
Granite Global Value	3/18/2021	3/18/2022	$	5.45		1	%	$	3,282,500
Granite Global Value	6/1/2021	6/1/2022	$	2.50		10	%	$	5,500,000
Granite Global Value	8/30/2021	8/30/2022	$	0.35		5	%	$	1,680,000
Jefferson Street Capital	10/5/2021	10/5/2022	$	6.75		10	%	$	1,500,000
Jefferson Street Capital	11/18/2021	1/15/2022	$	6.75		5	%	$	500,000
TOTAL								$	23,688,886
UNAMORTIZED DEBT DISCOUNT									-
NET CONVERTIBLE NOTES								$	23,688,886

*Conversion price based on volume weighted average price during previous trading day.

The Company recognized amortization expense related to the debt discount of $6,724 and $186,146 for the nine months ended September 30, 2022 and 2021, respectively, which is included in interest expense in the statements of operations. Interest expense on convertible notes totaled $766,770 and $866,477 for the nine months ended September 30, 2022 and 2021, respectively.

During the nine months ended September 30, 2022 and 2021, the Company received proceeds of $1,900,000 and $21,055,610, respectively.

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DERIVATIVE LIABILITY

9 Months Ended

Sep. 30, 2022

DERIVATIVE LIABILITY

DERIVATIVE LIABILITY

NOTE 10 – DERIVATIVE LIABILITIES

The Company analyzed the conversion option for derivative accounting consideration under ASC 815, “Derivatives and Hedging,” and determined that the variable conversion option within one of the Company’s convertible notes should be classified as a liability since the conversion option becomes effective at issuance resulting in there being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options. On June 23, 2022, the underlying convertible note was extinguished, thereby eliminating the derivative liability. On September 9, 2022, the Company entered into a new convertible note agreement for $600,000 where conversion price is equal the lower of the lowest trading price during the previous twenty (20) trading day period either (i) ending on date of Conversion; or (ii) the Issue Date. The new derivative liability was calculated using the Black-Scholes option-pricing model.

The Company determined our derivative liabilities to be a Level 3 fair value measurement and used the Black-Scholes pricing model to calculate the fair value. The Black-Scholes model requires six basic data inputs: the exercise or strike price, time to expiration, the risk-free interest rate, the current stock price, the estimated volatility of the stock price in the future, and the dividend rate. Changes to these inputs could produce a significantly higher or lower fair value measurement. The fair value of each derivative is estimated using the Black-Scholes valuation model.

The following table summarizes the derivative liabilities included in the balance sheet at September 30, 2022 and December 31, 2021 and their activity for the nine months ended September 30, 2022 and 2021:

Fair Value Measurements Using Significant Observable Inputs (Level 3)
Balance – December 31, 2020	$	1,560,851
Reduction of new derivative liabilities from payoff of convertible notes and conversion of convertible notes to common shares		(230,456	)
Addition of new derivative liabilities		162,610
Amortization of debt discount on convertible debt		67,846
Gain on change in fair value of derivative liabilities		(1,285,675	)
Balance – September 30, 2021	$	275,176
Balance - December 31, 2021	$	10,049
Elimination of derivative liabilities due to extinguishment of underlying convertible debt		(10,049	)
Addition of new derivative liabilities		53,295
Balance – September 30, 2022	$	53,295

The table below shows the Black-Scholes option-pricing model inputs used by the Company to value the derivative liability at each measurement date:

	Nine months ended			Year ended
	September 30, 2022			December 31, 2021
Expected term	0.6 years			0.21 -0.49 years
Expected average volatility		156	%	138% - 177%
Expected dividend yield		-			-
Risk-free interest rate	3.2 – 4.05			0.08 – 0.11

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NOTES PAYABLE

9 Months Ended

Sep. 30, 2022

RELATED PARTY TRANSACTIONS

NOTES PAYABLE

NOTE 11 – NOTES PAYABLE    

As of September 30, 2022, the Company owed notes payable totaling $24,829,198 as follows:

· $888,889 loan from TVT2.0 LLC with a 36-week term and weekly payments of $60,278 with 40% interest rate.

· $147,304 SBA loan with 3.75% interest rate and payable by May 16, 2050 and $175,772 line of credit with 5% interest.

· $162,115 in loans from On-Deck with 52 weekly payments of $11,413 with 44% interest rate.

· $555,104 vehicle financings from prior years with total monthly payment of $17,628, 2-3% interest, 2024 maturity dates.

· $6,375,014 in PPP loans. All PPP loans were received in May 2021 payable within 2 years and bearing interest rate of 1% annually.

· $1,000,000 bridge loan from RB Capital Partners, Inc. with 10% interest payable by December 31, 2022.

· $275,000 promissory note with Large Investment Group, Inc. with 10% interest and payable by August 10, 2022.

· $150,000 loan from Stephanie Hooper with 0% interest rate and payable within 12 months. 150,000 shares of common stock were subsequently issued in August 2022 as a commitment fee valued at $35,265 recorded as interest expense

· $14,000,000 note with Granite Global Value Investments LTD payable upon the Company receiving funding (see Note 12).

· $500,000 loan from Agile Capital Funding with weekly payments of $36,000 and 15% interest rate.

Current portion of the notes at September 30, 2022 was $21,955,667 and non-current portion was $2,273,531.

During the nine months ended September 30, 2022, the Company received proceeds pursuant to a $1,550,000 loan with TVT 2.0 LLC, $430,000 loan from On-Deck Capital, $1,500,000 from RB Capital Partners, Inc., $150,000 from Stephanie Hooper, $275,000 from Large Investment Group, Inc., $700,000 from Agile Capital Funding, $450,000 with CapitalNow LLC, and $397,105 from LOC. The Company also refinanced convertible debt into $14,000,000 in notes payable with Granite Global Value Investments LTD (Note 9).

The Company made repayments to TVT 2.0 LLC of $661,111, On-Deck Capital of $90,000, Agile Capital Funding of $200,000, CapitalNow LLC of $450,000, RB Capital Partners LLC of $500,000, $396,974 in LOC and vehicle financing of $464,160.

During the nine months ended September 30, 2021, the Company entered into several loan in participation of the PPP loan program in the amount of $6,375,014 as well as obtained a line of credit from the SBA in the amount of $438,204 and acquired debt of $1,007,535 with acquired entities. The Company made repayments of $98,958 to Echo Investments, $41,102 to On-Deck Capital, $118,830 to Silverline Services, $1,000,000 to SBA and vehicle financing of $582,328. The Company’s PPP loans of $1,018,130 were forgiven during the nine months ended September 30, 2021.

As of December 31, 2021, the Company owed notes payable totaling $7,539,471 as follows:

· $156,883 in SBA loan with 3.75% interest rate and payable by May 16, 2050.

· $653,750 vehicle financings from prior years with total monthly payment of $11,612, 2-3%, 2023 maturity dates. Current portion as of December 31, 2021 was $110,088

· $272,714 revolving line of credit with a 5% interest rate and no maturity date.

· $6,456,124 in PPP loans. All PPP loans were received in May 2021 payable within 2 years and bearing interest rate of 1% annually.

Current portion of the notes at December 31, 2021 was $5,112,773 and non-current portion was $2,426,698.

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LEASES

9 Months Ended

Sep. 30, 2022

LEASES

LEASES

NOTE 12 – LEASES

As of September 30, 2022 and December 31, 2021, the Company reported Right-of-Use (“ROU”) assets under operating leases for six office premises, and corresponding lease liabilities. Related party operating lease ROU assets and corresponding liability at September 30, 2022 was $1,547,325. The Company entered into four new lease agreements during the nine months ended September 30, 2022. During the nine months ended September 30, 2022 and 2021, the Company recorded $149,177 and $41,435, respectively, of lease expense. The lease components are as follows:

	As of September 30, 2022		As of December 31, 2021
Operating lease ROU assets	$	2,888,171	$	1,646,049
Current portion of operating lease liabilities		504,981		115,623
Noncurrent portion of operating lease liabilities		2,383,190		1,530,426
Total operating lease liabilities	$	2,888,171	$	1,646,049

Information associated with the measurement of our remaining operating lease obligations as of September 30, 2022 is as follows:

Weighted-average remaining lease term	10.36 years
Weighted-average discount rate		4.32	%

The Company has the following lease obligations for the years ended December 31:

2022 (remaining three months)	$	181,661
2023		523,106
2024		502,289
2025		366,161
2026		288,005
Thereafter		1,423,847
Total lease payments		3,285,069
Less: imputed interest		(396,898	)
Present value of lease liabilities	$	2,888,171

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COMMON STOCK

9 Months Ended

Sep. 30, 2022

COMMON STOCK

COMMON STOCK

NOTE 13 – COMMON STOCK

The Company is authorized to issue 900,000,000 shares of common stock par value $0.00001. Effective October 31, 2022, the Company increased its authorized shares from 650,000,000 to 900,000,000. Following is a detail of Common Stock transactions during the nine months ended September 30, 2022 and 2021:

Nine months ended September 30, 2022

· Issued 2,200,000 shares of common stock for services of $613,350.

· Issued 59,708,605 shares of common stock for debt conversion of $2,840,575.

· Issued 15,366,539 shares of common stock for compensation of $2,647,066.

· Issued 38,739,242 shares of common stock for prior acquisition valued $12,011,850.

· Issued 3,315,000 shares of common stock for $514,040 for common stock payable and $80,500 cash.

· Received and cancelled 45,000,000 shares of common stock valued $36,450,000 for rescission agreement with Cornerstone Construction Team LLC.

Nine months ended September 30, 2021

· Issued 1,568,090 shares of common stock for services of $645,150.

· Issued 90,633,008 shares of common stock for debt conversion of $1,398,287.

· Issued 306,148 shares of common stock for cashless warrant exercise and 16,479,564 share for warrant exercise of $16,480.

· Issued 2,000,000 shares of common stock for total cash proceeds of $140,000.

· Issued 1,850,000 shares of common stock for compensation of $283,500.

· Issued 82,500,000 shares of common stock for acquisitions valued at $63,532,400.

· Repurchased and cancelled 200,000 shares of common stock for $200,000.

Warrants and options

During the nine months ended September 30, 2022, the Company issued a warrant for 500,000 shares of common stock in connection with some financing, at the exercise price of $0.1799 per share. The warrant expense of $147,500 was recorded on Company’s statement of operations as an interest expense.

During the nine months ended September 30, 2022, the Company issued a stock option award for 25,000,000 shares of common stock, of which 7,000,000 shares were granted for the year of 2022, at the exercise price of $0.1799 per share. The option expense of $1,259,300 was recorded on Company’s statement of operations as salaries and wages.

The following summarizes the Company’s warrant and option activity:

Date	Number of shares			Weighted average exercise price
Outstanding - 12/31/2020		42,844,881			0.0747
Exercised		(42,844,881	)	$	0.078
Outstanding – 9/30/2021		-			-
Outstanding - 12/31/2021		-			-
Issued		7,500,000			0.20
Outstanding – 9/30/2022		7,500,000			0.20

The Company used the Black-Scholes pricing model to calculate the fair value of warrants on the grant date. The Black-Scholes model requires basic data inputs: the exercise or strike price, time to expiration, the current stock price and the estimated volatility of the stock price in the future. Changes to these inputs could produce a significantly higher or lower fair value measurement. The fair values of the warrants and options are estimated using the Black Scholes valuation model as follows:

Warrant

	Nine months ended
	September 30, 2022
Expected term	5 years
Expected average volatility		156	%
Expected dividend yield		-
Risk-free interest rate	3.2 – 4.05

Stock option

	Nine months ended
	September 30, 2022
Expected term	0.4 years
Expected average volatility		78	%
Expected dividend yield		-
Risk-free interest rate		3.33

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PREFERRED STOCK

9 Months Ended

Sep. 30, 2022

COMMON STOCK

PREFERRED STOCK

NOTE 14 – PREFERRED STOCK

The Company is authorized to issue up to 5,000,000 shares of Class A preferred stock, Par value $0.00001, 20,000,000 shares of Class B preferred stock, par value $0.00001, 1 share of Class C preferred stock, par value $0.00001, and 40 shares of Class D preferred stock, par value $0.00001. As of September 30, 2022 and December 31, 2021, there are 2,500,000 shares of Class A preferred stock issued and outstanding. As of September 30, 2022 and December 31, 2021, there are 5,701,000 and 8,000,000 shares of Class B preferred stock issued and outstanding, respectively. As of September 30, 2022 and December 31, 2021, there is 1 share of Class C and 40 shares of Class D preferred stock issued and outstanding.

Class A preferred shares:

☐	Each share of Class A preferred stock has voting rights equal to 10,000 shares of common stock.
☐	No conversion is permitted.
☐	Holders are entitled, in the event of any voluntary liquidation or dissolution, to receive payment or distribution of preferential amount before any payments or distributions are received by any class of common stock.
☐	Holders are not entitled to receive dividends.

Class B preferred shares:

☐	If the Board of Directors declares a dividend payable, these shares are entitled to receive cumulative dividends.
☐	In the event of liquidation, holders are entitled to receive a distributive share of the Company’s assets and funds.
☐	One share of Series B preferred stock is convertible into 10 shares of common stock.

Class C preferred share:

☐	Holders are entitled to receive dividends in the amount of 49% of net annual profit of Enerev LLC paid annually 60 days closing year end.
☐	In case of liquidation of Enerev, LLC, the holders of Series C shares are entitled to receive their share of 49% of the net proceeds.
☐	Holders have no voting rights.

Class D preferred shares:

☐	Holders are entitled to receive dividends in the amount of 40% of net annual profit of Kinetic Investments, Inc. dba Future Home Power paid annually 60 days closing year end.
☐	In case of liquidation of Kinetic Investments, Inc. dba Future Home Power, the holders of shares Series D are entitled to receive their share of 40% of the net proceeds.
☐	Holders have no voting rights.

The Class B, C, and D preferred stocks issued during the year ended December 31, 2021 were valued by an independent valuation specialist using a market approach.

Following is a detail of Preferred Stock transactions during the nine months ended September 30, 2022 and 2021:

Nine months ended September 30, 2022

1,499,000 shares of preferred stock class B were converted into 14,990,000 shares of common stock.

800,000 shares of preferred stock class B were retired and cancelled.

Nine months ended September 30, 2021

1,000,000 shares of preferred stock class B were issued for acquisition valued at $4,870,000.

5,000,000 shares of preferred stock class B were repurchased for $10,000,000 and retired.

1 share of preferred stock class C was issued for acquisition.

40 shares of preferred stock class D were issued for acquisition.

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NON-CONTROLLING INTEREST

9 Months Ended

Sep. 30, 2022

NON-CONTROLLING INTEREST

NON-CONTROLLING INTEREST

NOTE 15 – NON-CONTROLLING INTEREST

	September 30, 2022			December 31, 2021
Net loss Subsidiary	$	(887,255	)		(151,217	)
Net loss attributable to the non-controlling interest		532,353			90,730
Net loss affecting the Company		(354,902	)		(60,487	)
Accumulated losses		(1,038,472	)		(151,217	)
Accumulated losses attributable to the non-controlling interest		623,083			90,730
Accumulated losses affecting the Company		(415,389	)		(2,218,929	)
Net equity non-controlling interest	$	(354,902	)		(60,487	)

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ACQUISITIONS

9 Months Ended

Sep. 30, 2022

ACQUISITIONS

ACQUISITIONS

NOTE 16 – ACQUISITIONS

During the nine months ended September 30, 2022, the Company did not acquire any companies.

During the nine months ended September 30, 2021, the Company acquired 100% of the membership units of Enerev LLC, Cornerstone Construction Team LLC, Balance Authority LLC, Kinetic Investments, Inc., USA Solar Networks LLC and SunUp Solar LLC, Renovation Roofing Inc. and 60% of Pacific Lighting Management, Inc., as follows:

Enerev LLC

On April 28, 2021, the Company completed the acquisition, effective January 21, 2021, of 100% of the membership interest in Enerev LLC (“Enerev”). As of this date Enerev became a wholly owned subsidiary of the Company and became a consolidated entity under Solar Integrated Roofing Corporation (the “Company”). Enerev is a solar energy solutions provider to residential and commercial properties in Southern California with capabilities of installing solar panels. As a result of the acquisition of Enerev the Company is expected to expand installation efforts as well as expansion through known marketing and sales channels of Enerev.

The following table summarizes the consideration transferred to acquire Enerev and the amounts of identified assets acquired and liabilities assumed at the acquisition date.

Fair value of consideration transferred:
Cash:	$	200,000
Common shares:	$	2,678,500
Series B preferred shares	$	4,870,000
Total	$	7,748,500

The 1,000,000 shares of series B preferred shares issued had a total fair value of $4,870,000 and the 1 share of series C preferred stock issued had a value of $0, both of which valuations were based on an independent expert valuation and price allocation using a market approach. The 5,500,000 shares of common stock issued had a fair value of $2,678,500 based on the January 21, 2021 acquisition date stock price. The series B preferred shares were issued on July 1, 2021.

Recognized amounts of identifiable assets acquired, and liabilities assumed:

Total assets:
Accounts receivable	$	40,384
Liabilities:	None
Goodwill:	$	7,708,116

The goodwill is attributable to the workforce of the acquired business and the significant synergies expected to arise from the acquisition of the installation and sales force of Enerev. The goodwill is not deductible for tax purposes. All Enerev’s goodwill was recorded in the Company’s intangible assets as a non-current asset and recorded on the balance sheet of the Company. The carrying value of the Company’s goodwill is reviewed annually for impairment by management of the Company. No impairment of Enerev goodwill was noted during the nine months ended September 30, 2022 or 2021.

Cornerstone Construction Team LLC

On March 1, 2021 the Company completed the acquisition of 100% of the membership interest in Cornerstone Construction Team LLC (“Cornerstone”). As of this date Cornerstone Construction Team LLC became a wholly owned subsidiary of the Company and became a consolidated entity under Solar Integrated Roofing Corporation (the “Company”). Cornerstone is a general construction company operating in the United States, particularly within the Midwest and East Coast. As a result of the acquisition the Company had expected to expand the Company’s solar efforts into these other regions of the United States.

The following table summarizes the consideration transferred to acquire Cornerstone and the amounts of identified assets acquired and liabilities assumed at the acquisition date.

Fair value of consideration transferred:
Cash:	$	3,000,000
Common Shares:	$	36,450,000
Total	$	39,450,000

The Company issued 45,000,000 amount of common shares that had a total fair value of $36,900,000 based on the closing market price of $0.81 per share on April 1, 2021, the acquisition date.

Recognized amounts of identifiable assets acquired, and liabilities assumed:

Assets:
Cash	$	176,403
Accounts receivable		959,423
Other current assets		1,928,743
Fixed assets		197,565
Total Assets:	$	3,262,134
Liabilities:
Accounts payable and accrued expenses	$	946,810
Notes payable		647,663
Customer deposits		1,054,692
Total Liabilities:	$	2,649,165
Goodwill:	$	38,837,031

The goodwill was attributable to the workforce of the acquired business and the significant synergies expected to arise after the Company’s acquisition of Cornerstone. The goodwill is not deductible for tax purposes. All of Cornerstone’s goodwill was recorded in the Company’s intangible assets as a non-current asset and recorded on the balance sheet of the Company. The carrying value of the Company’s goodwill is reviewed annually for impairment by management of the Company and was impaired at 100% at December 31, 2021 due to pending lawsuit that effected termination of the agreement between both parties effective May 31, 2022. On August 29, 2022, the Company received and cancelled the previously issued 45,000,000 shares of common stock issued in connection with the merger to the entity’s previous ownership group. Also on August 29, 2022, the Company issued in settlement of the related legal proceedings 8,000,000 in common stock valued at $1,748,000 from the stock price on the day of legal settlement. All Cornerstone assets and liabilities were eliminated from the Company’s consolidated financial statements on May 31, 2022.

Pacific Lighting Management, Inc.

On March 16, 2021, the Company acquired Pacific Lighting Management, Inc. (“PlemCo”), which is a provider of energy and water conservation and renewable energy design, consulting and installation services to businesses of all sizes throughout the US. The overall purchase price of 60% of PlemCo was $1,500,000 in cash. In consolidation the overall net assets of the Company amounted to $273,000, with approximately $1.2 million assigned to Goodwill.

Fair value of consideration transferred:
Cash:	$	1,500,000
Total	$	1,500,000

Recognized amounts of identifiable assets acquired, and liabilities assumed:

Assets:
Cash	$	549,847
Accounts receivable		14,537
Fixed assets		2,440
Total Assets:	$	566,824
Liabilities:
Accounts payable and accrued expenses	$	52,800
Notes payable		241,442
Total Liabilities:	$	294,242
Goodwill:	$	1,227,418

The goodwill is attributable to the workforce of the acquired business and the significant synergies expected to arise from the acquisition of the installation and sales force of PlemCo. The goodwill is not deductible for tax purposes. All PlemCo’s goodwill was recorded in the Company’s intangible assets as a non-current asset and recorded on the balance sheet of the Company. The carrying value of the Company’s goodwill is reviewed annually for impairment by management of the Company. No impairment of PlemCo goodwill was noted during the nine months ended September 30, 2022 or 2021.

Balance Authority LLC

On April 28, 2021, the Company completed the acquisition of 100% of the membership interest in Balance Authority LLC (“Balance”). As of this date Balance Authority LLC became a wholly owned subsidiary of the Company and became a consolidated entity under Solar Integrated Roofing Corporation (the “Company”). Balance is a business consulting management company that provides supplemental organizational and managerial services to companies in the scientific, management and technical services industry. As a result of the acquisition the Company is expected to centralize administrative and supplemental services throughout Solar Integrated Roofing Corporation and its’ subsidiaries.

The following table summarizes the consideration transferred to acquire Balance and the amounts of identified assets acquired and liabilities assumed at the acquisition date.

Fair value of consideration transferred:
Cash:	$	2,700,000
Common Shares:	$	6,950,000
Total	$	9,650,000

The Company issued 10,000,000 shares of common shares that had a total fair value of $6,950,000 based on the closing market price of $0.69 per share on April 28, 2021, the acquisition date. $1,500,000 cash was paid at the closing. Two additional payments of $600,000 each were due six and twelve months from acquisition date. During the nine months ended September 30, 2022, $545,427 was paid towards the first $600,000 payment due. The remaining balance together with second payment of $600,000 totaling $654,473 is outstanding in the form of related party note payable.

Recognized amounts of identifiable assets acquired, and liabilities assumed:

Assets:
Cash	$	131,188
Accounts receivable		38,237
Fixed assets		45,715
Investment		23,783
Total Assets:	$	238,923
Liabilities:
Accrued expenses	$	121,344
Notes payable		555,891
Total Liabilities:	$	677,235
Goodwill:	$	10,088,312

The goodwill is attributable to the workforce of the acquired business and the significant synergies expected to arise after the Company’s acquisition of Balance. The goodwill is not deductible for tax purposes. All of Balance’s goodwill was recorded in the Company’s intangible assets as a non-current asset and recorded on the balance sheet of the Company. The carrying value of the Company’s goodwill is reviewed annually for impairment by management of the Company. No impairment of Balance was noted during the nine months ended September 30, 2022 or 2021.

Kinetic Investments, Inc. dba Future Home Power

On June 1, 2021, the Company completed the acquisition of 100% of the membership interest in Future Home Power (“FHP”). As of this date FHP became a wholly owned subsidiary of the Company and became a consolidated entity under Solar Integrated Roofing Corporation (the “Company”). FHP specializes in the sales of residential solar panels, roofing repair and construction as well as battery storage – partnering with local installers to finalize on-site installation. As a result of the acquisition of FHP the Company is expected to expand efforts in sales and increase the sales force and outreach of the Company through the numerous sales associates FHP employs.

The following table summarizes the consideration transferred to acquire FHP and the amounts of identified assets acquired and liabilities assumed at the acquisition date.

Fair value of consideration transferred:
Cash:	$	5,200,000
Common Shares:	$	23,548,850
Total	$	28,748,850

The Company also issued 40 shares of preferred stock class D, valued at $0 in the acquisition of FHP. The 51,000,000 shares of common shares had a total fair value of $20,236,900 based on the closing market price of $0.40 per share on June 1, 2021, the acquisition date. As of December 31, 2021, 29,000,000 of the 51,000,000 shares of common stock had not yet been issued and have been included in stock payable in the amount of $9,137,900. Out of $5,200,000 cash, $3,200,000 was paid and $2,000,000 is accrued as related party transaction. During the nine months ended September 30, 2021, $3,200,000 was paid in cash. During the nine months ended September 30, 2022, additional 9,739,242 shares of common stock were issued valued $2,873,950.

Recognized amounts of identifiable assets acquired, and liabilities assumed:

Assets:	None
Liabilities:
Accounts payable and accrued liabilities	$	561,022
Goodwill:	$	28,089,422

The goodwill is attributable to the workforce of the acquired business and the significant synergies expected to arise after the Company’s acquisition of FHP. The goodwill is not deductible for tax purposes. All of FHP’s goodwill was recorded in the Company’s intangible assets as a non-current asset and recorded on the balance sheet of the Company. The carrying value of the Company’s goodwill is reviewed annually for impairment by management of the Company. No impairment of the FHP goodwill was noted during the nine months ended September 30, 2022 or 2021.

USA Solar Networks LLC

On June 30, 2021, the Company completed the acquisition of 60% of the membership interest in USA Solar Networks LLC (“USA Solar”) and additional 40% on October 6, 2021. As of June 30, 2021, USA Solar became a consolidated entity under Solar Integrated Roofing Corporation (the “Company”), and on October 6, 2021, became a wholly owned subsidiary of the Company. USA Solar helps customers install the best available solar energy or Electric Vehicle (“EV”) charging system by comparing local installers and financing options. USA Solar also works on large scale solar fields, micro-grids, commercial solar systems and renewable energy solutions. As a result of the acquisition of USA Solar the Company is expected to expand within the commercial solar space and increase sales from EV installations and other renewable energy opportunities.

The following table summarizes the consideration transferred to acquire USA Solar and the amounts of identified assets acquired and liabilities assumed at the acquisition date.

Fair value of consideration transferred:
Cash:	$	1,200,000
Common Shares:	$	8,706,300
Total	$	9,906,300

The Company issued 12,000,000 shares of common shares that had a total fair value of $6,054,000 based on the closing market price of $0.5045 per share on the June 30, 2021 acquisition date. As of December 31, 2021, 7,000,000 shares to be issued for additional 40% of USA Solar were included in stock payable in the amount of $2,652,300 based on closing market price of $0.38 per share on October 6, 2021. The Company paid $200,000 cash on October 6, 2021, $255,015 during the nine months ended September 30, 2022. $744,985 and $1,000,000 is due and included in due to related parties at September 30, 2022 and December 31, 2021, respectively.

Recognized amounts of identifiable assets acquired, and liabilities assumed:

Assets:	None
Liabilities:
Note payable	$	53,131
Goodwill:	$	9,959,431

The goodwill is attributable to the workforce of the acquired business and the significant synergies expected to arise after the Company’s acquisition of USA Solar. The goodwill is not deductible for tax purposes. All of USA Solar’s goodwill was recorded in the Company’s intangible assets as a non-current asset and recorded on the balance sheet of the Company. The carrying value of the Company’s goodwill is reviewed annually for impairment by management of the Company. No impairment of the USA Solar goodwill was noted during the nine months ended September 30, 2022 or 2021.

SunUp Solar LLC

On June 30, 2021, the Company completed the acquisition of 100% of the membership interest in SunUp Solar LLC (“SunUp”). As of this date SunUp became a wholly owned subsidiary of the Company and became a consolidated entity under Solar Integrated Roofing Corp. (the “Company”). SunUp offers solar education and resources for consumers looking to invest in solar powered energy for the homes and vehicles. As a result of the acquisition of SunUp the Company is expected to expand selling efforts and increase the sales force and outreach of the Company through the numerous sales associates SunUp employs.

The following table summarizes the consideration transferred to acquire SunUp and the amounts of identified assets acquired and liabilities assumed at the acquisition date.

Fair value of consideration transferred:
Cash:	$	200,000
Common Shares:	$	100,900
Total	$	300,900

The Company issued 200,000 shares of common shares had a total fair value of $100,900 based on the closing market price of $0.51 per share on June 30, 2021, the acquisition date. During the nine months ended September 30, 2021 no cash was paid in consideration to the acquisition of SunUp Solar. $200,000 was paid subsequently during 2021.

Recognized amounts of identifiable assets acquired, and liabilities assumed:

Assets:	None
Liabilities:	None
Goodwill:	$	300,900

The goodwill is attributable to the workforce of the acquired business and the significant synergies expected to arise after the Company’s acquisition of SunUp. The goodwill is not deductible for tax purposes. All of SunUp’s goodwill was recorded in the Company’s intangible assets as a non-current asset and recorded on the balance sheet of the Company. The carrying value of the Company’s goodwill is reviewed annually for impairment by management of the Company.No impairment of the SunUp goodwill was noted during the nine months ended September 30, 2022 or 2021.

Renovation Roofing, Inc.

On July 3, 2021, the Company completed the acquisition of 100% of the membership interest in Renovation Roofing, Inc. (“Renovate”), whereby Renovate became a wholly owned subsidiary of the Company. Renovate is a full-service roofing company with licenses to install and construct various types of roofing projects. As a result of the acquisition of Renovate the Company is expected to expand installation efforts in the residential solar panels the Company sells.

The acquired business contributed revenue of $506,610 and net earnings from operations of $103,269 to the Company from the period from July 3, 2021 through December 31, 2021.

The following table summarizes the consideration transferred to acquire Renovation Roofing, Inc. and the amounts of identified assets acquired and liabilities assumed at the acquisition date.

Fair value of consideration transferred:
Cash	$	50,000
Common Shares	$	252,250
Total	$	302,250

The Company issued 500,000 shares of common shares had a total fair value of $252,250 based on the closing market price of $0.51 per share on July 3, 2021, the acquisition date.

Recognized amounts of identifiable assets acquired, and liabilities assumed:

Assets:
Cash	$	137,222
Accounts receivable		83,837
Total assets:	$	221,059
Liabilities	None
Goodwill	$	81,191

The goodwill is attributable to the workforce of the acquired business and the significant synergies expected to arise after the Company’s acquisition of Renovate. The goodwill is not deductible for tax purposes and was recorded as an intangible asset on the Company’s balance sheet. The carrying value of the Company’s goodwill is reviewed annually for impairment by management of the Company, and no impairment of the Renovation Roofing Inc. goodwill was noted during the nine months ended September 30, 2022 or 2021.

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COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2022

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

NOTE 17 – COMMITMENTS AND CONTINGENCIES

Litigation

In the normal course of business, the Company may be involved in legal proceedings, claims and assessments arising in the ordinary course of business. Such matters are subject to many uncertainties, and outcomes are not predictable with assurance. Legal fees for such matters are expensed as incurred and we accrue for adverse outcomes as they become probable and estimable.

Below is the summary of current legal proceedings:

1.	United Stated District Court, District of Arizona Case No. 2:21-cv-01076-JAT styled as SinglePoint Direct Solar, LLC v. Pablo Diaz Curiel, et al. -- This is a pending lawsuit in the United States District of Arizona initiated in June 2021. The principal parties are SinglePoint Inc. (“SING”), SinglePoint Direct (“SDS”), Greg Lambrecht, Corey Lambrecht, William Ralston, SIRC, Pablo Diaz (“Diaz”), and USA Solar Networks, LLC (“USN”). This case concerns the business relationship between SING and Diaz regarding SDS, which was formed after Diaz entered into an Asset Purchase Agreement with SING in February 2019. The litigation first started with Diaz’s lawsuit against SING and SDS (Case No. 2:21-cv-00989-MSB), which was eventually consolidated with this case (Case No. 2:21-cv-01076-JAT). While the majority of claims brought against SIRC and USA Solar are pleaded generally against all defendants, SING’s specific claims against SIRC and USA Solar arise out of SDS’s alleged confidential and proprietary information, trade secrets, and other assets for use in their business operations. SING has alleged two claims against SIRC: false designation of origin, and misappropriation of trade secrets. In or around August 2021, SING sought to enjoin SIRC, Diaz, USN and others, however, the court denied SING’s request finding that, inter alia, SING’s claims were unlikely to succeed on the merits. SIRC is contesting the claims.
2.	Superior Court of California, County of San Diego Case Nos. 30-z0a I-0 Iz34T0s-cU-BC-ClC and 37 -2022-000 1 7 1 7 7 -C U -BC-CTL styled as Heather Griffin, et al. vs. SIRC, et al. This lawsuit was initiated in the Superior Court of California, County of Orange in December 2021. The principal parties are SIRC, David Massey, Narrate, LLC (“Narrate”), Heather Griffin (“Griffin”), and Josiah Carroll (“Carroll”). The claims factually arise out of Heather Griffin and Josiah Carroll’s sale of Narrate LLC to SIRC, their subsequent executive employment agreement, and their requested relief for damages for an alleged breach by SIRC. All claims were dismissed for improper venue and transferred to Superior Court of California, County of San Diego. SIRC is contesting the claims. The matter is in very early pleading stages.
3.	Eighth Judicial District Court of Nevada Case No: A-22-852172-C styled as Milholland Family Trust LP v. Solar Integrated Roofing Corp. -- This lawsuit was initiated in the Eighth Judicial District Court of Nevada on May 5, 2022. The principal parties are SIRC and Milholland Family Trust, LP (“MFT”). This lawsuit pertains to an alleged breach of contract between SIRC and MFT for approximately $7 million dollars. SIRC contested the claims, and in or around September 2, 2022, a settlement was reached between the parties. The amount is accrued as a liability at September 30, 2022 and December 31, 2021.
4.	SIRC v. Pablo Diaz Curiel – This is a pending lawsuit in the Superior Court of California, County of San Diego (Case No. 37-2022-00036984-CU-FR-CTL). SIRC initiated suit on September 15, 2022, alleging, among other things, that Diaz fraudulently induced SIRC into acquiring a 60% interest in USA Solar Networks LLC. SIRC obtained a temporary restraining order against Diaz preventing him from selling the 12 million shares of SIRC stock he received through the acquisition. SIRC intends to amend the complaint to seek damages related to the acquisition of the remaining 40% interest in USA Solar as well. In the suit, SIRC seeks rescission and/or monetary damages in excess of $40 million. The matter is still in the pleading stage.

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Subsequent Events

9 Months Ended

Sep. 30, 2022

Subsequent Events

Subsequent Events

NOTE 18 – SUBSEQUENT EVENTS

In accordance with ASC 855-10 management has performed an evaluation of subsequent events through November 14, 2022, the date that the financial statements were available to be issued, and did not, other than what is disclosed in the below, identify any further subsequent events requiring disclosure:

October 5, 2022 – 37,000,000 shares of common stock issued to David Massey for conversion of 3,700,000 shares of Class B preferred stock.

October 18,2022 – 1,925,134 shares of common stock issued to consultant at the price of $0.187 per share for a total of $360,000 for services.

October 18, 2022 – 630,000 shares of common stock to employees as compensation for a price of $0.287 per share valued $180,810.

October 26, 2022 – 2,717,351 shares of common stock issued to Continuation Capital Inc. for consulting services at a price of $0.18 per share valued $489,123.

On October 26, 2022 – 552,792 shares of common stock issued for consulting services at the price of $0.18 per share valued $99,503.

October 26, 2022 – 1,111,112 shares of common stock issued to an investor for cash at the price of $0.09 per share valued $100,000.

October 26, 2022 – 3,500,000 shares of preferred stock class B issued to debt holder at the price of $1.70 per share for consideration valued $5,950,000.

October 31, 2022 - authorized shares of common stock increased from 650,000,000 shares to 900,000,000 shares.

November 2, 2022 - 3,500,000 shares of preferred stock clad B converted into 35,000,000 shares of common stock.

November 15, 2022 – 2,800,000 shares of common stock issued for compensation for services at the price of $0.17 per share valued $476,000

November 17, 2022 – 1,344,327 shares of common stock issued for debt at the price of $0.11 per share valued $150,000.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Sep. 30, 2022

Summary of significant accounting policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”), including the instructions to Form 10-Q and Regulation S-X. Certain information and note disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”), have been condensed or omitted from these statements pursuant to such rules and regulations and, accordingly, they do not include all the information and notes necessary for comprehensive financial statements and should be read in conjunction with our audited consolidated financial statements for the year ended December 31, 2021. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included. 

Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of Solar Integrated Roofing Corporation and its wholly-owned subsidiaries: Secure Roofing and Solar Inc., Narrate LLC, McKay Roofing Company, Inc., Milholland Electric, Inc., Montross Companies, Inc., Approved Home Pros, LLC, Enerev LLC, Cornerstone Construction Team, LLC, Balance Authority, LLC, Kinetic Investments Inc. dba Future Home power, USA Solar Network LLC, SunUp Solar LLC and Renovation Roofing, Inc., which are included in the financial statements of the Company as of their respective acquisition dates. Pacific Lighting Management, Inc. was the only subsidiary acquired at 60% so the Company includes non-controlling interest in its consolidated financial statements. During the nine months ended September 30, 2021, the Company acquired Enerev LLC, Cornerstone Construction Team LLC, 60% of Pacific Lighting Management, Inc., Balance Authority, LLC, Kinetic Investments, Inc. dba Future Home Power, USA Solar Network LLC and SunUp Solar LLC. All intercompany accounts have been eliminated upon consolidation.

During the nine months ended September 30, 2022, the Company did not acquire any entities. During the nine months ending September 30, 2022, the Company eliminated and rescinded the agreement regarding Cornerstone Construction Team, LLC as of May 31, 2022. The Company has consolidated the operations for the entity up until the recission date of May 31, 2022. The Company received the previously issued 45,000,000 shares of common stock issued in connection with the merger to the entity’s previous ownership group. The Company also issued 8,000,000 in common stock valued at $1,748,000 from the stock price on the day of legal settlement. All Cornerstone assets and liabilities were eliminated from the Company’s consolidated financial statements on May 31, 2022.

During the nine months ended September 30, 2021, the Company acquired Enerev LLC, Cornerstone Construction Team LLC, 60% of Pacific Lighting Management, Inc., Balance Authority LLC, Kinetic Investments, Inc. dba Future Home Power, USA Solar Network LLC, SunUp Solar LLC and Renovation Roofing, Inc.

Use of Estimates

The preparation of financial statements in conformity with U.S. 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include the estimated useful lives of property and equipment, allowance for doubtful accounts, impairment of long-lived assets, and the valuation of debt and equity transactions. Actual results could differ from those estimates.

Concentrations of Credit Risk

The Company maintains its cash in bank deposit accounts, the balances of which at times may exceed federally insured limits. The Company continually monitors its banking relationships and consequently has not experienced any losses in its accounts. As of September 30, 2022 and December 31, 2021, management believes the Company is not exposed to any significant credit risk on cash.

Cash Equivalents

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cash and cash equivalents were $480,141 as of September 30, 2022 and $1,124,533 as of December 31, 2021.

Accounts Receivable

Management reviews accounts receivable periodically to determine if any receivables will potentially be uncollectible. Management’s evaluation includes several factors including the aging of the account balances, a review of significant past due accounts, economic conditions, and our historical write- off experience, net of recoveries. The Company includes any accounts receivable balances that are determined to be uncollectible, along with a general reserve, in its allowance for doubtful accounts. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. The Company’s allowance for doubtful accounts was $340,874 and $253,652 as of September 30, 2022 and December 31, 2021, respectively, and no individual customer owed in excess of 10% of the trade accounts receivable balances of $5,511,696 or $3,652,176, respectively.

Inventory

The Company’s inventory is valued at the lower of cost (the purchase price) or market. Inventory costs are determined based on the average cost basis. A reserve for slow-moving and potentially obsolete inventories is recorded as of each balance sheet date and total inventories are presented net of that reserve. Inventory consists primarily of solar panels. As of September 30, 2022, management evaluated all held inventory for obsolete or slow-moving parts and did not identify any. 

Property and Equipment

Property and equipment are carried at cost less amortization and depreciation. Major betterments that extend the useful lives of assets are also capitalized. Normal maintenance and repairs are charged to expense as incurred. When assets are sold or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in operations. Property and equipment consist of Vehicles, Computer Equipment, Machinery and Equipment, Furniture and Equipment which are depreciated on a straight-line basis over their expected useful lives as follows.

Vehicles	5 years
Computer Equipment	5 years
Machinery and Equipment	5 years
Furniture & Equipment	5 years

Leases

The Company follows the Financial Accounting Standards Board’s (the “FASB”) Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), and additional ASUs issued to clarify and update the guidance in ASU 2016-02 (collectively, the “new leases standard”), which modifies lease accounting for lessees to increase transparency and comparability by recording lease assets and liabilities for operating leases and disclosing key information about leasing arrangements. The new lease standard requires an entity to recognize a right-of-use asset and a lease liability for virtually all leases. The Company elected to exclude from its balance sheets recognition of leases having a term of 12 months or less (“short-term leases”). Lease expense is recognized on a straight-line basis over the lease term. See Note 12 for further information regarding the Company’s leases.

Advertising

The Company conducts advertising for the promotion of its services. In accordance with ASC 720-35, advertising costs are charged to operations when incurred. The Company incurred $445,828 in marketing and advertising expenses during the nine months ended September 30, 2022 and $575,038 during the nine months ended September 30, 2021.

Fair Value of Financial Instruments

Accounting Standards Codification subtopic 825-10, Financial Instruments (“ASC 825-10”) requires disclosure of the fair value of certain financial instruments. The carrying value of cash and cash equivalents, accounts payable and accrued liabilities, and short-term borrowings, as reflected in the balance sheets, approximate fair value because of the short-term maturity of these instruments. All other significant financial assets, financial liabilities and equity instruments of the Company are either recognized or disclosed in the financial statements together with other information relevant for making a reasonable assessment of future cash flows, interest rate risk and credit risk. Where practicable the fair values of financial assets and financial liabilities have been determined and disclosed; otherwise only available information pertinent to fair value has been disclosed.

The Company follows Accounting Standards Codification subtopic 820-10, Fair Value Measurements and Disclosures (“ASC 820-10”) and Accounting Standards Codification subtopic 825-10, Financial Instruments (“ASC 825-10”), which permits entities to choose to measure many financial instruments and certain other items at fair value. ASC 820 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by ASC 820 are described below:

Level 1: Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.

Level 2: Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.

Level 3: Pricing inputs that are generally unobservable inputs and not corroborated by market data.

The carrying value of the Company’s current assets and liabilities are deemed to be fair market value due to the short-term nature of these instruments.  The Company did not have any Level 2 financial instruments as of September 30, 2022 or December 31, 2021, while the Company’s Level 3 derivative liabilities are detailed in Note 10.

Revenue Recognition

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers, when satisfying the performance obligation of the associated contract that reflects the consideration expected to be received based on the terms of the contract.

Solar Integrated Roofing Corporation has chosen to utilize the “Output Method” of ASC 606 as a means of recognizing revenue in accordance with performance obligation milestones within their executed contracts. The Output Method as defined in ASC 606 are incremental goods or services that are instrumental and necessary to fulfill the complete project that have been verified to be completed. These outputs are the result of processes applied to inputs in a business. In other words, the Output Method measures results achieved and value that is passed on to the customer in relation to the contract as a whole. In implementation, the Company has determined the incremental milestones of a project ranging from contract inception to project completion, with each progressing milestone providing additional services to the end client. Per the guidelines of ASC 606, the Company then tracks the progress toward completion of the contract by measuring outputs to date relative to total estimated outputs needed to satisfy the performance obligation.

As the different subsidiaries of the Company encompass many different business models, there exists different metrics for each of the subsidiaries in regard to intervals/milestones qualifying a specific level of revenue recognition. The business types are as follows:

☐	Roofing Companies
☐	Sales Organizations
☐	Claims Management Companies
☐	Solar Installation Companies
☐	Alternative Energy Companies
☐	Service Organizations

ASC 606 has five general components which formulate the basis of the revenue process. In observation of the Output Method, the five components and brief explanations as to how each applies to the revenue recognition model the Company has adopted are as follows:

(i) Identify the contract, or contracts, with a customer.

A contract is an agreement or purchase order between two or more parties that creates enforceable rights and obligations. In evaluating the contract, the Company analyzes the customer’s intent and ability to pay the amount of promised consideration (credit risk) and considers the probability of collecting substantially all of the consideration.

(ii) Identify the performance obligations in the contract.

At a contract’s inception, the Company assesses the goods or services promised in a contract with a customer and identifies the performance obligations. The main performance obligations are the provisions of the following:

☐	Project Specifics
	o	Site Visit
	o	Engineering Design
	o	Permitting
	o	Utility Interconnection, if applicable
	o	Project Installation
	o	Project Completion

(iii)	Determine the transaction price
	The transaction price is the amount of consideration to which the Company is entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties. When a contract provides a customer with payment terms of more than a year, the Company considers whether those terms create variability in the transaction price and whether a significant financing component exists. As of September 30, 2022, the Company has not provided payment terms of more than a year.
(iv)	Allocate the transaction price to the performance obligations in the contract.
	The Company performs an allocation of the transaction price to each separate performance obligation, known as milestones. The allocated milestone payments are based upon multiple factors:
	☐	Hard costs for materials needed to fulfill the current milestone.
	☐	Soft costs upon the milestone being achieved (sales commissions, labor costs)
	☐	Overhead and incidentals to be allocated at the specific milestones of a project.
(v)	Recognize revenue when, or as, the Company satisfies a performance obligation.
	The Company recognizes revenue incrementally upon its fulfillment of each specific performance obligation milestone as outlined in the underlying contract utilizing the Output Method.

During the nine months ended September 30, 2022 and 2021, the Company derived its revenues from the following:

- residential solar panels sales and installation: approximately $60.1 million and $11.7 million, respectively commercial solar: approximately $74.6 million and $0, respectively

- roofing constructions: approximately $13.7 million and $12.5 million, respectively

- EV charging stations: approximately $2.1 million and $0.5 million, respectively

The Company analyses whether gross sales as the principal, or net sales as the agent, should be recorded. Since the Company assumes all risk of loss, has control over establishing price, and has control over the related costs associated with earning revenues, the Company is the principal, and as such has recorded all revenues at the gross price.

Concentration of Revenue by Customer

During the nine months ended September 30, 2022 and 2021, no individual customers comprised above 10% of total revenue recognized.

Concentration of Revenue by Segment during the nine months ended September 30, 2022 and 2021:

- residential solar sales and installation: approximately 40% and 47.5%, respectively commercial solar: approximately 50% and 0%, respectively

- roofing construction: approximately 9% and 50.5%, respectively

- EV charging stations: approximately 1% and 2%, respectively

Segments and Disaggregated Revenue

The Company is a single source solar power and roofing system installation company operating and specializing in commercial and residential properties across the United States. The Company’s operations are conducted in specific reportable segments: roofing construction, residential solar, commercial solar & microgrids, battery back-up & EV charging and project financing. The Company defines its segments because the operations are distinctly different from other areas within the Company as the Company has roofing contracts, solar installations (residential / commercial / microgrids), battery back-up and EV charging installations as well as finance and maintenance. All of these areas are supported by our sales, marketing and general and administrative teams. The Company’s Chief Operating Officer regularly reviews these segments to align resources and analyze performance.

All of the Company’s segments operate within the United States as the Company does not have any foreign sales or operations at this time. The Company’s roofing segment is dedicated to services and products serving roofing construction, design and maintenance. Construction of roofing projects and the design of roofing installations as well as the construction of the roofing projects all fall under this segment. The Company’s residential solar segment serves the installation of solar systems within residential properties selling directly to consumers. The Company’s commercial solar segments sells to larger renewal energy companies and to corporations seeking solar installations to offset utility expenses (i.e. urban housing, commercial properties, apartment buildings, etc.). The Company’s EV charging services are centered around providing solutions for EV charging platforms through the planning, sourcing and installation of these platforms for businesses and other agencies. Our financing efforts are done in support of these operating activities.

The Company measures the results of the segments by the following among other attributes: gross margin, operating income (which includes overhead corporate expense allocations), costs of sales and revenue. The Company revises the measurement of the reporting segments operating income, gross margin and corporate overhead allocations from time to time as these metrics are regularly reviewed by the Chief Operating Officer. Information on the Company’s operating segments, including the reconciliation to income is provided in the following table.

	Solar Residential			Solar Commercial		Roofing Construction			EV Charging			Consolidated
Nine Months Ended
September 30, 2021
Revenue	$	11,735,260		$	-	$	12,481,941		$	457,606		$	24,674,807
Cost of sales		9,575,946			-		9,654,975			253,885			19,484,806
Gross margin		2,159,314			-		2,826,966			203,721			5,190,001
Operating (loss)		(4,006,196	)		-		(4,638,906	)		(143,116	)		(8,788,218	)
Nine Months Ended
September 30, 2022
Revenue	$	60,150,528		$	74,590,743	$	13,679,707		$	2,120,557		$	150,541,535
Cost of sales		41,911,157			42,278,932		8,549,924			1,818,151			94,558,164
Gross margin		18,239,371			32,311,811		5,129,783			302,406			55,983,371
Operating Income (loss)		16,176,064			20,816,516		(1,537,903	)		(899,369	)		34,555,308

	Solar Residential			Solar Commercial		Roofing Construction			EV Charging			Consolidated
Three Months Ended
September 30, 2021
Revenue	$	6,758,884		$	-	$	6,220,147		$	245,728		$	13,224,759
Cost of sales		5,008,450			-		3,300,787			109,103			8,418,340
Gross margin		1,750,434			-		2,919,360			136,625			4,806,419
Operating (loss)		(1,225,839	)		-		(69,174	)		(75,354	)		(1,370,367	)
Three Months Ended
September 30, 2022
Revenue	$	10,356,762		$	41,891,554	$	4,791,303		$	227,841		$	57,267,460
Cost of sales		9,367,592			30,770,051		2,346,818			586,971			43,071,432
Gross margin		989,170			11,121,503		2,444,485			(359,130	)		14,196,028
Operating Income (loss)		1,896,023			5,699,027		628,979			(852,978	)		7,371,051

As of September 30, 2022, approximately $291.6 million of revenue is expected to be recognized from remaining performance obligations for solar commercial contracts. The Company expects to recognize revenue on these remaining performance obligations over the next 12 months. The Company has elected to accrue installation and construction activities until the customer obtains control of the solar commercial project. Accordingly, the Company will accrue all related construction and installation costs (Work in progress accounts payable) and recognize Work in progress accounts receivable as revenue and Work in progress accounts payable as cost of sales once the project has been completed. The Company generally has payment terms with its customers of one year or less and has elected the practical expedient applicable to such contracts not to consider the time value of money over a longer period of time.

Cost of Revenue

Cost of revenue consists primarily of costs related to raw materials, freight and delivery, product warranty, and personnel costs (salaries, bonuses, benefits, and stock-based compensation). Personnel costs in cost of revenue includes both direct labor costs as well as costs attributable to any individuals whose activities relate to the procurement, installment and delivery of the finished product and services. Deferred cost of revenue results from the timing differences between the costs incurred in advance of the satisfaction of all revenue recognition criteria consistent with our revenue recognition policy.

During the nine months ended September 30, 2022 and 2021, the Company incurred cost of revenue of $94,558,164 and $19,484,806, respectively, of which $62,751,055 and $0 were included in work in progress payable at September 30, 2022 and 2021, respectively.

Work in progress receivable is recorded when the Company has transferred services to the customers prior to receiving consideration and when the payment of consideration is contingent upon milestones performance obligation. The Company recognizes also the cost associated with reaching specific milestone in form of work in progress payable. As of September 30, 2022, the work in progress receivable was $139,727,247 and work in progress payable was $62,751,055, which were netted together as a contract asset work in progress receivable on the consolidated balance sheets in the amount of $76,976,192. As of December 31, 2021, the work in progress receivable was $48,400,253 and work in progress payable was $15,157,957, which were netted together as a contract asset work in progress receivable on the consolidated balance sheets in the amount of $33,242,296.

Income Taxes

The Company follows ASC 740, Income Taxes, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Statements of Operations in the period that includes the enactment date.

The Company follows section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”) with regards to uncertainty in income taxes. Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures.

Stock-based Compensation

The Company accounts for employee and non-employee stock-based compensation in accordance with ASC 718, Compensation—Stock Compensation, which requires all share-based payments to employees and non-employees, including grants of stock options, to be recognized in the financial statements based on the grant date fair values of the equity instruments issued, which is charged directly to compensation expense over the requisite service or vesting period.

Net Income (Loss) per Common Share

Net income (loss) per common share is computed pursuant to ASC 260, Earnings Per Share. Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period.

During the three and nine months ended September 30, 2022, the Company’s basic income per share was $0.01 and $0.06, respectively, and diluted income per share was $0.01 $0.06, respectively.

During the three and nine months ended September 30, 2021, the Company’s basic loss per share was $0.00 and $0.02, respectively, and diluted loss per share was also $0.00 and $0.02, respectively.

The Company’s diluted loss per share is the same as the basic loss per share for the same periods, as the inclusion of any potential shares would have had an anti-dilutive effect due to the Company generating a loss.

For the nine months ended September 30, 2022 and 2021, the Company’s potentially-dilutive instruments include convertible notes and associated accrued interest. The total amount of “if-converted” shares of 77,014,464 and 102,615,305, respectively, are comprised of the following:

☐	convertible notes with interest– 5,504,464 and 6,834,227, respectively
☐	common shares to be issued – 7,000,000 and 0, respectively
☐	warrants and options – 7,500,000 and 5,781,078, respectively
☐	convertible preferred shares Class B – 57,010,000 and 90,000,000, respectively

Business Combinations

In accordance with ASC 805, Business Combinations, the Company accounts for all business combinations using the acquisition method of accounting. Under this method, assets and liabilities, including any remaining non-controlling interests, are recognized at fair value at the date of acquisition. The excess of the purchase price over the fair value of assets acquired, net of liabilities assumed, and non-controlling interests is recognized as goodwill. Certain adjustments to the assessed fair values of the assets, liabilities, or non-controlling interests made subsequent to the acquisition date, but within the measurement period, which is up to one year, are recorded as adjustments to goodwill. Any adjustments subsequent to the measurement period are recorded in income. Any cost or equity method interest that the Company holds in the acquired company prior to the acquisition is re-measured to fair value at acquisition with a resulting gain or loss recognized in income for the difference between fair value and the existing book value. Results of operations of the acquired entity are included in the Company’s results from the date of the acquisition onward and include amortization expense arising from acquired tangible and intangible assets.

Goodwill

The Company allocates goodwill to reporting units based on the reporting unit expected to benefit from the business combination. We evaluate our reporting units on an annual basis and, if necessary, reassign goodwill using a relative fair value allocation approach. Goodwill is tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. These events or circumstances could include a significant change in the business climate, legal factors, operating performance indicators, competition, or sale or disposition of a significant portion of a reporting unit.

Application of the goodwill impairment test requires judgment, including the identification of reporting units, assignment of assets and liabilities to reporting units, assignment of goodwill to reporting units, and determination of the fair value of each reporting unit. The fair value of each reporting unit is estimated primarily using a discounted cash flow methodology. This analysis requires significant judgments, including estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term rate of growth for our business, estimation of the useful life over which cash flows will occur, and determination of our weighted average cost of capital.

The estimates used to calculate the fair value of a reporting unit change from year to year based on operating results, market conditions, and other factors. Changes in these estimates and assumptions could materially affect the determination of fair value and goodwill impairment for each reporting unit.

During the nine months ended September 30, 2022 and 2021, there was no goodwill impairment recorded.

Impairment of Long-Lived Assets

Tangible and intangible assets (excluding goodwill) are assessed at each reporting date for indications that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Company makes an estimate of the asset’s recoverable amount. The asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less costs of disposal and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or a group of assets exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or the group of assets.

Derivative Financial Instruments

The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses the Black Scholes valuation model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.

Recent Accounting Pronouncements

In August 2020, the FASB issued ASU 2020-06, ASC Subtopic 470-20 “Debt—Debt with “Conversion and Other Options” and ASC subtopic 815-40 “Hedging—Contracts in Entity’s Own Equity”. The standard reduced the number of accounting models for convertible debt instruments and convertible preferred stock. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting; and, (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. The amendments in this update are effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company adopted this standard on January 1, 2021, but there was no resulting material impact on the financial statements.

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

Warrants and options

The Company has issued Common Stock warrants in connection with the execution of certain equity and debt financings. The fair value of warrants is determined by its fixed exercise price. During the three months ended September 30, 2022, the Company issued a warrant for 500,000 shares at the exercise price of $0.50 per share.

On September 22, 2022, the Company issued Nonqualified Stock Option Award Agreement for 25,000,000 shares of common stock over 3 years at the price of $0.1799 per share. 7,000,000 shares of common stock qualify for the year of 2022.

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Summary of significant accounting policies (Tables)

9 Months Ended

Sep. 30, 2022

Summary of significant accounting policies

Property and Equipment

Vehicles	5 years
Computer Equipment	5 years
Machinery and Equipment	5 years
Furniture & Equipment	5 years

Reconciliation of income provided

	Solar Residential			Solar Commercial		Roofing Construction			EV Charging			Consolidated
Nine Months Ended
September 30, 2021
Revenue	$	11,735,260		$	-	$	12,481,941		$	457,606		$	24,674,807
Cost of sales		9,575,946			-		9,654,975			253,885			19,484,806
Gross margin		2,159,314			-		2,826,966			203,721			5,190,001
Operating (loss)		(4,006,196	)		-		(4,638,906	)		(143,116	)		(8,788,218	)
Nine Months Ended
September 30, 2022
Revenue	$	60,150,528		$	74,590,743	$	13,679,707		$	2,120,557		$	150,541,535
Cost of sales		41,911,157			42,278,932		8,549,924			1,818,151			94,558,164
Gross margin		18,239,371			32,311,811		5,129,783			302,406			55,983,371
Operating Income (loss)		16,176,064			20,816,516		(1,537,903	)		(899,369	)		34,555,308

	Solar Residential			Solar Commercial		Roofing Construction			EV Charging			Consolidated
Three Months Ended
September 30, 2021
Revenue	$	6,758,884		$	-	$	6,220,147		$	245,728		$	13,224,759
Cost of sales		5,008,450			-		3,300,787			109,103			8,418,340
Gross margin		1,750,434			-		2,919,360			136,625			4,806,419
Operating (loss)		(1,225,839	)		-		(69,174	)		(75,354	)		(1,370,367	)
Three Months Ended
September 30, 2022
Revenue	$	10,356,762		$	41,891,554	$	4,791,303		$	227,841		$	57,267,460
Cost of sales		9,367,592			30,770,051		2,346,818			586,971			43,071,432
Gross margin		989,170			11,121,503		2,444,485			(359,130	)		14,196,028
Operating Income (loss)		1,896,023			5,699,027		628,979			(852,978	)		7,371,051

Net Income (Loss) per Common Share

	Nine Months Ended September 30, 2022		Nine Months Ended September 30, 2021
Numerator:
Net income (loss)	$	30,798,785	$	(7,343,074	)
(Gain) loss on change in fair value of derivatives		43,246		(1,285,675	)
Interest on convertible debt		766,770		866,477
Net income (loss) - diluted	$	31,608,801	$	(7,762,272	)
Denominator:
Weighted average common shares outstanding - basic		502,470,756		343,348,974
Effect of dilutive shares		77,014,464		102,615,305
Diluted		579,485,220		445,964,279
Net income (loss) per common share:
Basic	$	0.06	$	(0.02	)
Diluted	$	0.06	$	(0.02	)
	Three Months Ended September 30, 2022		Three Months Ended September 30, 2021
Numerator:
Net income (loss)	$	6,240,046	$	(1,685,655	)
(Gain) loss on change in fair value of derivatives		53,295		(359,009	)
Interest on convertible debt		164,573		540,450
Net income (loss) - diluted	$	6,457,914	$	(1,504,214	)
Denominator:
Weighted average common shares outstanding - basic		539,902,975		378,468,171
Effect of dilutive shares		77,014,464		102,615,305
Diluted		616,917,439		481,083,476
Net income (loss) per common share:
Basic	$	0.01	$	(0.00	)
Diluted	$	0.01	$	(0.00	)

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PROPERTY AND EQUIPMENT (Tables)

9 Months Ended

Sep. 30, 2022

PROPERTY AND EQUIPMENT

Schedule of PROPERTY AND EQUIPMENT

	September 30, 2022			December 31, 2021
Vehicles	$	2,427,093		$	2,660,504
Land		250,000			-
Computer Equipment		3,518			3,518
Machinery and Equipment		191,566			224,807
Leasehold Improvements		13,473			36,646
Office Equipment		146,391			146,391
Furniture and Equipment		142,494			137,231
		3,174,535			3,209,097
Less: accumulated depreciation		(2,170,519	)		(2,087,040	)
Property and equipment, net	$	1,004,016		$	1,122,057

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CONVERTIBLE NOTES PAYABLE (Tables)

9 Months Ended

Sep. 30, 2022

RELATED PARTY TRANSACTIONS

Schedule of convertible note payable

Noteholder	Issuance Date	Maturity Date	Conversion Price		Interest Rate			Outstanding Principal Balance
RB Capital Partners, Inc.	2/18/2021	2/18/2022	$	3.00		5	%	$	1,744,800
RB Capital Partners, Inc.	2/26/2021	2/26/2022	$	3.00		5	%	$	4,500,000
Jefferson Street Capital	10/5/2021	10/5/2022	$	6.75		10	%	$	1,500,000
Jefferson Street Capital	11/18/2021	1/5/2022	$	6.75		5	%	$	500,000
Mammoth Corporation	1/19/2022	4/19/2022	$	0.50		0	%	$	600,000
Jefferson Street Capital	3/1/2022	12/1/2022	$	6.00		14	%	$	500,000
RB Capital Partners, Inc.	4/22/2022	4/22/2023	$	3.00		5	%	$	800,000
AJB Capital Investments LLC	9/9/2022	3/9/2023		*		12	%	$	600,000
TOTAL								$	10,744,800
UNAMORTIZED DEBT DISCOUNT									(60,000	)
NET CONVERTIBLE NOTES								$	10,684,800

Noteholder	Issuance Date	Maturity Date	Conversion Price		Interest Rate			Outstanding Principal Balance
Granite Global Value	1/19/2021	1/19/2022	*			1	%	$	155,886
Granite Global Value	1/27/2021	1/27/2022	$	2.70		1	%	$	1,035,250
RB Capital Partners, Inc.	2/8/2021	2/8/2022	$	3.00		5	%	$	1,000,000
RB Capital Partners, Inc.	2/18/2021	2/18/2022	$	3.00		5	%	$	3,500,000
Granite Global Value	2/23/2021	2/23/2022	$	6.75		1	%	$	1,035,250
RB Capital Partners, Inc.	2/26/2021	2/26/2022	$	3.00		5	%	$	4,500,000
Granite Global Value	3/18/2021	3/18/2022	$	5.45		1	%	$	3,282,500
Granite Global Value	6/1/2021	6/1/2022	$	2.50		10	%	$	5,500,000
Granite Global Value	8/30/2021	8/30/2022	$	0.35		5	%	$	1,680,000
Jefferson Street Capital	10/5/2021	10/5/2022	$	6.75		10	%	$	1,500,000
Jefferson Street Capital	11/18/2021	1/15/2022	$	6.75		5	%	$	500,000
TOTAL								$	23,688,886
UNAMORTIZED DEBT DISCOUNT									-
NET CONVERTIBLE NOTES								$	23,688,886

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DERIVATIVE LIABILITY (Tables)

9 Months Ended

Sep. 30, 2022

DERIVATIVE LIABILITY

Summary of derivatives liabilities

Fair Value Measurements Using Significant Observable Inputs (Level 3)
Balance – December 31, 2020	$	1,560,851
Reduction of new derivative liabilities from payoff of convertible notes and conversion of convertible notes to common shares		(230,456	)
Addition of new derivative liabilities		162,610
Amortization of debt discount on convertible debt		67,846
Gain on change in fair value of derivative liabilities		(1,285,675	)
Balance – September 30, 2021	$	275,176
Balance - December 31, 2021	$	10,049
Elimination of derivative liabilities due to extinguishment of underlying convertible debt		(10,049	)
Addition of new derivative liabilities		53,295
Balance – September 30, 2022	$	53,295

Summary of Black-Scholes option-pricing model

	Nine months ended			Year ended
	September 30, 2022			December 31, 2021
Expected term	0.6 years			0.21 -0.49 years
Expected average volatility		156	%	138% - 177%
Expected dividend yield		-			-
Risk-free interest rate	3.2 – 4.05			0.08 – 0.11

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LEASES (Tables)

9 Months Ended

Sep. 30, 2022

LEASES

Schedule of lease components

	As of September 30, 2022		As of December 31, 2021
Operating lease ROU assets	$	2,888,171	$	1,646,049
Current portion of operating lease liabilities		504,981		115,623
Noncurrent portion of operating lease liabilities		2,383,190		1,530,426
Total operating lease liabilities	$	2,888,171	$	1,646,049

Summary of lease obligations

Weighted-average remaining lease term	10.36 years
Weighted-average discount rate		4.32	%

2022 (remaining three months)	$	181,661
2023		523,106
2024		502,289
2025		366,161
2026		288,005
Thereafter		1,423,847
Total lease payments		3,285,069
Less: imputed interest		(396,898	)
Present value of lease liabilities	$	2,888,171

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COMMON STOCK (Tables)

9 Months Ended

Sep. 30, 2022

COMMON STOCK

Summary of Company's warrant activity

Date	Number of shares			Weighted average exercise price
Outstanding - 12/31/2020		42,844,881			0.0747
Exercised		(42,844,881	)	$	0.078
Outstanding – 9/30/2021		-			-
Outstanding - 12/31/2021		-			-
Issued		7,500,000			0.20
Outstanding – 9/30/2022		7,500,000			0.20

Schedule of fair value of options

	Nine months ended
	September 30, 2022
Expected term	0.4 years
Expected average volatility		78	%
Expected dividend yield		-
Risk-free interest rate		3.33

Schedule of fair value of warrant

	Nine months ended
	September 30, 2022
Expected term	5 years
Expected average volatility		156	%
Expected dividend yield		-
Risk-free interest rate	3.2 – 4.05

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NON-CONTROLLING INTEREST (Tables)

9 Months Ended

Sep. 30, 2022

NON-CONTROLLING INTEREST

Schedule of Non controlling interest

	September 30, 2022			December 31, 2021
Net loss Subsidiary	$	(887,255	)		(151,217	)
Net loss attributable to the non-controlling interest		532,353			90,730
Net loss affecting the Company		(354,902	)		(60,487	)
Accumulated losses		(1,038,472	)		(151,217	)
Accumulated losses attributable to the non-controlling interest		623,083			90,730
Accumulated losses affecting the Company		(415,389	)		(2,218,929	)
Net equity non-controlling interest	$	(354,902	)		(60,487	)

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ACQUISITIONS (Tables)

9 Months Ended

Sep. 30, 2022

ACQUISITIONS

Acquisitions of Enerev LLC

Fair value of consideration transferred:
Cash:	$	200,000
Common shares:	$	2,678,500
Series B preferred shares	$	4,870,000
Total	$	7,748,500

Total assets:
Accounts receivable	$	40,384
Liabilities:	None
Goodwill:	$	7,708,116

Acquisitions of Cornerstone Construction Team LLC

Fair value of consideration transferred:
Cash:	$	3,000,000
Common Shares:	$	36,450,000
Total	$	39,450,000

Assets:
Cash	$	176,403
Accounts receivable		959,423
Other current assets		1,928,743
Fixed assets		197,565
Total Assets:	$	3,262,134
Liabilities:
Accounts payable and accrued expenses	$	946,810
Notes payable		647,663
Customer deposits		1,054,692
Total Liabilities:	$	2,649,165
Goodwill:	$	38,837,031

Acquisitions of Pacific Lighting Management, Inc

Fair value of consideration transferred:
Cash:	$	1,500,000
Total	$	1,500,000

Assets:
Cash	$	549,847
Accounts receivable		14,537
Fixed assets		2,440
Total Assets:	$	566,824
Liabilities:
Accounts payable and accrued expenses	$	52,800
Notes payable		241,442
Total Liabilities:	$	294,242
Goodwill:	$	1,227,418

Acquisitions of Balance Authority LLC

Fair value of consideration transferred:
Cash:	$	2,700,000
Common Shares:	$	6,950,000
Total	$	9,650,000

Assets:
Cash	$	131,188
Accounts receivable		38,237
Fixed assets		45,715
Investment		23,783
Total Assets:	$	238,923
Liabilities:
Accrued expenses	$	121,344
Notes payable		555,891
Total Liabilities:	$	677,235
Goodwill:	$	10,088,312

Acquisitions of Kinetic Investments, Inc. dba Future Home Power

Fair value of consideration transferred:
Cash:	$	5,200,000
Common Shares:	$	23,548,850
Total	$	28,748,850

Assets:	None
Liabilities:
Accounts payable and accrued liabilities	$	561,022
Goodwill:	$	28,089,422

Acquisitions of USA Solar Networks LLC

Fair value of consideration transferred:
Cash:	$	1,200,000
Common Shares:	$	8,706,300
Total	$	9,906,300

Assets:	None
Liabilities:
Note payable	$	53,131
Goodwill:	$	9,959,431

Acquisitions of SunUp Solar LLC

Fair value of consideration transferred:
Cash:	$	200,000
Common Shares:	$	100,900
Total	$	300,900

Assets:	None
Liabilities:	None
Goodwill:	$	300,900

Acquisitions of Renovation Roofing, Inc

Fair value of consideration transferred:
Cash	$	50,000
Common Shares	$	252,250
Total	$	302,250

Assets:
Cash	$	137,222
Accounts receivable		83,837
Total assets:	$	221,059
Liabilities	None
Goodwill	$	81,191

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BACKGROUND AND ORGANIZATION (Details Narrative) - shares		9 Months Ended
	Feb. 11, 2016	Sep. 30, 2022
Customer cancelation		6.00%
Ownership percentage	100.00%
Common shares issued	10,000,000
Issued and outstanding shares	100.00%
Aggregate equipment pricing		13.50%
Gross Profit, Rate		5.00%
Minimum [Member]
Key construction equipment		40.00%
Maximum [Member]
Key construction equipment		60.00%

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SIGNIFICANT ACCOUNTING POLICIES (Details)	9 Months Ended
	Sep. 30, 2022
Vehicles [Member]
Property, Plant and Equipment, Useful Life	5 years
Computer Equipment [Member]
Property, Plant and Equipment, Useful Life	5 years
Furniture and Equipment [Member]
Property, Plant and Equipment, Useful Life	5 years
Machinery and Equipment [Member]
Property, Plant and Equipment, Useful Life	5 years

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SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Revenue	$ 57,267,460	$ 13,224,759	$ 150,541,535	$ 24,674,807
Cost of sales	43,071,432	8,418,340	94,558,164	19,484,806
Gross Profit	14,196,028	4,806,419	55,983,371	5,190,001
Income (loss) from operations	7,371,051	(1,370,367)	34,555,308	(8,788,218)
Solar Residential [Member]
Revenue	10,356,762	6,758,884	60,150,528	11,735,260
Cost of sales	9,367,592	5,008,450	41,911,157	9,575,946
Gross Profit	989,170	1,750,434	18,239,371	2,159,314
Income (loss) from operations	1,896,023	(1,225,839)	16,176,064	(4,006,196)
Solar Commercial [Member]
Revenue	41,891,554	0	74,590,743	0
Cost of sales	30,770,051	0	42,278,932	0
Gross Profit	11,121,503	0	32,311,811	0
Income (loss) from operations	5,699,027	0	20,816,516	0
Roofing Construction [Member]
Revenue	4,791,303	6,220,147	13,679,707	12,481,941
Cost of sales	2,346,818	3,300,787	8,549,924	9,654,975
Gross Profit	2,444,485	2,919,360	5,129,783	2,826,966
Income (loss) from operations	628,979	(69,174)	(1,537,903)	(4,638,906)
EV Charging [Member]
Revenue	227,841	245,728	2,120,557	457,606
Cost of sales	586,971	109,103	1,818,151	253,885
Gross Profit	(359,130)	136,625	302,406	203,721
Income (loss) from operations	(852,978)	(75,354)	(899,369)	(143,116)
Consolidated [Member]
Revenue	57,267,460	13,224,759	150,541,535	24,674,807
Cost of sales	43,071,432	8,418,340	94,558,164	19,484,806
Gross Profit	14,196,028	4,806,419	55,983,371	5,190,001
Income (loss) from operations	$ 7,371,051	$ (1,370,367)	$ 34,555,308	$ (8,788,218)

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SIGNIFICANT ACCOUNTING POLICIES (Details 2) - USD ($)	3 Months Ended					9 Months Ended
	Sep. 30, 2022	Jun. 30, 2022	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2022	Sep. 30, 2021
Summary of significant accounting policies
Net income (loss)	$ 6,240,046	$ 18,887,834	$ (1,685,655)	$ (3,358,726)	$ (2,282,511)	$ 30,798,785	$ (7,343,074)
(Gain) loss on change in fair value of derivative liabilities	53,295		(359,009)			43,246	(1,285,675)
Interest on convertible debt	164,573		540,450			766,770	866,477
Net income (loss) - diluted	$ 6,457,914		$ (1,504,214)			$ 31,608,801	$ (7,762,272)
Basic weighted average number of common shares outstanding	539,902,975		378,468,171			502,470,756	343,348,974
Diluted weighted average number of common shares outstanding	616,917,439		481,083,476			579,485,220	445,964,279
Effect of dilutive shares	77,014,464		102,615,305			77,014,464	102,615,305
Basic income (loss) per Common Share	$ 0.01		$ (0.00)			$ 0.06	$ (0.02)
Diluted income (loss) per Common Share	$ 0.01		$ (0.00)			$ 0.06	$ (0.02)

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SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	1 Months Ended	3 Months Ended			9 Months Ended
	Sep. 22, 2022	Sep. 30, 2022	Sep. 30, 2021	Mar. 31, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Effect of dilutive shares		77,014,464	102,615,305		77,014,464	102,615,305
Convertible notes with interest					5,504,464	6,834,227
Common shares to be issued					7,000,000	0
Warrants and options					7,500,000	5,781,078
Convertible preferred shares Class B					57,010,000	90,000,000
Warrant issued					500,000
Exercise price					$ 0.50
Nonqualified Stock Option Award Agreement	for 25,000,000 shares of common stock over 3 years at the price of $0.1799 per share. 7,000,000 shares of common stock qualify for the year of 2022.
Basic income (loss) per Common Share		$ 0.01	$ (0.00)		$ 0.06	$ (0.02)
Shares of common stock, shares issued					8,000,000
Diluted income (loss) per Common Share		$ 0.01	$ (0.00)		$ 0.06	$ (0.02)
Shares of common stock issued					45,000,000
Shares of common stock value issued				$ 140,000	$ 1,748,000
Cash		$ 480,141			480,141		$ 1,124,533
Accounts receivable, net		5,511,696			5,511,696		3,652,176
Allowance for doubtful accounts		340,874			$ 340,874		253,652
Percentage of shares acquired					60.00%
Work in progress receivable, net		76,976,192			$ 76,976,192		33,242,296
Work in progress receivable, gross		139,727,247			139,727,247		48,400,253
Work in progress payable		62,751,055			62,751,055		$ 15,157,957
Cost of revenue		43,071,432	$ 8,418,340		94,558,164	$ 19,484,806
Marketing		186,093	229,259		445,828	575,038
Recognized Revenue		291,600,000			291,600,000
Accounts and work in progress payable					62,751,055	0
Revenue		57,267,460	13,224,759		150,541,535	24,674,807
Solar Residential [Member]
Cost of revenue		9,367,592	5,008,450		41,911,157	9,575,946
Revenue					$ 60,100,000	$ 11,700,000
Concentration of Revenue					40.00%	47.50%
Revenue		$ 10,356,762	$ 6,758,884		$ 60,150,528	$ 11,735,260
EV Charging Station [Member]
Concentration of Revenue					1.00%	2.00%
Revenue					$ 2,100,000	$ 500,000
Roofing Constructions [Member]
Concentration of Revenue					9.00%	50.50%
Revenue					$ 13,700,000	$ 12,500,000
Commercial Solar [Member]
Concentration of Revenue					50.00%	0.00%
Revenue					$ 74,600,000	$ 0

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GOING CONCERN (Details Narrative) - USD ($)	3 Months Ended					9 Months Ended
	Sep. 30, 2022	Jun. 30, 2022	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
GOING CONCERN (Details Narrative)
Retained earnings accumulated deficit	$ 30,378,933					$ 30,378,933		$ (774,754)
Cash	480,141					480,141
working capital	30,754,641					30,754,641
Net income (loss)	$ 6,240,046	$ 18,887,834	$ (1,685,655)	$ (3,358,726)	$ (2,282,511)	30,798,785	$ (7,343,074)
Net cash used in operating activities						$ (5,609,232)	$ (1,322,756)

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PROPERTY AND EQUIPMENT (Details) - USD ($)	Sep. 30, 2022	Dec. 31, 2021
Less: accumulated depreciation	$ (2,170,519)	$ (2,087,040)
Property and equipment, gross	3,174,535	3,209,097
Property and equipment, net	1,004,016	1,122,057
Vehicles [Member]
Property and equipment, gross	2,427,093	2,660,504
Computer Equipment [Member]
Property and equipment, gross	3,518	3,518
Furniture and Equipment [Member]
Property and equipment, gross	142,494	137,231
Land [Member]
Property and equipment, gross	250,000	0
Machinery and Equipment [Member]
Property and equipment, gross	191,566	224,807
Leasehold Improvements [Member]
Property and equipment, gross	13,473	36,646
Office Equipment [Member]
Property and equipment, gross	$ 146,391	$ 146,391

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PROPERTY AND EQUIPMENT (Details Narrative) - USD ($)	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Depreciation expense	$ 227,601	$ 303,982
Assets and accumulated depreciation	158,620
Purchase of a Genie Scissorlift	8,453
Purchase of computer equipment	8,038
Acquisition cost of fixed assets		178,749
Purchase of fixed assets		$ 1,112,644
Proceeds from sale of land	106,931
Opal Investments, Inc. [Member]
Initial deposits for purchase of a land	250,000
Total purchase price for land	$ 13,000,000

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OTHER ASSETS (Details Narrative) - USD ($)	Sep. 30, 2022	Dec. 31, 2021
Other Assets Abstract
Prepaids and Other Current Assets Balances	$ 273,836	$ 736,548
Prepaid debt and insurance	117,372	701,023
Prepaid rent	9,464	0
Accrued interest receivable	147,000	35,525
Other Assets	154,390	265,071
Trade mark, brand asset and website	123,194	207,320
Technologies	23,142	0
Security deposit	$ 8,054	$ 57,751

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NOTE RECEIVABLE (Details Narrative) - USD ($)		9 Months Ended
	Oct. 05, 2021	Sep. 30, 2022	Dec. 31, 2021
RELATED PARTY TRANSACTIONS
Accrued interest receivable		$ 147,000	$ 35,525
Interest rate	3.50%	16.00%
Promissory note receivable		$ 4,200,000

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RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Repayment to related parties	$ 754,389	$ 4,184,541
Related parties Debt	11,204,126		$ 11,510,413
Prior management	7,000,000		7,000,000
Balance Authority acquisition	654,573
Future Home Power acquisition	2,000,000		2,000,000
USA Solar Network LLC acquisition	744,985		1,000,000
Cash advances	804,568		654,644
Related entities			$ 855,769
New obligations to related parties	448,102	12,288,686
Net increase decrease in Due to related parties	$ 306,287	$ 8,104,145
Repurchased preferred stock	5,000,000	10,000,000
Director [Member]
Shares Issued	3,604,603	1,500,000
Shares Valued	$ 1,131,352	$ 840,000
Officer[Member]
Shares Issued	20,000,000	25,133,334
Shares Valued	$ 6,302,000	$ 13,276,667

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DEBENTURE PAYABLE (Details Narrative) - USD ($)		9 Months Ended
	Oct. 05, 2021	Sep. 30, 2022	Dec. 31, 2021
Secured redeemable debenture		$ 2,400,000
Interest rate	3.50%	16.00%
Debenture Payable [Member]
Accrued interest receivable		$ 635,807	$ 363,318

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CONVERTIBLE NOTES PAYABLE (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Convertible note payable, Gross	$ 10,744,800	$ 23,688,886
Total convertible note payable	10,684,800	23,688,886
Unamortized Debt Discount	$ 60,000	$ 0
RB Capital Partners, Inc. [Member]
Issuance Date	Feb. 08, 2021	Feb. 18, 2021
Maturity Date	Feb. 18, 2022	Feb. 08, 2022
Conversion Price	$ 3.00	$ 3.00
Outstanding Principal Balance	$ 1,744,800	$ 1,000,000
Interest Rate	5.00%	5.00%
Mammoth Corporation [Member]
Issuance Date	Jan. 19, 2022
Maturity Date	Apr. 19, 2022
Conversion Price	$ 0.50
Outstanding Principal Balance	$ 600,000
Interest Rate	0.00%
RB Capital Partners Inc One [Member]
Issuance Date	Feb. 26, 2021	Feb. 18, 2021
Maturity Date	Feb. 26, 2022	Feb. 18, 2022
Conversion Price	$ 3.00	$ 3.00
Outstanding Principal Balance	$ 4,500,000	$ 3,500,000
Interest Rate	5.00%	5.00%
Jefferson Street Capital [Member]
Issuance Date	Oct. 05, 2021	Oct. 05, 2021
Maturity Date	Oct. 05, 2022	Oct. 05, 2022
Conversion Price	$ 6.75	$ 6.75
Outstanding Principal Balance	$ 1,500,000	$ 1,500,000
Interest Rate	5.00%	5.00%
Jefferson Street Capital One [Member]
Issuance Date	Nov. 18, 2021	Nov. 18, 2021
Maturity Date	Jan. 05, 2022	Jan. 15, 2022
Conversion Price	$ 6.75	$ 6.75
Outstanding Principal Balance	$ 500,000	$ 500,000
Interest Rate	10.00%	10.00%
Jefferson Street Capital Two [Member]
Issuance Date	Mar. 01, 2022
Maturity Date	Dec. 01, 2022
Conversion Price	$ 6.00
Outstanding Principal Balance	$ 500,000
Interest Rate	14.00%
RB Capital Partners Inc Two [Member]
Issuance Date	Apr. 22, 2022	Feb. 26, 2022
Maturity Date	Apr. 22, 2023	Feb. 26, 2021
Conversion Price	$ 3.00	$ 3.00
Outstanding Principal Balance		$ 4,500,000
Interest Rate	5.00%	5.00%
AJB Capital Investments LLC [Member]
Issuance Date	Sep. 09, 2022
Maturity Date	Mar. 09, 2023
Conversion Price	$ 0
Outstanding Principal Balance	$ 600,000
Interest Rate	12.00%
Granite Global Value [Member]
Issuance Date	Jan. 19, 2021
Maturity Date	Jan. 19, 2022
Conversion Price	$ 0
Outstanding Principal Balance	$ 155,886
Interest Rate		1.00%
Granite Global Value One [Member]
Issuance Date		Jan. 27, 2021
Maturity Date		Jan. 27, 2022
Conversion Price		$ 2.70
Outstanding Principal Balance		$ 1,035,250
Interest Rate		1.00%
Granite Global Value Two [Member]
Issuance Date		Feb. 23, 2021
Maturity Date		Feb. 23, 2022
Conversion Price		$ 6.75
Outstanding Principal Balance		$ 1,035,250
Interest Rate		1.00%
Granite Global Value Three [Member]
Issuance Date		Mar. 18, 2021
Maturity Date		Mar. 18, 2022
Conversion Price		$ 5.45
Outstanding Principal Balance		$ 3,282,500
Interest Rate		1.00%
Granite Global Value Four [Member]
Issuance Date		Jun. 01, 2021
Maturity Date		Jun. 01, 2022
Conversion Price		$ 2.50
Outstanding Principal Balance		$ 5,500,000
Interest Rate		10.00%
Granite Global Value Five [Member]
Issuance Date		Aug. 30, 2021
Maturity Date		Aug. 30, 2022
Conversion Price		$ 0.35
Outstanding Principal Balance		$ 1,680,000
Interest Rate		5.00%

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CONVERTIBLE NOTES PAYABLE (Details Narrative) - USD ($)		3 Months Ended		9 Months Ended
	Sep. 09, 2022	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Debt discount				$ 6,724	$ 186,146
Convertible notes		$ 164,573	$ 540,450	766,770	866,477
Received proceeds				1,900,000	21,055,610
Principal of the convertible notes	$ 600,000
Convertible note received				2,440,000	$ 21,055,610
Granite Global Value Investments [Member]
Convertible notes				14,000,000
Principal Balance				2,782,275
Intrest Payable				$ 58,300
Convertible shares of common stock		59,708,605		59,708,605
Principal of the convertible notes		$ 12,668,535		$ 12,668,535
Accrued interest				62,532
Total accrued interest				12,731,067
Convertible debt				$ 1,268,933
AJB Capital Investments Member
Convertible note received	$ 540,000

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DERIVATIVE LIABILITY (Details) - USD ($)	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
DERIVATIVE LIABILITY
Balance, beginning	$ 10,049	$ 1,560,851
Reduction of new derivative liabilities from payoff of convertible notes and conversion of convertible notes to common shares		(230,456)
Elimination of derivative liabilities due to extinguishment of underlying convertible debt	(10,049)
Addition of new derivative liabilities	53,295	162,610
Amortization of debt discount on convertible debt		67,846
Gain on change in fair value of derivative liabilities		(1,285,675)
Balance, end	$ 53,295	$ 275,176

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DERIVATIVE LIABILITY (Details 1) - $ / shares	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Expected dividend yield	0.00%	0.00%
Expected term	7 months 6 days
Expected average volatility	156.00%
Minimum [Member]
Expected term		2 months 15 days
Expected average volatility		138.00%
Risk-free interest rate	$ 3.2	$ 0.08
Maximum [Member]
Expected term		5 months 26 days
Expected average volatility		177.00%
Risk-free interest rate	$ 4.05	$ 0.11

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DERIVATIVE LIABILITY (Details Narrative)	Sep. 09, 2022 USD ($)
DERIVATIVE LIABILITY
Convertible note	$ 600,000

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NOTES PAYABLE (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Notes payable	$ 21,955,667		$ 21,955,667		$ 7,539,471
Notes payable, noncurrent portion	2,273,531		2,273,531		5,112,773
Notes payable	24,829,198		24,829,198		2,426,698
PPP Loan program				$ 6,375,014
Proceeds from forgiven PPP Loan				1,018,130
Proceeds from SBA Loan				438,204
Proceeds from PPP Loan				6,375,014
Payment for acquired debt				1,007,535
Repayments of SBA notes payable				1,000,000
Repayments of notes payable			2,762,245	1,841,218
Interest Expenses	1,077,710	$ 586,638	2,190,637	949,454
Common Stock	5,428		5,428		4,535
Granite Global Value [Member]
Proceeds from Loans			14,000,000
RB Capital Partners, Inc. [Member]
Proceeds from Loans			1,500,000
Repayments of notes payable			500,000
TVT 2.0 LLC [Member]
Proceeds from Loans			1,550,000
Repayments of notes payable			661,111
Vehicle financing [Member]
Repayments of notes payable			464,160	582,328
On-Deck Capital [Member]
Proceeds from Loans			430,000
Repayments of notes payable			90,000	41,102
Stephanie Hooper[Member]
Proceeds from Loans			150,000
Large Investment Group, Inc. [Member]
Proceeds from Loans			275,000
Agile Capital Funding [Member]
Proceeds from Loans			700,000
Repayments of notes payable			200,000
CapitalNow LLC [Member]
Proceeds from Loans			450,000
Repayments of notes payable			450,000
Granite Global Value Investments LTD [Member]
Proceeds from Loans			1,400,000
LOC [Member]
Proceeds from Loans			397,105
Repayments of notes payable			396,974
Silverline Services [Member]
Repayments of notes payable				118,830
Echo Investments [Member]
Repayments of notes payable				98,958
TVT 2.0 LLC [Member] |Tabular
Proceeds from Loans			$ 888,889
Interest rate			40.00%
Weekly payments			$ 60,278
SBALoan [Member] |Tabular
Interest rate for line of credit			5.00%
Proceeds from Loans			$ 147,304	$ 156,883
Interest rate			3.75%	3.75%
Line of credit			$ 175,772
Loan payable			2050 years	2050 years
OnDeck [Member] |Tabular
Proceeds from Loans			$ 162,115
Interest rate			44.00%
Weekly payments			$ 11,413
Vehicle Financings [Member] |Tabular
Proceeds from Loans			555,104	$ 653,750
Weekly payments			$ 17,628	$ 11,612
Maturity date			2024 years
Current portion					$ 110,088
Vehicle Financings [Member] |Tabular | Minimum [Member]
Interest rate			2.00%	2.00%
Vehicle Financings [Member] |Tabular | Maximum [Member]
Interest rate			3.00%	3.00%
PPLoan [Member] |Tabular
Proceeds from Loans			$ 6,375,014	$ 6,456,124
Interest rate			1.00%	1.00%
Loan payable			2 years	2 years
Bridge Loan [Member] |Tabular
Proceeds from Loans			$ 1,000,000
Interest rate			10.00%
Promissory Note [Member] |Tabular
Proceeds from Loans			$ 275,000
Interest rate			10.00%
Stephanie Hooper [Member] | Tabular
Proceeds from Loans			$ 150,000
Interest rate			0.00%
Loan payable			12 years
Interest Expenses			$ 35,265
Common Stock	$ 150,000		150,000
Agile Cpital Fund [Member] |Tabular
Proceeds from Loans			$ 500,000
Interest rate			15.00%
Weekly payments			$ 36,000
Revolving Line of Credit [Member] |Tabular
Proceeds from Loans				$ 272,714
Interest rate				5.00%

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LEASES (Details 1 ) - USD ($)	Sep. 30, 2022	Dec. 31, 2021
LEASES (Details 1 )
Opearting lease ROU assets	$ 2,888,171	$ 1,646,049
Current portion of operating lease liabilities	504,981	115,623
Non current portion of opearting lease liabilities	2,383,190	1,530,426
Total operating lease liabilities	$ 2,888,171	$ 1,646,049

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LEASES (Details 2)	9 Months Ended
	Sep. 30, 2022
LEASES (Details 2)
Weighted average remaining lease term	10 years 4 months 9 days
Weighted average discount rate	4.32%

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LEASES (Details 3)	Dec. 31, 2021 USD ($)
LEASES (Details 3)
2022	$ 181,661
2023	523,106
2024	502,289
2025	366,161
2026	288,005
Thereafter	1,423,847
Total lease payment	3,285,069
Less imputed interest	(396,898)
Present value of lease liabilities	$ 2,888,171

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LEASES (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022
LEASES (Details Narrative)
Lease expense	$ 149,177	$ 41,435
Related party operating lease ROU assets and corresponding liability			$ 1,547,325

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COMMON STOCK (Details) - $ / shares	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
COMMON STOCK
Outstanding, beginning		42,844,881
Exercised		(42,844,881)
Issued	7,500,000
Outstanding, ending	7,500,000
Outstanding weighted average exercise price, beginning	$ 0	$ 0.0747
Excercised weighted average exercise price, Issued	0.20
Excercised weighted average exercise price, Exercised		0.078
Outstanding weighted average exercise price, ending	$ 0.20	$ 0

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COMMON STOCK (Details 1) - Warrant	9 Months Ended
	Sep. 30, 2022
Expected term	5 years
Expected average volatility	156.00%
Expected dividend yield	0.00%
Risk-free interest rate minimum	3.20%
Risk-free interest rate maximum	4.05%

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COMMON STOCK (Details 2) - Stock option	9 Months Ended
	Sep. 30, 2022
Expected term	4 months 24 days
Expected average volatility	78.00%
Expected dividend yield	0.00%
Risk-free interest rate	3.33%

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COMMON STOCK (Details Narrative) - USD ($)	3 Months Ended						9 Months Ended		12 Months Ended
	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021	Oct. 31, 2022
Stock issued for services, shares							2,200,000	1,568,090
Stock issued for services, value	$ 98,700	$ 336,750	$ 177,900	$ 140,150	$ 450,000	$ 55,000	$ 613,350	$ 645,150
Shares, after debt conversion							59,708,605	90,633,008
Common stock, shares authorized	900,000,000						900,000,000		900,000,000
Converted debt amount							$ 2,840,575	$ 1,398,287
common stock, per value	$ 0.00001						$ 0.00001		$ 0.00001
Common stock issued for compensation, shares							15,366,539	1,850,000
Common stock issued for compensation, amount	$ 703,264	$ 3,690,164				$ 283,500	$ 2,647,066	$ 283,500
Common stock issued for prior acquisition, shares							38,739,242	82,500,000
Common stock issued for prior acquisition, amount							$ 12,011,850	$ 63,532,400
Common stock payable							514,040	2,000,000
Common stock issued for cash							$ 80,500	$ 140,000
Common stock payable, shares							3,315,000
Stock received and cancelled, shares							45,000,000	200,000
Stock received and cancelled, value							$ 36,450,000	$ 200,000
Common stock issued for cashless warrant exercise								306,148
Common stock issued for warrant								16,479,564
Cash proceeds								$ 16,480
Warrant issued	500,000						500,000
Warrant excercise price	$ 0.1799						$ 0.1799		$ 0
Warrants expense							$ 147,500
Option expense recorded as interest expense							$ 3,260,418	$ 928,650
Stock Compensation Plan [Member]
Common stock issued for compensation, shares							25,000,000		25,000,000
Granted shares							7,000,000
Exercise price per share							$ 0.1799		$ 0
Option expense recorded as interest expense							$ 1,259,300
Subsequent event [Member]
Common stock, shares authorized										650,000,000

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PREFERRED STOCK (Details Narrative) - USD ($)	3 Months Ended				9 Months Ended
	Sep. 30, 2022	Jun. 30, 2022	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Preferred stock, par value	$ 0.00001				$ 0.00001		$ 0.00001
Preferred stock, shares authorized	25,000,041				25,000,041		25,000,041
Preferred stock, shares issued under acquisition					38,739,242	82,500,000
Shares value under acquisition	$ 782,000	$ 2,091,949	$ 24,403,900	$ 39,128,500	$ 12,011,849	$ 63,532,400
Stock repurchased and retired, shares					45,000,000	200,000
Series B Preferred Stocks [Member]
Preferred stock, par value	$ 0.00001				$ 0.00001		$ 0.00001
Preferred stock, shares authorized	20,000,000				20,000,000		20,000,000
Preferred stock, shares issued	5,701,000				5,701,000		8,000,000
Preferred stock, shares outstanding	5,701,000				5,701,000		8,000,000
Conversion terms description					One share of Series B preferred stock is convertible into 10 shares of common stock
Preferred stock retired and cancelled					800,000
Convertible preferred stock					1,499,000
Common stock issued after conversion					14,990,000
Stock repurchased and retired, shares					5,000,000
Stock repurchased and retired, amount					$ 10,000,000
Series B Preferred Stocks [Member] | Business Acquisition [Member]
Preferred stock, shares issued under acquisition					1,000,000
Shares value under acquisition					$ 4,870,000
Series C, Preferred Stock [Member]
Preferred stock, par value	$ 0.00001				$ 0.00001		$ 0.00001
Preferred stock, shares authorized	1				1		1
Preferred stock, shares issued	1				1		1
Preferred stock, shares outstanding	1				1		1
Voting right description					Holders have no voting rights
Dividend payment terms description					Holders are entitled to receive dividends in the amount of 49% of net annual profit of Enerev LLC paid annually 60 days closing year end
Series C, Preferred Stock [Member] | Business Acquisition [Member]
Preferred stock, shares issued under acquisition					1
Series D, Preferred Stock [Member]
Preferred stock, par value	$ 0.00001				$ 0.00001		$ 0.00001
Preferred stock, shares authorized	40				40		40
Preferred stock, shares issued	40				40		40
Preferred stock, shares outstanding	40				40		40
Voting right description					Holders have no voting rights
Dividend payment terms description					Holders are entitled to receive dividends in the amount of 40% of net annual profit of Kinetic Investments, Inc. dba Future Home Power paid annually 60 days closing year end
Series D, Preferred Stock [Member] | Business Acquisition [Member]
Preferred stock, shares issued under acquisition					40
Class A preferred stock [Member]
Preferred stock, par value	$ 0.00001				$ 0.00001
Preferred stock, shares authorized	5,000,000				5,000,000
Preferred stock, shares issued	2,500,000				2,500,000		2,500,000
Preferred stock, shares outstanding	2,500,000				2,500,000		2,500,000
Voting right description					Each share of Class A preferred stock has voting rights equal to 10,000 shares of common stock

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NON-CONTROLLING INTEREST (Details) - USD ($)	Sep. 30, 2022	Dec. 31, 2021
NON-CONTROLLING INTEREST (Details)
Net loss Subsidiary	$ (887,255)	$ (151,217)
Net loss attributable to the non-controlling interest	532,353	90,730
Net loss affecting the Company	(354,902)	(60,487)
Accumulated losses	(1,038,472)	(151,217)
Accumulated losses affecting the Company	(415,389)	(2,218,929)
Net equity non-controlling interest	(354,902)	(60,487)
Accumulated losses attributable to the non-controlling interest	$ 623,083	$ 90,730

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ACQUISITIONS (Details)	Sep. 30, 2022 USD ($) shares
Fair value of cash	$ 480,141
Acquisition [Member]
Fair value of cash	200,000
Common shares	$ 2,678,500
Series B preferred shares | shares	4,870,000
Total fair value of consideration	$ 7,748,500

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ACQUISITIONS (Details 1)	Sep. 30, 2022 USD ($)
ACQUISITIONS (Details)
Accounts receivable	$ 40,384
Goodwill	$ 7,708,116

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ACQUISITIONS (Details 2)	Sep. 30, 2022 USD ($)
Fair value of cash	$ 480,141
Acquisition One [Member]
Common shares	36,450,000
Fair value of cash	3,000,000
Total fair value consideration	$ 39,450,000

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ACQUISITIONS (Details 3) - USD ($)	Sep. 30, 2022	Dec. 31, 2021
Accounts receivable	$ 5,511,696	$ 3,652,176
Fair value of cash	480,141
Fixed assets	153,687,595	104,533,536
Notes payable	53,131
Accounts payable and accrued expenses	8,516,321	7,984,710
Total Liabilities	61,495,298	55,936,691
Goodwill	62,047,800	$ 58,401,851
Balance Sheet Item Member
Accounts receivable	959,423
Fair value of cash	176,403
Other current assets	1,928,743
Fixed assets	197,565
Total Assets	3,262,134
Notes payable	647,663
Accounts payable and accrued expenses	946,810
Customer deposits	1,054,692
Total Liabilities	2,649,165
Goodwill	$ 38,837,031

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ACQUISITIONS (Details 4)	Sep. 30, 2022 USD ($)
Fair value of cash	$ 480,141
Acquisition Two [Member]
Fair value of cash	1,500,000
Total	$ 1,500,000

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ACQUISITIONS (Details 5) - USD ($)	Sep. 30, 2022	Dec. 31, 2021
Accounts receivable	$ 5,511,696	$ 3,652,176
Fair value of cash	480,141
Fixed assets	153,687,595	104,533,536
Accrued expenses	8,516,321	7,984,710
Notes payable	53,131
Total Liabilities	61,495,298	55,936,691
Goodwill	62,047,800	$ 58,401,851
Acquisition Three [Member]
Accounts receivable	14,537
Fair value of cash	549,847
Fixed assets	2,440
Total Assets	566,824
Accrued expenses	52,800
Notes payable	241,442
Total Liabilities	294,242
Goodwill	$ 1,227,418

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ACQUISITIONS (Details 6)	Sep. 30, 2022 USD ($)
Fair value of cash	$ 480,141
Acquisition Four [Member]
Common shares	6,950,000
Fair value of cash	2,700,000
Total	$ 9,650,000

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ACQUISITIONS (Details 7) - USD ($)	Sep. 30, 2022	Dec. 31, 2021
Accounts receivable	$ 5,511,696	$ 3,652,176
Fair value of cash	480,141
Fixed assets	153,687,595	104,533,536
Accrued expenses	8,516,321	7,984,710
Notes payable	53,131
Total Liabilities	61,495,298	55,936,691
Goodwill	62,047,800	$ 58,401,851
Acquisition Five [Member]
Accounts receivable	131,188
Fair value of cash	38,237
Fixed assets	45,715
Investment	23,783
Total Assets	238,923
Accrued expenses	121,344
Notes payable	555,891
Total Liabilities	677,235
Goodwill	$ 10,088,312

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ACQUISITIONS (Details 8)	Sep. 30, 2022 USD ($)
Fair value of cash	$ 480,141
Acquisition six [Member]
Common shares	23,548,850
Fair value of cash	5,200,000
Total	$ 28,748,850

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ACQUISITIONS (Details 9)	Sep. 30, 2022 USD ($)
ACQUISITIONS (Details)
Goodwill	$ 28,089,422
Accrued expenses	$ 561,022

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ACQUISITIONS (Details 10)	Sep. 30, 2022 USD ($)
Fair value of cash	$ 480,141
Acquisition Seven [Member]
Common shares	8,706,300
Fair value of cash	1,200,000
Total	$ 9,906,300

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ACQUISITIONS (Details 11)	Sep. 30, 2022 USD ($)
Liabilities
Notes payable	$ 53,131
Goodwill	$ 9,959,431

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ACQUISITIONS (Details 12)	Sep. 30, 2022 USD ($)
Fair value of cash	$ 480,141
Acquisition Eight [Member]
Common shares	100,900
Fair value of cash	200,000
Total	$ 300,900

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ACQUISITIONS (Details 13) - USD ($)	Sep. 30, 2022	Dec. 31, 2021
Goodwill	$ 62,047,800	$ 58,401,851
Goodwill
Goodwill	$ 300,900

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ACQUISITIONS (Details 14)	Sep. 30, 2022 USD ($)
Fair value of cash	$ 480,141
Acquisition Nine [Member]
Common shares	252,250
Fair value of cash	50,000
Total	$ 302,250

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ACQUISITIONS (Details 15) - USD ($)	Sep. 30, 2022	Dec. 31, 2021
Goodwill	$ 62,047,800	$ 58,401,851
Acquisition Nine [Member]
Accounts receivable	83,837
Cash	137,222
Total Assets	221,059
Goodwill	$ 81,191

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ACQUISITIONS (Details Narrative) - USD ($)						1 Months Ended				3 Months Ended		9 Months Ended		12 Months Ended	13 Months Ended
	Oct. 06, 2021	Jul. 03, 2021	Jun. 01, 2021	Mar. 16, 2021	Mar. 01, 2021	Jun. 30, 2021	Apr. 28, 2021	Apr. 28, 2021	Jan. 21, 2021	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021	Apr. 28, 2022	Aug. 29, 2022
Common share issue										542,817,941		542,817,941		453,498,555
Common stock value										$ 5,428		$ 5,428		$ 4,535
Fair value of cash										480,141		480,141
Goodwill										62,047,800		62,047,800		$ 58,401,851
Notes payable										53,131		53,131
Revenue										$ 57,267,460	$ 13,224,759	150,541,535	$ 24,674,807
Cornerstone Construction team LLC [Member]
Common share issue					45,000,000											45,000,000
Membership interest					100.00%
Fair value												36,900,000
Issued settlement of related legal proceedings in common stock																8,000,000
Common stock value																$ 1,748,000
Market price					$ 0.81
Pacific Lighting Management [Member]
Business acquired				$ 1,500,000
Total Assets				273,000
Goodwill				$ 1,200,000
Balance Authority LLC [Member]
Common share issue							10,000,000	10,000,000
Membership interest							100.00%
Fair value												6,950,000
Market price							$ 0.69	$ 0.69
Fair value of cash							$ 1,500,000	$ 1,500,000								545,427
Additional payment due								600,000				600,000			$ 600,000
Related party note payable outstanding							$ 654,473	654,473
Renovation Roofing, Inc [Member]
Common share issue		500,000
Membership interest		100.00%					100.00%
Fair value		$ 252,250
Market price		$ 0.51
Revenue		$ 506,610
Net earnings from operations		$ 103,269
SunUp Solar LLC [Member]
Common share issue						200,000
Membership interest						100.00%
Common stock value						$ 100,900
Market price						$ 0.51
Fair value of cash																$ 200,000
USA Solar Networks LLC [Member]
Common share issue						12,000,000								7,000,000
Membership interest						60.00%
Fair value						$ 6,054,000
Common stock value						$ 2,652,300
Market price						$ 0.5045										$ 0.38
Fair value of cash	$ 200,000
Additional membership interest	40.00%
Payment												255,015
Due to related parties												744,985		$ 1,000,000
Kinetic Investments Inc [Member]
Common share issue			51,000,000											29,000,000		9,739,242
Membership interest			100.00%
Fair value			$ 20,236,900
Common stock value						$ 2,652,300										$ 2,873,950
Market price						$ 0.40
Fair value of cash														$ 5,200,000
Class D preferred stock, Issued			40
Value in the acquisition of FHP			$ 0
Shares of common stock, Not yet issued			51,000,000
Notes payable																$ 9,137,900
Cash paid							$ 1,500,000	$ 1,500,000						3,200,000
Accrued														$ 2,000,000
Paid in cash													$ 3,200,000
Summary of consideration transferred to acquire Enerev
Series B preferred shares							1,000,000	1,000,000
Common share issue							5,500,000	5,500,000
Series C preferred stock, Value							$ 0	$ 0
Membership interest							100.00%						100.00%
Fair value									$ 2,678,500			$ 4,870,000

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COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) $ in Millions		1 Months Ended
	Sep. 02, 2022	Sep. 30, 2022
COMMITMENTS AND CONTINGENCIES
Description of commitment and contingencies		Diaz fraudulently induced SIRC into acquiring a 60% interest in USA Solar Networks LLC. SIRC obtained a temporary restraining order against Diaz preventing him from selling the 12 million shares of SIRC stock he received through the acquisition. SIRC intends to amend the complaint to seek damages related to the acquisition of the remaining 40% interest in USA Solar as well. In the suit, SIRC seeks rescission
Amount of settlement	$ 7

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SUBSEQUENT EVENTS (Details Narrative) - USD ($)			1 Months Ended				3 Months Ended				9 Months Ended
	Nov. 02, 2022	Oct. 05, 2022	Nov. 17, 2022	Nov. 15, 2022	Oct. 26, 2022	Oct. 18, 2022	Sep. 30, 2022	Jun. 30, 2022	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2022	Sep. 30, 2021	Oct. 31, 2022	Dec. 31, 2021
Common stock, shares authorized							900,000,000				900,000,000			900,000,000
Share of common stock issued							542,817,941				542,817,941			453,498,555
Shares value under acquisition							$ 782,000	$ 2,091,949	$ 24,403,900	$ 39,128,500	$ 12,011,849	$ 63,532,400
Series B Preferred Stocks [Member]
Series B preferred shares							5,701,000				5,701,000			8,000,000
Subsequent event [Member]
Common stock, shares authorized													650,000,000
Common stock issued for compensation, shares				2,800,000
Common stock issued for compensation, amount				$ 476,000
Share price				$ 0.17
Subsequent event [Member] | Series B Preferred Stocks [Member]
Conversion of shares of class B preferred stock	35,000,000
Share of common stock issued	3,500,000
Subsequent event [Member] | David Massey [Member]
Conversion of shares of class B preferred stock		3,700,000
Share of common stock issued		37,000,000
Subsequent event [Member] | Consultant [Member]
Share of common stock issued						1,925,134
Common stock share issue amount for services						$ 360,000
Common stock issue price						$ 0.187
Subsequent event [Member] | Employees Compensation [Member]
Common stock share issue amount for services						$ 180,810
Common stock share issue for consulting services						$ 630,000
Common stock issue price						$ 0.287
Subsequent event [Member] | Continuation Capital Inc [Member]
Share of common stock issued					2,717,351
Common stock share issue amount for services					$ 489,123
Common stock share issue for consulting services					$ 0.18
Subsequent event [Member] | Consulting Member [Member]
Share of common stock issued					552,792
Common stock share issue amount for services					$ 99,503
Common stock issue price					$ 0.18
Subsequent event [Member] | Debt Holder [Member]
Common stock issue price			$ 0.11		$ 1.70
Shares value under acquisition			$ 1,344,327		$ 5,950,000
Series B preferred shares			150,000		3,500,000
Subsequent event [Member] | Investor [Member]
Share of common stock issued					1,111,112
Common stock share issue amount for services					$ 100,000
Common stock share issue for consulting services					$ 0.09