EX-99.15 16 ex99-15.htm

Exhibit 99.15

FORM 2A

LISTING STATEMENT

SOLARBANK CORPORATION

February 24, 2023

NOTE TO READER

This Listing Statement contains a copy of the long form prospectus of SolarBank Corporation (“SolarBank” or the “Corporation”) dated February 10, 2023 (the “Prospectus”). Certain sections of the Canadian Securities Exchange (the “Exchange”) form of Listing Statement have been included following the Prospectus to provide additional disclosure on the Corporation required by the Exchange, as well as updating certain information contained in the Prospectus.

TABLE OF CONTENTS

1.	Table of Concordance

2.	Schedule A – Long Form Prospectus of the Corporation dated February 10, 2023

3.	Schedule B – Listing Statement Disclosure – Additional Information regarding Item 14 – Capitalization

TABLE OF CONCORDANCE

	Information Required by Form 2A Listing Statement	Corresponding Item(s) in the Prospectus	Prospectus Page Numbers(s)
1.	Table of Contents	Table of Contents	i
2.	Corporate Structure	Corporate Structure	14
3.	General Development of the Business	Description of the Business	15
4.	Narrative Description of the Business	Description of the Business; Three-year history; Regulatory Overview; Use of Available Funds	18
5.	Selected Consolidated Financial Information	Schedule “A” Corporation Financial Statements and MD&A; Dividend Policy; Selected Financial Information	44
6.	Management’s Discussion and Analysis	Schedule “A” Corporation Financial Statements and MD&A; Management’s Discussion and Analysis	45, 58
7.	Market for Securities	Trading Price and Volume	75
8.	Consolidated Capitalization	Consolidated Capitalization	72
9.	Options to Purchase Securities	RSUs, Options and Warrants to Purchase Common Shares	73
10.	Descriptions of the Securities	Description of the Securities Being Qualified for Distribution; Description of Share Capital; Prior Sales; Plan of Distribution	72, 94
11.	Escrowed Securities	Escrowed Securities and Securities Subject to Contractual Restrictions on Transfer	75
12.	Principal Shareholders	Principal Shareholders	76
13.	Directors and Officers	Directors and Executive Officers; Audit Committee; Corporate Governance	76
14.	Capitalization	N/A	-
15.	Executive Compensation	Executive Compensation	81
16.	Indebtedness of Directors and Executive Officers	Indebtedness of Directors and Executive Officers	90
17.	Risk Factors	Risk Factors	96
18.	Promoters	N/A	115
19.	Legal Proceedings	Legal Proceedings	116
20.	Interest of Management and Others in Material Transactions	Interest of Management and Others in Material Transactions	117
21.	Auditors, Transfer Agents and Registrars	Auditors, Transfer Agents and Registrar	117
22.	Material Contracts	Material Contracts	117
23.	Interest of Experts	Experts	118
24.	Other Material Facts	Other Material Facts	118
25.	Financial Statements	Schedule “A” SolarBank Financial Statements; Dividend Policy; Selected Financial Information	44, 118

SCHEDULE “A” – Long Form Prospectus dated February 10, 2023

SCHEDULE “B” – Form 2A, Section 14 – Capitalization Tables

SCHEDULE A

Long Form Prospectus dated February 10, 2023

No securities regulatory authority has expressed an opinion about these securities and it is an offence to claim otherwise.

This Prospectus (as hereinafter defined) constitutes a public offering of these securities only in those jurisdictions where they may be lawfully offered for sale and therein only by persons permitted to sell such securities. These securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons unless exemptions from the registration requirement of the U.S. Securities Act and applicable state securities laws are available. This Prospectus does not constitute an offer to sell or a solicitation or an offer to buy any of the securities offered hereby within the United States or to, or for the benefit of, U.S. persons. See “Plan of Distribution”.

PROSPECTUS

INITIAL PUBLIC OFFERING 

February 10, 2023

SOLARBANK CORPORATION

Up to 7,000,000 Common Shares

Price: $0.75 per Common Share

This prospectus (this “Prospectus”) qualifies the distribution of up to 7,000,000 common shares (the “Offered Shares”) in the capital of SolarBank Corporation‎ (the “Company” or “SolarBank”) at a price of $0.75 per Offered Share (the “Offering Price”) for total gross proceeds of up to $5,250,000 (the “Offering”).

The Offered Shares are being offered on a “commercially reasonable efforts” basis without underwriter liability pursuant to the terms and conditions of an agency agreement (the “Agency Agreement”) to be entered by and among the Company and Research Capital Corporation, as lead agent and sole bookrunner (the “Agent”). The Offering Price for the Offered Shares was determined based upon arm’s length negotiations between the Company and the Agent, in the context of the market. See “Plan of Distribution”.

	Price to the Public		Agent’s Fee⁽¹⁾⁽²⁾		Net Proceeds to the Company⁽³⁾⁽⁴⁾
Per Offered Share	$	0.75	$	0.045	$	0.705
Total	$	5,250,000	$	315,000	$	4,935,000

Notes:

(1)	In consideration for the services rendered by the Agent in connection with the Offering, the Company has agreed to pay the Agent a cash fee (the “Agent’s Fee”) equal to 6.0% of the gross proceeds of the Offering (including in respect of any exercise of the Over-Allotment Option (as defined below)). The Company has also agreed to pay to the Agent a corporate finance fee of $35,000.00 (plus applicable taxes) (the “Corporate Finance Fee”) payable in cash, of which $20,000.00 (including applicable taxes) has been paid as of the date hereof. See “Plan of Distribution”.
(2)	As additional compensation, the Company has agreed to issue to the Agent, that number of common share purchase warrants of the Company (the “Broker Warrants”) as is equal to 6.0% of the total number of Offered Shares sold under the Offering (including in respect of any exercise of the Over-Allotment Option). Each Broker Warrant will entitle the holder thereof to purchase one (1) Common Share (as defined below) (each, a “Broker Warrant Share”) at the Offering Price for a period of 36 months following the Closing Date (as defined below). This Prospectus qualifies the distribution of the Broker Warrants. See “Plan of Distribution”.
(3)	The Agent has also been granted an option (the “Over-Allotment Option”), exercisable, in whole or in part, at the sole discretion of the Agent, at any time up to 48 hours prior to the Closing Date, to arrange for the sale of up to an additional 1,050,000 Offered Shares (the “Additional Shares”) at the Offering Price per Additional Share to cover the Agent’s over-allocation position. If the Over-Allotment Option is exercised in full for Additional Shares, the total “Price to the Public”, “Agent’s Fee” and “Net Proceeds to the Company” will be $6,037,500, $362,250 and $5,675,250, respectively. This Prospectus qualifies the grant of the Over-Allotment Option and the distribution of the Additional Shares issuable upon exercise of the Over-Allotment Option. See “Plan of Distribution”.

(4)	After deducting the Agent’s Fee, but before deducting the expenses and costs relating to the Offering which are estimated to be $200,000. The Agent’s Fee and the expenses and costs relating to the Offering will be paid from the gross proceeds of the Offering. See “Use of Proceeds”.

The following table sets out the number of securities that may be issued by the Company to the Agent in connection with the Offering:

Agent’s Position	Number of Securities Available or Maximum Size	Exercise Period	Exercise Price
Broker Warrants	420,000 Broker Warrant Shares⁽¹⁾	36 months following the Closing Date	$0.75 per Broker Warrant Share
Over-Allotment Option	1,050,000 Additional Shares	At any time up to 48 hours prior to the Closing Date	$0.75 per Additional Share

Notes:

(1)	Assuming no exercise of the Over-Allotment Option. If the Over-Allotment Option is exercised in full, an aggregate of 483,000 Broker Warrants exercisable to acquire up to 483,000 Broker Warrant Shares will be issued to the Agent.

There is currently no market through which the Offered Shares may be sold and purchasers may not be able to resell the securities purchased under this Prospectus. This may affect the pricing of the securities offered under this Prospectus in the secondary market, the transparency and availability of trading prices, the liquidity of the such securities, and the extent of issuer regulation. Investment in the Offered Shares is highly speculative due to various factors, including the nature and early stage of the Company’s business. An investment in these securities should only be made by persons who can afford the total loss of their investment. See “Risk Factors”.

Unless the context otherwise requires, in this Prospectus all references to “Offered Shares” include the Additional Shares and to the “Offering” includes the Over-Allotment Option.

The Canadian Securities Exchange (“CSE”) has conditionally approved the listing of the Company’s common shares (“Common Shares”). Listing is subject to the Company fulfilling all of the requirements of the CSE on or before August 2, 2023. See “Plan of Distribution”.

No minimum amount of funds must be raised under the Offering. This means that the Company could complete the Offering after raising only a small proportion of the Offering amount set out above. See “Risk Factors”.

Potential investors are advised to consult their own legal counsel and other professional advisers in order to assess income tax, legal, and other aspects of this investment. Prospective investors should be aware that the acquisition, holding and disposition of the securities described herein may have income and other tax consequences in Canada and in other jurisdictions. Except as expressly noted, this Prospectus does not describe these tax consequences fully. You should consult and rely on your own tax advisor as to any income or tax implications with respect to your own particular circumstances.

The Agent conditionally offers the Offered Shares for sale on a “commercially reasonable efforts” basis and subject to prior sale, if, as and when issued by the Company, in accordance with the conditions contained in the Agency Agreement referred to under “Plan of Distribution”. Subscriptions will be received subject to rejection or allotment in whole or in part and the right is reserved to close the subscription books at any time without notice. The Offering is expected to close on or about February 23, 2023 (the “Closing Date”) or such other date as the Company and the Agent may agree.

If subscriptions representing the Offering are not received within 90 days of the issuance of a receipt for the final prospectus in respect of the Offering, or if a receipt has been issued for an amendment to the final prospectus, within 90 days of the issuance of such receipt and in any event not later than 180 days from the date of receipt for the final prospectus in respect of the Offering, the Offering will cease. The Agent, pending closing of the Offering, will hold in trust all subscription funds received pursuant to the provisions of the Agency Agreement. If the Offering is not completed, the subscription proceeds received by the Agent in connection with the Offering will be returned to the subscribers without interest or deduction, unless the subscribers have otherwise instructed the Agent. See “Plan of Distribution”.

Other than in respect of the Offered Shares sold to certain purchasers in the United States and to, or for the account or benefit of, certain U.S. persons or certain persons in the United States, which will be represented by individual certificates, and other than pursuant to certain exceptions, it is expected that one or more global certificates for the Offered Shares distributed by this Prospectus will be issued in registered and definitive form to CDS Clearing and Depository Services Inc. (“CDS”) and will be deposited with CDS on the Closing Date. Purchasers of the Offered Shares will receive only a customer confirmation from the registered dealer from or through whom the Offered Shares, are purchased.

The Company is neither a “connected issuer” nor a “related issuer” of the Agent, as defined in National Instrument 33-105 – Underwriting Conflicts.

Certain legal matters related to the Offering have been reviewed on behalf of the Company by DLA Piper (Canada) LLP and on behalf of the Agent by MLT Aikins LLP.

Paul Pasalic, a director of the Company, resides outside of Canada. This director has appointed DLA Piper (Canada) LLP, Suite 2800, Park Place, 666 Burrard St., Vancouver, British Columbia, V6C 2Z7, Canada, as agent for service of process in Canada. Investors are advised that it may not be possible for investors to enforce judgments obtained in Canada against any person or company that is incorporated, continued or otherwise organized under the laws of a foreign jurisdiction or resides outside of Canada, even if the party has appointed an agent for service of process.

The Company’s head and registered office is located at 505 Consumers Road, Suite 803, Toronto, Ontario, M2J 4Z2.

iii

TABLE OF CONTENTS

Page

GLOSSARY OF TERMS	1
Defined Terms	1
Table of Abbreviations	4
GENERAL MATTERS	6
About this Prospectus	6
Interpretation	6
Currency Presentation	6
FINANCIAL STATEMENT PRESENTATION IN THIS PROSPECTUS	6
FORWARD-LOOKING STATEMENTS	7
MARKET AND INDUSTRY DATA	9
MARKETING MATERIALS	9
PROSPECTUS SUMMARY	10
Principal Business of the Company	10
The Offering	10
The Listing	10
Use of Proceeds	10
Risk Factors	11
Summary Consolidated Financial Information	12
CORPORATE STRUCTURE	13
Name, Address and Incorporation	13
Intercorporate Relationships	13
GENERAL DEVELOPMENT AND BUSINESS OF THE COMPANY	14
Overview	14
Overview of Business and Services	18
Products and Services	19
Customers and Sales Channels	22
Operations Process	25
Employees, Specialized Skill and Knowledge	27
Competitive Conditions	27
Third Party Suppliers	30
Pricing and Marketing	31
Regulatory Environment	32
Impact of Environmental Laws and Regulations	35
Intellectual Property	35
Cycles	35
Foreign Operations	35
Economic Dependence	35
Social or Environmental Policies	36
Reorganizations	36
USE OF PROCEEDS	36
Use of Proceeds	36
Total Funds Available	37
Business Objectives and Milestones	38

DIVIDENDS OR DISTRIBUTIONS	40
SELECTED FINANCIAL INFORMATION	40
annual MANAGEMENT’S DISCUSSION AND ANALYSIS	41
Overall Performance	41
Selected Annual Information	41
Discussion of Operations and Outlook	45
Legal Matters and Contingent Assets	46
Liquidity	48
Capital Resources	48
Transactions Between Related Parties	49
Key management compensation	49
Critical Accounting Estimates	50
Financial Instruments and Other Instruments (Management of Financial Risks)	52
Subsequent Events	54
interim MANAGEMENT’S DISCUSSION AND ANALYSIS	54
DESCRIPTION OF THE SECURITIES	67
Authorized and Outstanding Securities	67
Common Shares	67
Broker Warrants	67
CONSOLIDATED CAPITALIZATION	67
RSUS, OPTIONS AND WARRANTS TO PURCHASE SHARES	68
PRIOR SALES	69
TRADING PRICE AND VOLUME	70
ESCROWED SECURITIES AND SECURITIES SUBJECT TO CONTRACTUAL RESTRICTION ON TRANSFER	70
Contractual Escrow Securities	70
National Policy 46-201 Escrow	70
PRINCIPAL SHAREHOLDERS	71
DIRECTORS AND EXECUTIVE OFFICERS	72
Biographies of Directors and Executive Officers	73
Corporate Cease Trade Orders and Bankruptcies	75
Penalties or Sanctions	75
Personal Bankruptcies	76
Conflicts of Interest	76
EXECUTIVE COMPENSATION	76
Executive Compensation	76
Compensation of Named Executive Officers	77
Stock Options and Other Compensation Securities and Instruments	78
Stock Option Plan and Other Incentive Plans	78
Employment, Consulting and Management Agreements	82
Oversight and Description of Director and NEO Compensation	83
Pension	85
Changes Subsequent to Year-End	85
INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS	86
AUDIT COMMITTEE	86
Audit Committee Charter	86
Composition of the Audit Committee	86
Relevant Education and Experience	86
Mandate and Responsibilities of the Audit Committee	86

Audit Committee Oversight	86
Pre-Approval Policies and Procedures	87
External Auditor Service Fees (By Category)	87
CORPORATE GOVERNANCE	87
Board of Directors	87
Directorships	88
Orientation and Continuing Education	88
Ethical Business Conduct	88
Nomination of Directors	89
Compensation	89
Other Board Committees	89
Assessments	89
Insider Trading Policy	89
PLAN OF DISTRIBUTION	89
Certificates	90
Commissions and Expenses	91
RISK FACTORS	91
Risks Related to Our Company and Our Industry	91
Risks Associated With the Offering and Common Shares	104
ELIGIBILITY FOR INVESTMENT	107
CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS	108
Holders Resident in Canada	108
Holders Not Resident in Canada	110
PROMOTERS	111
LEGAL PROCEEDINGS	111
INTERESTS OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS	112
AUDITORS	112
TRANSFER AGENT AND REGISTRAR	112
MATERIAL CONTRACTS	112
LEGAL MATTERS	113
INTERESTS OF EXPERTS	113
OTHER MATERIAL FACTS	113
PURCHASERS’ STATUTORY RIGHT OF WITHDRAWAL AND RESCISSION	113
FINANCIAL STATEMENTS	113

‎SCHEDULE A - SOLARBANK FINANCIAL STATEMENTS
SCHEDULE B‎ - AUDIT COMMITTEE CHARTER
SCHEDULE C - DISCLOSURE AND CONFIDENTIALITY POLICY
SCHEDULE D - INSIDER TRADING POLICY

iii

GLOSSARY OF TERMS

The following is a glossary of certain defined terms used throughout this Prospectus. This is not an exhaustive list of defined terms used in this Prospectus and additional terms are defined throughout. Terms and abbreviations used in the financial statements of the Company are defined therein.

Defined Terms

“Advisory Warrant”	means transferrable Common Share purchase warrants of the Company, with each Advisory Warrant entitling the holder, upon the closing of the Offering, to purchase one Common Share up to the day that is five years from the date of issuance thereof at a price of $0.10 per Common Share.
“Agency Agreement”	has the meaning ascribed thereto on the cover page of this Prospectus.
“Agent”	has the meaning ascribed thereto on the cover page of this Prospectus.
“Agent’s Fee”	has the meaning ascribed thereto on the cover page of this Prospectus.
“Audit Committee”	means the audit committee of the Company.
“Board” or “Board of Directors”	means the board of directors of the Company.
“Broker Warrant”	has the meaning ascribed thereto the cover page of this Prospectus.
“Broker Warrant Share”	has the meaning ascribed thereto on the cover page of this Prospectus.
“CEO”	means Chief Executive Officer.
“CFO”	means Chief Financial Officer.
“Closing Date”	means the date of closing of the Offering.
“Common Shares”	means the common shares without par value in the capital of the Company.
“company”	means, unless specifically indicated otherwise, a corporation, incorporated association or organization, body corporate, partnership, trust, association or other entity other than an individual.
“Company” or “SolarBank”	means SolarBank Corporation, a corporation existing under the OBCA.
“Conversion Unit”	means a unit issuable on the conversion of the Convertible Loan consisting of one Common Share, one Series A Warrant and one Series B Warrant.
“Convertible Loan”	has the meaning ascribed thereto under “General Development and Business of the Company – Financings”.
“Corporate Finance Fee”	has the meaning ascribed thereto on the cover page of this Prospectus.
“CRA”	means the Canada Revenue Agency.

“CSE” or “Exchange”	means the Canadian Securities Exchange.
“CSE Approval”	means conditional approval or acceptance of the CSE of the listing of the Common Shares on the CSE.
“GAAP”	means generally accepted accounting principles in Canada, which is “IFRS” meaning International Financial Reporting Standards.

“Insider”	means:

	(a)	a director or senior officer of the Company;
	(b)	a director or senior officer of a company that is itself an Insider or subsidiary of the Company,
	(c)	a Person that beneficially owns or controls, directly or indirectly, shares carrying more than 10% of the voting rights attached to all outstanding voting shares of the Company; or
	(d)	the Company itself if it holds any of its own securities.

“Listing Date”	means date the Common Shares commence trading on the CSE.
“MD&A”	means Management’s Discussion and Analysis.
“Named Executive Officers” or “NEO”	has the meaning ascribed thereto under “Executive Compensation – Executive Compensation”.
“NI 41-101”	means National Instrument 41-101 – General Prospectus Requirements, of the Canadian Securities Administrators.
“NI 51-102”	means National Investment 51-102 – Continuous Disclosure, of the Canadian Securities Administrators.
“NI 52-110”	means National Investment 52-110 – Audit Committees, of the Canadian Securities Administrators.
“NP 46-201”	means National Policy 46-201 – Escrow for Initial Public Offerings, of the Canadian Securities Administrators.
“OBCA”	means the Business Corporations Act (Ontario).
“Offered Shares”	has the meaning ascribed thereto on the cover page of this Prospectus.
“Offering”	means the distribution of the Offered Shares pursuant to this Prospectus.
“Offering Price”	has the meaning ascribed thereto on the cover page of this Prospectus.
“Options”	means stock options to acquire Common Shares issuable pursuant to the Share Compensation Plan.
“Over-Allotment Option”	has the meaning ascribed thereto on the cover page of this Prospectus.

“Person”	means a company, individual or trust.
“Principal”	means, collectively, Richard Lu, Sam Sun, Andrew van Doorn, Tracy Zheng, Olen Aasen, Paul Pasalic and Paul Sparkes.
“Principal Regulator”	means the Ontario Securities Commission.
“Promoter”	means (a) a person or company who, acting alone or in conjunction with one or more other persons, companies or a combination thereof, directly or indirectly, takes the initiative in founding, organizing or substantially reorganizing the business of an issuer, or (b) a person or company who, in connection with the founding, organizing or substantial reorganizing of the business of an issuer, directly or indirectly, receives in consideration of services or property, or both services and property, 10% or more of any class of securities of the issuer or 10% or more of the proceeds from the sale of any class of securities of a particular issue, but a person or company who receives such securities or proceeds either solely as underwriting commissions or solely in consideration of property shall not be deemed a promoter within the meaning of this definition if such person or company does not otherwise take part in founding, organizing, or substantially reorganizing the business.
“Regulation S”	means Regulation S promulgated under the U.S. Securities Act.
“RSUs”	means restricted share units that upon vesting are redeemed for Common Shares issuable pursuant to the Share Compensation Plan.
“Securities Commissions”	means the securities regulatory authorities of the offering jurisdictions, being the provinces of British Columbia, Alberta and Ontario.
“SEDAR”	means the System for Electronic Document Analysis and Retrieval maintained by the Canadian Securities Administrators.
“Series A Warrant”	means transferrable Common Share purchase warrants of the Company forming part of the Conversion Units, with each Series A Warrant entitling the holder, upon satisfaction of the Series A Warrant Vesting Condition, to purchase one Common Share up to the Warrant Expiry Date at a price of $0.50 per Common Share.
“Series A Warrant Vesting Condition”	means the Series A Warrants shall become exercisable upon the Company attaining a fully diluted market capitalization of $20 million calculated by multiplying all of the issued and outstanding Common Shares and convertible securities of the Company by its closing price on the stock exchange where its primary trading occurs.
“Series B Warrant”	means a transferrable Common Share purchase warrants of the Company forming part of the Conversion Units, with each Series B Warrant entitling the holder, upon satisfaction of the Series B Warrant Vesting Condition, to purchase one Common Share up to the Warrant Expiry Date at a price of $0.50 per Common Share.
“Series B Warrant Vesting Condition”	means the Series B Warrants shall become exercisable upon the Company completing a listing on a senior Canadian or United States stock exchange such that it is not designated as a “Venture Issuer” as defined in NI 51-102.
“Shareholders”	means holders from time to time of Common Shares.
“Share Compensation Plan”	means the share compensation plan of the Company adopted on November 4, 2022.

“SolarBank Financial Statements”	means, collectively: (a) the audited financial statements of the Company for the years ended June 30, 2022 and June 30, 2021, together with the notes thereto and the auditors’ report thereon, (b) the unaudited interim financial statements of the Company for the three months ended September 30, 2022 together with the notes thereto; a copy of each of which is attached hereto at Schedule “A”.
“Tax Act”	means the Income Tax Act (Canada) and the regulations promulgated thereunder, as amended.
“Warrant Expiry Date”	means 60 months from the Closing Date.
“Warrants”	means the Advisory Warrants, Series A Warrants and Series B Warrants.
“U.S. Exchange Act”	means the U.S. Securities Exchange Act of 1934, as amended.
“U.S. Securities Act”	means the U.S. Securities Act of 1933, as amended.
“USA”, “United States”, “U.S.” or “US”	means the United States of America, its territories and possessions, and any state of the United States, and the District of Columbia.

Table of Abbreviations

“BOS”	means balance-of-system
“BTM”	means behind-the-meter
“C&I”	means commercial and industrial
“COD”	means commercial operations date
“CRCE”	means Canadian Renewable Conservation Expenses
“EPC”	means engineering, procurement and construction
“FIT”	means Feed-In-Tariff
“GHG”	means Greenhouse Gas
“GW”	means Gigawatt
“IEA”	means International Energy Agency
“IESO”	means Independent Electricity System Operator
“IPP”	means Independent Power Producer
“IRA”	means Inflation Reduction Act of 2022
“ITC”	means Investment Tax Credit

“kW”	means Kilowatt
“kWh”	means Kilowatt hour
“kWp”	means Kilowatt peak
“MPPT”	means Maximum Power Point tracking
“MW”	means Megawatt
“MWac”	means Mega-Watt, Alternating Current
“MWp”	means Megawatt peak
“NMCA”	means Net Metering Credit Agreement
“NTP”	means Notice to Proceed
“NZ2050”	Means Net-Zero by 2050
“O&M”	means operations and management
“PCDC”	means Pre-Construction Development Costs
“PO”	means purchase order
“PPA”	means Power Purchase Agreement
“PTO”	means Permission to Operate
“PV”	means photovolatic
“QA/QC”	means quality assurance/quality control
“REC”	means Renewable Energy Certificate
“RPS”	means Renewable Portfolio Standards
“VDER”	Means Value of Distributed Energy Resources

GENERAL MATTERS

About this Prospectus

Investors should rely only on the information contained in this Prospectus and are not entitled to rely on certain parts of the information contained in this Prospectus to the exclusion of others. Neither the Company nor the Agent have authorized anyone to provide investors with additional or different information. The information contained on www.abundant.solar or any affiliated website is not intended to be included in or incorporated by reference into this Prospectus and prospective investors should not rely on such information when deciding whether or not to purchase the Offered Shares. Any graphs, tables or other information demonstrating our historical performance contained in this Prospectus are intended only to illustrate past performance and are not necessarily indicative of the Company’s future performance. Neither the Company nor the Agent are offering to sell these securities in any jurisdiction where the offer or sale is not permitted. The information contained in this Prospectus is accurate only as of the date of this Prospectus or the date otherwise indicated, regardless of the time of delivery of this Prospectus or any sale of the Offered Shares. The Company’s business, financial condition, results of operations and prospects may have changed since the date of this Prospectus.

If, after the date that this Prospectus is filed but before the filing of a final prospectus, a material adverse change occurs, the Company will be required to file an amendment to the Prospectus as soon as practicable, but in any event, within 10 days after the material adverse change occurs. If, after the date that a final prospectus is filed but before the completion of the distribution under the final prospectus, a material change occurs, the Company will be required to file and deliver to investors an amendment to the final prospectus as soon as practicable, but in any event within 10 days after the material change occurs.

The Agent is not offering to sell the Offered Shares in any jurisdiction where the offer or sale of such securities is not permitted. For investors outside Canada, neither the Company nor the Agent have done anything that would permit the Offering or distribution of this Prospectus in any jurisdiction where action for that purpose is required, other than in Canada. Investors are required to inform themselves about and to observe any restrictions relating to the Offering and the distribution of this Prospectus.

Interpretation

Unless otherwise noted or the context indicates otherwise “we”, “us”, “our”, “SolarBank” or the “Company” refer to SolarBank Corporation together with its direct and indirect subsidiaries, as the context requires.

Certain capitalized terms and phrases used in this prospectus are defined under “Glossary of Terms”. Words importing the singular number include the plural, and vice versa, and words importing any gender include all genders.

Currency Presentation

Unless stated otherwise or as the context otherwise requires, all references to $, C$ or dollar amounts in this Prospectus are references to the lawful currency of Canada, and all references to US$ or United States Dollars are to the lawful currency of the United States.

FINANCIAL STATEMENT PRESENTATION IN THIS PROSPECTUS

‎The following financial statements of the Company and its subsidiaries have been prepared in accordance with International Financial Reporting Standards (“IFRS”) and are included in this Prospectus (see “Financial Statements”):

1.	the audited financial statements of the Company for the years ended June 30, 2022 and June 30, 2021, together with the notes thereto and the auditors’ report thereon; and

2.	the unaudited interim financial statements of the Company for the three months ended September 30, 2022 together with the notes thereto.

FORWARD-LOOKING STATEMENTS

This Prospectus contains “forward-looking statements” or “forward-looking information” (collectively “forward-looking statements”) within the meaning of applicable securities laws. Forward-looking statements contained herein are based on current expectations, estimates, forecasts, projections, beliefs and assumptions made by management of the Company about the industry in which it operates. Such statements include, in particular, statements about the Company’s plans, strategies and prospects under the headings “Summary”, “Risk Factors”, and “Management’s Discussion and Analysis”. In some cases, these forward-looking statements can be identified by words or phrases such as “may”, “might”, “will”, “expect”, “anticipate”, “estimate”, “intend”, “plan”, “indicate”, “seek”, “believe”, “predict” or “likely”, or the negative of these terms, or other similar expressions intended to identify forward-looking statements. These statements are not guarantees of future performance and involve assumptions and risks and uncertainties that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed, implied or forecasted in such forward-looking statements. The Company does not intend, and disclaims any obligation, to update any forward-looking statements after it files this Prospectus, whether as a result of new information, future events or otherwise, except as required by the securities laws. These forward looking statements are made as of the date of this Prospectus.

The Company has based these forward-looking statements on its current expectations and projections about future events and financial trends that it believes might affect its financial condition, results of operations, business strategy and financial needs. These forward-looking statements include, among other things, statements relating to:

	●	the intention to complete the listing of the Common Shares (including the Offered Shares) on the CSE and all transactions related thereto;
	●	the completion, size, Offering Price, expenses and timing of the closing of the Offering;
	●	the use of the net proceeds of the Offering and the use of the available funds following completion of the Offering;
	●	the Company’s expectations regarding its revenue, expenses and operations;
	●	industry trends and overall market growth;
	●	the Company’s growth strategies;
	●	expectations relating to director and executive officer compensation levels;
	●	the Company’s anticipated cash needs and its needs for additional financing;
	●	the Company’s intention to grow the business and its operations;
	●	expectations with respect to future costs;
	●	expectations with respect to hiring of additional professional to increase volume;
	●	the Company’s competitive position and the regulatory environment in which the Company operates;
	●	the Company’s expectation that revenues derived from its operations, together with fund-raising activities, including its initial public offering, will be sufficient to cover its expenses during 2022 and over the next 12 months;
	●	the Company’s expected business objectives for the next 12 months;
	●	the Company’s ability to obtain additional funds through the sale of equity or debt commitments;
	●	the effect of the Novel Coronavirus (“COVID-19”) outbreak on the ability of the Company to carry on business; and
	●	beliefs and intentions regarding the ownership of material trademarks and domain names used in connection with the design, production, marketing, distribution and sale of our products.

Forward-looking statements are based on certain assumptions and analyses made by the Company in light of the experience and perception of historical trends, current conditions and expected future developments and other factors it believes are appropriate, and are subject to risks and uncertainties. In making the forward looking statements included in this Prospectus, the Company has made various material assumptions, including but not limited to: (i) obtaining the necessary regulatory approvals; (ii) that regulatory requirements will be maintained; (iii) general business and economic conditions; (iv) the Company’s ability to successfully execute its plans and intentions; (v) the availability of financing on reasonable terms; (vi) the Company’s ability to attract and retain skilled staff; (vii) market competition; (viii) the products and services offered by the Company’s competitors; (ix) that the Company’s current good relationships with its service providers and other third parties will be maintained; and (x) government subsidies and funding for renewable energy will continue as currently contemplated. Although the Company believes that the assumptions underlying these statements are reasonable, they may prove to be incorrect, and the Company cannot assure that actual results will be consistent with these forward-looking statements. Given these risks, uncertainties and assumptions, prospective purchasers of Offered Shares should not place undue reliance on these forward-looking statements. Whether actual results, performance or achievements will conform to the Company’s expectations and predictions is subject to a number of known and unknown risks, uncertainties, assumptions and other factors, including those listed under “Risk Factors”, which include:

	●	the Company may be adversely affected by volatile solar power market and industry conditions; in particular, the demand for its services may decline, which may reduce its revenues and earnings;
	●	the execution of the Company’s growth strategy depends upon the continued availability of third-party financing arrangements for the Company and its customers;
	●	the Company’s future success depends partly on its ability to expand the pipeline of its energy business in several key markets;
	●	governments may revise, reduce or eliminate incentives and policy support schemes for solar and battery storage power, which could cause demand for the Company’s services to decline;
	●	general global economic conditions may have an adverse impact on our operating performance and results of operations;
	●	the Company’s project development and construction activities may not be successful;
	●	developing and operating solar projects exposes the Company to various risks;
	●	the Company faces a number of risks involving PPAs and project-level financing arrangements, including failure or delay in entering into PPAs, defaults by counterparties and contingent contractual terms;
	●	the Company is subject to numerous laws, regulations and policies at the national, regional and local levels of government in the markets where it does business. Any changes to these laws, regulations and policies may present technical, regulatory and economic barriers to the purchase and use of solar power and battery storage products, solar projects and solar electricity;
	●	the markets in which the Company competes are highly competitive and evolving quickly;
	●	an anti-circumvention investigation could adversely affect the Company by potentially raising the prices of key supplies for the construction of solar power projects;
	●	the Company’s quarterly operating results may fluctuate from period to period;
	●	foreign exchange rate fluctuations;
	●	a change in the Company’s effective tax rate can have a significant adverse impact on its business;
	●	seasonal variations in demand linked to construction cycles and weather conditions may influence the Company’s results of operations;
	●	the Company may be unable to generate sufficient cash flows or have access to external financing necessary to fund planned operations and make adequate capital investments in solar project development;
	●	the Company may incur substantial additional indebtedness in the future;
	●	the Company is subject to risks from supply chain issues;
	●	risks related to inflation;
	●	unexpected warranty expenses that may not be adequately covered by the Company’s insurance policies;
	●	if the Company is unable to attract and retain key personnel, it may not be able to compete effectively in the renewable energy market;
	●	there are a limited number of purchasers of utility-scale quantities of electricity and entities that have the ability to interconnect projects to the grid, which exposes the Company and its utility scale solar projects to additional risk;
	●	compliance with environmental laws and regulations can be expensive;
	●	corporate responsibility, specifically related to Environmental, Social and Governance matters and unsuccessful management of such matters may adversely impose additional costs and expose the Company to new risks;
	●	the impact of COVID-19 on the Company is unknown at this time and the financial consequences of this situation cause uncertainty as to the future and its effects on the economy and the Company;
	●	the Company has limited insurance coverage;
	●	the Company will be reliant on information technology systems and may be subject to damaging cyberattacks;
	●	the Company does not anticipate paying cash dividends;

	●	the Company may become subject to litigation;
	●	discretion of the Company on use the net proceeds of the Offering.
	●	no guarantee on how the Company will use its available funds;
	●	the Company will be subject to additional regulatory burden resulting from its public listing on the CSE;
	●	the Company cannot assure you that a market will develop or exist for the Common Shares or what the market price of the Common Shares will be;
	●	the market price for Common Shares may be volatile and subject to wide fluctuations in response to numerous factors, many of which are beyond our control;
	●	future sales of Common Shares by existing shareholders could reduce the market price of the Company’s Common Shares;
	●	the Company will continue to sell securities for cash to fund operations, capital expansion, mergers and acquisitions that will dilute the current shareholders; and
	●	future dilution as a result of financings.

These factors should not be considered exhaustive. If any of these risks or uncertainties materialize, or if assumptions underlying the forward-looking statements prove incorrect, actual results might vary materially from those anticipated in those forward-looking statements.

Information contained in forward-looking statements in this Prospectus is provided as of the date of this Prospectus, and we disclaim any obligation to update any forward-looking statements, whether as a result of new information or future events or results, except to the extent required by applicable securities laws. Accordingly, potential investors should not place undue reliance on forward-looking statements or the information contained in those statements.

All of the forward-looking statements contained in this Prospectus are expressly qualified by the foregoing cautionary statements. Investors should read this entire Prospectus and consult their own professional advisors to assess the income tax, legal, risk factors and other aspects of their investment.

MARKET AND INDUSTRY DATA

Unless otherwise indicated, information contained in this Prospectus concerning the Company’s industry and the markets in which it operates, including general expectations and market position, market opportunities and market share, is based on information from independent industry organizations, other third-party sources (including industry publications, surveys and forecasts) and management studies and estimates.

Unless otherwise indicated, the Company’s estimates are derived from publicly available information released by independent industry analysts and third-party sources as well as data from the Company’s internal research and knowledge of the renewable energy market and economy, and include assumptions made by the Company which management believes to be reasonable based on their knowledge of the Company’s industry and markets. The Company’s internal research and assumptions have not been verified by any independent source, and it has not independently verified any third-party information. While the Company believes the market position, market opportunity and market share information included in this Prospectus is generally reliable, such information is inherently imprecise. In addition, projections, assumptions and estimates of the Company’s future performance and the future performance of the industry and markets in which it operates are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described under the heading “Forward-Looking Statements” and “Risk Factors”. For the avoidance of doubt, nothing stated in this paragraph operates to relieve any party from liability for any misrepresentation contained in this Prospectus under applicable Canadian securities laws.

MARKETING MATERIALS

A “template version” of the following “marketing materials” (each such term as defined in NI 41-101) for the Offering has been filed with the Securities Commissions, and are specifically incorporated by reference into this Prospectus:

1.	the investor presentation of the Company dated February 10, 2023 entitled “Investor Presentation – February 10, 2023” filed on SEDAR on February 10, 2023 (the “Investor Presentation”).

The Investor Presentation referred to above are available under the Company’s profile on SEDAR at www.sedar.com.

In addition, any template version of any other marketing materials filed in connection with this Offering, after the date hereof but prior to the termination of the distribution of the Offered Shares under this Prospectus (including any amendments to, or an amended version of, any template version of any marketing materials), is deemed to be incorporated by reference herein. Any template version of any marketing materials utilized in connection with this Offering are not part of this Prospectus to the extent that the contents of the template version of the marketing materials have been modified or superseded by a statement contained in this Prospectus.

PROSPECTUS SUMMARY

The following is a summary of the principal features of this Prospectus and the Offering. and does not contain all of the information an investor should consider before investing in the Offered Shares and should be read together with the more detailed information and financial data and statements contained elsewhere in this Prospectus, especially the “Risk Factors” section of this Prospectus. Certain capitalized terms and phrases used in this Prospectus are defined in the “Glossary of Terms” beginning on page 1.

Principal Business of the Company

The Company is an independent renewable and clean energy project developer and asset operator based in Canada and the United States. The Company is engaged in the development and operation of solar photovoltaic (“PV”) power generation projects in the province of Ontario and the state of New York. The Company’s head and registered office is located at 505 Consumers Road, Suite 803, Toronto, Ontario, M2J 4Z2.

The Offering

Pursuant to the Agency Agreement, the Company has appointed the Agent to act as its agent to offer for sale to the public, on a “commercially reasonable efforts” basis, up to 7,000,000 Offered Shares at the Offering Price per Offered Share, for gross proceeds of up to $5,250,000, subject to compliance with all necessary legal requirements and to the conditions of the Agency Agreement. The Company has also granted the Agent the Over-Allotment Option exercisable at any time up to 48 hours prior to the Closing Date to acquire up to 1,050,000 Additional Shares at the Offering Price, representing 15% of the maximum Offering.

The Company has agreed to pay to the Agent: (a) the Agent’s Fee which is equal to 6.0% of the gross proceeds of the Offering, and (b) an aggregate number of Broker Warrants equal to 6.0% of the aggregate number of Offered Shares issued pursuant to the Offering, in each case, including pursuant to any exercise of the Over-Allotment Option. Each Broker Warrant will entitle the Agent to purchase one Broker Warrant Share at the Offering Price for a period of 36 months following the Closing Date. In addition, the Agent shall be paid a Corporate Finance Fee of $35,000 (plus applicable taxes).

See “Plan of Distribution”.

The Listing

The CSE has conditionally approved the listing of the Common Shares. Listing is subject to the Company fulfilling all of the requirements of the CSE on or before August 2, 2023.

Use of Proceeds

Use of Proceeds		Amount ($)
Completion of engineering and permitting, along with procurement deposit, for two projects located in New York, USA.		1,000,000
Completion of interconnection studies, engineering and permitting, along with interconnection deposit, and procurement bid application fee for one project located in New York, USA.		900,000

Working capital for one project in Alberta, Canada that provides for the completion of engineering work and placement of orders for main project components.		800,000
Business development initiatives in the United States involving completion of documentation to advance six projects to the notice to proceed stage.		1,600,000
Salaries for new hires.		418,250
Total		4,718,250

If the Offering is fully subscribed and the Over-Allotment Option is exercised in full, the net proceeds to the Company from the Offering, after deducting Agent’s Fee, the balance of the Corporate Finance Fee and estimated expenses of the Offering will be $5,458,500. Any additional proceeds received from the exercise of the Over-Allotment Option will be used for working capital.

Risk Factors

An investment in the securities of the Company is speculative and involves a high degree of risk. The following are a summary of certain of the risk factors described elsewhere herein. An investment should only be considered by investors who can afford the total loss of their investment. A prospective investor in Common Shares should be aware that there are various risks that could have a material adverse effect on, among other things, the properties, business and condition (financial or otherwise) of the Company. These risk factors which are listed below, together with all of the other information contained in this Prospectus, including information contained in the section entitled “Forward-Looking Statements”, should be carefully reviewed and considered before an investment in Common Shares is made. The risks listed below do not necessarily comprise all the risks faced by the Company.

Risks include those related to: The volatile solar power market and industry conditions; availability of third-party financing ‎arrangements for us and our customers; tight credit markets; ability to expand the pipeline of our energy business in several key ‎markets; the revision, reduction or elimination of incentives and policy support schemes for solar and battery storage ‎power; general global economic conditions; success and timing of our project development and construction activities; the development and operation of solar projects; PPAs and project-level financing arrangements; laws, regulations and policies at the national, regional and local levels of ‎government; competition; anti-circumvention investigations; the fluctuations in our quarterly operating results; Fluctuations in exchange rates; changes in our effective tax rate; Seasonal variations in demand linked to construction cycles and weather conditions; inability to generate sufficient cash flows or have access to external financing necessary to fund ‎planned operations and make adequate capital investments in solar project development; incurring substantial additional indebtedness in the future; supply chain issues; inflation in many countries and regions; unexpected warranty expenses that may not be adequately covered by our insurance ‎policies; inability to attract, train, retain, and successfully integrate key personnel into our management team; limited number of purchasers of utility-scale quantities of electricity and entities that have the ability ‎to interconnect projects to the grid; compliance with environmental laws and regulations; corporate responsibility; natural disasters, health epidemics, such as COVID-19, and other catastrophes; limited insurance coverage; information technology systems and data security breaches; ‎the Company having a negative cash flow for the periods ended June 30, 2022 and June 30, 2021; litigation; the fact the Company does not anticipate paying cash dividends; uncertainty and discretion in the use of proceeds; there being no market for Common Shares currently existing; additional regulatory burden resulting from its public listing on the CSE; the market price for the Company’s Common Shares may be volatile and subject to wide fluctuations in response ‎to numerous factors, many of which are beyond the Company’s control; the Company may need to raise additional capital in the future; the Company may be unable to support existing or new business if it does not raise sufficient funds; and dilution of the Common Shares.

See “‎Risk Factors”.

Summary Consolidated Financial Information

The following selected financial information has been derived from, and is qualified in its entirety by, the SolarBank Financial Statements, and the notes thereto (included at Schedule “A” to this Prospectus), and should be read in conjunction with the respective MD&A thereto (see “Management’s Discussion and Analysis”).

Item	Interim Period Ended September 30, 2022 (Unaudited)			Financial Year Ended June 30, 2022 (Audited)			Financial Year Ended June 30, 2021 (Audited)
Revenue	$	5,480,452		$	10,197,619		$	7,346,581
Total Expenses⁽¹⁾	$	(5,343,785	)	$	(10,558,165	)	$	(7,209,754	)
Net and Comprehensive Income (Loss)	$	164,482		$	31,313		$	(199,917	)
Current Assets	$	9,625,976		$	8,983,109		$	10,254,735
Total Assets	$	9,827,628		$	9,194,537		$	10,283,255
Total Liabilities	$	5,222,561		$	4,753,922		$	5,873,953
Shareholders’ Equity	$	4,605,097		$	4,440,615		$	4,409,302

Note:

(1)	Total Expenses equal Total cost of goods sold plus total operating expenses.

See “Selected Financial Information”.

CORPORATE STRUCTURE

Name, Address and Incorporation

The Company was incorporated under the OBCA on September 23, 2013 as 2389017 Ontario Inc. On October 11, 2013 its name was changed to Abundant Solar Energy Inc. On October 17, 2022, it amended its Articles to establish an authorized capital consisting of an unlimited number of Common Shares. On October 17, 2022 its name was changed to SolarBank Corporation. On October 7, 2022 it completed a share split on a 1:160 basis.

The Company’s head and registered office is located at 505 Consumers Road, Suite 803, Toronto, Ontario, M2J 4Z2.

Intercorporate Relationships

The corporate structure of the Company is outlined in the diagram below and is current as at the date of filing of this Prospectus.

Subsidiaries

The Company’s subsidiary Abundant Solar Power Inc. (“Abundant USA”) was incorporated in the State of Delaware on December 15, 2016. The registered address of Abundant USA is 850 New Burton Road, Suite 201, City of Dover, County of Kent, Delaware, 19904 United States. Abundant USA was incorporated to carry out the Company’s operations in the United States.

The Company’s subsidiary Abundant Construction Inc. (“ACI”) was incorporated in the Province of Ontario on November 8, 2018. The registered address of ACI is 505 Consumers Road, Suite 803, Toronto, Ontario, M2J 4Z2. ACI was incorporated to act as the counter-party for certain of the Company’s construction agreements.

The Company’s subsidiary 2467264 Ontario Inc. (“246 Ontario”) was incorporated in the Province of Ontario on May 21, 2015. The registered address of 505 Consumers Road, Suite 803, Toronto, Ontario, M2J 4Z2. ACI was incorporated to develop solar power projects in the Province of Ontario with the support of 2543154 Ontario Inc., an arm’s length third party, who holds the remaining 51.1% of 246 Ontario. 2543154 Ontario Inc. is a corporation that is owned 50% by the MoCreebec Eeyoud and 50% by the Aroland First Nation, both First Nations Communities.

GENERAL DEVELOPMENT AND BUSINESS OF THE COMPANY

Overview

The Company is an independent renewable and clean energy project developer and asset operator based in Canada and the United States. The Company is engaged in the development and operation of solar photovoltaic (“PV”) power generation projects in Canada and the United States. The Company’s mission is to support the energy transition in North America through deployment of clean energy at a distributed scale closer to where consumption occurs. Its objective is to scale-up as a leading developer, owner and operator of a significant fleet of distributed solar power assets that have economic and technical value. The Company originates, develops, designs and builds solar power projects. The Company is also gaining expertise in battery storage, co-generation and other technologies that will enable greater penetration of clean energy.

The Company was originally founded in Canada in 2013 as Abundant Solar Energy Inc., and in 2016 established a 100% owned U.S. subsidiary, Abundant Solar Power Inc., to meet the demand for renewable energy in both countries.

The Company’s success started with the renewable Feed-In-Tariff (“FIT”) program for rooftop and ground mount solar arrays in Ontario, Canada. Since then, the Company has established itself as a trusted developer, engineer and asset operator that enables the proliferation of renewable and clean energy in the pursuit of Net Zero carbon emission goals in the fight against climate change and global warming.

The Company’s core competency is in deeply understanding and mastering the ‘local playbook’ of standard offer programs in numerous energy markets in North America allowing it to successfully gain market share while maintaining low overhead and capital-at-risk. The Company provides simple, reliable, and energy-resilient solutions to its customers that significantly reduce their carbon footprint. The Company has extensive experience working with 1,000+ customers including municipalities, First Nations, community co-operatives, regional economic planning authorities, commercial and industrial businesses, and landowners that value the numerous benefits of resilient renewable energy solutions.

The Company’s leadership team has over 100 years of combined expertise in the renewable and clean energy industry coupled with a strongly defined philosophy and financial vision for successful growth. The team brings expertise in site origination, utility grid interconnection, permitting, financing, Engineering, Procurement and Construction (“EPC”), Operation & Maintenance, and asset management of solar PV power plants to the renewable and clean energy industry. As a total solution provider, the Company brings certainty at speed and scale in site control, government relations, grid interconnection, global supply chain and project financing to bring grid-connected solar power plants to productive operation.

The Company focuses on grid connected solar PV electricity power plants. With its full in-house development, engineering and construction expertise, the Company’s capabilities span the value chain from development, EPC, financing, and, while not yet an Independent Power Producer (“IPP”), performs asset management which is a core function of an IPP. The Company’s core business consists of:

●

Development: The Company identifies, evaluates and secures control of suitable solar development sites; obtains grid interconnection from utilities; acquires permits from government authorities; and engages solar energy subscribers and/or Power Purchase Agreement (“PPA”) clients as off-takers. A PPA, also referred to as an off-take agreement, is a contract ‎between two parties, one which generates electricity (the seller) and one which is looking to ‎purchase electricity (the buyer or off-taker). The PPA defines all of the commercial terms for ‎the sale of electricity between the two parties, including when the project will begin ‎commercial operation, schedule for delivery of electricity, penalties for under delivery, ‎payment terms, and termination. A PPA requires active management to reconcile monthly ‎deliveries, penalties and payment for electricity.‎

	●	EPC: The Company engineers, procures and constructs efficient, eco-friendly, renewable solar power plants for industrial, commercial, community and utility electricity market, using high engineering standards and the latest technology.
	●	Financing: The Company assists with securing sponsor equity, tax equity, long-term debt, and construction financing to deploy solar power plants.
	●	Independent Power Producer: The Company is not yet an IPP. However, the Company does carry out one of the core functions of an IPP as it operates and maintains solar power plants for maximized production (O&M services described further below) and oversees solar power subscribers through two customer support centers in Boston and Chicago. The Company manages PPA and off-take agreements as an asset manager.

O&M stands for Operations and Maintenance. It refers to the set of activities, most of them technical in nature, which enable power plants to perform their task of producing energy at or above the expected level of performance, in compliance with applicable regulations. It encompasses several ongoing maintenance processes along with the replacement and disabling of broken and damaged system and structural components. O&M is essential to ensuring that solar power plants sustain themselves for their expected system life. O&M consists of three fundamental and principal functions:

	●	Preventative maintenance.
	●	Reactive maintenance: rapid identification, analysis, and resolution of issues and problems.
	●	Comprehensive and detailed monitoring and reporting with adequate and requisite transparency.

In the C&I solar segment, most solar companies perform O&M for their own systems, working with local electrical contractors and groundskeepers.

In carrying out its O&M services, the Company’s service standards are set out in its O&M contracts. These service standards have been developed over time based on ‎experience and industry best practices. ‎Referring to government agencies and industry associations ‎such the ‎National Renewable Energy Laboratory in ‎the United States and Solar Power Europe, the ‎standards ‎have been developed based on industry experience, reliability, ‎resilience and ‎maximizing system output. Afterwards ‎experience in the field and the close monitoring of system ‎‎performance has allowed the standards to develop as to ‎adapt to site specific conditions and ‎achieve the highest ‎system output and up time possible.‎ Some references used in the development of the Company’s service standards are as follows: (i) Best Practices for Operation and Maintenance of Photovoltaic and Energy Storage Systems, 3rd ‎Edition ‎‎National Renewable Energy Laboratory, Sandia National Laboratory, SunSpec ‎Alliance, and (ii) the SunShot ‎‎National Laboratory Multiyear Partnership PV O&M ‎Best Practices Working Group ‎Operations and ‎Maintenance Best practices guidelines version 5.0 by Solar power Europe.‎

The scope of work covers all electrical inspections and ‎preventive measures which are comparable to any other electrical system such as a substation or ‎a commercial or industrial building’s electrical connection infrastructure. The scope of work or ‎service standards involve retorquing of electrical connections, testing of electrical components, ‎testing of transformer oil to determine any degradation and mechanical inspections and ‎adjustment of the racking system. ‎

The O&M contract services standards are negotiated mainly on the preventive and reactive maintenance ‎components. For preventive maintenance the standards or scope of work are common and little ‎negotiation takes place aside from increasing frequency of inspections. For the reactive side, ‎negotiation involves rates and response times to unforeseen operational issues.‎

The measurement of the O&M provider’s performance is usually verified by the customer through ‎the performance factor of the system, as well as the monthly report which includes system ‎output and allows for a comparison between predicted performance (e.g., through PVsyst simulation) and ‎actual performance. For reactive maintenance the customer will measure response time and ‎remediation time or “up time”.‎ To date there have been no customer complaints under any of the Company’s O&M contracts.‎

The Company generates revenues via a diverse portfolio of distributed and community solar projects across multiple solar markets including projects with host off-takers, community solar, and net metering projects under programs such as FIT, Value of Distributed Energy Resources (“VDER”), Net Metering Credit Agreements (“NMCAs”), and PPAs. The Company develops solar projects that sell electricity to commercial, industrial, municipal, residential and utility off-takers.

Since incorporation, the Company’s team delivered value in Ontario’s FIT program with the completion of over 150 projects, New York’s Community Solar Program, and an RFP issued by the Maryland Department of Transportation. As a developer, full-service EPC contractor, and asset O&M manager, the Company has been successful in the renewable and clean energy industry working with 1,000 plus stakeholders including property owners, municipalities, indigenous people, co-operatives, electric utilities and regulatory agencies. The Company designed and constructed 100 plus solar power plants, including C&I rooftop installations and ground mount solar farms of varying scale. The Company’s management team has developed, financed and built over 600 C&I projects in Ontario, Minnesota and New York. Through its contracted customer care centers in Boston and Chicago the Company serves more than 5,000 retail electricity customers as community solar subscribers.

The Company’s success in the solar energy market is a result of its creativity, innovation, and ability to think outside of the box, in designing responses to the growing challenges facing the power industry. The Company has managed over $70 million in project financing to-date and has access to low-cost development financing by collaborating with tax-advantaged investment funds seeking CRCE in Canada or federal ITCs in the United States. A tax advantaged investment fund is an investment fund that passes through tax credits to its investors providing investors with tax benefits that allow such funds to offer lower returns to investors. This in turn means that the Company can access funding from such investment funds at a lower cost of capital. An example of a tax-advantaged investment fund is the SFT Group. There is a risk that if tax credits are eliminated or reduced in the future that such investment funds will have difficulty raising capital and as a result the Company may no longer have access to this form of financing.

Three-year history

Financings

On August 1, 2020, the Company entered into a promissory note agreement of $248,081 (US$200,000) with Central New York Enterprise Development Corporation (“CNY”) for a loan with a fixed interest rate of 5% per annum and principal and interest are payable on February 1, 2022. This loan is secured by the following collateral clause: all of the Company’s inventory, equipment, fixtures, accounts, contract rights, chattel paper, security agreements, instruments, deposit accounts, reserves, documents and general intangibles; and all judgements, claims, insurance policies and payments owed or made, accessories, accessions, returns, repossessions, exchanges, substitutions and replacements. Subsequently, the Company has fully repaid the loan in December 2021.

On July 31, 2020, the Company entered into a secured note agreement with TGC Fund III, LP (“TGC”), a customer of the Company, for a loan of $2,483,775 (US$2,000,000). The term loan has an interest rate of 10% per annum to pay for 75% of the interconnection deposits of three projects. Upon TGC purchasing these projects from the Company, the principal and interest amounts are due. TGC purchased two projects as of June 30, 2021 and the third project was expected to close six months after. The third project has been closed subsequently and outstanding term loan has been fully repaid in July 2021.

On January 7, 2021, the Company entered into a term loan agreement with a shareholder for a loan of $656,859 (US$517,017) that comprised of a fixed interest rate of 10% for the first month and 1% for the remaining 11 months, compound monthly. The loan had a maturity date of January 7, 2022 and was secured by the following collateral: all accounts and accounts receivable, all equipment, furniture and fixtures, all inventory, all intangibles, all investments property and securities, all rights to the payment of money, all chattel paper, all deposit accounts, all interconnection security amounts, all properties, accessories, accessions, returns, repossessions, exchanges, substitutions and replacements and all proceeds. In September 2022, the Company fully repaid the shareholder’s loan.

On May 3, 2021, the Company received a Highly Affected Sectors Credit Availability Program loan for a total of $1,000,000 at an interest rate of 4% per annum from the Bank of Montreal. The loan has a ten-year amortization period with interest payments only for the first year. Principal payments commenced in May 2022.

The Company received a Canada Emergency Business Account interest-free loan for a total of $60,000 from the Government of Canada. The loan bears interest at 0% per annum and is repayable by December 31, 2023. If $40,000 is repaid in full on or before December 31, 2023 and certain conditions are met, which include the use of funds for non deferrable operating expenses only, $20,000 of the loan will be forgiven. Alternatively, on December 31, 2023, the Company can exercise the option to extend the loan for a two year term which bears interest at 5% per annum.

On October 3, 2022 the Company completed a convertible bridge loan financing for gross proceeds of $1,250,000 (the “Convertible Loan”). Each Convertible Loan is convertible at the option of the holder thereof into Conversion Units at a conversion price of $0.50 per Conversion Unit at any time. The Convertible Loans mature on the 12 month anniversary of the date of issuance of the Convertible Loans and do not bear interest at any time. Upon the closing of the Offering, the proceeds of the Convertible Loan shall covert into Conversion Units at a conversion price of $0.50 per Conversion Unit. Each Conversion Unit consists of one Common Share, one Series A Warrant and one Series B Warrant.

Other Developments of the Business

On December 21, 2020, the Company entered into Purchase Order with Honeywell International Inc. for the construction of a solar energy facility in New York State in consideration for cash in the amount of US$1,413,694.52. To date the Company has completed six community and net metering solar projects in collaboration with Honeywell in New York State.

On February 9, 2021, the Company entered into an Engineering, Procurement, and Construction Agreement ‎with Solar Troupsburg LLC‎ for the construction and operation of 14.0 MW-DC solar energy facilities located in the Town of Richmond, Ontario County, New York and the Town of Portland, Chautauqua County, New York in consideration for cash in the amount of US$16,269,500. This project was placed into service on October 12, 2022.

On November 15, 2021, the Company entered into an Engineering, Procurement, and Construction Agreement with Abundant Solar Power (VC1) LLC for the construction and operation of 298 kW-DC solar energy facilities located in the Village of Cazenovia, Madison County, New York in consideration for cash in the amount of US$488,321.

On November 15, 2021, the Company entered into a Membership Interest Purchase and Sale Agreement with Solar Alliance Energy DevCo LLC, for the sale of its interest in the Cazenovia Facility. This transaction closed in December 2022.

On January 31 2022, the Company entered into an Engineering, Procurement, and Construction Agreement with Solar Alliance Energy DevCo LLC (US1) for construction and operation of 278 kW-DC solar energy facilities located in the Village of Union Springs, New York ‎in consideration for cash in the amount of US$802,383.20.

Changes in current financial year

Building upon its solid core competencies in full-service development, the Company will deliver an integrated growth solution that has the capacity to generate revenue and grow the business in different revenue streams and that is discussed in this paragraph. For C&I end users, the Company will extend its expertise in rooftop solar to behind-the-meter (“BTM”) solar projects, carports, and building-integrated photovoltaics enabling large property management firms and C&I customers like Honeywell International to achieve corporate Net-Zero commitments. The Company has been in negotiations with C&I customers to achieve this goal. The Company also intends to extend its success in FIT ground mount solar gardens and Community Solar farms to large Utility Scale solar farms with a targeted size of up to 100 MWp. In this regard, the Company has site control of a potential 30 MWp utility solar project and is actively searching for suitable sites that could allow for a solar project of up to 100 MWp. The Company’s track record in operations, maintenance, and asset management create a strong foundation for it to become a successful Independent Power Producer (“IPP”) delivering long-term, sustainable, and profitable growth. The Company’s pipeline has been growing in all aspects of what is being discussed above which is the result of an integrated growth solution.

To achieve this strategic growth goal, the Company will strengthen its team of professionals to increase volume. In 2022 it added additional employees with professional credentials in engineering and accounting. An existing team of 12 professionals with experienced and committed core members will be supplemented by outsourcing certain EPC services to meet a growing volume of business as the Company expects to complete projects with more total MWp in the current fiscal year than were completed in the fiscal year ended June 30, 2022. The Company will continue its tradition in project execution with simplicity, focus, and speed to enhance its leading position in cost competitiveness, with time to COD as a key measure of operation excellence.

Overview of Business and Services

Industry Overview

People need energy for nearly everything they do. The majority of the energy sources on earth are still coal and natural gas, representing close to 60% of global electricity supply.¹ However, fossil fuel reserves are limited.

Conversely, the sun has all the energy our civilization needs. About 173,000,000 GW of Solar energy continue to reach the Earth’s surface.²The US Department of Energy revealed that about 430 quintillion Joules (1.19e+14 kWh) of solar energy strikes the earth every hour.³A single hour of solar energy could provide enough energy to power the planet for a year. Unlike conventional energy sources, it will take 5 billion years for the sun to run out of fuel.⁴

¹International Energy Agency. Global Energy Review 2020. https://www.iea.org/reports/global-energy-review-2020/renewables

²Pierce, E.R. (2016). Top 6 Things You Didn’t Know About Solar Energy. U.S. Department of Energy. ‎ www.energy.gov/articles/top-6-things-you-didnt-know-about-solar-energy.

³Ashrafun Nushra Oishi, A.N., Meer Shadman Shafkat Tanjim and M. Tanseer Ali (2019). Loss Analysis of Market Available Solar Cells and Possible Solutions. Journal of Scientific & Engineering Research, Volume 10, Issue 9, September-2019 ISSN 2229-5518.

⁴Scudder, J. (2015). The sun won’t die for 5 billion years, so why do humans have only 1 billion years left on Earth? https://phys.org/news/2015-02-sun-wont-die-billion-years.html

93% of the global population lives in countries that have an average daily solar PV potential between 3.0 and 5.0 kWh/kWp.⁵ Because of this abundance of solar power, we only need a small percentage of the planet’s surface to harvest enough energy to power the planet. For example, in Ethiopia just 0.005% of the country’s land area could generate sufficient power to cover existing needs, and in Mexico that figure is just 0.1%.⁶

Solar PV potential varies across Canada, with the highest insolation in southern Saskatchewan, Alberta, Manitoba, and Ontario, and the lowest in northern and coastal regions.⁷ The National Energy Board of Canada expects that by 2040, solar power will generate 13% of the country’s electricity.⁸

Solar power is more affordable, accessible, and prevalent in the United States than ever before. From just 0.34 GW in 2008, U.S. solar power capacity has grown to an estimated 97.2 GW today.⁹ This is enough to power the equivalent of 18 million American homes at average consumption.¹⁰ Today, over only a small percentage of U.S. electricity comes from solar energy. According to the US Department of Energy, with aggressive cost reductions, enabling policies, and large-scale electrification, solar could account for as much as 40% of the nation’s electricity supply by 2035 and as much as 45% by 2050.¹¹

Products and Services

The Company recognizes revenue from project development service and EPC services. The Company provides solar energy solutions by developing, permitting, designing and building BTM solar power generation and transmission or distribution electricity grid connected community solar gardens and utility scale solar farms. While the Company’s focus is on delivering solar power plants from site origination to commercial operation, and the operation and management of the solar power assets, the Company also provides renewable and clean energy project development, EPC, O&M and asset management services for a fee.

⁵Solar Photovoltaic Power Potential by County (2020). https://www.worldbank.org/en/topic/energy/publication/solar-photovoltaic-power-potential-by-country

⁶Solar Photovoltaic Power Potential by County (2020). https://www.worldbank.org/en/topic/energy/publication/solar-photovoltaic-power-potential-by-country

⁷Market Snapshot: Which cities have the highest solar potential in Canada? (2018) https://www.cer-rec.gc.ca/en/data-analysis/energy-markets/market-snapshots/2018/market-snapshot-which-cities-have-highest-solar-potential-in-canada.html

⁸National Energy Board. Canada’s Energy Future 2017: Energy Supply and Demand Projections to 2040 (2017) https://www.cer-rec.gc.ca/en/data-analysis/canada-energy-future/archive/2017/2017nrgftr-eng.pd

⁹U.S. Department of Energy. Solar Energy in the United States. https://www.energy.gov/eere/solar/solar-energy-united-states

¹⁰U.S. Department of Energy. Solar Energy in the United States. https://www.energy.gov/eere/solar/solar-energy-united-states

¹¹U.S. Department of Energy. Solar Futures Study (2021) https://www.energy.gov/sites/default/files/2021-09/Solar%20Futures%20Study.pdf

A description of the Company’s three focus areas: BTM solar power generation, community solar and utility scale solar farms are as follows:

Behind-the-Meter (BTM) Solar Power Generation

The most effective method to achieve Net-Zero carbon emissions from buildings is to build them all electric, with grid electricity coming from renewable sources such as solar (long-term) and BTM solar power plants to generate zero emission renewable solar power onsite for the building’s self-use (immediate).

The term “behind-the-meter” refers to energy production and storage systems that directly supply homes and buildings with electricity. Residential and commercial solar panels are considered to be behind-the-meter, as are residential and commercial solar batteries—the energy that is produced or stored by these systems is separate from the grid and does not need to be counted by a meter before being used, so they are positioned behind the meter. Behind-the-meter, however, is not the same as “off-grid”. Most behind-the-meter solar energy systems are still grid-tied, which means they maintain a connection to the electrical grid. The energy the solar PV systems provide do not pass through an electricity meter before it is used by the home or business, but, when the panels are not in use (when there is no sunlight), energy from the grid is sent to the home or business, and that energy must pass through a meter first so that it can be accounted for by the utility.

All electricity end customers sit behind the meter. A BTM solar power plant can be net metered, through which the excess solar energy produced by the plant can be sent back to the grid in return for a credit or money from the local utility. BTM solar power plants have the following benefits:

	●	Energy cost savings,
	●	Control over project operations and maintenance,
	●	Self-consumption of distributed generation (usually solar PV),
	●	Visible commitment to sustainability (with solar PV), and
	●	Resiliency (with battery storage).

All provinces and territories in Canada offer net metering program though the details may differ.¹² Forty-one States in the US, in addition to Washington, D.C., American Samoa, U.S. Virgin Islands and Puerto Rico offer net metering programs.¹³ The BTM solar projects are reasonable in size (average 300 kWp) as rooftop, carport or ground mount systems, and could be profitable with a targeted 15% gross margin. The Company can be a turn-key service provider to commercial and industrial (“C&I”) customers for them to own BTM solar power plants on-site. The Company can also invest and own the BTM solar projects where local policies allow commercial aggregation and third party ownership.

There has been an increased interest in BTM solar projects. Existing buildings are responsible for 18% of Canada’s GHG emissions, BTM solar power generation provides a readily available solution toward the goal of Net-Zero by 2050.¹⁴

¹²Alberta: https://www.epcor.com/products-services/power/micro-generation/Pages/net-metering.aspx; British Columbia: https://app.bchydro.com/accounts-billing/electrical-connections/net-metering.html; Saskatchewan: https://www.saskpower.com/Our-Power-Future/Powering-2030/Generating-Power-as-an-Individual/Using-the-Power-You-Make/Net-Metering; Manitoba: https://www.hydro.mb.ca/accounts_and_services/generating_your_own_electricity/?_ga=2.88824211.949710914.1666383471-1665874008.1666383471; Ontario: https://www.hydroone.com/business-services/generators/net-metering; Quebec: http://www.hydroquebec.com/residential/customer-space/account-and-billing/understanding-bill/residential-rates/net-metering-option.html; PEI: https://www.maritimeelectric.com/services/articles/net-metering/; Nova Scotia: https://energy.novascotia.ca/renewables/programs-and-projects/enhanced-net-metering; New Brunswick: https://www.nbpower.com/en/products-services/net-metering/; Newfoundland: https://www.newfoundlandpower.com/My-Account/Usage/Electricity-Rates/Net-Metering; Yukon: https://yukon.ca/en/micro-generation-program; Northwest Territories: https://www.inf.gov.nt.ca/en/NetMetering; Nunavut: https://www.qec.nu.ca/customer-care/generating-power/net-metering-program.

¹³National Renewable Energy Laboratory. Net Metering. https://www.nrel.gov/state-local-tribal/basics-net-metering.html

¹⁴Natural Resources Canada. Green Buildings. https://www.nrcan.gc.ca/energy-efficiency/green-buildings/24572

Community Solar Gardens

Solar power can help reduce CO₂emissions mainly by being a clean and renewable source of electricity. Solar power is not dependent on burning fossil fuels or other products; instead, it uses electrons captured from the sun’s energy for electricity creation. Therefore, solar energy does not create greenhouse gases for energy production at residential or C&I subscribers’ locations. Community Solar farms provide opportunities for the subscribers to do their part in achieving the Net-Zero goal.

Community solar is a group of solar panels with access to the local electricity grid. Once the panels are turned on and generating electricity, clean energy from the site feeds into the local power grid. Depending on the size and number of panels the project has, dozens or even hundreds of renters and homeowners can save money from the electricity that is generated by the project. By subscribing to a project, a homeowner earn credits on their electric bill every month from their portion of the solar that’s generated by the project, accessing the benefits of solar without installing panels on their home.

Community solar projects are usually 3 – 7 MWp each in size (see below a Company developed 3 MWp solar farm in Portland, NY, USA) subject to State regulation. Community solar capacity has increased because more projects have come online and because projects have generally become larger over time. Economies of scale enable cost-effective construction of a renewable energy system at a site with optimal renewable resource availability.

Community solar farm projects leverage economies of scale and often offer quick to market solutions for scales of approximately 1,000 homes/7 MWp. Additional advantages include, shared transaction costs often make this procurement option less expensive than self-supply, and customers are generally not responsible for maintenance and upkeep.

Utility Scale Solar Farms

A utility-scale solar farm is one which generates solar power and feeds it into the grid, supplying a customer with renewable solar energy. A ‘utility-scale’ solar project is usually defined as such if it is 10 MW or bigger in capacity of energy production. For comparison, the average American household uses approximately 900 kWh. A utility-scale solar power plant can utilize several solar technologies including primary PV, tracking (rotate to track the sun’s movement) or fixed racking (does not track the sun’s movement).

What distinguishes utility-scale solar from distributed generation is both project size and the fact that the electricity is sold to wholesale energy buyers, not end-use consumers. Virtually every utility-scale solar facility has a PPA with a corporation, an IPP or a utility, guaranteeing a market for its energy for a fixed term of time. Utility scale systems also participate in monthly and spot auction markets for energy, capacity, and ancillary services.

Utility-scale solar has become a growing source of electricity in the world. Many utility-scale solar designs can also include energy storage capacity that provides power when the sun is not shining and increases grid reliability and resiliency.

To reach NZ2050, every industry requires power and every business needs to decarbonize. Many companies will need to partner with solutions providers such as the Company to help put them on a net-zero trajectory, and utility scale solar farm is a commercially viable decarbonization solution for reaching the Net-Zero carbon emission goal.

Customers and Sales Channels

The pursuit of Net-Zero carbon emissions comes a rising demand for renewable energy. Customers are increasingly capitalizing on the climate benefits of renewables; they are looking for renewable energy to meet rising energy needs; they want to benefit from the improving economics of renewable energy via subsidies; and they want to move their businesses away from fossil fuel dependency. Based on application, the Company has customers in the following market segments: BTM, Community Solar, Corporate PPA, and Utility solar PPA.

Behind the Meter (BTM) Solar for C&I Customers

Corporate Net-Zero goals boost BTM solar growth. The C&I BTM solar market, which consists of on-site solar power generation primarily for self use has grown rapidly in recent years. Net-Zero adoption by businesses, non-for-profits and governments will help continue to increase the demand for BTM solar segments. Many C&I customers are becoming more interested in making sustainability-focused choices. With little more than 1% of commercial electricity demand served by on-site solar, there remains significant opportunity for growth in the BTM solar segment.

All subnational jurisdictions in Canada and the United States have net metering programs for BTM solar projects.¹⁵ The Company delivers BTM projects to C&I customers with in-house expertise, enabling economic progress on Net-Zero goals. A residential BTM market segment also exists; however, the Company sees Community Solar as its strongest opportunity to serve mass market residential customers.

Community Solar for Mass Market Subscribers

A Community solar subscription is tied to an offsite solar farm, or solar garden and allows homeowners, renters, small businesses, religious organizations, and other not-for-profits to purchase solar energy without the need to install panels on their property. Rather than purchasing energy solely sourced from utility-scale generators, such as coal and natural gas power plants, some or all electricity is sourced from the community solar project. Subscribers are billed for the solar energy and are credited on their utility bill. In many cases, this creates a discount over conventional electricity purchases. Community solar is especially appealing to those customers who are unable or unwilling to install a renewable energy generator at their residence or commercial facility but still seek the economic and environmental benefits of solar energy.

As of December 2021, Community solar projects are located in 39 states, plus Washington, D.C. 22 states, plus Washington, D.C., have policies that support community solar. Community solar projects represent more than 3,200 MWac of total installed capacity.¹⁶ The Biden Administration wants community solar to reach 5 million households by 2025 and create $1 billion in energy bill savings.¹⁷

Community Choice Aggregation (“CCA”) is an alternative to the investor-owned utility energy supply system in which local entities in the United States aggregate the buying power of individual customers within a defined jurisdiction to secure an alternative energy supply contract. The CCA chooses the power generation source on behalf of the consumers; and thus have the potential to be a major source of viable customers for community solar projects, representing very large contracts for community solar generators. The main goals of CCAs have been to either lower costs for consumers or to allow consumers greater control of their energy mix, mainly by offering cleaner generation portfolios than many local utilities.

¹⁵See notes 12 and 13.

¹⁶National Renewable Energy Laboratory. Community Solar. https://www.nrel.gov/state-local-tribal/community-solar.html

¹⁷U.S. Department of Energy. DOE Sets 2025 Community Solar Target to Power 5 Million Homes.https://www.energy.gov/articles/doe-sets-2025-community-solar-target-power-5-million-homes

Seven states in the United States have enacted CCA-enabling laws.¹⁸ CCAs have set national green power and climate protection records while reducing power bills. CCAs have won National Renewable Energy Laboratory and Environmental Protection Agency recognition for supplying significantly higher amounts of renewable energy while maintaining rates that are competitive with conventional fossil fuel and nuclear-based utility power.¹⁹ CCAs are therefore already conspicuous leaders in green power innovation, receiving the U.S. Environmental Protection Agency’s “green power leadership awards” for achievements in renewable energy. The Company has existing intends to in the future establish relationships with CCAs as a primary method of entry into the Community Solar project market.

Corporate America and IPP Customers

Regulation, investor activism, and rising consumer interest are among the factors pushing companies to benchmark and improve the sustainability performance of their offerings. Both governments and consumers are demanding companies reduce emissions and their environmental footprint. As a result, a growing demand exists for renewable electricity generation from large corporations. Globally, thousands of companies have set or are in the process of setting commitments to emissions reduction. In addition, hundreds of large US-based companies have committed to net-zero targets, many of which have set ambitious emissions reductions targets by 2030 or sooner.

Solar PPAs continue to evolve, with corporations increasingly procuring solar generation offsite. Major customers include renewable investment funds, RE100 corporations, and government administrations. Corporate solar PPAs can be classified as follows:

●

Physical PPA: a contract for the purchase of power and associated Renewable Energy Credits from a specific renewable energy generator to a purchaser of renewable electricity.

●

Financial PPA: a financial arrangement between a renewable energy generator and a consumer. A Financial PPA does not include the electricity delivery to the buyer, and so the buyer can be located in a different power market. A Financial PPA involves crediting the consumer for the generator’s production.

Corporate solar PPA prices vary widely from state to state. From 2020 to 2021, there were reductions in levelized electricity costs for commercial and utility-scale PV plus-storage systems. The levelized cost of electricity of utility-scale stand-alone PV fell from 4.6 cents/kWh in Q1 2020 to 4.1 cents/kWh in Q1 2021.²⁰ State-by-state variance in contract prices is a function of avoided cost, resource availability and state incentives. PPA rates continue to decline, increasing viability and market opportunity in more jurisdictions. Falling component and build costs and attractive financing make solar the lowest-cost generation alternative in many states. Corporate customers are also negotiating shorter PPA terms to maximize future flexibility.

Traditional Energy Utilities as Customers

For the United States, the path to NZ2050 entails a comprehensive and rapid effort to decarbonize the economy. America’s annual GHG emissions come from a variety of sources, spanning every sector. Demand from utilities for renewable energy is expected to continue to grow in line with the broader economy. Utilities form the largest share of demand globally, particularly in the Americas, as they are required by law to meet RPS. They also have increased exposure to the merchant market (non-PPA), which will start to account for a larger share of solar PV installations.

¹⁸National Renewable Energy Laboratory. Community Choice Aggregation (CCA) Helping Communities Reach Renewable Energy Goals. https://www.nrel.gov/state-local-tribal/blog/posts/community-choice-aggregation-cca-helping-communities-reach-renewable-energy-goals.html

¹⁹See note 18.

²⁰Vignesh Ramasamy, David Feldman, Jal Desai, and Robert Margolis. U.S. Solar Photovoltaic System and Energy Storage Cost Benchmarks: Q1 2021, https://www.nrel.gov/docs/fy22osti/80694.pdf

Customers Buy Solar Renewable Energy Certificate (“REC”) Off-Sets

One way that the decarbonization effort is being pursued by lawmakers is the creation of RPS at the subnational level. An RPS makes it law for utilities to source a certain percentage of the electricity they sell to customers from renewable energy sources. This is done via REC trading systems.

To facilitate compliance with RPS requirements, states have adopted a market-based system of tradable RECs that represent the legal property rights to the environmental benefits of one MWh of renewable electricity generation. A REC is issued for every MWh of electricity generated and delivered to the electric grid from a renewable energy resource.

In the REC state markets, various RPS regimes require electricity suppliers to secure a portion of their electricity from renewable power plants. Utilities must generate RECs themselves via self-owned renewable generation, purchase them from renewable generators, or else pay a penalty that is generally higher than the market rate for RECs.

All green power supply options involve the generation and retirement of RECs. Renewable energy providers can unbundle energy from RECs - selling energy as “brown” power and the RECs on the open market. REC sales involve no physical delivery of electricity to customers. One way to think of RECs is that they represent the “solar” aspect of the electricity that was produced.

REC generation and sales are a key revenue stream for utility-scale renewable projects owned by IPPs. In many cases, it is the value of RECs that make these large projects financially viable. REC markets vary by state in line with RPS requirements. As governments more aggressively pursue their carbon emissions targets in the lead up to 2030 and 2050, the Company expects RPS requirements to escalate accordingly and REC prices to increase.

Operations Process

Leveraging the Company’s development expertise means that it can finish turnkey solar projects in an efficient and timely manner. The Company’s process has five phases: Site Origination; Development; Financing; Engineering, Procurement and Construction; Operation & Maintenance and Asset Management. This process has been tested and verified and has brought the Company success.

Phase 1 - Site Origination to Bankable Lease

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Policy analysis: Political analysis, environmental, permitting, land use.

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Prioritize low-cost interconnection sites.

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Financial analysis: Incentive framework, IRR analysis and relevant investment threshold.

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Site control: identification, evaluation and execute bankable lease to grow its greenfield Pipeline with efficient site acquisitions, affordable land with low property tax rates.

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Acquisition of development pipelines.

Phase 2 - Development to Notice To Proceed (NTP)

●

Evaluate and prioritize projects with the highest likelihood of success.

●

Grid interconnection studies: detailed discussions with the electrical utilities to determine the most economical methods of connecting the projects to the electrical grid, could result in Connection Impact Assessments, Connection Cost Assessments, Connection Agreements.

●

Permitting: municipal, state and/or federal permits and approvals, site plan optimization and approval, multiple approvals from zoning, planning and town boards and city council are required depending on the type and size of the project. Projects may also involve a county level review.

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Environmental and required regulatory permits to ensure that the project will not significantly negatively impact the surrounding natural environment.

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Incentives and PILOT/Tax.

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PPA rates, off-taker credit, post-contract assumptions.

Phase 3 - Financing

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Sponsor equity: Draw on sponsor equity commitments from family office and other investors.

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Investment tax credit: Source tax equity from providers.

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Long-term debt: Opportunistically add project-level debt or bank leverage to maximize returns.

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Construction Financing: project cost and budgeting.

Phase 4 - Delivery: Engineering, Procurement and Construction to COD/PTO

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EPC selection and negotiation, vet EPC partners based on experience and track record, run targeted RFPs with firms that the company has a close relationship with.

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Further fieldwork such as geotechnical investigation, legal or topographical surveys, and site assessments.

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Electrical, civil, mechanical and structural engineering design, including erosion and sediment control plan, Issue For Construction drawings.

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Construction permits such as building permits and entrance and address permits.

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Procurement: supplier negotiation on price and on-time delivery to the sites (solar panels, racking, inverter and BOS), procurement of electrical equipment is a critical step done as soon as the engineering phase has finalized its design. Some equipment such as transformers can take up to 16 weeks of lead time for delivery.

●

Work closely with local utilities and EPC firms to streamline the construction process.

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Contracting: installers contracting.

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Fencing and Safety: Fencing of the project site, coordinating with existing facilities and preparing safety measures.

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Construction control: on budget, on schedule, regular site visits, QA/QC, PO and change order management.

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System commissioning, coordination of all jurisdictional inspections and approvals, identification and correction of deficiencies, site commissioning inspections and tests must be passed. These include electrical commissioning and creation of as-built drawings and finalized package, and COD/PTO.

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Site permits closing, site cleanup, landscaping, financial closing support, and coordinating with the utility to receive a final acceptance letter.

Phase 5 - O&M, Subscriber Management, and Asset Management

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Project handover, acceptance, and O&M for high production.

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100% subscription, 100% credit allocation, and utility reconciliation.

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Asset management: contract management, financial reporting, regulatory filings.

Employees, Specialized Skill and Knowledge

As of June 30, 2022, the Company has nine employees and an additional four contracted service providers. The operations of the Company are managed by its directors and officers.

The nature of the Company’s business requires specialized knowledge and technical skill around procurement, construction, management, financing and regulations of the solar industry. The required skills and knowledge to succeed in this industry are available to the Company through certain members of the Company’s management, directors, officers, and advisory teams. The Company’s employees and consultants have extensive experience working with municipalities, First Nations, community co-operatives, regional planning authorities, commercial businesses, and landowners that value the numerous benefits of resilient renewable energy solutions. The Company’s team also has extensive experience developing, financing, building, permitting, commissioning, operating and maintaining renewable and clean power plants in Canada and the US with collectively over 100 years of direct experience profitably originating and executing on projects. Many members of the team have a long track record working together at major North American renewable energy companies such as Potentia, Solar Power Networks, Sky Solar and ARISE Technologies. Most of the team built its track record developing, financing, conducting EPC and O&M, executing both ground mount and rooftop FIT solar projects in Canada and in the US. See “Directors and Executive Officers”.

Competitive Conditions

The global solar market remains highly fragmented. Fragmentation will continue as barriers to entry remain low for residential, community, commercial, and industrial applications and annual installations continue to grow driven by Net-Zero policy initiatives. As a result, the Company predicts significant price competition among solar power competitors.

The Company competes with peers in development, EPC, O&M, and IPP Asset Management. Solar companies are not disrupting or undermining the solar energy industry by selling new products or services that may replace the Company’s. The Company competes on cost and volume via operational excellence. Certain companies in the segment could be vulnerable due to limited scope. The Company addresses this through exposure to the whole renewable energy value chain. Scale may hinder an operator’s ability to meet increasing market demand. Successful solar companies in the Company’s segment are successful because of their ability to access capital markets to fund volume.

Solar Developers

A solar developer is a company that shepherds a solar power plant from ideation to construction readiness, also known as Notice to Proceed (“NTP”) A developer can employ just a few employees or up to thousands. Some developers specialize in certain sizes of projects or in specific regions.

The process of developing a solar power plant can take years. Developers must secure a project site, find an customer for the electricity the power plant will produce (a utility, an electric cooperative in rural areas, a corporation that wants the energy for its own use, or community solar subscribers); conduct technical, geological and other studies on the land, study how the energy generated by the power plant will be connected to the electric grid; apply for a variety of permits from local, state, and sometimes federal agencies; secure financing for the construction of the solar power plant; negotiate equipment purchases; and contract with an EPC firm for the build. All of this must happen before construction begins.

Competitors in solar development in markets relevant to the Company are presented in the table below, with information from Solar Power World. The number one developer in Utah (UT), AES Clean Energy has delivered 526MW utility scale solar in 2020; Nexamp in Massachusetts’ (MA) C&I market delivered 128MW; and Enerlogics in Ohio’s (OH) C&I market delivered 1MW. The Company delivered 12MW in 2020 with more than 100MW delivered since the Company’s founding. The Company could be ranked within the top 20 solar developers on this list.

Solar EPC Companies

Solar EPC companies provide engineering, procurement, and construction of a full solar system. A solar EPC company is more sophisticated and holistic in the products and services they provide compared to a typical solar installer. These include:

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Site surveys for project viability.

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Determine power generation capacity and equipment selection.

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Design and install of the PV system.

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Electric grid interconnection and metering.

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Facilitate financing including tax incentives and rebates.

●

Commission the solar system to meet the designed production requirement.

A list of competitors in the Company’s solar EPC segment is presented in the table below based on information from Solar Power World. The number one solar contractor is SOLVE Energy from California (CA), which installed 8.7 GW with 901 employees since founding. The last one in the table, Renewable Energy Outfitters in Colorado (CO), delivered 593 kW with only 3 employees. The Company has installed more than 100MW since its founding.

Solar O&M Service Providers

Many of the large IPPs that own utility-scale solar PV portfolios in the U.S. rely on the plant developer or EPC firm for operations and maintenance, except for those that develop their own projects. Greentech Media (GTM) Research’s O&M and asset management report identified the top 5 O&M providers managing U.S. utility-scale PV plants in the table below. One of the firms, Sempra, is also an IPP.

Asset Management service – an IPP World

GTM Research defines asset management as the ongoing management of financial, commercial, and administrative tasks that are necessary to ensure the financial performance of a solar PV plant or a portfolio of plants. GTM Research and SoliChamba Consulting recently released a report, ‘Megawatt-Scale PV O&M and Asset Management 2016-2021’ which features a list of asset managers of U.S. utility-scale PV plants. The table below identifies the top five players:

IPPs who own solar power plants and typically perform asset management in-house dominate the top of the rankings, and make up four of the top five utility-scale PV asset managers in the U.S (based on reporting by SoliChamba Consulting outlined above). Most IPPs and financial investors; however, only manage the assets they invest in. The market for third-party asset management services remains small in the U.S. and its growth is probably limited by the dominance of IPPs and large portfolio owners who tend to self-service. The top third-party asset managers include project developers like Recurrent Energy and affiliated service providers like Bay4 Energy Services and EDF Renewable Services, as well as independent service providers like Radian Generation and CAMS.

Company Competitive Advantage

The Company has grown through participating in standard offering programs such as the Ontario Feed-In-Tariff program and New York’s NYSERDA NY-Sun Community Solar Program and has completed 70 Community solar projects in collaboration with Central New York Regional Planning and Development Board in New York. It has a good track record in developing and building renewable and clean energy projects in Canada and the USA. The Company has succeeded at delivering value at non-utility solar projects as a developer and a full-service EPC contractor; however, it has been evaluating opportunities for more growth in solar project volumes. Becoming an IPP aiming at long-term sustainable investment returns is the Company’s natural next step. To meet the desire for growth, the Company must re-position itself to deliver integrated growth solutions that expand from developer to an IPP in the C&I, Community, and Utility solar PV market segments.

The Company’s competitive advantage lies in its people, processes and experience. The Company’s team is skilled in translating customer needs into value-add solutions. The Company’s solar power plant delivery process is safe, reliable and low cost; and the Company provides a customer experience that is simple and focused with speed in implementation.

Third Party Suppliers

The Company procures all plant components on the open market. The Company qualifies suppliers’ products based on three factors: bankability, availability, and cost.

Product is considered bankable if lenders are willing to finance it. Component bankability is a key factor in projects being offered non-recourse debt financing by lenders. Products must also be available to meet construction schedules at a competitive price. Though China is the most cost-competitive location for the manufacture of all solar PV system components, Chinese solar products still must be bankable and available in order to be procured for the Company’s solar power plants.

Bloomberg NEF has developed a tiering system for PV module products based on bankability, creating a transparent differentiation between the hundreds of manufacturers of solar modules on the market. Tier 1 solar panels, such as those from Canadian Solar, ZNShine, and Jinko are built to higher standards and have the strongest reputation within the solar industry for quality and service. These panels last longer and produce more energy. Tier 1 manufacturers can be expected to honor product warranties. The Company primarily sources Tier 1 panels.

Solar panel mounts and racks are the equipment that secures solar panels in place. Racking is used to attach solar panels to a rooftop, ground, or another surface. With proper installation, an effective mount secures the solar panels against all weather conditions and ultimately protects the investment. Choosing the right racking system depends on the site, local climate, and installer preference (bankable, available, and low cost). Additional information on the Company’s key supplies are below:

●

Fixed Ground Mounts: Fixed ground mounts have lower energy production when compared to tracking systems, however no moving parts means lower O&M costs, and installation and procurement costs are lower. Fixed system suppliers, such as Schletter’s fixed tilt solar racking system, are also more bankable.

●

Single-Axis and Dual-Axis Solar Tracker: Trackers increase the efficiency of solar systems by providing more direct sunlight to the system, moving the solar panels from East to West (single-axis include solutions from RBI Solar and TerraSmart’s) or from East to West and from North to South (dual-axis). The additional mechanical complexity leads to higher O&M costs, and procurement and installation costs are higher compared to fixed systems.

●

Ballasted (Zero Penetration) Mounts: These systems are ideal for sites on roof membranes, landfill caps and industrial brownfields. More space is required to avoid table to table shading, and precast blocks have higher shipping costs and require heavy equipment to move around a site. GameChange Solar has both precast and pour-in-place ballast racking solutions.

●

Solar Inverters: These are an integral part of every system. The Company has used many top brands such as Huawei, SunGrow, and SMA. The inverters perform two key functions: DC to AC conversion; and Maximum Power Point tracking (“MPPT”), where the inverter dynamically selects the voltage and current combination for the highest power production.

●

String Inverters: These have better MPPT capability per string for high production, shorter DC wires for lower power loss, and require special racking for the inverter for each string. In general, these have a higher per Watt cost than central inverters.

●

Central Inverter: Central inverters feature easy system design, installation and O&M trouble shooting. However, they represent a single point of failure for the whole system, with high DC wiring costs and high power loss due to voltage drop. In addition, partial shading and string mismatch drastically reduces power output.

Pricing and Marketing

The Company strives to ensure its operational excellence. In the pursuit of Net-Zero there is an increasing willingness among customers to purchase renewable and clean energy such as solar power. Commercial customers are price sensitive in that they need to balance Net-Zero preferences and operational costs to remain competitive in their core businesses. Like with all utility economics, regulatory policy is a primary driver of revenue. Electricity prices are set largely by regulatory bodies like Public Service Commissions or Energy Boards. A PPA has to be equal to or lower than the regulated electricity price, in addition to providing renewable energy credits. The Company and its competitors generally have the same electricity price point (economic oligopoly). The Company gains economic value by managing project cost (the larger the project, the lower cost per watt installed), and driving business volume through a portfolio approach with large partners like Honeywell and large property management companies.

The Company prices its community and utility solar project and services competitively, and aligns itself with market pricing forecasts. The Company prices BTM solar projects to offer the host C&I customers a lower electricity cost, while securing a required return to its investors. BTM project pricing works the best in the Northeast USA where the retail electricity prices are high enough to enable a healthy margin in every BTM project the Company does.

With respect to promotion and marketing to secure customers:

Sales Team

●

The Company’s sales team must be highly trained, with a financial background, one on one selling skills, and should ideally hold a business credential.

●

One dedicated sales manager per Province/State, with core team support from head office in order to support 50 MWp to 100 MWp annual growth rate at $150k total annual budget per person.

Marketing Communications Plan with a promotion budget of 5% of gross revenue

●

20% on advertising (online & printed media).

●

80% public relations and investor relations.

Messaging customers with key messages

●

Community Solar Subscribers: Save on your utility bills while doing good to the environment.

●

Community Choice Aggregation: Let the Company’s PPA be your way to cheaper, greener energy for your community members.

●

Major Corporations: Be the 1st Net-Zero corporation among your peers.

●

Large Utilities: Your state RPS compliance is the Company’s business.

Regulatory Environment

Achieving Net-Zero by 2050 (“NZ2050”) is widely seen as the best way to halt climate change. “Net zero” means our total carbon dioxide emissions are equal to or less than the emissions we remove from the environment. NZ2050 will require new policies, investments, participation and commitment by government, industry, and individuals. The most feasible pathways to net-zero emissions include four main strategies:

●

Generate emission-free electricity using sources like wind, solar, nuclear, and waterpower.

●

Use vehicles and equipment that are powered by electricity instead of fossil fuels.

●

Use energy more efficiently.

●

Remove carbon dioxide from the atmosphere.

Policymakers are increasingly recognizing that renewable energy is the key to net-zero. Governments must build frameworks and reform bureaucracies to level the playing field for renewables as, in many countries, the bureaucracies still favour fossil fuels, giving the fossil fuel industry large subsidies. To date more than 140 countries have now set or are considering a target of NZ2050.²¹United Nations Secretary-General António Guterres called on the world to “end fossil fuel pollution and accelerate the renewable energy transition, before we incinerate our only home”.²²

Fighting climate change is good business. Renewables such as wind and solar are readily available and in most cases, are cheaper than coal and other fossil fuels. Solar and battery energy storage costs have plummeted in the past decade. Despite the headwinds presented by ongoing cost inflation and supply chain challenges, demand for clean energy sources has never been higher, and the Company expects that the global energy crisis will continue to act as an accelerant for the clean energy transition.

Since the International Energy Agency’s (“IEA”) last in-depth review in 2015, Canada has made a series of international and domestic commitments, putting it on a path toward achieving an ambitious energy system transformation and climate transition. The Canadian Net-Zero Emissions Accountability Act, which became law on June 29, 2021, enshrines in legislation Canada’s commitment to achieve net-zero emissions by 2050. The majority of Canadians already depend on clean, reliable electricity to power their everyday lives. Canada has accelerated the phase-out of coal, implemented natural gas regulations and put a price on carbon pollution. The Government will connect regions with clean power through Regional Strategic Initiatives.²³ The Greenhouse Gas Pollution Pricing Act encourages the reduction of GHG emissions. The Liberal Party of Canada has signaled its intention to continue the annual price increases until the price on emissions reaches $170 per tonne of CO2e by 2030.²⁴

²¹Climate Action Tracker. CAT net zero target evaluations. https://climateactiontracker.org/global/cat-net-zero-target-evaluations/#:~:text=As%20of%2020%20September%202022,zero%20goal%20in%20November%202021

²²António Guterres. UN Secretary-General Remarks. https://media.un.org/en/asset/k1q/k1qn00cy8a

²³Government of Canada. Regional Tables Launched to Collaboratively Drive Economic Opportunities in a Prosperous Net-Zero Future. www.canada.ca/en/natural-resources-canada/news/2022/06/regional-tables-launched-to-collaboratively-drive-economic-opportunities-in-a-prosperous-net-zero-future.html

²⁴Government of Canada. Update to the Pan-Canadian Approach to Carbon Pollution Pricing 2023-2030. https://www.canada.ca/en/environment-climate-change/services/climate-change/pricing-pollution-how-it-will-work/carbon-pollution-pricing-federal-benchmark-information/federal-benchmark-2023-2030.html

With the United States’ announcement of targets to halve US GHG emissions and to reach net-zero emissions by 2050, the world’s largest economy (and second-largest emitter) has joined some 130 nations in its intention to act on climate change.

The Biden infrastructure plan (“American Jobs Plan”) is expected to result in very favorable federal policy environment for renewable energy development in the US with a goal towards a 100% emission free power sector by 2035 and economy wide net zero emissions by 2050.

The Inflation Reduction Act of 2022 (“IRA”) is a bill passed by the 117th United States Congress in August 2022 that aims to curb inflation by reducing the deficit, lowering prescription drug prices, and investing into domestic energy production while promoting clean energy solutions. The IRA includes long-term solar and energy storage tax incentives and other critical provisions that will help decarbonize the electric grid with significant clean energy deployment. The legislation earmarks $369 billion for U.S. energy security and fighting climate change. It is expected to cut annual U.S. greenhouse gas emissions by about 1 billion metric tons by 2030 mainly by speeding up the deployment of clean electricity and electric vehicles.²⁵ The IRA extends the solar ITC by 10 years at 30%. The existing federal ITC has been fundamental to incentivizing the growth of American solar. The credit applies to residential, commercial, and utility-scale developers and will create an effective discount of 30% on the capital cost of solar installations for ten years (until 2033). The credit will decline to 26% in 2033 and to 22% in 2034. The reinvigorated ITC will come with a variety of “adders,” which could push the tax credit to as high as 50% for some projects. Additionally, the credit is equipped with a direct pay provision, allowing developers with little to no tax liability to treat it as a tax overpayment, resulting in a cash refund.

The IRA also provides ITCs for Standalone Storage and Interconnection Upgrades. Until now, battery storage was only eligible for the ITC if it was directly charged by solar. With respect to interconnection upgrades, a significant portion of the cost of solar projects is to pay for utilities to upgrade the grid so that the solar project can connect to it. With the IRA, standalone storage and interconnection upgrades are eligible for ITC.

²⁵Jesse D. Jenkins, Erin N. Mayfield, Jamil Farbes, Ryan Jones, Neha Patankar, Qingyu Xu, and Greg Schivley. Preliminary Report: The Climate and Energy Impacts of the Inflation Reduction Act of 2022. https://repeatproject.org/docs/REPEAT_IRA_Prelminary_Report_2022-09-21.pdf

To promote a diversified resource mix and encourage deployment of renewable energy, most States have established RPS. The policies require that a specified percentage of the electricity sold by utilities comes from renewable resources. RPS policies help drive the United States market for wind, solar and other renewable energy. Roughly half of the growth in U.S. renewable energy generation since the beginning of the 2000s can be attributed to State renewable energy requirements.

In addition, the Company is subject to a variety of laws and regulations in the markets where its does business. These laws and regulations include energy regulations, export and import restrictions, tax laws and regulations, environmental regulations, labor laws, supply chain laws and regulations and other government requirements, approvals, permits and licenses. The Company also faces trade barriers and trade remedies such as export requirements, tariffs, taxes and other restrictions and expenses, including antidumping and countervailing duty orders, which could increase the prices of our supplies.

In the countries where we do business, the market for solar power, solar projects and solar electricity is heavily influenced by national, state and local government regulations and policies concerning the electric utility industry, as well as policies disseminated by electric utilities. These regulations and policies often relate to electricity pricing and technical interconnection of customer-owned electricity generation. The Company expects that our solar power projects and their installation will continue to be subject to national, state and local regulations and policies relating to safety, utility interconnection and metering, construction, environmental protection, and other related matters. See “Risk Factors”.

Impact of Environmental Laws and Regulations

Compliance with environmental laws and regulations can be expensive, and noncompliance with these regulations may result in adverse publicity and potentially significant monetary damages, fines and the suspension or even termination of the Company’s business operations.

The Company is required to comply with all national and local environmental regulations. The Company’s business generates noise, wastewater and other industrial waste in our operations and the risk of incidents with a potential environmental impact has increased as its business has expanded. The Company believes that it substantially complies with all relevant environmental laws and regulations and has all necessary and material environmental permits to conduct its business as it is presently conducted. However, if more stringent regulations are adopted in the future, the costs of complying with these new regulations could be substantial. If the Company fails to comply with present or future environmental regulations, it may be required to pay substantial fines, suspend production or cease operations.

The Company’s solar power projects must comply with the environmental regulations of the jurisdictions in which they are installed, and the Company may incur expenses to comply with such regulations. If compliance is unduly expensive or unduly difficult, the Company may lose market share and its financial results may be adversely affected. Any failure by the Company to control its use or to restrict adequately the discharge, of hazardous substances could subject the Company to potentially significant monetary damages, fines or suspensions of its business operations.

Intellectual Property

The Company is not dependent on intellectual property rights for its business. The Company has no registered trademarks, patents or patent applications; however, the Company has applied in Canada and the United States to trademark the term “SOLARBANK”. The Company asserts copyright ownership generally in its written works, but has no formal copyright registration process in place.

Cycles

The Company’s business is subject to seasonal variations in demand linked to construction cycles and weather conditions. Demand for solar power and battery storage products and services from some markets, such as the U.S., may also be subject to significant seasonality due to adverse weather conditions that can complicate the installation of solar power systems and negatively impact the construction schedules of solar projects. Seasonal variations could adversely affect our results of operations and make them more volatile and unpredictable.

Foreign Operations

Currently the Company’s only foreign operations are in the United States which are detailed above. The Company intends to continue to focus on developing solar projects in Canada and the United States but will evaluate expanding into other countries based on the regulatory environment, demand and financial metrics of opportunities.

Economic Dependence

Except as disclosed under “Management’s Discussion and Analysis - Financial Instruments and Other Instruments (Management of Financial Risks) - Concentration risk and economic dependence” the Company’s business is not substantially dependent on any one contract for the products and services that is provides or the sourcing of the materials, labour and supplies it requires to provide its services.

Social or Environmental Policies

The Company has not yet implemented any formal social or environmental policies that are fundamental to its operations. It is currently evaluating the implementation of such policies based on current trends related to environment, social and governance initiatives.

Reorganizations

There has not been any material reorganization of the Company or any of its subsidiaries within the three most recently completed financial years or completed during or proposed for the current financial year.

USE OF PROCEEDS

Use of Proceeds

The net proceeds of the Offering, after deducting the Agent’s Fee, the remaining balance of the Corporate Finance Fee in the amount of $16,750 (inclusive of applicable taxes) and the estimated expenses of the Offering of $200,000, are estimated to be $4,718,250 before giving effect to any exercise of the Over-Allotment Option. All subscription funds received by the Agent will be held in trust, pending the closing of the Offering. If the Offering is not completed, the Agent shall promptly return the proceeds of the subscription to the purchasers without interest or deduction. There is no minimum amount of funds that must be raised pursuant to the Offering. This means the Company could complete the Offering after raising only a small proportion of the Offering amount set out herein. The net proceeds of the Offering are currently intended to be used for company expansion and general corporate purposes. Specifically, the Company expects to use the net proceeds of the Offering for the following purposes:

Use of Proceeds	Amount ($)
Completion of engineering and permitting, along with procurement deposit, for two projects located in New York, USA.		1,000,000
Completion of interconnection studies, engineering and permitting, along with interconnection deposit, and procurement bid application fee for one project located in New York, USA.		900,000
Working capital for one project in Alberta, Canada that provides for the completion of engineering work and placement of orders for main project components.		800,000
Business development initiatives in the United States involving completion of documentation to advance six projects to the notice to proceed stage.		1,600,000
Salaries for new hires.		418,250
Total		4,718,250

An interconnection study is a study that determines whether a solar project can be connected to an electricity grid. These studies assess the addition of a solar project and its impact on the power system, as well as identify any interconnection facilities or network upgrades needed for interconnecting the solar project safely, in compliance with reliability requirements. Each interconnection study will include a system impact study which is an engineering study that evaluates the impact of the proposed interconnection on the safety and reliability of the transmission system. It is also likely to include a facilities study that determines the equipment and electrical switching configuration necessary to accomplish the interconnection and estimates the cost, construction, and installation times.

An interconnection deposit is provided to a utility after a positive interconnection study determination and in order for a utility to proceed with completing the interconnection of the solar power project to the electricity grid.

Upon completion of the Offering, it is expected that the Company will have sufficient non-contingent financial resources to fund ongoing operations and achieve its business objectives and milestones for at least 12 months. The Company intends to spend the net funds available to it as stated in this Prospectus. However, there may be circumstances where, for sound business reasons, a reallocation of funds may be necessary. The management of the Company will have broad discretion in applying the net proceeds from the Offering. See “Risk Factors”.

The Company has incurred losses since inception. Although the Company expects to become profitable, there is no guarantee that will happen, and the Company may never become profitable. The Company anticipates it will continue to have negative cash flow from operating activities unless and until commercial production is achieved. The Company expects to use proceeds from the Offering to fund negative cash flow from operating activities in future periods. See “Risk Factors”.

Total Funds Available

Assuming completion of the maximum Offering, the Company will have approximately $7,829,046 in available funds (net proceeds of the Offering and approximately $3,110,796 in estimated working capital as at January 31, 2023). Based upon management’s current intentions, the estimated expenditures for which the total available funds will be used in the 12 months after the date hereof are as follows:

	Funds
Working capital as of January 31, 2023	$	3,110,796	⁽²⁾
Net proceeds of the Offering⁽¹⁾	$	4,718,250
Total Available Funds	$	7,829,046
Expenditure
Completion of engineering and permitting, along with procurement deposit, for two projects located in New York, USA.	$	1,000,000
Completion of interconnection studies, engineering and permitting, along with interconnection deposit, and procurement bid application fee for one project located in New York, USA.	$	900,000
Working capital for one project in Alberta, Canada that provides for the completion of engineering work and placement of orders for main project components.	$	800,000
Business development initiatives in the United States involving completion of design and submission of zoning and interconnection documents to regulatory agencies to advance six projects to the notice to proceed stage.	$	1,600,000
Salaries for new hires.	$	418,250
Salary for existing employees	$	980,000
General and administrative expenses⁽³⁾	$	2,130,796
Total Use of Funds	$	7,829,046

Notes:

(1)	Assuming no exercise of the Over-Allotment Option.
(2)	Assumes conversion of Convertible Loan.
(3)	General and administrative costs are broken down as follows: (i) contractor costs ($700,000), (ii) professional fees ($200,000), and (iii) rent ($80,000), travel and conference ($200,000), insurance ($120,000), investor relations and marketing ($800,000) and general office expenses ($30,796).

The Company intends to spend the funds available to it as stated in this Prospectus. There may be circumstances however, where, for sound business reasons, a reallocation of funds may be necessary. Accordingly, while it is currently intended by management that the available funds will be expended as set forth above, actual expenditures may in fact differ from these amounts and allocations.

Pending the use of proceeds outlined above, the net proceeds will be held as cash balances in the Company’s bank account or invested in certificates of deposit and other short-term investment products. The Chief Financial Officer of the Company is responsible for executing the Company’s investment policies. See “Risk Factors”.

Business Objectives and Milestones

The primary business objectives for the Company over the next 12 months are:

Business Objective	Milestone	Timeline	Expected Cost
New United States Projects	Completion of engineering and permitting, along with procurement deposit, for Manlius project located in New York, USA.	January 2023 – March 2023	$	500,000
	Completion of engineering and permitting, along with procurement deposit, for Geddes project located in New York, USA.	January 2023 – March 2023	$	500,000
	Completion of interconnection studies, engineering and permitting, along with interconnection deposit, and procurement bid application fee for SUNY project located in New York, USA.	January 2023 – September 2023	$	900,000
Existing Canadian Project	Completion of engineering work and placement of orders for main project components for one project in Alberta, Canada.	January 2023 – June 2023	$	800,000
Business Development ‎Initiatives	Completion of design and submission of zoning and interconnection documents to regulatory agencies to advance six projects to the notice to proceed stage.	January 2023 – December 2023	$	1,600,000
Human Resources	Salaries for new hires	January 2023 – December 2023	$	418,250
Human Resources	Salaries for existing employees	January 2023 – December 2023	$	980,000
General & Administrative Expenditures	General & Administrative Expenditures	January 2023 – December 2023	$	2,130,796

While the Company believes it has the skills and resources necessary to accomplish these business objections and milestones, there is no guarantee that the Company will be able to do so within the time frames indicated above, or at all. See “Risk Factors”.

Current Status of Business Objectives and Potential Barriers to Completion

New United States Projects

●	Completion of engineering and permitting, along with procurement deposit, for Manlius project located in New York, USA.

The project currently has completed an interconnection agreement with the utility, and obtained permits from the local authority having jurisdiction. Engineering and initial construction have started and the Company is about to initiate procurement of major equipment. The Company may have to delay the completion of the project to commercial operation based on the timing of the closing of the Offering which will provide the funds to procure the components and hire local crews to build the project.

●	Completion of engineering and permitting, along with procurement deposit, for Geddes project located in New York, USA.

●	Completion of interconnection studies, engineering and permitting, along with interconnection deposit, procurement bid application fee for SUNY project located in New York, USA.

The Company has submitted of an interconnection request to New York Independent System Operator. It has secured site control via an executed lease with the landowner. It has also qualified to submit a Proposal under NYSERDA’s RESRFP22-1 for Renewable Energy Credits (RECs). The barrier to completion is the timing and result of the interconnection request could delay the progress of engineering, permitting and interconnection deposit.

Existing Canadian Project

●	Completion of engineering work and placement of orders for main project components for one project in Alberta, Canada.

The project has received notice to proceed from the property owner. A site visit is scheduled, engineering has started and the Company is in discussion with the local utility on net metering interconnection, and with local authority having jurisdiction on the building permit. The Company may have to delay the completion of the project to commercial operation based on the timing of the closing of the Offering which will provide the funds to procure the components and hire local crews to build the project.

Business Development ‎Initiatives

●	Completion of design and submission of zoning and interconnection documents to regulatory agencies to advance six projects to the notice to proceed stage.

●

Three projects in Dutch Hill, New York:

The three projects are under utility interconnection study. The design work will be after the completion of the interconnection study.

●

Three wastebeds projects in New York:

The three projects are under utility interconnection study. The design work will be after the completion of the interconnection study.

Human Resources and General & Administrative Expenses

These expenditures are to support the completion of the business objectives detailed above. The only relevant barrier related to these items is if the Company is unable to recruit sufficient new hires to support its business objectives.

For additional risks related to all of the business objectives please see “Risk Factors”.

Costs Incurred to Date

New United States Projects

●	Completion of engineering and permitting, along with procurement deposit, for Manlius project located in New York, USA.

$93,540

●	Completion of engineering and permitting, along with procurement deposit, for Geddes project located in New York, USA.

$59,816

●	Completion of interconnection studies, engineering and permitting, along with interconnection deposit, procurement bid application fee for SUNY project located in New York, USA.

No cost has been incurred so far. All tasks have been finished internally.

Existing Canadian Project

●	Completion of engineering work and placement of orders for main project components for one project in Alberta, Canada.

No cost has been incurred so far. All tasks have been finished internally.

Business Development ‎Initiatives

●	Completion of design and submission of zoning and interconnection documents to regulatory agencies to advance six projects to the notice to proceed stage.

No cost has been incurred so far. All tasks have been finished internally.

Human Resources and General & Administrative Expenses

The costs associated with these matters will be incurred in the future.

DIVIDENDS OR DISTRIBUTIONS

The Company has not declared dividends on any of their shares in the past and does not intend to pay any in the foreseeable future. Any future determination to pay dividends will be at the discretion of the Board of Directors and will depend on the financial condition, business environment, operating results, capital requirements, tax considerations, any contractual restrictions on the payment of dividends and any other factors that the Board of Directors deems relevant. See “Risk Factors”.

SELECTED FINANCIAL INFORMATION

The following table sets forth selected financial information for the Company, summarized from the SolarBank Financial Statements, attached as Schedule “A”.

This table is presented and should be read in conjunction with the SolarBank Financial Statements and the related notes and auditor’s reports included in this Prospectus, together with the information included under “General Matters”, “Risk Factors”, “Capitalization”, “Management’s Discussion and Analysis”. The selected historical financial information has been prepared in accordance with IFRS. Investors are cautioned that historical results are not indicative of future results.

Item	Interim Period Ended September 30, 2022 (Unaudited)			Financial Year Ended June 30, 2022 (Audited)			Financial Year Ended June 30, 2021 (Audited)
Revenue	$	5,480,452		$	10,197,619		$	7,346,581
Total Expenses⁽¹⁾	$	(5,343,785	)	$	(10,558,165	)	$	(7,209,754	)
Net and Comprehensive Income (Loss)	$	164,482		$	31,313		$	(199,917	)
Current Assets	$	9,625,976		$	8,983,109		$	10,254,735
Total Assets	$	9,827,628		$	9,194,537		$	10,283,255
Total Liabilities	$	5,222,561		$	4,753,922		$	5,873,953
Shareholders’ Equity	$	4,605,097		$	4,440,615		$	4,409,302

Note:

(1)	Total Expenses equal Total cost of goods sold plus total operating expenses.

annual MANAGEMENT’S DISCUSSION AND ANALYSIS

The following Management Discussion and Analysis (“MD&A”) of the financial condition and results of operations of the Company for the year ended June 30, 2022 was prepared by management as of November 4, 2022 and was reviewed and approved by the Board of Directors. The following discussion of performance, financial condition and future prospects should be read in conjunction with the audited consolidated financial statements of the Company and notes thereto for the year ended June 30, 2022. See “Risk Factors”. The information provided herein supplements but does not form part of the financial statements. All amounts are stated in Canadian dollars unless otherwise indicated.

Certain information included in the MD&A is forward-looking and based upon assumptions and anticipated results that are subject to uncertainties. Should one or more of these uncertainties materialize or should the underlying assumptions prove incorrect, actual results may vary significantly from those expected. See “Forward-Looking Statements” for further details.

Overall Performance

The Company is incorporated in Ontario, Canada with its registered and head office at 505 Consumers Road, Suite 803, Toronto, Ontario, M2J 4V8. The Company was originally founded in Canada in 2013 as Abundant Solar Energy Inc., and in 2016 established a 100% owned U.S. subsidiary, Abundant Solar Power Inc., to meet the demand for renewable energy in both countries.

The Company is a growing renewable energy sector Company that specializes in delivering solar and other renewable energy power plants in Canada and the United States of America. Throughout its years in business, the Company has worked to provide safe, reliable and low-cost solar power plants that would generate solar renewable electricity to: (a) address the growing requirements to reduce carbon emissions in the form of Solar Renewable Energy Credits (“SREC”); and (b) provide a cost competitive alternative to conventional electricity generation to further decarbonize the electricity grid.

As an established independent renewable and clean energy project developer and asset operator, the Company is engaged in the site origination, development, engineering, procurement, construction, operation and maintenance, and asset management of a solar power plants, whether electricity grid interconnected or behind-the-meter (“BTM”) solar photovoltaic power plants on roofs of commercial and/or industrial buildings, or ground-mount solar farms, community-scale or utility-scale in size. The solar power plants could be net metered or virtual net metered to supply renewable energy to a specific commercial and industrial customer, or supply the green energy to community solar subscribers, or sell the renewable power or SREC to utilities in order to meet their Renewable Procurement Standard (“RPS”) compliance requirement or large corporations in meeting their carbon emission reduction limits or Net-Zero targets, such as NZ2050.

The Company is shifting its business model from a “develop to sell” strategy to the ownership of renewable projects as an Independent Power Producer. The Company will accelerate its portfolio growth of its close to 1GW solar photovoltaic (“PV”) power plant development and acquisition.

Selected Annual Information

Comparative information for annual periods from June 30, 2020, 2021 and 2022 has been presented in accordance with IFRS.

Year ended June 30	2022 (Audited) ($)			2021 (Audited) ($)			2020 (Unaudited) ($)
Revenue		10,197,619			7,346,581			13,474,095
Revenue - EPC		9,791,511			3,230,366			12,111,441
Revenue – Development		406,108			4,116,216			1,362,654
Cost of goods sold		(8,231,476	)		(4,814,144	)		(7,502,827	)
Net income (loss)		(188,391	)		(157,067	)		2,733,508
Net income (loss) per share		(0.01	)		(0.01	)		0.17
Total assets		9,194,537			10,283,255			7,889,295
Long-term debt		1,230,643			1,021,481			40,000
Dividends		-			-			-

The following discussion addresses the operating results and financial condition of the Company for the year ended June 30, 2022 compared with the year ended June 30, 2021. The MD&A should be read in conjunction with the Company’s audited consolidated financial statements and the accompanying notes for the year ended June 30, 2022.

Results of operations for the year ended June 30^th, 2022 as compared to the year ended June 30^th, 2021

In 2022, the Company continued to focus on scaling its business model by growing its pipeline and advancing its projects in EPC in US and development in both US and Canada. The two large New York-based projects contributed the majority of the revenue there were four smaller-sized projects in New York that started construction in 2022. It is expected that the Company’s revenue will keep growing in 2023 as two projects in the US reached NTP and many projects in the US are approaching NTP.

The net loss for the year ended June 30, 2022 increased by $31,326 compared to the year ended June 30, 2021 with $188,393 net loss recognized in 2022 as compared to a net loss of $157,067 recognized in 2021.

Key business highlights and projects updates in 2022

●	*Existing Projects*

Name	Location	Size (MW DC)	Timeline	Milestone	Current Status
Richmond	New York, USA	7.0	December 2022	Reach PTO (permission to operate)	EPC project. Reached 69% completion of the project. It’s expected to reach PTO in December 2022.
Portland	New York, USA	3.5	December 2022	Reach PTO (permission to operate)	EPC project. Reached 69% completion of the project. It’s expected to reach PTO in December 2022.
US1	New York, USA	0.4	December 2022	Reach PTO (permission to operate)	EPC project. It started in late June 2022. It’s expected to reach PTO in December 2022.
VC1	New York, USA	0.3	December 2022	Reach PTO (permission to operate)	EPC project. It started in late June 2022. It’s expected to reach PTO in December 2022.
SCA	New York, USA	0.7	December 2022	Reach PTO (permission to operate)	EPC project. Reached 32% completion of the project. It’s expected to reach PTO in December 2022.
Willis	New York, USA	0.2	December 2022	Reach PTO (permission to operate)	EPC project. Reached 82% completion of the project. It’s expected to reach PTO in December 2022.

●	*Projects under Development*

Name

Location

Size
(MWDC)

Timeline

Milestone

Expected Cost

Cost Incurred

Sources of Funding

Current Status

Manlius

New
York,
USA

6.1

March
2023

Completion of engineering and permitting, along with procurement deposit

500,000

IPO, working capital

The project currently has completed an interconnection agreement with the utility, and obtained permits from the local authority having jurisdiction. Engineering and initial construction have started and the Company is about to initiate the procurement of major equipment. The Company may have to delay the completion of the project to commercial operation if there is not enough funds to procure the components and hire local crews to build the project.

Revenue

Revenue for the year ended June 30, 2022 was $10,197,619 compared to $7,346,581 in the comparative period. The revenue increase was mainly the result of EPC services provided with respect to two significant projects in New York, USA.

The EPC service revenue for the year ended June 30, 2022 was $9,791,511 compared to $3,230,366 in the comparative period, increasing by $6,561,145, or 203%. The revenue increase was mainly because the significant project started in the fourth quarter of the year ended June 30, 2021 while the Company worked on the project throughout the year ended June 30, 2022.

For the year ended June 30, 2022, the Company generated $406,108 in development revenue from the sales of two small-size projects developed by the Company, compared to $4,116,216 for the year ended June 30, 2021 from the sales of five projects developed by the Company.

Expenses

For the year ended June 30, 2022, the Company incurred cost of goods sold of $8,231,476 compared to $4,814,144 in the comparative period, increasing by $3,417,332, or 71%. The cost of goods sold increased by $3,417,332 is mainly due to two reasons. First, the Company completed more EPC services. The company recognize both revenue and cost based on the complete rate of the projects. Second, the gross margin of development revenue is higher than EPC services revenue.

The operating expenses were $2,326,689 in the year ended June 30, 2022 compared to $2,395,610 in the comparative period. During the year ended June 30, 2022, the Company incurred accounting and legal expenses of $143,937 compared to $79,599 in the comparative period mainly due to the Company required audit services for initial public offering in 2022. The rent expense for the year ended June 30, 2022 was $82,955 compared to $161,704 in the comparative period mainly due to several rent agreements have expired in 2022. The office and miscellaneous expenses for the year ended June 30, 2022 was $123,498 compared to $79,983 in the comparative period mainly due to the Company incurred $34,095 business tax in New York city and $17,500 recruiting expenses in 2022, whereas no such expenses incurred in 2021. The Company incurred $1,774,583 salary and wages for the year ended June 30, 2022 compared to $1,937,458 in the comparative period mainly due to the Company have 8 employees worked full year in 2022, whereas there were 11 employees worked full year in 2021. Overall, general and administrative expenses were consistent in the prior two fiscal years.

Other Income (Expenses)

For the year ended June 30, 2022, the Company had other income of $53,822 compared to other expense of $244,807 for the year ended June 30, 2021. Other income for the year ended June 30, 2022 consisted mainly of interest expense of $150,910 compared to $332,203 in 2021, a fair value adjustment on accounts receivable of $nil compared to $212,779 in 2021, a foreign exchange gain of $87,956 compared to a foreign exchange loss of $51,327 in 2021, and a government Covid subsidy income of $133,506 compared to $386,537 in 2021.

Net Income (Loss)

The net loss for the year ended June 30, 2022 was $188,391 for a loss per share of $0.01 based on 16,000,000 outstanding shares for the year versus $157,067 for a loss per share of $0.01 based on 16,000,000 outstanding shares for the previous year. While revenues increased in the year ended June 30, 2022, the net loss was higher due to increases in cost of goods sold.

Total Assets

Total assets for the year ended June 30, 2022 were $9,194,537 compared to $10,283,255 in the comparative period. The decrease in assets was due to a decrease in cash and trade and other receivables, which was partially offset by an increase in inventory.

Total Liabilities

Total liabilities for the year ended June 30, 2022 were $4,753,922 compared to $5,873,953 in the comparative period. The decrease in liabilities was due to a decrease in trade and other payables and a decrease in loan payables.

Cash flow from operating activities

The Company generated cash of $171,212 from operating activities during the year ended June 30, 2022, while the Company used $2,684,859 cash during the same period ended June 30, 2021. The Company generated cash of $14,830 from the operational activities and generated $156,382 from the change of working capital during the year ended June 30, 2022, while the Company generated cash of $45,020 from the operating activities and used $2,729,879 due to the change of working capital for the same period ended June 30, 2021.

Cash flow from financing activities

The Company used cash of $679,271 in financing activities during the year ended June 30, 2022, while the Company generated $2,323,933 cash during the same period ended June 30, 2021. The cash used in financing activities for the year ended June 30, 2022 was mainly driven by the net proceeds received from long-term debts of $316,450, offset by the repayment of short-term loans of $982,642. The cash generated from financing activities for the year ended June 30, 2021 was mainly driven by the net proceeds received from long-term debt of $1,020,000 and the net proceeds received from short-term loans of $3,495,867, offset by the repayment of short-term loans of $2,147,436.

Cash flow from investing activities

The Company used cash of $10,970 in plant, property and equipment during the year ended June 30, 2022, while the Company used $3,194 in plant, property and equipment during the same period ended June 30, 2021.

Discussion of Operations and Outlook

Solar PV Technology

The Company is in the business of developing solar PV projects. PV devices generate electricity directly from sunlight via an electronic process that occurs naturally in certain types of material, called semiconductors. Electrons in these materials are freed by solar energy and can be induced to travel through an electrical circuit, powering electrical devices or sending electricity to the grid.

Solar power is not dependent on burning fossil fuels or other products; instead, it uses electrons captured from the sun’s energy for electricity creation. Therefore, solar energy does not create greenhouse gases for energy production. Most modern solar cells are made from crystalline silicon semiconductor material. Silicon cells are more efficient at converting sunlight to electricity, but generally have higher manufacturing costs.

The cost of PV has dropped dramatically as the industry has scaled up manufacturing and incrementally improved the technology with new materials. Installation costs have come down too with more experienced and trained installers.

Using the PV technology the Company develops, builds, and operates behind-the-meter (BTM) solar power plants, electricity grid connected community solar gardens, and utility scale solar farms

BTM Solar Power Plants

The Company is a turn-key service provider to commercial and industrial customers for them to own BTM solar power plant on-site. The Company can also invest and own the BTM solar projects where local policies allow commercial aggregation and 3rd party ownership.

The most effective method to achieve Net-Zero carbon emissions from buildings is to build them all electric, with BTM solar power plants on-site to generate zero emission renewable solar power for the building’s self-use. The BTM solar power plants are reasonable in size (average 300 kWp) as rooftop, carport or ground mount systems. A BTM solar power plant can be net metered, through which the excess solar energy produced by the plant can be sent back to the grid in return for a credit or money from the local utility. BTM solar power plants have the following benefits:

	●	Self-consumption of distributed generation,
	●	Energy cost savings,
	●	Control project operations and maintenance,
	●	Visible commitment to sustainability, and
	●	Resiliency (with battery storage).

BTM solar power generation provides a readily available solution toward the goal of Net-Zero by 2050. There has been an increased interest in BTM solar power plants as an effective way to halt climate change. The Company is experienced in BTM solar and currently manages a number of BTM solar power plants. It is anticipated that the Company will be able to develop and build 10 MWp BTM solar power plants in 2023 in Canada and the USA.

Community Solar Farms

Community solar refers to local solar PV facilities shared by multiple community subscribers who receive credit on their electricity bills for their share of the power produced. Community solar provides homeowners, renters, and businesses equal access to the economic and environmental benefits of solar energy generation regardless of the physical attributes or ownership of their home or business. Community solar expands access to solar for all, including in particular low-to-moderate income customers most impacted by a lack of access, all while building a stronger, distributed, and more resilient electric grid. Community solar power plants are usually less than seven (7) megawatts (MWdc) of electrical capacity, and it could power about 1,000 homes (the average American household uses approximately 10,000 kWh per year).

The Company works with 3^rd party subscriber organizations in Boston and Chicago to manage its current 4,000 or so community solar subscribers. It is anticipated that the Company will deliver 20 MWp community solar farms with an additional 3,000 subscribers in year 2023.

Utility Solar Farms

What distinguishes utility-scale solar from distributed generation is both project size and the fact that the electricity is sold to wholesale energy buyers, not end-use consumers. Virtually every utility-scale solar facility has a power purchase Agreement (PPA) with a corporation, an IPP or a utility, guaranteeing a market for its energy for a fixed term of time.

Utility-scale solar farm has become a growing source of electricity in the world. Many companies will need to partner with solutions providers such as the Company to help put them on a net-zero trajectory. The Company is actively advancing its utility scale solar farms pipeline of 200 MWp and anticipates to deliver a 20 MWp utility scale solar farm in 2023.

Battery Energy Storage Systems (BESS)

The Company is actively participating with a development partner in the Ontario IESO Expedited Process Competitive RFP Procurement of Battery Energy Storage Systems (BESS). Up to 20 BESS projects, all located in Ontario, Canada, are expected to be bid on by end of year 2022, with 5 MW and minimum of 20 MWh for each of the BESS projects.²⁶

Legal Matters and Contingent Assets

The Company is subject to the following legal matters and contingencies:

In June 2022, a group of residents filed an Article 78 lawsuit against town of Manlius, New York, over the solar panel project on town property. The lawsuit was filed challenging the approval of the Manlius landfill. The Company, in cooperation with the town, is vigorously defending this suit. On October 5, 2022 by decision of the State of New York Supreme Court, the lawsuit was dismissed. However, on October 19, 2022 an appeal was filed by the petitioners in the Appellate Division of the State of New York Supreme Court. The likelihood of success in these lawsuits cannot be reasonably predicted.

On June 29, 2018, the Progressive Conservative Party of Ontario was sworn in as the new provincial government. On July 13, 2018, the new government issued an Order in Council containing the Minister of Energy’s Directive to immediately take all steps necessary to wind down all FIT 2, 3, 4 and 5 contracts where the IESO had not issued Notice to Proceed (“NTP”). An NTP was issued for a contract when it was ready for construction.

In response to the Minister of Energy’s Directive, the IESO issued termination notices to all pre-NTP FIT contract holders on July 16, 2018. However, the notice confirmed FIT Contract provisions for the cost recovery of Pre-Construction Development Costs (“PCDC”) in the event of contract termination. Pre-Construction Development Costs are defined as reasonable costs incurred in development of a project from contract award date to termination date. The total value of the PCDC claims submitted by the Company’s subsidiary, 2467264 Ontario Inc, is $6.3 million. The ultimate amount to be recovered is subject to the IESO’s approval, and there is no certainty as to the actual amount to be recovered from the IESO. Subsequent to June 30, 2022, no amounts have been recovered from IESO.

²⁶Independent Electricity System Operator. https://www.ieso.ca/en/Sector-Participants/Resource-Acquisition-and-Contracts/Long-Term-RFP-and-Expedited-Process

On December 2, 2020, a Statement of Claim was filed by the Company’s subsidiary, 2467264 Ontario Inc, and seven independent solar project developers (collectively the “Plaintiffs”) against the Ontario Ministry of Energy, Northern Development and Mines (“MOE”), the IESO, and John Doe (collectively the “Defendants”). Plaintiffs seek damages from the Defendants in the amount of $240 million in lost profits, $17.8 million in development costs, and $50 million in punitive damages for misfeasance of public office, breach of contract, inducing the breach of contract, breach of the duty of good faith and fair dealing, and conspiracy resulting in the wrongful termination of 111 FIT Contracts. This lawsuit was previously subject to a leave requirement under s. 17 of the Crown Liability and Proceedings Act, 2019. However, a recent decision of the Ontario Superior Court of Justice has deemed s. 17 of no force and effect (see Poorkid Investments v. HMTQ, 2022 ONSC 883). Accordingly, the lawsuit will continue to move forward through the normal course. We expect statements of defence to be served following the determination of some preliminary motions. No amounts are recognized in these consolidated special purpose financial statements with respect to this claim.

On January 29, 2021, a second Statement of Claim was filed by the Company’s subsidiary, 2467264 Ontario Inc, and fourteen independent solar project developer (collectively the “Plaintiffs”) against the MOE, the IESO, and Greg Rickford, as Minister of the MOE (collectively the “Defendants”). The Plaintiffs seek damages from the Defendants in the amount of $260 million in lost profits, $26.9 million in development costs, and $50 million in punitive damages for breach of contract and breach of duty of good faith and fair dealing resulting in the wrongful termination of 133 FIT contracts. This second Statement of Claim is separate and in addition to the first Statement of Claim filed. This lawsuit was previously subject to a leave requirement under s. 17 of the Crown Liability and Proceedings Act, 2019. However, a recent decision of the Ontario Superior Court of Justice has deemed s. 17 of no force and effect (see Poorkid Investments v. HMTQ 2022 ONSC 883). Accordingly, the lawsuit will continue to move forward through the normal course. We expect statements of defence to be served following the determination of some preliminary motions, including a motion to consolidate the two actions into a single action. No amounts are recognized in these combined special purpose financial statements with respect to this claim.

The Company has $6,486,838 in accounts receivable outstanding from the Solar Flow Through group of companies (“SFT Group”) for development services performed for their solar contracts from December 2017 to July 2018. The Government of Ontario cancelled said solar contracts in July 2018 ceasing all development work. Accordingly, the accounts receivable balance is not yet recognized.

Summary of Quarterly Results

The Company has not previously prepared quarterly financial statements and as a result is not providing a tabular comparison of the eight most recently completed quarters.

Results of operations for the three months ended June 30, 2022

During the fourth quarter of 2022, the Company generated $196,872 in revenue mainly from the four New York-based projects which represent 2MW capacity. The slowdown of the revenue was due to the change of a major vendor for the two large EPC projects in New York. The change has been completed and the Company expects to complete the two projects in the first half of 2023.

The Company reported a comprehensive loss from operations for the three months ended June 30, 2022 of $369,268

Reviews of the major expenditures items in the fourth quarter of 2022 are as follows:

●	Salary and wages: $458,764

●	Accounting and legal expenses: $72,699

●	Office expenses: $65,826

●	Interest expense: $61,292

Liquidity

As at June 30, 2022, the Company had a cash balance of $931,977 (June 30, 2021 - $1,400,073) with working capital surplus of $5,617,200 (June 30, 2021 - $5,524,025).

The Company believes that with the proceeds of the Offering, along with its expected operating income and cash flows it has sufficient working capital to continue its operations for the next twelve months. To date, the Company’s operations have been financed from cash flows from operations and debt financing. The Company will continue to identify financing opportunities in order to provide additional financial flexibility and execute on the Company’s growth plans. While the Company has been successful raising the necessary funds in the past, there can be no assurance it can do so in the future.

The Company’s cash is held in highly liquid accounts. No amounts have been or are invested in asset-backed commercial paper.

Capital Resources

Share Capital Transactions

On April 8, 2022, the Company entered into a promissory note agreement with Energy Line Investment Ltd. (ELI) for a loan of $320,273 (US$250,000) with an interest rate of 8% compounded annually. The principal of loan is unsecured and payable on a quarterly basis beginning July 8, 2023 with the amount of $40,034. The interest of loan is payable on a quarterly basis beginning July 8, 2022 of amount of $6,329. The loan is fully repaid in 8 equal quarterly instalments.

Capital Management

The Company’s objectives in managing liquidity and capital are to safeguard the Company’s ability to continue as a going concern and to provide financial capacity to meet its strategic objectives. The capital structure of the Company consists of the following:

	June 30, 2022		June 30, 2021
Long-term debt – non-current portion	$	1,230,643	$	1,021,481
Shareholders’ equity	$	4,440,615	$	4,409,302

The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the capital structure, the strategies employed by the Company may include the issuance or repayment of debt, dividend payments, or sale of assets. The Company has determined it will have sufficient funds to meet its current operating and development obligations for at least 12 months from the reporting date.

There has not been any significant change in capital management from the prior year.

Capital Structure

The Corporation is authorized to issue an unlimited number of common shares. As of the date of this MD&A, there were (i) 16,000,000 common shares issued and outstanding; and (ii) $1,250,000 principal amount of convertible debt that is convertible into 2,500,000 common shares, 2,500,000 Series A Warrants and 2,500,000 Series B Warrants; and (iii) 2,500,000 Advisory Warrants.

Off-Balance Sheet Arrangements

The Company is not a party to any off-balance sheet arrangements or transactions.

Transactions Between Related Parties

At June 30, 2022, included in accounts payable and accrued liabilities was $104,545 (2021 - $211,404) owing to certain officers and director (Richard Lu) of the Company regarding the accrued salary and bonus for services provided to the Company.

At June 30, 2022, included in trade and other receivable was $121,704 (2021 - $57,610) due from Sustainable Investment Ltd., who has a director (Richard Lu) in common, for a short-term bridge funding to cover working capital and project development expenses.

At June 30, 2022, included in trade and other receivables was $86,000 (2021 - $57,610) due from Renewable Sun Energy Co-Op, who has a director (Richard Lu) in common, for the payment made to a vendor on behalf of Renewable Sun Energy Co-Op.

At June 30, 2022, included in loan payable was $567,664 (2021 - $641,309) shareholder loan advance from a shareholder (Richard Lu). This loan is secured and was for short-term bridge funding to cover working capital and project development expenses.

Except as noted above with respect to the loan payable from Richard Lu, the amounts due to related parties are unsecured, non-interest bearing and have no stated terms of repayment. All transactions entered into with related parties are on terms equivalent to those that each related party charges to arm’s length parties.

Key management compensation

Key management personnel include those persons having authority and responsibility for planning, directing and controlling the activities of the Company as a whole. The Company has determined that key management personnel consists of members of the Company’s Board of Directors and corporate officers, including the Company’s Chief Executive Officer, Chief Financial Officer, Chief Operating Officer and Chief Administrative Officer.

The remuneration of directors and other members of key management personnel, for the year ended June 30, 2022 and 2021 were as follows:

		June 30, 2022				June 30, 2021
Short-term employee benefits		$	998,511				1,049,045

Short-term employee benefits include consulting fees and bonus.

Critical Accounting Estimates

Revenue recognition:

The Company recognizes revenue for project development services, engineering, procurement, and construction (“EPC”) services and operation and maintenance (“OM”) services.

The Company applies the five-step model to contracts when it is probable that the Company will collect the consideration that it is entitled to in exchange for the services transferred to the customer.

At contract inception, the Company assesses services promised within each contract that falls under the scope of IFRS 15, to identify distinct performance obligations.

Project development services

Project development service contract with customers has a single performance obligation which is for the Company to deliver a fully permitted project which is ready for construction. The performance obligation is said to be satisfied at a point in time when development is considered complete. Therefore, the revenue from development contract is recognized when a solar project is fully permitted and ready for construction.

OM services

OM service contract with customers has a single performance obligation which is for the Company to provide hourly maintenance services as needed for the solar sites. The performance obligation is said to be satisfied over a period of time. Therefore, the Company recognizes revenue monthly which is when service is rendered and based on the hours spent times pre-determined hourly rate outline in the contract.

EPC services

The contract for EPC services has a single performance due to the services included in EPC contract are highly interrelated and the contract includes a significant service of integrating the goods and services into the combined item the customer contract for, that is, to build the solar sites. The performance obligations are satisfied over a period of time. Therefore, the revenue is recognized over a period of time based on the kW size of the project and fixed rate per kW outlined in the contract. The amount that the Company has a right to bill the customer reflects the pattern of transfer and value of the completed performance to the customer. As a result, the Company applies the “right to invoice” practical expedient under IFRS 15, to measure and recognize revenue.

Inventory:

Inventory is stated at the lower of cost and net realizable value. Cost includes acquisition costs, direct development costs, borrowing costs, property taxes and other overheads incurred for the development of prospective solar projects. Net realizable value is the estimated selling price in the ordinary course of the business at the balance sheet date, less costs to complete and estimated selling costs.

Taxes:

The Company accounts for differences that arise between the carrying amount of assets and liabilities and their tax bases in accordance with IAS 12, Income Taxes, which requires deferred income tax assets only to be recognized to the extent that it is probable that future taxable profits will be available against which the deferred income tax assets can be utilized. The Company estimates future taxable profits based on the future financial models and projections. Any change to the estimates and assumptions used for the key operational and financial variables could affect the amount of deferred income tax assets recognized by the Company. Provisions for taxes are made using the best estimate of the amount expected to be paid based on a qualitative assessment of all relevant factors. The Company reviews the adequacy of these provisions at the end of the reporting period.

Expected credit loss:

The Company makes estimates for expected credit loss in respect of accounts receivables and other receivables based on IFRS 9 – Financial instruments. The expected credit loss is estimated based on management’s assessment of the credit history with the customers, current relationship with them and also taking into consideration of forward-looking information. A change in customers’ payment behaviour or financial position could impact the expected credit loss recorded in the accounts. If actual credit losses differ from estimates, future earnings would be affected.

Warranties:

The Company generally provides a warranty period of one year for its services. Management applies estimates in establishing warranty provision on the basis of warranty terms in the sales contract and historical experience. For the year ended June 30, 2022, $Nil warranty provision was recorded (2021 - $Nil).

Contract fulfilment costs:

When determining the appropriate accounting treatment for the costs incurred to fulfil a contract, the Company firstly considers any other applicable standards. If those other standards preclude capitalisation of a particular cost, then an asset is not recognized under IFRS 15.

If other standards are not applicable to such contract fulfilment costs, the Company applies the following criteria which, if met, result in capitalisation: (i) The costs directly relate to a contract or to a specifically identifiable anticipated contract; (ii) the costs generate or enhance resources of the entity that will be used in satisfying (or in continuing to satisfy) performance obligations in the future; (iii) the costs are expected to be recovered. The assessment of this criteria requires the application of judgement, in particular when considering if costs generate or enhance resources to be used to satisfy future performance obligations and whether costs are expected to be recoverable.

The Company has determined that, where the relevant specific criteria are met, the costs directly relate to engineering services, procurement and construction services rendered are likely to qualify to be capitalised as contract fulfilment assets.

Judgement is applied by the Company when determining what costs qualify to be capitalised in particular when these costs are incremental and whether these are expected to be recoverable.

Utilization, derecognition and impairment of contract fulfilment costs:

The Company utilises contract fulfilment costs to cost of good sold over the expected contract period using a systematic basis that mirrors the pattern in which the Company transfers control of the services to the customer.

A contract fulfilment costs is derecognised either when it is disposed of or when no further economic benefits are expected to flow from its use or disposal.

At each reporting date, the Company determines whether or not the contract fulfilment costs are impaired by comparing the carrying amount of the asset to the remaining amount of consideration that the Company expects to receive less the costs that relate to providing services under the relevant contract. In determining the estimated amount of consideration, the Company uses the same principles as it does to determine the contract transaction price, except that any constraints used to reduce the transaction price will be removed for the impairment test.

Financial Instruments and Other Instruments (Management of Financial Risks)

Fair value

The Company’s financial assets and liabilities carried at fair value are measured and recognized according to a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable inputs. The three levels of fair value hierarchy are as follows:

	●	Level 1: Quoted prices in active markets for identical assets or liabilities.
	●	Level 2: Inputs other than quoted prices that are observable for the asset or liability.
	●	Level 3: Inputs for the asset or liability that are not based on observable market data.

Cash is carried at fair value using a Level 1 fair value measurement. The Company do not have Level 2 and Level 3 financial instrument.

The carrying amounts of trade and other receivables, due from and due to related parties, trade and other payables approximate their fair values due to the short-term maturities of these items. The carrying amounts of loan payable, lease liabilities and long-term debt approximate their fair value as they are discounted at the current market rate of interest.

Credit risk

Credit risk is the risk of financial loss associated with the counterparty’s inability to fulfill its payment obligations. The Company has no significant credit risk with its counterparties. The carrying amount of financial assets net of impairment, if any, represents the Company’s maximum exposure to credit risk.

The Company has assessed the creditworthiness of its trade and other receivables and amount determined the credit risk to be low. Utility deposits are made to local government utility with high creditworthiness. Cash has low credit risk as it is held by internationally recognized financial institutions.

The Company does note that it has $6,486,838 in accounts receivable outstanding from the SFT Group for development services performed. The accounts receivable balance is not yet recognized.

Concentration risk and economic dependence

The outstanding accounts receivable balance is relatively concentrated with a few large customers representing majority of the value. See table below showing a few customers who account for over 10% of total revenue as well as customers who account for over 10% percentage of outstanding Accounts Receivable.

Year ended June 30, 2022		Amount of Revenue				% of Total Revenue
Customer A		$	8,925,034				88	%

	Amount of Account Receivable			% of Account Receivable
Customer B		$	1,469,692		79	%
Customer C		$	371,054		20	%

Year ended June 30, 2021	Amount of Revenue		% of Total Revenue
Customer A	$	3,091,443		42	%
Customer D		1,320,137		18	%

		Amount of Account Receivable	% of Account Receivable
Customer A	$	3,619,579	64	%
Customer B	$	1,596,777	28	%

The Company also dependent on major service contractors to complete the projects. In January 2022, one major mechanical installation contractor for the two main projects went bankrupt which interrupted the construction and increased the uncertainty regarding when the Company would finish the projects. The contract value of the major contractor is $789,750. The Company is actively looking for the replacement to substitute this major contractor. Due to the bankruptcy and the fact that the Company could not estimate when the installation will be completed and reach COD, the Company is not able to invoice the customer. The cost of $2,932,820 (USD2,316,970) incurred on the projects was recorded as contract fulfilment costs.

Management assessed no impairment is required on contract fulfilment costs due to the projects can be either delivered to the current customer or the Company is able to recover the value by taking the ownership and run the projects by its own.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company’s approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due by maintaining adequate reserves, banking facilities, and borrowing facilities. All of the Company’s financial liabilities are subject to normal trade terms.

Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company does not carry debt at a variable rate and is exposed to interest rate risk on its cash which is not considered significant.

Commitment of loan for the next five years

Estimated principal repayments are as follows:

2023	$	111,111
2024		311,247
2025		171,247
2026		111,111
2026 onwards		537,037
Total	$	1,341,754

Commitment of lease for the next five years

The maturity analysis of the Company’s contractual undiscounted lease liabilities as of June 30, 2022 is as follows:

2023	$	46,965
2024		60,302
2025		64,183
2026		67,957
2027		11,431
Total	$	250,839

Subsequent Events

Loan repayment

In September 2022, the Company fully repaid the shareholder’s loan in advance in the amount of $567,664 plus interest of $157,245.

Debenture financing

On October 3, 2022 the Company completed a convertible bridge loan financing for gross proceeds of $1,250,000 (the “Convertible Loan”). Upon the closing of the Offering, the proceeds of the Convertible Loan shall covert into Conversion Units at a conversion price of $0.50 per Conversion Unit. Each Conversion Unit consists of one Common Share, one Series A Warrant and one Series B Warrant.

Advisory warrant

On October 3, 2022 the Company entered into a corporate and financial advisory agreement with a private equity firm. Pursuant to the agreement, the private equity firm is entitled to 2,500,000 transferable warrants, which will be vested on the closing of the Company’s IPO. The warrants shall entitle the holder to acquire shares for a period of five years at an exercise price equal to $0.10, subject to adjustment for any share consolidations or splits that occur prior to the closing of the IPO.

Name change

On October 7, 2022, the Company changed its name from Abundant Solar Energy Inc. to SolarBank Corporation.

Stock split

On October 17, 2022, the Company completed a share split on a 1:160 basis. The total number of outstanding common shares after the split became 16,000,000.

interim MANAGEMENT’S DISCUSSION AND ANALYSIS

The following MD&A of the financial condition and results of operations of the Company for the three months ended September 30, 2022 was prepared by management as of December 8, 2022 and was reviewed and approved by the Board of Directors. The following discussion of performance, financial condition and future prospects should be read in conjunction with the unaudited interim consolidated financial statements of the Company and notes thereto for the three months ended September 30, 2022. See “Risk Factors”. The information provided herein supplements but does not form part of the financial statements. All amounts are stated in Canadian dollars unless otherwise indicated.

Overview

Business Profile

SolarBank Corporation is incorporated in Ontario, Canada with its registered and head office at 505 Consumers Road, Suite 803, Toronto, Ontario, M2J 4V8. The Company was originally founded in Canada in 2013 as Abundant Solar Energy Inc, and in 2017 established a 100% owned U.S. subsidiary, Abundant Solar Power Inc., to meet the demand for renewable energy in both countries.

SBNK is a growing renewable energy sector Company that specializes in delivering solar and other renewable energy power plants in Canada and the United States of America. Throughout its years in business, the Company has worked to provide safe, reliable and low-cost solar power plants that would generate solar renewable electricity to: (a) address the growing requirements to reduce carbon emissions in the form of Solar Renewable Energy Credits (“SREC”); and (b) provide a cost competitive alternative to conventional electricity generation to further decarbonize the electricity grid.

As an established independent renewable and clean energy project developer and asset operator, the Company is engaged in the site origination, development, EPC, O&M, and asset management of a solar power plants, whether electricity grid interconnected or BTM solar photovoltaic power plants on roofs of commercial and/or industrial buildings, or ground-mount solar farms, community-scale or utility-scale in size. The solar power plants could be net metered or virtual net metered to supply renewable energy to a specific commercial and industrial customer, or supply the green energy to community solar subscribers, or sell the renewable power or SREC to utilities in order to meet their RPS compliance requirement or large corporations in meeting their carbon emission reduction limits or Net-Zero targets, such as NZ2050 or NZ2035.

Development of the Business

USA

The Company is focused on its key market in New York and Maryland. In New York the Company is constructing a total of 6 solar projects, totaling 12 MWp (see Existing Projects table below), including two Community Solar projects, two with municipal power purchase agreement (PPA), and two net metering projects for Honeywell International Inc. The Company also has two community solar projects reached Notice to Proceed; seven community solar projects under utility interconnection studies. In addition the Company is working on sites origination of potential community solar projects. The Company is working with the Maryland Department of Transportation on eighteen potential solar project sites.

Community solar needs state-level polices in order to thrive. The Company is monitoring certain potential markets such as Illinois, Pennsylvania, Michigan, Ohio and Virginia where legislation for community solar programs is improving.

Canada

Over the past few years, the real estate sector has experienced an evolution in the importance of Environmental, Social and Governance (“ESG”) issues. The sector has made tremendous strides in tackling its contribution to Climate Change but despite efforts made so far, there is still a significant amount of work to be done, particularly given real estate’s 40% contribution toward global carbon emissions. Many Canadian real estate companies are set out to achieve its net zero emissions goals for all their operations and new developments. Real estate can be developed and managed to make positive impacts by stopping the growth of carbon emissions from properties and reduce emissions dramatically.

The Company, in addition to its on-going business in Canada to provide operation and maintenance services of solar projects, is developing solutions to assist the real estate sector to achieve net zero greenhouse gas emissions.

Selected Quarterly Information

The following table set selected condensed interim consolidated financial information for the Company for the three months period ended September 30, 2022 and 2021 and should be read in conjunction with the Company’s consolidated financial statements as at June 30, 2022 and 2021 and related notes thereto for such periods.

The condensed interim consolidated financial statements of the Company have been prepared in accordance with the International Financial Reporting Standards (“IFRS”) and are expressed in Canadian dollars.

For the three months ended September 30	2022 $		2021 $
Revenue		5,480,452		2,602,057
Revenue – EPC		5,465,542		2,302,057
Revenue – development		-		300,000
Revenue – O&M		14,910		-
Cost of goods sold		4,917,533		(2,070,005	)
Net income (loss)		225,957		(88,222	)
Net income (loss) per share		0.01		(0.01	)

As at	September 30, 2022 $		June 30, 2022 $
Total assets		9,827,628		9,194,537
Total current liabilities		4,154,821		3,365,909
Total non-current liabilities		1,067,740		1,388,013

The following discussion addresses the operating results and financial condition of the Company for the three months ended September 30^th, 2022 compared with the three months ended September 30^th, 2021.

Result of Operations

Three months ended September 30, 2022 compared to the three months ended September 30, 2021

During the first quarter of 2023, the Company continued to focus on scaling its business model by growing its pipeline and advancing its projects in EPC in US and development in both US and Canada. Within the quarter the Company made progress towards completing two large US EPC contracts, which drove the increase in EPC revenue during the quarter compared to the same quarter in 2022. It is expected that the Company’s revenue will keep growing in 2023 as two projects in the US reached NTP and many projects in the US are approaching NTP.

The net income for the three months ended September 30, 2020 increased by $314,179 compared to the net loss for the three month ended September 30, 2021 with $225,957 net income recognized during the first quarter of 2023 as compared to a net loss of $88,222 for the first quarter of 2022.

Key business highlights and projects updates in Q1 2023

●

Existing projects

Name	Location	Size (MW DC)	Timeline	Milestone	Current Status
Richmond	New York, USA	7.0	December 2022	Reach PTO (permission to operate)	EPC project. Reached 91% completion of the project. It’s expected to reach PTO in December 2022.
Portland	New York, USA	3.5	December 2022	Reach PTO (permission to operate)	EPC project. Reached 91% completion of the project. It’s expected to reach PTO in December 2022.
US1	New York, USA	0.4	December 2022	Reach PTO (permission to operate)	EPC project. Reached 86% completion of the project. It’s expected to reach PTO in December 2022.
VC1	New York, USA	0.3	December 2022	Reach PTO (permission to operate)	EPC project. Reached 62% completion of the project. It’s expected to reach PTO in December 2022.
SCA	New York, USA	0.7	December 2022	Reach PTO (permission to operate)	EPC project. Reached 67% completion of the project. It’s expected to reach PTO in December 2022.
Willis	New York, USA	0.2	December 2022	Reach PTO (permission to operate)	EPC project. Reached 82% completion of the project. It’s expected to reach PTO in December 2022.

●	*Projects under development*

Name

Location

Size
(MWDC)

Timeline

Milestone

Expected Cost

Cost Incurred

Sources of Funding

Current Status

Manlius

New
York,
USA

6.1

March
2023

Completion of engineering and permitting, along with procurement deposit

500,000

93,540

IPO, working capital

Geddes

New
York,
USA

4.0

March
2023

Completion of engineering and permitting, along with procurement deposit

500,000

59,816

IPO, working capital

SUNNY

New
York,
USA

28.0

September
2023

Completion of interconnection studies, engineering and permitting, along with interconnection deposit, and procurement bid application fee

900,000

IPO, working capital

The Company has submitted an interconnection request to New York Independent System Operator. It has secured site control via an executed lease with the landowner. It has also qualified to submit a Proposal under NYSERDA’s RESRFP22-1 for Renewable Energy Credits (RECs). The barrier to completion is the timing and result of the interconnection request could delay the progress of engineering, permitting and interconnection deposit.

261
Township

Alberta,
Canada

4.5

June
2023

Completion of engineering work and placement of orders for main project components

800,000

IPO, working capital

Dutch
Hill 1

New
York,
USA

7.0

December
2023

Completion of design and submission of zoning and interconnection documents to regulatory agencies

400,000

750

IPO, working capital

The three projects are under utility interconnection study. The design work will be after the completion of the interconnection study.

Dutch
Hill 2

New
York,
USA

7.0

December
2023

Completion of design and submission of zoning and interconnection documents to regulatory agencies

300,000

750

IPO, working capital

Dutch
Hill 3

New
York,
USA

7.0

December
2023

Completion of design and submission of zoning and interconnection documents to regulatory agencies

300,000

IPO, working capital

Wastebeds1

New
York,
USA

7.0

December
2023

Completion of design and submission of zoning and interconnection documents to regulatory agencies

300,000

750

IPO, working capital

The three projects are under utility interconnection study. The design work will be after the completion of the interconnection study.

Wastebeds2

New
York,
USA

7.0

December
2023

Completion of design and submission of zoning and interconnection documents to regulatory agencies

300,000

750

IPO, working capital

Wastebeds3

New
York,
USA

7.0

December
2023

Completion of design and submission of zoning and interconnection documents to regulatory agencies

300,000

750

IPO, working capital

Revenue

Revenue for the three months ended September 30, 2022 was $5,480,452 compared to $2,602,057 in the comparative period, increasing by $2,878,395, or 111%.

The EPC service revenue for the three months ended September 30, 2022 was $5,465,542 compared to $2,302,057 in the comparative period, increasing by $3,163,485, or 137%. The revenue increase was mainly because the completion rate of the two significant projects in New York, USA in the first quarter of 2023 is higher than the rate in the first quarter of 2022.

For the three months ended September 30, 2022, the Company had $nil development revenue, compared to $300,000 for the three months ended September 30, 2021. The Company had no sales of projects which reach NTP in the first quarter of 2023, compared to one sales in the US in the first quarter of 2022.

The O&M services revenue for the three months ended September 30, 2022 was $14,910, compared to $nil in the comparative period. The Company is growing the O&M services revenue by allocating more resource to this revenue stream.

Expenses

For the three months ended September 30, 2022, the Company incurred cost of good sold of $4,917,533 compared to $2,070,005 for the three months ended September 30, 2021. The cost of goods sold increased by $2,847,528, or 138%, was mainly due to the higher percentage of completion of the two significant projects in the US in the first quarter of 2023. The company recognize both revenue and cost based on the complete rate of the projects.

The operating expenses were $426,252 in the three months ended September 30, 2022 compared to $636,239 in the comparative period. The operating expenses decreased by $209,987, or 33%, was mainly resulted from a decrease of $285,927, or 54% in salary and wages expenses, offset by an increase of $63,191, or 1339%, in office and miscellaneous expenses. The Company incurred $240,372 salary and wages expenses for the three months ended September 30, 2022 compared to $526,299 in the comparative period. The decrease was mainly due to $104,341 of performance based bonus to the CEO of the Company in the three months period ended September 30, 2021 compared to $nil during the three months period ended September 30, 2022. In addition, the Company has 10 employees during the three months period ended September 30, 2022 compared to 13 employees during the same period ended September 30, 2021. The Company incurred $67,909 expenses in office and miscellaneous for the three months ended September 30, 2022 compared to compared to $4,718 in the comparative period. The increase in office and miscellaneous was due the recruiting expense of $59,069 in the three months period ended September 30, 2022, whereas no such recruiting expenses incurred for the same period ended September 30, 2021.

Other Income (Expense)

For the three months ended September 30, 2022, the Company had other income of $89,290 compared to other income of $15,965 for the three months ended September 30, 2021. Other income for the three months ended September 30, 2022 consists mainly of interest expense of $32,782 compared to $42,800 for the same period end September 30, 2021, and a foreign exchange gain of $124,647 compared to $65,934 for the same period ended September 30, 2021.

Net Income (loss)

The net income for the three months ended September 30, 2022 was $225,957 for a income per share of $0.01 based on 16,000,000 outstanding shares versus $88,222 for a loss per share of $0.00 based on 16,000,000 outstanding shares for the comparative period.

Legal Matters and Contingent Assets

The Company is subject to the following legal matters and contingencies:

(1)

In June 2022, a group of residents filed an Article 78 lawsuit against town of Manlius, New York, over solar panel project on town property. The lawsuit was filed challenging the approval of the Manlius landfill. The company, in cooperation with the town, is vigorously defending this suit. The likelihood of success in these lawsuits cannot be reasonably predicted.

(2)

On June 29, 2018, the Progressive Conservative Party of Ontario was sworn in as the new provincial government. On July 13, 2018, the new government issued an Order in Council containing the Minister of Energy’s Directive to immediately take all steps necessary to wind down all FIT 2, 3, 4 and 5 contracts where the IESO had not issued Notice to Proceed (“NTP”). An NTP was issued for a contract when it was ready for construction.

In response to the Minister of Energy’s Directive, the IESO issued termination notices to all pre-NTP FIT contract holders on July 16, 2018. However, the notice confirmed FIT Contract provisions for the cost recovery of Pre-Construction Development Costs (“PCDC”) in the event of contract termination. Pre-Construction Development Costs are defined as reasonable costs incurred in development of a project from contract award date to termination date. The total value of the PCDC claims submitted by the Company’s subsidiary, 2467264 Ontario Inc, is $6.3 million. The ultimate amount to be recovered is subject to the IESO’s approval, and there is no certainty as to the actual amount to be recovered from the IESO. Subsequent to June 30, 2021, no amounts have been recovered from IESO.

(3)

On December 2, 2020, a Statement of Claim was filed by the Company’s subsidiary, 2467264 Ontario Inc, and seven independent solar project developers (collectively the “Plaintiffs”) against the Ontario Ministry of Energy, Northern Development and Mines (“MOE”), the IESO, and John Doe (collectively the “Defendants”). Plaintiffs seek damages from the Defendants in the amount of $240 million in lost profits, $17.8 million in development costs, and $50 million in punitive damages for misfeasance of public office, breach of contract, inducing the breach of contract, breach of the duty of good faith and fair dealing, and conspiracy resulting in the wrongful termination of 111 FIT Contracts. 2467264 Ontario Inc. will receive its proportionate entitlement of any net legal award based on its economic entitlement of 8.3% to the legal claim. This lawsuit was previously subject to a leave requirement under s. 17 of the Crown Liability and Proceedings Act, 2019. However, a recent decision of the Ontario Superior Court of Justice has deemed s. 17 of no force and effect (see Poorkid Investments v. HMTQ 2022 ONSC 883). Accordingly, the lawsuit will continue to move forward through the normal course. We expect statements of defence to be served following the determination of some preliminary motions. No amounts are recognized in these consolidated special purpose financial statements with respect to this claim.

(4)

On January 29, 2021, a second Statement of Claim was filed by the Company’s subsidiary, 2467264 Ontario Inc, and fourteen independent solar project developer (collectively the “Plaintiffs”) against the MOE, the IESO, and Greg Rickford, as Minister of the MOE (collectively the “Defendants”). The Plaintiffs seek damages from the Defendants in the amount of $260 million in lost profits, $26.9 million in development costs, and $50 million in punitive damages for breach of contract and breach of duty of good faith and fair dealing resulting in the wrongful termination of 133 FIT contracts. 2467264 Ontario Inc. will receive its proportionate entitlement of any net legal award based on its economic entitlement of 0.7% to the legal claim. This second Statement of Claim is separate and in addition to the first Statement of Claim filed. This lawsuit was previously subject to a leave requirement under s. 17 of the Crown Liability and Proceedings Act, 2019. However, a recent decision of the Ontario Superior Court of Justice has deemed s. 17 of no force and effect (see Poorkid Investments v. HMTQ 2022 ONSC 883). Accordingly, the lawsuit will continue to move forward through the normal course. We expect statements of defence to be served following the determination of some preliminary motions, including a motion to consolidate the two actions into a single action. No amounts are recognized in these combined special purpose financial statements with respect to this claim.

(5)

The Company has $6,486,838 in accounts receivable outstanding from the SFT Group for development services performed for their solar contracts from December 2017 to July 2018. The Government of Ontario cancelled said solar contracts in July 2018 ceasing all development work. Accordingly, the accounts receivable balance is not yet recognized.

Summary of Quarterly Results

The Company has not previously prepared quarterly financial statements except for the three months ended September 2022 and 2021. According to item 1.5 (ii) of Form 51-102F1, the Company is not providing a tabular comparison of the eight most recently completed quarters.

Liquidity and Capital Resources

As at September 30, 2022, the Company had a cash balance of $3,864,461 (June 30, 2022 - $931,977) with working capital surplus of $5,471,155 ( June 30, 2022 - $5,617,200).

The following table summarizes the Company’s liquidity position:

As at	September 30, 2022 $		June 30, 2022 $
Cash		3,864,461		931,977
Working capital		5,471,155		5,617,200
Total assets		9,827,628		9,194,537
Total liabilities		5,222,561		4,753,922
Shareholders’ equity		4,605,097		4,440,615

The Company’s cash is held in high liquid accounts. No amounts have been or are invested in asset-backed commercial paper.

The chart below highlights the Company’s cash flows:

For three months ended	September 30, 2022 $		September 30, 2021 $
Net cash provided by (used in)
Operating activities		2,589,661		2,124,426
Investing activities		-		(3,889	)
Financing activities		198,969		(678,389	)
Increase (decrease) in cash, cash equivalents, and restricted cash		2,932,483		1,396,980

Cash flow from operating activities

The Company generated cash of $2,589,661 from operating activities during the three months ended September 30, 2022, while the Company generated $2,124,426 cash during the same period ended September 30, 2021. The Company generated cash of $267,043 from the operational activities and generated $2,322,618 from the change of working capital during the three months ended September 30, 2022, while the Company used cash of $63,157 from the operating activities and generate $2,187,583 due to the change of working capital for the same period ended September 30, 2021.

Cash flow from financing activities

The Company generated cash of $198,969 from financing activities during the three months ended September 30, 2022, while the Company used $678,389 cash during the same period ended September 30, 2021. The cash generated in financing activities for the three months ended September 30, 2022 was mainly driven by the net proceeds of $825,000 received from debenture financing completed in October 2022, offset by the repayment of short-term loans of $583,756. The cash used in financing activities for the three months ended September 30, 2021 was solely resulted from the repayment of short-term loans of $678,389.

Cash flow from investing activities

The Company used cash of $nil in acquisition of plant, property and equipment during the three months ended September 30, 2022, while the Company used $3,889 in acquisition of plant, property and equipment during the same period ended September 30, 2021.

Capital Transactions

On April 8, 2022, the Company entered into a promissory note agreement with Energy Line Investment Ltd. (ELI) for a loan of $320,273 (USD 250,000) with an interest rate of 8% compounded annually. The principal of loan is unsecured and payable on a quarterly basis beginning July 8, 2023 with the amount of $40,034 (USD 31,250). The interest of loan is payable on a quarterly basis beginning July 8, 2022 of amount of $6,329 (USD 5,000). The full amount of $343,776 has been reclassified as current portion due to the Company fully repaid the Energy line Loan in the amount of $343,776 in principal and $13,146 in interest on October 6, 2022.

Capital Management

	September 30, 2022		June 30,2022
Long-term debt – non-current portion	$	910,370	$	1,230,643
Shareholders’ equity	$	4,605,097	$	4,440,615

There has not been any significant change in capital management from the prior year.

Capital Structure

Off-Balance Sheet Arrangements

The Company is not a party to any off-balance sheet arrangements or transactions.

Transactions Between Related Parties

As at September 30, 2022, included in trade and other receivable was $116,884 (June 30, 2022 - $121,704) due from Sustainable Investment Ltd., who has a director (Richard Lu) in common. The purpose was for short-term bridge funding to cover working capital and project development expenses.

As at September 30, 2022, included in trade and other receivable was $86,000 (June 30, 2022 - $86,000) due from Renewable Sun Energy Co-Op, who has a director (Richard Lu) in common, for the payment made to a vendor on behalf of Renewable Sun Energy Co-Op.

As at September 30, 2022, included in trade and other payable was $977,315 (June 30, 2022 - $Nil) due to Sustainable Investment Ltd., who has a director (Richard Lu) in common, for a collection of a receivable on behalf of Sustainable Investment Ltd. from a customer.

As at September 30, 2022, included in trade and other payable was $Nil (June 30, 2022 - $104,545) owing to officers and director for accrued salary and bonus payments.

As at September 30, 2022, included in loan payable was $Nil (June 30, 2022 - $567,664) shareholder loan advance from a shareholder. In 2021, the Company entered into a term loan agreement with a shareholder for a loan of $656,859 (USD$517,017) with a fixed interest rate of 10% for the first month and 1% for the remaining 11 months compound monthly. The Company fully repaid the loan 2022 plus interest of $5,677 (3-month period ended September 30, 2021 - $19,706) on September 16, 2022. The purpose of the loan was for short-term bridge funding to cover working capital and project development expenses.

Key management compensation

The remuneration of directors and other members of key management personnel, for the three months ended September 30, 2022 and 2021 were as follows:

		September 30, 2022				September 30, 2021
Short-term employee benefits		$	235,982			$	264,022

Short-term employee benefits include consulting fees.

Related party transactions are made without stated terms of repayment or interest. The balances with related parties are unsecured and due on demand.

Critical Accounting Estimates

●	Revenue recognition:

The Company recognizes revenue for project development services, engineering, procurement, and construction (EPC) services and operation and maintenance (OM) services.

At contract inception, the Company assesses services promised within each contract that falls under the scope of IFRS 15, to identify distinct performance obligations.

Project development services

OM services

EPC services

●	Inventory:

●

Taxes

●	Expected credit loss

●	Warranties

The Company generally provides a warranty period of one year for its services. Management applies estimates in establishing warranty provision on the basis of warranty terms in the sales contract and historical experience. For the three months ended September 30, 2022, $Nil warranty provision was recorded (2021 - $Nil).

●	Contract fulfilment costs

Judgement is applied by the Company when determining what costs qualify to be capitalised in particular when these costs are incremental and whether these are expected to be recoverable.

●	Utilization, derecognition and impairment of contract fulfilment costs:

The Company utilises contract fulfilment costs to cost of goods sold over the expected contract period using a systematic basis that mirrors the pattern in which the Company transfers control of the services to the customer.

A contract fulfilment costs is derecognised either when it is disposed of or when no further economic benefits are expected to flow from its use or disposal.

●	Contract fulfilment costs

Judgement is applied by the Company when determining what costs qualify to be capitalised in particular when these costs are incremental and whether these are expected to be recoverable.

●	Utilization, derecognition and impairment of contract fulfilment costs:

A contract fulfilment costs is derecognised either when it is disposed of or when no further economic benefits are expected to flow from its use or disposal.

Financial Instruments and Other Instruments (Management of Financial Risks)

Fair value

●	Level 1: Quoted prices in active markets for identical assets or liabilities.

●	Level 2: Inputs other than quoted prices that are observable for the asset or liability.

●	Level 3: Inputs for the asset or liability that are not based on observable market data.

Cash is carried at fair value using a Level 1 fair value measurement. The Company do not have Level 2 and Level 3 financial instrument.

Credit risk