UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
☒ Annual report underReport Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the fiscal year ended December 31 2021., 2023
or
☐ Transition report underReport Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (No fee required)
For the transition period from ______________ to ______________
to
.
Commission file number: 000-27407
SPINE INJURY SOLUTIONS, INC.BITECH TECHNOLOGIES CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
Delaware | ||
(State or Other Jurisdiction of | (I.R.S. Employer | |
| Incorporation or Organization) | Identification No.) | |
|
5151 Mitchelldale
895 Dove Street, Suite A2300
Houston, Texas 77092Newport Beach, CA92660
(Address of Principal Executive Offices)principal executive offices, Zip Code)
Telephone: (713) 521-4220(855)777-0888
(Issuer’s Telephone Number, Including Area Code)Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Exchange Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| None. |
Securities registered under Section 12(g) of the Exchange Act:
Common Stock ($0.001 Par Value)
(Title of Each Class)
Securities registered pursuant to Section 12(b) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” accelerated filer” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
Large accelerated filer ☐ | Accelerated filer ☐ |
Non-accelerated filer ☒ | Smaller reporting company ☒ |
Emerging growth company ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The aggregate market value of the registrant’svoting and non-voting common stock outstandingequity held by non-affiliates (computed at a price of $0.42 per share,computed by reference to the price at which the registrant’s common stockequity was last sold was approximately $5,840,601as of June 30, 2021, the last business day of the registrant’s most recently completed second fiscal quarter) was $4,899,333.quarter. For purposes of this computation, all officers, directors, and 10% beneficial owners of the registrant are deemed to be affiliates. Such determination should not be deemed to be an admission that such officers, directors, or 10% beneficial owners are, in fact, affiliates of the registrant.
At March 16, 2022,26, 2024, there were 20,240,882 [] shares of the registrant’s common stock outstanding (the only class of voting common stock).
DOCUMENTS INCORPORATED BY REFERENCE
None.None.
NOTE ABOUT FORWARD-LOOKING STATEMENTS
ThisThe information in this Annual Report on Form 10-K contains forward-looking statements and information within the meaning of Section 27A of the Private Securities Litigation Reform Act of 1995. These statements include, among other things, statements regarding plans, objectives, goals, strategies, future events or performance1933, as amended (the “Securities Act”), and underlying assumptions and other statements,Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which are other than statements of historical facts. Forward-looking statements may appear throughout this report, including without limitation,subject to the following sections: Item 1 “Business,” Item 1A “Risk Factors,” and Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Forward-looking statements generally can be identified“safe harbor” created by those sections. The words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,“may,” “predicts,“plans,” “projects,” “will, be,” “will continue,“should,” “will likely result,“could,” “predicts,” “potential,” “continue,” “would” and similar expressions. Theseexpressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions or expectations disclosed in the Company’s forward-looking statements and you should not place undue reliance on the Company’s forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that we make. The forward-looking statements are basedapplicable only as of the date on current expectationswhich they are made, and assumptions that are subjectwe do not assume any obligation to risks and uncertainties, which could cause our actual results to differ materially from those reflected in theupdate any forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussedAll forward-looking statements in this Annual Report on Form 10-K are made based on the Company’s current expectations, forecasts, estimates and assumptions, and involve risks, uncertainties and other factors that could cause results or events to differ materially from those expressed in particular, the forward-looking statements. In evaluating these statements, you should specifically consider various factors, uncertainties and risks discussed underthat could affect the caption “Risk Factors”Company’s future results or operations. These factors, uncertainties and risks may cause the Company’s actual results to differ materially from any forward-looking statement set forth in Item 1Athis Annual Report on Form 10-K. You should carefully consider these risk and those discusseduncertainties described and other information contained in other documentsthe reports we file with or furnish to the Securities and Exchange Commission (“SEC”(the “SEC”). Important factors that in our view could cause material adverse effects on our financial condition and results of operations include, but are not limited before making any investment decision with respect to risks associated with the company’s ability to obtain capital to begin funding medical procedures again, service demands and acceptance, our ability to expand, changes in healthcare practices, changes in technology, effects of the COVID-19 virus pandemic, pursuing a strategic business transaction with a third party company, economic conditions, the impact of competition and pricing, government regulation and approvals in the healthcare industry and other risks and uncertainties set forth below and in the “Risk Factors” section below. We undertake no obligation to revise or publicly release the results of any revision to anyCompany’s securities. All forward-looking statements except as requiredattributable to us or persons acting on the Company’s behalf are expressly qualified in their entirety by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.this cautionary statement.
As used herein, the “Company,” “we,” “our,” and similar terms include Spine Injury Solutions, Inc. and its subsidiaries and predecessors, unless the context indicates otherwise.
TABLE OF CONTENTS
Item 1. |
| 4 | |
Item 1A. |
| 12 | |
Item 1B. |
| 12 | |
Item |
| 12 | |
Item 2. | Properties | 13 | |
| Item 3. |
| 13 | |
Item 4. |
| 14 | |
Item 5. |
| 15 | |
Item 6. |
| 16 | |
Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
| 16 |
Item 7A. |
| 20 | |
Item 8. |
| 20 | |
Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial |
| 33 |
Item 9A. |
| 33 | |
Item 9B. |
| 35 | |
| Item 9C. | Disclosure | 35 | |
Item 10. |
| 35 | |
Item 11. |
| 39 | |
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
| 42 |
Item 13. | Certain Relationships and Related Transactions, and Director Independence |
| 43 |
Item 14. |
| 44 | |
Item 15. |
| 45 | |
Item 16. | 47 | ||
| 48 | ||
| 3 |
PART I
ITEM 1. BUSINESS
Spine Injury Solutions Inc.Bitech Technologies Corporation (the “Company”, “we” or “us”) was incorporated under the laws of Delaware on March 4, 1998. In connection with the Company’s planned expansion of its business following the completion of the acquisition of Bitech Mining Corporation, a Wyoming corporation (“Bitech Mining”), it filed a Certificate of Amendment to its Certificate of Incorporation, as amended (the “Certificate of Amendment”) with the Secretary of State of the State of Delaware on April 29, 2022 to change its corporate name to Bitech Technologies Corporation.
We changedhave refocused our namebusiness development plans as we seek to position ourselves as a global technology solution enabler dedicated to providing a suite of green energy solutions with plans to develop Battery Energy Storage System (BESS) projects, commercial and residential renewable energy solutions, enterprise utility services, public service engagements, and other renewable energy initiatives. We plan to pursue these innovative energy technologies through research and development, technology integration, planned acquisitions of other early stage green energy development projects and plans to become a grid-balancing operator using BESS solutions and applying new green technologies as a technology enabler in the green energy sector. Our team has identified two highly competitive battery energy storage suppliers who have expressed interest in establishing partnerships with us, as we seek to integrate their products into projects that we identify, including grid-balancing BESS projects we plan to pursue following the Business Combination with Bridgelink discussed below. In addition, we are seeking business partnerships with defensible technology innovators and renewable energy providers to facilitate investments, provide new market entries toward emerging-growth regions and implement innovative, scalable energy system solutions with technological focuses on smart grid, Home Energy Management System (HEMS), Building Energy Management System (BEMS ), City Energy Management System (CEMS), energy storage, and EV infrastructure.
In December 2023, we received an initial purchase order from Spine Paina strategic customer to implement a BEMS Virtual Power Plant (VPP) Program designed to save electricity for approximately 4,000 multi-dwelling units (MDUs). Our customer is working with PJM, a Regional Transmission Organization (RTO) that coordinates the movement of wholesale electricity in the District of Columbia in the U.S. and all or parts of 13 states including Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia. We believe that our BEMS solutions can benefit building owners who get paid by RTOs for energy saving bonuses, which is in alignment with federal reward programs initiated by the U.S. Department of Energy (DoE). Our real time BEMS solutions are being designed to reduce energy consumption and enhance personalized temperature control options and comfort levels for tenants living in these MDUs.
We are also developing a suite of services and bundled products we call the Bitech Smart Energy Technology Solutions. Our planned solutions are expected to integrate a variety of Energy Management Inc.Systems (X-EMS) that allow for efficient management of energy usage, Energy Storage Systems (ESS) for storing excess energy and Smart Power Systems (SPS) that regulate the flow of energy in homes and commercial buildings. We also offer Power Control Conversion solutions that are designed to optimize the utilization of renewable energy sources. With our planned portfolio of integrated solutions, we believe that individuals and businesses will be capable of reducing their carbon footprint while also enjoying significant cost savings on their energy bills.
The table below represents our planned portfolio of smart energy solutions:
| 4 |
With combined experience in the power industry ranging from EMS, energy storage, Industrial IoT and system integration, we plan to leverage this expertise to develop a three-pronged Green Energy Technology Enabler Business model to effectively cater to the rapidly growing demand for sustainable energy solutions. As depicted in the diagram below, our model encompasses key stages of the energy production process - from generation to distribution and consumption. We offer comprehensive technology solutions such as advanced energy management systems, efficient energy storage options, IoT applications for smart grid monitoring, and system integration services. By integrating these elements, we strive to empower individuals, businesses, and communities to embrace cleaner and more sustainable approaches towards energy usage. Our technology solutions model includes:
| ● | Innovative renewable energy options for households, apartment complexes, architectural structures, and educational institutions, as well as various implementations suited for urban areas and local communities. | |
| ● | A range of utility services, including Virtual Power Plants (VPP) and intelligent Electric Vehicle (EV) system solutions. | |
| ● | Conducting public service engagements for Independent Service Organizations (ISOs), Investor-Owned Utilities (IOUs), and other government entities at the municipal, county, and state level. |
We plan to execute a “Dual Growth Business Model” as depicted in the diagram below encompassing (1) revenue growth in Technology Enabler Solutions which include in-house technology innovation implementing system integration approach enhanced with our plans to carry out technology merger and acquisitions for specific green energy applications, and (2) revenue growth by executing planned BESS operations following our planned Business Combination with Bridgelink discussed below, additional potential joint ventures and/or partnerships with operating partners to collect operating and joint venture revenues from BESS operations.
| 5 |
Dual Growth Business Model
We use cutting-edge BESS solutions that allow us to store excess energy in batteries during off-peak hours when it is inexpensive and dispatch it during peak hours when prices are highest. This not only benefits the power generation companies by boosting their bottom line but also has a significant impact on reducing carbon emissions.
BESS Market Overview
| ● | Battery Energy Storage System (“BESS”) is a cost-effective system of battery storage using one or more batteries to store energy generated by wind or solar farms. | |
| ● | Prior to the 2022 Inflation Reduction Act (“IRA”), BESS was required to be co-located to be eligible for Investment Tax Credits (“ITC”); post-IRA, stand-alone BESS projects are also eligible for ITC of up to 50%. | |
| ● | Better cycling capacity enables enhanced capture of ancillary services revenues without warranty cycle life degradation. | |
| ● | Lower capacities simplify the interconnection process with several ISOs, especially ERCOT (Texas) | |
| ● | The Battery Storage Systems market is projected to grow at a 24% CAGR from 2022 to 2032P. |
We offer 1.965 GW (gigawatts) pipeline of 23 Battery Energy Storage System (BESS) projects in several U.S. geographical locations as summarized below:
As described in our Dual Growth Business Model, we aim to grow by strategically acquiring intellectual property (IP) assets. Through a planned portfolio of acquisitions and targeted acquisition strategies, we plan to execute our “Smart Acquisition Model” as illustrated in the diagram below. The key element of this model is identifying and acquiring defensible technologies accompanied by visionary management teams who share a common goal with us. We believe this approach will enable us to unlock the potential within these companies through capital infusion and accelerate their growth. Our ultimate goal is to incubate these acquired companies and eventually spinning them off, merging them with larger companies or forming global joint ventures, while also facilitating market entry into one of today’s fastest growing region, that being Southeast Asia. With this acquisition model, we anticipate building a technology portfolio consisting of various green energy technologies. To achieve this goal, we will leverage our network of capital partners, tap into lower-cost manufacturing capabilities, and seek out technical talents from specialized sources abroad.
| 6 |
In light of these practical initiatives and other reasons noted below, we have, however, elected to discontinue our efforts to commercialize the electric power generation and charging system (the “Tesdison Technology”) we formerly licensed from SuperGreen Energy Corporation (“SuperGreen”) pursuant to the Patent & Technology Exclusive and Non-Exclusive License Agreement dated January 15, 2021, as amended, entered into between SuperGreen and the Company’s wholly owned subsidiary Bitech Mining Corporation (“Bitech Mining”) (the “SuperGreen License”). We have determined that the Tesdison Technology was not functional nor was it capable of being developed into a commercially viable product as had been represented to the Company by SuperGreen, its founder Calvin Cao, and his brother Michael Cao, leading up to Bitech Mining entering into the SuperGreen License. In addition, we paused the further development of Intellisys-8, our planned chipset and related software due to the unfavorable market conditions within the cryptocurrency market in 2023.
In addition, our business expansion plans will require a significant amount of additional capital. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources” and involve a significant number of future business, financial, operational and regulatory risks. See “Note About Forward-Looking Statements.”
Recent Transactions
As previously disclosed in the Company’s Current Report on Form 8-K filed with the SEC on January 12, 2024, on January 8, 2024, the Company, Bridgelink Development, LLC, a Delaware limited liability company (“Bridgelink”), a solar and energy storage development company based in Fort Worth, Texas and C & C Johnson Holdings LLC, the sole member of Bridgelink (the “Member”) entered into a Letter Agreement (the “Letter Agreement”) for a business combination (the “Business Combination”). Pursuant to the Letter Agreement, the Company plans to acquire from the Member all of the issued and outstanding membership interests of an entity to be formed by Bridgelink (the “Target”) in exchange for 222,222,000 restricted shares of the Company’s Common Stock (the “Exchange Shares”). Prior to closing of the transaction (the “Closing” or “Closing Date”), Bridgelink will transfer to Target Bridgelink’s assets and development service agreements (collectively, “Development Projects”) consisting of: (1) certain rights to fully develop a portfolio of renewable energy development assets, which includes certain battery energy storage system (“BESS”) projects with a cumulative storage capacity of at least 1.965 gigawatts (GW) located in the United States and along with certain term sheets and agreements with capital providers, whether or not finalized (collectively, the “BESS Development Projects”) and (2) certain rights to fully develop a portfolio of renewable energy development assets, which includes certain solar development projects with a cumulative output of at least 3.840 gigawatts (GW) located in the United States, along with certain term sheets and agreements with capital providers that Bridgelink has negotiated, whether or not finalized (collectively, the “Solar Development Projects”). In addition, on the Closing Date, Bridgelink will enter into an agreement with BTTC whereby Bridgelink will agree to refer to the Company any future projects involving BESS that Bridgelink is presented with an opportunity to work on.
Capital Investment into the Company. No later than the Closing Date, the Company shall have received a commitment for a capital investment or other financing transaction of not less than $50,000,000 (the “Capital Infusion”). The transaction to obtain the Capital Infusion may involve the Company’s sale and issuance of its equity, debt, lease or combination thereof on terms and conditions mutually agreeable by the Parties. The Capital Infusion shall be used for the business operations of the Company, including, but not limited to, the pursuit, execution, and/or implementation of the Development Projects, as well as the ongoing technology innovations, identification, pursuit, and/or acquisition of emerging technologies and/or companies owning or operating such technologies involving BESS, Solar, EMS, EV charging storage, micro grids, and/or other such “clean technologies”.
Project Management Services. At or prior to the Closing, the Company agreed to enter into a Project Management Services Agreement (the “PMSA”) with a Special Purpose Vehicle (“SPV”) established by Cole W. Johnson. Pursuant to the terms of the PMSA, the SPV will be obligated to oversee all aspects of the development and operation of the BESS Development Projects on such terms and conditions as the Parties mutually agree to. The PMSA will provide that the Company shall pay the SPV the following:
● BESS Development Projects. An aggregate amount equal to $0.035 per Watt (“W”) for each BESS Development Project payable as follows: (i) $0.005 per W will be paid in cash upon the Company’s listing of its Common Stock on the NASDAQ stock market and the closing of a financing transaction of a BESS Development Project (“Project Financing”); and (ii) $0.03 per W will be paid in cash upon attainment of Ready to Build (“RTB”) status per each BESS Development Project with the closing of Project Financing related to such project to enable the Company to commence construction of said BESS Development Project (collectively (i) and (ii), the (“BESS Development Fees”).
| 7 |
● Unique Solar Development Projects. $0.01 per W in cash upon attainment of RTB status per each development project, paid within ten (10) days of Company being paid, to enable the Company to commence construction of said Development Project; and
● Other Development Projects. Within ten (10) days of Company being paid, the higher of either (a) 50% of the gross margin or (b) $0.02 per W in cash upon attainment of RTB status or project acceptance per each development project (“Other Development Fees”); and
● Solar Development Projects. If the Solar Development Projects are developed by the Company, an aggregate amount equal to $0.035 per Watt (W) for each Solar Development Project payable as follows: (i) $0.005 per W will be paid in cash upon the Company’s listing of its Common Stock on the NASDAQ stock market and the closing of a financing transaction of a BESS Development Project (“Project Financing”); and (ii) $0.03 per W will be paid in cash upon attainment of Ready to Build (“RTB”) status per each Solar Development Project with the closing of Project Financing related to such project to enable the Company to commence construction of said Solar Development Project (collectively (i) and (ii), the (“Solar Development Fees”).
● Fee Payments. Payment of the BESS Development Fees, Development Fees, Other Development Fees, Unique Solar Development Fees, and Solar Development Fees (collectively, “Project Development Fees”) will further be contingent upon: (i) The successful achievement of RTB status, as such term will be defined in the PMSA, and will be made in accordance with the terms specified in the PMSA.
The fees due under these agreements will be payable within 10 days of achieving the milestones set forth above; and (ii) Cole W. Johnson remains (i) an employee or consultant to the SPV; and/or (ii) head of the BESS and Solar Division (as defined below) during the period of time in which the Project Development Fees are payable.
Post Business Combination Structure. Upon consummation of the Business Combination, the Company shall consist of two (2) divisions or operational units: (1) a division that will pursue, execute, and/or implement the Development Projects (the “BESS and Solar Division”); and (2) a division that will pursue the technology solutions and acquisition business (the “Technology Solutions and Acquisition Division”). The BESS and Solar Division generally will be managed and operated by the current Bridgelink management team, but with meaningful participation by at least one member of the current the Company management team. The Technology Solutions and Acquisition Division generally will be managed and operated by the current the Company management team, but with meaningful participation by at least one member of the current Bridgelink management team. The “C- level” officer positions in the combined company resulting from the Business Combination generally will be shared by members of the current respective the Company and Bridgelink management teams.
Appointment of Members of the Board of Directors and Officers
| ● | Board Seats: At the time of Closing, Bridgelink will have the right to designate two out of the five members of the Company’s board of directors (the “Board”) (the “Bridgelink Nominees”) and the Company will have the right to designate two out of the five members of the Board (the “Company Nominees”). The Bridgelink Nominees and the Company Nominees shall collectively select a fifth designee to the Board who must be “independent” (as defined in federal securities laws and the Nasdaq Listing Rules) at such time as required either by the OTC Markets or Nasdaq). the Company shall support the Bridgelink Nominees in their election to the Board and Bridgelink shall support the Company Nominees in their election to the Board. | |
| ● | Board Meetings: The Parties shall cooperate in scheduling regular meetings of the Board meetings and ensuring that Bridgelink’s Nominees to the Board are actively involved in strategic decisions and corporate governance. | |
| ● | Employment Arrangements: Bridgelink’s executive management team and key employees shall transition to become employees of the BESS and Solar Division of the Company upon the Closing. Cole Johnson as the President of the BESS and Solar Division will have sole authority to determine which employees shall transition, salaries, and effectuate an incentive plan. | |
| ● | Chairman of the Board Role: Benjamin Tran shall assume the position of Executive Chairman of the Company’s Board and interim Chief Executive Officer (CEO) and shall take the lead in all technology development as well as merger and acquisition (M&A) activities, and capital market activities including capital raise, aimed at expanding the company’s market presence and global influence. |
| 8 |
| ● | President Role: Cole Johnson will be appointed as the President of the Company, with responsibilities for the project management and operations of the BESS and Solar Division. | |
| ● | Future CEO Role: If necessary, the Board shall appoint a new Chief Executive Officer (CEO) of the Company within twelve (12) months of the Closing, with responsibilities for the overall management and operations of the Company, and shall replace Benjamin Tran in his interim CEO role, provided that the Parties acknowledge and agree that it is not required that Benjamin Tran shall resign from the CEO position. | |
| ● | Executive Stock Option Compensation Package: Company shall grant Benjamin Tran the option to purchase 20,000,000 shares of stock to be vested equally over 5 years at an exercise price of $0.50 in year 1, $0.75 in year 2, $1.00 in year 3, $1.25 in year 4, and $1.5 in year 5, with the option to expire in 10 years. Company shall grant Cole Johnson the option to purchase 68,000,000 shares of stock to be vested equally over 5 years at an exercise price of $0.50 in year 1, $0.75 in year 2, $1.00 in year 3, $1.25 in year 4, and $1.5 in year 5, with the option to expire in 10 years. |
Due Diligence. Each of the Parties covenants with the other Parties that during the period commencing on the Effective Date and for a period of 45 days thereafter (the “Due Diligence Period”), each Party shall use commercially reasonable efforts to promptly provide the other Party or its respective advisors and counsel with any information in its possession or control relating to it and its subsidiaries, subject to confidentiality obligations, attorney client privilege and applicable laws, so that the other Party may complete its due diligence investigations in connection with the Business Combination, including the BESS Development Projects (the “Due Diligence Materials”).
Definitive Agreement. The Parties shall use commercially reasonable efforts to enter into a definitive agreement pursuant to which the Business Combination would be consummated (the “Definitive Agreement”) within 30 days after completion of the Due Diligence Period (the “Exclusivity Period”). The Parties agree that the Definitive Agreement shall (i) be consistent with the terms and conditions the Letter Agreement, including the subject matter of the representations and warranties and covenants contained herein. The Definitive Agreement will provide for a closing no later 30 days after the execution of the Definitive Agreement, subject to the completion of all conditions to close as provided for in the Definitive Agreement (the “Closing” with the date of Closing, the “Closing Date”).
Representations and Warranties. The Definitive Agreement to be executed by the Parties and Member shall contain customary and usual representations and warranties, certified by the principal executive officer of each of the Parties.
Further Terms. The Company shall cause each of its officers and directors to do all such further acts as will be required to permit the Company to file any required documents (including 10- Ks, 10-Qs, 8-Ks, federal and state tax returns, or otherwise) to be filed at or following the Closing which reflect the business and operations of Target prior to the Closing Date and through the year ending December 31, 2023, and shall execute and deliver all certifications, if any, required to be filed by the Company with respect to financial statements of Target reflecting in whole or in part the business and operations of Target prior to the Closing Date.
On the Closing Date, the Company shall enter into the PMSA which will provide for the other terms stated in the Letter Agreement, among other things, that Bridgelink’s Chief Executive Officer will (i) agree to operate the Development Projects with a title as President of the Company and will agree manage a selected number of core employees from Bridgelink to be transferred to the Company and its new employees, and (ii) indemnify and defend the Company as a result of any liabilities related to the operation of the BESS and Solar Division or breach of the SPV’s obligations under the PMSA.
Conditions Precedent. In addition to the foregoing terms, the Definitive Agreement will contain the following conditions precedent to Closing:
| ● | the documents to be entered into in connection with the Business Combination will be mutually acceptable in form and substance to the Parties, acting reasonably, and will be consistent with the terms in the Letter Agreement; |
| 9 |
| ● | all governmental, regulatory, third person and other approvals, consents, waivers, orders, exemptions, agreements and all amendments and modifications to agreements, indentures and arrangements which the Parties shall consider necessary in order to enter into the Definitive Agreement and not otherwise specifically described in the Letter Agreement shall have been obtained in form satisfactory to the Parties, acting reasonably; | |
| ● | As of the Closing Date Target shall have no liens of encumbrances on BESS Development Projects; | |
| ● | Target shall have completed the audit of its financial statements for the periods required pursuant to Items 9.01(a) and (b) of Form 8-K (the “Target Audit”), which will be performed by an accounting firm that is registered with the Public Company Accounting Oversight Board (PCAOB) at the election and expense of the Company; | |
| ● | If the Closing occurs after April 14, 2024, Target shall have completed and provided to the Company, Target’s unaudited financial statements for the period ended March 31, 2023 as provided for in Items 9.01(a) and (b) of Form 8-K, which fairly present the financial condition of Target as of their respective dates and for the periods involved, and such statements will be prepared in accordance with generally accepted accounting principles consistently applied for the periods provided for in Items 9.01(a) and (b) of Form 8-K; | |
| ● | The Board of Directors of the Company shall have approved the Definitive Agreement in accordance with its obligations under the Delaware General Corporation Law; | |
| ● | At the Closing Date, the Company will be current on all of its filings with the OTC Markets Group, Inc. OTCQB tier (the “OTC Markets”), including, but not limited to the filing of an Annual Report for the period ended December 31, 2023 and the annual Attorney Letter for the period ended December 31, 2023, none of which filings shall contain a material misstatement or omission, and be compliant in all material respects with the OTC Markets rules and regulations; | |
| ● | At the Closing Date, all reports, schedules, forms, statements, and other documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two (2) years preceding the Closing Date (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC Reports”) shall have been filed on a timely basis or the Company shall have received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension; | |
| ● | The Parties shall have performed, in all material respects, all of their obligations under the Definitive Agreement. All of the statements, representations, and warranties contained in the Definitive Agreement will be complete and true in all material respects; | |
| ● | No material adverse changes shall have occurred in the business, properties, and assets of Target including the Development Projects; | |
| ● | Target and the Company shall have filed all required franchise tax reports and federal income tax returns for the period ended December 31, 2023; | |
| ● | The Common Stock will be a participant in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer Program DTC eligible; | |
| ● | The Common Stock will be quoted on the OTCQB tier of the OTC Markets and there shall have been no notice of delisting or threat thereof with respect to the Company Common Stock. the Company shall have paid all applicable OTC Market fees; and | |
| ● | Bridgelink shall have entered into one or more Supply Agreements that provide for the supply of batteries with a total capacity of at least 250 megawatts (MW) and 1000 megawatt-hours. |
Nasdaq Uplisting. Following the Closing, the Company commits to take all commercially reasonable steps necessary to uplist the Company to the NASDAQ stock exchange to enhance the Company’s visibility and access to a broader investor base (the “Nasdaq Uplisting”). This effort will be pursued promptly and diligently.
| 10 |
No Shop. During the Exclusivity Period, unless the Company provides notice of its cancellation of the Letter Agreement as provided for in Section 12(c), neither Bridgelink, Target, nor Member will, directly or indirectly, through any representative or otherwise (a) engage in any third-party negotiations for any Extraordinary Transaction (as defined below); (b) enter into any agreement or understanding with any person other than each other with respect to any Extraordinary Transaction; (c) participate or engage in any discussions or negotiations with any person other than each other relating to any of the foregoing (whether or not initiated by Bridgelink, Target, Member or any representative); or (d) provide any material non-public information regarding the Company or any of the Company’s securities to any person other than the Target or the Member in connection with any of the foregoing. If Bridgelink, Target, or Member receives any inquiry or proposal regarding the possibility of an Extraordinary Transaction, or regarding any of the matters described in clauses (b) through (d), immediately above, it shall promptly notify the Company thereof in writing and will provide the Company with such information regarding such inquiry or proposal and the person(s) or entity(ies) making the same as the Company shall reasonably request. “Extraordinary Transaction” means any investment in, acquisition of, business combination with, or other extraordinary transaction regarding the Member’s ownership interest in the Target or the Target or any direct or indirect parent, subsidiary, or division thereof, including, without limitation, any merger, purchase, or sale of securities or purchase or sale of assets outside the ordinary course of business involving the Target or the Member’s ownership interest in the Target.
Termination. The Letter Agreement will terminate automatically and be of no further force and effect upon the earliest of (a) execution of the Definitive Agreement by the Parties, (b) mutual agreement of the Company, Bridgelink and the Member to terminate the Letter Agreement, (c) at the election of the Company during the Due Diligence Period for a commercially reasonable reason, or (d) 5:00 p.m. (Pacific time) on the last day of the Exclusivity Period.
Recent History of the Company
Acquisition of Bitech Mining Corporation
The Company acquired Bitech Mining Corporation (“Bitech Mining”) on March 31, 2022 (the “Closing Date”) through a share exchange pursuant to a Share Exchange Agreement (the “Share Exchange Agreement”) by and among the Company, Bitech Mining, each of Bitech Mining’s shareholders (each, a “Seller” and collectively, the “Sellers”), and Benjamin Tran, solely in his capacity as Sellers’ Representative (“Sellers’ Representative”). The transaction contemplated by the Share Exchange Agreement is hereinafter referred to as the “Share Exchange”). The Share Exchange Agreement provides that the Company will acquire from the Sellers, an aggregate of 94,312,250 shares of Bitech Mining’s Common Stock, par value $0.001 per share, representing 100% of the issued and outstanding shares of Bitech Mining (collectively, the “Bitech Mining Shares”). In consideration of the Bitech Mining Shares, the Company issued to the Sellers an aggregate of 9,000,000 shares of the Company’s newly authorized Series A Convertible Preferred Stock, par value $0.001 per share (the “Series A Preferred Stock”). Each Bitech Mining Share shall be entitled to receive 0.09543 shares of Series A Preferred Stock. Each share of Series A Preferred Stock shall automatically convert into 53.975685 shares (an aggregate of approximately 485,781,300) of the Company’s Common Stock (the “Company Common Stock”) upon filing of an amendment to its Certificate of Incorporation increasing the number of the Company’s authorized common stock so that there are a sufficient number of shares of Company Common Stock authorized but unissued to permit a full conversion of all the Series A Preferred Stock. Effective as of June 27, 2022, the Series A Preferred Stock automatically converted into 485,781,168 shares of Company Common Stock following the June 27, 2022 filing of an amendment to its Certificate of Incorporation increasing the number of the Company’s authorized common stock to 1,000,000,000 shares. Upon conversion of the Series A Preferred Stock, the Sellers held, in the aggregate, approximately 96% of the issued and outstanding shares of Company capital stock on a fully diluted basis.
The Share Exchange was treated as a recapitalization and reverse acquisition for financial reporting purposes, and Bitech Mining is considered the acquirer for accounting purposes. As a result of the Share Exchange and the change in our business and operations, a discussion of the past financial results of our predecessor, Spine Injury Solutions Inc. on October 1, 2015.
We are actively pursuing a merger or similar transaction with a private company where it becomes, is not pertinent, and under applicable accounting principles, the controlling company. We find this to behistorical financial results of Bitech Mining, the best course of action for our stockholders. Further, we have been in negotiations with a certain third-party candidate since December 2021. We are presently negotiating terms of a proposed share exchange agreement with the candidate, under which its shareholders would exchange their shares for shares of our stock. Although we do not presently have a binding agreement with this company or its shareholders, it is possible that a definitive agreement for the proposed transaction could be agreed to and consummated in the imminent future. There is no assurance that such transaction will be completed, or if completed, that the terms will be favorable to us.
From 2009 to 2018, we operated as a technology, marketing, billing, and collection company facilitating diagnostic services for patients who have sustained spine injuries resulting from traumatic accidents. We delivered turnkey solutions to spine surgeons, orthopedic surgeons and other healthcare providers for necessary and appropriate treatment of musculo-skeletal spine injuries resulting from automobile and work-related accidents. Through our affiliate system, we facilitated spine surgeons, orthopedic surgeons and other healthcare providers to provide reasonable, necessary, and appropriate treatments to patients with musculo-skeletal spine injuries. We assisted the centers that provide the spine diagnostic injections and treatment and paid the doctors a fee for the medical procedures they performed. After a patient was billed for the procedures performed by the affiliated doctor, we took control of the patients’ unpaid bill and oversee collection. In most instances, the patient was a plaintiff in an accident case, where the patient was represented by an attorney. Typically, the defendant (and/or the insurance company of the defendant) in the accident case would pay the patient’s bill upon settlement or final judgment of the accident case. The payment to us was made through the attorney of the patient. In most cases, it was required that we agreeaccounting acquirer, prior to the settlement price and the patient must sign off on the settlement. Once we were paid, the patient’s attorney would receive payment for his or her legal fee.
During the fourth quarter of 2018, the decision was made to discontinueShare Exchange are considered our involvement in future medical procedures due to our cash position, and we have not been involved in any procedures since then, including in 2021 or 2020. Presently, we continue to have no plans to do so in the future. However, we continue to actively pursue the collectionhistorical financial results.
Disposition of previously funded procedures. Without additional funding, there is no guarantee that we can continue as a going concern.
We own a device and process by which a video recording system known as the Quad Video Halo (“QVH”Assets
On June 30, 2022 (the “Effective Date”) is used to record medical procedures. The QVH system can simultaneously capture views and machine images, thus providing a record of internal and external views of a recorded procedure. The QVH system has been refined and improved over, we completed the years. The first- and second-generation systems required post-procedure file transfers, synchronizing and editing. This involved considerable software and time for a videographer to produce a complete video. The latest generationsale of the QVH referred to as NextGen 2.0 completely eliminates all of the issues associated with prior QVH approaches. The new varifocal lens cameras allow ceiling placement which eliminates the impact of room clutter and fluoroscope movement. The system server automatically synchronizes and renders the final videos, thus eliminating all backend processing.
We lease QVH units to customers who pay us monthly lease payments. Presently, the majorityassets of our total revenues are derived from these lease payments. Our wholly-ownedwholly owned subsidiary Quad Video Halo, Inc. holds(“Quad Video”) pursuant to the terms of an Asset Purchase Agreement entered into among Quad Video, Quad Video Holdings Corporation (“Quad Holdings”) and Peter Dalrymple, a former officer, director and substantial shareholder of the Company (“Dalrymple,” together with Quad Holdings, collectively, the “Buyers”) dated as of the Effective Date (the “Quad Video APA”). Pursuant to the terms of the Quad Video APA, Quad Video sold all of its assets to Quad Holdings which included its accounts receivables, fixed assets, intangible assets and all customer lists associated with Quad Video’s business (the “Quad Video Assets”).
| 11 |
Under the terms of the Quad Video APA, the amount of the consideration paid to the Company for purchase of the Quad Video Assets was Mr. Dalrymple’s cancellation of a promissory note with an approximate principal balance of $8,789 plus accrued interest as of the Effective Date issued by the Company to Mr. Dalrymple and the cancellation of a security agreement securing payment of that note pursuant to a Secured Promissory Note and Security Agreement Cancellation Agreement and assumed all liabilities related the Quad Video’s operations and the Quad Video Assets and terminated the Management Services Agreement entered into among the Company, Quad Video and Dalrymple dated March 31, 2022 pursuant to a Management Services Termination Agreement.
In addition, on the Effective Date, we completed the sale of certain accounts receivables related to our spine pain management business pursuant to the terms of an Asset Purchase Agreement entered into among the Company, SPIN Collections LLC, a company assets affiliatedowned or controlled by Dalrymple and Dalrymple (the “SPIN Accounts Receivable APA”). The consideration received by the Company in connection with the QVH units.
BillingSPIN Accounts Receivable APA was $10.00 and Operationsother good and valuable consideration that was nominal and immaterial.
From 2009Prior to 2018,March 31, 2022, we worked with independentwere engaged in the business of owning, developing and leasing the Quad Video Halo video recording system (“QVH”) used to record medical contractors who would performprocedures including the medical services for patients and bill a fixed fee for the services. We funded certaincollection of accounts receivables related to previously provided spine injury diagnostic centers whereservices (collectively, the “QVH Business”). On June 30, 2022, we work with healthcare providerssold the assets related to the QVH Business.
Effective as independent contractors to perform medical services for patients (however,of June 27, 2022, we discontinuedissued an aggregate of 485,781,168 shares (the “Conversion Shares”) of our involvement in future medical procedures duringcommon stock upon the fourth quarterconversion of 2018—see above)9,000,000 shares of our Series A Convertible Preferred Stock, $0.001 par value per share (the “Series A Preferred”). We paid the healthcare providers for medical services performed. The patients were billed based on Current Procedural Terminology (“CPT”) codes for the medical procedure performed. CPT codes are numbers assigned to every task and service a medical practitioner may provide to a patient including medical, surgical and diagnostic services. CPT codes are developed, maintained and copyrighted by the American Medical Association. Patients were billed at the normal billing amount, based on national averages, for a particular CPT code procedure. We would take controlshares of the patients’ unpaid bills.
Series A Preferred were issued to the former shareholders of Bitech Mining on March 31, 2022 in exchange for their shares in Bitech Mining representing 100% of the issued and outstanding shares of Bitech Mining. The clinic facilities whereSeries A Preferred automatically converted into our spine injury diagnostic centers operated were ownedcommon stock upon our filing of a Certificate of Amendment to our Certificate of Incorporation, as amended on June 27, 2022.
Employees
As of December 31, 2023, the Company currently employed a total of 8 individuals in executive or leasedmanagerial positions. This includes two full-time employees and six contracted consultants who bring their expertise and experience to our team. To date, we have not experienced any work stoppages and we consider our relationship with our employees to be good. None of our employees are either represented by a medical affiliatelabor union or third party. We had no ownership interest in these clinic facilities, nor did we have any responsibilities towards building or operating the clinic facilities.
Governmental Regulation
All of the medical diagnostic procedures offered at the clinics were performed by independent medical contractors, who were subject to regulation by a number of governmental entities at the federal, state, and local levels. We were and are subject to laws and regulations relating to business corporations in general.
HIPAA Administrative Simplification Provisions—Patient Privacy and Security
The Health Insurance Portability and Accountability Act of 1996, commonly known as “HIPAA,” requires the adoption of standards for the exchange of health information in an effort to encourage overall administrative simplification and to enhance the effectiveness and efficiency of the healthcare industry. Pursuant to HIPAA, the Secretary of the Department of Health and Human Services has issued final rules concerning the privacy and security of health information, the establishment of standard transactions and code sets, and the adoption of a unique employer identifier and a national provider identifier. Noncompliance with the administrative simplification provisions can result in civil monetary penalties up to $100 per violation as well as criminal penalties that include fines and imprisonment. The Department of Health and Human Services Office of Civil Rights is charged with implementing and enforcing the privacy standards, while the Centers for Medicare and Medicaid Services are responsible for implementing and enforcing the security standards, the transactions and code sets standards, and the other HIPAA administrative simplification provisions.collective bargaining agreement.
The HIPAA requirements only apply to “covered entities,” such as health plans, healthcare clearinghouses, and healthcare providers, which transmit any health information in electronic form. Our business is likely considered a “covered entity” under HIPAA.
Of the HIPAA requirements, the privacy standards and the security standards have the most significant impact on our business operations. The privacy standards require covered entities to implement certain procedures to govern the use and disclosure of protected health information and to safeguard such information from inappropriate access, use, or disclosure. Protected health information includes individually identifiable health information, such as an individual’s medical records, transmitted or maintained in any format, including paper and electronic records. The privacy standards establish the different levels of individual permission that are required before a covered entity may use or disclose an individual’s protected health information and establish new rights for the individual with respect to his or her protected health information.
The final security rule establishes security standards that apply to covered entities. The security standards are designed to protect health information against reasonably anticipated threats or hazards to the security or integrity of the information, and to protect the information against unauthorized use or disclosure. The security standards establish a national standard for protecting the security and integrity of medical records when they are kept in electronic form.
The administrative simplification provisions of HIPAA require the use of uniform electronic data transmission standards for healthcare claims and payment transactions submitted or received electronically. We believe that we are in substantial compliance with the transaction and code set standards. The transaction standards require us to use standard code sets when we transmit health information in connection with certain transactions, including health claims, health payments and remittance advices.
In addition, the Secretary of the Department of Health and Human Services issued a final rule that requires each healthcare provider to adopt a standard unique health identifier, the National Provider Identifier (“NPI”). The NPI will identify healthcare providers in the electronic transactions for which the Secretary has already adopted standards (the “standard transactions”). These transactions include claims, eligibility inquiries and responses, claim status inquiries and responses, referrals, and remittance advices. All health plans and all healthcare clearinghouses must accept and use NPIs in standard transactions.
Other Privacy and Confidentiality Laws
In addition to the HIPAA requirements described above, numerous other state and federal laws regulate the privacy of an individual’s health information. These laws specify how an individual’s health information may be used internally, the persons to whom health information may be disclosed, and the conditions under which such uses and disclosures may occur. Many states have requirements relating to an individual’s right to access his or her own medical records, as well as requirements relating to the use and content of consent or authorization forms. Also, because of employers’ economic interests in paying medical bills for injured employees and in the timing of the injured employees’ return to work, many states have enacted special confidentiality laws relating to disclosures of medical information in workers’ compensation claims. These laws limit employer access to such information. Many states have also passed laws that regulate the notification process to individuals when a security breach involving an individual’s personally identifiable information, such as social security number or date of birth, occurs. To the extent that state law affords greater protection of an individual’s health information than that provided under HIPAA, the state law will control.
We anticipate that there will be more regulation in the areas of privacy and confidentiality, particularly with respect to medical information. We regularly monitor the privacy and confidentiality requirements that relate to our business, and we anticipate that we may have to modify our operating practices and procedures in order to comply with these requirements.
Competition
Presently, the majority of our total revenues are derived from leasing QVH units. Although we believe the QVH system is unique in the healthcare industry, there may be low barriers to entry in this market, and the addition of new competitors may occur relatively quickly. If competition within our industry intensifies, our ability to maintain or increase our revenue growth, price flexibility and control over medical costs, trends, and marketing expenses, may be compromised.
Employees
We currently have one paid part-time employee (our CFO, John Bergeron), plus one collection consultant and one QVH consultant at our corporate headquarters. We do not presently pay our President and CEO, William Donovan, M.D., any compensation. We expect to continue to use independent contractors, consultants, attorneys and accountants as necessary, to complement services rendered by our employees.
ITEM 1A. RISK FACTORS
Our future operating results are highly uncertain. Before deciding to invest in us or to maintain or increase your investment, you should carefully consider the risks described below, in addition to the other information contained in this annual report. If any of these risks actually occur, our business, financial condition or results of operations could be seriously harmed. In that event, the market price for our common stock could decline and you may lose all or part of your investment.
Risks Related to Our Company
We have discontinued our involvement in future medical procedures due to our cash position
During the fourth quarter of 2018, the decision was made to discontinue our involvement in future medical procedures due to our cash position, which also hampers our ability to pay back existing debt to Peter Dalrymple, a director and shareholder (see Note 6—Notes Payable). We have not funded any procedures in 2021 and have no plans to do so in the future. The service revenue we previously earned has resulted in longer settlement times, which has created a slowdown in cash collections. Additionally, our efforts to establish a market for the Quad Video Halo has not met our expectations and we have cut back its development and operations. If we are unable to access additional capital in the near future, these recent developments could have a material negative impact on our financial performance and could have a material adverse effect on our results of operations and financial condition.
Management has determined that certain factors raise substantial doubt about our ability to continue as a going concern, and our continued existence is dependent upon our ability to successfully execute our business plan.
The financial statements included with this report are presented under the assumption that we will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business over a reasonable length of time. Management has determined that certain factors raise substantial doubt about our ability to continue as a going concern, including our net loss of $140,365 for the year ended December 31, 2021 and our accumulated deficit of $20,278,547 at year-end. We are not generating sufficient operating cash flows to support continuing operations. Our ability to continue as a going concern is dependent upon our ability to successfully execute our business plan, obtain additional financing and achieve a level of cash flows from operations adequate to support our cost structure. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
We are dependent on key personnel.
We depend to a large extent on the services of certain key management personnel, including our executive officers and other key consultants, the loss of any of which could have a material adverse effect on our operations.
We may experience potential fluctuations in results of operations.
Our future revenues may be affected by a variety of factors, many of which are outside our control. We have no control on how long it takes our remaining cases to settle, making it difficult to forecast cash flow. As a result of our limited operating history and the discontinuation of our previous business plan, it is difficult to forecast revenues or earnings accurately, which may fluctuate significantly from quarter to quarter.
We have a history of significant operating losses and will need to increase operating expenses in the future if we decide to grow our business.
Since our inception in 1998, until commencement of our spine injury diagnostic operations in August 2009, our expenses substantially exceeded our revenue, resulting in continuing losses and an accumulated deficit of $20,278,547 as of December 31, 2021. During the fourth quarter of 2018, we chose to discontinue our involvement in future medical procedures due to our cash position. Presently, we are trying to limit all operating expenses as much as possible. If in the future we decide to increase our service development, marketing efforts and/or brand building activities, we will need to increase our operating expenses and our general and administrative functions to support such growth in operations. No such growth in operations is presently planned. We will need to generate significant revenues to achieve our business plan. Our continued existence is dependent upon our ability to successfully execute our business plan, as well as our ability to increase revenue and obtain additional capital from borrowing and selling securities, as needed, to fund our operations. There is no assurance that additional capital can be obtained or that it can be obtained on terms that are favorable to us and our existing stockholders. Any expectation of future profitability is likely dependent upon our ability to consummate a merger with a target company, of which there can be no assurances.
We may incur significant expenses as a result of being a publicly traded company, which may negatively impact our financial performance.
We may incur significant legal, accounting and other expenses as a result of being a publicly traded company. The Sarbanes-Oxley Act of 2002, as well as related rules implemented by the SEC, has required changes in corporate governance practices of public companies. We expect that compliance with these laws, rules and regulations, including compliance with Section 404 of the Sarbanes-Oxley Act of 2002 as discussed in the following risk factor, may substantially increase our expenses, including our legal and accounting costs, and make some activities more time-consuming and costly. As a result, there may be a substantial increase in legal, accounting and certain other expenses in the future, which would negatively impact our financial performance and could have a material adverse effect on our results of operations and financial condition.
Our internal control over financialSmaller reporting may not be considered effective, which could result in a loss of investor confidence in our financial reports and in turn could have an adverse effect on our stock price.
Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, with our annual reports, we are required to furnish a report by our management on our internal control over financial reporting. Such report will contain, among other matters, an assessment of the effectiveness of our internal control over financial reporting as of the end of the year, including a statement as to whether or not our internal control over financial reporting is effective. This assessment must include disclosure of any material weaknesses in our internal control over financial reporting identified by management. If we are unable to assert that our internal control is effective, investors could be adversely affected.
Our QVH business model is unproven.
Our QVH business model depends upon our ability to implement and successfully execute our business and marketing strategy, which includes our ability to find healthcare providers to whom we can sell or lease QVH units, and from whom we may obtain referrals. If we are unable to find and form relationships with such healthcare providers, our business will likely fail.
We have been contacted in connection with various merger and acquisition opportunities and may choose to enter into a merger and/or acquisition transaction in the future.
We have been contacted by parties seeking to merge and/or acquire us. While we have not entered into any definitive agreements or understandings to merge with or acquire any entity, in the event that we do enter into a merger and/or acquisition with a separate company in the future, our majority shareholders will likely change and new shares of common stock could be issued, resulting in substantial dilution to our then current shareholders. As a result, our new majority shareholders will likely change the composition of our board of directors and replace our current management. The new management will likely change our business focus and we can make no assurances that our new management will be able to properly manage our direction or that this change in our business focus will be successful. If we do enter into a merger or acquisition, and our new management fails to properly manage and direct our operations, we may be forced to scale back or abandon our operations, which will cause the value of our common stock to decline or become worthless. We have not entered into any binding merger or acquisition agreements as of the date of this filing.
Since we have not yet selected a particular target industry or target business with which to complete a business combination, we are unable to ascertain the merits or risks associated with any particular business or industry.
Since we have not yet identified a particular industry or prospective target business, there is no basis for investors to evaluate the possible merits or risks of the target business which we may ultimately acquire (or which may acquire us). If we complete a business combination with a financially unstable company or an entity in its development stage, we may be affected by numerous risks inherent in the operations of those entities. Although our management intends to evaluate the risks inherent in a particular industry or target business, we cannot assure you that we will properly ascertain or assess all of the significant risk factors. There can be no assurance that any prospective business combination will benefit shareholders or prove to be more favorable to shareholders than any other investment that may be made by shareholders and investors.
Our officers and directors may allocate time to other business activities, thereby causing conflicts of interest as to how much time to devote to our affairs. This could have a negative impact on the Company’s ability to consummate a business combination in a timely manner, if at all.
Our officers and directors are not required to commit full time to our affairs, which may result in a conflict of interest in allocating time between our business and other businesses. Management is also engaged in other business endeavors and is not obligated to contribute any specific number of hours per week to our affairs. If management’s other business affairs require them to devote more time to such affairs, it could limit their ability to devote time to our affairs or present the Company as a viable business opportunity and could have a negative impact on our ability to consummate a business combination. Furthermore, we do not have an employment agreement with any members of management.
The Company may be unable to obtain additional financing, if and when required, to complete a business combination or to fund the operations and growth of the business combination target, which could compel the Company to restructure a potential business combination transaction or to entirely abandon a particular business combination.
The Company has not yet identified any prospective target business. If we require funds for a particular business combination because of the size of the business combination or otherwise, or if we require funds for any other purpose, we will be required to seek additional financing, which may or may not be available a terms and conditions satisfactory to the Company, if at all. To the extent that additional financing proves to be unavailable when and if needed to consummate a particular business combination, we would be compelled to restructure the transaction or abandon that particular business combination and seek an alternative target business candidate. In addition, if we consummate a business combination, we may require additional financing to fund the operations or growth of the target business. The failure to secure additional financing could have a material adverse effect on the continued development or growth of the target business. The Company’s officers, directors or stockholderscompanies are not required to provide any financing to us in connection with or after a business combination.
It is probable that the Company will only be able to enter into one business combination, which will cause us to be solely dependent on such single business and a limited number of products or services.
If and when the Company is able to enter into a business combination transaction, it is probable that transaction will be with a single operating business. Accordingly, the prospects for the Company’s success may be:
|
|
|
|
Ininformation required by this case, the Company will not be able to diversify the Company’s operations or benefit from the possible spreading of risks or offsetting of losses, unlike other entities which may have the resources to complete several business combinations in different industries or different areas of a single industry.item.
The Company has limited resources and there is significant competition for business combination opportunities. Therefore, the Company may not be able to enter into or consummate an attractive business combination.
The Company expects to encounter intense competition from other entities having a business objective similar to the Company’s, including venture capital funds, leveraged buyout funds and operating businesses competing for acquisitions. Many of these entities are well established and have extensive experience in identifying and effecting business combinations directly or through affiliates. Many of these competitors possess greater technical, human and other resources than the Company does and the Company’s financial resources are limited when contrasted with those of many of these competitors. While the Company believes that there are numerous potential target businesses that it could acquire, the Company’s ability to compete in acquiring certain sizable target businesses will be limited by the Company’s limited financial resources and the fact that the Company will use its common stock to acquire an operating business. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses.
If the Company is deemed to be an investment company, the Company may be required to institute burdensome compliance requirements and the Company’s activities may be restricted, which may make it difficult for the Company to enter into a business combination
Although we are subject to the reporting requirements of the Exchange Act, management believes we will not be subject to regulation under the Investment Company Act of 1940, since we will not be engaged in the business of investing or trading in securities. If we engage in business transactions which will result in our holding passive investment interests in a number of entities, we could be subject to regulations under the Investment Company Act. If so, we would be required to register as an investment company and could be expected to incur significant registration and compliance costs. We have received no formal determination from the SEC as to our status under the Investment Company Act, and, consequently, violation of the Investment Company Act could subject us to material adverse consequences.
Only one of four of our directors is independent, so actions taken and expenses incurred by our officers and directors on behalf of us will generally not be subject to independent review.
Only one of the four members of our board of directors is independent. While the Company anticipates that all actions taken by our director on the Company’s behalf will be in the Company’s and its stockholders’ best interests, if actions are taken, or expenses are incurred that are actually not in the Company’s and its stockholders best interests, it could have a material adverse effect on our business and plan of operation and the price of our stock held by the public stockholders.
Risks Related to Our Common Stock
We may issue a large number of shares of common stock in the future, including without limitation in a strategic business transaction, which could cause substantial dilution to all stockholders.
We may seek to raise equity or equity-related capital in the future. Additionally, we are presently seeking to enter into a strategic business transaction with another company. Either event is expected to result in us issuing a large number of shares of common stock. Any issuance of shares of our common stock will dilute the percentage ownership interest of all stockholders and may further dilute the book value per share of our common stock. This dilution could be substantial, depending on the size of any such transaction.
We do not anticipate paying any cash dividends.
We have never paid cash dividends on our common stock and do not anticipate doing so for the foreseeable future. The payment of dividends, if any, is within the discretion of our board of directors and is dependent on our revenues and earnings, if any, capital requirements, general financial condition, and other relevant factors. We presently intend to retain all earnings, if any, to implement our business strategy.
The market for our stock is limited and our stock price may be volatile.
There is a limited market for our common stock and a stockholder may not be able to liquidate his or her shares regardless of the necessity of doing so. The prices of our shares are highly volatile. This could have an adverse effect on developing and sustaining the market for our securities. We cannot assure you that the market price of our common stock will not fluctuate or decline significantly. In addition, the stock markets in general can experience considerable price and volume fluctuations.
The trading price of our common stock entails additional regulatory requirements, which may negatively affect such trading price.
Generally, the Securities and Exchange Commission generally defines a “penny stock” as any equity security that is quoted over-the-counter, such as on the OTC Bulletin Board (which is a facility of FINRA) or OTC Link LLC (which is owned by OTC Markets Group, Inc., formerly known as Pink OTC Markets Inc.) that has a market price of less than $5.00 per share. The trading price of our common stock is below $5.00 per share. As a result of this price level, our common stock is considered a penny stock and trading in our common stock is subject to the requirements of certain rules promulgated under the Securities Exchange Act of 1934. These rules require additional disclosure by broker-dealers in connection with any trades generally involving penny stocks subject to certain exceptions. Such rules require the delivery, before any penny stock transaction, of a disclosure schedule explaining the penny stock market and the risks associated therewith and impose various sales practice requirements on broker-dealers who sell penny stocks to persons other than established customers and accredited investors (generally institutions). For these types of transactions, the broker-dealer must determine the suitability of the penny stock for the purchaser and receive the purchaser’s written consent to the transaction before sale. The additional burdens imposed upon broker-dealers by such requirements may discourage broker-dealers from effecting transactions in our common stock. As a consequence, the market liquidity of our common stock could be severely affected or limited by these regulatory requirements.
ITEM 1B. UNRESOLVED STAFF COMMENTS
Not Applicable.
ITEM 1C. CYBERSECURITY.
Cybersecurity Risk Management and Strategy
We recognize the importance of assessing, identifying, and managing material risks associated with cybersecurity threats, as such term is defined in Item 106(a) of Regulation S-K. These risks include, among other things: operational risks, intellectual property theft, fraud, extortion, harm to employees or customers and violation of data privacy or security laws.
| 12 |
Not Applicable.
We do not presently have any general processes for assessing, identifying, and managing material risks from cybersecurity threats. As we expand our business operations, we plan to develop processes that will allow for the identification and assessment of cybersecurity risk that will be integrated into an overall risk management system, which will be managed by senior management and overseen by the Board of Directors. As part of this development, we plan to identify and address cybersecurity risks related to our business, privacy and compliance issues through a multi-faceted approach that is expected to include third party assessments, internal information technology (IT) audit, IT security, governance, risk and compliance reviews. In connection with these planned approaches, and to defend, detect and respond to cybersecurity incidents, we, among other things, will consider: conducting proactive privacy and cybersecurity reviews of systems and applications, audits of applicable data policies, performing penetration testing using external third-party tools and techniques to test security controls, conducting employee training, monitoring emerging laws and regulations related to data protection and information security, and implementing appropriate changes.
As part of the above planned processes, we may engage external auditors and consultants with expertise in cybersecurity to assess our internal cybersecurity programs and compliance with applicable practices and standards.
We plan to design our risk management program to also assesses third party risks, and we plan to perform third-party risk management to identify and mitigate risks from third parties, such as vendors, suppliers, and other business partners associated with our use of third-party service providers. In addition to new vendor onboarding, we plan to perform risk management during third-party cybersecurity compromise incidents to identify and mitigate risks to us from third-party incidents.
Cybersecurity Governance
We expect that cybersecurity will become an important part of our risk management processes and an area of focus for our Board of Directors and management. We expect that our Board of Directors will be responsible for the oversight of risks from cybersecurity threats. We expect our senior management will provide our Board of Directors updates on a quarterly basis regarding matters of cybersecurity. This is expected to include existing and new cybersecurity risks, status on how management is addressing and/or mitigating those risks, cybersecurity and data privacy incidents (if any) and status on key information security initiatives. We expect that our Board members will also engage in periodic conversations with management on cybersecurity-related news events and discuss any updates to our cybersecurity risk management and strategy programs.
Currently, our Chief Executive Officer is expected to lead our cybersecurity risk assessment and management processes and oversees their implementation and maintenance. Our Chief Executive Officer will be tasked with staying informed about, and monitoring the prevention, mitigation, detection and remediation of cybersecurity incidents through his management of, and participation in, the cybersecurity risk management and strategy processes we plan to develop and as described above, including the operation of an incident response plan, and report to the Board of Directors on any appropriate items.
ITEM 2. PROPERTIES
We currently maintain ourOur principal executive offices are located at 5151 Mitchelldale A2, Houston, Texas 77092. This office space encompasses approximately 200 square feet and through November 2021, was provided to us at a rental rate of $1,000 per month on a monthly basis by Northshore Orthopedics, Assoc. (“NSO”), a company owned by William Donovan, M.D., our director and Chief Executive Officer. The rent included the use of the telephone system, computer server, and copy machines.895 Dove Street, Suite 300, Newport Beach, CA 92660. We discontinued paying rent in December 2021 dueoccupy this location pursuant to a lack of funds, and since then NSO has providedlease that may be terminated by us this office space rent free.on 90 days prior notice.
ITEM 3. LEGAL PROCEEDINGS
As of the date of this Annual Report, to our knowledge, there are no legal proceedings or regulatory actions material to us to which we are a party, or have been a party to, or of which any of our property is or was the subject matter of, and no such proceedings or actions are known by us to be contemplated except as provided below:
Due to the misrepresentations and omissions of SuperGreen, Calvin C. Cao and Michael H. Cao, among other reasons, the Company filed a complaint in the U.S. District Court, Central District of California on February 2, 2023 against SuperGreen, Michael H. Cao, Linh T. Dao, Calvin C. Cao and entities affiliated with them alleging fraud-concealment, breach of contract, breach of fiduciary duty-duty of good faith, breach of fiduciary duty-undivided loyalty, conversion and violation of California Penal Code Sec. 496 (the “Cao Lawsuit”). This lawsuit seeks compensatory damages of at least $33.6 million, treble and punitive damages, imposition of a constructive trust over the defendants assets, pre-judgment and post-judgment interest, attorney’s fees and such other relief as determined by the court.
| 13 |
None.
Effective February 20, 2023, the Company, together with its wholly owned subsidiary Bitech Mining Corporation entered into a Confidential Settlement, Mutual Release, and Share Transfer Agreement (the “C. Cao Settlement Agreement”) with Calvin Cao (“C. Cao”) and SuperGreen Energy Corporation (“SuperGreen,” together with C. Cao, the “C. Cao Parties”). The C. Cao Settlement Agreement settles as to the C. Cao Parties, the Cao Lawsuit. Pursuant to the C. Cao Settlement Agreement, the C. Cao Parties terminated the Patent & Technology Exclusive and Non-Exclusive License Agreement between Bitech Mining Corporation and SuperGreen dated January 15, 2021 as amended on January 15, 2021 and on March 26, 2022 (the “License Agreement”) and SuperGreen canceled 51,507,749 shares of the Company’s common stock, par value $0.001 per share issued by the Company to SuperGreen pursuant to the License Agreement. In addition, the parties to the Settlement Agreement agreed to a mutual general release of liabilities against each other, refrain from making any disparaging remarks about each other and the Company’s filing a dismissal with prejudice of the Cao Lawsuit as to the C. Cao Parties. The Settlement Agreement also contains additional covenants, representations and warranties that are customary of litigation settlement agreements. The Company intends to continue to pursue the Cao Lawsuit as to the remaining defendants in that case, namely Michael Cao, B&B Investment Holding, LLC (“B&B Investment”) and Linh Dao.
On March 6, 2023, Michael Cao and Linh Dao filed, without an attorney, a pro se Motion to Dismiss for Lack of Jurisdiction.
On April 17, 2023, the court dismissed the Cao Lawsuit without prejudice due to a lack of subject matter jurisdiction. On April 18, 2023, we filed a complaint against Michael H. Cao, Linh T. Dao, B & B Investment Holding, LLC (“B & B Investment”) and Cory Thomason in the Orange County California Superior Court containing substantially the same allegations included in the Cao Lawsuit filed in federal court (the “Cao State Court Lawsuit”). We served Mr. Cao, Ms. Dao and B & B Investment Holding, LLC on April 26, 2023 and are continuing efforts to serve Mr. Thomason. Defendants Michael H. Cao, Linh T. Dao, B & B Investment (pro se) filed a Motion to Quash Service of Summons; Motion to Dismiss or Stay Complaint (the “B & B Motions”). In response to this motion, the Company filed a Motion to Strike B & B Investment’s motion (the “Motion to Strike”), Request for Sanctions in Amount of $2,400 and Request for Default as to B & B Investment because it is being impermissibly represented by Michael H. Cao who is engaging in the unauthorized practice of law as to a corporate entity. On October 13, 2023, the Court granted in part the Company’s unopposed Motion to Strike, striking the B & B Investment Motions and ordering B &B Investment to retain an attorney no later than October 27, 2023 or be subject to default because corporate entities are not permitted to appear in court without an attorney. The Court denied Mr. Cao’s Motion to Quash and took Linh Dao’s Motion to Quash off calendar, thus keeping all Defendants in the case. The Court ruled that Michael Cao already waived his rights to file such a motion by making a general appearance in the case and noted that Defendants failed to appear at the hearing. On or about October 27, 2023, the Company’s counsel received an initial communication from an attorney attaching responses to the Company’s complaint on behalf of Mr. Cao and B&B Investment. On November 27, 2023, Mr. Cao and B&B Investment filed a Demurrer to the Complaint and Motion to Strike Portions of the Complaint. These responses to the Company’s Complaint, along with the motions filed by Mr. Cao pro se, are all set to be heard on May 10, 2024. The Company will be filing Oppositions to each of these motions. A Case Management Conference is also set for May 10, 2024.
Mr. Cao served initial responses to our discovery requests, but we believed these responses were evasive and asserted unnecessary objections. After attempting to meet and confer with Mr. Cao, we filed motions to compel further responses to our discovery requests which were heard on December 8, 2023. The Court granted in part and denied in part our motions. Accordingly, Mr. Cao served supplemental responses and provided responsive documents, which we have deemed sufficient.
The Company intends to vigorously prosecute the Cao State Court Lawsuit. We cannot predict the outcome of this lawsuit, however.
Litigation Assessment
We have evaluated the foregoing Cao Lawsuit to assess the likelihood of any unfavorable outcome and to estimate, if possible, the amount of potential loss as it relates to the litigation. Based on this assessment and estimate, which includes an understanding of our intention to vigorously prosecute the Cao Lawsuit, we believe that the potential defenses of any of the remaining defendants lack merit, however, and we cannot predict the likelihood of any recoveries by any of our claims against the remaining defendants. This assessment and estimate is based on the information available to management as of the date of this Annual Report and involves a significant amount of management judgment, including the inherent difficulty associated with assessing litigation matters in their early stages. As a result, the actual outcome or loss may differ materially from those envisioned by the current assessment and estimate. Our failure to successfully prosecute, defend or settle the Cao Litigation with the remaining defendants could have a material adverse effect on our financial condition, revenue and profitability and could cause the market value of our common stock to decline.
ITEM 4. MINE SAFETY DISCLOSURES
Not Applicable.
| 14 |
Not Applicable.
PART II
ITEM 5. MARKET FOR REGISTRANT’SREGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Our common stock is quoted on the OTCQB tier of the OTC Markets Group, Inc. under the symbol, “SPIN.“BTTC.” Any over-the-counter marketThe OTC Market is a network of security dealers who buy and sell stock. The dealers are connected by a computer network that provides information on current “bids” and “asks”, as well as volume information.
The following table sets forth trading information for our common stock for the periods indicated, as quoted on the OTCQB. These quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.
| Low Trading Price | High Trading Price | |||||||
| Period | ($) | ($) | ||||||
| Year Ended December 31, 2023 | ||||||||
| Fourth Quarter (December 31, 2023) | 0.02 | 0.07 | ||||||
| Third Quarter (September 30, 2023) | 0.03 | 0.05 | ||||||
| Second Quarter (June 30, 2023) | 0.02 | 0.05 | ||||||
| First Quarter (March 31, 2023) | 0.02 | 0.07 | ||||||
| Year Ended December 31, 2022 | ||||||||
| Fourth Quarter (December 31, 2022) | 0.02 | 0.14 | ||||||
| Third Quarter (September 30, 2022) | 0.10 | 0.19 | ||||||
| Second Quarter (June 30, 2022) | 0.09 | 0.45 | ||||||
| First Quarter (March 31, 2022) | 0.07 | 0.18 | ||||||
Record Holders
As of March 16, 2022, there were approximately 63 stockholders of record of our common stock, and we estimate that there were approximately 425 additional beneficial stockholders who hold their shares in “street name” through a brokerage firm or other institution. As of March 16, 2022, we have a total of 20,240,882 shares of common stock issued and outstanding. The holders of the common stock are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders. Holders of the common stock have no preemptive rights and no right to convert their common stock into any other securities. There are no redemption or sinking fund provisions applicable to the common stock.
Equity Compensation Plan Information
As of December 31, 2021,2023 there were approximately 115 record holders of our common stock. The number of record holders does not include beneficial owners of common stock whose shares are held in the names of banks, brokers, nominees or other fiduciaries.
Dividend Policy
We have not declared or paid any dividends on our common stock since our inception. We currently intend to reinvest all cash resources to finance the development and growth of our business. As a result, we do not intend to pay dividends on our common stock in the foreseeable future. Any future determination to pay dividends will be at the discretion of our board of directors and will depend on the financial condition, earnings, legal requirements, restrictions in its debt agreements and any other factors that our board of directors deems relevant. In addition, as a holding company, our ability to pay dividends depends on our receipt of cash dividends from our operating subsidiaries, which may further restrict our ability to pay dividends as a result of the laws of their respective jurisdictions of organization, agreements of our subsidiaries or covenants under future indebtedness that we or our subsidiaries may incur.
Unregistered Sales of Securities
The following information represents securities sold by us that has not been previously included in a Quarterly Report on Form 10-Q or a Current Report on Form 8-K which were not registered under the Securities Act. Included are new issues, securities issued in exchange for property, services or other securities, securities issued upon conversion from our other share classes and new securities resulting from the modification of outstanding securities. We issued all of the securities listed below pursuant to the exemption from registration provided by Section 4(a)(2) of the Securities Act, or Regulation D or Regulation S promulgated thereunder.
On December 21, 2022, the Company awarded a director as Compensation service to the Company as a director, an option to purchase 5,000,000 shares of the Company’s Common Stock at an exercise price of $0.07 per share which vest as to 20% of the award on each December 21, beginning December 21, 2023, so long as such directors is providing services to the Company or one of its subsidiaries subject to acceleration in the event of termination for cause.
| 15 |
On February 13, 2023, the Company awarded an officer and director of the Company as compensation for service to the Company, an option to purchase 5,000,000 shares of the Company’s Common Stock at an exercise price of $0.025 per share which vest 80% on date of grant and 10% on January 1, 2024 and 10% on January 1, 2025 so long as person is providing services to the Company or one of its subsidiaries subject to acceleration in the event of termination for cause.
On April 3, 2023, the Company awarded a director as Compensation for service to the Company as a director, an option to purchase 5,000,000 shares of the Company’s Common Stock at an exercise price of $0.03 per share which vest 50% of the date of grant and 50% on April 3, 2024, so long as such director is providing services to the Company or one of its subsidiaries subject to acceleration in the event of termination for cause.
On April 3, 2023, the Company awarded an officer and director of the Company as compensation for services to the Company an option to purchase 5,000,000 shares of the Company’s Common Stock at an exercise price of $0.03 per share which vests 50% on date of award on April 3, 2023 and 50% on April 3, 2024, so long as person is providing services to the Company or one of its subsidiaries subject to acceleration in the event of termination for cause.
On November 27, 2023, the Company awarded a director as compensation for services to the Company as a director, 1,000,000 shares of restricted Common Stock which vested on December 31, 2023. The value of this award was $20,000.
On November 27, 2023, the Company awarded an Officer and director of 500,000 shares of restricted Common Stock which vests 100% on December 31, 2023 so long as such person is providing services to the Company or one of its subsidiaries.
The Company issued 1,674506 unregistered shares of its Common Stock valued at $117,455 during the year ended December 31, 2023 as payment for services provided to the Company.
During April, May and June, 2023, the Company sold 11,250,000 unregistered shares of its Common Stock to six private investors in exchange for $225,000 ($0.02 per share).
During August 2023 the Company sold 666,667 unregistered shares of its Common Stock to one private investor for $20,000 ($0.03 per share)
During October, November, and December 2023 the Company sold 5,375,000 unregistered shares of its Common Stock to three private investor for $167,500 ($0.03-$0.04 per share)
Equity Compensation Plan Information
As of December 31, 2023, we do not have any compensation plans under which our equity securities are authorized for issuance.
ITEM 6. RESERVED
ITEM 7. MANAGEMENT’SMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The followingThis management discussion and analysis (“MD&A”) of the financial condition and results of operations of Bitech Technologies Corporation (the “Company,” “Bitech Technologies,” “our” or “we”) is for the years ended December 31, 2023 and 2022. It is supplemental to, and should be read in conjunction with, the audited consolidatedour financial statements for the period January 8, 2021 (inception) through December 31, 2023 and the accompanying notes for such period included in our Current Report on Form 8-K filed with the Securities and Exchange Commission, or SEC, on April 4, 2022. Our financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Financial information presented in this MD&A is presented in United States dollars (“$” or “US$”), unless otherwise indicated.
| 16 |
The information about us provided in this MD&A, including information incorporated by reference, may contain “forward-looking statements” and certain “forward-looking information” as defined under applicable United States securities laws. All statements, other than statements of historical fact, made by us that address activities, events or developments that we expect or anticipate will or may occur in the future are forward-looking statements, including, but not limited to, statements preceded by, followed by or that include words such as “may”, “will”, “would”, “could”, “should”, “believes”, “estimates”, “projects”, “potential”, “expects”, “plans”, “intends”, “anticipates”, “targeted”, “continues”, “forecasts”, “designed”, “goal”, or the negative of those words or other similar or comparable words and includes, among others, information regarding: our future business activities; our ability to generate revenues; our need for substantial additional financing to operate our current and future business and difficulties we may face acquiring additional financing on terms acceptable to us or at all; risks related notesto competition; risks related to our lack of internal controls over financial reporting and their effectiveness; increased costs we are subject to as a result of being a public company in the United States; and other events or conditions that may occur in the future.
Forward-looking statements may relate to future financial conditions, results of operations, plans, objectives, performance or business developments. These statements speak only as at the date they are made and are based on information currently available and on the then current expectations of the party making the statement and assumptions concerning future events, which are subject to a number of known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from that which was expressed or implied by such forward-looking statements.
Although we believe that the expectations and assumptions on which such forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements, because no assurance can be given that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks discussed above.
Consequently, all forward-looking statements made in this MD&A and other documents, as applicable, are qualified by such cautionary statements, and there can be no assurance that the anticipated results or developments will actually be realized or, even if realized, that they will have the expected consequences to or effects on us. The cautionary statements contained or referred to in this section should be considered in connection with any subsequent written or oral forward-looking statements that we and/or persons acting on its behalf may issue. We do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, other than as required under securities legislation.
Overview of the Business
We have refocused our business development plans as we seek to position ourselves as a global technology solution enabler dedicated to providing a suite of green energy solutions with plans to develop Battery Energy Storage System (BESS) projects, commercial and residential renewable energy solutions, enterprise utility services, public service engagements, and other renewable energy initiatives. We plan to pursue these innovative energy technologies through research and development, technology integration, planned acquisitions of other early stage green energy development projects and plans to become a grid-balancing operator using BESS solutions and applying new green technologies as a technology enabler in the green energy sector. Our team has identified two highly competitive battery energy storage suppliers who have expressed interest in establishing partnerships with us, as we seek to integrate their products into projects that we identify, including grid-balancing BESS projects we plan to pursue following the Business Combination with Bridgelink discussed below. In addition, we are seeking business partnerships with defensible technology innovators and renewable energy providers to facilitate investments, provide new market entries toward emerging-growth regions and implement innovative, scalable energy system solutions with technological focuses on smart grid, Home Energy Management System (HEMS), Building Energy Management System (BEMS), City Energy Management System (CEMS), energy storage, and EV infrastructure.
In December 2023, we received an initial purchase order from a strategic customer to implement a BEMS Virtual Power Plant (VPP) Program designed to save electricity for approximately 4,000 multi-dwelling units (MDUs). Our customer is working with PJM, a Regional Transmission Organization (RTO) that coordinates the movement of wholesale electricity in the District of Columbia in the U.S. and all or parts of 13 states including Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia. We have commenced providing services pursuant to this purchase order and we expect to complete our work during [__].
| 17 |
We are also developing a suite of services and bundled products we call the Bitech Smart Energy Technology Solutions. Our planned solutions are expected to integrate a variety of Energy Management Systems (X-EMS) that allow for efficient management of energy usage, Energy Storage Systems (ESS) for storing excess energy and Smart Power Systems (SPS) that regulate the flow of energy in homes and commercial buildings. We also offer Power Control Conversion solutions that are designed to optimize the utilization of renewable energy sources. With our planned portfolio of integrated solutions, we believe that individuals and businesses will be capable of reducing their carbon footprint while also enjoying significant cost savings on their energy bills.
With combined experience in the power industry ranging from EMS, energy storage, Industrial IoT and system integration, we plan to leverage this expertise to develop a three-pronged Green Energy Technology Enabler Business model to effectively cater to the consolidated financial statements includedrapidly growing demand for sustainable energy solutions.
We plan to execute a “Dual Growth Business Model” as discussed in this Form 10-K.Part I, Item 1. Business which includes an in-house technology innovation implementing system integration approach enhanced with our plans to carry out technology merger and acquisitions for specific green energy applications, and (2) revenue growth by executing planned BESS operations following our planned Business Combination with Bridgelink discussed below, additional potential joint ventures and/or partnerships with operating partners to collect operating and joint venture revenues from BESS operations. As described in our Dual Growth Business Model, we aim to grow by strategically acquiring intellectual property (IP) assets.
Management Overview
At the endIn light of 2008, we launched our new business concept of medical services and technology that delivers turnkey solutions to spine surgeons, orthopedic surgeonsthese practical initiatives and other healthcare providers for necessary, reasonable and appropriate treatment for musculo-skeletal spine injuries.
During the fourth quarter of 2018, the decision was madereasons noted below, we have, however, elected to discontinue our involvement in future medical proceduresefforts to commercialize the electric power generation and charging system (the “Tesdison Technology”) we formerly licensed from SuperGreen Energy Corporation (“SuperGreen”) pursuant to the Patent & Technology Exclusive and Non-Exclusive License Agreement dated January 15, 2021, as amended, entered into between SuperGreen and the Company’s wholly owned subsidiary Bitech Mining Corporation (“Bitech Mining”) (the “SuperGreen License”). In addition, we paused the further development of Intellisys-8, our planned chipset and related software due to our cash position,the unfavorable market conditions within the cryptocurrency market in 2023.
Our business expansion plans will require a significant amount of additional capital. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources” and involve a significant number of future business, financial, operational and regulatory risks. See “Note About Forward-Looking Statements.”
Recent Transactions
As previously disclosed in the Company’s Current Report on Form 8-K filed with the SEC on January 12, 2024, on January 8, 2024, the Company, Bridgelink Development, LLC, a Delaware limited liability company (“Bridgelink”), a solar and energy storage development company based in Fort Worth, Texas and C & C Johnson Holdings LLC, the sole member of Bridgelink (the “Member”) entered into a Letter Agreement (the “Letter Agreement”) for a business combination (the “Business Combination”). See “Part I, Item 1. Business – Recent Transactions.” Completion of the Business Combination is contingent upon the parties entering into a definitive agreement which also hampers our abilitywill contain certain conditions to pay back existing debtclose, including a commitment for a capital investment or other financing transaction of not less than $50,000,000 (the “Capital Infusion”) prior to closing. In addition, the definitive agreement is expected to include additional covenants, representations and warranties that are customary of business combination agreements of this type.
Acquisition of Bitech Mining Corporation
The Company acquired Bitech Mining Corporation (“Bitech Mining”) on March 31, 2022 (the “Closing Date”) through a share exchange pursuant to a currentShare Exchange Agreement (the “Share Exchange Agreement”) by and among the Company, Bitech Mining, each of Bitech Mining’s shareholders (each, a “Seller” and collectively, the “Sellers”), and Benjamin Tran, solely in his capacity as Sellers’ Representative (“Sellers’ Representative”). The transaction contemplated by the Share Exchange Agreement is hereinafter referred to as the “Share Exchange”). Pursuant to the Share Exchange Agreement the Company acquired from the Sellers, an aggregate of 94,312,250 shares of Bitech Mining’s Common Stock representing 100% of the issued and outstanding shares of Bitech Mining (collectively, the “Bitech Mining Shares”). In consideration of the Bitech Mining Shares, the Company issued to the Sellers an aggregate of 9,000,000 shares of the Company’s newly authorized Series A Convertible Preferred Stock, par value $0.001 per share (the “Series A Preferred Stock”). Each Bitech Mining Share was entitled to receive 0.09543 shares of Series A Preferred Stock. Each share of Series A Preferred Stock automatically converted into 53.975685 shares (an aggregate of approximately 485,781,300) of the Company’s Common Stock upon filing of an amendment to its Certificate of Incorporation increasing the number of the Company’s authorized common stock so that there were a sufficient number of shares of Common Stock authorized but unissued to permit a full conversion of all the Series A Preferred Stock. Effective as of June 27, 2022, the Series A Preferred Stock automatically converted into 485,781,168 shares of Common Stock following the June 27, 2022 filing of an amendment to the Company’s Certificate of Incorporation increasing the number of the Company’s authorized common stock to 1,000,000,000 shares. Upon conversion of the Series A Preferred Stock, the Sellers held, in the aggregate, approximately 96% of the issued and outstanding shares of Company capital stock on a fully diluted basis.
| 18 |
The Share Exchange was treated as a recapitalization and reverse acquisition for financial reporting purposes, and Bitech Mining was considered the acquirer for accounting purposes.
Disposition of Quad Video Assets
On June 30, 2022 (the “Effective Date”), we completed the sale of all of the assets of our wholly owned subsidiary Quad Video Halo, Inc. (“Quad Video”) pursuant to the terms of an Asset Purchase Agreement entered into among Quad Video, Quad Video Holdings Corporation (“Quad Holdings”) and Peter Dalrymple, a former officer, director and shareholder. Wesubstantial shareholder of the Company (“Dalrymple,” together with Quad Holdings, collectively, the “Buyers”) dated as of the Effective Date (the “Quad Video APA”). Pursuant to the terms of the Quad Video APA, Quad Video sold all of its assets to Quad Holdings which included its accounts receivables, fixed assets, intangible assets and all customer lists associated with Quad Video’s business (the “Quad Video Assets”).
Prior to March 31, 2022, we were not involved in any procedures in 2021 and have no plans to do soengaged in the future. The service revenue previously earned has resulted in longer settlement times, which has created a slowdown in cash collections. Additionally, our efforts to establish a market forbusiness of owning, developing and leasing the Quad Video Halo has not met our expectations andvideo recording system (“QVH”) used to record medical procedures including the collection of accounts receivables related to previously provided spine injury diagnostic services (collectively, the “QVH Business”). On June 30, 2022, we have cut back its development and operations. In late 2018, however, we were ablesold the assets related to leasethe QVH units to customers, which leases include the useBusiness.
Comparison of our QVH units along with image processing services.
There can be no guarantee of us continuing as a going concern if we cannot find additional capital. We continue to explore opportunities to raise additional capital to fund our operations. We are also actively seeking a private company with which to enter into a strategic business transaction, including without limitation a merger. Further, we have been in negotiations with a certain third-party candidate since December 2021. We are presently negotiating terms of a proposed share exchange agreement with the candidate, under which its shareholders would exchange their shares for shares of our stock. Although we do not presently have a binding agreement with this company or its shareholders, it is possible that a definitive agreement for the proposed transaction could be agreed to and consummated in the imminent future. There is no assurance that such transaction will be completed, or if completed, that the terms will be favorable to us.
Results of Operations
For the years ended December 31, 2021 versus 2020:2023 and 2022.
We recorded $104,292 in QVH lease revenuehave generated minimal revenues for the year ended December 31, 2021, coupled with $64,5882023 and no revenues from its primary business for the year ended December 31, 2022. The Company generated $7,000 of service revenues consistingother income for the year ended December 31, 2023 not related to it’s primary business. We invoiced and collected $26,197 from our QVH legacy business and recorded other income of excess collections$50,275 generated from accounts receivable previously written-off as uncollectible for previously funded procedures totaling $14,588the year ended December 31, 2022.
During the year ended December 31, 2023, we incurred $819,001 of general and a revisionadministrative expenses compared to our estimated variable consideration totaling $50,000, resulting in revenue of $168,880. For$888,106 for the same period in 2020,2022. General and administrative expenses have decreased during 2023 compared to 2022 as the Company moves from development stage to revenue generation and keeps overhead lean.
As a result of the foregoing, we recorded $95,941had net loss of ($811,693) for the year ended December 31, 2023, compared to a net loss of ($811,635) for the year ended December 31, 2022.
Working Capital
The calculation of Working Capital provides additional information and is not defined under GAAP. We define Working Capital as current assets less current liabilities. This measure should not be considered in QVH lease revenue coupledisolation or as a substitute for any standardized measure under GAAP. This information is intended to provide investors with $76,078 relatinginformation about our liquidity.
Other companies in our industry may calculate this measure differently than we do, limiting its usefulness as a comparative measure.
Liquidity and Capital Resources
As of December 31, 2023 and December 31, 2022, we had total current liabilities of $35,229 and $11,397, respectively, and current assets of $163,417 and $210,723, respectively, to excess collections for previously funded procedures bringing total revenuemeet our current obligations. As of December 31, 2023, we had working capital of $128,188, a decrease of working capital of $71,138 as compared to $172,019. December 31, 2022, driven primarily by cash used in operations.
For the year ended December 31, 2021,2023, cash used in operations was ($457,806) which primarily included the net loss of ($811,693) partially offset by $147,455 related to the issuance of common stock for services and $180,600 related to a stock option issued as compensation.
| 19 |
We have a history of operating losses. We have not yet achieved profitable operations and expect to incur further losses. We have funded our collectionsoperations primarily from equity financing. As of previously funded procedures decreased as we are no longer funding new procedures and previously funded procedures are in run-off.
Expenses
For the years ended December 31, 2021 versus 2020:
Operating, general2023, cash generated from financing activities was not sufficient to fund our growth strategy in the short-term or long-term. The primary need for liquidity is to fund working capital requirements of the business, including operational expenses in connection with our efforts to become a provider of a suite of green energy solutions and administrative expenses forto fund the development projects we expect to pursue following completion of the Business Combination with Bridgelink. The primary source of liquidity has primarily been private financing transactions. The ability to fund operations and pursue these opportunities and projects within the green energy industry depends on our ability to raise funds from debt and/or equity financing which is subject to prevailing economic conditions and financial, business and other factors, some of which are beyond our control. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms.
Off-Balance Sheet Arrangements
As of the date of this Annual Report on Form 10-K, we do not have any off-balance-sheet arrangements that have, or are reasonably likely to have, a current or future effect on our results of operations or financial condition, including, and without limitation, such considerations as liquidity and capital resources.
Changes in or Adoption of Accounting Practices
There were no material changes in or adoption of new accounting practices during the year ended December 31, 2021 were $379,883 as compared to $507,397 for the year ended December 31, 2020. Operating expenses decreased due primarily to decreases in payroll, rent, consulting and insurance expenses.2023.
Other income (expense) for the year ended December 31, 2021 was other income, net of $70,638 as compared to other income, net of $37,984 for the year ended December 31, 2020. The 2021 other income consisted of $63,500 of deposit received from a private company seeking to acquire us, which was recognized as other income upon terminationCritical Accounting Policies
See Note 2 of the letter of intent agreement. In addition, we recognized $33,946 as other income upon the transfer of certain accounts receivable with a carrying value of $0accompanying notes to Peter Dalrymple, a director, in exchange for a reduction in theunaudited condensed consolidated financial statements, which note payable to Mr. Dalrymple in the amount of $33,946. For the year ended December 31, 2020, other income, net consisted primarily of the forgiveness of our Paycheck Protection Program (“PPP”) loan as further described below. Other income (expense) was partially offsetis incorporated herein by $26,859 and $26,646 of interest expense during the years ended December 31, 2021 and 2020, respectively.reference.
On April 22, 2020 we received an SBA loan in the amount of $64,097 under the federal PPP which helps businesses keep their workforce employed during the Coronavirus crisis. The PPP is part of the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act signed into law in March of 2020. The PPP is a loan designed to provide direct incentive for small businesses to keep their workers on the payroll, which will be forgiven if all employees are kept on the payroll for eight weeks and the money is used for the sole purpose of payroll, rent, mortgage interest, or utilities, subject to the provisions in the program. The loan carries an interest rate of 1% and is due in two years, April 22, 2022. There is no collateral and no personal guarantees. In December 2020, we applied for forgiveness of our PPP loan and subsequently received a notice of approval. Accordingly, we removed the PPP loan amount from our consolidated balance sheet and recognized a gain on forgiveness of debt.
Net Loss
For the years ended December 31, 2021 versus 2020:
Net loss for the year ended December 31, 2021 was $140,365 compared to net loss of $297,394 for the year ended December 31, 2020. The main reason for the decrease was lower operating expenses, coupled with an increase in other income, as described above.
Liquidity and Capital Resources
For the year ended December 31, 2021 versus 2020:
During 2021, cash provided by operating activities was $35,836 as compared to $446,971 in 2020. The decrease in cash provided by operations was mainly due to a decrease in collections of outstanding receivables.
Cash used in financing activities totaled $61,054 for the year ended December 31, 2021, consisting of $61,054 in payments on our note to Peter Dalrymple. Cash used in financing activities totaled $515,903 for the year ended December 31, 2020, consisting of payments on our note payable totaling $110,000 and $470,000 in payments on our line of credit, partially offset by proceeds received from a PPP loan of $64,097.
Income Tax Expense (Benefit)
We have not made a provision for income taxes in 20212023 or 2020,2022, which reflects our valuation allowance established against our benefits from net operating loss carryforwards.
Critical Accounting Policies
In Note 3 to the audited consolidated financial statements for the years ended December 31, 2021 and 2020 included in this Form 10-K, we discuss those accounting policies that are considered to be significant in determining the results of operations and our financial position. The following critical accounting policies and estimates are important in the preparation of our consolidated financial statements:
Use of Estimates
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires our management to make significant estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. By their nature, these judgments are subject to an inherent degree of uncertainty. On an ongoing basis, we evaluate estimates. We base our estimates on historical experience and other facts and circumstances that we believe to be reasonable, and the results form the basis for making judgments about the carrying value of assets and liabilities. The actual results may differ from these estimates under different assumptions or conditions.
Revenue Recognition and Accounts Receivable
The Company’s accounting for revenues is governed by two accounting standards. The Company’s service and product sale revenue are accounted for under ASC 606, Revenue from Contracts with Customers. Additionally, the Company’s QVH rental revenues are accounted for under ASC 842, Leases.
Service and Product Sale Revenue Recognition
Historically, our net revenues included service revenues that arose from the delivery of medical diagnostic services provided to patients by medical professionals at spine injury diagnostic centers, only after the patients completed and signed required medical and financial paperwork. Service revenues were recorded as net patient service revenues based on variable consideration elements further described below. While we did collect 100% of the accounts on certain patients, our historical collection rate was used to estimate the variable consideration expected and is reflected in the carrying balance of accounts receivable and service revenue recorded. A discount rate of 48%, based on payment history, was used to reduce revenue to 52% of Current Procedural Terminology code rates (“CPT” codes are numbers assigned to every task and service a medical practitioner may provide to a patient including medical, surgical and diagnostic services. CPT codes are developed, maintained and copyrighted by the American Medical Association). Patients were billed at the normal billing amount, based on national averages, for a particular CPT code procedure during the year ended December 31, 2018 and prior years. We recorded no revenue related to medical diagnostic services provided during the years ended December 31, 2021 and 2020 and revenue presented represents adjustments of variable consideration received for procedures performed in years prior to 2019.
Service revenue and corresponding accounts receivable are recognized by reference to “net revenue” and “accounts receivable, net” which is defined as gross amounts billed using CPT codes (“gross revenue”) less account discounts that are expected to result when individual cases are ultimately settled, which is the variable consideration associated with this revenue stream.
Our credit policy has been established based upon extensive experience by management in the industry and has been determined to ensure that collectability is reasonably assured. Payment for services are primarily made to us by a third party upon settlement of a case. As of December 31, 2021 and 2020, there were no material contract assets, contract liabilities, or deferred contract costs recorded in the consolidated financial statements.
Revenue expected to be recognized in any future year related to remaining performance obligations, excluding revenue pertaining to contracts that have an original expected duration of one year or less, contracts where revenue is recognized as invoiced and contracts with variable consideration related to undelivered performance obligations, is not material.
Lease Revenues
Rental revenues from operating leases are recognized on a straight-line basis over the term of the lease. Rental billings for periods extending beyond period end are recorded as deferred income and are recognized in the period earned. For the QVH leases, rental related service revenues for support, maintenance and video processing, delivery, and installation are lease related because the payments are considered minimum lease payments that are an integral part of the negotiated lease agreement with the customer. These revenues are recognized on a straight-line basis over the term of the lease. As of the year ended December 31, 2021, the Company’s leases consisted solely of operating leases.
Going Concern
Since our inception in 1998, until commencement of our spine injury diagnostic operations in August, 2009, our expenses substantially exceeded our revenue, resulting in continuing losses and an accumulated deficit of $20,278,547 as of December 31, 2021. During the year ended December 31, 2021, we recorded net revenue of $168,880 and a net loss of $140,365. Presently, we are trying to limit all operating expenses as much as possible. If in the future we decide to increase our service development, marketing efforts and/or brand building activities, we will need to increase our operating expenses and our general and administrative functions to support such growth in operations. No such growth in operations is presently planned. We are actively seeking a private company with which to enter into a strategic business transaction, including without limitation a merger; however, we cannot predict the ultimate outcome of our efforts. Our continued existence is dependent upon our ability to successfully merge with a financially viable company, or our ability to obtain additional capital from borrowing and/or selling securities, as needed, to fund our operations. There is no assurance that additional capital can be obtained or that it can be obtained on terms that are favorable to us and our existing stockholders. Any expectation of future profitability is likely dependent upon our ability to successfully merge with another company, of which there can be no assurances.
During the fourth quarter of 2018, the decision was made to discontinue our involvement with future medical procedures due to our cash position, which also hampered our ability to pay back existing debt to a current director and shareholder (see Note 6—Notes Payable in the consolidated financial statements). We were not involved in any procedures in 2021 and have no plans to do so in the future. The service revenue we previously earned has resulted in longer settlement times, which has created a slowdown in cash collections. Additionally, our efforts to establish a market for the Quad Video Halo has not met our expectations and we have cut back its development and operations. If we are unable to access additional capital in the near future, these recent developments could have a material negative impact on our financial performance and could have a material adverse effect on our results of operations and financial condition. The accompanying consolidated financial statements have been prepared assuming that we will continue as a going concern. This basis of accounting contemplates the recovery of our assets and the satisfaction of liabilities in the normal course of business. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not Applicable.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Our financial statements for the fiscal years ended December 31, 20212023 and 20202022 are attached hereto.
TABLE OF CONTENTS
Report of Independent Registered Public Accounting Firm (PCAOB ID |
| 21 | |
Consolidated Financial Statements | |||
Consolidated Balance Sheets at December 31, |
| 22 | |
Consolidated Statements of Operations for the years ended December 31, |
| 23 | |
| 24 | ||
Consolidated Statements of Cash Flows for the years ended December 31, |
| 25 | |
| 26 | ||
| 20 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and Board of Directors and
Spine Injury Solutions, Inc.Stockholders of Bitech Technologies Corporation
Houston, Texas
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Spine Injury Solutions, Inc. and Subsidiary (the “Company”Bitech Technologies Corporation (“the Company”) as of December 31, 20212023 and 2020,2022, and the related consolidated statements of operations, changes in stockholders’ equity (deficit)shareholders’ deficit, and cash flows for the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”)statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 20212023 and 2020,2022, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
The Company’s Ability to Continue as a Going Concern
The accompanying consolidated financial statements referred to above have been prepared assuming that the Company will continue as a going concern. As more fully describeddiscussed in Note 2 to the financial statements, the Company has an accumulated deficit of $20,278,547 as of December 31, 2021suffered recurring losses from operations and a net loss of $140,365 for the year ended December 31, 2021. Additionally,negative cash flows from operating activities, therefore, the Company is not generating sufficient cash flows to meet its regular working capital requirements. These conditions raisehas stated that substantial doubt exists about the Company’sits ability to continue as a going concern. Management’s plans asin regard to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal controlscontrol over financial reporting. As part of our auditaudits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’sentity’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
CriticalThe critical audit matters communicated below are matter arisingsmatters arising from the current-periodcurrent period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and thatthat: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) representedinvolved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Going Concern
As described further in Note 2 to the consolidated financial statements, the Company has incurred losses each year from inception through December 31, 2023.
We determined that there are nothe Company’s ability to continue as a going concern is a critical audit matters.
/s/ Ham, Langston & Brezina, LLP
We have served asmatter due to the estimation and uncertainty regarding the Company’s auditor since 2010.future cash flows and the risk of bias in management’s judgments and assumptions in estimating these cash flows.
Our audit procedures related to the Company’s assertion on its ability to continue as a going concern included the following, among others:
We reviewed the Company’s working capital and liquidity ratios, operating expenses, and uses and sources of cash used in management’s assessment of whether the Company has sufficient liquidity to fund operations for at least one year from the financial statement issuance date. This testing included inquiries with management, comparison of prior period forecasts to actual results, consideration of positive and negative evidence impacting management’s forecasts, the Company’s financing arrangements in place as of the report date, market and industry factors and consideration of the Company’s relationships with its financing partners.
| /s/ Fortune CPA, Inc | |
| We have served as the Company’s auditor since 2022. | |
| Huntington Beach, CA | |
| March 31, 2024 | |
| PCAOB # 6901 |
| 21 |
Houston, Texas
March 16, 2022BITECH TECHNOLOGIES CORPORATION
SPINE INJURY SOLUTIONS, INC.
CONSOLIDATED BALANCE SHEETS
AUDITED
December 31, | December 31, | |||||||
2021 | 2020 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 16,437 | $ | 41,655 | ||||
Accounts receivable, net of allowance for discounts of $447,126 and $585,257 at December 31, 2021 and 2020, respectively | 27,263 | 232,244 | ||||||
Total current assets | 43,700 | 273,899 | ||||||
Property and equipment, net | - | 10,959 | ||||||
Total assets | $ | 43,700 | $ | 284,858 | ||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
Current liabilities: | ||||||||
Notes payable | 395,000 | 490,000 | ||||||
Accounts payable and accrued liabilities | 37,495 | 43,288 | ||||||
Total current liabilities | 432,495 | 533,288 | ||||||
Commitments and contingencies | ||||||||
Stockholders’ deficit: | ||||||||
Common stock: $0.001 par value, 250,000,000 shares authorized, 20,240,882 shares issued and outstanding at both December 31, 2021 and 2020 | 20,241 | 20,241 | ||||||
Additional paid-in capital | 19,869,511 | 19,869,511 | ||||||
Accumulated deficit | (20,278,547 | ) | (20,138,182 | ) | ||||
Total stockholders’ deficit | (388,795 | ) | (248,430 | ) | ||||
Total liabilities and stockholders’ deficit | $ | 43,700 | $ | 284,858 | ||||
| December 31, | December 31, | |||||||
| 2023 | 2022 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 152,417 | $ | 197,723 | ||||
| Prepaid expense | 11,000 | 13,000 | ||||||
| Total current assets | 163,417 | 210,723 | ||||||
| Total assets | $ | 163,417 | $ | 210,723 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued liabilities | 35,229 | 11,397 | ||||||
| Total current liabilities | 35,229 | 11,397 | ||||||
| Stockholders’ equity | ||||||||
| Preferred stock, $ par value, shares authorized, shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively | - | - | ||||||
| Series A Convertible Preferred stock; $ par value, shares authorized, shares issued and outstanding at December 31, 2023 and December 31, 2022 | - | - | ||||||
| Preferred stock value | - | - | ||||||
| Common stock: $ par value, shares authorized, and shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively | 484,464 | 515,506 | ||||||
| Additional paid-in capital | 1,552,011 | 780,414 | ||||||
| Accumulated deficit | (1,908,287 | ) | (1,096,594 | ) | ||||
| Total stockholders’ equity | 128,188 | 199,326 | ||||||
| Total liabilities and stockholders’ equity | $ | 163,417 | $ | 210,723 | ||||
The accompanying notes are an integral part of the audited consolidated financial statements.
| 22 |
SPINE INJURY SOLUTIONS, INC.BITECH TECHNOLOGIES CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
For the years ended December 31, 2021 and 2020AUDITED
2021 | 2020 | |||||||
Net service revenue | $ | 64,588 | $ | 76,078 | ||||
Lease revenue | 104,292 | 95,941 | ||||||
Total revenue | 168,880 | 172,019 | ||||||
Operating, general and administrative expenses | 379,883 | 507,397 | ||||||
Loss from operations | (211,003 | ) | (335,378 | ) | ||||
Other income (expense): | ||||||||
Gain from forgiveness of debt | - | 64,097 | ||||||
Other income | 97,497 | 533 | ||||||
Interest expense | (26,859 | ) | (26,646 | ) | ||||
Total other income (expense), net | 70,638 | 37,984 | ||||||
Net loss | $ | (140,365 | ) | $ | (297,394 | ) | ||
Net loss per common share: | ||||||||
Basic/ diluted | $ | (0.01 | ) | $ | (0.01 | ) | ||
Weighted average shares used in loss per common share: | ||||||||
Basic/ diluted | 20,240,882 | 20,240,882 | ||||||
For the Year ended December 31, 2023 | For the Year ended December 31, 2022 | |||||||
| REVENUE | $ | 308 | 26,197 | |||||
| COST OF REVENUE | - | - | ||||||
| GROSS PROFIT | 308 | 26,197 | ||||||
| OPERATING EXPENSES | ||||||||
| General & Administrative | 819,001 | 888,106 | ||||||
| Total Operating Expenses | 819,001 | 888,106 | ||||||
| LOSS FROM OPERATIONS | (818,693 | ) | (861,910 | ) | ||||
| OTHER INCOME (EXPENSE) | ||||||||
| Interest and Other Income | 7,000 | 50,475 | ||||||
| Interest Expense | - | (200 | ) | |||||
| Total Other Income (Expense) | 7,000 | 50,275 | ||||||
| LOSS BEFORE INCOME TAXES | (811,693 | ) | (811,635 | ) | ||||
| BENEFIT (PROVISION) FOR INCOME TAXES | - | - | ||||||
| NET LOSS | $ | (811,693 | ) | $ | (811,635 | ) | ||
| BASIC AND DILUTED LOSS PER SHARE | $ | ) | $ | ) | ||||
| WEIGHTED AVERAGE SHARES | ||||||||
The accompanying notes are an integral part of the audited consolidated financial statements.
| 23 |
SPINE INJURY SOLUTIONS, INC.BITECH TECHNOLOGIES CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’EQUITY (DEFICIT)
For the Years EndedAs of December 31, 2021 and 20202023
Common Stock | Additional Paid-In | Accumulated | Total Stockholders’ | |||||||||||||||||
Shares | Amount | Capital | Deficit | Equity (Deficit) | ||||||||||||||||
Balances, December 31, 2019 | 20,240,882 | $ | 20,241 | $ | 19,869,511 | $ | (19,840,788 | ) | $ | 48,964 | ||||||||||
Net loss | - | - | - | (297,394 | ) | (297,394 | ) | |||||||||||||
Balances, December 31, 2020 | 20,240,882 | 20,241 | 19,869,511 | (20,138,182 | ) | (248,430 | ) | |||||||||||||
Net loss | - | - | - | (140,365 | ) | (140,365 | ) | |||||||||||||
Balances, December 31, 2021 | 20,240,882 | $ | 20,241 | $ | 19,869,511 | $ | (20,278,547 | ) | $ | (388,795 | ) | |||||||||
| Common Stock | Preferred Stock | Additional Paid-In | Accumulated | Total Stockholders’ Equity | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | (Deficit) | ||||||||||||||||||||||
| Balances, January 21, 2021 (inception) | 20,240,882 | 20,241 | - | - | 1,265,559 | - | 1,285,800 | |||||||||||||||||||||
| Net loss | - | - | - |
- | - | (284,959 | ) | (284,959 | ) | |||||||||||||||||||
| Balances, December 31, 2021 | 20,240,882 | $ | 20,241 | - | - | $ | 1,265,559 | $ | (284,959 | ) | $ | 1,000,841 | ||||||||||||||||
| Recapitalization | - | - | - | (139,880 | ) | - | (139,880 | ) | ||||||||||||||||||||
| Restricted Stock Awards | 7,983,720 | 7,984 | - | - | (7,984 | ) | - | - | ||||||||||||||||||||
| Series A Preferred Shares issued in Share Exchange | - | - | 9,000,000 | 9,000 | - | - | 9,000 | |||||||||||||||||||||
| Shares issued upon conversion of Series A Preferred Stock | 485,781,168 | 485,781 | (9,000,000 | ) | (9,000 | ) | (485,781 | ) | - | (9,000 | ) | |||||||||||||||||
| Sale of Common Stock | 1,500,000 | 1,500 | - | - | 148,500 | - | 150,000 | |||||||||||||||||||||
| Net loss | - | - | - | - | - | (811,635 | ) | (811,635 | ) | |||||||||||||||||||
| Balances, December 31, 2022 | 515,505,770 | $ | 515,506 | - | $ | - | $ | 780,414 | $ | (1,096,594 | ) | $ | 199,326 | |||||||||||||||
| Beginning balances, value | 515,505,770 | $ | 515,506 | - | $ | - | $ | 780,414 | $ | (1,096,594 | ) | $ | 199,326 | |||||||||||||||
| Common Stock for Services | 1,674,506 | 1,674 |
| 115,781 | 117,455 | |||||||||||||||||||||||
| Stock Option Compensation | 180,600 | 180,600 | ||||||||||||||||||||||||||
| Restricted Stock Awards | 1,500,000 | 1,500 | 28,500 | 30,000 | ||||||||||||||||||||||||
| Cancelled Stock from SuperGreen | (51,507,749 | ) | (51,508 | ) | 51,508 | - | ||||||||||||||||||||||
| Sale of Common Stock | 17,291,667 | 17,292 | 395,208 | 412,500 | ||||||||||||||||||||||||
| Net loss | - | - | - | - | - | (811,693 | ) | (811,693 | ) | |||||||||||||||||||
| Balances, December 31, 2023 | 484,464,194 | $ | 484,464 | - | $ | - | $ | 1,552,011 | $ | (1,908,287 | ) | $ | 128,188 | |||||||||||||||
| Ending balances, value | 484,464,194 | $ | 484,464 | - | $ | - | $ | 1,552,011 | $ | (1,908,287 | ) | $ | 128,188 | |||||||||||||||
The accompanying notes are an integral part of the audited consolidated financial statements.
| 24 |
SPINE INJURY SOLUTIONS, INC.BITECH TECHNOLOGIES CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31, 2021 and 2020AUDITED
2021 | 2020 | |||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (140,365 | ) | $ | (297,394 | ) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
Depreciation expense | 10,959 | 14,420 | ||||||
Gain on transfer of accounts receivable to extinguish debt | (33,946 | ) | - | |||||
Gain from forgiveness of debt | - | (64,097 | ) | |||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable, net | 204,981 | 779,679 | ||||||
Prepaid expenses | - | 12,314 | ||||||
Accounts payable and accrued liabilities | (5,793 | ) | 2,049 | |||||
Net cash provided by operating activities | 35,836 | 446,971 | ||||||
Cash flows from financing activities: | ||||||||
Repayments on notes payable | (61,054 | ) | (110,000 | ) | ||||
Proceeds from Paycheck Protection Program loan | - | 64,097 | ||||||
Payments on line of credit | - | (470,000 | ) | |||||
Net cash used in financing activities | (61,054 | ) | (515,903 | ) | ||||
Net decrease in cash and cash equivalents | (25,218 | ) | (68,932 | ) | ||||
Cash and cash equivalents at beginning of year | 41,655 | 110,587 | ||||||
Cash and cash equivalents at end of year | $ | 16,437 | $ | 41,655 | ||||
Supplementary disclosure of cash flow information: | ||||||||
Interest paid | $ | 26,859 | $ | 26,646 | ||||
Income taxes | $ | - | $ | - | ||||
Non-cash investing and financing activities: | ||||||||
Exchange of note payable to a bank for note payable to shareholder | $ | - | $ | 610,000 | ||||
| YEAR ENDED DECEMBER 31, | ||||||||
| 2023 | 2022 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (811,693 | ) | $ | (811,635 | ) | ||
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
| Impairment Write-off – Exclusive License | - | 35,000 | ||||||
| Common Stock issued for services | 147,455 | |||||||
| Stock Option Compensation | 180,600 | |||||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid expenses and other assets | 2,000 | (13,000 | ) | |||||
| Accounts payable and accrued liabilities | 23,832 | 291 | ||||||
| Net cash provided by (used in) operating activities | (457,806 | ) | (789,344 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Cash from Sale of Common Stock, net | 412,500 | 150,000 | ||||||
| Recapitalization | - | (139,880 | ) | |||||
| Net cash provided by (used in) financing activities | 412,500 | 10,120 | ||||||
| Net increase (decrease) in cash and cash equivalents | (45,306 | ) | (779,224 | ) | ||||
| Cash and cash equivalents at beginning of period | 197,723 | 976,947 | ||||||
| Cash and cash equivalents at end of period | $ | 152,417 | $ | 197,723 | ||||
| Supplemental disclosure of non-cash Investing and Financing | ||||||||
| Activities: | ||||||||
| Supplementary disclosure of cash flow information: | ||||||||
| Interest paid | $ | - | $ | 200 | ||||
| Taxes paid | $ | - | $ | - | ||||
The accompanying notes are an integral part of the audited consolidated financial statements.
| 25 |
BITECH TECHNOLOGIES CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. DESCRIPTION OF BUSINESS
Spine Injury Solutions Inc.Bitech Technologies Corporation (the “Company”, “we” or “us”) was incorporated under the laws of Delaware on March 4, 1998. We changed ourIn connection with the Company’s planned expansion of its business following the completion of the acquisition of Bitech Mining Corporation, a Wyoming corporation (“Bitech Mining”), it filed a Certificate of Amendment to its Certificate of Incorporation, as amended (the “Certificate of Amendment”) with the Secretary of State of the State of Delaware on April 29, 2022 to change its corporate name to Bitech Technologies Corporation.
We have refocused our business development plans as we seek to position ourselves as a global technology solution enabler dedicated to providing a suite of green energy solutions with plans to develop Battery Energy Storage System (BESS) projects, commercial and residential renewable energy solutions, enterprise utility services, public service engagements, and other renewable energy initiatives. We plan to pursue these innovative energy technologies through research and development, technology integration, planned acquisitions of other early stage green energy development projects and plans to become a grid-balancing operator using BESS solutions and applying new green technologies as a technology enabler in the green energy sector. Our team has identified two highly competitive battery energy storage suppliers who have expressed interest in establishing partnerships with us, as we seek to integrate their products into projects that we identify, including grid-balancing BESS projects we plan to pursue following the Business Combination with Bridgelink discussed below. In addition, we are seeking business partnerships with defensible technology innovators and renewable energy providers to facilitate investments, provide new market entries toward emerging-growth regions and implement innovative, scalable energy system solutions with technological focuses on smart grid, Home Energy Management System (HEMS), Building Energy Management System (BEMS), City Energy Management System (CEMS), energy storage, and EV infrastructure.
The Company acquired Bitech Mining on March 31, 2022 (the “Closing Date”) through a share exchange pursuant to a Share Exchange Agreement (the “Share Exchange Agreement”) by and among the Company, Bitech Mining, each of Bitech Mining’s shareholders (each, a “Seller” and collectively, the “Sellers”), and Benjamin Tran, solely in his capacity as Sellers’ Representative (“Sellers’ Representative”). The transaction contemplated by the Share Exchange Agreement is hereinafter referred to as the “Share Exchange”). The Share Exchange Agreement provides that the Company will acquire from the Sellers, an aggregate of shares of Bitech Mining’s Common Stock, par value $ per share, representing % of the issued and outstanding shares of Bitech Mining (collectively, the “Bitech Mining Shares”). In consideration of the Bitech Mining Shares, the Company issued to the Sellers an aggregate of shares of the Company’s newly authorized Series A Convertible Preferred Stock, par value $ per share (the “Series A Preferred Stock”). Each Bitech Mining Share shall be entitled to receive shares of Series A Preferred Stock. Each share of Series A Preferred Stock shall automatically convert into 53.975685 shares (an aggregate of approximately 485,781,300) of the Company’s Common Stock (the “Company Common Stock”) upon filing of an amendment to its Certificate of Incorporation increasing the number of the Company’s authorized common stock so that there are a sufficient number of shares of Company Common Stock authorized but unissued to permit a full conversion of all the Series A Preferred Stock. Effective as of June 27, 2022, the Series A Preferred Stock automatically converted into shares of Company Common Stock following the June 27, 2022 filing of an amendment to its Certificate of Incorporation increasing the number of the Company’s authorized common stock to shares. Upon conversion of the Series A Preferred Stock, the Sellers held, in the aggregate, approximately % of the issued and outstanding shares of Company capital stock on a fully diluted basis.
The Share Exchange was treated as a recapitalization and reverse acquisition for financial reporting purposes, and Bitech Mining is considered the acquirer for accounting purposes. As a result of the Share Exchange and the change in our business and operations, a discussion of the past financial results of our predecessor, Spine Injury Solutions Inc. on October 1, 2015., is not pertinent, and under applicable accounting principles, the historical financial results of Bitech Mining, the accounting acquirer, prior to the Share Exchange are considered our historical financial results.
We are actively pursuing a merger or similar transaction with a private company where it becomes the controlling company. We find thisPrior to be the best course of action for our stockholders. Further,March 31, 2022, we have been in negotiations with a certain third-party candidate since December 2021. We are presently negotiating terms of a proposed share exchange agreement with the candidate, under which its shareholders would exchange their shares for shares of our stock. Although we do not presently have a binding agreement with this company or its shareholders, it is possible that a definitive agreement for the proposed transaction could be agreed to and consummatedwere engaged in the imminent future. There is no assurance that such transaction will be completed, or if completed, that the terms will be favorable to us.
From 2009 to 2018, we operated as a technology, marketing, billing,business of owning, developing and collection company facilitating diagnostic services for patients who have sustained spine injuries resulting from traumatic accidents. We delivered turnkey solutions to spine surgeons, orthopedic surgeons and other healthcare providers for necessary and appropriate treatment of musculo-skeletal spine injuries resulting from automobile and work-related accidents. Through our affiliate system, we facilitated spine surgeons, orthopedic surgeons and other healthcare providers to provide reasonable, necessary, and appropriate treatments to patients with musculo-skeletal spine injuries. We assisted the centers that provide the spine diagnostic injections and treatment and pay the doctors a fee for the medical procedures they performed. After a patient was billed for the procedures performed by the affiliated doctor, we took control of the patients’ unpaid bill and oversee collection. In most instances, the patient was a plaintiff in an accident case, where the patient was represented by an attorney. Typically, the defendant (and/or the insurance company of the defendant) in the accident case would pay the patient’s bill upon settlement or final judgment of the accident case. The payment to us was made through the attorney of the patient. In most cases, it was required that we agree to the settlement price and the patient must sign off on the settlement. Once we were paid, the patient’s attorney would receive payment for his or her legal fee.
During the fourth quarter of 2018, the decision was made to discontinue our involvement in future medical procedures due to our cash position, and we were not involved in any procedures in 2021 or 2020 and have no plans to do so in the future. However, we continue to actively pursue the collection of previously funded procedures. Without additional funding, there is no guarantee that we can continue as a going concern.
We own a device and process by which a video recording system known asleasing the Quad Video Halo video recording system (“QVH”) is used to record medical procedures. The QVH system can simultaneously capture views and machine images, thus providing a recordprocedures including the collection of internal and external views of a recorded procedure. The QVH system has been refined and improved over the years. The first- and second-generation systems required post-procedure file transfers, synchronizing and editing. This involved considerable software and time for a videographeraccounts receivables related to produce a complete video. The latest generation of the QVH referred to as NextGen 2.0 completely eliminates all of the issues associated with prior QVH approaches. The new varifocal lens cameras allow ceiling placement which eliminates the impact of room clutter and fluoroscope movement. The system server automatically synchronizes and renders the final videos, thus eliminating all backend processing.
We lease QVH units to customers who pay us monthly lease payments. Presently, the majority of our total revenues are derived from these lease payments. Our wholly-owned subsidiary, Quad Video Halo, Inc. holds certain company assets affiliated with the QVH units.
NOTE 2. GOING CONCERN CONSIDERATIONS
Since our inception in 1998, until commencement of ourpreviously provided spine injury diagnostic operations in August, 2009,services (collectively, the “QVH Business”). On June 30, 2022, we sold the assets related to the QVH Business.
NOTE 2. CRITICAL ACCOUNTING POLICIES
The following are summarized accounting policies considered to be critical by our management:
| 26 |
Going Concern
Since our inception, our expenses substantially exceeded our revenue, resulting in continuing losses and an accumulated deficit of $20,278,547approximately $2 million as of December 31, 2021.2023. Presently, we are trying to limit all operating expenses as much as possible. If in the future we decide to increase our service development, marketing efforts and/or brand building activities, we will need to increase our operating expenses and our general and administrative functions to support such growth in operations. No such growth in operations is presently planned. We are also actively seeking a private company with which to enter into a strategic business transaction, including without limitation a merger; however, we cannot predict the ultimate outcome of our efforts. Our continued existence is dependent upon our ability to successfully merge with a financially viable company, or our ability to obtain additional capital from borrowing and/or selling securities, as needed, to fund our operations. There is no assurance that additional capital can be obtained or that it can be obtained on terms that are favorable to us and our existing stockholders. Any expectation of future profitability is likely dependent upon our ability to successfully merge with another company, of which there can be no assurances.
During the fourth quarter of 2018, the decision was made to discontinue our involvement in future medical procedures due to our cash position, which also hampered our ability to pay back existing debt to a current director and shareholder (see Note 6—Notes Payable). We were not involved in any procedures in 20212023 and have no plans to do so in the future. The previous service revenues earned has resulted in longer settlement times, which has created a slowdown in cash collections.
As part of our efforts to enter into a merger or similar transaction with a private company where it becomes the controlling company, we have been in negotiations with a certain third-party candidate since December 2021. We are presently negotiating terms of a proposed share exchange agreement with the candidate, under which its shareholders would exchange their shares for shares of our stock. Although we do not presently have a binding agreement with this company or its shareholders, it is possible that a definitive agreement for the proposed transaction could be agreed to and consummated in the imminent future. There is no assurance that such transaction will be completed, or if completed, that the terms will be favorable to us.
NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Consolidation
The accompanying consolidated financial statements include the accounts of Spine Injury Solutions, Inc.Bitech Technologies Corporation. and its wholly owned subsidiary, Quad Video Halo, Inc. All material intercompany transactions have been eliminated upon consolidation.
Basis of Accounting
Our consolidated financial statements are prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).Revenue recognition
Use of Estimates
The preparation of the consolidated financial statements in conformity with U.S. GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of our consolidated financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions and could have a material effect on the reported amounts of our financial position and results of operations.
Revenue Recognition
The Company’s accounting for revenues is governed by two accounting standards. The Company’s service and product sales revenue are accounted for underCompany adopted Accounting Standards Codification (“ASC”) 606. ASC 606, Revenue from Contracts with Customers. Additionally,Customers, establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied.
We have assessed the impact of the guidance by performing the following five steps analysis:
Step 1: Identify the contract
Step 2: Identify the performance obligations
Step 3: Determine the transaction price
Step 4: Allocate the transaction price
Step 5: Recognize revenue
Substantially all of the Company’s QVH rental revenuesrevenue is derived from leasing equipment. The Company considers a signed lease agreement to be a contract with a customer. Contracts with customers are accountedconsidered to be short-term when the time between signed agreements and satisfaction of the performance obligations is equal to or less than one year, and virtually all of the Company’s contracts are short-term. The Company recognizes revenue when services are provided to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for under ASC 842, Leases.
Service Revenue Recognition
Historically, our net revenues included service revenues that arose from thethose services. The Company typically satisfies its performance obligations in contracts with customers upon delivery of medical diagnostic services providedthe services. The Company does not have any contract assets since we have an unconditional right to patients by medical professionalsconsideration when we have satisfied its performance obligation and payment from customers is not contingent on a future event. Generally, payment is due from customers immediately at spine injury diagnostic centers, only after the patients completedinvoice date, and signed required medicalthe contracts do not have significant financing components nor variable consideration. There are no returns and financial paperwork. Service revenues were recordedthere is no allowances. All of the Company’s contracts have a single performance obligation satisfied at a point in time and the transaction price is stated in the contract, usually as net patient service revenuesa price per unit. All estimates are based on variable consideration elements further described below and in Note 4. While we did collect 100%the Company’s historical experience, complete satisfaction of the accounts on certain patients, our historical collection rate was used to estimateperformance obligation, and the variable consideration expected and is reflected in the carrying balance of accounts receivable and service revenue recorded. A discount rate of 48%, based on payment history, was used to reduce revenue to 52% of Current Procedural Terminology code rates (“CPT” codes are numbers assigned to every task and service a medical practitioner may provide to a patient including medical, surgical and diagnostic services. CPT codes are developed, maintained and copyrighted by the American Medical Association). Patients were billedCompany’s best judgment at the normal billing amount, based on national averages, for a particular CPT code procedure duringtime the year ended December 31, 2018 and prior years. We recorded no revenue related to medical diagnostic services provided during the years ended December 31, 2021 and 2020 and revenue presented represents adjustments of variable consideration received for procedures performed in years prior to 2019.estimate is made.
| 27 |
Service revenue and corresponding accounts receivable are recognized by reference to “net revenue” and “accounts receivable, net” which is defined as gross amounts billed using CPT codes (“gross revenue”) less account discounts that are expected to result when individual cases are ultimately settled, which is the variable consideration associated with this revenue stream.
Lease Revenues
Rental revenues from operating leases are recognized on a straight-line basis over the term of the lease. Rental billings for periods extending beyond period end are recorded as deferred income and are recognized in the period earned. For the QVH leases, rental related services revenues for support, maintenance and video processing, delivery, and installation are lease related because the payments are considered minimum lease payments that are an integral part of the negotiated lease agreement with the customer. These revenues are recognized on a straight-line basis over the term of the lease. As of the year ended December 31, 2021, the Company’s leases consisted solely of operating leases.
Fair Value of Financial Instruments
Cash, accounts receivable, accounts payable, and accrued liabilities and notes payable as reflected in the consolidated financial statements, approximates fair value. Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.
Cash and Cash Equivalents
Cash and cash equivalents consist of liquid investments with original maturities of three months or less. Cash equivalents are stated at cost, which approximates fair value. We maintain cash and cash equivalents in banks which at times may exceed federally insured limits. We have not experienced any losses on these deposits.
Property and Equipment
Property and equipment are carried at cost. When retired or otherwise disposed of, the related carrying cost and accumulated depreciation are removed from the respective accounts, and the net difference, less any amount realized from the disposition, is recorded in operations. Maintenance and repairs are charged to operating expenses as incurred. Costs of significant improvements and renewals are capitalized.
Property and equipment consist of computers and equipment and are depreciated over their estimated useful lives of three years, using the straight-line method.
Long-Lived Assets
We periodically review and evaluate long-lived assets when events and circumstances indicate that the carrying amount of these assets may not be recoverable. In performing our review for recoverability, we estimate the future cash flows expected to result from the use of such assets and its eventual disposition. If the sum of the expected undiscounted future operating cash flows is less than the carrying amount of the related assets, an impairment loss is recognized in the consolidated statements of operations. Measurement of the impairment loss is based on the excess of the carrying amount of such assets over the fair value calculated using discounted expected future cash flows.
Concentrations of Credit Risk
Assets that expose us to credit risk consist primarily of cash and accounts receivable. Our accounts receivable arise from a diversified customer base and, therefore, we believe the concentration of credit risk is minimal. We evaluate the creditworthiness of customers before any services are provided. We record a discount based on the nature of our business, collection trends, and an assessment of our ability to fully realize amounts billed for services. Based on our analysis we established anWe have no accounts receivable to warrant any allowance for discounts of $447,126 and $585,257 at December 31, 20212023 or December 31, 2022.
We account for the measurement and 2020, respectively.recognition of compensation expense for all share-based payment awards made to employees and directors, including employee stock options, based on estimated fair values. Under authoritative guidance issued by the Financial Accounting Standards Board (“FASB”), companies are required to estimate the fair value or calculated value of share-based payment awards on the date of grant using an option-pricing model. The value of awards that are ultimately expected to vest is recognized as expense over the requisite service periods in our consolidated statements of operations. We use the Black-Scholes Option Pricing Model to determine the fair-value of stock-based awards. During the years ended December 31, 2023 and 2022, we did not recognize any compensation expense during those periods.
Income Taxes
We account for income taxes in accordance with the liability method. Under the liability method, deferred assets and liabilities are recognized based upon anticipated future tax consequences attributable to differences between financial statement carrying amounts of assets and liabilities and their respective tax basis. We establish a valuation allowance to the extent that it is more likely than not that deferred tax assets will not be utilized against future taxable income.
| 28 |
Uncertain Tax Positions
Accounting Standards Codification “ASC” Topic 740-10-25 defines the minimum threshold a tax position is required to meet before being recognized in the financial statements as “more likely than not” (i.e., a likelihood of occurrence greater than fifty percent). Under ASC Topic 740-10-25, the recognition threshold is met when an entity concludes that a tax position, based solely on its technical merits, is more likely than not to be sustained upon examination by the relevant taxing authority. Those tax positions failing to qualify for initial recognition are recognized in the first interim period in which they meet the more likely than not standard or are resolved through negotiation or litigation with the taxing authority, or upon expiration of the statute of limitations. De-recognition of a tax position that was previously recognized occurs when an entity subsequently determines that a tax position no longer meets the more likely than not threshold of being sustained.
We are subject to ongoing tax exposures, examinations and assessments in various jurisdictions. Accordingly, we may incur additional tax expense based upon the outcomes of such matters. When applicable, we will adjust tax expense to reflect our ongoing assessments of such matters which require judgment and can materially increase or decrease our effective rate as well as impact operating results.
Under ASC Topic 740-10-25, only the portion of the liability that is expected to be paid within one year is classified as a current liability. As a result, liabilities expected to be resolved without the payment of cash (e.g. resolution due to the expiration of the statute of limitations) or are not expected to be paid within one year are not classified as current. Estimated interest and penalties are recognized as income tax expense and tax credits as a reduction in income tax expense. For the yearsyear ended December 31, 2021 and 2020,2023, we recognized no estimated interest or penalties as income tax expense.
Legal Costs and Contingencies
In the normal course of business, we incur costs to hire and retain external legal counsel to advise us on regulatory, litigation and other matters. We expense these costs as the related services are received.
If a loss is considered probable and the amount can be reasonably estimated, we recognize an expense for the estimated loss. If we have the potential to recover a portion of the estimated loss from a third party, we make a separate assessment of recoverability and reduce the estimated loss if recovery is also deemed probable.
Basic and diluted net loss per common share is presented in accordance with ASC Topic 260, “Earnings per Share,” for all periods presented. During the years ended December 31, 20212023 and 2020,2022, common stock equivalents from outstanding stock options and warrants have been excluded from the calculation of the diluted loss per share in the consolidated statements of operations, because all such securities were anti-dilutive. The net loss per share is calculated by dividing the net loss by the weighted average number of shares outstanding during the periods.
The following were potentially outstanding dilutive securities during the years ended December 31, 2023 and 2022, instruments:
December 31, 2023 - Potentially Dilutive Options
December 31, 2022 – Potentially Dilutive Options
Recent Accounting Pronouncements Not Yet Adopted
In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU No. 2016-13 eliminates the probable initial recognition threshold in current generally accepted accounting principles (“GAAP”) and, instead, requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. In addition, ASU No. 2016-13 amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. In November 2019, the FASB issued ASU No. 2019-10 to amend the effective date for entities that had not yet adopted ASU No. 2016-13. Accordingly, the provisions of ASU No. 2016-13 are effective for annual periods beginning after December 15, 2022, with early application permitted in annual periods beginning after December 15, 2018. The amendments of ASU No. 2016-13 should be applied through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. Management is currently evaluating the future impact of ASU No. 2016-13 on the Company’s consolidated financial position, results of operations and disclosures.
| 29 |
NOTE 4. ACCOUNTS RECEIVABLE3. STOCKHOLDERS’ EQUITY
Accounts receivable arose from patients billed by the healthcare providers basedThe total number of authorized shares of our common stock, par value $ per share, was shares and increased on CPT codes as described in Note 1. Our customers’ patients who received medical services at diagnostic centers, were typically patients involved in auto accidents or work injuries. Patients completed and signed medical and financial paperwork, which included an acknowledgement of each patient’s responsibility for payment for the services provided. Additionally, the paperwork generally included an assignment of benefits. The timing of collection of receivables varies depending on patient sources of payment. Historical experience, through 2018, demonstrated that the collection period for individual cases may extend for two years or more.
Our credit policy has been established based upon extensive experience by management in the industry and has been determinedJune 27, 2022 to ensure that collectability is reasonably assured. Payment for services are primarily made to us by a third party and the credit policy includes terms of net 240 days for collections; however, collections occur upon settlement or judgment of cases. shares. As of December 31, 2023, there were common shares issued and outstanding.
On January 19, 2021, our stockholders approved the filing of an amendment to our certificate of incorporation authorizing shares of preferred stock with a par value of $ per share. Such amendment was filed on January 20, 2021.
On March 30, 2022, the Secretary of State of Delaware acknowledged the Company’s filing of a Certificate of Designations of Preferences and 2020,Rights of Series A Convertible Preferred Stock (the “Certificate of Designations”) with the Delaware Secretary of State creating a series of shares of Series A Preferred Stock (the “Series A Preferred Stock”). On March 31, 2022, we determined an allowanceissued shares of Series A Preferred Stock in exchange for uncollectable accounts shares of $447,126Bitech Mining’s Common Stock, par value $ per share, representing % of the issued and $585,257, respectively was needed for those customer accounts whose collections appear doubtful.outstanding shares of Bitech Mining. On June 27, 2022 the shares of Series A Convertible Preferred Stock issued as of March 31, 2022 automatically converted to shares of common stock.
In November 2021,On April 19, 2022, the Company transferred certain accounts receivableissued shares of its restricted Common Stock to an individual as compensation for future services at a fair value price on the date of issuance of $ per share. The shares vest % on each April 18 commencing on April 18, 2023 so long as the individual is providing services to the Company or one of its subsidiaries.
On April 14, 2022, the Company issued shares of its restricted Common Stock to an individual as compensation for future services at a fair value price on the date of issuance of $ per share. shares vest on April 13, 2023 and shares vest on April 13, 2024, April 13, 2025, and April 13, 2026 so long as the individual is providing services to the Company or one of its subsidiaries.
Effective as of July 8, 2022, the Financial Industry Regulatory Authority, Inc. (“FINRA”) confirmed that it had received the necessary documentation to process the Company’s request to change its name and trading symbol previously disclosed in its Form 8-K filed with a gross balance of $84,865the Securities and a carrying value of $0 to SPIN Collections LLC, an entity owned and controlled by Peter Dalrymple, a directorExchange Commission on May 2, 2022. The Company’s ticker symbol on the OTCQB tier of the Company. In exchange, Mr. Dalrymple reduced the amount the Company owed him under a promissory note (see Note 6. Notes Payable) by $33,946. OTC Markets Group. Inc. was changed to “BTTC” on July 8, 2022.
The Company recognized a gain on transferissued unregistered shares of accounts receivable to extinguish debt in the amount of $33,946 which is included in other income in the accompanying consolidated statements of operations.
NOTE 5. PROPERTY AND EQUIPMENT
Property and equipment consisted of the followingits Common Stock valued at December 31, 2021 and 2020:
2021 | 2020 | |||||||
Computers and equipment | $ | 45,587 | $ | 68,518 | ||||
Less: accumulated depreciation | (45,587 | ) | (57,559 | ) | ||||
| $ | - | $ | 10,959 | |||||
Depreciation expense totaling $10,959 and $14,420 was charged to operating, general and administrative expenses$117,455 during the years ended December 31, 2021 and 2020, respectively. During the year ended December 31, 2021,2023 as payment for services provided to the Company.
The Company wrote-off fully depreciated assets with a costissued of $22,931 due to them no longer being used in operations.
NOTE 6. NOTES PAYABLE
Term Loan
On September 3, 2014, we entered into a $2,000,000 revolving line of credit agreement with Wells Fargo Bank, N.A. Outstanding principal on the line of credit bore interestrestricted securities awards valued at the thirty-day London Interbank Offered Rate (“LIBOR”) plus 2%. The line of credit agreement was amended at various dates until a final amendment on September 30, 2019 converted the line of credit into a one-year term loan precluding any additional draws but retaining all other terms. The line of credit and term loan were guaranteed by Peter L. Dalrymple, a member of our board of directors, and was secured by a first lien interest in certain of his assets.
On the August 31, 2020 maturity date of the term loan with Wells Fargo Bank, N.A., Mr. Dalrymple paid off in full the $610,000 remaining principal balance.
During$30,000 during the year ended December 31, 2020,2023 as payment for director compensation services provided to the Company.
During April, May and June, 2023, the Company recorded $15,090 in interest expense relatedsold unregistered shares of its Common Stock to the Wells Fargo term loan.
Notes payable
Upon Peter L. Dalrymple paying off the principal balance of the Wells Fargo term loan on our behalf on August 31, 2020, we issued Mr. Dalrymple a $610,000 one-year secured promissory note. The secured promissory note bears interest of 6% per year with monthly payments of interest only due until maturity, when all unpaid interest and principal is due. This note is collateralized by all our accounts receivable and a pledge of the stock of our wholly owned subsidiary, Quad Video Halo, Inc. In November 2021, the Company transferred certain accounts receivable to an entity owned by Mr. Dalrymplesix private investors in exchange for a reduction in$225,000 ($ per share).
During August 2023 the Company sold unregistered shares of its Common Stock to one private investor for $20,000 ($ per share)
During October, November, and December 2023 the Company sold unregistered shares of its Common Stock to three private investor for $167,500 ($-$ per share)
NOTE 4. INCENTIVE AND NON-STATUTORY STOCK OPTION PLAN
As of December 31, 2023 and December 31, 2022, there were and options outstanding, balancerespectively.
We have granted non-qualified stock options to employees and contractors. All non-qualified options are generally issued with an exercise price no less than the fair value of the note incommon stock on the amountdate of $33,946 (see Note 4. Accounts Receivable for additional discussion).the grant as determined by our Board of Directors. Options may be exercised up to ten years following the date of the grant, with vesting schedules determined by us upon grant. Vesting schedules vary by grant, with some fully vesting immediately upon grant to others that ratably vest over a period of time up to five years. Standard vested options may be exercised up to three months following date of termination of the relationship unless alternate terms are specified at grant. The secured promissory note balance was $395,000fair values of options are determined using the Black-Scholes option-pricing model. The estimated fair value of options is recognized as expense on the straight-line basis over the options’ vesting periods. At December 31, 2023, we had approximately $ unrecognized stock-based compensation.
| 30 |
SCHEDULE OF STOCK OPTION TRANSACTIONS
| 2023 | 2022 | |||||||||||||||
| Shares | Weighted- Average Exercise Price | Shares | Weighted- Average Exercise Price | |||||||||||||
| Outstanding at Beginning of Year | 5,000,000 | $ | 0.07 | - | $ | - | ||||||||||
| Granted | 42,000,000 | 0.03 | 5,000,000 | 0.07 | ||||||||||||
| Exercised | - | - | - | - | ||||||||||||
| Forfeited or Cancelled | (5,000,000 | ) | 0.03 | - | - | |||||||||||
| Outstanding at End of Year | 42,000,000 | 0.04 | 5,000,000 | 0.07 | ||||||||||||
| Options Exercisable at Year-End | 17,250,000 | 0.03 | - | - | ||||||||||||
| Weighted-Average Fair Value of Options Granted During the Year | $ | 0.01 | $ | 0.02 | ||||||||||||
SCHEDULE OF STOCK OPTIONS OUTSTANDING AND EXERCISABLE
| Options Outstanding | Options Exercisable | |||||||||||||||||||||
| Range of Exercise Prices | Number Outstanding at December 31, 2023 | Weighted- Average Remaining Contractual Life | Weighted- Average Exercise Price | Number Exercisable at December 31, 2023 | Weighted- Average Exercise Price | |||||||||||||||||
| $ | - $ | 42,000,000 | 9.2 | $ | 0.04 | 17,250,000 | $ | 0.03 | ||||||||||||||
NOTE 5. ACQUISITION OF BITECH MINING
On March 31, 2022, the Company acquired shares of Bitech Mining’s Common Stock in exchange for shares of its Series A Preferred Stock representing% of the note has been extendedissued and outstanding shares of Bitech Mining.
The Share Exchange was treated as a recapitalization and reverse acquisition for financial reporting purposes, and Bitech Mining is considered the acquirer for accounting purposes. As a result of the Share Exchange and the change in our business and operations, a discussion of the past financial results of our predecessor, Spine Injury Solutions Inc., is not pertinent, and under applicable accounting principles, the historical financial results of Bitech Mining, the accounting acquirer, prior to June 30, 2022.the Share Exchange are considered our historical financial results.
During the years ended December 31, 2021 and 2020,The Combination of the Company recorded $26,859 and $11,058, respectively, in interest expense onBitech Mining is considered a business acquisition and the Dalrymple note, representing all interest due through that date.
Paycheck Protection Program – SBA Loan
On April 22, 2020 we receivedmethod used to present the transaction is the acquisition method. The acquisition method is a $64,097 Small Business Administration (“SBA”) loan undermethod of accounting for a merger of two businesses. The tangible assets and liabilities and operations of the federal Paycheck Protection Program (“PPP”), a program designed to help businesses keepacquired business were combined at their workforce employed duringmarket value of the COVID 19 pandemic. The PPP was established under the Coronavirus Aid, Relief, and Economic Security ("CARES") Act signed into law in March of 2020. The PPP provides a direct incentive for small businesses to keep their workers on the payroll and loans granted under the program are forgivable if employment levels are maintained for specified periods and proceeds are used for payroll and other approved expenses (rent, mortgage interest, utilities, and certain other expenses) provided for under the program. Loans provided under the program are uncollateralized, include no guarantees, bear interest of 1% per year and mature two years fromacquisition date, which is the date when the acquirer gains control over the acquired company.
The following table summarizes the consideration paid for Bitech Mining and the fair value amounts of receipt. Forassets acquired and liabilities assumed recognized at the reasons discussed throughout this report, we believe current economic uncertainty related to the COVID 19 pandemic and our inability to obtain financing through other means made the loan necessary to support our ongoing operations. We applied for forgiveness of our loan in 2020 and on December 31, 2020 the entire balance of the loan was forgiven and recognized in other income as a gain on forgiveness of debt in our consolidated statements of operations.acquisition date:
SCHEDULE OF FAIR VALUE OF ASSETS AND LIABILITIES
| Purchase price | $ | 1,113,679 | ||
| Cash | $ | 1,150,163 | ||
| Total assets: | $ | 1,185,163 | ||
| Less: liabilities assumed | $ | (71,484 | ) | |
| Net assets acquired | $ | 1,113,679 | ||
| Purchase price in excess of net assets acquired | $ | 0 |
| 31 |
NOTE 7. STOCKHOLDERS’ EQUITY
Common Stock
During the years ended December 31, 2021 and 2020, we did not issue any common stock.
Stock Options
We recognize compensation expense related to stock options in accordance with the ASC 718, Compensation - Stock Compensation. Under ASC 718 we measured stock-based compensation expense for stock options granted, based on weighted average fair values calculated using the Black Scholes option pricing model. We issued no stock options during the years ended December 31, 2021 and 2020. At December 31, 2020, all options are fully vested and all compensation expense related to stock option awards has been recognized. During 2021, all remaining options expired.
Details of stock option activity for the years ended December 31, 2021 and 2020 is as follows:
Weighted- | ||||||||||||||||
Average | Aggregate | |||||||||||||||
Shares | Weighted | Remaining | Intrinsic | |||||||||||||
Underlying | Average | Contractual | Value | |||||||||||||
Description | Options | Exercise Price | Term (Years) | (In-the-Money) | ||||||||||||
Outstanding at December 31, 2019 | 20,000 | $ | 0.40 | 1.5 | - | |||||||||||
Options expired in 2020 | - | - | - | - | ||||||||||||
Outstanding at December 31, 2020 | 20,000 | 0.40 | 0.5 | - | ||||||||||||
Options expired in 2021 | (20,000 | ) | - | - | - | |||||||||||
Outstanding at December 31, 2021 | - | $ | - | - | - | |||||||||||
NOTE 8. 6. RELATED PARTY TRANSACTIONS
We currently maintain ourUp until March 31, 2022, the Company maintained its executive offices at 5151 Mitchelldale A2, Houston, Texas 77092. This office space encompassesencompassed approximately 200 square feet and iswas provided to us at the rental rate of $1,000$1,000 per month under a month-to-month agreement with Northshore Orthopedics, Assoc. (“NSO”), a company owned by William Donovan, M.D., our former director and Chief Executive Officer. The rent includesincluded the use of the telephone system, computer server, and copy machines. We discontinued paying rent in December 2021 due to a lack of funds, and since thenuntil March 31, 2022 when this lease was cancelled NSO has provided usthe Company this office space rent free.
As further described in Note 6, during 2020 we borrowed $610,000 from Peter Dalrymple,NOTE 7 INCOME TAX
U.S. Federal Corporate Income Tax
Temporary differences between financial statement carrying amounts and the tax basis of assets and liabilities and tax credit and operating loss carryforward that create deferred tax assets and liabilities are as follows:
SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES
| 2023 | 2022 | |||||||
| Tax Operating Loss Carryforward - USA | $ | 1,569,000 | $ | 1,090,000 | ||||
| Other | - | - | ||||||
| Valuation Allowance - USA | (1,569,000 | ) | (1,090,000 | ) | ||||
| Deferred Tax Assets, Net | $ | - | $ | - | ||||
The valuation allowance increased approximately $0.5 million, primarily as a directorresult of the Company, under a secured promissory note. increased net operating losses of our U.S.- based segment.
As further discussed in Note 4, the Company transferred certain accounts receivable with a carrying amount of $0 to an entity owned and controlled by Mr. Dalrymple in exchange for a reduction in the amount due under the promissory note in the amount of $33,946. The outstanding balance of the note was $395,000 at December 31, 2021.
NOTE 9. INCOME TAXES
We have no current or deferred provision for income taxes for the years ended December 31, 2021 or 2020, because2023, we have established a full valuation allowance against ourhad federal net operating loss carryforwards generated from recurring net losses as described below.
Deferred tax assets consist of the following at December 31, 2021 and 2020:
2021 | 2020 | |||||||
Net operating loss carryforwards | $ | 2,499,675 | $ | 2,357,583 | ||||
Allowance for doubtful accounts | 93,896 | 122,903 | ||||||
Less: valuation allowance | (2,593,571 | ) | (2,480,486 | ) | ||||
| $ | - | $ | - | |||||
Due to uncertainties surrounding our ability to generate future taxable income to realize these assets, a full valuation has been established to offset the net deferredfor income tax asset. Based on management’s assessment, utilizing an effective combined tax rate for federal and state taxespurposes of approximately 21%, we$1.5 million. We also have determined that it is not currently more likely than not that we will realize our deferred income tax assets of approximately $2,594,000 and $2,480,000 attributable predominantly to the future utilization of the approximate $11,903,000 and $11,625,000 in eligibleCalifornia net operating loss carryforwards for income tax purposes of approximately $ 1.5 million which expire after twenty years from when it occurred.
NOTE 8. SUBSEQUENT EVENTS
As previously disclosed in the Company’s Current Report on Form 8-K filed with the SEC on January 12, 2024, on January 8, 2024, the Company, Bridgelink Development, LLC, a Delaware limited liability company (“Bridgelink”), a solar and energy storage development company based in Fort Worth, Texas and C & C Johnson Holdings LLC, the allowancesole member of Bridgelink (the “Member”) entered into a Letter Agreement (the “Letter Agreement”) for doubtful accounts, as of December 31, 2021 and 2020, respectively. We will continuea business combination (the “Business Combination”). Pursuant to review this valuation allowance and make adjustments as appropriate. The net operating loss carryforwards will beginthe Letter Agreement, the Company plans to expire in varying amountsacquire from year 2021 to 2039, with those net operating losses generated during the year ended December 31, 2021 set to never expire based on the provisionsMember all of the Tax Reform Act.
Current income tax laws limit the amountissued and outstanding membership interests of loss availablean entity to be offset against future taxable income when a substantial changeformed by Bridgelink (the “Target”) in ownership occurs. Therefore, amounts available to offset future taxable income may be limited under Section 382 of the Internal Revenue Code.
Following is a reconciliation of the benefitexchange for federal income taxes as reported in the accompanying consolidated statements of operations, to the expected amount at the 21% federal statutory rate:
2021 | 2020 | |||||||||||||||
Percentage | Percentage | |||||||||||||||
of Pre-Tax | of Pre-Tax | |||||||||||||||
Amount | Income | Amount | Income | |||||||||||||
Benefit for income tax at federal statutory rate | $ | 29,477 | 21.0 | % | $ | 62,453 | 21.0 | % | ||||||||
Change in available NOLs | - | - | % | - | - | % | ||||||||||
Change in valuation allowance | (29,477 | ) | (21.0 | )% | (62,453 | ) | (21.0 | )% | ||||||||
Total | $ | - | - | % | $ | - | - | % | ||||||||
NOTE 10. LEASE REVENUES
The Company’s QVH unit rentals are governed by agreements that detail the lease terms and conditions. The determination of whether these contracts with customers contain a lease generally does not require significant judgement. The Company accounts for these rentals as operating leases. These leases do not include material amounts of variable payments and the Company has made the accounting policy election to exclude all taxes assessed by a governmental authority. The Company provides an option of the lessee to purchase the rented equipment upon the termination of the lease for the as then fair market value; however, the Company has not generated material revenue from sales of equipment under such options. Initial lease terms vary in length based upon customer needs and generally range from 12 to 36 months. Customers have the option to keep equipment on rent beyond the initial lease term on a month-to-month basis. All restricted shares of the Company’s rental products have long useful lives relativeCommon Stock (the “Exchange Shares”). Prior to closing of the transaction (the “Closing” or “Closing Date”), Bridgelink will transfer to Target Bridgelink’s assets and development service agreements (collectively, “Development Projects”) consisting of: (1) certain rights to fully develop a portfolio of renewable energy development assets, which includes certain battery energy storage system (“BESS”) projects with a cumulative storage capacity of at least 1.965 gigawatts (GW) located in the United States and along with certain term sheets and agreements with capital providers, whether or not finalized (collectively, the “BESS Development Projects”) and (2) certain rights to fully develop a portfolio of renewable energy development assets, which includes certain solar development projects with a cumulative output of at least 3.840 gigawatts (GW) located in the United States, along with certain term sheets and agreements with capital providers that Bridgelink has negotiated, whether or not finalized (collectively, the “Solar Development Projects”). In addition, on the Closing Date, Bridgelink will enter into an agreement with BTTC whereby Bridgelink will agree to refer to the typical rental termCompany any future projects involving BESS that Bridgelink is presented with an opportunity to work on.
| 32 |
Completion of the Business Combination is contingent upon the parties entering into a definitive agreement which will contain certain conditions to close, including a commitment for a capital investment or other financing transaction of not less than $50,000,000 (the “Capital Infusion”) prior to closing. In addition, the definitive agreement is expected to include additional covenants, representations and warranties that are customary of business combination agreements of this type including entering into the following agreements:
Project Management Services Agreement pursuant to which all aspects of the development and operation of the BESS Development Projects will be overseen by the service provider. The fees payable to the service provider will be as follows:
● BESS Development Projects. an aggregate amount equal to $0.035 per Watt (“W”) for each BESS Development Project payable as follows: (i) $0.005 per W shall be paid in cash upon the Company’s listing of its Common Stock on the NASDAQ stock market and the closing of a financing transaction of a BESS Development Project (“Project Financing”); and (ii) $0.03 per W shall be paid in cash upon attainment of Ready to Build (“RTB”) status per each BESS Development Project with the original investment typically recoveredclosing of Project Financing related to such project to enable the Company to commence construction of said BESS Development Project (collectively (i) and (ii), the (“BESS Development Fees”).
● Unique Solar Development Projects. $0.01 per W in approximately five years. The rental products are typically rented for a majoritycash upon attainment of RTB status per each development project, paid within ten (10) days of Company being paid, to enable the Company to commence construction of said Development Project;
● Other Development Projects. within ten (10) days of Company being paid, the higher of either (a) 50% of the time ownedgross margin or (b) $0.02 per W in cash upon attainment of RTB status or project acceptance per each development project (“Other Development Fees”); and a significant portion of
● Solar Development Projects. If the original investment is recovered when sold from inventory. The Company’s lease agreements do not contain residual value guarantees or restrictive covenants.
The initial terms ofSolar Development Projects are developed by the Company, an aggregate amount equal to $0.035 per Watt (W) for each Solar Development Project payable as follows: (i) $0.005 per W shall be paid in cash upon the Company’s two outstanding lease contracts endedlisting of its Common Stock on the NASDAQ stock market and the closing of a financing transaction of a BESS Development Project (“Project Financing”); and (ii) $0.03 per W shall be paid in 2021,cash upon attainment of Ready to Build (“RTB”) status per each Solar Development Project with the closing of Project Financing related to such project to enable the Company to commence construction of said Solar Development Project (collectively (i) and those two customers are currently renting(ii), the QVH units on a month-to-month basis.(“Solar Development Fees”).
Included in propertyDuring February and equipment, net, asMarch 2023, the Company sold unregistered shares of December 31, 2021 and 2020 is equipment availableits Common Stock to five private accredited investors for rent in the net amount of $0 and $10,959 respectively.$256,000 ($ per share).
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
Not applicable.
ITEM 9A. CONTROLS AND PROCEDURES
William Donovan, M.D.,Benjamin B. Tran, our President and Chief Executive Officer, is our principal executive officer and John Bergeron,Robert J. Brilon, our Chief Financial Officer, is our principal financial officer.
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of December 31, 2021.2023. Based on this evaluation, our principal executive officer and our principal financial officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective and adequately designed to ensure that the information required to be disclosed by us in the reports we submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms and that such information was accumulated and communicated to our principal executive officer and principal financial officer, in a manner that allowed for timely decisions regarding disclosure.
| 33 |
Management’sManagement’s Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States. Our internal control over financial reporting includes those policies and procedures that:
(i) | pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; |
| |
| (ii) | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements; and |
| |
| (iii) | provide reasonable assurance regarding prevention or timely detection of unauthorized transactions. |
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate.
In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control – Integrated Framework and Internal Control over Financial Reporting – Guidance for Smaller Public Companies.
Our management evaluated the effectiveness of our internal control over financial reporting as of December 31, 2021.2023. Based on this evaluation, our management concluded that, as of December 31, 2021,2023, we maintained effective internal control over financial reporting.
This annual report does not include an attestation report of the company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report.
Changes in internal control over financial reporting
There were no changes in our internal control over financial reporting during the year ended December 31, 20212023 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.
Our management, including our principal executive officer and principal financial officer, does not expect that its disclosure controls or internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. In addition, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake.
Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management’s override of the control. The design of any systems of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of these inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. Individual persons perform multiple tasks which normally would be allocated to separate persons and therefore extra diligence must be exercised during the period these tasks are combined.
| 34 |
ITEM 9B. OTHER INFORMATION
None.
ITEMItem 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not Applicable.None.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Our directors and executive officers are as follows:
Name | Age | Position(s) and Office(s) | ||
|
| Chief Executive Officer, President and Chairman | ||
|
| Chief Financial Officer and Director | ||
|
| Director | ||
|
|
|
William F. Donovan, M.D.Benjamin B. Tran, PhD – Dr. DonovanTran currently serves as Chairman and Chief Executive Officer of the company. He has been the corporate strategist, investor, and financial partner in the formation and growth of several emerging growth technology companies. Benjamin specializes in cross-border M&A, private equity, merchant banking advisory and technology marketing. He also serves as Managing Partner of Cleantek Venture Capital, a cleantech-focused private equity advisory firm since January 2021 to present. Benjamin, at times, serves as senior advisor to several publicly traded companies. From February 2021 to April 2022, Benjamin has served as our Chief Executive Officer sinceSenior Capital Market Advisor for Iveda Solutions, Inc. (NASDAQ: IVDA), an AI and IoT technology company to assist with financing and uplisting to Nasdaq. From August 2017 to January 20092019, he served as Advisory Chairman of Vemanti Group, Inc. (OTCQB: VMNT), an innovative fintech company to assist in M&A and international business development. From November 2018 to April 2021, Benjamin also co-founded and served as our President since May 2010. Hechairman of CBMD, Inc., a privately held physician-based CBD science company specializing in pain management. Benjamin served as CFO of privately held Stock Navigators, a leading software and educational training institution for technical traders from June 2018 to June 2019. Since 2014 to present, Benjamin has served as onemanaging partner of our directors since April 2008. He isUnited System Capital, a Board Certified Orthopedic Surgeon,private equity advisory firm in Newport Beach, California. Prior to United System Capital, Benjamin was managing partner of an Asia-based joint venture with Brean Murray Carret & Co., a New York-based investment bank that has transacted over 100 IPOs/APOs/SPACs and raised over $4B for the U.S. and Asian companies. Benjamin spearheaded the organization to formulate a multi-functional investment banking service for emerging growth companies via globalization strategies. Benjamin has been involved withseasoned international consultant providing corporate development and interim senior management to small and medium sized enterprises in Silicon Valley and the Asia Pacific region. He also served as a board director, CFO, corporate strategist, and executive advisor for several distressed companies, managing turn-around situations. As a Silicon Valley high-tech veteran, Benjamin brings over 20 years of diversified experience including mergers and acquisitions, venture fundingmanagement, strategic marketing, and international business development. Prior to his investment and corporate advisory career, Benjamin worked for technology leaders including Micron Technology, Fujitsu Microelectronics, Mitsubishi Electric America, Philips Semiconductors, holding various senior technical and marketing management for over 25 years. He was the co-founder of DRCA (later known as I.O.I) and became Chairman of this company that wentpositions. Benjamin received a Ph.D. in Business Administration, a Masters in Business Administration from the pink sheets, to NASDAQUniversity of Phoenix, Masters of Science and then to the AMEX before being acquired by a subsidiaryBachelor of the Bass Family. He was a founder of “I Need A Doc,” later changed to IP2M that was acquired by Dialog Group, a publicly traded company. He was the Chairman of House of Brussels, an international chocolate company and president of ChocoMed, a specialized confectionery company combining Nutraceuticals with chocolate bars. Dr. Donovan has been practicing as a physicianScience degrees in Houston, Texas since 1975. Throughout his career as a physician, he has been involved in projects with both public and private enterprises. He received his Orthopedic training at NorthwesternElectrical Engineering from San Jose State University, in Chicago. He was a Major in the United States Air Force for 2 years at Wright Patterson Air Force base in Dayton, Ohio. He established Northshore Orthopedics, Assoc. in 1975 and continues in active practice in Houston, specializing in Orthopedic Surgery.California.
John Bergeron,Robert J. Brilon, CPA – Mr. BergeronBrilon has served as our Chief Financial Officer since October 20111, 2021 and was appointed as a director on April 14, 2022. He also has served as Chief Financial Officer for Iveda Solutions, Inc. (NASDAQ: IVDA) since December 2013. He was also Iveda’s President from February 2014 to July 2018 and Treasurer from December 2013 to July 2018 and was appointed Treasurer again on December 15, 2021. Mr. Brilon served as Iveda’s Executive Vice President of Business Development from December 2013 to February 2014 and as oneIveda’s interim Chief Financial Officer and Treasurer from December 2008 to August 2010. Mr. Brilon joined New Gen Management Services, Inc. in July 2017 as the CFO (subsequently becoming President and CFO of our directors sinceNew Gen in July 2010. From May 2008 through September 2014,2018). Mr. Brilon was the President, Chief Financial Officer, Corporate Secretary, and Director of both Vext Science, Inc and New Gen until he resigned in February 2020. Mr. Brilon served as Chief Financial Officer and Executive Vice President of Jolpeg Inc.Business Development of Brain State Technologies, a brainwave optimization software licensing and hardware company, from August 2010 to November 2013. From January 2010 to August 2010, Mr. Brilon served as Chief Financial Officer of MD Helicopters, a manufacturer of commercial and light military helicopters. Mr. Brilon also served as Chief Executive Officer, President, and Chief Financial Officer of InPlay Technologies (NASDAQ: NPLA), formerly, Duraswitch (NASDAQ: DSWT), a private firmcompany that consults on financial matters in service industries. From May 2002 until May 2008,licensed patented electronic switch technology and manufactured digital pen technology, from November 1998 to June 2007. Mr. BergeronBrilon served as DivisionalChief Financial Officer of Gietz Master Builders from 1997 to 1998, Corporate Controller of Able Manufacturing, a divisionRental Service Corp. (NYSE: RRR) from 1995 to 1996, Chief Financial Officer and Vice President of NCI Group, Inc, where his responsibilities included financial reporting, budgetingOperations of DataHand Systems, Inc. from 1993 to 1995, and Sarbanes-Oxley Act compliance. PriorChief Financial Officer of Go-Video (AMEX:VCR) from 1986 to that,1993. Mr. Bergeron worked as controller of different internet companies and as an accounting manager for several other private firms. He has also worked as an auditor for Arthur Andersen. Mr. Bergeron has more than thirty years’ experience in financial management and corporate development of manufacturing and service industry companies. He has extensive experience in financial reporting of public companies, risk management, business process re-engineering, structuring and implementing accounting procedures and internal control programs for Sarbanes-Oxley Act compliance. Mr. BergeronBrilon is a Certified Public Accountant. He receivedcertified public accountant and practiced with several leading accounting firms, including McGladrey Pullen, Ernst and Young and Deloitte and Touche. Mr. Brilon holds a Bachelor of Science degree in Business Administration in Accounting from Lamarthe University in 1979.of Iowa.
| 35 |
Jerry Bratton, J.D., MBA
Greg D. Trimarche, JD – Mr. BrattonTrimarche has served as one of our directors since July 2010.December 21, 2022. He has practiced law for over 30 years in the areas of environmental and energy law and a wide range of other governmental and regulatory fields, as well as finance, intellectual property, general commercial litigation, and strategic planning and risk avoidance. His work focuses on emerging companies in the renewable energy and cleantech industries where he identifies and evaluates early-stage companies seeking to go public, strategic acquisition targets, strategic partnership opportunities, and other investment opportunities in the energy sector. Greg’s experience also covers federal and state energy and environmental regulatory programs, as well as the various governmental incentive programs relating to the energy and utility industries. Greg has been of counsel to the law firm Cooksey Toolen Gage Duffy Woog since 2017 and prior to that has been engaged in the private practice of law since 1989. In 2010, Greg co-founded Sustain SoCal (formerly, CleanTech OC), the clean technology trade association for Orange County, California and served as its President and Chief Executive Officer from 2010 to 2015. In additions, Greg is a frequent speaker at cleantech industry conferences. Greg is a past member of the Board of Directors of OCTANe (https://octaneoc.org), the fundraising and networking organization for Orange County’s technology industries. Also, since 2015, he has been an officer and director of GST Factoring, Inc. (“GST”), a company formerly engaged in electronic payment processing services to law firms that represented student loan debtors. Greg earned a Bachelor of Arts in Political Science and Economics from the University of Kansas and a Juris Doctor from University of Kansas School of Law.
Key Employees
We employ certain individuals who, while not executive officers, make significant contributions to our business and operations and hold various positions within our subsidiaries.
Sid Sung. On January 2, 2004, we engaged Mr. Sid Sung as our Chief Innovation Officer (CIO). Mr. Sung will be spearheading Bitech’s Green Energy Technology Solutions division. In this role, he will be leading Bitech’s efforts to engineer scalable revenue opportunities towards the green energy transition. With a wealth of knowledge and initiatives in digital energy evolution strategies, Sid brings with him more than 30 years of experience in high-growth, relevant vertical markets like home automation, security products, energy management, Machine to Machine (M2M) technologies, industrial IoT (IIoT), smart cities, and broadband access technologies. With a strong background working with large telecommunications and emerging service providers, he has led numerous successful and high-profile technology projects. Sid is a champion of the IoT revolution and has been actively involved the smart energy and power sector for over a decade, identifying and widely implementing innovative integrated solutions. From 2020 to 2023, Sid served as President of Bratton Steel, L.P. since 2006Iveda Solutions (NASDAQ: IVDA) and previously with Bratton Steel, Inc. (its predecessor) since 1991. Bratton Steel isprior to that, from 2017 to 2020, President of People Power, Asia as well as VP of Product Management for People Power USA for US Independent Operation Utilities (IOUs) including FPL, PEPCO, Delmarva Power, BGE in the US, Origin in Australia, and Innogy in Germany. From 2014 to 2017, he was a structural steel fabricating company. As President, Mr. Bratton has grown the company from a startup toboard advisor for TwoWay Communications, focusing on developing and deploying solutions for IoT, M2M, smart cities/communities, and connected homes. In 2013, Sid co-founded Connected IO, a company that employs up to approximately 75 employees. He has significant experiencespecializing in overseeing sales, estimating, project managementM2M applications, and contracting. Mr. Bratton served as its COO until 2017 for Verizon’s Wireless M2M deployments. Prior to this role, he was Vice President ofat Lite-On Technology, where he managed IoT solutions for connected home and M2M for IIoT and played a crucial role in global utility smart grid trial programs with next-generation energy products, including multiple RF frequency gateways and sensors for European IOU Smart home application deployments. Sid was the Texas Structure Steel InstituteGeneral Manager for SMC Networks from 2007 to 2008.2010 where he oversaw Smart home deployment with Comcast, Time Warner (Spectrum today), and Rogers for the North American MSO Market. He achieved great success by delivering broadband-enabled applications (BBEA) for home security service providers such as 4Home (acquired by Motorola) and uControl (merged with iControl). During his tenure there, Sid successfully led a significant revenue growth from $20 million to $100 million. In 1994, Sid founded and for 13 years led Alpha Telecom, a company specializing in designing and manufacturing telecommunications equipment with a focus on ISDN CPE solutions. Through his strategic partnerships and innovative solutions, he established strong relationships with global telecommunications equipment manufacturing giants such as Alcatel-Lucent, Nortel and Siemens. Under Sid’s leadership, Alpha Telecom became a prominent player in the industry and achieved remarkable growth. Sid earned a BS in Atmospheric Science from National Taiwan University and a MSEE from the University of Alabama Huntsville.
Family Relationships
None.
| 36 |
Involvement in Certain Legal Proceedings
None of our directors, executive officers, significant employees or control persons has been involved in any legal proceeding listed in Item 401(f) of Regulation S-K in the past 10 years except as follows:
In August 2020, in connection with an action by the Bureau of Consumer Financial Protection (the “Bureau”) against GST, Mr. Trimarche and others, Mr. Trimarche consented to a permanent restraining order and ban on his participation in the debt-relief business, a ban on telemarketing consumer financial products or services, collecting payments from and providing assistance for consumers, use of consumer information, pay a $25,000 fine and cooperate with the Bureau in connection with its investigation and litigation related to this matter (the “Final Judgment”). Mr. Trimarche denied any wrong doing in this lawsuit and consented to the Financial Judgment to avoid the substantial costs involved in protracted litigation.
Officer and Board Qualifications
Our officers and board of directors are well qualified as leaders. In their prior positions they have gained experience in core management skills, such as strategic and financial planning, public company financial reporting, compliance, risk management, and leadership development. Our officers and directors also have experience serving on boards of directors and board committees of other public companies and private companies, and have an understanding of corporate governance practices and trends, which provides an understanding of different business processes, challenges, and strategies.
Number and Terms of Office of Officers and Directors
Our board of directors is also a membercomprised of three directors. Each director is elected at our annual meeting of stockholders and holds office for one year, or until his successor is elected and qualified. Our officers are elected by the board of directors and serve at the discretion of the American Instituteboard of Steel Construction. Mr. Brattondirectors, rather than for specific terms of office. Our board of directors is authorized to appoint persons to the offices set forth in our bylaws as it deems appropriate. Our bylaws provide that our officers may consist of a President, Vice Presidents, Secretary, Assistant Secretaries, Treasurer and such other offices as may be determined by the board of directors.
Committees of our Board of Directors
Our securities are not quoted on an exchange that has businessrequirements that a majority of our board members be independent and investment background in medical software, personal medical information records storage, RFID security products and energy ventures. Mr. Bratton is a licensed attorney in the Statewe are not currently otherwise subject to any law, rule or regulation requiring that all or any portion of Texas and previously served as an assistant general counsel in the construction industry. Mr. Bratton earned Juris Doctorate and Master of Business Administration degrees from Texas Tech University in 1977.
Peter L. Dalrymple – Mr. Dalrymple joined our board of directors include “independent” directors, nor are we required to establish or maintain an Audit Committee or other committee of our board of directors.
The board does not have standing audit, compensation or nominating committees. The board does not believe these committees are necessary based on the size of our company, the current levels of compensation to our corporate officers and the ownership by our executive officers and directors which gives them control over all matters submitted to a vote of our stockholders. The board will consider establishing audit, compensation and nominating committees and the appointment of independent directors at the appropriate time.
The entire board of directors participates in August 2014. Since July 2012, he has served as General Partnerthe consideration of LPD Investments Ltd.compensation issues and Manager of DLD Oil & Gas LLC. Prior to that, he was onedirector nominees. Candidates for director nominees are reviewed in the context of the co-founders and ownerscurrent composition of the Royal Purple Synthetic Lubricants Company, which atboard and our operating requirements and the timelong-term interests of its sale in 2012, was onestockholders. In conducting this assessment, the board of directors considers skills, diversity, age, and such other factors as it deems appropriate given the current needs of the largest synthetic lubricants companiesboard and our company, to maintain a balance of knowledge, experience and capability.
The board’s process for identifying and evaluating nominees for director, including nominees recommended by stockholders, will involve compiling names of potentially eligible candidates, conducting background and reference checks, conducting interviews with the candidate and others (as schedules permit), meeting to consider and approve the final candidates and, as appropriate, preparing an analysis with regard to particular recommended candidates.
| 37 |
Board Qualifications
We believe that each of the members of our board of directors has the experience, qualifications, attributes and skills that make him suitable to serve as our director, in North America. Whilelight of the nature of our operations. See above under the heading “Management” for a description of the education and experience of each director.
Mr. Tran’s specific qualifications, experience, skills and expertise include:
| ● | Core business skills, including financial and strategic planning; | |
| ● | Finance expertise; and | |
| ● | Operating and management experience. |
Mr. Trimarche specific qualifications, experience, skills and expertise include:
| ● | Core business skills, including financial and strategic planning; and | |
| ● | Legal and business acquisition experience. |
Mr. Brilon’s specific qualifications, experience, skills and expertise include:
| ● | Core business skills, including financial and strategic planning; | |
| ● | Finance and financial reporting expertise; and | |
| ● | Operating and management experience. |
We believe these qualifications bring a broad set of complementary experience to our board of directors’ discharge of its responsibilities.
Board Leadership Structure and Board’s Role in Risk Oversight
Our board is generally responsible for the oversight of corporate risk in its review and deliberations relating to our activities. Our principal source of risk falls into two categories, financial and product commercialization. The board oversees management of financial risks; and regularly reviews information regarding our cash position, liquidity and operations, as well as the risks associated with Royal Purple, he was in charge of Saleseach. The board regularly reviews plans, results and Marketing. After the company was soldpotential risks related to Calumet Specialty Products Partner, a New York Stock Exchange company, in July of 2012, Mr. Dalrymple became a very active investor in several companies. Heour business. The board is also expected to oversee risk management as it relates to our compensation plans, policies and practices for all employees including executives and directors, particularly whether our compensation programs may create incentives for our employees to take excessive or inappropriate risks which could have a trustee of Norwich University, from which he holds a Bachelor of Science Degree in Engineering Management. He previously served as a Lieutenant withmaterial adverse effect on the United States Army Corp. of Engineers.Company.
Delinquent Section 16(a) Reports
Section 16(a) of the Securities Exchange Act of 1934 requires our directors and executive officers, and persons who own beneficially more than ten percent of our common stock, to file reports of ownership and changes of ownership with the SEC. Based solely upon a review of Forms 3, 4 and 5 and amendments thereto filed electronically with the SEC during the fiscal year ended December 31, 2021,2023, we believe that the directors, executive officers, and greater than ten percent beneficial owners have complied with all applicable filing requirements during the fiscal year ended December 31, 2021.2023 and 2022 with the exception of the late filings by (i) Mr. Tran of one Form 4 filing reporting one transaction during 2023, one Form 4 reporting three transactions during 2022 and a Form 3 during 2022, (ii) Mr. Trimarche of a Form 3 during 2022, (iii) Mr. Brilon of one Form 4 reporting one transaction during 2022 and a Form 3 during 2022, (iv) Calvin Cao of one Form 4 reporting one transaction during 2022 and a Form 3 during 2022 and (v) Michael Cao of one Form 4 reporting two transactions during 2022 and a Form 3 during 2022.
Code of Ethics
We have adopted a code of ethics that applies to our directors, principal executive officers, principal financial officers, principal accounting officer or controller, and persons performing similar functions. The Code of Ethics for Directors and Executive Officers can be found on our website at spineinjurysolutions.com/corporate-governance/.https://bitech.tech/investors-relations. Further, we undertake to provide by mail to any person without charge, upon request, a copy of such code of ethics if we receive the request in writing by mail to: Spine Injury Solutions, Inc., P.O. Box 541566, Houston, Texas 77254-1566.Bitech Technologies Corporation, 895 Dove Street, Suite 300, Newport Beach, CA 92660.
Audit Committee
We maintain a separately-designated standing audit committee. The Audit Committee currently consists of Peter DalrympleRobert Brilon and Jerry Bratton.Greg Trimarche. Although the Charter of the Audit Committee provides for a majority of the Audit Committee to be independent, presently only Mr. BrattonTrimarche is independent.
| 38 |
Mr. BrattonBrilon is the Chairman of the Audit Committee, and the board of directors has determined that he is an audit committee financial expert as defined in Item 5(d)(5) of Regulation S-K. The primary purpose of the Audit Committee is to oversee our accounting and financial reporting processes and audits of our financial statements on behalf of the board of directors. The Audit Committee meets privately with our management and with our independent registered public accounting firm and evaluates the responses by our management both to the facts presented and to the judgments made by our outside independent registered public accounting firm.
ITEM 11. EXECUTIVE COMPENSATION
The following table provides summary information forsummarizes all compensation recorded by us in the past two fiscal years ending December 31, 2021 and 2020 concerning cash and non-cash compensation paid or accruedfor:
| ● | our principal executive officer or other individual acting in a similar capacity during the fiscal year ended December 31, 2023, | |
| ● | our two most highly compensated executive officers, other than our principal executive officers, who were serving as executive officers at December 31, 2021, and | |
| ● | up to two additional individuals for whom disclosure would have been provided but for the fact that the individual was not serving as an executive officer at December 31, 2021. |
For definitional purposes, these individuals are sometimes referred to or on behalf of certainas the “named executive officers (“named executive officers”).officers.”
2023 Summary Executive Compensation Table
| Name and Principal Position | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Nonqualified Deferred Compensation ($) | All Other Compensation ($) | Total ($) | ||||||||||||||||||||||||||||||||
| Benjamin Tran. | 2023 | 132,000 | - | - | - | - | - | - | - | 132,000- | ||||||||||||||||||||||||||||||
| CEO, President and Director | 2022 | 86,000 | - | - | - | - | - | - | - | 86,000 | ||||||||||||||||||||||||||||||
| Robert J. Brilon | 2023 | 19,000 | - | 33,179 | 51,643 | - | - | - | 103,822 | |||||||||||||||||||||||||||||||
| CFO and Director | 2022 | 16,500 | - | - | - | - | - | - | - | 16,500 | ||||||||||||||||||||||||||||||
Employment Agreements
During fiscal 2024, Mr. Tran will be paid a salary by the Company in the amount of $12,500 per month and Mr. Brilon will be paid a consulting fee at the approximate rate of $4,500 per quarter depending on the amount of time he devotes to providing services on behalf of the Company. There is no written agreement to pay Mr. Tran this compensation.
On April 19, 2022, the Company and Mr. Brilon entered into an Independent Contractor Agreement whereby Mr. Brilon (the “Independent Contractor Agreement”) agreed to serve as the Chief Financial Officer of the Company and shall have such duties and authorities consistent with such position as are customary for the position of chief financial officer of a company of the size and nature of the Company, and such other duties and authorities as shall be reasonably determined from time to time by the Board of Directors of the Company consistent with such position and to serve as an officer of any subsidiary of the Company as may be reasonably requested from time to time by the Board of Directors. In addition, Mr. Brilon agreed to serve as a member of the Company’s Board of Directors. The Independent Contractor Agreement may be terminated by either party on 15 days prior written notice without cause or five days after written notice in the event of a breach of the agreement by either party.
Mr. Brilon also signed a Proprietary Information and Inventions Agreement whereby he agreed that any proprietary information developed during the term of his service will be owned by the Company and that such information will be held in strict confidence and not disclosed to anyone outside the Company. In addition, Mr. Brilon agreed to, during the term of his service to the Company, refrain from engaging in or assisting anyone from engaging in any activity that is competitive with or similar to the business or proposed business of the Company and from soliciting any employees or consultants to the Company during the term of his engagement and thereafter for a period of one year from leaving or terminating their engagement with the Company.
As Compensation for Mr. Brilon’s service to the Company, the Company awarded him 4,635,720 shares of Restricted Common Stock which vested 1,158,930 shares on April 18, 2023 and 1,158,930 on each April 18 for the next 3 years so long as Mr. Brilon is providing services to the Company or one of its subsidiaries. The value of these awards will be recorded in the year vested.
| 39 |
Name and Principal Position | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Nonqualified Deferred Compensation ($) | All Other Compensation ($) | Total ($) | ||||||||||||||||||||||||||
William Donovan, M.D. | 2021 | $ | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||
CEO and President | 2020 | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||
John Bergeron | 2021 | 91,461 | - | - | - | - | - | - | 91,461 | |||||||||||||||||||||||||
CFO | 2020 | 97,789 | - | - | - | - | - | - | 97,789 | |||||||||||||||||||||||||
Employment AgreementsAs Compensation for Mr. Brilon’s service to the Company, the Company made the following awards to him:
| ● | On February 13, 2023 a grant of a nonstatutory stock option (the “Stock Option”) to purchase 5,000,000 shares of the Company’s Common Stock at an exercise price of $0.025 per share. The options subject to this grant vest 80% on the date of the grant, 10% on January 1, 2024 and 10% on January 1, 2025 so long as Mr. Brilon is providing services to the Company or one of its subsidiaries; provided, however, the vesting is subject to acceleration such that if Mr. Brilon is terminated from his role without cause (as defined in the Stock Option) the number of shares subject to the Stock Option in the year of termination shall vest plus the number of shares that would have vested in the following year. In the event Mr. Brilon’s service is terminated with cause, the number of shares subject to the Stock Option in the year of termination shall vest. The Stock Option may be exercised for the earlier of (1) ten years from grant date or (2) five (5) years after termination as a member of the Company’s board of directors. |
We do not have any employment agreements with any of our executive officers as of December 31, 2021.
| ● | On April 3, 2023 a grant of a nonstatutory stock option (the “Stock Option”) to purchase 5,000,000 shares of the Company’s Common Stock at an exercise price of $0.03 per share. The Stock Option vest 50% on the date of the grant and 50% on April 3, 2024 so long as the recipient of the award is providing services to the Company or one of its subsidiaries; provided, however, the vesting is subject to acceleration such that if the recipient is terminated from his role without cause (as defined in the Stock Option) the number of shares subject to the Stock Option in the year of termination shall vest plus the number of shares that would have vested in the following year. In the event the recipient’s service is terminated with cause, the number of shares subject to the Stock Option awarded to such recipient in the year of termination shall vest. The Stock Option may be exercised for the earlier of (1) ten years from grant date or (2) five (5) years after termination as a member of the Company’s board of directors. |
| ● | On November 27, 2023 an award of 500,000 shares of restricted common stock, of which 100% vests on December 31, 2023 so long as Mr. Brilon is providing services to the Company or one of its subsidiaries. |
Outstanding Equity Awards at Fiscal Year End
2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
The following table sets forth information with respect to the options outstanding by the Named Executive Officers held at fiscal year-end.
| Option Awards | Stock Awards | |||||||||||||||||||||||
| Name | Number of securities underlying unexercised options (#) exercisable | Number of securities underlying unexercised options (#) unexercisable | Option exercise price ($) | Option expiration date(1) | Number of shares that have not vested (#) | Market value of shares that have not vested ($)(2) | ||||||||||||||||||
| Benjamin Tran. | – | – | $ | – | – | – | $ | – | ||||||||||||||||
| CEO, President and Director | ||||||||||||||||||||||||
| – | – | |||||||||||||||||||||||
| Robert J. Brilon | 4,500,000 | 500,000 | $ | 0.025 | 2/13/2033 | (3) | 3,476,790 | $ | 208,607 | |||||||||||||||
| CFO and Director | 2,500,000 | 2,500,000 | $ | 0.030 | 4/3/2033 | (4) | – | – | ||||||||||||||||
| (1) | The expiration date of each option occurs on the earlier of (i) ten years after the date of grant of each option or (ii) five years after the termination as a member of the board of directors. |
| (2) | The market value was computed by multiplying the closing market price of common stock on December 31, 2023 ($0.06) by the number of restricted stock awards that have not vested. |
| 40 |
There are no equity awards outstanding at December 31, 2021.
| (3) | The unvested options vest on January 1, 2025 so long as Mr. Brilon is providing services to the Company or one of its subsidiaries; provided, however, the vesting is subject to acceleration such that if Mr. Brilon is terminated from his role without cause (as defined in the Stock Option) the number of shares subject to the Stock Option in the year of termination shall vest. In the event Mr. Brilon’s service is terminated with cause, the number of shares subject to the Stock Option in the year of termination shall vest. |
| (4) | The unvested options vest on April 3, 2024 so long as the recipient of the award is providing services to the Company or one of its subsidiaries; provided, however, the vesting is subject to acceleration such that if the recipient is terminated from his role without cause (as defined in the Stock Option). |
Compensation of Directors
The following table sets forth all compensation paid to or earned by each of our directors during fiscal year 2023, except for compensation with respect to Messrs. Tran and Brilon. Information with respect to the compensation of these directors is included above in the “Summary Compensation Table.” As our executive officers, none of these directors (other than as described above) received any compensation for service as a director during fiscal year 2023.
| Name | Fees Earned or Paid ($) | Stock Awards ($) | Option Awards (2) ($) | Non-Equity Incentive Plan Compensation ($) | Non-qualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) | |||||||||||||||||||||
Greg Trimarche Director(3) | — | 20,000 | 43,955 | — | — | — | — | |||||||||||||||||||||
Notes:
| (1) | Director cash compensation during the fiscal year ended December 31, 2023. |
| (2) | The amounts reported in the Stock Awards and the Option Awards columns reflect aggregate grant date fair value computed in accordance with ASC Topic 718, Compensation—Stock Compensation. These amounts reflect our calculation of the value of these awards at the grant date and do not necessarily correspond to the actual value that may ultimately be realized by the named executive officer. Assumptions used in the calculation of these amounts are included in the Notes to our audited consolidated financial statements for the fiscal year ended December 31, 2023, which are included elsewhere in this Annual Report. |
| (3) | Greg Trimarche. On December 21, 2022, the Company and Mr. Trimarche entered into an Independent Contractor Agreement (the “Independent Contractor Agreement”) whereby Mr. Trimarche agreed to serve as a member of the Company’s board of directors. The Independent Contractor Agreement may be terminated by either party on 15 days prior written notice without cause or five days after written notice in the event of a breach of the agreement by either party. On December 21, 2022, as Compensation for Mr. Trimarche’s service to the Company as a director as provided for in the Independent Contractor Agreement, the Company awarded him an option to purchase 5,000,000 shares of the Company’s Common Stock (the “Option Shares”) at an exercise price of $0.07 per share (the “Stock Option”). The Stock Option vests as to 20 % of the Option Shares on each December 21, beginning December 21, 2023, so long as Mr. Trimarche is providing services to the Company or one of its subsidiaries; provided, however, the vesting is subject to acceleration such that if Mr. Trimarche is terminated from his role without cause (as defined in the Stock Option) the number of shares subject to the Stock Option in the year of termination shall vest plus the number of shares that would have vested in the following year. In the event Mr. Trimarche’s service as a member of the Board is terminated with cause, the number of shares subject to the Stock Option in the year of termination shall vest. The value of the option awards will be recorded in the year that they vest. On April 3, 2023, as Compensation for Mr. Trimarche’s service to the Company as a director, the Company awarded him an option to purchase 5,000,000 shares of the Company’s Common Stock (the “Option Shares”) at an exercise price of $0.03 per share (the “Stock Option”). The Stock Option vests 50% of the Option Shares on date of grant April 3, 2023 and 50% April 3, 2024, so long as Mr. Trimarche is providing services to the Company or one of its subsidiaries; provided, however, the vesting is subject to acceleration such that if Mr. Trimarche is terminated from his role without cause (as defined in the Stock Option) the number of shares subject to the Stock Option in the year of termination shall vest plus the number of shares that would have vested in the following year. In the event Mr. Trimarche’s service as a member of the Board is terminated with cause, the number of shares subject to the Stock Option in the year of termination shall vest. The value of the option awards will be recorded in the year that they vest. On November 27, 2023, as Compensation for Mr. Trimarche’s service to the Company, the Company awarded him 1,000,000 shares of Restricted Common Stock in November 2023 which vested on December 31, 2023. The value of this award was $20,000 and is recorded in 2023. |
| 41 |
Currently, board members are not compensated for attending meetings nor do they receive any other form of compensation in their capacity as members of the board. We anticipate the board may revisit the issue of board member compensation at a later date.
Compensation Policies and Practices as they Relate to Risk Management
We attempt to make our compensation programs discretionary, balanced and focused on the long term. We believe goals and objectives of our compensation programs reflect a balanced mix of quantitative and qualitative performance measures to avoid excessive weight on a single performance measure. Our approach to compensation practices and policies applicable to employees and consultants is consistent with that followed for its executives. Based on these factors, we believe that our compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on us.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth information, as of March 16, 2022,December 31, 2023, concerning, except as indicated by the footnotes below, (i) each person whom we know beneficially owns more than 5% of our common stock, (ii) each of our directors, (iii) each of our named executive officers and (iv) all of our directors and executive officers as a group. We have determined beneficial ownership in accordance with the rules of the SEC. Except as indicated by the footnotes below, we believe, based on the information furnished to us, that the persons and entities named in the table below have sole voting and investment power with respect to all shares of common stock that they beneficially own, subject to applicable community property laws. Applicable percentage ownership is based on 20,240,882484,464,194 shares of common stock outstanding at March 16, 2022.December 31, 2023. In computing the number of shares of common stock beneficially owned by a person and the percentage ownership of that person, we deemed outstanding shares of common stock subject to stock options or warrants held by that person that are currently exercisable or exercisable within 60 days of March 16, 2022.December 31, 2023. We did not deem these shares outstanding, however, for the purpose of computing the percentage ownership of any other person. Unless otherwise noted, stock options and warrants referenced in the footnotes below are currently fully vested and exercisable.
Name and Address of Beneficial Owner | Number of Common Shares Beneficially Owned | Percent of Class | ||||||
William F. Donovan, M.D. (1) | 3,872,427 | (2) | 19.13 | % | ||||
John Bergeron (1) | 160,000 | (3) | 0.79 | % | ||||
Jerry Bratton (1) | 1,556,100 | (4) | 7.69 | % | ||||
Peter L. Dalrymple (1) | 2,987,276 | (5) | 14.76 | % | ||||
All directors and named executive officers as a group (4 persons) | 8,575,803 | 42.37 | % | |||||
| Name and Address of Beneficial Owner | Number of Common Shares Beneficially Owned | Percent of Class | ||||||
| Benjamin B. Tran (1) | 146,445,031 | (2) | 30.2 | % | ||||
| Robert J. Brilon (1) | 13,423,414 | (3) | 2.7 | % | ||||
| Gregory D. Trimarche (1) | 2,000,000 | (4) | * | % | ||||
| All directors and named executive officers as a group (3 persons) | 161,858,445 | 32.9 | % | |||||
| 5% Shareholders | ||||||||
| Michael H. Cao (6) | 180,277,121 | (5) | 37.2 | % | ||||
| Total 5% Shareholders | 180,277,121 | 37.2 | % | |||||
| Less than 1%, |
| (1) | The named individual is one of our executive officers or directors. His address is c/o |
| |
| (2) | Includes |
| 42 |
(3) | Includes |
| |
| (4) | Includes |
| (5) | Includes the following: (i) 51,507,749 shares of common stock held by |
|
|
| (6) | On December 15, 2022 resigned as a member of |
Securities Authorized for Issuance under Equity Compensation Plans
None.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS; AND DIRECTOR INDEPENDENCE
On September 3, 2014, we entered into a $2,000,000 revolving lineRelated Party Transactions
A related party transaction includes any transaction or proposed transaction in which:
| ● | we are or will be a participant; | |
| ● | the aggregate amount involved exceeds $120,000 in any fiscal year; and | |
| ● | any related party has or will have a direct or indirect material interest. |
Related parties include any person who is or was (since the beginning of credit agreement with Wells Fargo Bank, N.A. Outstanding principal on the linelast fiscal year, even if such person does not presently serve in that role) our executive officer or director, any shareholder owning more than 5% of credit bore interest at the thirty-day London Interbank Offered Rate (“LIBOR”) plus 2%. The lineany class of credit agreement was amended at various dates until a final amendment on September 30, 2019 converted the line of credit into a one-year term loan precluding any additional draws but retaining all other terms. The line of credit and term loan were guaranteed by Peter L. Dalrymple, aour voting securities or an immediate family member of any such person.
Any potential related party transaction that requires approval will be reviewed and overseen by our board of directors, and was secured by a first lien interestthe board of directors will consider such factors as it deems appropriate to determine whether to approve, ratify or disapprove the related party transaction. The board of directors may approve the related party transaction only if it determines in certain of his assets.
On the August 31, 2020 maturity dategood faith that, under all of the term loan with Wells Fargo Bank, N.A., Mr. Dalrymple paid offcircumstances, the transaction is in full the entire $610,000 remaining principal balance.
Upon Peter L. Dalrymple paying off the principal balancebest interests of the Wells Fargo term loan onus and our behalf on August 31, 2020, we issued Mr. Dalrymple a $610,000 one-year secured promissory note. The secured promissory note bears interest of 6% per year with monthly payments of interest only due until maturity, when all unpaid interest and principal is due. This note is collateralized by all our accounts receivable and a pledge of the stock of our wholly owned subsidiary, Quad Video Halo, Inc. The secured promissory note balance was $395,000 at December 31, 2021.shareholders.
We transferred to SPIN Collections LLC (an entity owned and controlled by Mr. Dalrymple) certain accounts receivableThere were no related party transactions that the Company owns, which accounts receivable have a gross balance of $84,865 and a carrying value of $0 in consideration of Mr. Dalrymple agreeingwas required to reduce the balance of his promissory note by $33,946. The company recognized $33,946 as other income. The maturity date of the note has been extended to June 30, 2022.disclose under this item.
During the year ended December 31, 2021, the Company recorded $27,357 in interest expense on the Dalrymple note, representing all interest due through that date.
Director Independence
We currently have one independent director on our board, Jerry Bratton.Gregory D. Trimarche. The definition of “independent” used herein is arbitrarily based on the independence standards of The NASDAQ Stock Market LLC. The board performed a review to determine the independence of Jerry BrattonGregory D. Trimarche and made a subjective determination as to each of these directors that no transactions, relationships or arrangements exist that, in the opinion of the board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director of Spine Injury Solutions, Inc.the Company. In making these determinations, the board reviewed information provided by these directors with regard to each individual’s business and personal activities as they may relate to us and our management.
| 43 |
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The following table sets forth the fees paid or accrued by us for the audit and other services provided or to be provided by our principal independent accountants during the years ended December 31, 20212023 and 2020.2022.
2021 | 2020 | |||||||
Audit Fees(1) | $ | 54,000 | $ | 53,000 | ||||
Audit Related Fees(2) | - | - | ||||||
Tax Fees(3) | - | - | ||||||
Total Fees | $ | 54,000 | $ | 53,000 | ||||
| 2023 | 2022 | |||||||
| Audit Fees(1) | $ | 37,500 | $ | 34,500 | ||||
| Audit Related Fees(2) | - | - | ||||||
| Tax Fees(3) | - | - | ||||||
| Total Fees | $ | 37,500 | $ | 34,500 | ||||
(1) | Audit Fees: This category represents the aggregate fees billed for professional services rendered by the principal independent accountant for the audit of our annual financial statements and review of financial statements included in our Form 10-Q and Form 10-K and services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for the fiscal years. |
| |
| (2) | Audit Related Fees: This category consists of the aggregate fees billed for assurance and related services by the principal independent accountant that are reasonably related to the performance of the audit or review of our financial statements and are not reported under “Audit Fees.” |
| |
| (3) | Tax Fees: This category consists of the aggregate fees billed for professional services rendered by the principal independent accountant for tax compliance, tax advice, and tax planning. |
Pre-Approval of Audit and Non-Audit Services
All above audit services, audit-related services and tax services, for the fiscal years ended December 31, 20212023 and 2020,2022, were pre-approved by our Audit Committee, which concluded that the provision of such services was compatible with the maintenance of that firm’s independence in the conduct of its auditing functions. The Audit Committee’s outside auditor independence policy provides for pre-approval of all services performed by the outside auditors.
| 44 |
PART IV
ITEM 15. EXHIBITS
| 45 |
| 46 |
| 21.1 | Subsidiaries (Incorporated by reference to Exhibit 21.1 of the Company’s Form 10-K filed on March 31, 2023). | |
| 31.1* | Certification of principal executive officer required by Rule 13a – 14(1) or Rule 15d – 14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| ||
| ||
| ||
101.INS |
| |
101.SCH |
| |
101.CAL |
| |
101.DEF |
| |
101.LAB |
| |
101.PRE |
|
| * | Filed or furnished herewith. | |
| ^ | Certain confidential information has been excluded from this exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed. | |
* Incorporated by reference from our previous filings with the SEC
ITEM 16. FORM 10-K SUMMARY
None.
| 47 |
None.
SIGNATURES
SIGNATURES
In accordance with the requirements of Section 13 of 15(d) of the Exchange Act, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on March 16, 2022.31, 2024.
| ||
/s/ | ||
By: | Benjamin B. Tran | |
Chief Executive Officer | ||
Pursuant to the requirements of the Exchange Act, this report has been signed below by the following persons in the capacities and on the dates indicated:
Signature | Title | Date | ||
/s/ | March | |||
| Chief Executive Officer (Principal Executive Officer), President and Director | |||
/s/ | March | |||
| Chief Financial Officer (Principal Financial and Accounting Officer) and Director | |||
/s/ | March | |||
| Director | |||
| ||||
|
|
|
| 48 |