Introduction
We are a provider of next-generation solar energy solutions
to underrepresented and/or growing market segments. To date, we announced the first-ever construction of a solar greenhouse incorporating
proprietary greenhouse technology which uses customized red greenhouse glass and seamless solar panels. The Company is concurrently
operating in multiple markets and is prepared for conducting business in several industry-friendly countries, states, and regions
including California, Nevada, Arizona, Washington, New York, New Jersey, Massachusetts, New Mexico, Colorado, Hawaii, and Canada.
Our business office is located at 16620 Marquez Ave Pacific Palisades, CA 90272.
History
The Company was formed in Wyoming in 2004
and was initially engaged in acquiring, developing, operating and selling real estate on Long Island, in New York State. In 2005,
the Company acquired a 20,000 square foot office building which we then renovated for use as medical offices. We started to rent
space in the building in 2006. In 2008, after the Company sold its interest in the medical office building, we explored additional
real estate projects and entered into a contract to purchase property to develop in Bay Shore, New York. On April 30, 2020, the
Company acquired Eagle Oil Company, a Wyoming corporation from Eagle Environmental Technologies Ltd., resulting in Eagle Oil becoming
a wholly-owned subsidiary of the Company. Eagle Oil was subsequently merged into the Company and the Company changed its name
to Green Stream Holdings Inc.
Business Overview
The Company operates as a holding company
of its wholly owned subsidiary, Green Stream Finance, Inc., a Wyoming corporation founded in 2016. Green Stream Finance, Inc. has
its offices in Malibu, California, and New York. The Company is focused providing access to solar and renewable energy to energy
consumers. The Company is concurrently operating in multiple markets and is prepared for conducting business in several industry-friendly
countries, states, and regions including California, Nevada, Arizona, Washington, New York, New Jersey, Massachusetts, New Mexico,
Colorado, Hawaii, and Canada.
Green Stream Finance, Inc., is a provider
of community solar solutions to underrepresented and/or growing market segments to homeowners, landowners, commercial building
owners in the United States. Community Solar is a collection of solar panels in a publicly shared space that generates electricity
from the sun. These panels are placed near homes and neighborhoods where they can provide maximum benefit to people who normally
can’t use solar power. However, most solar developments deliver that renewable energy exclusively to people in the immediate
area who have bought into the program. Green Stream works with property owners to develop Community Solar by providing financing
and teaming with experts in the installation and management of such solar facilities.
The Company has partnered with selective
world-class designers and manufacturers of solar power solutions such as the famed architect Anthony Morali and Renewable Energy
Development LLC (“RED”), a leading expert in solar infrastructure design.
We endeavor to make the move to solar energy
simple for our customers by managing and executing the process with our sales, installation and managing teams. Our key advantage
is that we don’t sell solar panels, we sell energy solutions to our clients and oversee the permits, management matters,
and installation process. We work with a group of contractors who design, procure, permit, install, and interconnect a suitable
solar energy solution to the utility grid, simplifying the installation of Community Solar. We provide a comprehensive workmanship
warranty on each fully operational system. Although we have engaged third-party manufacturers for production and distribution logistics
and to provide services to the home building and roofing industries, we remain to be the party who communicates with the customers
throughout the entire period of services of our energy solutions.
The Company’s strategy to increase
sales will be to offer fundamentally unique solar power products, including solar greenhouses designed by RED, and to introduce
a highly customizable and personalized approach to after-sales customer service through a unique type of contractual relationship
with its customers.
During the next six months it is the Company’s
plan to:
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Raise capital to begin installing Community Solar projects.
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Initiate aggressive online and offline marketing campaigns to build our brand, market awareness, and recognition.
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Increase sales via increased advertising and marketing campaigns.
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Identify attractive financing options for customers. We will refer our customers to a variety of options for financing their solar energy systems including home improvement loans, equipment leases and power purchase agreements and will continue our research for the best solutions for the customers.
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Hire additional key employees to help strengthen the Company.
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We plan to work with (i) private homeowners,
(ii) local roofing companies, (iii) solar installation companies, (iv) custom homebuilders, (v) mass-market homebuilders and (vi)
and commercial building multi-unit residential owners. We are currently working with commercial building and property owners in
New York and New Jersey.
Description of Products and Service
Green Stream endeavors to provide solar
energy solutions to underrepresented and/or growing market segments that seek renewable energy solutions but don’t have direct
access to them. We seek to do this through offering solutions in Community Solar and with Solar Greenhouses, the next evolution
of the greenhouse.
Solar Greenhouses
A critical component to the Company’s
mission is the Company’s next-generation solar greenhouses. To date, we announced the first-ever construction of a solar
greenhouse incorporating proprietary greenhouse technology which uses customized red greenhouse glass and seamless solar panels.
Such greenhouses comprise an innovative
and aesthetically pleasing solar power system that is expected to significantly increase the use of space in comparison with conventional
greenhouses. The red greenhouse glass removes the green light and increases the ratio from red to blue light, which significantly
increases plant growth as compared to current solar greenhouse constructions. Comprised entirely of solar panels, with the walls
of the structure itself made of solar glass, these innovative greenhouses may be placed on top of warehouses or other buildings.
The greenhouse designs are the brainchild
of world-renowned architect Mr. Antony Morali, with whom the Company has engaged through a joint venture and profit-sharing agreement.
Mr. Morali also serves as the lead designer of the Company’s current and planned solar greenhouse construction projects.
RED, a leading expert in solar infrastructure design, is engaged in several large solar project constructions within the New York
metropolitan area.
We already began commercializing the product
in North America. The announced construction using this revolutionary solar technology is currently underway in downtown Las Vegas,
Nevada.
Community Solar
Electricity generation in the U.S. is progressing
to a renewable market. Solar energy is on the rise due to state and federal government tax incentives, ease of operation and maintenance,
and declining costs. The economy is creating a market for renewable energy that helps conserve our natural resources and clean
energy that reduce the long-standing harmful environmental effects of coal and oil.
The renewable energy market is growing
with federal and particularly state, regulations passing and implementing bills around the nation for more renewable sources. California
is taking the lead on sustainable energy with their passing of a Senate Bill (SB 350) that requires 50% of electricity to come
from renewable sources by 2030. The enactment of SB 350 encourages the procurement of electricity from renewable sources, providing
a market for solar power plants in California.
Demand for photovoltaic (“PV”)
solar power in the U.S. has grown significantly over the last few years and is projected by the Solar Energy Industries Association
(“SEIA”) to continue growing rapidly. According to SEIA, from 2007 through 2017, the U.S. Solar market grew at an average
annual rate of 59 percent. SEIA had projected a compound annual growth rate of 28 percent between 2012 and 2016. There were 10,608
MW installed in 2017 and in 2017 solar accounted for 30% of all new electric generating capacity installed.
For all of 2017, non-residential PV was
the only segment expected to grow on an annual basis. The segment’s growth comes from projects rushing to install before
rate and incentive structures changes in select markets, along with the continued emergence of business and community solar, which
is on track to grow by more than 50% year-over-year. According to market segment data from SEIA, installed capacity of utility-scale
PV projects grew from 58 MW in 2009 to 53 GW at the end of 2017. Utility-scale solar (plants with a capacity of at least one megawatt)
comprise about 2% of all utility-scale electric generating capacity and 0.9 % of utility-scale generation. The first utility-scale
solar plants were installed in the mid-1980s, but more than half of the currently operating utility-scale solar capacity came online
since 2015.
Community solar energy incentives coupled
with the exorbitant electricity costs have generated a rapidly growing community solar market. The Company is targeting multiple
high revenue verticals within the expanding solar energy markets, including but not limited to the rapidly increasing community
solar space. For instance, in New York City, where building owners pay some of the highest electricity prices, the Company, plans
on renting from 50,000 to 100,000 square feet of rooftop space in the near future to install its solar power solution providing
the option of renewable solar power to local customers.
The Company expects to receive substantial
revenues through sales of electricity directly to the building owners in the New York market. Referral agreements with the local
community members will be essential to enter this market, particularly in New York, where the Company will develop marketing partnerships
with major roofing companies to fuel client acquisition and increase of sales.
The Company is exclusively targeting commercial
solar leasing and construction, a market space that provides significant and longer-term cash producing assets.
How Shared Solar Works:
Purchase Power Agreements and Lease
Agreements
The Company realizes that it should distinguish
itself not solely by means of its unique products but additionally through a personalized and convenient contractual relationship
with its customers. Accordingly, the Company believes that the revenues in key regions will be derived directly from Purchase Power
Agreements (PPAs) or simple leasing agreements. Ultimately, PPA is a financial arrangement in which a third-party developer, such
as the Company, owns, operates, and maintains the photovoltaic (PV) system, and a host customer agrees to site the system on its
property and purchases the system’s electric output from the solar services provider for a predetermined period. This financial
arrangement allows the host customer to receive stable and low-cost electricity, while the solar services provider or another party
acquires valuable financial benefits, such as tax credits and income generated from the sale of electricity. In accordance with
the terms of the PPAs, the Company acts as the developer, designer, and the administrator of the project, dealing with permits,
finances, and managing of the solar system, and well as installation and maintenance thereof. A customer, or “Host,”
will pay a rate for such services, which is typically lower than the local utility’s retail rate of electricity. This lower
electricity price significantly offsets the customer’s purchase of electricity from the host’s grid during the length
of the PPA.
An interconnection agreement is generally
required from the applicable local electricity utility to interconnect a solar energy system with the utility grid. In almost all
cases, interconnection agreements are standard form agreements that have been pre-approved by the local public utility commission
or other regulatory body with jurisdiction over interconnection. As such, no additional regulatory approvals are required once
interconnection agreements are signed. We prepare and submit these agreements on behalf of our customers to ensure compliance with
interconnection rules. With this business model, the host customer buys the services produced by our solar energy solutions rather
than the solution itself. This framework is referred to as the services model, and the developers who offer PPAs are generally
known as solar services providers. PPA arrangements enable the host customer to avoid many of the traditional barriers to the installation
of on-site solar systems: high up-front capital costs, system performance risk, and complex design and permitting processes. In
addition, PPA arrangements can be cash flow positive for the host customer from the day the system is commissioned.
The solar services provider functions as
the project coordinator, arranging the financing, design, permitting, and construction of the system. The solar services provider
purchases the solar panels for the project from a PV manufacturer, who provides warranties for system equipment. The installer
will design the system, specify the appropriate system components, and may perform the follow-up maintenance over the life of the
PV system. To install the system, the solar services provider might use an in-house team of installers or have a contractual relationship
with an independent installer. Once the PPA is signed, a typical installation can usually be completed in three to six months.
Typical Project Timeline
An investor provides equity financing and
receives the federal and state tax benefits for which the system is eligible. Under certain circumstances, the investor and the
solar services provider may together form a special purpose entity for the project to function as the legal entity that receives
and distributes to the investor payments from tax benefits and the sale of the system’s output. The utility serving the host
customer provides an interconnection from the PV system to the grid and continues its electric service with the host customer to
cover the periods during which the system is producing less than the site’s electric demand. Certain states have net metering
requirements in place that provide a method of crediting customers who produce electricity on-site in excess of their own electricity
consumption. In most states, the utility will credit excess electricity generated from the PV system, although the compensation
varies significantly depending on state policies.
The Company plans to receive income not
just from the fixed maintenance fee, but also from sales of electricity on a monthly basis of any unused energy, and, based on
the terms of the agreement, keeping 80% of the customer’s savings. Typically, our solar power solutions are expected to produce
enough energy to not only sufficiently supply the buildings but additionally to save and store enough energy to sell to utility
companies. PPAs typically range from 10 to 15 years, during which the developer remains responsible for the operation and maintenance
of the system for the duration of the agreement. The Company is exclusively targeting the commercial solar space, a market space
that provides significant and longer-term cash-producing assets.
The Company also expects to derive revenue
through simple leasing agreements in addition to PPAs. The Company will engage customers in 10 to 15-year leasing terms for both
the solar infrastructure and the next-generation batteries requisite advanced for its operation. The Company is currently targeting
major investment groups, brokers, and private investors in order to capitalize on a variety of unique investment opportunities
in the commercial solar energy markets.
Some of the programs will be dependent
upon favorable tax treatment and incentives from state, local and federal sources. Should there be a decline in this type of government
support it could affect our profits or make the use of solar less desirable or cost effective. See Government Incentives
and Policies, below.
Plan of Operation
The Company currently has reached information
agreements in principal with six different commercial property owners to lease space to install community solar installations and
has received design and installation proposals for two of the proposed installations. We have been raising funds through our Regulation
A Offering (the “Offering”) that was previously qualified to be able to support payments on the proposed leases and
installations as well as operational expenses and costs of continued development of the solar greenhouses in conjunction with RED.
We had a net loss of $112,714 for the fiscal
year ended April 30, 2019 and a net loss of $168,000 for the nine-month period ended January 1, 2020. We have limited cash on hand
and have not produced any revenues. Therefore, we will be dependent upon selling shares of our common stock pursuant to our Regulation
A Offering to continue to finance the Company’s operations. We expect to finance the installation of solar systems with conventional
debt financing for the bulk of the cost along with the sale of federal tax credits. Depending upon the state of operation, a portion
of the cost will also be paid from state grants and incentives.
Major Suppliers and Key Contractors
We established important contractual relationship
with Anthony Morali of Morali Architects and Dream Green Partners Inc. with regard to design, manufacturing, and installation of
the solar panels and delegation of relevant functions to them for our solar panel greenhouse projects. The loss of either of these
suppliers would have serious negative effects on our business, as it would take time to establish relationships with new suppliers.
Competition
Although many small and medium-sized companies
are still in the process of understanding how solar energy can make sense for them, more than 100 of the Fortune 500 companies
have already received significant results by using solar power.
Nevertheless, we believe our primary competitors
are the traditional local utilities that supply energy to our potential customers. We compete with these traditional utilities
primarily based on price, predictability of price and the ease by which customers can switch to electricity generated by our solar
energy systems rather than fossil-based alternatives. We believe that our pricing and focus on customer relationships allow us
to compete favorably with traditional utilities in the regions we service.
Other sources of competition are other
solar energy system providers such as Tesla, Inc., Vivint Solar Inc., Sunrun Inc., Sungevity, Inc., Tiger Reef, Inc., and many
others. These companies may offer products that are similar to our solar energy systems, and we primarily compete with these companies
based on price. We believe that we compete favorably with these companies.
The Company anticipates that the following
factors will give us a competitive advantage because we expect to become a technology company insulated by patents creating a barrier
to competition, as well as a company selling a product with brand recognition and expect the customers to select the Company because:
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We offer unique innovative products.
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We offer a flexible menu of product financing options and types of agreements.
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We are located in the states where utility costs are high and/or incentives for solar energy systems are available, therefore, offering an attractive alternative to conventional power sources.
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Employees
The Company has no full-time employees.
Patents and Trademarks
The company relies on a combination of trade secret, and
contractual protections to establish and protect its intellectual proprietary rights. It may rely on patents held by its partners
with whom it has contractual relationships.
The Company holds no patents, nor at this
time, has any patent pending.
Government Regulation
An interconnection agreement is generally
required from the applicable local electricity utility to interconnect a solar energy system with the utility grid. In almost all
cases, interconnection agreements are standard form agreements that have been pre-approved by the local public utility commission
or other regulatory body with jurisdiction over interconnection. As such, no additional regulatory approvals are required once
interconnection agreements are signed. We prepare and submit these agreements on behalf of our customers to ensure compliance with
interconnection rules.
Our operations are subject to stringent
and complex federal, state and local laws and regulations governing the occupational health and safety of our employees and wage
regulations. For example, we are subject to the requirements of the federal Occupational Safety and Health Act, as amended, or
“OSHA,” and comparable state laws that protect and regulate employee health and safety. We expend resources to comply
with OSHA requirements and industry best practices. Federal and/or state prevailing wage requirements, which generally apply to
any “public works” construction project that receives public funds, may apply to installations of our solar energy
systems on government facilities. The prevailing wage is the basic hourly rate paid on public works projects to a majority of workers
engaged in a particular craft, classification or type of work within a particular area. Prevailing wage requirements are established
and enforced by regulatory agencies. Our in-house personnel monitors and coordinates our continuing compliance with these regulations
when required.
Some jurisdictions place limits on the
size or number of solar energy systems that can be interconnected to the utility grid. This can limit our ability to sell and install
solar energy systems in some markets. The regulatory environment is constantly changing.
Environmental Regulations
Once it begins manufacturing its product,
the company may use, generate, and discharge toxic, volatile, or otherwise hazardous chemicals and wastes in its research and development,
manufacturing, and construction activities. The company will be subject to a variety of federal, state, and local governmental
laws and regulations related to the purchase, storage, use, and disposal of hazardous materials. In addition, these laws and regulations
may impose substantial liabilities for the failure to comply with them or for any contamination resulting from the operations associated
with our assets. Laws and regulations protecting the environment have become more stringent in recent years, and may in certain
circumstances impose “strict liability,” rendering a person liable for environmental damage without regard to negligence
or fault on the part of such person. Such laws and regulations may expose us to liability for the conduct of or conditions caused
by others, or for our acts which were in compliance with all applicable laws at the time such acts were performed. The application
of these requirements or the adoption of new requirements could have a material adverse effect on our financial position and results
of operations. Compliance with these laws and regulations may be costly and may have a material adverse effect on our business
and results of operations.
Government Incentives and Policies
U.S. federal, state and local governments
have established various policies, incentives, and financial mechanisms to reduce the cost of solar energy and to accelerate the
adoption of solar energy. These incentives include tax credits, cash grants, production-based incentives, tax abatements, and rebates.
These incentives help catalyze private sector investments in solar energy, energy efficiency, and energy storage measures, including
the installation and operation of residential and commercial solar energy systems.
Following the extension of the Solar
Investment Tax Credit in December 2015, the Internal Revenue Code allows a United States taxpayer to claim a tax credit of 30%
of qualified expenditures for a solar energy system that is placed in service on or before December 31, 2019. This credit
is scheduled to decline to 26% effective January 1, 2020, 22% in 2021, and then to 10% for commercial projects and 0% for residential
projects in 2022.
Many U.S. states
and local jurisdictions have established property tax incentives for renewable energy systems, which include exemptions, exclusions,
abatements, and credits. Many state governments, investor-owned utilities, municipal utilities, and co-operative utilities offer
rebates or other cash incentives for the installation and operation of a solar energy system or energy-related products.
Many states have a regulatory policy known
as net energy metering, or net metering. Net metering typically allows our customers to interconnect their on-site solar energy
systems to the utility grid and offset their utility electricity purchases by receiving a bill credit at the utility’s retail
rate for energy generated by their solar energy system that is exported to the grid in excess of electric load used by customers.
Some states have established limits on
net metering, fees on solar energy systems, or reduced the credit available for electricity generated by solar energy systems that
are connected to the utility grid. For example, Hawaii, Nevada, and Mississippi have announced net metering policies that establish
wholesale rates, not retail rates, for crediting electricity produced by solar energy systems. This has adversely impacted the
attractiveness of solar energy to residential customers in these markets. The California Public Utilities Commission issued a ruling
that maintains the net energy metering credit at full retail value but adds new charges and requirements for customers installing
a solar energy system. On the other hand, other states continue to expand their net metering programs. New York, for example, has
suspended its cap on solar photovoltaic systems covered by the state’s net metering program.
Some states like Massachusetts have offered
Solar Renewable Energy Credits (“SRECs”) that provide cash payments based on the electricity produced by solar energy
systems as an incentive for customers to invest in these systems. These programs are generally capped and must be reauthorized
or extended when the cap is reached in order for the incentives to be continued. The Massachusetts Department of Energy Resources
announced that the total capacity available under its most recent SREC program (SREC-II) for projects over 25 kW had been exceeded
in early 2016, however it was announced on January 31, 2017, by the Massachusetts Department of Energy Resources that their new
program, called Solar Massachusetts Renewable Target (“SMART”), is targeted to start in April 2018 and that the SREC
II program would be extended in order to bridge between the two programs. The SREC II program was ultimately extended until November
26, 2018, at which point the first applications for SMART were accepted. The first SMART incentive allocations began on January
15, 2019.
On January 22, 2018, the Office of the
President of the United States approved in substantial form, recommendations by the U.S. International Trade Commission to impose
a tariff of 30% on imports of solar cells and photovoltaic modules under Section 201 of the Trade Act of 1974, unless specifically
excluded. The 30% tariff declines 5% per year over the four-year term of the tariff. Further, the provisions of the 201 Tariff
are applicable to imported solar cells and modules from Canada, despite its being a member of the North American Free Trade Act.
Seasonality
Our quarterly net revenue and operating
results for solar energy system installations are difficult to predict and have, in the past, and may, in the future, fluctuate
from quarter to quarter as a result of changes in state, federal, or private utility company subsidies, as well as weather, economic
trends and other factors. The industry historically experienced seasonality in our solar installation business, with the first
quarter representing our lowest installation quarter of the year, primarily due to adverse weather. Additionally, the industry
historically experienced seasonality in sales of solar systems similar to ours, with the fourth and first quarters of the year
seeing fewer sales orders than the second and third quarters. We do not have the historical experience to assess seasonality for
this line of our own business.
Please see further Item 1A. Risk Factors,
set forth below.
An investment in our common stock involves
a high degree of risk. An investor should carefully consider the following risk factors and the other information in this registration
statement before investing in our common stock. Our business and results of operations could be seriously harmed by any of the
following risks.
Please consider the following risk factors
and other information in this offering circular relating to our business and prospects before deciding to invest in our common
stock.
This offering and any investment in our
common stock involve a high degree of risk. You should carefully consider the risks described below and all of the information
contained in this offering circular before deciding whether to purchase our common stock. If any of the following risks actually
occur, our business, financial condition and results of operations could be harmed, and you may lose all or part of your investment.
The Company considers the following to
be all known material risks to an investor regarding this offering. The Company should be viewed as a high-risk investment and
speculative in nature. An investment in our common stock may result in a complete loss of the invested amount. Please consider
the following risk factors before deciding to invest in our common stock.
RISKS RELATED TO THE INDUSTRY
The demand for products requiring
significant initial capital expenditures such as solar power products and related services are affected by general economic conditions.
The United States and countries worldwide
have recently experienced a period of declining economies and turmoil in financial markets. A sustained economic recovery is uncertain.
In particular, terrorist acts and similar events, continued unrest in the Middle East or war, in general, could contribute to a
slowdown of the market demand for products that require significant initial capital expenditures, including demand for solar power
systems and solar greenhouses. In addition, increases in interest rates may increase financing costs to customers, which in turn
may decrease demand for our solar power products. If economic recovery is slowed as a result of the recent economic, political
and social events, or if there are further terrorist attacks in the United States or elsewhere, we may experience decreases in
the demand for our solar power products, which may harm our operating results.
If there is a shortage of components
and/or key components rise significantly in price that may constrain our revenue growth.
The market for photovoltaic installations
has continued to grow despite worldwide financial and economic issues. The introduction of significant production capacity has
continued and has increased supply and reduced the cost of solar panels. If demand increases and supply contracts, the resulting
likely price increase could adversely affect sales and profitability. From 2009 through 2014, there was a tremendous increase in
the capacity to produce solar modules, primarily from China, which coupled with the worst economic downturn in nearly a century,
significantly reduced the price of solar panels. As demand for solar panels will likely increase with an economic recovery, demand
and pricing for solar modules could increase, potentially limiting access to solar modules and reducing our selling margins for
panels.
Shortages of silicon and inverters or supply
chain issues could adversely affect the availability and cost of our solar energy systems. Manufacturers of photovoltaic modules
depend upon the availability and pricing of silicon, one of the primary materials used in photovoltaic modules. The worldwide market
for silicon from time to time experiences a shortage of supply, which can cause the prices for photovoltaic modules to increase
and supplies to become difficult to obtain. While we have been able to obtain sufficient supplies of solar photovoltaic modules
to satisfy our needs to date, this may not be the case in the future. Future increases in the price of silicon or other materials
and components could result in an increase in costs to us, price increases to our customers or reduced margins.
Other international trade conditions such
as work slowdowns and labor strikes at port facilities or major weather events can also adversely impact the availability and price
of solar photovoltaic modules.
Existing regulations and policies
and changes to these regulations and policies may present technical, regulatory and economic barriers to the purchase and use of
solar power products, which may significantly reduce demand for our products.
The market for electricity generation is
heavily influenced by foreign, U.S. federal, state and local government regulations and policies concerning the electric utility
industry, as well as policies promulgated by electric utilities. These regulations and policies often relate to electricity pricing
and technical interconnection of customer-owned electricity generation. In the U.S. these regulations and policies are being modified
and may continue to be modified. Customer purchases of or further investment in the research and development of alternative energy
sources, including solar power technology, could be deterred by these regulations and policies, which could result in a significant
reduction in the potential demand for our solar power products, for example, without certain major incentive programs and or the
regulatory mandated exception for solar power systems, utility customers are often charged interconnection or standby fees for
putting distributed power generation on the electric utility network. These fees could increase the cost to our customers of using
our solar power products and make them less desirable, thereby harming our business, prospects, results of operations and financial
condition.
We anticipate that our solar power products
and their installation will be subject to oversight and regulation in accordance with national and local ordinances relating to
building codes, safety, and environmental protection, utility interconnection and metering and related matters. It is difficult
to track the requirements of individual states and design equipment to comply with the varying standards. Any new government regulations
or utility policies pertaining to our solar power products may result in significant additional expenses to us and our resellers
and their customers and, as a result, could cause a significant reduction in demand for our solar power products.
The reduction, elimination or expiration
of government subsidies and economic incentives for on-grid solar electricity applications could reduce demand for solar power
systems and harm our business.
The market for solar energy applications
depends in large part on the availability and size of local, state, and federal government and economic incentives that vary by
geographic market. The reduction, elimination or expiration of government subsidies and economic incentives for solar electricity
may negatively affect the competitiveness of solar electricity relative to conventional and non-solar renewable sources of electricity
and could harm or halt the growth of the solar electricity industry and our business.
The cost of solar power currently is less
than retail electricity rates in most markets, and we believe solar will continue to do so for the foreseeable future. As a result,
federal, state and local government bodies, the United States has provided incentives in the form of feed-in tariffs, or FITs,
rebates, tax credits and other incentives to system owners, distributors, system integrators and manufacturers of solar power systems
to promote the use of solar electricity in on-grid applications and to reduce dependency on other forms of energy. Many of these
government incentives expire, phase out over time, terminate upon the exhaustion of the allocated funding or require renewal by
the applicable authority. In addition, electric utility companies or generators of electricity from other non-solar renewable sources
of electricity may successfully lobby for changes in the relevant legislation in their markets that are harmful to the solar industry.
Reductions in, or eliminations or expirations of, governmental incentives could result in decreased demand for and lower revenue
from solar PV systems, which would adversely affect sales of our products.
Our success depends, in part, on
the quality and safety of the services we provide.
We do not design and manufacture our own
products. We can and do use a variety of products and do not have a commitment to any single manufacturer. We do not warranty our
products because this is the responsibility of the manufacturer. However, we do warranty our installation workmanship and could
suffer a loss of customer referrals and reputation degradation if our quality workmanship is not maintained.
The Company’s management
has no specific experience in the design and installation of solar systems and relies on consultants and
other third parties.
The Company has partnered with Anthony
Morali and Renewable Energy Development LLC (“RED”), a leading expert in solar infrastructure design as the Company’s
management doesn’t have specific experience in the installation and design of solar systems. Should the Company not be able
to maintain these relationships it would have a significant impact on our ability to continue with our business plan.
We may need additional capital to
develop our business.
The development of our services will require
the commitment of resources to increase the advertising, marketing and future expansion of our business. In addition, expenditures
will be required to enable us in 2019 and 2020 to conduct planned business research, development of new affiliate and associate
offices, and marketing of our existing and future products and services. Currently, we have no established bank-financing arrangements.
Therefore, it is possible that we would need to seek additional financing through a subsequent future private offering of our equity
securities, or through strategic partnerships and other arrangements with corporate partners.
We cannot give any assurance that any additional
financing will be available to us, or if available, will be on terms favorable to us. The sale of additional equity securities
could result in dilution to our stockholders. Sales of existing shareholders of the common stock and preferred stock in the public
market could adversely affect prevailing market prices and could impair the Company’s future ability to raise capital through
the sale of the equity securities. The incurrence of indebtedness would result in increased debt service obligations and could
require us to agree to operating and financing covenants that would restrict our compensation. If adequate, additional financing
is not available on acceptable terms, we may not be able to implement our business development plan or continue our business operations.
You could suffer dilution should
the Series B Convertible Preferred Stockholders convert their shares.
The President of the Company owns 600,000
shares of Series B Convertible Preferred Stock. If all of the Series B Convertible Preferred Stock is converted at the current
conversion rate, an additional 600,000,000,000 shares of common stock could be issued to the holders thereof (i.e. more
than the current number of authorized shares). This could cause you to suffer immediate and significant dilution such that the
percentage of shares held by current shareholders after full conversion of the 600,000 Series B Convertible Preferred stock would
be less than .1%.
Our liability insurance may not be
adequate in a catastrophic situation.
We do not currently maintain property damage
insurance or product liability insurance. Material damage to, or the loss to our facilities or equipment due to fire, severe weather,
flood or other catastrophe, even if insured against, could result in a significant loss to the Company.
The services we intend to provide
to customers may not gain market acceptance, which would prevent us from achieving sales and market share.
The market for solar power is emerging
and rapidly evolving, and its future success is uncertain, especially when solar power services are combined with other products
such as greenhouses. If solar power technology proves unsuitable for widespread commercial deployment or if demand for solar power
products fails to develop sufficiently, we would be unable to achieve sales and market share. In addition, demand for solar power
in the markets and geographic regions we target may not develop or may develop more slowly than we anticipate. Many factors may
influence the widespread adoption of solar power technology and demand for solar power, including:
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Performance and reliability of solar power products as compared with conventional and non-solar alternative energy products;
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Cost-effectiveness of solar power technologies as compared with conventional and competitive alternative energy technologies;
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Success of alternative distributed generation technologies such as hydrogen fuel cells, wind turbines, bio-diesel generators, and large-scale solar thermal technologies;
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Fluctuations in economic and market conditions that impact the viability of conventional and competitive alternative energy sources;
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Increases or decreases in the prices of oil, coal and natural gas;
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Capital expenditures by customers, who tend to decrease when domestic or foreign economies slow; and
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Continued deregulation of the electric power industry and broader energy industry.
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We face intense competition from
other system integrators and other energy generation products. If we fail to compete effectively, we may be unable to increase
our market share and sales.
The mainstream power generation market
and related product sectors are well established, and we are competing with power generation from more traditional processes that
can generate power at lower costs than most renewable or environmentally driven processes. Further, within the renewable power
generation and technologies markets, we face competition from other methods of producing renewable or environmentally positive
power. Then, the solar power market itself is intensely competitive and rapidly evolving. Our competitors have established market
positions more prominent than ours, and if we fail to attract and retain customers, we may be unable to achieve sales and market
share. There are a number of major multi-national corporations that provide solar installation services such as REC, Solar City,
and Sunpower Corporation. Established integrators are growing and consolidating, including GoSolar, Sunwize, Sunenergy, and Real
Good Solar and we expect that future competition will include new entrants to the solar power market. Further, many of our competitors
may be developing or may be currently providing products based on new solar power technologies that may have costs similar to,
or lower than, our projected costs.
Some of our competitors are substantially
larger than we are, have longer operating histories and have substantially greater financial, technical, manufacturing and other
resources than we do. Our competitors’ greater sizes in some cases provide them with competitive advantages with respect
to manufacturing costs and the ability to allocate costs across a greater volume of production and purchase raw materials at lower
prices. They also have far greater name recognition, an established distribution network and an installed base of customers. In
addition, many of our competitors have well-established relationships with current and potential resellers, which have extensive
knowledge of our target markets. As a result, our competitors will be able to devote greater resources to the research, development,
promotion, and sale of their products and may be able to respond more quickly to evolving industry standards and changing customer
requirements than we can.
Our sales and installations are subject
to seasonality of customer demand and weather conditions which are outside of our control.
Our sales are subject to the seasonality
of when customers buy solar energy systems. Historically, we are expected to experience spikes in orders during the spring and
summer months which, due to lead time, result in installations and revenue increase during the summer and fall. Tax incentives
can generate additional backlog prior to the end of the year, depending upon the incentives available and whether customers are
looking to take advantage of such incentives before the end of the year.
Our ability to construct systems outdoors
may be impacted by inclement weather, which can be most prominent in our geographic installation regions during the first and fourth
quarters of the year. As a result of these factors, our first quarter is generally our slowest quarter of the year. If unexpected
natural events occur and we are unable to manage our cash flow through these seasonal factors, there could be a negative impact
on our financial position, liquidity, results of operations and cash flow.
Our inability to respond to changing
technologies and issues presented by new technologies could harm our business.
The solar energy industry is subject to
technological change. If we rely on products and technologies that cease to be attractive to customers, or if we are unable to
respond appropriately to changing technologies and changes in product function or quality, we may not be successful in capturing
or retaining significant market share. In addition, any new technologies utilized in our solar energy systems may not perform as
expected or as desired, in which event our adoption of such products or technologies may harm our business.
We rely heavily on a limited number
of designers, suppliers, installers and other vendors, and if these companies were unable to deliver critical components and services,
it would adversely affect our ability to operate and our financial results.
We rely on a limited number of third-party
suppliers to provide the components used in our solar-panel based greenhouses and our solar energy systems. We also rely on key
vendors to provide internal and external services which are critical to our operations, including installation of solar energy
systems, accounting and customer relationship management software, facilities and communications. The failure of our suppliers
and vendors to supply us with products and services in a timely manner or on commercially reasonable terms could result in lost
orders, delay our project schedules, limit our ability to operate and harm our financial results. If any of our suppliers or vendors
were to fail to supply our needs on a timely basis or to cease providing us key components or services we use, we would be required
to secure alternative sources of supply. We may have difficulty securing alternative sources of supply. If this were to occur,
our business would be harmed.
The installation and ongoing operation
of solar energy systems involves significant safety risks.
Solar energy systems generate electricity,
which is inherently dangerous. Installation of these systems also involves the risk of fire, personal injuries occurring at the
job site and other risks typical of construction projects. Although we take many steps to assure the safe installation and operation
of our solar energy systems and greenhouse, and maintain insurance against such liabilities, we may nevertheless be exposed to
significant losses arising from personal injuries or property damage arising from our projects.
United States trade policy affects
our ability to purchase domestic solar panels.
One of the effects of the United States
tariffs on imported solar panels, including solar panels from China, is an increased demand for products manufactured in the United
States which may affect both our ability to purchase solar panels and the price and other terms at which solar panels are available
to us. Because of the increased demand for domestically manufactured solar panels, we cannot assure you that, if we seek to purchase
solar panels from Renewable Energy Development, a New York-based company, it will have the capacity to fill our orders at a commercially
reasonable price or that we will be able to purchase solar panels from other suppliers at a reasonable cost. Our inability to obtain
domestically produced solar panels can impair our ability to generate revenue and maintain reasonable gross margins.
Changes in net metering regulations
could impair the market for solar products.
Net metering is a billing mechanism that
credits solar energy system owners for the electricity that they add to the electricity grid. If the owner of a solar system generates
more electricity than it consumes, the excess electricity is sold back to the grid. California’s first net metering policy
set a “cap” for the three investor-owned utility companies in the state: Pacific Gas & Electric (PG&E), San
Diego Gas & Electric (SDG&E), and Southern California Edison (SCE). All three have reached their cap where total solar
installations in each utility’s territory were capped at five percent of total peak electricity demand. The California Public
Utilities Commission (CPUC) created the known as “Net Metering 2.0” (NEM 2.0) that extends California net metering.
NEM 2.0 is slightly different from the first net metering policy. Under NEM 2.0, customers will still receive the retail credit
for electricity produced but will be required to pay more in Non-Bypassable Charges. NEM 2.0 also requires new solar customers
to pay a one-time Interconnection Application Fee, the amount of which is dependent upon the utility company. For systems under
1MW, this fee is $132 for San Diego Gas & Electric, $145 for Pacific Gas & Electric, and $75 for Southern California Edison.
NEM 2.0 customers are also required to use Time of Use (ToU) rates. These changes alter the return on investment for solar customers,
and our pricing needs to reflect this change in order for the purchase of a solar system to be economically attractive to the customer,
which may be reflected in lower prices and reduced margins.
To the extent that utility companies are
not required to purchase excess electricity from owners of solar systems or are permitted to lower the amounts paid, the market
for solar systems may be impaired. Because net metering can enable the solar system owner to further reduce the cost of electricity
by selling excess electricity to the utility company, any elimination or reduction of this benefit would reduce the cost savings
from solar energy. We cannot assure you that net metering will not be eliminated, or the benefits significantly reduced for future
solar systems which may dampen the market for solar energy.
Although we are not regulated as
a utility company, changes in regulations may subject us to regulation as a utility.
We are presently exempt from regulation
as a utility as we have “qualifying facility” status with the Federal Energy Regulatory Commission for all of our qualifying
solar energy projects. Any local, state, federal or foreign regulations which classify us as a utility could place significant
restrictions on our ability to operate our business by prohibiting or otherwise restricting our sale of electricity. If we were
subject to the same state, federal or foreign regulatory authorities as utility companies in the United States or if new regulatory
bodies were established to oversee our business in the United States or in foreign markets such as China, then our operating costs
would materially increase, which would impair our ability to generate a profit from our business.
Our business would be impaired if
we lose our licenses, if more stringent government regulations are enacted or if we fail to comply with the growing number of regulations
pertaining to solar energy and consumer financing industries.
Our business is or may become subject to
numerous federal and state laws and regulations. The installation of solar energy systems performed by us is subject to oversight
and regulation under local ordinances, building, zoning and fire codes, environmental protection regulation, utility interconnection
requirements, and other rules and regulations. The financing transactions the Company are subject to numerous consumer credit and
financing regulations. The consumer protection laws, among other things:
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require us to obtain and maintain licenses and qualifications;
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limit certain interest rates, fees and other charges we are allowed to charge;
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limit or prescribe certain terms of the loans to our customers; and
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require specific disclosures and the use of special contract forms.
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The number of laws affecting both aspects
of our business continues to grow. We can give no assurances that we will properly and timely comply with all laws and regulations
that may affect us. If we fail to comply with these laws and regulations, we may be subject to civil and criminal penalties. In
addition, non-compliance with certain consumer disclosure requirements related to home solicitation sales and home improvement
contract sales affords residential customers with a right to rescind such contracts in some jurisdictions.
Changes in regulations relating to
fossil fuel can impact the market for renewable energy, including solar.
The market for renewable energy in general
and solar energy, in particular, is affected by regulations relating to the use of fossil fuel and the encouragement of renewable
energy. To the extent that changes in regulations have the effect of reducing the cost of gas, oil, and coal or encouraging the
use of such fuels, the market for solar systems may be impaired.
A material decline in the price of electricity
charged by the local utility company to commercial users may impair our ability to attract commercial customers.
Often large commercial customers pay less
for energy from utility companies than residential customers. To the extent that utility companies offer commercial customers a
lower rate for electricity, they may be less willing to switch to solar energy. Under such conditions, we may be unable to offer
solar energy systems in commercial markets that produce electricity at rates that are competitive with the price of retail electricity
they are able to obtain from the local utility company. In such event, we would be at a competitive disadvantage compared to the
local utility company and may be unable to attract new commercial customers, which would impact our revenues.
Solar energy and other forms of renewable
energy compete with other forms of energy and the attractiveness of solar energy reflects the cost of electricity from the local
grid.
Solar energy competes with other all other
forms of energy, including, particularly local utility companies, whose pricing structure effectively determines the market for
solar energy. If consumers, whether residential or commercial, believe that they are paying and will continue to pay too much for
electricity from a local utility company, they may consider other alternatives, including alternative providers of electricity
from local utility companies as well as forms of renewable energy. If they are in a location where, because of the climate and
geography, solar energy is a possibility, they may consider solar energy as an alternative, provided they are satisfied that they
will receive net savings in their cost of electricity and their system will provide them with a constant source of energy. Further,
although some customers may purchase a solar energy system because of environmental considerations, we believe that the cost of
electricity is the crucial factor that influences the decision of a user, particularly a commercial user, to elect to use solar
energy.
RISKS RELATED TO OUR BUSINESS
Our annual and quarterly financial
results are subject to significant fluctuations depending on various factors, many of which are beyond our control.
Our sales and operating results can vary
significantly from quarter to quarter and year to year depending on various factors, many of which are beyond our control. These
factors include, but are not limited to:
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seasonal consumer demand for our products;
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discretionary spending habits;
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changes in pricing in, or the availability of supply in, the used powerboat market;
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variations in the timing and volume of our sales;
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the timing of our expenditures in anticipation of future sales;
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sales promotions by us and our competitors;
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changes in competitive and economic conditions generally;
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consumer preferences and competition for consumers’ leisure time; and
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changes in the cost or availability of our labor.
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As a result, our results of operations
may decline quickly and significantly in response to changes in order patterns or rapid decreases in demand for our products. We
anticipate that fluctuations in operating results will continue in the future.
Our limited operating history with
our current business lines makes it difficult to evaluate our current and future prospects and may increase the risk associated
with your investment.
We have a limited operating history with
our current business lines. Consequently, our operations are subject to all the risks inherent in the establishment of new business
lines in industries within which we are not necessarily familiar. We have encountered and will continue to encounter risks and
difficulties frequently experienced by rapidly growing companies in constantly evolving industries, including the risks described
in this prospectus. If we do not address these risks successfully, our business, financial condition, results of operations and
prospects will be adversely affected, and the market price of our common stock could decline. As such, any predictions about our
future revenue and expenses may not be as accurate as they would be if we had a longer operating history in our current business
lines or operated in a more predictable market.
We will need a significant amount
of capital to carry out our proposed business plan and, unless we are able to raise sufficient funds or generate sufficient revenues,
we may be forced to discontinue our operations.
Our ability to obtain the necessary financing
to execute our business plan is subject to a number of factors, including general market conditions and investor acceptance of
our business plan. These factors may make the timing, amount, terms and conditions of such financing unattractive or unavailable
to us. If we are unable to raise sufficient funds or generate them through revenues, we will have to significantly reduce our spending,
delay or cancel our planned activities or substantially change our current corporate structure. There is no guarantee that we will
be able to obtain any funding or that we will have sufficient resources to continue to conduct our operations as projected, any
of which could mean that we will be forced to discontinue our operations.
There are certain allegations of
the existence of the number of promissory notes of the Company that may result in litigation against the Company.
A number of third parties purportedly acting
together allege the existence of certain Purported Notes, as defined in Legal Proceedings on page 32. The Company believes that
the claims regarding the Purported Notes are invalid and has commenced an action in the United States District Court for the District
of Nevada, for, among other things, a declaratory judgment asserting that the purported notes are not valid and are unenforceable
and for a money judgement for punitive damages. Moreover, the Company is prepared to vigorously defend itself in court against
said claims, in the event the Company’s judgment of the situation is incorrect, the claims in connection with the Purported
Notes may result in litigation and substantial losses for the Company. In the event the claimants prevail with regard to the Purported
Notes, the total amount of losses may be in excess of $16,427,143, not taking the accrued interest and legal fees into account.
Please additionally review Legal Proceedings on page 32.
We operate in a highly competitive industry and potential
competitors could duplicate our business model.
We are involved in a highly competitive
industry where we compete with numerous other companies who offer products and services similar to those we offer. Although some
aspects of our business may be protected by intellectual property laws (patent protection, trade secret protection, copyrights,
trademarks, etc.), potential competitors will likely attempt to duplicate our business model. Some of our potential competitors
may have significantly greater resources than we have, which may make it difficult for us to compete. There can be no assurance
that we will be able to successfully compete against these other entities. Additionally, our contractors are not subjected to an
exclusive contractual relationship with the Company.
Conflict of Interest
The Company is subject to various potential
and actual conflicts of interest arising out of its relationship with its President and/or affiliates of the Company: transactions
with affiliates of the President of the Company and/or such other persons and entities; the payment of substantial sums from the
proceeds of this offering to such affiliates; and, competition for the time and services of the President, agents, employees, and
affiliates with other projects or businesses that they run.
Limited Full-Time Employees and Staff
Assuming successful completion of this
Offering, we intend to hire necessary support staff and will hire, as and when needed, such management, support personnel, independent
consultants, as it may deem necessary for the purposes of its business operations and the President. There can be no assurance
that the Company and its President will be able to recruit and hire required support personnel under acceptable terms. The Company’s
business would be adversely affected if it were unable to retain the required personnel.
Dealings with the Company
The President controls the business and
affairs of the Company. Consequently, the President will be able to control the President’s own compensation and to approve
dealings, if any, by the Company with other entities with which the President is also involved. Furthermore, the President controls
the majority of the voting power in the Company. Although the President intends to act fairly and in full compliance with her fiduciary
obligations, there can be no assurance that the Company will not, as a result of the conflict of interest described above, sometimes
enter into arrangements under terms less beneficial to the Company than it could have obtained had it been dealing with unrelated
persons.
Limitation of Liability of the President
and Directors
To the maximum extent allowed by law, the
President and Directors will have limited liability for breach of fiduciary duty and for (i) any breach of the duty of loyalty
to the Company or its shareholders; (ii) acts or omissions not in good faith or which involve intentional misconduct or a knowing
violation of the law; or (iii) any transactions from which the President and its Affiliates derived an improper personal benefit.
Exclusive Selection of Forum in the
Bylaws
Our corporate bylaws provide that unless
the Corporation consents in writing to the selection of an alternative forum, to the fullest extent permitted by law, all Internal
Corporate Claims, as defined in the Bylaws, may be brought solely and exclusively in the District Court, Sheridan County, Wyoming
(or, if such court does not have jurisdiction, the United States Court for the District of Wyoming). “Internal Corporate
Claims” are defined as claims, including claims in the right of the Corporation, brought by a stockholder (including a beneficial
owner) (i) that are based upon a violation of a duty owed by a current or former Director or officer or stockholder in such capacity
or (ii) as to which the WCC confers jurisdiction upon the District Court. Please read our bylaws carefully in connection with this
risk factor.
This choice of forum provision does not
preclude or contract the scope of exclusive federal jurisdiction for any actions brought under the Exchange Act. Section 27 of
the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the
Exchange Act or the rules and regulations thereunder. As a result, the exclusive forum provision will not apply to suits brought
to enforce any duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction,
and the Company does not intend for the exclusive forum provision to apply to Exchange Act claims. It could apply, however, to
a suit that falls within one or more of the categories enumerated in the exclusive forum provision and that asserts claims under
the Securities Act, inasmuch as Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over
all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. There
is uncertainty as to whether a court would enforce such an exclusive forum provision with respect to claims under the Securities
Act. In addition, our stockholders will not be deemed to have waived the Company’s compliance with the federal securities
laws and the rules and regulations thereunder. Subject to the foregoing, any person or entity purchasing or otherwise acquiring
any interest in shares of capital stock of the corporation shall be deemed to have notice of and consented to this provision of
our Bylaws.
RISKS RELATED TO OUR CORPORATE OPERATIONS
We have a limited operating history
under the current business plan and may never be profitable.
Since we have a limited operating history
following the implementation of the current business plan, it is difficult for potential investors to evaluate our business. We
expect that we will continue to need to raise additional capital in order to fund our operations. There can be no assurance that
such additional capital will be available to us on favorable terms or at all. There can be no assurance that we will be profitable.
Our accountant has indicated
doubt about our ability to continue as a going concern.
Our accountant has expressed doubt about
our ability to continue as a going concern. Our financial statements do not include adjustments that might result from the outcome
of this uncertainty. If we are unable to generate significant revenue or secure financing, we may be required to cease or curtail
our operations.
No intention to pay dividends.
A return on investment may be limited to
the value of our common stock. We do not currently anticipate paying cash dividends in the foreseeable future. The payment of dividends
on our common stock will depend on earnings, financial condition, and other business and economic factors affecting it at such
time as the Board may consider relevant. Our current intention is to apply net earnings, if any, in the foreseeable future to increasing
our capital base and development and marketing efforts. There can be no assurance that the Company will ever have sufficient earnings
to declare and pay dividends to the holders of our common stock, and in any event, a decision to declare and pay dividends is at
the sole discretion of the Board. If we do not pay dividends, our common stock may be less valuable because a return on your investment
would only occur if the Company’s stock price appreciates.
We depend on key personnel and future
members of management, and the loss of services of one or more members of our senior management team, or our inability to attract
and retain highly qualified personnel, could adversely affect our business, diminish our investment opportunities and weaken our
relationships with lenders, business partners and existing and prospective industry participants, which could negatively affect
our financial condition, results of operations, cash flow and trading price of our common stock.
Our success depends on our ability to attract
and retain the services of executive officers, senior officers, and community managers. There is substantial competition for qualified
personnel in the niche area of solar-panel greenhouse design, manufacturing, and sales industry and the loss of our key personnel
could have an adverse effect on us. Our continued success and our ability to manage anticipated future growth depend, in large
part, upon the efforts of key personnel. The loss of services of senior management and solar-panel design team which we may hire,
or our inability to attract and retain highly qualified personnel, could adversely affect our business, diminish our investment
opportunities and weaken our relationships with lenders, business partners, and industry participants, which could negatively affect
our financial condition, results of operations and cash flow.
The ability of stockholders to control
our policies and effect a change of control of our company is limited by certain provisions of our Articles of Incorporation and
bylaws and by Nevada and Wyoming Law.
There are provisions in our Articles of
Incorporation and bylaws that may discourage a third party from making a proposal to acquire us, even if some of our stockholders
might consider the proposal to be in their best interests. These provisions include the following:
Our Articles of Incorporation authorizes
our board of directors to issue shares of preferred stock with such rights, preferences, and privileges as determined by the board,
and therefore to authorize us to issue such shares of stock. We believe these Articles of Incorporation provisions will provide
us with increased flexibility in structuring possible future financings. The additional classes or series will be available for
issuance without further action by our stockholders, unless such action is required by applicable law or the rules of any stock
exchange or automated quotation system on which our securities may be listed or traded. Although our board of directors does not
currently intend to do so, it could authorize us to issue a class or series of stock that could, depending upon the terms of the
particular class or series, delay, defer or prevent a transaction or a change of control of our company that might involve a premium
price for holders of our common stock or that our common stockholders otherwise believe to be in their best interests.
Our board of directors may change
our policies without stockholder approval.
Our policies, including any policies with
respect to investments, leverage, financing, growth, debt, and capitalization, will be determined by our board of directors or
those committees or officers to whom our board of directors delegates such authority. Our board of directors will also establish
the amount of any dividends or other distributions that we may pay to our stockholders. Our board of directors or the committees
or officers to which such decisions are delegated will have the ability to amend or revise these and our other policies at any
time without stockholder vote. Accordingly, our stockholders will not be entitled to approve changes in our policies, and, while
not intending to do so, may adopt policies that may have a material adverse effect on our financial condition and results of operations.
Our business could be adversely
impacted if there are deficiencies in our disclosure controls and procedures or internal control over financial reporting.
The design and effectiveness of our disclosure
controls and procedures and internal control over financial reporting may not prevent all errors, misstatements or misrepresentations.
While management will continue to review the effectiveness of our disclosure controls and procedures and internal control over
financial reporting, there can be no guarantee that our internal control over financial reporting will be effective in accomplishing
all control objectives all of the time. Furthermore, our disclosure controls and procedures and internal control over financial
reporting with respect to entities that we do not control or manage may be substantially more limited than those we maintain with
respect to the subsidiaries that we have controlled or managed over the course of time. Deficiencies, including any material weakness,
in our internal control over financial reporting which may occur in the future could result in misstatements of our results of
operations, restatements of our financial statements, a decline in our stock price, or otherwise materially adversely affect our
business, reputation, results of operations, financial condition or liquidity.
Solar greenhouses incorporating proprietary
greenhouse technology is a new product that exposes us to many new risks and uncertainties.
Following the merger and acquisition agreement
dated February 14, 2019, we repositioned our business model with an immediate focus on developing solar panel greenhouses products.
Developing a new product under a new brand with solar technology and red glass exposes us to many risks and uncertainties that
are new to our business. We have limited experience in the design, manufacture, marketing, distribution and sale of consumer-oriented
products. Our ability to be successful with our line of consumer-oriented products will depend on a number of factors, including
whether:
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We can achieve and maintain customer acceptance of our new products;
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We can rapidly develop and successfully introduce large numbers of new products in response to changing customer preferences;
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We can maintain an adequate level of product quality over multiple consumer lines products which must be designed, manufactured and introduced rapidly to keep pace with changing consumer preferences and competitive factors;
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We can successfully manage our third-party contract designers and manufacturers located outside and/or inside the U.S. on whom we are heavily dependent for the production of our consumer-oriented products;
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We can successfully distribute our consumer-oriented products through distributors, wholesalers, internet retailers and traditional retailers (many of whom distribute products from competing manufacturers) on whom we are heavily dependent; and
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We can successfully manage the substantial inventory and other asset risks associated with the manufacture and sale of our products, given the rapid and unpredictable pace of product obsolescence in solar panel markets.
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Our intellectual property rights
or our means of enforcing those rights may be inadequate to protect our business, which may result in the unauthorized use of our
products or reduced sales or otherwise reduce our ability to compete.
Our business and competitive position depend
upon our ability to protect our intellectual property rights and proprietary technology, including any new brands that we develop.
We attempt to protect our intellectual property rights, primarily in the United States, through a combination of patent, trade
secret and other intellectual property laws, as well as licensing agreements and third-party nondisclosure and assignment agreements.
Because of the differences in foreign patent and other laws concerning intellectual property rights, our intellectual property
rights may not receive the same degree of protection in foreign countries as they would in the United States. Our failure to obtain
or maintain adequate protection of our intellectual property rights, for any reason, could have a materially adverse effect on
our business, results of operations and financial condition. Further, any patents issued in connection with our efforts to develop
new technology for solar panel greenhouse modules may not be broad enough to protect all of the potential uses of our technology.
We also rely on unpatented proprietary
technology. It is possible others will independently develop the same or similar technology or otherwise obtain access to our unpatented
technology. To protect our trade secrets and other proprietary information, we will require our employees, consultants and advisors
to execute proprietary information and invention assignment agreements when they begin working for us. We cannot assure these agreements
will provide meaningful protection of our trade secrets, unauthorized use, misappropriation or disclosure of trade secrets, know-how
or other proprietary information. Despite our efforts to protect this information, unauthorized parties may attempt to obtain and
use information that we regard as proprietary. If we are unable to maintain the proprietary nature of our technologies, we could
be materially adversely affected.
In addition, when others control the prosecution,
maintenance and enforcement of certain important intellectual property, such as technology licensed to us, the protection and enforcement
of the intellectual property rights may be outside of our control. If the entity that controls intellectual property rights that
are licensed to us does not adequately protect those rights, our rights may be impaired, which may impact our ability to develop,
market and commercialize our products. Further, if we breach the terms of any license agreement pursuant to which a third party
licenses us intellectual property rights, our rights under that license may be affected and we may not be able to continue to use
the licensed intellectual property rights, which could adversely affect our ability to develop, market and commercialize our products.
If third parties claim we are infringing
or misappropriating their intellectual property rights, we could be prohibited from selling our products, be required to obtain
licenses from third parties or be forced to develop non-infringing alternatives, and we could be subject to substantial monetary
damages and injunctive relief.
The solar power industry is characterized
by the existence of a large number of patents and frequent litigation based on allegations of patent infringement. We are aware
of numerous issued patents and pending patent applications owned by third parties that may relate to current and future generations
of solar energy. The owners of these patents may assert the manufacture, use or sale of any of our products infringes one or more
claims of their patents. Moreover, because patent applications can take many years to issue, there may be currently pending applications,
unknown to us, which may later result in issued patents that materially and adversely affect our business. Third parties could
also assert claims against us that we have infringed or misappropriated their intellectual property rights. Whether or not such
claims are valid, we cannot be certain we have not infringed the intellectual property rights of such third parties. Any infringement
or misappropriation claim could result in significant costs or substantial damages to our business or an inability to manufacture,
market or sell any of our PV modules found to infringe or misappropriate. Even if we were to prevail in any such action, the litigation
could result in substantial cost and diversion of resources that could materially and adversely affect our business. A large number
of patents, the rapid rate of new patent issuances, the complexities of the technology involved, and uncertainty of litigation
increase the risk of business assets and management’s attention being diverted to patent litigation. Even if obtaining a
license were feasible, it could be costly and time-consuming. We might be forced to obtain additional licenses from our existing
licensors in the event the scope of the intellectual property we have licensed is too narrow to cover our activities, or in the
event, the licensor did not have sufficient rights to grant us the license(s) purportedly granted. Also, some of our licenses may
restrict or limit our ability to grant sub-licenses and/or assign rights under the licenses to third parties, which may limit our
ability to pursue business opportunities.
There has been only a limited public
market for our common stock and an active trading market for our common stock may not develop following this offering.
There has not been any broad public market
for our common stock, and an active trading market may not develop or be sustained. Shares of our common stock may not be able
to be resold at or above the initial public offering price. The initial public offering price of our common stock has been determined
arbitrarily by management without regard to earnings, book value, or other traditional indication of value. Our common stock may
trade below the initial public offering price following the completion of this offering. The market value of our common stock could
be substantially affected by general market conditions, including the extent to which a secondary market develops for our common
stock following the completion of this offering, the extent of institutional investor interest in us, the general reputation of
companies in the world-class yacht sales industry and the attractiveness of their equity securities in comparison to other equity
securities, our financial performance and general stock and bond market conditions.
Investors may have difficulty in
reselling their shares due to the lack of market.
Our common stock is not currently traded
on any exchange but is quoted on OTC Markets Pink marketplace under the trading symbol “GSFI.” There is a limited trading
market for our common stock. There is no guarantee that any significant market for our securities will ever develop. Further, state
securities laws may make it difficult or impossible to resell our shares in certain states. Accordingly, our securities should
be considered highly illiquid.
The market price and trading volume
of our common stock may be volatile following this offering.
Even if an active trading market develops
for our common stock, the trading price of our common stock may be volatile. In addition, the trading volume in our common stock
may fluctuate and cause significant price variations to occur.
Some of the factors that could negatively
affect our share price or result in fluctuations in the price or trading volume of our common stock include:
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actual or anticipated variations in our quarterly operating results or dividends;
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changes in our funds from operations or income estimates;
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publication of research reports about us or solar energy industry;
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changes in market valuations of similar companies;
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adverse market reaction to any additional debt we incur in the future;
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additions or departures of key management personnel;
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actions by institutional stockholders;
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speculation in the press or investment community;
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the realization of any of the other risk factors presented in this offering circular;
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the extent of investor interest in our securities;
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investor confidence in the stock and bond markets, generally;
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changes in tax laws;
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future equity issuances;
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failure to meet income estimates; and
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general market and economic conditions.
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In the past, securities class-action
litigation has often been instituted against companies following periods of volatility in the price of their common stock. This
type of litigation could result in substantial costs and divert our management’s attention and resources, which could have
an adverse effect on our financial condition, results of operations, cash flow and the trading price of our common stock.
There could be volatility in our
share price due to shares held by only a few people.
A small number of stockholders own a significant
portion of our public float. As of the date of this registration statement, a limited number (less than 5) persons beneficially
own and control a significant portion of the public float of the Company. The Company has no control over the decisions of any
of these stockholders to retain ownership of their shares. The trading price of the Company’s common stock could be adversely
affected or be subject to volatility if one or more of these stockholders should determine to sell their shares.
Furthermore, the President of the Company
owns 600,000 shares of Series B Convertible Preferred Stock. If all of the Series B Convertible Preferred Stock is converted at
the current conversion rate, an additional 600,000,000,000 shares of common stock could be issued to the holders thereof (i.e. more
than the current number of authorized shares).
Our shares are considered to be a
“Penny Stock,” which impairs trading liquidity.
Disclosure requirements pertaining to penny
stocks may reduce the level of trading activity in the market for our common stock and investors may find it difficult to sell
their shares. Trades of our common stock will be subject to Rule 15g-9 of the SEC which rule imposes certain requirements on broker/dealers
who sell securities subject to the rule to persons other than established customers and accredited investors. For transactions
covered by the rule, brokers/dealers must make a special suitability determination for purchasers of the securities and receive
the purchaser’s written agreement to the transaction prior to sale. The SEC also has rules that regulate broker/dealer practices
in connection with transactions in “penny stocks.” Penny stocks generally are equity securities with a price of less
than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided
that current price and volume information with respect to transactions in that security is provided by the exchange or system).
The penny stock rules require a broker/dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to
deliver a standardized risk disclosure document prepared by the SEC that provides information about penny stocks and the nature
and level of risks in the penny stock market. The broker/dealer also must provide the customer with current bid and offer quotations
for the penny stock, the compensation of the broker/dealer and its salesperson in the transaction, and monthly account statements
showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker/dealer
and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction
and must be given to the customer in writing before or with the customer’s confirmation.
Future issuances of debt securities
and equity securities may negatively affect the market price of shares of our common stock and, in the case of equity securities,
may be dilutive to existing stockholders.
In the future, we may issue debt or equity
securities or incur other financial obligations, including stock dividends and shares that may be issued in exchange for common
units and equity plan shares/units. Upon liquidation, holders of our debt securities and other loans and preferred stock will receive
a distribution of our available assets before common stockholders. We are not required to offer any such additional debt or equity
securities to existing stockholders on a preemptive basis. Therefore, additional common stock issuances, directly or through convertible
or exchangeable securities (including common units and convertible preferred units), warrants or options, will dilute the holdings
of our existing common stockholders and such issuances or the perception of such issuances may reduce the market price of shares
of our common stock. Any convertible preferred units would have, and any series or class of our preferred stock would likely have,
a preference on distribution payments, periodically or upon liquidation, which could eliminate or otherwise limit our ability to
make distributions to common stockholders.
As an “Emerging Growth Company” any
decision to comply with the reduced disclosure requirements applicable to emerging growth companies could make our common stock
less attractive to investors.
We are an “emerging growth company,”
as defined in the JOBS Act, and, for as long as we continue to be an “emerging growth company,” we may choose to take
advantage of exemptions from various reporting requirements applicable to other public companies but not to “emerging growth
companies,” including, but not limited to, not being required to comply with the auditor attestation requirements of Section
404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in our periodic reports
and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and
shareholder approval of any golden parachute payments not previously approved. We could be an “emerging growth company”
for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our annual gross revenues exceed
$1 billion, (ii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act,
which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business
day of our most recently completed second fiscal quarter, or (iii) the date on which we have issued more than $1 billion in non-convertible
debt during the preceding three year period.
In addition, Section 107 of the JOBS Act
also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section
7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth
company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.
We have elected to opt into the extended transition period for complying with the revised accounting standards.
Our status as an “Emerging
Growth Company” under the JOBS Act of 2012 may make it more difficult to raise capital.
Because of the exemptions from various
reporting requirements provided to us as an “emerging growth company” and because we will have an extended transition
period for complying with new or revised financial accounting standards, we may be less attractive to investors and it may be difficult
for us to raise additional capital as and when we need it. Investors may be unable to compare our business with other companies
in our industry if they believe that our financial accounting is not as transparent as other companies in our industry. If we are
unable to raise additional capital as and when we need it, our financial condition and results of operations may be materially
and adversely affected.
Our ability to start projects and
raise funding could be adversely impacted by COVID-19 and the stay at home orders of certain states and localities
While the COVID-19 pandemic is adversely
impacting all sectors of the economy, we may be subject to certain specific risks:
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We are attempting to raise capital through an offering pursuant to Regulation A of the Securities Act. Due to economic conditions investors may be hesitant to invest in new and emerging companies.
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Locations where we intend to build facilities and place equipment are currently under stay at home orders from state and local governments that prevent construction and are delaying permitting of potential projects.
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The significant decrease in oil prices lessens the appeal of solar installations as it takes longer to recover the upfront installation costs and makes pricing less competitive against fossil fuels/
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