UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
(Amendment 3)
(Mark One)
☒ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended April 30, 2022
or
☐TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from __________ to __________
Commission file number 001-36843
GREEN STREAM HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Wyoming |
|
20-1144153 |
(State
or other jurisdiction of
incorporation or organization) |
|
(I.R.S.
Employer
Identification No.) |
|
|
|
201 E. Fifth Street, Suite 100
Sheridan, WY
|
|
82801 |
(Address
of principal executive offices) |
|
(Zip
Code) |
(310) 230-0240
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(g) of the
Act:
Title
of each class |
|
Trading
Symbol(s) |
|
Name
of each exchange on which
registered |
Common
Stock, $0.001 par value per share |
|
GSFI |
|
OTC
Markets |
The number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class |
|
Outstanding
as of July 29, 2022 |
Common
Stock, $0.001 par value per share |
|
530,153,815 |
Indicate by check mark if the registrant is a well-known seasoned
issuer, as defined in Rule 405 of the Securities Act. Yes
☐
No ☒
Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the Act. Yes
☐
No ☒
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes ☒ No
☐
Indicate by check mark whether the registrant has submitted
electronically every Interactive Data File required to be submitted
pursuant to Rule 405 of Regulation S-T (§ 232.405) during the
precedent 12 months (or for such shorter period that the registrant
was required to submit such files). Yes ☒ No
☐
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, a
smaller reporting company or an emerging growth company. See the
definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company” and “emerging growth company” in Rule
12b-2 of the Exchange Act.
Large accelerated filer |
|
☐ |
|
Accelerated filer |
|
☐ |
Non-accelerated filer |
|
☒ |
|
Smaller reporting company |
|
☒ |
Emerging growth company |
|
☒ |
|
|
|
|
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.
☐
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
☒
State the aggregate market value of the voting and non-voting
common equity held by non-affiliates computed by reference to the
price at which the common equity was last sold, or the average bid
and asked price of such common equity, as of October 31, 2021:
$0.
DOCUMENTS INCORPORATED BY REFERENCE
None.
INDEX
PART
I |
Item
1. |
Business. |
3 |
Item
1A. |
Risk
Factors. |
12 |
Item
1B. |
Unresolved
Staff Comments. |
28 |
Item
2. |
Properties. |
28 |
Item
3. |
Legal
Proceedings. |
28 |
Item
4. |
Mine
Safety Disclosures. |
28 |
PART
II |
Item
5. |
Market
for Registrant’s Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities. |
29 |
Item
6. |
Selected
Financial Data. |
31 |
Item
7. |
Management’s
Discussion and Analysis of Financial Condition and Results of
Operation. |
31 |
Item
7A. |
Quantitative
and Qualitative Disclosures About Market Risk. |
34 |
Item
8. |
Financial
Statements and Supplementary Data. |
34 |
Item
9. |
Changes
in and Disagreements With Accountants on Accounting and Financial
Disclosure. |
36 |
Item
9A. |
Controls
and Procedures. |
36 |
Item
9B. |
Other
Information. |
36 |
PART
III |
Item
10. |
Directors,
Executive Officers and Corporate Governance. |
37 |
Item
11. |
Executive
Compensation. |
39 |
Item
12. |
Security
Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters. |
39 |
Item
13. |
Certain
Relationships and Related Transactions, and Director
Independence. |
41 |
Item
14. |
Principal
Accounting Fees and Services. |
41 |
PART
IV |
Item
15. |
Exhibits,
Financial Statement Schedules. |
42 |
SIGNATURES |
43 |
PART I
Green Stream Holdings Inc. (the “Company”) is a provider of
next-generation solar energy solutions to underrepresented and/or
growing market segments. The Company is currently targeting
high-growth solar market segments for its advanced solar power
generation systems (“solar systems”), operating in multiple markets
and is prepared for conducting business in several
industry-friendly locations including California, Nevada, Arizona,
Washington, New York, New Jersey, Massachusetts, New Mexico,
Colorado, Hawaii, and Canada. Our business office is located at 201
E. Fifth Street, Suite 100, Sheridan, Wyoming 82801.
The Company was originally incorporated on April 12, 2004, in the
State of Nevada under the name of Ford-Spoleti Holdings, Inc. On
June 4, 2009, the Company merged with Eagle Oil Holding Company, a
Nevada corporation, and the surviving entity, the Company, changed
its name to “Eagle Oil Holding Company, Inc.” On April 25, 2019,
the Company entered into an Acquisition and Merger Agreement
between the Company and Green Stream Finance, Inc., and following
the merger contemplated by such agreement the Company commenced its
current operations (the “Reorganization”) and changed its name to
“Green Stream Holdings Inc.” Effective September 25, 2019, the
Company elected to convert the Company from Nevada corporation to
Wyoming corporation. On December 13, 2019, the Company amended its
articles of incorporation to increase its authorized capital stock
to 10,000,000,000 shares of common stock, par value of $0.001 per
share and 12,000,000 shares shall be shares of preferred stock, par
value of $0.001 per share.
The Company’s common stock is currently quoted on the OTC Markets
under the symbol “GSFI.”.
Recent Developments
On December 28, 2020, the Company’s Board of Directors unanimously
elected to remove Richard Rogers as a member of the Board of
Directors.
On November 9, 2020, the Company was advised that Madeleine
Cammarata had assigned the 600,000 shares of the Registrant’s
Series B Preferred Stock (the “Shares”) to We Work Revocable Trust
in connection with Ms. Cammarata’s succession plan due to her
compromised health conditions. The assignment of the Shares, which
have the right to vote in the aggregate, on all shareholder
matters, votes equal to 99% of the total shareholder vote on any
and all matters which shareholder have the right to vote on,
represented a change in control of the Company.
Also on November 9, 2020, Ms. Cammarata resigned as a member of the
Board of Directors and as the Company’s Chief Executive Officer. In
connection with her resignation, the Company appointed Eric Fain as
a member of the Board of Directors and as Interim Chief Executive
Officer. The Company was advised that Ms. Cammarata subsequently
passed away.
On January 28, 2021, Eric Fain resigned as a member of the Board of
Directors and as the Registrant’s Interim Chief Executive Officer.
To fill the vacancy resulting in Mr. Fain’s resignation, the
Registrant’s Board of Directors appointed James C. DiPrima as a
member of the Board of Directors and as Chief Executive
Officer.
On February 16, 2021, the Company repaid its Convertible Promissory
Notes in favor of Geneva Roth Remark Holdings, Inc., dated October
8, 2020, December 22, 2020 and January 11, 2021, for $181, 923.63
in full satisfaction of these notes, so that the Company has no
further obligations to pay, issue securities to, or otherwise with
respect to Geneva Roth Remark Holdings, Inc. under these notes.
On February 18, 2021, the Company repaid its Convertible Promissory
Note in principal amount of $100,000 in favor of EMA Financial,
LLC, dated November 5, 2020, for $133,775.34 in full satisfaction
of this note, so that the Company has no further obligations to
pay, issue securities to, or otherwise with respect to EMA
Financial, LLC under this note.
On February 24, 2021, the Company repaid its Convertible Promissory
Note in principal amount of $100,000 in favor of Quick Capital,
LLC, dated September 22, 2020, for $106,000, plus a prepayment fee
of $27,200 and an additional $20,000, or a total of $147,200 in
full satisfaction of this note, so the Company has no further
obligations to pay, issue securities to, or otherwise with respect
to Quick Capital, LLC under this note.
Business Overview
Green Stream Finance, Inc., a Wyoming corporation was incorporated
in 2016, and has offices in New York City. The Company is focused
on providing access to solar energy to energy consumers. The
Company is currently operating in multiple markets and is prepared
for conducting business in several industry-friendly locations
including California, Nevada, Arizona, Washington, New York, New
Jersey, Massachusetts, New Mexico, Colorado, Hawaii, and
Canada.
Green Stream Finance, Inc. is a marketer and contractor of solar
systems to underrepresented and/or growing market segments to
homeowners, landowners, commercial building owners in the United
States.
Since the Reorganization, the Company has been involved primarily
in organizational activities as a marketer of solar systems. The
Company has not yet generated any revenues from these activities.
The Company has developed relationships with selective world-class
designers and manufacturers of solar power solutions, such as the
famed architect Anthony Morali of Renewable Energy Development LLC
(“RED”), a leading expert in solar infrastructure design. The
Company hopes to leverage these relationships to offer the unique
solar energy solutions provided by RED and others to the Company’s
customers. The Company currently has no manufacturing or
installation capabilities and will rely upon third-parties like RED
to design, manufacture, and install our solar systems.
The Company will be relying on both Renewable Energy Development
(RED) and Amergy Solar for the development, design and construction
of its projects. The Company anticipates retaining RED for solar
designs and the local building and electrical permitting where
geographically permissible. As set forth in the Letter Agreement,
the Company will use Amergy Solar to provide the engineering,
procurement and construction work for the projects indicated in the
letter agreement and the Registration Statement including the New
York State Energy Research and Development and utility
interconnection applications.
It is anticipated that when projects commence, both RED and Amergy
will each be paid an initial payment upon execution of an agreement
for a particular project. It is also expected that both RED and
Amergy will be paid on a project-by-project basis in installments
as they complete various phases of the project and reach applicable
milestones within respective agreements.
For example, we anticipate paying Amergy an initial payment of
$25,000 when we enter into an agreement for a specific project and
then an additional installment of approximately $65,000 for
materials and to begin mobilization. As with any construction job,
other amounts will be required to be paid based on the size and
complexity of the project. Similarly, the amounts we anticipate
having to pay RED will likely change on a project by project basis
based on the size and wattage of the particular project.
However, we have not yet entered into any specific agreements for
projects with either RED or Amergy and we therefore cannot predict
exactly what such terms will be.
Solar Systems
The Company intends to generate initial revenue by arranging for
the design, installation, operation, maintenance, repair and
replacement of solar systems on the top of buildings pursuant to
leases it has entered into with the owners of these properties,
which leases are discussed in “Plan of Operations” (the Solar
Leases). We currently rely on RED and other vendors for the design,
manufacture and installation of the solar systems we market and
sell. These vendors will be paid on a project by project basis for
the design, materials, manufacturing and installation of each solar
system. We will be required to pay for the products and services
needed to build these systems before their completion and before
these systems will be able to produce electricity, and before we
will be able to generate revenues from the sale of that electricity
to electric utility companies or customers. Once these solar
systems have commenced operations, and depending on the regulatory
regime, electric utility policies and other circumstances of the
areas in which a solar system is built, the Company will then
market net metering agreements under which the electricity
generated by the system is sold to the customer’s local utility
company.
Community Solar
“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 in neighborhoods where they
can provide maximum benefit to people who typically may not have
the ability to use solar power.
We endeavor to make the move to solar energy simple for our
customers by identifying quality product manufacturers and
installers and arranging the financing, design, permitting,
construction and maintenance of our energy solutions. 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 solar systems. Although we have
engaged third-party manufacturers for production and distribution
logistics, we will 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 systems, including those designed
by RED or other comparable designers, 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:
|
● |
Raise
capital to build more solar systems and increase its marketing of
Community Solar projects. |
|
● |
Initiate aggressive online and offline marketing
campaigns to build our brand, market awareness, and
recognition. |
|
● |
Increase sales via increased advertising and
marketing campaigns. |
|
● |
Hire
additional key employees to help strengthen the
Company. |
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 and multi-unit residential owners. Our target market is
commercial building and property owners in New York and New Jersey.
To date, we currently have four (4) Solar Leases with commercial
property owners in New York and New Jersey, and, assuming we are
able to obtain adequate financing, we expect to complete these
systems. As of the date of this registration statement, the Company
was actively seeking to develop the following four (4) leases: 111
Station Road, Bellport, New York; 607 Station Road, Bellport, New
York; and 8012 Tonneli Ave, North Bergen, New Jersey.
Description of Products and Services
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 plan to
first develop solar power generation systems (“solar systems”) at
the locations that are the subject of the Solar Leases, and then
market net metering agreements or community solar solutions to
customers nearby, depending on the regulatory regime, electric
utility policies and other circumstances of the areas in which a
solar system is built.
The Company believes that its revenues in key regions will be
derived directly from agreements that lease solar systems that we
arrange the building of to our customers. Pursuant to these
agreements, the Company, owns, operates, and maintains the solar
system, and a host customer agrees to site the system on its
property. The Company will then attempt to enter into net metering
agreements to sell electric output from the solar services provider
for a predetermined period (usually twenty-five years) to the
host’s local utility. 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. The Company would be responsible for the
development, design, and the administration of the project,
obtaining permits, financing, and managing the solar system, and
well as its installation and maintenance.
The Company does not expect to enter into agreements for the
design, construction or installation of any solar facilities until
it has obtained all necessary approvals for the installation of the
system from local authorities and entered into a net metering
agreement with the applicable utility. Moreover, pursuant to the
terms of the Company’s existing leases, the Company is similarly
not required to pay rent to the owner until it begins generating
revenue through a net metering agreement. If, however, the Company
commences, or engages a contractor to commence, the development,
construction or installation of a solar system prior to entering
into a net metering agreement, there can be no assurance that the
Company will be successful in entering into a net metering
agreement following the facility’s completion and the Company may
be required to seek alternative means to recoup the investment in
the facility, such as a purchase power agreement, for example, of
which there can be no assurance that the Company will be able to
find such an arrangement or find one on terms that are favorable to
the Company.
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 would prepare and submit these agreements on behalf
of our customers to ensure compliance with interconnection rules.
Under this business model, the host customer buys the services
produced by our solar energy solutions rather than the solution
itself.
We expect to function as the project coordinator, arranging the
financing, design, permitting, and construction of the system. We
plan to purchase the solar panels for the project from a PV
manufacturer, who provides warranties for system equipment. The
installers we initially plan to contract with will design the
system, specify the appropriate system components, and may perform
the follow-up maintenance over the life of the PV system. Although
we may eventually develop an in-house team of installers, we
currently do not have such a team. Once the construction agreement
is signed, a typical installation is expected to be completed in
three to six months.
Typical Project Timeline

We plan to offer investors the right to invest in the equity of
specific projects and assign such investors federal and state tax
benefits for which the system is eligible. For example, we expect
to eventually form special purpose entities for each project with
such equity investors to receive and distribute payments to the
investors resulting from the system’s output and related tax
benefits. The utility serving the host customer would provide an
interconnection from the PV system to the grid and continue its
electric service with the host customer to cover the periods during
which the system is producing less than the host’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 from the sales of unused
electricity to the applicable electric utility on a monthly basis,
and the tax credits and incentives assigned to the Company (or the
special purpose vehicle for the project). 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. The Company is
principally targeting the commercial solar space, a market space
that provides significant and longer-term cash-producing
assets.
Some of our projects 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 our solar systems less desirable or cost
effective. See Government Incentives and Policies,
below.
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
systems 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
change 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 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 hopes to rent 50,000 to
100,000 square feet of rooftop space in the near future and to
contract with vendors to install solar systems providing the option
of renewable solar power to local customers.
Plan of Operation
The Company plans to continue to marketing its renewable energy
generation systems, focusing on solar resources, as a replacement
of fossil fuel energy generation equipment. The Company intends to
do this by serving as the administrator of solar system
installations to be provided by the Company’s vendors, and a
coordinating agent for leasing arrangements relating to those
systems. In the next twelve months we intend to focus on projects
in the $50,000 to $5,000,000 range. GSFI will provide financing for
those projects through investment of its own funds, management of
project-specific investor funds, and leasing of solar energy
equipment and components. As of the date of this registration
statement, we have entered into four (4) active Solar Roof Leases
in the New York and New Jersey metropolitan area, each for a term
of twenty-five (25) years at $2,000 per month with annual increases
of 2%. As of the date of this registration statement, the Company
was actively seeking to develop solar systems at the locations
subject to all four (4) of those leases. The leases will not
commence until the Company has arranged for the commencement of
construction of a solar system at the site. The construction of
each solar system will cost the Company approximately $60,000 to
$2,000,000 to build depending on the specifications of the system
and any applicable tax credits. The property owner does not have
the option to purchase the equipment following the termination or
expiration of the lease and it will remain the property of the
Company.
Pursuant to the terms of the Solar Leases, the Company agreed to
lease space from each of the property owners for the siting,
installation, inspection, operation, maintenance, and repair of
solar systems on each of the sites. Each lease is for a term of
twenty-five (25) years for a monthly rental amount of $2,000
payable upon commencement of net metering of commercial revenue
generation. The leases are not automatically renewable by either
party. None of the Solar Leases provide a deadline for completion
of, or a penalty for failure to build an operational solar system
at the locations subject to the Solar Leases. Once a solar system
has become operational at a Solar Lease location, the Company will
receive payment from the sale of the electricity it generates to
the local electric utility, and any corresponding tax credits and
other incentives. The Company may then also enter a PPA with the
lessor of the location in order to sell electricity generated by
the system to the lessor, or make electricity from the system
available to the many potential customers of a community solar
project. The Company is responsible for developing,
installing and designing each solar facility and is the owner of
the solar equipment. The Company has the right to terminate the
Lease at any time without notice to the property owner. Following
the expiration or termination of the lease, the Company will be
required to decommission, dismantle and remove the solar system and
all other installations and to return the property to its condition
before the commencement of the lease.
Timetable for Solar System Installations
Project |
Anticipated Completion
Date |
Anticipated Cost |
Anticipated
Developer |
8012 Tonneli Ave, N. Bergen,
NJ |
March 2022 |
Pending** |
Amergy |
11 Station Road, Bellport,
NY |
April 2022 |
Pending** |
Amergy |
607 Station Road Bellport
NY |
May 2022 |
Pending** |
Amergy |
747 Main Street, New Rochelle,
NY |
May 2022 |
Pending** |
Amergy |
*
Reflects estimates based on future conditions. Actual dates, costs
and related may vary.
** Pending: the Company has not yet fully/sufficiently evaluated
the project to make an estimate.
If the Company is able to raise sufficient funds, it hopes to enter
into larger leases for larger projects to increase its revenue
streams. We currently lack the funding to begin and complete the
construction of one or all of these projects. To effectively fund
our business plan, we will need to raise additional capital and/or
obtain vendor financing for the equipment we intend to purchase. We
have historically raised operating capital through the sale of our
securities or debt. However, there can be no assurance that the
Company will be able to raise sufficient capital on terms
acceptable to the Company to complete any or all of these
projects.
During the third quarter of 2021, we will require approximately $5
million for the design, construction and installment of the
Company’s first four solar facility projects.
During the third quarter of 2021, providing the Company can
complete one or more solar systems at locations under the Solar
Leases, the Company expects to commence revenue generating
operations. If four or more such solar systems are operational, it
is anticipated that revenues from the resale of electricity to the
applicable utilities will generate approximately $50,000 to $60,000
per quarter based on our projections of the amount of power these
systems will generate, and the current amounts the applicable
electric utilities will pay for electricity generated using solar
power.
Thereafter, in the first quarter of 2022, providing the Company has
generated revenue generating operations, the Company anticipates it
will be profitable within the quarter. The Company will continue to
seek additional candidates for leases of the solar systems it
markets and intends to sell and anticipates it will be required to
raise additional capital through the sale of its securities or
debt. However, there can be no assurance that the Company will be
able to raise these funds or that it will be able to do so on terms
that are favorable to the Company.
In the second quarter of 2022, providing the Company has commenced
revenue generating operations, the Company anticipates it will be
profitable within the quarter. The Company will continue to secure
permits for the leasing candidates acquired in the previous
quarters as well as seek additional candidates for leases of the
solar systems it markets and intends to sell. The Company
anticipates it will be required to raise additional capital through
the sale of its securities or debt. However, there can be no
assurance that the Company will be able to raise these funds or
that it will be able to do so on terms that are favorable to the
Company.
Anticipated Milestones
The Company anticipates completing projects it has already started,
and potentially expand with new leases and projects, possibly in
new states, as described in the table below.
Milestone |
Anticipated Commencement
Date |
Completion Date |
Categories of
Expenditures |
8012 Tonneli Ave, N. Bergen
NJ |
November 2021 |
March 2022 |
Contractors, equipment,
transportation, developer |
11 Station Road Bellport
NY |
December 2021 |
April 2022 |
Contractors, equipment,
transportation, developer |
607 Station Road Bellport
NY |
January 2022 |
May 2022 |
Contractors, equipment,
transportation, developer |
747 Main Street, New Rochelle
NY |
January 2022 |
May 2022 |
Contractors, equipment,
transportation, developer |
Expansion New State |
Efforts Expected to Start 3rd Quarter
2021 |
Third Quarter 2022 |
Marketing, Travel,
Consultants, |
Expansion 2nd New State |
Efforts Expected to Start 4th Quarter
2021 |
Fourth Quarter 2022 |
Marketing, Travel,
Consultants, |
The amounts that we actually spend for any specific purpose may
vary significantly, and will depend on a number of factors
including, but not limited to, the pace of the completion of each
solar system, conditions in the markets for the services required
to complete solar systems, changes in or revisions to our marketing
strategies, as well as any applicable legal or regulatory changes
which may occur.
If we are unable to raise the net proceeds from our Regulation A
Offering or other financing activities that we believe are needed
to fund our business plan, we may be required to scale back our
development plans by reducing expenditures for employees,
consultants, business development and marketing efforts, and other
envisioned expenditures. This could reduce our ability to complete
existing solar system projects or initiate new ones, or require us
to seek further funding earlier, or on less favorable terms, than
if we had raised the full amount of the offering.
If management is unable to implement its proposed business plan or
employ alternative financing strategies, it does not presently have
any alternative proposals.
We cannot assure you that our solar systems will be completed in a
timely manner or at all, that we will ever earn revenues sufficient
to support our operations or that we will ever be profitable.
Furthermore, since we have no committed source of financing, we
cannot assure you that we will be able to raise money as and when
we need it to continue our operations. If we cannot raise funds as
and when we need them, we may be required to severely curtail, or
even to cease our operations.
Liquidity and Capital Resources.
At April 30, 2021, the Company had $69,081 of cash and net working
capital was ($736,924) as compared with $14,727 in cash and net
working capital of ($577,062) at April 30, 2020 an increase of
($159,862).
In 2021, funds used by the net loss of ($3,892,896) included:
expenditures for legal and professional fees. Funds were provided
by the sale of the Company’s equity and debt securities. The
Company needs to obtain capital; however, no assurance can be given
that it will be able to obtain this capital on acceptable terms, if
at all. In such an event, this may have a materially adverse effect
on the Company’s business, operating results and financial
condition. If the need arises, the Company may attempt to obtain
funding or pay expenses through the continued sale or issuance of
restricted stock. The Company may also use various types of short
term funding, related party advances and expenses payment deferrals
and external loans. The Company’s auditors have issued a going
concern opinion.
Management is actively exploring additional required funding
through debt or equity financing pursuant to its plan. There is no
assurance that we will be successful in obtaining sufficient
financing on terms acceptable to us to fund continuing operations.
Management believes that the results of the management plan, the
Company’s existing resources and access to the capital markets will
permit us to fund planned operations and expenditures. We believe
that we will need to raise additional capital by way of equity,
debt, debentures, or other methods, to support our anticipated
operational expenses. Management is cautiously optimistic, however,
that it will be able to generate the funding required to fund
operations through the end of the year. However, there can be no
assurance that the Company will be able to raise sufficient capital
on terms acceptable to the Company to complete any or all of these
projects.
Key Suppliers and Contractors
We have established a relationship with Renewable Energy
Development LLC (“RED”), headed by Anthony Morali of Morali
Architects, and plan to work with RED to design, manufacture, and
install the solar panels and complete other relevant services
needed to complete our solar systems. RED is an independent
contractors who performs services when requested by the Company.
The loss of any of our vendors, and particularly RED, since we are
marketing the solutions and designs it provides, would have serious
negative effects on our business, since it would take time for us
to establish relationships with new contractors and suppliers with
similar expertise.
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. |
Employees
The Company has no full-time employees.
Patents and
Trademarks
The
Company holds no patents, nor at this time, has any patent
pending.
The company relies on a combination of trade secrets 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.
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
The Company does not have any plans to manufacture the products it
intends to market, sell and install. The manufacturers of these
products may use, generate, and discharge toxic, volatile, or
otherwise hazardous chemicals and wastes in its research and
development, manufacturing, and construction activities. These
companies will likely 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. If these companies do not comply
with these regulations and are unable to manufacture the products
we intend to market and sell, we may be adversely effected if we
are unable to obtain replacement manufacturers and products which
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 COVID-19 PANDEMIC
The recent COVID-19 pandemic may adversely affect our
business, and ability to file timely and accurate financial
information.
The COVID-19 pandemic has materially and adversely impacted the
U.S. economy and financial markets, with legislative and regulatory
responses including unprecedented monetary and fiscal policy
actions across all sectors, and there is significant uncertainty as
to timing of stabilization and recovery. Because we are in the
development stage, the complete impact on our business from the
recent outbreak of the COVID-19 coronavirus is unknown at this time
and difficult to predict, various aspects of our business are being
adversely affected by it and may continue to be 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/ |
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. 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. As demand for solar
panels may 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 market and sell.
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 of Renewable Energy
Development LLC (“RED”), a leading expert in solar infrastructure
design as the Company’s management does not 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.
Our ability to market and sell solar systems to customers is
unproven.
Our business depends in large part on our ability to market and
sell or lease solar systems. Initially, we plan to have Renewable
Energy Development, LLC to design, manufacture and install the
solar systems to our customers. Our ability market and sell the
solar systems, are and will be subject to risks, including with
respect to:
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our ability to secure necessary
funding; |
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our ability to negotiate and
execute definitive agreements with our various suppliers for
hardware, or services necessary to design or manufacture the solar
systems we intend to market and sell; |
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compliance with environmental,
safety, and similar regulations; |
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delays by us in delivering final
component designs to our suppliers; |
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quality controls that prove to be
ineffective or inefficient; |
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delays or disruptions in our
supply chain including raw material supplies; and |
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our ability to maintain
arrangements on reasonable terms with its manufacturing partners
and suppliers, engineering service providers, delivery partners,
and after sales service providers. |
To date, we have limited experience, as a company, marketing and
selling or leasing our solar systems and therefore cannot assure
you that we will be able to make sales on a level significant
enough to be profitable or to meet customer expectations. Any
failure to do so within our projected costs and timelines would
have a material adverse effect on our business, prospects,
operating results and financial condition.
We require 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 2020 and 2021 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.
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 holder 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 0.1%.
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 sell 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. 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. |
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 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 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. |
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 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. |
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 line
and have been involved primarily in organizational matters. We have
also generated no revenues in this line to date. 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.
Conflict of Interest
The Company is subject to various potential and actual conflicts of
interest arising out of its relationship with its Chief Executive
and Financial Officer and/or affiliates of the Company:
transactions with affiliates of the Chief Executive and Financial
Officer 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
Chief Executive and Financial Officer, agents, employees, and
affiliates with other projects or businesses that they run.
Dealings with the Company
The Chief Executive and Financial Officer controls the business and
affairs of the Company. Consequently, the Chief Executive and
Financial Officer will be able to control his own compensation and
to approve dealings, if any, by the Company with other entities
with which he is also involved. Furthermore, the Chief Executive
and Financial Officer controls the majority of the voting power in
the Company. Although the Chief Executive and Financial Officer
intends to act fairly and in full compliance with his 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.
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.), we own no
patents and 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.
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 Company’s Chief Executive and Financial Officer controls the
business and affairs of the Company. Consequently, the he will be
able to control his own compensation and to approve dealings, if
any, by the Company with other entities with which he is also
involved. Furthermore, the Chief Executive and Financial Officer
controls the majority of the voting power in the Company. Although
the President intends to act fairly and in full compliance with his
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.
Because our Chief Executive Officer, Chief Financial Officer
and Director, controls 99% of the voting power of the outstanding
capital stock, he will effectively control the Company, which in
turn could decrease the price and marketability of the
shares
Mr. DiPrima holds voting control over the 600,000 shares of Series
B Convertible Preferred Stock held by the We Work Revocable Trust.
The Series B Preferred Shares have the right to vote in the
aggregate, on all shareholder matters votes equal to 99% of the
total shareholder vote on any and all shareholder matters. As a
result, Mr. DiPrima will have the ability to control the Company as
follows:
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elect or defeat the election of
our Directors; |
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amend or prevent amendment of our
articles of incorporation or bylaws; |
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effect or prevent a merger, sale
of assets or other corporate transaction; and |
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affect the outcome of any other
matter submitted to the stockholders for vote |
Moreover, because of the significant voting position controlled by
our insider, new investors will not be able to effect a change in
the Company’s business or management, and therefore, shareholders
would be subject to decisions made by Mr. DiPrima. Management’s
stock voting position may discourage a potential acquirer from
making a tender offer or otherwise attempting to obtain control of
the Company; this could reduce our stock price or prevent our
stockholders from realizing a premium over our stock price.
Limitation of Liability of the Company’s Officers and
Directors
To the maximum extent allowed by law, the Company’s Officers 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 the Reorganization, we have been involved primarily in
organizational activities and have no reviews to date. 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 auditors have indicated doubt about our ability to
continue as a going concern.
Our auditors have 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.
We have a history of operating losses and there can be no
assurance that we can achieve or maintain
profitability.
We have a history of operating losses and may not achieve or
sustain profitability due to the competitive and evolving nature of
the industries in which we operate. Our failure to sustain
profitability could adversely affect the Company’s business,
including our ability to raise additional funds.
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 system design, manufacturing, and sales,
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, bylaws and by 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 authorize 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.
Our Solar systems are a relatively new service that exposes
us to many new risks and uncertainties.
Our business model currently focuses on marketing and selling solar
systems. Developing a new service under a new brand with solar
technology 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 these services and
rely on third parties to do so. Our ability to be successful with
our services will depend on a number of factors, including
whether:
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can achieve and maintain customer acceptance of our new
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We
can rapidly develop and successfully introduce our services in
response to changing customer preferences; |
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can maintain an adequate level of service quality over numerous
solar systems, which must be designed, manufactured and introduced
rapidly to keep pace with changing customer preferences and
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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 solar systems;
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can successfully distribute our services through distributors,
wholesalers, internet retailers and traditional retailers (many of
whom distribute products from competing manufacturers) on whom we
are heavily dependent. |
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 business 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. The
trading volume of our Common Stock may be and has been limited and
sporadic. This situation is attributable to a number of factors,
including the fact that we are a small company that is relatively
unknown to stock analysts, stock brokers, institutional investors
and others in the investment community that generate or influence
sales volume, and that even if we came to the attention of such
persons, they may tend to be risk-averse and would be reluctant to
follow an unproven company such as ours or purchase or recommend
the purchase of our shares of Common Stock until such time as we
became more seasoned and viable. As a consequence, there may be
periods when trading activity in our shares is minimal, as compared
to a seasoned issuer that has a large and steady volume of trading
activity that will generally support continuous sales without an
adverse effect on share price. We cannot give any assurance that a
broader or more active public trading market for our common stock
will develop or be sustained, or that current trading levels will
be sustained.
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.
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 registration statement; |
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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. |
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. 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.
Item
1B. |
Unresolved Staff Comments. |
None.
The Company leases the premises located at 60 East 42nd Street,
Suite 4600, New York, NY 10165 on a month to month basis at the
rate of $600 per month.
The Company additionally leases the premises located at and known
as Old Depot Building, 201 E. 5th Street, Sheridan, WY
82801 as per the lease agreement dated August 22, 2019 (the
“Wyoming Lease”). The lease is for a term of 24 months at $350 per
month.
Item
3. |
Legal Proceedings. |
From time to time, we may become involved in various legal
proceedings, which arise, in the ordinary course of business.
However, litigation is subject to inherent uncertainties, and an
adverse result in these or other matters may arise from time to
time that may compromise our business.
There are no legal proceedings against the Company to the best of
the Company’s knowledge as of the date hereof and to the Company’s
knowledge, no action, suit or proceeding has been threatened
against the Company.
Item
4. |
Mine Safety Disclosures. |
Not applicable.
PART II
Item
5. |
Market for Registrant’s Common Equity, Related
Stockholder Matters and Issuer Purchases of Equity
Securities. |
As of August 13, 2021 there were approximately 342 holders of
record of our common stock.
Dividends. We have never declared or paid any cash
dividends on our common stock nor do we anticipate paying any in
the foreseeable future. We expect to retain any future earnings to
finance our operations and expansion. The payment of cash dividends
in the future will be at the discretion of our Board of Directors
and will depend upon our earnings levels, capital requirements, any
restrictive loan covenants and other factors the Board considers
relevant. On December 15,
2020, Green Stream Holdings, Inc. (the “Company”) announced that
its board of directors declared a stock dividend of one (1) share
of the Company’s common stock for each one hundred (100) shares of
held on January 1, 2021 (the “Record Date”). On March 26, 2021, the
Board of Directors of Green Stream Holdings, Inc. (the “Company”)
authorized a stock dividend of one (1) share of the Company’s
common stock, par value $0.001 par value (the “Common Stock”), for
each one hundred (100) shares of Common Stock held on May 1, 2021
(the “Record Date”).
Equity Compensation Plans. We do not have any equity
compensation plans.
Penny Stock Considerations
Our shares are considered “penny stocks,” as that term is generally
defined in the Securities Exchange Act of 1934 to mean equity
securities with a price of less than $5.00. Thus, our shares will
be subject to rules that impose sales practice and disclosure
requirements on broker-dealers who engage in certain transactions
involving a penny stock.
Under the penny stock regulations, a broker-dealer selling a penny
stock to anyone other than an established customer must make a
special suitability determination regarding the purchaser and must
receive the purchaser's written consent to the transaction prior to
the sale, unless the broker-dealer is otherwise exempt.
In addition, under the penny stock regulations, the broker-dealer
is required to:
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Deliver, prior to any transaction involving a
penny stock, a disclosure schedule prepared by the Securities and
Exchange Commission relating to the penny stock market, unless the
broker-dealer or the transaction is otherwise exempt; |
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Disclose commissions payable to the broker-dealer
and our registered representatives and current bid and offer
quotations for the securities; |
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Send monthly statements disclosing recent price
information pertaining to the penny stock held in a customer's
account, the account's value, and information regarding the limited
market in penny stocks; and |
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Make a special written determination that the
penny stock is a suitable investment for the purchaser and receive
the purchaser's written agreement to the transaction, prior to
conducting any penny stock transaction in the customer's
account. |
Because of these regulations, broker-dealers may encounter
difficulties in their attempt to sell shares of our common stock,
which may affect the ability of holders to sell their shares in the
secondary market and have the effect of reducing the level of
trading activity in the secondary market. These additional sales
practice and disclosure requirements could impede the sale of our
securities, if our securities become publicly traded. In addition,
the liquidity for our securities may be decreased, with a
corresponding decrease in the price of our securities.
Our shares are subject to such penny stock rules and our
shareholders will, in all likelihood, find it difficult to sell
their securities.
Sales of Unregistered Securities for the year ended April 30,
2021.
In February of 2019, the Company acquired Green Stream Finance Inc.
and the President of Green Stream Finance, Madeleine Cammarata was
issued 600,000 founder Preferred B shares and became the President
of the Company. The Preferred B shares would be convertible at a
rate of 1,000,000 common shares for each share of Preferred B. The
President correspondingly has 600,000,000,000 voting common shares
at her control.
On April 29, 2019, the Company effected a reverse split of its
common stock on the basis of 30,000 old common shares for 1 new
common share. 25,497,233 shares of the common stock were then
issued in exchange for the shares of Green Stream Finance Inc.
On December 2, 2019, the Company issued a total of 266,665 shares
to 5 people pursuant to a settlement agreement.
On December 11, 2019 the company agreed to pay Cheryl Hintzen
$40,000 in the form of a promissory note with a term of one year at
10 % interest compounded annually. The Company accrued interest for
the six months ended October, 31, 2020 in the amount of $2,017. On
January 8, 2020 the Company signed a promissory note for $8,000
with Cheryl Hintzen. The note becomes due on March 8, 2020 and
carries a per annum interest rate of 10%. The Company accrued
interest for the Six months ended October 31, 2020 in the amount of
$651.
On February 21, 2020 the Company borrowed $25,000 from GPL Ventures
with interest at a rate of 10% and a due date of July 31, 2020.
On March 12, 2020 the Company agreed to pay Dr. Jason Cohen
1,000,000 shares at a valuation of $.20 per share plus 8 % interest
until the shares are issued. The interest accrued through October
31. 2020 is $10,213.70.
In the month July 13, 2020 the Company borrowed $250,000 from
Leonite Capital on a senior convertible note maturing in 6 months.
The note had an Original Issue Discount of 10% and carries an
interest rate of 12% annually. Additionally the lender received
1,500,000 shares of restricted common shares. The Note converts at
the rate of $.10 per share had the Company has reserved 60,000,000
common shares for the conversion. For the six months ended October
31, 2020 $8,371.39 interest was accrued for this note.
On September 17, 2020 the Company borrowed $100,000 from Quick
Capital LLC on a senior convertible note maturing in 12 months at
an interest rate of 10%. Additionally the lender received 1,000,000
shares of restricted common shares. For the six months ended
October 31, 2020 $1,205.48 interest was accrued for this note.
On October 10, 2020 the Company borrowed $65,000 from Geneva Roth
Remark Holdings Inc. on a senior convertible note maturing in 12
months at an interest rate of 10%. The Note converts at the rate of
42% discount to Market Price for restricted common shares. For the
six months ended October 31, 2020 $409.59 interest was accrued for
this note.
All of the securities referred to, above, were issued without
registration under the Securities Act of 1933, as amended (the
“Securities Act”) in reliance on the exemptions provided by Section
4(a)(2) of the Securities Act as provided in Rule 506(b) of
Regulation D promulgated thereunder. All of the foregoing
securities as well the Common Stock issuable upon conversion or
exercise of such securities, have not been registered under the
Securities Act or any other applicable securities laws and are
deemed restricted securities, and unless so registered, may not be
offered or sold in the United States except pursuant to an
exemption from the registration requirements of the Securities
Act.
Item
6. |
Selected Financial Data. |
We are a smaller reporting company as defined by 17 C.F.R.
229(10)(f)(i) and are not required to provide the information under
this heading.
Item
7. |
Management’s Discussion and Analysis of
Financial Condition and Results of Operations. |
The following Management’s Discussion and Analysis and Results of
Operations contains forward-looking statements. Forward-looking
statements reflect management’s current expectations and are
inherently uncertain. Our actual results may differ significantly
from management’s expectations.
The Company has yet to generate revenue from its operations during
the fiscal year ended April 30, 2022 and it has not had material or
consistent revenue in each of the last two fiscal years. In order
for the Company to maintain and expand its operations through the
next 12 months, it must: 1. Continue to raise through capital
infusions, either by means of equity or debt offerings, a minimum
of $1 million and up to $5 million; or 2. Continue to secure
license and development agreements that provide up-front fees or
guaranteed, royalties, in a minimum amount of $1 million and up to
$5 million. The Company has prepared filings with the Securities
and Exchange Commission to become a fully reporting registrant
under the Securities and Exchange Act of 1934, as amended.
Management believes that this action will allow the Company to move
its common stock to a more stable market exchange, and provide
greater transparency to the Company’s operations, both necessary
steps towards attracting institutional investors. During the fiscal
year ended April 30, 2020, the Company also received purchase
orders for multiple solar projects. The Company has secured two new
Community Solar Project agreements (the "Agreement") with Cube
Smart Self Storage of Hackensack, NJ ("Cube Smart"). The new
locations are anticipated to produce an additional $6.6 million in
revenues, that’s in addition to the previously announced $3.9
million totaling $9.9 million for the entire project over a period
of 25 years. The Company incurred net losses for the years ended
April 30, 2021 and 2022 of ($8,956,197) and ($3,805,472),
respectively. Cumulative losses since inception are ($14,258,484).
The Company has a working capital deficit at April 30, 2022 of
$3,861. Despite the current private stock offerings and new
contracts, there is no guarantee whether the Company will be able
to support its operations on a long term basis. This raises doubt
about the Company’s ability to continue as a going concern. If
additional funds cannot be raised or otherwise generated, the
Company may be forced to reduce staff, minimize its research and
development activities, or in a worst case scenario, shut-down
operations. However, management is cautiously optimistic that they
can continue to improve operations and raise the appropriate funds
to grow their underlying business. As explained above, the Company
is currently raising working capital to fund its operations via
private placements of common stock, and has ongoing and pending
contracts that are expected to generate operating cash to support
operations well into 2023. Despite its limited cash resources, the
Company is able to retain engineering, consulting, legal and
accounting personnel partially through the raising of interim
working capital. The Company has substantial Commitments for
Capital Expenditures. In 2021 the Company acquired $265,021 of
property and equipment. It does not immediately anticipate a
further purchase of facilities or significant equipment.
Results of Operations Year Ended April 30, 2021 Compared to Year
Ended April 30, 2022
For the year ending April 30, 2022, the Company’s gross margin was
0% as a percentage of net sales as it was in 2021. Management does
not place great weight on these gross profit results at this time,
as sales revenue and cost of goods sold figures are in an early
stage of developing and refinement.
Operating Expenses
Operating Expenses incurred for the year ending April 30, 2021 were
$8,369,327 compared to $3,121,994 for the year ending April 30,
2022, a decrease of $5,150,725. The majority of the decrease was
due to additional general and administrative expenses in the
previous year reflective of the additional legal and accounting to
move the Company toward being fully reporting. In 2021, the Company
recognized a loss of $159,050 pursuant to converting debt into
common stock. Income and Earnings per Share. Net loss per weighted
average share was ($0.06) for 2021 and ($0.007) for 2022.
Liquidity and Capital Resources
In the year ended April 30, 2022, the Net Cash Flow used in
Operations was $1,924,016 compared to $3,779,159 for the year ended
April 30,201. In the year ended April 30, 2022, the Net Cash Flow
used in Investing was $781,865 compared to $365,021 for the year
ended April 30, 2021. In the year ended April 30, 2022, the Net
Cash Flow provided by financing activities was $2,705,881 compared
to $4,029,478 for the year ended April 30, 2021. The Company needs
to obtain capital; however, no assurance can be given that it will
be able to obtain this capital on acceptable terms, if at all. In
such an event, this may have a materially adverse effect on the
Company’s business, operating results and financial condition. If
the need arises, the Company may attempt to obtain funding or pay
expenses through the continued sale or issuance of restricted
stock. The Company may also use various types of short term
funding, related party advances and expenses payment deferrals and
external loans. The Company’s auditors have issued a going concern
opinion. Management is cautiously optimistic, however, that it will
be able to generate the funding required to continue and expand its
operations over the long term, and believes that it currently has
cash reserves and cash commitments available to fund operations
through the end of the year or longer.
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements at
this time.
Plan of Operations
The Company plans to continue to marketing its renewable energy
generation systems, focusing on solar resources, as a replacement
of fossil fuel energy generation equipment. The Company intends to
do this by serving as the administrator of solar system
installations to be provided by the Company’s vendors, and a
coordinating agent for leasing arrangements relating to those
systems. In the next twelve months we intend to focus on projects
in the $50,000 to $5,000,000 range. GSFI will provide financing for
those projects through investment of its own funds, management of
project-specific investor funds, and leasing of solar energy
equipment and components. As of the date of this annual statement,
we are currently engaged if four (4) Solar Roof Leases in the New
York and New Jersey metropolitan area, each for a term of
twenty-five (25) years at $2,000 per month with annual increases of
2%. As of the date of this annual statement, the Company was
actively seeking to develop solar systems at all the locations
subject to our leases. The leases will not commence until the
Company has arranged for the commencement of construction of a
solar system at the site. The construction of each solar system
will cost the Company approximately $60,000 to $2,000,000 to build
depending on the specifications of the system and any applicable
tax credits.
Pursuant to the terms of the Solar Leases, the Company agreed to
lease space from each of the property owners for the siting,
installation, inspection, operation, maintenance, and repair of
solar systems on each of the sites. Each lease is for a term of
twenty-five (25) years for a monthly rental amount of $2,000
payable upon commencement of net metering of commercial revenue
generation. None of the Solar Leases provide a deadline for
completion of, or a penalty for failure to build an operational
solar system at the locations subject to the Solar Leases. Once a
solar system has become operational at a Solar Lease location, the
Company will receive payment from the sale of the electricity it
generates to the local electric utility, and any corresponding tax
credits and other incentives. The Company may then also enter a PPA
with the lessor of the location in order to sell electricity
generated by the system to the lessor, or make electricity from the
system available to the many potential customers of a community
solar project. The Company is responsible for developing,
installing and designing each solar facility and is the owner of
the solar equipment and the property owner shall have the right to
purchase the equipment after twenty (20) years. The Company has the
right to terminate the Lease at any time without notice to the
property owner. Following the expiration or termination of the
lease, the Company will be required to decommission, dismantle and
remove the solar system and all other installations and to return
the property to its condition before the commencement of the
lease.
Timetable for Solar System Installations
Project |
Anticipated
Completion Date |
Anticipated
Cost |
Anticipated
Developer |
8012
Tonneli Ave, N. Bergen, NJ |
November,
2022 |
Pending** |
Amergy |
11
Station Road, Bellport, NY |
December,
2022 |
Pending** |
Amergy |
607
Station Road, Bellport, NY |
January,
2023 |
Pending** |
Amergy |
747
Main Street, New Rochelle NY |
January
2023 |
Pending** |
Amergy |
*
Reflects estimates based on future conditions. Actual dates, costs
and related may vary.
** Pending: the Company has not yet fully/sufficiently evaluated
the project to make an estimate.
If the Company is able to raise sufficient funds, it hopes to enter
into larger leases for larger projects to increase its revenue
streams. To effectively fund our business plan, we will need to
raise additional capital. However, there can be no assurance that
the Company will be able to raise sufficient capital on terms
acceptable to the Company to complete any or all of these
projects.
During the first calendar quarter of 2022, we will require
approximately $7 million of which approximately $2 million will be
used to repay the Company’s currently outstanding convertible notes
and approximately $5 million will be used for the design,
construction and installment of the Company’s first four or five
solar facility projects.
During the second calendar quarter of 2022, providing the Company
can complete one or more solar systems at locations under the Solar
Leases, the Company expects to commence revenue generating
operations. If four or more such solar systems are operational, it
is anticipated that revenues from the resale of electricity to the
applicable utilities will generate approximately $50,000 to $60,000
per quarter based on the projections we received from Amergy as to
the amount of power these systems will generate, and the current
amounts the applicable electric utilities will pay for electricity
generated using solar power. However, there can be no assurance
that these facilities will ever generate revenues or in the amounts
we are anticipating.
Thereafter, in the third quarter of 2022, providing the Company has
generated revenue generating operations, the Company anticipates it
will be profitable within the quarter. The Company will continue to
seek additional candidates for leases of the solar systems it
markets and intends to sell and anticipates it will be required to
raise additional capital through the sale of its securities or
debt. However, there can be no assurance that the Company will be
able to raise these funds or that it will be able to do so on terms
that are favorable to the Company.
Anticipated Milestones
The Company anticipates completing projects it has already started,
and potentially expand with new leases and projects, possibly in
new states, as described in the table below.
Milestone |
Anticipated
Commencement Date |
Completion
Date |
Categories
of Expenditures |
8012
Tonneli Ave, N. Bergen NJ |
November
2022 |
March
2022 |
Contractors,
equipment, transportation, developer |
11
Station Road Bellport NY |
December
2022 |
April
2022 |
Contractors,
equipment, transportation, developer |
607
Station Road Bellport NY |
January
2023 |
May
2022 |
Contractors,
equipment, transportation, developer |
747
Main Street, New Rochelle NY |
January
2023 |
May
2022 |
Contractors,
equipment, transportation, developer |
Expansion
New State |
Efforts
Expected to Start 3rd Quarter 2022 |
Third
Quarter 2022 |
Marketing,
Travel, Consultants |
Expansion
2nd New State |
Efforts
Expected to Start 4th Quarter 2022 |
Fourth
Quarter 2022 |
Marketing,
Travel, Consultants |
The amounts that we actually spend for any specific purpose may
vary significantly, and will depend on a number of factors
including, but not limited to, the pace of the completion of each
solar system, conditions in the markets for the services required
to complete solar systems, changes in or revisions to our marketing
strategies, as well as any applicable legal or regulatory changes
which may occur.
If we are unable to raise the net proceeds from our Offering or
other financing activities that we believe are needed to fund or
business plan, we may be required to scale back our development
plans by reducing expenditures for employees, consultants, business
development and marketing efforts, and other envisioned
expenditures. This could reduce our ability to complete existing
solar system projects or initiate new ones, or require us to seek
further funding earlier, or on less favorable terms, than if we had
raised the full amount of the offering.
If management is unable to implement its proposed business plan or
employ alternative financing strategies, it does not presently have
any alternative proposals.
We cannot assure you that our solar systems will be completed in a
timely manner or at all, that we will ever earn revenues sufficient
to support our operations or that we will ever be profitable.
Furthermore, since we have no committed source of financing, we
cannot assure you that we will be able to raise money as and when
we need it to continue our operations. If we cannot raise funds as
and when we need them, we may be required to severely curtail, or
even to cease our operations.
Critical Accounting Policies and Estimates
This discussion and analysis of our financial condition and results
of operations are based on our financial statements that have been
prepared under accounting principle generally accepted in the
United States of America. The preparation of financial statements
in conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and
assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results
could differ from those estimates.
A summary of significant accounting policies is included in Note 2
to the consolidated financial statements included in this
Registration Statement. Of these policies, we believe that the
following items are the most critical in preparing our financial
statements.
Use of Estimates
Preparing financial statements in conformity with accounting
principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect
the reported amounts of assets, liabilities, revenue, and expenses.
Actual results and outcomes may differ from management’s estimates
and assumptions.
Stock-Based Compensation
The Company accounts for its stock-based compensation in accordance
with ASC 718, Compensation — Stock Compensation, which requires the
measurement and recognition of compensation expense for all
share-based payment awards made to employees and directors to be
recognized in the financial statements, based on their fair value.
The Company measures share-based compensation to consultants in
accordance with ASC 505-50, Equity-Based Payments to Non-Employees,
and recognizes the fair value of the award over the period the
services are rendered or goods are provided.
Most Recent accounting pronouncements
Refer to Note 1 in the accompanying consolidated financial
statements.
Impact of Most Recent Accounting Pronouncements
There were no recent accounting pronouncements that have had a
material effect on the Company’s financial position or results of
operations.
Item
7A. |
Quantitative and Qualitative Disclosures About
Market Risk. |
Not Applicable
Item
8. |
Financial Statements and Supplementary
Data. |
The consolidated condensed financial statements and the Report of
Independent Registered Accounting Firm thereon are filed pursuant
to this Item 8 and are included in this report beginning on page
F-1.
Green Stream
Holdings, Inc.
CONSOLIDATED BALANCE SHEET
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
April 30, 2022
|
|
|
April 30, 2021 |
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
Current Assets |
|
|
|
|
|
|
|
|
Cash |
|
$ |
25 |
|
|
$ |
25 |
|
Total Current
Assets |
|
|
25 |
|
|
|
25 |
|
|
|
|
|
|
|
|
|
|
Fixed Assets |
|
|
|
|
|
|
|
|
Furniture and
equipment net of depreciation (Note 3) |
|
|
620,951 |
|
|
|
1,135,615 |
|
Other Assets |
|
|
|
|
|
|
|
|
Intangible asset, net of amortization (Note 4) |
|
|
725,935 |
|
|
|
– |
|
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS |
|
$ |
1,241,771 |
|
|
$ |
1,135,640 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY (DEFICIT) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
|
|
Current
Liabilities |
|
|
|
|
|
|
|
|
Accounts
Payable |
|
$ |
117,574 |
|
|
$ |
89,448 |
|
Other Current
Liabilities |
|
|
– |
|
|
|
– |
|
Accrued Interest
Payable |
|
|
66,558 |
|
|
|
10,872 |
|
Due to related
party (Note 7) |
|
|
– |
|
|
|
225,077 |
|
Notes Payable
(Note 8) |
|
|
311,900 |
|
|
|
311,900 |
|
Convertible Notes Payable (Note 9) |
|
|
749,600 |
|
|
|
290,000 |
|
Total Current
Liabilities |
|
|
1,245,632 |
|
|
|
927,297 |
|
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES |
|
|
1,245,632 |
|
|
|
927,297 |
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’
EQUITY/(DEFICIT) |
|
|
|
|
|
|
|
|
Preferred A Stock, $.001 par value
1,000,000
Authorized
53,000
Issued and Outstanding at April 30, 2022 and at April 30, 2021
respectively |
|
|
53 |
|
|
|
53 |
|
Preferred B Stock, $.001 par value
1,000,000
Authorized
600,000
Issued and Outstanding at April 30, 2022 and at April 30, 2021
respectively |
|
|
600 |
|
|
|
600 |
|
Preferred C Stock, $.001 par value
10,000,000
Authorized
760,000
Issued and Outstanding at April 30, 2022 and at April 30, 2021
respectively |
|
|
760 |
|
|
|
760 |
|
Common
Stock, $.001 par value 10,000,000,000
Authorized 530,153,815 Issued
and Outstanding at April 30, 2022 and 159,959,140 at
April 30, 2021 |
|
|
530,154 |
|
|
|
159,959 |
|
Additional paid-in-capital |
|
|
13,723,056 |
|
|
|
9,372,230 |
|
Accumulated deficit |
|
|
(14,258,484 |
) |
|
|
(9,325,259 |
) |
Total
Stockholders’ Equity (Deficit) |
|
|
(3,861 |
) |
|
|
208,343 |
|
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) |
|
$ |
1,241,771 |
|
|
$ |
1,135,640 |
|
The
accompanying notes are an integral part of these financial
statements.
Green Stream
Holdings, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
For The Twelve Months
Ended
April 30,
|
|
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
|
REVENUES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales |
|
$ |
– |
|
|
$ |
– |
|
|
|
|
|
|
|
|
|
|
TOTAL
REVENUE |
|
|
– |
|
|
|
– |
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Administrative
expenses |
|
|
55,932 |
|
|
|
355,678 |
|
Advertising |
|
|
807,329 |
|
|
|
949,958 |
|
Depreciation |
|
|
60,080 |
|
|
|
45,060 |
|
Insurance |
|
|
38,009 |
|
|
|
30,670 |
|
Legal Fees |
|
|
498,469 |
|
|
|
590,045 |
|
Professional
Fees |
|
|
261,912 |
|
|
|
1,066,797 |
|
Rent |
|
|
99,390 |
|
|
|
137,444 |
|
Transfer
Agent |
|
|
36,922 |
|
|
|
46,590 |
|
Stock in lieu of
services |
|
|
1,121,910 |
|
|
|
4,898,745 |
|
Travel |
|
|
409,953 |
|
|
|
248,340 |
|
Total
Operating expenses |
|
|
3,121,994 |
|
|
|
8,369,327 |
|
|
|
|
|
|
|
|
|
|
NET OPERATING INCOME/ LOSS |
|
|
(3,121,994 |
) |
|
|
(8,369,327 |
) |
|
|
|
|
|
|
|
|
|
OTHER
INCOME/(EXPENSES): |
|
|
|
|
|
|
|
|
Write off of
Impaired assets |
|
|
(615,654 |
) |
|
|
(185,000 |
) |
Prior Management
Settlement |
|
|
|
|
|
|
(183,000 |
) |
Finance
and interest fees |
|
|
(67,824 |
) |
|
|
(218,870 |
) |
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS) |
|
$ |
(3,805,472 |
) |
|
$ |
(8,956,197 |
) |
|
|
|
|
|
|
|
|
|
Basic Loss per
Common Share |
|
$ |
(0.007 |
) |
|
$ |
(0.06 |
) |
Diluted Loss
per Common Share |
|
$ |
(0.007 |
) |
|
$ |
(0.06 |
) |
|
|
|
|
|
|
|
|
|
Weighted
Average Number of Common Shares Outstanding, Basic |
|
|
530,153,815 |
|
|
|
159,959,140 |
|
Weighted
Average Number of Common Shares Outstanding, Diluted |
|
|
530,153,815 |
|
|
|
159,959,140 |
|
The accompanying notes are an integral part of these financial
statements.
Green Stream Holdings, Inc.
CONSOLIDATED
STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
For The Twelve Months Ended April 30, 2022
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred Shares |
|
Common Stock |
|
Additional
Paid-In
|
|
|
Accumulated |
|
|
Total
Stockholders' |
|
|
|
Shares |
|
Value |
|
Shares |
|
Amount |
|
Capital |
|
|
Deficit |
|
|
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, April 30, 2019 |
|
1,413,000 |
|
$ |
1,413 |
|
25,834,000 |
|
$ |
25,834 |
|
$ |
1,073,471 |
|
|
$ |
(112,714 |
) |
|
$ |
988,004 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of Common Shares for
financing |
|
– |
|
|
– |
|
600,000 |
|
|
600 |
|
|
– |
|
|
|
– |
|
|
|
600 |
|
Issuance of Common Shares for
Settlement with Prior Management |
|
– |
|
|
– |
|
266,655 |
|
|
267 |
|
|
(208,931 |
) |
|
|
– |
|
|
|
(208,664 |
) |
Net Loss April 30, 2020 |
|
– |
|
|
– |
|
– |
|
|
– |
|
|
– |
|
|
|
(256,348 |
) |
|
|
(256,348 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance April 30, 2020 |
|
1,413,000 |
|
$ |
1,413 |
|
26,700,655 |
|
$ |
26,701 |
|
$ |
864,540 |
|
|
$ |
(369,062 |
) |
|
$ |
523,592 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common shares for
Liabilities |
|
– |
|
|
– |
|
1,000,000 |
|
|
1,000 |
|
|
28,000 |
|
|
|
– |
|
|
|
29,000 |
|
Issuance of Common Shares for
Services |
|
– |
|
|
– |
|
24,720,000 |
|
|
24,720 |
|
|
4,874,025 |
|
|
|
– |
|
|
|
4,898,745 |
|
Issuance of Common Shares for REG
A |
|
– |
|
|
– |
|
104,581,257 |
|
|
104,581 |
|
|
3,606,389 |
|
|
|
– |
|
|
|
3,710,970 |
|
Issuance of Common Shares for Stock
Dividend |
|
– |
|
|
– |
|
723,893 |
|
|
724 |
|
|
(724 |
) |
|
|
– |
|
|
|
– |
|
Cancellation of Common Shares for
Settlement Shares issued for settlement |
|
– |
|
|
– |
|
2,233,335 |
|
|
2,233 |
|
|
– |
|
|
|
– |
|
|
|
2,233 |
|
Net Loss April 30, 2021 |
|
– |
|
|
– |
|
– |
|
|
– |
|
|
– |
|
|
|
(8,956,197 |
) |
|
|
(8,956,197 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance April 30, 2021 |
|
1,413,000 |
|
$ |
1,413 |
|
159,959,140 |
|
$ |
159,959 |
|
$ |
9,372,230 |
|
|
$ |
(9,325,259 |
) |
|
$ |
208,343 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of Common shares for
services |
|
– |
|
|
– |
|
16,143,000 |
|
|
16,143 |
|
|
1,105,767 |
|
|
|
– |
|
|
|
1,122,910 |
|
Issuance of Common shares for REG
A |
|
– |
|
|
– |
|
167,729,184 |
|
|
167,729 |
|
|
3,050,740 |
|
|
|
– |
|
|
|
3,218,469 |
|
Issuance of Common shares for Debt
Conversion |
|
– |
|
|
– |
|
184,597,216 |
|
|
184,597 |
|
|
196,044 |
|
|
|
(1,127,753 |
) |
|
|
(747,112 |
) |
Issuance of Common shares for Stock
Dividend |
|
– |
|
|
– |
|
1,725,275 |
|
|
1,725 |
|
|
(1,725 |
) |
|
|
– |
|
|
|
– |
|
Net Loss April 30, 2022 |
|
– |
|
|
– |
|
– |
|
|
– |
|
|
– |
|
|
|
(3,805,472 |
) |
|
|
(3,805,472 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance April 30, 2022 |
|
1,413,000 |
|
$ |
1,413 |
|
530,153,815 |
|
$ |
530,154 |
|
$ |
13,723,056 |
|
|
$ |
(14,258,484 |
) |
|
$ |
(3,861 |
) |
The accompanying notes are an integral part of these financial
statements.
Green Stream Holdings, Inc.
CONSOLIDATED
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
For
the Twelve Months Ended |
|
|
|
April 30, 2022 |
|
|
April 30, 2021 |
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES |
|
|
|
|
|
|
|
|
Net
loss for the period |
|
$ |
(3,805,472 |
) |
|
$ |
(8,956,197 |
) |
Adjustments to reconcile net loss to
net cash provided by operating activities: |
|
|
|
|
|
|
|
|
Amortization |
|
|
|
|
|
|
|
|
Depreciation |
|
|
60,080 |
|
|
|
45,060 |
|
Impairment
expense |
|
|
615,654 |
|
|
|
185,000 |
|
Shares issued for
settlement |
|
|
– |
|
|
|
2,233 |
|
Shares issued for
services |
|
|
1,121,910 |
|
|
|
4,898,745 |
|
Discount
amortization |
|
|
– |
|
|
|
55,000 |
|
Changes in operating assets and
Liabilities: |
|
|
|
|
|
|
|
|
Increase/
(decrease) in accrued interest payable |
|
|
55,686 |
|
|
|
6,000 |
|
Increase/(decrease) in other current liabilities |
|
|
– |
|
|
|
(60,000 |
) |
Increase/ (decrease) in accounts payable |
|
|
28,126 |
|
|
|
45,000 |
|
Net cash used in operating activities |
|
|
(1,924,016 |
) |
|
|
(3,779,159 |
) |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
Acquisition of
Assets |
|
|
781,865 |
|
|
|
265,021 |
|
Net cash provided by (used in) investing activities |
|
|
(781,865 |
)) |
|
|
(265,021 |
) |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
Proceeds from
loans from stockholder |
|
|
(225,077 |
) |
|
|
83,508 |
|
Proceeds from
Notes Payable |
|
|
459,600 |
|
|
|
465,000 |
|
Proceeds from sale
of stock |
|
|
3,218,471 |
|
|
|
3,710,970 |
|
Debt
Conversion |
|
|
(747,113 |
) |
|
|
(230,000 |
) |
Net cash provided by (used in) financing activities |
|
|
2,705,881 |
|
|
|
4,029,478 |
|
|
|
|
|
|
|
|
|
|
Net increase
(decrease) in cash and cash equivalents |
|
|
– |
|
|
|
(14,702 |
) |
Cash and
cash equivalents - beginning of period |
|
|
25 |
|
|
|
14,727 |
|
Cash
and cash equivalents - end of period |
|
$ |
25 |
|
|
$ |
25 |
|
|
|
|
|
|
|
|
|
|
NON CASH
TRANSACTIONS |
|
|
|
|
|
|
|
|
Shares issued from liabilities |
|
$ |
– |
|
|
$ |
29,000 |
|
The accompanying notes are an integral part of these financial
statements.
Green Stream Holdings, Inc.
NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
April 30, 2022 and 2021
NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES
A. ORGANIZATION AND OPERATIONS
The Company was originally incorporated on April 12, 2004, in the
State of Nevada under the name of Ford-Spoleti Holdings, Inc. On
June 4, 2009, the Company merged with Eagle Oil Holding Company, a
Nevada corporation, and the surviving entity, the Company, changed
its name to “Eagle Oil Holding Company, Inc.” Inception of the
current Company occurred February 8, 2019 when the Company was
acquired by Green Stream Holdings Inc. Previously there was no
activity from July 31, 2017 until the acquisition of February 8,
2019. On April 25, 2019, the Company changed its name to “Green
Stream Holdings Inc.” and is deemed to be a continuation of
business of Eagle Oil Holding Company, Inc. Additionally, the
Company was reorganized that so that the Company became operating
as a holding company of Green Stream Finance, Inc., a Wyoming
Corporation. That reorganization, inter alia, gave Madeline
Cammarata, President of Green Stream Finance, Inc., the majority of
the voting power in the Company. On April 25, 2019 the Company also
filed the certificate of Amendment to Articles of Incorporation
with the Secretary of State of Nevada providing for reverse stock
split: each thirty thousand shares of common stock of the Company
issued and outstanding immediately prior to the “effective time” of
the filing were automatically and without any action on the part of
the respective holders thereof, be combined and converted into one
(1) share of common stock, provided that no fractional shares were
to be issued in connection with said reverse stock split. On May
15, 2019, the Company filed the articles of conversion with the
secretary of state of Nevada, to convert the company from Nevada
Corporation to Wyoming Corporation. The Company is in good standing
in the State of Wyoming as of September 25, 2019. The Company’s
common shares are quoted on the “Pink Sheets” quotation market
under the symbol “GSFI.”
B. PRINCIPALS OF CONSOLIDATION
These consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiary Green Stream Finance, Inc.
based in the state of Wyoming. All material inter-company balances
and transactions were eliminated upon consolidation.
C. BASIS OF ACCOUNTING
The Company utilizes the accrual method of accounting, whereby
revenue is recognized when earned and expenses when incurred. The
financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial
information. As such, the financial statements do not include all
of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the
opinion of management, all adjustments considered necessary for a
fair presentation have been included and these adjustments are of a
normal recurring nature.
D. USE OF ESTIMATES
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosures of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the period. Actual
results could differ from those estimates.
E. CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash on hand; cash in banks and
any highly liquid investments with maturity of three months or less
at the time of purchase. The Company maintains cash and cash
equivalent balances at several financial institutions, which are
insured by the Federal Deposit Insurance Corporation up to
$250,000.
F. COMPUTATION OF EARNINGS PER SHARE
Net income per share is computed by dividing the net income by the
weighted average number of common shares outstanding during the
period. Due to the net loss, the options and stock conversion of
debt are not used in the calculation of earnings per share because
the stock conversions and options are considered to be
antidilutive.
G. INCOME TAXES
The Company accounts for income taxes under the asset and liability
method. Deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and
liabilities and their respective tax basis and operating loss and
tax credit carry forwards. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are
expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in
income in the period that includes the enactment date.
The Company’s management has reviewed the Company’s tax positions
and determined there were no outstanding, or retroactive tax
positions with less than a 50% likelihood of being sustained upon
examination by the taxing authorities, therefore the implementation
of this standard has not had a material effect on the Company.
H. REVENUE RECOGNITION
Revenue for license fees is recognized upon the execution and
closing of the contract for the amount of the contract. Contract
fees are generally due based upon various progress milestones.
Revenue from contract payments are estimated and accrued as earned.
Any adjustments between actual contract payments and estimates are
made to current operations in the period they are determined.
I. FAIR VALUE MEASUREMENT
The Company determines the fair value of a financial instrument as
the amount at which the instrument could be exchanged in a current
transaction between willing parties, other than in a forced sale or
liquidation. The carrying amounts reported in the balance sheet for
cash, accounts receivable, inventory, and accounts payable and
accrued expenses, and loans payable approximate their fair market
value based on the short-term maturity of these instruments.
Fair value measurements are determined based on the assumptions
that market participants would use in pricing an asset or
liability. US GAAP establishes a hierarchy for inputs used in
measuring fair value that maximizes the use of observable inputs
and minimizes the use of unobservable inputs by requiring that the
most observable inputs be used when available. The established fair
value hierarchy prioritizes the use of inputs used in valuation
methodologies into the following three levels:
· |
Level 1: Quoted prices (unadjusted) for identical assets or
liabilities in active markets. A quoted price in an active market
provides the most reliable evidence of fair value and must be used
to measure fair value whenever available.
|
· |
Level 2: Significant other observable inputs other than Level 1
prices such as quoted prices for similar assets or liabilities;
quoted prices in markets that are not active; or other inputs that
are observable or can be corroborated by observable market
data.
|
· |
Level 3: Significant unobservable inputs that reflect a reporting
entity’s own assumptions about the assumptions that market
participants would use in pricing an asset or liability. For
example, level 3 inputs would relate to forecasts of future
earnings and cash flows used in a discounted future cash flows
method.
|
J. STOCK-BASED COMPENSATION
The Company measures and recognizes compensation expense for all
share-based payment awards made to employees, consultants and
directors including employee stock options based on estimated fair
values. Stock-based compensation expense recognized for the years
ended December 31, 2014 and 2013 was $24,000 and $0 respectively.
Stock-based compensation expense recognized during the period is
based on the value of the portion of share-based payment awards
that vest during the period.
Share-based compensation expense recognized in the Company’s
consolidated statement of operations for the years ended December
31, 2014 included compensation expense for share-based payment
awards granted in December 31, 2014.
K. SALES AND ADVERTISING
The costs of sales and advertising are expensed as incurred. Sales
and advertising expense was $807,329 and $949,958 for the twelve
months ended April 30, 2022 and 2021 respectively.
L. NEW ACCOUNTING PRONOUNCEMENTS
The Company reviews new accounting standards as issued. No new
standards had any material effect on these financial statements.
The accounting pronouncements issued subsequent to the date of
these financial statements that were considered significant by
management were evaluated for the potential effect on these
consolidated financial statements. Management does not believe any
of the subsequent pronouncements will have a material effect on
these consolidated financial statements as presented and does not
anticipate the need for any future restatement of these
consolidated financial statements because of the retro-active
application of any accounting pronouncements issued subsequent to
April 30, 2022 through the date these financial statements were
issued.
M. FURNITURE AND EQUIPMENT
Furniture and equipment are recorded at costs and consists of
furniture and fixtures, computers and office equipment. We compute
depreciation using the straight-line method over the estimated
useful lives of the assets. Expenditures for major betterments and
additions are charged to the property accounts, while replacements,
maintenance, and repairs that do not improve or extend the lives of
the respective assets are charged to expense.
N. INTELLECTUAL PROPERTY
Intangible assets (intellectual property) are recorded at cost and
are amortized over the estimated useful life of the asset.
Management evaluates the fair market value to determine if the
asset should be impaired at the end of each year.
O. IMPAIRMENT OF LONG-LIVED ASSETS
The Company tests long-lived assets or asset groups for
recoverability when events or changes in circumstances indicate
that their carrying amount may not be recoverable. Circumstances
which could trigger a review include, but are not limited to:
significant decreases in the market price of the asset; significant
adverse changes in the business climate or legal factors;
accumulation of costs significantly in excess of the amount
originally expected for the acquisition or construction of the
asset; current period cash flow or operating losses combined with a
history of losses or a forecast of continuing losses associated
with the use of the asset; and current expectation that the asset
will more likely than not be sold or disposed significantly before
the end of its estimated useful life.
Recoverability is assessed based on the carrying amount of the
asset and its fair value which is generally determined based on the
sum of the undiscounted cash flows expected to result from the use
and the eventual disposal of the asset, as well as specific
appraisal in certain instances.
An impairment loss is recognized when the carrying amount is not
recoverable and exceeds fair value.
NOTE 2 – GOING CONCERN AND LIQUIDITY CONSIDERATIONS
The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern, which
contemplates the realization of assets and the liquidation of
liabilities in the normal course of business. At April 30, 2022 the
Company had a loss from operations, for the twelve months ended, of
$3,805,472, and an accumulated deficit of $14,258,484 and negative
working capital of $1,245,607. The Company has not yet established
an ongoing source of revenues sufficient to cover its operating
costs and allow it to continue as a going concern.
The Company depends upon capital to be derived from future
financing activities such as subsequent offerings of its common
stock or debt financing in order to operate and grow the business.
There can be no assurance that the Company will be successful in
raising such capital. The key factors that are not within the
Company's control and that may have a direct bearing on operating
results include, but are not limited to, acceptance of the
Company's business plan, the ability to raise capital in the
future, the ability to expand its customer base, and the ability to
hire key employees to provide services. There may be other risks
and circumstances that management may be unable to predict.
The financial statements do not include any adjustments to reflect
the possible future effects on the recoverability and
classification of assets or the amounts and classification of
liabilities that may result from the possible inability of the
Company to continue as a going concern.
NOTE 3 – PROPERTY AND EQUIPMENT
Property and equipment at April 30, 2022 and April 30, 2021
consists of the following:
Schedule
of property and equipment |
|
|
|
|
|
|
|
|
|
|
April 30, 2022 |
|
|
April 30, 2021 |
|
|
|
|
|
|
|
|
Furniture and
Fixtures |
|
$ |
726,091 |
|
|
$ |
1,180,714 |
|
Less: Accumulated
Depreciation |
|
|
(105,140 |
) |
|
|
(45,060 |
) |
Net Property
and Equipment |
|
$ |
620,951 |
|
|
$ |
1,135,654 |
|
Depreciation expense for the year ended April 30, 2022 was $60,080
and $45,060 for April 30, 2021 respectively. Property and equipment
are recorded at cost. Depreciation is computed on the straight-line
method, based on the estimated useful lives of the assets.
NOTE 4 – INTANGIBLE ASSETS
Intangible Assets at April 30, 2022 and April 30, 2021 consists of
the following:
Schedule
of intangible assets |
|
|
|
|
|
|
|
|
|
|
April 30, 2022 |
|
|
April 30, 2021 |
|
|
|
|
|
|
|
|
Intangible Assets |
|
$ |
185,000 |
|
|
$ |
185,000 |
|
Less: Accumulated Amortization |
|
|
– |
|
|
|
– |
|
Less:
Impairment |
|
|
(185,000 |
) |
|
|
(185,000 |
) |
Net Intangible
Assets |
|
$ |
– |
|
|
$ |
– |
|
The Company determined that the various intellectual properties
acquired in the merger with Eagle Oil will have no value in the
Company’s future projects. At April 30, 2021, the Company has
determined that the intangible asset should be fully impaired as of
April 30, 2021.
NOTE 5 – STOCKHOLDERS’ EQUITY/(DEFICIT)
AUTHORIZED SHARES & TYPES
As of April 30, 2021, we had 530,153,815 shares of Common Stock and
of:
· |
1,000,000 authorized shares of Convertible Series A Preferred
Shares. Convertible Series A Preferred Shares are convertible into
the shares of Common Stock at a ratio of 1,000 shares of
Convertible Series A Preferred Shares to 1 share of Common Stock.
There are 53,000 shares issued and outstanding or 53 votes.
|
· |
1,000,000 authorized shares of Convertible Series B Preferred
Shares. Convertible Series B Preferred Shares are convertible into
the shares of Common Stock at a ratio of 1,000,000 shares of Common
Stock for each single Convertible Series B Preferred Share.
Additionally, the Preferred B Shares are non-dilutive. There are
600,000 shares issued and outstanding or 600,000,000,000 votes.
|
· |
10,000,000 authorized shares of Convertible Series C Preferred
Shares. Convertible Series C Preferred Shares are convertible into
Common Stock at a ratio of 1,000 shares of Convertible Series C
Preferred Share for one share of Common Stock. There are 760,000
shares issued and outstanding or 760 votes.
|
NOTE 6 – INCOME TAXES
Deferred tax assets arising as a result of net operation loss carry
forwards have been offset completely by a valuation allowance due
to the uncertainty of their utilization in future periods.
Based on its evaluation, the Company has concluded that there are
no significant uncertain tax positions requiring recognition in its
financial statements. The Company’s evaluation was performed for
the tax years ended April 30, 2022 and 2020 for U.S. Federal Income
Tax and for the State of Wyoming.
A reconciliation of income taxes at statutory rates with the
reported taxes follows:
Schedule
of Reconciliation of income tax |
|
|
|
|
|
|
|
|
|
|
April 30, 2022 |
|
|
April 30, 2021 |
|
|
|
|
|
|
|
|
Loss before income tax
benefit |
|
$ |
3,805,472 |
|
|
$ |
4,074,672 |
|
Expected income tax benefit |
|
|
(1,141,641 |
) |
|
|
(1,498,636 |
) |
Non-deductible expenses |
|
|
– |
|
|
|
– |
|
|
|
|
|
|
|
|
|
|
Tax loss benefit not recognized for
book purposes, valuation allowance |
|
$ |
1,141,641 |
|
|
$ |
1,498,636 |
|
Total income tax |
|
$ |
– |
|
|
$ |
– |
|
The Company has net operating loss carry forwards in the amount of
approximately $14,258,484 that will expire beginning in 2029. The
deferred tax assets including the net operating loss carry forward
tax benefit of $14,258,484 total $4,277,532 which is offset by a
valuation allowance. The other deferred tax assets include accrued
officer compensation, stock based compensation, and
amortization.
The Company follows the provisions of uncertain tax positions. The
Company recognized approximately no increase in the liability for
unrecognized tax benefits.
The Company has no tax position at April 30, 2022 for which the
ultimate deductibility is highly certain but for which there is
uncertainty about the timing of such deductibility.
The Company recognizes interest accrued related to unrecognized tax
benefits in interest expense and penalties in operating expenses.
No such interest or penalties were recognized during the periods
presented. The Company had no accruals for interest and penalties
at April 30, 2021. The open tax years are from 2019 through
2029.
NOTE 7 – RELATED PARTY TRANSACTIONS
During the twelve months ended April 30, 2022 and 2021 a Company
shareholder had advanced $0 and $225,077 respectively of personal
funds. As of April 30, 2022 and 2021 the Company owed the
shareholder $0 and $225,077 respectively.
NOTE 8 – NOTES AND OTHER LOANS PAYABLE
On December 11, 2019 the company agreed to pay Cheryl Hintzen
$40,000 in the form of a promissory note with a term of one year at
10 % interest compounded annually. The Company accrued interest for
the Three months ended January, 31, 2020 in the amount of $559. On
January 8, 2020 the Company signed a promissory note for $8,000
with Cheryl Hintzen. The note becomes due on March 8, 2020 and
carries a per annum interest rate of 10%.
On February 21, 2020 the Company borrowed $25,000 from GPL Ventures
with interest at a rate of 10% and a due date of April 30,
2020.
On March 12, 2020 the Company agreed to pay Dr. Jason Cohen
1,000,000 shares at a valuation of $.20 per share plus 8 % interest
until the shares are issued. The interest accrued through end is
$2,147.95 which equates to 10,740 shares.
In the month March, 2020 the escrow attorney for GPL Ventures
advanced $46,900 in funds for the purchase of REG A shares. The
common shares had not been issued at year end and subsequently were
issued. The note will be reclassified as common shares issued and
additional paid in capital in the subsequent period. No interest
was accrued for this note.
The following schedule is Notes Payable at April 30, 2022 and April
30, 2021:
Schedule of debt |
|
|
|
|
|
|
Description |
|
April 30, 2022 |
|
|
April 30, 2021 |
|
|
|
|
|
|
|
|
Note Payable to Ford Motor
Credit |
|
$ |
81,000 |
|
|
$ |
– |
|
|
|
|
|
|
|
|
|
|
Note payable to Cheryl Hintzen due
December 11, 2021; interest at 10% |
|
|
40,000 |
|
|
|
40,000 |
|
|
|
|
|
|
|
|
|
|
Note Payable to Cheryl Hintzen due
March 8, 2020: interest 10% |
|
|
14,700 |
|
|
|
14,000 |
|
|
|
|
|
|
|
|
|
|
Notes Payable Sixth Street
Lending |
|
|
250,000 |
|
|
|
– |
|
|
|
|
|
|
|
|
|
|
Note Payable Dr. Jason Cohen 1,000,000
shares @ $.20 |
|
|
200,000 |
|
|
|
200,000 |
|
|
|
|
|
|
|
|
|
|
Note Payable Leonite Capital |
|
|
|
|
|
|
290,000 |
|
|
|
|
|
|
|
|
|
|
Note Payable Quick Capital LLC |
|
|
190,800 |
|
|
|
239,600 |
|
|
|
|
|
|
|
|
|
|
Note Payable Quick Capital LLC |
|
|
55,000 |
|
|
|
50,000 |
|
|
|
|
|
|
|
|
|
|
Note Payable GS Capital |
|
|
130,000 |
|
|
|
– |
|
|
|
|
|
|
|
|
|
|
Note Payable Other |
|
|
100,000 |
|
|
|
138,500 |
|
|
|
|
|
|
|
|
|
|
Note payable
escrow attorney for REG A shares |
|
|
– |
|
|
|
46,900 |
|
|
|
|
|
|
|
|
|
|
Total Notes
Payable |
|
$ |
1,061,500 |
|
|
$ |
977,100 |
|
NOTE 9 – CONVERTIBLE NOTE PAYABLE
On September 13, 2020 the Company borrowed $250,000 from
Leonite Capital with interest at a rate of 10% and a due date
of March 13, 2021. Financing costs increased the principal to
$290,000. In consideration for entering into the note Leonite
received 1,500,000 common shares upon closing. The
Company has the right to repay the note prior to maturity at a rate
of 110% of the then principal and interest. The note is
convertible to common stock at a fixed conversion price of $.015.
The Note has been satisfied.
On May 27, 2021 the Company borrowed $230,000 from GS Capital
with an interest rate of 8% with a maturity of May 27,
2022. The note holder converted $50,000 along with
$1,012 interest on January 19, 2022. The balance on the note
is $180,000 at April 30, 2022.
On April 14, 2021 the Company sold preferred stock of
$325,000 to Quick Capital LLC which included repayment
obligation or return with an interest rate of 10% with
superior rights to be paid in the event of a sale of the Company.
The Company repaid $50,000 on July 8, 2021. The note holder
converted or exercised its preferred rights for $18,000 on
November 17, 2021 and $17,400 on January 27, 2022. The
noteholder thus has the right to convert or replace the obligation
into common stock at a fixed price of one share for every
$.001 of preferred or the debt thereunder. The balance on the
preferred is $190,800 at April 30, 2022.
On August 26, 2021 the Company borrowed $55,000 from Quick
Capital LLC with an interest rate of 10%. The Company has the
right to repay the note prior to maturity at a rate of 110% of
the then principal and interest. The note is convertible to common
stock at a fixed conversion price of $.001. The balance on the note
is $55,000 at April 30, 2022. Additionally, in August, 2021,
Quick-Capital also invested $50,000 in a private transaction
with the Company at $0.005 for 10,000,000 common
shares.
On November 8, 2021 the Company borrowed the sum of
$83,750.00 from SIXTH STREET LENDING, a North Carolina
corporation. The note has a Maturity date of May 8,
2022 and carries an interest rate of 8% per annum. The note
also has conversion rights. During the period beginning on the date
of funding of this Note and ending on the date which is one hundred
eighty (180) days following such date (the “Initial Period”), the
Conversion Price shall be fixed at $0.04. At any time following the
Initial Period, the Conversion Price shall be equal to the Variable
Conversion Price (as defined herein)(subject to equitable
adjustments for stock splits, stock dividends or rights offerings
by the Borrower relating to the Borrower’s securities or the
securities of any subsidiary of the Borrower, combinations,
recapitalization, reclassifications, extraordinary distributions
and similar events). The "Variable Conversion Price" shall mean 65%
multiplied by the Market Price (as defined herein) (representing a
discount rate of 35%). The balance on the note is $83,750.00
On November 29, 2021 the Company borrowed the sum of
$58,750.00 from SIXTH STREET LENDING, a North Carolina
corporation. The note has a Maturity date of May 28,
2022 and carries an interest rate of 8% per annum. The
note also has conversion rights. During the period beginning on the
date of funding of this Note and ending on the date which is one
hundred eighty (180) days following such date (the “Initial
Period”), the Conversion Price shall be fixed at $0.04.
At any time following the Initial Period, the Conversion Price
shall be equal to the Variable Conversion Price (as defined
herein)(subject to equitable adjustments for stock splits, stock
dividends or rights offerings by the Borrower relating to the
Borrower’s securities or the securities of any subsidiary of the
Borrower, combinations, recapitalization, reclassifications,
extraordinary distributions.
On December 21, 2021 the Company borrowed the sum of
$53,750.00 from SIXTH STREET LENDING, a North Carolina
corporation. The note has a Maturity date of June 21,
2022 and carries an interest rate of 8% per annum. The
note also has conversion rights. During the period beginning on the
date of funding of this Note and ending on the date which is one
hundred eighty (180) days following such date (the “Initial
Period”), the Conversion Price shall be fixed at $0.04.
At any time following the Initial Period, the Conversion Price
shall be equal to the Variable Conversion Price (as defined herein)
(subject to equitable adjustments for stock splits, stock dividends
or rights offerings by the Borrower relating to the Borrower’s
securities or the securities of any subsidiary of the Borrower,
combinations, recapitalization, reclassifications, extraordinary
distributions and similar events). The "Variable Conversion Price"
shall mean 65% multiplied by the Market Price (as defined
herein) (representing a discount rate of 35%). The balance on the
note is $53,750.00.
On January 11, 2022 the Company borrowed the sum of
$53,750.00 from SIXTH STREET LENDING, a North Carolina
corporation. The note has a Maturity date of July 11,
2022 and carries an interest rate of 8% per annum. The
note also has conversion rights. During the period beginning on the
date of funding of this Note and ending on the date which is one
hundred eighty (180) days following such date (the “Initial
Period”), the Conversion Price shall be fixed at $0.04.
At any time following the Initial Period, the Conversion Price
shall be equal to the Variable Conversion Price (as defined
herein)(subject to equitable adjustments for stock splits, stock
dividends or rights offerings by the Borrower relating to the
Borrower’s securities or the securities of any subsidiary of the
Borrower, combinations, recapitalization, reclassifications,
extraordinary distributions and similar events). The "Variable
Conversion Price" shall mean 65% multiplied by the Market Price (as
defined herein) (representing a discount rate of 35%). The balance
on the note is $53,750.00.
On July 13, 2022 the Company executed a Promissory Note in the
amount of $6,553 in favor of of GlobalOne Filings, Inc with a 30
day term.
On February 24, 2022 the Company borrowed the sum of
$38,750.00 from SIXTH STREET LENDING, a North Carolina
corporation. The note has a Maturity date of August 24, 2023,
and carries an interest rate of 8% per annum. The note also
has conversion rights. During the period beginning on the date of
funding of this Note and ending on the date which is one hundred
eighty (180) days following such date (the “Initial Period”), the
Conversion Price shall be fixed at $0.04.
At any time following the Initial Period, the Conversion Price
shall be equal to the Variable Conversion Price (as defined
herein)(subject to equitable adjustments for stock splits, stock
dividends or rights offerings by the Borrower relating to the
Borrower’s securities or the securities of any subsidiary of the
Borrower, combinations, recapitalization, reclassifications,
extraordinary distributions and similar events). The "Variable
Conversion Price" shall mean 65% multiplied by the Market Price (as
defined herein) (representing a discount rate of 35%). The balance
on the note is $38,750.00
On May 2, 2022 the Company borrowed the sum of $38,750.00 from
SIXTH STREET LENDING, a North Carolina corporation. The note has a
Maturity date of November 2, 2023, and carries an interest rate
of 8% per annum. The note also has conversion rights. During
the period beginning on the date of funding of this Note and ending
on the date which is one hundred eighty (180) days following such
date (the “Initial Period”), the Conversion Price shall be fixed at
$0.04.
At any time following the Initial Period, the Conversion Price
shall be equal to the Variable Conversion Price (as defined
herein)(subject to equitable adjustments for stock splits, stock
dividends or rights offerings by the Borrower relating to the
Borrower’s securities or the securities of any subsidiary of the
Borrower, combinations, recapitalization, reclassifications,
extraordinary distributions and similar events). The "Variable
Conversion Price" shall mean 65% multiplied by the Market Price (as
defined herein) (representing a discount rate of 35%). The balance
on the note is $38,750.00.
NOTE 10 – SUBSEQUENT EVENTS
Subsequent events were evaluated through July 31, 2022 which is the
date the financial statements were available to be issued. There
were no events that would require additional disclosure at the time
of financial statement presentation.
PART IV
Item
15. |
Exhibits, Financial Statement
Schedules. |
____________________
* Previously filed
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
|
GREEN STREAM
HOLDINGS, INC. |
|
|
|
|
|
Date: August
18, 2022 |
By: |
/s/ James C. DiPrima |
|
|
James C. DiPrima, Chief Executive
Officer, Chief Financial Officer |
|
|
(Principal Executive,
Accounting and Financial Officer) |
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates
indicated.
Signature |
|
Title |
|
Date |
|
|
|
|
|
/s/ James Ware |
|
Director |
|
August 18, 2022 |
James Ware |
|
|
|
|
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