Bimergen Energy Corp: Form 10-Q for the period ended Sep 30, 2023

This management discussion and analysis (“MD&A”) of the financial condition and results of operations of Bitech Technologies Corporation (the “Company,” “Bitech Technologies,” “our” or “we”) is for the nine months ended September 30, 2023 and 2022. It is supplemental to, and should be read in conjunction with, our condensed consolidated financial statements for the nine months ended September 30, 2023 and 2022 and the accompanying notes for such period included in our Current Report on Form 8-K filed with the Securities and Exchange Commission, or SEC, on April 4, 2022. Our financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Financial information presented in this MD&A is presented in United States dollars (“$” or “US$”), unless otherwise indicated.

The information about us provided in this MD&A, including information incorporated by reference, may contain “forward-looking statements” and certain “forward-looking information” as defined under applicable United States securities laws and Canadian securities laws. All statements, other than statements of historical fact, made by us that address activities, events or developments that we expect or anticipate will or may occur in the future are forward-looking statements, including, but not limited to, statements preceded by, followed by or that include words such as “may”, “will”, “would”, “could”, “should”, “believes”, “estimates”, “projects”, “potential”, “expects”, “plans”, “intends”, “anticipates”, “targeted”, “continues”, “forecasts”, “designed”, “goal”, or the negative of those words or other similar or comparable words and includes, among others, information regarding: our ability to become profitable and generate cash in our operating activities; our need for substantial additional financing to operate our business and difficulties we may face acquiring additional financing on terms acceptable to us or at all; our significant indebtedness and significant restrictions on our operations; our ability to develop and manufacture each of the components of our planned Evirontek Integrated Platform; the impact of global climate change on our ability to conduct future operations; our dependence on key inputs, suppliers and skilled labor for the production of each of the components of the Evirontek Integrated Platform; our ability to attract and retain key personnel; growth-related risks, including capacity constraints and pressure on our internal systems and controls; risk related to the protection of our intellectual property and our exposure to infringement or misappropriation claims by third parties; risks related to competition; risks related to our lack of internal controls over financial reporting and their effectiveness; increased costs we are subject to as a result of being a public company in the United States; and other events or conditions that may occur in the future.

Forward-looking statements may relate to future financial conditions, results of operations, plans, objectives, performance or business developments. These statements speak only as at the date they are made and are based on information currently available and on the then current expectations of the party making the statement and assumptions concerning future events, which are subject to a number of known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from that which was expressed or implied by such forward-looking statements, including, but not limited to, risks and uncertainties described in “Risk Factors.”

Although we believe that the expectations and assumptions on which such forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements, because no assurance can be given that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to the risks described in “Risk Factors.”

Consequently, all forward-looking statements made in this MD&A and other documents, as applicable, are qualified by such cautionary statements, and there can be no assurance that the anticipated results or developments will actually be realized or, even if realized, that they will have the expected consequences to or effects on us. The cautionary statements contained or referred to in this section should be considered in connection with any subsequent written or oral forward-looking statements that we and/or persons acting on its behalf may issue. We do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, other than as required under securities legislation.

Overview of the Business

Currently, we have refocused our business development plans as we seek to position ourselves as a global technology solution enabler dedicated to providing a suite of green energy solutions with industry focus on green data centers, commercial and residential utility, EV infrastructure, and other renewable energy initiatives. We plan to pursue these innovative energy technologies through research and development, planned acquisitions of other green energy technologies and plans to become a grid-balancing operator using Battery Energy Storage System (BESS) solutions and applying new green technologies in power plants as a technology enabler in the green energy sector. While participating in the clean energy economy, we are seeking business partnerships with defensible technology innovators and renewable energy providers to facilitate investments, provide new market entries toward emerging-growth regions and implement or manufacture these innovative, scalable energy system solutions with technological focuses on smart grids, Building Energy Management System (BEMS), energy storage, and EV infrastructure.

To accelerate growth of a planned intellectual property (IP) portfolio through acquisition strategies, we plan to execute our Smart Acquisition Model with selected acquisitions of defensible technologies accompanied with visionary management teams who can demonstrate a common goal with us in order to unlock the full potential with capital infusion, accelerate growth. To achieve our development plans, we plan to incubate those acquired companies toward foreseeable plans for mergers and acquisitions, formation of global joint ventures, while facilitating new market entry to today’s fastest growing Southeast Asia region. With this acquisition model, we expect to build a valuable technology portfolio of IP assets in various innovative green energy technologies, leveraging our network of global capital partners with low-cost manufacturing capacity and oversea outsourcing technical talents from our niche sources in Vietnam.

Further, we plan to execute a Dual Growth Business Model as depicted in the diagram below encompassing (1) IP portfolio growth which includes technology licensing or technology acquisitions, enhanced with our plans to carry out research and development for specific applications, and (2) sustainable revenue growth by executing planned BESS acquisitions via joint ventures with capital partners to collect joint venture income from BESS operations or Vietnam-based manufacturing partners which can manufacture products derived from our technology solutions.

In light of these initiatives and other reasons noted below, the Company has, however, elected to discontinue its efforts to commercialize the electric power generation and charging system (the “Tesdison Technology”) it licensed from SuperGreen pursuant to the SuperGreen License. The Company has determined that the Tesdison Technology was not functional nor was it capable of being developed into a commercially viable product as had been represented to the Company by SuperGreen, its founder Calvin Cao, and his brother Michael Cao, leading up to Bitech Mining entering into the SuperGreen License. In addition, the Company will temporarily pause the further development of Intellisys-8, the Company’s planned chipset and related software that had been designed to reduce power consumption and heat in computer systems and accelerate their computational speed due to the currently unfavorable market conditions within the cryptocurrency market.

Nam Viet Green Energy JSC Financing Initiative

On May 8, 2023 we announced that we received a Letter of Intent (LOI) from Nam Viet Green Energy JSC, (“Nam Viet Energy”), a Vietnam partner to provide up to $300 million in financing for selected projects related to solar and Battery Energy Storage System (BESS) projects.

Subject to Nam Viet Energy’s completion of due diligence for each renewable energy sector project and execution of definitive agreements with prospective target companies, the LOI formalizes Nam Viet Energy’s commitment to facilitate capital investment to invest or acquire several selected projects to be hand-picked by the Company. Also, the LOI is also expected to position the Company to accelerate its refocused business initiatives discussed above. Funding under any investment from Nam Viet Energy and its capital partners from Southeast Asia is expected to occur within fiscal year 2023 with extension to fiscal year 2024.

Establishment of an Energy Storage System (ESS) Sales Division

In June 2023, the Company announced its strategic entry into the battery sales business with plans to establish an Energy Storage System (ESS) sales division. With a focus on Containerized Battery Energy Storage Systems (BESS) and Residential, Commercial, and Industrial ESS, Bitech aims to meet the soaring demand for ESS in the United States. The Company’s vision is to add long-duration energy storage systems that reduce energy costs, enhance resilience, and unlock additional revenue opportunities. These solutions will be designed to manage demand changes, maximize solar or BESS investments, enhance energy security, capture market opportunities, and support corporate environmental, social, and corporate ESG targets.

The ESS sales division will be headed by Charles Rosenberry, the Company’s Vice President of Sales. Mr. Rosenberry plans to build a unified technical salesforce and forge strategic partnerships across multiple states in the United States in order to enable us to deliver technologically advanced energy storage products, flexible payment terms, and customized solutions to a wide range of customers, including retail and home sales, EV charging providers, home builders, residential EPCs, renewable utilities, data centers, telecom, mobility, and heavy energy demand consumers.

Renewable Energy Consulting

The Company established a Renewable Energy Consulting Division empowered by artificial intelligence (AI) and Web3 social media technologies. The strategic addition of this division is expected to strengthen the Company’s position as new player in providing knowledge-based online content in the green energy sector. This initiative is expected to serve as a strategic base to generate revenue via a suite of AI tools to connect with online industry leaders and visionary companies in the same sector. The application of AI in green energy-related content production, evaluation, and data processing, driven by user behavior, is designed to create vital connections within online communities, enhance content marketing, augment its quality, and offers the Company opportunities for sustainable revenue generation. Further, the Company has started to apply a suite of AI and Web3 social media technologies which can be used to engage viewers on social media platforms like YouTube, TikTok and Meta in advocating the Company’s environmental, social and governance strategy.

Nonprovisional Patent Application

In furtherance of the Company’s efforts to expand and commercialize green energy technology solutions it seeks to incorporate into revenue generating applications in 2024, it filed a nonprovisional patent with the U.S. Patent and Trademark Office (Application No. 18/484,748) on October 11, 2023. The provisional patent relates to the field of renewable energy, healthcare, and information technology. Specifically, it pertains to an integrated system that employs Artificial Intelligence (AI), Virtual Reality (VR), Robotics, and Blockchain (Web3 & NFT) to optimize the operation of healthcare facilities using renewable energy and community-centric care delivery systems.

Acquisition of Bitech Mining Corporation

The Company acquired Bitech Mining on March 31, 2022 pursuant to a Share Exchange Agreement. Pursuant to the Share Exchange Agreement we acquired an aggregate of 94,312,250 shares of Bitech Mining’s Common Stock representing 100% of the issued and outstanding shares of Bitech Mining in exchange for an aggregate of 9,000,000 shares of the Company’s newly authorized Series A Convertible Preferred Stock. Effective June 27, 2022, each share of Series A Preferred Stock automatically converted into 53.975685 shares (an aggregate of 485,781,168) of the Company’s Common Stock upon filing of an amendment to its Certificate of Incorporation increasing the number of the Company’s authorized common stock to 1,000,000,000. Upon conversion of the Series A Preferred Stock, the Sellers held, in the aggregate, approximately 96% of the issued and outstanding shares of Company capital stock on a fully diluted basis.

The Share Exchange was treated as a recapitalization and reverse acquisition for financial reporting purposes, and Bitech Mining is considered the acquirer for accounting purposes. As a result of the Share Exchange and the change in our business and operations, a discussion of the past financial results of our predecessor, Spine Injury Solutions Inc., is not pertinent, and under applicable accounting principles, the historical financial results of Bitech Mining, the accounting acquirer, prior to the Share Exchange are considered our historical financial results.

The following agreements were entered into in connection with the acquisition of Bitech Mining:

Agreements involving Peter L. Dalrymple. On March 31, 2022, the Company, Quad and Peter L. Dalrymple (“Dalrymple”), a former director of the Company, entered into the MSA, Note Amendment and Security Agreement Amendment. See “Item 1 - Business – Acquisition of Bitech Mining Corporation” in our Form 10-K filed with the SEC on March 31, 2023.

Disposition of Quad Video Assets. On June 30, 2022, we completed the sale of the Quad Video Assets pursuant to the terms of the Quad Video APA and the sale of certain accounts receivables related to our former spine pain management business pursuant to the terms of the SPIN Accounts Receivable APA. See “Item 1 - Business – Disposition of Quad Video Assets” in our Form 10-K filed with the SEC on March 31, 2023.

Prior to March 31, 2022, we were engaged in the business of owning, developing and leasing the Quad Video Halo video recording system (“QVH”) used to record medical procedures including the collection of accounts receivables related to previously provided spine injury diagnostic services (collectively, the “QVH Business”). On June 30, 2022, we sold the assets related to the QVH Business.

Comparison of the three and nine month period ended September 30, 2023 with the three and nine month period ended September 30, 2022.

The Company has not generated any revenues from its primary business for the three and nine months ended September 30, 2023 and $26,197 from its legacy QVH Business for the nine months ended September 30, 2022.

During the three and nine months ended September 30, 2023, we incurred $135,434 and $596,941 of general and administrative expenses, respectively, compared to $240,205 and $806,955 for the same periods in 2022. General and administrative expenses have been mostly consistent during 2023 compared to 2022 as the Company seeks to move from development stage to revenue generation.

As a result of the foregoing, we had net loss of (135,434) and ($589,941) for the three and nine months ended September 30, 2023, respectively, compared to a net loss of ($240,205) and ($730,483) which included an offset of $26,197 for Other Revenue and $50,275 Net Other Income for the nine months ended September 30, 2022, respectively.

Working Capital

The calculation of Working Capital provides additional information and is not defined under GAAP. We define Working Capital as current assets less current liabilities. This measure should not be considered in isolation or as a substitute for any standardized measure under GAAP. This information is intended to provide investors with information about our liquidity.

Other companies in our industry may calculate this measure differently than we do, limiting its usefulness as a comparative measure.

Liquidity and Capital Resources

As of September 30, 2023 and December 31, 2022, we had total current liabilities of $17,080 and $11,397, respectively, and current assets of $76,028 and $210,723, respectively, to meet our current obligations. As of September 30, 2023, we had working capital of $58,948, a decrease of working capital of $140,378 as compared to December 31, 2022, driven primarily by cash used in operations but offset by $245,000 of cash provided by sale of common stock.

For the nine months ended September 30, 2023, cash used in operations was ($271,677) which primarily included the net loss of ($454,507) primarily offset by $102,600 of non-cash option valuation recorded as stock compensation and services paid with common stock of $87,248.

Net cash provided by financing activities was an aggregate of $245,000 that was a result of our sale of 11,250,000 unregistered shares of our Common Stock to six private investors in exchange for $225,000 ($0.02 per share) in cash and 666,667 unregistered shares of our Common Stock to one private investor for $20,000 ($0.03 per share) in cash.

We have a history of operating losses. We have not yet achieved profitable operations and expect to incur further losses. We have funded our operations primarily from equity financing. As of September 30, 2023, cash generated from financing activities was not sufficient to fund our growth strategy in the short-term or long-term. The primary need for liquidity is to fund working capital requirements of the business, including operational expenses in connection with our efforts to become a provider of a suite of green energy solutions. The primary source of liquidity has primarily been private financing transactions. The ability to fund operations and our growth strategy depends on our ability to raise funds from debt and/or equity financing which is subject to prevailing economic conditions and financial, business and other factors, some of which are beyond our control. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms.

On May 8, 2023, we announced that we received a Letter of Intent (LOI) from Nam Viet to provide up to $300 million in financing for selected projects related to solar and Battery Energy Storage System (BESS) projects as discussed above. While we believe that we will be able to secure funding for future projects from Nam Viet and its capital partners pursuant to the LOI, we have not received any funds pursuant to the LOI as of the date of this report and there can be no assurance that Nam Viet and its capital partners will provide financing to us when needed or, if available, that it can be obtained on commercially reasonable terms.

Off-Balance Sheet Arrangements

As of the date of this Quarterly Report on Form 10-Q, we do not have any off-balance-sheet arrangements that have, or are reasonably likely to have, a current or future effect on our results of operations or financial condition, including, and without limitation, such considerations as liquidity and capital resources.

Changes in or Adoption of Accounting Practices

There were no material changes in or adoption of new accounting practices during the nine months ended September 30, 2023.

Critical Accounting Policies

See Note 2 of the accompanying notes to unaudited condensed consolidated financial statements, which note is incorporated herein by reference.

We are a smaller reporting company as defined by 17 C.F.R. 229 (10)(f)(i) and are not required to provide information under this item.

Evaluation of Disclosure Controls and Procedures

Our principal executive officer and principal financial officer are responsible for establishing and maintaining our disclosure controls and procedures. Such officers have concluded (based upon their evaluation of these controls and procedures as of the end of the period covered by this report) that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in this report is accumulated and communicated to management, including our principal executive and principal financial officer as appropriate, to allow timely decisions regarding required disclosure.

As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2023. Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective as of September 30, 2023.

Changes in Internal Control Over Financial Reporting

Our principal executive officer and principal financial officer have also indicated that, upon evaluation, there were no changes in our internal control over financial reporting or other factors during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls or our internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. In addition, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Because of these inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.