UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For
the Quarter Ended
For the transition period from _______ to _______.
Commission
file number:
(Name of Registrant in Its Charter)
| (State
or Other Jurisdiction of Incorporation or Organization) |
(I.R.S.
Employer Identification No.) |
(Issuer’s Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
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.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).
Indicate by check mark whether the registrant is large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” accelerated filer” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
| Large accelerated filer ☐ | Accelerated filer ☐ |
| 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
At May 21, 2025, there were shares of the registrant’s common stock outstanding (the only class of voting common stock).
FORM 10-Q
TABLE OF CONTENTS
| Note About Forward-Looking Statements | ||
| PART I | FINANCIAL INFORMATION | |
| Item 1. | Condensed Consolidated Financial Statements (Unaudited) | |
| Condensed Consolidated Balance Sheets | 4 | |
| Condensed Consolidated Statements of Operations | 5 | |
| Condensed Consolidated Statements of Cash Flows | 7 | |
| Condensed Consolidated Statements of Shareholders’ Equity | 6 | |
| Notes to Condensed Consolidated Financial Statements | 8 | |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 15 |
| Item 3. | Quantitative and Qualitative Disclosure About Market Risk | 19 |
| Item 4. | Controls and Procedures | 19 |
| PART II | OTHER INFORMATION | 20 |
| Item 1. | Legal Proceedings | 20 |
| Item 1A. | Risk Factors | 21 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 21 |
| Item 3. | Defaults Upon Senior Securities | 22 |
| Item 4. | Mine Safety Disclosures | 22 |
| Item 5. | Other Information | 22 |
| Item 6. | Exhibits | 23 |
| Signatures | 24 | |
| 2 |
NOTE ABOUT FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, among other things, statements regarding plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements, which are other than statements of historical facts. Forward-looking statements may appear throughout this report, including without limitation, Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Forward-looking statements generally can be identified by words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” “will be,” “will continue,” “will likely result,” and similar expressions. These forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties, which could cause our actual results to differ materially from those reflected in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in this report and in our Annual Report on Form 10-K for the year ended December 31, 2024, and in particular, the risks discussed under the caption “Risk Factors” in Item 1A of this report and in in our Form 10-K, and those discussed in other documents we file with the Securities and Exchange Commission (“SEC”). Important factors that in our view could cause material adverse effects on our financial condition and results of operations include, but are not limited to, risks associated with service demands and acceptance, our ability to expand, changes in healthcare practices, changes in technology, economic conditions, the impact of competition and pricing, government regulation and approvals, impacts and disruptions caused by the COVID-19 pandemic and other factors that may cause actual results to be materially different from those described herein as anticipated, believed, estimated or expected. We undertake no obligation to revise or publicly release the results of any revision to any forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.
As used herein, the “Company,” “we,” “our,” and similar terms include Bimergen Energy Corporation (formerly Spine Injury Solutions, Inc.) and its subsidiaries and predecessors, unless the context indicates otherwise.
| 3 |
BIMERGEN ENERGY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
| March 31, 2025 | December 31, 2024 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Deferred offering costs | ||||||||
| Prepaid expense | ||||||||
| Total current assets | ||||||||
| Intangible assets | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued liabilities | ||||||||
| Accounts payable and accrued liabilities – related parties | ||||||||
| Short Term Loans due to Related Parties | ||||||||
| Deferred revenue | ||||||||
| Total current liabilities | ||||||||
| Commitments and Contingencies (Note 10) | ||||||||
| Stockholders’ equity | ||||||||
| Preferred stock, $ par value, shares authorized, shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively | ||||||||
| Common stock: $ par value, shares authorized, and shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
| 4 |
BIMERGEN ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the March 31, 2025 | For the March 31, 2024 | |||||||
| REVENUE | $ | |||||||
| COST OF REVENUE | ||||||||
| GROSS PROFIT | ||||||||
| OPERATING EXPENSES | ||||||||
| General & Administrative | ||||||||
| Total Operating Expenses | ||||||||
| LOSS FROM OPERATIONS | ( | ) | ( | ) | ||||
| OTHER INCOME (EXPENSE) | ||||||||
| Interest and Other Income | ||||||||
| Interest Expense | ( | ) | ||||||
| Total Other Income (Expense) | ( | ) | ||||||
| LOSS BEFORE INCOME TAXES | ( | ) | ( | ) | ||||
| BENEFIT (PROVISION) FOR INCOME TAXES | ||||||||
| NET LOSS | $ | ( | ) | $ | ( | ) | ||
| BASIC AND DILUTED LOSS PER SHARE | $ | ) | $ | ) | ||||
| WEIGHTED AVERAGE SHARES | ||||||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
| 5 |
BIMERGEN ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(Unaudited)
| Common Stock | Preferred Stock | Additional Paid-In | Accumulated | Total Stockholders’ | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||||||||
| Balances, December 31, 2023 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| Common Stock for Services | ||||||||||||||||||||||||||||
| Stock Option Compensation | ||||||||||||||||||||||||||||
| Restricted Stock Awards | ||||||||||||||||||||||||||||
| Sale of Common Stock | ||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balances, March 31, 2024 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| Balances, December 31, 2024 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| Common Stock for Services | ||||||||||||||||||||||||||||
| Stock Based Compensation | - | |||||||||||||||||||||||||||
| Net loss | ( | ) | ( | ) | ||||||||||||||||||||||||
| Balances, March 31, 2025 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
The accompanying notes are an integral part of the audited consolidated financial statements.
| 6 |
BIMERGEN ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| FOR THE THREE MONTHS ENDED MARCH 31, | ||||||||
| 2025 | 2024 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Common Stock issued for services | ||||||||
| Stock Compensation Expense | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid expenses and other assets | ||||||||
| Accounts payable and accrued liabilities | ||||||||
| Accounts payable and accrued liabilities – Related Parties | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities: | ||||||||
| Cash from Sale of Common Stock, net | ||||||||
| Proceeds from Short term Loan – Related Parties | ||||||||
| Deferred Offering Costs | ( | ) | ||||||
| Net cash provided by financing activities | ||||||||
| Net (decrease) increase in cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents at beginning of period | ||||||||
| Cash and cash equivalents at end of period | $ | $ | ||||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
| 7 |
BIMERGEN ENERGY CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. DESCRIPTION OF BUSINESS AND GOING CONCERN
Bimergen
Energy Corporation (the “Company”, “we” or “us”) was incorporated under the laws of Delaware on March
4, 1998. In connection with the Company’s planned expansion of its business following the completion of the acquisition of Bitech
Mining Corporation, a Wyoming corporation (“BTM”), it filed a Certificate of Amendment to its Certificate of Incorporation,
as amended (the “Certificate of Amendment”) with the Secretary of State of the State of Delaware on April 29, 2022 to change
its corporate name to Bitech Technologies Corporation.
In April 2024, the Company acquired a portfolio of development-stage Battery Energy Storage System (BESS) and solar energy projects from Emergen Energy LLC (“Emergen”). The acquired portfolio includes 23 utility-scale BESS projects with an estimated cumulative storage capacity of 1.965 gigawatts (GW) and 13 utility-scale solar energy projects with an anticipated cumulative generation capacity of 1.640 GW (collectively, the “Development Projects”), subject to completion of development, construction, and interconnection milestones. The Company became the sole project owner upon acquisition.
As of the date of this filing, the Development Projects are in various stages of development and have not yet achieved commercial operation. The Company expects that certain BESS projects may be collocated with solar projects, depending on site configuration and permitting.
Reverse Stock Split
On
February 3, 2025, the Company’s shareholders approved and the Company effected a reverse stock split of the shares of common stock
at a ratio of
Going Concern
The
Company’s consolidated financial statements are prepared using the generally accepted accounting principles applicable to a going
concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company
has incurred substantial recurring losses from continuing operations, negative cash flows from operations, and is dependent on additional
financing to fund operations. We incurred a net loss of approximately $
| 8 |
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Consolidation
The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and the requirements of the Securities and Exchange Commission (the “SEC”) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. GAAP can be condensed or omitted. These condensed financial statements have been prepared on the same basis as the annual financial statements included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on May 30, 2025.
In the opinion of the Company’s management, the information in these condensed financial statements reflects all adjustments, all of which are of a normal and recurring nature necessary for a fair statement of the financial position and results of operations for the reported interim periods. The Company considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. The results of operations for interim periods are not necessarily indicative of results to be expected for the full year or any other interim period.
Any reference in these notes to applicable guidance is meant to refer to the authoritative U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”).
The unaudited consolidated financial statements represent the consolidation of the accounts of the Company, its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates and assumptions, including those related to variable consideration and stock based compensation. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the amount reported as revenue and expenses that are not readily apparent from other sources. Actual results may differ materially from those estimates.
Significant Accounting Policies
There have been no material changes to the accounting policies discussed in Note 2 to the financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on May 30, 2025.
| 9 |
Recent Accounting Pronouncements Not Yet Adopted
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The amendments in this ASU should be applied prospectively; however, retrospective application is also permitted. The Company is currently evaluating the impact from the adoption of this standard on the Company’s financial statements.
In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation (Subtopic 220-40): Disaggregation of Income Statement Expenses. The amendments in ASU 2024-03 require a public business entity to disclose specific information about certain costs and expenses in the notes to its financial statements for interim and annual reporting periods. The objective of the disclosure requirements is to provide disaggregated information about a public business entity’s expenses to help investors (a) better understand the entity’s performance, (b) better assess the entity’s prospects for future cash flows, and (c) compare an entity’s performance over time and with that of other entities. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of the adoption of this standard on its financial statements.
NOTE 3. STOCKHOLDERS’ EQUITY
The total number of authorized shares of our common stock, par value $ per share, was shares. As of March 31, 2025 and December 31, 2024, there were and common shares issued and outstanding, respectively.
The total number of authorized shares of our preferred stock, par value $ per share, was . There was preferred stock outstanding as of March 31, 2025 and December 31, 2024.
| 10 |
During
the year ended December 31, 2024 the Company sold unregistered shares of its Common Stock to eight private investors for an aggregate
of $
The Company issued shares of unregistered shares of its Common Stock for services valued at $
As of March 31, 2025 there were options outstanding. The Company does not have an adopted option plan and can issue stock options up to the amount of authorized shares that are not issued and outstanding as of March 31, 2025.
We have granted non-qualified stock options to employees and contractors. All non-qualified options are generally issued with an exercise price no less than the fair value of the common stock on the date of the grant as determined by our Board of Directors. Options typically may be exercised up to ten years following the date of the grant, with vesting schedules determined by us upon grant. Vesting schedules vary by grant, with some fully vesting immediately upon grant to others that ratably vest over a period of time up to five years. Standard vested options may be exercised up to three months following date of termination of the relationship unless alternate terms are specified at grant. The fair values of options are determined using the Black-Scholes option-pricing model. Forfeitures are accounted for as they occur. The estimated fair value of options is recognized as expense on the straight-line basis over the options’ vesting periods. At March 31, 2025, we had approximately $ million unrecognized stock-based compensation related to stock options expected to be recognized over the next years on a weighted average.
| Shares | Weighted- Average Exercise Price | Weighted Average Remaining Contractual Term (in years) |
Aggregate |
|||||||||||||
| Outstanding at December 31, 2024 | $ | $ | ||||||||||||||
| Options Granted |
|
|||||||||||||||
| Options Exercised | ||||||||||||||||
| Options Forfeited or Cancelled | ( | ) | ||||||||||||||
| Options Expired | - | - | ||||||||||||||
| Outstanding and Vested or Expected to Vest at March 31, 2025 | ||||||||||||||||
| Options Exercisable at March 31, 2025 | $ | |||||||||||||||
| 11 |
No options were exercised during the period ended March 31, 2025.
We recognized $
| March 31, 2025 | ||||||||
| Shares | Weighted- Value | |||||||
| Unvested at Beginning of Period | $ | |||||||
| Granted | ||||||||
| Vested | ( | ) | ||||||
| Forfeited or Cancelled RSAs | ||||||||
| Unvested at End of Period | $ | |||||||
At March 31, 2025, we had approximately $ million unrecognized stock-based compensation related to restricted stock awards. The weighted average non-performance based will be recognized over the next years.
There are performance RSAs unvested with a weighted average grant date fair value of $ million at March 31,2025.
We
recognized $
| 12 |
NOTE 6. ACQUISITION OF EMERGEN ENERGY LLC
On
April 24, 2024 (the “Closing”), Bimergen Energy Corp. (the “Company”) acquired
Emergen, formed immediately prior to the transaction, held only early-stage renewable-energy development rights and no liabilities or operating activities. Accordingly, management concluded the transaction is an asset acquisition rather than a business combination.
At
acquisition Emergen’s assets consisted of 1.965GW and 3.840GW of BESS and Solar Projects, respectively. Because the projects lacked
substantive process or outputs, the Company recorded the entire $
The following agreements were entered into on the date of Closing as provided for in the MIPA:
On April 24, 2024 the Company and Emergen entered into a PMSA with Energy Independent Partners LLC (“EIP”), an entity controlled by Cole Johnson, under which EIP provides development, permitting, and financing-support services for each project.
On April 24, 2025 the parties executed Amendment No. 2 to the PMSA, stated to be effective June 28, 2024 and governed by Delaware law. Amendment 2 superseded Amendment 1 and eliminated the former Initial-Fee and RTB-Fee construct, replacing it with a single “Development-Fee” model that is payable only when a project secures third-party, project-specific financing. The principal commercial terms now in effect are:
| ● | BESS
projects. For each battery-storage project, the Company will owe EIP a development fee of $ per watt once that specific project
secures third-party debt and/or equity financing sufficient to fund the fee. Based on the current BESS portfolio capacity (approximately
1.965 GW), the aggregate exposure, if every project achieves financing, would be about $ |
| ● | Solar
projects. For each solar-power project, the same rate—$ per watt—applies, again only after project-specific financing
is in place. Given the remaining solar capacity in the Emergen portfolio (roughly 1.640 GW), the maximum potential fees total approximately
$ |
| ● | Other
renewable projects. For any future development projects that are neither BESS nor solar, the fee is the greater of (i) |
Based on portfolio capacities; actual fees depend on future financings and may not be incurred.
| ● | Sale-of-Project
Clause – If a project is sold, EIP is entitled to the greater of unpaid Development Fees or |
| ● | Acceleration
Clause – |
| ● | Termination & Indemnification – The PMSA may be terminated by mutual consent or for cause; customary indemnities apply. |
Because payment is contingent on future project-financing milestones, no PMSA liabilities have been recognized as of March 31, 2025.
NOTE 7. SOLAR PROJECTS SALE
On
May 30, 2024, Emergen Energy LLC (“Emergen”) entered into a Project Sale Agreement (“PSA”) with Bridgelink Development,
LLC (“Bridgelink”) covering
Total
consideration payable to Emergen is $
| ● | a
non-refundable deposit of $ |
| ● | $ |
The deposit is recorded as contract liability (deferred revenue). Revenue (and related cost) will be recognized at a point in time when the relevant milestones are achieved by the purchaser, which management expects within twelve months of year-end. No milestone revenue was recognized in 2024 because the required conditions were not met.
Under
the Project Management Services Agreement (“PMSA”),
| 13 |
NOTE 8. RELATED PARTY TRANSACTIONS
All transactions described in Notes to the Financial Statements 6 and 7 were transacted with a now related party, Cole Johnson, President and Director, as of the April 24, 2024 acquisition of Emergen Energy, LLC. All negotiations related to these transactions were prior to Cole Johnson being a related party to Bimergen.
NOTE 9 SEGMENT INFORMATION
The
Company operates and manages its business as
Significant segment expenses include salaries and payroll, legal fees, stock based compensation, audit costs, contract services, rent, and other administrative expenses. The measurement of segment assets is reported on the consolidated balance sheets as total assets. The following table presents the significant segment expenses and other segment items regularly reviewed by our CODM.
| For the Three Months Ended March 31, 2025 | For the Three Months Ended March 31, 2024 | |||||||
| Revenues | $ | $ | ||||||
| Cost of Goods Sold | ||||||||
| Gross Profit | ||||||||
| Operating Expenses | ||||||||
| Salaries and Payroll Expenses | ||||||||
| Legal Fees | ||||||||
| Stock-based compensation | ||||||||
| Investor relations | ||||||||
| Audit Costs | ||||||||
| Contract Services | ||||||||
| Rent | ||||||||
| Other operating expenses | ||||||||
| Total Operating Expenses | ||||||||
| Loss (Income) from Operations | ( | ) | ( | ) | ||||
| Interest Income and Other (Expenses), net | ( | ) | ||||||
| Net loss before Income Tax | $ | ( | ) | $ | ( | ) | ||
NOTE 10 COMMITMENTS AND CONTINGENCIES
The Company is subject to various claims, legal actions, and regulatory proceedings arising in the ordinary course of business. In the opinion of management, after consultation with legal counsel, the ultimate resolution of these matters is not expected to have a material adverse effect on the Company’s financial position, results of operations, or cash flows.
NOTE 11. SUBSEQUENT EVENTS
On April 20, 2025 the Company’s wholly owned subsidiary, Emergen Energy, LLC, executed a definitive agreement with RelyEZ Energy Group to form a joint venture to develop, construct, and operate up to 2 GW of utility-scale battery-energy-storage projects (2- to 4-hour BESS) in the United States through 2027.
Capital
commitments. RelyEZ has committed up to $
Ownership
and economics. Until project refinancing, each project SPV will be owned
Initial projects. Four Texas projects totaling approximately 274 MW / 773 MWh (Redbird, Dos Rios, White Rock, and Oak Hill) are expected to reach notice-to-proceed (NTP) within six months of closing.
Status of accounting evaluation. This agreement was executed after March 31, 2025; therefore, no amounts related to the joint venture are reflected in the accompanying financial statements.
| 14 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This management discussion and analysis (“MD&A”) of the financial condition and results of operations of Bimergen Energy Corporation (the “Company,” “Bimergen Energy,” “our” or “we”) is for the three months ended March 31, 2025 and 2024. It is supplemental to, and should be read in conjunction with, our condensed consolidated financial statements for the three months ended March 31, 2025 and 2024 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; the risk that the BESS and Solar Development Projects discussed below (the “Development Projects”) may not be completed, will be materially delayed or will be more costly or difficult than expected or that the Company is otherwise unable to successfully complete the Development Projects; (iii) the failure to obtain the necessary approvals and consents to complete the Development Projects, regulatory, or any other consents required to complete the projects; our ability to obtain required governmental approvals to complete the Development Projects (and the risk that such approvals may result in the imposition of conditions that could adversely affect the Company or the expected benefits of the Acquisition discussed below); the Company’s ability to fund the costs required to complete the Development Projects; the impact of global climate change on our ability to conduct future operations; our dependence on key inputs, suppliers and skilled labor to complete construction of the Development Projects and acquire equipment for the operation of the proposed Development Projects; 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.
| 15 |
Overview of the Business
We are a renewable energy project developer dedicated to enabling the clean energy transition and providing critical grid stability via solutions across a range of applications through our portfolio of utility-scale Battery Energy Storage System (BESS) and solar development projects. In April 2024, we acquired a portfolio of development-stage BESS and solar energy projects from Emergen Energy LLC (“Emergen”), making us the project owner of 23 development stage utility-scale BESS projects with an estimated cumulative storage capacity of 1.965 gigawatts (GW) and 13 development stage solar energy projects with an anticipated cumulative generation capacity of 1.640 GW (collectively, the “Development Projects”) once constructed and operational.
Our primary business objective is to become a grid-balancing operator by developing, commercializing, and operating a diversified portfolio of BESS and solar energy projects. We aim to leverage by partnering with advanced BESS technologies and Energy Management Systems (EMS) to address the critical challenges associated with the integration of renewable energy into the electrical grid, particularly the imbalance between energy supply and demand caused by the intermittent nature of solar and wind resources. This approach aligns with the increasing demand for grid stability in regions with high penetration of renewable energy, where imbalances between peak solar generation and peak energy demand create revenue opportunities through energy storage and dispatch. We plan to store excess energy generated during periods of low demand and dispatch it during peak demand periods, thereby enhancing grid stability and efficiency. Upon reaching commercial operation, we hope to play a key role in stabilizing grid demand and supporting renewable energy integration through energy arbitrage and ancillary services.
Core Business in Battery Energy Storage Systems (BESS)
Our core business is anchored in the development and operation of BESS projects, which are strategically designed to mitigate the energy imbalances and power deficits observed in markets with substantial solar and wind energy generation. This event, often depicted by the grid balancing, highlights the timing mismatch between peak renewable energy generation and peak electricity demand. As renewable energy production peaks during daylight hours and declines in the evening when energy demand is highest, supplemental energy supply sources become increasingly critical. Our BESS projects are positioned to address this imbalance by storing surplus energy during periods of low demand and releasing it during high-demand periods, capturing value from daily price fluctuations. By purchasing and storing energy during low-cost, high-supply hours and selling it during high-demand periods when prices are at their peak, known as energy arbitrage trading, our BESS systems will provide critical support to compensate for the lack of supply from the current outdated energy grid infrastructure.
In addition to energy arbitrage, our BESS assets are positioned to provide essential grid services, including frequency regulation, voltage support, and emergency backup during grid outages. Frequency regulation refers to the rapid response to changes in grid frequency, maintaining stability and preventing potential grid failures. Voltage control enhances the quality and reliability of power supplied to consumers. The rapid response capabilities also maintain stability for key infrastructure during outages via immediate response to fluctuations in voltage and frequency. By reducing demand imbalances at peak times, known as peak shaving, we hope to flatten the energy demand and lower electricity costs for consumers. By integrating advanced EMS controls, we aim to optimize the dispatch timing and increase the overall economic value of stored energy, delivering both reliable performance efficient operation in dynamic market conditions. Our systems will enable more flexible and adaptive grid operations, accommodating dynamic energy flows and diverse generation sources. These ancillary services both relieve grid stress, offer additional potential revenue streams, and maximize likelihood of punctual project development within budget and ensure product quality standards. We believe we well- positioned to leverage our existing relationships to secure multi-year customer contracts prior to project construction and integrate cutting-edge battery technologies as they are developed into future developments. Our systems will also be capable of deferred infrastructure upgrades, which reduce the need for expensive grid infrastructure upgrades by efficiently managing local supply and demand.
We expect our BESS projects to be located alongside traditional power transmission lines or near large offtakers with high energy demands, enhancing grid stability and reducing energy costs. These locations are suitable for battery storage facilities of approximately thirty acres and undergo environmental studies and assessments to ensure feasibility. While the letters of intent the Company has entered into or negotiated for these projects are for specific locations, the Company’s development plans are not dependent on the landowner or address, but, rather, are county based. The Company believes it could adjust its plans to find a similar, suitable location if it is unable to negotiate a definitive agreement to develop a project with the landowner.
We maintain strong relationships with tier-one battery and equipment suppliers, utilities, and power purchasers to optimize transmission efficiency and lower consumer costs. We believe these partnerships may also help us secure regulatory support, ensure timely project development within budget, and uphold high product quality standards. Our strategic position allows us to secure multi-year customer contracts before project construction and integrate emerging battery technologies into future developments. Additionally, our systems are designed to enable deferred infrastructure upgrades, reducing the need for costly grid enhancements by efficiently managing local supply and demand.
Development Projects and Operational Progress
Our portfolio of Development Projects includes approximately 3.6 GW of alternating current (GWAC) power capacity across various regions served by Independent System Operators (ISOs) such as ERCOT, WECC, PJM, and MISO. These regions have been selected strategically based on favorable market conditions, grid infrastructure, and regulatory environments conducive to renewable energy integration. In connection with the Emergen transaction, we have secured rights to comprehensive “Work Product” Intangible assets essential for project development, including but not limited to: feasibility studies determining capacity and compatibility, establishing a production model of the project parameters, identifying any curtailment for the project, power flow site verification and substation identification, permitting and regulatory compliance documentation, engineering designs, equipment procurement plans, site preparation guidelines, and noting project specific challenges.
Subsequent to positive feasibility studies is the process of legal formation, analyzing and negotiating site control/surface and materials, and identifying engineering requirements for construction, identifying and negotiating interconnection to the grid, identifying tax abatements, and identifying permitting and study requirements, and noting additional project specific challenges. These assets provide a robust foundation for advancing our projects through the development lifecycle efficiently and effectively. We are in the process of negotiating grid interconnection agreements, ensuring compliance with applicable grid codes and standards, registering our projects for market participation, and coordinating with ISOs to align dispatch and grid service requirements. In addition, we are actively engaging with these ISOs to address cybersecurity compliance and to develop comprehensive monitoring and reporting frameworks, which are essential for maintaining operational integrity and grid support.
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On April 24, 2024 (the “Closing”) the Company completed the acquisition of Emergen in accordance with the MIPA whereby the Company issued 1,587,300 unregistered shares of its common stock to Emergen’s sole member, C&C Johnson Holdings LLC (“C&C”) in exchange for 100% of Emergen’s equity interests. C&C is controlled by Cole Johnson who became our President and a director following the Closing as well as the President of the Company’s BESS and Solar Divisions. In addition, Emergen became a wholly-owned subsidiary of the Company with C&C’s owning approximately 31.3% of the Company’s issued and outstanding shares of the Company’s capital stock.
Emergen holds a portfolio of battery energy storage system (“BESS”) projects identified in the MIPA with a cumulative storage capacity estimated at 1.965 gigawatts (GW) upon completion of the construction of such project (the “BESS Development Projects”) and rights to develop a portfolio of solar energy development projects with a cumulative capacity estimated at 1.640 GW upon completion of construction of such project (the “Solar Development Projects,” together with the BESS Development Projects, collectively, the “Development Projects”). The Company agreed that following the Closing, the Company would take all commercially reasonable steps necessary to uplist the Company to the NASDAQ stock exchange.
Project Management Services Agreement
At the Closing, the Company and Emergen entered into a Project Management Services Agreement (the “PMSA”) with Energy Independent Partners LLC (“Energy Independent Partners”), an entity owned or controlled by Mr. Johnson. Pursuant to the terms of the PMSA, Energy Independent Partners is obligated to provide the following project management services in connection with the development and operation of each of the Development Projects (collectively, the “Services”): (i) assist as needed with qualifying the Development Projects for financing; (ii) assist as needed with obtaining all permits required for development of the Development Projects which have sufficient rights to use all necessary real property, and for which the applicable draft interconnection agreement has been received for the Development Projects (“RTB Status”); and (iii) if Emergen foregoes the development of a Development Project, Energy Independent Partners will assist the Company as needed with marketing the Development Project to a third party or develop and retain the Development Project outside of Emergen.
Payment for Service. The Issuer agreed to pay Energy Independent Partners the following fees for providing the Services:
BESS Development Fees. In consideration of the provision of the Services related to the BESS Development Projects, and subject to the terms and conditions herein, during the Term, Bitech shall pay EIP the following amounts per BESS Development Project: $0.035 per W for each applicable BESS Development Project, subject to such BESS Development Project achieving sufficient project specific equity or debt financing from third parties to fund the payment of the fees (“BESS Development Fees”). Currently, the Company is focusing on developing the BESS projects and the total fees related to all 23 of the BESS projects would be the $0.035 per watt multiplied by the estimated capacity 1.965 GW (1,965,000,000 watts) or approximately $69 million.
Solar Development Fees. In consideration of the provision of the Services related to the Solar Development Projects, and subject to the terms and conditions herein, during the Term, Bitech shall pay EIP the following amounts per Solar Development Project: $0.035 per W for each applicable Solar Development Project, subject to such Solar Development Project achieving sufficient project specific equity or debt financing from third parties to fund the payment of the fees (“Solar Development Fees”). The Solar projects still in the Emergen portfolio have an estimated capacity of 1.640 GW and would have Solar Development Fees of approximately $57 million if developed.
If any Development Projects pursuant to the Agreement are sold by Emergen to a third-party then EIP would be due the greater of: (i) any unpaid project’s specific BESS Development Fees or Solar Development Fees defined in the PMSA agreement; or (ii) 62.5% of the proceeds less any project specific BESS Development Fees or Solar Development Fees paid previously.
Other Development Fees. For each other renewable energy development asset held by the Company, which are neither BESS Development Projects nor Solar Development Projects, located in the United States in which the Company engages during the term of the PMSA (the “Other Development Projects”), the Company shall pay Energy Independent Partners the higher of either (a) fifty percent (50%) of the gross margin or (b) $0.02 per watt in cash, subject to such Other Development Project achieving RTB Status (the “Other Development Fees”).
Timing of Payment of Fees
The BESS Development Fees shall be due and payable upon (i) Bitech, or any of its Affiliates, receiving project financing directly related to and collateralized by BESS Projects, this specifically excludes any general public or private offerings by Bitech not directly related to financing a BESS Project, and (ii) when a BESS Project’s financing funding terms is sufficient to pay the project specific Development Fees. EIP will be paid on the same timing as the funding terms. For example: if the terms for development fees are 50% at acceptance, 40% RTB and 10% at COD then EIP will be paid as the project development fees are funded.
These fees will be recorded as liabilities once the above contingencies and milestones are met, the most important being that of appropriate project financing enabling payment of these fees.
Acceleration of Payment Clause: Within ninety (90) days (i) of the effective date of a Change of Control or (ii) the removal of Cole W. Johnson as an employee or consultant to Emergen and/or the head of the BESS and Solar Division of Bimergen Energy, any remaining BESS Initial Fee and Solar Initial Fee shall become due and payable. A “Change of Control” shall be deemed to have occurred if, after the Effective Date, (x) the beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of securities representing more than 50% of the combined voting power of the Company is acquired by any “person” as defined in sections 13(d) and 14(d) of the Exchange Act (other than the Company, any subsidiary of the Company, or any trustee or other fiduciary holding securities under an employee benefit plan of the Company); (y) the merger or consolidation of the Company with or into another corporation where the shareholders of the Company, immediately prior to the consolidation or merger, would not, immediately after the consolidation or merger, beneficially own (as such term is defined in Rule 13d-3 under the Exchange Act), directly or indirectly, shares representing in the aggregate 50% or more of the combined voting power of the securities of the corporation issuing cash or securities in the consolidation or merger (or of its ultimate parent corporation, if any) in substantially the same proportion as their ownership of the Company immediately prior to such merger or consolidation; or (z) the sale or other disposition of all or substantially all of the Company’s assets to an entity, other than a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity, at least 50% of the combined voting power of the voting securities of which are owned directly or indirectly by shareholders of the Company, immediately prior to the sale or disposition, in substantially the same proportion as their ownership of the Company immediately prior to such sale or disposition.
If any Development Projects pursuant to the Agreement are sold by Emergen to a third-party then EIP would be due the greater of: (i) any unpaid project’s specific BESS Development Fees or Solar Development Fees defined in Section 2.06; or (ii) 62.5% of the proceeds less any project specific BESS Development Fees or Solar Development Fees paid previously.
The timing and other requirements for the payment of Other Development Fees shall be as agreed in writing by the parties to the PMSA via an addendum to the PMSA prior to the parties undertaking such Other Development Projects.
Subject to the terms and conditions of the PMSA, in addition to the other requirements therein, payment of the BESS Development Fees, the Solar Development Fees and any Other Development Fees is further contingent upon Cole W. Johnson (a) remaining an employee or consultant to Emergen and/or the head of the BESS and Solar Division of the Company and/or (b) as an interest owner in the Energy Independent Partners during the period of time in which the applicable BESS Development Fees, the Solar Development Fees or Other Development Fees are payable. Subject to the foregoing, the BESS Development Fees, the Solar Development Fees or Other Development Fees are payable within ten (10) days of satisfaction of the conditions to payment as discussed above.
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Payment for Sale of Development Projects. In the event the Company decides not to proceed with any Development Project(s), the Company may elect to sell such Development Project(s) to one or more third parties. In such event, the Company and Energy Independent Partners agree to a sales price for the applicable Development Project being sold, and provided that the parties to the PMSA agree that any sale agreement for such Development Projects shall provide that the buyer thereof shall remain obligated to pay to Energy Independent Partners the BESS Development Fees and/or the Solar Development Fee(s), as applicable, to the extent not already paid by the Company hereunder, unless otherwise agreed upon by the Company and Energy Independent Partners.
Termination. The PMSA may be terminated at any time prior to the expiration of its term: (a) by the mutual written consent of the parties; (b) by the Company if Energy Independent Partners has violated or breached any of the covenants or agreements of Energy Independent Partners set forth therein, or any of the representations or warranties of Energy Independent Partners set forth in the PMSA has become inaccurate or untrue, which violation, breach, inaccuracy or untruth, if reasonable capable of cure, has not been cured by Energy Independent Partners, within 20 business days after receipt by Energy Independent Partners of written notice thereof from the Company; (c) by Energy Independent Partners if the Company or Emergen has violated or breached any of the covenants or agreements of the Company or Emergen set forth in the PMSA, or any of the representations or warranties of the Company or Emergen set forth in the PMSA has become inaccurate or untrue, which violation, breach, inaccuracy or untruth, if reasonable capable of cure, has not been cured by the Company or Emergen, within 20 business days after receipt by the Company of written notice thereof from Energy Independent Partners; or (d) by any party, if a court of competent jurisdiction or other governmental authority shall have issued an order or taken any other action permanently restraining, enjoining or otherwise prohibiting the Combination or the transactions contemplated by the PMSA and such order or action shall have become final and nonappealable. Any of the Parties has a right to seek specific performance of the other parties’ obligations under the PMSA in lieu of its right to terminate the agreement.
Indemnification. Subject to certain limitations provided for in the PMSA, each of the parties to the PMSA mutually agreed to indemnify and hold harmless each other and each of their affiliates and each of their respective members, managers, partners, directors, officers, employees, stockholders, attorneys and agents and permitted assignees to the fullest extent permitted by applicable law, against and in respect of any and all losses incurred or sustained by such party as a result of or in connection with (i) any breach, inaccuracy or nonfulfillment or the alleged breach, inaccuracy or nonfulfillment of any of the representations, warranties, covenants and agreements of the other party contained in the PMSA or in any of the additional agreements or any certificate or other writing delivered pursuant hereto; or (ii) any claim for brokerage commissions in connection with the transactions contemplated hereby as a result of the actions or agreements of the other party or any of their representatives.
Comparison of the three month period ended March 31, 2025 with the three month period ended March 31, 2024.
The Company has generated no revenues from its primary business for the three months ended March 31, 2025 and March 31, 2024.
During the three months ended March 31, 2025, we incurred $857,037 of general and administrative expenses compared to $313,835 for the same period in 2024. General and administrative expenses have increased primarily related to approximately $313,000 of non-cash stock compensation expense and $95,000 contractor fees related to the Emergen projects.
As a result of the foregoing, we had net loss of ($857,644) for the three months ended March 31, 2025, compared to a net loss of ($313,507) for the three months ended March 31, 2024.
Contractual Obligations and Commitments
As of March 31, 2025 and December 31, 2024, we had total current liabilities of $2.2 million and $1.8 million, respectively, and current assets of $1.0 million and $1.0 million, respectively, to meet our current obligations. As of March 31, 2025, we had working capital of ($1.2 million) as compared to working capital of ($0.7 million) as of December 31, 2024.
For the three months ended March 31, 2025, cash used by operations was approximately ($142,000) which primarily included the net loss of approximately ($858,000) but adjusted for the non-cash stock based compensation of $313,000, common stock issued for legal services of $116,000, an increase in accounts payable of $85,000 compared to approximately ($166,000) cash used by operations which primarily included the net loss of approximately ($313,000) but adjusted for the non-cash stock based compensation of $94,000
For the three months ended March 31, 2025, cash provided by financing was approximately $83,000 including proceeds of $135,000 from short term loan due to a related party compared to $256,000 provided for the three months ended March 31, 2024 from sale of common stock.
The Company received and recorded as deferred revenue during 2024 a $943,500 deposit payment from the Project Sale Agreement with Bridgelink for an estimated 2.425 GW of Emergen’s estimated 3.840 GW of solar energy development projects. The total amount to be received by Emergen for the projects sold to Bridgelink is expected to be $19,400,000 unless certain of the projects are returned without development to the payment milestones. We have paid EIP $250,000 during 2024 related to the $943,500 deposit and owe an additional $339,688 currently recorded in due to related party. EIP will be due 62.5% of the proceeds received related to the Project Sale Agreement. If the remaining $18.5 million is received from the ultimate purchaser via Bridgelink we will owe EIP $11.5 million for their portion per the agreement.
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 March 31, 2025, 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 and development costs to develop and construct our planned BESS and Solar projects that are part of the Development Project rights we acquired upon completion of the acquisition of Emergen. As the Development Projects are in their early phase of development, we have not determined the amount of capital needed to complete their development or operate them until sufficient cash is generated from their operations. The primary source of liquidity has primarily been private financing transactions. The ability to fund operations, to make planned capital expenditures, to execute on the development and commercialization of the Development Projects depends on our ability to raise funds from debt and/or equity financing which is subject to prevailing economic conditions and financial, business and other factors, some of which are beyond our control. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms.
Off-Balance Sheet Arrangements
As of the date of this 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.
Recently Issued Accounting Pronouncements
A description of recently issued accounting pronouncements that may potentially impact our financial position, results of operations or cash flows is disclosed in Note 2 to our condensed financial statements included elsewhere in this Quarterly Report on Form 10-Q.
Critical Accounting Estimates
Our significant accounting policies and critical accounting estimates are described in Note 2 to our audited financial statements for the year ended December 31, 2024 included in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on May 30, 2025. There have been no material changes to our significant accounting policies or critical accounting estimates during the three months ended March 31, 2025.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
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.
ITEM 4. CONTROLS AND PROCEDURES
Benjamin B. Tran, our President and Chief Executive Officer, is our principal executive officer and Robert J. Brilon, our Chief Financial Officer, is our principal financial officer.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) (our principal executive officer and principal financial officer, respectively), evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) as of March 31, 2025 (the “Evaluation Date”). Disclosure controls and procedures are controls and other procedures designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.
Based on their evaluation, the CEO and the CFO have concluded that our disclosure controls and procedures were not effective as of March 31, 2025, because of the material weaknesses in our internal control over financial reporting described below.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected on a timely basis.
In connection with our audit of the financial statements for the year ended December 31, 2024 and as of March 31, 2025, we identified material weaknesses in the design and operating effectiveness of our internal control over financial reporting related to the fact that we did not appropriately design and maintain entity-level controls impacting the control environment, risk assessment, control activities, information and communication and monitoring activities to prevent or detect material misstatements to the financial statements. These material weaknesses related to (i) an insufficient number of qualified resources to ensure adequate oversight and accountability over the performance of controls, including retention of control evidence, (ii) ineffective identification and assessment of risks impacting internal control over financial reporting, (iii) insufficient segregation of duties and (iv) insufficient evaluation and determination as to whether the components of internal controls were present and functioning based upon evidence maintained for management review controls and activity level controls across substantially all financial statement areas.
These material weaknesses contributed to the following additional material weakness: we did not design and maintain effective (i) general controls over information systems that support the financial reporting process, (ii) controls over the completeness and accuracy of information used in the operation of control activities across substantially all financial statement areas, and (iii) management review controls at a sufficient level of precision to detect a material misstatement across substantially all financial statement areas that involve complex and judgmental areas of accounting and disclosure.
There were no adjustments that resulted from the above material weaknesses. However, these material weaknesses could result in a misstatement of substantially all of our accounts or disclosures that would result in a material misstatement of our annual or interim financial statements that would not be prevented or detected.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the three months ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations on Effectiveness of Controls
Internal control over financial reporting has inherent limitations. It may not prevent or detect all misstatements, and projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate due to changes in conditions or that the degree of compliance with policies and procedures may deteriorate. Internal control systems are also subject to human error or intentional circumvention. Therefore, even effective internal controls can provide only reasonable assurance with respect to financial statement preparation and presentation.
Changes in Disclosure Controls and Procedures
None.
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PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
As of the date of this Annual Report, to our knowledge, there are no legal proceedings or regulatory actions material to us to which we are a party, or have been a party to, or of which any of our property is or was the subject matter of, and no such proceedings or actions are known by us to be contemplated except as provided below:
Due to the misrepresentations and omissions of SuperGreen, Calvin C. Cao and Michael H. Cao, among other reasons, the Company filed a complaint in the U.S. District Court, Central District of California on February 2, 2023 against SuperGreen, Michael H. Cao, Linh T. Dao, Calvin C. Cao and entities affiliated with them alleging fraud-concealment, breach of contract, breach of fiduciary duty-duty of good faith, breach of fiduciary duty-undivided loyalty, conversion and violation of California Penal Code Sec. 496 (the “Cao Lawsuit”). This lawsuit seeks compensatory damages of at least $33.6 million, treble and punitive damages, imposition of a constructive trust over the defendants assets, pre-judgment and post-judgment interest, attorney’s fees and such other relief as determined by the court.
Settled Matters
Effective February 20, 2023, the Company, together with its wholly owned subsidiary Bitech Mining Corporation, entered into a Confidential Settlement, Mutual Release, and Share Transfer Agreement (the “C. Cao Settlement Agreement”) with C. Cao and SuperGreen (collectively, the “C. Cao Parties”). The C. Cao Settlement Agreement settled the Cao Lawsuit as to the C. Cao Parties. Pursuant to the C. Cao Settlement Agreement, the C. Cao Parties terminated the License Agreement and SuperGreen canceled 367,913 shares of the Company’s common stock, par value $0.001 per share issued by the Company to SuperGreen pursuant to the License Agreement. In addition, the parties to the C. Cao Settlement Agreement agreed to a mutual general release of liabilities against each other, refrain from making any disparaging remarks about each other and the Company’s filing a dismissal with prejudice of the Cao Lawsuit as to the C. Cao Parties.
Effective October 7, 2024, the Company entered into a Confidential Settlement, Mutual Release, and Share Transfer Agreement (the “Thomason Settlement Agreement”) with Mr. Thomason. Pursuant to the Thomason Settlement Agreement, the Company canceled 18,396 shares of the Company’s common stock, par value $0.001 per share previously issued by the Company to Mr. Thomason. In addition, the parties to the Thomason Settlement Agreement agreed to a mutual general release of liabilities against each other, refrain from making any disparaging remarks about each other and the Company’s filing a dismissal with prejudice as to Mr. Thomason in the Cao State Court Lawsuit.
Unsettled Matters
On March 6, 2023, Michael Cao and Linh Dao filed a pro se Motion to Dismiss for Lack of Jurisdiction. On April 17, 2023, the court dismissed the Cao Lawsuit without prejudice due to a lack of subject matter jurisdiction. On April 18, 2023, the Company filed a complaint against Michael H. Cao, Linh T. Dao, B & B Investment and Cory Thomason in the Orange County California Superior Court containing substantially the same allegations included in the Cao Lawsuit (the “Cao State Court Lawsuit”). Mr. Thomason was dismissed from the Cao State Court Lawsuit on November 8, 2024. The Company continues to pursue the Cao State Court Lawsuit as to the remaining defendants in that case, namely Michael Cao, Linh Dao, and B&B Investment.
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After serving Defendants Mr. Cao, Ms. Dao and B & B Investment on April 26, 2023, the Defendants (pro se) filed a Motion to Quash Service of Summons; Motion to Dismiss or Stay Complaint (the “B & B Motions”). In response, the Company filed a Motion to Strike B & B Investment’s motion (the “Motion to Strike”), Request for Sanctions in Amount of $2,400 and Request for Default as to B & B Investment because it is being impermissibly represented by Michael H. Cao who is engaging in the unauthorized practice of law as to a corporate entity. On October 13, 2023, the Court granted in part the Company’s unopposed Motion to Strike, striking the B & B Investment Motions and ordering B &B Investment to retain an attorney no later than October 27, 2023 or be subject to default because corporate entities are not permitted to appear in court without an attorney. The Court denied Mr. Cao’s Motion to Quash and took Linh Dao’s Motion to Quash off calendar, thus keeping all Defendants in the case. The Court ruled that Michael Cao already waived his rights to file such a motion by making a general appearance in the case and noted that Defendants failed to appear at the hearing. On or about October 27, 2023, the Company’s counsel received an initial communication from an attorney attaching responses to the Company’s complaint on behalf of Mr. Cao and B&B Investment. On November 27, 2023, Mr. Cao and B&B Investment filed a Demurrer to the Complaint and Motion to Strike Portions of the Complaint. On May 10, 2024, the court heard responses to the Company’s complaint and motions filed by Mr. Cao. The court sustained the demurrer to the first, second, fifth, and sixth causes of action, granting 30 days to amend. It overruled the demurrer to the third and fourth causes of action. The court also sustained the motion to strike paragraph 6 of the prayer for relief and granted the motion to strike punitive damages with leave to amend. A case management conference was set for August 19, 2024.
The Company filed a first amended complaint in the Cao State Court Lawsuit on June 7, 2024. On July 10, 2024, the counsel for Mr. Cao, B & B Investment, and Ms. Dao filed motions to be relieved, which the court granted on August 2, 2024. The case management conference was postponed to November 25, 2024. Defendants had until August 16, 2024 to file a response to the first amended complaint but failed to do so, leading to defaults being entered against them on August 23, 2024. The Company filed applications for default judgment against Mr. Cao, Ms. Dao and B & B Investment on November 8, 2024, that are pending review by the Court. On November 18, 2024, the Court vacated the case management conference and set an order to show cause hearing for April 28, 2025, and ordered the Company to submit a default judgment packet in advance of that date.
Current Status
Thus far, the Company has recovered 386,309 shares of the Company’s common stock from the C. Cao Settlement Agreement and the Thomason Settlement Agreement. The Company has not otherwise received any cash recovery to date. The Company is seeking return of the remaining 1,287,694 shares of the Company’s common stock through the default judgment sought against Mr. Cao, Ms. Dao and B & B Investment in the Cao State Court Lawsuit, as well as $29,309 in damages, prejudgment interest, and costs.
Litigation Assessment
We have evaluated the foregoing Cao Lawsuit to assess the likelihood of any unfavorable outcome and to estimate, if possible, the amount of potential loss as it relates to the litigation. Based on this assessment and estimate, which includes an understanding of our intention to vigorously prosecute the Cao Lawsuit, we believe that the potential defenses of any of the remaining defendants lack merit, however, and we cannot predict the likelihood of any recoveries by any of our claims against the remaining defendants. This assessment and estimate is based on the information available to management as of the date of this Annual Report and involves a significant amount of management judgment, including the inherent difficulty associated with assessing litigation matters in their early stages. As a result, the actual outcome or loss may differ materially from those envisioned by the current assessment and estimate. Our failure to successfully prosecute, defend or settle the Cao Litigation with the remaining defendants could have a material adverse effect on our financial condition, revenue and profitability and could cause the market value of our common stock to decline.
ITEM 1A. RISK FACTORS
Smaller reporting companies are not required to provide the information required by this item.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The following information represents securities sold by us during the quarter ended March 31, 2025 which were not registered under the Securities Act. Included are new issues, securities issued in exchange for property, services or other securities, securities issued upon conversion from our other share classes and new securities resulting from the modification of outstanding securities. We sold all of the securities listed below pursuant to the exemption from registration provided by Section 4(a)(2) of the Securities Act, or Regulation D or Regulation S promulgated thereunder and Section 3(a)(10) of the Securities Act.
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During February 2025, the Company issued 18,000 shares of its restricted Common Stock to an investor relations firm for six months of investor relations services. The shares were valued at $113,400.
As of March 31, 2025, the Company agreed to issue 320 shares of its Common Stock to its legal counsel as partial payment for legal services for the three months ended March 31, 2025. The shares were valued at $2,180.
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. None of the foregoing securities as well as common stock issuable upon conversion or exercise of such securities, have been registered under the Securities Act or any other applicable 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 3. DEFAULTS UPON SENIOR SECURITIES.
Not applicable.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
ITEM 5. OTHER INFORMATION.
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ITEM 6. EXHIBITS
| * | Filed or furnished herein. |
| ^ | Certain confidential information has been excluded from this exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed. |
| † | Includes management contracts and compensation plans and arrangements. |
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SIGNATURES
Pursuant to the requirements 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.
| Bimergen Energy Corporation | ||
| Date: June 9, 2025 | By: | /s/ Benjamin Tran |
| Benjamin Tran | ||
| Chief Executive Officer (Principal Executive Officer) | ||
| Date: June 9, 2025 | By: | /s/ Robert J. Brilon |
| Robert J. Brilon | ||
| Chief Financial Officer (Principal Financial and Accounting Officer) |
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