The following discussion and analysis of our financial condition and operating
results should be read together with our financial statements and related notes
included elsewhere in this report. This discussion and analysis and other parts
of this report contain forward-looking statements based upon current beliefs,
plans, and expectations that involve risks, uncertainties, and assumptions. Our
actual results may differ materially from those anticipated in these
forward-looking statements as a result of various factors, including those set
forth under "Risk Factors" or in other parts of this report. Our fiscal quarters
end on
Overview
We develop projects for renewable power generation, desalinated water production, and air conditioning using our proprietary technologies designed to extract energy from the temperature differences between warm surface water and cold deep water. In addition, our projects provide ancillary products such as potable/bottle water and high-profit aquaculture, mariculture, and agriculture opportunities.
We currently have no source of revenue, so as we continue to incur costs we are dependent on external funding for operations. We cannot assure that such funding will be available or, if available, can be obtained on acceptable or favorable terms.
Our operating expenses consist principally of expenses associated with the development of our projects until we determine that a particular project is feasible. Salaries and wages consist primarily of employee salaries and wages, payroll taxes, and health insurance. Our professional fees are related to consulting, engineering, legal, investor relations, outside accounting, and auditing expenses. General and administrative expenses include travel, insurance, rent, marketing, and miscellaneous office expenses. The interest expense includes interest and discounts related to our loans and notes payable.
Results of Operations
Comparison of Years Ended
We had no revenue in the years ended
During the year ended
During the years ended
General and administrative expenses were
Our interest expense was
Our amortization of debt discount and loan fee expenses was
Our operations used net cash of
Investing activities for the years ended
22
Financing activities provided cash of
Liquidity and Capital Resources
At
Our consolidated financial statements have been prepared assuming we will continue as a going concern. We have experienced recurring losses from operations and have an accumulated deficit. Our ability to continue our operations as a going concern is dependent on management's plans, which include the raising of capital through debt and/or equity markets until such time that revenue provided by operations is sufficient to fund working capital requirements. We will require additional funding to finance the growth of our current and expected future operations as well as to achieve our strategic objectives. The accompanying consolidated financial statements have been preparedon a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. These consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should we be unable to continue as a going concern. In recent weeks, the continued spread of COVID-19 has led to disruption and volatility in the global capital markets, which increases the cost of capital and adversely impacts access to capital. The disruption may have an adverse impact on the Company's ability to raise capital through debt and/or equity markets to fund working capital requirements or to continue as a going concern.
We have no significant contractual obligations or commercial commitments not reflected on our balance sheet as of this date.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as "special purpose entities.
Critical Accounting Policies
We have identified the policies outlined below as critical to our business
operations and an understanding of our results of operations. The list is not
intended to be a comprehensive list of all of our accounting policies. In many
cases, the accounting treatment of a particular transaction is specifically
dictated by accounting principles generally accepted in
Revenue Recognition
In
Income Taxes
We use the liability method of accounting for income taxes. Under the liability method, deferred tax assets and liabilities are determined based on temporary differences between financial reporting and tax bases of assets and liabilities and on the amount of operating loss carry-forwards and are measured using the enacted tax rates and laws that will be in effect when the temporary differences and carry-forwards are expected to reverse. An allowance against deferred tax assets is recorded when it is more likely than not that such tax benefits will not be realized.
23 Capitalization Policy
Furniture, vehicles, equipment, and software are recorded at cost and include major expenditures that increase productivity or substantially increase useful lives. Maintenance, repairs, and minor replacements are charged to expenses when incurred. When furniture, vehicles, and equipment are sold or otherwise disposed of, the asset and related accumulated depreciation are removed from this account, and any gain or loss is included in the statement of operations. The cost of furniture, vehicles, equipment, and software is depreciated over the estimated useful lives of the related assets.
Assets under construction represent costs incurred by us for our renewable energy systems currently in process. We capitalize costs incurred once the project has met the project feasibility stage. Costs include environmental engineering, permits, government approval costs, and site engineering costs. We currently have several projects in the development stage. We capitalize direct interest costs associated with the projects.
Recent Accounting Pronouncements
We have reviewed all recently issued, but not yet adopted, accounting standards
in order to determine their effects, if any, on our consolidated results of
operations, financial position, and cash flows. Based on that review, we believe
that none of these pronouncements will have a significant effect on current or
future earnings or operations (see Note 1 of the notes to our consolidated
financial statements for the year ended
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