Overview

The Company was formed in January 2013 as a Nevada corporation. The original business plan of the Company was to build and sell multi-family housing projects. The Company acquired a parcel of land in Taunton, Massachusetts, from The Mazzal Trust, a trust of which the founder of the Company, Nissim Trabelsi, was the Trustee, in exchange for shares of the Company's common stock, and began development of the project and construction of multi-family units.

On October 26, 2015, the Company acquired Global ITS, Inc. and its wholly owned subsidiary, Znergy, Inc. in order to expand into the Energy Efficiency (EE) marketplace, focusing on commercial lighting and green project financing. On February 9, 2016, the Company agreed to sell to the Mazzal Trust the real property which the Trust had previously sold to the Company and the Trust returned to the Company 149,950,000 of the 150,000,000 shares of the Company's common stock owned by the Trust. This transaction caused a change of control with Global being the accounting acquirer. The Company is now focused solely on the EE marketplace with an emphasis on LED retrofitting and installing new lamps.

The Company determined that Global ITS, Inc. served no purpose for the Company. It held no assets or operations, had been dormant for over a year, except for the operations of its wholly owned Subsidiary. On October 1, 2018, the Company sold 100% of its shares in Global to Peter Peterson, a shareholder of the Company and a creditor of Global for a nominal amount. The sale did not include Global's investment in its subsidiary.

The Company is a provider of energy-efficient lighting products, lighting controls and energy management solutions. The Company offers a full turn-key lighting solution which includes economic assessments, energy efficient analysis, installation and rebate support for the Company's customers. The Company's business primarily involves retrofitting existing lighting solutions from traditional high intensity metal halide and fluorescent lighting to energy efficient LED (Light Emitting Diode) technology.

Managing energy consumption and the associate costs is increasingly important to building owners. Technological advancements in LED, together with significant private and public incentives for sustainability initiatives have made lighting infrastructure changes an effective way for building owners to cut energy costs. LED lighting provides energy efficiency, long life, low running temperatures and increasing technology such as dimmable lights.

The Company does not have long term contracts with its customers and the Company's revenue comes from the sales of lighting systems involving the replacement of existing lighting fixtures with new energy efficient LED fixtures. In addition, the Company generates revenue from available utility incentives and rebate programs.


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The Company provides its turn-key service though a detailed evaluation of the customer's needs and performing an audit of the customer's current energy consumptions and costs, together with an analysis of the benefits of retrofitting their lights. Typically, the customer experiences an average payback on their investment between 12 and 24 months.

The Company intends to grow organically by selling energy efficiency (EE) and commercial security (CS) products to industrial and commercial businesses as well as municipal and state governments, universities and colleges, K-12 schools, and hospitals (the "MUSH" market). Strained government budgets have convinced state and local governments across the United States to embrace a new form of performance-based investments in energy efficiency offered by Energy Services Companies, or ESCOs. An ESCO provides energy-efficiency-related and other value-added services and for which performance contracting is a core part of its energy-efficiency services business. In a performance contract, the ESCO guarantees energy or financial savings for the project, which means ESCOs only make money if the project performs as promised. A study prepared by Allied Market Research indicated that the market is expected to grow at a Compound Annual Growth Rate of 13.76% during the forecast period 2014-2020 and reach $44.4 billion by 2020.

The Company plans to increase its competitive position by providing financing to customers for installation projects through a strategic partnership the Company has developed with a well-established funding group focused on energy efficiency projects.





Results of Operations

The Company had revenues of $416,774 and $259,582 for the three-month periods ended June 30, 2019, and 2018, respectively. The Company had revenues of $603,392 and $742,554 for the six-month periods ended June 30, 2019, and 2018, respectively. Revenues in 2018 and 2018 comprise LED installation projects and associated rebates from utilities. The increase in revenues for the three-month period is due to continued organic growth of the core business. The decrease in revenues for the six-month period is due to lost contracts. The Company expects to continue to see increased revenue in future periods but can make no assumptions as to size of any increases or certainty thereof. Additionally, the normal sales cycle of the business contains variability period over period.

The Company incurred costs of revenue of $391,571 and $176,368 for the three-month periods ended June 30, 2019 and 2018, respectively. The Company incurred costs of revenue of $566,973 and $405,996 for the six-month periods ended June 30, 2019 and 2018, respectively. Costs of revenue in 2019 and 2018 comprise primarily LED product and installation costs, including labor and rental equipment. Cost of revenue as a percentage of revenue can be impacted by the type of jobs and if the job requires customized lighting.

The Company had general and administrative expenses of $842,801 and $583,649 for the three-month periods ended June 30, 2019 and 2018, respectively. The Company had selling, general and administrative expenses of $2,933,465 and $1,818,001for the six-month periods ended June 30, 2019 and 2018, respectively. The increase for the three-month period is also primarily due to an increased equity-based compensation costs. The increase for the six-month period is primarily due to an increase in stock-based compensation costs.

The Company incurred interest expense of $42,708 and $58,083 for the three and six-month periods ended June 30, 2019. This is compared to $64,591 and $176,150 for the same periods in 2018. This is the result of the additional Notes Payable and Advances the company has entered into to finance the operations of the Company.

The Company had net losses of $858,529 and $608,514 for the three-month periods ended June 30, 2019 and 2018, respectively, and net losses of $2,951,893 and $1,701,081 for the six-month periods ended June 30, 2019 and 2018, respectively.

Liquidity and Going Concern Discussion

The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. As of June 30, 2019, the company had a working capital deficit of $2,574,979, insufficient cash resources to meet its planned business objectives, and recurring losses of ($858,529) and ($2,951,893) for the three and six month's ended June 30, 2019 and ($608,514) and ($1,701,081) for the three and six month's ended June 30, 2018. The Company intends to fund operations through equity and debt financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements through April, 2022. As a result, the Company is seeking additional funding through debt and equity financing arrangements, or other funding opportunities.

The Company's success is dependent upon, among other things, obtaining the additional financing to continue operations and to execute its business plan. No assurances can be made that management will be successful in pursuing any of these strategies.

These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern. The accompanying condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.





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Plan of Operation

The Company's anticipated plan of operation is to continue to (1) identify and train sales personnel in regions of the country that have advantageous utility company rebate programs, (2) identify and train lighting installation personnel where we have established sales personnel, (3) seek out the best current and incipient solutions in the Energy Efficiency marketplace and become a reseller of those solutions, (4) develop our own solutions for the EE marketplace, and (5) seek to acquire other businesses in the market where such acquisitions makes strategic sense and are accretive to earnings.

The Company continues to expand its solutions portfolio for both indoor and outdoor applications to capitalize on the evolving and growing market for intelligent networked systems that collect and exchange data to increase efficiency as well as provide a host of other economic benefits resulting from data analytics to better enable smart buildings and smart cities. The transition to solid-state lighting provides the opportunity for lighting to be integrated with other building automation systems to create an optimal platform for enabling the "Internet of Things" (IoT), which will support the advancement of smart buildings, smart cities, and the smart grid.

The Company's ability to grow its incipient operations is primarily dependent upon its ability to raise additional capital, most likely through the sale of additional shares of the Company's common stock or other securities. There can be no guarantee that the Company will be able raise additional capital on terms that are acceptable to the Company, or at all.

The realization of revenues in the next twelve months is important in the execution of the plan of operations. However, if the Company cannot raise additional capital by issuing capital stock in exchange for cash, or through obtaining commercial or bank financing, in order to continue as a going concern, the Company may have to curtail or cease its operations. As of the date of this Report, there were no formal or informal agreements to attain such financing. The Company cannot assure any investor that, if needed, sufficient financing can be obtained or, if obtained, that it will be on reasonable terms. Without realization of additional capital, it would be unlikely for operations to continue.

Critical Accounting Policies

There have been no changes to our critical accounting policies from those included in our Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC on September 4, 2020.

Recently Issued Accounting Pronouncements

We are required to adopt certain new accounting pronouncements. See Note 2 to the condensed consolidated financial statements included in Item 1 of this Form 10-Q.

Off-Balance Sheet Arrangements

We have not entered into any off-balance sheet arrangements or issued guarantees to third parties.

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