| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
The following discussion
and analysis should be read in conjunction with our unaudited interim condensed consolidated financial statements and related notes appearing
elsewhere in this report on Form 10-Q. In addition to historical information, this discussion and analysis contains forward-looking statements
that involve risks, uncertainties, and assumptions. Our actual results may differ materially from those anticipated in these forward-looking
statements as a result of certain factors, including but not limited to those set forth under “Risk Factors” in our Form 10-K,
as filed with the United States Securities and Exchange Commission, or the SEC, on September 7, 2021.
Cautionary Note Regarding Forward-Looking
Statements
The information in this
report contains forward-looking statements. All statements other than statements of historical fact made in this report are forward looking.
In particular, the statements herein regarding industry prospects and future results of operations or financial position are forward-looking
statements. These forward-looking statements can be identified by the use of words such as “believes,” “estimates,”
“intends”, “plans”, “could,” “possibly,” “probably,” anticipates,” “projects,”
“expects,” “may,” “will,” or “should,” “designed to,” “designed for,”
or other variations or similar words or language. No assurances can be given that the future results anticipated by the forward-looking
statements will be achieved. Forward-looking statements reflect management’s current expectations and are inherently uncertain.
Our actual results may differ significantly from management’s expectations.
Although these forward-looking
statements reflect the good faith judgment of our management, such statements can only be based upon facts and factors currently known
to us. Forward-looking statements are inherently subject to risks and uncertainties, many of which are beyond our control. As a result,
our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors,
including those set forth below under the caption “Risk Factors.” For these statements, we claim the protection of the safe
harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You should not unduly rely on
these forward-looking statements, which speak only as of the date on which they were made. They give our expectations regarding the future
but are not guarantees. We undertake no obligation to update publicly or revise any forward-looking statements, whether as a result of
new information, future events or otherwise, unless required by law.
General
Business Overview
Green Stream Holdings
Inc. (the “Company”) is a provider of next-generation solar energy solutions to underrepresented and/or growing market segments.
The Company is currently targeting high-growth solar market segments for its advanced solar power generation systems (“solar systems”),
operating in multiple markets and is prepared for conducting business in several industry-friendly locations including California, Nevada,
Arizona, Washington, New York, New Jersey, Massachusetts, New Mexico, Colorado, Hawaii, and Canada. Our business office is located at
201 E. Fifth Street, Suite 100, Sheridan, Wyoming 82801.
The Company was originally
incorporated on April 12, 2004, in the State of Nevada under the name of Ford-Spoleti Holdings, Inc. On June 4, 2009, the Company merged
with Eagle Oil Holding Company, a Nevada corporation, and the surviving entity, the Company, changed its name to “Eagle Oil Holding
Company, Inc.” On April 25, 2019, the Company entered into an Acquisition and Merger Agreement between the Company and Green Stream
Finance, Inc., and following the merger contemplated by such agreement the Company commenced its current operations (the “Reorganization”)
and changed its name to “Green Stream Holdings Inc.” Effective September 25, 2019, the Company elected to convert the Company
from Nevada corporation to Wyoming corporation. On December 13, 2019, the Company amended its articles of incorporation to increase its
authorized capital stock to 10,000,000,000 shares of common stock, par value of $0.001 per share and 12,000,000 shares shall be shares
of preferred stock, par value of $0.001 per share.
The Company’s common
stock is currently quoted on the OTC Markets under the symbol “GSFI.”
We are a marketer and
contractor of solar systems to underrepresented and/or growing market segments to homeowners, landowners, commercial building owners in
the United States. Since the Reorganization, the Company has been involved primarily in organizational activities as a marketer of solar
systems. The Company has not yet generated any revenues from these activities. The Company has developed relationships with selective
world-class designers and manufacturers of solar power solutions, such as the famed architect Anthony Morali of Renewable Energy Development
LLC (“RED”), a leading expert in solar infrastructure design. The Company hopes to leverage these relationships to offer the
unique solar energy solutions provided by RED and others to the Company’s customers. The Company currently has no manufacturing
or installation capabilities and will rely upon third-parties like RED to design, manufacture, and install our solar systems.
The Company will be relying
on both RED and others for the development, design and construction of its projects. The Company anticipates using RED for solar designs
and the local building and electrical permitting where geographically permissible. The Company plans to use others to provide the engineering,
procurement and construction work for the projects including the New York State Energy Research and Development and utility interconnection
applications.
It is anticipated that
when projects commence, RED and others will be paid initial payments upon execution of an agreement for a particular project. It is also
expected that they will be paid on a project-by-project basis in installments as they complete various phases of the project and reach
applicable milestones within respective agreements.
For example, we anticipate
paying an initial payment of $25,000 when we enter into an agreement for a specific project and then an additional installment of approximately
$65,000 for materials and to begin mobilization. As with any construction job, other amounts will be required to be paid based on the
size and complexity of the project. Similarly, the amounts we anticipate having to pay RED will likely change on a project by project
basis based on the size and wattage of the particular project.
However, we cannot predict
exactly what such actual final payments will be.
Solar
Systems
The Company intends to
generate initial revenue by arranging for the design, installation, operation, maintenance, repair and replacement of solar systems on
the top of buildings pursuant to leases it has entered into with the owners of these properties, which leases are discussed in “Plan
of Operations” (the Solar Leases). We currently rely on RED and other vendors for the design, manufacture and installation of the
solar systems we market and sell. These vendors will be paid on a project by project basis for the design, materials, manufacturing and
installation of each solar system. We will be required to pay for the products and services needed to build these systems before their
completion and before these systems will be able to produce electricity, and before we will be able to generate revenues from the sale
of that electricity to electric utility companies or customers. Once these solar systems have commenced operations, and depending on the
regulatory regime, electric utility policies and other circumstances of the areas in which a solar system is built, the Company will then
market net metering agreements under which the electricity generated by the system is sold to the customer’s local utility company.
Community
Solar
“Community Solar”
is a collection of solar panels in a publicly shared space that generates electricity from the sun.
These panels are placed
near homes and in neighborhoods where they can provide maximum benefit to people who typically may not have the ability to use solar power.
We endeavor to make the
move to solar energy simple for our customers by identifying quality product manufacturers and installers and arranging the financing,
design, permitting, construction and maintenance of our energy solutions. We work with a group of contractors who design, procure, permit,
install, and interconnect a suitable solar energy solution to the utility grid, simplifying the installation of solar systems. Although
we have engaged or from time to time engage third-party manufacturers for production and distribution logistics, we will be the party
who communicates with the customers throughout the entire period of services of our energy solutions.
The Company’s strategy
to increase sales will be to offer fundamentally unique solar power systems, including those designed by RED or other comparable designers,
and to introduce a highly customizable and personalized approach to after-sales customer service through a unique type of contractual
relationship with its customers.
During the next six months
it is the Company’s plan to:
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Raise capital to build more solar systems and increase its marketing of Community Solar projects. |
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Initiate aggressive online and offline marketing campaigns to build our brand, market awareness, and recognition. |
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Increase sales via increased advertising and marketing campaigns. |
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Hire additional key employees to help strengthen the Company. |
We plan to work with
(i) private homeowners, (ii) local roofing companies, (iii) solar installation companies, (iv) custom homebuilders, (v) mass-market homebuilders
and (vi) and commercial building and multi-unit residential owners. Our target market is commercial building and property owners in New
York and New Jersey. We currently have Solar Leases with commercial property owners in New York and New Jersey, and, assuming we are able
to obtain adequate financing, we expect to complete these systems.
Description of Products
and Services
Green Stream endeavors
to provide solar energy solutions to underrepresented and/or growing market segments that seek renewable energy solutions but don’t
have direct access to them. We plan to first develop solar power generation systems (“solar systems”) at the locations that
are the subject of the Solar Leases, and then market net metering agreements or community solar solutions to customers nearby, depending
on the regulatory regime, electric utility policies and other circumstances of the areas in which a solar system is built.
The Company believes
that its revenues in key regions will be derived directly from agreements that lease solar systems that we arrange the building of to
our customers. Pursuant to these agreements, the Company, owns, operates, and maintains the solar system, and a host customer agrees to
site the system on its property. The Company will then attempt to enter into net metering agreements to sell electric output from the
solar services provider for a predetermined period (usually twenty-five years) to the host’s local utility. This financial arrangement
allows the host customer to receive stable and low-cost electricity, while the solar services provider or another party acquires valuable
financial benefits, such as tax credits and income generated from the sale of electricity. The Company would be responsible for the development,
design, and the administration of the project, obtaining permits, financing, and managing the solar system, and well as its installation
and maintenance.
The Company does not
expect to enter into agreements for the design, construction or installation of any solar facilities until it has obtained all necessary
approvals for the installation of the system from local authorities and entered into a net metering agreement with the applicable utility.
Moreover, pursuant to the terms of the Company’s existing leases, the Company is similarly not required to pay rent to the owner
until it begins generating revenue through a net metering agreement. If, however, the Company commences, or engages a contractor to commence,
the development, construction or installation of a solar system prior to entering into a net metering agreement, there can be no assurance
that the Company will be successful in entering into a net metering agreement following the facility’s completion and the Company
may be required to seek alternative means to recoup the investment in the facility, such as a purchase power agreement, for example, of
which there can be no assurance that the Company will be able to find such an arrangement or find one on terms that are favorable to the
Company.
An interconnection agreement
is generally required from the applicable local electricity utility to interconnect a solar energy system with the utility grid. In almost
all cases, interconnection agreements are standard form agreements that have been pre-approved by the local public utility commission
or other regulatory body with jurisdiction over interconnection. As such, no additional regulatory approvals are required once interconnection
agreements are signed. We would prepare and submit these agreements on behalf of our customers to ensure compliance with interconnection
rules. Under this business model, the host customer buys the services produced by our solar energy solutions rather than the solution
itself.
We expect to function
as the project coordinator, arranging the financing, design, permitting, and construction of the system. We plan to purchase the solar
panels for the project from a PV manufacturer, who provides warranties for system equipment. The installers we initially plan to contract
with will design the system, specify the appropriate system components, and may perform the follow-up maintenance over the life of the
PV system. Although we may eventually develop an in-house team of installers, we currently do not have such a team. Once the construction
agreement is signed, a typical installation is expected to be completed in three to six months.
Plan of Operations
We intend to pursue the
development of our solar greenhouses, sales of Community Solar installations, and development of Company owned Community Solar installations.
Development of solar greenhouses is dependent upon or continued relationship with RED and Anthony Morali. We also seek to capitalize on
the agreements in principle we have with several commercial buildings owners where we hope to install solar systems where we will market
our solar power solution to customers close to those facilities and capitalize on tax incentives for solar power generation and the sale
of excess capacity back to local utilities. We will experience a relative increase in liquidity as we receive net offering proceeds and
a relative decrease in liquidity as we spend net offering proceeds in connection with the acquisition, development, and operation of our
assets. We have identified no additional material internal or external sources of liquidity as of the date of this filing.
We expect to use the
net proceeds received from stock offerings in our efforts related to research and development in conjunction with RED and exploration
of market opportunities, as well as for working capital and other general corporate purposes. Our anticipated costs include employee salaries
and benefits, compensation paid to consultants, capital costs for research and other equipment, costs associated with development activities
including travel and administration, legal expenses, sales and marketing costs, general and administrative expenses, and other costs associated
with a development-stage company. We do not anticipate increasing the number of employees because the Company intends to use independent
contractors; however, this is highly dependent on the nature of our development efforts. We anticipate adding employees in the areas of
sales and marketing, and general and administrative functions as required to support our efforts. We expect to incur consulting expenses
related to technology development and other efforts as well as legal and related expenses to protect our intellectual property.
The amounts that we spend
for any specific purpose may vary significantly, and will depend on a number of factors including, but not limited to, the pace of progress
of our commercialization and development efforts, actual needs with respect to product testing, research and development, market conditions,
and changes in or revisions to our marketing strategies, as well as any legal or regulatory changes which may ensue. In addition, we may
use a portion of any net proceeds from the Regulation A Offering to acquire complementary products, technologies or businesses; however,
we do not have plans for any acquisitions at this time.
There is a current market
trend of declining prices in solar power cells and solar power modules. Although our solar power greenhouse is projected to have both
a significant advantage of both cost and efficiency, which we believe would minimize the effects of the trend, there is no certainty that
government, commercial and retail consumers will continue to enter into the solar market.
If we are unable to raise
the net proceeds from our Regulation A Offering that we believe are needed to fund or business plan, we may be required to scale back
our development plans by reducing expenditures for employees, consultants, business development and marketing efforts, and other envisioned
expenditures. This could reduce our ability to commercialize our technology or require us to seek further funding earlier, or on less
favorable terms, than if we had raised the full amount of an offering.
If management is unable
to implement its proposed business plan or employ alternative financing strategies, it does not presently have any alternative proposals.
In that event, investors should anticipate that their investment may be lost and there may be no ability to profit from this investment.
We cannot assure you
that our development products will be approved or accepted, that we will ever earn revenues sufficient to support our operations or that
we will ever be profitable. Furthermore, since we have no committed source of financing, we cannot assure you that we will be able to
raise money as and when we need it to continue our operations. If we cannot raise funds as and when we need them, we may be required to
severely curtail, or even to cease our operations.
Results of Operations
for the Period ended January 31, 2022, and January 31, 2021
For the three-month period
ended January 31, 2022, assets increased to $1,256,766 from $1,248,665 in the same period of 2021. Fixed assets were reduced to $530,831
from $1,060,942, but other assets increased to $735,935 from $181,917 for three-months ended January 31, 2022, and 2021, respectively.
Total liabilities for
periods increased to $1,401,091 as at January 31, 2022 from $1,138,340 as at January 31, 2021. While notes payable, including convertible
notes increased to 1,081,580 from $977,100.
As the Company has not
completed any installations, it has not generated any revenue. The Company relies on the sale of equity and loans from investors to meets
its cash needs.
Operating expenses for
the 3 months ended January 31, 2022, as compared to the same period in 2021 increased to $787,289 from $546,180. The increase was due
to an increase in travel expense and profession fees. For the nine-month period ended January 31, 2022, and January 31, 2021, operating
expenses increased to $4,234,751 from $1,002,621. The increase was due to significant increases in travel expense, legal fees, professional
fees, and payment for services in stock.
Cash used in operating
activities increased from ($3,420,176) for the nine-month period ended January 31, 2022, to ($1,420,420) for the period ended January
31, 2021. Likewise, cash provided from financing activities increased to $3,709,681 from $1,220,468 for the period ended January 31, 2022,
and 2021, respectively.
Critical Accounting
Policies and Estimates
This discussion and analysis
of our financial condition and results of operations are based on our financial statements that have been prepared under accounting principle
generally accepted in the United States of America. The preparation of financial statements in conformity with accounting principles generally
accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets
and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results could differ from those estimates.
A summary of significant
accounting policies is included in Note 2 to the consolidated financial statements included in this Registration Statement. Of these policies,
we believe that the following items are the most critical in preparing our financial statements.
Use of Estimates
Preparing financial statements
in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Actual results and outcomes may differ from
management’s estimates and assumptions.
Stock-Based Compensation
The Company accounts
for its stock-based compensation in accordance with ASC 718, Compensation — Stock Compensation, which requires the measurement and
recognition of compensation expense for all share-based payment awards made to employees and directors to be recognized in the financial
statements, based on their fair value. The Company measures share-based compensation to consultants in accordance with ASC 505-50, Equity-Based
Payments to Non-Employees, and recognizes the fair value of the award over the period the services are rendered or goods are provided.
Most Recent accounting
pronouncements
Refer to Note 1 in the
accompanying consolidated financial statements.
Impact of Most Recent
Accounting Pronouncements
There were no recent
accounting pronouncements that have had a material effect on the Company’s financial position or results of operations.