UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DCD.C. 20549

FORM 10-Q

(Mark one)

For the quarterly period ended:September 30, 2017

Orended March 31, 2023 OR

For the transition period from:             toCommission File No. 000-55825

Commission File Number:0-30746

FRONTIER OILFIELD SERVICES, INC.

(Exact name of registrant as specified in its charter)

(972) 243-2610(855)-264-4060

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant: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. Yes ☒ YesNo ☐  No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”filer,” “smaller reporting company,” and “smaller reporting“emerging growth company” in Rule 12b-2 of the Exchange Act.

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 ☐ YesNo ☒   No

AsAPPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of October 26, 2017, there were 13,868,788 shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. The number of shares of Common Stock, par value $0.01$0.0001 per share, outstanding.

outstanding as of May 15, 2023 was 35,350,571.

FRONTIER OILFIELD SERVICES, INC.

Index

Securities registered pursuant to Section 12(b) of the Act:

CORRELATE INFRASTRUCTURE PARTNERS INC.

Index

PART 1 — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

FRONTIER OILFIELD SERVICES,CORRELATE INFRASTRUCTURE PARTNERS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)MARCH 31, 2023 AND DECEMBER 31, 2022

(Unaudited)

The accompanying notes are an integral part of these condensed consolidated financial statements.

FRONTIER OILFIELD SERVICES, INC. AND SUBSIDIARIES

CORRELATE INFRASTRUCTURE PARTNERS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022

(Unaudited)

The accompanying notes are an integral part of these condensed consolidated financial statements.

FRONTIER OILFIELD SERVICES, INC. AND SUBSIDIARIES

CORRELATE INFRASTRUCTURE PARTNERS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSCHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

(UNAUDITED)FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022

(Unaudited)

The accompanying notes are an integral part of these condensed consolidated financial statements.

FRONTIER OILFIELD SERVICES,

CORRELATE INFRASTRUCTURE PARTNERS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND SUBSIDIARIES2022

(Unaudited)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2017

(UNAUDITED)

Frontier Oilfield Services, Inc. (“the Company”) has prepared the consolidated financial statements included herein, without audit, pursuant to the rules and regulationsNature of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been omitted. However, in the opinion of management, all adjustments (which include only normal recurring adjustments, unless otherwise indicated) necessary to present fairly the financial position and results of operations for the periods presented have been made. The results for interim periods are not necessarily indicative of trends or of results to be expected for the full year. These financial statements should be read in conjunction with the financial statements of the Company for the year ended December 31, 2016 (including the notes thereto) set forth in Form 10-K.Business

Frontier Oilfield Services, Inc. a Texas corporation (and collectively with its subsidiaries, “we”, “our”, “Frontier”, “FOSI”, or the “Company”), was organized on March 24, 1995. The accompanying condensed consolidated financial statements include the accounts of the Company, and Frontier Acquisition I, Inc., and its subsidiary Chico Coffman Tank Trucks, Inc. (CTT) and its subsidiary Coffman Disposal, LLC, and Frontier Income and Growth, LLC (FIG) and its subsidiaries Trinity Disposal & Trucking,Correlate, Inc. (“Correlate”), a Delaware corporation, and Loyal Enterprises LLC and Trinity Disposal Wells, LLC.dba Solar Site Design (“Loyal”), a Tennessee limited liability company.

Frontier operates its businessCorrelate is a portfolio-scale development and finance platform offering commercial and industrial facilities access to clean electrification solutions focused on locally-sited solar, energy storage, EV infrastructure, and intelligent efficiency measures. Its unique data-driven approach is powered by proprietary analytics and concierge subscription services.

Loyal provided consulting services on acquisitions and project development tools to customers in the oilfield service industrycommercial solar industry. Effective November 2022, all of Loyal’s assets and is primarily involved in the disposal of saltwateroperations were transferred to Correlate and other oilfield fluids in Texas. The Company currently owns and operates nine disposal wells in Texas, six within the Barnett Shale in North Texas and three in east Texas near the Louisiana state line. The Company’s customers include national, integrated, and independent oil and gas exploration companies.Loyal was dissolved.

Going Concern

The Company’saccompanying condensed consolidated financial statements arehave been prepared using U.S. generally accepted accounting principles (“U.S. GAAP”) applicable toassuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and liquidationsatisfaction of liabilities in the normal course of business. As of the date of the financial statements, theThe Company has incurred losses since inception and has not generated lossespositive cash flows from operations, has an accumulated deficit and working capital deficiency.operations. These factorsmatters, among others, raise substantial doubt regardingabout the Company’sCompany's ability to continue as a going concern.

To continue as a going concern and achieve a profitable level of operations, the Company will need, among other things, to increase its business volume and grow revenues, reduce its operating expenses, raise additional capital resources and develop new and stable sources of revenue sufficient to meet its operating expenses.

The Company’s ability to continue as a going concern will bein existence is dependent upon management’son its ability to successfully implement management’sdevelop additional sources of capital, and/or achieve profitable operations and positive cash flows. Management’s plans with respect to pursueoperations include aggressive marketing, acquisitions, and raising additional business volumes from new and existing customers, reduce indebtednesscapital through sales of non-performing assetsequity or debt securities as may be necessary to pursue its business plans and conversions of debt to equity,sustain operations until such time as the Company can achieve profitability. Management believes that aggressive marketing combined with acquisitions and rationalize the Company’s cost structure to achieveadditional financing as necessary will result in improved operations and cash flow in 2023 and beyond. However, there can be no assurance that management will be successful in obtaining additional funding or in attaining profitable operations. The accompanying condensed consolidated financial statements do not include any adjustments that might be necessary ifresult from the outcome of this uncertainty.

The accompanying condensed consolidated financial statements of the Company is unable to continue as a going concern. The Company’s continued existence will ultimately be dependent on its ability to generate sufficient cash flows to support its operations as well as provide sufficient resources to retire existing liabilities on a timely basis. The Company faces significant riskhave been prepared in implementing its business planaccordance with generally accepted accounting principles in the United States of America (“GAAP”) and there can be no assurance that financing for its operations and business plan will be available or, if available, such financing will be on satisfactory terms.

In May 2014, the FASB issued ASU 2014-09,Revenue from Contracts with Customers, which provides guidance on a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The effective date for this ASU, which was deferred by ASU 2015-14 issued in August 2015, is for fiscal years beginning after December 15, 2017. In March 2016, the FASB also issued ASU 2016-08, an amendment to the guidance in ASU 2014-09 which revises the structureinterim reporting rules of the indicators to provide indicatorsSecurities and Exchange Commission (“SEC”) and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s latest Annual Report filed with the SEC on Form 10-K. In the opinion of when the entity is the principal or agent inmanagement, all adjustments, consisting of normal recurring adjustments (unless otherwise indicated), necessary for a revenue transaction, and eliminated twofair presentation of the indicators (“the entity’s consideration is in the form of a commission”financial position and “the entity is not exposed to credit risk”) in making that determination. This amendment also clarifies that each indicator may be more or less relevant to the assessment depending on the terms and conditions of the contract. In April 2016, the FASB also issued ASU 2016-10, which clarifies the implementation guidance on identifying promised goods or services and on determining whether an entity’s promise to grant a license with either a right to use the entity’s intellectual property (which is satisfied at a point in time) or a right to access the entity’s intellectual property (which is satisfied over time). The amendments, collectively, should be applied retrospectively to each prior reporting period presented or as a cumulative effect adjustment as of the date of adoption. Early adoption of the guidance is not permitted. The Company is currently evaluating the impact of adopting ASU 2014-09 and the related updates to it on its financial position, results of operations and disclosures.for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.

In January 2016, the FASB issued ASU 2016-01,Recognition and MeasurementPrinciples of Financial Assets and Financial Liabilities, which provides guidance for the recognition, measurement, presentation, and disclosure of financial assets and liabilities. The guidance will be effective for the fiscal year beginning after December 15, 2017, including interim periods within that year. The Company is in the process of evaluating the impacts of the adoption of this ASU.Consolidation

In February 2016, the FASB issued ASU 2016-02,Leases,which will, among other impacts, change the criteria under which leases are identified and accounted for as on- or off-balance sheet. The guidance will be effective for the fiscal year beginning after December 15, 2018, including interim periods within that year. Once effective, the new guidance must be applied for all periods presented. The Company is in the process of evaluating the impacts of the adoption of this ASU.

In March 2016, the FASB issued ASU 2016-09,Improvements to Employee Share-Based Payment Accounting, which is intended to simplify several aspects of the accounting for share-based payment award transactions. The guidance will be effective for the fiscal year beginning after December 15, 2016, including interim periods within that year. The Company is in the process of evaluating the impacts of the adoption of this ASU.

Principles of Consolidation

Thecondensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant inter-company transactions and balances have been eliminated in consolidation.

Fair ValueUse of Financial Instruments

In accordance with the reporting requirements of ASC Topic 825,Financial Instruments, the Company calculates the fair value of its assets and liabilities, which qualify as financial instruments under this standard, and includes this additional information in the notes to the financial statements when the fair value is different from the carrying value of those financial instruments. The Company does not have any assets or liabilities measured at fair value on a recurring basis Consequently, the Company did not have any fair value adjustments for assets and liabilities measured at fair value at the balance sheet dates, nor gains or losses reported in the statements of operations that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held during the nine months ended September 30, 2017 and 2016, except as disclosed.

Earnings (Loss) Per Share (EPS)

Basic earnings per common share are calculated by dividing net income or loss by the weighted average number of shares outstanding during the period. Diluted earnings per common share is calculated by adjusting outstanding shares, assuming conversion of all potentially dilutive stock options and warrants. The computation of diluted EPS does not assume conversion, exercise, or contingent issuance of shares that would have an anti-dilutive effect on earnings per common share. Anti-dilution results from an increase in earnings per share or reduction in loss per share from the inclusion of potentially dilutive shares in EPS calculations. Currently there are no stock options in 2017 excluded from EPS that could potentially have a dilutive effect on EPS in the future.

The Board of Directors of the Company elected to suspend all stock based compensation in 2015 as part of the Company’s cost cutting and restructuring measures.

In April 2016, the Board of Directors of the Company approved the issuance of an aggregate of 54,000 shares of common stock to the members of the Board of Directors. The three members of the Board of Directors received 18,000 shares each.

Borrowings as of September 30, 2017 and December 31, 2016 were as follows:

A summary of significant accounting policies is included in Note 3 to the audited consolidated financial statements included on Form 10-K for the year ended December 31, 2016 as filed with the United States Securities and Exchange Commission. Management believes that the application of these policies on a consistent basis enables the Company to provide useful and reliable financial information about our operating results and financial condition.Estimates

The preparation of financial statements in conformity with US Generally Accepted Accounting PrinciplesGAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results maycould differ from those estimates.

RESULTS OF OPERATIONS

CORRELATE INFRASTRUCTURE PARTNERS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the nine months ended September 30, 2017, we reported a net loss of $1,165,513 as compared to a net loss of $1,380,302 for the nine months ended September 30, 2016. The components of these results are explained below.

Revenue - Total revenue decreased by $118,443 or 11.7% from $1,004,162 for the nine months ended September 30, 2016 to $885,719 for the nine months ended September 30, 2017. The decrease was due to the termination of the provisioning of transportation services in late 2016Cash and lower total volumes disposed in the disposal business.

Expenses -The components of our costs and expenses for the nine months ended September 30, 2017 and 2016 are as follows:

The decrease in the volumes of saltwater and other fluids transported and disposed of necessitated a decrease in operating expenses for the nine months ended September 30, 2017. The decrease in operating costs is due to lower volumes disposed. This resulted in the reduction of the number of employees and the related salaries, wages and benefits as well as the elimination of costs for repairs and maintenance for the disposal wells.Cash Equivalents

The decrease in generalCompany considers all highly liquid debt instruments and administrative costs for the nineother short-term investments with maturity of three months ended September 30, 2017, is the result of an overall reduction of administrative costs, especially legal fees, insurance costs and utilities resulting from lower disposal volumes.

Interest Expenses - Interest expense for the nine months ended September 30, 2017 was $723,578. Interest expense was $842,658 for the nine months ended September 30, 2016.

Operating results for the nine months ended September 30, 2017 and 2016 reflect a net loss of $1,165,513 and $1,380,302 respectively. We have not recorded any federal income taxes for the nine months ended September 30 2017 and 2016 because of our accumulated losses and our substantial net operating loss carry forwards.

LIQUIDITY AND CAPITAL RESOURCES

Cash Flows and Liquidity

As of September 30, 2017, we had total current assets of approximately $117,000. Our total current liabilitiesor less, when purchased, to be cash equivalents. There were no cash equivalents as of September 30, 2017 were $11.1 million, including $7.9 million of debt classified as current liabilities. We had a working capital deficit of $11.0 million and $12.1 million as of September 30, 2017March 31, 2023 and December 31, 2016, respectively.2022.

The Company maintains its cash balances at financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”). The FDIC provides coverage of up to $250,000 per depositor, per financial institution, for the aggregate total of depositors’ interest and non-interest-bearing accounts. At March 31, 2023, approximately $280,000 of the Company’s cash balances were in excess of FDIC limits. The Company has not experienced any losses on these accounts and management does not believe that the Company is exposed to any significant risks.

Accounts Receivable

Accounts receivable consists of invoiced and unpaid sales. The Company records an allowance for doubtful accounts to allow for any amounts that may not be recoverable, which is based on an analysis of the Company’s prior collection experience, customer credit worthiness, and current economic trends. Accounts are considered delinquent when payments have not been received within the agreed upon terms and are written off when management determines that collection is not probable. As of March 31, 2023 and December 31, 2022, the Company’s allowance for doubtful accounts was $90,189.

Intangible Assets

Intangible assets are amortized over their estimated useful lives. Each period, the Company evaluates the estimated remaining useful life of its intangible assets and whether events or changes in circumstances warrant a revision to the remaining period of amortization. Management tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets.

Impairment Assessment

The Company evaluates intangible assets and other long-lived assets for possible impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. This includes but is focused on working closely with our current lendersnot limited to fund operations through currentsignificant adverse changes in business climate, market conditions or other events that indicate an asset's carrying amount may not be recoverable. Recoverability of these assets is measured by comparing the carrying amount of each asset to the future cash flows the asset is expected to generate. If the cash flows used in the test for recoverability are less than the carrying amount of these assets, the carrying amount of such assets is reduced to fair value.

The Company evaluates and pay interest coststests the recoverability of its goodwill for impairment at least annually during its fourth quarter of each fiscal year or more often if and when excesscircumstances indicate that goodwill may not be recoverable.

Revenue Recognition

The Company accounts for revenue in accordance with FASB ASC 606, Revenue from Contracts with Customers.

A performance obligation is a promise in a contract to transfer a distinct good or service to the client and is the unit of accounting in ASC 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation based on the relative standalone selling price. Determining relative standalone selling price and identifying separate performance obligations requires judgment. Contract modifications may occur in the performance of the Company’s contracts. Contracts may be modified to account for changes in the contract specifications, requirements or duration. If a contract modification results in the addition of performance obligations priced at a standalone selling price or if the post-modification services are distinct from the services provided prior to the modification, the modification is accounted for separately. If the modified services are not distinct, they are accounted for as part of the existing contract.

The Company’s revenues are derived from contracts for engineering, procurement and construction services (“EPC”) and consulting. These contracts may have different terms based on the scope, performance obligations and complexity of the engagement, which may require us to make judgments and estimates in recognizing revenues.

CORRELATE INFRASTRUCTURE PARTNERS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company’s performance obligations are satisfied as work progresses or at a point in time (for defined milestones). The selection of the method to measure progress towards completion requires judgment and is based on the contract and the nature of the services to be provided.

The Company’s contracts for consulting services are typically less than a year in duration and require us to a) assist the client in achieving certain defined milestones for milestone fees or b) provide a series of distinct services each period over the contract term for a pre-determined fee for each period. When contractual billings represent an amount that corresponds directly with the value provided to the client, revenues are recognized as amounts become billable in accordance with contract terms.

The Company’s contracts for EPC services are typically less than a year in duration and require us to a) provide engineering services, b) obtain materials, and c) install materials to agreed-upon specifications. The Company recognizes revenues for engineering services as the services are provided. Revenues for materials are recognized as materials are transferred to the client. Installation results in enhancements to customer-controlled assets and therefore installation revenues are recognized over time utilizing the input method wherein revenues are recognized on the basis of efforts or inputs to the satisfaction of the performance obligation.

Financial Instruments

The Company’s financial instruments include cash becomes available. Management plans to work with our current lendersand cash equivalents, receivables, payables, and debt holdersand are accounted for under the provisions of ASC Topic 825, “Financial Instruments”. The carrying amount of these financial instruments, with the exception of discounted debt, as reflected in the accompanying condensed consolidated balance sheets approximates fair value.

Fair Value Measurement

ASC Topic 820, “Fair Value Measurement”, requires that certain financial instruments be recognized at their fair values at our condensed consolidated balance sheet dates. However, other financial instruments, such as debt obligations, are not required to lowerbe recognized at their fair values, but GAAP provides an option to elect fair value accounting for these instruments. GAAP requires the disclosure of the fair values of all financial instruments, regardless of whether they are recognized at their fair values or carrying amounts in our costcondensed consolidated balance sheets. For financial instruments recognized at fair value, GAAP requires the disclosure of borrowingtheir fair values by renegotiatingtype of instrument, along with other information, including changes in the termsfair values of our existingcertain financial instruments recognized in income or other comprehensive income. For financial instruments not recognized at fair value, the disclosure of their fair values is provided below under “Financial Instruments.”

Nonfinancial assets, such as property, plant and equipment, and nonfinancial liabilities are recognized at their carrying amounts in the Company’s condensed consolidated balance sheets. GAAP does not permit nonfinancial assets and liabilities to be remeasured at their fair values. However, GAAP requires the remeasurement of such assets and liabilities to their fair values upon the occurrence of certain events, such as the impairment of property, plant and equipment. In addition, if such an event occurs, GAAP requires the disclosure of the fair value of the asset or liability along with other information, including the gain or loss recognized in income in the period the remeasurement occurred.

Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities;

Level 2 – Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; or

Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

The Company did not have any Level 1 or Level 2 assets and liabilities at March 31, 2023 or December 31, 2022. The Derivative liabilities are Level 3 fair value measurements.

CORRELATE INFRASTRUCTURE PARTNERS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following is a summary of activity of Level 3 liabilities during the three months ended March 31, 2023:

Under the Company’s contract ordering policy, the Company first considers common shares issued and outstanding as well as reserved but unissued equity awards, such as under an equity award program. All remaining equity linked instruments such as, but not limited to, options, warrants, and debt and potentially offering debt holdersequity with conversion features are evaluated based on the date of issuance. If the number of shares which may be issued under the Company’s agreements exceed the authorized number of shares or are unable to be determined, equity linked instruments from that date forward are considered to be derivative liabilities until such time as the number of shares which may be issued under the Company’s agreements no longer exceed the authorized number of shares and are able to be determined.

On November 7, 2022 and December 21, 2022, the Company issued note payable agreements which contain default provisions that contain a conversion feature meeting the definition of a derivative liability which therefore require bifurcation. Further, pursuant to the Company’s contract ordering policy, the warrant and convertible note issuances subsequent to November 7, 2022, resulted in derivative liabilities.

At December 31, 2022, the Company estimated the fair value of the conversion feature derivatives embedded in the notes payable and warrants based on assumptions used in the Cox-Ross-Rubinstein binomial pricing model using the following inputs: the price of the Company’s common stock of $1.06; risk-free interest rates ranging from 4.41% to 4.73%; expected volatility of the Company’s common stock ranging from 164% to 379%; exercise prices of $1.00; and terms from one to two years.

At March 31, 2023, the Company estimated the fair value of the conversion feature derivatives embedded in the notes payable, convertible notes payable and warrants based on assumptions used in the Cox-Ross-Rubinstein binomial pricing model using the following inputs: the price of the Company’s common stock of $0.70; risk-free interest rates ranging from 3.60% to 4.94%; expected volatility of the Company’s common stock ranging from 97% to 305%; exercise prices ranging from $0.46 to $3.20; and terms ranging from six months to five years.

Commitments and Contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties and other sources are recorded when management assesses that it is probable that a liability has been incurred and the amount can be reasonably estimated.

Income Taxes

In accordance with FASB ASC Topic 740, "Income Taxes," the Company provides for the recognition of deferred tax assets if realization of such assets is more likely than not. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax basis of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities.

In addition, the Company’s management performs an opportunityevaluation of all uncertain income tax positions taken or expected to exchange their debtbe taken in the course of preparing the Company’s income tax returns to determine whether the income tax positions meet a “more likely than not” standard of being sustained under examination by the applicable taxing authorities. This evaluation is required to be performed for equityall open tax years, as defined by the various statutes of limitations, for federal and state purposes. If the Company has interest or penalties associated with insufficient taxes paid, such expenses are reported in income tax expense.

Basic and Diluted Loss Per Share

FASB ASC Topic 260, “Earnings Per Share”, requires a reconciliation of the numerator and denominator of the basic and diluted earnings (loss) per share (“EPS”) computations.

Basic earnings (loss) per share are computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive.

CORRELATE INFRASTRUCTURE PARTNERS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company had potential additional dilutive securities outstanding at March 31, 2023 and 2022, as follows.

Recently Issued Accounting Standards

During the period ended March 31, 2023, there were several new accounting pronouncements issued by the FASB. Each of these pronouncements, as applicable, has been or will be adopted by the Company. Management does not believe the adoption of any of these accounting pronouncements has had or will seek additional financinghave a material impact on the Company’s condensed consolidated financial statements.

From time to time, the Company may be involved in those instanceslitigation in which we believe such additional financings will assistthe ordinary course of business. The Company is not currently involved in accomplishing our goals. There can be no assuranceany litigation that management’s plan will succeed.the Company believes could have a material adverse effect on its financial condition or results of operations.

Convertible Notes Payable

On JuneFrom January 24, 2023 to March 30, 2017, an affiliate2023, the Company entered into eight 14% convertible note payable agreements with proceeds totaling $1,804,950. The convertible notes, which have identical terms, require quarterly interest payments with the principal due at maturity eighteen months from issuances and are convertible at $3.20 per share of an accredited investor who is alsocommon stock. The conversion features were valued at $358,176 and recorded as a principal stockholder agreedderivative liability pursuant to exchange approximately $2.0 million in accounts payable and accrued liabilities for 2,013,546the Company’s contract ordering policy. In connection with the convertible notes, the Company issued a total of 3,609,900 warrants to purchase shares of common stock exercisable at $0.85 per share. The warrants, which were immediately vested, were valued at $3,505,723 and recorded as a derivative liability pursuant to the Company’s contract ordering policy. As a result of the Company. The Board approvedderivative liabilities, the exchange and issuance of the shares on June 30, 2017. The liabilities exchanged for common stock included the affiliates full interestCompany recorded additional debt discounts totaling $3,505,723.

Included in the accruedeight convertible notes payable is a 14% convertible note payable agreement with proceeds totaling $100,000 with the Company’s CEO issued on January 24, 2023. The convertible note requires quarterly interest payablepayments with the principal due at maturity eighteen months from issuance and is convertible at $3.20 per share of common stock. The conversion feature was valued at $22,569 and recorded as a derivative liability pursuant to the stockholder associatedCompany’s contract ordering policy. In connection with the Term Loan Agreement andconvertible note, the Senior Loan Facility. The 2,013,546Company issued 200,000 warrants to purchase shares of common stock exercisable at $0.85 per share. The warrants, which were immediately vested, were valued at $209,180 and recorded as a derivative liability pursuant to the Company’s contract ordering policy. As a result of the derivative liabilities, the Company recorded a debt discount totaling $100,000.

The following table presents a summary of the Company’s convertible notes payable at March 31, 2023:

CORRELATE INFRASTRUCTURE PARTNERS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Notes Payable

On May 29, 2020, Loyal received a $20,400 Economic Injury Disaster Loan through the Small Business Administration. The note bears interest at 3.75% until maturity in March 2050. The note requires $100 monthly payments beginning in May 2022 until maturity.

On January 11, 2022, the Company entered into a 10% note agreement with P&C Ventures, Inc. totaling $1,485,000, including an original issuance discount of $135,000. The note requires quarterly interest payments with the principal due at maturity on January 11, 2023.

On January 11, 2023, the Company and P&C Ventures, Inc. agreed to amend the January 11, 2022, note payable. The Company accounted for the amendment as an extinguishment of existing debt and issuance of new debt pursuant to ASC 470-50-40. As part of the agreement, $78,929 in accrued and unpaid interest was added to the principal balance, bringing the total principal balance of the note payable to $1,563,929. Additionally, the interest rate and maturity date were amended to 14% and October 11, 2023, respectively. In connection with the amendment, the Company issued P&C Ventures, Inc. 3,127,858 warrants to purchase shares of common stock exercisable at $0.85 per share. The warrants, which were immediately vested, were valued at $3,309,045 and recorded as a derivative liability pursuant to the Company’s contract ordering policy and resulted in additional debt discounts totaling $1,563,929.

The following table presents a summary of the Company’s notes payable at March 31, 2023: