Solar Integrated Roofing Corporation - SIRC stock
History[edit]
Solar Integrated Roofing Corporation (OTC: SIRC) is a commercial and residential solar and roofing installation firm in San Marcos, California. The company was originally founded in Nevada on May 1, 2007, and was formerly known as Sterling Oil & Gas Company which served as an oil and gas development company. It then changed its name to Landstar Development Group on February 21, 2014, in connection with a shift in operations to manage and develop the company's real estate assets.[1]
The board of directors authorized a corporate name change to Solar Integrated Roofing Corp on November 9, 2015, in connection with the planned acquisition of a fully owned subsidiary, Secure Roofing and Solar, Inc., which was completed in February 2016. Since then, the company has been in the solar and roofing sales and installation business. SIRC emphasizes the acquisition of similar companies to expand its reach nationally. The company is working to establish itself as a national leader in solar energy by implementing a cost-effective and energy-efficient approach to solar and roofing needs. [1].
Acquisitions[edit]
SIRC grew very quickly with a large number of acquisitions, funding primarily with company stock.
In January 2022, SIRC declared plans to purchase seven companies, having finalized binding Letters of Intent for the acquisitions. These expected additions will contribute around $78 million in yearly revenue. The intended companies for acquisition were:
- Storm Ventures Group, a consultancy;
- Standard Eco, a solar provider operating in five states;
- Eco Management, a solar EPC provider in four states;
- BVI Solar, a roofing and solar contractor based in California;
- Bel Aire Construction and Development, a property development company;
- Music City Roofing, a Tennessee-based roofer;
- Heartland Constructors, an EPC and solar provider in west Texas.[2]
Operations[edit]
Contracts[edit]
During 2023, PLEMCo, the company's EV Charging Projects division, received contracts for:
- Wasco State Prison in Kern County, California for 10 EV Charging Stations
- Lancaster Department of Veterans Affairs for 12 new EV Charging Stations and all associated EV equipment within 2 parking lots
- California Department of Transportation 10 Altaville in Angels Camp, California awarded installation of 2 EV Charging Stations.[3]
California[edit]
In 2023, the California Public Utilities Commission introduced NEM 3, a policy that significantly diminished the economic benefits of solar energy for both residential and commercial projects. This change has made it more challenging for individuals to recoup the expenses associated with installing new solar systems, reducing the financial incentives previously available. SIRC believes it is one of the few providers that can offer roofing, solar, and battery storage capacity installations for residential projects, as well as arrange for financing for these projects up to $100,000.[3]
Tribeca Energy[edit]
SIRC signed a binding Letter of Commitment (LOC) with Tribeca Energy in May, 2023, which establishes the terms wherein SIRC agreed to sell specific shares in exchange for an investment from Tribeca Energy. As a result of this share exchange, Tribeca Energy will obtain full ownership of SIRC's shares and a majority of its board seats. Terms of the deal:
- Tribeca Energy plans to finalize a merger to be listed on the NYSE/Nasdaq by October 30, 2023. This is contingent upon the completion of all required documents and should happen within 12 months from the signing of this LOC.
- Until October 30, 2023, SIRC is restricted from collaborating with any third party in a manner that might alter the company's capital structure, unless they obtain prior written approval from Tribeca Energy.
- After finalizing the definitive agreements, Tribeca Energy will nominate the majority of the company's board members. However, if the anticipated merger does not materialize within 12 months, with a potential 6-month extension, each newly appointed director must step down.[4]
SIRC and Tribeca Energy extended their Letter of Commitment through May 2024. SIRC Management has committed to improve the accuracy of reported revenue and operating profit.[3]
Leadership[edit]
The leadership team of SIRC includes Troy Clymer as President and Chief Operating Officer, Brad Rinehart as Chief Executive Officer, and Wanda Witoslawski as Chief Financial Officer.[5]
Legal Issues[edit]
Lawsuit Against David Massey[edit]
SIRC has taken significant legal action by lodging a $1.1 billion lawsuit against ex-CEO David M. Massey. The lawsuit, filed in the United States District Court for the Southern District of California under case number 3:23-cv-02323-MMA-AHG, accuses Massey of various serious offenses, such as fraud, securities violations, and breach of fiduciary duty. [6]
Among a very long list, allegations against Mr. Massey include:
- Lying to the Board of Directors in 2020 by saying that he was not paid, which resulted in the Board giving him 5 million shares of Preferred B stock, each of which was convertible into 10 shares of common stock. Based on the share price at the time of this transaction, the dollar value was $1.5 million. Additional shares were issued later that year with a value of $750,000. He later convinced the Board to buy back 1 million shares for $2 million.[6]
- Establishing a shell company, with no legitimate purpose, to convert the Preferred B stock to cash. Mr. Massey transferred 4.5 million shares to this company in 2022 with the to intent to forgo reporting the proceeds of this transaction.[6]
- Proving $4.2 million to Arbiter Capital to fund a subsidiary of Arbiter. Oddly, in a press release, SIRC stated that Arbiter would be providing $42 in funding to the company.[7]
- Accountant discrepancies totaling over $84,000,000, financial malfeasance, failure to fulfill fiduciary duties, regulatory non-compliance, land ack of due diligence.[6]
K. Hunter Ballew, Upward Holdings Group, LLC, and RoofCon, LLC[edit]
Solar Integrated Roofing Corp. resolved its ongoing legal issues with K. Hunter Ballew, Upward Holdings Group, LLC, and RoofCon, LLC, including related counterclaims made by Mr. Ballew against the firm. As part of the settlement agreement:
- All parties involved will release any past and future claims against each other.
- SIRC will transfer the ownership of Cornerstone Construction Team, LLC back to Mr. Ballew. In return, Mr. Ballew will give back 45 million common shares to SIRC.
- The "Make Whole" clause from the original Stock Purchase Agreement will be waived.
- Mr. Ballew has agreed to pay back $1,000,000 to SIRC, supported by a promissory note and his confession of judgment. However, Mr. Ballew will keep the cash amount of $3,000,000 from the Stock Purchase Agreement.
Once the 45 million common shares are received by the company, they plan to void them, which will lead to an 8.6% decrease in the total outstanding shares.[8]
Brian Milholland and Milholland Family Trust LP[edit]
Solar Integrated Roofing Corp. reached an amended settlement agreement with Brian Milholland and Milholland Family Trust LP. As per the updated terms, SIRC will fulfill its outstanding $7.0 million obligation to Milholland by issuing a total of 40 million common stock shares, making a payment of $1.6 million in four equal segments after a substantial capital influx into SIRC, and covering expenses.[9]
Pablo Diaz Curiel[edit]
Solar Integrated Roofing Corp. has resolved its legal disputes with Pablo Diaz Curiel and addressed potential counterclaims by Mr. Diaz against the firm. The settlement terms entail:
- A comprehensive release of any past and future claims between the involved parties, stemming from the company's purchase of USA Solar Networks, LLC.
- A waiver of the "Make Whole" clause from the initial Purchase and Sale Agreement.[10]
Financial Performance and Funding[edit]
Funding[edit]
A deal with Arbiter Capital in April 2022 was hoped to address the issue of convertible debt by providing $200 million in financing.[11] However, subsequent convertible debt has occurred.
The company obtained a $25.0 million drawdown term note from an institutional investor in February, 2023. According to the agreement's conditions, the note has a principal value of $25.0 million, a 6% interest rate, and a 5% original issue discount. The note can be converted into common stock at a set price of $4.00 per share, unless there's a default event. Every drawdown will mature six months from its date of issue.[12]
In August, 2023, the company collaborated with its investor RB Capital to boost its current line of credit (LOC) by $1 million, resulting in a total LOC amount of $3 million. This funding was part of the company's reorganization plan which included investing in high-growth profitable business operations. It is worth mentioning that the LOC does not involve convertible debt, and there is no exchange of SIRC stock for the funds received.[13]
Financial Performance[edit]
Financial performance for Solar Integrated Roofing Corporation:[14]
| Year Ending | Total Revenue | Net Income | Earnings per Share | Total Liabilities | Cash Balance |
| 12/31/2022 | $158,066,000 | $3,466,000 | $0.01 | $55,341,000 | $422,000 |
| 12/31/2021 | $84,182,000 | $14,060,000 | $0.04 | $55,876,000 | $1,124,000 |
| 12/31/2020 | $16,992,000 | ($5,961,000) | ($0.03) | $21,751,000 | $10,245,000 |
| 12/31/2019 | $17,253,000 | ($7,739,000) | ($0.05) | $11,538,000 | $710,000 |
- ↑ 1.0 1.1 Securities and Exchange Commission. Solar Integrated Roofing Corp. Form 10. March 11, 2021.
- ↑ OTC Wiki. Solar Integrated Roofing - Growth Powered by Acquisition. May 3, 2022.
- ↑ 3.0 3.1 3.2 GlobeNewsire. Solar Integrated Roofing Corp. Provides Corporate and Operational Update. 12/1/2023.
- ↑ GlobeNewswire. Solar Integrated Roofing Corp. Executes Binding Letter of Commitment with Tribeca Energy. May 25, 2023.
- ↑ solarintegratedroofing.com. Corporate Governance - Leadership. Retrieved on 8/25/2023.
- ↑ 6.0 6.1 6.2 6.3 ostendorflaw.com. Solar Integrated Roofing Corp. (SIRC) v. Massey. December 21, 2023. Archive link.
- ↑ investorideas.com. Solar Stock News - Solar Integrated Roofing (OTC: $SIRC) Announces $42.0 Million Equity Purchase Agreement with Arbiter Capital. November 3, 2021.
- ↑ Accesswire. Solar Integrated Roofing Corp. Announces Amicable Settlement of Legal Action Against K. Hunter Ballew and Cancellation of 45 Million Common Shares. June 14, 2022.
- ↑ GlobeNewswire. Solar Integrated Roofing Corp. Announces Amendment of Settlement Agreement with Brian Milholland and Milholland Family Trust LP. January 18, 2023.
- ↑ GlobeNewswire. Solar Integrated Roofing Corp. Announces Amicable Settlement of Legal Action Against Pablo Diaz Curiel. December 29, 2022.
- ↑ Reddit - SIRC Q&A April 21, 2022 - Summary ---> Arbiter funds Imminent - Plan B Outlined
- ↑ GlobeNewswire. Solar Integrated Roofing Corp. Secures $25.0 Million Term Note to Finance Growth. February 1, 2023.
- ↑ energyportal.eu. Solar Integrated Roofing Corp Provides Update on Reorganization and Debt Restructuring. August 3, 2023.
- ↑ OTC Markets. SIRC Stock Financials. Retrieved on 8/25/2023.
OTC Symbol: SIRC | OTC Tier: Pink Current
