Correlate Energy Corp (CIPI)

[Timothy Smith]

PLAN OF OPERATION FOR THE FUTURE

We have funded operations from cash generated from the sale of preferred stock, revenue from oil and gas sales, partial recovery of a previous loss and loans/advances from affiliates. We expect that the principal source of funds in the near future will be from the sale of preferred stock, oil and gas revenues and advances from an affiliate. Management’s plan is to seek additional equity and/or debt financing. Any such additional funding will be done on an “as needed” basis and will only be done in those instances in which we believe such additional expenditures will increase our profitability. However, actual results may differ from management’s plan and the amount may be material.

In the past we have primarily acquired producing oil and gas properties with opportunities for future development and contracted well operations to contractors. Currently, our primary focus is to secure additional capital through business alliances with third parties or other debt/equity financing arrangements to acquire oil field service companies and/or assets.

Our ability to secure additional capital through business alliances with third parties or other debt/equity financing arrangements to acquire companies and/or assets which will allow the Company to further operate in the oil field services industry is strictly contingent upon our ability to locate adequate financing or equity to pay for these additional companies and/or assets. There can be no assurance that we will be able to obtain the opportunity to buy companies and/or assets that are suitable for our investment or that we may be able to obtain financing or equity to pay for the costs of these additional companies and/or assets at terms that are acceptable to us. Additionally, if economic conditions justify the same, we may hire additional employees although we do not currently have any definite plans to make additional hires.

The oil and gas industry is subject to various trends including the availability of capital for drilling new wells, prices received for crude oil and natural gas, sources of crude oil outside our area of operations, interest rates, and the overall health of the economy. We are not aware of any specific trends that are unusual to our company, as compared to the rest of the oil and gas industry.

Effective June 4, 2012, LoneStar completed the purchase of $5,000,000 of the preferred stock of Registrant and in accordance with its agreement with LoneStar used the proceeds to acquire a 51% interest in Frontier Income and Growth, LLC.

On June 29, 2012 Registrant by and through a wholly owned subsidiary, Frontier Acquisition I, Inc., executed a Stock Purchase Agreement whereby, upon closing, it will acquire all of the issued and outstanding stock of Chico Coffman Tank Trucks, Inc. (“Coffman”) inclusive of its wholly owned subsidiary, Coffman Disposal, LLC for the sum of $17,408,348 subject to certain negative and positive adjustments based upon the amount, at the time of closing, of Coffman’s indebtedness, seller’s expenses and EBITDA adjustments.

Coffman is a salt water disposal company with its primary base of operations located in Chico, Texas with its trade and service area being in the Barnett Shale oil field located in north central Texas. Coffman had audited 2011 revenues of $40.5 million with an EBITDA of $3,263,929. Coffman’s assets are currently valued on its unaudited financials at $24 million and consist of accounts receivable, rolling stock (trucks and trailers), six permitted disposal wells and the headquarters real property. Coffman has short and long term liabilities of approximately $17.6 million.
Upon closing Mr. JD Coffman will remain as President of Coffman Tank Trucks, Inc. and will report directly to Tim Burroughs, President and CEO of Frontier.