UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934 For the quarterly period ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934 For the transition period from ___________to ____________ | Delaware | 46-2612944 | | --- | --- | | (State or other jurisdiction of | (I.R.S. Employer | | incorporation or organization) | Identification No.) | | 4016 R ...

PART I [Business](index=5&type=section&id=Item%201.%20Business) Greenwave Technology Solutions, Inc. transitioned to a scrap metal recycling operator, managing 14 facilities and integrating technology for efficiency - The company changed its name to Greenwave Technology Solutions, Inc. in October 2021 and fully transitioned into the scrap metal industry by acquiring Empire Services, Inc., which operates **14 metal recycling facilities**[20](index=20&type=chunk) - The core business involves collecting, processing (crushing, shearing, shredding), and sorting ferrous and nonferrous metals from various sources, including end-of-life vehicles and industrial materials[21](index=21&type=chunk) - A key strategic goal is to open a facility with rail or deep-water port access to improve logistics and expand the customer base to domestic steel mills and overseas foundries[24](index=24&type=chunk) - The company has implemented technology to enhance operations, including a cloud-based ERP system (WeighPay) for real-time tracking and a junk car buying platform to increase scrap vehicle acquisition[38](index=38&type=chunk)[39](index=39&type=chunk) - Recent developments include listing on the Nasdaq in July 2022, opening a new facility in Fairmont, NC in November 2022, and planning another in Cleveland, OH for April 2023[45](index=45&type=chunk)[46](index=46&type=chunk)[48](index=48&type=chunk) [Risk Factors](index=9&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from industry cyclicality, commodity price volatility, customer concentration, and internal control weaknesses - The business is cyclical and highly sensitive to general economic conditions, global market changes (including tariffs and sanctions), and fluctuations in scrap metal prices, which can adversely affect operating results[67](index=67&type=chunk)[69](index=69&type=chunk)[74](index=74&type=chunk) Customer Concentration Risk (FY 2022 & 2021) | Year | Number of Major Customers | Percentage of Revenue | | :--- | :--- | :--- | | 2022 | Three | 53%, 16%, and 13% respectively | | 2021 | One | 83% | - The company's independent registered accounting firm has expressed concerns about its ability to continue as a going concern, citing historical losses and the potential need for additional financing[93](index=93&type=chunk) - Management identified material weaknesses in internal controls over financial reporting as of December 31, 2022, specifically a lack of sufficient segregation of duties[95](index=95&type=chunk)[96](index=96&type=chunk) - The company is highly dependent on its CEO, Danny Meeks. The loss of his services could materially harm the business[90](index=90&type=chunk)[91](index=91&type=chunk) - As of March 29, 2023, company management beneficially owns approximately **39.35%** of the outstanding common stock, giving them significant control over stockholder matters[118](index=118&type=chunk) [Unresolved Staff Comments](index=22&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - None[135](index=135&type=chunk) [Properties](index=22&type=section&id=Item%202.%20Properties) The company primarily leases its scrap yard facilities from a CEO-owned entity, with some properties owned outright - A significant portion of the company's scrap yards are leased from DWM Properties, LLC, which is owned by the company's Chairman and CEO[136](index=136&type=chunk)[137](index=137&type=chunk)[138](index=138&type=chunk) - Most of the related-party leases for scrap yards expire on January 1, 2024, but include two five-year extension options at the company's election[136](index=136&type=chunk)[141](index=141&type=chunk)[145](index=145&type=chunk) - The company owns the property for its scrap yard in Portsmouth, VA, as well as several other properties in Suffolk and Portsmouth, VA[148](index=148&type=chunk) [Legal Proceedings](index=23&type=section&id=Item%203.%20Legal%20Proceedings) The company resolved a legal dispute with former securities counsel, settling an arbitration award through a payment plan - Former securities counsel, Sheppard Mullin, filed for arbitration for unpaid legal fees of **$487,391** and was awarded **$459,251**[150](index=150&type=chunk) - The company entered into a Resolution Agreement in September 2021 to pay the judgment via an initial payment and subsequent monthly installments through February 2023, with all required payments made[151](index=151&type=chunk) [Mine Safety Disclosures](index=23&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - Not applicable[154](index=154&type=chunk) PART II [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=24&type=section&id=Item%205.%20Market%20for%20Registrant%E2%80%99s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock uplisted to Nasdaq in July 2022, has 131 stockholders, and does not anticipate paying dividends - The company's common stock began trading on the Nasdaq Capital Market under the symbol "**GWAV**" on July 22, 2022[157](index=157&type=chunk) Common Stock Price Range (High/Low) | Period | High ($) | Low ($) | | :--- | :--- | :--- | | **2023 Q1** | 1.54 | 0.78 | | **2022** | | | | Q1 | 14.40 | 3.20 | | Q2 | 8.25 | 3.92 | | Q3 | 8.05 | 1.59 | | Q4 | 1.80 | 0.78 | | **2021** | | | | Q1 | 17.10 | 1.83 | | Q2 | 26.37 | 5.25 | | Q3 | 17.49 | 8.40 | | Q4 | 19.20 | 11.40 | - As of March 29, 2023, there were **131 stockholders of record**[159](index=159&type=chunk) - The company has never declared or paid dividends and does not plan to in the foreseeable future[160](index=160&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In FY2022, revenues surged to $34.0 million due to an acquisition, but a net loss of $(63.9) million resulted from increased operating and interest expenses, straining liquidity [Results of Operations](index=26&type=section&id=Results%20of%20Operations) In fiscal year 2022, revenues increased significantly to $34.0 million, but a substantial rise in operating and other expenses led to a net loss of $(63.9) million Comparison of Operations (2022 vs. 2021) | Metric | 2022 | 2021 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Revenues** | $33,978,425 | $8,098,036 | $25,880,389 | 319.59% | | **Gross Profit** | $12,440,853 | $2,859,554 | $9,581,299 | 335.06% | | **Loss from Operations** | $(10,882,922) | $(2,927,564) | $(7,955,358) | 271.74% | | **Other Income (Expense)** | $(24,160,368) | $1,295,143 | $(25,455,511) | (1,965.46)% | | **Net (Loss) Income to Common Stockholders** | $(63,859,328) | $2,776,027 | $(66,635,355) | (2,400.39)% | - The significant increase in revenue was primarily due to the full-year impact of the Empire acquisition, which closed on October 1, 2021[173](index=173&type=chunk) - Operating expenses increased by **$17.5 million**, driven by higher payroll (**$5.4 million** increase), rent (**$2.9 million** increase), hauling costs (**$2.9 million** increase), depreciation & amortization (**$3.2 million** increase), and a goodwill impairment of **$2.5 million**[176](index=176&type=chunk) - Other expenses increased significantly, mainly due to a rise in interest expense to **$34.1 million** in 2022 from **$10.6 million** in 2021, and a new warrant expense of **$7.4 million**[179](index=179&type=chunk) [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) As of December 31, 2022, the company had $0.8 million in cash, relying on financing activities like factoring advances and non-convertible notes to fund operations Summary of Cash Flows (2022 vs. 2021) | Cash Flow Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | $(2,609,173) | $(2,487,213) | | Net Cash Used in Investing Activities | $(5,936,027) | $(77,666) | | Net Cash Provided by Financing Activities | $6,408,711 | $5,521,687 | - The company's cash position decreased to **$821,804** as of December 31, 2022[185](index=185&type=chunk) - Financing activities in 2022 were driven by proceeds of **$6.5 million** from factoring advances and **$2.7 million** from non-convertible notes[184](index=184&type=chunk)[186](index=186&type=chunk) - The company may need to raise additional capital in the future and currently has no committed arrangements for it[187](index=187&type=chunk) [Critical Accounting Policies](index=30&type=section&id=Critical%20Accounting%20Policies) Critical accounting policies involve significant management judgment, particularly in goodwill impairment, derivative liabilities, and deferred tax assets - Key accounting policies requiring significant management estimates include goodwill, intangible assets, derivative liabilities, and deferred tax assets[192](index=192&type=chunk)[193](index=193&type=chunk) - Goodwill is tested for impairment annually on December 31, and in 2022, the company recorded a full goodwill impairment expense of **$2,499,753**, writing the asset down to **$0**[194](index=194&type=chunk)[197](index=197&type=chunk) - Intangible assets with finite lives, including tradenames, licenses, and customer relationships, are amortized on a straight-line basis over their useful lives ranging from three to ten years[198](index=198&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=31&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a "smaller reporting company," Greenwave Technology Solutions, Inc. is not required to provide this information - The company is exempt from this disclosure requirement as it qualifies as a "smaller reporting company"[203](index=203&type=chunk) [Financial Statements and Supplementary Data](index=31&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section refers to the consolidated financial statements and supplementary data, which are included in the report starting on page F-1 - The consolidated financial statements are indexed and begin on page F-1 of the report[204](index=204&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=31&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[205](index=205&type=chunk) [Controls and Procedures](index=32&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls were ineffective as of December 31, 2022, due to a material weakness in internal control over financial reporting - The CEO and CFO concluded that disclosure controls and procedures were not effective as of December 31, 2022[206](index=206&type=chunk) - A material weakness was identified in internal control over financial reporting due to a lack of segregation of duties and an inadequate process for reviewing accounting matters[206](index=206&type=chunk)[210](index=210&type=chunk) - Remediation plans include appointing additional qualified personnel to improve review levels, though this is dependent on securing financing or generating sufficient revenue[211](index=211&type=chunk) [Other Information](index=33&type=section&id=Item%209B.%20Other%20Information) The company reports no other information under this item - None[219](index=219&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=33&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) The company's leadership includes CEO Danny Meeks and CFO Ashley Sickles, with a four-member Board of Directors and four standing committees Executive Officers and Directors | Name | Age | Position | | :--- | :--- | :--- | | Danny Meeks | 49 | Chief Executive Officer, Chairman of the Board | | Ashley Sickles | 35 | Chief Financial Officer | | Cheryl Lanthorn | 51 | Director | | J. Bryan Plumlee | 55 | Director | | John Wood | 48 | Director | - The Board of Directors has determined that its three non-employee directors (Cheryl Lanthorn, J. Bryan Plumlee, and John Wood) meet the independence standards of the Nasdaq Stock Market[237](index=237&type=chunk) - The Board has four standing committees: Audit, Compensation, Nominating and Corporate Governance, and a Sustainability Committee formed in September 2022[235](index=235&type=chunk)[243](index=243&type=chunk) [Executive Compensation](index=37&type=section&id=Item%2011.%20Executive%20Compensation) In FY2022, CEO Danny Meeks received $1.95 million in total compensation, while non-employee directors received $40,000 in cash fees Summary Compensation Table (2022) | Name and Principal Position | Salary ($) | Bonus ($) | Total ($) | | :--- | :--- | :--- | :--- | | Danny Meeks, CEO | 500,000 | 1,450,000 | 1,950,000 | | Ashley Sickles, CFO | 41,250 | — | 41,250 | | Howard Jordan, Former CFO | 84,346 | — | 84,635 | - CEO Danny Meeks' employment agreement provides for a **$500,000** annual base salary and eligibility for annual bonuses[258](index=258&type=chunk) - Mr. Meeks is entitled to receive either **833,333 shares** of common stock or **$50,000** in cash for every **$1 million** in annual revenue generated by Empire Services, Inc. over **$20 million**, until October 1, 2026[259](index=259&type=chunk) - As of December 31, 2022, there were no outstanding equity awards held by the named executive officers[257](index=257&type=chunk) - The company's non-employee directors received a total of **$40,000** in cash fees for their service in 2022[264](index=264&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=42&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) As of March 29, 2023, CEO Danny Meeks and the executive group beneficially owned approximately 33.61% of the common stock Beneficial Ownership (as of March 29, 2023) | Name | Common Stock Beneficially Owned | Percentage of Common Stock | | :--- | :--- | :--- | | Danny Meeks (CEO) | 4,398,163 | 33.61% | | All directors and named executive officers as a group (5 people) | 4,426,909 | 33.61% | | Arena Investors, LP | 972,708 | 8.65% | - CEO Danny Meeks' beneficial ownership includes **2,562,203 shares** of common stock, **822,466 shares** underlying warrants, and **1,013,494 shares** underlying Series Z Preferred Stock[284](index=284&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=43&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) The company engages in significant related-party transactions, primarily leasing facilities and purchasing equipment from entities controlled by CEO Danny Meeks - The company leases **12 scrap yard facilities** from an entity controlled by CEO Danny Meeks[286](index=286&type=chunk) - During the twelve months ended December 31, 2022, the company paid rents of **$2,483,217** to the CEO's entity, with **$317,781** in accrued rent owed at year-end[287](index=287&type=chunk) - In 2022, the company purchased equipment for **$152,500** from an entity controlled by the CEO's spouse and for **$20,000** from an entity controlled by the CEO[288](index=288&type=chunk) - In September 2021, the CEO received **250 shares** of Series Z Preferred Stock in connection with a **$1,000,000** non-convertible note payable agreement[290](index=290&type=chunk) [Principal Accountant Fees and Services](index=45&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) RBSM LLP served as the independent auditor, with total fees of $310,000 in 2022 and $264,208 in 2021, primarily for audit services Accountant Fees (RBSM LLP) | Fee Type | 2022 | 2021 | | :--- | :--- | :--- | | Audit Fees | $310,000 | $129,000 | | Audit-Related Fees | $0 | $0 | | Tax Fees | $0 | $0 | | Other Fees | $0 | $135,208 | | **Total** | **$310,000** | **$264,208** | - The "Other Fees" in 2021 were related to the audit and review of Empire Services, Inc.'s financial statements prior to its acquisition by the company[307](index=307&type=chunk) PART IV [Exhibits, Financial Statement Schedules](index=46&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists all financial statements, schedules, and various exhibits filed as part of the Annual Report - This section lists all financial statements, schedules, and exhibits filed with the Form 10-K[310](index=310&type=chunk)[313](index=313&type=chunk) Financial Statements and Notes [Report of Independent Registered Public Accounting Firm](index=51&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) The auditor's report includes a going concern warning and identifies goodwill impairment as a critical audit matter due to significant management judgment - The auditor's report contains a going concern paragraph, raising substantial doubt about the company's ability to continue operations due to its accumulated deficit and expected future losses[324](index=324&type=chunk) - The impairment of intangibles and goodwill was identified as a Critical Audit Matter, reflecting the complexity and subjective judgment required in management's fair value estimates[328](index=328&type=chunk)[329](index=329&type=chunk) [Consolidated Financial Statements](index=53&type=section&id=Consolidated%20Financial%20Statements) For FY2022, total assets reached $41.5 million and stockholders' equity improved to $15.3 million, despite a net loss of $(35.0) million and a net loss available to common stockholders of $(63.9) million Consolidated Balance Sheet Highlights (As of Dec 31) | Account | 2022 | 2021 | | :--- | :--- | :--- | | Total Current Assets | $1,239,544 | $3,339,295 | | Total Assets | $41,468,173 | $38,177,570 | | Total Current Liabilities | $19,012,924 | $59,470,149 | | Total Liabilities | $26,130,608 | $61,525,632 | | Total Stockholders' Equity (Deficit) | $15,337,565 | $(23,348,062) | Consolidated Statement of Operations Highlights (Year Ended Dec 31) | Account | 2022 | 2021 | | :--- | :--- | :--- | | Revenues | $33,978,425 | $8,098,036 | | Gross Profit | $12,440,853 | $2,859,554 | | Loss From Operations | $(10,882,992) | $(2,927,564) | | Net Loss | $(35,043,290) | $(1,632,421) | | Net (Loss) Income Available to Common Stockholders | $(63,859,328) | $2,776,027 | [Notes to Consolidated Financial Statements](index=59&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail the going concern warning, Empire acquisition, goodwill impairment, debt financing, and significant debt conversion and warrant repricing events - **Going Concern (Note 2):** The company's financial statements were prepared on a going concern basis, but conditions such as a working capital deficit of **$(17.8) million** and an accumulated deficit of **$(362.3) million** raise substantial doubt about its ability to continue[346](index=346&type=chunk) - **Acquisition of Empire (Note 4):** The acquisition was accounted for as a business combination, with total purchase consideration of **$23.1 million**, consisting of common stock and promissory notes, resulting in **$2.5 million** of goodwill and **$26.5 million** of identifiable intangible assets[404](index=404&type=chunk) - **Goodwill Impairment (Note 3):** The company recorded a full impairment charge of **$2,499,753** for goodwill during the fiscal year ended December 31, 2022, reducing the carrying value to zero[386](index=386&type=chunk)[389](index=389&type=chunk) - **Debt and Financing (Note 9):** The company utilizes factoring advances and non-convertible notes for financing, owing **$4.9 million** for factoring advances and having **$8.8 million** in non-convertible notes payable as of December 31, 2022[390](index=390&type=chunk)[455](index=455&type=chunk) - **Debt Conversion (Note 14):** On July 22, 2022, senior secured convertible notes with a principal of **$37.7 million** and accrued interest of **$1.5 million** were automatically converted into **6,896,903 shares** of common stock upon the Nasdaq listing[492](index=492&type=chunk) - **Warrant Repricing (Note 17):** The Nasdaq listing triggered price protection provisions, resulting in the repricing of warrants and the issuance of **4.3 million** additional warrants, which led to a deemed dividend of **$21.1 million**[546](index=546&type=chunk)

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements](index=4&type=section&id=ITEM%201.%20Financial%20Statements) The financial statements for the period ended September 30, 2022, show total assets of $40.2 million, positive stockholders' equity of $22.5 million, and revenues of $28.0 million, despite a net loss of $27.9 million [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of September 30, 2022, the balance sheet shows total assets of $40.2 million, total liabilities of $17.7 million, and a shift from a $23.3 million stockholders' deficit to $22.5 million positive equity due to liability elimination Condensed Consolidated Balance Sheet Highlights (Unaudited) | Account | Sep 30, 2022 ($) | Dec 31, 2021 ($) | | :--- | :--- | :--- | | **Total Assets** | **40,225,869** | **38,177,570** | | Cash | 1,568,104 | 2,958,293 | | Property and equipment, net | 7,809,702 | 2,905,037 | | Goodwill | 2,499,753 | 2,499,753 | | **Total Liabilities** | **17,733,172** | **61,525,632** | | Derivative liabilities | 0 | 44,024,242 | | Convertible notes payable, net | 0 | 6,459,469 | | **Total stockholders' equity (deficit)** | **22,492,697** | **(23,348,062)** | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the nine months ended September 30, 2022, revenues surged to $28.0 million, but the company reported a net loss of $27.9 million, with a net loss available to common stockholders of $56.7 million, driven by high operating expenses and interest Statement of Operations - Nine Months Ended Sep 30 (Unaudited) | Metric | 2022 ($) | 2021 (Restated) ($) | | :--- | :--- | :--- | | Revenues | 27,972,612 | 1,660 | | Gross Profit | 10,814,905 | 1,363 | | Loss From Operations | (4,455,612) | (1,196,292) | | Net Loss | (27,888,158) | 10,864,149 | | Net Loss Available to Common Stockholders | (56,704,196) | (23,934,774) | | Basic and Diluted Net Loss Per Share | (9.43) | (5.11) | Statement of Operations - Three Months Ended Sep 30 (Unaudited) | Metric | 2022 ($) | 2021 (Restated) ($) | | :--- | :--- | :--- | | Revenues | 7,347,223 | 54 | | Gross Profit | 2,484,889 | 54 | | Loss From Operations | (3,294,162) | (395,258) | | Net Loss | (8,577,535) | (523,741) | | Net Loss Available to Common Stockholders | (37,393,573) | (523,741) | | Basic and Diluted Net Loss Per Share | (4.30) | (0.11) | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended September 30, 2022, net cash used in operations was $2.1 million, investing activities used $3.7 million, while financing provided $4.4 million, resulting in a $1.4 million cash decrease Cash Flow Summary - Nine Months Ended Sep 30 (Unaudited) | Cash Flow Activity | 2022 ($) | 2021 (Restated) ($) | | :--- | :--- | :--- | | Net cash used in operating activities | (2,067,257) | (390,269) | | Net cash used in investing activities | (3,684,307) | 0 | | Net cash provided by financing activities | 4,362,042 | 389,866 | | **Net decrease in cash** | **(1,389,522)** | **(403)** | | Cash, beginning of period | 2,958,293 | 1,485 | | **Cash, end of period** | **1,568,771** | **1,082** | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the company's business shift to metal recycling, a going concern risk, significant balance sheet improvement from debt conversion, related-party transactions, and high revenue concentration - The company changed its name from MassRoots, Inc. and shifted its business from social media to metal recycling by acquiring Empire Services, Inc., which operates 11 facilities in Virginia and North Carolina, effective October 1, 2021[26](index=26&type=chunk) - As of September 30, 2022, the company had a working capital deficit of **$10.6 million** and an accumulated deficit of **$356.6 million**, raising substantial doubt about its ability to continue as a going concern, though management believes current cash and anticipated cash from operations are sufficient for the next year[30](index=30&type=chunk)[33](index=33&type=chunk) - On July 22, 2022, senior secured convertible notes with a principal amount of **$37.7 million**, plus accrued interest, were converted into **6,896,901 shares** of common stock, significantly improving the company's balance sheet[131](index=131&type=chunk) - For the nine months ended September 30, 2022, three customers accounted for approximately **55.91%**, **15.25%**, and **12.97%** of total revenue, indicating a high concentration of revenue[182](index=182&type=chunk) - The company leases **12 scrap yard facilities** from an entity controlled by its CEO, with rent paid to this entity totaling **$1,854,814** for the nine months ended September 30, 2022[185](index=185&type=chunk)[186](index=186&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=ITEM%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's transition to scrap metal, operational priorities including capacity expansion, and financial results showing a revenue increase to $28.0 million but also a net loss, with a focus on future cash flow generation - The company is installing a **second automotive shredder** and a downstream system, which are expected to **double processing capacity** and increase profit margins[198](index=198&type=chunk) - A key corporate priority is to open a facility with rail or deep-water port access to efficiently transport products and expand the number of potential buyers[197](index=197&type=chunk) Results of Operations - Nine Months Ended Sep 30 | Metric | 2022 ($) | 2021 ($) | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenue | 27,972,612 | 1,660 | 27,970,952 | 1,684,997% | | Gross Profit | 10,814,905 | 1,363 | 10,813,542 | 793,363% | | Loss from Operations | (4,455,612) | (1,196,292) | (3,259,320) | 272% | | Net Loss Available to Common Stockholders | (56,704,196) | (23,934,728) | (32,769,422) | 137% | - The increase in operating expenses for the nine months ended Sep 30, 2022, was primarily due to the Empire acquisition, including a **$4.7 million** increase in payroll, **$2.8 million** in hauling/maintenance, and **$2.6 million** in rent[223](index=223&type=chunk) - Management believes the company could generate **positive cash flows** from operations and will not need to raise additional capital in the foreseeable future, but acknowledges this could change with market downturns or growth delays[233](index=233&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a "smaller reporting company," the company is not required to provide quantitative and qualitative disclosures about market risk - The company is not required to provide quantitative and qualitative disclosures about market risks because it qualifies as a "**smaller reporting company**"[238](index=238&type=chunk) [Controls and Procedures](index=40&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management assessed and concluded that the company's internal controls over financial reporting were effective as of September 30, 2022, enhanced by additional accounting personnel - Management determined that the company's internal controls over financial reporting were **effective** as of September 30, 2022[242](index=242&type=chunk) - During the most recent fiscal quarter, the company hired **additional accounting personnel** to enhance segregation of duties and financial reporting review procedures[243](index=243&type=chunk) [PART II. OTHER INFORMATION](index=41&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=41&type=section&id=ITEM%201.%20Legal%20Proceedings) The company refers to Note 9 for details on legal proceedings, including an arbitration award resolution and a completed environmental remediation consent order - Information regarding legal proceedings is disclosed in Note 9 – Commitments and Contingencies, with no material developments since December 31, 2021, except as described therein[245](index=245&type=chunk) [Risk Factors](index=41&type=section&id=ITEM%201A.%20Risk%20Factors) As a "smaller reporting company," the company is not required to provide risk factors in this report and refers to its Annual Report on Form 10-K - The company is not required to provide risk factors in this report as it is a "**smaller reporting company**"[246](index=246&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=41&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the nine months ended September 30, 2022, the company issued 475,000 common shares from the conversion of 117 Series Z Preferred Stock shares - The company issued **475,000 shares** of common stock upon the conversion of **117 shares** of Series Z Preferred Stock during the period[247](index=247&type=chunk) [Defaults Upon Senior Securities](index=41&type=section&id=ITEM%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - **None**[248](index=248&type=chunk) [Other Information](index=41&type=section&id=ITEM%205.%20Other%20Information) The company reported no other information for this item - **None**[250](index=250&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934 For the quarterly period ended June 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934 For the transition period from ___________to ____________ Commission File Number 000-55431 GREENWAVE TECHNOLOGY SOLUTIONS, INC. (f/k/a MassRoots, Inc.) (Exact name of business as specified in its charter) | Delaware | 4 ...

Part I [Business](index=5&type=section&id=Item%201.%20Business) The company transformed its business in 2021, acquiring Empire Services to pivot from social media to operating 11 scrap metal recycling facilities - In October 2021, the company changed its name to Greenwave Technology Solutions, Inc. and divested social media assets, pivoting its business focus[20](index=20&type=chunk)[22](index=22&type=chunk) - The company acquired Empire Services, Inc. on September 30, 2021, transitioning into the scrap metal industry with **11 facilities** in Virginia and North Carolina[22](index=22&type=chunk)[31](index=31&type=chunk) - A primary business strategy is to open a new facility with rail or deep-water port access to enhance transportation efficiency and expand the customer base[26](index=26&type=chunk) - The company implemented new technology in 2021, including a cloud-based ERP system and a junk car buying platform, to streamline operations and improve customer acquisition[41](index=41&type=chunk)[42](index=42&type=chunk)[43](index=43&type=chunk) - In November 2021, the company raised **$27.6 million** in aggregate proceeds through a placement of secured convertible promissory notes with a principal amount of **$37.7 million**[52](index=52&type=chunk) [Risk Factors](index=9&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including market cyclicality, customer concentration, going concern doubts, internal control weaknesses, and stock volatility - The business is highly sensitive to the cyclical nature of the scrap metal industry and general economic conditions, which can adversely affect operating results[60](index=60&type=chunk)[68](index=68&type=chunk) - The company has substantial customer concentration, with a single customer accounting for **83% of its revenue** in fiscal 2021[93](index=93&type=chunk) - The independent registered accounting firm has expressed substantial doubt about the company's ability to continue as a **going concern** due to historical losses and the need for additional financing[99](index=99&type=chunk) - Material weaknesses in internal control over financial reporting were identified, primarily due to a lack of sufficient segregation of duties, which could impair financial condition if not remediated[100](index=100&type=chunk) - As of March 30, 2022, company management beneficially owned approximately **50.67% of the outstanding common stock**, giving them significant control over stockholder matters[125](index=125&type=chunk) - The company's common stock is quoted on the OTC Pink market and could be subject to penny stock rules, which may reduce trading activity and make it difficult for stockholders to sell shares[116](index=116&type=chunk)[119](index=119&type=chunk) [Unresolved Staff Comments](index=22&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - There are no unresolved staff comments[139](index=139&type=chunk) [Properties](index=22&type=section&id=Item%202.%20Properties) The company leases all 11 scrap yard facilities from an entity owned by its CEO, with primary leases expiring January 1, 2024 - The company leases all **11 of its scrap yards** from DWM Properties, LLC, an entity owned by its Chairman and Chief Executive Officer, Danny Meeks[140](index=140&type=chunk)[141](index=141&type=chunk)[142](index=142&type=chunk) - The primary property leases expire on **January 1, 2024**, with options for the company to extend[140](index=140&type=chunk)[141](index=141&type=chunk)[145](index=145&type=chunk) - The company does not own any properties or land and believes its current leased facilities are adequate for its needs[155](index=155&type=chunk) [Legal Proceedings](index=23&type=section&id=Item%203.%20Legal%20Proceedings) The company settled a legal dispute with former counsel over unpaid fees and resolved a significant arbitration demand from Iroquois Master Fund - A dispute with former counsel over unpaid legal fees of **$487,391** resulted in a judgment against the company, settled in September 2021 with monthly payments until February 2023[156](index=156&type=chunk)[157](index=157&type=chunk) - A significant arbitration demand from Iroquois Master Fund, seeking damages of at least **$12 million**, was settled on September 30, 2021, involving a **$1 million payment** and Series Z Preferred Stock issuance[389](index=389&type=chunk)[392](index=392&type=chunk) [Mine Safety Disclosures](index=23&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company's operations - Not applicable[160](index=160&type=chunk) Part II [Market for Registrant's Common Stock, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=24&type=section&id=Item%205.%20Market%20for%20the%20Registrant%27s%20Common%20Stock%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock is quoted on the OTC Pink Tier under "GWAV," with no dividends paid or anticipated, and 131 stockholders of record as of April 7, 2022 - The company's common stock is quoted on the OTC Pink Tier of the OTC Markets under the symbol **"GWAV"** as of March 25, 2022[162](index=162&type=chunk) Quarterly Stock Prices | Period | High Price ($) | Low Price ($) | | :--- | :--- | :--- | | **2022** | | | | First Quarter | 14.10 | 3.35 | | **2021** | | | | First Quarter | 17.10 | 1.83 | | Second Quarter | 26.37 | 5.25 | | Third Quarter | 17.49 | 8.40 | | Fourth Quarter | 19.20 | 11.40 | | **2020** | | | | First Quarter | 2.55 | 0.45 | | Second Quarter | 2.07 | 0.30 | | Third Quarter | 1.56 | 0.45 | | Fourth Quarter | 2.52 | 0.48 | - The company has never declared or paid dividends and does not anticipate doing so in the foreseeable future, retaining earnings for business growth[167](index=167&type=chunk) [Reserved](index=25&type=section&id=Item%206.%20Reserved) This item is intentionally left blank - This item is reserved[170](index=170&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Following the Empire acquisition, 2021 revenues surged to **$8.1 million**, resulting in a **$2.8 million** net income primarily from a non-cash gain, despite increased operating losses and ongoing liquidity concerns Comparison of Fiscal Years 2021 and 2020 | Metric | 2021 ($) | 2020 ($) | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenues | 8,098,036 | 6,964 | 8,091,072 | 116,184% | | Gross Profit | 2,859,554 | 5,681 | 2,853,873 | 50,235% | | Loss from Operations | (2,927,564) | (1,160,211) | (1,767,353) | 152.33% | | Net Income (Loss) Applicable to Common Stockholders | 2,776,027 | (111,623,487) | 114,399,514 | (102.49)% | - The dramatic increase in revenue and gross profit in 2021 is directly attributable to the acquisition of Empire and the shift to scrap metal operations[186](index=186&type=chunk)[187](index=187&type=chunk) - Operating expenses increased by **$4.6 million** to **$5.8 million** in 2021, primarily due to higher payroll, rent, and hauling costs associated with expanded operations[188](index=188&type=chunk)[189](index=189&type=chunk) - The company had cash of **$2,958,293** as of December 31, 2021, with net cash used in operating activities of **$2,487,213** and net cash provided by financing activities of **$5,521,687**[194](index=194&type=chunk)[196](index=196&type=chunk)[197](index=197&type=chunk) - The company has **$37.7 million** in principal of senior secured convertible debt maturing on May 30, 2022, which it expects will be converted into common stock[200](index=200&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=32&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a "smaller reporting company," Greenwave is exempt from providing disclosures under this item - The company is a "smaller reporting company" and is not required to provide the information for this item[221](index=221&type=chunk) [Financial Statements and Supplementary Data](index=32&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) The company's consolidated financial statements and supplementary data are included in the report, beginning on page F-1 - The consolidated financial statements required by this item are included in the appendix to the Annual Report, starting on **page F-1**[222](index=222&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=32&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting principles or financial disclosure - None[223](index=223&type=chunk) [Controls and Procedures](index=33&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded disclosure controls were ineffective as of December 31, 2021, due to material weaknesses in internal control over financial reporting, with remediation dependent on future financing - Management concluded that disclosure controls and procedures were not effective as of **December 31, 2021**[225](index=225&type=chunk) - A **material weakness** in internal control over financial reporting was identified, stemming from inadequate segregation of duties and insufficient review of accounting matters[225](index=225&type=chunk)[229](index=229&type=chunk) - Remediation plans include appointing additional qualified personnel, but these efforts are dependent on securing additional financing or generating significant revenue[230](index=230&type=chunk) [Other Information](index=34&type=section&id=Item%209B.%20Other%20Information) There is no other information to report in this section - None[237](index=237&type=chunk) [Disclosure Regarding Foreign Jurisdictions That Prevent Inspections](index=34&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20That%20Prevent%20Inspections) This disclosure is not applicable to the company - None[238](index=238&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=34&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Required information is incorporated by reference from the company's Definitive Proxy Statement for its 2022 Annual Meeting of Stockholders - Required information is incorporated by reference from the company's Definitive Proxy Statement for the 2022 Annual Meeting of Stockholders[240](index=240&type=chunk) [Executive Compensation](index=35&type=section&id=Item%2011.%20Executive%20Compensation) Executive compensation information is incorporated by reference from the company's 2022 Definitive Proxy Statement - Required information is incorporated by reference from the company's Definitive Proxy Statement for the 2022 Annual Meeting of Stockholders[242](index=242&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=35&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Security ownership details are incorporated by reference from the company's 2022 Definitive Proxy Statement - Required information is incorporated by reference from the company's Definitive Proxy Statement for the 2022 Annual Meeting of Stockholders[243](index=243&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=35&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Related party transactions and director independence information is incorporated by reference from the company's 2022 Definitive Proxy Statement - Required information is incorporated by reference from the company's Definitive Proxy Statement for the 2022 Annual Meeting of Stockholders[244](index=244&type=chunk) [Principal Accountant Fees and Services](index=35&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Principal accountant fees and services information is incorporated by reference from the company's 2022 Definitive Proxy Statement - Required information is incorporated by reference from the company's Definitive Proxy Statement for the 2022 Annual Meeting of Stockholders[245](index=245&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=35&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists documents filed as part of the Annual Report, including financial statements starting on page F-1 and a comprehensive list of exhibits - The report includes an index of financial statements starting on **page F-1**[247](index=247&type=chunk)[248](index=248&type=chunk) - A detailed list of exhibits filed with the report is provided, including merger agreements, debt instruments, and equity incentive plans[251](index=251&type=chunk) - No financial statement schedules have been submitted because they are not required or applicable[250](index=250&type=chunk) Financial Statements [Report of Independent Registered Public Accounting Firm](index=40&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) The auditor's report expresses substantial doubt about the company's **going concern** ability and identifies intangible asset valuation from the Empire acquisition as a Critical Audit Matter - The auditor's report includes a **"Going Concern"** paragraph, highlighting substantial doubt about the company's ability to continue due to accumulated deficit and expected future losses[261](index=261&type=chunk) - A **Critical Audit Matter** was identified concerning the accounting for the Empire business combination, specifically the valuation of intangible assets, which involved complex and subjective judgments[267](index=267&type=chunk)[268](index=268&type=chunk) [Consolidated Financial Statements](index=42&type=section&id=Consolidated%20Financial%20Statements) The 2021 consolidated financial statements reflect a significant transformation, showing **$38.2 million** in assets, a **$23.3 million** stockholders' deficit, **$8.1 million** in revenues, and a **$2.8 million** net income Consolidated Balance Sheet Highlights (as of December 31, 2021) | Account | Amount ($) | | :--- | :--- | | Total Current Assets | 3,339,295 | | Total Assets | 38,177,570 | | Total Current Liabilities | 59,470,149 | | Total Liabilities | 61,525,632 | | Total Stockholders' Deficit | (23,348,062) | Consolidated Statement of Operations Highlights (for the year ended December 31, 2021) | Account | Amount ($) | | :--- | :--- | | Revenues | 8,098,036 | | Gross Profit | 2,859,554 | | Loss From Operations | (2,927,564) | | Net Income Available to Common Stockholders | 2,776,027 | [Notes to Consolidated Financial Statements](index=48&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail a **going concern** warning due to a **$56.1 million** working capital deficit, the **$23.1 million** Empire acquisition, **$37.7 million** in convertible debt, related-party leases, and **83%** revenue concentration from one customer - Note 2 (Going Concern): As of December 31, 2021, the company had a working capital deficit of **$56.1 million** and an accumulated deficit of **$298.4 million**, raising substantial doubt about its ability to continue as a **going concern**[285](index=285&type=chunk) - Note 4 (Acquisition of Empire): The acquisition was valued at **$23.1 million**, with purchase price allocated to Licenses (**$21.3 million**), Intellectual Property (**$3.0 million**), Customer Base (**$2.2 million**), and Goodwill (**$2.5 million**)[342](index=342&type=chunk)[348](index=348&type=chunk) - Note 10 (Convertible Notes Payable): The company has senior secured convertible notes with a principal balance of **$37.7 million** as of December 31, 2021, which mature in 2022[406](index=406&type=chunk)[411](index=411&type=chunk) - Note 16 (Concentrations of Revenue): For fiscal year 2021, one customer accounted for approximately **83% of the company's revenue**[488](index=488&type=chunk) - Note 18 (Related Party Transactions): The company leases **11 scrap yard facilities** from an entity controlled by its CEO, paying **$477,140** in rent to this entity in 2021[501](index=501&type=chunk) - Note 20 (Subsequent Events): The company effectuated a **1-for-300 reverse stock split** on February 28, 2022[509](index=509&type=chunk)

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements](index=4&type=section&id=ITEM%201.%20Financial%20Statements) MassRoots, Inc. reported a **net income of $17.3 million** for the nine months ended September 30, 2021, driven by a large gain on convertible notes, but faces significant going concern doubts Condensed Consolidated Balance Sheet Data | Indicator | September 30, 2021 (unaudited) ($) | December 31, 2020 ($) | | :--- | :--- | :--- | | **Assets** | | | | Cash | $1,082 | $1,485 | | Total Current Assets | $1,082 | $98,617 | | Total Assets | $1,082 | $98,617 | | **Liabilities & Stockholders' Deficit** | | | | Total Current Liabilities | $17,515,912 | $37,722,469 | | Total Liabilities | $17,644,769 | $37,832,469 | | Total Stockholders' Deficit | $(17,643,687) | $(37,733,852) | Condensed Consolidated Statements of Operations Data | Indicator | Nine Months Ended Sep 30, 2021 ($) | Nine Months Ended Sep 30, 2020 ($) | | :--- | :--- | :--- | | Revenues | $1,660 | $2,316 | | Loss From Operations | $(1,196,292) | $(694,041) | | Gain on settlement of convertible notes, etc. | $179,272,324 | $0 | | Net Income (Loss) | $17,267,348 | $(47,402,959) | | Net Income (Loss) Available to Common Stockholders | $(17,531,575) | $(142,405,892) | - The company had cash of **$1,082** and a working capital deficit of **$17.5 million** as of September 30, 2021, which raises substantial doubt about its ability to continue as a going concern[29](index=29&type=chunk) - Subsequent to the quarter end, on October 1, 2021, the company acquired Empire Services, Inc. for consideration including **495 million shares** of common stock, a **$1 million cash repayment**, and a **$3.7 million promissory note**[169](index=169&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=ITEM%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion highlights a strategic shift to metal recycling, with revenues decreasing and operating expenses increasing, resulting in a **$1.2 million loss from operations** and significant going concern uncertainty - The company's primary focus has shifted to expanding the metal recycling facilities of its newly acquired subsidiary, Empire Services, Inc., and using technology to improve efficiency[172](index=172&type=chunk) Results of Operations Comparison (Nine Months Ended Sep 30) | Metric | 2021 ($) | 2020 ($) | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | $1,660 | $2,316 | $(656) | (28.32%) | | Operating Expenses | $1,196,292 | $696,357 | $502,251 | 72.37% | | Loss from Operations | $(1,196,292) | $(694,041) | $(502,251) | 72.37% | | Net Income (Loss) Available to Common Stockholders | $(17,531,575) | $(142,405,892) | $124,874,317 | (87.69%) | - The increase in operating expenses for the nine months ended Sep 30, 2021 was primarily due to a **$0.54 million** increase in general and administrative expenses, attributed to higher travel and legal costs[183](index=183&type=chunk) - The significant improvement in Net Income (Loss) Available to Common Stockholders was mainly due to a **$179.3 million gain** on settlement of convertible notes and warrants and a reduction in deemed dividends[185](index=185&type=chunk)[186](index=186&type=chunk) - The company's ability to continue operations is dependent on obtaining additional capital through equity or debt financing, as it has experienced net losses and negative cash flows from operations since inception[190](index=190&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=34&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a "smaller reporting company," MassRoots, Inc. is not required to provide quantitative and qualitative disclosures about market risk - The company is not required to provide quantitative and qualitative disclosures about market risks as it qualifies as a "smaller reporting company"[196](index=196&type=chunk) [Controls and Procedures](index=35&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were **not effective** as of September 30, 2021, due to material weaknesses like lack of segregation of duties, with remediation plans underway - The CEO and CFO concluded that the company's disclosure controls and procedures were **not effective** as of September 30, 2021[198](index=198&type=chunk) - Identified control deficiencies include a lack of segregation of duties and an inadequate process for reviewing accounting and financial reporting matters[199](index=199&type=chunk) - No changes were made to the company's internal control over financial reporting during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting[202](index=202&type=chunk) [PART II. OTHER INFORMATION](index=36&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=36&type=section&id=ITEM%201.%20Legal%20Proceedings) The company is involved in several legal matters, including settlements with Power Up Lending Group, Sheppard Mullin, and Iroquois Master Fund, as detailed in Note 8 - The company settled a lawsuit with Power Up Lending Group for **$150,000** in April 2021[85](index=85&type=chunk) - An arbitration award of **$459,251** for unpaid legal fees to Sheppard Mullin was settled in September 2021 for an aggregate of **$275,000** to be paid in installments[86](index=86&type=chunk)[87](index=87&type=chunk) - The company settled a dispute with Iroquois Master Fund on September 30, 2021, by agreeing to pay **$1 million** and issue Series Z Preferred Stock convertible into **9.99%** of outstanding common stock[94](index=94&type=chunk) [Risk Factors](index=36&type=section&id=ITEM%201A.%20Risk%20Factors) As a "smaller reporting company," MassRoots, Inc. is not required to provide risk factor disclosures in this 10-Q report - The company is not required to provide risk factor information in this report as it is a "smaller reporting company"[206](index=206&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=36&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities were reported during the period - None reported for the period[207](index=207&type=chunk) [Defaults Upon Senior Securities](index=36&type=section&id=ITEM%203.%20Defaults%20Upon%20Senior%20Securities) The company is in default on its convertible promissory notes due to insufficient authorized shares for conversion, triggering default interest rates and derivative liability accounting for **$3.06 million** in principal - The company is in default on its convertible notes due to an insufficient number of authorized shares to satisfy all potential conversions[208](index=208&type=chunk) - As of September 30, 2021, the principal amount of convertible notes in default is **$3,063,970**[208](index=208&type=chunk) [Other Information](index=36&type=section&id=ITEM%205.%20Other%20Information) No other information was reported for this item - None[210](index=210&type=chunk) [Exhibits](index=37&type=section&id=ITEM%206.%20Exhibits) This section lists all exhibits filed with the report, including the Merger Agreement, preferred stock certificates, settlement agreements, and officer certifications

OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934 For the transition period from ___________to ____________ Commission File Number 000-55431 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934 For the quarterly period ended June 30, 2021 Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a sma ...

Financial Performance - For the three months ended March 31, 2021, the company generated revenues of $1,527, an increase from $0 in the same period in 2020, primarily due to the relaunch of product placements on social media channels [157]. - Operating expenses for the three months ended March 31, 2021, were $303,275, an increase of 43.51% from $211,328 in the same period in 2020, driven by higher advertising and general administrative expenses [159]. - The company incurred a loss from operations of $301,748 for the three months ended March 31, 2021, compared to a loss of $211,328 in the same period in 2020, reflecting an increase of 42.79% [160]. - Net income (loss) available to common stockholders for the three months ended March 31, 2021, was a loss of $47,193,938, a significant improvement from a loss of $126,955,829 in the same period in 2020, representing a 62.83% reduction in losses [162]. Cash Flow and Liquidity - As of March 31, 2021, the company had cash of $204 and a working capital deficit of $63,249,469, raising substantial doubt about its ability to continue as a going concern [165]. - Net cash used in operations for the three months ended March 31, 2021, was $225,541, an increase from $109,352 in the same period in 2020, primarily due to a decrease in accounts payable [163]. - Net cash provided by financing activities for the three months ended March 31, 2021, was $224,260, compared to $109,082 in the same period in 2020, mainly from the issuance of preferred shares and non-convertible notes [164]. - The company has experienced net losses and negative cash flows from operations since inception and expects these conditions to continue for the foreseeable future, relying on additional capital to sustain operations [165]. Strategic Initiatives - The company plans to monetize its social media accounts, including a YouTube channel with 273,000 subscribers and an Instagram account with 378,000 followers, through product placements and sponsorships [152]. - The company is exploring strategic opportunities, including a letter of intent to acquire Empire Services, Inc., while discontinuing earlier acquisition plans with Herbfluence, Inc. [153].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to _________ Commission File Number: 000-55431 MASSROOTS, INC. Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Sectio ...

Financial Performance - For the three months ended September 30, 2020, the company generated revenues of $2,316, a 154.7% increase from $909 in the same period in 2019, primarily due to the relaunch of product placements on its YouTube channel [142][143]. - Operating expenses for the three months ended September 30, 2020, were $208,238, down 81.4% from $1,122,617 in the same period in 2019, mainly due to reduced payroll and related expenses [142][144]. - The company reported a net income of $64,679,222 for the three months ended September 30, 2020, compared to a net loss of $23,550,345 in the same period in 2019, marking an increase of $88,229,567 [142][148]. - For the nine months ended September 30, 2020, revenues decreased to $2,316 from $23,658 in the same period in 2019, a decline of 90.2% due to service interruptions [149][150]. - Operating expenses for the nine months ended September 30, 2020, were $696,357, a decrease of 75.9% from $2,884,121 in the same period in 2019, attributed to lower stock-based compensation and payroll expenses [149][151]. - The company incurred a net loss of $142,405,892 for the nine months ended September 30, 2020, compared to a net loss of $94,457,638 in the same period in 2019, an increase of $47,948,254 [149][155]. Cash Flow and Financing - Net cash used in operations for the nine months ended September 30, 2020, was $717,062, a decrease of $672,150 from $1,389,212 in the same period in 2019 [156]. - Net cash provided by financing activities for the nine months ended September 30, 2020, was $716,592, a decrease from $1,271,300 in the same period of 2019 [158]. - As of September 30, 2020, the company had cash of $650 and a working capital deficit of $83,791,130 [159]. - Net cash used in operating activities during the nine months ended September 30, 2020, was $717,062, indicating ongoing negative cash flows from operations [159]. - The company has no committed source of financing and may need to consider additional financing options to support its operations and development plans [141]. - Management plans to obtain funding from new and current investors to alleviate the working capital deficiency and implement a revenue generation plan [160]. - The company’s ability to continue operations is dependent on obtaining additional capital through public or private equity offerings or debt financings [159]. - The company has contractual obligations that may require additional funds through equity or debt financings if operational funds are insufficient [164]. Operational Challenges - The company has experienced net losses since inception and expects these conditions to continue for the foreseeable future [159]. - The financial statements have been prepared under the assumption of the company continuing as a going concern for one year from the issuance date [161]. - The outcome of the company's plans to generate revenues cannot be determined with certainty [160]. - There are no off-balance sheet arrangements as of September 30, 2020 [162]. Audience and Monetization - The company has 920,000 opt-in email subscribers and over 265,000 subscribers on its YouTube channel, indicating a strong audience base for monetization efforts [132]. - The company is focusing on monetizing its existing media channels through product placements, display ads, and daily deals [134][135].