Greenwave Technology Solutions(GWAV) - 2024 Q4 - Annual Report

FORM 10-K Filing Information Details the annual report filing of Greenwave Technology Solutions, Inc. for fiscal year 2024, including its registrant status and outstanding shares Registrant Details Greenwave Technology Solutions, Inc., a Delaware corporation, filed its 2024 annual report as a non-accelerated, smaller reporting company - The registrant is Greenwave Technology Solutions, Inc., a Delaware corporation, filing its annual report for the fiscal year ended December 31, 2024[2] - The company is classified as a non-accelerated filer and a smaller reporting company[5] - The aggregate market value of voting and non-voting common equity held by non-affiliates was $19,426,520 as of June 28, 2024[5] - The number of shares of common stock outstanding was 57,169,509 as of April 11, 2025[6] Documents Incorporated by Reference Portions of the Company's Proxy Statement for the 2025 Annual Meeting of Stockholders will be incorporated by reference into Part III of this report, to be filed within 120 days after the year covered by this Annual Report - Portions of the Company's Proxy Statement for the 2025 Annual Meeting of Stockholders are incorporated by reference into Part III of this report[8] Table of Contents Provides an organized listing of all sections and items included within this annual report Special Note Regarding Forward-Looking Statements Highlights the inherent uncertainties and risks associated with forward-looking statements in this report Forward-Looking Statements Disclaimer This Annual Report contains forward-looking statements, which are based on current expectations and involve risks, uncertainties, and assumptions, with actual results potentially differing materially due to factors in 'Item 1A. Risk Factors', and the company disclaims any obligation to publicly update these statements - Statements in this Annual Report on Form 10-K are 'forward-looking statements' under the Securities Act of 1933 and the Securities Exchange Act of 1934[12] - These statements are based on current expectations, estimates, and projections, but are not guarantees of future performance and involve difficult-to-predict risks, uncertainties, and assumptions[13] - Actual outcomes and results may differ materially from forecasts due to factors outlined in 'Item 1A. Risk Factors'[13] - The company disclaims any obligation to publicly update or release revisions to these forward-looking statements after the report date, except as required by law[14] PART I Covers the company's business operations, risk factors, properties, legal proceedings, and cybersecurity measures Business Overview Greenwave Technology Solutions, Inc. transitioned into the scrap metal industry in October 2021, operating 13 recycling facilities, offering hauling services, launching ScrapApp.com, and positioning itself among top players in a consolidating U.S. market - Greenwave Technology Solutions, Inc. transitioned into the scrap metal industry in October 2021 through the acquisition of Empire Services, Inc., which operates 13 metal recycling facilities[19][20] - The company processes various scrap metals (appliances, construction material, end-of-life vehicles) by crushing, shearing, shredding, separating, and sorting to maximize value[20][22] - Greenwave launched ScrapApp.com in September 2023 to buy end-of-life vehicles directly from individuals, facilitating over 1,200 vehicle purchases and launching an AI agent for automation[32] - The U.S. scrap metal industry is consolidating, with leading steel makers securing supply chains. Greenwave believes it is among the top 25 scrap yard chains in the U.S[37][39] - Domestic scrap steel prices increased by 32% since early February, with demand exceeding supply, creating favorable market conditions for Greenwave[39] Products and Services Details the company's offerings, including ferrous and nonferrous metal processing and recycling services - Main product is ferrous metal, categorized into heavy melting steel, plate and structural, and shredded scrap, used in recycling and production of finished steel[25] - Also processes nonferrous metals (aluminum, copper, stainless steel, etc.) and sells catalytic converters for precious metal extraction[26] - Provides metal recycling services to large corporations, industrial manufacturers, retail customers, and government organizations[26] Pricing and Customers Explains how market rates and demand influence pricing for scrap metal products and customer interactions - Prices for ferrous and nonferrous products are based on prevailing market rates, influenced by market cycles, worldwide steel demand, government regulations, and supply[27] - The company adjusts prices paid to suppliers for unprocessed scrap to manage operating income and cashflows in response to market price changes[28][29] Sources of Unprocessed Metal Identifies primary sources of scrap metal and factors influencing supply, such as economic activity and prices - Primary sources include end-of-life vehicles, old equipment, appliances, consumer goods, and scrap metal from construction/manufacturing operations[30] - Supply is influenced by U.S. economic activity, recycled metal prices, and seasonal factors like severe weather[31] Technology Highlights the launch of ScrapApp.com for vehicle purchases and the adoption of GreenSpark ERP for operations - Launched ScrapApp.com in September 2023 for direct purchase of end-of-life vehicles, facilitating over 1,200 vehicle purchases and launching an AI agent in beta for automation[32] - Selected GreenSpark as its point-of-sale and ERP platform in February 2025, with rollout across 13 facilities expected in Q2 2025, aligning with growth plans[34][35] Competition Describes the competitive landscape, including large recyclers, steel mills, and industry consolidation trends - Competes with large, well-financed recyclers, steel mills with their own operations, and smaller companies[36] - The U.S. scrap metal industry is undergoing consolidation, with steel producers acquiring supply chains, as exemplified by Toyota's acquisition of Radius Recycling[37][38] - Greenwave believes it is among the top 25 scrap yard chains in the U.S., with a strong presence in the Hampton Roads, VA market[39] Recent Developments Outlines recent financing activities, Nasdaq compliance updates, and changes in the Board of Directors - On January 10, 2025, completed a registered direct offering and concurrent private placement, raising approximately $4 million gross proceeds from the sale of 7,544,323 common shares and accompanying warrants[43] - Concurrently, exchanged June Warrants for 5,327,401 common shares and amended existing warrants (March, April, May Warrants) to reduce exercise price to $1.50 and increase shares issuable by 250%[45][46] - On February 10, 2025, completed another registered direct offering and private placement, raising approximately $7 million gross proceeds from the sale of 21,100,000 common shares and accompanying warrants[48] - Received notice from Nasdaq on September 13, 2024, regarding non-compliance with the $1.00 minimum bid price requirement, and was granted an additional 180-day compliance period until September 8, 2025[51][52] - Appointed Lisa Lucas-Burke to the Board of Directors on January 28, 2025, and Henry Sicignano III resigned as a Director on February 14, 2025[47][50] Intellectual Property States that no significant intellectual property assets are highlighted in this section - The company states 'None' for intellectual property in this section, implying no significant intellectual property assets are highlighted here[54] Employees and Human Capital Resources Details the company's employee count and its commitment to diversity, growth, and competitive compensation - Greenwave employs 180 people as of April 7, 2025[23][55] - The company prioritizes a diverse employee population and a culture that supports learning, growth, and empowerment, offering competitive compensation and benefits[56] Available Information Informs on where to access the company's public filings and reports with the SEC - The company files Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other information with the SEC, available on www.sec.gov and its website[57] Risk Factors Investing in Greenwave's securities involves high risks related to cyclical industry conditions, global market changes, raw material price fluctuations, operational dependencies, limited operating history, reliance on key executives, the need for additional financing, independent auditor's going concern doubts, internal control weaknesses, environmental compliance, intellectual property, and stock market volatility including potential Nasdaq delisting - The company operates in cyclical industries sensitive to general economic conditions, global market changes (including sanctions and tariffs), and fluctuations in raw material and scrap metal prices, which could materially adversely affect operating results[61][65][67][70][71][72] - Key business risks include dependence on a small number of suppliers and a limited number of customers (two customers accounted for 55.99% and 5.05% of 2024 revenues), a limited operating history with no profitable operations, high dependence on key executives, and the potential need for additional financing[64][81][82][84][86][88] - The independent registered accounting firm has expressed concerns about the company's ability to continue as a going concern due to historical losses and financing needs[64][89] - The company has experienced material weaknesses in internal control over financial reporting, particularly due to insufficient segregation of duties, which could impair financial condition[64][90] - Risks related to common stock include market price volatility, potential delisting from Nasdaq due to non-compliance with the $1.00 minimum bid price requirement (with an extended compliance period until September 8, 2025), and adverse effects on liquidity from a recent 1-for-150 reverse stock split[64][104][123][124][127][128] Risk Factors Summary Provides a concise overview of key risks across business, regulatory, intellectual property, and stock ownership categories - Summarizes key risks across business and industry, government laws and regulations, intellectual property, and common stock ownership[59][60][62][63] Unresolved Staff Comments The company has no unresolved staff comments to report - There are no unresolved staff comments[129] Cybersecurity Greenwave integrates cybersecurity into enterprise risk management using NIST standards, third-party assessments, and management oversight, acknowledging future risks despite no material cyberattacks - Cybersecurity is an important and integrated part of the Company's enterprise risk management function, identifying, monitoring, and mitigating business, operational, and legal risks[131] - The company has established Cybersecurity standards, policies, and operating procedures based on the National Institute of Standards and Technology ('NIST') framework[132] - Third-party service providers are used for assessing, testing, and assisting with security processes, including cyber risk assessment against NIST standards and penetration testing[133] - Management, including IT, information security, legal, and compliance teams, is responsible for implementation, with ultimate oversight by the Chief Financial Officer and the Audit Committee[134][136] - Although no material cyberattacks have occurred, the company cannot guarantee future protection against incidents[137] Properties Greenwave owns and leases various scrap yard properties in Virginia, North Carolina, and Ohio, including a truck fleet yard from a related party - Greenwave owns scrap yard properties in Portsmouth, Carrollton, Toano, and Virginia Beach, VA, and Elizabeth City and Vanceboro, NC, along with additional properties in Suffolk and Portsmouth, VA[138][143] - The company leases scrap yard properties in Emporia, Norfolk, and Suffolk, VA from third parties[138] - A property for the truck fleet in Chesapeake, VA is leased from DWM Properties, LLC, controlled by the CEO, on a month-to-month basis[140] - In March 2024, the company leased a scrap yard in Cleveland, OH, with a five-year term, two five-year extension options, and a purchase option for $3,277,000[141] Legal Proceedings Greenwave is involved in ordinary course legal proceedings, notably defending against a significant breach of contract lawsuit filed by Arena Special Opportunities Fund, LP in October 2024 - The company is involved in various lawsuits and legal proceedings that arise in the ordinary course of business[144][147] - On October 25, 2024, Arena Special Opportunities Fund, LP filed a lawsuit alleging a purported breach of contract based on an alleged equity conditions failure, which Greenwave believes lacks merit and intends to defend vigorously[145] - The company is currently unable to estimate a reasonably possible loss or range of loss from these matters[146] Mine Safety Disclosures This item is not applicable to Greenwave Technology Solutions, Inc. - Mine Safety Disclosures are not applicable to the company[148] PART II Details market information for common stock, management's financial analysis, and controls and procedures Market for Common Stock and Stockholder Matters Greenwave's common stock trades on Nasdaq, with 142 stockholders as of April 2025, no anticipated dividends, and 1,472,609 securities available for future equity issuance - Greenwave's common stock has been traded on Nasdaq under the symbol 'GWAV' since July 22, 2022[150] - The last reported sale price of Common Stock on Nasdaq was $0.199 per share as of April 11, 2025[150] - As of April 11, 2025, there were 142 stockholders of record[151] - The company has never declared or paid cash or stock dividends and does not anticipate doing so, planning to retain future earnings for business growth[152] Securities Authorized for Issuance Under Equity Compensation Plans (as of December 31, 2024) | | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | Weighted average exercise price of outstanding options, warrants and rights (b) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a) (c) | |:---|:---|:---|:---| | Equity compensation plans approved by security holders (1) | 799 | $148.11 | 1,472,609 | | Equity compensation plans not approved by security holders | — | — | — | | Total | 799 | $148.11 | 1,472,609 | Reserved This item is reserved and contains no information Management's Discussion and Analysis of Financial Condition and Results of Operations Greenwave experienced decreased revenues and gross profit in 2024 due to inventory strategy, significantly increased operating expenses, and a substantial net loss, leading to a working capital deficit and going concern doubts despite capital raises - Revenues decreased by $2,352,123 (6.59%) to $33,315,859 in 2024, primarily due to an inventory accumulation strategy in Q4 2024 anticipating higher metal tariffs in early 2025[160][161] - Gross profit decreased by $1,493,925 (10.31%) to $12,989,478 in 2024, with gross margins declining from 41% to 39% due to the inventory accumulation strategy[160][166] - Operating expenses increased significantly by $13,253,246 (38.98%) to $47,251,411 in 2024, driven by higher payroll, depreciation, hauling/equipment maintenance, consulting/legal fees, warrants issued for services, and stock-based compensation[160][169] - Net loss available to common stockholders increased by $66,849,047 (198.97%) to $100,446,189 in 2024[160][173] - The company had a working capital deficit of $(13,453,459) and an accumulated deficit of $(496,312,346) as of December 31, 2024, with net cash used in operating activities of $(17,254,723), raising substantial doubt about its ability to continue as a going concern[180] Overview Provides a general introduction to Greenwave's business, its transition to scrap metal, and operational methods - Greenwave Technology Solutions, Inc. transitioned to the scrap metal industry in October 2021 through the acquisition of Empire Services, Inc., operating 13 metal recycling facilities[155] - The company processes various scrap metals (appliances, construction material, end-of-life vehicles) into recycled ferrous, nonferrous, and mixed metal pieces[156] - Operates two American Pulverizer 60x85 automotive shredders to produce denser, more refined recycled ferrous metals[157] Results of Operations (2024 vs. 2023) Compares Greenwave's financial performance for 2024 against 2023, highlighting changes in revenues, gross profit, and net loss Consolidated Statements of Operations Summary | For the Fiscal Year ended | 31-Dec-24 | 31-Dec-23 | $ Change | %Change | |:---|:---|:---|:---|:---| | Revenues | $33,315,859 | $35,667,982 | $(2,352,123) | (6.59)% | | Gross Profit | 12,989,478 | 14,483,403 | (1,493,925) | (10.31)% | | Operating Expenses | 47,251,411 | 33,998,165 | 13,253,246 | 38.98% | | Loss from Operations | (34,261,933) | (19,514,762) | (14,747,171) | 75.57% | | Other Income (Expense) | 10,344,580 | (7,421,228) | 17,765,808 | (239.39)% | | Net Income (Loss) Available to Common Stockholders | $(100,446,189) | $(33,597,142) | $(66,849,047) | 198.97% | - Revenues decreased by $2.35 million (6.59%) to $33.32 million in 2024, primarily due to accumulating inventory in Q4 2024 in anticipation of higher metal tariffs in early 2025[161] - Cost of revenues decreased by $0.86 million (4.05%) to $20.33 million in 2024, also influenced by the inventory accumulation strategy[163] - Gross profit decreased by $1.49 million (10.31%) to $12.99 million in 2024, with gross margins falling from 41% to 39% due to inventory accumulation[166] - Operating expenses increased by $13.25 million (38.98%) to $47.25 million in 2024, driven by higher payroll, depreciation, hauling/equipment maintenance, consulting/legal, warrants for services, and stock-based compensation[169] - Other Income (Expense) saw a positive swing of $17.77 million, primarily due to a $48.31 million gain in fair value of derivative liabilities, partially offset by losses on conversion of convertible notes ($14.21 million) and extinguishment of debt ($16.35 million)[172] - Net loss available to common stockholders increased by $66.85 million (198.97%) to $100.45 million in 2024[173] Liquidity and Capital Resources Assesses the company's cash position, working capital, and ability to meet short-term and long-term obligations Cash Flow Summary (2024 vs. 2023) | Cash Flow Activity | 2024 | 2023 | |:---|:---|:---| | Net cash used in operating activities | $(17,254,723) | $(1,833,310) | | Net cash used in investing activities | $(15,921,990) | $(1,678,176) | | Net cash provided by financing activities | $34,207,018 | $4,235,841 | | Cash, end of year | $2,576,464 | $1,546,159 | - As of December 31, 2024, the company had cash of $2,576,464 and a working capital deficit of $(13,453,459), with an accumulated deficit of $(496,312,346)[177][180] - Fundraising in 2024 included $2,834,741 from warrant exercises and $40,369,115 from the sale of common stock and warrants[178] - The company may need additional capital through debt or equity, which could be dilutive to stockholders or involve restrictive covenants[179][182] - These conditions raise substantial doubt about the company's ability to continue as a going concern[180] Off-Balance Sheet Arrangements Confirms that the company does not have any off-balance sheet arrangements - The company does not have any off-balance sheet arrangements[184] Recent Accounting Pronouncements Outlines new accounting standards, including those for income taxes, segment reporting, and expense disaggregation - ASU 2023-09 (Income Taxes) requires enhanced disclosures for rate reconciliation and income taxes paid, effective for annual periods beginning January 1, 2025[185] - ASU 2023-07 (Segment Reporting) requires enhanced disclosures for reportable segments, adopted by the company for the year ended December 31, 2024[186] - ASU 2024-03 (Income Statement - Expense Disaggregation) requires specified information about certain costs and expenses in financial statement notes, effective for annual periods beginning January 1, 2027[187] Critical Accounting Policies Describes key accounting policies requiring significant management estimates and judgments, such as for derivatives and income taxes - Management's critical accounting policies involve significant estimates and judgments for stock-based compensation, derivative liabilities, payroll tax liabilities, deemed dividends, right-of-use and lease liabilities, goodwill and intangible asset valuations, environmental remediation, and deferred tax assets[189] - Intangible assets (tradenames, licenses, customer relationships) are amortized on a straight-line basis over 3-10 years and reviewed for impairment[191] - Income taxes are accounted for under ASC 740, requiring recognition of deferred tax assets and liabilities and evaluation of uncertain tax positions[192][194] Quantitative and Qualitative Disclosures About Market Risk As a 'smaller reporting company,' Greenwave Technology Solutions, Inc. is not required to provide the information typically required for quantitative and qualitative disclosures about market risk - The company is a 'smaller reporting company' and is not required to provide quantitative and qualitative disclosures about market risk[196] Financial Statements and Supplementary Data The consolidated financial statements required for this Annual Report are included in the appendix, starting on page F-1 - The consolidated financial statements are included in the appendix to this Annual Report, beginning on page F-1[197] Changes in and Disagreements with Accountants Greenwave Technology Solutions, Inc. reports no changes in or disagreements with its accountants on accounting and financial disclosure matters - There are no changes in and disagreements with accountants on accounting and financial disclosure[198] Controls and Procedures Greenwave's management concluded that disclosure controls were ineffective as of December 31, 2024, due to material weaknesses in segregation of duties, despite believing financial statements are fairly presented, with remediation efforts dependent on financing - As of December 31, 2024, the CEO and Interim CFO concluded that disclosure controls and procedures were not effective due to identified control deficiencies regarding lack of segregation of duties and the need for a stronger internal control environment[199] - Management believes that the financial statements included in this Annual Report fairly present the company's financial condition, results of operations, and cash flows[200] - A material weakness in internal control over financial reporting existed as of December 31, 2023, due to an inadequate process for reviewing accounting and financial reporting matters[203] - Remediation plans include appointing additional qualified accounting personnel, but these efforts are largely dependent on securing additional financing[204] - The company's CEO and CFO identified control deficiencies regarding the lack of segregation of duties and the need for a stronger internal control environment, concluding that internal control over financial reporting was not effective as of December 31, 2024[207][208] Other Information This section provides disclosures in lieu of Form 8-K filings, including recent Board and CFO resignations/terminations, and confirms no Rule 10b5-1 trading arrangements by directors or officers - Jason Adelman resigned from the Board and all committees on April 10, 2025[212] - Isaac Dietrich's employment as Chief Financial Officer was terminated on April 12, 2025[213] - No Rule 10b5-1 trading arrangements were adopted or terminated by directors or officers during the three months ended December 31, 2024[214] Disclosure Regarding Foreign Jurisdictions That Prevent Inspections Greenwave Technology Solutions, Inc. has no disclosures regarding foreign jurisdictions that prevent inspections - There are no disclosures regarding foreign jurisdictions that prevent inspections[215] PART III Covers corporate governance, executive compensation, security ownership, related party transactions, and principal accountant fees Directors, Executive Officers and Corporate Governance Information on directors, executive officers, corporate governance, and Section 16(a) reports is incorporated by reference from the 2025 proxy statement, alongside the company's insider trading policy - Information required by Item 10 is incorporated by reference from the company's proxy statement for its 2025 Annual Meeting of Stockholders[217] - Disclosure for delinquent Section 16(a) reports can be found under the caption 'Delinquent Section 16(a) Reports' in the proxy statement[218] - The company has an insider trading policy designed to promote compliance with insider trading laws[219] Executive Compensation Information regarding executive compensation is incorporated by reference from the company's proxy statement for its 2025 Annual Meeting of Stockholders - Information required by Item 11 is incorporated by reference to the company's proxy statement for its 2025 Annual Meeting of Stockholders[220] Security Ownership and Related Stockholder Matters Information regarding security ownership of certain beneficial owners and management, and related stockholder matters, is incorporated by reference from the company's proxy statement for its 2025 Annual Meeting of Stockholders - Information required by Item 12 is incorporated by reference to the company's proxy statement for its 2025 Annual Meeting of Stockholders[221] Certain Relationships and Related Transactions and Director Independence Information regarding certain relationships and related transactions and director independence is incorporated by reference from the company's proxy statement for its 2025 Annual Meeting of Stockholders - Information required by Item 13 is incorporated by reference to the company's proxy statement for its 2025 Annual Meeting of Stockholders[222] Principal Accountant Fees and Services The company's independent registered public accounting firm is RBSM LLP. Information regarding principal accountant fees and services is incorporated by reference from the company's proxy statement for its 2025 Annual Meeting of Stockholders - The independent registered public accounting firm is RBSM LLP, New York, NY, Auditor ID: 587[223] - Information required by Item 14 is incorporated by reference to the company's proxy statement for its 2025 Annual Meeting of Stockholders[224] PART IV Lists exhibits and financial statement schedules included in the annual report Exhibits and Financial Statement Schedules This section lists financial statements and exhibits filed as part of the Annual Report, noting no separate financial statement schedules were submitted as they are either not required or included elsewhere - Documents filed as part of this Annual Report include financial statements and a list of exhibits[226][228] - No financial statement schedules were submitted because they are not required, not applicable, or the information is included in the financial statements or notes[227] FORM 10-K Summary This item is not applicable to Greenwave Technology Solutions, Inc. - FORM 10-K Summary is not applicable[233] Signatures Authenticates the Annual Report on Form 10-K with signatures from key company officers and directors Signatories The Annual Report on Form 10-K was signed on April 15, 2025, by Danny Meeks (Chief Executive Officer, Acting Chief Financial Officer, and Chairman of the Board), Cheryl Lanthorn (Director), and Lisa Lucas-Burke (Director) - The Annual Report on Form 10-K was signed on April 15, 2025[235][237] - Key signatories include Danny Meeks (CEO, Acting CFO, Chairman), Cheryl Lanthorn (Director), and Lisa Lucas-Burke (Director)[236][237] Index to Consolidated Financial Statements Provides a detailed listing of all consolidated financial statements included in the report Financial Statements Listing The consolidated financial statements include the Report of Independent Registered Public Accounting Firm, Consolidated Balance Sheets, Consolidated Statements of Operations, Consolidated Statements of Stockholders' Equity (Deficit), Consolidated Statements of Cash Flows, and Notes to Consolidated Financial Statements - The index lists the Report of Independent Registered Public Accounting Firm, Consolidated Balance Sheets, Consolidated Statements of Operations, Consolidated Statements of Stockholders' Equity (Deficit), Consolidated Statements of Cash Flows, and Notes to Consolidated Financial Statements[239] Report of Independent Registered Public Accounting Firm Presents the independent auditor's opinion on the financial statements and highlights going concern considerations Opinion on the Financial Statements RBSM LLP, the independent auditor, issued an unqualified opinion, stating that Greenwave Technology Solutions, Inc.'s consolidated financial statements for 2024 and 2023 fairly present the financial position, results of operations, and cash flows in conformity with U.S. GAAP - RBSM LLP audited the consolidated financial statements for Greenwave Technology Solutions, Inc. for the years ended December 31, 2024 and 2023[241] - The auditor issued an unqualified opinion, stating that the financial statements present fairly, in all material respects, the financial position, results of operations, and cash flows in conformity with U.S. GAAP[241] The Company's Ability to Continue as a Going Concern The auditor's report expresses substantial doubt about Greenwave's going concern ability due to net losses, negative operating cash flows, and an accumulated deficit, with financial statements not reflecting potential adjustments - The consolidated financial statements have been prepared assuming the company will continue as a going concern[242] - The auditor expresses concern about the company's ability to continue as a going concern due to net loss, negative cash flows from operating activities, and an accumulated deficit[242] - The financial statements do not include any adjustments that might result from the outcome of this uncertainty[242] Basis for Opinion The audit, conducted under PCAOB standards, assessed financial statement risks and accounting principles, but did not include an opinion on internal control over financial reporting effectiveness - Audits were conducted in accordance with PCAOB standards, requiring reasonable assurance that financial statements are free of material misstatement[244] - The auditor was not engaged to perform an audit of internal control over financial reporting and expresses no opinion on its effectiveness[244] Critical Audit Matters The auditor determined that there were no critical audit matters for the current period audit of the financial statements - The auditor determined that there were no critical audit matters[246] Consolidated Balance Sheets Presents the company's financial position, including assets, liabilities, and equity, at the end of the fiscal year Balance Sheet Summary Greenwave's total assets increased to $63.09 million in 2024, while liabilities decreased to $26.13 million, resulting in a shift from a stockholders' deficit to positive equity, driven by capital increases and debt reductions Consolidated Balance Sheet Highlights | ASSETS | December 31, 2024 | December 31, 2023 | |:---|:---|:---| | Cash | $2,576,464 | $1,546,159 | | Inventories, net | 2,889,682 | 200,428 | | Accounts receivable, net | 1,254,390 | 646,413 | | Prepaid expenses | 921,580 | 296,761 | | Total current assets | 7,642,116 | 2,689,761 | | Property and equipment, net | 25,596,856 | 16,569,125 | | Property and equipment, net - Purchased from Related Party | 11,834,807 | 6,926,315 | | Licenses, net | 14,359,950 | 16,487,350 | | Customer list, net | 1,511,325 | 1,735,225 | | Intellectual property, net | 1,062,600 | 1,669,800 | | Total assets | $63,087,617 | $46,411,849 | | LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | December 31, 2024 | December 31, 2023 | |:---|:---|:---| | Bank overdraft | $231,696 | $118,763 | | Accounts payable and accrued expenses | 5,893,351 | 6,100,449 | | Accrued payroll and related expenses | 3,946,410 | 4,089,836 | | Non-convertible notes payable, current portion | 2,505,360 | 2,623,561 | | Convertible notes payable, current portion | 0 | 8,065,494 | | Related party note payable | 7,691,859 | 17,218,350 | | Due to related parties | 495,354 | 2,070,402 | | Operating lease obligations, current portion | 331,545 | 89,731 | | Total current liabilities | 21,095,575 | 40,487,826 | | Operating lease obligations, less current portion | 773,820 | 94,943 | | Convertible notes payable, net of unamortized debt discount | 0 | 4,032,747 | | Non-convertible notes payable, net of unamortized debt discount | 4,263,239 | 6,250,481 | | Total liabilities | 26,132,634 | 50,865,997 | | Preferred stock - Series A-1 | 450 | 0 | | Common stock | 26,091 | 113 | | Additional paid in capital | 533,240,788 | 391,411,896 | | Accumulated deficit | (496,312,346) | (395,866,157) | | Total stockholders' equity (deficit) | 36,954,983 | (4,454,148) | - Total assets increased by $16.67 million (35.9%) from $46.41 million in 2023 to $63.09 million in 2024[248] - Total liabilities decreased by $24.73 million (48.6%) from $50.87 million in 2023 to $26.13 million in 2024[248] - Total stockholders' equity (deficit) improved significantly from a deficit of $(4.45) million in 2023 to a positive $36.95 million in 2024[248] Consolidated Statements of Operations Details the company's revenues, expenses, and net income or loss over the fiscal year Operations Summary Greenwave's net loss available to common stockholders significantly increased to $(100.45) million in 2024, driven by decreased revenues, increased operating expenses, and substantial deemed dividends, despite derivative liability gains Consolidated Statements of Operations Summary | | For the Year Ended December 31, 2024 | For the Year Ended December 31, 2023 | |:---|:---|:---| | Revenues | $33,315,859 | $35,667,982 | | Cost of Revenues | 20,326,381 | 21,184,579 | | Gross Profit | 12,989,478 | 14,483,403 | | Total Operating Expenses | 47,251,411 | 33,998,165 | | Loss From Operations | (34,261,933) | (19,514,762) | | Total Other Income (Expense) | 10,344,580 | (7,421,228) | | Net Loss | (23,917,353) | (26,935,990) | | Deemed dividend for the reduction of exercise price of warrants | (52,574,896) | (1,638,952) | | Deemed dividend for the reduction of the conversion price of a debt note | (23,953,940) | (5,022,200) | | Net Loss Available to Common Stockholders | $(100,446,189) | $(33,597,142) | | Net Loss Per Common Share: Basic | $(8.47) | $(385.81) | | Weighted Average Common Shares Outstanding: Basic | 11,853,520 | 87,082 | - Revenues decreased by $2,352,123 (6.59%) from $35,667,982 in 2023 to $33,315,859 in 2024[251] - Gross Profit decreased by $1,493,925 (10.31%) from $14,483,403 in 2023 to $12,989,478 in 2024[251] - Operating Expenses increased by $13,253,246 (38.98%) from $33,998,165 in 2023 to $47,251,411 in 2024[251] - Net Loss Available to Common Stockholders increased by $66,849,047 (198.97%) from $(33,597,142) in 2023 to $(100,446,189) in 2024[251] - Basic Net Loss Per Common Share was $(8.47) in 2024, compared to $(385.81) in 2023, reflecting a significant increase in weighted average common shares outstanding[251] Consolidated Statements of Stockholders' Equity (Deficit) Outlines changes in the company's equity accounts, including common stock, preferred stock, and accumulated deficit Stockholders' Equity (Deficit) Summary Greenwave's total stockholders' equity improved from a deficit to positive $36.95 million in 2024, primarily due to increased additional paid-in capital from stock/warrant issuances and debt conversions, despite an increased accumulated deficit from net loss Consolidated Stockholders' Equity (Deficit) Highlights | | December 31, 2024 | December 31, 2023 | |:---|:---|:---| | Preferred Stock Series A-1 | $450 | $0 | | Common Stock | $26,091 | $113 | | Additional Paid In Capital | $533,240,788 | $391,411,896 | | Accumulated Deficit | $(496,312,346) | $(395,866,157) | | Total Stockholders' Equity (Deficit) | $36,954,983 | $(4,454,148) | - Total stockholders' equity (deficit) improved from $(4,454,148) in 2023 to $36,954,983 in 2024[252] - Additional paid-in capital increased significantly from $391,411,896 in 2023 to $533,240,788 in 2024, driven by common stock and warrant issuances for cash, conversion of convertible debt, and deemed dividends[252] - The accumulated deficit increased from $(395,866,157) in 2023 to $(496,312,346) in 2024, reflecting the net loss[252] - Common stock shares outstanding increased from 113,096 in 2023 to 26,091,025 in 2024, due to cashless warrant exchanges, stock and warrant sales, and debt conversions[252] Consolidated Statements of Cash Flows Reports the cash generated and used by the company across operating, investing, and financing activities Cash Flows Summary Greenwave's cash balance increased to $2.58 million in 2024, driven by significant financing activities that offset substantial cash used in operating and investing activities Consolidated Statements of Cash Flows Summary | Cash Flow Activity | For the Year Ended December 31, 2024 | For the Year Ended December 31, 2023 | |:---|:---|:---| | Net cash used in operating activities | $(17,254,723) | $(1,833,310) | | Net cash used in investing activities | $(15,921,990) | $(1,678,176) | | Net cash provided by financing activities | $34,207,018 | $4,235,841 | | Net increase (decrease) in cash | $1,030,305 | $724,355 | | Cash, end of year | $2,576,464 | $1,546,159 | - Net cash used in operating activities increased significantly from $(1.83) million in 2023 to $(17.25) million in 2024, primarily due to the increased net loss and changes in working capital[258] - Net cash used in investing activities increased from $(1.68) million in 2023 to $(15.92) million in 2024, mainly due to purchases of property and equipment, including from a related party[258] - Net cash provided by financing activities substantially increased from $4.24 million in 2023 to $34.21 million in 2024, driven by proceeds from common stock and warrant sales ($40.37 million) and warrant exercises ($2.83 million)[258] - Cash at the end of the year increased to $2,576,464 in 2024 from $1,546,159 in 2023[258] Notes to Consolidated Financial Statements Provides detailed explanations and additional information supporting the consolidated financial statements Nature of Operations and Basis of Presentation Greenwave transitioned to scrap metal recycling and hauling services in 2021, with consolidated financial statements prepared under U.S. GAAP including wholly-owned subsidiaries - Greenwave Technology Solutions, Inc. transitioned from a technology platform developer to the scrap metal industry in October 2021 with the acquisition of Empire Services, Inc., operating 13 metal recycling facilities[261] - The company began offering hauling services to corporate clients in December 2022, utilizing a fleet of approximately 75 trucks[262] - Consolidated financial statements are prepared in accordance with U.S. GAAP and include wholly-owned subsidiaries: Empire Services, Inc., Liverman Metal Recycling, Inc., Empire Staffing, LLC, Scrap App, Inc., and Greenwave Elite Sports Facility, Inc[263] Going Concern and Management's Liquidity Plans Greenwave's significant working capital deficit of $(13.45) million, accumulated deficit of $(496.31) million, and negative operating cash flows of $(17.25) million as of December 31, 2024, raise substantial doubt about its going concern ability, with management planning further capital raises - As of December 31, 2024, the company had cash of $2,576,464, a working capital deficit of $(13,453,459), and an accumulated deficit of $(496,312,346)[264] - Net cash used in operating activities was $(17,254,723) for the year ended December 31, 2024[264] - These conditions raise substantial doubt about the company's ability to continue as a going concern for one year from the issuance of the consolidated financial statements[264] - Management plans to raise additional funds by issuing equity securities (which would cause dilution) or debt financing (which may involve covenants)[266] Summary of Significant Accounting Policies Greenwave's financial statements adhere to U.S. GAAP, relying on management estimates for items like stock-based compensation and derivative liabilities, with key policies covering revenue recognition, inventory, leases, and segment reporting - Financial statements are prepared in conformity with U.S. GAAP, requiring management to make estimates and assumptions affecting reported amounts[269] - Significant estimates include stock-based compensation, fair values of derivative liabilities, payroll tax liabilities, deemed dividends, lease calculations, and asset impairments[269] - Revenue is recognized under ASC Topic 606, primarily from purchasing, processing, and selling scrap metal, and providing hauling services[279][280] - Inventories are valued at the lower of net realizable value or cost (FIFO method) and include processed/unprocessed scrap metal, used/salvaged vehicles, and supplies[284] - The company accounts for leases under ASC 842, recognizing right-of-use assets and lease liabilities, and adopted ASU 2023-07 for segment reporting for the year ended December 31, 2024[276][299][304] Recent Accounting Pronouncements Outlines new accounting standards, including those for income taxes, segment reporting, and expense disaggregation - ASU 2023-09 (Income Taxes) requires enhanced disclosures for rate reconciliation and income taxes paid, effective for annual periods beginning January 1, 2025[303] - ASU 2023-07 (Segment Reporting) requires enhanced disclosures for reportable segments, adopted by the company for the year ended December 31, 2024[304] - ASU 2024-03 (Income Statement - Expense Disaggregation) requires specified information about certain costs and expenses, effective for annual periods beginning January 1, 2027[305] Concentrations of Risk Greenwave faces significant customer and geographic concentration risks, with two customers accounting for over 60% of 2024 revenues and sales concentrated in Virginia and northeastern North Carolina - For the fiscal year ended December 31, 2024, two large customers individually accounted for 55.99% ($18,654,928) and 5.05% ($1,683,325) of revenues[310] - Accounts receivable balances at December 31, 2024, showed concentration, with six large customers individually accounting for percentages ranging from 5.36% to 12.48%[309] - The company's sales are concentrated in the Virginia and northeastern North Carolina markets[311] - In 2024, no single supplier accounted for more than 5% of the company's cost of revenues, a change from 2023 where two suppliers accounted for 2.88% and 1.77% respectively[307][308] Inventories Greenwave's inventories, consisting of processed and unprocessed scrap metal, significantly increased to $2.89 million as of December 31, 2024, from $0.20 million in 2023. The company uses the first-in-first-out (FIFO) methodology and values inventories at the lower of net realizable value or cost Inventories (as of December 31) | | 2024 | 2023 | |:---|:---|:---| | Processed and unprocessed scrap metal | $2,889,682 | $200,428 | | Finished products | - | - | | Inventories | $2,889,682 | $200,428 | - Inventories, primarily processed and unprocessed scrap metal, increased significantly from $200,428 in 2023 to $2,889,682 in 2024[312] - The company calculates the value of inventories based on the net realizable value or cost, whichever is less, using the first-in-first-out (FIFO) methodology[284] Property and Equipment Greenwave's net property and equipment increased to $37.43 million in 2024, driven by a $15 million related-party land and permits purchase, with depreciation expense of $4.38 million and impairment of $0.44 million Property and Equipment, Net (as of December 31) | | 2024 | 2023 | |:---|:---|:---| | Machinery & Equipment | $18,467,955 | $18,028,893 | | Vehicles | 20,679,716 | 7,149,919 | | Land | 3,641,579 | 980,129 | | Buildings | 724,170 | 724,170 | | Less accumulated depreciation | (7,974,269) | (5,256,392) | | Property and equipment, net | $37,431,663 | $23,495,440 | - Net property and equipment increased by $13.94 million (59.3%) from $23,495,440 in 2023 to $37,431,663 in 2024[315] - On December 2, 2024, the company purchased land and permits for $15 million from related parties, paid by issuing 450,000 shares of Series A-1 Preferred Stock ($3.30 million) and an $11.70 million promissory note[313][314] - Depreciation expense was $4,379,393 in 2024, and impairment of equipment was $439,086[315] Amortization of Intangible Assets Greenwave's net intangible assets, primarily licenses, intellectual property, and customer lists from the Empire acquisition, decreased to $16.93 million in 2024, with amortization expense of $2.96 million Intangible Assets, Net (as of December 31) | | December 31, 2024 (Carrying value) | December 31, 2023 (Carrying value) | |:---|:---|:---| | Intellectual Property | $1,062,600 | $1,669,800 | | Customer List | 1,511,325 | 1,735,225 | | Licenses | 14,359,950 | 16,487,350 | | Total intangible assets, net | $16,933,875 | $19,892,375 | - Net intangible assets decreased by $2.96 million (14.9%) from $19,892,375 in 2023 to $16,933,875 in 2024[316] - All identified intangible assets (intellectual property, customer list, licenses) were assumed upon the Empire acquisition on October 1, 2021[316] - Amortization expense for intangible assets was $2,958,500 for both the years ended December 31, 2024 and 2023[317] Advances and Non-Convertible Notes Payable Greenwave retired all 2022-2024 factoring advances and a $17.22 million related-party note in 2024, while issuing a new $11.70 million related-party note for land and permits - All factoring advances from 2022-2023 were retired by December 31, 2023, or during 2024, with associated gains on settlement[318][319][320][321][323][324][325][326][327][329] - New factoring advances totaling $2,494,000 were entered into in early 2024, all of which were retired by December 31, 2024, with associated gains on settlement[330][331][332][333][334] - A $17,218,350 secured promissory note from a related party (for equipment purchase) was fully exchanged in 2024 for Series D Preferred Stock ($10 million) and common stock ($7.22 million)[353] - On December 2, 2024, a new $11,699,916 secured promissory note was issued to a related party for the purchase of land and permits, with a principal balance of $7,691,859 remaining at year-end after payments[355] Non-Convertible Notes Payable Principal Due (as of December 31, 2024) | | Principal (Current) | Principal (Long Term) | |:---|:---|:---| | GM Financial (Issued April 11, 2022) | $9,281 | - | | Deed of Trust Note (Issued September 1, 2022) | 53,712 | 507,610 | | Equipment Finance Note (Issued April 21, 2022) | 231,120 | 129,159 | | Equipment Finance Note (Issued September 14, 2022) | 635,095 | - | | Equipment Finance Note (Issued November 28, 2022) | 251,400 | 677,172 | | Equipment Finance Note (Issued January 10, 2023) | 408,096 | 52,227 | | Equipment Finance Note (Issued January 12, 2023) | 193,620 | 548,274 | | Equipment Finance Note (Issued February 24, 2023) | 287,460 | 499,515 | | Equipment Finance Note (Issued February 23, 2023) | 193,620 | 98,573 | | Equipment Finance Note (Issued April 12, 2023) | 51,780 | 159,933 | | DWM Property Note | 7,691,859 | - | | Total Principal of Non-Convertible Notes | $10,197,219 | $4,263,239 | Accounts Payable and Accrued Expenses Greenwave's accounts payable and accrued expenses, primarily vendor payments, accrued interest, and legal bills, decreased to $5.89 million in 2024 Accounts Payable and Accrued Expenses (as of December 31) | | 2024 | 2023 | |:---|:---|:---| | Accounts Payable | $2,364,398 | $1,884,973 | | Credit Cards | 25,118 | 1,756 | | Accrued Interest | 2,439,466 | 2,074,016 | | Accrued Expenses | 1,064,369 | 2,139,704 | | Total Accounts Payable and Accrued Expenses | $5,893,351 | $6,100,449 | - Total accounts payable and accrued expenses decreased by $207,098 (3.4%) from $6,100,449 in 2023 to $5,893,351 in 2024[360] - These balances are primarily comprised of payments to vendors, accrued interest on debt, and accrued legal bills[359] Accrued Payroll and Related Expenses Greenwave's accrued payroll and related expenses, including penalties for delinquent payroll taxes from 2016-2021, decreased to $3.95 million in 2024 - As of December 31, 2024, the company owed payroll tax liabilities, including penalties, of $3,946,410, a decrease from $4,089,836 in 2023[361] - The company is delinquent in filing its payroll taxes, primarily related to stock compensation awards in 2016 and 2017, and payroll for 2018, 2019, 2020, and 2021[361] - The actual liability may be higher or lower due to interest or penalties assessed by federal and state taxing authorities[361] Commitments and Contingencies Greenwave is involved in various legal proceedings, including a breach of contract lawsuit, and is addressing a Nasdaq bid price deficiency with an extension until September 8, 2025 - The company is subject to various lawsuits and legal proceedings arising in the ordinary course of business[362] - On October 25, 2024, Arena Special Opportunities Fund, LP filed a lawsuit alleging a purported breach of contract based on an alleged equity conditions failure[363] - The company received notice from Nasdaq on September 13, 2024, regarding non-compliance with the $1.00 minimum bid price requirement[364] - Nasdaq granted an additional 180-calendar day period until September 8, 2025, to regain compliance, with a reverse stock split being a potential option[365][368] Leases Greenwave leases various properties, including a new Cleveland scrap yard, and rents 13 scrap yards from a related party, with total ROU assets of $1.05 million and lease liabilities of $1.11 million in 2024 - The company leases facilities and certain automobiles under operating leases expiring on various dates through 2027[369] - On July 31, 2023, the company terminated leases for 12 scrap yards, resulting in a gain on termination of $108,863[374] - Since August 1, 2023, the company has been renting land for 13 scrap yards from a related party, with aggregate rent increasing to $124,970 per month effective April 1, 2024[374] - On March 15, 2024, the company entered into leasing agreements for a scrap yard in Cleveland, OH, with escalating monthly payments[375] ROU Assets and Lease Liabilities (as of December 31) | | 2024 | 2023 | |:---|:---|:---| | ROU assets | $1,048,070 | $198,558 | | Total ROU assets | $1,048,070 | $302,380 | | Total lease liabilities | $1,105,365 | $295,914 | - Rent expense for the year ended December 31, 2024, was $1,998,428[382] Convertible Notes Payable Greenwave's convertible notes payable were fully retired by December 31, 2024, after significant conversions of a $18 million senior secured note into common shares, resulting in a $14.21 million loss from conversion premiums - The carrying value of convertible notes was $0 as of December 31, 2024, down from $12,098,241 in 2023[391] - An $18 million senior secured convertible note was issued in July 2023, with an original conversion price of $225.00[384] - The conversion price of the Senior Notes was reduced multiple times in 2023 and 2024 (to $153.00, then $29.40, then $7.50) due to registered direct offerings and warrant inducements, triggering deemed dividends[386][388][389] - During 2024, holders converted $16,502,905 of principal into 2,478,459 common shares, resulting in a $14,213,480 loss from conversion premiums[390] - The convertible notes payable were fully retired by December 31, 2024[391] [Derivative Liabilities and Fair Value Measurements](index=77&type=section&id=NOTE%2014%20%E2%80%93%20DERIVATIVE%20LIAB