UNITEDSTATES
SECURITIESAND EXCHANGE COMMISSION
Washington,D.C. 20549
FORM
Forthe period ended
OR
Forthe transition period from ___________to ____________
CommissionFile Number
(Exactname of business as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
| (Address of principal executive offices) | (Zip code) |
(Registrant’stelephone number, including area code)
Securitiesregistered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| The |
Indicateby check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities ExchangeAct of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)has been subject to such filing requirements for the past 90 days. Yes☐
Indicateby check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrantwas required to submit such files). Yes ☐
Indicateby check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reportingcompany, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smallerreporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
Ifan emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complyingwith any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicateby check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
Asof November 19, 2025, there were shares of the registrant’s common stock issued and outstanding.
TABLEOF CONTENTS
| i |
CAUTIONARYNOTE REGARDING FORWARD-LOOKING STATEMENTS
ThisQuarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, asamended, (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended, (the “ExchangeAct”) that are based on our management’s beliefs and assumptions and on information currently available to management, andwhich statements involve substantial risk and uncertainties. All statements contained in this Quarterly Report on Form 10-Q other thanstatements of historical fact, including statements regarding our future operating results and financial position, our business strategyand plans, market growth and trends, and objectives for future operations are forward-looking statements. Forward-looking statementsgenerally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statementsbecause they contain words such as “may,” “will,” “should,” “expects,” “plans,”“anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,”“believes,” “estimates,” “predicts,” “potential,” or “continue” or the negativeof these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions.
Thesestatements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore,actual outcomes and results may, and are likely to, differ materially from what is expressed or forecasted in the forward-looking statementsdue to numerous factors, including those set forth in “Item 1A. Risk Factors” in our Annual Report on Form 10-K, and ourother filings with SEC. These risks and uncertainties include, among other things:
| ● | Changing conditions in global markets including the impact of sanctions and tariffs, quotas and other trade actions and import restrictions which may adversely affect our operating results, financial condition and cash flows. | |
| ● | Changes in the availability or price of inputs such as raw materials and end-of-life vehicles which could reduce our sales. | |
| ● | Significant decreases in scrap metal prices which may adversely impact our operating results. | |
| ● | Imbalances in supply and demand conditions in the global steel industry which may reduce demand for our products. | |
| ● | Impairment of long-lived assets and equity investments which may adversely affect our operating results. | |
| ● | Governmental agencies’ refusal to grant or renew our licenses and permits, thus restricting our ability to operate. |
Compliancewith existing and future climate change and greenhouse gas emission laws and regulations which may adversely impact our operating results.
Youare cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Quarterly Reporton Form 10-Q. Any forward-looking statements speak only as of the date on which they are made, and we disclaim any obligation to publiclyupdate or release any revisions to these forward-looking statements, whether as a result of new information, future events or otherwise,after the date of this Quarterly Report on Form 10-Q or to reflect the occurrence of unanticipated events, except as required by applicablelaw.
| ii |
GREENWAVETECHNOLOGY SOLUTIONS, INC.
CONDENSEDCONSOLIDATED BALANCE SHEETS
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | $ | ||||||
| Inventories, net | ||||||||
| Accounts receivable, net of allowance for doubtful accounts | ||||||||
| Prepaid expenses | ||||||||
| Total current assets | $ | |||||||
| Property and equipment, net | ||||||||
| Property and equipment, net - Purchased from Related Party | ||||||||
| Operating lease right of use assets, net | ||||||||
| Licenses, net | ||||||||
| Customer list, net | ||||||||
| Intellectual property, net | ||||||||
| Security deposit | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Bank overdraft | $ | $ | ||||||
| Accounts payable and accrued expenses | ||||||||
| Accrued payroll and related expenses | ||||||||
| Non-convertible notes payable, current portion, net of unamortized debt discount of $ | ||||||||
| Stock subscription payable | ||||||||
| Related party note payable | ||||||||
| Due to related parties | ||||||||
| Operating lease obligations, current portion | ||||||||
| Total current liabilities | ||||||||
| Operating lease obligations, less current portion | ||||||||
| Non-convertible notes payable, net of unamortized debt discount of $ | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (See Note 11) | ||||||||
| Stockholders’ equity: | ||||||||
| Preferred stock - shares authorized: | ||||||||
| Preferred stock - Series A-1, $ par value, $ | ||||||||
| Common stock, $ par value, shares authorized; and shares issued and outstanding, respectively | ||||||||
| Additional paid in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
Theaccompanying notes are an integral part of these consolidated financial statements.
| 1 |
GREENWAVETECHNOLOGY SOLUTIONS, INC.
CONDENSEDCONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| For the Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Revenues | $ | $ | ||||||
| Cost of Revenues | ||||||||
| Gross Profit | ||||||||
| Operating Expenses: | ||||||||
| Advertising | ||||||||
| Payroll and related expense | ||||||||
| Rent, utilities and property maintenance ($ | ||||||||
| Hauling and equipment maintenance | ||||||||
| Depreciation and amortization expense | ||||||||
| Stock based compensation for services | ||||||||
| Consulting, accounting and legal | ||||||||
| Loss on asset | ( | ) | ||||||
| Stock compensation | ||||||||
| Other general and administrative expenses | ||||||||
| Total Operating Expenses | ||||||||
| Loss From Operations | ( | ) | ( | ) | ||||
| Other Income (Expense): | ||||||||
| Interest expense and amortization of debt discount | ( | ) | ( | ) | ||||
| Other income | ||||||||
| Equity issued for warrant inducement | ( | ) | ||||||
| Gain on conversion of convertible notes | ||||||||
| Shares Issued for Financing | ( | ) | ||||||
| Total Other Expense | ( | ) | ( | ) | ||||
| Net Loss Before Income Taxes | ( | ) | ( | ) | ||||
| Provision for Income Taxes (Benefit) | ||||||||
| Net Loss | ( | ) | ( | ) | ||||
| Deemed dividend for the reduction of exercise price of warrants | ( | ) | ( | ) | ||||
| Deemed dividend for the reduction of the conversion price of a debt note | ( | ) | ||||||
| Net Loss Available to Common Stockholders | $ | ( | ) | $ | ( | ) | ||
| Net Loss Per Common Share: | ||||||||
| Basic | $ | ( | ) | $ | ( | ) | ||
| Diluted | $ | ( | ) | $ | ( | ) | ||
| Weighted Average Common Shares Outstanding: | ||||||||
| Basic | ||||||||
| Diluted | ||||||||
Theaccompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 2 |
GREENWAVETECHNOLOGY SOLUTIONS, INC.
CONDENSEDCONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
FORTHE THREE MONTHS ENDED MARCH 31, 2025
(Unaudited)
| Preferred Stock | Preferred Stock | |||||||||||||||||||||||||||||||||||
| Series D to be Issued | Series A-1 | Common Stock | Additional Paid | Accumulated | ||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | In Capital | Deficit | Total | ||||||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||
| Common stock and warrants issued for cash, net of fees | - | - | $ | |||||||||||||||||||||||||||||||||
| Common stock issued for cashless exchange of warrants | - | - | ( | ) | $ | |||||||||||||||||||||||||||||||
| Deemed dividend for the reduction of the exercise price of warrants | - | - | - | ( | ) | $ | ||||||||||||||||||||||||||||||
| Common stock issued for services rendered | - | - | $ | |||||||||||||||||||||||||||||||||
| Net loss | - | - | - | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||
Theaccompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 3 |
GREENWAVETECHNOLOGY SOLUTIONS, INC.
CONDENSEDCONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)
FORTHE THREE MONTHS ENDED MARCH 31, 2024
(Unaudited)
| Preferred Stock | ||||||||||||||||||||||||||||||||||||||||
| Series D to be Issued | Common Stock | Common Stock to be Issued | Subscription | Additional Paid | Accumulated | |||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Receivable | In Capital | Deficit | Total | |||||||||||||||||||||||||||||||
| Balance at December 31, 2023 | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||
| Exchange of non-convertible note into shares of Series D Preferred | $ | - | - | $ | $ | |||||||||||||||||||||||||||||||||||
| Common stock issued for the conversion of convertible debt notes | - | $ | - | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
| Common stock issued for the exercise of warrants for cash | - | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||||||||||||||||||
| Stock based compensation | - | - | - | $ | $ | |||||||||||||||||||||||||||||||||||
| Equity issued for warrant inducement | - | - | - | $ | $ | |||||||||||||||||||||||||||||||||||
| Deemed dividend for the reduction of the conversion price of a debt note | - | - | - | $ | $ | ( | ) | |||||||||||||||||||||||||||||||||
| Deemed dividend for the reduction of the exercise price of warrants | - | - | - | $ | $ | ( | ) | |||||||||||||||||||||||||||||||||
| Net loss | - | - | - | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||||||
| Balance at March 31, 2024 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | |||||||||||||||||||||||||||||
Theaccompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 4 |
GREENWAVETECHNOLOGY SOLUTIONS, INC.
CONDENSEDCONSOLIDATED STATEMENTS OF CASHFLOWS
(Unaudited)
| For the Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization of intangible assets | ||||||||
| Amortization of right of use assets, net - related-party | ||||||||
| Amortization of right of use assets, net | ||||||||
| Interest and amortization of debt discount | ||||||||
| Gain on conversion of debt | ( | ) | ||||||
| Gain on disposal of assets | ( | ) | ||||||
| Stock based compensation for services | ||||||||
| Stock based compensation | ||||||||
| Equity issued for warrant inducement | ||||||||
| Shares issued for Financing | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Due to related party | ( | ) | ||||||
| Inventories | ( | ) | ( | ) | ||||
| Accounts receivable | ( | ) | ( | ) | ||||
| Prepaid expenses | ||||||||
| Accounts payable and accrued expenses | ( | ) | ( | ) | ||||
| Accrued payroll and related expenses | ||||||||
| Principal payments made on operating lease liability - related-party | ( | ) | ||||||
| Principal payments made on operating lease liability | ( | ) | ( | ) | ||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchases of property and equipment | ( | ) | ||||||
| Disposal of asset | ||||||||
| Net cash used in investing activities | ( | ) | ||||||
| Cash flows from financing activities: | ||||||||
| Proceeds from warrant exercises | ||||||||
| Proceeds from sales of common stock and warrants | ||||||||
| Cash received but shares in abeyance | ||||||||
| Repayment of convertible notes payable | ( | ) | ||||||
| Bank overdrafts | ||||||||
| Repayment of a non-convertible notes payable | ( | ) | ( | ) | ||||
| Repayment of non-convertible notes payable - related party | ( | ) | ||||||
| Proceeds from factoring | ||||||||
| Repayments of factoring | ( | ) | ||||||
| Net cash provided by financing activities | ||||||||
| Net increase (decrease) in cash | ( | ) | ||||||
| Cash, beginning of year | ||||||||
| Cash, end of period | $ | $ | ||||||
| Supplemental disclosures of cash flow information: | ||||||||
| Cash paid during period for interest | $ | $ | ||||||
| Cash paid during period for taxes | $ | $ | ||||||
| Supplemental disclosure of non-cash investing and financing activities: | ||||||||
| Deemed dividend for conversion price reduction of note | $ | $ | ||||||
| Non-convertible notes settled with disposal of property and equipment | $ | $ | ||||||
| Equipment purchased by issuance of non-convertible notes payable | $ | $ | ||||||
| Deemed dividend for exercise price reduction of warrants | $ | $ | ||||||
| Common shares issued for cashless exchange of warrants | $ | $ | ||||||
| Exchange of notes to Series D Preferred | $ | $ | ||||||
| Increase in right of use assets and operating lease liabilities | $ | $ | ||||||
| Common shares issued upon conversion of convertible notes and accrued interest | $ | $ | ||||||
| Legal fees paid out of warrant exercise | $ | $ | ||||||
Theaccompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 5 |
GREENWAVETECHNOLOGY SOLUTIONS, INC.
Notesto Consolidated Financial Statements
March31, 2025 (Unaudited)
NOTE1 – NATURE OF OPERATIONS AND BASIS OF PRESENTATION
GreenwaveTechnology Solutions, Inc. (“Greenwave” or the “Company”) was incorporated in the State of Delaware on April26, 2013 as a technology platform developer under the name MassRoots, Inc. The Company sold its social media assets in October 2021 andhas discontinued all operations related to this business. On September 30, 2021, we closed our acquisition of Empire Services, Inc. (“Empire”),which operates 13 metal recycling facilities in Virginia, North Carolina, and Ohio. The acquisition was effective October 1, 2021 uponthe effectiveness of the Certificate of Merger in Virginia.
InDecember 2022, we began offering hauling services to corporate clients. We haul sand, dirt, asphalt, metal, and other materials in afleet of approximately 75 trucks which we own, manage, and maintain.
Theaccompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally acceptedin the United States of America (“U.S. GAAP”) for financial information and pursuant to the rules and regulations of theSecurities and Exchange Commission (the “SEC”). Our consolidated financial statements include the accounts of Empire Services,Inc., Liverman Metal Recycling, Inc., Empire Staffing, LLC, Scrap App, Inc., and Greenwave Elite Sports Facility, Inc., our wholly ownedsubsidiaries.
Basis of Presentation
The interim unaudited condensedconsolidated financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulationsof the SEC. In the opinion of the Company’s management, all adjustments (consisting of normal recurring adjustments and reclassificationsand non-recurring adjustments) necessary to present fairly the Company’s results of operations for the three months ended March31, 2025 and 2024, its cash flows for the three months ended March 31, 2025 and 2024, and its financial position as of March 31, 2025have been made. The results of operations for such interim periods are not necessarily indicative of the operating results to be expectedfor the full year.
Certain information and disclosuresnormally included in the notes to the annual consolidated financial statements have been condensed or omitted from these interim unauditedcondensed consolidated financial statements. Accordingly, these interim unaudited condensed consolidated financial statements shouldbe read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for thefiscal year ended December 31, 2024 as filed with the SEC on April 15, 2025 (the “Annual Report”). The December 31, 2024balance sheet is derived from those statements.
NOTE2 – GOING CONCERN AND MANAGEMENT’S LIQUIDITY PLANS
Asof March 31, 2025, the Company had cash of $
Ifthe Company raises additional funds by issuing equity securities, its stockholders would experience dilution. Additional debt financing,if available, may involve covenants restricting its operations or its ability to incur additional debt. Any additional debt financingor additional equity that the Company raises may contain terms that are not favorable to it or its stockholders and require significantdebt service payments, which diverts resources from other activities. The Company’s ability to raise additional capital will beimpacted by market conditions and the price of the Company’s common stock.
Accordingly,the accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplatesthe realization of assets and satisfaction of liabilities in the normal course of business for one year from the date the condensed consolidatedfinancial statements are issued. The carrying amounts of assets and liabilities presented in the unaudited condensed consolidated financialstatements do not necessarily purport to represent realizable or settlement values. The unaudited condensed consolidated financial statementsdo not include any adjustments that might result should the Company be unable to continue as a going concern.
NOTE3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principlesof Consolidation
Theunaudited condensed consolidated financial statements include the accounts of Greenwave Technology Solutions, Inc. and its wholly ownedsubsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
| 6 |
Useof Estimates
Thepreparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S.GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosureof contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses duringthe reporting period. Significant estimates include estimates used in the calculation of stock-based compensation, payroll tax liabilitieswith interest and penalties, deemed dividends, assumptions used in right-of-use and lease liability calculations, valuations and impairmentsof goodwill estimated useful life of long-lived assets and finite life tangibleassets, and the valuation allowance related to deferred tax assets. Actual results may differfrom these estimates.
FairValue of Financial Instruments
TheFinancial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Subtopic 825-10, “FinancialInstruments” (“ASC 825-10”) requires disclosure of the fair value of certain financial instruments. The estimated fairvalue of certain financial instruments, including cash, accounts payable and accrued liabilities are carried at historical cost basis,which approximates their fair value because of the short-term maturity of these instruments. All other significant financial assets,financial liabilities and equity instruments of the Company are either recognized or disclosed in the consolidated financial statementstogether with other information relevant for making a reasonable assessment of future cash flows, interest rate risk and credit risk.
TheCompany follows ASC 825-10, which permits entities to choose to measure many financial instruments and certain other items at fair value.
Cash
Forpurposes of the condensed consolidated statements of cash flows, the Company considers highly liquid investments with an original maturityof three months or less to be cash equivalents. As of March 31, 2025 and December 31, 2024, the Company had no cash equivalents. TheCompany maintains its cash in banks insured by the Federal Deposit Insurance Corporation in accounts that at times may be in excess ofthe federally insured limit of $
Propertyand Equipment, net
Westate property and equipment at cost or, if acquired through a business combination, fair value at the date of acquisition. We calculatedepreciation and amortization using the straight-line method over the estimated useful lives of the assets, except for our leaseholdimprovements, which are depreciated over the shorter of their estimated useful lives or their related lease term. Upon the sale or retirementof assets, the cost and related accumulated depreciation are removed from our accounts and the resulting gain or loss is credited orcharged to income. We expense costs for repairs and maintenance when incurred. Our property and equipment is pledged as collateral forcertain non-convertible notes, see Note 8 – Advances and Non-Convertible Notes Payable.
Costof Revenue
TheCompany’s cost of revenue consists primarily of the costs of purchasing metal from its suppliers, direct costs of providing haulingcosts to customers, and cost of other revenue, including sand.
RelatedParty Transactions
Partiesare considered related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlledby, or are under common control with the Company. Related parties also include principal owners of the Company, its management, membersof the immediate families of principal owners of the Company and its management and other parties with which the Company may deal ifone party controls or can significantly influence the management or operating policies of the other to an extent that one of the transactingparties might be prevented from fully pursuing its own separate interests. The Company discloses all related party transactions. SeeNote 18 – Related Party Transactions.
| 7 |
Leases
TheCompany accounts for its leases under ASC 842, Leases. Under this guidance, arrangements meeting the definition of a lease are classifiedas operating or financing leases and are recorded on the consolidated balance sheet as both a right of use asset and lease liability,calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s incrementalborrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the right of use asset is amortizedover the lease term. For operating leases, interest on the lease liability and the amortization of the right of use asset result in straight-linerent expense over the lease term. Variable lease expenses, if any, are recorded when incurred.
Incalculating the right of use asset and lease liability, the Company elected to combine lease and non-lease components. The Company excludedshort-term leases having initial terms of 12 months or less from the new guidance as an accounting policy election and recognizes rentexpense on a straight-line basis over the lease term. See Note 12 – Leases.
Commitmentsand Contingencies
Fromtime to time, we may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. Litigationis subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.Except as set forth below, we are currently not aware of any such legal proceedings or claims that will have, individually or in theaggregate, a material adverse effect on our business, financial condition or operating results. See Note 11 – Commitments andContingencies.
RevenueRecognition
TheCompany’s revenues are accounted for under ASC Topic 606, “Revenue From Contracts With Customers” (“ASC 606”)and generally do not require significant estimates or judgments based on the nature of the Company’s revenue streams. The salesprices are generally fixed at the point of sale and all consideration from contracts is included in the transaction price. The Company’scontracts do not include multiple performance obligations or material variable consideration.
Inaccordance with ASC 606, the Company recognizes revenue to depict the transfer of promised goods or services to customers in an amountthat reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company recognizesrevenue in accordance with that core principle by applying the following:
| (i) | Identify the contract(s) with a customer; |
| (ii) | Identify the performance obligation in the contract; |
| (iii) | Determine the transaction price; |
| (iv) | Allocate the transaction price to the performance obligations in the contract; and |
| (v) | Recognize revenue when (or as) the Company satisfies a performance obligation. |
TheCompany primarily generates revenue by purchasing scrap metal from businesses and retail suppliers, processing it, and selling the ferrousand non-ferrous metals to customers. The Company also provides hauling services to certain corporate clients. The Company realizes revenueupon the fulfilment of its performance obligations to customers.
AccountsReceivable
Accountsreceivable represent amounts primarily due from customers on products and services rendered. These accounts receivable, which are reducedby an allowance for credit losses, are recorded at the invoiced amount and do not bear interest. The Company extends credit to customersunder contracts containing customary and explicit payment terms, and payment is generally required within 1 to 30 days of shipment orthe services being rendered.
| 8 |
TheCompany evaluates the collectability of its accounts receivable based on a combination of factors, including whether sales, the agingof customer receivable balances, historical collection rates, and economic trends. Management uses this evaluation to estimate the amountof customer receivables that may not be collected in the future and records a provision for expected credit losses. Accounts are writtenoff when all efforts to collect have been exhausted. As of March 31, 2025 and December 31, 2024, the accounts receivable balances amountedto $
Inventories
Althoughwe ship the ferrous and non-ferrous metals we purchase from suppliers multiple times per day, we do maintain inventories. We calculatethe value of the inventories on hand, which consist of processed and unprocessed scrap metal (ferrous and nonferrous), used and salvagedvehicles, and supplies, based on the net realizable value or the cost of the inventories, whichever is less. We calculate the cost ofthe inventory based on the first-in-first-out (FIFO) methodology. We calculate the value of finished products based on their net realizablevalue as their cost basis is not readily available. The value of our inventories was $
Advertising
TheCompany charges the costs of advertising to expense as incurred. Advertising costs were $
Stock-basedcompensation expense is measured at the grant date fair value of the award and is expensed over the requisite service period. For stock-basedawards to employees, non-employees and directors, the Company calculates the fair value of the award on the date of grant using the Black-Scholesoption pricing model. Determining the fair value of stock-based awards at the grant date under this model requires judgment, includingestimating volatility, employee stock option exercise behaviors and forfeiture rates. The assumptions used in calculating the fair valueof stock-based awards represent the Company’s best estimates, but these estimates involve inherent uncertainties and the applicationof management’s judgment.
IncomeTaxes
TheCompany follows ASC Subtopic 740-10, “Income Taxes” (“ASC 740-10”) for recording the provision for income taxes.Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assetsand liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled.Deferred income tax expenses or benefits are based on the changes in the asset or liability during each period.
Ifavailable evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized,a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Futurechanges in such valuation allowance are included in the provision for deferred income taxes in the period of change. Deferred incometaxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposesin different periods.
| 9 |
DeemedDividends
TheCompany records, when necessary, deemed dividends for: (i) warrant price protection, based on the difference between the fair value ofthe warrants immediately before and after the repricing (inclusive of any full ratchet provisions); (ii) the exchange of preferred sharesfor convertible notes, based on the amount of the face value of the convertible notes in excess of the carrying value of the preferredshares; (iii) the settlement of warrant provisions, based on the fair value of the common shares issued; and (iv) amortization of discounton preferred stock resulting from recognition of a beneficial conversion feature.
EnvironmentalRemediation Liability
Theoperations of the Company, like those of other companies in its industry, are subject to various domestic and foreign environmental lawsand regulations. These laws and regulations not only govern current operations and products, but also impose potential liability on theCompany for past operations. Management expects environmental laws and regulations to impose increasingly stringent requirements uponthe Company and the industry in the future. Management believes that the Company conducts its operations in compliance with applicableenvironmental laws and regulations and has implemented various programs designed to protect the environment and promote continued compliance.
TheCompany continuously assesses its potential liability for remediation-related activities and adjusts its environmental-related accrualsas information becomes available upon which more accurate costs can be reasonably estimated and as additional accounting guidelines areissued. At March 31, 2025 and December 31, 2024, the Company had accruals reported on the balance sheet as current liabilities of $
Actualcosts incurred may vary from the accrued estimates due to the inherent uncertainties involved including, among others, the nature andmagnitude of the wastes involved, the various technologies that can be used for remediation and the determination of acceptable remediationwith respect to a particular site. Additionally, costs for environmental-related activities may not be reasonably estimable and thereforewould not be included in our current liabilities.
Long-LivedAssets
TheCompany reviews its property and equipment and any identifiable intangibles for impairment whenever events or changes in circumstancesindicate that the carrying amount of an asset may not be recoverable. The test for impairment is required to be performed by managementat least annually. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to thefuture undiscounted operating cash flow expected to be generated by the asset. If such assets are considered to be impaired, the impairmentto be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Long-livedassets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell. Intangible assets are statedat cost and reviewed annually to examine any impairments, usually assuming an estimated useful life of five to
SegmentReporting
TheCompany determines its operating segments in accordance with ASC 280, as updated by ASU 2023-07, Segment Reporting (Topic 280): Improvementsto Reportable Segment Disclosures. Operating segments are defined as components of the business for which discrete financial informationis available and that are regularly reviewed by the Chief Executive Officer, the Company’s chief operating decision maker (“CODM”),in assessing performance and allocating resources.
Inaccordance with ASU 2023-07, the Company has evaluated the nature of information regularly provided to the CODM, including measures ofprofit or loss and resource allocation. The CODM reviews financial information on a consolidated basis, and the Company operates as asingle reportable segment that reflects its core business operations. The Company adopted ASU 2023-07 for the year ended December 31,2024. Additional information is provided in Note 19 – Segment Reporting.
TheCompany computes earnings (loss) per share under ASC subtopic 260-10, Earnings Per Share. Net loss per common share is computed by dividingnet loss by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per share, if presented,would include the dilution that would occur upon the exercise or conversion of all potentially dilutive securities into common stockusing the “treasury stock” and/or “if converted” methods, as applicable.
| 10 |
Thecomputation of basic and diluted income (loss) per share, for the three months ended March 31, 2025 and 2024 excludes potentially dilutivesecurities when their inclusion would be anti-dilutive, or if their exercise prices were greater than the average market price of thecommon stock during the period.
| March 31, | March 31, | |||||||
| 2025 | 2024 | |||||||
| Common shares issuable upon conversion of convertible notes | ||||||||
| Options to purchase common shares | ||||||||
| Warrants to purchase common shares | ||||||||
| Common shares issuable upon conversion of preferred stock | ||||||||
| Total potentially dilutive shares | ||||||||
OnMay 31, 2024, the Company completed
On August20, 2025, the Company completed a
RecentAccounting Pronouncements
IncomeTaxes
InDecember 2023, the FASB issued Accounting Standards Update No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures(“ASU 2023-09”). ASU 2023-09 requires enhanced disclosures surrounding income taxes, particularly related to rate reconciliationand income taxes paid information. In particular, on an annual basis, companies will be required to disclose specific categories in therate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. Companies will alsobe required to disclose, on an annual basis, the amount of income taxes paid, disaggregated by federal, state, and foreign taxes, andalso disaggregated by individual jurisdictions above a quantitative threshold. The standard is effective for the Company for annual periodsbeginning January 1, 2025 on a prospective basis, with retrospective application permitted for all prior periods presented. The Companywill adopt ASU 2023-09 for the annual period ending December 31, 2025 and is currently evaluating the impact of this guidance on itsdisclosures.
SegmentReporting
InNovember 2023, the FASB issued Accounting Standards Update No. 2023-07, Segment Reporting (Topic 280): Improvements to ReportableSegment Disclosures (“ASU 2023-07”). ASU 2023-07 requires enhanced disclosures surrounding reportable segments, particularly(i) significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and includedin the reported measure(s) of a segment’s profit and loss and (ii) other segment items that reconcile segment revenue and significantexpenses to the reported measure(s) of a segment’s profit and loss, both on an annual and interim basis. Companies are also requiredto provide all annual disclosures currently required under Topic 280 in interim periods, in addition to disclosing the title and positionof the CODM and how the CODM uses the reported measure(s) of segment profit and loss in assessing segment performance and allocatingresources. The Company adopted ASU 2023-07 for the year ended December 31, 2024.
| 11 |
Disaggregationof Income Statement Expenses
InNovember 2024, the FASB issued Accounting Standards Update No. 2024-03, Income Statement - Reporting Comprehensive Income - ExpenseDisaggregation Disclosures (Subtopic 220-40) (“ASU 2024-03”). ASU 2024-03 requires specified information about certaincosts and expenses be disclosed in the notes to the financial statements, including the expense caption on the face of the income statementin which they are disclosed, in addition to a qualitative description of remaining amounts not separately disaggregated. Entities willalso be required to disclose their definition of “selling expenses” and the total amount in each annual period. The standardis effective for the Company for annual periods beginning January 1, 2027 and for interim periods beginning January 1, 2028, with updatesapplied either prospectively or retrospectively. Early adoption is permitted. The Company is currently evaluating the impact of thisguidance on its disclosures.
Thereare other various updates recently issued, most of which represented technical corrections to the accounting literature or applicationto specific industries and are not expected to have a material impact on the Company’s financial position, results of operationsor cash flows.
NOTE4 – CONCENTRATIONS OF RISK
Costof Revenues
Duringthe three months ended March 31, 2024, supplier accounted for more than %of the Company’s cost of revenues.
Duringthe three months ended March 31, 2025, one supplier accounted for $,or approximately %of the Company’s cost of revenues.
AccountsReceivable
TheCompany has a concentration of credit risk with its accounts receivable balance. At December 31, 2024, six certain large customers individuallyaccounted for $
AtMarch 31, 2025, six large customers individually accounted for $
CustomerConcentrations
TheCompany has a concentration of customers. For the three months ended March 31, 2024, two customers individually accounted for $
Forthe three months ended March 31, 2025, two customers individually accounted for $
TheCompany’s sales are concentrated in the Virginia and northeastern North Carolina markets.
NOTE5 – INVENTORIES
Inventoriesconsisted of the following as of:
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Processed and unprocessed scrap metal | $ | $ | ||||||
| Finished products | ||||||||
| Inventories | $ | $ | ||||||
NOTE6 – PROPERTY AND EQUIPMENT
OnDecember 2, 2024, the Company entered into a Contract of Sale (the “Contract of Sale”) with DWM Properties LLC (“DWM”),KPAJ, LLC and Oceana Salvage Properties, L.L.C. (collectively, the “Sellers”), in each case, an entity affiliated with DannyMeeks, the Company’s Chief Executive Officer, pursuant to which the Company agreed to purchase the Premises (as defined in theContract of Sale) held by the Sellers for an aggregate purchase price of $
| 12 |
Thepurchase price is paid by (i) the issuance of an aggregate of shares of Series A-1 Preferred Stock of the Company, par value$per share (the “Preferred Stock”), to the Sellersat an aggregate valuation of $
Propertyand equipment as of March 31, 2025 and December 31, 2024 is summarized as follows:
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Machinery & Equipment | $ | $ | ||||||
| Furniture & Fixtures | ||||||||
| Vehicles | ||||||||
| Leaseholder Improvement | ||||||||
| Land | ||||||||
| Buildings | ||||||||
| Subtotal | ||||||||
| Less accumulated depreciation | ( | ) | ( | ) | ||||
| Property and equipment, net | $ | $ | ||||||
Depreciationexpense for the three months ended March 31, 2025 and 2024 was $
During the three months ended March 31, 2025, theCompany settled $
NOTE7 – AMORTIZATION OF INTANGIBLE ASSETS
Allof the Company’s current identified intangible assets were assumed upon consummation of the Empire acquisition on October 1, 2021.Identified intangible assets consisted of the following at the dates indicated below:
| March 31, 2025 | Remaining | |||||||||||||||
| Gross carrying | Accumulated | Carrying | estimated | |||||||||||||
| amount | amortization | value | useful life | |||||||||||||
| Intellectual Property | $ | $ | ( | ) | $ | |||||||||||
| Customer List | ( | ) | ||||||||||||||
| Licenses | ( | ) | ||||||||||||||
| Total intangible assets, net | $ | $ | ( | ) | $ | |||||||||||
| December 31, 2024 | Remaining | |||||||||||||||
| Gross carrying | Accumulated | Carrying | estimated | |||||||||||||
| amount | amortization | value | useful life | |||||||||||||
| Intellectual Property | $ | $ | ( | ) | $ | |||||||||||
| Customer List | ( | ) | ||||||||||||||
| Licenses | ( | ) | ||||||||||||||
| Total intangible assets, net | $ | $ | ( | ) | $ | |||||||||||
| 13 |
Therewere
Amortizationexpense for intangible assets was $
| Year ended December 31, | ||||
| 2025 (remaining) | $ | |||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| Thereafter | ||||
NOTE8 – ADVANCES AND NON-CONVERTIBLE NOTES PAYABLE
FactoringAdvances
OnFebruary 1, 2024, the Company entered into a revenue factoring advance in the principal amount of $
OnFebruary 7, 2024, the Company entered into a revenue factoring advance in the principal amount of $
OnFebruary 29, 2024, the Company entered into a revenue factoring advance in the principal amount of $
OnMarch 7, 2024, the Company entered into a revenue factoring advance in the principal amount of $
OnMarch 7, 2024, the Company entered into a revenue factoring advance in the principal amount of $
Theremaining advances were for Simple Agreements for Future Tokens, entered into with accredited investors issued pursuant to an exemptionfrom the registration requirements of the Securities Act of 1933, as amended, by virtue of Section 4(a)(2) thereof and/or RegulationD thereunder in 2018. As of March 31, 2025 and December 31, 2024, the Company owed $
| 14 |
Non-ConvertibleNotes Payable
OnApril 11, 2022, the Company entered into a vehicle financing agreement with GM Financial for the purchase of a vehicle for use by theCompany’s Chief Executive Officer in the principal amount of $
OnApril 21, 2022, the Company entered into a secured promissory note in the principal amount of $
OnSeptember 1, 2022, the Company entered into a Deed of Trust note for the purchase of land and buildings. The note has a principal amountof $
OnSeptember 1, 2022, the Company entered into a Deed of Trust note for the purchase of land and buildings. The note has a principal amountof $
OnSeptember 14, 2022, the Company entered into a secured promissory note in the principal amount of $
| 15 |
OnNovember 28, 2022, the Company entered into a secured promissory note in the principal amount of $
OnNovember 28, 2022, the Company entered into a secured promissory note in the principal amount of $
OnNovember 28, 2022, the Company entered into a secured promissory note in the principal amount of $
OnDecember 15, 2022, the Company entered into a secured promissory note in the principal amount of $
OnJanuary 10, 2023, the Company entered into a secured promissory note in the principal amount of $
OnJanuary 12, 2023, the Company entered into a secured promissory note in the principal amount of $
| 16 |
OnFebruary 23, 2023, the Company entered into a secured promissory note in the principal amount of $
OnFebruary 24, 2023, the Company entered into a secured promissory note in the principal amount of $
OnApril 12, 2023, the Company entered into a secured promissory note in the principal amount of $
OnJuly 31, 2023, the Company entered into a secured promissory note with an entity controlled by the Company’s Chief Executive Officerin the principal amount of $
| 17 |
OnDecember 2, 2024, the Company entered into a secured promissory note with an entity controlled by the Company’s Chief ExecutiveOfficer in the principal amount of $
OnFebruary 3, 2025, the Company entered into a secured promissory note in the principal amount of $
OnFebruary 3, 2025, the Company entered into a secured promissory note in the principal amount of $
OnFebruary 3, 2025, the Company entered into a secured promissory note in the principal amount of $
OnFebruary 3, 2025, the Company entered into a secured promissory note in the principal amount of $
Thefollowing table details the current and long-term principal due under non-convertible notes as of March 31, 2025.
| Principal | Principal | |||||||
| (Current) | (Long Term) | |||||||
| GM Financial (Issued April 11, 2022) | $ | $ | ||||||
| Non-Convertible Note (Issued March 8, 2019) | ||||||||
| Deed of Trust Note (Issued September 1, 2022) | ||||||||
| Deed of Trust Note (Issued September 1, 2022) | ||||||||
| Equipment Finance Note (Issued April 21, 2022) | ||||||||
| Equipment Finance Note (Issued September 14, 2022) | ||||||||
| Equipment Finance Note (Issued November 28, 2022) | ||||||||
| Equipment Finance Note (Issued November 28, 2022) | ||||||||
| Equipment Finance Note (Issued November 28, 2022) | ||||||||
| Equipment Finance Note (Issued December 15, 2022) | ||||||||
| Equipment Finance Note (Issued January 10, 2023) | ||||||||
| Equipment Finance Note (Issued January 12, 2023) | ||||||||
| Equipment Finance Note (Issued February 24, 2023) | ||||||||
| Equipment Finance Note (Issued February 23, 2023) | ||||||||
| Equipment Finance Note (Issued April 12, 2023) | ||||||||
| Equipment Finance Note (Issued February 3, 2025) | ||||||||
| Equipment Finance Note (Issued February 3, 2025) | ||||||||
| Equipment Finance Note (Issued February 3, 2025) | ||||||||
| Equipment Finance Note (Issued February 3, 2025) | ||||||||
| SAFTs | ||||||||
| DWM Property Note | ||||||||
| Debt Discount | ( | ) | ( | ) | ||||
| Total Principal of Non-Convertible Notes | $ | $ | ||||||
Totalprincipal payments due on non-convertible notes for 2025 through 2028 and thereafter is as follows:
| Year ended December 31, | ||||
| 2025 | $ | |||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| Thereafter | ||||
| 18 |
NOTE9 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Asof March 31, 2025 and December 31, 2024, the Company owed accounts payable and accrued expenses of $
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Accounts Payable | $ | $ | ||||||
| Credit Cards | ||||||||
| Accrued Interest | ||||||||
| Accrued Expenses | ||||||||
| Total Accounts Payable and Accrued Expenses | $ | $ | ||||||
NOTE10 – ACCRUED PAYROLL AND RELATED EXPENSES
TheCompany is delinquent in filing its payroll taxes, primarily related to stock compensation awards in 2016 and 2017, but also includingpayroll for 2018, 2019, 2020, and 2021. As of March 31, 2025 and December 31, 2024, the Company owed payroll tax liabilities, includingpenalties, of $
NOTE11 – COMMITMENTS AND CONTINGENCES
Fromtime to time, we may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. Litigationis subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.Except as set forth below, we are currently not aware of any such legal proceedings or claims that will have, individually or in theaggregate, a material adverse effect on our business, financial condition or operating results.
OnOctober 25, 2024, Arena Special Opportunities Fund, LP and other related entities (“Arena”) filed a lawsuit in New York StateCourt (the “Action”). The complaint for the lawsuit alleges, among other things, a purported breach of contract based onan alleged equity conditions failure. The Company believes that the Action lacks merit. In the event this Action is not summarily dismissed,the Company intends to vigorously defend against it.
Aspreviously reported on September 13, 2024, the Company received written notice (the “Notice”) from The Nasdaq Listing QualificationDepartment (“Nasdaq”) notifying the Company that it was not in compliance with the $minimum bid price requirement set forth in Nasdaq Listing Rule5550(a)(2) for continued listing on the Nasdaq Capital Market (the “Minimum Bid Price Requirement”), as the closing bid priceof the Company’s common stock had been below $per share for 30 consecutive business days. The Notice indicatedthat the Company has 180 calendar days, or until March 12, 2025, to regain compliance with the Minimum Bid Price Requirement.
OnMarch 13, 2025, Nasdaq notified the Company that although the Company has not regained compliance with the Minimum Bid Price Requirement,the Company is eligible to receive an additional 180 calendar day period or until September 8, 2025, to regain compliance with the MinimumBid Price Requirement, pursuant to Nasdaq Listing Rule 5810(a)(3)(A).
| 19 |
Nasdaq’sdetermination to grant the Company an additional 180 calendar day period was based on the Company’s satisfaction of the continuedlisting requirements for the market value of publicly held shares and all other applicable requirements for initial listing on the NasdaqCapital Market, with the exception of the Minimum Bid Price Requirement. Additionally, the Company has provided Nasdaq with written noticeof its intention to cure the deficiency during the second compliance period, potentially by implementing a reverse stock split, if necessary.
OnSeptember 9, 2025, The Company received formal notice from the Staff of the Listing Qualifications Department of The Nasdaq Stock MarketLLC that the Company had regained compliance with the minimum bid price requirement under Nasdaq Listing Rule 5550(a)(2).
OnMay 23, 2025, the Company received a notice from the Listing Qualifications Department of the Nasdaq Stock Market LLC regarding the Company’sfailure to timely file its Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2025 (the “Q1 Form 10-Q”)with the U.S. Securities and Exchange Commission. The Company previously submitted a plan to Nasdaq to regain compliance with respectto the delinquent Q1 Form 10-Q, and Nasdaq granted the Company an exception until August 22, 2025, to evidence compliance with NasdaqListing Rule 5250(c)(1).
On August 22, 2025, the Company receivedan additional delinquency notification letter from Nasdaq due to the Company’s failure to timely file its Quarterly Report on Form10-Q for the fiscal quarter ended June 30, 2025. The Staff informed the Company that is has until September 8, 2025 to submit an updatedplan to regain compliance with the Rule. On September 5, 2025, the Company submitted its revised plan to Nasdaq to regain compliance,and Nasdaq accepted its plan to evidence compliance by 180 calendar days from the Q1 Form 10-Q’s due date, or until November 17,2025.
NOTE12 – LEASES
PropertyLeases (Operating Leases)
TheCompany leases its facilities and certain automobiles under operating leases which expire on various dates through 2028. The Companydetermines if an arrangement is a lease at inception and whether it is a finance or operating leases. Right of Use (“ROU”)assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the obligationto make lease payments from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date of the leasebased on the present value of lease payments over the lease term. When readily determinable, the Company uses the implicit rate in determiningthe present value of lease payments. The ROU asset also includes any fixed lease payments, including in-substance fixed lease paymentsand excludes lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Lease termis determined at lease commencement and includes any non-cancellable period for which the Company has the right to use the underlyingasset, together with any options to extend that the Company is reasonably certain to exercise.
OnJanuary 24, 2022, theCompany entered into leasing agreements for
| 20 |
OnMarch 15, 2024,
AutomobileLeases (Operating Leases)
Uponeffectiveness of the acquisition of Empire on October 1, 2021, the Company assumed $
OnDecember 23, 2021, Empire entered into a lease agreement for the leasing of an automobile. Under the terms of the lease, Empire was requiredto pay $
ROUassets and liabilities consist of the following:
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| ROU assets – related party | $ | $ | ||||||
| ROU assets | ||||||||
| Total ROU assets | $ | $ | ||||||
| Current portion of lease liabilities – related party | $ | $ | ||||||
| Current portion of lease liabilities | ||||||||
| Long term lease liabilities, net of current portion | ||||||||
| Total lease liabilities | $ | $ | ||||||
| 21 |
Aggregateminimum future commitments under non-cancelable operating leases and other obligations at December 31, 2024 were as follows:
| Year ended December 31, | ||||
| 2025 | $ | |||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Total Minimum Lease Payments | $ | |||
| Less: Imputed Interest | $ | |||
| Present Value of Lease Payments | $ | |||
| Less: Current Portion | $ | - | ||
| Long Term Portion | $ | |||
TheCompany leases its facilities, automobiles, and offices under operating leases which expire on various dates through 2024. Rent expenserelated to these leases is recognized based on the payment amount charged under the lease. Rent expense for the three months ended March31, 2025 and 2024 was $
NOTE13 – CONVERTIBLE NOTES PAYABLE
OnJuly 3, 2023, the Company closed a bridge financing in the principal amount of $
OnJuly 31, 2023, the Company entered into a Purchase Agreement with certain institutional investors as purchasers whereby, the Companysold, and the investors purchased, approximately $
| 22 |
TheCompany estimated the fair value of the warrants using the Black-Scholes Pricing Model based on the following assumptions: (1) dividendyield of
OnAugust 21, 2023, as a result of the Company’s registered direct offering, the conversion price of the Senior Notes was reducedfrom $
OnMarch 18, 2024, the Company obtained the waiver of the following covenants from holders of the notes: (i) until September 30, 2024, theAvailable Cash Test covenant contained in Section 14(t)(i) of the Notes; (ii) the right to receive the Amortization Amount for the nextfour (4) consecutive Amortization Dates immediately following the date of the waiver, with the aggregate of such Amortization Amountsnow instead being due on the Maturity Date; and (iii) notwithstanding anything to the contrary set forth in the Notes, through and includingthe sixtieth (60) calendar day following the date of the waiver, (A) if the average closing price on the Eligible Market of the CommonStock on the three (3) most recent Trading Days is less than $
OnMarch 18, 2024, as a result of the Company’s warrant inducement, the conversion price of the Senior Notes was reduced from $
OnMay 3, 2024, the Company entered into an amendment to its senior secured convertible promissory note originally signed July 31, 2023.The amendment, among other things, changed the conversion price of the senior notes to $
OnMay 9, 2024, the Company and the Investors entered into a Waiver Agreement (the “Waiver Agreement”), pursuant to which theCompany and the Investors decided to waive the Conversion Prohibition in the March Consent and Waiver.
Duringthe year ended December 31, 2024, there was amortization of debt discount $
| 23 |
Asof December 31, 2024 and 2023, the carrying value of the convertible notes was $
Asof December 31, 2024, the current and non-current portions of the note were $
NOTE14 – DERIVATIVE LIABILITIES AND FAIR VALUE MEASUREMENTS
OnMay 16, 2024 as a result of the issuance of additional warrants under the security purchase agreements, the Company no longer had sufficientauthorized shares in the event that all potentially dilutive instruments were exercised. As a result, the Company evaluated the warrantsissued under ASC 480 and determined that certain warrants no longer qualified as equity instruments and qualify for derivative liabilitytreatment. The Company elected to use a first-in, first-out sequencing method to determine which dilutive instruments met the definitionof a derivative liability.
TheCompany estimated the fair value of the initial derivative liability using the Black-Scholes Pricing Model based on the following assumptions:(1) dividend yield of
TheCompany estimated the fair value of the derivative liability upon the settlement date using the Black-Scholes Pricing Model based onthe following assumptions: (1) dividend yield of
TheCompany adopted the provisions of ASC 825-10. ASC 825-10 defines fair value as the price that would be received from selling an assetor paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fairvalue measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principalor most advantageous market in which it would transact and considers assumptions that market participants would use when pricing theasset or liability, such as inherent risk, transfer restrictions, and risk of non-performance. ASC 825-10 establishes a fair value hierarchythat requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.ASC 825-10 establishes three levels of inputs that may be used to measure fair value:
| ● | Level 1 – Quoted prices in active markets for identical assets or liabilities. |
| ● | Level 2 – Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities. |
| ● | Level 3 – Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities. |
Allitems required to be recorded or measured on a recurring basis are based upon Level 3 inputs.
Tothe extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fairvalue requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair valuehierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosedand is determined based on the lowest level input that is significant to the fair value measurement.
TheCompany recognizes its derivative liabilities as Level 3 and values its derivatives using the methods discussed below. While the Companybelieves that its valuation methods are appropriate and consistent with other market participants, it recognizes that the use of differentmethodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fairvalue at the reporting date. The primary assumptions that would significantly affect the fair values using the methods discussed arethat of volatility and market price of the underlying common stock of the Company.
| 24 |
Asof March 31, 2025, the Company did not have any derivative instruments that were designated as hedges.
Itemsrecorded or measured at fair value on a recurring basis in the accompanying consolidated financial statements consisted of the followingitems as of March 31, 2025 and December 31, 2024:
| Quoted Prices | Significant | |||||||||||||||
| in Active | Other | Significant | ||||||||||||||
| Markets for | Observable | Unobservable | ||||||||||||||
| March 31, | Identical Assets | Inputs | Inputs | |||||||||||||
| 2025 | (Level 1) | (Level 2) | (Level 3) | |||||||||||||
| Derivative liability | $ | $ | $ | $ |
| Quoted Prices | Significant | |||||||||||||||
| in Active | Other | Significant | ||||||||||||||
| Markets for | Observable | Unobservable | ||||||||||||||
| December 31, | Identical Assets | Inputs | Inputs | |||||||||||||
| 2024 | (Level 1) | (Level 2) | (Level 3) | |||||||||||||
| Derivative liability | $ | $ | $ | $ |
Thefollowing table provides a summary of changes in fair value of the Company’s Level 3 financial liabilities for the three monthsended March 31, 2025 and the year ended December 31, 2024:
| Balance, December 31, 2023 | $ | |||
| Establishment of derivative liability upon authorized share shortfall | ||||
| Gain on change in fair value of derivative liability | ( | ) | ||
| Settlement of derivative liability upon correction of authorized share shortfall | ( | ) | ||
| Mark to market to December 31, 2024 | ||||
| Balance, December 31, 2024 | $ | |||
| Mark to market to March 31, 2025 | ||||
| Balance, March 31, 2025 | $ |
Fluctuationsin the Company’s stock price are a primary driver for the changes in the derivative valuations during each reporting period. Asthe stock price increases/(decreases) for each of the related derivative instruments, the value to the holder of the instrument generallyincreases/(decreases), therefore increasing/(decreasing) the liability on the Company’s balance sheet. Decreases in the conversionprice of the Company’s convertible notes are another driver for the changes in the derivative valuations during each reportingperiod. As the conversion price decreases for each of the related derivative instruments, the value to the holder of the instrument (especiallythose with full ratchet price protection) generally increases, therefore increasing the liability on the Company’s balance sheet.Additionally, stock price volatility is one of the significant unobservable inputs used in the fair value measurement of each of theCompany’s derivative instruments. The simulated fair value of these liabilities is sensitive to changes in the Company’sexpected volatility. Increases in expected volatility would generally result in higher fair value measurements. A 10% change in pricinginputs and changes in volatilities and correlation factors would not result in a material change in our Level 3 fair value.
| 25 |
NOTE15 – STOCKHOLDERS’ EQUITY
PreferredStock
TheCompany is authorized to issue shares of blank check preferred stock, par value $per share.
SeriesD
OnMarch 29, 2024, the Company authorized the issuance of shares of Series D Preferred Stock, par value $per share (the “Series D”). The Series D has a$
OnMarch 29, 2024, the Company entered into an exchange agreement with DWM Properties LLC (“DWM”), whereby the Company and DWMagreed to exchange $
OnMay 10, 2024, the Company entered into an exchange agreement with DWM, whereby the Company and DWM agreed to exchange shares of the Company’s Series D issued by the Companyto DWM, for shares of the Company’s common stock. As a result ofthe transaction, the Series D stock were extinguished. The resulting gain on the transaction of $
OnMay 28, 2024, the Company filed a Certificate of Elimination to retire the class of Series D preferred stock.
Asof March 31, 2025, there were shares of Series D issued and outstanding.
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SeriesA-1
OnNovember 15, 2024, the Company authorized the issuance of shares of Series A-1 Preferred Stock, par value $per share. The Series A-1 Preferred Stock has a $stated value per share and each share is convertible into commonstock at
OnDecember 2, 2024, the Company issued shares of Series A-1 Preferred Stock as consideration for landand permits purchased from DWM Properties, LLC, controlled by the Company’s Chief Executive Officer. The value of the shares ofSeries A-1 was calculated on an as-converted basis at $
Asof March 31, 2025, there were shares of Series A-1 Preferred Stock issued and outstanding.
CommonStock
TheCompany is authorized to issue shares of common stock, par value $per share.
Duringthe year ended December 31, 2024, the Company issued shares of common stock pursuant to purchase agreements forcash proceeds of $
Duringthe year ended December 31, 2024, the Company issued shares pursuant to the exercise of warrants for cash proceedsof $
Duringthe year ended December 31, 2024, the Company issued shares pursuant to the cashless exercise of warrants.
Duringthe year ended December 31, 2024, the Company issued shares as an adjustment to round-up fractional shares for thereverse-split.
Duringthe year ended December 31, 2024, the Company issued shares for the exchange of Series D Preferred Stock.
Duringthe year ended December 31, 2024, the Company issued shares for the exchange and retirement of a related-party debtnote in the principal amount of $
Duringthe year ended December 31, 2024, the Company issued shares of common stock for the conversion of debt in the principalamount of $
Duringthe year ended December 31, 2024, the Company issued with a value of $
Duringthe three months ended March 31, 2025, the Company issued shares of common stock for services rendered.
Duringthe three months ended March 31, 2025, the Company issued
Duringthe three months ended March 31, 2025, the Company issued sharesof common stock and warrants pursuant to purchase agreements for total cash proceeds of approximately $
Asof March 31, 2025 and December 31, 2024 there were and sharesof common stock issued and outstanding, respectively.
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AdditionalPaid in Capital
Duringthe year ended December 31, 2024, the Company credited additional paid in capital $
Duringthe year ended December 31, 2024, the Company credited additional paid in capital $
Duringthe year ended December 31, 2024, the Company credited additional paid in capital $
Duringthe year ended December 31, 2024, the Company credited additional paid in capital $
Duringthe year ended December 31, 2024, the Company credited additional paid in capital $
OnMay 16, 2024 as a result of the issuance of additional warrants under the security purchase agreements, the Company no longer had sufficientauthorized shares in the event that all potentially dilutive instruments were exercised. The Company accounted for the warrants affectedunder a sequencing approach as a derivative liability under ASC 815 due to the lack of net share settlement. The Company debited additionalpaid in capital $
Duringthe three months ended March 31, 2025, the Company credited additional paid-in capital approximately $9.1million related to the issuance of common stock and warrants pursuant to purchase agreements for cash, net of offeringcosts.
Duringthe three months ended March 31, 2025, the Company recorded a deemed dividend of approximately $
Duringthe three months ended March 31, 2025, the Company recognized $
During the three months ended March 31, 2025, theCompany recognized $
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NOTE16 – WARRANTS
Duringthe year ended December 31, 2024, the Company entered into warrant exercise inducement offer letters with the holders of its existingwarrants, pursuant to which it issued
Duringthe year ended December 31, 2024, the Company issued
Duringthe year ended December 31, 2024, and prior to the Reverse Stock Split, the Company issued warrants to purchase common stock in connection with the securitypurchase agreements described above. The warrants have a term of 5 years and were granted with exercise prices between $
Asa result of the Reverse Stock Split on May 31, 2024, the Company issued additional warrants to purchase shares of common stock pursuantto the reverse-split price protection clauses contained within the warrants, sucGreeh that the exercise price of the warrant would be resetto the volume weighted average price following a reverse-split and the number of shares issuable under the warrant would also increase..
Duringthe year ended December 31, 2024, warrants were exercised on a cashless basis for shares of common stock.
During the three monthsended March 31, 2025, the Company entered into exchange agreements with holders of
Duringthe three months ended March 31, 2025, an additional warrants were cashlessly exercised into shares of common stock.
On January10, 2025, warrants were exercised into shares of common stock at an exercise price of $
On February10, 2025, warrants were exercised into shares of common stock at an exercise price of $
Asummary of the warrant activity for the three months ended March 31, 2025 is as follows:
| Weighted-Average | ||||||||||||||||
| Weighted-Average | Remaining | Aggregate | ||||||||||||||
| Shares | Exercise Price | Contractual Term | Intrinsic Value | |||||||||||||
| Outstanding at December 31, 2024 | $ | $ | ||||||||||||||
| Exercisable at December 31, 2024 | $ | $ | ||||||||||||||
| Granted | $ | |||||||||||||||
| Exercised | ( | ) | $ | |||||||||||||
| Cancelled/Exchanged | ||||||||||||||||
| Outstanding at March 31, 2025 | $ | $ | ||||||||||||||
| Exercisable at March 31, 2025 | $ | $ | ||||||||||||||
| Exercise | Warrants | Weighted Avg. | Warrants | ||||||||||||
| Price | Outstanding | Remaining Life | Exercisable | ||||||||||||
| $ | |||||||||||||||
Theaggregate intrinsic value of outstanding stock warrants was $based on warrants with an exercise price less than the Company’sstock price of $ asof March 31, 2025 which would have been received by the warrant holders had those holders exercised the warrants as of that date.
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Ourstockholders approved our 2014 Equity Incentive Plan in June 2014 (the “2014 Plan”), our 2015 Equity Incentive Plan in December2015 (the “2015 Plan”), our 2016 Equity Incentive Plan in October 2016 (“2016 Plan”), our 2017 Equity IncentivePlan in December 2016 (“2017 Plan”), our 2018 Equity Incentive Plan in June 2018 (the “2018 Plan”), our 2021Equity Incentive Plan in September 2021 (“2021 Plan”), our 2022 Equity Incentive Plan in November 2022, our 2023 Equity IncentivePlan in October 2023 (“2023 Plan”), and our 2024 Equity Incentive Plan in May 2024 (“2024 Plan”, and togetherwith the 2014 Plan, 2015 Plan, 2016 Plan, 2017 Plan, 2018 Plan, 2021 Plan, 2022 Plan, and 2023 Plan, the “Plans”). The Plansare identical, except for the number of shares reserved for issuance under each. In July 2024, shareholders amended our 2024 Plan toincrease the number of shares reserved for issuance thereunder by to a total of shares. As of March 31, 2025, the Company had granted an aggregateof securities under the Plans since inception, with shares available for future issuances.
ThePlans provide for the grant of incentive stock options to our employees and our subsidiaries’ employees, and for the grant of stockoptions, stock bonus awards, restricted stock awards, performance stock awards and other forms of stock compensation to our employees,including officers, consultants and directors. The Prior Plans also provide that the grant of performance stock awards may be paid outin cash as determined by the committee administering the Prior Plans.
Optionvaluation models require the input of highly subjective assumptions. The fair value of stock-based payment awards was estimated usingthe Black-Scholes option pricing model with a volatility figure derived from historical data. The Company accounts for the expected lifeof options based on the contractual life of the options.
Therewere no options issued during the three months ended March 31, 2025.
| Weighted-Average | ||||||||||||||||
| Weighted-Average | Remaining | Aggregate | ||||||||||||||
| Shares | Exercise Price | Contractual Term | Intrinsic Value | |||||||||||||
| Outstanding at December 31, 2024 | $ | $ | ||||||||||||||
| Exercisable at December 31, 2024 | $ | $ | ||||||||||||||
| Granted | ||||||||||||||||
| Exercised | ||||||||||||||||
| Forfeiture/Cancelled | ( | ) | $ | |||||||||||||
| Outstanding at March 31, 2025 | $ | $ | ||||||||||||||
| Exercisable at March 31, 2025 | $ | $ | ||||||||||||||
| Exercise | Number of | Remaining | Number of | ||||||||||
| Price | Options | Life In Years | Options Exercisable | ||||||||||
| $ | – | ||||||||||||
| $ | – | ||||||||||||
| $ | – | ||||||||||||
| $ | – | ||||||||||||
| $ | – | ||||||||||||
Theaggregate intrinsic value of outstanding stock options was $,based on options with an exercise price less than the Company’s stock price of $as of March 31, 2025, which would have been received by theoption holders had those option holders exercised their options as of that date.
Thefair value of all options that vested during the three months ended March 31, 2025 and 2024 was $and $,respectively. Unrecognized compensation expense was $as of March 31, 2025.
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NOTE18 – RELATED PARTY TRANSACTIONS
Agreementswith Danny Meeks and Affiliates of Danny Meeks
Related-PartyHauling, Mechanic, Equipment Rental, and Miscellaneous Services
Duringthe three months ended March 31, 2025 and 2024, the Company provided $
Duringthe three months ended March 31, 2025 and 2024, the Company paid an entity controlled by the Company’s Chief Executive Officer$
Duringthe three months ended March 31, 2025 and 2024, the Company paid entities controlled by the Company’s Chief Executive Officer $
NOTE19 – SEGMENT REPORTING
Greenwaveis organized into three operating segments based on our differentiated products – Scrap Metal Recycling, Hauling, and Other (primarilycomprised of rental income).
Wehave one reportable geographic segment: the United States of America as all of our scrap metal is sourced domestically.
OurChief Operating Decision Maker (“CODM”), Danny Meeks, Chairman and CEO, evaluates performance on both an operating segmentbasis and a consolidated basis, primarily using revenues, gross profit, and operating cash flows. These measures are used by the CODM,management, investors, lenders, and other external users of our financial statements to assess our operating performance and to compareresults to other companies in the metal recycling industry. Our CODM utilizes segment profit and loss in assessing segment performanceand in allocating resources among our operations.
Operatingexpenses, including selling, general and administrative expenses, depreciation and amortization, and other operating costs, are managedcentrally and are not allocated to individual operating segments. These expenses are not included in the information regularly providedto or reviewed by the CODM when evaluating segment performance or making resource allocation decisions. As such, consistent with therequirements of ASU 2023-07, we present operating expenses only in the “Total” column and do not disaggregate these expensesby segment.
Thefollowing tables provide our results by segment:
| Three Months Ended March 31, 2025 | ||||||||||||||||
| Scrap Metal | ||||||||||||||||
| Recycling | Hauling | Other | Total | |||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Cost of revenues | ( | ) | ( | ) | ( | ) | ||||||||||
| Gross Profit: | $ | $ | $ | $ | ||||||||||||
| Operating Expenses | $ | ( | ) | |||||||||||||
| Other Expenses | ( | ) | ||||||||||||||
| Deemed Dividends | ( | ) | ||||||||||||||
| Net loss available to common shareholders | $ | ( | ) | |||||||||||||
| Three Months Ended March 31, 2024 | ||||||||||||||||
| Scrap Metal | ||||||||||||||||
| Recycling | Hauling | Other | Total | |||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Cost of revenues | ( | ) | ( | ) | ( | ) | ||||||||||
| Gross Profit: | $ | $ | $ | $ | ||||||||||||
| Operating Expenses | $ | ( | ) | |||||||||||||
| Other Expenses | ( | ) | ||||||||||||||
| Deemed Dividends | ( | ) | ||||||||||||||
| Net loss available to common shareholders | $ | ( | ) | |||||||||||||
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NOTE20 – SUBSEQUENT EVENTS
On September 9, 2025, the Company received formal notice from the Staff of the Listing Qualifications Departmentof The Nasdaq Stock Market LLC that the Company had regained compliance with the minimum bid price requirement under Nasdaq Listing Rule5550(a)(2). As a result, the previously disclosed listing matter has been closed.
As previously disclosed on the Current Reporton Form 8-K of the Company, filed on May 30, 2025, the Company received a notice from the Listing Qualifications Department of the NasdaqStock Market LLC (“Nasdaq”) regarding the Company’s failure to timely file its Quarterly Report on Form 10-Q for thefiscal quarter ended March 31, 2025 (the “Q1 Form 10-Q”) with the U.S. Securities and Exchange Commission (the “SEC”).The Company previously submitted a plan to Nasdaq to regain compliance with respect to the delinquent Q1 Form 10-Q (the “Plan”),and Nasdaq granted the Company an exception until August 22, 2025, to evidence compliance with Nasdaq Listing Rule 5250(c)(1) (the “Rule”).
On August 22, 2025, the Company received an additionaldelinquency notification letter (the “Notice”) from Nasdaq due to the Company’s failure to timely file its QuarterlyReport on Form 10-Q for the fiscal quarter ended June 30, 2025 (the “Q2 Form 10-Q”, and together with the Q1 Form 10-Q, the“Delinquent Filings”). The Staff informed the Company that is has until September 8, 2025 to submit an updated plan to regaincompliance with the Rule. On September 5, 2025, the Company submitted its revised plan to Nasdaq to regain compliance, and Nasdaq acceptedits plan to evidence compliance by 180 calendar days from the Q1 Form 10-Q’s due date, or until November 17, 2025.
On August 26, 2025, the Company issued a pressrelease in accordance with Nasdaq Listing Rule 5810(b) announcing that the Company had received the Notice. A copy of the press releaseis attached hereto as Exhibit 99.1.
On July 10, 2025 and July 14, 2025, the boardof directors (the “Board”) of the Company established August 13, 2025 as the date of the Company’s 2025 annual meetingof stockholders (the “2025 Annual Meeting”) and set July 17, 2025 as the record date for determining stockholders who areeligible to receive notice of and vote at the 2025 Annual Meeting.
On August 13, 2025, the Company, held its 2025annual meeting of stockholders (the “Annual Meeting”), and a quorum for the transaction of business was present in personor represented by proxy. As of July 17, 2025, the record date for the Annual Meeting, shares of common stock, par value $per share of the Company (the “Common Stock”) and shares of Series A-1 Convertible Preferred Stock, par value $per share (the “Series A-1 Preferred Stock”) were issued and outstanding. Holders of Common Stock and Series A-1 PreferredStock (on an as converted to Common Stock basis) voted as a single class on each matter presented at the Annual Meeting. The holdersof Common Stock and Series A-1 Preferred Stock (on an as converted to Common Stock basis) voted on the several proposals, which are describedin more detail in our definitive proxy statement filed with the SEC on July 24, 2025.
OnMay 23, 2025, the Company received a staff determination letter (the “Letter”) from Nasdaq Listing Qualifications Staff (the“Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that because it has not yet filed itsForm 10-Q for the fiscal year ended March 31, 2025 (the “Filing”), Nasdaq has determined that the Company has failed to complywith the filing requirement set forth in Listing Rule 5250(c) (1) (the “Determination”).
As previously reported by the Company, on September13, 2024, the Company received written notice (the “Notice”) from The Nasdaq Listing Qualification Department (“Nasdaq”)notifying
On August 20, 2025, the Company filed a Certificateof Amendment (the “Certificate of Amendment”) to the Company’s Second Amended and Restated Certificate of Incorporation,as amended, to effect a reverse stock split of its issued common stock, par value $per share, in
On April21, 2025, the Company issued the shares that were held in abeyance as of March 31, 2025, and removed the corresponding liabilityof $
Subsequent to March 31, 2025, four shareholders cashlessly exercised warrants into shares of commonstock.
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ITEM2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Youshould read the following discussion and analysis in conjunction with our condensed consolidated financial statements and related notescontained in Part I, Item 1 of this Quarterly Report. Please also refer to the note about forward-looking information for informationon such statements contained in this Quarterly Report immediately preceding Part I, Item 1.
Overview
Wewere formed on April 26, 2013 as a technology platform developer under the name MassRoots, Inc. In October 2021, we changed our corporatename from “MassRoots, Inc.” to “Greenwave Technology Solutions, Inc.” We sold all of our social media assetson October 28, 2021 for cash consideration equal to $10,000 and have discontinued all operations related to our social media business.On September 30, 2021, we closed our acquisition of Empire Services, Inc. (“Empire”), which operates 13 metal recycling facilitiesin Virginia, North Carolina, and Ohio. The acquisition was effective October 1, 2021 upon the effectiveness of the Certificate of Mergerin Virginia.
Uponthe acquisition of Empire, we transitioned into the scrap metal industry which involves collecting, classifying and processing appliances,construction material, end-of-life vehicles, boats, and industrial machinery. We process these items by crushing, shearing, shredding,separating, and sorting, into smaller pieces and categorize these recycled ferrous, nonferrous, and mixed metal pieces based on densityand metal prior to sale. In cases of scrap cars, we remove the catalytic converters, aluminum wheels, and batteries for separate processingand sale prior to shredding the vehicle. We have designed our systems to maximize the value of metals produced from this process.
Weoperate an automotive shredder at our Kelford, North Carolina location and a second automotive shredder at our Carrollton, Virginia locationis expected to come online in the second quarter of 2024. Our shredders are designed to produce a denser product and, in concert withadvanced separation equipment, more refined recycled ferrous metals, which are more valuable as they require less processing to producerecycled steel products. In totality, this process reduces large metal objects like auto bodies into baseball-sized pieces of shreddedrecycled metal.
Theshredded pieces are then placed on a conveyor belt under magnetized drums to separate the ferrous metal from the mixed nonferrous metaland residue, producing consistent and high-quality ferrous scrap metal. The nonferrous metals and other materials then go through a numberof additional mechanical systems which separate the nonferrous metal from any residue. The remaining nonferrous metal is further processedto sort the metal by type, grade, and quality prior to being sold as products, such as zorba (mainly aluminum), zurik (mainly stainlesssteel), and shredded insulated wire (mainly copper and aluminum).
Oneof our main corporate priorities is to open a facility with rail or deep-water port access to enable us to efficiently transport ourproducts to domestic steel mills and overseas foundries. Because this would greatly expand the number of potential buyers of our processedscrap products, we believe opening a facility with port or rail access could result in an increase in both the revenue and profitabilityof our existing operations.
Empireis headquartered in Chesapeake, Virginia and employs 150 people as of November 19, 2025.
Productsand Services
Ourmain product is selling ferrous metal, which is used in the recycling and production of finished steel. It is categorized into heavymelting steel, plate and structural, and shredded scrap, with various grades of each of those categorizations based on the content, sizeand consistency of the metal. All of these attributes affect the metal’s value.
Wealso process nonferrous metals such as aluminum, copper, stainless steel, nickel, brass, titanium, lead, alloys and mixed metal products.Additionally, we sell the catalytic converters recovered from end-of-life vehicles to processors which extract the nonferrous preciousmetals such as platinum, palladium and rhodium.
Weprovide metal recycling services to a wide range of suppliers, including large corporations, industrial manufacturers, retail customers,and government organizations.
Pricingand Customers
Pricesfor our ferrous and nonferrous products are based on prevailing market rates and are subject to market cycles, worldwide steel demand,government regulations and policy, and supply of products that can be processed into recycled steel. Our main buyers adjust the pricesthey pay for scrap metal products based on market rates usually on a monthly or bi-weekly basis. We are usually paid for the scrap metalwe deliver to customers within 14 days of delivery.
Basedon any price changes from our customers or our other buyers, we in turn adjust the price for unprocessed scrap we pay suppliers in orderto manage the impact on our operating income and cash flows.
Thespread we are able to realize between the sales prices and the cost of purchasing scrap metal is determined by a number of factors, includingtransportation and processing costs. Historically, we have experienced sustained periods of stable or rising metal selling prices, whichallow us to manage or increase our operating income. When selling prices decline, we adjust the prices we pay customers to minimize theimpact to our operating income.
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Sourcesof Unprocessed Metal
Ourmain sources of unprocessed metal we purchase are end-of-life vehicles, old equipment, appliances and other consumer goods, and scrapmetal from construction or manufacturing operations. We acquire this unprocessed metal from a wide base of suppliers including largecorporations, industrial manufacturers, retail customers, and government organizations who unload their metal at our facilities or wepick it up and transport it from the supplier’s location. Currently, our operations and main suppliers are located in the HamptonRoads and northeastern North Carolina markets. As of the second quarter of 2023, the Company expanded our operations by opening a metalrecycling facility in Cleveland, Ohio.
Oursupply of scrap metal is influenced by the overall health of economic activity in the United States, changes in prices for recycled metal,and, to a lesser extent, seasonal factors such as severe weather conditions, which may prohibit or inhibit scrap metal collection.
Competition
Wecompete with several large, well-financed recyclers of scrap metal, steel mills which own their own scrap metal processing operations,and with smaller metal recycling companies. Demand for metal products is sensitive to global economic conditions, the relative valueof the U.S. dollar, and availability of material alternatives, including recycled metal substitutes. Prices for recycled metal are alsoinfluenced by tariffs, quotas, and other import restrictions, and by licensing and government requirements.
Weaim to create a competitive advantage through our ability to process significant volumes of metal products and utilize the technologysolutions, our use of processing and separation equipment, the number and location of our facilities, and the operating synergies wehave been able to develop based on our experience.
Forthe Three Months Ended March 31, 2025 and 2024
| For the three months ended March 31, | ||||||||||||||||
| 2025 | 2024 | $ Change | % Change | |||||||||||||
| Revenue | $ | 7,333,710 | $ | 8,504,777 | $ | (1,171,067 | ) | (13.77 | )% | |||||||
| Gross Profit | 3,486,663 | 3,264,261 | 222,402 | 6.81 | % | |||||||||||
| Operating Expenses | 7,368,170 | 6,075,985 | 1,292,185 | 21.27 | % | |||||||||||
| Loss from Operations | (3,881,507 | ) | (2,811,724 | ) | (1,069,783 | ) | (38.05 | )% | ||||||||
| Other Expense | (784,232 | ) | (5,250,790 | ) | 4,466,558 | (85.06 | )% | |||||||||
| Net Loss Available to Common Stockholders | $ | (7,665,703 | ) | $ | (33,460,778 | ) | $ | 25,795,075 | (77.09 | )% | ||||||
Revenues
Forthe three months ended March 31, 2025, we generated $7,333,710 in revenues, as compared to $8,504,777 during the same period in 2024,a decrease of $1,171,067. This decrease was primarily due to a decline in metal revenue.
Rentalincomes decreased by $6,500 from $30,500, to $24,000, metal revenues fell $1,822,840 from $6,220,385 to $4,397,545, and hauling revenuesgrew $658,272 from $2,253,892 to $2,912,164, during the three months ended March 31, 2025 as compared to the same period in 2024.
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Ourcost of revenues decreased to $3,847,047 for the three months ended March 31, 2025 from $5,240,516 during the same period in 2024, adecrease of $1,393,469, primarily due to a decrease in hauling costs.
Ourgross profit was $3,486,663 during the three months ended March 31, 2025, an increase of $222,402 from $3,264,261 during the same periodin 2024 primarily due to an increase in margins on the Company’s hauling and metal revenue.
OperatingExpenses
Forthe three months ended March 31, 2025 and 2024, our operating expenses were $7,368,170 and $6,075,985 respectively, an increase of $1,292,185.There was an increase in payroll and related expenses of $236,457 as payroll and related expenses were $1,974,485 for the three monthsended March 31, 2025 as compared to $1,738,028 for the same period in 2024. Advertising expense increased by $51,025 to $53,399 for thethree months ended March 31, 2025 as compared to $2,374 for the same period in 2024. Depreciation of fixed assets, along with amortizationof intangible assets, increased by $480,428 to $2,119,243 for the three months ended March 31, 2025 from $1,638,815 in 2024 as a resultof the Company acquiring more fixed assets during fiscal year 2024 and first quarter 2025. There were hauling and equipment maintenancecosts of $1,273,857 during the three months ended March 31, 2025, as compared to $601,562 in 2024, an increase of $672,295. Consulting,accounting, and legal expenses decreased to $523,563 during the three months ended March 31, 2025 from $612,271 during the same periodin 2024, a decrease of $88,708 as a result of the Company having significant corporate activity in 2024. There was a decrease in rentexpenses as a result of the Company acquiring the equipment on certain properties, decreasing $227,183 from $443,872 during the threemonths ended March 31, 2024 to $261,689 during the same period in 2025. There was $100,000 in equity issued for services expense and stock compensationduring the three months ended March 31, 2025, as compared to $288,900 and $20,833 respectively during the same period in 2024.
Ourother general and administrative expenses increased to $1,246,469 for the three months ended March 31, 2025 from $729,330 for the sameperiod in 2024, an increase of $517,139 as a result of the Company’s growth initiatives.
Thechange in these expenditures resulted in our total operating expenses increasing to $7,368,170 during the three months ended March 31,2025 compared to $6,075,985 during the three months ended March 31, 2024, an increase of $1,292,185.
Lossfrom Operations
Ourloss from operations increased by $1,069,783 to $3,881,507 during the three months ended March 31, 2025, from $2,811,724 during the threemonths ended March 31, 2024 for the same reasons discussed above.
OtherExpense
Duringthe three months ended March 31, 2025, our other expenses were $(784,232), as compared to $(5,250,790) for the same period in 2024, adecrease of $4,466,558. There was $0 in gain on settlement of non-convertible notes during the three months ended March 31, 2025, ascompared to $24,198. Interest expenses and amortization of debt discount decreased to $(810,853) during the three months ended March31, 2025 from $(2,194,229) during the three months ended March 31, 2024. Expense for warrants issued for financing decreased to $0 duringthe three months ended March 31, 2025 from $3,029,927 during the three months ended March 31, 2024. Gain on conversion of convertiblenotes decreased to $0 from $24,198 during the three months ended March 31, 2024. Other income increased to $26,621 during the three monthsended March 31, 2025 from $1,351 during the three months ended March 31, 2024.
DeemedDividend
Duringthe three months ended March 31, 2025, there was a deemed dividend of $2,999,964 for the reduction of exercise price of warrants, ascompared to $1,444,324 during the same period in 2024, a change of $1,555,640.
Duringthe three months ended March 31, 2025, there was a deemed dividend of $0 for the reduction of the conversion price of a debt note, ascompared to $23,953,940 during the same period in 2024, a change of $23,953,940.
NetLoss Available to Common Stockholders
Ournet loss was $7,665,703 during the three months ended March 31, 2025 as compared to $33,460,778 during the same period in 2024, a reductionof $25,795,075, for the reasons discussed above.
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Liquidityand Capital Resources
Netcash used in operating activities for the three months ended March 31, 2025 was $4,161,414 as compared to $3,460,823 for the three monthsended March 31, 2024. For the three months ended March 31, 2025, the cash flows used in operating activities were driven by a net lossof $4,665,739, amortization of right of use assets of $80,004, depreciation and amortization of $2,119,243, increase indue to related parties of $256,840, decrease in prepaid expenses of $633,136, a decrease of accounts payable and accrued expenses of $705,606,a decrease in operating lease liabilities of $61,764, stock based compensation of $100,000, interest and amortizationof debt discount of $810,853, an increase in accounts receivable of $1,023,478, and increases in inventories of $1,665,367. For the threemonths ended March 31, 2024, the cash flows used in operating activities were driven by a net loss of $8,062,514, amortization of rightof use assets (related-party) of $24,980, amortization of right of use assets of $48,935, depreciation and amortization of $1,638,815,decrease of due to related parties of $903,462, decrease of prepaid expenses of $113,261, a decrease of accounts payable and accruedexpenses of $1,649,694, a decrease in operating lease liabilities of $25,385, a decrease in operating lease liabilities (related-party)of $39,791, stock based compensation of $309,773, equity issued for warrant inducement of $3,029,927, interest and amortization of debtdiscount of $2,194,229, gain on the conversion of notes of $24,198, an increase in accounts receivable of $296,832, shares issued forfinancing of $52,183, and increases in inventories of $199,791.
Netcash used in investing activities was $(58,500) and $0 for the three months ended March 31, 2025 and 2024, respectively. For the threemonths ended March 31, 2025, there was cash used in the purchase of equipment of $210,500 and cash received for the disposal of assetsof $152,000.
Netcash provided by financing activities was $7,145,205 during the three months ended March 31, 2025, as compared to $2,627,882 during thethree months ended March 31, 2024. During the three months ended March 31, 2025, there were proceeds from sales of common stock and warrantsof $9,143,806, cash received for shares still held in abeyance of $1,334,800, bank overdrafts of $227,806, repayment of non-convertiblenotes of $1,261,207, and repayment of non-convertible notes payable - related party of $2,300,000. During the three months ended March31, 2024, there were proceeds from warrant exercises, bank overdrafts, factoring advances of $2,574,679, $179,501 and $2,843,950, respectively,while there were repayments of factoring advances, convertible notes, and non-convertible notes of $1,016,389, $1,497,083, and $456,776,respectively.
CapitalResources
Asof March 31, 2025, we had cash on hand of $5,501,755. We currently have no external sources of liquidity such as arrangements with creditinstitutions that will have or are reasonably likely to have a current or future effect on our financial condition or immediate accessto capital.
RequiredCapital over the Next Fiscal Year
Asof March 31, 2025, the Company had cash of $5,501,755 and a working capital deficit (current liabilities in excess of current assets)of $(7,478,957). The accumulated deficit as of March 31, 2025 was $(503,978,049). These conditions raise substantial doubt about theCompany’s ability to continue as a going concern for one year from the issuance of the unaudited condensed consolidated financialstatements.
Ifthe Company raises additional funds by issuing equity securities, its stockholders would experience dilution. Additional debt financing,if available, may involve covenants restricting its operations or its ability to incur additional debt. Any additional debt financingor additional equity that the Company raises may contain terms that are not favorable to it or its stockholders and require significantdebt service payments, which diverts resources from other activities. The Company’s ability to raise additional capital will beimpacted by market conditions and the price of the Company’s common stock. The accompanying unaudited condensed consolidated financialstatements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
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ContractualObligations
Ourcontractual obligations are included in our notes to the condensed consolidated financial statements included in Part I, Item I of thisQuarterly Report on Form 10-Q. To the extent that funds generated from our operations, together with our existing capital resources,are insufficient to meet future requirements, we will be required to obtain additional funds through equity or debt financings. No assurancecan be given that any additional financing will be made available to us or will be available on acceptable terms should such a need arise.
RecentDevelopments
TheCompany has entered into several material agreements during the most recent fiscal quarter. References in this section to any of ourcontracts or other documents are not necessarily complete, and each such reference is qualified in all respects by reference to the fulltext of such contract or other document filed as an exhibit to the relevant Current Report on Form 8-K.
RegisteredDirect Offering and Concurrent Private Placement
OnJanuary 13, 2025, the Company entered into a securities purchase agreement with institutional and accredited investors pursuant to whichthe Company agreed to sell 68,585 shares of its common stock at a price of $58.32 per share, together with accompanying warrantsto purchase an equal number of shares of common stock. The gross proceeds from this offering are approximately US$4.0 million beforededucting the financial advisor’s fees and other estimated offering expenses. The warrants are exercisable at $58.32 per shareand expire five years from the date of the stockholder approval for their issuance. Participating investors agreed to a prohibition onshort sales of the Company’s common stock while they hold the warrants. The offering was effected under the Company’s shelfregistration statement.
Noticeof Delinquency from Nasdaq – Q1 Form 10-Q
OnMay 23, 2025, the Company received a staff determination letter from the Listing Qualifications Staff of The Nasdaq Stock Market LLC(Nasdaq) notifying the Company that it had not filed its Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 (the “Q110-Q”) and therefore was not in compliance with Nasdaq Listing Rule 5250(c)(1). The Company was advised that it had 60 calendardays to submit a plan to regain compliance. If accepted, Nasdaq may grant an exception of up to 180 calendar days from the original filingdue date — which would correspond to a compliance deadline of November 17, 2025. The Company intends to submit such plan but thereis no assurance the plan will be accepted or that the Company will achieve compliance within the timeframe.
Noticeof Additional Delinquency from Nasdaq – Q2 Form 10-Q
OnAugust 22, 2025, the Company received an additional delinquency notification letter from Nasdaq because the Company had failed to fileits Quarterly Report on Form 10-Q for the quarter ended June 30, 2025 (“Q2 10-Q”), together with the previously delayed Q110-Q. The notice states that the Company must submit an updated plan to Nasdaq by September 8, 2025 to regain compliance with ListingRule 5250(c)(1). If the revised plan is accepted, Nasdaq may grant an exception of up to 180 calendar days from the original filing duedate of the Q1 10-Q (i.e., until November 17, 2025). While the notice has no immediate effect on the listing of the Company’s securities(which continue to trade on The Nasdaq Capital Market under the symbol “GWAV”), it underscores the risk of potential delistingif the Company cannot regain compliance.
Resolution of Minimum Bid Price Deficiency
Aspreviously reported by the Company, on September 13, 2024, the Company received written notice (the “Notice”) from The NasdaqListing Qualification Department (“Nasdaq”) notifying the Company that it was not in compliance with the $1.00 minimum bidprice requirement set forth in Nasdaq Listing Rule 5550(a)(2) for continued listing on the Nasdaq Capital Market (the “MinimumBid Price Requirement”), as the closing bid price of the Company’s common stock had been below $1.00 per share for 30 consecutivebusiness days. The Notice indicated that the Company has 180 calendar days, or until March 12, 2025, to regain compliance with the MinimumBid Price Requirement. On March 13, 2025, Nasdaq notified the Company that although the Company has not regained compliance with theMinimum Bid Price Requirement, the Company is eligible to receive an additional 180 calendar day period or until September 8, 2025, toregain compliance with the Minimum Bid Price Requirement, pursuant to Nasdaq Listing Rule 5810(a)(3)(A). On August 13, 2025, the Company’sshareholders approved at its 2025 annual meeting a proposal granting the Board discretionary authority to effect one or more consolidationof the issued and outstanding shares of common stock of the Company, pursuant to which the shares of common stock would be combined andreclassified into one share of common stock at a ratio within the range from 1-for-2 up to 1-for-150. On August 20, 2025, the Companyfiled a Certificate of Amendment (the “Certificate of Amendment”) to the Company’s Second Amended and Restated Certificateof Incorporation, as amended, to effect a reverse stock split of its issued common stock, par value $0.001 per share, in the ratio of1-for-110 (the “Reverse Stock Split”), which was effective at 5:00 p.m., eastern time, on August 22, 2025. The common stockbegan trading on a split-adjusted basis at the market open on Monday, August 25, 2025. On September 9, 2025, the Company received formalnotice from the staff of the Listing Qualifications Department of Nasdaq that the Company had regained compliance with the minimum bidprice requirement under Nasdaq Listing Rule 5550(a)(2). As a result, listing matter was closed.
CriticalAccounting Policies and Estimates
Fora discussion of our accounting policies and related items, please see the notes to the condensed consolidated financial statements, includedin Part I, Item 1 of this Quarterly Report on Form 10-Q.
ITEM3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
Asa “smaller reporting company” we are not required to provide the information required by this Item.
ITEM4. CONTROLS AND PROCEDURES
Evaluationof Disclosure Controls and Procedures
Management,under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer, have conducted an evaluationof the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)under the Exchange Act). Disclosure controls and procedures are designed to ensure that information required to be disclosed by a companyin the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periodsspecified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and proceduresdesigned to ensure that information required to be disclosed by a company in the reports that it files or submits under the ExchangeAct is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriateto allow timely decisions regarding required disclosure. Based on that evaluation, our Chief Executive Officer and our Chief FinancialOfficer, concluded that as of the end of the period covered by this Quarterly Report, (i) the Company’s disclosure controls andprocedures were not effective to ensure that material information relating to the Company is recorded, processed, summarized, and reportedwithin the time periods specified in the rules and forms of the Securities and Exchange Commission (the “Commission”), and(ii) the Company’s controls and procedures have not been designed to ensure that information required to be disclosed by the Companyin the reports that it files or submits under the Securities Exchange Act of 1934, as amended, is accumulated and communicated to theCompany’s management, including its principal executive and principal financial officers, or persons performing similar functions,as appropriate to allow timely decisions regarding required disclosure.
Changesin Internal Control over Financial Reporting
Therehas been no change in our internal control over financial reporting, as defined in Rules 13a-15(f) of the Exchange Act, during the quarterended March 31, 2025, that has materially affected, or is reasonably likely to materially affect, our internal control over financialreporting.
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PARTII - OTHER INFORMATION
ITEM1. LEGAL PROCEEDINGS
Asdisclosed in Note 11 - Commitments and Contingencies to the Company’s Condensed Consolidated Financial Statements, the Companyis engaged in certain legal matters and there have been no material developments with respect to our legal proceedings, except as describedin Note 11 - Commitments and Contingencies. The disclosures set forth in Note 11 - Commitments and Contingencies relatingto certain legal matters are incorporated herein by reference.
ITEM1A. RISK FACTORS
Asa “smaller reporting company,” we are not required to provide the information required by this Item 1A. Please see the RiskFactors in our Annual Report on Form 10-K for the year ended December 31, 2024 as filed with the SEC on April 15, 2025.
ITEM2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM4. MINE SAFETY DISCLOSURES
Notapplicable.
ITEM5. OTHER INFORMATION
Form8-K Disclosures
Weare providing the following disclosures in lieu of filing a Current Report on Form 8-K relating to Item 5.02 (“Departure of Directorsor Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers”).
JasonAdelman Resignation
OnApril 10, 2025, Jason Adelman provided the Board with his formal resignation from the Board and all committees thereof, effective immediately.Mr. Adelman was a member of the Board’s Compensation, Audit, and Nomination and Corporate Governance Committees. Mr. Adelman’sdecision to resign was not due to any disagreement with our Company on any matter relating to our operations, policies or practices (financialor otherwise).
IsaacDietrich Termination
OnApril 12, 2025, we terminated the employment of Isaac Dietrich, our Chief Financial Officer, effective April 12, 2025.
Rule10b5-1 Trading Arrangement
Duringthe three months ended March 31, 2025, no director or officer of the Company
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ITEM6. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a)Documents filed as part of this Quarterly Report:
(1)Financial Statements
See“Index to Consolidated Financial Statements” on Page F-1.
(2)Financial Statement Schedules.
Nofinancial statement schedules have been submitted because they are not required or are not applicable or because the information requiredis included in the financial statements or the notes thereto.
(3)List of Exhibits.
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*filed herewith.
| ** | Exhibits 32.1 and 32.2 are being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall such exhibits be deemed to be incorporated by reference in any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise specifically stated in such filing. |
+Denotes a management contract or compensatory plan.
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SIGNATURES
Pursuantto the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf bythe undersigned thereunto duly authorized.
| GREENWAVE TECHNOLOGY SOLUTIONS, INC. | ||
| Date: November 19, 2025 | By: | /s/ Danny Meeks |
| Danny Meeks, Chief Executive Officer | ||
| (Principal Executive Officer) | ||
| Date: November 19, 2025 | By: | /s/ Danny Meeks |
| Danny Meeks, Interim Chief Financial Officer | ||
| (Principal Financial and Accounting Officer) | ||
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Exhibit19.1
GreenwaveTechnology Solutions, Inc.
INSIDERTRADING POLICY
Dated:August 27, 2018
SUMMARY
GreenwaveTechnology Solutions, Inc. (the “Greenwave” or the “Company”) has adopted formal policies and procedures to preventinsider trading violations by its officers, directors, employees and related individuals. The following summary is presented in questionand answer format. The following information is a summary only. All persons subject to the insider trading policy must read the entirepolicy.
Whatis the insider trading policy?
Theinsider trading policy contains rules applicable to our officers, directors, employees, consultants and vendors, and related individuals,concerning trading in stock or other securities of Greenwave and companies with whom Greenwave does business. Among other things, thepolicy prohibits trading in Greenwave securities while in possession of inside information.
Whatis “inside information?”
Insideinformation is material, non-public information concerning Greenwave or any other public company with whom Greenwave does business. Thepolicy contains many examples of types of material, non-public information.
Whois subject to the insider trading policy?
Thepolicy covers the officers, directors, employees, consultants and vendors of Greenwave and all of its subsidiaries. The policy also coversfamily members of these persons and others who have or may have access to inside information, including family members whose investmentsare controlled or influenced by these persons.
Whois the compliance officer and what does he do?
DannyMeeks is currently the compliance officer under this insider trading policy. The compliance officer is responsible for ensuring compliancewith the policy, and his duties include pre-approving all trades by persons subject to the pre-approval requirements described below.
Whoare Section 16 Insiders?
Section16 is part of the Securities Exchange Act of 1934. It requires certain senior officers, directors and large stockholders to file reportswith the Securities and Exchange Commission about their shareholdings and trades. The Section 16 Insiders are listed on Exhibit Ato the policy. Section 16 Insiders are considered “Access Personnel” under the policy. Exhibit A will be automaticallyamended whenever the Greenwave Board of Directors changes the designation of Section 16 insiders.
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Whoare Access Personnel?
AccessPersonnel include the Section 16 Insiders and other persons who, by virtue of their position, are likely to have access to material non-publicinformation on a more frequent basis than other Covered Persons. The Access Personnel are listed on Exhibit B to the policy. ExhibitB may be updated from time to time by the compliance officer.
Isanyone else considered Access Personnel?
Occasionally,the compliance officer may designate additional persons as Access Personnel on a temporary basis if they gain access to inside information.The compliance officer will inform people in writing if they become Access Personnel, and will inform them when they are no longer deemedAccess Personnel.
Whatspecial restrictions apply to Access Personnel?
AccessPersonnel are subject to one or both of the following restrictions:
1.No trading in Greenwave securities during times of the year called blackout periods.
2.Required approval of the compliance officer prior to trading in Greenwave securities, even outside of the blackout periods. ExhibitB lists the restrictions applicable to each Access Personnel. Such restrictions may be changed from time to time.
Whatis the blackout period?
Theblackout period during which certain Access Personnel cannot trade in Greenwave securities begins fifteen (15) calendar days before thelast trading day of a fiscal quarter, and ends at the commencement of trading on the third trading day following public release of theCompany’s annual or quarterly financial results. Greenwave may extend the blackout period or implement different blackout periodsat any time by giving written notice to all Access Personnel. In addition, Greenwave may waive compliance with a blackout period if allmaterial information concerning the Company has been publicly disclosed or is known by both parties to the proposed transaction. It isimportant to remember that even outside of the blackout period, Covered Persons are prohibited from buying, selling or otherwise transferringGreenwave securities if they are aware of material non-public information.
Whatare the pre-clearance requirements?
CertainAccess Personnel must obtain the written permission of the compliance officer prior to engaging in any trade in Greenwave securities.Approval may take up to two business days, so Access Personnel subject to this restriction should plan in advance. When Access Personnelrequest permission to make a trade, the compliance officer will complete a pre-clearance checklist and if the trade is approved, willgive written permission for the trade. The written permission will expire at the end of the second trading day following the date ofwritten permission unless a longer period is granted in the sole discretion of the compliance officer. Any such permission will automaticallyexpire without advance notice upon the commencement of a blackout period.
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Whatis the restriction on market limit orders?
Marketlimit orders are open orders placed with a broker which are to be executed only if the securities reach a certain price. A market limitorder may continue indefinitely, or it may expire at a set time. In order to prevent Access Personnel from accidentally engaging in atrade when trading is not allowed, Access Personnel subject to pre-clearance requirements may not enter any market limit orders withtheir brokers for Greenwave securities except market limit orders which expire within the time allowed for trading after receiving writtenpermission to trade from the compliance officer.
AccessPersonnel subject to blackout periods may not enter into any market limit orders with their brokers for Greenwave securities other thanorders which expire before the commencement of the next blackout period. The above restrictions are not applicable to approved Rule 10b5-1plans (see below).
Doesthe policy have exceptions for Rule 10b5-1 plans?
TheCompany will in certain cases permit persons subject to this policy to enter into “blind trusts” or advance trading plans,and thereby avoid the prohibitions in the policy on trading while in possession of inside information. All such plans by Access Personnelwill require approval by the compliance officer, which approval must be obtained in advance of any trade that would otherwise be subjectto the policy.
Iam not listed as Access Personnel. Does the policy apply to me?
Yes.While people who are not Access Personnel are not subject to the blackout periods or pre-clearance requirements, all employees and consultantsof Greenwave and its subsidiaries are prohibited from trading while in possession of inside information.
CanI sell Greenwave shares short?
No.Selling shares short is a bet that the price of Greenwave common stock will go down. We cannot have a situation where any of our employeesor consultants would benefit financially at the expense of our existing stockholders. The same policy applies to acquiring any derivativesecurity (such as a put option) whose value would increase if the stock price goes down. Section 16 Insiders are prohibited by law, aswell as by the policy, from selling short.
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Whatabout my options issued pursuant to one of Greenwave’s stock option or employee stock purchase plans?
Youmay exercise options issued by Greenwave for cash, and you may complete purchases under a tax-qualified employee stock purchase plan,during blackout periods and even if you possess inside information. The special exceptions for exercise of an option and for employeestock purchase plan purchases do not apply to the sale of the Greenwave common stock you receive on exercise or purchase. All sales ofGreenwave common stock are subject to the policy. Unless you have sufficient cash to pay the exercise price and you intend to hold theshares you acquire upon exercise of an option, you should determine whether you are permitted to sell the shares before you exercisethe option.
CanI pledge my securities in a margin account or to secure another type of loan?
AccessPersonnel may not hold securities of Greenwave in a margin account. Access Personnel may not pledge securities to secure other loanswithout special permission from the compliance officer. Permission for pledges may be granted only at a time when you are permitted totrade in Greenwave securities.
Whatare the penalties for violation of the policy?
Violationof the policy may expose the violator to severe criminal and civil penalties. Greenwave will consider disciplinary action, up to andincluding termination, of any person who violates the policy.
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GreenwaveTechnology Solutions
INSIDERTRADING POLICY
Dated:August 27, 2018
GreenwaveTechnology Solutions, Inc. (“Greenwave” or the “Company”), has implemented an Insider Trading Policy (the “Policy”)to provide guidelines to officers, directors, employees and related individuals of the Company and its subsidiaries with respect to transactionsin the Company’s securities. The Policy is designed to prevent insider trading or the appearance of impropriety, to satisfy theCompany’s obligation to reasonably supervise the activities of Company personnel, and to help Company personnel avoid the severeconsequences associated with violations of insider trading laws.
IntroductoryInformation
Definitionof Inside Information
“InsideInformation” means material, non-public information. Information is material if a reasonable investor would consider it importantto the total mix of information available about the Company. Information is non-public if it has not been explicitly disclosed by theCompany in a press release or report filed with the Securities and Exchange Commission, or by another manner involving broad disclosureto the investing public. Information remains non-public until it has been so disclosed and the market has had time to absorb and evaluatethe information.
Examplesof types of information that will frequently be material include:
| ● | operating or financial results, |
| ● | changes in earnings estimates, |
| ● | significant changes in sales volumes, market share, product pricing, mix of sales, strategic plans, or liquidity, |
| ● | the gain or loss of a substantial customer or supplier, |
| ● | a pending or proposed merger, acquisition or tender offer, |
| ● | a significant sale of assets or the disposition of a subsidiary, |
| ● | execution of a business contract that is important to the company financially, strategically or otherwise, |
| ● | the award or cancellation of significant licenses or sales contracts, |
| ● | significant policy changes by the Company’s vendors or third party service providers, |
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| ● | major management changes, |
| ● | public or private financing transactions, |
| ● | plans for substantial capital investment, |
| ● | significant write-offs or increases in reserves, |
| ● | impending bankruptcy or financial liquidity problems, |
| ● | a significant cybersecurity breach, |
| ● | significant regulatory approvals or challenges, |
| ● | a change in state or federal law relating to the Company’s industry, |
| ● | a change in federal enforcement practices with respect to participants in the Company’s industry, |
| ● | pending or threatened litigation of potential significance to the company, or settlement or other resolution of ongoing litigation, |
| ● | significant new platform features or changes to existing platform features, |
| ● | delays in product development or problems with quality control, |
| ● | a stock split or other recapitalization, |
| ● | a change in dividend policy, |
| ● | a redemption or purchase by the Company of its securities, and |
| ● | any other information which is likely to have a significant impact on the Company. |
Eitherpositive or negative information may be material.
Ingeneral, information that is likely to affect the market price of a security is likely to be considered material.
Ifyour securities transactions become the subject of scrutiny, they will be viewed after-the-fact with the benefit of hindsight. As a result,Covered Persons should give careful thought to whether any facts and circumstances exist that could raise suspicions about the proprietyof the proposed transaction after the fact; for example, as to whether information that the covered person has become aware of may beconstrued as “material” and “nonpublic.”
Youshould contact the Compliance Officer identified below if you are considering a transaction in Company securities shortly after publicdisclosures of material information by the Company.
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OtherDefinitions
“AccessPersonnel” include the Section 16 Insiders, and other persons who, by virtue of their position, are likely to have access to InsideInformation on a more frequent basis than other Covered Persons. Access Personnel are listed on Exhibit B to this Policy. Thecompliance officer may from time to time designate certain persons not listed on Exhibit B as Access Personnel for purposes ofthis Policy if they gain access to Inside Information even for a limited period of time. The compliance officer will update ExhibitB from time to time as appropriate. All persons who, temporarily or permanently, become Access Personnel for purposes of this Policywill be given written notice.
“BlackoutPeriod” applies to certain Access Personnel designated on Exhibit B, and is described below under the heading “SpecificProcedures Applicable to Access Personnel.”
“ComplianceOfficer” is the insider trading compliance officer appointed pursuant to this Policy. The Compliance Officer is currently IsaacDietrich, but may be changed at any time by the Company with written notice to all Covered Persons.
“CoveredPersons” are described below under the heading “Applicability of Policy to Covered Persons.”
“Section16 Insiders” are the executive officers and directors of the Company and its subsidiaries who are subject to the reporting andliability provisions of Section 16 of the Securities Exchange Act of 1934, as amended. Section 16 Insiders are listed on Exhibit Ato this Policy. Exhibit A will be updated automatically whenever the Board changes the designation of Section 16 insiders.
TransactionsCovered by the Policy
ThisPolicy applies to all transactions in the Company’s securities, including common stock, options for common stock and other securitiesthe Company may issue from time to time, such as preferred stock, warrants and convertible debentures, as well as to derivative securitiesrelating to the Company’s stock, whether or not issued by the Company (such as exchange-traded options). It applies to all officersof the Company, all members of the Company’s Board of Directors, and all employees of, and consultants, contractors and vendorsto, the Company and its subsidiaries, and will continue to apply to such persons for a period of ninety (90) days after their separationfrom the Company. It also applies to family members of such persons, and to others, to the extent such persons come to have access toInside Information. Persons subject to this Policy are referred to as “Covered Persons.”
Anyperson who possesses Inside Information regarding the Company is a Covered Person for so long as the information is non-public.
Bonafide gifts are generally not transactions subject to the Policy, unless the person making the gift has reason to believe that the recipientintends to sell Company securities while the Covered Person is restricted from trading under the Policy (including outside of a BlackoutPeriod if the Covered Person is aware of material non-public information).
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Transactionsin mutual funds that hold Company securities are generally not transactions subject to the Policy. However, transactions in mutual fundsmay be prohibited under the Policy if a Covered Person becomes aware of material non-public information which might materially affectthe value of the mutual fund as a whole.
CoveredPersons are expected to use good judgment and contact the Compliance Officer in advance of a transaction if they have any doubt aboutwhether a transaction is covered by the Policy.
Applicationof Policy After Relationship Terminates
Ifyou are subject to a Blackout Period imposed by this Policy and your relationship terminates during a Blackout Period (or if you otherwiseleave while in possession of Inside Information), you will continue to be subject to the Policy, and specifically to the ongoing prohibitionagainst trading, until the later of the end of the Blackout Period or the commencement of trading on the second trading day followingpublic announcement of any Inside Information of which you are aware.
Ifa Blackout Period is extended, or if a Blackout Period does not end on its normal date as the result of the commencement of a subsequentBlackout Period prior to the termination of the prior Blackout Period, the Compliance Officer may in his discretion waive the applicabilityof the extended or new Blackout Period to a person whose relationship with the Company has terminated during the prior Blackout Period,if the Compliance Officer determines that such person has not had access to any Inside Information relating to the extended or new BlackoutPeriod.
TheCompany may institute stop-transfer instructions to its transfer agent in order to enforce this provision.
TheCompany’s Policy
Itis the policy of the Company that any Covered Person who possesses Inside Information about the Company may not buy or sell securitiesof the Company nor engage in any other action to take advantage of, or pass on to others, that information. This includes posting ofInside Information in chat-rooms or via other electronic communications. This Policy also applies to information relating to any othercompany, including customers, vendors or suppliers of the Company, obtained in the course of employment by or service to the Company.
Illegalityof Insider Trading
Itis illegal for any Covered Person to trade in the securities of the Company using material, non-public information about the Company.It is also illegal for any Covered Person to give Inside Information to others who may trade on the basis of that information.
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SpecificPolicies Applicable to All Covered Persons
TheCompany intends to comply with the spirit as well as the letter of the insider trading laws. The Company’s policy is to avoid eventhe appearance of improper conduct on the part of anyone employed by or associated with the Company, whether or not the conduct is literallyin violation of the law.
1.Trading on Inside Information. No Covered Person and no member of the immediate family or household of any such person, may tradeor otherwise engage in any transaction involving a purchase or sale of the Company’s securities, including but not limited to,any offer to purchase or offer to sell, during any period commencing with the date that he or she possesses Inside Information concerningthe Company, and ending when all material information known to such person has been available to investors generally for at least two(2) business days. Transactions that may be necessary or justifiable for independent reasons (such as the need to raise money for anemergency expenditure) are no exception. Even the appearance of an improper transaction must be avoided to preserve our reputation foradhering to the highest standards of conduct.
2.Tipping. No Covered Person may disclose (“tip”) Inside Information to any other person (including family members)where such information may be used by such person to his or her profit by trading in the securities of companies to which such informationrelates. No Covered Person may recommend the purchase or sale of any Company securities, or pass on to any person any material non-publicinformation concerning the Company, whether or not the Covered Person has any information regarding such person’s intention toengage in any transaction involving Company securities.
3.Confidentiality of Non-public Information; Prohibition on Electronic Posting of Confidential Information. Non-public informationrelating to the Company is the property of the Company and the unauthorized disclosure of such information is forbidden. Covered Personsare prohibited from posting confidential information relating to the Company, including but not limited to material non-public information,in internet chat rooms, on online message boards, on social media and social networking websites or through the use of any other formof electronic communication.
4.No Short Sales. Because short sales represent a bet that the Company’s stock price will decline, the Company prohibits allCovered Persons from shorting the Company’s stock. The Company also prohibits Covered Persons from acquiring any security or positionwhich would increase in value if the Company’s stock price declines, such as a put option. Short sales by Section 16 Insiders areprohibited by law as well as by this Policy. Any questions as to whether a transaction is a prohibited short sale should be raised withthe Compliance Officer.
5.Publicly-Traded Options. Given the relatively short term of publicly-traded options, transactions in options may create the appearancethat a Covered Person is trading based on material non-public information and focus a Covered Person’s attention on short-termperformance at the expense of the Company’s long-term objectives. Accordingly, transactions in put options, call options or otherderivative securities, on an exchange or in any other organized market, are prohibited by the Policy.
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6.Hedging Transactions. Hedging or monetization transactions can be accomplished through a number of possible mechanisms, includingfinancial instruments such as prepaid variable forwards, equity swaps, collars and exchange funds. Such hedging transactions may permita Covered Person to continue to own Company securities obtained through employee benefit plans or otherwise, but without the full risksand rewards of ownership. When that occurs, the Covered Person may no longer have the same objectives as the Company’s other shareholders.Any person wishing to enter into such an arrangement must first submit the proposed transaction, all agreements therefor and a writtenexplanation of the purpose of the proposed transaction to the Compliance Officer for approval. The Compliance Officer may accept, rejector condition such transaction in his or her sole discretion.
7.Margin Accounts and Pledges. Securities held in a margin account may be sold by the broker without the customer’s consentif the customer fails to meet a margin call. Similarly, securities pledged as collateral for a loan may be sold in foreclosure if theborrower defaults on the loan or, in many instances, if the value of the collateral declines. Because a margin sale or foreclosure salemay occur at a time when the pledger is aware of material non-public information regarding the Company, Covered Persons are prohibitedfrom holding securities of the Company in a margin account or pledging such securities as collateral for a loan. An exception to thisprohibition may be permitted in certain limited circumstances with the advance written approval of the Compliance Officer. The ComplianceOfficer may accept, reject or condition such transaction in its sole discretion.
8.Securities of Other Companies. The foregoing provisions also apply to trading in the securities of other companies, includingthe Company’s customers, vendors and suppliers, if any Covered Person becomes aware of material non-public information relatingto such companies in the course of performing his or her duties for the Company. Covered Persons are prohibited from disclosing any materialnon-public information concerning other companies that they gain as part of their employment.
9.Expert Networks. “Expert networks” are firms that connect investment firms and others seeking information about specificindustries, companies, products or business situations with outside experts who are able to provide information on such topics. CoveredPersons may not act as consultants or employees of expert network firms or any similar enterprises unless the engagement has been approvedin writing by the Compliance Officer.
Transactionsby Family Members and Others
ThePolicy applies to family members and domestic partners of Covered Persons who reside in the same household with the Covered Person andfamily members who do not live in the Covered Person’s household but whose transactions in Company securities are directed by aCovered Person or are subject to a Covered Person’s influence or control (collectively, “Family Members”). Family Membersgenerally include spouse, domestic partner, children and stepchildren, a child away at college and grandchildren, and may include parents,stepparents, grandparents, siblings and in-laws. Questions as to which persons are subject to the restrictions of the Policy should bedirected to the Compliance Officer. Each Covered Person is responsible for the transactions in Company securities of these other personsand therefore should make them aware of the need to confer with him or her before trading in Company securities.
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Transactionsby Entities Affiliated with a Covered Person
ThePolicy applies to any entities whose transactions in Company securities are influenced or controlled by a Covered Person, including corporations,partnerships or trusts (collectively, “Controlled Entities”). Transactions by these Controlled Entities will be treated forthe purposes of the Policy as if they are for the account of the affiliated Covered Person.
PotentialCriminal and Civil Liability and/or Disciplinary Action
Penaltiesfor trading on or communicating material non-public information are severe and may be applied against the individual involved in unlawfulconduct, as well as against the Company and controlling persons of the Company. A person can be subject to some or all of the penaltiesnoted below even if he or she does not personally benefit from the violation. Penalties include:
1.Liability for Insider Trading. Covered Persons may be subject to penalties of up to $5,000,000 and up to twenty years in jailfor engaging in transactions in securities at a time when they have knowledge of Inside Information regarding the subject company.
2.Liability for Tipping. Covered Persons may also be liable for improper transactions by any person (commonly referred to as a “tippee”)to whom they have disclosed Inside Information regarding the Company or to whom they have made recommendations or expressed opinionson the basis of such information as to trading in the Company’s securities. The SEC has imposed large penalties even when the disclosingperson did not profit from the trading. The SEC, the stock exchanges and the Financial Industry Regulatory Authority use sophisticatedelectronic surveillance techniques to uncover insider trading.
3.Disciplinary Actions. Covered Persons who violate this Policy will be subject to disciplinary action by the Company, which mayinclude, in addition to other sanctions, ineligibility for future participation in the Company’s equity incentive plans or terminationof employment.
4.Stop Transfer Order. The Company may in its discretion impose or maintain stop transfer orders on securities held by Covered Personsduring a Blackout Period.
Youshould be aware that stock market surveillance techniques have become extremely sophisticated and are being improved all the time. Thechance that federal authorities or exchange regulators will detect even small-level trading is a significant one.
IndividualResponsibility
EveryCovered Person has the individual responsibility to comply with this Policy against insider trading, regardless of whether the Companyhas implemented a Blackout Period applicable to the Covered Person. Appropriate judgment should be exercised in connection with any tradeor other restrictions in the Company’s securities.
ACovered Person may, from time to time, have to forego a proposed transaction in the Company’s securities even if he or she plannedto make the transaction before learning of the Inside Information and even though the Covered Person believes he or she may suffer aneconomic loss or forego an anticipated profit by waiting. Covered Persons who have anticipated needs for liquidity should strongly consideradopting a Rule 10b5-1 plan.
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Applicabilityof Policy to Inside Information Regarding Other Companies
ThisPolicy also applies to Inside Information relating to other companies, including the Company’s customers, vendors or suppliers(“business partners”), when that information is obtained in the course of employment with, or other services performed onbehalf of, the Company. Civil and criminal penalties, and termination of employment, may result from trading on inside information regardingthe Company’s business partners. All employees should treat Inside Information about the Company’s business partners withthe same care required with respect to information related directly to the Company.
SpecificProcedures Applicable to Access Personnel
BlackoutPeriod
Toensure compliance with this Policy and applicable federal and state securities laws, it is the Company’s policy that certain AccessPersonnel designated on Exhibit B refrain from conducting any transactions involving the purchase or sale of the Company’ssecurities during a “Blackout Period.” The Blackout Period begins on the day which is fifteen (15) calendar days before thelast trading day of a fiscal quarter, and ends at the commencement of trading on the third trading day following public release of theCompany’s annual or quarterly financial results. The Compliance Officer may extend the Blackout Period, or adopt additional BlackoutPeriods, in his or her sole discretion. The Compliance Officer may waive compliance with a Blackout Period if, following consultationwith the Board of Directors and the Company’s legal counsel, the Compliance Officer concludes that all material information concerningthe Company has been publicly disclosed or, in the case of a proposed private transaction in the Company’s securities, that neitherparty to such transaction is in possession of Inside Information which is not also known by the other party.
Thesafest period for trading in the Company’s securities, assuming the absence of Inside Information, is generally the first ten daysafter the expiration of the Blackout Period for the prior quarter.
Itis important to remember that, even if outside the Blackout Period, no Covered Person may trade in Company securities while in possessionof Inside Information. Trading in the Company’s securities outside of a Blackout Period should not be considered a “safeharbor,” and all Access Personnel and other Covered Persons should use good judgment at all times. You should contact the ComplianceOfficer in advance of a transaction if you have any questions regarding a particular securities transaction.
Pre-Clearanceof Trades
CertainAccess Personnel of the Company must comply with the Company’s pre-clearance process prior to engaging in any trade at any timein the Company’s securities. Such Access Personnel must contact the Compliance Officer, at least two (2) business days priorto commencing any trade in the Company’s securities.
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TheCompliance Officer will complete a pre-clearance checklist in the form attached as Exhibit C to this Policy and if the trade isapproved, will give written permission for the trade in the form attached as Exhibit D to this Policy. The written permissionwill expire at the end of the second trading day following the date of written permission or the beginning of the Blackout Period, whicheveris earlier. Accordingly, Access Personnel should not request permission to trade unless there is an intention to execute the trade immediatelyfollowing receipt of written permission. The Compliance Officer is under no obligation to approve a transaction submitted for pre-clearance,and may determine not to permit the transaction in his or her sole discretion.
FurtherRestrictions
Ascircumstances dictate, the Company may restrict trading by Access Personnel during otherwise open trading window periods. For example,the Company may restrict trading by Access Personnel during an ongoing cybersecurity investigation until the Company determines whetherthe incident is “material”. In such event, the Compliance Officer will notify particular individuals that they should notengage in any transactions involving the Company’s securities until such further restrictions are lifted by further notice. Thenotice need not state the reason for the further restrictions. Access Personnel who receive such notice should not disclose to othersthe existence of such further restrictions. Generally, these further restricted periods will end upon the earlier of the circumstancesno longer being material or the open of market on the second trading day following the Company’s public disclosure of such circumstancesor their resolution.
Restrictionon Market Limit Orders
Inorder to prevent Access Personnel from accidentally engaging in a trade when trading is not allowed, Access Personnel subject to BlackoutPeriods may not enter into any market limit orders with their brokers for securities of the Company other than orders which expire nolater than the commencement of the next Blackout Period. Access Personnel subject to pre-clearance requirements are subject to the additionalrestriction that they may not enter any market limit orders for securities of the Company except market limit orders which expire withinthe time allowed for trading after receiving written permission to trade from the Compliance Officer. All other market limit orders byAccess Personnel for securities of the Company are prohibited. This paragraph does not however apply to approve Rule 10b5-1 plans.
MarginAccounts and Pledges
Apledge of securities may be considered a sale under the securities laws. In addition, securities held in a margin account or pledgedas collateral for a loan may be sold by the broker without the customer’s consent if the customer fails to meet a margin call.Similarly, securities pledged (or hypothecated) as collateral for a loan may be sold in foreclosure if the borrower defaults on the loan.Because the initial pledge may be a sale, and a later margin sale or foreclosure sale may occur at a time when the pledger is aware ofInside Information or otherwise is not permitted to trade in securities of the Company, Access Personnel are prohibited from holdingCompany securities in a margin account or pledging Company securities for a loan. An exception to this prohibition may be granted wherea person wishes to pledge Company securities as collateral for a loan (not including margin debt), if such person is otherwise permittedto transact in Company securities at the time of the pledge, and if such person clearly demonstrates the financial capacity to repaythe loan without resort to the pledged securities. Any person who wishes to pledge Company securities as collateral for a loan must submita request for approval to the Compliance Officer at least two weeks prior to the proposed execution of documents evidencing the proposedpledge.
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Exceptionfor Pre-Arranged Trading Programs
(Rule10b5-1)
Rule10b5-1 of the Exchange Act allows a person to trade while aware of material non-public information if the trade was executed pursuantto a plan satisfying the requirements of Rule 10b5-1 (a “trading plan”) that was established at a time when the person wasnot aware of material non-public information. Rule 10b5-1 is a complicated rule that requires sophisticated planning and should not berelied upon without the advice of one’s own legal counsel or personal financial adviser.
SpecificRequirements
Tradesin Company securities that are executed pursuant to an approved trading plan are not subject to the prohibitions in the Policy,including Blackout Periods or pre-clearance requirements for Access Personnel. Trading plans must meet the followingrequirements:
| 1. | Pre-Approval. For a Rule 10b5-1 plan to serve as an adequate defense against an allegation of insider trading, a number of legal requirements must be satisfied. Accordingly, anyone wishing to establish a Rule 10b5-1 plan must first receive approval from the Compliance Officer. |
| 2. | Material Non-public Information and Special Blackouts. An individual desiring to enter into a Rule 10b5-1 plan must enter into the plan at a time when he or she is not aware of any material nonpublic information about the Company or otherwise subject to a special trading blackout |
| 3. | Open Trading Window. A Rule 10b5-1 plan may only be adopted during an open trading window (i.e., outside of a Blackout Period). |
| 4. | 30-Day Waiting Period. Rapid transaction executions subsequent to plan adoption may create an appearance of impropriety and call into question whether a plan adopter had material non-public information at the time of plan adoption. To avoid even the appearance of impropriety, the Company requires a waiting period of 30 days between the date the Rule 10b5-1 plan is adopted and the date of the first possible transaction under the plan. |
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Tradingplans may not be instituted, amended or terminated, and deviations from such plans may not be made during a Blackout Period or at a timewhen a Covered Person is aware of material non-public information. Any amendment or termination of an approved trading plan requiresthe advance approval of the Compliance Officer. The Compliance Officer may circulate from time to time criteria for clearance of tradingplans. Section 16 Insiders must provide prompt notice to the Compliance Officer of all transactions under trading plans to facilitatefilings required under Section 16(a) of the Exchange Act. Such filings are generally due within two (2) business days of a trade. TheCompany reserves the right to bar any transactions in Company securities, even those pursuant to trading plans previously approved, ifthe Compliance Officer or the Board of Directors, in consultation with the Compliance Officer, determines that such a bar is appropriateunder the circumstances.
Exceptionfor Stock Options and Employee Stock Purchase Plans
ThePolicy does not apply to the exercise of an employee stock option acquired pursuant to the Company’s plans, or to the exerciseof a tax withholding right pursuant to which a person has elected to have the Company withhold shares subject to an option to satisfytax withholding requirements. The Policy does apply, however, to any sale of stock as part of a broker-assisted cashless exercise ofan option and to any other market sale for the purpose of generating the cash needed to pay the exercise price of an option.
Purchasesof Company stock through a 401(k) plan or employee stock purchase plan (“ESPP”) resulting from your periodic contributionof money to the plan pursuant to your payroll deduction election are also exempt from this Policy, since the other party to those transactionsis the Company itself and the price is determined by the terms of the option agreement or the plan. The trading restrictions do apply,however, to elections you may make to (a) begin participation or change participation levels in any ESPP or Company stock fund in the401(k) plan, (b) sell any shares purchased under the ESPP, and (c) initiate an intra-plan transfer of an existing account balance intoor out of the Company stock fund in the 401(k) plan.
AdditionalInformation - Directors and Executive Officers
Directorsand executive officers of the Company must also comply with the reporting obligations and limitations on short-swing transactions setforth in Section 16 of the Securities Exchange Act of 1934, as amended. The practical effect of these provisions is that Section 16 Insiderswho purchase and sell the Company’s securities within a six-month period must disgorge all profits to the Company whether or notthey had knowledge of any Inside Information. Under these provisions, and so long as certain other criteria are met, in most cases neitherthe receipt of an option under the Company’s option plans, nor the exercise of that option is deemed a purchase under Section 16;however, the sale of any such shares is a sale under Section 16. The exercise of options by Section 16 Insiders, although not subjectto short-swing liability, must be disclosed on a Form 4 filed within two business days after the exercise occurs. The participationby executive officers in a tax-qualified employee stock purchase plan will not generally result in a Section 16 short-swing liabilityor reporting obligations; however the sale of any shares acquired is subject to Section 16 reporting and short-swing liability. Generally,all other purchases and sales of Company securities by Section 16 Insiders must be disclosed on a Form 4 filed within two businessdays after the transaction occurs. Moreover, no officer or director may ever make a short sale of the Company’s stock. TheCompany has provided, or will provide, separate memoranda and other appropriate materials to its officers and directors regarding compliancewith Section 16 and its related rules.
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Certification
CoveredPersons will be required to certify their understanding of and compliance with this Policy on an annual basis, in the form attached asExhibit E to this Policy.
Inquiries
Pleasedirect your questions as to any of the matters discussed in the Policy to the Compliance Officer.
Dutiesof Compliance Officer
Theduties of the Compliance Officer include the following:
| 1. | Pre-clearance of all transactions involving the Company’s securities by Access Personnel designated for pre-clearance on Exhibit B in order to determine compliance with the Policy, insider trading laws, Section 16 of the Exchange Act of 1934, as amended, and Rule 144 promulgated under the Securities Act of 1933, as amended. |
| 2. | Assistance in the preparation of Section 16 reports (Forms 3, 4 and 5) for all Section 16 Insiders. |
| 3. | Performance of cross-checks of available materials, which may include Forms 3, 4 and 5, Forms 144, officers and directors questionnaires, and reports received from the Company’s stock administrator and transfer agent, to determine trading activity by officers, directors and others who have, or may have, access to Inside Information. |
| 4. | Circulation of the Policy to all Covered Persons on an annual basis, and provision of the Policy and other appropriate materials to any officers, directors or others who have, or may have, access to Inside Information. |
| 5. | Reviewing proposed Rule 10b5-1 plans of Covered Persons. |
| 6. | Assisting the Company’s Board of Directors in implementation of the Policy. |
| 7. | Updating from time to time, as applicable, the list of Access Personnel on Exhibit B of the Policy. |
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EXHIBITA
SECTION16
INSIDERS
| Name | Title | |
| Danny Meeks | Chief Executive, Chairman and Director |
| A-1 |
EXHIBITB
ACCESSPERSONNEL
AllSection 16 Insiders listed on Exhibit A are Access Personnel, and subject to pre-clearance requirements and Blackout Periods.In addition, the following persons are Access Personnel, and are subject to the indicated restrictions:
| Name | Title | Blackout Periods | Pre-Clearance | |||
| Susan Roderick | Office Administrator | X | X | |||
| B-1 |
EXHIBITC
INSIDERTRADING COMPLIANCE PROGRAM - PRE-CLEARANCE CHECKLIST
| Individual Proposing To Trade: | ||
| Compliance Officer: | ||
| Proposed Trade: | ||
| Date: |
NoBlackout. Confirm that the trade will not be made during a “Blackout Period.” ☐
Section16 Compliance. Confirm, if the individual is an officer or director subject to Section 16, that the proposed trade will not giverise to any potential liability under Section 16 as a result of matched past (or intended future) transactions. Also, ensure that a Form4 has been or will be completed and will be filed within two (2) business days of the trade. ☐
ProhibitedTrades. Confirm that the proposed transaction is not a short sale, put, call or other prohibited transaction. ☐
Rule144 Compliance. To the extent applicable confirm that:
Thecurrent public information requirement has been met. ☐
Sharesto be sold are not restricted or, if restricted, the holding period has been met. ☐
Volumelimitations are not exceeded (confirm the individual is not part of an aggregated group). ☐
Themanner of sale requirements have been met. ☐
TheNotice on Form 144 has been completed and filed. ☐
Rule10b-5 Concerns. Confirm that:
Theindividual has been reminded that trading is prohibited when in possession of any material information regarding the Company that hasnot been adequately disclosed to the public. ☐
TheCompliance Officer has discussed with the insider any information known to the individual or the Compliance Officer which might be consideredmaterial, so that the individual has made an informed judgment as to the presence of inside information. ☐
| Signature of Compliance Officer |
| C-1 |
EXHIBITD
PERMISSIONTO TRADE
_________is hereby permitted to buy/sell [circle one] shares of the common stock of Greenwave Technology Solutions, Inc.
[Includethe following if sales to be made by affiliates pursuant to Rule 144. The securities must be sold in a broker’s transaction,and you may not solicit or arrange for the solicitation of an order to buy the securities you are selling, or make any payment in connectionwith the offer and sale to any person other than the broker who executes an order to sell the securities.]
Thepermission to sell will expire on the close of trading on _________, 20__.
| Very truly yours, | |
| Signature of Compliance Officer |
| D-1 |
EXHIBITE
CERTIFICATEOF COMPLIANCE
Irepresent that I have read, and promise to comply with, the Greenwave Technology Solutions, Inc. Insider Trading Policy.
| Name: | |
| Date: |
| E-1 |
Exhibit21.1
SUBSIDIAIRESOF GREENWAVE TECHNOLOGY SOLUTIONS INC.
| Subsidiaries | Place of Incorporation | |
| Empire Services Inc. | Virginia | |
| Liverman Metal Recycling, Inc. | North Carolina | |
| Scrap App, Inc. | Delaware | |
| Empire Staffing, LLC | Delaware | |
| Greenwave Elite Sports Facility, Inc. | Delaware |
Exhibit31.1
CERTIFICATIONOF CHIEF EXECUTIVE OFFICER
PURSUANTTO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I,Danny Meeks, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of Greenwave Technology Solutions, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| c. | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| d. | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function): |
| a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Dated: November 19, 2025 | By: | /s/ Danny Meeks |
| Danny Meeks | ||
| Chief Executive Officer and Interim Chief Financial Officer | ||
| (Principal Executive, Financial and Accounting Officer) |
Exhibit31.2
CERTIFICATIONOF CHIEF FINANCIAL OFFICER
PURSUANTTO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I,Danny Meeks, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of Greenwave Technology Solutions, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| c. | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| d. | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function): |
| a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Dated: November 19, 2025 | By: | /s/ Danny Meeks |
| Danny Meeks | ||
| Chief Executive Officer and Interim Chief Financial Officer | ||
| (Principal Executive, Financial and Accounting Officer) |
Exhibit32.1
CERTIFICATIONOF CHIEF EXECUTIVE OFFICER
PURSUANTTO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I,Danny Meeks, in my capacity as Chief Executive Officer of Greenwave Technology Solutions, Inc., certify, pursuant to 18 U.S.C.Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report on Form 10-Q ofGreenwave Technology Solutions, Inc. for the period ended March 31, 2025 fully complies with the requirements of Section 13(a) or15(d) of the Securities Exchange Act of 1934 and that information contained in such report fairly presents, in all materialrespects, the financial condition and results of operations of Greenwave Technology Solutions, Inc.
| Dated: November 19, 2025 | By: | /s/ Danny Meeks |
| Danny Meeks | ||
| Chief Executive Officer and Interim Chief Financial Officer | ||
| (Principal Executive, Financial and Accounting Officer) |
Exhibit32.2
CERTIFICATIONOF CHIEF FINANCIAL OFFICER
PURSUANTTO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I,Danny Meeks, in my capacity as Chief Financial Officer of Greenwave Technology Solutions, Inc., certify, pursuant to 18 U.S.C.Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report on Form 10-Q ofGreenwave Technology Solutions, Inc. for the period ended March 31, 2025 fully complies with the requirements of Section 13(a) or15(d) of the Securities Exchange Act of 1934 and that information contained in such report fairly presents, in all materialrespects, the financial condition and results of operations of Greenwave Technology Solutions, Inc.
| Dated: November 19, 2025 | By: | /s/ Danny Meeks |
| Danny Meeks | ||
| Chief Executive Officer and Interim Chief Financial Officer | ||
| (Principal Executive, Financial and Accounting Officer) |