Greenwave Technology Solutions Inc

Previous wording

We operate an automotive shredder at our Kelford, North Carolina location and a second automotive shredder at our Carrollton, Virginia location is expected to come online in the second quarter of 2024. Our shredders are designed to produce a denser product and, in concert with advanced separation equipment, more refined recycled ferrous metals, which are more valuable as they require less processing to produce recycled steel products. In totality, this process reduces large metal objects like auto bodies into baseball-sized pieces of shredded recycled metal.

Current wording

We operate an automotive shredder at our Kelford, North Carolina location and a second automotive shredder at our Carrollton, Virginia location is expected to come online in the third quarter of 2024. Our shredders are designed to produce a denser product and, in concert with advanced separation equipment, more refined recycled ferrous metals, which are more valuable as they require less processing to produce recycled steel products. In totality, this process reduces large metal objects like auto bodies into baseball-sized pieces of shredded recycled metal.

Previous wording

The shredded pieces are then placed on a conveyor belt under magnetized drums to separate the ferrous metal from the mixed nonferrous metal and residue, producing consistent and high-quality ferrous scrap metal. The nonferrous metals and other materials then go through a number of additional mechanical systems which separate the nonferrous metal from any residue. The remaining nonferrous metal is further processed to sort the metal by type, grade, and quality prior to being sold as products, such as zorba (mainly aluminum), zurik (mainly stainless steel), and shredded insulated wire (mainly copper and aluminum).

Current wording

The shredded pieces are then placed on a conveyor belt under magnetized drums to separate the ferrous metal from the mixed nonferrous metal and residue, producing consistent and high-quality ferrous scrap metal. The nonferrous metals and other materials then go through a number of additional mechanical systems which separate the nonferrous metal from any residue. The remaining nonferrous metal is further processed to sort the metal by type, grade, and quality prior to being sold as products, such as zorba (mainly aluminium), zurik (mainly stainless steel), and shredded insulated wire (mainly copper and aluminium).

Previous wording

Empire is headquartered in Chesapeake, Virginia and employs 131 people as of May 13, 2024.

Current wording

Empire is headquartered in Chesapeake, Virginia and employs 144 people as of August 6, 2024.

Previous wording

We also 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 precious metals such as platinum, palladium and rhodium.

Current wording

We also process nonferrous metals such as aluminium, 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 precious metals such as platinum, palladium and rhodium.

Previous wording

Rental incomes decreased $12,290 from$42,790 to $30,500, metal revenues fell $890,641 from$7,111,026 to $6,220,385, hauling revenues grew $380,913 from$1,872,979 to $2,253,892, and miscellaneous revenue fell $16,627 from $16,627 to $0, during the three months ended March 31, 2024 as compared to the same period in 2023.

Current wording

Rental incomes increased $2,910 from $41,590 to $44,500, metal revenues fell $1,736,719 from $7,124,618 to $5,387,899, hauling revenues grew $210,200 from $2,239,184 to $2,449,384, and miscellaneous revenue fell $10,770 from $10,882 to $112, during the three months ended June 30, 2024 as compared to the same period in 2023.

Previous wording

Our gross profit was $3,264,261 during the three months ended March 31, 2024, a decrease of $1,462,350 from $4,726,611 during the same period in 2023 primarily due to a decline in margins on the Company’s hauling and metal revenue.

Current wording

Our gross profit was $2,283,855 during the three months ended June 30, 2024, a decrease of $1,014,999 from $3,298,854 during the same period in 2023 primarily due to a decline in margins on the Company’s hauling and metal revenue.

Previous wording

For the three months ended March 31, 2024 and 2023, our operating expenses were $6,075,985 and $6,661,787 respectively, a decline of $585,802. There was a decline in payroll and related expenses of $213,231 as payroll and related expenses were $1,738,028 for the three months ended March 31, 2024 as compared to $1,951,259 for the same period in 2023 which was the result of a reducing in overtime. Advertising expense decreased by $3,148 to $2,374 for the three months ended March 31, 2024 as compared to $5,522 for the same period in 2023 as the Company focused on operations. Depreciation of fixed assets, along with amortization of intangible assets, increased by $369,962 to $1,638,815 for the three months ended March 31, 2024 from $1,268,853 in 2023 as a result of the Company acquiring more fixed assets during fiscal year 2023. There were hauling and equipment maintenance costs of $601,562 during the three months ended March 31, 2024, as compared to $1,250,717 in 2023, a decrease of $649,155, due to the Company bringing its hauling in-house. Consulting, accounting, and legal expenses increased to $612,271 during the three months ended March 31, 2024 from $273,073 during the same period in 2023, an increase of $339,198 as a result of the Company having significant corporate activity in 2024. There was a decrease in rent expenses as a result of the Company acquiring the equipment on certain properties, decreasing $579,837 from $1,023,709 during the three months ended March 31, 2023 to $443,872 during the same period in 2024. There was an equity issued for services expense of $288,900 during the three months ended March 31, 2024, as compared to $0 during the same period in 2023, an increase of $309,733 primarily related to the Company’s warrant exchange.

Current wording

For the three months ended June 30, 2024 and 2023, our operating expenses were $11,245,027 and $5,389,131 respectively, an increase of $5,855,896. There was an increase in payroll and related expenses of $208,544 as payroll and related expenses were $1,705,823 for the three months ended June 30, 2024 as compared to $1,497,279 for the same period in 2023 which was the result of expanding operations. Advertising expense decreased by $10,329 to $0 for the three months ended June 30, 2024 as compared to $ 10,329 for the same period in 2023 as the Company focused on operations. Depreciation of fixed assets, along with amortization of intangible assets, increased by $301,504 to $1,652,232 for the three months ended June 30, 2024 from $1,350,728 in 2023 as a result of the Company acquiring more fixed assets during fiscal year 2024. There were hauling and equipment maintenance costs of $1,774,273 during the three months ended June 30, 2024, as compared to $569,416 in 2023, an increase of $1,204,857, due to the Company expanding its fleet of trucks. Consulting, accounting, and legal expenses increased to $1,621,874 during the three months ended June 30, 2024 from $202,174 during the same period in 2023, an increase of $1,419,700 as a result of the Company having significant corporate activity in 2024. There was a decrease in rent expenses as a result of the Company acquiring the equipment on certain properties, decreasing $189,258 from $1,033,518 during the three months ended June 30, 2023 to $844,260 during the same period in 2024. There was a stock based compensation of $2,716,008 during the three months ended June 30, 2024, as compared to $0 during the same period in 2023, an increase of $2,716,008 primarily related to the Company’s warrant exchange. There was stock compensation of $20,833 during the three months ended June 30, 2024, as compared to $0 during the same period in 2023, an increase of $20,833 primarily related to corporate branding.

Previous wording

Our other general and administrative expenses decreased to $729,330 for the three months ended March 31, 2024 from $888,654 for the same period in 2023, a decrease of $159,324, as a result of the Company better managing its overhead.

Current wording

Our other general and administrative expenses increased to $909,724 for the three months ended June 30, 2024 from $725,687 for the same period in 2023, an increase of $184,037, as a result of the Company better managing its overhead.

Previous wording

The change in these expenditures resulted in our total operating expenses decreasing to $6,075,985 during the three months ended March 31, 2024 compared to $6,661,787 during the three months ended March 31, 2023, a decrease of $585,802.

Current wording

The change in these expenditures resulted in our total operating expenses increasing to $11,245,027 during the three months ended June 30, 2024 compared to $5,389,131 during the three months ended June 30, 2023, an increase of $5,855,896.

Previous wording

Our loss from operations increased by $876,548 to $2,811,724 during the three months ended March 31, 2023, from $1,935,176 during the three months ended March 31, 2023 for the reasons discussed above.

Current wording

Our loss from operations increased by $6,870,895 to $8,961,172 during the three months ended June 30, 2023, from $2,090,277 during the three months ended June 30, 2023 for the reasons discussed above.

Previous wording

During the three months ended March 31, 2024, we incurred other expenses of $(5,250,790), as compared to $(2,090,499) for the same period in 2023, a decrease of $3,160,291. There was a gain on settlement of non-convertible notes and advances of $0 and $75,005 for the three months ended March 31, 2024 and 2023, respectively. Interest expenses and amortization of debt discount decreased to $(2,194,229) during the three months ended March 31, 2024 from $(2,165,504) during the three months ended March 31, 2023. Expense for warrants issued for financing increased to $(3,082,110) during the three months ended March 31, 2024 from $0 during the three months ended March 31, 2023. Gain on conversion of convertible notes increased to $24,198 during the three months ended March 31, 2024 from $0 during the three months ended March 31, 2023. Other income increased to $1,351 during the three months ended March 31, 2024 from $0 during the three months ended March 31, 2023.

Current wording

During the three months ended June 30, 2024, we generated other income of $16,284,495, as compared to other losses of $(174,785) for the same period in 2023, an increase of $16,459,280. There was a gain on settlement of non-convertible notes and advances of $1,056,962 and $0 for the three months ended June 30, 2024 and 2023, respectively. Interest expenses and amortization of debt discount increased to $(2,497,911) during the three months ended June 30, 2024 from $(891,849) during the three months ended June 30, 2023. Loss on conversion of convertible notes increased to $14,237,678 during the three months ended June 30, 2024 from $0 during the three months ended June 30, 2023. There was a gain on tax credit of $0 during the three months ended June 30, 2024, as compared to $717,064 during the same period in 2023. There was a loss on extinguishment of debt of $16,351,827 during the three months ended June 30, 2024, as compared to $0 during the same period in 2023. There was change of derivative liabilities of $48,314,949 during the three months ended June 30, 2024, as compared to $0 during the same period in 2023.

Previous wording

During the three months ended March 31, 2024, there was a deemed dividend of $1,444,324 for the reduction of exercise price of warrants, as compared to $0 during the same period in 2023, a change of $1,444,324.

Current wording

During the three months ended June 30, 2024, there was a deemed dividend of $51,130,572 for the reduction of exercise price of warrants, as compared to $0 during the same period in 2023, a change of $51,130,572.

Previous wording

Our net loss was $33,460,778 during the three months ended March 31, 2024 as compared to $4,025,675 during the same period in 2023, a change of $29,435,103, for the reasons discussed above.

Current wording

Our net loss was $43,807,249 during the three months ended June 30, 2024 as compared to $2,265,062 during the same period in 2023, a change of $41,542,187, for the reasons discussed above.

Previous wording

For the three months ended March 31, 2024, we generated $8,504,777 in revenues, as compared to $9,043,422 during the same period in 2023, a decrease of $538,645. This decrease was primarily due a decline in metal revenue.

Current wording

For the six months ended June 30, 2024, we generated $16,386,672 in revenues, as compared to $18,459,696 during the same period in 2023, a decrease of $2,073,024. This decrease was primarily due to a decline in metal revenue.

Previous wording

Our cost of revenues increased to $5,240,516 for the three months ended March 31, 2024 from $4,316,811 during the same period in 2023, an increase of $923,705, primarily due to an increase in hauling costs.

Current wording

Our cost of revenues increased to $404,325 for the six months ended June 30, 2024 from $10,434,231 during the same period in 2023, an increase of $10,838,556, primarily due to an increase in hauling costs.

Previous wording

During the three months ended March 31, 2024, there was a deemed dividend of $23,953,940 for the reduction of the conversion price of a debt note, as compared to $0 during the same period in 2023, a change of $23,953,940.

Current wording

During the six months ended June 30, 2024, there was a deemed dividend of $23,953,940 for the reduction of the conversion price of a debt note, as compared to $0 during the same period in 2023, a change of $23,953,940.

Previous wording

Net cash used in operating activities for the three months ended March 31, 2024 was $3,460,823 as compared to $203,965 for the three months ended March 31, 2023. For the three months ended March 31, 2024, the cash flows used in operating activities were driven by a net loss of $8,062,514, amortization of right of 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 accrued expenses 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 debt discount of $2,194,229, gain on the conversion of notes of $24,198, an increase in accounts receivable of $296,832, shares issued for financing of $52,183, and increases in inventories of $199,791. For the three months ended March 31, 2023, the cash flows used in operating activities were driven by a net loss of $4,025,675, amortization of right of use assets (related-party) of $602,404, amortization of right of use assets of $43,226, depreciation and amortization of $1,268,853, accrual of due to related parties of $529,693 increase of prepaid expenses of $42,262, an increase of accounts payable and accrued expenses of $812,188, a decrease in operating lease liabilities of $95,160, a decrease in operating lease liabilities (related-party) of $574,454, a gain on the settlement of non-convertible notes and accrued interest of $75,005 interest and amortization of debt discount of $1,861,971, an increase in accounts receivable of $144,269, increases in inventories of $303,826, increase in security deposit of $25,000, and a decrease in accrued payroll of $36,649.

Current wording

Net cash used in operating activities for the six months ended June 30, 2024 was $14,084,802 as compared to cash generated by operating activities of $1,053,796 for the six months ended June 30, 2023. For the six months ended June 30, 2024, net cash used in operating activities was driven by a net loss of $739,191, depreciation and amortization of $3,291,047, amortization of right of use assets (related-party) of $49,960, amortization of right of use assets of $104,935, loss on conversion of debt of $14,213,480, stock based compensation of $41,666, equity issued for warrant inducement of $3,029,927, loss on extinguishment of debt of $16,351,827, warrants issued for financing of $3,004,909, payment of due to related parties of $5,652,583, increase of prepaid expenses of $499,079, an increase of accounts payable and accrued expenses of $1,143,496, change infair value of derivative liabilities of $48,314,949, a decrease in operating lease liabilities of $129,118, a gain on the settlement ofnon-convertible notes payable and advances of $1,056,962, interest and amortization of debt discount of $4,692,140, an increase in accounts receivable of $301,210, and an increase in inventories of $922,974, accrued payroll and related expenses of $105,131. For the six months ended June 30, 2023, the cash flows generated by operating activities were driven by a net loss of $6,290,737, amortization of right of use assets (related-party) of $1,140,331, amortization of right of use assets of $184,757, depreciation and amortization of $2,619,581, due to related parties of $1,608,189, increase of prepaid expenses of $596,646, an increase of accounts payable and accrued expenses of $503,252, a decrease in operating lease liabilities of $40,425, a decrease in operating lease liabilities (related-party) of $1,269,496, a gain on the settlement of non-convertible notes and accrued interest of $75,005, interest and amortization of debt discount of $3,057,053, a increase in accounts receivable of $11,301, decrease in inventories of $70,037, increase in security deposit of $25,000 and accrued payroll and related expenses of $179,206.

Previous wording

Net cash used in investing activities was $0 and $712,335 for the three months ended March 31, 2024 and 2023, respectively. For the three months ended March 31, 2023, there was cash used in the purchase of equipment of $712,335.

Current wording

Net cash used in investing activities was $2,560,135 and $826,422 for the six months ended June 30, 2024 and 2023, respectively. For the six months ended June 30, 2024, there was cash used in the purchase of equipment of $2,560,135. For the six months ended June 30, 2023, there was cash used in the purchase of equipment of $826,422.

Previous wording

Net cash provided by financing activities was $2,627,882 during the three months ended March 31, 2024, as compared to $370,581 during the three months ended March 31, 2023. During the three months ended March 31, 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. During the three months ended March 31, 2023, the Company received $1,876,109 from the issuance of factoring advances and $1,000,000 from the issuance of non-convertible notes, while utilizing $519,543 in the repayment of non-convertible notes and utilizing $1,985,985 for the repayment of factoring advances.

Current wording

Net cash provided by financing activities was $39,401,892 during the six months ended June 30, 2024, as compared to cash used in financing activities of $854,564 during the six months ended June 30, 2023. During the six months ended June 30, 2024, the Company received $2,843,950 from the issuance of factoring advances, $40,369,116 from the sale of common stock with warrants, $2,834,632 from warrant exercises, and $235,584 from bank overdrafts, while utilizing $1,845,919 in the repayment of non-convertible notes, $3,538,388 for the repayment of factoring advances, and $1,497,083 for the repayment of convertible notes. During the six months ended June 30, 2023, the Company received $3,746,109 from the issuance of factoring advances and $1,000,000 from the issuance of non-convertible notes, while utilizing $1,301,846 in the repayment of non-convertible notes, utilizing $4,298,827 for the repayment of factoring advances And bank overdrafts of $180,337.

Previous wording

As of March 31, 2024, we had cash on hand of $713,218. We currently have no external sources of liquidity such as arrangements with credit institutions that will have or are reasonably likely to have a current or future effect on our financial condition or immediate access to capital.

Current wording

As of June 30, 2024, we had cash on hand of $24,303,114. We currently have no external sources of liquidity such as arrangements with credit institutions that will have or are reasonably likely to have a current or future effect on our financial condition or immediate access to capital.

Previous wording

As of March 31, 2024, the Company had cash of $713,218 and a working capital deficit (current liabilities in excess of current assets) of $(20,489,101). The accumulated deficit as of March 31, 2024 was $(429,326,935). These conditions raise substantial doubt about the Company’s ability to continue as a going concern for one year from the issuance of the unaudited condensed consolidated financial statements.

Current wording

As of June 30, 2024, the Company had cash of $24,303,114 and working capital (current assets in excess of current liabilities) of $14,126,157. The accumulated deficit as of June 30, 2024 was $(473,134,184). These conditions raise substantial doubt about the Company’s ability to continue as a going concern for one year from the issuance of the unaudited condensed consolidated financial statements.

Previous wording

Our contractual obligations are included in our notes to the condensed consolidated financial statements included in Part I, Item I of this Quarterly 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 assurance can be given that any additional financing will be made available to us or will be available on acceptable terms should such a need arise.

Current wording

Our contractual obligations are included in our notes to the unaudited condensed consolidated financial statements included in Part I, Item I of this Quarterly 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 assurance can be given that any additional financing will be made available to us or will be available on acceptable terms should such a need arise.