What changed in Greenwave Technology Solutions, Inc.'s 2023 10-K compared to 2022?

Across the narrative sections we track, Greenwave Technology Solutions, Inc. (GWAV) added 149 paragraphs, removed 155, and edited 101 between the 2022 and 2023 10-K filings. The biggest movers are Item 7. Management's Discussion & Analysis (+59/−48), Item 1A. Risk Factors (+49/−64), Item 1. Business (+25/−25).

Did Greenwave Technology Solutions, Inc. add new Risk Factors in the 2023 10-K?

Yes — Item 1A Risk Factors shows 49 new/edited paragraphs and 64 removed paragraphs versus the 2022 10-K.

What changed in Greenwave Technology Solutions, Inc.'s MD&A (Item 7) in 2023?

Item 7 Management's Discussion & Analysis shows 59 new/edited paragraphs and 48 removed paragraphs year-over-year. Read the side-by-side diff to see exactly which revenue, margin, and outlook commentary was rewritten.

Did Greenwave Technology Solutions, Inc.'s Legal Proceedings (Item 3) change in 2023?

Item 3 shows 1 added/edited paragraphs and 2 removed paragraphs — usually indicating new litigation disclosed or settled cases removed.

Where does this GWAV 10-K diff come from?

The source filings are Greenwave Technology Solutions, Inc.'s official 2022 and 2023 Form 10-K annual reports from SEC EDGAR. 10q10k.net parses each filing, aligns paragraphs by section (Item 1, 1A, 1C, 2, 3, 7, 7A), and highlights every added, removed and edited sentence side-by-side.

What changed in Greenwave Technology Solutions, Inc.'s 10-K — 2022 vs 2023

Paragraph-level year-over-year comparison of Greenwave Technology Solutions, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+149 added−155 removedSource: 10-K (2024-04-16) vs 10-K (2023-03-31)

Item 1. Business

Business — how the company describes what it does

15 edited+10 added−10 removed26 unchanged

2022 filing

2023 filing

Biggest changeWe aim to create a competitive advantage through our ability to process significant volumes of metal products, our use of processing and separation equipment, the number and location of our facilities, and the operating synergies we have been able to develop based on our experience.

Biggest changeWe aim to create a competitive advantage through our ability to process significant volumes of metal products and utilize the technology solutions, our use of processing and separation equipment, the number and location of our facilities, and the operating synergies we have been able to develop based on our experience. 3 Recent Developments On March 29, 2024, the Company entered into an exchange agreement with DWM Properties LLC (the “Holder”), whereby the Company and Holder agreed to exchange $10,000,000 of that certain Secured Promissory Note, dated July 31, 2023, issued by the Company to the Holder for shares of the Company’s newly created Series D Convertible Preferred Stock (the “Preferred Stock”).

It is categorized into heavy melting steel, plate and structural, and shredded scrap, with various grades of each of those categorized based on the content, size and consistency of the metal. All of these attributes affect the metal’s value. We also process nonferrous metals such as aluminum, copper, stainless steel, nickel, brass, titanium, lead, alloys and mixed metal products.

It is categorized into heavy melting steel, plate and structural, and shredded scrap, with various grades of each of those categorizations based on the content, size and consistency of the metal. All of these attributes affect the metal’s value. We also process nonferrous metals such as aluminum, copper, stainless steel, nickel, brass, titanium, lead, alloys and mixed metal products.

Our supply of scrap metal is influenced by 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. Technology In May 2021, we launched our new website.

Our supply of scrap metal is influenced by 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. 2 Technology In May 2021, we launched our new website.

In October 2021, we changed our corporate name from “MassRoots, Inc.” to “Greenwave Technology Solutions, Inc.” We sold all of our social media assets on October 28, 2021 for cash consideration equal to $10,000 and has discontinued all operations related to its social media business. On September 30, 2021, we closed our acquisition of Empire Services, Inc.

In October 2021, we changed our corporate name from “MassRoots, Inc.” to “Greenwave Technology Solutions, Inc.” We sold all of our social media assets on October 28, 2021 for cash consideration equal to $10,000 and has discontinued all operations related to our social media business. On September 30, 2021, we closed our acquisition of Empire Services, Inc.

Our filings with the SEC are available free of charge on the SEC’s website at www.sec.gov and on our website under the “Investors” tab as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

Upon the closing of the Empire Merger, Empire continued as our surviving wholly-owned subsidiary, and the merger subsidiary ceased to exist. 2 Products and Services Our main product is selling ferrous metal, which is used in the recycling and production of finished steel.

Upon the closing of the Empire Merger, Empire continued as our surviving wholly-owned subsidiary, and the merger subsidiary ceased to exist. Products and Services Our main product is selling ferrous metal, which is used in the recycling and production of finished steel.

Competition We compete 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 are sensitive to global economic conditions, the relative value of the U.S. dollar, and availability of material alternatives, including recycled metal substitutes.

Competition We compete 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 value of the U.S. dollar, and availability of material alternatives, including recycled metal substitutes.

We have designed our systems to maximize the value of metals produced from this process. We operate an automotive shredder at our Kelford, North Carolina location and a second automotive shredder at our Carrollton, Virginia is expected to come online in the second quarter of 2023.

We have designed our systems to maximize the value of metals produced from this process. 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.

There are few companies developing technology solutions for the scrap metal industry and we believe that by focusing our experience and assets on this highly-profitable but often overlooked industry, we can create significant value for our shareholders.

There are few companies developing technology solutions for the scrap metal industry and we believe that by utilizing our experience and assets on this highly-profitable but often overlooked industry, we can create significant value for our shareholders.

Now that strong foundational systems are in place, management has begun to repurpose Greenwave’s technology platform that it developed from 2013 to 2020 into a marketing and CRM platform for scrap metal yards.

Now that strong foundational systems are in place, management has begun to repurpose Greenwave’s technology platform that was developed from 2013 to 2020 into a marketing and CRM platform for scrap metal yards.

We view our diverse employee population and our culture as key to our success. Our company culture prioritizes learning, supports growth and empowers us to reach new heights. We recruit employees with the skills and training relevant to succeed and thrive in their functional responsibilities.

Employees and Human Capital Resources Greenwave has 131 full-time employees as of April 15, 2024. We view our diverse employee population and our culture as key to our success. Our company culture prioritizes learning, supports growth and empowers us to reach new heights. We recruit employees with the skills and training relevant to succeed and thrive in their functional responsibilities.

Because this would greatly expand the number of potential buyers of our processed scrap products, we believe opening a facility with port or rail access could result in an increase in both the revenue and profitability of our existing operations. 1 Empire is headquartered in Chesapeake, Virginia and employs 143 people as of March 21, 2023.

Background We were incorporated in the state of Delaware on April 26, 2013 as a technology platform. Our principal executive office is located at 4016 Raintree Rd, Ste 300, Chesapeake, VA 23321, and our telephone number is (757) 966-1432.

Empire is headquartered in Chesapeake, Virginia and employs 131 people as of April 15, 2024. 1 Background We were incorporated in the state of Delaware on April 26, 2013 as a technology platform. Our principal executive office is located at 4016 Raintree Rd, Ste 300, Chesapeake, VA 23321, and our telephone number is (800) 490-5020.

Additionally, in 2021, the Company moved Empire’s accounting systems over to a cloud-based QuickBooks to facilitate collaboration and further growth. 3 The technology systems and improvements Empire implemented have resulted in a significant increase in new customers, hundreds of quotes and dozens of purchases of junk cars, and we believe a material increase in Empire’s revenues as a result of these improvements.

The technology systems and improvements Empire implemented have resulted in a significant increase in new customers, hundreds of quotes and dozens of purchases of junk cars, and we believe a material increase in Empire’s revenues as a result of these improvements.

Upon the closing of the Odava Merger, Odava continued as our surviving wholly-owned subsidiary, and the merger subsidiary ceased to exist. On October 1, 2021, we consummated a reverse triangular merger (the “Empire Merger”) pursuant to which we acquired all of the outstanding common stock of Empire Services, Inc. (“Empire”), a Virginia corporation.

On October 1, 2021, we consummated a reverse triangular merger (the “Empire Merger”) pursuant to which we acquired all of the outstanding common stock of Empire Services, Inc. (“Empire”), a Virginia corporation. Upon closing of the Empire Merger, all of the shares of Empire’s common stock was exchanged for 1,650,000 shares of our common stock.

Removed

On January 25, 2017, we consummated a reverse triangular merger (the “Whaxy Merger”) pursuant to which we acquired all of the outstanding common stock of DDDigtal Inc. d.b.a. Whaxy (“DDDigtal”), a Colorado corporation.

Added

Additionally, in 2021, the Company moved Empire’s accounting systems over to a cloud-based QuickBooks to facilitate collaboration and further growth.

Removed

Upon closing of the Whaxy Merger, each share of DDDigtal’s common stock was exchanged for such number of shares of our common stock (or a fraction thereof) based on an exchange ratio equal to approximately 5.273-for-1, such that 1 share of our common stock was issued for every 5.273 shares of DDDigtal’s common stock.

Added

The Preferred Stock is convertible into the Company’s common stock at $0.204 per share, subject to adjustment as set forth therein, except the Preferred Stock is not convertible until such time as the currently outstanding senior secured indebtedness of the Company has been satisfied in full.

Removed

At the closing of the Whaxy Merger, all shares of common stock of our newly-formed merger subsidiary formed for the sole purpose of effectuating the Whaxy Merger, were converted into and exchanged for one share of common stock of DDDigtal, and all shares of DDDigtal’s common stock that were outstanding immediately prior to the closing of the Whaxy Merger were automatically cancelled and retired.

Added

In addition, the Company has the right to redeem the Preferred Stock in cash or shares of its Common Stock. The Preferred Stock has a stated value of $10,000 per share, has no voting rights, and does not bear dividends.

Removed

Upon the closing of the Whaxy Merger, DDDigtal continued as our surviving wholly-owned subsidiary, and the merger subsidiary ceased to exist. On July 13, 2017, we consummated a reverse triangular merger (the “Odava Merger”) pursuant to which we acquired all of the outstanding common stock of Odava Inc. (“Odava”), a Delaware corporation.

Added

On March 18, 2024, the Company extended warrant exercise inducement offer letters (the “Inducement Letters”) to the holders (the “Holders”) of its existing warrants to purchase shares of the Company’s common stock (the “Existing Warrants”), pursuant to which the Holders can exercise for cash their Existing Warrants to purchase an aggregate of up to 16,147,852 shares of the Company’s common stock, in the aggregate, at an exercise price of $0.204 per share, in exchange for the Company’s agreement to issue new warrants (the “Inducement Warrants”) on the terms described below, to purchase up to 32,295,704 shares of the Company’s common stock (the “Inducement Warrant Shares”).

Removed

Upon closing of the Odava Merger, each share of Odava’s common stock was exchanged for such number of shares of our common stock (or a fraction thereof), based on an exchange ratio equal to approximately 4.069-for-1, such that 1 share of our common stock was issued for every 4.069 shares of Odava’s common stock.

Added

If Holders exercise all their Existing Warrants for cash, the Company would receive aggregate gross proceeds of approximately $3,294,161. Holders of Existing Warrants must return the Inducement Letter along with exercising all or part of the Existing Warrants on or before 5:00 p.m. Eastern Time on March 26, 2024 (the “Final Closing Date”) to receive the Inducement Warrants.

Removed

At the closing of the Odava Merger, all shares of common stock of our newly-formed merger subsidiary formed for the sole purpose of effectuating the Odava Merger, were converted into and exchanged for one share of common stock of Odava, and all shares of Odava’s common stock that were outstanding immediately prior to the closing of the Odava Merger automatically cancelled and retired.

Added

From March 18 to March 26, 2024, the Company issued 13,772,394 shares for the exercise of warrants for proceeds of $2,809,568. The Company issued 27,544,788 Inducement Warrants to the existing warrant holders who exercised during the inducement period. For more information, see the Company’s current report on Form 8-K filed on March 18, 2024.

Removed

Upon closing of the Empire Merger, all of the shares of Empire’s common stock was exchanged for 1,650,000 shares of our common stock.

Added

From January 1 to March 20, 2024, the Company issued 10,864,690 shares for the conversion of convertible debt in the principal amount of $2,066,740. The shares underlying the debt were covered by a registration statement on Form S-3 (File No. 333-274293) declared effective by the U.S. Securities Exchange Commission on September 12, 2023.

Removed

Recent Developments In July 2022, the Company’s common stock began trading on the Nasdaq Capital Market (“Nasdaq”).

Added

From January 1 to March 17, 2024, the Company issued 2,258,088 shares for the exercise of warrants for proceeds of $22,581. On March 15, 2024, the Company entered into leasing agreements for a scrap yard located at 3030 E 55th Street, Cleveland, OH 44127.

Removed

Simultaneously with the listing of the Company’s common stock on Nasdaq on July 22, 2022, the Company’s senior secured convertible notes in the principal amount of $37,714,966 together with accrued interest in the amount of $1,470,884 were converted into shares of common stock at a conversion price of $6.02 per share.

Added

Under the terms of the lease, the Company is required to pay $17,000 from March 1, 2024 to February 28, 2025; $23,000 from March 1, 2025 to February 28, 2026; $23,000 from March 1, 2026 to February 28, 2027; $23,000 from March 1, 2027 to February 28, 2028; and increasing by the greater of 3% and the CPI every 12 months thereafter until the expiration of the lease.

Removed

In November 2022, we opened a metal recycling facility in Fairmont, NC. In January 2023, we leased a property in Chesapeake, VA. In April 2023, we are opening a metal recycling facility in Cleveland, Ohio. Intellectual Property None. 4 Employees and Human Capital Resources Greenwave has 143 full-time employees as of March 21, 2023.

Added

The lease is for a period of five years, include two options to extend for five years each, and the Company was required to make a security deposit of $17,000. The Company has the option to purchase the property for $3,277,000 until February 28, 2024. Intellectual Property None.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

44 edited+5 added−20 removed121 unchanged

2022 filing

2023 filing

Biggest changeRisks Relating to Government Laws and Regulations ● Tax increases and changes in tax rules may adversely affect our financial results. ● We may not realize our deferred tax assets in the future. ● Environmental compliance costs and potential environmental liabilities may have a material adverse effect on our financial condition and results of operations. ● Governmental agencies may refuse to grant or renew our licenses and permits, thus restricting our ability to operate. ● Compliance with existing and future climate change and greenhouse gas emission laws and regulations may adversely impact our operating results. 5 Risks Relating to Intellectual Property ● We may not be able to protect our intellectual property rights throughout the world. ● We may be involved in lawsuits to protect or enforce our intellectual property, which could be expensive, time-consuming and unsuccessful and the outcome might have an adverse effect on the success of our business. ● We may be subject to claims by third parties asserting that our employees or we have misappropriated their intellectual property or claiming ownership of what we regard as our own intellectual property.

Risks Related to our Common Stock ● The market price of our common stock may be volatile and adversely affected by several factors. ● If our shares of common stock become subject to the penny stock rules, it would become more difficult to trade our shares. ● We are a “smaller reporting company” within the meaning of the Securities Act, and if we decide to take advantage of certain exemptions from various reporting requirements applicable to smaller reporting companies, our common stock could be less attractive to investors. ● We do not anticipate paying dividends on our common stock, and investors may lose the entire amount of their investment. ● You could lose some or all of your investment. ● Our management controls a large block of our common stock that will allow them to control us. ● Because we can issue additional shares of Common Stock, purchasers of our Common Stock may incur immediate dilution and experience further dilution. ● Provisions in our Second Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws and Delaware law might discourage, delay or prevent a change in control of our Company or changes in our management and, therefore, depress the market price of our Common Stock. 6 ● If securities or industry research analysts do not publish research or reports about our business, or if they issue unfavorable or misleading opinions regarding common stock, the market price and trading volume of our Common Stock could decline. ● Future sales and issuances of our Common Stock or rights to purchase our Common Stock, including pursuant to our equity incentive plans, could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to fall. ● We have broad discretion in the use of the net proceeds from our public offerings and may not use them effectively. ● Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud. ● As a newly Nasdaq-listed company, we will incur material increased costs and become subject to additional regulations and requirements.

Risks Related to our Common Stock ● The market price of our common stock may be volatile and adversely affected by several factors. ● If our shares of common stock become subject to the penny stock rules, it would become more difficult to trade our shares. ● We are a “smaller reporting company” within the meaning of the Securities Act, and if we decide to take advantage of certain exemptions from various reporting requirements applicable to smaller reporting companies, our common stock could be less attractive to investors. ● We do not anticipate paying dividends on our common stock, and investors may lose the entire amount of their investment. ● You could lose some or all of your investment. ● Our management controls a large block of our common stock that will allow them to control us. ● Because we can issue additional shares of Common Stock, purchasers of our Common Stock may incur immediate dilution and experience further dilution. ● Provisions in our Second Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws and Delaware law might discourage, delay or prevent a change in control of our Company or changes in our management and, therefore, depress the market price of our Common Stock. ● If securities or industry research analysts do not publish research or reports about our business, or if they issue unfavorable or misleading opinions regarding common stock, the market price and trading volume of our Common Stock could decline. ● Future sales and issuances of our Common Stock or rights to purchase our Common Stock, including pursuant to our equity incentive plans, could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to fall. ● We have broad discretion in the use of the net proceeds from our public offerings and may not use them effectively. ● Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud. ● As a newly Nasdaq-listed company, we will incur material increased costs and become subject to additional regulations and requirements.

The occurrence of such events and conditions may adversely affect our operating results, financial condition and cash flows. For example, in fiscal 2017, regulators in China began implementing the National Sword initiative involving inspections of Chinese industrial enterprises, including recyclers, in order to identify rules violations with respect to discharge of pollutants or illegally transferred scrap imports.

The occurrence of such events and conditions may adversely affect our operating results, financial condition and cash flows. 6 For example, in fiscal 2017, regulators in China began implementing the National Sword Initiative involving inspections of Chinese industrial enterprises, including recyclers, in order to identify rules violations with respect to discharge of pollutants or illegally transferred scrap imports.

If we do not invest or apply the net proceeds from our public offerings in ways that enhance stockholder value, we may fail to achieve expected financial results, which could cause our stock price to decline. 17 Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud.

If we do not invest or apply the net proceeds from our public offerings in ways that enhance stockholder value, we may fail to achieve expected financial results, which could cause our stock price to decline. Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud.

Given the uncertainty regarding the scope and duration of these trade actions by the U.S. or other countries, the impact of the trade actions on our operations or results remains uncertain, but this impact could be material. 8 Changes in the availability or price of inputs such as raw materials and end-of-life vehicles could reduce our sales.

Given the uncertainty regarding the scope and duration of these trade actions by the U.S. or other countries, the impact of the trade actions on our operations or results remains uncertain, but this impact could be material. Changes in the availability or price of inputs such as raw materials and end-of-life vehicles could reduce our sales.

If we cannot continue as a viable entity, we may be unable to continue our operations and you may lose some or all of your investment in our securities. 12 In the past we have experienced material weaknesses in our internal control over financial reporting, which if continued, could impair our financial condition.

If we cannot continue as a viable entity, we may be unable to continue our operations and you may lose some or all of your investment in our securities. In the past we have experienced material weaknesses in our internal control over financial reporting, which if continued, could impair our financial condition.

See “Contingencies – Environmental” in Note 12 – Commitments and Contingencies in the Notes to the Consolidated Financial Statements. Governmental agencies may refuse to grant or renew our licenses and permits, thus restricting our ability to operate. We conduct certain of our operations subject to licenses, permits and approvals from state and local governments.

See “Contingencies – Environmental” in Note 11 – Commitments and Contingencies in the Notes to the Consolidated Financial Statements. 12 Governmental agencies may refuse to grant or renew our licenses and permits, thus restricting our ability to operate. We conduct certain of our operations subject to licenses, permits and approvals from state and local governments.

In fiscal 2022, prices for our ferrous and non-ferrous metals declined during the second half of the year, but remained historically strong, resulting in a decrease in revenue and purchasing costs for raw materials. 9 Imbalances in supply and demand conditions in the global steel industry may reduce demand for our products.

In fiscal 2022, prices for our ferrous and non-ferrous metals declined during the second half of the year, but remained historically strong, resulting in a decrease in revenue and purchasing costs for raw materials. Imbalances in supply and demand conditions in the global steel industry may reduce demand for our products.

If some investors find our Common Stock or warrants less attractive as a result, there may be a less active trading market for our Common Stock and our stock prices may be more volatile. We do not anticipate paying dividends on our Common Stock, and investors may lose the entire amount of their investment.

If some investors find our Common Stock or warrants less attractive as a result, there may be a less active trading market for our Common Stock and our stock prices may be more volatile. 14 We do not anticipate paying dividends on our Common Stock, and investors may lose the entire amount of their investment.

The loss of these suppliers, or their failure to supply us with these materials, would materially and adversely affect our business. ● We have substantial customer concentration, with a limited number of customers accounting for a substantial portion of our 2022 and 2021 revenues. ● We have a limited history upon which an evaluation of our prospects and future performance can be made and have no history of profitable operations. ● We are highly dependent on the services of key executives, the loss of whom could materially harm our business and our strategic direction.

The loss of these suppliers, or their failure to supply us with these materials, would materially and adversely affect our business. ● We have substantial customer concentration, with a limited number of customers accounting for a substantial portion of our 2023 and 2022 revenues. ● We have a limited history upon which an evaluation of our prospects and future performance can be made and have no history of profitable operations. ● We are highly dependent on the services of key executives, the loss of whom could materially harm our business and our strategic direction.

Any additional investors will own a minority percentage of our common stock and will have minority voting rights. 16 Because we can issue additional shares of Common Stock, purchasers of our Common Stock may incur immediate dilution and experience further dilution.

Any additional investors will own a minority percentage of our common stock and will have minority voting rights. Because we can issue additional shares of Common Stock, purchasers of our Common Stock may incur immediate dilution and experience further dilution.

The delisting of our common stock could significantly impair our ability to raise capital and the value of your investment. ITEM 1B. UNRESOLVED STAFF COMMENTS. None.

The delisting of our common stock could significantly impair our ability to raise capital and the value of your investment. 16 ITEM 1B. UNRESOLVED STAFF COMMENTS. None.

As reported in Item 9A of this Annual Report on Form 10-K, our management concluded that our internal control over financial reporting was not effective as of December 31, 2022 and 2021 due to material weaknesses regarding our controls and procedures. The Company did not have sufficient segregation of duties to support its internal control over financial reporting.

As reported in Item 9A of this Annual Report on Form 10-K, our management concluded that our internal control over financial reporting was not effective as of December 31, 2023 and 2022 due to material weaknesses regarding our controls and procedures. The Company did not have sufficient segregation of duties to support its internal control over financial reporting.

For information regarding our current significant legal proceedings and contingencies, see “Legal Proceedings” in Part I, Item 3 and “Contingencies – Other” within Note 12 – Commitments and Contingencies in the notes to the financial statements. Climate change may adversely impact our facilities and our ongoing operations.

For information regarding our current significant legal proceedings and contingencies, see “Legal Proceedings” in Part I, Item 3 and “Contingencies – Other” within Note 11 – Commitments and Contingencies in the notes to the financial statements. Climate change may adversely impact our facilities and our ongoing operations.

We have substantial customer concentration, with a limited number of customers accounting for a substantial portion of our 2022 and 2021 revenues. We currently derive a significant portion of our revenues from three large corporate customers.

We have substantial customer concentration, with a limited number of customers accounting for a substantial portion of our 2023 and 2022 revenues. We currently derive a significant portion of our revenues from three large corporate customers.

Future epidemics or other public health emergencies could have similar effects. ● We operate in industries that are cyclical and sensitive to general economic conditions, which could have a material adverse effect on our operating results, financial condition and cash flows. ● Changing conditions in global markets including the impact of sanctions and tariffs, quotas and other trade actions and import restrictions 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 could reduce our sales. ● Significant decreases in scrap metal prices may adversely impact our operating results. ● Imbalances in supply and demand conditions in the global steel industry may reduce demand for our products. ● Impairment of long-lived assets and equity investments may adversely affect our operating results. ● We may be unable to renew facility leases, thus restricting our ability to operate. ● Increases in the value of the U.S. dollar relative to other currencies may reduce the demand for our products. ● Equipment upgrades, equipment failures and facility damage may lead to production curtailments or shutdowns. ● We are subject to legal proceedings and legal compliance risks that may adversely impact our financial condition, results of operations and liquidity. ● Climate change may adversely impact our facilities and our ongoing operations. ● Catastrophic events may disrupt our business and impair our ability to provide our platform to clients and consumers, resulting in costs for remediation, client and consumer dissatisfaction, and other business or financial losses. 5 ● We depend on a small number of suppliers for the materials necessary to run our business.

Risk Factors Summary Risks Relating to Our Business and Industry ● We operate in industries that are cyclical and sensitive to general economic conditions, which could have a material adverse effect on our operating results, financial condition and cash flows. ● Changing conditions in global markets including the impact of sanctions and tariffs, quotas and other trade actions and import restrictions 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 could reduce our sales. ● Significant decreases in scrap metal prices may adversely impact our operating results. ● Imbalances in supply and demand conditions in the global steel industry may reduce demand for our products. ● Impairment of long-lived assets and equity investments may adversely affect our operating results. ● We may be unable to renew facility leases, thus restricting our ability to operate. ● Increases in the value of the U.S. dollar relative to other currencies may reduce the demand for our products. ● Equipment upgrades, equipment failures and facility damage may lead to production curtailments or shutdowns. ● We are subject to legal proceedings and legal compliance risks that may adversely impact our financial condition, results of operations and liquidity. ● Climate change may adversely impact our facilities and our ongoing operations. ● Catastrophic events may disrupt our business and impair our ability to provide our platform to clients and consumers, resulting in costs for remediation, client and consumer dissatisfaction, and other business or financial losses. ● We depend on a small number of suppliers for the materials necessary to run our business.

We may not realize our deferred tax assets in the future. The assessment of recoverability of our deferred tax assets is based on an evaluation of existing positive and negative evidence as to whether it is more-likely-than-not that they will be realized. If negative evidence outweighs positive evidence, a valuation allowance is required.

The assessment of recoverability of our deferred tax assets is based on an evaluation of existing positive and negative evidence as to whether it is more-likely-than-not that they will be realized. If negative evidence outweighs positive evidence, a valuation allowance is required.

Our likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered in connection with development and expansion of a new business enterprise. We may sustain losses in the future as we implement our business plan. There can be no assurance that we will operate profitably.

We are subject to local, state and federal environmental laws and regulations in the U.S. and other countries relating to, among other matters: ● Waste disposal; ● Air emissions; ● Waste water and storm water management, treatment and discharge; ● The use and treatment of groundwater; ● Soil and groundwater contamination and remediation; ● Climate change; ● Generation, discharge, storage, handling and disposal of hazardous materials and secondary materials; and ● Employee health and safety. 13 We are also required to obtain environmental permits from governmental authorities for certain operations.

If, as a result of the impairment test, we determine that the fair value of any of our long-lived asset groups is less than its carrying amount, we may incur an impairment charge that could have a material adverse effect on our financial condition and results of operations.

We may be unable to renew facility leases, thus restricting our ability to operate. We lease a significant portion of our facilities. The cost to renew such leases may increase significantly, and we may not be able to renew such leases on commercially reasonable terms or at all.

We lease a significant portion of our facilities. The cost to renew such leases may increase significantly, and we may not be able to renew such leases on same or commercially reasonable terms, if not at all.

Significant decreases in scrap metal prices may adversely impact our operating results. The timing and magnitude of the cycles in the industries in which we operate are difficult to predict and are influenced by different economic conditions in the domestic market, where we typically acquire our raw materials, and foreign markets, where we typically sell the majority of our products.

The timing and magnitude of the cycles in the industries in which we operate are difficult to predict and are influenced by different economic conditions in the domestic market, where we typically acquire our raw materials, and foreign markets, where we typically sell the majority of our products.

A significant portion of our recycled scrap metal revenues is generated from sales to foreign customers, which are denominated in U.S. dollars, including customers located in Asia, the Mediterranean region and North, Central and South America.

Increases in the value of the U.S. dollar relative to other currencies may reduce the demand for our products. A significant portion of our recycled scrap metal revenues is generated from sales to foreign customers, which are denominated in U.S. dollars, including customers located in Asia, the Mediterranean region and North, Central and South America.

For the fiscal year ended December 31, 2022, three certain large customers individually accounted for $17,962,176, $5,332,834, and $4,301,328, or approximately 53%, 16%, and 13% of our revenues, respectively.

For the fiscal year ended December 31, 2023, two certain large customers individually accounted for $20,716,044 and $2,001,847 or approximately 58.08% and 5.61% of our revenues, respectively. For the fiscal year ended December 31, 2022, three certain large customers individually accounted for $17,962,176, $5,332,834, and $4,301,328, or approximately 53%, 16%, and 13% of our revenues, respectively.

We are authorized to issue up to 1,200,000,000 shares of Common Stock, of which 11,250,813 shares of Common Stock are issued and outstanding as of March 29, 2023. Our Board of Directors has the authority to cause us to issue additional shares of Common Stock without consent of any of stockholders.

We are authorized to issue up to 1,200,000,000 shares of Common Stock, of which 44,000,718 shares of Common Stock are issued and outstanding as of April 9, 2024. Our Board of Directors has the authority to cause us to issue additional shares of Common Stock without consent of any of stockholders.

Furthermore, our future success will also depend in part on the continued service of our key management personnel and our ability to identify, hire, and retain additional personnel. We carry “key-man” life insurance on the life of our executive officer.

Meeks to terminate such agreement upon notice. If we lose key employees, our business may suffer. Furthermore, our future success will also depend in part on the continued service of our key management personnel and our ability to identify, hire, and retain additional personnel. We carry “key-man” life insurance on the life of our executive officer.

Failure to renew these leases or find suitable alternative locations for our facilities may impact our ability to continue operations within certain geographic areas, which could have a material adverse effect on our financial condition, results of operations and cash flows. Increases in the value of the U.S. dollar relative to other currencies may reduce the demand for our products.

Failure to renew these leases or timely find suitable alternative locations for our facilities may impact our ability to continue operations within certain geographic areas, which could have a material adverse effect on our financial condition, results of operations and cash flows.

Furthermore, even without such laws or regulations, increased awareness and any adverse publicity in the global marketplace about the GHGs emitted by companies in the metals recycling and steel manufacturing industries could harm our reputation and reduce customer demand for our products.

Violation of or failure to obtain permits or comply with these laws or regulations could result in our business being fined or otherwise sanctioned by regulators or becoming subject to litigation by private parties.

We are also required to obtain environmental permits from governmental authorities for certain operations. Violation of or failure to obtain permits or comply with these laws or regulations could result in our business being fined or otherwise sanctioned by regulators or becoming subject to litigation by private parties.

See “Business – Environmental Matters” in Part I, Item 1 of this Annual Report for further detail. 14 Risks Relating to Intellectual Property We may not be able to protect our intellectual property rights throughout the world. The success of our business depends on our continued ability to use our existing tradename in order to increase our brand awareness.

Risks Relating to Intellectual Property We may not be able to protect our intellectual property rights throughout the world. The success of our business depends on our continued ability to use our existing tradename in order to increase our brand awareness.

These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our common stock, and therefore stockholders may have difficulty selling their shares. 15 We are a “smaller reporting company” within the meaning of Rule 12b-2 of the Exchange Act, and if we decide to take advantage of certain exemptions from various reporting requirements applicable to smaller reporting companies, our Common Stock could be less attractive to investors.

We are a “smaller reporting company” within the meaning of Rule 12b-2 of the Exchange Act, and if we decide to take advantage of certain exemptions from various reporting requirements applicable to smaller reporting companies, our Common Stock could be less attractive to investors.

It is not possible for us to predict the future level of demand for our services that will be generated by this customer or the future demand for the products and services of this customer in the end-user marketplace.

There are inherent risks whenever a large percentage of total revenues are concentrated with a limited number of customers. It is not possible for us to predict the future level of demand for our services that will be generated by this customer or the future demand for the products and services of this customer in the end-user marketplace.

Taxes for financial reporting purposes and cash tax liabilities in the future may be adversely affected by changes in such tax rules. In many cases, such changes put us at a competitive disadvantage compared to some of our major competitors, to the extent we are unable to pass the tax costs through to our customers.

In many cases, such changes put us at a competitive disadvantage compared to some of our major competitors, to the extent we are unable to pass the tax costs through to our customers. 11 We may not realize our deferred tax assets in the future.

In addition, if a court were to find this exclusive forum provision to be inapplicable or unenforceable in an action, we may incur costs associated with resolving the dispute in other jurisdictions, which could have a material adverse effect on our business and operations. 15 If securities or industry research analysts do not publish research or reports about our business, or if they issue an unfavorable or misleading opinion regarding our common stock, the market price and trading volume of our Common Stock could decline.

We are highly dependent on our management team, specifically our Chief Executive Officer, Danny Meeks. While we have an employment agreement with Danny Meeks, such employment agreement permits Mr. Meeks to terminate such agreement upon notice. If we lose key employees, our business may suffer.

If we lose key management or significant personnel, cannot recruit qualified employees, directors, officers, or other personnel or experience increases in our compensation costs, our business may materially suffer. We are highly dependent on our management team, specifically our Chief Executive Officer, Danny Meeks. While we have an employment agreement with Danny Meeks, such employment agreement permits Mr.

Potential adverse impacts from climate change, including rising temperatures and extreme weather events and conditions, may create health and safety issues for employees operating at our facilities and may lead to an inability to maintain standard operating hours. 9 Catastrophic events may disrupt our business and impair our ability to provide our platform to clients and consumers, resulting in costs for remediation, client and consumer dissatisfaction, and other business or financial losses.

Failure to obtain an adequate supply of end-of-life vehicles could adversely impact our ability to attract customers and charge admission fees and reduce our parts sales. Failure to obtain raw materials and other inputs to steel production such as graphite electrodes, alloys and other required consumables, could adversely impact our ability to make steel to the specifications of our customers.

Failure to obtain an adequate supply of end-of-life vehicles could adversely impact our ability to attract customers and charge admission fees and reduce our parts sales.

Demand for most of our products is cyclical in nature and sensitive to general economic conditions. The timing and magnitude of the cycles in the industries in which our products are used, including global steel manufacturing and nonresidential and infrastructure construction in the U.S., are difficult to predict.

The timing and magnitude of the cycles in the industries in which our products are used, including global steel manufacturing and nonresidential and infrastructure construction in the U.S., are difficult to predict. The cyclical nature of our operations tends to reflect and be amplified by changes in economic conditions, both domestically and internationally, and foreign currency exchange fluctuations.

As of March 29, 2023 members of our management team beneficially own approximately 39.35% of our outstanding common stock.

As of April 12, 2024, members of our management team beneficially own approximately 8.18% of our outstanding common stock.

Our facilities are subject to equipment failures and the risk of catastrophic loss due to unanticipated events such as fires, earthquakes, accidents or violent weather conditions.

Our facilities are subject to equipment failures and the risk of catastrophic loss due to unanticipated events such as fires, earthquakes, accidents or violent weather conditions. Interruptions in our processing and production capabilities and shutdowns resulting from unanticipated events could have a material adverse effect on our financial condition, results of operations and cash flows.

We spend substantial resources ensuring that we comply with domestic and foreign regulations, contractual obligations and other legal standards.

We are subject to legal proceedings and legal compliance risks that may adversely impact our financial condition, results of operations and liquidity. We spend substantial resources ensuring that we comply with domestic and foreign regulations, contractual obligations and other legal standards.

While we expect the COVID-19 pandemic to continue to negatively impact our results of operations, cash flows and financial position, the current level of uncertainty over the economic and operational impacts of COVID-19 means the related financial impact cannot be reasonably estimated at this time. 7 We operate in industries that are cyclical and sensitive to general economic conditions, which could have a material adverse effect on our operating results, financial condition and cash flows.

Risks Relating to Our Business and Industry We operate in industries that are cyclical and sensitive to general economic conditions, which could have a material adverse effect on our operating results, financial condition and cash flows. Demand for most of our products is cyclical in nature and sensitive to general economic conditions.

We are highly dependent on the services of key executives, the loss of whom could materially harm our business and our strategic direction. If we lose key management or significant personnel, cannot recruit qualified employees, directors, officers, or other personnel or experience increases in our compensation costs, our business may materially suffer.

There can be no assurance that we will operate profitably. 10 We are highly dependent on the services of key executives, the loss of whom could materially harm our business and our strategic direction.

Litigation may be necessary to defend against these claims. Risks Relating to Ownership of our Common Stock The market price of our Common Stock may be volatile and adversely affected by several factors.

In addition, we may have to find substitute to keep using similar technology to our products, which may be time-consuming and costly, if not impossible, upon such period our sales or manufacture of certain products may be negatively influenced. 13 Risks Relating to Ownership of our Common Stock The market price of our Common Stock may be volatile and adversely affected by several factors.

Removed

Risk Factors Summary Risks Relating to Our Business and Industry ● The coronavirus disease (COVID-19) pandemic has had, and may continue to have, an adverse effect on our business, results of operations, financial condition and cash flows.

Added

Failure to obtain raw materials and other inputs to steel production such as graphite electrodes, alloys and other required consumables, could adversely impact our ability to make steel to the specifications of our customers. 7 Significant decreases in scrap metal prices may adversely impact our operating results.

Removed

Risks Relating to Intellectual Property ● We may not be able to protect our intellectual property rights throughout the world. ● We may be involved in lawsuits to protect or enforce our intellectual property, which could be expensive, time-consuming and unsuccessful and the outcome might have an adverse effect on the success of our business. ● We may be subject to claims by third parties asserting that our employees or we have misappropriated their intellectual property or claiming ownership of what we regard as our own intellectual property.

Added

Taxes for financial reporting purposes and cash tax liabilities in the future may be adversely affected by changes in such tax rules.

Removed

Risks Relating to Our Business and Industry The coronavirus disease (COVID-19) pandemic has had, and may continue to have, an adverse effect on our business, results of operations, financial condition and cash flows. Future epidemics or other public health emergencies could have similar effects.

Added

Litigation may be necessary to defend against these claims. We may also face claims that our use of technology licensed or otherwise obtained from a third party infringes the rights of others, under such case we may not be allowed to continue using such technology and selling our inventories containing such technology.

Removed

Our operations expose us to risks associated with pandemics, epidemics or other public health emergencies, such as the COVID-19 pandemic which spread to many other countries including the United States. In March 2020, the World Health Organization characterized COVID-19 as a pandemic, and the President of the United States declared the COVID-19 outbreak a national emergency.

Added

In such cases, we may seek indemnification from our licensors/suppliers under our contracts with them. However, indemnification may be unavailable or insufficient to cover our costs and losses, depending on our use of the technology, whether we choose to retain control over conduct of the litigation, and other factors.

Removed

The outbreak resulted in governments around the world implementing stringent measures to help control the spread of the virus, followed by phased regulations and guidelines for reopening communities and economies. In addition, governments and central banks in several parts of the world have enacted fiscal and monetary stimulus measures to counteract the impacts of COVID-19.

Added

These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our common stock, and therefore stockholders may have difficulty selling their shares.

Removed

We are a company operating in a critical infrastructure industry, as defined by the U.S. Department of Homeland Security. Consistent with federal guidelines and with state and local orders to date, we have continued to operate across our footprint.

Removed

Notwithstanding our continued operations, COVID-19 has negatively impacted and may have further negative impacts on our financial performance, operations, supply chain and flows of raw materials, transportation and logistics networks and customers.

Removed

Due in large part to the impacts of and response to the spread of COVID-19, global economic conditions declined sharply during the second quarter of fiscal 2020, resulting in historic unemployment levels, rapid changes in supply and demand in certain industry sectors, businesses switching to remote work or ceasing operations, and consumers eliminating, restricting or redirecting spending.

Removed

The economic downturn adversely affected demand for our products and contributed to weaker supply and demand conditions affecting prices and volumes in the markets for our products, services and raw materials.

Removed

During fiscal 2020, in particular the second quarter, our operations, margins and results were adversely impacted by lower sales volumes of recycled metals driven by severely constrained supplies of scrap metal including end-of-life vehicles, leading to lower processed volumes at our recycling facilities.

Removed

We also experienced significant decreases in selling prices for our recycled metal products, softer demand, supply chain disruptions, reduced availability of shipping containers, and other logistics constraints. During 2021, metal prices recovered, contributing to an increase in revenues, although supply chain disruptions persisted. During 2022, we experienced minimal impacts from the COVID-19 pandemic.

Removed

The COVID-19 pandemic could further negatively impact our business or results of operations through the temporary closure of our operating locations or those of our customers or suppliers, disrupting scrap metal inflows to our recycling facilities, limiting our ability to process scrap metal through our shredder, inhibiting the manufacture of steel products at our steel mill, and delaying or preventing deliveries to our customers, among others.

Removed

In addition, the ability of our employees and our suppliers’ and customers’ employees to work may be significantly impacted by individuals contracting or being exposed to COVID-19, or as a result of prevention and control measures, which may significantly hamper our production throughout the supply chain and constrict sales channels.

Removed

Because the severity, magnitude and duration of the COVID-19 pandemic and its economic consequences are uncertain, continually changing and difficult to predict, the pandemic’s impacts on our operations and financial performance, as well as its impact on our ability to successfully execute our business strategies and initiatives, are also uncertain and difficult to predict.

Removed

Further, the ultimate impact of the COVID-19 pandemic on our operations and financial performance depends on many factors that are not within our control, including, but not limited to: governmental, business and individuals’ actions that have been and continue to be taken in response to the pandemic (including restrictions on travel and transportation and workforce pressures); the impact of the pandemic and actions taken in response on global and regional economies and on levels of economic activity; the availability of federal, state or local funding programs; general economic uncertainty in key global markets and financial market volatility; global economic conditions and levels of economic growth; and the pace of recovery when the COVID-19 pandemic subsides.

Removed

The cyclical nature of our operations tends to reflect and be amplified by changes in economic conditions, both domestically and internationally, and foreign currency exchange fluctuations.

Removed

Interruptions in our processing and production capabilities and shutdowns resulting from unanticipated events could have a material adverse effect on our financial condition, results of operations and cash flows. 10 We are subject to legal proceedings and legal compliance risks that may adversely impact our financial condition, results of operations and liquidity.

Removed

Catastrophic events may disrupt our business and impair our ability to provide our platform to clients and consumers, resulting in costs for remediation, client and consumer dissatisfaction, and other business or financial losses.

Removed

For the fiscal year ended December 31, 2021, one customer accounted for $6,682,019, or approximately 83% of our revenue. 11 There are inherent risks whenever a large percentage of total revenues are concentrated with a limited number of customers.

Removed

If securities or industry research analysts do not publish research or reports about our business, or if they issue an unfavorable or misleading opinion regarding our common stock, the market price and trading volume of our Common Stock could decline.

Item 2. Properties

Properties — owned and leased real estate

3 edited+5 added−10 removed4 unchanged

2022 filing

2023 filing

Biggest changeWe lease our scrap yard located at 130 Courtland Rd., Emporia, VA 23847, from DWM Properties, LLC, which is owned by our Chairman and Chief Executive Officer, for $11,200 per month. The lease expires on January 1, 2024, with two five year options to extend at the Company’s election.

Biggest changeWe lea se the property located at 101 Freeman Ave, Chesapeake, VA 23324 a s a yard for our truck fleet from DWM Properties, LLC, which is controlled by the Company’s Chief Executive Officer, on a month-to-month basis for $9,000 per month.

We believe that our facilities are adequate for our current needs and that, if required, we will be able to expand our current space or locate suitable new office space and obtain a suitable replacement for our executive and administrative headquarters.

The lease expires on January 1, 2024, with two five year options to extend at the Company’s election. We lease office space at 505 Crawford Street, Portsmouth, VA 23704 for $1,185 per month. The lease expires on March 31, 2024.

We lease office space at 505 Crawford Street, Portsmouth, VA 23704 for $1,185 per month. The lease expired on March 31, 2024.

Removed

ITEM 2. PROPERTIES We lease our scrap yard located at 22097 Brewers Neck Blvd., Carrollton, VA 23314, from DWM Properties, LLC, which is owned by our Chairman and Chief Executive Officer, for $55,850 per month. The lease expires on January 1, 2024, with two five year options to extend at the Company’s election.

Added

PROPERTIES We lease our scrap yards located at: 22097 Brewers Neck Blvd., Carrollton, VA 23314; 1576 Millpond Rd., Elizabeth City, NC 27909, 130 Courtland Rd., Emporia, VA 23847; 623 Highway 903 N., Greenville, NC 27834; 8952 Richmond Rd., Toano, VA 23168; 945 NC 11N, Kelford, NC 27805; 1100 E Princess Anne Rd, Norfolk, VA 23504; 277 Suburban Drive, Suffolk, VA 23434; 9922 Hwy 17 S., Vanceboro, NC 28586;1040 Oceana Blvd, Virginia Beach, VA 23454; 406 Sandy Street, Fairmont, NC 28340, from DWM Properties, LLC, which is controlled by the Company’s Chief Executive Officer, on a month-to-month basis for an aggregate of $54,970 per month.

Removed

We lease our scrap yard located at 1576 Millpond Rd., Elizabeth City, NC 27909, from DWM Properties, LLC, which is owned by our Chairman and Chief Executive Officer, for $11,200 per month. The lease expires on January 1, 2024, with two five year options to extend at the Company’s election.

Added

The lease expires on January 1, 2025 and the Company has two options to extend the lease by 5 years per option. The Company also has the option to extend the term of the lease for an additional year for the next 5 years upon the same terms and conditions.

Removed

We lease our scrap yard located at 623 Highway 903 N., Greenville, NC 27834, from DWM Properties, LLC, which is owned by our Chairman and Chief Executive Officer, for $11,200 per month. The lease expires on January 1, 2024, with two five year options to extend at the Company’s election.

Added

In the event the Company does not exercise the options, the lease will continue on a month-to-month basis. The Company cannot sublease the property under the lease agreement. On March 15, 2024, the Company entered into leasing agreements for a scrap yard located at 3030 E 55th Street, Cleveland, OH 44127.

Removed

We lease our scrap yard located at 8952 Richmond Rd., Toano, VA 23168, from DWM Properties, LLC, which is owned by our Chairman and Chief Executive Officer, for $11,200 per month. The lease expires on January 1, 2024, with two five year options to extend at the Company’s election.

Added

Removed

We lease our scrap yard located at 945 NC 11N, Kelford, NC 27805, from DWM Properties, LLC, which is owned by our Chairman and Chief Executive Officer, for $39,293 per month. The lease expires on January 1, 2024, with two five year options to extend at the Company’s election.

Added

Removed

We lease our scrap yard located at 1100 E Princess Anne Rd, Norfolk, VA 23504, from DWM Properties, LLC, which is owned by our Chairman and Chief Executive Officer, for $16,391 per month. The lease expires on January 1, 2024, with two five year options to extend at the Company’s election.

Removed

We lease our scrap yard located at 277 Suburban Drive, Suffolk, VA 23434, from DWM Properties, LLC, which is owned by our Chairman and Chief Executive Officer, for $15,450 per month. The lease expires on January 1, 2024, with two five year options to extend at the Company’s election.

Removed

We lease our scrap yard located at 9922 Hwy 17 S., Vanceboro, NC 28586, from DWM Properties, LLC, which is owned by our Chairman and Chief Executive Officer, for $8,742 per month.

Removed

The lease expires on January 1, 2024, with two five year options to extend at the Company’s election. 18 We lease our scrap yard located at 1040 Oceana Blvd, Virginia Beach, VA 23454, from DWM Properties, LLC, which is owned by our Chairman and Chief Executive Officer, for $15,407 per month.

Removed

The lease expires on January 1, 2024, with two five year options to extend at the Company’s election. We lease our scrap yard located at 406 Sandy Street, Fairmont, NC 28340, from DWM Properties, LLC, which is owned by our Chairman and Chief Executive Officer, for $8,000 per month.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−1 removed5 unchanged

2022 filing

2023 filing

Biggest changeWe investigate these claims as they arise and accrue estimates for resolution of legal and other contingencies when losses are probable and estimable. Regardless of outcome, litigation can have an adverse impact on us due to defense and settlement costs, diversion of management resources, negative publicity and reputational harm, and other factors. ITEM 4.

Removed

MINE SAFETY DISCLOSURES Not applicable. 19 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+4 added−0 removed4 unchanged

2022 filing

2023 filing

Biggest changeThese quotations below reflect inter-dealer prices, without retail mark-up, mark-down, or commission, and may not necessarily represent actual transactions. 2023 High Low First Quarter $ 1.54 $ 0.78 2022 High Low First Quarter $ 14.40 $ 3.2 Second Quarter $ 8.25 $ 3.92 Third Quarter $ 8.05 $ 1.59 Fourth Quarter $ 1.80 $ 0.78 2021 High Low First Quarter $ 17.10 $ 1.83 Second Quarter $ 26.37 $ 5.25 Third Quarter $ 17.49 $ 8.40 Fourth Quarter $ 19.20 $ 11.40 The last reported sale price of Common Stock as of March 31, 2023 on Nasdaq was $1.01 per share.

Biggest changeThese quotations below reflect inter-dealer prices, without retail mark-up, mark-down, or commission, and may not necessarily represent actual transactions. 2024 High Low First Quarter $ 1.03 $ 0.115 Second Quarter $ 0.17 $ 0.119 2023 High Low First Quarter $ 1.54 $ 0.77 Second Quarter $ 1.04 $ 0.75 Third Quarter $ 1.12 $ 0.58 Fourth Quarter $ 0.69 $ 0.391 2022 High Low First Quarter $ 14.40 $ 3.2 Second Quarter $ 8.25 $ 3.92 Third Quarter $ 8.05 $ 1.59 Fourth Quarter $ 1.80 $ 0.78 The last reported sale price of Common Stock as of April 15, 2024 on Nasdaq was $0.1177 per share. 18 Holders As of April 15, 2024, there were 131 stockholders of record.

Recent Sales of Unregistered Securities None. 20 Securities Authorized for Issuance Under Equity Compensation Plans Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) Weighted- average exercise price of outstanding options, warrants and rights (b) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a) (c) Equity compensation plans approved by security holders (1) 92,166 $ 148.11 567,300 Equity compensation plans not approved by security holders — — — Total 92,166 $ 148.11 567,300 (1) Includes the 2014 Stock Incentive Plan, 2015 Stock Incentive Plan, 2016 Stock Incentive Plan, 2017 Equity Incentive Plan, 2018 Equity Incentive Plan, 2021 Equity Incentive Plan, and 2022 Equity Incentive Plan.

Securities Authorized for Issuance Under Equity Compensation Plans Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) Weighted- average exercise price of outstanding options, warrants and rights (b) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a) (c) Equity compensation plans approved by security holders (1) 92,166 $ 148.11 891,371 Equity compensation plans not approved by security holders — — — Total 92,166 $ 148.11 891,371 (1) Includes the 2014 Stock Incentive Plan, 2015 Stock Incentive Plan, 2016 Stock Incentive Plan, 2017 Equity Incentive Plan, 2018 Equity Incentive Plan, 2021 Equity Incentive Plan, 2022 Equity Incentive Plan, and the 2023 Equity Incentive Plan. 19 ITEM 6.

Holders As of March 29, 2023, there were 131 stockholders of record. The number of record holders was determined from the records of our transfer agent and does not include beneficial owners of Common Stock whose shares are held in the names of various security brokers, dealers, and registered clearing agencies.

The number of record holders was determined from the records of our transfer agent and does not include beneficial owners of Common Stock whose shares are held in the names of various security brokers, dealers, and registered clearing agencies.

Added

Recent Sales of Unregistered Securities From March 18 to March 26, 2024, the Company issued 13,772,394 shares for the exercise of warrants for proceeds of $2,809,568. The Company issued 27,544,788 Inducement Warrants to the existing warrant holders who exercised during the inducement period.

Added

On March 29, 2024, the Company entered into an exchange agreement with DWM Properties LLC (the “Holder”), whereby the Company and Holder agreed to exchange $10,000,000 of that certain Secured Promissory Note, dated July 31, 2023, issued by the Company to the Holder for shares of the Company’s newly created Series D Convertible Preferred Stock (the “Preferred Stock”).

Added

In addition, the Company has the right to redeem the Preferred Stock in cash or shares of its Common Stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

35 edited+24 added−13 removed32 unchanged

2022 filing

2023 filing

Biggest changeThis decrease is partially due to a gain of the forgiveness of debt of $0 and $739,710 for the years ended December 31, 2022 and 2021, respectively. There was a gain on settlement of convertible notes payable and accrued interest, warrants and accounts payable of $516,920 and $182,160,381 for the years ended December 31, 2022 and 2021, respectively.

Biggest changeThere was a gain on settlement of convertible notes payable and accrued interest, warrants and accounts payable and cancelation of common shares in exchange for Series Y and Series Z preferred shares and cash of $632,540 and $516,920 for the years ended December 31, 2023 and 2022, respectively.

Actual results may differ from these estimates under different assumptions and conditions. Management believes the following critical accounting policies, among others, affect its more significant judgments and estimates used in the preparation of its consolidated financial statements. Goodwill: Goodwill is the excess of the purchase price paid over the fair value of the net assets of the acquired business.

Actual results may differ from these estimates under different assumptions and conditions. 24 Management believes the following critical accounting policies, among others, affect its more significant judgments and estimates used in the preparation of its consolidated financial statements. Goodwill: Goodwill is the excess of the purchase price paid over the fair value of the net assets of the acquired business.

We are required to write down the value of goodwill only when our testing determines the recorded amount of goodwill exceeds the fair value. Our annual measurement date for testing goodwill impairment is December 31. 26 None of the goodwill is deductible for income tax purposes.

We are required to write down the value of goodwill only when our testing determines the recorded amount of goodwill exceeds the fair value. Our annual measurement date for testing goodwill impairment is December 31. None of the goodwill is deductible for income tax purposes.

During the fiscal years ended December 31, 2022 and 2021, the Company recorded $2,499,753 and $0 in impairment expense related to goodwill, respectively. As of December 31, 2022 and 2021, the carrying value of goodwill was $0 and $2,499,753, respectively.

During the fiscal years ended December 31, 2023 and 2022, the Company recorded $0 and $2,499,753 in impairment expense related to goodwill, respectively. As of December 31, 2023 and 2022, the carrying value of goodwill was $0 and $0, respectively.

Cash flows used in operations in 2022 were impacted by depreciation of $875,809, amortization of intangible assets of $2,958,500, impairments on property and equipment of $227,186, amortization of right of use assets of $64,095, amortization of right of use assets (related-party) of $2,137,750, impairments on goodwill of $2,499,753, a gain in the fair value of derivative liabilities of $14,264,476, interest and amortization of debt discount of $32,340,565, a gain on the conversion of notes payable of $2,625,378, a gain on the settlement of notes payable and factoring advances of $516,920, a warrant expense for liquidated damages settlement of $7,408,681, an increase in rent due to a related party of $194,916, an increase in accounts receivable of $215,256, a decrease in inventories of $191,356, a decrease in prepaid expenses of $12,838, an increase in security deposits of $3,306, an increase in accounts payable of $1,703,299, an decrease in payroll wages payable of $1,738,665, a decrease in lease liability of $65,030, a decrease in lease liability (related-party) of $1,843,614, and a decrease in environmental remediation liabilities of $22,207.

Cash flows used in operations in 2022 were impacted by depreciation of $875,809, amortization of intangible assets of $2,958,500, amortization of right of use assets of $227,185, amortization of right of use assets (related-party) of $2,390,991, impairments on goodwill of $2,499,753, a gain in the fair value of derivative liabilities of $14,264,476, interest and amortization of debt discount of $32,340,565, a gain on the settlement of notes payable and factoring advances of $516,920, a warrant expense for liquidated damages settlement of $7,408,681, an increase in rent due to a related party of $194,916, an increase in accounts receivable of $215,256, a decrease in inventories of $191,356, a decrease in prepaid expenses of $12,838, an increase in security deposits of $3,306, an increase in payroll wages payable of $1,702,145, an decrease in accounts payable of $1,738,665, a decrease in lease liability of $65,030, a decrease in lease liability (related-party) of $2,369,038, gain on settlement of convertible and non-convertible notes payable and accrued interest for cash for $2,625,378, and a decrease in environmental remediation liabilities of $22,207.

Capital Resources As of December 31, 2022, we had cash on hand of $821,804. 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.

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.

Additional equity financing, if available, may be dilutive to the holders of our capital stock. Debt financing may involve significant cash payment obligations, covenants and financial ratios that may restrict our ability to operate and grow our business. Off-Balance Sheet Arrangements We do not have any off-balance sheet arrangements.

Liquidity and Capital Resources Net cash used in operating activities for the years ended December 31, 2022 and 2021 was $2,609,173 and $2,487,213, respectively.

Liquidity and Capital Resources Net cash used in operating activities for the years ended December 31, 2023 and 2022 was $1,833,310 and $2,609,173, respectively.

The Company is currently evaluating the adoption of ASU 2020-06 on its consolidated financial statements and related disclosures. 25 There are other various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

There are other various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

During the year ended December 31, 2022, there were proceeds from non-convertible notes of $2,725,000 and proceeds of $6,518,310 from factoring advances, offset by repayments of $220,000 towards non-convertible notes, repayments of $221,500 towards notes, repayments of advances of $12,000 and $2,381,310 towards factoring advances.

We have designed our systems to maximize the value of metals produced from this process. 21 We operate an automotive shredder at our Kelford, North Carolina location and a second automotive shredder at our Carrollton, Virginia is expected to come online in the second quarter of 2023.

We operate an automotive shredder at our Kelford, North Carolina location and a second automotive shredder at our Carrollton, Virginia is expected to come online in the second quarter of 2023.

Our other general and administrative expenses increased to $1,946,580 for the year ended December 31, 2022 from $1,789,698 for the year ended December 31, 2021, an increase of $156,882, as a result of the Company’s operations expanding from the Empire acquisition.

Our other general and administrative expenses increased to $3,200,445 for the year ended December 31, 2023 from $1,946,580 for the year ended December 31, 2022, an increase of $1,253,865, as a result of the Company’s operations expanding.

In cases of scrap cars, we remove the catalytic converters, aluminum wheels, and batteries for separate processing and sale prior to shredding the vehicle.

In cases of scrap cars, we remove the catalytic converters, aluminum wheels, and batteries for separate processing and sale prior to shredding the vehicle. We have designed our systems to maximize the value of metals produced from this process.

There were impairments of goodwill of $2,499,753 during the year ended December 31, 2022, as compared to $0 during the same period in 2021, an increase of $2,499,753.

There was common stock issued for services of $171,239 during the year ended December 31, 2023 as compared to $0 during the same period in 2022, an increase of $171,239. There were impairments of goodwill of $0 during the year ended December 31, 2023, as compared to $2,499,753 during the same period in 2022, a decrease of $2,499,753.

Fundraising During the year ended December 31, 2022, the Company received proceeds of $6,518,310 and $2,725,000 from the issuance of factoring advances and non-convertible notes, respectively. Required Capital over the Next Fiscal Year We may need additional capital in the future to continue to execute our business plan.

Fundraising During the year ended December 31, 2023, the Company received proceeds of $825,000, $3,746,109, $13,118,750, $2,841,181 and $1,000,000 from the issuance of bridge notes, factoring advances, convertible notes, sale of common stock, and non-convertible notes, respectively. 23 Required Capital over the Next Fiscal Year We may need additional capital in the future to continue to execute our business plan.

For the year ended December 31, 2021, there was cash used in the purchase of equipment of $218,693 and cash acquired in the acquisition of the business of $141,027. 24 Net cash provided by financing activities for the year ended December 31, 2022 and 2021 was $6,408,711 and $5,521,687, respectively.

For the year ended December 31, 2022, there was cash used in the purchase of equipment of $5,936,027. Net cash provided by financing activities for the year ended December 31, 2023 and 2022 was $4,235,841 and $6,408,711, respectively.

Net cash used by investing activities was $5,936,027 and $77,666 for the years ended December 31, 2022 and 2021, respectively. For the year ended December 31, 2022, there was cash used in the purchase of equipment of $5,936,027.

Net cash used by investing activities was $1,678,176 and $5,936,027 for the years ended December 31, 2023 and 2022, respectively. For the year ended December 31, 2023, there was cash used in the purchase of equipment of $1,760,945 and cash received for the advance of asset of $82,769.

Income Taxes: The Company accounts for its income taxes in accordance with Income Taxes Topic of the FASB ASC 740, which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry forwards.

During the fiscal years ended December 31, 2023 and 2022, the Company recorded $0 and $2,499,753 in impairment expense related to intangibles and goodwill and $2,958,500 and $2,958,500 in amortization of intangible assets, respectively. 25 Income Taxes: The Company accounts for its income taxes in accordance with Income Taxes Topic of the FASB ASC 740, which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry forwards.

Advertising expense increased by $50,398 to $83,993 for 2022 as compared to $33,595 for 2021 as the Company focused its resources on its scrap metal operations. Depreciation and amortization of intangible assets increased by $3,172,623 to $4,061,404 for 2022 from $888,781 in 2021 as a result of the Company acquiring fixed assets and intangible assets in the Empire acquisition.

Advertising expense increased by $330,201 to $414,194 for 2023 as compared to $83,993 for 2022 as the Company focused its resources on its scrap metal operations. Depreciation and amortization of intangible assets increased by $1,753,476 to $5,814,880 for 2023 from $4,061,404 in 2022 as a result of the Company acquiring additional fixed assets.

Competitors We compete with other metal recycling facility operators, such as Schnitzer Steel Industries, and are focused on utilizing technology to create operating efficiencies and competitive advantages over our peers.

Empire is headquartered in Chesapeake, Virginia and has 131 full-time employees as of April 15, 2024. 20 Competitors We compete with other metal recycling facility operators, such as Radius Recycling (f/k/a Schnitzer Steel Industries), and are focused on utilizing technology to create operating efficiencies and competitive advantages over our peers.

The increase of these expenditures resulted in our total operating expenses increasing to $23,323,775 during the year ended December 31, 2022 compared to $5,787,118 during the year ended December 31, 2021, an increase of $17,536,657.

The increase of these expenditures resulted in our total operating expenses increasing to $33,998,165 during the year ended December 31, 2023 compared to $23,323,774 during the year ended December 31, 2022, an increase of $10,674,391.

Lastly, the there was a gain in the fair value of derivative liabilities of $14,264,476 during fiscal year 2022, as compared to a gain of $300,885 during the prior year.

There was neither a gain nor loss in the fair value of derivative liabilities during the year ended December 31, 2023, as compared to a gain of $14,264,476 during the same period in 2022.

Loss from Operations Our loss from operations increased $7,955,358 to $10,882,922 during the year ended December 31, 2022, from $2,927,564 during the year ended December 31, 2021. 23 Other Income (Expense) During the year ended December 31, 2022, we incurred other expenses of $24,160,368, as compared to other income of $1,295,143 for the year ended December 31, 2021, a decrease of $25,455,511.

Loss from Operations Our loss from operations increased $8,631,841 to $19,514,762 during the year ended December 31, 2023, from $10,882,921 during the year ended December 31, 2022. Other Income (Expense) During the year ended December 31, 2023, we incurred other expenses of $7,421,228, as compared to $24,160,368 for the year ended December 31, 2022, a decrease of $16,739,140.

This increase was mainly attributed to the effectiveness of our acquisition of Empire on October 1, 2021, which significantly expanded our operations, number of employees, and internal systems.

This increase was mainly attributed to the increase in our hauling fleet, which significantly expanded our operations, number of employees, and internal systems, along with a one-time loss on asset charge.

Gross pro fit Our gross profit was $12,440,853 during the year ended December 31, 2022 from $2,859,554 during the same period in 2021, an increase of $9,581,299, due to the consummation of the Empire acquisition.

Gross pro fit Our gross profit was $14,483,403 during the year ended December 31, 2023 as compared to $12,440,853 during the same period in 2022, an increase of $2,042,550, due to healthier margins in both hauling and scrap metal.

There was an increase in rent expenses as a result of the Empire acquisition, increasing $2,859,036 from $605,480 during the year ended December 31, 2021 to $3,464,516 during the same period in 2022.

There was a decrease in rent expenses as a result of new leases and termination of existing leases, declining $362,032 from $3,464,516 during the year ended December 31, 2022 to $3,102,484 during the same period in 2023.

Consulting, accounting, and legal expenses increased to $897,891 during the year ended December 31, 2022 from $395,901 during the same period in 2021, an increase of $502,080 due to the fees associated with the Company’s listing on Nasdaq.

Consulting, accounting, and legal expenses increased to $1,713,613 during the year ended December 31, 2023 from $897,981 during the same period in 2022, an increase of $815,632 due to the Company conducting capital raises.

Cost of revenues Our cost of revenues increased to $21,537,572 for the year ended December 31, 2022 from $5,238,482 during the same period in 2021, an increase of $16,299,090, as a result of the Empire acquisition.

Cost of revenues Our cost of revenues decreased to $21,184,579 for the year ended December 31, 2023 from $21,537,572 during the same period in 2022, a decline of $352,993 due to lower metal prices, offset by an increase in hauling costs.

There were hauling and equipment maintenance costs of $3,378,452 in 2022, as compared to $513,928 in 2021, an increase of $2,864,524, due to the Company’s transportation and logistics costs increasing due to the Empire acquisition.

There were hauling and equipment maintenance costs of $2,898,202 in 2023, as compared to $3,378,452 in 2022, a decrease of $480,250, due to the Company recognizing more of these expenses as cost of revenue.

There was an increase in payroll and related expenses of $5,449,322 as payroll and related expenses were $6,991,095 for 2022 as compared to $1,541,773 for the same period in 2021, which was the result of an increase in our labor force primarily due to the closing of the Empire acquisition.

There was a decrease in payroll and related expenses of $356,295 as payroll and related expenses were $6,634,800 for 2023 as compared to $6,991,095 for the same period in 2022, which was the result of the Company’s Chief Executive Officer waiving his quarterly bonuses.

Net (Loss) Income available to common stockholders Our net (loss) income available to shareholders decreased by $66,635,355 to $(63,859,328) during the year ended December 31, 2022, from $2,776,027 in net income during the year ended December 31, 2021.

Lastly, there was a gain on tax credit of $717,064 during the year ended December 31, 2023 as compared to $0 during the same period in 2022. 22 Net Loss available to common stockholders Our net loss available to shareholders decreased by $30,262,186 to $33,597,142 during the year ended December 31, 2023, from $63,859,328 during the year ended December 31, 2022.

In addition, interest expense increased to $(34,079,230) during fiscal year 2022 as compared to $(10,561,789) during fiscal year 2021. There was also a warrant expense for a liquidated damages settlement of $7,408,681 during the year ended December 31, 2022 as compared to $0 during the same period in 2021.

There was a loss on asset of $10,048,308 during the year ended December 31, 2023 as compared to $0 during the same period in 2022, an increase of $10,048,308.

Results of Operations For the Year Ended December 31, 2022 Compared to the Year Ended December 31, 2021 For the Fiscal Year ended 31-Dec-22 31-Dec-21 $ Change %Change Revenues $ 33,978,425 $ 8,098,036 $ 25,880,389 319.59 % Gross Profit 12,440,853 2,859,554 9,581,299 335.06 % Operating Expenses 23,323,775 5,787,118 17,536,657 303.03 % Loss from Operations (10,882,922 ) (2,927,564 ) (7,955,358 ) 271.74 % Other Income (Expense) (24,160,368 ) 1,295,143 (25,455,511 ) (1,965.46 )% Net Income (Loss) Applicable to Common Stockholders $ (63,859,328 ) $ 2,776,027 $ (66,635,355 ) (2,400.39 )% 22 Revenues For the year ended December 31, 2022, we generated $33,978,425 in revenues, as compared to $8,098,036 for the year ended December 31, 2021, an increase of $25,880,389.

Results of Operations For the Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 For the Fiscal Year ended 31-Dec-23 31-Dec-22 $ Change %Change Revenues $ 35,667,982 $ 33,978,425 $ 1,689,557 4.97 % Gross Profit 14,483,403 12,440,853 2,042,550 16.42 % Operating Expenses 33,998,165 23,323,774 10,674,391 45.77 % Loss from Operations (19,514,762 ) (10,882,92 1) (8,631,841 ) 79.32 % Other Income (Expense) (7,421,228 ) (24,160,368 ) 16,739,140 (69.28 )% Net Income (Loss) Available to Common Stockholders $ (33,597,142 ) $ (63,859,328 ) $ 30,262,186 (47.39 )% Revenues For the year ended December 31, 2023, we generated $35,667,982 in revenues, as compared to $33,978,425 for the year ended December 31, 2022, an increase of $1,689,557.

Our gross margins increased to 37% during the year ended December 31, 2022 from 35% during the same period in 2021 due to the Company diversifying its customer base to get better prices on its products. Operating Expenses For the years ended December 31, 2022 and 2021, our operating expenses were $23,323,775 and $5,787,118, respectively, an increase of $17,536,657.

Gross profit on metal fell to $9,196,354 during the year ended December 31, 2023, or 36.28%, from $12,450,484 during the same period in 2022, or 37.29%, a decline of $3,254,130 21 Operating Expenses For the years ended December 31, 2023 and 2022, our operating expenses were $33,998,165 and $23,323,774, respectively, an increase of $10,674,391.

The amount of any impairment is measured as the difference between the carrying amount and the fair value of the impaired asset. During the fiscal years ended December 31, 2022 and 2021, the Company recorded $2,499,753 and $0 in impairment expense related to intangibles and goodwill and $2,958,500 and $739,625 in amortization of intangible assets, respectively.

The amount of any impairment is measured as the difference between the carrying amount and the fair value of the impaired asset.

Removed

One of our main corporate priorities is to open a facility with rail or deep-water port access to enable us to efficiently transport our products to domestic steel mills and overseas foundries.

Added

This increase was driven by hauling revenues growing to $10,156,938 for the year ended December 31, 2023 from $338,687 for the year ended December 31, 2022, an increase of $9,818,251 attributable to an increase in the number of clients as well as an increase in the number of trucks operated by the Company.

Removed

Because this would greatly expand the number of potential buyers of our processed scrap products, we believe opening a facility with port or rail access could result in an increase in both the revenue and profitability of our existing operations. Empire is headquartered in Chesapeake, Virginia and has 144 full-time employees as of March 14, 2023.

Added

Metal revenues decreased from $33,386,586 for the year ended December 31, 2022 to $25,350,883 for the year ended December 31, 2023, a decrease of $8,035,703 due to a decline in commodity prices.

Removed

This increase was due to the consummation of our acquisition of Empire on October 1, 2021, a robust market for recycled metals, the repurposing and implementation of Greenwave’s technology into Empire’s existing operations, and the opening of additional metal recycling facilities.

Added

There was other revenue, compromised rental income for the Portsmouth Blvd property, of $132,640 and other income for $27,522 for the year ended December 31, 2023, as compared to $48,813 and $204,339 for the same period in 2022, a decline of $92,990.

Removed

Our change in fair value of derivative liability for authorized share deficiency decreased to $0 in fiscal year 2022 from $(171,343,164) during fiscal year 2021. We realized a $2,625,378 gain on the conversion of convertible debentures during fiscal year 2022 as compared to a $(880) loss in fiscal year 2021.

Added

Hauling costs increased to $4,996,871 for the year ended December 31, 2023 from $77,437 during the same period in 2022, an increase of $4,919,434, due to an increased truck fleet.

Removed

Cash flows used in operations in 2021 were impacted by a loss on derivative liabilities for the authorized share shortfall of $171,343,164, amortization of right of use assets (related-party) of $373,640, amortization of right of use assets of $22,436, impairments of equipment of $388,877, depreciation and amortization of $888,781, loss on conversions of convertible notes payable of $880, expenses of $158,371 paid by a non-convertible noteholder of the Company, decrease of prepaid expenses of $97,132, increases of accounts payable and accrued expenses of $609,683, an increase in contract liability of $25,000, a decrease in operating lease liabilities of $30,544, a decrease in operating lease liabilities (related-party) of $382,815, largely offset by a gain on the settlement of convertible notes and accrued interest of $182,160,381, a gain on forgiveness of debt of $739,710, share-based compensation of $166,855, interest and amortization of debt discount of $10,198,924, change in the value of derivative liabilities of $300,855, increases in inventories of $381,002, increase of security deposits of $2,437, decreases of accrued payroll of $137,415, decrease in environmental remediation liabilities of $48,810, and a net loss of $1,632,421.

Added

Metal costs declined from $20,936,102 during the year ended December 31, 2022 to $16,154,529 during the same period in 2022, a decrease of $4,781,573 due to a decline in commodity prices.

Removed

During the year ended December 31, 2021, there were cash proceeds of $200,000 from the sale of Series X Preferred Stock, proceeds of $27,585,450 from the sale of convertible notes payable, proceeds of $1,465,053 from the sale of non-convertible notes payable, proceeds of $70,452 from advances, proceeds of $122,865 from related-parties, offset by repayments of $2,503,300 of convertible notes payable, repayments of $5,629,455 to non-convertible notes payable, repayments of advances of $4,165,973, payments of $26,000 to settle warrants and stock, redemptions of Series X Preferred Shares of $501,463, and redemptions of Series Y Preferred Shares of $11,095,942.

Added

There was cost of revenue of $33,179 for the year ended December 31, 2023, comprised mostly of sand, compared to $524,033 during the same period in 2022, a decrease of $490,854.

Removed

Recent Accounting Pronouncements In August 2020, the FASB issued ASU 2020-06, which simplifies the guidance on accounting for convertible debt instruments by removing the separation models for: (1) convertible debt with a cash conversion feature; and (2) convertible instruments with a beneficial conversion feature.

Added

Our gross margins increased to 41% during the year ended December 31, 2023 from 37% during the same period in 2022 due to more an emphasis on operational efficiency.

Removed

As a result, the Company will not separately present in equity an embedded conversion feature in such debt. Instead, we will account for a convertible debt instrument wholly as debt, unless certain other conditions are met.

Added

Gross profit on hauling grew from $261,250 during the year ended December 31, 2022, a margin of 77.14% to $5,160,067 during the same period in 2023, a margin of 50.80%, an increase of $4,898,817.

Removed

We expect the elimination of these models will reduce reported interest expense and increase reported net income for the Company’s convertible instruments falling under the scope of those models before the adoption of ASU 2020-06.

Added

We did not realize any gain or loss on the conversion of convertible Notes during the year ended December 31, 2023 while we realized a $2,625,378 gain on the conversion of convertible notes during in the same period in 2022. In addition, interest expense increased to $(8,897,267) during fiscal year 2023 as compared to $(34,079,230) during fiscal year 2022.

Removed

Also, ASU 2020-06 requires the application of the if-converted method for calculating diluted earnings per share and the treasury stock method will be no longer available. The provisions of ASU 2020-06 are applicable for fiscal years beginning after December 15, 2021, with early adoption permitted no earlier than fiscal years beginning after December 15, 2020.

Added

We did not have a warrant expense for a liquidated damages settlement during the year ended December 31, 2023, while we incurred an expense of $7,408,681 for the same during the year ended December 31, 2022.

Removed

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, as if it had originated the contracts.

Added

There was other gain of $17,572 during the year ended December 31, 2023, as compared to other loss of $(79,231) during the year ended December 31, 2022. There was gain on lease termination of $108,863 during the year ended December 31, 2023 as compared to $0 during the same period in 2022.

Removed

Prior to this ASU, an acquirer generally recognizes contract assets acquired and contract liabilities assumed that arose from contracts with customers at fair value on the acquisition date. The ASU is effective for fiscal years beginning after December 15, 2022, with early adoption permitted.

Added

Cash flows used in operations in 2023 were impacted by depreciation of $2,856,380, amortization of intangible assets of $2,958,500, loss on asset – related party of $9,850,850, loss on assets of $197,458 amortization of right of use assets net of $392,050, amortization of right of use assets-related party net of $1,250,218, interest and amortization of debt discount of $8,897,267, a gain on the settlement of notes payable and factoring advances of $632,540, an increase in due to a related party of $1,824,318, an increase in accounts receivable of $431,155, stock compensation of $171,239, a decrease in inventories of $10,782, a decrease in prepaid expenses of $200,590, an decrease in security deposit of $25,000, gain on deferred revenue of $25,000, gain on lease termination of $108,863 an increase in accounts payable of $856,151 an decrease in payroll wages payable of $614,271, and a decrease in lease liability of $1,619,790.

Removed

The ASU is to be applied prospectively to business combinations occurring on or after the effective date of the amendment (or if adopted early as of an interim period, as of the beginning of the fiscal year that includes the interim period of early application).

Added

During the year ended December 31, 2023, there were proceeds from non-convertible notes of $1,000,000, proceeds from convertible notes of $13,118,750, proceeds from the sale of common stock of $2,841,181, proceeds from warrant exercises of $15,511 proceeds from bridge financing of $825,000, proceeds from bank overdrafts of $118,763, and proceeds of $3,746,109 from factoring advances, offset by repayments of $4,858,587 towards non-convertible notes and repayments of $12,570,886 towards factoring advances.

Added

Going Concern and Management’s Liquidity Plans As of December 31, 2023, the Company had cash of $1,546,159 and a working capital deficit (current liabilities in excess of current assets) of $(20,579,715). During the year ended December 31, 2023, the net cash used in operating activities was $(1,833,310). The accumulated deficit as of December 31, 2023 was $(395,866,157).

Added

These conditions raise substantial doubt about the Company’s ability to continue as a going concern for one year from the issuance of the consolidated financial statements.

Added

During the year ended December 31, 2023, the Company received proceeds of $825,000, $1,000,000, $13,118,750, $2,841,181, and $3,746,109 from the issuance of bridge notes, non-convertible notes, convertible notes, sale of common stock, and factoring advances, respectively. Until the Company’s consummation of the Empire acquisition, the Company had experienced net losses and negative cash flows from operations.

Added

The Company believes it could generate positive cashflows from operations going forward but in the event the market for recycled metals experiences a sharp downturn or if it experiences delays in its growth plans, the Company may need to raise additional capital.

Added

The Company’s failure to raise capital as and when needed could have a negative impact on its financial condition and its ability to pursue its business strategy.

Added

Accordingly, the accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business for one year from the date the consolidated financial statements are issued.

Added

The carrying amounts of assets and liabilities presented in the consolidated financial statements do not necessarily purport to represent realizable or settlement values. The consolidated financial statements do not include any adjustments that might result should the Company be unable to continue as a going concern. Off-Balance Sheet Arrangements We do not have any off-balance sheet arrangements.

Added

Recent Accounting Pronouncements On January 1, 2020, The Company adopted ASU 2016-13 Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (“CECL”) methodology.

Added

The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including loan receivables and held to maturity debt securities.

Added

It also applies to Off-Balance Sheet (“OBS”) credit exposures not accounted for as insurance (loan commitments, standby letters of credit, financial guarantees, and other similar instruments) and net investments and leases recognized by a lessor in accordance with Topic 842 on leases. In addition, ASC 326 made changes to the accounting for available for sale debt securities.

Added

One such change is to require credit losses to be presented as an allowance rather than as a write down on available for sale debt securities management does not intend to sell or believes that it is more likely than not they will be required to sell.

Other GWAV 10-K year-over-year comparisons

GWAV 10-K 2023 vs 2024

Top changes in Greenwave Technology Solutions, Inc.'s 2023 10-K

Item 1. Business

Item 1A. Risk Factors

Item 2. Properties

Item 3. Legal Proceedings

Item 5. Market for Registrant's Common Equity

Item 7. Management's Discussion & Analysis

Other GWAV 10-K year-over-year comparisons