Overview

Greenwave Technology Solutions, Inc. (formerly MassRoots, Inc.) is a technology platform developer that recently transitioned into the scrap metal recycling industry. In October 2021, the company acquired Empire Services, Inc., which operates 13 metal recycling facilities in Virginia, North Carolina, and Ohio.

The company’s scrap metal recycling operations involve collecting, classifying, and processing various metal items such as appliances, construction materials, end-of-life vehicles, boats, and industrial machinery. This process includes crushing, shearing, shredding, separating, and sorting the metals into smaller pieces that are categorized by density and metal type prior to sale.

Greenwave operates two large automotive shredders that produce a denser, higher-quality recycled ferrous metal product. The shredded metal pieces then go through a series of magnetic and mechanical separation systems to extract the ferrous, nonferrous, and other materials, which are further processed and sold as finished products.

The company is headquartered in Chesapeake, Virginia and employs 180 people as of April 2025.

Results of Operations For the Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023

The key financial results for Greenwave in 2024 compared to 2023 are summarized in the table below:

Revenues:

• Revenues decreased by 6.59% to $33,315,859 in 2024 from $35,667,982 in 2023. This was primarily due to the company accumulating inventory during Q4 2024 in anticipation of higher metal prices in 2025.
• Metal revenues declined 8.11% to $23,296,239, while hauling revenues fell 2.71% to $9,881,820.

Cost of Revenues:

• Cost of revenues decreased 4.05% to $20,326,381 in 2024 from $21,184,579 in 2023, mainly due to the inventory accumulation strategy.
• Metal costs declined 10.19% to $14,508,923, while hauling costs increased 16.41% to $5,817,458.

Gross Profit:

• Gross profit decreased 10.31% to $12,989,478 in 2024 from $14,483,403 in 2023, as the company prioritized inventory accumulation over sales.
• Gross margins declined to 39% in 2024 from 41% in 2023.

Operating Expenses:

• Operating expenses increased 38.98% to $47,251,411 in 2024 from $33,998,165 in 2023.
• Key increases were in payroll, depreciation/amortization, equipment maintenance, consulting/legal, and warrants issued for services.

Other Income (Expense):

• Other income was $10,344,580 in 2024 compared to other expenses of $7,421,228 in 2023, a swing of $17,765,808.
• This was primarily due to a $48.3 million gain in the fair value of derivative liabilities in 2024.

Net Loss:

• Net loss available to common stockholders increased 198.97% to $100,446,189 in 2024 from $33,597,142 in 2023.

Liquidity and Capital Resources

• Net cash used in operating activities was $17.3 million in 2024 compared to $1.8 million in 2023, impacted by the inventory buildup and other working capital changes.
• Net cash used in investing activities was $15.9 million in 2024 compared to $1.7 million in 2023, primarily for the purchase of equipment.
• Net cash provided by financing activities was $34.2 million in 2024 compared to $4.2 million in 2023, from proceeds of stock/warrant sales and other financing.
• As of December 31, 2024, the company had $2.6 million in cash but a working capital deficit of $13.5 million.
• The company may need to raise additional capital in the future to continue operations, which could be dilutive or restrictive.
• The company’s ability to continue as a going concern is uncertain based on its current financial position and cash flows.

Critical Accounting Policies

Greenwave’s critical accounting policies include:

• Intangible assets: Finite-lived intangible assets are amortized over their estimated useful lives.
• Income taxes: The company accounts for income taxes using deferred tax assets/liabilities and uncertain tax positions.
• Estimates and judgments: Management makes various estimates and judgments in preparing the financial statements, including stock-based compensation, fair values, and asset impairments.