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Item 1. Financial Statements

2022-05-16 compared with 2021-11-22 · 1023 added, 1230 removed, 145 unchanged (94% of the section changed)

FINANCIAL STATEMENTS

TECHNOLOGY SOLUTIONS, INC.

MASSROOTS, INC.)

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

CONSOLIDATED BALANCE SHEETS

Current assets:

1 unchanged sentence

Total current assets

LIABILITIES AND STOCKHOLDERS' DEFICIT

Property and equipment, net

Operating lease right of use assets, net - related party

Operating lease right of use assets, net

Licenses, net

Customer list, net

Intellectual property, net

Security deposit

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

1 unchanged sentence

Accrued payroll and related expenses

Deferred revenue

Non-convertible notes payable, current portion, net of debt discount of $ 15,862 and $ 0 , respectively

Contract liabilities

Non-convertible notes payable, current portion, net of unamortized debt discount of $ 9,611 and $ 11,724 , respectively

Derivative liabilities

Convertible notes payable

Convertible notes payable, net of unamortized debt discount of $ 12,502,199 and $ 31,255,497 , respectively

Due to related parties

Operating lease obligations, current portion - related party

Operating lease obligations, current portion

Environmental remediation

Total current liabilities

Non-convertible notes payable, net of debt discount of $ 1,636 and $ 0 , respectively

PPP note payable

Operating lease obligations, less current portion - related party

Operating lease obligations, less current portion

Non-convertible notes payable, net of unamortized debt discount of $ 0 and $ 289 , respectively

Total liabilities

Commitments and contingencies (See Note 9)

Stockholders' deficit:

Stockholders’ equity (deficit):

Preferred stock - 10,000,000 shares authorized:

Preferred stock - Series X, $ 0.0001 par value, $ 20,000 stated value, 100 shares authorized;

26.05 and 16.05 shares issued and outstanding, respectively

Preferred stock - Series Y, $ 0.001 par value, $ 20,000 stated value, 1,000 shares authorized;

720.515674 and 654.781794 shares issued;

720.515674 and 626.995464 shares outstanding, and 0 and 27.78633 to be issued, respectively

Preferred stock - Series Z, $ 0.001 par value, $ 20,000 stated value, 500 shares authorized;

500 and 0 shares issued;

0 and 0 shares outstanding, and 500 and 0 to be issued, respectively

Preferred stock - Series C, $ 0.001 par value, 1,000 shares authorized;

1,000 shares issued and outstanding

Preferred stock - Series A, $ 0.001 par value, 6,000 shares authorized;

0 shares issued and outstanding

Preferred stock - Series B, $ 0.001 par value, 2,000 shares authorized;

0 shares issued and outstanding

Common stock, $0.001par value, 1,200,000,000 shares authorized;

500 and 500 shares issued and outstanding, respectively

Common stock, $ 0.001 par value, 1,200,000,000 and 500,000,000 shares authorized;

3,338,416 and 3,331,916 shares issued and outstanding, respectively

Common stock to be issued, 2,000 and 8,000 shares, respectively

1 unchanged sentence

Discount on preferred stock

( 20,973,776 )

Accumulated deficit

1 unchanged sentence

( 298,409,685 )

Total stockholders' deficit

( 17,643,687 )

Total stockholders’ equity (deficit)

( 23,348,062 )

Total liabilities and stockholders' deficit

The accompanying notes are an integral part of these unaudited condensed

consolidated financial statements.

Total liabilities and stockholders’ equity (deficit)

accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

TECHNOLOGY SOLUTIONS, INC.

MASSROOTS, INC.)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended

September 30,

Nine Months Ended

September 30,

Operating Expenses:

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three Months Ended March 31,

Cost of Revenues

Operating Expenses:

Payroll and related expense

Rent, utilities and property maintenance ($ 502,761 and $ 0 , respectively, to related party)

Hauling and equipment maintenance

Depreciation and amortization expense

Consulting, accounting and legal

Other general and administrative expenses

1 unchanged sentence

Loss From Operations

( 1,196,292 )

Other Income (Expense):

Interest expense

( 1,602,204 )

( 1,667,413 )

Other Expense:

Interest expense and amortization of debt discount

( 19,405,677 )

1 unchanged sentence

( 29,453,448 )

( 43,406,183 )

Change in fair value of derivative liabilities

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

Gain on forgiveness of debt

Gain on settlement of convertible notes payable and accrued interest, warrants and accounts payable and cancelation of common shares

Gain (loss) on conversion of convertible notes

Total Other Income (Expense)

( 46,708,918 )

Net Income (Loss) Before Income Taxes

( 47,402,959 )

Provision for Income Taxes (Benefit)

Net Income (Loss)

( 47,402,959 )

Deemed dividend resulting from amortization of preferred stock discount

( 34,798,923 )

Deemed dividend from warrant price protection

( 95,002,933 )

Net Income (Loss) Available to Common Stockholders

$ ( 17,531,575 )

Total Other Expense

( 4,977,781 )

Net Income (Loss) Per Common Share:

Weighted Average Common Shares Outstanding:

( 25,753,349 )

Net Loss Before Income Taxes

( 5,175,475 )

( 26,055,097 )

Provision for Income Taxes (Benefit)

( 5,175,475 )

( 26,055,097 )

Deemed dividend resulting from amortization of preferred stock discount

( 21,138,841 )

Net Loss Available to Common Stockholders

$ ( 5,175,475 )

$ ( 47,193,938 )

The accompanying notes are an integral part of these unaudited condensed

consolidated financial statements.

Net Loss Per Common Share:

Weighted Average Common Shares Outstanding:

accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

TECHNOLOGY SOLUTIONS, INC.

MASSROOTS, INC.)

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021

Balance at June

30, 2021 (unaudited)

$ 298,648,071

$ ( 324,596,745 )

$ ( 24,542,427 )

Series Z preferred shares

issued as equity kicker for note payable

Series Z preferred shares

issued as part of settlement agmt

at September 30, 2021 (unaudited)

$ 299,667,352

$ ( 318,717,287 )

$ ( 17,643,687 )

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

THE THREE MONTHS ENDED MARCH 31, 2022

Preferred Stock Series Z

Common Stock to be Issued

Additional Paid

Balance at December 31, 2021

2 unchanged sentences

$ ( 23,348,062 )

$ ( 37,733,852 )

Issuance of common shares

previously to be issued

( 1,006,250 )

Issuance of common shares

for services rendered

Common shares issued upon

conversion of convertible notes

Cancelation of common shares

and warrants in exchange for cash paid per cancelation agreement

( 1,485,000 )

Sale of Series X preferred

BCF recognized upon issuance

of Series X preferred shares

( 2,852,500 )

Series Y preferred shares

issued in exchange for convertible notes, accrued interest and warrants

BCF recognized upon issuance

of Series Y preferred shares

( 10,972,647 )

Deemed dividend resulting

from amortization of preferred stock discount

Issuance of common stock previously recorded as to be issued

Elimination of derivative liabilities due to resolution of authorized share shortfall

$ ( 5,175,475 )

Series Z preferred shares

issued as equity kicker for note payable

Series Z preferred shares

issued as part of settlement agmt

at September 30, 2021 (unaudited)

$ ( 5,175,475 )

Balance at March 31, 2022

$ 304,818,048 -

$ ( 303,585,160 )

The accompanying notes are an integral part of these unaudited condensed

consolidated financial statements.

accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

TECHNOLOGY SOLUTIONS, INC.

MASSROOTS, INC.)

CONDENSED CONSOLIDATED STATEMENTS

OF CHANGES IN STOCKHOLDERS' DEFICIT

FOR THE THREE AND NINE MONTHS ENDED

SEPTEMBER 30, 2020

Preferred Stock

Balance at June 30, 2020 (unaudited)

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

THE THREE MONTHS ENDED MARCH 31, 2021

Common Stock to

Balance at December 31, 2020

$ 284,420,948

$ ( 20,973,776 )

Balance at September 30, 2020 (unaudited)

$ ( 301,185,712 )

$ ( 37,733,852 )

Preferred Stock

Balance at December 31, 2019

Common stock issued upon conversion of convertible notes

Sale of Series X preferred shares

BCF recongized upon issuance of Series X preferred shares

$ ( 2,852,500 )

Series Y preferred shares issued in exchange for convertible notes, accrued

interest and warrants

BCF recongized upon issuance of Series Y preferred shares

$ ( 557,037 )

Issuance of common shares previously to be issued

Deemed dividend resulting from amortization of preferred stock discount

$ ( 21,138,841 )

Common shares issued upon conversion of convertible notes and accrued interest

Common shares contributed back to the Company and promptly retired

Deemed dividend related to warrant price protection

$ ( 26,055,097 )

Balance at March 31, 2021

$ 288,259,950

Balance at September 30, 2020 (unaudited)

$ ( 3,244,472 )

$ ( 348,379,650 )

The accompanying notes are an integral part of these unaudited condensed

consolidated financial statements.

$ ( 63,359,469 )

accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

TECHNOLOGY SOLUTIONS, INC.

MASSROOTS, INC.)

CONDENSED CONSOLIDATED STATEMENTS

Nine Months Ended

September 30,

CONSOLIDATED STATEMENTS OF CASHFLOWS

For the Three Months Ended March 31,

Cash flows from operating activities:

Net income (loss)

$ ( 5,175,475 )

$ ( 26,055,097 )

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Depreciation and amortization

Amortization of right of use assets, net - related party

Amortization of right of use assets, net

Change in fair value of derivative liabilities

( 14,264,476 )

Change in derivative liability for authorized shares shortfall

3 unchanged sentences

( 3,917,734 )

Gain on forgiveness of debt

Share-based compensation

Changes in operating assets and liabilities:

Payment of accrued rent due to related party

Prepaid expenses

1 unchanged sentence

Accrued payroll and related expenses

Deferred revenue

Net cash used in operating activities

Environmental remediation

Principal payments made on operating lease liabilities - related party

Principal payments made on operating lease liabilities

Net cash generated by operating activities

Cash flows from investing activities:

Purchases of property and equipment - related party

Purchases of property and equipment

Net cash used in investing activities

( 1,121,793 )

Cash flows from financing activities:

Bank overdrafts

Proceeds from sale of Series X preferred shares

Proceeds from issuance of convertible notes payable

Proceeds from issuance of non-convertible notes payable

Repayment of non-convertible notes payable

Repayment of a non-convertible note payable

Proceeds from advances

Repayments of advances

Cash paid in settlement of debt and warrants

( 1,176,000 )

Net cash provided by financing activities

Net cash provided by (used in) financing activities

Net decrease in cash

( 1,168,029 )

Cash, beginning of period

4 unchanged sentences

Supplemental disclosure of non-cash investing and financing activities:

Amortization of discount on preferred stock

Common shares issued upon conversion of convertible notes and accrued interest

Series Y preferred shares issued as settlement for convertible notes payable, accrued interest and warrants

Increase in right of use assets and operating lease liabilities

Issuance of common shares previously to be issued

Common shares contributed back to the Company and promptly retired

Deemed dividend related to warrant price protection

Derivative liability recognized as debt discount on newly issued convertible notes

Reclassify accrued interest to convertible notes payable

Reduction of derivative liabilities stemming from settlement of convertible notes payable, accrued interest and warrants in exchange for Series Y preferred shares

Reduction of derivative liabilities stemming from settlement of convertible notes payable and accrued interest and cancelation of common shares and warrants for cash

$ 169,815,037

Series Z preferred shares issued as equity kicker for note payable

Series Z preferred shares issued as part of settlement agreement

The accompanying notes are an integral part of these unaudited condensed

consolidated financial statements.

MASSROOTS, INC.

Notes to Condensed

Consolidated Financial Statements

September 30, 2021

NOTE 1 – NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Amortization of discount on preferred stock

Common shares issued upon conversion of convertible notes and accrued interest

Reclassification of derivative liability to additional paid in capital due to

resolution of authorized share shortfall

accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

TECHNOLOGY SOLUTIONS, INC.

MassRoots, Inc.)

(“MassRoots” or the

“Company”) is a technology company focused on developing cloud-based solutions to deliver informative content and improve

operating efficiencies.

The Company was incorporated in the State of Delaware on April 26, 2013.

Our unaudited condensed consolidated

financial statements include the accounts of DDDigtal, Inc., Odava, Inc., MassRoots Supply Chain, Inc., and MassRoots Blockchain Technologies,

Inc., our wholly-owned subsidiaries.

Basis of Presentation

The interim unaudited condensed

consolidated financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations

of the Securities and Exchange Commission (the “SEC”).

In the opinion of the Company’s management, all adjustments (consisting

of normal recurring adjustments and reclassifications and non-recurring adjustments) necessary to present fairly the Company’s results

of operations for the three and nine months ended September 30, 2021 and 2020, its cash flows for the nine months ended September 30,

2021 and 2020, and its financial position as of September 30, 2021 have been made.

The results of operations for such interim periods

are not necessarily indicative of the operating results to be expected for the full year.

Certain information and disclosures normally included

in the notes to the annual consolidated financial statements have been condensed or omitted from these interim unaudited condensed consolidated

financial statements.

Accordingly, these interim unaudited condensed consolidated financial statements should be read in conjunction with

the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December

31, 2020 as filed with the SEC on April 16, 2021 (the “Annual Report”).

The December 31, 2020 balance sheet is derived from

those statements.

NOTE 2 – GOING CONCERN AND MANAGEMENT’S

LIQUIDITY PLANS

As of September 30, 2021, the Company had cash

of $ 1,082 and a working capital deficit (current liabilities in excess of current assets) of $ 17,514,830 .

During the nine months ended

September 30, 2021, the net loss available to common stockholders was $ 17,531,575 and net

cash used in operating activities was $ 548,640 .

These conditions raise substantial doubt about the Company’s ability to continue

as a going concern for one year from the issuance of the unaudited condensed consolidated financial statements.

During the nine months ended September 30, 2021,

the Company received proceeds of $ 200,000 and $ 1,515,424 from the issuance of preferred shares and non-convertible notes, respectively.

The Company does not have sufficient cash to fund operations for the next fiscal year.

The Company’s primary source of operating

funds since inception has been cash proceeds from the public and private placements of the Company’s securities, including debt

and equity securities, and proceeds from the exercise of warrants and options.

The Company has experienced net losses and negative cash

flows from operations since inception and expects these conditions to continue for the foreseeable future.

Company’s ability to continue its operations is dependent upon its ability to obtain additional capital through public or private

equity offerings, debt financings or other sources;

however, financing may not

be available to the Company on acceptable terms, or at all.

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, and the Company may be forced to curtail

or cease operations.

Management’s plans

regarding these matters encompass the following actions:

1) obtain funding from new and current investors to alleviate the Company’s

working capital deficiency;

and 2) implement a plan to increase revenues.

The Company’s continued existence is dependent upon its

ability to translate its audience into revenues.

However, the outcome of management’s plans cannot be determined with any degree

of certainty.

Accordingly, the accompanying

unaudited condensed 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 unaudited condensed consolidated

financial statements are issued.

The carrying amounts of assets and liabilities presented in the unaudited condensed consolidated financial

statements do not necessarily purport to represent realizable or settlement values.

The unaudited condensed consolidated financial statements

do not include any adjustments that might result should the Company be unable to continue as a going

In March 2020, the World

Health Organization declared COVID-19 a global pandemic.

This contagious disease outbreak, which has continued to spread, and any related

adverse public health developments, has adversely affected workforces, customers, economies, and financial markets globally, leading to

an economic downturn.

to Condensed Consolidated Financial Statements

31, 2022 (Unaudited)

1 – NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Technology Solutions, Inc.

(“Greenwave” or the “Company”) was incorporated in the State of Delaware on April

26, 2013 as a technology platform developer under the name MassRoots, Inc.

The Company sold its social media assets in October 2021 and

has discontinued all operations related to this business.

On September 30, 2021, we closed our acquisition of Empire Services, Inc.

which operates 11 metal recycling facilities in Virginia and North Carolina.

The acquisition was effective October 1, 2021 upon the effectiveness

of the Certificate of Merger in Virginia.

accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted

in the United States of America (“U.S.

GAAP”) for financial information and pursuant to the rules and regulations of the

Securities and Exchange Commission (the “SEC”).

Our condensed consolidated financial statements include the accounts of Empire

Services, Inc., Empire Staffing, LLC, Liverman Metal Recycling, Inc., our wholly owned subsidiaries.

All intercompany transactions were

eliminated during consolidation.

of Presentation

interim unaudited condensed consolidated financial statements included herein have been prepared by the Company, without audit, pursuant

to the rules and regulations of the SEC.

In the opinion of the Company’s management, all adjustments (consisting of normal recurring

adjustments and reclassifications and non-recurring adjustments) necessary to present fairly the Company’s results of operations

for the three months ended March 31, 2022 and 2021, its cash flows for the three months ended March 31, 2022 and 2021, and its financial

position as of March 31, 2022 have been made.

The results of operations for such interim periods are not necessarily indicative of the

operating results to be expected for the full year.

information and disclosures normally included in the notes to the annual consolidated financial statements have been condensed or omitted

from these interim unaudited condensed consolidated financial statements.

Accordingly, these interim unaudited condensed consolidated

financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual

Report on Form 10-K for the fiscal year ended December 31, 2021 as filed with the SEC on April 14, 2022 (the “Annual Report”).

The December 31, 2021 balance sheet is derived from those statements.

2 – GOING CONCERN AND MANAGEMENT’S LIQUIDITY PLANS

of March 31, 2022, the Company had cash of $ 1,790,264 and

a working capital deficit (current liabilities in excess of current assets) of $( 32,250,552 ).

The accumulated deficit as of March 31, 2022 was $( 303,585,160 ).

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.

the Company’s consummation of the Empire acquisition, the Company had experienced net losses and negative cash flows from operations.

The Company believes it could generate positive cashflows from operations going forward but in the event its outstanding debt notes are

not converted to common stock, 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.

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.

the accompanying condensed 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 condensed consolidated financial

statements are issued.

The carrying amounts of assets and liabilities presented in the condensed consolidated financial statements do

not necessarily purport to represent realizable or settlement values.

The condensed consolidated financial statements do not include

any adjustments that might result should the Company be unable to continue as a going concern.

March 2020, the World Health Organization declared COVID-19 a global pandemic.

This contagious disease outbreak, which has continued

to spread, and any related adverse public health developments, has adversely affected workforces, customers, economies, and financial

markets globally, leading to an economic downturn.

It has also disrupted the normal operations of many businesses, including ours.

It is not possible for us to predict

the duration or magnitude of the adverse results of the outbreak of COVID-19 and its effects on our business including our financial condition,

liquidity, or results of operations at this time.

Management is actively monitoring the global situation and its impact on the Company’s

financial condition, liquidity, operations, customers, industry, and workforce.

Given the daily evolution of the COVID-19 outbreak and

the global responses to curb its spread, the Company is not able to estimate the effects that the COVID-19 outbreak will have on its results

of operations, financial condition, or liquidity for fiscal year 2021.

As of the date of this Quarterly Report on Form 10-Q, the Company

has experienced delays in securing new customers and related revenues and the longer this pandemic continues there may be additional impacts.

Furthermore, the COVID-19 outbreak has and may continue to impact the Company’s ability to raise capital.

Although the Company cannot

estimate the length or gravity of the impact of the COVID-19 outbreak at this time, if the pandemic continues, it may have a material

adverse effect on the Company’s results of future operations, financial position, liquidity, and capital resources, and those of

the third parties on which the Company relies in fiscal year 2021.

NOTE 3 – SUMMARY

OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The unaudited condensed consolidated financial

statements include the accounts of MassRoots, Inc.

is not possible for us to predict the duration or magnitude of the adverse results of the outbreak of COVID-19 and its effects on our

business including our financial condition, liquidity, or results of operations at this time.

Management is actively monitoring the global

situation and its impact on the Company’s financial condition, liquidity, operations, customers, industry, and workforce.

the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, the Company is not able to estimate the effects

that the COVID-19 outbreak will have on its results of operations, financial condition, or liquidity for fiscal year 2022.

the Company cannot estimate the length or gravity of the impact of the COVID-19 outbreak at this time, if the pandemic continues, it

may have a material adverse effect on the Company’s results of future operations, financial position, liquidity, and capital resources,

and those of the third parties on which the Company relies in fiscal year 2022.

3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

of Consolidation

condensed consolidated financial statements include the accounts of Greenwave Technology Solutions, Inc.

and its wholly owned subsidiaries.

All intercompany balances and transactions have

been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity

with accounting principles generally accepted in the United States of America (“U.S.

GAAP”) requires management to make estimates

and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date

of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Significant estimates include

stock-based compensation, fair values relating to derivative liabilities, fair value of payroll tax liabilities, deemed dividends and

the valuation allowance related to deferred tax assets.

All intercompany balances and transactions have been eliminated in consolidation.

preparation of financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the

reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and

the reported amounts of revenues and expenses during the reporting period.

Significant estimates include estimates used in the calculation

of stock-based compensation, fair values relating to derivative liabilities, payroll tax liabilities with interest and penalties, deemed

dividends, assumptions used in right-of-use and lease liability calculations, valuations and impairments of goodwill and intangible assets

acquired in business combination, estimated useful life of long-lived assets and finite life tangible assets, determination of environmental

remediation liabilities, and the valuation allowance related to deferred tax assets.

Actual results may differ from these estimates.

Fair Value of Financial

The Financial Accounting

Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Subtopic 825-10, “Financial Instruments”

(“ASC 825-10”) requires disclosure of the fair value of certain financial instruments.

The estimated fair value of certain

financial instruments, including cash, accounts payable and accrued liabilities are carried at historical cost basis, which approximates

their fair value because of the short-term maturity of these instruments.

All other significant financial assets, financial liabilities

and equity instruments of the Company are either recognized or disclosed in the condensed consolidated financial statements together with

other information relevant for making a reasonable assessment of future cash flows, interest rate risk and credit risk.

The Company follows ASC 825-10, which permits

entities to choose to measure many financial instruments and certain other items at fair value.

For purposes of the unaudited

condensed consolidated statements of cash flows, the Company considers highly liquid investments with an original maturity of three months

or less to be cash equivalents.

As of September 30, 2021 and December 31, 2020, the Company had no cash equivalents.

The Company maintains

its cash in banks insured by the Federal Deposit Insurance Corporation in accounts that at times may be in excess of the federally insured

limit of $ 250,000 per bank.

Value of Financial Instruments

Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Subtopic 825-10, “Financial

Instruments” (“ASC 825-10”) requires disclosure of the fair value of certain financial instruments.

The estimated fair

value of certain financial instruments, including cash, accounts payable and accrued liabilities are carried at historical cost basis,

which approximates their fair value because of the short-term maturity of these instruments.

All other significant financial assets,

financial liabilities and equity instruments of the Company are either recognized or disclosed in the condensed consolidated financial

statements together with other information relevant for making a reasonable assessment of future cash flows, interest rate risk and credit

Company follows ASC 825-10, which permits entities to choose to measure many financial instruments and certain other items at fair value.

purposes of the condensed consolidated statements of cash flows, the Company considers highly liquid investments with an original maturity

of three months or less to be cash equivalents.

As of March 31, 2022 and December 31, 2021, the Company had no cash equivalents.

Company maintains its cash in banks insured by the Federal Deposit Insurance Corporation in accounts that at times may be in excess of

the federally insured limit of $ 250,000 per bank.

The Company minimizes this risk by placing its cash deposits with major financial institutions.

30, 2021 and December 31, 2020, the uninsured balances amounted to $ 0 .

Property and Equipment

Property and equipment are stated at cost and

depreciated using the straight-line method over their estimated useful lives of three to five years.

Repair and maintenance costs are

expensed as incurred.

When retired or otherwise disposed, the related carrying value and accumulated depreciation are removed from the

respective accounts and the net difference less any amount realized from disposition is reflected in earnings.

Accounts Receivable and

Allowance for Doubtful Accounts

The Company monitors outstanding

receivables based on factors surrounding the credit risk of specific customers, historical trends, and other information.

The allowance

for doubtful accounts is estimated based on an assessment of the Company’s ability to collect on customer accounts receivable.

is judgment involved with estimating the allowance for doubtful accounts, and if the financial condition of the Company’s customers

were to deteriorate, resulting in their inability to make the required payments, the Company may be required to record additional allowances

or charges against revenues.

The Company writes-off accounts receivable against the allowance when it determines a balance is uncollectible

and no longer actively pursues its collection.

Revenue Recognition and

Deferred Revenue

Revenues are accounted

for under ASC Topic 606, “Revenue From Contracts With Customers” (“ASC 606”).

ASC 606 is based on the principle

that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which

the entity expects to be entitled in exchange for those goods or services.

This ASC also requires additional disclosure about the nature,

amount, timing, and uncertainty of revenue and cash flows arising from customer purchase orders, including significant judgments.

In accordance with ASC 606, the Company recognizes

At March 31, 2022 and December 31, 2021, the uninsured balances amounted to $ 1,540,264 and $ 2,727,928 , respectively.

and Equipment, net

state property and equipment at cost or, if acquired through a business combination, fair value at the date of acquisition.

depreciation and amortization using the straight-line method over the estimated useful lives of the assets, except for our leasehold

improvements, which are depreciated over the shorter of their estimated useful lives or their related lease term.

Upon the sale or retirement

of assets, the cost and related accumulated depreciation are removed from our accounts and the resulting gain or loss is credited or

charged to income.

We expense costs for repairs and maintenance when incurred.

Property and equipment includes assets recorded under

operating leases, see “Note 15 —Leases.” Our property and equipment is pledged as collateral for our Senior Secured

Debt, see “Note 10 – Convertible Note Payable.”

Company’s cost of revenue consists primarily of the costs of purchasing metal from its customers.

Party Transactions

are considered related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled

by, or are under common control with the Company.

Related parties also include principal owners of the Company, its management, members

of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if

one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting

parties might be prevented from fully pursuing its own separate interests.

The Company discloses all related party transactions.

Note 17 – Related Party Transactions.

Company accounts for its leases under ASC 842, Leases.

Under this guidance, arrangements meeting the definition of a lease are classified

as operating or financing leases and are recorded on the condensed consolidated balance sheet as both a right of use asset and lease

liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s

incremental borrowing rate.

Lease liabilities are increased by interest and reduced by payments each period, and the right of use asset

is amortized over the lease term.

For operating leases, interest on the lease liability and the amortization of the right of use asset

result in straight-line rent expense over the lease term.

Variable lease expenses, if any, are recorded when incurred.

calculating the right of use asset and lease liability, the Company elected to combine lease and non-lease components.

The Company excluded

short-term leases having initial terms of 12 months or less from the new guidance as an accounting policy election and recognizes rent

expense on a straight-line basis over the lease term.

See Note 15 – Leases.

Protection Program Notes

classified the loan we received under the Paycheck Protection Program (“PPP”) and the PPP note we assumed upon consummation

of the Empire acquisition as non-convertible notes.

We accrued interest on the PPP notes through the date of forgiveness of the respective

notes by the Small Business Administration (“SBA”).

On the date of forgiveness of the respective PPP notes by the SBA, the

principal and interest due under the PPP notes were recorded as gains on forgiveness of debt.

and Contingencies

time to time, we may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business.

is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.

Except as set forth below, we are currently not aware of any such legal proceedings or claims that will have, individually or in the

aggregate, a material adverse effect on our business, financial condition or operating results.

See Note 9 – Commitments and Contingencies.

Company recognizes revenue when services are realized or realizable and earned, less estimated future doubtful accounts.

Company’s revenues are accounted for under ASC Topic 606, “Revenue From Contracts With Customers” (“ASC 606”)

and generally do not require significant estimates or judgments based on the nature of the Company’s revenue streams.

prices are generally fixed at the point of sale and all consideration from contracts is included in the transaction price.

The Company’s

contracts do not include multiple performance obligations or material variable consideration.

accordance with ASC 606, the Company recognizes revenue to depict the transfer of promised goods or services to customers in an amount

that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services.

The Company recognizes

revenue in accordance with that core principle by applying the following:

Identify the contract(s) with a customer;

Identify the performance obligation in the contract;

Determine the transaction price;

Allocate the transaction price to the performance obligations in the contract;

Recognize revenue when (or as) the Company satisfies a performance obligation.

The Company primarily generates

revenue by charging businesses to advertise on the Company’s website and social media channels.

In cases where clients enter advertising

contracts for an extended period of time, the Company recognizes revenue pro rata over the contract term and any unearned revenue is deferred

to future periods.

Based on the nature of

the Company’s revenue streams, revenues generally do not require significant estimates or judgments.

The sales prices are generally

fixed at the point of sale and all consideration from contracts is included in the transaction price.

The Company’s contracts do

not include multiple performance obligations or material variable consideration.

Deferred revenue represents the amount of prepaid

advertising fees the Company has received from customers and it is included in current liabilities in the accompanying condensed consolidated

balance sheets.

Deferred revenue shall be recognized in the future as the advertising services are provided.

The Company charges the costs of advertising to

expense as incurred.

Advertising costs were $ 18,125 and $ 43,020 for the nine months ended September 30, 2021 and 2020, respectively.

Stock-Based Compensation

Stock-based compensation

expense is measured at the grant date fair value of the award and is expensed over the requisite service period.

For stock-based awards

to employees, non-employees and directors, the Company calculates the fair value of the award on the date of grant using the Black-Scholes

the contract(s) with a customer;

the performance obligation in the contract;

the transaction price;

the transaction price to the performance obligations in the contract;

revenue when (or as) the Company satisfies a performance obligation.

Company primarily generates revenue by purchasing scrap metal from businesses and retail customers, processing it, and selling the ferrous

and non-ferrous metals to clients.

Company realizes revenue upon the fulfillment of its performance obligations to customers.

As of March 31, 2022 and December 31, 2021,

the Company had a contract liability of $ 25,000 and $ 25,000 , respectively, for contracts under which the customer had paid for and the

Company had not yet delivered.

we ship the ferrous and non-ferrous metals we purchase to customers multiple times per day, we do maintain inventories.

the value of the inventories we do carry, which consist of processed and unprocessed scrap metal (ferrous and nonferrous), used and salvaged

vehicles, and supplies, based on the net realizable value or the cost of the inventories, whichever is less.

We calculate the value of

the inventory based on the first-in-first-out (FIFO) methodology.

We calculate the value of finished products based on their net realizable

value as their cost basis is not readily available.

The value of our inventories was $ 729,075 and $ 381,002 , respectively, as of March

31, 2022 and December 31, 2021.

Company charges the costs of advertising to expense as incurred.

Advertising costs were $ 16,230 and $ 18,553 for the three months ended

March 31, 2022 and 2021, respectively.

compensation expense is measured at the grant date fair value of the award and is expensed over the requisite service period.

For stock-based

awards to employees, non-employees and directors, the Company calculates the fair value of the award on the date of grant using the Black-Scholes

option pricing model.

4 unchanged sentences

of management’s judgment.

The Company follows ASC Subtopic

740-10, “Income Taxes” (“ASC 740-10”) for recording the provision for income taxes.

Deferred tax assets and liabilities

are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted

marginal tax rate applicable when the related asset or liability is expected to be realized or settled.

Deferred income tax expenses or

benefits are based on the changes in the asset or liability during each period.

If available evidence suggests

that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required

to reduce the deferred tax assets to the amount that is more likely than not to be realized.

Future changes in such valuation allowance

are included in the provision for deferred income taxes in the period of change.

Deferred income taxes may arise from temporary differences

resulting from income and expense items reported for financial accounting and tax purposes in different periods.

Convertible Instruments

GAAP requires companies

to bifurcate conversion options from their host instruments and account for them as freestanding derivative financial instruments according

to certain criteria.

The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative

instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument

that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable

generally accepted accounting principles with changes in fair value reported in earnings as they occur, and (c) a separate instrument

with the same terms as the embedded derivative instrument would be considered a derivative instrument.

An exception to this rule is when

the host instrument is deemed to be conventional, as that term is described under ASC 480, “Distinguishing Liabilities From Equity.”

When the Company has determined

that the embedded conversion options should not be bifurcated from their host instruments, the Company records, when necessary, discounts

to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the

fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in

Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption using

the effective interest method.

Beneficial Conversion Features and Deemed

The Company records a

beneficial conversion feature for preferred stock when, on the date of issuance, the conversion rate is less than the Company’s

The Company also records, when necessary, a contingent beneficial conversion resulting from price protection of the conversion

price of preferred stock, based on the change in the intrinsic value of the conversion options embedded in such preferred stock.

The Company records,

when necessary, deemed dividends for:

(i) warrant price protection, based on the difference between the fair value of the warrants immediately

before and after the repricing (inclusive of any full ratchet provisions);

(ii) the exchange of preferred shares for convertible notes,

based on the amount of the face value of the convertible notes in excess of the carrying value of the preferred shares;

(iii) the settlement

of warrant provisions, based on the fair value of the shares of common stock issued;

and (iv) amortization of discount on preferred stock

resulting from recognition of a beneficial conversion feature.

Derivative Financial Instruments

The Company classifies as

equity any contracts that:

Company follows ASC Subtopic 740-10, “Income Taxes” (“ASC 740-10”) for recording the provision for income taxes.

Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets

and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled.

Deferred income tax expenses or benefits are based on the changes in the asset or liability during each period.

available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized,

a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized.

changes in such valuation allowance are included in the provision for deferred income taxes in the period of change.

Deferred income

taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes

in different periods.

business combinations are accounted for under the acquisition method of accounting in accordance with ASC Topic 805, “Business

Combinations” (“ASC 805”).

Under the acquisition method, we recognize 100% of the assets we acquire and liabilities

we assume, regardless of the percentage we own, at their estimated fair values as of the date of acquisition.

Any excess of the purchase

price over the fair value of the net assets and other identifiable intangible assets we acquire is recorded as goodwill.

To the extent

the fair value of the net assets we acquire, including other identifiable assets, exceeds the purchase price, a bargain purchase gain

is recognized.

The assets we acquire, and liabilities we assume from contingencies, are recognized at fair value if we can readily determine

the fair value during the measurement period.

The operating results of businesses we acquire are included in our condensed consolidated

statement of operations from the date of acquisition.

Acquisition-related costs are expensed as incurred.

See “Note 4— Acquisition

GAAP requires companies to bifurcate conversion options from their host instruments and account for them as freestanding derivative financial

instruments according to certain criteria.

The criteria include circumstances in which (a) the economic characteristics and risks of

the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract,

(b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value

under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur, and

(c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.

to this rule is when the host instrument is deemed to be conventional, as that term is described under ASC 480, “Distinguishing

Liabilities From Equity.”

the Company has determined that the embedded conversion options should not be bifurcated from their host instruments, the Company records,

when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon

the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective

conversion price embedded in the note.

Debt discounts under these arrangements are amortized over the term of the related debt to their

stated date of redemption using the effective interest method.

Conversion Features and Deemed Dividends

Company records a beneficial conversion feature for preferred stock when, on the date of issuance, the conversion rate is less than the

Company’s stock price.

The Company also records, when necessary, a contingent beneficial conversion resulting from price protection

of the conversion price of preferred stock, based on the change in the intrinsic value of the conversion options embedded in such preferred

Company records, when necessary, deemed dividends for:

(i) warrant price protection, based on the difference between the fair value of

the warrants immediately before and after the repricing (inclusive of any full ratchet provisions);

(ii) the exchange of preferred shares

for convertible notes, based on the amount of the face value of the convertible notes in excess of the carrying value of the preferred

(iii) the settlement of warrant provisions, based on the fair value of the common shares issued;

and (iv) amortization of discount

on preferred stock resulting from recognition of a beneficial conversion feature.

Financial Instruments

Company classifies as equity any contracts that:

(i) require physical settlement or net-share settlement;

or (ii) provide the Company with a choice of net-cash

settlement or settlement in its own shares (physical settlement or net-share settlement) providing that such contracts are indexed to

the Company’s own stock.

or (ii) provide the Company

with a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement) providing that such

contracts are indexed to the Company’s own stock.

The Company classifies as assets or liabilities any contracts that:

(i) require net-cash settlement (including

a requirement to net cash settle the contract if an event occurs and if that event is outside the Company’s control);

or (ii) gives

the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement).

The Company assesses

classification of its common stock purchase warrants and other freestanding derivatives at each reporting date to determine whether a

change in classification between assets and liabilities is required.

The Company’s freestanding

derivatives consisted of warrants to purchase common stock that were issued in connection with the issuance of debt and the sale of shares

of common stock, and of embedded conversion options within convertible notes.

The Company evaluated these derivatives to assess their

proper classification in the balance sheet as of September 30, 2021 and December 31, 2020 using the applicable classification criteria

enumerated under ASC 815, “Derivatives and Hedging.” The Company determined that certain embedded conversion and/or exercise

features did not contain fixed settlement provisions.

The convertible notes contained a conversion feature such that the Company could

not ensure it would have adequate authorized shares to meet all possible conversion demands.

As such, the Company is required to record

the derivatives which do not have fixed settlement provisions as liabilities and mark to market all such derivatives to fair value at

the end of each reporting period.

The Company also records derivative liabilities for instruments, including convertible notes, preferred

stock, and warrants, in which the Company does not have sufficient authorized shares to cover the conversion of these instruments into

shares of common stock.

Long-Lived Assets

The Company reviews its property

and equipment and any identifiable intangibles for impairment whenever events or changes in circumstances indicate that the carrying amount

of an asset may not be recoverable.

The test for impairment is required to be performed by management at least annually.

Recoverability

of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted operating cash

flow expected to be generated by the asset.

If such assets are considered to be impaired, the impairment to be recognized is measured

by the amount by which the carrying amount of the asset exceeds the fair value of the asset.

Long-lived assets to be disposed of are reported

at the lower of carrying amount or fair value less costs to sell.

Intangible assets are stated at cost and reviewed annually to examine

any impairments, usually assuming an estimated useful life of three to five years .

When retired or otherwise disposed, the related carrying

value and accumulated depreciation are removed from the respective accounts and the net difference less any amount realized from disposition,

is reflected in earnings.

Indefinite Lived Intangibles and Goodwill

The Company accounts for

business combinations under the acquisition method of accounting in accordance with ASC 805, “Business Combinations,” where

the total purchase price is allocated to the tangible and identified intangible assets acquired and liabilities assumed based on their

estimated fair values.

The purchase price is allocated using the information currently available, and may be adjusted, up to one year

from acquisition date, after obtaining more information regarding, among other things, asset valuations, liabilities assumed and revisions

to preliminary estimates.

The purchase price in excess of the fair value of the tangible and identified intangible assets acquired less

liabilities assumed is recognized as goodwill.

The Company tests indefinite

lived intangibles and goodwill for impairment in the fourth quarter of each year and whenever events or circumstances indicate that the

carrying amount of the asset exceeds its fair value and may not be recoverable.

Segment Reporting

Operating segments are defined

as components of an enterprise for which separate financial information is available and evaluated regularly by the Chief Executive Officer,

or decision-making group, in deciding the method to allocate resources and assess performance.

The Company currently has one reportable

segment for financial reporting purposes, which represents the Company’s core business.

net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the Company’s

or (ii) gives the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement).

The Company assesses classification of its common stock purchase warrants and other freestanding derivatives at each reporting date to

determine whether a change in classification between assets and liabilities is required.

Company’s freestanding derivatives consisted of warrants to purchase common stock that were issued in connection with the issuance

of debt and the sale of common shares, and of embedded conversion options within convertible notes.

The Company evaluated these derivatives

to assess their proper classification in the balance sheet as of March 31, 2022 and December 31, 2021 using the applicable classification

criteria enumerated under ASC 815, “Derivatives and Hedging.” The Company determined that certain embedded conversion and/or

exercise features did not contain fixed settlement provisions.

The convertible notes contained a conversion feature such that the Company

could not ensure it would have adequate authorized shares to meet all possible conversion demands.

As such, the Company was required

to record the derivatives which do not have fixed settlement provisions as liabilities and mark to market all such derivatives to fair

value at the end of each reporting period.

The Company also records derivative liabilities for instruments, including convertible notes,

preferred stock, and warrants, in which the Company does not have sufficient authorized shares to cover the conversion of these instruments

into shares of common stock.

Upon elimination of derivative liabilities an authorized share shortfall, the Company reclassifies the

carrying value of the derivative liabilities at the date of the resolution of the authorized share shortfall to additional paid in capital.

Environmental

Remediation Liability

operations of the Company, like those of other companies in its industry, are subject to various domestic and foreign environmental laws

and regulations.

These laws and regulations not only govern current operations and products, but also impose potential liability on the

Company for past operations.

Management expects environmental laws and regulations to impose increasingly stringent requirements upon

the Company and the industry in the future.

Management believes that the Company conducts its operations in compliance with applicable

environmental laws and regulations and has implemented various programs designed to protect the environment and promote continued compliance.

Company continuously assesses its potential liability for remediation-related activities and adjusts its environmental-related accruals

as information becomes available upon which more accurate costs can be reasonably estimated and as additional accounting guidelines are

As of March 31, 2022 and December 31, 2021, the Company had accruals reported on the balance sheet as current liabilities

of $ 0 and $ 22,207 , respectively, as the Company had paid all civil penalties and completed all remediation activities required under

the Virginia DEQ Consent Order dated June 30, 2021.

See “Note 9—Commitments and Contingencies”

costs incurred may vary from the accrued estimates due to the inherent uncertainties involved including, among others, the nature and

magnitude of the wastes involved, the various technologies that can be used for remediation and the determination of acceptable remediation

with respect to a particular site.

Additionally, costs for environmental-related activities may not be reasonably estimable and therefore

would not be included in our current liabilities.

believes these contingent environmental-related liabilities have been resolved.

Company reviews its property and equipment and any identifiable intangibles for impairment whenever events or changes in circumstances

indicate that the carrying amount of an asset may not be recoverable.

The test for impairment is required to be performed by management

at least annually.

Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the

future undiscounted operating cash flow expected to be generated by the asset.

If such assets are considered to be impaired, the impairment

to be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair value of the asset.

assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell.

Intangible assets are stated

at cost and reviewed annually to examine any impairments, usually assuming an estimated useful life of five to ten years .

or otherwise disposed, the related carrying value and accumulated depreciation are removed from the respective accounts and the net difference

less any amount realized from disposition, is reflected in earnings.

The estimated useful lives of the Intellectual Property, Customer

List, and Licenses assumed in the Empire acquisition is 5 years , 10 years , and 10 years , respectively.

See Note 18 – Amortization

of Intangible Assets.

Lived Intangibles

Company accounts for business combinations under the acquisition method of accounting in accordance with ASC 805, “Business Combinations,”

where the total purchase price is allocated to the tangible and identified intangible assets acquired and liabilities assumed based on

their estimated fair values.

The purchase price is allocated using the information currently available, and may be adjusted, up to one

year from acquisition date, after obtaining more information regarding, among other things, asset valuations, liabilities assumed and

revisions to preliminary estimates.

The purchase price in excess of the fair value of the tangible and identified intangible assets acquired

less liabilities assumed is recognized as goodwill.

Company tests indefinite lived intangibles and goodwill for impairment in the fourth quarter of each year and whenever events or circumstances

indicate that the carrying amount of the asset exceeds its fair value and may not be recoverable.

is the excess of the purchase price paid over the fair value of the net assets of the acquired business.

Goodwill is tested annually

at December 31 for impairment.

The annual qualitative or quantitative assessments involve determining an estimate of the fair value

of reporting units in order to evaluate whether an impairment of the current carrying amount of goodwill exists.

A qualitative

assessment evaluates whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount

before applying the two-step quantitative goodwill impairment test.

The first step of a quantitative goodwill impairment test

compares the fair value of the reporting unit to its carrying amount including goodwill.

If the carrying amount of the reporting

unit exceeds its fair value, an impairment loss may be recognized.

The amount of impairment loss is determined by comparing the

implied fair value of the reporting unit’s goodwill with the carrying amount.

If the carrying amount exceeds the implied fair

value then an impairment loss is recognized equal to that excess.

The Company has adopted the provisions of Accounting Standards

Update (“ASU”)_2017-04, “Intangibles—Goodwill and Other (Topic 350):

Simplifying the Test for Goodwill Impairment”

(“ASU 2017-04”).

ASU 2017-04 requires goodwill impairments to be measured on the basis of the fair value of a

reporting unit relative to the reporting unit’s carrying amount rather than on the basis of the implied amount of goodwill

relative to the goodwill balance of the reporting unit.

Thus, ASU 2017-04 permits an entity to record a goodwill impairment that is

entirely or partly due to a decline in the fair value of other assets that, under existing U.S.

GAAP, would not be impaired

or have a reduced carrying amount.

Furthermore, ASU 2017-04 removes “the requirements for any reporting unit with a

zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of

the goodwill impairment test.” Instead, all reporting units, even those with a zero or negative carrying amount will apply the

same impairment test.

Accordingly, the goodwill of reporting unit or entity with zero or negative carrying values will not be

impaired, even when conditions underlying the reporting unit/entity may indicate that goodwill is impaired.

test our goodwill for impairment annually, or, under certain circumstances, more frequently, such as when events or circumstances indicate

there may be impairment.

As of March 31, 2022, no such circumstances had occurred.

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.

of the goodwill is deductible for income tax purposes.

segments are defined as components of an enterprise for which separate financial information is available and evaluated regularly by

the Chief Executive Officer, or decision-making group, in deciding the method to allocate resources and assess performance.

currently has one reportable segment for financial reporting purposes, which represents the Company’s core business.

Earnings (Loss) Per Common Share

Company computes earnings (loss) per common share under ASC Subtopic 260-10, Earnings Per Share.

Net loss per common share

Net loss per share is computed

by dividing the net loss by the weighted average number of shares of common stock outstanding during the period.

Diluted earnings per

share includes the dilution that would occur upon the exercise or conversion of all potentially dilutive securities into common stock

using the “treasury stock” and/or “if converted” methods, as applicable.

The computation of diluted earnings (loss)

per share excludes potentially dilutive securities when their inclusion would be anti-dilutive, or if their exercise prices were greater

than the average market price of the common stock during the period.

Potentially dilutive securities

excluded from the computation of basic and diluted net loss per share are as follows:

September 30,

Shares of common stock issuable upon conversion of convertible notes

5,722,267,406

Options to purchase shares of common stock

Warrants to purchase shares of common stock

17,161,702,276

Shares of common stock issuable upon conversion of preferred stock

7,817,778,624

18,017,191,930

is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period.

earnings per share, if presented, would include the dilution that would occur upon the exercise or conversion of all potentially dilutive

securities into common stock using the “treasury stock” and/or “if converted” methods, as applicable.

computation of basic and diluted income (loss) per share, for the three months ended March 31, 2022 and 2021 excludes potentially dilutive

securities when their inclusion would be anti-dilutive, or if their exercise prices were greater than the average market price of the

common stock during the period.

dilutive securities are as follows:

OF POTENTIALLY DILUTED SECURITIES EXCLUDED FROM THE COMPUTATION OF BASIC AND DILUTED NET LOSS PER SHARE

Common shares issuable upon conversion of convertible notes

Options to purchase common shares

Warrants to purchase common shares

Common shares issuable upon conversion of preferred stock

Total potentially dilutive shares

8,083,323,175

February 28, 2022 the Company completed 1-for-300 reverse stock split .

Pursuant to GAAP, the Company retrospectively recasted and restated

the weighted-average common shares included within its condensed consolidated statements of operations for the three months ended

March 31, 2022 and 2021.

The basic and diluted weighted-average common shares are retroactively converted to shares of the Company’s

common stock to conform to the recasted condensed consolidated statements of stockholders’ equity.

Reclassifications

reclassifications have been made to the prior years’ data to conform to the current year presentation.

These reclassifications

had no effect on reported income (losses).

Accounting Pronouncements

December 2019, the FASB issued ASU 2019-12, which is intended to simplify various aspects related to accounting for income taxes.

2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve

consistent application.

This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December

15, 2020, with early adoption permitted.

The Company adopted ASU 2019-12 effective January 1, 2021, and the adoption did not have

a material impact on its financial statements and related disclosures.

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

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.

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.

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.

The Company adopted ASU 2020-06 on January 1, 2022 which did not have a material impact on the Company’s financial

statements and related disclosures.

August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820):

Framework - Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”).

ASU 2018-13 removes

certain disclosure requirements, including the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy,

the policy for timing of transfers between levels, and the valuation processes for Level 3 fair value measurements.

ASU 2018-13 also

adds disclosure requirements, including changes in unrealized gains and losses for the period included in other comprehensive income

for recurring Level 3 fair value measurements, and the range and weighted average of significant unobservable inputs used to develop

Level 3 fair value measurements.

The amendments on changes in unrealized gains and losses, and the range and weighted average of significant

unobservable inputs used to develop Level 3 fair value measurements, should be applied prospectively for only the most recent interim

or annual period presented in the initial fiscal year of adoption.

All other amendments should be applied retrospectively to all periods

presented upon their effective date.

ASU 2018-13 became effective for us on January 1, 2020.

The adoption of this update did not have

a material impact on the Company’s consolidated financial statements and related disclosures.

October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805):

Accounting for Contract Assets and Contract

Liabilities from Contracts with Customers” (ASU 2021-08).

which requires that an acquirer recognize and measure contract

assets and contract liabilities acquired in a business combination in accordance with ASC 606, as if it had originated the contracts.

Prior to ASU 2021-08, an acquirer generally recognizes contract assets acquired and contract liabilities assumed that arose from

contracts with customers at fair value on the acquisition date.

ASU 2021-08 is effective for fiscal years beginning after December

15, 2022, with early adoption permitted.

ASU 2021-08 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).

We are still assessing this standard’s impact on our consolidated financial statements.

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.

4 – ACQUISITION OF EMPIRE

On September 30, 2021, the

Company entered into an agreement and plan of merger (the “Merger Agreement”) to acquire Empire Services, Inc.

a Virginia Corporation (the “Empire Acquisition”).

The Empire Acquisition became effective on October 1, 2021

upon the filings of the certificate or articles of merger with the Delaware Secretary of State and State Corporation

Commission of Virginia on October 1, 2021.

a company headquartered in Virginia, operates 11 metal recycling facilities in Virginia and North Carolina, where it collects, classifies

and processes raw scrap metals (ferrous and nonferrous) for recycling, such as iron, steel, aluminum, copper, lead, stainless steel and

Empire’s business consists of purchasing scrap metals from retail customers, municipal governments and large corporations,

and selling both processed and unprocessed scrap metals to steel mills and other purchasers across the country.

Empire utilizes technology

to create operating efficiencies and competitive advantages over other scrap metal recyclers.

the effective time of the Empire Acquisition, each share of Empire’s common stock was converted into the right to receive consideration

consisting of:

(i) 1,650,000 shares of newly-issued restricted shares of the Company’s common stock, par value $ 0.001 per share,

(ii) within 3 business days of the closing of the Company’s next capital raise, repayment of a $ 1 million advance made to purchase

Empire’s Virginia Beach location to Empire’s sole shareholder and Greenwave’s Chief Executive Officer and (iii)

a promissory note in the principal amount of $ 3.7 million with a maturity date of September 30, 2023 to Empire’s sole shareholder

and Greenwave’s Chief Executive Officer.

Merger Agreement contained representations, warranties and covenants customary for transactions of this type.

Investors in, and

security holders of, the Company should not rely on the representations and warranties as characterizations of the actual state of facts

since they were made only as of the date of the Empire Acquisition.

Moreover, information concerning the subject matter of such representation

and warranties may change after the date of the Empire Acquisition, which subsequent information may or may not be fully reflected in

public disclosures.

September 30, 2021, the Company entered into an employment agreement with the sole owner of Empire.

fair value of the assets acquired and liabilities assumed are based on management’s initial estimates of the fair values on October

1, 2021 and on subsequent measurement adjustments as of December 31, 2021.

Based upon the purchase price allocation, the following table

summarizes the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition:

OF BUSINESS ACQUISITION

Assets acquired:

Notes receivable – related party

Property and equipment, net

Right of use and other assets

Intellectual Property

Customer Base

Total assets acquired at fair value

Liabilities assumed:

Accounts payable

Advances and environmental remediation liabilities

Other liabilities

Total liabilities assumed

Net assets acquired

Purchase consideration paid:

Promissory Note

Total purchase consideration paid

assets acquired and liabilities assumed are recorded at their estimated fair values on the acquisition date as adjusted during the measurement

period with subsequent changes recognized in earnings or loss.

The Company utilized an independent specialist for the valuation of the

intangible assets.

following unaudited pro forma condensed consolidated results of operations have been prepared as if the acquisition of Empire had occurred

as of the beginning of the following period:

OF BUSINESS ACQUISITION PRO FORMA

Three Months Ended

March 31, 2021

Net Income (Loss) Available to Common Shareholders

$ ( 46,279,929 )

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.

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.

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

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.

The Company is currently evaluating the

impact of ASU 2020-06 on its unaudited condensed consolidated financial statements.

In August 2018, the FASB

issued Accounting Standards Update (“ASU”) 2018-13, “Fair Value Measurement (Topic 820):

Disclosure Framework - Changes

to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”).

ASU 2018-13 removes certain disclosure requirements,

including the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers

between levels, and the valuation processes for Level 3 fair value measurements.

ASU 2018-13 also adds disclosure requirements, including

changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements,

and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements.

The amendments

on changes in unrealized gains and losses, and the range and weighted average of significant unobservable inputs used to develop Level

3 fair value measurements, should be applied prospectively for only the most recent interim or annual period presented in the initial

fiscal year of adoption.

All other amendments should be applied retrospectively to all periods presented upon their effective date.

2018-13 became effective for us on January 1, 2020.

The adoption of this update did not have a material impact on the Company’s

unaudited condensed consolidated financial statements and related disclosures.

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.

NOTE 4 – PROPERTY AND EQUIPMENT

Property and equipment as of September 30, 2021

and December 31, 2020 is summarized as follows:

September 30,

Office equipment

Net Basic Earnings (Loss) per Share

Net Diluted Earnings (Loss) per Share

forma data does not purport to be indicative of the results that would have been obtained had these events actually occurred at the beginning

of the period presented and is not intended to be a projection of future results.

5 – PROPERTY AND EQUIPMENT

and equipment as of March 31, 2022 and December 31, 2021 is summarized as follows:

OF PROPERTY AND EQUIPMENT

Less accumulated depreciation

( 2,045,851 )

( 1,911,719 )

Property and equipment, net

Depreciation expense for the nine months ended September 30, 2021 and

2020 was $ 0 .

NOTE 5 – ADVANCES, NON-CONVERTIBLE NOTES PAYABLE AND PPP NOTE

During the nine months

ended September 30, 2021 and 2020, the Company received aggregate proceeds from non-interest bearing advances of $ 53,991 and $ 0 and repaid

an aggregate of $ 20,178 and $ 0 , respectively, of advances.

Included in the nine months ended September 30, 2021 were $ 2,091 of advances

from and $ 5,278 of repayments to the Company’s Chief Information Officer and $ 25,000 of advances from Empire Services, Inc.

The remaining advances are primarily for Simple Agreements for Future Tokens, entered into with accredited investors issued

pursuant to an exemption from the registration requirements of the Securities Act of 1933, as amended, by virtue of Section 4(a)(2)

thereof and/or Regulation D thereunder in 2018.

As of September 30, 2021 and December 31, 2020, the Company owed $ 122,000 and $ 88,187

in principal and $ 4,000 and $ 0 in accrued interest, respectively, on advances.

Non-Convertible Notes

During the nine months ended

September 30, 2021 and 2020, the Company received proceeds from the issuance of non-convertible notes of $ 1,515,424 and $ 132,911 and repaid

an aggregate of $ 25,000 and $ 39,641 , respectively, of non-convertible notes.

Included in the nine months ended September 30, 2021 and

2020 were $ 1,515,424 and $ 20,520 , respectively, of advances from and $ 0 of repayments to the Company’s Chief Executive Officer and

Empires Services, Inc., (See Note 14).

The non-convertible notes have maturity dates ranging from March 31, 2019 to June 24, 2023 and

accrue interest at rates ranging from 0 % to 35 % (default interest rate) per annum.

On June 2, 2021, one of the

holders of non-convertible notes entered into an agreement to cancel the entire amount owed to him (including principal of $ 79,000 and

accrued interest of $ 63,055 ), resulting in gain on forgiveness of debt of $ 142,055 (See Note 8 – Trawick’s Complaint).

On June 4, 2021, one of the

holders of a non-convertible note payable for $ 60,000 extended the due date of the note from June 26, 2022 to June 24, 2023.

On June 25, 2021, a law firm

the Company formerly used received an arbitration award of $ 459,251 for unpaid legal bills.

On September 23, 2021, the Company entered

into a Resolution Agreement to settle the arbitration award for an aggregate of $ 275,000 to be paid as follows:

(i) $ 25,000 by September

(ii) $ 15,000 per month by the last day of each month from October 2021 through January 2023;

and (iii) $ 10,000 by February 28,

The Company imputed an interest rate of 10 % and discounted the note accordingly.

The imputed debt discount of $ 17,991 is being amortized

to interest expense over the term of the note.

The Company recognized a $ 202,242 gain on settlement.

As of September 30, 2021, the remaining

carrying value of the note was $ 232,502 , net of debt discount of $ 17,498 .

As of September 30, 2021

and December 31, 2020, the Company owed principal of $ 1,888,446 and $ 219,520 (of which $ 128,857 and $ 60,000 is long-term), net of debt

discount of $ 17,498 and $ 0 , and accrued interest of $ 372,480 and $ 251,612 , respectively, on non-convertible notes.

PPP Note Payable

On May 4, 2020, the Company

received proceeds of $50,000 from a PPP note.

The note had a maturity date of May 4, 2022 and bore 1% interest per annum.

6, 2021, the Small Business Administration forgave the Company’s Paycheck Protection Program loan in the principal amount of $50,000

and accrued interest of $466, resulting in gain on forgiveness of debt of $50,466.

As of September 30, 2021 and December 31, 2020, the

Company owed $0 and $50,000 in principal and $0 and $330 in accrued interest, respectively, on this note.

NOTE 6 – ACCOUNTS

PAYABLE AND ACCRUED EXPENSES

As of September 30, 2021 and December 31, 2020,

the Company owed accounts payable and accrued expenses of $ 4,218,421 and $ 4,948,890 , respectively.

These are primarily comprised of payments

to vendors, accrued interest on debt, and accrued legal bills.

NOTE 7 – ACCRUED PAYROLL AND RELATED

The Company is delinquent in filing its payroll

taxes, primarily related to stock compensation awards in 2016 and 2017, but also including payroll for 2018 through 2021.

As of September

30, 2021 and December 31, 2020, the Company owed payroll tax liabilities, including penalties, of $ 4,037,298 and $ 3,864,055 , respectively,

to federal and state taxing authorities.

The actual liability may be higher or lower due to interest or penalties assessed by federal

and state taxing authorities.

The Company expects to settle these liabilities during 2022.

NOTE 8 – COMMITMENTS AND CONTINGENCIES

From time to time, we may become involved in various

lawsuits and legal proceedings, which arise in the ordinary course of business.

Litigation is subject to inherent uncertainties, and an

adverse result in these or other matters may arise from time to time that may harm our business.

Except as set forth below, we are currently

not aware of any such legal proceedings or claims that will have, individually or in the aggregate, a material adverse effect on our business,

financial condition or operating results.

Power Up Lending Group, Ltd.

As disclosed in the Company’s Annual Report

on Form 10-K filed with the SEC on April 16, 2021, on October 11, 2019, Power Up Lending Group, Ltd.

(“Power Up”) filed a

complaint against the Company and Isaac Dietrich, an officer and director of the Company, in the Supreme Court of the State of New York,

County of Nassau.

The complaint alleged, among other things, (i) the occurrence of events of default in certain notes (the “Power

Up Notes”) issued by the Company to Power Up, (ii) misrepresentations by the Company including, but not limited to, with respect

to the Company’s obligation to timely file its required reports with the SEC and (iii) lost profits as a result of the Company’s

failure to convert the Power Up Notes in accordance with the terms thereof.

On April 30, 2021, the Company entered into a

settlement agreement (the “Settlement”) with PowerUp by accepting an offer communicated to the Company via electronic mail.

In accordance with the terms of the Settlement, PowerUp, the judgment creditor of a judgment against the Company and Isaac Dietrich, the

Company’s Chief Information Officer and director, in the total amount of $ 350,551.10 entered in the Office of the Clerk of the County

of Nassau on February 23, 2021 (the “Judgement”), agreed to a settlement and filing of a satisfaction of judgment in consideration

of receipt of the sum of $ 150,000.00 (the “Settlement Amount”) on April 30, 2021.

The Company accepted the aforementioned

offer by remitting the Settlement Amount timely and in full.

Accordingly, a satisfaction of Judgment was filed by PowerUp with the Office

of the Clerk of the County of Nassau on May 3, 2021.

Sheppard Mullin’s Demand for Arbitration

On December 1, 2020, Sheppard, Mullin, Richter&

Hampton LLP (“Sheppard Mullin”), the Company’s former securities counsel, filed a demand for arbitration at JAMS in

New York, New York against the Company, alleging the Company’s breach of an engagement agreement dated January 4, 2018, and a failure

of the Company to pay $ 487,390.73 of outstanding legal fees to Sheppard Mullin.

Sheppard Mullin was awarded $ 459,251 in unpaid legal fees,

disbursements and interest on June 25, 2021.

A judgement confirming the arbitration award was entered on September 8, 2021 in the Federal

District Court located in Denver, Colorado.

On September 23, 2021, the Company entered into a Resolution Agreement

with Sheppard, Mullin, Richter & Hampton concerning the $ 459,250.88 judgement entered against the Company.

Under the terms of the

Resolution Agreement, the Company was required to make a $25,000 initial payment by September 30, 2021 and is required to make $15,000

monthly payments from October 2021 to January 2023 with a final $10,000 payment due in February 2023.

The Company has made both the September

and October 2021 payments.

Rother Investments’ Petition

On October 28, 2020, Rother Investments, LLC (“Rother

Investments”) filed a complaint in the District Court of 419th Judicial District, Travis County, Texas against the Company, alleging

the Company’s default under a certain promissory note (the “Rother Investments Note”) in payment of the outstanding

principal amount and interest under the Note, as described in the complaint.

Rother Investments seeks to collect the amount of $124,750

as of the date of the complaint with late fees continuing to accrue on a daily basis, monetary relief of over $100,000 but not more than

$200,000 pursuant to Tex.

47(c)(3), court’s costs and attorney’s fees, pre-judgment and post-judgment interest,

and such other relief as the court deems appropriate.

On May 19, 2021, Rother Investments, LLC received a default judgment against the

Company in the amount of $ 144,950 .

On June 17, 2021, MassRoots filed a motion to set aside default and motion for new trial asserting

it was improperly served.

On July 20, 2021, the court granted the Company’s motion finding and ordered a new trial of the matter.

Trawick’s Complaint

As previously reported by the Company in its Annual

Report on Form 10-K filed with the Securities and Exchange Commission on April 16, 2021, on or about January 25, 2021, Travis Trawick

(“Trawick”) filed a complaint (“Trawick’s Lawsuit”) against the Company and Isaac Dietrich, the Company’s

Chief Information Officer and director, in the Circuit Court for the City of Virginia Beach, Virginia (the “Court”), asserting

the Company’s failure to remit payments under the certain promissory note, as subsequently amended and modified, and ancillary documents

thereto (collectively, the “Note”), and Mr.

Dietrich’s failure to fulfill its obligations, as the guarantor, under the

On May 4, 2021, Trawick requested that the Clerk

of the Court filed for entry an order to dismiss Trawick’s Lawsuit with prejudice.

Iroquois Master Fund

On June 30, 2021, the Company received an e-mail

containing a demand (the “Demand”) for arbitration (the “Arbitration”) at American Arbitration Association in

Denver, Colorado, by Iroquois Master Fund Ltd.

(“Iroquois”) against the Company, Isaac Dietrich and Danny Meeks, the Company’s

directors, and Empire Services, Inc.

The Demand alleges breach of contract and various related state law claims

against the defendants, and sought, inter alia , specific performance of the subject warrant, damages in an amount not less than

$12 million, equitable relief, and attorney’s fees for the Company’s alleged failure to reserve more than 150 million shares

of common stock that Iroquois is allegedly entitled to in connection with the exercise of a certain warrant issued by the Company on July

21, 2017, and subsequently purchased by Iroquois from an unrelated third party.

As a result of a legal action commenced by Isaac Dietrich,

Danny Meeks, and Empire (See – “ Litigation ” below), Iroquois informed the American Arbitration Association (the

arbitral body overseeing the Arbitration) that it would (i) dismiss the Counterclaim Defendants from the Arbitration without prejudice,

(ii) assert its claims against Isaac Dietrich, Danny Meeks, and Empire the in the action commended by them, and (iii) proceed with the

Arbitration with respect to the Company only.

On July 21, 2021, in response to the Demand, Isaac

Dietrich, Danny Meeks, and Empire, filed a complaint (the “Complaint”) against Iroquois in the United States District Court

of the Southern District of New York alleging that the aforementioned plaintiffs were not parties to the warrant the Demand based on,

and as such, the Demand could not have brought against them.

Declaratory relief and injunctive relief were sought in the Complaint.

August 20, 2021, Iroquois submitted an answer with counterclaims stating that Iroquois informed the American Arbitration Association (the

arbitral body overseeing the Arbitration) that it would (i) dismiss the Counterclaim Defendants from the Arbitration without prejudice,

(ii) assert its claims against Isaac Dietrich, Danny Meeks, and Empire the in the action commended by them, and (iii) proceed with the

Arbitration with respect to the Company only.

In its answer, Iroquois made allegations substantially similar to the claims made in the

Arbitration, asserted defenses, and requested an award in not less than $ 12 million against Demand, Isaac Dietrich, Danny Meeks, and Empire,

an entry of an award of a constructive trust against them, and costs and expenses, including its reasonable attorneys’ fees, incurred

in prosecuting said action and the Arbitration.

On September 30, 2021,

the Company entered into a Settlement Agreement (the “Settlement Agreement”) with Iroquois ;

Pursuant to the Settlement Agreement, in exchange for terminating any duties owed by the Company to Iroquois

under the Warrant, the Company agreed to pay, on its own behalf and on behalf of Dietrich, Meeks, and Empire, one million dollars ($ 1,000,000 )

and issue shares of the Series Z Convertible Preferred Stock, par value $ 0.001 per share (the “Series Z”), sufficient in number

such that if they are converted into the Company’s common stock, par value $ 0.001 per share (“Common Stock”) by Iroquois,

such shares of Common Stock will be equal in number to 9.99 % of the issued and outstanding shares of Common Stock at the time of such

NOTE 9 – CONVERTIBLE

expense for the three months ended March 31, 2022 and 2021 was $ 134,131 and $ 0 , respectively.

6 – ADVANCES, NON-CONVERTIBLE NOTES PAYABLE

the three months ended March 31, 2022 and 2021, the Company received aggregate proceeds from non-interest bearing advances of $ 0 and

$ 2,998 and repaid an aggregate of $ 0 and $ 3,385 , respectively, of advances.

Included in the three months ended March 31, 2022 and 2021

were $ 0 and $ 198 of advances from and $ 0 and $ 3,386 of repayments to the Company’s former Chief Executive Officer.

The remaining

advances are primarily for Simple Agreements for Future Tokens, entered into with accredited investors issued pursuant to an exemption

from the registration requirements of the Securities Act of 1933, as amended, by virtue of Section 4(a)(2) thereof and/or Regulation

D thereunder in 2018.

As of March 31, 2022 and December 31, 2021, the Company owed $ 97,000 and $ 97,000 in principal and $ 4,000 and $ 4,000

in accrued interest, respectively, on advances.

Non-Convertible

Notes Payable

On December 17, 2018,

the Company issued a secured convertible promissory note in the principal amount of $ 2,225,000 (including an original issuance discount

of $ 225,000 ) that matured on December 17, 2019 and bears interest at a rate of 8 % per annum (which increased to 22 % on July 16, 2019 upon

the occurrence of an event of default).

The note is secured by the Security Agreement (as defined below).

The investor has the right to

convert the Outstanding Balance (as defined in the note) of the note at any time into shares of common stock of the Company at a conversion

price of $0.35 per share, subject to adjustment.

Commencing on June 17, 2019, the investor has the right to redeem all or any portion

provided, however, the investor may not request redemption in an amount that exceeds $350,000 during any single calendar

provided, further however, upon the occurrence of an event of default, the redemption amount in any calendar month may exceed $350,000.

Payments on redemption amounts may be made in cash, by converting the redemption amount into shares of the Company’s common stock

at a conversion price of the lesser of:

(a) $0.35 per share, subject to adjustment;

and (b) the Market Price (as defined in the note),

or a combination thereof.

Upon the occurrence of an event of default, the investor may accelerate the note pursuant to which the Outstanding

Balance will become immediately due and payable in cash at the Mandatory Default Amount (as defined in the note).

The Company is prohibited

from effecting a conversion of the note to the extent that, as a result of such conversion, the investor, together with its affiliates,

would beneficially own more than 4.99% of the number of shares of the Company’s common stock outstanding immediately after giving

effect to the issuance of shares of common stock upon conversion of the note, which beneficial ownership limitation may be increased by

the investor up to, but not exceeding, 9.99%.

In connection with the

December 2018 note, the Company also entered into a security agreement (the “Security Agreement”) on the closing date pursuant

to which the Company granted the investor a security interest in the Collateral (as defined in the Security Agreement).

2019, the Company received a notice from the noteholder indicating that events of default had occurred and asserting default penalties

of $ 761,330 .

During the year ended December 31, 2019, the noteholder converted $ 345,000 of principal into an aggregate of 53,522,295 shares

of common stock.

During the year ended December 31, 2020, (i) the noteholder converted $ 37,000 of principal into an aggregate of 31,109,551

shares of common stock;

and (ii) $ 1,049,329 of accrued interest was reclassified to the principal balance of this note.

On January 20,

2021, the noteholder converted $ 13,345 of principal into an aggregate of 4,448,251 shares of common stock, having

a fair value of $ 133,002 , resulting in a reduction of the derivative liability by $ 118,778 and a loss on conversion of $ 880 .

of September 30, 2021 and December 31, 2020, the remaining carrying value of the note was $ 2,878,985 and $ 2,892,330 , respectively.

of September 30, 2021 and December 31, 2020, accrued interest payable of $ 1,575,001 and $ 1,073,809 , respectively, was outstanding on the

25, 2019, the Company issued a convertible promissory note in the principal amount of $ 55,000 (including original issuance discount of

$ 5,000 ) that matured July 25, 2019 and bearing a one-time interest fee of 10 %.

The investor has the right to convert the Outstanding Balance

(as defined in the note) of the note at any time into shares of common stock of the Company at a conversion price of $0.075 per share,

subject to adjustment.

Upon maturity, payment may be made in cash, by converting the redemption amount into shares of the Company’s

common stock at a conversion price of the lesser of:

(a) $0.075 per share, subject to adjustment;

and (b) the Market Price (as defined

in the note), or a combination thereof.

Upon the occurrence of an event of default, the investor may accelerate the note pursuant to which

the Outstanding Balance will become immediately due and payable in cash at the Mandatory Default Amount (as defined in the note).

Company is prohibited from effecting a conversion of any note to the extent that, as a result of such conversion, the investor, together

with its affiliates, would beneficially own more than 4.99% of the number of shares of the Company’s common stock outstanding immediately

after giving effect to the issuance of shares of common stock upon conversion of the note, which beneficial ownership limitation may be

increased by the investor up to, but not exceeding, 9.99%.

On May 19, 2021, the investor received a default judgment against the

Company in the amount of $144,950.

In accordance with the judgment, commencing May 19, 2021, the Company began accruing interest at the

rate of 18% per annum.

On June 17, 2021, the Company filed a motion to set aside default and motion for new trial asserting it was improperly

On July 20, 2021, the court granted the Company’s motion finding and ordered a new trial of the matter.

of September 30, 2021 and December 31, 2020, the remaining carrying value of the note was $148,685 and $55,000, respectively.

As of September

30, 2021 and December 31, 2020, accrued interest payable of $0 and $92,600, respectively, was outstanding on the note (See Note 8 –

Rother Investments’ Petition ).

to June 2019, the Company issued convertible promissory notes in the aggregate principal amount of $ 389,000 (including aggregate original

issuance discount of $ 39,000 ) that matured at dates ranging from July 15, 2019 to June 6, 2020 and accruing interest at rates ranging

from 5 % to 12 % per annum.

The investors have the right to convert the Outstanding Balance (as defined in the notes) of the notes at any

time into shares of common stock of the Company at a conversion price of $0.075 per share, subject to adjustment.

Upon maturity, payment

may be made in cash, by converting the redemption amount into shares of the Company’s common stock at a conversion price of the

(a) $0.075 per share, subject to adjustment;

and (b) the Market Price (as defined in the notes), or a combination thereof.

Upon the occurrence of an event of default, the investors may accelerate the note pursuant to which the Outstanding Balance will become

immediately due and payable in cash at the Mandatory Default Amount (as defined in the notes).

The Company is prohibited from effecting

a conversion of any note to the extent that, as a result of such conversion, the investor, together with its affiliates, would beneficially

own more than 4.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to the issuance

of shares of common stock upon conversion of the note, which beneficial ownership limitation may be increased by the investor up to, but

not exceeding, 9.99%.

In January 2020, one of the promissory notes was amended whereby the conversion price for $ 9,202 which is a portion

of the principal amount of the note was amended to $ 0.0004 per share.

The amendment was deemed a debt modification and accounted for accordingly.

During the year ended December 31, 2019, the noteholders converted $ 31,180 of principal and $ 8,000 of accrued interest into an aggregate

of 10,000,000 shares of common stock.

During the year ended December 31, 2020, one of the holders converted $ 24,826 of principal into

an aggregate of 35,005,850 shares of common stock;

and one of the holders converted $ 168,820 of principal and $ 362,027 of accrued interest

into 26.54237 shares of Series Y preferred shares having a stated value of $ 530,847 , resulting in a reduction of the derivative liability

by $ 719,416 and a gain on settlement of $ 719,416 .

On April 30, 2021, one of the holders of non-convertible notes entered into an

agreement to cancel the entire amount owed to them (including principal of $ 131,174 and accrued

interest of $ 304,485 ) in exchange for a cash payment of $ 150,000 by the Company, resulting in a reduction of the derivative liability

of $ 300,424 and a gain on settlement of debt of $ 586,083 (See Note 8 – Power Up Lending Group, Ltd.

2021 , one of the holders converted $ 33,000 of principal and $ 1,185,200 of accrued interest into

60.91 shares of Series Y preferred shares having a stated value of $ 1,218,200 , resulting in a reduction of the derivative liability by

$ 936,405 and a gain on settlement of $ 936,405 .

As of September 30, 2021 and December 31, 2020, the remaining carrying value of the notes

was $ 0 and $ 164,174 , respectively.

As of September 30, 2021 and December 31, 2020, accrued interest payable of $ 0 and $ 1,191,998 , respectively,

was outstanding on the notes.

November 13, 2019, the Company issued three convertible promissory notes in the aggregate principal amount of $ 108,900 , having an aggregate

original issuance discount of $ 9,900 , resulting in cash proceeds of $ 99,000 .

The notes matured on May 13, 2020 and accrue interest at

a rate of 12 % per annum.

The investors have the right to convert the Outstanding Balance (as defined in the notes) of the notes at any

time into shares of common stock of the Company at a conversion price of $0.01 per share, subject to adjustment.

In the event of default,

the conversion price shall be 60% of the average of the three lowest closing bid prices of the Company’s common stock during the

20 days prior to the conversion date.

The Company is prohibited from effecting a conversion of any note to the extent that, as a result

of such conversion, the investor, together with its affiliates, would beneficially own more than 4.99% of the number of shares of the

Company’s common stock outstanding immediately after giving effect to the issuance of shares of common stock upon conversion of

the note, which beneficial ownership limitation may be increased if the Market Capitalization (as defined in the notes) falls below $2,500,000,

but not exceeding, 9.99%.

During the year ended December 31, 2020, two of the holders converted $72,600 of principal and $112,671 of accrued

interest into 9.26353 shares of Series Y preferred shares having a stated value of $185,271, resulting in a reduction of the derivative

liability by $301,257 and a gain on settlement of $301,257.

As of September 30, 2021 and December 31, 2020, the carrying value of the

remaining note was $36,300.

As of September 30, 2021 and December 31, 2020, accrued interest payable of $87,789 and $57,231, respectively,

was outstanding on the remaining note.

December 6, 2019, the Company issued convertible promissory notes in the aggregate principal amount of $110,000, having an aggregate original

issuance discount of $10,000, resulting in cash proceeds of $100,000.

The notes matured on June 6, 2020 and accrue interest at a

rate of 12% per annum.

The investors have the right to convert the Outstanding Balance (as defined in the notes) of the notes at

any time into shares of common stock of the Company at a conversion price of $0.01 per share, subject to adjustment.

In the event of default,

the conversion price shall be 60% of the average of the three lowest closing bid prices of the Company’s common stock during the

20 days prior to the conversion date.

The Company is prohibited from effecting a conversion of any note to the extent that, as a result

of such conversion, the investor, together with its affiliates, would beneficially own more than 4.99% of the number of shares of the

Company’s common stock outstanding immediately after giving effect to the issuance of shares of common stock upon conversion of

the note, which beneficial ownership limitation may be increased if the Market Capitalization (as defined in the notes) falls below $2,500,000,

but not exceeding, 9.99%.

During the year ended December 31, 2020, the holders converted $110,000 of principal and $123,451 of accrued

interest into 11.67255 shares of Series Y preferred shares having a stated value of $233,451, resulting in a reduction of the derivative

liability by $379,600 and a gain on settlement of $379,600.

As of September 30, 2021 and December 31, 2020, the remaining carrying value

of the notes was $0.

As of September 30, 2021 and December 31, 2020, accrued interest payable of $0 was outstanding on the notes.

December 2019, the Company and the holders of all of the outstanding Series A and Series B Preferred Shares (the “Preferred Shares”)

entered into Exchange Agreements whereby 2,800 Series A Preferred Shares and 1,126 Series B Preferred Shares were canceled in exchange

for the issuance of an aggregate of $3,500,000 and $1,548,250 of convertible promissory notes, respectively.

The notes matured at dates

ranging from December 24, 2019 to May 18, 2020 and accrue interest at a rate of 12% per annum.

The investors have the right to convert

the Outstanding Balance (as defined in the notes) of the notes at any time into shares of common stock of the Company at a conversion

price of $0.005 per share, subject to adjustment.

In the event of default, the Outstanding Balance shall immediately increase to 130%

of the Outstanding Balance and a penalty of $100 per day shall accrue until the default is remedied.

For a period of two years from the

issuance date, in the event the Company issues or sells any additional shares of common stock or common stock equivalents at a price less

than the Conversion Price (as defined in the notes) then in effect (a “Dilutive Issuance”), the Conversion Price of the notes

shall be reduced to the Dilutive Issuance Price and the number of shares issuable upon conversion shall be increased on a full ratchet

The Company is prohibited from effecting a conversion of any note to the extent that, as a result of such conversion, the investor,

together with its affiliates, would beneficially own more than 9.99 % of the number of shares of the Company’s common stock outstanding

immediately after giving effect to the issuance of shares of common stock upon conversion of the note.

During the year ended December

31, 2019, the noteholders converted $ 185,500 of principal and $ 300 of accrued interest into an aggregate of 30,669,903 shares of common

stock and 37,160,000 shares of common stock to be issued.

During the year ended December 31, 2020, the noteholders converted $ 31,137 of

principal and $ 128 of accrued interest into an aggregate of 6,253,056 shares of common stock;

and the noteholders converted $4,793,113

of principal and $2,564,325 of accrued interest into 367.8719 shares of Series Y preferred shares having a stated value of $7,357,438,

resulting in a reduction of the derivative liability by $89,648,951 and a gain on settlement of $89,648,951.

On January 7, 2021, a noteholder

converted $38,500 of principal and $55,261 of accrued interest into 3.72667 shares of Series Y preferred shares having a stated value

of $74,533, resulting in a reduction of the derivative liability by $3,880,958 and a gain on settlement of $3,900,186.

As of September

30, 2021 and December 31, 2020, the remaining carrying value of the notes was $0 and $38,500, respectively.

As of September 30, 2021 and

December 31, 2020, accrued interest payable of $0 and $54,473, respectively, was outstanding on the notes.

January to September 2020, the Company issued convertible promissory notes in the aggregate principal amount of $ 700,700 , having an aggregate

original issuance discount of $ 63,700 , resulting in cash proceeds of $ 637,000 .

The notes mature from July 2020 to March 2021 and

accrue interest at a rate of 12 % per annum.

During the first 180 days the notes are outstanding, the Company shall have the right to prepay

the notes for an amount equal to 120% (during the first 90 days) or 135% (during the subsequent 90 days) of the Outstanding Balance (as

defined in the notes) being prepaid.

The investors have the right to convert the Outstanding Balance of the notes at any time into shares

of common stock of the Company at a conversion price of $0.01 per share, subject to adjustment.

In the event of default, the conversion

price shall be 60% of the average of the three lowest closing bid prices of the Company’s common stock during the 20 days prior

to the conversion date.

Notwithstanding the foregoing, upon the occurrence of an event of default, the conversion price for the April

2020 notes, having an aggregate original principal amount of $330,000, shall not be less than $0.001.

The Company is prohibited from effecting

a conversion of any note to the extent that, as a result of such conversion, the investor, together with its affiliates, would beneficially

own more than 4.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to the issuance

of shares of common stock upon conversion of the note, which beneficial ownership limitation may be increased if the Market Capitalization

(as defined in the notes) falls below $2,500,000, but not exceeding, 9.99%.

During the year ended December 31, 2020, the noteholders converted

$ 700,700 of principal and $ 462,763 of accrued interest into 58.17315 shares of Series Y preferred shares having a stated value of $ 1,163,463 ,

resulting in a reduction of the derivative liability by $ 1,885,194 , a reduction in debt discount by $ 72,637 and a gain on settlement of

$ 1,812,557 .

On March 23, 2021 , a noteholder converted $21,944 of accrued interest into 1.09721 shares of Series Y preferred shares having

a stated value of $21,945, resulting in a reduction of the derivative liability by $17,548 and a gain on settlement of $17,548.

September 30, 2021 and December 31, 2020, the remaining carrying value of the notes was $0.

As of September 30, 2021 and December 31,

2020, accrued interest payable of $0 and $13,844 was outstanding on the notes.

December 15, 2020, $ 79,143 of accrued compensation owed to the Company’s former Chief Financial Officer was settled by the issuance

of a convertible note in the amount of $ 64,143 , having a maturity date of June 15, 2021 and bearing interest of 12 % per annum, resulting

in a gain on settlement of accounts payable of $ 15,000 .

The holder has the right to convert the Outstanding Balance (as defined in the

note) of the note at any time into shares of common stock of the Company at a conversion price of $0.0003 per share, subject to adjustment.

In the event of default, the conversion price shall be 60% of the average of the three lowest closing bid prices of the Company’s

common stock during the 20 days prior to the conversion date.

As a result of the beneficial conversion feature of the note, debt discount

of $64,143 was recognized with a corresponding increase in additional paid-in capital.

On December 24, 2020, the holder converted $64,143

of principal into 3.20716 shares of Series Y preferred shares having a stated value of $64,143, resulting in a reduction in debt discount

by $60,971 and a loss on settlement of $60,971.

As of September 30, 2021 and December 31, 2020, the remaining carrying value of the note

As of September 30, 2021 and December 31, 2020, accrued interest payable of $0 was outstanding on the note.

As of September 30, 2021

and December 31, 2020, the remaining carrying value of the convertible notes was $ 3,063,970 and $ 3,186,303 , respectively.

As of September

30, 2021 and December 31, 2020, accrued interest payable of $ 1,661,704 and $ 2,483,955 , respectively, was outstanding on the notes.

Upon the issuance of

certain convertible notes, the Company determined that the features associated with the embedded conversion option embedded in the notes,

should be accounted for at fair value, as a derivative liability, as the Company cannot determine if a sufficient number of shares would

be available to settle all potential future conversion transactions.

The Company does not

have enough authorized and unissued shares of common stock to convert all of the convertible promissory notes into shares of common stock.

As a result of this authorized shares shortfall, all of the convertible notes payable, including those where the maturity date has not

yet been reached, are in default.

Accordingly, (i) interest has been accrued at the default interest rate, if applicable, and (ii) the

embedded conversion option has been accounted for, at fair value, as a derivative liability (See Note 10).

NOTE 10 – DERIVATIVE

LIABILITIES AND FAIR VALUE MEASUREMENTS

Upon the issuance of

certain convertible debentures, warrants, and preferred stock, the Company determined that the features associated with the embedded conversion

option embedded in the debentures, should be accounted for at fair value, as a derivative liability, as the Company cannot determine if

a sufficient number of shares would be available to settle all potential future conversion transactions.

During the nine months

ended September 30, 2021, upon issuance of the instruments underlying the derivative liabilities

and upon revaluation (immediately prior to conversion of the underlying instrument) , the Company estimated the fair value of the

embedded derivatives using the Black-Scholes Pricing Model based on the following assumptions:

(1) dividend yield of 0 %, (2) expected

volatility of 133.69 % to 138.77 %, (3) risk-free interest rate of 0.01 % to 0.14 %, and (4) expected life of 0.06 to 1.85 years.

On September 30, 2021,

the Company estimated the fair value of the embedded derivatives of $ 4,289,634 using the Black-Scholes Pricing Model based on the following

(1) dividend yield of 0 %, (2) expected volatility of 137.90 %, (3) risk-free interest rate of 0.07 % to 0.09 %, and (4) expected

life of 0.01 to 1.33 years.

the year ended December 31, 2020, upon issuance of the instruments underlying the derivative liabilities and upon revaluation (immediately

prior to conversion of the underlying instrument), the Company estimated the fair value of the embedded derivatives using the Black-Scholes

Pricing Model based on the following assumptions:

(1) dividend yield of 0 %, (2) expected volatility of 119.33 % to 128.94 %, (3) risk-free

interest rate of 0.06 % to 1.56 %, and (4) expected life of 0.06 to 2.11 years.

On December 31, 2020,

the Company estimated the fair value of the embedded derivatives of $ 25,475,514 using the Black-Scholes Pricing Model based on the following

(1) dividend yield of 0 %, (2) expected volatility of 132.11 %, (3) risk-free interest rate of 0.08 % to 0.13 %, and (4) expected

life of 0.04 to 2.08 years.

the three months ended March 31, 2022 and 2021, the Company received proceeds from the issuance of non-convertible notes of $ 0 and $ 24,647 ,

repaid aggregate principal of $ 100,000 and $ 0 , and paid interest of $ 195,000 , and $ 0 , respectively, on non-convertible notes.

September 23, 2021, the Company entered into a Resolution Agreement with Sheppard, Mullin, Richter & Hampton concerning the $ 459,250.88

judgement entered against the Company (See Note 9).

Under the terms of the Resolution Agreement, which the Company has classified as

a non-convertible note, the Company was required to make a $25,000 initial payment by September 30, 2021 and is required to make $15,000

monthly payments from October 2021 to January 2023 with a final $10,000 payment due in February 2023.

The Company has made the October

2021 to April 2022 monthly payments .

During the year ended December 31, 2021, the Company made $ 70,000 in payments towards the

Resolution Agreement.

During the three months ended March 31, 2022, the Company made $ 45,000 in payments towards the Resolution Agreement.

As of March 31, 2022, the Resolution Agreement had a balance of $ 150,389 , net an unamortized debt discount of $ 9,611 .

January 24, 2022, the Company settled a non-convertible note in the principal amount of $ 55,000 with accrued interest and penalties of

$ 358,420 for a cash payment of $ 250,000 .

The Company realized a gain on settlement of debt of debt of $ 163,420 .

following table details the current and long-term principal due under non-convertible notes as of March 31, 2022.

OF CURRENT AND LONG TERM PRINCIPAL DUE UNDER NON CONVERTIBLE NOTE

Principal (Current)

Non-Convertible Note

Sheppard Mullin Resolution Agreement

Debt Discount

Total Principal of Non-Convertible Notes, net

7 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES

of March 31, 2022 and December 31, 2021, the Company owed accounts payable and accrued expenses of $ 3,170,753 and $ 2,773,894 , respectively.

These are primarily comprised of payments to vendors, accrued interest on debt, and accrued legal bills.

OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts Payable

Accrued Interest

Accrued Expenses

Total Accounts Payable and Accrued Expenses

8 – ACCRUED PAYROLL AND RELATED EXPENSES

Company is delinquent in filing its payroll taxes, primarily related to stock compensation awards in 2016 and 2017, but also including

payroll for 2018, 2019, 2020, and 2021.

As of March 31, 2022 and December 31, 2021, the Company owed payroll tax liabilities, including

penalties, of $ 4,057,000 and $ 4,001,470 , respectively, to federal and state taxing authorities.

The actual liability may be higher or

lower due to interest or penalties assessed by federal and state taxing authorities.

9 – COMMITMENTS AND CONTINGENCES

time to time, we may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business.

is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.

Except as set forth below, we are currently not aware of any such legal proceedings or claims that will have, individually or in the

aggregate, a material adverse effect on our business, financial condition or operating results.

Mullin’s Demand for Arbitration

December 1, 2020, Sheppard, Mullin, Richter & Hampton LLP (“Sheppard Mullin”), the Company’s former securities

counsel, filed a demand for arbitration at JAMS in New York, New York against the Company, alleging the Company’s breach of an

engagement agreement dated January 4, 2018, and a failure of the Company to pay $ 487,390.73 of outstanding legal fees to Sheppard Mullin.

Sheppard Mullin was awarded $ 459,251 in unpaid legal fees, disbursements and interest on June 25, 2021.

A judgement confirming the arbitration

award was entered on September 8, 2021 in the Federal District Court located in Denver, Colorado.

September 23, 2021, the Company entered into a Resolution Agreement with Sheppard, Mullin, Richter & Hampton concerning the $ 459,250.88

judgement entered against the Company.

Under the terms of the Resolution Agreement, the Company was required to make a $25,000 initial

payment by September 30, 2021 and is required to make $15,000 monthly payments from October 2021 to January 2023 with a final $10,000

payment due in February 2023 .

The Company has made the October 2021 to April 2022 monthly payments.

DEQ Consent Order

June 30, 2021, the Company entered into a Consent Order with the Virginia State Water Control Board.

Under the Consent Order, the Company

is required to pay a civil penalty of $ 90,000 , improve its internal control plans regarding recycled and waste materials, remediate certain

environmental concerns on the properties it leases, among other requirements.

The Company believes it is appropriate to recognize an

environmental remediation liability as a regulatory claim that was asserted in the Notices of Violations issued to the Company in November

2019, for which the June 2021 Consent Order rectifies.

effectiveness of the Company’s acquisition of Empire on October 1, 2021, the Company incurred $ 71,017 in environmental remediation

liabilities, of which $ 15,017 was a fair estimate of the cost to remediate the properties it leases and a balance of $ 56,000 for the

civil penalty as of the acquisition date.

The Company paid $ 34,983 towards the remediation of the properties and $ 42,000 towards the

civil penalty from October 1, 2021 to December 31, 2021.

The Company paid $ 22,207 towards the remediation of the properties and $ 14,000

towards the civil penalty during the three months ended March 31, 2022.

As of March 31, 2022, the Company had $ 0 in civil penalties and

$ 0 in costs remaining to remediate the properties in accordance with the Consent Order.

The Company is committed to improving its processes

and controls to ensure its operations have minimal environmental impact with the goal of minimizing the number of comments and citations

received by the Department of Environmental Quality going forward.

10 – CONVERTIBLE NOTES PAYABLE

November 29, 2021, the Company entered into a securities purchase agreement with certain institutional investors (“Investors”)

as purchasers.

Pursuant to the securities purchase agreement, the Company sold, and the Investors purchased, approximately $ 37,714,966 ,

which consisted of approximately $ 27,585,450 in cash and $ 4,762,838 of existing debt of the Company which was exchanged for the notes

and warrants issued in this offering principal amount of senior secured convertible notes and 2,514,331 warrants valued at $ 36,516,852 .

The senior notes were issued with an original issue discount of 6 %, bear interest at the rate of 6 % per annum, and mature after 6 months,

on May 30, 2022 .

The senior notes are convertible into shares of the Company’s common stock, par value $ 0.001 per share at a conversion

price per share of $ 15.00 , subject to adjustment under certain circumstances described in the senior notes.

To secure its obligations

thereunder and under the securities purchase agreement, the Company has granted a security interest over substantially all of its assets

to the collateral agent for the benefit of the Investors, pursuant to a pledge and security agreement.

Upon the listing of the common

stock on a national exchange and certain other conditions being met, the senior notes issued in this offering will automatically convert

into common stock at the conversion price set forth in the senior notes.

The Company paid $ 2,200,000 and a warrant to purchase

200,000 shares of common stock valued at $ 2,904,697 as commission for the offering.

maturity date of the senior notes may be extended by the Company prior to the initial maturity date to November 30, 2022 if no equity

conditions failure is occurring.

The maturity date of the senior notes also may be extended by the holders under other circumstances

specified therein.

If the Company is unable to extend the senior notes or elects not to do so, the Company will be required to repay

the senior notes through equity issuances, additional borrowings, cash flows from operations and/or other sources of liquidity.

The warrants are exercisable for five ( 5 ) years to purchase an aggregate of 2,514,331 shares of common stock at an exercise price

per share of $ 19.50 , subject to adjustment under certain circumstances described in the warrants.

the issuance of certain convertible notes, the Company determined that the features associated with the embedded conversion option embedded

in the notes, should be accounted for at fair value, as a derivative liability, as the Company cannot determine if a sufficient number

of shares would be available to settle all potential future conversion transactions.

maturity dates of the convertible notes outstanding at March 31, 2022:

OF MATURITY DATES OF CONVERTIBLE NOTES

Maturity Date

Total Principal Outstanding

of March 31, 2022 and December 31, 2021, the remaining carrying value of the convertible notes was $ 25,212,767 and $ 6,459,469 , net of

unamortized debt discount of $ 12,502,199 and $ 31,255,497 , respectively.

As of March 31, 2022 and December 31, 2021, accrued interest

payable of $ 743,966 and $ 192,191 , respectively, was outstanding on the notes.

11 – DERIVATIVE LIABILITIES AND FAIR VALUE MEASUREMENTS

As of December 31, 2021, the Company did not have

sufficient authorized but unissued shares to satisfy the conversion or exercise of its convertible notes, warrants, preferred shares,

As such, the Company recorded a derivative liability for these instruments.

Upon the consummation of a 1:300 reverse stock

split on February 17, 2022, the Company rectified this authorized share shortfall and reclassified the carrying value of its

derivative liabilities as of that date to additional paid in capital.

the year ended December 31, 2021, upon issuance of convertible debt and warrants, the Company estimated the fair value of the embedded

derivatives using the Black-Scholes Pricing Model based on the following assumptions:

(1) dividend yield of 0 %, (2) expected volatility

of 110.59 % to 138.73 %, (3) risk-free interest rate of 0.07 % to 1.14 %, and (4) expected life of 0.50 to 5.0 years.

December 31, 2021, the Company estimated the fair value of the embedded derivatives of $ 44,024,242 using the Black-Scholes Pricing Model

based on the following assumptions:

(1) dividend yield of 0 %, (2) expected volatility of 136.12 %, (3) risk-free interest rate of 0.19 %

to 1.15 %, and (4) expected life of 0.41 to 5.0 years.

February 17, 2022, the Company estimated the fair value of the embedded derivatives of $ 29,759,766 using the Black-Scholes Pricing Model

based on the following assumptions:

(1) dividend yield of 0 %, (2) expected volatility of 155.45 %, (3) risk-free interest rate of 0.06 %

to 1.85 %, and (4) expected life of 0.28 to 4.79 years.

Company adopted the provisions of ASC 825-10.

3 unchanged sentences

value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal

or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset

or liability, such as inherent risk, transfer restrictions, and risk of non-performance.

or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the

asset or liability, such as inherent risk, transfer restrictions, and risk of non-performance.

ASC 825-10 establishes a fair value hierarchy

1 unchanged sentence

ASC 825-10 establishes three levels of inputs that may be used to measure fair value:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 2 – Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities;

quoted prices in markets with insufficient volume or infrequent transactions (less active markets);

or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities.

1 – Quoted prices in active markets for identical assets or liabilities.

2 – Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities;

quoted prices in markets

with insufficient volume or infrequent transactions (less active markets);

or model-derived valuations in which all significant inputs

are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the

assets or liabilities.

3 – Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities.

items required to be recorded or measured on a recurring basis are based upon Level 3 inputs.

4 unchanged sentences

and is determined based on the lowest level input that is significant to the fair value measurement.

Company recognizes its derivative liabilities as Level 3 and values its derivatives using the methods discussed above.

Company recognizes its derivative liabilities as Level 3 and values its derivatives using the methods discussed below.

While the Company

2 unchanged sentences

value at the reporting date.

The primary assumptions that would significantly affect the fair values using the methods discussed are that

of volatility and market price of the underlying common stock of the Company.

of September 30, 2021 and December 31, 2020, the Company did not have any derivative instruments that were designated as hedges.

recorded or measured at fair value on a recurring basis consisted of the following items as of September 30, 2021 and December 31, 2020:

September 30,

The primary assumptions that would significantly affect the fair values using the methods discussed are

that of volatility and market price of the underlying common stock of the Company.

of March 31, 2022, the Company did not have any derivative instruments that were designated as hedges.

recorded or measured at fair value on a recurring basis in the accompanying condensed consolidated financial statements consisted of

the following items as of March 31, 2022 and December 31, 2021:

OF FAIR VALUE ON A RECURRING BASIS IN THE ACCOMPANYING FINANCIAL STATEMENTS

Quoted Prices

Identical Assets

Derivative liabilities

Derivative liability

Quoted Prices

Identical Assets

Derivative liabilities

The following table provides a summary of changes

in fair value of the Company’s Level 3 financial liabilities for the nine months ended September 30, 2021:

Markets for Identical Assets

Derivative liability

following table provides a summary of changes in fair value of the Company’s Level 3 financial liabilities for the three months

ended March 31, 2022:

OF CHANGES IN FAIR VALUE OF THE COMPANY’S LEVEL 3 FINANCIAL LIABILITIES

Balance, December 31, 2021

Transfers out due to conversions of convertible notes, accrued interest and warrants into shares of Series Y preferred stock

Transfers out due to elimination of the authorized share shortfall (reclassified to additional paid

( 29,759,766 )

Transfers out due to conversions of convertible notes and accrued interest into shares of common stock

Transfers out due to cash payments made pursuant to settlement agreements

Mark to market to February 17, 2022

( 14,264,476 )

Change in derivative liability due to authorized shares shortfall

Mark to market to September 30, 2021

Balance, September 30, 2021

Gain on change in derivative liabilities for the nine months ended September 30, 2021

Fluctuations in the Company’s stock price

are a primary driver for the changes in the derivative valuations during each reporting period.

As the stock price increases/(decreases)

for each of the related derivative instruments, the value to the holder of the instrument generally increases/(decreases), therefore increasing/(decreasing)

the liability on the Company’s balance sheet.

Decreases in the conversion price of the Company’s convertible notes are another

driver for the changes in the derivative valuations during each reporting period.

As the conversion price decreases for each of the related

derivative instruments, the value to the holder of the instrument (especially those with full ratchet price protection) generally increases,

therefore increasing the liability on the Company’s balance sheet.

Additionally, stock price volatility is one of the significant

unobservable inputs used in the fair value measurement of each of the Company’s derivative instruments.

The simulated fair value

of these liabilities is sensitive to changes in the Company’s expected volatility.

Increases in expected volatility would generally

result in higher fair value measurements.

A 10% change in pricing inputs and changes in volatilities and correlation factors would not

result in a material change in our Level 3 fair value.

NOTE 11 – STOCKHOLDERS’ DEFICIT

Balance, March 31, 2022

Gain on change in derivative liabilities for the three months ended March 31, 2022

in the Company’s stock price are a primary driver for the changes in the derivative valuations during each reporting period.

the stock price increases/(decreases) for each of the related derivative instruments, the value to the holder of the instrument generally

increases/(decreases), therefore increasing/(decreasing) the liability on the Company’s balance sheet.

Decreases in the conversion

price of the Company’s convertible notes are another driver for the changes in the derivative valuations during each reporting

As the conversion price decreases for each of the related derivative instruments, the value to the holder of the instrument (especially

those with full ratchet price protection) generally increases, therefore increasing the liability on the Company’s balance sheet.

Additionally, stock price volatility is one of the significant unobservable inputs used in the fair value measurement of each of the

Company’s derivative instruments.

The simulated fair value of these liabilities is sensitive to changes in the Company’s

expected volatility.

Increases in expected volatility would generally result in higher fair value measurements.

A 10% change in pricing

inputs and changes in volatilities and correlation factors would not result in a material change in our Level 3 fair value.

12 – STOCKHOLDERS’ EQUITY

Company is authorized to issue 10,000,000 shares of blank check preferred stock, par value $ 0.001 per share.

On July 2, 2019, the

Company authorized the issuance of 6,000 Series A preferred stock, par value $ 0.001 per share.

The Series A preferred stock has a $ 1,250

stated value per share and is convertible into shares of common stock at $ 0.05 per share, subject to certain adjustments.

The Certificate

of Designation for the Series A preferred stock was filed on July 9, 2019.

During the periods presented, there were 0

shares of Series A Preferred Stock outstanding.

June 24, 2019, the Company authorized the issuance of 2,000 shares of Series B Preferred Stock, par value $ 0.001 per share.

B Preferred Stock has a $ 1,250 stated value per share and is convertible into shares of common stock at $ 0.05 per share, subjected to

certain adjustments.

The Certificate of Designation for the Series B Preferred Stock was filed on July 9, 2019.

the periods presented, there were 0 shares of Series B Preferred Stock outstanding.

July 16, 2019, the Company authorized the issuance of 1,000 Series C Preferred Stock, par value $ 0.001 per share.

The 1,000 Series C preferred

shares are convertible into 1,000,000 shares of common stock upon the Company listing on a national exchange and other conditions.

Certificate of Designation for the Series C Preferred Stock was filed on July 19, 2019.

of September 30, 2021 and December 31, 2020, there were 1,000 shares of Series C Preferred Stock outstanding.

November 23, 2020, the Company authorized the issuance of 100 shares of Series X Preferred Stock, par value $ 0.0001 per share.

X Preferred Stock has a $ 20,000 stated value per share and is convertible into shares of common stock at $ 0.002 per share, subjected to

certain adjustments.

In the event the Company issues or sells any securities with an effective price or exercise or conversion price less

than the Conversion Price, the Conversion Price shall be reduced to the sale price or exercise or conversion price of the securities issued

The Certificate of Designation for the Series X Preferred Stock was filed on November 23, 2020.

November 25 to December 23, 2020, the Company issued an aggregate of 16.05 shares of Series X Preferred Stock for aggregate proceeds of

Upon each issuance of Series X shares, the conversion price was less than the Company’s stock price.

Accordingly, during

the year ended December 31, 2020, the Company recognized an aggregate beneficial conversion feature of $454,200 upon issuance of the Series

X preferred shares with a $454,200 increase in Discount on preferred stock and a corresponding increase in additional paid-in capital.

The preferred stock discount was amortized over 120 days commencing November 25, 2020 (the date of the initial issuance of the Series

X preferred shares), which is the maximum amount of time the Company had to conduct a stockholder vote to increase the Company’s

authorized shares.

Amortization of the preferred stock discount of $46,448 was recognized as a deemed dividend for the year ended December

As of December 31, 2020, unamortized debt discount on Series X Preferred Stock was $407,752.

February 16 to March 10, 2021, the Company issued an aggregate of 10.00 shares of Series X Preferred Stock for aggregate proceeds of $200,000.

Upon each issuance of Series X shares, the conversion price was less than the Company’s stock price.

Accordingly, during the nine

months ended September 30, 2021, the Company recognized an aggregate beneficial conversion feature of $ 2,852,500 upon issuance of the

Series X preferred shares with a $ 2,852,500 increase in Discount on preferred stock and a corresponding increase in additional paid-in

The preferred stock discount was amortized over 120 days commencing November 25, 2020 (the date of the initial issuance of the

Series X preferred shares), which is the maximum amount of time the Company had to conduct a stockholder vote to increase the Company’s

authorized shares.

Amortization of the preferred stock discount of $ 3,260,252 was recognized as a deemed dividend for the nine months

ended September 30, 2021.

As of September 30, 2021, unamortized debt discount on Series X Preferred Stock was $ 0 .

of September 30, 2021 and December 31, 2020, there were 26.05 and 16.05 shares, respectively, of Series X Preferred Stock outstanding.

December 30, 2020, the Company authorized the issuance of 1,000 shares of Series Y Preferred Stock, par value $ 0.001 per share.

Y Preferred Stock has a $ 20,000 stated value per share and is convertible into shares of common stock at $ 0.002 per share, subjected to

certain adjustments.

In the event the Company issues or sells any securities with an effective price or exercise or conversion price less

than the Conversion Price, the Conversion Price shall be reduced to the sale price or exercise or conversion price of the securities issued

The Certificate of Designation for the Series Y Preferred Stock was filed on December 30, 2020.

December 23 to December 30, 2020, the Company issued 654.781794 shares of Series Y Preferred Stock, having a stated value of $ 13,095,636 ,

in exchange for convertible notes payable of $ 5,775,767 (net of debt discount of $ 133,608 ), accrued interest of $ 3,625,237 , and 14,765,624,721

The exchanges resulted in a reduction of derivative liabilities related to the convertible notes and accrued interest of $ 92,934,419 ,

a reduction of derivative liabilities related to the warrants of $ 72,892,563 , and a net gain on settlement of $ 162,132,350 .

the foregoing amounts is 3.20716 shares of Series Y Preferred Stock, having a stated value of $ 64,143 , issued to the Company’s Chief

Financial Officer, in exchange for convertible notes of $ 3,172 (net of debt discount of $ 60,971 ), resulting in a loss on settlement of

Upon each issuance of Series Y shares, the conversion price was less than the Company’s stock price.

Accordingly, during

the year ended December 31, 2020, the Company recognized an aggregate beneficial conversion feature of $ 21,594,115 upon issuance of the

Series Y preferred shares with a $ 21,594,115 increase in Discount on preferred stock and a corresponding increase in additional paid-in

The preferred stock discount was amortized over 120 days commencing December 23, 2020 (the date of the initial issuance of the

Series Y preferred shares), which is the maximum amount of time the Company had to conduct a stockholder vote to increase the Company’s

authorized shares.

Amortization of the preferred stock discount of $ 1,028,091 was recognized as a deemed dividend for the year ended December

As of December 31, 2020, unamortized debt discount on Series Y Preferred Stock was $ 20,566,024 .

January 7 to March 23, 2021, the Company issued 4.82388 shares of Series Y Preferred Stock, having a stated value of $ 96,478 , in exchange

for convertible notes payable of $ 38,500 , accrued interest of $ 77,205 , and 131,249,975 warrants.

The exchanges resulted in a reduction

of derivative liabilities related to the convertible notes and accrued interest of $ 2,502,223 , a reduction of derivative liabilities related

to the warrants of $ 1,396,283 , and a net gain on settlement of $ 3,917,734 .

On May 1, the Company issued 60.91 shares of Series Y Preferred

Stock, having a stated value of $ 1,218,200 , in exchange for a convertible note payable of $ 33,000 and accrued interest of $ 1,185,200 .

The exchange resulted in a reduction of derivative liabilities related to the convertible notes and accrued interest of $ 936,405 , and

a net gain on settlement of $ 936,405 .

Upon each issuance of Series Y shares, the conversion price was less than the Company’s stock

Accordingly, during the nine months ended September 30, 2021, the Company recognized an aggregate beneficial conversion feature

of $ 10,972,647 upon issuance of the Series Y preferred shares with a $ 10,972,647 increase in Discount on preferred stock and a corresponding

increase in additional paid-in capital.

The preferred stock discount was amortized over 120 days commencing December 23, 2020 (the date

of the initial issuance of the Series Y preferred shares), which is the maximum amount of time the Company had to conduct a stockholder

vote to increase the Company’s authorized shares.

Amortization of the preferred stock discount of $ 31,538,671 was recognized as

a deemed dividend for the nine months ended September 30, 2021.

As of September 30, 2021, unamortized debt discount on Series Y Preferred

Stock was $ 0 .

March 17, 2021, the Company issued 27.78633 shares of Series Y Preferred Stock that were recorded as to be issued as of December 31, 2020.

of September 30, 2021 and December 31, 2020, there were 720.515674 and 626.995464 shares of Series Y Preferred Stock outstanding and 0

and 27.78633 shares to be issued, respectively.

On September 30, 2021,

the Company authorized the issuance of 500 shares of Series Z Preferred Stock, par value $ 0.001 per share.

The Series Z Preferred Stock

has a $ 20,000 stated value per share and all 500 Series Z preferred shares, in aggregate, are convertible into 19.98 % of the issued and

outstanding common shares of the Company (post conversion).

The conversion rate is applicable on a pro rata basis to each share of Series

Z Preferred Stock upon conversion.

This anti-dilutive conversion feature is in effect until such time an S-1 Registration Statement is

declared effective by the SEC in conjunction with a NASDAQ listing.

September 30, 2021, the Company entered into a Series Z Preferred Stock Issuance Agreement with the Company’s Chief Executive Officer

whereby the Company received $ 1,000,000 in exchange for the issuance of:

(i) a $1,000,000 note payable;

and (ii) 250 Series Z Preferred

Shares having a fair value of $632,019 (See Note 14).

The note bears interest of 8 % per annum and is due within three days of the Company’s

next closing of equity financing of $ 3,000,000 or more.

The proceeds received were allocated to the debt and equity on a relative fair

Accordingly, debt discount of $ 387,262 was recognized with a corresponding increase in additional paid-in capital.

the due date is contingent upon a future event, the entire debt discount was amortized to interest expense immediately.

On September 30, 2021,

an investor owning warrants to purchase 156,250,079 common shares at $ 0.0004 per share entered into an agreement to cancel the aforementioned

warrants in exchange for:

(i) a cash payment of $1,000,000 by the Company;

and (ii) 250 Series Z Preferred Shares having a fair value

The settlement resulted in a reduction in the derivative liability of $ 5,750,067 , offset by a reduction in cash of $ 1,000,000 ,

an increase in additional paid-in capital of $ 632,019 and a gain on settlement of debt of $ 4,118,048 .

September 30, 2021, the Company amended its Articles of Incorporation to change the number of authorized common shares to 1,200,000,000

shares of common stock, par value $ 0.001 per share, which has been reflected retroactively in the accompanying consolidated financial

January 8, 2020, the Company issued 37,160,000 shares of the Company’s common stock previously recorded as to be issued as of December

On March 7, 2020, a stockholder

returned 69,000 shares of the Company’s common stock back to the Company.

The shares were immediately retired.

Accordingly, common

stock was decreased by the par value of the shares of common stock contributed of $ 69 with a corresponding increase in additional paid

the year ended December 31, 2020, a warrant exercise in 2019, to purchase 120,000 shares of common stock, was rescinded.

The rescission

was recorded as a decrease in common stock to be issued of $ 120 and a decrease in additional paid-in capital of $ 5,880 with a corresponding

increase in accounts payable and accrued expenses of $ 6,000 .

During the year ended

December 31, 2020, the Company issued an aggregate of 72,368,457 shares of its common stock, having an aggregate fair value of $ 370,755 ,

upon the conversion of convertible notes with a principal amount of $ 92,964 and accrued interest of $ 128 , which resulted in the reduction

of $ 278,545 of derivative liabilities and an aggregate net gain on conversion of convertible notes of $ 882 .

Accordingly, common stock

was increased by the par value of the shares of common stock issued of $72,369 and additional paid in capital was increased by $298,386.

On January 20, 2021,

the Company issued 4,448,251 shares of its common stock, having a fair value of $ 133,002 , upon the

conversion of convertible notes with a principal amount of $ 13,345 , which resulted in the

reduction of $ 118,778 of derivative liabilities and a loss on conversion of $ 880 .

June 2, 2021, the Company issued 1,006,250 shares of the Company’s common stock previously recorded as to be issued as of December

On June 4, 2021, an investor

owning 1,485,000 shares of the Company’s common stock and warrants to purchase 971,562,497 common shares at $ 0.0004 per share entered

into an agreement to cancel the aforementioned common shares and warrants in exchange for a cash payment of $ 11,000 by the Company.

the cancelation agreement resulted in a reduction in common stock of $ 1,485 for the par value of the common shares, a reduction in additional

paid-in capital of $ 9,515 , and a reduction in the derivative liability of $ 74,134,327 and a gain on settlement of $ 74,134,327 .

June 6, 2021, the Company awarded an aggregate of 2,175,431 fully-vested shares of common stock, having a fair value of $ 166,855 , to the

Chief Executive Officer for services rendered.

As of September 30, 2021

and December 31, 2020, there were 499,871,337 and 493,726,405 shares, respectively, of common stock issued and outstanding.

NOTE 12 – WARRANTS

From January 7 to March 23, 2021, the Company

issued 4.82388 shares of Series Y preferred stock, having a stated value of $ 96,478 , in exchange for convertible notes payable of $ 38,500 ,

accrued interest of $ 77,205 , and 131,249,975 warrants.

The exchanges resulted in a reduction of derivative liabilities related to the

convertible notes and accrued interest of $ 2,502,223 , a reduction of derivative liabilities related to the warrants of $ 1,396,283 , and

a net gain on settlement of $ 3,917,734 (See Note 9).

On June 4, 2021, an investor

owning 1,485,000 shares of the Company’s common stock and warrants to purchase 971,562,497 common shares at $ 0.0004 per share entered

into an agreement to cancel the aforementioned common shares and warrants in exchange for a cash payment of $ 11,000 by the Company.

cancelation agreement resulted in a reduction in common stock of $ 1,485 for the par value of the common shares, a reduction in additional

paid-in capital of $ 9,515 , and a reduction in the derivative liability of $ 74,134,327 and a gain on settlement of debt of $ 74,134,327

(See Note 11).

On June 4, 2021, an investor

owning warrants to purchase 1,250,000,002 common shares at $ 0.0004 per share entered into an agreement to cancel the aforementioned common

shares and warrants in exchange for a cash payment of $ 15,000 by the Company.

Accordingly, the cancelation agreement resulted in a reduction

in the derivative liability of $ 95,380,286 and a gain on settlement of $ 95,365,286 .

On September 30, 2021,

an investor owning warrants to purchase 156,250,079 common shares at $ 0.0004 per share entered into an agreement to cancel the aforementioned

warrants in exchange for:

(i) a cash payment of $ 1,000,000 by the Company;

and (ii) 250 Series Z Preferred Shares having a fair value

of $ 632,019 .

The settlement resulted in a reduction in the derivative liability of $ 5,750,067 , offset by a reduction in cash of $ 1,000,000 ,

an increase in additional paid-in capital of $ 632,019 and a gain on settlement of debt of $ 4,118,048 .

A summary of the Company’s warrant activity

during the nine months ended September 30, 2021, is presented below:

September 30, 2021, the Company authorized the issuance of 500 shares of Series Z Preferred Stock, par value $ 0.001 per share.

Z Preferred Stock has a $ 20,000 stated value per share and all 500 Series Z preferred shares, in aggregate, are convertible into 19.98 %

of the issued and outstanding common shares of the Company (post conversion).

The conversion rate is applicable on a pro rata basis to

each share of Series Z Preferred Stock upon conversion.

This anti-dilutive conversion feature is in effect until such time an S-1 Registration

Statement is declared effective by the SEC in conjunction with a NASDAQ listing.

of March 31, 2022 and December 31, 2021, there were 500 shares of Series Z Preferred Stock issued and outstanding.

Company is authorized to issue 1,200,000,000 shares of common stock, par value $ 0.001 per share.

the three months ended March 31, 2022, the Company issued 6,500 shares of the Company’s common stock previously recorded as to

be issued as of December 31, 2021.

of March 31, 2022 and December 31, 2021, there were 3,338,416 and 3,331,916 shares, respectively, of common stock issued and outstanding.

13 – WARRANTS

summary of the warrant activity for the three months ended March 31, 2022 is as follows:

OF WARRANT ACTIVITY

Outstanding at December 31, 2021

2,521,077,555

Expired/Canceled

( 2,509,502,555 )

Outstanding at September 30, 2021

Exercisable at September 30, 2021

Canceled/Exchanged

Outstanding at March 31, 2022

Exercisable at March 31, 2022

OF STOCK OUTSTANDING AND EXERCISABLE

Exercise Price

Weighted Avg.

Remaining Life

22.50 – 60.00

The aggregate intrinsic value

of outstanding stock warrants was $ 9,200 , based on warrants with an exercise price less than the Company’s stock price of $ 0.0372

as of September 30, 2021, which would have been received by the warrant holders had those holders exercised the warrants as of that date.

NOTE 13 – STOCK OPTIONS

Our stockholders approved

our 2014 Equity Incentive Plan in June 2014 (the “2014 Plan”), our 2015 Equity Incentive Plan in December 2015 (the “2015

Plan”), our 2016 Equity Incentive Plan in October 2016 (“2016 Plan”), our 2017 Equity Incentive Plan in December 2016

(“2017 Plan” and together with the 2014 Plan, 2015 Plan, 2016 Plan, the “Prior Plans”), our 2018 Equity Incentive

Plan in June 2018 (the “2018 Plan”), and our 2021 Equity Incentive Plan in September 2021 (“2021 Plan” , and together

with the Prior Plans, the “Plans”).

The Prior Plans are identical, except for the number of shares reserved for

issuance under each.

As of September 30, 2021, the Company had granted an aggregate of 64,310,000 securities under the Plans, with

50,190,000 shares available for future issuances.

The Plans provide for the

grant of incentive stock options to our employees and our subsidiaries’ employees, and for the grant of stock options, stock bonus

awards, restricted stock awards, performance stock awards and other forms of stock compensation to our employees, including officers,

consultants and directors.

The Prior Plans also provide that the grant of performance stock awards may be paid out in cash as determined

by the committee administering the Prior Plans.

Option valuation models require the input of highly

subjective assumptions.

The fair value of stock-based payment awards was estimated using the Black-Scholes option pricing model with a

volatility figure derived from historical data.

The Company accounts for the expected life of options based on the contractual life of

A summary of the Company’s stock option

activity during the nine months ended September 30, 2021, is presented below:

aggregate intrinsic value of outstanding stock warrants was $ 6,489 , based on warrants with an exercise price less than the Company’s

stock price of $ 7.90 as of March 31, 2022 which would have been received by the warrant holders had those holders exercised the warrants

as of that date.

14 – STOCK OPTIONS

stockholders approved our 2014 Equity Incentive Plan in June 2014 (the “2014 Plan”), our 2015 Equity Incentive Plan in December

2015 (the “2015 Plan”), our 2016 Equity Incentive Plan in October 2016 (“2016 Plan”), our 2017 Equity Incentive

Plan in December 2016 (“2017 Plan”), our 2018 Equity Incentive Plan in June 2018 (the “2018 Plan” and

together with the 2014 Plan, 2015 Plan, 2016 Plan, the “Prior Plans”), and our 2021 Equity Incentive Plan in September

2021 (“2021 Plan” , and together with the Prior Plans, the “Plans”).

The Prior Plans are identical, except for

the number of shares reserved for issuance under each.

As of March 31, 2022, the Company had granted an aggregate of 214,367 securities

under the Plans since inception, with 167,300 shares available for future issuances.

The Company made no grants under the pPans

during the three months ended March 31, 2022.

Plans provide for the grant of incentive stock options to our employees and our subsidiaries’ employees, and for the grant of stock

options, stock bonus awards, restricted stock awards, performance stock awards and other forms of stock compensation to our employees,

including officers, consultants and directors.

The Prior Plans also provide that the grant of performance stock awards may be paid out

in cash as determined by the committee administering the Prior Plans.

valuation models require the input of highly subjective assumptions.

The fair value of stock-based payment awards was estimated using

the Black-Scholes option pricing model with a volatility figure derived from historical data.

The Company accounts for the expected life

of options based on the contractual life of the options.

were no options issued during the three months ended March 31, 2022.

There was no options activity during the year ended December 31,

summary of the stock option activity for the three months ended March 31, 2022 as follows:

OF STOCK OPTION ACTIVITY

Outstanding at December 31, 2021

Expired/Canceled

Outstanding at September 30, 2021

Exercisable at September 30, 2021

Forfeiture/Cancelled

Outstanding at March 31, 2022

Exercisable at March 31, 2022

OF STOCK OUTSTANDING AND EXERCISABLE

Exercise Price

Remaining Life

Number of Options

$ 30.00 - 75.00

The aggregate intrinsic value

of outstanding stock options was $ 0 , based on options with an exercise price less than the Company’s stock price of $ 0.0372 as of

September 30, 2021, which would have been received by the option holders had those option holders exercised their options as of that date.

NOTE 14 – RELATED PARTY TRANSACTIONS

During the nine months ended

September 30, 2021 and 2020, the Company received aggregate advances of $ 2,091 and $ 0 and repaid an aggregate of $ 5,278 and $ 0 , respectively,

to the Company’s Chief Information Officer and $ 25,000 of advances from Empire Services, Inc.

The advances are non-interest bearing

and due on demand.

As of September 30, 2021 and December 31, 2020, the Company owed $ 0 and $ 3,187 , respectively, in advances to the Company’s

Chief Information Officer and $ 25,000 and $ 0 , respectively, in advances to Empire Services, Inc.

(See Note 5).

During the nine months ended

September 30, 2021 and 2020, the Company received aggregate proceeds of $ 1,515,424 and $ 20,520 , respectively, and repaid $ 0 from the issuance

of non-convertible notes to the Company’s Chief Executive Officer and Empires Services, Inc.

The non-convertible notes bear interest

from 15 % to 20 % and have maturity dates ranging from December 31, 2020 through October 15, 2021.

For those notes in default, the interest

rate increases to 35 % per annum from the date of default.

As of September 30, 2021 and December 31, 2020, the Company owed $ 1,535,944

and $ 0 , respectively, in non-convertible notes payable to the Company’s Chief Executive Officer and Empire Services, Inc.

On September 30, 2021,

the Company entered into a Series Z Preferred Stock Issuance Agreement with the Company’s Chief Executive Officer whereby the Company

received $ 1,000,000 in exchange for the issuance of:

(i) a $ 1,000,000 note payable;

and (ii) 250 Series Z Preferred Shares having a fair

value of $ 632,019 .

The note bears interest of 8 % per annum and is due within three days of the Company’s next closing of equity

financing of $ 3,000,000 or more.

The proceeds received were allocated to the debt and equity on a relative fair value basis.

debt discount of $ 387,262 was recognized with a corresponding increase in Additional paid-in capital.

Since the due date is contingent

upon a future event, the entire debt discount was amortized to interest expense immediately (See Note 11).

NOTE 15 – SUBSEQUENT EVENTS

The Company evaluates events that have occurred

after the balance sheet date but before the unaudited condensed consolidated financial statements are issued.

On September 30, 2021, MassRoots, Inc.

into definitive agreements to acquire the Company for consideration of (i) 495,000,000 shares of

Common Stock, (ii) within 3 business days of the closing of the Company’s next capital raise, repayment of a $ 1 million advance

made to purchase Empire’s Virginia Beach location and (iii) a promissory note in the principal amount of $ 3.7 million with a maturity

date of September 30, 2023.

The acquisition was effective October 1, 2021 upon the effectiveness of a Certificate of Merger in Virginia.

75.01 - 150.00

150.01 - 225.00

225.01 - 300.00

300.01 - 600.00

aggregate intrinsic value of outstanding stock options was $ 0 , based on options with an exercise price less than the Company’s

stock price of $ 7.90 as of March 31, 2022, which would have been received by the option holders had those option holders exercised their

options as of that date.

fair value of all options that vested during the three months ended March 31, 2022 and 2021 was $ 0 and $ 0 , respectively.

compensation expense of $ 0 as of March 31, 2022 will be expensed in future periods.

Leases (Operating Leases)

Company leases its facilities and certain automobiles under operating leases which expire on various dates through 2025.

determines if an arrangement is a lease at inception and whether it is a finance or operating leases.

Right of Use (“ROU”)

assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the obligation

to make lease payments from the lease.

Operating lease ROU assets and liabilities are recognized at the commencement date of the lease

based on the present value of lease payments over the lease term.

When readily determinable, the Company uses the implicit rate in determining

the present value of lease payments.

The ROU asset also includes any fixed lease payments, including in-substance fixed lease payments

and excludes lease incentives.

Lease expense for lease payments is recognized on a straight-line basis over the lease term.

is determined at lease commencement and includes any non-cancellable period for which the Company has the right to use the underlying

asset, together with any options to extend that the Company is reasonably certain to exercise.

effectiveness of the acquisition of Empire on October 1, 2021, the Company assumed $ 3,492,531 in ROU assets and $ 3,650,358 in lease liabilities

for the leasing of scrap metal yards from an entity controlled by the Company’s Chief Executive Officer.

Under the terms of the

leases, Empire is required to pay an aggregate of $ 145,821 per month and increasing by 3% on January 1st of every year.

expire on January 1, 2024 and the Company has two options to extend the leases by 5 years per option .

In the event the Company does not

exercise the options, the leases will continue on a month-to-month basis.

The Company cannot sublease any of the properties under the

lease agreements.

effectiveness of the acquisition of Empire on October 1, 2021, the Company assumed $ 30,699 in ROU assets and $ 31,061 in lease liabilities

for an office lease.

Under the terms of the lease, Empire is required to pay $ 1,150 per month and increasing by 3% on April 1st of every

year beginning on April 1, 2022 .

The lease expires on March 31, 2024 and Empire was required to make a security deposit of $ 1,150 .

Company does not have an option to extend the lease .

The Company cannot sublease the office under the lease agreements.

October 11, 2021, Empire entered into leasing agreements with a company owned by the Chief Executive Officer of Empire for the leasing

of the Company’s Virginia Beach metal recycling location.

Under the terms of the leases, Empire is required to pay $9,677 for the

prorated first month and $15,000 per month for the facilities beginning November 1, 2021 and increasing by 3% on January 1st of

every year thereafter.

The leases expire on January 1, 2024 and the Company has two options to extend the leases by 5 years per option .

In the event the Company does not exercise the options, the leases will continue on a month-to-month basis.

The Company cannot sublease

any of the properties under the lease agreements.

Leases (Operating Leases)

effectiveness of the acquisition of Empire on October 1, 2021, the Company assumed $ 26,804 in ROU assets and $ 18,661 in lease liabilities

for an automobile lease.

Under the terms of the lease, Empire is required to pay $ 750 per month until the lease expires on February 18,

2025 and the Company does not have an option to renew or extend .

The Company is responsible for any damage to the automobile under

the terms of the lease.

effectiveness of the acquisition of Empire on October 1, 2021, the Company assumed $ 34,261 in ROU assets and $ 27,757 in lease liabilities

for an automobile lease.

Under the terms of the lease, Empire is required to pay $ 650 per month until the lease expires on February 15,

2026 and the Company does not have an option to renew or extend.

The Company is responsible for any damage to the automobile under

the terms of the lease.

December 23, 2021, Empire entered into a lease agreement for the leasing of an automobile.

Under the terms of the lease, Empire was required

to pay $18,000 for the first month and $1,000 per month thereafter for 60 months.

The lease expires on December 23, 2025 and the Company

does not have an option to renew or extend .

The Company is responsible to any damage for the automobile under the terms of the

January 24, 2022, the Company entered into leasing agreements for 3,521 square feet of office space commencing upon the completion of

tenant improvements which was expected to be on April 1, 2022 but shall be no later than May 1, 2022 (“Commencement Date”).

Under the terms of the leases, the Company is required to pay $3,668 for the first twelve months of the lease and increasing by approximately

3% every 12 months thereafter until the expiration of the lease.

The lease is for a period of five years from the Commencement Date and

the Company was required to make a security deposit of $ 3,668 .

The Company does not have an option to extend the lease.

The Company cannot

sublease any of the office space under the lease agreement.

February 1, 2022, the Company entered into an office space/land lease agreement with an entity owned by the Chief Executive Officer of

Greenwave for the leasing of the Company’s Fairmont metal scrap yard located at 406 Sandy Street, Fairmont, NC 28340.

terms of the lease, the Company is required to pay $ 8,000 per month for the facility beginning February 1, 2022 and increasing by 3%

on January 1, 2023.

The lease expires on January 1, 2024 and the Company has two options to extend the lease by 5 years per option.

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.

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.

assets and liabilities consist of the following:

OF ASSETS AND LIABILITIES

Current portion of lease liabilities

Long term lease liabilities, net of current portion

Total lease liabilities

minimum future commitments under non-cancelable operating leases and other obligations at December 31, 2021 were as follows:

OF NON CANCELABLE OPERATING LEASES AND OTHER OBLIGATIONS

Year ended December 31,

2022 (remaining)

Total Minimum Lease Payments

Imputed Interest

$ ( 320,721 )

Present Value of Lease Payments

Current Portion

$ ( 2,142,504 )

Long Term Portion

Company leases its facilities, automobiles, and offices under operating leases which expire on various dates through 2024.

related to these leases is recognized based on the payment amount charged under the lease.

Rent expense for the three months ended March

31, 2022 and 2021 was $ 515,223 and $ 3,510 , respectively.

At March 31, 2022, the leases had a weighted average remaining lease term of

1.75 years and a weighted average discount rate of 9.12 %.

16 – CONCENTRATIONS OF REVENUE

Company has a concentration of customers.

For the three months ended March 31, 2022, one customer accounted for $ 6,150,365 , or approximately

61.99 %, of our revenue.

Company’s sales are concentrated in the Virginia and northeastern North Carolina markets.

17 – RELATED PARTY TRANSACTIONS

of March 31, 2022, the Company leases 12 scrap yard facilities by an entity controlled by the Company’s Chief Executive Officer.

During the three months ended March 31, 2022, the Company paid rents of $ 477,140 to an entity controlled by the Company’s Chief

Executive Officer.

Additionally, during the three months ended March 31, 2022, the Company paid $ 122,866 in accrued rents owed to an

entity controlled by the Company’s Chief Executive Officer at December 31, 2021.

See “Note 15 – Leases.”

the three months ended March 31, 2022, the Company purchased equipment for $ 152,500 from an entity controlled by the spouse of the Chief

Executive Officer.

18 – AMORTIZATION OF INTANGIBLE ASSETS

of the Company’s current identified intangible assets were assumed upon consummation of the Empire acquisition on October 1, 2021.

Identified intangible assets consisted of the following at the dates indicated below:

OF INTANGIBLE ASSETS

March 31, 2022

Gross carrying

Estimated remaining

Intellectual Property

$ ( 303,600 )

Customer List

( 1,063,700 )

Total finite-lived intangibles

( 1,479,250 )

Total intangible assets, net

$ ( 1,479,250 )

expense for intangible assets was $ 739,625 and $ 0 for the three months ended March 31, 2022 and 2021, respectively.

Total estimated amortization

expense for our intangible assets for the years 2021 through 2026 is as follows:

SCHEDULE OF AMORTIZATION EXPENSES FOR

INTANGIBLE ASSETS

Year ended December 31,

19 – INCOME TAX PROVISIONS

tax provision or benefit from income taxes for interim periods is determined using an estimate of our annual effective tax rate, adjusted

for discrete items, if any, that are taken into account in the relevant period.

Each quarter we update our estimate of the annual effective

tax rate, and if our estimated tax rate changes, we make a cumulative adjustment.

quarterly tax provision, and our quarterly estimate of our annual effective tax rate, is computed

on the basis of several factors where applicable.

These include the variability in accurately predicting our pre-tax

and taxable income and loss and the mix of jurisdictions to which they relate, intercompany transactions, the applicability of special

tax regimes, changes in how we do business, acquisitions, investments, developments in tax controversies, changes in our stock price,

changes in our deferred tax assets and liabilities and their underlying valuation, changes in statutes, regulations, case law,

and administrative practices, principles, and interpretations related to tax, including changes to the global tax framework, competition,

and other laws and accounting rules in various jurisdictions, and relative changes of expenses or losses for which tax benefits are not

Our effective tax rate can be more or less volatile based on the amount of pre-tax income or loss.

For example, the impact

of discrete items and non-deductible expenses on our effective tax rate is greater when our pre-tax income is lower.

In addition, we

record valuation allowances against deferred tax assets when there is uncertainty about our ability to generate future income in relevant

jurisdictions.

income tax provision for the three months ended March 31, 2022 was $0.

At December 31, 2021, the Company has available for income tax

purposes approximately $ 82,507,844 in federal and $ 69,144,542 in Colorado state, net operating loss carry forwards which begin

expiring in the year 2033, that can be used to offset future taxable income.

The Company has provided a valuation reserve against

the full amount of the net operating loss benefit given the earnings history of the Company.

As such, it is the opinion of management

that it is more likely than not that the benefits will not be realized.

All or portion of the remaining valuation allowance

may be reduced in future years based on an assessment of earnings sufficient to fully utilize these potential tax benefits.

year ended December 31, 2021, the Company has increased the valuation allowance from $ 18,379,120 to $ 21,515,047 .

20 – SUBSEQUENT EVENTS

Company evaluates events that have occurred after the balance sheet date but before the unaudited condensed consolidated financial statements

April 18, 2022, the Company appointed Howard Jordan as Chief Financial Officer.

April 18, 2022, the Company appointed Cheryl Lanthorn and John Wood to its Board of Directors, along with its audit, compensation, and

nomination and corporate governance committees.

April 19, 2022, the Company appointed J.

Bryan Plumlee to its Board of Directors, along with its audit, compensation, and nomination

and corporate governance committees.

April 26, 2022, The Company issued 2,000 shares of common stock recorded as to be issued at March 31, 2022.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements