What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-05-16 compared with 2021-11-22 · 186 added, 177 removed, 8 unchanged (98% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis

in conjunction with our condensed consolidated financial statements and related notes contained in Part I, Item 1 of this Quarterly Report.

Please also refer to the note about forward-looking information for information on such statements contained in this Quarterly Report

immediately preceding Part I, Item 1.

MassRoots, Inc.

was formed in April 2013 as a

technology company.

The Company recently closed its acquisition of Empire Services, Inc.

(“Empire”), acquiring the entirety

of its issued and outstanding equity.

Our primary focus is expanding the number of metal recycling facilities Empire operates and utilizing

technology to improve its operational efficiency.

COVID-19 Pandemic

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.

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.

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.

For the Three Months Ended September 30, 2021 and 2020

should read the following discussion and analysis in conjunction with our condensed consolidated financial statements and related notes

contained in Part I, Item 1 of this Quarterly Report.

Please also refer to the note about forward-looking information for information

on such statements contained in this Quarterly Report immediately preceding Part I, Item 1.

were formed in April 26, 2013 as a technology platform developer under the name MassRoots, Inc.

In October 2021, we changed our corporate

name from “MassRoots, Inc.” to “Greenwave Technology Solutions, Inc.” We sold all of our social media assets

on October 28, 2021 for cash consideration equal to $10,000 and discontinued all operations related to the Company’s social

media business.

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

(“Empire”), 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.

the acquisition of Empire, we transitioned into the scrap metal industry which involves collecting, classifying and processing appliances,

construction material, end-of-life vehicles, boats, and industrial machinery.

We process these items by crushing, shearing, shredding,

separating, and sorting, into smaller pieces and categorize these recycled ferrous, nonferrous, and mixed metal pieces based on density

and metal prior to sale.

In cases of scrap cars, we remove the catalytic converters, aluminum wheels, and batteries for separate processing

and sale prior to shredding the vehicle.

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

operate an industrial shredder at our Kelford, North Carolina location.

Our shredder is designed to produce a denser product and, in

concert with advanced separation equipment, more refined recycled ferrous metals, which are more valuable as they require less processing

to produce recycled steel products.

In totality, this process reduces large metal objects like auto bodies into baseball-sized pieces

of shredded recycled metal.

shredded pieces are then placed on a conveyor belt under magnetized drums to separate the ferrous metal from the mixed nonferrous metal

and residue, producing consistent and high-quality ferrous scrap metal.

The nonferrous metals and other materials then go through a number

of additional mechanical systems which separate the nonferrous metal from any residue.

The remaining nonferrous metal is further processed

to sort the metal by type, grade, and quality prior to being sold as products, such as zorba (mainly aluminum), zurik (mainly stainless

steel), and shredded insulated wire (mainly copper and aluminum).

of our main corporate priorities is to open a facility with rail or deep-water port access to enable us to efficiently transport our

products to domestic steel mills and overseas foundries.

Because this would greatly expand the number of potential buyers of our processed

scrap products, we believe opening a facility with port or rail access could result in an increase in both the revenue and profitability

of our existing operations.

is headquartered in Suffolk, Virginia and employs 89 people as of May 12, 2022.

are continuing to proactively monitor and assess the COVID-19 global pandemic.

The full impact of the COVID-19 pandemic is inherently

The COVID-19 pandemic has caused us to modify our business practices (including but not limited to curtailing physical contact

with customers).

We continue to monitor developments of the COVID-19 pandemic and we may take further actions as may be required by government

authorities or that we determine are in the best interests of our employees, patients, and business partners.

We have implemented appropriate

safety measures, following guidance from the Center for Disease Control and the Occupational Safety and Health Administration.

of the impact of the COVID-19 pandemic on our future liquidity and operational performance will depend on certain developments.

main product is selling ferrous metal, which is used in the recycling and production of finished steel.

It is categorized into heavy

melting steel, plate and structural, and shredded scrap, with various grades of each of those categorized based on the content, size

and consistency of the metal.

All of these attributes affect the metal’s value.

also process nonferrous metals such as aluminum, copper, stainless steel, nickel, brass, titanium, lead, alloys and mixed metal products.

Additionally, we sell the catalytic converters recovered from end-of-life vehicles to processors which extract the nonferrous precious

metals such as platinum, palladium and rhodium.

provide metal recycling services to a wide range of customers, including large corporations, industrial manufacturers, retail customers,

and government organizations.

and Customers

for our ferrous and nonferrous products are based on prevailing market rates and are subject to market cycles, worldwide steel demand,

government regulations and policy, and supply of products that can be processed into recycled steel.

Our main buyer, Sims Metal Management

(“Sims”), adjusts the prices they pay for scrap metal products based on market rates usually on a monthly or bi-weekly basis.

We are paid for the scrap metal we deliver to Sims on the same business day that we deliver the metal.

on any price changes from Sims or our other buyers, we in turn adjust the price for unprocessed scrap we pay customers in order to manage

the impact on our operating income and cash flows.

spread we realize between the sales prices and the cost of purchasing scrap metal is determined by a number of factors, including transportation

and processing costs.

Historically, we have experienced sustained periods of stable or rising metal selling prices, which allow us to

manage or increase our operating income.

When selling prices decline, we adjust the prices we pay customers to minimize the impact to

our operating income.

of Unprocessed Metal

main sources of unprocessed metal we purchase are end-of-life vehicles, old equipment, appliances and other consumer goods, and scrap

metal from construction or manufacturing operations.

We acquire this unprocessed metal from a wide base of suppliers including large

corporations, industrial manufacturers, retail customers, and government organizations who unload their metal at our facilities or we

pick it up and transport it from the supplier’s location.

Currently, our operations and suppliers are located in the Hampton Roads

and northeastern North Carolina markets.

supply of scrap metal is influenced by overall health of economic activity in the United States, changes in prices for recycled metal,

and, to a lesser extent, seasonal factors such as severe weather conditions, which may prohibit or inhibit scrap metal collection.

the Three Months Ended March 31, 2022 and 2021

For the three months ended

1 unchanged sentence

Loss from Operations

Other Income (Expense)

(58,610,428 )

Net Income (Loss) Available to Common Stockholders

$ (58,799,764 )

For the three months ended September 30, 2021

and 2020, we generated revenues of $54 and $2,316, respectively, a decrease of $2,262 primarily due to the relaunch of product placements

on the Company’s YouTube and social media channels.

Operating Expenses

For the three months ended September 30, 2021

and 2020, our operating expenses were $395,258 and $208,238, respectively, an increase of $187,074.

There was a decrease in advertising

expenses from $43,020 for the three months ended September 30, 2020 to ($4,578) for the same period in 2021, a decrease of $47,598 as

the Company advertised less.

There was an increase in payroll and related expenses of 2,814, as payroll and related expenses increased

to $66,693 for the three months ended September 30, 2021 from $63,879 for same period in 2020.

Other general and administrative expenses

increased by $232,008 from $101,189 for the three months ended September 30, 2020, to $333,197 for the three months ended September 30,

This increase was attributable to higher travel and legal costs for the three months ended September 30, 2021 as compared to the

same period in 2020.

Loss from Operations

During the three months ended September 30, 2021,

we incurred losses of $395,258 from operations, as compared to losses of $205,922 during the same period in 2020, a difference of $189,336,

for the reasons stated above.

Other Income (Expense)

For the three months ended September 30, 2021 and 2020, the Company

recorded interest expense of $699,254 and $ 1,602,204, respectively, primarily related to Company’s convertible notes.

recorded $0 and a $0 loss on the conversion of convertible notes payable for the three months ended September 30, 2021 and 2020, respectively.

For the three months ended September 30, 2021 and 2020, the Company recorded a $0 change and a $85,287 loss, respectively, on the change

in fair value of derivative liabilities.

For the three months ended September 30, 2021 and 2020, the Company recorded gains of $2,641,481

and $66,572,635, respectively, of the change in the fair value of the derivative liability for the authorized shares shortfall.

recorded a $4,332,489 gain on settlement of convertible notes payable and accrued interest, warrants and accounts payable during the three

months ended September 30, 2021, as compared to $0 during the same period in 2020.

There was a $0 gain on the forgiveness of debt for

the three months ended September 30, 2021, as compared to $0 during the same period in 2020.

Net Income (Loss) Available to Common Stockholders

For the three months ended September 30, 2021,

we had income available to common stockholders of $5,879,458 as compared to a net loss of $64,679,222 for the same period in 2020, a difference

of $58,799,764 for the reasons discussed above.

For the Nine Months Ended September 30, 2021 and 2020

For the nine months ended

Operating Expenses

Loss from Operations

Other Income (Expense)

(46,708,918 )

Net Income (Loss) Available to Common Stockholders

Other Expense

(25,753,349 )

Net Loss Available to Common Stockholders

$ (5,175,475 )

$ (47,193,938 )

For the nine months ended September 30, 2021 and

2020, we generated revenues of $1,660 and $2,316, respectively, a decrease of $656 primarily due to the relaunch of product placements

on the Company’s YouTube and social media channels.

Operating Expenses

For the nine months ended September 30, 2021 and

2020, our operating expenses were $1,196,292 and $696,357, respectively, an increase of $502,251.

There was a decrease in advertising

expenses from $43,020 for the nine months ended September 30, 2020 to $18,125 for the same period in 2021, a decrease of $24,895.

was a decrease in payroll and related expenses of $14,167 due to reduction in the number of employees, as payroll and related expenses

decreased to $225,603 for the nine months ended September 30, 2021 from $ 239,770 for same period in 2020.

Other general and administrative

expenses increased by $540,510 from $413,417 for the nine months ended September 30, 2020, to $953,927 for the nine months ended September

This increase was attributable to higher travel and legal costs for the nine months ended September 30, 2021 as compared to

the same period in 2020.

Loss from Operations

During the nine months ended September 30, 2021,

we incurred losses of $1,196,292 from operations, as compared to losses of $694,041 during the same period in 2020, a difference of $502,251,

for the reasons stated above.

Other Income (Expense)

For the nine months ended September 30, 2021 and

2020, the Company recorded interest expense of $1,667,413 and $3,607,210, respectively, primarily related to Company’s convertible

The Company recorded a $880 loss and $882 gain on the conversion of convertible notes payable for the nine months ended September

30, 2021 and 2020, respectively.

For the nine months ended September 30, 2021 and 2020, the Company recorded a $300,885 and a $303,593

gain, respectively, on the change in fair value of derivative liabilities.

For the nine months ended September 30, 2021 and 2020, the

Company recorded losses of $159,633,797 and $43,406,183, respectively, of changes in the fair value of the derivative liability for the

authorized shares shortfall.

The Company recorded a $179,272,324 gain on settlement of convertible notes payable and accrued interest,

warrants and accounts payable during the nine months ended September 30, 2021, as compared to $0 during the same period in 2020.

was a $192,521 gain on the forgiveness of debt for the nine months ended September 30, 2021, as compared to $0 during the same period

Net Income (Loss) Available to Common Stockholders

For the nine months ended September 30, 2021,

we had net losses available to common stockholders of $17,531,575 as compared to a net loss of $142,405,892 for the same period in 2020,

a difference of $124,874,317 for the reasons discussed above.

Liquidity and Capital Resources

Net cash used in operations for the nine months

ended September 30, 2021 and 2020 was $548,640 and $717,062, respectively.

This $168,422 decrease was primarily caused by an increase

in accounts payable and accrued expenses, accrued payroll and related expenses, and deferred revenue.

Net cash used in operations for

the nine months ended September 30, 2020 was primarily based on the loss for the nine months ended September 30, 2020, partially offset

by decreases in accounts payable and accrued payroll.

Net cash provided by financing activities for

the nine months ended September 30, 2021 and 2020 was $548,237 and $716,592 respectively.

During the nine months ended September 30, 2021,

these funds were derived mainly from proceeds related to the issuance of preferred shares and non-convertible notes.

During the nine months

ended September 30, 2020, net cash provided by financing activities was derived from the issuance of convertible notes, offset by repayment

of non-convertible notes.

Capital Resources

As of September 30, 2021, the Company had cash

of $1,082 and 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.

conditions raise substantial doubt about our ability to continue as a going concern for one year from the issuance of the condensed consolidated

financial statements.

Our primary source of operating funds since inception has been cash proceeds from the public and private placements

of our securities, including debt securities, and proceeds from the exercise of warrants and options.

We have experienced net losses and

negative cash flows from operations since inception and expect these conditions to continue for the foreseeable future.

the foreseeable future, our ability to continue our operations is dependent upon our ability to obtain additional capital through public

or private equity offerings, debt financings or other sources;

however, financing may not be available to us on acceptable terms, or at

Our failure to raise capital as and when needed would have a negative impact on our financial condition and our ability to pursue

our business strategy and we 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 our working capital deficiency;

implement a plan to generate revenues.

Our continued existence is dependent upon our ability to translate our audience into revenues.

However, the outcome of our plans cannot be determined with any degree of certainty.

Accordingly, the accompanying

condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United

States of America, which contemplates continuation of the Company as a going concern and 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.

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

from the outcome of this uncertainty such as the final settlement amounts of our notes payable and accrued interest.

Off-Balance Sheet Arrangements

As of September 30, 2021, we did not have any

off-balance sheet arrangements.

Contractual Obligations

Our contractual obligations are included in our

notes to the condensed consolidated financial statements included in Part I, Item I of this Quarterly Report on Form 10-Q.

To the extent

that funds generated from our operations, together with our existing capital resources, are insufficient to meet future requirements,

we will be required to obtain additional funds through equity or debt financings.

No assurance can be given that any additional financing

will be made available to us or will be available on acceptable terms should such a need arise.

Critical Accounting Policies and Estimates

For a discussion of our accounting policies and

related items, please see the notes to the condensed consolidated financial statements, included in Part I, Item 1 of this Quarterly

Report on Form 10-Q.

the three months ended March 31, 2022, we generated $9,921,238 in revenues, as compared to $1,527 during the same period in 2021, an

increase of $9,919,711.

This increase was due to the consummation of our acquisition of Empire, a robust market for recycled metals,

and the repurposing and implementation of Greenwave’s technology into Empire’s existing operations.

cost of revenues increased to $5,656,980 for the three months ended March 31, 2022 from $297 during the same period in 2021, an increase

of $5,656,683, as a result of the Empire acquisition.

gross profit was $4,264,258 during the three months ended March 31, 2022, an increase of $4,263,028 from $1,230 during the same period

in 2021 due to the consummation of the Empire acquisition.

the three months ended March 31, 2022 and 2021, our operating expenses were $4,461,953 and $302,978, respectively, an increase of $4,158,975.

This increase was mainly attributed to the closing of our acquisition of Empire, which significantly expanded our operations, number

of employees, and internal systems.

There was an increase in payroll and related expenses of $1,210,267 as payroll and related expenses

were $1,289,800 for the three months ended March 31, 2022 as compared to $79,533 for the same period in 2021, which was the result of

an increase in our labor force primarily due to the closing of the Empire acquisition.

Advertising expense decreased by $2,323 to $16,230

for the three months ended March 31, 2022 as compared to $18,553 for the same period in 2021 as the Company focused its resources on

its scrap metal operations.

Depreciation and amortization of intangible assets increased by $873,756 to $873,756 for the three months

ended March 31, 2022 from $0 in 2021 as a result of the Company acquiring fixed assets and intangible assets in the Empire acquisition.

There were hauling and equipment maintenance costs of $800,438 during the three months ended March 31, 2022, as compared to $0 in 2021,

an increase of $800,438, due to the Company’s transportation and logistics costs increasing due to the Empire acquisition.

accounting, and legal expenses increased to $365,952 during the three months ended March 31, 2022 from $104,620 during the same period

in 2021, an increase of $261,332.

There was an increase in rent expenses as a result of the Empire acquisition, increasing $871,893 from

$3,510 during the three months ended March 31, 2021 to $875,403 during the same period in 2022.

other general and administrative expenses increased to $240,374 for the three months ended March 31, 2022 from $96,762 for the same period

in 2021, an increase of $143,612, as a result of the Company’s operations expanding from the Empire acquisition.

increase of these expenditures resulted in our total operating expenses increasing to $4,461,953 during the three months ended March

31, 2022 compared to $302,978 during the three months ended March 31, 2021, an increase of $4,158,975.

from Operations

loss from operations decreased by $104,053 to $197,695 during the three months ended March 31, 2022, from $301,478 during the three months

ended March 31, 2021 for the reasons discussed above.

During the three months ended March 31,

2022, we incurred other expenses of $4,977,781, as compared to $(25,753,349) for the three months ended March 31,

2021, an increase of $20,755,568.

There was a gain on settlement of convertible notes payable and accrued interest, warrants and

accounts payable of $163,420 and $3,917,734 for the three months ended March 31, 2022 and 2021, respectively.

We did not incur a gain

or loss on the elimination of the derivative liability for authorized share deficiency during the three months ended March 31, 2022,

whereas we incurred expenses of $(29,453,448) for the derivative liability for authorized share shortfall during the three months ended

March 31, 2021.

There were no gains or losses on the conversion of convertible notes during the three months ended March 31, 2022,

as compared to $880 loss on the conversion of convertible debentures during the three months ended March 31, 2021.

In addition, interest

expense increased to $(19,405,677) during the three months ended March 31, 2022 as compared to $(570,148) during the three months ended

March 31, 2021.

Lastly, there were gains in the fair value of derivative liabilities of $14,264,476 and $353,393 during the three months

ended March 31, 2022 and 2021, respectively.

Loss Available to Common Stockholders

Our net loss available to shareholders decreased

by $42,018,463 to $5,175,475 during the three months ended March 31, 2022, from a $47,193,938 loss during the three

months ended March 31, 2021 for the reasons discussed above.

and Capital Resources

cash generated by operating activities for the three months ended March 31, 2022 was $248,764 as compared to $225,541 used in

operating activities for the three months ended March 31, 2021.

The cash flows generated by operating activities were driven by

a net loss of $5,175,475, amortization

of right of use assets (related-party) of $411,349, amortization of right of use assets of $10,490, depreciation and amortization of

$873,756, payment of accrued rent to a related party of $122,865, increase of prepaid expenses of $90,522, decreases of accounts payable

and accrued expenses of $89,697, a decrease in operating lease liabilities of $4,776, a decrease in operating lease liabilities

(related-party) of $421,526, largely offset by a gain on the settlement of convertible notes and accrued interest of $163,420,

interest and amortization of debt discount of $19,405,677, change in the value of derivative liabilities of $14,264,476, increases in

inventories of $348,073, increase of accrued payroll of $55,530, and a decrease in environmental remediation liabilities of $22,207.

Cash flows used in operations for the three months ended March 31, 2021 were impacted primarily from the net loss of $26,055,097,

partially offset by non-cash items including derivative liability for authorized share deficiency of $29,453,448, gain on settlement

of convertible notes payable and accrued interest, warrants and accounts payable of $3,917,734, interest and amortization of debt discount

of $570,148, change in fair value of derivative liabilities of $353,393, gain on conversion of convertible notes payable of $880, as

well as an increase in accrued payroll and related expenses of $59,362, a decrease in prepaid expenses of $50,000 and a decrease in accounts

payable and accrued expenses of $33,155.

cash used in investing activities was $1,121,793 and $0 for the three months ended March 31, 2022 and 2021, respectively.

For the three

months ended March 31, 2022, there was cash used in the purchase of equipment of $1,121,793, of which $152,500 was paid to a related-party.

cash used in financing activities for the three months ended March 31, 2022 was $100,000, as compared to cash generated by financing

activities of $224,260 during the three months ended March 31, 2021.

During the quarter ended March 31, 2022, the Company utilized $100,000

to settle a non-convertible debt note.

During the three months ended March 31, 2021, there were cash proceeds of $200,000 from the sale

of Series X Preferred Stock, proceeds of $24,647 from the sale of non-convertible notes payable, proceeds of $2,998 from advances, and

repayments of advances of $3,385.

of March 31, 2022, we had cash on hand of $1,790,264.

We currently have no external sources of liquidity such as arrangements with credit

institutions that will have or are reasonably likely to have a current or future effect on our financial condition or immediate access

Capital over the Next Fiscal Year

Company is party to senior secured convertible debt in the principal amount of $37,714,966 which matures on May 30, 2022 with an automatic

extension until November 30, 2022 for a 6% conversion premium.

This senior secured debt is currently convertible into common shares at

$15.00 per share and will automatically convert into shares of common stock should Greenwave’s shares of common stock be listed

on a national exchange.

Greenwave expects this debt will be converted into shares of common stock during fiscal year 2022;

the debt is not converted, the Company may have to raise additional capital to fulfill its obligations under these notes.

contractual obligations are included in our notes to the condensed consolidated financial statements included in Part I, Item I of this

Quarterly Report on Form 10-Q.

To the extent that funds generated from our operations, together with our existing capital resources,

are insufficient to meet future requirements, we will be required to obtain additional funds through equity or debt financings.

can be given that any additional financing will be made available to us or will be available on acceptable terms should such a need arise.

Accounting Policies and Estimates

a discussion of our accounting policies and related items, please see the notes to the condensed consolidated financial statements, included

in Part I, Item 1 of this Quarterly Report on Form 10-Q.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

As a “smaller reporting company” we

are not required to provide the information required by this Item.

a “smaller reporting company” we are not required to provide the information required by this Item.

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 2. Management’s Discussion and Analysis