What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2023-03-31 compared with 2022-04-14 · 163 added, 213 removed, 144 unchanged (72% of the section changed)

8 unchanged sentences

discussed in the section titled “Risk Factors.” You should also carefully read “Special Note Regarding Forward-Looking

We were formed on 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 our 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.

acquisition was deemed effective October 1, 2021 on the effective date of the Certificate of Merger in Virginia.

We were formed on 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 our social media business.

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

(“Empire”), which operates 13 metal recycling facilities and 1 metal processing facility in Virginia, North Carolina,

The acquisition was deemed effective October 1, 2021 on the effective date 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,

6 unchanged sentences

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-sizes pieces

of shredded recycled metal.

operate an automotive shredder at our Kelford, North Carolina location and a second automotive shredder at our Carrollton, Virginia is

expected to come online in the second quarter of 2023.

Our shredders are designed to produce a denser product and, in concert with advanced

separation equipment, more refined recycled ferrous metals, which are more valuable as they require less processing to produce recycled

steel products.

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

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

10 unchanged sentences

of our existing operations.

is headquartered in Suffolk, Virginia and employs 89 people as of April 4, 2022.

is headquartered in Chesapeake, Virginia and has 144 full-time employees as of March 14, 2023.

compete with other metal recycling facility operators, such as Schnitzer Steel Industries, and are focused on utilizing technology to

create operating efficiencies and competitive advantages over our peers.

Developments and Other Sources of Funding

February 16, 2021, we entered into a securities purchase agreement with an accredited investor for the sale of five (5) shares of our

Series X Convertible Preferred Stock, par value $0.0001 per share, resulting in aggregate proceeds of $100,000.

The purchase and issuance

of such shares of Series X Preferred Stock closed on February 18, 2021.

February 22, 2021, we entered into a securities purchase agreement with an accredited investor for the sale of 1.25 shares of our Series

X Convertible Preferred Stock, par value $0.0001 per share, resulting in aggregate proceeds of $25,000.

The purchase and issuance of

such shares of Series X Preferred Stock closed on February 24, 2021.

March 10, 2021, we entered into a securities purchase agreement with an accredited investor for the sale of 3.75 shares of our Series

X Convertible Preferred Stock, par value $0.0001 per share, resulting in aggregate proceeds of $75,000.

The purchase and issuance of

such shares of Series X Preferred Stock closed on March 12, 2021.

November 30, 2021, we entered into securities purchase agreements with accredited investors for the placement of secured convertible

promissory notes in the principal amount of $37,714,966 together with warrants to purchase 2,514,332 shares of common stock.

$2,200,000 and a warrant to purchase 20,000 shares of common stock as commission for the offering.

Our Chief Executive Officer rolled

$4,762,838 of debt into the offering.

Aggregate proceeds from the offering were $27,585,450.

continue 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 further continue to monitor developments of the COVID-19 pandemic and we may take additional actions

as may be required by government authorities or that we determine are in the best interests of our employees, patients, and business

We have implemented appropriate safety measures, following guidance from the Center for Disease Control and the Occupational

Safety and Health Administration.

The extent of the impact of the COVID-19 pandemic on our future liquidity and operational performance

will depend on certain developments.

of Operations For the Year Ended December 31, 2022 Compared to the Year Ended December 31, 2021

3 unchanged sentences

Other Income (Expense)

(13,550,249 )

Net Income (Loss) Applicable to Common Stockholders

$ (111,623,487 )

$ 114,399,514

the year ended December 31, 2021, we generated $8,098,036 in revenues, as compared to $6,964 for the year ended December 31, 2020, an

increase of $8,091,072.

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

the repurposing and implementation of Greenwave’s technology into Empire’s

existing operations, and the opening of Empire’s

Virginia Beach scrap yard.

the year ended December 31, 2022, we generated $33,978,425 in revenues, as compared to $8,098,036 for the year ended December 31, 2021,

an increase of $25,880,389.

This increase was due to the consummation of our acquisition of Empire on October 1, 2021, a robust market

for recycled metals, the repurposing and implementation of Greenwave’s technology into Empire’s existing operations, and

the opening of additional metal recycling facilities.

Cost of revenues

cost of revenues increased to $21,537,572 for the year ended December 31, 2022 from $5,238,482 during the same period in 2021, an increase

of $16,299,090, as a result of the Empire acquisition.

gross profit was $2,859,554 during the year ended December 31, 2021, an increase of $2,853,873 from the same period in 2020 due to the

consummation of the Empire acquisition.

the years ended December 31, 2021 and 2020, our operating expenses were $5,787,118 and $1,165,892, respectively, an increase

of $4,621,226.

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 $1,237,923 as

payroll and related expenses were $1,541,773 for 2021 as compared to $303,850 for the same period in 2020, which was the result of

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

Advertising expense decreased by $25,366 to

$33,595 for 2021 as compared to $58,961 for 2020 as the Company focused its resources on its scrap metal operations.

Depreciation and

amortization of intangible assets increased by $888,781 to $888,781 for 2021 from $0 in 2020 as a result of the

Company acquiring fixed assets and intangible assets in the Empire acquisition.

There were hauling and equipment maintenance

costs of $513,928 in 2021, as compared to $0 in 2020, an increase of $513,928, due to the Company’s transportation and

logistics costs increasing due to the Empire acquisition.

Consulting, accounting, and legal expenses decreased to $395,901 during

the year ended December 31, 2021 from $684,422 during the same period in 2020 a decrease of $288,521.

There was an increase in rent

expenses as a result of the Empire acquisition, increasing $594,678 from $10,802 during the year ended December 31, 2020 to $605,480

during the same period in 2021.

other general and administrative expenses increased to $1,789,698 for the year ended December 31, 2021 from $107,857 for the year ended

December 31, 2020, an increase of $1,681,841, 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 $5,787,118 during the year ended December

31, 2021 compared to $1,165,892 during the year ended December 31, 2020, an increase of $4,621,226.

from Operations

loss from operations increased $1,767,353 to $2,927,564 during the year ended December 31, 2021, from $1,160,211 during

the year ended December 31, 2020.

the year ended December 31, 2021, we incurred other income of $1,295,143, as compared to $(13,550,249) for the year ended December 31,

Gross pro fit

gross profit was $12,440,853 during the year ended December 31, 2022 from $2,859,554 during the same period in 2021, an increase of $9,581,299,

due to the consummation of the Empire acquisition.

Our gross margins increased to 37% during the year ended December 31, 2022 from 35%

during the same period in 2021 due to the Company diversifying its customer base to get better prices on its products.

For the years ended December 31, 2022 and 2021, our

operating expenses were $23,323,775 and $5,787,118, respectively, an increase of $17,536,657.

This increase was mainly attributed to

the effectiveness of our acquisition of Empire on October 1, 2021, which significantly expanded our operations, number of employees, and

internal systems.

There was an increase in payroll and related expenses of $5,449,322 as payroll and related expenses were $6,991,095

for 2022 as compared to $1,541,773 for the same period in 2021, which was the result of an increase in our labor force primarily due to

the closing of the Empire acquisition.

Advertising expense increased by $50,398 to $83,993 for 2022 as compared to $33,595 for 2021 as

the Company focused its resources on its scrap metal operations.

Depreciation and amortization of intangible assets increased by $3,172,623

to $4,061,404 for 2022 from $888,781 in 2021 as a result of the Company acquiring fixed assets and intangible assets in the Empire acquisition.

There were hauling and equipment maintenance costs of $3,378,452 in 2022, as compared to $513,928 in 2021, an increase of $2,864,524,

due to the Company’s transportation and logistics costs increasing due to the Empire acquisition.

Consulting, accounting, and legal

expenses increased to $897,891 during the year ended December 31, 2022 from $395,901 during the same period in 2021, an increase of $502,080

due to the fees associated with the Company’s listing on Nasdaq.

There was an increase in rent expenses as a result of the Empire

acquisition, increasing $2,859,036 from $605,480 during the year ended December 31, 2021 to $3,464,516 during the same period in 2022.

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

2021, an increase of $2,499,753.

This increase is primarily due to a gain of the forgiveness of debt of $739,710 and $250,000 for the

years ended December 31, 2021 and 2020, respectively.

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

warrants and accounts payable of $182,160,381 and $162,109,131 for the years ended December 31, 2021 and 2020, respectively.

Our derivative

liability for authorized share deficiency increased to $(171,343,164) in fiscal year 2021 from ($170,319,590) during fiscal year 2020.

We realized a $880 loss on the conversion of convertible debentures during fiscal year 2021 as compared to a $882 gain in fiscal year

In addition, interest expense increased to $(10,561,789) during fiscal year 2021 as compared to $(5,139,321) during fiscal year

Lastly, the there was a gain in the fair value of derivative liabilities of $300,885 during fiscal year 2021, as compared to a

loss of $(451,351) during the prior year.

net income available to shareholders increased by $114,399,514 to $2,776,027 during the year ended December 31, 2021, from

a $111,623,487 loss during the year ended December 31, 2020.

and Capital Resources

Net cash used in operating activities for

the year ended December 31, 2021 and 2020 was $2,487,213 and $1,037,843, respectively.

The increase in cash flows used in

operations in 2021 was driven by a loss on derivative liabilities for the authorized share shortfall of $171,343,164, amortization

of right of use assets (related-party) of $373,640, amortization of right of use assets of $22,436, impairments of equipment of

$388,877, depreciation and amortization of $888,781, loss on conversions of convertible notes payable of $880, expenses of $158,371

paid by a non-convertible noteholder of the Company, decrease of prepaid expenses of $97,132, increases of accounts payable and

accrued expenses of $609,683, an increase in contract liability of $25,000, a decrease in operating lease liabilities of $30,544, a

decrease in operating lease liabilities (related-party) of $382,815, largely offset by a gain on the settlement of convertible

notes and accrued interest of $182,160,381, a gain on forgiveness of debt of $739,710, share-based compensation of $166,855,

interest and amortization of debt discount of $10,198,924, change in the value of derivative liabilities of $300,855, increases in

inventories of $381,002, increase of security deposits of $2,437, decreases of accrued payroll of $137,415, decrease in

environmental remediation liabilities of $48,810, and a net loss of $1,632,421.

Cash flows used in operations in 2020 was

impacted primarily from the net loss of $14,710,460, partially offset by non-cash items including derivative liability for

authorized share deficiency of $170,319,590, gain on settlement of convertible notes payable and accrued interest, warrants and

accounts payable of $162,109,131, interest and amortization of debt discount of $5,139,321, change in fair value of derivative

liabilities of $451,351, gain on forgiveness of debt of $250,000 and gain on conversion of convertible notes payable of $882, as

well as an increase in accrued payroll and related expenses of $140,005 and an increase in accounts payable and accrued expenses of

cash used by investing activities was $77,666 and $0 for the years ended December 31, 2021 and 2020, respectively.

For the year ended

December 31, 2021, there was cash used in the purchase of equipment of $218,693 and cash acquired in the acquisition of the business

Net cash provided by financing activities for the

year ended December 31, 2021 and 2020 was $5,521,687 and $1,038,208, respectively.

During the year ended December 31, 2021, there

were cash proceeds of $200,000 from the sale of Series X Preferred Stock, proceeds of $27,585,450 from the sale of convertible notes

payable, proceeds of $1,465,053 from the sale of non-convertible notes payable, proceeds of $70,452 from advances, proceeds of $122,865

from related-parties, offset by repayments of $2,503,300 of convertible notes payable, repayments of $5,629,455 to non-convertible

notes payable, repayments of advances of $4,165,973, payments of $26,000 to settle warrants and stock, redemptions of Series X Preferred

Shares of $501,463, and redemptions of Series Y Preferred Shares of $11,095,942.

Comparatively, for the year ended December 31, 2020, these funds came mainly from the sale of Series X Preferred Stock amounting

to $321,000, proceeds from issuance of convertible debt of $637,000, proceeds from issuance of non-convertible notes payable of $82,911,

proceeds from the issuance of a $50,000 PPP loan, offset by repayment of advances in the amount of $3,009, repayment of non-convertible

notes in the amount of $39,641, and the repayment of $13,749 in bank overdrafts.

Our other general and administrative expenses increased

to $1,946,580 for the year ended December 31, 2022 from $1,789,698 for the year ended December 31, 2021, an increase of $156,882, as a

result of the Company’s operations expanding from the Empire acquisition.

The increase of these expenditures resulted in our

total operating expenses increasing to $23,323,775 during the year ended December 31, 2022 compared to $5,787,118 during the year ended

December 31, 2021, an increase of $17,536,657.

Loss from Operations

Our loss from operations increased $7,955,358 to $10,882,922

during the year ended December 31, 2022, from $2,927,564 during the year ended December 31, 2021.

Income (Expense)

the year ended December 31, 2022, we incurred other expenses of $24,160,368, as compared to other income of $1,295,143 for the year

ended December 31, 2021, a decrease of $25,455,511.

This decrease is partially due to a gain of the forgiveness of debt of $0 and

$739,710 for the years ended December 31, 2022 and 2021, respectively.

There was a gain on settlement of convertible notes payable

and accrued interest, warrants and accounts payable of $516,920 and $182,160,381 for the years ended December 31, 2022 and 2021,

respectively.

Our change in fair value of derivative liability for authorized share deficiency decreased to $0 in fiscal year 2022

from $(171,343,164) during fiscal year 2021.

We realized a $2,625,378 gain on the conversion of convertible debentures during fiscal

year 2022 as compared to a $(880) loss in fiscal year 2021.

In addition, interest expense increased to $(34,079,230) during fiscal

year 2022 as compared to $(10,561,789) during fiscal year 2021.

There was also a warrant expense for a liquidated damages settlement

of $7,408,681 during the year ended December 31, 2022 as compared to $0 during the same period in 2021.

Lastly, the there was a gain

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

(Loss) Income available to common stockholders

Our net (loss) income available to shareholders decreased

by $66,635,355 to $(63,859,328) during the year ended December 31, 2022, from $2,776,027 in net income during the year ended December

Liquidity and Capital Resources

Net cash used in operating activities for the years

ended December 31, 2022 and 2021 was $2,609,173 and $2,487,213, respectively.

Cash flows used in operations in 2022 were impacted

by depreciation of $875,809, amortization of intangible assets of $2,958,500, impairments on property and equipment of $227,186, amortization

of right of use assets of $64,095, amortization of right of use assets (related-party) of $2,137,750, impairments on goodwill of $2,499,753,

a gain in the fair value of derivative liabilities of $14,264,476, interest and amortization of debt discount of $32,340,565, a gain on

the conversion of notes payable of $2,625,378, a gain on the settlement of notes payable and factoring advances of $516,920, a warrant

expense for liquidated damages settlement of $7,408,681, an increase in rent due to a related party of $194,916, an increase in accounts

receivable of $215,256, a decrease in inventories of $191,356, a decrease in prepaid expenses of $12,838, an increase in security deposits

of $3,306, an increase in accounts payable of $1,703,299, an decrease in payroll wages payable of $1,738,665, a decrease in lease liability

of $65,030, a decrease in lease liability (related-party) of $1,843,614, and a decrease in environmental remediation liabilities of $22,207.

Cash flows used in operations in 2021 were impacted by a loss on derivative liabilities for the authorized share shortfall of $171,343,164,

amortization of right of use assets (related-party) of $373,640, amortization of right of use assets of $22,436, impairments of equipment

of $388,877, depreciation and amortization of $888,781, loss on conversions of convertible notes payable of $880, expenses of $158,371

paid by a non-convertible noteholder of the Company, decrease of prepaid expenses of $97,132, increases of accounts payable and accrued

expenses of $609,683, an increase in contract liability of $25,000, a decrease in operating lease liabilities of $30,544, a decrease in

operating lease liabilities (related-party) of $382,815, largely offset by a gain on the settlement of convertible notes and accrued interest

of $182,160,381, a gain on forgiveness of debt of $739,710, share-based compensation of $166,855, interest and amortization of debt discount

of $10,198,924, change in the value of derivative liabilities of $300,855, increases in inventories of $381,002, increase of security

deposits of $2,437, decreases of accrued payroll of $137,415, decrease in environmental remediation liabilities of $48,810, and a net

loss of $1,632,421.

Net cash used by investing activities was $5,936,027

and $77,666 for the years ended December 31, 2022 and 2021, respectively.

For the year ended December 31, 2022, there was cash used in

the purchase of equipment of $5,936,027.

For the year ended December

31, 2021, there was cash used in the purchase of equipment of $218,693 and cash acquired in the acquisition of the business of $141,027.

cash provided by financing activities for the year ended December 31, 2022 and 2021 was $6,408,711 and $5,521,687, respectively.

the year ended December 31, 2022, there were proceeds from non-convertible notes of $2,725,000 and proceeds of $6,518,310 from factoring

advances, offset by repayments of $220,000 towards non-convertible notes, repayments of $221,500 towards notes, repayments of advances of $12,000 and $2,381,310 towards factoring advances.

During the year ended

December 31, 2021, there were cash proceeds of $200,000 from the sale of Series X Preferred Stock, proceeds of $27,585,450 from the sale

of convertible notes payable, proceeds of $1,465,053 from the sale of non-convertible notes payable, proceeds of $70,452 from advances,

proceeds of $122,865 from related-parties, offset by repayments of $2,503,300 of convertible notes payable, repayments of $5,629,455

to non-convertible notes payable, repayments of advances of $4,165,973, payments of $26,000 to settle warrants and stock, redemptions

of Series X Preferred Shares of $501,463, and redemptions of Series Y Preferred Shares of $11,095,942.

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

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

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

access to capital.

the year ended December 31, 2021, the Company received proceeds of $27,585,450, $1,465,053, $70,452, $122,865, and $200,000 from the

issuance of convertible notes, non-convertible notes, advances, advances from related parties, and Series X preferred shares, respectively.

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

the year ended December 31, 2022, the Company received proceeds of $6,518,310 and $2,725,000 from the issuance of factoring advances

and non-convertible notes, respectively.

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 an additional 6% original issuance discount.

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

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

may need additional capital in the future to continue to execute our business plan.

Therefore, we may be dependent upon additional capital

in the form of either debt or equity to continue our operations.

At the present time, we do not have arrangements to raise additional

capital, and we may need to identify potential investors and negotiate appropriate arrangements with them.

We may not be able to arrange

enough investment within the time the investment is required or that if it is arranged, that it will be on favorable terms.

obtain the needed capital, we may not be able to become profitable and may have to curtail or cease our operations.

Additional equity

financing, if available, may be dilutive to the holders of our capital stock.

Debt financing may involve significant cash payment obligations,

covenants and financial ratios that may restrict our ability to operate and grow our business.

Sheet Arrangements

1 unchanged sentence

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 No.

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

13 unchanged sentences

December 15, 2020.

The Company is currently evaluating the impact of ASU 2020-06 on its consolidated financial statements.

August 2018, the FASB issued Accounting Standards Update (“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.

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

Accounting for Contract Assets and Contract Liabilities from

Contracts with Customers, which requires that an acquirer recognize and measure contract assets and contract liabilities acquired in

a business combination in accordance with Topic 606, as if it had originated the contracts.

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, which requires that an acquirer recognize and measure contract assets and contract liabilities acquired

in a business combination in accordance with Topic 606, as if it had originated the contracts.

Prior to this ASU, an acquirer generally

4 unchanged sentences

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.

The Company is currently evaluating

the adoption of ASU 2020-06 on its consolidated financial statements and related disclosures.

are other various updates recently issued, most of which represented technical corrections to the accounting literature or application

1 unchanged sentence

or cash flows.

Critical Accounting Policies

Accounting Policies

Discussion and Analysis of Financial Condition and Results of Operations discuss our financial statements, which have been prepared in

4 unchanged sentences

On an on-going basis, management evaluates its estimates and judgments,

including those related to revenue recognition, allowance for doubtful accounts and property and equipment valuation.

Management bases

its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances,

the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent

from other sources.

including 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.

Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable

under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities

that are not readily apparent from other sources.

Actual results may differ from these estimates under different assumptions and conditions.

35 unchanged sentences

Our annual measurement date for testing goodwill impairment is December 31.

of the goodwill is deductible for income tax purposes.

Intangible assets with finite useful lives consist of tradenames, licenses and

customer relationships and are amortized on a straight-line basis over their estimated useful lives, which range from three to ten years.

The estimated useful lives associated with finite-lived intangible assets are consistent with the estimated lives of the associated products

and may be modified when circumstances warrant.

Such assets are reviewed for impairment when events or circumstances indicate that the

carrying value of an asset may not be recoverable.

An impairment loss would be recognized when estimated undiscounted future cash flows

expected to result from the use of an asset and its eventual disposition are less than its carrying amount.

The amount of any impairment

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

During the fiscal year ended December

31, 2021, the Company recorded $0 in impairment expense related to intangibles and $739,625 in amortization of intangible assets.

Conversion Feature:

The Company accounts for convertible notes payable in accordance with the guidelines established by the Financial

Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 470-20, Debt with

Conversion and Other Options, Emerging Issues Task Force (“EITF”) 98-5, Accounting for Convertible Securities with Beneficial

Conversion Features or Contingently Adjustable Conversion Ratios, and EITF 00-27, Application of Issue No 98-5 To Certain Convertible

The Beneficial Conversion Feature (“BCF”) of a convertible note is normally characterized as the convertible

portion or feature of certain notes payable that provide a rate of conversion that is below market value or in-the-money when issued.

The Company records a BCF related to the issuance of a convertible note when issued and also records the estimated fair value of any

warrants issued with those convertible notes.

Beneficial conversion features that are contingent upon the occurrence of a future event

are recorded when the contingency is resolved.

BCF of a convertible note is measured by allocating a portion of the note’s proceeds to the warrants, if applicable, and as a reduction

of the carrying amount of the convertible note equal to the intrinsic value of the conversion feature, both of which are credited to

additional paid-in-capital.

The value of the proceeds received from a convertible note is then allocated between the conversion features

and warrants on an allocated fair value basis.

The allocated fair value is recorded in the financial statements as a debt discount (premium)

from the face amount of the note and such discount is amortized over the expected term of the convertible note (or to the conversion

date of the note, if sooner) and is charged to interest expense using interest method.

None of the goodwill is deductible for income tax

During the fiscal years ended December 31, 2022 and 2021, the Company recorded $2,499,753 and $0 in impairment expense related

to goodwill, respectively.

As of December 31, 2022 and 2021, the carrying value of goodwill was $0 and $2,499,753, respectively.

assets with finite useful lives consist of tradenames, licenses and customer relationships and are amortized on a straight-line

basis over their estimated useful lives, which range from three to ten years.

The estimated useful lives associated with

finite-lived intangible assets are consistent with the estimated lives of the associated products and may be modified when

circumstances warrant.

Such assets are reviewed for impairment when events or circumstances indicate that the carrying value of an

asset may not be recoverable.

An impairment loss would be recognized when estimated undiscounted future cash flows expected to

result from the use of an asset and its eventual disposition are less than its carrying amount.

The amount of any impairment is

measured as the difference between the carrying amount and the fair value of the impaired asset.

During the fiscal years ended

December 31, 2022 and 2021, the Company recorded $2,499,753 and $0 in impairment expense related to intangibles and goodwill and

$2,958,500 and $739,625 in amortization of intangible assets, respectively.

The Company accounts for its income taxes in accordance with Income Taxes Topic of the FASB ASC 740, which requires recognition

31 unchanged sentences

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-K

Item 7. Management’s Discussion and Analysis