What changed in this filing

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Item 9A. Controls and Procedures

2023-03-31 compared with 2022-03-31 · 727 added, 552 removed, 1013 unchanged (56% of the section changed)

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Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosu re.

Based on the evaluation of our disclosure controls and procedures, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of December 31, 2021 due to the material weaknesses in our internal control over financial reporting described below.

Based on the evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of December 31, 2022 due to the existence material weaknesses in our internal control over financial reporting described below.

In light of this fact, our management has performed additional analyses, reconciliations, and other post-closing procedures and has concluded that, notwithstanding the material weaknesses in our inte rnal control over financial reporting, the consolidated financial statements for the periods covered by and included in this Annual Report on Form 10-K fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented in conformity with U.S.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining an adequate system of internal control over financial reporting, as such term is defined in Exchange Act Rules 13(a)-15(f).

Our management is responsible for establishing and maintaining an adequate system of internal control over financial reporting, as such term is defined in Exchange Act Rules 13(a)-15(f) and 15d-15(f) under the Exchange Act .

Our system of internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the U.S.

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Based on this evaluation, our management concluded our system of internal control over financial reporting was not effective as of December 31, 2022 due to the material weaknesses in our internal control over financial reporting described below.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements would not be prevented or detected on a timely basis.

This Form 10-K does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting.

Management’s report was not subject to attestation by our registered public accounting firm pursuant to the rules of the SEC to permit us to provide only management’s report in this Form 10-K.

Changes in Internal Control over Financial Reporting

Except for the changes in connection with the ongoing remediation of the previously identified material weaknesses discussed below, there has been no change in our internal control over financial reporting during the year ended December 31, 2021, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Material Weakness

Notwithstanding the identified material weaknesses, management, including our Principal Executive Officer and Principal Financial Officer, believes the consolidated financial statements included in this Annual Report on Form 10-K fairly represent in all material respects our financial condition, results of operations, and cash flows at and for the periods presented in accordance with U.S.

Material Weakness in Internal Control Over Financial Reporting

In connection with the preparation of our consolidated financial statements for the years ended December 31, 2021, 2020 and 2019, we identified control deficiencies in the design and operation of our internal control over financial reporting that constituted material weaknesses, which we started remediating but have not completed the remediation as of December 31, 2022 .

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our financial statements will not be prevented or detected on a timely basis.

The material weaknesses identified in our internal control over financial reporting related to (i) segregation of duties related to roles and responsibilities;

and (ii) documentation of financial closing policies and procedur es, including consistently establishing approval thresholds, adhering to appropriate document retention and record-keeping practices, and documenting the review of agreements and accounting estimates.

Remediation Plan

As of December 31, 2022, we have taken a number of actions to remediate these material weaknesses, including:

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• hiring additional finance and accounting personnel, including hiring an SEC compliance and technical accountant, to augment accounting staff and to provide further segregation of duties and more resources for complex accounting matters and financial reporting.

We are still in the process of implementing these controls.

We intend to continue to take steps to remediate the material weaknesses through formalizing documentation of policies and procedures and further evolving our accounting processes.

While we believe that these efforts will improve our internal control over financial reporting, the design and implementation of our remediation is ongoing and will require validation and testing of the design and operating effectiveness of our internal controls over a sustained period of financial reporting cycles.

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We will not be able to conclude whether the steps we are taking will fully remediate the material weaknesses in our internal control over financial reporting until we have completed our remediation efforts and subsequent evaluation of their effectiveness.

We intend to continue to take steps to remediate the material weaknesses through formalizing documentation of policies and procedures and further evolving our accounting processes.

Changes in Internal Control over Financial Reporting

Except for the changes in connection with the ongoing remediation of the previously identified material weaknesses discussed above, there has been no change in our internal control over financial reporting during the year ended December 31, 2022, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitation on the Effectiveness Over Financial Reporting

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The information required by this item is incorporated by reference to our definitive Proxy Statement for the 2023 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days of December 31, 2022.

Executive Officers and Directors

The following table sets forth the name, age and position of each of the Company’s executive officers and directors.

Name Age Position

Gregory Poilasne 51 Chief Executive Officer and Director

Ted Smith 56 President, Chief Operating Officer and Director

Robson 56 Chief Financial Officer

Angela Strand 54 Director

Kenji Yodose 40 Director

David Sherman 75 Director

Montgomery 74 Director

Rashida La Lande 49 Chairperson of the Board and Director

Executive Officers

The following individuals serve as executive officers of the Company.

Gregory Poilasn e serves as our Chief Executive Officer and member of the Board since the closing of the Business Combination.

He is a co-founder of Nuvve and previously served as its Chairman.

Poilasne is directly responsible for managing and overseeing all different activities related to the successful development, deployment and commercialization of Nuvve’s technologies, as well as developing and supporting the overall strategy.

Since February 2019, he also has served as a board member of Dreev, a business venture between EDFRenewables, Inc.

(“EDF”) and Nuvve.

Poilasne has more than 20 years of experience in the start-up and technology space.

He was Chief Executive Officer of DockOn AG, a Radio-Frequency technology company from February 2011 to January 2016.

He was also Vice-President of Business Development of Rayspan, another Radio-Frequency technology company, from 2007 to 2010.

Poilasne was Director of Engineering at Kyocera Wireless, a handset company from 2003 to 2006 and was a founding engineer and director of engineering at Ethertronics, a wireless antenna company, from 2000 to 2003.

Poilasne holds an MBA from the Wharton School of Business, University of Pennsylvania, a Ph.D.

in Electrical Engineering from the University of Rennes 1, France and a Diplome d’ingenieur from the Ecole Superieur d’Electronique de l’Ouest (“ESEO”), France.

We believe Mr.

Poilasne is well-qualified to serve as a director due to his extensive experience with Nuvve, his business leadership, his strategic perspective and his contacts in and knowledge of the energy industry and EV industry.

Ted Smith has served as our President and Chief Operating Officer and a member of the Board since the consummation of the Business Combination.

Smith was a founding investor in Nuvve and has served as a member of its board of directors since 2010 and as its Chief Operating Officer since April 2018.

Smith is directly responsible for managing the successful development, deployment and commercialization of Nuvve’s technologies, as well as supporting global regulatory compliance efforts.

He previously served as Nuvve’s Chief Administrative Officer from March 2017 until becoming Chief Operating Officer.

He also previously served as a board member of Dreev, a business venture between EDF and Nuvve, in 2019 and also serves as a board member of Levo Mobility, and as a Board Observer of Switch.

Smith has more than 20 years of experience in the finance industry and previously served in various roles at Wall Street Associates, a San Diego-based investment advisory firm, including Principal, Chief Operating Officer from 2007 to January 2017, Chief Compliance Officer from 2003 to January 2017, and Quantitative Analyst from 1999 to 2003.

From 1996 to 1999, Mr.

Smith also served as Quantitative Analyst at Nicholas-Applegate Capital Management, a San Diego-based investment advisory firm.

Smith also served as an officer in the United States Navy from 1989 to 1996.

Smith holds an MBA from the University of San Diego and a Bachelor of Science in Marine Engineering/Technology from Maine Maritime Academy.

He is also a Chartered Financial Analyst charterholder, held the Chartered Investment Counselor certification , and is NACD Directorship Certified®.

We believe Mr.

Smith is well-qualified to serve as a member of the Board due to his extensive experience with Nuvve, his business leadership, his operational and compliance experience and his contacts in and knowledge of the energy industry.

Robson has served as our Chief Financial Officer since the consummation of the Business Combination.

Robson has over twenty-five years of finance, accounting and operational experience and has held senior positions with both public and private companies in a variety of industries.

Robson has served on the board of directors of Payference, a

software business, since February 2020.

Robson recently served as the Chief Financial Officer and Chief Compliance Officer of Farmer Brothers Co., a national distributor of coffee, tea and culinary products from February 2017 to November 2019.

His responsibilities included overseeing finance, information technology, mergers and acquisitions and investor relations.

Robson served as the Chief Financial Officer of PIRCH, a curator and retailer of kitchen, bath and outdoor home brands, from September 2014 to September 2016.

He oversaw all aspects of accounting, financial planning and analysis, treasury, merchandise planning and legal, with responsibility for developing strategies, processes and operating priorities to upscale a high growth retailer while building strong finance and merchandising teams.

From January 2012 to September 2014, Mr.

Robson was the Chief Financial Officer of U.S.

AutoParts, an online provider of auto parts and accessories.

Prior to that, he served as the Executive Vice President and Chief Financial Officer of Mervyns LLC, a former discount department store chain, from 2007 to 2011.

From 2001 to 2007, he served as the Senior Vice President of Finance and Principal Accounting Officer for Guitar Center, Inc.

Robson began his career with the accounting firm Deloitte & Touche LLP.

Robson graduated with a Bachelor of Science degree in Accounting from the University of Southern California and is a certified public accountant (inactive) in the State of California.

Rashida La Lande has served as a member of the Board since January 2022, and serves as the Chairperson of the Board effective after the 2022 Annual Meeting.

La Lande currently serves as Executive Vice President, Global General Counsel and Chief Sustainability and Government Affairs Officer for The Kraft Heinz Company (Nasdaq:

In addition to her general counsel duties, she leads all corporate environmental social responsibility and government affairs functions.

Prior to joining Kraft Heinz, La Lande was a partner at the law firm of Gibson, Dunn & Crutcher, where she focused on mergers and acquisitions, leveraged buyouts, private equity deals, and joint ventures.

Throughout her career, La Lande has advised companies and private equity sponsors in various industries including consumer products, retail, financial services, and technology.

The Company believes Ms.

La Lande is well-qualified to serve as a member of the Board due to her extensive legal and corporate governance experience.

Montgomery has served as a member of the Board since the consummation of the Business Combination.

Montgomery is a managing director at Meredith Financial Group Inc., a financial management and advisory firm located in New York City.

From 2010 to 2013, he was managing partner at project finance advisory firm AGlobal Partners LLC where he assisted in arranging long-term, limited-recourse financing for private investments in renewable energy, telecommunications, mining & metals, PPPs, and other infrastructure projects in emerging and other international markets.

He also advised clients on foreign direct investments, including those utilizing development finance institutions, export credit agencies, and political risk insurers.

In addition, Mr.

Montgomery has more than 25 years of marketing consulting and market research experience, informing and guiding clients’ branding, communications, segmentation and innovation challenges across a range of industries, particularly in the information technology, telecommunications, financial services, CPG, pharmaceutical, and retail sectors.

He is experienced in applying model-based quantitative analysis — particularly choice-based modeling — to solving competitive problems.

Previously, from 1996 to 2010, Mr.

Montgomery co-founded Hudson Group Inc.

in New York, a research-based marketing consultancy.

He also held prior positions as executive vice president at Marketing Strategy & Planning Inc./Synovate, and vice president at Hase Schannen Research Associates Inc.

Montgomery holds an M.B.A from Northeastern University and a B.A.

from the University of California, Berkeley.

From 2000-2022 he was Adjunct Faculty in Marketing at the University of Georgia.

We believe Mr.

Montgomery is well-qualified to serve as a member of the Board due to his investment banking, structuring and strategic expertise, his contacts in emerging and other international markets and his extensive experience in marketing and market research.

David Sherman MBA, DBA, CPA has served as an Independent Director of Nuvve since March 2021.

Professor Sherman has been a professor at Northeastern University since 1985, specializing in, among other areas, financial and management accounting, global financial statement analysis and contemporary accounting issues.

Professor Sherman is Trustee and Chair of the Audit Committee for the American Academy of Dramatic Arts, the oldest English language acting school in the world, since January 2014.

Professor Sherman served on the board and as audit committee chair for Dunxin Financial Holdings Ltd.

DXF) from January 2018 to August 2019, Kingold Jewelry Inc.

KGJI) from February 2011 to May 2016, China HGS Real Estate Inc.

HGSH) from January 2010 to August 2012, Agfeed Corporation from January 2012 to November 2014, and China Growth Alliance, Ltd., a business acquisition company formed to acquire an operating business in China, from 2007 through 2008.

He currently serves on the board of two SPACs, Lakeshore Acquisition II Corp (LBBBU).

and Prime Number Acquisition I Corp (PNACU), and is on the board of Xiao-I Corp (AIXI), and Universe Pharmaceutical Inc.(UPC).

Professor Sherman was previously on the faculty of the Sloan School of Management at Massachusetts Institute of Technology (“MIT”) and also, among other academic appointments, held an adjunct professorship at Tufts Medical School and was a visiting professor at Harvard Business School (2015).

From 2004 to 2005, Professor Sherman was an Academic Fellow at the U.S.

Securities and Exchange Commission in the Division of Corporate Finance’s Office of Chief Accountant.

Professor Sherman received his A.B.

in Economics from Brandeis University and both an MBA and doctoral degrees from Harvard Business School.

He is a Certified Public Accountant and previously practiced with Coopers & Lybrand.

Professor Sherman’s research has been published in management and academic journals including Harvard Business Review, Sloan Management Review, Accounting Review and European Journal of Operations Research.

We believe Mr.

well qualified to serve as a member of the Board due to his extensive expertise in global financial statement analysis and contemporary accounting issues and his public company experience.

Angela Strand has served as a member of Board since the consummation of the Business Combination.

Strand is the founder and Managing Director of Strand Strategy, a consulting firm specializing in disruptive technology commercialization.

She is presently a director and member of the compensation committee, and previously served as interim CEO, chairwoman, chair of the compensation committee and member of the nominating and governance committee for Lordstown Motors (Nasdaq:

Previously, from 2016 to 2020, she served as Vice Chairman of Integrity Applications (Nasdaq:GCTK), including chairman of the nominating and corporate governance and compensation committees, and as a member of the audit committee.

From April 2017 to December 2018, Ms.

Strand served as Vice President of Workhorse Group Inc;

from July 2015 to December 2016, she was a co-founder and senior executive of Chanje, a joint venture between Smith Electric Vehicles and FDG Electric Vehicles Ltd.

and from 2011 to 2015, she served as the Chief Marketing Officer and Head of Business Development and Government Affairs for Smith Electric Vehicles.

In 2018, she was a founder of In-Charge, an electric vehicle infrastructure solutions provider.

Strand has also served in various management and executive roles at medical device, biotech and digital health firms.

Strand is a named inventor with seven issued patents.

Strand holds a B.Sc.

in Communications and an MBA in Marketing from the University of Tennessee.

We believe Ms.

Strand is well-qualified to serve as a member of the Board due to her business leadership, her contacts in and knowledge of the EV industry and her public company experience.

Kenji Yodose has been a member of Board since the consummation of the Business Combination.

Yodose has been designated for appointment as a director by Toyota Tsusho Corporation (“TTC”), a significant shareholder of Nuvve prior to the Business Combination and of Nuvve after the Business Combination, pursuant to an agreement between TTC and Nuvve.

He has served as a member of Nuvve’s board of directors since May 2019.

Yodose has currently served as Sr.

Project Manager for Toyota Tsusho America, Inc, dedicating to carbon neutral solutions activities since April 2022.

Yodose also served in various roles at TTC, including as a Group Leader in charge of V2G from April 2020 to March 2022, as a Project Manager in charge of V2G from April 2019 until March 2020, and as a Project Manager in charge of investing in hydro and wind fields, from October 2017 until March 2019.

Previously, from October 2015 to September 2017, Mr.

Yodose held the position of Senior Vice President at Eurus Energy Uruguay, where he was directly responsible for developing South American strategy and the formation of the Uruguay country office operations.

From 2012 to September 2015, Mr.

Yodose also held a key role within Eurus Energy Holdings Planning Department, where he supported business expansion and investment into numerous IPP projects totaling over $1 billion.

Yodose also served in Japan and Europe from 2006 to 2012 in key accounting management roles for TTC focused on J-SOX Act control procedure implementation, hedging currency risks and tax management.

Yodose holds a Bachelor’s Degree in Business Administration from Ritsumeikan University in Siga, Japan.

Executive Compensation

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Auditor Name:

Deloitte & Touche LLP Auditor Firm ID:

34 Auditor Location:

San Diego, CA

Auditor Name:

Moss Adams LLP Auditor Firm ID :

659 Auditor Location:

San Diego, CA

Exhibits, Financial Statement Schedules

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8-K 3.2 3/25/2021

3.3 Amended and Restated Bylaws

10-Q 3.2 8/12/2022

4.1 Warrant Agreement, dated February 13, 2020, by and between Continental Stock Transfer & Trust Company and the Registrant

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4.5 Description of Securities

10-K 4.5 3/31/2022

4.6 Form of Pre-Funded Warrants

8-K 4.1 7/28/2022

4.7 Form Warrants

8-K 4.2 7/28/2022

10.1 Amended and Restated Registration Rights Agreement

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8-K 10.10 3/25/2021

10.6# Amended and Restated Amendment NO.

1 to Employment Agreement with Gregory Poilasne

10-Q 10.1 11/14/2022

10.7 Employment Agreement with Ted Smith

8-K 10.11 3/25/2021

10.8# Amended and Restated Amendment NO.

1 to Employment Agreement with Ted Smith

10-Q 10.1 11/14/2022

10.9 Employment Agreement with David Robson

8-K 10.12 3/25/2021

10.10# Amended and Restated Amendment NO.

1 to Employment Agreement with David Robson

10-Q 10.1 11/14/2022

10.11 Form of Indemnification Agreement

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8-K/A 10.3 8/8/2021

Incorporation by Reference

Description Form Exhibit No.

10.20# Board Rights Agreement, dated as of August 4, 2021, by and among Nuvve Holding Corp.

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8-K/A 10.5 8/8/2021

10.22^ Form of Securities Purchase Agreement between the Company and the Purchaser, dated July 27, 2022

8-K 10.1 7/28/2022

10.23 Placement Agency Agreement between the Company and Craig-Hallum Capital Group LLC

8-K 10.2 7/28/2022

10.24 At The Market Offering Agreement, dated January 31, 2023, by and between Nuvve Holding Corp.

and Craig-Hallum Capital Group LLC.

8-K 10.1 1/31/2023

10.25 Form of Subscription Agreement between the Company and the Purchaser, dated February 17, 2023.

8-K 10.1 2/17/2023

10.26 Letter to the U.S.

Securities and Exchange Commission from Moss Adams LLP, dated August 19, 2022 .

8-K 16.1 8/19/2022

10.27 Nuvve Holding Corp.

Amended and Restated 2020 Equity Incentive Plan

S-8 10.1 9/9/2021

21.1 List of Subsidiaries of Nuvve Holding Corp .

23.1 Comsent of Moss Adams LLP, Independent Registered Public Accounting Firm

23.1 Consent of Moss Adams LLP, Independent Registered Public Accounting Firm

23.2 Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm

31.1 Rules 13a-14(a) Certification of Chief Executive Officer

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32.1 Section 1350 Certification of Chief Executive Officer

Incorporation by Reference

Description Form Exhibit No.

32.2 Section 1350 Certification of Chief Financial Officer

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Robson Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) March 31, 2023

/s/ Richard A.

Ashby Director March 31, 2022

Montgomery Director March 31, 2023

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB ID:

CONSOLIDATED FINANCIAL STATEMENTS

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

CONSOLIDATED STATEMENTS OF CASH FLOWS

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To the Shareholders and the Board of Directors

Nuvve Corporation

Nuvve Holding Corp.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Nuvve Holding Corp.

(the “Company”) as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive loss, stockholders’ equity (deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2021 and 2020, and the consolidated results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying consolidated balance sheet of Nuvve Holding Corp.

and subsidiaries (the "Company") as of December 31, 2022, the related consolidated statements of operations, comprehensive loss, stockholders’ equity, and cash flows for the year ended December 31, 2022, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022, and the results of its operation and its cash flows for the year ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 2 to the financial statements, the Company has incurred recurring losses and negative cash flows from operations, and has an accumulated deficit, that raise substantial doubt about its ability to continue as a going concern.

Management's plans in regard to these matters are also described in Note 2.

The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company's financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

/s/ Deloitte & Touche LLP

San Diego, California

March 31, 2023

We have served as the Company’s auditor since 2022.

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors

Nuvve Holding Corp.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Nuvve Holding Corp.

(the “Company”) as of December 31, 2021, the related consolidated statement of operations, comprehensive loss, stockholders’ equity, and cash flows for the year then ended, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2021, and the consolidated results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures to respond to those risks.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures to respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audit provides a reasonable basis for our opinion.

/s/ Moss Adams LLP

San Diego, California

March 31, 2022

We have served as the Company’s auditor since 2018.

March 31, 2022, except for the previously disclosed adjustments to 2021,

as to which the date is March 30, 2023

We served as the Company’s auditor from 2018 to 2022.

NUVVE HOLDING CORP.

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Restricted cash 480,000 380,000

Accounts receivable 1,886,708 999,897

Accounts receivable, net 1,121,694 1,886,708

Inventories 11,551,831 11,118,188

Security deposit, current — 20,427

Prepaid expenses and other current assets 2,942,145 1,036,645

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Intangible assets, net 1,341,640 1,481,077

Investment 670,951 670,951

Investment in equity securities 1,670,951 670,951

Investment in leases 97,054 —

Right-of-use operating lease assets 5,305,881 3,483,042

Deferred financing costs 43,562,847 —

Financing receivables 288,872 138,161

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Total Assets $ 41,199,590 $ 52,914,543

Liabilities, Mezzanine Equity and Stockholders’ (Deficit) Equity

Liabilities, Mezzanine Equity and Stockholders’ Equity

Current Liabilities

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Deferred revenue 1,221,497 719,771

Debt — 4,294,054

Operating lease liabilities - current 824,326 41,513

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Mezzanine equity

Redeemable non-controlling interests, preferred shares, zero par value, 1,000,000 shares authorized, 3,138 shares issued and outstanding;

aggregate liquidation preference of $ 3,200,760 at December 31, 2021

Stockholders’ (Deficit) Equity

Convertible preferred stock, $ 0.0001 par value, zero and 30,000,000 shares authorized;

zero and 16,789,088 shares issued and outstanding;

Redeemable non-controlling interests, preferred shares, zero par value, 1,000,000 shares authorized, 3,138 shares issued and outstanding at December 31, 2022 and December 31, 2021;

aggregate liquidation preference of $ 3,464,606 and $ 3,200,760 at December 31, 2022 and December 31, 2021, respectively.

3,547,765 2,901,899

Class D Incentive units, zero par value, 1,000,000 units authorized, 250,000 units issued and outstanding at December 31, 2022

Stockholders’ Equity

Preferred stock, $ 0.0001 par value, 1,000,000 shares authorized;

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Additional paid-in capital 144,073,505 122,336,607

Accumulated other comprehensive income (loss) 113,446 ( 77,841 )

Accumulated other comprehensive income 76,182 113,446

Accumulated deficit ( 116,956,528 ) ( 92,937,863 )

Nuvve Holding Corp.

Stockholders’ Equity (Deficit) 79,841,368 ( 881,710 )

Stockholders’ Equity 27,195,586 29,514,078

Non-controlling interests ( 3,950,186 ) ( 2,501,633 )

Total Stockholders’ Equity (Deficit) 79,268,764 ( 881,710 )

Total Liabilities, Mezzanine equity and Stockholders’ Equity (Deficit) $ 96,477,390 $ 7,155,435

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

Total Stockholders’ Equity 23,245,400 27,012,445

Total Liabilities, Mezzanine equity and Stockholders’ Equity $ 41,199,590 $ 52,914,543

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

NUVVE HOLDING CORP.

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Other income (expense)

Interest expense ( 585,157 ) ( 313,614 )

Change in fair value of conversion option on convertible notes — ( 37,497 )

Interest income (expense) 134,579 ( 585,157 )

Financing costs — ( 46,754,794 )

Change in fair value of warrants liability 11,986,462 ( 312,400 )

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AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Series A Convertible

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Shares Amount Shares Amount

Balances December 31, 2019 16,789,088 $ 1,679 24,542,314 $ 2,454 $ 17,131,913 $ 107,620 $ ( 15,573,689 ) $ — $ 1,669,977

Conversion of shares due to merger capitalization ( 16,789,088 ) ( 1,679 ) ( 15,763,398 ) ( 1,576 ) 3,255 — — —

Balances December 31, 2019, effect of reverse recapitalization (refer to Note 2) — — 8,778,916 878 17,135,168 107,620 ( 15,573,689 ) — 1,669,977

Contingent beneficial conversion feature — — — — 97,144 — — — 97,144

Conversion of convertible notes payable — — 1,539,225 154 1,799,213 — — — 1,799,367

Exercise of stock options — — 80,583 8 22,854 — — — 22,862

Stock-based compensation — — — — 599,535 — — — 599,535

Currency translation adjustment — — — — — ( 185,461 ) — — ( 185,461 )

Net loss — — — — — — ( 4,885,134 ) — ( 4,885,134 )

Balances December 31, 2021, as previously reported 16,789,088 1,679 26,162,122 2,616 19,650,659 ( 77,841 ) ( 20,458,823 ) — ( 881,710 )

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Balances December 31, 2021 — — 18,861,130 1,888 122,336,607 113,446 ( 92,937,863 ) ( 2,501,633 ) 27,012,445

Exercise of stock options and vesting of restricted stock units — — 483,639 47 245,676 — — — 245,723

Stock-based compensation — — — — 5,328,492 — — — 5,328,492

Proceeds from forward option put exercise — — 134,499 13 1,994,059 — — — 1,994,072

Proceeds from common stock offering, net of offering costs — — 792,882 79 3,763,417 — — — 3,763,496

Proceeds from Direct Offering, net of offering costs — — 2,150,000 215 10,405,254 — — — 10,405,469

Accretion on redeemable non-controlling interests preferred shares — — — — — — — ( 645,866 ) ( 645,866 )

Preferred dividends - non-controlling interest — — — — — — — ( 263,846 ) ( 263,846 )

Issuance of Common Shares related to Warrants — — 1,850,000 185 — — — — 185

Currency translation adjustment — — — — — ( 37,264 ) — — ( 37,264 )

Net loss — — — — — — ( 24,018,665 ) ( 538,841 ) ( 24,557,506 )

Balances December 31, 2022 — — 24,272,150 $ 2,427 $ 144,073,505 $ 76,182 $ ( 116,956,528 ) $ ( 3,950,186 ) $ 23,245,400

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

8 unchanged sentences

Share-based compensation 5,234,878 4,219,989

Financing costs — 46,771,276

Beneficial conversion feature on convertible debenture — 427,796

Convertible note issued for services — 28,000

Accretion of discount on convertible notes — 94,500

Accretion of discount on convertible debenture — 116,147

Change in fair value of warrants liability ( 11,986,462 ) 312,400

Change in fair value of derivative liability ( 152,723 ) —

Loss on disposal of asset — 1,326

Gain on extinguishment of PPP Loan — ( 492,100 )

Interest expense related to notes converted at discount — 97,144

Noncash lease expense 421,183 3,636

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Purchase of property and equipment ( 438,045 ) ( 273,124 )

Investments in equity securities ( 1,000,000 ) —

Net cash used in investing activities ( 1,438,045 ) ( 265,475 )

Financing activities

Proceeds from issuance of convertible debenture — 4,000,000

Proceeds from issuance of convertible notes — 988,500

Proceeds from Newborn Escrow Account — 58,184,461

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Payment of finance lease obligations ( 9,691 ) ( 5,839 )

Proceeds from PPP/EIDL Loan — 652,000

Repayment of EIDL Loan — ( 159,900 )

Proceeds from forward option put exercise 1,994,073 —

Proceeds from exercise of pre-funded warrants related to Direct Offering 185 —

Proceeds from Direct Offering of common stock, net of offering costs 13,069,815 —

Proceeds from common stock offering, net of offering costs 3,763,494 —

Proceeds from exercise of stock options 245,748 576,528

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Payment of Preferred Stock dividends — ( 39,096 )

Proceeds from shareholder loan — 75,000

Repayment proceeds from shareholder loan — ( 75,000 )

Net cash provided by financing activities 19,063,624 59,721,226

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Supplemental Disclosure of cash information:

Cash paid for interest $ — $ —

Cash paid for income taxes $ — $ 800

Supplemental Disclosure of Noncash Financing Activity

Convertible notes issued in exchange for deferred salary liability to an officer $ — $ 471,129

Issuance of convertible notes for services $ — $ 28,000

Conversion option issued $ — $ 94,500

Conversion of preferred stock to common stock $ — $ 1,679

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Conversion of shares due to reverse recapitalization $ — $ 3,383

Beneficial conversion feature $ — $ 97,144

Issuance of common stock for merger success fee $ — $ 2,085,299

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(a) Description of Business

Nuvve Holding Corp., a Delaware corporation headquartered in San Diego, California (the “Company” or “Nuvve”), formerly known as NB Merger Corp., was founded on November 10, 2020 under the laws of the state of Delaware.

Nuvve Holding Corp., a corporation headquartered in San Diego, California (the “Company” or “Nuvve”), formerly known as NB Merger Corp., was founded on November 10, 2020 under the laws of the State of Delaware.

On March 19, 2021, the Company (at the time known as NB Merger Corp.) acquired the outstanding shares of Nuvve Corporation (“Nuvve Corp.”), and the Company changed its name to Nuvve Holding Corp.

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Since then, Nuvve has established operations in the United States, the United Kingdom, France, and Denmark.

In addition to Nuvve’s algorithms and software, Nuvve provides complete V2G solutions to its customers, including V2G bidirectional chargers which are preconfigured to work with Nuvve’s GIVe platform.

The Company’s technology is compatible with several charger manufacturers both in DC (such as CHAdeMO, a DC charging standard for electric vehicles, enabling seamless communication between the vehicle and the charger) and AC mode.

In addition to Nuvve’s algorithms and software, Nuvve provides complete V2G solutions to its customers, including V2G bi-directional chargers which are preconfigured to work with Nuvve’s GIVe platform.

The Company’s technology is compatible with several charger manufacturers both in Direct Current ("DC") (such as CHAdeMO, a DC charging standard for electric vehicles, enabling seamless communication between the vehicle and the charger) and Alternative Current ("AC") mode.

(b) Structure of the Company

Nuvve has two wholly owned subsidiaries, Nuvve Corp.

and Nuvve Co (Nuvve Japan).

has three wholly owned subsidiaries:

(1) Nuvve Denmark ApS, (“Nuvve Denmark”), a company registered in Denmark, (2) Nuvve SaS, a company registered in France, and (3) Nuvve LTD, a company registered in United Kingdom.

In March 2020, following the establishment of its investment in Dreev in 2019 (Note 6), the Company ceased operations of its subsidiary, Nuvve SaS in France.

The two employees of Nuvve SaS resigned from the Company in March 2020 and were concurrently hired by Dreev.

Financial results for Nuvve SaS are included in the Company’s financial results through the cessation of operations.

and Nuvve Pennsylvania LLC.

has four wholly owned subsidiaries:

(1) Nuvve Denmark ApS, (“Nuvve Denmark”), a company registered in Denmark, (2) Nuvve SaS, a company registered in France, (3) Nuvve KK (Nuvve Japan), a company registered in Japan, and (4) Nuvve LTD, a company registered in United Kingdom.

Nuvve Norway, a company registered in Norway is a branch of Nuvve Denmark.

On August 4, 2021, the Company formed Levo Mobility LLC, a Delaware limited liability company ("Levo"), with Stonepeak Rocket Holdings LP, a Delaware limited partnership ("Stonepeak"), and Evolve Transition Infrastructure LP, a Delaware limited partnership ("Evolve").

Levo is a consolidated entity of the Company.

Please see Note 1 9 for a summary description of the key items of the Levo agreements, and Note 2 for the principles of consolidation.

Please see Note 2 for the principles of consolidation.

Levo is a sustainable infrastructure company focused on rapidly advancing the electrification of transportation by funding V2G enabled EV fleet deployments.

Levo utilizes Nuvve’s V2G technology and committed capital from Stonepeak and Evolve to offer Fleet-as-a-Service for school buses, last-mile delivery, ride hailing and ride sharing, municipal services, and more to eliminate the primary barriers to EV fleet adoption including large upfront capital investments and lack of expertise in securing and managing EVs and associated charging infrastructure.

Levo's turnkey solution simplifies and streamlines electrification, can lower the total cost of EV operation for fleet owners, and support the grid when the EVs are not in use.

Levo utilizes Nuvve’s V2G technology and committed capital from Stonepeak and Evolve to offer Fleet-as-a-Service ("FaaS") for school buses, last-mile delivery, ride hailing and ride sharing, municipal services, and more to eliminate the primary barriers to EV fleet adoption including large upfront capital investments and lack of expertise in securing and managing EVs and associated charging infrastructure.

Levo's turnkey solution simplifies and streamlines electrification, can lower the total cost of EV operation for fleet owners, and supports the grid when the EVs are not in use.

For a fixed monthly payment with no upfront cost, Levo will provide the EVs, such as electric school buses, charging infrastructure powered by Nuvve’s V2G platform, EV and charging station maintenance, energy management, and technical advice.

Levo will initially focus on electrifying school buses, providing associated charging infrastructure, and delivering V2G services to enable safer and healthier transportation for children while supporting carbon dioxide emission reduction, renewable energy integration, and improved grid resiliency.

Levo initially focuses on electrifying school buses, providing associated charging infrastructure, and delivering V2G services to enable safer and healthier transportation for children while supporting carbon dioxide emission reduction, renewable energy integration, and improved grid resiliency.

NUVVE HOLDING CORP.

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The shares and corresponding capital amounts and earnings per share available for common stockholders prior to the Business Combination have been retroactively restated to reflect the exchange ratio established in the Business Combination.

In accordance with Accounting Standards Codification ("ASC") 205-40, Presentation of Financial Statements - Going Concern , the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about its ability to continue as a going concern within one year after the that the consolidated financial statements are issued.

Since inception, the Company has incurred recurring losses and negative cash flows from operations since inception and has an accumulated deficit of $ 47.4 million as of December 31, 2021.

During the year ended December 31, 2021, the Company incurred a net loss of $ 27.2 million and used $ 29.2 million of cash in operations.

In accordance with the related Going Concern accounting standards, the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about its ability to continue as a going concern within one year after the that the consolidated financial statements are issued.

Since inception, the Company has incurred recurring losses and negative cash flows from operations and has an accumulated deficit of $ 117.0 million and $ 92.9 million as of December 31, 2022 and December 31, 2021, respectively .

During the years ended December 31, 2022 and December 31, 2021 , the Company incurred an operating loss of $ 36.9 million and $ 27.2 million, respectively, and used $ 34.1 million and $ 29.2 million, respectively, of cash in operations.

The Company continues to expect to generate operating losses and negative cash flows and may need additional funding to support its planned operating activities through profitability.

The transition to profitability is dependent upon the successful expanded commercialization of the Company's GIVe platform and the achievement of a level of revenues adequate to support its cost structure.

The Company expects its cash and cash equivalents as of March 31, 2022 will be sufficient to fund current planned operations for at least the next twelve months from the date of issuance of these consolidated financial statements.

Management's expectations with respect to its ability to fund current planned operations is based on estimates that are subject to risks and uncertainties.

Actual results could be different from management's estimates and should actual results be less favorable than these estimates management would ultimately need to take corrective steps to improve future operating results and its financial condition.

Management plans to fund current operations through increased revenues and if required cash saving measures and or raising additional capital.

Management's expectations with respect to the Company’s ability to fund current planned operations is based on estimates that are subject to risks and uncertainties.

There is an inherent risk that the Company may not achieve such financial projections and if so, cash outflows could be higher than currently anticipated.

Should this occur, management plans to implement cash saving measures during this time period, including reductions in discretionary expenses related to consultants, travel, personnel, and personnel-related costs.

If necessary, management believes it can raise additional capital through its at-the-market offering agreement.

However, as such plans are not solely within management’s control management cannot conclude as of the date of this filing that the plans are probable of being successfully implemented and as such has concluded that substantial doubt exists about the Company’s ability to continue as a going concern for twelve months from the date of issuance of our financial statements.

The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.

(b) Principles of Consolidation

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Pursuant to the consolidation guidance, the Company first evaluates whether it holds a variable interest in an entity in which it has a financial relationship and, if so, whether or not that entity is a variable interest entity ("VIE").

A VIE is an entity with insufficient equity at risk for the entity to finance its activities without additional subordinated financial support or in which equity investors lack the characteristics of a controlling financial interest.

A VIE is an entity with insufficient equity at risk for the entity to finance its activities without additional subordinated financial support or in which equity investors at risk lack the characteristics of a controlling financial interest.

If an entity is determined to be a VIE, the Company evaluates whether the Company is the primary beneficiary.

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The Company concludes that it is the primary beneficiary and consolidates the VIE if the Company has both (i) the power to direct the activities of the VIE that most significantly influence the VIE's economic performance, and (ii) the obligation to absorb losses of, or the right to receive benefits from, the VIE that could potentially be significant to the VIE.

The Company formed Levo with Stonepeak and Evolve (see Note 19 for details), in which the Company owns 51 % of Levo's common units.

NUVVE HOLDING CORP.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The Company formed Levo with Stonepeak and Evolve, in which the Company owns 51 % of Levo's common units.

The Company has determined that Levo is a VIE in which the Company is the primary beneficiary.

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The Company's consolidated financial statements include the assets, liabilities and results of operations of VIEs for which the Company is the primary beneficiary.

The other equity holders’ interests are reflected in "Net loss attributable to non-controlling

NUVVE HOLDING CORP.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

interests" in the consolidated statements of operations and "Non-controlling interests" in the consolidated balance sheets.

The other equity holders’ interests are reflected in "Net loss attributable to non-controlling interests" in the consolidated statements of operations and "Non-controlling interests" in the consolidated balance sheets.

See Note 18 for details of non-controlling interests.

The Company began consolidating the assets, liabilities and results of operations of Levo during the quarter ended September 30, 2021.

The creditors of the consolidated VIE do not have recourse to the Company other than to the assets of the consolidated VIE.

The following table summarizes the carrying amounts of Levo assets and liabilities included in the Company’s consolidated balance sheets at December 31, 2021:

December 31, 2021

The creditors of the consolidated VIE do not have recourse to the Company other than to the assets of the consolidated VIEs.

The following table summarizes the carrying amounts of Levo assets and liabilities included in the Company’s consolidated balance sheets:

December 31, 2022 December 31, 2021

Cash $ 27,629 $ 28,446

Deferred financing costs 3,920,323

Prepaid expenses and other current assets 59,794 —

Total Assets $ 87,423 $ 28,446

Liabilities and Mezzanine Equity

Accrued expenses $ 116,754

Accounts payable $ 8,165 $ —

Accrued expenses and dividend payable 336,713 $ 116,754

Derivative liability - non-controlling redeemable preferred shares 359,225 511,948

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Redeemable non-controlling interest represents the shares of the preferred stock issued by Levo to Stonepeak and Evolve (the "preferred shareholders") who also own 49 % of Levo common units.

Redeemable non-controlling interest represents the shares of the preferred stock issued by Levo to Stonepeak and Evolve (the "preferred shareholders"), who own 49 % of Levo common units.

The preferred stock is not mandatorily redeemable or currently redeemable, but it could be redeemable with the passage of time at the election of Levo, the preferred shareholders or a trigger event as defined in the preferred stock agreement.

As a result of the contingent put right available to the preferred shareholders, the redeemable non-controlling interests in Levo are classified outside of permanent equity in the Company’s consolidated balance sheets as mezzanine equity.

As a result of the contingent put right available to the preferred shareholders, the redeemable non-controlling interests in Levo are classified as mezzanine equity in the Company’s consolidated balance sheets as mezzanine equity.

The initial carrying value of the redeemable non-controlling interest is reported at the initial proceeds received on issuance date, reduced by the fair value of embedded derivatives resulting in an adjusted initial carrying value.

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The Company presents non-controlling interests as a component of equity on its consolidated balance sheets and reports the portion of its earnings or loss for non-controlling interest as net earnings or loss attributable to non-controlling interests in the consolidated statements of operations.

Profits Interests Units (Class D Incentive Units)

In April 2022, Levo issued Class D Incentive Units to certain key employees in the form of profits interests within the meaning of the Internal Revenue Service (“Profits Interests”).

Any future distributions under the Profits Interests will only occur once distributions made to all other member units exceed a threshold amount.

The Company performed an analysis of the key features of the Profits Interests to determine whether the nature of the Profits Interests are (a) an equity award which should be accounted for under ASC 718, Compensation – Stock Compensation or (b) a bonus arrangement which should be accounted for under ASC 710, Compensation – General .

Based on the features of the Profits Interests, the awards are considered stock compensation to be accounted for as equity.

Accordingly, compensation expense for the Profits Interests will be recognized over the vesting period of the awards.

NUVVE HOLDING CORP.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(e) Business Combination

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Immediately prior to the effectiveness of the Reincorporation Merger and the Acquisition Merger, the Company filed its Amended and Restated Certificate of Incorporation with the Delaware Secretary of State, pursuant to which, among other things, the Company changed its name to “Nuvve Holding Corp.” and adopted certain other changes that the Company’s Board of Directors deemed appropriate for an operating public company.

NUVVE HOLDING CORP.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

In connection with the entry into the Merger Agreement, on November 11, 2020, Newborn entered into subscription agreements (the “Subscription Agreements”) with certain accredited Private Investment in Public Equity investors (the “PIPE Investors”), under which, immediately before the closing of the Business Combination, the PIPE Investors purchased 1,425,000 ordinary shares of Newborn, at a purchase price of $ 10.00 per share, for an aggregate purchase price of $ 14,250,000 in a private placement (the “PIPE”).

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The Closing Exchange Ratio was determined by taking (i) a number of shares of the Company’s common stock equal to (A) the Closing Merger Consideration (as defined below), divided by (B) $ 10.00 per share, and dividing it by (ii) the sum of (x) the total number of shares of Nuvve Corp.’s common stock outstanding as of immediately prior to closing (including the shares issued upon conversion of Nuvve Corp.’s preferred stock, but excluding the shares issued upon conversion of the Bridge Loan) and (y) the total number of shares of Nuvve Corp.’s common stock issuable upon exercise of Nuvve Options outstanding immediately prior to the closing.

The “Closing Merger Consideration” was determined by taking $ 100,000,000 , subtracting the amount of Nuvve Corp.’s indebtedness for borrowed money as of the closing of the Acquisition Merger (excluding Payroll Protection Program loans eligible for forgiveness – see Note 11 ), which was zero, and adding the aggregate exercise price of the Nuvve Options outstanding as of the date of the Merger Agreement or granted prior to the closing of the Acquisition Merger, which was $ 4,265,785 .

The “Closing Merger Consideration” was determined by taking $ 100,000,000 , subtracting the amount of Nuvve Corp.’s indebtedness for borrowed money as of the closing of the Acquisition Merger (excluding Payroll Protection Program loans eligible for forgiveness), which was zero, and adding the aggregate exercise price of the Nuvve Options outstanding as of the date of the Merger Agreement or granted prior to the closing of the Acquisition Merger, which was $ 4,265,785 .

NUVVE HOLDING CORP.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Additionally, the former stockholders of Nuvve Corp.

would have been entitled to receive up to 4.0 million earn-out shares of the Company’s common stock if, for the year ending December 31, 2021, the Company’s revenue equaled or exceeded $ 30,000,000 .

would have been entitled to receive up to 4.0 million earn-out shares of the Company’s common stock if, for the year ended December 31, 2021, the Company’s revenue equaled or exceeded $ 30,000,000 .

The former Nuvve Corp.

stockholders would have been entitled to a portion of the earn-out shares only if they continued to hold their shares of the Company’s common stock received in the Acquisition Merger through the earn-out payment date.

As the Company's target revenue of $ 30,000,000 for the year ending December 31, 2021, was not met, the former stockholders of Nuvve Corp.

As the Company's target revenue of $ 30,000,000 for the year ended December 31, 2021, was not met, the former stockholders of Nuvve Corp.

were not entitled to receive up to the 4.0 million earn-out shares of the Company’s common stock.

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The share repurchase was completed on April 26, 2021 (see Note 11 ).

As agreed between the parties to the Merger Agreement, immediately following the closing of the Acquisition Merger, the Company’s board of directors consisted of seven directors, five of whom were designated by Nuvve and two of whom were designated by Newborn.

P ursuant to a letter agreement dated April 23, 2021, the Company’s Chief Executive Officer and Chief Operating Officer committed to purchase from the Company, and the Company committed to sell to them, 134,499 shares of the Company’s common stock for $ 14.87 per share or a total of $ 2,000,000 .

As of June 30, 2022, Nuvve's Chief Executive Officer and Chief Operating Officer had fulfilled their obligations and had purchased from Nuvve a total of 134,499 shares of the Company’s common stock for $ 14.87 per share or a total of approximately $ 2,000,000 .

As agreed between the parties to the Merger Agreement, immediately following the closing of the Acquisition Merger, the Company’s board of directors consisted of seven directors.

A majority of the directors qualified as independent directors under rules of Nasdaq.

NUVVE HOLDING CORP.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

In Newborn’s initial public offering, Newborn issued 5,750,000 units at $ 10.00 per unit.

Each unit issued in the initial public offering consisted of one ordinary share, one warrant to purchase one-half of an ordinary share (the “Public Warrant”), and one right automatically convertible into one-tenth of an ordinary upon completion of an initial business combination.

Each unit issued in the initial public offering consisted of one ordinary share, one warrant to purchase one-half of an ordinary share (the “Public Warrant”), and one right automatically convertible into one-tenth of an ordinary shares upon completion of an initial business combination.

Concurrently with the initial public offering, Newborn sold to its sponsor 272,500 units at $ 10.00 per unit in a private placement.

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On the Closing Date of the Business Combination, the balance in the Trust Account was $ 58,471,961 .

After the closing of the Business Combination, and other transactions described above, including payment of $ 18,630 for redemptions of ordinary shares by Newborn stockholders, payment of transaction costs of $ 3,702,421 , repayment of loans made by Newborn’s sponsor to Newborn of $ 487,500 , repurchase of $ 6,000,000 in common shares held by EDF Renewables, and transfer into an escrow account with Silicon Valley Bank of $ 495,000 to cover the balance of the Company’s PPP Loan payable ( Note 11 ), the Company received total net proceeds from the Trust Account in cash of $ 47,768,410 .

After the closing of the Business Combination, and other transactions described above, including payment of $ 18,630 for redemptions of ordinary shares by Newborn stockholders, payment of transaction costs of $ 3,702,421 , repayment of loans made by Newborn’s sponsor to Newborn of $ 487,500 , repurchase of $ 6,000,000 in common shares held by EDF Renewables, and transfer into an escrow account with Silicon Valley Bank of $ 495,000 to cover the balance of the Company’s PPP Loan payable, the Company received total net proceeds from the Trust Account in cash of $ 47,768,410 .

Also on March 19, 2021, the PIPE closed, and the Company received cash proceeds, net of $ 2,500 of transaction costs, of $ 14,247,500 .

(f) Emerging Growth Company

Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) permits emerging growth companies (“EGC”) to delay complying with new or revised financial accounting standards that do not yet apply to private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act).

Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) permits emerging growth companies (“EGC”) to delay adoption of new or revised financial accounting standards that do not yet apply to private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act).

The Company qualifies as an EGC.

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This different adoption timing may make a comparison of the Company’s financial statements with another public company which is neither an EGC nor an EGC that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

The novel coronavirus (COVID-19) which was declared a pandemic in March 2020, and the related restrictive measures such as travel restrictions, quarantines, and shutdowns, has negatively impacted the global economy.

As national and local governments in different countries ease COVID-19 restrictions, and vaccines are distributed and rolled out successfully, we continue to see improved economic trends.

However, COVID-19 and actions taken to mitigate its spread have had and are expected to continue to have an adverse impact on the economies and financial markets of many countries, including the geographical area in which the Company operates.

The Company continues to monitor the situation closely but, at this time, is unable to predict the cumulative impact, both in terms of severity and duration, that the coronavirus pandemic has and will have on its business, operating results, cash flows and financial condition, and it could be material if the current circumstances continue to exist for a prolonged period of time.

In addition to any direct impact on Nuvve’s business, it is reasonably possible that the estimates made by management in preparing Nuvve’s financial statements have been, or will be, materially and adversely impacted in the near term as a result of the COVID-19 outbreak.

(h) Use of Estimates

The preparation of financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that may affect the reported amounts of assets and liabilities, the 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.

Estimates and assumptions made by management include the impairment of intangible assets, estimated allowance for doubtful accounts receivable, the net realizable value of inventory, the grant date fair value of share-based payments, the fair value of notes payable conversion options, revenue recognition, the fair value of warrants, the fair value of the derivative liability - non-controlling redeemable preferred shares, realizability of the deferred financing costs, the recognition and disclosure of contingent liabilities.

NUVVE HOLDING CORP.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The on-going impact of the novel coronavirus pandemic (COVID-19) continues to negatively impacted the global economy, although to a lesser extent than in prior years.

However, the Company continues to monitor COVID-19 closely but, at this time, is unable to predict how COVID-19 will impact its business, operating results, cash flows and financial condition in 2023.

In addition to any direct impact on the Company's business, it is reasonably possible that the estimates made by management in preparing its financial statements have been, or will be, materially and adversely impacted in the near term as a result of the on-going COVID-19 conditions.

(h) Use of Estimates

The preparation of financial statements in conformity with U.S.

Significant estimates and assumptions made by management include the impairment of intangible assets, the net realizable value of inventory, the fair value of share-based payments, lease incremental borrowing rate, derivative liability associated with redeemable preferred shares, revenue recognition, the fair value of warrants, and the recognition and disclosure of contingent liabilities.

Management evaluates its estimates on an ongoing basis.

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If a warrant does not meet the conditions for equity classification, it is carried on the consolidated balance sheet as a warrant liability measured at fair value, with subsequent changes in the fair value of the warrant recorded in the statement of operations as change in fair value of warrants in other income (expense).

If a warrant meets both conditions for equity classification, the warrant is initially recorded in additional paid-in capital on the consolidated balance sheet, and the amount initially recorded is not subsequently remeasured at fair value.

If a warrant meets both conditions for equity classification, the warrant is initially recorded in additional paid-in capital on the consolidated balance sheets, and the amount initially recorded is not subsequently remeasured at fair value.

(j) Foreign Currency Matters

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dollars at balance sheet date exchange rates, except for inventories, prepaid expenses, and property, plant, and equipment, which are remeasured at historical rates.

Foreign currency income and expenses are remeasured at average exchange rates in effect during the year, except for expenses related to balance sheet amounts which are remeasured at historical exchange rates.

Foreign currency revenue and expenses are remeasured at average exchange rates in effect during the year, except for expenses related to balance sheet amounts which are remeasured at historical exchange rates.

Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in other income (expense) in the consolidated statements of operations.

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The Company has not experienced any losses in these accounts and believes it is not exposed to any significant credit risk in this area.

Pursuant to the Business Combination agreement, $ 495,000 of the proceeds received from Newborn’s trust account were required to be set aside in trust for the possible repayment of the Company’s Payroll Protection Plan (“PPP”) loan ( Note 11 ).

The Company applied for forgiveness of the PPP loan.

In June 2021, the PPP loan was fully forgiven and the $ 495,000 in trust was released to the Company.

In May 2021, in connection with a new office lease agreement, the Company was required to provide an irrevocable, unconditional letter of credit in the amount of $ 380,000 to the landlord upon execution of the lease.

This amount securing the letter of credit was recorded as restricted cash as of December 31, 2021.

In connection with a new office lease agreement, the Company was required to provide irrevocable, unconditional letter of credit to the landlord upon execution of the lease.

The total amount securing the letter of credit and recorded as restricted cash as of December 31, 2022 and December 31, 2021 was $ 480,000 and $ 380,000 , respectively .

NUVVE HOLDING CORP.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(l) Accounts Receivable

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The Company performs ongoing credit evaluations of customers to assess the probability of accounts receivable collection based on a number of factors, including past transaction experience with the customer, assessment of their credit history, and review of the invoicing terms of the contract.

The Company maintains reserves for potential credit losses on customer accounts when deemed necessary.

Based on the analysis the Compa ny recorded an allowance for doubtful accounts as o f December 31, 2021, but did not record an allowance for doubtful accounts for December 31, 2020.

The Company maintains an allowance for doubtful accounts for potential credit losses on customer accounts when deemed necessary.

Based on the analysis, the Compa ny recorded an allowance for doubtful accounts as o f December 31, 2022 and December 31, 2021.

See Note 7 for details.

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(m) Concentrations of Credit Risk

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The Company had certain customers whose revenue individually represented 10% or more of the Company’s total revenue, or whose accounts receivable balances individually represented 10% or more of the Company’s total accounts receivable, as follows:

For the years ended December 31, 2021 and 2020, one customer accounted for 12.4 %, and four customers in aggregate accounted for 62.3 % of revenue, respectively.

For the years ended December 31, 2022 and 2021, one customer accounted for 32.1 %, and one customer accounted for 12.4 % of total revenue, respectively.

During the years ended December 31, 2022 and 2021, the Company's top five customers accounted for approximately 54.7 % and 44.0 %, respectively, o f the Company’s total revenue.

At December 31, 2022, three customers in aggregate accounted for 40.6 % of accounts receivable.

At December 31, 2021, two customers in aggregate accounted for 32.2 % of accounts receivable.

At December 31, 2020, four customers in aggregate accounted for 70.4 % of accounts receivable.

Approximately 53.6 % and 56.0 % of the Company’s trade accounts receivable balance was with five customers at December 31, 2022 and 2021, respectively.

The Company estimates its maximum credit risk for accounts receivable at the amount recorded on the balance sheet.

The trade accounts receivables are generally short-term and all probable bad debt losses have been appropriately considered in establishing the allowance for doubtful accounts.

The trade accounts receivables are generally short-term and all potential credit losses have been appropriately considered in establishing the allowance for doubtful accounts.

(n) Inventories

Inventories, consisting primarily of EV charging stations, are stated at the lower of cost or net realizable value.

Inventories, consisting primarily of DC chargers, are stated at the lower of cost or net realizable value.

The Company values its inventories using the first-in, first-out method.

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There were no such write-downs for the years ended December 31, 2022 and 2021.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(r) Investments in Equity Securities Without Readily Determinable Fair Values

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For purposes of this assessment, the Company considers the investee’s cash position, earnings and revenue outlook, liquidity, and management ownership, among other factors, in its review.

If management’s assessment indicates that an impairment exists, the Company estimates the fair value of the equity investment

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

and recognizes in current earnings an impairment loss that is equal to the difference between the fair value of the equity investment and its carrying amount.

In February 2019, the Company invested in common shares of Dreev SaS, (“Dreev”), a VIE, and determined it was not the primary beneficiary of the VIE (see Note 6 ).

If management’s assessment indicates that an impairment exists, the Company estimates the fair value of the equity investment and recognizes in current earnings an impairment loss that is equal to the difference between the fair value of the equity investment and its carrying amount.

In February 2019, the Company invested in common shares of Dreev SaS, (“Dreev”).

Dreev is a nonpublic entity, for which there is no readily determinable fair value.

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The Company did not recognize an impairment loss on its investment during the year ended December 31, 2022 or the year ended December 31, 2021.

(s) Deferred Financing Costs

Deferred financing costs consist of direct and incremental costs incurred and fees paid for a commitment to obtain financing.

See Note 19 for details.

As the commitment amount is funded, the carrying amount of the deferred financing costs is reduced and the amount is charged to additional-paid-in-capital.

The deferred financing cost will be impaired if it becomes probable that funding of the full commitment amount will not occur.

(t) Employee Savings Plan

In June 2022, the Company invested $ 1.0 million in Switch EV Ltd ("Switch"), a nonpublic entity incorporated and registered in the United Kingdom through an advance subscription agreement for a future equity ownership.

Since Switch is a nonpublic entity, there is no readily determinable fair value.

As of December 31, 2022, the Company’s investment in Switch was accounted for as an investment in equity securities without a readily determinable fair value subject to impairment.

The Company did not recognize an impairment loss on its investment during the year ended December 31, 2022.

(s) Employee Savings Plan

The Company maintains a savings plan on behalf of its employees that qualifies under Section 401(k) of the Internal Revenue Code.

Participating employees may contribute up to the statutory limits.

During the year ended December 31, 2021 and the year ended December 31, 2020, the Company did not contribute to the savings plan.

(u) Fair Value Measurement

The Company’s financial instruments consist principally of cash, accounts receivable, accounts payable and accrued expenses, convertible notes payable, convertible debenture, and the conversion option on the notes payable and warrants.

For the years ended December 31, 2022 and 2021, the Company did not contribute to the savings plan.

(t) Fair Value Measurement

The Company’s financial instruments consist principally of cash, accounts receivable, accounts payable and accrued expenses, and warrants.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

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• Level 3 – Unobservable inputs are used when little or no market data is available, which requires the Company to develop its own assumptions about how market participants would value the assets or liabilities.

(v) Net Loss Per Share Attributable to Common Stockholders

(u) Net Loss Per Share Attributable to Common Stockholders

The Company’s basic net loss per share attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period.

The computation of net loss attributable to common stockholders is computed by deducting net earnings or loss attributable to non-controlling interests from the consolidated net earnings or loss ( Note 15 ).

The diluted net loss per share attributable to common stockholders is computed by giving effect to all potential dilutive common stock equivalents outstanding for the period.

The dilutive effect of these potential common shares is reflected in diluted earnings per share by application of the treasury stock method.

For purposes of this calculation, shares issuable upon the conversion of the Series A Convertible Preferred stock ( Note 12 ), exercise of warrants ( Note 12 ), exercise of the unit purchase option ( Note 12 ), and options to purchase common stock ( Note 1 3 ) are considered common stock equivalents but have been excluded from the calculation of diluted net loss per share attributable to common stockholders as their effect is antidilutive ( Note 15 ).

The computation of net loss attributable to common stockholders is computed by deducting net earnings or loss attributable to non-controlling interests, preferred dividends on redeemable non-controlling interest, and accretion on preferred shares on redeemable non-controlling interest from the consolidated net earnings or loss ( Note 14 ).

NUVVE HOLDING CORP.

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(w) Revenue Recognition

The Company accounts for revenues under ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”).

Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those products or services.

(v) Revenue Recognition

The Company recognizes revenue in accordance with the way that depicts the transfer of control of promised products or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those products or services.

The Company enters into contracts that can include various combinations of products and services, which are generally distinct and accounted for as separate performance obligations.

Revenue is recognized net of allowances for credits and any taxes collected from customers, which are subsequently remitted to governmental authorities.

The Company determines revenue recognition through the following steps:

The Company recognizes revenue through the following steps:

• Identification of the contract, or contracts, with a customer;

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The transaction price for each contract is allocated between the identified performance obligations based on relative estimated standalone selling prices.

The Company occasionally enters into agreements with customers in which EV charging stations are sold at a discount in exchange for a higher percentage of revenue share from the customer selling energy through the GIVe platform or from carbon credits.

The Company occasionally enters into contracts with customers in which EV charging stations are sold at a discount in exchange for a higher percentage of revenue share from the customer selling energy through the GIVe platform or from carbon credits.

Due to the long-term nature of these payment terms, certain contracts are considered to have significant financing components as it relates to the equipment.

The Company estimates the effect of any significant financing component and records the revenue associated with the equipment at the estimated present value of the expected stream of payments.

As payments are received, the difference between the total payment and the amortized value of the receivable is recorded to interest income using the effective yield method.

The Company estimates the effect of any significant financing component and records the revenue associated with the EV charging stations at the estimated present value of the expected stream of payments.

As payments are received, the difference between the total payment and the amortized value of the receivable is recorded to interest income in Other income (expense) in the consolidated statements of operations using the effective yield method.

Products – The Company sells EV charging stations either on a standalone basis or together with services such as access to the GIVe platform, extended warranty and maintenance services.

When the charging station is a distinct performance obligation, revenue is recognized upon delivery.

When the sale of charging station is a distinct performance obligation, revenue is recognized upon delivery.

For other customer contracts, the charging stations are sold as part of a solution and are not distinct from the services, and revenue from the charging station is recognized upon completion of installation and commissioning of the equipment.

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The payment terms for some of the Company’s service contracts include revenue sharing arrangements whereby the Company is entitled to the right to receive a portion of the revenue generated by the customer selling energy through the GIVe platform or from carbon credits received as a result of the customer using the GIVe platform.

Revenue is recognized as it is received.

The Company has entered into various agreements for research and development and software development services.

The terms of these arrangements typically include terms whereby the Company receives milestone payments in accordance with the scope of services outlined in the respective agreement or is reimbursed for allowable costs.

At the inception of each arrangement that includes milestone payments, the Company evaluates whether a significant reversal of cumulative revenue associated with

At the inception of each arrangement that includes milestone payments, the Company evaluates whether a significant reversal of cumulative revenue associated with achieving the milestones is probable and estimates the amount to be included in the transaction price using the most likely amount method.

If it is probable that a significant reversal of cumulative revenue would not occur, the associated milestone value is included in the transaction price.

The Company applies judgment in evaluating factors such as the scientific, regulatory,

NUVVE HOLDING CORP.

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achieving the milestones is probable and estimates the amount to be included in the transaction price using the most likely amount method.

If it is probable that a significant reversal of cumulative revenue would not occur, the associated milestone value is included in the transaction price.

The Company applies judgment in evaluating factors such as the scientific, regulatory, commercial, and other risks that must be overcome to achieve a particular milestone in making this assessment.

commercial, and other risks that must be overcome to achieve a particular milestone in making this assessment.

At the end of each subsequent reporting period, the Company reevaluates the probability of achievement of all milestones subject to constraint and, if necessary, adjusts its estimate of the overall transaction price.

Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues and earnings in the period of adjustment.

Revenue arising from from reimbursed allowable costs are recognized as the costs are submitted and approved by the applicable agency.

The Company occasionally sells extended warranty contracts on the charging stations, which includes maintenance of the equipment for a period (e.g., three years , five years , 10 years, 12 years).

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Access to the warranty services represent a series of distinct services that are substantially the same and have the same pattern of transfer to the customer, and the Company recognizes warranty revenue ratably with the passage of time.

Revenue for other service contracts is recognized over time using an input method where progress on the performance obligation is measured based on the proportion of actual costs incurred to date relative to the total costs expected to be required to satisfy the performance obligation.

Revenue for certain service contracts, such as third party installation, is recognized over time using an input method where progress on the performance obligation is measured based on the proportional actual costs incurred to date relative to the total costs expected to be required to satisfy the performance obligation.

Bill-and-hold arrangements - The Company occasionally enters into bill and hold arrangements in which some customers request that billed products that are ready for delivery be held at the Company's warehouse facility for them until shipment at a later date.

In this instance, revenue is recognized when;

1) the risks of ownership, including title, have passed to the customer, 2) the product must be identified separately as belonging to the customer, 3) the product currently must be ready for physical transfer to the customer, and 4) the Company does not have the ability to use the product or to direct it to another customer.

Grant revenue – The Company has concluded that grants are not within the scope of ASC 606, as government entities do not meet the definition of a “customer” as defined by ASC 606, and as for the grants, there is not considered to be a transfer of control of goods or services to the government entity funding the grant.

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Contract modifications for goods or services that are considered distinct from the existing contract are accounted for as separate contracts.

The Company’s contract liabilities consist solely of deferred revenue related to amounts billed, amounts unbilled or received in advance of services or products delivered.

(x) Cost of Revenue

The Company’s contract liabilities consist solely of deferred revenue related to amounts billed or received in advance of services or products delivered.

(w) Cost of Revenue

Cost of revenue consists primarily of costs of material, including hardware and software costs, and costs of providing services, including employee compensation and other costs associated with supporting these functions.

(y) Contract Costs

Cost of revenue does not include depreciation and amortization costs.

(x) Contract Costs

Under ASC Subtopic 340-40, Other Assets and Deferred Costs—Contracts with Customers (“ASC 340-40”), the Company defers all incremental costs, including commissions, incurred to obtain the contract and amortizes these costs over the expected

period of benefit which is generally the life of the contract.

The Company evaluated incremental contract costs for contracts in place as of December 31, 2021, and December 31, 2020 and determined these to be immaterial to the consolidated financial statements.

NUVVE HOLDING CORP.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(z) Income Taxes

period of benefit which is generally the life of the contract.

The Company evaluated incremental contract costs for contracts in place as of December 31, 2022, and December 31, 2021 and determined these to be immaterial to the consolidated financial statements.

(y) Income Taxes

The Company accounts for income taxes under the asset and liability method in accordance with ASC Topic 740, Income Taxes, (“ASC 740”), under which it recognizes deferred income taxes, net of valuation allowances, for net operating losses, tax credit carryforwards, and the estimated future tax effects of temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.

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The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

The Company evaluates its deferred tax assets quarterly to determine if a valuation allowance is required and considers whether a valuation allowance should be recorded against deferred tax assets based on the likelihood that the benefits of the deferred tax assets will or will not ultimately be realized in future periods.

In making this assessment, significant weight is given to evidence that can be objectively verified, such as recent operating results, and less consideration is given to less objective indicators, such as future income projections.

After consideration of positive and negative evidence, if the Company determines that it is more likely than not that it will generate future income sufficient to realize its deferred tax assets, the Company will record a reduction in the valuation allowance.

The Company applies certain provisions of ASC 740, which includes a two-step approach to recognizing and measuring uncertain tax positions.

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The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments.

(aa) Research and Development

(z) Research and Development

The Company expenses research and development costs as incurred.

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Certain research and development costs are related to performance on grant contracts.

(ab) Stock-Based Compensation

The Company accounts for share-based awards granted to employees and non-employees under the method prescribed by ASC 718-10, Stock Compensation ( Note 13 ).

(aa) Stock-Based Compensation

The Company accounts for all share-based compensations costs granted to employees and non-employees under the method prescribed by ASC 718-10, Stock Compensation ( Note 12 ).

Stock-based compensation cost is measured based on the estimated grant date fair value of the award and is recognized as expense over the requisite service period.

The fair value of stock options is estimated using the Black-Scholes option-pricing model.

The Company accounts for forfeitures as they occur.

(ac) Segment Reporting

The Company operates in a single business segment, which is the EV V2G Charging segment.

The following table summarizes the Company’s revenues by geography for the years ended December 31, 2021 and 2020:

Years Ended December 31,

United States $ 3,326,427 $ 3,105,167

United Kingdom 485,628 816,502

Denmark 378,710 288,028

$ 4,190,765 $ 4,209,697

The following table summarizes the Company’s long-lived assets in different geographic locations as of December 31, 2021 and December 31, 2020:

2021 December 31,

Long-lived assets:

United States $ 1,811,607 $ 1,705,201

Denmark 25,664 10,544

$ 1,837,271 $ 1,715,745

NUVVE HOLDING CORP.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The Company makes a determination if an arrangement constitutes a lease at inception, and categorizes the lease as either an operating or finance lease.

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The Company has entered into leases for building facilities and vehicles.

The Company’s leases have remaining contractual terms of up to 10 years, some of which have options to extend the lease.

The Company’s leases have contractual terms of up to 10 years, some of which have options to extend the lease.

For purposes of calculating operating lease liabilities, lease terms are deemed not to include options to extend the lease renewals until it is reasonably certain that the Company will exercise that option.

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Operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term.

As most of the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

The Company uses the implicit rate when readily determinable.

Lease terms may include options to extend or terminate the lease when it is reasonably certain that the company will exercise that option.

Lease expense is primarily recognized on a straight-line basis over the lease term.

The Company has lease agreements with lease and non-lease components, which are combined for certain assets classes.

As the implicit rate on most of the Company's leases are not reasonable determinable, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

NUVVE HOLDING CORP.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(ba) Recently adopted accounting pronouncements

In July 2021, FASB issued Accounting Standards Update (“ASU 2021-05”), Leases (Topic 842):

Lessors—Certain Leases with Variable Lease Payments .

ASU 2021-05 provides that a lessor should classify and account for a lease with variable lease payments that do not depend on an index or a rate as an operating lease if both of the following criteria are met:

(1) the lease would’ve been classified as a sales-type lease or a direct-financing lease in accordance with the lease classification guidance in Topic 842, and (2) the lessor would’ve otherwise recognized a day-one loss.

The classification as operating lease would eliminate recognition of a day-one loss or gain because the lessor does not recognize a net investment in the lease or derecognize the underlying asset.

ASU 2021-05 aligns the lessor lease classification requirements under Topic 842 with the longstanding practice to account for certain leases with variable payments as operating leases.

ASU 2021-05 is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years, with early adoption permitted.

Adopting ASU 2021-05 did not have any material impact on the Company's consolidated financial statement of adoption during the year ended December 31, 2021, and there was no cumulative effect on retained earnings as of January 1, 2021 as a result of adoption of ASU 2021-05 .

Effective January 1, 2021, the Company adopted the new lease accounting guidance in Accounting Standards Update (“ASU”) No.

2016-2, Leases (Topic 842) using the modified retrospective transition approach.

The Company has elected the package of practical expedients permitted in ASC Topic 842 (“ASC 842”).

Accordingly, the Company accounted for its existing operating leases as operating leases under the new guidance, without reassessing (a) whether the contracts contain a lease under ASC 842, (b) whether classification of the operating lease would be different in accordance with ASC 842, or (c) whether the unamortized initial direct costs before transition adjustments (as of December 31, 2020) would have met the definition of initial direct costs in ASC 842 at lease commencement.

As a result of the adoption of the new lease accounting guidance, as of January 1, 2021 (the date of adoption of ASC 842) the Company recorded (a) a lease liability of $ 98,491 , which represents the present value of the remaining lease payments of $ 100,292 , discounted using the Company’s incremental borrowing rate of 10 %, and (b) a right-of-use asset of $ 95,346 , which represents the lease liability of $ 98,491 adjusted for accrued rent of $ 3,145 .

There was no cumulative effect on retained earnings as of January 1, 2021 as a result of adoption of ASC 842.

In August 2020, the Financial Accounting Standards Board ("FASB") issued ASU No.

2020-6 , Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-6”) .

ASU 2020-6 simplifies accounting for convertible instruments by removing major separation models required under current U.S.

Consequently, more convertible debt instruments will be reported as a single liability instrument and more convertible preferred stock as a single equity instrument with no separate accounting for embedded conversion features.

ASU 2020-6 also removes certain settlement conditions required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to be eligible for it.

The ASU also simplifies the diluted earnings per share (EPS) calculation in certain areas.

ASU 2020-6 is effective for public business entities, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years.

Early adoption is permitted for annual reporting periods beginning after December 15, 2020.

The Company early adopted the provisions of ASU 2020-6 effective January 1, 2021, on the modified retrospective transition method, to take advantage of the removal of certain conditions required for equity contracts to qualify for the derivative scope exception.

Adopting ASU 2020-6 did not result in a cumulative impact of adoption as of March 31, 2021.

(bb) Recently issued accounting pronouncements not yet adopted

Company uses the implicit rate when readily determinable.

Lease terms may include options to extend or terminate the lease when it is reasonably certain that the company will exercise that option.

Lease expense is primarily recognized on a straight-line basis over the lease term.

The Company has lease agreements with lease and non-lease components, which are combined for certain assets classes.

(ac) Recently adopted accounting pronouncements

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) – Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”).

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This update is effective for fiscal years beginning after December 15, 2022, with early adoption permitted.

The Company is currently evaluating the impact of the new guidance on its consolidated financial statements.

The Company will adopt the guidance effective beginning January 1, 2023.

The Company has completed its assessment of the guidance and has concluded that it will not have a material impact on its consolidated financial statements.

(ad) Recently issued accounting pronouncements not yet adopted

None applicable

NUVVE HOLDING CORP.

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The disclosures below discuss the Company’s material revenue contracts.

The following table provides information regarding disaggregated revenue based on revenue by service lines for the years ended December 31:

The following table provides information regarding disaggregated revenue:

Years Ended December 31,

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Grants 459,427 1,270,138

Revenue recognized at point in time:

Products 4,129,246 2,123,500

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Total $ 1,221,497

During the year ended December 31, 2021, the Company recognized $ 358,161 of product revenue related to contracts with customers for which the Company determined that control of the equipment transferred to that customer.

Related to the finance receivables, during the year ended December 31, 2022, the Company recognized $ 609,860 of product revenue related to contracts with customers for which the Company determined that control of the DC Charger transferred to that customer.

Of this amount, $ 320,988 was recorded within accounts receivable in the consolidated balance sheet as the Company expects to collect it in the short term.

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This amount is a long-term financing receivable recorded in the consolidated balance sheet.

The Company operates in a single business segment, which is the EV V2G Charging segment.

The following table summarizes the Company’s revenues by geography:

Years Ended December 31,

United States $ 4,839,561 $ 3,326,427

United Kingdom 195,550 485,628

Denmark 338,272 378,710

$ 5,373,383 $ 4,190,765

The following table summarizes the Company’s intangible assets and property, plant and equipment in different geographic locations:

2022 December 31,

United States $ 1,795,267 $ 1,811,607

United Kingdom 1,335 —

Denmark $ 181,982 $ 25,664

$ 1,978,584 $ 1,837,271

NUVVE HOLDING CORP.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note 4 – Fair Value Measurements

The following are the liabilities measured at fair value on the consolidated balance sheet at December 31, 2021 using quoted price in active markets for identical assets (Level 1);

The following are the liabilities measured at fair value on the consolidated balance sheet at December 31, 2022 and December 31, 2021, using quoted price in active markets for identical assets (Level 1);

significant other observable inputs (Level 2);

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Private warrants $ — $ — $ 2,000 $ 2,000 $ 864,000

Stonepeak and Evolve unvested warrants $ — $ — $ — $ — $ 8,677,000

Institutional/Accredited Investor Warrants $ — $ — $ 218,884 $ 218,884 $ 2,445,462

Derivative liability - non-controlling redeemable preferred shares $ — $ — $ 359,225 $ 359,225 $ 152,723

Total recurring fair value measurements $ — $ — $ 580,109 $ 580,109 $ 12,139,185

Quoted Prices

Markets for Identical

Assets Level 2:

Inputs Level 3:

Inputs Total at December 31,

2021 Total Gains (Losses) For The Year Ended December 31, 2021

Recurring fair value measurements

Private warrants $ — $ — $ 866,000 $ 866,000 $ 387,228

Stonepeak and Evolve unvested warrants $ — $ — $ 8,677,000 $ 8,677,000 $ ( 699,628 )

Derivative liability - non-controlling redeemable preferred shares $ — $ — $ 511,948 $ 511,948 $ ( 14,342 )

Total recurring fair value measurements $ — $ — $ 10,054,948 $ 10,054,948 $ ( 326,742 )

The following is a reconciliation of the opening and closing balances for the liabilities related to the private warrants ( Note 11 ) and derivative liability - non-controlling redeemable preferred shares measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the year ended December 31, 2022:

NUVVE HOLDING CORP.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Private Warrants Non-controlling redeemable preferred shares - derivative liability

Private Warrants Stonepeak and Evolve unvested warrants Institutional/Accredited Investor Warrants Non-controlling redeemable preferred shares - derivative liability

Balance at December 31, 2021 $ 866,000 $ 8,677,000 $ 2,664,346 $ 511,948

Assumed at closing of merger 1,253,228 —

Initial fair value

Total (gains) losses for period included in earnings $ ( 387,228 ) $ 14,342

Balance at Total (gains) losses for period included in earnings ( 864,000 ) ( 8,677,000 ) ( 2,445,462 ) ( 152,723 )

Balance at December 31, 2022 $ 2,000 $ — $ 218,884 $ 359,225

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term of 3.2 years, risk free rate of 4.2 %, no dividends, volatility of 67.0 %, and strike price of $ 11.50 .

The fair value of the level 3 Private Warrants was estimated at December 31, 2021 using the Black-Scholes model which used the following inputs:

term of 4.2 years, risk free rate of 1.2 %, no dividends, volatility of 54.0 %, and strike price of $ 11.50 .

The fair value of the level 3 Institutional/Accredited Investor Warrants was estimated at December 31, 2022 using the Black-Scholes model which used the following inputs:

term of 5.1 years, risk free rate of 3.97 %, no dividends, volatility of 62.0 %, and strike price of $ 0.50 .

The fair value of the level 3 derivative liability - non-controlling redeemable preferred shares are estimated at December 31, 2022 using the M onte Carlo Simulation model which used the following inputs:

terms range from 1.6 years to 7.0 years, risk free rate of 4.0 %, no dividends, volatility of 63.0 % and probability of redemptions triggered of 75.0 %.

NUVVE HOLDING CORP.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The fair value of the level 3 derivative liability - non-controlling redeemable preferred shares are estimated at December 31, 2021 using the M onte Carlo Simulation model which used the following inputs:

terms range from 3.0 years to 7.0 years, risk free rate of 1.40 %, no dividends, volatility of 53.0 % and probability of redemptions triggered of 75.0 %.

There were no transfers between Level 1 and Level 2 of the fair value hierarchy in 2022 and 2021.

Cash, accounts receivable, accounts payable, and accrued expenses are generally carried on the cost basis, which management believes approximates fair value due to the short-term maturity of these instruments.

The following table presents the significant unobservable inputs and valuation methodologies used for the Company’s fair value measurements of non-recurring (level 3) Stonepeak and Evolve warrants and securities purchase agreement to purchase shares of the Company’s common stock (see Note 12 for details) at the date of issuance of May 17, 2021:

The following table presents the significant unobservable inputs and valuation methodologies used for the Company’s fair value measurements of non-recurring (level 3) unvested Stonepeak and Evolve unvested warrants at December 31, 2022:

Series C Unvested Warrants Series D Unvested Warrants Series E Unvested Warrants Series F Unvested Warrants

Fair value (in millions) $ 0.0 $ 0.0 $ 0.0 $ 0.0

Valuation methodology Monte Carlo Simulation & Black Scholes Monte Carlo Simulation & Black Scholes Monte Carlo Simulation & Black Scholes Monte Carlo Simulation & Black Scholes

Term (years) 8.40 8.40 8.40 8.40

Risk free rate 3.9 % 3.9 % 3.9 % 3.9 %

Exercise price $ 15.0 $ 20.0 $ 30.0 $ 40.0

Volatility 56.0 % 56.0 % 56.0 % 56.0 %

Capital expenditure forecast (in millions) $ 125.0 $ 250.0 $ 375.0 $ 500.0

Probability of warrants vesting (a) — % — % — % — %

__________________

(a) During the second quarter ended June 30, 2022, the Company significantly lowered its forecast of Levo's capital deployments due to the passage by the United States Congress of the Infrastructure Investment and Jobs Act bill, and the related unveiling of the Environmental Protection Agency’s 2022 Clean School Bus rebates.

The resulting lower forecast of capital deployments reduced the probabilities of the future vesting of the unvested warrants.

Series C Unvested Warrants Series D Unvested Warrants Series E Unvested Warrants Series F Unvested Warrants

Fair value (in millions) $ 3.2 $ 2.4 $ 1.7 $ 1.3

Valuation methodology Monte Carlo Simulation & Black Scholes Monte Carlo Simulation & Black Scholes Monte Carlo Simulation & Black Scholes Monte Carlo Simulation & Black Scholes

Term (years) 9.40 9.40 9.40 9.40

Risk free rate 1.5 % 1.5 % 1.5 % 1.5 %

Exercise price $ 15.0 $ 20.0 $ 30.0 $ 40.0

Volatility 54.0 % 54.0 % 54.0 % 54.0 %

Capital expenditure forecast (in millions) $ 125.0 $ 250.0 $ 375.0 $ 500.0

Probability of warrants vesting 90.7 % 75.8 % 63.8 % 54.5 %

The following table presents the significant unobservable inputs and valuation methodologies at December 31, 2021 used for the Company’s fair value measurements of non-recurring (level 3) Stonepeak and Evolve warrants and securities purchase agreement to purchase shares of the Company’s common stock at the date of issuance of May 17, 2021:

Series B Warrants Series C Warrants Series D Warrants Series E Warrants Series F Warrants Options

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Probability of warrants vesting 100.0 % 96.9 % 87.7 % 78.2 % 69.9 % N/A

NUVVE HOLDING CORP.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note 5 - Derivative Liability - Non-Controlling Redeemable Preferred Stock

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Separation of the redemption features as a derivative liability is required because its economic characteristics and risks of the redemption features are considered more akin to a debt instrument, and therefore, not considered to be clearly and closely related to the economic characteristics and risks of the redeemable preferred stock host instrument.

The economic characteristics of the redemption features are considered more akin to an debt instrument because the minimum redemption value could be greater than the face amount of the preferred stock, the redemption features are contingently exercisable, and the preferred stock carry a fixed mandatory dividend.

The economic characteristics of the redemption features are considered more akin to debt instrument because the minimum redemption value could be greater than the face amount of the preferred stock, the redemption features are contingently exercisable, and the preferred stock carry a fixed mandatory dividend.

Accordingly, the Company has recorded an embedded derivative liability representing the estimated fair value of the right of the holders to exercise their redemption option upon the occurrence of a redemption event.

1 unchanged sentence

For additional information on the non-controlling redeemable preferred stock, see Note 18 .

NUVVE HOLDING CORP.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The following table displays the fair value of derivatives by balance sheet line item at December 31, 2021 and December 31, 2020:

The following table displays the fair value of derivatives by balance sheet line item:

December 31, 2022 December 31, 2021

1 unchanged sentence

Derivative liability - non-controlling redeemable preferred shares $ 359,225 $ 511,948

Note 6 – Investment in Dreev

In October 2018, the Company entered into a Cooperation Framework Agreement (CFA) and in February 2019, the Company invested in an enterprise (the “Investment”) with EDF Pulse Croissance Holding (“EDF”), a related party (see Note 1 6 ), in which the companies incorporated an entity under the name of Dreev S.A.S., a société par actions simplifiée, organized in France (“Dreev”) in order to jointly develop and market V2G products in France, the UK, Belgium, and Italy (the “G4”).

The Company licensed certain of its patents, know-how, and software copyrights (the “IP”) to Dreev to develop and commercialize the IP in the G4, with a promise to transfer the patents to Dreev in the future, in exchange for an initial 49 % ownership stake in Dreev.

Under the CFA, EDF has a call option to the ownership interest held by Nuvve under certain circumstances, and Nuvve has a put option on its ownership interest under certain circumstances.

The Company determined that Dreev is a VIE;

however, the Company determined that it was not the primary beneficiary of and therefore did not control Dreev.

Although the Company did not maintain control over Dreev, it determined it was able to exercise significant influence concerning the Investment.

Hence, the Company initially accounted for the Investment on the equity method of accounting.

In October 2019, the Company sold 36 % of its 49 % equity interest in Dreev to EDF.

The sale reduced the Company’s equity ownership in Dreev to approximately 13 %.

Accordingly, the Company discontinued accounting for its investment in Dreev under the equity method at that time, as the Company was no longer able to exercise significant influence over the operations of Dreev.

Commencing in October 2018 and continuing through August 2020, the Company performed consulting services to Dreev related to transferring the IP, software development, and operations of Dreev.

The consulting services were zero fo r the year ended December 31, 2021.

The consulting services were $ 278,887 f or the year ended December 31, 2020.

The consulting services were provided to Dreev at the Company’s cost and is recognized, net of consulting costs, as other income, net in the consolidated statements of operations.

Note 6 – Investments

The Company accounts for its 13 % equity ownership in Dreev as an investment in equity securities without a readily determinable fair value subject to impairment.

The Company has a consulting services agreement with Dreev related to software development and operations.

The consulting services were zero fo r the years ended December 31, 2022 and December 31, 2021.

In accordance with an advanced subscription agreement dated June 6, 2022, the Company invested $ 1.0 million in Switch, a nonpublic entity incorporated and registered in the United Kingdom through an advance subscription agreement for a future equity ownership expected to be more or less than 5 % subject to final valuations.

Switch will automatically award the Company the equity ownership with conversion shares in equity upon its completion of either a financing round, company sale or IPO, or dissolution event.

The Company accounts for the investment as an investment in equity securities without a readily determinable fair value subject to impairment.

The Company and Switch intend to collaborate in the future to integrate technologies for the advancement of V2G.

NUVVE HOLDING CORP.

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Note 7 – Account Receivables, Net

The following tables summarizes the Company's accounts receivable on the consolidated balance sheets at December 31, 2021 and 2020:

The following tables summarizes the Company's account receivables:

As of December 31,

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Balance December 31, 2021

Provision ( 63,188 )

Write-off 4,354

Balance December 31, 2022

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Total $ 11,551,831 $ 11,118,188

__________________

(1) As of December 31, 2021, the Company has taken delivery of ten school buses it has committed to purchase from the manufacturer within one year from the purchase order date of May 26, 2021.

NUVVE HOLDING CORP.

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Note 9 – Property, Plant and Equipment

The following table summarizes the Company’s property, plant and equipment balance at December 31, 2021 and 2020:

As of December 31,

Computers & Servers $ 105,499 $ 1,426

Vehicles 168,862 156,745

Office furniture and equipment 161,771 —

Others 6,050 —

The following table summarizes the Company’s property, plant and equipment balance:

Useful Lives As of December 31,

Computers & servers 1 year to 3 years $ 130,417 $ 105,499

Vehicles 5 years to 7 years 139,788 168,862

Office furniture and equipment 3 years to 5 years 326,613 161,771

DC Chargers (1) 5 years to 7 years 256,685 6,050

Total 853,503 442,182

3 unchanged sentences

Depreciation expense $ 150,099 $ 27,280

__________________

(1) Represents DC Charges temporary loan out to customer while their DC Charges being repaired.

Note 10 – Intangible Assets

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note 11 – Debt

The following is a summary of debt as of December 31, 2021 and 2020 :

2021 December 31,

6 % Senior Secured Convertible Debenture

$ — $ 4,000,000

Payroll Protection Plan loan — 492,100

discount on convertible debenture — ( 198,046 )

Total debt - current $ — $ 4,294,054

6 % Senior Secured Convertible Debenture

Concurrently with the execution of the Merger Agreement between Nuvve Corp., the Company and Newborn ( Note 2 ), on November 12, 2020, entered into a 6 % Senior Secured Convertible Debenture (the “Debenture” or “Bridge Loan”) and a related Securities Purchase Agreement, whereby Nuvve received a loan in the amount of $ 4,000,000 from a single investor (the “Investor”).

The Bridge Loan was funded on November 17, 2020, and the Company received net proceeds of $ 3,736,435 , after deduction of issuance costs of $ 263,565 , which were recorded as debt discount.

The maturity date of the Bridge Loan was May 17, 2021.

Interest on the Bridge Loan of 6 % per annum was due at maturity or conversion of the Note.

At the consummation of the Business Combination and the related PIPE financing, the principal and interest earned on the Bridge Loan was automatically converted into shares of common stock of the Company based on a conversion price of $ 1.56 , which was exchanged in the Business Combination transaction for shares of the Company.

The Debenture was collateralized by all assets of the Company and each Subsidiary pursuant to the Security Agreement, dated as of November 17, 2020 between the Company, the Subsidiaries of the Company and the Investor.

Interest expense on the Debenture for the year ended December 31, 2021 is $ 52,000 .

There was no interest expense on the Debenture for the year ended December 31, 2020.

Additionally, a beneficial conversion feature interest expense charge of $ 427,796 was recorded resulting from the conversion of the Bridge Loans.

Convertible Notes Payable

Beginning in July 2018 and at various dates thereafter, the Company issued convertible notes payable ("Notes").

The Notes accrued interest at 5 % per annum.

The Notes were due at various dates ranging from January 31, 2019 to December 1, 2021 (Maturity Dates) (if called) or earlier upon the closing of a qualified next equity financing, as defined in the agreement ("Next Equity Financing"), or an IPO or liquidation event.

In the event of a Next Equity Financing, the Notes balance, including accrued interest, would convert into shares of common or preferred stock issued in connection with the financing, at the lower of a price equal to (a) 80 % of the price paid by investors participating in the Next Equity Financing or (b) a fixed dollar amount stated in the Notes contract divided by the fully diluted shares outstanding.

In the event of conversion at maturity, a liquidation event or an IPO, the Notes balance, including accrued interest, would be converted to equity securities at a conversion rate based on a fixed dollar amount stated in the Notes contract divided by the fully diluted shares outstanding.

On November 17, 2020, the Company entered into the 6 % Senior Secured Convertible Debenture, which met the definition of a Next Equity Financing.

Accordingly, as of November 17, 2020, the total principal and accrued interest on the Notes then outstanding were converted into a total of 1,529,225 shares of the Company's common stock.

As a result, at both December 31, 2021 and December 31, 2020, the outstanding balance on the Notes was zero .

The Next Equity Financing conversion options were identified as redemption features for accounting purposes.

Accordingly, the redemption feature was bifurcated and recorded at estimated fair value.

Since the Notes converted in November 2020, no amounts associated with the redemption feature are reflected in the consolidated balance sheets as of December 31, 2021 and December 31, 2020.

Interest expense recognized on the Convertible Notes during the year ended December 31, 2021 was zero .

Interest expense recognized on the Convertible Notes during the year ended December 31, 2020 was $ 271,136 .

NUVVE HOLDING CORP.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

PPP and EIDL Loans

In April 2020, the Company applied for, and in May 2020, the Company received a loan in the amount of $ 482,100 as a part of the Coronavirus Aid, Relief, and Economic Security ("CARES") Act.

The loan is also known as a Payroll Protection Program ("PPP") loan.

The loan had a term of 2 years at an interest rate of 1 % with principal and interest deferred for 6 months.

The loan also was eligible for forgiveness if certain criteria were met.

The Company applied for forgiveness of the PPP loan i n June 2021, and it was fully forgiven.

The PPP loan forgiveness has been classified as a gain on extinguishment loan in Other income (expenses) in the consolidated statements of operations.

Interest expense recognized on the PPP loan for the year ended December 31, 2021 was $ 1,607 .

Interest expense recognized on the PPP loan for the year ended December 31, 2020 w as $ 3,214 .

In March 2020, the Company applied for, and in May 2020, the Company received an Economic Injury Disaster Loan Emergency Advance ("EIDL") loan from the Small Business Administration in the amount of $ 149,900 , along with a $ 10,000 advance.

The terms of the loan were as follows:

1) interest rate of 3.75 % per year, 2) repayment over a 30-year term, and 3) a deferment of payment of principal and interest for one year.

On November 16, 2020, the Company repaid the principal and interest balance due on the EIDL loan from the SBA, therefore the balance of the EIDL loan at both December 31, 2021 and December 31, 2020 was zero .

There was no interest expense recognized during the year ended December 31, 2020.

NUVVE HOLDING CORP.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note 11 – Stockholders’ Equity

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Subject to the rights of any holders of any shares of Preferred Stock which may from time to time come into existence and be outstanding, in the event of any liquidation, dissolution, or winding up of the Corporation, whether voluntary or involuntary, the funds and assets of the Corporation that may be legally distributed to the Corporation’s stockholders shall be distributed among the holders of the then outstanding shares of Common Stock pro rata in accordance with the number of shares of Common Stock held by each such holder.

Shelf Registration and At the Market Offering

On April 25, 2022, the Company filed a shelf registration statement (the "Registration Statement") with the Securities and Exchange Commission (the “SEC”) which will allow it to issue unspecified amounts of common stock, preferred stock, warrants for the purchase of shares of common stock or preferred stock, debt securities, and units consisting of any combination of any of the foregoing securities, in one or more series, from time to time and in one or more offerings up to a total dollar amount of $ 100.0 million.

The shelf registration statement was declared effective on May 5, 2022.

The Company believes that it will be able to raise capital by issuing securities pursuant to its effective shelf registration statement.

On May 5, 2022, the Company entered into an at-the-market offering agreement ("Sales Agreement"), with Craig-Hallum Capital Group LLC and Chardan Capital Markets, LLC (the "Agents").

From time to time during the term of the Sales Agreement, the Company may offer and sell shares of common stock having an aggregate offering price up to a total of $ 25.0 million in gross proceeds.

The Agents will collect a fee equal to 3.0 % of the gross sales price of all shares of common stock sold.

Shares of common stock sold under the Sales Agreement are offered and sold pursuant to the Registration Statement

NUVVE HOLDING CORP.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

described above.

During the year ended December 31, 2022, the Company sold 792,882 shares of common stock pursuant to the Sales Agreement at an average price of $ 4.97 per share for aggregate net proceeds of approximately $ 3.8 million.

The Sales Agreement terminated on its terms in June 2022.

Securities Purchase Agreement, Pre-Funded Warrants and Warrants

On July 27, 2022, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with a certain institutional and accredited investor (the “Purchaser”), relating to the issuance and sale of 2,150,000 shares (the “Shares”) of common stock (the “Common Stock”), pre-funded warrants to purchase an aggregate of 1,850,000 shares of Common Stock (the “Pre-Funded Warrants”), and warrants (the “July 2022 Warrants”) to purchase an aggregate of 4,000,000 shares of Common Stock in a registered direct offering (the “July 2022 Offering”).

The offering closed on July 29, 2022.

The offering price for the Shares, and accompanying July 2022 Warrants, was $ 3.50 per Share and the offering price for the Pre-Funded Warrants, and accompanying was $ 3.4999 per Pre-Funded Warrant, which represents the per Share public offering price less $ 0.0001 per share exercise price for each Pre-Funded Warrant.

Each Pre-Funded Warrant has an exercise price of $ 0.0001 per share of common stock, subject to adjustment for stock splits, reverse stock splits, stock dividends and similar transactions.

The July 2022 Warrants have an exercise price of $ 3.75 per share of common stock, subject to adjustment for stock splits, reverse stock splits, stock dividends and similar transactions, and each July 2022 Warrant is exercisable for one share of Common Stock.

The July 2022 Warrants are exercisable beginning six months from the date of issuance and the Pre-Funded Warrants are be exercisable immediately upon issuance.

The Pre-Funded Warrants terminate when fully exercised and the July 2022 Warrants terminate five years from the initial exercisability date.

The aggregate gross proceeds to the Company from the July 2022 Offering were approximately $ 14.0 million and net proceeds were approximately $ 13.1 million, excluding the proceeds, if any, from the exercise of the Pre-Funded Warrants and the Warrants.

The Company used the net proceeds from the July 2022 Offering for working capital and general corporate purposes.

The fair values of the Pre-Funded warrants are recorded in the consolidated balance sheets in additional-paid-in capital in stockholders' equity as the Pre-Funded warrants are indexed to the Company’s common stock and meet the conditions for equity classification.

The Warrants are recorded as a liability in the consolidated balance sheet at fair value, with changes in fair value recorded in the consolidated statement of operations.

See Note 4 for details of changes in fair value of the unvested warrants recorded in the consolidated statement of operations.

Craig-Hallum Capital Group LLC (the “Placement Agent”) was the exclusive placement agent for the Offering.

The July 2022 Offering was made pursuant to the Registration Statement, a base prospectus included as part of the registration statement, and a final prospectus supplement filed with the SEC on July 28, 2022, pursuant to Rule 424(b) under the Securities Act of 1933, as amended.

Placement Agency Agreement

In connection with the July 2022 Offering, the Company also entered into a Placement Agency Agreement with the Placement Agent.

Pursuant to the Placement Agency Agreement, the Company paid to the Placement Agent a fee equal to 6.0 % of the gross proceeds received by the Company in the July 2022 Offering in the form of cash.

Warrants - Stonepeak and Evolve

On May 17, 2021, in connection with the signing of a letter of agreement relating to the formation of a venture, Levo Mobility LLC, the Company issued to Stonepeak and Evolve a ten years warrants to purchase common stock (allocated 90 % to Stonepeak and 10 % to Evolve).

See Note 19 for details.

On May 17, 2021, in connection with the signing of a letter of agreement, relating to the formation of Levo (the "Letter Agreement"), the Company issued to Stonepeak and Evolve ten years warrants to purchase common stock (allocated 90 % to Stonepeak and 10 % to Evolve).

See below for details.

The grant-date fair value of the warrants issued to Stonepeak and Evolve were:

$ 12.8 million, series C:

$ 5.6 million, series D:

$ 4.8 million, series E:

$ 3.8 million and series F:

$ 3.2 million.

The fair values of the warrants are recorded in the consolidated balance sheets in additional-paid-in capital in stockholders' equity as the warrants are indexed to the Company’s common stock and meet the conditions for equity classification, and deferred financing costs.

The carrying amount of the deferred financing costs is reduced as the commitment amount is funded, and the reduction amount is charged to additional-paid-in capital.

As of December 31, 2021, the commitment funded of $ 3.2 million has reduced the deferred financing costs, and charged to additional-paid-in capital.

series B $ 12.8 million, series C $ 5.6 million, series D $ 4.8 million, series E $ 3.8 million and series F $ 3.2 million.

The fair values of the vested warrants are recorded in the consolidated balance sheets in additional-paid-in capital in stockholders' equity as the warrants are indexed to the Company’s common stock and meet the conditions for equity classification.

The unvested warrants are recorded as a liability in the consolidated balance sheet at fair value, with changes in fair value recorded in the consolidated statement of operations as the unvested warrants are deemed not to be indexed to the Company’s common stock.

See Note 4 for details.

• Series B warrants to purchase 2,000,000 shares of the Company’s common stock, at an exercise price of $ 10.00 per share, which are fully vested upon issuance,

• Series C warrants to purchase 1,000,000 shares of the Company’s common stock, at an exercise price of $ 15.00 per share, which are vested as to 50 % of the shares upon issuance and vest as to the remaining 50 % when Levo has entered into contracts with third parties for $ 125 million in aggregate capital expenditures,

NUVVE HOLDING CORP.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

• Series D warrants to purchase 1,000,000 shares of the Company’s common stock, at an exercise price of $ 20.00 per share, which are vested as to 50 % of the shares upon issuance and vest as to the remaining 50 % when Levo has entered into contracts with third parties for $ 250 million in aggregate capital expenditures,

• Series E warrants to purchase 1,000,000 shares of the Company’s common stock, at an exercise price of $ 30.00 per share, which are vested as to 50 % of the shares upon issuance and vest as to the remaining 50 % when Levo has entered into contracts with third parties for $ 375 million in aggregate capital expenditures, and

• Series F warrants to purchase 1,000,000 shares of the Company’s common stock, at an exercise price of $ 40.00 per share, which are vested as to 50 % of the shares upon issuance and vest as to the remaining 50 % when Levo has entered into contracts with third parties for $ 500 million in aggregate capital expenditures.

The warrants may be exercised at any time on or after the date that is 180 days after the applicable vesting date.

Under the terms of the Letter Agreement, Stonepeak and Evolve will fund acquisition and construction costs up to an aggregate conditional capital commitment of $ 750 million.

Stonepeak and Evolve will have the option to upsize their conditional capital commitments when Levo has entered into contracts with third parties for $ 500 million in aggregate conditional capital expenditures.

See Note 19 of our 2021 Form 10-K/A for further description of the terms of the capital commitment with Stonepeak and Evolve.

Warrants - Public and Private

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The Company may redeem the Public Warrants at a price of $ 0.01 per warrant upon 30 days’ notice, only in the event that the last sale price of the ordinary shares is at least $ 16.50 per share for any 20 trading days within a 30 -trading day period ending on the third day prior to the date on which notice of redemption is given, provided there is an effective registration statement and current prospectus in effect with respect to the ordinary shares underlying such Warrants during the 30 day redemption period.

If the Company decides to redeem the warrants as described above, management will have the option to require all holders that wish to exercise warrants to do so on a “cashless basis.” In accordance with the warrant agreement relating to the Public Warrants sold and issued in Newborn’s IPO, the Company is only required to use its best efforts to maintain the effectiveness of the registration statement covering the warrants.

If a registration statement is not effective within 90 days following the consummation of a Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to an available exemption from registration under the Securities Act of 1933, as amended.

In the event that a registration statement is not effective at the time of exercise or no exemption is available for a cashless exercise, the holder of such warrant shall not be entitled to exercise such warrant for cash and in no event (whether in the case of a registration statement being effective or otherwise) will the Company be required to net cash settle the warrant exercise.

If an initial Business Combination is not consummated, the Public Warrants will expire and will be worthless.

If the Company decides to redeem the warrants as described above, management will have the option to require all holders that wish to exercise warrants to do so on a “cashless basis.”

The terms of the Private Warrants are identical to the Public Warrants as described above, except that the Private Warrants are not redeemable so long as they are held by the Sponsor or its permitted transferees.

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Upon closing of the PIPE immediately prior to the closing of the Business Combination ( Note 2 ), the PIPE investors also received 1.9 PIPE Warrants to purchase the Company’s Common Stock for each share of Common Stock purchased.

The PIPE Warrants are each exercisable for one-half of a common

share at $ 11.50 per share and have the same terms as described above for the Public Warrants.

The PIPE Warrants are each exercisable for one-half of a common share at $ 11.50 per share and have the same terms as described above for the Public Warrants.

The PIPE investors received demand and piggyback registration rights in connection with the securities issued to them.

The following table is a summary of the number of shares of the Company’s Common Stock issuable upon exercise of warrants outstanding at December 31, 2021 (there were no warrants outstanding at December 31, 2020):

Warrants Number of

Because the Private Warrants have dissimilar terms with respect to the Company’s redemption rights depending on the holder of the Private Warrants, the Company determined that the Private Warrants are required to be carried as a liability in the consolidated balance sheet at fair value, with changes in fair value recorded in the consolidated statement of operations.

The Private Warrant is reflected as a liability in the consolidated balance sheet as of December 31, 2022 and December 31, 2021 in the amount of $ 2,000 and $ 866,000 respectively, and the change in the fair value of the Private Warrant for the year ended December 31, 2022 and December 31, 2021 of is reflected as a gain of $ 864,000 and $ 387,228 respectively, in the consolidated statements of operations.

NUVVE HOLDING CORP.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The following table is a summary of the number of shares of the Company’s Common Stock issuable upon exercise of warrants outstanding at December 31, 2022:

Warrants Number of Warrants Exercised Number of

Warrants Exercisable Exercise

8 unchanged sentences

Stonepeak/Evolve Warrants - series F 1,000,000 — 500,000 $ 40.00 May 17, 2031

Institutional/Accredited Investor Pre-Funded Warrants 1,850,000 1,850,000 — $ 0.0001 Until Exercised in Full

Institutional/Accredited Investor Warrants 4,000,000 — 4,000,000 $ 3.75 January 29, 2028

16,215,000 1,850,000 12,365,000

NUVVE HOLDING CORP.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The Private Warrant is reflected as a liability in the consolidated balance sheet as of December 31, 2021 in the amount of $ 866,000 and the change in the fair value of the Private Warrant for the year ended December 31, 2021 of is reflected as a gain of $ 387,228 in the consolidated statement of operations.

Unit Purchase Option

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As a result, on April 26, 2021, the Company reacquired 134,449 shares of the Company's Common Stock from EDF Renewables for $ 2,000,000 in cash, at a price per share of approximately $ 14.87 (the average closing price over the five trading days preceding the date of exercise).

P ursuant to a letter agreement dated April 23, 2021, the Company’s Chief Executive Officer and Chief Operating Officer, purchased from Nuvve the 134,499 shares at $ 14.87 per share or a total of approximately $ 2,000,000 d uring the year ended December 31, 2022.

Securities Purchase Agreement

On May 17, 2021, in connection with the signing of a letter of agreement relating to the formation of a venture, Levo Mobility LLC, the Company entered into a Securities Purchase Agreement with Stonepeak and Evolve which provides them from time to time between November 13, 2021 and November 17, 2028, with the option in their sole discretion, to purchase up to an aggregate of $ 250 million in shares of the Company’s common stock at a purchase price of $ 50.00 per share (allocated 90 % to Stonepeak and 10 % to Evolve).

See Note 19 f or details.

The grant-date fair value of the options to purchase shares of the Company’s common stock was $ 12.6 million, and is recorded in the consolidated balance sheets as equity in additional-paid-in capital, as it is indexed to the Company’s common stock and meets the conditions for equity classification, and deferred financing costs.

The carrying amount of the deferred financing costs is reduced as the commitment amount is funded, and the amount is charged to additional-paid-in capital.

On May 17, 2021, in connection with the signing of a Letter Agreement relating to the formation of a venture, Levo, the Company entered into a Securities Purchase Agreement with Stonepeak and Evolve which provides them from time to time between November 13, 2021 and November 17, 2028, with the option in their sole discretion, to purchase up to an aggregate of $ 250 million in shares of the Company’s common stock at a purchase price of $ 50.00 per share (allocated 90 % to Stonepeak and 10 % to Evolve).

In connection with the signing of the Letter Agreement, as reference above, the Company also entered into a Securities Purchase Agreement (the “SPA”) and a Registration Rights Agreement (the “RRA”) with Stonepeak and Evolve.

The SPA includes customary representations and warranties and closing conditions and customary indemnification provisions.

In addition, Stonepeak and Evolve may elect to purchase shares under the SPA on a cashless basis in the event of a change of control of the Company.

NUVVE HOLDING CORP.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note 13 – Stock Option Plan

Note 12 – Stock-Based Compensation

In 2010, the Company adopted the 2010 Equity Incentive Plan (the “2010 Plan”), which provides for the grant of restricted stock awards, stock options, and other share-based awards to employees, consultants, and directors.

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As of December 31, 2022, there is an aggregate of 3,300,000 common shares reserved for issuance under the 2020 Plan.

All options granted to date have a ten years contractual life and vesting terms of four years .

All options granted to date have a ten year contractual life and vesting terms of four years .

In general, vested options expire if not exercised at termination of service.

As of December 31, 2022, a total of 714,529 shares of common stock remained available for future issuance under the 2020 Plan.

Stock-based compensation expense for the years ended December 31, 2021 and 2020 are as follows

Stock-based compensation expense recognized in selling, general, and administrative, and research and development are as follows:

Years Ended December 31,

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Fair value is estimated at the date of grant for employee and nonemployee options.

The following assumptions were used in the Black-Scholes model to calculate the fair value of stock options granted for the year ended December 31, 2021 for the 2010 Plan and the 2020 Plan.

2010 Plan 2020 Plan

The following assumptions were used in the Black-Scholes option pricing model to calculate the fair value of stock options granted for the year ended December 31, 2022 the 2020 Plan.

Expected life of options (in years) (1) 6.1

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Therefore, this estimate is based on the average volatility of certain public company peers within the Company’s industry.

The following is a summary of the stock option activity under the 2010 Plan, as converted to the Company’s shares due to Reverse Recapitalization, for the year ended December 31, 2021:

The following is a summary of the stock option activity under the 2010 Plan, as converted to the Company’s shares due to the Reverse Recapitalization, for the year ended December 31, 2022:

Shares Weighted-

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The weighted-average grant-date fair value of options granted during the year ended December 31, 2021 was $ 4.06 .

There were no options granted during the year ended December 31, 2022.

The following is a summary of the stock option activity under the 2020 Plan for the year ended December 31, 2022:

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During the year ended December 31, 2021, 1,640,000 options were modified to lower the exercise price by $ 0.60 per share, which will result in $ 246,000 of incremental compensation cost to be recognized over the remaining vesting period.

The amount of additional compensation expense for the year ended December 31, 2021, was $ 62,449 .

The amount of additional compensation expense for the year ended December 31, 2022 and December 31, 2021, respectively, was $ 68,049 and $ 62,449 , respectively.

Other Information:

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No amounts relating to the 2010 Plan or 2020 Plan have been capitalized.

Compensation cost is recognized over the requisite service period based on the fair value of the options.

A summary of the status of the Company’s nonvested restricted stock units as of December 31, 2021, and changes during the year ended December 31, 2022, is presented below:

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Nonvested at December 31, 2021

353,817 11.00

Granted 503,390 3.07

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Nonvested and Outstanding at December 31, 2022

353,817 11.00

As of December 31, 2022, there was $ 1,830,932 of total unrecognized compensation cost related to nonvested restricted stock.

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Note 13 – Income Taxes

Income tax provision for the years ended December 31, 2021 and 2020 is summarized as follows:

Income (loss) before taxes includes the following components:

Years Ended December 31,

United States $ ( 22,719,272 ) $ ( 74,262,131 )

Foreign ( 1,837,434 ) ( 354,181 )

Total income (loss) before income taxes ( 24,556,706 ) ( 74,616,312 )

Income tax expense is summarized as follows:

Years Ended December 31,

Federal $ — $ —

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Deferred income tax expense $ — $ —

Provision for income tax $ 1,000 $ 1,000

The Company uses the liability method of accounting for income taxes.

Under the liability method, deferred taxes are determined based on differences between the financial statement and tax bases of assets and liabilities using enacted tax rates.

As of December 31, 2021, the Company had federal net operating loss carryforwards of approximately $ 36,920,000 and state net operating loss carryforwards of approximately $ 19,084,000 .

Of the federal net operating loss carryforwards, $ 3,070,000 will begin to expire in 2034 , and the remainder do not expire.

The state net operating loss carryforwards will begin to expire in 2034 .

Pursuant to Internal Revenue Code Sections 382 and 383, use of the Company’s net operating loss and credit carryforwards may be limited if a cumulative change in ownership of more than 50% occurs within any three-year period since the last ownership change.

The Company believes that there has not been a change in control under these Sections.

However, the Company does not anticipate performing a complete analysis of the limitation on the annual use of the net operating loss and tax credit carryforwards until the time that it projects that it will be able to utilize these tax attributes.

Significant components of the Company’s deferred tax assets (liabilities) are as follows as of December 31:

Income tax expense $ 800 $ 1,000

The reconciliation between the income tax expense and the amount computed by applying the statutory federal tax rate of 21% to loss before taxes is as follows:

Years Ended December 31,

Basis difference in equity investment $ ( 576,523 ) $ ( 660,140 )

Federal income tax benefit at statutory federal tax rate $ ( 5,160,372 ) $ ( 15,669,426 )

State income tax, net of federal benefit ( 823,890 ) ( 776,843 )

Noncontrolling interest 113,157 449,037

Stock compensation 624,065 452,444

Change in fair value of warrants ( 2,517,157 ) 65,604

162(m) excess compensation — 237,247

Change in valuation allowance 7,666,631 9,413,411

Finance costs 54,802 5,643,259

Other 43,564 186,267

Income tax expense $ 800 $ 800 $ 1,000

Significant components of the Company’s deferred tax assets (liabilities) are as follows:

NUVVE HOLDING CORP.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Years Ended December 31,

Equity investment $ ( 489,911 ) $ ( 576,523 )

Accrued liabilities and other 1,118,256 1,007,644

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Lease liabilities 1,389,893 845,240

Research and experimental expenditures 1,507,144 —

Net operating losses 15,772,670 9,953,429

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Net deferred tax assets (liabilities) $ — $ —

A valuation allowance of $ 10,384,550 as of December 31, 2021, has been established against the Company’s deferred tax assets as realization of such assets is uncertain.

A s of December 31, 2022, the Company had federal net operating loss carryforwards of approximately $ 59,202,000 and state net operating loss carryforwards of approximately $ 28,125,000 .

Of the federal net operating loss carryforwards, $ 3,070,000 will begin to expire in 2034, and the remainder do not expire.

The state net operating loss carryforwards will begin to expire in 2034.

The Company believes that there has not been a change in control under these Sections.

A valuation allowance of $ 18,051,182 as of December 31, 2022, has been established against the Company’s deferred tax assets as is more likely than not such assets will be realized.

The valuation allowance increased by $ 7,666,632 during the year ended December 31, 2022.

The Company’s effective tax rate is different from the federal statutory rate of 21% due primarily to operating losses that receive no tax benefit as a result of a valuation allowance recorded for such losses.

In assessing if the deferred tax assets will be realized, the Company considers whether it is probable that some or all of the deferred tax assets will not be realized.

In determining whether the deferred taxes are realizable, the Company considers the period of expiration of the tax asset, historical and projected taxable income, and tax liabilities for the tax jurisdiction in which the tax asset is located.

Valuation allowances are provided to reduce the amounts of deferred tax assets to an amount that is more likely than not to be realized based on an assessment of positive and negative evidence, including estimates of future taxable income necessary to realize future deductible amounts.

As of December 31, 2022, the Company does not have any unrecognized tax benefits related to various federal and state income tax matters.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The reconciliation between the income tax provision and the amount computed by applying the statutory federal tax rate of 21% to income is as follows:

Years Ended December 31,

Federal income tax at statutory rate $ ( 5,660,056 ) $ ( 1,025,668 )

State income tax, net of federal benefit ( 776,843 ) ( 177,245 )

Stock compensation 452,444 180,050

162(m) excess compensation 237,247 —

Change in valuation allowance 5,643,259 869,487

Other 104,949 154,376

Income tax expense $ 1,000 $ 1,000

NUVVE HOLDING CORP.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note 14 – Net Loss Per Share Attributable to Common Stockholders

The following table sets forth the calculation of basic and diluted net loss per share attributable to common stockholders during the years ended December 31, 2021 and 2020:

The following table sets forth the calculation of basic and diluted net loss per share attributable to common stockholders:

Years Ended December 31,

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Stonepeak and Evolve options 5,000,000 4,191,176

Convertible notes payable — 145,551

Institutional/Accredited Investor Warrants 1,698,630 —

Total 20,626,830 16,959,978

Note 15 – Related Parties

At March 31, 2020, the Company had accrued compensation payable to an officer and director totaling $ 471,129 .

On August 11, 2020, the Board of Directors of the Company approved the conversion of the compensation payable into a convertible note ( Note 11 ).

On November 17, 2020, convertible note was converted to common stock ( Note 11 ).

As described in Note 6 , the Company holds equity interests in and provides certain consulting services to Dreev, an entity in which a stockholder of the Company owns the other portion of Dreev’s equity interests.

During 2020, the Company engaged a stockholder for consulting services.

During the years ended December 31, 2021 and 2020 no amounts were paid to the stockholder for these services.

As of December 31, 2021 and 2020, there was zero and $ 42,500 , respectively, due to the stockholder is included in accounts payable in the accompanying consolidated balance sheets.

During the year ended December 31, 2021, the Company recognized re venue of $ 399,620 from an entity that is an investor in the Company.

During the year ended December 31, 2020, the Company recognized revenue of $ 621,330 from the same entity that is an investor in the Company.

The consulting services were zero fo r the years ended December 31, 2022 and December 31, 2021.

During the year ended December 31, 2022, the Company recognized re venue of $ 40,500 from an entity that is a stockholder of the Company .

During the year ended December 31, 2021, the Company recognized revenue of $ 399,620 from the same entity that is a stockholder in the Company.

The Company had a balance of accounts receivable of zero each at December 31, 2022 and December 31, 2021, from the same entity that is an investor in the Company.

Equity Forward Purchase

Pursuant to a letter agreement dated April 23,2021, the Company’s Chief Executive Officer and Chief Operating Officer committed to purchase from the Company, and the Company committed to sell to them, 134,499 shares of the Company’s common stock for $ 14.87 per share or a total of $ 2,000,000 .

The parties are committed to purchase/sell the shares on or before April 23, 2022.

Equity Purchase

The Company’s Chief Executive Officer and Chief Operating Officer purchased 134,499 shares of the Company’s common stock for $ 14.87 per share or a total of approximately $ 2,000,000 on June 2022.

This was pursuant to a letter agreement dated April 23, 2021.

NUVVE HOLDING CORP.

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Also, the agreements generally require the Company to pay real estate taxes, insurance, and repairs.

Main Office Lease

On May 16, 2021, the Company entered into a ten years lease for an additional 10,250 rentable square feet for its main office facilities in San Diego, California.

On May 16, 2021, the Company entered into a ten year lease for an additional 10,250 rentable square feet for its main office facilities in San Diego, California.

The lease terms include 3 % annual fixed increases in the base rental payment.

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The lease has been classified as an operating lease and included in the lease tables and the related disclosures below.

Supplemental unaudited consolidated balance sheet information related to leases is as follows:

Classification December 31, 2021

On November 3, 2021, the Company entered into an amendment of its Main Office Lease to include an additional 4,811 rentable square feet in the suite adjoining its main office facilities in San Diego, California.

The lease term will run concurrently with the main office lease which commenced in December 2021.

The lease terms include 3 % annual fixed increases in the base rental payment.

The lease also requires the Company to pay operating expenses such as utilities, real estate taxes, insurance, and repairs.

The lease term commenced on April 15, 2022, and the Company will receive two months of rental abatement to the base rent.

The Company was required to provide an additional letter of credit in the amount of $ 100,000 to the landlord upon commencement of the lease, and this amount is recorded as restricted cash.

In July 2022, the Company entered into a lease agreement in Westland, Michigan for 10,000 square feet of warehouse space for the purpose of having its own controlled warehouse facility for its finished inventories.

The term of the lease is 36 months with a fixed rent of $ 5,625 per month.

There is an option to renew the lease for an additional 36 months, and it is probable that the Company will exercise the renewal option.

There is no option to purchase the premises at lease termination.

Supplemental consolidated balance sheet information related to leases is as follows:

Classification December 31, 2022 December 31, 2021

Operating lease assets Right-of-use operating lease assets $ 5,305,881 $ 3,483,042

Finance lease assets Property, plant and equipment, net 25,664

Finance lease assets Property and equipment, net 18,467 25,664

Total lease assets $ 5,324,348 $ 3,508,706

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Total lease liabilities $ 5,934,639 $ 3,509,649

NUVVE HOLDING CORP.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The components of lease expense are as follows:

Year Ended December 31,

Year Ended December 31, Year Ended December 31,

Classification 2022 2021

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Total lease expense $ 818,924 $ 226,346

NUVVE HOLDING CORP.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Operating Lease Finance Lease

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interest ( 2,397,690 ) ( 3,205 )

Total lease obligations $ 3,483,267 $ 26,382

Total lease liabilities $ 5,914,496 $ 20,143

Lease term and discount rate:

December 31, 2021

December 31, 2022 December 31, 2021

Weighted-average remaining lease terms (in years):

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Other Information:

Years Ended December 31,

Years Ended December 31, Years Ended December 31,

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from operating leases $ 202,844 $ 100,292

Operating cash flows from finance leases $ 3,636

Operating cash flows from finance leases related to interest expense $ 2,248 $ 3,636

Financing cash flows from finance leases $ 9,691 $ 5,839

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Leased assets obtained in exchange for new operating lease liabilities $ — $ —

Disclosures related to periods prior to adoption of ASU 2016-02

Rent expenses paid for the year ended December 31, 2020, wa s $ 334,350 .

The minimum annual payments under operating leases as of December 31, 2020 was

NUVVE HOLDING CORP.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

In April 2022, the Company entered into a sublease agreement with certain local San Diego companies to sublease a portion of the Company's 4,811 square foot expansion.

The term of the sublease is six months to twelve months with fixed base rental income ranging from $ 2,250 to $ 14,500 per month.

The sublease has no option for renewal or extension at the end of the sublease term.

Sublease income are as follows:

Year Ended December 31, Year Ended December 31,

Classification 2022 2021

Sublease lease income Other, net $ 143,192 $ —

In 2022, the Company entered into a 10 years master services agreement ("MSA") with a certain school district for FaaS to electrify their school bus fleet.

A statement of work (“SOW”) for engineering, procurement and construction ("EPC") was also executed in conjunction with the MSA.

As part of this SOW, the Company will provide electric vehicle supply equipment ("EVSE") and related warranties, infrastructure engineering and construction, installation of EVSE, and subscription services to Nuvve’s V2G GIVe platform.

The MSA has both lease and non-lease components.

The lease component is the EVSE and non-lease components are the EPCs.

The Company accounted for the lease components as a sale-type lease with the investment in lease of $ 97,054 at December 31, 2022 .

Lease income are as follows:

Year Ended December 31, Year Ended December 31,

Classification 2022 2021

Lease income Products and services $ 99,981 $ —

Interest income Products and services 3,341 —

Total lease income $ 103,322 $ —

NUVVE HOLDING CORP.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note 17 – Commitments and Contingencies

(a) Deferred Compensation

The Company had deferred compensation for two of its founders earned by them during the first five years of the Company's operations, which was payable upon successful completion of a purchase of the Company or an initial public offering.

As a result, the Company was committed to pay one of the founders an amount equivalent to 1 % of the value of the Company as of the date the Merger transaction closed, which amounted to approximately $ 1,548,347 .

The Company is committed to pay the other founder an amount equivalent to 100 % of his current base salary at the date the Merger transaction closed, which amounts to approximately $ 260,000 .

No deferred compensation amount was accrued at December 31, 2020 related to these commitments as they were contingent upon the successful close of the Merger transaction.

The Company recognized $ 1,808,347 in compensation expense related to these payments during the three months ended March 2021.

The deferred compensation was paid to the founders in April 2021.

(b) Legal Matters

The Company is subject to various claims and legal proceedings covering matters that arise in the ordinary course of its business activities, including product liability claims and purchase commitments and contingencies .

(a) Legal Matters

The Company is subject to various claims and legal proceedings covering matters that arise in the ordinary course of its business activities, including product liability claims.

Management believes that any liability that may ultimately result from the resolution of these matters will not have a material adverse effect on the financial condition or results of operations of the Company.

During the year ended December 31, 2021, the Company paid $ 496,666 of costs associated with the departures of former employees.

(b) Research Agreement

Effective September 1, 2016, the Company is party to a research agreement with a third party, which is also a Company stockholder, whereby the third party will perform research activity as specified annually by the Company.

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For each of the years ended December 31, 2022 and 2021, $ 400,000 was paid under the research agreement.

In October 2021, the research agreement was renewed for one year through August 2022.

At December 31, 2021, we have $ 266,667 remaining to be paid under the renewed agreement.

(d) In-Licensing

At December 31, 2022, we have $ 266,667 remaining to be paid under a renewed agreement.

The Company is a party to a licensing agreement for non-exclusive rights to intellectual property which will expire at the later of the date at which the last patent underlying the intellectual property expires or 20 years from the sale of the first licensed product.

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As of December 31, 2022 and December 31, 2021, no royalty expenses had been incurred under this agreement .

In November 2017, the Company executed an agreement ("IP Acquisition Agreement") with the University of Delaware (Seller) whereby all right, title, and interest in the licensed intellectual property was assigned to the Company in exchange for an upfront fee of $ 500,000 and common shares valued at $ 1,491,556 .

The total acquisition cost of $ 1,991,556 was capitalized and is being amortized over the fifteen years expected life of the patents underlying the intellectual property.

Under the terms of the agreement, the Company will pay up to an aggregate $ 7,500,000 in royalties to the Seller upon achievement of milestones, related to the aggregate number of vehicles that have had access to the Company’s GIVe platform system for a period of at least six consecutive months, and for which the Company has received monetary consideration for such access pursuant to a subscription or other similar agreement with the vehicle’s owner as follows:

NUVVE HOLDING CORP.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Milestone Event:

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As of December 31, 2022, no royalty expenses had been incurred under this agreement.

(e) Investment

(d) Investment

The Company is committed to possible future additional contributions to the Investment in Dreev ( Note 6 ) in the amount of $ 270,000 .

(f) Reimbursement of Legal Fees

On October 5, 2020, the Company entered into an agreement with an investor whereby the Company agreed to reimburse the investor for certain legal fees, up to approximately $ 96,000 , associated with a license agreement between the parties.

The reimbursement is payable upon the completion by the Company of an equity financing or the completion of the licensing agreement.

No legal fees have been accrued or paid under this agreement through December 31, 2021.

(g) Purchase Commitments

On July 20, 2021, Nuvve issued a purchase order (“PO”) to a supplier for 250 DC Chargers, for a total amount of $ 13.2 million , with the delivery date specified as the week of November 15, 2021.

However, the supplier subsequently notified Nuvve that it would be unable to meet the contracted delivery date as a result of supply chain issues.

The parties therefore agreed to change the delivery date to on or about December 15, 2021.

On December 23 and December 27, 2021, Nuvve received a partial shipment of 80 of the DC Chargers, for which Nuvve paid $ 3.1 million .

The delivered DC Chargers did not fully conform to required software and hardware specifications.

The supplier is in the process of bringing the delivered DC Chargers into full conformance and the parties are negotiating a revised PO for the delivery of the remaining DC Chargers subject to the original PO.

In the event Nuvve and the supplier are unable to agree to a revised PO, Nuvve believes it has duly terminated the original PO, based on Nuvve's belief that the supplier failed to timely delivery conforming DC Chargers.

The supplier asserts, however, that the original PO was non-cancellable and non-refundable, notwithstanding such alleged breach.

Nuvve believes the supplier’s position does not have merit and Nuvve would defend itself vigorously should any proceeding result from such dispute.

However, the outcome of any such proceeding would be inherently uncertain, and there can be no assurance that Nuvve would prevail.

The amount and/or timing of any liability resulting from such a proceeding is not reasonably estimable at this time.

NUVVE HOLDING CORP.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note 19 – Levo Mobility LLC Entity

Stonepeak and Evolve Initial Term Sheet

On May 17, 2021, the Company entered into a letter agreement (the “Letter Agreement”) with Stonepeak Rocket Holdings LP, a Delaware limited partnership (“Stonepeak”), and Evolve Transition Infrastructure LP, a Delaware limited partnership (“Evolve”), relating to the formation of an entity, Levo Mobility LLC, a Delaware limited liability company.

Pursuant to the Letter Agreement, the parties agreed to negotiate in good faith to finalize and enter into definitive agreements to form an entity, which happened on August 4, 2021.

Under the terms of the Letter Agreement, Levo will utilize the Company’s proprietary V2G technology and the capital from Stonepeak and Evolve to help accelerate the deployment of electric fleets, including zero-emission electric school buses for school districts nationwide through “V2G hubs” and Transportation as a Service ("TaaS").

Also, under the terms of the Letter Agreement, Stonepeak and Evolve will fund acquisition and construction costs up to an aggregate capital commitment of $ 750 million.

Stonepeak and Evolve will have the option to upsize their capital commitments when Levo has entered into contracts with third parties for $ 500 million in aggregate capital expenditures.

In connection with the signing of the Letter Agreement, the Company issued to Stonepeak and Evolve the following ten years warrants (the “Warrants”) to purchase common stock (allocated 90 % to Stonepeak and 10 % to Evolve):

• Series B warrants to purchase 2,000,000 shares of the Company’s common stock, at an exercise price of $ 10.00 per share, which are fully vested upon issuance,

The warrants may be exercised at any time on or after the date that is 180 days after the applicable vesting date.

In connection with the signing of the Letter Agreement, the Company also entered into a Securities Purchase Agreement (the “SPA”) and a Registration Rights Agreement (the “RRA”) with Stonepeak and Evolve.

• Under the SPA, from time to time between November 13, 2021 and November 17, 2028, Stonepeak and Evolve may elect, in their sole discretion, to purchase up to an aggregate of $ 250 million in shares of the Company’s common stock at a purchase price of $ 50.00 per share (allocated 90 % to Stonepeak and 10 % to Evolve).

The SPA includes customary representations and warranties and closing conditions and customary indemnification provisions.

In addition, Stonepeak and Evolve may elect to purchase shares under the SPA on a cashless basis in the event of a change of control of the Company.

• Under the RRA, the Company granted Stonepeak and Evolve demand and piggyback registration rights relating to the sale of the Warrants and the shares of the Company’s common stock issuable pursuant to the Warrants and the SPA.

The Letter Agreement further requires that the Company use its reasonable best efforts to obtain stockholder approval of the issuance of shares of the Company’s common stock under the Warrants and SPA.

On June 30, 2021, the stockholders of the Company, at a special meeting, approved the issuance of shares of the Company’s common stock under the Warrants and SPA.

See Note 12 for detail of the accounting of the Warrants and SPA.

NUVVE HOLDING CORP.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Stonepeak and Evolve Definitive Agreements

On August 4, 2021, the Company formed an entity, Levo Mobility LLC a Delaware limited liability company (“ Levo ,”), with Stonepeak Rocket Holdings LP, a Delaware limited partnership (“Stonepeak”), and Evolve Transition Infrastructure LP, a Delaware limited partnership (“Evolve,” and together with Stonepeak, the “Investors”).

In connection with the Levo formation on August 4, 2021, (the "Formation Date"), the Company’s wholly owned operating subsidiary, Nuvve Corporation (“Nuvve”), Stonepeak and Evolve entered into an Amended and Restated Limited Liability Company Agreement for Levo (the “Levo LLCA”);

the Company and Levo entered into a Development Services Agreement (the “DSA”);

the Company, Stonepeak, Evolve and Levo entered into a Parent Letter Agreement (the “PLA”);

the Company and Stonepeak entered into a Board Rights Agreement (the “BRA”);

and the Company and Levo entered into an Intellectual Property License and Escrow Agreement (the “IP License and Escrow Agreement”).

The terms of the agreements were substantially consistent with the proposed terms set forth in the letter agreement between the parties signed on May 17, 2021.

Pursuant to the Levo LLCA, Stonepeak and Evolve agreed to make capital contributions to Levo in an aggregate amount of up to $ 750.0 million (which may be increased up to $ 1.0 billion) to finance Levo’s business subject to project approval process as outlined under the terms of the definitive agreements.

The Levo LLCA governs the affairs of Levo and the conduct of its business.

The membership interests authorized by the Levo LLCA consist of Class A Common Units, Class B Preferred Units, Class C Common Units and Class D Incentive Units.

On the Formation Date and the signing of the Levo LLCA, Levo issued 510,000 Class A Common Units to the Company, 2,801 Class B Preferred Units to Stonepeak and Evolve, and 490,000 Class C Common Units to Stonepeak and Evolve.

Stonepeak and Evolve agreed to pay to Levo an aggregate purchase price of $ 2.8 million for the Class B Preferred Units and the Class C Common Units.

Stonepeak and Evolve will receive additional Class B Preferred Units for each $ 1,000 in additional capital contributions made by them.

The Class B Preferred Units have an initial liquidation preference of $ 1,000 per unit and are entitled to cumulative preferred distributions at a rate of 8.0 % of the liquidation preference per annum, payable quarterly.

Available cash will be distributed quarterly, first, to the Class B Preferred Unit holders to pay the preferred distributions for such quarter;

second, to the Class B Preferred Unit holders to pay all amounts due and unpaid on such units (including accumulated and unpaid preferred distributions);

third, until the liquidation preference of the Class B Preferred Units is reduced to $ 1.0 , to the both Class B Preferred Unit holders and the Common Unit holders, with the percentage allocation between them varying based on a leverage ratio;

and thereafter, to the Common Unit holders.

Distributions on the Class B Preferred Units in excess of the preferred distributions will reduce the liquidation preference of the Class B Preferred Units.

Until the completion of the first full twelve fiscal quarters after Stonepeak and Evolve have made aggregate capital contributions of at least $ 50.0 million, Levo may elect to pay the preferred distributions in cash or in kind.

The Class D Incentive Units are profits interests intended to provide incentives to certain key employees and service providers of Levo, its members and its affiliates.

The Class D Incentive Unit holders will receive certain distributions from and after the time that the Class B Preferred Unit holders have received a target return on their investment and the Common Unit holders have received a return of their capital contributions.

As of December 31, 2021, no Class D Incentive Units have been issued.

At the earliest to occur of August 4, 2028, a fundamental change (which includes, for example, a change of control of the Company or Nuvve, certain changes in ownership of Levo, a sale of all or substantially all of Levo’s assets, or an initial public offering or direct listing of Levo) (a “Fundamental Change”) or a trigger event (which includes, for example, a failure to pay quarterly distributions or a material breach by the Company of its obligations under the transaction documents) (a “Trigger Event”), Stonepeak will have the option to cause Levo to redeem the Class B Preferred Units in whole or in part from time to time at a redemption price equal to the greater of the liquidation preference, a price based on a 12.5 % internal rate of return, and a price based on a 1.55 multiple on invested capital.

At any time following the earliest to occur of August 4, 2028 and a Trigger Event, Stonepeak has the right to cause a sale of Levo.

In addition, at any time following the earliest to occur of August 4, 2023, the date on which Levo has entered into contracts with third parties to spend at least $ 500.0 million in aggregate capital expenditures, and a Trigger Event, Stonepeak has the right to effect an underwritten initial public offering of Levo.

Levo is managed by a board of managers consisting of nine managers, of whom (i) five were appointed by Nuvve, (ii) for so long as any Class B Preferred Units remain outstanding or Stonepeak owns at least 10.0 % or more of the issued and

NUVVE HOLDING CORP.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

outstanding Common Units, three were appointed by Stonepeak, and (iii) one is an independent manager.

For so long as Evolve owns more than 2.0 % of the issued and outstanding Common Units, Evolve will have the right to designate one person

to act as an observer at all meetings of the board of managers, subject to certain limited exceptions.

Certain specified actions will require the approval of at least one of the Stonepeak managers, the representative of the Class B Preferred Unit holders and/or Evolve.

The Company and its affiliates are required to present to Levo all investment or business opportunities in North America they become aware of and desire to pursue, to the extent such investment or business opportunities are within the scope of, primarily relate to or compete with, Levo’s business, and shall not pursue any such business opportunity, subject to certain exceptions, during the period ending on the earliest to occur of the funding of the full commitment amount (generally $ 750.0 million, subject to increase or decrease in accordance with the Levo LLCA), the end of the commitment period (generally August 4, 2024, subject to reduction or extension in certain circumstances) or a monetization event (including, for example, an underwritten initial public offering or sale of Levo).

The Levo LLCA includes other customary provisions for an agreement of its type, including tag-along rights, a right of first offer on transfers, and drag-along rights.

Under the DSA, the Company or one of its affiliates will provide certain services to Levo and its subsidiaries, including operational, commercial, research and development, engineering, business development, legal, regulatory, accounting, treasury, and finance services.

As payment for the services, for the initial development period commencing on August 4, 2021 and running through the date that Levo has entered into contracts with third parties to spend at least $ 25.0 million, in the aggregate, of capital expenditures relating to qualifying business opportunities, Levo will pay the Company an amount equal to 49.0 % of its budgeted out-of-pocket and general and administrative expenses allocable to the provision of the services, and a fixed monthly general and administrative fee.

After the expiration of the initial development period, Levo will pay the Company an amount equal to 100.0 % of its budgeted out-of-pocket and general and administrative expenses allocable to the provision of the services, and a fixed monthly general and administrative fee.

DSA payments are eliminated upon consolidation.

The DSA may be terminated under certain conditions, including by Levo for convenience upon 30 days’ written notice, by either party upon written notice to the other party upon a material uncured breach of the DSA, by the Company on 90 days’ written notice if no business opportunities have been approved during the commitment period under the Levo LLCA, or by either party upon 30 days’ notice following the earliest of the 3 rd anniversary of Levo’s initial public offering, the 3 rd anniversary of the date the Comapny ceases to own any Levo equity interests, and the 5 th anniversary of the date the Company ceases to have the right to designate a majority of Levo’s board of managers.

The PLA includes, among other provisions, certain restrictive covenants with respect to Levo’s business, including a business opportunities covenant applicable to the Company that is identical to the one in the Levo LLCA described above, and a covenant granting Stonepeak a right of first offer to participate in certain future financing transactions of Levo.

In addition, the Company agreed to reimburse each of Stonepeak and Evolve for a portion of their out-of-pocket expenses incurred in connection with the due diligence, documentation and negotiation of the agreements.

Under the BRA, so long as the Investors beneficially own any Class B Preferred Units or at least 10.0 % of the Company’s common stock, Stonepeak has the right to designate two individuals to act as observers at all meetings of the Company’s board of directors.

In addition, for so long as the Investors beneficially own at least 10.0 % of the Company’s common stock, Stonepeak has the right to designate one individual for appointment as a member of the Company’s board of directors and as a member of one committee of the board of directors (or two committees, if the Investors beneficially own at least 15.0 % of the Company’s common stock, or all committees, if the Investors beneficially own at least 25.0 % of the Company’s common stock).

Any such designee must meet certain qualification requirements.

NUVVE HOLDING CORP.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

IP License and Escrow Agreement

The IP License and Escrow Agreement provides that (i) certain intellectual property of the Company used in Levo’s business will be deposited into escrow, to be released to Levo upon the occurrence of certain specified release events (including, for example, certain circumstances in which the Company ceases to provide the services under the DSA and certain bankruptcy-related events), and (ii) the Company will grant a license to such intellectual property to Levo, which may be exercised solely after the occurrence of one of the specified release events.

If (i) one of the specified release events has occurred, (ii) Stonepeak and Evolve have made capital contributions to Levo of at least $ 1.0 billion in respect of Class B Preferred Units or the commitment period has expired, and (iii) the Company and its

subsidiaries no longer own any equity interests in Levo, from and after such time and for so long as the license subsists and the intellectual property remains proprietary, Levo shall pay the Company (or its successor) a royalty on all vehicle-to-grid net revenue generated by or on behalf of or otherwise attributable to Levo and its affiliates and sublicensees from assets acquired or developed by Levo and its sublicensees.

The foregoing summaries of the Levo LLCA, the DSA, the BRA and the IP License and Escrow Agreement are qualified in their entirety by reference to the text of such agreements.

Please refer to Exhibit 10.17, Exhibit 10.18, Exhibit 10.19, Exhibit 10.20 and Exhibit 10.21 in this Annual Report on Form 10-K for the full text of the agre ements.

Reimbursement of Out-of-Pocket Expenses

As part of the initial transaction agreement, the Company was responsible for the first $ 900,000 of Stonepeak’s out-of-pocket expenses, and the first $ 100,000 of Evolve’s out-of-pocket expenses.

To the extent that the out-of-pocket expenses exceeded those levels, Levo as a separate entity would have borne all excess amounts.

In addition, the Company was responsible for its own Levo related expenses for the first $ 1.0 million, and expenses above those levels will be borne by Levo as a separate entity.

As of December 31, 2021, the Company has incurred and recorded in deferred financing costs $ 1.0 million towards its responsibility for Levo related expenses.

(e) Purchase Commitments

On July 20, 2021, Nuvve issued a purchase order (“PO”) to its supplier for a quantity of DC Chargers, for a total price of $ 13.2 million , with the delivery date specified as the week of November 15, 2021.

However, the supplier subsequently notified Nuvve that it would be unable to meet the contracted delivery date as a result of supply chain issues.

The parties therefore agreed to change the delivery date to on or about December 15, 2021.

As of the end of December 31, 2021, Nuvve received a partial shipment of the DC Chargers, for which Nuvve paid $ 6.3 million .

The delivered DC Chargers did not fully conform to required software and hardware specifications.

In April 2022, the parties agreed to address the technical issues necessary to bring the DC charges into full conformity with specifications, and to amend the mix defined in the original PO for the delivery of the remaining DC Chargers still subject to the original PO.

As of December 31, 2022, the supplier is still in the process of bringing the delivered DC Chargers into full conformance.

No amendments to the original PO have been executed.

To the extent Nuvve and the supplier are unable to align on mutually agreeable terms to resolve the dispute relating to the PO, Nuvve believes it has no obligation to purchase or accept delivery against the PO given that the supplier failed to timely deliver conforming DC Chargers in accordance with the stated PO terms.

The supplier asserts, however, that the original PO was non-cancellable and non-refundable regardless of when in the future the chargers are delivered, and regardless of any non-conformance.

Nuvve believes the supplier’s position does not have merit and Nuvve intends to exercise all available rights and remedies in its defense should any legal proceeding result from such dispute.

On November 2, 2022, Nuvve received a demand for arbitration from its supplier in connection with the dispute.

The outcome of any such proceeding would be inherently uncertain, and the amount and/or timing of any liability or expense resulting from such a proceeding is not reasonably estimable at this time.

NUVVE HOLDING CORP.

12 unchanged sentences

Levo accrues for undeclared and unpaid dividends as they are payable in accordance with the terms of the Certificate of Designations filed with the Secretary of State of the State of Delaware.

At December 31, 2021, Levo had accrued preferred dividends of $ 62,760 on 3,138 issued and outstanding shares of Series B Preferred Stock.

At December 31, 2022, Levo had cumulative unpaid accrued preferred dividends of $ 326,606 on 3,138 issued and outstanding shares of Series B Preferred Stock.

Series B Preferred Stock is not a participating or convertible securities.

7 unchanged sentences

See Note 5 for detail disclosure of the derivative liability.

The redeemable preferred stock has been classified as mezzanine equity and deferred financing costs, and initially recognized at fair value of $ 3,138,000 , the proceeds on the date of issuance.

The redeemable preferred stock has been classified as mezzanine equity, and initially recognized at fair value of $ 3,138,000 , the proceeds on the date of issuance.

This amount has been further reduced by $ 497,606 the fair value of the embedded derivative liability at date of issuance, resulting in an adjusted initial carrying value of $ 2,640,394 .

1 unchanged sentence

The accretion to the carrying value of the redeemable preferred stock is treated as a deemed dividend, recorded as a charge to retained earnings of Levo.

As of December 31, 2021, Levo has accreted $ 261,505 resulting in the carrying value of the the redeemable preferred stock of $ 2,901,899 .

As of December 31, 2022, Levo has accreted $ 645,866 resulting in the carrying value of the redeemable preferred stock of $ 3,547,765 .

NUVVE HOLDING CORP.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The following table summarizes Levo non-controlling interests presented as a separate component of stockholders’ equity on the Company’s consolidated balance sheets at December 31, 2021:

December 31, 2021

net loss attributable to non-controlling interests as of December 31, 2021

The following table summarizes Levo non-controlling interests presented as a separate component of stockholders’ equity on the Company’s consolidated balance sheets:

December 31, 2022 December 31, 2021

net loss attributable to non-controlling interests

$ ( 538,841 ) ( 2,138,272 )

dividends paid or accrued to non-controlling interests as of December 31, 2021

dividends paid or accrued to non-controlling interests

263,846 101,856

Preferred share accretion adjustment 645,866 261,505

Non-controlling interests $ ( 1,448,553 ) $ ( 2,501,633 )

The following table summarizes Levo non-controlling interests presented as a separate component of the Company’s consolidated statements of operations as of December 31, 2021:

December 31, 2021

The following table summarizes Levo non-controlling interests presented as a separate component of the Company’s consolidated statements of operations:

December 31, 2022 December 31, 2021

Net loss attributable to non-controlling interests

1 unchanged sentence

Redeemable Non-controlling Interest Reconciliation — Mezzanine Equity

December 31, 2021

Beginning balance - December 31, 2020

December 31, 2022 December 31, 2021

Beginning balance $ 2,901,899 $ —

Beginning redemption value (at fair value) — 3,138,000

1 unchanged sentence

Adjusted initial carrying value 2,901,899 2,640,394

Deferred finance costs adjustment ( 16,473 )

Preferred share accretion adjustment 645,866 261,505

Ending balance - December 31, 2021

Ending balance

$ 3,547,765 $ 2,901,899

Profits Interests Units (Class D Incentive Units)

In April 2022, Levo issued Class D Incentive Units to certain key employees in the form of profits interests within the meaning of the Internal Revenue Service (“Profits Interests”).

Any future distributions under the Profits Interests will only occur once distributions made to all other member units exceed a threshold amount.

Based on the features of the Profits Interests, the awards are considered stock compensation to be accounted for as equity.

Accordingly, compensation expense for the Profits Interests will be recognized over the vesting period of the awards.

Subject to the grantee not incurring a termination prior to the applicable vesting date, the Incentive Units vest as follows:

(i) 80 % of the Incentive Units will vest in equal 25 % installments on each of the first four (4) anniversaries of the grant date (such that 80 % of the total number of Incentive Units issued to the grantee hereunder will be vested on the fourth anniversary of the Grant Date) and (ii) the remaining 20 % of the Incentive Units will vest upon a Change of Control.

Therefore, the expenses recorded will only reflect the 80 % vesting portion.

During the year ended December 31, 2022, the Company recorded compensation expense, included in selling, general, and administrative, under the Profits Interests of $ 445,479 .

NUVVE HOLDING CORP.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The Company uses the M onte Carlo Simulation model to estimate the fair value of Class D Incentive Units.

Fair value is estimated at the date of grant for employee and nonemployee options.

The following assumptions were used in the M onte Carlo Simulation model to calculate the fair value of Class D Incentive Units granted for the year ended December 31, 2022.

Class D Units

Expected life of Class D Incentive Units (in years) (1) 5.5

Risk-free interest rate (2) 3.02 %

Volatility (3) 69.50 %

__________________

(1) The expected life of options is the average of the contractual term of the Class D Incentive Units and the vesting period.

(2) The risk-free interest rate is based on the yields on U.S.

Treasury debt securities with maturities approximating the estimated life of the options.

(3) Volatility is estimated by management.

As the Company has been a private company for most of its existence, there is not enough historical volatility data related to the Company’s Common stock as a public entity.

Therefore, this estimate is based on the average volatility of certain public company peers within the Company’s industry.

A summary of the status of the Company’s Class D Incentive Units as of December 31, 2021, and changes during year ended December 31, 2022, is presented below:

Shares Weighted-

Average Grant

Date Fair Value($)

Nonvested at December 31, 2021 — —

Granted 250,000 13.28

Cancelled — —

Nonvested and Outstanding at December 31, 2022

250,000 13.28

As of December 31, 2022, there was $ 1,991,555 of total unrecognized compensation cost related to nonvested Class D Incentive Units.

The Company expects to recognize this compensation cost over a remaining weighted-average period of approximately 3.3 years.

Note 19 - Subsequent Events

January 2023 ATM Offering Program

On January 31, 2023, the Company entered into an At the Market Offering Agreement (the “ATM Agreement”) with Craig-Hallum Capital Group LLC (“Craig-Hallum”), as the sales agent (the “Agent”), pursuant to which the Company may offer and sell, from time to time through the Agent, shares of its common stock (the “Shares”), having an aggregate offering price of up to $ 25,000,000 .

The Company will pay the Agent a commission of 3.0 % of the aggregate gross sales prices of the Shares.

The Company reimbursed the Agent for fees and disbursements of its legal counsel in the amount of $ 50,000 .

In January and February 2023, we sold 78,638 shares of common stock pursuant to the ATM Agreement at an average price of $ 1.79 per share for aggregate net proceeds of approximately $ 0.1 million .

February 2023 Registered Direct Offering

On February 17, 2023, the Company entered into a subscription agreement (the “Subscription Agreement”) with a certain institutional and accredited investor, relating to the issuance and sale of 543,478 shares of common stock in a registered direct offering (the “February 2023 Offering”).

The offering price for the shares was $ 0.92 per share of common stock.

The closing of the February 2023 Offering occurred on February 21, 2023.

The aggregate gross proceeds from the February 2023 Offering was approximately $ 0.5 million.

Chardan Capital Markets LLC acted as the placement agent for the February 2023 Offering and received a sales commission of 3.0 % of the gross proceeds.

NUVVE HOLDING CORP.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Sale of Switch Investment

On March 30, 2022, th e Company sold its investment interest in Switch for $ 1.3 million.

The company had invested $ 1.0 million in Switch for an advanced subscription agreement dated June 6, 2022.

See Note 6 for further details.

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 9A. Controls and Procedures