Nuvve Holding Corp. 10-K

Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, our principal executive officer and principal accounting and financial officer, respectively, have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2022. Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. 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, 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. GAAP. 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) 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. Our internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records, in reasonable detail, accurately and fairly reflect our transactions and dispositions of our assets; (ii) provide reasonable assurance our transactions are recorded as necessary to permit preparation of our financial statements in accordance with accounting principles generally accepted in the U.S., and our receipts and expenditures are being made only in accordance with authorizations of our management and our directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets could have a material effect on the financial statements. Our management conducted an evaluation of the effectiveness of the system of internal control over financial reporting based on the framework in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. 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. 65 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. GAAP. 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 . 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, and addressing the accounting of complex financial matters. Remediation Plan As of December 31, 2022, we have taken a number of actions to remediate these material weaknesses, including: • utilizing outside accounting and financial reporting consultants to supplement the Company’s resources in the area of financial close and the accounting implications of complex accounting matters; • engaging SEC compliance and technical accounting consultants to assist in evaluating complex transactions for conformity with the U.S. GAAP; • utilizing outside consultants to perform a comprehensive review of current procedures to identify and assist in implementing controls in conformity with COSO “Internal Control over Financial Reporting - Guidance for Smaller Public Companies” that was published in 2006 and updated in 2013, including the control environment, risk assessment, control activities, information and communication and monitoring; and • 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. 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. The actions that we are taking are subject to ongoing senior management review, as well as audit committee oversight. 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 The effectiveness of any system of internal control over financial reporting, including ours, is subject to inherent limitations, including the exercise of judgment in designing, implementing, operating, and evaluating the controls and procedures, and the inability to eliminate misconduct completely. Accordingly, any system of internal control over financial reporting, including ours, no matter how well designed and operated, can only provide reasonable, not absolute assurances. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. We intend to continue to monitor and upgrade our internal controls as necessary or appropriate for our business, but there can be no assurance that such improvements will be sufficient to provide us with effective internal control over financial reporting. 66 Item 9B. Other Information None. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. None. 67 Part III Item 10. Directors, Executive Officers and Corporate Governance 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 David G. Robson 56 Chief Financial Officer Angela Strand 54 Director Kenji Yodose 40 Director H. David Sherman 75 Director Jon M. 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. Mr. 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. Mr. 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. Mr. 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. Mr. 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. Mr. 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. Mr. 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. Mr. 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. Mr. Smith also served as an officer in the United States Navy from 1989 to 1996. Mr. 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. David G. Robson has served as our Chief Financial Officer since the consummation of the Business Combination. Mr. 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. Mr. Robson has served on the board of directors of Payference, a 68 software business, since February 2020. Mr. 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. Mr. 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. Mr. Robson began his career with the accounting firm Deloitte & Touche LLP. Mr. 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. Directors 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. Ms. La Lande currently serves as Executive Vice President, Global General Counsel and Chief Sustainability and Government Affairs Officer for The Kraft Heinz Company (Nasdaq: KHC). 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. Jon M. Montgomery has served as a member of the Board since the consummation of the Business Combination. Mr. 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. Mr. 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. H. 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. (AMEX: DXF) from January 2018 to August 2019, Kingold Jewelry Inc. (Nasdaq: KGJI) from February 2011 to May 2016, China HGS Real Estate Inc. (Nasdaq: 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. Sherman is 69 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. Ms. 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: RIDE). 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. (HK: 729HK); 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. Ms. Strand has also served in various management and executive roles at medical device, biotech and digital health firms. Ms. Strand is a named inventor with seven issued patents. Ms. 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. Mr. 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. Mr. Yodose has currently served as Sr. Project Manager for Toyota Tsusho America, Inc, dedicating to carbon neutral solutions activities since April 2022. Mr. 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. Mr. 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. Mr. Yodose holds a Bachelor’s Degree in Business Administration from Ritsumeikan University in Siga, Japan. Item 11. Executive Compensation 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. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 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. Item 13. Certain Relationships and Related Transactions, and Director Independence 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. Item 14. Principal Accounting Fees and Services 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. Auditor Name: Deloitte & Touche LLP Auditor Firm ID: PCAOB ID: 34 Auditor Location: San Diego, CA Auditor Name: Moss Adams LLP Auditor Firm ID : 659 Auditor Location: San Diego, CA 70 Part IV Item 15. Exhibits, Financial Statement Schedules (a) Documents Filed with Report: Report of Independent Registered Public Accounting Firm Consolidated Balance Sheets as of December 31, 2022 and 2021 Consolidated Statements of Operations for the years ended December 31, 2022 and 2021 Consolidated Statements of Comprehensive Loss for the years ended December 31, 2022 and 2021 Consolidated Statements of Mezzanine Equity and Stockholders' Equity for the years ended December 31, 2022 and 2021 Consolidated Statements of Cash Flows for the years ended December 31, 2022 and 2021 Notes to Consolidated Financial Statements (b) Exhibits. The following is a list of all exhibits filed or furnished as part of this report. Incorporation by Reference Exhibit No. Description Form Exhibit No. Filing Date 2.1 Merger Agreement dated November 11, 2020 424B3 Annex A 2/17/2021 2.2 Amendment No. 1 to Merger Agreement dated February 20, 2021 8-K† 1.1 2/23/2021 3.1 Amended and Restated Certificate of Incorporation 8-K 3.1 3/25/2021 3.2 Amended and Restated Bylaws 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 8-K† 4.5 2/20/2020 4.2 Amendment No. 1 to Warrant Agreement 8-K 4.4 3/25/2021 4.3 Unit Purchase Option, dated February 19, 2020, between the Registrant and Chardan Capital Markets LLC 8-K† 4.7 2/20/2020 4.4 Amendment No. 1 to Unit Purchase Option 8-K 4.6 3/25/2021 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 424B3 Annex A (Ex. B) 2/17/2021 10.2 Stockholder’s Agreement 8-K 10.5 3/25/2021 10.3 Form of PIPE Registration Rights Agreement 8-K 10.7 3/25/2021 10.4 Nuvve Holding Corp. 2020 Equity Incentive Plan 424B3 Annex C 2/17/2021 10.5 Employment Agreement with Gregory Poilasne 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 8-K 10.13 3/25/2021 10.12# IP Acquisition Agreement, effective November 2, 2017, between University of Delaware and Nuvve Corporation S-4 10.16 2/4/2021 10.13# Amended and Restated Research Agreement, dated September 1, 2017, between University of Delaware and Nuvve Corporation S-4 10.17 2/4/2021 10.14 Warrant Agreement, dated May 17, 2021, by and among Nuvve Corporation, Stonepeak Rocket Holdings LP and Evolve Transition Infrastructure LP. 8-K 10.1 5/17/2021 10.15 Securities Purchase Agreement, dated May 17, 2021, by and among Nuvve Corporation, Stonepeak Rocket Holdings LP and Evolve Transition Infrastructure LP . 8-K 10.2 5/17/2021 10.16 Registration Right Agreement, dated May 17, 2021, by and among Nuvve Corporation, Stonepeak Rocket Holdings LP and Evolve Transition Infrastructure LP. 8-K 10.3 5/17/2021 10.17# Amended and Restated Limited Liability Company Agreement for Levo, dated as of August 4, 2021, by and among Nuvve Corporation, Stonepeak Rocket Holdings LP and Evolve Transition Infrastructure LP. 8-K/A 10.1 8/8/2021 10.18# Development Services Agreement, dated as of August 4, 2021, by and between Nuvve Holding Corp. and Levo Mobility LLC. 8-K/A 10.2 8/8/2021 10.19# Parent Letter Agreement, dated as of August 4, 2021, by and among Nuvve Holding Corp., Stonepeak Rocket Holdings LP, Evolve Transition Infrastructure LP and Levo Mobility LLC. 8-K/A 10.3 8/8/2021 71 Incorporation by Reference Exhibit No. Description Form Exhibit No. Filing Date 10.20# Board Rights Agreement, dated as of August 4, 2021, by and among Nuvve Holding Corp. and Stonepeak Rocket Holdings LP. 8-K/A 10.4 8/8/2021 10.21# Intellectual Property License and Escrow Agreement, dated as of August 4, 2021, by and between Nuvve Holding Corp. and Levo Mobility LLC . 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 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 * 31.2 Rules 13a-14(a) Certification of Chief Financial Officer * 32.1 Section 1350 Certification of Chief Executive Officer + 32.2 Section 1350 Certification of Chief Financial Officer + 101.INS Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. * 101.SCH Inline XBRL Taxonomy Extension Schema Document * 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document * 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document * 101.LAB Inline XBRL Taxonomy Extension Labels Linkbase Document * 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document * 104 Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. * _____________________ * Filed herewith. + Furnished herewith. † Filed by Newborn Acquisition Corp., the predecessor to the registrant. # Certain confidential portions of this exhibit were omitted by means of marking such portions with asterisks because the identified confidential portions (i) are not material and (ii) would be competitively harmful if publicly disclosed. Item 16. Form 10-K Summary None. 72 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. NUVVE HOLDING CORP. March 31, 2023 By: /s/ Gregory Poilasne Gregory Poilasne Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Position Date By: /s/ Gregory Poilasne Chairman and Chief Executive Officer March 31, 2023 Gregory Poilasne (Principal Executive Officer) By: /s/ Ted Smith President, Chief Operating Officer, and Director March 31, 2023 Ted Smith By: /s/ David G. Robson Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) March 31, 2023 David G. Robson By: /s/ Jon M. Montgomery Director March 31, 2023 Jon M. Montgomery By: /s/ H. David Sherman Director March 31, 2023 H. David Sherman By: /s/ Angela Strand Director March 31, 2023 Angela Strand By: /s/ Kenji Yodose Director March 31, 2023 Kenji Yodose By: /s/ Rashida La Lande Director March 31, 2023 Rashida La Lande 73 Financial Statements. INDEX TO FINANCIAL STATEMENTS REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB ID: 34 ) F-2 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB ID: 659 ) F-3 CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEETS F-4 CONSOLIDATED STATEMENTS OF OPERATIONS F-5 CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS F-6 CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY F-7 CONSOLIDATED STATEMENTS OF CASH FLOWS F-8 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS F-10 F-1 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. 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. F-2 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 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 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 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 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 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, 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. F-3 NUVVE HOLDING CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS December 31, 2022 December 31, 2021 Assets Current Assets Cash $ 15,753,896 $ 32,360,520 Restricted cash 480,000 380,000 Accounts receivable, net 1,121,694 1,886,708 Inventories 11,551,831 11,118,188 Prepaid expenses and other current assets 2,942,145 1,036,645 Total Current Assets 31,849,566 46,782,061 Property and equipment, net 636,944 356,194 Intangible assets, net 1,341,640 1,481,077 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 Financing receivables 288,872 138,161 Security deposit, long-term 8,682 3,057 Total Assets $ 41,199,590 $ 52,914,543 Liabilities, Mezzanine Equity and Stockholders’ Equity Current Liabilities Accounts payable $ 2,390,422 $ 5,738,873 Accrued expenses 3,347,399 2,874,018 Deferred revenue 1,221,497 719,771 Operating lease liabilities - current 824,326 41,513 Other liabilities 113,844 110,574 Total Current Liabilities 7,897,488 9,484,749 Operating lease liabilities - noncurrent 5,090,170 3,441,642 Warrants liability 220,884 9,543,000 Derivative liability - non-controlling redeemable preferred shares 359,225 511,948 Other long-term liabilities 393,179 18,860 Total Liabilities 13,960,946 23,000,199 Commitments and Contingencies Mezzanine equity 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 445,479 — Stockholders’ Equity Preferred stock, $ 0.0001 par value, 1,000,000 shares authorized; zero shares issued and outstanding at December 31, 2022 and December 31, 2021, respectively — — Common stock, $ 0.0001 par value, 100,000,000 and 30,000,000 shares authorized; 24,272,150 and 18,861,130 shares issued and outstanding at December 31, 2022 and December 31, 2021, respectively 2,427 1,888 Additional paid-in capital 144,073,505 122,336,607 Accumulated other comprehensive income 76,182 113,446 Accumulated deficit ( 116,956,528 ) ( 92,937,863 ) Nuvve Holding Corp. Stockholders’ Equity 27,195,586 29,514,078 Non-controlling interests ( 3,950,186 ) ( 2,501,633 ) 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. F-4 NUVVE HOLDING CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS Years Ended December 31, 2022 2021 Revenue Products and services $ 4,913,956 $ 2,920,627 Grants 459,427 1,270,138 Total revenue 5,373,383 4,190,765 Operating expenses Cost of product and service revenue 4,196,788 2,002,197 Selling, general, and administrative 30,115,571 22,896,125 Research and development 7,976,568 6,524,245 Total operating expenses 42,288,927 31,422,567 Operating loss ( 36,915,544 ) ( 27,231,802 ) Other income (expense) Interest income (expense) 134,579 ( 585,157 ) Financing costs — ( 46,754,794 ) Change in fair value of warrants liability 11,986,462 ( 312,400 ) Change in fair value of derivative liability 152,723 ( 14,342 ) Other, net 85,074 282,183 Total other income (expense), net 12,358,838 ( 47,384,510 ) Loss before taxes ( 24,556,706 ) ( 74,616,312 ) Income tax expense 800 1,000 Net loss $ ( 24,557,506 ) $ ( 74,617,312 ) Less: Net loss attributable to non-controlling interests ( 538,841 ) ( 2,138,272 ) Net loss attributable to Nuvve Holding Corp. $ ( 24,018,665 ) $ ( 72,479,040 ) Less: Preferred dividends on redeemable non-controlling interests 263,846 101,856 Less: Accretion on redeemable non-controlling interests preferred shares 645,866 261,505 Net loss attributable to Nuvve Holding Corp. common stockholders $ ( 24,928,377 ) $ ( 72,842,401 ) Net loss per share attributable to Nuvve Holding Corp. common stockholders, basic and diluted $ ( 1.19 ) $ ( 4.37 ) Weighted-average shares used in computing net loss per share attributable to Nuvve Holding Corp. common stockholders, basic and diluted 20,971,896 16,654,495 The accompanying notes are an integral part of these condensed consolidated financial statements. F-5 NUVVE HOLDING CORP AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS Years Ended December 31, 2022 2021 Net loss $ ( 24,557,506 ) $ ( 74,617,312 ) Other comprehensive (loss) income, net of taxes Foreign currency translation adjustments, net of taxes ( 37,264 ) 191,287 Total Comprehensive loss $ ( 24,594,770 ) $ ( 74,426,025 ) Less: Comprehensive loss attributable to non-controlling interests, net taxes ( 538,841 ) ( 2,138,272 ) Comprehensive loss attributable to Nuvve Holding Corp. $ ( 24,055,929 ) $ ( 72,287,753 ) Less: Preferred dividends on redeemable non-controlling interests ( 263,846 ) ( 101,856 ) Less: Accretion on redeemable non-controlling interests preferred shares ( 645,866 ) ( 261,505 ) Comprehensive loss attributable to Nuvve Holding Corp. common stockholders $ ( 23,146,217 ) $ ( 71,924,392 ) The accompanying notes are an integral part of these condensed consolidated financial statements. F-6 NUVVE HOLDING CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY Series A Convertible Preferred Stock Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Non-controlling Interests Total Shares Amount Shares Amount 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 ) Conversion of shares due to merger capitalization ( 16,789,088 ) ( 1,679 ) ( 17,039,126 ) ( 1,704 ) 3,383 — — — — Balances December 31, 2021, effect of reverse recapitalization (refer to Note 2) — — 9,122,996 912 19,654,041 ( 77,841 ) ( 20,458,823 ) — ( 881,710 ) Beneficial conversion feature - convertible debenture — — — — 427,796 — — — 427,796 Conversion of convertible debenture — — 544,178 54 3,999,381 — — — 3,999,435 Repurchase of common stock from EDF — — ( 600,000 ) ( 60 ) ( 5,999,940 ) — — — ( 6,000,000 ) Assumption of private warrant liability from Newborn — — — — ( 1,253,228 ) — — — ( 1,253,228 ) Merger recapitalization, net of share redemption of $ 18,629 and issuance costs of $ 5,979,675 — — 8,060,418 806 51,484,821 — — — 51,485,627 Placement agent fee paid in common stock — — 208,532 21 2,085,299 — — — 2,085,320 PIPE offering, less issuance costs of $ 2,500 — — 1,425,000 143 14,247,357 — — — 14,247,500 Notice of exercise of put option — — — — ( 2,000,000 ) — — — ( 2,000,000 ) Buyback of shares related to exercise of put option — — ( 134,500 ) ( 13 ) 13 — — — — Issuance of warrants to Stonepeak and Evolve — — — — 22,310,574 — — — 22,310,574 Issuance of options to purchase shares of common stock to Stonepeak and Evolve — — — — 12,584,000 — — — 12,584,000 Exercise of stock options — — 234,506 25 576,503 — — — 576,528 Stock-based compensation — — — — 4,219,989 — — — 4,219,989 Currency translation adjustment — — — — — 191,287 — — 191,287 Preferred dividends - non-controlling interest — — — — — — — ( 101,856 ) ( 101,856 ) Accretion on redeemable non-controlling interests preferred shares — — — — — — — ( 261,505 ) ( 261,505 ) Net loss — — — — — — ( 72,479,040 ) ( 2,138,272 ) ( 74,617,312 ) 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. F-7 NUVVE HOLDING CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Years Ended December 31, 2022 2021 Operating activities Net loss $ ( 24,557,506 ) $ ( 74,617,312 ) Adjustments to reconcile to net loss to net cash used in operating activities Depreciation and amortization 289,536 167,558 Share-based compensation 5,234,878 4,219,989 Financing costs — 46,771,276 Beneficial conversion feature on convertible debenture — 427,796 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 ) Noncash lease expense 421,183 3,636 Change in operating assets and liabilities Accounts receivable 763,302 ( 887,697 ) Inventory ( 433,644 ) ( 10,065,710 ) Prepaid expenses and other assets ( 2,072,001 ) ( 693,756 ) Accounts payable ( 3,346,937 ) 2,780,890 Accrued expenses 1,340,918 2,138,574 Deferred revenue 417,481 626,265 Net cash used in operating activities ( 34,081,975 ) ( 29,190,718 ) Investing activities Proceeds from sale of property and equipment — 7,649 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 Newborn Escrow Account — 58,184,461 Redemption of Newborn shares — ( 18,629 ) Issuance costs related to reverse recapitalization and PIPE offering — ( 3,970,657 ) Proceeds from PIPE offering — 14,250,000 Repayment of Newborn sponsor loans — ( 487,500 ) Repurchase of common stock from EDF — ( 6,000,000 ) Newborn cash acquired — 50,206 Purchase of stock from investor — ( 2,000,000 ) Payment of financing costs — ( 1,000,000 ) Payment of finance lease obligations ( 9,691 ) ( 5,839 ) 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 Issuance Costs Related to Preferred Stock — ( 2,956,248 ) Issuance of Redeemable Preferred Stock — 3,138,000 Payment of Preferred Stock dividends — ( 39,096 ) Net cash provided by financing activities 19,063,624 59,721,226 Effect of exchange rate on cash ( 50,228 ) 199,592 Net increase in cash and restricted cash ( 16,506,624 ) 30,464,625 Cash and restricted cash at beginning of year 32,740,520 2,275,895 Cash and restricted cash at end of year $ 16,233,896 $ 32,740,520 The accompanying notes are an integral part of these condensed consolidated financial statements. F-8 NUVVE HOLDING CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (continued) Years Ended December 31, 2022 2021 Supplemental Disclosure of cash information: Cash paid for income taxes $ — $ 800 Supplemental Disclosure of Noncash Financing Activity Conversion of preferred stock to common stock $ — $ 1,679 Conversion of debenture and accrued interest to common shares $ — $ 3,999,435 Conversion of shares due to reverse recapitalization $ — $ 3,383 Issuance of common stock for merger success fee $ — $ 2,085,299 Non-cash merger transaction costs $ — $ 2,085,299 Accrued transaction costs related to reverse recapitalization $ — $ 189,434 Issuance of private warrants $ — $ 1,253,228 Forgiveness of PPP Loan $ — $ 492,100 Issuance of Stonepeak and Evolve warrants $ — $ 30,234,000 Issuance of Stonepeak and Evolve options $ — $ 12,584,000 Th e accompanying notes are an integral part of these condensed consolidated financial statements. F-9 NUVVE HOLDING CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1 – Organization and Description of Business (a) Description of Business 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. (See Business Combination below). The Company owns 100 % of Nuvve Corporation, a Delaware corporation headquartered in San Diego, California (“Nuvve Corp.”), which was founded on October 18, 2010, to develop and commercialize Vehicle to Grid ("V2G") technology. Nuvve has developed a proprietary V2G technology, including the Company’s Grid Integrated Vehicle (“GIVe ™ ”) cloud-based software platform, that enables it to link multiple electric vehicle ("EV") batteries into a virtual power plant ("VPP") to provide bi-directional energy to the electrical grid in a qualified and secure manner. The VPP can generate revenue by selling or making available to utility companies excess energy when the price is relatively high or buying energy when the price is relatively low. The V2G technology may allow energy users to reduce energy peak consumption and enable utilities to reduce the required internally generated peak demand. This V2G technology was initially developed in 1996 by Dr. Willett Kempton, Ph.D, at the University of Delaware and is now being deployed for commercial use as a part of the management of fleets of electric vehicles, including buses. Nuvve’s technology is patent protected. Nuvve’s first commercial operation was proven in Copenhagen in 2016. 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 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 Pennsylvania LLC. Nuvve Corp. 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 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 ("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 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. F-10 NUVVE HOLDING CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Note 2 – Summary of Significant Accounting Policies (a) Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). The Business Combination between Newborn, a Special Purpose Acquisition Company (“SPAC”), the Company, prior to the Business Combination a wholly owned subsidiary of Newborn, and Nuvve Corp., prior to the Business Combination a privately held operating company, pursuant to which the Company acquired the outstanding shares of Nuvve Corp. (see Business Combination below) was accounted for as a reverse recapitalization in accordance with U.S. GAAP (the “Reverse Recapitalization”). Under this method of accounting, Newborn was treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the Reverse Recapitalization was treated as the equivalent of Nuvve Corp. issuing stock for the net assets of Newborn, accompanied by a recapitalization. The net assets recorded from Newborn are stated at historical cost, with no goodwill or other intangible assets recorded. The consolidated assets, liabilities and results of operations prior to the Reverse Recapitalization are those of Nuvve Corp. 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 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. 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 The consolidated financial statements include the accounts and operations of the Company, its wholly owned subsidiaries and its consolidated variable interest entity. All intercompany accounts and transactions have been eliminated upon consolidation. Variable Interest Entities 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 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. The primary beneficiary analysis is a qualitative analysis based on power and economics. 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. F-11 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. Accordingly, the Company consolidates Levo and records a non-controlling interest for the share of the entity owned by Stonepeak and Evolve. Assets and Liabilities of Consolidated VIEs 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 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 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 Assets Cash $ 27,629 $ 28,446 Prepaid expenses and other current assets 59,794 — Total Assets $ 87,423 $ 28,446 Liabilities Accounts payable $ 8,165 $ — Accrued expenses and dividend payable 336,713 $ 116,754 Derivative liability - non-controlling redeemable preferred shares 359,225 511,948 Total Liabilities $ 704,103 $ 628,702 (c) Redeemable Non-Controlling Interest - Mezzanine Equity 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 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. The adjusted initial carrying value is further adjusted for the accretion of the difference with the redemption price value using the effective interest method. The accretion amount is a deemed dividend recorded against retained earnings or, in its absence, to additional-paid-in-capital. The carrying amount of the redeemable non-controlling interest is measured at the higher of the carrying amount adjusted each reporting period for income (or loss) attributable to the non-controlling interest, or the carrying amount adjusted each reporting period by the accretion amount. See Note 18 for details. (d) Non-controlling interests 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. F-12 NUVVE HOLDING CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (e) Business Combination The Company is party to a merger agreement (as amended, the “Merger Agreement”), dated as of November 11, 2020 and amended as of February 20, 2021, by and among Newborn, a Cayman Islands company, the Company, a Delaware corporation and prior to the Business Combination a wholly owned subsidiary of Newborn, Nuvve Merger Sub Inc., a Delaware corporation and prior to the Business Combination a wholly-owned subsidiary of the Company (the “Merger Sub”), Nuvve Corp., a Delaware corporation, and Ted Smith, an individual, as the representative of the stockholders of Nuvve Corp. On March 16, 2021, Newborn held an extraordinary general meeting of its shareholders, at which Newborn’s shareholders approved the Business Combination, along with certain other related proposals. On March 19, 2021 (the “Closing Date”), the parties consummated the Business Combination. Pursuant to the Merger Agreement, the Business Combination was effected in two steps: (i) Newborn reincorporated to the State of Delaware by merging with and into the Company, with the Company surviving as the publicly-traded entity (the “Reincorporation Merger”); and (ii) immediately after the Reincorporation Merger, Merger Sub merged with and into Nuvve, with Nuvve surviving as a wholly-owned subsidiary of the Company (the “Acquisition Merger”). 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. 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”). The PIPE Investors also received warrants to purchase 1,353,750 ordinary shares of Newborn (the “PIPE Warrants”) that were identical to Newborn’s other outstanding warrants. Also, on November 11, 2020, Nuvve Corp. entered into a bridge loan agreement with an accredited investor, under which, on November 17, 2020, the investor purchased a $ 4,000,000 6 % Senior Secured Convertible Debenture from Nuvve Corp. (the “Bridge Loan”), which automatically converted into shares of Nuvve Corp.’s common stock immediately before the closing of the Business Combination. Upon the closing of the Reincorporation Merger, each of Newborn’s outstanding units was automatically separated into its constituent securities, and Newborn’s outstanding securities (including the Newborn ordinary shares and Newborn warrants purchased by the PIPE Investors) were converted into a like number of equivalent securities of the Company, except that each of Newborn’s rights was converted automatically into one-tenth of one share of the Company’s common stock in accordance with its terms. Upon the closing of the Acquisition Merger, each share of Nuvve Corp.’s common stock outstanding immediately prior to the effective time of the Acquisition Merger (including the shares issued upon conversion of Nuvve Corp.’s preferred stock and upon conversion of the Bridge Loan as described above) automatically was converted into approximately 0.212403050 shares (the “Closing Exchange Ratio”) of the Company’s common stock, for an aggregate of 9,122,996 shares of the Company’s common stock. Each outstanding option to purchase Nuvve Corp.’s common stock (“Nuvve Options”) was assumed by the Company and converted into an option to purchase a number of shares of the Company’s common stock equal to the number of shares of Nuvve Corp.’s common stock subject to such option immediately prior to the effective time multiplied by the Closing Exchange Ratio, for an aggregate of 1,303,610 shares of the Company’s common stock, at an exercise price equal to the exercise price immediately prior to the effective time divided by the Closing Exchange Ratio. 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), 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 . F-13 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 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 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. Pursuant to a purchase and option agreement, dated as of November 11, 2020 (the “Purchase and Option Agreement”), between the Company and EDF Renewables, Inc. (“EDF Renewables”), a former stockholder of Nuvve Corp. and the owner of more than 5 % of the Company’s common stock, immediately after the closing, the Company repurchased 600,000 shares of the Company’s common stock from EDF Renewables at a price of $ 10.00 per share. In addition, on the Closing Date, EDF Renewables exercised its option to sell an additional $ 2,000,000 of shares of the Company’s common stock back to the Company at a price per share of $ 14.87 (the average closing price over the five preceding trading days). The share repurchase was completed on April 26, 2021 (see Note 11 ). 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. 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 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. Each unit in the private placement consisted of one ordinary share, one warrant to purchase one-half of an ordinary share (the “Private Warrant”), and one right automatically convertible into one-tenth of an ordinary share upon completion of an initial business combination. Newborn received net proceeds of approximately $ 57,989,380 from the public and private units. Upon closing of the initial public offering and the private placement, $ 57,500,000 was placed by Newborn in a trust account with Continental Stock Transfer & Trust Company acting as trustee (the “Trust Account”). 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, 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 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. The JOBS Act provides that an EGC can elect to opt-out of the extended transition period and comply with the requirements that apply to non-EGCs, but any such election to opt-out is irrevocable. The Company has elected not to opt-out of such an extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an EGC, can adopt the new or revised standard at the time private companies adopt the new or revised standard. 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. F-14 NUVVE HOLDING CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (g) COVID-19 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. 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. 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. Actual results could materially vary from those estimates. (i) Warrants The Company reviews the terms of warrants to purchase its common stock to determine whether warrants should be classified as liabilities or stockholders’ equity in its consolidated balance sheet. In order for a warrant to be classified in stockholders’ equity, the warrant must be (a) indexed to the Company’s equity and (b) meet the conditions for equity classification in Accounting Standards Codification (“ASC”) Subtopic 815-40, Derivatives and Hedging – Contracts in an Entity’s Own Equity . 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 sheets, and the amount initially recorded is not subsequently remeasured at fair value. (j) Foreign Currency Matters For Nuvve Corp., Nuvve SaS, and Nuvve LTD, the functional currency is the U.S. dollar. All local foreign currency asset and liability amounts are remeasured into U.S. 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 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. The financial position and results of operations of the Company’s non-U.S. dollar functional currency subsidiary, Nuvve Denmark, are measured using the subsidiary’s local currency as the functional currency. The Company translates the assets and liabilities of Nuvve Denmark into U.S. dollars using exchange rates in effect at the balance sheet date. Revenues and expenses for the subsidiary are translated using rates that approximate those in effect during the period. The resulting translation gain and loss adjustments are reflected as a foreign currency translation adjustment in accumulated other comprehensive income (loss) within stockholders’ equity in the consolidated balance sheets. Foreign currency translation adjustments are included in other comprehensive income in the consolidated statements of operations and comprehensive loss. (k) Cash and Restricted Cash The Company maintains cash balances that can, at times, exceed amounts insured by the Federal Deposit Insurance Corporation, which is up to $ 250,000 . The Company has not experienced any losses in these accounts and believes it is not exposed to any significant credit risk in this area. 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 . F-15 NUVVE HOLDING CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (l) Accounts Receivable Accounts receivable consist primarily of payments due from customers under the Company’s contracts with customers. 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 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. (m) Concentrations of Credit Risk At December 31, 2022 and 2021, the financial instruments which potentially expose the Company to concentration of credit risk consist of cash in financial institutions (in excess of federally insured limits) and trade receivables. 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, 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. 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 potential credit losses have been appropriately considered in establishing the allowance for doubtful accounts. (n) Inventories 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. Cost includes purchased products. Net realizable value is based on current selling prices less costs of disposal. At December 31, 2022, and December 31, 2021, the Company’s inventories consisted solely of finished goods, including school buses, added as of December 31, 2022, which the Company expect to lease or sell in the future. Should demand for the Company’s products prove to be significantly less than anticipated, the ultimate realizable value of the Company’s inventories could be substantially less than the amount shown on the accompanying consolidated balance sheets. (o) Property and Equipment, Net Property and equipment are carried at cost less accumulated depreciation. Depreciation is calculated on a straight-line basis over the estimated useful lives of the respective asset. Maintenance and repairs are expensed as incurred while betterments are capitalized. Upon sale or disposition of assets, any gain or loss is included in the consolidated statement of operations. (p) Intangible Assets Intangible assets consist of patents which are amortized over the period of estimated benefit using the straight-line method. No significant residual value is estimated for intangible assets. (q) Impairment of Long-Lived Assets The Company evaluates long-lived assets for impairment, including evaluating the useful lives for amortizing intangible assets, whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. If the estimated future cash flows (undiscounted and without interest charges) from the use of an asset are less than the carrying value, a write-down would be recorded to reduce the related asset to its estimated fair value. There were no such write-downs for the years ended December 31, 2022 and 2021. F-16 NUVVE HOLDING CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (r) Investments in Equity Securities Without Readily Determinable Fair Values Investments in equity securities of nonpublic entities without readily determinable fair values are carried at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The Company reviews its equity securities without readily determinable fair values on a regular basis to determine if the investment is impaired. 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 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. As of December 31, 2022, and December 31, 2021, the Company’s investment in Dreev was accounted for as an investment in equity securities without a readily determinable fair value. 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. 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. 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. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimizes the use of unobservable inputs to the extent possible. The Company also considers counterparty risk and its own credit risk in its assessment of fair value. The categorization of financial instruments within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement. The inputs used to measure fair value are prioritized based on a three-level hierarchy. The three levels of inputs used to measure fair value are defined as follows: • Level 1 – Quoted prices in active markets for identical assets or liabilities. • Level 2 – Other inputs that are observable directly or indirectly, such as quoted prices for similar assets and liabilities or market corroborated inputs. • 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. (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, 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 ). F-17 NUVVE HOLDING CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (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 recognizes revenue through the following steps: • Identification of the contract, or contracts, with a customer; • Identification of the performance obligations in the contract; • Determination of the transaction price; • Allocation of the transaction price to the performance obligations in the contract; and • Recognition of revenue when, or as, the Company satisfies a performance obligation. The Company’s revenue is primarily derived from sales of EV charging stations, fees for cloud computing services related to providing access to the Company’s GIVe platform, and fees for extended warranty and maintenance services. The Company also has performed certain software development services and received government grants. GIVe platform access is considered a monthly series comprised of one performance obligation and fees are recognized as revenue in the period the services are provided to and consumed by the customer. 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 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 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 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. Services – Specific contracts contain licenses to the software that provides the V2G functionality for one - to twelve-year contract periods through access to the Company’s software as a service GIVe platform application. The Company determined that the nature of the GIVe application performance obligation is providing continuous access to its GIVe application for the contract period. Although the activities that the customer may be able to perform via the GIVe application may vary from day to day, the overall promise is to provide continuous access to the GIVe application to the customer for a period of one - to twelve years . Thus, access to the GIVe application represents a series of distinct services that are substantially the same and have the same pattern of transfer to the customer, and the Company has determined that for GIVe SaaS revenue, the best indicator for the transfer of control is the passage of time. 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 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, F-18 NUVVE HOLDING CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 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). The warranty provides the customer with assurance that the product will function as intended for the period of the contract and maintenance services related to the equipment. Since the warranty provides a customer with a service in addition to the assurance that the product complies with agreed-upon specifications, the promised service is a performance obligation. 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 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. Additionally, the Company has concluded these government grants meet the definition of a contribution and are non-reciprocal transactions; however, ASC Subtopic 958-605, Not-for-Profit-Entities-Revenue Recognition, does not apply, as the Company is a business entity, and the grants are with a governmental agency. Revenues from each grant are based upon internal costs incurred that are specifically covered by the grant. Revenue is recognized as the Company incurs expenses that are related to the grant. The Company believes this policy is consistent with the overarching premise in ASC 606, to ensure that it recognizes revenues to reflect the transfer of promised goods or services to customers in an amount that reflects the consideration to which it expects to be entitled in exchange for those goods or services, even though there is no “exchange” as defined in the ASC. The Company believes the recognition of revenue as costs are incurred and amounts become earned/realizable is analogous to the concept of transfer of control of a service over time under ASC 606. The Company considers contract modifications to exist when the modification either creates new or makes changes to the existing enforceable rights and obligations. Contract modifications for services that are not distinct from the existing contract are accounted for as if they were part of that existing contract. In these cases, the effect of the contract modification on the transaction price and the measure of progress for the performance obligation to which it relates are recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) on a cumulative catch-up basis. 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 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. 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 F-19 NUVVE HOLDING CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 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. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. 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. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit or obligation as the largest amount that is more than 50% likely of being realized upon ultimate settlement. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments. (z) Research and Development The Company expenses research and development costs as incurred. External software development expense is included in research and development costs except for those costs which require capitalization in accordance with GAAP. Certain research and development costs are related to performance on grant contracts. (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 Company accounts for forfeitures as they occur. (ab) Leases The Company makes a determination if an arrangement constitutes a lease at inception, and categorizes the lease as either an operating or finance lease. Operating leases are included in right-of-use operating lease assets and operating lease liabilities in the Company's consolidated balance sheets. Finance leases are included in property, plant and equipment, net and other liabilities in the consolidated balance sheets. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheets. The Company has entered into leases for building facilities and vehicles. 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. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants. Right-of-use lease assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. 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 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. The F-20 NUVVE HOLDING CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 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”). ASU 2016-13 requires, among other things, the use of a new current expected credit loss ("CECL") model in determining the allowances for doubtful accounts with respect to accounts receivable, accrued straight-line rents receivable, and notes receivable. The CECL model requires that an entity estimate its lifetime expected credit loss with respect to these receivables and record allowances that, when deducted from the balance of the receivables, represent the net amounts expected to be collected. Entities will also be required to disclose information about how the entity developed the allowances, including changes in the factors that influenced its estimate of expected credit losses and the reasons for those changes. This update is effective for fiscal years beginning after December 15, 2022, with early adoption permitted. 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 F-21 NUVVE HOLDING CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Note 3 – Revenue Recognition The disclosures below discuss the Company’s material revenue contracts. The following table provides information regarding disaggregated revenue: Years Ended December 31, 2022 2021 Revenue recognized over time: Services $ 784,710 $ 797,127 Grants 459,427 1,270,138 Revenue recognized at point in time: Products 4,129,246 2,123,500 Total revenue $ 5,373,383 $ 4,190,765 The aggregate amount of revenue for the Company’s existing contracts with customers as of December 31, 2022 expected to be re cognized in the future for years ended December 31, is as follows (this disclosure does not include revenue related to contracts whose original expected duration is one year or less): 2023 $ 134,500 2024 49,578 Thereafter 1,037,419 Total $ 1,221,497 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. The remaining $ 288,872 represents the discounted amount for the equipment that will be collected over the life of the contract, adjusted for the estimated effect of a significant financing component. 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, 2022 2021 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: December 31, 2022 December 31, 2021 United States $ 1,795,267 $ 1,811,607 United Kingdom 1,335 — Denmark $ 181,982 $ 25,664 $ 1,978,584 $ 1,837,271 F-22 NUVVE HOLDING CORP. AND SUBSIDIARIES 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, 2022 and December 31, 2021, using quoted price in active markets for identical assets (Level 1); significant other observable inputs (Level 2); and significant unobservable inputs (Level 3): Level 1: Quoted Prices in Active Markets for Identical Assets Level 2: Significant Other Observable Inputs Level 3: Significant Unobservable Inputs Total at December 31, 2022 Total Gains (Losses) For The Year Ended December 31, 2022 Recurring fair value measurements 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 Level 1: Quoted Prices in Active Markets for Identical Assets Level 2: Significant Other Observable Inputs Level 3: Significant Unobservable 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: 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 Initial fair value 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 The fair value of the level 3 Private Warrants was estimated at December 31, 2022 using the Black-Scholes model which used the following inputs: 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 %. F-23 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) 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. 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, 2021: 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 Fair value (in millions) $ 12.8 $ 5.6 $ 4.8 $ 3.8 $ 3.2 $ 12.6 Valuation methodology Black Scholes Monte Carlo Simulation & Black Scholes Monte Carlo Simulation & Black Scholes Monte Carlo Simulation & Black Scholes Monte Carlo Simulation & Black Scholes Black Scholes Term (years) 10 10 10 10 10 7.50 Risk free rate 1.6 % 1.6 % 1.6 % 1.6 % 1.6 % 1.4 % Exercise price $ 10.0 $ 15.0 $ 20.0 $ 30.0 $ 40.0 $ 50.0 Volatility 55.0 % 55.0 % 55.0 % 55.0 % 55.0 % 57.0 % Capital expenditure forecast (in millions) N/A $ 125.0 $ 250.0 $ 375.0 $ 500.0 N/A Probability of warrants vesting 100.0 % 96.9 % 87.7 % 78.2 % 69.9 % N/A F-24 NUVVE HOLDING CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Note 5 - Derivative Liability - Non-Controlling Redeemable Preferred Stock The Company has determined that the redemption features embedded in the non-controlling redeemable preferred stock of Levo is required to be accounted for separately from the redeemable preferred stock as a derivative liability. 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 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. The embedded derivative liability is adjusted to reflect fair value at each period end with changes in fair value recorded in the “ Change in fair value of derivative liability ” financial statement line item of the Company’s consolidated statements of operations . For additional information on the non-controlling redeemable preferred stock, see Note 18 . The following table displays the fair value of derivatives by balance sheet line item: December 31, 2022 December 31, 2021 Other long term liabilities: Derivative liability - non-controlling redeemable preferred shares $ 359,225 $ 511,948 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. F-25 NUVVE HOLDING CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Note 7 – Account Receivables, Net The following tables summarizes the Company's account receivables: As of December 31, 2022 2021 Trade receivables $ 1,180,528 $ 1,949,896 Less: allowance for doubtful accounts ( 58,834 ) ( 63,188 ) Accounts receivable, net $ 1,121,694 $ 1,886,708 Allowance for doubtful accounts: Balance December 31, 2020 $ — Provision — Write-off — Recoveries — Balance December 31, 2021 $ ( 63,188 ) Provision — Write-off 4,354 Recoveries — Balance December 31, 2022 $ ( 58,834 ) Note 8 – Inventories The following table summarizes the Company’s inventories balance by category: As of December 31, 2022 2021 DC Chargers $ 9,248,398 $ 7,687,598 AC Chargers 123,247 232,920 Vehicles - School Buses 1,620,000 3,180,000 Others 560,186 17,670 Total $ 11,551,831 $ 11,118,188 F-26 NUVVE HOLDING CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Note 9 – Property, Plant and Equipment The following table summarizes the Company’s property, plant and equipment balance: Useful Lives As of December 31, 2022 2021 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 Less: Accumulated Depreciation ( 216,559 ) ( 85,988 ) Property, plant and equipment, net $ 636,944 $ 356,194 As of December 31, 2022 2021 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 At both December 31, 2022 and 2021, the Company had recorded a gross intangible asset balance of $ 2,091,556 , which is related to patent and intangible property rights acquired. Amortization expense of intangible assets were $ 139,437 for each of the years ended December 31, 2022 and 2021. Accumulated amortization totaled $ 749,916 and $ 610,480 at December 31, 2022 and 2021, respectively. The net amount of intangible assets of $ 1,341,640 at December 31, 2022, will be amortized over the weighted average remaining life of 9.8 years . Total estimated future amortization expense is as follows: 2023 $ 139,437 2024 139,437 2025 139,437 2026 137,770 2027 132,770 Thereafter 652,789 $ 1,341,640 F-27 NUVVE HOLDING CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Note 11 – Stockholders’ Equity As of December 31, 2022, the Company has authorized two classes of stock to be designated, respectively, common stock, and preferred stock. The total number of shares of all classes of capital stock which the Company has authority to issue is 101,000,000 , of which 100,000,000 authorized shares are Common Stock with a par value of $ 0.0001 per share (“Common Stock”), and 1,000,000 authorized shares are Preferred Stock of the par value of $ 0.0001 per share (“Preferred Stock”). Preferred Stock The Board of Directors is expressly granted authority to issue shares of the Preferred Stock, in one or more series, and to fix for each such series such voting powers, full or limited, and such designations, preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereof as shall be stated and expressed in the resolution or resolutions adopted by the Board of Directors providing for the issue of such series (a “Preferred Stock Designation”) and as may be permitted by the General Corporation Law of the State of Delaware. The number of authorized shares of Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the voting power of all of the then outstanding shares of the capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class, without a separate vote of the holders of the Preferred Stock, or any series thereof, unless a vote of any such holders is required pursuant to any Preferred Stock Designation. No preferred stock of Nuvve Holding have been issued and or are outstanding. Common Stock General : The voting, dividend, liquidation, conversion, and stock split rights of the holders of the Common Stock are subject to and qualified by the rights of the holders of the Preferred Stock of any series as may be designated by the Board of Directors upon any issuance of the Preferred Stock of any series. The number of authorized shares of Common Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the stock of the Company entitled to vote. Voting : Each holder of Common Stock shall be entitled to one vote for each share of Common Stock held by such holder. Each holder of Common Stock shall be entitled to notice of any stockholders’ meeting in accordance with the Bylaws of the Company (as in effect at the time in question) (the “Bylaws”) and applicable law on all matters put to a vote of the stockholders of the Company. Dividends : 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, the holders of Common Stock shall be entitled to the payment of dividends when and as declared by the Board of Directors in accordance with applicable law and to receive other distributions from the Company. Any dividends declared by the Board of Directors to the holders of the then outstanding shares of Common Stock shall be paid to the holders thereof pro rata in accordance with the number of shares of Common Stock held by each such holder as of the record date of such dividend. Liquidation : 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 F-28 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 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: 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, F-29 NUVVE HOLDING CORP. AND SUBSIDIARIES 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 In connection with its initial public offering on February 19, 2020, Newborn sold 5,750,000 units, which included one warrant to purchase Newborn’s common stock (the “Public Warrants”). Also, on February 19, 2020, NeoGenesis Holding Co., Ltd., Newborn’s sponsor (“the Sponsor”), purchased an aggregate of 272,500 private units, each of which included one warrant (the “Private Warrants”), which have the same terms as the Public Warrants. Upon completion of the merger between Nuvve and Newborn, the Public Warrants and Private Warrants were automatically converted to warrants to purchase Common Stock of the Company. Each of the Public Warrants and Private Warrants entitles the holder to purchase one-half of a share of Nuvve’s Common Stock at a price of $ 11.50 per share. The term of the warrants commenced on March 19, 2021, the date of completion of the Business Combination, and expire on March 19, 2026. 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.” 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. Concurrently with the execution of the Merger Agreement ( Note 2 ), on November 11, 2020, Newborn entered into subscription agreements with certain accredited investors pursuant to which the investors agreed to purchase 1,425,000 of Newborn’s common stock, at a purchase price of $ 10.00 per share, for an aggregate purchase price of $ 14,250,000 (the PIPE). 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 investors received demand and piggyback registration rights in connection with the securities issued to them. 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. F-30 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: Number of Warrants Number of Warrants Exercised Number of Warrants Exercisable Exercise Price Expiration Date Public Warrants 2,875,000 — 2,875,000 $ 11.50 March 19, 2026 Private Warrants 136,250 — 136,250 $ 11.50 March 19, 2026 PIPE Warrants 1,353,750 — 1,353,750 $ 11.50 March 19, 2026 Stonepeak/Evolve Warrants - series B 2,000,000 — 2,000,000 $ 10.00 May 17, 2031 Stonepeak/Evolve Warrants - series C 1,000,000 — 500,000 $ 15.00 May 17, 2031 Stonepeak/Evolve Warrants - series D 1,000,000 — 500,000 $ 20.00 May 17, 2031 Stonepeak/Evolve Warrants - series E 1,000,000 — 500,000 $ 30.00 May 17, 2031 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 Unit Purchase Option On February 19, 2020, Newborn sold to the underwriters of its initial public offering for $ 100 , a unit purchase option ("UPO") to purchase up to a total of 316,250 units at $ 11.50 per unit (or an aggregate exercise price of $ 3,636,875 ) commencing on the date of Newborn's initial business combination, March 19, 2021, and expiring February 13, 2025. Each unit issuable upon exercise of the UPO consists of one and one-tenth of a share of the Company's common stock and one warrant to purchase one share of the Company's common stock at the exercise price of $ 11.50 per share. The warrant has the same terms as the Public Warrant. In no event will the Company be required to net cash settle the exercise of the UPO or the warrants underlying the UPO. The holders of the unit purchase option have demand and "piggy back" registration rights for periods of five and seven years , respectively, from the effective date of the IPO, including securities directly and indirectly issuable upon exercise of the unit purchase option. The UPO is classified within stockholders’ equity in the consolidated balance sheets as “additional paid-in capital” in accordance with ASC 815-40, Derivatives and Hedging-Contracts in an Entity’s Own Equity , as the UPO is indexed to the Company’s common stock and meets the conditions for equity classification. Put Option On March 19, 2021, the Closing Date of the Business Combination, EDF Renewables exercised its put option on the Company’s common shares held by them (see Note 2 ). 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 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). 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 . 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. F-31 NUVVE HOLDING CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 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. In November 2020, the Company’s Board of Directors extended the term of the 2010 Plan to July 1, 2021. In 2021, the Company adopted the 2020 Equity Incentive Plan (the “2020 Plan”), which provides for the grant of restricted stock awards, incentive and non-statutory stock options, and other share-based awards to employees, consultants, and directors. 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 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 recognized in selling, general, and administrative, and research and development are as follows: Years Ended December 31, 2022 2021 Options $ 2,634,486 $ 2,643,242 Restricted stock 2,395,580 1,514,120 Total $ 5,030,066 $ 4,157,362 The Company uses the Black-Scholes option pricing model to estimate the fair value of stock options. Fair value is estimated at the date of grant for employee and nonemployee options. 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. 2020 Plan Expected life of options (in years) (1) 6.1 Dividend yield (2) 0 % Risk-free interest rate (3) 2.75 % Volatility (4) 56.2 % __________________ (1) The expected life of options is the average of the contractual term of the options and the vesting period. (2) No cash dividends have been declared on the Company’s common stock since the Company’s inception, and the Company currently does not anticipate declaring or paying cash dividends over the expected life of the options. (3) 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. (4) 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. 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- Average Exercise Price per Share($) Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value($) Outstanding - December 31, 2021 1,035,035 3.21 5.90 5,688,501 Granted — — — — Exercised ( 59,729 ) 2.09 — — Forfeited ( 61,289 ) 7.84 — — Expired/Cancelled ( 60,510 ) 4.44 — — Outstanding - December 31, 2022 853,507 2.91 5.70 — Options Exercisable at December 31, 2022 797,393 2.57 4.44 — Option Vested at December 31, 2022 797,393 2.57 4.44 — F-32 NUVVE HOLDING CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 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: Shares Weighted- Average Exercise Price per Share ($) Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value($) Outstanding - December 31, 2021 1,602,850 13.18 9.27 46,920 Granted 352,400 4.36 $ — — Exercised — — — — Forfeited ( 241,326 ) 10.04 — — Expired/Cancelled ( 2,812 ) 8.25 — — Outstanding - December 31, 2022 1,711,112 11.71 8.46 — Options Exercisable at December 31, 2022 — — — — Option Vested at December 31, 2022 609,022 13.38 8.17 — The weighted-average grant-date fair value of options granted during the year ended December 31, 2022 was $ 2.35 . 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, 2022 and December 31, 2021, respectively, was $ 68,049 and $ 62,449 , respectively. Other Information: Years Ended December 31, 2022 2021 Amount received from option exercised $ 245,748 $ 576,528 December 31, 2022 Weighted average remaining recognition period Total unrecognized options compensation costs $ 6,195,461 2.55 No amounts relating to the 2010 Plan or 2020 Plan have been capitalized. 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: Shares Weighted- Average Grant Date Fair Value($) Nonvested at December 31, 2021 353,817 11.00 Granted 503,390 3.07 Vested/Release ( 398,492 ) 6.12 Cancelled/Forfeited ( 22,456 ) 8.72 Nonvested and Outstanding at December 31, 2022 436,259 6.43 As of December 31, 2022, there was $ 1,830,932 of total unrecognized compensation cost related to nonvested restricted stock. The Company expects to recognize this compensation cost over a remaining weighted-average period of approximately 1.04 years. F-33 NUVVE HOLDING CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Note 13 – Income Taxes Income (loss) before taxes includes the following components: Years Ended December 31, 2022 2021 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, 2022 2021 Federal $ — $ — State 800 1,000 Current income tax expense 800 1,000 Federal — — State — — Deferred income tax expense $ — $ — 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, 2022 2021 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: F-34 NUVVE HOLDING CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Years Ended December 31, 2022 2021 Equity investment $ ( 489,911 ) $ ( 576,523 ) Accrued liabilities and other 1,118,256 1,007,644 Right-of-use assets ( 1,246,870 ) ( 845,240 ) Lease liabilities 1,389,893 845,240 Research and experimental expenditures 1,507,144 — Net operating losses 15,772,670 9,953,429 Net deferred tax assets (liabilities) before valuation allowance 18,051,182 10,384,550 Valuation allowance ( 18,051,182 ) ( 10,384,550 ) Net deferred tax assets (liabilities) $ — $ — 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. 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. 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. 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. The Company will recognize accrued interest and penalties related to unrecognized tax benefits in income tax expense. The Company does not anticipate material unrecognized tax benefits within the next 12 months. The Company is subject to U.S. federal income tax as well as various states income tax. The Company’s income tax returns are open to audit under the statute of limitations for the years ended December 31 , 2019 through 2023. F-35 NUVVE HOLDING CORP. AND SUBSIDIARIES 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: Years Ended December 31, 2022 2021 Net loss attributable to Nuvve Holding Corp. common stockholders $ ( 24,928,377 ) $ ( 72,842,401 ) Weighted-average shares used to compute net loss per share attributable to Nuvve common stockholders, basic and diluted 20,971,896 16,654,495 Net Loss per share attributable to Nuvve common stockholders, basic and diluted $ ( 1.19 ) $ ( 4.37 ) The following outstanding shares of common stock equivalents were excluded from the calculation of the diluted net loss per share attributable to Nuvve common stockholders because their effect would have been anti-dilutive: Years Ended December 31, 2022 2021 Stock options issued and outstanding 2,604,927 2,424,410 Nonvested restricted stock issued and outstanding 958,273 709,263 Public warrants 2,875,000 3,033,548 Private warrants 136,250 143,764 PIPE warrants 1,353,750 1,428,405 Stonepeak and Evolve warrants 6,000,000 5,029,412 Stonepeak and Evolve options 5,000,000 4,191,176 Institutional/Accredited Investor Warrants 1,698,630 — Total 20,626,830 16,959,978 Note 15 – Related Parties 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. 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 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. F-36 NUVVE HOLDING CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Note 16 – Leases The Company has entered into leases for commercial office spaces and vehicles. These leases are not unilaterally cancellable by the Company, are legally enforceable, and specify fixed or minimum amounts. The leases expire at various dates through 2031 and provide for renewal options. In the normal course of business, it is expected that these leases will be renewed or replaced by leases on other properties. The leases provide for increases in future minimum annual rental payments based on defined increases in the Consumer Price Index, subject to certain minimum increases. Also, the agreements generally require the Company to pay real estate taxes, insurance, and repairs. 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. Also, the lease required the Company to pay operating expenses such as utilities, real estate taxes, insurance, and repairs. The lease term commenced in December 2021. The monthly base rent will be abated for the second through and including the eleventh full calendar months of the term and the Company's pro rata share of certain operating expenses will be abated for the first twelve full calendar months of the lease term starting with the second month of the lease term. 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, and this amount is recorded as restricted cash. The lease has been classified as an operating lease and included in the lease tables and the related disclosures below. 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 and equipment, net 18,467 25,664 Total lease assets $ 5,324,348 $ 3,508,706 Operating lease liabilities - current Operating lease liabilities - current $ 824,326 41,513 Operating lease liabilities - noncurrent Operating lease liabilities - noncurrent 5,090,170 3,441,642 Finance lease liabilities - current Other liabilities - current 7,184 7,634 Finance lease liabilities - noncurrent Other long-term liabilities 12,959 18,860 Total lease liabilities $ 5,934,639 $ 3,509,649 F-37 NUVVE HOLDING CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) The components of lease expense are as follows: Year Ended December 31, Year Ended December 31, Classification 2022 2021 Operating lease expense Selling, general and administrative $ 811,082 $ 219,712 Finance lease expense: Amortization of finance lease assets Selling, general and administrative 5,594 2,998 Interest on finance lease liabilities Interest expense 2,248 3,636 Total lease expense $ 818,924 $ 226,346 Operating Lease Finance Lease Maturities of lease liabilities are as follows: December 31, 2022 December 31, 2022 2023 $ 860,418 $ 7,184 2024 892,212 7,184 2025 893,046 7,184 2026 921,273 1,796 2027 946,683 — Thereafter 3,798,554 — Total lease payments 8,312,186 23,348 Less: interest ( 2,397,690 ) ( 3,205 ) Total lease liabilities $ 5,914,496 $ 20,143 Lease term and discount rate: December 31, 2022 December 31, 2021 Weighted-average remaining lease terms (in years): Operating lease 9.0 9.9 Finance lease 3.3 4.5 Weighted-average discount rate: Operating lease 7.8 % 7.8 % Finance lease 7.8 % 7.8 % Other Information: Years Ended December 31, Years Ended December 31, 2022 2021 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 related to interest expense $ 2,248 $ 3,636 Financing cash flows from finance leases $ 9,691 $ 5,839 Leased assets obtained in exchange for new finance lease liabilities $ 18,467 $ 25,664 Leased assets obtained in exchange for new operating lease liabilities $ — $ — F-38 NUVVE HOLDING CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Sublease 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 $ — Lessor 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 $ — F-39 NUVVE HOLDING CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Note 17 – 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. (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. Under the terms of the agreement, the Company paid a minimum of $ 400,000 annually in equal quarterly installments. For each of the years ended December 31, 2022 and 2021, $ 400,000 was paid under the research agreement. At December 31, 2022, we have $ 266,667 remaining to be paid under a renewed agreement. (c) In-Licensing 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. Under the terms of the agreement, the Company will pay up to an aggregate of $ 700,000 in royalties upon achievement of certain milestones. 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 the Company's 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: Milestone Event: Aggregated Vehicles Milestone Payment Amount 10,000 $ 500,000 20,000 750,000 40,000 750,000 60,000 750,000 80,000 750,000 100,000 1,000,000 200,000 1,000,000 250,000 2,000,000 $ 7,500,000 The Seller will retain a non-exclusive, royalty-free license, to utilize the intellectual property solely for research and education purposes. As of December 31, 2022, no royalty expenses had been incurred under this agreement. (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-40 NUVVE HOLDING CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (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. F-41 NUVVE HOLDING CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Note 18 - Non-Controlling Interest For entities that are consolidated, but not 100% owned, a portion of the net income or loss and corresponding equity is allocated to owners other than the Company. The aggregate of the net income or loss and corresponding equity that is not owned by the Company is included in non-controlling interests in the consolidated financial statements. Non-controlling interests are presented outside as a separate component of stockholders’ equity on the Company’s consolidated Balance Sheets. The primary components of non-controlling interests are separately presented in the Company’s consolidated statements of changes in stockholders’ equity to clearly distinguish the interest in the Company and other ownership interests in the consolidated entities. Net income or loss includes the net income or loss attributable to the holders of non-controlling interests on the Company’s consolidated statements of operations. Net income or loss is allocated to non-controlling interests in proportion to their relative ownership interests. Levo Series B Redeemable Preferred Stock Levo is authorized to issue 1,000,000 shares of series B preferred stock at no par value. The Series B Preferred Stock (a) pays a dividend, when, as and if declared by Levo's Board of Directors, of 8.0 % per annum of the stated value per share, payable quarterly in arrears, (b) has an initial stated value of $ 1,000 per share, and dividends are paid in cash. 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, 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. Series B Preferred Stock is not currently redeemable but it could be redeemable with the passage of time at the election of Levo or the preferred shareholders or upon the occurrence of a trigger event as defined in the preferred stock agreement. Since the redeemable preferred stock may be redeemed by the preferred shareholders or upon the occurrence of a trigger event that is not solely within the control of Levo, but is not mandatorily redeemable; therefore, based on its characteristics, Levo has classified the Series B Preferred Stock as mezzanine equity. At December 31, 2022, Series B Preferred Stock consisted of the following: Shares Authorized Shares Issued and Outstanding Stated Value per Share Initial Carrying Value Accrued Preferred Dividends Liquidation Preference 1,000,000 3,138 $ 1,000 $ 3,138,000 $ 326,606 $ 3,464,606 The Company has determined that the redemption features embedded in the non-controlling redeemable preferred stock is required to be accounted for separately from the redeemable preferred stock as a derivative liability. See Note 5 for detail disclosure of the derivative liability. 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 . Levo is accreting the difference between the adjusted carrying initial value and the redemption price value over the seven-year period from date of issuance of August 4, 2021 through July 4, 2028 (the date at which the preferred shareholders have the unconditional right to redeem the shares, deemed to be the earliest likely redemption date) using the effective interest method. 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, 2022, Levo has accreted $ 645,866 resulting in the carrying value of the redeemable preferred stock of $ 3,547,765 . F-42 NUVVE HOLDING CORP. AND SUBSIDIARIES 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: December 31, 2022 December 31, 2021 Add: net loss attributable to non-controlling interests $ ( 538,841 ) ( 2,138,272 ) Less: dividends paid or accrued to non-controlling interests 263,846 101,856 Less: 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: December 31, 2022 December 31, 2021 Net loss attributable to non-controlling interests $ ( 538,841 ) $ ( 2,138,272 ) Redeemable Non-controlling Interest Reconciliation — Mezzanine Equity December 31, 2022 December 31, 2021 Beginning balance $ 2,901,899 $ — Beginning redemption value (at fair value) — 3,138,000 Less: Non-controlling redeemable preferred shares - embedded derivatives — 497,606 Adjusted initial carrying value 2,901,899 2,640,394 Preferred share accretion adjustment 645,866 261,505 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. 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. 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 . F-43 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 Vested — — 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. F-44 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. F-45