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Item 7. Management’s Discussion and Analysis

2024-03-29 compared with 2023-03-31 · 127 added, 129 removed, 248 unchanged (51% of the section changed)

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The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Annual Report.

We are a green energy technology company that provides, directly and through business ventures with its partners, a globally-available, commercial V2G technology platform that enables EV batteries to store and resell unused energy back to the local electric grid and provide other grid services.

We are a green energy technology company that provides, directly and through business ventures with our partners, a globally-available, commercial V2G technology platform that enables EV batteries to store and resell unused energy back to the local electric grid and provide other grid services.

Our proprietary V2G technology — Grid Integrated Vehicle ("GIVe") platform — has the potential to refuel the next generation of EV fleets through cutting-edge, bi-directional charging solutions.

Our proprietary V2G technology enables us to link multiple EV batteries into a virtual power plant to provide bi-directional services to the electrical grid.

Our GIVe software platform was created to harness capacity from “loads” at the edge of the distribution grid (i.e., aggregation of EVs and small stationary batteries) in a qualified, controlled and secure manner to provide many of the grid services offered by conventional generation sources (i.e., coal and natural gas plants).

Our GIVe software platform was created to harness capacity from “loads” at the edge of the distribution grid (i.e., aggregation of EVs and small stationary batteries) in a qualified, controlled and secure manner to provide many of the grid services typically offered by conventional generation sources (i.e., coal and natural gas plants).

Our current addressable energy and capacity markets include grid services such as frequency regulation, demand charge management, demand response, energy optimization, distribution grid services and energy arbitrage.

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Levo 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.

Business Combination

On March 19, 2021, we consummated the Business Combination with Newborn and Nuvve Corp.

contemplated by the Merger Agreement.

See Note 2 to the Consolidated Financial Statements included in this annual report on Form 10-K for more information.

The Business Combination was effected in two steps, as follows:

(i) Newborn reincorporated to the State of Delaware by merging with and into us, with us surviving the merger as the new public company (the "Reincorporation Merger"), and (ii) immediately after the Reincorporation Merger, Merger Sub merged with and into Nuvve Corp., with Nuvve Corp.

surviving the merger as our wholly-owned subsidiary (the "Acquisition Merger").

Also on March 19, 2021, we consummated the Private Investment in Public Equity ("PIPE"), generating net proceeds of $14,250,000.

The most significant change in our future reported financial position and results as a result of the completion of the Business Combination and the PIPE was an estimated net increase in cash of approximately $62,018,410.

Total transaction costs of $3,702,421 were treated as a reduction of the cash proceeds with capital raising costs being deducted from our additional paid-in capital.

In addition, the net cash proceeds were reduced by our payment of $6,000,000 to EDF Renewables in connection with the repurchase from them of 600,000 shares of our common stock pursuant to the Purchase and Option Agreement, payment of $487,500 to NeoGenesis Holding Co.

Ltd., the sponsor of Newborn, in repayment of loans made by the sponsor to Newborn, and deposit of $495,000 into escrow for the potential repayment of Nuvve Corp.'s PPP loan.

Upon forgiveness of the PPP loan in June 2021, the $495,000 was released to us.

Upon consummation of the Business Combination, Nuvve Corp-designated directors were appointed to five of the seven seats of our combined board of directors;

Nuvve Corp’s Chief Executive Officer was appointed as Chairman of our combined board of directors;

Nuvve Corp’s senior management became the senior management of our combined company;

and the former stockholders of Nuvve Corp became the owners of approximately 48.3% of the outstanding shares of common stock of our combined company.

Accordingly, the Business Combination was accounted for as a Reverse Recapitalization, whereby Nuvve Corp was the acquirer for accounting and financial reporting purposes and Newborn is the legal acquirer.

A Reverse Recapitalization does not result in a new basis of accounting, and the financial statements of the combined entity represent the continuation of the consolidated financial statements of legacy Nuvve Corp in many respects.

The shares of Newborn remaining after redemptions, and the unrestricted net cash and cash equivalents on the date the Business Combination is consummated, were accounted for as a capital infusion to Nuvve Corp.

As a consequence of the Business Combination, Nuvve Corp effectively became an SEC-registered, Nasdaq-listed company, which has required our combined company to hire additional personnel and implement procedures and processes to address public company regulatory requirements and customary practices.

Our combined company had incurred additional annual expenses as a public company for, among other things, directors’ and officers’ liability insurance, director fees and additional internal and external accounting, legal and administrative expenses.

Additionally, we expect capital and operating expenses to increase significantly in connection with ongoing activities as we invest additional working capital for heavy-duty DC-V2G charging stations and level 2 AC-V2G charging stations, additional investments in equipment to meet increased project needs, and additional operating expenses to hire project managers, technicians, sales, partnership and customer service personnel, data scientists, trading teams, software engineers and administrative staff.

Our historical operations and statements of assets and liabilities may not be comparable to the operations and statements of assets and liabilities of our combined company as a result of the Business Combination.

Key Factors Affecting Our Business

We believe that our performance and future success depend on several factors that present significant opportunities for us but also pose risks and challenges, including those discussed below and in the Risk Factors described in Part I, Ite m 1A of this Annual Report.

Supply Chain Constraints

Global inventory delays, increased and unpredictable lead times, labor shortages, and process capacity pressures, could impact our ability to service customer demand.

During the latter part of the year ended December 31, 2021, and the first half of the year ended December 31, 2022, we estimated that these disruptions could result in our future inability to fulfill customer orders which will in turn impact our net revenues.

During the years ended December 31, 2023 and 2022, we estimated that these disruptions could result in our future inability to fulfill customer orders which will in turn impact our net revenues.

In an effort to mitigate unpredictable lead times, we increased our inventory orders contributing to our elevated inventory levels at the end of those periods.

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However, if these inflationary pressures continue, our revenue, gross and operating margins and net income could be impacted in the year ending December 31, 2024.

Key Factors Affecting Our Business

Growth in EV Adoption

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federal government, foreign governments and some state and local governments provide incentives to end users and purchasers of EVs and EV charging stations in the form of rebates, tax credits, and other financial incentives, such as payments for regulatory credits.

The EV market relies on these governmental rebates, tax credits, and other financial incentives to significantly lower the effective price of EVs and EV charging stations to customers.

The EV market relies on these governmental rebates, tax credits, and other financial incentives to

significantly lower the effective price of EVs and EV charging stations to customers.

However, these incentives may expire on a particular date, end when the allocated funding is exhausted, or be reduced or terminated as a matter of regulatory or legislative policy.

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Further, the availability of such credits depends on continued governmental support for these programs.

If these programs are modified, reduced or eliminated, our ability to generate this revenue in the future could be

adversely impacted.

If these programs are modified, reduced or eliminated, our ability to generate this revenue in the future could be adversely impacted.

While we have derived an immaterial percentage of other revenue from these regulatory credits, we expect revenue from this source as a percentage of revenue to increase over time.

We offer proprietary V2G technology and services and intend to expand our market share over time in our product categories, leveraging the network effect of its V2G technology, services and GIVe software platform.

We offer proprietary V2G technology and services and intend to expand our market share over time in our product categories, leveraging the network effect of our V2G technology, services and GIVe software platform.

Existing competitors may expand their product offerings and sales strategies, and new competitors may enter the market.

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Revenue from North America and Europe is expected to contribute significantly to our total revenue in the near-to-intermediate term, while revenue from Japan is expected to increase over the longer run due to the early stage nature of Japan's market for V2G technology and services.

We have used a portion of the proceeds from the Business Combination to increase our sales and marketing activities, and may in the future pursue potentially strategic acquisitions in North America and Europe.

We are also positioned to grow our North American and European business through future partnerships with charge point operators, OEMs and leasing companies.

We are positioned to grow our North American and European business through future partnerships with charge point operators, OEMs and leasing companies.

However, we may experience competition with other providers of EV charging station networks for installations.

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We see a significant market opportunity for V2G, totaling approximately over $6 trillion and our management believes it is well positioned to capture this global opportunity for a variety of reasons:

• First, our intellectual property ("IP") includes key patents, making it difficult for competitors to perform V2G functions without violating our IP.

Our technology originated with an academic unit at the University of Delaware starting in 1996 and not only had decades of development but tens of millions of dollars in project funding invested prior to our acquisition of the IP and commercialization of the technology.

• First, our intellectual property includes key patents, making it difficult for competitors to perform V2G functions without violating our intellectual property.

• Second, we are already qualified by multiple Transmission System Operators, which typically take anywhere from one to three years to get approval.

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2023 2022 Change

Products and services $ 4,913,956 $ 2,920,627 $ 1,993,329 68.3 %

Products $ 5,843,187 $ 4,129,246 $ 1,713,941 41.5 %

Services $ 2,162,218 $ 784,710 $ 1,377,508 175.5 %

Grants 326,757 459,427 (132,670) (28.9) %

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Operating expenses

Cost of product and service revenue 4,196,788 2,002,197 2,194,591 109.6 %

Cost of products 5,804,011 3,609,461 2,194,550 60.8 %

Cost of services 1,177,333 587,327 590,006 100.5 %

Selling, general and administrative expenses 24,694,693 30,115,571 (5,420,878) (18.0) %

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Operating loss (32,105,275) (36,915,544) 4,810,269 (13.0) %

Other income (expense)

Interest income (expense) 134,579 (585,157) 719,736 (123.0) %

Financing costs — (46,754,794) 46,754,794 100.0 %

Change in fair value of private warrants liability 11,986,462 (312,400) 12,298,862 (3,936.9) %

Change in fair value of derivative liability 152,723 (14,342) 167,065 NM

Interest income, net 108,182 134,579 (26,397) (19.6) %

Change in fair value of warrants liability 216,263 11,986,462 (11,770,199) NM

Change in fair value of derivative liability 49,497 152,723 (103,226) (67.6) %

Other, net 436,146 85,074 351,072 412.7 %

Total other income (expense), net 12,358,838 (47,384,510) 59,743,348 NM

Total other income, net 810,088 12,358,838 (11,548,750) NM

Loss before taxes (31,295,187) (24,556,706) (6,738,481) 27.4 %

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Total revenue was $8.3 million for the year ended December 31, 2023, compared to $5.4 million for the year ended December 31, 2022, an increase of $3.0 million, or 55.1%.

The increase is attributed to a $2.0 million increase in products and services revenue, partially offset by a decrease of $0.8 million in grants revenue.

Products and services revenue for the year ended December 31, 2022 consist of sales of school buses of $1.7 million, DC and AC Chargers, including lease interest revenue of approximately $2.4 million, grid services revenue of $0.4 million, and engineering services of $0.3 million.

The increase is attributed to a $1.7 million increase in products and $1.4 million increase in services revenue due to higher customers sales orders and shipments, partially offset by a decrease of $0.1 million in grants revenue.

Products and services revenue for the year ended December 31, 2023 consisted of sales of school buses of $1.0 million , DC and AC Chargers of $4.8 million , grid services revenue of $0.8 million , and engineering services of $1.3 million .

Cost of Product and Service Revenue

Cost of product and service revenues for the year ended December 31, 2022, increased by $2.2 million, or 109.6%, and margins decreased by 17.5%, to 14.0%, from 31.4% compared to the prior year period.

The decrease in margin was mostly due to the impact of lower margin school buses sales, and a higher mix of hardware charging stations sales and a lower mix of engineering services during the year ended December 31, 2022.

Cost of products and services revenues for the year ended December 31, 2023, increased by $2.8 million to $7.0 million, or 66.3%, compared to $4.2 million for the year ended December 31, 2022 due to higher customers sales orders and shipments.

Products and services margins for the year ended December 31, 2023 decreased by 1.8%, to 12.8%, compared to 14.6% for the same prior year period.

Margin was negatively impacted mostly by a higher mix of hardware charging stations sales, including the impact of lower margin school buses sales, offset by a lower mix of engineering services during the year ended December 31, 2023.

Selling, General and Administrative Expenses

Selling, general and administrative expenses consist of selling, marketing, advertising, payroll, administrative, legal finance, and professional expenses.

Selling, general and administrative expenses were $30.1 million for the year ended December 31, 2022 as compared to $22.9 million for the year ended December 31, 2021, an increase of $7.2 million, or 31.5%.

The increases during the year ended December 31, 2022 were primarily attributable to increases in compensation expenses of $1.6 million, including share-based compensation, office and warehouse facilities lease expenses of $0.8 million, Directors and Officers insurance expenses of $0.5 million, professional fees related to internal operational reviews of $1.5 million, governance and other public company costs of $2.3 million , and software subscriptions expenses of $0.5 million.

Expenses resulting from the consolidation of Levo's activities during the year ended December 31, 2022, contributed $1.6 million to the increase in selling, general and administrative expenses.

Selling, general and administrative expenses were $24.7 million for the year ended December 31, 2023 as compared to $30.1 million for the year ended December 31, 2022, a decrease of $5.4 million, or 18.0%.

The decrease during the year ended December 31, 2023 was primarily attributable to decreases in compensation expenses of $1.7 million, including share-based compensation, decreases in travel related expenses of $0.7 million , decreases in subcontractor and outside services expenses of $0.3 million , decreases in professional fees related to internal operational reviews of $1.5 million, decreases in insurance related expenses of $1.0 million, partially offset by increases in audit services fees of $0.7 million , increases in bad debt expenses of $0.1 million , increased in lease expenses related to the main corporate office and warehouse of $0.1 million , increase in office expenses of $0.2 million , increase in legal expenses of $0.4 million and software subscriptions expenses of $0.6 million.

Expenses resulting from the consolidation of Levo's activities during the year ended December 31, 2023, contributed $2.3 million to the decrease in selling, general and administrative expenses.

Research and Development Expenses

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The increases during the year ended December 31, 2023 were primarily attributable to hiring of engineering personnel, which resulted in increases in compensation expenses and subcontractor expenses used to advance the Company's platform functionality and integration with more vehicles.

Other Income (Expense)

Other income (expense) consists primarily of interest expense, financing costs, change in fair value of warrants liability and derivative liability, and other income (expense).

Other income (expense) increased by $59.74 million of income, from $47.38 million of other expense for the year ended December 31, 2021 to $12.36 million in other income for the year ended December 31, 2022.

The increase in income during the year ended December 31, 2022 were primarily attributable to the change in fair values of the warrants liability, derivative liability and interest income, and because financing costs recorded in 2021 did not recur in 2022.

The financing costs were associated with the fair value of warrants and stock option ("Instruments") granted to Stonepeak and Evolve in May 2021 in conjunction with the formation of Levo.

We recorded the estimated fair value of the Instruments issued as an expense during the second quarter of 2021 because we determined that there was not sufficient basis to record deferred financing costs associated with Stonepeak and Evolve’s plans to contribute capital to the Levo venture.

The expense is non-cash and does not impact the existing conditional capital contribution commitment we have from Stonepeak and Evolve or the pursuit of customer deployments funded by this conditional capital contribution commitment..

Additionally, during the year ended December 31, 2022, a gain of $8.68 million resulting from change in the carry value of the Stonepeak unvested warrants was recognized as the fair value of the unvested warrants decreased to zero because it was determined that it is not probable that the warrants will vest.

Also, the fair value of the private warrants liability decrease significantly by $0.86 million driven by the decline in our common stock price.

Other Income, net

Other income, net consists primarily of interest expense, financing costs, change in fair value of warrants liability and derivative liability, and other income (expense).

Other income, net decreased by $11.5 million of income, from $12.4 million of other income for the year ended December 31, 2022 to $0.81 million in other income for the year ended December 31, 2023.

The decrease during the year ended December 31, 2023 was primarily attributable to the change in fair value of the warrants liability and derivative liability, partially offset by gains realized from the sale of our equity investment in Switch EV Ltd (See Note 6 ) and sublease income related to the subleasing of part of our main office space (See Note 16 ).

In the years ended December 31, 2023 and 2022, we recorded nominal income tax expenses.

The income tax expenses during the years ended December 31, 2022 and 2021 were nominal primarily due to operating losses that receive no tax benefits as a result of a valuation allowance recorded for such losses.

The income tax expenses during the years ended December 31, 2023 and 2022 were nominal primarily due to operating losses that receive no tax benefits as a result of a valuation allowance.

Net loss increased by $6.7 million, or 27.4%, from $24.6 million for the year ended December 31, 2022 to $31.3 million for the year ended December 31, 2023.

The increase in net loss was primarily due to increase in operating expenses of $9.7 million and increase in other expenses of $59.7 million for the aforementioned reasons.

The increase in net loss was primarily due to decrease in other expenses of $11.5 million, and an increase in operating expenses of $4.8 million, and which includes an increase in cost of product of $2.8 million mainly associated with the loss on the sale of school buses, partially offset by increase in revenue of $3.0 million for the aforementioned reasons.

Net Loss Attributable to Non-Controlling Interest

Net loss attributable to the non-controlling interest in Levo was $0.5 million for the year ended December 31, 2022.

Net loss attributable to the non-controlling interest in Levo was $0.01 million and $0.54 million for the year ended December 31, 2023 and 2022, respectively.

Net loss is allocated to non-controlling interests in proportion to the relative ownership interests of the holders of non-controlling interests in Levo, an entity formed by us with Stonepeak and Evolve.

We own 51% of Levo's common units and Stonepeak and Evolve own 49% of Levo's common units.

We have determined that Levo is a variable interest entities (“VIE”) in which we are the primary beneficiary.

Accordingly, we consolidate Levo and record a non-controlling interest for the share of Levo owned by Stonepeak and Evolve during the years ended December 31, 2022 and 2021.

We have determined that Levo is a variable interest entity (“VIE”) in which we are the primary beneficiary.

Accordingly, we consolidated Levo and recorded a non-controlling interest for the share of Levo owned by Stonepeak and Evolve during the years ended December 31, 2023 and 2022.

Liquidity and Capital Resources

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We have incurred net losses and negative cash flows from operations since our inception.

We have funded our business operations primarily with the issuance of equity and convertible notes, borrowings and cash from operations.

During the year ended December 31, 2021, we raised net proceeds of $61.8 million from the Business Combination and PIPE Offering (see our 2021 Form 10-K/A for details) to support our business operations.

We have funded our business operations primarily with the issuance of equity and convertible notes, and cash from operations.

We plan to fund current operations through increased revenues and raising additional capital.

Please see below for details.

However, there can be no assurance we will be successful in raising necessary funds in the future, on acceptable terms or at all.

On April 25, 2022, we filed a shelf registration statement with the SEC which will allow us 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.

February 2024 Public Offering

On January 31, 2024, we entered into an underwriting agreement (the “Underwriting Agreement”) with Craig-Hallum Capital Group LLC (“Craig-Hallum”) regarding an underwritten public offering of our securities (the “Offering”).

The Offering was conducted pursuant to our Registration Statement on Form S-1 (File No.

333-276415) filed with the SEC, which was declared effective as of January 31, 2024.

On February 2, 2024, we completed the Offering for gross proceeds of approximately $9.6 million prior to deducting underwriting discounts and commissions and offering expenses.

Craig-Hallum received underwriting discounts and commissions equal to 7.0% of the gross proceeds of the Offering, and is further entitled to receive 7.0% of the gross proceeds received by us in connection with the exercise of any of the outstanding Series B Warrants issued in the Offering.

As noted above, on January 31, 2024, we entered into an Underwriting Agreement regarding the Offering which was comprised of the following:

3,035,000 shares of common stock;

1,765,000 pre-funded warrants (“Pre-Funded Warrants”) to purchase shares of common stock;

4,800,000 Series A Warrants (“Series A Warrants”) to purchase shares of common stock, with an initial exercise price of $2.00 per share and a term of five years following the issuance date;

4,800,000 Series B Warrants (“Series B Warrants”) to purchase shares of common stock with an exercise price of $2.00 per share and a term of nine months following the issuance date;

4,800,000 Series C Warrants (“Series C Warrants”) to purchase shares of common stock with an exercise price of $2.00 per share and a term of five years following the issuance date, subject to early expiration as described below.

Each share of common stock and Pre-Funded Warrant issued in the Offering was accompanied by a Series A Warrant to purchase one share of common stock, a Series B Warrant to purchase one share of common stock and a Series C Warrant to purchase one share of common stock.

The combined price per share of common stock and the accompanying Series A Warrant, Series B Warrant and Series C Warrant was $2.00.

The combined price per share of each Pre-Funded Warrant and accompanying Series A Warrant, Series B Warrant, and Series C Warrant was equal to $1.9999, and the exercise price of each Pre-Funded Warrant is $0.0001 per share.

The Series C Warrants may only be exercised to the extent and in proportion to a holder of the Series C Warrants exercising its Series B Warrants, and are subject to an early expiration of nine months, in proportion and only to the extent any Series C Warrants expire unexercised.

In addition, we granted Craig-Hallum warrants to purchase up to 480,000 shares of common stock (the “Underwriter Warrants”) at an exercise price of $2.00 per share.

The Underwriter Warrants have a term of five years and are immediately exercisable, provided that 240,000 of the shares of common stock underlying the Underwriter Warrants shall only be exercisable pro rata upon the exercise of the Series B Warrants issued in the Offering.

Shelf Registration

On April 25, 2022, we filed a shelf registration statement with the SEC on Form S-3 which allow us, subject to limitations under the baby shelf rules discussed below, 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.

We believe that we will be able to raise capital by issuing securities pursuant to its effective shelf registration statement.

On May 5, 2022, we entered into an at-the-market offering agreement (the "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, we 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% 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 our shelf registration statement describe above.

Our ability to utilize the full capacity of our shelf registration, or any future shelf registration on Form S-3, is limited by our compliance with the baby shelf rules.

Pursuant to the “baby shelf rules” promulgated by the SEC, if our public float is less than $75.0 million as of specified measurement

periods, the number of securities that may be offered and sold by us under a Form S-3 registration statement, including pursuant to our shelf registration statement, in any twelve-month period is limited to an aggregate amount that does not exceed one-third of our public float.

As a result, we will be limited by the baby shelf rules until such time our public float exceeds $75 million, which means we only have the capacity to sell shares up to one-third of our public float under shelf registration statements in any twelve-month period.

At the Market Offerings and Registered Direct Offerings

2022 ATM Offering Program

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

From time to time during the term of the Sales Agreement, we could 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 were entitled to collect a fee equal to 3% of the gross sales price of all shares of common stock sold pursuant to the Sales Agreement.

Shares of common stock sold under the Sales Agreement were offered and sold pursuant to our shelf registration statement describe above.

During the year ended December 31, 2023, we sold 19,822 shares of common stock pursuant to the Sales Agreement at an average price of $99.40 per share for aggregate net proceeds of approximately $3.8 million.

The Sales Agreement terminated pursuant to its terms in June 2022.

January 2023 ATM Offering Program

On January 31, 2023, we 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 we 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 “January 2023 ATM Offering”).

We will pay the Agent a commission of 3.0% of the aggregate gross sales prices of the Shares.

We will also reimburse the Agent for fees and disbursements of its legal counsel in an amount not to exceed $50,000.

We intend to use the net proceeds from the January 2023 ATM Offering for working capital and general corporate purposes.

Under current SEC regulations, as of the filing of this Annual Report on Form 10-K, our public float is less than $75 million, and under SEC regulations for so long as our public float remains less than $75 million, the amount we can raise through primary public offerings of securities in any twelve-month period using shelf registration statements is limited to an aggregate of one-third of our public float, which is referred to as the baby shelf rules.

As of March 21, 2023 , our public float was approximately $ $9.0 million, based on 15,865,441 share s of outstanding common stock held by non-affiliates and at a price of $0.57 per share, which was the last reported sale price of our common stock on the Nasdaq Capital Market on March 21, 2023 .

As a result of our public float being below $75 million, we will be limited by the baby shelf rules until such time as our public float exceeds $75 million, which means we only have the capacity to sell shares up to one-third of our public float under shelf registration statements in any twelve-month period.

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.

2023 ATM Offering Program

On January 31, 2023, we entered into an at-the-market Offering Agreement (the “ATM Agreement”) with Craig-Hallum, as sales agent ("Agent"), pursuant to which we could offer and sell, from time to time through the Agent shares of our common stock (the “Shares”), having an aggregate offering price of up to $25,000,000.

We paid the Agent a commission of 3.0% of the aggregate gross sales prices of the Shares, and we reimbursed the Agent for fees and disbursements of its legal counsel in the amount of $50,000.

During the year ended December 31, 2023 , we sold 37,804 shares of common stock pursuant to the ATM Agreement at an average price of $25.60 per share for aggregate net proceeds of approximately $0.9 million.

Effective October 16, 2023, we and the Agent agreed to terminate the ATM Agreement .

February 2023 Registered Direct Offering

On February 17, 2023, we 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”).

On February 17, 2023, we entered into a subscription agreement with a certain institutional and accredited investor, relating to the issuance and sale of 13,587 shares of common stock in a registered direct offering (the “February 2023 Offering”).

The offering price for the shares was $36.80 per share of common stock.

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The aggregate gross proceeds from the February 2023 Offering was approximately $0.5 million.

We intend to use the net proceeds from the February 2023 Offering for working capital and general

corporate purposes.

Chardan Capital Markets LLC acted as the placement agent for the February 2023 Offering and received a sales commission of 3% of the gross proceeds.

July 2022 Securities Purchase Agreement, Pre-Funded Warrants and Warrants

On July 27, 2022, we 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, 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 was made pursuant to the effective shelf registration statement described above and closed on July 29, 2022.

The offering price for the Shares was $3.50 per Share and the offering price for the Pre-Funded Warrants 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 will be 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 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 $13.1 million.

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

Craig-Hallum Capital Group LLC (the “Placement Agent”) was the exclusive placement agent for the July 2022 Offering and received 6.0% of the gross proceeds of the July 2022 Offering.

We believe that our cash balance as of December 31, 2022, in addition to our cash flows from operations, will be sufficient to fund our working capital and capital expenditure requirements for the next 12 months from the filing date of this Annual Report.

Equity Forward Purchase

Pursuant to a letter agreement dated April 23, 2021, our Chief Executive Officer and Chief Operating Officer committed to purchase from us, and we committed to sell to them, 134,499 shares of our 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 fulfilled their obligations and have purchased from us a total of 134,499 shares of our common stock for $14.87 per share or a total of approximately $2,000,000.

Chardan acted as the placement agent for the February 2023 Offering and received a sales commission of 6.0% of the gross proceeds.

April 2023 Registered Direct Offering

On April 14, 2023, we entered into a subscription agreement with a certain institutional and accredited investor, relating to the issuance and sale of 45,455 shares of common stock in a registered direct offering (the “April 2023 Offering”).

The offering price for the shares was $22.00 per share of common stock.

The closing of the April 2023 Offering occurred on April 17, 2023.

The aggregate gross proceeds from the April 2023 Offering was approximately $1.0 million.

Chardan acted as the placement agent for the April 2023 Offering and received a sales commission of 6.0% of the gross proceeds.

June 2023 Registered Direct Offering

On June 6, 2023, we entered into a subscription agreement with a certain institutional and accredited investor, relating to the issuance and sale of 62,313 shares of common stock in a registered direct offering (the “June 2023 Offering”).

The offering price for the shares was $16.00 per share of common stock.

The closing of the June 2023 Offering occurred on June 6, 2023.

The aggregate gross proceeds from the June 2023 Offering was approximately $1.0 million.

Chardan acted as the placement agent for the June 2023 Offering and received a sales commission of 6.0% of the gross proceeds.

October 2023 Offerings

On October 18, 2023, we entered into a marketed offering relating to the issuance and sale of 178,571 shares of our common stock.

The offering price for the shares was $5.60 per share of common stock.

The closing of the offering occurred on October 20, 2023.

The aggregate gross proceeds received by us from the market offering was approximately $1.0 million.

Aegis Capital Corp acted as the underwriting agent of offering and received underwriting discounts and commissions equal to 7.0% of the gross proceeds.

In addition, we granted Aegis Capital Corp.

a 45-day option to purchase up to 26,786 of additional shares of common stock, less underwriting discounts and commissions solely to cover over-allotments.

On October 20, 2023, Aegis exercised the option to purchase over-allotments shares of 19,931 at offering price of $5.60 per share.

The aggregate gross

proceeds from the exercise of over-allotments shares was approximately $0.1 million.

Aegis Capital Corp received underwriting discounts and commissions equal to 7.0% of the gross proceeds of the exercise of the over-allotment option.

On October 25, 2023 we entered into a definitive agreement with a single institutional investor for the purchase and sale of 344,324 shares of common stock and pre-funded warrants to acquire shares of common stock in a registered direct offering.

The purchase price of each share was $6.00 per share.

The purchase price for the pre-funded warrants is equivalent to the purchase price for the shares, less the exercise price of $0.0001.

The aggregate gross proceeds to us was approximately $2.1 million .

The transaction closed on October 27, 2023, and was subject to the satisfaction of customary closing conditions.

On August 4, 2021, we formed Levo with Stonepeak and Evolve to rapidly accelerate the deployment of electric fleets, including zero-emission electric school buses for school districts in the United States through V2G hubs and TaaS.

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Purchase Commitments

On July 20, 2021, we issued a purchase order (“PO”) to our 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 us that they 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, we received a partial shipment of the DC Chargers, for which we 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 we and the supplier are unable to align on mutually agreeable terms to resolve the dispute relating to the PO, we believe that we have 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.

We believe that the supplier’s position does not have merit and we intend to exercise all available rights and remedies in our defense should any legal proceeding result from such dispute.

On November 2, 2022, we received a demand for arbitration from our 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.

On July 20, 2021, we issued a purchase order (“PO”) to our supplier, Rhombus Energy Solutions, Inc.

(“Rhombus”), for a quantity of DC Chargers and dispensers for EVs (“DC Chargers”), for a total price of $13.2 million.

As previously disclosed, a dispute (the "Dispute") arose as to the PO, and an arbitration proceeding was initiated.

On February 2, 2024 (the “Settlement Date”), we and Rhombus entered into a settlement and release agreement (the “Settlement Agreement”) pursuant to which, among other things, we agreed to pay Rhombus approximately $0.46 million for certain initial DC Chargers within 15 days from the Settlement Date.

We further agreed to pay Rhombus an aggregate of $2.4 million for certain DC Chargers upon shipment with payments correlating to the amounts shipped due prior to shipment, a minimum of 50% of which shall be paid within 12 months after the Settlement date, with the remaining balance, if any, to be paid within 24 months after the Settlement Date.

The Settlement Agreement further provides for the dismissal of the legal action as to us and Rhombus.

We and Rhombus agreed to release one another from any and all claims relating to the Dispute.

Years Ended December 31,

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Net cash used in operating activities during the year ended December 31, 2023 was $21.3 million as compared to net cash used of $34.1 million in the year ended December 31, 2022.

The $4.9 million increase in net cash used in operating activities was primarily attributable to higher use of cash for working capital during the year ended December 31, 2022 as compared to the same prior period.

Working capital during the year ended December 31, 2022 was impacted by, among other items, the higher net loss of $24.6 million, resulting from increases in compensation expenses, increases in professional fees related to internal operational reviews, increases in governance and other public company costs, and cash purchases to fund higher inventory levels.

These were partially offset by improved timing and management of vendor terms compared to the cash settlement of such items.

During the year ended December 31, 2022 and 2021, cash used in investing activities was $1.44 million and $0.27 million, respectively.

Net cash used in investing activities were used to purchase fixed assets and a future equity investment in a partnership alliance.

Net cash provided by financing activities for the year ended December 31, 2022 was $19.1 million, of which $13.1 million were the proceeds from the July 2022 Offering, partially offset by issuance cost, $3.8 million was provided in connection with the proceeds from the 2022 at-the-market common stock offering, partially offset by issuance cost, proceeds from the equity forward option put exercise of $2.0 million, and proceeds from the exercise of stock options of $0.2 million.

Cash provided by financing activities for the year ended December 31, 2021 was $59.7 million, of which $58.2 million was provided in connection with the Business Combination, $14.3 million was provided in connection with the PIPE offering, $3.1 million was provided through the issuance of Levo's preferred stock, and $0.6 million was provided from the exercise of stock options, partially offset by issuance costs of $4.0 million, the repayment of Newborn sponsor loans of $0.5 million, the $6.0 million repurchase of common stock, the payment of investor stock liability of $2.0 million and the payment of legal and accounting costs of $1.0 million associated with the Business Combination.

The $12.8 million decrease in net cash used in operating activities was primarily attributable to lower use of cash for working capital during the year ended December 31, 2023 as compared to the same prior period.

Working capital during the year ended December 31, 2023 was impacted by, among other items, higher operating loss of $32.1 million, resulting from higher costs of sales, partially offset by decreases in compensation expenses, decreases in professional fees related to internal operational reviews, decreases in governance and other public company costs, and decreases in cash purchases to fund inventory levels.

Additionally, improved timing and management of vendor terms compared to the cash settlement of such items contributed t o lower c ash use of cash for working capital.

During the year ended December 31, 2023 cash provided by investing activities was $1.14 million as compared to net cash used for investing activities of $1.44 million during the year ended December 31, 2022.

Net cash provided by investing activities were from the sale of our equity investment in Switch EV Ltd partnership alliance, partially offset by purchase of fixed assets.

Net cash provided by financing activities for the year ended December 31, 2023 was $5.9 million, of which $5.0 million were the proceeds from the various 2023 Offerings, partially offset by issuance cost, and $0.9 million was provided in connection with the proceeds from the 2023 at-the-market common stock offering, partially offset by issuance cost.

Cash provided by financing activities for the year ended December 31, 2022 was $19.1 million, of which $13.1 million were the proceeds from the 2022 Offering, partially offset by issuance cost, $3.8 million was provided in connection with the proceeds from the 2022 at-the-market common stock offering, partially offset by issuance cost, proceeds from the equity forward option put exercise of $2.0 million, and proceeds from the exercise of stock options of $0.2 million.

Critical Accounting Policies and Estimates

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Actual results may differ from these estimates under different assumptions or conditions and any such differences may be material.

While our significant accounting policies are described in more detail in Note 2 to our consolidated financial statements included elsewhere in this report, we believe the following accounting policies and estimates to be most critical to the preparation of its consolidated financial statements.

While our significant accounting policies are described in more detail in Note 2 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K, we believe the following accounting policies and estimates to be most critical to the preparation of its consolidated financial statements.

Revenue Recognition

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Revenue is recorded based on the transaction price excluding amounts collected on behalf of third parties such as sales taxes, which are collected on behalf of and remitted to governmental authorities, or driver fees, collected on behalf of customers who offer public charging for a fee.

When agreements involve multiple distinct performance obligations, we accounts for individual performance obligations separately if they are distinct.

When agreements involve multiple distinct performance obligations, we account for individual performance obligations separately if they are distinct.

We apply significant judgment in identifying and accounting for each performance obligation, as a result of evaluating terms and conditions in contracts.

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(1) determining whether the equity investment at risk is sufficient to permit the entity to finance its activities without additional subordinated financial support, (2) evaluating whether the equity holders, as a group, can make decisions that have a significant effect on the success of the entity, (3) determining whether two or more parties’ equity interests should be aggregated, (4) determining whether the equity investors have proportionate voting rights to their obligations to absorb losses or rights to receive returns from an entity and (5) evaluating the nature of relationships and activities of the parties involved in determining which party within a related-party group is most closely associated with a VIE and hence would be deemed the primary beneficiary.

Stock-based compensation

Share-based compensation

We grant stock options to employees and non-employees.

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The tax benefits recognized from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement.

Interest and penalties related to unrecognized tax benefits which, as of the date of this report, have not been material, are recognized within provision for income taxes.

Interest and penalties related to unrecognized tax benefits which, as of the date of this Annual Report, have not been material, are recognized within provision for income taxes.

Recent Accounting Pronouncements

See Note 2 to the consolidated financial statements included elsewhere in this report for more information regarding recently issued accounting pronouncements.

See Note 2 to the consolidated financial statements included elsewhere in this Annual Report for more information regarding recently issued accounting pronouncements.

Emerging Growth Company Accounting Election

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This may make it difficult or impossible to compare our financial results with the financial results of another public company that is either not an emerging growth company or is an emerging growth company that has chosen not to take advantage of the extended transition period exemptions because of the potential differences in accounting standards used.

See Note 2 to the consolidated financial statements included elsewhere in this report for the recent accounting pronouncements adopted and the recent accounting pronouncements not yet adopted for the year ended December 31, 2022.

See Note 2 to the consolidated financial statements included elsewhere in this Annual Report for the recent accounting pronouncements adopted and the recent accounting pronouncements not yet adopted for the year ended December 31, 2023.

In addition, we intend to rely on the other exemptions and reduced reporting requirements provided by the JOBS Act.

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Financial Statements and Supplementary Data

The information required by this item is incorporated by reference to the consolidated financial statements and accompanying notes set forth at the end of this Annual Report on Form 10-K.

The information required by this item is incorporated by reference to the consolidated financial statements and accompanying notes set forth in the F-pages at the beginning on page F-1 of this Annual Report on Form 10-K.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis