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, 2023. 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 effective as of December 31, 2023. 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 reportin g was effective as of December 31, 2023. 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. Remediation of Material Weakness in Internal Control Over Financial Reporting As previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022, management concluded that in connection with the preparation of our consolidated financial statements for the years ended December 31, 2022, 2021, 2020 and 2019, that it identified control deficiencies in the design and operation of our internal control over financial reporting that constituted material weaknesses. 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- 71 keeping practices, and documenting the review of agreements and accounting estimates, and addressing and evaluating the accounting of complex financial matters. During the twelve months ended December 31, 2023 , management has evaluated the design and operating effectiveness of internal controls over financial reporting and has taken the following steps to remediate the identified material weaknesses: • implemented an Enterprise Resource Planning ("ERP") system for the Company's accounting books and records. The ERP system has further provided and enhanced segregation of duties through its internal workflow processes and procedures; • utilized outside technical accounting consultants to supplement the Company’s resources to assist in evaluating complex accounting transactions matters; and • utilized 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. During the twelve months ended December 31, 2023 , management tested the remediated controls related to the material weakness described above for a sufficient period of time, and management has concluded, through testing, that as of December 31, 2023 , these controls were operating effectively. Therefore, management has concluded that the material weaknesses previously identified in the Company’s internal control over financial reporting have been remediated at December 31, 2023 . Regardless of the previously identified and now remediated material weaknesses, management has concluded that the Company’s consolidated financial statements included in this Annual Report on Form 10-K fairly present, in all material respects, its financial position, results of operations and cash flows as of the date, and for the periods presented, in conformity with U.S. GAAP. Changes in Internal Control over Financial Reporting There is no significant changes, except as discussed above, in our internal control over financial reporting during the year ended December 31, 2023, 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. Item 9B. Other Information None. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. None. 72 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 2024 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days of December 31, 2023. We have adopted a code of ethics for directors, officers (including our principal executive officer, principal financial officer and principal accounting officer) and employees, known as the Code of Ethics. The Code of Ethics is available on our website at http://www.nuvve.com under the Governance section of our Investor Relations page. We will promptly disclose on our website (i) the nature of any amendment to the policy that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions and (ii) the nature of any waiver, including an implicit waiver, from a provision of the policy that is granted to one of these specified individuals that is required to be disclosed pursuant to SEC rules and regulations, the name of such person who is granted the waiver and the date of the waiver. Item 11. Executive Compensation The information required by this item is incorporated by reference to our definitive Proxy Statement for the 2024 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days of December 31, 2023. 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 2024 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days of December 31, 2023. 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 2024 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days of December 31, 2023. Item 14. Principal Accounting Fees and Services The information required by this item is incorporated by reference to our definitive Proxy Statement for the 2024 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days of December 31, 2023. Auditor Name: Deloitte & Touche LLP Auditor Firm ID: PCAOB ID: 34 Auditor Location: San Diego, CA 73 Part IV Item 15. Exhibits, Financial Statement Schedules The following documents are filed as part of this Annual Report on Form 10-K: (1) Financial Statements The consolidated financial statements filed as part of this Annual Report on Form 10-K are listed in the “Index to Financial Statements” on page F-1 of this Annual Report on Form 10-K. (2) Financial Statement Schedules All schedules have been omitted because the required information is not present or not present in amounts sufficient to require submission of the schedules, or because the information required is included in our consolidated financial statements or the notes thereto. (3) Exhibits . The following is a list of all exhibits filed or furnished as part of this Annual Report on Form 10-K. 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 Certificate of Amendment to Amended and Restated Certificate of Incorporation 8-K 3.1 1/22/2024 3.3 Second Amended and Restated Bylaw of Nuvve Holding Corp. 8-K 3.1 12/5/2023 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 4.8 Form of Pre-Funded Warrant 8-K 4.1 10/27/2023 4.9 Form of Series A Warrant to Purchase Common Stock S-1/A 4.9 1/26/2024 4.10 Form of Series B Warrant to Purchase Common Stock S-1/A 4.10 1/26/2024 4.11 Form of Series C Warrant to Purchase Common Stock S-1/A 4.11 1/26/2024 4.12 Form of Pre-Funded Warrant S-1/A 4.12 1/26/2024 4.13 Form of Underwriter Warrant S-1/A 4.13 1/26/2024 4.14 Form of Warrant Agency Agreement between the Company and Computershare Trust Company, N.A. S-1/A 4.14 1/26/2024 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 Amended and Restated Employment Agreement with Gregory Poilasne, dated January 25, 2024 8-K 10.1 1/26/2024 10.5 Amended and Restated Employment Agreement with Ted Smith, dated January 25, 2024 8-K 10.2 1/26/2024 10.6 Amended and Restated Employment Agreement with David Robson, dated January 25, 2024 8-K 10.3 1/26/2024 10.7 Form of Indemnification Agreement 8-K 10.13 3/25/2021 10.8# IP Acquisition Agreement, effective November 2, 2017, between University of Delaware and Nuvve Corporation S-4 10.16 2/4/2021 10.9# Amended and Restated Research Agreement, dated September 1, 2017, between University of Delaware and Nuvve Corporation S-4 10.17 2/4/2021 10.10 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 10.11 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 10.12 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 74 Incorporation by Reference Exhibit No. Description Form Exhibit No. Filing Date 10.13# 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 10.14# 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 10.15# 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 10.16# 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 10.17# 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 10.18^ Form of Securities Purchase Agreement between the Company and the Purchaser, dated July 27, 2022 8-K 10.1 7/28/2022 10.19 Placement Agency Agreement between the Company and Craig-Hallum Capital Group LLC 8-K 10.2 7/28/2022 10.20 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 10.21 Form of Subscription Agreement between the Company and the Purchaser, dated February 17, 2023. 8-K 10.1 2/17/2023 10.22 Nuvve Holding Corp. Amended and Restated 2020 Equity Incentive Plan 8-k 10.1 6/5/2023 10.23 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 10.24 Form of Subscription Agreement between the Company and the Purchaser, dated February 17, 2023. 8-K 10.1 2/17/2023 10.25 Form of Securities Purchase Agreement between the Company and the Purchaser, dated April 14, 2023. 8-K 10.1 4/17/2023 10.26 Form of Securities Purchase Agreement between the Company and the Purchaser, dated June 5, 2023 . 8-K 10.1 6/06/2023 10.27 Form of Securities Purchase Agreement between the Company and the Purchasers named therein, dated October 25, 2023. 8-K 10.1 10/27/2023 10.28# Settlement and Release Agreement, dated February 2, 2024, between the Company and Rhombus Energy Solutions. * 21.1 List of Subsidiaries of Nuvve Holding Corp * 23.1 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 + 97.1 Nuvve Holding Corp. Compensation Clawback Policy * 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 information contained in this document, marked by [***], has been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K because it is both (i) not material and (ii) the type of information that the registrant treats as private or confidential. Item 16. Form 10-K Summary None. 75 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. By: /s/ Gregory Poilasne Gregory Poilasne Chief Executive Officer Date: March 28, 2024 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 Chief Executive Officer March 28, 2024 Gregory Poilasne ( Principal Executive Officer) By: /s/ Ted Smith President, Chief Operating Officer, and Director March 28, 2024 Ted Smith By: /s/ David G. Robson Chief Financial Officer ( Principal Financial Officer and Principal Accounting Officer ) March 28, 2024 David G. Robson By: /s/ Jon M. Montgomery Interim Chairperson of the Board and Director March 28, 2024 Jon M. Montgomery By: /s/ H. David Sherman Director March 28, 2024 H. David Sherman By: /s/ Angela Strand Director March 28, 2024 Angela Strand 76 Financial Statements. INDEX TO FINANCIAL STATEMENTS REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB ID: 34 ) F-2 CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEETS F-3 CONSOLIDATED STATEMENTS OF OPERATIONS F-4 CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS F-5 CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY F-6 CONSOLIDATED STATEMENTS OF CASH FLOWS F-7 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS F-9 F-1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and the Board of Directors of Nuvve Holding Corp. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Nuvve Holding Corp. and subsidiaries (the "Company") as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive loss, stockholders’ equity, and cash flows, for each of the two years in the period ended December 31, 2023, 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, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023, 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 audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. 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 audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits 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 audits 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 audits provide a reasonable basis for our opinion. /s/ Deloitte & Touche LLP San Diego, California March 28, 2024 We have served as the Company’s auditor since 2022. F-2 F-3 NUVVE HOLDING CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS December 31, 2023 December 31, 2022 Assets Current Assets Cash $ 1,534,660 $ 15,753,896 Restricted cash 480,000 480,000 Accounts receivable, net 1,724,899 1,090,467 Inventories 5,889,453 11,551,831 Prepaid expenses 994,719 1,487,582 Deferred costs 1,667,602 1,171,262 Other current assets 751,412 314,528 Total Current Assets 13,042,745 31,849,566 Property and equipment, net 766,264 636,944 Intangible assets, net 1,202,203 1,341,640 Investment in equity securities 670,951 1,670,951 Investment in leases 112,255 97,054 Right-of-use operating lease assets 4,839,526 5,305,881 Financing receivables 288,872 288,872 Security deposit, long-term 27,690 8,682 Total Assets $ 20,950,506 $ 41,199,590 Liabilities, Mezzanine Equity and Stockholders’ Equity Current Liabilities Accounts payable $ 1,694,325 $ 2,390,422 Accrued expenses 4,632,101 3,347,399 Deferred revenue 1,030,056 1,221,497 Operating lease liabilities - current 856,250 824,326 Other liabilities 105,141 113,844 Total Current Liabilities 8,317,873 7,897,488 Operating lease liabilities - noncurrent 4,646,383 5,090,170 Warrants liability 4,621 220,884 Derivative liability - non-controlling redeemable preferred shares 309,728 359,225 Other long-term liabilities 681,438 393,179 Total Liabilities 13,960,043 13,960,946 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, 2023 and December 31, 2022; aggregate liquidation preference of $ 3,750,201 and $ 3,464,606 at December 31, 2023 and December 31, 2022, respectively. 4,193,629 3,547,765 Class D Incentive units, zero par value, 1,000,000 units authorized, 50,000 and 250,000 units issued and outstanding at December 31, 2023 and December 31, 2022, respectively. 216,229 445,479 Stockholders’ Equity Preferred stock, $ 0.0001 par value, 1,000,000 shares authorized; zero shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively — — Common stock, $ 0.0001 par value, 100,000,000 shares authorized; 1,246,589 and 606,804 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively 5,927 2,427 Additional paid-in capital 155,615,962 144,073,505 Accumulated other comprehensive income 93,676 76,182 Accumulated deficit ( 148,240,859 ) ( 116,956,528 ) Nuvve Holding Corp. Stockholders’ Equity 7,474,706 27,195,586 Non-controlling interests ( 4,894,101 ) ( 3,950,186 ) Total Stockholders’ Equity 2,580,605 23,245,400 Total Liabilities, Mezzanine equity and Stockholders’ Equity $ 20,950,506 $ 41,199,590 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, 2023 2022 Revenue Products $ 5,843,187 $ 4,129,246 Services 2,162,218 784,710 Grants 326,757 459,427 Total revenue 8,332,162 5,373,383 Operating expenses Cost of products 5,804,011 3,609,461 Cost of services 1,177,333 587,327 Selling, general, and administrative 24,694,693 30,115,571 Research and development 8,761,400 7,976,568 Total operating expenses 40,437,437 42,288,927 Operating loss ( 32,105,275 ) ( 36,915,544 ) Other income Interest income, net 108,182 134,579 Change in fair value of warrants liability 216,263 11,986,462 Change in fair value of derivative liability 49,497 152,723 Other, net 436,146 85,074 Total other income, net 810,088 12,358,838 Loss before taxes ( 31,295,187 ) ( 24,556,706 ) Income tax expense 1,600 800 Net loss $ ( 31,296,787 ) $ ( 24,557,506 ) Less: Net loss attributable to non-controlling interests ( 12,456 ) ( 538,841 ) Net loss attributable to Nuvve Holding Corp. $ ( 31,284,331 ) $ ( 24,018,665 ) Less: Preferred dividends on redeemable non-controlling interests 285,595 263,846 Less: Accretion on redeemable non-controlling interests preferred shares 645,864 645,866 Net loss attributable to Nuvve Holding Corp. common stockholders $ ( 32,215,790 ) $ ( 24,928,377 ) Net loss per share attributable to Nuvve Holding Corp. common stockholders, basic and diluted $ ( 40.36 ) $ ( 47.55 ) Weighted-average shares used in computing net loss per share attributable to Nuvve Holding Corp. common stockholders, basic and diluted 798,269 524,297 The accompanying notes are an integral part of these consolidated financial statements. F-5 NUVVE HOLDING CORP AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS Years Ended December 31, 2023 2022 Net loss $ ( 31,296,787 ) $ ( 24,557,506 ) Other comprehensive income (loss), net of taxes Foreign currency translation adjustments, net of taxes 17,494 ( 37,264 ) Total comprehensive loss $ ( 31,279,293 ) $ ( 24,594,770 ) Less: Comprehensive loss attributable to non-controlling interests, net taxes ( 12,456 ) ( 538,841 ) Comprehensive loss attributable to Nuvve Holding Corp. $ ( 31,266,837 ) $ ( 24,055,929 ) Less: Preferred dividends on redeemable non-controlling interests ( 285,595 ) ( 263,846 ) Less: Accretion on redeemable non-controlling interests preferred shares ( 645,864 ) ( 645,866 ) Comprehensive loss attributable to Nuvve Holding Corp. common stockholders $ ( 30,335,378 ) $ ( 23,146,217 ) The accompanying notes are an integral part of these consolidated financial statements. F-6 NUVVE HOLDING CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Non-controlling Interests Total Shares Amount Balances December 31, 2021 471,528 $ 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 12,091 47 245,676 — — — 245,723 Share-based compensation — — 5,328,492 — — — 5,328,492 Proceeds from forward option put exercise 3,362 13 1,994,059 — — — 1,994,072 Proceeds from common stock offering, net of offering costs 19,822 79 3,763,417 — — — 3,763,496 Proceeds from Direct Offering, net of offering costs 53,750 215 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 46,250 185 — — — — 185 Currency translation adjustment — — — ( 37,264 ) — — ( 37,264 ) Net loss — — — — ( 24,018,665 ) ( 538,841 ) ( 24,557,506 ) Balances December 31, 2022 606,804 2,427 144,073,505 76,182 ( 116,956,528 ) ( 3,950,186 ) 23,245,400 Exercise of stock options and vesting of restricted stock units 50,471 203 1,215,766 — — — 1,215,969 Share-based compensation — — 4,459,102 — — — 4,459,102 Proceeds from common stock offering, net of offering costs 37,804 150 884,436 — — — 884,586 Proceeds from Direct Offering, net of offering costs 429,010 2,657 4,983,643 — — — 4,986,300 Accretion on redeemable non-controlling interests preferred shares — — — — — ( 645,864 ) ( 645,864 ) Preferred dividends - non-controlling interest — — — — — ( 285,595 ) ( 285,595 ) Issuance of Common Shares related to Warrants 122,500 490 ( 490 ) — — — — Currency translation adjustment — — — 17,494 — — 17,494 Net loss — — — — ( 31,284,331 ) ( 12,456 ) ( 31,296,787 ) Balances December 31, 2023 1,246,589 $ 5,927 $ 155,615,962 $ 93,676 $ ( 148,240,859 ) $ ( 4,894,101 ) $ 2,580,605 The accompanying notes are an integral part of these consolidated financial statements. F-7 NUVVE HOLDING CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Years Ended December 31, 2023 2022 Operating activities Net loss $ ( 31,296,787 ) $ ( 24,557,506 ) Adjustments to reconcile to net loss to net cash used in operating activities Depreciation and amortization 396,210 289,536 Share-based compensation 4,107,634 5,234,878 Change in fair value of warrants liability ( 216,263 ) ( 11,986,462 ) Change in fair value of derivative liability ( 49,497 ) ( 152,723 ) Loss on disposal of asset 862 — Gains on the from the sale of investments securities ( 325,155 ) — Noncash lease expense 476,208 421,183 Change in operating assets and liabilities Accounts receivable ( 634,432 ) 763,302 Inventory 5,445,390 ( 433,644 ) Prepaid expenses and other assets ( 447,604 ) ( 2,072,001 ) Accounts payable ( 696,098 ) ( 3,346,937 ) Accrued expenses and other liabilities 2,191,845 1,340,918 Deferred revenue ( 206,641 ) 417,481 Net cash used in operating activities ( 21,254,328 ) ( 34,081,975 ) Investing activities Purchase of property and equipment ( 188,433 ) ( 438,045 ) Investments in equity securities — ( 1,000,000 ) Proceeds from sale of investments in equity securities 1,325,155 — Net cash provided by (used in) investing activities 1,136,722 ( 1,438,045 ) Financing activities Payment of finance lease obligations ( 8,140 ) ( 9,691 ) 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 4,986,300 13,069,815 Proceeds from common stock offering, net of offering costs 884,586 3,763,494 Proceeds from exercise of stock options — 245,748 Net cash provided by financing activities 5,862,746 19,063,624 Effect of exchange rate on cash 35,624 ( 50,228 ) Net increase (decrease) in cash and restricted cash ( 14,219,236 ) ( 16,506,624 ) Cash and restricted cash at beginning of year 16,233,896 32,740,520 Cash and restricted cash at end of year $ 2,014,660 $ 16,233,896 Years Ended December 31, 2023 2022 Supplemental Disclosure of cash information: Cash paid for income taxes $ — $ — Supplemental Disclosure of Noncash Investing Activity Transfer of inventory to property and equipment 216,988 — Th e accompanying notes are an integral part of these consolidated financial statements. F-8 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 Delaware corporation headquartered in San Diego, California (the “Company” or “Nuvve”), 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. 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. 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) Reverse Stock Split At the Company’s Special Meeting of Stockholders held on January 5, 2024, the Company’s stockholders approved a proposal to authorize a reverse stock split of the Company’s common stock, at a ratio within the range of 1-for-2 to 1-for-40. The Board approved a 1-for-40 reverse split ratio, and on January 19, 2024, the Company filed a Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Company with the Secretary of State of the State of Delaware to effect the reverse split effective January 19, 2024. The reverse stock split is also applicable to the Company’s outstanding warrants, stock options and restricted stock units. The number of shares of common stock into which these outstanding securities are convertible or exercisable are adjusted proportionately as a result of the reverse stock spli t. The exercise prices of any outstanding warrants or stock options will also be proportionately adjusted in accordance with the terms of those securities and the Company’s equity incentive plans. The re verse stock split did not affect the number of authorized shares of the Company's common stock or the par value of the common stock. All issued and outstanding common stock, options to purchase common stock, warrants to purchase common stock and per share amounts contained in the consolidated financial statement have been retroactively adjusted to reflect the reverse stock split for all periods presented. (c) 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 vehicle-to-grid ("V2G") enabled Electric Vehicle ("EV") fleet deployments. Levo utilizes Nuvve’s V2G technology and conditional capital contribution commitments 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, F-9 NUVVE HOLDING CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS such as electric school buses, charging infrastructure powered by Nuvve’s V2G platform, EV and charging station maintenance, energy management, and technical advice. 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. 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 Company has reclassified certain prior period amounts to conform to the current year presentation. 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 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 $ 148.2 million and $ 117.0 million as of December 31, 2023 and December 31, 2022, respectively . During the years ended December 31, 2023 and December 31, 2022 , the Company incurred an operating loss of $ 32.1 million and $ 36.9 million, respectively, and used $ 21.3 million and $ 34.1 million, respectively, of cash in operations. The Company continues to expect to generate operating losses and negative cash flows and will 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 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. 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. 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 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: F-11 NUVVE HOLDING CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) December 31, 2023 December 31, 2022 Assets Cash $ 27,337 $ 27,629 Prepaid expenses and other current assets 1,363 59,794 Total Assets $ 28,700 $ 87,423 Liabilities Accounts payable $ 8,380 $ 8,165 Accrued expenses and dividend payable 620,421 $ 336,713 Derivative liability - non-controlling redeemable preferred shares 309,728 359,225 Total Liabilities $ 938,529 $ 704,103 (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. (e) Profits Interests Units (Class D Incentive Units) Class D Incentive Units are issued by Levo 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) 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-12 NUVVE HOLDING CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (g) 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, annual bonus accrual, and the recognition and disclosure of contingent liabilities. Management evaluates its estimates on an ongoing basis. Actual results could materially vary from those estimates. (h) 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. (i) 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. (j) 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, 2023 and December 31, 2022 was $ 480,000 . (k) 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 credit losses on customer accounts when deemed necessary. Based on the analysis, the Compa ny recorded an allowance for credit losses as o f December 31, 2023 and December 31, 2022. See Note 7 for details. F-13 NUVVE HOLDING CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (l) Concentrations of Credit Risk At December 31, 2023 and 2022, 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, 2023 and 2022, three customers accounted for 30.3 %, and one customer accounted for 32.1 % of total revenue, respectively. During the years ended December 31, 2023 and 2022, the Company's top five customers accounted for approximately 38.9 % and 54.7 %, respectively, o f the Company’s total revenue. At December 31, 2023, three customers in aggregate accounted for 60.9 % of accounts receivable. At December 31, 2022, three customers in aggregate accounted for 40.6 % of accounts receivable. Approximately 74.0 % and 53.6 % of the Company’s trade accounts receivable balance was with five customers at December 31, 2023 and 2022, 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. (m) 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, 2023, and December 31, 2022, the Company’s inventories consisted solely of finished goods and components parts, including school buses added as of December 31, 2022, which the Company sold during the year ended December 31, 2023. 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. (n) 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. (o) 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. (p) 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, 2023 and 2022. (q) 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. F-14 NUVVE HOLDING CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 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, 2023, and December 31, 2022, 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, 2023 or the year ended December 31, 2022. (r) 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, 2023 and 2022, the Company did not contribute to the savings plan. (s) Fair Value Measurement The Company’s financial instruments consist principally of cash, accounts receivable, accounts payable, 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. (t) 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 ). (u) 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. F-15 NUVVE HOLDING CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) The Company’s revenue is primarily derived from sales of EV charging stations, school buses, 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, 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 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 on gross basis 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. F-16 NUVVE HOLDING CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 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. (v) 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. (w) 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, and costs incurred to obtain or to perform contracts, and amortizes these costs over the expected period of benefit which is generally the life of the contract. The Company evaluated incremental contract costs for contracts in place as of December 31, 2023, and December 31, 2022 and determined that these costs are recoverable. (x) 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 not F-17 NUVVE HOLDING CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 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. (y) 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. (z) Share-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. (aa) 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 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. (ab) 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 rent 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. The Company adopted the guidance effective beginning January 1, 2023. The adoption of the guidance did not have a material impact on its consolidated financial statements. F-18 NUVVE HOLDING CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (ac) Recently issued accounting pronouncements not yet adopted In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) Improvements to Reportable Segment Disclosures . ASU 2023-07 requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items to reconcile to segment profit or loss, and the title and position of the Company’s CODM. The amendments in this update also provide new segment disclosure requirements for entities with a single reportable segment, and expand the interim segment disclosure requirements. ASU 2023-07 is effective for the fiscal year ending December 31, 2024. Early adoption is permitted and the amendments in this update are required to be applied on a retrospective basis. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) Improvements to Income Tax Disclosures . ASU 2023-09 requires disclosure of disaggregated income taxes paid in both U.S. and foreign jurisdictions, prescribes standard categories for the components of the effective tax rate reconciliation and modifies other income tax-related disclosures. ASU 2023-09 is effective for the Company’s fiscal year ending December 31, 2025. Early adoption is permitted and the amendments in this update should be applied on a prospective basis, though retrospective adoption is permitted. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. F-19 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, 2023 2022 Revenue recognized over time: Services - engineering and others $ 1,322,953 $ 337,005 Grid services 839,265 447,705 Grants 326,757 459,427 Revenue recognized at point in time: Products 5,843,187 4,129,246 Total revenue $ 8,332,162 $ 5,373,383 The aggregate amount of revenue for the Company’s existing contracts with customers as of December 31, 2023 expected to be re cognized in the future, and classified as deferred revenue on the consolidated balance sheet for year ended December 31, is as follows (this disclosure does not include revenue related to contracts whose original expected duration is one year or less): 2024 $ 697,105 2025 117,535 2026 98,308 2027 55,849 Thereafter 61,259 Total (1) $ 1,030,056 __________________ (1) The revenue recognition is subject to the completion of construction and commissioning of the EV infrastructure. 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, 2023 2022 United States $ 7,858,583 $ 4,839,561 United Kingdom 33,047 195,550 Denmark 440,532 338,272 $ 8,332,162 $ 5,373,383 The following table summarizes the Company’s intangible assets and property, plant and equipment in different geographic locations: December 31, 2023 December 31, 2022 United States $ 1,741,009 $ 1,795,267 United Kingdom 2,894 1,335 Denmark $ 224,564 $ 181,982 $ 1,968,467 $ 1,978,584 F-20 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, 2023 and December 31, 2022, 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, 2023 Total Gains (Losses) For The Year Ended December 31, 2023 Recurring fair value measurements Private warrants $ — $ — $ — $ — $ 2,000 Stonepeak and Evolve unvested warrants $ — $ — $ — $ — $ — Institutional/Accredited Investor Warrants $ — $ — $ 4,621 $ 4,621 $ 214,263 Derivative liability - non-controlling redeemable preferred shares $ — $ — $ 309,728 $ 309,728 $ 49,497 Total recurring fair value measurements $ — $ — $ 314,349 $ 314,349 $ 265,760 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 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, 2023: Private Warrants Stonepeak and Evolve unvested warrants Institutional/Accredited Investor Warrants Non-controlling redeemable preferred shares - derivative liability Balance at December 31, 2022 $ 2,000 $ — $ 218,884 $ 359,225 Initial fair value Total (gains) losses for period included in earnings ( 2,000 ) — ( 214,263 ) ( 49,497 ) Balance at December 31, 2023 $ — $ — $ 4,621 $ 309,728 The fair value of the level 3 Private Warrants was estimated at December 31, 2023 using the Black-Scholes model which used the following inputs: term of 2.2 years, risk free rate of 4.2 %, no dividends, volatility of 60.0 %, and strike price of $ 460.00 . 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 $ 460.00 . The fair value of the level 3 Institutional/Accredited Investor Warrants was estimated at December 31, 2023 using the Black-Scholes model which used the following inputs: term of 4.1 years, risk free rate of 3.92 %, no dividends, volatility of 63.0 %, common stock price of $ 0.12 and strike price of $ 150.00 . 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 %, common stock price of $ 0.50 and strike price of $ 150.00 . F-21 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, 2023 using the M onte Carlo Simulation model which used the following inputs: terms range from 0.6 years to 7.0 years, risk free rate of 3.9 %, no dividends, volatility of 79.0 % and probability of redemptions triggered of 75.0 %. 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 4.00 %, no dividends, volatility of 63.0 % and probability of redemptions triggered of 75.0 %. There were no transfers between Level 1 and Level 2 of the fair value hierarchy in 2023 and 2022. 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, 2023: Series C Unvested Warrants Series D Unvested Warrants Series E Unvested Warrants Series F Unvested Warrants Fair value (in millions) $ — $ — $ — $ — Valuation methodology Monte Carlo Simulation & Black Scholes Monte Carlo Simulation & Black Scholes Monte Carlo Simulation & Black Scholes Monte Carlo Simulation & Black Scholes Capital expenditure forecast (in millions) $ — $ — $ — $ — 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. Therefore, at December 31, 2023, the Company has determined that it is unlikely that the unvested warrants will vest. 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) $ — $ — $ — $ — 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 $ 600.0 $ 800.0 $ 1,200.0 $ 1,600.0 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) 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. Therefore, at December 31, 2022, the Company has determined that it is unlikely that the unvested warrants will vest. 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. F-22 NUVVE HOLDING CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 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, 2023 December 31, 2022 Other long term liabilities: Derivative liability - non-controlling redeemable preferred shares $ 309,728 $ 359,225 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 $ 43,399 and zero fo r the years ended December 31, 2023 and December 31, 2022, respectively. 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. On March 30, 2023, the Company sold its investment interest in Switch for $ 1.3 million. A gain of $ 0.3 million was recorded in Other, net on the statements of operations. Note 7 – Account Receivables, Net The following tables summarizes the Company's account receivables: As of December 31, 2023 2022 Trade receivables $ 2,107,497 $ 1,149,301 Less: allowance for credit losses ( 382,598 ) ( 58,834 ) Accounts receivable, net $ 1,724,899 $ 1,090,467 Allowance for credit losses: Balance December 31, 2021 $ ( 63,188 ) Provision — Write-off 4,354 Recoveries — Balance December 31, 2022 $ ( 58,834 ) Provision ( 323,764 ) Write-off — Recoveries — Balance December 31, 2023 $ ( 382,598 ) F-23 NUVVE HOLDING CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Note 8 – Inventories The following table summarizes the Company’s inventories balance by category: As of December 31, 2023 2022 DC Chargers $ 5,275,934 $ 9,248,398 AC Chargers 236,316 123,247 Vehicles - School Buses — 1,620,000 Component parts 377,203 560,186 Total $ 5,889,453 $ 11,551,831 Note 9 – Property, Plant and Equipment The following table summarizes the Company’s property, plant and equipment balance: Useful Lives As of December 31, 2023 2022 Computers & servers 1 year to 3 years $ 154,337 $ 130,417 Vehicles 5 years to 7 years 65,577 139,788 Office furniture and equipment 3 years to 5 years 366,323 326,613 DC Chargers (1) 5 years to 7 years 598,820 256,685 Total 1,185,057 853,503 Less: Accumulated Depreciation ( 418,793 ) ( 216,559 ) Property, plant and equipment, net $ 766,264 $ 636,944 As of December 31, 2023 2022 Depreciation expense $ 249,123 $ 150,099 __________________ (1) Represents DC Chargers temporary loaned out to customers while their DC Chargers are being repaired. Note 10 – Intangible Assets At both December 31, 2023 and 2022, 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, 2023 and 2022. Accumulated amortization totaled $ 889,353 and $ 749,916 at December 31, 2023 and 2022, respectively. The net amount of intangible assets of $ 1,202,203 at December 31, 2023, will be amortized over the weighted average remaining life of 8.8 years . Total estimated future amortization expense is as follows: 2024 $ 139,437 2025 139,437 2026 137,770 2027 132,770 2028 132,770 Thereafter 520,019 $ 1,202,203 F-24 NUVVE HOLDING CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Note 11 – Stockholders’ Equity Reverse Stock Split The reverse stock split did not affect the number of authorized shares of the Company's common stock or the par value of the common stock. Following the reverse stock split effectiveness on January 19, 2024, all references in the consolidated financial statements to number of common shares issued or outstanding, price per share and weighted average number of shares outstanding prior to the 1 for 40 reverse split have been adjusted to reflect the stock split on a retroactive basis as of the earliest period presented. Authorized Shares As of December 31, 2023, 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, At the Market Offering and Registered Direct 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 F-25 NUVVE HOLDING CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 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 was able to raise capital by issuing securities pursuant to its effective shelf registration statement. 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 paid 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 . During the year ended December 31, 2023 , the Company 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, the Company and the Agent agreed to terminate the ATM Agreement . February 2023 Registered Direct Offering On February 17, 2023, the Company 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. 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 6.0 % of the gross proceeds. April 2023 Registered Direct Offering On April 14, 2023, the Company 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 Capital Markets LLC 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, the Company 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 Capital Markets LLC 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, the Company entered into a marketed offering relating to the issuance and sale of 178,571 shares of its 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 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, the Company 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 the Company 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 the Company was approximately $ 2.1 million . The transaction closed on October 27, 2023, and was subject to the satisfaction of customary closing conditions. F-26 NUVVE HOLDING CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 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 53,750 shares (the “Shares”) of common stock (the “Common Stock”), pre-funded warrants to purchase an aggregate of 46,250 shares of Common Stock (the “Pre-Funded Warrants”), and warrants (the “July 2022 Warrants”) to purchase an aggregate of 100,000 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 $ 140.00 per Share and the offering price for the Pre-Funded Warrants, and accompanying was $ 139.9960 per Pre-Funded Warrant, which represents the per Share public offering price less $ 0.004 per share exercise price for each Pre-Funded Warrant. Each Pre-Funded Warrant has an exercise price of $ 0.004 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 $ 150.00 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 July 2022 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 50,000 shares of the Company’s common stock, at an exercise price of $ 400.00 per share, which are fully vested upon issuance, • Series C warrants to purchase 25,000 shares of the Company’s common stock, at an exercise price of $ 600.00 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, • Series D warrants to purchase 25,000 shares of the Company’s common stock, at an exercise price of $ 800.00 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, F-27 NUVVE HOLDING CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) • Series E warrants to purchase 25,000 shares of the Company’s common stock, at an exercise price of $ 1,200.00 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 25,000 shares of the Company’s common stock, at an exercise price of $ 1,600.00 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 conditional capital commitment with Stonepeak and Evolve. 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 $ 2,000.00 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. Warrants - Public and Private In connection with its initial public offering on February 19, 2020, Newborn sold 143,750 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 6,813 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 $ 460.00 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 $ 0.40 per warrant upon 30 days’ notice, only in the event that the last sale price of the ordinary shares is at least $ 660.00 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, on November 11, 2020, Newborn entered into subscription agreements with certain accredited investors pursuant to which the investors agreed to purchase 35,625 of Newborn’s common stock, at a purchase price of $ 400.00 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, 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 $ 460.00 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 F-28 NUVVE HOLDING CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 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, 2023 and 2022, and the change in the fair value of the Private Warrant for the years ended December 31, 2023 and 2022 in the consolidated statements of operations. See Note 4 for details of changes in fair value of the Private Warrants recorded in the consolidated statement of operations. 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, 2023: Number of Warrants Number of Warrants Exercised Number of Warrants Exercisable Exercise Price Expiration Date Public Warrants 71,875 — 71,875 $ 460.00 March 19, 2026 Private Warrants 3,406 — 3,406 $ 460.00 March 19, 2026 PIPE Warrants 33,844 — 33,844 $ 460.00 March 19, 2026 Stonepeak/Evolve Warrants - series B 50,000 — 50,000 $ 400.00 May 17, 2031 Stonepeak/Evolve Warrants - series C 25,000 — 12,500 $ 600.00 May 17, 2031 Stonepeak/Evolve Warrants - series D 25,000 — 12,500 $ 800.00 May 17, 2031 Stonepeak/Evolve Warrants - series E 25,000 — 12,500 $ 1,200.00 May 17, 2031 Stonepeak/Evolve Warrants - series F 25,000 — 12,500 $ 1,600.00 May 17, 2031 Institutional/Accredited Investor Pre-Funded Warrants 235,171 122,500 112,671 $ 0.004 Until Exercised in Full Institutional/Accredited Investor Warrants 100,000 — 100,000 $ 150.00 January 29, 2028 594,296 122,500 421,796 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 7,906 units at $ 460.00 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 $ 460.00 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. F-29 NUVVE HOLDING CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Note 12 – Share-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. In June 2023, the 2020 Plan was amended, as approved by shareholders, to increase the common shares reserved for issuance under the plan by 100,000 shares. As of December 31, 2023, there is an aggregate of 182,500 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 90 days after termination of service. Forfeitures are accounted for as it occurs. As of December 31, 2023, a total of 52,750 shares of common stock remained available for future issuance under the 2020 Plan. Share-based compensation expense recognized in selling, general, and administrative, and research and development are as follows: Years Ended December 31, 2023 2022 Options $ 2,676,963 $ 2,566,437 Restricted stock 1,616,782 2,395,580 Stock options - modified options 43,139 68,049 Profit interest units ( 229,250 ) 445,479 Total $ 4,107,634 $ 5,475,545 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, 2023 the 2020 Plan. 2020 Plan Expected life of options (in years) (1) 7.0 Dividend yield (2) 0 % Risk-free interest rate (3) 4.61 % Volatility (4) 79.6 % __________________ (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 for the year ended December 31, 2023: Shares Weighted- Average Exercise Price per Share($) Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value($) Outstanding - December 31, 2022 21,338 116.40 5.70 — Granted — — — — Exercised — — — — Forfeited ( 210 ) 278.80 — — Expired/Cancelled ( 2,013 ) 213.52 — — Outstanding - December 31, 2023 19,115 102.75 3.53 — Options Exercisable at December 31, 2023 19,062 102.10 3.52 — Option Vested at December 31, 2023 19,062 102.10 3.52 — There were no options granted during the year ended December 31, 2023. F-30 NUVVE HOLDING CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) The following is a summary of the stock option activity under the 2020 Plan for the year ended December 31, 2023: Shares Weighted- Average Exercise Price per Share ($) Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value($) Outstanding - December 31, 2022 42,778 468.40 8.46 — Granted 18,020 9.07 5.73 — Exercised — — — — Forfeited ( 2,191 ) 152.20 — — Expired/Cancelled ( 715 ) 357.85 — — Outstanding - December 31, 2023 57,892 338.67 7.91 — Options Exercisable at December 31, 2023 27,565 469.58 7.53 — Option Vested at December 31, 2023 27,565 469.58 7.53 — The weighted-average grant-date fair value of options granted during the year ended December 31, 2023 was $ 5.14 . During the year ended December 31, 2021, 41,000 options were modified to lower the exercise price by $ 24.00 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, 2023 and December 31, 2022, respectively, was $ 43,139 and $ 68,049 , respectively. Other Information: Years Ended December 31, 2023 2022 Amount received from option exercised $ — $ 245,748 December 31, 2023 Weighted average remaining recognition period Total unrecognized options compensation costs $ 3,383,406 1.42 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, 2022, and changes during the year ended December 31, 2023, is presented below: Shares Weighted- Average Grant Date Fair Value($) Nonvested at December 31, 2022 10,906 257.20 Granted (1) 72,568 22.40 Vested/Release ( 71,721 ) 44.32 Cancelled/Forfeited ( 1,446 ) 184.40 Nonvested and Outstanding at December 31, 2023 10,307 98.03 __________________ (1) Includes 54,604 shares awarded for the 2022 employee annual bonus with fair value of $ 1,215,957 issued during the year ended December 31, 2023. As of December 31, 2023, there was $ 391,601 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 0.71 years. F-31 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, 2023 2022 United States $ ( 29,832,486 ) $ ( 22,719,272 ) Foreign ( 1,462,701 ) ( 1,837,434 ) Total income (loss) before income taxes ( 31,295,187 ) ( 24,556,706 ) Income tax expense is summarized as follows: Years Ended December 31, 2023 2022 Federal $ — $ — State 1,600 800 Current income tax expense 1,600 800 Federal — — State — — Deferred income tax expense $ — $ — Income tax expense $ 1,600 $ 800 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, 2023 2022 Federal income tax benefit at statutory federal tax rate $ ( 6,571,989 ) $ ( 5,160,372 ) State income tax, net of federal benefit ( 1,867,043 ) ( 823,890 ) Noncontrolling interest 2,616 113,157 Stock compensation ( 781,075 ) 624,065 Change in fair value of warrants ( 45,415 ) ( 2,517,157 ) Change in valuation allowance 9,298,929 7,666,631 Finance costs ( 41,391 ) 54,802 Other 6,968 43,564 Income tax expense $ 1,600 $ 800 F-32 NUVVE HOLDING CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Significant components of the Company’s deferred tax assets (liabilities) are as follows: Years Ended December 31, 2023 2022 Equity investment $ ( 467,463 ) $ ( 489,911 ) Accrued liabilities and other 3,300,936 1,118,256 Right-of-use assets ( 1,261,194 ) ( 1,246,870 ) Lease liabilities 1,434,002 1,389,893 Research and experimental expenditures 2,689,390 1,507,144 Net operating losses 21,654,440 15,772,670 Net deferred tax assets (liabilities) before valuation allowance 27,350,111 18,051,182 Valuation allowance ( 27,350,111 ) ( 18,051,182 ) Net deferred tax assets (liabilities) $ — $ — As of December 31, 2023, the Company had federal net operating loss carryforwards of approximately $ 79,116,000 and state net operating loss carryforwards of approximately $ 43,534,000 . 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 $ 27,350,111 as of December 31, 2023, has been established against the Company’s deferred tax assets as it is more likely than not such assets will not be realized. The valuation allowance increased by $ 9,298,929 during the year ended December 31, 2023. In assessing if the deferred tax assets will be realized, the Company considers whether it is more likely than not 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, 2023, 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 and state income tax as well as income tax in various foreign countries. Due to net operating loss carryforwards from earlier years, the Company’s U.S. income tax returns are open to audit for the years ended December 31, 2014 through 2023. The Company’s foreign income tax returns are open to audit for the years ended December 3 1, 2017 t hrough 2023. F-33 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, 2023 2022 Net loss attributable to Nuvve Holding Corp. common stockholders $ ( 32,215,790 ) $ ( 24,928,377 ) Weighted-average shares used to compute net loss per share attributable to Nuvve common stockholders, basic and diluted 798,269 524,297 Net Loss per share attributable to Nuvve common stockholders, basic and diluted $ ( 40.36 ) $ ( 47.55 ) 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, 2023 2022 Stock options issued and outstanding 69,059 65,123 Nonvested restricted stock issued and outstanding 11,170 23,957 Public warrants 71,875 71,875 Private warrants 3,406 3,406 PIPE warrants 33,844 33,844 Stonepeak and Evolve warrants 150,000 150,000 Stonepeak and Evolve options 125,000 125,000 Institutional/Accredited Investor Pre-Funded Warrants 112,671 — Institutional/Accredited Investor Warrants 100,000 42,466 Total 677,025 515,671 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 was $ 43,399 fo r the year ended December 31, 2023 and zero for the year ended December 31, 2022. During the year ended December 31, 2023, the Company recognized re venue of $ 192,413 from an entity that is an investor of the Company . During the year ended December 31, 2022, the Company recognized revenue of $ 40,500 from the same entity that is an investor in the Company. The Company had a balance of accounts receivable of zero each at December 31, 2023 and December 31, 2022, from the same entity that is an investor in the Company. F-34 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. Supplemental consolidated balance sheet information related to leases is as follows: Classification December 31, 2023 December 31, 2022 Operating lease assets Right-of-use operating lease assets $ 4,839,526 $ 5,305,881 Finance lease assets Property and equipment, net 13,154 18,467 Total lease assets $ 4,852,680 $ 5,324,348 Operating lease liabilities - current Operating lease liabilities - current $ 856,250 824,326 Operating lease liabilities - noncurrent Operating lease liabilities - noncurrent 4,646,383 5,090,170 Finance lease liabilities - current Other liabilities - current 7,391 7,184 Finance lease liabilities - noncurrent Other long-term liabilities 7,764 12,959 Total lease liabilities $ 5,517,788 $ 5,934,639 The components of lease expense are as follows: Year Ended December 31, Year Ended December 31, Classification 2023 2022 Operating lease expense Selling, general and administrative $ 914,533 $ 811,082 Finance lease expense: Amortization of finance lease assets Selling, general and administrative 5,779 5,594 Interest on finance lease liabilities Interest income, net 1,801 2,248 Total lease expense $ 922,113 $ 818,924 Operating Lease Finance Lease Maturities of lease liabilities are as follows: December 31, 2023 December 31, 2023 2024 $ 892,212 $ 7,391 2025 893,046 7,391 2026 921,273 1,848 2027 946,683 — 2028 937,727 — Thereafter 2,861,204 — Total lease payments 7,452,145 16,630 Less: interest ( 1,949,512 ) ( 1,475 ) Total lease liabilities $ 5,502,633 $ 15,155 Lease term and discount rate: December 31, 2023 December 31, 2022 Weighted-average remaining lease terms (in years): Operating lease 7.8 9.0 Finance lease 2.5 3.3 Weighted-average discount rate: Operating lease 7.8 % 7.8 % Finance lease 7.8 % 7.8 % F-35 NUVVE HOLDING CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Other Information: Years Ended December 31, Years Ended December 31, 2023 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 476,208 $ 202,844 Operating cash flows from finance leases related to interest expense $ 1,801 $ 2,248 Financing cash flows from finance leases $ 8,140 $ 9,691 Leased assets obtained in exchange for new finance lease liabilities $ 13,154 $ 18,467 Leased assets obtained in exchange for new operating lease liabilities $ — $ — 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 2023 2022 Sublease income Other, net $ 466,888 $ 143,192 Lessor In 2022, the Company entered into a 10 year 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 $ 112,255 and $ 97,054 at December 31, 2023 and 2022, respectively . Lease income are as follows: Year Ended December 31, Year Ended December 31, Classification 2023 2022 Lease income Products $ 24,027 $ 99,981 Interest income Products 13,987 3,341 Total lease income $ 38,014 $ 103,322 F-36 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. Please see Note 17(e) and (f) below for details regarding legal proceedings pending with Company suppliers. (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 of the years ended December 31, 2023 and 2022, $ 266,667 and $ 400,000 , respectively, were paid under the research agreement. At December 31, 2023, we have $ 341,713 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, 2023 and December 31, 2022, 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, 2023, 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-37 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, 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. A dispute (the "Dispute") arose as to the PO, and an arbitration proceeding was initiated. On February 2, 2024 (the “Settlement Date”), the Company and Rhombus entered into a settlement and release agreement (the “Settlement Agreement”) pursuant to which, among other things, the Company agreed to pay Rhombus approximately $ 0.46 million for certain initial DC Chargers within 15 days from the Settlement Date. The Company 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 the Company and Rhombus. The Company and Rhombus agreed to release one another from any and all claims relating to the Dispute. (f) School Bus Storage Litigation In October and November 2021, the Company purchased an aggregate of five school buses from a certain school bus dealership in Pittsburgh, Pennsylvania. Thereafter, the Company entered into agreements to sell these buses to a third-party purchasers. However, the dealership refused to release four of the buses and to provide the Company with a manufacturer statement of origin (an “MSO”) for all five buses, claiming that the Company owed them approximately $ 0.45 million in storage fees allegedly incurred since January 2022. The Company disputed that it had an obligation to pay the storage fees as well as the amount of fees demanded by the dealership, and filed a petition for preliminary injunction with the Court of Common Pleas of Allegheny County, Pennsylvania. On November 1, 2023, the court granted the Company's petition for preliminary injunction requiring the dealership to release and provide keys for the four buses and to provide the MSOs for all five buses, contingent on the Company posting an injunction bond in the amount of $ 0.55 million within seven days of the order. The Company timely posted the injunction bond on November 7, 2023. The Company anticipate that the storage fee dispute with the dealership will be adjudicated by the second quarter of fiscal year 2024. F-38 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, 2023, Levo had cumulative unpaid accrued preferred dividends of $ 612,201 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, 2023, 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 $ 612,201 $ 3,750,201 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, 2023, Levo has accreted $ 645,864 resulting in the carrying value of the redeemable preferred stock of $ 4,193,629 . F-39 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, 2023 December 31, 2022 Beginning Balance $ ( 3,950,186 ) $ ( 2,501,633 ) Add: net loss attributable to non-controlling interests $ ( 12,456 ) ( 538,841 ) Less: dividends paid or accrued to non-controlling interests 285,595 263,846 Less: Preferred share accretion adjustment 645,864 645,866 Non-controlling interests $ ( 4,894,101 ) $ ( 3,950,186 ) The following table summarizes Levo non-controlling interests presented as a separate component of the Company’s consolidated statements of operations: December 31, 2023 December 31, 2022 Net loss attributable to non-controlling interests $ ( 12,456 ) $ ( 538,841 ) Redeemable Non-controlling Interest Reconciliation — Mezzanine Equity December 31, 2023 December 31, 2022 Beginning balance $ 3,547,765 $ 2,901,899 Preferred share accretion adjustment 645,864 645,866 Ending balance $ 4,193,629 $ 3,547,765 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, 2023 and 2022, the Company recorded compensation expense, included in selling, general, and administrative, under the Profits Interests of $ 127,134 and $ 445,479 , respectively . 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, 2023. 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. F-40 NUVVE HOLDING CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (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, 2022, and changes during year ended December 31, 2023, is presented below: Shares Weighted- Average Grant Date Fair Value($) Nonvested at December 31, 2022 250,000 13.28 Granted — — Vested — — Cancelled (1) 200,000 12.49 Nonvested and Outstanding at December 31, 2023 50,000 12.49 (1) Cancelled units represents unvested units granted to cliff vest on the grant anniversary date. However, the employees were terminated before the grant date anniversary. As a result, the previously recognized expenses of $ 421,371 was reversed. As of December 31, 2023, there was $ 283,381 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 2.0 years. Note 19 - Subsequent Events February 2024 Public Offering On January 31, 2024, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Craig-Hallum Capital Group LLC (“Craig-Hallum”) regarding an underwritten public offering of its securities (the “Offering”). The Offering was conducted pursuant to our Registration Statement on Form S-1 filed with the SEC, which was declared effective as of January 31, 2024. On February 2, 2024, the Company completed the Offering and received 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 the Company in connection with the exercise of any of the outstanding Series B Warrants issued in the Offering. As noted above, on January 31, 2024, the Company entered into an Underwriting Agreement regarding the Offering which was comprised of the followings: 1. 3,035,000 shares of common stock; 2. 1,765,000 pre-funded warrants (“Pre-Funded Warrants”) to purchase shares of common stock; 3. 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. 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; and 5. 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, Craig-Hallum was granted 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 F-41 NUVVE HOLDING CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) common stock underlying the Underwriter Warrants shall only be exercisable pro rata upon the exercise of the Series B Warrants issued in the Offering. F-42