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Item 7. Management’s Discussion and Analysis

2025-03-31 compared with 2024-03-29 · 133 added, 105 removed, 270 unchanged (47% of the section changed)

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

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

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

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

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

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

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

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We expect growth in company-owned charging stations and the related government grant funding to continue, but for such projects to constitute a declining percentage of our future business as our commercial operations expand.

We offer our customers networked charging stations, infrastructure, software, professional services, support, monitoring and parts and labor warranties required to run electric vehicle fleets, as well as low and in some cases free energy costs.

We expect to generate revenue primarily from the provision of services to the grid via our GIVe software platform and sales of V2G-enabled charging stations.

We offer our customers networked charging stations, infrastructure, batteries, software, professional services, support, monitoring and parts and labor warranties required to run electric vehicle fleets, as well as low and in some cases free energy costs.

We expect to generate revenue primarily from the provision of services to the grid via our GIVe software platform and sales of V2G-enabled charging stations and batteries.

In the case of light duty fleet and heavy duty fleet customers, we also may receive a mobility fee, which is a recurring fixed payment made by fleet customers per fleet vehicle.

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In the case of recurring grid services revenue generated via automotive OEM and charge point operator customer integrations, we may also share the recurring grid services revenue with the customer.

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

Levo is our consolidated subsidiary.

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

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

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

For a fixed monthly payment with no upfront cost, Levo will provide the EVs, such as electric school buses, charging infrastructure powered by our 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.

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

Levo was our consolidated subsidiary.

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

Stonepeak's and Evolve's conditional capital contribution commitments expired on August 4, 2024.

On October 15, 2024 (the “Closing Date” or “ LLC Interest Sale Closing”), we, Stonepeak, and Evolve entered into a Limited Liability Company Interest Sale Agreement (the “Sale Agreement”), pursuant to which Stonepeak and Evolve sold their combined 49% membership interest in Levo to us for a de minimis price.

As a result of the LLC Interest Sale Closing, we became the 100% owner of Levo.

The Sale Agreement contains customary representations, warranties, and covenants.

On December 13, 2024, the Company dissolved Levo as an entity.

Levo was a consolidated entity of the Company.

Please see Note 2 for the principles of consolidation.

On August 16, 2024, we formed Deep Impact 1 LLC, a Delaware limited liability company (“Deep Impact”), with Nuvve CPO Inc., our wholly owned subsidiary (“Nuvve CPO”), and WISE EV-LLC (“WISE”).

We hold a 51% equity interest by way of Nuvve CPO, and WISE holds a 49% equity interest.

Deep Impact is an entity formed for the principal purpose of operation, installation, maintenance of electric vehicle chargers and other related activities and services created as a business venture between us, Nuvve CPO and WISE.

Nuvve CPO Inc., or Nuvve Charge Point Operator, was established in August 2024 to support the deployment and ongoing support of our customers charging station networks.

In connection with Deep Impact, Nuvve CPO, WISE and Deep Impact entered into a Contribution and Unit Purchase Agreement (the “Contribution Agreement”), pursuant to which Nuvve CPO and WISE agreed to contribute $51 and $49, respectively, to Deep Impact, and to provide certain services pursuant to separate services agreements with Deep Impact.

For such contributions and the services, Nuvve CPO received 51 membership units in Deep Impact, equal to a 51% equity interest, and WISE received 49 membership units in Deep Impact, equal to a 49% equity interest.

We have determined that Deep Impact is a variable interest entity ("VIE") in which the Company is the primary beneficiary.

Accordingly, we consolidate Deep Impact and record a non-controlling interest for the share of the entity owned by WISE.

Deep Impact had limited business operations during the year ended December 31, 2024.

Key Factors Affecting Our Business

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Supply Chain Constraints

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

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

During the years ended December 31, 2024 and 2023, we estimated that these disruptions could result in our future inability to fulfill customer orders which will in turn impact our net revenues.

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

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

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

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

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

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If a material percentage of our customers were to claim these regulatory credits or choose to not assign the regulatory credits to us, our revenue from this source could decline significantly, which could have an adverse effect on our revenues and overall gross margin.

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

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

these programs.

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

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If we are unable to penetrate the market in North America and Europe, our future revenue growth and profits will be impacted.

Our total backlog represents the estimated transaction prices on unsatisfied and partially satisfied performance obligations to our customers for products and services.

Backlog is converted into revenue in future periods as we satisfy the performance obligations to our customers for products and services, primarily based on the cost incurred or at delivery and acceptance of products, depending on the applicable accounting method.

Our total backlog represents the estimated future transaction price values for unsatisfied and partially satisfied estimated product and service deliveries to our customers.

Backlog is generally determined based upon customer issued purchased orders or contracts with customers.

Backlog does not include agreements we have with customers to earn future grid service revenues.

Backlog is converted into revenue in future periods as we satisfy the performance obligations to our customers for our products and services, primarily based on the cost incurred or at delivery and acceptance of products, depending on the applicable accounting method.

Our estimated backlog on December 31, 2024, was $18.3 million, which we expect to be earned in future periods.

We anticipate recognizing revenue from this backlog from 2025 through 2026.

Market Opportunity

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

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

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

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Operating loss (20,460,431) (32,105,275) 11,644,844 (36.3) %

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

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

Interest (expense) income, net (767,373) 108,182 (875,555) (809.3) %

Change in fair value of convertible notes 444,656 — 444,656 100.0 %

Change in fair value of warrants/investment rights liability 3,662,370 216,263 3,446,107 NM

Change in fair value of derivative liability (3,626) 49,497 (53,123) (107.3) %

Other, net (300,408) 436,146 (736,554) (168.9) %

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

Total other income, net 3,035,619 810,088 2,225,531 274.7 %

Loss before taxes (17,424,812) (31,295,187) 13,870,375 (44.3) %

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Net loss $ (17,426,412) $ (31,296,787) $ 13,870,375 (44.3) %

Net loss attributable to non-controlling interests (12,456) (538,841) 526,385 NM

Net loss attributable to non-controlling interests (28,809) (12,456) (16,353) 131.3 %

Net loss attributable to Nuvve Holding Corp.

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NM - Not Meaningful

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

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

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

Total revenue was $5.3 million for the year ended December 31, 2024, compared to $8.3 million for the year ended December 31, 2023, a decrease of $3.0 million, or 36.6%.

The decrease is attributed to a $3.3 million decrease in products due to lower customers sales orders and shipments, partially offset by an increase of $0.1 million in services revenue and an increase of $0.1 million in grants revenue.

Products and services revenue for the year ended December 31, 2024 consisted of sales of DC and AC Chargers of $2.6 million , grid services revenue of $0.3 million , and engineering services of $2.0 million driven by management fees of $0.8 million earned related to Fresno V2G i nfrastructure project management .

Cost of Product and Service Revenue

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

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

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

Cost of products and services revenues for the year ended December 31, 2024, decreased by $3.4 million to $3.5 million, or 49.4%, compared to $7.0 million for the year ended December 31, 2023 due to lower customers sales orders and shipments.

Products and services margins for the year ended December 31, 2024 increased by 14.7%, to 27.5%, compared to 12.8% for the same prior year period.

Margin benefited mostly from a lower mix of hardware charging stations sales, and a higher mix of engineering services during the year ended December 31, 2024 compared to December 31, 2023.

Selling, General and Administrative Expenses

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Selling, general and administrative expenses were $17.7 million for the year ended December 31, 2024 as compared to $24.7 million for the year ended December 31, 2023, a decrease of $7.0 million, or 28.4%.

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

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

The decrease during the year ended December 31, 2024 was primarily attributable to decrease in compensation expenses of $3.6 million, including share-based compensation, decrease in outside services related expenses of $1.7 million , decrease in legal expenses of $0.7 million, decrease in office related expenses of $0.6 million , decrease in travel and marketing related expenses of $0.5 million , decrease in public company related expenses of $0.5 million, and de creases in bad debt expenses of $0.2 million, partially offset by information technology related expenses of $0.8 million.

Research and Development Expenses

Research and development expenses increased by $0.8 million, or 9.8%, from $8.0 million for the year ended December 31, 2022 to $8.8 million for the year ended December 31, 2023.

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

Research and development expenses decreased by $4.2 million, or 48.2%, from $8.8 million for the year ended December 31, 2023 to $4.5 million for the year ended December 31, 2024.

The decreases during the year ended December 31, 2024 were primarily attributable to decreases in compensation expenses and subcontractor expenses used to advance our platform functionality and integration with more vehicles.

Other Income, net

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

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

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

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

Other income, net increased by $2.2 million of income, from $0.8 million of other income for the year ended December 31, 2023 to $3.04 million in other income for the year ended December 31, 2024.

The increase during the year ended December 31, 2024 was primarily attributable to the change in fair value of the warrants/investment rights liability, convertible notes, and derivative liability, sublease income related to the subleasing of part of our main office space (See Note 16 ), and interest expense on debt obligations.

In the years ended December 31, 2024 and 2023, we recorded nominal income tax expenses.

The income tax expenses during the years ended December 31, 2024 and 2023 were nominal primarily due to operating losses that receive no tax benefits as a result of a valuation allowance.

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

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

Net loss decreased by $13.9 million, or 44.3%, from $31.3 million for the year ended December 31, 2023 to $17.4 million for the year ended December 31, 2024.

The decrease in net loss was primarily due to increase in other income, net of $2.2 million, and a decrease in operating expenses of $11.6 million, which includes a decrease in cost of product and services of $3.4 million, and a decrease in revenue of $3.0 million for the aforementioned reasons.

Net Loss Attributable to Non-Controlling Interest

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

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

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

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

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

Net loss attributable to the non-controlling interest was $0.03 million and $0.01 million for the year ended December 31, 2024 and 2023, respectively.

Net loss is allocated to non-controlling interests in proportion to the relative ownership interests of the holders of non-controlling interests in Deep Impact and Levo entities.

We own 51% of Deep Impact common units during the year ended December 31, 2024, and 51% of Levo's common units during the year ended December 31, 2023.

We had determined that Deep Impact and Levo were variable interest entities (“VIE”) in which we were the primary beneficiary.

Accordingly, we consolidated Deep Impact and Levo, and recorded a non-controlling interest for the share of Deep Impact and Levo owned by other parties during the years ended December 31, 2024 and 2023.

Stonepeak's and Evolve's conditional capital contribution commitments expired on August 4, 2024.

On October 15, 2024, we, Stonepeak, and Evolve entered into Sale Agreement, pursuant to which Stonepeak and Evolve sold their combined 49% membership interest in Levo to us for a de minimis price.

As a result of the Closing, we became the 100% owner of Levo.

On December 13, 2024, the Company dissolved Levo as an entity.

Liquidity and Capital Resources

Sources of Liquidity

We are an early-stage business enterprise.

We are still an early-stage business enterprise.

We have not yet demonstrated a sustained ability to generate sufficient revenue from sales of our technology and services or conduct sales and marketing activities necessary for the successful commercialization of our GIVe platform.

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

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

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

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

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

Please see below for details.

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

At the Market Offerings and Registered Direct Offerings

2022 ATM Offering Program

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

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

The Agents were entitled to collect a fee equal to 3% of the gross sales price of all shares of common stock sold pursuant to the Sales Agreement.

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

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

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

2023 ATM Offering Program

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

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

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

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

February 2023 Registered Direct Offering

On February 17, 2023, we entered into a subscription agreement 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 acted as the placement agent for the February 2023 Offering and received a sales commission of 6.0% of the gross proceeds.

April 2023 Registered Direct Offering

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

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

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

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

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

June 2023 Registered Direct Offering

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

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

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

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

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

October 2023 Offerings

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

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

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

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

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

In addition, we granted Aegis Capital Corp.

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

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

The aggregate gross

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

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

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

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

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

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

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

Fresno Economic Opportunities Commission ("Fresno EOC")

On May 14, 2024 (the “Effective Date”), the Company and Fresno EOC entered into a master services agreement to outline the general scope of work, timeline, and pricing pursuant to which the Company will provide services and materials to Fresno EOC in connection with a turnkey fleet electrification program for its 50-shuttle fleet (the “Agreement”).

Pursuant to the Agreement, between the Effective Date and June 30, 2036 (the “Term”), the Company will be responsible for the design and construction of a 26,000 square foot parking lot and implementing a comprehensive electrification system for Fresno EOC’s transit fleet, including the installation of electric vehicle chargers, solar power generation hardware and integrating a battery storage system.

The Company also agreed to provide certain grant writing and project management services to Fresno EOC.

The total estimated fees and expenses payable to the Company by Fresno EOC for services and materials provided in relation to the Project during the Term is approximately $15.7 million.

Each party’s obligations under the Agreement are contingent to the receipt of certain grant funding by Fresno EOC, provided that if Fresno EOC terminates the Agreement due to the failure to receive such grant funding, Fresno EOC has agreed to pay the Company for services provided on or prior to such termination subject to certain limitations.

Additionally, each party may terminate the Agreement upon certain material breaches of the Agreement by the other party and failure to cure.

On August 9, 2024 and November 27, 2024, we entered into a Subordinated Business Loan and Security Agreement ("Term Loan") with Agile Lending, LLC, as lender, and Agile Capital Funding, LLC, as collateral agent.

The August 9, 2024 and November 27, 2024 Term Loans are short-term, fixed interest rate obligations.

Principal and interest on the Term Loan are payable in arrears weekly.

The August 9, 2024 and November 27, 2024 Term Loans are secured by certain of our assets, and were is evidenced by a subordinated secured promissory note.

The Term Loan contains customary affirmative and negative covenants.

Among other things, these covenants restricts our ability to incur certain types or amounts of indebtedness, incur liens on certain assets, dispose of material assets, enter into certain restrictive agreements, or engage in certain transactions with affiliates.

Additionally, the Term Loan contains customary default provisions including, but not limited to, failure to pay interest or principal when due.

The following is a summary description of the key terms of the Term Loan:

Debt Debt Origination Date Maturity Principal Amount Borrowed Carrying Value Weighted Weekly Average Interest Rate Weighted Annual Average Interest Rate

Term Loan 8/9/2024 3/6/2025 $ 1,000,000 $ 483,812 2.96 % 153.90 %

Term Loan 11/27/2024 6/27/2025 $ 1,000,000 $ 961,533 2.96 % 153.90 %

Interest expense paid on the Term Loans for the year ended December 31, 2024 was $627,929 .

There was no interest expense on the Term Loans for the year ended December 31, 2023.

On March 6, 2025, we repaid fully the principal balance and interest of the August 9, 2024 Term Loan .

The following is a summary of debt as of December 31, 2024 and 2023.

Please see Note 11 to the Consolidated Financial Statements for detail descriptions:

As of December 31,

Term loan (1) $ 1,445,345 $ —

Promissory Notes - August 16, 2024 884,676 —

Promissory Notes - August 27, 2024 (2) 516,818 —

Senior Convertible Notes - October 2024 (3) 2,475,162 —

Senior Convertible Notes - December 2024 250,000 —

Total outstanding principal balance 5,572,001 —

unamortized debt issuance costs and discounts (84,170) —

Total debt 5,487,831 —

current portion of long-term debt 4,647,331 —

Long-term debt, net of current portion $ 840,500 $ —

__________________

(1) Principal balance and interest of $483,812 was fully repaid in March 2025.

(2) Principal balance and interest of $516,818 was fully repaid in January 2025.

(3) Amount represents the fair value of the convertible notes.

Senior Convertible Notes and Warrants

On October 31, 2024, we entered into a securities purchase agreement (the “Purchase Agreement”) with certain accredited institutional and individual investors (the “Investors”), pursuant to which we agreed to issue to the Investors (i) up to an aggregate of $3,750,000.01 principal amount (the “Principal Amount”) senior convertible promissory notes, carrying a 10.00% original issue discount (each, a “Note” and, collectively, the “Notes”), convertible into shares of our common stock, and (ii) accompanying warrants (the “Warrants) to purchase shares of common stock (the “Private Placement”).

On October 31, 2024, we closed on the Private Placement and issued the Notes and the Warrants.

Our Chief Executive Officer, Gregory Poilasne, participated as an Investor in the Private Placement, purchasing an aggregate of $250,000 in principal amount of Notes and accompanying Warrants.

On January 31, 2025 , we repaid fully the principal balance and interest of the August 27, 2024 Promissory Notes for a total amount repaid of $523,097 .

On December 31, 2024, we entered into a securities purchase agreement (the “December Purchase Agreement”) with an accredited institutional and individual investors (the “December Investor”), pursuant to which we agreed to issue to the December Investor (i) a $250,000 principal amount (the “December Principal Amount”) senior convertible promissory note, carrying a 10% original issue discount (the “December Note”), convertible into shares of our common stock and (ii) an accompanying warrant (the “December Warrant”) to purchase shares of Common Stock (the “December Private Placement”).

On December 31, 2024, we closed the December Private Placement and issued the December Note and the December Warrant (the “Closing”).

The December Note have a term of 12 months and bear interest at an effective rate of 8.00% per annum, and have a maturity date o f December 31, 2025.

The December Note is convertible at the option of the December Investor, at any time, in whole or in part, into such number of shares of Common Stock equal to the principal amount of the note outstanding plus all accrued and unpaid interest at a conversion price equal to $2.931 per share.

In conjunction with the December Note, we issued to the December Investor warrants to purchase an aggregate of 85,287 shares of Common Stock, at an exercise price of $3.26 per share.

Please see Note 11 to the Consolidated Financial Statements for a summary description of the key items of the Notes, Warrants, December Notes and December Warrants agreements.

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

Levo utilizes our proprietary V2G technology, and the conditional capital contribution commitment from Stonepeak and Evolve of $750 million, subject to project approval process as outlined under the terms of the definitive agreements, to fund acquisition of electric fleets, and construction of EV infrastructure.

Stonepeak and Evolve have the option to increase their conditional capital contribution commitment to $1.0 billion when Levo has entered into contracts with third parties for $500 million in aggregate capital expenditures.

Stonepeak's and Evolve's conditional capital contribution commitments expired on August 4, 2024.

On October 15, 2024, we, Stonepeak, and Evolve entered into the Sale Agreement, pursuant to which Stonepeak and Evolve sold their combined 49% membership interest in Levo to us for a de minimis price.

As a result, we became the 100% owner of Levo.

On December 13, 2024, the Company dissolved Levo as an entity.

See Note 12 to the Consolidated Financial Statements included in this Annual Report on Form 10-K for summary of the definitive agreements.

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

On February 21, 2025, we initiated a legal action against Rhombus related to its refusal to honor certain warranty and commissioning obligations with respect to DC Chargers we purchased from Rhombus.

Rhombus has in turn filed a demand for an arbitration claiming that we breached terms of the previous settlement agreement between us and Rhombus by failing to purchase additional DC Chargers.

We believe we donot have any obligation to purchase additional non-conforming DC Chargers.

Therefore, we believe that Rhombus’s position does not have any merit, and we intend to exercise all available rights and remedies in our legal action against Rhombus.

The outcome of any such proceedings are inherently uncertain, and the amount and/or timing of any gains or expenses resulting from such proceedings is not reasonably estimable at this time.

Years Ended December 31,

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Effect of exchange rate on cash (6,351) 35,624

Net (decrease) increase in cash and restricted cash $ (14,219,236) $ (16,506,624)

Net decrease in cash and restricted cash $ (1,323,163) $ (14,219,236)

Net cash used in operating activities during the year ended December 31, 2024 was $15.7 million as compared to net cash used of $21.3 million in the year ended December 31, 2023.

The $5.5 million decrease in net cash used in operating activities was primarily attributable to lower use of cash for working capital during the year ended December 31, 2024 as compared to the same prior period.

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

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

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

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

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

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

Working capital during the year ended December 31, 2024 was impacted by, among other items, lower net loss of $17.4 million, resulting from decrease in operating expenses and lower revenue.

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

During the year ended December 31, 2024 cash used for investing activities was $0.05 million as compared to net cash provided by investing activities of $1.14 million during the year ended December 31, 2023.

Net cash provided by investing activities during the year ended December 31, 2023 were from the sale of our equity investment in Switch EV Ltd partnership alliance, partially offset by purchase of fixed assets.

Net cash provided by financing activities for the year ended December 31, 2024 was $14.5 million, of which $8.5 million was the proceeds from public offering of common stock, partially offset by issuance cost, $0.2 million was from the exercise of common stock warrants, partially offset by issuance cost, proceeds from debt obligations of $6.5 million, and repayment of debt obligations of $0.7 million .

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

Critical Accounting Policies and Estimates

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We may enter into contracts with customers that include promises to transfer multiple products and services, such as charging systems, software subscriptions, extended maintenance, and professional services.

For arrangements with multiple products and services, we evaluates whether the individual products and services qualify as distinct performance obligations.

For arrangements with multiple products and services, we evaluate whether the individual products and services qualify as distinct performance obligations.

In our assessment of whether products and services are a distinct performance obligation, we determine whether the customer can benefit from the product or service on its own or with other readily available resources and whether the service is separately identifiable from other products or services in the contract.

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The determination of the grant date fair value of stock option awards issued is affected by a number of variables, including the fair value of our underlying common stock, our expected common stock price volatility over the term of the option award, the expected term of the award, risk-free interest rates, and the expected dividend yield of our Common Stock.

The following table summarizes the weighted-average assumptions used in estimating the fair value of stock options granted during each of the periods presented:

During the year ended December 31, 2024, we did not grant any stock options.

The following table summarizes the weighted-average assumptions used in estimating the fair value of stock options granted during each of the period presented:

Years Ended December 31,

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or (d) disclose certain executive compensation-related items such as the correlation between executive compensation and performance and comparisons of the Chief Executive Officer’s compensation to median employee compensation.

We will remain an emerging growth company under the JOBS Act until the earliest of (a) the last day of our first fiscal year following the fifth anniversary of Newborn’s IPO, which was consummated on February 19, 2020, (b) the last date of our fiscal year in which we have total annual gross revenue of at least $1.235 billion, (c) the date on which we are deemed to be a “large accelerated filer” under the rules of the SEC with at least $700.0 million of outstanding securities held by non-affiliates or (d) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the previous three years.

We will remain an emerging growth company under the JOBS Act until the earliest of (a) the last day of our first fiscal year following the fifth anniversary of the closing date of Newborn's IPO, which was consummated on February 19, 2020, (b) the last date of our fiscal year in which we have total annual gross revenue of at least $1.235 billion, (c) the date on which we are deemed to be a “large accelerated filer” under the rules of the SEC with at least $700.0 million of outstanding securities held by non-affiliates or (d) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the previous three years.

Quantitative and Qualitative Disclosures About Market Risk

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

What changed 10-K

Item 7. Management’s Discussion and Analysis