Greenwave Technology losses mount in Q3

Chesapeake, Virginia-based Greenwave Technology Solutions has reported a net loss before income taxes of nearly $16.5 million in this year’s third quarter. The company operates more than a dozen scrap yards branded as Empire Recycling, with most of the locations in North Carolina and Virginia, plus one in Cleveland.

Of that $16.5 million in losses, more than $13.4 million has been calculated as operating losses, while the rest is described as being tied to debt interest and amortization.

In addition to that $16.5 million in red ink, the firm’s third-quarter balance sheet lists another $6.6 million in losses attributable to shareholders stemming from “deemed dividends” tied to warrants and notes, for a total loss attributed to shareholders of more than $23.1 million.

The company’s previous quarterly filing with the Securities and Exchange Commission and its investors included language that there was “substantial doubt" about the company’s ability to continue as a going concern for one year from the issuance of the unaudited condensed consolidated financial statements.

Regarding its future, Greenwave again reports its assets and liabilities conditions raise substantial doubt about its ability to continue as a going concern for one year from the issuance of the consolidated financial statements.

“The company believes it has sufficient capital to become cash flow positive from operating activities," Greenwave says. "Should the company choose to raise capital, it believes it can do so through nonequity based instruments such as nonconvertible notes, lines of credit and cash advances.”

By the numbers, as of June 30, Greenwave said it had cash on hand of about $375,000, a working capital deficit (current liabilities in excess of current assets) of $22.3 million and an accumulated companywide deficit of more than $368 million.

Three months later, its cash-on-hand figure had risen to about $1.45 million and its working capital deficit had declined to about $16.2 million, but its accumulated deficit had risen to more than $391 million.

Elsewhere in the company’s notes accompanying its third-quarter SEC filing, Greenwave says its financial statements include the accounts of Empire Services Inc.; Empire Staffing LLC; Liverman Metal Recycling Inc.; Scrap App Inc. (formed September 2023 in Delaware); and Greenwave Elite Sports Facility Inc., its wholly owned subsidiaries.

The company’s Kelford, North Carolina, location, formerly was known as Liverman Metal Recycling, while Greenwave Elite Sports Facility is a softball complex in Portsmouth, Virginia.

The company launched Scrap App as a mobile application initially focused on "junk cars."

“Greenwave is developing an artificial intelligence (AI) pricing engine to optimize profit margins on the vehicles it purchases," it says.

“In December 2022, we began offering hauling services to corporate clients. We haul sand, dirt, asphalt, metal and other materials in a fleet of approximately 50 trucks [that] we own, manage and maintain.”