Update: Greenwave struggles to maintain Nasdaq listing

Chesapeake, Virginia-based Greenwave Technology Solutions Inc., which operates more than a dozen scrap yards under the Empire Recycling name, has received an extension until Sept. 30 of this year to maintain its listing on the Nasdaq stock exchange.

However, the company will first have to make its case at a hearing. A few weeks after Nasdaq granted Greenwave a 180-day extension to maintain its listing in early April, its stock spent a 10-day stretch below a 10-cents-per-share minimum value trigger, causing Nasdaq to request the new hearing earlier this month.

Greenwave also has filed a year-end 2023 10-K form with the Securities and Exchange Commission (SEC). For the year, the company says its scrap yards in Ohio, North Carolina and Virginia generated more than $35.6 million in revenue, up nearly 5 percent from the slightly less than $34 million of revenue in 2022.

However, Greenwave lists its loss from operations last year at more than $19.5 million, which represents a 79 percent rise in operating losses from the $10.8 million figure from 2022.

The company did scale back its “Other Expense” figure by nearly 70 percent in 2023, but still recorded a $7.4 million loss in that line item.

Notes on the company’s 10-K indicate Greenwave pared back its “loss available to shareholders” from more than $63 million at the start of 2023 to $30.2 million at the end of the year. The firm says it “received proceeds [from] the issuance of bridge notes, factoring advances, convertible notes, sale of common stock and non-convertible notes” to help reduce that figure. (Factoring advances are described by the Westlaw website as involving one company paying another “for its purchase of accounts receivable prior to the date on which payment would ordinarily be made.”)

Another note in its SEC 10-K filing indicates Greenwave sells more than 60 percent of its scrap to two unidentified scrap consumers. “For the fiscal year ended Dec. 31, 2023, two certain large customers individually accounted for [more than] $20.7 million and [slightly more than] $2 million, or approximately 58.1 percent and 5.6 percent, of our revenues, respectively.”

Greenwave says as of the end of last year it had more than $1.54 million of cash on hand “and a working capital deficit (current liabilities in excess of current assets) of $20,579,715.”

Adds the company, “We may need additional capital in the future to continue to execute our business plan. At the present time, we do not have arrangements to raise additional capital, and we may need to identify potential investors and negotiate appropriate arrangements with them. If we cannot obtain the needed capital, we may not be able to become profitable and may have to curtail or cease our operations.”

Later in May, Greenwave also filed a Form 10-Q with the SEC outlining its first quarter 2024 results. The recycling company reported about $2.8 million in operating losses, compared with operating losses of about $1.9 million in the first quarter of 2023.

Greenwave has reported a net loss in this year’s first quarter of slightly more than $8 million, doubling its $4 million net loss in the first quarter of 2023.

As it has in prior financial statements, Greenwave issued a disclaimer in its first quarter 2024 filing: “As of March 31, 2024, the company had cash of $713,218 and a working capital deficit (current liabilities in excess of current assets) of $20,489,101. The accumulated deficit as of March 31, 2024 was $429,326,935. These conditions raise substantial doubt about the company’s ability to continue as a going concern for one year from the issuance of the consolidated financial statements.”

Despite those potential financial concerns, Greenwave issued a statement in late April saying it “intends to utilize additional cash flow to aggressively grow operations” after saying it had improved its balance sheet in the first quarter of this year. Those measures included one involving Greenwave board chair and CEO Danny Meeks being described as having “exchanged approximately $17 million of debt into equity.”

In early May, another Greenwave press release indicated it expected to generate revenue exceeding $40 million in 2024.

A document filed by Greenwave with the SEC in early June indicates it will hold a special meeting of stockholders on July 19 seeking approvals to purchase and reissue shares of common stock.

"With a significantly strengthened balance sheet, I believe Greenwave is well positioned for the next phase of growth,” Meeks says in a May statement. “The investments we’ve made in Greenwave’s infrastructure will facilitate significant growth in our copper and steel processing capacity, which we anticipate will create significant shareholder value.”