Greenwave Posts Another Quarterly Loss, Financial Troubles Build

Greenwave Technology Solutions Inc.

Greenwave’s net sales increased 12% year on year to $8.2 million in the third quarter. Despite the higher YoY sales, the company’s net loss nearly doubled from $8.6 million in Q3’22 to $16.5 million in Q3’23.

Compared to the prior quarter, Q3 sales were down 13% from $9.4 million. The net loss posted in Q2’23 was $2.3 million.

For the first nine months of 2023, Greenwave’s sales were down 5% from the 2022 period. Its net loss of $22.8 million was less than the $27.9 million loss posted in the first three quarters of 2022.

Financial Troubles

Greenwave’s financial statements showed it had less than $1.5 million in cash, a working capital deficit of more than $16 million, and an accumulated deficit of $391.7 million as of the end of Q3.

“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,” it stated.

At the same time, however, Greenwave believes it has enough capital for its operations to become cashflow positive.

Market conditions and the company’s stock price will impact its ability to raise additional stock, it noted.

The company also said it is delinquent in filing payroll taxes.

Additionally, there is “material weakness in our internal control over financial reporting” that may allow for errors and even fraud to occur, it said.

While Greenwave plans to take steps to improve control of its financials, including the hiring of additional personnel, it said any remediation efforts will be dependent on its ability to secure additional financing.

Company Background

Greenwave was originally founded in 2013 as a technology platform known as MassRoots Inc. It changed its name in 2021 to Greenwave Technology Solutions Inc.

Also in 2021, Greenwave acquired Empire Services Inc., a metal recycler with 13 facilities and one metal processing facility in Virginia, North Carolina, and Ohio. Empire has 145 employees. Its headquarters are in Chesapeake, Va.

In December 2022, Greenwave began offering hauling services to corporate clients, operating a fleet of 50 of its own trucks.

In July 2023, Greenwave’s downstream processing facility in Kelford, N.C., began operating.

Over the past 18 months, the company has invested more than $15 million to upgrade its infrastructure and equipment. The installation of its second automotive shredder at its Carrollton, Va., facility this year doubled its ferrous metal processing capacity. Q4 revenues are expected to materially increase as a result, the company said.

The recycling company says one of its main priorities is to open a facility with rail or deepwater port access, as it would greatly expand its customer base for its processed scrap products.

Greenwave’s sales are concentrated in Virginia and northeastern North Carolina. Its financials revealed it has a concentration of customers, with one customer accounting for 55% of its Q3 revenues.

In its previous quarterly report, in which it posted a $2.3 million net loss, Greenwave said it was expecting continued “aggressive consolidation” in the scrap industry.