Greenwave says operational investments continue

Chesapeake, Virginia-based scrap yard network Greenwave Technologies Solutions Inc., which received a notice last October that its share price is below a level to maintain its Nasdaq stock market listing, has yet to release a Securities and Exchange Commission (SEC) 10-Q financial report this year.

It has been nearly four months since Greenwave’s last 10-Q filing in mid-November last year. Per the usual pattern of filing about every 90 days, the firm was due to file this February.

In mid-February, in lieu of a 10-Q, Greenwave and its CEO Danny Meeks released a shareholder update that does not refer to its profitability but does say the company is “on track" to generate record revenues in fiscal year 2024.

In its update, Greenwave, with yards carrying the Empire Services name, refers to new equipment being deployed and the startup of its second auto shredding plant in Carrollton, Virginia, as reasons for optimism.

The firm says its second shredder will be fully operational soon, pending finalizing its service with an electric utility company, and once operational is expected to double Greenwave’s ferrous metal processing capacity.

“Our existing automotive shredder is the same make and model—an American Pulverizer 60 x 85—providing us expertise in its operation and maintenance," the company says. "By shredding the steel which we currently sell unshredded, we anticipate that we will be able to generate approximately 30 percent more revenue with significant margins on that steel volume.

“Both our Virginia Beach [Virginia] and Cleveland yards continue to post impressive growth in terms of their revenues, volumes and profits—we expect they will soon become two of our top-performing locations.”

Additionally, the recycling firm recently has commenced operations of a metal baler, wire stripper and three shears at its nonferrous processing facility, which it says enables it to generate more revenues with higher margins on its aluminum and copper products.

​Greenwave also reports encouraging news from its wholly owned subsidiary, Scrap App Inc., which it says in the first 130 days since it launched continues to capture market share for end-of-life motor vehicles in Virginia and Ohio.

In earlier 10-Q filings, Greenwave indicated 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.

In its February shareholder update, Greenwave points to the August 2023 purchase of Baltimore Scrap Corp. by Sims Ltd. for about $177 million as a sign of encouragement.

“While Baltimore Scrap Corp. is larger than Greenwave—it operates 17 yards, four shredders and processes 600,000 metric tons of scrap each year—we believe this acquisition supports management’s view that Greenwave’s expansion strategy has the potential to create significant value for its shareholders,” Meeks says.

Greenwave says it remains capable of pursuing a growth strategy that will involve using seller’s notes as its preferred form of consideration as it expands. "[We] intend to spend the time and energy required to ensure the deals we pursue are fairly priced, properly structured and have the potential to create significant value for our shareholders," the company says.

“We believe the next few months will be transformative for Greenwave and look forward to sharing our progress and developments," Meeks concludes.