Greenwave’s operating loss widens in Q2

Greenwave Technology Solutions Inc., a company that operates about a dozen scrap yards in North Carolina, Virginia and Ohio under the Empire Recycling and Empire Metal Services names, experienced nearly $9 million in operating losses in this year’s second quarter.

The Chesapeake, Virginia-based company, which has stock listed on the Nasdaq exchange, says in its 10-Q form filed with the Securities and Exchange Commission that it garnered about $7.9 million in revenue this April, May and June.

However, it lists its “cost of revenues” at nearly $5.6 million and its operating expenses as more than $11.3 million. The company’s $8.9 million second-quarter operating loss is more than quadruple its $2 million operating loss in the second quarter of 2023.

Earlier this year, Greenwave undertook a reverse stock split to raise its stock price to above $1 per share to retain its Nasdaq listing.

Although that maneuver helped boost its stock price to more than $6 per share in early June, the Greenwave share price drifted back below $1 per share in early August and, as of the opening of trading Sept. 3, it stands at about 47 cents per share.

In its second-quarter 10-Q, Greenwave indicates it holds a stronger cash position than in many of its previous filings. The firm lists its more than $24 million in cash as its single-largest asset in a list that totals $74.6 million.

That figure outweighs what Greenwave considers its current “total liabilities” of $18.5 million. However, farther down the balance sheet, the company lists an “accumulated deficit” total of more than $473 million.

It is that last figure that likely has Greenwave again including a sentence in its quarterly notes section that reads, “These conditions raise 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.”

The firm adds in its notes, “If the company raises additional funds by issuing equity securities, its stockholders would experience dilution. Additional debt financing, if available, may involve covenants restricting its operations or its ability to incur additional debt. Any additional debt financing or additional equity that the company raises may contain terms that are not favorable to it or its stockholders and require significant debt service payments, which diverts resources from other activities.”

One section of Greenwave’s second-quarter notes involves descriptions of “factoring advances and nonconvertible notes,” describing five factoring (the sale of accounts receivable at a discount) moves made this year and 15 transactions involving promissory notes and deeds of trust undertaken in 2022 and 2023.

In terms of its operations, Greenwave highlights its auto shredder in Kelford, North Carolina, and as of the mid-August filing dates says its second automotive shredder at its Carrollton, Virginia, location is expected to come online in the third quarter of this year.

Last October, Greenwave indicated it had expected the Carrollton shredder to begin operating before the end of 2023.