MASSROOTS, INC. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND OPERATING RESULTS (Form 10-Q / A)

You should read the following discussion and analysis in conjunction with our
condensed consolidated financial statements and related notes contained in Part
I, Item 1 of this Quarterly Report. Please also refer to the note about
forward-looking information for information on such statements contained in this
Quarterly Report immediately preceding Part I, Item 1.



Overview



Greenwave Technology Solutions, Inc. was formed in April 2013 as a technology
company under the name MassRoots, Inc. The Company recently closed its
acquisition of Empire Services, Inc. ("Empire"), acquiring the entirety of its
issued and outstanding equity. Our primary focus is expanding the number of
metal recycling facilities Empire operates and utilizing technology to improve
its operational efficiency.



COVID-19 Pandemic



In March 2020, the World Health Organization declared COVID-19 a global
pandemic. This contagious disease outbreak, which has continued to spread, and
any related adverse public health developments, has adversely affected
workforces, customers, economies, and financial markets globally, leading to an
economic downturn. It has also disrupted the normal operations of many
businesses, including ours. It is not possible for us to predict the duration or
magnitude of the adverse results of the outbreak of COVID-19 and its effects on
our business including our financial condition, liquidity, or results of
operations at this time. Management is actively monitoring the global situation
and its impact on the Company's financial condition, liquidity, operations,
customers, industry, and workforce. Given the daily evolution of the COVID-19
outbreak and the global responses to curb its spread, the Company is not able to
estimate the effects that the COVID-19 outbreak will have on its results of
operations, financial condition, or liquidity for fiscal year 2021. As of the
date of this Quarterly Report on Form 10-Q/A, the Company has experienced delays
in securing new customers and related revenues and the longer this pandemic
continues there may be additional impacts. Furthermore, the COVID-19 outbreak
has and may continue to impact the Company's ability to raise capital.



Although the Company cannot estimate the length or gravity of the impact of the
COVID-19 outbreak at this time, if the pandemic continues, it may have a
material adverse effect on the Company's results of future operations, financial
position, liquidity, and capital resources, and those of the third parties on
which the Company relies in fiscal year 2021.



For the three months ended September 30, 2021 and 2020


                                                           For the three months ended
                                            Sept 30,        Sept 30,             $               %
                                              2021            2020            Change          Change
Revenue                                    $       54     $      2,316     $      (2,262 )      (97.67 %)
Operating Expenses                            395,312          208,238           187,074         89.84 %

Loss from Operations                         (395,258 )       (205,922 )   

(189,336) 91.95%

Other Income (Expense)                       (128,483 )     64,885,144     

(65,013,627) (100.01%)

Net Income (Loss) Available to Common
Stockholders                               $ (523,741 )   $ 64,679,222     $ (65,202,963 )      (100.8 %)




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Revenues



For the three months ended September 30, 2021 and 2020, we generated revenues of
$54 and $2,316, respectively, a decrease of $2,262 primarily due to the relaunch
of product placements on the Company's YouTube and social media channels.



Operating Expenses



For the three months ended September 30, 2021 and 2020, our operating expenses
were $395,258 and $208,238, respectively, an increase of $187,074. There was a
decrease in advertising expenses from $43,020 for the three months ended
September 30, 2020 to ($4,578) for the same period in 2021, a decrease of
$47,598 as the Company advertised less. There was an increase in payroll and
related expenses of $2,814, as payroll and related expenses increased to $66,693
for the three months ended September 30, 2021 from $63,879 for same period in
2020. Other general and administrative expenses increased by $232,008 from
$101,189 for the three months ended September 30, 2020, to $333,197 for the
three months ended September 30, 2021. This increase was attributable to higher
travel and legal costs for the three months ended September 30, 2021 as compared
to the same period in 2020.



Loss from Operations



During the three months ended September 30, 2021, we incurred losses of $395,258
from operations, as compared to losses of $205,922 during the same period in
2020, a difference of $189,336, for the reasons stated above.



Other Income (Expense)



For the three months ended September 30, 2021 and 2020, the Company recorded
interest expense of $1,191,405 and $ 1,602,204, respectively, primarily related
to Company's convertible notes. The Company recorded $0 and a $0 loss on the
conversion of convertible notes payable for the three months ended September 30,
2021 and 2020, respectively. For the three months ended September 30, 2021 and
2020, the Company recorded a $0 change and a $85,287 loss, respectively, on the
change in fair value of derivative liabilities. For the three months ended
September 30, 2021 and 2020, the Company recorded gains of $2,641,481 and
$66,572,635, respectively, of the change in the fair value of the derivative
liability for the authorized shares shortfall. The Company recorded a $1,578,559
loss on settlement of convertible notes payable and accrued interest, warrants
and accounts payable during the three months ended September 30, 2021, as
compared to $0 during the same period in 2020. There was a $0 gain on the
forgiveness of debt for the three months ended September 30, 2021, as compared
to $0 during the same period in 2020.



Net income (loss) available to common shareholders

For the three months ended September 30, 2021, we had a net loss available to
common stockholders of $523,741 as compared to a net loss of $64,679,222 for the
same period in 2020, a difference of $65,202,963 for the reasons discussed
above.



For the nine months ended September 30, 2021 and 2020


                                                              For the nine months ended
                                             Sept 30,           Sept 30,              $               %
                                               2021               2020             Change          Change
Revenue                                    $       1,660     $        2,316     $        (656 )      (28.32 %)

Operating Expenses                             1,197,952            696,357           501,595         72.03 %

Loss from Operations                          (1,196,292 )         (694,041 )        (502,251 )       72.37 %
Other Income (Expense)                        12,060,441        (46,708,918

) 58,769,359 (125.82%)

Net Income (Loss) Available to Common
Stockholders                               $ (23,934,774 )   $ (142,405,892 )   $ 118,471,118        (83.19 %)




                                       33





Revenues


For the nine months ended September 30, 2021 and 2020, we generated revenue of
$ 1,660 and $ 2,316, respectively, a decrease in $ 656 primarily due to the relaunch of product placements on the Company’s YouTube channels and social media.



Operating Expenses



For the nine months ended September 30, 2021 and 2020, our operating expenses
were $1,197,952 and $696,357, respectively, an increase of $501,595. There was a
decrease in advertising expenses from $43,020 for the nine months ended
September 30, 2020 to $18,125 for the same period in 2021, a decrease of
$24,895. There was a decrease in payroll and related expenses of $14,167 due to
reduction in the number of employees, as payroll and related expenses decreased
to $225,603 for the nine months ended September 30, 2021 from $ 239,770 for same
period in 2020. Other general and administrative expenses increased by $540,510
from $413,417 for the nine months ended September 30, 2020, to $953,927 for the
nine months ended September 30, 2021. This increase was attributable to higher
travel and legal costs for the nine months ended September 30, 2021 as compared
to the same period in 2020.



Loss from Operations


During the nine months ended September 30, 2021, we suffered losses of
$ 1,196,292 of operations, compared to losses of $ 694,041 during the same period in 2020, a difference of $ 502,251, for the reasons mentioned above.


Other Income (Expense)


For the nine months ended September 30, 2021 and 2020, the Company recorded
interest expense of $2,147,364 and $3,607,210, respectively, primarily related
to Company's convertible notes. The Company recorded a $880 loss and $882 gain
on the conversion of convertible notes payable for the nine months ended
September 30, 2021 and 2020, respectively. For the nine months ended September
30, 2021 and 2020, the Company recorded a $300,885 and a $303,593 gain,
respectively, on the change in fair value of derivative liabilities. For the
nine months ended September 30, 2021 and 2020, the Company recorded losses of
$159,633,797 and $43,406,183, respectively, of changes in the fair value of the
derivative liability for the authorized shares shortfall. The Company recorded a
$173,349,076 gain on settlement of convertible notes payable and accrued
interest, warrants and accounts payable during the nine months ended September
30, 2021, as compared to $0 during the same period in 2020. There was a $192,521
gain on the forgiveness of debt for the nine months ended September 30, 2021, as
compared to $0 during the same period in 2020.



Net income (loss) available to common shareholders



For the nine months ended September 30, 2021, we had net losses available to
common stockholders of $23,934,774 as compared to a net loss of $142,405,892 for
the same period in 2020, a difference of $118,471,118 for the reasons discussed
above.


Liquidity and capital resources



Net cash used in operations for the nine months ended September 30, 2021 and
2020 was $390,269 and $717,062, respectively. This $326,793 decrease was
primarily caused by an increase in accounts payable and accrued expenses,
accrued payroll and related expenses, and deferred revenue. Net cash used in
operations for the nine months ended September 30, 2020 was primarily based on
the loss for the nine months ended September 30, 2020, partially offset by
decreases in accounts payable and accrued payroll.



Net cash provided by financing activities for the nine months ended September
30, 2021 and 2020 was $389,866 and $716,592 respectively. During the nine months
ended September 30, 2021, these funds were derived mainly from proceeds related
to the issuance of preferred shares and non-convertible notes. During the nine
months ended September 30, 2020, net cash provided by financing activities was
derived from the issuance of convertible notes, offset by repayment of
non-convertible notes.



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Capital Resources



As of September 30, 2021, the Company had cash of $1,082 and working capital
deficit (current liabilities in excess of current assets) of $17,539,723. During
the nine months ended September 30, 2021, the net loss available to common
stockholders was $23,934,774 and net cash used in operating activities was
$390,269. These conditions raise substantial doubt about our ability to continue
as a going concern for one year from the issuance of the condensed consolidated
financial statements. Our primary source of operating funds since inception has
been cash proceeds from the public and private placements of our securities,
including debt securities, and proceeds from the exercise of warrants and
options. We have experienced net losses and negative cash flows from operations
since inception and expect these conditions to continue for the foreseeable
future. For the foreseeable future, our ability to continue our operations is
dependent upon our ability to obtain additional capital through public or
private equity offerings, debt financings or other sources; however, financing
may not be available to us on acceptable terms, or at all. Our failure to raise
capital as and when needed would have a negative impact on our financial
condition and our ability to pursue our business strategy and we may be forced
to curtail or cease operations.



Management's plans regarding these matters encompass the following actions: 1)
obtain funding from new and current investors to alleviate our working capital
deficiency; and 2) implement a plan to generate revenues. Our continued
existence is dependent upon our ability to translate our audience into revenues.
However, the outcome of our plans cannot be determined with any degree of
certainty.



Accordingly, the accompanying condensed consolidated financial statements have
been prepared in conformity with accounting principles generally accepted in the
United States of America, which contemplates continuation of the Company as a
going concern and the realization of assets and satisfaction of liabilities in
the normal course of business for one year from the date the condensed
consolidated financial statements are issued. The carrying amounts of assets and
liabilities presented in the condensed consolidated financial statements do not
necessarily purport to represent realizable or settlement values. The condensed
consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty such as the final settlement amounts
of our notes payable and accrued interest.



Off-balance sheet provisions

From September 30, 2021, we had no off-balance sheet arrangements.



Contractual Obligations



Our contractual obligations are included in our notes to the condensed
consolidated financial statements included in Part I, Item I of this Quarterly
Report on Form 10-Q/A. To the extent that funds generated from our operations,
together with our existing capital resources, are insufficient to meet future
requirements, we will be required to obtain additional funds through equity or
debt financings. No assurance can be given that any additional financing will be
made available to us or will be available on acceptable terms should such a
need
arise.


Critical accounting conventions and estimates



For a discussion of our accounting policies and related items, please see the
notes to the condensed consolidated financial statements, included in Part I,
Item 1 of this Quarterly Report on Form 10-Q/A.

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