SEC Filing | Nuvve Holding Corp.

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nvve-20220331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(MARK ONE)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission file number: 001-40296

NUVVE HOLDING CORP.

(Exact Name of Registrant as Specified in Its Charter)

Delaware

86-1617000

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

2468 Historic Decatur Road,

San Diego,

California

92106

(Address of principal executive offices)

(Zip Code)

(619)

456-5161

(Registrant’s telephone number), including area code

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbols

Name of each exchange on which registered

Common Stock, par value $0.0001 per share

NVVE

The Nasdaq Stock Market

Warrants to Purchase Common Stock

NVVEW

The Nasdaq Stock Market

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

xYes o No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

x Yes o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

o Yes x No

As of May 5, 2022, 18,969,086 shares of the issuer’s common stock, par value $0.0001 per share, were issued and outstanding.

NUVVE HOLDING CORP.

FORM 10-Q FOR THE QUARTER ENDED March 31, 2022

TABLE OF CONTENTS


PART I—FINANCIAL INFORMATION			1
	Item 1.	Interim Condensed Consolidated Financial Statements (Unaudited).	1
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	29
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	38
	Item 4.	Controls and Procedures.	38

PART II—OTHER INFORMATION			39
	Item 1.	Legal Proceedings	39
	Item 1A.	Risk Factors	39
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	40
	Item 3.	Defaults Upon Senior Securities.	40
	Item 4.	Mine Safety Disclosures.	40
	Item 5.	Other Information.	40
	Item 6.	Exhibits.	40

PART I—FINANCIAL INFORMATION

Item 1. Interim Financial Statements.

NUVVE HOLDING CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


	March 31, 2022		December 31, 2021
Assets
Current assets
Cash	$	23,704,646	$	32,360,520
Restricted cash	480,000		380,000
Accounts receivable	1,431,134		1,886,708
Inventories	9,328,206		11,118,188

Prepaid expenses and other current assets	1,685,008		1,036,645
Total Current Assets	36,628,994		46,782,061

Property and equipment, net	572,499		356,194
Intangible assets, net	1,446,218		1,481,077
Investment	670,951		670,951
Right-of-use operating assets	3,397,270		3,483,042
Deferred financing costs	43,562,847		43,562,847
Financing receivables	238,624		138,161
Security deposit, long-term	3,057		3,057
Total Assets	$	86,520,460	$	96,477,390

Liabilities, Mezzanine Equity and Stockholders’ Equity

Current Liabilities
Accounts payable	$	3,216,560	$	5,738,873
Accrued expenses	3,564,224		2,874,018
Deferred revenue	690,868		719,771

Operating lease liabilities - current	254,057		41,513

Other liabilities	108,384		110,574

Total Current Liabilities	7,834,093		9,484,749

Operating lease liabilities - noncurrent	3,319,734		3,441,642
Warrants liability	458,476		866,000
Derivative liability - non-controlling redeemable preferred shares	433,000		511,948
Other long-term liabilities	17,283		18,860
Total Liabilities	12,062,586		14,323,199

Commitments and Contingencies
Mezzanine equity
Redeemable non-controlling interests, preferred shares, zero par value, 1,000,000 shares authorized, 3,138 shares issue and outstanding at March 31, 2022 and December 31, 2021; aggregate liquidation preference of $3,264,775 at March 31, 2022	3,046,892		2,885,427
Stockholders’ (Deficit) Equity


Preferred stock, $0.0001 par value, 1,000,000 shares authorized; zero shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively	—		—

Common stock, $0.0001 par value, 100,000,000 shares authorized; 18,891,500 and 18,861,130 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively	1,891		1,888

Additional paid-in capital	128,594,145		127,138,504
Accumulated other comprehensive income (loss)	99,762		113,446
Accumulated deficit	(56,385,798)		(47,412,470)
Nuvve Stockholders’ Equity (Deficit)	72,310,000		79,841,368
Non-controlling interests	(899,018)		(572,604)
Total Stockholders’ Equity (Deficit)	71,410,982		79,268,764
Total Liabilities, Mezzanine equity and Stockholders’ Equity	$	86,520,460	$	96,477,390

The accompanying notes are an integral part of these condensed consolidated financial statements.

NUVVE HOLDING CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


	Three Months Ended March 31,
	2022		2021
Revenue
Products and services	$	2,253,784	$	311,903
Grants	117,249		487,129
Total revenue	2,371,033		799,032
Operating expenses
Cost of product and service revenue	2,142,312		127,228
Selling, general, and administrative	7,625,550		4,482,740
Research and development	2,135,575		1,262,950
Total operating expenses	11,903,437		5,872,918

Operating loss	(9,532,404)		(5,073,886)
Other income (expense)
Interest income (expense)	1,458		(597,549)


Change in fair value of warrants liability	433,000		421,830
Change in fair value of derivative liability	53,472		—
Other, net	(29,787)		(112,115)
Total other (expense) income, net	458,143		(287,834)
Loss before taxes	(9,074,261)		(5,361,720)
Income tax (benefit) expense	—		—
Net loss	$	(9,074,261)	$	(5,361,720)
Less: Net loss attributable to non-controlling interests	(100,933)		—
Net loss attributable to Nuvve Holding Corp.	$	(8,973,328)	$	(5,361,720)
Less: Preferred dividends on redeemable non-controlling interests	64,015		—
Less: Accretion on redeemable non-controlling interests preferred shares	161,466		—
Net loss attributable to Nuvve common stockholders	$	(9,198,809)	$	(5,361,720)

Net loss per share attributable to Nuvve common stockholders, basic and diluted	$	(0.49)	$	(0.52)

Weighted-average shares used in computing net loss per share attributable to Nuvve common stockholders, basic and diluted	18,864,374		10,408,080

The accompanying notes are an integral part of these condensed consolidated financial statements.

NUVVE HOLDING CORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)


	Three Months Ended March 31,
	2022		2021
Net loss	$	(9,074,261)	$	(5,361,720)
Other comprehensive (loss) income, net of taxes
Foreign currency translation adjustments, net of taxes	(13,684)		116,749
Total Comprehensive loss	$	(9,087,945)	$	(5,244,971)
Less: Comprehensive loss attributable to non-controlling interests	(100,933)		—
Comprehensive loss attributable to Nuvve Holding Corp.	$	(8,987,012)	$	(5,244,971)
Less: Preferred dividends on redeemable non-controlling interests	(64,015)		—
Less: Accretion on redeemable non-controlling interests preferred shares	(161,466)		—
Comprehensive loss attributable to Nuvve common stockholders	$	(8,761,531)	$	(5,244,971)

The accompanying notes are an integral part of these condensed consolidated financial statements.

NUVVE HOLDING CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

(Unaudited)


	Common Stock	Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit			Non-controlling Interests		Total
			Shares					Amount
Balances December 31, 2021		18,861,130		$	1,888	$	127,138,504		$	113,446	$	(47,412,470)	$	(572,604)	79,268,764
Exercise of stock options and vesting of restricted stock		30,370		3		—			—		—		—		3
Stock-based compensation		—		—		1,455,641			—		—		—		1,455,641

Currency translation adjustment		—		—		—			(13,684)		—		—		(13,684)
Preferred dividends - non-controlling interest		—		—		—			—		—		(64,015)		(64,015)
Accretion on redeemable non-controlling interests preferred shares		—		—		—			—		—		(161,466)		(161,466)

Net loss		—		—		—			—		(8,973,328)		(100,933)		(9,074,261)
Balances March 31, 2022		18,891,500		$	1,891	$	128,594,145		$	99,762	$	(56,385,798)	$	(899,018)	$	71,410,982

The accompanying notes are an integral part of these condensed consolidated financial statements.

NUVVE HOLDING CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) (continued)

(Unaudited)


	Series A Convertible Preferred Stock			Common Stock		Additional Paid-in Capital			Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit				Total
	Shares	Amount			Shares			Amount
Balances December 31, 2020, as previously reported	16,789,088	$	1,679		26,162,122	$	2,616		$	19,650,659	$	(77,841)	$	(20,457,823)		$	(880,710)
Conversion of shares due to merger capitalization	(16,789,088)	(1,679)			(17,039,126)	(1,704)			3,383		—		—			—
Balances December 31, 2020, as previously reported	—	—			9,122,996	912			19,654,042		(77,841)		(20,457,823)			(880,710)
Beneficial conversion feature - convertible debenture	—	—			—	—			427,796		—		—			427,796
Conversion of convertible debenture	—	—			544,178	54			3,999,381		—		—			3,999,435
Repurchase of common stock from EDF	—	—			(600,000)	(60)			(5,999,940)		—		—			(6,000,000)
Assumption of private warrant liability from Newborn	—	—			—	—			(1,253,228)		—		—			(1,253,228)
Merger recapitalization, net of share redemption of $18,629 and issuance costs of $5,979,675	—	—			8,060,418	806			51,750,557		—		—			51,751,363
Placement agent fee paid in common stock	—	—			208,532	21			2,085,299		—		—			2,085,320
PIPE offering, less issuance costs of $2,500	—	—			1,425,000	143			14,247,357		—		—			14,247,500
Notice of exercise of put option	—	—			—	—			(2,000,000)		—		—			(2,000,000)
Stock-based compensation	—	—			—	—			262,105		—		—			262,105
Currency translation adjustment	—	—			—	—			—		116,749		—			116,749
Net loss	—	—			—	—			—		—		(5,361,720)			(5,361,720)
Balances March 31, 2021	—	—			18,761,124	1,876			83,173,369		38,908		(25,819,543)			57,394,610

The accompanying notes are an integral part of these condensed consolidated financial statements.

NUVVE HOLDING CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Three Months Ended March 31,
	2022		2021
Operating activities
Net loss	$	(9,074,261)	$	(5,361,720)
Adjustments to reconcile to net loss to net cash used in operating activities
Depreciation and amortization	67,302		41,390
Share-based compensation	1,455,644		262,105
Beneficial conversion feature on convertible debenture	—		427,796
Accretion of discount on convertible debenture	—		116,147
Change in fair value of warrants liability	(433,000)		(421,830)
Change in fair value of derivative liability	(53,472)		—
Loss on disposal of asset	—		1,405
Gain on extinguishment of PPP Loan	—		(764)
Noncash lease expense	178,849		—
Change in operating assets and liabilities
Accounts receivable	454,849		151,204
Inventory	1,789,982		(1,853,640)
Prepaid expenses and other assets	(915,356)		(1,656,880)
Accounts payable	(2,521,672)		1,703,781
Accrued expenses	624,722		3,723,729
Deferred revenue	(23,476)		233,426
Net cash used in operating activities	(8,449,889)		(2,633,851)
Investing activities
Proceeds from sale of property and equipment	—		8,107
Purchase of property and equipment	(250,861)		—

Net cash (used) provided in investing activities	(250,861)		8,107
Financing activities
Deposit with Newborn	—		(287,500)

Proceeds from Newborn Escrow Account	—		58,471,961
Redemption of Newborn shares	—		(18,630)
Issuance costs related to reverse recapitalization and PIPE offering	—		(3,704,921)
Proceeds from PIPE offering	—		14,250,000
Repayment of Newborn sponsor loans	—		(487,500)
Repurchase of common stock from EDF	—		(6,000,000)
Newborn cash acquired	—		50,206


Payment of finance lease Obligations	(2,073)		—






Net cash (used) provided in financing activities	(2,073)		62,273,616
Effect of exchange rate on cash	146,949		119,541
Net increase (decrease) in cash and restricted cash	(8,555,874)		59,767,413
Cash and restricted cash at beginning of year	32,740,520		2,275,895
Cash and restricted cash at end of period	$	24,184,646	$	62,043,308















The accompanying notes are an integral part of these condensed consolidated financial statements.


NUVVE HOLDING CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(Unaudited)
	Three Months Ended March 31,
	2022		2021



Supplemental Disclosure of Noncash Financing Activity
Conversion of preferred stock to common stock	$	—	$	1,679
Conversion of debenture and accrued interest to common shares	$	—	$	3,999,435
Conversion of shares due to reverse recapitalization	$	—	$	3,383

Issuance of common stock for merger success fee	$	—	$	2,085,299
Non-cash merger transaction costs	$	—	$	2,085,299
Accrued transaction costs related to reverse recapitalization	$	—	$	189,434
Issuance of private warrants	$	—	$	1,253,228

Transfer of Inventory to property and equipment	$	87,095	$	—

The accompanying notes are an integral part of these condensed consolidated financial statements.

NUVVE HOLDING CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 – Organization and Description of Business

Description of Business

Nuvve Holding Corp., a Delaware corporation headquartered in San Diego, California (the “Company” or “Nuvve”), was founded on November 10, 2020 under the laws of the state of Delaware. On March 19, 2021, the Company (at the time known as NB Merger Corp.) acquired the outstanding shares of Nuvve Corporation (“Nuvve Corp.”), and the Company changed its name to Nuvve Holding Corp.

Structure of the Company

Nuvve has two wholly owned subsidiaries, Nuvve Corp. and Nuvve Co (Nuvve Japan). Nuvve Corp. has three wholly owned subsidiaries: (1) Nuvve Denmark ApS, (“Nuvve Denmark”), a company registered in Denmark, (2) Nuvve SaS, a company registered in France, and (3) Nuvve LTD, a company registered in United Kingdom. In March 2020, following the establishment of its investment in Dreev in 2019 (Note 6), the Company ceased operations of its subsidiary, Nuvve SaS in France. The two employees of Nuvve SaS resigned from the Company in March 2020 and were concurrently hired by Dreev. Financial results for Nuvve SaS are included in the Company’s financial results through the cessation of operations.

On August 4, 2021, the Company formed Levo Mobility LLC, a Delaware limited liability company ("Levo"), with Stonepeak Rocket Holdings LP, a Delaware limited partnership (Stonepeak"), and Evolve Transition Infrastructure LP, a Delaware limited partnership ("Evolve"). Levo is a consolidated a entity of the Company. Please see Note 2 for the principles of consolidation.

Levo is a sustainable infrastructure company focused on rapidly advancing the electrification of transportation by funding V2G-enabled EV fleet deployments. Levo utilizes Nuvve’s V2G technology and committed capital from Stonepeak and Evolve to offer Fleet-as-a-Service for school buses, last-mile delivery, ride hailing and ride sharing, municipal services, and more to eliminate the primary barriers to EV fleet adoption including large upfront capital investments and lack of expertise in securing and managing EVs and associated charging infrastructure.

Levo's turnkey solution simplifies and streamlines electrification, can lower the total cost of EV operation for fleet owners, and support the grid when the EVs are not in use. For a fixed monthly payment with no upfront cost, Levo will provide the EVs, such as electric school buses, charging infrastructure powered by Nuvve’s V2G platform, EV and charging station maintenance, energy management, and technical advice.

Levo will initially focus on electrifying school buses, providing associated charging infrastructure, and delivering V2G services to enable safer and healthier transportation for children while supporting carbon dioxide emission reduction, renewable energy integration, and improved grid resiliency.

NUVVE HOLDING CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note 2 – Summary of Significant Accounting Policies

For a detailed discussion about the Company’s significant accounting policies, see Note 2, “Summary of Significant Accounting Policies,” in the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (the “2021 Form 10-K”).

During the three months ended March 31, 2022, there were no significant updates made to the Company’s significant accounting policies.

Basis of Presentation

The accompanying unaudited (i) condensed consolidated balance sheet as of December 31, 2021, which has been derived from audited financial statements, and (ii) the unaudited interim condensed financial statements have been prepared in accordance pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. Therefore, it is suggested that these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes in the 2021 Form 10-K, filed with the Securities and Exchange Commission ("SEC") on March 31, 2022.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, comprehensive loss, cash flows, and stockholders’ equity for the interim periods, but are not necessarily indicative of the results to be anticipated for the full year 2022 or any future period.

In accordance with Accounting Standards Codification ("ASC") 205-40, Presentation of Financial Statements - Going Concern, the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about its ability to continue as a going concern within one year after the that the consolidated financial statements are issued. Since inception, the Company has incurred recurring losses and negative cash flows from operations since inception and has an accumulated deficit of $56.4 million as of March 31, 2022. Nuvve incurred net losses of approximately $9.1 million for the quarter ended March 31, 2022, and $27.2 million and $4.7 million for the years ended December 31, 2021, and 2020, respectively. As of March 31, 2022, Nuvve had a cash balance, working capital, and stockholders’ equity of $23.7 million, $28.8 million and $71.4 million, respectively. The Company continues to expect to generate operating losses and negative cash flows and may need additional funding to support its planned operating activities through profitability. The transition to profitability is dependent upon the successful expanded commercialization of the Company's GIVe platform and the achievement of a level of revenues adequate to support its cost structure.

The Company expects its cash and cash equivalents as of May 12, 2022 will be sufficient to fund current planned operations for at least the next twelve months from the date of issuance of these consolidated financial statements. Management's expectations with respect to its ability to fund current planned operations is based on estimates that are subject to risks and uncertainties. Actual results could be different from management's estimates and should actual results be less favorable than these estimates management would ultimately need to take corrective steps to improve future operating results and its financial condition.

Principles of Consolidation

The condensed consolidated financial statements include the accounts and operations of the Company, its wholly owned subsidiaries and its consolidated variable interest entity. All intercompany accounts and transactions have been eliminated upon consolidation.

Variable Interest Entities

Pursuant to the consolidation guidance, the Company first evaluates whether it holds a variable interest in an entity in which it has a financial relationship and, if so, whether or not that entity is a variable interest entity ("VIE"). A VIE is an entity with insufficient equity at risk for the entity to finance its activities without additional subordinated financial support or in which equity investors lack the characteristics of a controlling financial interest. If an entity is determined to be a VIE, the Company evaluates whether the Company is the primary beneficiary. The primary beneficiary analysis is a qualitative analysis based on power and economics. The Company concludes that it is the primary beneficiary and consolidates the VIE if the Company has

NUVVE HOLDING CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

both (i) the power to direct the activities of the VIE that most significantly influence the VIE's economic performance, and (ii) the obligation to absorb losses of, or the right to receive benefits from, the VIE that could potentially be significant to the VIE.

The Company formed Levo with Stonepeak and Evolve, in which the Company owns 51% of Levo's common units. The Company has determined that Levo is a VIE in which the Company is the primary beneficiary. Accordingly, the Company consolidates Levo and records a non-controlling interest for the share of the entity owned by Stonepeak and Evolve.

Assets and Liabilities of Consolidated VIEs

The Company's condensed consolidated financial statements include the assets, liabilities and results of operations of VIEs for which the Company is the primary beneficiary. The other equity holders’ interests are reflected in "Net loss attributable to non-controlling interests" in the condensed consolidated statements of operations and "Non-controlling interests" in the condensed consolidated balance sheets. See Note 18 for details of non-controlling interests. The Company began consolidating the assets, liabilities and results of operations of Levo during the quarter ended March 31, 2022.

The creditors of the consolidated VIE do not have recourse to the Company other than to the assets of the consolidated VIEs. The following table summarizes the carrying amounts of Levo assets and liabilities included in the Company’s condensed consolidated balance sheets at March 31, 2022:


	March 31, 2022
Assets

Cash	$	28,257










Deferred financing costs	3,920,323

Total Assets	$	3,948,580

Liabilities and Mezzanine Equity


Accrued expenses	$	236,775






Derivative liability - non-controlling redeemable preferred shares	458,476

Total Liabilities	$	695,251

Redeemable Non-Controlling Interest - Mezzanine Equity

Redeemable non-controlling interest represents the shares of the preferred stock issued by Levo to Stonepeak and Evolve (the "preferred shareholders") who own 49% of Levo common units. The preferred stock is not mandatorily redeemable or currently redeemable, but it could be redeemable with the passage of time at the election of Levo, the preferred shareholders or a trigger event as defined in the preferred stock agreement. As a result of the contingent put right available to the preferred shareholders, the redeemable non-controlling interests in Levo are classified outside of permanent equity in the Company’s unaudited condensed consolidated balance sheets as mezzanine equity. The initial carrying value of the redeemable non-controlling interest is reported at the initial proceeds received on issuance date, reduced by the fair value of embedded derivatives resulting in an adjusted initial carrying value. The adjusted initial carrying value is further adjusted for the accretion of the difference with the redemption price value using the effective interest method. The accretion amount is a deemed dividend recorded against retained earnings or, in its absence, to additional-paid-in-capital. The carrying amount of the redeemable non-controlling interest is measured at the higher of the carrying amount adjusted each reporting period for income (or loss) attributable to the non-controlling interest, or the carrying amount adjusted each reporting period by the accretion amount. See Note 18 for details.

Non-controlling interests

The Company presents non-controlling interests as a component of equity on its condensed consolidated balance sheets and reports the portion of its earnings or loss for non-controlling interest as net earnings or loss attributable to non-controlling interests in the condensed consolidated statements of operations.

Emerging Growth Company

Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) permits emerging growth companies (“EGC”) to delay complying with new or revised financial accounting standards that do not yet apply to private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act). The Company qualifies as an EGC. The JOBS Act provides that an EGC can elect to opt-out of the extended transition period and comply with the requirements that apply to non-EGCs, but any such election to opt-out is irrevocable. The Company has elected not to opt-out of such an extended transition period, which means that when a standard

NUVVE HOLDING CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

is issued or revised and it has different application dates for public or private companies, the Company, as an EGC, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This different adoption timing may make a comparison of the Company’s financial statements with another public company which is neither an EGC nor an EGC that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

COVID-19

The novel coronavirus (COVID-19) which was declared a pandemic in March 2020, and the related restrictive measures such as travel restrictions, quarantines, and shutdowns, has negatively impacted the global economy. As national and local governments in different countries ease COVID-19 restrictions, and vaccines are distributed and rolled out successfully, we continue to see improved economic trends. However, COVID-19 and actions taken to mitigate its spread have had and are expected to continue to have an adverse impact on the economies and financial markets of many countries, including the geographical area in which the Company operates. The Company continues to monitor the situation closely but, at this time, is unable to predict the cumulative impact, both in terms of severity and duration, that the coronavirus pandemic has and will have on its business, operating results, cash flows and financial condition, and it could be material if the current circumstances continue to exist for a prolonged period of time. In addition to any direct impact on Nuvve’s business, it is reasonably possible that the estimates made by management in preparing Nuvve’s financial statements have been, or will be, materially and adversely impacted in the near term as a result of the on-going COVID-19 conditions.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that may affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions made by management include the impairment of intangible assets, the net realizable value of inventory, the fair value of share-based payments, the fair value of notes payable conversion options, revenue recognition, the fair value of warrants, and the recognition and disclosure of contingent liabilities.

Management evaluates its estimates on an ongoing basis. Actual results could materially vary from those estimates.

Cash and Restricted Cash

The Company maintains cash balances that can, at times, exceed amounts insured by the Federal Deposit Insurance Corporation, which is up to $250,000. The Company has not experienced any losses in these accounts and believes it is not exposed to any significant credit risk in this area.

Concentrations of Credit Risk

At March 31, 2022 and December 31, 2021, the financial instruments which potentially expose the Company to concentration of credit risk consist of cash in financial institutions (in excess of federally insured limits) and trade receivables.

The Company had certain customers whose revenue individually represented 10% or more of the Company’s total revenue, or whose accounts receivable balances individually represented 10% or more of the Company’s total accounts receivable, as follows:

For the three months ended March 31, 2022 and 2021, one customer accounted for 72.8%, and two customers in aggregate accounted for 49.9% of revenue, respectively.

During the three months ended March 31, 2022 and 2021, the Company's top five customers accounted for approximately 87.5% and 71.4%, respectively, of the Company’s total revenue.

At March 31, 2022, two customers in aggregate accounted for 35.7% of accounts receivable. At December 31, 2021, two customers in aggregate accounted for 32.2% of accounts receivable.

Approximately 58.7% and 56.0% of the Company’s trade accounts receivable balance was with five customers at March 31, 2022 and December 31, 2021, respectively. The Company estimates its maximum credit risk for accounts receivable at the amount recorded on the balance sheet. The trade accounts receivables are generally short-term and all probable bad debt losses have been appropriately considered in establishing the allowance for doubtful accounts.

NUVVE HOLDING CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Deferred Financing Costs

Deferred financing costs consist of direct and incremental costs incurred and fees paid for a commitment to obtain financing. As the commitment amount is funded, the carrying amount of the deferred financing costs is reduced and the amount is charged to additional-paid-in-capital. The deferred financing cost will be impaired if it becomes probable that funding of the commitment amount will not occur.

Recently adopted accounting pronouncements

None.

Recently issued accounting pronouncements not yet adopted

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) – Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 requires, among other things, the use of a new current expected credit loss ("CECL") model in determining the allowances for doubtful accounts with respect to accounts receivable, accrued straight-line rents receivable, and notes receivable. The CECL model requires that an entity estimate its lifetime expected credit loss with respect to these receivables and record allowances that, when deducted from the balance of the receivables, represent the net amounts expected to be collected. Entities will also be required to disclose information about how the entity developed the allowances, including changes in the factors that influenced its estimate of expected credit losses and the reasons for those changes. This update is effective for fiscal years beginning after December 15, 2022, with early adoption permitted. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements.

NUVVE HOLDING CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note 3 – Revenue Recognition

The disclosures below discuss the Company’s material revenue contracts.

The following table provides information regarding disaggregated revenue based on revenue by service lines for the three months ended March 31:


	Three Months Ended March 31,
	2022		2021
Revenue recognized over time:
Services	$	194,650	$	167,245
Grants	117,249		487,129
Products	2,059,134		144,658
Total revenue	$	2,371,033	$	799,032

The aggregate amount of revenue for the Company’s existing contracts with customers as of March 31, 2022 expected to be recognized in the future, and classified as deferred revenue on the condensed consolidated Balance Sheet, for years ended December 31, is as follows (this disclosure does not include revenue related to contracts whose original expected duration is one year or less):


2022 (remaining nine months)	$	540,331
Thereafter	150,537
Total	$	690,868

Segment Reporting

The Company operates in a single business segment, which is the EV V2G Charging segment. The following table summarizes the Company’s revenues for the three months ended March 31, 2022 and 2021:


	Three Months Ended March 31,
	2022		2021
Revenues:
United States	$	2,227,734	$	591,831
United Kingdom	37,390		141,286
Denmark	105,909		65,915
	$	2,371,033	$	799,032

The following table summarizes the Company’s long-lived assets in different geographic locations as of March 31, 2022 and December 31, 2021:


	March 31, 2022		December 31, 2021
Long-lived assets:
United States	$	1,948,891	$	1,811,607
Denmark	23,550		25,664
	$	1,972,441	$	1,837,271

NUVVE HOLDING CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note 4 – Fair Value Measurements

The following are the liabilities measured at fair value on the condensed consolidated balance sheet at March 31, 2022 using quoted price in active markets for identical assets (Level 1); significant other observable inputs (Level 2); and significant unobservable inputs (Level 3):


	Level 1: Quoted Prices in Active Markets for Identical Assets		Level 2: Significant Other Observable Inputs		Level 3: Significant Unobservable Inputs		Total at March 31, 2022		Total Gains (Losses) For The Three Months Ended March 31, 2022
Recurring fair value measurements
Private warrants	$	—	$	—	$	433,000	$	433,000	$	433,000
Derivative liability - non-controlling redeemable preferred shares	—		—		458,476		458,476		53,472
Total recurring fair value measurements	$	—	$	—	$	891,476	$	891,476	$	486,472

The following is a reconciliation of the opening and closing balances for the liabilities related to the private warrants (Note 11) and derivative liability - non-controlling redeemable preferred shares measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the three months ended March 31, 2022:


	Private Warrants		Non-controlling redeemable preferred shares - derivative liability
Balance at December 31, 2021	$	866,000	$	511,948






Total (gains) losses for period included in earnings	(433,000)		(53,472)
Balance at March 31, 2022	$	433,000	$	458,476

The fair value of the level 3 Private Warrants was estimated at March 31, 2022 using the Black-Scholes model which used the following inputs: term of 3.97 years, risk free rate of 2.4%, no dividends, volatility of 64.0%, and strike price of $11.50.

The fair value of the level 3 derivative liability - non-controlling redeemable preferred shares are estimated at March 31, 2022 using the Monte Carlo Simulation model which used the following inputs: terms range from 3.0 years to 7.0 years, risk free rate of 2.4%, no dividends, volatility of 56.0% and probability of redemptions triggered of 75.0%.

There were no transfers between Level 1 and Level 2 of the fair value hierarchy in 2022 and 2021.

Cash, accounts receivable, accounts payable, and accrued expenses are generally carried on the cost basis, which management believes approximates fair value due to the short-term maturity of these instruments.

Note 5 - Derivative Liability - Non-Controlling Redeemable Preferred Stock

The Company has determined that the redemption features embedded in the non-controlling redeemable preferred stock is required to be accounted for separately from the redeemable preferred stock as a derivative liability. Separation of the redemption features as a derivative liability is required because its economic characteristics and risks are considered more akin to a debt instrument, and therefore, not considered to be clearly and closely related to the economic characteristics of the redeemable preferred stock. The economic characteristics of the redemption features are considered more akin to an debt instrument because the minimum redemption value could be greater than the face amount, the redemption features are contingently exercisable, and the shares carry a fixed mandatory dividend.

Accordingly, the Company has recorded an embedded derivative liability representing the estimated fair value of the right of the holders to exercise their redemption option upon the occurrence of a redemption event. The embedded derivative liability is adjusted to reflect fair value at each period end with changes in fair value recorded in the “Change in fair value of derivative liability” financial statement line item of the company’s consolidated statements of operations. For additional information on the non-controlling redeemable preferred stock, see Note 18.

NUVVE HOLDING CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The following table display the fair value of derivatives by balance sheet line item at March 31, 2022 and December 31, 2021:


	March 31, 2022		December 31, 2021
Other long term liabilities:
Derivative liability - non-controlling redeemable preferred shares	$	458,476	$	511,948

Note 6 – Investment in Dreev

The Company accounts for its 13% equity ownership in Dreev under the costs method. The Company has a consulting services agreement with Dreev related to software development and operations. The consulting services were zero for each of the three months ended March 31, 2022 and 2021. The consulting services are being provided to Dreev at the Company’s cost and is recognized, net of consulting costs, as other income, net in the condensed consolidated statements of operations.

Note 7 – Account Receivables, Net

The following tables summarizes the Company's accounts receivable on the consolidated balance sheets at March 31, 2022 and December 31, 2021:


		March 31, 2022		December 31, 2021

Trade receivables		$	1,494,322	$	1,949,896

Less: allowance for doubtful accounts		(63,188)		(63,188)

	Accounts receivable, net	$	1,431,134	$	1,886,708

Allowance for doubtful accounts:

	Balance December 31, 2021	$	(63,188)
	Provision	—
	Write-off	—
	Recoveries	—
	Balance March 31, 2022	$	(63,188)

Note 8 – Inventories

The following table summarizes the Company’s inventories balance by category:


	March 31, 2022		December 31, 2021
DC Chargers	$	7,431,300	$	7,687,598
AC Chargers	204,687		232,920
Vehicles - School Buses (1)	1,620,000		3,180,000
Others	72,219		17,670
Total	$	9,328,206	$	11,118,188

__________________

(1)As of March 31, 2022, the Company has taken delivery of ten school buses it has committed to purchase from the manufacturer within one year from the purchase order date of May 26, 2021. During the first quarter ended March 31, 2022, five school buses were sold.

NUVVE HOLDING CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note 9 – Property, Plant and Equipment

The following table summarizes the Company’s property, plant and equipment balance at March 31, 2022 and December 31, 2021:


	March 31, 2022		December 31, 2021


Computers & Servers	$	113,490	$	105,499
Vehicles	168,862		168,862

Office furniture and equipment	317,546		161,771
Others	93,146		6,050
Total	693,044		442,182
Less: Accumulated Depreciation	(120,545)		(85,988)
Property, plant and equipment, net	$	572,499	$	356,194

	March 31, 2022		March 31, 2021

Depreciation expense	$	25,975	$	6,508

Note 10 – Intangible Assets

At both March 31, 2022 and December 31, 2021, the Company had recorded a gross intangible asset balance of $2,091,556, which is related to patent and intangible property rights acquired. Amortization expense of intangible assets was $34,860 each for the three months ended March 31, 2022 and 2021. Accumulated amortization totaled $645,340 and $610,480 at March 31, 2022 and December 31, 2021, respectively.

The net amount of intangible assets of $1,446,218 at March 31, 2022, will be amortized over the weighted average remaining life of 10.6 years.

Total estimated future amortization expense is as follows:


2022 (remaining nine months)	$	104,577
2023	139,437
2024	139,437
2025	139,437
2026	139,437
Thereafter	783,893
	$	1,446,218

NUVVE HOLDING CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note 11 – Stockholders’ Equity

As of March 31, 2022, the Company has authorized two classes of stock, Common Stock, and Preferred Stock. The total number of shares of all classes of capital stock which the Company has authority to issue is 101,000,000, of which 100,000,000 authorized shares are Common Stock with a par value of $0.0001 per share (“Common Stock”), and 1,000,000 authorized shares are Preferred Stock of the par value of $0.0001 per share (“Preferred Stock”). Please see Note 12, “Stockholders' Equity,” in the Notes to Consolidated Financial Statements included in the Company’s 2021 Form 10-K for a detailed discussion of the Company’s stockholders' equity. Additionally, see Note 19, “Levo Mobility LLC Entity,” in the Notes to Consolidated Financial Statements included in the Company’s 2021 Form 10-K for a detailed discussion of the Company’s Stonepeak and Evolve Warrants and Securities Purchase agreement, and Levo definitive agreements.

Warrants - Stonepeak and Evolve

On May 17, 2021, in connection with the signing of a letter of agreement, as reference above, relating to the formation of a venture, Levo Mobility LLC (the "Letter Agreement"), the Company issued to Stonepeak and Evolve a ten years warrants to purchase common stock (allocated 90% to Stonepeak and 10% to Evolve). See below for details. The grant-date fair value of the warrants issued to Stonepeak and Evolve were; series B $12.8 million, series C $5.6 million, series D $4.8 million, series E $3.8 million and series F $3.2 million. The fair values of the warrants are recorded in the consolidated balance sheets in additional-paid-in capital in stockholders' equity as the warrants are indexed to the Company’s common stock and meet the conditions for equity classification, and deferred financing costs. The carrying amount of the deferred financing costs is reduced as the commitment amount is funded, and the reduction amount is charged to additional-paid-in capital. As of March 31, 2022, the commitment funded of $3.2 million has reduced the deferred financing costs, and charged to additional-paid-in capital.

In connection with the signing of the Letter Agreement, the Company issued to Stonepeak and Evolve the following ten years warrants to purchase common stock (allocated 90% to Stonepeak and 10% to Evolve):

•Series B warrants to purchase 2,000,000 shares of the Company’s common stock, at an exercise price of $10.00 per share, which are fully vested upon issuance,

•Series C warrants to purchase 1,000,000 shares of the Company’s common stock, at an exercise price of $15.00 per share, which are vested as to 50% of the shares upon issuance and vest as to the remaining 50% when Levo has entered into contracts with third parties for $125 million in aggregate capital expenditures,

•Series D warrants to purchase 1,000,000 shares of the Company’s common stock, at an exercise price of $20.00 per share, which are vested as to 50% of the shares upon issuance and vest as to the remaining 50% when Levo has entered into contracts with third parties for $250 million in aggregate capital expenditures,

•Series E warrants to purchase 1,000,000 shares of the Company’s common stock, at an exercise price of $30.00 per share, which are vested as to 50% of the shares upon issuance and vest as to the remaining 50% when Levo has entered into contracts with third parties for $375 million in aggregate capital expenditures, and

•Series F warrants to purchase 1,000,000 shares of the Company’s common stock, at an exercise price of $40.00 per share, which are vested as to 50% of the shares upon issuance and vest as to the remaining 50% when Levo has entered into contracts with third parties for $500 million in aggregate capital expenditures.

The warrants may be exercised at any time on or after the date that is 180 days after the applicable vesting date.

Warrants - Public and Private

In connection with its initial public offering on February 19, 2020, Newborn sold 5,750,000 units, which included one warrant to purchase Newborn’s common stock (the “Public Warrants”). Also, on February 19, 2020, NeoGenesis Holding Co., Ltd., Newborn’s sponsor (“the Sponsor”), purchased an aggregate of 272,500 private units, each of which included one warrant (the “Private Warrants”), which have the same terms as the Public Warrants. Upon completion of the merger between Nuvve and Newborn, the Public Warrants and Private Warrants were automatically converted to warrants to purchase Common Stock of the Company.

The terms of the Private Warrants are identical to the Public Warrants as described above, except that the Private Warrants are not redeemable so long as they are held by the Sponsor or its permitted transferees. Concurrently with the execution of the Merger Agreement on November 11, 2020, Newborn entered into subscription agreements with certain accredited investors pursuant to which the investors agreed to purchase 1,425,000 of Newborn’s common stock, at a purchase price of $10.00 per share, for an aggregate purchase price of $14,250,000 (the PIPE). Upon closing of the PIPE immediately prior to the closing of the Business Combination, the PIPE investors also received 1.9 PIPE Warrants to purchase the Company’s Common Stock for each share of Common Stock purchased. The PIPE Warrants are each exercisable for one-half of a common share at $11.50 per

NUVVE HOLDING CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

share and have the same terms as described above for the Public Warrants. The PIPE investors received demand and piggyback registration rights in connection with the securities issued to them.

The following table is a summary of the number of shares of the Company’s Common Stock issuable upon exercise of warrants outstanding at March 31, 2022 (there were no warrants outstanding at December 31, 2021):


	Number of Warrants	Number of Warrants Exercisable	Exercise Price	Expiration Date
Public Warrants	2,875,000	2,875,000	$11.50	March 19, 2026
Private Warrants	136,250	136,250	$11.50	March 19, 2026
PIPE Warrants	1,353,750	1,353,750	$11.50	March 19, 2026
Stonepeak/Evolve Warrants - series B	2,000,000	2,000,000	$10.00	May 17, 2031
Stonepeak/Evolve Warrants - series C	1,000,000	500,000	$15.00	May 17, 2031
Stonepeak/Evolve Warrants - series D	1,000,000	500,000	$20.00	May 17, 2031
Stonepeak/Evolve Warrants - series E	1,000,000	500,000	$30.00	May 17, 2031
Stonepeak/Evolve Warrants - series F	1,000,000	500,000	$40.00	May 17, 2031
	10,365,000	8,365,000

Because the Private Warrants have dissimilar terms with respect to the Company’s redemption rights depending on the holder of the Private Warrants, the Company determined that the Private Warrants are required to be carried as a liability in the condensed consolidated balance sheet at fair value, with changes in fair value recorded in the condensed consolidated statement of operations. The Private Warrants are reflected as a liability in the condensed consolidated balance sheet as of March 31, 2022 in the amount of $433,000 and the change in the fair value of the Private Warrant for the three months ended March 31, 2022 of is reflected as a gain of $433,000, in the condensed consolidated statement of operations.

Unit Purchase Option

On February 19, 2020, Newborn sold to the underwriters of its initial public offering for $100, a unit purchase option ("UPO") to purchase up to a total of 316,250 units at $11.50 per unit (or an aggregate exercise price of $3,636,875) commencing on the date of Newborn's initial business combination, March 19, 2021, and expiring February 13, 2025. Each unit issuable upon exercise of the UPO consists of one and one-tenth of a share of the Company's common stock and one warrant to purchase one share of the Company's common stock at the exercise price of $11.50 per share. The warrant has the same terms as the Public Warrant. In no event will the Company be required to net cash settle the exercise of the UPO or the warrants underlying the UPO. The holders of the unit purchase option have demand and "piggy back" registration rights for periods of five and seven years, respectively, from the effective date of the IPO, including securities directly and indirectly issuable upon exercise of the unit purchase option. The UPO is classified within stockholders’ equity as “additional paid-in capital” in accordance with ASC 815-40, Derivatives and Hedging-Contracts in an Entity’s Own Equity, as the UPO is indexed to the Company’s common stock and meets the conditions for equity classification.

Securities Purchase Agreement

On May 17, 2021, in connection with the signing of a letter of agreement relating to the formation of a venture, Levo Mobility LLC, the Company entered into a Securities Purchase Agreement with Stonepeak and Evolve which provide them from time to time between November 13, 2021 and November 17, 2028, in their sole discretion, to purchase up to an aggregate of $250 million in shares of the Company’s common stock at a purchase price of $50.00 per share (allocated 90% to Stonepeak and 10% to Evolve). See below for details. The grant-date fair value of the Securities Purchase Agreement to purchase shares of the Company’s common stock was $12.6 million, and is recorded in the condensed consolidated balance sheet as equity in additional-paid-in capital as it is indexed to the Company’s common stock and meets the conditions for equity classification, and deferred financing costs. The carrying amount of the deferred financing costs is reduced as the commitment amount is funded, and the amount is charged to additional-paid-in capital.

In connection with the signing of the Letter Agreement, as reference above, the Company also entered into a Securities Purchase Agreement (the “SPA”) and a Registration Rights Agreement (the “RRA”) with Stonepeak and Evolve.

•Under the SPA, from time to time between November 13, 2021 and November 17, 2028, Stonepeak and Evolve may elect, in their sole discretion, to purchase up to an aggregate of $250 million in shares of the Company’s common stock at a purchase price of $50.00 per share (allocated 90% to Stonepeak and 10% to Evolve). The SPA includes customary representations and warranties and closing conditions and customary indemnification provisions. In addition, Stonepeak and Evolve may elect to purchase shares under the SPA on a cashless basis in the event of a change of control of the Company.

NUVVE HOLDING CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Note 12 – Stock Option Plan

In 2010, the Company adopted the 2010 Equity Incentive Plan (the “2010 Plan”), which provides for the grant of restricted stock awards, stock options, and other share-based awards to employees, consultants, and directors. In November 2020, the Company’s Board of Directors extended the term of the 2010 Plan to July 1, 2021. In 2021, the Company adopted the 2020 Equity Incentive Plan (the “2020 Plan”), which provides for the grant of restricted stock awards, incentive and non-statutory stock options, and other share-based awards to employees, consultants, and directors. As of March 31, 2022, there is an aggregate of 3,300,000 common shares reserved for issuance under the 2020 Plan. All options granted to date have a ten years contractual life and vesting terms of four years. In general, vested options expire if not exercised at termination of service. As of March 31, 2022, a total of 1,321,374 shares of common stock remained available for future issuance under the 2020 Plan.

Stock-based compensation expense for the three months ended March 31 are as follows


	Three Months Ended March 31,
	2022		2021
Options	$	822,106	$	262,105
Restricted stock	613,839		—
Total	$	1,435,945	$	262,105

The Company uses the Black-Scholes option pricing model to estimate the fair value of stock options. Fair value is estimated at the date of grant for employee and nonemployee options. The following assumptions were used in the Black-Scholes model to calculate the fair value of stock options granted for the three months ended March 31, 2022 for the 2010 Plan and the 2020 Plan.


	2010 Plan		2020 Plan
Expected life of options (in years) (1)	6.1		6.1
Dividend yield (2)	0	%	0	%
Risk-free interest rate (3)	2.00	%	2.00	%
Volatility (4)	54.4	%	54.4	%

__________________

(1)The expected life of options is the average of the contractual term of the options and the vesting period.

(2)No cash dividends have been declared on the Company’s common stock since the Company’s inception, and the Company currently does not anticipate declaring or paying cash dividends over the expected life of the options.

(3)The risk-free interest rate is based on the yields on U.S. Treasury debt securities with maturities approximating the estimated life of the options.

(4)Volatility is estimated by management. As the Company has been a private company for most of its existence, there is not enough historical volatility data related to the Company’s Common stock as a public entity. Therefore, this estimate is based on the average volatility of certain public company peers within the Company’s industry.

The following is a summary of the stock option activity under the 2010 Plan, as converted to the Company’s shares due to Reverse Recapitalization, for the three months ended March 31, 2022:


	Shares	Weighted- Average Exercise Price per Share($)	Weighted- Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value($)
Outstanding - December 31, 2021	1,035,035	3.21	5.90	5,688,201
Granted	—	—	—	—
Exercised	—	—	—	—
Forfeited	—	—	—	—
Expired/Cancelled	(