SEC Filing | Nuvve Holding Corp.

View:

nvve-20220630

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 June 30, 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 August 4, 2022, 22,363,540 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 June 30, 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.	33
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	43
	Item 4.	Controls and Procedures.	43

PART II—OTHER INFORMATION			44
	Item 1.	Legal Proceedings	44
	Item 1A.	Risk Factors	44
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	45
	Item 3.	Defaults Upon Senior Securities.	45
	Item 4.	Mine Safety Disclosures.	45
	Item 5.	Other Information.	45
	Item 6.	Exhibits.	45

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q and other documents incorporated herein by reference contain forward-looking statements that are based on current expectations, estimates, forecasts and projections about us, our future performance, our financial condition, our products, our business strategy, our beliefs and our management’s assumptions. In addition, we, or others on our behalf, may make forward-looking statements in press releases or written statements, or in our communications and discussions with investors and analysts in the normal course of business through meetings, webcasts, phone calls and conference calls. These forward-looking statements can be identified by the use of words like “anticipates,” “estimates,” “projects,” “expects,” “plans,” “believes,” “intends,” “will,” “could,” “may,” “assumes” and other words of similar meaning. These statements are based on management’s beliefs, assumptions, estimates and observations of future events based on information available to our management at the time the statements are made and include any statements that do not relate to any historical or current fact. These statements are not guarantees of future performance and they involve certain risks, uncertainties and assumptions that are difficult to predict. Actual outcomes and results may differ materially from what is expressed, implied or forecast by our forward-looking statements due in part to the risks, uncertainties and assumptions described in Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021, as well as those discussed elsewhere in this report and other factors described from time to time in our filings with the SEC.

Factors that could cause actual results to differ materially from those in forward-looking statements include, (i) risks related to the rollout of Nuvve's business and the timing of expected business milestones; (ii) Nuvve's dependence on widespread acceptance and adoption of electric vehicles and increased installation of charging stations; (iii) Nuvve's ability to maintain effective internal controls over financial reporting, including the remediation of identified material weaknesses in internal control over financial reporting relating to segregation of duties with respect to, and access controls to, its financial record keeping system, and Nuvve's accounting staffing levels; (iv) Nuvve's current dependence on sales of charging stations for most of its revenues; (v) overall demand for electric vehicle charging and the potential for reduced demand if governmental rebates, tax credits and other financial incentives are reduced, modified or eliminated or governmental mandates to increase the use of electric vehicles or decrease the use of vehicles powered by fossil fuels, either directly or indirectly through mandated limits on carbon emissions, are reduced, modified or eliminated; (vi) potential adverse effects on Nuvve's backlog, revenue and gross margins if customers increasingly claim clean energy credits and, as a result, they are no longer available to be claimed by Nuvve; (vii) the effects of competition on Nuvve's future business; (viii) risks related to Nuvve's dependence on its intellectual property and the risk that Nuvve's technology could have undetected defects or errors; (ix) the risk that we conduct a portion of our operations through a joint venture exposes us to risks and uncertainties, many of which are outside of our control; (x) that our joint venture with Levo Mobility LLC may fail to generate the expected financial results, and the return may be insufficient to justify our investment of effort and/or funds; (xi) changes in applicable laws or regulations; (xii) the COVID-19 pandemic and its effect directly on Nuvve and the economy generally; (xiii) risks related to disruption of management time from ongoing business operations due to our joint ventures; (xiv) risks relating to privacy and data protection laws, privacy or data breaches, or the loss of data; (xv) the possibility that Nuvve may be adversely affected by other economic, business, and/or competitive factors; and (xvi) risks related to the benefits expected from the $1.2 trillion dollar infrastructure bill passed by the U.S. House of Representatives (H.R. 3684), as well as other risks described in this Quarterly Report on Form 10-Q and other factors described from time to time in our filings with the SEC.

Given these risks and uncertainties, you should not rely on forward-looking statements as a prediction of actual results. Any or all of the forward-looking statements contained in this Quarterly Report on Form 10-Q and any other public statement made by us, including by our management, may turn out to be incorrect. We are including this cautionary note to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for forward-looking statements. We expressly disclaim any obligation to update or revise any forward-looking statements, whether as a result of new information, future events, changes in assumptions or otherwise, except as required under federal securities laws and the rules and regulations of the SEC.

PART I—FINANCIAL INFORMATION

Item 1. Interim Financial Statements.

NUVVE HOLDING CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


	June 30, 2022		December 31, 2021
Assets
Current assets
Cash	$	14,890,242	$	32,360,520
Restricted cash	480,000		380,000
Accounts receivable	1,958,656		1,886,708
Inventories	10,796,032		11,118,188

Prepaid expenses and other current assets	2,384,575		1,036,645
Total Current Assets	30,509,505		46,782,061

Property and equipment, net	600,546		356,194
Intangible assets, net	1,411,358		1,481,077
Investments	1,670,951		670,951
Right-of-use operating assets	5,195,474		3,483,042
Deferred financing costs	—		43,562,847
Financing receivables	238,624		138,161
Security deposit, long-term	3,057		3,057
Total Assets	$	39,629,515	$	96,477,390

Liabilities, Mezzanine Equity and Stockholders’ Equity

Current Liabilities
Accounts payable	$	3,327,366	$	5,738,873
Accrued expenses	2,392,820		2,874,018
Deferred revenue	781,922		719,771

Operating lease liabilities - current	455,064		41,513

Other liabilities	111,387		110,574

Total Current Liabilities	7,068,559		9,484,749

Operating lease liabilities - noncurrent	5,053,219		3,441,642
Warrants liability	182,000		866,000
Derivative liability - non-controlling redeemable preferred shares	491,012		511,948
Other long-term liabilities	15,120		18,860
Total Liabilities	12,809,910		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 issued and outstanding at June 30, 2022 and December 31, 2021; aggregate liquidation preference of $3,330,071 at June 30, 2022	3,208,360		2,885,427
Class D Incentive units, zero par value, 1,000,000 units authorized, 250,000 units issued and outstanding at June 30, 2022	140,850		—
Stockholders’ (Deficit) Equity


Preferred stock, $0.0001 par value, 1,000,000 shares authorized; zero shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively	—		—

Common stock, $0.0001 par value, 100,000,000 shares authorized; 19,709,763 and 18,861,130 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively	1,986		1,888

Additional paid-in capital	134,261,487		127,138,504
Accumulated other comprehensive income (loss)	73,448		113,446
Accumulated deficit	(107,629,843)		(47,412,470)
Nuvve Stockholders’ Equity (Deficit)	26,707,078		79,841,368
Non-controlling interests	(3,236,683)		(572,604)
Total Stockholders’ Equity (Deficit)	23,470,395		79,268,764
Total Liabilities, Mezzanine equity and Stockholders’ Equity	$	39,629,515	$	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 June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Revenue
Products and services	$	1,068,029	$	766,516	$	3,321,813	$	1,078,419
Grants	233,698		214,814		350,947		701,943
Total revenue	1,301,727		981,330		3,672,760		1,780,362
Operating expenses
Cost of product and service revenue	1,034,596		362,658		3,176,908		489,886
Selling, general, and administrative	8,136,522		5,269,791		15,762,072		9,752,531
Research and development	2,170,139		1,689,245		4,305,714		2,952,195
Total operating expenses	11,341,257		7,321,694		23,244,694		13,194,612

Operating loss	(10,039,530)		(6,340,364)		(19,571,934)		(11,414,250)
Other income (expense)
Interest income (expense)	6,945		1,984		8,403		(595,565)
Write-off of deferred financing costs	(43,562,847)		—		(43,562,847)		—

Change in fair value of warrants liability	251,000		(351,602)		684,000		70,228
Change in fair value of derivative liability	(32,536)		—		20,936		—
Other, net	22,020		503,676		(7,767)		391,561
Total other (expense) income, net	(43,315,418)		154,058		(42,857,275)		(133,776)
Loss before taxes	(53,354,948)		(6,186,306)		(62,429,209)		(11,548,026)
Income tax (benefit) expense	—		1,000		—		1,000
Net loss	$	(53,354,948)	$	(6,187,306)	$	(62,429,209)	$	(11,549,026)
Less: Net loss attributable to non-controlling interests	(2,110,903)		—		(2,211,837)		—
Net loss attributable to Nuvve Holding Corp.	$	(51,244,045)	$	(6,187,306)	$	(60,217,372)	$	(11,549,026)
Less: Preferred dividends on redeemable non-controlling interests	65,296		—		129,311		—
Less: Accretion on redeemable non-controlling interests preferred shares	161,466		—		322,932		—
Net loss attributable to Nuvve common stockholders	$	(51,470,807)	$	(6,187,306)	$	(60,669,615)	$	(11,549,026)

Net loss per share attributable to Nuvve common stockholders, basic and diluted	$	(2.70)	$	(0.33)	$	(3.20)	$	(0.79)

Weighted-average shares used in computing net loss per share attributable to Nuvve common stockholders, basic and diluted	19,064,854		18,668,009		18,965,167		14,560,862

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 June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Net loss	$	(53,354,948)	$	(6,187,306)	$	(62,429,209)	$	(11,549,026)
Other comprehensive (loss) income, net of taxes
Foreign currency translation adjustments, net of taxes	(26,314)		(20,146)		(39,998)		96,603
Total Comprehensive loss	$	(53,381,262)	$	(6,207,452)	$	(62,469,207)	$	(11,452,423)
Less: Comprehensive loss attributable to non-controlling interests	(2,110,903)		—		(2,211,837)		—
Comprehensive loss attributable to Nuvve Holding Corp.	$	(51,270,359)	$	(6,207,452)	$	(60,257,370)	$	(11,452,423)
Less: Preferred dividends on redeemable non-controlling interests	(65,296)		—		(129,311)		—
Less: Accretion on redeemable non-controlling interests preferred shares	(161,466)		—		(322,932)		—
Comprehensive loss attributable to Nuvve common stockholders	$	(51,043,597)	$	(6,207,452)	$	(59,805,127)	$	(11,452,423)

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
Exercise of stock options and vesting of restricted stock options		360,018		50		173,575			—		—		—		173,625
Stock-based compensation		—		—		1,640,055			—		—		—		1,640,055
Proceeds from forward option put exercise		134,499		13		1,994,059			—		—		—		1,994,072
Proceeds from common stock offering, net of offering costs		323,746		32		1,859,653			—		—		—		1,859,685
Currency translation adjustment		—		—		—			(26,314)		—		—		(26,314)
Preferred dividends - non-controlling interest		—		—		—			—		—		(65,296)		(65,296)
Accretion on redeemable non-controlling interests preferred shares		—		—		—			—		—		(161,466)		(161,466)
Net loss		—		—		—			—		(51,244,045)		(2,110,903)		(53,354,948)
Balances June 30, 2022		19,709,763		$	1,986	$	134,261,487		$	73,448	$	(107,629,843)	$	(3,236,683)	$	23,470,395

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
Additional merger recapitalization costs	—	—			—	—			(265,736)		—		—			(265,736)
Buyback of shares related to exercise of put option	—	—			(134,500)	(13)			13		—		—			—
Issuance of common shares	—	—			—	—			—		—		—			—
Issuance of warranties to Stonepeak and Evolve	—	—			—	—			30,234,000		—		—			30,234,000
Issuance of options to purchase shares of common stock to Stonepeak and Evolve	—	—			—	—			12,584,000		—		—			12,584,000
Stock-based compensation	—	—			—	—			1,090,603		—		—			1,090,603
Currency translation adjustment	—	—			—	—			—		(20,146)		—			(20,146)
Net loss	—	—			—	—			—		—		(6,187,306)			(6,187,306)

Balances June 30, 2021	—	$	—		18,626,624	$	1,863		$	126,816,249	$	18,762	$	(32,006,849)		$	94,830,025

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)


	Six Months Ended June 30,
	2022		2021
Operating activities
Net loss	$	(62,429,209)	$	(11,549,026)
Adjustments to reconcile to net loss to net cash used in operating activities
Depreciation and amortization	137,755		81,874
Share-based compensation	3,357,859		1,352,708
Write-off of deferred financing costs	43,562,847		—
Beneficial conversion feature on convertible debenture	—		427,796
Accretion of discount on convertible debenture	—		116,147
Change in fair value of warrants liability	(684,000)		(70,228)
Change in fair value of derivative liability	(20,936)		—
Loss on disposal of asset	—		1,381
Gain on extinguishment of PPP Loan	—		(492,100)
Noncash lease expense	283,251		(1,003)
Change in operating assets and liabilities
Accounts receivable	(74,278)		(139,140)
Inventory	322,156		(3,164,653)
Prepaid expenses and other assets	(1,462,221)		(2,209,159)
Accounts payable	(2,409,448)		330,890
Accrued expenses	(684,517)		1,595,165
Deferred revenue	79,576		305,922
Net cash used in operating activities	(20,021,165)		(13,413,426)
Investing activities
Proceeds from sale of property and equipment	—		7,969
Purchase of property and equipment	(317,225)		—
Investments	(1,000,000)		—

Net cash (used) provided in investing activities	(1,317,225)		7,969
Financing activities


Proceeds from Newborn Escrow Account	—		58,184,461
Redemption of Newborn shares	—		(18,629)
Issuance costs related to reverse recapitalization and PIPE offering	—		(3,970,657)
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
Purchase of stock from investor	—		(2,000,000)
Payment of financing costs	—		(531,527)
Proceeds from forward option put exercise	1,994,073		—
Proceeds from common stock offering, net of offering costs	1,859,685		—
Payment of finance lease Obligations	(4,425)		(1,989)

Proceeds from exercise of stock options	173,575		—




Net cash (used) provided in financing activities	4,022,908		59,474,365
Effect of exchange rate on cash	(54,796)		98,193
Net increase (decrease) in cash and restricted cash	(17,370,278)		46,167,101
Cash and restricted cash at beginning of year	32,740,520		2,275,895
Cash and restricted cash at end of period	$	15,370,242	$	48,442,996











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)
	Six Months Ended June 30,
	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

Forgiveness of PPP Loan	$	—	$	492,100
Issuance of Stonepeak and Evolve warrants	$	—	$	27,640,000
Issuance of Stonepeak and Evolve options	$	—	$	12,584,000
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 S.A.S. ('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 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 as of June 30, 2022. 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 supports 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 initially focuses 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 six months ended June 30, 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 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 $107.6 million as of June 30, 2022. Nuvve incurred net losses of approximately $62.4 million as of the six months ended June 30, 2022, and $27.2 million and $4.9 million for the years ended December 31, 2021, and 2020, respectively. As of June 30, 2022, Nuvve had a cash balance, working capital, and stockholders’ equity of $14.9 million, $23.4 million and $23.5 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 Grid Integrated Vehicle ("GIVe") platform and the achievement of a level of revenues adequate to support its cost structure.

On May 5, 2022, the Company entered into an at-the-market offering agreement in which the Company from time to time during the term of the sales agreement, offer and sell shares of its common stock having an aggregate offering price up to a total of $25.0 million in gross proceeds. Shares of common stock sold under the sales agreement are offered and sold pursuant to the Company's shelf registration statement. During the six months ended June 30, 2022, the Company sold 323,746 shares of common stock pursuant to the sales agreement at an average price of $6.12 per share for aggregate net proceeds of approximately $1.9 million. Additionally, during the month of July 2022, the Company sold 469,136 shares of common stock pursuant to the sales agreement at an average price of $4.17 per share for aggregate net proceeds of approximately $1.9 million.

In July 2022, the Company had a direct equity offering of its common stock. See Note 19 for details. The aggregate gross proceeds to the Company from the offering were approximately $14.0 million and net proceeds were $13.1 million.

The Company expects its cash and cash equivalents as of August 11, 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.

NUVVE HOLDING CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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 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 September 30, 2021.

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 June 30, 2022:


	June 30, 2022
Assets

Cash	$	28,068










Deferred financing costs	—

Total Assets	$	28,068

Liabilities and Mezzanine Equity


Accrued expenses	$	212,071






Derivative liability - non-controlling redeemable preferred shares	491,012

Total Liabilities	$	703,083

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.

NUVVE HOLDING CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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 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.

NUVVE HOLDING CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Concentrations of Credit Risk

At June 30, 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 and six months ended June 30, 2022 three and two customers accounted for 54.9% and 58.8% of revenue, respectively. For the three and six months ended June 30, 2021 two and three customers in aggregate accounted for 48.6% and 56.4% of revenue, respectively.

During the three and six months ended June 30, 2022, the Company's top five customers accounted for approximately 71.8% and 70.1%, respectively, of the Company’s total revenue. During the three and six months ended June 30, 2021, the Company's top five customers accounted for approximately 68.3% and 71.0%, respectively, of the Company’s total revenue.

At June 30, 2022, two customers in aggregate accounted for 37.1% of accounts receivable. At December 31, 2021, two customers in aggregate accounted for 32.2% of accounts receivable.

Approximately 58.5% and 56.0% of the Company’s trade accounts receivable balance was with five customers at June 30, 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.

Revenue Recognition

Bill-and-hold arrangements - The Company occasionally enter a bill and hold arrangements in which some customers request that billed products that are ready for delivery be held at our warehouse facility for them until shipment at a later date. In this instance, revenue is recognized when; 1) the risks of ownership, including title, have passed to the customer, 2) the product must be identified separately as belonging to the customer, 3) the product currently must be ready for physical transfer to the customer, and 4) the Company does not have the ability to use the product or to direct it to another customer.

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.

The Company recorded an impairment charge of $43.6 million during the six months ended June 30, 2022. The impairment charge was driven by a write-off of deferred financing costs associated with the carrying value of warrants and stock options granted to Stonepeak and Evolve in May 2021 in return for their capital commitment to fund up to $750 million in V2Genabled EV fleet deployments of school buses through Levo. The Company impaired the deferred financing costs during the six months ended June 30, 2022 primarily because it has not entered into fleet as a service customer contracts requiring preferred capital commitments from Stonepeak and Levo in excess of $43.6 million within one year of the deferred financing costs being capitalized. The impairment charge is non-cash and does not impact the existing capital commitment we have from Stonepeak and Evolve or the pursuit of customer deployments funded by this capital commitment. Note 19 of the Company's 2021 Form 10-K further describes the terms of the capital commitment with Stonepeak and Evolve.

Investments in Equity Securities Without Readily Determinable Fair Values

Investments in equity securities of nonpublic entities without readily determinable fair values are carried at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The Company reviews its equity securities without readily determinable fair values on a regular basis to determine if the investment is impaired. For purposes of this assessment, the Company considers the investee’s cash position, earnings and revenue outlook, liquidity, and management ownership, among other factors, in its review. If management’s assessment indicates that an impairment exists, the Company estimates the fair value of the equity investment and recognizes in current earnings an impairment loss that is equal to the difference between the fair value of the equity investment and its carrying amount.

NUVVE HOLDING CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

In June 2022, the Company invested $1.0 million in Switch EV Ltd ("Switch"), a nonpublic entity incorporated and registered in the United Kingdom for a future equity ownership. Since Switch is a nonpublic entity, there is no readily determinable fair value. As of June 30, 2022, the Company’s investment in Switch was accounted for as an investment in equity securities without a readily determinable fair value subject to impairment. The Company did not recognize an impairment loss on its investment during the quarter ended June 30, 2022.

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 and six months ended June 30:


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Revenue recognized over time:
Services	$	73,522	$	363,366	$	268,172	$	530,611
Grants	233,698		214,814		350,947		701,943
Products