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PART
III
ITEM
10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Governance
of Our Company
We
seek to maintain high standards of business conduct and corporate governance, which we believe are fundamental to the overall success
of our business, serving our Stockholders well and maintaining our integrity in the marketplace. Our corporate governance guidelines
and Code of Conduct and Ethics, together with our Second Amended and Restated Certificate of Incorporation, Bylaws and the charters for
each of our Board committees, form the basis for our corporate governance framework. We also are subject to certain provisions of the
Sarbanes-Oxley Act and the rules and regulations of the SEC. The full text of the Code of Conduct and Ethics is available on our website
at https://www.greenwavetechnologysolutions.com/code-of-conduct and is also filed as an exhibit to our Annual Report on Form 10-K for
the year ended December 31, 2014 as filed with the SEC on April 1, 2015.
As
described below, our Board has established three standing committees to assist it in fulfilling its responsibilities to the Company and
its stockholders: The Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee.
Our
Board of Directors
As
of April 19, 2022, our Board consists of four members. The number of directors on our Board can be evaluated and amended by action of
our Board.
Our
Board has decided that it would judge the independence of its directors by the heightened standards established by the Nasdaq Stock Market,
despite the Company not being subject to these standards at this time. Accordingly, the Board has determined that our three non-employee
directors, Cheryl Lanthorn, J. Bryan Plumlee and John Wood each meet the independence standards established by the Nasdaq Stock Market
and the applicable independence rules and regulations of the SEC, including the rules relating to the independence of the members of
our Audit Committee and Compensation Committee. Our Board considers a director to be independent when the director is not an officer
or employee of the Company or its subsidiaries, does not have any relationship which would, or could reasonably appear to, materially
interfere with the independent judgment of such director, and the director otherwise meets the independence requirements under the listing
standards of the Nasdaq Stock Market and the rules and regulations of the SEC.
Our
Board believes its members collectively have the experience, qualifications, attributes and skills to effectively oversee the management
of our Company, including a high degree of personal and professional integrity, an ability to exercise sound business judgment on a broad
range of issues, sufficient experience and background to resolve the issues facing our Company, a willingness to devote the necessary
time to their Board and committee duties, a commitment to representing the best interests of the Company and our stockholders and a dedication
to enhancing stockholder value.
Risk
Oversight. Our Board oversees the management of risks inherent in the operation of our business and the implementation of our business
strategies. Our Board performs this oversight role by using several different levels of review. In connection with its reviews of the
operations and corporate functions of our Company, our Board addresses the primary risks associated with those operations and corporate
functions. In addition, our Board reviews the risks associated with our Company’s business strategies periodically throughout the
year as part of its consideration of undertaking any such business strategies. Each of our Board committees also coordinates oversight
of the management of our risk that falls within the committee’s areas of responsibility. In performing this function, each committee
has full access to management, as well as the ability to engage advisors. The Board is also provided with updates by the Chief Executive
Officer and other executive officers of the Company on a regular basis.
Stockholder
Communications. Although we do not have a formal policy regarding communications with the Board, Stockholders may communicate with
the Board by writing to us at 277 Suburban Drive, Suffolk, VA 23434, Attention: Chairman. Stockholders who would like their submission
directed to a member of the Board may so specify, and the communication will be forwarded, as appropriate. Please note that the foregoing
communication procedure does not apply to (i) stockholder proposals pursuant to Exchange Act Rule 14a-8 and communications made in connection
with such proposals or (ii) service of process or any other notice in a legal proceeding.
Board
and Committee Meetings
During
the fiscal year ended December 31, 2021 and 2020, our Board held no meetings and operated solely by unanimous written consent. For the
fiscal year ended December 31, 2021, our Board was composed of one member from January to June 2021, two members from June to November
2021, and one member in December 2021, all of whom attended every meeting of our Board. For the fiscal year ended December 31, 2020,
our Board was composed of a sole member who attended every meeting of our Board. Our Audit Committee, Compensation Committee, Nominating
and Corporate Governance committee did not have any members and did not meet during the fiscal years ended December 31, 2021 and 2020.
The Company held its 2021 Shareholder’s Meeting on September 3, 2021.
Board
Committees
On
December 9, 2015, our Board designated the following three committees of the Board: the Audit Committee, the Compensation Committee,
and the Nominating and Corporate Governance Committee. For the year ended December 31, 2021, the Company’s designated committees
did not have any members and the Board acted in place of such committees.
Audit
Committee. Effective as of April 18, 2022 the Board appointed each of Cheryl Lanthorn and John Wood as a member of the
Audit Committee. Effective as of April 19, 2022 the Board appointed J. Bryan Plumlee as a member of the Audit Committee. J. Bryan Plumlee
is the Chairman of the Audit Committee. The Audit Committee is responsible for, among other things, overseeing the financial reporting
and audit process and evaluating our internal controls over financial reporting. The Board has determined that J. Bryan Plumlee is an
“audit committee financial expert” serving on its Audit Committee. The Board has determined that each member of the Audit
Committee is “independent,” as that term is defined by applicable SEC rules. In addition, the Board has determined that each
member of the Audit Committee is “independent,” as that term is defined by the rules of the Nasdaq Stock Market. A copy of
the Audit Committee Charter is available on our website at https://www.greenwavetechnologysolutions.com/audit-committee-charter.
Compensation
Committee. Effective as of April 18, 2022 the Board appointed each of Cheryl Lanthorn and John Wood as a member of the
Compensation Committee. Effective as of April 19, 2022 the Board appointed J. Bryan Plumlee as a member of the Compensation Committee.
J. Bryan Plumlee is the Chairman of the Compensation Committee. The Compensation Committee is responsible for, among other things, establishing
and overseeing the Company’s executive and equity compensation programs, establishing performance goals and objectives, and evaluating
performance against such goals and objectives. The Board has determined that each member of the Compensation Committee is “independent,”
as that term is defined by applicable SEC rules. In addition, the Board has determined that each member of the Compensation Committee
is “independent,” as that term is defined by the rules of the Nasdaq Stock Market. A copy of the Compensation Committee Charter
is available on our website at https://www.greenwavetechnologysolutions.com/compensation-committee-charter.
Nominating
and Corporate Governance Committee. Effective as of April 18, 2022 the Board appointed each of Cheryl Lanthorn and John
Wood as a member of the Nomination and Corporate Governance Committee. Effective as of April 19, 2022 the Board appointed J. Bryan Plumlee
as a member of the Nomination and Corporate Governance Committee. J. Bryan Plumlee is the Chairman of the Nomination and Corporate Governance
Committee. The Nominating and Corporate Governance Committee is responsible for, among other things, identifying and recommending candidates
to fill vacancies occurring between annual stockholder meetings and reviewing the Company’s policies and programs relating to matters
of corporate citizenship, including public issues of significance to the Company and its stockholders. The Board has determined that
each member of the Nominating and Corporate Governance Committee is “independent,” as that term is defined by applicable
SEC rules. In addition, the Board has determined that each member of the Nominating and Corporate Governance Committee is “independent,”
as that term is defined by the rules of the Nasdaq Stock Market. A copy of the Nominating and Corporate Governance Committee Charter
is available on our website at https://www.greenwavetechnologysolutions.com/ncg-charter.
Risk
Oversight
The
Board is primarily responsible for overseeing our risk management processes. The Board receives and reviews periodic reports from management,
auditors, legal counsel and others, as appropriate, regarding the Company’s assessment of risks. The Board focuses on the most
significant risks facing the Company and our general risk management strategy, and also ensures that the risks we undertake are consistent
with the Board’s risk parameters. While the Board oversees the risk management process, our management is responsible for day-to-day
risk management and, if management identifies new or additional significant risks, it brings such risks to the attention of the Board.
Board
Leadership Structure
Danny
Meeks is the Chairman of our Board of Directors and Chief Executive Officer of the Company. The Chairman of the Board presides at all
meetings of the Board, unless such position is vacant, in which case, the Chief Executive Officer of the Company would preside.
Policy
on Hedging the Economic Risks of Equity Ownership.
The
Company has no policy regarding hedging the economic risks of equity ownership for the executive team or directors of the Company and
the Company does not engage in this practice.
Changes
to security holder director nomination procedures
The
Company has not adopted procedures for considering director candidates submitted by stockholders under Item 407(c)(2)(iv), Regulation
S-K.
DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS
Directors
and Executive Officers
The
name and age of our Directors and Executive Officers are set forth below. All Directors are elected annually by the stockholders to serve
until the next annual meeting of the stockholders and until their successors are duly elected and qualified. The officers are elected
by our Board.
Name |
|
Age |
|
Executive
Position |
Danny
Meeks |
|
47 |
|
Chief
Executive Officer, Chairman and Director |
Howard
Jordan |
|
66 |
|
Chief
Financial Officer |
Cheryl
Lanthorn |
|
51 |
|
Director |
J.
Bryan Plumlee |
|
55 |
|
Director |
John
Wood |
|
48 |
|
Director |
Mr.
Danny Meeks, Chief Executive Officer and Chairman – Mr. Meeks is the Chief Executive Officer of the Company, a position
he has held since September 30, 2021. He has served as a director and Chairman of the Board of Directors since June 2021. He has served
as interim Chief Financial Officer since November 30, 2021. He was the sole owner and President of Empire Services, Inc., a metal recycling
company he founded in 2002, until its acquisition by the Company in September 2021. Additionally, Mr. Meeks has been serving as the President
of DWM Properties, LLC, his real estate holding company, since 2002 and as the President of Select Recycling and Waste Services, Inc.,
a waste disposal and recycling company, from October 2016 to present. Mr. Meeks graduated from Manor High School in 1993. Mr. Meeks is
well-suited to serve on our Board due to his significant business and management experience and deep knowledge of growth and commercialization
strategies. Mr. Meeks joined the Company’s Board to foster revenue-generating capabilities of the Company.
Mr.
Howard Jordan, Chief Financial Officer – Mr. Jordan is the Chief Financial Officer of the Company, a position he has held since
April 2022. Since May 2016, Mr. Jordan has owned CFO Partners, Inc., a financial consulting company. From July 2016 to October 2020,
Mr. Jordan served as controller for Roof Services, a commercial roofing contractor which was acquired by Tecta America in December 2018,
where he was responsible for all accounting activities at a subsidiary with sales of approximately $35 million and 150 employees. From
March 2013 to May 2016, Mr. Jordan served as Chief Financial Officer for NSC Technologies, Inc., a staffing company where he was responsible
for all accounting and finance activities which he helped grow its annual revenues from approximately $20 million to approximately $100
million. NSC conducted business in 23 states, principally along the East and West Coasts and Gulf states and provided painters, welders,
pipefitters, etc., to public and private shipyards in those regions. Mr. Jordan graduated from the University of Richmond, where he holds
a Bachelor of Science in Business Administration with a major in Accounting from Robins School of Business.
Mr.
J. Bryan Plumlee, Director – Mr. Plumlee has served as a Director of the Company since April 2022 and is a Co-Managing Shareholder
of Poole Brooke Plumlee PC, where he serves as Chairman of the firm’s Litigation Department and manages its Court Collection Department.
His practice focuses on civil litigation with an emphasis on business, land use, environmental law and product liability, including aviation
litigation. As part of a vibrant land use practice, Mr. Plumlee heads a team within the firm specializing in environmental remediation
projects. Mr. Plumlee has been an attorney with Poole Brooke Plumlee PC (formerly Huff Poole Mahoney, PC) since August 1999.
Mr.
Plumlee’s clients include multiple regional businesses, professionals, insurance companies as well as municipalities. Mr. Plumlee
has been repeatedly elected by his peers to be included in Virginia Business magazine’s Legal Elite and Virginia Super Lawyers
in the categories of Civil Litigation Defense and Environmental Litigation. Mr. Plumlee has an AV Preeminent® rating from Martindale-Hubbell.
Mrs.
Cheryl Lanthorn, Director – Mrs. Lanthorn has served as a Director of the Company since April 2022. Mrs. Lanthorn began her
career as a Personal Administrator at Welton, Duke & Hawks before rising to an Accounting Administrator due to her work-ethic, extensive
accounting knowledge, and attention to detail. For the next 14 years, Mrs. Lanthorn was a Software Trainer and Content Developer for
Applied Systems, Inc., where she created webinars and instructional documentation to teach employees how to best utilize TAM, Vision,
Epic, and other scalable software programs. Since December 2015, Mrs. Lanthorn has served as an Account Executive at Brown & Brown
Insurance, where she manages one of the company’s largest books of business, manages employees and their books, trains new employees,
and performs various other administrative duties.
Mr.
John Wood, Director – Mr. Wood has served as Director of the Company since April 2022. Since 1998, Mr. Wood has served as a
licensed real estate agent in Virginia. Since 2010, He has served as the Principal Broker of John E. Wood Realty, Inc., based in Chesapeake,
Virginia, where through his extensive relationships with business and community leaders, he has become one of the region’s most
active real Residential, Commercial and Property Management Brokers. He is also the Virginia Principal Broker for two other companies,
which rank in the top 10 in the nation. In July 2018, he launched American Contracting Services, LLC, which has successfully completed
hundreds of Commercial and Residential construction projects.
Family
Relationships
There
are no family relationships among our directors and executive officers.
Involvement
in Legal Proceedings
We
are not aware of any of our directors or officers being involved in any legal proceedings in the past ten years relating to any matters
in bankruptcy, insolvency, criminal proceedings (other than traffic and other minor offenses) or being subject to any of the items set
forth under Item 401(f) of Regulation S-K.
ITEM
11. EXECUTIVE COMPENSATION
Named
Executive Officers
Our
named executive officers for the year ended December 31, 2021 were Danny Meeks, our Chief Executive Officer, and Isaac Dietrich, our
former Chief Executive Officer.
Summary
Compensation Table
The
following table presents the compensation awarded to, earned by or paid to our named executive officers for the years ended December
31, 2021 and December 31, 2020.
Name and Principal Position | |
Year | | |
Salary ($) | | |
Bonus ($) | | |
Stock awards ($) (1) | | |
Option awards ($) (1) | | |
Nonequity incentive plan compensation ($) | | |
Nonqualified deferred compensation earnings
($) | | |
All other compensation ($) (1) | | |
Total
($) | |
Danny Meeks | |
| 2021 | | |
| 125,000 | | |
| 250,000 | | |
| 166,855 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 541,855 | |
Chief Executive Officer | |
| 2020 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
Isaac Dietrich | |
| 2021 | | |
| 132,917 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 132,917 | |
Former Chief Executive Officer | |
| 2020 | | |
| 145,000 | | |
| 38,330 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 183,330 | |
(1) |
These
amounts are the aggregate fair value of the equity compensation incurred by the Company for payments to executives during the fiscal
year. The aggregate fair value is computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting
Standards Codification (“ASC”) Topic 718. The fair market value was calculated using the Black-Scholes options pricing
model. |
Outstanding
Equity Awards at December 31, 2021
There
were no outstanding equity awards held by our named executive officer as of December 31, 2021.
Narrative
Disclosure to the Summary Compensation Table
Danny
Meeks
On
September 30, 2021, the Company entered into an employment agreement with Danny Meeks pursuant to which Mr. Meeks serves as the Company’s
Chief Executive Officer. Pursuant to the terms of the employment agreement, Mr. Meeks shall receive an annual base salary of $500,000.
In addition, Mr. Meeks shall be eligible to receive an annual bonus and shall be eligible to receive such awards under the Company’s
incentive plans as determined by the Company’s Compensation Committee. Mr. Meeks may be terminated by the Company or may voluntarily
resign, at any time, with or without cause. Either the Company or Mr. Meeks may terminate Mr. Meeks’ employment upon two weeks
prior written notice.
Until
October 1, 2026, for every $1 million in annual revenue Empire Services, Inc., a Virginia corporation and wholly-owned subsidiary of
the Company, generates over $20 million, Mr. Meeks shall be entitled to receive either 83,334 shares of the Company’s common
stock or $50,000 in cash, at the discretion of Mr. Meeks.
Upon
termination except by death (the “Termination Date”), the Company shall pay Mr. Meeks (i) any accrued but unpaid compensation,
(ii) a pro-rata portion of his annual bonus calculated as of the Termination Date and (iii) reimbursement of expenses incurred on or
prior to the Termination Date. In addition, Mr. Meeks may elect to receive Consolidated Omnibus Budget Reconciliation Act of 1985 benefits
for up to twelve months from the Termination Date. Upon termination of Mr. Meeks’ employment for death, the Company shall pay Mr.
Meeks (i) any accrued but unpaid compensation and (ii) reimbursement of expenses incurred on or prior to such date. Mr. Meeks is also
entitled to participate in any and all benefit plans such as health, dental and life insurance, from time to time, in effect for senior
executives, along with vacation, sick and holiday pay in accordance with the Company’s policies established and in effect from
time to time. In the fiscal years ended December 31, 2021 and December 31, 2020, Mr. Meeks received $250,000 and $0 in bonuses, respectively.
In the fiscal years ended December 31, 2021 and December 31, 2020, Mr. Meeks received stock grants with a fair market value of $166,855
and $0, respectively. Mr. Meeks did not receive any compensation related to his position as a director.
Isaac
Dietrich
On
December 12, 2017, the Company entered into an employment agreement with Isaac Dietrich pursuant to which Mr. Dietrich serves as the
Company’s Chief Executive Officer. Pursuant to the terms of the employment agreement, Mr. Dietrich shall receive an annual base
salary of $145,000. In addition, Mr. Dietrich shall be eligible to receive an annual bonus and shall be eligible to receive such awards
under the Company’s incentive plans as determined by the Company’s Compensation Committee. Mr. Dietrich may be terminated
by the Company or may voluntarily resign, at any time, with or without cause. Either the Company or Mr. Dietrich may terminate Mr. Dietrich’s
employment upon two weeks prior written notice.
Upon
termination except by death (the “Termination Date”), the Company shall pay Mr. Dietrich (i) any accrued but unpaid compensation,
(ii) a pro-rata portion of his annual bonus calculated as of the Termination Date and (iii) reimbursement of expenses incurred on or
prior to the Termination Date. In addition, Mr. Dietrich may elect to receive Consolidated Omnibus Budget Reconciliation Act of 1985
benefits for up to twelve months from the Termination Date. Upon termination of Mr. Dietrich’s employment for death, the Company
shall pay Mr. Dietrich (i) any accrued but unpaid compensation and (ii) reimbursement of expenses incurred on or prior to such date.
Mr. Dietrich is also entitled to participate in any and all benefit plans such as health, dental and life insurance, from time to time,
in effect for senior executives, along with vacation, sick and holiday pay in accordance with the Company’s policies established
and in effect from time to time. In the fiscal years ended December 31, 2021 and December 31, 2020, Mr. Dietrich received $0 and $38,330
in bonuses, respectively. Mr. Dietrich resigned as an officer and director of the Company on November 30, 2021.
At
no time during the periods listed in the above tables, with respect to any named executive officers, was there:
|
● |
any
outstanding option or other equity-based award re-priced or otherwise materially modified (such as by extension of exercise periods,
the change of vesting or forfeiture conditions, the change or elimination of applicable performance criteria, or the change of the
bases upon which returns are determined); |
|
|
|
|
● |
any
waiver or modification of any specified performance target, goal or condition to payout with respect to any amount included in non-stock
incentive plan compensation or payouts; |
|
|
|
|
● |
any
non-equity incentive plan award made to a named executive officer; |
|
|
|
|
● |
any
nonqualified deferred compensation plans including nonqualified defined contribution plans; or |
|
|
|
|
● |
any
payment for any item to be included under the “All Other Compensation” column in the Summary Compensation Table. |
Director
Compensation
Our
directors do not receive any additional compensation for their service as directors. Commencing upon
the Company’s stock being listed on a national stock exchange, Mr. Plumlee will be
compensated $7,500 quarterly, and Mr. Wood and Mrs. Lanthorn, $6,250 each, quarterly.
Indemnification
of Officers and Directors
Our
Second Amended and Restated Certificate of Incorporation provides that we shall indemnify our officers and directors to the fullest extent
permitted by applicable law against all liability and loss suffered and expenses (including attorneys’ fees) incurred in connection
with actions or proceedings brought against them by reason of their serving or having served as officers, directors or in other capacities.
We shall be required to indemnify a director or officer in connection with an action or proceeding commenced by such director or officer
only if the commencement of such action or proceeding by the director or officer was authorized in advance by the Board of Directors.
ITEM
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
Our
Equity Incentive Plans
Our
Stockholders approved our 2014 Equity Incentive Plan (“2014 Plan”) in June 2014, our 2015 Equity Incentive Plan (the “2015
Plan”) in December 2015, our 2016 Equity Incentive Plan (“2016 Plan”) in October 2016, our 2017 Equity Incentive Plan
(“2017 Plan”) in December 2016, our 2018 Equity Incentive Plan (“2018 Plan”) in June 2018, and our 2021 Equity
Incentive Plan (“2021 Plan” and together with the 2014 Plan, 2015 Plan, 2016 Plan, 2017 Plan, and 2018 Plan the “Prior
Plans”) in September 2021. The Prior Plans are identical, except for the number of shares of Common Stock reserved for issuance
under each.
The
Prior Plans provide for the grant of incentive stock options, nonstatutory stock options, stock bonus awards, restricted stock awards,
performance stock awards and other forms of stock compensation to our employees, including officers, consultants and directors. Our Prior
Plans also provide that the grant of performance stock awards may be paid out in cash as determined by the Committee (as defined herein).
Plan
Details
The
following table and information below sets forth information as of December 31, 2021 with respect to our Plans:
| |
Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | | |
Weighted- average exercise price of outstanding options, warrants and rights (b) | | |
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a) (c) | |
Equity compensation plans approved by security holders | |
| 92,166 | | |
$ | 148.11 | | |
| 167,300 | |
Equity compensation plans not approved by security holders | |
| — | | |
| — | | |
| — | |
Total | |
| 92,166 | | |
$ | 148.11 | | |
| 167,300 | |
Summary
of the Prior Plans
Authorized
Shares
No
shares of our Common Stock are reserved for issuance pursuant to the 2014 Plan, 2015 Plan, the 2016 Plan, the 2017 Plan, the 2018 Plan,
or the 2021 Plan. There are currently 633 shares of our Common Stock available for issuance pursuant to the 2018 Plan and 166,667 shares
of our Common Stock available for issuance pursuant to the 2021 Plan. Shares of Common Stock issued under our Prior Plans may be authorized
but unissued or reacquired shares of our Common Stock. Shares of Common Stock subject to stock awards granted under our Prior Plans that
expire or terminate without being exercised in full, or that are paid out in cash rather than in shares of Common Stock, will not reduce
the number of shares of Common Stock available for issuance under our Prior Plans. Additionally, shares of Common Stock issued pursuant
to stock awards under our Prior Plans that we repurchase or that are forfeited, as well as shares of Common Stock reacquired by us as
consideration for the exercise or purchase price of a stock award, will become available for future grant under our Prior Plans.
Administration
Our
Board, or a duly authorized committee thereof (collectively, the “Committee”), has the authority to administer our Prior
Plans. Our Board may also delegate to one or more of our officers the authority to designate employees other than Directors and officers
to receive specified stock, which, in respect to those awards, said officer or officers shall then have all authority that the Committee
would have.
Subject
to the terms of our Prior Plans, the Committee has the authority to determine the terms of awards, including recipients, the exercise
price or strike price of stock awards, if any, the number of shares of Common Stock subject to each stock award, the fair market value
of a share of our Common Stock, the vesting schedule applicable to the awards, together with any vesting acceleration, the form of consideration,
if any, payable upon exercise or settlement of the stock award and the terms and conditions of the award agreements for use under the
Prior Plans. The Committee has the power to modify outstanding awards under the Prior Plans, subject to the terms of the Prior Plans
and applicable law. Subject to the terms of our Prior Plans, the Committee has the authority to reprice any outstanding option or stock
appreciation right, cancel and re-grant any outstanding option or stock appreciation right in exchange for new stock awards, cash or
other consideration, or take any other action that is treated as a repricing under generally accepted accounting principles, with the
consent of any adversely affected participant.
Stock
Options
Stock
options may be granted under the Prior Plans. The exercise price of options granted under our Prior Plans must at least be equal to the
fair market value of our Common Stock on the date of grant. The term of an ISO may not exceed 10 years, except that with respect to any
participant who owns more than 10% of the voting power of all classes of our outstanding stock, the term must not exceed 5 years and
the exercise price must equal at least 110% of the fair market value on the grant date. The Committee will determine the methods of payment
of the exercise price of an option, which may include cash, shares of Common Stock or other property acceptable to the Committee, as
well as other types of consideration permitted by applicable law. No single participant may receive more than 25% of the total options
awarded in any single year. Subject to the provisions of our Prior Plans, the Committee determines the other terms of options.
Performance
Shares
Performance
shares may be granted under our Prior Plans. Performance shares are awards that will result in a payment to a participant only if performance
goals established by the administrator are achieved or the awards otherwise vest. The Committee will establish organizational or individual
performance goals or other vesting criteria in its discretion, which, depending on the extent to which they are met, will determine the
number and/or the value of performance shares to be paid out to participants. After the grant of a performance share, the Committee,
in its sole discretion, may reduce or waive any performance criteria or other vesting provisions for such performance shares. The Committee,
in its sole discretion, may pay earned performance units or performance shares in the form of cash, in shares of Common Stock or in some
combination thereof, per the terms of the agreement approved by the Committee and delivered to the participant. Such agreement will state
all terms and condition of the agreement.
Restricted
Stock
The
terms and conditions of any restricted stock awards granted to a participant will be set forth in an award agreement and, subject to
the provisions in the Prior Plans, will be determined by the Committee. Under a restricted stock award, we issue shares of our Common
Stock to the recipient of the award, subject to vesting conditions and transfer restrictions that lapse over time or upon achievement
of performance conditions. The Committee will determine the vesting schedule and performance objectives, if any, applicable to each restricted
stock award. Unless the Committee determines otherwise, the recipient may vote and receive dividends on shares of restricted stock issued
under our Prior Plans.
Other
Share-Based Awards and Cash Awards
The
Committee may make other forms of equity-based awards under our Prior Plans, including, for example, deferred shares, stock bonus awards
and dividend equivalent awards. In addition, our Prior Plans authorizes us to make annual and other cash incentive awards based on achieving
performance goals that are pre-established by our compensation committee.
Merger,
Consolidation or Asset Sale
If
the Company is merged or consolidated with another entity or sells or otherwise disposes of substantially all of its assets to another
company while awards or options remain outstanding under the Prior Plans, unless provisions are made in connection with such transaction
for the continuance of the Prior Plans and/or the assumption or substitution of such awards or options with new options or stock awards
covering the stock of the successor company, or parent or subsidiary thereof, with appropriate adjustments as to the number and kind
of shares and prices, then all outstanding options and stock awards which have not been continued, assumed or for which a substituted
award has not been granted shall, whether or not vested or then exercisable, unless otherwise specified in the relevant agreements, terminate
immediately as of the effective date of any such merger, consolidation or sale.
Change
in Capitalization
If
the Company shall effect a subdivision or consolidation of shares of Common Stock or other capital readjustment, the payment of a stock
dividend, or other increase or reduction of the number of shares of Common Stock outstanding, without receiving consideration therefore
in money, services or property, then awards amounts, type, limitations, and other relevant consideration shall be appropriately and proportionately
adjusted. The Committee shall make such adjustments, and its determinations shall be final, binding and conclusive.
Prior
Plan Amendment or Termination
Our
Board has the authority to amend, suspend, or terminate our Prior Plans, provided that such action does not materially impair the existing
rights of any participant without such participant’s written consent. Each of the Prior Plans will terminate ten years after the
earlier of (i) the date that each such Prior Plan is adopted by the Board, or (ii) the date that each such Prior Plan is approved by
the Stockholders, except that awards that are granted under the applicable Prior Plan prior to its termination will continue to be administered
under the terms of the that Prior Plan until the awards terminate, expire or are exercised.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth certain information regarding the beneficial ownership of our Common Stock, and Series Z Preferred Stock by
(i) each person who, to our knowledge, owns more than 5% of our Common Stock or Series Z Preferred Stock, (ii) our current directors
and the named executive officers identified under the heading “Executive Compensation” and (iii) all of our current directors
and executive officers as a group. We have determined beneficial ownership in accordance with applicable rules of the SEC, and the information
reflected in the table below is not necessarily indicative of beneficial ownership for any other purpose. Under applicable SEC rules,
beneficial ownership includes any shares as to which a person has sole or shared voting power or investment power and any shares which
the person has the right to acquire within 60 days after April 28, 2022 through the exercise of any option, warrant or right or
through the conversion of any convertible security. Unless otherwise indicated in the footnotes to the table below and subject to community
property laws where applicable, we believe, based on the information furnished to us that each of the persons named in this table has
sole voting and investment power with respect to the shares indicated as beneficially owned.
The
information set forth in the table below is based on 3,340,416 shares of our Common Stock and 500 shares of Series Z Preferred
Stock issued and outstanding on April 29, 2022. In computing the number of shares of Common Stock beneficially owned by a person
and the percentage ownership of that person, we deemed to be outstanding all shares of Common Stock subject to options, warrants, rights
or other convertible securities held by that person that are currently exercisable or will be exercisable within 60 days after April
29, 2022. We did not deem these shares outstanding, however, for the purpose of computing the percentage ownership of any other
person. Unless otherwise indicated, the principal address of each of the Stockholders below is in care of Greenwave Technology Solutions,
Inc., 277 Suburban Drive, Suffolk, VA 23434.
| |
Number of Shares of Common Stock Beneficially Owned | | |
Percentage of Common Stock Beneficially Owned | | |
Number of Shares of Series Z Preferred Stock Beneficially Owned | | |
Percentage of Series Z Preferred Stock Beneficially Owned | | |
% of Total Voting Power | |
Directors and Named Executive Officers | |
| | | |
| | | |
| | | |
| | | |
| | |
Danny Meeks | |
| 2,629,352 | (1) | |
| 78.71 | % | |
| 250 | | |
| 50 | % | |
| 78.71 | % |
John Wood | |
| 25,866 | | |
| 0.77 | % | |
| - | | |
| - | | |
| 0.77 | % |
Cheryl Lanthorn | |
| 880 | (2) | |
| 0.03 | % | |
| - | | |
| - | | |
| 0.03 | % |
J. Bryan Plumlee | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
Howard Jordan | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
All directors and named executive officers as a group (3 people) | |
| 2,656,098 | | |
| 79.51 | % | |
| 250 | | |
| 50 | % | |
| 79.51 | % |
Other 5% Stockholder | |
| | | |
| | | |
| | | |
| | | |
| | |
None. | |
| | | |
| | | |
| | | |
| | | |
| | |
(1) |
Consists
of (i) 1,657,202 shares of Common Stock, (ii) 323,926 shares of Common Stock underlying convertible debt, (iii) 317,523 of Common
Stock underlying warrants, and (iv) 330,701 shares of Common Stock underlying the shares of Series Z Preferred Stock. |
(2) |
Consists
of 880 shares owned by the reporting person’s spouse. |
ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
Except
for the below, from January 1, 2020 through the date of this annual report, we have not been a party to any transaction or proposed transaction
in which the amount involved in the transaction exceeds the lesser of $120,000 or 1% of the average of our total assets at year-end
for the last two completed fiscal years, and in which any of our directors, executive officers or, to our knowledge, beneficial owners
of more than 5% of our capital stock or any member of the immediate family of any of the foregoing persons had or will have a direct
or indirect material interest, other than equity and other compensation which are described elsewhere in this Annual Report.
During
the years ended December 31, 2021 and 2020, the Company received aggregate advances of $2,957 and $3,696 and repaid an aggregate of $6,144
and $509, respectively, to the Company’s former Chief Executive Officer.
The
advances were non-interest bearing and due on demand. As of December 31, 2021, the Company owed $0 in advances to the Company’s
former Chief Executive Officer.
On
December 16, 2021, the Company’s former Chief Executive Officer forfeited his 1,000 shares of Series C Preferred Stock for no consideration.
As
of December 31, 2021, the Company leases 11 scrap yard facilities by an entity controlled by the Company’s Chief Executive Officer.
During the year ended December 31, 2021, the Company paid rents of $477,140 to an entity controlled by the Company’s Chief Executive
Officer, of which $122,866 was owed at December 31, 2021.
During
the year ended December 31, 2021, the Company’s Chief Executive Officer was reimbursed $224,660 for expenses made on behalf the
Company. Further, during the year ended December 31, 2021 and 2020, the Company’s Chief Executive Officer advanced $24,647 and
$20,520 to the Company and was repaid $59,103 and $0, respectively.
On
September 30, 2021, the Company authorized the issuance of 500 shares of Series Z Preferred Stock, par value $0.001 per share. The Series
Z Preferred Stock has a $20,000 stated value per share and all 500 Series Z preferred shares, in aggregate, are convertible into 19.98%
of the issued and outstanding common shares of the Company (post conversion). The conversion rate is applicable on a pro rata basis to
each share of Series Z Preferred Stock upon conversion. This anti-dilutive conversion feature is in effect until such time an S-1 Registration
Statement is declared effective by the SEC in conjunction with a NASDAQ listing. On September 30, 2021, the Company entered into a Series
Z Preferred Stock Issuance Agreement with the Company’s Chief Executive Officer whereby the Company entered into a non–convertible
note payable agreement for $1,000,000 in exchange for: (i) a $1,000,000 cash payment directly paid to the warrant holder; and (ii) the
issuance of 250 Series Z Preferred Shares having a fair value of $6,530,867. The note bears interest of 8% per annum and is due within
three days of the Company’s next closing of equity financing of $3,000,000 or more. The proceeds received were allocated to the
debt and equity on a relative fair value basis. Accordingly, debt discount of $867,213 was recognized with a corresponding increase in
additional paid-in capital. Since the due date is contingent upon a future event, the entire debt discount was amortized to interest
expense immediately.
On
December 15, 2020, the Company entered into a settlement agreement (the “Settlement Agreement”) with JDE Development, LLC
(“JDE”), a Florida limited liability company wholly-owned and managed by Jesus Quintero, the Company’s former Chief
Financial Officer, in connection with the outstanding sum of $89,143 due to JDE for the services of Jesus Quintero as the Chief Financial
Officer of the Company pursuant to that certain CFO Services Agreement entered into as of April 1, 2018, by and between the Company and
Jesus Quintero. Pursuant to the Settlement Agreement, the Company agreed to pay JDE $25,000 (the “Cash Settlement”) and to
enter into a convertible note with JDE in the principal amount of $64,143 (the “Note”). In addition, both parties agreed,
on behalf of themselves, their past and present shareholders, members, directors, employees, managers, parents, affiliates, subsidiaries,
principals, officers, related entities, assigns and successors, to irrevocably and fully release each other, and their respective past
and present shareholders, members, directors, employees, managers, parents, affiliates, subsidiaries, principals, officers, related entities,
assigns and successors, from any and all claims and causes of action, suits, debts, dues, sums of money, accounts, reckonings, bonds,
bills specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, extents, executions,
claims and demands whatsoever at law or in equity, upon or by reason of any matter, cause or thing of any nature whatsoever, including
but not limited to claims related to sums payable by the Company to JDE. In accordance with the Settlement Agreement, (i) on December
23, 2020, the Company paid JDE the Cash Settlement, and (ii) on December 15, 2020, the Company entered into the Note with JDE for a principal
amount of $64,143. The Note had a maturity date of June 15, 2021 and accrued interest at a rate of 12% per annum. The holder has the
right to convert the Outstanding Balance of the Note at any time into shares of common stock of the Company at a conversion price of
$0.90 per share, subject to adjustment. In the event of default, the conversion price shall be 60% of the average of the three lowest
closing bid prices of the Company’s common stock during the 20 days prior to the conversion date. The shares of Series Y Preferred
Stock are not convertible to the extent that (i) the Company’s Certificate of Incorporation has not been amended to increase the
number of authorized shares of Common Stock of the Company, or (ii) the holder (together with such holder’s affiliates) would beneficially
own in excess of 4.99% of the shares of Common Stock outstanding immediately after giving effect to such conversion (which provision
may be increased to a maximum of 9.99% by the holder by written notice from such holder to the Company, which notice shall be effective
61 calendar days after the date of such notice). As a result of the beneficial conversion feature of the Note, debt discount of $64,143
was recognized with a corresponding increase in additional paid-in capital. On December 24, 2020, the holder converted $64,143 of principal
into 3.20716 shares of Series Y preferred shares having a stated value of $64,143, resulting in a reduction in debt discount by $60,971
and a loss on settlement of $60,971. As of December 31, 2020, the remaining carrying value of the Note was $0, net of debt discount of
$0. As of December 31, 2021 and 2020, accrued interest payable of $0 and $0, respectively, was outstanding on the Note (See Note 10).
Leases
with Danny Meeks
We
lease our scrap yard located at 22097 Brewers Neck Blvd., Carrollton, VA 23314, from DWM Properties, LLC, which is owned by our Chairman
and Chief Executive Officer for $55,850 per month. The lease expires on January 1, 2024, with two one year options to extend at
the Company’s election.
We
lease our scrap yard located at 1576 Millpond Rd., Elizabeth City, NC 27909, from DWM Properties, LLC, which is owned by our Chairman
and Chief Executive Officer for $10,874 per month. The lease expires on January 1, 2024, with two one year options to extend at the Company’s
election.
We
lease our scrap yard located at 130 Courtland Rd., Emporia, VA 23847, from DWM Properties, LLC, which is owned by our Chairman and Chief
Executive Officer for $10,874 per month. The lease expires on January 1, 2024, with two one year options to extend at the Company’s
election.
We
lease our scrap yard located at 623 Highway 903 N., Greenville, NC 27834, from DWM Properties, LLC, which is owned by our Chairman and
Chief Executive Officer for $10,874 per month. The lease expires on January 1, 2024, with two one year options to extend at the Company’s
election.
We
lease our scrap yard located at 8952 Richmond Rd., Toano, VA 23168, from DWM Properties, LLC, which is owned by our Chairman and Chief
Executive Officer for $10,874 per month. The lease expires on January 1, 2024, with two one year options to extend at the Company’s
election.
We
lease our scrap yard located at 945 NC 11N, Kelford, NC 27805, from DWM Properties, LLC, which is owned by our Chairman and Chief Executive
Officer for $49,293 per month. The lease expires on January 1, 2024, with two one year options to extend at the Company’s
election.
We
lease our scrap yard located at 1100 E Princess Anne Rd, Norfolk, VA 23504, from DWM Properties, LLC, which is owned by our Chairman
and Chief Executive Officer for $15,914 per month. The lease expires on January 1, 2024, with two one year options to extend at the Company’s
election.
We
lease our scrap yard located at 4091 Portsmouth Blvd., Portsmouth, VA 23701, from DWM Properties, LLC, which is owned by our Chairman
and Chief Executive Officer for $10,874 per month. The lease expires on January 1, 2024, with two one year options to extend at the Company’s
election.
We
lease our scrap yard located at 277 Suburban Drive, Suffolk, VA 23434, from DWM Properties, LLC, which is owned by our Chairman and Chief
Executive Officer for $14,959 per month. The lease expires on January 1, 2024, with two one year options to extend at the Company’s
election.
We
lease our scrap yard located at 9922 Hwy 17 S., Vanceboro, NC 28586, from DWM Properties, LLC, which is owned by our Chairman and Chief
Executive Officer for $8,487 per month. The lease expires on January 1, 2024, with two one year options to extend at the Company’s
election.
We
lease our scrap yard located at 1040 Oceana Blvd, Virginia Beach, VA 23454, from DWM Properties, LLC, which is owned by our Chairman
and Chief Executive Officer for $15,000 per month. The lease expires on January 1, 2024, with two one year options to extend at the Company’s
election.
We
lease our scrap yard located at 406 Sandy Street, Fairmont, NC 28340, from DWM Properties,
LLC, which is owned by our Chairman and Chief Executive Officer for $8,000 per month. The lease expires on January 1, 2024, with two
one year options to extend at the Company’s election.
ITEM
14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Set
forth below are approximate fees for services rendered by RBSM, our independent registered public accounting firm, for the fiscal years
ended December 31, 2021 and December 31, 2020.
| |
RBSM | |
| |
2021 | | |
2020 | |
Audit Fees | |
$ | 129,000 | | |
$ | 111,000 | |
Audit-Related Fees | |
| - | | |
| - | |
Tax Fees | |
| - | | |
| - | |
Other Fees | |
| 135,208 | | |
| - | |
Totals | |
$ | 264,208 | | |
$ | 111,000 | |
Audit
Fees
The
aggregate fees billed for each of the last two fiscal years for professional services rendered by RBSM for the audit of the Company’s
annual financial statements and review of financial statements included in the Company’s annual report on Form 10-K and in the
Company’s quarterly reports on Form 10-Q, or services that are normally provided by the independent registered public accounting
firm in connection with statutory and regulatory filings or engagements for the fiscal years ending December 31, 2021 and 2020 were $129,000
and $111,000, respectively.
Audit-Related
Fees
The
aggregate fees billed in either of the last two fiscal years for assurance and related services by RBSM that are reasonably related to
the performance of the audit or review of the registrant’s financial statements and are not reported under “Audit Fees”
for the fiscal years ending December 31, 2021 and 2020 were $0 and $0, respectively.
Tax
Fees
The
aggregate fees were billed for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning
for the fiscal years ending December 31, 2021 and 2020 was $0 and $0, respectively, for RBSM.
All
Other Fees
Other
fees billed for professional services provided by the principal accountant, other than the services reported above, for the fiscal years
ending December 31, 2021 and 2020 were $135,208 and $0, respectively, for RBSM. These fees were related to the audit of Empire Services,
Inc.’s financial statements for the years ended December 31, 2020 and 2019, along with the review of Empire’s financial statements
for the nine months ended September 30, 2021.
The
Company’s Audit Committee approves all auditing services and the terms thereof and non-audit services (other than non-audit services
published under Section 10A(g) of the Exchange Act or the applicable rules of the SEC or the Pubic Company Accounting Oversight Board)
to be provided to the Company by the independent auditor; provided, however, the pre-approval requirement is waived with respect to the
provisions of non-audit services for the Company if the “de minimis” provisions of Section 10A(i)(1)(B) of the Exchange Act
are satisfied.