UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

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

For the fiscal year ended December 31 2016, 2023

☐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: 333-196735001-41452

MASSROOTS, 

GREENWAVE TECHNOLOGY SOLUTIONS, INC.

(Exact name of registrant as specified in its charter)

(800)490-5020

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

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

Indicate by check mark ifwhether the registrantRegistrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.Yes[ ] ☐ No[X] ☒

Indicate by check mark if the registrantRegistrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.Yes [ ] ☐ No [X] ☒

Indicate by check mark whether the registrantRegistrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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.Yes[X] ☒ No [ ]☐

Indicate by check mark whether the registrantRegistrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).Yes [X] ☒ No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K isnot contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]☐

Indicate by check mark whether the registrantRegistrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitionsdefinition of “large accelerated filer,” “accelerated filer”filer,” “smaller reporting company,” and “smaller reporting“emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

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. ☐

Indicate by check mark whether the Registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the fi ling reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrantregistrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the Registrant is a shell company (as defined inby Rule 12b-2 of the Exchange Act).Yes [ ]☐ No [X]☒

As of June 30, 2016, the

The aggregate market value of the registrant’svoting and non-voting common stockequity held by non-affiliates of the registrantRegistrant was $23,299,600 based on the price at which stock was last sold on that date.$6,590,157 as of June 30, 2023.

As

The number of March 31, 2017, there were 84,874,773 shares of the Registrant’s common stock issued and outstanding.outstanding was 44,065,475 as of April 15, 2024.

Documents

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Company’s Proxy Statement for our 2024 Annual Meeting of Shareholders are incorporated by reference: None.reference into Part III of this report.

MASSROOTS,

GREENWAVE TECHNOLOGY SOLUTIONS, INC.

FORM 10-K ANNUAL REPORT

FOR THE FISCAL YEAR ENDED

DECEMBER 31, 2016
2023
TABLE OF CONTENTS

FORWARD-LOOKING STATEMENTS

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Statements in this reportAnnual Report on Form 10-K (“Annual Report”) may be “forward-looking statements.” statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Forward-looking statements include, but are not limited to, statements that express our intentions, beliefs, expectations, strategies, predictions or any other statements relating to our future activities or other future events or conditions. These statements are often, but not always, made through the use of words or phrases such as “believe,” “will,” “may,” “could,” “continue,” “should,” “contemplate,” “expect,” “anticipate,” “estimate,” “intend,” “target,” “forecast,” “outlook,” “guidance,” “project,” “potential,” “plan” and “would,” and similar expressions that convey uncertainty of future events or outcomes are intended to identify forward-looking statements. These statements are based on current expectations, estimates and projections about our business based in part on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may, and are likely to, differ materially from what is expressed or forecasted in the forward-looking statements due to numerous factors, including those described aboveset forth in “Item 1A. Risk Factors” and those risks discussed from time to timeelsewhere in this report, includingAnnual Report on Form 10-K.

You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the risks described under “Risk Factors” in our most resent registration statement and any risks described in any other filings we make with the SEC.date of this Annual Report on Form 10-K. Any forward-looking statements speak only as of the date on which they are made, and we do not undertakedisclaim any obligation to publicly update or release any revisions to these forward-looking statement to reflectstatements, whether as a result of new information, future events or circumstancesotherwise, after the date of this report.Annual Report on Form 10-K or to reflect the occurrence of unanticipated events, except as required by law.

Management’s discussionYou should read this Annual Report with the understanding that our actual future results, levels of activity, performance, and analysisevents and circumstances may be materially different from what we expect.

PART I

On October 19, 2021, we changed our corporate name from MassRoots, Inc. to Greenwave Technology Solutions, Inc. We will not distinguish between our prior and current corporate name and will refer to our current corporate name throughout this Annual Report on Form 10-K. As such, unless expressly indicated or the content indicates otherwise, as used in this Annual Report on Form 10-K, the terms “Registrant,” “Company,” “Greenwave,” “we,” “us,” and “our” refers to Greenwave Technology Solutions, Inc., a Delaware corporation, and its subsidiaries taken as a whole, unless otherwise noted.

This Annual Report contains additional trade names, trademarks, and service marks of financial conditionother companies, which are the property of their respective owners. We do not intend our use or display of other companies’ trade names, trademarks, or service marks to imply a relationship with, or endorsement or sponsorship of us by, these other companies.

ITEM 1. BUSINESS

Overview

We were formed in April 26, 2013 as a technology platform developer under the name MassRoots, Inc. In October 2021, we changed our corporate name from “MassRoots, Inc.” to “Greenwave Technology Solutions, Inc.” We sold all of our social media assets on October 28, 2021 for cash consideration equal to $10,000 and resultshas discontinued all operations related to our social media business. On September 30, 2021, we closed our acquisition of operations areEmpire Services, Inc. (“Empire”), which operates 14 metal recycling facilities in Virginia, North Carolina, and Ohio. The acquisition was effective October 1, 2021 upon the effectiveness of the Certificate of Merger in Virginia.

Upon the acquisition of Empire, we transitioned into the scrap metal industry which involves collecting, classifying and processing appliances, construction material, end-of-life vehicles, boats, and industrial machinery. We process these items by crushing, shearing, shredding, separating, and sorting, into smaller pieces and categorize these recycled ferrous, nonferrous, and mixed metal pieces based uponon density and metal prior to sale. In cases of scrap cars, we remove the catalytic converters, aluminum wheels, and batteries for separate processing and sale prior to shredding the vehicle. We have designed our financial statements, which have been prepared in accordance with accounting principles generally acceptedsystems to maximize the value of metals produced from this process.

We operate an automotive shredder at our Kelford, North Carolina location and a second automotive shredder at our Carrollton, Virginia location is expected to come online in the United States. second quarter of 2024. Our shredders are designed to produce a denser product and, in concert with advanced separation equipment, more refined recycled ferrous metals, which are more valuable as they require less processing to produce recycled steel products. In totality, this process reduces large metal objects like auto bodies into baseball-sized pieces of shredded recycled metal.

The preparation of these financial statements requires usshredded pieces are then placed on a conveyor belt under magnetized drums to make estimatesseparate the ferrous metal from the mixed nonferrous metal and judgments that affect the reported amounts of assets, liabilities, revenuesresidue, producing consistent and expenses. On an on-going basis, we evaluate these estimates, including those related to useful lives of propertyhigh-quality ferrous scrap metal. The nonferrous metals and equipment, cost reimbursement income, bad debts, impairment, contingencies and litigation. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. There can be no assurance that actual results will not differ from those estimates.

NOTE REGARDING KEY METRICS

We reviewmaterials then go through a number of metrics, including active Users, User Interactions,additional mechanical systems which separate the nonferrous metal from any residue. The remaining nonferrous metal is further processed to sort the metal by type, grade, and other metricsquality prior to evaluatebeing sold as products, such as zorba (mainly aluminum), zurik (mainly stainless steel), and shredded insulated wire (mainly copper and aluminum).

One of our business, measuremain corporate priorities is to open a facility with rail or deep-water port access to enable us to efficiently transport our performance, identify trends affectingproducts to domestic steel mills and overseas foundries. Because this would greatly expand the number of potential buyers of our business, formulate business plans and make strategic decisions. For the definitions of these terms and additional information, see the section entitled “Business – Definitions of Key Metrics.”

While these numbers are based on whatprocessed scrap products, we believe to be reasonable estimates foropening a facility with port or rail access could result in an increase in both the applicable period of measurement, there are inherent challenges in measuring usagerevenue and User engagement across our User-base around the country. For example, we treat multiple accounts held by a single person or organization as multiple Users for purposes of calculating our Users because we permit people and organizations to have more than one account. Additionally, some accounts used by organizations are used by many people within the organization. As such, the calculationsprofitability of our Users may not accurately reflect the actual numberexisting operations.

Empire is headquartered in Chesapeake, Virginia and employs 131 people as of people or organizations using our platform.April 15, 2024.

PART I

ITEM 1. BUSINESSBackground

Unless we have indicated otherwise or the context otherwise requires, references in this Annual Report on Form 10-K to “MassRoots,” the “Company,” “we,” “us” and “our” or similar terms are to MassRoots, Inc. Unless otherwise indicated, all share and per share information relating to our common stock in this Annual Report on Form 10-K has been adjusted to reflect the “Exchange” which occurred during our “Reorganization”. See the section entitled “Fundraising During the Year and Our Reorganization” contained in this “Item 1” for additional discussion of the Exchange and Reorganization.

Organization

We were incorporated in the state of Delaware on April 26, 2013 as a technology platform for the cannabis industry.platform. Our principal executive office is located at 4016 Raintree Rd, Ste 300, Chesapeake, VA 23321, and our telephone number is (800) 490-5020.

On January 25, 2017,October 1, 2021, we consummated a reverse triangular merger (the “Whaxy“Empire Merger”), whereby pursuant to which we acquired all of the outstanding common stock of DDDigtal IncEmpire Services, Inc. (“DDDigtal”Empire”), a ColoradoVirginia corporation. Upon consummationclosing of the WhaxyEmpire Merger, each shareall of DDDigtal’sthe shares of Empire’s common stock was exchanged for a number of1,650,000 shares of our common stock (or a fraction thereof), based on an exchange ratio, as ultimately calculated, equal to approximately 5.273-for-1, such that 1 share of our common stock was issued for every 5.273 shares of DDDigtal’s common stock. At the same time,closing of the Empire Merger, all shares of common stock of our newly-formed merger subsidiary created solelyformed for the sole purpose of effectuating the WhaxyEmpire Merger, waswere converted into and exchanged for one share of common stock of DDDigtal,Empire, and all shares of DDDigtal’sEmpire’s common stock that were outstanding immediately prior to the effectivenessclosing of the WhaxyEmpire Merger automatically cancelled and retired. DDDigtalUpon the closing of the Empire Merger, Empire continued as our surviving wholly-owned subsidiary, (“Whaxy”), and the merger subsidiary ceased to exist.

Products and Services

Our main product is selling ferrous metal, which is used in the recycling and production of finished steel. It is categorized into heavy melting steel, plate and structural, and shredded scrap, with various grades of each of those categorizations based on the content, size and consistency of the metal. All of these attributes affect the metal’s value.

We also process nonferrous metals such as aluminum, copper, stainless steel, nickel, brass, titanium, lead, alloys and mixed metal products. Additionally, we sell the catalytic converters recovered from end-of-life vehicles to processors which extract the nonferrous precious metals such as platinum, palladium and rhodium.

We provide metal recycling services to a wide range of suppliers, including large corporations, industrial manufacturers, retail customers, and government organizations.

Pricing and Customers

Prices for our ferrous and nonferrous products are based on prevailing market rates and are subject to market cycles, worldwide steel demand, government regulations and policy, and supply of products that can be processed into recycled steel. Our main buyers adjust the prices they pay for scrap metal products based on market rates usually on a monthly or bi-weekly basis. We are usually paid for the scrap metal we deliver to customers within 14 days of delivery.

Based on any price changes from our customers or our other buyers, we in turn adjust the price for unprocessed scrap we pay suppliers in order to manage the impact on our operating income and cashflows.

The spread we are able to realize between the sales prices and the cost of purchasing scrap metal is determined by a number of factors, including transportation and processing costs. Historically, we have experienced sustained periods of stable or rising metal selling prices, which allow us to manage or increase our operating income. When selling prices decline, we adjust the prices we pay customers to minimize the impact to our operating income.

Sources of Unprocessed Metal

Our main sources of unprocessed metal we purchase are end-of-life vehicles, old equipment, appliances and other consumer goods, and scrap metal from construction or manufacturing operations. We acquire this unprocessed metal from a wide base of suppliers including large corporations, industrial manufacturers, retail customers, and government organizations who unload their metal at our facilities or we pick it up and transport it from the supplier’s location. Currently, our operations and main suppliers are located in the Hampton Roads and northeastern North Carolina markets. In connectionthe second quarter of 2023, we are expanding our operations by opening a metal recycling facility in Cleveland, Ohio.

Our supply of scrap metal is influenced by overall health of economic activity in the United States, changes in prices for recycled metal, and, to a lesser extent, seasonal factors such as severe weather conditions, which may prohibit or inhibit scrap metal collection.

Technology

In May 2021, we launched our new website. For the first time, Empire’s customers can see the current prices for each type of scrap metal. Our website is also integrated with Google’s Business Profiles, listing many of Empire’s locations on Google for the Whaxy Merger,first time. In late May 2021, the Empire launched a junk car buying platform, where people looking to sell their scrap cars can get a quote within minutes, and integrated Google Ads, enabling Empire to micro-target their advertising based on location, age, income, and other factors.

Additionally, during 2021, the Company moved the operations of each stockholder of DDDigtal priortheir yards to such mergerWeighPay, a cloud-based Enterprise Resource Planning “ERP” system, which enables management to track sales, inventory, and operations at each facility in real time, while also establishing stronger internal controls and systems. Additionally, in 2021, the Company moved Empire’s accounting systems over to a cloud-based QuickBooks to facilitate collaboration and further growth.

The technology systems and improvements Empire implemented have resulted in a significant increase in new customers, hundreds of quotes and dozens of purchases of junk cars, and we believe a material increase in Empire’s revenues as a result of these improvements. These systems have also streamlined Empire’s accounting and internal operations to enable any future acquisitions to be closed quickly and efficiently. Lastly, through the data-driven decision processes that have been introduced, Empire’s strategy on future locations and pricing is being informed by accurate and relevant data.

Now that strong foundational systems are in place, management has begun to repurpose Greenwave’s technology platform that was developed from 2013 to 2020 into a marketing and CRM platform for scrap metal yards. This system will enable each facility to:

Over the past ten years, Greenwave has invested approximately $10 million developing these technologies which we believe we can re-purpose for a fraction of the cost of development, give our metal recycling facilities and those who pay to use our platform a significant competitive advantage, and grow our revenues and profits as a result.

There are few companies developing technology solutions for the scrap metal industry and we believe that by utilizing our experience and assets on this highly-profitable but often overlooked industry, we can create significant value for our shareholders.

Competition

We compete with several large, well-financed recyclers of scrap metal, steel mills which own their own scrap metal processing operations, and with smaller metal recycling companies. Demand for metal products is sensitive to global economic conditions, the relative value of the U.S. dollar, and availability of material alternatives, including recycled metal substitutes. Prices for recycled metal are also influenced by tariffs, quotas, and other import restrictions, and by licensing and government requirements.

We aim to create a competitive advantage through our ability to process significant volumes of metal products and utilize the technology solutions, our use of processing and separation equipment, the number and location of our facilities, and the operating synergies we have been able to develop based on our experience.

Recent Developments

On March 29, 2024, the Company entered into a lock-upan exchange agreement with us, thereby prohibiting each such stockholder from offering, selling, contractingDWM Properties LLC (the “Holder”), whereby the Company and Holder agreed to sell, pledging, giving, donating, transferring or otherwise disposingexchange $10,000,000 of directly or indirectly, anythat certain Secured Promissory Note, dated July 31, 2023, issued by the Company to the Holder for shares of ourthe Company’s newly created Series D Convertible Preferred Stock (the “Preferred Stock”). The Preferred Stock is convertible into the Company’s common stock obtainedat $0.204 per share, subject to adjustment as set forth therein, except the Preferred Stock is not convertible until such time as the currently outstanding senior secured indebtedness of the Company has been satisfied in full. In addition, the Company has the right to redeem the Preferred Stock in cash or shares of its Common Stock. The Preferred Stock has a stated value of $10,000 per share, has no voting rights, and does not bear dividends.

On March 18, 2024, the Company extended warrant exercise inducement offer letters (the “Inducement Letters”) to the holders (the “Holders”) of its existing warrants to purchase shares of the Company’s common stock (the “Existing Warrants”), pursuant to which the Whaxy MergerHolders can exercise for cash their Existing Warrants to purchase an aggregate of up to 16,147,852 shares of the Company’s common stock, in the aggregate, at an exercise price of $0.204 per share, in exchange for the Company’s agreement to issue new warrants (the “Inducement Warrants”) on the terms described below, to purchase up to 32,295,704 shares of the Company’s common stock (the “Inducement Warrant Shares”). If Holders exercise all their Existing Warrants for cash, the Company would receive aggregate gross proceeds of approximately $3,294,161. Holders of Existing Warrants must return the Inducement Letter along with exercising all or part of the Existing Warrants on or before 5:00 p.m. Eastern Time on March 26, 2024 (the “Final Closing Date”) to receive the Inducement Warrants.

From March 18 to March 26, 2024, the Company issued 13,772,394 shares for the exercise of warrants for proceeds of $2,809,568. The Company issued 27,544,788 Inducement Warrants to the existing warrant holders who exercised during the inducement period. For more information, see the Company’s current report on Form 8-K filed on March 18, 2024.

From January 1 to March 20, 2024, the Company issued 10,864,690 shares for the conversion of convertible debt in the principal amount of $2,066,740. The shares underlying the debt were covered by a registration statement on Form S-3 (File No. 333-274293) declared effective by the U.S. Securities Exchange Commission on September 12, 2023.

From January 1 to March 17, 2024, the Company issued 2,258,088 shares for the exercise of warrants for proceeds of $22,581.

On March 15, 2024, the Company entered into leasing agreements for a scrap yard located at 3030 E 55th Street, Cleveland, OH 44127. Under the terms of the lease, the Company is required to pay $17,000 from March 1, 2024 to February 28, 2025; $23,000 from March 1, 2025 to February 28, 2026; $23,000 from March 1, 2026 to February 28, 2027; $23,000 from March 1, 2027 to February 28, 2028; and increasing by the greater of 3% and the CPI every 12 months thereafter until the expiration of the lease. The lease is for a period of six (6) months followingfive years, include two options to extend for five years each, and the effective dateCompany was required to make a security deposit of $17,000. The Company has the option to purchase the property for $3,277,000 until February 28, 2024.

Intellectual Property

None.

Employees and Human Capital Resources

Greenwave has 131 full-time employees as of April 15, 2024.

We view our diverse employee population and our culture as key to our success. Our company culture prioritizes learning, supports growth and empowers us to reach new heights. We recruit employees with the skills and training relevant to succeed and thrive in their functional responsibilities. We assess the likelihood that a particular candidate will contribute to the Company’s overall goals, and beyond their specifically assigned tasks. Depending on the position, our recruitment reach can be local as well as national. We provide competitive compensation and best in class benefits that are tailored specifically to the needs and requests of our employees. During 2021 and 2022, we worked to manage through the effects of the COVID-19 pandemic and entered 2023 stronger than ever. As appropriate, others were provided the option of working remotely or at our facilities with appropriate safeguards. We uphold our commitment to shareholders by working hard and being thoughtful and deliberate in how we use resources.

Available Information

We file Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other information with the Securities and Exchange Commission (SEC). Our filings with the SEC are available free of charge on the SEC’s website at www.sec.gov and on our website under the “Investors” tab as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

ITEM 1A. RISK FACTORS

An investment in our securities involves a high degree of risk. This Annual Report on Form 10-K contains the risks applicable to an investment in our securities. The risks and uncertainties we have described are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our operations. The occurrence of any of these known or unknown risks might cause you to lose all or part of your investment in the offered securities.

Risk Factors Summary

Risks Relating to Our Business and Industry

Risks Relating to Government Laws and Regulations

Risks Relating to Intellectual Property

Risks Related to our Common Stock

Risks Relating to Our Business and Industry

We operate in industries that are cyclical and sensitive to general economic conditions, which could have a material adverse effect on our operating results, financial condition and cash flows.

Demand for most of our products is cyclical in nature and sensitive to general economic conditions. The timing and magnitude of the cycles in the industries in which our products are used, including global steel manufacturing and nonresidential and infrastructure construction in the U.S., are difficult to predict. The cyclical nature of our operations tends to reflect and be amplified by changes in economic conditions, both domestically and internationally, and foreign currency exchange fluctuations. Economic downturns or a prolonged period of slow growth in the U.S. and foreign markets or any of the industries in which we operate could have a material adverse effect on our results of operations, financial condition and cash flows.

Changing conditions in global markets including the impact of sanctions and tariffs, quotas and other trade actions and import restrictions may adversely affect our operating results, financial condition and cash flows.

A significant portion of the metal we process is sold to end customers located outside the U.S., including countries in Asia, the Mediterranean region and North, Central and South America. Our ability to sell our products profitably, or at all, is subject to a number of risks including adverse impacts of political, economic, military, terrorist or major pandemic events; labor and social issues; legal and regulatory requirements or limitations imposed by foreign governments including quotas, tariffs or other protectionist trade barriers, sanctions, adverse tax law changes, nationalization, currency restrictions, or import restrictions for certain types of products we export; and disruptions or delays in shipments caused by customs compliance or other actions of government agencies. The occurrence of such merger,events and conditions may adversely affect our operating results, financial condition and cash flows.

For example, in fiscal 2017, regulators in China began implementing the National Sword Initiative involving inspections of Chinese industrial enterprises, including recyclers, in order to identify rules violations with respect to discharge of pollutants or illegally transferred scrap imports. Restrictions resulting from the National Sword Initiative include a ban on certain imported recycled products, lower contamination limits for permitted recycled materials, and more comprehensive pre- and post-shipment inspection requirements. Disruptions in pre-inspection certifications and stringent inspection procedures at certain Chinese destination ports have limited access to these destinations and resulted in the renegotiation or cancellation of certain nonferrous customer contracts in connection with the redirection of such shipments to alternate destinations. Commencing July 1, 2019, China imposed further restrictions in the form of import license requirements and quotas on certain scrap products, including certain nonferrous products we sell. Chinese import licenses and quotas are issued to Chinese scrap consumers on a quarterly basis for the importation of scrap products. Since the implementation of this program, the size of import quotas has been steadily reduced on a quarter-over-quarter basis. We have continued to sell our recycled metal products into China; however, additional or modified license requirements and quotas, as well as additional product quality requirements, may be issued in the future. We believe that the potential impact on our recycling operations of the Chinese regulatory actions described above could include requirements that would necessitate additional processing and packaging of certain nonferrous recycled scrap metal products, increased inspection and certification activities with respect to exports to China, or a change in the use of our sales channels in the event of delays in the issuance of licenses, restrictive quotas or an outright ban on certain or all of our recycled metals products by China. As regulatory developments progress, we may need to make further investments in nonferrous processing equipment beyond existing planned investments where economically justified, incur additional costs in order to comply with new inspection requirements, or seek alternative markets for the impacted products, which was Januarymay result in lower sales prices or higher costs and may adversely impact our business or results of operations.

In March 2018, the U.S. imposed a 25% tariff on certain imported steel products and a 10% tariff on certain imported aluminum products under Section 232 of the Trade Expansion Act of 1962. These new tariffs, along with other U.S. trade actions, have triggered retaliatory actions by certain affected countries, and other foreign governments have initiated or are considering imposing trade measures on other U.S. goods. For example, China has imposed a series of retaliatory tariffs on certain U.S. products, including a 25 2017.percent tariff on all grades of U.S. scrap and an additional 25 percent tariff on U.S. aluminum scrap. These tariffs and other trade actions could result in a decrease in international steel demand beyond that already experienced and further negatively impact demand for our products, which would adversely impact our business. Given the uncertainty regarding the scope and duration of these trade actions by the U.S. or other countries, the impact of the trade actions on our operations or results remains uncertain, but this impact could be material.

Changes in the availability or price of inputs such as raw materials and end-of-life vehicles could reduce our sales.

Our principal executive office is locatedbusinesses require certain materials that are sourced from third party suppliers. Industry supply conditions generally involve risks, including the possibility of shortages of raw materials, increases in raw material and other input costs, and reduced control over delivery schedules. We procure our scrap inventory from numerous sources. These suppliers generally are not bound by long-term contracts and have no obligation to sell scrap metal to us. In periods of declining or lower scrap metal prices suppliers may elect to hold scrap metal to wait for higher prices or intentionally slow their metal collection activities, tightening supply. If a substantial number of suppliers cease selling scrap metal to us, we will be unable to recycle metal at MassRoots, Inc., 1624 Market Street, Suite 201, Denver, CO 80202,desired levels, and our telephoneresults of operations and financial condition could be materially adversely affected. For instance, in the second quarter of fiscal 2020 a lower price environment for recycled metals in combination with economic and other restrictions on suppliers relating to COVID-19 severely constricted the supply of scrap metal including end-of-life vehicles, which resulted in significantly reduced processed volumes. A slowdown of industrial production in the U.S. may also reduce the supply of industrial grades of metal to the metals recycling industry, resulting in less recyclable metal available to process and market. Increased competition for domestic scrap metal, including as a result of overcapacity in the scrap recycling industry in the U.S. and Canada, may also reduce the supply of scrap metal available to us. Failure to obtain a steady supply of scrap material could both adversely impact our ability to meet sales commitments and reduce our operating margins. Failure to obtain an adequate supply of end-of-life vehicles could adversely impact our ability to attract customers and charge admission fees and reduce our parts sales. Failure to obtain raw materials and other inputs to steel production such as graphite electrodes, alloys and other required consumables, could adversely impact our ability to make steel to the specifications of our customers.

Significant decreases in scrap metal prices may adversely impact our operating results.

The timing and magnitude of the cycles in the industries in which we operate are difficult to predict and are influenced by different economic conditions in the domestic market, where we typically acquire our raw materials, and foreign markets, where we typically sell the majority of our products. Purchase prices for scrap metal including end-of-life vehicles and selling prices for recycled scrap metal are subject to market forces beyond our control. While we attempt to respond to changing recycled scrap metal selling prices through adjustments to our metal purchase prices, our ability to do so is limited by competitive and other market factors. As a result, we may not be able to reduce our metal purchase prices to fully offset a sharp reduction in recycled scrap metal sales prices, which may adversely impact our operating income and cash flows. In addition, a rapid decrease in selling prices may compress our operating margins due to the impact of average inventory cost accounting, which causes cost of goods sold recognized in the Consolidated Statements of Operations to decrease at a slower rate than metal purchase prices.

For instance, in fiscal 2020, weaker market conditions for recycled metals, including as a result of the sharp decline in global economic conditions during the third quarter of fiscal 2020 in large part due to the impacts of the COVID-19 pandemic, and structural changes to the market for certain recycled nonferrous products primarily from Chinese import restrictions and tariffs, resulted in periods of sharply declining commodity prices and lower average net selling prices for our ferrous and nonferrous recycled metal products compared to fiscal 2019. As a result, operating margins in fiscal 2020 compressed as the decline in average net selling prices for our recycled metal products outpaced the reduction in purchase costs for raw materials. In fiscal 2021, prices for our ferrous and non-ferrous metals increased significantly, resulting in an increase in revenue and purchasing costs for raw materials. In fiscal 2022, prices for our ferrous and non-ferrous metals declined during the second half of the year, but remained historically strong, resulting in a decrease in revenue and purchasing costs for raw materials.

Imbalances in supply and demand conditions in the global steel industry may reduce demand for our products.

Economic expansions and contractions in global economies can result in supply and demand imbalances in the global steel industry that can significantly affect the price of commodities used and sold by our business, as well as the price of and demand for finished steel products. In a number of foreign countries, such as China, steel producers are generally government-owned and may therefore make production decisions based on political or other factors that do not reflect free market conditions. In the past, overcapacity and excess steel production in these foreign countries resulted in the export of aggressively priced semi-finished and finished steel products. This led to disruptions in steel-making operations within other countries, negatively impacting demand for our recycled scrap metal. Existing or new trade laws and regulations may cause or be inadequate to prevent disadvantageous trade practices, which could have a material adverse effect on our financial condition and results of operations. Although trade regulations restrict or impose duties on the importation of certain products, if foreign steel production significantly exceeds consumption in those countries, global demand for our recycled scrap metal products could decline and imports of steel products into the U.S. could increase, resulting in lower volumes and selling prices for our recycled metal products and finished steel products.

Impairment of long-lived assets and equity investments may adversely affect our operating results.

Our long-lived asset groups are subject to an impairment assessment when certain triggering events or circumstances indicate that their carrying value may be impaired. If the carrying value exceeds our estimate of future undiscounted cash flows of the operations related to the asset group, an impairment is (720) 442-0052.recorded for the difference between the carrying amount and the fair value of the asset group. The results of these tests for potential impairment may be adversely affected by unfavorable market conditions, our financial performance trends, or an increase in interest rates, among other factors. If, as a result of the impairment test, we determine that the fair value of any of our long-lived asset groups is less than its carrying amount, we may incur an impairment charge that could have a material adverse effect on our financial condition and results of operations.

We may be unable to renew facility leases, thus restricting our ability to operate.

We lease a significant portion of our facilities. The cost to renew such leases may increase significantly, and we may not be able to renew such leases on same or commercially reasonable terms, if not at all. Failure to renew these leases or timely find suitable alternative locations for our facilities may impact our ability to continue operations within certain geographic areas, which could have a material adverse effect on our financial condition, results of operations and cash flows.

Increases in the value of the U.S. dollar relative to other currencies may reduce the demand for our products.

A significant portion of our recycled scrap metal revenues is generated from sales to foreign customers, which are denominated in U.S. dollars, including customers located in Asia, the Mediterranean region and North, Central and South America. A strengthening U.S. dollar, as experienced during recent years including fiscal 2020, makes our products more expensive for non-U.S. customers, which may negatively impact export sales. A strengthening U.S. dollar also makes imported metal products less expensive, which may result in an increase in imports of steel products into the U.S. As a result, our finished steel products, which are made in the U.S., may become more expensive for our U.S. customers relative to imported steel products thereby reducing demand for our products.

Equipment upgrades, equipment failures and facility damage may lead to production curtailments or shutdowns.

Our business operations and recycling and manufacturing processes depend on critical pieces of equipment, including information technology equipment, shredders, nonferrous sorting technology, furnaces and a rolling mill, which may be out of service occasionally for scheduled upgrades or maintenance or as a result of unanticipated failures. Our facilities are subject to equipment failures and the risk of catastrophic loss due to unanticipated events such as fires, earthquakes, accidents or violent weather conditions. Interruptions in our processing and production capabilities and shutdowns resulting from unanticipated events could have a material adverse effect on our financial condition, results of operations and cash flows.

We are subject to legal proceedings and legal compliance risks that may adversely impact our financial condition, results of operations and liquidity.

We spend substantial resources ensuring that we comply with domestic and foreign regulations, contractual obligations and other legal standards. Notwithstanding this, we are subject to a variety of legal proceedings and compliance risks in respect of various matters, including regulatory, safety, environmental, employment, transportation, intellectual property, contractual, import/export, international trade and governmental matters that arise in the course of our business and in our industry. An outcome in an unusual or significant legal proceeding or compliance investigation in excess of insurance recoveries could adversely affect our financial condition and results of operations. For information regarding our current significant legal proceedings and contingencies, see “Legal Proceedings” in Part I, Item 3 and “Contingencies – Other” within Note 11 – Commitments and Contingencies in the notes to the financial statements.

Climate change may adversely impact our facilities and our ongoing operations.

The potential physical impacts of climate change on our operations are highly uncertain and depend upon the unique geographic and environmental factors present, for example rising sea levels at deep water port facilities, changing storm patterns and intensities, and changing temperature levels. As many of our recycling facilities are located near deep water ports, rising sea levels may disrupt our ability to receive scrap metal, process the scrap metal through our shredders and ship products to our customers. Extreme weather events and conditions, such as hurricanes, thunderstorms, tornadoes, wildfires and snow or ice storms, may increase our costs or cause damage to our facilities, and any damage resulting from extreme weather may not be fully insured. Increased frequency and duration of adverse weather events and conditions may also inhibit construction activity utilizing our products, scrap metal inflows to our recycling facilities, and retail admissions and parts sales at our auto parts stores. Potential adverse impacts from climate change, including rising temperatures and extreme weather events and conditions, may create health and safety issues for employees operating at our facilities and may lead to an inability to maintain standard operating hours.

Catastrophic events may disrupt our business and impair our ability to provide our platform to clients and consumers, resulting in costs for remediation, client and consumer dissatisfaction, and other business or financial losses.

Our operations depend, in part, on our ability to protect our facilities against damage or interruption from natural disasters, power or telecommunications failures, criminal acts and similar events. Despite precautions taken at our facilities, the occurrence of a natural disaster, an act of terrorism, vandalism or sabotage, spikes in usage volume or other unanticipated problems at a facility could result in lengthy interruptions in the availability of our platform. Even with current and planned disaster recovery arrangements, our business could be harmed. Also, in the event of damage or interruption, our insurance policies may not adequately compensate us for any losses that we may incur. These factors in turn could further reduce revenue, subject us to liability and lead to decreased usage of our platform and decrease sales of our advertising placements, any of which could harm our business.

We depend on a small number of suppliers for the materials necessary to run our business. The loss of these suppliers, or their failure to supply us with these materials, would materially and adversely affect our business.

We depend on the availability of key materials for our business from a small number of third-party suppliers. Because there are a limited number of suppliers for these materials, we may need to engage alternate suppliers to prevent a possible disruption. We do not have any control over the availability of materials. If we or our manufacturers are unable to purchase these materials on acceptable terms, at sufficient quality levels, or in adequate quantities, if at all, the successful operation of our business would be delayed or there would be a shortage in supply, which would impair our ability to generate revenues from our business.

We have substantial customer concentration, with a limited number of customers accounting for a substantial portion of our 2023 and 2022 revenues.

We currently derive a significant portion of our revenues from three large corporate customers. For the fiscal year ended December 31, 2016, we raised an aggregate of $6,158,770 from the sale2023, two certain large customers individually accounted for $20,716,044 and $2,001,847 or approximately 58.08% and 5.61% of our securities (includingrevenues, respectively. For the exercise of previously issued warrants for the purchase of our common stock). For thefiscal year ended December 31, 2016,2022, three certain large customers individually accounted for $17,962,176, $5,332,834, and $4,301,328, or approximately 53%, 16%, and 13% of our revenues, respectively.

There are inherent risks whenever a large percentage of total revenues are concentrated with a limited number of customers. It is not possible for us to predict the future level of demand for our services that will be generated by this customer or the future demand for the products and services of this customer in the end-user marketplace. In addition, revenues from larger customers, especially our largest customer may fluctuate from time to time based on the commencement and completion of projects, the timing of which may be affected by market conditions or other facts, some of which may be outside of our control. Further, some of our contracts with larger customers permit them to terminate our relationship at any time (subject to notice and certain other provisions). If any of these customers experience declining or delayed sales due to market, economic or competitive conditions, we hadcould be pressured to reduce the prices we charge for our services which could have an adverse effect on our margins and financial position and could negatively affect our revenues and results of operations and/or trading price of our common stock. If our largest customer terminates our services, such termination would negatively affect our revenues and results of operations and/or trading price of our common stock.

We have a netlimited history upon which an evaluation of our prospects and future performance can be made and have no history of profitable operations.

We were incorporated in April 2013 and have a limited operating history and our business is subject to all of the risks inherent in the establishment of a new business enterprise. Our likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered in connection with development and expansion of a new business enterprise. We may sustain losses in the future as we implement our business plan. There can be no assurance that we will operate profitably.

We are highly dependent on the services of key executives, the loss of $18,030,124.whom could materially harm our business and our strategic direction. If we lose key management or significant personnel, cannot recruit qualified employees, directors, officers, or other personnel or experience increases in our compensation costs, our business may materially suffer.

We are highly dependent on our management team, specifically our Chief Executive Officer, Danny Meeks. While we have an employment agreement with Danny Meeks, such employment agreement permits Mr. Meeks to terminate such agreement upon notice. If we lose key employees, our business may suffer. Furthermore, our future success will also depend in part on the continued service of our key management personnel and our ability to identify, hire, and retain additional personnel. We carry “key-man” life insurance on the life of our executive officer. We experience intense competition for qualified personnel and may be unable to attract and retain the personnel necessary for the development of our business. Because of this competition, our compensation costs may increase significantly.

We may need to obtain additional financing to fund our operations.

We may need additional capital in the future to continue to execute our business plan. Therefore, we may be dependent upon additional capital in the form of either debt or equity to continue our operations. At the present time, we do not have arrangements to raise additional capital, and we may need to identify potential investors and negotiate appropriate arrangements with them. We may not be able to arrange enough investment within the time the investment is required or that if it is arranged, that it will be on favorable terms. If we cannot obtain the needed capital, we may not be able to become profitable and may have to curtail or cease our operations. Additional equity financing, if available, may be dilutive to the holders of our capital stock. Debt financing may involve significant cash payment obligations, covenants and financial ratios that may restrict our ability to operate and grow our business.

Our independent registered public accounting firm has issued an audit opinion for our Company, which includes an explanatory paragraph expressing substantial doubt as toexpressed concerns about our ability to continue as a going concern.

The report of our independent registered accounting firm expresses concern about our ability to continue as a going concern based on our historical losses from operations and the potential need for additional financing to fund our operations. It is not possible at this time for us to predict with assurance the potential success of our business. If we cannot continue as a viable entity, we may be unable to continue our operations and you may lose some or all of your investment in our securities.

In the past we have experienced material weaknesses in our internal control over financial reporting, which if continued, could impair our financial condition.

As reported in Item 9A of this Annual Report on Form 10-K, our management concluded that our internal control over financial reporting was not effective as of December 31, 2023 and 2022 due to material weaknesses regarding our controls and procedures. The Company did not have sufficient segregation of duties to support its internal control over financial reporting. Due to our small size and limited resources, segregation of all conflicting duties has not always been possible and may not be economically feasible in the near term; however, we do expect to hire additional accounting personnel in the near future. We have and do endeavor to take appropriate and reasonable steps to make improvements to remediate these deficiencies. If we have continued material weaknesses in our internal financial reporting, our financial condition could be impaired or we may have to restate our financials, which could cause us to expend additional funds that would have a material impact on our ability to generate profits and on the success of our business.

Risks Relating to Government Laws and Regulations

Tax increases and changes in tax rules may adversely affect our financial results.

As a company conducting business on a global basis with physical operations throughout North America, we are exposed, both directly and indirectly, to the effects of changes in U.S., state, local and foreign tax rules. Taxes for financial reporting purposes and cash tax liabilities in the future may be adversely affected by changes in such tax rules. In many cases, such changes put us at a competitive disadvantage compared to some of our major competitors, to the extent we are unable to pass the tax costs through to our customers.

We may not realize our deferred tax assets in the future.

The assessment of recoverability of our deferred tax assets is based on an evaluation of existing positive and negative evidence as to whether it is more-likely-than-not that they will be realized. If negative evidence outweighs positive evidence, a valuation allowance is required. Impairment of deferred tax assets may result from significant negative industry or economic trends, a decrease in earnings performance and projections of future taxable income, adverse changes in laws or regulations, and a variety of other factors. Impairment of deferred tax assets could have a material adverse impact on our results of operations and financial condition and could result in not realizing the deferred tax assets. Deferred tax assets may require further valuation allowances if it is not more-likely-than-not that the deferred tax assets will be realized.

Environmental compliance costs and potential environmental liabilities may have a material adverse effect on our financial condition and results of operations.

Compliance with environmental laws and regulations is a significant factor in our business. We are subject to local, state and federal environmental laws and regulations in the U.S. and other countries relating to, among other matters:

We are also required to obtain environmental permits from governmental authorities for certain operations. Violation of or failure to obtain permits or comply with these laws or regulations could result in our business being fined or otherwise sanctioned by regulators or becoming subject to litigation by private parties. Future environmental compliance costs, including capital expenditures for environmental projects, may increase because of new laws and regulations, changing interpretations and stricter enforcement of current laws and regulations by regulatory authorities, expanding emissions, groundwater and other testing requirements and new information on emission or contaminant levels, uncertainty regarding adequate pollution control levels, the future costs of pollution control technology and issues related to climate change. We have seen an increased focus by federal, state and local regulators on metals recycling and auto dismantling facilities and new or expanding regulatory requirements.

Our operations use, handle and generate hazardous substances. In addition, previous operations by others at facilities that we currently or formerly owned, operated or otherwise used may have caused contamination from hazardous substances. As a result, we are exposed to possible claims, including government fines and penalties, costs for investigation and clean-up activities, claims for natural resources damages and claims by third parties for personal injury and property damage, under environmental laws and regulations, especially for the remediation of waterways and soil or groundwater contamination. These laws can impose liability for the cleanup of hazardous substances even if the owner or operator was neither aware of nor responsible for the release of the hazardous substances. We have, in the past, been found not to be in compliance with certain of these laws and regulations, and have incurred liabilities, expenditures, fines and penalties associated with such violations. Environmental compliance costs and potential environmental liabilities could have a material adverse effect on our financial condition, results of operations and cash flows. See “Contingencies – Environmental” in Note 11 – Commitments and Contingencies in the Notes to the Consolidated Financial Statements.

Governmental agencies may refuse to grant or renew our licenses and permits, thus restricting our ability to operate.

We conduct certain of our operations subject to licenses, permits and approvals from state and local governments. Governmental agencies often resist the establishment of certain types of facilities in their communities, including auto parts facilities. Changes in zoning and increased residential and mixed-use development near our facilities are reducing the buffer zones and creating land use conflicts with heavy industrial uses such as ours. This could result in increased complaints, increased inspections and enforcement including fines and penalties, operating restrictions, the need for additional capital expenditures and increased opposition to maintaining or renewing required approvals, licenses and permits. In addition, from time to time, both the U.S. and foreign governments impose regulations and restrictions on trade in the markets in which we operate. In some countries, governments require us to apply for certificates or registration before allowing shipment of recycled metal to customers in those countries. There can be no assurance that future approvals, licenses and permits will be granted or that we will be able to maintain and renew the approvals, licenses and permits we currently hold. Failure to obtain these approvals could cause us to limit or discontinue operations in these locations or prevent us from developing or acquiring new facilities, which could have a material adverse effect on our financial condition and results of operations.

Compliance with existing and future climate change and greenhouse gas emission laws and regulations may adversely impact our operating results.

Future legislation or increased regulation regarding climate change and greenhouse gas “GHG” emissions could impose significant costs on our business and our customers and suppliers, including increased energy, capital equipment, emissions controls, environmental monitoring and reporting and other costs in order to comply with laws and regulations concerning and limitations imposed on climate change and GHG emissions. The potential costs of allowances, taxes, fees, offsets or credits that may be part of “cap and trade” programs or similar future legislative or regulatory measures are still uncertain and the future of these programs or measures is unknown. Future climate change and GHG laws or regulations could negatively impact our ability (and that of our customers and suppliers) to compete with companies situated in areas not subject to such requirements. Until the timing, scope and extent of any future laws or regulations becomes known, we cannot predict the effect on our financial condition, operating performance or ability to compete. Furthermore, even without such laws or regulations, increased awareness and any adverse publicity in the global marketplace about the GHGs emitted by companies in the metals recycling and steel manufacturing industries could harm our reputation and reduce customer demand for our products. See “Business – Environmental Matters” in Part I, Item 1 of this Annual Report for further detail.

Risks Relating to Intellectual Property

We may not be able to protect our intellectual property rights throughout the world.

The success of our business depends on our continued ability to use our existing tradename in order to increase our brand awareness. The unauthorized use or other misappropriation of any our brand names could diminish the value of our business which would have a material adverse effect on our financial condition and results of operation.

We may be involved in lawsuits to protect or enforce our intellectual property, which could be expensive, time-consuming and unsuccessful and the outcome might have an adverse effect on the success of our business.

Competitors may infringe our trademarks or other intellectual property. Moreover, it may be difficult or impossible to obtain evidence of infringement by a competitor. To counter infringement or unauthorized use, we may be required to file infringement claims on an individual basis, which can be expensive and time-consuming and divert the time and attention of our management. There can be no assurance that we will have sufficient financial or other resources to file and pursue such infringement claims, which typically last for years before they are concluded.

We may be subject to claims by third parties asserting that our employees or we have misappropriated their intellectual property or claiming ownership of what we regard as our own intellectual property.

Some of our employees may have executed non-disclosure and non-competition agreements in connection with their previous employment. Although we try to ensure that our employees do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that we or these employees have used or disclosed confidential information or intellectual property, including trade secrets or other proprietary information, of any such employee’s former employer. Litigation may be necessary to defend against these claims.

Emerging Growth CompanyWe may also face claims that our use of technology licensed or otherwise obtained from a third party infringes the rights of others, under such case we may not be allowed to continue using such technology and selling our inventories containing such technology. In such cases, we may seek indemnification from our licensors/suppliers under our contracts with them. However, indemnification may be unavailable or insufficient to cover our costs and losses, depending on our use of the technology, whether we choose to retain control over conduct of the litigation, and other factors. In addition, we may have to find substitute to keep using similar technology to our products, which may be time-consuming and costly, if not impossible, upon such period our sales or manufacture of certain products may be negatively influenced.

Risks Relating to Ownership of our Common Stock

The market price of our Common Stock may be volatile and adversely affected by several factors.

The market price of our Common Stock could fluctuate significantly in response to various factors and events, including, but not limited to: our ability to execute our business plan; operating results below expectations; our issuance of additional securities, including debt or equity or a combination thereof, necessary to fund our operating expenses; announcements of technological innovations or new products by us or our competitors; and period-to-period fluctuations in our financial results.

In addition, the securities markets have from time-to-time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of our Common Stock.

If our shares of common stock become subject to the penny stock rules, it would become more difficult to trade our shares.

The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or authorized for quotation on certain automated quotation systems, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. If we do not obtain a listing on a national securities exchange and if the price of our common stock is less than $5.00, our common stock could be deemed a penny stock. The penny stock rules require a broker-dealer, before a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document containing specified information. In addition, the penny stock rules require that before effecting any transaction in a penny stock not otherwise exempt from those rules, a broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive (i) the purchaser’s written acknowledgment of the receipt of a risk disclosure statement; (ii) a written agreement to transactions involving penny stocks; and (iii) a signed and dated copy of a written suitability statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our common stock, and therefore stockholders may have difficulty selling their shares.

We are an “emerging growth company,” as defined ina “smaller reporting company” within the JOBSmeaning of Rule 12b-2 of the Exchange Act, and if we maydecide to take advantage of certain exemptions from various reporting requirements that are applicable to othersmaller reporting companies, our Common Stock could be less attractive to investors.

We qualify as a “smaller reporting company,” meaning that we are not an investment company, an asset-backed issuer, or a majority-owned subsidiary of a parent company that is not a “smaller reporting company,” and have either: (i) a public companies.

Section 107(b)float of less than $250 million or (ii) annual revenues of less than $100 million during the JOBS Act provides thatmost recently completed fiscal year and (A) no public float or (B) a public float of less than $700 million. As a “smaller reporting company,” we are entitled to rely on certain reduced disclosure requirements, such as an “emerging growth company” can take advantage ofexemption from providing executive compensation information in our periodic reports and proxy statements. We are also exempt from the extended transition periodauditor attestation requirements provided in Section 7(a)(2)(B)404(b) of the Securities ActSarbanes-Oxley Act. These exemptions and reduced disclosures in our SEC filings due to our status as a smaller reporting company may make it harder for complying with newinvestors to analyze our results of operations and financial prospects. We cannot predict if investors will find our Common Stock less attractive because we may rely on these exemptions. If some investors find our Common Stock or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have irrevocably opted out of the extended transition periodwarrants less attractive as a result, there may be a less active trading market for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act.our Common Stock and our stock prices may be more volatile.

We could remain an “emerging growth company”do not anticipate paying dividends on our Common Stock, and investors may lose the entire amount of their investment.

Cash dividends have never been declared or paid on our Common Stock, and we do not anticipate such a declaration or payment for upthe foreseeable future. We expect to five years, or until the earliestuse future earnings, if any, to fund business growth. Therefore, stockholders will not receive any funds absent a sale of (i) the last daytheir shares of the first fiscal year in whichcommon stock. If we do not pay dividends, our annual gross revenues are $1 billion, as adjusted, or more, (ii) the date that we becomeCommon Stock may be less valuable because a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which wouldreturn on your investment will only occur if our stock price appreciates. We cannot assure stockholders of a positive return on their investment when they sell their shares, nor can we assure that stockholders will not lose the entire amount of their investment.

You could lose some or all of your investment.

An investment in our securities is speculative and involves a high degree of risk. Potential investors should be aware that the value of an investment in the Company may go down as well as up. In addition, there can be no certainty that the market value of an investment in the Company will fully reflect its underlying value. You could lose some or all of your investment.

Our management controls a large block of our Common Stock that will allow them to control us.

As of April 12, 2024, members of our management team beneficially own approximately 8.18% of our outstanding common stock.

As a result, management may have the ability to control substantially all matters submitted to our stockholders for approval including:

In addition, management’s stock ownership may discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of us, which in turn could reduce our stock price or prevent our stockholders from realizing a premium over our stock price. Any additional investors will own a minority percentage of our common stock that is held by non-affiliates exceeds $700 millionand will have minority voting rights.

Because we can issue additional shares of Common Stock, purchasers of our Common Stock may incur immediate dilution and experience further dilution.

We are authorized to issue up to 1,200,000,000 shares of Common Stock, of which 44,000,718 shares of Common Stock are issued and outstanding as of April 9, 2024. Our Board of Directors has the last business dayauthority to cause us to issue additional shares of Common Stock without consent of any of stockholders. Consequently, our stockholders may experience further dilution in their ownership of our most recently completed second fiscal quarter,stock in the future, which could have an adverse effect on the trading market for our Common Stock.

Provisions in our Second Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws and Delaware law might discourage, delay or (iii)prevent a change in control of our Company or changes in our management and, therefore, depress the date on which wemarket price of our Common Stock.

Our Second Amended and Restated Certificate of Incorporation provides that all Internal Corporate Claims must be brought solely and exclusively in the Court of Chancery of the State of Delaware (or, if such court does not have issued more than $1 billion in non-convertible debt duringjurisdiction, the preceding three-year period.

Background

MassRoots was formed in April 2013 as a technology platformSuperior Court of the State of Delaware, or, if such other court does not have jurisdiction, the United States District Court for the medical cannabis community. In July 2013, we launched in the App Store and since that time, have grown intoDistrict of Delaware). The exclusive forum provision may limit a community of more than 1,000,000 cannabis consumers. Our platform enables medical cannabis patientsstockholders’ ability to review strains and products based on their effect, for example, being effective at treating back-pain or nausea. We then present this information in easy-to-use, actionable formats for everyday cannabis consumers to make purchasing decisions. Our growth has been primarily driven by MassRoots’ increasing popularity as one of the first national cannabis brands and word of mouth virility from our Users.

Asbring a technology company, MassRoots is able to rapidly scale its products and services with minimal marginal costs – each additional User or business that we add to our platform only costs negligible server hosting fees. It also allows us to have exposure to every regulated cannabis market without establishing a physical presence in each state. This minimizes the costs of scaling and required capital while, at the same time, offering a direct role in the cannabis industry without ever touching the plant itself.

MassRoots has strong relationships in both the technology and cannabis industries. As a semi-finalist for the Extreme Tech Challenge, MassRoots was introduced to some of the leading technology investors and developers in Silicon Valley and became one of the first cannabis-related companies to present on stage at the Consumer Electronics Show (CES) in early 2016. At the same time, MassRoots raised much of its seed-stage capital from the ArcView Group, the largest network of cannabis investors and businesses in the industry, enabling the Company to develop relationships with the key plays in the cannabis sector.

Definitions of Key Metrics

Total users (“Users”) is defined as every user who currently has an account with MassRoots. It does not include users who have deleted their account. It does not reflect active usage over any set period of time.

User interactions (“Interactions”) is defined as anytime a User follows another User, posts a status, comments on a status, or likes a status.

Our Products and Services

Our technology platform consists of: our consumer-facing social network (accessible through our Android application, iOS application, and web portal) and our business-facing advertising portal, MassRoots for Business.

The MassRoots Network

The MassRoots network is accessible as a free mobile application through the iOS App Store, the Amazon App Store, the Google Play Marketplace, and as a website at www.MassRoots.com. These applications and services workclaim in a similar manner asjudicial forum that it finds favorable for disputes based upon Internal Corporate Claims, which may discourage lawsuits against us or our current or former directors or officers and/or stockholders in such capacity. In addition, if a court were to find this exclusive forum provision to be inapplicable or unenforceable in an action, we may incur costs associated with resolving the dispute in other social networks, such as Facebook, Instagram, Twitterjurisdictions, which could have a material adverse effect on our business and Vine:operations.

If securities or industry research analysts do not publish research or reports about our business, or if they issue an unfavorable or misleading opinion regarding our common stock, the market price and trading volume of our Common Stock could decline.

The trading market for our Common Stock will rely in part on the research and reports that securities or industry research analysts, over whom we have no control, publish about us and our business. If any of the analysts who cover us issue an adverse or misleading opinion regarding us, our business model, our intellectual property or our stock performance, our stock price would likely decline. If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline.

IntegrationFuture sales and issuances of our Common Stock or rights to purchase our Common Stock, including pursuant to our equity incentive plans, could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to fall.

We expect that significant additional capital may be needed in the future to continue our planned operations, including expanded research and development activities and costs associated with Dispensary Point of Sale Systems

During the third quarter of 2016,operating a public company. To raise capital, we began integrating MassRoots with dispensary point of sale systems, enabling businessesmay sell Common Stock, convertible securities or other equity securities in one or more transactions at prices and in a manner we determine from time to target advertisingtime. If we sell common stock, convertible securities or other equity securities, investors may be materially diluted by subsequent sales. Such sales may also result in material dilution to Users based on their purchasing history. For example, if a particular User goes to a dispensary every week for a monthour existing stockholders, and purchases a chocolate brownie ediblenew investors could gain rights, preferences and then does not come back for two weeks, the dispensary would be able to send them a targeted ad offering them 20% off their next chocolate brownie edible purchase. The dispensary would be able to control the advertising offer, the targeting options, and all other relevant information. This will enable cannabis-related businesses to use data to target advertising directlyprivileges senior to the consumers most likely to take action based on them, very similar to other social networks.holders of our common stock.

To facilitate this integration with dispensary point of sale systems, duringWe have broad discretion in the second quarter of 2015, MassRoots invested $175,000 in exchange for preferred shares of Flowhub LLC (“Flowhub”), a seed-to-sale system, equal to 8.95%use of the then outstanding equitynet proceeds from our public offerings and may not use them effectively.

Our management has broad discretion in the application of Flowhub. Sincethe net proceeds from our public offerings, and you will be relying on the judgment of our management regarding the application of these proceeds. Our management might not apply the net proceeds from our public offerings in ways that ultimately increase the value of your investment. If we do not invest or apply the net proceeds from our public offerings in ways that enhance stockholder value, we may fail to achieve expected financial results, which could cause our stock price to decline.

Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud.

We are subject to the periodic reporting requirements of the Exchange Act. We designed our disclosure controls and procedures to reasonably assure that information we must disclose in reports we file or submit under the Exchange Act is accumulated and communicated to management and recorded, processed, summarized and reported within the time we have been working with Flowhub to integrate their system with our network.periods specified in the rules and forms of the SEC. We believe that Flowhub has developedany disclosure controls and procedures or internal controls and procedures, no matter how well-conceived and operated, can provide only reasonable, not absolute, assurance that the “next generation”objectives of seed-to-sale softwarethe control system are met.

These inherent limitations include the realities that judgments in decision-making can be faulty and believe there is tremendous amountthat breakdowns can occur because of synergies betweensimple error or mistake. Additionally, controls can be circumvented by the data both MassRootsindividual acts of some persons, by collusion of two or more people or by an unauthorized override of the controls. Accordingly, because of the inherent limitations in our control system, misstatements due to error or fraud may occur and Flowhub collect. We believe that by consolidating data from such cannabis point of sale systems, grow operations, and our consumer-facing social network,not be detected.

As a newly Nasdaq-listed company, we will have someincur material increased costs and become subject to additional regulations and requirements.

As a newly Nasdaq-listed public company, we will incur material additional legal, accounting and other expenses including recruiting and retaining qualified independent directors, payment of annual Nasdaq fees, and satisfying Nasdaq’s standards for companies listed with it. Because our common stock is listed on the Nasdaq, we must meet certain financial and liquidity criteria to maintain such listing. If we violate Nasdaq’s listing requirements, our common stock may be delisted. If we fail to meet any of the most important data available inNasdaq’s listing standards, our common stock may be delisted. In addition, our Board may determine that the cannabis industry.

On January 25, 2017, pursuantcost of maintaining our listing on a national securities exchange outweighs the benefits of such listing. A delisting of our common stock from Nasdaq may materially impair our stockholders’ ability to buy and sell our common stock and could have an adverse effect on the Whaxy Merger, we acquired DDDigtalmarket price of, and its menu management and online ordering platform for licensed cannabis businesses, known as “Whaxy”. Prior to the acquisition, Whaxy had processed over $5 million in volume across 40,000 unique transactions. The acquisition of Whaxy expands our offerings to include a full suite of dispensary software solutions – online ordering, marketing, and real-time inventory management— for cannabis businesses. Additionally, the Company retained Zach Marburger and Micah Davidson, Whaxy’s former Chief Executive Officer and Chief Technology Officer, respectively, as partefficiency of the MassRoots team.

User Growth and Product Distribution Channels

trading market for, our common stock. The MassRoots app is distributed freedelisting of charge through the iOS App Store, the Google Play Marketplaceour common stock could significantly impair our ability to raise capital and the Amazon App Store. Prospective users can search for MassRoots on these platforms, read user-reviews and make a decision on whether to download and utilize the MassRoots app. The MassRoots network is also accessible through desktop and mobile web browsers by navigating to www.MassRoots.com. Our MassRoots for Business portal is distributed at MassRoots.com/business where companies may request access.value of your investment.

MassRoots has primarily gained Users through organic growth - Users telling their friends

ITEM 1B. UNRESOLVED STAFF COMMENTS.

None.

ITEM 1C. CYBERSECURITY

Cybersecurity risks are a growing threat to joinus and other businesses, including our ERP and other third-party providers, which are vulnerable to cyberattacks, malware, and other system failures that may result in unauthorized access, damage, and other harms to our business or reputation. Protecting the network. Thisconfidentiality, integrity, and availability of our business information, intellectual property, customer, patient and employee data, and technology systems is supported by the number of endorsements MassRoots receives on Instagramcritical to our business and Twitter, viewable by searching “#MassRoots”.operations, ability to comply with regulatory requirements, and reputation.

App/Play Store Issues, User SupportAccordingly, Cybersecurity is an important and Similar Matters

On November 4, 2014, the MassRoots App was removed from Apple’s iOS App Store due to what we originally believed was a compliance issue with the App Store review team. Existing iOS Users were still able to access and use the MassRoots App; however, new Users were prohibited from downloading it. We discovered that this was a resultintegrated part of the App Store review team changing their app enforcement guidelinesCompany’s enterprise risk management function that identifies, monitors, and mitigates business, operational, and legal risks.

Accordingly, we have established Cybersecurity standards, policies, and operating procedures, for the purpose of implementing information protection processes and technologies; carrying out Cybersecurity risk detection, identification, assessment, response, and monitoring; assigning responsibility within our organization for risk detection and oversight; implementing Cybersecurity training; governing internal communications regarding Cybersecurity risks; and making required public and regulatory disclosures regarding Cybersecurity threats and incidents. We oversee risks from Cybersecurity threats associated with our use of third-party service providers by requiring our vendors to prohibit all social cannabis applications.agree that they have and will maintain appropriate Cybersecurity controls, such as through standard contractual provisions, and by coordinating with key vendors with respect to integration with our systems. Our Cybersecurity risk management program is based on the National Institute of Standards and Technology (“NIST”) framework.

WhenKey components of our Cybersecurity risk management program include the use of third-party service providers, as appropriate, to assess, test, or otherwise assist with aspects of our security processes. For example, we learnedemployed a third-party cyber risk consultant to assess our overall Cybersecurity risk framework against NIST standards. We have also engaged third-party experts to perform penetration testing of our IT systems, and we have considered the true natureresults of this policy change, we began organizingsuch tests to enhance our Cybersecurity systems and controls, as appropriate.

Our management, including leaders from our IT, information security, legal, and compliance teams, is responsible for implementing our Cybersecurity standards, policies, and operating procedures, under the cannabis communityultimate oversight of our Chief Financial Officer. We regularly discuss and industry against it. In early January 2015, we co-signed a letter to Apple’s CEO, Tim Cook, alongassess Cybersecurity risks.

Our Audit Committee assists our Board in overseeing Cybersecurity risk management and the integrity of our information technology systems, processes, and data. Periodically, the Audit Committee reviews and discusses with several cannabis business leaders, arguing thatmanagement, and, in its discretion, third party vendors or other external experts, the App Store’s policies were stifling innovationadequacy of security for our information technology systems, processes, and data; our incident response and contingency plans in the cannabis industry. Over 10,000event of a breakdown or security breach affecting the security of our Users sent personal emails to Apple advocating why MassRoots should returninformation technology systems or data or the information technology systems, processes, and data of our clients; and any new threats or incidents that have or may impact us. The Audit Committee receives reports on the operation of such programs from the Chief Financial Officer as appropriate. The Audit Committee also reviews management reports regarding the evolving threat environment, vulnerability assessments, and specific Cybersecurity incidents. Periodically, the Audit Committee reports on Cybersecurity matters, incidents, and risk oversight to the App Store - with their arguments ranging from freedom of speech and expression to cannabis patients suffering from anxiety who need social support networks.Board.

In early February 2015, an App Store representative informedAlthough we have not experienced a cyberattack or other Cybersecurity incident that has materially affected us, Apple had revised its enforcement guidelines - social cannabis applications that were geo-restricted to the 23 states with medical cannabis laws were once again permitted. On February 12, 2015, MassRoots returned to the App Store after we implemented the geo-restrictions.

While we are grateful to Apple for reversing its decision, we cannot guarantee this policythat we will remain in place. The iOS App Store is one of the largest content distribution channelsnot experience Cybersecurity incidents that may have a material effect on us in the worldfuture. We may not be able to protect our systems and isnetworks, or the only way to effectively distribute software to the large percentageconfidentiality of the United States population who own iPhonesour confidential or other information (including personal information), from cyberattacks and iPads. The iOS App Store review team is essentially a regulator for our product - they decide what rules all applications in the iOS App Store must operate byother unauthorizedaccess, disclosure, and how to enforce those regulations. The rules related to cannabis-related apps are not published, enforcement of those rules is difficult to predict, and the App review and appeal processes are conducted in secret without public oversight. MassRoots will continue to push for a more open and transparent app review process - especially when such policies and decisions directly impact a large portion of the population - but there is no guarantee we will be successful in those efforts.disruption.

MassRoots, along with most other cannabis apps, regularly encounter issues with the Google Play Store review team in the normal course of business due to Google Play Store’s absence of clear rules and guidelines regarding cannabis-related apps. On November 18, 2016, the MassRoots App was removed from the Google Play Store due to a compliance review. On March 21, 2017, Google Play approved the MassRoots App for distribution to Android devices through the Google Play Store once again.

On December 1, 2016, MassRoots’ Android application received approval from the Amazon App Store for listing, and is presently available for download on the Amazon App Store.

Under their respective developer license agreements, Apple, Inc., Google, Inc. and Amazon.com, Inc. have the right to update their iOS App Store, Play Store and Amazon App Store policies, respectfully, to prohibit cannabis-related applications at any time. This could result in many prospective users being unable to access and join our network and existing Users being unable to access our App.

Our activities outside of the application stores have also faced backlash and resistance due to our status as a cannabis-related company. For example, our Instagram account has a wide following of over 435,000 followers, one of the most of any cannabis related company, and we utilize this following to help expand our user-base. However, in a situation similar to the iOS App Store removal, our Instagram account (along with several other cannabis related accounts) was suspended in January 2016 without notice or explanation from Instagram. The account was later reinstated on February 26, 2016. While we feel that our platform is at the point where any potential suspension will not affect our User growth, we expect to continue to face similar situations in the future that may cause disruptions, if only temporary, to our business plan.

Market Conditions

ITEM 2. PROPERTIES

MassRoots

We lease our scrap yards located at: 22097 Brewers Neck Blvd., Carrollton, VA 23314; 1576 Millpond Rd., Elizabeth City, NC 27909, 130 Courtland Rd., Emporia, VA 23847; 623 Highway 903 N., Greenville, NC 27834; 8952 Richmond Rd., Toano, VA 23168; 945 NC 11N, Kelford, NC 27805; 1100 E Princess Anne Rd, Norfolk, VA 23504; 277 Suburban Drive, Suffolk, VA 23434; 9922 Hwy 17 S., Vanceboro, NC 28586;1040 Oceana Blvd, Virginia Beach, VA 23454; 406 Sandy Street, Fairmont, NC 28340, from DWM Properties, LLC, which is poised to take advantagecontrolled by the Company’s Chief Executive Officer, on a month-to-month basis for an aggregate of two rapidly growing industries: cannabis and mobile technology.$54,970 per month.

Cannabis Market Growth and Current TrendsWe lease office space at 505 Crawford Street, Portsmouth, VA 23704 for $1,185 per month. The lease expired on March 31, 2024.

Since the MassRoots app first launched in July 2013, there have been a series of events that have help further shape the development of the cannabis and mobile technology industries:

On August 29, 2013, Deputy Attorney General James Cole issued a memo (“The Cole Memo”) in response to certain states passing measures to legalize the medical and adult-use of cannabis. The Cole Memo does not alter the Department of Justice’s authority to enforce Federal law, including Federal laws relating to cannabis, regardless of state law, but does recommend that U.S. Attorneys to focus their time and resources on certain priorities, rather than businesses legally operating under state law. These guidelines focus on ensuring that cannabis does not cross state lines, keeping dispensaries away from schools and public facilities, and strict-enforcement of state laws by regulatory agencies, among other priorities.

On January 1, 2014, the first sales of cannabis for adult-use permissible under state law took place in Colorado. This event resulted in significant media coverage for the industry. Since that time, three other states and the District of Columbia have made adult-use permissible under their state law and several states have ballot proposals pending at upcoming elections.

On February 14, 2014, the Departments of Justice and Treasury issued a joint memo allowing banks and financial institutions to accept deposits from dispensaries operating legally under state law. In most cases, dispensaries had been forced to operate on a cash basis, presenting significant security and accounting issues. This was a major step in legitimizing and accepting the cannabis industry on a national level. Further, the passing of the Rohrabacher Farr Amendment (as defined below) in 2014 and 2015 indicates some level of support in Congress for medicinal cannabis, even if its actual effect is still undetermined.

For additional information concerning the Cole Memo, Rohrabacher Farr Amendment and regulatory conditions, see the section entitled “Business – Government Regulation.”

Current States With Laws Permitting the Medical or Adult Use of Cannabis

As of December 31, 2016, 28 states and the District of Columbia have passed laws allowing some degree of medical use of cannabis, while eight of those states and the District of Columbia have also legalized the adult-use of cannabis. The states which have enacted such laws are listed below:

* State has enacted laws permitting the adult use of cannabis, in addition to medical use.

Public Support for Legalization Increasing

A Quinnipiac poll conducted in February 2017 found that 93% of the American people supported legalizing the medicinal use of cannabis, 59% supported legalizing the adult-use of cannabis, and 77% of Americans were opposed to federal government interference with state marijuana programs.

A 2017 ArcView Market Research report predicts an additional 14 states will legalize the adult-use of cannabis and two states will legalize medical-use within the next five years. If public support for cannabis legalization continues to increase, we believe it is likely that Federal policies towards marijuana will be reformed. The combination of additional states legalizing adult-use under state law, expansion of medical-use provisions in states where it is currently permitted under state law and increased public awareness is projected to cause marijuana sales permitted under state law to grow from $1.43 billion in 2013 to $10.2 billion in 2018, according to ArcView Market Research.

Market Conditions that Could Limit Our Business

Cannabis is a Schedule I Controlled Substance under Federal law and, as such, there are several factors that could limit our market and our business. They include, but are not limited to:

Additional discussion of government regulations is available in the “Government Regulation” section below.

Fundraising and Previous Offerings

Since our inception, we have spent considerable effort on fundraising to support the operations of the Company.

In connection with an offering that occurred in October 2013, the Company filed an Amended and Restated Certificate of Incorporation which authorized the issuance of 21 shares of preferred stock (6,397,958 common shares post-Exchange, as defined below) with a par value of $1.00 per share, 17.65 shares (5,377,332 common shares post-Exchange) of which were designated as Series A Preferred Stock. Among other rights and privileges, holders of Series A Preferred Stock are entitled to a cumulative dividend of 7% annually, preferential payments over common stock in liquidation and other events, and the ability to convert their Series A Preferred Stock to common stock on a one to one basis (taking into account any unpaid dividends).

In October 2013,24, 2022, the Company entered into leasing agreements to issue 5.88, 5.88, and 5.89 Series A Preferred shares (1,791,428, 1,791,428, and 1,791,475 common shares post-Exchange) to Bass Point Capital, LLC, WM18 Finance LTD, and Rother Investments, LLC, respectively, in exchange for a $50,000 investment from each. In addition, the Company entered into an agreement to issue as compensation for services provided a total of 2.94 Series A Preferred shares (895,715 common shares post-Exchange) to Douglas Leighton for financial consulting services (collectively, the “Original Offering”).

The Reorganization and Exchange

In preparation for the March 2014 Offering (as defined herein) and the Company’s intention of becoming a publicly traded entity, on March 18, 2014 the Company entered into an Agreement and Plan of Reorganization with its shareholders in which the following was effected: (i) on March 21, 2014, the Company’s Amended and Restated Certificate of Incorporation was amended to allow for the issuance of 200,000,000 shares of the Company’s common stock and amended the par value of the Company’s common stock to $0.001 per share; (ii) on March 24, 2014, each of the Company’s preferred shareholders converted their shares into common stock on a one for one basis (including the accrued divided); and (iii) on March 24, 2014, each of the Company’s shareholders surrendered their shares of the Company’s common stock in exchange for the pro-rata distribution of 36,000,000 newly issued shares of Company’s common stock, based on the percentage of the total shares of common stock held by the shareholder immediately prior to the exchange (the “Exchange”).

The March 2014 Offering and Registration Rights

In March 2014, we raised gross proceeds of $475,000 through an offering of our securities to certain accredited and non-accredited investors consisting of: (i) $269,100 face amount of convertible debentures convertible into up to 2,691,000 shares of the Company’s common stock at $0.10 per share (the “2014 Debentures”), together with warrants, exercisable into an amount of our common stock equal to fifty percent (50%) of the common stock underlying the 2014 Debentures, at $0.40 per share (the “2014 Debenture Warrants”); and (ii) 2,059,000 shares of our common stock at $0.10 per share with a warrant, exercisable into an amount of our common stock equal to fifty percent (50%) of the common stock purchased, at $0.40 per share (the “2014 Common Stock Warrants”) (collectively, the “March 2014 Offering”). Five investors received 2014 Debentures and 2014 Debenture Warrants, while 36 accredited and unaccredited investors received the common stock and 2014 Common Stock Warrants. In July 2015, one investor exchanged 1,000,000 shares of our common stock for a warrant exercisable into 1,000,000 shares of our common stock at $0.001 per share, with materially the same terms as the $0.001 Consulting Warrants (as defined below).

In connection with the March 2014 Offering, we entered into certain registration rights agreements (the “Registration Rights Agreement”), whereby we agreed to use our commercially reasonable efforts to prepare and file a registration statement with the SEC within forty-five (45) days after March 24, 2014, covering all outstanding shares of common stock (including all shares of common stock sold in the March 2014 Offering), in addition to all shares of common stock underlying the 2014 Debentures, 2014 Debenture Warrants, and 2014 Common Stock Warrants.

Additionally, as payment for consulting services provided in relation to the March 2014 Offering, we issued Dutchess Opportunity Fund, II LP (“Dutchess”) a warrant exercisable into 4,050,000 shares of our common stock at $0.001 per share, and a warrant exercisable into 2,375,000 shares of our common stock at $0.40 per share. The Company also granted certain registration rights to Dutchess covering all shares of common stock issuable upon the exercise of each of the warrants it received in connection to the March 2014 Offering. As of December 31, 2016, all such warrants issued as payment for consulting services had been exercised.

On September 15, 2014, our resale registration statement on Form S-1 covering 50,400,000 shares of common stock outstanding or shares of common stock underlying warrants or debentures received in connection to the March 2014 Offering (“2014 Registration Statement”) became effective.

In March 2016, holders of the 2014 Debentures agreed to revise the maturity date of the 2014 Debentures from March 24, 2016 to March 24, 2018.

Between January 1, 2016 and December 31, 2016, holders of the 2014 Debenture Warrants and 2014 Common Stock Warrants exercised such warrants into 1,809,011 shares of the Company’s common stock, resulting in gross proceeds to the Company of $723,604.

Additional Offerings / Private Placements

From September 15, 2014 to March 11, 2015, we completed an offering of $861,000 of our securities to certain accredited and non-accredited investors consisting of 1,732,000 shares of our common stock at $0.50 per share and warrants to purchase up to 866,000 shares of common stock at $1 per share.

From April 1, 2015 through April 17, 2015, we completed an offering of 960,337 shares of the Company’s common stock to certain accredited and unaccredited investors, pursuant to which, the Company received gross proceeds of $576,200. The Company terminated this offering as of April 17, 2015. The Company compensated Chardan Capital Markets, LLC, its placement agent for the offering, $20,000 in cash and 262,560 shares of common stock as commission for this placement.

From June 10, 2015 through July 13, 2015, we sold 1,540,672 shares of unregistered common stock to certain accredited investors for gross proceeds of $1,140,502. In connection with this offering, Chardan Capital Markets LLC, its placement agent for the offering, received $27,200 in cash and 80,560 shares of the Company’s common stock as commission for this placement.  

On November 9, 2015, we sold 815,500 shares of common stock, with warrants to purchase 407,475 shares of common stock, in a registered offering to certain unaccredited and accredited investors for gross proceeds of $1,019,375 to the Company. We did not utilize a placement agent in this transaction. 

In December 2015, we issued 146,200 three year warrants with an exercise price of $1.06 to our holders of outstanding warrants issued in conjunction with our September 15, 2014 to March 11, 2015 offering. These warrants were issued in exchange for the holder agreeing to waive certain provisions providing price protection of the warrant received in the September 15, 2014 to March 11, 2015 offering. 

The March 2016 Note Offering

In March 2016, we completed a private offering (“March 2016 Note Offering”) to certain accredited investors of six (6) month secured convertible notes with a principal amount of $1,514,669 (the “Bridge Notes”) together with five year warrants to purchase an amount of shares of the Company’s common stock equal to the number of shares of common stock issuable upon the conversion of the Bridge Notes in full and having an exercise price of $1.00 per share. The Bridge Notes were secured by all the assets of the Company, and each of the executive officers of the Company entered into a lock-up agreement whereby they agreed to not sell or offer any shares of the Company’s common stock owned by them until the Bridge Notes were fully repaid, redeemed or converted. The Bridge Notes were convertible into shares of the Company’s common stock at a price per share equal to the lower of (i) one dollar ($1.00), and (ii) a 25% discount to the price at which the Company next conducts an offering after the issuance date of the Bridge Note; provided, however, if any part of the principal amount of the Bridge Note remains unpaid at its maturity date, the conversion price would be equal to 65% of the average of the three trading days with the lowest daily weighted average prices of the Company’s common stock occurring during the fifteen days prior to the Bridge Note’s maturity date.

On September 14, 2016, upon maturity of the Bridge Notes, the Company was unable to make the required payment of the then outstanding aggregate principal amount of $966,384 and was in default under the Bridge Notes. Because the Bridge Notes were not repaid by the maturity date, the investors became entitled to receive, in aggregate, but calculated pro rata to the principal amounts remaining outstanding at the time of maturity, up to five hundred thousand (500,000) shares of the Company’s common stock. Gross proceeds received by the Company for the Bridge Notes and warrants in the March 2016 Note Offering were $1,420,000, while net proceeds were $1,271,600 (excluding any legal fees). In connection with the March 2016 Note Offering, Chardan Capital Markets LLC, our placement agent for the offering, received $123,400 in cash as commission for this placement.

On October 7, 2016, the Company announced that the Company had completed the repayment to the holders of all outstanding principal and other amounts due pursuant to the March 2016 Note Offering. In total, the Company made payment to the holders of (i) an aggregate of $1,479,298 in cash and (ii) pursuant to the right of conversion of the notes, issued an aggregate of 2,377,861 shares of the Company’s common stock at a conversion price equal to 65% of the average of the three trading days with the lowest daily weighted average prices of the Company’s common stock occurring during the fifteen days prior to September 14, 2016. The Company believes that it has completed all of its obligations under the Bridge Notes and is no longer in default under the Bridge Notes or any related agreements. The Bridge Notes are now retired.

Our 2016 Direct Registered Offering

From August 12, 2016 to October 21, 2016, Company completed it registered direct offering to certain investors pursuant to which we raised an aggregate in $5,000,000 in gross proceeds from the sale of shares of the Company’s common stock, together with warrants, with one warrant entitling the holder to purchase one share of common stock at a price equal to $0.90 per share (the “2016 Direct Registered Offering”). The purchase price paid by investors was $0.50 for one share of common stock and one warrant. The warrants are immediately exercisable and expire three years from the date of issuance. The shares of common stock and warrants are immediately separable and are issued separately. This offering was closed on October 21, 2016. A total of 10,000,000 shares of common stock and warrants to purchase a total of 10,000,000 shares of common stock were sold in the offering and have been or will be issued pursuant to the Prospectus dated August 12, 2016, as amended on August 19, 2016 and October 5, 2016.

NASDAQ Application and Withdrawal

On August 20, 2015, we applied to have our common stock listed on the NASDAQ Capital Market (“NASDAQ”). In connection to this application, we also received approval from our shareholders to effect a reverse stock split in order to meet the initial listing requirements of NASDAQ.

While we believe the Company would meet the NASDAQ listing requirements, on May 23, 2016, the Company received preliminary notice that its application for listing had been denied. While not confirmed in writing by NASDAQ, the Company believes that this preliminary denial was at least partially related to the cannabis-related nature of our business. On June 7, 2016, the Company formally withdrew its application to list on NASDAQ and reaffirmed its focus on its core business. The Company will continue to evaluate the potential for filing a new application with NASDAQ or other securities exchange going forward; however, there can be no assurance that the Company will ever decide to file a new application, or, even if a new application is filed, that the Company will ever be successful in having its shares listed on a securities exchange.

Employees and Consultants

MassRoots has 31 full-time employees, two part time employees, and one full time independent contractor.

Government Regulation

Marijuana is a categorized as a Schedule I controlled substance by the Drug Enforcement Agency and the United States Department of Justice and is illegal to grow, possess and consume under Federal law. However, 28 states and the District of Columbia have passed state laws that permit doctors to prescribe cannabis for medical-use and eight states and the District of Columbia have enacted laws that legalize the adult-use of cannabis for any reason. This has created an unpredictable business-environment for dispensaries and collectives that legally operate under certain state laws but in violation of Federal law.

Cole Memo

On August 29, 2013, United States Deputy Attorney General James Cole issued the Cole Memo to United States Attorneys guiding them to prioritize enforcement of Federal law away from the cannabis industry operating as permitted under certain state laws, so long as:

The Cole Memo is meant only as a guide for United States Attorneys and does not alter in any way the Department of Justice’s authority to enforce Federal law, including Federal laws relating to cannabis, regardless of state law. We believe we have implemented procedures and policies to ensure we are operating in compliance with the “Cole Memo”. However, we cannot provide assurance that our actions are in full compliance with the Cole Memo or any other laws or regulations. Per MassRoots’ Terms and Conditions:

We have implemented an aggressive content and account review program to ensure compliance with our Terms and Conditions. Users have the ability to report any status or account that is in violation of our terms and we encourage Users to do so as any illegal content jeopardizes the network for all our Users. When a status or account is reported, the post is automatically removed from the network until further review. A MassRoots employee then reviews the content within 24 hours and either approves it as within our Terms and Conditions or permanently deletes it and bans the User account.

In addition, as part of the agreement to allow our app to return to the Apple App Store, we implemented restrictions to restrict new Users to our mobile apps to the 28 states with medical cannabis laws.

Our business plan includes allowing cannabis dispensaries to advertise on our network which we believe could be deemed to be aiding and abetting illegal activities, a violation of Federal law. We intend to remain within the guidelines outlined in the Cole Memo. However, we cannot provide assurance that we are in full compliance with the Cole Memo or any other laws or regulations.

Rohrabacher Farr Amendment

On December 16, 2014, H.R. 83 - Consolidated and Further Continuing Appropriations Act, 2015 was enacted and included a provision known as the “Rohrabacher Farr Amendment” which states:

None of the funds made available in this Act to the Department of Justice may be used, with respect to the States of Alaska, Arizona, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Hawaii, Illinois, Iowa, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nevada, New Hampshire, New Jersey, New Mexico, Oregon, Rhode Island, South Carolina, Tennessee, Utah, Vermont, Washington, and Wisconsin, to prevent such States from implementing their own State laws that authorize the use, distribution, possession, or cultivation of medical marijuana.

The Rohrabacher Farr Amendment represents one of the first times in recent history that Congress has taken action indicating support of medical cannabis. The Rohrabacher Farr Amendment was renewed by Congress in 2015 and remains in effect currently.

The Rohrabacher Farr Amendment would appear to protect the right of the states to determine their own laws on medical cannabis use; however, the actual effects of the amendment are still unclear. The Rohrabacher Farr Amendment did not remove the federal ban on medical cannabis and cannabis remains regulated as a Schedule I controlled substance. Further, the United States Department of Justice has interpreted the Rohrabacher Farr Amendment as only preventing federal action that prevents states from creating and implementing cannabis laws - not against the individuals or businesses that actually carry out cannabis laws – and has continued to sporadically commence enforcement actions against individuals or businesses participating in the cannabis industry despite such participation being legal under state law. Whether this interpretation is appropriate is still being litigated, and, while an initial district court decision has not supported the Department of Justice’s interpretation, such decision is currently under appellate review. In addition, no matter what the interpretation is adopted by the courts, there is no question that the Rohrabacher Farr Amendment does not protect any party not in full compliance with state medicinal cannabis laws.

Potential Changes to Federal Laws and Enforcement Priorities

Although the Department of Justice has stated in the Cole Memo that it is not an efficient use of limited resources to direct federal law enforcement agencies to prosecute those lawfully abiding by state laws allowing the use and distribution of medical cannabis, there is no guarantee that the Department of Justice’s position will not change regarding the low-priority enforcement of federal laws. However, the United State Department of Justice is now under new leadership following the 2016 election. The new administration could introduce a less favorable cannabis enforcement policy. To date, the new administration has not affirmed or altered the policies outlined in the Cole Memo. There can be no assurances that the new administration or any future administration would not change the current enforcement policy and decide to strongly enforce the federal laws.

In light of the 2005 U.S. Supreme Court ruling inGonzales v. Raich, under the commerce clause of the constitution, Congress may pass laws to criminalize the production and use of home-grown cannabis even where states have approved its use for medicinal purposes, which leads to the conclusion that the Controlled Substances Act may preempt state laws relating to any cannabis-related activity. Any such change in the federal enforcement program of current federal laws could cause significant financial damage to our business. While we do not directly harvest or distribute cannabis today, we still may be deemed to be violating federal law and may be irreparably harmed by a change in enforcement by the federal or state governments.

Trademarks

On March 31, 2014, we applied for a trademark of the “MassRoots, Inc.” name in the United States. However, several factors, including the Company’s app being removed from Apple’s iOS App Store, required the Company to focus its resources in other areas, away from completing the trademark application process, and the trademark application was deemed to be abandoned. The Company reapplied for this trademark in 2016, and is currently responding to staff comments on its application.

Competitors, Methods of Completion, Competitive Business Conditions

MassRoots competes with cannabis information platforms such as WeedMaps and Leafly. All of these services and MassRoots provide information on dispensary locations, strain information, and news relating to the cannabis industry. MassRoots’ primary competitive advantage is the social aspects of our platform – Users have profiles, build an online personality and preferences, and follow other Users with similar interests.

Network effects have come to dominate consumer habits, which can provide protection to networks such as MassRoots. For example, Google+ failed to obtain a dominant market share in desktop-based social networking because it wasn’t introduced until Facebook had already conquered the market. Similarly, when Facebook introduced Poke as a competitor to SnapChat in late 2012, it failed to overtake SnapChat due to the market dominance already achieved by SnapChat. Even if a well-financed competitor to MassRoots were to emerge, they would not only have to convince Users on why their platform is superior, but also get them to switch away from the network their friends are already using. Every User that MassRoots gains, every interaction that takes place on our network and every day that we grow, the barrier to entry to competitors becomes higher.

Legal Proceedings

We are not currently a party to any legal proceedings, and we are not aware of any pending or potential legal actions.

Sources and Availability of Raw Materials

We do not use raw materials in our business.

Seasonal Aspect of our Business

None of our products are affected by seasonal factors.

Reports to Security Holders

We are required to file reports and other information with the SEC. You may read and copy any document that we file at the SEC’s public reference facilities at 100 F. Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-732-0330 for more information about its public reference facilities. Our SEC filings are available to you free of charge at the SEC’s web site at www.sec.gov. We are an electronic filer with the SEC and, as such, our information is available through the Internet site maintained by the SEC that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC. This information may be found at www.sec.gov and posted on our website at investors.massroots.com.

ITEM 1A. RISK FACTORS

As a “smaller reporting company”, we are not required to provide the information required by this Item.

ITEM 1B. UNRESOLVED STAFF COMMENTS

As a “smaller reporting company”, we are not required to provide the information required by this Item.

ITEM 2. PROPERTIES

On April 14, 2015, the Company completed the relocation of its headquarters to 1624 Market Street, Suite 201, Denver, CO 80202 which we leased on March 20, 2015 pursuant to a lease agreement with RVOF Market Center, LLC (“201 Lease”). Under the 201 Lease, we agreed to rent 3,5523,521 square feet of office space at that location for a termcommencing upon the completion of 37 months, undertenant improvements which is expected to be on April 1, 2022 but shall be no later than May 1, 2022 (“Commencement Date”). Under the terms of the lease, the Company paid a base rate of $0is required to pay $3,668 for the first month, $8,288twelve months of the lease and increasing by approximately 3% every 12 months thereafter until the expiration of the lease. The lease is for monthsa period of five years from the Commencement Date and the Company was required to make a security deposit of $3,668. The Company does not have an option to extend the lease.

We own the property underlying our scrap yard located at 4091 Portsmouth Blvd., Portsmouth, VA 23701. Further, we own properties located at 278 and 276 Suburban Drive, Suffolk, VA 23434 and 4087, 4089, 4091, 4103, 4105 and 4117 Portsmouth Blvd, Portsmouth, VA 23701.

We lease the property located at 101 Freeman Ave, Chesapeake, VA 23324 as a yard for our truck fleet from DWM Properties, LLC, which is controlled by the Company’s Chief Executive Officer, on a month-to-month basis for $9,000 per month. The lease expires on January 1, 2025 and the Company has two through 13, $8,584options to extend the lease by 5 years per option. The Company also has the option to extend the term of the lease for an additional year for the months 14 through 25,next 5 years upon the same terms and $8,880conditions. In the event the Company does not exercise the options, the lease will continue on a month-to-month basis. The Company cannot sublease the property under the lease agreement.

On March 15, 2024, the Company entered into leasing agreements for the months 25 through 37. We did not incur a significant cost related to the move to this location.

We amended this lease in January 2016 to include Suite 203, alsoscrap yard located at 1624 Market3030 E 55th Street, in Denver, CO 80202, which allowed us to expand our headquarters by an additional 1,508 square feetCleveland, OH 44127. Under the terms of office space. For this expansion (and in addition to the rent paid under the 201 Lease), we paid $0 until May 30, 2016, $3,644 for each month from June 1, 2016 to May 30, 2017, $3,770 for each month from June 1, 2017 to May 30, 2018, and $3,896 for each month from June 1, 2018 to November 30, 2018. Pursuant to the amendment, the lease, on Suite 201the Company is required to pay $17,000 from March 1, 2024 to February 28, 2025; $23,000 from March 1, 2025 to February 28, 2026; $23,000 from March 1, 2026 to February 28, 2027; $23,000 from March 1, 2027 to February 28, 2028; and increasing by the greater of 3% and the CPI every 12 months thereafter until the expiration of the lease. The lease is for a period of five years, include two options to extend for five years each, and the Company was also extendedrequired to November, 30, 2018.make a security deposit of $17,000. The Company has the option to purchase the property for $3,277,000 until February 28, 2024.

We do not own any properties or land.

We believe that our facilities are adequate for our current needs and that, if required, we will be able to expand our current space or locate suitable new office space and obtain a suitable replacement for our executive and administrative headquarters.

ITEM 3. LEGAL PROCEEDINGS

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 3. LEGAL PROCEEDINGS

On December 1, 2020, Sheppard, Mullin, Richter & Hampton LLP (“Sheppard Mullin”), the Company’s former securities counsel, filed a demand for arbitration at JAMS in New York, New York against the Company, alleging the Company’s breach of an engagement agreement dated January 4, 2018, and a failure of the Company to pay $487,390.73 of outstanding legal fees to Sheppard Mullin. Sheppard Mullin was awarded $459,250.88 in unpaid legal fees, disbursements and interest on June 25, 2021. A judgement confirming the arbitration award was entered on September 8, 2021 in the Federal District Court located in Denver, Colorado.

On September 23, 2021, the Company entered into a Resolution Agreement and Release (the “Resolution Agreement”) with Sheppard Mullin concerning the $459,250.88 judgement entered against the Company. Under the terms of the Resolution Agreement, the Company was required to make a $25,000 initial payment by September 30, 2021 and is required to make $15,000 monthly payments from October 2021 to January 2023 with a final $10,000 payment due in February 2023. The Company has made all of its required payments under the Resolution Agreement.

We are unable to estimate a reasonably possible loss or range of loss, if any, that may result from these matters.

From time to time, we may be involved in legal proceedings arising in the ordinary course of our business. We investigate these claims as they arise and accrue estimates for resolution of legal and other contingencies when losses are probable and estimable. Regardless of outcome, litigation can have an adverse impact on us due to defense and settlement costs, diversion of management resources, negative publicity and reputational harm, and other factors.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDERSTOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market InformationTrading Symbol

SinceFrom April 9, 2015 to October 16, 2019, our common stock has beenwas quoted on the OTCQB under the symbol “MSRT”. Trading in“MSRT.” From October 17, 2019 to February 25, 2022, our common stock was quoted on the OTC Pink Tier of the OTC Markets under the symbol “MSRT.” From February 28 to March 24, 2022, our common stock was quoted on the OTC Pink Tier of the OTC Markets under the symbol “MSRTD.” From March 25, 2022 to July 21, 2022, our common stock was quoted on the OTC Pink Tier of the OTC Markets under the symbol “GWAV.” Since July 22, 2022, our common stock has historically lacked consistent volume, andbeen traded on Nasdaq under the market price has been volatile.symbol “GWAV.”

The following table presents, for the periods indicated, the high and low sales prices of the Company’s common stock,Common Stock, and is based upon information provided by the OTCQB Marketplace.OTC Marketplace and Nasdaq, as applicable. These quotations below reflect inter-dealer prices, without retail mark-up, mark-down, or commission, and may not necessarily represent actual transactions.

Holders

The last reported sale price of Common Stock as of April 15, 2024 on Nasdaq was $0.1177 per share.

Holders

As March 20, 2017,of April 15, 2024, there were 111 shareholders131 stockholders of record per the Company’s transfer agency’s listing of shareholders.record. The number of record holders was determined from the records of our transfer agent and does not include beneficial owners of common stockCommon Stock whose shares are held in the names of various security brokers, dealers, and registered clearing agencies. The transfer agent of our common stockCommon Stock is PacificEquity Stock Transfer, Company, located at 173 Keith Street, Suite 3, Warrenton, Virginia 20186.237 W. 37^th St. #602, New York, NY 10018.

Dividend Policy

We have notnever declared or paid any cash or stock dividends on our common stock and have no present intention ofdo not anticipate paying any dividends on the shares of our common stock.stock in the foreseeable future. Our current policy is to retain earnings, if any, for use in our operations and in the development of our business. OurAny future dividend policydetermination to declare dividends on common stock will be determined from time to time bymade at the discretion of our Board of Directors.Directors and will depend on our financial condition, operating results, capital requirements, general business conditions and other factors that our Board of Directors may deem relevant.

Recent Sales of Unregistered Securities

On January 25, 2017, in connection with the Whaxy Merger,From March 18 to March 26, 2024, the Company issued 2,926,82913,772,394 shares for the exercise of its common stock pro ratawarrants for proceeds of $2,809,568. The Company issued 27,544,788 Inducement Warrants to all stockholdersthe existing warrant holders who exercised during the inducement period.

On March 29, 2024, the Company entered into an exchange agreement with DWM Properties LLC (the “Holder”), whereby the Company and Holder agreed to exchange $10,000,000 of DDDigtal, in exchangethat certain Secured Promissory Note, dated July 31, 2023, issued by the Company to the Holder for all of their shares of common stock of DDDigtal, now our wholly-owned subsidiary.

From October 10 to November 10, 2016, holders of our $0.50 financing warrants, issued pursuant to our March 2016 Note Offering, exercised 1,510,000 warrants on a cashless basis into 633,774 shares of the Company’s common stock.

From August 24 to September 30, 2016, a service provider to the Company converted $35,000 of anewly created Series D Convertible Preferred Stock (the “Preferred Stock”). The Preferred Stock is convertible debenture issued for services into 84,385 shares of the Company’s common stock.

From September 15, 2016stock at $0.204 per share, subject to October 6, 2016,adjustment as set forth therein, except the Preferred Stock is not convertible until such time as the currently outstanding senior secured indebtedness of the Company issued 2,377,861has been satisfied in full. In addition, the Company has the right to redeem the Preferred Stock in cash or shares of its common stock to holders of the Bridge Notes issued in the March 2016 Note Offering, in satisfaction of its debt obligations.Common Stock.

Securities Authorized for Issuance Under Equity Compensation Plans

ITEM 6. SELECTED FINANCIAL DATARESERVED.

As a “smaller reporting company”, we are not required to provide the information required by this Item.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the consolidated financial statements and the notes thereto included elsewhere in this report.Annual Report on Form 10-K. The following discussion containsand other sections of this Annual Report contain forward-looking statements that reflectinvolve risks and uncertainties, such as our plans, objectives, expectations, intentions, estimates and beliefs. Our actual results could differ materially from those discussed in thethese forward-looking statements. Factors that could cause or contribute to these differences include, but are not limited to, those identified below and those discussed below and elsewhere, particularly in the section titled “Risk Factors” section of the Company’s prospectus, dated and filed with the SEC on August 11, 2016.Factors.” You should also carefully read “Special Note Regarding Forward-Looking Statements”.

Overview

MassRoots, Inc. is a Delaware corporationWe were formed on April 26, 2013. Our principal place of business is located at 1624 Market Street, Suite 201, Denver, CO 80202, our telephone number is (720) 442-0052 and2013 as a technology platform developer under the name MassRoots, Inc. In October 2021, we changed our corporate website is www.MassRoots.com/Investors.name from “MassRoots, Inc.” to “Greenwave Technology Solutions, Inc.” We sold all of our social media assets on October 28, 2021 for cash consideration equal to $10,000 and discontinued all operations related to our social media business. On September 30, 2021, we closed our acquisition of Empire Services, Inc. (“Empire”), which operates 13 metal recycling facilities and 1 metal processing facility in Virginia, North Carolina, and Ohio. The informationacquisition was deemed effective October 1, 2021 on our website, mobile apps,the effective date of the Certificate of Merger in Virginia.

Upon the acquisition of Empire, we transitioned into the scrap metal industry which involves collecting, classifying and blog is not a partprocessing appliances, construction material, end-of-life vehicles, boats, and industrial machinery. We process these items by crushing, shearing, shredding, separating, and sorting, into smaller pieces and categorize these recycled ferrous, nonferrous, and mixed metal pieces based on density and metal prior to sale. In cases of this Annual Report on Form 10-K.

As discussed inscrap cars, we remove the Notescatalytic converters, aluminum wheels, and batteries for separate processing and sale prior to shredding the Financial Statements, the Company has experienced recurring losses and negative cash flows from operations since inception.vehicle. We have relied on equity financingdesigned our systems to fund operations. There can be no guarantee that we will ever become profitable, or that adequate additional financing will be realizedmaximize the value of metals produced from this process.

We operate an automotive shredder at our Kelford, North Carolina location and a second automotive shredder at our Carrollton, Virginia is expected to come online in the future or otherwise may not be available to us on acceptable terms, or at all. If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce or eliminate our development efforts. We will need to generate significant revenues to achieve profitability and we may never do so. These factors raise substantial doubt about the Company’s ability to continue as a going concern. We have been implementing our strategic plan, as set forth below, on which we believe we will be able to continue operations and become profitable in the future.

Revamped MassRoots for Business Portal

We originally introduced MassRoots for Business in early 2015 as an online portal for businesses to schedule posts and view analytics; while useful for businesses, it did not have the features or capacity to scale to millions of dollars in revenue. Simultaneously with our migration from Parse, MassRoots began developing a new business portal directly on Amazon Web Services that took into account the feedback and research we received from over 2,500 cannabis-related businesses over the past year.

When fully developed, the revamped MassRoots for Business portal will consolidate many online marketing functions for cannabis-related businesses in one central platform. We expect businesses will be able to schedule posts on MassRoots, Facebook and Twitter; purchase advertising on both MassRoots owned-properties as well as third party digital properties; and view actionable, real-time data from MassRoots and third party sources in easy-to-read formats. We believe this will serve as a solid foundation for future business-related features as we prepare to integrate dispensary point-of-sale data later this year.

We believe that MassRoots can reach profitability from its current User-base and web traffic. We are focused on including features in our app and website that they previously lacked, including the ability to connect Users with the dispensaries and products for which they are looking. We believe that our dispensary finder is a solid first step in fixing this deficiency and product pages with live menu pricing will mostly resolve the problem by the end of the the second quarter of 2017.2023. Our shredders are designed to produce a denser product and, in concert with advanced separation equipment, more refined recycled ferrous metals, which are more valuable as they require less processing to produce recycled steel products. In totality, this process reduces large metal objects like auto bodies into baseball-sized pieces of shredded recycled metal.

The Teamshredded pieces are then placed on a conveyor belt under magnetized drums to separate the ferrous metal from the mixed nonferrous metal and residue, producing consistent and high-quality ferrous scrap metal. The nonferrous metals and other materials then go through a number of additional mechanical systems which separate the nonferrous metal from any residue. The remaining nonferrous metal is further processed to sort the metal by type, grade, and quality prior to being sold as products, such as zorba (mainly aluminum), zurik (mainly stainless steel), and shredded insulated wire (mainly copper and aluminum).

MassRootsEmpire is headquartered in Chesapeake, Virginia and has 31131 full-time employees working outas of headquarters in downtown Denver, Colorado. The majority of these employees are engineers focused on developing new features for the MassRoots platform. We believe that over the long run, a small, talented and close knit team will outperform larger teams. We believe we have found talented individuals at every level – sales representatives who outperform expectations; managers who make architectural decisions that will prevent costly and time-consuming blunders; and engineers developing new features that have the potential to provide significant long term returns.April 15, 2024.

One

Competitors

We compete with other metal recycling facility operators, such as Radius Recycling (f/k/a Schnitzer Steel Industries), and are focused on utilizing technology to create operating efficiencies and competitive advantages over our peers.

Results of MassRoots’ top prioritiesOperations For the Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022

Revenues

For the year ended December 31, 2023, we generated $35,667,982 in 2016 has been recruiting and retaining somerevenues, as compared to $33,978,425 for the year ended December 31, 2022, an increase of $1,689,557. This increase was driven by hauling revenues growing to $10,156,938 for the top talentyear ended December 31, 2023 from $338,687 for the year ended December 31, 2022, an increase of $9,818,251 attributable to an increase in the cannabis and technology industries. In June 2016, we hired Lance Galeynumber of clients as MassRoots’ Chief Technology Officer. Previously, Mr. Galey servedwell as Chief Software Architectan increase in the number of Cloud Services for Autodesk and Vice President and Principle Architect at Salesforce, where he ledtrucks operated by the architecture and development of numerous core infrastructure and platform services underlying a large portfolio of Salesforce SaaS applications. In 2013, he was selected as the executive MVPCompany. Metal revenues decreased from $33,386,586 for the technology divisionyear ended December 31, 2022 to $25,350,883 for the year ended December 31, 2023, a decrease of Salesforce.com.$8,035,703 due to a decline in commodity prices. There was other revenue, compromised rental income for the Portsmouth Blvd property, of $132,640 and other income for $27,522 for the year ended December 31, 2023, as compared to $48,813 and $204,339 for the same period in 2022, a decline of $92,990.

StateCost of revenues

Our cost of revenues decreased to $21,184,579 for the year ended December 31, 2023 from $21,537,572 during the same period in 2022, a decline of $352,993 due to lower metal prices, offset by an increase in hauling costs. Hauling costs increased to $4,996,871 for the year ended December 31, 2023 from $77,437 during the same period in 2022, an increase of $4,919,434, due to an increased truck fleet. Metal costs declined from $20,936,102 during the year ended December 31, 2022 to $16,154,529 during the same period in 2022, a decrease of $4,781,573 due to a decline in commodity prices. There was cost of revenue of $33,179 for the year ended December 31, 2023, comprised mostly of sand, compared to $524,033 during the same period in 2022, a decrease of $490,854.

Gross profit

Our gross profit was $14,483,403 during the year ended December 31, 2023 as compared to $12,440,853 during the same period in 2022, an increase of $2,042,550, due to healthier margins in both hauling and National Brand Business Model

While MassRoots’ consumer-facing network launchedscrap metal. Our gross margins increased to 41% during the year ended December 31, 2023 from 37% during the same period in July 2013, we did not start generating advertising revenue until we crossed a half million Users in mid-August 2015. Our clients have primarily been ancillary businesses marketing their products to cannabis consumers through endorsed posts on MassRoots, sponsored content on our blog, and mentions in our email newsletter. It is not necessary for a User to join MassRoots in order for us to generate revenue from them – we are finding that many people will visit our website, join our email newsletter, or view a dispensary’s profile without registering for our MassRoots network.

While the vast majority of MassRoots’ advertising revenue to date has come from brands within the cannabis industry, we have started to see significant interest from mainstream brands and advertising agencies looking to market to cannabis consumers. Uber and Fusion, a division of Univision, became the first mainstream brands to advertise with MassRoots and have opened the doors for other major brands to evaluate the space. We believe that as the regulated cannabis market continues to expand, mainstream brands and advertising agencies will begin to allocate portions of multi-million advertising budgets towards outreach to the millions of cannabis consumers in the United States – especially food, lighter and agricultural brands. We are positioning MassRoots to be one of the first companies to receive these budget allocations.

2016 Elections

On November 8, 2016, voters in California, Nevada, Maine and Massachusetts voted to regulate the production and sale of cannabis for recreational purposes while Florida, North Dakota, Arkansas and Montana voters authorized its medical use. According to ArcView Market Research, these initiatives will cause the regulated cannabis industry to expand from roughly $6 billion in 20162022 due to more than $23 billion once these initiatives take effect.

Our business model is designedan emphasis on operational efficiency. Gross profit on hauling grew from $261,250 during the year ended December 31, 2022, a margin of 77.14% to benefit from this trend. When a new state passes a medical or recreational cannabis law, we are able to start registering users and businesses in that state with minimal marginal cost. Because MassRoots is not involved in the production or sale of cannabis, we do not have to build outgrow operations, open retail stores, or have a significant physical presence in the state in order to generate revenue. At$5,160,067 during the same time, MassRoots’ financial model is not tiedperiod in 2023, a margin of 50.80%, an increase of $4,898,817. Gross profit on metal fell to $9,196,354 during the successyear ended December 31, 2023, or 36.28%, from $12,450,484 during the same period in 2022, or 37.29%, a decline of a particular location or brand – we believe we will have a significant percentage of all dispensaries and brands on our platform, making MassRoots a play on the industry as a whole.$3,254,130

Sitting at the intersection of healthcare on the medical cannabis side and a vice industry on the recreational cannabis side, we believe the cannabis industry can continue to grow in any economic climate.

Competition

As more of our localized advertising features come online throughout 2017, we are competing with dispensary locators and strain guides, such as WeedMaps and Leafly, for dispensaries’ advertising budgets.

Results Of Operations

Since inceptionOperating Expenses

For the years ended December 31, 2023 and 2022, our operating expenses were $33,998,165 and $23,323,774, respectively, an increase of $10,674,391. This increase was mainly attributed to the increase in our hauling fleet, which significantly expanded our operations, number of employees, and internal systems, along with a one-time loss on April 26, 2013,asset charge. There was a decrease in payroll and related expenses of $356,295 as payroll and related expenses were $6,634,800 for 2023 as compared to $6,991,095 for the same period in 2022, which was the result of the Company’s Chief Executive Officer waiving his quarterly bonuses. Advertising expense increased by $330,201 to $414,194 for 2023 as compared to $83,993 for 2022 as the Company focused its resources on its scrap metal operations. Depreciation and amortization of intangible assets increased by $1,753,476 to $5,814,880 for 2023 from $4,061,404 in 2022 as a result of the Company acquiring additional fixed assets. There were hauling and equipment maintenance costs of $2,898,202 in 2023, as compared to $3,378,452 in 2022, a decrease of $480,250, due to the Company recognizing more of these expenses as cost of revenue. Consulting, accounting, and legal expenses increased to $1,713,613 during the year ended December 31, 2016, our business operations have been primarily focused developing our mobile applications, web platform and increasing our User-base.

Revenues

Since beginning2023 from $897,981 during the same period in 2022, an increase of $815,632 due to monetize our platform in August 2015, we have generated minimal revenues from our operations. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishmentCompany conducting capital raises. There was a loss on asset of a new business enterprise, including the financial risks associated with the limited capital resources currently available to us, and risks associated the implementation of our business strategies.

For$10,048,308 during the year ended December 31, 2016, we generated $701,581 in total revenues,2023 as compared to $213,963 for$0 during the same period in 2022, an increase of $10,048,308. There was a decrease in rent expenses as a result of new leases and termination of existing leases, declining $362,032 from $3,464,516 during the year ended December 31, 2015,2022 to $3,102,484 during the same period in 2023. There was common stock issued for services of $171,239 during the year ended December 31, 2023 as compared to $0 during the same period in 2022, an increase of $487,618. This revenue was primarily generated from advertising sales. Of our $701,581 in 2016 revenues, $669,778, or 95% was generated from advertising services. Our User-base averaged roughly 850,000 Users$171,239. There were impairments of goodwill of $0 during this time period, equating to an average of $0.78 in revenue per User during 12 months of monetization.

Operating Expenses

Our cost of revenues increased $122,816 during 2016, from $57,611 during fiscalthe year 2015 to $180,427 during fiscal year 2016. This increase was mainly a result of higher sales and merchandise activity in 2016.

We incurred $985,342 in advertising expenses during fiscal year 2016, an increase of $267,569, from $717,773 in fiscal year 2015. This increase was mainly a result of increased marketing in 2016.

Payroll and related expenses increased $731,808 to $2,112,879 during fiscal year 2016 from $1,381,071 during fiscal year 2016. This increase was mainly a result of added personnel in 2016.

Over the course of fiscal year 2016, we issued $4,199,906 in common stock for services,ended December 31, 2023, as compared to $1,219,904$2,499,753 during fiscal year 2015, an increase of $2,980,002. This increase was mainly a result of a combination of additional consultants added for our business development and higher valuation of our stock price.

Options issued for services also increased during fiscal year 2016 to $3,112,156 from $1,273,483 during 2015, an increase of $1,838,673. This increase was mainly a result of compensation to employees past services. We saw a decreasethe same period in the value of warrants issued for services from $229,365 during 2015 to $68,369 during 2016,2022, a decrease of $160,996.$2,499,753.

MassRoots’Our other general and administrative expenses increased to $3,644,881$3,200,445 for the year ended December 31, 2023 from $1,946,580 for the year ended December 31, 2022, an increase of $1,253,865, as a result of the Company’s operations expanding.

The increase of these expenditures resulted in our total operating expenses increasing to $33,998,165 during the year ended December 31, 2023 compared to $23,323,774 during the year ended December 31, 2022, an increase of $10,674,391.

Loss from Operations

Our loss from operations increased $8,631,841 to $19,514,762 during the year ended December 31, 2023, from $10,882,921 during the year ended December 31, 2022.

Other Income (Expense)

During the year ended December 31, 2023, we incurred other expenses of $7,421,228, as compared to $24,160,368 for the year ended December 31, 2022, a decrease of $16,739,140. There was a gain on settlement of convertible notes payable and accrued interest, warrants and accounts payable and cancelation of common shares in exchange for Series Y and Series Z preferred shares and cash of $632,540 and $516,920 for the years ended December 31, 2023 and 2022, respectively. We did not realize any gain or loss on the conversion of convertible Notes during the year ended December 31, 2023 while we realized a $2,625,378 gain on the conversion of convertible notes during in the same period in 2022. In addition, interest expense increased to $(8,897,267) during fiscal year 2016 from $1,459,9462023 as compared to $(34,079,230) during fiscal year 2022. We did not have a warrant expense for a liquidated damages settlement during the year ended December 31, 2023, while we incurred an expense of $7,408,681 for the same during the year ended December 31, 2022. There was neither a gain nor loss in 2016, an increasethe fair value of $2,184,935. This increasederivative liabilities during the year ended December 31, 2023, as compared to a gain of $14,264,476 during the same period in 2022. There was attributedother gain of $17,572 during the year ended December 31, 2023, as compared to other loss of $(79,231) during the following:year ended December 31, 2022. There was gain on lease termination of $108,863 during the year ended December 31, 2023 as compared to $0 during the same period in 2022. Lastly, there was a gain on tax credit of $717,064 during the year ended December 31, 2023 as compared to $0 during the same period in 2022.

The combination of these increasing expenditures resulted in MassRoots’ total operating expenses growing to $14,303,960 in fiscal year 2016 versus $6,339,063 in 2015, an increase of $7,964,897.

Loss from Operations

MassRoots’ Loss from Operations increased $7,477,279 to $13,602,379 during fiscal year 2016, from $6,125,100 during fiscal year 2015.

Other Income (Expense)

During the fiscal years ended 2016 and 2015, the Company realized losses related to the fair value mark to market adjustments of its derivative liabilities of $581,912 and $2,236,401, respectively.

During the fiscal years ended 2016 and 2015, interest expense increased to $3,845,833 during fiscal 2016 from $111,397 during fiscal 2015, an increase of $3,734,436. This increase is mainly from non-cash interest and penalty charges relating to our 2016 issued convertible debt of $1,265,376 and $763,872, respectively and amortization of debt discounts. For the fiscal years ended 2016 and 2015, the Company recorded amortization of discount on notes payable of $1,549,669 and $107,016, respectively.

Net Loss available to common stockholders

Our net loss increased $9,557,226available to $18,030,124shareholders decreased by $30,262,186 to $33,597,142 during fiscal year 2016, from $8,472,898 during fiscal year 2015.

Liquidity And Capital Resources

Net cash used in operations for the year ended December 31, 2016 and December 31, 2015 was $6,182,816 and $3,129,240, respectively. This increase was primarily caused by a widening net loss in the Company’s operations, an increase in the value of options issued to employees, and the interest charged on the Company’s March 2016 Note Offering. The root cause of these expenses is an increase of the size of MassRoots’ team2023, from 7 employees in early 2015, to 33 in early 2016.

Net cash used in investing activities for$63,859,328 during the year ended December 31, 20162022.

Liquidity and Capital Resources

Net cash used in operating activities for the years ended December 31, 20152023 and 2022 was $83,750$1,833,310 and $244,035,$2,609,173, respectively. These

Cash flows used in operations in 2023 were impacted by depreciation of $2,856,380, amortization of intangible assets of $2,958,500, loss on asset – related party of $9,850,850, loss on assets of $197,458 amortization of right of use assets net of $392,050, amortization of right of use assets-related party net of $1,250,218, interest and amortization of debt discount of $8,897,267, a gain on the settlement of notes payable and factoring advances of $632,540, an increase in due to a related party of $1,824,318, an increase in accounts receivable of $431,155, stock compensation of $171,239, a decrease in inventories of $10,782, a decrease in prepaid expenses of $200,590, an decrease in security deposit of $25,000, gain on deferred revenue of $25,000, gain on lease termination of $108,863 an increase in accounts payable of $856,151 an decrease in payroll wages payable of $614,271, and a decrease in lease liability of $1,619,790. Cash flows used in operations in 2022 were impacted by depreciation of $875,809, amortization of intangible assets of $2,958,500, amortization of right of use assets of $227,185, amortization of right of use assets (related-party) of $2,390,991, impairments on goodwill of $2,499,753, a gain in the fair value of derivative liabilities of $14,264,476, interest and amortization of debt discount of $32,340,565, a gain on the settlement of notes payable and factoring advances of $516,920, a warrant expense for liquidated damages settlement of $7,408,681, an increase in rent due to a related party of $194,916, an increase in accounts receivable of $215,256, a decrease in inventories of $191,356, a decrease in prepaid expenses of $12,838, an increase in security deposits of $3,306, an increase in payroll wages payable of $1,702,145, an decrease in accounts payable of $1,738,665, a decrease in lease liability of $65,030, a decrease in lease liability (related-party) of $2,369,038, gain on settlement of convertible and non-convertible notes payable and accrued interest for cash for $2,625,378, and a decrease in environmental remediation liabilities of $22,207.

Net cash used by investing activities were related towas $1,678,176 and $5,936,027 for the purchase of equipment, primarily computers, foryears ended December 31, 2023 and 2022, respectively. For the year ended December 31, 20162023, there was cash used in the purchase of equipment of $1,760,945 and December 31, 2015cash received for the advance of $23,750 and $69,035, respectively. Duringasset of $82,769. For the year ended December 31, 2016, MassRoots made a deposit of our 2017 acquisition of DDDigtal LLC and in 2015, MassRoots made a one-time investment in Flowhub, LLC of $175,000; as we did not make any such investment in 2016, the net2022, there was cash used in investing activities decreased by $160,285.the purchase of equipment of $5,936,027.

Net cash provided by financing activities for the year ended December 31, 20162023 and December 31, 20152022 was $6,254,740$4,235,841 and $3,617,663,$6,408,711, respectively. During the year ended December 31, 2016, these funds came mainly2023, there were proceeds from non-convertible notes of $1,000,000, proceeds from convertible notes of $13,118,750, proceeds from the sale of common stock of $2,841,181, proceeds from warrant exercises of $15,511 proceeds from bridge financing of $825,000, proceeds from bank overdrafts of $118,763, and option exercises, the Company’s March 2016 Note Offeringproceeds of $3,746,109 from factoring advances, offset by repayments of $4,858,587 towards non-convertible notes and equity issuances, while duringrepayments of $12,570,886 towards factoring advances. During the year ended December 31, 2015, they came primarily2022, there were proceeds from equity issuancesnon-convertible notes of $2,725,000 and warrant exercises.proceeds of $6,518,310 from factoring advances, offset by repayments of $220,000 towards non-convertible notes, repayments of $221,500 towards notes, repayments of advances of $12,000 and $2,381,099 towards factoring advances.

Capital Resources

As of December 31, 2016,2023, we had cash on hand of $374,490. From January 1, 2017 through March 18, 2017, the Company received an aggregate of approximately $2,900,000 proceeds from the exercise of warrants to purchase shares of the Company’s common stock. We believe the capital raised from the exercise of such warrants is sufficient to fund the Company’s operations through the end of June 2017. In addition, as of March 18, 2017, there were warrants outstanding to purchase up to 561,000 shares of the Company’s common stock with an exercise price of $0.40 per share and warrants outstanding to purchase up to 6,975,002 shares of the Company’s common stock with an exercise price of $0.90 per share, which, if all were exercised, would supply $6,501,902 in cash to the Company. These warrants have various expiring dates through October 2019.

We currently have two credit cards with American Express, one with a credit limit of $3,000 and one with no pre-set credit limit. Additionally, we have a $10,000 line of credit with On-Deck Financial.$1,546,159. We currently have no other external sources of liquidity such as arrangements with credit institutions or off-balance sheet arrangements that will have or are reasonably likely to have a current or future effect on our financial condition or immediate access to capital.

We are dependent onFundraising

During the sale of our securities to fund our operations, and will remain so until we generate sufficient revenues to pay for our operating costs. Our officers and directors have made no written commitments with respect to providing a source of liquidity in the form of cash advances, loans and/or financial guarantees.

Fundraising

On March 14, 2016,year ended December 31, 2023, the Company completed its March 2016 Note Offering, whereby it sold to investors six (6) month secured convertible original issue discount Bridge Notes with principal amount in the aggregatereceived proceeds of $1,514,669, together with five year warrants to purchase an amount of shares of the Company’s common stock equal to the number of shares of common stock issuable upon the conversion of the Bridge Notes in full$825,000, $3,746,109, $13,118,750, $2,841,181 and having an exercise price of $1.00 per share with reset provisions. The Bridge Notes were convertible into shares of the Company’s common stock at a price per share equal to the lower of (i) $1.00, and (ii) a 25% discount to the price at which the Company next conducts an offering after the issuance date of the Bridge Note; provided, however, for any part of the principal amount of the Bridge Note that was not paid at its maturity date, September 14, 2016, the conversion price for such amount was equal to 65% of the average of the three trading days with the lowest daily weighted average prices of the Company’s common stock occurring during the fifteen days prior to such maturity date. On September 14, 2016, upon maturity of the Bridge Notes, the Company was unable to make the required payment of the then outstanding aggregate principal amount of $966,384 and was in default under the Bridge Notes. Because the Bridge Notes were not repaid by the maturity date, the investors became entitled to receive, in aggregate, but calculated pro rata to the principal amounts remaining outstanding at the time of maturity, up to five hundred thousand (500,000) shares of the Company’s common stock. Gross proceeds received by the Company for the Bridge Notes and warrants in this offering were $1,420,000, while net proceeds were $1,271,600 (excluding any legal fees). As of October 7, 2016, the Company completed the repayment of all outstanding principal and other amounts due under the Bridge Notes. Since$1,000,000 from the issuance of the Bridge Notes on March 14, 2016, the Company made payment to the holders of (i) an aggregate of $1,479,298 in cash and (ii) pursuant to the right of conversion of the Bridge Notes, issued an aggregate of 2,377,861 shares of the Company’s common stock at a conversion price equal to 65% of the average of the three trading days with the lowest daily weighted average prices of the Company’s common stock occurring during the fifteen days prior to September 14, 2016. The Company believes that it has completed all of its obligations under the Bridge Notes and is no longer in default under the Bridge Notes or any related agreements. The Bridge Notes have been retired.

From August 12, 2016 to October 21, 2016, Company completed its 2016 Direct Registered Offering to certain investors, pursuant to which we raised an aggregate in $5,000,000 in gross proceeds from thebridge notes, factoring advances, convertible notes, sale of shares of the Company’s common stock, together with warrants, with one warrant entitling the holder to purchase one share of common stock at a price equal to $0.90 per share. The purchase price paid by the investors was $0.50 for one share of common stock, and one warrant. The warrants are immediately exercisable and expire three years from the date of issuance. The shares of common stock and warrants are immediately separable and are issued separately. This offering was closed on October 21, 2016. A total of 10,000,000 shares of common stock and warrants to purchase a total of 10,000,000 shares of common stock were sold in the offering and have been or will be issued pursuant to the Prospectus dated August 12, 2016, as amended on August 19, 2016 and October 5, 2016.non-convertible notes, respectively.

Required Capital Over the Next Fiscal Year

We believe MassRoots does not have sufficient capital to reach cash-flow positive.

Our independent registered public accounting firm has expressed

Required Capital over the Next Fiscal Year

We may need additional capital in the future to continue to execute our business plan. Therefore, we may be dependent upon additional capital in the form of either debt or equity to continue our operations. At the present time, we do not have arrangements to raise additional capital, and we may need to identify potential investors and negotiate appropriate arrangements with them. We may not be able to arrange enough investment within the time the investment is required or that if it is arranged, that it will be on favorable terms. If we cannot obtain the needed capital, we may not be able to become profitable and may have to curtail or cease our operations. Additional equity financing, if available, may be dilutive to the holders of our capital stock. Debt financing may involve significant cash payment obligations, covenants and financial ratios that may restrict our ability to operate and grow our business.

Going Concern and Management’s Liquidity Plans

As of December 31, 2023, the Company had cash of $1,546,159 and a working capital deficit (current liabilities in excess of current assets) of $(20,579,715). During the year ended December 31, 2023, the net cash used in operating activities was $(1,833,310). The accumulated deficit as of December 31, 2023 was $(395,866,157). These conditions raise substantial doubt about ourthe Company’s ability to continue as a going concern for one year from the issuance of the consolidated financial statements.

During the year ended December 31, 2023, the Company received proceeds of $825,000, $1,000,000, $13,118,750, $2,841,181, and $3,746,109 from the issuance of bridge notes, non-convertible notes, convertible notes, sale of common stock, and factoring advances, respectively.

Until the Company’s consummation of the Empire acquisition, the Company had experienced net losses and negative cash flows from operations. The Company believes that our ability is dependentit could generate positive cashflows from operations going forward but in the event the market for recycled metals experiences a sharp downturn or if it experiences delays in its growth plans, the Company may need to raise additional capital. The Company’s failure to raise capital as and when needed could have a negative impact on ourits financial condition and its ability to implement ourpursue its business plan, raise capitalstrategy.

Accordingly, the accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and generate revenues. See Note 2satisfaction of ourliabilities in the normal course of business for one year from the date the consolidated financial statements.statements are issued. The carrying amounts of assets and liabilities presented in the consolidated financial statements do not necessarily purport to represent realizable or settlement values. The consolidated financial statements do not include any adjustments that might result should the Company be unable to continue as a going concern.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Recent Accounting Pronouncements

On January 1, 2020, The Company adopted ASU 2016-13 Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (“CECL”) methodology. The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including loan receivables and held to maturity debt securities. It also applies to Off-Balance Sheet (“OBS”) credit exposures not accounted for as insurance (loan commitments, standby letters of credit, financial guarantees, and other similar instruments) and net investments and leases recognized by a lessor in accordance with Topic 842 on leases. In August 2014,addition, ASC 326 made changes to the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-15,Disclosure of Uncertainties aboutaccounting for available for sale debt securities. One such change is to require credit losses to be presented as an Entities Ability to Continueallowance rather than as a Going Concern, whichwrite down on available for sale debt securities management does not intend to sell or believes that it is included in Accounting Standards Codification (ASC) 205, Presentation of Financial Statements. This update provides an explicit requirement for managementmore likely than not they will be required to assess an entity's ability to continue as a going concern, and to provide related footnote disclosure in certain circumstances.

The amendments are effective for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. Early application is permitted for annual or interim reporting periods for which the financial statements have not previously been issued.sell. The adoption of this standard is not expected to have a material impact on the Company’s financial position and results of operations.

The FASB issued ASU 2016-02,Leases (Topic 842). ASU 2016-02 requires that a lessee recognize the assets and liabilities that arise from operating leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. Public business entities should apply the amendments in ASU 2016-02 for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years (i.e., January 1, 2019, for a calendar year entity). Early application is permitted for all public business entities and all nonpublic business entities upon issuance. The adoption of this standard is not expected to have a material impact on the Company’s financial position and results of operations.

The FASB issued ASU No. 2016-09,“Improvements to Employee Share-Based Payment Accounting.” The amendment is part of the FASB’s simplification initiative and is intended to simplify the accounting around share-based payment award transactions. The amendments include changing the recording of excess tax benefits from being recognized as a part of surplus capital to being charged directly to the income statement, changing the classification of excess tax benefits within the statement of cash flows, and allowing companies to account for forfeitures on an actual basis, as well as tax withholding changes. The amendments in this update are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The amendment requires different transition methods for various components of the standard. Early adoption is permitted. The adoption of this standard is not expected to have a material impact on the Company’s financial position and results of operations.

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force). This ASU requires that the reconciliation of the beginning-of-period and end-of-period amounts shown in the statement of cash flows include cash and restricted cash equivalents. This ASU is effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The adoption of this standard is not expected to have a material impact on the Company’s financial position and results of operations

In April 2015, the FASB issued ASU No. 2015-03(ASU 2015-03), Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. This standard amends the existing guidance to require that debt issuance costs be presented in the balance sheet as a deduction from the carrying amount of the related debt liability instead of as a deferred charge. ASU 2015-03 is effective on a retrospective basis for annual and interim reporting periods beginning after December 15, 2015, but early adoption is permitted. The adoption of this standard did not have a material impact on the Company’s consolidated financial positionstatements and results of operations.related disclosures.

There are other various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to have a material impact on the Company'sCompany’s financial position, results of operations or cash flows.

Critical Accounting Policies

Management’s Discussion and Analysis of Financial Condition and Results of Operations discuss our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and the related disclosures of contingent assets and liabilities. On an on-going basis, management evaluates its estimates and judgments, including estimates used in the calculation of stock-based compensation, fair values relating to derivative liabilities, payroll tax liabilities with interest and penalties, deemed dividends, assumptions used in right-of-use and lease liability calculations, valuations and impairments of goodwill and intangible assets acquired in business combination, estimated useful life of long-lived assets and finite life tangible assets, determination of environmental remediation liabilities, and the valuation allowance related to deferred tax assets. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions and conditions.

Management believes the following critical accounting policies, among others, affect its more significant judgments and estimates used in the preparation of its consolidated financial statements.

Goodwill: Goodwill is the excess of the purchase price paid over the fair value of the net assets of the acquired business. Goodwill is tested annually at December 31 for impairment. The annual qualitative or quantitative assessments involve determining an estimate of the fair value of reporting units in order to evaluate whether an impairment of the current carrying amount of goodwill exists. A qualitative assessment evaluates whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount before applying the two-step quantitative goodwill impairment test. The first step of a quantitative goodwill impairment test compares the fair value of the reporting unit to its carrying amount including goodwill. If the carrying amount of the reporting unit exceeds its fair value, an impairment loss may be recognized. The amount of impairment loss is determined by comparing the implied fair value of the reporting unit’s goodwill with the carrying amount. If the carrying amount exceeds the implied fair value, then an impairment loss is recognized equal to that excess. The Company has adopted the provisions of ASU 2017-04—Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. ASU 2017-04 requires goodwill impairments to be measured on the basis of the fair value of a reporting unit relative to the reporting unit’s carrying amount rather than on the basis of the implied amount of goodwill relative to the goodwill balance of the reporting unit. Thus, ASU 2017-04 permits an entity to record a goodwill impairment that is entirely or partly due to a decline in the fair value of other assets that, under existing GAAP, would not be impaired or have a reduced carrying amount. Furthermore, the ASU removes “the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test.” Instead, all reporting units, even those with a zero or negative carrying amount will apply the same impairment test. Accordingly, the goodwill of reporting unit or entity with zero or negative carrying values will not be impaired, even when conditions underlying the reporting unit/entity may indicate that goodwill is impaired.

We test our goodwill for impairment annually, or, under certain circumstances, more frequently, such as when events or circumstances indicate there may be impairment. We are required to write down the value of goodwill only when our testing determines the recorded amount of goodwill exceeds the fair value. Our annual measurement date for testing goodwill impairment is December 31.

None of the goodwill is deductible for income tax purposes. During the fiscal years ended December 31, 2023 and 2022, the Company recorded $0 and $2,499,753 in impairment expense related to goodwill, respectively. As of December 31, 2023 and 2022, the carrying value of goodwill was $0 and $0, respectively.

Intangible: Intangible assets with finite useful lives consist of tradenames, licenses and customer relationships and are amortized on a straight-line basis over their estimated useful lives, which range from three to ten years. The estimated useful lives associated with finite-lived intangible assets are consistent with the estimated lives of the associated products and may be modified when circumstances warrant. Such assets are reviewed for impairment when events or circumstances indicate that the carrying value of an asset may not be recoverable. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of an asset and its eventual disposition are less than its carrying amount. The amount of any impairment is measured as the difference between the carrying amount and the fair value of the impaired asset. During the fiscal years ended December 31, 2023 and 2022, the Company recorded $0 and $2,499,753 in impairment expense related to intangibles and goodwill and $2,958,500 and $2,958,500 in amortization of intangible assets, respectively.

Income Taxes: The Company accounts for its income taxes in accordance with Income Taxes Topic of the FASB ASC 740, which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date.

Income tax expense is based on reported earnings before income taxes. Deferred income taxes reflect the impact of temporary differences between assets and liabilities recognized for consolidated financial reporting purposes and such amounts recognized for tax purposes and are measured by applying enacted tax rates in effect in years in which the differences are expected to reverse.

The Company also follows the guidance related to accounting for income tax uncertainties. In accounting for uncertainty in income taxes, the Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more likely than not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority.

Greenwave has also experienced impacts of inflation to its operations, mainly the significant increases in the prices of recycled metal, which in turn, has resulted in increases to the Company’s revenue and profit margin. The Company has also experienced increases to its wages and salaries, hauling, and towing expenses caused by inflation, but is taking steps to minimize impacts to the Company’s financial position. Greenwave does not experience material changes to its business due to seasonality.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

AsWe are a “smaller reporting company”, we as defined in Rule 12b-2 of the Exchange Act and are not required to provide the information required by this Item.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The consolidated financial statements required to be included in this reportAnnual Report appear as indexed in the appendix to this reportAnnual Report beginning on page F-1.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

WePursuant to Rules 13a-15(b) and 15-d-15(b) under the Exchange Act, we carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officerChief Executive Officer (“CEO”) and principal financial officer,Interim Chief Financial Officer (“CFO”) of the effectiveness of our disclosure controls and procedures (asas of the end of the period covered by this Annual Report. The term “disclosure controls and procedures,” as defined in Exchange Actunder Rules 13a-15(e) and 15d-15(e)). under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Based upon such evaluation, our CEO and CFO concluded that evaluation,our disclosure controls and procedures as of December 31, 2023 were not effective (at a reasonable assurance level) due to identified control deficiencies regarding the lack of segregation of duties and the need for a stronger internal control environment,environment.

To address the material weaknesses, we performed additional analysis and other post-closing procedures in an effort to ensure our principal executive officerfinancial statements included in this Annual Report on Form 10-K have been prepared in accordance with generally accepted accounting principles in the U.S. Accordingly, management believes that the financial statements included in this Annual Report fairly present in all material respects our financial condition, results of operations and principal financial officer concluded that our disclosure controls and procedures were ineffective as ofcash flows for the end of the period covered by this report.periods presented.

Our principal executive officer and principal financial officer do not expect that our disclosure controls and procedures or our internal controls will prevent all error or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.

To address the material weaknesses, we performed additional analysis and other post-closing procedures in an effort to ensure our financial statements included in this annual report have been prepared in accordance with generally accepted accounting principles. Accordingly, management believes that the financial statements included in this report fairly present in all material respects our financial condition, results of operations and cash flows for the periods presented.

Management’s Report on Internal Control Overover Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended.Act. Our management, including our principal executive officer and principal financial officer, assessed the effectiveness of our internal control over financial reporting as of December 31, 2016.2023. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework (2013)(issued in 2013). A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

ThereBased upon the assessments, management has concluded that as of December 31, 2023, there was a material weakness in the Company’sour internal control over financial reporting due to the fact that the Companywe did not have an adequate process established to ensure appropriate levels of review of accounting and financial reporting matters, which resulted in our closing process not identifying all required adjustments and disclosures in a timely fashion.

We expect thatplan to take steps to enhance and improve the Company will needdesign of our internal control over financial reporting. To remediate our material weaknesses, we plan to hire accountingappoint additional qualified personnel with the requisite knowledge to improve the levels of review of accounting and financial reporting matters. The Company may experience delays in doing so and anymatters; however, such remediation efforts are largely dependent upon our securing additional employees would require time and trainingfinancing or generating significant revenue to learncover the Company’s business and operating processes and procedures. Forcosts of implementing the near-term future, until such personnel are in place, this will continue to constitute achanges required.

Until we remediate our material weakness in the Company’s internal control over financial reporting thatsuch weaknesses could result in material misstatements in the Company’sour financial statements not being prevented or detected.

Inherent Limitations on Effectiveness of Controls and Procedures

The Company’s management, including the Company’s CEO and CFO, does not expect that the Company’s internal control over financial reporting will prevent or detect all errors and all fraud. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objective and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree or compliance with the policies or procedures may deteriorate.

The Company’s CEO and or CFO has identified control deficiencies regarding the lack of segregation of duties and the need for a stronger internal control environment. The small size of the Company’s accounting staff may prevent adequate controls in the future, such as segregation of duties, due to the cost/benefit of such remediation.

Because of the above material weakness, management has concluded that we did not maintain effective internal control over financial reporting as of December 31, 2016,2023, based on the criteria established in “Internal Control-Integrated Framework” issued by the COSO.

This Annual Report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our independent registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management’s report in this Annual Report.

Changes in Internal Control over Financial Reporting

During the most recent fiscal quarter, the Company began hiring additional accounting personnel to enhance its segregation of duties and establishment of procedures in an effort to ensure appropriate levels of review of accounting and financial reporting matters.

ITEM 9B. OTHER INFORMATION

Rule 10b5-1 Trading Arrangement

Not applicable.During the three months ended December 31, 2023, no director or officer of the Company adopted or terminated any “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

DirectorsInformation required by this item is incorporated by reference to our proxy statement for our 2024 Annual Meeting of Stockholders.

ITEM 11. EXECUTIVE COMPENSATION

Information required by this item is incorporated by reference to our proxy statement for our 2024 Annual Meeting of Stockholders.

Pay Versus Performance

In August 2022, the SEC adopted final rules to require companies to disclose information about the relationship between executive compensation actually paid and Executive Officers

The names and ages of our Directors and Executive Officers are set forth below. Our By-Laws provide for not less than one and not more than nine Directors. All Directors are elected annually by the stockholders to serve until the next annual meetingcertain financial performance of the stockholders and until their successors are duly elected and qualified.company. The officers are elected by our Board.information below is provided pursuant to Item 402(v) of SEC Regulation S-K with respect to “smaller reporting companies” as that term is defined in Item 10(f)(1) of SEC Regulation S-K.

Isaac Dietrich, Chief Executive Officer, ChairmanAnalysis of the Board and Director -IsaacDietrich isInformation Presented in the founder, CEO, largest shareholder, and ChairmanPay Versus Performance Table

The Compensation Committee of the Board of MassRoots, each since our inception. He is responsible for executing our strategic business development. Mr. Dietrich was the co-founder and majority shareholder of RoboCent.com from June 2012 until his buyout in December 2016, scaling the business to millions in revenue. He also founded Tidewater Campaign Solutions, LLC, a Virginia Beach-based political strategy firm that was retained by 30 political campaigns and political action committees from January 2010 to December 2012. From February to December 2010, Mr. Dietrich served as Field Director for former Congressman E. Scott Rigell’s campaign.

Vincent “Tripp” Keber, Director �� Tripp Keber has served as a Director of MassRoots since 2014. Mr. Keber also is a co-founder, Director and Chief Executive Officer of Dixie Elixirs & Edibles, a Colorado licensed medical marijuana infused products manufacturer. He is a founding director of the National Cannabis Industry Association, and, since 2013, has served as a director of the Marijuana Policy Project. He is also an advisory board member of the Medical Marijuana Industry Group in Colorado. Mr. Keber also serves as a board member of American Cannabis Company (2014-current). In his current role as CEO of Dixie, Mr. Keber is responsible for the overall strategy, licensing, marketing, branding and expansion efforts related to the Dixie brand, both domestically and internationally. Mr. Keber has been featured on CBS’s 60 Minutes and CNBC.

Prior to joining Dixie, Mr. Keber served as Chief Operating Officer for Bella Terra Resort Development Company, and EVP of Business Development for Sagebrush Realty Development. He has a BS in Political Science from Villanova University and currently resides in both Aspen and Denver, CO with his family. He is involved in several charitable organizations located within his community and assists in the research and development of cannabis support for veterans suffering from PTSD. As an experienced leader in the legal cannabis industry, we believe that Mr. Keber will use his experience and industry knowledge to help guide our leadership team.

Ean Seeb, Director – Ean Seeb has served as a Director of MassRoots since 2014. Mr. Seeb was previously the co-owner and manager of Denver Relief LLC, formerly Denver’s oldest medical and adult use cannabis operation. Denver Relief’s cultivation and infused products manufacturing facility was sold in July 2016 to county music legend Willie Nelson (CMH Brands). As a founding partner of Denver Relief Consulting LLC and seasoned cannabis dispensary operator, Mr. Seeb has significant experience navigating complex legislation and regulatory demands unique to legal cannabis operations. Mr. Seeb also serves as a board member of Quark Distribution (2014-present), Manna Molecular Science (2015-current), Vapor Slide (2016-current) and is on the board of advisors for U.S. Coffee (2017-current). He serves as a current board member and former Board Chair for the National Cannabis Industry Association and holds leadership positions with charitable organizations focused on a range of social causes, from civil rights to sustainable volunteer farming. Mr. Seeb has been actively involved with non-profit groups for over two decades. His years of humanitarian experience lead Mr. Seeb to conceptualize and develop a cannabis-centric service organization called the Denver Relief GREEN TEAM in 2010. He holds a B.S. degree in Business Administration with an emphasis in Computer Information Systems from University of Northern Colorado. We believe that Mr. Seeb will use his experience and industry knowledge to help guide our leadership team.

Terence Fitch, Director - Terence Fitch has served as a DirectorDirectors of the Company since 2015. Mr. Fitch is a seasoned corporate executive with 23 years of marketing, sales, finance, manufacturing, supply chain and media experience. Mr. Fitch founded Drink Teck, LLC in 2013 and has served as its Chief Executive Officer since that time. Drink Teck LLC is a functional beverage company which uses liposome technology to cost-effectively formulate drinks for the consumer health and wellness sector. Prior to founding Drink Teck LLC, Mr. Fitch spent 3 years at Coca Cola Refreshments as Senior Vice President and General Manager. Before that, 18 years at, Coca-Cola Enterprises, where, from 2004 to 2010, he served as the Senior Vice President and General Manager of the Western Region and was responsible for a team of 13,500 sales, strategy, marketing, operations, manufacturing, supply chain and analytical professionals and accountable for over $4.2 billion in sales. From 1998 to 2002, Mr. Fitch acted as Division Vice President and General Manager for Coca-Cola Enterprises and, from 1994-1998, was the Regional Vice President of Sales and Marketing of the Gulf States for Coca-Cola Enterprises. Mr. Fitch has a Bachelor of Science in Marketing and Finance from Arizona State University. Mr. Fitch brings a strong understanding of financial reporting and corporate governance matters, along with expertise in corporate governance, enterprise risk management and strategic planning, which we believe will strengthen the Board’s collective qualifications, skills, and experience.

Daniel “Dan” Hunt, Chief Operations Officer -Since June 2015, Daniel Hunt has served as the Company’s Chief Operations Officer, responsible for overseeing the Company’s daily operations, including marketing, sales, business development, staffing, processes and infrastructure. From July 2014 to June 2015, Mr. Hunt served as the Company’s Vice President of Marketing, where he was responsible for the coordination and implementation of the Company’s marketing initiatives. From June 2011 to July 2014, Mr. Hunt served as Head of Business Development for SearchParty Music, a media production company in Massachusetts. Prior to joining the Company, Mr. Hunt attended James Madison University from 2012-2014, where he gained experience while supporting the operations of early-stage startups as a member of the Society of Entrepreneurs. Mr. Hunt also served on the board of managers of Flowhub, LLC, a private cannabis point-of-sale company, from May 2015 to September 2016.

Lance Galey, Chief Technology Officer –Lance Galey joined MassRoots as its Chief Technology Officer in June 2016. Previously, Mr. Galey was the Chief Cloud Architect for Autodesk from February 2014 to April 2016, where he helped transform their products into strategic SaaS businesses. From June 2012 to February 2015, Mr. Galey served as Vice President and Principal Architect at Salesforce, where he led the architecture and development of numerous core infrastructure services underlying a large portfolio of Salesforce SaaS applications and was selected as the executive MVP for the technology division of Salesforce.com. Prior to his time at Salesforce, Mr. Galey served as Technical Advisor for PLUMgrid Inc. (2012-2013); Chief Architect and Head of OpenStack Engineering of Cloud Services for WebEx, a division of Cisco (2011-2012); and as the Director of Architecture for the Disney Connected and Advanced Technologies division of The Walt Disney Company (2009-2011). Mr. Galey also served as Sr. Program Manager at Microsoft Inc. (2006-2009) and began his career at Amazon (2005-2006) and Level 3 Communications (2000-2005). Mr. Galey is passionate about helping technology companies scale their teams and products to meet growing demands. He holds a B.S. in computer science from Regis University.

George Robert “Bob” Pullar, Chief Financial Officer –Bob Pullar joined MassRoots as its Chief Financial Officer in December 2016. Prior to joining MassRoots, since October 2006, Mr. Pullar, co-owned and served as Managing Director of Axis Private Equity Group, LLC, an investment firm focused on making equity investments in well-managed, profitable companies. Mr. Pullar’s experience includes the negotiation of leveraged buyouts, management buyouts, recapitalizations and equity investments with privately held businesses and subsidiaries or divisions of public companies. Mr. Pullar brings to the Company a strong understanding of and tremendous experience in the financial industry.

Legal Proceedings

We know of no pending proceedings to which any director, member of senior management, or affiliate is either a party adverse to us, or our subsidiaries, or has a material interest adverse to us or our subsidiaries.

None of our executive officers or directors have (i) been involved in any bankruptcy proceedings within the last five years, (ii) been convicted in or has pending any criminal proceedings (other than traffic violations and other minor offenses), (iii) been subject to any order, judgment or decree enjoining, barring, suspending or otherwise limiting involvement in any type of business, securities or banking activity or (iv) been found to have violated any Federal, state or provincial securities or commodities law and such finding has not been reversed, suspended or vacated.

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 shareholders well and maintaining our integrity in the marketplace. Our corporate governance guidelines and code of business conduct, together with our Amended and Restated Certificate of Incorporation, Amended and Restated 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 is available on our website at www.massroots.com/investors.

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

Our Board of Directors (our “Board”) currently consists of five members. The number of directors on our Board can be determined from time to time 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 such time. Accordingly, the Board has determined that our three non-employee directors, Ean Seeb, Terence Fitch, and Tripp Keber, 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,a policy 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 have an appreciation of 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.

Committees of the Board

In December 2015, our Board designated the following three committees of the Board: the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee.

Terence Fitch is the Chairman of the Audit Committee, and Ean Seeb and Tripp Keber are members. the Audit Committee is responsible for, among other things, overseeing the financial reporting and audit process andpractice regarding evaluating our internal controls over financial reporting. The Board has determined that Terence Fitch, Ean Seeb and Tripp Keber would each be considered “independent directors” and “Audit Committee financial experts” within the meaning of the NASDAQ and Exchange Act rules.

Tripp Keber is the Chairman of the Compensation Committee, and Ean Seeb is a member. 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 Tripp Keber and Ean Seeb would each be considered “independent directors” within the meaning of the NASDAQ and Exchange Act rules.

Ean Seeb is the Chairman of the Nominating and Corporate Governance Committee, and Tripp Keber is a member. The Nominating and Corporate Governance Committee is responsible for, among other things, identifying and recommending candidates to fill vacancies occurring between annual shareholder 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 shareholders. The Board has determined that Ean Seeb and Tripp Keber would be considered “independent directors” within the meaning of the NASDAQ and Exchange Act rules.

Current copies of the charters of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee are available on our corporate website at https://massroots.com/investors/governance.

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 yearTotal Shareholder Return as part of its considerationdetermination of undertaking any such business strategies. Eachcompensation decisions for the named executive officers. The Compensation Committee takes various factors into account in determining the competitiveness of our Board committees also coordinates oversight ofits executive compensation. Over the management of our risk that falls withinpast three fiscal years the committee’s areas of responsibility. In performing this function, each committeeCompensation Committee has full access to management, as well asrecognized the ability to engage advisors. The Board also is provided updatedsignificant time and effort required by the CEO and other executive officers of the Company on a regular basis.

Section 16 Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires our directors and executive officers and persons who own more than 10%others to manage the Company’s liquidity by raising capital while reducing operating expenses and cash used in operations, secure and maintain the Company’s listing on the Nasdaq Capital Market, and to source and evaluate merger and acquisition opportunities. To retain qualified executive management, the Board, from 2021 to 2023, paid bonuses to Mr. Meeks that were earned during fiscal year 2021 through 2023. Mr. Meeks last received equity awards in 2021.

All information provided above under the “Pay Versus Performance Information” heading will not be deemed to be incorporated by reference in any filing of our outstanding shares of common stock (collectively, “Reporting Persons”) to file with the SEC initial reports of ownership and reports of changes in ownership in our common stock and other equity securities. Specific due dates for these records have been established, and we are required to report in this report any failure in 2016 to file by these dates. To the Company’s knowledge, based solely on its review of the copies of such reports received or written representations from certain Reporting Persons that no other reports were required, the Company believes that during its fiscal year ended December 31, 2016, all filing requirements applicable to the Reporting Persons were timely met.

Shareholder Communications

Although we do not have a formal policy regarding communications with the Board, shareholders may communicate with the Board by writing to us at 1624 Market Street, Suite 201, Denver, CO 80202, Attention: Legal. Shareholders 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) shareholder 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.

ITEM 11. EXECUTIVE COMPENSATION

Named Executive Officers

Our “named executive officers” for the 2016 fiscal year consisted of the following individuals:

No other executive officers earned over $100,000 during the previous fiscal year.

Summary Compensation Table

The table below summarizes all compensation awarded to, earned by, or paid to our Chief Executive Officer and our two most highly compensated executive officers (the “named executive officers” listed above) at the end of our last fiscal year for all services rendered in all capacities to us during the years during which they served as executive officers. Where a named executive officer is also a director, all compensation related to such individuals position as an officer.

Outstanding Equity Awards at December 31, 2016 Fiscal Year End

The following table sets forth the equity awards our named executive officers had outstanding at December 31, 2016.

Narrative Disclosure to Summary Compensation and Option Tables

Isaac Dietrich

Isaac Dietrich provides services to us as our Chief Executive Officer pursuant to an at-will agreement (with one month notice to be given prior to termination) that provides that Mr. Dietrich would be paid an amount determined by the Company in accordance with the Company’s normal payroll procedures. From April 1, 2014 to March 31, 2015, Mr. Dietrich was paid a salary of $5,000 per month. From April 1, 2015 until March 31, 2016, Mr. Dietrich was paid a salary of $6,500 per month. From April 1, 2016 until September 30, 2016, Mr. Dietrich was paid a salary of $10,833 per month. From October 1, 2016 and thereafter, Mr. Dietrich was paid a salary of $7,917 per month. Mr. Dietrich did not receive any compensation related to his position as a director.

In December 2015, Mr. Dietrich started receiving health, vision and dental insurance. No retirement plan, life insurance or employee benefits program has been awarded to Mr. Dietrich and he serves at the direction of the Board.

Daniel Hunt

Daniel “Dan” Hunt provides services to us as our Chief Operating Officer pursuant to an “at-will” agreement that became effective July 19, 2015. Pursuant to this agreement, Mr. Hunt receives a salary of $78,000 per year and may be terminated by either party with or without cause with one (1) month’s written notice. From January 1, 2015 until July 17, 2015, Mr. Hunt served as an at will employee with a salary of 3,500 per month. From July 17, 2015 to March 31, 2016, Mr. Hunt was paid a salary of $6,500 per month. From April 1, 2016 until September 30, 2016, Mr. Hunt was paid a salary of $10,833 per month. From October 1, 2016 and thereafter, Mr. Hunt was paid a salary of $7,500 per month

In addition, on January 1, 2015, the Company approved the issuance to Mr. Hunt 50,000 shares of its common stock and 100,000 options to purchase shares of common stock at $0.50 per share pursuant to the 2014 Plan, which would vest over the period of one year on a monthly basis. The fair market value was calculated using the Black-Scholes options pricing model, assuming approximately 2.17% risk-free interest, 0% dividend yield, 1.50% volatility, and expected term of 5.25 years.

On December 14, 2015, the Board approved a grant of 800,000 unvested options to purchase shares of common stock at $1.00 per share to Mr. Hunt pursuant to the 2015 Plan, which vest as follows: upon the Company reaching 1,000,000 registered Users, 200,000 options shall vest; upon the Company reaching 2,500,000 registered Users, 200,000 options shall vest; upon the Company reaching $1,000,000 in cumulative revenue, 200,000 options shall vest; and, upon the Company reaching $2,500,000 in cumulative revenue, 200,000 options shall vest. The fair market value was calculated using the Black-Scholes options pricing model. Under this model, the fair market value of the 200,000 options that vest upon the Company reaching 1,000,000 register Users was calculated assuming approximately 2.23% risk-free interest, 0% dividend yield, 280% volatility, and expected term of 5.25 years. No cost is recognized in 2015 for the other 600,000 options as the probability of achieving those targets is not currently estimable. As of December 31, 2016, 200,000 options had vested.

On that same date, the Company’s Board approved the grant of 200,000 unvested restricted shares to Mr. Hunt. However, pursuant to the 2015 Plan, the grant did not occur until shareholder approval of the 2015 Plan became effective, which occurred in January 2016. As such, this grant has been included as compensation for Mr. Hunt in fiscal year 2016.

On December 19, 2016, the Board approved a grant of unvested options to purchase up to 1,000,000 shares of common stock at $0.86 per share to Mr. Hunt pursuant to the 2017 Plan (as defined below), which vest as follows: (i) 83,333 options on the first day of each of January, February, April, May, July, August, October and November of 2017; and (ii) 83,334 options on the first day of each of March, June, September and December of 2017. Because no options vested in fiscal year 2016, this grant will included as compensation for Mr. Hunt in fiscal year 2017.

Lance Galey

Lance Galey provides services to us as our Chief Technology Officer pursuant to an “at-will” agreement that became effective June 20, 2016.

On October 3, 2016, pursuant to the Company’s 2016 Plan (as defined below), the Board granted Mr. Galey a stock grant of 600,000 unvested restricted shares of the Company’s common stock (the “Galey Stock Award”) and unvested options to purchase up to 600,000 shares of the Company’s common stock with an exercise price of $0.51 which will expire ten years from issuance (the “Galey Option Award”). The Galey Stock Award will vest as follows: (i) 300,000 shares will vest on October 3, 2016 and (i) 50,000 shares will vest on the first day of each month from November 2016 through April 2017. If the Company terminates the employment of Mr. Galey prior to the full vesting of the Galey Stock Award and Galey Option Award, or in the event of a change of control, merger, or similar event affecting the Company, all remaining unvested options and shares will vest immediately.

On December 19, 2016, the Board approved a grant of unvested options to purchase up to 1,000,000 shares of common stock at $0.86 per share pursuant to the 2017 Plan to Mr. Galey pursuant to the 2017 Plan, which vest as follows: (i) 83,333 options on the first day of each of January, February, April, May, July, August, October and November of 2017; and (ii) 83,334 options on the first day of each of March, June, September and December of 2017. Because no options vested in fiscal year 2016, this grant will be included as compensation for Mr. Galey in fiscal year 2017.

Compensation Adjustments

On March 29, 2016, our Board, upon the recommendation of the Company’s Compensation Committee, approved increases in the salary of Mr. Dietrich and Mr. Hunt, such that each would receive $10,833 per month for their services in their respective positions.

On October 5, 2016, our Board, upon the recommendation of the Company’s Compensation Committee, approved adjustments to several officers’ compensation packages. Specifically, in connection with the Board’s expense reduction initiatives, the Board approved (i) a decrease of the annual salary of the Company’s President and Chief Executive Officer, Isaac Dietrich, to $95,000 per year from $130,000 per year; (ii) a decrease of the annual salary of the Company’s Chief Operating Officer, Dan Hunt, to $90,000 per year from $130,000 per year; and (iii) a decrease of the annual salary of the Company’s Chief Technology Officer, Lance Galey, to $60,000 per year from $150,000 per year.

In addition to the salary decrease, Mr. Galey agreed to waive $51,785 in salary which he had earned but deferred payment of in connection with the Board’s approval of the grant, pursuant to the Company’s 2016 Plan, to Mr. Galey of an 600,000 unvested restricted shares of the Company’s common stock (the “Galey Stock Award”) and unvested options to purchase up to 600,000 shares of the Company’s common stock with an exercise price of $0.51 which will expire ten years from issuance (the “Galey Option Award”). The Galey Stock Award will vest as follows: (i) 300,000 shares will vest on October 3, 2016 and (i) 50,000 shares will vest on the first day of each month from November 2016 through April 2017. If the Company terminates the employment of Mr. Galey prior to the full vesting of the Galey Stock Award and Galey Option Award, or in the event of a change of control, merger, or similar event affecting the Company, all remaining unvested options and shares will vest immediately.

At no time during the periods listed in the above tables, with respect to any named executive officers, was there:

Director Compensation

Our interested, employee directors do not receive any additional compensation for their service as directors.

The following table shows for the fiscal year ended December 31, 2016, certain information with respect to the compensation of all non-employee directors of the Company: