UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

Amendment No. 1

~~FORM 10-Q~~

~~[X]~~ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934

For the quarterly period ended September 30, ~~2017~~2021

~~[ ]~~ ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934

For the transition period from ___________to ____________

Commission File ~~Number:~~Number 000-55431

~~MASSROOTS,~~GREENWAVE TECHNOLOGY SOLUTIONS, INC.

(Exact name of business as specified in its charter)

Delaware		46-2612944
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

277 Suburban Drive, Suffolk, VA		23434
(Address of principal executive offices)		(Zip code)

~~1624 Market Street, Suite 201, Denver, CO 80202~~(303) 816-8070

(~~Address,~~Registrant’s telephone number, including ~~zip code, of principal executive offices)~~area code)

~~(833) 467-6687~~Securities registered pursuant to Section 12(b) of the Act: None

~~(Issuer’s telephone number)~~

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

Large accelerated filer	~~[ ]~~☐		Accelerated filer	~~[ ]~~☐
Non-accelerated filer	~~[ ]~~☒		Smaller reporting company	~~[X]~~☒
Emerging growth company	~~[X]~~	☒

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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ~~[ ]~~☐ No ~~[X]~~☒

As of November ~~10, 2017,~~22, 2021, there were ~~112,115,839~~994,871,337 shares of the registrant’s common stock ~~par value $0.001 per share (“Common Stock”)~~ issued and outstanding.

EXPLANATORY NOTE

This Amendment No. 1 on Form 10-Q/A (this “Form 10-Q/A”) to the Quarterly Report on Form 10-Q of Greenwave Technology Solutions, Inc. (the “Company,” “Greenwave,” “we,” “us,” or “our”) for the three and nine months ended September 30, 2021, filed with the Securities and Exchange Commission on November 22, 2021 (the “Original 10-Q”), is being filed for the purposes of restating its financial statements following the completion of a pre-issuance review by its independent accountant. Due to a communication issue, the Company filed the Original 10-Q for the three and nine months ending September 30, 2021 prior to the completion of the pre-issuance review.

The financial statement misstatements reflected in previously issued condensed consolidated interim financial statements did not impact the Company’s Condensed Consolidated Balance Sheets, Statements of Operations, Statements of Changes in Stockholders’ Equity, or Statements of Cash Flows for any period previously presented.

Certain information within the notes to the financial statements have been restated to reflect the corrections of misstatements discussed above as well as to add disclosure language as appropriate (See Note 2 – Restatement).

TABLE OF CONTENTS

PART I.			FINANCIAL INFORMATION

	ITEM 1.	Financial Statements
		~~Condensed consolidated balance sheets as of September 30, 2017 (unaudited) and December 31, 2016~~		1
		Condensed ~~consolidated statements~~Consolidated Balance Sheets as of ~~operations for the three and nine months ended~~ September 30, ~~2017~~2021 (unaudited) (as restated) and ~~2016 (unaudited)~~December 31, 2020		21
		Condensed ~~consolidated statement~~Consolidated Statements of ~~stockholders’ equity (deficit)~~Operations for the ~~nine months ended~~Three and Nine Months Ended September 30, ~~2017~~2021 and 2020 (unaudited) (as restated)		32
		Condensed ~~consolidated statements~~Consolidated Statements of ~~cash flows~~Stockholders’ Deficit for the ~~nine months ended~~Three and Nine Months Ended September 30, ~~2017~~2021 and ~~2016~~2020 (unaudited) (as restated)		43
		~~Notes to condensed consolidated financial statements~~Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2021 and 2020 (unaudited) (as restated)		~~6-22~~5
		Notes to Condensed Consolidated Financial Statements (unaudited)	6
	ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		~~23-87~~32
	ITEM 3.	Quantitative and Qualitative Disclosures ~~about~~About Market Risk		2935
	ITEM 4.	Controls and Procedures		2936

PART II.			OTHER INFORMATION
	ITEM 1.	Legal Proceedings		3037
	ITEM 1A.	Risk Factors		3037
	ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds		3037
	ITEM 3.	Defaults Upon Senior Securities		3137
	ITEM 4.	Mine Safety Disclosures		3137
	ITEM 5.	Other Information		3237
	ITEM 6.	Exhibits		3338
	SIGNATURES			3439

-i-

~~Unless we have indicated otherwise or the context otherwise requires, references~~FORWARD-LOOKING STATEMENTS

Statements in this Quarterly Report on Form ~~10-Q to “MassRoots,” the “Company,” “we,” “us” and “our” or similar terms are to MassRoots, Inc.~~

~~NOTE ABOUT FORWARD-LOOKING STATEMENTS~~

~~Statements in this report~~10-Q/A may be “forward-looking statements.”

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 ~~include, among~~are often, but not always, made through the use of words or phrases such as “believe,” “will,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” and “would.” 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 set forth in “Item 1A. Risk Factors” in our Annual Report on Form 10-K, and our other ~~things,~~filings with SEC.

You are cautioned not to place undue reliance on these forward-looking statements, ~~regarding:~~

	•	~~the growth of our business and revenues and our expectations about the factors that influence our success;~~
	•	~~our plans to continue to invest in systems, facilities, and infrastructure, increase our hiring and grow our business;~~
	•	~~our strategy and timing of any plans to monetize our network, including the paid conversion rates and the willingness of businesses to continue to advertise on our platform;~~
	•	~~our user growth expectations;~~
	•	~~our ability to attain funding and the sufficiency of our sources of funding;~~
	•	~~our expectation that our cost of revenues, development expenses, sales and marketing expenses, and general and administrative expenses will increase;~~
	•	~~fluctuations in our capital expenditures; and~~
	•	other statements regarding our future operations, financial condition and prospects, and business strategies. 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 above and those risks discussed from time to time in this report, including the risks described under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2016 filed March 31 , 2017, and any other risks described in any other filings we make with the United States Securities and Exchange Commission (“SEC”). Any forward-looking statementswhich speak only as of ~~the date on which they are made, and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after~~ the date of ~~this report.~~

Management’s discussion and analysis of financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. On an on-going basis, we evaluate these estimates, including those related to financial instruments, bad debts, impairment, net lease intangibles, contingencies and litigation. We base our estimates on historical experience and various other assumptions that we believe 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. We assume no obligation to update these forward-looking statements to reflect actual results or changes in factors or assumptions affecting forward-looking statements. You should read the following discussion and analysis in conjunction with the Financial Statements and Notes attached hereto, and the other financial data appearing elsewhere in this Quarterly Report on Form ~~10-Q.~~10-Q/A. Any forward-looking statements speak only as of the date on which they are made, and we disclaim any obligation to publicly update or release any revisions to these forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this Quarterly Report on Form 10-Q/A or to reflect the occurrence of unanticipated events, except as required by applicable law.

-ii-

PART ~~I –~~I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

MASSROOTS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

September 30, December 31,
2017 2016
(unaudited)
ASSETS
Current assets:
Cash $ 267,322 $ 374,490
Accounts receivable —   3,306
Prepaid expenses 10,440 —
  Total current assets 277,762 377,796

Property and equipment, net 116,845 77,322

Other assets:
Goodwill 4,971,991 —
Investments 403,249 235,000
Deposits and other assets 33,502 33,502
  Total other assets 5,408,742 268,502

  Total assets $ 5,803,349 $ 723,620

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ 258,845 $ 382,550
Accrued expenses 63,274 —
Loan payable 3,156 —
Due to related parties 492,003 —
Deferred revenue —   27,010
Convertible notes payable, net of debt discount of $713,658 331,342 —
Derivative liability 1,506,414 1,301,138
  Total current liabilities 2,655,034 1,710,698

Long term debt:
Convertible notes payable, long term —   108,100
  Total liabilities 2,655,034 1,818,798

Stockholders' equity (deficit):
Common stock, $0.001 par value; 200,000,000 shares authorized; 111,326,981 and 71,908,370 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively 111,327 71,908
Common stock to be issued, 1,551,217 and 1,740,000 shares as of September 30, 2017 and December 31, 2016, respectively 1,551 1,740
Additional paid in capital 59,052,979 28,693,819
Accumulated deficit (56,017,542 ) (29,862,645 )
  Total stockholders' equity (deficit) 3,148,315 (1,095,178 )

  Total liabilities and stockholders' equity (deficit) $ 5,803,349 $ 723,620

See the accompanying notes to the unaudited condensed consolidated  financial statements

MASSROOTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)

Three months ended September 30, Nine months ended September 30,
2017 2016 2017 2016
Revenues: $ 11,516 $ 209,003 $ 289,130 $ 794,621

Operating expenses:
Advertising 302,809 121,642 865,052 679,061
Payroll and related expenses 811,775 478,775 2,732,911 1,714,819
Stock based compensation 5,510,554 613,353 19,882,527 2,306,662
Other general and administrative expenses 908,392 880,441 3,835,470 2,094,829
  Total operating expense 7,533,530 2,094,211 27,315,960 6,795,371

Loss from operations (7,522,014 ) (1,885,208 ) (27,026,830 ) (6,000,750 )

Other income (expense):
Gain on sale of securities —   —   75,000 —
Gain on change in fair value of derivative liabilities 634,073 1,006,358 986,058 1,320,654
Interest expense (189,125 ) (2,573,814 ) (189,125 ) (3,575,008 )
  Total other income (expense): 444,948 (1,567,456 ) 871,933 (2,254,354 )

Net loss before income taxes (7,077,066 ) (3,452,664 ) (26,154,897 ) (8,255,104 )

Provision of income taxes (benefit) —   —   —   —

NET LOSS $ (7,077,066 ) $ (3,452,664 ) $ (26,154,897 ) $ (8,255,104 )

Net loss per common share-basic and diluted $ (0.07 ) $ (0.07 ) $ (0.28 ) $ (0.17 )

Weighted average number of common shares outstanding-basic and diluted 104,274,253 51,083,084 92,196,637 48,916,198

See the accompanying notes to the unaudited condensed consolidated financial statements

GREENWAVE TECHNOLOGY SOLUTIONS, INC.

(FORMERLY MASSROOTS, INC.)

CONDENSED CONSOLIDATED BALANCE SHEETS

	September 30,			December 31,
	2021			2020
	(unaudited)
	(As Restated)
ASSETS
Current assets:
Cash	$	1,082		$	1,485
Prepaid expenses		-			97,132
Total current assets		1,082			98,617

Total assets	$	1,082		$	98,617

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current liabilities:
Accounts payable and accrued expenses	$	4,242,821		$	4,948,890
Accrued payroll and related expenses		4,037,298			3,864,055
Deferred revenue		25,000			-
Advances		122,000			88,187
Non-convertible notes payable, current portion, net of debt discount of $15,862 and $0, respectively		1,760,082			159,520
Derivative liabilities		4,289,634			25,475,514
Convertible notes payable		3,063,970			3,186,303
Total current liabilities		17,540,805			37,722,469

Non-convertible notes payable, net of debt discount of $1,636 and $0, respectively		128,364			60,000
PPP note payable		-			50,000
Total liabilities		17,669,169			37,832,469

Commitments and contingencies (See Note 9)

Stockholders’ deficit:
Preferred stock - 10,000,000 shares authorized:
Preferred stock - Series X, $0.0001 par value, $20,000 stated value, 100 shares authorized; 26.05 and 16.05 shares issued and outstanding, respectively		-			-
Preferred stock - Series Y, $0.001 par value, $20,000 stated value, 1,000 shares authorized; 720.515674 and 654.781794 shares issued; 720.515674 and 626.995464 shares outstanding, and 0 and 27.78633 to be issued, respectively		1			1
Preferred stock - Series Z, $0.001 par value, $20,000 stated value, 500 shares authorized; 500 and 0 shares issued; 0 and 0 shares outstanding, and 500 and 0 to be issued, respectively		1			-
Preferred stock - Series C, $0.001 par value, 1,000 shares authorized; 1,000 shares issued and outstanding		1			1
Preferred stock - Series A, $0.001 par value, 6,000 shares authorized; 0 shares issued and outstanding		-			-
Preferred stock - Series B, $0.001 par value, 2,000 shares authorized; 0 shares issued and outstanding		-			-
Common stock, $0.001par value, 1,200,000,000 shares authorized; 499,871,337 and 493,726,405 shares issued and outstanding, respectively		499,871			493,727
Common stock to be issued, 906,373,564 and 907,379,814 shares, respectively		906,374			907,380
Additional paid in capital		306,046,151			283,024,527
Discount on preferred stock		-			(20,973,776	)
Accumulated deficit		(325,120,486	)		(301,185,712	)
Total stockholders’ deficit		(17,668,087	)		(37,733,852	)

Total liabilities and stockholders’ deficit	$	1,082		$	98,617

MASSROOTS, INC.
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
NINE MONTHS ENDED SEPTEMBER 30, 2017

Common stock Additional
Common stock To be issued Paid in Accumulated
Shares Amount Shares Amount Capital Deficit Total
Balance, December 31, 2016 71,908,370 $ 71,908 1,740,000 $ 1,740 $ 28,693,819 $ (29,862,645 ) $ (1,095,178 )
Common stock issued for services rendered 22,745,898 22,746 (1,005,141 ) (1,005 ) 14,182,514 —   14,204,255
Sale of common stock 2,085,000 2,085 309,000 309 1,195,606 —   1,198,000
Common stock issued upon exercise of warrants for cash 6,933,041 6,933 112,500 113 4,746,150 —   4,753,196
Common stock issued upon cashless exercise of options 41,153 41 394,858 394 (435 ) —   —
Common stock issued upon cashless exercise of warrants 355,689 356 —   —   (356 ) —   —
Common stock issued in settlement of convertible notes 1,081,000 1,081 —   —   107,019 —   108,100
Common stock issued to acquire Odava Inc. 3,250,000 3,250 —   —   1,963,000 —   1,966,250
Common stock issued to acquire DDDigtal Inc. 2,926,830 2,927 —   —   2,880,293 —   2,883,220
Reclassify fair value of liability warrants issued in connection with sale of common stock —   —   —   —   (1,003,870 ) —   (1,003,870 )
Reclassify fair value of derivative liability to equity upon warrant exercise(s) —   —   —   —   610,967 —   610,967
Stock based compensation —   —   —   —   5,678,272 —   5,678,272
Net loss —   —   —   —   —   (26,154,897 ) (26,154,897 )
Balance, September 30, 2017 (unaudited) 111,326,981 $ 111,327 1,551,217 $ 1,551 $ 59,052,979 $ (56,017,542 ) $ 3,148,315

See the accompanying notes to the unaudited condensed consolidated financial statements

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

MASSROOTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)

Nine months ended September 30,
2017 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (26,154,897 ) $ (8,255,104 )
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation 21,344 14,224
Amortization of debt discounts 187,272 1,549,669
Stock based compensation 19,882,527 2,496,873
Gain on sale of securities (75,000 ) —
Change in fair value of derivative liabilities (986,058 ) (1,320,654 )
Non-cash interest —   1,265,376
Penalties related to note maturity —   763,872
Changes in operating assets and liabilities:
Accounts receivable 6,889 (72,324 )
Prepaid and other (13,687 ) 12,938
Accounts payable and other liabilities (41,556 ) 629,298
Deferred revenue (27,010 ) —
  Net cash used in operating activities (7,200,176 ) (2,915,832 )

CASH FLOWS FROM INVESTING ACTIVITIES:
Cash acquired from acquisition of DDDigtal Inc 8,672 —
Cash acquired from acquisition of Odava, Inc. 2,601 —
Proceeds from sale of securities 250,000 —
Cash paid related to acquisition of Odava, Inc. (40,570 ) —
Purchase of equity investment (100,002 ) —
Purchase of convertible promissory note (300,000 ) —
Purchase of equipment (57,534 ) (19,100 )
  Net cash used in investing activities (236,833 ) (19,100 )

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of convertible notes 942,500 1,420,000
Proceeds from common stock sales 1,198,000 1,660,500
Proceeds from exercise of warrants 4,753,196 596,331
Proceeds from exercise of options —   25,000
Proceeds from related party advances 442,500 —
Repayments of loans (6,355 ) —
Repayments of convertible notes —   (1,026,600 )
  Net cash provided by financing activities 7,329,841 2,675,231

Net decrease in cash (107,168 ) (259,701 )

Cash, beginning of period 374,490 386,316
Cash , end of period $ 267,322 $ 126,615

MASSROOTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)

Nine months ended September 30,
2017 2016
Supplemental disclosures of cash flow information:
Cash paid during period for interest $ —   $ —
Cash paid during period for taxes $ —   $ —

Non cash investing and financing activities:
Common stock issued in settlement of debt $ 108,100 $ 447,085
Common stock issued in payment of penalties related to notes payable $ —   $ 163,621
Common stock issued to acquire DDDigtal Inc. $ 2,883,220 $ —
Net assets acquired from acquisition of DDDigtal Inc. $ 15,448 $ —
Common stock issued to acquire Odava, Inc. $ 1,966,250 $ —
Net assets acquired from acquisition of Odava, Inc. $ 2,601 $ —
Reclassification of liability warrants from equity in connection with the sale of common stock $ 1,003,870 $ —
Reclassification of derivative liability to equity upon note prepayment(s) $ —   $ 7,308
Reclassification of derivative liability to equity upon warrant exercise(s) $ 610,967 $ —

See the accompanying notes to the unaudited condensed consolidated financial statements

GREENWAVE TECHNOLOGY SOLUTIONS, INC.

(FORMERLY MASSROOTS, INC.)

~~MASSROOTS, INC.~~

~~NOTES TO~~ CONDENSED CONSOLIDATED ~~FINANCIAL~~ STATEMENTS OF OPERATIONS

(unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
	(As Restated)						(As Restated)

Revenues	$	54		$	2,316		$	1,660		$	2,316

Operating Expenses:
Cost of revenues		-			150			297			150
Advertising		(4,578	)		43,020			18,125			43,020
Payroll and related expense		66,693			63,879			225,603			239,770
Other general and administrative expenses		333,197			101,189			953,927			413,417
Total Operating Expenses		395,312			208,238			1,197,952			696,357

Loss From Operations		(395,258	)		(205,922	)		(1,196,292	)		(694,041	)

Other Income (Expense):
Interest expense		(1,191,405	)		(1,602,204	)		(2,159,564	)		(3,607,210	)
Change in derivative liability for authorized shares shortfall		2,641,481			66,572,635			(159,633,797	)		(43,406,183	)
Change in fair value of derivative liabilities		-			(85,287	)		300,885			303,593
Gain (loss) 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		(1,578,559	)		-			173,361,276			-
Gain on forgiveness of debt		-			-			192,521			-
Gain (loss) on conversion of convertible notes		-			-			(880	)		882
Total Other Income (Expense)		(128,483	)		64,885,144			12,060,441			(46,708,918	)

Net Income (Loss) Before Income Taxes		(523,741	)		64,679,222			10,864,149			(47,402,959	)

Provision for Income Taxes (Benefit)		-			-			-			-

Net Income (Loss)		(523,741	)		64,679,222			10,864,149			(47,402,959	)

Deemed dividend resulting from amortization of preferred stock discount		-			-			(34,798,923	)		-
Deemed dividend from warrant price protection		-			-			-			(95,002,933	)

Net Income (Loss) Available to Common Stockholders	$	(523,741	)	$	64,679,222		$	(23,934,774	)	$	(142,405,892	)

Net Income (Loss) Per Common Share:
Basic	$	-		$	0.05		$	(0.02	)	$	(0.10	)
Diluted	$	-		$	-		$	(0.02	)	$	(0.10	)

Weighted Average Common Shares Outstanding:
Basic		1,406,244,901			1,401,226,219			1,405,511,082			1,387,478,585
Diluted		1,406,244,901			40,198,748,273			1,405,511,082			1,387,478,585

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

GREENWAVE TECHNOLOGY SOLUTIONS, INC.

(FORMERLY MASSROOTS, INC.)

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, ~~2017~~2021

(unaudited)

(As Restated)

	Preferred Stock																				Common Stock				Additional
	Series X				Series Y				Series Z				Series C				Common Stock				to be Issued				Paid		Discount on		Accumulated
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		In Capital		Preferred Stock		Deficit			Total

Balance at June 30, 2021 (unaudited)		26.05	$	-		720.515674		1		-		-		1,000	$	1		499,871,337	$	499,871		906,373,564		906,374	$	298,648,071	$	-	$	(324,596,745	)	$	(24,542,427	)
Series Z preferred shares issued as equity kicker for note payable		-		-		-		-		250		-		-		-		-		-		-		-		867,213		-		-			867,213
Series Z preferred shares issued as part of settlement agmt		-		-		-		-		250		1		-		-		-		-		-		-		6,530,867		-		-			6,530,868
Net loss		-		-		-		-		-		-		-		-		-		-		-		-		-		-		(523,741	)		(523,741	)
Balance at September 30, 2021 (unaudited)		26.05	$	-		720.515674		1		500		1		1,000	$	1		499,871,337	$	499,871		906,373,564		906,374	$	306,046,151	$	-	$	(325,120,486	)	$	(17,668,087	)

	Preferred Stock																						Common Stock						Additional			Discount on
	Series X				Series Y				Series Z				Series C				Common Stock						to be Issued						Paid			Preferred			Accumulated
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Shares			Amount			Shares			Amount			In Capital			Stock			Deficit			Total

Balance at December 31, 2020		16.05	$	-		654.781794		1		-		-		1,000	$	1		493,726,405		$	493,727			907,379,814			907,380		$	283,024,527		$	(20,973,776	)	$	(301,185,712	)	$	(37,733,852	)
Issuance of common shares previously to be issued		-		-		-		-		-		-		-		-		1,006,250			1,006			(1,006,250	)		(1,006	)		-			-			-			-
Issuance of common shares for services rendered		-		-		-		-		-		-		-		-		2,175,431			2,175			-			-			164,680			-			-			166,855
Common shares issued upon conversion of convertible notes		-		-		-		-		-		-		-		-		4,448,251			4,448			-			-			128,554			-			-			133,002
Cancelation of common shares and warrants in exchange for cash paid per cancelation agreement		-		-		-		-		-		-		-		-		(1,485,000	)		(1,485	)		-			-			(9,515	)		-			-			(11,000	)
Sale of Series X preferred shares		10.00		-		-		-		-		-		-		-		-			-			-			-			200,000			-			-			200,000
BCF recognized upon issuance of Series X preferred shares		-		-		-		-		-		-		-		-		-			-			-			-			2,852,500			(2,852,500	)		-			-
Series Y preferred shares issued in exchange for convertible notes, accrued interest and warrants		-		-		65.733880		-		-		-		-		-		-			-			-			-			1,314,678			-			-			1,314,678
BCF recognized upon issuance of Series Y preferred shares		-		-		-		-		-		-		-		-		-			-			-			-			10,972,647			(10,972,647	)		-			-
Deemed dividend resulting from amortization of preferred stock discount		-		-		-		-		-		-		-		-		-			-			-			-			-			34,798,923			(34,798,923	)		-
Series Z preferred shares issued as equity kicker for note payable		-		-		-		-		250		-		-		-		-			-			-			-			867,213			-			-			867,213
Series Z preferred shares issued as part of settlement agmt		-		-		-		-		250		1		-		-		-			-			-			-			6,530,867			-			-			6,530,868
Net income		-		-		-		-		-		-		-		-		-			-			-			-			-			-			10,864,149			10,864,149
Balance at September 30, 2021 (unaudited)		26.05	$	-		720.515674		1		500		1		1,000	$	1		499,871,337		$	499,871			906,373,564			906,374		$	306,046,151		$	-		$	(325,120,486	)	$	(17,668,087	)

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

GREENWAVE TECHNOLOGY SOLUTIONS, INC.

(FORMERLY MASSROOTS, INC.)

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2020

(unaudited)

	Preferred Stock												Common Stock				Additional
	Series B				Series C				Common Stock				to be Issued				Paid		Accumulated
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		In Capital		Deficit			Total

Balance at June 30, 2020 (unaudited)		-	$	-		1,000	$	1		493,726,405	$	493,727		907,499,814	$	907,500		246,665,759		(396,647,339	)	$	(148,580,352	)
Net income		-		-		-		-		-		-		-		-		-		64,679,222			64,679,222
Balance at September 30, 2020 (unaudited)		-	$	-		1,000	$	1		493,726,405	$	493,727		907,499,814	$	907,500		246,665,759		(331,968,117	)	$	(83,901,130	)

	Preferred Stock														Common Stock						Additional
	Series B				Series C				Common Stock						to be Issued						Paid		Accumulated
	Shares		Amount		Shares		Amount		Shares			Amount			Shares			Amount			In Capital		Deficit			Total

Balance at December 31, 2019		-	$	-		1,000	$	1		384,266,948		$	384,267			944,659,814		$	944,660			151,364,371		(189,562,225	)	$	(36,868,926	)
Issuance of common shares previously to be issued		-		-		-		-		37,160,000			37,160			(37,160,000	)		(37,160	)		-		-			-
Common shares issued upon conversion of convertible notes and accrued interest		-		-		-		-		72,368,457			72,369			-			-			298,386		-			370,755
Common shares contributed back to the Company and promptly retired		-		-		-		-		(69,000	)		(69	)		-			-			69		-			-
Deemed dividend related to warrant price protection		-		-		-		-		-			-			-			-			95,002,933		(95,002,933	)		-
Net loss		-		-		-		-		-			-			-			-			-		(47,402,959	)		(47,402,959	)
Balance at September 30, 2020 (unaudited)		-	$	-		1,000	$	1		493,726,405		$	493,727			907,499,814		$	907,500			246,665,759		(331,968,117	)	$	(83,901,130	)

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

GREENWAVE TECHNOLOGY SOLUTIONS, INC.

(FORMERLY MASSROOTS, INC.)

CONDENSED CONSOLIDATED STATEMENTS OF CASHFLOWS

(unaudited)

	Nine Months Ended September 30,
	2021			2020
	(As Restated)
Cash flows from operating activities:
Net income (loss)	$	10,864,149		$	(47,402,959	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Change in fair value of derivative liabilities		(300,885	)		(303,593	)
Change in derivative liability for authorized shares shortfall		159,633,797			43,406,183
Interest and amortization of debt discount		2,157,964			3,607,210
(Gain) loss on conversion of convertible notes payable		880			(882	)
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		(173,361,276	)		-
Gain on forgiveness of debt		(192,521	)		-
Share-based compensation		166,855			-
Expenses paid directly by non-convertible note holder on behalf of company		158,371			-
Changes in operating assets and liabilities:
Prepaid expenses		97,132			1,975
Accounts payable and accrued expenses		187,022			(119,176	)
Accrued payroll and related expenses		173,243			94,180
Deferred revenue		25,000			-
Net cash used in operating activities		(390,269	)		(717,062	)

Cash flows from financing activities:
Bank overdrafts		-			(13,678	)
Proceeds from sale of Series X preferred shares		200,000			-
Proceeds from issuance of convertible notes payable		-			637,000
Proceeds from issuance of non-convertible notes payable		357,053			132,911
Repayment of non-convertible notes payable		-			(39,641	)
Proceeds from advances		28,991			-
Repayments of advances		(20,178	)		-
Cash paid in settlement of debt and warrants		(176,000	)		-
Net cash provided by financing activities		389,866			716,592

Net decrease in cash		(403	)		(470	)

Cash, beginning of period		1,485			1,120

Cash, end of period	$	1,082		$	650

Supplemental disclosures of cash flow information:
Cash paid during period for interest	$	1,600		$	-
Cash paid during period for taxes	$	-		$	-

Supplemental disclosure of non-cash investing and financing activities:
Amortization of discount on preferred stock	$	34,798,923		$	-
Common shares issued upon conversion of convertible notes and accrued interest	$	133,002		$	370,755
Series Y preferred shares issued as settlement for convertible notes payable, accrued interest and warrants	$	1,314,678		$	-
Issuance of common shares previously to be issued	$	1,006		$	37,160
Common shares contributed back to the Company and promptly retired	$	-		$	69
Deemed dividend related to warrant price protection	$	-		$	95,002,933
Derivative liability recognized as debt discount on newly issued convertible notes	$	-		$	528,076
Reclassify accrued interest to convertible notes payable	$	93,685		$	-
Reduction of derivative liabilities stemming from settlement of convertible notes payable, accrued interest and warrants in exchange for Series Y preferred shares	$	4,834,911		$	-
Reduction of derivative liabilities stemming from settlement of convertible notes payable and accrued interest and cancelation of common shares and warrants for cash	$	169,815,037		$	-
Series Z preferred shares issued as equity kicker for note payable	$	867,213		$	-
Series Z preferred shares issued as part of settlement agreement	$	6,530,868		$	-
Expenses paid directly by non-convertible note holder on behalf of company	$	158,371		$	-
Settlement paid directly by CEO on behalf of company	$	1,000,000		$	-
Settlement payment made directly by CEO on behalf of company	$	25,000		$	-

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

GREENWAVE TECHNOLOGY SOLUTIONS, INC.

(FORMERLY MASSROOTS, INC.)

Notes to Condensed Consolidated Financial Statements

September 30, 2021 (Unaudited)

(As Restated)

NOTE 1 – NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Overview

~~MassRoots,~~

Greenwave Technology Solutions, Inc. (“~~MassRoots”~~Greenwave” or the “Company”) ~~has created~~is a technology ~~platform for the cannabis industry~~company focused on ~~enabling users~~developing cloud-based solutions to ~~share their cannabis~~deliver informative content ~~follow their favorite dispensaries,~~ and ~~stay connected with the legalization movement.~~improve operating efficiencies. The Company was incorporated in the State of Delaware on April 26, ~~2013.~~2013 under the name MassRoots, Inc.

~~The accompanying~~Our unaudited condensed consolidated financial statements include the accounts of DDDigtal, Inc., Odava, Inc., MassRoots Supply Chain, Inc., and MassRoots Blockchain Technologies, Inc., our wholly-owned subsidiaries.

Basis of Presentation

The interim unaudited condensed consolidated financial statements included herein have been prepared ~~in accordance with accounting principles generally accepted in~~by the ~~United States of America (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all~~Company, without audit, pursuant to the rules and regulations of the ~~information~~Securities and ~~disclosures required by U.S. GAAP for annual financial statements.~~Exchange Commission (the “SEC”). In the opinion of the Company’s management, ~~such statements include~~ all adjustments (consisting ~~only~~ of normal recurring ~~items) which are considered~~adjustments and reclassifications and non-recurring adjustments) necessary ~~for a fair presentation of~~to present fairly the ~~condensed consolidated financial statements of the Company as of September 30, 2017 and for the three and nine months ended September 30, 2017 and 2016. The~~Company’s results of operations for the three and nine months ended September 30, ~~2017~~2021 and 2020, its cash flows for the nine months ended September 30, 2021 and 2020, and its financial position as of September 30, 2021 have been made. The results of operations for such interim periods are not necessarily indicative of the operating results to be expected for the full ~~year ending December 31, 2017,~~year.

Certain information and disclosures normally included in the notes to the annual consolidated financial statements have been condensed or ~~any other period. These~~omitted from these interim unaudited condensed consolidated financial statements. Accordingly, these interim unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and ~~related disclosures of~~notes thereto included in our Annual Report on Form 10-K for the ~~Company as of~~fiscal year ended December 31, ~~2016 and for the year then ended, which were~~2020 as filed with the ~~Securities and Exchange Commission~~SEC on ~~Form 10-K on March~~April 16, 2021 (the “Annual Report”). The December 31, ~~2017.~~2020 balance sheet is derived from those statements.

NOTE 2 – RESTATEMENT

~~Acquisitions~~

~~DDDigtal Inc.~~

~~On December 15, 2016,~~Due to a communication issue, the Company ~~entered into an Agreement~~filed the Original 10-Q for the three and ~~Plan of Merger (the “Merger Agreement”) with Whaxy Inc., a wholly-owned subsidiary~~nine months ended September 30, 2021 prior to the completion of the required pre-issuance review by its independent accountant.

Accordingly, the Company (“Merger Subsidiary”), DDDigtal Inc., a Colorado corporation (“DDDigtal”), Zachary Marburger, an individual acting solely in his capacity as Stockholder Representative, and all of the stockholders of DDDigtal. Pursuant to the Merger Agreement, the parties agreed to merge Merger Subsidiary with and into DDDigtal, whereby DDDigtal survived as a wholly-owned subsidiary of MassRoots (the “Merger”).

On January 25, 2017 (the “Effective Date”), the Merger was completed and became effective upon the filing of certificates of merger with the respective Secretary of State of the States of Delaware and Colorado, in such forms as required by, and executed in accordance with, the relevant provisions of the Delaware General Corporation Lawis restating herein its previously issued condensed consolidated financial statements and the ~~Colorado Business Corporation Act.~~related disclosures for the three and nine months ended September 30, 2021 (the “Restated Period”) following the completion of a pre-issuance review by its independent accountant.

The financial statement misstatements reflected in previously issued condensed consolidated interim financial statements have been changed as follows:

~~Pursuant to the terms~~

Accounts payable and accrued expenses increased by $12,200 with a corresponding decrease in Gain (loss) on settlement of ~~the Merger Agreement, each share~~convertible notes payable and accrued interest, warrants and accounts payable and cancelation of ~~DDDigtal’s common stock was to be exchanged for a number of~~commons shares of the Company’s 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 the Company’s’ common stock was issued for every 5.273 shares of DDDigtal’s common stock.

~~On the Effective Date, the Company issued 2,926,830 shares of the Company’s common stock~~~~pro rata~~ ~~to all stockholders of DDDigtal (the “Share Consideration”)~~ in exchange for ~~all~~Series Y and Series Z preferred shares and cash.

Debt discount recognized upon the issuance of ~~their~~250 Series Z shares of DDDigtal’s common stock. At the same time, each share of the common stock of Merger Subsidiary was converted into and exchanged for one share of common stock of DDDigtal held by the Company, and all shares of DDDigtal common stock outstanding immediately prior to the ~~Effective Date automatically cancelled~~Chief Executive Officer increased by $479,951 with a corresponding increase in Additional paid-in capital.

Amortization of debt discount to Interest expense was increased by $479,951 with a corresponding reduction of Debt discount on non-convertible notes payable.

Gain (loss) on settlement of convertible notes payable and ~~retired. DDDigtal continued as a surviving wholly-owned subsidiary~~accrued interest, warrants and accounts payable and cancelation of ~~the Company, and Merger Subsidiary ceased to exist.~~

Also pursuant to the terms of the Merger Agreement, the Company paid cash consideration, in December 2016, of $40,000 to Zachary Marburger and $20,000 to Micah Davidson, as repayment of outstanding debts owed by DDDigtal to the individuals.

~~MASSROOTS, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~SEPTEMBER 30, 2017~~

~~(unaudited)~~

As a condition to the closing of the Merger, the Company hired Zachary Marburger as its Vice President of Strategy, and engaged Micah Davidson as a Senior Software Engineer. As a condition of Mr. Marburger’s employment and pursuant to the Merger Agreement, the Company will pay Mr. Marburger an additional $40,000 following the one-year anniversary of his constant employment with the Company.

~~A summary of consideration is as follows:~~

Cash (paid in December 2016) $ 60,000
2,926,830 shares of the Company’s common stock 2,883,220
Liabilities assumed 40,140
Total purchase price $ 2,983,360

~~The following summarizes the current estimates of fair value of assets acquired and liabilities assumed:~~

Cash $ 8,672
Accounts receivable 3,583
Property and equipment 3,333
Goodwill 2,967,772
Assets acquired $ 2,983,360

The above estimated fair value of the intangible assets is based on a preliminary purchase price allocation prepared by management. As a result, during the preliminary purchase price allocation period, which may be up to one year from the business combination date, we may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. After the preliminary purchase price allocation period, we record adjustments to assets acquired or liabilities assumed subsequent to the purchase price allocation period in our operating results in the period in which the adjustments were determined.

~~Pro forma Results~~

The following tables set forth the unaudited pro forma results of the Company as if the acquisition of DDDigtal had taken place on the first day of the periods presented. These combined results are not necessarily indicative of the results that may have been achieved had the companies been combined as of the first day of the periods presented.

Three
months ended
September 30, 2017

Three
months ended
September 30, 2016
Total revenues $ 11,516 $ 232,313
Net loss (7,077,066 ) (7,263,951 )
Basic and diluted net loss per common share $ (0.07 ) $ (0.07 )

Nine
months ended
September 30, 2017

Nine
months ended
September 30, 2016
Total revenues $ 289,130 $ 833,304
Net loss (26,154,897 ) (8,373,192 )
Basic and diluted net loss per common share $ (0.28 ) $ (0.17 )

~~MASSROOTS, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~SEPTEMBER 30, 2017~~

~~(unaudited)~~

~~Odava, Inc.~~

On July 5, 2017, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with MassRoots Compliance Technology, Inc., a wholly-owned subsidiary of he Company (“Merger Subsidiary”), Odava, Inc., a Delaware corporation (“Odava”), and Scott Kveton, an individual acting solely in his capacity as a stockholder representative (“Stockholder Representative”). Pursuant to the Merger Agreement, the parties agreed to merge Merger Subsidiary with and into Odava, whereby Odava survived as a wholly-owned subsidiary of MassRoots (the “Merger”).

On July 13, 2017 (the “Effective Date”), the Merger was completed and became effective upon the filing of a certificate of merger with the Secretary of State of the State of Delaware, in the form as required by and executed in accordance with Title 8, Section 251(c) of the Delaware General Corporation Law. A copy of the certificate of merger is filed as Exhibit 3.1 hereto, and is hereby incorporated by reference into this Item 2.01.

~~Pursuant to the terms of the Merger Agreement, each share of Odava’s common stock was to be exchanged for a number of~~commons shares of MassRoots’ Common Stock (or a fraction thereof), based on an exchange ratio, as ultimately calculated, equal to approximately 4.069-for-1, such that one share of MassRoots’ Common Stock was issued for approximately every 4.069 shares of Odava’s common stock.

~~On the Effective Date, the Company issued 3,250,000 shares of common stock~~~~pro rata~~ ~~to all stockholders of Odava (the “Share Consideration”)~~ in exchange for ~~all~~Series Y and Series Z preferred shares and cash was decreased by $5,898,848 with a corresponding increase in Additional paid-in capital.

For Non-convertible notes payable, $493 was reclassified from long-term to current liabilities.

The statement of ~~their shares of Odava’s common stock. At the same time, shares of the common stock of Merger Subsidiary were converted into and exchanged~~cashflows for one share of common stock of Odava held by the Company, and all shares of Odava common stock outstanding immediately prior to the Effective Date automatically cancelled and retired. Odava continued as a surviving wholly-owned subsidiary of Massroots, and Merger Subsidiary ceased to exist. In addition, the Company issued 2,600,000 shares of common stock to the founders of Odava in connection with the acquisition

Also pursuant to the terms of the Merger Agreement, MassRoots paid cash consideration of $30,000 to Scott Kveton and $5,000 to Steven Osborn, as repayment of outstanding debts at closing owed by Odava to the individuals.

~~As a condition to the closing of the Merger, the Company hired Scott Kveton as its new Director of Business Development, and Steven Osborn as its Principal Architect.~~

~~A summary of consideration is as follows:~~

Cash and costs incurred $ 40,570
2,926,830 shares of the Company’s common stock 1,966,250
Total purchase price $ 2,006,820

~~The following summarizes the current estimates of fair value of assets acquired and liabilities assumed:~~

Cash $ 2,601
Goodwill 2,004,219
Assets acquired $ 2,006,820

~~MASSROOTS, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~SEPTEMBER 30, 2017~~

~~(unaudited)~~

~~Pro forma results~~

The following tables set forth the unaudited pro forma results of the Company as if the acquisition of Odava had taken place on the first day of the periods presented. These combined results are not necessarily indicative of the results that may have been achieved had the companies been combined as of the first day of the periods presented.

Three
months ended
September 30, 2017

Three
months ended
September 30, 2016
Total revenues $ 11,516 $ 209,003
Net loss (7,077,066 ) (3,452,664 )
Basic and diluted net loss per common share $ (0.07 ) $ (0.07 )

Nine
months ended
September 30, 2017

Nine
months ended
September 30, 2016
Total revenues $ 289,130 $ 794,621
Net loss (26,154,897 ) (8,277,114 )
Basic and diluted net loss per common share $ (0.28 ) $ (0.17 )

The Company accounts for acquisitions in accordance with the provisions of Accounting Standards Codification (“ASC”) 805-Business Combinations (“ASC 805”). The Company assigns to all identifiable assets acquired a portion of the cost of the acquired company equal to the estimated fair value of such assets at the date of acquisition. The Company records the excess of the cost of the acquired company over the sum of the amounts assigned to identifiable assets acquired as goodwill.

~~The Company recorded goodwill in the aggregate amount of $4,971,991 as a result of the acquisitions of DDDitgal and Odava during~~ the nine months ended September 30, ~~2017.~~2021 was revised to reflect non-cash transactions including: (i) expenses paid directly by creditors on behalf of the Company; (ii) a settlement paid directly by the Chief Executive Officer on behalf of the Company; and (iii) a settlement payment made directly by the Chief Executive Officer on behalf of the Company.

Accordingly, the following notes to the financial statements have been restated to reflect the corrections of misstatements discussed above as well as to add disclosure language as appropriate:

Note 3 – Going Concern and Management’s Liquidity Plans

Note 4 – Summary of Significant Accounting Policies

Note 6 – Advances, Non-Convertible Notes Payable and PPP Note Payable

Note 7 – Accounts Payable and Accrued Expenses

Note 9 – Commitments and Contingencies

Note 12 – Stockholders’ Deficit

Note 13 - Warrants

Note 15 – Related Party Transactions

The Company accounts for and reports acquired goodwill under ASC subtopic 350-10, Intangibles-Goodwill and Other (“ASC 350-10”). In accordance with ASC 350-10, at least annually, the Company tests its intangible assets for impairment or more often if events and circumstances warrant. Any write-downs will be included in results from operations.Note 16 – Subsequent Events

Comparison of restated financial statements to financial statements as previously reported

The following tables compare the Company’s previously issued condensed Consolidated Balance Sheets, condensed Consolidated Statements of Operations, and condensed Consolidated Statements of Cashflows as of and for the fiscal periods ended September 30, 2021 to the corresponding restated condensed consolidated interim financial statements for those respective periods.

Restated condensed consolidated balance sheet as of September 30, 2021 and statements of operations and statements of cashflows for the fiscal periods ended September 30, 2021 are as follows:

GREENWAVE TECHNOLOGY SOLUTIONS, INC.

(FORMERLY MASSROOTS, INC.)

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

	September 30,			Restatement			September 30,
	2021			Adjustment			2021
	(As Reported)						(As Restated)

ASSETS
Current assets:
Cash	$	1,082		$	-		$	1,082
Prepaid expenses		-			-			-
Total current assets		1,082			-			1,082

Total assets	$	1,082		$	-		$	1,082

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
Accounts payable and accrued expenses	$	4,218,421		$	24,400		$	4,242,821
Accrued payroll and related expenses		4,037,298			-			4,037,298
Deferred revenue		25,000			-			25,000
Advances		122,000			-			122,000
Non-convertible notes payable, current portion, net of debt discount of $15,862 and $0, respectively		1,759,589			493			1,760,082
Derivative liabilities		4,289,634			-			4,289,634
Convertible notes payable		3,063,970			-			3,063,970
Total current liabilities		17,515,912			24,893			17,540,805

Non-convertible notes payable, net of debt discount of $1,636 and $0, respectively		128,857			(493	)		128,364
PPP note payable		-			-			-
Total liabilities		17,644,769			24,400			17,669,169

Commitments and contingencies (See Note 9)

Stockholders' deficit:
Preferred stock - 10,000,000 shares authorized:
Preferred stock - Series X, $0.0001 par value, $20,000 stated value, 100 shares authorized; 26.05 and 16.05 shares issued and outstanding, respectively		-			-			-
Preferred stock - Series Y, $0.001 par value, $20,000 stated value, 1,000 shares authorized; 720.515674 and 654.781794 shares issued; 720.515674 and 626.995464 shares outstanding, and 0 and 27.78633 to be issued, respectively		1			-			1
Preferred stock - Series Z, $0.001 par value, $20,000 stated value, 500 shares authorized; 500 and 0 shares issued; 0 and 0 shares outstanding, and 500 and 0 to be issued, respectively		1			-			1
Preferred stock - Series C, $0.001 par value, 1,000 shares authorized; 1,000 shares issued and outstanding		1			-			1
Preferred stock - Series A, $0.001 par value, 6,000 shares authorized; 0 shares issued and outstanding		-			-			-
Preferred stock - Series B, $0.001 par value, 2,000 shares authorized; 0 shares issued and outstanding		-			-			-
Common stock, $0.001par value, 1,200,000,000 shares authorized; 499,871,337 and 493,726,405 shares issued and outstanding, respectively		499,871			-			499,871
Common stock to be issued, 906,373,564 and 907,379,814 shares, respectively		906,374			-			906,374
Additional paid in capital		299,667,352			6,378,799			306,046,151
Discount on preferred stock		-			-			-
Accumulated deficit		(318,717,287	)		(6,403,199	)		(325,120,486	)
Total stockholders' deficit		(17,643,687	)		(24,400	)		(17,668,087	)

Total liabilities and stockholders' deficit	$	1,082		$	-		$	1,082

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

GREENWAVE TECHNOLOGY SOLUTIONS, INC.

(FORMERLY MASSROOTS, INC.)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

	Three Months Ended September 30, 2021			Restatement Adjustment			Three Months Ended September 30, 2021
	(As Reported)						(As Restated)

Revenues	$	54		$	-		$	54

Operating Expenses:
Cost of revenues		-			-			-
Advertising		(4,578	)		-			(4,578	)
Payroll and related expense		66,693			-			66,693
Other general and administrative expenses		333,197			-			333,197
Total Operating Expenses		395,312			-			395,312

Loss From Operations		(395,258	)		-			(395,258	)

Other Income (Expense):
Interest expense		(699,254	)		(479,951	)		(1,179,205	)
Change in derivative liability for authorized shares shortfall		2,641,481			-			2,641,481
Change in fair value of derivative liabilities		-			-			-
Gain (loss) 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		4,332,489			(5,923,248	)		(1,590,759	)
Gain on forgiveness of debt		-			-			-
Gain (loss) on conversion of convertible notes		-			-			-
Total Other Income (Expense)		6,274,716			(6,403,199	)		(128,483	)

Net Income (Loss) Before Income Taxes		5,879,458			(6,403,199	)		(523,741	)

Provision for Income Taxes (Benefit)		-			-			-

Net Income (Loss)		5,879,458			(6,403,199	)		(523,741	)

Deemed dividend resulting from amortization of preferred stock discount		-			-			-
Deemed dividend from warrant price protection		-			-			-

Net Income (Loss) Available to Common Stockholders	$	5,879,458		$	(6,403,199	)	$	(523,741	)

Net Income (Loss) Per Common Share:
Basic	$	-		$	-		$	-
Diluted	$	-		$	-		$	-

Weighted Average Common Shares Outstanding:
Basic		1,406,244,901			-			1,406,244,901
Diluted		1,406,244,901			-			1,406,244,901

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

GREENWAVE TECHNOLOGY SOLUTIONS, INC.

(FORMERLY MASSROOTS, INC.)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

	Nine Months Ended September 30, 2021			Restatement Adjustment			Nine Months Ended September 30, 2021
	(As Reported)						(As Restated)

Revenues	$	1,660		$	-		$	1,660

Operating Expenses:
Cost of revenues		297			-			297
Advertising		18,125			-			18,125
Payroll and related expense		225,603			-			225,603
Other general and administrative expenses		953,927			-			953,927
Total Operating Expenses		1,197,952			-			1,197,952

Loss From Operations		(1,196,292	)		-			(1,196,292	)

Other Income (Expense):
Interest expense		(1,667,413	)		(492,151	)		(2,159,564	)
Change in derivative liability for authorized shares shortfall		(159,633,797	)		-			(159,633,797	)
Change in fair value of derivative liabilities		300,885			-			300,885
Gain (loss) 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		179,272,324			(5,911,048	)		173,361,276
Gain on forgiveness of debt		192,521			-			192,521
Gain (loss) on conversion of convertible notes		(880	)		-			(880	)
Total Other Income (Expense)		18,463,640			(6,403,199	)		12,060,441

Net Income (Loss) Before Income Taxes		17,267,348			(6,403,199	)		10,864,149

Provision for Income Taxes (Benefit)		-			-			-

Net Income (Loss)		17,267,348			(6,403,199	)		10,864,149

Deemed dividend resulting from amortization of preferred stock discount		(34,798,923	)		-			(34,798,923	)
Deemed dividend from warrant price protection		-			-			-

Net Income (Loss) Available to Common Stockholders	$	(17,531,575	)	$	(6,403,199	)	$	(23,934,774	)

Net Income (Loss) Per Common Share:
Basic	$	(0.01	)	$	(0.01	)	$	(0.02	)
Diluted	$	(0.01	)	$	(0.01	)	$	(0.02	)

Weighted Average Common Shares Outstanding:
Basic		1,405,511,082			-			1,405,511,082
Diluted		1,405,511,082			-			1,405,511,082

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

GREENWAVE TECHNOLOGY SOLUTIONS, INC.

(FORMERLY MASSROOTS, INC.)

CONDENSED CONSOLIDATED STATEMENTS OF CASHFLOWS

(unaudited)

	Nine Months Ended September 30, 2021			Restatement Adjustment			Nine Months Ended September 30, 2021
	(As Reported)						(As Restated)
Cash flows from operating activities:
Net income (loss)	$	17,267,348		$	(6,403,199	)	$	10,864,149
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Change in fair value of derivative liabilities		(300,885	)		-			(300,885	)
Change in derivative liability for authorized shares shortfall		159,633,797			-			159,633,797
Interest and amortization of debt discount		1,665,813			492,151			2,157,964
(Gain) loss on conversion of convertible notes payable		880			-			880
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		(179,272,324	)		5,911,048			(173,361,276	)
Gain on forgiveness of debt		(192,521	)		-			(192,521	)
Share-based compensation		166,855			-			166,855
Expenses paid directly by non-convertible note holder on behalf of company		-			158,371			158,371
Changes in operating assets and liabilities:
Prepaid expenses		97,132			-			97,132
Accounts payable and accrued expenses		187,022			-			187,022
Accrued payroll and related expenses		173,243			-			173,243
Deferred revenue		25,000			-			25,000
Net cash used in operating activities		(548,640	)		158,371			(390,269	)

Cash flows from financing activities:
Bank overdrafts		-			-			-
Proceeds from sale of Series X preferred shares		200,000			-			200,000
Proceeds from issuance of convertible notes payable		-			-			-
Proceeds from issuance of non-convertible notes payable		1,515,424			(1,158,371	)		357,053
Repayment of non-convertible notes payable		(25,000	)		25,000			-
Proceeds from advances		53,991			(25,000	)		28,991
Repayments of advances		(20,178	)		-			(20,178	)
Cash paid in settlement of debt and warrants		(1,176,000	)		1,000,000			(176,000	)
Net cash provided by financing activities		548,237			(158,371	)		389,866

Net decrease in cash		(403	)		-			(403	)

Cash, beginning of period		1,485			-			1,485

Cash, end of period	$	1,082		$	-		$	1,082

Supplemental disclosures of cash flow information:
Cash paid during period for interest	$	1,600		$	-		$	1,600
Cash paid during period for taxes	$	-		$	-		$	-

Supplemental disclosure of non-cash investing and financing activities:
Amortization of discount on preferred stock	$	34,798,923		$	-		$	34,798,923
Common shares issued upon conversion of convertible notes and accrued interest	$	133,002		$	-		$	133,002
Series Y preferred shares issued as settlement for convertible notes payable, accrued interest and warrants	$	1,314,678		$	-		$	1,314,678
Issuance of common shares previously to be issued	$	1,006		$	-		$	1,006
Common shares contributed back to the Company and promptly retired	$	-		$	-		$	-
Deemed dividend related to warrant price protection	$	-		$	-		$	-
Derivative liability recognized as debt discount on newly issued convertible notes	$	-		$	-		$	-
Reclassify accrued interest to convertible notes payable	$	93,685		$	-		$	93,685
Reduction of derivative liabilities stemming from settlement of convertible notes payable, accrued interest and warrants in exchange for Series Y preferred shares	$	4,834,911		$	-		$	4,834,911
Reduction of derivative liabilities stemming from settlement of convertible notes payable and accrued interest and cancelation of common shares and warrants for cash	$	169,815,037		$	-		$	169,815,037
Series Z preferred shares issued as equity kicker for note payable	$	387,262		$	479,951		$	867,213
Series Z preferred shares issued as part of settlement agreement	$	632,020		$	5,898,848		$	6,530,868
Expenses paid directly by non-convertible note holder on behalf of company	$	-		$	158,371		$	158,371
Settlement paid directly by CEO on behalf of company	$	-		$	1,000,000		$	1,000,000
Settlement payment made directly by CEO on behalf of company	$	-		$	25,000		$	25,000

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

NOTE ~~2 –GOING~~3 – GOING CONCERN AND MANAGEMENT’S LIQUIDITY PLANS

As of September 30, ~~2017,~~2021, the Company had cash of ~~$267,322~~$1,082 and a working capital deficit (current liabilities in excess of current assets) of ~~$2,377,272.~~$17,539,723. During the nine months ended September 30, ~~2017,~~2021, the ~~Company used~~net loss available to common stockholders was $23,934,774 and net cash used in operating activities ~~of $7,200,176.~~was $390,269. These conditions raise substantial doubt about the Company’s ability to continue as a going ~~concern.~~

concern for one year from the issuance of the unaudited condensed consolidated financial statements.

InDuring the ~~first~~ nine months ~~of 2017,~~ended September 30, 2021, the Company received ~~$4,753,196, $942,500, $1,198,000~~proceeds of $200,000 and ~~$442,500~~$357,053 from the ~~exercise of common stock warrants, proceeds from~~ issuance of ~~convertible~~preferred shares and non-convertible notes, ~~sale of common stock and related party advances,~~ respectively. The Company does not have sufficient cash ~~sufficient~~ to fund ~~operations.~~

operations for the next fiscal year.

The Company’s primary source of operating funds since inception has been cash proceeds from the public and private placements of ~~common stock,~~the Company’s securities, including debt and equity securities, and proceeds from the exercise of warrants and ~~options and issuance of notes payable.~~options. The Company has experienced net losses and negative cash flows from operations since inception and expects these conditions to continue for the foreseeable future. The Company’s ability to continue its operations is dependent upon its ability to obtain additional capital through public or private equity offerings, debt financings or other sources; however, financing may not be available to the Company ~~will require additional financing~~on acceptable terms, or at all. The Company’s failure to ~~fund future~~raise capital as and when needed could have a negative impact on its financial condition and its ability to pursue its business strategy, and the Company may be forced to curtail or cease operations.

~~MASSROOTS, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~SEPTEMBER 30, 2017~~

~~(unaudited)~~

Management’s plans ~~with regard to~~regarding these matters encompass the following actions: 1) obtain funding from new and ~~potentially~~ current investors to alleviate the Company’s working capital ~~deficiency,~~deficiency; and 2) implement a plan to ~~generate sales.~~increase revenues. The Company’s continued existence is dependent upon its ability to translate its ~~user base~~audience into ~~sales.~~revenues. However, the outcome of management’s plans cannot be ~~ascertained~~determined with any degree of certainty.

Accordingly, the accompanying unaudited condensed ~~interim~~consolidated financial statements have been prepared ~~in conformity with U.S. GAAP, which contemplates continuation of the Company as~~on a going concern ~~and~~basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of ~~business.~~business for one year from the date the unaudited condensed consolidated financial statements are issued. The carrying amounts of assets and liabilities presented in the unaudited condensed consolidated financial statements do not necessarily purport to represent realizable or settlement values. The unaudited condensed ~~interim~~consolidated financial statements do not include any ~~adjustment~~adjustments that might result ~~from~~should the ~~outcome~~Company be unable to continue as a going concern.

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

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

NOTE 34 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The ~~accompanying~~unaudited condensed consolidated financial statements include the accounts of ~~MassRoots,~~Greenwave Technology Solutions, Inc. and its ~~wholly owned operating~~wholly-owned subsidiaries. All ~~material~~ intercompany ~~accounts~~balances and transactions ~~are~~have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with ~~US GAAP~~accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include stock-based compensation, fair values relating to derivative liabilities, fair value of payroll tax liabilities, deemed dividends and the valuation allowance related to deferred tax assets. Actual results may differ from these estimates.

Fair Value of Financial Instruments

The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) ~~subtopic~~Subtopic 825-10, ~~Financial Instruments~~“Financial Instruments” (“ASC 825-10”) requires disclosure of the fair value of certain financial instruments. The ~~carrying~~estimated fair value of certain financial instruments, including cash, ~~and cash equivalents, accounts receivable,~~ accounts payable and accrued liabilities ~~as reflected in the balance sheets, approximate~~are carried at historical cost basis, which approximates their fair value because of the short-term maturity of these instruments. All other significant financial assets, financial liabilities and equity instruments of the Company are either recognized or disclosed in the condensed consolidated financial statements together with other information relevant for making a reasonable assessment of future cash flows, interest rate risk and credit risk.

The Company follows ASC 825-10, which permits entities to choose to measure many financial instruments and certain other items at fair value.

Cash ~~and Cash Equivalents~~

For purposes of the ~~Statement~~unaudited condensed consolidated statements of ~~Cash Flows,~~cash flows, the Company considers highly liquid investments with an original maturity of three months or less to be cash equivalents. As of September 30, 2021 and December 31, 2020, the Company had no cash equivalents. The Company maintains its cash in banks insured by the Federal Deposit Insurance Corporation in accounts that at times may be in excess of the federally insured limit of $250,000 per bank. The Company minimizes this risk by placing its cash deposits with major financial institutions. At September 30, 2021 and December 31, 2020, the uninsured balances amounted to $0.

Property and Equipment

Property and equipment are stated at cost and depreciated using the straight-line method over their estimated useful lives of 3three to 5five years. Repair and maintenance costs are expensed as incurred. When retired or otherwise disposed, the related carrying value and accumulated depreciation are removed from the respective accounts and the net difference less any amount realized from disposition is reflected in earnings.

~~MASSROOTS, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~SEPTEMBER 30, 2017~~

~~(unaudited)~~

Accounts Receivable and Allowance for Doubtful Accounts

The Company monitors outstanding receivables based on factors surrounding the credit risk of specific customers, historical trends, and other information. The allowance for doubtful accounts is estimated based on an assessment of the Company’s ability to collect on customer accounts receivable. There is judgment involved with estimating the allowance for doubtful accounts, and if the financial condition of the Company’s customers were to deteriorate, resulting in their inability to make the required payments, the Company may be required to record additional allowances or charges against revenues. The Company writes-off accounts receivable against the allowance when it determines a balance is uncollectible and no longer actively pursues its collection. ~~As of September 30, 2017 and December 31, 2016, based upon the review of the outstanding accounts receivable, the Company has determined that an allowance for doubtful accounts is not required.~~

~~Revenue Recognition~~

~~The~~Revenue Recognition and Deferred Revenue

Revenues are accounted for under ASC Topic 606, “Revenue From Contracts With Customers” (“ASC 606”). ASC 606 is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASC also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer purchase orders, including significant judgments.

In accordance with ASC 606, the Company recognizes revenue ~~when services are realized or realizable and earned less estimated future doubtful accounts. The Company considers revenue realized or realizable and earned when all of~~in accordance with that core principle by applying the ~~following criteria are met:~~following:

	(i)	~~persuasive evidence of an arrangement exists,~~Identify the contract(s) with a customer;
	~~(ii)~~	~~the services have been rendered and all required milestones achieved,~~
	~~(iii)~~(ii)	Identify the ~~sales price is fixed and determinable, and~~performance obligation in the contract;
	~~(iv)~~	~~collectability is reasonably assured.~~
	(iii)	Determine the transaction price;

	(iv)	Allocate the transaction price to the performance obligations in the contract; and

	(v)	Recognize revenue when (or as) the Company satisfies a performance obligation.

The Company primarily generates revenue by charging businesses to advertise on the ~~network. The Company has the ability to target advertisements directly to a clients’ target audience, based on their location, on their mobile devices.~~Company’s website and social media channels. In cases where clients ~~sign~~enter advertising contracts for an extended period of time, the Company ~~only realizes~~recognizes revenue ~~for services provided during that quarter~~pro rata over the contract term and ~~defers all other~~any unearned revenue is deferred to future ~~quarters.~~

~~Stock Based Compensation~~periods.

Based on the nature of the Company’s revenue streams, revenues generally do not require significant estimates or judgments. The sales prices are generally fixed at the point of sale and all consideration from contracts is included in the transaction price. The Company’s contracts do not include multiple performance obligations or material variable consideration.

Deferred revenue represents the amount of prepaid advertising fees the Company has received from customers and it is included in current liabilities in the accompanying condensed consolidated balance sheets. Deferred revenue shall be recognized in the future as the advertising services are provided.

Advertising

The Company ~~measures~~charges the ~~cost~~costs of ~~services received~~advertising to expense as incurred. For co-marketing campaigns in ~~exchange~~which the Company advertises with a partner, the Company records payment for ~~an award of equity instruments based on~~ the co-marketing campaign as a credit to advertising costs. Advertising costs were $18,125 and $43,020 for the nine months ended September 30, 2021 and 2020, respectively.

Stock-Based Compensation

Stock-based compensation expense is measured at the grant date fair value of the ~~award.~~award and is expensed over the requisite service period. For stock-based awards to employees, non-employees and directors, the Company calculates the fair value of the award ~~is measured~~ on the date of grant ~~date and for non-employees,~~using the Black-Scholes option pricing model. Determining the fair value of stock-based awards at the ~~award is generally re-measured on vesting dates~~grant date under this model requires judgment, including estimating volatility, employee stock option exercise behaviors and ~~interim financial reporting dates until~~forfeiture rates. The assumptions used in calculating the ~~service period is complete. The~~ fair value ~~amount is then recognized over~~of stock-based awards represent the ~~period during which services are required to be provided in exchange for~~Company’s best estimates, but these estimates involve inherent uncertainties and the ~~award, usually the vesting period.~~application of management’s judgment.

Income Taxes

The Company follows ASC ~~subtopic~~Subtopic 740-10, ~~Income Taxes-~~“Income Taxes” (“ASC 740-10”) for recording the provision for income taxes. Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability during each period.

~~MASSROOTS, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~SEPTEMBER 30, 2017~~

~~(unaudited)~~

If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income taxes in the period of change. Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods.

Convertible Instruments

U.S. GAAP requires companies to bifurcate conversion options from their host instruments and account for them as ~~free standing~~freestanding derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur, and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. An exception to this rule is when the host instrument is deemed to be conventional, as that term is described under ASC ~~480-10.~~480, “Distinguishing Liabilities From Equity.”

When the Company has determined that the embedded conversion options should not be bifurcated from their host instruments, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of ~~redemption.~~redemption using the effective interest method.

Beneficial Conversion Features and Deemed Dividends

The Company records a beneficial conversion feature for preferred stock when, on the date of issuance, the conversion rate is less than the Company’s stock price. The Company also records, when necessary, a contingent beneficial conversion resulting from price protection of the conversion price of preferred stock, based on the change in the intrinsic value of the conversion options embedded in such preferred stock.

The Company records, when necessary, deemed dividends for: (i) warrant price protection, based on the difference between the fair value of the warrants immediately before and after the repricing (inclusive of any full ratchet provisions); (ii) the exchange of preferred shares for convertible notes, based on the amount of the face value of the convertible notes in excess of the carrying value of the preferred shares; (iii) the settlement of warrant provisions, based on the fair value of the shares of common stock issued; and (iv) amortization of discount on preferred stock resulting from recognition of a beneficial conversion feature.

Derivative Financial Instruments

The Company classifies as equity any contracts ~~that~~that: (i) require physical settlement or net-share ~~settlement~~settlement; or (ii) provide the Company with a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement) providing that such contracts are indexed to the Company’s own stock. The Company classifies as assets or liabilities any contracts ~~that~~that: (i) require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the Company’s control); or (ii) gives the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). The Company assesses classification of its common stock purchase warrants and other ~~free standing~~freestanding derivatives at each reporting date to determine whether a change in classification between assets and liabilities is required.

The Company’s ~~free standing~~freestanding derivatives consisted of warrants to purchase common stock that were issued in connection with the issuance of debt and the sale of shares of common stock, and of embedded conversion options ~~with~~within convertible ~~debentures.~~notes. The Company evaluated these derivatives to assess their proper classification in the balance sheet as of September 30, ~~2017~~2021 and December 31, 2020 using the applicable classification criteria enumerated under ASC ~~815-Derivatives~~815, “Derivatives and Hedging.” The Company determined that certain embedded conversion and/or exercise features dodid not contain fixed settlement provisions. The convertible ~~debentures contain~~notes contained a conversion feature such that the Company could not ensure it would have adequate authorized shares to meet all possible conversion demands.

As such, the Company ~~was~~is required to record the derivatives which do not have fixed settlement provisions as liabilities and mark to market all such derivatives to fair value at the end of each reporting period.

~~MASSROOTS, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~SEPTEMBER 30, 2017~~

~~(unaudited)~~

~~Long-Lived Assets~~The Company also records derivative liabilities for instruments, including convertible notes, preferred stock, and warrants, in which the Company does not have sufficient authorized shares to cover the conversion of these instruments into shares of common stock.

Long-Lived Assets

The Company reviews its property and equipment and any identifiable intangibles for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The test for impairment is required to be performed by management at least annually. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted operating cash flow expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell. Intangible assets are stated at cost and reviewed annually to examine any impairments, usually assuming an estimated useful life of three to five years. When retired or otherwise disposed, the related carrying value and accumulated depreciation are removed from the respective accounts and the net difference less any amount realized from disposition, is reflected in earnings.

Indefinite Lived Intangibles and Goodwill ~~Assets~~

The Company accounts for business combinations under the acquisition method of accounting in accordance with ASC 805, “Business Combinations,” where the total purchase price is allocated to the tangible and identified intangible assets acquired and liabilities assumed based on their estimated fair values. The purchase price is allocated using the information currently available, and may be adjusted, up to one year from acquisition date, after obtaining more information regarding, among other things, asset valuations, liabilities assumed and revisions to preliminary estimates. The purchase price in excess of the fair value of the tangible and identified intangible assets acquired less liabilities assumed is recognized as goodwill.

The Company tests ~~for~~ indefinite lived intangibles and goodwill for impairment in the fourth quarter of each year and whenever events or circumstances indicate that the carrying amount of the asset exceeds its fair value and may not be recoverable.

Segment Reporting

Operating segments are defined as components of an enterprise for which separate financial information is available and evaluated regularly by the ~~chief operating decision maker,~~Chief Executive Officer, or ~~decision making~~decision-making group, in deciding the method to allocate resources and assess performance. The Company currently has one reportable segment for financial reporting purposes, which represents the Company’s core business.

Net ~~Earnings (Loss)~~Loss Per Common Share

~~The Company computes earnings (loss) per share under ASC subtopic 260-10, Earnings Per Share (“ASC 260-10”).~~ Net loss per ~~common~~ share is computed by dividing the net loss by the weighted average number of shares of common stock outstanding during the ~~year.~~period. Diluted earnings per share ~~if presented, would include~~includes the dilution that would occur upon the exercise or conversion of all potentially dilutive securities into common stock using the “treasury stock” and/or “if converted” methods, as applicable.

The computation of ~~basic and~~ diluted ~~income~~earnings (loss) per share ~~as of September 30, 2017 and 2016~~ excludes potentially dilutive securities when their inclusion would be anti-dilutive, or if their exercise prices were greater than the average market price of the common stock during the period.

Potentially dilutive securities excluded from the computation of basic and diluted net loss per share are as follows:

September 30,
2017

September 30,
2016
Common stock issuable upon conversion of convertible debentures 3,538,894 2,744,432
Options to purchase common stock 14,574,977 5,569,883
Warrants to purchase common stock 11,864,347 14,079,715
Totals 29,978,218 22,394,030

	September 30,		September 30,
	2021		2020
Shares of common stock issuable upon conversion of convertible notes		226,347,786		-
Options to purchase shares of common stock		27,621,765		27,621,765
Warrants to purchase shares of common stock		11,575,000		12,015,002
Shares of common stock issuable upon conversion of preferred stock		7,817,778,624		1,000,000
Total potentially dilutive shares		8,083,323,175		40,636,767

~~MASSROOTS, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~SEPTEMBER 30, 2017~~

~~(unaudited)~~

~~Reclassification~~

~~Certain reclassifications have been made to the prior years’ data to conform to the current year presentation. These reclassifications had no effect on reported income (losses).~~

Recent Accounting Pronouncements

In August 2020, the FASB issued ASU 2020-06, which simplifies the guidance on accounting for convertible debt instruments by removing the separation models for: (1) convertible debt with a cash conversion feature; and (2) convertible instruments with a beneficial conversion feature. As a result, the Company will not separately present in equity an embedded conversion feature in such debt. Instead, we will account for a convertible debt instrument wholly as debt, unless certain other conditions are met. We expect the elimination of these models will reduce reported interest expense and increase reported net income for the Company’s convertible instruments falling under the scope of those models before the adoption of ASU 2020-06. Also, ASU 2020-06 requires the application of the if-converted method for calculating diluted earnings per share and the treasury stock method will be no longer available. The provisions of ASU 2020-06 are applicable for fiscal years beginning after December 15, 2021, with early adoption permitted no earlier than fiscal years beginning after December 15, 2020. The Company is currently evaluating the impact of ASU 2020-06 on its unaudited condensed consolidated financial statements.

In August 2018, the FASB issued Accounting Standards Update (“ASU”) 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”). ASU 2018-13 removes certain disclosure requirements, including the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels, and the valuation processes for Level 3 fair value measurements. ASU 2018-13 also adds disclosure requirements, including changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements, and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The amendments on changes in unrealized gains and losses, and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. ASU 2018-13 became effective for us on January 1, 2020. The adoption of this update did not have a material impact on the Company’s unaudited condensed consolidated financial statements and 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’s financial position, results of operations or cash flows.

~~Subsequent Events~~NOTE 5 – PROPERTY AND EQUIPMENT

~~The Company evaluates events that have occurred after the balance sheet date but before the financial statements are issued.~~

~~NOTE 4 – INVESTMENTS~~

AsProperty and equipment as of September 30, ~~2017~~2021 and December 31, ~~2016, the carrying value of our investments in privately held companies totaled $403,249 and $235,000, respectively. These investments are accounted for~~2020 is summarized as ~~cost method investments, as we own less than 20% of the voting securities and do not have the ability to exercise significant influence over operating and financial policies of the entities.~~follows:

	September 30, 2021			December 31, 2020
Computers	$	6,366		$	6,366
Office equipment		17,621			17,621
Subtotal		23,987			23,987
Less accumulated depreciation		(23,987	)		(23,987	)
Property and equipment, net	$	-		$	-

~~To facilitate~~

Depreciation expense for the integration with dispensary point of sale systems, in 2015, the Company invested $175,000 in exchange for preferred shares of Flowhub LLC (“Flowhub”), a seed-to-sale system, equal to 8.95% of the then outstanding equity of Flowhub. The acquired preferred shares are considered non-marketable securities. On May 12, 2017, the Company sold its preferred shares in Flowhub for net proceeds of $250,000. The gain on sale of securities of $75,000nine months ended September 30, 2021 and 2020 was ~~recorded in current period operations.~~$0.

NOTE 6 – ADVANCES, NON-CONVERTIBLE NOTES PAYABLE AND PPP NOTE PAYABLE

Advances

During the nine months ended September 30, ~~2017,~~2021 and 2020, the Company ~~acquired 23,810 Class~~received aggregate proceeds from non-interest bearing advances of $28,991 and $0 and repaid an aggregate of $20,178 and $0, respectively, of advances. Included in the nine months ended September 30, 2021 were $2,091 of advances from and $5,278 of repayments to the Company’s Chief Information Officer and a $25,000 settlement payment made by Empire Services, Inc. on behalf of the Company (See Note 15). The remaining advances are primarily for Simple Agreements for Future Tokens, entered into with accredited investors issued pursuant to an exemption from the registration requirements of the Securities Act of 1933, as amended, by virtue of Section 4(a)(2) thereof and/or Regulation D thereunder in 2018. As of September 30, 2021 and December 31, 2020, the Company owed $122,000 and $88,187 in principal and $4,000 and $0 in accrued interest, respectively, on advances.

Non-Convertible Notes Payable

During the nine months ended September 30, 2021 and 2020, the Company received proceeds from the issuance of non-convertible notes of $357,053 and $132,911 and repaid an aggregate of $0 and $39,641, respectively, of non-convertible notes. Included in the nine months ended September 30, 2021 and 2020 were $357,053 and $20,520, respectively, of advances from and $0 of repayments to the Company’s Chief Executive Officer and Empires Services, Inc. In addition, Empire Services, Inc. paid the following on behalf of the Company: (i) the $1,000,000 settlement payment to Iroquois; and (ii) $158,371 of operating expenses to vendors (See Note 15). The non-convertible notes have maturity dates ranging from March 31, 2019 to June 24, 2023 and accrue interest at rates ranging from 0% to 35% (default interest rate) per annum.

On June 2, 2021, one of the holders of non-convertible notes entered into an agreement to cancel the entire amount owed to him (including principal of $79,000 and accrued interest of $63,055), resulting in gain on forgiveness of debt of $142,055 (See Note 9 – Trawick’s Complaint).

On June 4, 2021, one of the holders of a non-convertible note payable for $60,000 extended the due date of the note from June 26, 2022 to June 24, 2023.

On June 25, 2021, a law firm the Company formerly used received an arbitration award of $459,251 for unpaid legal bills. On September 23, 2021, the Company entered into a Resolution Agreement to settle the arbitration award for an aggregate of $275,000 to be paid as follows: (i) $25,000 by September 30, 2021; (ii) $15,000 per month by the last day of each month from October 2021 through January 2023; and (iii) $10,000 by February 28, 2023. The Company imputed an interest rate of 10% and discounted the note accordingly. The imputed debt discount of $17,991 is being amortized to interest expense over the term of the note. The Company recognized a $202,242 gain on settlement. As of September 30, 2021, the remaining carrying value of the note was $232,502, net of debt discount of $17,498.

As of September 30, 2021 and December 31, 2020, the Company owed principal of $1,888,446 and $219,520 (of which $128,364 and $60,000 is long-term), net of debt discount of $17,498 and $0, and accrued interest of $372,480 and $251,612, respectively, on non-convertible notes.

PPP Note Payable

On May 4, 2020, the Company received proceeds of $50,000 from a PPP note. The note had a maturity date of May 4, 2022 and bore 1% interest per annum. On April 6, 2021, the Small Business Administration forgave the Company’s Paycheck Protection Program loan in the principal amount of $50,000 and accrued interest of $466, resulting in gain on forgiveness of debt of $50,466. As of September 30, 2021 and December 31, 2020, the Company owed $0 and $50,000 in principal and $0 and $330 in accrued interest, respectively, on this note.

NOTE 7 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES

As of September 30, 2021 and December 31, 2020, the Company owed accounts payable and accrued expenses of $4,242,821 and $4,948,890, respectively. These are primarily comprised of payments to vendors, accrued interest on debt, and accrued legal bills.

NOTE 8 – ACCRUED PAYROLL AND RELATED EXPENSES

The Company is delinquent in filing its payroll taxes, primarily related to stock compensation awards in 2016 and 2017, but also including payroll for 2018 through 2021. As of September 30, 2021 and December 31, 2020, the Company owed payroll tax liabilities, including penalties, of $4,037,298 and $3,864,055, respectively, to federal and state taxing authorities. The actual liability may be higher or lower due to interest or penalties assessed by federal and state taxing authorities. The Company expects to settle these liabilities during 2022.

NOTE 9 – COMMITMENTS AND CONTINGENCIES

From time to time, we may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. Except as set forth below, we are currently not aware of any such legal proceedings or claims that will have, individually or in the aggregate, a material adverse effect on our business, financial condition or operating results.

Power Up Lending Group, Ltd. Complaint

As disclosed in the Company’s Annual Report on Form 10-K filed with the SEC on April 16, 2021, on October 11, 2019, Power Up Lending Group, Ltd. (“Power Up”) filed a complaint against the Company and Isaac Dietrich, a former officer and director of the Company, in the Supreme Court of the State of New York, County of Nassau. The complaint alleged, among other things, (i) the occurrence of events of default in certain notes (the “Power Up Notes”) issued by the Company to Power Up, (ii) misrepresentations by the Company including, but not limited to, with respect to the Company’s obligation to timely file its required reports with the SEC and (iii) lost profits as a result of the Company’s failure to convert the Power Up Notes in accordance with the terms thereof.

On April 30, 2021, the Company entered into a settlement agreement (the “Settlement”) with PowerUp by accepting an offer communicated to the Company via electronic mail. In accordance with the terms of the Settlement, PowerUp, the judgment creditor of a judgment against the Company and Isaac Dietrich, the Company’s former Chief Information Officer and director, in the total amount of $350,551.10 entered in the Office of the Clerk of the County of Nassau on February 23, 2021 (the “Judgement”), agreed to a settlement and filing of a satisfaction of judgment in consideration of receipt of the sum of $150,000.00 (the “Settlement Amount”) on April 30, 2021. The Company accepted the aforementioned offer by remitting the Settlement Amount timely and in full. Accordingly, a satisfaction of Judgment was filed by PowerUp with the Office of the Clerk of the County of Nassau on May 3, 2021.

Sheppard Mullin’s Demand for Arbitration

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 $459,251 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 with Sheppard, Mullin, Richter & Hampton 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 both the September and October 2021 payments.

Rother Investments’ Petition

On October 28, 2020, Rother Investments, LLC (“Rother Investments”) filed a complaint in the District Court of 419th Judicial District, Travis County, Texas against the Company, alleging the Company’s default under a certain promissory note (the “Rother Investments Note”) in payment of the outstanding principal amount and interest under the Note, as described in the complaint. Rother Investments seeks to collect the amount of $124,750 as of the date of the complaint with late fees continuing to accrue on a daily basis, monetary relief of over $100,000 but not more than $200,000 pursuant to Tex. R. Civ. P. 47(c)(3), court’s costs and attorney’s fees, pre-judgment and post-judgment interest, and such other relief as the court deems appropriate. On May 19, 2021, Rother Investments, LLC received a default judgment against the Company in the amount of $144,950. On June 17, 2021, Greenwave filed a motion to set aside default and motion for new trial asserting it was improperly served. On July 20, 2021, the court granted the Company’s motion finding and ordered a new trial of the matter.

Trawick’s Complaint

As previously reported by the Company in its Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 16, 2021, on or about January 25, 2021, Travis Trawick (“Trawick”) filed a complaint (“Trawick’s Lawsuit”) against the Company and Isaac Dietrich, the Company’s former Chief Information Officer and director, in the Circuit Court for the City of Virginia Beach, Virginia (the “Court”), asserting the Company’s failure to remit payments under the certain promissory note, as subsequently amended and modified, and ancillary documents thereto (collectively, the “Note”), and Mr. Dietrich’s failure to fulfill its obligations, as the guarantor, under the Note.

On May 4, 2021, Trawick requested that the Clerk of the Court filed for entry an order to dismiss Trawick’s Lawsuit with prejudice.

Iroquois Master Fund

On June 30, 2021, the Company received an e-mail containing a demand (the “Demand”) for arbitration (the “Arbitration”) at American Arbitration Association in Denver, Colorado, by Iroquois Master Fund Ltd. (“Iroquois”) against the Company, Isaac Dietrich, a former officer and director, and Danny Meeks, the Company’s director, and Empire Services, Inc. (“Empire”). The Demand alleges breach of contract and various related state law claims against the defendants, and sought, inter alia, specific performance of the subject warrant, damages in an amount not less than $12 million, equitable relief, and attorney’s fees for the Company’s alleged failure to reserve more than 150 million shares of common stock that Iroquois is allegedly entitled to in connection with the exercise of ~~Hightimes Holding Corp. for $100,002 ($4.20 per share). The acquired common shares are considered non-marketable securities.~~a certain warrant issued by the Company on July 21, 2017, and subsequently purchased by Iroquois from an unrelated third party. As a result of a legal action commenced by Isaac Dietrich, Danny Meeks, and Empire (See – “Litigation�� below), Iroquois informed the American Arbitration Association (the arbitral body overseeing the Arbitration) that it would (i) dismiss the Counterclaim Defendants from the Arbitration without prejudice, (ii) assert its claims against Isaac Dietrich, Danny Meeks, and Empire the in the action commended by them, and (iii) proceed with the Arbitration with respect to the Company only.

Litigation

On July ~~13, 2017,~~21, 2021, in response to the Demand, Isaac Dietrich, Danny Meeks, and Empire, filed a complaint (the “Complaint”) against Iroquois in the United States District Court of the Southern District of New York alleging that the aforementioned plaintiffs were not parties to the warrant the Demand based on, and as such, the Demand could not have brought against them. Declaratory relief and injunctive relief were sought in the Complaint. On August 20, 2021, Iroquois submitted an answer with counterclaims stating that Iroquois informed the American Arbitration Association (the arbitral body overseeing the Arbitration) that it would (i) dismiss the Counterclaim Defendants from the Arbitration without prejudice, (ii) assert its claims against Isaac Dietrich, Danny Meeks, and Empire the in the action commended by them, and (iii) proceed with the Arbitration with respect to the Company ~~purchased~~only. In its answer, Iroquois made allegations substantially similar to the claims made in the Arbitration, asserted defenses, and requested an award in not less than $12 million against Demand, Isaac Dietrich, Danny Meeks, and Empire, an entry of an award of a constructive trust against them, and costs and expenses, including its reasonable attorneys’ fees, incurred in prosecuting said action and the Arbitration.

Settlement

On September 30, 2021, the Company entered into a Settlement Agreement (the “Settlement Agreement”) with Iroquois; Dietrich; Meeks; and Empire. Pursuant to the Settlement Agreement, in exchange for terminating any duties owed by the Company to Iroquois under the Warrant, the Company agreed to pay, on its own behalf and on behalf of Dietrich, Meeks, and Empire, one million dollars ($1,000,000) and issue shares of the Series Z Convertible Preferred Stock, par value $0.001 per share (the “Series Z”), sufficient in number such that if they are converted into the Company’s common stock, par value $0.001 per share (“Common Stock”) by Iroquois, such shares of Common Stock will be equal in number to 9.99% of the issued and outstanding shares of Common Stock at the time of such conversion. Accordingly, on September 30, 2021, 250 Series Z Preferred Shares were issued to the investor (See Note 12). The payment of $1,000,000 was made to Iroquois on October 5, 2021 due to an administrative delay.

NOTE 10 – CONVERTIBLE NOTES PAYABLE

On December 17, 2018, the Company issued a secured convertible promissory note in the principal ~~sum~~amount of ~~$300,000 from Cannaregs, Ltd, a Colorado limited liability company. The promissory note~~$2,225,000 (including an original issuance discount of $225,000) that matured on December 17, 2019 and bears interest at 5%a rate of 8% per annum ~~payable~~(which increased to 22% on July 16, 2019 upon ~~maturity at December 19, 2019 and~~the occurrence of an event of default). The note is ~~unsecured. As of September 30, 2017,~~secured by the ~~carrying value~~Security Agreement (as defined below). The investor has the right to convert the Outstanding Balance (as defined in the note) of the ~~promissory~~ note ~~was $303,247, including accrued interest.~~

~~In the event the issuer consummates, prior to maturity, an equity financing in excess of $2,000,000, the outstanding principal and~~at any accrued and unpaid interest automatically converts to equity securities of the same class or series issued by the issuer at the lesser of: a) 90% of the price paid per equity security or b) a price reflecting a valuation cap of $4,500,000.

~~MASSROOTS, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~SEPTEMBER 30, 2017~~

~~(unaudited)~~

~~NOTE 5 – PROPERTY AND EQUIPMENT~~

~~Property and equipment as of September 30, 2017 and December 31, 2016 is summarized as follows:~~

September 30,
2016

December 31,
2016
Computers $ 125,089 $ 72,124
Office equipment 44,253 36,850
Subtotal 169,342 108,974
Less accumulated depreciation (52,497 ) (31,652 )
Property and equipment, net $ 116,845 $ 77,322

Depreciation expense for the three and nine months ended September 30, 2017 was $9,410 and $21,344, respectively; and $5,499 and $14,224 for the three and nine months ended September 30, 2016, respectively.

~~NOTE 6 – CONVERTIBLE NOTES PAYABLE~~

On March 24, 2014, the Company issued convertible debentures to certain accredited investors. The total principal amount of the debentures is $269,100 and originally matured on March 24, 2016 with a 0% interest rate. The debentures are convertibletime into shares of ~~the Company’s~~ common stock ~~at $0.10 per share. In March 2016, the debentures were amended to extend the maturity date to March 24, 2018. In 2016,~~of the Company ~~issued an aggregate~~at a conversion price of ~~1,010,000 shares of its common stock in settlement of $101,000 of outstanding debentures and during~~$0.35 per share, subject to adjustment. Commencing on June 17, 2019, the ~~nine months ended September 30, 2017,~~investor has the ~~Company issued an aggregate of 1,081,000 shares of its common stock in settlement of $108,100 of outstanding debentures~~

~~As of September 30, 2017 and December 31, 2016, the aggregate carrying value~~right to redeem all or any portion of the ~~debentures was $0 and $108,100, net of debt discounts of $0, respectively.~~

~~On August 17, 2017,~~note; provided, however, the ~~Company issued convertible notes to certain accredited investors. The total principal~~investor may not request redemption in an amount ofthat exceeds $350,000 during any single calendar month; provided, further however, upon the notes is $1,045,000 and matures on February 18, 2018 with 0% interest rate. Net proceeds received were $942,500 after deduction of legal and other fees. If the Company exercises its right to prepay the Note, the Company shall make payment to the Investoroccurrence of an event of default, the redemption amount in any calendar month may exceed $350,000. Payments on redemption amounts may be made in cash, ~~equal to~~by converting the ~~sum of the then outstanding principal~~redemption amount ~~of the Note that it desires to prepay, multiplied by (a) 1.1, during the first ninety (90) days after the execution of this Note, or (b) 1.25, at any point thereafter.~~

~~The Notes are convertible~~ into shares of the Company’s common stock at a conversion price of the lesser of: (a) $0.35 per share, ~~equal~~subject to adjustment; and (b) the lower of (i) seventy five cents ($0.75), and (ii) a 25% discount to the price at which the Company next conducts an offering after the issuance date of the Note; provided, however, if any part of the principal amount of the Note remains unpaid at its Maturity DateMarket Price (as defined in the ~~Note)~~note), or a combination thereof. Upon the ~~conversion price~~occurrence of an event of default, the investor may accelerate the note pursuant to which the Outstanding Balance will ~~be equal to 65%~~become immediately due and payable in cash at the Mandatory Default Amount (as defined in the note). The Company is prohibited from effecting a conversion of the ~~average~~note to the extent that, as a result of such conversion, the investor, together with its affiliates, would beneficially own more than 4.99% 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 Notes’ Maturity Date.~~

In connection with the issuance of the notes, the Company and the Investors also entered into a Security Agreement, whereby the Notes are secured with all the assets of the Company currently held or hereafter acquired.

~~In connection with the issuance of the notes, the Company issued an aggregate of 2,090,000 warrants to purchase an amount~~number of shares of the Company’s common stock outstanding immediately after giving effect to the issuance of shares of common stock upon conversion of the note, which beneficial ownership limitation may be increased by the investor up to, but not exceeding, 9.99%.

In connection with the December 2018 note, the Company also entered into a security agreement (the “Security Agreement”) on the closing date pursuant to which the Company granted the investor a security interest in the Collateral (as defined in the Security Agreement). On July 16, 2019, the Company received a notice from the noteholder indicating that events of default had occurred and asserting default penalties of $761,330. During the year ended December 31, 2019, the noteholder converted $345,000 of principal into an ~~initial exercise~~aggregate of 53,522,295 shares of common stock. During the year ended December 31, 2020, (i) the noteholder converted $37,000 of principal into an aggregate of 31,109,551 shares of common stock; and (ii) $1,049,329 of accrued interest was reclassified to the principal balance of this note. On January 20, 2021, the noteholder converted $13,345 of principal into an aggregate of 4,448,251 shares of common stock, having a fair value of $133,002, resulting in a reduction of the derivative liability by $118,778 and a loss on conversion of $880. As of September 30, 2021 and December 31, 2020, the remaining carrying value of the note was $2,878,985 and $2,892,330, respectively. As of September 30, 2021 and December 31, 2020, accrued interest payable of $1,575,001 and $1,073,809, respectively, was outstanding on the note.

On January 25, 2019, the Company issued a convertible promissory note in the principal amount of $55,000 (including original issuance discount of $5,000) that matured July 25, 2019 and bearing a one-time interest fee of 10%. The investor has the right to convert the Outstanding Balance (as defined in the note) of the note at any time into shares of common stock of the Company at a conversion price of ~~$0.50, expiring five~~$0.075 per share, subject to adjustment. Upon maturity, payment may be made in cash, by converting the redemption amount into shares of the Company’s common stock at a conversion price of the lesser of: (a) $0.075 per share, subject to adjustment; and (b) the Market Price (as defined in the note), or a combination thereof. Upon the occurrence of an event of default, the investor may accelerate the note pursuant to which the Outstanding Balance will become immediately due and payable in cash at the Mandatory Default Amount (as defined in the note). The Company is prohibited from effecting a conversion of any note to the extent that, as a result of such conversion, the investor, together with its affiliates, would beneficially own more than 4.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to the issuance of shares of common stock upon conversion of the note, which beneficial ownership limitation may be increased by the investor up to, but not exceeding, 9.99%. On May 19, 2021, the investor received a default judgment against the Company in the amount of $144,950. In accordance with the judgment, commencing May 19, 2021, the Company began accruing interest at the rate of 18% per annum. On June 17, 2021, the Company filed a motion to set aside default and motion for new trial asserting it was improperly served. On July 20, 2021, the court granted the Company’s motion finding and ordered a new trial of the matter. As of September 30, 2021 and December 31, 2020, the remaining carrying value of the note was $148,685 and $55,000, respectively. As of September 30, 2021 and December 31, 2020, accrued interest payable of $0 and $92,600, respectively, was outstanding on the note (See Note 9 – Rother Investments’ Petition).

From January to June 2019, the Company issued convertible promissory notes in the aggregate principal amount of $389,000 (including aggregate original issuance discount of $39,000) that matured at dates ranging from July 15, 2019 to June 6, 2020 and accruing interest at rates ranging from 5% to 12% per annum. The investors have the right to convert the Outstanding Balance (as defined in the notes) of the notes at any time into shares of common stock of the Company at a conversion price of $0.075 per share, subject to adjustment. Upon maturity, payment may be made in cash, by converting the redemption amount into shares of the Company’s common stock at a conversion price of the lesser of: (a) $0.075 per share, subject to adjustment; and (b) the Market Price (as defined in the notes), or a combination thereof. Upon the occurrence of an event of default, the investors may accelerate the note pursuant to which the Outstanding Balance will become immediately due and payable in cash at the Mandatory Default Amount (as defined in the notes). The Company is prohibited from effecting a conversion of any note to the extent that, as a result of such conversion, the investor, together with its affiliates, would beneficially own more than 4.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to the issuance of shares of common stock upon conversion of the note, which beneficial ownership limitation may be increased by the investor up to, but not exceeding, 9.99%. In January 2020, one of the promissory notes was amended whereby the conversion price for $9,202 which is a portion of the principal amount of the note was amended to $0.0004 per share. The amendment was deemed a debt modification and accounted for accordingly. During the year ended December 31, 2019, the noteholders converted $31,180 of principal and $8,000 of accrued interest into an aggregate of 10,000,000 shares of common stock. During the year ended December 31, 2020, one of the holders converted $24,826 of principal into an aggregate of 35,005,850 shares of common stock; and one of the holders converted $168,820 of principal and $362,027 of accrued interest into 26.54237 shares of Series Y preferred shares having a stated value of $530,847, resulting in a reduction of the derivative liability by $719,416 and a gain on settlement of $719,416. On April 30, 2021, one of the holders of non-convertible notes entered into an agreement to cancel the entire amount owed to them (including principal of $131,174 and accrued interest of $304,485) in exchange for a cash payment of $150,000 by the Company, resulting in a reduction of the derivative liability of $300,424 and a gain on settlement of debt of $586,083 (See Note 9 – Power Up Lending Group, Ltd. Complaint). On May 1, 2021, one of the holders converted $33,000 of principal and $1,185,200 of accrued interest into 60.91 shares of Series Y preferred shares having a stated value of $1,218,200, resulting in a reduction of the derivative liability by $936,405 and a gain on settlement of $936,405. As of September 30, 2021 and December 31, 2020, the remaining carrying value of the notes was $0 and $164,174, respectively. As of September 30, 2021 and December 31, 2020, accrued interest payable of $0 and $1,191,998, respectively, was outstanding on the notes.

On November 13, 2019, the Company issued three convertible promissory notes in the aggregate principal amount of $108,900, having an aggregate original issuance discount of $9,900, resulting in cash proceeds of $99,000. The notes matured on May 13, 2020 and accrue interest at a rate of 12% per annum. The investors have the right to convert the Outstanding Balance (as defined in the notes) of the notes at any time into shares of common stock of the Company at a conversion price of $0.01 per share, subject to adjustment. In the event of default, the conversion price shall be 60% of the average of the three lowest closing bid prices of the Company’s common stock during the 20 days prior to the conversion date. The Company is prohibited from effecting a conversion of any note to the extent that, as a result of such conversion, the investor, together with its affiliates, would beneficially own more than 4.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to the issuance of shares of common stock upon conversion of the note, which beneficial ownership limitation may be increased if the Market Capitalization (as defined in the notes) falls below $2,500,000, but not exceeding, 9.99%. During the year ended December 31, 2020, two of the holders converted $72,600 of principal and $112,671 of accrued interest into 9.26353 shares of Series Y preferred shares having a stated value of $185,271, resulting in a reduction of the derivative liability by $301,257 and a gain on settlement of $301,257. As of September 30, 2021 and December 31, 2020, the carrying value of the remaining note was $36,300. As of September 30, 2021 and December 31, 2020, accrued interest payable of $87,789 and $57,231, respectively, was outstanding on the remaining note.

On December 6, 2019, the Company issued convertible promissory notes in the aggregate principal amount of $110,000, having an aggregate original issuance discount of $10,000, resulting in cash proceeds of $100,000. The notes matured on June 6, 2020 and accrue interest at a rate of 12% per annum. The investors have the right to convert the Outstanding Balance (as defined in the notes) of the notes at any time into shares of common stock of the Company at a conversion price of $0.01 per share, subject to adjustment. In the event of default, the conversion price shall be 60% of the average of the three lowest closing bid prices of the Company’s common stock during the 20 days prior to the conversion date. The Company is prohibited from effecting a conversion of any note to the extent that, as a result of such conversion, the investor, together with its affiliates, would beneficially own more than 4.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to the issuance of shares of common stock upon conversion of the note, which beneficial ownership limitation may be increased if the Market Capitalization (as defined in the notes) falls below $2,500,000, but not exceeding, 9.99%. During the year ended December 31, 2020, the holders converted $110,000 of principal and $123,451 of accrued interest into 11.67255 shares of Series Y preferred shares having a stated value of $233,451, resulting in a reduction of the derivative liability by $379,600 and a gain on settlement of $379,600. As of September 30, 2021 and December 31, 2020, the remaining carrying value of the notes was $0. As of September 30, 2021 and December 31, 2020, accrued interest payable of $0 was outstanding on the notes.

In December 2019, the Company and the holders of all of the outstanding Series A and Series B Preferred Shares (the “Preferred Shares”) entered into Exchange Agreements whereby 2,800 Series A Preferred Shares and 1,126 Series B Preferred Shares were canceled in exchange for the issuance of an aggregate of $3,500,000 and $1,548,250 of convertible promissory notes, respectively. The notes matured at dates ranging from December 24, 2019 to May 18, 2020 and accrue interest at a rate of 12% per annum. The investors have the right to convert the Outstanding Balance (as defined in the notes) of the notes at any time into shares of common stock of the Company at a conversion price of $0.005 per share, subject to adjustment. In the event of default, the Outstanding Balance shall immediately increase to 130% of the Outstanding Balance and a penalty of $100 per day shall accrue until the default is remedied. For a period of two years from the issuance date, in the event the Company issues or sells any additional shares of common stock or common stock equivalents at a price less than the Conversion Price (as defined in the notes) then in effect (a “Dilutive Issuance”), the Conversion Price of the notes shall be reduced to the Dilutive Issuance Price and the number of shares issuable upon conversion shall be increased on a full ratchet basis. The Company is prohibited from effecting a conversion of any note to the extent that, as a result of such conversion, the investor, together with its affiliates, would beneficially own more than 9.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to the issuance of shares of common stock upon conversion of the note. During the year ended December 31, 2019, the noteholders converted $185,500 of principal and $300 of accrued interest into an aggregate of 30,669,903 shares of common stock and 37,160,000 shares of common stock to be issued. During the year ended December 31, 2020, the noteholders converted $31,137 of principal and $128 of accrued interest into an aggregate of 6,253,056 shares of common stock; and the noteholders converted $4,793,113 of principal and $2,564,325 of accrued interest into 367.8719 shares of Series Y preferred shares having a stated value of $7,357,438, resulting in a reduction of the derivative liability by $89,648,951 and a gain on settlement of $89,648,951. On January 7, 2021, a noteholder converted $38,500 of principal and $55,261 of accrued interest into 3.72667 shares of Series Y preferred shares having a stated value of $74,533, resulting in a reduction of the derivative liability by $3,880,958 and a gain on settlement of $3,900,186. As of September 30, 2021 and December 31, 2020, the remaining carrying value of the notes was $0 and $38,500, respectively. As of September 30, 2021 and December 31, 2020, accrued interest payable of $0 and $54,473, respectively, was outstanding on the notes.

From January to September 2020, the Company issued convertible promissory notes in the aggregate principal amount of $700,700, having an aggregate original issuance discount of $63,700, resulting in cash proceeds of $637,000. The notes mature from July 2020 to March 2021 and accrue interest at a rate of 12% per annum. During the first 180 days the notes are outstanding, the Company shall have the right to prepay the notes for an amount equal to 120% (during the first 90 days) or 135% (during the subsequent 90 days) of the Outstanding Balance (as defined in the notes) being prepaid. The investors have the right to convert the Outstanding Balance of the notes at any time into shares of common stock of the Company at a conversion price of $0.01 per share, subject to adjustment. In the event of default, the conversion price shall be 60% of the average of the three lowest closing bid prices of the Company’s common stock during the 20 days prior to the conversion date. Notwithstanding the foregoing, upon the occurrence of an event of default, the conversion price for the April 2020 notes, having an aggregate original principal amount of $330,000, shall not be less than $0.001. The Company is prohibited from effecting a conversion of any note to the extent that, as a result of such conversion, the investor, together with its affiliates, would beneficially own more than 4.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to the issuance of shares of common stock upon conversion of the note, which beneficial ownership limitation may be increased if the Market Capitalization (as defined in the notes) falls below $2,500,000, but not exceeding, 9.99%. During the year ended December 31, 2020, the noteholders converted $700,700 of principal and $462,763 of accrued interest into 58.17315 shares of Series Y preferred shares having a stated value of $1,163,463, resulting in a reduction of the derivative liability by $1,885,194, a reduction in debt discount by $72,637 and a gain on settlement of $1,812,557. On March 23, 2021, a noteholder converted $21,944 of accrued interest into 1.09721 shares of Series Y preferred shares having a stated value of $21,945, resulting in a reduction of the derivative liability by $17,548 and a gain on settlement of $17,548. As of September 30, 2021 and December 31, 2020, the remaining carrying value of the notes was $0. As of September 30, 2021 and December 31, 2020, accrued interest payable of $0 and $13,844 was outstanding on the notes.

On December 15, 2020, $79,143 of accrued compensation owed to the Company’s former Chief Financial Officer was settled by the issuance of a convertible note in the amount of $64,143, having a maturity date of ~~issuance.~~June 15, 2021 and bearing interest of 12% per annum, resulting in a gain on settlement of accounts payable of $15,000. The ~~warrants contain certain anti-dilutive (reset) provisions.~~holder has the right to convert the Outstanding Balance (as defined in the note) of the note at any time into shares of common stock of the Company at a conversion price of $0.0003 per share, subject to adjustment. In the event of default, the conversion price shall be 60% of the average of the three lowest closing bid prices of the Company’s common stock during the 20 days prior to the conversion date. As a result of the beneficial conversion feature of the note, debt discount of $64,143 was recognized with a corresponding increase in additional paid-in capital. On December 24, 2020, the holder converted $64,143 of principal into 3.20716 shares of Series Y preferred shares having a stated value of $64,143, resulting in a reduction in debt discount by $60,971 and a loss on settlement of $60,971. As of September 30, 2021 and December 31, 2020, the remaining carrying value of the note was $0. As of September 30, 2021 and December 31, 2020, accrued interest payable of $0 was outstanding on the note.

As of September 30, 2021 and December 31, 2020, the remaining carrying value of the convertible notes was $3,063,970 and $3,186,303, respectively. As of September 30, 2021 and December 31, 2020, accrued interest payable of $1,661,704 and $2,483,955, respectively, was outstanding on the notes.

~~On August 17, 2017, upon~~

Upon the issuance of ~~the secured~~certain convertible notes, ~~and warrants,~~ the Company ~~has~~ determined that the features associated with the embedded conversion option ~~and reset provisions~~ embedded in the ~~issued warrants, in the form of a ratchet provision,~~notes, should be accounted for at fair value, as a derivative liability, as the Company cannot determine if a sufficient number of shares would be available to settle all potential future conversion transactions.

~~During~~

The Company does not have enough authorized and unissued shares of common stock to convert all of the ~~three~~convertible promissory notes into shares of common stock. As a result of this authorized shares shortfall, all of the convertible notes payable, including those where the maturity date has not yet been reached, are in default. Accordingly, (i) interest has been accrued at the default interest rate, if applicable, and ~~nine months ended September 30, 2017,~~(ii) the ~~Company amortized $187,272 of debt discounts to current period interest.~~

embedded conversion option has been accounted for, at fair value, as a derivative liability (See Note 11).

~~MASSROOTS, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~SEPTEMBER 30, 2017~~

~~(unaudited)~~

NOTE 711 – DERIVATIVE LIABILITIES AND FAIR VALUE MEASUREMENTS

~~The Company identified conversion features embedded within~~Upon the issuance of certain convertible ~~debt~~debentures, warrants, and ~~certain warrants outstanding during~~preferred stock, the ~~nine months ended September 30, 2017 and year ended December 31, 2016. The~~ Company ~~has~~ determined that the features associated with the embedded conversion option ~~and exercise prices,~~embedded in the ~~form of ratchet provisions,~~debentures, should be accounted for at fair value, as a derivative liability, as the Company cannot determine if a sufficient number of shares would be available to settle all potential future conversion transactions.

~~On March 17, 2016,~~During the nine months ended September 30, 2021, upon issuance of the ~~secured convertible debentures,~~instruments underlying the ~~Company has determined that~~derivative liabilities and upon revaluation (immediately prior to conversion of the features associated with the embedded conversion option and reset provisions embedded in the issued warrants, in the form of a ratchet provision, should be accounted for at fair value, as a derivative liability, as the Company cannot determine if a sufficient number of shares would be available to settle all potential future conversion transactions. At the date of inception,underlying instrument), the Company estimated the fair value of the embedded derivatives ~~of $1,769,121~~ using the ~~Binomial Option~~Black-Scholes Pricing Model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of ~~112.29%~~133.69% to 138.77%, (3) ~~weighted average~~ risk-free interest rate of ~~0.47%~~0.01% to ~~1.04%~~0.14%, and (4) expected life of ~~0.05~~0.06 to 5.00 years, and (5) estimated fair value of the Company’s common stock of $1.04 per share. The estimated fair value of the embedded derivative of $1,769,121 was charged to debt discount up to the net proceeds of $1,420,000 and amortized over the term of the debenture with the excess charged to current period interest.1.85 years.

On ~~December 31, 2016,~~September 30, 2021, the Company estimated the fair value of the embedded derivatives of ~~$1,301,138~~$4,289,634 using the ~~Binomial Option~~Black-Scholes Pricing Model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of ~~110.39%~~137.90%, (3) ~~weighted average~~ risk-free interest rate of ~~1.47%~~0.07% to 0.09%, and (4) expected life of ~~4.21 years, and (5) estimated fair value~~0.01 to 1.33 years.

During the year ended December 31, 2020, upon issuance of the ~~Company’s common stock~~instruments underlying the derivative liabilities and upon revaluation (immediately prior to conversion of ~~$1.03 per share.~~

~~On January 4, 2017, warrant holders exercised outstanding warrants for 682,668 shares of Common Stock, and as such~~the underlying instrument), the Company ~~transferred to~~ estimated the fair value of the embedded derivatives ~~of $610,967 from liability to equity. The Company estimated the fair value at the time of exercise~~ using the ~~Binomial Option~~Black-Scholes Pricing Model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of ~~110.13%~~119.33% to 128.94%, (3) ~~weighted average~~ risk-free interest rate of ~~1.94%~~0.06% to 1.56%, and (4) expected life of ~~4.20 years, and (5) estimated fair value of the Company’s common stock of $1.07 per share.~~0.06 to 2.11 years.

On ~~July 21, 2017, upon issuance of~~December 31, 2020, the warrants in connection with the sale of common stock, the Company has determined that the features associated with the reset provisions embedded in the issued warrants, in the form of a ratchet provision, should be accounted for at fair value, as a derivative liability, as the Company cannot determine if a sufficient number of shares would be available to settle all potential future conversion transactions. The Company estimated the fair value of the embedded derivatives of ~~$1,003,870~~$25,475,514 using the ~~Binomial Option~~Black-Scholes Pricing Model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of ~~103.46%~~132.11%, (3) ~~weighted average~~ risk-free interest rate of ~~1.81%~~0.08% to 0.13%, and (4) expected life of 5.00 years, and (5) estimated fair value of the Company’s common stock of $0.5687 per share. The estimated fair value of the embedded derivative of $1,003,870 was reclassified from equity at the date of issuance.0.04 to 2.08 years.

On August 17, 2017, upon issuance of the secured convertible notes and warrants, the Company has determined that the features associated with the embedded conversion option and reset provisions embedded in the issued notes and warrants, in the form of a ratchet provision, should be accounted for at fair value, as a derivative liability, as the Company cannot determine if a sufficient number of shares would be available to settle all potential future conversion transactions.

~~MASSROOTS, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~SEPTEMBER 30, 2017~~

~~(unaudited)~~

The Company estimated the fair value of the embedded derivatives of $798,429 using the Binomial Option Pricing Model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 102.73%, (3) weighted average risk-free interest rate of 1.11% to 1.78% (4) expected life of 0.49 to 5.00 years, and (5) estimated fair value of the Company’s common stock of $0.457 per share. The estimated fair value of the embedded derivative of $798,429 together with the issuance costs of $102,500 (aggregate of $900,929) was charged to debt discount and amortized over the term of the debenture with the excess charged to current period interest.

On September 30, 2017, the Company estimated the fair value of the embedded derivatives of $1,506,414 using the Binomial Option Pricing Model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 101.58%, (3) weighted average risk-free interest rate of 1.20% to 1.92%, (4) expected life of 0.39 to 4.90 years, and (5) estimated fair value of the Company’s common stock of $0.3320 per share.

The Company adopted the provisions of ASC ~~825-10, Financial Instruments (“ASC 825-10”).~~825-10. ASC 825-10 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of ~~nonperformance.~~non-performance. ASC 825-10 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 825-10 establishes three levels of inputs that may be used to measure fair value:

·●

Level 1 – Quoted prices in active markets for identical assets or liabilities.

·●

Level 2 – Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities.

·●

Level 3 – Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities.

All items required to be recorded or measured on a recurring basis are based upon Level 3 inputs.

To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed and is determined based on the lowest level input that is significant to the fair value measurement.

The Company recognizes its derivative liabilities as Level 3 and values its derivatives using the methods discussed ~~below.~~above. While the Company believes that its valuation methods are appropriate and consistent with other market participants, it recognizes that the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. The primary assumptions that would significantly affect the fair values using the methods discussed are that of volatility and market price of the underlying common stock of the Company.

As of September 30, ~~2017~~2021 and December 31, ~~2016,~~2020, the Company did not have any derivative instruments that were designated as hedges.

~~MASSROOTS, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~SEPTEMBER 30, 2017~~

~~(unaudited)~~

Items recorded or measured at fair value on a recurring basis ~~in the accompanying financial statements~~ consisted of the following items as of September 30, ~~2017~~2021 and December 31, ~~2016:~~2020:

September 30,
2017 Quoted Prices
in Active
Markets for
Identical Assets
(Level 1) Significant
Other
Observable
Inputs
(Level 2) Significant
Unobservable
Inputs
(Level 3)
Derivative liability $ 1,506,414 $ — $ — $ 1,506,414

		September 30, 2021				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
Derivative liabilities		$	4,289,634			$	-			$	-			$	4,289,634

December 31,
2016 Quoted Prices
in Active
Markets for
Identical Assets
(Level 1) Significant
Other
Observable
Inputs
(Level 2) Significant
Unobservable
Inputs
(Level 3)
Derivative liability $ 1,301,138 $ — $ — $ 1,301,138

		December 31, 2020				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
Derivative liabilities		$	25,475,514			$	-			$	-			$	25,475,514

The following table provides a summary of changes in fair value of the Company’s Level 3 financial liabilities for the nine months ended September 30, ~~2017:~~2021:

Balance, January 1, 2017 $ 1,301,138
Transfers in due to issuance of liability warrants in connection with sale of common stock 1,003,870
Transfers in due to issuance of convertible notes and warrants with embedded conversion and reset options 798,431
Transfers out due to warrant exercise (610,967 )
Mark to market to September 30, 2017 (986,058 )
Balance, September 30, 2017 $ 1,506,414
Gain on change in warrant liabilities for the nine months ended September 30, 2017 $ 986,058

Balance, December 31, 2020	$	25,475,514
Transfers out due to conversions of convertible notes, accrued interest and warrants into shares of Series Y preferred stock		(4,834,911	)
Transfers out due to conversions of convertible notes and accrued interest into shares of common stock		(118,778	)
Transfers out due to cash payments made pursuant to settlement agreements		(175,565,103	)
Change in derivative liability due to authorized shares shortfall		159,633,797
Mark to market to September 30, 2021		(300,885	)
Balance, September 30, 2021	$	4,289,634

Gain on change in derivative liabilities for the nine months ended September 30, 2021	$	300,885

Fluctuations in the Company’s stock price are a primary driver for the changes in the derivative valuations during each reporting period. As the stock price ~~increases~~increases/(decreases) for each of the related derivative instruments, the value to the holder of the instrument generally increases/(decreases), therefore increasing/(decreasing) the liability on the Company’s balance sheet. Decreases in the conversion price of the Company’s convertible notes are another driver for the changes in the derivative valuations during each reporting period. As the conversion price decreases for each of the related derivative instruments, the value to the holder of the instrument (especially those with full ratchet price protection) generally increases, therefore increasing the liability on the Company’s balance sheet. Additionally, stock price volatility is one of the significant unobservable inputs used in the fair value measurement of each of the Company’s derivative instruments. The simulated fair value of these liabilities is sensitive to changes in the Company’s expected volatility. Increases in expected volatility would generally result in higher fair value ~~measurement.~~measurements. A 10% change in pricing inputs and changes in volatilities and correlation factors would not result in a material change in our Level 3 fair value.

NOTE 12 – STOCKHOLDERS’ DEFICIT

~~NOTE 8 – CAPITAL STOCK~~Preferred Stock

~~Preferred Stock~~

T~~he Company is authorized to issue 21~~ Series A preferred shares at $1.00 par value per share with 1:1 conversion and voting rights. As of September 30, 2017 and December 31, 2016, there were no shares of Series A preferred shares issued and outstanding.

~~MASSROOTS, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~SEPTEMBER 30, 2017~~

~~(unaudited~~

~~Common Stock~~

The Company is authorized to issue ~~200,000,000~~10,000,000 shares of ~~its~~blank check preferred stock, par value $0.001 per share.

On July 2, 2019, the Company authorized the issuance of 6,000 Series A preferred stock, par value $0.001 per share. The Series A preferred stock has a $1,250 stated value per share and is convertible into shares of common stock at ~~$0.001~~$0.05 per share, subject to certain adjustments. The Certificate of Designation for the Series A preferred stock was filed on July 9, 2019.

During the periods presented, there were 0 shares of Series A Preferred Stock outstanding.

Series B

On June 24, 2019, the Company authorized the issuance of 2,000 shares of Series B Preferred Stock, par value $0.001 per share. The Series B Preferred Stock has a $1,250 stated value per share and is convertible into shares of common stock at $0.05 per share, subjected to certain adjustments. The Certificate of Designation for the Series B Preferred Stock was filed on July 9, 2019.

During the periods presented, there were 0 shares of Series B Preferred Stock outstanding.

Series C

On July 16, 2019, the Company authorized the issuance of 1,000 Series C Preferred Stock, par value $0.001 per share. The 1,000 Series C preferred shares are convertible into 1,000,000 shares of common stock upon the Company listing on a national exchange and other conditions. The Certificate of Designation for the Series C Preferred Stock was filed on July 19, 2019.

As of September 30, ~~2017,~~2021 and December 31, 2020, there were ~~111,326,981~~1,000 shares of Series C Preferred Stock outstanding.

Series X

On November 23, 2020, the Company authorized the issuance of 100 shares of Series X Preferred Stock, par value $0.0001 per share. The Series X Preferred Stock has a $20,000 stated value per share and is convertible into shares of common stock at $0.002 per share, subjected to certain adjustments. In the event the Company issues or sells any securities with an effective price or exercise or conversion price less than the Conversion Price, the Conversion Price shall be reduced to the sale price or exercise or conversion price of the securities issued ~~and outstanding and 1,551,217~~or sold. The Certificate of Designation for the Series X Preferred Stock was filed on November 23, 2020.

From November 25 to December 23, 2020, the Company issued an aggregate of 16.05 shares of ~~common~~Series X Preferred Stock for aggregate proceeds of $321,000. Upon each issuance of Series X shares, the conversion price was less than the Company’s stock price. Accordingly, during the year ended December 31, 2020, the Company recognized an aggregate beneficial conversion feature of $454,200 upon issuance of the Series X preferred shares with a $454,200 increase in Discount on preferred stock and a corresponding increase in additional paid-in capital. The preferred stock discount was amortized over 120 days commencing November 25, 2020 (the date of the initial issuance of the Series X preferred shares), which is the maximum amount of time the Company had to ~~be issued.~~conduct a stockholder vote to increase the Company’s authorized shares. Amortization of the preferred stock discount of $46,448 was recognized as a deemed dividend for the year ended December 31, 2020. As of December 31, ~~2016, there were 71,908,370~~2020, unamortized debt discount on Series X Preferred Stock was $407,752.

From February 16 to March 10, 2021, the Company issued an aggregate of 10.00 shares of ~~common~~Series X Preferred Stock for aggregate proceeds of $200,000. Upon each issuance of Series X shares, the conversion price was less than the Company’s stock ~~issued and outstanding and 1,740,000 shares of common stock to be issued.~~

~~The following common stock transactions were recorded~~price. Accordingly, during the nine months ended September 30, ~~2017:~~2021, the Company recognized an aggregate beneficial conversion feature of $2,852,500 upon issuance of the Series X preferred shares with a $2,852,500 increase in Discount on preferred stock and a corresponding increase in additional paid-in capital. The preferred stock discount was amortized over 120 days commencing November 25, 2020 (the date of the initial issuance of the Series X preferred shares), which is the maximum amount of time the Company had to conduct a stockholder vote to increase the Company’s authorized shares. Amortization of the preferred stock discount of $3,260,252 was recognized as a deemed dividend for the nine months ended September 30, 2021. As of September 30, 2021, unamortized debt discount on Series X Preferred Stock was $0.

As of September 30, 2021 and December 31, 2020, there were 26.05 and 16.05 shares, respectively, of Series X Preferred Stock outstanding.

Series Y

On December 30, 2020, the Company authorized the issuance of 1,000 shares of Series Y Preferred Stock, par value $0.001 per share. The Series Y Preferred Stock has a $20,000 stated value per share and is convertible into shares of common stock at $0.002 per share, subjected to certain adjustments. In the event the Company issues or sells any securities with an effective price or exercise or conversion price less than the Conversion Price, the Conversion Price shall be reduced to the sale price or exercise or conversion price of the securities issued or sold. The Certificate of Designation for the Series Y Preferred Stock was filed on December 30, 2020.

From December 23 to December 30, 2020, the Company issued 654.781794 shares of Series Y Preferred Stock, having a stated value of $13,095,636, in exchange for convertible notes payable of $5,775,767 (net of debt discount of $133,608), accrued interest of $3,625,237, and 14,765,624,721 warrants. The exchanges resulted in a reduction of derivative liabilities related to the convertible notes and accrued interest of $92,934,419, a reduction of derivative liabilities related to the warrants of $72,892,563, and a net gain on settlement of $162,132,350. Included in the foregoing amounts is 3.20716 shares of Series Y Preferred Stock, having a stated value of $64,143, issued to the Company’s Chief Financial Officer, in exchange for convertible notes of $3,172 (net of debt discount of $60,971), resulting in a loss on settlement of $60,971. Upon each issuance of Series Y shares, the conversion price was less than the Company’s stock price. Accordingly, during the year ended December 31, 2020, the Company recognized an aggregate beneficial conversion feature of $21,594,115 upon issuance of the Series Y preferred shares with a $21,594,115 increase in Discount on preferred stock and a corresponding increase in additional paid-in capital. The preferred stock discount was amortized over 120 days commencing December 23, 2020 (the date of the initial issuance of the Series Y preferred shares), which is the maximum amount of time the Company had to conduct a stockholder vote to increase the Company’s authorized shares. Amortization of the preferred stock discount of $1,028,091 was recognized as a deemed dividend for the year ended December 31, 2020. As of December 31, 2020, unamortized debt discount on Series Y Preferred Stock was $20,566,024.

From January 7 to March 23, 2021, the Company issued 4.82388 shares of Series Y Preferred Stock, having a stated value of $96,478, in exchange for convertible notes payable of $38,500, accrued interest of $77,205, and 131,249,975 warrants. The exchanges resulted in a reduction of derivative liabilities related to the convertible notes and accrued interest of $2,502,223, a reduction of derivative liabilities related to the warrants of $1,396,283, and a net gain on settlement of $3,917,734. On May 1, the Company issued 60.91 shares of Series Y Preferred Stock, having a stated value of $1,218,200, in exchange for a convertible note payable of $33,000 and accrued interest of $1,185,200. The exchange resulted in a reduction of derivative liabilities related to the convertible notes and accrued interest of $936,405, and a net gain on settlement of $936,405. Upon each issuance of Series Y shares, the conversion price was less than the Company’s stock price. Accordingly, during the nine months ended September 30, 2021, the Company recognized an aggregate beneficial conversion feature of $10,972,647 upon issuance of the Series Y preferred shares with a $10,972,647 increase in Discount on preferred stock and a corresponding increase in additional paid-in capital. The preferred stock discount was amortized over 120 days commencing December 23, 2020 (the date of the initial issuance of the Series Y preferred shares), which is the maximum amount of time the Company had to conduct a stockholder vote to increase the Company’s authorized shares. Amortization of the preferred stock discount of $31,538,671 was recognized as a deemed dividend for the nine months ended September 30, 2021. As of September 30, 2021, unamortized debt discount on Series Y Preferred Stock was $0.

On March 17, 2021, the Company issued 27.78633 shares of Series Y Preferred Stock that were recorded as to be issued as of December 31, 2020.

As of September 30, 2021 and December 31, 2020, there were 720.515674 and 626.995464 shares of Series Y Preferred Stock outstanding and 0 and 27.78633 shares to be issued, respectively.

Series Z

On September 30, 2021, the Company authorized the issuance of 500 shares of Series Z Preferred Stock, par value $0.001 per share. The Series Z Preferred Stock has a $20,000 stated value per share and all 500 Series Z preferred shares, in aggregate, are convertible into 19.98% of the issued and outstanding common shares of the Company (post conversion). The conversion rate is applicable on a pro rata basis to each share of Series Z Preferred Stock upon conversion. This anti-dilutive conversion feature is in effect until such time an S-1 Registration Statement is declared effective by the SEC in conjunction with a NASDAQ listing.

On September 30, 2021, the Company entered into a Series Z Preferred Stock Issuance Agreement with the Company’s Chief Executive Officer whereby the Company entered into a non – convertible note payable agreement for$1,000,000 in exchange for: (i) a $1,000,000 cash payment directly paid to the warrant holder; and (ii) the issuance of 250 Series Z Preferred Shares having a fair value of $6,530,867 (See Note 15). The note bears interest of 8% per annum and is due within three days of the Company’s next closing of equity financing of $3,000,000 or more. The proceeds received were allocated to the debt and equity on a relative fair value basis. Accordingly, debt discount of $867,213 was recognized with a corresponding increase in additional paid-in capital. Since the due date is contingent upon a future event, the entire debt discount was amortized to interest expense immediately.

On September 30, 2021, an investor owning warrants to purchase 156,250,079 common shares at $0.0004 per share entered into an agreement to cancel the aforementioned warrants in exchange for: (i) a cash payment of $1,000,000 received directly from the Chief Executive Officer; and (ii) 250 Series Z Preferred Shares having a fair value of $6,530,867. The settlement resulted in a reduction in the derivative liability of $5,750,067, an increase in non-convertible notes payable of $1,000,000, an increase in additional paid-in capital of $6,530,867 and a loss on settlement of debt of $1,780,800.

Common Stock

On September 30, 2021, the Company amended its Articles of Incorporation to change the number of authorized common shares to 1,200,000,000 shares of common stock, par value $0.001 per share, which has been reflected retroactively in the accompanying consolidated financial statements.

On January 8, 2020, the Company issued 37,160,000 shares of the Company’s common stock previously recorded as to be issued as of December 31, 2019.

On March 7, 2020, a stockholder returned 69,000 shares of the Company’s common stock back to the Company. The shares were immediately retired. Accordingly, common stock was decreased by the par value of the shares of common stock contributed of $69 with a corresponding increase in additional paid in capital.

During the year ended December 31, 2020, a warrant exercise in 2019, to purchase 120,000 shares of common stock, was rescinded. The rescission was recorded as a decrease in common stock to be issued of $120 and a decrease in additional paid-in capital of $5,880 with a corresponding increase in accounts payable and accrued expenses of $6,000.

During the year ended December 31, 2020, the Company issued an aggregate of 72,368,457 shares of its common stock, having an aggregate fair value of $370,755, upon the conversion of convertible notes with a principal amount of $92,964 and accrued interest of $128, which resulted in the reduction of $278,545 of derivative liabilities and an aggregate net gain on conversion of convertible notes of $882. Accordingly, common stock was increased by the par value of the shares of common stock issued of $72,369 and additional paid in capital was increased by $298,386.

On January 20, 2021, the Company issued 4,448,251 shares of its common stock, having a fair value of $133,002, upon the conversion of convertible notes with a principal amount of $13,345, which resulted in the reduction of $118,778 of derivative liabilities and a loss on conversion of $880.

On June 2, 2021, the Company issued 1,006,250 shares of the Company’s common stock previously recorded as to be issued as of December 31, 2020.

On June 4, 2021, an investor owning 1,485,000 shares of the Company’s common stock and warrants to purchase 971,562,497 common shares at $0.0004 per share entered into an agreement to cancel the aforementioned common shares and warrants in exchange for a cash payment of $11,000 by the Company. Accordingly, the cancelation agreement resulted in a reduction in common stock of $1,485 for the par value of the common shares, a reduction in additional paid-in capital of $9,515, and a reduction in the derivative liability of $74,134,327 and a gain on settlement of $74,134,327.

On June 6, 2021, the Company awarded an aggregate of 2,175,431 fully-vested shares of common stock, having a fair value of $166,855, to the Chief Executive Officer for services rendered.

As of September 30, 2021 and December 31, 2020, there were 499,871,337 and 493,726,405 shares, respectively, of common stock issued and outstanding.

NOTE 13 – WARRANTS

From January 7 to March 23, 2021, the Company issued 4.82388 shares of Series Y preferred stock, having a stated value of $96,478, in exchange for convertible notes payable of $38,500, accrued interest of $77,205, and 131,249,975 warrants. The exchanges resulted in a reduction of derivative liabilities related to the convertible notes and accrued interest of $2,502,223, a reduction of derivative liabilities related to the warrants of $1,396,283, and a net gain on settlement of $3,917,734 (See Note 9).

On June 4, 2021, an investor owning 1,485,000 shares of the Company’s common stock and warrants to purchase 971,562,497 common shares at $0.0004 per share entered into an agreement to cancel the aforementioned common shares and warrants in exchange for a cash payment of $11,000 by the Company. The cancelation agreement resulted in a reduction in common stock of $1,485 for the par value of the common shares, a reduction in additional paid-in capital of $9,515, and a reduction in the derivative liability of $74,134,327 and a gain on settlement of debt of $74,134,327 (See Note 12).

On June 4, 2021, an investor owning warrants to purchase 1,250,000,002 common shares at $0.0004 per share entered into an agreement to cancel the aforementioned common shares and warrants in exchange for a cash payment of $15,000 by the Company. Accordingly, the cancelation agreement resulted in a reduction in the derivative liability of $95,380,286 and a gain on settlement of $95,365,286.

On September 30, 2021, an investor owning warrants to purchase 156,250,079 common shares at $0.0004 per share entered into an agreement to cancel the aforementioned in exchange for: (i) a cash payment of $1,000,000 received directly from the Chief Executive Officer; and (ii) 250 Series Z Preferred Shares having a fair value of $6,530,867. The settlement resulted in a reduction in the derivative liability of $5,750,067, offset by a reduction in cash of $1,000,000, an increase in additional paid-in capital of $6,530,867 and a loss on settlement of debt of $1,780,800.

During the nine months ended September 30, ~~2017, the Company issued an aggregate of 22,745,898~~2021, warrants to purchase 440,002 shares of ~~its~~ common stock ~~for services valued at $14,204,255.~~expired.

~~During~~

A summary of the Company’s warrant activity during the nine months ended September 30, ~~2017, the Company sold 2,394,000 shares of its common stock and warrants for net proceeds of $1,198,000.~~2021, is presented below:

~~During the nine months ended September 30, 2017, the Company issued an aggregate of 41,153 shares for its common stock for cashless exercise of common stock options.~~

	Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term		Aggregate Intrinsic Value
Outstanding at December 31, 2020		2,521,077,555		$	0.00109		2.04	$	14,804,944
Grants		-			-
Exercised		-			-
Expired/Canceled		(2,509,502,555	)	$	0.0005
Outstanding at September 30, 2021		11,575,000		$	0.12927		1.17	$	9,200
Exercisable at September 30, 2021		11,575,000		$	0.12927		1.17	$	9,200

~~During the nine months ended September 30, 2017, the Company issued an aggregate of 355,689 shares of its common stock for the cashless exercise of common stock warrants.~~

Exercise Price	Warrants Outstanding		Weighted Avg. Remaining Life		Warrants Exercisable
$0.0004 – 0.20		11,450,000		1.17		11,450,000
0.40		125,000		1.25		125,000
		11,575,000		1.17		11,575,000

~~During the nine months ended September 30, 2017, the Company issued an aggregate of 1,081,000 shares of its common stock in settlement of $108,100 of convertible debt.~~

~~During the nine months ended September 30, 2017, the Company issued an aggregate of 6,933,041 shares of its common stock for exercise of common stock warrants. Net proceeds were $4,753,196.~~

~~During the nine months ended September 30, 2017, the Company issued an aggregate of 2,926,830 shares of its common stock to acquire DDDigtal (Note 1).~~

~~During the nine months ended September 30, 2017, the Company issued an aggregate of 3,250,000 shares of its common stock to acquire Odava (Note 1).~~

~~NOTE 9 – WARRANTS~~

~~Warrants outstanding and exercisable at September 30, 2017 are as follows:~~

Warrants Outstanding Warrants Exercisable
Weighted
Average Exercisable
Exercise Number of Remaining Life Number of
Price Warrants In Years Warrants
$ 0.50 3,056,670 4.42 3,056,670
0.60 50,000 2.52 50,000
0.65 2,364,000 4.81 2,364,000
0.83 100,000 3.30 100,000
0.90 5,070,002 1.97 5,070,002
1.00 670,000 0.22 670,000
1.06 146,200 1.23 146,200
3.00 407,475 1.11 407,475
11,864,347 3.04 11,864,347

~~MASSROOTS, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~SEPTEMBER 30, 2017~~

~~(unaudited)~~

~~A summary of the warrant activity for the nine months ended September 30, 2017 is as follows~~

Weighted-Average
Weighted-Average Remaining Aggregate
Shares Exercise Price Contractual Term Intrinsic Value
Outstanding at December 31, 2016 15,448,056 $ 0.81 2.4 4,225,936
Grants 4,484,000 0.58 —
Exercised (7,248,668 ) 0.68
Expired (819,041 ) 0.48
Outstanding at September 30, 2017 11,864,347 $ 0.83 3.0 $ —

Vested and expected to vest at September 30, 2017 11,864,347 $ 0.83 3.0 $ —
Exercisable at September 30, 2017 11,864,347 $ 0.83 3.0 $ —

The aggregate intrinsic value of outstanding stock warrants was ~~$0,~~$9,200, based on warrants with an exercise price less than the Company’s stock price of ~~$0.332~~$0.0372 as of September 30, ~~2017,~~2021, which would have been received by the warrant holders had those ~~warrant~~ holders exercised ~~their~~the warrants as of that date.

On July 21, 2017, upon the sale of the Company’s common stock, the Company issued 2,394,000 warrants to purchase the Company’s common stock at $0.65 per share, exercisable through July 21, 2022. These warrants contain certain anti-dilutive (reset) provisions (See Note 7).

NOTE 14 – STOCK OPTIONS

On August 24, 2017, in connection with the issuance of convertible notes, the Company granted to the same investors five year warrants to purchase an aggregate of 2,090,000 shares of the Company’s common stock at $0.50 per share. The warrants may be exercised any time after the issuance through and including the fifth (5^th~~) anniversary of its original issuance. These warrants contain certain anti-dilutive (reset) provisions (See Note 7).~~

~~NOTE 10 – EMPLOYEE EQUITY INCENTIVE PLANS~~

~~The Company’s shareholders~~Our stockholders approved our 2014 Equity Incentive Plan in June 2014 (the “2014 Plan”), our 2015 Equity Incentive Plan in December 2015 (the “2015 Plan”), our 2016 Equity Incentive Plan ~~(“2016 Plan”)~~ in October 2016 ~~and~~(“2016 Plan”), our 2017 Equity Incentive Plan in December 2016 (“2017 Plan”, and together with the 2014 Plan, 2015 Plan, ~~and~~ 2016 Plan, the “Prior Plans”), our 2018 Equity Incentive Plan in June 2018 (the “2018 Plan”), and our 2021 Equity Incentive Plan in September 2021 (“2021 Plan” , and together with the Prior Plans, the “Plans”). The Prior Plans are identical, except for the number of shares reserved for issuance under each. As of September 30, ~~2017,~~2021, the Company had granted an aggregate of ~~37,950,282~~64,310,000 securities under the ~~plans,~~Plans since inception, with ~~2,150,149~~50,190,000 shares available for future issuances. The Company has made no grants under the plans thus far in 2021.

The Plans provide for the grant of incentive stock options to our employees and our ~~parent and subsidiary corporations’~~subsidiaries’ employees, and for the grant of ~~non-statutory~~ stock options, stock bonus awards, restricted stock awards, performance stock awards and other forms of stock compensation to our employees, including officers, consultants and directors. ~~Our~~The Prior Plans also provide that the grant of performance stock awards may be paid out in cash as determined by the ~~Committee.~~committee administering the Prior Plans.

During the nine months ended September 30, 2017, the Company granted options to purchase 2,854,000 shares of common stock for ten years. The fair value of $2,054,521, was determined using the Black-Scholes Option Pricing Model, assuming approximately 1.81% to 2.35% risk-free interest, 0% dividend yield, 103.66% to 110.16% volatility, and expected life of five to ten years and will be charged to operations over the vesting terms of the options.

~~MASSROOTS, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~SEPTEMBER 30, 2017~~

~~(unaudited)~~

~~The summary terms of the issuances are as follows:~~

Exercise Number of Vesting
Price Options Terms
$ 0.50 80,000 Immediately
0.50 100,000 Quarterly over one year
0.50 605,000 Quarterly over two years
0.81 5,000 Immediately
0.82 150,000 Quarterly over two years
0.85 150,000 Quarterly over one year
0.87 125,000 Immediately
0.89 425,000 Monthly over one year
0.89 90,000 Quarterly over two years
0.95 400,000 Quarterly over two years
0.98 24,000 Monthly over two years
1.05 50,000 Immediately
1.05 95,000 Monthly over two years
1.05 60,000 Monthly over one year
1.06 60,000 Monthly over one year
1.07 110,000 Monthly over one year
1.07 325,000 Monthly over two years
0.83 2,854,000

~~On June 21, 2017, the Company accelerated vesting of 5,000,000 options to fully vesting. As a result, the Company charged $2,544,741 to operations during the nine months ended September 30, 2017.~~

~~Stock options outstanding and exercisable on September 30, 2017 are as follows:~~

Exercise Number of Remaining Life Number of
Price Options In Years Options Exercisable
$ 0.10 1,056,786 6.68 806,786
0.50 689,631 7.99 689,631
0.51 1,891,779 9.02 1,891,779
0.60 105,000 7.53 105,000
0.77 758,331 9.20 683,331
0.80 145,000 8.30 145,000
0.81 5,000 9.45 5,000
0.82 37,500 9.46 37,500
0.85 150,000 9.42 75,000
0.86 5,204,165 9.22 5,204,165
0.87 125,000 9.48 125,000
0.89 577,500 9.28 285,000
0.90 1,745,413 8.20 1,745,413
0.95 125,000 9.38 125,000
0.98 24,000 9.32 8,000
1.00 837,494 8.22 837,494
1.05 430,838 8.66 415,838
1.06 30,000 9.35 30,000
1.07 168,326 9.28 164,993
14,106,763 8.77 13,379,930

~~MASSROOTS, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~SEPTEMBER 30, 2017~~

~~(unaudited)~~

~~A summary of the stock option activity for the nine months ended September 30, 2017:~~

Weighted-Average
Weighted-Average Remaining Aggregate
Shares Exercise Price Contractual Term Intrinsic Value
Outstanding at December 31, 2016 14,824,158 0.52 9.37 $ 4,566,717
Grants 2,854,000 0.50 9.71 —
Exercised (522,428 ) 0.16
Forfeiture/Canceled (3,048,967 ) $ 0.73 —
Outstanding at September 30, 2017 14,106,763 $ 0.76 8.77 $ 245,174
Exercisable at September 30, 2017 13,379,930 $ 0.76 8.79 $ 187,174

The aggregate intrinsic value of outstanding stock options was based on options with an exercise price less than the Company’s common stock price of $0.332 as of September 30, 2017, which would have been received by the option holders had those option holders exercised their options as of that date.

Option valuation models require the input of highly subjective assumptions. The fair value of stock-based payment awards was estimated using the Black-Scholes option pricing model with a volatility figure derived from historical data. The Company accounts for the expected life of options based on the contractual life of ~~options for non-employees.~~the options.

~~The fair value~~A summary of ~~all options vesting~~the Company’s stock option activity during the nine months ended September 30, ~~2017 and 2016~~2021, is presented below:

	Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term		Aggregate Intrinsic Value
Outstanding at December 31, 2020		27,621,765	$	0.49		6.59	$	-
Grants		-
Exercised		-
Expired/Canceled		-
Outstanding at September 30, 2021		27,621,765	$	0.49		5.74	$	-
Exercisable at September 30, 2021		27,621,765	$	0.49		5.74	$	-

Exercise Price	Number of Options		Remaining Life In Years		Number of Options Exercisable
$0.01 – 0.25		13,306,786		6.51		13,306,786
0.26 – 0.50		1,939,631		5.51		1,939,631
0.51 – 0.75		1,820,112		4.93		1,820,112
0.76 – 1.00		9,926,072		4.96		9,926,072
1.01 – 2.00		629,164		4.85		629,164
		27,621,765		5.74		27,621,765

The aggregate intrinsic value of ~~$5,678,272 and $1,974,710, respectively. Unrecognized compensation expense~~outstanding stock options was $0, based on options with an exercise price less than the Company’s stock price of ~~$286,153 at~~$0.0372 as of September 30, ~~2017 will be expensed in future periods.~~2021, which would have been received by the option holders had those option holders exercised their options as of that date.

NOTE 15 – RELATED PARTY TRANSACTIONS

~~NOTE 11 – SUBSEQUENT EVENTS~~During the nine months ended September 30, 2021 and 2020, the Company received aggregate advances of $2,091 and $0 and repaid an aggregate of $5,278 and $0, respectively, to the Company’s Chief Information Officer and a $25,000 settlement payment was made by Empire Services, Inc. on behalf of the Company. The advances are non-interest bearing and due on demand. As of September 30, 2021 and December 31, 2020, the Company owed $0 and $3,187, respectively, in advances to the Company’s Chief Information Officer and $25,000 and $0, respectively, in advances to Empire Services, Inc. (See Note 6).

During the nine months ended September 30, 2021 and 2020, the Company received aggregate proceeds of $357,053 and $20,520, respectively, and repaid $0 from the issuance of non-convertible notes to the Company’s Chief Executive Officer and Empires Services, Inc. In addition, Empire Services, Inc. paid the following on behalf of the Company: (i) the $1,000,000 settlement payment to Iroquois; and (ii) $158,371 of operating expenses to vendors.The non-convertible notes bear interest from 15% to 20% and have maturity dates ranging from December 31, 2020 through October 15, 2021. For those notes in default, the interest rate increases to 35% per annum from the date of default. As of September 30, 2021 and December 31, 2020, the Company owed $1,535,944 and $0, respectively, in non-convertible notes payable to the Company’s Chief Executive Officer and Empire Services, Inc. (See Note 6).

On ~~October 4, 2017 and October 5, 2017,~~September 30, 2021, the Company entered into a ~~Simple~~Series Z Preferred Stock Issuance Agreement with the Company’s Chief Executive Officer whereby the Company received $1,000,000 in exchange for ~~Future Tokens with two accredited investors, relating~~the issuance of: (i) a $1,000,000 note payable; and (ii) 250 Series Z Preferred Shares having a fair value of $6,530,867 (See Note 15). The note bears interest of 8% per annum and is due within three days of the Company’s next closing of equity financing of $3,000,000 or more. The proceeds received were allocated to the debt and equity on a relative fair value basis. Accordingly, debt discount of $867,213 was recognized with a corresponding increase in additional paid-in capital. Since the due date is contingent upon a future ~~right~~event, the entire debt discount was amortized to interest expense immediately (See Note 12).

NOTE 16 – SUBSEQUENT EVENTS

The Company evaluates events that have occurred after the balance sheet date but before the unaudited condensed consolidated financial statements are issued.

On September 30, 2021, Greenwave Technology Solutions, Inc. entered into definitive agreements to acquire Empire Services, Inc. for consideration of (i) 495,000,000 shares of Common Stock, (ii) within 3 business days of the closing of the Company’s next capital raise, repayment of a $1 million advance made to purchase ~~$25,000~~Empire’s Virginia Beach location and ~~$100,000 in units of~~(iii) a ~~cryptographic token (a “Token”), respectively, at a discount, if the Company conducts a public sale of its Tokens. Pursuant to the agreements,~~promissory note in the ~~event the Company conducts such a public sale~~principal amount of its Tokens, it will automatically issue to each investor a number of Tokens equal to such investor’s investment, based on a rate that is fifty percent (50%) of the price per Token in the public sale. In the event the Company sells Tokens in the public sale at different prices, each investor’s Tokens shall be determined based on the most advantageous rate publicly marketed.

~~On October 5, 2017, the Company issued 394,858 shares of its common stock to a member of the Board of Directors in connection~~$3.7 million with a ~~cashless exercise of 443,214 shares pursuant to a Stock Option Agreement, dated June 4, 2014. The shares are reflected as shares to be issued as~~maturity date of September 30, ~~2017 (See Note 8).~~2023. The acquisition was effective October 1, 2021 upon the effectiveness of a Certificate of Merger in Virginia.

~~On October 5, 2017, the Company issued 45,000 shares to a former employee for services rendered. The shares are reflected as shares to be issued as of September 30, 2017 (See Note 8).~~

On October 17, 2017, the Company issued stock certificates for, in the aggregate, 349,000 shares of its common stock which had been sold in connection with an offering of up to $2,000,000 of its common stock and warrants conducted in July 2017, and closed on July 21, 2017. Such shares were inadvertently not issued following such closing. One of the stock certificates noted above was issued for 70,000 shares of the Company’s common stock, but should have been issued for 30,000 shares, so the Company will rescind 40,000 of such shares. The 309,000 shares (which does not include the 40,000 shares of common stock issued in error) are reflected as shares to be issued as of September 30, 2017 (See Note 8).

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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

Overview

~~MassRoots,~~Greenwave Technology Solutions, Inc. is a Delaware corporation formed on April 24, 2013. Our principal place of business is located at 1624 Market Street, Suite 201, Denver, CO 80202, our telephone number is (833) 467-6687 and our corporate website is www.MassRoots.com/Investors.

As discussed in the Notes to the Financial Statements, the Company has experienced recurring losses and negative cash flows from operations since inception. We have relied on equity financing to fund operations. There can be no guarantee that we will ever become profitable, or that adequate additional financing will be realized 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.

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

COVID-19 Pandemic

~~Our platform is the heart~~duration or magnitude of the ~~cannabis~~adverse results of the outbreak of COVID-19 and its effects on our business including our financial condition, liquidity, or results of operations at this time. Management is actively monitoring the global situation and its impact on the Company’s financial condition, liquidity, operations, customers, industry, ~~ecosystem -- connecting dispensary operators, cultivators, cannabis consumers,~~ and ~~regulatory agencies in a closed-loop environment with compliance at~~workforce. Given the ~~core. We are currently available~~daily evolution of the COVID-19 outbreak and the global responses to ~~dispensaries and cultivators in~~curb its spread, the ~~State of Oregon, and dispensaries are~~Company is not able to ~~submit data to state regulators~~estimate the effects that the COVID-19 outbreak will have on ~~a daily basis. Over the coming quarters, we plan to expand our regulatory compliance platform to the Alaska, Colorado, Maryland, Florida and California markets.~~

~~MassRoots and Odava’s Value Proposition to State Regulators~~

Through our point-of-sale software, we enable dispensary operators to easily record sales, track inventory, and submit this data with state regulatory agencies on a daily basis. This provides regulators with a fully transparent snapshotits results of operations, financial condition, or liquidity for fiscal year 2021. As of the ~~entire cannabis supply chain with millions~~date of ~~data points, updated daily, which they can utilize~~this Quarterly Report on Form 10-Q/A, the Company has experienced delays in securing new customers and related revenues and the longer this pandemic continues there may be additional impacts. Furthermore, the COVID-19 outbreak has and may continue to ~~detect potential illegal diversion and ensure compliance with state regulations.~~impact the Company’s ability to raise capital.

~~As part~~Although the Company cannot estimate the length or gravity of ~~our point-of-sale solution, we also provide an ID scanner to determine whether patients are over~~ the ~~age 18 or 21, depending~~impact of the COVID-19 outbreak at this time, if the pandemic continues, it may have a material adverse effect on the ~~state or local laws~~Company’s results of future operations, financial position, liquidity, and ~~regulations. Utilizing the same database of Department of Motor Vehicles information utilized by mainstream brands, IDs are checked against DMV databases in 46 states~~capital resources, and ~~provides the highest-level of age authentication publicly available, although such age confirmations may not always be correct.~~

~~We believe that by providing the software that makes the cannabis industry as compliant and transparent as possible, we will contribute to the acceleration~~those of the ~~spread of legal and regulated cannabis markets. We believe that~~third parties on which the ~~vast majority of prohibitionist policies are formulated based on incorrect data and preconceptions that can be objectively proven false.~~

~~MassRoots’ and Odava’s Value Proposition to Dispensary Operators~~

~~The Odava Retail Platform is available to dispensary operators~~Company relies in Oregon as a paid software-as-a-service platform to manage their point-of-sale, compliance and loyalty program operations. Our software streamlines dispensary operations and work flows, while enabling seamless interaction with their customers through the MassRoots App.

fiscal year 2021.

~~MassRoots’ and Odava’s Value Proposition to Users~~

MassRoots helps provide cannabis consumers with the information they need to influence local, state, and corporate cannabis policies, while staying better connected with dispensaries in their local areas. Cannabis consumers can view previous order history at local dispensaries, see which strains and products dispensaries have in stock, while receiving updates of legalization-related events happening in their local communities.

~~MassRoots’ and Odava’s Value Proposition to Investors~~

As a technology company, the MassRoots platform is able to rapidly scale with minimal marginal costs – each additional dispensary, user of our mobile application or cultivator that we add costs negligible server hosting fees. Our business model gives us exposure to every regulated cannabis market without establishing a physical presence in each state. This minimizes required capital while, at the same time, offering a direct role in the cannabis industry without ever touching the plant itself.

~~The Team~~

~~MassRoots has 6 full-time employees working at our headquarters in downtown Denver, Colorado, along with several outside contractors building out the technology platform.~~

~~2017 Elections~~

On November 7, 2017, voters in New Jersey and Virginia elected pro-legalization Governors who have both said they will move quickly to enact legislation that decriminalizes or legalizes marijuana in their States. This is in addition to a bevy of other positive news for marijuana reformers with the elections in Georgia, Ohio, Philadelphia, Detroit and New York. This comes on the heels of the 2016 elections where 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.

Our business model is designed 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 incremental cost. Because MassRoots is not involved in the production or sale of cannabis, we do not have to build out-grow operations, open retail stores, or have a significant physical presence in the state in order to generate revenue. At the same time, MassRoots’ financial model is not tied to the success 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.

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

~~German Trading~~

The Company was made aware that its Common Stock has been trading on the Stuttgart Exchange and München Exchange in Germany, both under the ticker symbol 2R1. On November 10, 2017, the stock price closed at €0.157 on the Stuttgart Exchange and at €0.153 on the München Exchange.

~~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. Odava competes with cannabis seed-to-sale technology platforms such as MJ Freeway, BioTrack THC, Greenbits, Flowhub, and Treez. We believe the cloud-based infrastructure of our platform, its ease-of-use, the potential for automatic API integrations and dynamic regulatory compliance engine present a significantly higher value proposition than our competitors.

~~Results of Operations for~~For the Three Months Ended September 30, ~~2017 as Compared to the Three Months Ended September 30, 2016~~2021 and 2020

Three Months Ended September 30,
2017 2016 $ Change % Change
Revenues: $ 11,516 $ 209,003 $ (197,487 ) (95 )%
Total operating expense 7,533,530 2,094,211 5,439,319 260 %
Loss from operations (7,522,014 ) (1,885,208 ) (5,636,806 ) 299 %
Total other income (expense): 444,948 (1,567,456 ) 2,012,404 128 %
NET LOSS $ (7,077,066 ) $ (3,452,664 ) $ (3,624,402 ) 105 %

	For the three months ended
	Sept 30, 2021			Sept 30, 2020			$ Change			% Change
Revenue	$	54		$	2,316		$	(2,262	)		(97.67	%)

Operating Expenses		395,312			208,238			187,074			89.84	%

Loss from Operations		(395,258	)		(205,922	)		(189,336	)		91.95	%

Other Income (Expense)		(128,483	)		64,885,144			(65,013,627	)		(100.01	%)

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

~~Revenues~~

Revenues

For the three months ended September 30, ~~2017~~2021 and ~~2016,~~2020, we generated revenues of ~~$11,516~~$54 and ~~$209,003,~~$2,316, respectively, a decrease of ~~$197,487. Of~~$2,262 primarily due to the ~~$11,516 generated in~~relaunch of product placements on the Company’s YouTube and social media channels.

Operating Expenses

For the three months ended September 30, ~~2017, all~~2021 and 2020, our operating expenses were $395,258 and $208,238, respectively, an increase of $187,074. There was ~~made up of advertising revenue related to the MassRoots network. The~~a decrease in ~~revenues~~advertising expenses from $43,020 for the three months ended September 30, ~~2017~~2020 to ($4,578) for the same period in 2021, a decrease of $47,598 as the Company advertised less. There was ~~primarily caused~~an increase in payroll and related expenses of $2,814, as payroll and related expenses increased to $66,693 for the three months ended September 30, 2021 from $63,879 for same period in 2020. Other general and administrative expenses increased by ~~a lack of revenues~~$232,008 from $101,189 for the ~~420 Rally being generated~~three months ended September 30, 2020, to $333,197 for the three months ended September 30, 2021. This increase was attributable to higher travel and legal costs for the three months ended September 30, 2021 as compared to the same period in ~~2017.~~2020.

~~Operating Expenses~~Loss from Operations

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

Other Income (Expense)

For the three months ended September 30, ~~2017~~2021 and ~~2016, our operating expenses were $7,533,530~~2020, the Company recorded interest expense of $1,191,405 and ~~$2,094,211,~~$ 1,602,204, respectively, ~~an increase~~primarily related to Company’s convertible notes. The Company recorded $0 and a $0 loss on the conversion of ~~$5,439,319.~~convertible notes payable for the three months ended September 30, 2021 and 2020, respectively. For the three months ended September 30, ~~2017, these increases were mainly attributed to increased stock-based compensation to our employees~~2021 and ~~key consultants which,~~2020, the Company recorded a $0 change and a $85,287 loss, respectively, on the change in fair value of derivative liabilities. For the three months ended September 30, 2021 and 2020, the Company recorded gains of $2,641,481 and $66,572,635, respectively, of the change in the fair value of the derivative liability for ~~2017 was $5,510,554~~the authorized shares shortfall. The Company recorded a $1,578,559 loss on settlement of convertible notes payable and accrued interest, warrants and accounts payable during the three months ended September 30, 2021, as compared to ~~$613,353 for~~$0 during the same period ~~last year (a non-cash increase~~in 2020. There was a $0 gain on the forgiveness of ~~$4,897,201). In addition we incurred additional consulting and other service provider fees and increases~~debt for the three months ended September 30, 2021, as compared to $0 during the same period in ~~payroll and payroll-related expenditures as we expanded our business.~~2020.

~~Other~~Net Income ~~(Expense)~~(Loss) Available to Common Stockholders

For the three months ended September 30, ~~2017 and 2016, the Company recorded interest expense of $189,125 and $2,573,814, respectively. As of September 30, 2017,~~2021, we had ~~outstanding $1,095,000~~a net loss available to common stockholders of $523,741 as compared to a net loss of $64,679,222 for the same period in ~~convertible notes. For the three months ended September 30, 2017 and 2016, the Company realized gains related to the fair value mark to market adjustments~~2020, a difference of its derivative liabilities of $634,073 and $1,006,358, respectively. The derivative liabilities are caused by certain price protections included in the notes and warrants issued as part of the Company’s convertible debt and common stock offering. For the three months ended September 30, 2017 and 2016, the Company recorded amortization of discount on notes payable of $187,272 and $676,617, respectively, included in the interest discussion above. In addition, during the three months ended September 30, 2016, we incurred non-cash interest and penalties relating to our convertible debt of $1,265,375 and $584,735, respectively.

~~Net Loss~~

~~For the three months ended September 30, 2017 and 2016, we had net losses of $7,077,066 and $3,452,664, respectively, an increase of $3,624,402,~~$65,202,963 for the reasons discussed above.

~~Results of Operations for~~For the Nine Months Ended September 30, ~~2017 as Compared to the Nine Months Ended September 30, 2016~~2021 and 2020

Nine Months Ended September 30,
2017 2016 $ Change % Change
Revenues: $ 289,130 $ 794,621 $ (505,491 ) (64 )%
Total operating expense 27,315,960 6,795,371 20,520,589 302 %
Loss from operations (27,026,830 ) (6,000,750 ) (21,026,080 ) 350 %
Total other income (expense): 871,933 (2,254,354 ) 3,126,287 139 %
NET LOSS $ (26,154,897 ) $ (8,255,104 ) $ (17,899,793 ) 217 %

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

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

Loss from Operations		(1,196,292	)		(694,041	)		(502,251	)		72.37	%

Other Income (Expense)		12,060,441			(46,708,918	)		58,769,359			(125.82	%)

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

Revenues

For the nine months ended September 30, ~~2017~~2021 and ~~2016,~~2020, we generated revenues of ~~$289,130~~$1,660 and ~~$794,621,~~$2,316, respectively, a decrease of ~~$505,491. The $289,130 generated in~~$656 primarily due to the relaunch of product placements on the Company’s YouTube and social media channels.

Operating Expenses

For the nine months ended September 30, ~~2017~~2021 and 2020, our operating expenses were $1,197,952 and $696,357, respectively, an increase of $501,595. There was ~~primarily comprised of advertising revenue related to the MassRoots network. The~~a decrease in ~~revenues~~advertising expenses from $43,020 for the nine months ended September 30, ~~2017~~2020 to $18,125 for the same period in 2021, a decrease of $24,895. There was ~~primarily caused~~a decrease in payroll and related expenses of $14,167 due to reduction in the number of employees, as payroll and related expenses decreased to $225,603 for the nine months ended September 30, 2021 from $ 239,770 for same period in 2020. Other general and administrative expenses increased by ~~no revenues~~$540,510 from $413,417 for the ~~420 Rally being generated~~nine months ended September 30, 2020, to $953,927 for the nine months ended September 30, 2021. This increase was attributable to higher travel and legal costs for the nine months ended September 30, 2021 as compared to the same period in ~~2017.~~2020.

~~Operating Expenses~~Loss from Operations

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

Other Income (Expense)

For the nine months ended September 30, ~~2017~~2021 and ~~2016, our operating expenses were $27,315,960~~2020, the Company recorded interest expense of $2,147,364 and ~~$6,795,371,~~$3,607,210, respectively, ~~an increase~~primarily related to Company’s convertible notes. The Company recorded a $880 loss and $882 gain on the conversion of ~~$20,520,589. This increase was mainly attributable to an increase stock based compensation to our employees~~convertible notes payable for the nine months ended September 30, 2021 and ~~key consultants which,~~2020, respectively. For the nine months ended September 30, 2021 and 2020, the Company recorded a $300,885 and a $303,593 gain, respectively, on the change in fair value of derivative liabilities. For the nine months ended September 30, 2021 and 2020, the Company recorded losses of $159,633,797 and $43,406,183, respectively, of changes in the fair value of the derivative liability for ~~2017 was $19,882,527~~the authorized shares shortfall. The Company recorded a $173,349,076 gain on settlement of convertible notes payable and accrued interest, warrants and accounts payable during the nine months ended September 30, 2021, as compared to ~~$2,306,662 for~~$0 during the same period ~~last year (a non-cash increase~~in 2020. There was a $192,521 gain on the forgiveness of ~~$17,575,865). In addition we incurred additional consulting and other service provider fees and increases~~debt for the nine months ended September 30, 2021, as compared to $0 during the same period in ~~payroll and payroll-related expenditures as we expanded our business.~~2020.

~~Other~~Net Income ~~(Expense)~~(Loss) Available to Common Stockholders

For the nine months ended September 30, 2017 and 2016, the Company recorded interest expense of $189,125 and $3,575,008, respectively. As of September 30, 2017, we had outstanding $1,095,000 in convertible notes. For the nine months ended September 30, 2017 and 2016, the Company realized gains related to the fair value mark to market adjustments of its derivative liabilities of $986,058 and $1,320,654, respectively. The derivative liabilities are caused by certain price protections included in the warrants issued as part of the Company’s convertible debt and common stock offerings. For the nine months ended September 30, 2017 and 2016, the Company recorded amortization of discount on notes payable of $187,272 and $1,549,669, respectively, included in the interest discussion above. Lastly, during the nine months ended September 30, 2017, we sold our security investment in Flowhub for $250,000 realizing a gain on sale of securities of $75,000.

~~Net Loss~~

~~For the nine months ended September 30, 2017 and 2016,~~2021, we had net losses available to common stockholders of ~~$26,154,897 and $8,255,104, respectively, an increase~~$23,934,774 as compared to a net loss of ~~$17,899,793,~~$142,405,892 for the same period in 2020, a difference of $118,471,118 for the reasons discussed above.

Liquidity and Capital Resources

Net cash used in operations for the nine months ended September 30, ~~2017~~2021 and ~~2016~~2020 was ~~$7,200,176~~$390,269 and ~~$2,915,832,~~$717,062, respectively. This ~~increase~~$326,793 decrease was primarily caused by ~~a widening net loss in the Company’s operations,~~ an increase in ~~the value of options issued to employees,~~accounts payable and ~~an expansion of MassRoots’ development team.~~

accrued expenses, accrued payroll and related expenses, and deferred revenue. Net cash used in ~~investing activities~~operations for the nine months ended September 30, ~~2017 and 2016~~2020 was ~~$236,833 and $19,100, respectively. These investing activities in 2017 were proceeds from sale of securities of $250,000 and received $11,273 in connection with~~primarily based on the ~~acquisitions of DDDigtal Inc and Odava, net with the purchase of equipment, primarily computers, of $57,533, investment in convertible note of $300,000 and equity investment of $100,002. For~~loss for the nine months ended September 30, ~~2016, $19,100 was used to purchase office equipment.~~2020, partially offset by decreases in accounts payable and accrued payroll.

Net cash provided by financing activities for the nine months ended September 30, ~~2017~~2021 and ~~2016~~2020 was ~~$7,429,841~~$389,866 and ~~$2,675,231,~~$716,592 respectively. During the nine months ended September 30, ~~2017,~~2021, these funds ~~came~~were derived mainly from ~~warrant and option exercises of $4,753,196,~~ proceeds ~~from sale of common stock and warrants of $1,198,000, proceeds from~~related to the issuance of ~~convertible debt of $942,500~~preferred shares and proceeds from related party advances of $442,500. While for the nine months ended September 30, 2016 the Company received proceeds from its March 2016 convertible debt offering and warrants of $1,420,000, for sale of common stock of $1,660,500 and option and warrant exercises of $621,331.

~~Capital Resources~~

As of September 30, 2017, we had cash on hand of $267,322 and as of September 30, 2017; there are warrants outstanding to purchase up to aggregate of 10,640,672 shares with an exercise prices of $0.50 to $.90 per share, which, if all were exercised, would supply $7,745,437 in cash to the Company.

We currently have no external sources of liquidity such as arrangements with credit institutions, with the exception of a credit card from American Express, 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 on 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~~

non-convertible notes. During the nine months ended September 30, ~~2017, we received approximately $4,753,000 proceeds~~2020, net cash provided by financing activities was derived from ~~the exercise of our previously issued warrants.~~

On July 21, 2017, we received aggregate gross proceeds to the Company of $1,198,000 in connection with the sale of 2,394,000 shares of common stock and warrants to purchase up to 2,394,000 shares of common stock.

~~On August 24, 2017, we received net proceeds to the Company of $942,500 in connection with~~ the issuance of convertible notes, ~~and warrants to purchase $2,090,000 shares~~offset by repayment of ~~common stock.~~non-convertible notes.

Capital Resources

As of September ~~27, 2017, we received aggregate gross proceeds to~~30, 2021, the Company had cash of ~~$420,000~~$1,082 and working capital deficit (current liabilities in ~~connection with~~excess of current assets) of $17,539,723. During the sale to two investors of a right to receive units of a cryptographic token at a fifty percent (50%) discount, if the Company conducts a public sale of such tokens on or before November 30, 2017. The $420,000 is included in amounts due to related parties atnine months ended September 30, ~~2017.~~

~~Required Capital Over~~2021, the ~~Next Fiscal Year~~

~~We do not believe MassRoots has sufficient capital~~net loss available to ~~become cash-flow positive from operations. We expect to need to~~common stockholders was $23,934,774 and net cash used in operating activities was $390,269. These conditions raise ~~at least $2,500,000 over the next quarter to continue to fund operations.~~

We prepared the accompanying condensed consolidated financial statements assuming that we will continue as a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. We have not yet established an ongoing source of revenues sufficient to cover our operating costs and allow us to continue as a going concern. Our ability to continue as a going concern depends on the ability to obtain adequate capital to fund operating losses until we generate adequate cash flows from operations to fund its operating costs and obligations. If we are unable to obtain adequate capital, we could be forced to cease operations.

We depend upon our ability, and will continue to attempt, to secure equity and/or debt financing. We cannot be certain that additional funding will be available on acceptable terms, or at all. Our management has determined that there is substantial doubt about our ability to continue as a going concern ~~within~~for one year ~~after~~from the issuance of the condensed consolidated financial statements. Our primary source of operating funds since inception has been cash proceeds from the public and private placements of our securities, including debt securities, and proceeds from the exercise of warrants and options. We have experienced net losses and negative cash flows from operations since inception and expect these conditions to continue for the foreseeable future. For the foreseeable future, our ability to continue our operations is dependent upon our ability to obtain additional capital through public or private equity offerings, debt financings or other sources; however, financing may not be available to us on acceptable terms, or at all. Our failure to raise capital as and when needed would have a negative impact on our financial condition and our ability to pursue our business strategy and we may be forced to curtail or cease operations.

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

Accordingly, the accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplates continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business for one year from the date the condensed consolidated financial statements are issued.

The ~~accompanying~~carrying amounts of assets and liabilities presented in the condensed consolidated financial statements do not necessarily purport to represent realizable or settlement values. The condensed consolidated financial statements do not include any adjustments ~~relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities~~ that might result from the outcome of this ~~uncertainty.~~uncertainty such as the final settlement amounts of our notes payable and accrued interest.

Off-Balance Sheet Arrangements

As of September 30, ~~2017,~~2021, we did not have any off-balance sheet arrangements.

Contractual Obligations

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

Critical Accounting Policies and Estimates

For a discussion of our accounting policies and related items, please see the ~~Notes~~notes to the ~~Financial Statements,~~condensed consolidated financial statements, included in Part I, Item 1 of this Quarterly ~~Report.~~

Report on Form 10-Q/A.

ITEM 3. QUANTITATIVE &AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

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

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

~~As required under~~Pursuant to Rules ~~13a-15(e)~~13a-15(b) and ~~15d-15(e)~~15-d-15(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), wethe Company carried out an evaluation, ~~under the supervision and~~ with the participation of ~~our~~the Company’s management, including ~~our~~the Company’s Chief Executive Officer (“CEO”) and ~~Principal Accounting~~Chief Financial Officer (“CFO”) of the effectiveness of the ~~design~~Company’s disclosure controls and ~~operation~~procedures as of ~~our~~the end of the period covered by this report. The term “disclosure controls and procedures,” as defined under 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 officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Based upon such evaluation, the Company’s CEO (the principal executive officer) and CFO (the principal financial officer) concluded that the Company’s disclosure controls and procedures as of September 30, ~~2017. Based upon that evaluation,~~2021 were not effective.

Due to identified control deficiencies regarding the ~~Chief Executive Officer~~lack of segregation of duties and ~~Principal Accounting Officer~~the need for a stronger internal control environment, the Company’s principal executive officer and principal financial officer concluded that ~~our~~the Company’s disclosure controls and procedures were ineffective as of ~~September 30, 2017~~the end of the period covered by this report. Specifically, the Company’s controls and procedures were ineffective because the Company did not ~~effective, for~~have an adequate process established to ensure appropriate levels of review of accounting and financial reporting matters, which resulted in the ~~same reasons as previously disclosed under Item 9A. “Controls~~Company’s closing process not identifying all required adjustments and ~~Procedures”~~disclosures in ~~our Annual~~a timely fashion. The Company expects that it will need to hire accounting 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 any such additional employees would require time and training to learn the Company’s business and operating processes and procedures. For the near-term future, until such personnel are in place, this will continue to constitute a material weakness in the Company’s disclosure controls and procedures that could result in material misstatements in the Company’s financial statements not being prevented or detected.

To address the material weaknesses, the Company performed additional analysis and other procedures in an effort to ensure its financial statements included in this Quarterly Report on Form ~~10-K~~10-Q/A have been prepared in accordance with generally accepted accounting principles in the United States. Accordingly, management believes that the financial statements included in this report fairly present in all material respects the Company’s financial condition, results of operations and cash flows for ~~our fiscal year ended December 31, 2016.~~ the periods presented.

~~Because~~The Company’s principal executive officer and principal financial officer do not expect that the Company’s disclosure controls and procedures or its 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 ~~the Company’s disclosure controls~~all control issues and ~~procedures will detect or uncover every situation involving the failure~~instances of ~~persons within the Company to disclose material information otherwise required to be set forth in the Company’s periodic reports.~~fraud, if any, have been detected.

Changes in Internal ~~Controls~~Control over Financial Reporting

There have been no changes in ~~our~~the Company’s internal ~~controls~~control over financial reporting ~~(as defined in Rule 13a-15(f) and 15d-(f) of the Exchange Act) that occurred~~ during ~~the last~~its most recent fiscal quarter ~~to which this report relates~~ that have materially affected, or are reasonably likely to materially affect, ~~our~~its internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

~~None.~~As disclosed in Note 9 to the Company’s Condensed Consolidated Financial Statements, the Company is engaged in certain legal matters and there have been no material developments since December 31, 2020 with respect to our legal proceedings, except as described in Note 9. The disclosures set forth in Note 9 relating to certain legal matters are incorporated herein by reference.

~~Item~~ITEM 1A. ~~Risk Factors~~RISK FACTORS

As a “smaller reporting ~~company”,~~company,” we are not required to provide the information required by this ~~Item.~~Item 1A. Please see the Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2020 as filed with the SEC on April 16, 2021.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

The transactions described below were exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), as transactions not involving a public offering. The recipients of the securities in each of these transactions acquired the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends were affixed to the securities issued in these transactions. The recipient of the securities were also each an accredited investor within the meaning of Rule 501 of Regulation D under the Securities Act. All proceeds from the subscriptions for Common Stock and warrants to purchase shares of the Common Stock noted below will be, or have been, used for general working capital purposes.

On July 13, 2017, the Company consummated a reverse triangular merger, whereby it acquired all of the outstanding common stock of Odava Inc., a Colorado corporation. In connection with the merger, the Company issued 3,250,000 shares of Common Stock pro rata to all stockholders of Odava Inc., in exchange for all of their shares of common stock of Odava Inc., now our wholly-owned subsidiary.

In July 2017, the Company conducted an offering consisting of up to $2,000,000 of its shares of Common Stock and warrants. On July 21, 2017, the Company completed the first and final closing of the offering, thereby issuing 2,394,000 shares of unregistered Common Stock, along with five-year warrants to purchase up to 2,394,000 shares of Common Stock at $0.65 per share, to certain accredited investors, for gross proceeds of $1,198,000. On October 17, 2017, the Company issued stock certificates for, in the aggregate, 349,000 shares of Common Stock which were inadvertently not issued following the closing. However, one of such stock certificates was issued for 70,000 shares of the Company’s common stock, but should have been for 30,000 shares, so the Company will rescind 40,000 of such shares.

In August 2017, MassRoots completed a private offering to certain accredited investors of six (6) month secured convertible notes with a principal amount of $1,045,000 (the “Bridge Notes”) together with five (5) year warrants to purchase an amount of shares of Common Stock equal to the number of shares of Common Stock issuable upon the conversion of the notes in full and having an exercise price of $0.50 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 Common Stock owned by them until the Bridge Notes were fully repaid, redeemed or converted. The Bridge Notes were convertible into shares of Common Stock at a price per share equal to the lower of (i) seventy five cents ($0.75), and (ii) a 25% discount to the price at which the Company next conducts an offering after the issuance date of the note; provided, however, if any part of the principal amount of the note remains unpaid at its maturity date, the conversion price would be equal to 65% of the average of the three (3) trading days with the lowest daily weighted average prices of Common Stock occurring during the fifteen (15) days prior to the notes’ maturity date. Gross proceeds received by MassRoots in this offering were $950,000, while net proceeds were $942,500, after deducting any legal fees.

On September 27, 2017, the Company sold to two investors a right to receive units of a cryptographic token at a fifty percent (50%) discount, if the Company conducts a public sale of such tokens on or before November 30, 2017, for aggregate gross proceeds of $420,000. On October 4, 2017 and October 5, 2017, the Company sold to two investors a right to receive units of a cryptographic token at a fifty percent (50%) discount, if the Company conducts a public sale of such tokens on or before November 30, 2017, for aggregate gross proceeds of $25,000 and $100,000, respectively.

During the nine months ended September 30, 2017, the Company issued an aggregate of 41,153 shares of Common Stock upon the cashless exercise of options to purchase Common Stock, not including the cashless exercise by a member of our Board of Directors noted above, and issued an aggregate of 355,689 shares of Common Stock upon the cashless exercise of Common Stock purchase warrants.

During the nine months ended September 30, 2017, the Company issued an aggregate of 6,933,041 shares of Common Stock upon the cash exercise of Common Stock purchase warrants having an average exercise price of $0.696 per share, resulting in aggregate proceeds to the Company of $4,753,196.

~~During the nine months ended September 30, 2017, the Company issued an aggregate of 1,081,000 shares of its Common Stock in settlement of $108,100 of convertible debt.~~

Under the Company’s 2017 Equity Incentive Plan, from January 1, 2017 through September 30, 2017, the Company issued, in the aggregate, 22,745,898 shares Common Stock for services rendered, valued at $14,204,255. During the same period, under the Company’s 2017 Equity Incentive Plan, the Company issued ten (10) year options to purchase, in the aggregate, up to 2,854,000 shares of Common Stock at exercise prices ranging from $0.50 per share to $1.07 per share.

On September 6, 2017, a member of our Board of Directors acquired 394,858 shares of Common Stock upon a cashless exercise of 443,214 shares pursuant to a Stock Option Agreement, dated June 4, 2014, relating to options to purchase up to 750,000 shares of the Common Stock at $0.10 per share, was issued pursuant to the Company’s 2014 Stock Incentive Plan. The shares were issued on October 5, 2017.

~~On October 5, 2017, the Company issued 45,000 shares to a former employee for services rendered.~~

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

~~None.~~The Company does not have enough authorized and unissued shares of common stock to convert all of the convertible promissory notes into shares of common stock. As a result of this authorized shares shortfall, all of the convertible notes payable, including those where the maturity date has not yet been reached, are in default. Accordingly, (i) interest has been accrued at the default interest rate, if applicable, and (ii) the embedded conversion option has been accounted for, at fair value, as a derivative liability The Company has recorded the full value of the principal, default penalties, and interest as current liabilities, as fully described in “Note 10 - Convertible Notes Payable” in the Company’s notes to the condensed consolidated financial statements included in Part I, Item I of this Quarterly Report on Form 10-Q/A. The amount of principal in default pursuant to the convertible notes is $3,063,970 as of September 30, 2021.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

~~Simple Agreement for Future Tokens~~

On September 28, 2017, the Company entered into a Simple Agreement for Future Tokens (the “SAFT Agreements”) with two accredited investors (each, an “Investor”), relating to the future right to purchase, in the aggregate, $420,000 in units of a cryptographic token (a “Token”) at a discount, if the Company conducts a public sale of its Tokens (a “Qualifying Token Sale”). On October 4, 2017 and October 5, 2017, the Company entered into SAFT Agreements with two additional Investors relating to the future right to purchase $25,000 and $100,000 of its Tokens, respectively, in a Qualifying Token Sale. Pursuant to the SAFT Agreements, in the event the Company conducts a Qualifying Token Sale, it will automatically issue to each Investor a number of Tokens equal to such Investor’s SAFT Agreement investment, based on a rate that is fifty percent (50%) of the price per Token in the Qualifying Token Sale. In the event the Company sells Tokens in the Qualifying Token Sale at different prices, each Investor’s Tokens shall be determined based on the most advantageous rate publicly marketed. The SAFT Agreements expire and terminate upon the earlier to occur of (a) the issuance of Tokens pursuant thereto; (b) repayment to the Investors in the event of a dissolution, liquidation or winding up of the Company, a termination of Company operations, or an assignment for the benefit of the Company’s creditors; or (c) on November 30, 2017 if a Qualifying Token Sale has not occurred, unless extended for sixty (60) days by the Company in its sole discretion. No placement agents or were used or commissions paid in connection with the foregoing. The SAFT Agreements entered into on October 4, 2017 and October 5, 2017 further provide that (y) the SAFT Agreement will expire and terminate upon the occurrence of a determination that the Investor is not qualified to participate in the Qualifying Token Sale, or if the exchange selected to publicly sell the Tokens fails to issue to the Investor a trading account or similar vehicle before the Qualifying Token Sale and (z) upon a termination, the purchase amount will be repaid to the Investor. The Company has not conducted a Qualifying Token Sale to date, and cannot make any assurances as to when, or if at all, it will conduct a Qualifying Token Sale.

The foregoing description of the SAFT Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the form of SAFT Agreement filed as Exhibits 10.10 hereto, and incorporated herein by reference. Bracketed language in the form of SAFT Agreement reflects the additional provisions outlined above that are only in the SAFT Agreements entered into on October 4, 2017 and October 5, 2017.

The Company is providing this report in accordance with Rule 135c under the Securities Act, and the notice contained herein does not constitute an offer to sell the Company’s securities, and is not a solicitation for an offer to purchase the Company’s securities. The securities offered have not been registered under the Securities Act, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements.

The Company has sold the SAFT Agreements in a private placement in reliance on the exemption from registration afforded by Section 4(a)(2) of the Securities Act and Regulation D promulgated thereunder since, among other things, the above transaction did not involve a public offering. Additionally, the Company relied on similar exemptions under applicable state laws. The subscribers had access to information about the Company and their investments, took the SAFT Agreements for investment and not resale, and the Company took appropriate measures to restrict the transfer of the SAFT Agreements. Upon issuance, the resale of the SAFT Agreements will not be registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

None.

ITEM 6. EXHIBITS

(b) Exhibit Index

No. Description of Exhibit Note
2.1 Agreement and Plan of Merger between MassRoots, Inc. and Whaxy Inc. and DDDigtal Inc. and Zachary Marburger and the Stockholders of DDDigtal Inc., dated December 15, 2016. (3)
2.2 Agreement and Plan of Merger between MassRoots, Inc. and MassRoots Compliance Technology, Inc. and Odava, Inc. and Scott Kveton and the Stockholders of Odava, Inc., dated July 5, 2017. (5)
3.1 Amended and Restated Certificate of Incorporation of the Company. (2)
3.2 Amendment to Amended and Restated Certificate of Incorporation of the Company. (2)
3.3 The Company’s Bylaws. (2)
10.1 Form of Lock-Up Agreement between MassRoots, Inc. and each stockholder of DDDigtal Inc. (4)
10.2 Form of Joinder Agreement to Agreement and Plan of Merger made by each stockholder of Odava, Inc. and agreed to and acknowledged by MassRoots, Inc. and MassRoots Compliance Technology, Inc. (5)
10.3 Form of Subscription Agreement for the Purchase of Securities used in the July 2017 Equity Offering. (6)
10.4 Form of Warrant used in the July 2017 Offering. (6)
10.5 Form of Secured Convertible Original Issue Discount Notes used in the August 2017 Debt Offering (7)
10.6 Form of Warrant used in the August 2017 Debt Offering (7)
10.7 Form of Securities Purchase Agreement used in the August 2017 Debt Offering. (7)
10.8 Form of Securities Agreement used in the August 2017 Debt Offering. (7)
10.9 Separation Agreement, between the Mr. Isaac Dietrich and MassRoots, Inc., dated October 17, 2017. (8)
10.10 Form of Simple Agreement for Future Tokens between the Company and investors in the SAFT Offering. (1)
31.1 Certification of Principal Executive Officer as required by Rule 13a-14 or 15d-14 of the Exchange Act, as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (1)
31.2 Certification of Principal Accounting Officer as required by Rule 13a-14 or 15d-14 of the Exchange Act, as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (1)
32.1 Certification of Principal Executive Officer Pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (1)
32.2 Certification of Principal Accounting Officer Pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (1)
101 The following materials from the Company’s Quarterly Report on Form 10-Q for the three-months ended September 30, 2017 are formatted in XBRL (eXtensible Business Reporting Language): (i) the Balance Sheets, (ii) the Statements of Operations, (iii) the Statements of Stockholders’ Equity (Deficit), (iv) the Statements of Cash Flows, and (iv) the Notes to the Financial Statements. (1)

No.

~~(1)~~

~~Filed herewith.~~Description

2.1

~~(2)~~

~~Incorporated by reference to the Company’s Registration Statement on Form S-1 filed with the SEC on June 13, 2014.~~

~~(3)~~

~~Incorporated~~Merger Agreement dated as of September 30, 2021 (Incorporated by reference to our Current Report on Form 8-K filed with the SEC on ~~December 16, 2016.~~October 6, 2021)

3.1

~~(4)~~

~~Incorporated~~Second Amended and Restated Certificate of Incorporation of Greenwave Technology Solutions, Inc. (Incorporated by reference to our Current Report on Form 8-K filed with the SEC on ~~January 27, 2017.~~June 19, 2018)

3.2	~~(5)~~	~~Incorporated~~Bylaws of the Company (Incorporated by reference to our Registration Statement on Form S-1 filed with the SEC on June 13, 2014)
3.3		State of Delaware Certificate of Merger of Domestic Corporation Into Domestic Corporation, for MassRoots Compliance Technology, Inc. and Odava Inc., effective as of July 13, 2017 (Incorporated by reference to our Current Report on Form 8-K filed with the SEC on July ~~5, 2017.~~14, 2017)

3.4

~~(6)~~

~~Incorporated~~Certificate of Designations, Preferences and Rights of the Series A Preferred Stock (Incorporated by reference to our Current Report on Form 8-K filed with the SEC on July ~~24, 2017.~~12, 2019)

3.5	~~(7)~~	~~Incorporated~~Certificate of Designations, Preferences and Rights of the Series B Preferred Stock (Incorporated by reference to our Current Report on Form 8-K filed with the SEC on ~~August~~July 12, 2019)
3.6		Certificate of Designations, Preferences and Rights of the Series C Preferred Stock (Incorporated by reference to our Current Report on Form 8-K filed with the SEC on July 22, 2019)
3.7		Certificate of Correction to the Certificate of Designations, Preferences and Rights of the Series C Preferred Stock (Incorporated by reference to our Annual Report on Form 10-K filed with the SEC on July 16, 2020)
3.8		Certificate of Designations, Preferences and Rights of the Series X Convertible Preferred Stock. (Incorporated by reference to our Quarterly Report on Form 10-Q filed with the SEC on December 18, ~~2017.~~2020)

3.9	~~(8)~~	~~Incorporated~~Certificate of Designations, Preferences and Rights of the Series Y Preferred Stock (Incorporated by reference to our Annual Report on Form 10-K filed with the SEC on April 16, 2021)
3.10		Certificate of amendment of the certificate of incorporation of the Company effective May 24, 2021, amending Certificate of Designations, Preferences, and Rights of the Series X Convertible Preferred Stock filed with the Secretary of State on May 24, 2021 (Incorporated by reference to our Current Report on Form 8-K filed with the SEC on May 25, 2021)
3.11		Certificate of amendment of the certificate of incorporation of the Company effective May 24, 2021, amending Certificate of Designations, Preferences, and Rights of the Series Y Convertible Preferred Stock filed with the Secretary of State on December 30, 2020 (Incorporated by reference to our Current Report on Form 8-K filed with the SEC on May 25, 2021)
3.12		Certificate of amendment of the certificate of incorporation of the Company dated increasing the number of authorized shares of the Company’s common stock to 1,200,000,000 (Incorporated by reference to our Current Report on Form 8-K filed with the SEC on October 6, 2021)
3.13		Certificate of Designations, Preferences and Rights of the Series Z Preferred Stock (Incorporated by reference to our Current Report on Form 8-K filed with the SEC on October 20, 2021)
10.1**		Employment Agreement by and between the Company and Danny Meeks dated as of September 30, 2021 (Incorporated by reference to our Current Report on Form 8-K filed with the SEC on October 6, 2021)
10.2*+		Settlement Agreement, dated September 30, 2021
10.3		Stock Issuance Agreement, dated September 30, 2021 (Incorporated by reference to our Current Report on Form 8-K filed with the SEC on October 20, 2021)
10.4		Exchange Agreement, dated September 30, 2021 (Incorporated by reference to our Current Report on Form 8-K filed with the SEC on October 20, 2021)
31.1*		Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*		Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*		Certification of the Chief Executive Officer pursuant to Rule 13a-14(b) of the Exchange Act and 18 ~~2017.~~U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*		Certification of the Chief Financial Officer pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*		Inline XBRL Instance Document (the Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).
101.SCH*		Inline XBRL Taxonomy Extension Schema Document.
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104*		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

33*

Filed or furnished herewith.

+	Attachments have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company hereby undertakes to furnish copies of such omitted materials supplementally upon request by the U.S. Securities and Exchange Commission.

**	Agreement with management or compensatory plan or arrangement

SIGNATURES

~~SIGNATURES~~

Pursuant to the requirements of the Securities Exchange Act of 1934, the ~~Registrant~~registrant has duly caused this report to be signed on its behalf by the undersigned ~~hereunto~~thereunto duly authorized.

~~MASSROOTS, INC.~~

~~Dated: November 14, 2017~~

~~By:~~ ~~/s/ Scott Kveton~~

~~Scott Kveton~~

~~Chief Executive Officer~~

~~(Principal Executive Officer)~~

~~(Principal Financial and Accounting Officer)~~

	34 GREENWAVE TECHNOLOGY SOLUTIONS, INC.

Date: December 7, 2021	By:	/s/ Danny Meeks
		Danny Meeks, Chief Executive Officer (Principal Executive Officer)

Date: December 7, 2021	By:	/s/ Danny Meeks
		Danny Meeks,Chief Financial Officer (Principal Financial and Accounting Officer)

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MASSROOTS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

		September 30,			December 31,
		2017			2016
		(unaudited)
ASSETS
Current assets:
Cash	$	267,322		$	374,490
Accounts receivable		—			3,306
Prepaid expenses		10,440			—
Total current assets		277,762			377,796

Property and equipment, net		116,845			77,322

Other assets:
Goodwill		4,971,991			—
Investments		403,249			235,000
Deposits and other assets		33,502			33,502
Total other assets		5,408,742			268,502

Total assets	$	5,803,349		$	723,620

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	258,845		$	382,550
Accrued expenses		63,274			—
Loan payable		3,156			—
Due to related parties		492,003			—
Deferred revenue		—			27,010
Convertible notes payable, net of debt discount of $713,658		331,342			—
Derivative liability		1,506,414			1,301,138
Total current liabilities		2,655,034			1,710,698

Long term debt:
Convertible notes payable, long term		—			108,100
Total liabilities		2,655,034			1,818,798

Stockholders' equity (deficit):
Common stock, $0.001 par value; 200,000,000 shares authorized; 111,326,981 and 71,908,370 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively		111,327			71,908
Common stock to be issued, 1,551,217 and 1,740,000 shares as of September 30, 2017 and December 31, 2016, respectively		1,551			1,740
Additional paid in capital		59,052,979			28,693,819
Accumulated deficit		(56,017,542	)		(29,862,645	)
Total stockholders' equity (deficit)		3,148,315			(1,095,178	)

Total liabilities and stockholders' equity (deficit)	$	5,803,349		$	723,620

See the accompanying notes to the unaudited condensed consolidated financial statements

MASSROOTS, INC.
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
NINE MONTHS ENDED SEPTEMBER 30, 2017

					Common stock						Additional
	Common stock				To be issued						Paid in			Accumulated
	Shares		Amount		Shares			Amount			Capital			Deficit			Total
Balance, December 31, 2016		71,908,370	$	71,908		1,740,000		$	1,740		$	28,693,819		$	(29,862,645	)	$	(1,095,178	)
Common stock issued for services rendered		22,745,898		22,746		(1,005,141	)		(1,005	)		14,182,514			—			14,204,255
Sale of common stock		2,085,000		2,085		309,000			309			1,195,606			—			1,198,000
Common stock issued upon exercise of warrants for cash		6,933,041		6,933		112,500			113			4,746,150			—			4,753,196
Common stock issued upon cashless exercise of options		41,153		41		394,858			394			(435	)		—			—
Common stock issued upon cashless exercise of warrants		355,689		356		—			—			(356	)		—			—
Common stock issued in settlement of convertible notes		1,081,000		1,081		—			—			107,019			—			108,100
Common stock issued to acquire Odava Inc.		3,250,000		3,250		—			—			1,963,000			—			1,966,250
Common stock issued to acquire DDDigtal Inc.		2,926,830		2,927		—			—			2,880,293			—			2,883,220
Reclassify fair value of liability warrants issued in connection with sale of common stock		—		—		—			—			(1,003,870	)		—			(1,003,870	)
Reclassify fair value of derivative liability to equity upon warrant exercise(s)		—		—		—			—			610,967			—			610,967
Stock based compensation		—		—		—			—			5,678,272			—			5,678,272
Net loss		—		—		—			—			—			(26,154,897	)		(26,154,897	)
Balance, September 30, 2017 (unaudited)		111,326,981	$	111,327		1,551,217		$	1,551		$	59,052,979		$	(56,017,542	)	$	3,148,315

See the accompanying notes to the unaudited condensed consolidated financial statements

MASSROOTS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS *(unaudited)*

		Nine months ended September 30,
		2017		2016
Supplemental disclosures of cash flow information:
Cash paid during period for interest	$	—	$	—
Cash paid during period for taxes	$	—	$	—

Non cash investing and financing activities:
Common stock issued in settlement of debt	$	108,100	$	447,085
Common stock issued in payment of penalties related to notes payable	$	—	$	163,621
Common stock issued to acquire DDDigtal Inc.	$	2,883,220	$	—
Net assets acquired from acquisition of DDDigtal Inc.	$	15,448	$	—
Common stock issued to acquire Odava, Inc.	$	1,966,250	$	—
Net assets acquired from acquisition of Odava, Inc.	$	2,601	$	—
Reclassification of liability warrants from equity in connection with the sale of common stock	$	1,003,870	$	—
Reclassification of derivative liability to equity upon note prepayment(s)	$	—	$	7,308
Reclassification of derivative liability to equity upon warrant exercise(s)	$	610,967	$	—

See the accompanying notes to the unaudited condensed consolidated financial statements

Cash (paid in December 2016)	$	60,000
2,926,830 shares of the Company’s common stock		2,883,220
Liabilities assumed		40,140
Total purchase price	$	2,983,360

Cash	$	8,672
Accounts receivable		3,583
Property and equipment		3,333
Goodwill		2,967,772
Assets acquired	$	2,983,360

	Three months ended September 30, 2017			Three months ended September 30, 2016
Total revenues	$	11,516		$	232,313
Net loss		(7,077,066	)		(7,263,951	)
Basic and diluted net loss per common share	$	(0.07	)	$	(0.07	)

	Nine months ended September 30, 2017			Nine months ended September 30, 2016
Total revenues	$	289,130		$	833,304
Net loss		(26,154,897	)		(8,373,192	)
Basic and diluted net loss per common share	$	(0.28	)	$	(0.17	)

Cash and costs incurred	$	40,570
2,926,830 shares of the Company’s common stock		1,966,250
Total purchase price	$	2,006,820

	September 30, 2017		September 30, 2016
Common stock issuable upon conversion of convertible debentures		3,538,894		2,744,432
Options to purchase common stock		14,574,977		5,569,883
Warrants to purchase common stock		11,864,347		14,079,715
Totals		29,978,218		22,394,030

	September 30, 2016			December 31, 2016
Computers	$	125,089		$	72,124
Office equipment		44,253			36,850
Subtotal		169,342			108,974
Less accumulated depreciation		(52,497	)		(31,652	)
Property and equipment, net	$	116,845		$	77,322

Balance, January 1, 2017	$	1,301,138
Transfers in due to issuance of liability warrants in connection with sale of common stock		1,003,870
Transfers in due to issuance of convertible notes and warrants with embedded conversion and reset options		798,431
Transfers out due to warrant exercise		(610,967	)
Mark to market to September 30, 2017		(986,058	)
Balance, September 30, 2017	$	1,506,414
Gain on change in warrant liabilities for the nine months ended September 30, 2017	$	986,058

Warrants Outstanding							Warrants Exercisable
					Weighted
					Average		Exercisable
Exercise			Number of		Remaining Life		Number of
Price			Warrants		In Years		Warrants
	$	0.50		3,056,670		4.42		3,056,670
		0.60		50,000		2.52		50,000
		0.65		2,364,000		4.81		2,364,000
		0.83		100,000		3.30		100,000
		0.90		5,070,002		1.97		5,070,002
		1.00		670,000		0.22		670,000
		1.06		146,200		1.23		146,200
		3.00		407,475		1.11		407,475
				11,864,347		3.04		11,864,347

						Weighted-Average
				Weighted-Average		Remaining		Aggregate
	Shares			Exercise Price		Contractual Term		Intrinsic Value
Outstanding at December 31, 2016		15,448,056		$	0.81		2.4		4,225,936
Grants		4,484,000			0.58				—
Exercised		(7,248,668	)		0.68
Expired		(819,041	)		0.48
Outstanding at September 30, 2017		11,864,347		$	0.83		3.0	$	—

Vested and expected to vest at September 30, 2017		11,864,347		$	0.83		3.0	$	—
Exercisable at September 30, 2017		11,864,347		$	0.83		3.0	$	—

Exercise		Number of		Vesting
Price		Options		Terms
$	0.50		80,000	Immediately
	0.50		100,000	Quarterly over one year
	0.50		605,000	Quarterly over two years
	0.81		5,000	Immediately
	0.82		150,000	Quarterly over two years
	0.85		150,000	Quarterly over one year
	0.87		125,000	Immediately
	0.89		425,000	Monthly over one year
	0.89		90,000	Quarterly over two years
	0.95		400,000	Quarterly over two years
	0.98		24,000	Monthly over two years
	1.05		50,000	Immediately
	1.05		95,000	Monthly over two years
	1.05		60,000	Monthly over one year
	1.06		60,000	Monthly over one year
	1.07		110,000	Monthly over one year
	1.07		325,000	Monthly over two years
	0.83		2,854,000

	Three Months Ended September 30,
	2017			2016			$ Change			% Change
Revenues:	$	11,516		$	209,003		$	(197,487	)		(95	)%
Total operating expense		7,533,530			2,094,211			5,439,319			260	%
Loss from operations		(7,522,014	)		(1,885,208	)		(5,636,806	)		299	%
Total other income (expense):		444,948			(1,567,456	)		2,012,404			128	%
NET LOSS	$	(7,077,066	)	$	(3,452,664	)	$	(3,624,402	)		105	%

No.	Description of Exhibit	Note
2.1	Agreement and Plan of Merger between MassRoots, Inc. and Whaxy Inc. and DDDigtal Inc. and Zachary Marburger and the Stockholders of DDDigtal Inc., dated December 15, 2016.	(3)
2.2	Agreement and Plan of Merger between MassRoots, Inc. and MassRoots Compliance Technology, Inc. and Odava, Inc. and Scott Kveton and the Stockholders of Odava, Inc., dated July 5, 2017.	(5)
3.1	Amended and Restated Certificate of Incorporation of the Company.	(2)
3.2	Amendment to Amended and Restated Certificate of Incorporation of the Company.	(2)
3.3	The Company’s Bylaws.	(2)
10.1	Form of Lock-Up Agreement between MassRoots, Inc. and each stockholder of DDDigtal Inc.	(4)
10.2	Form of Joinder Agreement to Agreement and Plan of Merger made by each stockholder of Odava, Inc. and agreed to and acknowledged by MassRoots, Inc. and MassRoots Compliance Technology, Inc.	(5)
10.3	Form of Subscription Agreement for the Purchase of Securities used in the July 2017 Equity Offering.	(6)
10.4	Form of Warrant used in the July 2017 Offering.	(6)
10.5	Form of Secured Convertible Original Issue Discount Notes used in the August 2017 Debt Offering	(7)
10.6	Form of Warrant used in the August 2017 Debt Offering	(7)
10.7	Form of Securities Purchase Agreement used in the August 2017 Debt Offering.	(7)
10.8	Form of Securities Agreement used in the August 2017 Debt Offering.	(7)
10.9	Separation Agreement, between the Mr. Isaac Dietrich and MassRoots, Inc., dated October 17, 2017.	(8)
10.10	Form of Simple Agreement for Future Tokens between the Company and investors in the SAFT Offering.	(1)
31.1	Certification of Principal Executive Officer as required by Rule 13a-14 or 15d-14 of the Exchange Act, as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	(1)
31.2	Certification of Principal Accounting Officer as required by Rule 13a-14 or 15d-14 of the Exchange Act, as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	(1)
32.1	Certification of Principal Executive Officer Pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	(1)
32.2	Certification of Principal Accounting Officer Pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	(1)
101	The following materials from the Company’s Quarterly Report on Form 10-Q for the three-months ended September 30, 2017 are formatted in XBRL (eXtensible Business Reporting Language): (i) the Balance Sheets, (ii) the Statements of Operations, (iii) the Statements of Stockholders’ Equity (Deficit), (iv) the Statements of Cash Flows, and (iv) the Notes to the Financial Statements.	(1)