Summary of Significant Accounting Policies | Summary of Significant Accounting Policies For a detailed discussion about the Company’s significant accounting policies, see Note 2, “ Summary of Significant Accounting Policies ,” in the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (the “2021 Form 10-K”). During the three months ended March 31, 2022, there were no significant updates made to the Company’s significant accounting policies. Basis of Presentation The accompanying unaudited (i) condensed consolidated balance sheet as of December 31, 2021, which has been derived from audited financial statements, and (ii) the unaudited interim condensed financial statements have been prepared in accordance pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. Therefore, it is suggested that these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes in the 2021 Form 10-K, filed with the Securities and Exchange Commission ("SEC") on March 31, 2022. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, comprehensive loss, cash flows, and stockholders’ equity for the interim periods, but are not necessarily indicative of the results to be anticipated for the full year 2022 or any future period. In accordance with Accounting Standards Codification ("ASC") 205-40, Presentation of Financial Statements - Going Concern, the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about its ability to continue as a going concern within one year after the that the consolidated financial statements are issued. Since inception, the Company has incurred recurring losses and negative cash flows from operations since inception and has an accumulated deficit of $97.6 million as of March 31, 2022. Nuvve incurred operating losses of approximately $9.5 million for the quarter ended March 31, 2022, and $27.2 million and $4.7 million for the years ended December 31, 2021, and 2020, respectively. As of March 31, 2022, Nuvve had a cash balance, working capital, and stockholders’ equity of $23.7 million, $28.8 million and $23.5 million, respectively. The Company continues to expect to generate operating losses and negative cash flows and may need additional funding to support its planned operating activities through profitability. The transition to profitability is dependent upon the successful expanded commercialization of the Company's GIVe platform and the achievement of a level of revenues adequate to support its cost structure. The Company expects its cash and cash equivalents as of May 12, 2022 will be sufficient to fund current planned operations for at least the next twelve months from the date of issuance of these consolidated financial statements. Management's expectations with respect to its ability to fund current planned operations is based on estimates that are subject to risks and uncertainties. Actual results could be different from management's estimates and should actual results be less favorable than these estimates management would ultimately need to take corrective steps to improve future operating results and its financial condition. Restatement of Previously Issued Financial Statements Subsequent to the issuance of the company’s condensed consolidated financial statements as of March 2022 and 2021, errors were identified relating to the following: The associated income tax expense or benefit and related deferred tax assets or liabilities have been reflected, including the impact of valuation allowance. (1) Unvested warrants issued to Stonepeak and Evolve in May 2021, as described in Note 11, should be accounted for as a single unit of account as opposed to multiple units of account. As a result, these unvested warrants, which were previously recorded in equity, have been reclassified to liabilities on the consolidated balance sheet. As a single unit of account, the unvested warrants’ settlement value is impacted by the amount of capital expenditures associated with Levo’s customer contracts, which caused the unvested warrants to not be indexed to the Company's equity. The unvested warrant liability is adjusted to its estimated fair value at each reporting date. (2) As part of the fair value of warrants and stock option (“Instruments”) granted to Stonepeak and Evolve in May 2021, in conjunction with the formation of Levo, the Company inaccurately capitalized the costs incurred to deferred financing costs, and should have expensed such costs. The Company determined that there was not sufficient basis to record deferred financing costs associated with Stonepeak and Evolve’s plans to contribute capital to the Levo venture. As a result, the estimated fair value of the Instruments that were previously recorded as a capitalized asset are corrected to recognize an expense upon issuance of the Instruments during the second quarter of 2021. The expense is non-cash and does not impact the existing conditional capital commitment the Company has from Stonepeak and Evolve or the pursuit of customer deployments funded by this conditional capital commitment. The associated income tax expense or benefit and related deferred tax assets or liabilities have been reflected, including the impact of valuation allowance. The following tables summarize the effect of the aforementioned adjustments on the Company's Condensed Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021, and the Company's Condensed Consolidated Statement of Operations, and Condensed Consolidated Statement of Cash Flows for the three months ended March 31, 2022: Condensed Consolidated Balance Sheets March 31, 2022 March 31, 2022 Assets As Previously Reported Adjustment As Restated Deferred financing costs $ 43,562,847 $ (43,562,847) $ — Total Assets $ 86,520,460 $ (43,562,847) $ 42,957,613 Current Liabilities Warrants liability $ 458,476 $ 4,333,999 $ 4,792,475 Total Liabilities $ 12,062,586 $ 4,333,999 $ 16,396,585 Mezzanine equity Redeemable non-controlling interests, preferred shares, zero par value, 1,000,000 shares authorized, 3,138 shares issue and outstanding at March 31, 2022 and December 31, 2021; aggregate liquidation preference of $3,264,775 at March 31, 2022 $ 3,046,892 $ 16,472 $ 3,063,365 Stockholders’ (Deficit) Equity Additional paid-in capital $ 128,594,145 $ (4,801,897) $ 123,792,248 Accumulated deficit $ (56,385,798) $ (41,182,393) $ (97,568,191) Nuvve Stockholders’ Equity (Deficit) $ 72,310,000 $ (45,984,290) $ 26,325,710 Non-controlling interests $ (899,018) $ (1,929,029) $ (2,828,047) Total Stockholders’ Equity (Deficit) $ 71,410,982 $ (47,913,319) $ 23,497,663 Total Liabilities, Mezzanine equity and Stockholders’ Equity $ 86,520,460 $ (43,562,847) $ 42,957,613 Three Months Ended March 31, Three Months Ended March 31, 2022 2022 Condensed Consolidated Statement of Operations As Previously Reported Adjustment As Restated Change in fair value of warrants liability $ 433,000 $ 4,343,000 $ 4,776,000 Total other (expense) income, net $ 458,143 $ 4,343,000 $ 4,801,143 Loss before taxes $ (9,074,261) $ 4,343,000 $ (4,731,261) Net loss $ (9,074,261) $ 4,343,000 $ (4,731,261) Net loss attributable to Nuvve Holding Corp. $ (8,973,328) $ 4,343,000 $ (4,630,328) Net loss attributable to Nuvve common stockholders $ (9,198,809) $ 4,343,000 $ (4,855,809) Net loss per share attributable to Nuvve common stockholders, basic and diluted $ (0.49) $ 0.23 $ (0.26) Three Months Ended March 30, Three Months Ended March 30, 2022 2022 CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS As Previously Reported Adjustment As Restated Net loss $ (9,074,261) 4,343,000 $ (4,731,261) Comprehensive loss attributable to Nuvve common stockholders $ (8,761,531) 4,343,000 $ (4,418,531) CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY As Previously Reported Adjustment As Restated Net Loss $ (9,074,261) $ 4,343,000 $ (4,731,261) Balance March 31, 2022 $ 71,410,982 $ (47,913,319) $ 23,497,663 Three Months Ended March 31, Three Months Ended March 31, 2022 2022 Condensed Consolidated Statement of Cash Flows As Previously Reported Adjustment As Restated Operating activities Net loss $ (9,074,261.00) $ 4,343,000.00 $ (4,731,261.00) Adjustments to reconcile to net loss to net cash used in operating activities Change in fair value of warrants liability $ (433,000.00) $ (4,343,000.00) $ (4,776,000.00) Net cash used in operating activities $ (8,449,889.00) $ — $ (8,449,889.00) Principles of Consolidation The condensed consolidated financial statements include the accounts and operations of the Company, its wholly owned subsidiaries and its consolidated variable interest entity. All intercompany accounts and transactions have been eliminated upon consolidation. Variable Interest Entities Pursuant to the consolidation guidance, the Company first evaluates whether it holds a variable interest in an entity in which it has a financial relationship and, if so, whether or not that entity is a variable interest entity ("VIE"). A VIE is an entity with insufficient equity at risk for the entity to finance its activities without additional subordinated financial support or in which equity investors lack the characteristics of a controlling financial interest. If an entity is determined to be a VIE, the Company evaluates whether the Company is the primary beneficiary. The primary beneficiary analysis is a qualitative analysis based on power and economics. The Company concludes that it is the primary beneficiary and consolidates the VIE if the Company has both (i) the power to direct the activities of the VIE that most significantly influence the VIE's economic performance, and (ii) the obligation to absorb losses of, or the right to receive benefits from, the VIE that could potentially be significant to the VIE. The Company formed Levo with Stonepeak and Evolve, in which the Company owns 51% of Levo's common units. The Company has determined that Levo is a VIE in which the Company is the primary beneficiary. Accordingly, the Company consolidates Levo and records a non-controlling interest for the share of the entity owned by Stonepeak and Evolve. Assets and Liabilities of Consolidated VIEs The Company's condensed consolidated financial statements include the assets, liabilities and results of operations of VIEs for which the Company is the primary beneficiary. The other equity holders’ interests are reflected in "Net loss attributable to non-controlling interests" in the condensed consolidated statements of operations and "Non-controlling interests" in the condensed consolidated balance sheets. See Note 18 for details of non-controlling interests. The Company began consolidating the assets, liabilities and results of operations of Levo during the quarter ended March 31, 2022. The creditors of the consolidated VIE do not have recourse to the Company other than to the assets of the consolidated VIEs. The following table summarizes the carrying amounts of Levo assets and liabilities included in the Company’s condensed consolidated balance sheets at March 31, 2022: March 31, 2022 Assets Cash $ 28,257 Total Assets $ 28,257 Liabilities and Mezzanine Equity Accrued expenses $ 236,775 Derivative liability - non-controlling redeemable preferred shares 458,476 Total Liabilities $ 695,251 Redeemable Non-Controlling Interest - Mezzanine Equity Redeemable non-controlling interest represents the shares of the preferred stock issued by Levo to Stonepeak and Evolve (the "preferred shareholders") who own 49% of Levo common units. The preferred stock is not mandatorily redeemable or currently redeemable, but it could be redeemable with the passage of time at the election of Levo, the preferred shareholders or a trigger event as defined in the preferred stock agreement. As a result of the contingent put right available to the preferred shareholders, the redeemable non-controlling interests in Levo are classified outside of permanent equity in the Company’s unaudited condensed consolidated balance sheets as mezzanine equity. The initial carrying value of the redeemable non-controlling interest is reported at the initial proceeds received on issuance date, reduced by the fair value of embedded derivatives resulting in an adjusted initial carrying value. The adjusted initial carrying value is further adjusted for the accretion of the difference with the redemption price value using the effective interest method. The accretion amount is a deemed dividend recorded against retained earnings or, in its absence, to additional-paid-in-capital. The carrying amount of the redeemable non-controlling interest is measured at the higher of the carrying amount adjusted each reporting period for income (or loss) attributable to the non-controlling interest, or the carrying amount adjusted each reporting period by the accretion amount. See Note 18 for details. Non-controlling interests The Company presents non-controlling interests as a component of equity on its condensed consolidated balance sheets and reports the portion of its earnings or loss for non-controlling interest as net earnings or loss attributable to non-controlling interests in the condensed consolidated statements of operations. Emerging Growth Company Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) permits emerging growth companies (“EGC”) to delay complying with new or revised financial accounting standards that do not yet apply to private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act). The Company qualifies as an EGC. The JOBS Act provides that an EGC can elect to opt-out of the extended transition period and comply with the requirements that apply to non-EGCs, but any such election to opt-out is irrevocable. The Company has elected not to opt-out of such an extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an EGC, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This different adoption timing may make a comparison of the Company’s financial statements with another public company which is neither an EGC nor an EGC that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. COVID-19 The novel coronavirus (COVID-19) which was declared a pandemic in March 2020, and the related restrictive measures such as travel restrictions, quarantines, and shutdowns, has negatively impacted the global economy. As national and local governments in different countries ease COVID-19 restrictions, and vaccines are distributed and rolled out successfully, we continue to see improved economic trends. However, COVID-19 and actions taken to mitigate its spread have had and are expected to continue to have an adverse impact on the economies and financial markets of many countries, including the geographical area in which the Company operates. The Company continues to monitor the situation closely but, at this time, is unable to predict the cumulative impact, both in terms of severity and duration, that the coronavirus pandemic has and will have on its business, operating results, cash flows and financial condition, and it could be material if the current circumstances continue to exist for a prolonged period of time. In addition to any direct impact on Nuvve’s business, it is reasonably possible that the estimates made by management in preparing Nuvve’s financial statements have been, or will be, materially and adversely impacted in the near term as a result of the on-going COVID-19 conditions. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that may affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions made by management include the impairment of intangible assets, the net realizable value of inventory, the fair value of share-based payments, the fair value of notes payable conversion options, revenue recognition, the fair value of warrants, and the recognition and disclosure of contingent liabilities. Management evaluates its estimates on an ongoing basis. Actual results could materially vary from those estimates. Cash and Restricted Cash The Company maintains cash balances that can, at times, exceed amounts insured by the Federal Deposit Insurance Corporation, which is up to $250,000. The Company has not experienced any losses in these accounts and believes it is not exposed to any significant credit risk in this area. Concentrations of Credit Risk At March 31, 2022 and December 31, 2021, the financial instruments which potentially expose the Company to concentration of credit risk consist of cash in financial institutions (in excess of federally insured limits) and trade receivables. The Company had certain customers whose revenue individually represented 10% or more of the Company’s total revenue, or whose accounts receivable balances individually represented 10% or more of the Company’s total accounts receivable, as follows: For the three months ended March 31, 2022 and 2021, one customer accounted for 72.8%, and two customers in aggregate accounted for 49.9% of revenue, respectively. During the three months ended March 31, 2022 and 2021 , the Company's top five customers accounted for approximately 87.5% and 71.4%, respectively, o f the Company’s total revenue. At March 31, 2022 , two customers in aggregate accounted for 35.7% of accounts receivable. At December 31, 2021 , two customers in aggregate accounted for 32.2% of accounts receivable. Approximately 58.7% and 56.0% of the Company’s trade accounts receivable balance was with five customers at March 31, 2022 and December 31, 2021 , respectively. The Company estimates its maximum credit risk for accounts receivable at the amount recorded on the balance sheet. The trade accounts receivables are generally short-term and all probable bad debt losses have been appropriately considered in establishing the allowance for doubtful accounts. Recently adopted accounting pronouncements None. Recently issued accounting pronouncements not yet adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) – Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 requires, among other things, the use of a new current expected credit loss ("CECL") model in determining the allowances for doubtful accounts with respect to accounts receivable, accrued straight-line rents receivable, and notes receivable. The CECL model requires that an entity estimate its lifetime expected credit loss with respect to these receivables and record allowances that, when deducted from the balance of the receivables, represent the net amounts expected to be collected. Entities will also be required to disclose information about how the entity developed the allowances, including changes in the factors that influenced its estimate of expected credit losses and the reasons for those changes. This update is effective for fiscal years beginning after December 15, 2022, with early adoption permitted. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements. |