Nuvve Holding Corp.: Form 10-Q for the period ended Sep 30, 2024

This Quarterly Report on Form 10-Q (this “Quarterly Report”) includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. Forward-looking statements are not guarantees of future performance and our actual results may differ significantly from the results discussed in the forward-looking statements. Forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other filings with the Securities and Exchange Commission (“SEC”).

References in this Quarterly Report to “we,” “us” and “our” and to “Nuvve” and the “Company” are to Nuvve Holding Corp. and its subsidiaries.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly Report.

Overview

We are a green energy technology company that provides, directly and through business ventures with our partners, a globally-available, commercial V2G technology platform that enables EV batteries to store and resell unused energy back to the local electric grid and provide other grid services. Our proprietary V2G technology — Grid Integrated Vehicle ("GIVe") platform — has the potential to refuel the next generation of EV fleets through cutting-edge, bi-directional charging solutions.

Our proprietary V2G technology enables us to link multiple EV batteries into a virtual power plant to provide bi-directional services to the electrical grid. Our GIVe software platform was created to harness capacity from “loads” at the edge of the distribution grid (i.e., aggregation of EVs and small stationary batteries) in a qualified, controlled and secure manner to provide many of the grid services offered by conventional generation sources (i.e., coal and natural gas plants). Our current addressable energy and capacity markets include grid services such as frequency regulation, demand charge management, demand response, energy optimization, distribution grid services and energy arbitrage.

Our customers and partners include owner/operators of light duty fleets, heavy duty fleets (including school buses), automotive manufacturers, charge point operators, and strategic partners (via joint ventures, other business ventures and special purpose financial vehicles). We also operate a small number of company-owned charging stations serving as demonstration projects funded by government grants. We expect growth in company-owned charging stations and the related government grant funding to continue, but for such projects to constitute a declining percentage of our future business as our commercial operations expand.

We offer our customers networked charging stations, infrastructure, software, professional services, support, monitoring and parts and labor warranties required to run electric vehicle fleets, as well as low and in some cases free energy costs. We expect to generate revenue primarily from the provision of services to the grid via our GIVe software platform and sales of V2G-enabled charging stations. In the case of light duty fleet and heavy duty fleet customers, we also may receive a mobility fee, which is a recurring fixed payment made by fleet customers per fleet vehicle. In addition, we may generate non-recurring engineering services revenue derived from the integration of our technology with automotive OEMs and charge point operators. In the case of recurring grid services revenue generated via automotive OEM and charge point operator customer integrations, we may also share the recurring grid services revenue with the customer.

Levo

On August 4, 2021, we formed Levo Mobility LLC ("Levo"), a Delaware limited liability company, with Stonepeak Rocket Holdings LP ("Stonepeak"), a Delaware limited partnership and Evolve Transition Infrastructure LP ("Evolve"), a Delaware limited partnership. Levo is our consolidated subsidiary.

Levo is a sustainable infrastructure company focused on rapidly advancing the electrification of transportation by funding V2G-enabled EV fleet deployments. Levo utilizes our V2G technology and committed capital from Stonepeak and Evolve to offer Fleet-as-a-Service for school buses, last-mile delivery, ride hailing and ride sharing, municipal services, and more to eliminate the primary barriers to EV fleet adoption including large upfront capital investments and lack of expertise in securing and managing EVs and associated charging infrastructure.

Levo's turnkey solution simplifies and streamlines electrification, can lower the total cost of EV operation for fleet owners, and support the grid when the EVs are not in use. For a fixed monthly payment with no upfront cost, Levo will provide the EVs, such as electric school buses, charging infrastructure powered by our V2G platform, EV and charging station maintenance, energy management, and technical advice.

Levo focuses on electrifying school buses, providing associated charging infrastructure, and delivering V2G services to enable safer and healthier transportation for children while supporting carbon dioxide emission reduction, renewable energy integration, and improved grid resiliency.

Stonepeak and Evolve conditional capital contribution commitments expired on August 4, 2024. On October 15, 2024 (the “Closing Date” or “Closing”), we, Stonepeak, and Evolve entered into a Limited Liability Company Interest Sale Agreement (the “Sale Agreement”), pursuant to which Stonepeak and Evolve sold their combined 49% membership interest in Levo to us for a de minimis price.

As a result of the Closing, we became the 100% owner of Levo. The Sale Agreement contains customary representations, warranties, and covenants.

Deep Impact

On August 16, 2024, we formed Deep Impact 1 LLC, a Delaware limited liability company (“Deep Impact”), with Nuvve CPO Inc., our wholly owned subsidiary (“Nuvve CPO”), and WISE EV-LLC (“WISE”). We hold a 51% equity interest by way of Nuvve CPO, and WISE holds a 49% equity interest. Deep Impact is an entity formed for the principal purpose of operation, installation, maintenance of electric vehicle chargers and other related activities and services created as a business venture between us, Nuvve CPO and WISE. Nuvve CPO Inc., or Nuvve Charge Point Operator, was established in August 2024 to support the deployment and ongoing support of our customers charging station networks.

In connection with Deep Impact, Nuvve CPO, WISE and Deep Impact entered into a Contribution and Unit Purchase Agreement (the “Contribution Agreement”), pursuant to which Nuvve CPO and WISE agreed to contribute $51 and $49, respectively, to Deep Impact, and to provide certain services pursuant to separate services agreements with Deep Impact. For such contributions and the services, Nuvve CPO received 51 membership units in Deep Impact, equal to a 51% equity interest, and WISE received 49 membership units in Deep Impact, equal to a 49% equity interest.

We have determined that Deep Impact is a VIE in which the Company is the primary beneficiary. Accordingly, we consolidate Deep Impact and record a non-controlling interest for the share of the entity owned by WISE.

Backlog

Our total backlog represents the estimated future transaction price values for unsatisfied and partially satisfied estimated product and service deliveries to our customers. Backlog is generally determine based upon customer issued purchased orders or contracts with customers. Backlog does not include agreements we have with customers to earn future grid service revenues. Backlog is converted into revenue in future periods as we satisfy the performance obligations to our customers for our products and services, primarily based on the cost incurred or at delivery and acceptance of products, depending on the applicable accounting method.

Our estimated backlog on September 30, 2024, was $17.5 million, which we expect to be earned in future periods. We anticipate recognizing revenue from this backlog from 2024 through 2026.

Results of Operations

Three and Nine Months Ended September 30, 2024 Compared with Three and Nine Months Ended September 30, 2023

The following table sets forth information regarding our consolidated results of operations for the three and nine months ended September 30, 2024 and 2023.

NM - Not Meaningful

Revenue

Total revenue was $1.92 million for the three months ended September 30, 2024, compared to $2.71 million for the three months ended September 30, 2023, a decrease of $0.79 million, or 29.3%. The decrease was primarily attributable to a $1.23 million decrease in products revenue due to lower customers sales orders and shipments, partially offset by $0.4 million, increase in services revenue, and an increase in grants of $0.04 million. Products and services revenue for the three months ended September 30, 2024, consisted of DC and AC Chargers of $0.54 million, grid services revenue of $0.15 million, and engineering services of $1.11 million driven by management fees earned for a certain V2G project management.

Total revenue was $3.5 million for the nine months ended September 30, 2024, compared to $6.7 million for the nine months ended September 30, 2023, a decrease of $3.2 million, or 47.7%. The decrease was primarily attributable to a $3.4 million decrease in products revenue due to lower customers sales orders and shipments, partially offset by $0.1 million increase in services revenue and an increase in grants of $0.1 million. Products and services revenue for the nine months ended September 30, 2024, consisted of sales of DC and AC Chargers of $1.4 million, grid services revenue of $0.3 million, and engineering services of $1.5 million driven by management fees earned for a certain V2G project management.

Cost of Product and Service Revenue

Cost of products and services revenue for the three months ended September 30, 2024, decreased by $1.5 million to $0.9 million, or 61.8% compared to $2.4 million for the three months ended September 30, 2023 due to lower customers sales orders and shipments. Products and services margin increased by 40.2% to 49.3% for the three months ended September 30, 2024, compared to 9.0% in the same prior year period. Margin benefited from a lower mix of hardware charging stations’ sales and a higher mix of engineering services in the current quarter compared with the third quarter of 2023.

Cost of products and services revenue for the nine months ended September 30, 2024, decreased by $3.8 million to $2.0 million, compared to $5.8 million for the nine months ended September 30, 2023 due to lower customers sales orders and shipments. Products and services margin increased by 26.0% to 36.1% for the nine months ended September 30, 2024, compared to 10.1% in the same prior year period. Margin was mostly impacted by a lower mix of hardware charging stations sales, and a higher mix of engineering services in the nine months ended September 30, 2024.

Selling, General and Administrative Expenses

Selling, general and administrative expenses consist of selling, marketing, advertising, payroll, administrative, legal finance, and professional expenses.

Selling, general and administrative expenses were $2.1 million for the three months ended September 30, 2024, as compared to $6.5 million for the three months ended September 30, 2023, a decrease of $4.4 million, or 67.2%.

The decrease during the three months ended September 30, 2024 was primarily attributable to decreases in compensation expenses of $3.9 million, including share-based compensation, decreases in legal fees expenses of $0.6 million, and decreases in bad debt expenses of $0.1 million, partially offset by increases in software subscriptions expenses of $0.2 million.

Selling, general and administrative expenses were $12.5 million for the nine months ended September 30, 2024, as compared to $18.8 million for the nine months ended September 30, 2023, a decrease of $6.2 million, or 33.1%.

The decrease during the nine months ended September 30, 2024 was primarily attributable to decreases in compensation expenses of $4.2 million, including share-based compensation, decreases in travel and marketing/promotions related expenses of $0.8 million, decreases in legal fees expenses of $0.5 million, decreases in public company related costs of $0.5 million, and decreases in bad debt expenses of $0.2 million.

Research and Development Expenses

Research and development expenses decreased by $1.6 million, or 69.0%, from $2.3 million for the three months ended September 30, 2023 to $0.7 million for the three months ended September 30, 2024. Research and development expenses decreased by $3.0 million, or 44.3%, from $6.8 million for the nine months ended September 30, 2023 to $3.8 million for the nine months ended September 30, 2024. The decrease during the three and nine months ended September 30, 2024 was primarily attributable to decreases in compensation expenses and subcontractor expenses used to advance our platform functionality and integration with more vehicles.

Other Income, net

Other income, net consists primarily of interest expense, change in fair value of warrants liability and derivative liability, and other income (expense). Other income, net increased by $0.06 million from $0.13 million of other income for the three months ended September 30, 2023, to $0.19 million in other income for the three months ended September 30, 2024. The increase during the three months ended September 30, 2024 was primarily attributable to the change in fair value of the warrants liability, sublease income related to the subleasing of part of our main office space (See Note 17) and interest expense on debt obligations.

Other income, net consists primarily of interest expense, change in fair value of warrants liability and derivative liability, and other income (expense). Other income, net increased by $1.84 million from $0.68 million of other income for the nine months ended September 30, 2023, to $2.52 million in other income for the nine months ended September 30, 2024. The increase during the nine months ended September 30, 2024 was primarily attributable to the change in fair value of the warrants liability, sublease income related to the subleasing of part of our main office space (See Note 17) and interest expense on debt obligations.

Income Taxes

In each of the three and nine months ended September 30, 2024 and 2023, we recorded no material income tax expenses. The income tax expenses during each of the three and nine months ended September 30, 2024 and 2023 were minimal primarily due to operating losses that receive no tax benefits as a result of a valuation allowance recorded for such losses.

Net Loss

Net loss decreased by $6.7 million, or 80.2%, from $8.3 million for the three months ended September 30, 2023, to $1.6 million for the three months ended September 30, 2024. The decrease in net loss was primarily due to an increase in other income of $0.1 million, and a decrease in operating expenses of $7.4 million, which includes a decrease in cost of product and services of $1.5 million, and a decrease in revenue of $0.8 million, for the above aforementioned reasons.

Net loss decreased by $11.6 million, or 48.6%, from $24.0 million for the nine months ended September 30, 2023, to $12.3 million for the nine months ended September 30, 2024. The decrease in net loss was primarily due to an increase in other income of $1.8 million, and a decrease in operating expenses of $13.0 million, which includes a decrease in cost of product and services of $3.8 million, and a decrease in revenue of $3.2 million, for the above aforementioned reasons.

Net Income (Loss) Attributable to Non-Controlling Interest

Net loss attributable to non-controlling interest was zero for the three months ended September 30, 2024 compared to net income attributable to non-controlling interest of $0.01 million for the three months ended September 30, 2023. Net loss attributable to non-controlling interest was $0.00 million for the nine months ended September 30, 2024 compared to net income attributable to non-controlling interest of $0.02 million for the nine months ended September 30, 2023.

Net income (loss) was allocated to non-controlling interests in proportion to the relative ownership interests of the holders of non-controlling interests in Levo, an entity formed by us with Stonepeak and Evolve. We owned 51% of Levo's common units and Stonepeak and Evolve owned 49% of Levo's common units. We had determined that Levo was a variable interest entity (“VIE”) in which we were the primary beneficiary. Accordingly, we had consolidated Levo and recorded a non-controlling interest for the share of Levo owned by Stonepeak and Evolve during the three and nine months ended September 30, 2024.

Stonepeak and Evolve conditional capital contribution commitments expired on August 4, 2024. On October 15, 2024, we, Stonepeak, and Evolve entered into Sale Agreement, pursuant to which Stonepeak and Evolve sold their combined 49% membership interest in Levo to us for a de minimis price. As a result of the Closing, we became the 100% owner of Levo.

Liquidity and Capital Resources

Sources of Liquidity

We are still an early-stage business enterprise. We have not yet demonstrated a sustained ability to generate sufficient revenue from sales of our technology and services or conduct sales and marketing activities necessary for the successful commercialization of our GIVe platform. We have not yet achieved profitability and have experienced substantial net losses, and we expect to continue to incur substantial losses for the foreseeable future. We have incurred operating losses of approximately $14.8 million as of the nine months ended September 30, 2024, and $32.1 million and $36.9 million for the years ended December 31, 2023, and 2022, respectively. Our cash used in operations were $12.2 million as of the nine months ended September 30, 2024, and $21.3 million and $34.1 million for the years ended December 31, 2023, and 2022, respectively. As of September 30, 2024, we had a cash balance, working capital, and total equity of $0.3 million, $1.3 million and $3.0 million, respectively.

We have incurred net losses and negative cash flows from operations since our inception. We have funded our business operations primarily with the issuance of equity, debt obligations and cash from operations. We plan to fund current operations through debt obligations, increased revenues and raising additional capital. Please see below for details. However, there can be no assurance we will be successful in raising necessary funds in the future, on acceptable terms or at all.

February 2024 Public Offering

On January 31, 2024, we entered into an underwriting agreement (the “Underwriting Agreement”) with Craig-Hallum Capital Group LLC (“Craig-Hallum”) regarding an underwritten public offering of its securities (the “Offering”). The Offering was conducted pursuant to our Registration Statement on Form S-1 filed with the SEC, which was declared effective as of January 31, 2024. On February 2, 2024, we completed the Offering and received gross proceeds of approximately $9.6 million prior to deducting underwriting discounts and commissions and offering expenses. Craig-Hallum received underwriting discounts and commissions equal to 7.0% of the gross proceeds of the Offering, and is further entitled to receive 7.0% of the gross proceeds received by us in connection with the exercise of any of the outstanding Series B Warrants issued in the Offering.

As noted above, on January 31, 2024, we entered into an Underwriting Agreement regarding the Offering which was comprised of the followings:

1. 303,500 shares of common stock;

2. 176,500 pre-funded warrants (“Pre-Funded Warrants”) to purchase shares of common stock;

3. 480,000 Series A Warrants (“Series A Warrants”) to purchase shares of common stock, with an initial exercise price of $20.00 per share and a term of five years following the issuance date;

4. 480,000 Series B Warrants (“Series B Warrants”) to purchase shares of common stock with an exercise price of $20.00 per share and a term of nine months following the issuance date; and

5. 480,000 Series C Warrants (“Series C Warrants”) to purchase shares of common stock with an exercise price of $20.00 per share and a term of five years following the issuance date, subject to early expiration as described below.

Each share of common stock and Pre-Funded Warrant issued in the offering was accompanied by a Series A Warrant to purchase one share of common stock, a Series B Warrant to purchase one share of common stock and a Series C Warrant to purchase one share of common stock. The combined price per share of Common Stock and the accompanying Series A Warrant, Series B Warrant and Series C Warrant was $20.00. The combined price per share of each Pre-Funded Warrant and accompanying Series A Warrant, Series B Warrant, and Series C Warrant was equal to $19.9990, and the exercise price of each Pre-Funded warrant is $0.0010 per share. The Series C Warrants may only be exercised to the extent and in proportion to a holder of the Series C Warrants exercising its Series B Warrants, and are subject to an early expiration of nine months, in proportion and only to the extent any Series C Warrants expire unexercised. In addition, Craig-Hallum was granted warrants to purchase up to 48,000 shares of common stock (the “Underwriter Warrants”) at an exercise price of $20.00 per share. The Underwriter Warrants have a term of five years and are immediately exercisable, provided that 24,000 of the shares of common stock underlying the Underwriter Warrants shall only be exercisable pro rata upon the exercise of the Series B Warrants issued in the Offering.

Shelf Registration

On April 25, 2022, we filed a shelf registration statement with the SEC which allows us, subject to limitations under the baby shelf rules discussed below, to issue unspecified amounts of common stock, preferred stock, warrants for the purchase of shares of common stock or preferred stock, debt securities, and units consisting of any combination of any of the foregoing securities, in one or more series, from time to time and in one or more offerings up to a total dollar amount of $100.0 million. The shelf registration statement was declared effective on May 5, 2022. Our ability to utilize the full capacity of our shelf registration, or any future shelf registration on Form S-3, is limited by our compliance with the baby shelf rules. Pursuant to the “baby shelf rules” promulgated by the SEC, if our public float is less than $75.0 million as of specified measurement periods, the number of securities that may be offered and sold by us under a Form S-3 registration statement, including pursuant to our shelf registration statement, in any twelve-month period is limited to an aggregate amount that does not exceed one-third of our public float. As a result, we will be limited by the baby shelf rules until such time our public float exceeds $75 million, which means we only have the capacity to sell shares up to one-third of our public float under shelf registration statements in any twelve-month period.

Fresno Economic Opportunities Commission ("Fresno EOC")

On May 14, 2024 (the “Effective Date”), the Company and Fresno EOC entered into a master services agreement to outline the general scope of work, timeline, and pricing pursuant to which the Company will provide services and materials to Fresno EOC in connection with a turnkey fleet electrification program for its 50-shuttle fleet (the “Agreement”).

Pursuant to the Agreement, between the Effective Date and June 30, 2036 (the “Term”), the Company will be responsible for the design and construction of a 26,000 square foot parking lot and implementing a comprehensive electrification system for Fresno EOC’s transit fleet, including the installation of electric vehicle chargers, solar power generation hardware and integrating a battery storage system. The Company also agreed to provide certain grant writing and project management services to Fresno EOC.

The total estimated fees and expenses payable to the Company by Fresno EOC for services and materials provided in relation to the Project during the Term is approximately $15.7 million. Each party’s obligations under the Agreement are contingent to the receipt of certain grant funding by Fresno EOC, provided that if Fresno EOC terminates the Agreement due to the failure to receive such grant funding, Fresno EOC has agreed to pay the Company for services provided on or prior to such termination subject to certain limitations. Additionally, each party may terminate the Agreement upon certain material breaches of the Agreement by the other party and failure to cure.

Term Loan

On August 9, 2024, we entered into a Subordinated Business Loan and Security Agreement ("Term Loan") with Agile Lending, LLC, as lender, and Agile Capital Funding, LLC, as collateral agent. The Term Loan is a short-term, thirty-week, fixed interest rate obligation. Principal and interest on the Term Loan are payable in arrears weekly. The Term Loan is secured by certain of our assets, and it is evidenced by a subordinated secured promissory note.

The Term Loan contains customary affirmative and negative covenants. Among other things, these covenants restrict our ability to incur certain types or amounts of indebtedness, incur liens on certain assets, dispose of material assets, enter into certain restrictive agreements, or engage in certain transactions with affiliates. Additionally, the Term Loan contains customary default provisions including, but not limited to, failure to pay interest or principal when due.

The following is a summary description of the key terms of the Term Loan:

Principal and interest payments of $50,750 is due weekly on the Term Loan for thirty weeks effective August 9, 2024 to March 6, 2025, when the Term Loan is fully paid off. Total interest of $522,501 is expected to be paid over the thirty-week loan period.

Interest expense paid on the Term Loan for the three and nine months ended September 30, 2024 was $219,159. There was no interest expense on the Term Loan for the three and nine months ended September 30, 2023.

Below is the summary of debt obligations as of September 30, 2024 and December 31, 2023. Please see Note 11 for detail descriptions:

Senior Convertible Notes and Warrants

On October 31, 2024, we entered into a securities purchase agreement (the “Purchase Agreement”) with certain accredited institutional and individual investors (the “Investors”), pursuant to which we agreed to issue to the Investors (i) up to an aggregate of $3,750,000.01 principal amount (the “Principal Amount”) senior convertible promissory notes, carrying a 10.00% original issue discount (each, a “Note” and, collectively, the “Notes”), convertible into shares of our common stock, and (ii) accompanying warrants (the “Warrants) to purchase shares of common stock (the “Private Placement”). On October 31, 2024, we closed on the Private Placement and issued the Notes and the Warrants. Our Chief Executive Officer, Gregory Poilasne, participated as an Investor in the Private Placement, purchasing an aggregate of $250,000 in principal amount of Notes and accompanying Warrants.

Please see Note 11 for a summary description of the key items of the Notes and Warrants agreements.

The foregoing descriptions of the Notes and the Warrants are not complete and are qualified in their entirety by reference to the full text of such documents, which are filed as Exhibits 4.1, 4.2, 10.1 and 10.2, respectively, to this Quarterly Report on Form 10-Q.

Levo

On August 4, 2021, we formed Levo with Stonepeak and Evolve to rapidly accelerate the deployment of electric fleets, including zero-emission electric school buses for school districts in the United States through V2G hubs and Transportation as a service ("TaaS"). Levo utilized our proprietary V2G technology, and the conditional capital contribution commitments from Stonepeak and Evolve of $750 million, subject to project approval process as outlined under the terms of the definitive agreements, to fund acquisition of electric fleets, and construction of EV infrastructure. Stonepeak and Evolve had the option to increase their conditional capital contribution commitments to $1.0 billion when Levo had entered into contracts with third parties for $500 million in aggregate capital expenditures. See Note 11, in the Notes to Consolidated Financial Statements included in the Company’s 2023 Form 10-K for a detailed discussion of the Company’s Stonepeak and Evolve Warrants related Securities Purchase Agreement (as defined in the Company's 2023 Form 10-K).

Stonepeak and Evolve conditional capital contribution commitments expired on August 4, 2024. On October 15, 2024, we, Stonepeak, and Evolve entered into the Sale Agreement, pursuant to which Stonepeak and Evolve sold their combined 49% membership interest in Levo to us for a de minimis price. As a result, we became the 100% owner of Levo.

Cash Flows

Net cash used in operating activities during the nine months ended September 30, 2024 was $12.2 million as compared to net cash used of $6.2 million in the nine months ended September 30, 2023. The $6.0 million decrease in net cash used in operating activities was primarily attributable to lower use of cash for working capital during the nine months ended September 30, 2024 as compared to the same prior period. Working capital during the nine months ended September 30, 2024 was impacted by, among other items, lower net loss of $12.3 million, resulting from decrease in operating expenses and lower revenue. Additionally, improved timing and management of vendor terms compared to the cash settlement of such items contributed to lower use of cash for working capital.

During the nine months ended September 30, 2024, cash used for investing activities was $0.05 million as compared to net cash provided by investing activities of $1.1 million during the nine months ended September 30, 2023. Net cash provided by investing activities during the nine months ended September 30, 2023 were from the sale of our equity investment in Switch EV Ltd partnership alliance, partially offset by purchase of fixed assets.

Net cash provided for financing activities for the nine months ended September 30, 2024 was $11.1 million, of which $8.5 million was the proceeds from public offering of common stock, partially offset by issuance cost, $0.2 million was from the exercise of common stock warrants, partially offset by issuance cost, proceed from debt obligations of $2.6 million, and repayment debt obligations of $0.2 million. Net cash provided for financing activities for the nine months ended September 30, 2023 was $3.2 million, of which $2.3 million was the proceeds from direct offering, partially offset by issuance cost, and $0.9 million was provided in connection with the proceeds from the at-the-market common stock offering.

Off-Balance Sheet Arrangements

We are not a party to any off-balance sheet arrangements.

Critical Accounting Policies and Estimates

Management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these consolidated financial statements requires us to make estimates and assumptions for the reported amounts of assets, liabilities, revenue, expenses and related disclosures. Our estimates are based on its historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions and any such differences may be material.

For a summary of our significant accounting policies, see Note 2, Summary of Significant Accounting Policies, of the Notes to Consolidated Financial Statements included in Part I, Item 1 of our 2023 Form 10-K. For a summary of our critical accounting estimates, please see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates" in our 2023 Form 10-K.

Recent Accounting Pronouncements

See Note 2, Summary of Significant Accounting Policies, of the Notes to Consolidated Financial Statements included in Part I, Item 1 of our 2023 Form 10-K.

Emerging Growth Company Accounting Election

Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can choose not to take advantage of the extended transition period and comply with the requirements that apply to non-emerging growth companies, and any such election to not take advantage of the extended transition period is irrevocable. The Company is an “emerging growth company” as defined in Section 2(A) of the Securities Act of 1933, as amended, and has elected to take advantage of the benefits of this extended transition period.

The Company expects to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public business entities and non-public business entities until the earlier of the date the Company (a) is no longer an emerging growth company or (b) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. This may make it difficult or impossible to compare the Company’s financial results with the financial results of another public company that is either not an emerging growth company or is an emerging growth company that has chosen not to take advantage of the extended transition period exemptions because of the potential differences in accounting standards used. See Note 2 of the accompanying unaudited condensed consolidated financial statements of Nuvve included elsewhere in this Quarterly Report for the recent accounting pronouncements adopted and the recent accounting pronouncements not yet adopted for the nine months ended September 30, 2024.

In addition, the Company intends to rely on the other exemptions and reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an emerging growth company, the Company intends to rely on such exemptions, the Company is not required to, among other things: (a) provide an auditor’s attestation report on the Company’s system of internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act; (b) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act; (c) comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the consolidated financial statements (auditor discussion and analysis); or (d) disclose certain executive compensation-related items such as the correlation between executive compensation and performance and comparisons of the Chief Executive Officer’s compensation to median employee compensation.

The Company will remain an emerging growth company under the JOBS Act until the earliest of (a) December 31, 2025, which the last day of the Company’s first fiscal year following the fifth anniversary of Newborn’s IPO, (b) the last date of the Company’s fiscal year in which the Company has total annual gross revenue of at least $1.235 billion, (c) the date on which the Company is deemed to be a “large accelerated filer” under the rules of the SEC with at least $700.0 million of outstanding securities held by non-affiliates or (d) the date on which the Company has issued more than $1.0 billion in non-convertible debt securities during the previous three years.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, our principal executive officer and principal accounting and financial officer, respectively, have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2024.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted 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 in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Based on the evaluation of our disclosure controls and procedures, our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of September 30, 2024.

Changes in Internal Control over Financial Reporting

There has been no change in our internal control over financial reporting during the quarter ended September 30, 2024, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Below we are providing, in supplemental form, changes to our risk factors from those previously disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023. Our risk factors disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023 provide additional discussion regarding these supplemental risks and we encourage you to read and carefully consider all of the risk factors disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023, together with the below, for a more complete understanding of the risks and uncertainties material to our business.

We received notice from Nasdaq that our stockholders’ equity is below $2,500,000. Our failure to meet Nasdaq’s continued listing standards could result in the delisting of our common stock from the Nasdaq Capital Market, which could have a material adverse effect on our financial condition, negatively impact the price of our common stock and could make it more difficult for holders of our common stock to sell their shares. We are not in compliance with the Nasdaq Capital Market the minimum stockholders’ equity requirement and our failure to meet Nasdaq’s continued listing standards could result in the delisting of our common stock, negatively impact the price of our common stock and negatively impact our ability to raise additional capital.

On May 22, 2024, we received written notice from the Listing Qualifications Department of Nasdaq notifying us that we are not currently in compliance with the requirement of maintaining stockholders’ equity of at least $2,500,000 for continued inclusion on The Nasdaq Capital Market under Nasdaq Marketplace Rule 5550(b)(1) (the “Stockholders’ Equity Rule”). In each of the Company’s Quarterly Reports on Form 10-Q for the three months ended March 31, 2024 and June 30, 2024, the Company reported stockholders’ equity of less than $2,500,000. On July 5, 2024, we provided Nasdaq a plan regarding how we expect to regain compliance with the Stockholders’ Equity Rule. Following discussions with Nasdaq, we submitted additional information relating to our plan to regain compliance on August 23, 2024. Nasdaq subsequently granted us an extension to November 18, 2024 to evidence compliance with the rule. There may be no assurances that our plan of compliance will be successful or that we will be able to regain compliance with the Stockholders’ Equity Rule. If we fail to regain compliance with the Stockholders’ Equity Rule we may be subject to the delisting of our common stock from the Nasdaq Capital Market.

Additionally, if we fail to comply with any other continued listing standards of Nasdaq, our common stock will also be subject to delisting. If that were to occur, our common stock would be subject to rules that impose additional sales practice requirements on broker-dealers who sell our securities. The additional burdens imposed upon broker-dealers by these requirements could discourage broker-dealers from effecting transactions in our common stock. This would significantly and negatively affect the ability of investors to trade our securities and would significantly and negatively affect the value and liquidity of our common stock.