Business Context and Reporting Period
This Form 8-K is filed by MassRoots, Inc. (not Greenwave Technology Solutions, Inc.) for the reporting period of July 16, 2019. The company is incorporated in Delaware and identifies as an emerging growth company. The filing addresses a triggering event regarding a direct financial obligation.
Key Financial Metrics
The filing does not provide comprehensive revenue, profit, cash flow, or margin data. Specific debt metrics related to the default event are as follows:
- Original Note Principal: $2,225,000 (issued December 17, 2018).
- Outstanding Balance (as of July 16, 2019): $3,134,327.34.
- Interest Rate Adjustment: Increased from 8% to 22% per annum due to default.
- Subsequent Issuances (2019 Notes): Aggregate principal of $173,333 issued between January and March 2019.
- Subsequent Issuances (May Note): Principal of $103,000 issued on May 16, 2019.
Material Changes
The primary material change is the acceleration of financial obligations triggered by an Event of Default. The default occurred because the company issued multiple Variable Security Issuances (the 2019 Notes and the May Note) without the prior written consent of the investor holding the December 2018 Note. Consequently, the interest rate on the original note increased significantly, and the outstanding balance was recalculated to include amounts due upon default, rising from $2,225,000 to over $3.1 million.
Guidance, Outlook, and Risks
The filing contains no forward-looking guidance or management commentary regarding future operations. The primary risk disclosed is the immediate increase in debt service costs and the total liability owed to the investor. The company faces a heightened obligation to repay the note at the accelerated interest rate of 22%.
Investor Verification Checklist
- Verify the total outstanding debt obligation of $3,134,327.34 and the terms of repayment.
- Confirm the status of the 2019 Notes ($173,333) and the May Note ($103,000) and whether they are also in default.
- Assess the company's liquidity position to determine its ability to service the increased 22% interest rate.
- Review the Securities Purchase Agreement (SPA) dated December 17, 2018, to understand the full scope of the default provisions.