S3 2022 ESG Report

SECURITY. SUSTAINABILITY. STEWARDSHIP.

S3 Recycling Solutions

2022 Environmental, Social and Governance (ESG) & Data Security Report

SECURITY. SUSTAINABILITY. STEWARDSHIP.

SUSTAINABILITY

We are doing our part to protect the environment from harm with trustworthy and secure processes. Businesses across all industries depend on S3 to properly dispose of e-waste.

CORE VALUES

DEPENDABILITY

Our clients trust us to always handle their e-waste securely and efficiently. We maintain the highest professional, technical, and environmental standards in the e-waste industry.

INTEGRITY

E-recycling is an inherently private business, and integrity is vital to building authentic client relationships. We maintain transparency in our commitment to protect client data.

COMMUNITY

Serving the broader community is an immovable component of our business. We are eager to give back to local, national and international communities and expand our capacity to do so.

S3 Recycling Solutions’ 2022 Environmental, Social and Governance Report is presented to all stakeholders, and demonstrates the driving force behind our operational strategy and organizational behavior. Our credibility and commitment to address global e-waste matters continue to progress and be recognized on the national stage.

Vision:

Be the leading global provider of electronic asset reuse solutions, ensuring the highest level of safety and security in the world by creating a sustainable future.

Mission:

Provide hassle-free, eco-friendly, and globally accessible e-waste solutions to individuals and businesses, while prioritizing the protection of our environment and promoting sustainable practices.

A Message From S3’s CEO

Reflecting on 2022, I am humbled and grateful that our team came together and navigated unprecedented challenges to achieve another successful year. After losing our Chairman and majority owner during the summer, we were resolved to honor him the best way we knew how. To follow the model that he showed us: to treat people right, have fun, make money, and give back to the community, all while establishing ourselves as a leader in the electronics and information technology recycling industry.

For the second year in a row, S3 was named to the Inc. 5000 fastest-growing companies in the country. We grew our revenue by 382.3 percent and ranked number nine in our industry. In addition to this growth, our pickups increased 58 percent and the pounds of electronics and excess technology devices processed in our R2-certified facility increased by 58 percent.

In addition to improved metrics, we continued our tradition of serving our community. We believe that being a good corporate citizen is essential and it is a core value of our organization. In 2022, we donated more than 1,400 desktops and laptops to low-income and underserved individuals, distributed twelve pallets of bottled water to those suffering from no water supply in Jackson, Miss., provided Christmas gifts for more than 40 families, and donated over 150 turkeys and winter clothes to underserved families.

I’m extremely proud that the year 2022 marked 15 years in business for S3. This ESG report will highlight some of our corporate history, and it celebrates how far we’ve come over the years. As always, we thank all our partners, customers and friends who make it possible for us to be a leader in keeping the world safe and secure at the highest level through the reuse of electronic assets.

Rod McDaniel, CEO S3 Recycling Solutions

We’re Celebrating 15 Years!

Throughout the years, we’ve focused on creating a sustainable organization; one that not only safeguards the environment, but also withstands the test of time. We’re grateful to celebrate the milestone of operating for 15 years, attracting the best talent to our team and becoming an industry leader. From The Great Recession that began in 2007 to the global pandemic of 2020, S3 has successfully created hundreds of jobs, supported families throughout the country, and contributed time, finances and resources to the community. To commemorate the occasion, we will be distributing $15,000 in scholarships to Tennessee college students this year. More info at s3rs.com/15years.

2007 | S3 Asset Management is founded and sells surplus equipment and technology for hospitals and universities.

2010 | Rod McDaniel joins S3 Asset Management as an eBay lister, and the company’s core competencies evolve to include electronics recycling.

2016 | Rod McDaniel and a small group of investors purchase S3 from its founder.

The late Nashville businessman and entrepreneur Darrell S. Freeman, Sr. named Chairman of the S3 Board and initiates a 650 percent revenue increase over six years.

2018 | S3 expands its operations, purchasing a 75,000 sqft warehouse and experiences two years of record growth – in revenue and staff size.

2022 | S3 enjoys continued success: retains R2 and other top industry certifications, named an Inc. 5000 fastest growing company and an NBJ Best Place To Work.

S3 establishes a new board of business professionals to advise S3 leadership.

Environmental

Electronics Recycling

______

S3’s Six-Step Process

______

National Presence

______

Emissions Reduction

S3 exists to maximize security, sustainability and stewardship through technology recycling solutions to make it easy for businesses across the nation to responsibly recycle.

Hassle-Free E-Recycling

S3’s process makes it easy for our customers to responsibly and safely manage their excess technology assets. Beginning with scheduling a pickup, all the way through detailed reporting and end-of-life recycling, our team ensures that the customer’s experience is hassle-free.

We ensure that security controls are in place for unwiped or undestroyed data storage devices. Security controls consider physical security, monitoring, chain-of-custody, and personnel qualifications. We accommodate for any data and document security destruction needs, through our rigorous security protocol at our facility.

CORE COMPETENCIES

Information Technology Asset Disposition (ITAD)

S3 creates client-specific e-waste solutions to help organizations dispose of surplus equipment in a safe and environmentally responsible manner.

Data Destruction

As a member of the National Association for Information Destruction (NAID), S3 sanitizes or completely destroys all media in accordance with NIST guidelines, and provides each client with a certificate of destruction.

End-of-Life Electronics Recycling

Equipment that has no resale value, is antiquated or beyond repair is demanufactured in accordance to local, state and federal laws and regulations. S3 has a Zero-Landfill policy on all electronic equipment we acquire.

Logistics

S3 securely transports e-waste materials throughout the country with efficient logistics solutions. Our trucks are secured with GPS tracking, and our Over The Road drivers have decades of long-haul experience.

Mobility Management

Corporations undergoing technology upgrades can benefit from S3’s cell phone buy back and recycling services which many times is cost neutral, offsetting the expense of purchasing new equipment.

Our Six-step Recycling Process

STEP 1 Receive

The S3 staff coordinates all logistics to schedule pick-ups from our clients. Material is transported to our secure facility via S3 trucks or by freight, both of which are equipped with padlock security and GPS tracking.

STEP 2 Deidentify, Sort, Data Destruction and Process

All devices received by S3 are de-identified; any asset tags are removed and are sent back to the customer upon request. Items that have resale value are tested, where we perform light refurbishing. Items that do not have resale value are sent downstream for further recycling by an R2-certified partner. All material is processed in the continental U.S., and S3 and its downstream partners have a zero-landfill policy on electronic devices. S3 sanitizes or completely destroys all media with data in accordance with the National Institute of Standards and Technology Guidelines for Media Sanitization, and provides a certificate of destruction to every customer as proof of successful erasure and non-recoverability.

STEP 3 Test

All items are tested for power and basic functionality. If an item doesn’t meet our basic testing standards, then items are demanufactured and sent downstream for further recycling using a R2-certified partner.

STEP 4 Remarket/Resale

Re-marketed items are given a second life by our in-house light refurbishing process. Items are assessed a value and marketed through our various selling channels. Re-use is the truest form of recycling.

STEP 5 Storage Environment

All material is stored at S3’s secure facility. Accessibility to the office, warehouse and data security areas vary based on job responsibility. All devices that contain data are stored in our data security area. Other items are palletized, wrapped, and stored with customer ID until further processed. S3’s facility is monitored with numerous security cameras to the exterior and interior 24 hours a day, 7 days a week. Recordings are made from all cameras and retained for a period of 90 days.

STEP 6 End-of-Life Material

All devices that do no meet our testing standards are sent downstream to a R2-certified partner in the US for further processing. All commodities are recycled and/or smelted for use in new devices.

Service Areas Across North America

Client Count: 413

North American

Pickup Locations: 1,503

Fortune 500 Clients: 5

Devices Processed: 200,000

Pounds Processed: 4.9 Mil.

Emissions Reduction

In 2022, S3 Recycling Solutions processed 4.9M pounds of electronics and technology devices.

This is equivalent to greenhouse gas emissions from:

This is equivalent to CO2 emissions from:

151,282,220 miles driven by an average gasoline-powered passenger vehicle

https://epa.gov/energy/greenhouse-gases-equivalencies-calculatorcalculationsandreferences#miles

This is equivalent to greenhouse gas emissions avoided by:

6,857,960 gallons of gasoline consumed

https://epa.gov/energy/greenhouse-gases-equivalenciescalculatorcalculations-andreferences#gasoline

21,089 tons of waste recycled instead of landfilled

https://epa.gov/energy/greenhouse-gasesequivalencies-calculatorcalculations-and-references#recycle

7,677 homes’ energy use for one year

https://epa.gov/energy/greenhouse-gases-equivalenciescalculatorcalculations-and-references#houseenergy

977,413 trash bags of waste recycled instead of landfilled

https://epa.gov/energy/greenhousegasesequivalenciescalculatorcalculations-and-references#trash

7,413,717,030 number of smartphones charged

https://epa.gov/energy/greenhouse-gases-equivalenciescalculatorcalculations-and-references#smartphones

2,309,941 incandescent lamps switched to LEDs

https://epa.gov/energy/greenhouse-gases-equivalenciescalculatorcalculations-and-references

11,859 homes’ electricity use for one year

https://epa.gov/energy/greenhouse-gases-equivalenciescalculatorcalculations-and-references

Social Community Involvement

______ Charitable Giving

______

Diversity, Equity, and Inclusion

Employee Programs

Thought Leadership

Community Involvement

As one of the core values of our organization, community service is central part of the S3 culture. What we gain in business is amplified even more when we share it with our neighbors and friends. This overview of our 2022 activities is a snapshot of our efforts to be a good corporate citizen throughout each year.

Over 1,400

desktops & laptops donated to low income and underserved individuals.

Repaired Hundreds

of desktops and laptops for low income and underserved individuals.

2022

Charitable Giving

12 Pallets of bottled water donated and handed out to those suffering from no water supply in Jackson, MS.

Over 40 Christmas gifts provided for underserved families.

Over 150 Turkeys and winter clothes donated to underserved families.

In December 2022, we held our annual “Shop for a Kid” event that provided gifts for more than 40 families. We also partnered with a local non-profit to donate turkeys to residents in a Nashville neighborhood.

Diversity, Equity, and Inclusion Thought Leadership

It’s important to S3 leadership that the make-up of our team reflects the population of the communities in which we are located. We are proud to report that the inclusion of minorities on the S3 team exceeds 35 percent. We are committed to sustaining an inclusive environment

throughout all levels of our organization, and we make it a priority to maintain an equal opportunity workplace. We also practice these principles when selecting external vendors, making sure that minority-owned and small businesses are a part of our extended team.

35%

S3 Minority Population

Employee Programs

600K+ Minority & Small Business Spend

S3 CEO Rod McDaniel focuses on being a visionary leader and architect of positive organizational change. In June 2022, he became a graduate of the ITSMF Management Academy! ITSMF - Information Technology Senior Management Forum is a nonprofit organization focused on cultivating executive talent among Black technology professionals. Participants of the Management Academy are connected to resources and industry-leading executives in order to fully develop their management skills and emotional intelligence.

Creating an environment at S3 where every team member feels appreciated and respected is an all-around win for everyone. When employees know they are valued as people first – and profits come second – then morale increases, they are more invested in the organization and they are proud to call S3 their workplace. We love that, and we strive to maintain a culture where team members have the organization’s full support when taking time off for family, illness, or personal matters.

We have never turned an employee down who requested our assistance, and we are thankful to be in a position to provide 100 percent healthcare coverage and other significant benefits to our workforce.

2022 Awards

As a rising leader in the ITAD industry, Rod has been a featured speaker at various conferences throughout the country. In July 2022, he spoke about Responsible Recycling version 3 (R2v3) changes and how to ensure compliance at ITAD 2022, a conference that attracts more than 850 attendees and brings together the biggest names and brightest minds in the information technology asset disposition industry.

Governance

Credentials and Certifications

Data Security and Privacy

S3 Board

S3 Professional Team

Credentials and Certifications

We are committed to continuous improvement and positioning ourselves as a leader in information technology asset disposition. Making investments in our processes not only benefits our customers, but it is also simply the right thing to do. The rigorous requirements of the certifications that we attain increase our organizational maturity and allow us to better serve our clients across North America.

S3 is R2v3 certified which requires increased emphasis on reuse and protecting data, strengthened data security controls and enhanced controls for test, repair, and reuse operations to ensure the quality and effectiveness of the operations. S3 also has ISO 9001 certification for a quality management system, ISO 14001 certification for systematically managing its responsibilities in a way that contributes to the environmental pillar of sustainability, and ISO 45001 certification for an occupational health and safety management system, to enable a safe and healthy workplace.

Data Security and Privacy

From onsite data destruction to IT asset removal, S3 protects clients’ data and interests. S3 performs data sanitization and destruction on all data-bearing devices including but not limited to hard drives, removable flash memory, removable storage devices, and solid-state drives. All S3 processing and recycling activities satisfy the regulatory standards set forth by HIPAA, GLB, PCI and the California Security Breach Information Act in accordance with U.S. DoD 5220.22-M and NIST SP 800-88 R1 guidelines. And all material designated for recycling is done in a zero-landfill manner.

As a member of the National Association for Information Destruction (NAID), S3 sanitizes or completely destroys all media in accordance with NIST guidelines and provides each client with a certificate of destruction.

S3 Board

Brian

Moyer Chairman of the Board

Past President & CEO Greater Nashville Technology Council

ESG is an important part of the S3 story, and I am incredibly proud of S3’s sustainability efforts and track record. That includes our minority ownership and culturally diverse team to zero-landfill and environmentally friendly processes. We are committed to offering our clients the easiest way to dispose of their electronics in a safe, secure, and responsible manner. Engaging with S3 as an e-recycling partner provides businesses with a peace of mind that the security of their data is our top priority, their electronics are processed in an R2v3-certified facility, and our growing company and national presence provide the scale to handle their needs.

Rod McDaniel President and CEO S3

Recycling Solutions

A native of Nashville, Tenn., McDaniel has led S3 to two consecutive appearances on the Inc. 5000 fastest-growing private company. He serves on the Nashville Technology Council board and was named to the NBJ Power 100 in 2022.

Myra Herring CEO Capri Brand, LLC

A graduate of Spelman College, Herring is the founder and CEO of Capri Brand, LLC, a personal branding and coaching company. She spent 10 years as a technology Consulting Manager at Accenture and Daugherty and is the former VP of Operations of Information Technology Senior Management Forum.

James Crumlin, Jr. Partner

Spencer Fane LLP

Brian Moyer was named Chairman of the Board in November 2022 and will serve a three-year appointment in the role. He is the former President and CEO of the Greater Nashville Technology Council and currently serves as Co-Founder and CEO of The Innovation Studio, Founder and CEO of Moyer Advisory Group, and EntrepreneurIn-Residence for Vanderbilt’s Center for Tech Transfer and Commercialization.

In Memoriam Darrell S. Freeman, Sr.

Past Chairman of the Board

The late businessman and community leader Darrell S. Freeman, Sr. was named S3 Chairman of the Board of Directors in 2016. Under his leadership, S3’s annual revenue grew 650 percent over four years, S3 received R2 certification, and the organization’s national profile was elevated to new heights.

A graduate of Vanderbilt Law School, Crumlin is a well-known employment lawyer at Spencer Fane, a nationwide law firm with 23 offices across the U.S. He helps clients navigate the corporate legal landscape and avoid costly mistakes, so employers can focus on running successful operations.

Wanda Lyle President & CEO Center

for Non-Profit Management

Lyle is a global executive and board director with more than 40 years of financial services industry experience. She served more than 29 years with Merrill Lynch, and from 2014 through 2021, she served as the Managing Director – General Manager of the UBS Business Solutions Nashville UBS.

Ray Guzman CEO and Co-Founder SwitchPoint Ventures

SwitchPoint Ventures is an AI-focused venture studio that partners with business leaders to drive rapid technological innovation. Prior to SwitchPoint, Guzman was the SVP of Analytics at Intermedix/ R1 (NASDAQ: RCM) where he led a large, globally distributed analytics business unit.

Richard Pinson Past CEO Advance Networks Solutions

Pinson served as a senior executive at both Columbia Pictures and Turner Broadcasting (Entertainment Group) prior to founding and leading multiple technology companies. Over the past 30 years, he has created over $1B in shareholder value as the operator and Chief Executive.

S3 Professional Team

Rayna Bosemer Director of Client Services & Logistics

Anthony Smith Director of Remarketing

Brad Linamen Director of Technology

Jarquis Hendricks Director of Operations

Greg Welch Chief Financial Officer

Stacy Muth Chief of Staff

Joey Singer Account Executive

Nathan Freeman Sales Executive

Steven Lee Warehouse Manager