LEASES

12 Months Ended

Dec. 31, 2023

Leases

LEASES

NOTE 8 – LEASES

As of December 31, 2023, Titan Trucking maintains three leases classified as operating leases. Leases with an initial term of 12 months or less or leases that are immaterial are not included on the consolidated balance sheets.

Titan Trucking has a 62-month lease in Troy, Michigan which expires on January 15, 2025. The monthly payments were initiated on February 15, 2020 at $8,251 after a 2-month rent abatement period. Straight rent was calculated at $8,479 per month. The total remaining operating lease expenses through expected termination date on the lease are approximately $110,000.

On April 1, 2023, Titan Trucking entered into a 60-month lease in Detroit, Michigan, with a related party through common ownership, which expires on March 31, 2028. On September 1, 2023, the Company and the related party amended the lease, resulting in decreased payment terms. The lease has the option to renew for an additional 5 years given proper notice. The monthly payments were initiated on May 1, 2023 after a 1-month rent abatement period. Straight rent for the amended lease was calculated at $29,113 per month. The total remaining operating lease expenses expected through termination date on the lease are approximately $1,485,000. Following the amendment, the supplemental cash flow impact of the right-of-use asset exchanged for new lease obligations was $1,411,851.

On November 1, 2023, the Company entered into a 39-month lease in Bloomfield Hills, Michigan which expires on January 31, 2027. The monthly payments were initiated in February of 2024 at $7,417 after a 3-month rent abatement period. Straight rent was calculated at $7,542 per month. The total remaining operating lease expenses through expected termination date on the lease are approximately $287,000. Following the lease, the supplemental cash flow impact of the right-of-use asset exchanged for new lease obligations was $251,057.

	December 31,			December 31,
	2023			2022
Weighted average remaining lease term (in years)		3.86			2.08
Weighted average discount rate		8.10	%		7.57	%

Future minimum lease payments required under operating leases on an undiscounted cash flow basis as of December 31, 2023 were as follows:

	For the Year Ended,
	December 31,
2024	$	514,193
2025		460,980
2026		485,504
2027		418,442
2028		102,211
Total minimum lease payments		1,981,330
Less: imputed interest		(298,917	)
Present value of future minimum lease payments		1,682,413
Current operating lease liabilities		391,547
Non-current operating lease liabilities	$	1,290,866

The Company had operating lease expenses of $372,162 and $112,753 for the years ended December 31, 2023 and 2022, respectively. The Company records operating lease expense as a component of general and administrative expenses on the consolidated statements of operations.