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TITAN ENVIRONMENTAL SOLUTIONS INC.
TABLE OF CONTENTS
As used in this Annual Report on Form 10-K, the terms “we”, “us”, “our” and the “Company” mean Titan Environmental Solutions Inc. and its wholly owned subsidiaries, taken as a whole (unless the context indicates a different meaning).
| i |
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K contains forward-looking statements that involve substantial risks and uncertainties. The forward-looking statements are contained principally in the sections titled “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business,” but are also contained elsewhere in this report. In some cases, you can identify forward-looking statements by the words “may,” “might,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “objective,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue” and “ongoing,” or the negative of these terms, or other comparable terminology intended to identify statements about the future, although not all forward-looking statements contain these words. These statements relate to future events or our future financial performance or condition and involve known and unknown risks, uncertainties and other factors that could cause our actual results, levels of activity, performance or achievement to differ materially from those expressed or implied by these forward-looking statements. These forward-looking statements include, but are not limited to, statements about:
| ● | our prospects, including our future business, revenues, expenses, net income, earnings per share, gross margins, profitability, cash flows, cash position, liquidity, financial condition and results of operations, our targeted growth rate, our goals for future revenues and earnings, and our expectations about realizing the revenues in our backlog, if any, and in our sales pipeline, if any; | |
| ● | our ability to successfully pursue strategic acquisitions and integrate acquired businesses; | |
| ● | our ability to hire additional personnel and to manage the growth of our business; | |
| ● | our ability to continue as a going concern; | |
| ● | environmental and other regulations, including developments related to emerging contaminants, gas emissions, renewable energy and environmental, social and governance (“ESG”) performance and disclosure; | |
| ● | significant environmental, safety or other incidents resulting in liabilities or brand damage; | |
| ● | failure to obtain and maintain necessary permits due to land scarcity, public opposition or otherwise; | |
| ● | diminishing landfill capacity, resulting in increased costs and the need for disposal alternatives; | |
| ● | failure to attract, hire and retain key team members and a high quality workforce; | |
| ● | increases in labor costs due to union organizing activities or changes in wage and labor related regulations; | |
| ● | disruption and costs resulting from extreme weather and destructive climate events; | |
| ● | public health risk, increased costs and disruption due to a future resurgence of pandemic conditions and restrictions; | |
| ● | macroeconomic conditions, geopolitical conflict and market disruption resulting in labor, supply chain and transportation constraints, inflationary cost pressures and fluctuations in commodity prices, fuel and other energy costs; | |
| ● | increased competition; | |
| ● | pricing actions; | |
| ● | competitive disposal alternatives, diversion of waste from landfills and declining waste volumes; |
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| ● | weakness in general economic conditions and capital markets, including potential for an economic recession; instability of financial institutions; | |
| ● | adoption of new tax legislation; | |
| ● | shortages of fuel and/or other energy resources; | |
| ● | the risks associated with the legislative, judicial, accounting, regulatory, political and economic risks and conditions; | |
| ● | claims, demands and lawsuits to which we are, and may in the future, be subject and the risk that our insurance or indemnities coverage may not be sufficient; | |
| ● | our ability to operate, update or implement our IT systems; | |
| ● | our ability to implement additional finance and accounting systems, procedures and controls in order to satisfy public company reporting requirements; | |
| ● | our ability to obtain additional financing when and as needed; | |
| ● | the potential liquidity and trading of our securities; and | |
| ● | the future trading prices of our common stock and the impact of securities analysts’ reports on these prices. |
You should read this report, including the section titled “Risk Factors,” and the documents that we reference elsewhere in this report and have filed as exhibits to this report, completely and with the understanding that our actual results may differ materially from what we expect as expressed or implied by our forward-looking statements. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all.
These forward-looking statements represent our estimates and assumptions only as of the date of this report. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise after the date of this report. All subsequent forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to herein.
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SUMMARY OF PRINCIPAL RISK FACTORS
This summary briefly lists the principal risks and uncertainties facing our business, which are only a select portion of those risks. A more complete discussion of those risks and uncertainties is set forth in Part I, Item 1A of this Annual Report, entitled Risk Factors. Additional risks not presently known to us or that we currently deem immaterial may also affect us. If any of these risks occur, our business, financial condition or results of operations could be materially and adversely affected. Our business is subject to the following principal risks and uncertainties:
| ● | Since our recent transition to an environmental solutions company in January 2023, we lack an established operating history on which to evaluate our consolidated business and determine if we will be able to execute our business plan, and we can give no assurance that our operations will result in profits. | |
| ● | We have had a history of losses and may incur future losses, which may prevent us from attaining profitability. | |
| ● | If we are unable to obtain additional funding when needed, our business operations will be harmed, and if we do obtain additional financing, our then-existing shareholders may suffer substantial dilution. | |
| ● | If we do not obtain adequate capital funding or improve our financial performance, we may not be able to continue as a going concern. | |
| ● | We have made and expect to continue to make acquisitions as a primary component of our growth strategy. We may not be able to identify suitable acquisition candidates or consummate acquisitions on acceptable terms, or at all, which could disrupt our operations and adversely impact our business and operating results. | |
| ● | Increased competition for acquisition targets in our industry may affect the availability of acquisition targets, which could adversely affect our growth. | |
| ● | Our ability to acquire additional businesses may require us to raise capital through the sale of equity and/or debt securities, which we may be unable to do on acceptable terms. | |
| ● | We may be unable to successfully integrate acquisitions, which may adversely impact our operations. | |
| ● | Acquisitions that we complete may have an adverse impact on our results of operations. | |
| ● | Our resources may not be sufficient to manage our expected growth and the failure to properly manage our potential growth would be detrimental to our business. | |
| ● | Our business is capital intensive, requiring ongoing cash outlays that may strain or consume our available capital and force us to sell assets, incur debt, or sell equity on unfavorable terms. | |
| ● | We currently depend on a limited number of customers for our revenue. | |
| ● | Our operations are subject to environmental, health and safety laws and regulations, as well as contractual obligations that may result in significant liabilities. | |
| ● | Our business is subject to operational and safety risks, including the risk of personal injury to employees and others. |
| ● | We may lose contracts through competitive bidding, early termination or governmental action, or we may have to substantially lower prices in order to retain certain contracts, any of which would cause our revenue and our operating margins to decline. | |
| ● | Efforts by labor unions to organize our employees could divert management attention and increase our operating expenses. | |
| ● | We will need to raise additional capital in the future and additional capital may not be available to us on reasonable terms, if at all, when or as we require. If we issue additional shares of our common stock or other securities that may be convertible into, or exercisable or exchangeable for, our common stock, our existing stockholders would experience further dilution and could trigger anti-dilution provisions in outstanding warrants. |
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PART I
| ITEM I. | Business |
BUSINESS
Overview
We are an integrated provider of non-hazardous solid waste and recycling collection, transportation and disposal services. We conduct our business primarily through our principal operating subsidiary, Standard Waste Services, LLC (“SWS”), which provides waste and recycling collection and disposal services to industrial generators and commercial contractors located in Michigan and commenced operations in 2017. We acquired SWS in May 2024 through our Titan Trucking, LLC (“Titan Trucking”) subsidiary, a non-hazardous solid waste management company that commenced operations in May 2017. Through these companies, we currently operate a fleet of 32 waste collection vehicles. All of the revenues of these companies for the years ended December 31, 2024 and 2023 was derived from the provision of commercial front load, roll-off, rubber wheel and long-haul tractor trailer services to their customers. While we currently have the majority of our operations in Michigan, we are aggressively looking to expand our presence across the Midwest and, over time, into the Northeast and Southeast regions of the United States.
Our Operating Strategy
Our objective is to expand the geographic scope of our operations and to become one of the leading providers of non-hazardous solid waste management in each market that we serve. Our operating strategy to achieve this objective is to capitalize on the continuing consolidation of the solid waste management industry by (i) identifying and penetrating new markets and expanding our operations in our existing markets through tuck-in acquisitions that are combined with existing operations, (ii) increasing profitability by vertically integrating our operations and achieving economies of scale, (iii) internalizing greater volumes of disposal waste through the acquisition of strategic landfills and transfer stations, and (iv) achieving internal growth. We will seek to avoid highly-competitive, large urban markets and instead target markets in which we can attain high market share either through exclusive contracts, vertical integration or asset positioning. We will seek to be among the leading providers of waste services in most of our markets. The key components of our operating strategy, which are tailored to the competitive and regulatory factors that affect our markets, are as follows:
| ● | Expansion Through Acquisitions and Organic Growth. We have implemented an acquisition program to expand our operations by acquiring solid waste collection, transportation, and disposal companies, principally in the Midwest, Northeast and Southeast regions of the United States. The principal components of our acquisition strategy are as follows: |
| ● | Enter New Markets. We will typically seek to enter a new market by acquiring one or several solid waste collection and transportation operations where there are sufficient disposal alternatives to ensure competitive disposal pricing. We may also acquire solid waste landfills in our targeted new markets with significant currently-permitted capacity and in connection therewith or thereafter acquire nearby solid waste collection and transfer station operations so as to secure a captive waste stream for internal disposal into the acquired landfill. As we expand, we plan to focus our business in the markets where competition from national service providers is limited or sub-par. We plan to start new market development projects in certain disposal-neutral markets in which we will provide services to commercial, industrial and municipal customers relying on superior customer service as our catalyst for growth. We believe this strategic focus positions us to acquire significant share within our target markets, maximize customer retention and benefit from a higher and more stable pricing environment. |
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| ● | Expansion of Market Share and Services. We plan to direct acquisition efforts towards those markets in which we will be able to provide vertically integrated collection and disposal services and/or provide waste collection services in markets with high barriers to entry. After our initial entry into a new market, we will seek to expand our market share and services through (i) the acquisition of solid waste management businesses and operations that can be integrated with our existing operations without increases in infrastructure or that complement our existing services, and (ii) expansion into adjacent markets. Such acquisitions may involve adding collection operations, transfer stations, collection routes and landfill capacity that allow us to expand market share and increase asset utilization by eliminating duplicate management, administrative and operational functions. Prior to acquisition, we will analyze each prospective target for cost savings through the elimination of inefficiencies and excesses that are typically associated with private companies competing in fragmented industries. |
| ● | Target Secondary and Rural Markets. By targeting secondary and rural markets, we believe that we will be able to garner a higher local market share than would be attainable in more competitive urban markets, which we believe reduces our exposure to customer churn and improves financial returns. |
| ● | Increasing Productivity and Operating Efficiency. We believe we can reduce the total operating expenses of owned and acquired businesses by implementing centralized financial controls, consolidating certain functions performed separately by each business prior to its acquisition by us, and consolidating collection routes, equipment, and personnel through tuck-in acquisitions. In addition, we are implementing programs to take advantage of certain economies of scale in such areas as the purchase of equipment, vehicles, parts and tools, vehicle and equipment maintenance, data processing, financing arrangements, employee benefits, insurance and bonding, and communications. |
| ● | Provide Vertically Integrated Services. In markets in which we believe owning landfills is a strategic advantage to a collection operation because of competitive and regulatory factors, we plan to focus on providing integrated services, from collection through disposal of solid waste in landfills that we own or operate. After we have acquired a landfill, we will seek to maximize internalization of waste we collect, and thereby intend to realize higher margins from our waste operations. |
| ● | Pursue Exclusive and Municipal Contracts. In markets in which waste collection services are provided under exclusive arrangements, or in which waste disposal is municipally owned or funded or available at multiple sources, we believe that controlling the waste stream by providing collection services under exclusive arrangements is often more important to our growth and profitability than owning or operating landfills. We intend to devote significant resources to securing municipal contracts. Our management team is well versed in bidding for municipal contracts with over 60 years of experience and working knowledge in the solid waste industry and local service areas in existing and target markets. We hope to procure and negotiate exclusive municipal contracts, allowing us to maintain stable recurring revenue but also providing a significant barrier to entry to our competitors in those markets. |
| ● | Internal Growth. To generate internal revenue growth, our management and sales and marketing personnel will focus on increasing market penetration in our current and adjacent markets, soliciting new customers in markets in which such customers have the option to choose a particular waste collection service and marketing upgraded or additional services (such as compaction or automated collection) to existing customers. We believe we can achieve internal growth, principally from additional sales into our current markets, by providing superior and improved service and through our existing marketing efforts. We also intend to selectively implement price increases when competitive advantages and appropriate market conditions exist. As customers are added in existing markets, our revenue per routed truck increases, which generally increases our collection efficiencies and profitability. In markets in which we have exclusive contracts, franchises and governmental certificates, we expect internal volume growth generally to track population and business growth. |
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| ● | Manage on a Decentralized Basis. We will strive to acquire synergistic companies with strong management that can remain with us to support future growth and leadership as we will manage our operations on a decentralized basis. This places decision-making authority close to the customer, enabling us to identify and address customers’ needs quickly in a cost-effective manner. We believe that decentralization provides a low-overhead, highly-efficient operational structure that allows us to expand into geographically contiguous markets and operate in relatively small communities that larger competitors may not find attractive. We believe that this structure gives us a strategic competitive advantage, given the relatively rural nature of many of the markets in which we plan to operate, and makes us an attractive buyer to many potential acquisition candidates. |
It is expected that each operating location will have a district or site manager who has a high degree of decision-making authority for his or her operations and is responsible for maintaining service quality, promoting safety, implementing marketing programs and overseeing day-to-day operations, including contract administration. Local managers will also help identify acquisition candidates and will be responsible for integrating acquired businesses into our operations and obtaining the permits and other governmental approvals required for us to operate.
| ● | Implement Operating Standards. We will develop company-wide operating standards that will be tailored for each of our markets based on industry norms and local conditions. We implement cost controls and employee training and safety procedures and establish a sales and marketing plan for each market. By internalizing the waste stream of acquired operations, we expect to further increase operating efficiencies and improve capital utilization. We plan to use a wide-area information system network, implement financial controls and consolidate certain accounting, personnel and customer service functions. While regional and district management operate with a high degree of autonomy, our executive officers monitor regional and district operations and require adherence to our accounting, purchasing, safety, marketing and internal control policies, particularly with respect to financial matters. Our executive officers will regularly review the performance of regional officers, district managers and operations. We believe we can improve the profitability of existing and newly-acquired operations by establishing operating standards, closely monitoring performance and streamlining certain administrative functions. |
Waste Industry Overview
The U.S. waste and recycling industry, including the medical and hazardous waste markets, reached an estimated $104.63 billion in revenue in 2024, according to the Waste Business Journal. Collection revenues were responsible for two-thirds, or approximately $69.46 billion, of that revenue overall, with public company collection revenue alone totaling $45.25 billion for the year. Disposal was responsible for 27% of revenues, and transfer and processing was responsible for 7%.
The waste collection services industry focuses on collecting hazardous and non-hazardous waste and recyclable materials. Non-hazardous waste includes municipal solid waste, household waste, and industrial and commercial waste. The industry also includes the operations of transfer stations where waste is relocated from local vehicles to long-distance vehicles like long haul trucks or trains for transport to disposal facilities or sorted for further processing. Given the utility-like nature of trash and recyclable material collection, the industry is highly recession resistant. While it has been immune to technological disruptions, the ability to leverage new technologies, such as automated and energy-efficient vehicles, represent a new benefit to businesses, which is expected to continue over the coming years.
During the past four decades, our industry has experienced periods of substantial consolidation activity; however, we believe significant fragmentation remains. We believe that there are two primary factors that lead to consolidation:
| ● | Stringent industry regulations have caused operating and capital costs to increase, with many local industry participants finding these costs difficult to bear and deciding to either close their operations or sell them to larger operators; and |
| ● | Larger operators are increasingly pursuing economies of scale by vertically integrating their operations or by utilizing their facility, asset and management infrastructure over larger volumes. Accordingly, larger solid waste collection and disposal companies are seeking to become more cost-effective and competitive by controlling a larger waste stream and by gaining access to significant financial resources to make acquisitions. |
Management believes that the larger public companies as well as those backed by private equity firms target the larger revenue generating companies available in their respective markets leaving smaller sellers with less access to acquirers. We will focus on those niche smaller opportunities where we can take advantage of our entrepreneurial approach.
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Operations
Through our subsidiaries, we provides solid waste collection services to approximately 1,200 industrial and commercial customers in the Metropolitan Detroit, Michigan area. In the years ended December 31, 2024 and 2023, substantially all of our collection revenue was derived from services provided to industrial customers. However, it is our intention to increase substantially the revenues we derive in our current business operations from services provided to commercial customers. We also expect to acquire companies that derive significant revenues from commercial and residential customers.
Collection Services. Collection involves picking up and transporting waste and recyclable materials from where it was generated to a transfer station, material recovery facility (“MRF”) or disposal site. We generally will provide collection services under one of two types of arrangements:
| ● | For commercial and industrial collection services, typically we have, and expect to continue to have, three-year service agreements. The fees under the agreements are influenced by factors such as collection frequency, type of collection equipment we furnish, type and volume or weight of the waste collected, distance to the disposal facility, labor costs, cost of disposal and general market factors. As part of the service, we provide steel containers to most customers to store their solid waste between pick-up dates. Containers vary in size and type according to the needs of our customers and the restrictions of their communities. Many are designed to be lifted mechanically and either emptied into a truck’s compaction hopper or directly into a disposal site. By using these containers, we can service most of our commercial and industrial customers with trucks operated by only one employee. |
| ● | We do not currently provide residential collection services. However, for most residential collection services, we will seek to acquire companies that have a contract with, or a franchise granted by, a municipality, homeowners’ association or some other regional authority that will give us the exclusive right to service all or portion of the homes in an area. These contracts or franchises are typically for periods of three to ten years. We expect that we also will provide services under individual monthly subscriptions directly to households. The fees for residential collection are either paid by the municipality or authority from their tax revenues or service charges, or are paid directly by the residents receiving the service. |
In our roll off waste collection operations, we supply our customers with waste containers of various sizes of dumpsters that are primarily used for construction and demolition debris but can also be used for municipal waste and recyclable materials. These containers are designed so that they can be lifted mechanically on to a collection truck to be transported to a disposal facility. By using these containers, we can service our customers with trucks operated by a single employee. Roll off collection services are not generally performed under long-term service agreements but are provided on an “on call” basis. In certain cases, contract terms may apply but tend to be shorter in length, in some cases having terms of only six months, and may vary according to the customers’ underlying projects. Fees are generally charged in one of two ways: fixed fee per pick up depending on the size of equipment provided, or separate fees for transportation of the dumpster provided added to the disposal cost for materials deposited in our equipment and disposed of. Disposal fees can vary depending on type of material and origin of the waste.
Additionally, we rent rubber wheel trailers to smaller generators of waste such as homeowners and small commercial contractors. Rubber wheel trailers are primarily used for clean up debris and in some cases smaller quantities of construction and demolition debris. Rubber wheel trailers generally cause less trauma to customer property and are more convenient to load or relocate on a customer location. We tow the rubber wheel trailers with our standard vehicles and transport them with the waste to either a landfill or a transfer station for disposal. Fees for rubber wheel services are similar to those for roll off collection services.
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Transportation and Disposal Services. All solid waste management companies must have access to a disposal facility, such as a solid waste landfill. While landfills are the main depositories for solid waste in North America, the significant capital requirements of developing and operating a landfill serve as a barrier to landfill ownership, and, thus, we currently utilize third party disposal facilities. It is usually preferable for our collection operations to use disposal facilities that we own or operate, rather than using third-party disposal facilities, which generally allows us to realize higher consolidated margins and stronger operating cash flows. The fees charged at disposal facilities, which are referred to as tipping fees, are based on several factors, including our cost to construct, maintain and close the landfill, the distance to an alternative disposal facility, the type and weight or volume of solid waste deposited and competition.
In many cases where waste generators are not within close proximity to landfills, waste is disposed of at transfer stations. Transfer stations act as intermediary facilities where smaller quantities of waste can be delivered and consolidated into vehicles capable of transporting larger quantities of material. Transfer station operators can achieve economies of scale by transporting these larger quantities. Transportation from transfer stations is normally provided via tractor trailer style vehicles but can also be achieved using alternate transportation means such as rail or barge. Transfer station operators normally charge a fee for volume delivered to their facility usually measured in tons or cubic yards. The main costs to transfer station operators is the disposal fee charged by the final disposal facility which can be a landfill, waste to energy facility, or other licensed disposal facility, together with the cost associated with the transportation of the material. As transfer station operators are dependent upon transporters to ultimately remove the waste delivered to their facility, these services are in high demand.
Recycling Services. Recycling involves the separation of reusable materials from the waste stream for processing and resale or other disposition. We not only collect materials from households and businesses in our service areas, we also sell them to manufacturers to be recycled and sold in the North American market. Demand for recycled materials is generally growing. Several states have recently passed minimum-recycled-content mandates, and many companies are responding to requirements for recycled content from their own customers and to meet sustainability targets. While we currently do not own any recycling facilities, as we expand our service offerings, we will seek to build or acquire such facilities in an effort to attract additional customers and increase our operating margins.
Sales and Marketing
We focus our marketing efforts on increasing and extending business with existing customers, as well as increasing our new customer base. Our sales and marketing strategy is to provide prompt, high-quality, comprehensive solid waste collection to our customers at competitive prices. We target potential customers of all sizes, from small-quantity generators to large companies and municipalities. Because the waste collection and disposal business is a highly-localized business, most of our marketing activity is local in nature.
Customers
We have a diverse customer base. During the year ended December 31, 2024, one customer accounted for approximately 11% of our revenues. During the year ended December 31, 2023, we had one customer account for 38% of our revenues. No other customer accounted for more than 10% of our revenues in any of those periods. We have no long-term agreements with any of the customers that accounted for more than 10% of our revenues in any of those periods.
Competition
The U.S. solid waste collection and disposal industry is highly competitive and, even following considerable consolidation, remains fragmented. The industry requires substantial labor and capital resources that are barriers to entry for some. The industry presently includes large, publicly-held, national waste companies such as Republic Services, Inc. and Waste Management, Inc.; several regional, publicly-held and privately-owned companies; and several thousand small, local, privately-owned companies. Our existing market and certain of the markets in which we will likely compete are served by one or more of these large, national companies, as well as by numerous privately-held regional and local solid waste companies of varying sizes and resources, some of which have accumulated substantial goodwill in their markets. We also compete with counties, municipalities and solid waste districts that maintain their own waste collection and disposal operations. Public sector operations may have financial advantages over us because of their access to user fees and similar charges, tax revenues, tax-exempt financing and the ability to flow-control waste streams to publicly owned disposal facilities.
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We compete for collection based primarily on geographic location and the price and quality of our services. From time to time, our competitors may reduce the price of their services in an effort to expand their market share or service areas or to win competitively bid on contracts. These practices may cause us to reduce the price of our services or, if we elect not to do so, to lose business.
The U.S. municipal solid waste services industry has undergone significant consolidation and, as a result of this consolidation, we encounter competition in our efforts to acquire transfer stations and collection operations. Competition exists not only for collection, transfer and disposal volume but also for acquisition candidates. We generally compete for acquisition candidates with large, publicly-held waste management companies, private equity-backed firms as well as numerous privately-held regional and local solid waste companies of varying sizes and resources. Accordingly, it may become uneconomical for us to make further acquisitions or we may be unable to locate or acquire suitable acquisition candidates at price levels and on terms and conditions that we consider appropriate, particularly in markets we do not already serve. Competition in the disposal industry is also affected by the increasing national emphasis on recycling and other waste reduction programs, which may reduce the volume of waste deposited in landfills.
Regulation
Our business is subject to extensive and evolving federal, state and local environmental, health, safety and transportation laws and regulations. These laws and regulations are administered by the U.S. Environmental Protection Agency, or EPA, and various other federal, state and local environmental, zoning, air, water, transportation, land use, health and safety agencies. Many of these agencies regularly inspect our operations to monitor compliance with these laws and regulations. Governmental agencies have the authority to enforce compliance with these laws and regulations and to obtain injunctions or impose civil or criminal penalties in cases of violations. We believe that regulation of the waste industry will continue to evolve, and we will need to adapt to future legal and regulatory requirements to ensure compliance.
Our operations are subject to extensive regulation, principally under the federal statutes described below.
The Occupational Safety and Health Act of 1970, as amended, or OSHA. OSHA establishes certain employer responsibilities, including maintenance of a workplace free of recognized hazards likely to cause death or serious injury, compliance with standards promulgated by the Occupational Safety and Health Administration and various record keeping, disclosure and procedural requirements. Various standards, including standards for notices of hazards, safety in excavation and demolition work and the handling of asbestos, may apply to our operations.
Flow Control/Interstate Waste Restrictions. Certain permits and approvals, as well as certain state and local regulations, may limit a landfill or transfer station to accepting waste that originates from specified geographic areas, restrict the importation of out-of-state waste or wastes originating outside the local jurisdiction or otherwise discriminate against non-local waste. From time to time, federal legislation is proposed that would allow some local flow control restrictions. Although no such federal legislation has been enacted to date, if such federal legislation should be enacted in the future, states in which we use landfills could limit or prohibit the importation of out-of-state waste or direct that wastes be handled at specified facilities. These restrictions could also result in higher disposal costs for our collection operations. If we were unable to pass such higher costs through to our customers, our business, financial condition and operating results could be adversely affected.
State and Local Regulation. Each state in which we now operate or may operate in the future has laws and regulations governing the generation, storage, treatment, handling, transportation and disposal of solid waste, occupational safety and health, water and air pollution and, in most cases, the siting, design, operation, maintenance, closure and post-closure maintenance of landfills and transfer stations. State and local permits and approval for these operations may be required and may be subject to periodic renewal, modification or revocation by the issuing agencies. In addition, many states have adopted statutes comparable to, and in some cases more stringent than, the Comprehensive Environmental Response, Compensation, and Liability Act, or CERCLA. These statutes impose requirements for investigation and cleanup of contaminated sites and liability for costs and damages associated with such sites, and some provide for the imposition of liens on property owned by responsible parties. Furthermore, many municipalities also have ordinances, local laws and regulations affecting our operations. These include zoning and health measures that limit solid waste management activities to specified sites or activities, flow control provisions that direct or restrict the delivery of solid wastes to specific facilities, laws that grant the right to establish franchises for collection services and then put such franchises out for bid and bans or other restrictions on the movement of solid wastes into a municipality.
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Certain state and local jurisdictions may also seek to enforce flow control restrictions through local legislation or contractually. In certain cases, we may elect not to challenge such restrictions. These restrictions could reduce the volume of waste going to landfills in certain areas, which may adversely affect our ability to operate our landfills at their full capacity and/or reduce the prices that we can charge for landfill disposal services. These restrictions may also result in higher disposal costs for our collection operations. If we were unable to pass such higher costs through to our customers, our business, financial condition and operating results could be adversely affected.
There has been an increasing trend at the state and local level to mandate and encourage waste reduction and recycling and to prohibit or restrict the disposal in landfills of certain types of solid wastes, such as construction and demolition debris, yard wastes, food waste, beverage containers, unshredded tires, lead-acid batteries, paper, cardboard and household appliances.
Many states and local jurisdictions have enacted “bad boy” laws that allow the agencies that have jurisdiction over waste services contracts or permits to deny or revoke these contracts or permits based on the applicant’s or permit holder’s compliance history. Some states and local jurisdictions go further and consider the compliance history of the parent, subsidiaries or affiliated companies, in addition to that of the applicant or permit holder. These laws authorize the agencies to make determinations of an applicant’s or permit holder’s fitness to be awarded a contract to operate and to deny or revoke a contract or permit because of unfitness unless there is a showing that the applicant or permit holder has been rehabilitated through the adoption of various operating policies and procedures put in place to assure future compliance with applicable laws and regulations.
Some state and local authorities enforce certain federal laws in addition to state and local laws and regulations. For example, in some states, the Resource Conservation and Recovery Act, or RCRA, OSHA, parts of the Clean Air Act and parts of the Clean Water Act are enforced by local or state authorities instead of the EPA, and in some states those laws are enforced jointly by state or local and federal authorities.
Public Utility Regulation. In many states, public authorities regulate the rates that landfill operators may charge.
Seasonality
Based on our industry and our historic trends, we expect our operations to vary seasonally. Typically, revenue will be highest in the second and third calendar quarters and lowest in the first and fourth calendar quarters. These seasonal variations result in fluctuations in waste volumes due to weather conditions and general economic activity. We also expect that our operating expenses may be higher during the winter months due to periodic adverse weather conditions that can slow the collection of waste, resulting in higher labor and operational costs.
Employees
As of March 15, 2025, we had approximately 40 full-time employees, of whom 30 were employed in collection, transfer and disposal operations, eight in clerical, administrative and sales positions and two in management. None of our employees is represented by a labor union. We have not experienced any work stoppages and we believe that our relations with our employees are good.
The safety of our employees and customers is extremely important to us and we have a strong track record of safety and environmental compliance. We constantly review and assess our policies practices and procedures in order to create a safer work environment for our employees and to reduce the frequency of workplace injuries.
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| ITEM 1A. | Risk Factors |
Investing in our securities involves a high degree of risk. You should carefully consider the following information about these risks, together with the other information appearing elsewhere in this report, including our financial statements, the notes thereto and the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” before deciding to invest in our securities. The occurrence of any of the following risks could have a material and adverse effect on our business, reputation, financial condition, results of operations and future growth prospects, as well as our ability to accomplish our strategic objectives. As a result, the trading price of our securities could decline, and you could lose all or part of your investment. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations and stock price.
RISK FACTORS
An investment in our securities involves a high degree of risk. Before deciding whether to invest in our securities, you should consider carefully the risks described below. You should carefully consider the risks described herein and the other information in this prospectus before you decide to invest in our securities. Such risks and uncertainties are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect us. If any of those risks were to occur, it could have a material adverse effect on our business, prospects, financial condition, results of operations and liquidity, and the market price of our securities would likely decline and you could lose all or part of your investment.
Risks Related to Our Finances and Business Plan
Since our transition to an environmental solutions company in January 2023, we lack an established operating history on which to evaluate our consolidated business and determine if we will be able to execute our business plan, and we can give no assurance that our operations will result in profits.
While we have conducted business operations since 2017, we commenced the transition to an environmental solutions company in January 2023 and consummated the acquisition of our Titan Trucking subsidiary and its various lines of business in May 2023 and our acquisition of SWS in May 2024. As a result, we have a limited operating history as a consolidated company upon which you may evaluate our business and prospects. Our business operations are subject to numerous risks, uncertainties, expenses and difficulties associated with early stage enterprises. You should consider an investment in our company in light of these risks, uncertainties, expenses and difficulties. Such risks include:
| ● | the absence of an operating history in our current line of business and at our current scale; |
| ● | our ability to raise capital to develop our business and fund our operations; |
| ● | expected continual losses for the foreseeable future; |
| ● | our ability to anticipate and adapt to developing markets; |
| ● | acceptance by customers; |
| ● | limited marketing experience; |
| ● | competition from competitors with substantially greater financial resources and assets; |
| ● | the ability to identify, attract and retain qualified personnel; |
| ● | our ability to provide superior customer service; and |
| ● | reliance on key personnel. |
Because we are subject to these risks, and the other risks discussed below, you may have a difficult time evaluating our business and your investment in our company.
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We have had a history of losses and may incur future losses, which may prevent us from attaining profitability.
We have incurred significant net losses since inception. Our net loss was approximately $21.5 million and $149.0 million for the years ended December 31, 2024 and 2023, respectively. Our net loss from continuing operations was approximately $10.4 million and $128.7 million for the years ended December 31, 2024 and 2023, respectively. As of December 31, 2024, we had an accumulated deficit of approximately $172.5 million. We may continue to incur significant losses in the future for a number of reasons, including unforeseen expenses, difficulties, complications, delays, and other unknown events.
We anticipate that our operating expenses will increase substantially in the foreseeable future as we undertake the acquisition and integration of additional entities, incur expenses associated with maintaining compliance as a public company, and increase marketing and sales efforts to increase our customer base. These increased expenditures may make it more difficult to achieve and maintain profitability. In addition, our efforts to grow our business may be more expensive than we expect, and we may not be able to generate sufficient revenue to offset increased operating expenses. If we are required to reduce our expenses, our growth strategy could be materially affected. We will need to generate and sustain significant revenue levels in future periods in order to become profitable, and, even if we do, we may not be able to maintain or increase our level of profitability.
Accordingly, we cannot assure you that we will achieve sustainable operating profits as we continue to expand our markets, service offerings and infrastructure, further develop our marketing efforts, and otherwise implement our growth initiatives. Any failure to achieve and maintain profitability would have a materially adverse effect on our ability to implement our business plan, our results and operations, and our financial condition.
If we are unable to obtain additional funding when needed, our business operations will be harmed, and if we do obtain additional financing, our then-existing stockholders may suffer substantial dilution.
As we take steps to grow our business through additional acquisitions, by entering into new markets or by expanding our service offerings, or as we respond to potential opportunities and/or adverse events, our working capital needs may change. We anticipate that if our cash and cash equivalents are insufficient to satisfy our liquidity requirements, we will require additional funding to sustain our ongoing operations and to continue our expansion strategies. We do not have any contracts or commitments for additional funding, and there can be no assurance that financing will be available in amounts or on terms acceptable to us, if at all, if needed. The inability to obtain additional capital will restrict our ability to grow and may reduce our ability to conduct business operations. If we are unable to obtain additional financing to finance a revised growth plan, we will likely be required to curtail such plans or cease our business operations in one or more markets. Any additional equity financing may involve substantial dilution to our then existing stockholders.
Raising capital in the future could cause dilution to our existing stockholders and may restrict our operations or require us to relinquish rights.
In the future, we may seek additional capital through a combination of private and public equity offerings, debt financings and collaborations and strategic and licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms may include liquidation or other preferences that adversely affect your rights as a stockholder. Debt financing, if available, would result in increased fixed payment obligations and may involve agreements that include covenants limiting or restricting our ability to take specific actions such as incurring debt, making capital expenditures or declaring dividends. If we raise additional funds through collaboration or strategic alliance arrangements with third parties, we may have to relinquish valuable rights to our future revenue streams or product candidates on terms that are not favorable to us.
Even if this offering is successful, if we do not obtain adequate capital funding or improve our financial performance, we may not be able to continue as a going concern.
We have incurred a net loss in each year since our inception and expect to incur losses in future periods as we continue to acquire additional waste management companies and increase our expenses in order to grow our business. These factors raise substantial doubt about our ability to continue as a going concern. If we are unable to obtain adequate funding or if we are unable to grow our revenue substantially to achieve and sustain profitability, we may not be able to continue as a going concern. The report of our independent registered public accounting firm for the years ended December 31, 2024 and 2023 included herein contains an explanatory paragraph indicating that there is substantial doubt as to our ability to continue as a going concern as a result of recurring losses from operations.
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If we are unable to raise additional capital when required or on acceptable terms, we may be required to significantly delay, scale back or restrict our operations and our acquisition program or obtain funds by entering into agreements on unattractive terms, which would likely have a material adverse effect on our business, stock price and our relationships with third parties with whom we have business relationships, at least until additional funding is obtained. If we do not have sufficient funds to continue operations, we could be required to seek bankruptcy protection or other alternatives that would likely result in our stockholders losing some or all of their investment in us. In addition, our ability to achieve profitability or to respond to competitive pressures would be significantly limited.
The amount and timing of our future funding requirements depends on many factors, including
| ● | the timing and cost of potential future acquisitions; |
| ● | integration of the businesses that we have acquired or may acquire in the future; and |
| ● | the hiring of additional management and other personnel as we continue to grow. |
We cannot be certain that additional funding will be available on acceptable terms, or at all. In addition, we have in the past and may in the future be restricted or limited by the terms of the credit facilities governing our indebtedness on our ability to enter into additional indebtedness and any future debt financing based upon covenants that restrict our operations, including limitations on our ability to incur liens or additional debt, pay dividends, redeem our stock, make certain investments and engage in certain merger, consolidation or asset sale transactions.
We have a holding company ownership structure and will depend on distributions from our operating subsidiaries to meet our obligations. Contractual or legal restrictions applicable to our subsidiaries could limit payments or distributions from them.
We are a holding company and derive all of our operating income from, and hold substantially all of our assets through, our subsidiaries. The effect of this structure is that we will depend on the earnings of our subsidiaries, and the payment or other distributions to us of these earnings, to meet our obligations and make capital expenditures. Provisions of U.S. corporate and tax law, like those requiring that dividends are paid only out of surplus, and provisions of any future indebtedness may limit the ability of our subsidiaries to make payments or other distributions to us. Additionally, in the event of the liquidation, dissolution or winding up of any of our subsidiaries, creditors of that subsidiary (including trade creditors) will generally be entitled to payment from the assets of that subsidiary before those assets can be distributed to us.
Risks Related to Our Acquisition Strategy
We have made and expect to continue to make acquisitions as a primary component of our growth strategy. We may not be able to identify suitable acquisition candidates or consummate acquisitions on acceptable terms, or at all, which could disrupt our operations and adversely impact our business and operating results.
A primary component of our growth strategy has been to acquire complementary businesses to grow our company. As a result, our rate of future growth and profitability is largely dependent on our ability to identify and acquire additional solid waste collection, transportation, and disposal businesses. We intend to continue to pursue acquisitions of complementary businesses, technologies and products to expand our operations and customer base and provide access to new markets and increase benefits of scale. This strategy involves risks inherent in assessing the values, strengths, weaknesses, risks, and profitability of acquisition candidates, including adverse short-term effects on our reported operating results, diversion of management’s attention, dependence on retaining, hiring and training key personnel, and risks associated with unanticipated problems or latent liabilities. Acquisitions also involve certain known and unknown risks that could cause our actual growth or operating results to differ from our expectations. For example:
| ● | we may not be able to identify suitable acquisition candidates or to consummate acquisitions on acceptable terms; |
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| ● | we compete with others to acquire complementary products, technologies and businesses, which may result in decreased availability of, or increased price for, suitable acquisition candidates; |
| ● | we may not be able to obtain the necessary financing, on favorable terms or at all, to finance any or all of our potential acquisitions; and |
| ● | we may ultimately fail to consummate an acquisition even if we announce that we plan to acquire a technology, product or business. |
Increased competition for acquisition targets in our industry may affect the availability of acquisition targets, which could adversely affect our growth.
Increased competition for acquisition candidates may result in fewer acquisition opportunities being made available to us as well as less advantageous acquisition terms, which may increase acquisition costs to levels that are beyond our financial capability or, if consummated, that may have an adverse effect on our business and results of operations. Accordingly, no assurance can be given as to the number or timing of our acquisitions or as to the availability of financing necessary to complete an acquisition. We also believe that a significant factor in our ability to consummate acquisitions will be the attractiveness of our common stock as an investment to potential acquisition candidates. Such attractiveness may, in large part, be dependent upon the market price and capital appreciation prospects of our common stock compared to the equity securities of our competitors. Many of our competitors for acquisitions are larger, more established companies with significantly greater capital resources than us and whose equity securities may be more attractive than our common stock. To the extent our common stock is less attractive to acquisition candidates, our acquisition program may be adversely affected.
Our ability to acquire additional businesses may require us to raise capital through the sale of equity and/or debt securities, which we may be unable to do on acceptable terms.
The timing, size and success of our acquisition efforts and the associated capital commitments cannot be readily predicted. We intend to use our common stock, cash, debt and borrowings under our credit facility, if necessary, as consideration for future acquisitions of companies. The issuance of additional common stock in connection with future acquisitions may be dilutive to holders of our outstanding shares of common stock. In addition, if our common stock does not maintain a sufficient market value or potential acquisition candidates are unwilling to accept common stock as part of the consideration for the sale of their businesses, we may be required to use more of our cash resources, including obtaining additional capital through debt financing. However, there can be no assurance that we will be able to obtain financing if and when it is needed or that it will be available on terms that we deem acceptable. If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce or eliminate some or all of our research and development programs or commercialization efforts. As a result, we may be unable to pursue our acquisition strategy successfully, which may prevent us from achieving our growth objectives.
We may be unable to successfully integrate acquisitions, which may adversely impact our operations.
Acquired businesses, technologies or products may not perform as we expect and we may fail to realize anticipated revenue and profits. In addition, our acquisition strategy may divert management’s attention away from our existing business, resulting in the loss of key customers or employees, and expose us to unanticipated problems or legal liabilities, including responsibility as a successor for undisclosed or contingent liabilities of acquired businesses or assets.
If we fail to conduct due diligence on our potential targets effectively, we may, for example, not identify problems at target companies or fail to recognize incompatibilities or other obstacles to successful integration. Our inability to successfully integrate future acquisitions could impede us from realizing all of the benefits of those acquisitions and could severely weaken our business operations. The integration process may disrupt our business and, if new businesses, technologies or products are not integrated or implemented effectively, may preclude the realization of the full benefits expected by us and could harm our results of operations. In addition, the overall integration of new technologies, products or businesses may result in unanticipated problems, expenses, liabilities and competitive responses. The difficulties integrating an acquisition include, among other things:
| ● | issues in integrating the target company’s technologies, products or businesses with ours; |
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| ● | incompatibility of marketing and administration methods; |
| ● | maintaining employee morale and retaining key employees; |
| ● | integrating the cultures of our companies; |
| ● | preserving important strategic customer relationships; |
| ● | consolidating corporate and administrative infrastructures and eliminating duplicative operations; and |
| ● | coordinating and integrating geographically separate organizations. |
In addition, even if the operations of an acquisition are integrated successfully, we may not realize the full benefits of the acquisition, including the synergies, cost savings or growth opportunities, that we expect. These benefits may not be achieved within the anticipated time frame, or at all.
Acquisitions that we complete may have an adverse impact on our results of operations.
Acquisitions may cause us to:
| ● | issue common stock that would dilute our current stockholders’ ownership percentage; |
| ● | use a substantial portion of our cash resources; |
| ● | increase our interest expense, leverage and debt service requirements if we incur additional debt to pay for an acquisition; |
| ● | assume liabilities for which we do not have indemnification from the former owners; further, indemnification obligations may be subject to dispute or concerns regarding the creditworthiness of the former owners; |
| ● | record goodwill and non-amortizable intangible assets that are subject to impairment testing and potential impairment charges; |
| ● | experience volatility in earnings due to changes in contingent consideration related to acquisition earn-out liability estimates; |
| ● | incur amortization expenses related to certain intangible assets; |
| ● | lose existing or potential contracts as a result of conflict-of-interest issues; |
| ● | become subject to adverse tax consequences or deferred compensation charges; |
| ● | incur large and immediate write-offs; or |
| ● | become subject to litigation. |
The occurrence of any or all of the above risks could materially and adversely affect our business, operating results and financial condition.
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We may be subject to claims arising from the operations of our various businesses for periods prior to the dates we acquired them.
We may be subject to claims or liabilities arising from the ownership or operation of acquired businesses for the periods prior to our acquisition of them, including environmental, warranty, workers’ compensation and other employee-related claims or liabilities and other liabilities and claims not covered by insurance. These claims or liabilities could be significant. Our ability to seek indemnification from the former owners of our acquired businesses for these claims or liabilities may be limited by various factors, including the specific time, monetary or other limitations contained in the respective acquisition agreements and the financial ability of the former owners to satisfy our indemnification claims. In addition, insurance companies may be unwilling to cover claims that have arisen from acquired businesses or locations, or claims may exceed the coverage limits that our acquired businesses had in effect prior to the date of acquisition. If we are unable to successfully obtain insurance coverage of third-party claims or enforce our indemnification rights against the former owners, or if the former owners are unable to satisfy their obligations for any reason, including because of their current financial position, we could be held liable for the costs or obligations associated with such claims or liabilities, which could adversely affect our financial condition and results of operations.
Our resources may not be sufficient to manage our expected growth and the failure to properly manage our potential growth would be detrimental to our business.
We may fail to adequately manage our anticipated future growth. Any growth in our operations will place a significant strain on our administrative, financial and operational resources and increase demands on our management and on our operational and administrative systems, controls and other resources. We cannot assure you that our existing personnel, systems, procedures or controls will be adequate to support our operations in the future or that we will be able to successfully implement appropriate measures consistent with our growth strategy. As part of this growth, we may have to implement new operational and financial systems, procedures and controls to expand, train and manage our employee base, and maintain close coordination among our technical, accounting, finance, marketing and sales. We cannot guarantee that we will be able to do so, or that if we are able to do so, we will be able to effectively integrate them into our existing staff and systems. There may be greater strain on our systems as we acquire new businesses, requiring us to devote significant management time and expense to the ongoing integration and alignment of management, systems, controls and marketing. If we are unable to manage growth effectively, such as if our sales and marketing efforts exceed our capacity to design and produce our products and services or if new employees are unable to achieve performance levels, our business, operating results and financial condition could be materially and adversely affected.
Risks Related to our Business and Industry
We are subject to environmental and safety laws that restrict our operations and increase our costs.
We are subject to extensive federal, state and local laws and regulations relating to environmental protection and occupational safety and health. These include, among other things, laws and regulations governing the use, treatment, storage and disposal of wastes and materials, air quality, water quality and the remediation of contamination associated with the release of hazardous substances. Our compliance with existing regulatory requirements is costly, and continued changes in these regulations could increase our compliance costs. Government laws and regulations often require us to enhance or replace our equipment. We are required to obtain and maintain permits that are subject to strict regulatory requirements and are difficult and costly to obtain and maintain. We may be unable to implement price increases sufficient to offset the cost of complying with these laws and regulations. In addition, regulatory changes could accelerate or increase expenditures for closure and post-closure monitoring at solid waste facilities and obligate us to spend sums over the amounts that we have accrued. In order to develop, expand or operate a landfill or other waste management facility, we must have various facility permits and other governmental approvals, including those relating to zoning, environmental protection and land use. The permits and approvals are often difficult, time consuming and costly to obtain and could contain conditions that limit our operations.
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We may become subject to environmental clean-up costs or litigation that could curtail our business operations and materially decrease our earnings.
The Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, or CERCLA, and analogous state laws provide for the remediation of contaminated facilities and impose strict joint and several liability for remediation costs on current and former owners or operators of a facility at which there has been a release or a threatened release of a hazardous substance. This liability is also imposed on persons who arrange for the disposal of, and who transport, such substances to the facility. Hundreds of substances are defined as hazardous under CERCLA and their presence, even in small amounts, can result in substantial liability. The expense of conducting a cleanup can be significant. Notwithstanding our efforts to comply with applicable regulations and to avoid transporting and receiving hazardous substances, we may have liability because these substances may be present in waste collected by us. The actual costs for these liabilities could be significantly greater than the amounts that we might be required to accrue on our financial statements from time to time.
In addition to the costs of complying with environmental regulations, we may incur costs to defend against litigation brought by government agencies and private parties. As a result, we may be required to pay fines or our permits and licenses may be modified or revoked. We may in the future be a defendant in lawsuits brought by governmental agencies and private parties who assert claims alleging environmental damage, personal injury, property damage and/or violations of permits and licenses by us. A significant judgment against us, the loss of a significant permit or license or the imposition of a significant fine could curtail our business operations and may decrease our earnings.
Our business is capital intensive, requiring ongoing cash outlays that may strain or consume our available capital and force us to sell assets, incur debt, or sell equity on unfavorable terms.
Our ability to remain competitive, grow and maintain our operations largely depends on our cash flow from operations and access to capital. Maintaining our existing operations and expanding them through internal growth or acquisitions requires large capital expenditures. As we undertake more acquisitions and further expand our operations, the amount we expend on capital will increase. These increases in expenditures may result in lower levels of working capital or require us to finance working capital deficits. We intend to continue to fund our cash needs through cash flow from operations, equity and debt financings and borrowings under our credit facility, if necessary. However, particularly in the short term, we will require additional equity or debt financing to fund our growth.
We do not have complete control over our future performance because it is subject to general economic, political, financial, competitive, legislative, regulatory and other factors. It is possible that our business may not generate sufficient cash flow from operations, and we may not otherwise have the capital resources, to allow us to make necessary capital expenditures. If this occurs, we may have to sell assets, restructure our debt or obtain additional equity capital, which could be dilutive to our stockholders. We may not be able to take any of the foregoing actions, and we may not be able to do so on terms favorable to us or our stockholders.
Our business operations are currently concentrated in the State of Michigan and such geographic concentration of our business could adversely affect our business and financial condition.
Our business operations and customers are located in Michigan, and we expect to focus our operations on the Midwestern U.S. for at least the foreseeable future and possibly in the Northeast and Southeast regions of the United States if we are able to identify opportunistic acquisitions in those regions. As of December 31, 2024, approximately 84% of our total annualized revenues were derived from customers located in Michigan. Therefore, our business, financial condition and results of operations are susceptible to downturns in the general economy in the Midwestern U.S., particularly in Michigan, and other factors affecting the region, such as state regulations affecting the solid waste services industry and severe weather conditions. In addition, the costs and time involved in permitting, and the scarcity of, available landfills in the Midwestern U.S. could make it difficult for us to expand vertically in those markets. There can be no assurance that we will complete a sufficient number of acquisitions in other markets to lessen our geographic concentration.
We currently depend on a limited number of customers for our revenue.
During the year ended December 31, 2024, one customer accounted for approximately 11% of our total revenues. During the year ended December 31, 2023, one customer of accounted for approximately 38% of our total revenues generated. No other customer accounted for more than 10% of our revenues in any of those periods. We have no long-term agreements with any of the customers that accounted for more than 10% of our revenues in any of those periods.
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Because we depend on these customers for a significant percentage of our revenue, a loss of one or more of these customers could materially adversely affect our business and financial condition. If these principal customers cease using our services, our business could be materially adversely affected.
Governmental authorities may enact climate change regulations that could increase our costs to operate.
Environmental advocacy groups and regulatory agencies in the United States have been focusing considerable attention on the emissions of greenhouse gases and their potential role in climate change. Congress has considered recent proposed legislation directed at reducing greenhouse gas emissions and the U.S. Environmental Protection Agency (the “EPA”) has proposed rules to regulate greenhouse gases. Regional initiatives have formed to control greenhouse gases and certain of the states in which we plan to operate are contemplating air pollution control regulations that are more stringent than existing and proposed federal regulations, in particular the regulation of emissions of greenhouse gases. The adoption of laws and regulations to implement controls of greenhouse gases, including the imposition of fees or taxes, could adversely affect our collection operations. Changing environmental regulations could require us to take any number of actions, including the purchase of emission allowances or installation of additional pollution control technology, and could make some operations less profitable, which could adversely affect our results of operations.
Our operations are subject to environmental, health and safety laws and regulations, as well as contractual obligations that may result in significant liabilities.
We risk incurring significant environmental liabilities in connection with our use, treatment, storage, transfer and disposal of waste materials. Under applicable environmental laws and regulations, we could be liable if our operations are found to cause environmental damage to our properties or to the property of other landowners, particularly as a result of the contamination of air, drinking water or soil. Under current law, we could also be held liable for damage caused by conditions that existed before we acquired the assets or operations involved. This risk is of particular concern as we execute our growth strategy, partially though acquisitions, because we may be unsuccessful in identifying and assessing potential liabilities during our due diligence investigations. Further, the counterparties in such transactions may be unable to perform their indemnification obligations owed to us. Additionally, we could be liable if we arrange for the transportation, disposal or treatment of hazardous substances that cause environmental contamination, or if a predecessor owner made such arrangements and, under applicable law, we are treated as a successor to the prior owner. Any substantial liability for environmental damage could have a material adverse effect on our financial condition, results of operations and cash flows.
Our business is subject to operational and safety risks, including the risk of personal injury to employees and others.
Providing environmental and waste management services involves risks such as vehicular accidents and equipment defects, malfunctions and failures. Additionally, there are risks associated with waste mass instability and releases of hazardous materials or odors. There may also be risks presented by the potential for subsurface chemical reactions causing elevated landfill temperatures and increased production of leachate, landfill gas and odors. Any of these risks could potentially result in injury or death of employees and others, a need to shut down or reduce operation of facilities, increased operating expense and exposure to liability for pollution and other environmental damage, and property damage or destruction.
While we seek to minimize our exposure to such risks through comprehensive training, compliance and response and recovery programs, as well as vehicle and equipment maintenance programs, if we were to incur substantial liabilities in excess of any applicable insurance, our business, results of operations and financial condition could be adversely affected. Any such incidents could also adversely impact our reputation and reduce the value of our brand. Additionally, a major operational failure, even if suffered by a competitor, may bring enhanced scrutiny and regulation of our industry, with a corresponding increase in operating expense.
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Increases in the costs of fuel may reduce our operating margins.
The price and supply of fuel needed to run our collection vehicles is unpredictable and fluctuates based on events outside our control, including geopolitical developments, supply and demand for oil and gas, actions by the Organization of Petroleum Exporting Countries (OPEC) and other oil and gas producers, war and unrest in oil producing countries, regional production patterns and environmental concerns. Any significant price escalations or reductions in the supply could increase our operating expenses or interrupt or curtail our operations. Failure to offset all or a portion of any increased fuel costs through increased fees or charges would reduce our operating margins.
Increases in the costs of disposal may reduce our operating margins.
Historically, we have disposed of all of the waste that we collected in landfills operated by third parties under informal arrangements or without long-term contracts. If these third parties increase their disposal fees and we are unable to pass along the increase to our customers, our operating margins would be adversely impacted. In addition, if these third parties discontinue their arrangements with us and we are unable to locate alternative disposal sites, our business and results of operations would be materially adversely affected.
Increases in the costs of labor may reduce our operating margins.
We compete with other businesses in our markets for qualified employees. A shortage of qualified employees would require us to enhance our wage and benefits packages to compete more effectively for employees or to hire more expensive temporary employees. Labor is our second largest operating cost, and even relatively small increases in labor costs per employee could materially affect our cost structure. Failure to attract and retain qualified employees, to control our labor costs, or to recover any increased labor costs through increased prices we charge for our services or otherwise offset such increases with cost savings in other areas may reduce our operating margins.
Increases in costs of insurance may reduce our operating margins.
One of our largest operating costs is maintaining insurance coverage, including general liability, automobile physical damage and liability, property, employment practices, pollution, directors and officers, fiduciary, workers’ compensation and employer’s liability coverage, as well as umbrella liability policies to provide excess coverage over the underlying limits contained in our primary general liability, automobile liability and employer’s liability policies. Changes in our operating experience, such as an increase in accidents or lawsuits or a catastrophic loss, could cause our insurance costs to increase significantly or could cause us to be unable to obtain certain insurance. Increases in insurance costs would reduce our operating margins. Changes in our industry and perceived risks in our business could have a similar effect.
We may not be able to maintain sufficient insurance coverage to cover the risks associated with our operations, which could result in uninsured losses that would adversely affect our financial condition.
Integrated non-hazardous waste companies are exposed to a variety of risks that are typically covered by insurance arrangements. However, we may not be able to maintain sufficient insurance coverage to cover the risks associated with our operations for a variety of reasons. Increases in insurance costs and changes in the insurance markets may, given our resources, limit the coverage that we are able to maintain or prevent us from insuring against certain risks. Large or unexpected losses may exceed our policy limits, adversely affecting our results of operations, and may result in the termination or limitation of coverage, exposing us to uninsured losses, thereby adversely affecting our financial condition.
Our failure to remain competitive with our numerous competitors, many of whom have greater resources than we do, could adversely affect our ability to retain existing customers and obtain future business.
Because our industry is highly competitive, we compete with large companies and municipalities, many of whom have greater financial and operational resources than we do. The non-hazardous solid waste collection and disposal industry includes large national, publicly-traded waste management companies; regional, publicly-held and privately-owned companies; and numerous small, local, privately-owned companies. Additionally, many counties and municipalities operate their own waste collection and disposal facilities and have competitive advantages not available to private enterprises. If we are unable to successfully compete against our competitors, our ability to retain existing customers and obtain future business could be adversely affected.
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We may lose contracts through competitive bidding, early termination or governmental action, or we may have to substantially lower prices in order to retain certain contracts, any of which would cause our revenue and our operating margins to decline.
We are parties to contracts with municipalities and other associations and agencies. Many of these contracts are or will be subject to competitive bidding. We may not be the successful bidder, or we may have to substantially lower prices in order to be the successful bidder. In addition, some of our customers may terminate their contracts with us before the end of the contract term. If we were not able to replace revenue from contracts lost through competitive bidding or early termination or from lowering prices or from the renegotiation of existing contracts with other revenue within a reasonable time period, our revenue could decline.
Efforts by labor unions to organize our employees could divert management attention and increase our operating expenses.
We do not have any union representation in our operations. Groups of employees may seek union representation in the future, and the negotiation of collective bargaining agreements could divert management attention and result in increased operating expenses and lower net income. If we are unable to negotiate acceptable collective bargaining agreements, we might have to wait through “cooling off” periods, which are often followed by union-initiated work stoppages, including strikes. Depending on the type and duration of these work stoppages, our operating expenses could increase significantly.
Poor decisions by our regional and local managers could result in the loss of customers or an increase in costs, or adversely affect our ability to obtain future business.
We manage our operations on a decentralized basis. Therefore, regional and local managers have the authority to make many decisions concerning their operations without obtaining prior approval from our executive officers. Poor decisions by regional or local managers could result in the loss of customers or an increase in costs, or adversely affect our ability to obtain future business.
We are vulnerable to factors affecting our local markets, which could adversely affect our stock price relative to our competitors.
Because the non-hazardous waste business is local in nature, our business in one or more regions or local markets may be adversely affected by events and economic conditions relating to those regions or markets even if the other regions of the country are not affected. As a result, our financial performance may not compare favorably to our competitors with operations in other regions, and our stock price could be adversely affected by our inability to compete effectively with our competitors.
Seasonal fluctuations will cause our business and results of operations to vary among quarters, which could adversely affect our stock price.
Based on historic trends experienced by the businesses we have acquired, we expect our operating results to vary seasonally, with revenue typically lowest in the first quarter, higher in the second and third quarters, and again lower in the fourth quarter. Our operating revenues tend to be somewhat higher in the summer months, primarily due to the higher construction and demolition waste volumes. This seasonality also generally reflects the lower volume of waste during the winter months. Adverse weather conditions negatively affect waste collection productivity, resulting in higher labor and operational costs. The general increase in precipitation during the winter months increases the weight of collected waste, resulting in higher disposal costs, as costs are often calculated on a per ton basis. Because of these factors, we expect operating income to be generally lower in the winter months. As a result, our operating results may be negatively affected by these variations. Additionally, severe weather during any time of the year can negatively affect the costs of collection and disposal and may cause temporary suspensions of our collection services. Long periods of inclement weather may interfere with collection operations and reduce the volume of waste generated by our customers. Any of these conditions can adversely affect our business and results of operations, which could negatively affect our stock price.
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We are dependent on our management team and development and operations personnel, and the loss of one or more key employees or groups could harm our business and prevent us from implementing our business plan in a timely manner.
Our success depends substantially upon the continued services of our executive officers and other key members of management, particularly our chief executive officer, Mr. Glen Miller. From time to time, there may be changes in our executive management team resulting from the hiring or departure of executives. Such changes in our executive management team may be disruptive to our business. We are also substantially dependent on the continued service of our existing development and operations personnel because of the complexity of our service and technologies. While we have an employment agreement with Mr. Miller, we do not maintain a key person life insurance policy on such officer. The loss of one or more of our key employees or groups could seriously harm our business.
We have identified certain material weaknesses in our internal controls, which could cause stockholders and prospective investors to lose confidence in the reliability of our financing reporting.
Based upon the evaluation of the disclosure controls and procedures at the end of the period covered by this report, our chief executive officer and our chief financial officer concluded that our disclosure controls and procedures were not effective as a result of continuing weaknesses in our internal control over financial reporting principally due to the following: (i) we have not established adequate financial reporting processes or monitoring activities to ensure adequate financial reporting and to mitigate the risk of management override, specifically because there are few employees and only two officers with management functions and therefore there is lack of segregation of duties; (ii) an outside consultant assists in the preparation of the annual and quarterly financial statements and partners with us to ensure compliance with U.S. GAAP and SEC disclosure requirements; and (iii) we did not maintain a sufficient complement of qualified accounting personnel and controls associated with segregation of duties over complex transactions.
If we fail to maintain an effective system of internal controls, we may not be able to accurately report financial results or prevent fraud. As a result, current and potential stockholders could lose confidence in our company’s financial reporting that could harm the trading price of our shares, if a trading market does develop.
We need additional capital to develop our business.
The development of our services will require the commitment of substantial resources to implement our business plan. In addition, substantial expenditures will be required to enable us to compete for and complete projects in the future. We currently have no additional borrowing capacity under our existing credit agreement, and it is likely we will need to seek additional financing through subsequent future private or public offerings of our equity securities or through strategic partnerships and other arrangements with corporate partners.
We cannot give you any assurance that any additional financing will be available to us, or if available, will be on terms favorable to us. The sale of additional equity securities will result in dilution to our stockholders. The occurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financing covenants that would restrict our operations. If adequate additional financing is not available on acceptable terms, we may not be able to implement our business development plan or continue our business operations.
Risks Related to Ownership of our Common Stock
You may experience dilution of your ownership interest because of the future issuance of additional shares of our common stock and because of our preferred stock and outstanding rights to acquire common stock and warrants.
Our authorized capital stock is 425,000,000 shares, of which 400,000,000 shares are designated as common stock and 25,000,000 shares are designated as preferred stock, of which 1,567,900 shares are designated Series A Convertible Preferred Stock, 1,360,000 shares are designated Series B Convertible Preferred Stock, 6,500,000 shares are designated as Series C Convertible Preferred Stock and the remaining shares are “blank check” preferred stock.
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In the future, we expect to issue our authorized but previously unissued equity securities in connection with future financings, resulting in the dilution of the ownership interests of our present stockholders. We may also issue additional shares of our common stock or other securities that are convertible into or exercisable for common stock in connection with hiring or retaining employees or consultants, future acquisitions, future sales of our securities for capital raising purposes, or for other business purposes. The future issuance of any such additional shares of our common stock or other securities may create downward pressure on the trading price of our common stock. There can be no assurance that we will not be required to issue additional shares, warrants or other convertible securities in the future in conjunction with hiring or retaining employees or consultants, future acquisitions, future sales of our securities for capital raising purposes or for other business purposes, including at a price (or exercise prices) below the price at which shares of our common stock are trading.
Under any of the circumstances described above, future issuances or conversions may depress the market price of our common stock, and may impair our ability to raise additional capital in the financial markets at a time and price favorable to us. The effect of this dilution may, in turn, cause the price of our common stock to decrease further, both because of the downward pressure on our stock price that may be caused by a large number of sales of our shares into the public market by our preferred holders, and because our other existing stockholders may, in response, decide to sell additional shares of our common stock, further decreasing our stock price.
The market price of our common stock is likely to be volatile and could subject us to litigation.
The market price of our common stock has been and is likely to continue to be subject to wide fluctuations. Factors affecting the market price of our common stock include:
| ● | variations in our operating results, earnings per share, cash flows from operating activities, deferred revenue, and other financial metrics and non-financial metrics, and how those results compare to analyst expectations; |
| ● | overall conditions in our industry and market; |
| ● | issuances of new stock which dilutes earnings per share; |
| ● | addition or loss of significant customers; |
| ● | changes in laws or regulations applicable to our products; |
| ● | actual or anticipated changes in our growth rate relative to our competitors; |
| ● | forward-looking guidance to industry and financial analysts related to future revenue and earnings per share; |
| ● | the net increases in the number of customers and paying subscriptions, either independently or as compared with published expectations of industry, financial or other analysts that cover our company; |
| ● | changes in the estimates of our operating results or changes in recommendations by securities analysts that elect to follow our common stock; |
| ● | announcements of technological innovations, new services or service enhancements, strategic alliances or significant agreements by us or by our competitors; |
| ● | announcement or expectation of additional financing efforts; |
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| ● | announcements by us or by our competitors of mergers or other strategic acquisitions, or rumors of such transactions involving us or our competitors; |
| ● | announcements of customer additions and customer cancellations or delays in customer contracts; |
| ● | recruitment or departure of key personnel; |
| ● | trading activity by a limited number of stockholders who together beneficially own a significant percentage of our outstanding common stock; and |
| ● | general economic and market conditions. |
Any of these factors, as well as broader market and industry factors, may result in large and sudden changes in the trading volume of our common stock and could seriously harm the market price of our common stock, regardless of our operating performance. This may prevent you from being able to sell your shares at or above the price you paid for your shares of our common stock, if at all. In addition, following periods of volatility in the market price of a company’s securities, stockholders often institute securities class action litigation against that company. Our involvement in any class action suit or other legal proceeding could divert our senior management’s attention and could adversely affect our business, financial condition, results of operations and prospects.
There is currently only a limited public market for our common stock. Failure to develop or maintain a trading market could negatively affect the value of our common stock and make it difficult or impossible for you to sell any shares of our common stock that you hold.
There is currently only a limited public market for our common stock and an active public market for our common stock may not develop or be sustained. Failure to develop or maintain an active trading market could make it difficult for you to sell your shares without depressing the market price for our common stock or recover any part of your investment in us. Even if an active market for our common stock does develop, the market price of our common stock may be highly volatile. In addition to the uncertainties relating to future operating performance and the profitability of operations, factors such as variations in interim financial results or various, as yet unpredictable, factors, many of which are beyond our control, may have a negative effect on the market price of our common stock. Further, quotes for shares of our common stock on the OTCQB may not be indicative of the market price on a national securities exchange.
Our shares are subject to the penny stock rules, which makes it difficult to trade our shares.
The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or authorized for quotation on certain automated quotation systems, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. If we do not obtain and retain a listing on a national stock exchange and if the price of our common stock is less than $5.00, our common stock will be deemed a penny stock. The penny stock rules require a broker-dealer, before a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document containing specified information. In addition, the penny stock rules require that before effecting any transaction in a penny stock not otherwise exempt from those rules, a broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive (i) the purchaser’s written acknowledgment of the receipt of a risk disclosure statement; (ii) a written agreement to transactions involving penny stocks; and (iii) a signed and dated copy of a written suitability statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our common stock, and therefore stockholders may have difficulty selling their shares.
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There may be restrictions on your ability to resell shares of common stock under Rule 144.
Currently, Rule 144 under the Securities Act permits the public resale of securities under certain conditions after a six or twelve month holding period by the seller, including requirements with respect to the manner of sale, sales volume restrictions, filing requirements and a requirement that certain information about the issuer is publicly available. At the time that stockholders intend to resell their shares under Rule 144, there can be no assurances that we will be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or, if so, current in our reporting requirements under the Exchange Act, in order for stockholders to be eligible to rely on Rule 144 at such time. In addition to the foregoing requirements of Rule 144 under the Federal securities laws, the various state securities laws may impose further restrictions on the ability of a holder to sell or transfer the shares of common stock.
Sales of our currently issued and outstanding stock may become freely tradable pursuant to Rule 144 and may dilute the market for your shares and have a depressive effect on the price of the shares of our common stock.
A substantial majority of our outstanding shares of common stock are “restricted securities” within the meaning of Rule 144 under the Securities Act. As restricted shares, these shares may be resold only pursuant to an effective registration statement or under the requirements of Rule 144 or other applicable exemptions from registration under the Securities Act and as required under applicable state securities laws. Rule 144 provides in essence that an affiliate (as such term is defined in Rule 144(a)(1)) of an issuer who has held restricted securities for a period of at least six months (one year after filing Form 10 information with the SEC for shell companies and former shell companies) may, under certain conditions, sell every three months, in brokerage transactions, a number of shares that does not exceed the greater of 1% of an issuer’s outstanding shares of common stock or the average weekly trading volume during the four calendar weeks prior to the sale. Rule 144 also permits, under certain circumstances, the sale of securities, without any limitation, by a person who is not an affiliate of the issuer and who has satisfied a one-year holding period. A sale under Rule 144 or under any other exemption from the Securities Act, if available, or pursuant to subsequent registrations of our shares of common stock, may have a depressive effect upon the price of our shares of common stock in any active market that may develop.
Possible adverse effect of issuance of preferred stock.
Our articles of incorporation authorize the issuance of 25,000,000 shares of preferred stock, of which 15,572,100 shares are “blank check” preferred stock available for issuance, with designations, rights and preferences as determined from time to time by our board of directors. As a result of the foregoing, our board can issue, without further stockholder approval, preferred stock with dividend, liquidation, conversion, voting or other rights that could adversely affect the voting power or other rights of the holders of common stock. The issuance of preferred stock could, under certain circumstances, discourage, delay or prevent a change in control of our company.
We do not expect to pay dividends on our common stock and investors should not buy our common stock expecting to receive dividends.
We have not paid any dividends on our common stock in the past, and do not anticipate that we will declare or pay any dividends on our common stock in the foreseeable future. Consequently, investors will only realize an economic gain on their investment in our common stock if the price appreciates. Investors should not purchase our common stock expecting to receive cash dividends. Because we do not pay dividends on our common stock, and there may be limited trading, investors may not have any manner to liquidate or receive any payment on their investment. Therefore, our failure to pay dividends may cause investors to not see any return on investment even if we are successful in our business operations. Because we do not pay dividends on our common stock, we may have trouble raising additional funds, which could affect our ability to expand our business operations.
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We may need to raise additional capital in the future. Additional capital may not be available to us on reasonable terms, if at all, when or as we require. If we issue additional shares of our common stock or other securities that may be convertible into, or exercisable or exchangeable for, our common stock, our existing stockholders would experience further dilution and could trigger anti-dilution provisions in outstanding warrants.
We may need to raise additional capital in the future for acquisitions or other purposes. Future financings may involve the issuance of debt, equity and/or securities convertible into or exercisable or exchangeable for our equity securities. These financings may not be available to us on reasonable terms or at all when and as we require funding. If we are able to consummate such financings, the trading price of our common stock could be adversely affected and/or the terms of such financings may adversely affect the interests of our existing stockholders. Any failure to obtain additional working capital when required would have a material adverse effect on our business and financial condition and may result in a decline in our stock price. Any issuances of our common stock, preferred stock, or securities such as warrants or notes that are convertible into, exercisable or exchangeable for, our capital stock, would have a dilutive effect on the voting and economic interest of our existing stockholders.
Our officers and directors are entitled to indemnification from us for liabilities under our articles of incorporation, which could be costly to us and may discourage the exercise of stockholder rights.
Our articles of incorporation provide that we possess and may exercise all powers of indemnification of our officers, directors, employees, agents and other persons and our bylaws also require us to indemnify our officers and directors as permitted under the provisions of the Nevada Revised Statutes (“NRS”). We will also have contractual indemnification obligations under our agreements with our directors and officers. The foregoing indemnification obligations could result in our company incurring substantial expenditures to cover the cost of settlement or damage awards against directors and officers. These provisions and resultant costs may also discourage our company from bringing a lawsuit against directors, officers and employees for breaches of their fiduciary duties, and may similarly discourage the filing of derivative litigation by our stockholders against our directors, officers and employees even though such actions, if successful, might otherwise benefit our company and stockholders.
Our bylaws and Nevada law may discourage, delay or prevent a change of control of our company or changes in our management, which could have the result of depressing the trading price of our common stock.
Certain anti-takeover provisions of Nevada law could have the effect of delaying or preventing a third party from acquiring us, even if the acquisition arguably could benefit our stockholders.
Nevada’s “combinations with interested stockholders” statutes, NRS 78.411 through 78.444, inclusive, prohibit specified types of business “combinations” between certain Nevada corporations and any person deemed to be an “interested stockholder” for two years after such person first becomes an “interested stockholder” unless the corporation’s board of directors approves the combination, or the transaction by which such person becomes an “interested stockholder”, in advance, or unless the combination is approved by the board of directors and sixty percent of the corporation’s voting power not beneficially owned by the interested stockholder, its affiliates and associates. Further, in the absence of prior approval certain restrictions may apply even after such two-year period. However, these statutes do not apply to any combination of a corporation and an interested stockholder after the expiration of four years after the person first became an interested stockholder. For purposes of these statutes, an “interested stockholder” is any person who is (1) the beneficial owner, directly or indirectly, of ten percent or more of the voting power of the outstanding voting shares of the corporation, or (2) an affiliate or associate of the corporation and at any time within the two previous years was the beneficial owner, directly or indirectly, of ten percent or more of the voting power of the then outstanding shares of the corporation. The definition of the term “combination” is sufficiently broad to cover most significant transactions between a corporation and an “interested stockholder.” These statutes generally apply to Nevada corporations with 200 or more stockholders of record. However, a Nevada corporation may elect in its articles of incorporation not to be governed by these particular laws, but if such election is not made in the corporation’s original articles of incorporation, the amendment (1) must be approved by the affirmative vote of the holders of stock representing a majority of the outstanding voting power of the corporation not beneficially owned by interested stockholders or their affiliates and associates, and (2) is not effective until 18 months after the vote approving the amendment and does not apply to any combination with a person who first became an interested stockholder on or before the effective date of the amendment. We did not make such an election in our articles of incorporation and have not amended our articles of incorporation to so elect.
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Nevada’s “acquisition of controlling interest” statutes, NRS 78.378 through 78.3793, inclusive, contain provisions governing the acquisition of a controlling interest in certain Nevada corporations. These “control share” laws provide generally that any person that acquires a “controlling interest” in certain Nevada corporations may be denied voting rights, unless a majority of the disinterested stockholders of the corporation elects to restore such voting rights. Our bylaws provide that these statutes do not apply to us or any acquisition of our common stock. Absent such provision in our bylaws, these laws would apply to us as of a particular date if we were to have 200 or more stockholders of record (at least 100 of whom have addresses in Nevada appearing on our stock ledger at all times during the 90 days immediately preceding that date) and do business in the State of Nevada directly or through an affiliated corporation, unless our articles of incorporation or bylaws in effect on the tenth day after the acquisition of a controlling interest provide otherwise. These laws provide that a person acquires a “controlling interest” whenever a person acquires shares of a subject corporation that, but for the application of these provisions of the NRS, would enable that person to exercise (1) one fifth or more, but less than one third, (2) one third or more, but less than a majority or (3) a majority or more, of all of the voting power of the corporation in the election of directors. Once an acquirer crosses one of these thresholds, shares which it acquired in the transaction taking it over the threshold and within the 90 days immediately preceding the date when the acquiring person acquired or offered to acquire a controlling interest become “control shares” to which the voting restrictions described above apply.
Various provisions of our bylaws may delay, defer or prevent a tender offer or takeover attempt of us that a stockholder might consider in his or her best interest. Our bylaws may be adopted, amended or repealed by the affirmative vote of the holders of at least a majority of our outstanding shares of capital stock entitled to vote for the election of directors, and except as provided by Nevada law, our board of directors shall have the power to adopt, amend or repeal the bylaws by a vote of not less than a majority of our directors. The interests of these stockholders and directors may not be consistent with your interests, and they may make changes to the bylaws that are not in line with your concerns.
Nevada law also provides that directors may resist a change or potential change in control if the directors determine that the change is opposed to, or not in the best interests of, the corporation. The existence of the foregoing provisions and other potential anti-takeover measures could limit the price that investors might be willing to pay in the future for shares of our common stock. They could also deter potential acquirers of our company, thereby reducing the likelihood that you could receive a premium for your common stock in an acquisition.
| ITEM 1B. | Unresolved Staff Comments |
As a Smaller Reporting Company as defined by Rule 12b-2 of the Exchange Act and in Item 10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting obligations and therefore are not required to provide the information requested by this Item 1B.
| ITEM 1C. | Cybersecurity |
As a smaller reporting company, we currently do not have formalized cybersecurity measures, a dedicated cybersecurity team or specific protocols in place to manage cybersecurity risks. Our approach to cybersecurity is in the developmental stage, and we have not yet conducted comprehensive risk assessments, established an incident response plan or engaged with external cybersecurity consultants for assessments or services.
Given our current stage of cybersecurity development, we have not experienced any significant cybersecurity incidents to date. However, we recognize that the absence of a formalized cybersecurity framework may leave us vulnerable to cyberattacks, data breaches and other cybersecurity incidents. Such events could potentially lead to unauthorized access to, or disclosure of, sensitive information, disrupt our business operations, result in regulatory fines or litigation costs and negatively impact our reputation among customers and partners.
We are in the process of evaluating our cybersecurity needs and developing appropriate measures to enhance our cybersecurity posture. This includes considering the engagement of external cybersecurity experts to advise on best practices, conducting vulnerability assessments and developing an incident response strategy. Our goal is to establish a cybersecurity framework that is commensurate with our size, complexity and the nature of our operations, thereby reducing our exposure to cybersecurity risks.
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Despite our efforts to improve our cybersecurity measures, there can be no assurance that our initiatives will fully mitigate the risks posed by cyber threats. The landscape of cybersecurity risks is constantly evolving, and we will continue to assess and update our cybersecurity measures in response to emerging threats.
For a discussion of potential cybersecurity risks affecting us, please refer to the “Risk Factors” section.
| ITEM 2. | Properties |
Our principal executive office is located at 300 E. Long Lake Rd, Bloomfield Hills, Michigan 48304, which is 5,251 square feet of office space that we lease at the rate of $7,964 per month. We also lease 47,000 square feet of office space and shop facilities in Detroit, Michigan at the rate of $9,000 per month. It is our belief that such space is adequate for our immediate business needs. Additional space may be required as we expand our business activities, but we do not foresee any significant difficulties in obtaining additional office facilities if deemed necessary.
| ITEM 3. | Legal Proceedings |
There are no material proceedings to which any director or officer, or any associate of any such director or officer, is a party that is adverse to our company or any of our subsidiaries or has a material interest adverse to our company or any of our subsidiaries. No director or executive officer has been a director or executive officer of any business which has filed a bankruptcy petition or had a bankruptcy petition filed against it during the past ten years. Except as described below, no current director or executive officer has been convicted of a criminal offense or is the subject of a pending criminal proceeding during the past ten years. No current director or executive officer has been the subject of any order, judgment or decree of any court permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities during the past ten years. No current director or officer has been found by a court to have violated a federal or state securities or commodities law during the past ten years.
From time to time, we may become a party to litigation and subject to claims incident to the ordinary course of our business. Although the results of such litigation and claims in the ordinary course of business cannot be predicted with certainty, we believe that the final outcome of such matters will not have a material adverse effect on our business, results of operations or financial condition. Regardless of outcome, litigation can have an adverse impact on us because of defense costs, diversion of management resources and other factors. Currently, there is no litigation pending against our company that could materially affect our company other than as follows:
In July 2023, a complaint was filed against us and Ajay Sikka, a director of our company and our former chief executive officer, in the Circuit Court of the Nineteenth Judicial Circuit, Lake County, Illinois titled Alta Waterford, LLC v. TraQiQ, Inc. and Ajay Sikka (Case No. 23LA00000476) for breach of contract. In the complaint, the plaintiff alleges that we breached contracts for the payment of compensation for investor relations and web development and copyright services allegedly provided by the plaintiff, which payment obligation was personally guaranteed by Mr. Sikka. The complaint seeks damages in the amount of $324,000, attorney fees and other unspecified litigation costs.
We answered the complaint, and discovery was conducted and completed within the timetable established by the court. Specifically, the parties produced their respective responsive documents, and completed all depositions, by the beginning of March 2025. On March 14, 2025, also consistent with the court’s order, the plaintiff filed a motion for summary judgment. Our opposition to that motion is due on April 4, 2025, plaintiff’s reply papers are due on April 11, 2025, and the motion will be argued in the court in Illinois on April 29, 2025. If the matter is not resolved as a result of the summary judgment motion, a one-day bench trial has been scheduled, also in the court in Illinois, on May 5, 2025. To date, there have been no material settlement discussions. We dispute the plaintiff’s allegations in its complaint and we intend to continue to vigorously defend this lawsuit.
As of December 31, 2024, no accruals for loss contingencies have been recorded as the outcome of this litigation is neither probable nor reasonably estimable.
| ITEM 4. | Mine Safety Disclosures |
Not applicable.
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PART II
| ITEM 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
Our common stock is listed for quotation on the OTCQB market operated by the OTC Markets Group under the trading symbol “TESI.” Trading in our common stock on the OTCQB market has been limited and the quotations set forth below are not necessarily indicative of actual market values. The following table sets forth, for the periods indicated, the high and low closing bid prices for each quarter within the last two fiscal years ended December 31, 2024 on the OTCQB market as reported by OTC Markets Group. All quotations for the OTCQB market reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.
| Quarter Ended | High | Low | ||||||
| December 31, 2024 | $ | 0.29 | $ | 0.10 | ||||
| September 30, 2024 | $ | 0.27 | $ | 0.01 | ||||
| June 30, 2024 | $ | 0.59 | $ | 0.09 | ||||
| March 31, 2024 | $ | 1.00 | $ | 0.35 | ||||
| December 31, 2023 | $ | 0.92 | $ | 0.03 | ||||
| September 30, 2023 | $ | 3.77 | $ | 1.00 | ||||
| June 30, 2023 | $ | 1.60 | $ | 0.35 | ||||
| March 31, 2023 | $ | 3.70 | $ | 0.20 | ||||
On March 28, 2025, the closing bid price for our common stock on the OTCQB market as reported by the quotation service operated by the OTC Markets Group was $0.16.
Transfer Agent
Equity Stock Transfer, LLC is the registrar and transfer agent for our common shares. Its address is 237 W 37th St Suite 602, New York, NY 10018, Telephone: 212-575-5757, Facsimile: 347-584-3644.
Holders of Our Common Stock
As of March 20, 2025, there were 129 registered holders of record of our common stock. As of such date, 39,543,674 shares of common stock were issued and outstanding. The number of our shareholders of record excludes any estimate by us of the number of beneficial owners of shares held in street name, the accuracy of which cannot be guaranteed.
Dividends
We have not declared any common stock dividends to date and the provisions of our Loan Agreement with Michaelson prohibit our payment of dividends so long as the Michaelson Note remains outstanding. As a result, we have no present intention of paying any cash dividends on our common stock in the foreseeable future, and we intend to use earnings, if any, to generate growth. Subject to any limitations on the payment of dividends in our credit facilities, the payment by us of dividends, if any, in the future, is within the discretion of our board of directors and will depend upon, among other things, our earnings, capital requirements and financial condition, as well as other relevant factors. There are no material restrictions in our Articles of Incorporation, as amended, or Bylaws that restrict us from declaring dividends.
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Securities Authorized for Issuance Under Equity Compensation Plans
The following table provides information as of December 31, 2024, regarding our compensation plans under which equity securities are authorized for issuance:
| Plan category | Number
of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights | Weighted- Average Exercise Price of Outstanding Options, Warrants and Rights | Number
of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) | |||||||||
| (a) | (b) | (c) | ||||||||||
| 2020 Equity compensation plan approved by security holders | — | $ | — | 5,500,000 | ||||||||
| 2023 Equity compensation plan approved by security holders | 24,500,000 | 0.04 | 8,000,000 | |||||||||
| Equity compensation plans not approved by security holders | — | — | — | |||||||||
| Total | 24,500,000 | $ | 0.04 | 13,500,000 | ||||||||
Unregistered Sales of Equity Securities
Between September 1, 2024 and January 21, 2025, 9,859,783 of our Series B Rights to Received Common Stock (“Series B Rights”) were exercised. As a result, we issued 9,859,783 shares of common stock to the holders of such Series B Rights.
Between October 15, 2024 and December 26, 2024, we sold to an accredited investor, convertible promissory notes in the aggregate principal amount of $2,030,560 and warrants to purchase an aggregate of 31,239,385 shares of our common stock for an aggregate purchase price of $1,813,000. The promissory notes were issued with an original issue discount of 12%, bear interest at the rate of 15% per annum and are convertible into shares of our common stock at the conversion price of $0.065 per share. One-third of the principal amount of the promissory notes, and all accrued interest thereon, is payable on the closing of this offering and the balance of such notes mature on the 13-month anniversary of their respective dates of issuance. The warrants have an exercise price of $0.065 per share and have a term of five years.
In March 2025, we issued an aggregate of 500,000 shares of our Series C Convertible Preferred Stock for a purchase price of $2.00 per share to five accredited investors, including Frank Celli, a member of our board of directors, in a private placement.
On March 6, 2025, we issued an aggregate of 1,500,000 shares of common stock in satisfaction of a payable due to a vendor.
On March 20, 2025, we issued an aggregate of 397,500 shares of common stock upon the cashless exercise of warrants with an exercise price of $0.001 per share.
The offers, sales and issuances of securities listed above, were deemed exempt from registration under Section 4(a)(2) of the Securities Act or Regulation D promulgated thereunder in that the issuance of securities did not involve a public offering. The recipients of such securities in each of these transactions represented their intention to acquire the securities for investment purposes only and not with a view to or for sale in connection with any distribution thereof. All of the foregoing securities are deemed restricted securities for purposes of the Securities Act and appropriate legends were affixed to the securities issued in such transactions.
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Issuer Purchases of Equity Securities
None.
| ITEM 6. | [Reserved] |
| ITEM 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
The discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which we have prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, as well as the reported revenues and expenses during the reporting periods. On an ongoing basis, we evaluate estimates and judgments, including those described in greater detail below. We base our estimates on 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.
Overview of Our Company
We are an integrated provider of non-hazardous solid waste and recycling collection, transportation and disposal services. We conduct our business primarily through our principal operating subsidiary, Standard Waste Services, LLC (“SWS”), which provides waste and recycling collection and disposal services to industrial generators and commercial contractors located in Michigan and commenced operations in 2017. We acquired SWS in May 2024 through our Titan Trucking, LLC (“Titan Trucking”) subsidiary, a non-hazardous solid waste management company that commenced operations in May 2017 We operate in a highly recession resistant industry given the ongoing generation of waste and recyclable materials. Our goal is to provide our customers with safe and efficient options for the disposal and recycling of their waste streams. SWS has begun to create the infrastructure needed to expand its operations organically and through strategic acquisitions and market development opportunities across the Midwest, Northeast and Southeast regions of the United States.
Sale of Recoup Technologies, Inc. (“Recoup”)
On October 31, 2024, we completed the sale (the “Recoup Sale”) of our wholly-owned subsidiary, Recoup Technologies, Inc. (“Recoup”), which qualified for reporting as a discontinued operation. As a result, Recoup’s results, including the loss on disposal, are presented in a single line item, loss from discontinued operations, after tax in our consolidated statement of operations and excluded from continuing operations for all periods presented. Accordingly, any discussion of our historical financial information below reflects Recoup’s results as a discontinued operation and amounts and disclosures below pertain to our continuing operations for all periods presented, unless otherwise noted.
We received consideration with a total purchase price of $1,000,000 for the sale of Recoup. The consideration was composed of the forgiveness of $750,000 of accounts payables and the receipt of a $250,000 note receivable. We also agreed that, for a period of five years from the closing date, we will not engage in a business that competes with the business of Recoup. Recoup is in the business of marketing an aerobic digestion technology solution for the disposal of food waste at the point of generation. Please see Note 4 – Discontinued Operations, to the consolidated financial statements included in Part II, Item 8. Financial Statements and Supplementary Data, of this Annual Report on Form 10-K for further details on the transaction.
Standard Waste Services, LLC Business Combination
On May 31, 2024 (the “SWS acquisition date”), we completed the acquisition of SWS. The total purchase consideration in connection with the acquisition was approximately $16.1 million. The purchase price consisted of $4,652,500 of cash (inclusive of a $652,500 cash deposit paid on January 8, 2024), the issuance of two promissory notes in the aggregate principal amount of $2,859,898, and the issuance of 612,000 shares of our Series A Preferred Stock valued at $8,568,000.
| 27 |
SWS is a provider of contracted commercial roll-off and front-load waste services, including dumpster compactor rentals, to customers principally in Southeast Michigan. SWS provides services to both commercial and industrial customers.
The transaction was accounted for under the acquisition method of accounting, and accordingly, the results of SWS’s operations are included within the Trucking Segment for 2024.
The purchase price was preliminarily allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair values at the date of acquisition on a provisional basis. The purchase price exceeded the estimated fair value of the net identifiable tangible and intangible assets acquired and, as such, the excess was allocated to goodwill.
The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed at the acquisition date.
| Estimated | ||||
| Description | Fair Value | |||
| Assets: | ||||
| Cash | $ | 2,545 | ||
| Accounts receivable | 1,387,932 | |||
| Property and equipment | 6,995,080 | |||
| Prepaid expenses and other current assets | 12,900 | |||
| Other receivables | 1,600 | |||
| Right-of-use-asset | 294,431 | |||
| Intangibles and goodwill | 12,440,922 | |||
| $ | 21,135,410 | |||
| Liabilities: | ||||
| Accounts payable and accrued expenses | $ | (1,343,793 | ) | |
| Accrued payroll and related taxes | (46,189 | ) | ||
| Operating lease liability, current | (83,654 | ) | ||
| Finance lease liability, current | (29,230 | ) | ||
| Notes payable | (3,271,231 | ) | ||
| Operating lease liability, noncurrent | (210,778 | ) | ||
| Finance lease liability, noncurrent | (70,137 | ) | ||
| $ | (5,055,012 | ) | ||
| Net fair value of assets (liabilities) acquired | $ | 16,080,398 | ||
Certain estimated fair values for the acquisition, including goodwill, anticipated intangible assets, and property and equipment, are not yet finalized. The anticipated intangible assets consist of contractual backlog, customer relationships and tradenames. The purchase price was preliminarily allocated based on information available at the acquisition date and is subject to change as we complete our analysis of the fair values at the date of the acquisition during the measurement period not to exceed one year, as permitted under ASC 805 – Business Combinations. The fair value of the promissory notes issued as consideration are not yet finalized and any adjustments to the preliminary fair value will change the goodwill recognized.
As a result of the SWS acquisition, we recognized a total of $12.4 million of intangibles and goodwill. The goodwill represents the value expected to be created through new customer relationships for our company, access to new market opportunities, and expected growth opportunities. The goodwill resulting from the acquisition is susceptible to future impairment charges.
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Reverse Acquisition with Titan Trucking, LLC
On May 19, 2023, we and our wholly-owned subsidiary, Titan Merger Sub Corp. (“Merger Sub”), entered into an Agreement and Plan of Merger with Titan Trucking, Titan 5, LLC, a Michigan limited liability company (“Titan 5”), Titan National Holdings 2, LLC, a Michigan limited liability company (“Holdings”), Jeffrey Rizzo, an individual (“JR”), William McCauley, an individual (“WM”, and, together with Holdings, Titan 5 and JR, the “Sellers”), and Jeffrey Rizzo, as the Seller Representative, pursuant to which, Merger Sub was merged with and into Titan Trucking, with Titan Trucking continuing as the surviving entity and as a wholly-owned subsidiary of our company (the “Titan Merger”).
For U.S. federal income tax purposes, the Titan Merger qualified as a tax-free “reorganization”. Under the terms of the merger agreement, upon the closing of the Titan Merger, we issued to the Sellers an aggregate of 630,900 shares of our Series A Preferred Stock. Concurrent to the Titan Merger, our chief executive officer and one of our directors resigned from their respective positions and our current chief executive officer, our former chief operating officer and our current chief financial officer were appointed as officers of our company. Additionally, the new chief executive officer and chief operating officer were both appointed as directors of our company.
In accordance with ASC 805 – Business Combinations, the Titan Merger was accounted for as a reverse acquisition with Titan Trucking being deemed the accounting acquirer of our company. Titan Trucking, as the accounting acquirer, recorded the assets and liabilities of our company at their fair values as of the acquisition date. The historical consolidated financial statements of Titan Trucking have replaced our historical consolidated financial statements with respect to periods prior to the completion of the Titan Merger with retroactive adjustments to Titan Trucking’s legal capital to reflect the legal capital of our company. We remain the continuing registrant and reporting company.
Titan Trucking was deemed to be the accounting acquirer based on the following facts and circumstances: (i) the Titan Trucking owners owned approximately 65% of the voting interests of the combined company immediately following the transaction; (ii) the Titan Merger resulted in significant changes to the combined company’s board of directors; and (iii) the Titan Merger resulted in significant changes to the management of the combined company.
We accounted for the Titan Merger as a reverse acquisition using acquisition accounting. Because the Titan Merger qualifies as a reverse acquisition and given that Titan Trucking was a private company at the time of the Titan Merger and therefore its value was not readily determinable, the fair value of the merger consideration was deemed to be equal to the quoted market capitalization of our company at the acquisition date. The purchase consideration was as follows:
| Titan Environmental Solutions, Inc. market capitalization at closing | $ | 27,162,222 | ||
| Total purchase consideration | $ | 27,162,222 |
We recorded all tangible and intangible assets and liabilities at their fair values on the acquisition date. The following represents the allocation of the purchase consideration:
| Description | Fair Value | |||
| Assets: | ||||
| Cash | $ | 69,104 | ||
| Accounts receivable, net | 369,338 | |||
| Prepaid expenses and other current assets | 17,893 | |||
| Inventory | 64,894 | |||
| Fixed assets, net | 1,134 | |||
| Intangible assets, net | 6,471,621 | |||
| Goodwill | 26,880,916 | |||
| $ | 33,874,900 | |||
| Liabilities: | ||||
| Accounts payable and accrued expenses | $ | (1,009,993 | ) | |
| Customer deposits | (311,544 | ) | ||
| Accrued payroll and related taxes | (21,077 | ) | ||
| Derivative liability | (219,171 | ) | ||
| Convertible notes payable | (1,466,382 | ) | ||
| Convertible notes payable – related parties | (102,851 | ) | ||
| Notes payable | (3,579,160 | ) | ||
| Notes payable – related parties | (2,500 | ) | ||
| $ | (6,712,678 | ) | ||
| Net fair value of assets (liabilities) | $ | 27,162,222 | ||
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Disposal of TraQiQ Private Solutions, Inc (“Ci2i”)
On July 28, 2023, we and our wholly-owned subsidiary, TraQiQ Solutions, Inc (“Ci2i”), and Ajay Sikka, a director and our former chief executive officer, entered into an Assignment of Stock Agreement pursuant to which we assigned and transferred to Mr. Sikka all of our rights, title and interests in the issued and outstanding equity interests of Ci2i in exchange for consideration of $1. We additionally assumed from Ci2i loans and short-term debts valued at $209,587 plus fees and interest. Other than the liabilities assumed from Ci2i, the balance sheet amounts and operations of Ci2i as of the date of sale were insignificant.
Reincorporation as Titan Environmental Solutions Inc.
Effective January 10, 2024, and pursuant to an Amended and Restated Agreement and Plan of Merger (the “Reincorporation Agreement”), we merged with and into (the “reincorporation”) our wholly-owned subsidiary, Titan Environmental Solutions Inc., a Nevada corporation, with the Nevada corporation as the surviving entity. As a result of the reincorporation, our jurisdiction of incorporation was changed from California to Nevada and our corporate name was changed from “TraQiQ, Inc.” to “Titan Environmental Solutions Inc.” The individuals serving as our executive officers and directors as of the effective time of the reincorporation continued to serve in such respective capacities with our company following the effective time of the reincorporation.
Change in Equity Instruments and Share Authorizations
Pursuant to the Reincorporation Agreement, each share of our common stock issued and outstanding immediately prior to the reincorporation was converted into one share of the Nevada corporation’s common stock. Additionally, each share of our Series C Convertible Preferred Stock issued and outstanding immediately prior to the effective time of the reincorporation was converted into one share of Series A Convertible Preferred Stock of the Nevada corporation (the “Series A Preferred Stock”), which has substantially the same rights and preferences as the Series C Preferred Stock. Each of our Series A Rights to Receive Common Stock issued and outstanding immediately prior to the reincorporation was converted into one Series A Right to Receive Common Stock of the Nevada corporation, which has substantially the same rights and preferences as our original Series A Rights to Acquire Common Stock. Each of our Series B Rights to Receive Common Stock issued and outstanding immediately prior to the reincorporation was converted into one Series B Right to Receive Common Stock of the Nevada corporation, which has substantially the same rights and preferences as our original Series B Rights to Acquire Common Stock.
As a result of the reincorporation, all of our outstanding warrants were assumed by the Nevada corporation and now represent warrants to acquire shares of the Nevada corporation’s common stock. The reincorporation increased our authorized capital stock to 425,000,000 total shares, consisting of 400,000,000 shares of common stock, par value $0.0001 per share, and 25,000,000 shares of preferred stock, par value $0.0001 per share, of which 630,900 shares were designated “Series A Convertible Preferred Stock”. In connection with the reincorporation, we also adopted the Titan Environmental Solutions Inc. 2023 Equity Incentive Plan.
Change in Trading Symbol of Common Stock
Following the reincorporation and effective on January 16, 2024, the trading symbol of our common stock changed from “TRIQ” to “TESI”.
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Authorization of Reverse Stock Split
On September 10, 2024, our board of directors was authorized to effect a reverse stock split (the “Reverse Stock Split”) on the basis of one share of our common stock for up to 100 shares of our common stock, at an exact ratio at the discretion of the board of directors, at any time prior to September 10, 2025. In connection with the Reverse Stock Split, if one is approved by our board of directors, our board of directors may also amend our articles of incorporation to reduce the number of authorized shares of common stock to a number of shares, as determined by the board of directors, that is not less than 110% of the number of outstanding shares of common stock on a fully-diluted basis after giving effect to the Reverse Stock Split.
Going Concern
For the year ended December 31, 2024, we had a net loss from continuing operations of $10,404,396. We had a working capital deficit of $17,160,714 as of December 31, 2024 (deficit of $10,935,108 as of December 31, 2023). These conditions raise substantial doubt about our ability to continue as a going concern for a period of time within one year after the date on which our consolidated financial statements were issued.
Our continuation as a going concern is contingent upon our ability to obtain additional financing and to generate revenue and cash flow to meet our obligations on a timely basis. We will continue to seek to raise additional funding through debt or equity financing during the next twelve months from the date of issuance of these consolidated financial statements. Management believes that actions presently being taken to obtain additional funding provide the opportunity for us to continue as a going concern. There is no guarantee we will be successful in achieving these objectives. We have been successful in attracting substantial capital from investors interested in the current public status of our company that has been used to support our ongoing cash outlays. This includes raising proceeds of approximately $3.2 million from the issuance of a combination of warrants and convertible notes. Additionally, we have raised approximately $3.9 million in net proceeds from our Series B Preferred Stock offering and $1 million in net proceeds from our Series C Preferred Stock offering.
Employee Benefit Plan
Titan Trucking offers a 401(k) plan. Employees are eligible to participate in the plan on the first day of the month following the date of hire. Employees may defer up to $23,000 per year. Titan Trucking is required to contribute on behalf of each eligible participating employee. Titan Trucking will match 50% of the participants deferral not to exceed 3% of employee compensation. Employees will share in the matching contribution regardless of the amount of service completed during the plan year. Employees will become 100% vested in the employer matching contributions after one year of service.
Employer contributions for the years ended December 31, 2024 and 2023 were $10,934 and $15,116, respectively.
| 31 |
Results of Operations and Financial Condition from Continuing Operations for the Year Ended December 31, 2024 as Compared to the Year Ended December 31, 2023
| Year Ended | Year Ended | |||||||||||
| December 31, | December 31, | Percent | ||||||||||
| 2024 | 2023 | Change | ||||||||||
| Revenue | $ | 9,574,403 | $ | 6,228,592 | 54 | % | ||||||
| Cost of revenues | 9,240,942 | 5,905,892 | 56 | % | ||||||||
| Gross profit | 333,461 | 322,700 | 3 | % | ||||||||
| Operating expenses | ||||||||||||
| Salaries and salary related costs | 1,713,297 | 1,530,684 | 12 | % | ||||||||
| Stock based compensation | 65,293 | 5,590,486 | -99 | % | ||||||||
| Professional fees | 3,176,787 | 3,123,650 | 2 | % | ||||||||
| Depreciation and amortization expense | 68,750 | 68,750 | 0 | % | ||||||||
| General and administrative expenses | 1,201,032 | 985,685 | 22 | % | ||||||||
| Total operating expenses | 6,225,159 | 11,299,255 | -45 | % | ||||||||
| Operating loss | (5,891,698 | ) | (10,976,555 | ) | -46 | % | ||||||
| Other income (expense) | ||||||||||||
| Change in fair value of derivative liability | 17,500 | 41,670 | -58 | % | ||||||||
| Interest expense, net | (4,254,219 | ) | (1,380,122 | ) | 208 | % | ||||||
| Gain on forgiveness of note payable | - | 91,803 | -100 | % | ||||||||
| Other income | 185,911 | 89,656 | 107 | % | ||||||||
| Loss on sale of equipment | (111,429 | ) | - | 0 | % | |||||||
| Gain on sale of customer contracts | 370,000 | - | 0 | % | ||||||||
| Gain on exchange of convertible notes for common stock | 86,459 | - | 100 | % | ||||||||
| Loss on extinguishment of convertible debt and issuance of Series B Preferred Stock | (806,920 | ) | - | 100 | % | |||||||
| Loss on extinguishment of convertible debt and on issuance of share rights | - | (116,591,322 | ) | -100 | % | |||||||
| Total other expense | (4,512,698 | ) | (117,748,315 | ) | -96 | % | ||||||
| Provision for income taxes | - | - | 0 | % | ||||||||
| Net loss from continuing operations after tax | (10,404,396 | ) | (128,724,870 | ) | -92 | % | ||||||
| Net loss from discontinued operations, after tax (including loss on disposal of a subsidiary of $785,871) | (11,138,909 | ) | (20,280,179 | ) | -45 | % | ||||||
| Net loss | $ | (21,543,305 | ) | $ | (149,005,049 | ) | -86 | % | ||||
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Revenue
For the year ended December 31, 2024 compared to December 31, 2023, our revenues increased by $3,345,811, or 54%, from $6,228,592 to $9,574,403. The increase was primarily as a result of the acquisition of SWS on May 31, 2024, and the resulting revenue generated by the combined operations of our company and SWS. We also expanded our operations with the acquisition of new containers and other fixed assets which, as a result, increased the revenue generated during the period.
Cost of Revenue
For the year ended December 31, 2024 compared to December 31, 2023, our cost of revenue increased by $3,335,050, or 56%, from $5,905,892 to $9,240,942. The increase was primarily a result of the acquisition of SWS on May 31, 2024, and the resulting increased revenue caused by the combined operations of our company and SWS. We also have continued to expand the Trucking Segment operations through acquisition of new containers and other fixed assets which also resulted in increased cost of revenues.
Operating Expenses
For the year ended December 31, 2024 compared to December 31, 2023, our salary and salary-related costs increased by $182,613, or 12%, from $1,530,486 to $1,713,297. The increase was primarily due to the increased personnel costs associated with the acquisition of SWS and increases in the operational activities of Titan Trucking.
For the year ended December 31, 2024 compared to December 31, 2023, our stock-based compensation decreased by $5,525,193, or 99%, from $5,590,486 to $65,293. In the third quarter of 2023, we cancelled substantially all of the stock-based compensation we granted earlier in 2023 (for which we had recorded a 2023 stock-based compensation expense of $5,586,796), in exchange for an agreement to replace that grant with a new stock-based compensation grant in 2024. The decrease was also driven by the inputs to the Black-Scholes pricing model, in particular the estimated fair value of our common stock. The changes in inputs affected the valuation of the stock-based awards we issued.
For the year ended December 31, 2024 compared to December 31, 2023, our professional fees increased by $53,137, or 2%, from $3,123,650 to $3,176,787. The increase was attributed primarily to consulting, accounting and legal fees incurred due to our acquisition activities.
Our amortization expense was $68,750 for the years ended December 31, 2024 and 2023. There was no change to amortization expense as there were no changes to our intangible assets.
For the year ended December 31, 2024 compared to December 31, 2023, our general and administrative expenses increased by $215,347, or 22%, from $985,685 to $1,201,032. The increase was primarily due to our increased operational and sales activities, the addition of leases, and the acquisition of SWS.
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Interest Expense, net of Interest Income
For the year ended December 31, 2024 compared to December 31, 2023, our interest expense, net of interest income increased by $2,874,097, or 208%, from $1,380,122 to $4,254,219. The increase was due mainly to a large increase in debt instruments accruing interest on our consolidated balance sheet as a result of the Titan Merger and the acquisition of SWS. We have also issued and sold new debt instruments following the Titan Merger, which has resulted in increased interest expense.
Net Loss from Continuing Operations
For the year ended December 31, 2024 compared to December 31, 2023, our net loss from continuing operations decreased by $118,320,474, or 92%, from $128,724,870 to $10,404,396 due primarily from the decrease in stock-based compensation, the increase in revenue, and the decrease in the loss on extinguishment and issuance of share rights of $116,591,322. The decrease in net loss from continuing operations was primarily offset by an increase in interest expense, net of interest income, and the loss on extinguishment of convertible debt and issuance of Series B Preferred Stock of $806,920.
Segment Analysis
Operating segments are components of an enterprise about which separate financial information is available and is evaluated regularly by management, namely the Chief Operating Decision Maker (“CODM”) of an organization, in order to determine operating and resource allocation decisions. By this definition, prior to February 9, 2025, we had identified our Chief Operating Officer as the CODM. However, on February 9, 2025, our Chief Operating Officer resigned his employment with our company and we identified our Chief Executive Officer as the CODM for the period beginning on February 9, 2025. Our CODM makes decisions regarding resource allocation and performance assessment using net loss from continuing operations as presented within the consolidated statement of operations included in Part II, Item 8. Financial Statements and Supplementary Data, of this Annual Report on Form 10-K.
Prior to the Recoup Sale, we operated in two segments: Trucking and Digester. Following the Recoup Sale, our continuing operations operate and report solely in the Trucking Segment.
Trucking Segment: The Trucking Segment generates service revenues and incurs expenses by transporting environmental and other waste for customers.
(Former) Digester Segment: The Digester Segment primarily generated revenues and incurred expenses through the production and sale of ‘digester’ equipment to customers. The segment also generated revenue through related services such as digester maintenance and software services.
We believed that this structure reflected our operational and financial management prior to the Recoup Sale, and that it provided the best structure for our company to focus on growth opportunities while maintaining financial discipline. The factors used to identify the operating segments were the segment’s revenue streams and customer base, the reporting structure for operational and performance information within our company, and our decision to organize our company around the segment’s revenue generating activities.
Adjusted EBITDA (Non-U.S. GAAP Financial Measure from Continuing Operations)
We have included in this report Adjusted EBITDA, a measure of financial performance that is not defined by U.S. GAAP. We believe that this measure provides useful information to investors and include this measure in other communications to investors.
For this non-U.S. GAAP financial measure, we are providing below a reconciliation of the differences between the non-U.S. GAAP measure and the most directly comparable U.S. GAAP measure, an explanation of why our management and board of directors believe the non-U.S. GAAP measure provides useful information to investors and any additional purposes for which our management and board of directors use the non-U.S. GAAP measures. This non-U.S. GAAP measure should be viewed in addition to, and not in lieu of, the comparable U.S. GAAP measures.
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We define Adjusted EBITDA as net loss from continuing operations before interest expense (net of interest income), income taxes, depreciation and amortization, and certain non-recurring and non-cash transactions such as loss on extinguishment of convertible debt and issuance of share rights, stock-based compensation, and the change in fair value of derivative liabilities. Our management believes that this presentation provides useful information to management and investors regarding our core trends by providing a more direct view of the underlying costs and performance. In addition, management uses this measure for reviewing our financial and operational results. Adjusted EBITDA is a non-U.S. GAAP measure and may not be comparable to similarly titled measures reported by other companies.
We do not consider Adjusted EBITDA in isolation or as an alternative to financial measures determined in accordance with U.S. GAAP. The principal limitation of Adjusted EBITDA is that it excludes certain expenses and income that are required by U.S. GAAP to be recorded in our consolidated financial statements. In addition, Adjusted EBITDA is subject to inherent limitations as this metric reflects the exercise of judgment by management about which expenses and income are excluded or included in determining Adjusted EBITDA. In order to compensate for these limitations, management presents Adjusted EBITDA in connection with U.S. GAAP results. A reconciliation of net loss from continuing operations to Adjusted EBITDA is as follows:
| Years Ended | ||||||||
| December 31, | ||||||||
| 2024 | 2023 | |||||||
| Net loss from continuing operations | $ | (10,404,396 | ) | $ | (128,724,870 | ) | ||
| Interest expense, net of interest income | 4,254,219 | 1,380,122 | ||||||
| Income taxes | - | - | ||||||
| Depreciation and amortization (a) | 959,965 | 492,770 | ||||||
| (5,190,212 | ) | (126,851,978 | ) | |||||
| Non-recurring, non-cash transactions: | ||||||||
| Change in fair value of derivative liability | (17,500 | ) | (41,670 | ) | ||||
| Stock-based compensation | 65,293 | 5,590,486 | ||||||
| Gain on exchange of convertible notes for common stock (b) | (86,459 | ) | ||||||
| Loss on extinguishment of convertible debt and issuance of Series B Preferred Stock (c) | 806,920 | - | ||||||
| Loss on extinguishment of convertible debt and issuance of share rights (d) | - | 116,591,322 | ||||||
| Adjusted EBITDA | $ | (4,421,958 | ) | $ | (4,711,840 | ) | ||
| (a) | This amount includes $891,215 and $424,020 of depreciation expense included in cost of revenues in the consolidated statement of operations for the years ended December 31, 2024 and 2023, respectively. |
| (b) | On December 31, 2024, we and certain of our lenders agreed to modify the terms of the promissory notes we had issued as consideration for the acquisition of SWS. Additionally, the lenders agreed to sign a subordination agreement with one of our financiers in exchange for the issuance of 3,000,000 shares of our common stock. Among other changes to the promissory notes, $150,000 of principal and $149,352 of accrued interest were exchanged for 5,987,050 shares of common stock. As a result of these transactions, we recognized a gain of $86,459. |
| (c) | On July 2, 2024, we agreed to exchange an aggregate principal value of $500,000 of notes payable for 50,453 warrants and 50,453 shares of Series B Preferred Stock. As a result of this transaction, we recognized a loss of $806,920. |
| (d) | On July 17, 2023, we agreed to exchange $1,944,000 of convertible notes and $75,263 of accrued interest in exchange for the 38,800,764 Series A Rights. Concurrently, on July 17, 2023, we agreed to exchange 220,153 shares of Series B Preferred Stock for 22,013,500 Series A Rights. Further, on July 17, 2023, we agreed to exchange 5,000,000 shares of common stock and a payment of receivable from our company for unreimbursed advances in the amount of $100,000 for an aggregate of 7,000,000 Series A Rights. On July 20, 2023, we exchanged 14,118,233 shares of common stock and 1,250,000 shares of Series B Preferred Stock for 108,729,363 Series A Rights and 30,388,873 Series B rights. As a result of these transactions, we recognized a loss of $116,591,322. |
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Liquidity and Capital Resources
Liquidity is the ability of an enterprise to generate adequate amounts of cash to meet its needs for cash requirements. As of December 31, 2024, we had $2,977 in cash compared to $33,840 at December 31, 2023, a decrease of $30,863. As of December 31, 2024, we had approximately $1,212,000 in accounts receivable compared to approximately $659,000 at December 31, 2023, an increase of approximately $553,000. The increase in receivables was primarily from the approximately $1,388,000 of receivables gained from the acquisition of SWS, offset primarily by a decrease in accounts receivables of $844,000.
As of December 31, 2024, we had total current assets of approximately $1.6 million and total current liabilities of approximately $18.8 million, or negative working capital of approximately $17.2 million, compared to total current assets of approximately $1.5 million and total current liabilities of approximately $12.4 million, or negative working capital of $10.9 million as of December 31, 2023. This is a decrease in working capital of approximately $6.3 million over the working capital balance at the end of 2023 driven primarily by the acquisition of SWS and the issuance of debt securities completed during the twelve-month period.
As of December 31, 2024, we had undiscounted obligations in the amount of approximately $12.2 million relating to the payment of indebtedness due within one year. We anticipate meeting our cash obligations on our indebtedness that is payable on or prior to December 31, 2024 primarily through the issuance of debt and equity securities, as well as through earnings from operations.
Our future capital requirements for our operations will depend on many factors, including the profitability of our businesses, the number and cash requirements of other acquisition candidates that we pursue, and the costs of our operations. We plan to generate positive cash flow from SWS and Titan Trucking to address some of our liquidity needs. However, to execute our business plan, service our existing indebtedness, finance our proposed acquisitions and implement our business strategy, we anticipate that we may need to obtain additional financing from time to time and may choose to raise additional funds through public or private equity or debt financings, a bank line of credit, borrowings from affiliates or other arrangements. We cannot be sure that any additional funding, if needed, will be available on terms favorable to us or at all. Furthermore, any additional capital raised through the sale of equity or equity-linked securities may dilute our current stockholders’ ownership in us and could also result in a decrease in the market price of our common stock. The terms of those securities issued by us in future capital transactions may be more favorable to new investors and may include the issuance of warrants or other derivative securities, which may have a further dilutive effect. Furthermore, any debt financing, if available, may subject us to restrictive covenants and significant interest costs. There can be no assurance that we will be able to raise additional capital, when needed, to continue operations in their current form.
During the years ended December 31, 2024 and 2023, our capital expenditures were approximately $1.1 million and approximately $0.6 million, respectively. During the year ended December 31, 2024, we offset our capital expenditures with approximately $94,000 in proceeds from the disposal of property and equipment. During the year ended December 31, 2023, we offset our capital expenditures with approximately $97,000 from the proceeds from disposal of property and equipment.
We expect our capital expenditures for next 12 months will grow as we continue to expand the SWS operational activities. These capital expenditures will be primarily utilized for equipment needed to generate revenue and for office equipment. We expect to fund such capital expenditures out of our working capital.
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Cash Flows
| Years Ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| Net cash used in operating activities – continuing operations | $ | (12,681,232 | ) | $ | (23,943,211 | ) | ||
| Net cash used in investing activities – continuing operations | (5,619,634 | ) | (477,979 | ) | ||||
| Net cash provided by financing activities – continuing operations | 7,048,016 | 3,816,581 | ||||||
| Net cash provided by operations – discontinued operations | 10,367,127 | 20,694,580 | ||||||
| Net cash provided by investing activities – discontinued operations | 785,122 | (13,043 | ) | |||||
| Net increase (decrease) in cash | $ | (100,601 | ) | $ | 76,928 | |||
Operating Activities. The net cash used in operating activities from continuing operations for the year ended December 31, 2024 was primarily used to fund a net loss of approximately $21.5 million, adjusted for non-cash expenses in the aggregate amount of approximately $3.3 million. Non-cash expenses were primarily made up of approximately $1.8 million of the amortization of debt discounts, depreciation and amortization of approximately $1.0 million and a loss on extinguishment of convertible debt and issuance of Series B Preferred Stock and warrants of approximately $807,000. Approximately $5.5 million of cash was generated from net changes in the levels of operating assets and liabilities, primarily related to an increase in accounts payable of $3.5 million, an increase in accrued interest of $906,000, net collections of accounts receivable of $844,000 and a decrease in the right-of-use asset of $323,000.The cash generated was offset by a decrease in the finance lease liability of $17,000 and a decrease in the operating lease liability of $300,000.
The net cash used by operating activities from continuing operations for the year ended December 31, 2023 was primarily used to fund a net loss of approximately $149 million, adjusted for non-cash income in the aggregate amount of approximately $123 million. Non-cash income was composed primarily of $117 million in loss on extinguishment and issuance of share rights and $5.6 million of stock-based compensation. Approximately $2.1 million was generated by net changes in the levels of operating assets and liabilities, primarily related to increases in accounts payable, increases in accrued expenses, and an increase to accrued interest. The cash generate was offset by increases in other assets, increases in accounts receivable and increases in prepaid expenses.
Investing Activities. During the year ended December 31, 2024, our cash used in investing activities from continuing operations was composed of approximately the $4.7 million used to purchase SWS, and the approximately $1.1 million cash used to acquire property and equipment. The cash used was offset by proceeds from the disposal of property and equipment of $94,000.
The net cash used by investing activities from continuing operations for the year ended December 31, 2023 was composed of $643,000 used to purchase property and equipment, offset by the net cash of $68,000 received due to the Titan Merger and the proceeds from the disposal of property and equipment of $97,000.
Financing Activities. There was $7.0 million in cash generated from financing activities from continuing operations during the year ended December 31, 2024. This was primarily due to proceeds of $4.2 million from the Series B Offering, proceeds from notes payable of $2.5 million, and proceeds from a combination of convertible notes and warrants of $3.2 million. This was offset by the repayment of notes payables of $3.1 million, the repayment of related party notes payable of $315,000 and the Series B Offering costs of $290,000.
There was $3.8 million in cash generated from financing activities from continuing operations during the year ended December 31, 2023. This was primarily due to proceeds from convertible notes of $2.6 million, proceeds from notes payable – related parties of $1.3 million, proceeds from notes payable of $871,000, proceeds from convertible notes – related parties of $675,000 and cash from the issuance of warrants of $267,000. Cash provided from financing activities was offset by approximately $1.8 million of repayments of notes payable and $160,000 of repayments of notes payable – related parties.
Non-Cash Investing and Financing Activities. During the year ended December 31, 2024, there was non-cash financing activity of $3,010,000 from Series A Preferred Stock issued related to a guarantee agreement. There was non-cash activity of $1,308 from the exercise of share rights into common stock and non-cash activity of $2,993 from the paid in-kind repayment of related party notes payable. Additionally, we had non-cash activity of $1,129,000 due to the termination of a lease and non-cash activity of $4,249,599 due to the remeasurement of the Series B Preferred Stock to its redemption value. Further, during the year ended December 31, 2024, there was non-cash proceeds from the sale of a business of $1,000,000, non-cash activity of $2,859,898 related to promissory notes issued in the acquisition of a business, and non-cash activity of $8,568,000 from Series A Preferred Stock issued in the acquisition of a business. We note that during the year ended December 31, 2023 there was approximately $27 million of non-cash activity related to the recapitalization of equity due to the Titan Merger. Additionally, we settled a note payable as a contribution to equity for $170,000.
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Cash Payments for Interest and Income Taxes. We had approximately $1,733,000 and 578,000 of cash payments for interest expense for the years ended December 31, 2024 and 2023, respectively. There were no cash payments for income taxes for the years ended December 31, 2024 and 2023, respectively.
Critical Accounting Policies and Estimates
Our significant accounting policies are more fully described in the notes to our consolidated financial statements. Those material accounting estimates that we believe are the most critical to an investor’s understanding of our financial results and condition are discussed immediately below and are particularly important to the portrayal of our financial position and results of operations and require the application of significant judgment by our management to determine the appropriate assumptions to be used in the determination of certain estimates.
Business Combinations
Under the guidance enumerated in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805, if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, the set is not considered a business and is accounted for as an asset acquisition at which point, the acquirer measures the assets acquired based on their cost, which is allocated on a relative fair value basis.
Business combinations are accounted for utilizing the fair value of consideration determined by the our management and external specialists. We recognize estimated fair values of the tangible and intangible assets acquired and liabilities assumed as of the acquisition date. Goodwill is recognized as any excess in fair value over the net value of assets acquired and liabilities assumed.
Goodwill
Goodwill represents the excess of the acquisition price of a business over the fair value of identified net assets of that business. Goodwill has an indefinite lifespan and is not amortized. We evaluate goodwill for impairment at least annually and record an impairment charge when the carrying amount of a reporting unit with goodwill exceeds the fair value of the reporting unit. We have one reporting unit, the trucking unit.
We assess qualitative factors to determine if it is necessary to conduct a quantitative goodwill impairment test. If deemed necessary, a quantitative assessment of the reporting unit’s fair value is conducted and compared to its carrying value in order to determine the impairment charge. Due to the acquisition of SWS, we recognized goodwill of $12,440,922.
Convertible Instruments
We evaluate our convertible instruments, such as warrants and convertible notes, to determine if those contracts or embedded components of those contracts qualify as equity instruments, derivative liabilities, or liabilities, to be separately accounted for in accordance with ASC 815 “Derivatives and Hedging” (“ASC 815”) and ASC 480 “Distinguishing Liabilities from Equity” (“ASC 480”). The assessment considers whether the convertible instruments are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the convertible instruments meet all of the requirements for equity classification under ASC 815, including whether the convertible instruments are indexed to our own ordinary shares and whether the instrument holders could potentially require “net cash settlement” in a circumstance outside of our control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of the instrument’s issuance, and as of each subsequent balance sheet date while the instruments are outstanding. If the classification changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification.
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Embedded conversion options and any related freestanding instruments are recorded as a discount to the host instrument. We allocate proceeds based on the relative fair values of the debt and equity components. The accounting treatment of derivative financial instruments requires that we record embedded conversion options and any related freestanding instruments at their fair values as of the inception date of the agreement and at fair value as of each subsequent balance sheet date. Any change in fair value is recorded in earnings each period as non-operating, non-cash income or expense.
Valuations derived from various models are subject to ongoing internal and external verification and review. We determine the fair value of our convertible instruments and derivative liabilities using various valuation models, including the Black-Scholes pricing model. The inputs used in those valuation models involve our judgment and may impact net loss.
Stock-Based Compensation
We account for stock awards to employees and non-employees following ASC Topic 718, Compensation – Stock Compensation by measuring the cost of services received in exchange for the award of equity instruments based upon the fair value of the award on the date of grant. The fair value of that award is then ratably recognized as expense over the period during which the recipient is required to provide services in exchange for that award.
Common Stock
Beginning on December 31, 2024, due to the lack of an active market for our common stock, we, together with our board of directors, were required to estimate the fair value of our common stock at the time of each grant of stock-based compensation. We utilize various valuation methodologies to estimate the fair value of our common stock. Each valuation methodology includes estimates and assumptions that require our judgment. These estimates and assumptions include a number of objective and subjective factors in determining the value of our common stock at each grant date, including the following factors:
| ● | prices paid for our capital stock that we have sold to outside investors in arm’s-length transactions, considering the rights and privileges of the securities sold relative to the common stock; | |
| ● | valuations performed by an independent valuation specialist; | |
| ● | our stage of development and revenue growth; | |
| ● | the market performance of comparable publicly traded companies; | |
| ● | the likelihood of achieving a liquidity event for the common stock underlying the stock-based awards, such as uplisting to a more liquid stock exchange; | |
| ● | adjustments necessary to recognize a lack of marketability for the common stock |
Prior to December 31, 2024, we valued our common stock using the trading price of our publicly-listed common stock. We intend to return to this valuation methodology upon the establishment of an active market for our common stock.
Off-Balance Sheet Arrangements
We have no off-balance sheet financing arrangements.
Contractual Obligations
As a smaller reporting company we are not required to provide the information required by this Item.
| ITEM 7A. | Quantitative and Qualitative Disclosures About Market Risk |
As a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and in Item 10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting obligations and therefore are not required to provide the information requested by this Item 7A.
| ITEM 8. | Financial Statements |
Our audited consolidated financial statements for the years ended December 31, 2024 and 2023, together with the notes thereto and the report of Freed Maxick P.C. thereon, are included in this Report on pages F-1 through F-47.
| ITEM 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosures |
None.
| ITEM 9A. | Controls and Procedures |
Disclosure Controls and Procedures
As required by paragraph (b) of Rules 13a-15 or 15d-15 under the Exchange Act, our principal executive officer and principal financial officer evaluated our company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this Report. Based on this evaluation, these officers concluded that as of the end of the period covered by this Report, these disclosure controls and procedures were not effective.
The conclusion that our disclosure controls and procedures were not effective was due to the presence of material weaknesses in internal control over financial reporting as identified below under the heading “Management’s Report on Internal Control Over Financial Reporting.” Management anticipates that such disclosure controls and procedures will not be effective until the material weaknesses are remediated.
Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdown can occur because of simple error or mistake.
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Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) for our company. Our internal control over financial reporting is designed to provide reasonable assurance, not absolute assurance, regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States of America. Internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles in the United States of America, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions and that the degree of compliance with the policies or procedures may deteriorate.
Our management, including our principal executive officer and principal financial officer, conducted an evaluation of the design and operation of our internal control over financial reporting as of December 31, 2024 based on the criteria set forth in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. This evaluation included review of the documentation of controls, evaluation of the design effectiveness of controls, testing of the operating effectiveness of controls and a conclusion on this evaluation. Based on this evaluation, our management concluded our internal control over financial reporting was not effective as at December 31, 2024 due to the following material weaknesses.
| ● | We have not established adequate financial reporting processes or monitoring activities to ensure adequate financial reporting and to mitigate the risk of management override, specifically because there are few employees and only two officers with management functions and therefore there is lack of segregation of duties. | |
| ● | An outside consultant assists in the preparation of the annual and quarterly financial statements and partners with us to ensure compliance with U.S. GAAP and SEC disclosure requirements. | |
| ● | We did not maintain a sufficient complement of qualified accounting personnel and controls associated with segregation of duties over complex transactions. |
We plan to take steps to enhance and improve the design of our internal controls over financial reporting when our company has sufficient staff to allocate responsibilities. During the period covered by this Report, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we plan to appoint additional qualified personnel to address inadequate segregation of duties and ineffective risk management once our financial resources will support the required staffing level. These remediation efforts are largely dependent upon our company securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely effected in a material manner.
This Report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Our internal control over financial reporting was not subject to attestation by our independent registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management’s report in this Report.
Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake.
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Changes In Internal Control Over Financial Reporting.
There were no changes in our internal control over financial reporting during the year ended December 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
The term “internal control over financial reporting” is defined as a process designed by, or under the supervision of, the registrant’s principal executive and principal financial officers, or persons performing similar functions, and effected by the registrant’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:
| (a) | Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the registrant; |
| (b) | Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the registrant are being made only in accordance with authorizations of management and directors of the registrant; and |
| (c) | Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the registrant’s assets that could have a material effect on the financial statements. |
| ITEM 9B. | Other Information |
Trading Plans
During
the three months ended December 31, 2024, none of our directors or officers (as defined in Rule 16a-1(f) under the Exchange Act)
| ITEM 9C. | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections |
Not applicable.
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PART III
| ITEM 10. | Directors, Executive Officers and Corporate Governance |
Executive Officers and Directors
The following table provides information regarding our executive officers and directors:
| Name | Age | Position(s) | ||
| Executive Officers | ||||
| Glen Miller | 66 | Chairman, Chief Executive Officer and President | ||
| Dominic Campo | 61 | Chief Operating Officer | ||
| Michael Jansen | 67 | Chief Financial Officer and Secretary | ||
| Directors | ||||
| Frank E. Celli | 53 | Director | ||
| Ajay Sikka | 57 | Director |
Executive Officers
Glen Miller has been our Chief Executive Officer since May 2023 upon the acquisition of Titan Trucking. Mr. Miller has been a part of the Titan Trucking team since 2022. Mr. Miller has over 48 years of experience in the solid waste collection, transportation and disposal business working for both private and public companies. Throughout his executive career, Mr. Miller has been instrumental in successfully acquiring and integrating over 100 waste service companies. Since January 2020, Mr. Miller has been owner and sole member of Solid Waste Resources LLC, a waste consulting firm. From 2014 to January 2020, Mr. Miller was the owner and Chief Executive Officer of Gold Medal Environmental Services, Inc., a solid waste and recycling company based in New Jersey.
Dominic Campo was appointed our Chief Operating Officer in March 2025 after serving as a consultant to our company since our acquisition of SWS in May 2024. Mr. Campo has been in the waste collection and recycling industry for over 55 years. Over the course of his career, he has been the founder and senior executive of multiple solid waste companies, with operational and sales experience in numerous facets of the industry, including waste collection and recycling operations. Mr. Campo was a founder of SWS in 2017 and served as its Chief Executive Officer until our acquisition of SWS in May 2024. From 1978 to 2017, Mr. Campo was a Vice President of Metro Sanitation LLC, a waste management company that provides waste collection, transfer station operations and disposal services in metropolitan Detroit, with responsibility for operations management, contract negotiations and strategic planning. From 1978 to 1998, Mr. Campo held various management positions, including most recently as a Senior Vice President, at Standard Disposal Inc., with responsibility for municipal, commercial and industrial sales and retention, corporate procurement, the development and implementation of standard operating procedures and budget and finance. Each of these companies was sold to a larger competitor at the time of, and it connection with, Mr. Campo’s departure.
Michael Jansen has been our Chief Financial Officer since May 2023, upon the acquisition of Titan Trucking. Mr. Jansen has 30 years of experience in the solid waste collection, transportation, disposal and recycling business working for both public and private companies. Mr. Jansen spent over 14 years working for Waste Management, Inc. as the Regional VP of Finance for the Michigan marketplace. Throughout his career, Mr. Jansen has been involved in the acquisition of several waste companies. From September 2016 to April 2023, Mr. Jansen was Director Finance Operations of GFL Environmental USA, Inc. (GFL:NYSE), a diversified waste management company with operations across North America, where he was involved with various financial matters, including overseeing financial performance and reporting. Mr. Jansen earned a Bachelor’s Degree in Accounting from Wayne State University and is a Certified Public Accountant.
Directors
Frank E. Celli was appointed as a director of our company in March 2023. Mr. Celli has been in the waste and recycling industry for 35 years. Over the course of his career, he has been an owner and Chief Executive Officer of multiple solid waste companies, with experience in numerous facets of the industry, including waste collection, transfer station operations, landfill operations and recycling operations. Mr. Celli was co-founder and Chief Executive Officer of Interstate Waste Services from 2000 to 2006. Since May 2022, Mr. Celli has served as Managing Member of FC Advisory, a management consulting company, and, since 2020, Mr. Celli has served as a consultant and strategic corporate advisor at Direct Waste Services, Inc., a solid waste collection and recycling company, positions that Mr. Celli continues to hold. From August 2015 until November 2020, Mr. Celli served as Chief Executive Officer and from August 2015 until March 2022, Mr. Celli served as Chairman of the Board, of BioHitech Global, Inc. (Nasdaq: BHTG), a waste reduction and technology company that was rebranded to Renovare Environmental, Inc. (Nasdaq:RENO) in December 2021. Over the course of his career, Mr. Celli has completed over 50 acquisitions and spearheaded multiple exits. Mr. Celli has a Bachelor of Science degree from Pace University Lubin School of Business.
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Ajay Sikka was appointed as a director of our company in July 2017. From July 2017 until May 2023, Mr. Sikka served as our Chief Executive Officer, President, and Chief Financial Officer. From May 2014 until July 2017, Mr. Sikka served as Chief Executive Officer of OmniM2M, Inc., an IioT hardware, software and services company. From March 2011 until July 2017, Mr. Sikka served as Chief Executive Officer of TraQiQ Solutions, Inc., a technology provider that is focused on providing software products, services and support to enterprise customers, including Microsoft, Staples, Accenture, and Pactera. From April 2004 to February 2011, Mr. Sikka served as Senior Director at Microsoft Corp., a technology software company, where he worked on multiple teams, including Law & Corporate affairs, Central IT, and Business Strategy. Mr. Sikka also managed Microsoft’s CloudCRM team that provided Customer Relationship Management (CRM) services within Microsoft. From April 2000 to March 2004, Mr. Sikka served as Chief Executive Officer of IndiaHQ Solutions, Inc., a content provider (Websites, newspapers, Yellow pages) for the South Asian community. From April 1996 to April 2000, Mr. Sikka served as Group Manager at Microsoft where he drove Microsoft’s internet business and content management initiatives with telecommunications and Internet service providers. Mr. Sikka is an active angel investor and board of director member for startup companies and new ventures in the Seattle area.
Involvement in Certain Legal Proceedings
To our knowledge, our directors and executive officers have not been involved in any of the following events during the past ten years:
| 1. | any bankruptcy petition filed by or against such person or any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; | |
| 2. | any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); | |
| 3. | being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from or otherwise limiting his involvement in any type of business, securities or banking activities or to be associated with any person practicing in banking or securities activities; | |
| 4. | being found by a court of competent jurisdiction in a civil action, the SEC or the CFTC to have violated a Federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated; |
| 5. | being the subject of, or a party to, any Federal or state judicial or administrative order, judgment decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of any Federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or | |
| 6. | being the subject of or party to any sanction or order, not subsequently reversed, suspended, or vacated, of any self-regulatory organization, any registered entity or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member. |
Board Composition and Structure
Our business and affairs are managed under the direction of our board of directors, which currently consists of three members. We are currently seeking to add two additional members to our board of directors. The term of service for each director is until his or her successor is elected at our annual meeting or his or her death, resignation or removal, whichever is earliest to occur.
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While we do not have a stand-alone diversity policy, in considering whether to recommend any director nominee, including candidates recommended by stockholders, we believe that the backgrounds and qualifications of the directors, considered as a group, should provide a significant mix of experience, knowledge and abilities that will allow our board of directors to fulfill its responsibilities. As set forth in our corporate governance guidelines, when considering whether directors and nominees have the experience, qualifications, attributes or skills, taken as a whole, to enable our board of directors to satisfy its oversight responsibilities effectively in light of our business and structure, the board of directors focuses primarily on each person’s background and experience as reflected in the information discussed in each of the directors’ individual biographies set forth above. We believe that our directors and director nominees will provide an appropriate mix of experience and skills relevant to the size and nature of our business.
Our board of directors expects a culture of ethical business conduct. Our board of directors encourages each member to conduct a self-review to determine if he or she is providing effective service with respect to both our company and our stockholders. Should it be determined that a member of our board of directors is unable to effectively act in the best interests of our stockholders, such member would be encouraged to resign.
Board Leadership Structure
Our corporate governance guidelines provide our board of directors with flexibility to combine or separate the positions of Chairman of the Board and Chief Executive Officer in accordance with its determination that utilizing one or the other structure is in the best interests of our company. Glen Miller currently serves as our Chief Executive Officer and Chairman of the Board.
As Chairman of the Board, Mr. Miller’s key responsibilities include facilitating communication between our board of directors and management, assessing management’s performance, managing board members, preparation of the agenda for each board meeting, acting as chair of board meetings and meetings of our company’s stockholders and managing relations with stockholders, other stakeholders and the public.
We will take steps to ensure that adequate structures and processes are in place to permit our board of directors to function independently of management. The directors will be able to request at any time a meeting restricted to independent directors for the purposes of discussing matters independently of management and are encouraged to do so should they feel that such a meeting is required.
Committees of our Board of Directors
We currently do not have a formal audit committee, a compensation committee or a nominating and corporate governance committee. As our business expands, and if we seek to list our common stock on a national stock exchange, our board of directors will evaluate the necessity of such committees.
Audit Committee
In connection with our plan to list our common stock on a national stock exchange, we intend to establish an audit committee of the board of directors consisting of “independent directors” for purposes of serving on an audit committee under Rule 10A-3 under the Exchange Act and NYSE American rules and will include an “audit committee financial expert,” as such term is defined in Item 407(d)(5) of Regulation S-K under the Securities Act. The audit committee may be responsible for, among other matters:
| ● | appointing, retaining and evaluating our independent registered public accounting firm and approving all services to be performed by them; | |
| ● | overseeing our independent registered public accounting firm’s qualifications, independence and performance; | |
| ● | overseeing the financial reporting process and discussing with management and our independent registered public accounting firm the interim and annual financial statements that we file with the SEC; | |
| ● | reviewing and monitoring our accounting principles, accounting policies, financial and accounting controls and compliance with legal and regulatory requirements; | |
| ● | establishing procedures for the confidential anonymous submission of concerns regarding questionable accounting, internal controls or auditing matters; and | |
| ● | reviewing and approving related person transactions. |
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Compensation Committee
In connection with our plan to list our common stock on a national stock exchange, we intend to establish a compensation committee of the board of directors consisting of “independent directors” under the rules of the NYSE American and the definition of non-employee director under Rule 16b-3 promulgated under the Exchange Act. The compensation committee may be responsible for, among other matters:
| ● | reviewing key employee compensation goals, policies, plans and programs; | |
| ● | reviewing and approving the compensation of our directors, chief executive officer and other executive officers; | |
| ● | producing an annual report on executive compensation in accordance with the rules and regulations promulgated by the SEC; | |
| ● | reviewing and approving employment agreements and other similar arrangements between us and our executive officers; and | |
| ● | administering our stock plans and other incentive compensation plans. |
Nominating and Corporate Governance Committee
In connection with our plan to list our common stock on a national stock exchange, we intend to establish a nominating and corporate governance committee of the board of directors consisting of “independent directors” under the rules of the NYSE American, which may be responsible for, among other matters:
| ● | determining the qualifications, qualities, skills and other expertise required to be a director and developing and recommending to the board for its approval criteria to be considered in selecting nominees for director; | |
| ● | identifying and screening individuals qualified to become members of our board of directors, consistent with criteria approved by our board of directors; | |
| ● | overseeing the organization of our board of directors to discharge our board’s duties and responsibilities properly and efficiently; | |
| ● | reviewing the committee structure of the board of directors and the composition of such committees and recommending directors to be appointed to each committee and committee chairmen; | |
| ● | identifying best practices and recommending corporate governance principles; and | |
| ● | developing and recommending to our board of directors a set of corporate governance guidelines and principles applicable to us. |
Other Committees
Our board of directors may establish other committees as it deems necessary or appropriate from time to time.
Director Term Limits
Our board of directors has not adopted policies imposing an arbitrary term or retirement age limit in connection with individuals serving as directors as it does not believe that such a limit is in the best interests of our company. Our board of directors will annually review the composition of our board of directors, including the age and tenure of individual directors. Our board of directors will strive to achieve a balance between the desirability of its members having a depth of relevant experience, on the one hand, and the need for renewal and new perspectives, on the other hand.
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Risk Oversight
Our board of directors oversees the risk management activities designed and implemented by our management. The full board of directors also considers specific risk topics, including risks associated with our strategic plan, business operations and capital structure. In addition, our board of directors regularly receives detailed reports from members of our senior management and other personnel that include assessments and potential mitigation of the risks and exposures involved with their respective areas of responsibility.
Code of Ethics
Our board of directors has adopted a Code of Ethics that applies to all of our employees, including our chief executive officer, chief financial officer and principal accounting officer. Our Code of Ethics will be available on our website at www.TitanCares.com by clicking on “Investor Relations.” If we amend or grant a waiver of one or more of the provisions of our Code of Ethics, we intend to satisfy the requirements under Item 5.05 of Form 8-K regarding the disclosure of amendments to or waivers from provisions of our Code of Ethics that apply to our principal executive officer, financial and accounting officers by posting the required information on our website at the above address within four business days of such amendment or waiver. The information on our website is not part of this prospectus.
Our board of directors, management and all employees of our company are committed to implementing and adhering to the Code of Ethics. Therefore, it is up to each individual to comply with the Code of Ethics and to be in compliance of the Code of Ethics. If an individual is concerned that there has been a violation of the Code of Ethics, he or she will be able to report in good faith to his or her superior. While a record of such reports will be kept confidential by our company for the purposes of investigation, the report may be made anonymously and no individual making such a report will be subject to any form of retribution.
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires our executive officers, directors and persons who beneficially own more than 10% of our common stock to file with the SEC reports of their ownership and changes in their ownership of our common stock. To our knowledge, based solely on review of the copies of such reports and amendments to such reports with respect to the year ended December 31, 2024 filed with the SEC, all required Section 16 reports under the Exchange Act for our directors, executive officers and beneficial owners of greater than 10% of our common stock were filed on a timely basis during the year ended December 31, 2024, except for late Form 4 filings reporting (i) one transaction by Glen Miller, our Chairman and Chief Executive Officer, (ii) one transaction by Jeffrey Rizzo, our former Chief Operating Officer and a former director of our company, (iii) one transaction by Frank Celli, a director of our company, (iv) one transaction by Richard Berman, a former director of our company, and (v) one transaction by Ajay Sikka, a director of our company. As of the date of the filing of this annual report, all such Form 4 filings of Messrs. Miller, Celli and Sikka have been made.
| ITEM 11. | Executive Compensation |
Summary Compensation Table
The following table provides for the fiscal years indicated below certain summary information concerning compensation awarded to, earned by or paid to the individuals who served as “named executive officers” in fiscal 2024. “Officer” is defined in Rule 16a-1 of the Exchange Act to include those who perform a policy-making function, and “named executive officers” are defined by Item 402 of Regulation S-K to be the principal executive officer, the principal financial officer, and the other three most highly compensated executive officers, each of whose total compensation for the last fiscal year exceeded $100,000.
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| Name and Principal Position | Year | Salary | Bonus | Stock Awards (1) | All Other Compensation | Total | ||||||||||||||||
| Glen Miller | 2024 | $ | 266,634 | $ | - | $ | 26,650 | $ | - | $ | 293,284 | |||||||||||
| Chairman, Chief Executive Officer and President | 2023 | 295,000 | - | - | (3) | 4,500 | 299.500 | |||||||||||||||
| Michael Jansen | 2024 | 180,769 | - | - | 5,500 | 186,269 | ||||||||||||||||
| Chief Financial Officer and Secretary | 2023 | 200,000 | - | - | 3,000 | 203,000 | ||||||||||||||||
| Jeffrey Rizzo(2) | 2024 | 248,557 | - | 7,995 | 8,250 | 264,802 | ||||||||||||||||
| Former Chief Operating Officer | 2023 | 275,000 | - | - | 4,500 | 279,500 | ||||||||||||||||
| Ajay Sikka | 2024 | - | - | - | - | - | ||||||||||||||||
| Former Chief Executive Officer and Chief Financial Officer(4) | 2023 | 300,000 | - | - | - | 300,000 | ||||||||||||||||
| (1) | See Note 15 - “Stock-Based Compensation” of the Notes to our audited financial statements for the year ended December 31, 2023 included elsewhere in this prospectus for a detailed description of the assumptions that we used in determining the dollar amounts recognized for financial statement reporting purposes of our stock awards. |
| (2) | Mr. Rizzo served as an officer of our company from May 19, 2023 to February 9, 2025. |
| (3) | On May 19, 2023, we agreed to award 70,100 shares of Series A Preferred Stock that vested immediately to Mr. Miller and, as a result, recorded $5,586,796 of stock-based compensation (See Note 14 - Stockholders’ Equity of the Notes to our audited financial statements for the year ended December 31, 2023 included elsewhere in this prospectus). On September 28, 2023, we agreed with Mr. Miller to cancel such award and the shares of Series A Preferred Stock were rescinded. |
| (4) | Mr. Sikka served as our Chief Executive Officer and Chief Financial Officer prior to his resignation from such offices on May 19, 2023. |
Employment Contracts and Potential Payments Upon Termination or Change in Control
Employment Agreements
On May 15, 2023, we entered into a five-year employment agreement with Michael Jansen, our Chief Financial Officer. On May 19, 2023, we entered into five-year employment agreements with Glen Miller, our Chief Executive Officer, and Jeffrey Rizzo, our former Chief Operating Officer.
The following is a summary of the compensation arrangements set forth in each employment agreement described above:
| Executive | Title | Annual
Base Salary | Initial Restricted Stock Grant in Shares | |||||||
| Glen Miller | Chairman, Chief Executive Officer, and President | $ | 295,000 | 7,948,753 | ||||||
| Jeffrey Rizzo | Former Chief Operating Officer | 275,000 | 7,948,753 | |||||||
| Michael Jansen | Chief Financial Officer and Secretary | 200,000 | 500,000 | |||||||
As an incentive to commence employment with us, pursuant to such agreements, we agreed to issue to each of Messrs. Miller and Rizzo a restricted stock award of 7,948,753 shares of common stock and to Mr. Jansen a restricted stock award of 500,000 shares of common stock, all in accordance with our 2023 equity incentive plan. Such shares of common stock were to vest annually in five equal installments over five years. Additionally, as an incentive to commence employment with Mr. Jansen, we agreed to pay Mr. Jansen a signing bonus of $50,000, payable in five equal monthly installments commencing on the 120th day of employment. As of December 31, 2024 and the date of this report, none of the awards mentioned in this paragraph have been issued.
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In addition, if for any fiscal year during the term of such agreements, our net revenues, exclusive of extraordinary one-time revenues, exceed the Base Amount (as defined below), then commencing on January 1 of the next succeeding fiscal year, each of Messrs. Jansen’s and Miller’s base salary will be, and Mr. Rizzo’s base salary was to be, increased by 10% for every $50,000,000 of annual revenue we achieved in such fiscal year over the Base Amount. For purposes of the employment agreements, the “Base Amount” is initially $100,000,000 and will be adjusted each January 1 during the term of the agreements to the amount, rounded down to the next increment of $50,000,000, by which the amount of our net revenues, exclusive of extraordinary one-time revenues, for the prior fiscal year exceeded the Base Amount for such fiscal year. In addition to base salary, each of Messrs. Jansen and Miller will be, and Mr. Rizzo was to be, eligible to participate in a yearly discretionary performance-based bonus plan, in accordance with a bonus plan approved by our board of directors, with the bonus target in each calendar year equal to 45% of the executive’s base salary for Mr. Miller and Mr. Rizzo and equal to 15% of the executive’s base salary for Mr. Jansen. The bonuses will be based upon agreed-upon goals and milestones being met by the executive.
Under each of these employment agreements, Messrs. Jansen and Miller will be, and Mr. Rizzo was to be, entitled to severance in the event we terminate his employment without Cause (as defined in the employment agreement), or he resigns from his employment for Good Reason (as defined in the employment agreement). The severance amount for each of Messrs. Miller and Rizzo would be (i) his pro rata base salary through the date of termination, and (ii) a severance amount equal to 12 months’ salary. The severance amount for Mr. Jansen would be (i) his pro rata base salary through the date of termination, and (ii) a severance amount equal to six months’ salary.
Each employment agreement also contains standard employee agreements containing customary confidentiality restrictions and work-product provisions, as well as customary non-competition covenants and non-solicitation covenants with respect to our employees, consultants and customers.
Consulting Agreement
In connection with our acquisition of SWS in May 2024, we entered into a consulting agreement dated as of May 31, 2024 with Dominic Campo, then the Chief Executive Officer of SWS and currently our Chief Operating Officer. Pursuant to such consulting agreement, we are obligated to pay to Mr. Campo a consulting fee in the amount of $23,333.33 per month, commencing on June 1, 2024, for consulting services in connection with, among other matters, the integration of the operations of SWS with the operations of Titan Trucking, new customer engagement and the identification and negotiation of new acquisition opportunities. The consulting agreement has a term of five years and includes standard non-compete and non-solicitation provisions. Following the appointment of Mr. Campo as our Chief Operating Officer on March 28, 2025, Mr. Campo and our board of directors commenced discussions and negotiations regarding the termination of Mr. Campo’s consulting agreement and the compensation to be paid to Mr. Campo and an executive officer and employee of our company. It is expected that such negotiations will be resolved in April 2025.
Board of Directors Compensation
No compensation was paid to our non-employee directors for services rendered during the year ended December 31, 2024. Directors who are employees of our company or of any of our subsidiaries receive no additional compensation for serving on our Board of Directors or any of its committees.
In 2025, we intend to adopt a program regarding compensation to our non-employee directors. The director compensation program may include compensation to our non-employee directors in cash, equity or a combination of the two.
Compensation Committee Interlocks and Insider Participation
None of our executive officers currently serves, or in the past fiscal year has served, as a member of the board of directors or compensation committee of another entity that had one or more of its executive officers serving as a member of our board of directors or compensation committee. None of the members of our compensation committee, when appointed, will have at any time been one of our officers or employees.
Equity Incentive Plan
2023 Equity Incentive Plan. On October 10, 2023, our board of directors approved, and on or about October 10, 2023 our stockholders approved, the 2023 Stock Incentive Plan (the “2023 Plan”) to provide an additional means to attract, motivate, retain and reward selected employees and other eligible persons. Effective January 10, 2024 and in conjunction with the reincorporation of our company in the State of Nevada, the 2023 Plan was adopted.
Purpose. The purpose of our 2023 Plan is to encourage and enable our and our affiliates’ officers, employees, directors and other key persons (including consultants and prospective employees) upon whose judgment, initiative and efforts we largely depend for the successful conduct of our business to acquire a proprietary interest in our company.
Eligibility. Participants in our 2023 Plan may include full or part-time officers, employees, directors and key persons (including advisors and consultants) of our company or our affiliates who are selected to receive awards from time to time by the administrator in its sole discretion.
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Administration. Our 2023 Plan will be administered by the compensation committee of our board of directors, or, if at any time our compensation committee is not in existence, our board of directors. In addition, to the extent applicable law permits, our board of directors may delegate any of its authority under our 2023 Plan to another committee or one or more officers, and our compensation committee may delegate any of its authority hereunder to a sub-committee or to one or more officers, except that no such delegation is permitted with respect to awards made to individuals who are subject to Section 16 of the Exchange Act unless the delegation is to another committee consisting entirely of “nonemployee directors” within the meaning of Rule 16b-3 of the Exchange Act. Subject to the provisions of our 2023 Plan, the administrator has the power to administer the plan, including but not limited to, the power to select the eligible officers, employees, directors, and key employees to whom awards are granted; to determine the number of shares to be covered by each award; to determine the terms and conditions of any award and to amend any outstanding award.
Authorized Shares. A total of 32,500,000 shares of our common stock are authorized for issuance under our 2023 Plan. As of the date of this report, stock option grants for the purchase of an aggregate of 24,500,000 shares of common stock have been made under the 2023 Plan, and 8,000,000 shares authorized under the 2023 Plan remain available for award purposes. The 2023 Plan does not have a limitation on the number of authorized shares that may be issued pursuant to incentive stock options. The shares available for issuance may be authorized but unissued shares or shares reacquired by us and held in its treasury. The share reserve under our 2023 Plan is depleted by the maximum number of shares, if any, that may be issuable under an award as determined at the time of grant. However, awards that may only be settled in cash (determined at the time of grant) do not deplete the share reserve.
If (i) an award lapses, expires, terminates or is cancelled without the issuance of shares, (ii) it is determined during or at the conclusion of the term of an award that all or some portion of the shares with respect to which the award was granted will not be issuable on the basis that the conditions for such issuance will not be satisfied, (iii) shares are forfeited under an award, (iv) shares are issued under any award and we subsequently reacquire them pursuant to rights reserved upon the issuance, (v) an award or a portion thereof is settled in cash, or shares are withheld by us in payment of the exercise price or withholding taxes of an award, then such shares will be recredited to the reserve and may again be used for new awards. However, shares recredited to reserve pursuant to clause (iv) in the preceding sentence may not be issued pursuant to incentive stock options.
Adjustments to Shares. If, as a result of any reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split or other similar change in our capital stock, the outstanding shares are increased or decreased or are exchanged for a different number or kind of shares or other securities of our company, or additional shares or new or different shares or other securities of our company or other non-cash assets are distributed with respect to such shares or other securities, or, if, as a result of any merger, consolidation or sale of all or substantially all of our assets, the outstanding shares are converted into or exchanged for a different number or kind of securities of our company or any successor entity (or a parent or subsidiary thereof), the administrator will make an appropriate or proportionate adjustment in (i) the maximum number of shares reserved for issuance under our 2023 Plan; (ii) the number and kind of shares or other securities subject to any then outstanding awards under our 2023 Plan; and (iii) the exercise price for each share subject to any then outstanding stock options. The administrator also may adjust the number of shares subject to outstanding awards and the exercise price and the terms of outstanding awards to take into consideration material changes in accounting practices or principles, extraordinary dividends, acquisitions or dispositions of stock or property or any other event if it is determined by the administrator that such adjustment is appropriate to avoid distortion in the operation of our 2023 Plan, subject to the limitations described in our 2023 Plan.
Effect of a Sale Event. Unless otherwise provided in an award or other agreement, upon a “sale event,” if the successor or surviving corporation (or parent thereof) so agrees, then, without the consent of any holder of an award (or other person with rights in an award), some or all outstanding awards may be assumed, or replaced with the same type of award with similar terms and conditions, subject to adjustments described in our 2023 Plan, by the successor or surviving corporation (or parent thereof) in the sale event. A “sale event” is generally defined for this purpose as (i) any person becoming the beneficial owner of 50% or more of the combined voting power of our then-outstanding securities (subject to exceptions and other limitations scribed in our 2023 Plan), (ii) our stockholders approving a plan of complete liquidation or dissolution of our company, (iii) the consummation of (a) an agreement for the sale or disposition of all or substantially all of our assets (other than to certain excluded persons), (b) a merger, consolidation or reorganization of our company with or involving any other corporation (subject to specified exceptions), or (iv) a change in the majority of our board of directors that is not approved by a supermajority of the existing board. More detailed descriptions and additional information on limitations relating to each of these sale events is are in our 2023 Plan.
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If, after a sale event in which the awards are assumed or replaced, the award holder experiences a termination event as a result of a termination of service without cause, due to death or disability, or as a result of a resignation for good reason, in each case within 24 months after a sale event, then the award holder’s awards will be vested in full or deemed earned in full (assuming target performance, if applicable).
To the extent the awards are not assumed or replaced in the sale event, then, (i) each option will become immediately and fully vested and, unless the administrator determines otherwise, will be canceled on the sale event in exchange for a cash payment equal to the excess of the price paid in the sale event over the exercise price of the option, and all options with an exercise price lower than the price paid in the sale event will be canceled for no consideration, (ii) restricted stock and restricted stock units (not subject to performance goals) will be vested in full and settled, along with any accompanying dividend equivalent units, and (iii) all awards subject to performance goals with outstanding performance periods will be canceled in exchange for a cash payment equal to the amount that would have been due under the award if performance had been satisfied at the better of target or the performance trend through the sale event.
Solely with respect to awards granted on and after the completion of this offering, and except as otherwise expressly provided in any agreement with an award holder, if the receipt of any payment by an award holder under the circumstances described above would result in the payment by the award holder of any excise tax provided for in Section 280G and Section 4999 of the Code, then the amount of such payment shall be reduced to the extent required to prevent the imposition of such excise tax.
Limit on Director Awards. The maximum value of awards granted during a single fiscal year to any non-employee director, taken together with any cash fees paid during the fiscal year to the non-employee director in respect of the director’s service as a member of our board of directors during such year (including service as a member or chair of any committees of the board), shall not exceed $250,000 in any calendar year, although our board of directors may, in its discretion, make exceptions to the limit in extraordinary circumstances.
Types of Awards. Awards under our 2023 Plan may consist of incentive stock options, non-qualified stock options, restricted stock awards, unrestricted stock awards, restricted stock units, or any combination of those awards. Some provisions of our 2023 Plan relating to these award types are summarized below.
Stock Options. A stock option is an award entitling the recipient to acquire shares, at such exercise price as determined by the administrator (which may not be lower than the fair market value of the underlying shares on the date of grant) and subject to such restrictions and conditions as the administrator may determine at the time of grant. Conditions may be based on continuing employment (or other service relationship) and/or achievement of pre-established performance goals and objectives. Stock options granted under our 2023 Plan may be either non-qualified stock options or incentive stock options. Incentive stock options may be granted only to our employees or employees of our subsidiaries, and must certain requirements specified in our 2023 Plan and the Code. Stock options will become exercisable at such time or times as determined by the administrator at or after the grant date and set forth in the stock option agreement. The administrator may at any time accelerate the exercisability of all or any portion of any stock option.
Restricted Stock. A restricted stock award is a grant (or sale, at such purchase price as determined by the administrator) of shares that are subject to such restrictions and conditions as the administrator may determine at the time of grant. Conditions may be based on continuing employment (or other service relationship) or achievement of pre-established performance goals and objectives. The terms and conditions of each such agreement shall be determined by the administrator.
Unrestricted Stock. The administrator may grant (or sell at par value or such higher purchase price determined by the administrator) unrestricted shares, in respect of past services, in exchange for cancellation of a compensation right, as a bonus, or any other valid consideration, or in lieu of any cash compensation due to such individual.
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Restricted Stock Units and Dividend Equivalent Units. The administrator may grant restricted stock units representing the right to receive a future payment of cash, the amount of which is determined by reference to our shares, shares or a combination of cash and shares. The administrator will determine all terms and conditions of an award of restricted stock units, including but not limited to the number granted, in what form they will be settled, whether performance goals must be achieved for the restricted stock units to be earned, the length of any vesting or performance period and the date of payment, and whether the grant will include dividend equivalent units. The administrator will determine all terms and conditions of an award of dividend equivalent units, including whether payment will be made in cash or shares. However, no dividend equivalent units may be paid with respect to restricted stock units that are not earned or that do not become vested.
Termination of Employment or Service. Except as otherwise provided in any award agreement or an award holder’s employment offer letter, severance letter or services agreement, or as determined by administrator at the time of the award holder’s termination of employment or service:
| ● | If the termination is for cause, the award holder will forfeit all outstanding awards immediately upon termination and will not be permitted to exercise any stock options following termination. | |
| ● | If the termination is due to the award holder’s death or disability (when the award holder could not have been terminated for cause), the award holder will forfeit the unvested portion of any award, and any vested stock options will remain exercisable until the earlier of the original stock option expiration date or 12 months from the date of termination. | |
| ● | If the termination was for any reason other than cause, death or disability (when the award holder could not have been terminated for cause), the award holder will forfeit the unvested portion of any award, and any vested stock options will remain exercisable until the earlier of the original stock option expiration date or three months from the date of termination. |
Term of Plan and Plan Amendments. Our 2023 Plan will continue until all shares reserved for issuance under our 2023 Plan have been issued, or, if earlier, until such time as the administrator terminates our 2023 Plan as described below. No incentive stock options may be granted after the ten (10) year anniversary of the date of stockholder approval of our 2023 Plan unless the stockholders have approved an extension.
Our board of directors may, at any time, amend, terminate or discontinue our 2023 Plan, except that our stockholders must approve any amendment to the extent approval is required by Section 16 of the Exchange Act, the Code, the listing requirements of any principal securities exchange or market on which our shares are then traded or any other applicable law. In addition, stockholders must approve any amendment to our 2023 Plan that would materially increase the number of shares reserved (except as permitted by the adjustment provisions of our 2023 Plan) or that would diminish the protections afforded by the anti-repricing provisions of our 2023 Plan.
Any termination of our 2023 Plan will not affect the authority of our board of directors and the administrator to administer outstanding awards or affect the rights of award holders with respect to awards previously granted to them.
Award Amendments, Cancellation and Disgorgement. Subject to the anti-repricing and other requirements of our 2023 Plan, the administrator may modify, amend or cancel any award. However, except as otherwise provided in our 2023 Plan or an award agreement, the consent of the award holder is required to any amendment that materially diminishes the holder’s rights under the award. Our 2023 Plan includes exceptions to the consent requirement for actions necessary to comply with applicable law or the listing requirements of securities exchanges, to preserve favorable accounting or tax treatment of any award for our company or to the extent the administrator determines that an action does not materially and adversely affect the value of the award or is in the best interest of the affected award holder or any other person who has an interest in the award.
The administrator has full power and authority to terminate or cause an award holder to forfeit an award, and require an award holder to disgorge to us, any gains attributable to the award, if the award holder engages in any action constituting, as determined by the administrator in its discretion, cause for termination, or a breach of any award agreement or any other agreement between the award holder and us or one of our affiliates concerning noncompetition, non-solicitation, confidentiality, trade secrets, intellectual property, non-disparagement or similar obligations. In addition, any awards granted pursuant to our 2023 Plan, and any shares issued or cash paid pursuant to an award, will be subject to any recoupment or claw-back policy that is adopted by us from time to time, or any recoupment or similar requirement otherwise made applicable to us by law, regulation or listing standards.
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Repricing and Backdating Prohibited. Notwithstanding anything in our 2023 Plan to the contrary, and except for the adjustments provided for in our 2023 Plan, neither the administrator nor any other person may (i) amend the terms of outstanding stock options to reduce the exercise or grant price of such outstanding stock options; (ii) cancel outstanding stock options in exchange for stock options with an exercise or grant price that is less than the exercise or grant price of the original stock options; or (iii) cancel outstanding stock options with an exercise or grant price above the current fair market value of a share in exchange for cash or other securities. In addition, the administrator may not make a grant of a stock option with a grant date that is effective prior to the date the administrator takes action to approve the award.
Incentive Plan Awards
The following table sets forth information relating to stock option grants made to our named executive officers during the fiscal year ended December 31, 2024.
| Date
of Option Grant | # of Options | Fair Value($)(1) | ||||||||
| Glen Miller | December 31, 2024 | 10,000,000 | $ | 26,650 | ||||||
| Jeffrey Rizzo | December 31, 2024 | 3,000,000 | 7,995 | |||||||
| (1) | Reflects the aggregate fair value computed in accordance with the provisions of the Financial Accounting Standard Board Accounting Standards Codification Topic 718, or ASC 718. These amounts reflect the accounting cost for these stock options and do not reflect the actual economic value that may be realized by the named executive officer upon the vesting of the stock options, the exercise of the stock options, or the sale of the common stock underlying such stock options. |
Outstanding Equity Awards at Fiscal Year-End
The following table sets forth outstanding equity awards to our named executive officers as of December 31, 2024.
| Option Awards | Stock Awards | |||||||||||||||||||||
| Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price | Option Expiration Date | Number of Shares or Units of Stock that have not Vested | Market Value of Shares or Units of Stock that Have Not Vested | ||||||||||||||||
| Glen Miller | 10,000,000 | - | $ | 0.04 | 12/31/2029 | - | $ | - | ||||||||||||||
| Jeffrey Rizzo | 3,000,000 | - | 0.04 | 12/31/2029 | - | - | ||||||||||||||||
Director Compensation
General
The following discussion describes the significant elements of the expected compensation program for members of the board of directors and its committees. The compensation of our directors is designed to attract and retain committed and qualified directors and to align their compensation with the long-term interests of our stockholders. Directors who are also executive officers (each, an “Excluded Director”) will not be entitled to receive any compensation for his or her service as a director, committee member or Chair of our board of directors or of any committee of our board of directors.
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Director Compensation
Our non-employee director compensation program is designed to attract and retain qualified individuals to serve on our board of directors. Our board of directors, on the recommendation of our compensation committee, will be responsible for reviewing and approving any changes to the directors’ compensation arrangements. In consideration for serving on our board of directors, each director (other than Excluded Directors) will be paid an annual retainer. All directors will be reimbursed for their reasonable out-of-pocket expenses incurred while serving as directors.
Prior to December 31, 2024, each of our non-employee directors received no cash compensation for their service on the board of directors. The directors were entitled to option awards as compensation for their service. On December 31, 2024, our board of directors approved the following new compensation program for the non-employee members of our board of directors.
Cash Compensation. Under such program, we will pay each non-employee director a cash fee, payable quarterly, of $40,000 per year for service on our board of directors.
Committee Fees. If a non-employee director is designated to participate on a committee of our board of directors as either a chairperson or non-chairperson member, such director will be entitled to compensation in addition to the quarterly cash fee in accordance with the following table:
| Chair | Member | |||||||
| Audit Committee | $ | 5,000/qtr | $ | 2,500/qtr | ||||
| Compensation Committee | $ | 5,000/qtr | $ | 2,500/qtr | ||||
| Nominating and Governance Committee | $ | 5,000/qtr | $ | 2,500/qtr | ||||
Equity Awards. Each non-employee director will receive a one-time initial restricted stock unit award for shares of our common stock, which shares shall vest in arrears in two equal tranches on the first and second anniversaries of service on our Board. The amount will be set by the Compensation Committee. Each non-employee director shall also be eligible to receive grants of stock options, each in an amount designated by the Compensation Committee of our board of directors, from any equity compensation plan approved by the Compensation Committee of our Board. Directors who receive such awards for their service on the board will be entitled to keep the vested grants for the year pro rata up to the date of a “qualified event”. A “qualified event” includes (i) death, (ii) incapacitation from which the director is not likely to return, (iii) removal other than for cause, (iv) resignation, (v) voluntarily electing not to stand for re-election, or (vi) not being nominated for election to the board for an additional term. In the case of (v) and (vi), the last date shall be the date on which the new director’s term begins.
In addition to such compensation, we will reimburse each non-employee director for all pre-approved expenses within 30 days of receiving satisfactory written documentation setting out the expense actually incurred by such director. These include reasonable transportation and lodging costs incurred for attendance at any meeting of our Board of Directors.
The following table sets forth the director compensation we paid in the year ended December 31, 2024 (excluding compensation to our executive officers set forth in the summary compensation table above).
| Name | Fees Earned or Paid in Cash | Stock Awards(1) | Total ($) | |||||||||
| Richard Berman | $ | — | $ | 3,998 | $ | 3,998 | ||||||
| Frank Celli | — | 22,653 | 22,653 | |||||||||
| Ajay Sikka | — | 3,998 | 3,998 | |||||||||
| Total: | $ | $ | 30,649 | $ | 30,649 | |||||||
| (1) | The amounts reflected for Stock Awards in the table above represent the dollar amount recognized for financial statement reporting purposes with respect to the fair value of stock options granted in accordance with ASC Topic 718, Compensation — Stock Compensation. These amounts reflect our accounting expense for these awards, and do not correspond to the actual value that may be realized upon exercise. |
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| ITEM 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
The following table sets forth certain information regarding the beneficial ownership of our common stock as of March 15, 2025 by:
| ● | each person known by us to be a beneficial owner of more than 5% of our outstanding common stock; | |
| ● | each of our directors; | |
| ● | each of our named executive officers; and | |
| ● | all directors and executive officers as a group. |
The amounts and percentages of common stock beneficially owned are reported on the basis of regulations of the SEC governing the determination of beneficial ownership of securities. Under the rules of the SEC, a person is deemed to be a “beneficial owner” of a security if that person has or shares “voting power,” which includes the power to vote or to direct the voting of such security, or “investment power,” which includes the power to dispose of or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which that person has a right to acquire beneficial ownership within 60 days after March 15, 2025. Under these rules, more than one person may be deemed a beneficial owner of the same securities and a person may be deemed a beneficial owner of securities as to which he has no economic interest. Except as indicated by footnote, to our knowledge, the persons named in the table below have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them.
Unless otherwise noted below, the address of the persons listed on the table is c/o Titan Environmental Solutions Inc., 300 E. Long Lake Road, Suite 100A, Bloomfield Hills, Michigan 48304.
Common Stock | Series A Preferred Stock | Series B Preferred Stock | Series C Preferred Stock | Aggregate Voting Shares | ||||||||||||||||||||||||||||||||||||
| Name of Beneficial Owner | No. of Shares | Percentage (%)(1) | No. of Shares | %(2) | No. of Shares | %(3) | No. of Shares | %(4) | No. of Shares | %(5) | ||||||||||||||||||||||||||||||
| Named Executive Officers and Directors | ||||||||||||||||||||||||||||||||||||||||
| Glen Miller | 10,000,000 | (6) | 20.99 | % | — | - | 5,045 | * | — | — | 11,013,213 | 3.74 | % | |||||||||||||||||||||||||||
| Michael Jansen | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Frank E. Celli | 8,500,000 | (7) | 18.42 | % | — | — | 20,183 | 3.49 | % | 125,000 | 25 | % | 12,553,419 | 4.27 | % | |||||||||||||||||||||||||
| Ajay Sikka | 8,265,605 | (8) | 21.11 | % | — | — | — | — | — | — | 8,265,605 | 2.84 | % | |||||||||||||||||||||||||||
| Dominic Campo | 55,200,000 | (9) | 59.45 | % | 552,000 | 39.49 | % | — | — | — | — | 55,200,000 | 19.50 | % | ||||||||||||||||||||||||||
| Executive Officers and Directors as a Group (four persons) | 81,965,605 | 72.63 | % | 552,000 | 39.49 | % | 25,228 | 4.36 | % | 125,000 | 25.0 | % | 87,032,237 | 28.72 | % | |||||||||||||||||||||||||
| 5% Beneficial Owners | ||||||||||||||||||||||||||||||||||||||||
| Titan 5, LLC(10) | 22,653,917 | (11) | 37.57 | % | 226,539 | 16.21 | % | 10,091 | 1.75 | % | — | — | 22,653,917 | 8.00 | % | |||||||||||||||||||||||||
| Titan Holdings 2, LLC(12) | 14,384,390 | (13) | 27.65 | % | 143,844 | 10.29 | % | — | — | — | — | 14,384,390 | 5.08 | % | ||||||||||||||||||||||||||
| Jeffrey Rizzo(14) | 21,479,341 | (15) | 36.33 | % | 184,793 | 13.22 | % | — | — | — | — | 21,479,341 | 7.51 | % | ||||||||||||||||||||||||||
| One Waste Group LLC(16) | 21,500,000 | (17) | 36.35 | % | 215,000 | 15.38 | % | — | — | — | — | 21,500,000 | 7.60 | % | ||||||||||||||||||||||||||
| * | Less than 1%. |
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| (1) |
The ownership percentages in this column have been calculated on the basis of treating as outstanding for a particular person, all shares of our capital stock outstanding on March 15, 2025. On March 15, 2025, there were 37,646,174 shares of common stock, 1,397,900 shares of Series A Preferred Stock, 578,245 shares of Series B Preferred Stock, and 500,000 shares of Class C Preferred Stock outstanding. Each outstanding share of Series A Preferred Stock is convertible into 100 shares of common stock at any time at the election of the holder of such share. Each outstanding share of Series B Preferred Stock is convertible at any time at the election of the holder into shares of common stock equivalent to the stated value of such Series B Preferred Stock, plus accrued and unpaid dividends thereon, divided by $5.00 per share; provided, however, that holders of Series B Preferred Stock will not be able to convert shares of Series B Preferred Stock and receive shares of common stock upon such exercise to the extent that after giving effect to such issuance after exercise, the holder would beneficially own in excess of 4.99% of the number of shares of common stock outstanding immediately after giving effect to the issuance of shares of common stock issuable upon conversion of the applicable shares of Series B Preferred Stock (a “Blocker Restriction”). Each outstanding share of Series C Preferred Stock is convertible at any time at the election of the holder into shares of common stock equivalent to the stated value of such Series C Preferred Stock, divided by $0.05 per share; provided, however, that the conversion of the Series C Preferred Stock is subject to a Block Restriction. On March 15, 2025, there were also 176,443,627 Series A Rights and 7,976,971 Series B Rights outstanding. Each Series A Right and each Series B Right is exercisable for one share of common stock at any time at the election of the holder thereof; provided, however, that the exercise of the Rights is subject to a Blocker Restriction.
To calculate a stockholder’s percentage of beneficial ownership, we include in the numerator and denominator the common stock outstanding and all shares of common stock issuable to that person in the event of the exercise or conversion of outstanding options and other derivative securities, including our Series A Rights, Series B Rights, Series A Preferred Stock, Series B Preferred Stock, and Series C Preferred Stock owned by that person that are exercisable or convertible within 60 days of March 15, 2025. If a person owns Rights, Series B Preferred Stock, or Series C Preferred Stock that are not fully exercisable due to the Blocker Restriction applicable to such person, we have included in the calculation only the number of shares issuable upon the exercise of such Rights, Series B Preferred Stock, or Series C Preferred Stock that, when added to the percentage ownership of the outstanding shares of common stock that such person owns giving effect to all other shares beneficially owned by such person, including shares issuable upon the exercise or conversion of other derivative securities that are exercisable or convertible within 60 days of March 15, 2025, that would bring such person’s beneficial ownership to 4.99% of the number of shares of our common stock outstanding immediately after giving effect to the issuance of shares of common stock issuable upon exercise of the applicable Rights, Series B Preferred Stock, or Series C Preferred Stock. Common stock options and derivative securities held by other stockholders are disregarded in this calculation. Therefore, the denominator used in calculating beneficial ownership among our stockholders may differ. Unless we have indicated otherwise, each person named in the table has sole voting power and sole investment power for the shares listed opposite such person’s name. |
| (2) |
The ownership percentages in this column have been calculated on the basis of treating as outstanding for a particular person, all shares of our Series A Preferred Stock outstanding on March 15, 2025. On December 15, 2024, there were 1,397,900 shares of our Series A Preferred Stock outstanding.
To calculate a stockholder’s percentage of beneficial ownership of Series A Preferred Stock, we include in the numerator such persons number of shares of Series A Preferred Stock and in the denominator, the total number of shares of Series A Preferred Stock outstanding as of March 15, 2025. |
| (3) |
The ownership percentages in this column have been calculated on the basis of treating as outstanding for a particular person, all shares of our Series B Preferred Stock outstanding on March 15, 2025. On March 15, 2025, there were 578,245 shares of our Series B Preferred Stock outstanding.
To calculate a stockholder’s percentage of beneficial ownership of Series B Preferred Stock, we include in the numerator such persons number of shares of Series B Preferred Stock and in the denominator, the total number of shares of Series B Preferred Stock outstanding as of March 15, 2025. |
| (4) |
The ownership percentages in this column have been calculated on the basis of treating as outstanding for a particular person, all shares of our Series C Preferred Stock outstanding on March 15, 2025. On March 15, 2025, there were 500,000 shares of our Series C Preferred Stock outstanding.
To calculate a stockholder’s percentage of beneficial ownership of Series C Preferred Stock, we include in the numerator such persons number of shares of Series C Preferred Stock and in the denominator, the total number of shares of Series C Preferred Stock outstanding as of March 15, 2025. |
| (5) | The ownership percentages in this column have been calculated on the basis of treating as outstanding for a particular person, all shares of our capital stock outstanding on March 15, 2025. On March 15, 2025, there were 37,646,174 shares of common stock, 1,397,900 shares of Series A Preferred Stock, 578,245 shares of Series B Preferred Stock, and 500,000 shares of Series C Preferred Stock outstanding. Each outstanding share of Series A Preferred Stock and Series B Preferred Stock is entitled to vote with the common stock on any matter on an-as converted basis; provided, that the Series B Preferred Stock voting is subject to a Blocker Restriction. The Series C Preferred Stock is not entitled to any votes unless until converted into common stock. On March 15, 2025, there were also 176,443,627 Series A Rights and 7,976,971 Series B Rights outstanding. The Series A Rights and the Series B Rights have no voting rights unless exercised, and such exercise is subject to a Blocker Restriction. |
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| To calculate a stockholder’s voting percentage, we include in the numerator: (i) the number of shares of common stock issued to such stockholder, (ii) the number of votes that such stockholder is entitled to have pursuant to their ownership of shares of Series A Preferred Stock and Series B Preferred Stock (subject to a Blocker Restriction), and (iii) the shares of common stock issuable to such stockholder upon the conversion of Series C Preferred Stock and/or exercise of outstanding Series A Rights and Series B Rights owned by that stockholder that are exercisable within 60 days of March 15, 2025, subject to a Blocker Restriction. To calculate a stockholder’s voting percentage, we include in the denominator: (i) the total number of shares of Common Stock outstanding as of March 15, 2025, (ii) the total number of votes that all stockholders are entitled to have pursuant to their ownership of shares of Series A Preferred Stock, (iii) the total number of votes that all stockholders are entitled to have pursuant to their ownership of shares of Series A Preferred Stock, subject to a Blocker Restriction, and (iv) the shares of common stock issuable to such stockholder upon the conversion of Series C Preferred Stock and/or the exercise of outstanding Series A Rights and Series B Rights owned by that stockholder that are exercisable within 60 days of March 15, 2025, subject to a Blocker Restriction. If a person owns Series B Preferred Stock that is not votable due to a Blocker Restriction, Series C Preferred Stock that is not convertible due to a Blocker Restriction, or Rights that are not fully exercisable due to a Blocker Restriction applicable to such person, we have included in the calculation only the number of shares issuable upon the exercise of such Series B Preferred Stock, Series C Preferred Stock and/or Rights that, when added to the percentage ownership of the outstanding shares of common stock that such person owns giving effect to all other shares beneficially owned by such person, including shares issuable upon the exercise or conversion of other derivative securities that are exercisable or convertible within 60 days of March 15, 2025, that would bring such person’s beneficial ownership to 4.99% of the number of shares of common stock outstanding immediately after giving effect to the issuance of shares of common stock issuable upon exercise of the applicable Series B Preferred Stock, Series C Preferred Stock or Right. Common stock options and derivative securities held by other stockholders are disregarded in this calculation. Therefore, the denominator used in calculating beneficial ownership among our stockholders may differ. Unless we have indicated otherwise, each person named in the table has sole voting power and sole investment power for the shares listed opposite such person’s name. | |
| (6) | Represents shares of common stock issuable upon exercise of 10,000,000 vested options issued on December 31, 2024. Does not include shares of common stock issuable upon the exchange of 1,250,000 Series A Rights, 5,045 shares of Series B Preferred Stock, and/or 504,500 warrants to purchase common stock beneficially owned by Mr. Miller, as such Series A Rights, Series B Preferred Stock, and/or warrants may not be exchanged, converted, or exercised at any time that the holder beneficially owns 4.99% of the outstanding common stock. |
| (7) | Represents shares of common stock issuable upon exercise of 8,500,000 vested options issued on December 31, 2024. Does not include shares of common stock issuable upon the exchange of 927,636 Series A Rights, 20,183 shares of Series B Preferred Stock, the conversion of 125,000 shares of Series C Preferred Stock, and/or the exercise of 2,018,300 warrants to purchase common stock beneficially owned by Mr. Celli, as such Series A Rights, Series B Preferred Stock, Series C Preferred Stock, and/or warrants may not be exchanged, converted, and/or exercised at any time that the holder beneficially owns 4.99% of the outstanding common stock. In addition, this does not include shares of common stock issuable upon the exchange of 44,679,817 Series A Rights owned directly by MVSR, LLC, a Nevada limited liability company (“MVSR”), and indirectly by Frank E. Celli in his capacity as the manager of MVSR, as such Series A Rights may not be exchanged or converted at any time that the holder beneficially owns 4.99% of the outstanding common stock. |
| (8) | Represents: (i) 6,765,600 shares of common stock owned by Mr. Sikka, and (ii) shares of common stock issuable upon exercise of 1,500,000 vested options issued on December 31, 2024. Does not include shares of common stock issuable upon the exchange of 11,500,000 Series A Rights as such Series A Rights may not be exchanged at any time that the holder beneficially owns 4.99% of the outstanding common stock. |
| (9) | Represents shares of common stock issuable upon the conversion of 522,000 shares of Series A Preferred Stock, of which 276,000 shares of Series A Preferred Stock are owned directly by Mr. Campo and 276,000 shares of Series A Preferred Stock are owned by Mr. Campo’s wife, Sharon Campo. |
| (10) | Michelle Rizzo, the sister-in-law of Jeffrey Rizzo, our former Chief Operating Officer and a former director, is the managing member of Titan 5, LLC and, as a result, may be deemed to have voting and investment power with respect to the shares held by Titan 5, LLC. The address of Titan 5, LLC is 3279 Baron Drive, Bloomfield Hills, MI 48302. |
| (11) | Represents shares of common stock issuable upon the conversion of 226,539 shares of Series A Preferred Stock. Does not include additional shares of common stock issuable upon the conversion of 10,091 shares of Series B Preferred Stock as such Series B Preferred Stock may not be converted at any time that the holder beneficially owns 4.99% of the outstanding common stock. |
| (12) | Marilyn Rizzo, the mother of Jeffrey Rizzo, our former Chief Operating Officer and a former director, is the managing member of Titan Holdings 2, LLC and, as a result, may be deemed to have voting and investment power with respect to the shares held by Titan Holdings 2, LLC. The address of Titan Holdings 2, LLC is 37106 Highview, New Baltimore, MI 48047. |
| (13) | Represents shares of common stock issuable upon the conversion of 143,844 shares of Series A Preferred Stock. |
| (14) | The address of Jeffrey Rizzo is 3279 Baron Drive, Bloomfield Hills, MI 48302. |
| (15) | Represents shares of common stock issuable upon the conversion of 184,793 shares of Series A Preferred Stock and shares of common stock issuable upon exercise of 3,000,000 vested options issued on December 31, 2024. |
| (16) | The address of One Waste Group LLC is 3279 Baron Drive, Bloomfield Hills, MI 48302. |
| (17) | Represents shares of common stock issuable upon the conversion of 215,000 shares of Series A Preferred Stock. |
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| ITEM 13. | Certain Relationships and Related Transactions and Director Independence. |
Procedures for Approval of Related Party Transactions
A “related party transaction” is any actual or proposed transaction, arrangement or relationship or series of similar transactions, arrangements or relationships, including those involving indebtedness not in the ordinary course of business, to which we or our subsidiaries were or are a party, or in which we or our subsidiaries were or are a participant, in which the amount involved exceeded or exceeds the lesser of (i) $120,000 or (ii) one percent of the average of our total assets at year-end for the last two completed fiscal years and in which any related party had or will have a direct or indirect material interest. A “related party” includes:
| ● | any person who is, or at any time during the applicable period was, one of our executive officers or one of our directors; | |
| ● | any person who beneficially owns more than 5% of our common stock; | |
| ● | any immediate family member of any of the foregoing; or | |
| ● | any entity in which any of the foregoing is a partner or principal or in a similar position or in which such person has a 10% or greater beneficial ownership interest. |
While our board of directors has not yet adopted a written related-party transactions policy, our board of directors will review all material facts of all related-party transactions and either approve or disapprove entry into the related-party transaction, subject to certain limited exceptions. In determining whether to approve or disapprove entry into a related-party transaction, our board of directors shall take into account, among other factors, the following: (i) whether the related-party transaction is on terms no less favorable to us than terms generally available from an unaffiliated third party under the same or similar circumstances; (ii) the extent of the related party’s interest in the transaction; and (iii) whether the transaction would impair the independence of a non-employee director.
Related Party Transactions
Other than compensation arrangements for our named executive officers and directors, which we describe herein, the only related party transactions to which we were a party during the years ended December 31, 2023 and 2024, since December 31, 2024, or any currently proposed related party transaction, are as follows, each of which was entered into prior to the adoption of the approval procedures described above.
Between February 1, 2023 and December 19, 2024, Titan Holdings 2, LLC, an entity that beneficially owned more than 5% of our common stock, made loans to us in the aggregate amount of $805,470 that mature on April 30, 2028. The interest rate on the loans was 10.5% per annum for the period of February 1, 2023 through November 30, 2023 and then 13.50% per annum commencing on December 1, 2023. Accrued interest is required to be paid on a monthly basis. However, we have failed to make all interest payments on these loans since March 27, 2023. On January 16, 2025, we repaid $75,000 of the principal amount of these loans.
On June 13, 2023, we sold and issued a 20% original issue discount convertible promissory note to Titan 5, LLC, an entity that beneficially owned more than 5% of our common stock, for a purchase price of $100,000. The note has a principal amount of $120,000, an annual interest rate of 10%, and a maturity date of June 13, 2024. The note contains a “rollover rights” conversion feature that enables the holder to convert all or part of the note’s principal and accrued interest in the event of a public offering or private placement of our equity, equity-linked securities, or debt securities into the consideration for such public or private offering. On June 29, 2024, Titan 5, LLC extended the maturity date of this note to December 31,2024. We have not yet made any payments of principal or interest on this note.
Between June 13, 2023 and June 24, 2023, we sold and issued two 20% original issue discount convertible promissory notes to Glen Miller, our Chairman of the Board and Chief Executive Officer, for an aggregate purchase price of $400,000. The notes are each in the principal amount of $240,000. The notes have an annual interest rate of 10% per annum and had original maturity dates ranging from June 13, 2024 to July 24, 2024. The notes contain “rollover rights” conversion features that enables the holder to convert all or part of the notes’ principal and accrued interest in the event of a public offering or private placement of our equity, equity-linked securities, or debt securities into the consideration for such public or private offering. On March 27, 2025, Mr. Miller extended the maturity dates of these notes to May 31, 2025. We have not yet made any payments of principal or interest on these notes.
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In July 2023, we entered into an exchange agreements with (i) Ajay Sikka, a director of our company, pursuant to which Mr. Sikka exchanged 45,000 shares of our former Series B Preferred Stock, 5,000,000 shares of common stock and a payment receivable from us for unreimbursed advances in the amount of $100,000 for Series A Rights to acquire an aggregate of 11,500,000 shares of common stock, and (ii) Glen Miller, our Chairman of the Board and Chief Executive Officer, pursuant to which Mr. Miller exchanged a 20% original issue discount convertible promissory notes in the principal amount of $62,500, and accrued interest thereon, for Series A Rights to acquire an aggregate of 1,250,000 shares of common stock.
On July 20, 2023, we entered into an exchange agreement with Renovare Environmental, Inc. (“REI”), an entity that beneficially owned more than 5% of our common stock, pursuant to which REI exchanged 14,118,233 shares of our common stock and 1,250,000 shares of our former Series B Preferred Stock for Series A Rights and Series B Rights. Following the closing of such transaction, we entered into certain settlement agreements on July 20, 2023 with REI and certain stockholders of REI signatory thereto pursuant to which, in consideration of a release by such stockholders of any and all claims such stockholders may have had against REI or our company, REI transferred Series A Rights to acquire an aggregate of 96,989,534 shares of common stock and Series B Rights to acquire 9,883,357 shares of common stock, to such stockholders, including a settlement agreement with an entity controlled by Frank E. Celli, a director of our company, pursuant to which REI transferred to such entity Series A Rights to acquire 44,679,817 shares of our common stock.
On October 30, 2023, Glen Miller, our Chairman of the Board and Chief Executive Officer, made a loan to us in the amount of $250,000. The loan bears interest at the rate of 10% per annum and was to be repaid on the earlier of 30 days of our receipt of bridge funding or June 30, 2024. The loan also had a provision stating that we will pay a 10% late fee in the event repayment is not made within 30 days of maturity. To date, we have made no payments with respect to this loan.
On December 22, 2023, we sold and issued a 20% original issue discount convertible promissory note to FC Advisory, a company owned by Frank Celli, a director of our company, for a purchase price of $50,000. The note is in the principal amount of $60,000, has an annual interest rate of 10%, and had an original maturity date of December 22, 2024. The note contains a “rollover rights” conversion feature that enables the holder to convert all or part of the note’s principal and accrued interest in the event of a public offering or private placement of our equity, equity-linked securities, or debt securities into the consideration for such public or private offering. On March 6, 2025, FC Advisory extended the maturity date of this note to May 31, 2025. We have not yet made any payments of principal or interest on this note.
On December 28, 2023, we sold and issued a 20% original issue discount convertible promissory note to Frank Celli, a director of our company, for a purchase price of $125,000. The note has a principal amount of $150,000, an annual interest rate of 10%, and had an original maturity date of December 28, 2024. The note contains a “rollover rights” conversion feature that enables the holder to convert all or part of the note’s principal and accrued interest in the event of a public offering or private placement of our equity, equity-linked securities, or debt securities into the consideration for such public or private offering. On March 6, 2025, Mr. Celli extended the maturity date of this note to May 31, 2025. We have not yet made any payments of principal or interest on this note.
On February 23, 2024, Glen Miller, our Chief Executive Officer, made an original issue discount loan to us in the amount of $50,000. The loan is evidenced by a promissory note in the principal amount of $55,000 that is non-interest bearing and originally matured on June 30, 2024. The loan also had a provision stating that we will pay a 10% late fee in the event repayment is not made within 30 days of maturity.
On February 28, 2024, we sold and issued a 25% original issue discount convertible promissory note to Frank Celli, a director of our company, for a purchase price of $50,000. The note has a principal amount of $62,500, an annual interest rate of 11%, and a maturity date of August 31, 2025. The note contains a “rollover rights” conversion feature that enables the holder to convert all or part of the note’s principal and accrued interest in the event of a public offering or private placement of our equity, equity-linked securities, or debt securities into the consideration for such public or private offering.
We have an informal agreement with Titan 5, LLC, an entity that beneficially owned more than 5% of our common stock, to borrow from Titan 5, LLC as working capital needs arise. These additional funds are to be repaid as funding becomes available. As of the date of this report, we have borrowed $107,000 in additional funding pursuant to this arrangement and have not repaid any amounts borrowed.
Board Independence
Our board of directors currently consists of three members. Of these, our board has determined that Frank Celli qualifies as “independent director” under the listing standards of the NYSE American and does not have any material relationships with our company that might interfere with his exercise of independent judgment. In making such a determination, our board has reviewed and discussed information provided by Mr. Celli and us with regard to Mr. Celli’s business and personal activities and relationships as they may relate to us and our management.
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| ITEM 14. | Principal Accountant Fees and Services |
Audit Fees
The aggregate fees billed for professional services rendered by Freed Maxick P.C., our principal accountants for the years ended December 31, 2024 and 2023, for the audit of financial statements, quarterly reviews of our interim financial statements and services normally provided by the independent accountant in connection with statutory and regulatory filings or engagements for these periods were as follows:
For the Years ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| Audit Fees (1) | $ | 349,500 | $ | 378,900 | ||||
| Audit Related Fees | 32,000 | 268,500 | ||||||
| Tax Fees | - | - | ||||||
| Total | $ | 381,500 | $ | 647,400 | ||||
| (1) | Estimated; subject to finalization |
Audit fees during the years ended December 31, 2024 and 2023 were for professional services rendered for the audit of our annual consolidated financial statements on Form 10-K, for the reviews of the financial statements included in our Quarterly Reports on Form 10-Q, and for and for services that are normally provided by the auditor in connection with statutory and regulatory filings or engagements, including consents. Audit-related fees for the year ended December 31, 2024 and 2023 included fees for financial statement reviews in connection with proposed and consummated acquisitions. There were no fees billed for taxes or other related services.
Our board of directors pre-approves all services provided by our independent auditors. All of the above services and fees were reviewed and approved by our board of directors either before or after the respective services were rendered.
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PART IV
| ITEM 15. | Exhibits and Financial Statement Schedules |
(a) (1) Financial Statements
See “Index to Consolidated Financial Statements” on Page F-1.
(2) Financial Statement Schedule
All financial statement schedules are omitted because they are not applicable or the amounts are immaterial and not required, or the required information is presented in the financial statements and notes beginning on F-1 on this report.
(3) Exhibits
The exhibits set forth below are filed as part of this Annual Report on Form 10-K.
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| * | Filed herewith. |
| ** | Furnished herewith. |
| # | Indicates a management contract or compensatory plan. |
| ITEM 16. | Form 10-K Summary |
None.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized, on the 31st day of March, 2025.
| TITAN ENVIRONMENTAL SOLUTIONS INC. | ||
| By: | /s/ Glen Miller | |
| Glen
Miller Chief Executive Officer | ||
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Glen Miller and Michael Jansen, and each of them individually, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution for him or her, and in his or her name in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, and any of them, his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons in the capacities and on the dates indicated.
| Signature | Title | Date | ||
| /s/Glen Miller | Chief Executive Officer and Chairman | March 31, 2025 | ||
| Glen Miller | (Principal Executive Officer) | |||
| /s/Michael Jansen | Chief Financial Officer | March 31, 2025 | ||
| Michael Jansen | (Principal Financial and Accounting Officer) | |||
| /s/Frank E. Celli | Director | March 31, 2025 | ||
| Frank E. Celli | ||||
| /s/Ajay Sikka | Director | March 31, 2025 | ||
| Ajay Sikka |
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TITAN ENVIRONMENTAL SOLUTIONS INC. AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
| F-1 |
Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of Titan Environmental Solutions, Inc.
Opinion on the Financial Statements
Explanatory Paragraph – Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has a significant working capital deficiency, has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. This raises substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Explanatory Paragraph – Discontinued Operations
As discussed in Note 1 and Note 4 to the consolidated financial statements, the Company sold its subsidiary, Recoup Technologies, Inc., (“Recoup”) on October 31, 2024. Accordingly, the historical financial and operating data of the Company reflects Recoup’s results as a discontinued operation and amounts and disclosures pertain to continuing operations for all periods presented, unless otherwise noted.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
| F-2 |
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Business Combination
Critical Audit Matter description
As discussed in Notes 1 and 3 of the financial statements, on May 31, 2024, the Company completed a business acquisition of Standard Waste Services, LLC. The Company was determined to be both the legal and accounting acquirer.
In aggregate, the determination of the fair value of the consideration transferred in the acquisition was valued at approximately $16.1 million. The Company measured the assets acquired and liabilities assumed at fair value, which resulted in the recognition of additional property and equipment, intangible assets and goodwill. Certain estimated fair values for the acquisition, including goodwill, anticipated intangible assets, property and equipment, and promissory notes, are not yet finalized. The anticipated intangible assets consist of contractual backlog, customer relationships, and tradenames. The purchase price was preliminarily allocated based on information available at the acquisition date and is subject to change as the Company completes its analysis of the fair values at the date of the acquisition during the measurement period not to exceed one year, as permitted under FASB ASC 805.
We identified the accounting for the business combination as a critical audit matter due to the complex nature of transaction, including the valuation of the purchase price, which required the use of significant judgments and estimates on the part of management. Auditing these elements required an increased level of audit effort.
How the Critical Audit Matter was addressed in the Audit
Addressing the matter involved performing subjective procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements. The primary procedures we performed included: (i) Obtaining and reading the Membership Interest Purchase agreement, (ii) auditing the appropriateness of management’s conclusions surrounding the classification of this transaction as a business combination, (iii) auditing management’s assessment of the identification of assets to be acquired and liabilities assumed and valued, and (iv) and auditing the disclosures over this transaction.
Disposal of Business
Critical Audit Matter description
As discussed in Notes 1 and 4 of the financial statements, on October 31, 2024 the Company completed the sale of its subsidiary Recoup Technologies, Inc. (“Recoup”) in exchange for consideration of $1,000,000. The consideration was comprised of the forgiveness of $750,000 of accounts payables and the receipt of a $250,000 note receivable. Additionally, as part of the agreed upon terms of the sale, the Company agreed to indemnify approximately $594,000 of accounts payable held by Recoup.
We identified the accounting, presentation and disclosure of the disposal as a critical audit matter. The accounting and disclosure of business disposals and discontinued operations is especially challenging as it requires extensive effort to evaluate the determination of a sale as discontinued operations as well as the complexities surrounding the presentation and disclosure of the discontinued operations retrospectively. In addition, there was subjectivity with regard to the indemnification liabilities and ultimate contingency that arose from them.
| F-3 |
How the Critical Audit Matter was addressed in the Audit
Addressing the matter involved performing subjective procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements. The primary procedures we performed included: (i) Obtaining and reading the Stock Purchase Agreement, (ii) review management’s conclusions of the disposal as a discontinued operation, (iii) recalculating the loss on disposal and evaluation of indemnified liabilities, and (iv) assessing the completeness and accuracy of the financial statement disclosures.
Accounting for Series B Redeemable Convertible Preferred Stock
Critical Audit Matter description
As discussed in Note 14 to the financial statements, during the year ended December 31, 2024, the Company designated a new class of Series B Redeemable Convertible Preferred Stock and issued 578,245 shares.
We identified the accounting for the issuance of the Series B Redeemable Convertible Preferred Stock as a critical audit matter. Auditing the accounting for the Series B Redeemable Convertible Preferred Stock was especially challenging due to the complex nature of the relevant accounting guidance. Additionally, as many of the Series B Redeemable Convertible Preferred Stock were issued with warrants, the valuation of each freestanding instrument required an initial measurement and allocation as well as subsequent accounting for the redemption value of the shares.
How the Critical Audit Matter was addressed in the Audit
Addressing the matter involved performing subjective procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements. The primary procedures we performed included: (i) Obtaining and read relevant agreements for the Series B Redeemable Convertible Preferred Stock and warrants, (ii) reviewed and audited management’s conclusions under the relevant guidance enumerated under FASB ASC 480 and FASB ASC 815, (iii) recomputed the allocation of fair value for the freestanding financial instruments and subsequent accounting for redemption value, and (iv) assessing the completeness and accuracy of the financial statement disclosures.
/s/
We have served as the Company’s auditor since 2023.
March 31, 2025
| F-4 |
TITAN ENVIRONMENTAL SOLUTIONS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
| December 31, | December 31, | |||||||
| 2024 | 2023 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable, net of allowance for expected credit losses of $ | ||||||||
| Other receivables | ||||||||
| Note receivable | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Current assets – discontinued operations | ||||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Intangible assets, net | ||||||||
| Goodwill | ||||||||
| Other assets | ||||||||
| Right-of-use assets, net | ||||||||
| Non-current assets – discontinued operations | ||||||||
| Total non-current assets | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES, MEZZANINE EQUITY, AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
| LIABILITIES | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses | ||||||||
| Accrued interest | ||||||||
| Customer deposits | ||||||||
| Accrued payroll and related taxes | ||||||||
| Derivative liability | ||||||||
| Convertible notes payable | ||||||||
| Convertible notes payable - related parties | ||||||||
| Notes payable | ||||||||
| Notes payable - related parties | ||||||||
| Finance lease liability, current | ||||||||
| Operating lease liabilities, current | ||||||||
| Shares to be issued | ||||||||
| Current liabilities – discontinued operations | ||||||||
| Total current liabilities | ||||||||
| Notes payable, net of current portion | ||||||||
| Notes payable, net of current portion - related parties | ||||||||
| Convertible notes payable, net of current portion | ||||||||
| Convertible notes payable, net of current portion - related parties | ||||||||
| Finance lease liability, non-current | ||||||||
| Operating lease liabilities, net of current portion | ||||||||
| Total non-current liabilities | ||||||||
| Total Liabilities | ||||||||
| Commitments and contingencies (Note 16) | ||||||||
| MEZZANINE EQUITY | ||||||||
| Series B Redeemable Convertible Preferred Stock, par value $, and shares outstanding as of December 31, 2024 and 2023, respectively | ||||||||
| STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
| Preferred stock, shares authorized: | ||||||||
| Series A Convertible Preferred Stock, par value $, and shares issued and outstanding as of December 31, 2024 and 2023, respectively | ||||||||
| Common stock, par value $, shares authorized, and shares issued and outstanding as of December 31, 2024 and 2023, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity (deficit) | ( | ) | ||||||
| TOTAL LIABILITIES, MEZZANINE EQUITY, AND STOCKHOLDERS’ EQUITY (DEFICIT) | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-5 |
TITAN ENVIRONMENTAL SOLUTIONS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
| For the Year Ended | ||||||||
| December 31, | ||||||||
| 2024 | 2023 | |||||||
| REVENUE | $ | $ | ||||||
| COST OF REVENUES | ||||||||
| GROSS PROFIT | ||||||||
| OPERATING EXPENSES | ||||||||
| Salaries and salary related costs | ||||||||
| Stock based compensation | ||||||||
| Professional fees | ||||||||
| Amortization expense | ||||||||
| General and administrative expenses | ||||||||
| Total Operating Expenses | ||||||||
| OPERATING LOSS | ( | ) | ( | ) | ||||
| OTHER INCOME (EXPENSE) | ||||||||
| Change in fair value of derivative liability | ||||||||
| Interest expense, net of interest income | ( | ) | ( | ) | ||||
| Gain on forgiveness of note payable | ||||||||
| Other income | ||||||||
| Loss on sale of equipment | ( | ) | ||||||
| Gain on sale of customer contracts | ||||||||
| Gain on exchange of convertible notes for common stock | ||||||||
| Loss on extinguishment of convertible debt and issuance of Series B Preferred Stock | ( | ) | ||||||
| Loss on extinguishment of convertible debt and on issuance of share rights | ( | ) | ||||||
| Total other income (expense) | ( | ) | ( | ) | ||||
| NET LOSS FROM CONTINUING OPERATIONS, BEFORE PROVISION FOR INCOME TAXES | ( | ) | ( | ) | ||||
| Provision for income taxes | ||||||||
| NET LOSS FROM CONTINUING OPERATIONS | ( | ) | ( | ) | ||||
| NET
LOSS FROM DISCONTINUED OPERATIONS, AFTER TAXES (INCLUDING LOSS ON DISPOSAL OF SUBSIDIARY OF $ | ( | ) | ( | ) | ||||
| Net loss | ( | ) | ( | ) | ||||
| Deemed dividend related to Series B Preferred Stock | ( | ) | ||||||
| Deemed dividend related to issuance of warrants | ( | ) | ( | ) | ||||
| Net loss attributable to common stockholders | ( | ) | ( | ) | ||||
| Loss from continuing operations per share, basic and diluted | $ | ) | $ | ) | ||||
| Loss from discontinued operations per share, basic and diluted | ) | ) | ||||||
| Total loss per share, basic and diluted | $ | ) | $ | ) | ||||
| Weighted average common shares outstanding - basic and diluted | ||||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-6 |
TITAN ENVIRONMENTAL SOLUTIONS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY(DEFICIENCY)
| Redeemable Series B Preferred Stock | Members’ Equity | Series A Preferred Stock (1) | Series B Preferred Stock (2) | Common Stock | Additional paid-in | Accumulated | ||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | (Deficiency) | Shares | Amount | Shares | Amount | Shares | Amount | capital | deficit | Total | |||||||||||||||||||||||||||||||||||||
| Balance - January 1, 2024 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||||||||||||
| Issuance of Warrants | - | - | - | - | - | ( | ) | |||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock due to exercise of share rights | - | - | - | - | ( | ) | ||||||||||||||||||||||||||||||||||||||||||
| Series B Preferred Offering | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||
| Series B Preferred Offering costs | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||
| Series A Preferred shares issued in relation to guarantee agreement | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||
| Series A Preferred shares issued in relation to an acquisition of a business | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||
| Issuance of series B preferred | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||||
| Issuance of series B preferred due to extinguishment of debt | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||
| Remeasurement of Series B Preferred Stock to redemption value | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||
| Balance - December 31, 2024 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||||||||||
| Balance - January 1, 2023 | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
| Settlement of note due to contribution | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||
| Net loss (pre-Titan Merger) | - | - | ( | ) | - | - | - | ( | ) | |||||||||||||||||||||||||||||||||||||||
| Effect of reverse acquisition | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||
| Cancelation of Series C Preferred Stock for options | - | - | ( | ) | ( | ) | - | - | ||||||||||||||||||||||||||||||||||||||||
| Issuance of warrants | - | - | - | - | - | ( | ) | |||||||||||||||||||||||||||||||||||||||||
| Exchange of debt, preferred stock and common stock for common stock rights | - | - | - | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||
| Balance - December 31, 2023 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||||||||||||
| (1) | ||
| (2) |
The accompanying notes are an integral part of these consolidated financial statements.
| F-7 |
TITAN ENVIRONMENTAL SOLTUIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
| For the Year Ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Net loss from discontinued operations | ( | ) | ( | ) | ||||
| Net loss from continuing operations | ( | ) | ( | ) | ||||
| Adjustments to reconcile net loss to net cash used in operating activities | ||||||||
| Recovery of credit losses | ( | ) | ( | ) | ||||
| Gain on lease termination | ( | ) | ||||||
| Gain on forgiveness of note payable | ( | ) | ||||||
| Gain on exchange of note payable for common stock | ( | ) | ||||||
| Financing fee on convertible note | ||||||||
| Loss on disposal of property, plant and equipment | ||||||||
| Loss on extinguishment of convertible debt and issuance of Series B Preferred Stock and warrants | ||||||||
| Debt cancelled in exchange for customer contracts | ( | ) | ||||||
| Depreciation and amortization | ||||||||
| Stock based compensation | ||||||||
| Change in fair value of derivative liability and derivative expense | ( | ) | ( | ) | ||||
| Amortization of discounts on debt | ||||||||
| Loss on extinguishment and issuance of share rights | ||||||||
| Changes in assets and liabilities | ||||||||
| Accounts receivable | ( | ) | ||||||
| Prepaid expenses and other current assets | ( | ) | ||||||
| Other receivables | ( | ) | ||||||
| Other assets | ( | ) | ||||||
| Right-of-use asset | ||||||||
| Accounts payable | ||||||||
| Accrued expenses | ||||||||
| Accrued interest | ||||||||
| Customer deposits | ||||||||
| Accrued payroll and payroll taxes | ||||||||
| Finance lease liability | ( | ) | ||||||
| Operating lease liability | ( | ) | ||||||
| Net cash used in operating activities – continuing operations | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Net cash received in reverse acquisition | ||||||||
| Acquisition of business | ( | ) | ||||||
| Acquisition of property and equipment | ( | ) | ( | ) | ||||
| Proceeds from disposal of property and equipment | ||||||||
| Net cash used in investing activities – continuing operations | ( | ) | ( | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Subscription receivable | ||||||||
| Loan origination fees | ( | ) | ||||||
| Series B Offering | ||||||||
| Series B Offering Costs | ( | ) | ||||||
| Proceeds from issuance of warrants | ||||||||
| Offering fees on issuance of warrants | ||||||||
| Proceeds from convertible notes payable and warrants | ||||||||
| Proceeds from convertible notes payable | ||||||||
| Repayments of convertible notes payable | ( | ) | ||||||
| Proceeds from convertible note payables - related parties | ||||||||
| Proceeds from notes payable | ||||||||
| Repayments of notes payable | ( | ) | ( | ) | ||||
| Proceeds from note payables - related parties | ||||||||
| Repayment of notes payable - related parties | ( | ) | ( | ) | ||||
| Net cash provided by financing activities – continuing operations | ||||||||
| CASH FLOWS FROM DISCONTINUED OPERATIONS | ||||||||
| Cash provided by operations - discontinued operations | ||||||||
| Cash provided by (used in) investing activities - discontinued operations | ( | ) | ||||||
| Net cash provided by discontinued operations | ||||||||
| NET INCREASE (DECREASE) IN CASH | ( | ) | ||||||
| CASH FROM CONTINUING OPERATIONS - BEGINNING OF YEAR | ||||||||
| CASH FROM DISCOUNTINUED OPERATIONS - BEGINNING OF YEAR | ||||||||
| CASH - BEGINNING OF YEAR | ||||||||
| CASH FROM CONTINUING OPERATIONS - END OF YEAR | ||||||||
| CASH FROM DISCOUNTINUED OPERATIONS - END OF YEAR | ||||||||
| CASH - END OF YEAR | $ | $ | ||||||
| CASH PAID DURING THE YEAR FOR: | ||||||||
| Interest expense | $ | $ | ||||||
| Income taxes | $ | $ | ||||||
| SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES | ||||||||
| Series A shares issued related to Guarantee agreement | $ | $ | ||||||
| Exercise of Share rights into common stock | $ | $ | ||||||
| Termination of lease | $ | $ | ||||||
| Remeasurement of Series B Preferred Shares to redemption value | $ | $ | ||||||
| Paid in-kind repayment of notes payable – related parties | $ | $ | ||||||
| Non-cash proceeds from sale of business | $ | $ | ||||||
| Promissory notes issued in acquisition of a business | $ | $ | ||||||
| Series A shares issued in acquisition of a business | $ | $ | ||||||
| Non-cash transactions related to reverse acquisition | $ | $ | ||||||
| Settlement of note payable | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-8 |
TITAN ENVIRONEMENTAL SOLUTIONS INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2024 AND 2023
NOTE 1 – ORGANIZATION AND NATURE OF OPERATIONS
Titan Environmental Solutions Inc., formerly known as TraQiQ, Inc. (“Titan” or along with its wholly-owned subsidiaries, referred to herein as the “Company”), is based out of Bloomfield Hills, Michigan and is an integrated provider of non-hazardous solid waste and recycling collection, transportation and disposal services. The Company conducts its business primarily through its principal operating subsidiary, Standard Waste Services, LLC (“Standard”), which provides waste and recycling collection and disposal services to industrial generators and commercial contractors located in Michigan.
On May 31, 2024, the Company completed its acquisition of Standard through its subsidiary, Titan Trucking, LLC (Titan Trucking”). In accordance with ASC 805, the transaction was treated as a business combination (Note 3 – Business Combinations). On May 19, 2023, the Company completed its acquisition of Titan Trucking and Titan Trucking’s wholly owned subsidiary, Senior Trucking, LLC (“Senior”). In accordance with ASC 805 - Business Combinations (“ASC 805”), the transaction was treated as a reverse acquisition for financial reporting purposes, with the Company treated as the legal acquirer and Titan Trucking treated as the accounting acquirer. The Company remains the continuing registrant and reporting company. Accordingly, the historical financial and operating data of the Company, which covers periods prior to the closing date of the Titan Merger, reflects the assets, liabilities, and results of operations for Titan Trucking and does not reflect the assets, liabilities and results of operations of the Company for the periods prior to May 19, 2023 (Note 3 – Business Combinations).
Effective January 10, 2024, the Company redomiciled from a California corporation into a Nevada corporation (the “redomicile”). As a result of the redomicile, the Company’s name was changed from TraQiQ, Inc. (“TraQiQ”) to Titan Environmental Solutions Inc.
On
July 28, 2023, the Company, its wholly-owned subsidiary TraQiQ Solutions, Inc (“Ci2i”), and Ajay Sikka (“Sikka”),
a director of the Company and its former chief executive officer, signed an Assignment of Stock Agreement (the “Assignment Agreement”).
Under the terms of the Assignment Agreement, the Company assigned and transferred to Sikka all of the rights, title, and interests in
the issued and outstanding equity interests of Ci2i in exchange for consideration of $
On October 31, 2024, the Company sold all of the capital stock of its subsidiary Recoup Technologies, Inc. (“Recoup”)
for a purchase price equal to $
Change in Equity Instruments and Share Authorizations Due to Redomicile
As a result of the redomicile, each share of TraQiQ’s’s common stock issued and outstanding immediately prior to the redomicile was exchanged for one share of Titan’s common stock. Additionally, each share of the TraQiQ Series C Convertible Preferred Stock issued and outstanding immediately prior to the effective time of the redomicile was exchanged for one share of Series A Convertible Preferred Stock of the Nevada corporation (the “Series A Preferred Stock”), which has substantially the same rights and preferences as the TraQiQ Series C Preferred Stock. Each of TraQiQ’s Series A Rights to Receive Common Stock issued and outstanding immediately prior to the redomicile was exchanged for one Series A Right to Receive Common Stock of Titan, which has substantially the same rights and preferences as the TraQiQ Series A Rights to Acquire Common Stock. Each of the TraQiQ Series B Rights to Receive Common Stock issued and outstanding immediately prior to the redomicile was exchanged for one Series B Right to Receive Common Stock of Titan, which has substantially the same rights and preferences as the TraQiQ Series B Rights to Acquire Common Stock.
| F-9 |
As
a result of the redomicile, all of TraQiQ’s outstanding warrants were assumed by Titan and now represent warrants to acquire shares
of Titan’s common stock. The redomicile increased the Company’s authorized capital stock to
Going Concern
The Company’s consolidated financial statements as of December 31, 2024 and 2023 are prepared using accounting principles generally accepted in the United States of America (“GAAP”), which contemplates continuation of the Company as a going concern. This contemplates the realization of assets and liquidation of liabilities in the ordinary course of business.
For
the year ended December 31, 2024, the Company had a net loss from continuing operations of $
The
Company’s continuation as a going concern is contingent upon its ability to obtain additional financing and to generate revenue
and cash flow to meet its obligations on a timely basis. The Company will continue to seek to raise additional funding through debt or
equity financing during the next twelve months from the date of issuance of these consolidated financial statements. Management believes
that actions presently being taken to obtain additional funding provide the opportunity for the Company to continue as a going concern.
There is no guarantee the Company will be successful in achieving these objectives. The Company has been successful in attracting substantial
capital from investors interested in the current public status of the Company that has been used to support the Company’s ongoing
cash outlays. This includes raising proceeds of approximately $
NOTE 2 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the regulations of the United States Securities and Exchange Commission.
Principles of Consolidation and Basis of Accounting
The consolidated financial statements include the accounts of Titan Environmental Solutions Inc and its wholly owned subsidiaries. All material inter-company accounts and transactions have been eliminated. The Company’s policy is to prepare its consolidated financial statements on the accrual basis of accounting, whereby revenue is recognized when earned and expenses are recognized when incurred.
Accounting Estimates
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.
| F-10 |
Business Combinations
Under the guidance enumerated in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805, if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, the set is not considered a business and is accounted for as an asset acquisition at which point, the acquirer measures the assets acquired based on their cost, which is allocated on a relative fair value basis.
Business combinations are accounted for utilizing the fair value of consideration determined by the Company’s management and external specialists. The Company recognizes estimated fair values of the tangible and intangible assets acquired and liabilities assumed as of the acquisition date. Goodwill is recognized as any excess in fair value over the net value of assets acquired and liabilities assumed.
Cash
The
Company considers all highly-liquid money market funds and certificates of deposit with original maturities of less than three months
to be cash equivalents. The Company maintains its cash balances with various banks. The balances are insured by the Federal Deposit Insurance
Corporation (“FDIC”) up to $
Accounts Receivable, net
Accounts receivables are recorded at the amount the Company expects to collect on the balance outstanding at year-end. Management closely monitors outstanding balances during the year and allocates an allowance account if appropriate. The Company estimates and records a provision for its expected credit losses related to its financial instruments, including its trade receivables and contract assets. The Company considers historical collection rates, the current financial status of its customers, macroeconomic factors, and other industry-specific factors when evaluating for current expected credit losses. Forward-looking information is also considered in the evaluation of current expected credit losses. However, because of the short time to the expected receipt of accounts receivable, the Company believes that the carrying value, net of expected losses, approximates fair value and therefore, relies more on historical and current analysis of such financial instruments.
As
of December 31, 2024 and 2023, the Company allocated $
| F-11 |
Property and Equipment, net
Property and equipment is stated at cost. Depreciation is computed primarily using the straight-line method over the estimated useful lives of the assets. Expenditures for repairs and maintenance are charged to expense as incurred. For assets sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any related gain or loss is reflected in the condensed consolidated statement of operations or the period in which the disposal occurred. The Company computes depreciation utilizing estimated useful lives, as stated below:
| Property and Equipment, net Categories | Estimated Useful Life | |
| Tractors and trailers | ||
| Containers | ||
| Equipment | ||
| Leasehold improvements |
Management regularly reviews property and equipment for possible impairment. This review occurs annually or more frequently if events or changes in circumstances indicate the carrying amount of the asset may not be recoverable. Based on management’s assessment, there were no indicators of impairment of the Company’s property and equipment as of December 31, 2024 and 2023, respectively.
Finite Long-lived Intangible Assets, Net
Finite long-lived intangible assets are recorded at their estimated fair value at the date of acquisition. Finite long-lived intangible assets are amortized on a straight-line basis over their estimated useful lives. Management annually evaluates the estimated remaining useful lives of the finite intangible assets to determine whether events or changes in circumstances warrant a revision to the remaining period of amortization. The Company also recognized finite intangible intellectual property, noncompete agreement, customer list, and tradename assets from its reverse acquisition with Titan Trucking (Note 3 – Business Combinations) which were subsequently impaired and disposed of during the sale of Recoup (Note 4 – Discontinued Operations).
Finite long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be fully recoverable. An impairment loss is recognized if the sum of the expected long-term undiscounted cash flows the asset is expected to generate is less than its carrying amount. Any write-downs are treated as permanent reductions in the carrying amount of the respective asset. Management assessed and concluded that an impairment write-down would not be necessary as of December 31, 2024 and 2023.
The Company amortizes these intangible assets on a straight-line basis over their estimated useful lives, as stated below:
| Finite Long-lived Intangible Assets Categories | Estimated Useful Life | |
| Customer Lists | ||
| Intellectual Property | ||
| Noncompete agreement | ||
| Tradenames |
Goodwill
Goodwill represents the excess of the acquisition price of a business over the fair value of identified net assets of that business. Goodwill has an indefinite lifespan and is not amortized. The Company evaluates goodwill for impairment at least annually and records an impairment charge when the carrying amount of a reporting unit with goodwill exceeds the fair value of the reporting unit. As of December 31, 2024 and 2023, the Company’s sole reporting unit within continuing operations was its Trucking unit. Prior to the Company’s sale of Recoup (Note 4 – Discontinued Operations), the Company had a second reporting unit: the Digester unit.
| F-12 |
The Company assesses qualitative factors to determine if it is necessary to conduct a quantitative goodwill impairment test. If deemed necessary, a quantitative assessment of the reporting unit’s fair value is conducted and compared to its carrying value in order to determine the impairment charge (Note 7 – Goodwill).
Leases
The Company assesses whether a contract is or contains a lease at inception of the contract and recognizes right-of-use assets (“ROU”) and corresponding lease liabilities at the lease commencement date. The lease term is used to calculate the lease liability, which includes options to extend or terminate the lease when it is reasonably certain that the option will be exercised. The leases the Company currently holds do not have implicit borrowing rates, therefore the Company utilizes its incremental borrowing rate to measure the ROU assets and liabilities. Operating lease expense is generally recognized on a straight-line basis over the lease term. All leases that have lease terms of one year or less are considered short-term leases, and therefore are not recorded through a ROU asset or liability. The Company has elected to apply the practical expedient to not separate the lease and non-lease components of a contract.
Loan Origination Fees
Loan
origination fees represent loan fees, inclusive of original issue discounts, relating to convertible note payables and note payables
granted to the Company. The Company amortizes loan origination fees over the life of the note (Note 9 – Notes Payable and Note
10 – Convertible Notes Payable). Amortization expense of loan issuance fees for the years ended December 31, 2024 and 2023 was
$
Fair Value Measurements
ASC 820 “Fair Value Measurements” defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosure about fair value measurements.
The following provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which fair value is observable:
Level 1- fair value measurements are those derived from quoted prices (unadjusted in active markets for identical assets or liabilities);
Level 2- fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
Level 3- fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).
Financial instruments classified as Level 1 quoted prices in active markets include cash.
These financial instruments are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment to estimation. Valuations based on unobservable inputs are highly subjective and require significant judgments. Changes in such judgments could have a material impact on fair value estimates.
In addition, since estimates are as of a specific point in time, they are susceptible to material near-term changes. Changes in economic conditions may also dramatically affect the estimated fair values.
Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management for the respective periods. The respective carrying value of certain financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include cash, short-term notes payable, accounts payable and accrued expenses. The carrying value of long-term debt approximates fair value, as the variable interest rates approximate current market rates. The Company measured its derivative liabilities, mezzanine equity and common stock as of December 31, 2024, at fair value on a recurring basis using level 3 inputs.
| F-13 |
Convertible Instruments
The Company evaluates its convertible instruments, such as warrants and convertible notes, to determine if those contracts or embedded components of those contracts qualify as equity instruments, derivative liabilities, or liabilities, to be separately accounted for in accordance with ASC 815 “Derivatives and Hedging” (“ASC 815”) and ASC 480 “Distinguishing Liabilities from Equity” (“ASC 480”). The assessment considers whether the convertible instruments are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the convertible instruments meet all of the requirements for equity classification under ASC 815, including whether the convertible instruments are indexed to the Company’s own ordinary shares and whether the instrument holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of the instrument’s issuance, and as of each subsequent balance sheet date while the instruments are outstanding. If the classification changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification.
Embedded conversion options and any related freestanding instruments are recorded as a discount to the host instrument. The Company allocates proceeds based on the relative fair values of the debt and equity components. The accounting treatment of derivative financial instruments requires that the Company record embedded conversion options and any related freestanding instruments at their fair values as of the inception date of the agreement and at fair value as of each subsequent balance sheet date. Any change in fair value is recorded in earnings each period as non-operating, non-cash income or expense.
Common Stock
Beginning on December 31, 2024, due to the lack of an active market for the Company’s common stock, management was required to estimated the fair value of the Company’s common stock at the time of each grant of the common stock. The Company utilized various Level 3 valuation methodologies to estimate the fair value of its common stock. Each valuation methodology includes estimates and assumptions that require the Company’s judgment. These estimates and assumptions include a number of objective and subjective factors in determining the value of the Company’s common stock at each grant date, including the following factors:
| - | prices paid for the Company’s capital stock, which the Company has sold to outside investors in arm’s-length transactions, considering the rights and privileges of the securities sold relative to the common stock; | |
| - | valuations performed by an independent valuation specialist; | |
| - | the Company’s stage of development and revenue growth; | |
| - | the market performance of comparable publicly traded companies; | |
| - | the likelihood of achieving a liquidity event for the common stock underlying the stock-based awards, such as uplisting to a more liquid stock exchange; | |
| - | adjustments necessary to recognize a lack of marketability for the common stock |
Prior to December 31, 2024, the Company valued its common stock price using the trading price of its publicly listed common stock. The Company intends to return to this valuation methodology upon the establishment of an active market for the Company’s common stock. Under ASC 250-10-45-17, the Company is applying the change in the accounting estimate prospectively. The Company believes the change in estimate is preferable because it allows the Company to record a more accurate measurement of the fair value of the Company’s common stock.
Redeemable Series B Preferred Stock
The Company applies the guidance enumerated in ASC 480, when determining the classification and measurement of preferred stock. Preferred stock subject to mandatory redemption, if any, is classified as a liability and is measured at fair value. The Company classifies conditionally redeemable preferred stock, which includes preferred stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control, as mezzanine equity. At all other times, the Company classifies its preferred stock in stockholders’ equity. The Company subsequently measures mezzanine equity based on whether the instrument is currently redeemable or whether or not it is probable the instrument will become redeemable. Given the assessed probability that the instrument will become redeemable, the Company has elected to adjust the value of the Series B Preferred shares to its maximum redemption amount at each reporting date, including amounts representing dividends not currently declared or paid, but which will be payable under the redemption feature.
| F-14 |
Stock-Based Compensation
The Company accounts for stock awards to employees and non-employees in accordance with ASC Topic 718, “Compensation – Stock Compensation” by measuring the cost of services received in exchange for the award of equity instruments based upon the fair value of the award on the date of grant. The fair value of that award is then ratably recognized as expense over the period during which the recipient is required to provide services in exchange for that award.
Revenue Recognition
The Company records revenue based on a five-step model in accordance with FASB ASC 606, Revenue from Contracts with Customers, which requires the following:
1. Identify the contract with a customer.
2. Identify the performance obligations in the contract.
3. Determine the transaction price of the contract.
4. Allocate the transaction price to the performance obligations in the contract.
5. Recognize revenue when the performance obligations are met or delivered.
The Company’s operating revenues are generated from fees charged for the collection and disposal of waste by its Trucking Segment. Revenues are recognized at a point in time immediately after completion of disposal of waste at a landfill or transfer station. Revenues from collection operations are influenced by factors such as collection frequency, type of collection furnished, type and volume or weight of the waste collected, distance to the disposal facility or material recovery facility and disposal costs. Fees charged at transfer stations are generally based on the weight or volume of waste deposited, including the cost of loading, transporting, and disposing of the solid waste at a disposal site. The fees charged for services generally include environmental, fuel charge and regulatory recovery fees, which are intended to pass through to customers direct and indirect costs incurred. For waste collection and disposal services the Company invoices its customers with standard 30-day payment terms without any significant financing terms.
Concentration Risk from Revenues
A major customer is defined as a customer that represents 10% or greater of total revenues. The Company does not believe that the concentration risk associated with these customers or vendors will have a materially adverse effect on the business. The Company’s concentration of revenue is as follows:
For the year ended December 31, 2024 | For the year ended December 31, 2023 | |||||||
| Customer A | % | % | ||||||
Concentration Risk from Accounts Receivable
A major customer is defined as a customer that represents 10% or greater of total accounts receivable, net. The Company does not believe that the risk associated with these customers or vendors will have an adverse effect on the business. The Company’s concentration of accounts receivable is as follows:
As of December 31, 2024 | As of December 31, 2023 | |||||||
| Customer A | * | % | ||||||
| * |
The Company maintains positive customer relationships and continually expands its customer base, mitigating the impact of any potential concentration risks that exist.
| F-15 |
Income Taxes and Uncertain Tax Positions
The Company and its U.S. subsidiaries file a consolidated federal income tax return and is taxed as a C-Corporation, whereby it is subject to federal and state income taxes. The Company accounts for income taxes in accordance with ASC 740, “Income Taxes”. ASC 740 requires an asset and liability approach for financial accounting and reporting for income taxes, established for all the entities a minimum threshold for financial statement recognition of the benefit of tax positions, and requires certain expanded disclosures. The provision for income taxes is based upon income or loss after adjustment for those permanent items that are not considered in the determination of taxable income. Deferred income taxes represent the tax effects of differences between the financial reporting and tax basis of the Company’s assets and liabilities at the enacted tax rates in effect for the years in which the differences are expected to reverse. The Company evaluates the recoverability of deferred tax assets and establishes a valuation allowance when it is more likely than not that some portion or all the deferred tax assets will not be realized. Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In management’s opinion, adequate provisions for income taxes have been made. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary. The Company’s taxes are subject to examination by taxation authorities for a period of three years.
Advertising and Marketing Costs
Costs
associated with advertising are charged to expense as occurred. For the years ended December 31, 2024 and 2023 the advertising and marketing
costs were $
Recently Issued Accounting Standards
The Company has reviewed the recent accounting pronouncements issued by the Financial Accounting Standards Board (“FASB”), including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the SEC, and determined that these pronouncements do not have a material impact on the Company’s current or anticipated consolidated financial statement presentation or disclosures.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) – Improvements to Income Tax Disclosures (ASU 2023-09). ASU 2023-09 requires that an entity, on an annual basis, disclose additional income tax information, primarily related to the rate reconciliation and income taxes paid. The amendment in the ASU is intended to enhance the transparency and decision usefulness of income tax disclosures. The ASU’s amendments are effective for annual periods beginning after December 15, 2024. The Company is currently evaluating the impact that adoption of ASU 2023-09 will have on its financial statements.
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires disclosure about the types of costs and expenses included in certain expense captions presented on the income statement. The new disclosure requirements are effective for the Company’s annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently in the process of evaluating the impact of this pronouncement on our related disclosures.
In November 2024, the FASB issued ASU No. 2024-04, Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments (“ASU 2024-04”), which clarifies the requirements for determining whether to account for certain early settlements of convertible debt instruments as induced conversions or extinguishments. ASU 2024-04 is effective for fiscal years beginning after December 15, 2025 with early adoption permitted for entities that have adopted ASU 2020-06. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.
Recently Adopted Accounting Standards
In November 2023, the FASB issued Accounting Standard Update (“ASU”) 2023-07, Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 requires a public entity to disclose significant segment expenses and other segment items on an annual and interim basis and provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. Additionally, it requires a public entity to disclose the title and position of the Chief Operating Decision Maker (“CODM”). ASU 2023-07 does not change how a public entity identifies its operating segments, aggregates them, or applies the quantitative thresholds to determine its reportable segments. The new standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. A public entity should apply the amendments in this ASU retrospectively to all prior periods presented in the financial statements. The Company has adopted ASU 2023-07 as of January 1, 2024. The adoption did not have a material impact on the Company’s financial statements.
| F-16 |
NOTE 3 – BUSINESS COMBINATIONS
Standard Waste Services, LLC Business Combination
On
May 31, 2024 (the “Standard acquisition date”), the Company completed a transaction to acquire Standard. The total
purchase consideration in connection with the acquisition was approximately $
Standard is a provider of contracted commercial roll-off and front-load waste services, including dumpster compactor rentals, to customers principally in Southeast Michigan. Standard provides services to both commercial and industrial customers.
The transaction was accounted for under the acquisition method of accounting and accordingly, the results of Standard’s operations are included within the Trucking Segment for the year ended December 31, 2024 related to the activity subsequent to the acquisition date.
The purchase price was preliminarily allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair values as of the date of acquisition on a provisional basis. The purchase price exceeded the estimated fair value of the net identifiable tangible and intangible assets acquired and, as such, the excess was allocated to goodwill.
The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed at the acquisition date.
| Estimated | ||||
| Description | Fair Value | |||
| Assets: | ||||
| Cash | $ | |||
| Accounts receivable | ||||
| Property and equipment | ||||
| Prepaid expenses and other current assets | ||||
| Other receivables | ||||
| Right-of-use-asset | ||||
| Intangible assets and goodwill | ||||
| $ | ||||
| Liabilities: | ||||
| Accounts payable and accrued expenses | $ | ( | ) | |
| Accrued payroll and related taxes | ( | ) | ||
| Operating lease liability, current | ( | ) | ||
| Finance lease liability, current | ( | ) | ||
| Notes payable | ( | ) | ||
| Operating lease liability, noncurrent | ( | ) | ||
| Finance lease liability, noncurrent | ( | ) | ||
| ( | ) | |||
| Net fair value of assets (liabilities) acquired | $ | |||
| F-17 |
Certain estimated fair values for the acquisition, including goodwill, anticipated intangible assets, property and equipment, and promissory notes, are not yet finalized. The anticipated intangible assets consist of contractual backlog, customer relationships, and tradenames. The purchase price was preliminarily allocated based on information available at the acquisition date and is subject to change as the Company completes its analysis of the fair values at the date of the acquisition during the measurement period not to exceed one year, as permitted under ASC 805. Any adjustments to the preliminary fair value of the assets acquired and liabilities assumed will adjust the preliminary goodwill recognized during the measurement period. The Company expects to record amortization expense during the first half of the year ended December 31, 2025 for allocated finite lived intangible assets.
As
a result of the acquisition, the Company recognized a total of $
Standard’s results of operations are included in the consolidated financial statements from the date of the transaction within the Trucking segment. It is impracticable for the Company to determine the approximate revenue and gross profit for Standard from May 31, 2024 through December 31, 2024, as the operations of Standard and Titan Trucking are closely related and discrete financial information is not available for Standard on a stand-alone basis. If the transaction had occurred on the beginning of the year ended December 31, 2023, unaudited pro forma consolidated results for 2024 and 2023, would have been as follows:
| Year Ended | Year Ended | |||||||
| December 31, | December 31, | |||||||
| 2024 | 2023 | |||||||
| Total revenue | $ | $ | ||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Pro forma loss per common share | $ | ) | $ | ) | ||||
| Pro forma weighted average number of common shares basic and diluted | ||||||||
The pro forma combined results of operations are not necessarily indicative of the results of operations that actually would have occurred, nor are they necessarily indicative of future consolidated results.
Titan Trucking, LLC Reverse Acquisition
The Company’s subsidiary Titan Merger Sub Corp. (“Merger Sub”), Titan Trucking and the owners of Titan Trucking (“Titan Trucking owners”) entered into a merger agreement (the “Titan Merger Agreement”) on May 19, 2023 (the “Titan acquisition date”). Pursuant to the terms of the Titan Merger Agreement, Merger Sub was merged with and into Titan Trucking on the Titan acquisition date with Titan Trucking surviving as a wholly-owned subsidiary of the Company (the “Titan Merger”). For U.S. federal income tax purposes, the Titan Merger qualified as a tax-free “reorganization”. Under the terms of the Titan Merger Agreement, the Company agreed to pay the Titan Trucking owners shares of the Company’s Series A Preferred Stock. Concurrent to the Titan Merger, the Company’s chief executive officer and one of the Company’s directors resigned from their respective positions and a new chief executive officer, chief operating officer and chief financial officer were appointed. Additionally, the new chief executive officer and chief operating officer were both appointed as directors of the Company.
In accordance with ASC 805 – Business Combinations, the Titan Merger was accounted for as a reverse acquisition with Titan Trucking being deemed the accounting acquirer of Titan. Titan Trucking, as the accounting acquirer, recorded the assets acquired and liabilities assumed of Titan at their fair values as of the Titan acquisition date. Titan Trucking’s historical consolidated financial statements have replaced the Company’s historical consolidated financial statements with respect to periods prior to the completion of the Titan Merger with retroactive adjustments to Titan’s legal capital to reflect the legal capital of Titan. Titan remains the continuing registrant and reporting company.
| F-18 |
Titan
Trucking was deemed to be the accounting acquirer based on the following facts and circumstances: (1) the Titan Trucking owners owned
approximately
The Company accounted for the Titan Merger as a reverse acquisition using acquisition accounting. Because the Titan Merger qualifies as a reverse acquisition and given that Titan Trucking was a private company at the time of the Titan Merger and therefore its value was not readily determinable, the fair value of the merger consideration was deemed to be equal to quoted market capitalization of the Company at the acquisition date. The purchase consideration was as follows:
| Titan Environmental Solutions Inc. market capitalization at closing | $ | |||
| Total purchase consideration | $ |
The Company recorded all tangible and intangible assets and liabilities at their estimated fair values on the acquisition date. The following represents the allocation of the purchase consideration:
| Description | Fair Value | |||
| Assets: | ||||
| Cash | $ | |||
| Accounts receivable | ||||
| Prepaid expenses and other current assets | ||||
| Inventory | ||||
| Property and equipment | ||||
| Intangible assets | ||||
| Goodwill | ||||
| $ | ||||
| Liabilities: | ||||
| Accounts payable and accrued expenses | $ | ( | ) | |
| Customer deposits | ( | ) | ||
| Accrued payroll and related taxes | ( | ) | ||
| Derivative liability | ( | ) | ||
| Convertible notes payable | ( | ) | ||
| Convertible notes payable – related parties | ( | ) | ||
| Notes payable | ( | ) | ||
| Notes payable – related parties | ( | ) | ||
| ( | ) | |||
| Net fair value of assets (liabilities) acquired | $ | |||
The Company assessed the fair values of the tangible and intangible assets and liabilities and the amount of goodwill to be recognized as of the Titan acquisition date. Fair values were based on management’s estimates and assumptions. The intangible assets acquired were specific to the Company’s Recoup subsidiary.
The
fair value of the intellectual property intangible asset was measured using the multiple periods excess earnings method (“MPEEM”).
Significant inputs used to measure the fair value include an estimated useful life of ten (
| F-19 |
The
fair value of the tradenames intangible asset was measured using the relief from royalty method. Significant inputs used to measure the
fair value include an estimated projected revenue from the tradename, a pre-tax royalty rate of
The
fair value of the customer list intangible asset was measured using the modified MPEEM. Significant inputs used to measure the fair value
include an estimated useful life of ten (
The
fair value of the noncompete agreement intangible asset was measured with a discounted cash flow analysis that compared projected cash
flows during the noncompete agreement period with and without the agreement. Significant inputs used to measure the fair value include
an estimate of time for the parties involved to identify the product, bring in the technology, and start the manufacturing process. As
well as the estimated risk that the parties involved would choose to compete without the agreement in place and a discount rate of
Goodwill
arising from the acquisition consisted of new customer relationships for the Company, access to new product market opportunities and
expected growth opportunities. Total acquisition costs incurred were approximately $
The
approximate revenue and gross profit for Titan (excluding the operations of Titan Trucking) from May 19, 2023 through December 31, 2023
was $
The following supplemental pro-forma financial information approximate combined financial information assumes that the acquisition had occurred at the beginning of the year ended December 31, 2023:
| Year Ended | ||||
| December 31, | ||||
| 2023 | ||||
| Total revenue | $ | |||
| Net loss | $ | ( | ) | |
| Pro forma loss per common share | $ | ) | ||
| Pro forma weighted average number of common shares basic and diluted | ||||
The pro forma combined results of operations are not necessarily indicative of the results of operations that actually would have occurred, nor are they necessarily indicative of future consolidated results.
The
pro forma combined results of operations for the year ended December 31, 2023, included stock-based compensation of $ and goodwill
impairment expense of $
NOTE 4 – DISCONTINUED OPERATIONS
On
October 31, 2024 the Company completed the sale of its subsidiary Recoup (the “Recoup Sale) in exchange for consideration of
$
The
note receivable has a principal amount of $
| F-20 |
Recoup’s financial results are presented within loss from discontinued operations, after tax in the consolidated statement of operations. For the year ended December 31, 2024, these results include the period from the beginning of the year through the date of the Recoup Sale. The following table presents the amounts that have been reclassified from continuing operations and included in loss from discontinued operations within the Company’s consolidated statement of operations for the years ended December 31, 2024 and 2023:
| For the year ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| REVENUE | $ | $ | ||||||
| COST OF REVENUES | ||||||||
| GROSS PROFIT | ||||||||
| OPERATING EXPENSES | ||||||||
| Salaries and salary related costs | ||||||||
| Professional fees | ||||||||
| Depreciation and amortization expense | ||||||||
| General and administrative expenses | ||||||||
| Intangible asset Impairment | ||||||||
| Goodwill Impairment | ||||||||
| Total operating expenses | ||||||||
| OPERATING LOSS | ( | ) | ( | ) | ||||
| OTHER INCOME (EXPENSE) | ||||||||
| Other income | ||||||||
| Loss on disposal of Recoup | ( | ) | ||||||
| Net loss from discontinued operations before income taxes | ( | ) | ( | ) | ||||
| Provision for income taxes | ||||||||
| Net loss from discontinued operations after income taxes | $ | ( | ) | $ | ( | ) | ||
The following table presents the assets and liabilities of Recoup that were reclassified as discontinued operations within the Company’s consolidated balance sheet as of December 31, 2023.
| December 31, | ||||
| 2023 | ||||
| Assets: | ||||
| Cash | $ | |||
| Accounts receivable, net | ||||
| Prepaid expenses and other assets | ||||
| Inventory | ||||
| Property and equipment, net | ||||
| Intangible assets, net | ||||
| Goodwill | ||||
| Total assets - discontinued operations | $ | |||
| Liabilities: | ||||
| Accounts payable | $ | |||
| Accrued expenses | ||||
| Customer deposits | ||||
| Total liabilities - discontinued operations | $ | |||
Impairments
During the year ended December 31, 2023, and
as a result of the financial performance of the former Digester Segment, the Company concluded it was more likely than not that the
fair value of the reporting unit was less than it’s carrying amount. Therefore, the Company performed an impairment assessment
of the goodwill. The fair value of the Digester reporting unit was estimated using an income approach and included assumptions
related to estimates of future revenue and operating expenses, long-term growth rates, a technology obsolescence rate, and a
discount rate. As a result of the quantitative impairment test, the goodwill was impaired with an impairment expense of $
During the third quarter of 2024, and as a result of the financial performance
of the former Digester Segment, the Company concluded it was more likely than not that the fair value of the reporting unit was less than
it’s carrying amount. Therefore, the Company performed an impairment assessment of the goodwill. At this time the Company did not
reclassify Recoup as held for sale, as the necessary criteria were not met. As a result of the quantitative impairment test the goodwill
was impaired with an impairment expense of $
During the third quarter of 2024, and as a result of the financial performance of the former Digester Segment, the
Company concluded it was more likely than not that the fair value of the intangible assets held by Recoup were less than their carrying
amount. Therefore, the Company performed an impairment assessment of the intangible assets. At this time the Company did not reclassify
Recoup as held for sale, as the necessary criteria were not met. As a result of the quantitative impairment test, the intangible assets
were impaired with an impairment expense of $
| F-21 |
NOTE 5 – PROPERTY AND EQUIPMENT, NET
Property and equipment consist of the following as of December 31, 2024 and 2023:
| December 31, | December 31, | |||||||
| 2024 | 2023 | |||||||
| Containers | $ | $ | ||||||
| Trucks and tractors | ||||||||
| Trailers | ||||||||
| Shop equipment | ||||||||
| Furniture | ||||||||
| Leasehold improvements | $ | $ | ||||||
| Less accumulated depreciation | ( | ) | ( | ) | ||||
| Net book value | $ | $ | ||||||
Depreciation
expenses for the years ended December 31, 2024 and 2023 were $
NOTE 6 – INTANGIBLES, NET
Intangible assets consisted of the following as of December 31, 2024 and 2023:
| December 31, | December 31, | |||||||
| 2024 | 2023 | |||||||
| Customer Lists | $ | $ | ||||||
| Less: accumulated amortization | ( | ) | ( | ) | ||||
| Net book value | $ | $ | ||||||
Amortization
expense from intangible assets was $
Future amortization expense from intangible assets as of December 31, 2024 were as follows:
| For the Year Ended, | ||||
| December 31, | ||||
| 2025 | $ | |||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Thereafter | ||||
| Total remaining amortization expense | $ | |||
| F-22 |
NOTE 7 – GOODWILL
The
Company has one reporting unit, the Trucking unit. As of December 31, 2024 and December 31, 2023, the goodwill for the reporting
unit was $
The changes in the carrying value of goodwill by reportable segment for the years ended December 31, 2024 and 2023 are as follows:
| Trucking | ||||
| Gross Goodwill: | $ | |||
| Balance as of January 1, 2024 | ||||
| Goodwill recognized | ||||
| Balance as of December 31, 2024 | ||||
| Accumulated Impairment: | ||||
| Balance as of January 1, 2024 | ||||
| Impairment | ||||
| Balance as of December 31, 2024 | ||||
| Net carrying value, as of December 31, 2024 | $ | |||
NOTE 8 – LEASES
Operating Leases
The Company determines if an arrangement is a lease at inception. Operating leases are included in right-of-use assets (“ROU”), operating lease liabilities, and operating lease liabilities, non-current. Lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. None of the leases entered into have an implicit rate, the Company uses its incremental borrowing rate based on the information available at lease commencement date in determining the present value of future payments. Incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in economic environments where the leased asset is located. The ROU assets also include any prepaid lease payments made and initial direct costs incurred and excludes lease incentives. The Company’s lease terms may include options to extend or terminate the lease, which is recognized when it is reasonably certain that the Company will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company has operating leases for real estate in both Bloomfield Hills and Detroit, Michigan.
On
April 1, 2023, Titan Trucking entered into a
Average lease terms and discount rates are as follows:
| December 31, | December 31, | |||||||
| 2024 | 2023 | |||||||
| Weighted average remaining lease term (in years) | ||||||||
| Weighted average discount rate | % | % | ||||||
| F-23 |
Future minimum lease payments required under operating leases on an undiscounted cash flow basis as of December 31, 2024, were as follows:
| For the Years Ended, | ||||
| December 31, | ||||
| 2025 | $ | |||
| 2026 | ||||
| 2027 | ||||
| Total minimum lease payments | ||||
| Less: imputed interest | ( | ) | ||
| Present value of future minimum lease payments | ||||
| Current operating lease liabilities | ||||
| Non-current operating lease liabilities | $ | |||
The
Company had operating lease expenses of $
Financing Leases
| December 31, | December 31, | |||||||
| 2024 | 2023 | |||||||
| Weighted average remaining lease term (in years) | N/A | |||||||
| Weighted average discount rate | % | N/A | ||||||
| For the Years Ended, | ||||
| December 31, | ||||
| 2025 | $ | |||
| 2026 | ||||
| 2027 | ||||
| Total minimum lease payments | ||||
| Less: imputed interest | ( | ) | ||
| Present value of future minimum lease payments | ||||
| Current operating lease liabilities | ||||
| Non-current operating lease liabilities | $ | |||
The
Company’s finance lease costs consisted of $
| F-24 |
NOTE 9 – NOTES PAYABLE
The Company borrows funds from various creditors to finance its equipment, operations, and acquisitions. The Company’s collateralized loans are secured by interest in the financed equipment.
On
December 15, 2022, Titan Trucking entered into a $
The Company’s notes payables balance as of December 31, 2024 and 2023, consisted of the following:
| December 31, | December 31, | |||||||||||||||||
| 2024 | 2023 | |||||||||||||||||
| Current | Non-current | Current | Non-current | |||||||||||||||
| Collateralized Loans: | (a) | $ | $ | $ | $ | |||||||||||||
| Note Payables: | ||||||||||||||||||
| Keystone | (b) | |||||||||||||||||
| Issued prior to Titan Merger: | ||||||||||||||||||
| Michaelson Capital | (c) | |||||||||||||||||
| Loanbuilder | (d) | |||||||||||||||||
| Individual | (e) | |||||||||||||||||
| Kabbage Funding Loans | (f) | |||||||||||||||||
| Related Parties: | ||||||||||||||||||
| Standard Waste Promissory Note (1) | (g) | |||||||||||||||||
| Titan Holdings 2 | (h) | |||||||||||||||||
| Titan Holdings 5 | (i) | |||||||||||||||||
| Miller | (j) | |||||||||||||||||
| J. Rizzo | (k) | |||||||||||||||||
| C. Rizzo | (l) | |||||||||||||||||
| Total outstanding principal | ||||||||||||||||||
| Less: discounts | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Total notes payable | ||||||||||||||||||
| Less: Notes payable – related parties | ||||||||||||||||||
| Notes payable | $ | $ | $ | $ | ||||||||||||||
| F-25 |
Guarantee of Debt
On
May 31, 2024, the Company entered into a Guaranty Fee Agreement pursuant to which certain outstanding indebtedness owed by the Company
to the sellers of Standard is guaranteed. Pursuant to the Guaranty Fee Agreement, Charles B. Rizzo personally guaranteed the obligations
of Standard and the Company. In exchange for providing the guarantees, the Company agreed to provide compensation consisting of a deposit
fee, a guarantee fee, and an annual fee. The guarantee fee consisted of shares of common stock or the equivalent shares of
Series A Preferred Stock, and the deposit fee consisted of shares of common stock or the equivalent shares of Series A Preferred
Stock. The annual fee consists of
Collateralized Installment Loans:
| (a) | |
| On January 6, 2025, the Company signed an agreement with a financier pursuant to which the Company received proceeds
of $ |
Note Payables:
| (b) |
| F-26 |
Note Payables issued prior to Titan Merger:
| (c) |
In October 2023, the Company and Michaelson agreed to forbear the principal payments owed to Michaelson during the three months ended September 30, 2023 until October 30, 2023. On December 28, 2023, the Company and Michaelson signed a Forbearance Agreement (the “December Michaelson Amendment”) that was accounted for as a debt modification in accordance with ASC 470 – Debt. |
The
December Michaelson Amendment established a period ending on March 31, 2024 during which
Michaelson agreed to forbear from exercising its rights against the Company with respect
to a default. Additionally, it set the following repayment terms: (1) on or before December
31, 2023, the Company was to make a $
In
April 2024, the Company and Michaelson agreed to extend the term of the Michaelson Note until June 30, 2024, and forbear all other
terms until May 1, 2024. In exchange for such extension and forbearance, the Company agreed: (1) to pay $
On
July 31, 2024, the Company and Michaelson agreed to a Forbearance Agreement that amended the Michaelson Note Payable (the “July
Michaelson Amendment”). As a result, the interest rate of the Michaelson Note increased to
As
of December 31, 2024 the outstanding principal balance is $ |
| F-27 |
| (d) |
| (e) | |
| (f) |
Related Parties:
| (g) |
| (h) |
| F-28 |
Titan has an informal agreement with Titan Holdings 2 to continually borrow from Titan Holdings 2 as working capital needs arise. These additional funds are to be repaid as funding becomes available. During the year ended December 31, 2024 the Company borrowed an additional $
In July of 2024, the Company sold two customer contracts in exchange for total proceeds
of $ | |
| (i) |
On
May 30, 2024, the Company and the stockholder, agreed to a promissory note for a principal amount of $ |
| (j) |
On
February 23, 2024, the Company and Miller agreed to a promissory note for a principal amount of $
On
May 30, 2024, the Company and Miller agreed to a promissory note for a principal amount of $ |
| (k) |
| F-29 |
| The
Company has an informal agreement with Rizzo to continually borrow from Rizzo as working capital needs arise. These additional funds
are to be repaid as funding becomes available. As of December 31, 2024, Titan had borrowed $ | |
| (l) |
Interest
expense on these notes for the years ended December 31, 2024 and 2023 was $
Principal maturities for the next five years and thereafter as of December 31, 2024 were as follows:
| 2025 | $ | |||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Thereafter | ||||
| Total principal payments | ||||
| Less: debt discounts | ( | ) | ||
| Total notes payable | $ |
| F-30 |
NOTE 10 – CONVERTIBLE NOTES PAYABLE
Convertible Notes Payable and Convertible Notes Payable – Related Parties
The Company’s convertible notes as of December 31, 2024 and 2023 were as follows:
| December 31, | December 31, | |||||||||||||||||
| 2024 | 2023 | |||||||||||||||||
| Current | Non-current | Current | Non-current | |||||||||||||||
| Convertible Notes Payable: | ||||||||||||||||||
| 2023 Bridge Notes | (a) | $ | $ | $ | $ | |||||||||||||
| 2024 Bridge Notes | (b) | |||||||||||||||||
| 2024 Non-Interest Bearing Bridge Notes | (c) | |||||||||||||||||
| 2024 Convertible Notes | (d) | |||||||||||||||||
| Related Parties: | ||||||||||||||||||
| Miller – Bridge Notes | (e) | |||||||||||||||||
| Titan 5 – Bridge Note | (f) | |||||||||||||||||
| Celli – Bridge Note | (g) | |||||||||||||||||
| FC Advisory – Bridge Note | (h) | |||||||||||||||||
| Standard Waste Promissory Note #2 | (i) | |||||||||||||||||
| Total outstanding principal | ||||||||||||||||||
| Less: discounts | ( | ) | ( | ) | ( | ) | ||||||||||||
| Total convertible notes payable | ||||||||||||||||||
| Convertible notes payable – related parties | ||||||||||||||||||
| Convertible notes payable | $ | $ | $ | $ | ||||||||||||||
| F-31 |
Convertible Notes Payable:
| |
| (a) |
Effective
July 29, 2024 and through December 31, 2024, the Company and the investors agreed to waive all events of default and all claims to
related default interest, with the exception of any default interest that accrued prior to July 29, 2024. Additionally, effective
July 29, 2024, $ |
| (b) | |
| (c) | |
| Subsequent to December 31, 2024 the maturity date of the 2024 Non-Interest Bearing Bridge Note was extended to May 31, 2025 (Note 20 – Subsequent Events). | |
| (d) | |
| F-32 |
| Related Parties: |
| (e) |
Effective July 29, 2024 and through December 31, 2024, the Company and Miller agreed to waive all events of default and all claims to related default interest, with the exception of any default interest that accrued prior to July 29, 2024. On December 31, 2024 the Miller Bridge Notes were amended and the maturity date was extended to March 31, 2025. |
| (f) |
Effective July 29, 2024 and through December 31, 2024, the Company and Titan 5 agreed to waive all events of default and all claims to related default interest, with the exception of any default interest that accrued prior to July 29, 2024. On December 31, 2024 the Titan 5 Bridge Note was amended and the maturity date was extended to March 31, 2025. |
| (g) |
The
Celli Bridge Notes contain a “rollover rights” conversion feature that enables the holder to convert all or part of the
Celli Bridge Note’s principal and accrued interest in the event of a public offering or private placement of the Company’s
equity, equity linked, or debt securities into purchase consideration for said public or private offering. In the event of default,
the Celli Bridge Notes accrue interest at a rate of |
| (h) |
| F-33 |
| (i) |
On
December 31, 2024 the Company and Dominic and Sharon Campo agreed to amend the Standard Waste Promissory Note #2. As a result $ |
Interest
expense due to convertible note payables for the years ended December 31, 2024 and 2023 was $
Convertible note payables principal maturities for the next three years as of December 31, 2024 were as follows:
| 2025 | $ | |||
| 2026 | ||||
| 2027 | ||||
| Less: debt discounts | ( | ) | ||
| Total convertible notes payable | $ |
NOTE 11 – DERIVATIVE LIABILITIES
On
February 12, 2021, the Company granted warrants (the “Platinum Point Warrants”) that have a term of and
an exercise price of $
The fair value of the Platinum Point Warrants derivative liability is estimated using a Black-Scholes valuation model with a stock price of $. Changes to the inputs used in the model could produce a significantly higher or lower fair value. The following assumptions were used as of December 31, 2023:
| For the Years Ended | ||||||||
| December 31, | December 31, | |||||||
| 2024 | 2023 | |||||||
| Expected term (years) | N/A | |||||||
| Expected volatility | N/A | % | ||||||
| Expected dividend yield | N/A | % | ||||||
| Risk-free interest rate | N/A | % | ||||||
| F-34 |
The derivative liabilities as of December 31, 2024 and December 31, 2023 were as follows:
December 31, 2024 | December 31, 2023 | |||||||
| Fair value
of the Platinum Point Warrants ( | $ | $ | ||||||
| $ | $ | |||||||
Activity related to the derivative liabilities for the year ended December 31, 2024 is as follows:
| Beginning balance as of December 31, 2023 | $ | |||
| Change in fair value of warrant - derivative liability | ( |
) | ||
| Ending balance as of December 31, 2024 | $ |
Michaelson Forbearance Agreement
On
December 28, 2023, the Company and Michaelson signed a Forbearance Agreement (the “December Michaelson Amendment”) which
amended the Michaelson Note and was accounted for as a debt modification in accordance with ASC 470 – Debt. The December
Michaelson Amendment states that following the payment of its other obligations owed to Michaelson, the Company shall issue Michaelson
$
The
Advance on Offering balance was $
In
April 2024, the Company and Michaelson agreed to extend the term of the Michaelson Note until June 30, 2024, and forbear all other terms
until May 1, 2024. Among other terms, the Company agreed to pay a $
Standard Waste Promissory Notes Extension and Subordination Agreement
On
December 31, 2024, the Company and the holders of Standard Waste Promissory Note #1 and Standard Waste Promissory Note #2 agreed to amend
both notes and to sign a subordination agreement with Utica Leaseco, LLC (Note 20 – Subsequent Events). In exchange for signing
the subordination agreement, the Company agreed to issue shares of common stock to the note holders. Additionally, $
As of December 31, 2024, the common stock from these transactions had not been issued and the obligation was recorded to shares to be issued on the consolidated balance sheet in the amount of $. As of the issuance date of these financial statements the common stock had not been issued and the obligation was outstanding.
| F-35 |
NOTE 13 – BENEFIT PLAN
Titan
Trucking offers a 401(k) plan. Employees are eligible to participate in the plan on the first day of the month following the date of
hire. Employees may defer up to $
Employer
contributions for the years ended December 31, 2024 and 2023 were $
NOTE 14 – MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY
As further described in Note 3 – Business Combinations, under applicable accounting principles, the historical financial results of Titan Trucking prior to May 19, 2023 replaced the historical financial statements of TraQiQ for the period prior to May 19, 2023. Titan Trucking’s equity structure, prior to the combination with TraQiQ, was a limited liability company, resulting in all components of equity attributable to the members being reported within Member’s Equity.
As
of December 31, 2023, the Company was authorized to issue a total of shares of its Preferred Stock in one or more series,
and authorized to issue shares of common stock. As a result of the redomicile and effective January 10, 2024, the authorized
capital stock of the Company was amended to
Members’ Equity
As
of December 31, 2022, Titan Trucking had members’ equity of $
On
February 1, 2023, in exchange for the settlement of the $
Series A Preferred Stock
As a result of the redomicile and effective January 10, 2024, each share of the Company’s Series C Convertible Preferred Stock issued and outstanding immediately prior to the effective time of the redomicile was exchanged for one share of Series A Convertible Preferred Stock of the Nevada corporation (the “Series A Preferred Stock”), which has substantially the same rights and preferences as the Series C Preferred Stock.
Each
outstanding share of Series A Convertible Preferred Stock has a par value of $ and is convertible into shares of the Company’s
common stock at any time commencing after the issuance date. The Series A Convertible Stock has voting rights equivalent to the voting
rights of the common stock the holder would receive upon conversion. Upon any liquidation, dissolution, or winding-up of the Company,
whether voluntary or involuntary (a “Liquidation”), the Series A Holders shall be entitled to receive, on a pro-rata basis,
the first $
| F-36 |
Series B Preferred Stock
As a result of the redomicile and effective January 10, 2024, TraQiQ’s “Series B” class of preferred stock was eliminated. (Note 1 – Organization and Nature of Operations).
Prior to the redomicile, each outstanding share of Series B Convertible Preferred Stock prior to the redomicile was convertible into the shares of the Company’s common stock at any time commencing after the issuance date. Series B Convertible Stock had no voting rights.
On July 17, 2023, prior to the redomicile, the Company entered into Exchange Agreements (the “Series B Preferred Exchange Agreements”) with two accredited investors, including Sikka. Pursuant to the Series B Preferred Exchange Agreements, such investors exchanged shares of the Company’s former Series B Convertible Preferred Stock into an aggregate of Series A Rights dated as of July 17, 2023. On July 20, 2023, the Company entered into an Exchange Agreement (the “REI Exchange Agreement”) with Renovare Environmental, Inc. (“REI”) pursuant to which REI exchanged shares of common stock and shares of the Company’s former Series B Convertible Preferred Stock for Series A Rights dated July 20, 2023 and Series B Rights dated July 20, 2023. As a result of the Series B Preferred Exchange Agreements and the REI Exchange Agreement the Company did not have any outstanding shares of its former Series B Convertible Preferred Stock.
On March 29, 2024, the Company created a new series of Series B Convertible Preferred Stock consisting of shares with a redemption value of $ per share. As of December 31, 2024 and December 31, 2023, there were and shares of Series B Preferred Stock issued and outstanding, respectively. The summary of the key rights and privileges are as follows.
Optional Redemption
Beginning
on July 31, 2025, the Company has the option to redeem the outstanding shares by providing written notice 10 to 60 days in advance. The
Company has the option to redeem the outstanding shares at a premium of
Mandatory Redemption
The
Company will be required to redeem the outstanding shares when the Company receives written notice from any holder that holds at least
Series B Convertible Preferred Stock (a “Mandatory Redemption Event Notice”) that specifies a Mandatory Redemption
Event (as defined below) has occurred. The Company is required to provide written notice to all Holders and redeem the shares, for any
holder that provides this notice, in cash (either immediately or when the cash becomes available) at an amount equal to
A Mandatory Redemption Event is triggered either by (1) a Triggering Event occurring and the Company being notified by a Holder with at least shares or (2) by the Company’s common stock not being listed on a major exchange after July 31, 2025.
Dividend Rights
Holders
are entitled to receive cumulative dividends at a rate of
| ● | Accrued
dividends are paid at | |
| ● | The Company may elect to pay dividends in the form of common stock provided no Equity Conditions Failure has occurred, and such a payment would not cause the holder to exceed the Beneficial Ownership Limitation. |
| ○ | Equity Conditions Failure occurs if certain conditions are not met during a specified period, including the continued listing of common stock on a trading market, timely delivery of shares issuable upon conversion, compliance with trading market rules, and absence of any Triggering Event. | |
| ○ | The number of shares issued as a stock dividend is calculated based on the average volume-weighted average price (VWAP) of the common stock. |
| F-37 |
Conversion Rights
Each share of Series B Convertible Preferred Stock can be converted into common stock as follows:
(a) Optional Conversion
| ● | Conversion rate is based on the Stated Value plus unpaid dividends divided by the Conversion Price. | |
| ● | Initial
Conversion Price is $ |
(b) Triggering Event Conversion
| ● | During
a Triggering Event, holders can convert their shares at | |
| ● | Conversion is subject to the Beneficial Ownership Limitation. |
(c) Mandatory Conversion
| ● | ||
| ● | Mandatory Conversion Notice must be delivered within five Trading Days after the Mandatory Conversion Measuring Period. |
Beneficial Ownership Limitation
Voting Rights
Series B Preferred Stock Offering
On
April 5, 2024, the Company entered into a Securities Purchase Agreement (the “SPA”) dated March 29, 2024 with an accredited
investor, pursuant to which, on such date and at later closings of the transactions contemplated by the SPA, such investor and the additional
investors who signed the SPA agreed to purchase shares of the Company’s Series B Convertible Preferred Stock. In addition, in connection
with the issuance of the Series B Preferred Stock, the purchasers received -year warrants to purchase shares of the Company’s
common stock. The warrants are exercisable at an exercise price of $
On
May 30, 2024, the Company issued shares of Series B Preferred Stock and warrants to purchase an aggregate of shares
of common stock for an aggregate purchase price of $
| F-38 |
In connection with the issuance, the Company entered into a Registration Rights Agreement whereby the Company agreed to file a registration statement registering the resale of the shares of common stock issuable upon conversion of the Series B Preferred Stock and upon exercise of the warrants within 20 calendar days of the earlier of (i) the date of the consummation of the listing of the Common Stock on any of the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, or their respective successors and (ii) the six-month anniversary of the Registration Rights Agreement (the “Trigger Date”). The Company agreed to use its best efforts to have the registration statement declared “effective” within 60 calendar days from the Trigger Date.
The
Company determined the Series B Preferred Stock is classified as temporary mezzanine equity because redemption could be required at (1)
a fixed or determinable date, (2) at the option of the holder, and (3) upon occurrence of a contingent event. The Company valued the
redemption feature based on the present value of future cash flows using the following assumptions, (1) term of years, (2) dividend
rate of % and (3) effective interest rate of %. For the year ended December 31, 2024 the Series B Preferred Stock related to the
Offering was accreted $
Additional Series B Preferred Stock Issuances
On
April 12, 2024, the Company issued shares of Series B Preferred Stock to extend the term of the Michaelson Note until June 30,
2024 (Note 9 – Note Payables). The redemption feature is recorded at fair value and will be accreted to redemption value when it
is deemed probable to be exercised. The Company valued the redemption feature at fair value based on the present value of future cash
flows using the following assumptions, (1) term, (2) dividend rate, (2) effective interest rate, (3) and redemption value of $
On
June 25, 2024, the Company issued shares of Series B Preferred Stock to investors in exchange for equity interests for proceeds
received in prior periods. The redemption feature is recorded at fair value and will be accreted to redemption value when it is deemed
probable to be exercised. The Company valued the redemption feature at fair value based on the present value of future cash flows using
the following assumptions, (1) term, (2) dividend rate, (2) effective interest rate, (3) and redemption value of $
On
July 2, 2024, the Company signed four Exchange Subscription Agreements with four of the Company’s lenders (Note 9 – Notes
Payable). In accordance with the terms of the Exchange Subscription Agreements, an aggregate of $
| F-39 |
| Balance as of December 31, 2023 | $ | |||
| Issuance of Series B Preferred Stock due to Offering | ||||
| Accretion of Series B Preferred Stock due to Offering | ||||
| Issuance of Series B Preferred Stock due to exchange | ||||
| Accretion of Series B issuances | ||||
| Issuance of Series B Preferred Stock due to extension | ||||
| Series B Preferred Stock conversion of liability | ||||
| Accretion of Series B issuances | ||||
| Issuance of Series B Preferred Stock | ||||
| Accretion of Series B issuances | ||||
| Balance as of December 31, 2024 | $ |
Common Stock
As of December 31, 2024 and December 31, 2023, the Company had and shares of common stock issued and outstanding, respectively.
Under the terms of the Company’s articles of incorporation, holders of common stock are entitled to one vote for each share held on all matters submitted to a vote of stockholders, including the election of directors, and do not have cumulative voting rights. The holders of outstanding shares of common stock are entitled to receive dividends out of assets or funds legally available for the payment of dividends at such times and in such amounts as the Company’s board of directors from time to time may determine. The common stock is not entitled to pre-emptive rights and is not subject to conversion or redemption. Upon liquidation, dissolution or winding up of the Company, the assets legally available for distribution to stockholders are distributable ratably among the holders of common stock after payment of liquidation preferences, if any, on any outstanding shares of preferred stock and the payment of other claims of creditors. The rights, preferences and privileges of holders of common stock are subject to and may be adversely affected by the rights of the holders of shares of outstanding preferred stock and any series of preferred stock the Company may designate and issue in the future.
During the years ended December 31, 2024 and 2023, the Company issued and shares of common stock due to exercises of share rights from common stock rights, respectively.
| F-40 |
Warrants
As a result of the reincorporation and effective January 10, 2024, all the Company’s outstanding warrants were assumed by Titan and now represent warrants to acquire shares of Titan’s common stock. The following schedule summarizes the changes in the Company’s common stock warrants during the years ended December 31, 2024 and 2023:
| Weighted | Weighted | |||||||||||||||||||
| Warrants Outstanding | Average | Average | ||||||||||||||||||
| Number | Exercise | Remaining | Aggregate | Exercise | ||||||||||||||||
| Of | Price | Contractual | Intrinsic | Price | ||||||||||||||||
| Shares | Per Share | Life | Value | Per Share | ||||||||||||||||
| Balance at December 31, 2022 | $ | - | $ | $ | ||||||||||||||||
| Warrants acquired concurrent with the Titan Merger | $ – | $ | $ | |||||||||||||||||
| Warrants granted | $ | $ | $ | |||||||||||||||||
| Warrants exercised | $ | - | $ | - | $ | - | ||||||||||||||
| Warrants expired/cancelled | $ | - | $ | - | $ | - | ||||||||||||||
| Balance at December 31, 2023 | $ – | $ | $ | |||||||||||||||||
| Exercisable at December 31, 2023 | $ – | $ | $ | |||||||||||||||||
| Warrants granted | $ | $ | $ | |||||||||||||||||
| Warrants exercised/exchanged | $ | - | $ | - | $ | |||||||||||||||
| Warrants expired/cancelled | ( | ) | $ – | - | $ | - | $ | - | ||||||||||||
| Balance at December 31, 2024 | $ – | $ | $ | |||||||||||||||||
| Exercisable at December 31, 2024 | $ – | $ | $ | |||||||||||||||||
On
December 28, 2023, the Company issued
On
January 5, 2024, the Company issued
On
May 30, 2024, the Company issued shares of Series B Preferred Stock and
On
July 2, 2024, the Company signed four Exchange Subscription Agreements with four of the Company’s lenders (Note 9 – Notes
Payable). In accordance with the terms of the Exchange Subscription Agreements, an aggregate of $
On
August 12, 2024, the Company issued Calvary Fund I
Between
October 15, 2024 and December 26, 2024 the Company issued the 2024 Convertible Notes along with
Right to Receive Common Shares
On
July 17, 2023, the Company entered into Exchange Agreements (the “Note Exchange Agreements”), with five holders of its convertible
note payables. Under the terms of the Note Exchange Agreements, $
| F-41 |
On
July 17, 2023, the Company also entered into Exchange Agreements (the “Series B Preferred Exchange Agreements”) with two
accredited investors, including Sikka. Pursuant to the Series B Preferred Exchange Agreements, such investors exchanged shares
of the Company’s Series B Convertible Preferred Stock into an aggregate of Series A Rights dated as of July 17, 2023.
Pursuant to the Series B Preferred Exchange Agreement Sikka also exchanged shares of the Company’s common stock and a
payment of receivable from the Company for unreimbursed advances in the amount of $
On July 20, 2023, the Company entered into an Exchange Agreement (the “REI Exchange Agreement”) with Renovare Environmental, Inc. (“REI”) pursuant to which REI exchanged shares of Common Stock and shares of Series B Preferred Stock for Series A Rights dated July 20, 2023 and Series B Rights dated July 20, 2023. The Series A Rights and Series B Rights were valued at their fair value at the time of grant, which was deemed to be $ per Series A Right Share and $ per Series B Right Share.
The
transactions contemplated by the Note Exchange Agreement, Series B Preferred Exchange Agreement and REI Exchange Agreement are together
referred to as the “Rights Exchanges”. As a result of the Rights Exchanges, the Company recognized a loss of $
The Company’s Series A Rights obligate the Company to issue Common Stock (“Series A Right Shares”) to the holder without any additional consideration. The number of Series A Right Shares is fixed, and is only subject to customary non-price based ratable adjustments, such as stock splits, and stock combinations. The Series A Rights are exercisable immediately and expire five years after the issuance date. The Series A Rights require the Company to hold in reserve the total number of shares of Common Stock that would need to be exercised in order meet the obligations of the Series A Rights.
The Company’s Series B Rights obligate the Company to issue Common Stock (“Series B Right Shares”) to the holder without any additional consideration. The number of Series B Right Shares is fixed and is only subject to customary non-price based ratable adjustments, such as stock splits, and stock combinations. The Company’s Series B Rights are exercisable upon the earlier of (1) December 31, 2023 or (2) the initial date on which the Company’s Common Stock is listed for trading on the New York Stock Exchange, NYSE American, the Nasdaq Global Select Market, Nasdaq Capital Markets, or the Nasdaq Global Market. The Series B Rights expire five years after the issuance date. The Series B Rights require the Company to hold in reserve the total number of shares of Common Stock that would need to be exercised in order meet the obligations of the Series B Rights.
The Company assessed the Series A Rights and Series B Rights for appropriate balance sheet classification and concluded that the Series A Rights and Series B Rights are freestanding equity-linked financial instruments that meet the criteria for equity classification under ASC 480 and ASC 815. Accordingly, they are classified as equity and accounted for as a component of additional paid-in capital at the time of issuance. The Company also determined that the Series A Rights and Series B Rights should be included in the determination of basic and diluted earnings per share in accordance with ASC 260, Earnings per Share.
As a result of the reincorporation and effective January 10, 2024, each of the Company’s Series A Right to Receive Common Stock issued and outstanding immediately prior to the reincorporation was converted into one Series A Right to Receive Common Stock of Titan, which has substantially the same rights and preferences as the Company’s original Series A Rights to Acquire Common Stock. Also, each of the Company’s Series B Right to Receive Common Stock issued and outstanding immediately prior to the reincorporation was converted into one Series B Right to Receive Common Stock of Titan, which has substantially the same rights and preferences as the Company’s original Series B Rights to Acquire Common Stock. At December 31, 2024, there were Series A Rights outstanding and Series B Rights outstanding.
| F-42 |
The TraQiQ Inc. 2020 Equity Incentive Plan was initially approved by the Company’s Board of Directors on November 23, 2020. In conjunction with the reincorporation (Note 20 – Subsequent Events) and effective January 10, 2024, the Company adopted the Titan Environmental Solutions Inc. 2023 Equity Incentive Plan (the “2023 Plan”). The 2023 Plan limits the shares of common stock authorized to be awarded as stock awards to shares. The 2023 Plan terminates upon the earlier of 1) the earliest date at which all shares awarded under the plan have been satisfied in full or terminated and there remain no new shares authorized to be issued under the plan, or 2) the tenth anniversary of the plan’s effective date.
Restricted Stock Awards
| Weighted | ||||||||||||
| Weighted | Average | |||||||||||
| Average | Remaining | |||||||||||
| Number | Grant Date | Contractual | ||||||||||
| Shares | Fair Value | Term (years) | ||||||||||
| Nonvested at December 31, 2023 | $ | - | ||||||||||
| Granted | $ | - | ||||||||||
| Shares vested | $ | - | ||||||||||
| Forfeitures | $ | - | ||||||||||
| Nonvested at December 31, 2024 | $ | - | ||||||||||
| Nonvested at December 31, 2022 | $ | |||||||||||
| Granted | $ | - | ||||||||||
| Acquired concurrent with the Titan Merger (vested and unreleased) | $ | - | ||||||||||
| Acquired concurrent with the Titan Merger (unvested) | $ | - | ||||||||||
| Shares vested | ( | ) | $ | - | ||||||||
| Forfeitures and cancelations | ( | ) | $ | - | ||||||||
| Total outstanding at December 31, 2023 | $ | |||||||||||
As of June 30, 2023, there were shares of common stock related to restricted stock grants that were vested and unissued. On September 13, 2023, the Company signed a Cancellation of Restricted Stock Grants Agreement with Sikka and two directors which rescinded and annulled of the vested and unreleased shares and the unvested shares. Consequently, the obligation to issue shares was eliminated.
Stock-based compensation from restricted stock awards for the years ended December 31, 2024 and 2023 was $ and $, respectively. As of December 31, 2024, there remained $of unrecognized stock-based compensation from restricted stock awards. The total fair value of restricted shares that vested during the years ended December 31, 2024 and 2023 was $and $, respectively. The fair value of the vested and unreleased shares on the date of the Titan Merger was $.
On the Titan Merger acquisition date, the Company awarded shares of Series C Preferred Stock that vested immediately to its chief executive officer, and as a result recorded $ of stock-based compensation (Note 14 – Stockholders’ Equity). On September 28, 2023, the Company and the chief executive officer signed a cancellation agreement and the Series C Preferred Stock shares were rescinded. Under the terms of the cancellation agreement, the Company agreed to issue ten-year stock options to acquire a number of shares of common stock of the Company in order to provide the chief executive officer an equity interest in the Company commensurate with the value of the original stock award. Such options will have an exercise price equal to the sale price of the common stock in the next public offering of common stock consummated by the Company.
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The fair value of the Series C Preferred Stock was determined using observable inputs (level 2 fair value measurement) with a market approach technique. The main input for the Series C Preferred Stock fair value was the price of the Company’s common stock as of the date of the grant. As a result of the redomicile, each share of Series C Convertible Preferred Stock issued and outstanding immediately prior to the effective time of the redomicile was exchanged for one share of Series A Convertible Preferred Stock, which has substantially the same rights and preferences as the TraQiQ Series C Preferred Stock (Note 1 – Organization and Nature of Operations).
Stock Options
| Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Life (Years) | Aggregate Intrinsic Value | |||||||||||||
| Outstanding as of December 31, 2023 | $ | - | ||||||||||||||
| Granted | - | |||||||||||||||
| Cancelled or forfeited | - | - | ||||||||||||||
| Exercised | - | - | ||||||||||||||
| Outstanding as of December 31, 2024 | ||||||||||||||||
| Exercisable as of December 31, 2024 | $ | |||||||||||||||
On December 31, 2024 the Company issued stock options to management and members of the Board of Directors. The stock options vested immediately upon issuance, expire after a term of , and have an exercise price of $. The Company recognized immediate stock compensation expense of $. As of December 31, 2024 there was unrecognized stock-compensation related to unvested stock options.
The Company recognizes stock-based compensation expense from stock options using the grant date fair-value. The fair value of options awarded is measured on the grant date using the Black-Scholes option-pricing model. The following assumptions were used as of December 31, 2024:
| For the Years Ended | ||||||||
| December 31, | December 31, | |||||||
| 2024 | 2023 | |||||||
| Expected term (years) | N/A | |||||||
| Expected volatility | % | N/A | ||||||
| Expected dividend yield | % | N/A | ||||||
| Risk-free interest rate | % | N/A | ||||||
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NOTE 16 – COMMITMENTS AND CONTINGENCIES
Commitments
On
March 21, 2023, Titan Trucking entered into a consulting agreement (the “March 2023 Agreement”) with a consultant for consulting
services related to the consolidated waste industry.
On February 10, 2025 the Company and the consultant effected a settlement agreement and release terminating the March
2023 Agreement. As a result, the Company agreed to settle all amounts owed due to the March 2023 Agreement in exchange for a payment of
$
Related Party Commitments
On
April 1, 2023, Titan Trucking entered into a
As
of December 31, 2024 and December 31, 2023, the Company owed a related party vendor $
On
May 20, 2023, the Company entered into a management consulting agreement (the “May 2023 Agreement”) with a related party
consultant. The consultant agreed to assist the Company identify acquisition and merger targets, as well provide other merger and
acquisition related services, such as due diligence services, and services related the integration of acquisition targets. The May
2023 Agreement has a term of
In
conjunction with the acquisition of Standard (Note 3 – Business Combinations), the Company engaged the Sellers for consulting services
in the period following the Standard Acquisition. Dominic Campo and Sharon Campo each signed a consulting agreement (the “Standard
Consulting Agreements”) with the Company.
| F-45 |
Contingencies
From time to time, the Company is involved in routine litigation that arises in the ordinary course of business. Currently, there is no litigation pending against the Company that could materially affect the Company other than as follows:
In July 2022, a complaint was filed against Titan Trucking in the Circuit Court for Macomb County, Michigan for breach of contract. In the complaint, the plaintiff alleges that Titan Trucking has breached a contractual agreement between Titan Trucking and the plaintiff pertaining to the transport of certain non-hazardous solid waste or recyclables from plaintiff’s transfer station to the locations identified in the contract. The complaint sought unspecified damages, attorney and expert fees and other unspecified litigation costs. Titan Trucking denied the claims of the plaintiff, and in May 2023, Titan Trucking filed amended counterclaims against the plaintiff alleging that plaintiff breached the contractual agreement by preventing Titan Trucking’s performance of its obligations under the agreement by failing to, among things, provide the necessary volumes of materials for shipment and the personnel sufficient to permit Titan Trucking to provide its services and by failing to pay certain invoices and to reimburse Titan Trucking for equipment damaged by plaintiff’s employees and for overweight trailer tickets. As of December 31, 2023, no accruals for loss contingencies had been recorded as the outcome of this litigation was neither probable nor reasonably estimable. On October 25, 2024, Titan Trucking entered into a mutual release with the plaintiff which discharges Titan Trucking and any and all of its executive officers, employees, experts, and attorneys from the claims in this litigation and all other claims, demands, liabilities, causes of action, and damages, including attorneys’ fees, sanctions, interest, costs, and expenses, whether known or unknown, through and including October 25, 2024.
In July 2023, a complaint was filed against us and Ajay Sikka, a director of our company and our former chief executive officer, in the Circuit Court of the Nineteenth Judicial Circuit, Lake County, Illinois titled Alta Waterford, LLC v. TraQiQ, Inc. and Ajay Sikka (Case No. 23LA00000476) for breach of contract. In the complaint, the plaintiff alleges that we breached contracts for the payment of compensation for investor relations and web development and copyright services allegedly provided by the plaintiff, which payment obligation was personally guaranteed by Mr. Sikka.
The
complaint seeks damages in the amount of $
In May 2024, the Court signed a new order with an updated schedule. Consistent with that new order, the Company still anticipates conducting deposition discovery in the weeks and months ahead, but the matter is now scheduled for a bench trial in Illinois (no jury) in May 2025. As of December 31, 2024 and 2023, no accruals for loss contingencies have been recorded as the outcome of this litigation is neither probable nor reasonably estimable.
On May 31, 2024 (the “Standard acquisition date”), the Company completed a transaction to acquire Standard. Titan agreed to issue shares of Series A as consideration and an additional shares of Series A because Closing did not occur prior to February 2, 2024, for a total of shares of Series A Preferred. The other shares have not been issued to the Sellers yet because they are being held back to satisfy any indemnification claims made by Titan, which is in accordance with the terms of the agreement. These will be released on the 12th month anniversary of the Closing, provided there are no valid claims.
Basic net loss per common share is computed by dividing net loss by the weighted average number of vested common shares outstanding during the period. Diluted net loss per common share is computed by dividing net loss by the weighted average number vested of common shares, plus the net impact of common shares (computed using the treasury stock method), if dilutive, resulting from the exercise of dilutive securities. In periods when losses are reported, the weighted-average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive. As of December 31, 2024 and 2023, the Company excluded the common stock equivalents summarized below, which entitle the holders thereof to ultimately acquire shares of common stock, from its calculation of loss per share, as their effect would have been anti-dilutive.
| F-46 |
| December 31, 2024 | December 31, 2023 | |||||||
| Series A Preferred Stock | ||||||||
| Series C Preferred Stock (1) | ||||||||
| Warrants | ||||||||
| Stock options | ||||||||
| Total common stock equivalents | ||||||||
| (1) |
As further described in Note 3 – Business Combinations, under applicable accounting principles, the historical financial results of Titan prior to May 19, 2023 replace the historical financial statements for the period prior to May 19, 2023. Titan’s equity structure, prior to the combination with the TraQiQ, was a limited liability company, resulting in all components of equity attributable to the members being reported within Member’s Equity. Given that Titan was a limited liability company, net loss prior to the reverse acquisition is not applicable for purposes of calculating loss per share.
The Company has assessed the Series A Right to Receive Common Stock (“Series A Rights”) and the Series B Rights to Receive Common Stock (“Series B Rights”) for appropriate balance sheet classification and concluded that the Series A Rights and Series B Rights are freestanding equity-linked financial instruments that meet the criteria for equity classification under ASC 480 and ASC 815. In accordance with ASC 260 Earnings per Share the Company determined that the Series A Rights and Series B Rights should be included in the determination of basic and diluted earnings per share.
As the Company has reported a net loss for all periods presented, diluted net loss per common share is the same as basic net loss per common share.
NOTE 18 – PROVISION FOR INCOME TAXES
Prior to the Titan Merger, Titan Trucking filed its taxes as an S-Corp. The profits and losses of an S-Corp flow through to the owners of the respective company. Upon the acquisition date of the Titan Merger, the S-Corp status was terminated and Titan Trucking began to be taxed as a C-Corp (including the recording of deferred tax assets). The following is a summary of the components giving rise to the income tax (benefit) provision for the years ended December 31, 2024 and 2023:
| 2024 | 2023 | |||||||
| Current: | ||||||||
| Federal | $ | $ | ||||||
| State | ||||||||
| Foreign | $ | $ | ||||||
| Total current provision | ||||||||
| Deferred: | ||||||||
| Federal | $ | ( | ) | ( | ) | |||
| State | ( | ) | ( | ) | ||||
| Foreign | ||||||||
| Total deferred benefit | ( | ) | ( | ) | ||||
| Change in valuation allowance | ||||||||
| Total income tax provision | $ | $ | ||||||
| F-47 |
The following table summarizes the significant differences between the U.S. Federal statutory tax rate and the Company’s effective tax rate for financial statement purposes for the years ended December 31, 2024 and 2023:
| 2024 | 2023 | |||||||
| Federal income taxes at statutory rate | % | % | ||||||
| State income taxes at statutory rate | % | % | ||||||
| Acquisitions and disposals | % | % | ||||||
| Loss on extinguishment of debt | ( | )% | ( | )% | ||||
| Goodwill impairment | ( | )% | ( | )% | ||||
| Stock based compensation | % | ( | )% | |||||
| Tax basis adjustments | ( | )% | ( | )% | ||||
| Change in valuation allowance | ( | )% | ( | )% | ||||
| Other | % | ( | )% | |||||
| Totals | % | % | ||||||
The following is a summary of the components of deferred tax assets and liabilities as of December 31, 2024 and 2023:
| As of | As of | |||||||
| December 31, | December 31, | |||||||
| 2024 | 2023 | |||||||
| Deferred tax assets: | ||||||||
| Net operating losses and other tax attributes | $ | $ | ||||||
| Other | ||||||||
| Total deferred tax assets | ||||||||
| Deferred tax liabilities: | ||||||||
| Depreciation and amortization | ( | ) | ( | ) | ||||
| Total deferred tax liabilities | ( | ) | ( | ) | ||||
| Less: Valuation allowance | ( | ) | ( | ) | ||||
| Net deferred tax assets | $ | $ | ||||||
As
of December 31, 2024, the Company has a net operating loss carry forward of $
ASC
740 provides guidance on the financial statement recognition and measurement for uncertain income tax positions that are taken or expected
to be taken in a company’s income tax return. The Company has evaluated its tax positions and believes there are
| F-48 |
NOTE 19 – SEGMENT REPORTING
Operating segments are components of an enterprise about which separate financial information is available and is evaluated regularly by management, namely the Chief Operating Decision Maker (“CODM”) of an organization, in order to determine operating and resource allocation decisions. By this definition, the Company had identified its Chief Operating Officer (“COO”) as the CODM. On February 9, 2025 the COO resigned from the Company. The Company has identified its Chief Executive Officer (“CEO”) as the CODM for the period beginning on February 9, 2025. The Company’s CODM makes decisions regarding resource allocation and performance assessment using net loss from continuing operations as presented within the consolidated statement of operations.
Significant expenses within net loss from continuing operations include revenue, cost of revenues, salaries and salary related costs, stock based compensation, professional fees, amortization expense, and general and administrative expenses, which are each separately presented on the Company’s consolidated statement of operations. Other segment items within net loss from continuing operations include interest expense, net of interest income, and other income. The Company’s long-lived assets consist primarily of property and equipment, net and intangibles assets, net arising from the acquisition of Standard.
Prior to the sale of Recoup, the Company operated in two segments: Trucking and Digester. Following the sale of Recoup (Note 4 – Discontinued Operations), the Company manages its business activities on a consolidated basis and operates and reports as a single operating segment: Trucking Segment.
Trucking Segment: The Trucking Segment generates service revenues and incurs expenses by transporting environmental and other waste for customers
(Former) Digester Segment: The Digester Segment primarily generated revenues and incurred expenses through the production and sale of ‘digester’ equipment to customers. The segment also generated revenue through related services such as digester maintenance and software services.
The Company believes that this structure reflects its current operational and financial management, and that it provides the best structure for the Company to focus on growth opportunities while maintaining financial discipline. The factors used to identify the operating segments were the segment’s revenue streams and customer base, the reporting structure for operational and performance information within the Company, and management’s decision to organize the Company around the segment’s revenue generating activities.
NOTE 20 – SUBSEQUENT EVENTS
Subsequent events were evaluated through the issuance date of these financial statements. There were no subsequent events other than those described below:
Certification of Series C Preferred Stock and Authorization of Automatic Conversion of Series A and Series B Preferred Stock
On March 6, 2025, the Company filed a Certificate of Designation of the Preferences of Preferred Stock (the “Certificate of Designation”) pursuant to which it authorized the issuance of up to million shares of Series C Preferred Stock and created the terms of the Series C Preferred Stock. Additionally, the Board of Directors of the Company also authorized, subject to receipt of all necessary stockholder approvals, the amendments to the Company’s articles of incorporation to provide that all outstanding shares of Series A Preferred Stock shall automatically convert into common stock, and all outstanding shares of Series B Preferred Stock shall automatically convert into common stock or Series C Preferred Stock, concurrently with the listing of the common stock on a national securities exchange.
Each share of Series C Preferred Stock has a stated
value of $ and is convertible into a number of shares of Common Stock equal to
Holders of Series C Preferred Stock are entitled to receive dividends on shares of Series C Preferred Stock equal (on an as-if-converted-to-Common-Stock basis disregarding for such purpose any conversion limitations) to and in the same form as dividends actually paid on shares of the Common Stock when, as and if such dividends are paid on shares of the Common Stock. Upon the liquidation or dissolution of the Company, the holders of Series C Preferred Stock will be entitled to receive out of the assets of the Company, whether capital or surplus, the same amount that a holder of Common Stock would receive if the Series C Preferred Stock were fully converted (disregarding for such purposes any conversion limitations) to Common Stock, which such amounts following will be paid pari passu with all holders of Common Stock.
Series C Preferred Stock Subscription Agreements
Between March 5, 2025 and March 7, 2025, the Company
consummated the transactions contemplated by Subscription Agreements dated February 21, 2025 (the “Subscription Agreements”),
pursuant to which the Company offered to certain accredited investors shares of its Series C Convertible Preferred Stock, par value $
per share (the “Series C Preferred Stock”), for a purchase price of $ per share. Each of the five purchasers of shares
of Series C Preferred Stock is an accredited investor and is a stockholder of and lender to the Company. The purchasers included Frank
Celli, a director of the Company. The purchasers subscribed to purchase an aggregate of shares of Series C Preferred Stock for
an aggregate purchase price of $
The Subscription Agreements also grant to the purchasers of shares of Series C Preferred Stock, among other rights, the right to participate in certain subsequent offerings of securities by the Company and the right to exchange their shares of Series C Preferred Stock for the securities issued in certain subsequent offerings of securities by the Company.
Convertible Notes Exchange Agreements
On
March 4, 2025, the Company and the holders of $
Amendment of Michaelson Note
Subsequent to
December 31, 2024, the Company and Michaelson agreed to amend the Michaelson Note. As a result, Michaelson agreed to waive all events
of default until April 15, 2025. Additionally, the Michaelson Note was amended in order to have the following principal payment schedule:
a principal payment of $
Settlement of March 2023 Agreement
On February 10, 2025 the Company and the consultant
effected a settlement agreement and release related to the March 2023 Agreement. As a result, the Company agreed to settle all amounts
owed due to the March 2023 Agreement in exchange for a payment of $
Exchange of Share Rights
On January 16, 2025, the Company issued shares of common stock due to the exercises of share rights from common stock rights.
Related Party Paid-In Kind Transaction
As
of December 31, 2024, the Company owed a related party vendor $
Financing and Payoff of Collateralized Notes Payable
On January 6, 2025, the Company signed
an agreement with a financier pursuant to which the Company received proceeds of $
Contingencies
In
February 2025, a complaint was filed against the Company, the Company’s operating subsidiaries and Jeffrey Rizzo, the former Chief
Operating Officer of the Company (“Rizzo”), in the Supreme Court of the State of New York, Niagara County. The complaint
arises out of a sale of future receipts agreement entered into by the plaintiff and the defendants in January 2025 whereby the
plaintiff alleges that it agreed to purchase $
In March 2025, an arbitration was commenced against the Company before the American Arbitration Association in Michigan asserting claims arising under a June 27, 2022 agreement that the claimant entered into with Titan Trucking. In the arbitration, the claimant asserts claims against the Company for breach of contract, breach of the implied covenant of good faith and fair dealing, and unjust enrichment. The Company has advised the claimant’s attorney that it does not believe the Company can be forced to arbitrate any dispute with the claimant because the Company was not bound by the terms of the agreement entered into by the claimant and the Company’s subsidiary and the Company never agreed to an arbitration proceeding. As of the filing of these financial statements, it is unclear whether the Company is subject to the demand for arbitration and what the claims are that the plaintiff is pursuing against the Company, and what the basis is for which the plaintiff intends to recover from the Company.
| F-49 |
Exhibit 4.1
DESCRIPTION OF THE REGISTRANT’S SECURITIES
REGISTERED PURSUANT TO SECTION 12 OF THE
SECURITIES EXCHANGE ACT OF 1934
Titan Environmental Solutions Inc. (“us”, “our,” “we” or the “Company”) has one class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”): our common stock, par value $0.0001 per share (“Common Stock”).
CAPITAL STRUCTURE
Our authorized capital stock consists of (i) 425,000,000 shares of Common Stock, and (ii) 25,000,000 shares of preferred stock, par value $0.0001 per share (“Preferred Stock”). Our Preferred Stock includes (i) 1,567,900 shares of Preferred Stock designated as “Series A Convertible Preferred Stock,” (ii) 1,360,000 shares of Preferred Stock designated as “Series B Convertible Preferred Stock” and 6,500,000 shares of Preferred Stock designated as “Series C Convertible Preferred Stock.”
DESCRIPTION OF CAPITAL STOCK
The following are summary descriptions of our capital stock and related provisions of our Articles of Incorporation, as amended (the “Articles”), our Bylaws, as amended (the “Bylaws”), and applicable provisions of Nevada law. These summary descriptions do not purport to be complete and are qualified in their entirety by reference to our Articles and Bylaws, which are filed with the U.S. Securities and Exchange Commission (the “SEC”) as exhibits to our Annual Report on Form 10-K for the year ended December 31, 2024 (of which this Exhibit 4.1 is a part) and incorporated by reference herein. These summary descriptions of our capital stock are subject to, and should be read in conjunction with, our Articles and Bylaws, as well as to the relevant provisions of Nevada law.
Common Stock
We are authorized to issue up to 425,000,000 shares of Common Stock, without any par value per share.
Voting, Dividend and Other Rights. Each outstanding share of Common Stock entitles the holder to one vote on all matters presented to the shareholders for a vote. Holders of shares of Common Stock have no cumulative voting, pre-emptive, subscription or conversion rights. All outstanding shares of Common Stock have been duly authorized and are fully paid and non-assessable. Our board of directors determines if and when distributions may be paid out of legally available funds to the holders. To date, we have not declared any dividends with respect to our Common Stock. Our declaration of any cash dividends in the future will depend on our board of directors’ determination as to whether, in light of our earnings, financial position, cash requirements and other relevant factors existing at the time, it appears advisable to do so. We do not anticipate paying cash dividends on our Common Stock in the foreseeable future.
Rights Upon Liquidation. Upon liquidation, subject to the right of any holders of the Preferred Stock to receive preferential distributions, each outstanding share of Common Stock may participate pro rata in the assets remaining after payment of, or adequate provision for, all our known debts and liabilities.
Majority Voting. The holders of 33 1/3% of the outstanding shares of stock entitled to vote shall constitute a quorum for the transaction of business at any meeting of the shareholders. A plurality of the votes cast at a meeting of shareholders elects our directors. The Common Stock does not have cumulative voting rights. Therefore, the holders of a majority of the outstanding shares of Common Stock can elect all of our directors. In general, a majority of the votes cast at a meeting of shareholders must authorize shareholder actions other than the election of directors. Most amendments to our Articles require the vote of the holders of a majority of all outstanding voting shares.
Listing. Our Common Stock is listed for quotation on the OTCQB market operated by the OTC Markets Group under the trading symbol “TESI.”
Transfer Agent and Registrar. The transfer agent and registrar for our Common Stock is Equity Stock Transfer, LLC. Equity Stock Transfer, LLC’s address is 237 West 37th Street, Suite 602, New York, NY 10018 and its telephone number is (212) 575-5757.
Preferred Stock
We are authorized to issue up to 25,000,000 shares of Preferred Stock in one or more series approved by our board of directors, subject to any limitations prescribed by applicable law, without further vote or action by our stockholders. Each such series of Preferred Stock shall have such number of shares, designations, preferences, voting powers, qualifications, and special or relative rights or privileges as shall be authorized and designated by our board of directors, which may include, among others, dividend rights, voting rights, liquidation preferences, conversion rights, and preemptive rights.
Preferred Stock is available for possible future financings or acquisitions and for general corporate purposes without further authorization of stockholders unless such authorization is required by applicable law or the rules of any securities exchange or market on which our stock is then listed or admitted to trading.
Our board of directors may authorize the issuance of Preferred Stock with voting, conversion, or preferential rights that could adversely affect the voting power or other rights of the holders of Common Stock. Further, the issuance of Preferred Stock, while providing flexibility in connection with possible acquisitions and other corporate purposes could, under some circumstances, have the effect of delaying, deferring or preventing a change in control of our company.
The terms, if any, on which shares of our Preferred Stock may be convertible into or exchangeable for shares of our Common Stock shall be established by our board of directors and stated in the certificate of designation or applicable offering document pertaining to any issuance of Preferred Stock.
Series A Convertible Preferred Stock. Our board of directors has designated a series of Preferred Stock consisting of 1,567,900 shares that were designated Series A Convertible Preferred Stock (“Series A Preferred Stock”). The rights related to the Series A Preferred Stock are virtually identical to the rights related to our Common Stock, except that each share of Series A Preferred Stock is convertible into 100 shares of Common Stock and the shares of Series A Preferred Stock vote together with the Common Stock on all matters submitted for a vote to our common stockholders on an as-converted basis.
Series B Convertible Preferred Stock. Our board of directors has designated a series of Preferred Stock consisting of 1,360,000 shares that were designated Series B Convertible Preferred Stock (“Series B Preferred Stock”).
The Series B Preferred Stock ranks senior to the Series A Preferred Stock with respect to dividend rights and rights on the distribution of assets upon liquidation, dissolution and winding up. Holders of Series B Preferred Stock are entitled to receive dividends accruing on a daily basis in arrears at the rate of 10% per annum, or after the occurrence and during the continuance of a Triggering Event (as defined in the Certificate of Designations, as amended (the “Amended Certificate of Designation”)), 15% per annum, based on a 360 day year and the stated value of the Series B Preferred Stock of $10.00 per share (the “Stated Value”). We may, at our option, upon not less than ten (10) days nor more than sixty (60) days’ written notice, redeem the then issued and outstanding shares of Series B Preferred Stock, in whole or in part, at any time or from time to time, for cash at a redemption price of 130% of the Stated Value per share of Series B Preferred Stock, plus any accumulated and unpaid dividends thereon to, but not including, the date fixed for redemption. Upon the occurrence of a Mandatory Redemption Event (as defined in the Amended Certificate of Designation), we will be required to redeem all of the then issued and outstanding shares of Series B Preferred Stock. The holders of the Series B Preferred Stock may elect to convert the Series B Preferred Stock into shares of Common Stock, at the applicable conversion rate (subject to certain adjustments), at any time, which right is subject to the Beneficial Ownership Limitation (as defined in the Amended Certificate of Designation). Subject to certain terms, we have the right to require the each holder of Series B Preferred Stock to mandatorily convert all or any portion of their Series B Preferred Stock. A holder of outstanding shares of Series B Preferred Stock shall be entitled to cast the number of votes equal to the number of whole shares of Common Stock into which the shares of Series B Preferred Stock held by such the Holder are convertible on any matter presented to our stockholders, except as required by law or as specifically set forth in the Amended Certificate of Designation. In the event of a liquidation, dissolution or winding up of our company, each holder of Series B Preferred Stock is entitled to receive out of our assets before any payment or distribution shall be made to the holders of any Junior Securities (as defined in the Amended Certificate of Designation), the greater of (i) an amount per share equal to the sum of (x) the Stated Value and (y) any unpaid dividends, and (ii) the same amount that a holder of Common Stock would receive on an as-converted basis.
Series C Convertible Preferred Stock. Our board of directors has designated a series of Preferred Stock consisting of 6,500,000 shares that were designated Series C Convertible Preferred Stock (“Series C Preferred Stock”).
| 2 |
The rights related to the Series C Preferred Stock are virtually identical to the rights related to our Common Stock, except that the holders of Series C Preferred Stock have no voting rights, except as required by law or as specifically set forth in our Articles. Each share of Series C Preferred Stock is convertible into a number of shares of Common Stock determined by dividing the stated value ($2.40 per share) by the conversion price (initially $0.05), subject to adjustment; provided, however, that holders of Series C Preferred Stock will not be able to convert shares of Series C Preferred Stock and receive shares of Common Stock upon such exercise to the extent that after giving effect to such issuance, the holder would beneficially own in excess of 4.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of the shares of Common Stock issuable upon conversion of the applicable shares of Series C Preferred Stock. The conversion price of the Series C Preferred Stock is subject to adjustment for stock splits, stock combinations and the like, and for issuances of shares of Common Stock or Common Stock equivalents for a price per share that is less than the then-current conversion price of the Series C Preferred Stock, subject to certain exceptions, in which case the conversion price shall be reduced to such lower price per share.
Anti-Takeover Effects of Certain Provisions of Our Articles of Incorporation, as Amended, and Our Bylaws
Provisions of our Articles and our Bylaws could make it more difficult to acquire us by means of a merger, tender offer, proxy contest, open market purchases, removal of incumbent directors and otherwise. These provisions, which are summarized below, are expected to discourage types of coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of us to first negotiate with us. We believe that the benefits of increased protection of our potential ability to negotiate with the proponent of an unfriendly or unsolicited proposal to acquire or restructure us outweigh the disadvantages of discouraging takeover or acquisition proposals because negotiation of these proposals could result in an improvement of their terms.
Calling of Special Meetings of Stockholders. Our Bylaws provide that special meetings of the stockholders may be called only by (i) our Chairman, (ii) our chief executive officer, (iii) the board of directors pursuant to a resolution adopted by directors representing a quorum of the board of directors or (iv) by the holders of shares entitled to cast not less than 33 1/3 % of the votes at the meeting.
Removal of Directors; Vacancies. Our Bylaws provide that a director may be removed either for or without cause at any special meeting of stockholders by the affirmative vote of at least a majority of the voting power of the issued and outstanding stock entitled to vote; provided, however, that notice of intention to act upon such matter shall have been given in the notice calling such meeting.
Amendment of Bylaws. The Bylaws provide that the Bylaws may be altered, amended or repealed at any meeting of the board of directors at which a quorum is present, by the affirmative vote of a majority of the directors present at such meeting.
Preferred Stock. Our Articles authorize the issuance of up to 25,000,000 shares of preferred stock with such rights and preferences as may be determined from time to time by our board of directors in their sole discretion. Our board of directors may, without stockholder approval, issue series of preferred stock with dividends, liquidation, conversion, voting or other rights that could adversely affect the voting power or other rights of the holders of our Common Stock.
Anti-Takeover Effects of Nevada Law
Nevada Business Combination Statute
We are subject to the “business combination” provisions of Sections 78.411 to 78.444 of the Nevada Revised Statutes. In general, such provisions prohibit a Nevada corporation with at least 200 stockholders from engaging in various “combination” transactions with any interested stockholder for a period of two years after the date of the transaction in which the person became an interested stockholder, unless the transaction is approved by the board of directors prior to the date the interested stockholder obtained such status or the combination is approved by the board of directors and thereafter is approved at a meeting of stockholders by the affirmative vote of stockholders representing at least 60% of the outstanding voting power held by disinterested stockholders, and extends beyond the expiration of the two-year period, unless (a) the combination was approved by the board of directors prior to the person becoming an interested stockholder; (b) the transaction by which the person first became an interested stockholder was approved by the board of directors before the person became an interested stockholder; (c) the combination is later approved by a majority of the voting power held by disinterested stockholders; or (d) if the consideration to be paid by the interested stockholder is at least equal to the highest of: (i) the highest price per share paid by the interested stockholder within the two years immediately preceding the date of the announcement of the combination or in the transaction in which it became an interested stockholder, whichever is higher, or (ii) the market value per share of common stock on the date of announcement of the combination and the date the interested stockholder acquired the shares, whichever is higher.
A “combination” is generally defined to include mergers or consolidations or any sale, lease, exchange, mortgage, pledge, transfer, or other disposition, in one transaction or a series of transactions, with an “interested stockholder” or any affiliate or associate of an interested stockholder having: (a) an aggregate market value equal to more than 5% of the aggregate market value of the assets of the corporation, (b) an aggregate market value equal to more than 5% of the aggregate market value of all outstanding voting shares of the corporation, and (c) more than 10% of the earning power or net income of the corporation.
An “interested stockholder” is generally defined to mean a beneficial owner of at least 10% of the outstanding voting power or an affiliate or associate of the corporation that has been a 10% beneficial owner within the preceding 2 years. The statutes could prohibit or delay mergers or other takeover or change in control attempts and, accordingly, may discourage attempts to acquire our company even though such a transaction may offer our stockholders the opportunity to sell their stock at a price above the prevailing market price.
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Nevada Acquisition of Controlling Interest Statute
Nevada’s Acquisition of Controlling Interest Statute (NRS Sections 78.378-78.3793) applies only to Nevada corporations with at least 200 stockholders, including at least 100 stockholders of record who are Nevada residents, which conduct business directly or indirectly in Nevada and whose articles of incorporation or bylaws in effect 10 days following the acquisition of a controlling interest by an acquiror do not prohibit its application. As of the date of this prospectus, we do not believe we have 100 stockholders of record who are residents of Nevada, although there can be no assurance that in the future the acquisition of controlling interest statutes will not apply to us.
Nevada’s Acquisition of Controlling Interest Statute, prohibits an acquiror, under certain circumstances, from voting shares of a target corporation’s stock after crossing certain threshold ownership percentages, unless the acquiror obtains the approval of the target corporation’s stockholders. The statute specifies three thresholds that constitute a controlling interest: (a) at least one-fifth but less than one-third; (b) at least one-third but less than a majority; and (c) a majority or more, of the outstanding voting power. Once an acquiror crosses one of these thresholds, shares which it acquired in the transaction exceeding the threshold (or within ninety days preceding the date thereof) become “control shares” which could be deprived of the right to vote until a majority of the disinterested stockholders restore that right.
A special stockholders meeting may be called at the request of the acquiror to consider the voting rights of the acquiror’s shares. If the acquiror requests a special meeting and gives an undertaking to pay the expenses of said meeting, then the meeting must take place no earlier than 30 days (unless the acquiror requests that the meeting be held sooner) and no more than 50 days (unless the acquiror agrees to a later date) after the delivery by the acquiror to the corporation of an information statement which sets forth the range of voting power that the acquiror has acquired or proposes to acquire and certain other information concerning the acquiror and the proposed control share acquisition.
If no such request for a stockholders meeting is made, consideration of the voting rights of the acquiror’s shares must be taken at the next special or annual stockholders meeting. If the stockholders fail to restore voting rights to the acquiror, or if the acquiror fails to timely deliver an information statement to the corporation, then the corporation may, if so provided in its articles of incorporation or bylaws, call certain of the acquiror’s shares for redemption at the average price paid for the control shares by the acquiror.
In the event the stockholders restore full voting rights to a holder of control shares that owns a majority of the voting stock, then all other stockholders who do not vote in favor of restoring voting rights to the control shares may demand payment for the “fair value” of their shares as determined by a court in dissenters rights proceeding pursuant to Chapter 92A of the Nevada Revised Statutes.
Limitation of Liability and Indemnification Matters
NRS Section 78.7502 provides that a corporation shall indemnify any director, officer, employee or agent of a corporation against expenses, including attorneys’ fees, actually and reasonably incurred by him in connection with any the defense to the extent that a director, officer, employee or agent of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to Section 78.7502(1) or 78.7502(2), or in defense of any claim, issue or matter therein.
NRS 78.7502(1) provides that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, except an action by or in the right of the corporation, by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys’ fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with the action, suit or proceeding if he: (a) is not liable pursuant to NRS 78.138; or (b) acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.
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NRS Section 78.7502(2) provides that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses, including amounts paid in settlement and attorneys’ fees actually and reasonably incurred by him in connection with the defense or settlement of the action or suit if he: (a) is not liable pursuant to NRS 78.138; or (b) acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation. Indemnification may not be made for any claim, issue or matter as to which such a person has been adjudged by a court of competent jurisdiction, after exhaustion of all appeals there from, to be liable to the corporation or for amounts paid in settlement to the corporation, unless and only to the extent that the court in which the action or suit was brought or other court of competent jurisdiction determines upon application that in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper.
NRS Section 78.747 provides that except as otherwise provided by specific statute, no director or officer of a corporation is individually liable for a debt or liability of the corporation, unless the director or officer acts as the alter ego of the corporation. The court as a matter of law must determine the question of whether a director or officer acts as the alter ego of a corporation.
Our Articles and Bylaws provide that we shall indemnify our directors, officers, employees and agents to the full extent permitted by NRS, including in circumstances in which indemnification is otherwise discretionary under such law.
These indemnification provisions may be sufficiently broad to permit indemnification of our officers, directors and other corporate agents for liabilities (including reimbursement of expenses incurred) arising under the Securities Act of 1933.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of our company pursuant to the foregoing provisions, or otherwise, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable.
We have the power to purchase and maintain insurance on behalf of any person who is or was one of our directors or officers, or is or was serving at our request as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other business against any liability asserted against the person or incurred by the person in any of these capacities, or arising out of the person’s fulfilling one of these capacities, and related expenses, whether or not we would have the power to indemnify the person against the claim under the provisions of the NRS. We do not currently maintain director and officer liability insurance on behalf of our directors and officers; however, we intends to so purchase and maintain such insurance when economically feasible.
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Exhibit 31.1
TITAN ENVIRONMENTAL SOLUTIONS INC.
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO RULE 13A-14(A)
I, Glen Miller, certify that:
1. I have reviewed this Annual Report on Form 10-K of Titan Environmental Solutions Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: March 31, 2025
| By: | /s/ Glen Miller | |
| Name: | Glen Miller | |
| Title: | Chief Executive Officer |
Exhibit 31.2
TITAN ENVIRONMENTAL SOLUTIONS INC.
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO RULE 13A-14(A)
I, Michael Jansen, certify that:
1. I have reviewed this Annual Report on Form 10-K of Titan Environmental Solutions Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: March 31, 2025
| By: | /s/ Michael Jansen | |
| Name: | Michael Jansen | |
| Title: | Chief Financial Officer |
Exhibit 32.1
TITAN ENVIRONMENTAL SOLUTIONS INC.
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report on Form 10-K of Titan Environmental Solutions Inc. (the “Company”) for the year ended December 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Glen Miller, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. ss.1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
| By: | /s/ Glen Miller | |
| Name: | Glen Miller | |
| Title: | Chief Executive Officer | |
| Date: | March 31, 2025 |
Exhibit 32.2
TITAN ENVIRONMENTAL SOLUTIONS INC.
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report on Form 10-K of Titan Environmental Solutions Inc. (the “Company”) for the year ended December 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael Jansen, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss.1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
| By: | /s/ Michael Jansen | |
| Name: | Michael Jansen | |
| Title: | Chief Financial Officer | |
| Date: | March 31, 2025 |
Cover - USD ($) |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2024 |
Mar. 20, 2025 |
Jun. 28, 2024 |
|
| Cover [Abstract] | |||
| Document Type | 10-K | ||
| Amendment Flag | false | ||
| Document Annual Report | true | ||
| Document Transition Report | false | ||
| Document Period End Date | Dec. 31, 2024 | ||
| Document Fiscal Period Focus | FY | ||
| Document Fiscal Year Focus | 2024 | ||
| Current Fiscal Year End Date | --12-31 | ||
| Entity File Number | 000-56148 | ||
| Entity Registrant Name | Titan Environmental Solutions Inc. | ||
| Entity Central Index Key | 0001514056 | ||
| Entity Tax Identification Number | 30-0580318 | ||
| Entity Incorporation, State or Country Code | NV | ||
| Entity Address, Address Line One | 300 E. Long Lake Road | ||
| Entity Address, Address Line Two | Suite 100A | ||
| Entity Address, City or Town | Bloomfield Hills | ||
| Entity Address, State or Province | MI | ||
| Entity Address, Postal Zip Code | 48304 | ||
| City Area Code | (248) | ||
| Local Phone Number | 775-7400 | ||
| Title of 12(g) Security | Common Stock, par value $0.0001 per share | ||
| Entity Well-known Seasoned Issuer | No | ||
| Entity Voluntary Filers | No | ||
| Entity Current Reporting Status | Yes | ||
| Entity Interactive Data Current | Yes | ||
| Entity Filer Category | Non-accelerated Filer | ||
| Entity Small Business | true | ||
| Entity Emerging Growth Company | false | ||
| Entity Shell Company | false | ||
| Entity Public Float | $ 1,217,609 | ||
| Entity Common Stock, Shares Outstanding | 39,543,674 | ||
| ICFR Auditor Attestation Flag | false | ||
| Document Financial Statement Error Correction [Flag] | false | ||
| Entity Listing, Par Value Per Share | $ 0.0001 | ||
| Auditor Firm ID | 317 | ||
| Auditor Opinion [Text Block] | We have audited the accompanying consolidated balance sheets of Titan Environmental Solutions Inc. and its subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations, changes in mezzanine equity and stockholders’ equity (deficiency) and cash flows for the years then ended, and the related notes to the consolidated financial statements (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. | ||
| Auditor Name | Freed Maxick P.C. | ||
| Auditor Location | Buffalo, New York |
Consolidated Balance Sheets (Parenthetical) - USD ($) |
Dec. 31, 2024 |
Dec. 31, 2023 |
|---|---|---|
| Allowance for credit loss | $ 15,556 | $ 40,867 |
| Preferred stock, shares authorized | 25,000,000 | 25,000,000 |
| Common stock, par value | $ 0.0001 | $ 0.0001 |
| Common stock, shares authorized | 400,000,000 | 400,000,000 |
| Common stock, shares issued | 28,211,953 | 15,134,545 |
| Common stock, shares outstanding | 28,211,953 | 15,134,545 |
| Series B Redeemable Convertible Preferred Stock [Member] | ||
| Preferred stock, par value | $ 0.0001 | $ 0.0001 |
| Preferred stock shares issued | 578,245 | 0 |
| Preferred stock shares outstanding | 578,245 | 0 |
| Series A Convertible Preferred Stock [Member] | ||
| Preferred stock, par value | $ 0.0001 | $ 0.0001 |
| Preferred stock shares issued | 1,397,900 | 630,900 |
| Preferred stock shares outstanding | 1,397,900 | 630,900 |
Consolidated Statements of Operations (Parenthetical) - USD ($) |
12 Months Ended | |
|---|---|---|
Dec. 31, 2024 |
Dec. 31, 2023 |
|
| Income Statement [Abstract] | ||
| Loss on disposal of subsidiary | $ 785,871 | $ 785,871 |
Consolidated Statement of Changes in Stockholders' Equity (Deficiency) - USD ($) |
Members' Equity (Deficiency) [Member] |
Members' Equity (Deficiency) [Member]
Pre Titan Merger [Member]
|
Preferred Stock [Member]
Series A Preferred Stock [Member]
|
Preferred Stock [Member]
Series A Preferred Stock [Member]
Pre Titan Merger [Member]
|
[1] |
Preferred Stock [Member]
Series B Preferred Stock [Member]
|
[2] |
Preferred Stock [Member]
Series B Preferred Stock [Member]
Pre Titan Merger [Member]
|
[2] |
Preferred Stock [Member]
Series B Redeemable Convertible Preferred Stock [Member]
|
Common Stock [Member] |
Common Stock [Member]
Pre Titan Merger [Member]
|
Additional Paid-in Capital [Member] |
Additional Paid-in Capital [Member]
Pre Titan Merger [Member]
|
Retained Earnings [Member] |
Retained Earnings [Member]
Pre Titan Merger [Member]
|
Series B Preferred Stock [Member] |
Total |
Pre Titan Merger [Member] |
Series B Redeemable Convertible Preferred Stock [Member] |
|||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Balance at Dec. 31, 2022 | $ 2,526,104 | [1] | $ 2,526,104 | ||||||||||||||||||||||
| Balance, shares at Dec. 31, 2022 | |||||||||||||||||||||||||
| Balance, value at Dec. 31, 2022 | 2,526,104 | ||||||||||||||||||||||||
| Balance, shares at Dec. 31, 2022 | [1] | ||||||||||||||||||||||||
| Issuance of warrants | [1] | 1,375,000 | (1,075,000) | 300,000 | |||||||||||||||||||||
| Effect of reverse acquisition | (2,031,503) | $ 63 | [1] | $ 147 | $ 3,395 | 30,088,068 | (664,601) | 27,395,569 | |||||||||||||||||
| Effect of reverse acquisition, shares | 630,900 | [1] | 1,470,135 | 33,952,778 | |||||||||||||||||||||
| Stock-based compensation | $ 7 | [1] | $ 30 | 5,590,448 | 5,590,485 | ||||||||||||||||||||
| Net loss | $ (664,601) | [1] | (148,340,448) | (148,340,448) | $ (664,601) | ||||||||||||||||||||
| Settlement of note due to contribution | 170,000 | [1] | 170,000 | ||||||||||||||||||||||
| Share-based compensation, shares | 70,100 | [1] | 300,000 | ||||||||||||||||||||||
| Cancelation of Series C Preferred Stock for options | $ (7) | [1] | 7 | ||||||||||||||||||||||
| Cancelation of Series C Preferred Stock for options, shares | [1] | (70,100) | |||||||||||||||||||||||
| Exchange of debt, preferred stock and common stock for common stock rights | [1] | $ (147) | $ (1,912) | 118,324,275 | 118,322,216 | ||||||||||||||||||||
| Exchange of debt, preferred stock and common stock for common stock rights, shares | (1,470,135) | (19,118,233) | |||||||||||||||||||||||
| Balance at Dec. 31, 2023 | $ 63 | [1] | $ 1,513 | 155,377,798 | (150,080,049) | 5,299,325 | |||||||||||||||||||
| Balance, shares at Dec. 31, 2023 | 0 | ||||||||||||||||||||||||
| Balance, value at Dec. 31, 2023 | |||||||||||||||||||||||||
| Balance, shares at Dec. 31, 2023 | 630,900 | [1] | 15,134,545 | ||||||||||||||||||||||
| Issuance of warrants | [1] | 3,958,982 | (862,289) | 3,096,693 | |||||||||||||||||||||
| Issuance of common stock due to exercise of share rights | [1] | $ 1,308 | (1,308) | ||||||||||||||||||||||
| Exercise of share pre warrants, shares | 13,077,408 | ||||||||||||||||||||||||
| Series B Preferred Offering | [1] | 2,653,105 | 2,653,105 | ||||||||||||||||||||||
| Series B Preferred Offering, shares | 422,200 | 422,200 | |||||||||||||||||||||||
| Series B Preferred Offering | $ 1,568,895 | ||||||||||||||||||||||||
| Series B Preferred Offering costs | [1] | (290,390) | (290,390) | ||||||||||||||||||||||
| Series A Preferred shares issued in relation to guarantee agreement | $ 22 | [1] | 3,009,978 | 3,010,000 | |||||||||||||||||||||
| Series A Preferred shares issued in relation to guarantee agreement, shares | [1] | 215,000 | |||||||||||||||||||||||
| Effect of reverse acquisition | $ 55 | [1] | 8,567,945 | 8,568,000 | |||||||||||||||||||||
| Effect of reverse acquisition, shares | [1] | 552,000 | |||||||||||||||||||||||
| Issuance of series B preferred | [1] | (1,322,696) | (1,322,696) | ||||||||||||||||||||||
| Issuance of Series B preferred, shares | 105,592 | ||||||||||||||||||||||||
| Issuance of Series B preferred | $ 1,372,696 | ||||||||||||||||||||||||
| Issuance of series B preferred due to extinguishment of debt | [1] | ||||||||||||||||||||||||
| Issuance of series B preferred due to extinguishment of debt, shares | 50,453 | ||||||||||||||||||||||||
| Issuance of series B preferred due to extinguishment of debt | $ 655,889 | ||||||||||||||||||||||||
| Remeasurement of Series B Preferred Stock to redemption value | [1] | (4,249,599) | (4,249,599) | ||||||||||||||||||||||
| Remeasurement of Series B Preferred Stock to redemption value | $ 4,249,599 | ||||||||||||||||||||||||
| Stock-based compensation | [1] | 65,293 | 65,293 | ||||||||||||||||||||||
| Net loss | [1] | (21,543,305) | (21,543,305) | ||||||||||||||||||||||
| Balance at Dec. 31, 2024 | $ 140 | [1] | $ 2,821 | $ 167,769,108 | $ (172,485,643) | $ (4,713,574) | |||||||||||||||||||
| Balance, shares at Dec. 31, 2024 | 578,245 | 578,245 | |||||||||||||||||||||||
| Balance, value at Dec. 31, 2024 | $ 7,847,079 | ||||||||||||||||||||||||
| Balance, shares at Dec. 31, 2024 | 1,397,900 | [1] | 28,211,953 | ||||||||||||||||||||||
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Pay vs Performance Disclosure - USD ($) |
12 Months Ended | |
|---|---|---|
Dec. 31, 2024 |
Dec. 31, 2023 |
|
| Pay vs Performance Disclosure [Table] | ||
| Net Income (Loss) | $ (21,543,305) | $ (149,005,049) |
Insider Trading Arrangements |
3 Months Ended |
|---|---|
Dec. 31, 2024 | |
| Insider Trading Arrangements [Line Items] | |
| Rule 10b5-1 Arrangement Adopted | false |
| Non-Rule 10b5-1 Arrangement Adopted | false |
| Rule 10b5-1 Arrangement Terminated | false |
| Non-Rule 10b5-1 Arrangement Terminated | false |
Cybersecurity Risk Management and Strategy Disclosure |
12 Months Ended |
|---|---|
Dec. 31, 2024 | |
| Cybersecurity Risk Management, Strategy, and Governance [Abstract] | |
| Cybersecurity Risk Management Processes for Assessing, Identifying, and Managing Threats [Text Block] | We
acknowledge the increasing importance of cybersecurity in today’s digital and interconnected world. Cybersecurity threats pose
significant risks to the integrity of our systems and data, potentially impacting our business operations, financial condition and reputation. As a smaller reporting company, we currently do not have formalized cybersecurity measures, a dedicated cybersecurity team or specific protocols in place to manage cybersecurity risks. Our approach to cybersecurity is in the developmental stage, and we have not yet conducted comprehensive risk assessments, established an incident response plan or engaged with external cybersecurity consultants for assessments or services.
Given our current stage of cybersecurity development, we have not experienced any significant cybersecurity incidents to date. However, we recognize that the absence of a formalized cybersecurity framework may leave us vulnerable to cyberattacks, data breaches and other cybersecurity incidents. Such events could potentially lead to unauthorized access to, or disclosure of, sensitive information, disrupt our business operations, result in regulatory fines or litigation costs and negatively impact our reputation among customers and partners.
We are in the process of evaluating our cybersecurity needs and developing appropriate measures to enhance our cybersecurity posture. This includes considering the engagement of external cybersecurity experts to advise on best practices, conducting vulnerability assessments and developing an incident response strategy. Our goal is to establish a cybersecurity framework that is commensurate with our size, complexity and the nature of our operations, thereby reducing our exposure to cybersecurity risks. In addition, our board of directors will oversee any cybersecurity risk management framework and a dedicated committee of our board of directors or an officer appointed by our board of directors will review and approve any cybersecurity policies, strategies and risk management practices.
Despite our efforts to improve our cybersecurity measures, there can be no assurance that our initiatives will fully mitigate the risks posed by cyber threats. The landscape of cybersecurity risks is constantly evolving, and we will continue to assess and update our cybersecurity measures in response to emerging threats.
For a discussion of potential cybersecurity risks affecting us, please refer to the “Risk Factors” section. |
| Cybersecurity Risk Management Processes Integrated [Flag] | false |
| Cybersecurity Risk Management Processes Integrated [Text Block] | Cybersecurity threats pose significant risks to the integrity of our systems and data, potentially impacting our business operations, financial condition and reputation. |
| Cybersecurity Risk Board of Directors Oversight [Text Block] | In addition, our board of directors will oversee any cybersecurity risk management framework and a dedicated committee of our board of directors or an officer appointed by our board of directors will review and approve any cybersecurity policies, strategies and risk management practices. |
ORGANIZATION AND NATURE OF OPERATIONS |
12 Months Ended |
|---|---|
Dec. 31, 2024 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| ORGANIZATION AND NATURE OF OPERATIONS | NOTE 1 – ORGANIZATION AND NATURE OF OPERATIONS
Titan Environmental Solutions Inc., formerly known as TraQiQ, Inc. (“Titan” or along with its wholly-owned subsidiaries, referred to herein as the “Company”), is based out of Bloomfield Hills, Michigan and is an integrated provider of non-hazardous solid waste and recycling collection, transportation and disposal services. The Company conducts its business primarily through its principal operating subsidiary, Standard Waste Services, LLC (“Standard”), which provides waste and recycling collection and disposal services to industrial generators and commercial contractors located in Michigan.
On May 31, 2024, the Company completed its acquisition of Standard through its subsidiary, Titan Trucking, LLC (Titan Trucking”). In accordance with ASC 805, the transaction was treated as a business combination (Note 3 – Business Combinations). On May 19, 2023, the Company completed its acquisition of Titan Trucking and Titan Trucking’s wholly owned subsidiary, Senior Trucking, LLC (“Senior”). In accordance with ASC 805 - Business Combinations (“ASC 805”), the transaction was treated as a reverse acquisition for financial reporting purposes, with the Company treated as the legal acquirer and Titan Trucking treated as the accounting acquirer. The Company remains the continuing registrant and reporting company. Accordingly, the historical financial and operating data of the Company, which covers periods prior to the closing date of the Titan Merger, reflects the assets, liabilities, and results of operations for Titan Trucking and does not reflect the assets, liabilities and results of operations of the Company for the periods prior to May 19, 2023 (Note 3 – Business Combinations).
Effective January 10, 2024, the Company redomiciled from a California corporation into a Nevada corporation (the “redomicile”). As a result of the redomicile, the Company’s name was changed from TraQiQ, Inc. (“TraQiQ”) to Titan Environmental Solutions Inc.
On July 28, 2023, the Company, its wholly-owned subsidiary TraQiQ Solutions, Inc (“Ci2i”), and Ajay Sikka (“Sikka”), a director of the Company and its former chief executive officer, signed an Assignment of Stock Agreement (the “Assignment Agreement”). Under the terms of the Assignment Agreement, the Company assigned and transferred to Sikka all of the rights, title, and interests in the issued and outstanding equity interests of Ci2i in exchange for consideration of $1. The Company additionally assumed from Ci2i loans and short term debts valued at $209,587 plus fees and interest. Other than the liabilities assumed from Ci2i, the balance sheet amounts and operations of Ci2i as of the date of sale were insignificant.
On October 31, 2024, the Company sold all of the capital stock of its subsidiary Recoup Technologies, Inc. (“Recoup”) for a purchase price equal to $1,000,000, which consisted of a note receivable of the purchaser in the principal amount of $250,000 and the cancellation and release by certain affiliates of indebtedness of the Company in the aggregate amount of $750,000 (Note 4 – Discontinued Operations). Accordingly, the historical financial and operating data of the Company reflects Recoup’s results as a discontinued operation, and amounts and disclosures pertain to continuing operations for all periods presented, unless otherwise noted.
Change in Equity Instruments and Share Authorizations Due to Redomicile
As a result of the redomicile, each share of TraQiQ’s’s common stock issued and outstanding immediately prior to the redomicile was exchanged for one share of Titan’s common stock. Additionally, each share of the TraQiQ Series C Convertible Preferred Stock issued and outstanding immediately prior to the effective time of the redomicile was exchanged for one share of Series A Convertible Preferred Stock of the Nevada corporation (the “Series A Preferred Stock”), which has substantially the same rights and preferences as the TraQiQ Series C Preferred Stock. Each of TraQiQ’s Series A Rights to Receive Common Stock issued and outstanding immediately prior to the redomicile was exchanged for one Series A Right to Receive Common Stock of Titan, which has substantially the same rights and preferences as the TraQiQ Series A Rights to Acquire Common Stock. Each of the TraQiQ Series B Rights to Receive Common Stock issued and outstanding immediately prior to the redomicile was exchanged for one Series B Right to Receive Common Stock of Titan, which has substantially the same rights and preferences as the TraQiQ Series B Rights to Acquire Common Stock.
As a result of the redomicile, all of TraQiQ’s outstanding warrants were assumed by Titan and now represent warrants to acquire shares of Titan’s common stock. The redomicile increased the Company’s authorized capital stock to 425,000,000 total shares, consisting of shares of common stock, par value $ per share, and shares of “blank check” preferred stock, par value $ per share, of which shares were designated “Series A Convertible Preferred Stock”. In connection with the redomicile, the Company also adopted the “Titan Environmental Solutions Inc. 2023 Equity Incentive Plan.”
Going Concern
The Company’s consolidated financial statements as of December 31, 2024 and 2023 are prepared using accounting principles generally accepted in the United States of America (“GAAP”), which contemplates continuation of the Company as a going concern. This contemplates the realization of assets and liquidation of liabilities in the ordinary course of business.
For the year ended December 31, 2024, the Company had a net loss from continuing operations of $10,404,396 and a working capital deficit of $17,160,714 as of December 31, 2024. As a result of these factors, management has concluded that there is substantial doubt about the Company’s ability to continue as a going concern for a period of one year after the date that the consolidated financial statements are issued. The Company’s consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
The Company’s continuation as a going concern is contingent upon its ability to obtain additional financing and to generate revenue and cash flow to meet its obligations on a timely basis. The Company will continue to seek to raise additional funding through debt or equity financing during the next twelve months from the date of issuance of these consolidated financial statements. Management believes that actions presently being taken to obtain additional funding provide the opportunity for the Company to continue as a going concern. There is no guarantee the Company will be successful in achieving these objectives. The Company has been successful in attracting substantial capital from investors interested in the current public status of the Company that has been used to support the Company’s ongoing cash outlays. This includes raising proceeds of approximately $3.2 million from the issuance of a combination of warrants and convertible notes. Additionally, the Company raised approximately $3.9 million in proceeds from the Company’s Series B Preferred Stock offering.
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BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the regulations of the United States Securities and Exchange Commission.
Principles of Consolidation and Basis of Accounting
The consolidated financial statements include the accounts of Titan Environmental Solutions Inc and its wholly owned subsidiaries. All material inter-company accounts and transactions have been eliminated. The Company’s policy is to prepare its consolidated financial statements on the accrual basis of accounting, whereby revenue is recognized when earned and expenses are recognized when incurred.
Accounting Estimates
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.
Business Combinations
Under the guidance enumerated in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805, if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, the set is not considered a business and is accounted for as an asset acquisition at which point, the acquirer measures the assets acquired based on their cost, which is allocated on a relative fair value basis.
Business combinations are accounted for utilizing the fair value of consideration determined by the Company’s management and external specialists. The Company recognizes estimated fair values of the tangible and intangible assets acquired and liabilities assumed as of the acquisition date. Goodwill is recognized as any excess in fair value over the net value of assets acquired and liabilities assumed.
Cash
The Company considers all highly-liquid money market funds and certificates of deposit with original maturities of less than three months to be cash equivalents. The Company maintains its cash balances with various banks. The balances are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. The Company monitors the cash balances held in its bank accounts, and as of December 31, 2024 and 2023, did not have any concerns regarding cash balances which exceeded the insured amounts.
Accounts Receivable, net
Accounts receivables are recorded at the amount the Company expects to collect on the balance outstanding at year-end. Management closely monitors outstanding balances during the year and allocates an allowance account if appropriate. The Company estimates and records a provision for its expected credit losses related to its financial instruments, including its trade receivables and contract assets. The Company considers historical collection rates, the current financial status of its customers, macroeconomic factors, and other industry-specific factors when evaluating for current expected credit losses. Forward-looking information is also considered in the evaluation of current expected credit losses. However, because of the short time to the expected receipt of accounts receivable, the Company believes that the carrying value, net of expected losses, approximates fair value and therefore, relies more on historical and current analysis of such financial instruments.
As of December 31, 2024 and 2023, the Company allocated $15,556 and $40,867, respectively to the allowance for credit loss. The Company writes off bad debts as they occur during the year. As of January 1, 2023, the Company had accounts receivable, net of $517,583.
Property and Equipment, net
Property and equipment is stated at cost. Depreciation is computed primarily using the straight-line method over the estimated useful lives of the assets. Expenditures for repairs and maintenance are charged to expense as incurred. For assets sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any related gain or loss is reflected in the condensed consolidated statement of operations or the period in which the disposal occurred. The Company computes depreciation utilizing estimated useful lives, as stated below:
Management regularly reviews property and equipment for possible impairment. This review occurs annually or more frequently if events or changes in circumstances indicate the carrying amount of the asset may not be recoverable. Based on management’s assessment, there were no indicators of impairment of the Company’s property and equipment as of December 31, 2024 and 2023, respectively.
Finite Long-lived Intangible Assets, Net
Finite long-lived intangible assets are recorded at their estimated fair value at the date of acquisition. Finite long-lived intangible assets are amortized on a straight-line basis over their estimated useful lives. Management annually evaluates the estimated remaining useful lives of the finite intangible assets to determine whether events or changes in circumstances warrant a revision to the remaining period of amortization. The Company also recognized finite intangible intellectual property, noncompete agreement, customer list, and tradename assets from its reverse acquisition with Titan Trucking (Note 3 – Business Combinations) which were subsequently impaired and disposed of during the sale of Recoup (Note 4 – Discontinued Operations).
Finite long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be fully recoverable. An impairment loss is recognized if the sum of the expected long-term undiscounted cash flows the asset is expected to generate is less than its carrying amount. Any write-downs are treated as permanent reductions in the carrying amount of the respective asset. Management assessed and concluded that an impairment write-down would not be necessary as of December 31, 2024 and 2023.
The Company amortizes these intangible assets on a straight-line basis over their estimated useful lives, as stated below:
Goodwill
Goodwill represents the excess of the acquisition price of a business over the fair value of identified net assets of that business. Goodwill has an indefinite lifespan and is not amortized. The Company evaluates goodwill for impairment at least annually and records an impairment charge when the carrying amount of a reporting unit with goodwill exceeds the fair value of the reporting unit. As of December 31, 2024 and 2023, the Company’s sole reporting unit within continuing operations was its Trucking unit. Prior to the Company’s sale of Recoup (Note 4 – Discontinued Operations), the Company had a second reporting unit: the Digester unit.
The Company assesses qualitative factors to determine if it is necessary to conduct a quantitative goodwill impairment test. If deemed necessary, a quantitative assessment of the reporting unit’s fair value is conducted and compared to its carrying value in order to determine the impairment charge (Note 7 – Goodwill).
Leases
The Company assesses whether a contract is or contains a lease at inception of the contract and recognizes right-of-use assets (“ROU”) and corresponding lease liabilities at the lease commencement date. The lease term is used to calculate the lease liability, which includes options to extend or terminate the lease when it is reasonably certain that the option will be exercised. The leases the Company currently holds do not have implicit borrowing rates, therefore the Company utilizes its incremental borrowing rate to measure the ROU assets and liabilities. Operating lease expense is generally recognized on a straight-line basis over the lease term. All leases that have lease terms of one year or less are considered short-term leases, and therefore are not recorded through a ROU asset or liability. The Company has elected to apply the practical expedient to not separate the lease and non-lease components of a contract.
Loan Origination Fees
Loan origination fees represent loan fees, inclusive of original issue discounts, relating to convertible note payables and note payables granted to the Company. The Company amortizes loan origination fees over the life of the note (Note 9 – Notes Payable and Note 10 – Convertible Notes Payable). Amortization expense of loan issuance fees for the years ended December 31, 2024 and 2023 was $1,828,662 and $385,002, respectively. The net amounts of $3,798,515 and $434,542 were netted against the outstanding notes payable as of December 31, 2024 and 2023, respectively.
Fair Value Measurements
ASC 820 “Fair Value Measurements” defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosure about fair value measurements.
The following provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which fair value is observable:
Level 1- fair value measurements are those derived from quoted prices (unadjusted in active markets for identical assets or liabilities);
Level 2- fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
Level 3- fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).
Financial instruments classified as Level 1 quoted prices in active markets include cash.
These financial instruments are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment to estimation. Valuations based on unobservable inputs are highly subjective and require significant judgments. Changes in such judgments could have a material impact on fair value estimates.
In addition, since estimates are as of a specific point in time, they are susceptible to material near-term changes. Changes in economic conditions may also dramatically affect the estimated fair values.
Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management for the respective periods. The respective carrying value of certain financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include cash, short-term notes payable, accounts payable and accrued expenses. The carrying value of long-term debt approximates fair value, as the variable interest rates approximate current market rates. The Company measured its derivative liabilities, mezzanine equity and common stock as of December 31, 2024, at fair value on a recurring basis using level 3 inputs.
Convertible Instruments
The Company evaluates its convertible instruments, such as warrants and convertible notes, to determine if those contracts or embedded components of those contracts qualify as equity instruments, derivative liabilities, or liabilities, to be separately accounted for in accordance with ASC 815 “Derivatives and Hedging” (“ASC 815”) and ASC 480 “Distinguishing Liabilities from Equity” (“ASC 480”). The assessment considers whether the convertible instruments are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the convertible instruments meet all of the requirements for equity classification under ASC 815, including whether the convertible instruments are indexed to the Company’s own ordinary shares and whether the instrument holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of the instrument’s issuance, and as of each subsequent balance sheet date while the instruments are outstanding. If the classification changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification.
Embedded conversion options and any related freestanding instruments are recorded as a discount to the host instrument. The Company allocates proceeds based on the relative fair values of the debt and equity components. The accounting treatment of derivative financial instruments requires that the Company record embedded conversion options and any related freestanding instruments at their fair values as of the inception date of the agreement and at fair value as of each subsequent balance sheet date. Any change in fair value is recorded in earnings each period as non-operating, non-cash income or expense.
Common Stock
Beginning on December 31, 2024, due to the lack of an active market for the Company’s common stock, management was required to estimated the fair value of the Company’s common stock at the time of each grant of the common stock. The Company utilized various Level 3 valuation methodologies to estimate the fair value of its common stock. Each valuation methodology includes estimates and assumptions that require the Company’s judgment. These estimates and assumptions include a number of objective and subjective factors in determining the value of the Company’s common stock at each grant date, including the following factors:
Prior to December 31, 2024, the Company valued its common stock price using the trading price of its publicly listed common stock. The Company intends to return to this valuation methodology upon the establishment of an active market for the Company’s common stock. Under ASC 250-10-45-17, the Company is applying the change in the accounting estimate prospectively. The Company believes the change in estimate is preferable because it allows the Company to record a more accurate measurement of the fair value of the Company’s common stock.
Redeemable Series B Preferred Stock
The Company applies the guidance enumerated in ASC 480, when determining the classification and measurement of preferred stock. Preferred stock subject to mandatory redemption, if any, is classified as a liability and is measured at fair value. The Company classifies conditionally redeemable preferred stock, which includes preferred stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control, as mezzanine equity. At all other times, the Company classifies its preferred stock in stockholders’ equity. The Company subsequently measures mezzanine equity based on whether the instrument is currently redeemable or whether or not it is probable the instrument will become redeemable. Given the assessed probability that the instrument will become redeemable, the Company has elected to adjust the value of the Series B Preferred shares to its maximum redemption amount at each reporting date, including amounts representing dividends not currently declared or paid, but which will be payable under the redemption feature.
Stock-Based Compensation
The Company accounts for stock awards to employees and non-employees in accordance with ASC Topic 718, “Compensation – Stock Compensation” by measuring the cost of services received in exchange for the award of equity instruments based upon the fair value of the award on the date of grant. The fair value of that award is then ratably recognized as expense over the period during which the recipient is required to provide services in exchange for that award.
Revenue Recognition
The Company records revenue based on a five-step model in accordance with FASB ASC 606, Revenue from Contracts with Customers, which requires the following:
1. Identify the contract with a customer.
2. Identify the performance obligations in the contract.
3. Determine the transaction price of the contract.
4. Allocate the transaction price to the performance obligations in the contract.
5. Recognize revenue when the performance obligations are met or delivered.
The Company’s operating revenues are generated from fees charged for the collection and disposal of waste by its Trucking Segment. Revenues are recognized at a point in time immediately after completion of disposal of waste at a landfill or transfer station. Revenues from collection operations are influenced by factors such as collection frequency, type of collection furnished, type and volume or weight of the waste collected, distance to the disposal facility or material recovery facility and disposal costs. Fees charged at transfer stations are generally based on the weight or volume of waste deposited, including the cost of loading, transporting, and disposing of the solid waste at a disposal site. The fees charged for services generally include environmental, fuel charge and regulatory recovery fees, which are intended to pass through to customers direct and indirect costs incurred. For waste collection and disposal services the Company invoices its customers with standard 30-day payment terms without any significant financing terms.
Concentration Risk from Revenues
A major customer is defined as a customer that represents 10% or greater of total revenues. The Company does not believe that the concentration risk associated with these customers or vendors will have a materially adverse effect on the business. The Company’s concentration of revenue is as follows:
Concentration Risk from Accounts Receivable
A major customer is defined as a customer that represents 10% or greater of total accounts receivable, net. The Company does not believe that the risk associated with these customers or vendors will have an adverse effect on the business. The Company’s concentration of accounts receivable is as follows:
The Company maintains positive customer relationships and continually expands its customer base, mitigating the impact of any potential concentration risks that exist.
Income Taxes and Uncertain Tax Positions
The Company and its U.S. subsidiaries file a consolidated federal income tax return and is taxed as a C-Corporation, whereby it is subject to federal and state income taxes. The Company accounts for income taxes in accordance with ASC 740, “Income Taxes”. ASC 740 requires an asset and liability approach for financial accounting and reporting for income taxes, established for all the entities a minimum threshold for financial statement recognition of the benefit of tax positions, and requires certain expanded disclosures. The provision for income taxes is based upon income or loss after adjustment for those permanent items that are not considered in the determination of taxable income. Deferred income taxes represent the tax effects of differences between the financial reporting and tax basis of the Company’s assets and liabilities at the enacted tax rates in effect for the years in which the differences are expected to reverse. The Company evaluates the recoverability of deferred tax assets and establishes a valuation allowance when it is more likely than not that some portion or all the deferred tax assets will not be realized. Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In management’s opinion, adequate provisions for income taxes have been made. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary. The Company’s taxes are subject to examination by taxation authorities for a period of three years.
Advertising and Marketing Costs
Costs associated with advertising are charged to expense as occurred. For the years ended December 31, 2024 and 2023 the advertising and marketing costs were $66,579 and $61,724, respectively.
Recently Issued Accounting Standards
The Company has reviewed the recent accounting pronouncements issued by the Financial Accounting Standards Board (“FASB”), including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the SEC, and determined that these pronouncements do not have a material impact on the Company’s current or anticipated consolidated financial statement presentation or disclosures.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) – Improvements to Income Tax Disclosures (ASU 2023-09). ASU 2023-09 requires that an entity, on an annual basis, disclose additional income tax information, primarily related to the rate reconciliation and income taxes paid. The amendment in the ASU is intended to enhance the transparency and decision usefulness of income tax disclosures. The ASU’s amendments are effective for annual periods beginning after December 15, 2024. The Company is currently evaluating the impact that adoption of ASU 2023-09 will have on its financial statements.
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires disclosure about the types of costs and expenses included in certain expense captions presented on the income statement. The new disclosure requirements are effective for the Company’s annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently in the process of evaluating the impact of this pronouncement on our related disclosures.
In November 2024, the FASB issued ASU No. 2024-04, Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments (“ASU 2024-04”), which clarifies the requirements for determining whether to account for certain early settlements of convertible debt instruments as induced conversions or extinguishments. ASU 2024-04 is effective for fiscal years beginning after December 15, 2025 with early adoption permitted for entities that have adopted ASU 2020-06. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.
Recently Adopted Accounting Standards
In November 2023, the FASB issued Accounting Standard Update (“ASU”) 2023-07, Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 requires a public entity to disclose significant segment expenses and other segment items on an annual and interim basis and provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. Additionally, it requires a public entity to disclose the title and position of the Chief Operating Decision Maker (“CODM”). ASU 2023-07 does not change how a public entity identifies its operating segments, aggregates them, or applies the quantitative thresholds to determine its reportable segments. The new standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. A public entity should apply the amendments in this ASU retrospectively to all prior periods presented in the financial statements. The Company has adopted ASU 2023-07 as of January 1, 2024. The adoption did not have a material impact on the Company’s financial statements.
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| Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| BUSINESS COMBINATIONS | NOTE 3 – BUSINESS COMBINATIONS
Standard Waste Services, LLC Business Combination
On May 31, 2024 (the “Standard acquisition date”), the Company completed a transaction to acquire Standard. The total purchase consideration in connection with the acquisition was approximately $16.1 million. The purchase price consisted of $4,652,500 of cash (inclusive of a $652,500 cash deposit paid on January 8, 2024), the issuance of two note payables with an aggregate principal value of $2,859,898 (Note 9 – Notes Payable and Note 10 – Convertible Notes Payable), and the issuance of shares of Series A Preferred Stock valued at $8,568,000 (Note 16 – Commitments and contingencies). The convertible stock exchanges at a common shares to share of Series A Preferred Stock and was valued considering the trading price of $, which was the trading price Company’s common stock on the date of close. The goodwill recorded in the business combination is anticipated to be tax-deductible.
Standard is a provider of contracted commercial roll-off and front-load waste services, including dumpster compactor rentals, to customers principally in Southeast Michigan. Standard provides services to both commercial and industrial customers.
The transaction was accounted for under the acquisition method of accounting and accordingly, the results of Standard’s operations are included within the Trucking Segment for the year ended December 31, 2024 related to the activity subsequent to the acquisition date.
The purchase price was preliminarily allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair values as of the date of acquisition on a provisional basis. The purchase price exceeded the estimated fair value of the net identifiable tangible and intangible assets acquired and, as such, the excess was allocated to goodwill.
The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed at the acquisition date.
Certain estimated fair values for the acquisition, including goodwill, anticipated intangible assets, property and equipment, and promissory notes, are not yet finalized. The anticipated intangible assets consist of contractual backlog, customer relationships, and tradenames. The purchase price was preliminarily allocated based on information available at the acquisition date and is subject to change as the Company completes its analysis of the fair values at the date of the acquisition during the measurement period not to exceed one year, as permitted under ASC 805. Any adjustments to the preliminary fair value of the assets acquired and liabilities assumed will adjust the preliminary goodwill recognized during the measurement period. The Company expects to record amortization expense during the first half of the year ended December 31, 2025 for allocated finite lived intangible assets.
As a result of the acquisition, the Company recognized a total of $12.4 million of intangible assets and goodwill within the Trucking segment. Goodwill represents the value expected to be created through new customer relationships for the Company, access to new market opportunities, and expected growth opportunities. The goodwill resulting from the acquisition is susceptible to future impairment charges. Total acquisition costs incurred were approximately $659,000, which was recorded as a component of professional fees expenses during the year ended December 31, 2024.
Standard’s results of operations are included in the consolidated financial statements from the date of the transaction within the Trucking segment. It is impracticable for the Company to determine the approximate revenue and gross profit for Standard from May 31, 2024 through December 31, 2024, as the operations of Standard and Titan Trucking are closely related and discrete financial information is not available for Standard on a stand-alone basis. If the transaction had occurred on the beginning of the year ended December 31, 2023, unaudited pro forma consolidated results for 2024 and 2023, would have been as follows:
The pro forma combined results of operations are not necessarily indicative of the results of operations that actually would have occurred, nor are they necessarily indicative of future consolidated results.
Titan Trucking, LLC Reverse Acquisition
The Company’s subsidiary Titan Merger Sub Corp. (“Merger Sub”), Titan Trucking and the owners of Titan Trucking (“Titan Trucking owners”) entered into a merger agreement (the “Titan Merger Agreement”) on May 19, 2023 (the “Titan acquisition date”). Pursuant to the terms of the Titan Merger Agreement, Merger Sub was merged with and into Titan Trucking on the Titan acquisition date with Titan Trucking surviving as a wholly-owned subsidiary of the Company (the “Titan Merger”). For U.S. federal income tax purposes, the Titan Merger qualified as a tax-free “reorganization”. Under the terms of the Titan Merger Agreement, the Company agreed to pay the Titan Trucking owners shares of the Company’s Series A Preferred Stock. Concurrent to the Titan Merger, the Company’s chief executive officer and one of the Company’s directors resigned from their respective positions and a new chief executive officer, chief operating officer and chief financial officer were appointed. Additionally, the new chief executive officer and chief operating officer were both appointed as directors of the Company.
In accordance with ASC 805 – Business Combinations, the Titan Merger was accounted for as a reverse acquisition with Titan Trucking being deemed the accounting acquirer of Titan. Titan Trucking, as the accounting acquirer, recorded the assets acquired and liabilities assumed of Titan at their fair values as of the Titan acquisition date. Titan Trucking’s historical consolidated financial statements have replaced the Company’s historical consolidated financial statements with respect to periods prior to the completion of the Titan Merger with retroactive adjustments to Titan’s legal capital to reflect the legal capital of Titan. Titan remains the continuing registrant and reporting company.
Titan Trucking was deemed to be the accounting acquirer based on the following facts and circumstances: (1) the Titan Trucking owners owned approximately 65% of the voting interests of the combined company immediately following the transaction; (2) the Titan Merger resulted in significant changes to the combined company’s Board of Directors; (3) the Titan Merger resulted in significant changes to the management of the combined company.
The Company accounted for the Titan Merger as a reverse acquisition using acquisition accounting. Because the Titan Merger qualifies as a reverse acquisition and given that Titan Trucking was a private company at the time of the Titan Merger and therefore its value was not readily determinable, the fair value of the merger consideration was deemed to be equal to quoted market capitalization of the Company at the acquisition date. The purchase consideration was as follows:
The Company recorded all tangible and intangible assets and liabilities at their estimated fair values on the acquisition date. The following represents the allocation of the purchase consideration:
The Company assessed the fair values of the tangible and intangible assets and liabilities and the amount of goodwill to be recognized as of the Titan acquisition date. Fair values were based on management’s estimates and assumptions. The intangible assets acquired were specific to the Company’s Recoup subsidiary.
The fair value of the intellectual property intangible asset was measured using the multiple periods excess earnings method (“MPEEM”). Significant inputs used to measure the fair value include an estimated useful life of ten (10) years, an estimate of projected revenue and costs associated with existing customers, an estimated technology obsolescence adjustment, and a discount rate of 12.7%.
The fair value of the tradenames intangible asset was measured using the relief from royalty method. Significant inputs used to measure the fair value include an estimated projected revenue from the tradename, a pre-tax royalty rate of 1%, and a discount rate of 12.7%.
The fair value of the customer list intangible asset was measured using the modified MPEEM. Significant inputs used to measure the fair value include an estimated useful life of ten (10) years, an estimate of projected revenue and costs associated with the new customers, an estimated customer attrition rate, and a discount rate of 12.7%.
The fair value of the noncompete agreement intangible asset was measured with a discounted cash flow analysis that compared projected cash flows during the noncompete agreement period with and without the agreement. Significant inputs used to measure the fair value include an estimate of time for the parties involved to identify the product, bring in the technology, and start the manufacturing process. As well as the estimated risk that the parties involved would choose to compete without the agreement in place and a discount rate of 12.7%. The noncompete agreement prevents the parties involved from directly or indirectly engaging in, or being interested in, any business or entity that engages in any business substantially similar to the Recoup Digester business for a period of five (5) years.
Goodwill arising from the acquisition consisted of new customer relationships for the Company, access to new product market opportunities and expected growth opportunities. Total acquisition costs incurred were approximately $450,000, which was recorded as a component of professional fees expenses during the year ended December 31, 2023. Of the goodwill recognized as a result of the Titan Merger, $6,516,915 is expected to be tax deductible, ratably over a period of fifteen (15) years.
The approximate revenue and gross profit for Titan (excluding the operations of Titan Trucking) from May 19, 2023 through December 31, 2023 was $1,396,000 and $799,000, respectively.
The following supplemental pro-forma financial information approximate combined financial information assumes that the acquisition had occurred at the beginning of the year ended December 31, 2023:
The pro forma combined results of operations are not necessarily indicative of the results of operations that actually would have occurred, nor are they necessarily indicative of future consolidated results.
The pro forma combined results of operations for the year ended December 31, 2023, included stock-based compensation of $ and goodwill impairment expense of $20,364,001.
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DISCONTINUED OPERATIONS |
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| Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| DISCONTINUED OPERATIONS | NOTE 4 – DISCONTINUED OPERATIONS
On October 31, 2024 the Company completed the sale of its subsidiary Recoup (the “Recoup Sale) in exchange for consideration of $1,000,000 to Recoup Partners, LLC, a related party through a direct family relationship to our former COO Jeff Rizzo. The consideration was composed of the forgiveness of $750,000 of accounts payables and the receipt of a $250,000 note receivable. The Recoup Sale qualified for held-for-sale classification on October 31, 2024 and represented a strategic shift with a major effect on the Company’s operations and financial results. Following the Recoup Sale the Company will not have any significant continuing involvement in the operations of Recoup. As a result, Recoup met the criteria for reporting as discontinued operations on October 31, 2024.
The note receivable has a principal amount of $250,000 and accrues interest at a 7.5% annual rate. It has a maturity date of December 31, 2024. As of the issuance date of these financial statements the Company has not received the funds owed from the note receivable. As part of the agreed upon terms of the Recoup Sale, the Company agreed to indemnify $593,674 of accounts payable held by Recoup. The indemnified accounts payable are included within accounts payable from continuing operations on the consolidated balance sheet.
Recoup’s financial results are presented within loss from discontinued operations, after tax in the consolidated statement of operations. For the year ended December 31, 2024, these results include the period from the beginning of the year through the date of the Recoup Sale. The following table presents the amounts that have been reclassified from continuing operations and included in loss from discontinued operations within the Company’s consolidated statement of operations for the years ended December 31, 2024 and 2023:
The following table presents the assets and liabilities of Recoup that were reclassified as discontinued operations within the Company’s consolidated balance sheet as of December 31, 2023.
Impairments
During the year ended December 31, 2023, and as a result of the financial performance of the former Digester Segment, the Company concluded it was more likely than not that the fair value of the reporting unit was less than it’s carrying amount. Therefore, the Company performed an impairment assessment of the goodwill. The fair value of the Digester reporting unit was estimated using an income approach and included assumptions related to estimates of future revenue and operating expenses, long-term growth rates, a technology obsolescence rate, and a discount rate. As a result of the quantitative impairment test, the goodwill was impaired with an impairment expense of $20,364,001 within loss from discontinued operations, after tax for the year ended December 31, 2023.
During the third quarter of 2024, and as a result of the financial performance of the former Digester Segment, the Company concluded it was more likely than not that the fair value of the reporting unit was less than it’s carrying amount. Therefore, the Company performed an impairment assessment of the goodwill. At this time the Company did not reclassify Recoup as held for sale, as the necessary criteria were not met. As a result of the quantitative impairment test the goodwill was impaired with an impairment expense of $4,853,142, recorded within loss from discontinued operations, after tax for the year ended December 31, 2024.
During the third quarter of 2024, and as a result of the financial performance of the former Digester Segment, the Company concluded it was more likely than not that the fair value of the intangible assets held by Recoup were less than their carrying amount. Therefore, the Company performed an impairment assessment of the intangible assets. At this time the Company did not reclassify Recoup as held for sale, as the necessary criteria were not met. As a result of the quantitative impairment test, the intangible assets were impaired with an impairment expense of $ 5,508,595, recorded within loss from discontinued operations, after tax for the year ended December 31, 2024.
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PROPERTY AND EQUIPMENT, NET |
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| Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PROPERTY AND EQUIPMENT, NET | NOTE 5 – PROPERTY AND EQUIPMENT, NET
Property and equipment consist of the following as of December 31, 2024 and 2023:
Depreciation expenses for the years ended December 31, 2024 and 2023 were $891,215 and $424,040, respectively.
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INTANGIBLES, NET |
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| Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| INTANGIBLES, NET | NOTE 6 – INTANGIBLES, NET
Intangible assets consisted of the following as of December 31, 2024 and 2023:
Amortization expense from intangible assets was $68,750 and $68,750 for the years ended December 31, 2024 and 2023, respectively. As further described in Note 3 – Business Combinations, the valuation of identified intangible assets is still preliminary and not complete as of December 31, 2024. The Company anticipates an allocation of value to various identified finite lived intangible assets during the first half of the year ended December 31, 2025. When this occurs the Company will make required charges to amortization expense to adjust the carrying value of the intangible assets through measurement period adjustments.
Future amortization expense from intangible assets as of December 31, 2024 were as follows:
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| Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||
| GOODWILL | NOTE 7 – GOODWILL
The Company has one reporting unit, the Trucking unit. As of December 31, 2024 and December 31, 2023, the goodwill for the reporting unit was $12,440,922 and $0, respectively. The goodwill at December 31, 2024, is the result of the Company’s acquisition of Standard. Certain estimated fair values of the assets acquired and liabilities assumed for the acquisition, including goodwill and associated intangible assets, are not yet finalized (Note 3 – Business Combinations). Therefore, the Company anticipates a reduction of the preliminary goodwill balance due to allocations to other tangible and intangible assets and liabilities during the first half of the year ended December 31, 2025.
The changes in the carrying value of goodwill by reportable segment for the years ended December 31, 2024 and 2023 are as follows:
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LEASES |
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| LEASES | NOTE 8 – LEASES
Operating Leases
The Company determines if an arrangement is a lease at inception. Operating leases are included in right-of-use assets (“ROU”), operating lease liabilities, and operating lease liabilities, non-current. Lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. None of the leases entered into have an implicit rate, the Company uses its incremental borrowing rate based on the information available at lease commencement date in determining the present value of future payments. Incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in economic environments where the leased asset is located. The ROU assets also include any prepaid lease payments made and initial direct costs incurred and excludes lease incentives. The Company’s lease terms may include options to extend or terminate the lease, which is recognized when it is reasonably certain that the Company will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company has operating leases for real estate in both Bloomfield Hills and Detroit, Michigan.
On April 1, 2023, Titan Trucking entered into a 60-month lease in Detroit, Michigan, with a related party through common ownership, which was set to expire on March 31, 2028. On September 1, 2023, the Company and the related party amended the lease, resulting in decreased payment terms. 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 lease was terminated by the lessor on June 14, 2024 due to a change of ownership of the property.
Average lease terms and discount rates are as follows:
Future minimum lease payments required under operating leases on an undiscounted cash flow basis as of December 31, 2024, were as follows:
The Company had operating lease expenses of $395,090 and $372,162 for the years ended December 31, 2024 and 2023, respectively. The Company records operating lease expense as a component of general and administrative expenses on the consolidated statements of operations.
Financing Leases
Standard leases a truck used for its operations under a five-year lease that commenced during May 2022 and which ends during May 2027. This lease is classified as a finance lease. The lease calls for monthly payments of $3,304 bearing interest of 12.08% per annum. The lease includes a purchase option upon maturity of which the Company intends to exercise. The Company has finance leases for trucks. As of December 31, 2024, the was $100,686 and is included within property and equipment, net on the accompanying consolidated balance sheets. Subsequent to year end, this lease was paid off (Note 20 – Subsequent Events).
The Company’s finance lease costs consisted of $6,507 of interest expense and $12,815 of amortization of the right of use asset during the year ended December 31, 2024.
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NOTES PAYABLE |
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| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| NOTES PAYABLE | NOTE 9 – NOTES PAYABLE
The Company borrows funds from various creditors to finance its equipment, operations, and acquisitions. The Company’s collateralized loans are secured by interest in the financed equipment.
On December 15, 2022, Titan Trucking entered into a $170,000 promissory note agreement with WTI Global Inc. (“WTI”) at a 7% per annum interest rate. The promissory note was issued as consideration for the acquisition of intangible assets from WTI during the year ended December 31, 2022. On February 1, 2023, WTI agreed to cancel the promissory note in exchange for an ownership interest in the Company. The cancellation was recorded on the consolidated balance sheet as an equity contribution (See Note 14 – Mezzanine Equity and Stockholders’ Equity).
The Company’s notes payables balance as of December 31, 2024 and 2023, consisted of the following:
Guarantee of Debt
On May 31, 2024, the Company entered into a Guaranty Fee Agreement pursuant to which certain outstanding indebtedness owed by the Company to the sellers of Standard is guaranteed. Pursuant to the Guaranty Fee Agreement, Charles B. Rizzo personally guaranteed the obligations of Standard and the Company. In exchange for providing the guarantees, the Company agreed to provide compensation consisting of a deposit fee, a guarantee fee, and an annual fee. The guarantee fee consisted of shares of common stock or the equivalent shares of Series A Preferred Stock, and the deposit fee consisted of shares of common stock or the equivalent shares of Series A Preferred Stock. The annual fee consists of 2.5% of the total amount of all outstanding debt on the anniversary of the agreement. The deposit fee and guarantee fee were settled on May 31, 2024 with the issuance of shares of Series A Preferred Stock. The total value of the shares of Series A Preferred Stock issued on May 31, 2024 was $3,010,000. All of the guarantee fee was recorded as a debt issuance cost of $3,010,000 associated with all of Standard’s debt obligations.
Collateralized Installment Loans:
Note Payables:
Note Payables issued prior to Titan Merger:
Related Parties:
Interest expense on these notes for the years ended December 31, 2024 and 2023 was $1,419,931 and $593,383, respectively.
Principal maturities for the next five years and thereafter as of December 31, 2024 were as follows:
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CONVERTIBLE NOTES PAYABLE |
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| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CONVERTIBLE NOTES PAYABLE | NOTE 10 – CONVERTIBLE NOTES PAYABLE
Convertible Notes Payable and Convertible Notes Payable – Related Parties
The Company’s convertible notes as of December 31, 2024 and 2023 were as follows:
Interest expense due to convertible note payables for the years ended December 31, 2024 and 2023 was $648,993 and $223,846, respectively.
Convertible note payables principal maturities for the next three years as of December 31, 2024 were as follows:
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DERIVATIVE LIABILITIES |
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| Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| DERIVATIVE LIABILITIES | NOTE 11 – DERIVATIVE LIABILITIES
On February 12, 2021, the Company granted warrants (the “Platinum Point Warrants”) that have a term of and an exercise price of $11.60 to Platinum Point Capital, LLC. The warrants granted contain certain price protections, that make the value of the warrants a derivative liability. On February 12, 2024, the Platinum Point Warrants expired and as a result, the related derivative liability decreased to $0.
The fair value of the Platinum Point Warrants derivative liability is estimated using a Black-Scholes valuation model with a stock price of $. Changes to the inputs used in the model could produce a significantly higher or lower fair value. The following assumptions were used as of December 31, 2023:
The derivative liabilities as of December 31, 2024 and December 31, 2023 were as follows:
Activity related to the derivative liabilities for the year ended December 31, 2024 is as follows:
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SHARES TO BE ISSUED |
12 Months Ended |
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Dec. 31, 2024 | |
| Shares To Be Issued | |
| SHARES TO BE ISSUED |
Michaelson Forbearance Agreement
On December 28, 2023, the Company and Michaelson signed a Forbearance Agreement (the “December Michaelson Amendment”) which amended the Michaelson Note and was accounted for as a debt modification in accordance with ASC 470 – Debt. The December Michaelson Amendment states that following the payment of its other obligations owed to Michaelson, the Company shall issue Michaelson $50,000 worth of preferred stock at the current offering terms and conditions (Note 9 – Notes Payable).
The Advance on Offering balance was $50,000 as of December 31, 2023. The Company has analyzed these amounts and determined that they are liabilities in accordance with ASC 480 – Distinguishing Liabilities from Equity.
In April 2024, the Company and Michaelson agreed to extend the term of the Michaelson Note until June 30, 2024, and forbear all other terms until May 1, 2024. Among other terms, the Company agreed to pay a $100,000 forbearance fee, payable in $50,000 of cash and $50,000 of Series B Preferred Stock. (Please see Note 9 – Notes Payable and Note 20 – Subsequent Events). The $50,000 of shares obligated to Michaelson was subsequently issued and the balance of the obligation reduced to $.
Standard Waste Promissory Notes Extension and Subordination Agreement
On December 31, 2024, the Company and the holders of Standard Waste Promissory Note #1 and Standard Waste Promissory Note #2 agreed to amend both notes and to sign a subordination agreement with Utica Leaseco, LLC (Note 20 – Subsequent Events). In exchange for signing the subordination agreement, the Company agreed to issue shares of common stock to the note holders. Additionally, $149,352 of accrued interest relating to Standard Waste Promissory Note #2 was forgiven in exchange for shares of common stock. Standard Waste Promissory Note #2 was also amended so that interest on the note accrued at a rate of $6,460 per week and so that upon the Company’s listing on a national stock exchange, the holders shall have the right to purchase shares of common stock from the Company using the principal and accrued interest of Standard Waste Promissory Note #2. Lastly, $150,000 of principal relating to Standard Waste Promissory Note #1 was exchanged for shares of common stock and the payment terms amended so that the remaining principal balance of the note is to be repaid in weekly payments of $5,000 commencing on March 31, 2025. As a result of these transactions the Company recognized a gain on exchange of convertible notes for common stock of $86,459 on the consolidated statement of operations.
As of December 31, 2024, the common stock from these transactions had not been issued and the obligation was recorded to shares to be issued on the consolidated balance sheet in the amount of $. As of the issuance date of these financial statements the common stock had not been issued and the obligation was outstanding.
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BENEFIT PLAN |
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Dec. 31, 2024 | |
| Retirement Benefits [Abstract] | |
| BENEFIT PLAN | NOTE 13 – BENEFIT PLAN
Titan Trucking offers a 401(k) plan. Employees are eligible to participate in the plan on the first day of the month following the date of hire. Employees may defer up to $23,000 for 2024 and $22,500 for 2023. Titan Trucking is required to contribute on behalf of each eligible participating employee. Titan Trucking will match 50% of the participants deferral not to exceed 3% of employee compensation. Employees will share in the matching contribution regardless of the amount of service completed during the plan year. Employees will become 100% vested in the employer matching contributions after one year of service.
Employer contributions for the years ended December 31, 2024 and 2023 were $10,934 and $15,116, respectively.
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MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY |
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| Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY | NOTE 14 – MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY
As further described in Note 3 – Business Combinations, under applicable accounting principles, the historical financial results of Titan Trucking prior to May 19, 2023 replaced the historical financial statements of TraQiQ for the period prior to May 19, 2023. Titan Trucking’s equity structure, prior to the combination with TraQiQ, was a limited liability company, resulting in all components of equity attributable to the members being reported within Member’s Equity.
As of December 31, 2023, the Company was authorized to issue a total of shares of its Preferred Stock in one or more series, and authorized to issue shares of common stock. As a result of the redomicile and effective January 10, 2024, the authorized capital stock of the Company was amended to 425,000,000 total shares, consisting of shares of common stock, par value $ per share, and shares of “blank check” preferred stock, par value $ per share, of which shares were designated “Series A Convertible Preferred Stock”. As of December 31, 2024 the Company was authorized to issue shares of Preferred Stock in one or more series, of which shares were designated as “Series A Convertible Preferred Stock” and shares were designated as “Series B Convertible Preferred Stock”.
Members’ Equity
As of December 31, 2022, Titan Trucking had members’ equity of $2,526,104. Each Member had voting rights based on and proportionate to such Member’s Membership interest.
On February 1, 2023, in exchange for the settlement of the $170,000 WTI promissory note, a 2.254% membership interest in Titan Trucking was granted to the seller of WTI (Note 9 – Notes Payable).
Series A Preferred Stock
As a result of the redomicile and effective January 10, 2024, each share of the Company’s Series C Convertible Preferred Stock issued and outstanding immediately prior to the effective time of the redomicile was exchanged for one share of Series A Convertible Preferred Stock of the Nevada corporation (the “Series A Preferred Stock”), which has substantially the same rights and preferences as the Series C Preferred Stock.
Each outstanding share of Series A Convertible Preferred Stock has a par value of $ and is convertible into shares of the Company’s common stock at any time commencing after the issuance date. The Series A Convertible Stock has voting rights equivalent to the voting rights of the common stock the holder would receive upon conversion. Upon any liquidation, dissolution, or winding-up of the Company, whether voluntary or involuntary (a “Liquidation”), the Series A Holders shall be entitled to receive, on a pro-rata basis, the first $1,000 out of the assets of the Company, whether capital or surplus, before any distribution of such assets is made or set aside for the holders of the of common stock and any other stock of the Company ranking junior to the Series A Preferred Stock. Upon any Liquidation, the Series A Holders shall be entitled to receive out of the assets of the Company, whether capital or surplus, the same amount that a holder of common stock would receive if the Series A Preferred were fully converted. Except for stock dividends or distributions for, Series A Holders are entitled to receive, and the Company shall pay, dividends on shares of Series A Preferred equal (on an as-if-converted-to-common-stock basis) to and in the same form as dividends actually paid on shares of the common stock when, as, and if such dividends are paid on shares of the common stock. No other dividends shall be paid on shares of Series A Preferred Stock.
Series B Preferred Stock
As a result of the redomicile and effective January 10, 2024, TraQiQ’s “Series B” class of preferred stock was eliminated. (Note 1 – Organization and Nature of Operations).
Prior to the redomicile, each outstanding share of Series B Convertible Preferred Stock prior to the redomicile was convertible into the shares of the Company’s common stock at any time commencing after the issuance date. Series B Convertible Stock had no voting rights.
On July 17, 2023, prior to the redomicile, the Company entered into Exchange Agreements (the “Series B Preferred Exchange Agreements”) with two accredited investors, including Sikka. Pursuant to the Series B Preferred Exchange Agreements, such investors exchanged shares of the Company’s former Series B Convertible Preferred Stock into an aggregate of Series A Rights dated as of July 17, 2023. On July 20, 2023, the Company entered into an Exchange Agreement (the “REI Exchange Agreement”) with Renovare Environmental, Inc. (“REI”) pursuant to which REI exchanged shares of common stock and shares of the Company’s former Series B Convertible Preferred Stock for Series A Rights dated July 20, 2023 and Series B Rights dated July 20, 2023. As a result of the Series B Preferred Exchange Agreements and the REI Exchange Agreement the Company did not have any outstanding shares of its former Series B Convertible Preferred Stock.
On March 29, 2024, the Company created a new series of Series B Convertible Preferred Stock consisting of shares with a redemption value of $ per share. As of December 31, 2024 and December 31, 2023, there were and shares of Series B Preferred Stock issued and outstanding, respectively. The summary of the key rights and privileges are as follows.
Optional Redemption
Beginning on July 31, 2025, the Company has the option to redeem the outstanding shares by providing written notice 10 to 60 days in advance. The Company has the option to redeem the outstanding shares at a premium of 130% of the stated value plus any accumulated unpaid dividends.
Mandatory Redemption
The Company will be required to redeem the outstanding shares when the Company receives written notice from any holder that holds at least Series B Convertible Preferred Stock (a “Mandatory Redemption Event Notice”) that specifies a Mandatory Redemption Event (as defined below) has occurred. The Company is required to provide written notice to all Holders and redeem the shares, for any holder that provides this notice, in cash (either immediately or when the cash becomes available) at an amount equal to 130% of the stated value, plus accrued and unpaid dividends.
A Mandatory Redemption Event is triggered either by (1) a Triggering Event occurring and the Company being notified by a Holder with at least shares or (2) by the Company’s common stock not being listed on a major exchange after July 31, 2025.
Dividend Rights
Holders are entitled to receive cumulative dividends at a rate of 10% per annum, which increases to 15% during the occurrence of a Triggering Event. These dividends accrue daily from the original issuance date, regardless of whether they are declared by the Board of Directors or if there are funds legally available for payment.
Conversion Rights
Each share of Series B Convertible Preferred Stock can be converted into common stock as follows:
(a) Optional Conversion
(b) Triggering Event Conversion
(c) Mandatory Conversion
Beneficial Ownership Limitation
No Investor will be able to convert the Series B Preferred into an amount that would result in the Investor (or its affiliates) beneficially owning more than 4.99% of the outstanding shares of the Company with an investor option to go to 9.99%.
Voting Rights
The number of votes a holder can cast is equal to the number of whole shares of common stock into which their Series B Convertible Preferred Stock can be converted as of the record date for determining stockholders entitled to vote, subject to the 4.99% ownership limitation. These holders vote together with common stockholders as a single class and on an as-converted basis. The Series B Preferred Stock contains roll-over rights.
Series B Preferred Stock Offering
On April 5, 2024, the Company entered into a Securities Purchase Agreement (the “SPA”) dated March 29, 2024 with an accredited investor, pursuant to which, on such date and at later closings of the transactions contemplated by the SPA, such investor and the additional investors who signed the SPA agreed to purchase shares of the Company’s Series B Convertible Preferred Stock. In addition, in connection with the issuance of the Series B Preferred Stock, the purchasers received -year warrants to purchase shares of the Company’s common stock. The warrants are exercisable at an exercise price of $0.06 per share of Common Stock, subject to certain adjustments as set forth in the Warrants. The holders may exercise the warrants on a cashless basis if the shares of common stock underlying the Warrants are not then registered under the Securities Act of 1933, as amended, pursuant to an effective registration statement. The obligations of the Company and the Purchasers to consummate the transactions contemplated by the SPA were subject to the satisfaction of customary closing conditions.
On May 30, 2024, the Company issued shares of Series B Preferred Stock and warrants to purchase an aggregate of shares of common stock for an aggregate purchase price of $4,222,000. In connection with issuance, the Company issued warrants to purchase an aggregate of shares of common stock to placement agents. The placement agent warrants are identical to the warrants, except that they have a term of seven years.
In connection with the issuance, the Company entered into a Registration Rights Agreement whereby the Company agreed to file a registration statement registering the resale of the shares of common stock issuable upon conversion of the Series B Preferred Stock and upon exercise of the warrants within 20 calendar days of the earlier of (i) the date of the consummation of the listing of the Common Stock on any of the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, or their respective successors and (ii) the six-month anniversary of the Registration Rights Agreement (the “Trigger Date”). The Company agreed to use its best efforts to have the registration statement declared “effective” within 60 calendar days from the Trigger Date.
The Company determined the Series B Preferred Stock is classified as temporary mezzanine equity because redemption could be required at (1) a fixed or determinable date, (2) at the option of the holder, and (3) upon occurrence of a contingent event. The Company valued the redemption feature based on the present value of future cash flows using the following assumptions, (1) term of years, (2) dividend rate of % and (3) effective interest rate of %. For the year ended December 31, 2024 the Series B Preferred Stock related to the Offering was accreted $4,168,752. The accretion was analyzed and recorded as a deemed dividend and is disclosed on the consolidated statement of operations. The total offering proceeds was $4,222,000, which was allocated on a relative fair value basis between the Series B Preferred Stock and the warrants. The Series B Preferred Stock and the warrants were valued at $1,568,895 and $2,653,105, respectively.
Additional Series B Preferred Stock Issuances
On April 12, 2024, the Company issued shares of Series B Preferred Stock to extend the term of the Michaelson Note until June 30, 2024 (Note 9 – Note Payables). The redemption feature is recorded at fair value and will be accreted to redemption value when it is deemed probable to be exercised. The Company valued the redemption feature at fair value based on the present value of future cash flows using the following assumptions, (1) term, (2) dividend rate, (2) effective interest rate, (3) and redemption value of $65,000. For the year ended December 31, 2024 the Series B Preferred Stock was accreted $3,602.
On June 25, 2024, the Company issued shares of Series B Preferred Stock to investors in exchange for equity interests for proceeds received in prior periods. The redemption feature is recorded at fair value and will be accreted to redemption value when it is deemed probable to be exercised. The Company valued the redemption feature at fair value based on the present value of future cash flows using the following assumptions, (1) term, (2) dividend rate, (2) effective interest rate, (3) and redemption value of $1,307,696. For the year ended December 31, 2024 the Series B Preferred Stock was accreted by $52,088.
On July 2, 2024, the Company signed four Exchange Subscription Agreements with four of the Company’s lenders (Note 9 – Notes Payable). In accordance with the terms of the Exchange Subscription Agreements, an aggregate of $500,000 of principal owed to the lenders was cancelled in exchange for the issuance of units which include 50,453 warrants to purchase shares of common stock and shares of Series B Convertible Preferred Stock. Each warrant has a term and an exercise of $0.06 per share. The redemption feature is recorded at fair value and will be accreted to redemption value when it is deemed probable to be exercised. The Company valued the redemption feature at fair value based on the present value of future cash flows using the following assumptions, (1) term, (2) dividend rate, (2) effective interest rate, (3) and redemption value of $655,889. For the year ended December 31, 2024 the Series B Preferred Stock was accreted by $25,157.
Common Stock
As of December 31, 2024 and December 31, 2023, the Company had and shares of common stock issued and outstanding, respectively.
Under the terms of the Company’s articles of incorporation, holders of common stock are entitled to one vote for each share held on all matters submitted to a vote of stockholders, including the election of directors, and do not have cumulative voting rights. The holders of outstanding shares of common stock are entitled to receive dividends out of assets or funds legally available for the payment of dividends at such times and in such amounts as the Company’s board of directors from time to time may determine. The common stock is not entitled to pre-emptive rights and is not subject to conversion or redemption. Upon liquidation, dissolution or winding up of the Company, the assets legally available for distribution to stockholders are distributable ratably among the holders of common stock after payment of liquidation preferences, if any, on any outstanding shares of preferred stock and the payment of other claims of creditors. The rights, preferences and privileges of holders of common stock are subject to and may be adversely affected by the rights of the holders of shares of outstanding preferred stock and any series of preferred stock the Company may designate and issue in the future.
During the years ended December 31, 2024 and 2023, the Company issued and shares of common stock due to exercises of share rights from common stock rights, respectively.
Warrants
As a result of the reincorporation and effective January 10, 2024, all the Company’s outstanding warrants were assumed by Titan and now represent warrants to acquire shares of Titan’s common stock. The following schedule summarizes the changes in the Company’s common stock warrants during the years ended December 31, 2024 and 2023:
On December 28, 2023, the Company issued 2,500,000 warrant shares to Cavalry 1 LP in exchange for $300,000 of which $33,000 was paid for issuance fees. The warrants were valued at their fair value at the time of grant, which was deemed to be $0.55 per share. The fair value of the warrants was in excess of the consideration received, and as a result the Company recognized a deemed dividend of $1,075,000.
On January 5, 2024, the Company issued 2,750,001 warrant shares to three investors in exchange for $650,000. The warrants were valued at their fair value at the time of grant, which was deemed to be $0.55 per share. The fair value of the warrants was in excess of the consideration received, and as a result the Company recognized a deemed dividend of $862,289.
On May 30, 2024, the Company issued shares of Series B Preferred Stock and 42,220,000 warrants for an aggregate purchase price of $4,222,000. The warrants have an exercise price of $0.06 and a term of five years. In connection with issuance, the Company issued warrants to purchase an aggregate of shares of common stock to placement agents. The placement agent warrants are identical to the warrants sold in the offering, except that they have a term of seven years.
On July 2, 2024, the Company signed four Exchange Subscription Agreements with four of the Company’s lenders (Note 9 – Notes Payable). In accordance with the terms of the Exchange Subscription Agreements, an aggregate of $500,000 of principal owed to the lenders was cancelled in exchange for the issuance of units which include 50,453 warrants to purchase shares of common stock each and shares of Series B Convertible Preferred Stock. Each warrant has a term and an exercise of $0.06 per share.
On August 12, 2024, the Company issued Calvary Fund I 10,000,000 warrants in conjunction with a promissory note of $500,000. The warrants have an exercise price of $0.06 and a term.
Between October 15, 2024 and December 26, 2024 the Company issued the 2024 Convertible Notes along with 31,239,385 warrants in exchange for proceeds of $1,813,000 (Note 10 – Convertible Notes). The warrants have an exercise price of $0.06 and a five year term.
Right to Receive Common Shares
On July 17, 2023, the Company entered into Exchange Agreements (the “Note Exchange Agreements”), with five holders of its convertible note payables. Under the terms of the Note Exchange Agreements, $1,944,000 of convertible notes and $75,263 of accrued interest were cancelled in exchange for Series A Rights dated as of July 17, 2023 (Note 10 – Convertible Notes Payable). The Series A Rights were valued at their fair value at the time of grant, which was deemed to $ per Series A Right Share.
On July 17, 2023, the Company also entered into Exchange Agreements (the “Series B Preferred Exchange Agreements”) with two accredited investors, including Sikka. Pursuant to the Series B Preferred Exchange Agreements, such investors exchanged shares of the Company’s Series B Convertible Preferred Stock into an aggregate of Series A Rights dated as of July 17, 2023. Pursuant to the Series B Preferred Exchange Agreement Sikka also exchanged shares of the Company’s common stock and a payment of receivable from the Company for unreimbursed advances in the amount of $100,000 for an aggregate of additional Series A Rights dated July 17, 2023. The Series A Rights were valued at their fair value at the time of grant, which was deemed to $ per Series A Right Share.
On July 20, 2023, the Company entered into an Exchange Agreement (the “REI Exchange Agreement”) with Renovare Environmental, Inc. (“REI”) pursuant to which REI exchanged shares of Common Stock and shares of Series B Preferred Stock for Series A Rights dated July 20, 2023 and Series B Rights dated July 20, 2023. The Series A Rights and Series B Rights were valued at their fair value at the time of grant, which was deemed to be $ per Series A Right Share and $ per Series B Right Share.
The transactions contemplated by the Note Exchange Agreement, Series B Preferred Exchange Agreement and REI Exchange Agreement are together referred to as the “Rights Exchanges”. As a result of the Rights Exchanges, the Company recognized a loss of $116,591,322 during the year ended December 31, 2023.
The Company’s Series A Rights obligate the Company to issue Common Stock (“Series A Right Shares”) to the holder without any additional consideration. The number of Series A Right Shares is fixed, and is only subject to customary non-price based ratable adjustments, such as stock splits, and stock combinations. The Series A Rights are exercisable immediately and expire five years after the issuance date. The Series A Rights require the Company to hold in reserve the total number of shares of Common Stock that would need to be exercised in order meet the obligations of the Series A Rights.
The Company’s Series B Rights obligate the Company to issue Common Stock (“Series B Right Shares”) to the holder without any additional consideration. The number of Series B Right Shares is fixed and is only subject to customary non-price based ratable adjustments, such as stock splits, and stock combinations. The Company’s Series B Rights are exercisable upon the earlier of (1) December 31, 2023 or (2) the initial date on which the Company’s Common Stock is listed for trading on the New York Stock Exchange, NYSE American, the Nasdaq Global Select Market, Nasdaq Capital Markets, or the Nasdaq Global Market. The Series B Rights expire five years after the issuance date. The Series B Rights require the Company to hold in reserve the total number of shares of Common Stock that would need to be exercised in order meet the obligations of the Series B Rights.
The Company assessed the Series A Rights and Series B Rights for appropriate balance sheet classification and concluded that the Series A Rights and Series B Rights are freestanding equity-linked financial instruments that meet the criteria for equity classification under ASC 480 and ASC 815. Accordingly, they are classified as equity and accounted for as a component of additional paid-in capital at the time of issuance. The Company also determined that the Series A Rights and Series B Rights should be included in the determination of basic and diluted earnings per share in accordance with ASC 260, Earnings per Share.
As a result of the reincorporation and effective January 10, 2024, each of the Company’s Series A Right to Receive Common Stock issued and outstanding immediately prior to the reincorporation was converted into one Series A Right to Receive Common Stock of Titan, which has substantially the same rights and preferences as the Company’s original Series A Rights to Acquire Common Stock. Also, each of the Company’s Series B Right to Receive Common Stock issued and outstanding immediately prior to the reincorporation was converted into one Series B Right to Receive Common Stock of Titan, which has substantially the same rights and preferences as the Company’s original Series B Rights to Acquire Common Stock. At December 31, 2024, there were Series A Rights outstanding and Series B Rights outstanding.
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STOCK-BASED COMPENSATION |
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| STOCK-BASED COMPENSATION |
The TraQiQ Inc. 2020 Equity Incentive Plan was initially approved by the Company’s Board of Directors on November 23, 2020. In conjunction with the reincorporation (Note 20 – Subsequent Events) and effective January 10, 2024, the Company adopted the Titan Environmental Solutions Inc. 2023 Equity Incentive Plan (the “2023 Plan”). The 2023 Plan limits the shares of common stock authorized to be awarded as stock awards to shares. The 2023 Plan terminates upon the earlier of 1) the earliest date at which all shares awarded under the plan have been satisfied in full or terminated and there remain no new shares authorized to be issued under the plan, or 2) the tenth anniversary of the plan’s effective date.
Restricted Stock Awards
As of June 30, 2023, there were shares of common stock related to restricted stock grants that were vested and unissued. On September 13, 2023, the Company signed a Cancellation of Restricted Stock Grants Agreement with Sikka and two directors which rescinded and annulled of the vested and unreleased shares and the unvested shares. Consequently, the obligation to issue shares was eliminated.
Stock-based compensation from restricted stock awards for the years ended December 31, 2024 and 2023 was $ and $, respectively. As of December 31, 2024, there remained $of unrecognized stock-based compensation from restricted stock awards. The total fair value of restricted shares that vested during the years ended December 31, 2024 and 2023 was $and $, respectively. The fair value of the vested and unreleased shares on the date of the Titan Merger was $.
On the Titan Merger acquisition date, the Company awarded shares of Series C Preferred Stock that vested immediately to its chief executive officer, and as a result recorded $ of stock-based compensation (Note 14 – Stockholders’ Equity). On September 28, 2023, the Company and the chief executive officer signed a cancellation agreement and the Series C Preferred Stock shares were rescinded. Under the terms of the cancellation agreement, the Company agreed to issue ten-year stock options to acquire a number of shares of common stock of the Company in order to provide the chief executive officer an equity interest in the Company commensurate with the value of the original stock award. Such options will have an exercise price equal to the sale price of the common stock in the next public offering of common stock consummated by the Company.
The fair value of the Series C Preferred Stock was determined using observable inputs (level 2 fair value measurement) with a market approach technique. The main input for the Series C Preferred Stock fair value was the price of the Company’s common stock as of the date of the grant. As a result of the redomicile, each share of Series C Convertible Preferred Stock issued and outstanding immediately prior to the effective time of the redomicile was exchanged for one share of Series A Convertible Preferred Stock, which has substantially the same rights and preferences as the TraQiQ Series C Preferred Stock (Note 1 – Organization and Nature of Operations).
Stock Options
On December 31, 2024 the Company issued stock options to management and members of the Board of Directors. The stock options vested immediately upon issuance, expire after a term of , and have an exercise price of $. The Company recognized immediate stock compensation expense of $. As of December 31, 2024 there was unrecognized stock-compensation related to unvested stock options.
The Company recognizes stock-based compensation expense from stock options using the grant date fair-value. The fair value of options awarded is measured on the grant date using the Black-Scholes option-pricing model. The following assumptions were used as of December 31, 2024:
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COMMITMENTS AND CONTINGENCIES |
12 Months Ended |
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Dec. 31, 2024 | |
| Commitments and Contingencies Disclosure [Abstract] | |
| COMMITMENTS AND CONTINGENCIES | NOTE 16 – COMMITMENTS AND CONTINGENCIES
Commitments
On March 21, 2023, Titan Trucking entered into a consulting agreement (the “March 2023 Agreement”) with a consultant for consulting services related to the consolidated waste industry. As consideration, the Company agreed to pay the consultant a monthly fee of $10,000 through the course of the -year term of the agreement. Upon reaching the maturity, both parties may agree to an optional -year term extension. Additionally, the Company agreed to pay the consultant a success fee equal to: (1) one percent (1%) of the purchase price paid by the Company to acquire an enterprise engaged in the business of hauling, transportation, waste brokerage, and recycling, (2) two percent (2%) of the purchase price paid by the Company for all stand-alone landfills and transfer stations, (3) one percent (1%) of the revenue received by the Company, for a twelve month period commencing upon execution, for all municipal or large commercial contracts, and 4) one and twenty-five hundredths percent (1.25%) of the purchase price received by the Company for transfer stations associated with a professionally recognized hauling company. As of December 31, 2024, there is an accounts payable balance of $230,000. During the years ended December 31, 2024 and 2023, the Company recognized expenses of $170,000 and $100,000, respectively.
On February 10, 2025 the Company and the consultant effected a settlement agreement and release terminating the March 2023 Agreement. As a result, the Company agreed to settle all amounts owed due to the March 2023 Agreement in exchange for a payment of $3,000, the issuance of a promissory note with a principal value of $70,000 and the issuance of shares of the Company’s common stock (Note 20 – Subsequent Events).
Related Party Commitments
On April 1, 2023, Titan Trucking entered into a 60-month lease in Detroit, Michigan, with a related party through common ownership. The lease was terminated by the lessor on June 14, 2024 due to a change of ownership of the property. As of December 31, 2024 and December 31, 2023 the Company owed the related party $83,551 and $17,812, respectively (Note 8 – Leases) which is included in accounts payable on the accompanying consolidated balance sheets.
As of December 31, 2024 and December 31, 2023, the Company owed a related party vendor $120,201 and $20,670, respectively, for rental services provided which is included in cost of revenues on the accompanying consolidated statement of operations.
On May 20, 2023, the Company entered into a management consulting agreement (the “May 2023 Agreement”) with a related party consultant. The consultant agreed to assist the Company identify acquisition and merger targets, as well provide other merger and acquisition related services, such as due diligence services, and services related the integration of acquisition targets. The May 2023 Agreement has a term of two years, and its term shall automatically be extended by additional -year term extensions unless the agreement is terminated by either party prior to the end of the current term. As consideration, the Company agreed to pay a monthly retainer of $19,950 and an acquisition bonus on any acquisition by the Company of a third-party business. The acquisition bonus will be calculated as equal to: (1) two and ninety-five hundredths percent (2.95%) of the first $50,000,000 of consideration paid for the acquisition, (2) one and seventy-five hundredths percent (1.75%) of the next $150,000,000 of consideration paid for the acquisition, and (3) one and twenty-five hundredths percent (1.25%) of the consideration paid for the acquisition over the first $200,000,000 paid. The Company recognized related party consulting expense of $418,711 and $159,600 during the years ended December 31, 2024 and 2023, respectively, due to the May 2023 Agreement. As of December 31, 2024 and 2023, the Company had a related party accounts payable balance of $0and $99,750, respectively, due to the May 2023 Agreement. As of December 31, 2024 and 2023, the Company also had a related party accounts payable balance of $0 and $30,767, respectively, due to expenses paid by the consultant on behalf of the Company. As of December 31, 2024, the May 2023 Agreement had been terminated.
In conjunction with the acquisition of Standard (Note 3 – Business Combinations), the Company engaged the Sellers for consulting services in the period following the Standard Acquisition. Dominic Campo and Sharon Campo each signed a consulting agreement (the “Standard Consulting Agreements”) with the Company. The first consulting agreement commences on June 1, 2024 and has a term of five years. In exchange for consulting services provided, the consultant is to receive a monthly retainer of $23,333. In the event that the consultant meets their demise during the term of the agreement, the retainer shall be reduced to $11,667 per month. The second consulting agreement commenced on June 4, 2024 and has a term of five years. In exchange for consulting services provided, the consultant is to receive a monthly retainer of $10,417. For the year ended December 31, 2024, the Company incurred $236,250 of consulting expenses under these agreements. As of December 31, 2024, the Company did not owe any amounts to the Sellers as a result of the Standard Consulting Agreements.
Contingencies
From time to time, the Company is involved in routine litigation that arises in the ordinary course of business. Currently, there is no litigation pending against the Company that could materially affect the Company other than as follows:
In July 2022, a complaint was filed against Titan Trucking in the Circuit Court for Macomb County, Michigan for breach of contract. In the complaint, the plaintiff alleges that Titan Trucking has breached a contractual agreement between Titan Trucking and the plaintiff pertaining to the transport of certain non-hazardous solid waste or recyclables from plaintiff’s transfer station to the locations identified in the contract. The complaint sought unspecified damages, attorney and expert fees and other unspecified litigation costs. Titan Trucking denied the claims of the plaintiff, and in May 2023, Titan Trucking filed amended counterclaims against the plaintiff alleging that plaintiff breached the contractual agreement by preventing Titan Trucking’s performance of its obligations under the agreement by failing to, among things, provide the necessary volumes of materials for shipment and the personnel sufficient to permit Titan Trucking to provide its services and by failing to pay certain invoices and to reimburse Titan Trucking for equipment damaged by plaintiff’s employees and for overweight trailer tickets. As of December 31, 2023, no accruals for loss contingencies had been recorded as the outcome of this litigation was neither probable nor reasonably estimable. On October 25, 2024, Titan Trucking entered into a mutual release with the plaintiff which discharges Titan Trucking and any and all of its executive officers, employees, experts, and attorneys from the claims in this litigation and all other claims, demands, liabilities, causes of action, and damages, including attorneys’ fees, sanctions, interest, costs, and expenses, whether known or unknown, through and including October 25, 2024.
In July 2023, a complaint was filed against us and Ajay Sikka, a director of our company and our former chief executive officer, in the Circuit Court of the Nineteenth Judicial Circuit, Lake County, Illinois titled Alta Waterford, LLC v. TraQiQ, Inc. and Ajay Sikka (Case No. 23LA00000476) for breach of contract. In the complaint, the plaintiff alleges that we breached contracts for the payment of compensation for investor relations and web development and copyright services allegedly provided by the plaintiff, which payment obligation was personally guaranteed by Mr. Sikka.
The complaint seeks damages in the amount of $324,000, attorney fees and other unspecified litigation costs. The Company answered the complaint, denying all of the basic allegations, and the plaintiff then moved to strike the Company’s answer. In December 2023, the parties entered an agreement pursuant to which the plaintiff agreed to produce all of the documents supporting its claim that it performed services under the contracts, and the Company agreed to serve and file an amended answer within 21 days after receipt of their documents. Since that time, the plaintiff produced its documents and the Company filed its amended answer.
In May 2024, the Court signed a new order with an updated schedule. Consistent with that new order, the Company still anticipates conducting deposition discovery in the weeks and months ahead, but the matter is now scheduled for a bench trial in Illinois (no jury) in May 2025. As of December 31, 2024 and 2023, no accruals for loss contingencies have been recorded as the outcome of this litigation is neither probable nor reasonably estimable.
On May 31, 2024 (the “Standard acquisition date”), the Company completed a transaction to acquire Standard. Titan agreed to issue shares of Series A as consideration and an additional shares of Series A because Closing did not occur prior to February 2, 2024, for a total of shares of Series A Preferred. The other shares have not been issued to the Sellers yet because they are being held back to satisfy any indemnification claims made by Titan, which is in accordance with the terms of the agreement. These will be released on the 12th month anniversary of the Closing, provided there are no valid claims.
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LOSS PER SHARE |
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| LOSS PER SHARE |
Basic net loss per common share is computed by dividing net loss by the weighted average number of vested common shares outstanding during the period. Diluted net loss per common share is computed by dividing net loss by the weighted average number vested of common shares, plus the net impact of common shares (computed using the treasury stock method), if dilutive, resulting from the exercise of dilutive securities. In periods when losses are reported, the weighted-average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive. As of December 31, 2024 and 2023, the Company excluded the common stock equivalents summarized below, which entitle the holders thereof to ultimately acquire shares of common stock, from its calculation of loss per share, as their effect would have been anti-dilutive.
As further described in Note 3 – Business Combinations, under applicable accounting principles, the historical financial results of Titan prior to May 19, 2023 replace the historical financial statements for the period prior to May 19, 2023. Titan’s equity structure, prior to the combination with the TraQiQ, was a limited liability company, resulting in all components of equity attributable to the members being reported within Member’s Equity. Given that Titan was a limited liability company, net loss prior to the reverse acquisition is not applicable for purposes of calculating loss per share.
The Company has assessed the Series A Right to Receive Common Stock (“Series A Rights”) and the Series B Rights to Receive Common Stock (“Series B Rights”) for appropriate balance sheet classification and concluded that the Series A Rights and Series B Rights are freestanding equity-linked financial instruments that meet the criteria for equity classification under ASC 480 and ASC 815. In accordance with ASC 260 Earnings per Share the Company determined that the Series A Rights and Series B Rights should be included in the determination of basic and diluted earnings per share.
As the Company has reported a net loss for all periods presented, diluted net loss per common share is the same as basic net loss per common share.
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PROVISION FOR INCOME TAXES |
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| Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PROVISION FOR INCOME TAXES | NOTE 18 – PROVISION FOR INCOME TAXES
Prior to the Titan Merger, Titan Trucking filed its taxes as an S-Corp. The profits and losses of an S-Corp flow through to the owners of the respective company. Upon the acquisition date of the Titan Merger, the S-Corp status was terminated and Titan Trucking began to be taxed as a C-Corp (including the recording of deferred tax assets). The following is a summary of the components giving rise to the income tax (benefit) provision for the years ended December 31, 2024 and 2023:
The following table summarizes the significant differences between the U.S. Federal statutory tax rate and the Company’s effective tax rate for financial statement purposes for the years ended December 31, 2024 and 2023:
The following is a summary of the components of deferred tax assets and liabilities as of December 31, 2024 and 2023:
As of December 31, 2024, the Company has a net operating loss carry forward of $26.3 million ($14.9 million – 2023). Of the $26.3 million net operating losses, $1.3 million will begin to expire in 2029 and $25.0 million will not expire but will be limited in utilization of 80% of taxable income. Realization of deferred tax assets is dependent upon sufficient future taxable income during the period that deductible temporary differences and carry-forwards are expected to be available to reduce taxable income. As the achievement of required future taxable income is uncertain, the Company recorded a valuation allowance. Furthermore, the net operating loss carry forward may be subject to further limitation pursuant to Section 382 of the Internal Revenue Code. The valuation allowance was increased by approximately $5.2 million in 2024 ($4.5 million – 2023).
ASC 740 provides guidance on the financial statement recognition and measurement for uncertain income tax positions that are taken or expected to be taken in a company’s income tax return. The Company has evaluated its tax positions and believes there are no uncertain tax positions as of December 31, 2024. The Company classifies income tax penalties and interest, if any, as part of other general and administrative expenses in the accompanying consolidated statements of operations. The Company did not expense any penalties or interest during the years ended December 31, 2024 or 2023, and did not accrue any penalties or interest as of December 31, 2024 or 2023.
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SEGMENT REPORTING |
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Dec. 31, 2024 | |
| Segment Reporting [Abstract] | |
| SEGMENT REPORTING | NOTE 19 – SEGMENT REPORTING
Operating segments are components of an enterprise about which separate financial information is available and is evaluated regularly by management, namely the Chief Operating Decision Maker (“CODM”) of an organization, in order to determine operating and resource allocation decisions. By this definition, the Company had identified its Chief Operating Officer (“COO”) as the CODM. On February 9, 2025 the COO resigned from the Company. The Company has identified its Chief Executive Officer (“CEO”) as the CODM for the period beginning on February 9, 2025. The Company’s CODM makes decisions regarding resource allocation and performance assessment using net loss from continuing operations as presented within the consolidated statement of operations.
Significant expenses within net loss from continuing operations include revenue, cost of revenues, salaries and salary related costs, stock based compensation, professional fees, amortization expense, and general and administrative expenses, which are each separately presented on the Company’s consolidated statement of operations. Other segment items within net loss from continuing operations include interest expense, net of interest income, and other income. The Company’s long-lived assets consist primarily of property and equipment, net and intangibles assets, net arising from the acquisition of Standard.
Prior to the sale of Recoup, the Company operated in two segments: Trucking and Digester. Following the sale of Recoup (Note 4 – Discontinued Operations), the Company manages its business activities on a consolidated basis and operates and reports as a single operating segment: Trucking Segment.
Trucking Segment: The Trucking Segment generates service revenues and incurs expenses by transporting environmental and other waste for customers
(Former) Digester Segment: The Digester Segment primarily generated revenues and incurred expenses through the production and sale of ‘digester’ equipment to customers. The segment also generated revenue through related services such as digester maintenance and software services.
The Company believes that this structure reflects its current operational and financial management, and that it provides the best structure for the Company to focus on growth opportunities while maintaining financial discipline. The factors used to identify the operating segments were the segment’s revenue streams and customer base, the reporting structure for operational and performance information within the Company, and management’s decision to organize the Company around the segment’s revenue generating activities.
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SUBSEQUENT EVENTS |
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Dec. 31, 2024 | |
| Subsequent Events [Abstract] | |
| SUBSEQUENT EVENTS | NOTE 20 – SUBSEQUENT EVENTS
Subsequent events were evaluated through the issuance date of these financial statements. There were no subsequent events other than those described below:
Certification of Series C Preferred Stock and Authorization of Automatic Conversion of Series A and Series B Preferred Stock
On March 6, 2025, the Company filed a Certificate of Designation of the Preferences of Preferred Stock (the “Certificate of Designation”) pursuant to which it authorized the issuance of up to million shares of Series C Preferred Stock and created the terms of the Series C Preferred Stock. Additionally, the Board of Directors of the Company also authorized, subject to receipt of all necessary stockholder approvals, the amendments to the Company’s articles of incorporation to provide that all outstanding shares of Series A Preferred Stock shall automatically convert into common stock, and all outstanding shares of Series B Preferred Stock shall automatically convert into common stock or Series C Preferred Stock, concurrently with the listing of the common stock on a national securities exchange.
Each share of Series C Preferred Stock has a stated value of $ and is convertible into a number of shares of Common Stock equal to (x) the stated value of the Series C Preferred Stock being converted plus all accrued but unpaid dividends, divided by (y) $0.05 per share (the “Conversion Price”); provided, however, that holders of Series C Preferred will not be able to convert shares of Series C Preferred Stock and receive shares of Common Stock upon such conversion to the extent that after giving effect to such issuance, the holder and such holder’s affiliates would beneficially own in excess of 4.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of the shares of Common Stock issuable upon conversion of the applicable shares of Series C Preferred Stock (the “Beneficial Ownership Limitation”).
Holders of Series C Preferred Stock are entitled to receive dividends on shares of Series C Preferred Stock equal (on an as-if-converted-to-Common-Stock basis disregarding for such purpose any conversion limitations) to and in the same form as dividends actually paid on shares of the Common Stock when, as and if such dividends are paid on shares of the Common Stock. Upon the liquidation or dissolution of the Company, the holders of Series C Preferred Stock will be entitled to receive out of the assets of the Company, whether capital or surplus, the same amount that a holder of Common Stock would receive if the Series C Preferred Stock were fully converted (disregarding for such purposes any conversion limitations) to Common Stock, which such amounts following will be paid pari passu with all holders of Common Stock.
Series C Preferred Stock Subscription Agreements
Between March 5, 2025 and March 7, 2025, the Company consummated the transactions contemplated by Subscription Agreements dated February 21, 2025 (the “Subscription Agreements”), pursuant to which the Company offered to certain accredited investors shares of its Series C Convertible Preferred Stock, par value $ per share (the “Series C Preferred Stock”), for a purchase price of $ per share. Each of the five purchasers of shares of Series C Preferred Stock is an accredited investor and is a stockholder of and lender to the Company. The purchasers included Frank Celli, a director of the Company. The purchasers subscribed to purchase an aggregate of shares of Series C Preferred Stock for an aggregate purchase price of $1,000,000. The proceeds of the offering will be used by the Company for working capital and the payment of outstanding payables.
The Subscription Agreements also grant to the purchasers of shares of Series C Preferred Stock, among other rights, the right to participate in certain subsequent offerings of securities by the Company and the right to exchange their shares of Series C Preferred Stock for the securities issued in certain subsequent offerings of securities by the Company.
Convertible Notes Exchange Agreements
On March 4, 2025, the Company and the holders of $2,036,000 of the 2023 Bridge Notes, the holder of $212,500 of the Celli Bridge Notes, and the holder of $60,000 of the FC Advisory Bridge note signed exchange agreements which amended the maturity date of the notes to May 31, 2025. On March 30, 2025 the Company and the holder of the 2024 Non-Interest Bearing Bridge Note also entered into an assigned exchange agreement which extended the maturity date of the 2024 Non-Interest Bearing Bridge Note to May 31, 2025. Additionally, it was agreed that immediately prior to an underwritten public offering of the company’s common stock on certain public stock exchanges, each of the notes would be exchanged into a number of shares of the Company’s common stock equal to (i) the sum of (a) the aggregate principal of the notes as of February 9, 2025, (b) plus all interest accrued thereon as of February 9, 2025, (ii) multiplied by 1.4, (iii) plus all interest accrued on the Notes from February 9, 2025 through and including the date of the public offering, (iv) divided by the lesser of (a) $0.05 or (b) 100% of the price per share at which the Common Stock is sold in the public offering (Note 10 – Convertible Notes).
Amendment of Michaelson Note
Subsequent to December 31, 2024, the Company and Michaelson agreed to amend the Michaelson Note. As a result, Michaelson agreed to waive all events of default until April 15, 2025. Additionally, the Michaelson Note was amended in order to have the following principal payment schedule: a principal payment of $165,000 shall be due by February 21, 2025, and a principal payment of $967,090 shall be due by April 15, 2025. The remaining principal owed under the Michaelson Note was sold to a third party, and as of the filing of these financial statements, the Company and the third-party had not yet reached an agreement on the repayment terms of the principal. Additionally, the following payments were due to Michaelson: an interest payment of $21,761 shall be due by February 28, 2025, an interest payment of $21,761 shall be due by March 14, 2025, an interest payment of $21,761 shall be due by April 7, 2025, and a payment of $50,000 for fees and expenses shall be due by April 15, 2025. Lastly, a director of the Company agreed to purchase from the Company a $165,000 portion of the principal obligation owed to Michaelson (Note 9 – Notes Payable).
Settlement of March 2023 Agreement
On February 10, 2025 the Company and the consultant effected a settlement agreement and release related to the March 2023 Agreement. As a result, the Company agreed to settle all amounts owed due to the March 2023 Agreement in exchange for a payment of $3,000, the issuance of a promissory note with a principal value of $70,000 and the issuance of shares of the Company’s common stock. Additionally, the March 2023 Agreement was terminated effective February 10, 2025 (Note 16 – Commitments and Contingencies).
Exchange of Share Rights
On January 16, 2025, the Company issued shares of common stock due to the exercises of share rights from common stock rights.
Related Party Paid-In Kind Transaction
As of December 31, 2024, the Company owed a related party vendor $120,201 for rental services provided (Note 16 – Commitments and Contingencies). In January 2025, the Company paid down $99,800 of its outstanding balance owed to the related party with a paid-in kind payment of front-load containers.
Financing and Payoff of Collateralized Notes Payable
On January 6, 2025, the Company signed an agreement with a financier pursuant to which the Company received proceeds of $7,500,000, of which $6,679,365 was used to repay the balance of the Company’s collateralized notes payables, $81,744 was used to repay the entirety of the Company’s finance lease liability, $638,891 of cash was received by the Company, and the remainder was used to pay fees related to the transaction. In exchange, the Company agreed to owe $200,250 per month, payable in weekly installments, beginning on February 6, 2025 and ending on October 6, 2029. The property and equipment that was used as collateral for the repaid collateralized notes payable became collateral for the financing arrangement.
Contingencies
In February 2025, a complaint was filed against the Company, the Company’s operating subsidiaries and Jeffrey Rizzo, the former Chief Operating Officer of the Company (“Rizzo”), in the Supreme Court of the State of New York, Niagara County. The complaint arises out of a sale of future receipts agreement entered into by the plaintiff and the defendants in January 2025 whereby the plaintiff alleges that it agreed to purchase $179,880 of the Company’s future receivables in exchange for a purchase price of $120,000. The Company’s obligations with regard to the agreement were guaranteed by Rizzo. In the complaint, the plaintiff alleges that the Company breached its contract by failing to pay amounts owed to the plaintiff as agreed to in the sale of future receipts agreement, among other breaches. As of December 31, 2024, $179,880 was included within notes payable on the consolidated balance sheet due to this arrangement.
In March 2025, an arbitration was commenced against the Company before the American Arbitration Association in Michigan asserting claims arising under a June 27, 2022 agreement that the claimant entered into with Titan Trucking. In the arbitration, the claimant asserts claims against the Company for breach of contract, breach of the implied covenant of good faith and fair dealing, and unjust enrichment. The Company has advised the claimant’s attorney that it does not believe the Company can be forced to arbitrate any dispute with the claimant because the Company was not bound by the terms of the agreement entered into by the claimant and the Company’s subsidiary and the Company never agreed to an arbitration proceeding. As of the filing of these financial statements, it is unclear whether the Company is subject to the demand for arbitration and what the claims are that the plaintiff is pursuing against the Company, and what the basis is for which the plaintiff intends to recover from the Company. |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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| Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||
| Basis of Presentation | Basis of Presentation
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the regulations of the United States Securities and Exchange Commission.
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| Principles of Consolidation and Basis of Accounting | Principles of Consolidation and Basis of Accounting
The consolidated financial statements include the accounts of Titan Environmental Solutions Inc and its wholly owned subsidiaries. All material inter-company accounts and transactions have been eliminated. The Company’s policy is to prepare its consolidated financial statements on the accrual basis of accounting, whereby revenue is recognized when earned and expenses are recognized when incurred.
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| Accounting Estimates | Accounting Estimates
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.
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| Business Combinations | Business Combinations
Under the guidance enumerated in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805, if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, the set is not considered a business and is accounted for as an asset acquisition at which point, the acquirer measures the assets acquired based on their cost, which is allocated on a relative fair value basis.
Business combinations are accounted for utilizing the fair value of consideration determined by the Company’s management and external specialists. The Company recognizes estimated fair values of the tangible and intangible assets acquired and liabilities assumed as of the acquisition date. Goodwill is recognized as any excess in fair value over the net value of assets acquired and liabilities assumed.
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| Cash | Cash
The Company considers all highly-liquid money market funds and certificates of deposit with original maturities of less than three months to be cash equivalents. The Company maintains its cash balances with various banks. The balances are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. The Company monitors the cash balances held in its bank accounts, and as of December 31, 2024 and 2023, did not have any concerns regarding cash balances which exceeded the insured amounts.
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| Accounts Receivable, net | Accounts Receivable, net
Accounts receivables are recorded at the amount the Company expects to collect on the balance outstanding at year-end. Management closely monitors outstanding balances during the year and allocates an allowance account if appropriate. The Company estimates and records a provision for its expected credit losses related to its financial instruments, including its trade receivables and contract assets. The Company considers historical collection rates, the current financial status of its customers, macroeconomic factors, and other industry-specific factors when evaluating for current expected credit losses. Forward-looking information is also considered in the evaluation of current expected credit losses. However, because of the short time to the expected receipt of accounts receivable, the Company believes that the carrying value, net of expected losses, approximates fair value and therefore, relies more on historical and current analysis of such financial instruments.
As of December 31, 2024 and 2023, the Company allocated $15,556 and $40,867, respectively to the allowance for credit loss. The Company writes off bad debts as they occur during the year. As of January 1, 2023, the Company had accounts receivable, net of $517,583.
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| Property and Equipment, net | Property and Equipment, net
Property and equipment is stated at cost. Depreciation is computed primarily using the straight-line method over the estimated useful lives of the assets. Expenditures for repairs and maintenance are charged to expense as incurred. For assets sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any related gain or loss is reflected in the condensed consolidated statement of operations or the period in which the disposal occurred. The Company computes depreciation utilizing estimated useful lives, as stated below:
Management regularly reviews property and equipment for possible impairment. This review occurs annually or more frequently if events or changes in circumstances indicate the carrying amount of the asset may not be recoverable. Based on management’s assessment, there were no indicators of impairment of the Company’s property and equipment as of December 31, 2024 and 2023, respectively.
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| Finite Long-lived Intangible Assets, Net | Finite Long-lived Intangible Assets, Net
Finite long-lived intangible assets are recorded at their estimated fair value at the date of acquisition. Finite long-lived intangible assets are amortized on a straight-line basis over their estimated useful lives. Management annually evaluates the estimated remaining useful lives of the finite intangible assets to determine whether events or changes in circumstances warrant a revision to the remaining period of amortization. The Company also recognized finite intangible intellectual property, noncompete agreement, customer list, and tradename assets from its reverse acquisition with Titan Trucking (Note 3 – Business Combinations) which were subsequently impaired and disposed of during the sale of Recoup (Note 4 – Discontinued Operations).
Finite long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be fully recoverable. An impairment loss is recognized if the sum of the expected long-term undiscounted cash flows the asset is expected to generate is less than its carrying amount. Any write-downs are treated as permanent reductions in the carrying amount of the respective asset. Management assessed and concluded that an impairment write-down would not be necessary as of December 31, 2024 and 2023.
The Company amortizes these intangible assets on a straight-line basis over their estimated useful lives, as stated below:
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| Goodwill | Goodwill
Goodwill represents the excess of the acquisition price of a business over the fair value of identified net assets of that business. Goodwill has an indefinite lifespan and is not amortized. The Company evaluates goodwill for impairment at least annually and records an impairment charge when the carrying amount of a reporting unit with goodwill exceeds the fair value of the reporting unit. As of December 31, 2024 and 2023, the Company’s sole reporting unit within continuing operations was its Trucking unit. Prior to the Company’s sale of Recoup (Note 4 – Discontinued Operations), the Company had a second reporting unit: the Digester unit.
The Company assesses qualitative factors to determine if it is necessary to conduct a quantitative goodwill impairment test. If deemed necessary, a quantitative assessment of the reporting unit’s fair value is conducted and compared to its carrying value in order to determine the impairment charge (Note 7 – Goodwill).
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| Leases | Leases
The Company assesses whether a contract is or contains a lease at inception of the contract and recognizes right-of-use assets (“ROU”) and corresponding lease liabilities at the lease commencement date. The lease term is used to calculate the lease liability, which includes options to extend or terminate the lease when it is reasonably certain that the option will be exercised. The leases the Company currently holds do not have implicit borrowing rates, therefore the Company utilizes its incremental borrowing rate to measure the ROU assets and liabilities. Operating lease expense is generally recognized on a straight-line basis over the lease term. All leases that have lease terms of one year or less are considered short-term leases, and therefore are not recorded through a ROU asset or liability. The Company has elected to apply the practical expedient to not separate the lease and non-lease components of a contract.
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| Loan Origination Fees | Loan Origination Fees
Loan origination fees represent loan fees, inclusive of original issue discounts, relating to convertible note payables and note payables granted to the Company. The Company amortizes loan origination fees over the life of the note (Note 9 – Notes Payable and Note 10 – Convertible Notes Payable). Amortization expense of loan issuance fees for the years ended December 31, 2024 and 2023 was $1,828,662 and $385,002, respectively. The net amounts of $3,798,515 and $434,542 were netted against the outstanding notes payable as of December 31, 2024 and 2023, respectively.
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| Fair Value Measurements | Fair Value Measurements
ASC 820 “Fair Value Measurements” defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosure about fair value measurements.
The following provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which fair value is observable:
Level 1- fair value measurements are those derived from quoted prices (unadjusted in active markets for identical assets or liabilities);
Level 2- fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
Level 3- fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).
Financial instruments classified as Level 1 quoted prices in active markets include cash.
These financial instruments are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment to estimation. Valuations based on unobservable inputs are highly subjective and require significant judgments. Changes in such judgments could have a material impact on fair value estimates.
In addition, since estimates are as of a specific point in time, they are susceptible to material near-term changes. Changes in economic conditions may also dramatically affect the estimated fair values.
Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management for the respective periods. The respective carrying value of certain financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include cash, short-term notes payable, accounts payable and accrued expenses. The carrying value of long-term debt approximates fair value, as the variable interest rates approximate current market rates. The Company measured its derivative liabilities, mezzanine equity and common stock as of December 31, 2024, at fair value on a recurring basis using level 3 inputs.
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| Convertible Instruments | Convertible Instruments
The Company evaluates its convertible instruments, such as warrants and convertible notes, to determine if those contracts or embedded components of those contracts qualify as equity instruments, derivative liabilities, or liabilities, to be separately accounted for in accordance with ASC 815 “Derivatives and Hedging” (“ASC 815”) and ASC 480 “Distinguishing Liabilities from Equity” (“ASC 480”). The assessment considers whether the convertible instruments are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the convertible instruments meet all of the requirements for equity classification under ASC 815, including whether the convertible instruments are indexed to the Company’s own ordinary shares and whether the instrument holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of the instrument’s issuance, and as of each subsequent balance sheet date while the instruments are outstanding. If the classification changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification.
Embedded conversion options and any related freestanding instruments are recorded as a discount to the host instrument. The Company allocates proceeds based on the relative fair values of the debt and equity components. The accounting treatment of derivative financial instruments requires that the Company record embedded conversion options and any related freestanding instruments at their fair values as of the inception date of the agreement and at fair value as of each subsequent balance sheet date. Any change in fair value is recorded in earnings each period as non-operating, non-cash income or expense.
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| Common Stock | Common Stock
Beginning on December 31, 2024, due to the lack of an active market for the Company’s common stock, management was required to estimated the fair value of the Company’s common stock at the time of each grant of the common stock. The Company utilized various Level 3 valuation methodologies to estimate the fair value of its common stock. Each valuation methodology includes estimates and assumptions that require the Company’s judgment. These estimates and assumptions include a number of objective and subjective factors in determining the value of the Company’s common stock at each grant date, including the following factors:
Prior to December 31, 2024, the Company valued its common stock price using the trading price of its publicly listed common stock. The Company intends to return to this valuation methodology upon the establishment of an active market for the Company’s common stock. Under ASC 250-10-45-17, the Company is applying the change in the accounting estimate prospectively. The Company believes the change in estimate is preferable because it allows the Company to record a more accurate measurement of the fair value of the Company’s common stock.
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| Redeemable Series B Preferred Stock | Redeemable Series B Preferred Stock
The Company applies the guidance enumerated in ASC 480, when determining the classification and measurement of preferred stock. Preferred stock subject to mandatory redemption, if any, is classified as a liability and is measured at fair value. The Company classifies conditionally redeemable preferred stock, which includes preferred stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control, as mezzanine equity. At all other times, the Company classifies its preferred stock in stockholders’ equity. The Company subsequently measures mezzanine equity based on whether the instrument is currently redeemable or whether or not it is probable the instrument will become redeemable. Given the assessed probability that the instrument will become redeemable, the Company has elected to adjust the value of the Series B Preferred shares to its maximum redemption amount at each reporting date, including amounts representing dividends not currently declared or paid, but which will be payable under the redemption feature.
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| Stock-Based Compensation | Stock-Based Compensation
The Company accounts for stock awards to employees and non-employees in accordance with ASC Topic 718, “Compensation – Stock Compensation” by measuring the cost of services received in exchange for the award of equity instruments based upon the fair value of the award on the date of grant. The fair value of that award is then ratably recognized as expense over the period during which the recipient is required to provide services in exchange for that award.
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| Revenue Recognition | Revenue Recognition
The Company records revenue based on a five-step model in accordance with FASB ASC 606, Revenue from Contracts with Customers, which requires the following:
1. Identify the contract with a customer.
2. Identify the performance obligations in the contract.
3. Determine the transaction price of the contract.
4. Allocate the transaction price to the performance obligations in the contract.
5. Recognize revenue when the performance obligations are met or delivered.
The Company’s operating revenues are generated from fees charged for the collection and disposal of waste by its Trucking Segment. Revenues are recognized at a point in time immediately after completion of disposal of waste at a landfill or transfer station. Revenues from collection operations are influenced by factors such as collection frequency, type of collection furnished, type and volume or weight of the waste collected, distance to the disposal facility or material recovery facility and disposal costs. Fees charged at transfer stations are generally based on the weight or volume of waste deposited, including the cost of loading, transporting, and disposing of the solid waste at a disposal site. The fees charged for services generally include environmental, fuel charge and regulatory recovery fees, which are intended to pass through to customers direct and indirect costs incurred. For waste collection and disposal services the Company invoices its customers with standard 30-day payment terms without any significant financing terms.
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| Concentration Risk from Revenues | Concentration Risk from Revenues
A major customer is defined as a customer that represents 10% or greater of total revenues. The Company does not believe that the concentration risk associated with these customers or vendors will have a materially adverse effect on the business. The Company’s concentration of revenue is as follows:
Concentration Risk from Accounts Receivable
A major customer is defined as a customer that represents 10% or greater of total accounts receivable, net. The Company does not believe that the risk associated with these customers or vendors will have an adverse effect on the business. The Company’s concentration of accounts receivable is as follows:
The Company maintains positive customer relationships and continually expands its customer base, mitigating the impact of any potential concentration risks that exist.
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| Income Taxes and Uncertain Tax Positions | Income Taxes and Uncertain Tax Positions
The Company and its U.S. subsidiaries file a consolidated federal income tax return and is taxed as a C-Corporation, whereby it is subject to federal and state income taxes. The Company accounts for income taxes in accordance with ASC 740, “Income Taxes”. ASC 740 requires an asset and liability approach for financial accounting and reporting for income taxes, established for all the entities a minimum threshold for financial statement recognition of the benefit of tax positions, and requires certain expanded disclosures. The provision for income taxes is based upon income or loss after adjustment for those permanent items that are not considered in the determination of taxable income. Deferred income taxes represent the tax effects of differences between the financial reporting and tax basis of the Company’s assets and liabilities at the enacted tax rates in effect for the years in which the differences are expected to reverse. The Company evaluates the recoverability of deferred tax assets and establishes a valuation allowance when it is more likely than not that some portion or all the deferred tax assets will not be realized. Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In management’s opinion, adequate provisions for income taxes have been made. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary. The Company’s taxes are subject to examination by taxation authorities for a period of three years.
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| Advertising and Marketing Costs | Advertising and Marketing Costs
Costs associated with advertising are charged to expense as occurred. For the years ended December 31, 2024 and 2023 the advertising and marketing costs were $66,579 and $61,724, respectively.
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| Recently Issued Accounting Standards | Recently Issued Accounting Standards
The Company has reviewed the recent accounting pronouncements issued by the Financial Accounting Standards Board (“FASB”), including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the SEC, and determined that these pronouncements do not have a material impact on the Company’s current or anticipated consolidated financial statement presentation or disclosures.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) – Improvements to Income Tax Disclosures (ASU 2023-09). ASU 2023-09 requires that an entity, on an annual basis, disclose additional income tax information, primarily related to the rate reconciliation and income taxes paid. The amendment in the ASU is intended to enhance the transparency and decision usefulness of income tax disclosures. The ASU’s amendments are effective for annual periods beginning after December 15, 2024. The Company is currently evaluating the impact that adoption of ASU 2023-09 will have on its financial statements.
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires disclosure about the types of costs and expenses included in certain expense captions presented on the income statement. The new disclosure requirements are effective for the Company’s annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently in the process of evaluating the impact of this pronouncement on our related disclosures.
In November 2024, the FASB issued ASU No. 2024-04, Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments (“ASU 2024-04”), which clarifies the requirements for determining whether to account for certain early settlements of convertible debt instruments as induced conversions or extinguishments. ASU 2024-04 is effective for fiscal years beginning after December 15, 2025 with early adoption permitted for entities that have adopted ASU 2020-06. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.
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| Recently Adopted Accounting Standards | Recently Adopted Accounting Standards
In November 2023, the FASB issued Accounting Standard Update (“ASU”) 2023-07, Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 requires a public entity to disclose significant segment expenses and other segment items on an annual and interim basis and provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. Additionally, it requires a public entity to disclose the title and position of the Chief Operating Decision Maker (“CODM”). ASU 2023-07 does not change how a public entity identifies its operating segments, aggregates them, or applies the quantitative thresholds to determine its reportable segments. The new standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. A public entity should apply the amendments in this ASU retrospectively to all prior periods presented in the financial statements. The Company has adopted ASU 2023-07 as of January 1, 2024. The adoption did not have a material impact on the Company’s financial statements.
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BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
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Dec. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||
| Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF PROPERTY AND EQUIPMENT ESTIMATED USEFUL LIFE |
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| SCHEDULE OF FINITE LONG-LIVED INTANGIBLE ASSETS ESTIMATED USEFUL LIFE | The Company amortizes these intangible assets on a straight-line basis over their estimated useful lives, as stated below:
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| SCHEDULE OF CONCENTRATION RISK |
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BUSINESS COMBINATIONS (Tables) |
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Dec. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Standard Waste Services LLC [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Business Acquisition [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF TANGIBLE AND INTANGIBLE ASSETS ACQUIRED AND LIABILITIES ASSUMED AT THEIR PRELIMINARY ESTIMATED FAIR VALUES | The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed at the acquisition date.
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| SCHEDULE OF SUPPLEMENTAL PRO-FORMA FINANCIAL INFORMATION | Standard’s results of operations are included in the consolidated financial statements from the date of the transaction within the Trucking segment. It is impracticable for the Company to determine the approximate revenue and gross profit for Standard from May 31, 2024 through December 31, 2024, as the operations of Standard and Titan Trucking are closely related and discrete financial information is not available for Standard on a stand-alone basis. If the transaction had occurred on the beginning of the year ended December 31, 2023, unaudited pro forma consolidated results for 2024 and 2023, would have been as follows:
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| Titan Trucking LLC [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Business Acquisition [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF TANGIBLE AND INTANGIBLE ASSETS ACQUIRED AND LIABILITIES ASSUMED AT THEIR PRELIMINARY ESTIMATED FAIR VALUES | The Company recorded all tangible and intangible assets and liabilities at their estimated fair values on the acquisition date. The following represents the allocation of the purchase consideration:
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| SCHEDULE OF SUPPLEMENTAL PRO-FORMA FINANCIAL INFORMATION | The following supplemental pro-forma financial information approximate combined financial information assumes that the acquisition had occurred at the beginning of the year ended December 31, 2023:
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| SCHEDULE OF PURCHASE CONSIDERATION |
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DISCONTINUED OPERATIONS (Tables) |
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Dec. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF DISCONTINUED OPERATIONS WITHIN THE COMPANY’S CONSOLIDATED STATEMENT OF OPERATIONS AND BALANCE SHEET |
The following table presents the assets and liabilities of Recoup that were reclassified as discontinued operations within the Company’s consolidated balance sheet as of December 31, 2023.
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PROPERTY AND EQUIPMENT, NET (Tables) |
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Dec. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF PROPERTY AND EQUIPMENT, NET | Property and equipment consist of the following as of December 31, 2024 and 2023:
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INTANGIBLES, NET (Tables) |
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Dec. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF INTANGIBLE ASSETS | Intangible assets consisted of the following as of December 31, 2024 and 2023:
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| SCHEDULE OF FUTURE AMORTIZATION EXPENSE | Future amortization expense from intangible assets as of December 31, 2024 were as follows:
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GOODWILL (Tables) |
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Dec. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF CARRYING VALUE OF GOODWILL | The changes in the carrying value of goodwill by reportable segment for the years ended December 31, 2024 and 2023 are as follows:
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LEASES (Tables) |
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Dec. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leases | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF OPERATING LEASE WEIGHTED AVERAGE REMAINING LEASE TERMS AND DISCOUNT RATES |
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| SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS UNDER OPERATING LEASES | Future minimum lease payments required under operating leases on an undiscounted cash flow basis as of December 31, 2024, were as follows:
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| SCHEDULE OF FINANCING LEASE WEIGHTED AVERAGE REMAINING LEASE TERMS AND DISCOUNT RATES |
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| SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS UNDER FINANCING LEASES |
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NOTES PAYABLE (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF LONG-TERM DEBT | The Company’s notes payables balance as of December 31, 2024 and 2023, consisted of the following:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF PRINCIPAL MATURITIES OF NOTES PAYABLE | Principal maturities for the next five years and thereafter as of December 31, 2024 were as follows:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CONVERTIBLE NOTES PAYABLE (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF CONVERTIBLE NOTES PAYABLES | The Company’s convertible notes as of December 31, 2024 and 2023 were as follows:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF PRINCIPAL MATURITIES OF CONVERTIBLE NOTES PAYABLE | Convertible note payables principal maturities for the next three years as of December 31, 2024 were as follows:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DERIVATIVE LIABILITIES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF DERIVATIVE LIABILITIES | The derivative liabilities as of December 31, 2024 and December 31, 2023 were as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF ACTIVITY RELATED TO DERIVATIVE LIABILITIES | Activity related to the derivative liabilities for the year ended December 31, 2024 is as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Black Scholes Valuation Model [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF VALUATION ASSUMPTIONS | The fair value of the Platinum Point Warrants derivative liability is estimated using a Black-Scholes valuation model with a stock price of $. Changes to the inputs used in the model could produce a significantly higher or lower fair value. The following assumptions were used as of December 31, 2023:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF SERIES B PREFERRED STOCK |
|
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| SCHEDULE OF CHANGES IN COMMON STOCK WARRANTS |
|
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STOCK-BASED COMPENSATION (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-Based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF RESTRICTED STOCK AWARDS ACTIVITY |
|
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| SCHEDULE OF STOCK OPTION ACTIVITY |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF KEY ASSUMPTIONS USED TO VALUE STOCK OPTIONS |
|
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LOSS PER SHARE (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF EARNINGS PER SHARE ANTI DILUTIVE |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PROVISION FOR INCOME TAXES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF INCOME TAX (BENEFIT) PROVISION |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION | The following table summarizes the significant differences between the U.S. Federal statutory tax rate and the Company’s effective tax rate for financial statement purposes for the years ended December 31, 2024 and 2023:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF DEFERRED TAX ASSETS | The following is a summary of the components of deferred tax assets and liabilities as of December 31, 2024 and 2023:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SCHEDULE OF PROPERTY AND EQUIPMENT ESTIMATED USEFUL LIFE (Details) |
Dec. 31, 2024 |
|---|---|
| Tractors And Trailers [Member] | |
| Property, Plant and Equipment [Line Items] | |
| Property plant and equipment estimated useful life | 15 years |
| Containers [Member] | |
| Property, Plant and Equipment [Line Items] | |
| Property plant and equipment estimated useful life | 25 years |
| Equipment [Member] | |
| Property, Plant and Equipment [Line Items] | |
| Property plant and equipment estimated useful life | 10 years |
| Leasehold Improvements [Member] | |
| Property, Plant and Equipment [Line Items] | |
| Property plant and equipment estimated useful life | 5 years |
SCHEDULE OF FINITE LONG-LIVED INTANGIBLE ASSETS ESTIMATED USEFUL LIFE (Details) |
Dec. 31, 2024 |
|---|---|
| Customer Lists [Member] | |
| Finite-Lived Intangible Assets [Line Items] | |
| Finite long lived intangible assets estimated useful life | 10 years |
| Intellectual Property [Member] | |
| Finite-Lived Intangible Assets [Line Items] | |
| Finite long lived intangible assets estimated useful life | 10 years |
| Noncompete Agreement [Member] | |
| Finite-Lived Intangible Assets [Line Items] | |
| Finite long lived intangible assets estimated useful life | 5 years |
| Trade Names [Member] | |
| Finite-Lived Intangible Assets [Line Items] | |
| Finite long lived intangible assets estimated useful life | 10 years |
SCHEDULE OF CONCENTRATION RISK (Details) - Customer Concentration Risk [Member] - Customer A [Member] |
12 Months Ended | ||||
|---|---|---|---|---|---|
Dec. 31, 2024 |
Dec. 31, 2023 |
||||
| Revenue Benchmark [Member] | |||||
| Product Information [Line Items] | |||||
| Customer A | 11.00% | 38.00% | |||
| Accounts Receivable [Member] | |||||
| Product Information [Line Items] | |||||
| Customer A | [1] | 35.00% | |||
| |||||
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2024 |
Dec. 31, 2023 |
Jan. 01, 2023 |
|
| Accounting Policies [Abstract] | |||
| Federal deposit insurance cash | $ 250,000 | ||
| Allowance for credit loss | 15,556 | $ 40,867 | |
| Accounts receivable net | $ 517,583 | ||
| Amortization expense of loan issuance fees | 1,828,662 | 385,002 | |
| Notes payable outstanding amount | 3,798,515 | 434,542 | |
| Advertising and marketing costs | $ 66,579 | $ 61,724 | |
SCHEDULE OF THE PRELIMINARY FAIR VALUES OF THE ASSETS ACQUIRED AND LIABILITIES ASSUMED (Details) - USD ($) |
Dec. 31, 2024 |
May 31, 2024 |
Dec. 31, 2023 |
|---|---|---|---|
| Business Acquisition [Line Items] | |||
| Intangible assets and goodwill | $ 12,440,922 | ||
| Standard Waste Services LLC [Member] | |||
| Business Acquisition [Line Items] | |||
| Cash | $ 2,545 | ||
| Accounts receivable | 1,387,932 | ||
| Property and equipment | 6,995,080 | ||
| Prepaid expenses and other current assets | 12,900 | ||
| Other receivables | 1,600 | ||
| Right-of-use-asset | 294,431 | ||
| Intangible assets and goodwill | 12,440,922 | ||
| Assets acquired total | 21,135,410 | ||
| Accounts payable and accrued expenses | (1,343,793) | ||
| Accrued payroll and related taxes | (46,189) | ||
| Operating lease liability, current | (83,654) | ||
| Finance lease liability, current | (29,230) | ||
| Notes payable | (3,271,231) | ||
| Operating lease liability, noncurrent | (210,778) | ||
| Finance lease liability, noncurrent | (70,137) | ||
| Liabilities acquired total | (5,055,012) | ||
| Net fair value of assets (liabilities) acquired | $ 16,080,398 |
SCHEDULE OF SUPPLEMENTAL PRO-FORMA FINANCIAL INFORMATION (Details) - USD ($) |
12 Months Ended | |
|---|---|---|
Dec. 31, 2024 |
Dec. 31, 2023 |
|
| Standard Waste Services LLC [Member] | ||
| Business Acquisition [Line Items] | ||
| Total revenue | $ 13,592,081 | $ 15,871,666 |
| Net loss | $ (22,029,541) | $ (148,275,032) |
| Pro forma loss per common share, basic | $ (0.10) | $ (0.87) |
| Pro forma loss per common share, diluted | $ (0.10) | $ (0.87) |
| Pro forma weighted average number of common shares basic | 222,067,042 | 170,175,695 |
| Pro forma weighted average number of common shares diluted | 222,067,042 | 170,175,695 |
| Titan Trucking LLC [Member] | ||
| Business Acquisition [Line Items] | ||
| Total revenue | $ 7,993,090 | |
| Net loss | $ (124,502,520) | |
| Pro forma loss per common share, basic | $ (0.73) | |
| Pro forma loss per common share, diluted | $ (0.73) | |
| Pro forma weighted average number of common shares basic | 170,715,695 | |
| Pro forma weighted average number of common shares diluted | 170,715,695 | |
SCHEDULE OF PURCHASE CONSIDERATION (Details) - Titan Trucking LLC [Member] |
May 19, 2023
USD ($)
|
|---|---|
| Business Acquisition [Line Items] | |
| Titan Environmental Solutions Inc. market capitalization at closing | $ 27,162,222 |
| Total purchase consideration | $ 27,162,222 |
DISCONTINUED OPERATIONS (Details Narrative) - USD ($) |
12 Months Ended | ||
|---|---|---|---|
Oct. 31, 2024 |
Dec. 31, 2024 |
Dec. 31, 2023 |
|
| Consideration amount | $ 1,000,000 | ||
| Consideration accounts payables | 750,000 | $ 621,090 | |
| Consideration notes receivable | $ 250,000 | 311,637 | |
| Principal amount | $ 175,000 | ||
| Debt accrued interest percentage | 7.50% | ||
| Maturity date | Dec. 31, 2024 | ||
| Accounts payable | $ 593,674 | ||
| Digester [Member] | Operating Segments [Member] | |||
| Impairment expense | 5,508,595 | $ 20,364,001 | |
| Impairment expense | $ 4,853,142 | ||
| Promissory Note [Member] | |||
| Principal amount | $ 250,000 |
SCHEDULE OF PROPERTY AND EQUIPMENT, NET (Details) - USD ($) |
Dec. 31, 2024 |
Dec. 31, 2023 |
|---|---|---|
| Property, Plant and Equipment [Line Items] | ||
| Property and equipment, gross | $ 15,050,770 | $ 7,220,516 |
| Less accumulated depreciation | (2,328,522) | (1,454,925) |
| Net book value | 12,722,248 | 5,765,591 |
| Containers [Member] | ||
| Property, Plant and Equipment [Line Items] | ||
| Property and equipment, gross | 4,550,849 | 1,740,393 |
| Trucks And Tractors [Member] | ||
| Property, Plant and Equipment [Line Items] | ||
| Property and equipment, gross | 9,263,400 | 4,386,895 |
| Trailers [Member] | ||
| Property, Plant and Equipment [Line Items] | ||
| Property and equipment, gross | 1,033,259 | 1,033,259 |
| Equipment [Member] | ||
| Property, Plant and Equipment [Line Items] | ||
| Property and equipment, gross | 52,998 | 40,380 |
| Furniture and Fixtures [Member] | ||
| Property, Plant and Equipment [Line Items] | ||
| Property and equipment, gross | 16,843 | |
| Leasehold Improvements [Member] | ||
| Property, Plant and Equipment [Line Items] | ||
| Property and equipment, gross | $ 133,421 | $ 19,589 |
PROPERTY AND EQUIPMENT, NET (Details Narrative) - USD ($) |
12 Months Ended | |
|---|---|---|
Dec. 31, 2024 |
Dec. 31, 2023 |
|
| Property, Plant and Equipment [Abstract] | ||
| Depreciation expenses | $ 891,215 | $ 424,040 |
SCHEDULE OF INTANGIBLE ASSETS (Details) - USD ($) |
Dec. 31, 2024 |
Dec. 31, 2023 |
|---|---|---|
| Finite-Lived Intangible Assets [Line Items] | ||
| Less: accumulated amortization | $ (137,500) | $ (68,750) |
| Intangible assets, net | 550,000 | 618,750 |
| Customer Lists [Member] | ||
| Finite-Lived Intangible Assets [Line Items] | ||
| Customer Lists | $ 687,500 | $ 687,500 |
SCHEDULE OF FUTURE AMORTIZATION EXPENSE (Details) - USD ($) |
Dec. 31, 2024 |
Dec. 31, 2023 |
|---|---|---|
| Goodwill and Intangible Assets Disclosure [Abstract] | ||
| 2025 | $ 68,750 | |
| 2026 | 68,750 | |
| 2027 | 68,750 | |
| 2028 | 68,750 | |
| 2029 | 68,750 | |
| Thereafter | 206,250 | |
| Total remaining amortization expense | $ 550,000 | $ 618,750 |
INTANGIBLES, NET (Details Narrative) - USD ($) |
12 Months Ended | |
|---|---|---|
Dec. 31, 2024 |
Dec. 31, 2023 |
|
| Goodwill and Intangible Assets Disclosure [Abstract] | ||
| Amortization expense | $ 68,750 | $ 68,750 |
SCHEDULE OF CARRYING VALUE OF GOODWILL (Details) |
12 Months Ended |
|---|---|
|
Dec. 31, 2024
USD ($)
| |
| Indefinite-Lived Intangible Assets [Line Items] | |
| Balance as of January 1, 2024 | |
| Net carrying value, as of December 31, 2024 | 12,440,922 |
| Operating Segments [Member] | Trucking [Member] | |
| Indefinite-Lived Intangible Assets [Line Items] | |
| Balance as of January 1, 2024 | |
| Goodwill recognized | 12,440,922 |
| Net carrying value, as of December 31, 2024 | 12,440,922 |
| Balance as of January 1, 2024 | |
| Impairment | |
| Balance as of December 31, 2024 |
GOODWILL (Details Narrative) - USD ($) |
Dec. 31, 2024 |
Dec. 31, 2023 |
|---|---|---|
| Goodwill | $ 12,440,922 | |
| Titan Trucking LLC [Member] | ||
| Goodwill | $ 12,440,922 | $ 0 |
SCHEDULE OF OPERATING LEASE WEIGHTED AVERAGE REMAINING LEASE TERMS AND DISCOUNT RATES (Details) |
Dec. 31, 2024 |
Dec. 31, 2023 |
|---|---|---|
| Leases | ||
| Weighted average remaining lease term (in years) | 2 years 3 months 25 days | 3 years 10 months 9 days |
| Weighted average discount rate | 9.25% | 8.10% |
SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS UNDER OPERATING LEASES (Details) - USD ($) |
Dec. 31, 2024 |
Dec. 31, 2023 |
|---|---|---|
| Leases | ||
| 2025 | $ 211,980 | |
| 2026 | 207,944 | |
| 2027 | 80,460 | |
| Total minimum lease payments | 500,384 | |
| Less: imputed interest | (52,941) | |
| Present value of future minimum lease payments | 447,443 | |
| Current operating lease liabilities | 178,261 | $ 391,547 |
| Non-current operating lease liabilities | $ 269,181 | $ 1,290,866 |
SCHEDULE OF FINANCING LEASE WEIGHTED AVERAGE REMAINING LEASE TERMS AND DISCOUNT RATES (Details) |
Dec. 31, 2024 |
|---|---|
| Leases | |
| Weighted average remaining lease term (in years) | 2 years 3 months 29 days |
| Weighted average discount rate | 12.08% |
SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS UNDER FINANCING LEASES (Details) - USD ($) |
Dec. 31, 2024 |
Dec. 31, 2023 |
|---|---|---|
| Leases | ||
| 2025 | $ 39,650 | |
| 2026 | 39,650 | |
| 2027 | 16,521 | |
| Total minimum lease payments | 95,821 | |
| Less: imputed interest | (13,077) | |
| Present value of future minimum lease payments | 82,744 | |
| Current financing lease liabilities | 31,353 | |
| Non-current financing lease liabilities | $ 51,391 |
LEASES (Details Narrative) - USD ($) |
12 Months Ended | ||
|---|---|---|---|
Apr. 01, 2023 |
Dec. 31, 2024 |
Dec. 31, 2023 |
|
| Operating lease expense | $ 395,090 | $ 372,162 | |
| Finance lease description | Standard leases a truck used for its operations under a five-year lease that commenced during May 2022 and which ends during May 2027. | ||
| Monthly payment | $ 3,304 | ||
| Interest rate | 12.08% | ||
| Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Assets | ||
| Finance lease right of use asset | $ 1,006.86 | ||
| Interest expense | 6,507 | ||
| Amortization | $ 12,815 | ||
| Detroit Michigan [Member] | |||
| Lease term | 60 months | ||
| Expire date | Mar. 31, 2028 | ||
| Straight rent | $ 29,113 | ||
SCHEDULE OF LONG-TERM DEBT (Details) - USD ($) |
Dec. 31, 2024 |
Dec. 31, 2023 |
||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Collateralized Loans current | [1] | $ 2,534,832 | $ 970,301 | |||||||||||||||||||||||
| Collateralized Loans non current | [1] | 4,139,082 | 2,521,624 | |||||||||||||||||||||||
| Total notes payable current | 5,431,761 | 3,911,446 | ||||||||||||||||||||||||
| Total notes payable non-current | 3,281,212 | 3,174,685 | ||||||||||||||||||||||||
| Total outstanding principal current | 5,964,730 | 3,932,831 | ||||||||||||||||||||||||
| Total outstanding principal non-current | 4,165,571 | 3,228,010 | ||||||||||||||||||||||||
| Less: discounts current | (532,969) | (21,385) | ||||||||||||||||||||||||
| Less: discounts non-current | (884,359) | (53,325) | ||||||||||||||||||||||||
| Standard Waste Promissory Note (1) [Member] | ||||||||||||||||||||||||||
| Total notes payable current | [2] | 175,000 | ||||||||||||||||||||||||
| Total notes payable non-current | [2] | |||||||||||||||||||||||||
| Titan Holdings 2 [Member] | ||||||||||||||||||||||||||
| Total notes payable current | [3] | 882,470 | 175,000 | |||||||||||||||||||||||
| Total notes payable non-current | [3] | 603,470 | ||||||||||||||||||||||||
| Titan Holdings 5 [Member] | ||||||||||||||||||||||||||
| Total notes payable current | [4] | 107,000 | 40,000 | |||||||||||||||||||||||
| Total notes payable non-current | [4] | |||||||||||||||||||||||||
| Glen Miller [Member] | ||||||||||||||||||||||||||
| Total notes payable current | [5] | 305,000 | 250,000 | |||||||||||||||||||||||
| Total notes payable non-current | [5] | |||||||||||||||||||||||||
| Jeff Rizzo [Member] | ||||||||||||||||||||||||||
| Total notes payable current | [6] | 78,727 | 65,000 | |||||||||||||||||||||||
| Total notes payable non-current | [6] | |||||||||||||||||||||||||
| Charles B Rizzo [Member] | ||||||||||||||||||||||||||
| Total notes payable current | [7] | |||||||||||||||||||||||||
| Total notes payable non-current | [7] | |||||||||||||||||||||||||
| Related Party [Member] | ||||||||||||||||||||||||||
| Total notes payable current | 1,548,196 | 530,000 | ||||||||||||||||||||||||
| Total notes payable non-current | 603,470 | |||||||||||||||||||||||||
| Nonrelated Party [Member] | ||||||||||||||||||||||||||
| Total notes payable current | 3,883,565 | 3,381,446 | ||||||||||||||||||||||||
| Total notes payable non-current | 3,281,212 | 2,571,215 | ||||||||||||||||||||||||
| Keystone [Member] | ||||||||||||||||||||||||||
| Total notes payable current | [8] | 99,000 | ||||||||||||||||||||||||
| Total notes payable non-current | [8] | |||||||||||||||||||||||||
| Michaelson Capital [Member] | ||||||||||||||||||||||||||
| Total notes payable current | [9] | 1,657,090 | 2,307,090 | |||||||||||||||||||||||
| Total notes payable non-current | [9] | |||||||||||||||||||||||||
| Loanbuilder [Member] | ||||||||||||||||||||||||||
| Total notes payable current | [10] | 100,611 | 91,096 | |||||||||||||||||||||||
| Total notes payable non-current | [10] | 26,489 | 102,916 | |||||||||||||||||||||||
| Individual Notes Payable [Member] | ||||||||||||||||||||||||||
| Total notes payable current | [11] | 25,000 | 25,000 | |||||||||||||||||||||||
| Total notes payable non-current | [11] | |||||||||||||||||||||||||
| Kabbage Funding Loans [Member] | ||||||||||||||||||||||||||
| Total notes payable current | [12] | 9,344 | ||||||||||||||||||||||||
| Total notes payable non-current | [12] | |||||||||||||||||||||||||
| ||||||||||||||||||||||||||
SCHEDULE OF LONG-TERM DEBT (Details) (Parenthetical) - USD ($) |
1 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2025 |
Mar. 07, 2025 |
Dec. 31, 2024 |
Oct. 31, 2024 |
Sep. 30, 2024 |
Aug. 30, 2024 |
Jul. 02, 2024 |
May 31, 2024 |
May 31, 2024 |
May 30, 2024 |
Feb. 23, 2024 |
May 30, 2023 |
May 19, 2023 |
Jan. 05, 2023 |
May 16, 2022 |
Jul. 31, 2024 |
Apr. 30, 2024 |
Jan. 31, 2024 |
Dec. 31, 2023 |
Dec. 31, 2024 |
Dec. 31, 2023 |
Jun. 30, 2024 |
Jan. 05, 2024 |
Dec. 08, 2023 |
Dec. 01, 2023 |
Nov. 30, 2023 |
Nov. 10, 2023 |
Oct. 30, 2023 |
Sep. 29, 2022 |
Sep. 28, 2022 |
|||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Debt instrument face amount | $ 175,000 | $ 175,000 | ||||||||||||||||||||||||||||||||||||||||||||||
| Notes payable | 3,798,515 | $ 434,542 | 3,798,515 | $ 434,542 | ||||||||||||||||||||||||||||||||||||||||||||
| Exercise price | $ 0.55 | |||||||||||||||||||||||||||||||||||||||||||||||
| Total notes payable current | $ 5,431,761 | 3,911,446 | 5,431,761 | 3,911,446 | ||||||||||||||||||||||||||||||||||||||||||||
| Preference stock issuance | 3,900,000 | |||||||||||||||||||||||||||||||||||||||||||||||
| Debt instrument capital interest expense | 1,419,931 | 593,383 | ||||||||||||||||||||||||||||||||||||||||||||||
| Principal repayments | 3,093,284 | 1,843,871 | ||||||||||||||||||||||||||||||||||||||||||||||
| Maturity date | Dec. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||
| Annual interest rate | 7.50% | |||||||||||||||||||||||||||||||||||||||||||||||
| Amortization of debt | $ 1,828,662 | 385,002 | ||||||||||||||||||||||||||||||||||||||||||||||
| Share price | $ 11.60 | $ 11.60 | ||||||||||||||||||||||||||||||||||||||||||||||
| Gains losses on extinguishment of debt | 91,803 | |||||||||||||||||||||||||||||||||||||||||||||||
| Additional fund borrowed | 50,000 | 675,000 | ||||||||||||||||||||||||||||||||||||||||||||||
| Warrants to purchase | 2,750,001 | |||||||||||||||||||||||||||||||||||||||||||||||
| Titan Holdings 2 [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Total notes payable current | [1] | $ 882,470 | 175,000 | 882,470 | 175,000 | |||||||||||||||||||||||||||||||||||||||||||
| Debt instrument face amount | $ 146,000 | |||||||||||||||||||||||||||||||||||||||||||||||
| Titan Holdings 5 [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Total notes payable current | [2] | 107,000 | 40,000 | 107,000 | 40,000 | |||||||||||||||||||||||||||||||||||||||||||
| Glen Miller [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Total notes payable current | [3] | 305,000 | 250,000 | 305,000 | 250,000 | |||||||||||||||||||||||||||||||||||||||||||
| Jeff Rizzo [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Total notes payable current | [4] | 78,727 | 65,000 | 78,727 | 65,000 | |||||||||||||||||||||||||||||||||||||||||||
| Charles B Rizzo [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Total notes payable current | [5] | |||||||||||||||||||||||||||||||||||||||||||||||
| Subsequent Event [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Notes payable | 179,880 | 179,880 | ||||||||||||||||||||||||||||||||||||||||||||||
| Share issued | 500,000 | |||||||||||||||||||||||||||||||||||||||||||||||
| Exchange of shares, value | $ 1,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||
| Titan Trucking LLC [Member] | Titan Holdings 2 [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Debt instrument face amount | $ 175,000 | $ 712,470 | ||||||||||||||||||||||||||||||||||||||||||||||
| Interest rate | 13.00% | 10.50% | ||||||||||||||||||||||||||||||||||||||||||||||
| Debt penalty charges | 50,000 | |||||||||||||||||||||||||||||||||||||||||||||||
| Additional fund borrowed | 240,000 | |||||||||||||||||||||||||||||||||||||||||||||||
| Proceeds issuance debt | 370,000 | |||||||||||||||||||||||||||||||||||||||||||||||
| Debt forgiveness | 220,000 | |||||||||||||||||||||||||||||||||||||||||||||||
| Accrued interest | 4,000 | |||||||||||||||||||||||||||||||||||||||||||||||
| Titan Trucking LLC [Member] | Titan Holdings 2 [Member] | Customer One Contracts [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Cash proceeds from issuance of debt | 100,000 | |||||||||||||||||||||||||||||||||||||||||||||||
| Titan Trucking LLC [Member] | Titan Holdings 2 [Member] | Customer Two Contracts [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Debt issuance expenses | 50,000 | |||||||||||||||||||||||||||||||||||||||||||||||
| Titan Trucking LLC [Member] | Titan Holdings 5 [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Additional fund borrowed | 107,000 | |||||||||||||||||||||||||||||||||||||||||||||||
| Titan Trucking LLC [Member] | Glen Miller [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Debt instrument face amount | $ 55,000 | $ 250,000 | ||||||||||||||||||||||||||||||||||||||||||||||
| Total notes payable current | 250,000 | 250,000 | ||||||||||||||||||||||||||||||||||||||||||||||
| Maturity date | Jun. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||
| Debt instrument late fees percentage | 10.00% | 10.00% | ||||||||||||||||||||||||||||||||||||||||||||||
| Note original issue discount | $ 5,000 | |||||||||||||||||||||||||||||||||||||||||||||||
| Long term debt | 55,000 | 55,000 | ||||||||||||||||||||||||||||||||||||||||||||||
| Titan Trucking LLC [Member] | Jeff Rizzo [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Debt instrument face amount | $ 65,000 | |||||||||||||||||||||||||||||||||||||||||||||||
| Interest rate | 10.00% | |||||||||||||||||||||||||||||||||||||||||||||||
| Additional fund borrowed | 13,727 | |||||||||||||||||||||||||||||||||||||||||||||||
| Debt instrument late fees percentage | 10.00% | |||||||||||||||||||||||||||||||||||||||||||||||
| Titan Trucking LLC [Member] | Charles B Rizzo [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Proceeds issuance debt | 370,000 | |||||||||||||||||||||||||||||||||||||||||||||||
| Debt forgiveness | 220,000 | |||||||||||||||||||||||||||||||||||||||||||||||
| Accrued interest | 70,000 | |||||||||||||||||||||||||||||||||||||||||||||||
| Debt liability | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||
| Titan Trucking LLC [Member] | Charles B Rizzo [Member] | Customer One Contracts [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Debt issuance expenses | 100,000 | |||||||||||||||||||||||||||||||||||||||||||||||
| Titan Trucking LLC [Member] | Charles B Rizzo [Member] | Customer Two Contracts [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Debt issuance expenses | $ 50,000 | |||||||||||||||||||||||||||||||||||||||||||||||
| Standard Waste Services LLC [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Notes payable | $ 2,859,898 | $ 2,859,898 | ||||||||||||||||||||||||||||||||||||||||||||||
| Share issued | 552,000 | |||||||||||||||||||||||||||||||||||||||||||||||
| Series B Preferred Stock [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Preference stock issuance | 1,568,895 | |||||||||||||||||||||||||||||||||||||||||||||||
| Share issued | 42,220,000 | |||||||||||||||||||||||||||||||||||||||||||||||
| Exchange of shares, value | $ 4,222,000 | |||||||||||||||||||||||||||||||||||||||||||||||
| Warrant [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Share issued | 8,444,000 | |||||||||||||||||||||||||||||||||||||||||||||||
| Warrant [Member] | Series B Preferred Stock [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Exercise price | $ 0.06 | |||||||||||||||||||||||||||||||||||||||||||||||
| Exchange of shares, value | $ 4,222,000 | |||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Share issued | 100 | |||||||||||||||||||||||||||||||||||||||||||||||
| Keystone [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Notes payable | $ 240,000 | $ 240,000 | ||||||||||||||||||||||||||||||||||||||||||||||
| Accrue interest rate (per annum) | 10.00% | 10.00% | ||||||||||||||||||||||||||||||||||||||||||||||
| Converted amount | $ 150,000 | |||||||||||||||||||||||||||||||||||||||||||||||
| Exercise price | $ 0.06 | |||||||||||||||||||||||||||||||||||||||||||||||
| Debt repaid payment | $ 9,000 | |||||||||||||||||||||||||||||||||||||||||||||||
| Total notes payable current | [6] | $ 99,000 | 99,000 | |||||||||||||||||||||||||||||||||||||||||||||
| Gains losses on extinguishment of debt | 242,045 | |||||||||||||||||||||||||||||||||||||||||||||||
| Keystone [Member] | Series B Preferred Stock [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Converted shares | 15,134 | |||||||||||||||||||||||||||||||||||||||||||||||
| Keystone [Member] | Warrant [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Exchange shares | 15,134 | |||||||||||||||||||||||||||||||||||||||||||||||
| Keystone [Member] | Common Stock [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Converted shares | 100 | |||||||||||||||||||||||||||||||||||||||||||||||
| Michaelson Capital [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Debt instrument face amount | 1,657,090 | 1,657,090 | ||||||||||||||||||||||||||||||||||||||||||||||
| Total notes payable current | [7] | 1,657,090 | 2,307,090 | 1,657,090 | 2,307,090 | |||||||||||||||||||||||||||||||||||||||||||
| Interest rate | 16.00% | |||||||||||||||||||||||||||||||||||||||||||||||
| Forbearance fee | $ 10,000 | |||||||||||||||||||||||||||||||||||||||||||||||
| Debt instrument payment terms, description | Additionally, the principal payment schedule of the Michaelson Note was amended as follows: a payment of $750,000 is due on or by August 30, 2024, a payment of $457,089 is due on or by September 30, 2024, and a payment of the remaining outstanding principal is due on or by November 30, 2024. | |||||||||||||||||||||||||||||||||||||||||||||||
| Principal payment | $ 457,089 | $ 750,000 | ||||||||||||||||||||||||||||||||||||||||||||||
| Michaelson Capital [Member] | Titan Trucking LLC [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Debt repaid payment | $ 35,000 | |||||||||||||||||||||||||||||||||||||||||||||||
| Secured promissory note | $ 3,017,090 | |||||||||||||||||||||||||||||||||||||||||||||||
| Interest rate | 12.00% | |||||||||||||||||||||||||||||||||||||||||||||||
| Principal repayments | $ 600,000 | $ 50,000 | 125,000 | 250,000 | ||||||||||||||||||||||||||||||||||||||||||||
| Interest payments | 22,571 | |||||||||||||||||||||||||||||||||||||||||||||||
| Preference stock issuance | $ 50,000 | |||||||||||||||||||||||||||||||||||||||||||||||
| Michaelson Capital [Member] | Standard Waste Services LLC [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Principal repayments | 500,000 | |||||||||||||||||||||||||||||||||||||||||||||||
| Forbearance fee | $ 100,000 | |||||||||||||||||||||||||||||||||||||||||||||||
| Percentage of debt and captial securities | 25.00% | |||||||||||||||||||||||||||||||||||||||||||||||
| Net proceeds | $ 6,000,000.0 | |||||||||||||||||||||||||||||||||||||||||||||||
| Debt instrument capital interest expense | 65,357 | |||||||||||||||||||||||||||||||||||||||||||||||
| Principal repayments | $ 650,000 | |||||||||||||||||||||||||||||||||||||||||||||||
| Michaelson Capital [Member] | Standard Waste Services LLC [Member] | Cash [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Forbearance fee | 50,000 | |||||||||||||||||||||||||||||||||||||||||||||||
| Michaelson Capital [Member] | Series B Preferred Stock [Member] | Standard Waste Services LLC [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Forbearance fee | $ 50,000 | |||||||||||||||||||||||||||||||||||||||||||||||
| Share issued | 5,000 | |||||||||||||||||||||||||||||||||||||||||||||||
| Loanbuilder [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Total notes payable current | [8] | 100,611 | 91,096 | $ 100,611 | 91,096 | |||||||||||||||||||||||||||||||||||||||||||
| Loanbuilder [Member] | Titan Trucking LLC [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Debt repaid payment | 1,545 | |||||||||||||||||||||||||||||||||||||||||||||||
| Principal repayments | 6,046 | |||||||||||||||||||||||||||||||||||||||||||||||
| Individual Notes Payable [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Total notes payable current | [9] | 25,000 | 25,000 | 25,000 | 25,000 | |||||||||||||||||||||||||||||||||||||||||||
| Individual Notes Payable [Member] | Titan Trucking LLC [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Debt instrument face amount | $ 25,000 | |||||||||||||||||||||||||||||||||||||||||||||||
| Interest rate | 12.00% | |||||||||||||||||||||||||||||||||||||||||||||||
| Debt instrument, interest rate increases | 0.50% | |||||||||||||||||||||||||||||||||||||||||||||||
| Kabbage Loans [Member] | Titan Trucking LLC [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Debt instrument face amount | $ 77,748 | $ 120,800 | $ 120,800 | |||||||||||||||||||||||||||||||||||||||||||||
| Debt repaid payment | 35,507 | |||||||||||||||||||||||||||||||||||||||||||||||
| Principal repayments | 3,658 | |||||||||||||||||||||||||||||||||||||||||||||||
| Debt instrument capital interest expense | $ 4,077 | |||||||||||||||||||||||||||||||||||||||||||||||
| Standard Waste Promissory Note (1) [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Debt instrument face amount | 150,000 | 150,000 | ||||||||||||||||||||||||||||||||||||||||||||||
| Debt issuance costs | 245,469 | 245,469 | ||||||||||||||||||||||||||||||||||||||||||||||
| Notes payable | $ 500,000 | |||||||||||||||||||||||||||||||||||||||||||||||
| Debt repaid payment | 5,000 | |||||||||||||||||||||||||||||||||||||||||||||||
| Principal repayments | 175,000 | |||||||||||||||||||||||||||||||||||||||||||||||
| Debt instrument, interest rate after the maturity | 18.00% | |||||||||||||||||||||||||||||||||||||||||||||||
| Amortization of debt | 245,469 | |||||||||||||||||||||||||||||||||||||||||||||||
| Standard Waste Promissory Note (1) [Member] | Subsequent Event [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Debt repaid payment | $ 5,000 | |||||||||||||||||||||||||||||||||||||||||||||||
| Share issued | 3,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||
| Exchange of shares, value | $ 150,000 | |||||||||||||||||||||||||||||||||||||||||||||||
| Share price | $ 0.02 | |||||||||||||||||||||||||||||||||||||||||||||||
| Gains losses on extinguishment of debt | $ 78,933 | |||||||||||||||||||||||||||||||||||||||||||||||
| Standard Waste Promissory Note (2) [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Debt instrument face amount | 149,352 | 149,352 | ||||||||||||||||||||||||||||||||||||||||||||||
| Debt issuance costs | 1,158,562 | 1,158,562 | ||||||||||||||||||||||||||||||||||||||||||||||
| Notes payable | $ 2,359,898 | $ 2,359,898 | ||||||||||||||||||||||||||||||||||||||||||||||
| Debt repaid payment | 6,460 | |||||||||||||||||||||||||||||||||||||||||||||||
| Maturity date | May 15, 2027 | Jul. 15, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||
| Annual interest rate | 13.75% | |||||||||||||||||||||||||||||||||||||||||||||||
| Amortization of debt | 225,276 | |||||||||||||||||||||||||||||||||||||||||||||||
| Titan Holdings 5 [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Debt instrument face amount | $ 100,000 | |||||||||||||||||||||||||||||||||||||||||||||||
| Exercise price | $ 0.06 | |||||||||||||||||||||||||||||||||||||||||||||||
| Interest rate | 10.00% | |||||||||||||||||||||||||||||||||||||||||||||||
| Maturity date | Sep. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||
| Gains losses on extinguishment of debt | 161,391 | |||||||||||||||||||||||||||||||||||||||||||||||
| Debt instrument late fees percentage | 10.00% | |||||||||||||||||||||||||||||||||||||||||||||||
| Warrants to purchase | 10,091 | |||||||||||||||||||||||||||||||||||||||||||||||
| Titan Holdings 5 [Member] | Series B Preferred Stock [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Share issued | 10,091 | |||||||||||||||||||||||||||||||||||||||||||||||
| Titan Holdings 5 [Member] | Common Stock [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Share issued | 100 | |||||||||||||||||||||||||||||||||||||||||||||||
| Glen Miller [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Debt instrument face amount | $ 50,000 | |||||||||||||||||||||||||||||||||||||||||||||||
| Exercise price | $ 0.06 | |||||||||||||||||||||||||||||||||||||||||||||||
| Interest rate | 10.00% | |||||||||||||||||||||||||||||||||||||||||||||||
| Gains losses on extinguishment of debt | 80,689 | |||||||||||||||||||||||||||||||||||||||||||||||
| Debt instrument late fees percentage | 10.00% | |||||||||||||||||||||||||||||||||||||||||||||||
| Warrants to purchase | 5,045 | |||||||||||||||||||||||||||||||||||||||||||||||
| Glen Miller [Member] | Series B Preferred Stock [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Share issued | 5,045 | |||||||||||||||||||||||||||||||||||||||||||||||
| Glen Miller [Member] | Common Stock [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Warrants to purchase | 100 | |||||||||||||||||||||||||||||||||||||||||||||||
| Glen Miller [Member] | Warrants [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Warrants to purchase | 5,045 | |||||||||||||||||||||||||||||||||||||||||||||||
| Collateralized Loans [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||
| Debt | $ 3,300,000 | |||||||||||||||||||||||||||||||||||||||||||||||
| Debt instrument face amount | $ 6,700,000 | $ 3,491,925 | $ 6,700,000 | $ 3,491,925 | ||||||||||||||||||||||||||||||||||||||||||||
| Weighted average interest rate | 10.55% | |||||||||||||||||||||||||||||||||||||||||||||||
| Debt instrument, maturity date description | January 2025 to December 2030 | |||||||||||||||||||||||||||||||||||||||||||||||
| Debt issuance costs | $ 1,611,969 | |||||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||||||
SCHEDULE OF PRINCIPAL MATURITIES OF NOTES PAYABLE (Details) - Loans Payable [Member] |
Dec. 31, 2024
USD ($)
|
|---|---|
| Debt Instrument [Line Items] | |
| 2025 | $ 5,427,261 |
| 2026 | 1,680,427 |
| 2027 | 1,239,613 |
| 2028 | 1,517,001 |
| 2029 | 168,848 |
| Thereafter | 97,151 |
| Total principal payments | 10,130,301 |
| Less: debt discounts | (1,417,328) |
| Total notes payable | $ 8,712,973 |
SCHEDULE OF CONVERTIBLE NOTES PAYABLES (Details) - USD ($) |
Dec. 31, 2024 |
Dec. 31, 2023 |
||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Related Party [Member] | ||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||
| Note payable to related parties | $ 83,551 | $ 17,812 | ||||||||||||||||||
| Convertible notes payable | 480,790 | 724,250 | ||||||||||||||||||
| Current [Member] | ||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||
| Total outstanding principal | 6,279,960 | 3,956,000 | ||||||||||||||||||
| Less: discounts | (1,807,791) | (359,850) | ||||||||||||||||||
| Total notes payable | 4,472,169 | 3,596,150 | ||||||||||||||||||
| Convertible notes payable | 3,991,379 | 2,871,900 | ||||||||||||||||||
| Current [Member] | Related Party [Member] | ||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||
| Convertible notes payable – related parties | 480,790 | 724,250 | ||||||||||||||||||
| Current [Member] | 2023 Bridge Notes [Member] | ||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||
| Convertible notes payable | [1] | 3,146,000 | 3,146,000 | |||||||||||||||||
| Current [Member] | 2024 Bridge Notes [Member] | ||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||
| Convertible notes payable | [2] | 187,500 | ||||||||||||||||||
| Current [Member] | 2024 Non Interest Bearing Bridge Notes [Member] | ||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||
| Convertible notes payable | [3] | 525,000 | ||||||||||||||||||
| Current [Member] | 2024 Convertible Notes [Member] | ||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||
| Convertible notes payable | [4] | 1,548,960 | ||||||||||||||||||
| Current [Member] | Miller Bridge Note [Member] | Related Party [Member] | ||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||
| Note payable to related parties | [5] | 480,000 | 480,000 | |||||||||||||||||
| Current [Member] | Titan Five Bridge Note [Member] | Related Party [Member] | ||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||
| Note payable to related parties | [6] | 120,000 | 120,000 | |||||||||||||||||
| Current [Member] | Celli – Bridge Notes [Member] | Related Party [Member] | ||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||
| Note payable to related parties | [7] | 212,500 | 150,000 | |||||||||||||||||
| Current [Member] | FC Advisory – Bridge note [Member] | Related Party [Member] | ||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||
| Note payable to related parties | [8] | 60,000 | 60,000 | |||||||||||||||||
| Current [Member] | Standard Waste Promissory Note (2) [Member] | Related Party [Member] | ||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||
| Note payable to related parties | [9] | |||||||||||||||||||
| Current [Member] | Standard Waste Promissory Note [Member] | Related Party [Member] | ||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||
| Note payable to related parties | ||||||||||||||||||||
| Non Current [Member] | ||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||
| Total outstanding principal | 2,841,498 | |||||||||||||||||||
| Less: discounts | (573,396) | |||||||||||||||||||
| Total notes payable | 2,268,102 | |||||||||||||||||||
| Convertible notes payable | 455,303 | |||||||||||||||||||
| Non Current [Member] | Related Party [Member] | ||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||
| Convertible notes payable – related parties | 1,812,799 | |||||||||||||||||||
| Non Current [Member] | 2023 Bridge Notes [Member] | ||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||
| Convertible notes payable | [1] | |||||||||||||||||||
| Non Current [Member] | 2024 Bridge Notes [Member] | ||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||
| Convertible notes payable | [2] | |||||||||||||||||||
| Non Current [Member] | 2024 Non Interest Bearing Bridge Notes [Member] | ||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||
| Convertible notes payable | [3] | |||||||||||||||||||
| Non Current [Member] | 2024 Convertible Notes [Member] | ||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||
| Convertible notes payable | [4] | 481,600 | ||||||||||||||||||
| Non Current [Member] | Miller Bridge Note [Member] | Related Party [Member] | ||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||
| Note payable to related parties | [5] | |||||||||||||||||||
| Non Current [Member] | Titan Five Bridge Note [Member] | Related Party [Member] | ||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||
| Note payable to related parties | [6] | |||||||||||||||||||
| Non Current [Member] | Celli – Bridge Notes [Member] | Related Party [Member] | ||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||
| Note payable to related parties | [7] | |||||||||||||||||||
| Non Current [Member] | FC Advisory – Bridge note [Member] | Related Party [Member] | ||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||
| Note payable to related parties | [8] | |||||||||||||||||||
| Non Current [Member] | Standard Waste Promissory Note (2) [Member] | Related Party [Member] | ||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||
| Note payable to related parties | [9] | 2,359,898 | ||||||||||||||||||
| Non Current [Member] | Standard Waste Promissory Note [Member] | Related Party [Member] | ||||||||||||||||||||
| Short-Term Debt [Line Items] | ||||||||||||||||||||
| Note payable to related parties | $ 2,359,898 | |||||||||||||||||||
| ||||||||||||||||||||
SCHEDULE OF PRINCIPAL MATURITIES OF CONVERTIBLE NOTES PAYABLE (Details) - Convertible Notes Payable [Member] |
Dec. 31, 2024
USD ($)
|
|---|---|
| Debt Instrument [Line Items] | |
| 2025 | $ 6,279,960 |
| 2026 | 481,600 |
| 2027 | 2,359,898 |
| Less: debt discounts | (2,381,187) |
| Total notes payable | $ 6,740,271 |
CONVERTIBLE NOTES PAYABLE (Details Narrative) - USD ($) |
12 Months Ended | |
|---|---|---|
Dec. 31, 2024 |
Dec. 31, 2023 |
|
| Short-Term Debt [Line Items] | ||
| Interest expense | $ 6,507 | |
| Convertible Promissory Notes [Member] | ||
| Short-Term Debt [Line Items] | ||
| Interest expense | $ 648,993 | $ 223,846 |
SCHEDULE OF VALUATION ASSUMPTIONS (Details) |
12 Months Ended | |
|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2024
$ / shares
|
|
| Share price | $ 11.60 | |
| Black Scholes Valuation Model [Member] | Measurement Input, Expected Term [Member] | ||
| Expected term (years) | 1 month 13 days | |
| Black Scholes Valuation Model [Member] | Measurement Input, Price Volatility [Member] | ||
| Measurement input | 1,288.16 | |
| Black Scholes Valuation Model [Member] | Measurement Input, Expected Dividend Rate [Member] | ||
| Measurement input | 0.00 | |
| Black Scholes Valuation Model [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||
| Measurement input | 4.79 |
SCHEDULE OF DERIVATIVE LIABILITIES (Details) - USD ($) |
Dec. 31, 2024 |
Dec. 31, 2023 |
|---|---|---|
| Fair value of derivative liabilities | $ 17,500 | |
| Platinum Point Capital, LLC [Member] | ||
| Fair value of derivative liabilities | $ 17,500 |
SCHEDULE OF DERIVATIVE LIABILITIES (Details) (Parenthetical) - shares |
Dec. 31, 2024 |
Jan. 05, 2024 |
|---|---|---|
| Number of warrants issued | 2,750,001 | |
| Platinum Point Capital, LLC [Member] | ||
| Number of warrants issued | 25,000 |
SCHEDULE OF ACTIVITY RELATED TO DERIVATIVE LIABILITIES (Details) - USD ($) |
12 Months Ended | |
|---|---|---|
Dec. 31, 2024 |
Dec. 31, 2023 |
|
| Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
| Derivative liabilities at beginning balance | $ 17,500 | |
| Change in fair value of warrant - derivative liability | 17,500 | $ 41,670 |
| Derivative liabilities at ending balance | $ 17,500 | |
DERIVATIVE LIABILITIES (Details Narrative) - USD ($) |
Feb. 12, 2021 |
Feb. 12, 2024 |
Jan. 05, 2024 |
|---|---|---|---|
| Warrants exercise price | $ 0.55 | ||
| Related derivative liability | $ 0 | ||
| Platinum Point Capital, LLC [Member] | |||
| Warrants granted | 25,000 | ||
| Warrants term | 3 years | ||
| Warrants exercise price | $ 11.60 |
BENEFIT PLAN (Details Narrative) - USD ($) |
3 Months Ended | 12 Months Ended | ||
|---|---|---|---|---|
Dec. 31, 2024 |
Dec. 31, 2023 |
Dec. 31, 2024 |
Dec. 31, 2023 |
|
| Defined Benefit Plan Disclosure [Line Items] | ||||
| Employees defer cost | $ 23,000 | $ 22,500 | ||
| Defined contribution plan percent | 50.00% | |||
| Defined contribution plan, employer matching contribution, percent | 100.00% | |||
| Employer contributions | $ 10,934 | $ 15,116 | ||
| Maximum [Member] | ||||
| Defined Benefit Plan Disclosure [Line Items] | ||||
| Defined contribution plan percent | 3.00% | |||
SCHEDULE OF SERIES B PREFERRED STOCK (Details) |
12 Months Ended |
|---|---|
|
Dec. 31, 2024
USD ($)
| |
| Class of Stock [Line Items] | |
| Net proceeds | $ 3,900,000 |
| Series B Preferred Stock [Member] | |
| Class of Stock [Line Items] | |
| Balance | |
| Net proceeds | 1,568,895 |
| Accretion of 422,200 Series B Preferred Stock due to Offering | 4,168,752 |
| Issuance of 100,592 Series B Preferred Stock due to exchange | 1,307,696 |
| Accretion of 100,592 Series B issuances | 52,088 |
| Issuance of 5,000 Series B Preferred Stock due to extension | 15,000 |
| Series B Preferred Stock conversion of liability | 50,000 |
| Accretion of 5,000 Series B issuances | 3,602 |
| Issuance of 50,453 Series B Preferred Stock | 655,889 |
| Accretion of 50,453 Series B issuances | 25,157 |
| Balance | $ 7,847,079 |
SCHEDULE OF SERIES B PREFERRED STOCK (Details) (Parenthetical) - Series B Preferred Stock [Member] |
12 Months Ended |
|---|---|
|
Dec. 31, 2024
shares
| |
| Class of Stock [Line Items] | |
| Series B Preferred offering, shares | 422,200 |
| Series B Preferred accretion shares | 422,200 |
| Series B Preferred offering one, shares | 100,592 |
| Series B Preferred accretion one, shares | 100,592 |
| Series B Preferred offering two, shares | 5,000 |
| Series B Preferred accretion two, shares | 5,000 |
| Series B Preferred offering, shares | 50,453 |
| Series B Preferred offering, shares | 50,453 |
SCHEDULE OF RESTRICTED STOCK AWARDS ACTIVITY (Details) - $ / shares |
12 Months Ended | |
|---|---|---|
Dec. 31, 2024 |
Dec. 31, 2023 |
|
| Share-Based Payment Arrangement [Abstract] | ||
| Number of shares, nonvested beginning balance | ||
| Weighted average grant date fair value, nonvested beginning balance | ||
| Number of shares, nonvested granted | ||
| Weighted average grant date fair value, nonvested granted | ||
| Number of shares, nonvested vested | (300,000) | |
| Weighted average grant date fair value, nonvested vested | $ 0.01 | |
| Number of shares, nonvested forfeitures | 4,705,000 | |
| Weighted average grant date fair value, nonvested forfeitures | $ 0.01 | |
| Number of shares, nonvested ending balance | ||
| Weighted average grant date fair value, nonvested ending balance | ||
| Weighted average remaining contractual term years, outstanding nonvested | ||
| Number of shares, nonvested assumed due to titan merger vested and unreleased | 1,405,000 | |
| Weighted Average Grant Date Fair Value, Nonvested Beginning balance | $ 0.01 | |
| Number of shares, nonvested assumed due to titan merger unvested | 3,600,000 | |
| Weighted Average Grant Date Fair Value, Nonvested Beginning balance | $ 0.01 | |
| Number of shares, nonvested forfeitures | (4,705,000) | |
SCHEDULE OF STOCK OPTION ACTIVITY (Details) |
12 Months Ended |
|---|---|
|
Dec. 31, 2024
USD ($)
$ / shares
shares
| |
| Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
| Weighted-Average Exercise Price, Outstanding, Ending | $ 0.04 |
| Weighted- Average Remaining Contractual Term, Ending | 5 years |
| Share-Based Payment Arrangement, Option [Member] | |
| Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
| Number of shares, Outstanding beginning balance | shares | |
| Weighted-Average Exercise Price, Outstanding, Beginning | |
| Aggregate Intrinsic Value, Outstanding, Beginning | $ | |
| Number of shares, Options granted | shares | 24,500,000 |
| Weighted-Average Exercise Price Granted | $ 0.04 |
| Weighted- Average Remaining Contractual Term, Ending | 5 years |
| Shares, Expired/Canceled | shares | |
| Weighted-Average Exercise Price, Exercisable Forfeited | |
| Shares, Exercised | shares | |
| Weighted-Average Exercise Price, Exercised | |
| Shares, Outstanding, Ending | shares | 24,500,000 |
| Weighted-Average Exercise Price, Outstanding, Ending | $ 0.04 |
| Weighted- Average Remaining Contractual Term, Ending | 5 years |
| Aggregate Intrinsic Value, Outstanding, Ending | $ | |
| Shares, Exercisable | shares | 24,500,000 |
| Weighted-Average Exercise Price, Exercisable | $ 0.04 |
| Weighted- Average Remaining Contractual Term, Exercisable | 5 years |
| Aggregate Intrinsic Value, Exercisable | $ |
SCHEDULE OF KEY ASSUMPTIONS USED TO VALUE STOCK OPTIONS (Details) |
12 Months Ended |
|---|---|
Dec. 31, 2024 | |
| Share-Based Payment Arrangement [Abstract] | |
| Weighted average expected life in years | 2 years 6 months |
| Expected price volatility | 39.36% |
| Dividend yield | 0.00% |
| Risk-free interest rate | 4.38% |
STOCK-BASED COMPENSATION (Details Narrative) - USD ($) |
12 Months Ended | ||||
|---|---|---|---|---|---|
Sep. 13, 2023 |
Dec. 31, 2024 |
Dec. 31, 2023 |
Jan. 10, 2024 |
Jun. 30, 2023 |
|
| Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
| Number of shares, nonvested vested and unreleased | 2,005,000 | ||||
| Cancellation of restricted stock grants | 1,705,000 | ||||
| Cancellation of unvested shares | 3,000,000 | ||||
| Stock compensation expense | $ 65,293 | $ 5,590,486 | |||
| Unrecognized compensation costs | $ 0 | ||||
| Fair value, vested and unreleased shares | $ 16,439 | ||||
| Share based compensation option vested | 300,000 | ||||
| Share based compensation | $ 65,293 | $ 5,590,486 | |||
| Remaining term | 5 years | ||||
| Exercise price | $ 0.04 | ||||
| Board of Directors Chairman [Member] | |||||
| Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
| Shares issued | 24,500,000 | ||||
| Titan Merger Acquisition [Member] | Series C Preferred Stock [Member] | Chief Executive Officer [Member] | |||||
| Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
| Share based compensation option vested | 70,100 | ||||
| Share based compensation | $ 5,586,796 | ||||
| Restricted Stock [Member] | |||||
| Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
| Stock compensation expense | $ 0 | 5,590,485 | |||
| Unrecognized compensation costs | 0 | ||||
| Fair value, vested | $ 0 | $ 3,510 | |||
| 2023 Plan [Member] | |||||
| Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
| Share based compensation, stock award authorization | 32,500,000 | ||||
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) |
1 Months Ended | 12 Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 07, 2025 |
Feb. 10, 2025 |
Jan. 16, 2025 |
May 31, 2024 |
May 30, 2024 |
Feb. 02, 2024 |
Jul. 17, 2023 |
May 20, 2023 |
Mar. 21, 2023 |
Jul. 31, 2023 |
Dec. 31, 2024 |
Dec. 31, 2023 |
Apr. 01, 2023 |
|
| Loss Contingencies [Line Items] | |||||||||||||
| Consultant fee | $ 3,176,787 | $ 3,123,650 | |||||||||||
| Principal amount | 175,000 | ||||||||||||
| Consulting expenses | $ 236,250 | ||||||||||||
| Series A Preferred Stock [Member] | |||||||||||||
| Loss Contingencies [Line Items] | |||||||||||||
| Shares issued | 7,000,000 | ||||||||||||
| Damages from Product Defects [Member] | |||||||||||||
| Loss Contingencies [Line Items] | |||||||||||||
| Loss contingency, damages sought, value | $ 324,000 | ||||||||||||
| Dominic Campo And Sharon Campo [Member] | |||||||||||||
| Loss Contingencies [Line Items] | |||||||||||||
| Business combination description | The first consulting agreement commences on June 1, 2024 and has a term of five years. In exchange for consulting services provided, the consultant is to receive a monthly retainer of $23,333. In the event that the consultant meets their demise during the term of the agreement, the retainer shall be reduced to $11,667 per month. The second consulting agreement commenced on June 4, 2024 and has a term of five years. In exchange for consulting services provided, the consultant is to receive a monthly retainer of $10,417. | ||||||||||||
| Standard Waste Services LLC [Member] | |||||||||||||
| Loss Contingencies [Line Items] | |||||||||||||
| Shares issued | 552,000 | ||||||||||||
| Standard Waste Services LLC [Member] | Series A Preferred Stock [Member] | |||||||||||||
| Loss Contingencies [Line Items] | |||||||||||||
| Shares issued | 612,000 | 90,000 | 612,000 | ||||||||||
| Stock Issued During Period, Shares, Other | 60,000 | ||||||||||||
| Related Party [Member] | |||||||||||||
| Loss Contingencies [Line Items] | |||||||||||||
| Other Liabilities | $ 83,551 | 17,812 | |||||||||||
| Related party vendor | 120,201 | 20,670 | |||||||||||
| Consultant [Member] | |||||||||||||
| Loss Contingencies [Line Items] | |||||||||||||
| Related party consulting expense | 0 | 30,767 | |||||||||||
| Detroit Michigan [Member] | |||||||||||||
| Loss Contingencies [Line Items] | |||||||||||||
| Lease term | 60 months | ||||||||||||
| Subsequent Event [Member] | |||||||||||||
| Loss Contingencies [Line Items] | |||||||||||||
| Shares issued | 500,000 | ||||||||||||
| Stock Issued During Period, Shares, Other | 9,434,221 | ||||||||||||
| March 2023 Agreement [Member] | |||||||||||||
| Loss Contingencies [Line Items] | |||||||||||||
| Description of nature and terms of commitment | As consideration, the Company agreed to pay the consultant a monthly fee of $10,000 through the course of the three-year term of the agreement. Upon reaching the maturity, both parties may agree to an optional one-year term extension. Additionally, the Company agreed to pay the consultant a success fee equal to: (1) one percent (1%) of the purchase price paid by the Company to acquire an enterprise engaged in the business of hauling, transportation, waste brokerage, and recycling, (2) two percent (2%) of the purchase price paid by the Company for all stand-alone landfills and transfer stations, (3) one percent (1%) of the revenue received by the Company, for a twelve month period commencing upon execution, for all municipal or large commercial contracts, and 4) one and twenty-five hundredths percent (1.25%) of the purchase price received by the Company for transfer stations associated with a professionally recognized hauling company | ||||||||||||
| Consultant fee | $ 10,000 | ||||||||||||
| Consulting agreements initial term | 3 years | ||||||||||||
| Consulting agreements extension term | 1 year | ||||||||||||
| Accounts payable balance | 230,000 | ||||||||||||
| Recognized expenses | 170,000 | 100,000 | |||||||||||
| Settlement Agremment [Member] | Subsequent Event [Member] | |||||||||||||
| Loss Contingencies [Line Items] | |||||||||||||
| Amount owed | $ 3,000 | ||||||||||||
| Principal amount | $ 70,000 | ||||||||||||
| Number of common stock issued | 1,500,000 | ||||||||||||
| May 2023 Agreement [Member] | |||||||||||||
| Loss Contingencies [Line Items] | |||||||||||||
| Description of nature and terms of commitment | As consideration, the Company agreed to pay a monthly retainer of $19,950 and an acquisition bonus on any acquisition by the Company of a third-party business. The acquisition bonus will be calculated as equal to: (1) two and ninety-five hundredths percent (2.95%) of the first $50,000,000 of consideration paid for the acquisition, (2) one and seventy-five hundredths percent (1.75%) of the next $150,000,000 of consideration paid for the acquisition, and (3) one and twenty-five hundredths percent (1.25%) of the consideration paid for the acquisition over the first $200,000,000 paid. | ||||||||||||
| Consulting agreements initial term | 2 years | ||||||||||||
| Consulting agreements extension term | 1 year | ||||||||||||
| Related party consulting expense | 418,711 | 159,600 | |||||||||||
| Related party accounts payable | $ 0 | $ 99,750 | |||||||||||
SCHEDULE OF EARNINGS PER SHARE ANTI DILUTIVE (Details) - shares |
12 Months Ended | |||
|---|---|---|---|---|
Dec. 31, 2024 |
Dec. 31, 2023 |
|||
| Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
| Total common stock equivalents | 261,499,770 | 65,698,734 | ||
| Series A Preferred Stock [Member] | ||||
| Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
| Total common stock equivalents | 139,790,000 | |||
| Series C Preferred Stock [Member] | ||||
| Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
| Total common stock equivalents | [1] | 63,090,000 | ||
| Warrant [Member] | ||||
| Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
| Total common stock equivalents | 97,209,770 | 2,608,734 | ||
| Equity Option [Member] | ||||
| Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
| Total common stock equivalents | 24,500,000 | |||
| ||||
SCHEDULE OF INCOME TAX (BENEFIT) PROVISION (Details) - USD ($) |
12 Months Ended | |
|---|---|---|
Dec. 31, 2024 |
Dec. 31, 2023 |
|
| Income Tax Disclosure [Abstract] | ||
| Federal | ||
| State | ||
| Foreign | ||
| Total current provision | ||
| Federal | (4,615,110) | (674,213) |
| State | (542,062) | (265,698) |
| Foreign | ||
| Total deferred benefit | (5,157,172) | (939,911) |
| Change in valuation allowance | 5,157,172 | 939,911 |
| Total income tax provision | ||
SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION (Details) |
12 Months Ended | |
|---|---|---|
Dec. 31, 2024 |
Dec. 31, 2023 |
|
| Income Tax Disclosure [Abstract] | ||
| Federal income taxes at statutory rate | 21.00% | 21.00% |
| State income taxes at statutory rate | 2.51% | 0.45% |
| Acquisitions and disposals | 3.69% | 0.10% |
| Loss on extinguishment of debt | (0.78%) | (16.44%) |
| Goodwill impairment | (4.71%) | (2.35%) |
| Stock based compensation | 0.00% | (0.79%) |
| Tax basis adjustments | (0.21%) | (1.00%) |
| Change in valuation allowance | (23.84%) | (0.63%) |
| Other | 2.35% | (0.34%) |
| Totals | 0.00% | 0.00% |
SCHEDULE OF DEFERRED TAX ASSETS (Details) - USD ($) |
Dec. 31, 2024 |
Dec. 31, 2023 |
|---|---|---|
| Effective Income Tax Rate Reconciliation [Line Items] | ||
| Net operating losses and other tax attributes | $ 26,300,000 | $ 14,900,000 |
| Domestic Tax Jurisdiction [Member] | ||
| Effective Income Tax Rate Reconciliation [Line Items] | ||
| Net operating losses and other tax attributes | 11,140,078 | 5,016,200 |
| Other | 13,351 | 32,759 |
| Total deferred tax assets | 11,153,429 | 5,048,958 |
| Depreciation and amortization | (1,499,337) | (552,039) |
| Total deferred tax liabilities | (1,499,337) | (552,039) |
| Less: Valuation allowance | (9,654,091) | (4,496,919) |
| Net deferred tax assets |
PROVISION FOR INCOME TAXES (Details Narrative) - USD ($) |
Dec. 31, 2024 |
Dec. 31, 2023 |
|---|---|---|
| Income Tax Disclosure [Abstract] | ||
| Deferred tax asset operating loss carryforward | $ 26,300,000 | $ 14,900,000 |
| Operating loss carryforward | 1,300,000 | |
| Operating loss carryforward expire in 2029 | 25,000,000.0 | |
| Valuation allowance increased | 5,200,000 | $ 4,500,000 |
| Uncertain tax positions | $ 0 |
SUBSEQUENT EVENTS (Details Narrative) - USD ($) |
1 Months Ended | 12 Months Ended | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Apr. 15, 2025 |
Mar. 07, 2025 |
Mar. 06, 2025 |
Mar. 04, 2025 |
Feb. 21, 2025 |
Feb. 10, 2025 |
Jan. 16, 2025 |
Jan. 06, 2025 |
Oct. 31, 2024 |
Jan. 31, 2025 |
Dec. 31, 2024 |
Dec. 31, 2023 |
Apr. 07, 2025 |
Mar. 14, 2025 |
Feb. 28, 2025 |
Jan. 10, 2024 |
|
| Subsequent Event [Line Items] | ||||||||||||||||
| Prefered stock shares authorized | 25,000,000 | 25,000,000 | 25,000,000 | |||||||||||||
| Prefered stock stated value | $ 0.0001 | |||||||||||||||
| Convertible notes | $ 150,000 | $ 2,595,000 | ||||||||||||||
| Maturity date | Dec. 31, 2024 | |||||||||||||||
| Principal amount | 175,000 | |||||||||||||||
| Proceeds | 2,520,029 | 870,993 | ||||||||||||||
| Notes payable | 3,798,515 | 434,542 | ||||||||||||||
| Related Party [Member] | ||||||||||||||||
| Subsequent Event [Line Items] | ||||||||||||||||
| Related party vendor | 120,201 | $ 20,670 | ||||||||||||||
| Michaelson Note [Member] | Forecast [Member] | ||||||||||||||||
| Subsequent Event [Line Items] | ||||||||||||||||
| Debt instrument, periodic payment | $ 967,090 | |||||||||||||||
| Interest payment | $ 21,761 | |||||||||||||||
| Interest payment | 50,000 | |||||||||||||||
| Principal obligation | $ 165,000 | |||||||||||||||
| Subsequent Event [Member] | ||||||||||||||||
| Subsequent Event [Line Items] | ||||||||||||||||
| Prefered stock shares authorized | 6,500,000 | |||||||||||||||
| Prefered stock stated value | $ 0.0001 | $ 2.40 | ||||||||||||||
| Preferred stock description | (x) the stated value of the Series C Preferred Stock being converted plus all accrued but unpaid dividends, divided by (y) $0.05 per share (the “Conversion Price”); provided, however, that holders of Series C Preferred will not be able to convert shares of Series C Preferred Stock and receive shares of Common Stock upon such conversion to the extent that after giving effect to such issuance, the holder and such holder’s affiliates would beneficially own in excess of 4.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of the shares of Common Stock issuable upon conversion of the applicable shares of Series C Preferred Stock (the “Beneficial Ownership Limitation”). | |||||||||||||||
| Prefered stock share price | $ 2.00 | |||||||||||||||
| Shares issued | 500,000 | |||||||||||||||
| NUmber of shares issued, value | $ 1,000,000 | |||||||||||||||
| Shares issued, exchange | 9,434,221 | |||||||||||||||
| Related party, paid in kind payment | $ 99,800 | |||||||||||||||
| Proceeds | $ 7,500,000 | |||||||||||||||
| Repayments of debt | 6,679,365 | |||||||||||||||
| Cash received | 638,891 | |||||||||||||||
| Accounts payable | $ 200,250 | |||||||||||||||
| Purchase of receivables | 179,880 | |||||||||||||||
| Purchase price | $ 120,000 | |||||||||||||||
| Notes payable | $ 179,880 | |||||||||||||||
| Subsequent Event [Member] | Convertible Notes Exchange Agreements [Member] | ||||||||||||||||
| Subsequent Event [Line Items] | ||||||||||||||||
| Maturity date | May 31, 2025 | |||||||||||||||
| Debt instrument description | Additionally, it was agreed that immediately prior to an underwritten public offering of the company’s common stock on certain public stock exchanges, each of the notes would be exchanged into a number of shares of the Company’s common stock equal to (i) the sum of (a) the aggregate principal of the notes as of February 9, 2025, (b) plus all interest accrued thereon as of February 9, 2025, (ii) multiplied by 1.4, (iii) plus all interest accrued on the Notes from February 9, 2025 through and including the date of the public offering, (iv) divided by the lesser of (a) $0.05 or (b) 100% of the price per share at which the Common Stock is sold in the public offering (Note 10 – Convertible Notes). | |||||||||||||||
| Subsequent Event [Member] | Settlement Agremment [Member] | ||||||||||||||||
| Subsequent Event [Line Items] | ||||||||||||||||
| Amount owed | $ 3,000 | |||||||||||||||
| Principal amount | $ 70,000 | |||||||||||||||
| Number of common stock issued | 1,500,000 | |||||||||||||||
| Subsequent Event [Member] | 2023 Bridge Notes [Member] | Convertible Notes Exchange Agreements [Member] | ||||||||||||||||
| Subsequent Event [Line Items] | ||||||||||||||||
| Convertible notes | $ 2,036,000 | |||||||||||||||
| Subsequent Event [Member] | Celli Bridge Notes [Member] | Convertible Notes Exchange Agreements [Member] | ||||||||||||||||
| Subsequent Event [Line Items] | ||||||||||||||||
| Convertible notes | 212,500 | |||||||||||||||
| Subsequent Event [Member] | FC Advisory Bridge Notes [Member] | Convertible Notes Exchange Agreements [Member] | ||||||||||||||||
| Subsequent Event [Line Items] | ||||||||||||||||
| Convertible notes | $ 60,000 | |||||||||||||||
| Subsequent Event [Member] | Michaelson Note [Member] | ||||||||||||||||
| Subsequent Event [Line Items] | ||||||||||||||||
| Debt instrument, periodic payment | $ 165,000 | |||||||||||||||
| Interest payment | $ 21,761 | $ 21,761 | ||||||||||||||