UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K/A

(AMENDMENT NO. 1)

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): May 19, 2023

 

TRAQIQ, INC.

(Exact name of registrant as specified in charter)

 

California   000-56148   30-0580318

(State or other Jurisdiction of

Incorporation or Organization)

  

(Commission

File Number)

  

(IRS Employer

Identification No.)

 

1931 Austin Drive

Troy, Michigan

   48083
(Address of Principal Executive Offices)   (zip code)

 

(248) 775-7400

(Registrant’s telephone number, including area code)

 

14205 SE 37th Street, Suite 100, Bellevue, WA 98006

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of registrant under any of the following provisions:

 

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
   
☐ Soliciting material pursuant to Rule 14a-12(b) under the Exchange Act (17 CFR 240.14a-12(b))
   
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
Common Stock, par value $.0001 per share   TRIQ   OTC QB

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 

 

 

EXPLAINATORY NOTE

 

On May 19, 2023, TraQiQ, Inc. (the “Company”) filed a Current Report on Form 8-K (the “Original Form 8-K”) to report the consummation of its acquisition of Titan Trucking, LLC, a Michigan limited liability company (“Titan”). This Amendment No. 1 to the Original Form 8-K amends and supplements Item 9.01 of the Original Form 8-K to provide the historical audited financial statements of Titan and the unaudited pro form condensed combined financial information of the Company pursuant to Items 9.01(a) and 9.01(b) of Form 8-K that were excluded from the Original Form 8-K in reliance on the instructions to such items. Except as noted in this paragraph, no other information contained in the Original Form 8-K is amended or supplemented.

 

Item 9.01. Financial Statements and Exhibits.

 

(a) Financial Statements of Business Acquired

 

The financial statements for Titan required by Item 9.01(a) of Form 8-K are attached as Exhibit 99.1 and Exhibit 99.2 to this Amendment No.1 and incorporated herein by reference.

 

(b) Pro Forma Financial Information

 

The unaudited pro forma condensed financial information for the Company required by Item 9.01(b) of Form 8-K is attached as Exhibit 99.3 to this Amendment No. 1 to the Original Form 8-K and incorporated herein by reference.

 

(c) Not applicable.

 

(d) Exhibits. The exhibits listed in the exhibit index below are being filed herewith.

 

EXHIBIT INDEX

 

Exhibit

Number

   Description
     
23.1   Consent of Freed Maxick CPAs, P.C., Independent Auditor for Titan Trucking, LLC and Subsidiary.
     
99.1   The audited Financial Statements of Titan Trucking, LLC and Subsidiary as of and for the years ended December 31, 2022 and 2021, and the related notes thereto.
     
99.2   The unaudited Financial Statements of Titan Trucking, LLC and Subsidiary as of and for the three months ended March 31, 2023, and the related notes thereto.
     
99.3   The unaudited Pro Forma Condensed Combined Financial Information of TraQiQ, Inc. as of and for the three months ended March 31, 2023, and the year ended December 31, 2022, and the related notes thereto.
     
104   Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

2
 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: November 16, 2023 TRAQIQ, INC.
     
  By: /s/ Glen Miller
    Glen Miller
    Chief Executive Officer

 

3

 

 

Exhibit 23.1

 

CONSENT OF INDEPENDENT AUDITOR

 

We consent to the use in this Current Report on Form 8-K/A of TraQiQ, Inc. of our report for Titan Trucking, LLC and Subsidiary dated September 28, 2023, which includes an explanatory paragraph as to Titan Trucking, LLC and Subsidiary’s ability to continue as a going concern, relating to the consolidated financial statements of Titan Trucking, LLC and Subsidiary as of and for the years ended December 31, 2022 and 2021, appearing in this Current Report on Form 8-K/A.

 

/s/ Freed Maxick CPAs, P.C.

 

Buffalo, New York

November 16, 2023

 

 

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Exhibit 99.1

 

TITAN TRUCKING, LLC, AND SUBSIDIARY

 

A LIMITED LIABILTY COMPANY

 

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

 

DECEMBER 31, 2022 AND 2021

 

 

 

 

C O N T E N T S

 

  Pages
REPORT OF INDEPENDENT REGISTERED ACCOUNTING FIRM 1-2
   
CONSOLIDATED BALANCE SHEETS 3
   
CONSOLIDATED STATEMENTS OF OPERATIONS 4
   
CONSOLIDATED STATEMENT OF MEMBERS’ EQUITY (DEFICIENCY) 5
   
CONSOLIDATED STATEMENTS OF CASH FLOWS 6
   
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 7-16

 

 

 

 

Report of Independent Registered Public Accounting Firm

 

To the Members of Titan Trucking, LLC and Subsidiary (A Limited Liability Company):

 

Opinion on the Financial Statements

 

We have audited the accompanying consolidated balance sheets of Titan Trucking, LLC and Subsidiary (A Limited Liability Company) (the Company) as of December 31, 2022 and 2021, the related consolidated statements of operations, changes in members’ 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, 2022 and 2021 and the results of their operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

 

Emphasis of Matter – Going Concern

 

The accompanying consolidated 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 suffered recurring losses from operations and its total current liabilities exceed its total current assets. This raises substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters also are described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

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 and in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits 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 provides a reasonable basis for our opinion.

 

1

 

 

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.

 

Critical Audit Matter Description

 

As described in Notes 5 and 6 to the financial statements, on June 10, 2022 and December 9, 2022, the Company completed acquisitions of Century Waste Management and WTI Global, Inc., respectively. The transactions were accounted for as asset acquisitions (the “Acquisitions”). The net assets acquired were recorded at fair value and included vehicles and equipment from Century Waste Management and a customer list intangible from WTI Global, Inc.

 

Auditing the Company’s accounting for these Acquisitions was complex due to the judgement involved in evaluating whether the Acquisitions met the criteria of a business combination or an asset acquisition among other accounting considerations. The subjective considerations included whether substantially all the fair value of the gross assets acquired was concentrated in a single identifiable asset or group of similar identifiable assets.

 

How the Critical Matter Was Addressed in the Audits

To test the Company’s accounting for the Acquisitions, we performed the following audit procedures:

 

  ● We evaluated the Company’s application of the relevant accounting guidance under ASC Topic 805 – Business Combinations.
  ● We obtained and read the relevant asset purchase agreements and assessed the completeness and accuracy of the net assets acquired.
  ● We recalculated the fair value of the consideration paid in the Acquisitions.
  ● We evaluated the reasonableness of the valuation methodologies used to arrive at the fair value of the acquired assets.
  ● We assessed the appropriateness of the related disclosures in the financial statements.

 

/s/ Freed Maxick CPAs, P.C.

 

We have served as the Company’s auditor since 2023.

 

Buffalo, New York

September 28, 2023

 

2

 

 

TITAN TRUCKING, LLC AND SUBSIDIARY

A LIMITED LIABILITY COMPANY

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2022 AND 2021

 

   DECEMBER 31,
2022		   DECEMBER 31,
2021		 
ASSETS          
Current Assets:          
Cash  $26,650   $33,579 
Accounts receivable, net   517,583    413,723 
Subscriptions receivable   200,000    - 
Other receivables   1,241    426,016 
Prepaid expenses and other current assets   128,689    88,314 
Total Current Assets   874,163    961,632 
           
Property and equipment, net   5,643,941    3,160,179 
Intangible assets, net   687,500    - 
Other assets   8,251    8,251 
Operating lease right-of-use asset, net   194,112    276,370 
Total Non-current Assets   6,533,804    3,444,800 
           
TOTAL ASSETS  $7,407,967   $4,406,432 
           
LIABILITIES AND MEMBERS’ EQUITY (DEFICIENCY)          
           
LIABILITIES          
Current Liabilities:          
Accounts payable and accrued expenses  $736,658   $373,647 
Accrued payroll and related taxes   50,983    33,039 
Notes payable, net of deferred financing costs   1,098,158    1,244,206 
Notes payable, net – related parties   -    3,660,864 
Operating lease liability   95,243    85,303 
Total Current Liabilities   1,981,042    5,397,059 
           
Long-term notes, net of deferred financing costs   2,785,531    837,219 
Operating lease liability, net of current portion   115,290    210,533 
Total Non-current Liabilities   2,900,821    1,047,752 
           
Total Liabilities   4,881,863    6,444,811 
           
MEMBERS’ EQUITY (DEFICIENCY)          
Members’ equity (deficiency)   2,526,104    (2,038,379)
           
Total Members’ Equity (Deficiency)   2,526,104    (2,038,379)
           
TOTAL LIABILITIES AND MEMBERS’ EQUITY (DEFICIENCY)  $7,407,967   $4,406,432 

 

The accompanying notes to the financial statements are an integral part of these statements.

 

3

 

 

TITAN TRUCKING, LLC AND SUBSIDIARY

A LIMITED LIABILITY COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

 

   2022   2021 
   For the Years Ended December 31, 
   2022   2021 
         
REVENUE  $4,203,112   $3,315,256 
COST OF REVENUES   4,207,852    3,317,225 
GROSS LOSS   (4,740)   (1,969)
           
OPERATING EXPENSES:          
Salaries and salary related costs   475,512    395,395 
Professional fees   265,575    30,503 
General and administrative expenses   359,175    237,243 
           
Total Operating Expenses   1,100,262    663,141 
           
OPERATING LOSS   (1,105,002)   (665,110)
           
OTHER INCOME (EXPENSE):          
Interest expense, net of interest income   (199,453)   (140,812)
Loss on sale of assets   (168,208)   (262,264)
Employee Retention Credits   -    422,845 
Forgiveness of Paycheck Protection Program loans   812,305    - 
Other income   1,696    57,291 
Total other income (expense)   446,340    77,060 
           
NET LOSS  $(658,663)  $(588,050)
           
LOSS PER UNIT (BASIC AND DILUTED)          
Weighted-average units outstanding   100    100 
Net loss per unit  $(6,587)  $(5,881)

 

The accompanying notes to the financial statements are an integral part of these statements.

 

4

 

 

TITAN TRUCKING, LLC AND SUBSIDIARY

A LIMITED LIABILITY COMPANY

CONSOLIDATED STATEMENT OF CHANGES IN MEMBERS’ EQUITY (DEFICIENCY)

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

 

   Members’ Equity
(Deficiency)		 
Balance – January 1, 2021  $(1,450,329)
      
Net loss   (588,050)
      
Balance – December 31, 2021   (2,038,379)
      
Contributions   5,223,146 
      
Net loss   (658,663)
      
Balance – December 31, 2022  $2,526,104 

 

The accompanying notes to the financial statements are an integral part of these statements.

 

5

 

 

TITAN TRUCKING, LLC AND SUBSIDIARY

A LIMITED LIABILITY COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

 

   2022   2021 
   FOR THE YEARS ENDED DECEMBER 31, 
   2022   2021 
CASH FLOW FROM OPERATING ACTIVITIES          
Net loss  $(658,663)  $(588,050)
Adjustments to reconcile net loss to net cash (used in) operating activities:          
Employee Retention Credits   -    (422,845)
Forgiveness of PPP loans   (812,305)   - 
Bad debt expense   77,690    - 
Depreciation and amortization   325,382    304,175 
Loss on sale of property and equipment   168,208    262,264 
Amortization of loan origination fees   6,663    - 
Change in assets and liabilities:          
Accounts receivable   (181,549)   (63,873)
Prepaid expenses and other current assets   (40,374)   (7,812)
Other receivables   424,775    - 
Other assets   -    3,800 
Operating lease right-of-use asset   82,258    76,179 
Accounts payable and accrued expenses   363,010    (9,188)
Accrued payroll and payroll taxes   17,944    14,862 
Operating lease liability   (85,303)   (76,172)
Total adjustments   580,761    (62,204)
Net cash used in operating activities   (312,264)   (506,660)
           
CASH FLOWS FROM INVESTING ACTIVITIES          
Acquisition of property and equipment   (3,349,628)   (47,177)
Disposal of property and equipment   371,819    211,965 
Net cash provided by (used in) investing activities   (2,977,809)   164,788 
           
CASH FLOWS FROM FINANCING ACTIVITIES          
Loan origination fees   (99,950)   - 
Proceeds from notes payable   4,398,833    1,806,332 
Repayments of notes payable   (1,015,739)   (1,486,279)
Net cash provided by financing activities   3,283,144    320,053 
           
NET DECREASE IN CASH   (6,929)   (21,819)
           
CASH – BEGINNING OF YEAR   33,579    55,398 
           
CASH – END OF YEAR  $26,650   $33,579 
           
CASH PAID DURING THE YEAR FOR:          
Interest expense  $219,404   $112,423 
SUPPLEMENTAL NON-CASH DISCLOSURES OF CASH FLOW:          
Member contributions in exchange for loans payable  $4,505,646   $- 
Subscription receivable in exchange for equity  $200,000   $- 
Member contributions in exchange for intangible asset purchase  $517,500   $- 
Note payable in exchange for intangible asset purchase  $170,000   $- 

 

The accompanying notes to the financial statements are an integral part of these statements.

 

6

 

 

TITAN TRUCKING, LLC AND SUBSIDIARY

A LIMITED LIABILITY COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

 

NOTE 1 – ORGANIZATION AND NATURE OF OPERATIONS

 

Business Operations

 

Titan Trucking, LLC (the “Company”) was incorporated in the State of Michigan on January 26, 2017. The Company was formed as a limited liability company. The registered business address is located at 51512 Industrial Drive, New Baltimore, Michigan 48047.

 

The Company is engaged in the full-service solution of waste management. The Company offers a comprehensive package of waste reduction, collection, recycling, and technology-enabled solutions to support customer demand.

 

Senior Trucking, LLC (“Senior’) was established on March 14, 2017 with 100% ownership by the single member of Titan Trucking, LLC (“Titan”). Senior was formally acquired by Titan on April 5, 2020. Senior has operated exclusively under the management and assets of Titan since inception.

 

Going Concern

 

The Company’s consolidated financial statements as of December 31, 2022 and 2021, are prepared using accounting principles generally accepted in the United States of America (“U.S. 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, 2022, the Company had a net loss of $658,663 ($588,050 in 2021). The working capital of the Company had a deficit of $1,106,879 for the year ended December 31, 2022 (deficit of $4,435,427 in 2021). Additionally, the Company used cash of $312,264 related to its operating activities during the year ended December 31, 2022. The Company had a cash balance of $26,650 as of December 31, 2022. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of time within one year after the date that the financial statements are issued. The Company continues to shrink its working capital deficit year-over-year and has been able to continually meet the working capital needs of the business as they come due.

 

Management’s plans include raising capital through issuances of equity and debt securities and minimizing operating expenses of the business to improve the Company’s cash burn rate, in conjunction with the TraqIQ reverse-merger (Note 13). The combined companies, subsequent to the reverse merger, have been successful in attracting substantial capital from investors interested in the current public status of the Company, which has been used to support its ongoing cash outlays. In the second half of the year ended 2023, TraqIQ, its new legal parent company, obtained approximately $1 million in cash from private investors and believes, but cannot guarantee, it will continue to be able to attract capital from outside sources as it pursues a move to a national exchange. The Company has engaged a qualified investment bank to assist in its uplifting and simultaneous raise of capital. Additionally, the Company’s revenues continue to grow, and management expects the Company to shrink its net losses over the upcoming quarters through organic and acquisitive growth.

 

7

 

 

TITAN TRUCKING, LLC AND SUBSIDIARY

A LIMITED LIABILITY COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

 

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 U.S. GAAP and the regulations of the United States Securities and Exchange Commission. The Company adopted a December 31 fiscal year-end for financial statement reporting purposes.

 

The consolidated financial statements and accompanying notes are the representations of the Company’s management, who are responsible for their integrity and objectivity. In their opinion, such financial information is presented fairly and for all periods represented.

 

Principles of Consolidation

 

The consolidated financial statements include the accounts of Titan Trucking LLC and Senior Trucking LLC, its wholly owned affiliate. All material inter-company accounts and transactions have been eliminated.

 

Basis of Accounting

 

The Company’s policy is to prepare its combined 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 in the United States of America 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 FASB Accounting Standards Codification (“ASC”) 805, if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asst 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 assts 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.

 

8

 

 

TITAN TRUCKING, LLC AND SUBSIDIARY

A LIMITED LIABILITY COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

 

Cash and cash equivalents

 

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. At December 31, 2022, the Company had no amounts above this amount.

 

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 writes off bad debts as they occur during the year. As of the year ended December 31, 2022, the Company allocated $77,690 to the allowance for doubtful accounts. There was no allowance for the year ended December 31, 2021.

 

Subscriptions Receivable

 

Subscription receivable consists of members’ equity that have been issued with subscriptions that have not yet been settled. As of December 31, 2022 and 2021, there were $200,000 and nil, respectively, in subscriptions that had not yet settled. All these funds were settled in January of 2023, prior to the filing of this report. Subscriptions receivable are carried at cost which approximates fair value.

 

Property and Equipment, net

 

Property and equipment are 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 consolidated statement of operations or the period in which the disposal occurred. The Company utilizes a useful life ranging from 5 to 25 years for its trailers, tractors, shop equipment, leasehold improvements, and containers.

 

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, 2022.

 

Finite Intangible Assets, net

 

Finite intangible assets are recorded at their estimated fair value at the date of acquisition. They are amortized on a straight-line basis over their estimated useful lives. Management annually evaluates the estimated remaining useful lives of the intangible assets to determine whether events or changes in circumstances warrant a revision to the remaining period of amortization. The Company acquired the finite intangible asset, customer lists, as part of the asset acquisition of WTI Global, Inc. Customer lists are amortized over a remaining useful life of 10 years as determined by management.

 

9

 

 

TITAN TRUCKING, LLC AND SUBSIDIARY

A LIMITED LIABILITY COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

 

Finite-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 no impairment write-down would be necessary for the finite-lived intangible assets as of December 31, 2022.

 

Fair Value of Financial Instruments

 

The Company’s financial instruments primarily consist of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, and short-term notes payable. As of the consolidated balance sheet dates, the estimated fair values of the financial instruments were not materially different from their carrying values as presented due to the short maturities of these instruments.

 

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 or liability.

 

The Company has elected to apply the practical expedient to not separate the lease and non-lease components of a contract, which ultimately results in a higher amount of total lease payments being included within the present value calculation of the lease liability.

 

Loan Origination Fees

 

Loan origination fees represent loan fees relating to notes granted to the Company and are amortized over the life of the note. Amortization expense for the year ended December 31, 2022 was $6,663. The net amount of $93,745 was netted against the outstanding long-term debt.

 

Revenue Recognition

 

The Company records revenue based on a five-step model in accordance with 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.

 

10

 

 

TITAN TRUCKING, LLC AND SUBSIDIARY

A LIMITED LIABILITY COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

 

The Company’s operating revenues are primarily generated from fees charged for the collection and disposal of waste. Revenues are recognized at a point in time immediately after completion of disposal of waste at a landfill or transfer station and billed out to customers. Rates charged for services performed are usually based on pre-negotiated amounts via contractual obligations and are billed on a performance satisfaction basis via invoice. Invoices usually contain a payment term of net 30 days. There are no significant financing operations with customers in relation to revenues generated and collected.

 

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.

 

Concentration Risk

 

The Company performs a regular review of customer activity and associated credit risks.

 

During the year ended December 31, 2022, one customer accounted for more than 63% of accounts receivable. During the year ended December 31. 2021, two customers accounted for more than 77% of total accounts receivable.

 

During the year ended December 31, 2022, three customers accounted for more than 76% of total revenues generated. During the year ended December 31, 2021, three customers accounted for more than 77% of total revenues generated.

 

The Company maintains positive customer relationships and continually expands its customer base, mitigating the impact of any potential concentration risks that exist.

 

Basic and Diluted Loss per Unit

 

The Company presents both basic and diluted earnings per unit for the periods presented in the consolidated financial statements. Basic and diluted loss per unit is calculated by dividing the net loss attributable to the Company by the weighted average number of units outstanding during the periods presented.

 

Income Taxes

 

The Company, with consent from its members, has elected under the Internal Revenue Code to be an “S” corporation. In lieu of corporation income taxes, the shareholders of an “S” corporation are taxed on their proportionate share of the Company’s taxable income.

 

Advertising and Marketing Costs

 

Costs associated with advertising are charged to expense as occurred. For the years ended December 31, 2022 and 2021, the advertising and marketing costs were $11,336 and $3,394, respectively.

 

11

 

 

TITAN TRUCKING, LLC AND SUBSIDIARY

A LIMITED LIABILITY COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

 

Recently Issued Accounting Standards

 

In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments.” This amendment replaces the incurred methodology in current GAAP with a methodology that reflects expected credit losses on instruments within its scope, including trade receivables. This update is intended to provide financial statement users with more decision-useful information about the expected credit losses. In November 2019, the FASB issued No. 2019-10, Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842), which deferred the effective date of ASU 2016-13 for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company does not expect a material impact from the adoption of ASU 2016-13 on the consolidated financial statements.

 

NOTE 4 - OTHER RECEIVABLES

 

SCHEDULE OF OTHER RECEIVABLES 

   December 31,
2022		   December 31,
2021		 
Employee retention credit (1)  $-   $422,845 
Other receivables   1,241    3,171 
Total  $1,241   $426,016 

 

(1)During 2021, the Company applied for the Employee Retention Credits (“ERC”) in the amount of $422,845 relating to the 2020 and 2021 fiscal years. The Company assessed the probability of receiving the funds at December 31, 2021 and determined that the conditions attached to receiving the ERC were met and it was probable to be received. As a result, the Company recognized income of $422,845 during the year ended December 31, 2021.

 

NOTE 5 – PROPERTY AND EQUIPMENT, NET

 

Property and equipment consists of the following as of December 31, 2022 and 2021:

 

   December 31,
2022		   December 31,
2021		 
Containers  $1,397,311   $- 
Trucks and tractors   4,086,968    2,213,265 
Trailers   1,197,357    1,829,853 
Shop equipment   40,380    40,380 
Leasehold improvements   19,589    19,589 
 Property and equipment , gross   6,741,605    4,103,087 
Less: accumulated depreciation   (1,097,664)   (942,908)
Net book value  $5,643,941   $3,160,179 

 

Depreciation expenses for the year ended December 31, 2022 and 2021 were $325,382 and $304,175, respectively.

 

12

 

 

TITAN TRUCKING, LLC AND SUBSIDIARY

A LIMITED LIABILITY COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

 

On June 10, 2022, the Company entered into an asset purchase agreement with Century Waste Management for consideration of approximately $1,805,000. The entire purchase price agreement was allocated as fair value to the fixed assets acquired; no goodwill or intangible assets were determined to be transferred as part of the sale. In order to fund the asset purchase from Century, the Company entered into several private equipment financing agreements.

 

NOTE 6 – INTANGIBLES, NET

 

Intangible assets acquired consisted of the following as of December 31, 2022 and 2021: 

 

   December 31,
2022		   December 31,
2021		 
Customer lists  $687,500   $- 
Less: accumulated amortization   -    - 
Net book value  $687,500   $- 

 

For the years ended December 31, 2022 and 2021, there were no amortization expenses recorded. Amortization is expected to be $68,750 for each of the next five years.

 

On December 9, 2022, the Company entered into a purchase agreement with WTI Global, Inc. (the “seller”) for consideration of approximately $687,500 in exchange for intangible assets. The entire purchase consideration was allocated as fair value to the customer lists acquired from the seller. The $687,500 was funded through a combination of a note payable to the seller of $170,000 and an equity infusion from a member of the Company for $517,500. See Note 9 and 10 for further details.

 

NOTE 7 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES

 

Detail of accounts payable and accrued expenses as of December 31, 2022 and 2021 is as follows: 

 

   December 31,
2022		   December 31,
2021		 
Accounts payable  $669,231   $309,833 
Credit card payable   29,454    28,683 
Accrued interest   12,298    35,131 
Accrued expenses and other   25,675    - 
Total  accounts payable and accrued expenses  $736,658   $373,647 

 

13

 

 

TITAN TRUCKING, LLC AND SUBSIDIARY

A LIMITED LIABILITY COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

 

NOTE 8 – LEASE PAYABLE

 

The Company leases both its headquarters office and operational warehouse in Troy, Michigan. Leases with an initial term of 12 months or less or are immaterial are not included on the consolidated balance sheets. During the year ended December 31, 2019, the Company entered into a 62-month lease which expires on January 15, 2025. The monthly payments were initiated on February 15, 2020 at $8,251 after a 2-month rent abatement period. Straight rent was calculated at $8,479 per month. The total remaining operating lease expenses through the expected termination date is approximately $211,963. Total operating lease expenses for the years ended December 31, 2022 and 2021 were $112,753 and $112,198, respectively. 

 

   As of December 31, 
   2022   2021 
Weighted average remaining lease term (in years)   2.08    3.08 
Weighted average discount rate   7.57%   7.57%

 

Future minimum lease payments required under operating leases on an undiscounted cash flow basis as of December 31, 2022 are as follows: 

 

Fiscal Year  Operating Lease Payments 
2023  $107,930 
2024   111,168 
2025   9,287 
Total minimum lease payments   228,385 
Less: imputed interest   (17,852)
Present value of future minimum lease payments  $210,533 
      
Current operating lease liabilities   95,243 
Non-current operating lease liabilities   115,290 

 

On April 1, 2023, the Company entered into a 60-month lease in Detroit, Michigan with a related party, which terminates on March 31, 2028. The monthly payments were initiated on May 1, 2023, after a 1-month rent abatement period. Straight rent was calculated at $33,564 per month.

 

14

 

 

TITAN TRUCKING, LLC AND SUBSIDIARY

A LIMITED LIABILITY COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

 

NOTES 9 – NOTES PAYABLE

 

The Company borrows funds from various creditors to finance equipment and vehicles and acquisitions consisting of the following:

 

              December 31, 2022   December 31, 2021 
Lender  Maturity
Date		  Interest
Rate		   Monthly Payment   Short-Term   Long-Term   Short-Term   Long-Term 
       %    $    $    $    $    $ 
Loans                                 
Fifth Third Bank (PPP)**  2/8/22 - 5/24/22   -    -    -    -    812,304    - 
WTI Global  On demand   7.00    -    170,000    -    -    - 
                                  
Collateralized Loans                                 
Peoples United  11/10/23   5.75    16,614    177,539    -    165,337    177,539 
M&T Bank  2/23/25   8.78    13,000    121,927    321,192    128,191    443,120 
Daimler Truck  5/14/23 - 9/29/23   4.95 - 6.00    2,487 - 2,762    74,873    53,429    138,374    216,560 
Ascentium Capital  5/5/27 - 6/5/27   3.75 - 5.82    4,812 - 5,935    152,467    587,991    -    - 
Balboa Capital  8/13/27   9.68    4,860    38,895    179,433    -    - 
Blue Bridge Financial  8/10/27   12.18    1,442    10,394    50,951    -    - 
Financial Pacific  7/15/27 - 10/15/27   7.49 - 9.87    1,585 - 1,906    29,187    133,220    -    - 
M2 Equipment  8/10/27   8.68    4,739    39,527    178,039    -    - 
Meridian Equipment  7/12/27   9.32    3,118    25,518    113,606    -    - 
Navitas  7/23/27   7.99    4,257    36,791    158,723    -    - 
Pawnee  8/15/27   10.19    5,296    41,480    193,759    -    - 
Signature  9/15/27 - 6/30/28   6.93 - 8.25    3,901 - 4,842    73,973    374,921    -    - 
Trans Lease  2/20/27   9.75    4,838    40,524    157,569    -    - 
Verdant  4/27/27   6.25    4,702    44,324    169,390    -    - 
Western Equipment  8/15/27   8.93    4,989    41,186    186,605    -    - 
                                  
Related Parties                                 
Titan Property  On demand   -    -    -    -    1,204,532    - 
C. and M. Rizzo  On demand   3.00    -    -    -    500,000    - 
M. Rizzo  On demand   1.90    -    -    -    1,785,451    - 
J. Rizzo  On demand   5.00    -    -    -    170,881    - 
                 1,118,605    2,858,828    4,905,070    837,219 

** The Company applied for and received loans from the Paycheck Protection Program (the “PPP”) in the amounts of $406,152 and $406,153, received on May 5, 2020 and February 1, 2021, respectively. On January 31, 2022 and March 21, 2022, the Company received notices that the entire balances of the loans plus any accrued interest were forgiven and recorded in the consolidated statement of operations as forgiveness of $812,305 during the year ended December 31, 2022.

 

Principal maturities for the next five years and thereafter:

 

 

      
2023   1,118,605 
2024   806,510 
2025   857,789 
2026   723,597 
2027   442,419 
Thereafter   28,514 
Total principal payments   3,977,434 
Less: debt issuance costs   (93,745)
Total notes payable   3,883,689 

  

** The Company applied for and received loans from the Paycheck Protection Program (the “PPP”) in the amounts of $406,152 and $406,153, received on May 5, 2020 and February 1, 2021, respectively. On January 31, 2022 and March 21, 2022, the Company received notices that the entire balances of the loans plus any accrued interest were forgiven and recorded in the consolidated statement of operations as forgiveness of $812,305 during the year ended December 31, 2022.

 

15

 

 

TITAN TRUCKING, LLC AND SUBSIDIARY

A LIMITED LIABILITY COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

 

NOTES 10 – RELATED PARTY TRANSACTIONS

 

The Company had various related party notes payable outstanding at December 31, 2021. The notes were payable to the owner, entities related to the owner, and family members (Note 9). During the year ended December 31, 2022, the Company conducted several related party transactions in exchange for equity ownership in Titan Trucking LLC. As a result of the transactions, a net balance of $4,505,646 of related party loans were converted as equity contributions and eliminated. An additional $517,500 of contributions from a member were paid directly to the sellers for the purchase of the WTI Global Inc. customer list acquisition. These equity contribution conversions and intangible asset purchases were utilized in the calculation of equity ownership of the members as of the year ended December 31, 2022.

 

As of December 31, 2022, there was $200,000 outstanding in subscriptions receivable owed from one of the members of the Company in relation to these equity transactions (Note 2).

 

NOTE 11 – BENEFIT PLAN

 

The Company 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 $22,500 per year. The Company is required to contribute on behalf of each eligible participating employee. The Company will match 50% of the participants deferral not to exceed 3%. 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 year ended December 31, 2022 and 2021 was $11,164 and $10,957, respectively.

 

NOTE 12 - CONTINGENCIES

 

From time to time, the Company is involved in routine litigation that arises in the ordinary course of business. The Company is in an ongoing lawsuit with Wolverine Transfer Station over a contractual dispute and property damages. Wolverine is countersuing the Company for losses from the cancellation of contractual obligations. It is the position of the Company that net losses arising from Wolverine’s claims are not estimable nor probable at the time of this filing.

 

NOTE 13 – SUBSEQUENT EVENTS

 

Subsequent events were evaluated through September 28, 2023, which is the date the consolidated financial statements were issued.

 

In April 30, 2023, the Company entered into a notes payable agreement with Titan Holdings 2 in the amount of $592,470, which matures on April 30, 2028. Interest accrues at 10.5% per annum for the first twelve months and shall increase 0.5 basis points on each anniversary of the note. The Company shall make interest-only payments for the first 60 months of the note and pay the principal in full on the fifth anniversary of the note.

 

On May 19, 2023, pursuant to the terms of the Titan Merger Agreement, the Company completed the Titan Merger. Under the terms of the Titan Merger Agreement, the Company agreed to pay the Titan owners 630,900 shares of the Company’s Series C Preferred Stock as consideration. The Company accounted for the Titan Merger as a reverse acquisition using acquisition accounting.

 

16

 

 

Exhibit 99.2

 

TITAN TRUCKING, LLC, AND SUBSIDIARY

 

A LIMITED LIABILTY COMPANY

 

CONSOLIDATED FINANCIAL STATEMENTS

 

MARCH 31, 2023

 

 
 

 

C O N T E N T S

 

  Pages
TABLE OF CONTENTS 1
   
CONSOLIDATED BALANCE SHEETS as of March 31, 2023 (unaudited) and December 31, 2022 2
   
CONSOLIDATED STATEMENTS OF OPERATIONS for the Three Months Ended March 31, 2023 and 2022 (unaudited) 3
   
CONSOLIDATED STATEMENT OF MEMBERS’ EQUITY (DEFICIENCY) for the Three Months Ended March 31, 2023 and 2022 (unaudited) 4
   
CONSOLIDATED STATEMENTS OF CASH FLOWS for the Three months ended March 31, 2023 and 2022 (unaudited) 5
   
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 6-14

 

1
 

 

TITAN TRUCKING, LLC AND SUBSIDIARY

A LIMITED LIABILITY COMPANY

CONSOLIDATED BALANCE SHEETS

 

 

MARCH 31,

2023

   DECEMBER 31, 2022 
    (unaudited)      
ASSETS          
Current Assets:          
Cash  $52,763   $26,650 
Accounts receivable, net   462,813    517,583 
Other receivables   3,341    1,241 
Prepaid expenses and other current assets   121,813    328,689 
Total Current Assets   640,730    874,163 
           
Property and equipment, net   5,581,041    5,643,941 
Intangible assets, net   680,625    687,500 
Other assets   8,251    8,251 
Operating lease right-of-use asset, net   172,518    194,112 
    6,442,435    6,533,804 
           
TOTAL ASSETS  $7,083,165   $7,407,967 
           
LIABILITIES AND MEMBERS’ EQUITY          
           
LIABILITIES          
Current Liabilities:          
Accounts payable and accrued expenses  $817,778   $736,658 
Accrued payroll and related taxes   72,015    50,983 
Notes payable   816,694    1,098,158 
Operating lease liability, current   97,866    95,243 
Total Current Liabilities   1,804,353    1,981,042 
           
Long-term notes, net of current portion   3,175,282    2,785,531 
Operating lease liability, net of current portion   89,723    115,290 
Total Non-current Liabilities   3,265,005    2,900,821 
           
Total Liabilities   5,069,358    4,881,863 
           
MEMBERS’ EQUITY          
Members’ equity   2,013,807    2,526,104 
           
Total Members’ Equity    2,013,807    2,526,104 
           
TOTAL LIABILITIES AND MEMBERS’ EQUITY  $7,083,165   $7,407,967 

 

The accompanying notes to the financial statements are an integral part of these statements.

 

2
 

 

TITAN TRUCKING, LLC AND SUBSIDIARY

A LIMITED LIABILITY COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022 (UNAUDITED)

 

  

For the three months ended

March 31,

 
   2023   2022 
         
REVENUE  $1,080,327   $650,115 
COST OF REVENUES   1,161,112    732,836 
GROSS LOSS   (80,785)   (82,721)
           
OPERATING EXPENSES:          
Salaries and salary related costs   189,316    96,984 
Professional fees   194,779    15,631 
Depreciation and amortization expense   6,419    - 
General and administrative expenses   131,646    62,285 
           
Total Operating Expenses   522,160    174,900 
           
OPERATING LOSS   (602,945)   (257,621)
           
OTHER INCOME (EXPENSE):          
Interest expense, net of interest income   (79,652)   (31,553)
Other income   300    783,301 
Total other income (expense)   (79,352)   751,748 
           
NET INCOME (LOSS)  $(682,297)  $494,127 
           
           
INCOME (LOSS) PER UNIT (BASIC AND DILUTED)  $(682,297)   $494,127 
Weighted-average units outstanding   100    100 
Net income (loss) per unit  $(7,827)  $4,941 

 

The accompanying notes to the financial statements are an integral part of these statements.

 

3
 

 

TITAN TRUCKING, LLC AND SUBSIDIARY

A LIMITED LIABILITY COMPANY

CONSOLIDATED STATEMENT OF CHANGES IN MEMBERS’ EQUITY (DEFICIENCY)

FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022 (UNAUDITED)

 

  

Members’ Equity

(Deficiency)

 
Balance – December 31, 2021  $(2,038,379)
      
Net income   494,127 
      
Balance – March 31, 2022   (1,544,252)
      
Balance – December 31, 2022   2,526,104 
      
Contributions, net of distributions   170,000 
      
Net loss   (682,297)
      
Balance – March 31, 2023  $2,013,807 

 

The accompanying notes to the financial statements are an integral part of these statements.

 

4
 

 

TITAN TRUCKING, LLC AND SUBSIDIARY

A LIMITED LIABILITY COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022 (UNAUDITED)

 

 

  

FOR THE THREE MONTHS ENDED

MARCH 31,

 
   2023   2022 
CASH FLOW FROM OPERATING ACTIVITIES          
Net (loss) income  $(682,297)  $494,127 
Adjustments to reconcile net (loss) income to net cash (used in) operating activities:          
Forgiveness of PPP loans   -    (812,305)
Depreciation and amortization   119,286    67,048 
Amortization of debt issuance costs   4,664    - 
Loss on sale of property and equipment   -    29,104 
Change in assets and liabilities:          
Accounts receivable   54,770    151,343 
Prepaid expenses and other current assets   6,876    (16,114)
Other receivables   (2,100)   (34,362)
Operating lease right-of-use asset   21,594    (56,215)
Accounts payable and accrued expenses   81,120    50,738 
Accrued payroll and payroll taxes   21,032    (6,379)
Operating lease liability   (22,944)   55,638 
Total adjustments   160,348    144,649 
Net cash used in operating activities   (397,459)   (77,377)
           
CASH FLOWS FROM INVESTING ACTIVITIES          
Acquisition of property and equipment   (50,050)   - 
Disposal of property and equipment   -    78,068 
Net cash provided by (used in) investing activities   (50,050)   78,068 
           
CASH FLOWS FROM FINANCING ACTIVITIES          
Proceeds from notes payable – related parties   -    125,000 
Subscription receivable   200,000    - 
Repayments of notes payable - related parties   -    (28,748)
Proceeds from notes payable   512,470    - 
Repayments of notes payable   (238,848)   (94,381)
Net cash provided by financing activities   473,622    1,871 
           
NET INCREASE IN CASH   26,113    2,562 
           
CASH – BEGINNING OF PERIOD   26,650    33,579 
           
CASH – END OF PERIOD  $52,763   $36,141 
           
CASH PAID DURING THE PERIOD FOR:          
Interest expense  $78,770   $21,795 
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES          
Settlement of note payable  $170,000    - 

 

The accompanying notes to the financial statements are an integral part of these statements.

 

5
 

 

NOTE 1 – ORGANIZATION AND NATURE OF OPERATIONS

 

Business Operations

 

Titan Trucking, LLC (the “Company”) was incorporated in the State of Michigan on January 26, 2017. The Company was formed as a limited liability company. The registered business address is located at 51512 Industrial Drive, New Baltimore, Michigan 48047.

 

The Company is engaged in the full-service solution of waste management. The Company offers a comprehensive package of waste reduction, collection, recycling, and technology-enabled solutions to support customer demand.

 

Senior Trucking, LLC (“Senior’) was established on March 14, 2017 with 100% ownership by the single member of Titan Trucking, LLC (“Titan”). Senior was formally acquired by Titan on April 5, 2020. Senior has operated exclusively under the management and assets of Titan since inception.

 

Going Concern

 

The Company’s consolidated financial statements, are prepared using accounting principles generally accepted in the United States of America (“U.S. 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 three months ended March 31, 2023, the Company had a net loss of $682,297. The working capital of the Company had a deficit of $1,163,623 as of March 31, 2023. Additionally, the Company used cash of $397,459 related to its operating activities during the three months ended March 31, 2023. The Company had a cash balance of $52,763 as of March 31, 2023. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of time within one year after the date that the financial statements are issued. The Company continues to shrink its working capital deficit year-over-year and has been able to continually meet the working capital needs of the business as they come due.

 

Management’s plans include raising capital through issuances of equity and debt securities and minimizing operating expenses of the business to improve the Company’s cash burn rate, in conjunction with the TraqIQ reverse-merger (Note 11). The combined companies, subsequent to the reverse merger, have been successful in attracting substantial capital from investors interested in the current public status of the Company, which has been used to support its ongoing cash outlays. As of the third quarter of 2023, TraqIQ, its new legal parent 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 its ongoing cash outlays. This includes $2,178,000 of convertible notes during Q3 2023. The Company believes, but cannot guarantee, it will continue to be able to attract capital from outside sources as it pursues a move to a national stock exchange. The Company has engaged a qualified investment bank to assist in its uplifting and simultaneous raise of capital. Additionally, the Company’s revenues continue to grow, and management expects the Company to shrink its net losses over the upcoming quarters through organic and acquisitive growth.

 

6
 

 

NOTE 2 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The accompanying unaudited consolidated financial statements have been prepared in accordance with GAAP for interim financial information and with the instructions to Rule 8-03 of Regulation S-X. Accordingly, they do not include all the information and notes for complete financial statements. In the opinion of management, all adjustments (consistent of normal recurring accruals and adjustments) considered necessary for a fair presentation of the consolidated financial statements have been included. Results for the interim periods should not be considered indicative of results to be expected for a full year. The Company adopted a December 31 fiscal year-end for financial statement purposes.

 

Principles of Consolidation

 

The consolidated financial statements include the accounts of Titan Trucking LLC and Senior Trucking LLC, its wholly owned affiliate. All material inter-company accounts and transactions have been eliminated.

 

Basis of Accounting

 

The Company’s policy is to prepare its combined 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 in the United States of America 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 FASB Accounting Standards Codification (“ASC”) 805, if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asst 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 assts 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 and cash equivalents

 

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. At March 31, 2023, the Company had no amounts above this amount.

 

7
 

 

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 March 31, 2023 and December 31, 2022, the Company allocated $77,690 to the allowance for doubtful accounts.

 

Subscriptions Receivable

 

Subscription receivable consists of members’ equity that have been issued with subscriptions that have not yet been settled. As of March 31, 2023 and December 31, 2022, there were $0 and $200,000, respectively, in subscriptions that had not yet settled. All these funds were settled in January of 2023. Subscriptions receivable are carried at cost which approximates fair value.

 

Property and Equipment, net

 

Property and equipment are 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 consolidated statement of operations or the period in which the disposal occurred. The Company utilizes a useful life ranging from 5 to 25 years for its trailers, tractors, shop equipment, leasehold improvements, and containers.

 

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 March 31, 2023.

 

Finite Intangible Assets, net

 

Finite intangible assets are recorded at their estimated fair value at the date of acquisition. They are amortized on a straight-line basis over their estimated useful lives. Management annually evaluates the estimated remaining useful lives of the intangible assets to determine whether events or changes in circumstances warrant a revision to the remaining period of amortization. The Company acquired the finite intangible asset, customer lists, as part of the asset acquisition of WTI Global, Inc. Customer lists are amortized over a remaining useful life of 10 years as determined by management.

 

Finite-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 no impairment write-down would be necessary for the finite-lived intangible assets as of March 31, 2023 or December 31, 2022.

 

8
 

 

Fair Value of Financial Instruments

 

The Company’s financial instruments primarily consist of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, and short-term notes payable. As of the consolidated balance sheet dates, the estimated fair values of the financial instruments were not materially different from their carrying values as presented due to the short maturities of these instruments.

 

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 or liability.

 

The Company has elected to apply the practical expedient to not separate the lease and non-lease components of a contract, which ultimately results in a higher amount of total lease payments being included within the present value calculation of the lease liability.

 

Loan Origination Fees

 

Loan origination fees represent loan fees relating to notes granted to the Company and are amortized over the life of the note. Amortization expense for the three months ended March 31, 2023 and 2022 was $4,664 and $0, respectively. The net amount of $89,081 and $93,745 was netted against the outstanding long-term debt on March 31, 2023 and December 31, 2022, respectively.

 

Revenue Recognition

 

The Company records revenue based on a five-step model in accordance with 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 primarily generated from fees charged for the collection and disposal of waste. Revenues are recognized at a point in time immediately after completion of disposal of waste at a landfill or transfer station and billed out to customers. Rates charged for services performed are usually based on pre-negotiated amounts via contractual obligations and are billed on a performance satisfaction basis via invoice. Invoices usually contain a payment term of net 30 days. There are no significant financing operations with customers in relation to revenues generated and collected.

 

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.

 

9
 

 

Concentration Risk

 

The Company performs a regular review of customer activity and associated credit risks.

 

During the three months ended March 31, 2023, one customer accounted for more than 63% of accounts receivable. During the year ended December 31, 2022, one customer accounted for approximately 63% of total accounts receivable.

 

During the three months ended March 31, 2023, one customer accounted for more than 53% of total revenues generated. During the three months ended March 31, 2022, two customers accounted for more than 82% of total revenues generated.

 

The Company maintains positive customer relationships and continually expands its customer base, mitigating the impact of any potential concentration risks that exist.

 

Basic and Diluted Income (Loss) per Unit

 

The Company presents both basic and diluted earnings per unit for the periods presented in the consolidated financial statements. Basic and diluted loss per unit is calculated by dividing the net income (loss) attributable to the Company by the weighted average number of units outstanding during the periods presented.

 

Income Taxes

 

The Company, with consent from its members, has elected under the Internal Revenue Code to be an “S” corporation. In lieu of corporation income taxes, the shareholders of an “S” corporation are taxed on their proportionate share of the Company’s taxable income.

 

Recently Issued Accounting Standards

 

In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments.” This amendment replaces the incurred methodology in current GAAP with a methodology that reflects expected credit losses on instruments within its scope, including trade receivables. This update is intended to provide financial statement users with more decision-useful information about the expected credit losses. In November 2019, the FASB issued No. 2019-10, Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842), which deferred the effective date of ASU 2016-13 for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company adopted ASU 2020-06 effective January 1, 2023. The adoption of ASU 2020-06 did not have an impact on the Company’s financial statements.

 

10
 

 

NOTE 3– PROPERTY AND EQUIPMENT, NET

 

Property and equipment consists of the following as of March 31, 2023 and December 31, 2022:

 

   March 31, 2023   December 31, 2022 
Containers  $1,397,311   $1,397,311 
Trucks and tractors   4,137,019    4,086,968 
Trailers   1,197,357    1,197,357 
Shop equipment   40,380    40,380 
Leasehold improvements   19,589    19,589 
    6,791,656    6,741,605 
Less: accumulated depreciation   (1,210,615)   (1,097,664)
Net book value  $5,581,041   $5,643,941 

 

Depreciation expenses for the three months ended March 31, 2023 and 2022 were $112,951 and $67,048, respectively.

 

On June 10, 2022, the Company entered into an asset purchase agreement with Century Waste Management for consideration of approximately $1,805,000. The entire purchase price agreement was allocated as fair value to the fixed assets acquired; no goodwill or intangible assets were determined to be transferred as part of the sale. In order to fund the asset purchase from Century, the Company entered into several private equipment financing agreements.

 

NOTE 4 – INTANGIBLES, NET

 

Intangible assets acquired consisted of the following as of March 31, 2023 and December 31, 2022:

 

  

March 31,

2023

   December 31, 2022 
Customer lists  $687,500   $687,500 
Less: accumulated amortization   (6,875)   - 
Net book value  $680,625   $687,500 

 

For the three months ended March 31, 2023 amortization expense was $6,875. For the year ended December 31, 2022, there were no amortization expenses recorded. Amortization is expected to be $68,750 for each of the next five years.

 

On December 9, 2022, the Company entered into a purchase agreement with WTI Global, Inc. (the “seller”) for consideration of approximately $687,500 in exchange for intangible assets. The entire purchase consideration was allocated as fair value to the customer lists acquired from the seller. The $687,500 was funded through a combination of a note payable to the seller of $170,000 and an equity infusion from a member of the Company for $517,500. See Note 7 and 8 for further details.

 

11
 

 

NOTE 5 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES

 

Detail of accounts payable and accrued expenses as of March 31, 2023 and December 31, 2022 is as follows:

 

  

March 31,

2023

   December 31, 2022 
Accounts payable  $729,180   $669,231 
Credit card payable   29,126    29,454 
Accrued interest   12,585    12,298 
Accrued expenses and other   46,887    25,675 
   $817,778   $736,658 

 

NOTE 6 – LEASE PAYABLE

 

The Company leases both its headquarters office and operational warehouse in Troy, Michigan. Leases with an initial term of 12 months or less or are immaterial are not included on the consolidated balance sheets. During the year ended December 31, 2019, the Company entered into a 62-month lease which expires on January 15, 2025. The monthly payments were initiated on February 15, 2020 at $8,251 after a 2-month rent abatement period. Straight rent was calculated at $8,479 per month. The total remaining operating lease expenses through the expected termination date is approximately $186,527. Total operating lease expenses for the three months ended March 31, 2023 and 2022 were $25,304 and $25,308, respectively.

 

   March 31,   December 31, 
   2023   2022 
Weighted average remaining lease term (in years)   1.83    2.08 
Weighted average discount rate   7.57%   7.57%

 

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

 

Fiscal Year  Operating Lease Payments 
2023 (remainder)  $81,145 
2024   111,168 
2025   9,286 
Total minimum lease payments   201,599 
Less: imputed interest   (14,010)
Present value of future minimum lease payments  $187,589 
      
Current operating lease liabilities   97,866 
Non-current operating lease liabilities   89,723 

 

On April 1, 2023, Titan entered into a 60-month lease in Detroit, Michigan, with a related party through common ownership, which expires on March 31, 2028. On September 1, 2023 the Company and the related party amended the lease, resulting in decreased payment terms. The lease has the option to renew for an additional 5 years given proper notice. The monthly payments were initiated on May 1, 2023 after a 1-month rent abatement period. Straight rent for the amended lease was calculated at $29,113 per month.

 

12
 

 

NOTES 7 – NOTES PAYABLE

 

The Company borrows funds from various creditors to finance equipment and vehicles and acquisitions consisting of the following:

 

              March 31, 2023   December 31, 2022 
Lender  Maturity Date  Interest Rate   Monthly Payment   Short-Term   Long-Term   Short-Term   Long-Term 
      %   $   $   $   $   $ 
Loans                                 
WTI Global  On demand   7.00    -    -    -    170,000    - 
                                  
Collateralized Loans                                 
Peoples United  11/10/23   5.75    16,614    

130,031

    -    177,539    - 
M&T Bank  2/23/25   8.78    13,000    124,622    289,008    121,927    321,192 
Daimler Truck  5/14/23 - 9/29/23   4.95 - 6.00    2,487 - 2,762    65,773    40,161    74,873    53,429 
Ascentium Capital  5/5/27 - 6/5/27   3.75 - 5.82    4,812 - 5,935    154,373    548,675    152,467    587,991 
Balboa Capital  8/13/27   9.68    4,860    39,843    169,109    38,895    179,433 
Blue Bridge Financial  8/10/27   12.18    1,442    10,713    48,150    10,394    50,951 
Financial Pacific  7/15/27 - 10/15/27   7.49 - 9.87    1,585 - 1,906    29,813    125,527    29,187    133,220 
M2 Equipment  8/10/27   8.68    4,739    40,391    167,611    39,527    178,039 
Meridian Equipment  7/12/27   9.32    3,118    26,116    106,847    25,518    113,606 
Navitas  7/23/27   7.99    4,257    37,530    149,059    36,791    158,723 
Pawnee  8/15/27   10.19    5,296    42,546    182,714    41,480    193,759 
Signature  9/15/27 - 6/30/28   6.93 - 8.25    3,901 - 4,842    75,372    355,546    73,973    374,921 
Titan Holdings 2  4/30/28    10.50    -    -    512,470    -    - 
Trans Lease  2/20/27   9.75    4,838    41,520    146,808    40,524    157,569 
Verdant  4/27/27   6.25    4,702    45,020    157,871    44,324    169,390 
Western Equipment  8/15/27   8.93    4,989    42,112    175,726    41,186    186,605 
                                  
                 905,775    3,175,282    1,118,605    2,858,828 

 

Principal maturities for the next five years and thereafter:

 

2023 (remainder)  $709,759 
2024   806,509 
2025   857,789 
2026   723,597 
2027   442,419 
Thereafter   540,984 
Total principal payments  $4,081,057 
Less: debt issuance costs   (89,081)
Total notes payable  $3,991,976 

 

13
 

 

NOTES 8 – RELATED PARTY TRANSACTIONS

 

The Company had various related party notes payable outstanding at December 31, 2021. The notes were payable to the owner, entities related to the owner, and family members (Note 7). During the year ended December 31, 2022, the Company conducted several related party transactions in exchange for equity ownership in Titan Trucking LLC. As a result of the transactions, a net balance of $4,505,646 of related party loans were converted as equity contributions and eliminated. An additional $517,500 of contributions from a member were paid directly to the sellers for the purchase of the WTI Global Inc. customer list acquisition. These equity contribution conversions and intangible asset purchases were utilized in the calculation of equity ownership of the members as of the year ended December 31, 2022.

 

During the three months ended March 31, 2023, the Company borrowed $512,470 from Titan Holdings 2, LLC (“Titan Holdings 2”) under an informal agreement (Note 7). On April 30th, 2023, Titan signed a promissory note (the “Titan Holdings 2 Note”) with Titan Holdings 2, a stockholder of the Company. The Titan Holdings 2 Note has an interest rate of 10.5% per annum, which shall increase by 0.5% on each twelve-month anniversary of the Titan Holdings 2 Note’s signing, not to exceed an interest rate of 12.5% per annum. The Titan Holdings 2 Note is interest only payments until maturity which is April 30, 2028. As a result, this borrowing is classified as long-term.

 

As of December 31, 2022, there was $200,000 outstanding in subscriptions receivable owed from one of the members of the Company in relation to these equity transactions (Note 2).

 

NOTE 9 – BENEFIT PLAN

 

The Company 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 $22,500 per year. The Company is required to contribute on behalf of each eligible participating employee. The Company will match 50% of the participants deferral not to exceed 3%. 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 three months ended March 31, 2023 and March 31, 2022 was $2,858 and $2,525, respectively.

 

NOTE 10 - CONTINGENCIES

 

From time to time, the Company is involved in routine litigation that arises in the ordinary course of business. The Company is in an ongoing lawsuit with Wolverine Transfer Station over a contractual dispute and property damages. Wolverine is countersuing the Company for losses from the cancellation of contractual obligations. It is the position of the Company that net losses arising from Wolverine’s claims are not estimable nor probable at the time of this filing.

 

NOTE 11 – SUBSEQUENT EVENTS

 

Subsequent events were evaluated through the date of these financial statements.

 

On May 19, 2023, pursuant to the terms of the Titan Merger Agreement, the Company completed the Titan Merger. Under the terms of the Titan Merger Agreement, the Company agreed to pay the Titan owners 630,900 shares of the Company’s Series C Preferred Stock as consideration. The Company accounted for the Titan Merger as a reverse acquisition using acquisition accounting.

 

On the Titan Merger acquisition date, the Company awarded 70,100 shares of Series C Preferred Stock that vested immediately to its chief executive officer, and as a result recorded $5,586,796 of stock-based compensation. 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.

 

Subsequent to the period, TraQiQ’s Board of Directors and the holders of the TraQiQ’s capital stock representing a majority of the total votes entitled to be cast by the TraQiQ’s shareholders approved a plan to reincorporate TraQiQ in the State of Nevada (the “Reincorporation”) through the merger (the “Reincorporation Merger”) of TraQiQ with and into Titan Environmental Solutions Inc., a wholly-owned, newly-formed Nevada subsidiary formed by TraQiQ specifically for this purpose (“Titan Environmental”), in an effort to better position TraQiQ to attract capital as it seeks to grow its business in the waste management industry. Implementing the Reincorporation will have, among other things, the following effects: 1) TraQiQ’s corporate name will be charged to “Titan Environmental Solutions, Inc.”, 2) each share of TraQiQ’s common stock issued and outstanding immediately prior to the effective time of the Reincorporation Merger will be converted into one share of common stock of Titan Environmental, 3) each issued and outstanding share of TraQiQ’s Series C preferred stock immediately prior to the effective time of the Reincorporation Merger will be converted into one share of Series A convertible preferred stock of Titan Environmental, which has substantially the same rights and preferences as TraQiQ’s Series C preferred stock, 4) each outstanding Right to Receive Common Stock issued and outstanding immediately prior to the effective time of the Reincorporation Merger will be converted into one Right to Receive Common Stock of Titan Environmental, which has substantially the same rights and preferences as TraQiQ’s Rights to Acquire Common Stock, 5) the outstanding warrants to purchase our common stock will automatically be assumed by Titan Environmental and will represent a warrant to acquire shares of common stock of Titan Environmental, 6) TraQiQ’s authorized capital stock will be increased to 425,000,000 total shares, consisting of 400,000,000 shares of common stock and 25,000,000 shares of “blank check” preferred stock, of which 630,900 shares shall be designated “Series A Convertible Preferred Stock”, 7) the persons presently serving as TraQiQ’s executive officers and directors will continue to serve in such respective capacities following the effective time of the Reincorporation Merger, and 8) TraQiQ will be governed by the laws of the State of Nevada and TraQiQ’s articles of incorporation and bylaws will be those of Titan Environmental, which were adopted under the laws of the State of Nevada.

 

On or about October 12, 2023, TraQiQ mailed an Information Statement that describes the Reincorporation to TraQiQ’s shareholders of record as of October 5, 2023 for informational purposes only pursuant to Section 14(c) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations prescribed thereunder. Pursuant to Rule 14c-2 under the Exchange Act, the Reincorporation will not be effective until 20 calendar days after the mailing of the Information Statement to the shareholders, at which time TraQiQ may file with the California Secretary of State and the Nevada Secretary of State one or more certificates of merger and incorporation to effectuate the Reincorporation. The Reincorporation will be effective at such time after the expiration of such 20-day period as the board of directors determines to be the appropriate effective time.

 

14

 

 

Exhibit 99.3

 

TRAQIQ, INC.

PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2023

(UNAUDITED)

 

On May 19, 2023, TraQiQ, Inc. (“TraQiQ” or the “Company”) entered into an Agreement and Plan of Merger (the “Titan Merger Agreement”) by and among TraQiQ, Titan Trucking, LLC (“Titan”) and the owners of Titan on May 19, 2023 (the “acquisition date”). Pursuant to the terms and conditions of the Titan Merger Agreement, the Company’s subsidiary Titan Merger Sub Corp. (“Merger Sub”) was merged with and into Titan on the acquisition date with Titan 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 owners 630,900 shares of the Company’s Series C Preferred Stock. Additionally, the company agreed to an inter-company capital contribution transfer of $500,000 to Titan. Concurrent to the Titan Merger, the Company’s CEO and one of the Company’s Directors resigned from their respective positions and a new CEO, COO, and CFO were appointed. Additionally, the new CEO and COO were both appointed as Directors of the Company. The Company additionally agreed to issue stock compensation in the form of 70,100 shares of the Company’s Series C Preferred Stock to the new CEO (the “Management Compensation Award”).

 

The following unaudited pro forma condensed consolidated statement of financial position of TraQiQ as of March 31, 2023, is based on the historical consolidated financial statements of TraQiQ and historical financial statements of Titan. The Titan Merger is accounted for as a reverse acquisition with Titan as the accounting acquiror of TraQiQ. Titan, as the accounting acquirer, recorded the assets acquired and liabilities assumed of TraQiQ in the Titan Merger at their fair values as of the acquisition date. TraQiQ remains the continuing registrant and reporting company. The unaudited pro forma condensed consolidated statements of operations of TraQiQ for the year ended December 31, 2022, and for the three months ended March 31, 2023, is based on the historical consolidated financial statements of TraQiQ and historical financial statements of Titan.

 

The transaction accounting adjustments consist of those necessary to account for the Titan Merger. The unaudited pro forma condensed consolidated statement of financial position as of March 31, 2023, gives effect to the Titan Merger and Management Compensation Award as if the transactions had occurred on March 31, 2023, and includes all adjustments necessary to reflect the application of acquisition accounting for the Titan Merger. The unaudited pro forma condensed consolidated statements of operations for the year ended December 31, 2022, and the three months ended March 31, 2023, give effect to the Merger as if they both had occurred on January 1, 2022 and include all adjustments necessary to reflect the accounting for the Titan Merger.

 

The unaudited pro forma condensed consolidated financial information does not give effect to any cost savings, operating synergies or revenue synergies that may result from Merger or the costs to achieve any synergies.

 

The unaudited pro forma condensed consolidated financial statements are presented for informational purposes only, in accordance with Article 11 of Regulation S-X and are not intended to represent or to be indicative of the income or financial position that the Company would have reported had the Titan Merger been completed as of the dates set forth in the unaudited pro forma condensed consolidated financial statements due to various factors. The unaudited pro forma condensed consolidated statement of financial position does not purport to represent the future financial position of the Company and the unaudited pro forma condensed consolidated statements of operations do not purport to represent the future results of operations of the Company.

 

The unaudited pro forma condensed consolidated financial statements reflect management’s preliminary estimates of the fair value of purchase consideration and the fair values of tangible and intangible assets acquired and liabilities assumed in the Titan Merger. Since these unaudited pro forma condensed consolidated financial statements have been prepared based on preliminary estimates of the fair value of warrants and fair values of assets acquired and liabilities assumed, the actual amounts to be reported in future filings may differ materially from the amounts used in the pro forma condensed consolidated financial statements.

 

The unaudited pro forma condensed consolidated financial information is presented to illustrate the estimated effects of the Merger, and should be read in conjunction with the following:

 

i.The audited financial statements of Titan as of and for the years ended December 31, 2022 and 2021.
ii.The audited consolidated financial statements of TraQiQ as of and for the years ended December 31, 2022 and 2021.
iii.The unaudited financial statements of TraQiQ as of and for the three-month periods ended March 31, 2023 and 2022

 

F-1
 

 

TRAQIQ, INC.

PRO FORMA CONDENDSED CONSOLIDATED BALANCE SHEET

MARCH 31, 2023

(UNAUDITED)

 

   Traqiq   Titan   Transaction Adjustments      Consolidated 
                    
ASSETS                       
                        
CURRENT ASSETS:                       
Cash  $139,573   $52,763   $-      $192,336 
Accounts receivable, net   65,869    462,813    -       528,682 
Subscription receivable   -    -    -       - 
Other receivables   -    3,341    -       3,341 
Prepaid expenses and other current assets   11,025    121,813    -       132,838 
Inventory   359,845    -    -       359,845 
Total Current Assets   576,312    640,730    -       1,217,042 
                        
NONCURRENT ASSETS:                       
Fixed assets, net   1,156    5,581,041    -       5,582,197 
Intangible assets, net   10,446,668    680,625    -       11,127,293 
Goodwill   7,292,885    -    -       7,292,885 
Other assets   -    8,251    -       8,251 
Right-of-use asset   -    172,518    -       172,518 
    17,740,709    6,442,435    -       24,183,144 
                        
TOTAL ASSETS  $18,317,021   $7,083,165   $-      $25,400,186 
                        
LIABILITIES AND STOCKHOLDERS’ EQUITY                       
                        
CURRENT LIABILITIES:                       
Accounts payable and accrued expenses  $932,348   $817,778   $-      $1,750,126 
Customer deposits   311,544    -    -       311,544 
Accrued payroll and related taxes   118,750    72,015    -       190,765 
Derivative liability   112,333,348    -    -       112,333,348 
Notes payable   3,607,480    816,694    -       4,424,174 
Convertible notes payable   162,094    -    -       162,094 
Operating lease liability, curernt   -    97,866    -       97,866 
                        
Total Current Liabilities   117,465,564    1,804,353    -       119,269,917 
                        
NONCURRENT LIABILITIES:                       
Long-term debt, net of current portion   -    3,175,282    -       3,175,282 
Operating lease liability, net of current portion   -    89,723    -       89,723 
                        
TOTAL LIABILITIES   117,465,564    5,069,358    -       122,534,922 
                        
STOCKHOLDERS’ EQUITY (DEFICIENCY)                       
Traqiq:                       
Preferred stock, Series A   -    -    -       - 
Preferred stock, Series B   147    -    -       147 
Preferred stock, Series C   -    -    631   (b)   701 
              70   (c)     
                        
Common stock   3,394    -    -       3,394 
Additional paid-in capital   30,234,923    -    (129,387,007)  (d)   (71,217,593)
              15,669,287   (a)     
              (631)  (b)     
              6,675,420   (e)     
              5,590,415   (c)     
                        
Accumulated deficit/Members’ Equity   (129,387,007)   2,013,807    129,387,007   (d)   (25,921,385)
              (6,675,420)  (e)     
              (15,669,287)  (a)     
              (5,590,485)  (c)     
                        
TOTAL STOCKHOLDERS’ EQUITY (DEFICIENCY)   (99,148,543)   2,013,807    -       (97,134,736)
                        
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIENCY)  $18,317,021   $7,083,165   $-      $25,400,186 

 

F-2
 

 

TRAQIQ, INC.

PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2023

(UNAUDITED)

 

   Traqiq   Titan   Transaction Adjustments   Consolidated 
                 
Revenue  $65,040   $1,080,327   $-   $1,145,367 
Cost of revenues   37,216    1,161,112    -    1,198,328 
Gross profit (loss)   27,824    (80,785)   -    (52,961)
                     
Operating expenses                    
Salaries and salary related costs   170,530    189,316    -    359,846 
Stock-based compensation   -    194,779    -    194,779 
Professional fees   31,951    6,419    -    38,370 
General and administrative expenses   522,503    131,646    -    654,149 
Total operating expenses   724,984    522,160    -    1,247,144 
                     
Loss from operations   (697,160)   (602,945)   -    (1,300,105)
                     
Other income (expense), net:                    
Interest expense, net of interest income   (156,562)   (79,652)   -    (236,214)
Derivative expense   (94,183,461)        -    (94,183,461)
Other income (expense)   1,255    300    -    1,555 
Change in fair value of derivative liability and derivative expense   (16,828,293)   -    -    (16,828,293)
Total other expense   (111,167,061)   (79,352)   -    (111,246,413)
                     
Loss before provision for income taxes   (111,864,221)   (682,297)   -    (112,546,518)
Provision for income taxes   -    -    -    - 
Net loss  $(111,864,221)  $(682,297)  $-   $(112,546,518)
                     
Net loss per share                    
Basic  $(3.38)  $N/A   $-   $(3.39)
Diluted  $(3.38)  $N/A   $-   $(3.39)
                     
Weighted-average common shares outstanding                    
Basic   33,060,136    N/A    N/A    

33,236,102

 
Diluted   33,060,136    N/A    N/A    

33,236,102

 

 

F-3
 

 

TRAQIQ, INC.

PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 2022

(UNAUDITED)

 

   Traqiq   Titan   Transaction Adjustments      Consolidated 
                    
Revenue  $1,582   $4,203,112   $-      $4,204,694 
Cost of revenues   54,209    4,207,852    -       4,262,061 
Gross profit   (52,627)   (4,740)   -       (57,367)
                        
Operating expenses                       
Salaries and salary related costs   193,634    475,512    -       669,146 
Stock-based compensation   -    -    5,590,485   (c)   5,590,485 
Professional fees   359,107    265,575    -       624,682 
General and administrative expenses   787,302    359,176    -       1,146,478 
Total operating expenses   1,340,043    1,100,263    5,590,485       8,030,791 
                        
Loss from operations   (1,392,670)   (1,105,003)   (5,590,485)      (8,088,158)
                        
Other income (expense), net:                       
Change in fair value of derivative liability   (855,590)   -    -       (855,590)
Gain (loss) on settlement of debt, net   1,752,678    812,305    -       2,564,983 
Interest expense, net of interest income   (1,906,260)   (199,453)   -       (2,105,713)
Loss on sale of assets   -    (168,208)   -       (168,208)
Other income   -    1,696    -       1,696 
Goodwill impairment   -    -    (15,669,287)  (a)   (15,669,287)
Total other income (expense)   (1,009,172)   446,340    (15,669,287)      (16,232,119)
                        
Loss from continuing operations before provision for income taxes   (2,401,842)   (658,663)   (21,259,772)      (24,230,277)
Provision for income taxes   -    -    -       - 
Net loss from continuing operations  $(2,401,842)  $(658,663)  $(21,259,772)     $(24,320,277)
                        
Net loss from continuing operations per share                       
Basic (continuing operations)  $(0.54)  $N/A    $(4.82)     $(5.51)
Diluted (continuing operations)  $(0.54)  $ N/A    $(4.82)     $(5.51)
                        
Weighted-average common shares outstanding                       
Basic   4,410,595    N/A     4,410,595       4,410,595 
Diluted   4,410,595    N/A     4,410,595       4,410,595 

 

F-4
 


 

TRAQIQ, INC.

NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2023 AND DECEMBER 31, 2022

(UNAUDITED)

 

NOTE 1 — BASIS OF PRO FORMA PRESENTATION

 

The accompanying unaudited pro forma consolidated financial information has been prepared in accordance with Article 11 of Regulation S-X. The unaudited pro forma consolidated financial information has been prepared to illustrate the effect of the Titan Merger and the Management Compensation Award (the “Merger Transactions”) and have been prepared for informational purposes only.

 

The unaudited pro forma consolidated balance sheet as of March 31, 2023, assumes that the Merger Transactions occurred on March 31, 2023. The unaudited pro forma consolidated income statements for the three months ended March 31, 2023, and year ended December 31, 2022, assume that the Merger Transactions occurred on January 1, 2022, respectively.

 

Management has made significant estimates and assumptions in its determination of the transaction accounting adjustments. As the unaudited pro forma consolidated financial information has been prepared based on these preliminary estimates, the final amounts recorded may differ materially from the information presented.

 

The unaudited pro forma consolidated financial information does not give effect to any anticipated synergies, operating efficiencies, tax savings, or cost savings that may be associated with the Merger.

 

The transaction accounting adjustments reflecting the completion of the Titan Merger and the Management Compensation Awards are based on currently available information and assumptions and methodologies that management believes are reasonable under the circumstances. The unaudited transaction accounting adjustments, which are described in the accompanying notes, may be revised as additional information becomes available and is evaluated. Therefore, it is likely that the actual adjustments will differ from the transaction accounting adjustments, and it is possible the difference may be material. Management believes that its assumptions and methodologies provide a reasonable basis for presenting all the significant effects of the Titan Merger and the Management Compensation Award transactions based on information available to management at the current time and that the transaction accounting adjustments give appropriate effect to those assumptions and are properly applied in the unaudited pro forma consolidated financial information.

 

In accordance with ASC 805 – Business Combinations, the Titan Merger was accounted for as a reverse acquisition with Titan being deemed the accounting acquirer of TraQiQ. Titan, as the accounting acquirer, recorded the assets acquired and liabilities assumed of TraQiQ in the Titan Merger at their fair values as of the acquisition date. Titan’s historical consolidated financial statements have replaced TraQiQ’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 TraQiQ. TraQiQ remains the continuing registrant and reporting company.

 

The unaudited pro forma consolidated financial information is not necessarily indicative of what the actual results of operations and financial position of TraQiQ, Inc. would have been had the Titan Merger and Management Compensation Awards taken place on the date indicated, nor are they indicative of the future consolidated results of operations or financial position of the post-combination company. They should be read in conjunction with the historical financial statements and notes thereto of TraQiQ and Titan.

 

NOTE 2 —ACCOUNTING POLICIES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

 

The unaudited pro forma consolidated financial statements do not reflect any differences in accounting policies. The company has completed the review of Titan’s accounting policies and has concluded that differences between the accounting policies of the two companies are not material.

 

F-5
 

 

NOTE 3 — TRANSACTION ACCOUNTING ADJUSTMENTS TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

 

The transaction accounting adjustments included in the unaudited pro forma consolidated balance sheet as of March 31, 2023, and the unaudited pro forma statements of operations for the three months ended March 31, 2023 and the year ended December 31, 2022 are as follows:

 

A.Effect of Titan Trucking, LLC Reverse Acquisition

 

In accordance with ASC 805 – Business Combinations, the Titan Merger was accounted for as a reverse acquisition with Titan being deemed the accounting acquirer of Traqiq. Titan, as the accounting acquirer, recorded the assets acquired and liabilities assumed of Traqiq in the Titan Merger at their fair values as of the acquisition date.

 

Titan was deemed to be the accounting acquirer based on the following facts and circumstances: (1) the Titan 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 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 as if the transaction had occurred on March 31, 2023 and December 31, 2022 is as follows:

 

  

March 31,

2023

  

December 31,

2022

 
TraQiQ, Inc. market capitalization  $27,162,222   $27,162,222 
Total purchase consideration  $27,162,222   $27,162,222 

 

The Company recorded all tangible and intangible assets acquired and liabilities assumed at their preliminary estimated fair values on the acquisition date. The following represents the allocation of the estimated purchase consideration as if the transaction had occurred on March 31, 2023 and December 31, 2022:

 

   Preliminary 
   Estimated 
   Fair Value 
Description  March 31, 2023   December 31, 2022 
         
Assets acquired:          
Cash  $139,573   $10,895 
Accounts receivable, net   65,869    358,865 
Prepaid expenses and other current assets   11,025    1,667 
Inventory   359,845    - 
Fixed assets   1,156    - 

Intangible assets

   

10,697,622

    

10,697,222

 
Goodwill   

133,930,164

    

25,946,788

 
   $144,627,786   $37,015,837 
           
Liabilities acquired:          
Accounts payable and accrued expenses  $932,348   $2,021,264 
Customer deposits   311,544    - 
Accrued payroll and related taxes   118,750    - 
Derivative liability   112,333,348    1,152,620 
Contingent consideration – Rohuma   -    1,383,954 
Contingent consideration – Mimo   -    656,179 
Notes payable – related parties   -    3,800,561 
Notes payable   3,607,480    184,186 
Convertible notes payable   162,094    654,851 
   $117,465,564   $9,853,615 
           
Net fair value of assets acquired (liabilities assumed)  $27,162,222   $27,162,222 

 

The Company has evaluated the goodwill recognized upon closing the reverse acquisition and has assessed it for impairment. As a result of the Company’s assessment, the Company impaired the goodwill and recognized an impairment expense in the pro forma consolidated financial statements.

 

F-6
 

 

B.Series C Preferred Stock Issued as Consideration to the Titan Owners

 

The pro forma financial statements include the effects of the 630,900 shares of the Company’s Series C Preferred Stock paid to the Titan owners as consideration for the reverse acquisition.

 

C.Stock-Based Compensation (“Management Compensation Award”)

 

The pro forma financial statements include the effects of 70,100 Preferred Stock Series C shares issued to the new CEO. The Preferred Stock Series C shares vested immediately. The fair value of the Series C Preferred Stock is 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 is the price of the Company’s common stock.

 

D.Elimination of the Historical Accumulated Deficit of TraQiQ

 

The pro forma financial statements account for the Titan Merger as a reverse acquisition in accordance with ASC 805 - Business Combinations, with TraQiQ treated as the legal acquirer and Titan treated as the accounting acquirer. As the accounting acquirer, Titan’s legal capital has been retroactively adjusted to reflect the legal capital of TraQiQ. Therefor, the transaction adjustment eliminates the historical accumulated deficit of TraQiQ in order to allow the presentation of the historical accumulated deficit of Titan within the TraQiQ legal capital structure.

 

E.Elimination of the Historical Members’ Equity Balance of Titan

 

The pro forma financial statements account for the Titan Merger as a reverse acquisition in accordance with ASC 805 - Business Combinations, with TraQiQ treated as the legal acquirer and Titan treated as the accounting acquirer. As the accounting acquirer, Titan’s legal capital has been retroactively adjusted to reflect the legal capital of TraQiQ. Therefore, the transaction adjustment eliminates the historical Members’ Equity balance of Titan in order to allow the presentation of the historical Titan equity within the TraQiQ legal capital structure.

 

NOTE 3 — PRO FORMA NET LOSS PER SHARE

 

The pro forma basic and diluted net loss per share amounts were calculated using the Company’s historical weighted average common shares outstanding for the three months ended March 31, 2023, and the year ended December 31, 2022. The following table presents the computation of pro forma basic and diluted net loss per share:

 

   March 31,   December 31, 
   2023   2022 
Numerator:  $   $ 
Pro forma net loss   (112,246,518)   (24,320,277)
Denominator:          
Weighted average common shares outstanding (basic and diluted)   33,236,102    4,410,595 
Pro forma basic and diluted net loss per share  $(3.39)  $(5.51)

 

NOTE 4 — INCOME TAXES

 

The pro forma financial statements do not include an income tax provision as it is more likely than not that the Company will not be able to utilize the loss carry forwards. TraQiQ, Inc. and its subsidiaries are subject to income taxation in the U.S. federal tax jurisdiction and various state tax jurisdictions. Prior to the Titan Merger, Titan, with consent from its shareholders, had elected under the U.S. Internal Revenue Code to be an “S” corporation. In lieu of corporation income taxes, the shareholders of an “S” corporation are taxed on their proportionate share of the Company’s taxable income. For U.S. federal income tax purposes, the Titan Merger qualified as a tax-free “reorganization”. Therefore, following the Titan Merger, Titan is to be taxed as a “C” corporation in the U.S. federal tax jurisdiction and in various state tax jurisdictions.

 

F-7

 

v3.23.3
Cover
 12 Months Ended
Dec. 31, 2022
Cover [Abstract]  
Document Type 8-K/A
Amendment Flag true
Amendment Description AMENDMENT NO. 1
Document Fiscal Year Focus 2022
Entity File Number 000-56148
Entity Registrant Name TRAQIQ, INC.
Entity Central Index Key 0001514056
Entity Tax Identification Number 30-0580318
Entity Incorporation, State or Country Code CA
Entity Address, Address Line One 1931 Austin Drive
Entity Address, City or Town Troy
Entity Address, State or Province MI
Entity Address, Postal Zip Code 48083
City Area Code (248)
Local Phone Number 775-7400
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, par value $.0001 per share
Trading Symbol TRIQ
Entity Emerging Growth Company false
v3.23.3
Consolidated Balance Sheets - Titan Trucking LLC [Member] - USD ($)
Dec. 31, 2022
Dec. 31, 2021
Current Assets:    
Cash $ 26,650 $ 33,579
Accounts receivable, net 517,583 413,723
Subscriptions receivable 200,000
Other receivables 1,241 426,016
Prepaid expenses and other current assets 128,689 88,314
Total Current Assets 874,163 961,632
Property and equipment, net 5,643,941 3,160,179
Intangible assets, net 687,500
Other assets 8,251 8,251
Operating lease right-of-use asset, net 194,112 276,370
Total Non-current Assets 6,533,804 3,444,800
TOTAL ASSETS 7,407,967 4,406,432
Current Liabilities:    
Accounts payable and accrued expenses 736,658 373,647
Accrued payroll and related taxes 50,983 33,039
Notes payable, net 1,118,605 4,905,070
Operating lease liability 95,243 85,303
Total Current Liabilities 1,981,042 5,397,059
Long-term notes, net of deferred financing costs 2,785,531 837,219
Operating lease liability, net of current portion 115,290 210,533
Total Non-current Liabilities 2,900,821 1,047,752
Total Liabilities 4,881,863 6,444,811
MEMBERS’ EQUITY (DEFICIENCY)    
Members’ equity (deficiency) 2,526,104 (2,038,379)
Total Members’ Equity (Deficiency) 2,526,104 (2,038,379)
TOTAL LIABILITIES AND MEMBERS’ EQUITY (DEFICIENCY) 7,407,967 4,406,432
Nonrelated Party [Member]    
Current Liabilities:    
Notes payable, net 1,098,158 1,244,206
Related Party [Member]    
Current Liabilities:    
Notes payable, net $ 3,660,864
v3.23.3
Consolidated Statements of Operations - Titan Trucking LLC [Member] - USD ($)
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Restructuring Cost and Reserve [Line Items]    
REVENUE $ 4,203,112 $ 3,315,256
COST OF REVENUES 4,207,852 3,317,225
GROSS LOSS (4,740) (1,969)
OPERATING EXPENSES:    
Salaries and salary related costs 475,512 395,395
Professional fees 265,575 30,503
General and administrative expenses 359,175 237,243
Total Operating Expenses 1,100,262 663,141
OPERATING LOSS (1,105,002) (665,110)
OTHER INCOME (EXPENSE):    
Interest expense, net of interest income (199,453) (140,812)
Loss on sale of assets (168,208) (262,264)
Employee Retention Credits 422,845
Forgiveness of Paycheck Protection Program loans 812,305
Other income 1,696 57,291
Total other income (expense) 446,340 77,060
NET LOSS $ (658,663) $ (588,050)
LOSS PER UNIT (BASIC AND DILUTED)    
Weighted-average units outstanding basic 100 100
Weighted-average units outstanding diluted 100 100
Net loss per unit basic $ (6,587) $ (5,881)
Net loss per unit diluted $ (6,587) $ (5,881)
v3.23.3
Consolidated Statement of Changes in Members' Equity (Deficiency)
Titan Trucking LLC [Member]
USD ($)
Balance at Dec. 31, 2020 $ (1,450,329)
Net loss (588,050)
Balance at Dec. 31, 2021 (2,038,379)
Net loss (658,663)
Contributions 5,223,146
Balance at Dec. 31, 2022 $ 2,526,104
v3.23.3
Consolidated Statements of Cash Flows - Titan Trucking LLC [Member] - USD ($)
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
CASH FLOW FROM OPERATING ACTIVITIES      
Net loss $ (658,663) $ (588,050)  
Adjustments to reconcile net loss to net cash (used in) operating activities:      
Employee Retention Credits (422,845) $ (422,845)
Forgiveness of PPP loans (812,305)  
Bad debt expense 77,690  
Depreciation and amortization 325,382 304,175  
Loss on sale of property and equipment 168,208 262,264  
Amortization of loan origination fees 6,663  
Change in assets and liabilities:      
Accounts receivable (181,549) (63,873)  
Prepaid expenses and other current assets (40,374) (7,812)  
Other receivables 424,775  
Other assets 3,800  
Operating lease right-of-use asset 82,258 76,179  
Accounts payable and accrued expenses 363,010 (9,188)  
Accrued payroll and payroll taxes 17,944 14,862  
Operating lease liability (85,303) (76,172)  
Total adjustments 580,761 (62,204)  
Net cash used in operating activities (312,264) (506,660)  
CASH FLOWS FROM INVESTING ACTIVITIES      
Acquisition of property and equipment (3,349,628) (47,177)  
Disposal of property and equipment 371,819 211,965  
Net cash provided by (used in) investing activities (2,977,809) 164,788  
CASH FLOWS FROM FINANCING ACTIVITIES      
Loan origination fees (99,950)  
Proceeds from notes payable 4,398,833 1,806,332  
Repayments of notes payable (1,015,739) (1,486,279)  
Net cash provided by financing activities 3,283,144 320,053  
NET DECREASE IN CASH (6,929) (21,819)  
CASH – BEGINNING OF YEAR 33,579 55,398  
CASH – END OF YEAR 26,650 33,579 $ 55,398
CASH PAID DURING THE YEAR FOR:      
Interest expense 219,404 112,423  
SUPPLEMENTAL NON-CASH DISCLOSURES OF CASH FLOW:      
Member contributions in exchange for loans payable 4,505,646  
Subscription receivable in exchange for equity 200,000  
Member contributions in exchange for intangible asset purchase 517,500  
Note payable in exchange for intangible asset purchase $ 170,000  
v3.23.3
ORGANIZATION AND NATURE OF OPERATIONS
 12 Months Ended
Dec. 31, 2022
Titan Trucking LLC [Member]  
Restructuring Cost and Reserve [Line Items]  
ORGANIZATION AND NATURE OF OPERATIONS

NOTE 1 – ORGANIZATION AND NATURE OF OPERATIONS

 

Business Operations

 

Titan Trucking, LLC (the “Company”) was incorporated in the State of Michigan on January 26, 2017. The Company was formed as a limited liability company. The registered business address is located at 51512 Industrial Drive, New Baltimore, Michigan 48047.

 

The Company is engaged in the full-service solution of waste management. The Company offers a comprehensive package of waste reduction, collection, recycling, and technology-enabled solutions to support customer demand.

 

Senior Trucking, LLC (“Senior’) was established on March 14, 2017 with 100% ownership by the single member of Titan Trucking, LLC (“Titan”). Senior was formally acquired by Titan on April 5, 2020. Senior has operated exclusively under the management and assets of Titan since inception.

 

Going Concern

 

The Company’s consolidated financial statements as of December 31, 2022 and 2021, are prepared using accounting principles generally accepted in the United States of America (“U.S. 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, 2022, the Company had a net loss of $658,663 ($588,050 in 2021). The working capital of the Company had a deficit of $1,106,879 for the year ended December 31, 2022 (deficit of $4,435,427 in 2021). Additionally, the Company used cash of $312,264 related to its operating activities during the year ended December 31, 2022. The Company had a cash balance of $26,650 as of December 31, 2022. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of time within one year after the date that the financial statements are issued. The Company continues to shrink its working capital deficit year-over-year and has been able to continually meet the working capital needs of the business as they come due.

 

Management’s plans include raising capital through issuances of equity and debt securities and minimizing operating expenses of the business to improve the Company’s cash burn rate, in conjunction with the TraqIQ reverse-merger (Note 13). The combined companies, subsequent to the reverse merger, have been successful in attracting substantial capital from investors interested in the current public status of the Company, which has been used to support its ongoing cash outlays. In the second half of the year ended 2023, TraqIQ, its new legal parent company, obtained approximately $1 million in cash from private investors and believes, but cannot guarantee, it will continue to be able to attract capital from outside sources as it pursues a move to a national exchange. The Company has engaged a qualified investment bank to assist in its uplifting and simultaneous raise of capital. Additionally, the Company’s revenues continue to grow, and management expects the Company to shrink its net losses over the upcoming quarters through organic and acquisitive growth.

 

 

TITAN TRUCKING, LLC AND SUBSIDIARY

A LIMITED LIABILITY COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

 
v3.23.3
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 12 Months Ended
Dec. 31, 2022
Titan Trucking LLC [Member]  
Restructuring Cost and Reserve [Line Items]  
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 U.S. GAAP and the regulations of the United States Securities and Exchange Commission. The Company adopted a December 31 fiscal year-end for financial statement reporting purposes.

 

The consolidated financial statements and accompanying notes are the representations of the Company’s management, who are responsible for their integrity and objectivity. In their opinion, such financial information is presented fairly and for all periods represented.

 

Principles of Consolidation

 

The consolidated financial statements include the accounts of Titan Trucking LLC and Senior Trucking LLC, its wholly owned affiliate. All material inter-company accounts and transactions have been eliminated.

 

Basis of Accounting

 

The Company’s policy is to prepare its combined 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 in the United States of America 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 FASB Accounting Standards Codification (“ASC”) 805, if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asst 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 assts 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.

 

 

TITAN TRUCKING, LLC AND SUBSIDIARY

A LIMITED LIABILITY COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

 

Cash and cash equivalents

 

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. At December 31, 2022, the Company had no amounts above this amount.

 

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 writes off bad debts as they occur during the year. As of the year ended December 31, 2022, the Company allocated $77,690 to the allowance for doubtful accounts. There was no allowance for the year ended December 31, 2021.

 

Subscriptions Receivable

 

Subscription receivable consists of members’ equity that have been issued with subscriptions that have not yet been settled. As of December 31, 2022 and 2021, there were $200,000 and nil, respectively, in subscriptions that had not yet settled. All these funds were settled in January of 2023, prior to the filing of this report. Subscriptions receivable are carried at cost which approximates fair value.

 

Property and Equipment, net

 

Property and equipment are 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 consolidated statement of operations or the period in which the disposal occurred. The Company utilizes a useful life ranging from 5 to 25 years for its trailers, tractors, shop equipment, leasehold improvements, and containers.

 

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, 2022.

 

Finite Intangible Assets, net

 

Finite intangible assets are recorded at their estimated fair value at the date of acquisition. They are amortized on a straight-line basis over their estimated useful lives. Management annually evaluates the estimated remaining useful lives of the intangible assets to determine whether events or changes in circumstances warrant a revision to the remaining period of amortization. The Company acquired the finite intangible asset, customer lists, as part of the asset acquisition of WTI Global, Inc. Customer lists are amortized over a remaining useful life of 10 years as determined by management.

 

 

TITAN TRUCKING, LLC AND SUBSIDIARY

A LIMITED LIABILITY COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

 

Finite-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 no impairment write-down would be necessary for the finite-lived intangible assets as of December 31, 2022.

 

Fair Value of Financial Instruments

 

The Company’s financial instruments primarily consist of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, and short-term notes payable. As of the consolidated balance sheet dates, the estimated fair values of the financial instruments were not materially different from their carrying values as presented due to the short maturities of these instruments.

 

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 or liability.

 

The Company has elected to apply the practical expedient to not separate the lease and non-lease components of a contract, which ultimately results in a higher amount of total lease payments being included within the present value calculation of the lease liability.

 

Loan Origination Fees

 

Loan origination fees represent loan fees relating to notes granted to the Company and are amortized over the life of the note. Amortization expense for the year ended December 31, 2022 was $6,663. The net amount of $93,745 was netted against the outstanding long-term debt.

 

Revenue Recognition

 

The Company records revenue based on a five-step model in accordance with 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.

 

 

TITAN TRUCKING, LLC AND SUBSIDIARY

A LIMITED LIABILITY COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

 

The Company’s operating revenues are primarily generated from fees charged for the collection and disposal of waste. Revenues are recognized at a point in time immediately after completion of disposal of waste at a landfill or transfer station and billed out to customers. Rates charged for services performed are usually based on pre-negotiated amounts via contractual obligations and are billed on a performance satisfaction basis via invoice. Invoices usually contain a payment term of net 30 days. There are no significant financing operations with customers in relation to revenues generated and collected.

 

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.

 

Concentration Risk

 

The Company performs a regular review of customer activity and associated credit risks.

 

During the year ended December 31, 2022, one customer accounted for more than 63% of accounts receivable. During the year ended December 31. 2021, two customers accounted for more than 77% of total accounts receivable.

 

During the year ended December 31, 2022, three customers accounted for more than 76% of total revenues generated. During the year ended December 31, 2021, three customers accounted for more than 77% of total revenues generated.

 

The Company maintains positive customer relationships and continually expands its customer base, mitigating the impact of any potential concentration risks that exist.

 

Basic and Diluted Loss per Unit

 

The Company presents both basic and diluted earnings per unit for the periods presented in the consolidated financial statements. Basic and diluted loss per unit is calculated by dividing the net loss attributable to the Company by the weighted average number of units outstanding during the periods presented.

 

Income Taxes

 

The Company, with consent from its members, has elected under the Internal Revenue Code to be an “S” corporation. In lieu of corporation income taxes, the shareholders of an “S” corporation are taxed on their proportionate share of the Company’s taxable income.

 

Advertising and Marketing Costs

 

Costs associated with advertising are charged to expense as occurred. For the years ended December 31, 2022 and 2021, the advertising and marketing costs were $11,336 and $3,394, respectively.

 

 

TITAN TRUCKING, LLC AND SUBSIDIARY

A LIMITED LIABILITY COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

 

Recently Issued Accounting Standards

 

In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments.” This amendment replaces the incurred methodology in current GAAP with a methodology that reflects expected credit losses on instruments within its scope, including trade receivables. This update is intended to provide financial statement users with more decision-useful information about the expected credit losses. In November 2019, the FASB issued No. 2019-10, Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842), which deferred the effective date of ASU 2016-13 for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company does not expect a material impact from the adoption of ASU 2016-13 on the consolidated financial statements.

 
v3.23.3
OTHER RECEIVABLES
 12 Months Ended
Dec. 31, 2022
Titan Trucking LLC [Member]  
Restructuring Cost and Reserve [Line Items]  
OTHER RECEIVABLES

NOTE 4 - OTHER RECEIVABLES

 

SCHEDULE OF OTHER RECEIVABLES 

   December 31,
2022		   December 31,
2021		 
Employee retention credit (1)  $-   $422,845 
Other receivables   1,241    3,171 
Total  $1,241   $426,016 

 

(1)During 2021, the Company applied for the Employee Retention Credits (“ERC”) in the amount of $422,845 relating to the 2020 and 2021 fiscal years. The Company assessed the probability of receiving the funds at December 31, 2021 and determined that the conditions attached to receiving the ERC were met and it was probable to be received. As a result, the Company recognized income of $422,845 during the year ended December 31, 2021.

 
v3.23.3
PROPERTY AND EQUIPMENT, NET
 12 Months Ended
Dec. 31, 2022
Titan Trucking LLC [Member]  
Restructuring Cost and Reserve [Line Items]  
PROPERTY AND EQUIPMENT, NET

NOTE 5 – PROPERTY AND EQUIPMENT, NET

 

Property and equipment consists of the following as of December 31, 2022 and 2021:

 

   December 31,
2022		   December 31,
2021		 
Containers  $1,397,311   $- 
Trucks and tractors   4,086,968    2,213,265 
Trailers   1,197,357    1,829,853 
Shop equipment   40,380    40,380 
Leasehold improvements   19,589    19,589 
 Property and equipment , gross   6,741,605    4,103,087 
Less: accumulated depreciation   (1,097,664)   (942,908)
Net book value  $5,643,941   $3,160,179 

 

Depreciation expenses for the year ended December 31, 2022 and 2021 were $325,382 and $304,175, respectively.

 

 

TITAN TRUCKING, LLC AND SUBSIDIARY

A LIMITED LIABILITY COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

 

On June 10, 2022, the Company entered into an asset purchase agreement with Century Waste Management for consideration of approximately $1,805,000. The entire purchase price agreement was allocated as fair value to the fixed assets acquired; no goodwill or intangible assets were determined to be transferred as part of the sale. In order to fund the asset purchase from Century, the Company entered into several private equipment financing agreements.

 
v3.23.3
INTANGIBLES, NET
 12 Months Ended
Dec. 31, 2022
Titan Trucking LLC [Member]  
Restructuring Cost and Reserve [Line Items]  
INTANGIBLES, NET

NOTE 6 – INTANGIBLES, NET

 

Intangible assets acquired consisted of the following as of December 31, 2022 and 2021: 

 

   December 31,
2022		   December 31,
2021		 
Customer lists  $687,500   $- 
Less: accumulated amortization   -    - 
Net book value  $687,500   $- 

 

For the years ended December 31, 2022 and 2021, there were no amortization expenses recorded. Amortization is expected to be $68,750 for each of the next five years.

 

On December 9, 2022, the Company entered into a purchase agreement with WTI Global, Inc. (the “seller”) for consideration of approximately $687,500 in exchange for intangible assets. The entire purchase consideration was allocated as fair value to the customer lists acquired from the seller. The $687,500 was funded through a combination of a note payable to the seller of $170,000 and an equity infusion from a member of the Company for $517,500. See Note 9 and 10 for further details.

 
v3.23.3
ACCOUNTS PAYABLE AND ACCRUED EXPENSES
 12 Months Ended
Dec. 31, 2022
Titan Trucking LLC [Member]  
Restructuring Cost and Reserve [Line Items]  
ACCOUNTS PAYABLE AND ACCRUED EXPENSES

NOTE 7 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES

 

Detail of accounts payable and accrued expenses as of December 31, 2022 and 2021 is as follows: 

 

   December 31,
2022		   December 31,
2021		 
Accounts payable  $669,231   $309,833 
Credit card payable   29,454    28,683 
Accrued interest   12,298    35,131 
Accrued expenses and other   25,675    - 
Total  accounts payable and accrued expenses  $736,658   $373,647 

 

 

TITAN TRUCKING, LLC AND SUBSIDIARY

A LIMITED LIABILITY COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

 
v3.23.3
LEASE PAYABLE
 12 Months Ended
Dec. 31, 2022
Titan Trucking LLC [Member]  
Restructuring Cost and Reserve [Line Items]  
LEASE PAYABLE

NOTE 8 – LEASE PAYABLE

 

The Company leases both its headquarters office and operational warehouse in Troy, Michigan. Leases with an initial term of 12 months or less or are immaterial are not included on the consolidated balance sheets. During the year ended December 31, 2019, the Company entered into a 62-month lease which expires on January 15, 2025. The monthly payments were initiated on February 15, 2020 at $8,251 after a 2-month rent abatement period. Straight rent was calculated at $8,479 per month. The total remaining operating lease expenses through the expected termination date is approximately $211,963. Total operating lease expenses for the years ended December 31, 2022 and 2021 were $112,753 and $112,198, respectively. 

 

   As of December 31, 
   2022   2021 
Weighted average remaining lease term (in years)   2.08    3.08 
Weighted average discount rate   7.57%   7.57%

 

Future minimum lease payments required under operating leases on an undiscounted cash flow basis as of December 31, 2022 are as follows: 

 

Fiscal Year  Operating Lease Payments 
2023  $107,930 
2024   111,168 
2025   9,287 
Total minimum lease payments   228,385 
Less: imputed interest   (17,852)
Present value of future minimum lease payments  $210,533 
      
Current operating lease liabilities   95,243 
Non-current operating lease liabilities   115,290 

 

On April 1, 2023, the Company entered into a 60-month lease in Detroit, Michigan with a related party, which terminates on March 31, 2028. The monthly payments were initiated on May 1, 2023, after a 1-month rent abatement period. Straight rent was calculated at $33,564 per month.

 

 

TITAN TRUCKING, LLC AND SUBSIDIARY

A LIMITED LIABILITY COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

 
v3.23.3
NOTES PAYABLE
 12 Months Ended
Dec. 31, 2022
Titan Trucking LLC [Member]  
Restructuring Cost and Reserve [Line Items]  
NOTES PAYABLE

NOTES 9 – NOTES PAYABLE

 

The Company borrows funds from various creditors to finance equipment and vehicles and acquisitions consisting of the following:

 

              December 31, 2022   December 31, 2021 
Lender  Maturity
Date		  Interest
Rate		   Monthly Payment   Short-Term   Long-Term   Short-Term   Long-Term 
       %    $    $    $    $    $ 
Loans                                 
Fifth Third Bank (PPP)**  2/8/22 - 5/24/22   -    -    -    -    812,304    - 
WTI Global  On demand   7.00    -    170,000    -    -    - 
                                  
Collateralized Loans                                 
Peoples United  11/10/23   5.75    16,614    177,539    -    165,337    177,539 
M&T Bank  2/23/25   8.78    13,000    121,927    321,192    128,191    443,120 
Daimler Truck  5/14/23 - 9/29/23   4.95 - 6.00    2,487 - 2,762    74,873    53,429    138,374    216,560 
Ascentium Capital  5/5/27 - 6/5/27   3.75 - 5.82    4,812 - 5,935    152,467    587,991    -    - 
Balboa Capital  8/13/27   9.68    4,860    38,895    179,433    -    - 
Blue Bridge Financial  8/10/27   12.18    1,442    10,394    50,951    -    - 
Financial Pacific  7/15/27 - 10/15/27   7.49 - 9.87    1,585 - 1,906    29,187    133,220    -    - 
M2 Equipment  8/10/27   8.68    4,739    39,527    178,039    -    - 
Meridian Equipment  7/12/27   9.32    3,118    25,518    113,606    -    - 
Navitas  7/23/27   7.99    4,257    36,791    158,723    -    - 
Pawnee  8/15/27   10.19    5,296    41,480    193,759    -    - 
Signature  9/15/27 - 6/30/28   6.93 - 8.25    3,901 - 4,842    73,973    374,921    -    - 
Trans Lease  2/20/27   9.75    4,838    40,524    157,569    -    - 
Verdant  4/27/27   6.25    4,702    44,324    169,390    -    - 
Western Equipment  8/15/27   8.93    4,989    41,186    186,605    -    - 
                                  
Related Parties                                 
Titan Property  On demand   -    -    -    -    1,204,532    - 
C. and M. Rizzo  On demand   3.00    -    -    -    500,000    - 
M. Rizzo  On demand   1.90    -    -    -    1,785,451    - 
J. Rizzo  On demand   5.00    -    -    -    170,881    - 
                 1,118,605    2,858,828    4,905,070    837,219 

** The Company applied for and received loans from the Paycheck Protection Program (the “PPP”) in the amounts of $406,152 and $406,153, received on May 5, 2020 and February 1, 2021, respectively. On January 31, 2022 and March 21, 2022, the Company received notices that the entire balances of the loans plus any accrued interest were forgiven and recorded in the consolidated statement of operations as forgiveness of $812,305 during the year ended December 31, 2022.

 

Principal maturities for the next five years and thereafter:

 

 

      
2023   1,118,605 
2024   806,510 
2025   857,789 
2026   723,597 
2027   442,419 
Thereafter   28,514 
Total principal payments   3,977,434 
Less: debt issuance costs   (93,745)
Total notes payable   3,883,689 

  

** The Company applied for and received loans from the Paycheck Protection Program (the “PPP”) in the amounts of $406,152 and $406,153, received on May 5, 2020 and February 1, 2021, respectively. On January 31, 2022 and March 21, 2022, the Company received notices that the entire balances of the loans plus any accrued interest were forgiven and recorded in the consolidated statement of operations as forgiveness of $812,305 during the year ended December 31, 2022.

 

 

TITAN TRUCKING, LLC AND SUBSIDIARY

A LIMITED LIABILITY COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

 
v3.23.3
RELATED PARTY TRANSACTIONS
 12 Months Ended
Dec. 31, 2022
Titan Trucking LLC [Member]  
Restructuring Cost and Reserve [Line Items]  
RELATED PARTY TRANSACTIONS

NOTES 10 – RELATED PARTY TRANSACTIONS

 

The Company had various related party notes payable outstanding at December 31, 2021. The notes were payable to the owner, entities related to the owner, and family members (Note 9). During the year ended December 31, 2022, the Company conducted several related party transactions in exchange for equity ownership in Titan Trucking LLC. As a result of the transactions, a net balance of $4,505,646 of related party loans were converted as equity contributions and eliminated. An additional $517,500 of contributions from a member were paid directly to the sellers for the purchase of the WTI Global Inc. customer list acquisition. These equity contribution conversions and intangible asset purchases were utilized in the calculation of equity ownership of the members as of the year ended December 31, 2022.

 

As of December 31, 2022, there was $200,000 outstanding in subscriptions receivable owed from one of the members of the Company in relation to these equity transactions (Note 2).

 
v3.23.3
BENEFIT PLAN
 12 Months Ended
Dec. 31, 2022
Titan Trucking LLC [Member]  
Multiemployer Plan [Line Items]  
BENEFIT PLAN

NOTE 11 – BENEFIT PLAN

 

The Company 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 $22,500 per year. The Company is required to contribute on behalf of each eligible participating employee. The Company will match 50% of the participants deferral not to exceed 3%. 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 year ended December 31, 2022 and 2021 was $11,164 and $10,957, respectively.

 
v3.23.3
CONTINGENCIES
 12 Months Ended
Dec. 31, 2022
Titan Trucking LLC [Member]  
Restructuring Cost and Reserve [Line Items]  
CONTINGENCIES

NOTE 12 - CONTINGENCIES

 

From time to time, the Company is involved in routine litigation that arises in the ordinary course of business. The Company is in an ongoing lawsuit with Wolverine Transfer Station over a contractual dispute and property damages. Wolverine is countersuing the Company for losses from the cancellation of contractual obligations. It is the position of the Company that net losses arising from Wolverine’s claims are not estimable nor probable at the time of this filing.

 
v3.23.3
SUBSEQUENT EVENTS
 12 Months Ended
Dec. 31, 2022
Titan Trucking LLC [Member]  
Restructuring Cost and Reserve [Line Items]  
SUBSEQUENT EVENTS

NOTE 13 – SUBSEQUENT EVENTS

 

Subsequent events were evaluated through September 28, 2023, which is the date the consolidated financial statements were issued.

 

In April 30, 2023, the Company entered into a notes payable agreement with Titan Holdings 2 in the amount of $592,470, which matures on April 30, 2028. Interest accrues at 10.5% per annum for the first twelve months and shall increase 0.5 basis points on each anniversary of the note. The Company shall make interest-only payments for the first 60 months of the note and pay the principal in full on the fifth anniversary of the note.

 

On May 19, 2023, pursuant to the terms of the Titan Merger Agreement, the Company completed the Titan Merger. Under the terms of the Titan Merger Agreement, the Company agreed to pay the Titan owners 630,900 shares of the Company’s Series C Preferred Stock as consideration. The Company accounted for the Titan Merger as a reverse acquisition using acquisition accounting.
v3.23.3
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) - Titan Trucking LLC [Member]
 12 Months Ended
Dec. 31, 2022
Restructuring Cost and Reserve [Line Items]  
Basis of Presentation

Basis of Presentation

 

The accompanying consolidated financial statements have been prepared in accordance with U.S. GAAP and the regulations of the United States Securities and Exchange Commission. The Company adopted a December 31 fiscal year-end for financial statement reporting purposes.

 

The consolidated financial statements and accompanying notes are the representations of the Company’s management, who are responsible for their integrity and objectivity. In their opinion, such financial information is presented fairly and for all periods represented.

 
Principles of Consolidation

Principles of Consolidation

 

The consolidated financial statements include the accounts of Titan Trucking LLC and Senior Trucking LLC, its wholly owned affiliate. All material inter-company accounts and transactions have been eliminated.

 
Basis of Accounting

Basis of Accounting

 

The Company’s policy is to prepare its combined financial statements on the accrual basis of accounting, whereby revenue is recognized when earned and expenses are recognized when incurred.

 
Accounting Estimates

Accounting Estimates

 

The preparation of consolidated financial statements in conformity with U.S. GAAP in the United States of America 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

Business Combinations

 

Under the guidance enumerated in FASB Accounting Standards Codification (“ASC”) 805, if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asst 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 assts 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.

 

 

TITAN TRUCKING, LLC AND SUBSIDIARY

A LIMITED LIABILITY COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

 
Cash and cash equivalents

Cash and cash equivalents

 

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. At December 31, 2022, the Company had no amounts above this amount.

 
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 writes off bad debts as they occur during the year. As of the year ended December 31, 2022, the Company allocated $77,690 to the allowance for doubtful accounts. There was no allowance for the year ended December 31, 2021.

 
Subscriptions Receivable

Subscriptions Receivable

 

Subscription receivable consists of members’ equity that have been issued with subscriptions that have not yet been settled. As of December 31, 2022 and 2021, there were $200,000 and nil, respectively, in subscriptions that had not yet settled. All these funds were settled in January of 2023, prior to the filing of this report. Subscriptions receivable are carried at cost which approximates fair value.

 
Property and Equipment, net

Property and Equipment, net

 

Property and equipment are 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 consolidated statement of operations or the period in which the disposal occurred. The Company utilizes a useful life ranging from 5 to 25 years for its trailers, tractors, shop equipment, leasehold improvements, and containers.

 

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, 2022.

 
Finite Intangible Assets, net

Finite Intangible Assets, net

 

Finite intangible assets are recorded at their estimated fair value at the date of acquisition. They are amortized on a straight-line basis over their estimated useful lives. Management annually evaluates the estimated remaining useful lives of the intangible assets to determine whether events or changes in circumstances warrant a revision to the remaining period of amortization. The Company acquired the finite intangible asset, customer lists, as part of the asset acquisition of WTI Global, Inc. Customer lists are amortized over a remaining useful life of 10 years as determined by management.

 

 

TITAN TRUCKING, LLC AND SUBSIDIARY

A LIMITED LIABILITY COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

 

Finite-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 no impairment write-down would be necessary for the finite-lived intangible assets as of December 31, 2022.

 
Fair Value of Financial Instruments

Fair Value of Financial Instruments

 

The Company’s financial instruments primarily consist of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, and short-term notes payable. As of the consolidated balance sheet dates, the estimated fair values of the financial instruments were not materially different from their carrying values as presented due to the short maturities of these instruments.

 
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 or liability.

 

The Company has elected to apply the practical expedient to not separate the lease and non-lease components of a contract, which ultimately results in a higher amount of total lease payments being included within the present value calculation of the lease liability.

 
Loan Origination Fees

Loan Origination Fees

 

Loan origination fees represent loan fees relating to notes granted to the Company and are amortized over the life of the note. Amortization expense for the year ended December 31, 2022 was $6,663. The net amount of $93,745 was netted against the outstanding long-term debt.

 
Revenue Recognition

Revenue Recognition

 

The Company records revenue based on a five-step model in accordance with 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.

 

 

TITAN TRUCKING, LLC AND SUBSIDIARY

A LIMITED LIABILITY COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

 

The Company’s operating revenues are primarily generated from fees charged for the collection and disposal of waste. Revenues are recognized at a point in time immediately after completion of disposal of waste at a landfill or transfer station and billed out to customers. Rates charged for services performed are usually based on pre-negotiated amounts via contractual obligations and are billed on a performance satisfaction basis via invoice. Invoices usually contain a payment term of net 30 days. There are no significant financing operations with customers in relation to revenues generated and collected.

 

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.

 
Concentration Risk

Concentration Risk

 

The Company performs a regular review of customer activity and associated credit risks.

 

During the year ended December 31, 2022, one customer accounted for more than 63% of accounts receivable. During the year ended December 31. 2021, two customers accounted for more than 77% of total accounts receivable.

 

During the year ended December 31, 2022, three customers accounted for more than 76% of total revenues generated. During the year ended December 31, 2021, three customers accounted for more than 77% of total revenues generated.

 

The Company maintains positive customer relationships and continually expands its customer base, mitigating the impact of any potential concentration risks that exist.

 
Basic and Diluted Loss per Unit

Basic and Diluted Loss per Unit

 

The Company presents both basic and diluted earnings per unit for the periods presented in the consolidated financial statements. Basic and diluted loss per unit is calculated by dividing the net loss attributable to the Company by the weighted average number of units outstanding during the periods presented.

 
Income Taxes

Income Taxes

 

The Company, with consent from its members, has elected under the Internal Revenue Code to be an “S” corporation. In lieu of corporation income taxes, the shareholders of an “S” corporation are taxed on their proportionate share of the Company’s taxable income.

 
Advertising and Marketing Costs

Advertising and Marketing Costs

 

Costs associated with advertising are charged to expense as occurred. For the years ended December 31, 2022 and 2021, the advertising and marketing costs were $11,336 and $3,394, respectively.

 

 

TITAN TRUCKING, LLC AND SUBSIDIARY

A LIMITED LIABILITY COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

 
Recently Issued Accounting Standards

Recently Issued Accounting Standards

 

In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments.” This amendment replaces the incurred methodology in current GAAP with a methodology that reflects expected credit losses on instruments within its scope, including trade receivables. This update is intended to provide financial statement users with more decision-useful information about the expected credit losses. In November 2019, the FASB issued No. 2019-10, Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842), which deferred the effective date of ASU 2016-13 for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company does not expect a material impact from the adoption of ASU 2016-13 on the consolidated financial statements.
v3.23.3
OTHER RECEIVABLES (Tables)
 12 Months Ended
Dec. 31, 2022
Titan Trucking LLC [Member]  
Restructuring Cost and Reserve [Line Items]  
SCHEDULE OF OTHER RECEIVABLES

SCHEDULE OF OTHER RECEIVABLES 

   December 31,
2022		   December 31,
2021		 
Employee retention credit (1)  $-   $422,845 
Other receivables   1,241    3,171 
Total  $1,241   $426,016 

 

(1)During 2021, the Company applied for the Employee Retention Credits (“ERC”) in the amount of $422,845 relating to the 2020 and 2021 fiscal years. The Company assessed the probability of receiving the funds at December 31, 2021 and determined that the conditions attached to receiving the ERC were met and it was probable to be received. As a result, the Company recognized income of $422,845 during the year ended December 31, 2021.
v3.23.3
PROPERTY AND EQUIPMENT, NET (Tables)
 12 Months Ended
Dec. 31, 2022
Titan Trucking LLC [Member]  
Restructuring Cost and Reserve [Line Items]  
SCHEDULE OF PROPERTY AND EQUIPMENT

Property and equipment consists of the following as of December 31, 2022 and 2021:

 

   December 31,
2022		   December 31,
2021		 
Containers  $1,397,311   $- 
Trucks and tractors   4,086,968    2,213,265 
Trailers   1,197,357    1,829,853 
Shop equipment   40,380    40,380 
Leasehold improvements   19,589    19,589 
 Property and equipment , gross   6,741,605    4,103,087 
Less: accumulated depreciation   (1,097,664)   (942,908)
Net book value  $5,643,941   $3,160,179 
v3.23.3
INTANGIBLES, NET (Tables)
 12 Months Ended
Dec. 31, 2022
Titan Trucking LLC [Member]  
Restructuring Cost and Reserve [Line Items]  
SCHEDULE OF ACQUIRED INTANGIBLE ASSETS

Intangible assets acquired consisted of the following as of December 31, 2022 and 2021: 

 

   December 31,
2022		   December 31,
2021		 
Customer lists  $687,500   $- 
Less: accumulated amortization   -    - 
Net book value  $687,500   $- 
v3.23.3
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables)
 12 Months Ended
Dec. 31, 2022
Titan Trucking LLC [Member]  
Restructuring Cost and Reserve [Line Items]  
SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Detail of accounts payable and accrued expenses as of December 31, 2022 and 2021 is as follows: 

 

   December 31,
2022		   December 31,
2021		 
Accounts payable  $669,231   $309,833 
Credit card payable   29,454    28,683 
Accrued interest   12,298    35,131 
Accrued expenses and other   25,675    - 
Total  accounts payable and accrued expenses  $736,658   $373,647 
v3.23.3
LEASE PAYABLE (Tables) - Titan Trucking LLC [Member]
 12 Months Ended
Dec. 31, 2022
Restructuring Cost and Reserve [Line Items]  
SCHEDULE OF LEASE PAYABLE

 

   As of December 31, 
   2022   2021 
Weighted average remaining lease term (in years)   2.08    3.08 
Weighted average discount rate   7.57%   7.57%
SCHEDULE OF FUTURE MINIMUM LEASE PAYMENT

Future minimum lease payments required under operating leases on an undiscounted cash flow basis as of December 31, 2022 are as follows: 

 

Fiscal Year  Operating Lease Payments 
2023  $107,930 
2024   111,168 
2025   9,287 
Total minimum lease payments   228,385 
Less: imputed interest   (17,852)
Present value of future minimum lease payments  $210,533 
      
Current operating lease liabilities   95,243 
Non-current operating lease liabilities   115,290 
v3.23.3
NOTES PAYABLE (Tables) - Titan Trucking LLC [Member]
 12 Months Ended
Dec. 31, 2022
Restructuring Cost and Reserve [Line Items]  
SCHEDULE OF NOTES PAYABLE

The Company borrows funds from various creditors to finance equipment and vehicles and acquisitions consisting of the following:

 

              December 31, 2022   December 31, 2021 
Lender  Maturity
Date		  Interest
Rate		   Monthly Payment   Short-Term   Long-Term   Short-Term   Long-Term 
       %    $    $    $    $    $ 
Loans                                 
Fifth Third Bank (PPP)**  2/8/22 - 5/24/22   -    -    -    -    812,304    - 
WTI Global  On demand   7.00    -    170,000    -    -    - 
                                  
Collateralized Loans                                 
Peoples United  11/10/23   5.75    16,614    177,539    -    165,337    177,539 
M&T Bank  2/23/25   8.78    13,000    121,927    321,192    128,191    443,120 
Daimler Truck  5/14/23 - 9/29/23   4.95 - 6.00    2,487 - 2,762    74,873    53,429    138,374    216,560 
Ascentium Capital  5/5/27 - 6/5/27   3.75 - 5.82    4,812 - 5,935    152,467    587,991    -    - 
Balboa Capital  8/13/27   9.68    4,860    38,895    179,433    -    - 
Blue Bridge Financial  8/10/27   12.18    1,442    10,394    50,951    -    - 
Financial Pacific  7/15/27 - 10/15/27   7.49 - 9.87    1,585 - 1,906    29,187    133,220    -    - 
M2 Equipment  8/10/27   8.68    4,739    39,527    178,039    -    - 
Meridian Equipment  7/12/27   9.32    3,118    25,518    113,606    -    - 
Navitas  7/23/27   7.99    4,257    36,791    158,723    -    - 
Pawnee  8/15/27   10.19    5,296    41,480    193,759    -    - 
Signature  9/15/27 - 6/30/28   6.93 - 8.25    3,901 - 4,842    73,973    374,921    -    - 
Trans Lease  2/20/27   9.75    4,838    40,524    157,569    -    - 
Verdant  4/27/27   6.25    4,702    44,324    169,390    -    - 
Western Equipment  8/15/27   8.93    4,989    41,186    186,605    -    - 
                                  
Related Parties                                 
Titan Property  On demand   -    -    -    -    1,204,532    - 
C. and M. Rizzo  On demand   3.00    -    -    -    500,000    - 
M. Rizzo  On demand   1.90    -    -    -    1,785,451    - 
J. Rizzo  On demand   5.00    -    -    -    170,881    - 
                 1,118,605    2,858,828    4,905,070    837,219 

** The Company applied for and received loans from the Paycheck Protection Program (the “PPP”) in the amounts of $406,152 and $406,153, received on May 5, 2020 and February 1, 2021, respectively. On January 31, 2022 and March 21, 2022, the Company received notices that the entire balances of the loans plus any accrued interest were forgiven and recorded in the consolidated statement of operations as forgiveness of $812,305 during the year ended December 31, 2022.

**The Company applied for and received loans from the Paycheck Protection Program (the “PPP”) in the amounts of $406,152 and $406,153, received on May 5, 2020 and February 1, 2021, respectively. On January 31, 2022 and March 21, 2022, the Company received notices that the entire balances of the loans plus any accrued interest were forgiven and recorded in the consolidated statement of operations as forgiveness of $812,305 during the year ended December 31, 2022.

 
SCHEDULE OF PRINCIPAL MATURITIES PAYMENT

Principal maturities for the next five years and thereafter:

 

 

      
2023   1,118,605 
2024   806,510 
2025   857,789 
2026   723,597 
2027   442,419 
Thereafter   28,514 
Total principal payments   3,977,434 
Less: debt issuance costs   (93,745)
Total notes payable   3,883,689 
v3.23.3
ORGANIZATION AND NATURE OF OPERATIONS (Details Narrative) - Titan Trucking LLC [Member] - USD ($)
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Restructuring Cost and Reserve [Line Items]    
Incorporated date Jan. 26, 2017  
Net loss $ 658,663 $ 588,050
Working capital deficit 1,106,879 4,435,427
Operating activities 312,264 506,660
Cash 26,650 $ 33,579
Investor [Member]    
Restructuring Cost and Reserve [Line Items]    
Cash $ 1,000,000  
Titan Trucking LLC [Member]    
Restructuring Cost and Reserve [Line Items]    
Ownership percentage 100.00%  
v3.23.3
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - Titan Trucking LLC [Member] - USD ($)
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Product Information [Line Items]    
Cash FDIC amount $ 250,000  
Allowance for doubtful accounts 77,690
Subscriptions receivable $ 200,000
Finite intangible assets net 10 years  
Amortization expense $ 6,663
Long term debt 93,745  
Advertising and marketing costs $ 11,336 $ 3,394
Accounts Receivable [Member] | Customer Concentration Risk [Member] | One Customers [Member]    
Product Information [Line Items]    
Concentration risk percentage 63.00%  
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Two Customers [Member]    
Product Information [Line Items]    
Concentration risk percentage   77.00%
Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | Three Customers [Member]    
Product Information [Line Items]    
Concentration risk percentage 76.00% 77.00%
Trailers,Tractors, Shop Equipment Leasehold Improvements and Container [Member] | Minimum [Member]    
Product Information [Line Items]    
Trailers 5 years  
Trailers,Tractors, Shop Equipment Leasehold Improvements and Container [Member] | Maximum [Member]    
Product Information [Line Items]    
Trailers 25 years  
v3.23.3
SCHEDULE OF OTHER RECEIVABLES (Details) - Titan Trucking LLC [Member] - USD ($)
Dec. 31, 2022
Dec. 31, 2021
Restructuring Cost and Reserve [Line Items]    
Employee retention credit [1] $ 422,845
Other receivables 1,241 3,171
Total $ 1,241 $ 426,016
[1] During 2021, the Company applied for the Employee Retention Credits (“ERC”) in the amount of $422,845 relating to the 2020 and 2021 fiscal years. The Company assessed the probability of receiving the funds at December 31, 2021 and determined that the conditions attached to receiving the ERC were met and it was probable to be received. As a result, the Company recognized income of $422,845 during the year ended December 31, 2021.
v3.23.3
SCHEDULE OF OTHER RECEIVABLES (Details) (Parenthetical) - USD ($)
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Titan Trucking LLC [Member]      
Restructuring Cost and Reserve [Line Items]      
Employee retention credits $ 422,845 $ 422,845
v3.23.3
SCHEDULE OF PROPERTY AND EQUIPMENT (Details) - Titan Trucking LLC [Member] - USD ($)
Dec. 31, 2022
Dec. 31, 2021
Property, Plant and Equipment [Line Items]    
 Property and equipment , gross $ 6,741,605 $ 4,103,087
Less: accumulated depreciation (1,097,664) (942,908)
Net book value 5,643,941 3,160,179
Containers [Member]    
Property, Plant and Equipment [Line Items]    
 Property and equipment , gross 1,397,311
Trucks [Member]    
Property, Plant and Equipment [Line Items]    
 Property and equipment , gross 4,086,968 2,213,265
Trailers [Member]    
Property, Plant and Equipment [Line Items]    
 Property and equipment , gross 1,197,357 1,829,853
Office Equipment [Member]    
Property, Plant and Equipment [Line Items]    
 Property and equipment , gross 40,380 40,380
Leasehold Improvements [Member]    
Property, Plant and Equipment [Line Items]    
 Property and equipment , gross $ 19,589 $ 19,589
v3.23.3
PROPERTY AND EQUIPMENT, NET (Details Narrative) - Titan Trucking LLC [Member] - USD ($)
 12 Months Ended
Jun. 10, 2022
Dec. 31, 2022
Dec. 31, 2021
Restructuring Cost and Reserve [Line Items]      
Depreciation expense   $ 325,382 $ 304,175
Payments to acquire property, plant, and equipment   $ 3,349,628 $ 47,177
Asset Purchase Agreement [Member]      
Restructuring Cost and Reserve [Line Items]      
Payments to acquire property, plant, and equipment $ 1,805,000    
v3.23.3
SCHEDULE OF ACQUIRED INTANGIBLE ASSETS (Details) - Titan Trucking LLC [Member] - USD ($)
Dec. 31, 2022
Dec. 31, 2021
Restructuring Cost and Reserve [Line Items]    
Customer lists $ 687,500
Less: accumulated amortization
Net book value $ 687,500
v3.23.3
INTANGIBLES, NET (Details Narrative) - Titan Trucking LLC [Member] - USD ($)
 12 Months Ended
Dec. 09, 2022
Dec. 31, 2022
Dec. 31, 2021
Restructuring Cost and Reserve [Line Items]      
Amortization expense   $ 68,750  
Note payable in exchange for intangible asset purchase   170,000
Member contributions in exchange for intangible asset purchase   $ 517,500
Purchase Agreement [Member] | WTI Global Inc. [Member]      
Restructuring Cost and Reserve [Line Items]      
Payments for intangible assets $ 687,500    
Note payable in exchange for intangible asset purchase 170,000    
Member contributions in exchange for intangible asset purchase $ 517,500    
v3.23.3
SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - Titan Trucking LLC [Member] - USD ($)
Dec. 31, 2022
Dec. 31, 2021
Restructuring Cost and Reserve [Line Items]    
Accounts payable $ 669,231 $ 309,833
Credit card payable 29,454 28,683
Accrued interest 12,298 35,131
Accrued expenses and other 25,675
Total  accounts payable and accrued expenses $ 736,658 $ 373,647
v3.23.3
SCHEDULE OF LEASE PAYABLE (Details) - Titan Trucking LLC [Member]
Dec. 31, 2022
Dec. 31, 2021
Restructuring Cost and Reserve [Line Items]    
Operating lease, weighted average remaining lease term 2 years 29 days 3 years 29 days
Operating lease, weighted average discount rate, percent 7.57% 7.57%
v3.23.3
SCHEDULE OF FUTURE MINIMUM LEASE PAYMENT (Details) - Titan Trucking LLC [Member] - USD ($)
Dec. 31, 2022
Dec. 31, 2021
Restructuring Cost and Reserve [Line Items]    
2023 $ 107,930  
2024 111,168  
2025 9,287  
Total minimum lease payments 228,385  
Less: imputed interest (17,852)  
Present value of future minimum lease payments 210,533  
Current operating lease liabilities 95,243 $ 85,303
Non-current operating lease liabilities $ 115,290 $ 210,533
v3.23.3
LEASE PAYABLE (Details Narrative) - Titan Trucking LLC [Member] - USD ($)
 12 Months Ended
Apr. 01, 2023
Feb. 15, 2020
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2019
Restructuring Cost and Reserve [Line Items]          
Lease expiration date         Jan. 15, 2025
Payments for rent   $ 8,251      
Straight rent   $ 8,479      
Operating Lease, Expense     $ 112,753 $ 112,198 $ 211,963
Subsequent Event [Member]          
Restructuring Cost and Reserve [Line Items]          
Lease expiration date Mar. 31, 2028        
Straight rent $ 33,564        
v3.23.3
SCHEDULE OF NOTES PAYABLE (Details) - Titan Trucking LLC [Member] - USD ($)
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Line of Credit Facility [Line Items]    
Notes payable, current $ 1,118,605 $ 4,905,070
Notes payable, noncurrent 2,785,531 837,219
Notes payable, noncurrent 2,858,828 837,219
Related Party [Member]    
Line of Credit Facility [Line Items]    
Notes payable, current 3,660,864
Fifth Third Bank (PPP) [Member] | Loans [Member]    
Line of Credit Facility [Line Items]    
Debt instrument, interest rate, stated percentage [1]  
Debt instrument, periodic payment [1]  
Notes payable, current [1] 812,304
Notes payable, noncurrent [1]
Fifth Third Bank (PPP) [Member] | Minimum [Member] | Loans [Member]    
Line of Credit Facility [Line Items]    
Debt instrument, maturity date [1] Feb. 08, 2022  
Fifth Third Bank (PPP) [Member] | Maximum [Member] | Loans [Member]    
Line of Credit Facility [Line Items]    
Debt instrument, maturity date [1] May 24, 2022  
WTI Global Inc. [Member] | Loans [Member]    
Line of Credit Facility [Line Items]    
Debt instrument, interest rate, stated percentage 7.00%  
Debt instrument, periodic payment  
Notes payable, current 170,000
Notes payable, noncurrent
Debt instrument, maturity date On demand  
Peoples United [Member] | Collateralized Loans [Member]    
Line of Credit Facility [Line Items]    
Debt instrument, maturity date Nov. 10, 2023  
Debt instrument, interest rate, stated percentage 5.75%  
Debt instrument, periodic payment $ 16,614  
Notes payable, current 177,539 165,337
Notes payable, noncurrent 177,539
M&T Bank [Member] | Collateralized Loans [Member]    
Line of Credit Facility [Line Items]    
Debt instrument, maturity date Feb. 23, 2025  
Debt instrument, interest rate, stated percentage 8.78%  
Debt instrument, periodic payment $ 13,000  
Notes payable, current 121,927 128,191
Notes payable, noncurrent 321,192 443,120
Daimler Truck [Member] | Collateralized Loans [Member]    
Line of Credit Facility [Line Items]    
Notes payable, current 74,873 138,374
Notes payable, noncurrent $ 53,429 216,560
Daimler Truck [Member] | Minimum [Member] | Collateralized Loans [Member]    
Line of Credit Facility [Line Items]    
Debt instrument, maturity date May 14, 2023  
Debt instrument, interest rate, stated percentage 4.95%  
Debt instrument, periodic payment $ 2,487  
Daimler Truck [Member] | Maximum [Member] | Collateralized Loans [Member]    
Line of Credit Facility [Line Items]    
Debt instrument, maturity date Sep. 29, 2023  
Debt instrument, interest rate, stated percentage 6.00%  
Debt instrument, periodic payment $ 2,762  
Ascentium Capital [Member] | Collateralized Loans [Member]    
Line of Credit Facility [Line Items]    
Notes payable, current 152,467
Notes payable, noncurrent $ 587,991
Ascentium Capital [Member] | Minimum [Member] | Collateralized Loans [Member]    
Line of Credit Facility [Line Items]    
Debt instrument, maturity date May 05, 2027  
Debt instrument, interest rate, stated percentage 3.75%  
Debt instrument, periodic payment $ 4,812  
Ascentium Capital [Member] | Maximum [Member] | Collateralized Loans [Member]    
Line of Credit Facility [Line Items]    
Debt instrument, maturity date Jun. 05, 2027  
Debt instrument, interest rate, stated percentage 5.82%  
Debt instrument, periodic payment $ 5,935  
Balboa Capital [Member] | Collateralized Loans [Member]    
Line of Credit Facility [Line Items]    
Debt instrument, maturity date Aug. 13, 2027  
Debt instrument, interest rate, stated percentage 9.68%  
Debt instrument, periodic payment $ 4,860  
Notes payable, current 38,895
Notes payable, noncurrent $ 179,433
Blue Bridge Financial [Member] | Collateralized Loans [Member]    
Line of Credit Facility [Line Items]    
Debt instrument, maturity date Aug. 10, 2027  
Debt instrument, interest rate, stated percentage 12.18%  
Debt instrument, periodic payment $ 1,442  
Notes payable, current 10,394
Notes payable, noncurrent 50,951
Financial Pacific [Member] | Collateralized Loans [Member]    
Line of Credit Facility [Line Items]    
Notes payable, current 29,187
Notes payable, noncurrent $ 133,220
Financial Pacific [Member] | Minimum [Member] | Collateralized Loans [Member]    
Line of Credit Facility [Line Items]    
Debt instrument, maturity date Jul. 15, 2027  
Debt instrument, interest rate, stated percentage 7.49%  
Debt instrument, periodic payment $ 1,585  
Financial Pacific [Member] | Maximum [Member] | Collateralized Loans [Member]    
Line of Credit Facility [Line Items]    
Debt instrument, maturity date Oct. 15, 2027  
Debt instrument, interest rate, stated percentage 9.87%  
Debt instrument, periodic payment $ 1,906  
M2 Equipment [Member] | Collateralized Loans [Member]    
Line of Credit Facility [Line Items]    
Debt instrument, maturity date Aug. 10, 2027  
Debt instrument, interest rate, stated percentage 8.68%  
Debt instrument, periodic payment $ 4,739  
Notes payable, current 39,527
Notes payable, noncurrent $ 178,039
Meridian Equipment [Member] | Collateralized Loans [Member]    
Line of Credit Facility [Line Items]    
Debt instrument, maturity date Jul. 12, 2027  
Debt instrument, interest rate, stated percentage 9.32%  
Debt instrument, periodic payment $ 3,118  
Notes payable, current 25,518
Notes payable, noncurrent $ 113,606
Navitas [Member] | Collateralized Loans [Member]    
Line of Credit Facility [Line Items]    
Debt instrument, maturity date Jul. 23, 2027  
Debt instrument, interest rate, stated percentage 7.99%  
Debt instrument, periodic payment $ 4,257  
Notes payable, current 36,791
Notes payable, noncurrent $ 158,723
Pawnee [Member] | Collateralized Loans [Member]    
Line of Credit Facility [Line Items]    
Debt instrument, maturity date Aug. 15, 2027  
Debt instrument, interest rate, stated percentage 10.19%  
Debt instrument, periodic payment $ 5,296  
Notes payable, current 41,480
Notes payable, noncurrent 193,759
Signature [Member] | Collateralized Loans [Member]    
Line of Credit Facility [Line Items]    
Notes payable, current 73,973
Notes payable, noncurrent $ 374,921
Signature [Member] | Minimum [Member] | Collateralized Loans [Member]    
Line of Credit Facility [Line Items]    
Debt instrument, maturity date Sep. 15, 2027  
Debt instrument, interest rate, stated percentage 6.93%  
Debt instrument, periodic payment $ 3,901  
Signature [Member] | Maximum [Member] | Collateralized Loans [Member]    
Line of Credit Facility [Line Items]    
Debt instrument, maturity date Jun. 30, 2028  
Debt instrument, interest rate, stated percentage 8.25%  
Debt instrument, periodic payment $ 4,842  
Trans Lease [Member] | Collateralized Loans [Member]    
Line of Credit Facility [Line Items]    
Debt instrument, maturity date Feb. 20, 2027  
Debt instrument, interest rate, stated percentage 9.75%  
Debt instrument, periodic payment $ 4,838  
Notes payable, current 40,524
Notes payable, noncurrent $ 157,569
Verdant [Member] | Collateralized Loans [Member]    
Line of Credit Facility [Line Items]    
Debt instrument, maturity date Apr. 27, 2027  
Debt instrument, interest rate, stated percentage 6.25%  
Debt instrument, periodic payment $ 4,702  
Notes payable, current 44,324
Notes payable, noncurrent $ 169,390
Western Equipment [Member] | Collateralized Loans [Member]    
Line of Credit Facility [Line Items]    
Debt instrument, maturity date Aug. 15, 2027  
Debt instrument, interest rate, stated percentage 8.93%  
Debt instrument, periodic payment $ 4,989  
Notes payable, current 41,186
Notes payable, noncurrent $ 186,605
Titan Property [Member] | Related Party [Member]    
Line of Credit Facility [Line Items]    
Debt instrument, interest rate, stated percentage  
Debt instrument, periodic payment  
Notes payable, current 1,204,532
Notes payable, noncurrent
Debt instrument, maturity date On demand  
C. and M. Rizzo [Member] | Related Party [Member]    
Line of Credit Facility [Line Items]    
Debt instrument, interest rate, stated percentage 3.00%  
Debt instrument, periodic payment  
Notes payable, current 500,000
Notes payable, noncurrent
Debt instrument, maturity date On demand  
M. Rizzo [Member] | Related Party [Member]    
Line of Credit Facility [Line Items]    
Debt instrument, interest rate, stated percentage 1.90%  
Debt instrument, periodic payment  
Notes payable, current 1,785,451
Notes payable, noncurrent
Debt instrument, maturity date On demand  
J. Rizzo [Member] | Related Party [Member]    
Line of Credit Facility [Line Items]    
Debt instrument, interest rate, stated percentage 5.00%  
Debt instrument, periodic payment  
Notes payable, current 170,881
Notes payable, noncurrent
Debt instrument, maturity date On demand  
[1] The Company applied for and received loans from the Paycheck Protection Program (the “PPP”) in the amounts of $406,152 and $406,153, received on May 5, 2020 and February 1, 2021, respectively. On January 31, 2022 and March 21, 2022, the Company received notices that the entire balances of the loans plus any accrued interest were forgiven and recorded in the consolidated statement of operations as forgiveness of $812,305 during the year ended December 31, 2022.
v3.23.3
SCHEDULE OF NOTES PAYABLE (Details) (Parenthetical) - Titan Trucking LLC [Member] - USD ($)
 12 Months Ended
Dec. 31, 2022
Feb. 01, 2021
May 05, 2020
Restructuring Cost and Reserve [Line Items]      
Loan payable   $ 406,153 $ 406,152
Debt forgiveness $ 812,305    
v3.23.3
SCHEDULE OF PRINCIPAL MATURITIES PAYMENT (Details) - Titan Trucking LLC [Member]
Dec. 31, 2022
USD ($)
Restructuring Cost and Reserve [Line Items]  
2023 $ 1,118,605
2024 806,510
2025 857,789
2026 723,597
2027 442,419
Thereafter 28,514
Total principal payments 3,977,434
Less: debt issuance costs (93,745)
Total notes payable $ 3,883,689
v3.23.3
RELATED PARTY TRANSACTIONS (Details Narrative) - Titan Trucking LLC [Member] - USD ($)
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Restructuring Cost and Reserve [Line Items]    
Stock issued $ 4,505,646  
Additional contribution paid 517,500
Subscription receivable in exchange for equity $ 200,000
v3.23.3
BENEFIT PLAN (Details Narrative) - Titan Trucking LLC [Member] - USD ($)
 12 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Multiemployer Plan [Line Items]    
Payments to employees $ 22,500  
Defined benefit plan percentage of match 50.00%  
Defined benefit plan vesting percentage 100.00%  
Employer contribution $ 11,164 $ 10,957
Maximum [Member]    
Multiemployer Plan [Line Items]    
Defined benefit plan percentage of match 3.00%  
v3.23.3
SUBSEQUENT EVENTS (Details Narrative) - Titan Trucking LLC [Member] - USD ($)
 1 Months Ended
May 19, 2023
Apr. 30, 2023
Dec. 31, 2022
Subsequent Event [Line Items]      
Notes payable     $ 3,883,689
Subsequent Event [Member]      
Subsequent Event [Line Items]      
Notes payable   $ 592,470  
Debt instrument maturity date   Apr. 30, 2028  
Debt instrument, desscription   Interest accrues at 10.5% per annum for the first twelve months and shall increase 0.5 basis points on each anniversary of the note. The Company shall make interest-only payments for the first 60 months of the note and pay the principal in full on the fifth anniversary of the note.  
Interest rate percentage   10.50%  
Subsequent Event [Member] | Titan Merger Agreement [Member] | Series C Preferred Stock [Member]      
Subsequent Event [Line Items]      
Shares issued 630,900    
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