TESI 10-Q

Titan Environmental Solutions Inc. (TESI)

10-Q 2024-11-14 For: 2024-09-30

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Added on April 06, 2026

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Nevada		30-0580318
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

300 E. Long Lake Road, Suite 100A Bloomfield Hills, Michigan		48304
(Address of Principal Executive Office)		(Zip Code)

Large Accelerated filer ☐	Accelerated filer ☐

Non-accelerated filer ☒	Smaller reporting company ☒

	Emerging growth company ☐

		Page
PART I – Financial Information

Item 1.	Financial Statements	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	44

Item 3	Quantitative and Qualitative Disclosures about Market Risk	57

Item 4	Controls and Procedures	57

PART II – Other Information

Item 1.	Legal Procedures	58

Item 1A.	Risk Factors	58

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	58

Item 3.	Defaults Upon Senior Securities	58

Item 4.	Mine Safety Disclosures	58

Item 5.	Other Information	58

Item 6.	Exhibits	59

SIGNATURES		60

	●	our prospects, including our future business, revenues, expenses, net income, earnings per share, gross margins, profitability, cash flows, cash position, liquidity, financial condition and results of operations, our targeted growth rate, our goals for future revenues and earnings, and our expectations about realizing the revenues in our backlog and in our sales pipeline;

	●	our ability to successfully pursue strategic acquisitions and integrate acquired businesses;

	●	our ability to hire additional personnel and to manage the growth of our business;

	●	our ability to continue as a going concern;

	●	environmental and other regulations, including developments related to emerging contaminants, gas emissions, renewable energy and environmental, social and governance (“ESG”) performance and disclosure;

	●	significant environmental, safety or other incidents resulting in liabilities or brand damage;

	●	failure to obtain and maintain necessary permits due to land scarcity, public opposition or otherwise;

	●	diminishing landfill capacity, resulting in increased costs and the need for disposal alternatives;

	●	failure to attract, hire and retain key team members and a high quality workforce;

	●	increases in labor costs due to union organizing activities or changes in wage and labor related regulations;

	●	disruption and costs resulting from extreme weather and destructive climate events;

	●	public health risk, increased costs and disruption due to a future resurgence of pandemic conditions and restrictions;

	●	macroeconomic conditions, geopolitical conflict and market disruption resulting in labor, supply chain and transportation constraints, inflationary cost pressures and fluctuations in commodity prices, fuel and other energy costs;

	●	increased competition;

	●	pricing actions;

	●	impacts from international trade restrictions;

	●	competitive disposal alternatives, diversion of waste from landfills and declining waste volumes;

	●	weakness in general economic conditions and capital markets, including potential for an economic recession; instability of financial institutions;

	●	adoption of new tax legislation;

	●	shortages of fuel and/or other energy resources;

	●	failure to develop and protect new technology;

	●	failure of technology to perform as expected;

	●	the risks associated with the legislative, judicial, accounting, regulatory, political and economic risks and conditions;

	●	claims, demands and lawsuits to which we are, and may in the future, be subject and the risk that our insurance or indemnities coverage may not be sufficient;

	●	our ability to operate, update or implement our IT systems;

	●	our ability to implement additional finance and accounting systems, procedures and controls in order to satisfy public company reporting requirements;

	●	our ability to obtain additional financing when and as needed;

	●	the potential liquidity and trading of our securities; and

	●	the future trading prices of our common stock and the impact of securities analysts’ reports on these prices.

	Page No.

Consolidated Balance Sheets as of September 30, 2024 (unaudited) and December 31, 2023	6

Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2024 and 2023 (unaudited)	7

Consolidated Statement of Changes in Mezzanine Equity and Stockholders’ Equity (Deficit) / Members’ Equity for the Three and Nine Months Ended September 30, 2024 and 2023 (unaudited)	8

Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2024 and 2023 (unaudited)	9

Notes to Consolidated Financial Statements (unaudited)	10

	SEPTEMBER 30,			DECEMBER 31,
	2024			2023
	(unaudited)
ASSETS

Current Assets:
Cash	$	75,573		$	103,578
Accounts receivable, net of allowance for expected credit losses of $52,252 and $43,016 as of September 30, 2024 and December 31, 2023, respectively		1,823,403			970,629
Other receivables		-			7,351
Prepaid expenses and other current assets		127,886			248,932
Inventory		349,909			145,000
Total Current Assets		2,376,771			1,475,490

Property and equipment, net		11,200,224			5,780,747
Intangible assets, net		567,188			6,654,030
Goodwill		15,528,739			6,516,915
Other assets		28,568			165,668
Operating lease right-of-use assets, net		494,376			1,582,624
Total Non-current Assets		27,819,095			20,699,984

TOTAL ASSETS	$	30,195,866		$	22,175,474

LIABILITIES, MEZZANINE EQUITY, AND STOCKHOLDERS’ EQUITY (DEFICIT)

LIABILITIES
Current Liabilities:
Accounts payable and accrued expenses	$	8,484,611		$	4,072,958
Customer deposits		338,525			226,671
Accrued payroll and related taxes		228,822			144,326
Derivative liability		-			17,500
Convertible notes payable, net of discounts		3,749,237			2,871,900
Convertible notes payable, net of discounts – related party		856,467			724,250
Convertible notes payable, net of discounts		856,467			724,250
Notes payable, net of discounts and deferred financing costs		3,663,778			3,381,446
Notes payable, net of discounts – related party		1,168,659			530,000
Notes payable, net of discounts		1,168,659			530,000

Finance lease liability, current		30,425			-
Operating lease liabilities, current		200,449			391,547
Shares to be issued		-			50,000
Total Current Liabilities		18,720,973			12,410,598

Notes payable, net of current portion, discounts and deferred financing costs		4,168,191			2,571,215
Notes payable, net of current portion and discounts – related party		1,867,535			603,470
Notes payable, net of current portion and discounts		1,867,535			603,470
Finance lease liability, net of current portion		59,586			-
Operating lease liabilities, net of current portion		313,238			1,290,866
Total Non-current Liabilities		6,408,550			4,465,551

Total Liabilities		25,129,523			16,876,149

Commitments and contingencies (Note 16)		-			-

MEZZANINE EQUITY
Series B Redeemable Convertible Preferred Stock, par value $0.0001, 578,245 and 0 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively		7,701,329			-

STOCKHOLDERS’ EQUITY (DEFICIT)
Preferred stock, 25,000,000 shares authorized:
Series A Convertible Preferred Stock, par value $0.0001, 1,397,900 and 630,900 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively		140			63
Preferred Stock value		140			63
Common stock, par value, $0.0001, 400,000,000 shares authorized, 27,786,391 and 15,134,545 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively		2,779			1,513
Additional paid in capital		166,471,629			155,377,798
Accumulated deficit		(169,109,534	)		(150,080,049	)

Total Stockholders’ Equity (Deficit)		(2,634,986	)		5,299,325

TOTAL LIABILITIES, MEZZANINE EQUITY, AND STOCKHOLDERS’ EQUITY(DEFICIT)	$	30,195,866		$	22,175,474


	For the Nine Months Ended						For the Three Months Ended
	September 30,						September 30,
	2024			2023			2024			2023

REVENUE	$	8,300,038		$	5,568,224		$	3,883,105		$	2,606,653
COST OF REVENUES		7,173,029			4,703,784			3,446,900			1,962,725
GROSS PROFIT		1,127,009			864,440			436,205			643,928

OPERATING EXPENSES (INCOME)
Salaries and salary related costs		1,553,215			1,177,855			453,174			559,208
Stock based compensation		-			5,590,485			-			2,278
Professional fees		2,650,840			2,131,902			620,284			1,207,231
Depreciation and amortization		580,529			674,879			193,824			426,337
General and administrative expenses		1,089,747			682,583			318,470			268,534
Intangible asset impairment		5,508,595			-			5,508,595			-
Goodwill impairment		4,853,142			15,669,287			4,853,142			-

Total Operating expenses		16,236,068			25,926,991			11,947,489			2,463,588

OPERATING LOSS		(15,109,059	)		(25,062,551	)		(11,511,284	)		(1,819,660	)

OTHER INCOME (EXPENSE)
Change in fair value of derivative liability		17,500			33,261			-			23,609
Interest expense, net of interest income		(2,764,744	)		(676,726	)		(1,520,478	)		(237,895	)
Loss on sale of equipment		(88,148	)		-			(88,148	)		-
Gain on sale of customer contracts		370,000			-			370,000			-
Other income (expenses), net		214,175			141,468			2,547			38,047
Loss on extinguishment of convertible debt and issuance of Series B Preferred Stock		(806,920	)		-			(806,920	)		-
Loss on extinguishment of convertible debt and issuance of common share rights		-			(116,591,322	)		-			(116,591,322	)
Total other income (expense), net		(3,058,137	)		(117,093,319	)		(2,042,999	)		(116,767,561	)

Provision for income taxes		-			-			-			-
NET LOSS		(18,167,196	)		(142,155,870	)		(13,554,283	)		(118,587,221	)

DEEMED DIVIDENDS ATTRIBUTABLE TO ACCRETION OF SERIES B PREFERRED STOCK TO REDEMPTION VALUE		(4,103,849	)		-			(145,473	)		-
DEEMED DIVIDEND RELATED TO ISSUANCE OF WARRANTS		(862,289	)		-			-			-
Net loss attributable to common stockholders		(23,133,334	)	$	(142,155,870	)		(13,699,756	)		(118,587,221	)

Basic and diluted net loss per share	$	(0.10	)	$	(1.05	)	$	(0.06	)	$	(0.65	)

Weighted average common shares outstanding - basic and diluted		222,067,042			135,720,702			222,067,042			181,683,636

	Shares		Amount		(Deficiency)		Shares		Amount (1)		Shares		Amount (2)		Shares		Amount		capital			deficit			Total
	Redeemable Series B Preferred Stock				Members’		Series A Preferred Stock (1)				Series B Preferred Stock (2)				Common Stock				Additional paid-in			Accumulated
	Shares		Amount		Equity		Shares		Amount		Shares		Amount		Shares		Amount		capital			deficit			Total
Balance - January 1, 2024		-	$	-	$	-		630,900	$	63		-	$	-		15,134,545	$	1,513	$	155,377,798		$	(150,080,049	)	$	5,299,325
Issuance of Warrants		-		-		-		-		-		-		-		-		-		1,512,290			(862,289	)		650,001
Exercise of share rights		-		-		-		-		-		-		-		10,252,269		1,026		(1,026	)		-			-
Net loss		-		-		-		-		-		-		-		-		-		-			(2,258,944	)		(2,258,944	)
Balance - March 31, 2024		-	$	-	$	-		630,900	$	63		-	$	-		25,386,814	$	2,539	$	156,889,062		$	(153,201,282	)	$	3,690,382

Series B Preferred Offering		422,200		5,524,500		-		-		-		-		-		-		-		2,653,105			-			2,653,105
Series B Preferred Offering costs		-		-		-		-		-		-		-		-		-		(290,390	)		-			(290,390	)
Series A Preferred shares issued in relation to guarantee agreement		-		-		-		215,000		22		-		-		-		-		3,009,978			-			3,010,000
Series A Preferred shares issued in relation to an acquisition of a business		-		-		-		552,000		55		-		-		-		-		8,567,945			-			8,568,000
Issuance of series B preferred		105,592		1,375,467		-		-		-		-		-		-		-		(1,322,696	)		-			(1,322,696	)
Remeasurement of Series B Preferred Stock to redemption value		-		-		-		-		-		-		-		-		-		(3,958,376	)		-			(3,958,376	)
Net loss		-		-		-		-		-		-		-		-		-					(2,353,969	)		(2,353,969	)
Balance - June 30, 2024		527,792	$	6,899,967	$	-		1,397,900	$	140		-	$	-		25,386,814	$	2,539	$	165,548,628		$	(155,555,251	)	$	9,996,056

Issuance of common stock due to exercise of share rights		-		-		-		-		-		-		-		2,399,577		240		(240	)		-			-
Issuance of Warrants		-		-		-		-		-		-		-		-		-		1,068,714			-			1,068,714
Issuance of series B preferred due to extinguishment of debt		50,453		655,889		-		-		-		-		-		-		-		-			-			-
Remeasurement of Series B Preferred Stock to redemption value		-		145,473		-		-		-		-		-		-		-		(145,473	)		-			(145,473	)
Net loss		-		-		-		-		-		-		-		-		-		-			(13,554,283	)		(13,554,283	)
Balance - September 30, 2024		578,245	$	7,701,329	$	-		1,397,900	$	140		-	$	-		27,786,391	$	2,779	$	166,471,629		$	(169,109,534	)	$	(2,634,986	)

	Redeemable Series B Preferred Stock				Members’			Series A Preferred Stock (1)						Series B Preferred Stock (2)						Common Stock						Additional paid-in		Accumulated
	Shares		Amount		Equity			Shares			Amount			Shares			Amount			Shares			Amount			capital		deficit			Total
Balance - January 1, 2023		-	$	-	$	2,526,104			-		$	-			-		$	-			-		$	-		$	-	$	-		$	2,526,104
Contributions, net of distributions		-		-		170,000			-			-			-			-			-			-			-		-			170,000
Net loss						(664,601	)																									(664,601	)
Balance - March 31, 2023		-	$	-	$	2,031,503			-		$	-			-		$	-			-		$	-		$	-	$	-		$	2,031,503
Effect of reverse acquisition		-		-		(2,031,503	)		630,900			63			1,470,135			147			33,952,778			3,395			30,088,068		(664,601	)		27,395,569
Stock based compensation		-		-		-			70,100			7			-			-			300,000			30			5,588,170					5,588,207
Net loss		-		-		-			-			-			-			-			-			-			-		(22,904,048	)		(22,904,048	)
Balance - June 30, 2023		-	$	-	$	-			701,000		$	70			1,470,135		$	147			34,252,778		$	3,425		$	35,676,238	$	(23,568,649	)	$	12,111,231
Balance		-	$	-	$	-			701,000		$	70			1,470,135		$	147			34,252,778		$	3,425		$	35,676,238	$	(23,568,649	)	$	12,111,231
Stock based compensation		-		-		-			-			-			-			-			-			-			2,278		-			2,278
Cancelation of Series C Preferred Stock for options		-		-		-			(70,100	)		(7	)		-			-			-			-			7		-			-
Exchange of debt, preferred stock and common stock for common stock rights		-		-		-			-			-			(1,470,135	)		(147	)		(19,118,233	)		(1,912	)		118,324,275		-			118,322,216
Net loss		-		-		-			-			-			-			-			-			-			-		(118,587,221	)		(118,587,221	)
Balance - September 30, 2023		-	$	-	$	-			630,900		$	63			-		$	-			15,134,545		$	1,513		$	154,002,798	$	(142,155,870	)	$	11,848,504
Balance		-	$	-	$	-			630,900		$	63			-		$	-			15,134,545		$	1,513		$	154,002,798	$	(142,155,870	)	$	11,848,504

	(1)	On January 10, 2024, the Company redomiciled and exchanged all outstanding shares of its pre-existing Series C Preferred Stock for shares of a new class of Series A Preferred Stock (Note 1 – Organization and Nature of Operations). The Statement of Changes in Stockholders’ Equity/Member’s Equity for the three and nine months ended September 30, 2024 has been retrospectively restated to reflect this change.

	(2)	On January 10, 2024, the Company redomiciled and its pre-existing Series A class of Preferred Stock and Series B class of Preferred stock were eliminated (Note 1 – Organization and Nature of Operations). The Statement of Changes in Stockholders’ Equity/Member’s Equity for the three and nine months ended September 30, 2024 has been retrospectively restated to reflect these changes.

	2024			2023
	For the Nine Months Ended September 30,
	2024			2023

Net loss	$	(18,167,196	)	$	(142,155,870	)
Adjustments to reconcile net loss to net cash used in operating activities
Provision for credit losses		(9,234	)		-
Gain on lease termination		(100,076	)		-
Goodwill impairment		4,853,142			15,669,287
Loss on disposal of property, plant and equipment		88,148			-
Loss on extinguishment of convertible debt and issuance of Series B Preferred Stock and warrants		806,920			-
Intangible asset Impairment		5,508,595			-
Forgiveness of debt		-			(91,804	)
Debt cancelled in exchange for customer contracts		(220,000	)		-
Depreciation and amortization		1,212,177			781,546
Stock based compensation		-			5,590,485
Change in fair value of derivative liability and derivative expense		(17,500	)		(33,261	)
Amortization of discounts and convertible options on debt		1,224,855			265,156
Loss on extinguishment and issuance of share rights		-			116,591,322
Changes in assets and liabilities
Accounts receivable		544,392			(307,126	)
Prepaid expenses and other current assets		130,373			(97,074	)
Other receivables		8,951			(4,386	)
Inventory		(204,909	)		65,176
Other assets		137,100			-
Right-of-use asset		259,734			185,160
Accounts payable, accrued expenses and deferred taxes		3,472,965			1,413,596
Customer deposits		111,854			5,285
Accrued payroll and payroll taxes		38,307			96,503
Finance lease liability		(9,356	)		-
Operating lease liability		(234,017	)		(127,558	)
Net cash (used in) operating activities		(564,775	)		(2,153,563	)

CASH FLOWS FROM INVESTING ACTIVITIES

Acquisition of business		(4,652,500	)		69,104
Disposal of property and equipment		93,841			97,319
Acquisition of property and equipment		(1,060,974	)		(173,625	)
Net cash used in investing activities		(5,619,633	)		(7,202	)

CASH FLOWS FROM FINANCING ACTIVITIES
Subscription receivable		-			200,000
Proceeds received from issuance of warrants		650,001			-
Loan origination fees		(36,600	)		-
Series B Offering		4,222,000			-
Series B Offering Costs		(290,390	)		-
Proceeds from convertible notes payable		712,500			2,595,000
Repayments of convertible notes payable		-			(101,008	)
Proceeds from convertible note payables - related parties		62,500			500,000
Proceeds from notes payable		1,907,334			123,574
Repayments of notes payable		(1,706,329	)		(1,218,504	)
Proceeds from note payables - related parties		775,167			841,373
Repayment of notes payable - related parties		(139,780	)		(207,904	)
Net cash provided by financing activities		6,156,403			2,732,531

NET INCREASE (DECREASE) IN CASH		(28,005	)		571,766

CASH - BEGINNING OF PERIOD		103,578			26,650

CASH - END OF PERIOD		75,573			598,416

CASH PAID DURING THE PERIOD FOR:
Interest expense		796,831			275,540

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Series A shares issued related to Guarantee agreement		3,010,000			-
Exercise of Share rights into common stock		1,266			-
Termination of lease		1,129,065
Remeasurement of Series B Preferred Shares to redemption value		1,520,940			-
Non-cash transactions related to reverse acquisition		-			27,162,222
Settlement of note payable		-			170,000

Finite Long-lived Intangible Assets Categories		Estimated Useful Life
Customer Lists		10 Years
Intellectual Property		10 Years
Noncompete agreement		5 Years
Tradenames		10 Years

	September 30, 2024		September 30, 2023
Series A Preferred Stock		139,790,000		-
Series C Preferred Stock (1)		-		63,090,000
Convertible Notes		-		17,680
Warrants		71,064,035		108,734
Total common stock equivalents		210,854,035		63,216,414

	Estimated
Description	Fair Value

Assets:
Cash	$	2,545
Accounts receivable		1,387,932
Property and equipment		5,174,422
Prepaid expenses and other current assets		12,900
Other receivables		1,600
Right-of-use-asset		294,431
Goodwill		13,864,967
Assets acquired total	$	20,738,797

Liabilities:
Accounts payable and accrued expenses	$	(947,180	)
Accrued payroll and related taxes		(46,189	)
Operating lease liability, current		(83,654	)
Finance lease liability, current		(29,230	)
Notes payable		(3,271,231	)
Operating lease liability, noncurrent		(210,778	)
Finance lease liability, noncurrent		(70,137	)
Liabilities acquired total	$	(4,658,399	)

Net fair value of assets (liabilities) acquired	$	16,080,398

	Nine Months Ended			Nine Months Ended
	September 30,			September 30,
	2024			2023
Total revenue	$	12,317,716		$	12,800,530
Net loss	$	(18,653,432	)	$	(141,608,357	)
Pro forma loss per common share	$	(0.08	)	$	(1.04	)
Pro forma weighted average number of common shares basic and diluted		222,067,042			135,720,702


Titan Environmental Solutions Inc. market capitalization at closing	$	27,162,222
Total purchase consideration	$	27,162,222

	Trucking		Digester
Goodwill:
Balance as of January 1, 2023	$	-	$	-
Goodwill recognized		-		-
Balance as of March 31, 2023		-		-
Goodwill recognized		-		22,319,908
Impairment		-		(15,669,287	)
Balance as of June 30, 2023		-		6,650,621
Goodwill recognized		-		-
Balance as of September 30, 2023	$	-	$	6,650,621

Goodwill:
Balance as of January 1, 2024	$	-	$	6,516,915
Impairment		-		-
Goodwill recognized		13,864,966		-
Balance as of March 31, 2024		13,864,966		6,516,915
Goodwill recognized		-		-
Balance as of June 30, 2024		13,864,966		6,516,915
Balance		13,864,966		6,516,915
Impairment		-		(4,853,142	)
Balance as of September 30, 2024	$	13,864,966	$	1,663,773
Balance	$	13,864,966	$	1,663,773

	For the Years Ended,
	December 31,
Remainder of 2024	$	77,548
2025		211,980
2026		207,944
2027		80,459
Total minimum lease payments		577,931
Less: imputed interest		(64,244	)
Present value of future minimum lease payments		513,687

Current operating lease liabilities		200,449
Non-current operating lease liabilities	$	313,238

(e)	On May 16, 2022, the Company issued a $25,000 promissory note (the “Individual #1 Note”) with an individual private investor. The Individual Note has an annual interest rate of 12% per annum and matured on December 31, 2023, at which time all principal and accrued interest is owed. The Individual #1 Note is in default and therefor incurs additional interest of 0.5% on all outstanding principal and interest owed.

(f)	On September 28, 2022 and September 29, 2022, the Company agreed to two Kabbage Funding Loan Agreements (together known as the “Kabbage Loans”) owed to American Express National Bank. The Kabbage Loans had an initial principal amount of $120,800 and as of May 19, 2023 had a principal amount of $77,748. Each loan includes a cost of capital interest expense of $4,077 and is to be repaid in nine monthly repayments of $3,658, followed by nine monthly payments of $35,507. As of September 30, 2024, the Kabbage Loans had been fully repaid.

(g)	On May 30, 2024 the Company entered into a promissory note agreement with Dominic and Sharon Campo for $500,000. The note matured on July 15, 2024. The promissory note has an annual interest rate of 13.75% until maturity date and 18% after the maturity. As of September 30, 2024 the outstanding loan balance is $500,000. The Company incurred debt issuance costs of $245,469 in connection with the execution of this agreement of which $245,469 was amortized during the nine months ending September 30, 2024 (please see Guarantee of Debt above). The debt issuance cost balance as of September 30, 2024 is $0. Upon default, a fifteen day “cure period” shall begin. Following the expiration of the cure period, any amounts outstanding shall be immediately due and payable. An additional charge of either $100,000 or 200,000 shares of Series A Preferred Stock shall become due. As of September 30, 2024, the maturity date of the note had passed and the cure period elapsed. Subsequent to period end the note was extended and is no longer in default.

(h)	On May 31, 2024 the Company entered into a promissory note agreement with Dominic and Sharon Campo for $2,359,898. The note matures on May 15, 2027. The promissory note has an annual interest rate of 13.75% for the first year, 14.75% for the second year and 15.75% for the third year. Upon default, a 10 day “cure period” shall begin. The promissory note requires thirty-five (35) monthly installment payments of interest beginning on June 15, 2024, and a balloon payment of all outstanding principal and accrued interest upon maturity. As of September 30, 2024 the outstanding loan balance is $2,359,898. The Company incurred debt issuance costs of $1,158,562 in connection with the execution of this agreement of which $128,729 was amortized during the nine months ending September 30, 2024 (please see Guarantee of Debt above). The debt issuance cost balance as of September 30, 2024 is $1,029,833.

(l)	On November 30, 2023, the Company and its COO, Jeff Rizzo (“Rizzo”), agreed to a promissory note for a principal amount of $65,000. The promissory note has an interest rate of 10% and a maturity date of June 30, 2024. The note also features a provision stating the Company will pay a 10% late fee in the event repayment is not made by more than 30 days past maturity. As of September 30, 2024, the maturity date elapsed and the promissory note is in default. The Company has an informal agreement with Rizzo to continually borrow from Rizzo as working capital needs arise. These additional funds are to be repaid as funding becomes available. As of September 30, 2024, Titan had borrowed $16,658 in additional funding.

(m)	The Company has an informal agreement with Charles B. Rizzo (“C. Rizzo”) to continually borrow from C. Rizzo as working capital needs arise. These additional funds are to be repaid as funding becomes available. In July of 2024, the Company sold two customer contracts in exchange for total proceeds of $370,000; consisting of $100,000 in cash, $50,000 of expenses paid on behalf of the Company, and debt forgiveness of $220,000. The debt forgiveness included the forgiveness of $70,000 owed to C. Rizzo.

(n)	On May 30, 2024, the Company and Frank Celli (“Celli”), agreed to a promissory note for a principal amount of $200,000. The promissory note has an annual interest rate of 10% and a maturity date of September 30, 2024. The note also features a provision stating the Company will pay a 10% late fee in the event repayment is not made by more than 30 days past maturity. On July 2, 2024, Celli and the Company agreed to exchange the promissory note in exchange for 20,183 units which include 20,183 warrants to purchase 100 shares of common stock each and 20,183 shares of Series B Preferred Stock. The warrants each exercisable have an exercise price of $0.06 per share (Note 14 – Stockholders’ Equity and Mezzanine Equity). On July 2, 2024 Celli and the Company agreed to cancel the promissory note in exchange for 20,183 units which include 20,183 warrants to purchase 100 shares common stock each and 20,183 shares of Series B Preferred Stock. The warrants each have an exercise price of $0.06 per share (Note 14 – Stockholders’ Equity and Mezzanine Equity). The exchange was analyzed under ASC 470-50 and was concluded a debt extinguishment, the Company recorded a loss on extinguishment of $322,794 which is presented on the statement of operations.


Remainder of 2024	$	4,034,452
2025		2,341,231
2026		1,703,748
2027		3,589,706
2028		947,349
Thereafter		804,640
Total principal payments	$	13,421,126
Less: debt discounts		(2,552,963	)
Total notes payable	$	10,868,163

		Current			Non-current		Current			Non-current
		September 30,					December 31,
		2024					2023
		Current			Non-current		Current			Non-current

Convertible Notes Payable:
Calvary Fund – 2023 Bridge Notes	(a)	$	1,150,000		$	-	$	1,150,000		$	-
Cavalry Fund – 2024 Bridge Note	(b)		525,000			-		-			-
Evergreen – Bridge Notes	(c)		745,000			-		745,000			-
Keystone Capital – Bridge Note	(d)		70,500			-		70,500			-
Seven Knots – Bridge Note	(e)		70,500			-		70,500			-
Individual #2 – Bridge Note	(f)		300,000			-		300,000			-
Individual #3 – Bridge Note	(g)		30,000			-		30,000			-
Individual #4 – Bridge Note	(h)		180,000			-		180,000			-
Individual #5 – Bridge Note	(i)		600,000			-		600,000			-
Chambers - Bridge Note	(j)		62,500			-		-			-
Schiller – Bridge Note	(k)		125,000			-		-			-
Convertible notes payable	(k)		125,000			-		-			-


Related Parties:
Miller – Bridge Notes	(l)		480,000			-		480,000			-
Titan 5 – Bridge Note	(m)		120,000			-		120,000			-
Celli – Bridge Notes	(n)		212,644			-		150,000			-
FC Advisory – Bridge Note	(o)		60,000			-		60,000			-
Note payable to related parties	(o)		60,000			-		60,000			-

Total outstanding principal			4,731,144			-		3,956,000			-
Less: discounts			(125,440	)		-		(359,850	)		-
Total convertible notes payable			4,605,704					3,596,150			-

Convertible notes payable – related parties			856,467			-		724,250			-
Convertible notes payable		$	3,749,237		$	-	$	2,871,900		$	-

(a)	Between May 19, 2023 and August 7, 2023, the Company issued five 20% original issue discount Promissory Notes to Calvary (the “Calvary Fund 2023 Bridge Notes”). The Calvary Fund 2023 Bridge Notes have principal amounts ranging from $141,000 to $400,000. The Cavalry Fund Bridge Notes have an annual interest rate of 10% per annum and maturity dates ranging from May 19, 2024 to August 7, 2024. The Cavalry Fund 2023 Bridge Notes contain identical “rollover rights” conversion features that enable the holders to convert all or part of the note’s principal and accrued interest in the event of a public offering or private placement of the Company’s equity, equity linked, or debt securities into purchase consideration for said public or private offering. In the event of default, the Calvary Fund 2023 Bridge Notes accrue interest at a rate of 24% and all outstanding principal must be repaid at an amount equal to 120% of the outstanding principal balance. As of September 30, 2024, $886,000 of the Cavalry Fund 2023 Bridge Notes were past their original maturity dates. Effective July 29, 2024 and through December 31, 2024, the Company and Cavalry agreed to waive all events of default and all claims to related default interest, with the exception of any default interest that accrued prior to July 29, 2024. Additionally, effective July 29, 2024, $264,000 of the Cavalry Fund 2023 Bridge Notes were amended to have a maturity date of December 31, 2024.

(b)	On August 12, 2024 the Company issued Calvary a $525,000 non-interest bearing convertible note payable (the “Calvary Fund 2024 Bridge Note) along with 10,000,000 common stock warrants in exchange for proceeds of $500,000. The Company recognized a debt discount of $413,190 as a result of the warrants (Note 14 – Stockholders’ Equity and Mezzanine Equity). The Calvary Fund 2024 Bridge Note has a $25,000 original issue discount and a maturity date of October 12, 2024, which was extended to December 31, 2024 subsequent to period end. The Cavalry Fund 2024 Bridge Note contains a “rollover rights” conversion features that enables the holder to convert all or part of the note’s principal and accrued interest in the event of a public offering or private placement of the Company’s equity, equity linked, or debt securities into purchase consideration for said public or private offering.

(c)	Between May 19, 2023 and July 7, 2023, the Company issued three 20% original issue discount Promissory Notes to Evergreen (the “Evergreen Bridge Notes”) with principal amounts ranging from $141,000 to $400,000. The Evergreen Bridge Notes have an annual interest rate of 10% per annum and were issued with maturity dates ranging from May 19, 2024 to July 7, 2024. The Evergreen Bridge Notes contain identical “rollover rights” conversion features that enable the holders to convert all or part of the note’s principal and accrued interest in the event of a public offering or private placement of the Company’s equity, equity linked, or debt securities into purchase consideration for said public or private offering. In the event of default, the Evergreen Bridge Notes accrue interest at a rate of 24% and all outstanding principal must be repaid at an amount equal to 120% of the outstanding principal balance. As of September 30, 2024, $745,000 of the Evergreen Bridge Notes were past their original maturity dates. Effective July 29, 2024 and through December 31, 2024, the Company and Evergreen agreed to waive all events of default and all claims to related default interest, with the exception of any default interest that accrued prior to July 29, 2024.

(d)	On July 20, 2023, the Company issued a 20% original issue discount Promissory Note to Keystone Capital (the “Keystone Bridge Note”) with a principal amount of $70,500. The Keystone Bridge Note has an annual interest rate of 10% per annum and was issued with a maturity date of July 20, 2024. The Keystone Bridge Note contains a “rollover rights” conversion features that enable the holders to convert all or part of the note’s principal and accrued interest in the event of a public offering or private placement of the Company’s equity, equity linked, or debt securities into purchase consideration for said public or private offering. In the event of default, the Keystone Bridge Note accrues interest at a rate of 24% and all outstanding principal must be repaid at an amount equal to 120% of the outstanding principal balance. As of September 30, 2024, the Keystone Bridge Note was past its original maturity date. Effective July 29, 2024 and through December 31, 2024, the Company and Keystone Capital agreed to waive all events of default and all claims to related default interest, with the exception of any default interest that accrued prior to July 29, 2024.

(e)	On July 20, 2023, the Company issued a 20% original issue discount Promissory Note to Seven Knots (the “Seven Knots Bridge Note”) with a principal amount of $70,500. The Seven Knots Bridge Note has an annual interest rate of 10% per annum and was issued with a maturity date of July 20, 2024. The Seven Knots Bridge Note contains a “rollover rights” conversion feature that enable the holders to convert all or part of the note’s principal and accrued interest in the event of a public offering or private placement of the Company’s equity, equity linked, or debt securities into purchase consideration for said public or private offering. In the event of default, the Seven Knots Bridge Note accrues interest at a rate of 24% and all outstanding principal must be repaid at an amount equal to 120% of the outstanding principal balance. As of September 30, 2024, the Seven Knots Bridge Note was past its original maturity date. Effective July 29, 2024 and through December 31, 2024, the Company and Seven Knots agreed to waive all events of default and all claims to related default interest, with the exception of any default interest that accrued prior to July 29, 2024.

(f)	On July 24, 2023, the Company issued a 20% original issue discount Promissory Note to an individual investor (the “Individual #2 Bridge Note”) with a principal amount of $300,000. The Individual #2 Bridge Note has an annual interest rate of 10% per annum and was issued with a maturity date of July 20, 2024. The Individual #2 Bridge Note contains a “rollover rights” conversion feature that enable the holders to convert all or part of the note’s principal and accrued interest in the event of a public offering or private placement of the Company’s equity, equity linked, or debt securities into purchase consideration for said public or private offering. In the event of default, the Individual #2 Bridge Note accrues interest at a rate of 24% and all outstanding principal must be repaid at an amount equal to 120% of the outstanding principal balance. As of September 30, 2024, the Individual #2 Bridge Note was past its original maturity date. Effective July 29, 2024 and through December 31, 2024, the Company and the investor agreed to waive all events of default and all claims to related default interest, with the exception of any default interest that accrued prior to July 29, 2024.

(i)	On July 28, 2023, the Company issued a 20% original issue discount Promissory Note to an individual investor (the “Individual #5 – Bridge Note”) with a principal amount of $600,000. The Individual #5 Bridge Note has an annual interest rate of 10% per annum and was issued with a maturity date of July 28, 2024. The Individual #5 Bridge Note contains a “rollover rights” conversion feature that enable the holders to convert all or part of the note’s principal and accrued interest in the event of a public offering or private placement of the Company’s equity, equity linked, or debt securities into purchase consideration for said public or private offering. In the event of default, the Individual #5 Bridge Note accrues interest at a rate of 24% and all outstanding principal must be repaid at an amount equal to 120% of the outstanding principal balance. As of September 30, 2024, the Individual #5 Bridge Note was past its original maturity date. Effective July 29, 2024 and through December 31, 2024, the Company and the investor agreed to waive all events of default and all claims to related default interest, with the exception of any default interest that accrued prior to July 29, 2024.

(j)	On February 28, 2024, the Company issued a 25% original issue discount Promissory Note to Chambers (the “Chambers Bridge Note”) with a principal amount of $62,500. The Chambers Bridge Note has an annual interest rate of 11% per annum and was issued with a maturity date of August 25, 2025. The Chambers Bridge Note contains a “rollover rights” conversion feature that enable the holders to convert all or part of the note’s principal and accrued interest in the event of a public offering or private placement of the Company’s equity, equity linked, or debt securities into purchase consideration for said public or private offering. In the event of default, the Chambers Bridge Note accrues interest at a rate of 24% and all outstanding principal must be repaid at an amount equal to 120% of the outstanding principal balance.

(k)	On February 28, 2024, the Company issued a 25% original issue discount Promissory Note to the Leonard M. Schiller Revocable Trust (the “Schiller Bridge Note”) with a principal amount of $125,000. The Schiller Bridge Note has an annual interest rate of 11% per annum and was issued with a maturity date of August 25, 2025. The Schiller Bridge Note contains a “rollover rights” conversion feature that enable the holders to convert all or part of the note’s principal and accrued interest in the event of a public offering or private placement of the Company’s equity, equity linked, or debt securities into purchase consideration for said public or private offering. In the event of default, the Schiller Bridge Note accrues interest at a rate of 24% and all outstanding principal must be repaid at an amount equal to 120% of the outstanding principal balance.

(l)	Between June 13, 2023 and July 24, 2023, the Company sold and issued two 20% original issue discount Promissory Notes (the “Miller Bridge Notes”) to Miller. The Miller Bridge Notes both have principal amounts of $240,000. The Miller Bridge Notes have an annual interest rate of 10% per annum and were issued with maturity dates ranging from June 13, 2024 to July 24, 2024. The Miller Bridge Note contains a “rollover rights” conversion feature that enables the holders to convert all or part of the Miller Bridge Note’s principal and accrued interest in the event of a public offering or private placement of the Company’s equity, equity linked, or debt securities into purchase consideration for said public offering. In the event of default, the Miller Bridge Notes accrue interest at a rate of 24% and all outstanding principal must be repaid at an amount equal to 120% of the outstanding principal balance. As of September 30, 2024, the Miller Bridge Notes were past their original maturity date. Effective July 29, 2024 and through December 31, 2024, the Company and Miller agreed to waive all events of default and all claims to related default interest, with the exception of any default interest that accrued prior to July 29, 2024.

(m)	On June 13, 2023, the Company sold and issued a 20% original issue discount Promissory Note (the “Titan 5 Bridge Note”) to Titan 5, a stockholder of the Company. The Titan 5 Bridge Note has a principal amount of $120,000, an annual interest rate of 10%, and was issued with a maturity date of June 13, 2024. The Titan 5 Bridge Note contains a “rollover rights” conversion feature that enables the holders to convert all or part of the Titan 5 Bridge Note’s principal and accrued interest in the event of a public offering or private placement of the Company’s equity, equity linked, or debt securities into purchase consideration for said public or private offering. In the event of default, the Titan 5 Bridge Note accrues interest at a rate of 24% and all outstanding principal must be repaid at an amount equal to 120% of the outstanding principal balance. As of September 30, 2024, the Titan 5 Bridge Note was past its original maturity date. Effective July 29, 2024 and through December 31, 2024, the Company and Titan 5 agreed to waive all events of default and all claims to related default interest, with the exception of any default interest that accrued prior to July 29, 2024.

(n)	On December 28, 2023, the Company sold and issued a 20% original issue discount Promissory Note to Frank Celli, a Director of the Company. The Celli Bridge Note has a principal amount of $150,000, an annual interest rate of 10%, and was issued with a maturity date of December 28, 2024. All outstanding principal and accrued interest is to be paid upon maturity. In the event of a Qualified Financing, the Company will be required to repay all outstanding principal and accrued interest. A Qualified Financing is defined as the issuance and sale of equity securities by the Company to investors prior to the maturity date, with total gross proceeds of not less than $5,000,000. Effective July 29, 2024 the maturity date was amended to December 31, 2024. On February 28, 2024, the Company sold and issued a 25% original discount Senior Secured Promissory Note to Frank Celli. The note has a principal amount of $62,500, an annual interest rate of 11%, and was issued with a maturity date of August 31, 2025. The outstanding principal and accrued interest are due upon maturity. These notes are collectively referred to as the “Celli Bridge Notes”. The Celli Bridge Notes contain a “rollover rights” conversion feature that enables the holders to convert all or part of the Celli Bridge Note’s principal and accrued interest in the event of a public offering or private placement of the Company’s equity, equity linked, or debt securities into purchase consideration for said public or private offering. In the event of default, the Celli Bridge Notes accrue interest at a rate of 24% and all outstanding principal must be repaid at an amount equal to 120% of the outstanding principal balance.

(o)	On December 22, 2023, the Company sold and issued a 20% original issue discount Promissory Note (the “FC Advisory Bridge Note”) to FC Advisory, a company owned by a Director of the Company. The FC Advisory Note has a principal amount of $60,000, an annual interest rate of 10%, and was issued with a maturity date of December 22, 2024. All outstanding principal and accrued interest is due upon maturity. The FC Advisory Bridge Note contains a “rollover rights” conversion feature that enables the holders to convert all or part of the FC Advisory Bridge Note’s principal and accrued interest in the event of a public offering or private placement of the Company’s equity, equity linked, or debt securities into purchase consideration for said public or private offering. In the event of default, the FC Advisory Bridge Note accrues interest at a rate of 24% and all outstanding principal must be repaid at an amount equal to 120% of the outstanding principal balance. Effective July 29, 2024 the maturity date of the FC Advisory Bridge Note was amended to December 31, 2024.


Remainder of 2024	$	4,481,000
2025		250,144
Total principal payments		4,731,144
Less: debt discounts		(125,440	)
Total convertible notes payable	$	4,605,704

	Nine Months Ended September 30, 2024			Year Ended December 31, 2023

Expected term (years)		N/A			0.12
Expected volatility		N/A	%		1,288.16	%
Expected dividend yield		N/A	%		0.00	%
Risk-free interest rate		N/A	%		4.79	%

Beginning balance as of December 31, 2023	$	17,500
Change in fair value of warrant - derivative liability		(17,500	)
Ending balance as of September 30, 2024	$	-

	●	Accrued dividends are paid at 105% of the accumulated amount when declared, during liquidation, or upon redemption of the preferred stock. If not paid quarterly on the last day of March, June, September, and December, the dividends will compound until they are paid or converted.
	●	The Company may elect to pay dividends in the form of common stock provided no Equity Conditions Failure has occurred, and such a payment would not cause the holder to exceed the Beneficial Ownership Limitation.

	○	Equity Conditions Failure occurs if certain conditions are not met during a specified period, including the continued listing of common stock on a trading market, timely delivery of shares issuable upon conversion, compliance with trading market rules, and absence of any Triggering Event.

	○	The number of shares issued as a stock dividend is calculated based on the average volume-weighted average price (VWAP) of the common stock.

	●	Conversion rate is based on the Stated Value plus unpaid dividends divided by the Conversion Price.
	●	Initial Conversion Price is $0.05, subject to adjustments.

	●	During a Triggering Event, holders can convert their shares at 125% of the Stated Value plus unpaid dividends.
	●	Conversion is subject to the Beneficial Ownership Limitation.

	●	If the Common Stock price equals or exceeds $1.00 for 20 consecutive Trading Days, with a daily trading volume over $1,000,000, and Equity Conditions are met, the Corporation can mandate conversion.
	●	Mandatory Conversion Notice must be delivered within five Trading Days after the Mandatory Conversion Measuring Period.