10-Q - Titan Environmental Solutions Inc. (0001514056) (Filer)

Tue, May 20, 8:11 PM (60 days ago)

**Ticker:** TESI **Summary of Titan Environmental Solutions Inc. (TESI) Q1 2025 Financial Performance:** **Revenue and Profit Margins:** - **Revenue:** $1,750,172,000 (up 47% YoY). - **Gross Loss:** $(188,595,000) (improved by 32% YoY). - **Operating Expenses:** $1,807,017,000 (up 11% YoY). - **Net Loss:** $(5,335,697,000) (up 136% YoY). **Cash Flow:** - **Net Cash Used in Operating Activities:** $(1,887,288,000). - **Net Cash Provided by Financing Activities:** $1,884,291,000. - **Net Increase in Cash:** $72,003,000. **Earnings Changes:** - **Net Loss from Continuing Operations:** $(5,335,697,000) (up 127% YoY). - **Net Income from Discontinued Operations:** $0 (down 100% YoY). **Quarterly Performance Discussion:** - **Revenue Growth:** Driven by the acquisition of Standard Waste Services, LLC (SWS) and expansion of operations. - **Cost of Revenue:** Increased due to higher operational costs from the combined operations of TESI and SWS. - **Operating Expenses:** Stock-based compensation and interest expenses were significant contributors to the increase. - **Interest Expense:** Increased significantly due to higher debt levels and refinancing activities. - **Net Loss:** Primarily due to increased interest expenses and higher operational costs. **Trends and Uncertainties:** - **Positive Trends:** Revenue growth and operational expansion. - **Uncertainties:** High debt levels, significant interest expenses, and operational costs. **Future Operations Impact:** - **Liquidity:** Continued reliance on debt and equity financing. - **Capital Expenditures:** Expected to increase with operational expansion. - **Financial Health:** Substantial doubt about the ability to continue as a going concern due to high debt and negative working capital. **Segment Analysis:** - **Trucking Segment:** Primary revenue generator and focus of operational expansion. **Adjusted EBITDA:** - **Adjusted EBITDA:** $(1,268,797,000) (improved from $(1,728,685,000) in Q1 2024). **Liquidity and Capital Resources:** - **Cash Position:** $74,980,000 as of March 31, 2025. - **Working Capital:** Negative $20,432,686,000 as of March 31, 2025. - **Debt Obligations:** Significant short-term debt obligations. **Cash Flows:** - **Operating Activities:** Primarily used to fund net loss and non-cash expenses. - **Investing Activities:** Minimal investing activities. - **Financing Activities:** Significant cash inflows from debt and equity financing. **Critical Accounting Policies:** - **Business Combinations:** Acquisition of SWS and related goodwill. - **Convertible Instruments:** Evaluation of convertible notes and warrants. - **Stock-Based Compensation:** Valuation of stock awards and warrants. **Legal and Regulatory:** - **Legal Proceedings:** Ongoing litigation and settlements. - **Regulatory Compliance:** Adherence to environmental and safety regulations. **Conclusion:** TESI's Q1 2025 financial performance reflects significant revenue growth driven by strategic acquisitions and operational expansion. However, the company faces substantial financial challenges, including high debt levels, significant interest expenses, and negative working capital. The future outlook depends on the company's ability to manage its debt, generate positive cash flow, and execute its strategic plans effectively.