Item
1.01. Entry into a Material Definitive Agreement.
On
June 14, 2023, Titan Trucking, LLC, a Michigan limited liability company (“Titan”) and wholly-owned subsidiary of
TraQiQ, Inc. (the “Company,” “we,” “us,” or “our company”),
entered into an Equity Interest Purchase Agreement dated as of June 14, 2023 (the “Purchase Agreement”) by and among
Titan, Ryan Stansley, Scott Stansley, Jr., Kristin Stansley and Richard Boyce Stansley (each, an “Equityholder” and,
collectively, the “Equityholders”), and Recycle Waste Services, Inc., an Ohio corporation (“RWS”),
pursuant to which, subject to the terms and conditions of the Purchase Agreement, Titan will acquire all of the equity interests of RWS.
RWS
is an environmentally-responsible waste and recycling hauler
and service provider based in Sylvania, Ohio. The company specializes in waste facility
management and the provision of roll off, long haul and waste diversion services throughout Northwest Ohio and Southeast Michigan.
Through the management of multiple waste processing facilities for both Fortune 500 and municipal customers and provision of its
waste collection and hauling services, RWS achieved revenue of over $22,000,000 in 2022.
Operating over 150 pieces of equipment, RWS collected, processed and transported over one million tons
of waste in 2022. RWS works with recycling partners to allow them to maximize
diversion of recyclable materials away from landfills.
Pursuant
to the terms of the Purchase Agreement, at the completion of the transactions contemplated therein, Titan will acquire all right,
title and interest in and to all of the issued and outstanding equity interests of RWS for a purchase price consisting of the sum of
(i) $18,852,078 in cash, (ii) 8,642,011 shares of our common stock, subject to adjustment if the ten-day moving average price of our
common stock immediately prior to the closing of the transaction is less than $0.74 per share, (iii) an amount equal to the aggregate
amount paid by RWS between October 13, 2022 and the closing date under the Purchase Agreement, but not to exceed $902,000, for replacement
equipment that is purchased and put in use on the closing date or within 90 days thereof, which amount will be offset by
the sum of any Indebtedness (as defined in the Purchase Agreement) of RWS at the time of the closing, (iv) and the assumption
of certain capital lease obligations of RWS for equipment used in the business that are not paid prior to closing.
The purchase price will be subject to adjustment for certain post-closing working capital and other adjustments. Titan may also
be obligated to pay additional post-closing consideration in an amount up to $1,500,000, which will be payable 50% in cash and
50% in shares of our common stock, if the EBITDA (as defined as defined in the Purchase Agreement) of RWS for the year ending
December 31, 2023 exceeds $5,138,066, and an additional amount equal to $750,000 if we or any of our affiliates acquires a specific
industry participant within three years of the closing date. An aggregate of approximately $300,000 of the purchase price payable at
closing will be held in an escrow fund for purposes of satisfying any post-closing indemnification claims of the sellers under the Purchase
Agreement.
The
Purchase Agreement contains customary representations, warranties and covenants of the Equityholders, RWS, and Titan, including, among
others, covenants by RWS and the Equityholders with respect to the operations of RWS during the period between execution of the Purchase
Agreement and the completion of the transaction. The Purchase Agreement also provides that each party will indemnify the other party
for breaches of the warranties and covenants of such party, as well as certain other matters, subject to certain specified limitations,
including, among other things, limitations on the period during which a party may make certain claims for indemnification and limitations
on the amounts for which a party may be liable.
The
closing of the transactions contemplated by the Purchase Agreement is subject to the satisfaction of certain closing conditions, including,
among others, that Titan will have received financing to fund the cash portion of the purchase price payable at closing. The Purchase
Agreement also provides for certain limited termination rights, including, among others, by the mutual consent of Titan and RWS and
by either Titan or RWS upon the breach of certain representations, warranties, covenants or agreements by the other
party.
The
foregoing description of the Purchase Agreement does not purport to be complete and is subject to, and qualified in its entirety by reference
to, the full text of the Purchase Agreement, a copy of which is attached hereto as Exhibit 10.1, which is incorporated herein by reference
thereto.
The
Purchase Agreement has been filed as an exhibit hereto to provide investors and security holders with information regarding its terms
and is not intended to provide any factual information about Titan or RWS. The representations, warranties and covenants set forth in
the Purchase Agreement were made solely between the parties to the Purchase Agreement and may be subject to important qualifications
and limitations agreed to by the parties in connection with negotiating its terms, including being qualified by confidential disclosures
exchanged between the parties in connection with the execution of the Purchase Agreement. Moreover, the representations and warranties
may be subject to a contractual standard of materiality that may be different from what may be viewed as material to investors or security
holders or may have been used for the purpose of allocating risk between the parties to the Purchase Agreement rather than establishing
matters as facts. Information concerning the subject matter of the representations and warranties may change after the date of the Purchase
Agreement, which subsequent information may or may not be fully reflected in our public disclosures. For the foregoing reasons, no person
should rely on the warranties as statements of factual information at the time they were made or otherwise.