Form 10-Q Quarterly Report for the quarterly period ended March 31, 2023 — TraQiQ, Inc. (Commission File Number 000-56148)

Full text

UNITED
STATES

SECURITIES
AND EXCHANGE COMMISSION

WASHINGTON,
DC 20549

FORM 10-Q

(Mark
One)

☒ | QUARTERLY
REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For
the quarterly period ended March 31, 2023

☐ | TRANSITION
REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For
the transition period from _____________ to _____________

Commission
File Number: 000-56148

TRAQIQ,
INC.

(Exact
Name of Registrant as Specified in Its Charter)

California | 30-0580318
(State
or Other Jurisdiction of Incorporation
or Organization) | (I.R.S.
Employer Identification
No.)
14205
SE 36th Street , Suite 100 , Bellevue , WA | 98006
(Address
of Principal Executive Office) | (Zip
Code)

(425) 818-0560

(Registrant’s
Telephone Number, Including Area Code)

(Former
name, former address and former fiscal year, if changed since last report)

Securities
registered pursuant to Section 12(b) of the Act: None.

Title
of Each Class | Trading
Symbol | Name
of Each Exchange on which registered

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

Common
Stock, $.0001 par value per share

(Title
of class)

Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act ☐ Yes ☒ No

Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ☐ Yes ☒
No

Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant
to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files). ☐ Yes ☒ No

Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non- accelerated filer, or a smaller reporting
company. See the definitions of “large accelerated filer”, “accelerated filer”, “non-accelerated filer”,
“smaller reporting company” and “emerging growth” in Rule 12b-2 of the Exchange Act.

Large
Accelerated filer ☐ | Accelerated
filer ☐
Non-accelerated
filer ☐ | Smaller
reporting company ☒
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. ☐

Indicate
by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report. ☐

Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

The
number of shares of the Registrant’s common stock, $0.0001 par value per share, outstanding as of May 17, 2023, was 33,939,965 .

Documents
incorporated by reference: | None

TRAQIQ,
INC

INDEX

FORWARD-LOOKING
STATEMENTS

Except
for any historical information contained herein, the matters discussed in this quarterly report on Form 10-Q contain certain “forward-looking
statements’’ within the meaning of the federal securities laws. This includes statements regarding our future financial position,
economic performance, results of operations, business strategy, budgets, projected costs, plans and objectives of management for future
operations, and the information referred to under “Management’s Discussion and Analysis of Financial Condition and Results
of Operations.”

These
forward-looking statements generally can be identified by the use of forward-looking terminology, such as “may,’’ “will,’’
“expect,’’ “intend,’’ “estimate,’’ “anticipate,’’ “believe,’’
“continue’’ or similar terminology, although not all forward-looking statements contain these words. These forward-looking
statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management’s
beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control.
Accordingly, you are cautioned that any such forward-looking statements are not guarantees of future performance and are subject to certain
risks, uncertainties and assumptions that are difficult to predict. Although we believe that the expectations reflected in such forward-looking
statements are reasonable as of the date made, expectations may prove to have been materially different from the results expressed or
implied by such forward-looking statements. Important factors that may cause actual results to differ from projections include, for example:

● | the
success or failure of management’s efforts to implement our business plan;
● | our
ability to fund our operating expenses;
● | our
ability to compete with other companies that have a similar business plan;
● | the
effect of changing economic conditions impacting our plan of operation; and
● | our
ability to meet the other risks as may be described in future filings with the Securities and Exchange Commission (the “SEC”).

Unless
otherwise required by law, we also disclaim any obligation to update our view of any such risks or uncertainties or to announce publicly
the result of any revisions to the forward-looking statements made in this quarterly report on Form 10-Q.

When
considering these forward-looking statements, you should keep in mind the cautionary statements in this quarterly report on Form 10-Q
and in our other filings with the SEC. We cannot assure you that the forward-looking statements in this quarterly report on Form 10-Q
will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may prove to be material.
In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation
or warranty by us or any other person that we will achieve our objectives and plans in any specified time-frame, or at all.

Item
1. Financial Statements

Page
No.
Condensed
Consolidated Balance Sheets as of March 31, 2023 (unaudited) and December 31, 2022 | 5
Condensed
Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three Months Ended March 31, 2023 and 2022 (unaudited) | 6
Condensed
Consolidated Statement of Changes in Stockholders’ Equity (Deficit) for the Three Months Ended March 31, 2023 and 2022 (unaudited) | 7
Condensed
Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2023 and 2022 (unaudited) | 8
Notes
to Condensed Consolidated Financial Statements (unaudited) | 9
4

TRAQIQ,
INC. AND SUBSIDIARIES

CONDENSED
CONSOLIDATED BALANCE SHEETS

MARCH
31, 2023 (UNAUDITED) AND DECEMBER 31, 2022

IN
USD

March
31, | December
31,
2023 | 2022
ASSETS
Current Assets:
Cash | $ | 139,573 | $ | 1,312
Accounts
receivable, net | 65,869 | -
Prepaid
expenses and other current assets | 11,025 | 65,148
Inventory | 359,845 | -
Total
Current Assets | 576,312 | 66,460
Fixed assets,
net | 1,156 | -
Intangible
assets, net | 10,446,668 | -
Goodwill | 7,292,885 | -
Total
Non-current Assets | 17,740,709 | -
TOTAL
ASSETS | $ | 18,317,021 | $ | 66,460
LIABILITIES
AND STOCKHOLDERS’ EQUITY (DEFICIT)
LIABILITIES
Current Liabilities:
Accounts
payable and accrued expenses | $ | 932,348 | $ | 226,178
Contract
liabilities | 311,544 | -
Accrued
payroll and related taxes | 118,750 | 24,221
Derivative
liability | 112,333,348 | 216,593
Current
portion - long-term debt - related parties | - | 400,000
Notes payable | 3,607,480 | 751,886
Convertible notes payable, net of discounts | 162,094 | 63,781
Total
Current Liabilities | 117,465,564 | 1,682,659
Total
Liabilities | 117,465,564 | 1,682,659
STOCKHOLDERS’
EQUITY (DEFICIT)
Convertible
preferred stock, par value $ 0.01 , 10,000,000 shares authorized:
Preferred
stock, par value, $ 0.0001 , Series A Convertible Preferred, 0 shares issued and outstanding | - | -
Preferred
stock, par value, $ 0.0001 , Series B Convertible Preferred, 1,470,135 and 220,135 shares issued and outstanding, respectively | 147 | 22
Common
stock, par value, $ 0.0001 , 300,000,000 shares authorized, 33,939,965 and 18,103,039 issued and outstanding, respectively | 3,394 | 1,810
Additional
paid in capital | 30,234,923 | 15,904,755
Accumulated
deficit | ( 129,387,007 | ) | ( 17,522,786 | )
Accumulated
other comprehensive income | - | -
Total
Stockholders’ Deficit | ( 99,148,543 | ) | ( 1,616,199 | )
TOTAL
LIABILITIES AND STOCKHOLDERS’ DEFICIT | $ | 18,317,021 | $ | 66,460
5

TRAQIQ,
INC. AND SUBSIDIARIES

CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

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

IN
USD

Three
Months Ended
March
31,
2023 | 2022
REVENUE | $ | 65,040 | $ | 522
COST
OF REVENUES | 37,216 | 11,416
GROSS
PROFIT | 27,824 | ( 10,894 | )
OPERATING
EXPENSES
Salaries
and salary related costs | 170,530 | 100,016
Professional
fees | 31,951 | 88,051
Rent expense | 473 | 610
Depreciation
and amortization expense | 409,788 | -
General
and administrative expenses | 112,242 | 27,309
Total
Operating Expenses | 724,984 | 215,986
OPERATING
LOSS | ( 697,160 | ) | ( 226,880 | )
OTHER INCOME
(EXPENSE)
Change
in fair value of derivative liability | ( 16,828,293 | ) | -
Derivative
expense | ( 94,183,461 | ) | -
Interest
expense, net of interest income | ( 156,562 | ) | ( 464,180 | )
Other
income | 1,255 | -
Total
other expense | ( 111,167,061 | ) | ( 464,180 | )
NET LOSS
FROM CONTINUING OPERATIONS, BEFORE PROVISION FOR INCOME TAXES | ( 111,864,221 | ) | ( 691,060 | )
Provision
for income taxes – continuing operations | - | -
NET LOSS
FROM CONTINUING OPERATIONS | ( 111,864,221 | ) | ( 691,060 | )
NET LOSS
FROM DISCONTINUED OPERATIONS, BEFORE PROVISION FOR INCOME TAXES | - | ( 6,861,234 | )
Provision
for income taxes – discontinued operations | - | 5,679
NET
LOSS FORM DISCONTINUED OPERATIONS | - | ( 6,866,913 | )
NET LOSS | ( 111,864,221 | ) | ( 7,557,973 | )
NET
INCOME ATTRIBUTABLE TO PRIOR NON-CONTROLLING INTEREST | - | 1,305
NET
LOSS ATTRIBUTABLE TO CONTROLLING INTEREST | $ | ( 111,864,221 | ) | $ | ( 7,559,278 | )
Other comprehensive loss
Foreign currency translations
adjustment | - | 103,298
Comprehensive
loss | $ | ( 111,864,221 | ) | $ | ( 7,455,980 | )
Basic
and diluted loss from continuing operations per share | $ | ( 3.38 | ) | $ | ( 0.17 | )
Basic
and diluted loss from discontinued operations per share | $ | - | $ | ( 1.65 | )
Basic
and diluted net loss per share | $ | ( 3.38 | ) | $ | ( 1.81 | )
Weighted
average common shares outstanding - basic and diluted | 33,060,136 | 4,173,008

The
accompanying notes are an integral part of these condensed consolidated financial statements.

TRAQIQ,
INC. AND SUBSIDIARIES

CONDENSED
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

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

IN
USD

Additional | Accumulated
Series
A Preferred | Series
B Preferred | Common
Stock | Paid-In
Capital - | Accumulated | Other
Comprehensive | Non-controlling
Shares | Amount | Shares | Amount | Shares | Amount | Common | Deficit | Income
(Loss) | Interest | Total
Balance
– January 1, 2022 | - | $ | - | - | $ | - | 4,171,638 | $ | 417 | $ | 6,508,931 | $ | ( 8,953,768 | ) | $ | 30,605 | $ | ( 4,488 | ) | $ | ( 2,418,303 | )
Fractional
share adjustment | - | - | - | - | 1,370 | - | - | - | - | - | -
Stock-based
compensation on granting of options | - | - | - | - | - | - | 18,223 | - | - | - | 18,223
Stock-based
compensation for restricted stock grants (shares not issued) | - | - | - | - | - | - | 33,208 | - | - | - | 33,208
Warrants
earned for acquisition of Mimo | - | - | - | - | - | - | 410,112 | - | - | - | 410,112
Net
loss for the three months ended March 31, 2022 | - | - | - | - | - | - | - | ( 917,348 | ) | 103,298 | ( 1,305 | ) | ( 815,355 | )
Balance
– March 31, 2022 | - | - | - | - | 4,173,008 | 417 | 6,970,474 | ( 9,871,116 | ) | 133,903 | ( 5,793 | ) | ( 2,772,115 | )
Balance
– January 1, 2023 | - | - | 220,135 | 22 | 18,103,039 | 1,810 | 15,904,755 | ( 17,522,786 | ) | - | - | ( 1,616,199 | )
Shares
issued to settle debt | - | - | - | - | 150,000 | 15 | 1,740 | - | - | - | 1,755
Shares
issued as consideration for the acquisition of Recoup | - | - | 1,250,000 | 125 | 15,686,926 | 1,569 | 14,278,880 | - | - | - | 14,280,574
Share-based
compensation for restricted stock grants (shares not issued) | - | - | - | - | - | - | 49,548 | - | - | - | 49,548
Net
loss for the three months ended March 31, 2023 | - | - | - | - | - | - | - | ( 111,864,221 | ) | - | - | ( 111,864,221 | )
Balance
– March 31, 2023 | - | $ | - | 1,470,135 | $ | 147 | 33,939,965 | $ | 3,394 | $ | 30,234,923 | $ | ( 129,387,007 | ) | $ | - | $ | - | $ | ( 99,148,543 | )

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

TRAQIQ,
INC. AND SUBSIDIARIES

CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

FOR
THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022

IN
USD

Three Months Ended March 31,
2023 | 2022
CASH FLOW
FROM OPERTING ACTIVIITES
Net
loss | $ | ( 111,864,221 | ) | $ | ( 917,348 | )
Adjustments
to reconcile net loss to net cash (used in) operating activities
Change
in non-controlling interest | - | ( 1,305 | )
Bank service
charges capitalized to defaulted debt principal | 4,073 | -
Bad debt
expense | 52,110 | -
Forgiveness of debt | - | ( 15,401 | )
Depreciation
and amortization | 250,994 | 24,914
Lease
cost, net of repayment | - | 1,807
Foreign
currency (gain) loss | - | ( 11,092 | )
Stock-based
compensation | 49,548 | 51,431
Change
in fair value of derivative liability and derivative expense | 111,011,754 | ( 8,190 | )
Fees paid
in debt financing | - | 3,250
Amortization
of discounts and convertible options on debt | 158,794 | 292,777
Gain on
sale of assets | - | ( 8 | )
Changes
in assets and liabilities
Accounts
receivable | ( 117,979 | ) | 45,052
Prepaid
expenses and other current assets | 54,123 | 21,712
Inventory | 19,873
Accounts
payable, accrued expenses and deferred taxes | 93,957 | 84,422
Accrued
payroll and payroll taxes | 94,529 | 6,557
Accrued
duties and taxes | - | 22,034
Total
adjustments | 111,671,776 | 517,960
Net
cash (used in) operating activities | ( 192,445 | ) | ( 399,388 | )
CASH FLOWS
FROM INVESTING ACTIVITES
Cash received
in acquisition of Recoup | ( 150,000 | ) | -
Acquisition
of fixed assets | - | ( 25,574 | )
Net
cash (used in) provided by investing activities | ( 150,000 | ) | ( 25,574 | )
CASH FLOWS
FROM FINANCING ACTIVITES
Increase
in cash overdraft | - | 48,400
Proceeds
from convertible notes | 705,000 | -
Repayments
of convertible notes | ( 60,480 | ) | -
Proceeds
from long-term debt - related parties | - | 205,836
Repayment
of long-term debt - related parties | - | ( 63,973 | )
Proceeds
from notes payable | - | 344,652
Repayments
of note payable | ( 163,814 | ) | ( 58,615 | )
Net
cash provided by financing activities | 480,706 | 476,300
NET INCREASE
IN CASH AND RESTRICTED CASH | 138,261 | 51,338
CASH
AND RESTRICTED CASH - BEGINNING OF PERIOD | 1,312 | 170,528
CASH
AND RESTRICTED CASH - END OF PERIOD | $ | 139,573 | $ | 221,866
CASH PAID
DURING THE PERIOD FOR:
Interest
expense | $ | 986 | $ | 7,991
Income
taxes | $ | - | $ | 5,679
SUMMARY
OF NON-CASH ACTIVITIES:
Right of
use asset for lease liability | - | 331,154
Original
issue discount recognized on new convertible notes | 221,000 | -
Shares
issued for debt settlement | 1,755 | -
Acquisition of Recoup:
Inventory | $ | 379,718 | $ | -
Fixed
assets | 1,196 | -
Intangible
assets | 10,697,622 | -
Accounts
payable and accrued expenses | ( 612,213 | ) | -
Customer
deposits | ( 311,544 | ) | -
Current
portion - long-term debt | ( 3,017,090 | ) | -
Total
net assets acquired | 7,137,689 | -
Consideration
paid in cash | ( 150,000 | )
Consideration
per Share Exchange Agreement | ( 14,280,574 | ) | -
Total
Consideration | ( 14,280,574 | ) | -
Goodwill | $ | ( 7,292,885 | ) | $ | -

The
accompanying notes are an integral part of these condensed consolidated financial statements.

TRAQIQ,
INC.

NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN
USD)

(UNAUDITED)

NOTE
1 – ORGANIZATION AND NATURE OF OPERATIONS

TraQiQ,
Inc. (along with its wholly owned subsidiaries, referred to herein as the “Company”) was incorporated in the State of California
on September 9, 2009 as Thunderclap Entertainment, Inc. On July 14, 2017, Thunderclap Entertainment, Inc. changed its name to TraQiQ,
Inc. On July 19, 2017, the Company entered into a Share Exchange Agreement (“Share Exchange”) with the stockholders of OmniM2M,
Inc. (“OmniM2M”) and TraQiQ Solutions, Inc. dba Ci2i Services, Inc. (formerly Ci2i Services, Inc. – amended November
6, 2019) (“Ci2i”) whereby the stockholders of Omni and Ci2i exchanged all of their respective shares, representing 100 % ownership
in OmniM2M and Ci2i in exchange for 1,500,000 shares of the Company’s common stock, respectively. The OmniM2M Shareholders and
the Ci2i Shareholders have each been issued their respective 1,500,000 shares on a pro rata basis based on their respective holdings
in OmniM2M and Ci2i in the Share Exchange Agreement. The Share Exchange was accounted for as a reverse merger whereas Ci2i is considered
the accounting acquirer and TraQiQ,Inc. is considered the accounting acquiree. For accounting purposes, the acquisition of Omni is recorded
at historical cost in accordance with Accounting Standard Codification (“ASC”) 805-50-25-2 as this is considered an acquisition
of entities under common control as the management of the Company and Omni control the activities of the respective companies. Prior
to the merger with Ci2i and acquisition of Omni, the Company was considered a shell company under Rule 12b-2 of the Exchange Act. On
December 1, 2017, The Company entered into a Share Purchase Agreement (the “Share Exchange Agreement”) with Ajay Sikka (“Sikka”),
the sole shareholder of Transport IQ, Inc. whereby Sikka agreed to sell all of the shares in TransportIQ, Inc. (“TransportIQ”)
in exchange for $ 18,109 , in the form of cancellation of all of the debt of TransportIQ that is owed to the Company. The transaction became
effective upon the execution of the Share Exchange Agreement by Sikka and the Company; and Transport IQ, Inc, is now a wholly-owned subsidiary
of the Company. Because TransportIQ was commonly controlled and owned, the transaction was recorded at the historical carrying value
of TransportIQ’s assets and liabilities.

The
Financial Industry Regulatory Authority on March 18, 2022, approved a reverse 1 for 8 stock split of the Company’s common shares.
The reverse split was effective on March 21, 2022. The common shares and common share equivalents as well as the per-share amounts have
been retroactively restated in accordance with ASC 855-10-25 and the loss per share figures have been retroactively restated in accordance
with ASC 260-10-55-12.

On
January 5, 2023, the Company consummated the transactions contemplated by the Asset Purchase Agreement dated as of December 30, 2022
(the “Purchase Agreement”) among Renovare Environmental, Inc. (“REI”) and BioHiTech America, LLC (“BHT”
and, together with REI, the “Renovare Sellers”) and us, pursuant to which the Renovare Sellers sold and assigned to us, and
we purchased and assumed from the Renovare Sellers, (a) certain assets related to the business of (i) aerobic digestion technology solutions
for the disposal of food waste at the point of generation and (ii) data analytics with respect to food waste (collectively, the “Digester
Business”) and (b) certain specified liabilities of the Renovare Sellers. The Company intends for the Digester Business to be one
of our principal businesses going forward, and the Company intends to supplement our current business through the acquisition of complementary
businesses.

Overview
of the Company

Our
mission is to reduce the environmental impact of the waste management industry through the development and deployment of cost-effective
technology solutions. Our suite of technologies includes on-site biological processing equipment for food waste and proprietary real-time
data analytics tools to reduce food waste generation. These proprietary solutions may enable certain businesses and municipalities of
all sizes to lower disposal costs while having a positive impact on the environment. When used individually or in combination, we believe
that our solutions can reduce the carbon footprint associated with waste transportation, repurpose non-recyclable plastics, and significantly
reduce landfill usage. As we continue to expand our waste management business we plan to discontinue or spin off the remaining portions
of the legacy business.

The
Company currently markets an aerobic digestion technology solution for the disposal of food waste at the point of generation. Its line
of Revolution Series Digesters has been described as self-contained, robotic digestive systems that we believe are as easy to install
as a standard dishwasher with no special electrical or plumbing requirements. Units range in size depending upon capacity, with the smallest
unit approximately the size of a residential washing machine. The digesters utilize a biological process to convert food waste into a
liquid that we believe is safe to discharge down an ordinary drain. This process can result in a substantial reduction in costs for customers
including cruise lines, restaurants, retail stores, hospitals, hotel/hospitality companies and governmental units by eliminating the
transportation and logistics costs associated with food waste disposal. The Company also expects the process reduce the greenhouse gases
associated with food-waste transportation and decomposition in landfills that have been linked to climate change. The Company offers
its Revolution Series Digesters in several sizes targeting small- to mid-sized food waste generation sites that are often more economical
than traditional disposal methods. The Revolution Series Digesters are manufactured and assembled in the United States.

In
an effort to expand the capabilities of its digesters, the Company developed a sophisticated Internet of Things (“IoT”) technology
platform to provide its customers with transparency into their internal and supply chain waste generation and operational practices.
This patented process collects weight related data from the digesters to deliver real-time data that provides valuable information that
when analyzed, can improve efficiency, and validate corporate sustainability efforts. The Company provides its IoT platform through a
SaaS (“Software as a Service”) model that is either bundled in its rental agreements or sold through a separate annual software
license. The Company continues to add new capacity sizes to its line of Revolution Series Digesters to meet customer needs.

Legacy
Business

TraQiQ
Solutions Private Limited

On
May 16, 2019, the Company entered into a Share Exchange Agreement with Mann-India Technologies Private Ltd., an Indian Corporation (“Mann”).
On January 2, 2020, Mann changed its name to TraQiQ Solutions Private Limited (“TRAQ Pvt Ltd”). Pursuant to the Share Exchange
Agreement with Mann, the Company acquired 100 % of the shares of Mann and assumed certain net liabilities in exchange for warrants exercisable
over a five -years to purchase 166,159 shares of common stock of the Company valued at $ 268 . The warrants will be exercisable as follows:
(i) 12,596 warrants immediately; (ii) 107,494 warrants exercisable one-year after the date of closing, which was extended to March 31,
2021; and (iii) 46,069 warrants exercisable two-years after the date of closing. This transaction is being recorded as a business combination
under ASC 805. There were 56,400 of these warrants exercised during 2021 and 57,368 warrants remain outstanding as of March 31, 2022.

The
warrants that are exercisable in one-year and two-years are conditioned upon TRAQ Pvt Ltd. achieving certain revenue figures and pre-tax
profit percentages. TRAQ Pvt Ltd. must achieve target revenue of $ 1.1 million (US$) and pre-tax profit of 25 % (US$). Should TRAQ Pvt
Ltd. be unable to achieve these criteria, the warrants will be reduced proportionately. A total of 52,391 of these warrants were cancelled
effective May 16, 2021 as a result of these criteria not being achieved.

Mann-India
Private limited was renamed to TraQiQ Solutions Private Limited shortly after acquisition by TraQiQ Inc.

TRAQ
Pvt Ltd. was established in May 2000 and is headquartered in New Delhi, India. TRAQ Pvt Ltd. is a leading software development company
which, with the advent of technology, has evolved as a mature and fast-growing company committed to provide reliable and cost-effective
software solutions across industries all over the world.

TRAQ
Pvt Ltd. has its own experienced team of software developers dedicated towards developing various kinds of customized software.

TraQ
Pvt Ltd. has been doing business around the world for over 15 years, with particular emphasis on Latin America and India. The customer
list includes large enterprise Finance and Insurance companies across Latin America. The company’s product portfolio has evolved
rapidly and now includes enterprise ready solutions for payment processing, mobile wallets, micro lending solutions and digital transformation.

On
December 30, 2022, the Company entered into an Assignment of Stock (the “TSP Agreement”) with TraQiQ Solutions Private Ltd.
(“TSP”) and LR, pursuant to which the Company sold, assigned and transferred to LR and LR purchased from the Company, all
of the equity interests in TSP in exchange for nominal consideration of $ 1.00 .

Rohuma,
LLC

On
January 22, 2021, the Company entered into a Share Exchange Agreement with Rohuma, LLC, a Delaware limited liability company (“Rohuma”)
and its members, whereby the Rohuma members agreed to exchange all of their respective membership interests in Rohuma in exchange for 536,528 shares of common stock, of which the first tranche of shares were issued on March 1, 2021 totaling 320,285 shares, with the remaining
value reflected as contingent consideration until the shares vest at which time they will be issued. The transaction was valued at $ 3,433,776 ($ 6.40 per share). The Company as of March 31, 2022, determined that the second tranche of shares ( 134,132 ) met the criteria to be issued,
and the value of $ 858,445 was reclassified from contingent consideration to Obligation to Issue Common Stock. Rohuma has an Indian affiliate
that is owned 99 % by Rohuma and 1 % by its founding member. Rohuma controls this entity and the 1% ownership by the member is now less
than 1% upon acquisition by the Company. This amount is reflected as a non-controlling interest.

Rohuma
dba Kringle.ai was a California based software solutions company that enabled digital and mobile commerce by providing enterprise class
applications that cover loyalty and rewards products, payments, online ordering, distribution logistics for retail and more. Kringle
analyzed customers’ omni-channel behaviors and transactions. Using AI for digital commerce, Kringle was able to deliver real time,
automated 1:1 recommendations and personalized content across all customer touch points.

On
December 30, 2022, the Company entered into an Assignment of Units (the “Rohuma Agreement”, and, together with the MTP Agreement
and the TSP Agreement, the “Disposition Agreements”) with Rohuma LLC (“Rohuma”) and Happy Kompany LLC (“Happy”)
pursuant to which the Company sold, assigned and transferred to Happy, and Happy purchased from the Company, all of the equity interests
in Rohuma in exchange for nominal consideration of $ 1.00 . Pursuant to the Rohuma Agreement, the Company assumed the liabilities of Rohuma
with respect to two loans with Paypal/Loanbuilder in an aggregate principal amount of $ 155,053 plus any accumulated interest and fees.

Mimo
Technologies Private Limited

On
February 17, 2021, the Company entered into a Share Exchange Agreement with Mimo Technologies Private Ltd., and Indian corporation (“Mimo”)
and its shareholders, whereby the Mimo shareholders agreed to exchange all of their respective shares in Mimo in exchange for warrants
to purchase 170,942 shares of the Company’s common stock. Of these warrants, 102,565 were earned at the date of acquisition, with
the remaining 68,377 expected to be earned over the next two years from grant based on revenue goals for Mimo. The warrants have a term
of three years and an exercise price of $ 0.008 and value in the amount of $ 1,640,447 , of which $ 984,268 is reflected in additional paid
in capital, with the remaining $ 656,179 reflected as contingent consideration. The Company as of March 31, 2022, determined that the
criteria for vesting of the second tranche of warrants was satisfied and reclassified $ 410,112 from contingent consideration to additional
paid in capital. In addition to the issuance of the warrants, TRAQ Pvt Ltd, wrote off $ 258,736 in amounts due from a note receivable,
$ 123,778 in accounts receivable and $ 40,354 in a debenture from Mimo. In addition, a cash payment was made to one of the minority shareholders
of Mimo in the amount of $ 22,338 . The Company acquired over 99% of Mimo with the remaining percentage of less than 1% reflected as a
non-controlling interest.

TraQiQ
operated the Mimo delivery and task service in India. This service ran on the TraQSuite platform. Mimo had 14,000+ independent contractors
across India performing deliveries and fulfilling tasks for the largest corporations in the country. Our team at Mimo used a sophisticated
technology platform and a smartphone app to get their tasks completed. This was coupled with a verification and billing system that allowed
customers of all sizes to leverage this distribution infrastructure.

Mimo
offered a broad set of services. These offerings could be classified into three broad categories:

● | Data
collection and client verification (surveys, verification, on-boarding),
● | Cash
management & handling services, and
● | Distribution
and demand generation (order fulfilment, demand generation, delivery services for e-commerce companies)

Mimo
assisted the delivery and pickup segment of the banking and insurance industry by performing verifications, field investigations for
loan requests, business verifications and employment verification, and also collected documents, assisted in filling forms for banks,
and completed data collection from customers.

Mimo
worked with microfinance institutions to collect cash, such as loan payments, convert cash to digital means like debit cards, and conduct
data collection and surveys.

For
consumer goods companies, Mimo did promotional marketing, Last mile (hyper-local) delivery, merchant onboarding or activation, store
audits, and route optimization for delivery. Mimo provided efficient end-to-end transshipment logistics. The framework managed and optimized
last-mile delivery & e-commerce logistics across the entire distribution chain with transparency and seamless integration.

During
the COVID-19 pandemic, Mimo leveraged video as a platform for verification and document delivery.

There
were also data digitization tasks being done by Mimo task workers across the country. In a country like India where there are over 20
languages and multiple dialects, the task workers converted paper documents into electronic form in the same language or translated them
into another language.

Mimo
provided delivery and task worker solutions across India. Mimo works with Banking, Financial, Logistics and Distribution companies, to
take their products and services to semi-urban and rural India. Mimo trained the agents in each Product or Service through an online
and classroom training platform. The company powered the gig economy task workers throughout the country and provided a very valuable
source of employment for young people who may or may not have a high school diploma.

On December 30, 2022, the Company entered into an Assignment of Stock (the “MTP Agreement”) with Mimo Technologies Private
Ltd. (“MTP”) and Lathika Regunathan (“LR”), pursuant to which the Company sold, assigned and transferred to LR,
and LR purchased from the Company, all of the Company’s equity interests in MTP in exchange for nominal consideration of $ 1.00 .

TraQSuite
is a cloud based software platform with a revenue model based on initial and transaction-based licensing fees as well as consulting fees.
Licensees pay an initial per-module fee that varies depending on the number of modules that are licensed.

The
Company’s TraQSuite software platform powers the last mile distribution network, allowing business users to target customers, facilitate
and validate transactions, track and manage task workers, manage funds and run a distribution network. Key features of the TraQSuite
software include:

● | Last
Mile delivery : TraQSuite’s Last-Mile software module enables a business to manage thousands of task workers across
multiple geographies to deliver products and services to the users. The software platform, operating through mobile apps, allows
for data sharing, delivery validation, geo-tagging and know-your-customer (KYC) requirements and can even measure customer satisfaction.
● | Transact : TraQSuite enables task workers to facilitate transactions by meeting the end customers. They can collect payments via credit
cards, smart-phone swipes, SMS messages or cash. Both banked and unbanked users can buy products and services and pay with their
mobile devices.
● | Target : TraQSuite enables customer transactions to be rewarded with loyalty credits, tokens or points that can be redeemed by the customer
for free products, discounts and benefits. The software analyzes these transactions and purchase behaviors by using leading AI models
and can deliver real time, automated and targeted offers and recommendations for additional purchases and customer retention.

The
Mimo delivery and task service in India runs on the TraQSuite platform and performs deliveries and fulfills tasks for some of the largest
businesses in India. Mimo provides delivery and pickup services for the banking and insurance industry, performing verifications, field
investigations for loan requests, business verification, employment verification, collection of documents and customer data and assistance
in filling out forms for banks. Mimo works with microfinance institutions to collect cash, such as loan payments, convert cash to digital
forms such as debit cards, and conduct data collection and surveys. For consumer goods companies, Mimo does promotional marketing, last
mile (hyper-local) delivery, merchant onboarding or activation, store audits, and route optimization for delivery.

Continuing
Operations

Recoup
Technologies, Inc.

Recoup
Technologies, Inc. provides cutting-edge solutions based on patented technologies, to measure, analyze and manage the waste management
process. Recoup’s products divert food waste from landfill, reduce costs, improve operations, and minimize negative environmental
impact for organizations across the world. The company offers Products (Digestors) that convert food waste into grey water discharge
that is safe to enter sewage systems. The company also provides accurate real-time information to eliminate the uncertainty about where
food waste occurs, how much is being wasted and its associated value. A waste tracking process forecasts accurate supply chain and inventory
needs, standardizes best practices for production, and improves future planning for the prevention of waste.

TraQiQ
Solutions, Inc.

Ci2i
was a services company founded in 1998 that developed and deployed intelligent technologies and products in order to meet the demand
for sustainable, integrated solutions. Ci2i’s primary focus has been in the analytics and intelligence segments. The Company was
investing significantly in building products in the area of supply chain and last mile delivery.

Ci2i’s
cloud solutions and analytics services comprised software development, program management, project management, and business analytics
services.

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

Basis
of Presentation

The
accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted
in the United States of America (“U.S. GAAP”) and the regulations of the United States Securities and Exchange Commission.
The condensed 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 includes all adjustments considered
necessary for a fair presentation at such date and the operating results and cash flows for such periods.

These
condensed consolidated financial statements should be read in conjunction with a reading of the Company’s consolidated financial
statements and notes thereto included in Form 10-K filed with the SEC on March 31, 2023. Interim results of operations for the three
months ended March 31, 2023 are not necessarily indicative of future results for the full year.

Consolidation

The
consolidated financial statements include the accounts of TraQiQ, Inc. and its wholly-owned subsidiaries. All intercompany balances and
transactions have been eliminated in consolidation.

The
Company applies the guidance of Topic 810 Consolidation of the Financial Accounting Standards Board (“FASB”) Accounting
Standards Codification (“ASC”) to determine whether and how to consolidate another entity. Pursuant to ASC paragraph 810-10-15-10,
all majority-owned subsidiaries—all entities in which a parent has a controlling financial interest—are consolidated except
when control does not rest with the parent.

Pursuant
to ASC paragraph 810-10-15-8, the usual condition for a controlling financial interest is ownership of a majority voting interest, and,
therefore, as a general rule ownership by one reporting entity, directly or indirectly, of more than 50 percent of the outstanding voting
shares of another entity is a condition pointing toward consolidation. The power to control may also exist with a lesser percentage of
ownership, for example, by contract, lease, agreement with other stockholders, or by court decree.

In
accordance with ASC 810-10-45, the Company has deconsolidated the subsidiaries of MTP, Rohuma and TSP as a result of the
nonreciprocal transfer (spinoff). As a result of the deconsolidation the Company has recognized a loss from discontinued operations
of $ 6,866,913 on the consolidated statements of operations for the three months ending March 31, 2022.

Noncontrolling
Interests

In
accordance with ASC 810-10-45 Noncontrolling Interests in Consolidated Financial Statements, the Company classifies noncontrolling
interests as a component of equity within the consolidated balance sheet. In January 2021, the acquisition of Rohuma resulted in a less
than 1% non-controlling interest of the Indian affiliate of that company. In February 2021, the acquisition of Mimo resulted in a less
than 1% non-controlling interest of that company. On December 30, 2022, the Company sold its equity interest in Rohuma and Mimo.

Use
of Estimates

The
preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the
reported amounts of revenues and expenses during the reporting periods. These estimates include, but are not limited to, management’s
estimate of provisions required for non-collectible accounts receivable, depreciative lives of our assets, determination of technological
feasibility, and valuation allowances of our deferred tax assets. Actual results could differ from those estimates.

Foreign
Currency Transactions

The
Company accounts for foreign currency transactions in accordance with ASC 830, “Foreign Currency Matters” (“ASC 830”),
specifically the guidance in subsection ASC 830-20, “Foreign Currency Transactions”. The U.S. dollar is the functional and
reporting currency for the Company and its subsidiaries. The functional currency of the deconsolidated subsidiary TRAQ Pvt Ltd. was the
Indian Rupee. Pursuant to ASC 830, monetary assets and liabilities denominated in foreign currencies are translated into U.S. dollars
at exchange rates in effect at the balance sheet date, with the resulting gains or losses upon settlement reported in foreign exchange
gain (loss) in the computation of net income (loss). Gains or losses resulting from translation adjustments are reported under accumulated
other comprehensive income (loss).

Reclassification

Certain
prior period amounts have been reclassified to conform with current period presentation with no effect on the Company’s net loss,
total assets, liabilities equity or cash flows.

Cash
and Cash Equivalents

Cash
and cash equivalents include cash on hand and on deposit at banking institutions as well as all highly liquid short-term investments
with original maturities of 90 days or less of $ 139,573 and $ 1,312 as of March 31, 2023 and December 31, 2022, respectively.

Accounts
Receivable and Concentration of Credit Risk

The
Company considers accounts receivable, net of allowance for returns and doubtful accounts, to be fully collectible. The allowance is
based on management’s estimate of the overall collectability of accounts receivable, considering historical losses and economic
conditions. Based on these same factors, individual accounts are charged off against the allowance when management determines those individual
accounts are uncollectible.

Credit
extended to customers is generally uncollateralized. Past-due status is based on contractual terms. Management has determined that no allowance for returns and doubtful accounts was required for the outstanding accounts receivable as of March 31, 2023 and December 31,
2022, respectively.

Fixed
assets, net

Fixed
assets are stated at cost. Depreciation on fixed assets are computed using the straight-line method over the estimated useful lives of
the assets, which range from three to ten years .

Intangible
assets, net and Long-lived Assets

FASB
Codification Topic 360 “Property, Plant and Equipment” (ASC 360), requires that long-lived assets and certain identifiable
intangibles held and used by an entity be reviewed for impairment whenever events or changes in circumstances indicate that the carrying
amount of an asset may not be recoverable. The adoption of ASC 360 has not materially affected the Company’s reported earnings,
financial condition or cash flows.

Intangible
assets with definite useful lives are stated at cost less accumulated amortization. Intangible
assets represent purchased intangible assets of Recoup. The Company amortizes these intangible
assets on a straight-line basis over their estimated useful lives, as stated below:.

The
Company has adopted Accounting Standard Update (“ASU”) 2017-04 Intangibles – Goodwill and Other (Topic 350), Simplifying
the Test for Goodwill Impairment . The adoption of this ASU did not have a material impact on our consolidated financial statements.
The Company reviews recoverability of long-lived assets on a periodic basis whenever events and changes in circumstances have occurred
which may indicate a possible impairment. The assessment for potential impairment is based primarily on the Company’s ability to
recover the carrying value of its long-lived assets from expected future cash flows from its operations on an undiscounted basis. If
such assets are determined to be impaired, the impairment recognized is the amount by which the carrying value of the assets exceeds
the fair value of the assets.

The
Company will assess the impairment of identifiable intangibles whenever events or changes in circumstances indicate that the carrying
value may not be recoverable at the time they do have intangible assets. Factors the Company considers to be important which could trigger
an impairment review include the following:

1.
Significant underperformance relative to expected historical or projected future operating results;

2.
Significant changes in the manner of use of the acquired assets or the strategy for the overall business; and

3.
Significant negative industry or economic trends.

When
the Company determines that the carrying value of intangibles may not be recoverable based upon the existence of one or more of the above
indicators of impairment and the carrying value of the asset cannot be recovered from projected undiscounted cash flows, the Company
records an impairment charge. The Company will measure any impairment based on a projected discounted cash flow method using a discount
rate determined by management to be commensurate with the risk inherent in the current business model. Significant management judgment
is required in determining whether an indicator of impairment exists and in projecting cash flows. Management has determined that no
impairment of long-lived assets is required for the three months ended March 31, 2023. Management has determined that impairment of long-lived
assets is required for the retrospective presentation of the three months ended March 31, 2022 as a result of the discontinued operations.
Please see Note 8 – Intangible Assets and Note 9 - Goodwill.

Due to the Company’s acquisition of Recoup and the resulting
recognition of goodwill from the acquisition, the Company plans on analyzing goodwill for impairment for each future reporting period.

Inventory

Inventories
consist of the company’s waste-management Digester units, Digester unit spare parts, and the biological fuel used for the functioning
of the Digester units. Inventories are measured at the lower of weighted average cost or market value. Write-downs and write-offs of
inventory are charged to cost of revenues.

Contract
Liabilities

Advance
payments in the form of customer deposits for goods to be sold, or services to be performed, are recorded by the Company as contract
liabilities. Deferred revenue recognized during the company’s revenue recognition process is also recorded as contract liabilities.
As a result of the January 5, 2023 acquisition of Recoup, the Company assumed $ 14,465 of deferred revenue and $ 297,079 of customer deposit
liabilities without acquiring the associated cash deposits. Please See Note 6 – Acquisition of Recoup Technologies, Inc.

Revenue
Recognition

The
Company records revenue based on a five-step model in accordance with ASC 606, Revenue from Contracts with Customers, which require that
we:

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.

When
revenue is earned based on product sales, such as sales of digester equipment and parts, solid recovered fuel and recycled materials,
the Company’s performance obligations are satisfied at the point in time when products are shipped to the customer, which is when
the customer has title and control. Therefore, the Company’s contracts have a single performance obligation (shipment of product).
The Company primarily receives fixed consideration for sales of products.

When
revenue is earned based on receipt of disposal waste, the Company’s performance obligations are satisfied at the point in time
when disposal waste products are received from the customer, which is when the Company has title and control. Therefore, the Company’s
contracts have a single performance obligation (receipt of disposal waste).

When
revenue is earned on services, such as management advisory fees and digester maintenance and repair services, fees are recognized over
the period the services are performed based on service milestones.

The
following is a summary of revenue for the three months ended March 31, 2023 and 2022, disaggregated by type for continuing operations:

2023 | 2022
Professional Services
Revenue | $ | $ | -
Sale of goods | 64,611 | -
Software
Solution Revenue | 429 | 522
$ | 65,040 | $ | 139,308

The
following is a summary of revenue for the three months ended March 31, 2023 and 2022, disaggregated by type for discontinuing operations:

2023 | 2022
Professional Services
Revenue | (a) | $ | - | $ | 234,189
Sale of goods | - | -
Software
Solution Revenue | - | 112,697
$ | - | $ | 346,886
(a) | Due
to the retrospective presentation of continuing and discontinued operations, additional professional services revenue has been
recognized by TRAQ Pvt Ltd. as part of discontinued operations that had been eliminated upon consolidation as an intercompany
transaction prior to the disposal of TRAQ Pvt Ltd.

Costs
of Revenues

Costs
of revenues provided consist of the cost of goods sold, and IT support costs such as data processing costs, costs to maintain the Company’s
proprietary databases, hardware and software expense associated with transaction processing systems and exchanges, and computer network
expense.

Income
Taxes

Income
taxes are accounted under the asset and liability method. The current charge for income tax expense is calculated in accordance with
the relevant tax regulations applicable to entity. Deferred tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective
tax bases and for operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect
on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
Deferred tax assets are reduced by a valuation allowance if, based on available evidence, it is more likely than not that some portion
or all of the deferred tax assets will not be realized.

Uncertain
Tax Positions

The
Company follows ASC 740-10, “Accounting for Uncertainty in Income Taxes”. This requires recognition and measurement of uncertain
income tax positions using a “more-likely-than-not” approach. Management evaluates their tax positions on an annual basis.

TraQiQ,
Inc.and TraQiQ Solutions, Inc, file a consolidated income tax return in the U.S. federal tax jurisdiction and various state tax
jurisdictions. Recoup files a tax return in the U.S. federal tax jurisdiction and the U.S. State of Delaware. Rohuma US, part of the
discontinued operations, files a separate tax return in the U.S. federal tax jurisdiction and various state tax jurisdictions. The
remainder of the discontinued operations, TRAQ Pvt Ltd. and Mimo file separate individual income tax returns in the India tax
jurisdictions.

The
U.S. federal and state income tax returns of the Company are subject to examination by the IRS and state taxing authorities, generally
for three years after they were filed. The India tax returns of the Company are subject to examination by the India Income Tax Department
and India state taxing authority, generally for 12 months after the relevant tax year, and 24 months after the relevant tax year in case
transfer pricing provisions are applicable.

Fair
Value of Financial Instruments

ASC
825, “ Financial Instruments ,” requires the Company to disclose estimated fair values for its financial instruments.
The carrying amount of cash, accounts receivable, prepaid and other current assets, accounts payable and accrued expenses, stockholder
advances, short term financing and convertible debt approximate fair value because of the short-term maturity of those instruments.

Fair
Value Measurements

ASC
820 “ Fair Value Measurements ” defines fair value, establishes a framework for measuring fair value in generally accepted
accounting principles and expands disclosure about fair value measurements.

The
following provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into
Levels 1 to 3 based on the degree to which fair value is observable:

Level
1- fair value measurements are those derived from quoted prices (unadjusted in active markets for identical assets or liabilities);

Level
2- fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the
asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

Level
3- fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based
on observable market data (unobservable inputs).

Financial
instruments classified as Level 1 - quoted prices in active markets include cash.

These
consolidated financial instruments are measured using management’s best estimate of fair value, where the inputs into the determination
of fair value require significant management judgment to estimation. Valuations based on unobservable inputs are highly subjective and
require significant judgments. Changes in such judgments could have a material impact on fair value estimates.

In
addition, since estimates are as of a specific point in time, they are susceptible to material near-term changes. Changes in economic
conditions may also dramatically affect the estimated fair values.

Fair
value estimates discussed herein are based upon certain market assumptions and pertinent information available to management for the
respective periods. The respective carrying value of certain financial instruments approximated their fair values due to the short-term
nature of these instruments. These financial instruments include cash, investments, short-term notes payable, accounts payable and accrued
expenses.

Derivative
Financial Instruments

Derivatives
are recorded on the consolidated balance sheet at fair value. The conversion features of the convertible instruments are embedded derivatives
and are separately valued and accounted for on the consolidated balance sheet with changes in fair value recognized during the period
of change as a separate component of other income/expense. Fair values for exchange-traded securities and derivatives are based on quoted
market prices. Valuations derived from various models are subject to ongoing internal and external verification and review. Model used
incorporate market-sourced inputs such as interest rates and stock price volatilities. Selection of these inputs involves management’s
judgment and may impact net income (loss).

With
the issuance of the July 2017 FASB ASU 2017-11, “Earnings Per Share (Topic 260) Distinguishing Liabilities from Equity (Topic
480) Derivatives and Hedging (Topic 815),” which addresses the complexity of accounting for certain financial instruments with
down round features, the Company has chosen the early adopt retroactively the amendments in Part I of the standard whereby fair value
derivative liabilities previously recognized were derecognized in the current and comparative periods. Under the amendments included
in this update, the Company is no longer required to record changes in fair value during the period of change as a separate component
of other income (expense) in the consolidated Statements of Operations.

The
amendments in Part I of this Update change the classification analysis of certain equity-linked financial instruments (or embedded features)
with down round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments,
a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s
own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments. As a result, a freestanding
equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair
value as a result of the existence of a down round feature. For freestanding equity classified financial instruments, the amendments
require entities that present earnings per share (EPS) in accordance with Topic 260 to recognize the effect of the down round feature
when it is triggered. That effect is treated as a dividend and as a reduction of income available to common shareholders in basic EPS.
Convertible instruments with embedded conversion options that have down round features are now subject to the specialized guidance for
contingent beneficial conversion features (in Subtopic 470-20, “ Debt—Debt with Conversion and Other Options ”),
including related EPS guidance (in Topic 260).

The
amendments in Part II of this Update recharacterize the indefinite deferral of certain provisions of Topic 480 that now are presented
as pending content in the Codification, to a scope exception. Those amendments do not have an accounting effect.

Under
current GAAP, an equity-linked financial instrument with a down round feature that otherwise is not required to be classified as a liability
under the guidance in Topic 480 is evaluated under the guidance in Topic 815, “ Derivatives and Hedging ,” to determine
whether it meets the definition of a derivative. If it meets that definition, the instrument (or embedded feature) is evaluated to determine
whether it is indexed to an entity’s own stock as part of the analysis of whether it qualifies for a scope exception from derivative
accounting.

Generally,
for warrants and conversion options embedded in financial instruments that are deemed to have a debt host (assuming the underlying shares
are readily convertible to cash or the contract provides for net settlement such that the embedded conversion option meets the definition
of a derivative), the existence of a down round feature results in an instrument not being considered indexed to an entity’s own
stock. This results in a reporting entity being required to classify the freestanding financial instrument or the bifurcated conversion
option as a liability, which the entity must measure at fair value initially and at each subsequent reporting date.

The
amendments in this Update revise the guidance for instruments with down round features in Subtopic 815-40, “ Derivatives and
Hedging—Contracts in Entity’s Own Equity ,” which is considered in determining whether an equity-linked financial
instrument qualifies for a scope exception from derivative accounting. An entity still is required to determine whether instruments would
be classified in equity under the guidance in Subtopic 815-40 in determining whether they qualify for that scope exception. If they do
qualify, freestanding instruments with down round features are no longer classified as liabilities and embedded conversion options with
down round features are no longer bifurcated.

For
entities that present EPS in accordance with Topic 260, and when the down round feature is included in an equity-classified freestanding
financial instrument, the value of the effect of the down round feature is treated as a dividend when it is triggered and as a numerator
adjustment in the basic EPS calculation. This reflects the occurrence of an economic transfer of value to the holder of the instrument,
while alleviating the complexity and income statement volatility associated with fair value measurement on an ongoing basis. Convertible
instruments are unaffected by the Topic 260 amendments in this Update.

Those
amendments in Part I of this Update are a cost savings relative to current GAAP. This is because, assuming the required criteria for
equity classification in Subtopic 815-40 are met, an entity that issued such an instrument no longer measures the instrument at fair
value at each reporting period (in the case of warrants) or separately accounts for a bifurcated derivative (in the case of convertible
instruments) on the basis of the existence of a down round feature. For convertible instruments with embedded conversion options that
have down round features, applying specialized guidance such as the model for contingent beneficial conversion features rather than bifurcating
an embedded derivative also reduces cost and complexity. Under that specialized guidance, the issuer recognizes the intrinsic value of
the feature only when the feature becomes beneficial instead of bifurcating the conversion option and measuring it at fair value each
reporting period.

The
amendments in Part II of this Update replace the indefinite deferral of certain guidance in Topic 480 with a scope exception. This has
the benefit of improving the readability of the Codification and reducing the complexity associated with navigating the guidance in Topic
480.

For
public business entities, the amendments in Part I of this Update are effective for fiscal years, and interim periods within those fiscal
years, beginning after December 15, 2018. Early adoption is permitted for all entities, including adoption in an interim period. If an
entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that
includes that interim period. The amendments in Part 1 of this Update should be applied in either of the following ways:

1. | retrospectively
to outstanding financial instruments with a down round feature by means of a cumulative-effect adjustment to the statement of financial
position as of the beginning of the first fiscal year and interim period(s) in which the pending content that links to this paragraph
is effective; or
2. | retrospectively
to outstanding financial instruments with a down round feature for each prior reporting period presented in accordance with the guidance
on accounting changes in paragraphs 250-10-45-5 through 45-10.

The
amendments in Part II of this Update do not require any transition guidance because those amendments do not have an accounting effect.

Earnings
(Loss) Per Share of Common Stock

Basic
net income (loss) per common share is computed using the weighted average number of common shares outstanding. Diluted earnings per share
(EPS) include additional dilution from common stock equivalents, such as convertible notes, preferred stock, stock issuable pursuant
to the exercise of stock options and warrants. Common stock equivalents are not included in the computation of diluted earnings per share
when the Company reports a loss because to do so would be anti-dilutive for periods presented.

Related
Party Transactions

Parties
are considered to be related to the Company if the parties directly or indirectly, through one or more intermediaries, control, are controlled
by, or are under common control with the Company. Related parties also include principal stockholders of the Company, its management,
members of the immediate families of principal stockholders of the Company and its management and other parties with which the Company
may deal where one-party controls or can significantly influence the management or operating policies of the other to an extent that
one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all related party
transactions. All transactions shall be recorded at fair value of the goods or services exchanged. Property purchased from a related
party is recorded at the cost to the related party and any payment to or on behalf of the related party in excess of the cost is reflected
as compensation or distribution to related parties depending on the transaction.

Segment
Reporting

For
purposes of segment disclosures, two or more operating segments should be grouped only if the segments meet all the requirements of paragraph
280-10-50-11, including the requirements for similar economic characteristics.

Approximately
99% of the Company’s revenue is generated from its Recoup subsidiary. The Company believes that no segment reporting is required
as all remaining operations outside of the Recoup subsidiary is immaterial.

Recently
Issued Accounting Standards

There
were updates recently issued, most of which represent technical corrections to the accounting literature or application to specific industries
or transactions that are not expected to have a material impact on the Company’s financial position, results of operations or cash
flows.

NOTE
4: GOING CONCERN

The
Company has an accumulated deficit of $ 129,387,007 as of March 31, 2023 and a working capital deficit of $ 116,889,252 , as of March 31,
2023, and a working capital deficit of $ 1,682,659 as of December 31, 2022. As a result of these factors, management has determined that
there is substantial doubt about the Company ability to continue as a going concern.

These
consolidated financial statements of the Company have been prepared assuming that the Company will continue as a going concern, which
contemplates, among other things, the realization of assets and the satisfaction of liabilities in the normal course of business over
a reasonable period. The consolidated financial statements of the Company do not include any adjustments that may result from the outcome
of the uncertainties. The Company’s continuation as a going concern is contingent upon its ability to obtain additional financing
and generate revenue and cash flow to meet its obligations on a timely basis. Management intends to seek additional funding through debt
or equity financing during the next twelve months to source new inventory and generate revenue from product sales.

NOTE
5: DISCONTINUED OPERATIONS

As
discussed in Note 1, the Company sold Rohuma, Mimo and TSP in December of 2022. Additionally, the Company is shifting operations to waste
management. As such, these businesses are reported as discontinued operations for the three months ended March 31, 2022. As required,
the Company has retrospectively recast its consolidated statements of operations and balance sheets for all periods presented. The retrospective
recast of the company’s income statement and balance sheet for the quarter ended March 31, 2022 resulted in a loss on discontinued
operations of $ 6,866,913 for the quarter ended March 31, 2022. The Company has not segregated the cash flows of this business in the
consolidated statements of cash flows. Management was also required to make certain assumptions and apply judgment to determine historical
expenses related to the discontinued operations presented in prior periods. Unless noted otherwise, discussion in the Notes to Consolidated
Financial Statements refers to the Company’s continuing operations.

The
following table presents a reconciliation of the major financial lines constituting the results of operations for discontinued operations
to the net income (loss) from discontinued operations presented separately in the consolidated statement of operations for the three
months ended March 31, 2022:

Rohuma | Mimo | TSP | Total
March
31, 2022 | March
31, 2022 | March
31, 2022 | March
31, 2022
REVENUE | $ | 48,085 | $ | 64,652 | $ | 234,189 | $ | 346,886
COST
OF REVENUE | 79,065 | 145,960 | 135,687 | 360,712
GROSS
PROFIT (LOSS) | ( 31,020 | ) | ( 81,308 | ) | 98,502 | ( 13,826 | )
OPERATING
EXPENSES
Salaries
and salary related costs | 104,263 | - | 17,556 | 121,819
Professional
fees | 4,617 | 18,621 | 3,190 | 26,428
Rent expense | 442 | - | 755 | 1,197
Depreciation
and amortization expense | - | 11,644 | 2,145 | 14,840
General
and administrative expenses | 4,502 | 5,809 | 17,385 | 27,696
Total
Operating Expenses | 114,875 | 36,074 | 41,031 | 191,980
OPERATING
(LOSS) INCOME | ( 145,895 | ) | ( 117,382 | ) | 57,471 | ( 205,806 | )
OTHER INCOME
(EXPENSE)
Loss
from impairment of intangible assets | - | ( 776,263 | ) | - | ( 776,263 | )
Loss from
impairment of goodwill | ( 3,519,869 | ) | ( 2,343,188 | ) | - | ( 5,863,057 | )
Interest
expense, net of interest income | ( 2,126 | ) | ( 2,509 | ) | ( 14,280 | ) | ( 18,915 | )
Other
income | 154 | 45 | 2,608 | 2,807
Total
other income (expense) | ( 3,521,841 | ) | ( 3,121,915 | ) | ( 11,672 | ) | ( 6,655,428 | )
INCOME (LOSS) FROM
DISTCONTINUED OPERATIONS, BEFORE PROVISION FOR INCOME TAXES | ( 3,667,736 | ) | ( 3,239,297 | ) | 45,799 | ( 6,861,234 | )
Provision
for income taxes – discontinued operations | 367 | - | 5,312 | 5,679
LOSS
INCOME FROM DISTCONTINUED OPERATIONS | $ | ( 3,668,103 | ) | $ | ( 3,239,297 | ) | $ | 40,487 | $ | ( 6,866,913 | )

The
following table presents a reconciliation of Rohuma, Mimo, and TSP net cash flow from operating, investing and financing activities for
the periods indicated below:

March
31, 2022
Net cash (used
in) provided by operating activities - discontinued operations | $ | 409,295
Net cash (used in) provided
by investing activities - discontinued operations | $ | -
Net cash provided by (used
in) financing activities - discontinued operations | $ | ( 468,293 | )
20

NOTE
6: ACQUISITION OF RECOUP TECHNOLOGIES, INC.

On
January 5, 2023, pursuant to an asset purchase agreement, dated December 30, 2022, we completed the acquisition of Recoup Technologies,
Inc., and its digester business assets (“Recoup” or the “Digester business”), from Renovare Environmental, Inc
(“REI”), BioHiTech America, LLC (“BHT” and together with REI, the “Renovare Sellers”) for a purchase
price of $ 18,371,421 consisting of the following:

Type
of Consideration | Number
of Shares | Fair
Value
Cash | $ | 150,000
Issuance
of common stock | a. | 15,686,926 | $ | 1,592,318
Issuance
of series – B preferred stock | b. | 1,250,000 | $ | 12,688,256
Liabilities
assumed:
Michaelson
Capital Senior Note | c. | $ | 3,017,090
Accounts
Payable and accrued expenses | $ | 612,213
Contract
liabilities | $ | 311,544
Total
consideration | $ | 18,371,421
a. | This
transaction was exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended
b. | This
transaction was exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended
c. | Please
see Note 12 – Notes Payable

The
acquisition of Recoup was accounted for as a business combination in accordance with the acquisition method under the guidance in ASC
805-10 and 805-20. Accordingly, the total purchase consideration was allocated to intangible assets acquired based on their respective
estimated fair values. The acquisition method of accounting requires, among other things, that assets acquired, and liabilities assumed,
if any, in a business purchase combination be recognized at their fair values as of the acquisition date. The process for estimating
the fair values of identifiable intangible assets and certain tangible assets requires the use of significant estimates and assumptions,
including estimating future cash flows, developing appropriate discount rates, estimating the costs, and timing.

The
allocation of the purchase price in connection with the acquisition of Recoup was calculated as follows:

Description | Fair
Value | Weighted
Average Useful Life (Years)
Fixed assets –
truck | $ | 1,196 | 7
Inventory | 379,718
Intellectual property | 10,333,144 | 10
Tradenames | 285,863 | 10
Noncompete agreement | 78,615 | 5
Goodwill | 7,292,885 | Indefinite
$ | 18,371,421

Intellectual
property was measured at fair value using the multiple periods excess earnings method (“MPEEM”). Significant inputs used
to measure the fair value include an estimated useful life of ten ( 10 ) years, an estimate of projected revenue and costs associated with
existing customers, an estimated technology obsolescence adjustment, and a discount rate of 19.8 %.

Tradenames
were measured at fair value using the relief from royalty method. Significant inputs used to measure the fair value include an estimated
projected revenue from the tradename, a pre-tax royalty rate of 1 %, and a discount rate of 19.8 %.

The
noncompete agreement was measured at fair value with a discounted cash flow analysis that compared projected cash flows during the noncompete
agreement period with and without the agreement. Significant inputs used to measure the fair value include an estimate of time for the
seller to identify the product, bring in the technology, and start the manufacturing process. As well as the estimated risk that the
Seller would chose to compete without the agreement in place and a discount rate of 19.8 %. The noncompete agreement prevents the Renovare
Sellers from directly or indirectly, engage, or be interested in, any business or entity that engages in any business substantially similar
to the Digester business for a period of five ( 5 ) years following the closing date of the acquisition.

Goodwill
of $ 7,292,885 arising from the acquisition of Recoup consisted of new customer relationships for the Company, access to new product market opportunities, expected growth opportunities,
and the residual value after all identifiable intangible assets were valued.
Total acquisition costs for the acquisition of Recoup incurred were $ 86,116 recorded as a component of General and administrative
expenses. Due to the Company’s acquisition of Recoup and the resulting recognition of goodwill from the acquisition,
the Company plans on analyzing goodwill for impairment for each future reporting period.

The
approximate revenue and gross profit for the acquired business as a standalone entity per ASC 805 from January 5, 2023 to March
31, 2023 was $ 64,611 and $ 29,158 , respectively.

Pro
Forma Information

The
results of operations of Recoup will be included in the Company’s consolidated financial statements as of the date of acquisition
through the current period end. The following supplemental pro-forma financial information approximate combined financial information
assumes that the acquisition had occurred at the beginning of the three months ended March 31, 2023 and the year ended December 31, 2022:

March
31, | December
31,
2023 | 2022
Revenue | $ | 64,611 | $ | 1,298,611
Net Income (Loss) | $ | ( 40,105 | ) | $ | ( 1,514,247 | )
Earnings (Loss) per common
share, basic | $ | ( 0.00 | ) | $ | ( 0.36 | )
Earnings (Loss) per common
share, diluted | $ | ( 0.00 | ) | $ | ( 0.36 | )
Weighted average common shares outstanding – basic and diluted | 30,060,136 | 4,173,008
21

NOTE
8: INTANGIBLE ASSETS

The
Company’s intangible assets are as follows:

March
31, 2023 | December
31, 2022
Intellectual property | $ | 10,333,144 | $ | -
Non-compete agreement | 78,615 | -
Tradenames | 285,863 | -
Less:
accumulated amortization | ( 250,954 | ) | -
Net | $ | 10,446,668 | $ | -

Amortization
expense due to the amortization of intangibles for the three months ended March 31, 2023 and 2022 was $ 250,954 and $ 0 , respectively.

As
of December 31, 2022, the Company did not have any intangible assets as they were previously all held by Rohuma, Mimo and TSP, and
as they were fully impaired upon the disposal as Rohuma, Mimo and TSP. For the three months ended March 31, 2022, for the purposes
of the retrospective presentation of the continuing operations, the Company fully impaired the Rohuma, Mimo and TSP intangible
assets; resulting in impairment expense of $ 776,263 ,
which is included in net loss from discontinued operations, before the provisions for income taxes, on the consolidated statements of operations and
comprehensive loss.

NOTE
9: GOODWILL

As
of March 31, 2023, all goodwill was held by Recoup. The Company’s goodwill was $ 7,292,885 as of March 31, 2023. As of December
31, 2022, the Company did not have any goodwill due to its disposal of Rohuma, Mimo, and TSP. Due to the Company’s acquisition of Recoup and the resulting recognition of goodwill from the acquisition,
the Company plans on analyzing goodwill for impairment for each future reporting period.

For
the three months ended March 31, 2023 there were no indicators of impairment noted. For the quarter ended March 31, 2022, for the
purposes of the retrospective presentation of the disposal of Rohuma and Mimo, the Company fully impaired the Rohuma and Mimo
goodwill resulting in impairment expense of $ 5,863,057 ,
which is included in net loss from discontinued operations, before the provisions for income taxes, on the consolidated statements
of operations and comprehensive loss.

NOTE
10: CONVERTIBLE NOTES PAYABLE

As
of March 31, 2023 and December 31, 2022, the Company had the following convertible notes outstanding, all of which are current
liabilities. Any convertible notes payable that were repaid or converted in 2022, are not listed, and details of which can be found
in our Form 10-K filed March 31, 2022:

March
31, 2023 | December
31, 2022
Evergreen Capital
Management LLC - 5 | (a) | $ | 48,000 | $ | 48,000
Evergreen Capital Management
LLC - 4 | (b) | 480,000 | -
Evergreen Capital Management
LLC - 6 | (c) | 150,000 | -
Evergreen Capital Management
LLC - 7 | (d) | 12,000 | -
GS Capital | (e) | 51,541 | 112,021
Chambers | (f) | 60,000 | -
Eleven 11 Management LLC -
1 | (g) | 84,000 | -
Eleven 11 Management LLC –
2 | (h) | 60,000 | -
Cavalry Fund – 1 | (i) | 120,000 | -
Cavalry Fund – 2 | (j) | 140,000 | -
Cavalry Fund – 3 | (k) | 100,000 | -
Keystone Capital – 1 | (l) | 90,000 | -
Keystone
Capital – 2 | (m) | 30,000 | -
Total Convertible Notes Payable | $ | 1,425,541 | $ | 160,021
Less:
Discounts | ( 1,263,447 | ) | ( 96,240 | )
$ | 162,094 | $ | 63,781
(a) | On
October 21, 2022, the Company entered into a 20% OID Senior Secured Promissory Note (“Evergeen – 5”) with Evergreen
Capital Management, LLC (“Evergreen”) in the amount of $ 48,000 (including a $ 8,000 Original Issue Discount). Evergreen
- 5 has a maturity of twelve months to July 21, 2023 . It accrues interest at a rate of 10 % per year. Evergreen - 5 also has a conversion
feature, enabling it to convert into shares of the Company’s Common Stock upon default. The conversion price is equal to 75 %
of the price per share at which the common stock of the Company is sold to the public in a qualified offering. There are certain
price protections, which make the conversion option a derivative liability. Please see Note 15 – Derivative Liabilities.
(b) | On
June 15, 2021 the Company issued a $ 400,000 promissory note to a director with a maturity date of December 12, 2021 (“the director
note”). The director note did not bear interest however the director received two tranches of 18,750 shares of Common Stock
each for lending this amount. Under the terms of the director note if the note was repaid by the maturity date, one of the two tranches
of 18,750 shares was to be returned. The Company and the director extended the maturity date of this note to June 14, 2022 , however
the note was not repaid and the company was considered to be in default on the director note. On
December 30, 2022, the director, the Company, and Evergreen Capital Management, LLC (“Evergreen”) signed a note purchase
agreement (the “Evergreen note purchase”). In accordance with the Evergreen note purchase, Evergreen purchased the director
note from the director, and the company issued 150,000 shares of its Common Stock to the director for a value of $ 17,555 . Please
See Note 13 – Stockholders’ equity (Deficiency). Pursuant
to the Evergreen note purchase the Company exchanged the director note with Evergreen for a secured convertible promissory note (“Evergreen
– 4”) which was issued on December 30, 2022 and has a maturity date of December 31, 2023. Please Note 11 – Long-Term
Debt – Related Parties and Note 15 – Derivative Liabilities.
(c) | On
January 4, 2023, the Company entered into a 20% OID Senior Secured Promissory Note (“Evergreen – 6”) with Evergreen
Capital Management, LLC (“Evergreen”) in the amount of $ 180,000 (including a $ 30,000 Original Issue Discount). Evergreen
- 6 has a maturity of twelve months ending on January 4, 2024 . It accrues interest at a rate of 10 % per year. Evergreen - 6 also
has a conversion feature, enabling it to convert into shares of the Company’s Common Stock upon default. The conversion price
is equal to the lower of (1) $ 0.015 per share or (2) 90 % of the average of the two lowest volume-weighted average price of the five
trading days ending on the day immediately prior to the conversion date. There are certain price protections, which make the conversion
option a derivative liability. Please see Note 15 – Derivative Liabilities.
(d) | On
February 14, 2023, the Company entered into a 20% OID Senior Secured Promissory Note (“Evergreen – 7”) with Evergreen
Capital Management, LLC (“Evergreen”) in the amount of $ 12,000 (including a $ 2,000 Original Issue Discount). Evergreen
- 7 has a maturity date of February 28, 2024 . It accrues interest at a rate of 10 % per year. Evergreen - 7 also has a conversion
feature, enabling it to convert into shares of the Company’s Common Stock upon default. The conversion price is equal to the
lower of (1) $ 0.015 per share or (2) 90 % of the average of the two lowest volume-weighted average price of the five trading days
ending on the day immediately prior to the conversion date. There are certain price protections, which make the conversion option
a derivative liability. Please see Note 15 – Derivative Liabilities.
(e) | On
July 5, 2022, the Company entered into a 11% OID Senior Secured Promissory Note (the “GS Capital Note”) with GS Capital
Partners LLC (“GS Capital”) in the amount of $ 144,000 (including a $ 14,000 Original Issue Discount). The GS Capital Note
has a term of twelve months maturing on July 5, 2023 . It accrues interest at a rate of 12 % per year. The GS Capital Note also has
a conversion feature, enabling it to convert into shares of the Company’s Common Stock upon default. The conversion price is
equal to 86 % of the lowest trading price of the Company’s Common Stock for the 12 Trading Days immediately preceding the delivery
of a notice of conversion. There are certain price protections, which make the conversion option a derivative liability. Please see
Note 15 – Derivatives.
23
(f) | On
February 16, 2023, the Company entered into a 20% OID Senior Secured Promissory Note (the “Chambers Note”) with James
D. Chambers Living Trust (“Chambers”) in the amount of $ 60,000 (including a $ 10,000 Original Issue Discount). The Chambers
Note has a maturity of twelve months ending on February 28, 2024 . It accrues interest at a rate of 10 % per year. The Chambers Note
also has a conversion feature, enabling it to convert into shares of the Company’s Common Stock upon default. The conversion
price is equal to the lower of (1) $ 0.015 per share or (2) 90 % of the average of the two lowest volume-weighted average price of
the five trading days ending on the day immediately prior to the conversion date. There are certain price protections, which make
the conversion option a derivative liability. Please see Note 15 – Derivative Liabilities.
(g) | On
February 14, 2023, the Company entered into a 20% OID Senior Secured Promissory Note (“Eleven 11 – 1”) with Eleven
11 Management LLC. (“Eleven 11”) in the amount of $ 60,000 (including a $ 10,000 Original Issue Discount). Eleven 11 –
1 has a maturity date of February 14, 2024 . It accrues interest at a rate of 10 % per year. Eleven 11 - 1 also has a conversion feature,
enabling it to convert into shares of the Company’s Common Stock upon default. The conversion price shall be equal to the lower
of (1) $ 0.015 per share or (2) 90 % of the average of the two lowest volume-weighted average price of the five trading days ending
on the day immediately prior to the conversion date. There are certain price protections, which make the conversion option a derivative
liability. Please see Note 15 – Derivative Liabilities.
(h) | On
March 14, 2023, the Company entered into a 20% OID Senior Secured Promissory Note (“Eleven 11 – 2”) with Eleven
11 Management LLC. (“Eleven 11”) in the amount of $ 54,000 (including a $ 9,000 Original Issue Discount). Eleven 11 –
2 has a maturity date of February 28, 2024 . It accrues interest at a rate of 10 % per year. Eleven 11 - 2 also has a conversion feature,
enabling it to convert into shares of the Company’s Common Stock upon default. The conversion price is equal to the lower of
(1) $ 0.015 per share or (2) 90 % of the average of the two lowest volume-weighted average price of the five trading days ending on
the day immediately prior to the conversion date. There are certain price protections, which make the conversion option a derivative
liability. Please see Note 15 – Derivative Liabilities.
(i) | On
March 14, 2023, the Company entered into a 20% OID Senior Secured Promissory Note (“Cavalry - 1”) with Cavalry Fund.
(“Cavalry”) in the amount of $ 120,000 (including a $ 20,000 Original Issue Discount). Cavalry - 1 has a maturity date
of February 28, 2024 . It accrues interest at a rate of 10 % per year. Cavalry - 1 also has a conversion feature, enabling it to convert
into shares of the Company’s Common Stock upon default. The conversion price is equal to the lower of (1) $ 0.015 per share
or (2) 90 % of the average of the two lowest volume-weighted average price of the five trading days ending on the day immediately
prior to the conversion date. There are certain price protections, which make the conversion option a derivative liability. Please
see Note 15 – Derivative Liabilities.
(j) | On
February 16, 2023, the Company entered into a 20% OID Senior Secured Promissory Note (“Cavalry – 2”) with Cavalry
Fund. (“Cavalry”) in the amount of $ 140,000 (including a $ 30,000 Original Issue Discount). Cavalry – 2 has a maturity
date of February 28, 2024 . It accrues interest at a rate of 10 % per year. Cavalry - 2 also has a conversion feature, enabling it
to convert into shares of the Company’s Common Stock upon default. The conversion price is equal to the lower of (1) $ 0.015 per share or (2) 90 % of the average of the two lowest volume-weighted average price of the five trading days ending on the day immediately
prior to the conversion date. There are certain price protections, which make the conversion option a derivative liability. Please
see Note 15 – Derivative Liabilities.
(k) | On
March 14, 2023, the Company entered into a 20% OID Senior Secured Promissory Note (“Cavalry – 3”) with Cavalry
Fund. (“Cavalry”) in the amount of $ 120,000 (including a $ 20,000 Original Issue Discount). Cavalry – 3 has a maturity
date of February 28, 2024 . It accrues interest at a rate of 10 % per year. Cavalry - 3 also has a conversion feature, enabling it
to convert into shares of the Company’s Common Stock upon default. The conversion price is equal to the lower of (1) $ 0.015 per share or (2) 90 % of the average of the two lowest volume-weighted average price of the five trading days ending on the day immediately
prior to the conversion date. There are certain price protections, which make the conversion option a derivative liability. Please
see Note 15 – Derivative Liabilities.
(l) | On
March 3, 2023, the Company entered into a 20% OID Senior Secured Promissory Note (“Keystone – 1”) with Keystone
Capital Partners. (“Keystone”) in the amount of $ 90,000 (including a $ 15,000 Original Issue Discount). Keystone –
1 has a maturity date of February 28, 2024 . It accrues interest at a rate of 10 % per year. Keystone - 1 also has a conversion feature,
enabling it to convert into shares of the Company’s Common Stock upon default. The conversion price is equal to the lower of
(1) $ 0.015 per share or (2) 90 % of the average of the two lowest volume-weighted average price of the five trading days ending on
the day immediately prior to the conversion date. There are certain price protections, which make the conversion option a derivative
liability. Please see Note 15 – Derivative Liabilities.
(m) | On
March 21, 2023, the Company entered into a 20% OID Senior Secured Promissory Note (“Keystone – 2”) with Keystone
Capital Partners. (“Keystone”) in the amount of $ 30,000 (including a $ 5,000 Original Issue Discount). Keystone –
2 has a maturity date of February 28, 2024 . It accrues interest at a rate of 10 % per year. Keystone - 2 also has a conversion feature,
enabling it to convert into shares of the Company’s Common Stock upon default. The conversion price is equal to the lower of
(1) $ 0.015 per share or (2) 90 % of the average of the two lowest volume-weighted average price of the five trading days ending on
the day immediately prior to the conversion date. There are certain price protections, which make the conversion option a derivative
liability. Please see Note 15 – Derivative Liabilities.

Interest expense on these
notes for the three months ended March 31, 2023 is $ 22,757 . Amortization of debt and original issue discounts was $ 158,794 for the three
months ended March 31, 2023.

NOTE
11: LONG-TERM DEBT - RELATED PARTIES

The
following is a summary of the current portion - long-term debt - related parties as of March 31, 2023 and December 31, 2022:

March
31, 2023 | December
31, 2022
Note
payable - Director | (a) | $ | - | $ | 400,000
- | 400,000
Current
portion of long-term debt related parties | - | ( 400,000 | )
Long-term
debt – related parties | $ | - | $ | -
(a) | On
June 15, 2021 the Company issued a $ 400,000 promissory note to a director with a maturity date of December
12, 2021 (“the director
note”) . The
director note did not bear interest however the director received two tranches of 18,750 shares of Common Stock each for lending
this amount. Under the terms of the director note if the note was repaid by the maturity date, one of the two tranches of 18,750 shares was to be
returned. The Company and the director extended the maturity date of this note to June 14, 2022 , however the note was not repaid and the company was considered to be in default on the director note. On
December 30, 2022, the director, the Company, and Evergreen Capital Management, LLC (“Evergreen”) signed a note purchase
agreement (the “Evergreen note purchase”). In accordance with the Evergreen note purchase, Evergreen purchased the
d irector note from the director,
and the company issued 150,000 shares of its Common Stock to the director for a value of $ 17,555 .
Please See Note 13 – Stockholders’ equity (Deficiency). Pursuant
to the Evergreen note purchase the Company exchanged d irector the note with Evergreen for a secured convertible promissory note (“Evergreen – 4”) w hich was issued on December 30, 2022 and has a maturity date of December 31,
2023. Please Note 10 – Convertible Notes Payable and Note 15 – Derivative Liabilities.
25

Interest
expense on these notes for the three months ended March 31, 2023 and 2022 was $ 0 and $ 0 , respectively.

NOTE
12: NOTES PAYABLE

The
following is a summary of the notes payable as of March 31, 2023 and December 31, 2022. Any long-term debt that was repaid or converted
in 2022, is not listed, and the details of those notes can be found in our Form 10-K filed March 31, 2023:

March
31, 2023 | December
31, 2022
Baxter Credit
Union | (a) | $ | 99,976 | $ | 100,305
Diagonal Lending (FKA Sixth
Street Lending), net of discounts of $ 13,930 | (b) | 72,791 | 116,086
Loan Builder | (c) | 92,059 | 92,059
Loan Builder #2 | (d) | 50,599 | 50,559
Loan Builder #3 | (e) | 155,074 | 155,053
Individual | (f) | 25,000 | 25,000
Kabbage Loan | (g) | 79,325 | 101,271
Forward Finance | (h) | 31,042 | 31,042
Celtic | (i) | 84,524 | 80,511
Michaelson
Capital | (j) | 2,917,090 | -
Total | $ | 3,607,480 | $ | 751,886
Current
portion | ( 3,607,480 | ) | ( 751,886 | )
Long-term
debt, net of current portion | $ | - | $ | -
(a) | This Company signed an
agreement with Baxter Credit Union for a revolving loan in the amount of up to $ 100,000 at 4 % annual interest. The loan was renegotiated
for a balance of $ 99,975 with similar terms at 4 % interest per annum and is guaranteed by the CEO of the Company.
(b) | On November
22, 2022, the Company entered into a $ 115,640 promissory note (the “Diagonal Note”) with 1800 Diagonal Lending LLC (“Diagonal”).
The promissory note contains an original issue discount of $ 12,390 . Under the terms of the diagonal Note a one-time interest expense
charge of 11 % of the amount owed is incurred upon issuance. The Diagonal Note matures on November 22, 2023 . In the event of a default
the Diagonal Note contains a provision enabling the conversion of the note into the Company’s Common Stock at an exercise price
of 75 % of the lowest trading price for the Common Stock during the 10 trading days prior to the conversion date.
(c) | On January 14, 2022 the
Company signed an agreement (“Loanbuilder – 1”)for a loan through the Loanbuilder service of Paypal, Inc. for a
$ 125,000 loan. Under the terms of Loanbuilder – 1 the Company was to repay the loan in 52 weekly installments of $ 2,805 inclusive
of interest of approximately 10 % a year. As of December 31, 2022 this loan was considered to be in default.
(d) | On July 6, 2022 Rohuma
signed an agreement (“Loanbuilder – 2”) for a loan through the Loanbuilder service of Paypal, Inc. for a $ 75,000 loan. Under the terms of Loanbuilder – 2 the loan was to be repaid the in 52 weekly installments of $ 1,683 . Following the transfer
of all of the Company’s equity interests in Rohuma to Happy under the Rohuma Agreement, the Company assumed this liability.
As of December 31, 2022 this loan was considered to be in default.
(e) | On July 6, 2022 Rohuma
signed an agreement (“Loanbuilder – 3”) for a loan through the Loanbuilder service of Paypal, Inc. for a $ 125,000 loan. Under the terms of Loanbuilder – 3 the loan was to be repaid the in 52 weekly installments of $ 2,458 . Following the transfer
of all of the Company’s equity interests in Rohuma to Happy under the Rohuma Agreement, the Company assumed this liability.
As of December 31, 2022 this loan was considered to be in default.
(f) | On May 16, 2022, the Company
signed a promissory note for $ 25,000 from an individual with an annual interest rate of 12 %. The loan matures on December 31, 2023 .
In the event of default the loan incurs additional interest of 0.5 % on all outstanding principal and interest owed.
(g) | The Company signed two
Kabbage Funding Loan Agreements (together known as the “Kabbage Loan”) of $ 60,400 with American Express National Bank
on September 28, 2023 and September 29 2023, respectively. Each loan included a cost of capital interest expense of $ 4,077 and was
to be repaid in nine monthly repayments of $ 3,658 , followed by nine monthly payments of $ 35,507 .
26
(h) | On August 31, 2022, the
Company signed a future receipts sale agreement with Forward Financing, LLC. Under the terms of the agreement the Company received
$ 25,000 , net administrative fees, in exchange for $ 34,250 of future receipts. The agreement was to be repaid in weekly payments of
$ 1,427 . The total monthly repayments were not to exceed 10 % of that month’s receipts. As of March 31, 2023, this liability
is in default.
(i) | On July 29, 2022 the Company
entered into a financing and security agreement (the “Celtic line”) with Celtic Bank Corporation (“Celtic”)
whereby Celtic provided a revolving line of credit that the Company could use to draw funds. Under the terms of the agreement the
servicer for the Company regarding the revolving line of credit is BlueVine Inc (“BlueVine”). The agreement does not
set a specific interest rate for draws from the line of credit and instead the interest rate is specific to each draw. During the
three months ended March 31, 2023 the Company was charged $ 4,013 in bank services fees that have been capitalized to the outstanding
amount owed due to the Celtic line. The Celtic line is guaranteed by the Company’s CEO. As of December 31, 2022 and March 31,
2023, the Celtic line is in default.
(j) | On
January 5, 2023 the Company closed on its acquisition of Recoup, and as part of the consideration for the acquisition the Company
assumed the liabilities of a $ 3,017,090 secured promissory note owed to Michaelson Capital Special Finance Fund II, L.P. (Michaelson).
Michaelson and the Company then signed a security agreement to amend and restate the assumed note. On December 30, 2022 the Company
and Michaelson signed the amended and restated senior secured term note (the “Michaelson Note”). The Michaelson Note
has a principal value of $ 3,017,090 and an annual interest rate of 12 %. Under the terms of the Michaelson Note the Company was to
issue a repayment of $ 250,000 to Michaelson on January 31, 2023, March 31, 2023, June 30, 2023, and September 30, 2023. The remaining
balance was to be repaid on December 31, 2023. Please see Note 6 - Acquisition of Recoup Technologies, Inc. After
failing to make the first $ 250,000 payment required by the Michaelson Note, the Company and Michaelson agreed to a forbearance agreement
under which, among other terms, the outstanding principal amount was increased by $ 50,000 in exchange for deferral of the payments
owed under the Michaelson Note. Signed on March 3, 2023, the forbearance agreement set the following repayment terms: (1) beginning
in April of 2023, the Company is to make monthly interest payments for the interest amounts owed, (2) beginning in April of 2023
the Company is to make monthly principal payments of $35,000, (3) $27,671 of interest expense was added to the accrued interest owed
for March of 2023, (4) the Company was required to pay two separate payments of $50,000 during the three months ended March 31, 2023,
and (5) the forbearance agreement requires a $250,000 repayment due as of December 31, 2023.

Interest
expense on these notes for the three months ended March 31, 2023 and 2022 are $ 128,642 and $ 9,761 , respectively.

NOTE
13: STOCKHOLDERS’ EQUITY (DEFICIT)

Series
A Convertible Preferred Stock

As
of March 31, 2023 and December 31, 2022, there are no Series A Convertible Preferred shares issued and outstanding.

Each
outstanding share of Series A Convertible Preferred Stock is convertible into the number of shares of the Company’s common stock
(the “Common Stock”) determined by dividing the Stated Value by the Conversion Price as defined below, at the option of any
Series A Convertible Preferred Stock shareholder in whole or in part, at any time commencing no earlier than six (6) months after the
issuance date; provided that any conversion under this section must be made during the ten (10) day period immediately following the
date on which the corporation files with the Securities and Exchange Commission any periodic report on form 10-Q, 10-K or the equivalent
form; provided further that, any conversion under this Section IV: (a) shall be for a minimum Stated Value of $ 500 of Series A Convertible
Preferred Stock.

The
Conversion Price for each share of Series A Convertible Preferred Stock in effect on any Conversion Date shall be (i) eighty five percent
(85%) of the average closing bid price of the Common Stock over the twenty (20) trading days immediately preceding the date of conversion,
(ii) but no less than par value of the Common Stock. For purposes of determining the closing bid price on any day, reference shall be
to the closing bid price for a share of Common Stock on such date on the OTC Markets, as reported on Bloomberg, L.P. (or similar organization
or agency succeeding to its functions of reporting prices) (the “Per Share Market Value”) .

Series
B Convertible Preferred Stock

As
of March 31, 2023 and December 31, 2022, there were 1,470,135 and 220,135 shares of Series B Preferred Stock issued and outstanding,
respectively.

Each
outstanding share of Series B Convertible Preferred Stock is convertible into the 100 shares of the Company’s common stock at any
time commencing after the issuance date. Series B Convertible Stock has no voting rights. Upon any liquidation, dissolution, or winding-up
of the Corporation, whether voluntary or involuntary (a “Liquidation”), the Series B Holders shall be entitled to receive
out of the assets of the Corporation, whether capital or surplus, the same amount that a holder of Common Stock would receive if the
Series B Preferred were fully converted. Except for stock dividends or distributions for, Series B Holders are entitled to receive, and
the Company shall pay, dividends on shares of Series B Preferred equal (on an as-if-converted-to-Common-Stock basis) to and in the same
form as dividends actually paid on shares of the Common Stock when, as, and if such dividends are paid on shares of the Common Stock.
No other dividends shall be paid on shares of Series B Preferred.

On
December 30, 2022, the Company exchanged outstanding debt securities of the Company with unpaid principal and interest in the amount
of $ 5,786,474 for 13,002,729 shares of its common stock and 220,135 shares of its Series B Preferred stock.

On
January 5, 2023, pursuant to an asset purchase agreement, dated December 30, 2022, we completed the acquisition of Recoup
Technologies, Inc., and its digester business assets (“Recoup” or the “Digester business”), from Renovare
Environmental, Inc (“REI”), BioHiTech America, LLC (“BHT” and together with REI, the “Renovare
Sellers”). The consideration for the Recoup acquisiton included the issuance of 1,250,000 shares of its Series B Preferred Stock valued at $ 12,688,256 .

Common
Stock

As
of March 31, 2023, and December 31, 2022, the Company has 33,939,965 and 18,103,039 shares
issued and outstanding, respectively. On April 12, 2018, the Company amended its Articles of Incorporation to forward split all
outstanding shares of common stock such that all issued and outstanding shares of Common Stock shall be automatically combined and
reclassified such that each share of Pre-Forward Split Stock shall be combined and reclassified into four shares of Common Stock.
The number of shares for all periods presented has been retroactively restated to reflect the forward split.

During
the year ended December 31, 2022, there was 3,000 shares offered as commitment shares as additional consideration for the purchase of
a convertible note.

Between
October 1, 2022 and December 31, 2022, 394,219 options were exercised into 394,219 shares of the Company’s common stock for no
consideration. Upon issuance, the remaining $ 50,004 of stock-based compensation was expensed.

On
December 1, 2022, the Company issued 168,750 shares of its common stock in exchange for vested restricted stock awards valued at $ 393,703 .

During
the three months ended December 31, 2022, the Company issued 48,803 shares of its common stock in exchange for warrants for no consideration.

During
the three months ended June 30, 2022, 179,506 shares were issued in the exercise of warrants for $ 143 (which is included in subscription
receivable as the cash was received in July 2022), and 133,024 shares issued for the second tranche of shares for the Rohuma purchase
valued at $ 851,353 which was included in contingent consideration.

During
the three months ended March 31, 2022, the Company did not issue any shares, however, 1,370 shares were added as a fractional adjustment
when the reverse stock split occurred.

On
January 5, 2023, pursuant to an asset purchase agreement, dated December 30, 2022, we completed the acquisition of Recoup
Technologies, Inc., and its digester business assets (“Recoup” or the “Digester business”), from Renovare
Environmental, Inc (“REI”), BioHiTech America, LLC (“BHT” and together with REI, the “Renovare
Sellers”). The consideration for the Recoup acquisiton included the issuance of 15,686,926 shares of Common Stock valued at $ 1,592,318 .

Common
Stock Warrants

The
following schedule summarizes the changes in the Company’s common stock warrants:

Weighted | Weighted
Warrants
Outstanding | Average | Average
Number | Exercise | Remaining | Aggregate | Exercise
Of | Price | Contractual | Intrinsic | Price
Shares | Per
Share | Life | Value | Per
Share
Balance at December 31, 2022 | 121,547 | $ | 0.008 - 16.00 | 1.37 years | $ | 273 | $ | 8.31
Warrants granted | - | $ | - | - | $ | $
Warrants exercised | - | $ | - | - | $ | $
Warrants
expired/cancelled | - | $ | - | - | $ | $
Balance at March 31,
2023 | 121,547 | $ | 0.008 - 16.00 | 8.31 years | $ | 60,706 | $ | 1.12
Exercisable at March
31, 2023 | 119,721 | $ | 0.008 - 16.00 | years | $ | 58,438 | $ | 1.13
Balance at December 31, 2021 | 437,691 | $ | 0.008 - 16.00 | 2.69 years | $ | 1,185,798 | $ | 5.36
Warrants granted | - | $ | - | - | $
Warrants exercised/exchanged | - | $ | - | - | $
Warrants
expired/cancelled | - | $ | - | - | $
Balance
at March 31, 2022 | 437,691 | $ | 0.008 - 16.00 | 2.49 years | $ | 1,151,551 | $ | 5.38
Exercisable at March
31, 2022 | 412,050 | $ | 0.008 - 16.00 | 2.49 years | $ | 1,022,268 | $ | 5.71

Changes
to these inputs could produce a significantly higher or lower fair value measurement. The fair value of each option/warrant is estimated
using the Black-Scholes valuation model. The following assumptions were used for the three months ended March 31, 2023 and year ended
December 31, 2022:

Three
Months Ended March
31, 2023 | Year
Ended December
31, 2022
Risk free interest
rate | 2.00 – 25.00 | % | - | %
Expected term | 0.87 – 3.55 years | -
Expected volatility | 169.91 %
- 268.79 | % | - | %
Expected dividend yield | 0.00 – 0.00 | % | - | %

In
June 2022, there were 44,554 warrants exercised for $ 143 .
In addition, in June 2022, 12,500 warrants that had previously been granted to a consultant were cancelled.

In
December 2022, there were 134,952 warrants exercised for $ 0 .
In addition, in December 2022, 124,138 warrants that had previously been granted to a consultant were cancelled.

NOTE
14: STOCK-BASED COMPENSATION

On
November 23, 2020, the Board of Directors of the Company approved the 2020 Equity Incentive Plan.

Options

On
October 19, 2020, the Company granted 491,250 stock options to board members, advisory board members, employees and consultants. The
options have a 10 -year term, and are both service-based grants, as well as performance-based grants. As of March 31, 2023 all of the
options had vested, and had been either exercised or had expired.

Stock
based compensation expense from options for the three months ended March 31, 2023 and 2022 were $ 0 and $ 18,223 ,
respectively. As of March 31, 2023, there remains $ 0 of unrecognized stock-based compensation from options.

The
following represents a summary of options:

Three
Months Ended March
31, 2023 | Year
Ended December
31, 2022
Number | Weighted Average Exercise
Price | Number | Weighted Average Exercise
Price
Beginning balance | - | $ | - | 491,250 | $ | 0.0416
Granted | - | - | - | -
Exercised | - | - | ( 394,065 | ) | -
Forfeited | - | - | ( 97,185 | ) | 0.01
Expired | - | - | - | -
Ending balance | - | $ | - | - | $ | -
Intrinsic value of options | $ | - | - | $ | -
Weighted Average Remaining
Contractual Life (Years) | - | -

Restricted
Stock Awards

On
November 23, 2020, the Board of Directors of the Company approved the 2020 Equity Incentive Plan.

On
January 1, 2023, the Company granted 5,400,000 restricted stock awards to board members pursuant to the 2020 Equity Incentive Plan. The
awards vest over a three -year term and are compensation for the board members’ service.

On
January 1, 2023, the Company granted 200,000 restricted stock awards to a director pursuant to the 2020 Equity Incentive Plan. The awards
vest over a four -month term and are compensation for the director’s service.

On
January 1, 2023, the Company granted 5,930,000 restricted stock awards to the CEO. The awards were granted as a sign-on bonus. 905,000 of the restricted stock awards vested after a three -month term, which ended on March 31, 2023. The remaining 5,430,000 shares vest in
six equal installments and all begin vesting on the grant date. The first installment vests during the nine months following the grant
date and the remaining installments finish vesting every six months thereafter.

On
March 22, 2023, the Company granted 1,800,000 restricted stock awards to a director pursuant to the 2020 Equity Incentive Plan. The awards
have a three -year term and are compensation for the director’s service.

The
activity for restricted stock awards under the Company’s incentive plans is as follows for the three months ended March 31,
2023 and 2022:

Weighted
Weighted | Average
Average | Remaining
Number | Grant Date | Contractual
Shares | Fair Value | Term (years)
Nonvested at December 31, 2021 | - | $ | - | -
Granted | - | $ | -
Shares vested | - | $ | -
Forfeitures | - | $ | -
Nonvested at March 31, 2022 | - | $ | - | -
Nonvested at December 31, 2022 | - | $ | - | -
Granted | 13,330,000 | $ | 0.20
Shares vested | 905,000 | $ | 0.01
Forfeitures | - | $
Nonvested at March 31, 2023 | 12,425,000 | $ | 0.21 | 2.34
Vested and unreleased | 905,000
Outstanding at March 31, 2023 | 13,330,000 | 0.20 | 2.34

Stock
based compensation expense from restricted stock awards for the three months ended March 31, 2023 and 2022 were $ 49,548 and $ 33,208 ,
respectively. As of March 31, 2023, there remains $ 2,605,353 of unrecognized stock-based compensation from restricted stock awards. The
total fair value of restricted shares that vested during the three months ended March 31, 2023 and 2022 was $ 10,589 and $ 0 , respectively.

NOTE
15: DERIVATIVE LIABILITIES

On June 15, 2021 the Company issued a $ 400,000 promissory note to a director with a maturity date of December 12,
2021 (“the director note”). The
director note did not bear interest however the director received two tranches of 18,750 shares of Common Stock each for lending this
amount. Under the terms of the director note if the note was repaid by the maturity date, one of the two tranches of 18,750 shares was
to be returned. The Company and the director extended the maturity date of this note to June 14, 2022, however the note was not repaid
and the company was considered to be in default on the director note. On December 30, 2022, the director, the Company, and Evergreen Capital
Management, LLC (“Evergreen”) signed a note purchase agreement (the “Evergreen note purchase”). In accordance
with the Evergreen note purchase, Evergreen purchased the director note from the director, and the company issued 150,000 shares of its
Common Stock to the director for a value of $ 17,555 . Please See Note 13 – Stockholders’ equity (Deficiency). Pursuant to the
Evergreen note purchase the Company exchanged the director note with Evergreen for a secured convertible promissory note (“Evergreen
– 4”) which was issued on December 30, 2022 and has a maturity date of December 31, 2023.

On
July 5, 2022, the Company entered into a 11% OID Senior Secured Promissory Note (the “GS Capital Note”) with GS Capital
Partners LLC (“GS Capital”) in the amount of $ 144,000 (including a $ 14,000 Original Issue Discount). The GS Capital Note has a term of twelve months maturing on July 5, 2023. It accrues interest at a rate of 12 % per year. The GS Capital Note also has a conversion feature, enabling it to convert into shares of the Company’s Common Stock
upon default. The conversion price is equal to 86 % of the lowest trading price of the Company’s Common Stock for the 12 Trading Days immediately preceding the delivery of a notice of conversion. There are certain price protections, which make the
conversion option a derivative liability.

On
February 12, 2021, the Company granted 25,000 warrants (the “Platinum Point Warrants”) that have a term of three -years and
an exercise price of $ 16.00 to Platinum Point Capital, LLC. The warrants granted contain certain price protections, that make the value
of the warrants a derivative liability. As a result of a separate issuance of warrants on September 17, 2021, the exercise price of the
Platinum Point warrants was reduced to $ 11.60 .

On
March 3, 2023, the Company entered into a 20% OID Senior Secured Promissory Note (“Keystone – 1”) with Keystone Capital
Partners. (“Keystone”) in the amount of $ 90,000 (including a $ 15,000 Original Issue Discount). Keystone – 1 has a maturity
date of February 28, 2024 . It accrues interest at a rate of 10 % per year. Keystone - 1 also has a conversion feature, enabling it to
convert into shares of the Company’s Common Stock upon default. The conversion price is equal to the lower of (1) $ 0.015 per share
or (2) 90 % of the average of the two lowest volume-weighted average price of the five trading days ending on the day immediately prior
to the conversion date. There are certain price protections, which make the conversion option a derivative liability.

On
March 21, 2023, the Company entered into a 20% OID Senior Secured Promissory Note (“Keystone – 2”) with Keystone Capital
Partners. (“Keystone”) in the amount of $ 30,000 (including a $ 5,000 Original Issue Discount). Keystone – 2 has a maturity
date of February 28, 2024 . It accrues interest at a rate of 10 % per year. Keystone - 2 also has a conversion feature, enabling it to
convert into shares of the Company’s Common Stock upon default. The conversion price is equal to the lower of (1) $ 0.015 per share
or (2) 90 % of the average of the two lowest volume-weighted average price of the five trading days ending on the day immediately prior
to the conversion date. There are certain price protections, which make the conversion option a derivative liability.

On
March 14, 2023, the Company entered into a 20% OID Senior Secured Promissory Note (“Cavalry - 1”) with Cavalry Fund. (“Cavalry”)
in the amount of $ 120,000 (including a $ 20,000 Original Issue Discount). Cavalry - 1 has a maturity date of February 28, 2024 . It accrues
interest at a rate of 10 % per year. Cavalry - 1 also has a conversion feature, enabling it to convert into shares of the Company’s
Common Stock upon default. The conversion price is equal to the lower of (1) $ 0.015 per share or (2) 90 % of the average of the two lowest
volume-weighted average price of the five trading days ending on the day immediately prior to the conversion date. There are certain
price protections, which make the conversion option a derivative liability.

On
February 16, 2023, the Company entered into a 20% OID Senior Secured Promissory Note (“Cavalry – 2”) with Cavalry Fund.
(“Cavalry”) in the amount of $ 150,000 (including a $ 30,000 Original Issue Discount). Cavalry – 2 has a maturity date
of February 28, 2024 . It accrues interest at a rate of 10 % per year. Cavalry - 2 also has a conversion feature, enabling it to convert
into shares of the Company’s Common Stock upon default. The conversion price is equal to the lower of (1) $ 0.015 per share or (2) 90 % of the average of the two lowest volume-weighted average price of the five trading days ending on the day immediately prior to the
conversion date. There are certain price protections, which make the conversion option a derivative liability.

On
March 14, 2023, the Company entered into a 20% OID Senior Secured Promissory Note (“Cavalry – 3”) with Cavalry Fund.
(“Cavalry”) in the amount of $ 120,000 (including a $ 20,000 Original Issue Discount). Cavalry – 3 has a maturity date
of February 28, 2024 . It accrues interest at a rate of 10 % per year. Cavalry - 3 also has a conversion feature, enabling it to convert
into shares of the Company’s Common Stock upon default. The conversion price is equal to the lower of (1) $ 0.015 per share or (2) 90 % of the average of the two lowest volume-weighted average price of the five trading days ending on the day immediately prior to the
conversion date. There are certain price protections, which make the conversion option a derivative liability.

On
February 14, 2023, the Company entered into a 20% OID Senior Secured Promissory Note (“Eleven 11 – 1”) with Eleven
11 Management LLC. (“Eleven 11”) in the amount of $ 60,000 (including a $ 10,000 Original Issue Discount). Eleven 11 –
1 has a maturity date of February 14, 2024 . It accrues interest at a rate of 10 % per year. Eleven 11 - 1 also has a conversion feature,
enabling it to convert into shares of the Company’s Common Stock upon default. The conversion price shall be equal to the lower
of (1) $ 0.015 per share or (2) 90 % of the average of the two lowest volume-weighted average price of the five trading days ending on
the day immediately prior to the conversion date. There are certain price protections, which make the conversion option a derivative
liability.

On
March 14, 2023, the Company entered into a 20% OID Senior Secured Promissory Note (“Eleven 11 – 2”) with Eleven 11
Management LLC. (“Eleven 11”) in the amount of $ 54,000 (including a $ 9,000 Original Issue Discount). Eleven 11 – 2
has a maturity date of February 28, 2024 . It accrues interest at a rate of 10 % per year. Eleven 11 - 2 also has a conversion feature,
enabling it to convert into shares of the Company’s Common Stock upon default. The conversion price is equal to the lower of (1)
$ 0.015 per share or (2) 90 % of the average of the two lowest volume-weighted average price of the five trading days ending on the day
immediately prior to the conversion date. There are certain price protections, which make the conversion option a derivative liability.

On
October 21, 2022, the Company entered into a 20% OID Senior Secured Promissory Note (“Evergreen – 5”) with Evergreen
Capital Management, LLC (“Evergreen”) in the amount of $ 48,000 (including a $ 8,000 Original Issue Discount). Evergreen -
5 has a maturity of twelve months to July 21, 2023 . It accrues interest at a rate of 10 % per year. Evergreen - 5 also has a conversion
feature, enabling it to convert into shares of the Company’s Common Stock upon default. The conversion price is equal to 75 % of
the price per share at which the common stock of the Company is sold to the public in a qualified offering. There are certain price protections,
which make the conversion option a derivative liability.

On
January 4, 2023, the Company entered into a 20% OID Senior Secured Promissory Note (“Evergreen – 6”) with Evergreen
Capital Management, LLC (“Evergreen”) in the amount of $ 180,000 (including a $ 30,000 Original Issue Discount). Evergreen
- 6 has a maturity of twelve months ending on January 4, 2024 . It accrues interest at a rate of 10 % per year. Evergreen - 6 also has
a conversion feature, enabling it to convert into shares of the Company’s Common Stock upon default. The conversion price is equal
to the lower of (1) $ 0.015 per share or (2) 90 % of the average of the two lowest volume-weighted average price of the five trading days
ending on the day immediately prior to the conversion date. There are certain price protections, which make the conversion option a derivative
liability.

On
February 14, 2023, the Company entered into a 20% OID Senior Secured Promissory Note (“Evergreen – 7”) with Evergreen
Capital Management, LLC (“Evergreen”) in the amount of $ 12,000 (including a $ 2,000 Original Issue Discount). Evergreen -
7 has a maturity date of February 28, 2024 . It accrues interest at a rate of 10 % per year. Evergreen - 7 also has a conversion feature,
enabling it to convert into shares of the Company’s Common Stock upon default. The conversion price is equal to the lower of (1)
$ 0.015 per share or (2) 90 % of the average of the two lowest volume-weighted average price of the five trading days ending on the day
immediately prior to the conversion date. There are certain price protections, which make the conversion option a derivative liability.

On
February 16, 2023, the Company entered into a 20% OID Senior Secured Promissory Note (the “Chambers Note”) with James D.
Chambers Living Trust (“Chambers”) in the amount of $ 60,000 (including a $ 10,000 Original Issue Discount). The Chambers
Note has a maturity of twelve months ending on February 28, 2024 . It accrues interest at a rate of 10 % per year. The Chambers Note
also has a conversion feature, enabling it to convert into shares of the Company’s Common Stock upon default. The conversion
price is equal to the lower of (1) $ 0.015 per share or (2) 90 % of the average of the two lowest volume-weighted average price of the
five trading days ending on the day immediately prior to the conversion date. There are certain price protections, which make
the conversion option a derivative liability.

Changes
to these inputs could produce a significantly higher or lower fair value measurement. The fair value of each warrant is estimated using
the Black-Scholes valuation model. The following assumptions were used in March 31, 2022 and December 31, 2021:

Three
Months Ended March
31, 2023 | Year
Ended December
31, 2022
Expected term | 0.87 – 0.05 years | 1.00 – 1.00 years
Expected volatility | 169.91 – 268.79 | % | 187.00 – 355.00 | %
Expected dividend yield | 0.00 – 0.00 | % | 0.00 – 0.00 | %
Risk-free interest rate | 3.98 – 4.78 | % | 1.65 – 4.73 | %
32

The
Company’s derivative liabilities are as follows:

March
31, 2023 | December
31, 2022
Fair value of
the Evergreen 4 conversion option | $ | 66,775 | $ | 58,917
Fair value of the GS Capital
conversion option | 74,859 | 157,676
Fair value of the Platinum
Point warrants ( 25,000 warrants) | 31,223 | -
Fair
value of the Keystone 1 conversion option | 7,557,012 | -
Fair value of the Keystone
2 conversion option | 2,506,671 | -
Fair
value of the Calvary 1 conversion option | 10,117,180 | -
Fair value of the Calvary
2 conversion option | 10,045,935 | -
Fair value of the Calvary
3 conversion option | 9,999,387 | -
Fair
value of the Eleven 11 - 1 conversion option | 5,061,347 | -
Fair value of the Eleven 11
– 2 conversion option | 4,520,708 | -
Fair value of the Evergreen
5 conversion option | 40,928,831 | -
Fair value of the Evergreen
6 conversion option | 15,352,562 | -
Fair value of the Evergreen
7 conversion option | 1,012,268 | -
Fair
value of the Chambers conversion option | 5,058,590 | -
$ | 112,333,348 | $ | 216,593

Activity
related to the derivative liabilities for the three months ended March 31, 2023 is as follows:

Beginning balance
as of December 31, 2022 | $ | 216,593
Issuances of warrants/conversion
option – derivative liabilities | 95,288,462
Extinguishment of derivative
liability upon conversion/repayment of convertible notes | -
Change
in fair value of warrants/conversion option - derivative liabilities | 16,828,293
Ending
balance as of March 31, 2023 | $ | 112,333,348

nOTE
16: CONCENTRATIONS

A
major customer is defined as a customer that represents 10% or greater of total revenues. The Company does not believe that the risk
associated with these customers or vendors will have an adverse effect on the business.

Concentration
of Revenues

The
Company’s concentration of revenue is as follows:

For
the Three Months Ended March 31,
2023 | 2022
Customer A | * | 79 | %
Customer B | * | 21 | %
Customer C | 50 | % | *
Customer D | 19 | % | *
Customer E | 15 | % | *
* | Represents amounts
less than 10%

Concentration
of Accounts Receivable

The
Company’s concentration of accounts receivable is as follows:

As
of March 31, 2023 | As
of December 31, 2022
Customer A | 50 | % | *
Customer B | 19 | % | *
Customer C | 15 | % | *
* | Represents amounts
less than 10%

nOTE
17: CONTINGENCY

During
the year ended December 31, 2018, the Company charged an independent truck driver approximately $ 190,000 pursuant to its agreement with
the driver, which entitled the Company to fees equal to $ 800 per day for the driver’s failure to return a trailer owned by the
Company with the period prescribed by the agreement. The Company has not recognized this as income due to uncertainty of payment. This contingency was assumed by LR upon transfer of all of the Company’s equity interests in Mimo under the
MTP Agreement.

nOTE
18: COMMITMENTS AND CONTINGENCIES

The
below commitments and contingencies are in respect of TRAQ Pvt Ltd., and following the transfer of all of the Company’s equity interests in TRAQ Pvt Ltd., to LR under the TSP
Agreement, the commitments and contingencies were assumed by LR;

(i) | TRAQ
Pvt Ltd had applied for compounding of the TDS liability for the assessment year 2014-2015 and 2015-2016 in accordance with Indian
Income Tax Laws. However, no amount payable for tax and penalty was confirmed by the Income Tax Department. Further, TRAQ Pvt Ltd
has also defaulted for TDS deducted but not paid in time during assessment years 2016-2017 to 2020-2021. Accordingly, there may be a
contingent liability in respect of TDS regarding compounding charges, interest, and penalty which is not quantifiable at present,
and therefor no effect is given in the Consolidated Financial Statements.
(ii) | TRAQ
Pvt Ltd was delayed in complying with provisions related to Foreign Direct Investment and Transfer of Shares to Non-resident as per the
Master Circulars and notification issued by Reserve Bank of India, therefore, and is therefor liable for imposition of a penalty. Since
the amount of the penalty is not ascertainable, no effect was given in the Consolidated Financial Statements.
(iii) | Prior
to its acquisition in May 2019, TRAQ Pvt Ltd, had provided a guarantee in favor of State Bank of India for $ 165,813 on March 22, 2014,
for Mira Green Tech Private Limited. As of the execution of the TSP Agreement and the transfer of the Company’s entire equity interests in TRAQ
Pvt Ltd, to LR, the State Bank of India was in process of satisfying whether there was any obligation due by TRAQ Pvt Ltd.
(iv) | TRAQ
Pvt Ltd has a contingent liability of $ 246,398 towards income tax department for Assessment year 2018-19, However an appeal was filed
against such demand in the income tax department and proceeding is still pending; Accordingly, there may be a contingent liability in
respect of Income Tax of such demand amount, interest, and penalty. As of the execution of the TSP Agreement and the transfer of the
Company’s entire equity interests in TRAQ Pvt Ltd, to LR, this contingent liability was not quantifiable, and therefor no effect
was given in the Consolidated Financial Statements.

The
below commitments and contingencies are in respect of Mimo Technologies Pvt Ltd., and following the transfer of all of the Company’s equity interests in Mimo to LR under the MTP Agreement,
the commitments and contingencies were assumed by LR;

(i) | As
of the execution of the MTP Agreement and the transfer of the Company’s entire equity interests in Mimo to LR, Mimo
Technologies Pvt Ltd was delayed in complying with provisions related to Foreign Direct Investment and Transfer of Shares to
Non-resident as per the Master Circulars and notification issued by Reserve Bank of India, and therefore, is liable for imposition of a penalty. Since the amount of the penalty for the same is not ascertainable, no effect was given in the Consolidated
Financial Statements.
34

nOTE
19: SUBSEQUENT EVENTS

On
April 19, 2023 the Company agreed to settle its outstanding debt owed under the Celtic Note. The settlement agreement reduced the liability
owed by the Company to two payments of $ 20,000 . The first payment was due by April 28, 2023 and has been paid by the company. The second
payment is due by May 31, 2023.

On
April 28, 2023 the Company agreed to settle its outstanding debt owed under the Forward Finance future sales receipt agreement. The
settlement agreement reduced the liability owed by the Company to two payments of $ 10,950 . The first
payment was due by May 5, 2023 and has been paid by the company. The second payment is due by May 31, 2023.

On
April 1, 2023, the Company entered into a 20% OID Senior Secured Promissory Note with Keystone Capital Partners. (“Keystone”)
in the amount of $ 132,000 (including a $ 22,000 Original Issue Discount). The note has a maturity date of March 31, 2024 . It accrues interest
at a rate of 10 % per year. The note also has a conversion feature, enabling it to convert into shares of the Company’s Common Stock
upon default. The conversion price is equal to the lower of (1) $ 0.015 per share or (2) 90 % of the average of the two lowest volume-weighted
average prices of the five trading days ending on the day immediately prior to the conversion date.

On
April 18, 2023, the Company entered into a 20% OID Senior Secured Promissory Note with Keystone Capital Partners. (“Keystone”)
in the amount of $ 60,000 (including a $ 10,000 Original Issue Discount). The note has a maturity date of April 17, 2024 . It accrues interest
at a rate of 10 % per year. The note also has a conversion feature, enabling it to convert into shares of the Company’s Common Stock
upon default. The conversion price is equal to the lower of (1) $ 0.015 per share or (2) 90 % of the average of the two lowest volume-weighted
average prices of the five trading days ending on the day immediately prior to the conversion date.

On
April 26, 2023, the Company entered into a 20% OID Senior Secured Promissory Note with Keystone Capital Partners. (“Keystone”)
in the amount of $ 108,000 (including a $ 18,000 Original Issue Discount). The note has a maturity date of April 30, 2024 . It accrues interest
at a rate of 10 % per year. The note also has a conversion feature, enabling it to convert into shares of the Company’s Common Stock
upon default. The conversion price is equal to the lower of (1) $ 0.015 per share or (2) 90 % of the average of the two lowest volume-weighted
average prices of the five trading days ending on the day immediately prior to the conversion date.

On
April 1, 2023, the Company entered into a 20% OID Senior Secured Promissory Note with Cavalry Fund I LP. (“Cavalry”) in the
amount of $ 120,000 (including a $ 20,000 Original Issue Discount). The note has a maturity date of March 31, 2024 . It accrues interest
at a rate of 10 % per year. The note also has a conversion feature, enabling it to convert into shares of the Company’s Common Stock
upon default. The conversion price is equal to the lower of (1) $ 0.015 per share or (2) 90 % of the average of the two lowest volume-weighted
average prices of the five trading days ending on the day immediately prior to the conversion date.

On
April 26, 2023, the Company entered into a 20% OID Senior Secured Promissory Note with Cavalry Fund I LP. (“Cavalry”) in
the amount of $ 90,000 (including a $ 18,000 Original Issue Discount). The note has a maturity date of April 30, 2024 . It accrues interest
at a rate of 10 % per year. The note also has a conversion feature, enabling it to convert into shares of the Company’s Common Stock
upon default. The conversion price is equal to the lower of (1) $ 0.015 per share or (2) 90 % of the average of the two lowest volume-weighted
average prices of the five trading days ending on the day immediately prior to the conversion date.

On
April 5, 2023, the Company entered into a 20% OID Senior Secured Promissory Note with Evergreen Capital Management LLC. in the amount
of $ 54,000 (including a $ 9,000 Original Issue Discount). The note has a maturity date of March 31, 2024 . It accrues interest at a rate
of 10 % per year. The note also has a conversion feature, enabling it to convert into shares of the Company’s Common Stock upon
default. The conversion price is equal to the lower of (1) $ 0.015 per share or (2) 90 % of the average of the two lowest volume-weighted
average price of the five trading days ending on the day immediately prior to the conversion date.

On
April 26, 2023, the Company entered into a 20% OID Senior Secured Promissory Note with Evergreen Capital Management LLC. in the amount
of $ 108,000 (including a $ 18,000 Original Issue Discount). The note has a maturity date of April 30, 2024 . It accrues interest at a rate
of 10 % per year. The note also has a conversion feature, enabling it to convert into shares of the Company’s Common Stock upon
default. The conversion price is equal to the lower of (1) $ 0.015 per share or (2) 90 % of the average of the two lowest volume-weighted
average price of the five trading days ending on the day immediately prior to the conversion date.

On
April 17, 2023, the Company entered into a 20% OID Senior Secured Promissory Note with Seven Knots LLC. in the amount of $ 60,000 (including
a $ 10,000 Original Issue Discount). The note has a maturity date of April 16, 2024 . It accrues interest at a rate of 10 % per year. The
note also has a conversion feature, enabling it to convert into shares of the Company’s Common Stock upon default. The conversion
price is equal to the lower of (1) $ 0.015 per share or (2) 90 % of the average of the two lowest volume-weighted average price of the
five trading days ending on the day immediately prior to the conversion date.

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

The
discussion and analysis of our financial condition and results of operations are based on our condensed consolidated financial statements,
which we have prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of
these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets
and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements,
as well as the reported revenues and expenses during the reporting periods. On an ongoing basis, we evaluate estimates and judgments,
including those described in greater detail below. We base our estimates on historical experience and on various other factors that we
believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of
assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different
assumptions or conditions.

As
used in this “Management’s Discussion and Analysis of Financial Condition and Results of Operation,” except where the
context otherwise requires, the term “we,” “us,” “our,” or “the Company,” refers to the
business of TraqIQ Inc.

The
following presentation of management’s discussion and analysis of our financial condition and results of operations should be read
in conjunction with our condensed consolidated financial statements, the accompanying notes thereto and other financial information appearing
elsewhere in this quarterly report on Form 10-Q. This section and other parts of this quarterly report on Form 10-Q contain forward-looking
statements that involve risks and uncertainties. See “Forward-Looking Statements.”

Overview
of the Company

Legacy
Business

TraQiQ
Solutions Private Limited

On
May 16, 2019, the Company entered into a Share Exchange Agreement with Mann-India Technologies Private Ltd., an Indian Corporation (“Mann”).
On January 2, 2020, Mann changed its name to TraQiQ Solutions Private Limited (“TRAQ Pvt Ltd”). Pursuant to the Share Exchange
Agreement with Mann, the Company acquired 100% of the shares of Mann and assumed certain net liabilities in exchange for warrants exercisable
over a five-years to purchase 166,159 shares of common stock of the Company valued at $268. The warrants will be exercisable as follows:
(i) 12,596 warrants immediately; (ii) 107,494 warrants exercisable one-year after the date of closing, which was extended to March 31,
2021; and (iii) 46,069 warrants exercisable two-years after the date of closing. This transaction is being recorded as a business combination
under ASC 805. There were 56,400 of these warrants exercised during 2021 and 57,368 warrants remain outstanding as of March 31, 2022.

The
warrants that are exercisable in one-year and two-years are conditioned upon TRAQ Pvt Ltd. achieving certain revenue figures and pre-tax
profit percentages. TRAQ Pvt Ltd. must achieve target revenue of $1.1 million (US$) and pre-tax profit of 25% (US$). Should TRAQ Pvt
Ltd. be unable to achieve these criteria, the warrants will be reduced proportionately. A total of 52,391 of these warrants were cancelled
effective May 16, 2021 as a result of these criteria not being achieved.

Mann-India
Private limited was renamed to TraQiQ Solutions Private Limited shortly after acquisition by TraQiQ Inc.

TRAQ
Pvt Ltd. has its own experienced team of software developers dedicated towards developing various kinds of customized software.

Rohuma,
LLC

On
January 22, 2021, the Company entered into a Share Exchange Agreement with Rohuma, LLC, a Delaware limited liability company (“Rohuma”)
and its members, whereby the Rohuma members agreed to exchange all of their respective membership interests in Rohuma in exchange for
536,528 shares of common stock, of which the first tranche of shares were issued on March 1, 2021 totaling 320,285 shares, with the remaining
value reflected as contingent consideration until the shares vest at which time they will be issued. The transaction was valued at $3,433,776
($6.40 per share). The Company as of March 31, 2022, determined that the second tranche of shares (134,132) met the criteria to be issued,
and the value of $858,445 was reclassified from contingent consideration to Obligation to Issue Common Stock. Rohuma has an Indian affiliate
that is owned 99% by Rohuma and 1% by its founding member. Rohuma controls this entity and the 1% ownership by the member is now less
than 1% upon acquisition by the Company. This amount is reflected as a non-controlling interest.

On
December 30, 2022, the Company entered into an Assignment of Units (the “Rohuma Agreement”, and, together with the MTP Agreement
and the TSP Agreement, the “Disposition Agreements”) with Rohuma LLC (“Rohuma”) and Happy Kompany LLC (“Happy”)
pursuant to which the Company sold, assigned and transferred to Happy, and Happy purchased from the Company, all of the equity interests
in Rohuma in exchange for nominal consideration of $1.00. Pursuant to the Rohuma Agreement, the Company assumed the liabilities of Rohuma
with respect to two loans with Paypal/Loanbuilder in an aggregate principal amount of $155,053 plus any accumulated interest and fees.

Mimo
Technologies Private Limited

On
February 17, 2021, the Company entered into a Share Exchange Agreement with Mimo Technologies Private Ltd., and Indian corporation (“Mimo”)
and its shareholders, whereby the Mimo shareholders agreed to exchange all of their respective shares in Mimo in exchange for warrants
to purchase 170,942 shares of the Company’s common stock. Of these warrants, 102,565 were earned at the date of acquisition, with
the remaining 68,377 expected to be earned over the next two years from grant based on revenue goals for Mimo. The warrants have a term
of three years and an exercise price of $0.008 and value in the amount of $1,640,447, of which $984,268 is reflected in additional paid
in capital, with the remaining $656,179 reflected as contingent consideration. The Company as of March 31, 2022, determined that the
criteria for vesting of the second tranche of warrants was satisfied and reclassified $410,112 from contingent consideration to additional
paid in capital. In addition to the issuance of the warrants, TRAQ Pvt Ltd, wrote off $258,736 in amounts due from a note receivable,
$123,778 in accounts receivable and $40,354 in a debenture from Mimo. In addition, a cash payment was made to one of the minority shareholders
of Mimo in the amount of $22,338. The Company acquired over 99% of Mimo with the remaining percentage of less than 1% reflected as a
non-controlling interest.

Mimo
offered a broad set of services. These offerings could be classified into three broad categories:

Mimo
assisted the delivery and pickup segment of the banking and insurance industry by performing
verifications, field investigations for loan requests, business verifications and employment
verification, and also collected documents, assisted in filling forms for banks, and completed
data collection from customers.

Mimo
worked with microfinance institutions to collect cash, such as loan payments, convert cash to digital means like debit cards, and conduct
data collection and surveys.

During
the COVID-19 pandemic, Mimo leveraged video as a platform for verification and document delivery.

Continuing
Operations

Recoup
Technologies, Inc.

TraQiQ
Solutions, Inc.

Ci2i’s
cloud solutions and analytics services comprised software development, program management, project management, and business analytics
services.

Going
Concern

The
Company has an accumulated deficit of $129,484,933 as of March 31, 2023 and a working capital deficit of $116,987,178, as of March 31,
2023, and a working capital deficit of $1,682,659 as of December 31, 2022. As a result of these factors, management has determined that
there is substantial doubt about the Company ability to continue as a going concern.

The
consolidated financial statements of the Company have been prepared assuming that the Company will continue as a going concern, which
contemplates, among other things, the realization of assets and the satisfaction of liabilities in the normal course of business over
a reasonable period. The consolidated financial statements of the Company do not include any adjustments that may result from the outcome
of the uncertainties. The Company’s continuation as a going concern is contingent upon its ability to obtain additional financing
and generate revenue and cash flow to meet its obligations on a timely basis. Management intends to seek additional funding through debt
or equity financing during the next twelve months to source new inventory and generate revenue from product sales.

Discontinued
Operations

As
discussed in the consolidated financial statements, the Company sold Rohuma, Mimo and TSP in December of 2022. Additionally, the Company
is shifting operations to waste management. As such, these businesses are reported as discontinued operations for the three months ended
March 31, 2022. As required, the Company has retrospectively recast its consolidated statements of operations and balance sheets for
the consolidated financial statements.

The
retrospective recast of the company’s income statement and balance sheet for the quarter ended March 31, 2022 resulted in a loss
on discontinued operations of $6,866,913 for the three months ended March 31, 2022. The Company has not segregated the cash flows of this
business in the consolidated statements of cash flows. Management was also required to make certain assumptions and apply judgment to
determine historical expenses related to the discontinued operations presented in prior periods. Unless noted otherwise, this discussion
and analysis of our financial condition and results of operations refers to the Company’s continuing operations.

Rohuma | Mimo | TSP | Total
March 31, 2022 | March 31, 2022 | March 31, 2022 | March 31, 2022
REVENUE | $ | 48,085 | $ | 64,652 | $ | 234,189 | $ | 346,886
COST OF REVENUE | 79,065 | 145,960 | 135,687 | 360,712
GROSS PROFIT (LOSS) | (31,020 | ) | (81,308 | ) | 98,502 | (13,826 | )
OPERATING EXPENSES
Salaries and salary related costs | 104,263 | - | 17,556 | 121,819
Professional fees | 4,617 | 18,621 | 3,190 | 26,428
Rent expense | 442 | - | 755 | 1,197
Depreciation and amortization expense | - | 11,644 | 2,145 | 14,840
General and administrative expenses | 4,502 | 5,809 | 17,385 | 27,696
Total Operating Expenses | 114,875 | 36,074 | 41,031 | 191,980
OPERATING (LOSS) INCOME | (145,895 | ) | (117,382 | ) | 57,471 | (205,806 | )
OTHER INCOME (EXPENSE)
Loss from impairment of intangible assets | - | (776,263 | ) | - | (776,263 | )
Loss from impairment of goodwill | (3,519,869 | ) | (2,343,188 | ) | - | (5,863,057 | )
Interest expense, net of interest income | (2,126 | ) | (2,509 | ) | (14,280 | ) | (18,915 | )
Other income | 154 | 45 | 2,608 | 2,807
Total other income (expense) | (3,521,841 | ) | (3,121,915 | ) | (11,672 | ) | (6,655,428 | )
LOSS FROM DISTCONTINUED OPERATIONS, BEFORE PROVISION FOR INCOME TAXES | (3,667,736 | ) | (3,239,297 | ) | 45,799 | (6,861,234 | )
Provision for income taxes – discontinued operations | 367 | - | 5,312 | 5,679
LOSS INCOME FROM DISTCONTINUED OPERATIONS | $ | (3,668,103 | ) | $ | (3,239,297 | ) | $ | 40,487 | $ | (6,866,913 | )

The
following table presents a reconciliation of Rohuma, Mimo, and TSP net cash flows from operating, investing and financing activities
for the periods indicated below:

March 31, 2022
Net cash (used in) provided by operating activities - discontinued operations | $ | 409,295
Net cash (used in) provided by investing activities - discontinued operations | $ | -
Net cash provided by (used in) financing activities - discontinued operations | $ | (468,293 | )
39

Acquisition
of Recoup Technologies , Inc.

On
January 5, 2023, pursuant to an asset purchase agreement, dated December 30, 2022, we completed the acquisition of all of the Digester
business assets of Recoup Technologies, Inc. (“Recoup” or the “Digester business”) for a purchase price of $18,371,421
consisting of the following:

The
allocation of the purchase price in connection with the acquisition of Recoup was calculated as follows:

Description | Fair
Value | Weighted
Average Useful
Life (Years)
Fixed assets –
truck | $ | 1,196 | 7
Inventory | 379,718
Intellectual property | 10,333,144 | 10
Tradenames | 285,863 | 10
Noncompete agreement | 78,615 | 5
Goodwill | 7,292,885 | Indefinite
$ | 18,371,421

The
approximate revenue and gross profit for the acquired business as a standalone entity per ASC 805 from January 5, 2023 to March
31, 2023 was $64,611 and $29,158, respectively.

Results
of Operations

Results
of Operations and Financial Condition for the Three Months Ended March 31, 2023 as Compared to the Three Months Ended March 31, 2022

Revenue

For the three months ended March 31, 2023 compared
to March 31, 2022, the Company’s revenues increased by $53,209, from $522 in Q1 2022 to $65,040 in Q1 2023. The increase is the
result of the acquisition of Recoup on January 5, 2023, and the resulting revenue generated by Recoup.

Cost
of Revenue

For
the three months ended March 31, 2023 compared to March 31, 2022, the Company’s cost of revenue increased by $25,800, or 226%,
from $11,416 in Q1 2022 to $37,216 in Q1 2023. The increase is due to the increased revenue caused by the implementation of the Recoup acquisition.

Operating
Expenses

For
the three months ended March 31, 2023 compared to March 31, 2022, the Company’s salary and salary related costs increased by $70,514,
or 71%, from $100,016 to $170,530. The increase was due to the personnel costs associated with implementation of the Recoup acquisition.

For
the three months ended March 31, 2023 compared to March 31, 2022, the Company’s professional fees decreased by $56,100, or 64%,
from $88,051 to $31,951. The decrease can be attributed primarily to consulting fees incurred during 2022 in preparation for the disposal
of the Company’s subsidiaries and acquisition.

For the three months ended March 31, 2023 compared
to March 31, 2022, the Company’s depreciation and amortization expense increased by $409,788, from $0 to $409,788. The increase
was primarily the result of the acquisition of Recoup’s intangible assets and the associated amortization of the intangibles.

For
the three months ended March 31, 2023 compared to March 31, 2022, the Company’s general and administrative expenses increased
by $84,933, or 311%, from $27,309 to $112,242. The increase was primarily due to increased insurance expenses and bad debt expense
of $52,110.

Interest
Expense

For
the three months ended March 31, 2023 compared to March 31, 2022, the Company’s interest expense decreased by $307,618, or 66%,
from $464,180 to $156,562. The decrease was due mainly to a decrease in debt instruments accruing interest on the Company’s Balance
sheet.

Changes
in Fair Value of Derivative Liabilities

For
the three months ended March 31, 2023 compared to March 31, 2022, the Company’s change in the fair value of the derivative
liability increased by $16,828,293, from $0 in Q1 2022 to an expense of $16,828,293 in Q1 2023 due to changes in the
volatility of the Company’s share price over the period March 31, 2023 compared to March 31, 2022.

Net
Loss from Continuing Operations

For
the three months ended March 31, 2023 compared to March 31, 2022, the Company’s net loss from continuing operations increased
by $111,173,161 from $691,060 in Q1 2022 to $111,864,221 in Q1 2023 due to the changes noted herein.

Liquidity
and Capital Resources

As
of March 31, 2023, current assets were $576,312 and current liabilities outstanding amounted to $117,465,564 which resulted in a working
capital deficit of $116,889,252. As of December 31, 2022, current assets were $66,460 and current liabilities outstanding amounted to
$1,682,659 which resulted in a working capital deficit of $1,682,659.

Net
cash used in operating activities was $192,445 for the three months ended March 31, 2023 compared to $399,388 for the three months ended
March 31, 2022. Cash used in operations for the three months ended March 31, 2023, was primarily due to a net loss of $111,864,221, and
an increase in accounts receivable of $117,979; offset by a change in the fair value of the derivative liability and derivative expense
of $111,011,754, depreciation and amortization expense of $250,994, amortization of discounts and convertible options on debt of $158,794,
an increase in accounts payable, accrued expenses, and deferred taxes of $93,957, and an increase in accrued payroll and payroll taxes
of $94,529.

Net
cash used in operations for the three months ended March 31, 2022 was primarily due to a net loss of $917,348; offset mainly by amortization
of discounts and convertible options on debt of $292,777, an increase in accounts payable, accrued expenses and deferred taxes of $84,422,
stock-based compensation of $51,431, and a decrease in accounts receivable of $45,052.

Cash
flows used for investing activities for the three months ended March 31, 2022, was limited to the $25,574 acquisition of fixed assets
related to the Company’s Indian subsidiaries, which were disposed of in December of 2022 and are considered discontinued operations.
Cash flows used in investing activities for the three months ended March 31, 2023 was limited to the cash consideration paid for the
acquisition of Recoup of $150,000.

During the three months ended March 31, 2023, the cash flows from financing activities consisted of convertible note proceeds of
$705,000; offset by payments on notes payable of $163,814 and payments for convertible notes of $60,480. Net cash provided by
financing activities for the three months ended March 31, 2022 consisted of proceeds received from long-term debt of $344,652, and
proceeds received from related party notes of $205,836. These cash flows were offset by repayments of $63,973 in related party notes
and $58,615 in long-term debt during the three months ended March 31, 2022. In addition, for the three months ended March 31, 2022
there was an increase in the cash overdraft of $48,400.

The
company had $986 and $7,991 of cash payments for interest expense for the three months ended March 31, 2023 and 2022, respectively. As
well as $0 and $5,679 of cash payments for income taxes for the three months ended March 31, 2023 and 2022, respectively.

Off-Balance
Sheet Arrangements

We
have no off-balance sheet financing arrangements.

Item
3. Quantitative and Qualitative Disclosures about Market Risk

None.

Item
4. Controls and Procedures

Evaluation
of Disclosure Controls and Procedures

Based
on an evaluation as of the date of the end of the period covered by this report, the Company’s Certifying Officers conducted an
evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures, as required by
Exchange Act Rule 13a-15. Based on that evaluation, the Company’s Certifying Officers concluded that, because of the disclosed
material weaknesses in the Company’s internal control over financial reporting, the Company’s disclosure controls and procedures
were ineffective as of the end of the period covered by this report to ensure that information required to be disclosed by the Company
in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized and reported within the time
periods specified by the SEC’s rules and forms.

Disclosure
controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in the
Company’s reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods
specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures
designed to ensure that information required to be disclosed in the Company’s reports filed under the Exchange Act is accumulated
and communicated to management, including the Company’s Certifying Officers, to allow timely decisions regarding required disclosure.
Based upon the evaluation of the disclosure controls and procedures at the end of the period covered by this report, our Certifying Officers
concluded that our disclosure controls and procedures were not effective as a result of continuing weaknesses in our internal control
over financial reporting principally due to the following:

- | We
have not established adequate financial reporting processes or monitoring activities to ensure adequate financial reporting and to
mitigate the risk of management override, specifically because there are few employees and only two officers with management functions
and therefore there is lack of segregation of duties.
- | An
outside consultant assists in the preparation of the annual and quarterly financial statements and partners with us to ensure compliance
with US GAAP and SEC disclosure requirements.
- | Outside
counsel assists us to review and editing of the annual and quarterly filings and to ensure compliance with SEC disclosure requirements.

Changes
in Internal Control over Financial Reporting

There
have been no changes in the Company’s internal control over financial reporting that occurred during the period ended March 31,
2023 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial
reporting.

The
term “internal control over financial reporting” is defined as a process designed by, or under the supervision of, the registrant’s
principal executive and principal financial officers, or persons performing similar functions, and effected by the registrant’s
board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes
those policies and procedures that:

(a) | Pertain
to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets
of the registrant;
(b) | Provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with
generally accepted accounting principles, and that receipts and expenditures of the registrant are being made only in accordance
with authorizations of management and directors of the registrant; and
(c) | Provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the registrant’s
assets that could have a material effect on the financial statements.
42

PART
II - OTHER INFORMATION

Item
1. Legal Proceedings

We
are not a party to any material litigation, nor, to the knowledge of management, is any litigation threatened against us that may materially
affect us.

Item
1A. Risk Factors

None.

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

None.

Item
3. Defaults Upon Senior Securities

None.

Item
4. Mine Safety Disclosures

Not
applicable.

Item
5. Other Information

(a)
Not applicable.

(b)
During the quarter ended March 31, 2023, there have not been any material changes to the procedures by which security holders may recommend
nominees to the Board of Directors.

Item
6. Exhibits

Exhibit
Number | Description
of Exhibit
31.1 | Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 | Certification
of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1 | Certification
of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2 | Certification
of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS | Inline
XBRL Instance
101.SCH | Inline
XBRL Taxonomy Extension Schema
101.CAL | Inline
XBRL Taxonomy Extension Calculation
101.DEF | Inline
XBRL Taxonomy Extension Definition
101.LAB | Inline
XBRL Taxonomy Extension Labels
101.PRE | Inline
XBRL Taxonomy Extension Presentation
104 | Cover
Page Interactive Data File (embedded within the Inline XBRL document)
43

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 thereunto duly authorized.

TraQiQ,
Inc.
Date:
May 18, 2023 | By: | /s/
Ajay Sikka
Ajay
Sikka
Chief
Executive Officer (principal executive officer)
Date:
May 18, 2023 | By: | /s/
Ajay Sikka
Ajay Sikka
Chief Financial Officer (principal financial and accounting
officer)
44

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