Transportation and Logistics Systems, Inc. Announces Financial Results for the First Quarter Ended March 31, 2023

Read Time:11 Minute, 12 Second

Acquisitions Drive Revenue Growth and Continued Margin Improvement

JUPITER, FL / ACCESSWIRE / May 15, 2023 / Transportation and Logistics Systems, Inc. (OTC PINK:TLSS) (“TLSS” or the “Company”), the parent company of certain wholly-owned operating subsidiaries, which, together, provide a suite of logistics and transportation services, announced that today, May 15, 2023, the Company filed its Form 10-Q, Quarterly Report for the first quarter ended March 31, 2023.

Sebastian Giordano, Chairman and CEO of TLSS, commented, “Along with the significant revenue growth, by virtue of our acquisitions to date, the Company delivered a 53.7% improvement in its gross profit margin percentage to 35.2% this year as compared to 22.9% last year, resulting in a $1,680,000, or 582.7%, increase in our gross profit to $1,969,000 versus $288,000, quarter over quarter. In addition to the gross margin improvement, we are undertaking new organic growth initiatives, cost savings measures and integration efforts that we expect will improve our bottom-line results. Meanwhile, we continue to explore viable acquisition opportunities.”

Financial Results for the First Quarter Ended March 31, 2023

Revenue for the three months ended March 31, 2023 increased $4,336,000, or 344.3%, to $5,595,000, as compared to $1,259,000, for the same period last year. This increase was primarily the result of the acquisitions of JFK Cartage, Inc. on July 31, 2022, Freight Connections, Inc. on September 15, 2022 and Severance Trucking, Inc. (“Severance”) on January 31, 2023, none of which were owned in the first quarter of 2022. The first quarter of 2023 reflected only two months of operations for Severance.

The Company generated a net loss attributable to common shareholders for the three months ended March 31, 2023 of $1,746,000, as compared to a net loss attributable to common shareholders of $2,146,000 for the same period last year. This quarter’s results comprised: (i) a loss from operations of $1,507,000, including $117,000 in non-cash stock-based compensation and depreciation and amortization of $376,000; (ii) interest expense of $139,000; and (iii) non-cash deemed dividends related to dividends accrued on Series E and Series G preferred stock of $100,000.

About Transportation and Logistics Systems, Inc.

TLSS is a publicly-traded holding company. Its wholly-owned operating subsidiaries, Cougar Express, Inc., Freight Connections, Inc., JFK Cartage, Inc. and Severance Trucking Co., Inc., together provide a full suite of logistics and transportation services. For more information, visit the Company’s website, www.tlss-inc.com .

Forward-Looking Statements

Statements in this press release regarding the Company that are not historical facts are forward-looking statements and are subject to risks and uncertainties that could cause actual future events or results to differ materially from such statements. Any such forward-looking statements, including, but not limited to, financial guidance, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that do not directly or exclusively relate to historical facts. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “could,” “would,” “expects,” “plans,” “anticipates,” “intend,” “plan,” “goal,” “seek,” “strategy,” “future,” “likely,” “believes,” “estimates,” “projects,” “forecasts,” “predicts,” “potential,” or the negative of those terms, and similar expressions and comparable terminology. These include, but are not limited to, statements relating to future events or our future financial and operating results, plans, objectives, expectations, and intentions. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these expectations may not be achieved. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they represent our intentions, plans, expectations, assumptions, and beliefs about future events and are subject to known and unknown risks, uncertainties, and other factors outside of our control that could cause our actual results, performance, or achievement to differ materially from those expressed or implied by these forward-looking statements. In addition to the risks described above, these risks and uncertainties include: our ability to successfully execute our business strategies, including integration of acquisitions and the future acquisition of other businesses to grow our company; customers’ cancellation on short notice of master service agreements from which we derive a significant portion of our revenue or our failure to renew such master service agreements on favorable terms or at all; our ability to attract and retain key personnel and skilled labor to meet the requirements of our labor-intensive business or labor difficulties which could have an effect on our ability to bid for and successfully complete contracts; the ultimate geographic spread, duration and severity of the coronavirus outbreak and the effectiveness of actions taken, or actions that may be taken, by governmental authorities to contain the outbreak or ameliorate its effects; our failure to compete effectively in our highly competitive industry could reduce the number of new contracts awarded to us or adversely affect our market share and harm our financial performance; our ability to adopt and master new technologies and adjust certain fixed costs and expenses to adapt to our industry’s and customers’ evolving demands; our history of losses, deficiency in working capital and a stockholders’ deficit and our historical inability to achieve sustained profitability; material weaknesses in our internal control over financial reporting and our ability to maintain effective controls over financial reporting in the future; our substantial indebtedness could adversely affect our business, financial condition and results of operations and our ability to meet our payment obligations; the impact of new or changed laws, regulations or other industry standards that could adversely affect our ability to conduct our business; and changes in general market, economic and political conditions in the United States and global economies or financial markets, including those resulting from natural or man-made disasters.

These forward-looking statements represent our estimates and assumptions only as of the date of this release and, except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise after the date of this letter. Given these uncertainties, you should not place undue reliance on these forward-looking statements and should consider various factors, including the risks described, among other places, in our most recent Annual Report on Form 10-K and in our Quarterly Reports on Form 10-Q, as well as any amendments thereto, filed with the Securities and Exchange Commission.

Investor Relations Contact

Landon Capital
Keith Pinder
(404) 995-6671
[email protected]
www.landoncapital.net

TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

	March 31,			December 31,
	2023			2022
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash	$	472,655		$	1,470,807
Accounts receivable, net		3,361,850			2,059,326
Prepaid expenses and other current assets		433,075			613,035

Total Current Assets		4,267,580			4,143,168

OTHER ASSETS:
Security deposits		454,844			377,107
Property and equipment, net		2,887,613			1,607,212
Right of use assets, net		12,150,532			8,457,083
Goodwill		2,105,879			2,105,879
Intangible assets, net		4,742,925			4,601,677

Total Other Assets		22,341,793			17,148,958

TOTAL ASSETS	$	26,609,373		$	21,292,126

LIABILITIES AND SHAREHOLDERS` EQUITY

CURRENT LIABILITIES:
Notes payable, current portion	$	6,035,877		$	4,953,078
Accounts payable (including accounts payable – related party of $324,551 and $115,117 on March 31, 2023 and December 31, 2022, respectively)		1,520,736			472,701
Accrued expenses		910,918			837,170
Insurance payable		359,135			137,477
Lease liabilities, current portion		3,006,297			2,081,099
Accrued compensation and related benefits		183,035			65,103

Total Current Liabilities		12,015,998			8,546,628

LONG-TERM LIABILITIES:
Notes payable, net of current portion		1,483,066			831,499
Lease liabilities, net of current portion		9,219,225			6,413,937

Total Long-term Liabilities		10,702,291			7,245,436

Total Liabilities		22,718,289			15,792,064

Commitments and Contingencies (See Note 10)		–			–

SHAREHOLDERS` EQUITY:
Preferred stock, par value $0.001; authorized 10,000,000 shares:
Series B convertible preferred stock, par value $0.001 per share; 1,700,000 shares designated; No shares issued and outstanding at March 31, 2023 and December 31, 2022 (Liquidation value $0)		–			–
Series D convertible preferred stock, par value $0.001 per share; 1,250,000 shares designated; no shares issued and outstanding at March 31, 2023 and December 31, 2022 ($6.00 per share liquidation value)		–			–
Series E convertible preferred stock, par value $0.001 per share; 562,250 shares designated; 21,418 shares issued and outstanding at March 31, 2023 and December 31, 2022 ($13.34 per share liquidation value)		21			21
Series G convertible preferred stock, par value $0.001 per share; 1,000,000 shares designated; 546,000 and 575,000 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively ($10.00 per share liquidation value)		546			575
Series H convertible preferred stock, par value $0.001 per share; 35,000 shares designated; 32,374 shares issued and outstanding at March 31, 2023 and December 31, 2022 (No per share liquidation value)		32			32
Preferred stock, value		32			32
Common stock, par value $0.001 per share; 10,000,000,000 shares authorized; 3,702,010,977 and 3,636,691,682 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively		3,702,011			3,636,692
Additional paid-in capital		129,444,899			129,372,841
Accumulated deficit		(129,256,425	)		(127,510,099	)

Total Shareholders` Equity		3,891,084			5,500,062

Total Liabilities and Shareholders` Equity	$	26,609,373		$	21,292,126

TRANSPORTATION AND LOGISTICS SYSTEMS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

	For the Three Months Ended
	March 31,
	2023			2022

REVENUES	$	5,594,896		$	1,259,333

COST OF REVENUES (including cost of sales – related party of $770,707 and $0 for the three months ended March 31, 2023 and 2022, respectively)		3,626,353			971,002

GROSS PROFIT		1,968,543			288,331

OPERATING EXPENSES:
Compensation and related benefits		1,115,484			1,356,410
Legal and professional fees		557,083			349,494
Rent		1,038,083			101,337
General and administrative expenses		764,836			281,943

Total Operating Expenses		3,475,486			2,089,184

LOSS FROM OPERATIONS		(1,506,943	)		(1,800,853	)

OTHER INCOME (EXPENSES):
Interest income		992			–
Interest expense		(139,245	)		(7,867	)
Loss on sale of subsidiary		(720	)		–
Settlement expense		–			(228,511	)

Total Other Income (Expenses)		(138,973	)		(236,378	)

LOSS BEFORE INCOME TAXES		(1,645,916	)		(2,037,231	)

Provision for income taxes		–			–

NET LOSS		(1,645,916	)		(2,037,231	)

Accrued dividends		(100,410	)		(109,051	)

NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	(1,746,326	)	$	(2,146,282	)

NET LOSS PER COMMON SHARE – BASIC AND DILUTED
Basic and diluted	$	(0.00	)	$	(0.00	)

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic and diluted		3,685,826,300			3,040,797,022

TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

	For the Three Months Ended
	March 31,
	2023			2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(1,645,916	)	$	(2,037,231	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense		375,911			191,143
Stock-based compensation		117,292			836,133
Lease costs		37,037			–
Bad debt recovery		(23,273	)		–
Change in operating assets and liabilities:
Accounts receivable		(442,365	)		20,159
Prepaid expenses and other current assets		(56,586	)		(13,123	)
Security deposit		(70,737	)		(6,155	)
Accounts payable and accrued expenses		817,424			283,707
Insurance payable		221,658			(63,692	)
Accrued compensation and related benefits		(34,699	)		(20,825	)

NET CASH USED IN OPERATING ACTIVITIES		(704,254	)		(809,884	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(206,988	)		–
Proceeds from repayment of note receivable		255,000			–
Cash acquired in acquisitions		207,471			–
Cash used for acquisitions		(687,808	)		–

NET CASH USED IN INVESTING ACTIVITIES		(432,325	)		–

CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from sale of series G preferred share units		–			855,000
Proceeds from exercise of warrants		–			245,714
Proceeds from notes payable		196,700			–
Repayment of notes payable		(58,273	)		(295,281	)

NET CASH PROVIDED BY FINANCING ACTIVITIES		138,427			805,433

NET DECREASE IN CASH		(998,152	)		(4,451	)

CASH, beginning of period		1,470,807			6,067,692

CASH, end of period	$	472,655		$	6,063,241

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for:
Interest	$	119,240		$	7,867
Income taxes	$	–		$	–

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Conversion of Series E preferred stock to common stock	$	–		$	20
Conversion of Series G preferred stock and accrued dividends to common stock	$	20,056		$	–
Accrual of preferred stock dividends	$	100,410		$	109,051
Increase in right of use assets and lease liabilities	$	3,958,260		$	–

ACQUISITIONS:
Assets acquired:
Accounts receivable	$	836,886		$	–
Prepaid expenses		18,454			–
Property and equipment		1,186,198			–
Right of use assets		457,239			–
Security deposits		7,000			–
Intangible assets		404,374
Total assets acquired		2,910,151			–
Less: liabilities assumed:
Accounts payable		211,303			–
Accrued expenses		12,702			–
Accrued compensation and related benefits		152,631			–
Notes payable		1,595,939			–
Lease liabilities		457,239			–
Total liabilities assumed		2,429,814			–
Net assets acquired	$	480,337		$	–