Q1 Highlighted by Two Acquisitions
JUPITER, FL / ACCESSWIRE / May 18, 2021 / Transportation and Logistics Systems, Inc. (OTC PINK:TLSS), ("TLSS", or the "Company"), an eCommerce fulfillment service provider, announced today that on May 17, 2021, it filed its Form 10-Q, Quarterly Report for the first quarter ended March 31, 2021.
John Mercadante, Chairman and CEO of TLSS, commented, "The first quarter of 2021 is indicative of the Company's continued positive progress since commencing its restructuring initiatives in mid-February 2020 and then navigating the termination of its unprofitable Amazon DSP business at the end of September 2020. The Company has started to rebuild its revenue base with two acquisitions completed in January and March of 2021. Moreover, we continue to evaluate and pursue opportunities that could further strengthen our balance sheet and profitably grow the business, with the goal of enhancing shareholder value."
Financial Results for the First Quarter Ended March 31, 2021
Revenue for the three months ended March 31, 2021 decreased $7,143,000, or 82.7%, to $1,492,000, as compared to $8,635,000, for the same period in 2021. Such decrease was due primarily to the termination of the Company's former Amazon Delivery Service Provider ("DSP") business as of September 30, 2020.
The Company generated a net loss attributable to common shareholders for the three months ended March 31, 2021 of $3,099,000, as compared to a net loss attributable to common shareholders of $22,149,000 for the same period last year. This quarter's results were comprised of: (i) a loss from operations of $1,636,000; (ii) interest expense of $106,000; (iii) non-cash derivative expense of $695,000; and (iv) non-cash deemed dividend related to ratchet adjustment, beneficial conversion features, and accrued dividends of $830,000; and which were partially offset by: (i) other income $108,000 and (ii) gain from extinguishment of debt of $60,000.
About Transportation and Logistics Systems, Inc.
TLSS, through its wholly-owned operating subsidiaries, Shypdirect LLC, Shyp FX, Inc. and Cougar Express, Inc., operates as a full-service logistics and transportation company.
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 ability 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:
Phone: 833.764.1443
Email: info@tlss-inc.com
TRANSPORTATION AND LOGISTICS SYSTEMS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
| March 31, | December 31, | |||||||
| 2021 | 2020 | |||||||
| (Unaudited) | ||||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash | $ | 662,914 | $ | 579,283 | ||||
Accounts receivable, net | 473,752 | 372,922 | ||||||
Prepaid expenses and other current assets | 202,038 | 443,410 | ||||||
Total Current Assets | 1,338,704 | 1,395,615 | ||||||
OTHER ASSETS: | ||||||||
Security deposit | 135,340 | 94,000 | ||||||
Other receivable | 622,240 | - | ||||||
Property and equipment, net | 805,842 | 598,807 | ||||||
Intangible assets, net | 2,604,782 | - | ||||||
Right of use assets, net | 1,392,367 | 1,445,274 | ||||||
Total Other Assets | 5,560,571 | 2,138,081 | ||||||
TOTAL ASSETS | $ | 6,899,275 | $ | 3,533,696 | ||||
LIABILITIES AND SHAREHOLDERS' DEFICIT | ||||||||
CURRENT LIABILITIES: | ||||||||
Convertible notes payable, net of put premium of $0 and $0 and debt discounts of $64,535 and $83,548, respectively | $ | 828,229 | $ | 979,216 | ||||
Notes payable, current portion, net of debt discount of $0 and $0, respectively | 5,344,048 | 3,919,544 | ||||||
Note payable - related party | 500,000 | 500,000 | ||||||
Accounts payable | 1,468,474 | 1,104,263 | ||||||
Accrued expenses | 708,498 | 424,595 | ||||||
Insurance payable | 1,773,562 | 1,985,893 | ||||||
Contingency liabilities | 3,311,272 | 3,311,272 | ||||||
Lease liabilities, current portion | 400,102 | 380,843 | ||||||
Derivative liability | 4,876,170 | 4,181,187 | ||||||
Due to related parties | 195,884 | 297,692 | ||||||
Accrued compensation and related benefits | 900,510 | 922,396 | ||||||
Total Current Liabilities | 20,306,749 | 18,006,901 | ||||||
LONG-TERM LIABILITIES: | ||||||||
Notes payable, net of current portion | 467,434 | 437,594 | ||||||
Lease liabilities, net of current portion | 1,032,014 | 1,102,617 | ||||||
Total Long-term Liabilities | 1,499,448 | 1,540,211 | ||||||
Total Liabilities | 21,806,197 | 19,547,112 | ||||||
Commitments and Contingencies (See Note 10) | ||||||||
SHAREHOLDERS' DEFICIT: | ||||||||
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; 700,000 and 700,000 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively (Liquidation value $700 and $700, respectively) | 700 | 700 | ||||||
Series D preferred stock, par value $0.001 per share; 1,250,000 shares designated; no shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively ($6.00 per share liquidation value) | - | - | ||||||
Series E preferred stock, par value $0.001 per share; 562,250 shares designated; 416,370 and 105,378 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively ($13.34 per share liquidation value) | 416 | 105 | ||||||
Common stock, par value $0.001 per share; 10,000,000,000 shares authorized; 1,749,302,040 and 1,733,847,494 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively | 1,749,302 | 1,733,848 | ||||||
Additional paid-in capital | 109,062,736 | 104,872,991 | ||||||
Accumulated deficit | (125,720,076 | ) | (122,621,060 | ) | ||||
Total Shareholders' Deficit | (14,906,922 | ) | (16,013,416 | ) | ||||
Total Liabilities and Shareholders' Deficit | $ | 6,899,275 | $ | 3,533,696 | ||||
TRANSPORTATION AND LOGISTICS SYSTEMS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| For the Three Months Ended | ||||||||
| March 31, | ||||||||
| 2021 | 2020 | |||||||
REVENUES | $ | 1,491,699 | $ | 8,635,060 | ||||
COST OF REVENUES | 1,898,778 | 7,855,749 | ||||||
GROSS PROFIT (LOSS) | (407,079 | ) | 779,311 | |||||
OPERATING EXPENSES: | ||||||||
Compensation and related benefits | 368,609 | 742,045 | ||||||
Legal and professional fees | 530,538 | 414,810 | ||||||
Rent | 133,955 | 164,350 | ||||||
General and administrative expenses | 196,203 | 245,283 | ||||||
Total Operating Expenses | 1,229,305 | 1,566,488 | ||||||
LOSS FROM OPERATIONS | (1,636,384 | ) | (787,177 | ) | ||||
OTHER (EXPENSES) INCOME: | ||||||||
Interest expense | (83,509 | ) | (3,046,727 | ) | ||||
Interest expense - related parties | (22,192 | ) | (107,138 | ) | ||||
Gain on debt extinguishment, net | 59,853 | 275,034 | ||||||
Other income | 108,035 | 67,831 | ||||||
Derivative (expense) income, net | (694,983 | ) | 144,839 | |||||
Total Other (Expenses) Income | (632,796 | ) | (2,666,161 | ) | ||||
LOSS BEFORE INCOME TAXES | (2,269,180 | ) | (3,453,338 | ) | ||||
Provision for income taxes | - | - | ||||||
| . | ||||||||
NET LOSS | (2,269,180 | ) | (3,453,338 | ) | ||||
Deemed dividends related to ratchet adjustment, beneficial conversion features, and accrued dividends | (829,836 | ) | (18,696,012 | ) | ||||
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ | (3,099,016 | ) | $ | (22,149,350 | ) | ||
NET LOSS PER COMMON SHARE - BASIC AND DILUTED | $ | (0.00 | ) | $ | (1.79 | ) | ||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||||||
Basic and diluted | 1,747,413,151 | 12,353,129 | ||||||
TRANSPORTATION AND LOGISTICS SYSTEMS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| For the Three Months Ended | ||||||||
| March 31, | ||||||||
| 2021 | 2020 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net loss | $ | (2,269,180 | ) | $ | (3,453,338 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation and amortization expense | 85,760 | 14,188 | ||||||
Amortization of debt discount to interest expense | 19,013 | 1,359,388 | ||||||
Stock-based compensation and consulting fees | - | 31,250 | ||||||
Interest expense related to debt default added to principal | - | 1,387,785 | ||||||
Derivative expense, net | 694,983 | (144,839 | ) | |||||
Non-cash portion of gain on extinguishment of debt, net | (59,853 | ) | (327,584 | ) | ||||
Rent expense | 1,563 | 5,571 | ||||||
Change in operating assets and liabilities: | ||||||||
Accounts receivable | 164,345 | (99,454 | ) | |||||
Prepaid expenses and other current assets | 248,906 | 819,161 | ||||||
Security deposit | (8,000 | ) | (124,750 | ) | ||||
Accounts payable and accrued expenses | 350,348 | 796,036 | ||||||
Insurance payable | (212,331 | ) | (661,668 | ) | ||||
Accrued compensation and related benefits | (21,886 | ) | 288,180 | |||||
NET CASH USED IN OPERATING ACTIVITIES | (1,006,332 | ) | (110,074 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Purchase of property and equipment | - | (460,510 | ) | |||||
Cash acquired in acquisition | 10,031 | - | ||||||
Cash used for acquisitions | (2,133,146 | ) | - | |||||
NET CASH USED IN INVESTING ACTIVITIES | (2,123,115 | ) | (460,510 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Net proceeds from sale of series E preferred share units | 3,258,000 | - | ||||||
Proceeds from convertible notes payable | - | 1,860,000 | ||||||
Repayment of convertible notes payable | - | (159,988 | ) | |||||
Net proceeds from notes payable | - | 1,033,510 | ||||||
Repayment of notes payable | (37,114 | ) | (2,124,777 | ) | ||||
Net payments on related party advances | (7,808 | ) | (55,561 | ) | ||||
NET CASH PROVIDED BY FINANCING ACTIVITIES | 3,213,078 | 553,184 | ||||||
NET INCREASE (DECREASE) IN CASH | 83,631 | (17,400 | ) | |||||
CASH, beginning of period | 579,283 | 50,026 | ||||||
CASH, end of period | $ | 662,914 | $ | 32,626 | ||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||||||||
Cash paid for: | ||||||||
Interest | $ | 33,415 | $ | 741,627 | ||||
Income taxes | $ | - | $ | - | ||||
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
Debt discounts recorded | $ | - | $ | 262,893 | ||||
Increase in derivative liability and debt discount | $ | - | $ | 1,267,473 | ||||
Conversion of debt and accrued interest for common stock | $ | 170,000 | $ | 341,518 | ||||
Reclassification of accrued interest to debt | $ | - | $ | 80,155 | ||||
Reclassification of due to related parties to accrued expenses | $ | 94,000 | $ | - | ||||
Decrease in put premium and paid-in capital | $ | - | $ | 73,725 | ||||
Reclassification of warrant value from equity to derivative liabilities | $ | - | $ | 11,381,885 | ||||
Deemed dividend related to price protection and beneficial conversion features | $ | 777,510 | $ | 18,696,012 | ||||
ACQUISITIONS: | ||||||||
Assets acquired: | ||||||||
Accounts receivable | $ | 265,175 | $ | - | ||||
Prepaid expenses | 7,534 | - | ||||||
Property and equipment | 257,416 | - | ||||||
Right of use assets | 44,388 | - | ||||||
Other receivable | 622,240 | - | ||||||
Security deposits | 33,340 | - | ||||||
Total assets acquired | 1,230,093 | - | ||||||
Less: liabilities assumed: | ||||||||
Accounts payable | 132,155 | - | ||||||
Accrued expenses | 79,138 | - | ||||||
Notes payable | 1,491,458 | - | ||||||
Lease liabilities | 44,388 | - | ||||||
Total liabilities assumed | 1,747,139 | |||||||
Increase in intangible assets - non-cash | $ | 517,046 | $ | - | ||||
SOURCE: Transportation & Logistics Systems
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https://www.accesswire.com/647626/Transportation-and-Logistics-Systems-Inc-Announces-Financial-Results-for-the-First-Quarter-Ended-March-31-2021
