Transportation and Logistics Systems, Inc. Announces Financial Results for the First Quarter Ended March 31, 2022

Rhea-AI Summary

Transportation and Logistics Systems (OTCQB:TLSS) reported a Q1 2022 net loss of $2.1 million, aligned with management's budget expectations. Revenue fell by 15.6% to $1.26 million, primarily due to the decline of its former subsidiary Shypdirect's operations. This was partially offset by growth from Shyp FX and Cougar Express, amounting to $923,000. With $6 million in cash and no debt, CEO Sebastian Giordano expressed optimism about accelerating growth and profitability in Q2 2022, despite the ongoing challenges from previous operations.

Positive

• Company holds $6 million in cash and has no debt.
• Net loss decreased from $3.1 million to $2.1 million year-over-year.
• Acquired businesses Shyp FX and Cougar Express contributed an increase in revenue.

Negative

• Revenue decreased by $233,000 or 15.6% compared to Q1 2021.
• Loss from operations totaled $1.8 million, including $836,000 in non-cash stock-based compensation.
• Decreased revenue attributed to former subsidiary Shypdirect's cessation of operations.

Company Anticipates Progress on M&A Front During Second Quarter

JUPITER, FL / ACCESSWIRE / May 13, 2022 / Transportation and Logistics Systems, Inc. (OTCQB:TLSS), ("TLSS", or the "Company"), a logistics service provider, announced that today, May 13, 2022, the Company filed its Form 10-Q, Quarterly Report for the first quarter ended March 31, 2022.

Sebastian Giordano, Chairman and CEO of TLSS, commented, "While Q1 showed a loss of $2.1 million, of which $1.2 million related to non-cash adjustments and a one-time litigation settlement accrual, these results were absolutely in line with management's budgeted expectations for the period. With roughly $6 million in cash and no debt, we are very encouraged by how the Company is positioned right now, as we are poised to accelerate the Company's growth trajectory and path to profitability, that we believe, will start to become evident as Q2 unfolds."

Financial Results for the First Quarter Ended March 31, 2022

Revenue for the three months ended March 31, 2022 decreased $233,000, or 15.6%, to $1,259,000, as compared to $1,492,000, for the same period last year. This decrease was primarily the result of decreases in revenue attributable to the Company's former subsidiary Shypdirect's mid-mile and long-haul business with Amazon of $1,155,000 and from other customers of $37,000, as Shypdirect was no longer in operations during the same period this year. These decreases were partially offset by revenue increases of $37,000 from Shyp FX and $923,000 from Cougar Express, which were businesses the Company acquired in January 2021 and March 2021, respectively, and which were both in operations the entire first quarter of 2022.

The Company generated a net loss attributable to common shareholders for the three months ended March 31, 2022 of $2,146,000, as compared to a net loss attributable to common shareholders of $3,099,000 for the same period last year. This quarter's results comprised: (i) a loss from operations of $1,801,000, including $836,000 in non-cash stock-based compensation; (ii) one-time settlement expense of $229,000; (iii) non-cash deemed dividends related to dividends accrued on Series E and Series G preferred stock of $109,000; and (iv) interest expense of $7,800.

About Transportation and Logistics Systems, Inc.

TLSS, through its wholly owned operating subsidiaries, Cougar Express, Inc and Shyp FX, 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 stockholders' equity and our ability to achieve sustained profitability; remaining weaknesses in our internal control over financial reporting and our ability to maintain effective controls over financial reporting in the future; our remaining liabilities and indebtedness could adversely affect our business, financial condition and results of operations and our ability to meet our payment obligations; unanticipated and materially adverse developments in our few remaining litigations; 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
kpinder@landoncapital.net
www.landoncapital.net

TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

		March 31,				December 31,
		2022				2021
		(Unaudited)
ASSETS
CURRENT ASSETS:
Cash		$	6,063,241			$	6,067,692
Accounts receivable, net			461,575				481,734
Prepaid expenses and other current assets			210,459				197,336
Total Current Assets			6,735,275				6,746,762
OTHER ASSETS:
Security deposit			39,495				33,340
Property and equipment, net			530,872				577,205
Intangible assets, net			2,032,572				2,177,382
Total Other Assets			2,602,939				2,787,927
TOTAL ASSETS		$	9,338,214			$	9,534,689
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable, current portion		$	315			$	283,141
Accounts payable			310,871				312,772
Accrued expenses			607,634				212,975
Insurance payable			34,563				98,255
Accrued compensation and related benefits			78,139				98,964
Total Current Liabilities			1,031,522				1,006,107
LONG-TERM LIABILITIES:
Notes payable, net of current portion			-				12,455
Total Long-term Liabilities			-				12,455
Total Liabilities			1,031,522				1,018,562
Commitments and Contingencies (See Note 11)			-
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; 700,000 and 700,000 shares issued and outstanding at March 31, 2022 and December 31, 2021, 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, 2022 and December 31, 2021, respectively ($6.00 per share liquidation value)			-				-
Series E preferred stock, par value $0.001 per share; 562,250 shares designated; 31,658 and 51,605 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively ($13.34 per share liquidation value)			32				52
Series G preferred stock, par value $0.001 per share; 1,000,000 shares designated; 710,000 and 615,000 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively ($10.00 per share liquidation value)			710				615
Preferred stock			710				615
Common stock, par value $0.001 per share; 10,000,000,000 shares authorized; 3,187,771,983 and 2,926,528,666 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively			3,187,772				2,926,529
Additional paid-in capital			126,280,247				124,604,718
Accumulated deficit			(121,162,769	)			(119,016,487	)
Total Shareholders' Equity			8,306,692				8,516,127
Total Liabilities and Shareholders' Equity		$	9,338,214			$	9,534,689

TRANSPORTATION AND LOGISTICS SYSTEMS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

		For the Three Months Ended
		March 31,
		2022				2021
REVENUES		$	1,259,333			$	1,491,699
COST OF REVENUES			971,002				1,898,778
GROSS PROFIT (LOSS)			288,331				(407,079	)
OPERATING EXPENSES:
Compensation and related benefits			1,356,410				368,609
Legal and professional fees			349,494				530,538
Rent			101,337				133,955
General and administrative expenses			281,943				196,203
Total Operating Expenses			2,089,184				1,229,305
LOSS FROM OPERATIONS			(1,800,853	)			(1,636,384	)
OTHER INCOME (EXPENSES):
Interest expense			(7,867	)			(83,509	)
Interest expense - related parties			-				(22,192	)
Gain on debt extinguishment, net			-				59,853
Settlement expense			(228,511	)			-
Other income			-				108,035
Derivative expense			-				(694,983	)
Total Other Income (Expenses)			(236,378	)			(632,796	)
LOSS BEFORE INCOME TAXES			(2,037,231	)			(2,269,180	)
Provision for income taxes			-				-
NET LOSS			(2,037,231	)			(2,269,180	)
Deemed dividends related to beneficial conversion features, and accrued dividends			(109,051	)			(829,836	)
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS		$	(2,146,282	)		$	(3,099,016	)
NET LOSS PER COMMON SHARE - BASIC AND DILUTED
Basic and diluted		$	(0.00	)		$	(0.00	)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic and diluted			3,040,797,022				1,747,413,151

TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

		For the Three Months Ended
		March 31,
		2022				2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss		$	(2,037,231	)		$	(2,269,180	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense			191,143				85,760
Amortization of debt discount to interest expense			-				19,013
Stock-based compensation			836,133				-
Derivative expense, net			-				694,983
Non-cash portion of gain on extinguishment of debt, net			-				(59,853	)
Rent expense			-				1,563
Change in operating assets and liabilities:
Accounts receivable			20,159				164,345
Prepaid expenses and other current assets			(13,123	)			248,906
Security deposit			(6,155	)			(8,000	)
Accounts payable and accrued expenses			283,707				350,348
Insurance payable			(63,692	)			(212,331	)
Accrued compensation and related benefits			(20,825	)			(21,886	)
NET CASH USED IN OPERATING ACTIVITIES			(809,884	)			(1,006,332	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash acquired in acquisition			-				10,031
Cash used for acquisitions			-				(2,133,146	)
NET CASH USED IN INVESTING ACTIVITIES			-				(2,123,115	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from sale of series E preferred share units			-				3,258,000
Net proceeds from sale of series G preferred share units			855,000				-
Proceeds from exercise of warrants			245,714				-
Repayment of notes payable			(295,281	)			(37,114	)
Net repayments of related party advances			-				(7,808	)
NET CASH PROVIDED BY FINANCING ACTIVITIES			805,433				3,213,078
NET (DECREASE) INCREASE IN CASH			(4,451	)			83,631
CASH, beginning of period			6,067,692				579,283
CASH, end of period		$	6,063,241			$	662,914
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for:
Interest		$	7,867			$	33,415
Income taxes		$	-			$	-
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Conversion of debt and accrued interest for common stock		$	-			$	170,000
Reclassification of due to related parties to accrued expenses		$	-			$	94,000
Deemed dividend related to price protection and beneficial conversion features		$	-			$	777,510
Conversion of Series E preferred stock to common stock		$	20			$	-
Accrual of preferred stock dividends		$	109,051			$	-
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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FAQ

What were TLSS's Q1 2022 financial results?

TLSS reported a revenue of $1.26 million, down 15.6% from the previous year, and a net loss of $2.1 million.

How much cash does TLSS currently have?

TLSS has approximately $6 million in cash and no debt.

What drove the revenue decline for TLSS in Q1 2022?

The revenue decline was mainly due to the loss of revenue from the former subsidiary Shypdirect.

What is TLSS's outlook for Q2 2022?

CEO Sebastian Giordano is optimistic about the company's growth trajectory and profitability becoming evident in Q2 2022.

How did TLSS's net loss change year-over-year?

TLSS's net loss improved from $3.1 million in Q1 2021 to $2.1 million in Q1 2022.