Transportation and Logistics Systems, Inc. Announces Financial Results for the Year Ended December 31, 2021

Rhea-AI Summary

Transportation and Logistics Systems (OTCQB:TLSS) announced an unqualified audit opinion following its Annual Report filing for the year ended December 31, 2021. Key highlights include a significant reduction in liabilities by 95% to $1 million and an increase in shareholder equity to $8.5 million, up from a deficit of $16 million. Revenues decreased by 78.7% to $5.5 million due to the cessation of unprofitable Amazon-related businesses. However, TLSS reported a net income of $6.3 million, contrasting a net loss of $42.8 million in 2020, aided by gains on deconsolidation and debt extinguishment.

Positive

• Achieved an unqualified audit opinion.
• Reduced liabilities by 95% from $20 million to $1 million.
• Increased shareholder equity by $24.5 million to $8.5 million.
• Turned a working capital deficit of $16.6 million into a positive $5.7 million.
• Reported a net income of $6.3 million compared to a net loss of $42.8 million in 2020.

Negative

• Revenue decreased by 78.7% to $5.5 million due to the cessation of unprofitable operations.

Unqualified Audit Opinion Highlights Strengthened Financial Position

JUPITER, FL / ACCESSWIRE / April 1, 2022 / Transportation and Logistics Systems, Inc. (OTCQB:TLSS), ("TLSS" or the "Company"), a logistics service provider, announced today that on March 31, 2022, it filed its Annual Report on Form 10-K for the calendar year ended December 31, 2021.

Sebastian Giordano, Chairman and CEO of TLSS, commented, "Undoubtedly, the highlight of this filing is that the Company received an unqualified audit opinion. Our significantly improved financial position was further evidenced by the fact that between December 31, 2020, and December 31, 2021, the Company reduced its liabilities by 95% from $20 million to $1 million; increased its shareholder equity by $24.5 million from a deficit of $16 million to equity of $8.5 million; and turned a $16.6 million working capital deficit into a positive working capital of $5.7 million, the latter a major contributing factor in resolving prior going concern issues. Finally, during the first quarter of 2022, we took decisive actions to rectify internal control procedure issues through the efforts of our new CFO and established proper corporate governance with the addition of two new independent board members and the formation of the appropriate board committees. In our opinion, these factors clearly demonstrate the Company's ability and resolve to properly position the Company for growth."

Financial Results for the Year Ended December 31, 2021
Revenues for the year ended December 31, 2021, decreased $20,331,000, or 78.7%, to $5,495,000, as compared to $25,827,000, for the year ended December 31, 2020, due primarily to the cessation of the Company's unprofitable Amazon related businesses through its two former subsidiaries. The Company's net income for the year ended December 31, 2021, was $6,254,000, primarily consisting of: (i) a gain on deconsolidation of subsidiaries of $12,363,000; (ii) derivative income of $3,284,000; (iii) gain on debt extinguishment of $1,714,000; and (iv) other income of $195,000, all of which were partially offset by: (i) a loss from operations of $6,445,000; (ii) warrant exercise inducement expense of $4,432,000 and (iii) interest expense of $425,000. This compared to a net loss of $42,782,000 for the year ended December 31, 2020.

Net income attributable to common shareholders for the year ended December 31, 2021, totaled $3,604,000 as compared to a net loss attributable to common shareholders of $62,005,000 for the same period in 2020 due to deemed dividend related to ratchet adjustment and beneficial conversion features of $2,650,000 and $19,223,000 in 2021 and 2020, respectively.

Subsequent to December 31, 2021, the Company:

1. Entered into securities purchase agreements with investors resulting in gross proceeds to the Company of $950,000. The Company paid fees of $95,000 and received net proceeds of $855,000;
2. Issued 24,571,429 shares of its common stock and received proceeds of $245,714 from the exercise of 24,571,429 warrants at $0.01 per share; and
3. Paid off its last remaining outstanding debt of $175,000 together with accrued interest of $5,304.55 in connection with that certain promissory note due to the seller of Cougar Express, Inc.

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 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
Landon Capital
Keith Pinder
(404) 995-6671
kpinder@landoncapital.net
www.landoncapital.net

TRANSPORTATION AND LOGISTICS SYSTEMS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

		December 31,			December 31,
		2021			2020
ASSETS
CURRENT ASSETS:
Cash		$	6,067,692		$	579,283
Accounts receivable, net			481,734			-
Prepaid expenses and other current assets			197,336			75,951
Assets subject to assignment for benefit of creditors, current portion			-			740,381
Total Current Assets			6,746,762			1,395,615
OTHER ASSETS:
Security deposit			33,340			-
Property and equipment, net			577,205			472,670
Intangible assets, net			2,177,382			-
Assets subject to assignment for benefit of creditors			-			1,665,411
Total Other Assets			2,787,927			2,138,081
TOTAL ASSETS		$	9,534,689		$	3,533,696
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Convertible notes payable, net of debt discounts of $0 and $83,548, respectively		$	-		$	979,216
Notes payable, current portion, net of debt discount of $0 and $0, respectively			283,141			85,207
Note payable - related party			-			500,000
Accounts payable			312,772			465,581
Accrued expenses			212,975			254,095
Insurance payable			98,255			26,794
Derivative liability			-			4,181,187
Due to related parties			-			173,692
Accrued compensation and related benefits			98,964			2,670
Liabilities subject to assignment for benefit of creditors, current portion			-			11,338,459
Total Current Liabilities			1,006,107			18,006,901
LONG-TERM LIABILITIES:
Notes payable, net of current portion			12,455			290,215
Liabilities subject to assignment for benefit of creditors			-			1,249,996
Total Long-term Liabilities			12,455			1,540,211
Total Liabilities			1,018,562			19,547,112
Commitments and Contingencies (See Note 12)
SHAREHOLDERS' EQUITY (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 December 31, 2021 and 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 December 31, 2021 and 2020, respectively ($6.00 per share liquidation value)			-			-
Series E preferred stock, par value $0.001 per share; 562,250 shares designated; 51,605 and 105,378 shares issued and outstanding at December 31, 2021 and 2020, respectively ($13.34 per share liquidation value)			52			105
Series G preferred stock, par value $0.001 per share; 1,000,000 shares designated; 615,000 and 0 shares issued and outstanding at December 31, 2021 and 2020, respectively ($10.00 per share liquidation value)			615			-
Preferred stock
Common stock, par value $0.001 per share; 10,000,000,000 shares authorized; 2,926,528,666 and 1,733,847,494 shares issued and outstanding at December 31, 2021 and 2020, respectively			2,926,529			1,733,848
Additional paid-in capital			124,604,718			104,872,991
Accumulated deficit			(119,016,487	)		(122,621,060	)
Total Shareholders' Equity (Deficit)			8,516,127			(16,013,416	)
Total Liabilities and Shareholders' Equity (Deficit)		$	9,534,689		$	3,533,696

TRANSPORTATION AND LOGISTICS SYSTEMS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

		2021				2020
		For the Year Ended
		December 31,
		2021				2020
REVENUES		$	5,495,146			$	25,826,632
COST OF REVENUES			5,408,143				23,284,240
GROSS PROFIT			87,003				2,542,392
OPERATING EXPENSES:
Compensation and related benefits			1,403,311				2,335,388
Legal and professional fees			2,160,081				3,920,606
Rent			599,820				651,806
General and administrative expenses			1,115,187				814,306
Contingency loss			30,000				3,035,837
Loss on lease abandonment			1,223,628				-
Total Operating Expenses			6,532,027				10,757,943
LOSS FROM OPERATIONS			(6,445,024	)			(8,215,551	)
OTHER INCOME (EXPENSES):
Interest expense			(349,544	)			(7,377,164	)
Interest expense-related parties			(74,959	)			(174,947	)
Warrant exercise inducement expense			(4,431,853	)			-
Gain on debt extinguishment, net			1,564,941				7,847,073
Gain on debt extinguishment - related party			148,651				-
Settlement expense			-				(545,616	)
Other income			194,823				376,750
Gain on deconsolidation of subsidiaries			12,363,449				-
Derivative income (expense), net			3,284,306				(34,692,503	)
Total Other Income (Expenses)			12,699,814				(34,566,407	)
INCOME (LOSS) BEFORE INCOME TAXES			6,254,790				(42,781,958	)
Provision for income taxes			-				-
NET INCOME (LOSS)			6,254,790				(42,781,958	)
Deemed dividends related to ratchet adjustment, beneficial conversion features, and accrued dividends			(2,650,217	)			(19,223,242	)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS		$	3,604,573			$	(62,005,200	)
NET INCOME (LOSS) PER COMMON SHARE - BASIC AND DILUTED
Basic		$	0.00			$	(0.08	)
Diluted		$	0.00			$	(0.08	)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic			2,341,907,998				751,822,976
Diluted			3,728,170,026				751,822,976

SOURCE: Transportation & Logistics Systems

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FAQ

What were TLSS's financial results for 2021?

TLSS reported revenues of $5.5 million, a decrease of 78.7% from 2020, but achieved a net income of $6.3 million.

How did TLSS improve its financial position in 2021?

The company reduced liabilities by 95%, increased shareholder equity to $8.5 million, and turned a working capital deficit into a positive amount.

What significant changes occurred in TLSS's leadership recently?

TLSS appointed a new CFO, added two independent board members, and strengthened corporate governance.

What was the reason for TLSS's revenue decline?

The revenue decline was primarily due to the cessation of unprofitable Amazon-related businesses.

What is TLSS's stock symbol?

TLSS trades under the stock symbol 'TLSS' on the OTCQB.