TLSS - Transportation and Logistics Systems Inc. Announces Financial Results for the Year Ended December 31 2020
Subsequent Events Reflect Shift to Acquisition Plan
JUPITER, FL / ACCESSWIRE / March 18, 2021 / Transportation and Logistics Systems, Inc. (OTC PINK:TLSS), ("TLSS" or the "Company"), an eCommerce fulfillment service provider, announced today that on March 17, 2021, it filed its Form 10-K Annual Report for the calendar year ended December 31, 2020.
John Mercadante, Chairman and CEO of TLSS, commented, "While 2020 was a challenging year, both financially and operationally, we enter 2021 poised to pursue an acquisition growth strategy by virtue of our successful restructuring efforts."
Financial Results for the Year Ended December 31, 2020
Revenues for the year ended December 31, 2020 decreased $5,530,000, or 17.6%, to $25,827,000, as compared to $31,356,000, for the year ended December 31, 2019. The Company's loss from continuing operations for the year ended December 31, 2020 was $42,782,000, primarily consisting of: (i) a loss from operations of $8,216,000; (ii) interest expense of $7,552,000: and (iii) non-cash charges for both derivative expense of $34,693,000 and settlement expense of $546,000, all of which were partially offset by: (i) a gain on debt extinguishment of $7,847,000 and (ii) other income of $377,000. This compared to a loss from continuing operations of $44,183,000 for the year ended December 31, 2019.
For the year ended December 31, 2020, TLSS recorded no loss from discontinued operations as compared to a loss from discontinued operations of $681,000 for the same period in 2019. The net loss attributable to common shareholders for the year ended December 31, 2020 totaled approximately $62,005,000 as compared to a net loss attributable to common shareholders of $45,846,000 for the same period in 2019.
Subsequent to December 31, 2020, the Company:
- Entered into securities purchase agreements with investors resulting in gross proceeds to the Company of $1,330,000. The Company paid fees of $137,000 and received net proceeds of $1,193,000;
- Closed a transaction to acquire substantially all of the assets and certain liabilities of a New Jersey-based logistics provider. The purchase price was $100,000 of cash and a promissory note of $400,000; and
- Signed a definitive agreement to acquire substantially all of the assets and certain liabilities of a New York-based full-service logistics provider specializing in pickup, warehousing and delivery services in the tri-state area for approximately $2,350,000.
About Transportation and Logistics Systems, Inc.
TLSS, through its wholly-owned operating subsidiaries, Shypdirect LLC and Shyp FX, Inc., operates as a logistics and transportation company specializing in eCommerce fulfillment through last-mile, two-person home delivery, mid-mile and line-haul 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," "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; the termination or curtailment of our mid-mile and long-haul delivery business by the single customer which accounts for the great bulk of that business, Amazon Logistics, Inc.; a demand that the Company and/or its subsidiaries repay the PPP loans secured in April 2020 (possibly with interest and/or penalties); adverse or unanticipated events in the litigation to which we are currently a party (or as to which we may become a party in the future); adverse or unanticipated decisions by insurance companies and/or by courts construing third-party liability insurance policies to which the Company and/or its subsidiaries is a party; a failure to obtain adequate liability insurance coverage in the future; 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, social 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 release. 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 Annual Report on Form 10-K for the year ended December 30, 2020 and in our Quarterly Reports on Form 10-Q, as well as any amendments thereto, filed with the Securities and Exchange Commission.
Investor Relations
Phone: 833.764.1443
Email: info@tlss-inc.com
TRANSPORTATION AND LOGISTICS SYSTEMS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
| December 31, |
| December 31, |
| 2020 |
| 2019 |
ASSETS |
CURRENT ASSETS: |
Cash |
| $ |
| 579,283 |
| $ |
| 50,026 |
Accounts receivable, net |
| 372,922 |
| 963,771 |
Prepaid expenses and other current assets |
| 443,410 |
| 1,246,555 |
Total Current Assets |
| 1,395,615 |
| 2,260,352 |
OTHER ASSETS: |
Security deposit |
| 94,000 |
| 76,500 |
Property and equipment, net |
| 598,807 |
| 240,406 |
Right of use assets, net |
| 1,445,274 |
| 1,750,430 |
Total Other Assets |
| 2,138,081 |
| 2,067,336 |
TOTAL ASSETS |
| $ |
| 3,533,696 |
| $ |
| 4,327,688 |
LIABILITIES AND SHAREHOLDERS' DEFICIT |
CURRENT LIABILITIES: |
Convertible notes payable, net of put premium of $0 and $385,385 and debt discounts of $83,548 and $2,210,950, respectively |
| $ |
| 979,216 |
| $ |
| 3,634,344 |
Notes payable, current portion, net of debt discount of $0 and $762,112, respectively |
| 3,919,544 |
| 2,425,003 |
Note payable - related party |
| 500,000 |
| 500,000 |
Accounts payable |
| 1,104,263 |
| 1,517,082 |
Accrued expenses |
| 424,595 |
| 627,990 |
Insurance payable |
| 1,985,893 |
| 2,948,261 |
Contingency liabilities |
| 3,311,272 |
| 440,000 |
Lease liabilities, current portion |
| 380,843 |
| 333,126 |
Derivative liability |
| 4,181,187 |
| 2,135,939 |
Due to related parties |
| 297,692 |
| 325,445 |
Accrued compensation and related benefits |
| 922,396 |
| 886,664 |
Total Current Liabilities |
| 18,006,901 |
| 15,773,854 |
LONG-TERM LIABILITIES: |
Notes payable, net of current portion |
| 437,594 |
| - |
Lease liabilities, net of current portion |
| 1,102,617 |
| 1,440,258 |
Total Long-term Liabilities |
| 1,540,211 |
| 1,440,258 |
Total Liabilities |
| 19,547,112 |
| 17,214,112 |
Commitments and Contingencies (See Note 9) |
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 1,700,000 shares issued and outstanding at December 31, 2020 and 2019, respectively (Liquidation value $700 and $1,700, respectively) |
| 700 |
| 1,700 |
Series C preferred stock, par value $0.001 per share; 1 shares designated; No shares issued and outstanding at December 31, 2020 and 2019, respectively |
| - |
| - |
Series D preferred stock, par value $0.001 per share; 1,250,000 shares designated; 0 and 0 shares issued and outstanding at December 31, 2020 and 2019, respectively ($6.00 per share liquidation value) |
| - |
| - |
Series E preferred stock, par value $0.001 per share; 562,250 shares designated; 105,378 and 0 shares issued and outstanding at December 31, 2020 and 2019, respectively ($13.34 per share liquidation value) |
| 105 |
| - |
Common stock, par value $0.001 per share; 4,000,000,000 shares authorized; 1,733,847,494 and 11,832,603 shares issued and outstanding at December 31, 2020 and 2019, respectively |
| 1,733,848 |
| 11,833 |
Common stock issuable, par value $0.001 per share; 0 and 25,000 shares |
| - |
| 25 |
Additional paid-in capital |
| 104,872,991 |
| 47,715,878 |
Accumulated deficit |
| (122,621,060 |
| ) |
| (60,615,860 |
| ) |
Total Shareholders' Deficit |
| (16,013,416 |
| ) |
| (12,886,424 |
| ) |
Total Liabilities and Shareholders' Deficit |
| $ |
| 3,533,696 |
| $ |
| 4,327,688 |
TRANSPORTATION AND LOGISTICS SYSTEMS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
| For the Year Ended |
| December 31, |
| 2020 |
| 2019 |
REVENUES |
| $ |
| 25,826,632 |
| $ |
| 31,356,251 |
COST OF REVENUES |
| 23,284,240 |
| 28,752,889 |
GROSS PROFIT |
| 2,542,392 |
| 2,603,362 |
OPERATING EXPENSES: |
Compensation and related benefits |
| 2,335,388 |
| 13,158,040 |
Legal and professional fees |
| 3,920,606 |
| 2,096,359 |
Rent |
| 651,806 |
| 419,249 |
General and administrative expenses |
| 814,306 |
| 2,791,272 |
Contingency loss |
| 3,035,837 |
| 586,784 |
Impairment loss |
| - |
| 3,842,259 |
Total Operating Expenses |
| 10,757,943 |
| 22,893,963 |
LOSS FROM OPERATIONS |
| (8,215,551 |
| ) |
| (20,290,601 |
| ) |
OTHER (EXPENSES) INCOME: |
Interest expense |
| (7,377,164 |
| ) |
| (6,318,122 |
| ) |
Interest expense - related parties |
| (174,947 |
| ) |
| (222,328 |
| ) |
Loan fees |
| - |
| (601,121 |
| ) |
Gain (loss) on debt extinguishment, net |
| 7,847,073 |
| 39,090,168 |
Settlement expense |
| (545,616 |
| ) |
| - |
Other income |
| 376,750 |
| - |
Derivative income (expense), net |
| (34,692,503 |
| ) |
| (55,841,032 |
| ) |
Total Other (Expenses) Income |
| (34,566,407 |
| ) |
| (23,892,435 |
| ) |
LOSS FROM CONTINUING OPERATIONS |
| (42,781,958 |
| ) |
| (44,183,036 |
| ) |
LOSS FROM DISCONTINUED OPERATIONS: |
Loss from discontinued operations |
| - |
| (681,426 |
| ) |
NET LOSS |
| (42,781,958 |
| ) |
| (44,864,462 |
| ) |
Deemed dividend related to ratchet adjustment and beneficial conversion features |
| (19,223,242 |
| ) |
| (981,548 |
| ) |
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS |
| $ |
| (62,005,200 |
| ) |
| $ |
| (45,846,010 |
| ) |
NET LOSS PER COMMON SHARE - BASIC AND DILUTED |
Net loss from continuing operations |
| $ |
| (0.08 |
| ) |
| $ |
| (4.73 |
| ) |
Loss from discontinued operations |
| (0.00 |
| ) |
| (0.07 |
| ) |
Net loss per common share - basic and diluted |
| $ |
| (0.08 |
| ) |
| $ |
| (4.80 |
| ) |
WEIGHTED AVERAGE COMMON SHARE OUTSTANDING: |
Basic and diluted |
| 751,822,976 |
| 9,561,186 |
SOURCE: Transportation & Logistics Systems
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