TLSS Announces Financial Results for the Three and Nine Months Ended September 30, 2023
Transportation and Logistics Systems, Inc. (TLSS) reported increased revenues but higher than expected losses in Q2 and Q3, leading to a significant strain on working capital. The company is exploring financing options and corrective measures to address operating losses and get operations on a path to profitability.
11/15/2023 - 08:30 AM
Corrective Measures Expected To Address Operating Losses
JUPITER, FL / ACCESSWIRE / November 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, today announced that on November 14, 2023, the Company had timely filed its Quarterly Report on Form 10-Q, for the three and nine months ended September 30, 2023.
Mr. Sebastian Giordano, Chairman and Chief Executive Officer of TLSS, stated, "While year over year revenues reflect an increase over the prior three-month and nine-month periods based primarily upon 2022 and 2023 acquisitions, we did experience lower than expected revenues and higher than expected losses in our operations, most notably in the Freight Connections subsidiary, where revenues dropped significantly in Q2 and Q3. While Cougar Express and Severance revenues appear to be rebounding in Q4, and where strides have been made to reduce operating costs, our operations have not performed profitably, as hoped, or expected. These factors have definitely put a significant strain on our working capital, and we have been re-evaluating our operations for areas of revenue enhancement and cost reduction. We expect to take bold measures to get operations on a path to profitability. In addition, to address the Company's cash position, we are exploring various financing options available to the Company, though there is no guarantee that such financing will be secured. Meanwhile, on the acquisition front, several opportunities we were aggressively pursuing for the better part of the last year, and where we were very close to finalizing definitive agreements, did not materialize. However, we continue to assess a number of other growth opportunities as our M&A pipeline remains strong. Clearly, we were not satisfied with the operating results, and, while the industry, in general, has been extremely challenging, we need to take whatever steps are necessary to deliver positive results."
Financial Results for the Three Months Ended September 30, 2023
Revenue for the three months ended September 30, 2023, increased $3,247,000 , or 190.9% , to $4,948,000 as compared to $1,701,000 for same prior year period during 2022. Such increase was due primarily to the acquisitions of JFK Cartage and Freight Connections in August and September 2022, respectively, and Severance Trucking in February 2023.
The Company had a loss from operations of $2,327,000 for the three months ended September 30, 2023, as compared to a loss from operations of $1,016,000 for the same prior year period.
The Company had a net loss of $2,668,000 for the three months ended September 30, 2023, due to: (i) the loss from operations of $2,327,000 and (ii) interest expense of $341,000. T his compared to net loss of $1,044,000 for the same prior year period.
The Company had net loss attributable to TLSS common shareholders of $2,731,000 for the three months ended September 30, 2023 due to: (i) the net loss of $2,668,000 and (ii) accrued dividends of $63,000 , as compared to a net loss attributable to TLSS common shareholders of $1,145,000 for the same prior year period.
Financial Results for the Nine Months Ended September 30, 2023
Revenue for the nine months ended September 30, 2023, increased $11,240,000 , or 257.5% , to $15,604,000 as compared to $4,365,000 for same prior year period during 2022. Such increase was primarily due to the acquisitions of JFK Cartage and Freight Connections in August and September 2022, respectively, and Severance Trucking in February 2023.
The Company had a loss from operations of $6,090,000 for the nine months ended September 30, 2023, as compared to a loss from operations of $3,822,000 for the same prior year period.
The Company had a net loss of $6,793,000 for the nine months ended September 30, 2023, due primarily to: (i) the loss from operations of $6,090,000 ; (ii) interest expense of $694,000 ; (iii) settlement expense of $10,000 ; and (iv) a loss from the sale of subsidiary of $1,000. T his compared to a net loss of $3,790,000 for the same prior year period.
The Company had net loss attributable to TLSS common shareholders of $7,266,000 for the nine months ended September 30, 2023 due to: (i) the net loss of $6,793,000 and (ii) accrued dividends of $473,000 , as compared to a net loss attributable to TLSS common shareholders of $4,107,000 for the same prior year period.
As a result of the above, the Company's cash reserve has decreased, as has its cash flow, and the Company will need to raise debt or equity financing within the next 30 days to meet its ongoing obligations, as has occurred on several occasions in recent months.
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.
Services include LTL, TL, cartage, airport, container freight station pickup and drayage, transloading, construction trade, warehousing and distribution, pool distribution and final mile, TSA certified, white glove delivery and now, overnight service. For coverage area and pricing, please contact your nearest service center. In NY (516.239.0244), in NJ (201.933.6027) and in MA (800.225.1111).
For more information about TLSS, 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 Contact: info@tlss-inc.com
TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
September 30, December 31,
2023 2022
(Unaudited) ASSETS
CURRENT ASSETS:
Cash
$ 98,636 $ 1,470,807 Accounts receivable, net
2,037,298 2,059,326 Prepaid expenses and other current assets
499,948 613,035
Total Current Assets
2,635,882 4,143,168
OTHER ASSETS:
Security deposits
473,278 377,107 Property and equipment, net
3,096,590 1,607,212 Right of use assets, net
10,490,399 8,457,083 Goodwill
2,105,879 2,105,879 Intangible assets, net
4,225,717 4,601,677
Total Other Assets
20,391,863 17,148,958
TOTAL ASSETS
$ 23,027,745 $ 21,292,126
LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY
CURRENT LIABILITIES:
Notes payable, current portion
$ 1,578,651 $ 408,407 Notes payable - related parties, current portion
5,144,671 4,544,671 Accounts payable (including accounts payable - related party of $348,396 and $115,117 on September 30, 2023 and December 31, 2022, respectively)
2,650,736 472,701 Accrued expenses
1,083,147 837,170 Insurance payable
418,770 137,477 Lease liabilities, current portion
3,265,828 2,081,099 Accrued compensation and related benefits
174,954 65,103
Total Current Liabilities
14,316,757 8,546,628
LONG-TERM LIABILITIES:
Notes payable, net of current portion
1,724,712 831,499 Lease liabilities, net of current portion
7,505,093 6,413,937
Total Long-term Liabilities
9,229,805 7,245,436
Total Liabilities
23,546,562 15,792,064
Commitments and Contingencies (See Note 11)
SHAREHOLDERS' (DEFICIT) EQUITY:
Preferred stock, par value $0.00 1; authorized 10,000,000 shares:
Series B convertible preferred stock, par value $0.00 1 per share; 1,700,000 shares designated; No shares issued and outstanding at September 30, 2023 and December 31, 2022 (Liquidation value $0)
- - Series D convertible preferred stock, par value $0.00 1 per share; 1,250,000 shares designated; no shares issued and outstanding at September 30, 2023 and December 31, 2022 ($6.00 per share liquidation value)
- - Series E convertible preferred stock, par value $0.00 1 per share; 562,250 shares designated; 21,418 shares issued and outstanding at September 30, 2023 and December 31, 2022 ($13.34 per share liquidation value)
21 21 Series G convertible preferred stock, par value $0.00 1 per share; 1,000,000 shares designated; 475,500 and 575,000 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively ($10.00 per share liquidation value)
476 575 Series H convertible preferred stock, par value $0.00 1 per share; 35,000 shares designated; 32,374 shares issued and outstanding at September 30, 2023 and December 31, 2022 (No per share liquidation value)
32 32 Series I preferred stock, par value $0.00 1 per share; 1 share designated; 1 and no share issued and outstanding at September 30, 2023 and December 31, 2022 (No per share liquidation value)
- - Common stock, par value $0.00 1 per share; 10,000,000,000 shares authorized; 4,481,102,346 and 3,636,691,682 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively
4,481,102 3,636,692 Additional paid-in capital
129,775,399 129,372,841 Accumulated deficit
(134,775,847 ) (127,510,099 )
Total Shareholders' (Deficit) Equity
(518,817 ) 5,500,062
Total Liabilities and Shareholders' (Deficit) Equity
$ 23,027,745 $ 21,292,126
TRANSPORTATION AND LOGISTICS SYSTEMS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
2023 2022 2023 2022
REVENUES
$ 4,947,684 $ 1,700,854 $ 15,604,451 $ 4,364,747
OPERATING EXPENSES:
Cost of revenues - third parties (exclusive of depreciation and amortization shown separately below)
3,361,812 1,236,630 9,506,063 3,221,182 Cost of revenues - related parties
407,744 - 1,649,120 - Compensation and related benefits
1,247,795 720,339 3,825,384 2,770,092 Legal and professional fees
370,105 259,597 1,349,469 948,094 Rent
1,132,618 217,717 3,308,317 430,011 Depreciation and amortization
407,310 155,050 1,182,810 532,550 General and administrative expenses
347,520 127,800 872,915 284,410
Total Operating Expenses
7,274,904 2,717,133 21,694,078 8,186,339
LOSS FROM OPERATIONS
(2,327,220 ) (1,016,279 ) (6,089,627 ) (3,821,592 )
OTHER INCOME (EXPENSES):
Interest income
- - 992 - Interest expense
(205,599 ) (14,635 ) (352,415 ) (24,397 ) Interest expense - related parties
(135,076 ) - (341,424 ) - (Loss) gain on sale of subsidiary's assets
- (2,714 ) (720 ) 293,975 Settlement income (expense)
(100 ) (10,150 ) (9,508 ) (237,961 )
Total Other Income (Expenses)
(340,775 ) (27,499 ) (703,075 ) 31,617
LOSS BEFORE INCOME TAXES
(2,667,995 ) (1,043,778 ) (6,792,702 ) (3,789,975 )
Provision for income taxes
- - - -
NET LOSS
(2,667,995 ) (1,043,778 ) (6,792,702 ) (3,789,975 )
Deemed and accrued dividends
(62,660 ) (101,386 ) (473,046 ) (317,271 )
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS
$ (2,730,655 ) $ (1,145,164 ) $ (7,265,748 ) $ (4,107,246 )
NET LOSS PER COMMON SHARE - BASIC AND DILUTED
Basic and diluted
$ (0.00 ) $ (0.00 ) $ (0.00 ) $ (0.00 )
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic and diluted
4,280,650,279 3,438,148,807 3,896,472,586 3,266,732,522
TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
For the Nine Months Ended
September 30,
2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss
$ (6,792,702 ) $ (3,789,975 ) Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense
1,182,810 532,550 Stock-based compensation
349,314 1,221,077 Stock-based professional fees
- 10,000 Gain from sale of subsidiary's assets
- (296,689 ) Non-cash portion of gain on settlement
- (700 ) Lease costs
242,569 4,591 Bad debt expense
81,872 - Change in operating assets and liabilities:
Accounts receivable
777,042 1,173 Prepaid expenses and other current assets
(123,459 ) (193,392 ) Security deposits
(89,171 ) (3,552 ) Accounts payable and accrued expenses
2,005,406 (295,981 ) Insurance payable
281,293 61,735 Accrued compensation and related benefits
(42,780 ) (90,514 )
NET CASH USED IN OPERATING ACTIVITIES
(2,127,806 ) (2,839,677 )
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment
(679,879 ) (118,617 ) Proceeds from repayment of note receivable
255,000 - Cash proceeds from sale of subsidiary's assets
- 748,500 Cash acquired in acquisitions
207,471 138,336 Cash used for acquisitions
(713,586 ) (1,930,712 )
NET CASH USED IN INVESTING ACTIVITIES
(930,994 ) (1,162,493 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of liquidated damages on Series E preferred shares
- (24,000 ) Net proceeds from sale of series G preferred share units
- 855,000 Proceeds from exercise of warrants
619,111 245,714 Proceeds from notes payable - related parties
600,000 - Proceeds from notes payable
662,092 108,395 Repayment of notes payable
(194,574 ) (809,905 )
NET CASH PROVIDED BY FINANCING ACTIVITIES
1,686,629 375,204
NET DECREASE IN CASH
(1,372,171 ) (3,626,966 )
CASH, beginning of period
1,470,807 6,067,692
CASH, end of period
$ 98,636 $ 2,440,726
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for:
Interest
$ 248,739 $ 24,397 Income taxes
$ - $ -
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Conversion of Series E preferred stock to common stock
$ - $ 31 Conversion of Series G preferred stock and accrued dividends to common stock
$ 74,967 $ 39,917 Accrual of preferred stock dividends
$ 473,046 $ 317,271 Issuance of common stock for future services
$ - $ 5,000 Increase in right of use assets and lease liabilities
$ 3,958,260 $ -
ACQUISITIONS:
Assets acquired:
Accounts receivable
$ 836,886 $ 2,270,890 Prepaid expenses
18,455 271,305 Property and equipment
1,186,198 1,466,167 Right of use assets
457,239 8,825,892 Security deposits
7,000 318,302 Intangible assets
430,151 5,779,487 Total assets acquired
2,935,929 18,932,043 Less: liabilities assumed:
Accounts payable
211,303 355,185 Accrued expenses
12,702 190,798 Insurance payable
- 169,812 Accrued compensation and related benefits
152,631 69,122 Notes payable
1,595,939 6,355,588 Lease liabilities
457,239 8,825,892 Total liabilities assumed
2,429,814 15,966,397 Net assets acquired
$ 506,115 $ - Fair value of shares for acquisitions
$ - $ 2,965,646
SOURCE: Transportation & Logistics Systems
https://www.accesswire.com/803517/tlss-announces-financial-results-for-the-three-and-nine-months-ended-september-30-2023
What is the financial performance of TLSS for the three months ended September 30, 2023?
TLSS reported a revenue increase of 190.9% to $4,948,000, but also had a loss from operations of $2,327,000 and a net loss of $2,668,000.
What is the financial performance of TLSS for the nine months ended September 30, 2023?
TLSS reported a revenue increase of 257.5% to $15,604,000, with a loss from operations of $6,090,000 and a net loss of $6,793,000.
What corrective measures is TLSS taking to address operating losses?
TLSS is exploring financing options and re-evaluating operations for areas of revenue enhancement and cost reduction to get operations on a path to profitability.
What are the challenges TLSS is facing?
TLSS experienced lower than expected revenues and higher than expected losses in Q2 and Q3, leading to a significant strain on working capital.
What are TLSS's plans for acquisitions and growth opportunities?
TLSS continues to assess growth opportunities as the M&A pipeline remains strong, despite several opportunities not materializing.
