Quarter-Over-Quarter Revenues Increase 41% as Gross Profit Margin Percentage Improves Nearly 1,500%
JUPITER, FL / ACCESSWIRE / November 14, 2022 / Transportation and Logistics Systems, Inc. (OTC PINK:TLSS), ("TLSS", or the "Company"), a growing logistics service provider, announced that today, November 14, 2022, the Company had timely filed its Quarterly Report on Form 10-Q, for the three and nine months ended September 30, 2022.
Mr. Sebastian Giordano, Chairman and Chief Executive Officer of TLSS, stated, "While this 10-Q obviously does not yet reflect the full impact of the Company's recent acquisitions of JFK Cartage and Freight Connections, since they were both acquired in the latter part of the quarter, the Company continues to make substantive progress, both financially and in our growth preparedness. Fiscally, with a 41% increase in quarter-over-quarter revenue, the results for the third quarter clearly demonstrated that our operations are headed in the right direction, especially as gross profit margins for the same comparable three months, increased 1,490%, from 2.4% in 2021 to 27.3% in 2022. With current annualized projected run-rate revenues of approximately $16 million from our existing operations, I believe that this improving trend in gross profit margin bodes well for getting us to one of our most important objectives this year and as we head into 2023, profitability at the operating subsidiary level, which excludes corporate overhead and public costs, in Q4 2022. Furthermore, it was imperative to have our senior management team on board, well in advance of upcoming acquisition and organic growth initiatives, to not only ensure the smooth integration of Cougar, JFK and FC, but to put into place uniform operating systems, policies and procedures. We've been evaluating personnel, customers, revenue mix, integration efficiencies and cost-savings opportunities, while simultaneously assessing our best strategic options to expand upon our current business to optimize our existing infrastructure. I remain highly confident that the next month-and-a-half will get us closer to achieving the goals we set out to accomplish at the beginning of 2022."
Financial Results for the Three Months Ended September 30, 2022
Revenue for the three months ended September 30, 2022, increased $494,000, or 40.9%, to $1,700,000 as compared to $1,207,000 for same prior year period. Such increase was due primarily to the acquisitions of JFK Cartage and Freight Connections in August and September 2022, respectively.
The Company had a loss from operations of $1,016,000 for the three months ended September 30, 2022, as compared to a loss from operations of $1,896,000 for the same prior year period.
The Company had a net loss of $1,044,000 for the three months ended September 30, 2022, due to: (i) the loss from operations of $1,016,000; (ii) interest expense of $15,000; (iii) settlement expense of $10,000; and (iv) a loss of the sale of subsidiary of $3,000. This compared to net income $6,255,000 for the same prior year period due primarily from a $12,427,000 gain on the deconsolidation of subsidiaries which was partially offset by a loss from operations of $5,251,000.
The Company had net loss attributable to TLSS common shareholders of $1,145,000 for the three months ended September 30, 2022 due to: (i) the net loss of $1,044,000 and (ii) deemed dividends related to beneficial conversion features and accrued dividends of $101,000, as compared to net income attributable to TLSS common shareholders of $6,234,000 for the same prior year period.
Financial Results for the Nine Months Ended September 30, 2022
Revenue for the nine months ended September 30, 2022, increased $91,000, or 2.1%, to $4,365,000 as compared to $4,273,000 for same prior year period due primarily to the acquisitions of JFK Cartage and Freight Connections in August and September, respectively.
The Company had a loss from operations of $3,822,000 for the nine months ended September 30, 2022, as compared to a loss from operations of $5,251,000 for the same prior year period.
The Company had a net loss of $3,790,000 for the nine months ended September 30, 2022, due primarily to: (i) the loss from operations of $3,822,000; (ii) settlement expense of $238,000; and (iii) interest expense of $24,000, which were partially offset by a gain from the sale of subsidiary of $294,000. This compared to net income of $7,669,000 for the same prior year period due primarily from (i) a $12,427,000 gain on deconsolidation of subsidiaries which was partially offset by a loss from operations of $5,251,000.
The Company had net loss attributable to TLSS common shareholders of $4,107,000 for the nine months ended September 30, 2022 due to: (i) the net loss of $3,790,000 and (ii) deemed dividends related to beneficial conversion features and accrued dividends of $317,000, as compared to net income attributable to TLSS common shareholders of $6,661,000 for the same prior year period.
About Transportation and Logistics Systems, Inc.
TLSS, through its wholly-owned operating subsidiaries, Cougar Express, Inc., Freight Connections, Inc. and JFK Cartage, 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
| September 30 | December 31, | |||||||
| 2022 | 2021 | |||||||
| (Unaudited) | ||||||||
ASSETS |
||||||||
CURRENT ASSETS: |
||||||||
Cash |
$ | 2,440,726 | $ | 6,067,692 | ||||
Accounts receivable, net |
2,751,451 | 481,734 | ||||||
Prepaid expenses and other current assets |
662,033 | 197,336 | ||||||
Total Current Assets |
5,854,210 | 6,746,762 | ||||||
OTHER ASSETS: |
||||||||
Security deposit |
355,194 | 33,340 | ||||||
Property and equipment, net |
1,781,180 | 577,205 | ||||||
Right of use assets, net |
8,741,980 | - | ||||||
Goodwill |
7,421,863 | - | ||||||
Intangible assets, net |
1,723,830 | 2,177,382 | ||||||
Total Other Assets |
20,024,047 | 2,787,927 | ||||||
TOTAL ASSETS |
$ | 25,878,257 | $ | 9,534,689 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY |
||||||||
CURRENT LIABILITIES: |
||||||||
Notes payable, current portion |
$ | 516,836 | $ | 283,141 | ||||
Accounts payable |
546,980 | 312,772 | ||||||
Accrued expenses |
506,723 | 212,975 | ||||||
Insurance payable |
329,802 | 98,255 | ||||||
Lease liabilities, current portion |
2,000,393 | - | ||||||
Accrued compensation and related benefits |
77,572 | 98,964 | ||||||
Total Current Liabilities |
3,978,306 | 1,006,107 | ||||||
LONG-TERM LIABILITIES: |
||||||||
Notes payable, net of current portion |
5,432,838 | 12,455 | ||||||
Lease liabilities, net of current portion |
6,746,178 | - | ||||||
Total Long-term Liabilities |
12,179,016 | 12,455 | ||||||
Total Liabilities |
16,157,322 | 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; 0 and 700,000 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively (Liquidation value $700 and $700, respectively) |
- | 700 | ||||||
Series D preferred stock, par value $0.001 per share; 1,250,000 shares designated; no shares issued and outstanding at September 30, 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; 21,418 and 51,605 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively ($13.34 per share liquidation value) |
21 | 52 | ||||||
Series G preferred stock, par value $0.001 per share; 1,000,000 shares designated; 575,000 and 615,000 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively ($10.00 per share liquidation value) |
575 | 615 | ||||||
Series H preferred stock, par value $0.001 per share; 35,000 shares designated; 32,374 and 0 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively (No per share liquidation value) |
32 | - | ||||||
Common stock, par value $0.001 per share; 10,000,000,000 shares authorized; 3,636,691,682 and 2,926,528,666 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively |
3,636,692 | 2,926,529 | ||||||
Additional paid-in capital |
129,207,348 | 124,604,718 | ||||||
Accumulated deficit |
(123,123,733 | ) | (119,016,487 | ) | ||||
Total Shareholders' Equity |
9,720,935 | 8,516,127 | ||||||
Total Liabilities and Shareholders' Equity |
$ | 25,878,257 | $ | 9,534,689 | ||||
TRANSPORTATION AND LOGISTICS SYSTEMS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
REVENUES |
$ | 1,700,854 | $ | 1,207,305 | $ | 4,364,747 | $ | 4,273,498 | ||||||||
COST OF REVENUES |
1,236,630 | 1,178,113 | 3,221,182 | 4,422,429 | ||||||||||||
GROSS PROFIT (LOSS) |
464,224 | 29,192 | 1,143,565 | (148,931 | ) | |||||||||||
OPERATING EXPENSES: |
||||||||||||||||
Compensation and related benefits |
720,339 | 351,908 | 2,770,092 | 1,064,570 | ||||||||||||
Legal and professional fees |
259,597 | 487,473 | 948,094 | 1,470,926 | ||||||||||||
Rent |
217,717 | 154,132 | 430,011 | 521,688 | ||||||||||||
General and administrative expenses |
282,850 | 323,658 | 816,960 | 821,593 | ||||||||||||
Loss on lease abandonment |
- | 607,554 | - | 1,223,628 | ||||||||||||
Total Operating Expenses |
1,480,503 | 1,924,725 | 4,965,157 | 5,102,405 | ||||||||||||
LOSS FROM OPERATIONS |
(1,016,279 | ) | (1,895,533 | ) | (3,821,592 | ) | (5,251,336 | ) | ||||||||
OTHER INCOME (EXPENSES): |
||||||||||||||||
Interest expense |
(14,635 | ) | (71,939 | ) | (24,397 | ) | (290,898 | ) | ||||||||
Interest expense - related parties |
- | (22,685 | ) | - | (67,315 | ) | ||||||||||
Warrant exercise inducement expense |
- | (4,193,134 | ) | (4,193,134 | ) | |||||||||||
Gain on debt extinguishment, net |
- | - | - | 1,564,941 | ||||||||||||
Gain on sale of subsidiary |
(2,714 | ) | - | 293,975 | - | |||||||||||
Gain on deconsolidation of subsidiaries |
- | 12,427,220 | - | 12,427,220 | ||||||||||||
Settlement income (expense) |
(10,150 | ) | - | (237,961 | ) | - | ||||||||||
Other income |
- | 11,001 | - | 194,823 | ||||||||||||
Derivative income |
- | - | - | 3,284,306 | ||||||||||||
Total Other Income (Expenses) |
(27,499 | ) | 8,150,463 | 31,617 | 12,919,943 | |||||||||||
(LOSS) INCOME BEFORE INCOME TAXES |
(1,043,778 | ) | 6,254,930 | (3,789,975 | ) | 7,668,607 | ||||||||||
Provision for income taxes |
- | - | - | - | ||||||||||||
NET (LOSS) INCOME |
(1,043,778 | ) | 6,254,930 | (3,789,975 | ) | 7,668,607 | ||||||||||
Deemed dividends related to beneficial conversion features, and accrued dividends |
(101,386 | ) | (21,386 | ) | (317,271 | ) | (1,007,319 | ) | ||||||||
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS |
$ | (1,145,164 | ) | $ | 6,233,544 | $ | (4,107,246 | ) | $ | 6,661,288 | ||||||
NET (LOSS) INCOME PER COMMON SHARE - BASIC AND DILUTED |
||||||||||||||||
Basic |
$ | (0.00 | ) | $ | 0.00 | $ | (0.00 | ) | $ | 0.00 | ||||||
Diluted |
$ | (0.00 | ) | $ | 0.00 | $ | (0.00 | ) | $ | 0.00 | ||||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: |
||||||||||||||||
Basic |
3,438,148,807 | 2,600,758,966 | 3,266,732,522 | 2,160,897,037 | ||||||||||||
Diluted |
3,438,148,807 | 2,899,703,458 | 3,266,732,522 | 2,506,656,853 | ||||||||||||
TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| For the Nine Months Ended | ||||||||
| September 30, | ||||||||
| 2022 | 2021 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
||||||||
Net (loss) income |
$ | (3,789,975 | ) | $ | 7,668,607 | |||
Adjustments to reconcile net (loss) income to net cash used in operating activities: |
||||||||
Depreciation and amortization expense |
532,550 | 498,876 | ||||||
Amortization of debt discount to interest expense |
- | 83,548 | ||||||
Stock-based compensation |
1,221,077 | - | ||||||
Stock-based professional fees |
10,000 | - | ||||||
Non-cash gain from sale of subsidiary |
(296,689 | ) | - | |||||
Non-cash gain from deconsolidation of subsidiaries |
- | (12,448,899 | ) | |||||
Derivative income, net |
- | (3,284,306 | ) | |||||
Non-cash portion of gain on extinguishment of debt, net |
- | (1,564,941 | ) | |||||
Non-cash portion of gain on settlement |
(700 | ) | - | |||||
Loss on lease abandonment |
- | 1,223,628 | ||||||
Warrant exercise inducement expense |
- | 4,193,134 | ||||||
Rent expense |
4,591 | 1,680 | ||||||
Bad debt recovery |
- | (11,240 | ) | |||||
Other non cash gain |
- | (11,806 | ) | |||||
Change in operating assets and liabilities: |
||||||||
Accounts receivable |
1,173 | 173,941 | ||||||
Prepaid expenses and other current assets |
(193,392 | ) | 159,142 | |||||
Security deposit |
(3,552 | ) | 94,000 | |||||
Accounts payable and accrued expenses |
(295,981 | ) | 500,908 | |||||
Insurance payable |
61,735 | (123,445 | ) | |||||
Accrued compensation and related benefits |
(90,514 | ) | (16,310 | ) | ||||
NET CASH USED IN OPERATING ACTIVITIES |
(2,839,677 | ) | (2,863,483 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: |
||||||||
Purchase of property and equipment |
(118,617 | ) | - | |||||
Proceeds from sale of property and equipment |
- | 3,451 | ||||||
Cash acquired in acquisitions |
138,336 | 10,031 | ||||||
Cash used for acquisitions |
(1,930,712 | ) | (2,133,146 | ) | ||||
Cash proceeds from sale of subsidiary |
748,500 | - | ||||||
NET CASH USED IN INVESTING ACTIVITIES |
(1,162,493 | ) | (2,119,664 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: |
||||||||
Net proceeds from sale of series E preferred share units |
- | 3,590,500 | ||||||
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 |
245,714 | 3,940,669 | ||||||
Proceeds from notes payable |
108,395 | - | ||||||
Repayment of notes payable |
(809,905 | ) | (496,291 | ) | ||||
Net proceeds (payments) of related party advances |
- | 37,315 | ||||||
NET CASH PROVIDED BY FINANCING ACTIVITIES |
375,204 | 7,072,193 | ||||||
NET (DECREASE) INCREASE IN CASH |
(3,626,966 | ) | 2,089,046 | |||||
CASH, beginning of period |
6,067,692 | 579,283 | ||||||
CASH, end of period |
$ | 2,440,726 | $ | 2,668,329 | ||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION |
||||||||
Cash paid for: |
||||||||
Interest |
$ | 24,397 | $ | 288,533 | ||||
Income taxes |
$ | - | $ | - | ||||
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: |
||||||||
Conversion of debt and accrued interest for common stock |
$ | - | $ | 543,457 | ||||
Reclassification of due to related parties to accrued expenses |
$ | - | $ | 94,000 | ||||
Deemed dividend related to price protection and beneficial conversion features |
$ | - | $ | 882,043 | ||||
Conversion of Series E preferred stock to common stock |
$ | 31 | $ | - | ||||
Conversion of Series G preferred stock and accrued dividends to common stock |
$ | 39,317 | $ | - | ||||
Accrual of preferred stock dividends |
$ | 317,271 | $ | - | ||||
Issuance of common stock for future services |
$ | 5,000 | $ | - | ||||
ACQUISITIONS: |
||||||||
Assets acquired: |
||||||||
Accounts receivable |
$ | 2,270,890 | $ | 265,175 | ||||
Prepaid expenses |
271,305 | 7,534 | ||||||
Property and equipment |
1,466,167 | 257,416 | ||||||
Right of use assets |
8,825,892 | 44,388 | ||||||
Other receivable |
- | 622,240 | ||||||
Security deposits |
318,302 | 33,340 | ||||||
Total assets acquired |
13,152,556 | 1,230,093 | ||||||
Less: liabilities assumed: |
||||||||
Accounts payable |
355,185 | 132,155 | ||||||
Accrued expenses |
190,798 | 86,194 | ||||||
Insurance payable |
169,812 | - | ||||||
Accrued compensation and related benefits |
69,122 | - | ||||||
Notes payable |
6,355,588 | 1,491,458 | ||||||
Lease liabilities |
8,825,892 | 44,388 | ||||||
Total liabilities assumed |
15,966,397 | 1,754,195 | ||||||
Fair value of shares for acquisitions |
2,965,646 | |||||||
Increase in intangible assets - non-cash |
$ | 5,779,487 | $ | 524,102 | ||||
See accompanying notes to unaudited condensed consolidated financial statements.
SOURCE: Transportation & Logistics Systems
View source version on accesswire.com:
https://www.accesswire.com/725579/TLSSAnnounces-Financial-Results-for-the-Three-and-Nine-Months-Ended-September-30-2022
