Transportation and Logistics Systems, Inc. Announces Financial Results for the Three and Nine Months Ended September 30, 2020
Year-Over-Year Operating Losses Significantly Reduced Through Successful Restructuring Plan
JUPITER, FL / ACCESSWIRE / November 17, 2020 / Transportation and Logistics Systems, Inc. (OTC:PINK:TLSS), ("TLSS" or the "Company"), an eCommerce fulfillment service provider, today announced that on November 16, 2020, the Company had timely filed its Quarterly Report on Form 10-Q, for the three and nine months ended September 30, 2020.
John Mercadante, Chairman and CEO of TLSS, commented, "After having achieved operating subsidiary profitability for the first time in the second quarter, the negative impact of the sudden and unexpected cancellation of our Amazon Delivery Service Provider ("Amazon DSP") business began to materialize during the third quarter prior to its actual termination. Even with that, year-over-year operating losses were 64% and 73% lower for the three months and nine months, respectively, due in large part to our successful restructuring efforts. Our goal remains the same, to identify opportunities to profitably grow our business through strategic acquisitions and organic growth, which we believe, would have a positive impact on shareholder value."
Financial Results for the Three Months Ended September 30, 2020
Revenue for the three months ended September 30, 2020 decreased $1,449,000, or 18.68%, to $6,310,000 as compared to $7,759,000 for same prior year period. Such decrease was due primarily to the reduction in the Company's Amazon DSP business amidst its notification in July 2020 of the termination of such Amazon DSP agreement as of September 30, 2020.
The Company had a loss from operations of $1,172,000 for the three months ended September 30, 2020, which is composed of losses from: (i) its operating subsidiaries of $553,000 and (ii) the parent company of $619,000, as compared to a loss from operations of $3,290,000 for the same prior year period.
The Company had net income of $35,602,000 for the three months ended September 30, 2020 due to: (i) non-cash derivative gain of $37,826,000; (ii) gain from extinguishment of debt of $907,000 and (iii) other income of $92,000, which were partially offset by: (i) the loss from operations of $1,172,000 and (ii) interest expense of $2,051,000. This compared to a net loss of $11,361,000 for the same prior year period. The Company had net income attributable to TLSS common shareholders of $35,602,000 for the three months ended September 30, 2020 as compared to a net loss attributable to TLSS common shareholders of $12,342,000 for the same prior year period.
Financial Results for the Nine Months Ended September 30, 2020
Revenue for the nine months ended September 30, 2020 increased $1,839,000, or 8.49%, to $23,503,000 as compared to $21,664,000 for same prior year period due primarily to: (i) the Company's expansion into new markets in Florida, Georgia, Ohio and Tennessee that were not operational during the first and second quarters of 2019; (ii) securing new business; (iii) a full nine months of operations in its box-truck line of business that commenced in February 2019; and (iv) securing Payroll Protection Program loans which provided the funds needed to enable the Company to maintain its level of employed drivers to meet the increased delivery demand of its primary customer during the height of the COVID-19 pandemic; but which was partially offset by the reduction in Amazon DSP business during the third quarter, as discussed above.
The Company had a loss from operations of $3,920,000 for the nine months ended September 30, 2020, which is composed of losses from: (i) its operating subsidiaries of $441,000 and (ii) the parent company of $3,479,000, of which $2,000,000 is attributable to non-cash stock-based compensation and consulting fees as compared to a loss from operations of $14,751,000 for the same prior year period.
The Company had a net loss of $35,506,000 for the nine months ended September 30, 2020 due to: (i) the loss from operations of $3,920,000; (ii) interest expense of $7,168,000; and (iii) non-cash derivative expense of $31,836,000, which were partially offset by: (i) a gain from extinguishment of debt of $7,151,000 and (ii) other income of $267,000. This compared to a net loss of $37,970,000 for the same prior year period, which included a loss from discontinued operations of $681,000. The Company had a net loss attributable to TLSS common shareholders of $54,202,000 for the nine months ended September 30, 2020 as compared to a net loss attributable to TLSS common shareholders of $38,952,000 for the same prior year period.
About Transportation and Logistics Systems, Inc.
TLSS, through its wholly-owned operating subsidiary, Shypdirect, LLC, 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 predominantly online retailers.
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, which 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 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, which 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 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:
Phone: 833.764.1443
Email: info@tlss-inc.com
TRANSPORTATION AND LOGISTICS SYSTEMS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, | December 31, | |||||||
2020 | 2019 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash | $ | 318,356 | $ | 50,026 | ||||
Accounts receivable, net | 335,393 | 963,771 | ||||||
Prepaid expenses and other current assets | 1,462,736 | 1,246,555 | ||||||
Total Current Assets | 2,116,485 | 2,260,352 | ||||||
OTHER ASSETS: | ||||||||
Security deposit | 206,250 | 76,500 | ||||||
Property and equipment, net | 658,815 | 240,406 | ||||||
Right of use assets, net | 1,534,411 | 1,750,430 | ||||||
Total Other Assets | 2,399,476 | 2,067,336 | ||||||
TOTAL ASSETS | $ | 4,515,961 | $ | 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 $346,953 and $2,210,950, respectively | $ | 1,338,961 | $ | 3,634,344 | ||||
Notes payable, current portion, net of debt discount of $0 and $762,112, respectively | 4,079,592 | 2,425,003 | ||||||
Note payable - related party | 500,000 | 500,000 | ||||||
Accounts payable | 899,076 | 1,517,082 | ||||||
Accrued expenses | 524,921 | 627,990 | ||||||
Insurance payable | 2,697,300 | 2,948,261 | ||||||
Contingency liability | 440,000 | 440,000 | ||||||
Lease liabilities, current portion | 366,511 | 333,126 | ||||||
Derivative liability | 2,886,811 | 2,135,939 | ||||||
Due to related parties | 245,007 | 325,445 | ||||||
Accrued compensation and related benefits | 1,113,079 | 886,664 | ||||||
Total Current Liabilities | 15,091,258 | 15,773,854 | ||||||
LONG-TERM LIABILITIES: | ||||||||
Notes payable, net of current portion | 493,307 | - | ||||||
Lease liabilities, net of current portion | 1,203,765 | 1,440,258 | ||||||
Total Long-term Liabilities | 1,697,072 | 1,440,258 | ||||||
Total Liabilities | 16,788,330 | 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 September 30, 2020 and December 31, 2019, respectively (Liquidation value $700 and $1,700, respectively) | 700 | 1,700 | ||||||
Series C preferred stock, par value $0.001 per share; 1 share designated; No shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively | - | - | ||||||
Series D preferred stock, par value $0.001 per share; 1,250,000 shares designated; 124,376 and 0 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively ($6.00 per share liquidation value) | 124 | - | ||||||
Common stock, par value $0.001 per share; 4,000,000,000 shares authorized; 1,472,924,335 and 11,832,603 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively | 1,472,924 | 11,833 | ||||||
Common stock issuable, par value $0.001 per share; 0 and 25,000 shares | - | 25 | ||||||
Additional paid-in capital | 101,072,128 | 47,715,878 | ||||||
Accumulated deficit | (114,818,245 | ) | (60,615,860 | ) | ||||
Total Shareholders' Deficit | (12,272,369 | ) | (12,886,424 | ) | ||||
Total Liabilities and Shareholders' Deficit | $ | 4,515,961 | $ | 4,327,688 | ||||
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, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
REVENUES | $ | 6,309,509 | $ | 7,759,451 | $ | 23,503,384 | $ | 21,664,070 | ||||||||
COST OF REVENUES | 5,978,265 | 6,293,699 | 20,831,870 | 19,366,374 | ||||||||||||
GROSS PROFIT | 331,244 | 1,465,752 | 2,671,514 | 2,297,696 | ||||||||||||
OPERATING EXPENSES: | ||||||||||||||||
Compensation and related benefits | 551,306 | 3,433,741 | 1,955,854 | 11,150,955 | ||||||||||||
Legal and professional fees | 621,105 | 517,277 | 3,523,811 | 1,588,359 | ||||||||||||
Rent | 156,738 | 83,911 | 496,349 | 269,148 | ||||||||||||
General and administrative expenses | 173,680 | 720,481 | 615,331 | 2,316,016 | ||||||||||||
Impairment loss | - | - | - | 1,724,591 | ||||||||||||
Total Operating Expenses | 1,502,829 | 4,755,410 | 6,591,345 | 17,049,069 | ||||||||||||
LOSS FROM OPERATIONS | (1,171,585 | ) | (3,289,658 | ) | (3,919,831 | ) | (14,751,373 | ) | ||||||||
OTHER (EXPENSES) INCOME: | ||||||||||||||||
Interest expense | (2,028,958 | ) | (2,339,508 | ) | (7,016,597 | ) | (4,936,951 | ) | ||||||||
Interest expense - related parties | (22,686 | ) | (35,753 | ) | (152,262 | ) | (183,392 | ) | ||||||||
Loan fees | - | - | - | (601,121 | ) | |||||||||||
Gain (loss) on debt extinguishment, net | 907,447 | (4,714,751 | ) | 7,151,041 | 39,203,017 | |||||||||||
Other income | 91,950 | - | 266,918 | - | ||||||||||||
Derivative income (expense), net | 37,826,129 | (981,244 | ) | (31,835,642 | ) | (56,018,849 | ) | |||||||||
Total Other (Expenses) Income | 36,773,882 | (8,071,256 | ) | (31,586,542 | ) | (22,537,296 | ) | |||||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS | 35,602,297 | (11,360,914 | ) | (35,506,373 | ) | (37,288,669 | ) | |||||||||
LOSS FROM DISCONTINUED OPERATIONS: | ||||||||||||||||
Loss from discontinued operations | - | - | - | (681,426 | ) | |||||||||||
NET INCOME (LOSS) | 35,602,297 | (11,360,914 | ) | (35,506,373 | ) | (37,970,095 | ) | |||||||||
Deemed dividend related to ratchet adjustment | - | (981,548 | ) | (18,696,012 | ) | (981,548 | ) | |||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ | 35,602,297 | $ | (12,342,462 | ) | $ | (54,202,385 | ) | $ | (38,951,643 | ) | |||||
NET INCOME (LOSS) PER COMMON SHARE - BASIC | ||||||||||||||||
Net income (loss) from continuing operations | $ | 0.03 | $ | (1.10 | ) | $ | (0.11 | ) | $ | (4.34 | ) | |||||
Loss from discontinued operations | 0.00 | (0.00 | ) | (0.00 | ) | (0.08 | ) | |||||||||
Net income (loss) per common share - basic | $ | 0.03 | $ | (1.10 | ) | $ | (0.11 | ) | $ | (4.42 | ) | |||||
NET INCOME (LOSS) PER COMMON SHARE - DILUTED | ||||||||||||||||
Net income (loss) from continuing operations | $ | 0.00 | $ | (1.10 | ) | $ | (0.11 | ) | $ | (4.34 | ) | |||||
Loss from discontinued operations | 0.00 | (0.00 | ) | (0.00 | ) | (0.08 | ) | |||||||||
Net income (loss) per common share - diluted | $ | 0.00 | $ | (1.10 | ) | $ | (0.11 | ) | $ | (4.42 | ) | |||||
WEIGHTED AVERAGE COMMON SHARE OUTSTANDING: | ||||||||||||||||
Basic | 1,136,231,561 | 11,247,054 | 472,432,161 | 8,811,489 | ||||||||||||
Diluted | 2,506,145,678 | 11,247,054 | 472,432,161 | 8,811,489 | ||||||||||||
SOURCE: Transportation & Logistics Systems
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