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Wednesday, June 29, 2022

The Gloves Come Off on Transportation and Logistics Systems Inc (OTCMKTS: TLSS)

Transportation and Logistics Systems Inc (OTCMKTS: TLSS) continues to be among the most actively traded stocks in small caps. Trading just over the $0.05 mark the stock saw a significant rise to highs over $0.25 last month but has come back to current levels since.

Microcapdaily reportee on TLSS back in May just as the sock was taking off on its run to $0.25 + stating at the time – TLSS is on many traders top watch lists as the Company reports impressive revenue numbers, the Company’s expansion into new markets in Florida, Georgia, Ohio and Tennessee during the Fall of 2019 as well as greater demand for the Company’s services due to the increase in online ordering as a result of the COVID-19 pandemic.

Transportation and Logistics Systems Inc (OTCMKTS: TLSS) operates as a leading logistics and transportation company specializing in eCommerce fulfillment, last mile, two-person home delivery and line haul services for the world’s leading online retailers through its wholly-owned operating subsidiaries, PrimeEFS, LLC and ShypDirect, LLC. Prime EFS is a leading logistics and transportation company that specializes in providing Last Mile, two-person Home Delivery and Line Haul services for some of the world’s leading online retailers. ShypDirect operates a fleet of GPS equipped Tractors, Box Trucks and Cargo Van offering delivery services for clients throughout the northeast United States. Both Prime EFS and ShypDirect are providers of logistics services for Amazon.com, FedEx and UPS, including “last-mile” deliveries to residential and business locations as well as deliveries between Amazon sort centers and deliveries from Amazon sort centers to post offices.

On June 1 TLSS announced financial results for the Year Ended December 31, 2019: Revenue for the year ended December 31, 2019 increased $17,736,000, or 130%, to $31,356,000, as compared to $13,620,000, for the period from June 18, 2018 (acquisition date) to December 31, in 2018. The Company’s loss from continuing operations for the year ended December 31, 2019 was $44,183,000, due primarily from the $20,291,000 operating loss, interest expense of $6,540,000, loan fees of $601,000, and a non-cash charge for derivative expense of $55,841,000, which was partially offset by a gain on debt extinguishment of $39,090,000. This compared to a loss from continuing operations of $14,579,000 for the same period in 2018.

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John Mercadante, Chairman and CEO of TLSS, commented, “While the Company more than doubled its revenue in 2019, it incurred substantial debt and expense to fund its aggressive organic growth initiatives, resulting in an operating loss of $20,291,000 as compared to an operating loss of $7,069,000 for the same period in 2018. Since year-end, the Company has taken substantive measures to improve its balance sheet and cost structure, which management believes, will improve its financial performance in 2020.”

On June 9 TLSS announced it has come to terms on a material accrued liability with two related creditors of Prime EFS, LLC one of the Company’s wholly-owned subsidiaries, to convert past due and outstanding balances of $2,038,556 to a long-term unsecured note. Pursuant to the Settlement Agreement, Prime EFS made a payment of $75,000 to the Creditors on June 5, 2020 and must make a second payment of $75,000 to the Creditors on or before June 12, 2020. Thereafter, beginning on June 19, 2020, Prime EFS will make weekly payments of $15,000 to the Creditors each Friday for 125 weeks ending with a final payment of $13,556 on November 18, 2022 at which time the Outstanding Balance will be paid in full. Prime EFS is permitted to prepay the Outstanding Balance at any time without penalty.

Sebastian Giordano, CEO of Ascentaur LLC, which the Company engaged in February 2020 as its restructuring consultant, and who negotiated the payment arrangement, stated, “As the Company continues to make progress with its restructuring plan, this agreement provides the Company with the opportunity to satisfy this obligation without interest, over what it believes is a manageable payment structure stretched out for just under two and one-half (2½) years from June 2020 through November 2022.”

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Currently trading at a $21 million market valuation TLSS does carry $10 million in current liabilities and dilution has been one of the primary challenges here. TLSS is doing immense sales reporting Revenue for the year ended December 31, 2019 increased $17,736,000, or 130%, to $31,356,000, as compared to $13,620,000, for the period from June 18, 2018 (acquisition date) to December 31, in 2018.  TLSS is an exciting story in small caps; the Company reports impressive recenue numbers, the Company’s expansion into new markets in Florida, Georgia, Ohio and Tennessee during the Fall of 2019 as well as greater demand for the Company’s services due to the increase in online ordering as a result of the COVID-19 pandemic. TLSS has attracted legions of shareholders and is currently among the top 5 most traded stocks on the exchange as continues to move higher. We will be updating on TLSS when more details emerge so make sure you are subscribed to Microcapdaily so you know what’s going on with TLSS.

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Disclosure: we hold no position in TLSS either long or short and we have not been compensated for this article.

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