UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): June 30, 2022
Transportation and Logistics Systems, Inc.
(Exact name of registrant as specified in its charter)
Nevada | 001-34970 | 26-3106763 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
5500 Military Trail, Suite 22-357
Jupiter, Florida 33458
(Address of Principal Executive Offices)
(833) 764-1443
(Issuer’s telephone number)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation to the registrant under any of the following provisions:
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act: None.
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Forward Looking Statements
Statements in this report regarding Transportation and Logistics Systems, Inc. (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 report 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 report. 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.
Item 8.01 Other Events.
Transportation and Logistics Systems, Inc. (OTCQB: TLSS), (“TLSS” or the “Company”), a logistics service provider, announced, on June 30, 2022, that its wholly-owned subsidiary, Cougar Express, Inc. (“Cougar Express”), entered into a stock purchase agreement, dated May 24, 2022 (“SPA”), to acquire all of outstanding stock of JFK Cartage, Inc., a New York-based full service logistics provider specializing in pickup, warehousing and delivery services in the tri-state area (“JFK Cartage”).
The SPA includes conditions precedent to the obligation of Cougar Express to consummate the acquisition, including, without limitation, obtaining landlord consents to the assignment of JFK Cartage’s sublease of its warehouse operating facilities. As of June 30, 2022, the sublandlord’s consent has been obtained. JFK Cartage is still seeking the overlandlord’s consent, but expects to receive it, and the Company reasonably expects the acquisition will be consummated.
Located in Inwood, JFK Cartage operates from a 30,000 square foot warehouse with ten (10) drive-in doors and is strategically located approximately six (6) miles from JFK International Airport. JFK Cartage has been in business since 2008 and has built an excellent reputation by providing warehousing, cross-dock services, pickup and deliveries, and general trucking, handling airfreight, trade show freight, expedited and hotshot demand work, LTL/cartage as well as FTL, reverse logistics, white glove and residential delivery services to a broad base of over 95 commercial accounts and residential customers. JFK Cartage operates a wide-ranging fleet of specialty vehicles, from its Sprinter vans to full 53-ft. tractor trailers. JFK Cartage, with its assets, fleet and warehouse, is believed to be one of the largest leading cartage agents serving the New York Tri-State area.
The SPA provides for a purchase price equal to approximately $1,700,000, subject to adjustment for debt assumed by Cougar Express or retained by JFK Cartage. The price will be payable: (i) $500,000 in cash; (ii) $700,000 by secured, promissory note of JFK Cartage, which note shall be payable, subject to purchase price adjustment: (a) $233,333.33 365 days after the Closing Date, plus interest at five (5%) percent per annum; (b) $233,333.33 730 days after the Closing Date, plus interest at five (5%) percent per annum; and (c) $233,333.34 1,095 days after the Closing Date, plus interest at five (5%) percent per annum; and (iii) $500,000 by assumption of an SBA Loan.
The transaction is scheduled to close the end of July 2022, subject to the completion of satisfactory due diligence by TLSS in TLSS’s sole discretion giving TLSS in effect an option (including an opportunity to confirm the accuracy of all of JFK Cartage’s representations and warranties in the SPA), no material adverse change in JFK Cartage’s business, consents to the assignment of JFK Cartage’s principal lease, and also subject to the approval of the assumption of JFK Cartage’s SBA loan.
The Company’s primary strategy has been to become a leader in the transportation industry in providing a full range of on-time, high-quality pick-up, transportation and delivery services. The Company expects to accomplish this goal, in part, by pursuing strategic acquisitions as a means of adding new markets in the United States, expanding its transportation and logistics service offerings, adding talented management and operational employees, expanding and upgrading its technology platform and developing operational best practices.
The Company believes that the acquisition of JFK Cartage is an excellent fit with its current business given its demographic location, services offered, and diversified customer base. Moreover, it would provide the Company with a long-standing, well-run profitable operation in a larger, more functional warehouse location that should generate enhanced revenues, operating efficiencies and cost savings. Furthermore, the Company believes that, because JFK Cartage is strategically based near JFK International Airport and serves the tri-state area, organic growth opportunities will be available for expanding its footprint into the Company’s primary base of operations near New York’s JFK Airport, as well as efficiencies that could be derived by leveraging the Company’s existing Cougar Express subsidiary’s operational capabilities.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. | Description | |
99.1+ | Stock Purchase and Sale Agreement, dated as of May 24, 2022, between Cougar Express, Inc. (a wholly owned subsidiary of the Company) and JFK Cartage, Inc. | |
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
+ Disclosure Schedules and other related Schedules are omitted.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: June 30, 2022 | TRANSPORTATION AND LOGISTICS SYSTEMS, INC. | |
By: | /s/ Sebastian Giordano | |
Name: | Sebastian Giordano | |
Title: | Chief Executive Officer |