CEO Expects to Close Freight Connections by mid-August
JUPITER, FL / ACCESSWIRE / August 4, 2022 / Transportation and Logistics Systems, Inc. (OTCQB:TLSS), ("TLSS" or the "Company"), a logistics service provider, announced today, that through its wholly-owned operating subsidiary, Cougar Express, Inc. ("Cougar"), it closed on its stock purchase agreement ("SPA") by acquiring 100% of the outstanding stock of JFK Cartage, Inc. ("JFK Cartage") located in Inwood, New York on August 4, 2022, with an effective date of July 31, 2022.
Sebastian Giordano, Chairman and Chief Executive Officer of TLSS, commented, "As I previously stated, our expectation is that this transaction will significantly increase revenue and enable us to derive immediate operational efficiencies and substantial cost savings, while providing us with a larger and much more functional facility. The timing of this closing now allows us just about 60 days to comfortably transition out of Cougar's current facility, which Cougar is required to vacate, no later than September 30, 2022. From an M&A perspective, we now expect to close the transaction with Freight Connections within the next few weeks, while continuing to evaluate other acquisition opportunities."
With annual revenues of $3.6 million in 2021 and approximately $2.0 million for the first six months of 2022, 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 total purchase price after closing adjustments was $1,700,000. The Company: (i) paid $401,552 in cash at closing; (ii) entered into a $696,935 promissory note with the Seller, $98,448 of which is payable weekly, in the amount of 25% of accounts receivable collected, but in any event, no later than October 4, 2022, with the remaining balance of $598,487, payable in three annual installments of $199,496, with interest at five (5%) percent per annum on July 31, 2023, 2024 and 2025, respectively; (iii) assumed a $503,065 Small Business Administration ("SBA") loan; and (iv) assumed $98,448 of accrued liabilities of the Seller.
About Transportation and Logistics Systems, Inc.
TLSS, through its wholly owned operating subsidiary, Cougar Express, Inc. operates as a full-service logistics and transportation company. For more information, visit the Company's website, www.tlss-inc.com.
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.
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SOURCE: Transportation & Logistics Systems