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): April 17, 2023
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 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
Transportation and Logistics Systems, Inc. (OTC PINK: TLSS) (“TLSS” or the “Company”), a publicly-traded holding company in which its wholly-owned operating subsidiaries, Cougar Express, Inc., Freight Connections, Inc., JFK Cartage, Inc., and Severance Trucking Co., together provide a full suite of logistics and transportation services, announced that, on April 14, 2023, its Board of Directors approved a credit facility (the “Credit Facility”) under which the Company would obtain unsecured senior debt financing of up to $1,000,000. The terms of the Credit Facility provide for interest at 12% per annum. The maturity date of the financing will be December 31, 2023, provided, however, that loans are prepayable by the Company at any time without premium or penalty. Each loan under the Credit Facility will be made on promissory notes, substantially in the form of Exhibit 10.1 hereto.
The Company received initial loans under the Credit Facility, in the following amounts: (a) $500,000 from John Mercadante on April 17, 2023; Mr. Mercadante is a Director of the Company; and (b) $100,000 from Sebastian Giordano on April 21, 2023; Mr. Giordano is the Company’s Chief Executive Officer, President, and Chairman of the Board of Directors.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description | |
| 10.1 |
|
Form of Promissory Notes |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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: April 24, 2023 | TRANSPORTATION AND LOGISTICS SYSTEMS, INC. | |
| By: | /s/ Sebastian Giordano | |
| Name: | Sebastian Giordano | |
| Title: | Chief Executive Officer | |
Exhibit 10.1
PROMISSORY NOTE
| $________.00 Date: | April __, 2023 |
FOR VALUE RECEIVED, Transportation and Logistics Systems, Inc., a Nevada corporation (“Maker”), hereby promises to pay to the order of _____________ (“Payee”) at ___________________ or at such other place as the holder hereof may designate in writing, the principal sum of $__________.00, together with interest, from the date hereof, on the unpaid principal amount hereof outstanding from time to time at the rate per annum equal to 12% (the “Base Rate”), on the terms set forth herein. Payee may transfer this Note to any person, who shall then be deemed to be Payee hereunder.
Principal outstanding and interest accrued and unpaid hereunder and any other amounts due hereunder shall be due and payable on December 31, 2023. All amounts paid hereunder shall be credited first to the payment of accrued and unpaid interest, and then to the payment of outstanding principal. Payment of principal, interest and any other sum due hereunder shall be made in lawful money of the United States of America. This Note may be prepaid in whole or in part at any time without premium or penalty.
All amounts paid hereunder shall be credited first to the payment of accrued and unpaid interest, and then to the payment of outstanding principal. Payment of principal, interest and any other sum due hereunder shall be made in lawful money of the United States of America. This Note may be prepaid in whole or in part at any time without premium or penalty provided that such prepayment is accompanied by a notice of the amount being prepaid.
The loan reflected in this Note is anticipated to be one loan in a series of senior loans to Maker between the date hereof and May 31, 2023 (the “Loans”). Later Loans in such series of Loans shall be pari passu with his Note, but may be on terms that are more favorable to the lender than are the terms under this Note. Maker shall provide prompt notice of the closing of each such later Loan. Upon Maker’s receipt of the proceeds of such later Loans, Payee shall have the option of electing, by notice to Maker, to have this Note pre-paid in whole or in part to the extent of such proceeds, or to elect to have all of the terms of such later Loans apply retroactively to the loan reflected in this Note as of the date hereof, upon which election, this Note shall be exchanged for documentation comparable to the documentation memorializing such later Loans.
Maker covenants not to issue any instrument of indebtedness senior to this Note or secured by any assets of Maker, or, other than the Loans, pari passu with this Note.
If any one or more of the following events (herein termed “Events of Default”) shall happen:
| (a) | any payment of principal or interest hereunder is not paid when due; | |
| (b) | Maker shall: |
(i) become insolvent or admit its inability, or become unable, to pay its debts generally as they become due,
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(ii) file a petition for relief or for reorganization or for the adoption of an arrangement under the federal bankruptcy laws or any other similar law or statute for the relief or aid of debtors of the United States of America or any State thereof, as now or hereinafter in effect (the “Bankruptcy Laws”), or an admission seeking the relief therein provided, or
(iii) have an order for relief entered against it under the Bankruptcy Laws or otherwise be adjudicated a bankrupt or insolvent; or
(c) if Maker defaults in the due observance of any material provision of this Note, and the same shall not be cured within 30 days of written notice from Payee; or
(d) if Maker takes any action to terminate, liquidate or dissolve Maker,
then and in any such event, at any time thereafter, if any Event of Default shall then be continuing, Payee may by written notice to Maker declare the principal, accrued interest and any other amounts owing under this Note to be immediately due and payable, and in such case the same shall be paid immediately in full. Interest shall accrue on all amounts past due, whether or not an Event of Default has occurred, at the rate per annum of the lesser of the Base Rate plus 5% or the highest rate permitted by law until paid.
In case any one or more default hereunder or under any related document shall happen and be continuing, Payee may proceed to protect and enforce Payee’s rights either by suit in equity or by action at law, or both, whether for the specific performance of any covenant, condition, or agreement contained in this Note or in aid of the exercise of any power granted in this Note or to enforce any other legal or equitable right of Payee. After an Event of Default, Maker shall pay to Payee immediately upon written demand therefor any amounts reasonably expended or incurred by Payee in collecting any amount due hereunder, including, without limitation, reasonable attorneys’ fees and costs, whether or not any legal action is instituted in connection therewith, including interest on all such amounts from the date demanded until the date paid at the rate per annum of the lesser of the Base Rate plus 5% or the highest rate permitted by law until paid. Each and every remedy hereunder or at law or equity shall be cumulative, and Payee may exercise any such remedy or remedies together, separately or in any combination at any time.
This Note (a) may not be changed, waived, discharged or terminated, nor may any provision(s) of it be waived, except by an instrument in writing signed by the Payee and (b) shall be binding upon Maker and each of Maker’s successors and assigns, and shall inure to the benefit of and be enforceable by Payee and Payee’s heirs and personal representatives. No promises or representations have been made by Payee in connection herewith except as expressly set forth herein. Maker hereby waives presentment, demand, protest, notice of dishonor and all other notices and demands, except as expressly set forth herein.
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This Note shall be paid in full without any offset or deduction for any claim, counterclaim or defense of any kind whatsoever, the right to raise any of which is waived by Maker. Because Maker has already received fair value in assets with a readily ascertainable value for this Note (i.e., a cash advance), such waiver by Maker shall include any and all claims that Maker may have, whether known or not known to Maker, for fraud or any related cause of action. Maker also hereby waives the right to trial by jury in any litigation related to this Note.
This Note shall be construed and governed in all respects by the laws of the State of Florida applicable to contracts made and to be performed therein.
If any provision of this Note is deemed to be invalid, illegal, or unenforceable, the balance of this Note shall remain in full force and effect.
Maker and Payee intend this Note to conform strictly to the usury and similar laws relating to interest and the collection of other charges from time to time in force, and this Note is hereby expressly limited so that in no contingency or event whatsoever, whether by acceleration of maturity hereof or otherwise, shall the amount paid or agreed to be paid in the aggregate to Payee as interest or other charges hereunder or under any other security agreement given to secure this Note, or in any other document evidencing, securing or pertaining to this Note, exceed the maximum amount permissible under applicable usury or such other laws (the “Maximum Amount”). If under any circumstances whatsoever fulfillment of any provision hereof, or any of such other related documents, at the time performance of such provision shall be due, shall involve transcending the Maximum Amount, then ipso facto, the obligation to be fulfilled shall be reduced to the Maximum Amount. For the purposes of calculating the actual amount of interest or other charges paid and/or payable hereunder, in respect of laws pertaining to usury or such other laws, all charges and other sums paid or agreed to be paid hereunder to the holder hereof for the use, forbearance or detention of the amount advanced, outstanding from time to time shall, to the extent permitted by applicable law, be amortized, prorated, allocated and spread from the date of disbursement of the proceeds reflected by this Note until payment in full of all amounts under this Note, so that the actual rate of interest on account of the principal hereof is uniform through the term hereof. The terms and provisions of this paragraph shall control and supersede every other provision of this Note.
If under any circumstances Payee shall ever receive an amount which would exceed the Maximum Amount, such amount shall be deemed a payment in reduction of amounts owing hereunder and any other obligation of Maker in favor of Payee, and shall be so applied, or if such excessive interest exceeds the unpaid balance owing hereunder and any other obligation of Maker in favor of Payee, then the excess shall be deemed to have been a payment made by mistake and shall be refunded to Maker.
Any notice or communication required or sent in connection with this Note shall be sent by first class mail, postage prepaid, addressed as set forth above. Any such address may be changed by sending notice of such change at least 10 days prior to the effective date of the change.
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As a further inducement to the Payee to accept this Note, Maker, acknowledging that Payee is relying on the covenants in this paragraph, covenants and agrees that: in any action or proceeding brought on, under or in connection with or relating to this Note, any legal suit arising out of or in connection with this Note may be instituted in any Federal or State Court in the State of Florida; Maker waives any objection Maker may now or hereafter have to such venue in any legal suit; Maker irrevocably submits to the jurisdiction of any such Court in any such suit; Maker agrees not to bring any such suit, action or other proceeding in any other jurisdiction; and Maker agrees that service of process upon Maker may be made at Maker’s address above by mailing to such address by certified mail, return receipt requested, with an additional copy to such address by first class mail, and such service shall be deemed in every respect effective service of process upon Maker in any such suit, action or proceeding in the State of Florida.
IN WITNESS WHEREOF, Maker has caused this Note to be executed by its duly authorized officer on the day and year first above written.
| Transportation and Logistics Systems, Inc. | ||
| By: | ||
| Name: | ||
| Title: | ||
State of )
County of )ss.:
On the ____ day of April in the year 2023 before me, the undersigned, personally appeared ___________________, personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his capacity, and that by his signature on the instrument, the individual executed the instrument, and that such individual made such appearance before the undersigned in the County of __________________, City/Town of ___________________________.
___________________________
(Signature and Office of individual
taking acknowledgment.)
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