Filed 2026-03-30 · Period ending 2025-12-31 · 62,457 words · SEC EDGAR
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# Transportation & Logistics Systems, Inc. (TLSS) — 10-K **Filed:** 2026-03-30 **Period ending:** 2025-12-31 **Accession:** 0001493152-26-013576 **Source:** [SEC EDGAR](https://www.sec.gov/Archives/edgar/data/1463208/000149315226013576/) **Origin leaf:** 7a5b37ad8a55b02e5c43797ef8abeedfb9337016a800e89f54144a2e59e8ef14 **Words:** 62,457 --- ** UNITED STATES** **SECURITIES AND EXCHANGE COMMISSION** **Washington, D.C. 20549** **FORM 10-K** (Mark one) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2025 or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ___________ Commission File No. **001-34970** | Transportation and Logistics Systems, Inc. | | | (Exact name of registrant as specified in its charter) | | | Nevada | | 26-3106763 | | | (State or other jurisdiction | | (IRS Employer | | | of incorporation) | | Identification No.) | | | | | | | | 110 Chestnut Ridge Road | | | | | Montvale, NJ | | 07645 | | | (Address of principal executive offices) | | (zip code) | | **(833) 764-1443** (Registrants telephone number, including area code) (Former name, former address and former fiscal year, if changed since last report.) Securities Registered Pursuant to Section 12(b) of the Act: | Title of each class | | Trading Symbol | | Name of each exchange on which registered | | | N/A | | N/A | | N/A | | Securities Registered Pursuant to Section 12(g) of the Act: **Common Stock, $ 0.001 Par Value** Indicate by check mark if registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No . Indicate by check mark if registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes No . Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes: No: Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit and post such files). Yes: No: Indicate by check mark whether registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of large accelerated filer, accelerated filer, smaller reporting company and emerging growth company in Rule 12b-2 of the Exchange Act. | | Large accelerated filer | | Accelerated filer | | | | | Non-accelerated filer | | Smaller reporting company | | | | | | | 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. Indicate by check mark whether the registrant has filed a report on and attestation to its managements assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrants executive officers during the relevant recovery period pursuant to 240.10D-1(b). Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes No The aggregate market value of the voting and non-voting common equity held by non-affiliates cannot be calculated as our common stock is not traded on a national securities exchange. Indicate the number of shares outstanding of each of the registrants classes of common stock, as of the latest practicable date. As of March 30, 2026, the registrant had outstanding 5,889,437,474 shares of common stock. | | | **TRANSPORTATION AND LOGISTICS SYSTEMS, INC.** **FORM 10-K** **December 31, 2025** **INDEX** | | | Page | | | PART I | | | | | | | | | | Item 1. Description of Business | 1 | | | | | | | | | Item 1A. Risk Factors | 3 | | | | | | | | | Item 1B. Unresolved Staff Comments | 9 | | | | | | | | | Item 1C. Cybersecurity | 9 | | | | | | | | | Item 2. Properties | 9 | | | | | | | | | Item 3. Legal Proceedings | 9 | | | | | | | | | Item 4. Mine Safety Disclosures | 12 | | | | | | | | PART II | | | | | | | | | | Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 13 | | | | | | | | | Item 6. Reserved | 13 | | | | | | | | | Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations | 13 | | | | | | | | | Item 7A. Quantitative and Qualitative Disclosures About Market Risk | 17 | | | | | | | | | Item 8. Financial Statements and Supplementary Data | F-1 | | | | | | | | | Financial Statements pages | F-1 - F-30 | | | | | | | | | Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures | 18 | | | | | | | | | Item 9A. Controls and Procedures | 18 | | | | | | | | | Item 9B. Other Information | 18 | | | | | | | | | Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | 18 | | | | | | | | PART III | | | | | | | | | | Item 10. Directors, Executive Officers and Corporate Governance | 19 | | | | | | | | | Item 11. Executive Compensation | 21 | | | | | | | | | Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 23 | | | | | | | | | Item 13. Certain Relationships and Related Transactions, and Director Independence | 23 | | | | | | | | | Item 14. Principal Accountant Fees and Services | 24 | | | | | | | | | Item 15. Exhibits Financial Statement Schedules | 25 | | | | | | | | | Item 16. Form 10-K Summary | 27 | | | | | | | | Signatures | 28 | | | I | | For purposes of this Annual Report on Form 10-K (this Annual Report), unless otherwise indicated or the context otherwise requires, all references herein to Transportation and Logistics Systems, Inc., the Company, we, us, TLSS and our, refer to Transportation and Logistics Systems, Inc., a Nevada corporation, and its wholly-owned subsidiaries: TLSS Acquisition, Inc. (TLSSA), TLSS Operations Holding Company, Inc. (TLSS Ops), Shyp CX, Inc. (Shyp CX); those entities wholly-owned by TLSS Ops, TLSS-CE, Inc. (TLSS-CE) and TLSS-STI, Inc. (TLSS-STI); JFK Cartage Co., Inc. (JFK Cartage), a wholly-owned subsidiary of Cougar Express; Severance Trucking Co., Inc. (Severance Trucking), a wholly-owned subsidiary of TLSS-STI and Severance Warehousing, Inc. (Severance Warehousing) and McGrath Trailer Leasing, Inc. (McGrath), both wholly-owned subsidiaries of Severance Trucking, (Severance Trucking, Severance Warehousing, and McGrath collectively, Severance); and, the deconsolidated former subsidiary, Cougar Express, Inc. (Cougar Express), a wholly-owned subsidiary of TLSS-CE. TLSSA, TLSS Ops, Shyp CX, TLSS-CE, TLSS-STI, Cougar Express, JFK Cartage, and Severance, are hereinafter referred to as the Subsidiaries. Other than the Company, the results of operations and all accounts of the Subsidiaries for the years ended December 31, 2025 and 2024 are included as part of discontinued operations on the consolidated financial statements. **Forward-Looking Statements** Statements made in this Annual Report 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 and the risks set forth in Part I, Item 1A, Risk Factors in this Annual Report, these risks and uncertainties include: our ability to meet our annual and quarterly periodic reporting obligations under Securities Exchange Act of 1934, as amended (34 Act), including obtaining sufficient financing to fund the necessary costs related to the preparation and filing of one or more of our future periodic reports; our ability to restructure our remaining existing debts and obligations and replace our discontinued businesses and/or enter into new line(s) of business, whether by acquisition or otherwise; our ability to attract and retain key personnel and skilled labor to meet the requirements of being a public company; our history of losses, deficiency in working capital and a stockholders deficit and inability to achieve sustained profitability; our need to procure substantial additional financing to fund ongoing losses and the growth of our business; our ability to successfully execute our business strategies, including integration of acquisitions and the future acquisition of other businesses to grow our company; adverse or unanticipated events in the litigation to which we are currently a party (or as to which we may become a party in the future); our ability to pay expenses and liabilities as they become due; adverse or unanticipated decisions by courts construing third-party liability insurance policies to which the Company and/or its subsidiaries is a party; a failure to obtain adequate liability insurance coverage in the future; material weaknesses in our internal control over financial reporting and our ability to maintain effective controls over financial reporting in the future; 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 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 Annual 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 Annual Report. Given these uncertainties, you should not place undue reliance on these forward-looking statements and should consider various factors, including the risks described herein, and, among other places, in this Annual Report, as well as any amendments hereto or thereto, or other documents filed with the Securities and Exchange Commission (the SEC). | II | | **PART I** **Item 1. Description of Business.** **Overview** Transportation and Logistics Systems, Inc. is a publicly-traded holding company on OTCID tier which became effective in July 2025. As of February 26, 2025, our shares of common stock resumed trading on the OTC PINK (the OTC PINK) market after having been downgraded from the OTC PINK to the OTC Expert Market on July 17, 2024. Until February 2024, the Subsidiaries provided a full suite of asset-based logistics and transportation services, specializing in ecommerce fulfillment, last mile deliveries, two-person home delivery, mid-mile, and long-haul services. The Company and the Subsidiaries operated several warehouse locations located in New York, New Jersey, Connecticut, and Massachusetts. The Company and the Subsidiaries ceased all remaining operations as of mid-February 2024. On December 1, 2023, the Companys former subsidiaries, TLSS-FC, Inc. and Freight Connections, Inc. filed voluntary bankruptcy petitions under Chapter 7 of the United States Bankruptcy Code in the State of New Jersey. On February 27, 2024, Cougar Express filed a voluntary bankruptcy petition under Chapter 7 of the United States Bankruptcy Code in the State of New York. The Severance entities, JFK Cartage, TLSSA, TLSS Ops, Shyp CX, TLSS-CE, and TLSS-STI have all ceased operations since mid-February 2024. Besides TLSS-FC, Inc., Freight Connections, and Cougar Express, none of the other Subsidiaries have filed bankruptcy. On November 16, 2020, we formed a wholly owned subsidiary, TLSSA, under the laws of the State of Delaware. On March 24, 2021, TLSSA, acquired all the issued and outstanding shares of capital stock of Cougar Express, a New York-based full-service logistics provider specializing in pickup, warehousing, and delivery services in the New York City tri-state area. Subsequently, on June 19, 2023, TLSSA transferred all of the issued and outstanding shares of capital stock of Cougar Express to TLSS-CE. On February 27, 2024, Cougar Express, filed a Chapter 7 bankruptcy petition in the State of New York under the United States Bankruptcy Code, assigning all of the Cougar Express assets to Mr. Andrew M. Thaler, Esq., as Trustee (the Cougar Express Trustee) for liquidation and unwinding of the business. The Cougar Express Trustee has been charged with liquidating the assets for the benefit of the Cougar Express creditors pursuant to the provisions of the Chapter 7 Statute. As a result of Cougar Express filing the Chapter 7 petition, the Trustee assumed all authority to manage Cougar Express. Additionally, as of February 27, 2024, Cougar Express no longer conducts any business and is not permitted by the Trustee to conduct any business. For these reasons, effective February 27, 2024, the Company relinquished control of Cougar Express. Therefore, the Company deconsolidated Cougar Express, effective with the filing of the Chapter 7 bankruptcy petition on February 27, 2024. On February 21, 2021, we formed a wholly-owned subsidiary, Shyp CX, a company incorporated under the laws of the State of New York. Shyp CX does not engage in any revenue-generating operations and is currently inactive. On August 4, 2022, Cougar Express closed on its acquisition of all outstanding stock of JFK Cartage, a New York-based full-service logistics provider specializing in pickup, warehousing, and delivery services in the tri-state area. In February 2024, due to lack of working capital to conduct its business, JFK Cartage ceased its operations and no longer conducts any business, and all of its assets of the Company were voluntarily conveyed to the Cougar Trustee. On August 17, 2022, the Company formed a wholly-owned subsidiary, TLSS-FC, under the laws of the State of Delaware. Effective September 16, 2022, TLSS-FC closed on an acquisition to acquire all outstanding stock of Freight Connections, a New Jersey-based company that offered an array of transportation, warehousing, consolidating, distribution, and local cartage services throughout the New York tri-state area. On December 1, 2023, TLSS-FC and its wholly-owned subsidiary, Freight Connections, filed a Chapter 7 bankruptcy petition in the State of New Jersey under the United States Bankruptcy Code, assigning all of the TLSS-FC and Freight Connections assets to Mr. Steven P. Kartzman, Esq., as Trustee (the TLSS Trustee) for liquidation and unwinding of the business. The TLSS Trustee was charged with liquidating the assets for the benefit of the TLSS-FC and Freight Connections creditors pursuant to the provisions of the Chapter 7 Statute. As a result of TLSS-FC and Freight Connections filing of the Chapter 7 petition, the TLSS Trustee assumed all authority to manage TLSS-FC and Freight Connections. Additionally, TLSS-FC and Freight Connections no longer conduct any business and are not permitted by the TLSS Trustee to conduct any business. For these reasons, effective December 1, 2023, the Company relinquished control of TLSS-FC and Freight Connections. Therefore, the Company deconsolidated TLSS-FC and Freight Connections effective with the filing of the Chapter 7 petition on December 3, 2023. On January 27, 2023, the Company formed a wholly-owned subsidiary, TLSS-STI, under the laws of the State of Delaware. TLSS-STI does not engage in any revenue-generating operations and is currently inactive. Effective January 31, 2023, TLSS-STI acquired all of the outstanding stock of each of Severance Trucking, Severance Warehouse and McGrath, which together offered less-than-truckload (LTL) trucking services throughout New England. In February 2024, due to the lack of working capital to conduct its business, Severance ceased its operations and no longer conducts any business, and all fixed assets of the Company were voluntarily surrendered to the prior owners. On May 31, 2023, the Company formed TLSS Ops and TLSS-CE. Simultaneously with the formation of these entities, Cougar Express became a wholly-owned subsidiary of TLSS-CE; Severance Warehousing and McGrath became wholly-owned subsidiaries of Severance Trucking; Severance Trucking became a wholly-owned subsidiary of TLSS-STI; and each of TLSS-CE, TLSS-STI and TLSS-FC became wholly-owned subsidiaries of TLSS Ops. Subsequent to the cessation of all of the Companys revenue generating operations in February 2024 and through the date of this Annual Report, the Company continues to remain insolvent. The Company has obtained financing to enable it to complete the audit of the financial statements for this Annual Report and its quarterly reports in 2025 and 2024. Following the filing of this Annual Report, we intend to continue working to complete the necessary interim financial statements and timely file the Quarterly Reports on Form 10-Q due in the 2026 calendar year (the 2026 Quarterly Reports); however, the Company will require additional financing to fund the necessary costs related to the preparation and filing of one or more of the 2026 Quarterly Reports. In addition, we are also evaluating a possible restructuring of our remaining existing debts and obligations, as well as assessing the possibility of replacing our discontinued businesses and/or entering into new line(s) of business, whether by acquisition or otherwise. However, there can be no assurance that we will, in fact, be able to replace our former business and/or enter into new line(s) of business, or to do so profitably. | 1 | | **Corporate History** TLSS was incorporated under the name PetroTerra Corp. in the State of Nevada on July 25, 2008. Prior to March 2017, TLSS was an independent oil or gas exploration and development company focused on the acquisition or lease of properties that potentially contained extractable oil or gas. However, at that time, we had not generated any revenues and, due to a decline in the oil and gas markets, elected to seek other business opportunities. On March 30, 2017, TLSS entered into an agreement to acquire Save on Transport Inc., a Florida-based non-asset provider of integrated transportation management solutions, including brokerage and logistics services related to the transportation of automobiles and other freight (Save on Transport), as a wholly owned subsidiary. On June 18, 2018, TLSS completed the acquisition of all outstanding membership interests of Prime EFS from its members. On July 24, 2018, TLSS formed Shypdirect LLC, a company organized under the laws of New Jersey. Between June 18, 2018 and September 30, 2020, we operated through Prime EFS and Shypdirect. The great bulk of Prime EFSs business prior to September 30, 2020 was conducted pursuant to the Delivery Service Provider program of Amazon Logistics, Inc., a subsidiary of Amazon.com, Inc. (Amazon), but the program was terminated effective September 30, 2020. As a result, Prime EFS ceased operations on September 30, 2020. Shypdirect conducted its business as a carrier under a relay program service agreement with Amazon (the Program Agreement), but the Program Agreement expired on May 14, 2021. In June 2021, Shypdirect ceased its tractor trailer and box truck delivery services to Amazon, and in July 2021, Shypdirect ceased all operations. On November 13, 2020, TLSS formed a wholly-owned subsidiary, Shyp FX, under the laws of the State of New Jersey. On January 15, 2021, through Shyp FX, we simultaneously executed an asset purchase agreement and closed a transaction to acquire substantially all the assets and certain liabilities of Double D Trucking, Inc., a northern New Jersey-based logistics provider specializing in servicing Federal Express over the past 25 years (DDTI). On April 28, 2022, we entered into an asset purchase agreement with an unrelated third party to sell substantially all of the assets and specific liabilities of Shyp FX. On June 21, 2022, we closed the transaction and sold substantially all the assets of Shyp FX in an all-cash transaction. On November 16, 2020, we formed a wholly owned subsidiary, TLSSA, under the laws of the State of Delaware. On March 24, 2021, TLSSA, acquired all the issued and outstanding shares of capital stock of Cougar Express, a New York-based full-service logistics provider specializing in pickup, warehousing, and delivery services in the New York City tri-state area. On August 16, 2021, Prime EFS and Shypdirect executed Deeds of Assignment for the Benefit of Creditors in the State of New Jersey pursuant to N.J.S.A. 2A:19-1, et seq. (the ABC Statute), assigning all Prime EFS and Shypdirect assets to Terri Jane Freedman as Assignee for the Benefit of Creditors (the Assignee) and filing for dissolution. An Assignment for the Benefit of Creditors, general assignment or ABC in New Jersey is a state-law, voluntary, judicially-supervised corporate liquidation and unwinding similar to the Chapter 7 bankruptcy process pursuant to the United States Bankruptcy Code. On September 7, 2021, the ABCs were filed with the Bergen County Clerk in Bergen County, New Jersey and filed with the Surrogate Court, Bergen County, initiating judicial proceedings. Effective September 7, 2021, we relinquished control of Prime EFS and Shypdirect. Further, on October 13, 2021, Prime EFS and Shypdirect filed for dissolution with the Secretary of State of New Jersey. Therefore, we deconsolidated Prime EFS and Shypdirect effective with the filing of executed Deeds of Assignment for the Benefit of Creditors in September 2021. On August 4, 2022, Cougar Express closed on its acquisition of all outstanding stock of JFK Cartage, a New York-based full-service logistics provider specializing in pickup, warehousing, and delivery services in the tri-state area. On August 17, 2022, the Company formed a wholly-owned subsidiary, TLSS-FC, under the laws of the State of Delaware. Effective September 16, 2022, TLSS-FC closed on an acquisition to acquire all outstanding stock of Freight Connections, a New Jersey-based company that offered an array of transportation, warehousing, consolidating, distribution, and local cartage services throughout the New York tri-state area. On January 27, 2023, the Company formed a wholly-owned subsidiary, TLSS-STI, under the laws of the State of Delaware. Effective January 31, 2023, TLSS-STI acquired all of the outstanding stock of each of Severance Trucking, Severance Warehouse and McGrath, which together offered less-than-truckload (LTL) trucking services throughout New England. On May 31, 2023, the Company formed TLSS Ops and TLSS-CE. Simultaneously with the formation of these entities, Cougar Express became a wholly-owned subsidiary of TLSS-CE; Severance Warehousing and McGrath became wholly-owned subsidiaries of Severance Trucking; Severance Trucking became a wholly-owned subsidiary of TLSS-STI; and each of TLSS-CE, TLSS-STI and TLSS-FC became wholly-owned subsidiaries of TLSS Ops. On December 1, 2023, TLSS-FC and Freight Connections, filed a Chapter 7 bankruptcy petition in the State of New Jersey under the United States Bankruptcy Code, assigning all of the TLSS-FC and Freight Connections assets to Mr. Steven P. Kartzman, Esq., as Trustee (the TLSS Trustee) for liquidation and unwinding of the business. The TLSS Trustee was charged with liquidating the assets for the benefit of the TLSS-FC and Freight Connections creditors pursuant to the provisions of the Chapter 7 Statute. As a result of TLSS-FC and Freight Connections filing of the Chapter 7 petition, the TLSS Trustee assumed all authority to manage TLSS-FC and Freight Connections. Additionally, TLSS-FC and Freight Connections no longer conduct any business and was not permitted by the TLSS Trustee to conduct any business. For these reasons, effective December 1, 2023, the Company relinquished control of TLSS-FC and Freight Connections. Therefore, the Company deconsolidated TLSS-FC and Freight Connections effective with the filing of the Chapter 7 petition on December 3, 2023. On February 27, 2024, Cougar Express, filed a Chapter 7 bankruptcy petition in the State of New York under the United States Bankruptcy Code, assigning all of the Cougar Express assets to Mr. Andrew M. Thaler, Esq., as Trustee (the Cougar Express Trustee) for liquidation and unwinding of the business. The Cougar Express Trustee has been charged with liquidating the assets for the benefit of the Cougar Express creditors pursuant to the provisions of the Chapter 7 Statute. As a result of Cougar Express filing the Chapter 7 petition, the Trustee assumed all authority to manage Cougar Express. Additionally, as of February 27, 2024, Cougar Express no longer conducts any business and is not permitted by the Trustee to conduct any business. For these reasons, effective February 27, 2024, the Company relinquished control of Cougar Express. Therefore, the Company deconsolidated Cougar Express, effective with the filing of the Chapter 7 bankruptcy petition on February 27, 2024. In February 2024, due to the lack of working capital to conduct its business, Severance Trucking ceased its operations and no longer conducts any business, and all fixed assets of the Company were voluntarily surrendered to the prior owners. JFK Cartage, the Severance entities, TLSSA, TLSS Ops, Shyp CX, TLSS-CE, TLSS-FC, and TLSS-STI have all ceased operations since mid-February 2024. Our principal executive offices are located in the United States at 110 Chestnut Ridge Road, Suite 444, Montvale NJ 07645, and our telephone number is (833) 764-1443. The Companys website is www.tlss-inc.com. | 2 | | **Economic Factors** Our restructuring efforts and possible new business opportunities are subject to a number of general economic factors that may have a material effect on such results, many of which are largely out of our control, including our success in completing such restructuring, securing necessary financing as well as finding and closing on any new business opportunities. **Employees** As of the date of this Annual Report, we only have one employee who serves as our Chief Executive Officer and Chief Financial Officer. Since February 2024, other professional and executive services have been procured by TLSS through independent contractors. Depending upon the outcome of our restructuring and if it leads to a new business opportunity, the Company will continue to evaluate its use of human capital measures or objectives in managing its business, such as the factors we employ or seek to employ in the development, attraction and retention of personnel and maintenance of diversity in its workforce. **Information Systems** Subsequent to the cessation of our operations and for reasons of nonpayment due to the Companys insolvency, information systems used in the trucking business are no longer available to the Company. **How to Obtain our SEC Filings** We file annual, quarterly, and special reports, proxy statements, and other information with the Securities and Exchange Commission (SEC). Reports, proxy statements and other information filed with the SEC can be inspected and copied at the public reference facilities of the SEC at 100 F Street N.E., Washington, DC 20549. Such material may also be accessed electronically by means of the SECs website at www.sec.gov. You may also obtain our recent filings with the Securities and Exchange Commission from the InvestorsRegulatory Filings section of our website www.tlss-inc.com. **Item 1A. Risk Factors.** *Investing in our common stock involves a high degree of risk. You should not invest in our stock unless you are able to bear the complete loss of your investment. You should carefully consider the risks described below, as well as other information provided to you in this Annual Report, including information in Managements Discussion and Analysis of Financial Condition and Results of OperationsCautionary Note Regarding Forward-Looking Information and Factors That May Affect Future Results before making an investment decision. The risks and uncertainties described below are not the only ones facing TLSS. Additional risks and uncertainties not presently known to us or that we currently believe are immaterial may also impair our business operations. If any of the following risks actually occur, our business, financial condition or results of operations could be materially adversely affected, the value of our common stock could decline, and you may lose all or part of your investment.* **RISKS RELATED TO OUR BUSINESS AND INDUSTRY** **We currently have no operating business and cannot determine, at this time, if we will be able to execute a go-forward restructuring of the Company.** Due to our inability to secure the requisite operating capital to meet our obligations, we ceased operations in the first quarter of 2024. Multiple of our operating subsidiaries have filed for bankruptcy under Chapter 7 of the United States Bankruptcy Code and the remaining former operating subsidiaries and the Company remain insolvent. In order to pursue a possible go-forward restructuring plan, the Company must maintain its compliance with its periodic reporting obligations. Our limited operating history and our proposed restructuring is subject to numerous risks, uncertainties, expenses, and difficulties associated with an insolvent company. Such risks include, but are not limited to: | | | the absence of a significant operating history; | | | | | an inability to raise capital to continue to maintain compliance with our periodic reporting obligations, fund ongoing costs, restructure the Companys business, and/or secure a new business opportunity; | | | | | the inability to negotiate a satisfactory restructuring of our debts and obligations with creditors; | | | | | expected continual losses for the foreseeable future; and | | | | | reliance on key personnel. | | Because we are subject to these and other risks, you may have a difficult time evaluating the Company and your investment in the Company. We may be unable to successfully overcome these risks which could harm the Company further. Our restructuring strategy may be unsuccessful, and we may be unable to address the risks we face in a cost-effective manner, if at all. If we are unable to successfully address these risks the Company will be further harmed. **We may be unable to successfully find a new business opportunity.** During 2025, we restructured our existing debts and obligations and are currently exploring new business opportunities. Exploration of potential new business opportunities, mergers or acquisitions requires significant attention to source and evaluate. In addition, we can expect to compete for new business opportunities with other companies, some of which may have greater financial and other resources than we do. We cannot ensure that we will have sufficient cash to start a new business, consummate a merger or acquisition, or otherwise be able to obtain financing under acceptable terms, or obtain financing at all, for any new business venture. If we are unable to access sufficient funding for a new business venture, we may not be able to complete transactions that we otherwise find advantageous. Any such acquisition will entail numerous risks, including: we may not achieve anticipated levels of revenue, efficiency, cash flows and profitability; we may experience difficulties managing and integrating new businesses; we may underestimate the resources required to support a new business opportunity; we may incur unanticipated costs to support a new business; liabilities we assume could be greater than our original estimates or may not be disclosed to us at the time of closing a new business opportunity; and we may incur additional indebtedness, or we may issue additional equity to finance a new business venture or acquisitions, which could be dilutive to our stockholders. | 3 | | To the extent we do not successfully avoid or overcome the risks or problems resulting from any new business opportunity we undertake, there could be a material adverse effect on our Company. **We have ongoing capital requirements that necessitate obtaining financing on favorable terms.** We have depended primarily on convertible and nonconvertible debt and equity financing to fund the Company. Unless financing is secured, we will continue to face liquidity constraints and may have to seek protection under the United States Bankruptcy Code. Lack of funding will adversely impact our ability to implement a business plan. **We have never been profitable and, given the cessation of our business operations, may continue to not be profitable.** Historically, the Company has never been profitable and is currently insolvent and has no operating business. There can be no assurance that we will be able to implement a business plan, generate sustainable revenue or ever achieve consistently profitable operations. If the Company continues to be insolvent, the Company may need to seek protection under the United States Bankruptcy Code or otherwise liquidate its remaining assets. **RISKS RELATED TO OUR** **GENERAL OPERATIONS** **We incur significant costs as a result of operating as a public company, and our management is required to devote substantial time to compliance initiatives.** As a public company, we incur significant legal, accounting, and other expenses. In addition, the Sarbanes-Oxley Act of 2002, as well as rules subsequently implemented by the SEC, have imposed various requirements on public companies, including requiring establishment and maintenance of effective disclosure and financial controls as well as mandating certain corporate governance practices. In the past, our management and other personnel have devoted a substantial amount of time and financial resources to these compliance initiatives. However, due to significant cost cutting measures, the Company currently lacks the depth of management and personnel to meet such requirements. We currently do not have a sufficiently staffed accounting and finance function to maintain internal control systems adequate to meet the demands that are placed upon us as a public company. As a result, we have been unable to report our financial results accurately or in a timely manner and our business and stock price, assuming that a market for our stock develops, has suffered, and may continue to suffer. The costs of being a public company, as well as the lack of management depth, may have a material adverse effect on our future business and financial condition. **We currently lack the funds to develop a business, which may adversely affect our future growth.** The Company currently has no operations that generate revenue. Unless and until we can generate a sufficient amount of revenue, if ever, we can only expect to finance our capital needs through public or private equity offerings or debt financings. Additional funds may not be available when we need them on terms that are acceptable to us, or at all. If adequate funds are not available, we may be required to delay, reduce the scope of, our plans to grow our revenues or to consummate one or more strategic acquisitions or otherwise to scale back or abandon our business plans. In addition, we could be forced to reduce or forego any new business opportunities or file for bankruptcy. To the extent that we raise additional funds by issuing equity securities, our stockholders may experience significant dilution. In addition, debt financing, if available, may involve restrictive covenants. We may seek to access the public or private capital markets whenever conditions are favorable, even if we do not have an immediate need for additional capital at that time. Our access to the financial markets and the pricing and terms we receive in the financial markets could be adversely impacted by various factors, including changes in financial markets and interest rates. Our forecasts regarding the sufficiency of our financial resources to support our current and planned operations are forward-looking statements and involve significant risks and uncertainties, and actual results could vary because of a number of factors, including the factors discussed elsewhere in this Risk Factors section. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect. Our future capital requirements may be substantial and will depend on many factors including: | | | revenue received from sales and operations, if any, in the future; | | | | | the cost of merger, acquisitions, or new business opportunity; and | | | | | the costs associated with being a public company. | | **Raising capital in the future could cause dilution to our existing stockholders or require us to relinquish rights.** In the future, we may seek additional capital through a combination of private and public equity offerings and debt financings. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms may include liquidation or other preferences that adversely affect your rights as a stockholder. Debt financing, if available, would result in increased fixed payment obligations and may involve agreements that include covenants limiting or restricting our ability to take specific actions such as incurring additional debt, making capital expenditures, or declaring dividends. **If we are unable to attract and retain qualified executive officers and managers, we will be unable to operate efficiently, which could adversely affect our business, financial condition, results of operations and prospects.** Currently, we depend on the continued efforts and abilities of our sole executive officer, Sebastian Giordano (Mr. Giordano), to oversee the completion of the Companys SEC filings, restructuring, manage day-to-day business, and identify strategic opportunities. The loss of him could negatively affect our ability to execute our business strategy and adversely affect our business, financial condition, and business prospects. Competition for managerial talent with significant industry experience is high and we may lose access to executive officers for a variety of reasons, including more attractive compensation packages offered by our competitors. Although we had entered into an employment agreement with Mr. Giordano, we cannot guarantee that he or other key management personnel will remain employed by us for any length of time, especially since such employment agreement is and remains in default for nonpayment. Our inability to adequately fill vacancies in our senior executive positions on a timely basis could negatively affect our ability to implement our business strategy, which could adversely impact our results of operations and prospects. | 4 | | **Adverse publicity in connection with our Subsidiaries bankruptcy cases may negatively affect our current and future business prospects.** Adverse publicity or news coverage relating to us or our business, including, but not limited to, publicity or news coverage in connection with our Subsidiaries that have filed for bankruptcy, may negatively impact our efforts to establish and promote our business, including with respect to our prospective customers, suppliers, and service providers. **RISKS RELATED TO OUR FINANCIAL RESULTS AND FINANCING PLANS** **We have a history of losses and may continue to incur losses in the future.** The accompanying consolidated financial statements have been prepared on the basis of continuity of operations, realization of assets and the satisfaction of liabilities and commitments in the ordinary course of business. Historically, we have primarily funded our operations with proceeds from sales of convertible debt, notes, and convertible preferred stock. Since our inception, we have incurred recurring losses. During the year ended December 31, 2025, we had net income of $33,833, which was caused by the recording of a gain on debt extinguishment of $1,988,931. During the year ended December 31, 2024, we had a net loss of $3,824,470. Until such time that we implement business operations, either internally or through an acquisition, we expect to continue to generate net losses in the foreseeable future, mostly due to corporate overhead and costs of being a public company. These losses may increase, and we may never achieve profitability for a variety of reasons, including due to a lack of revenue generating operations, and other factors described elsewhere in this Risk Factors section. As of March 27, 2026 and December 31, 2025, we had a cash balance of $11,246 and $15,835, respectively. Our cash balance as of March 27, 2026, will not be sufficient to fund our operations for at least the next twelve months from the date of this Annual Report and we will need to raise additional working capital. **We have identified material weaknesses in our internal control over financial reporting, and we cannot assure you that additional material weaknesses or significant deficiencies will not occur in the future. If our internal control over financial reporting or our disclosure controls and procedures are not effective, we may not be able to accurately report our financial results or prevent fraud, which may cause investors to lose confidence in our reported financial information and may lead to a decline in our stock price.** We have historically had a small internal accounting and finance staff with limited experience in public reporting. This lack of adequate accounting resources has resulted in the identification of material weaknesses in our internal controls over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our consolidated financial statements will not be prevented or detected on a timely basis. In connection with the preparation of our consolidated financial statements for the years ended December 31, 2025 and 2024, our management team identified material weaknesses relating to, among other matters: | | | We currently lack multiple levels of management review on complex business, accounting, and financial reporting issues; and | | | | | We currently lack adequate segregation of duties as a result of our limited financial resources to support hiring of personnel. | | We plan to take steps to seek to remediate these material weaknesses and to improve our financial reporting systems and implement new policies, procedures, and controls. However, as of the date of this Annual Report, due to cost cutting measures, we only have one employee dedicated to our financial and other public reporting obligations and have been untimely in reporting our financial results. If we continue to be unsuccessful in remediating the material weaknesses described above, or if other material weaknesses or other deficiencies arise in the future, we continue to be unable to accurately report our financial results on a timely basis. In addition, due to our lack of accounting and finance personnel, our reported financial results may be materially misstated and require restatement which could result in the loss of investor confidence, delisting and/or cause the market price of our common stock to decline. | 5 | | **The control deficiencies in our internal control over financial reporting, until remedied, may cause errors in our financial statements or cause our filings with the SEC to not be timely.** There may be errors in our consolidated financial statements that could require a restatement, or our filings may not be timely made with the SEC. Based on the work undertaken and performed by us, however, we believe the consolidated financial statements contained in our reports filed with the SEC are fairly stated in all material respects in accordance with generally accepted accounting principles (GAAP) for each of the periods presented. At present, our internal control over financial reporting or disclosure controls and procedures are not effective. We identified material weaknesses including lack of sufficient internal accounting personnel in order to ensure complete documentation of complex transactions and adequate financial reporting. We intend to implement additional corporate governance and control measures to strengthen our control environment as we are able, but we may not achieve our desired objectives. We may identify material weaknesses and control deficiencies in our internal control over financial reporting in the future that may require remediation and could lead investors to lose confidence in our reported financial information, which could lead to a decline in our stock price. **Our preferred stock securities purchase agreements impose restrictions on us that may prevent us from engaging in beneficial transactions.** We have entered into preferred stock securities purchase agreements that contain covenants that restrict our ability to, among other things: | | | make certain payments, including the payment of dividends; | | | | | redeem or repurchase our capital stock; | | | | | incur additional indebtedness and issue additional preferred stock; | | | | | make investments or create liens; | | | | | merge or consolidate with another entity; | | | | | sell certain assets; and | | | | | enter into transactions with affiliates. | | **Actual results could differ from the estimates and assumptions that we use to prepare our consolidated financial statements.** To prepare consolidated financial statements in conformity with GAAP, management is required to make estimates and assumptions as of the date of the consolidated financial statements that affect the reported values of assets and liabilities, revenues and expenses, and disclosures of contingent assets and liabilities. At the time the estimates and assumptions are made, we believe they are accurate based on the information available. However, our actual results could differ from and could require adjustments to, those estimates. **A further decline in our available cash could result in our liquidation.** If we were to sustain a further decline in our available cash, we could experience future difficulties in complying with our various financial obligations. The failure to comply with such obligations could result in an event of default under the various financial instruments that may then become immediately due and payable. In addition, should an event of default occur, such lenders could elect to terminate their commitments thereunder, cease making loans and institute foreclosure proceedings against our assets. **RISKS RELATED TO OUR STATUS AS A SHELL COMPANY** **We are a shell company as defined under Rule 12b-2 of the Securities Exchange Act of 1934, which imposes significant restrictions and limitations on our ability to raise capital, attract investors, and execute a business combination or acquisition.** Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the Exchange Act) defines a shell company as a registrant that has no or nominal operations and either no or nominal assets, assets consisting solely of cash and cash equivalents, or assets consisting of any amount of cash and cash equivalents and nominal other assets. As of the date of this Annual Report, the Company has no revenue-generating operations, one employee, and assets consisting of approximately $11,246 in cash. These characteristics cause the Company to meet the definition of a shell company. Our status as a shell company materially restricts our ability to raise capital from investors who require shorter liquidity timelines, may deter potential business combination partners, and imposes ongoing regulatory burdens that may be difficult for us to satisfy given our limited resources and personnel. There can be no assurance that the Company will be able to cease being a shell company within a timeframe, or at all, that would be acceptable to current or prospective investors. **Holders of our restricted shares of common stock will not be able to use Rule 144 to resell their shares for so long as we remain a shell company, and for twelve months thereafter, even if we cease to be a shell company in the future.** Rule 144 under the Securities Act of 1933, as amended (the Securities Act), provides a safe harbor from the registration requirements of the Securities Act for the resale of restricted and control securities. However, Rule 144 is not available for the resale of securities initially issued by a shell company, or a former shell company, unless and until: (i) the issuer is no longer a shell company; (ii) the issuer has been subject to the reporting requirements of Section 13 or Section 15(d) of the Exchange Act for at least twelve months; (iii) the issuer has filed all required reports under Section 13 or Section 15(d) of the Exchange Act during the preceding twelve months; and (iv) at least one year has elapsed from the date that the issuer filed current Form 10 information with the SEC reflecting its status as an entity that is no longer a shell company. As a result, for so long as we remain a shell company, holders of our restricted shares of common stock will have no ability to resell their shares pursuant to Rule 144, regardless of how long they have held such shares or the volume of shares involved. Even after we cease to be a shell company, holders of restricted shares will not be able to rely on Rule 144 until all four of the conditions described above have been satisfied. This restriction significantly impairs the liquidity available to existing stockholders holding restricted shares and may make it substantially more difficult for the Company to attract future investors who would otherwise rely on the Rule 144 safe harbor for resale of their securities. **As a shell company, we are subject to significant restrictions on our ability to register the resale of our securities, which may adversely affect the liquidity and marketability of our securities and our ability to raise capital.** **** Under the SECs rules and interpretive guidance, a company that is currently a shell company, or that was formerly a shell company and has not yet satisfied all of the conditions for reliance on Rule 144(i)(2) of the Securities Act of 1933, as amended (the Securities Act), is subject to significant restrictions on its ability to effect a registered resale of its securities. While Rule 415(a)(1)(i) under the Securities Act generally permits the registration of securities for resale on a continuous or delayed basis by persons other than the issuer without restriction as to the form of registration statement used the SEC staff has consistently taken the position that, where an issuer is a shell company, a purported resale registration statement filed on Form S-1 on behalf of selling stockholders is likely to be recharacterized as an indirect primary offering by the issuer. If so recharacterized, the registered offering cannot be made at prevailing market prices on a continuous basis unless the issuer is eligible to use Form S-3 for primary offerings, which generally requires a public float of at least $75 million eligibility that we do not currently satisfy. In making this determination, the SEC staff applies the multi-factor analysis set forth in Compliance and Disclosure Interpretation 612.09 of the Securities Act Rules C&DIs (the C&DI Analysis), which requires an assessment of, among other factors, whether the selling stockholders are acting as conduits for the issuer and whether the offering is in substance a distribution of securities on behalf of the issuer rather than a genuine secondary transaction. | 6 | | The combined effect of our shell company status under Rule 144(i) and the SEC staffs recharacterization risk under the C&DI Analysis is that, for so long as we remain a shell company and have not satisfied all of the Rule 144(i)(2) conditions, we will not be able to provide a conventional registered resale path whether pursuant to Form S-1 or pursuant to Rule 144 for the holders of our restricted securities, including holders of our Series J Senior Convertible Preferred Stock (the Series J Preferred) and the shares of our common stock issuable upon the conversion thereof. As of March 2026, an aggregate of approximately 11,042,400,000 shares of our common stock were issuable upon conversion of the then-outstanding shares of Series J Preferred, not including dividends accrued as of such date. Holders of our restricted securities who wish to resell those securities during this period may need to rely on other available exemptions from registration, such as Section 4(a)(7) of the Securities Act, offshore resales pursuant to Regulation S, or Rule 144A resales to Qualified Institutional Buyers, each of which is subject to its own material conditions, limitations, and investor eligibility requirements and may significantly constrain the universe of potential purchasers. The unavailability of both a registered resale path and the Rule 144 safe harbor may have a material adverse effect on us and our securityholders. In particular, the inability to register the shares of common stock issuable upon conversion of the Series J Preferred may adversely affect the marketability and liquidity of the Series J Preferred and the underlying common stock, impair our ability to raise additional capital through the issuance of securities that require registration rights as a condition of investment, increase the cost and complexity of any future capital-raising efforts, and require us to offer more favorable economic terms to future investors to compensate for the lack of a registration pathway, resulting in greater dilution to our existing stockholders. **Our shell company status may deter potential acquisition or merger targets from entering into a business combination with us and may complicate or delay the Companys ability to complete any such transaction.** We are currently exploring the possibility of replacing our discontinued businesses and entering into new lines of business, whether by acquisition, merger, or otherwise. Our status as a shell company may make it more difficult to attract suitable acquisition or merger candidates, as many target companies and their shareholders may be unwilling to become a publicly traded entity through a business combination with a shell company due to the regulatory burdens, investor perception, and securities law restrictions associated with shell company status described herein. In addition, a business combination with the Company would not cause us to cease being a shell company absent the filing with the SEC of Form 10 information reflecting our status as a non-shell company, which would trigger an additional one-year waiting period before former shell company restrictions are lifted under Rule 144(i). Target companies and their advisors may view these conditions as overly burdensome and elect to pursue other transaction structures or counterparties. There can be no assurance that we will be able to identify or consummate a business combination with a suitable candidate on acceptable terms, or at all, and our shell company status may be a contributing factor in our failure to do so. **SEC enforcement and regulatory scrutiny may be heightened as a result of our shell company status, which could result in delays in the filing of SEC reports or adverse regulatory consequences.** The SEC has historically devoted significant enforcement and review resources to the regulation of shell companies, including companies that have checked Yes to shell company status on Exchange Act periodic reports. SEC Staff review of Annual Reports or other filings by shell companies may be more frequent or more extensive than for operating companies. In addition, the SEC has broad authority under Exchange Act Section 12(j) to revoke the registration of a security if the issuer has failed to comply with provisions of the Exchange Act, a risk that is heightened in the context of shell companies that have limited resources to maintain reporting compliance. Given our current financial condition including an accumulated deficit of $147,165,109 and a working capital deficit of $7,934,095 as of December 31, 2025 our ability to maintain timely and complete SEC reporting is uncertain. Any SEC inquiry, comment letter, or enforcement action arising from our shell company status or related disclosures could materially divert managements limited attention and financial resources and could have an adverse effect on our ability to consummate a business combination or raise capital. **The Companys shell company status may adversely affect the trading market for, and the price of, our common stock.** Investors and market participants are generally aware of the restrictions and risks associated with shell companies, including the limitations on the use of Rule 144 and the restriction on the use of Form S-1 registration statements described above. This awareness may cause some investors to avoid purchasing shares of our common stock in the secondary market, reduce the overall demand for and liquidity of our common stock, and further depress the already limited trading market that exists for our shares. Our common stock is currently traded on the OTCID Basic Market under the symbol TLSS, and there can be no assurance that the trading market for our shares will improve or be sustained. A reduced investor base, combined with the regulatory restrictions associated with our shell company status, may result in greater volatility in the trading price of our common stock, increased difficulty in selling shares at or above the price at which they were acquired, and a higher risk of loss of the entire value of your investment. **RISKS RELATED TO OWNERSHIP OF OUR COMMON STOCK** **Our stockholders will experience significant dilution as a result of the issuance of shares of our Common Stock upon conversion of shares of Series J Preferred.** Our outstanding shares of Series J Preferred are each initially convertible for 100,000 shares of common stock based on the conversion price of $0.001 per share of common stock and a stated value per share of Series J Preferred of $100. Furthermore, the shares of Series J Preferred accrue dividends on a daily basis at a rate of 10% per annum, which may be paid in cash or shares of common stock, thereby increasing the number of shares of common stock issuable upon conversion. The conversion of some or all of the Series J Preferred Stock will result in the issuance of a substantial number of shares of common stock and, as a result, the percentage ownership and voting power held by our existing stockholders will be significantly reduced and our stockholders will experience significant dilution. As of March 30, 2026, an aggregate of 11,042,400,000 shares of common stock were issuable upon conversion of the then-outstanding Series J Preferred, not including all dividends accrued as of such date. | 7 | | **Our shares of common stock are currently quoted on the OTCID basic market and there is a limited trading market for our common stock.** We were previously quoted on the OTC PINK beginning on August 21, 2022, but were downgraded to the OTC Expert Market on July 17, 2024. As of March 30, 2026, our shares of common stock are trading on the OTCID basic market. There is currently a trading market for our common stock, but our common stock has traded in recent years only on a limited basis. Although there is a trading market for our common stock, there are no assurances that trading activity or volume will be sustained or will increase. **The public market for our common stock may be volatile. This may affect the ability of our investors to sell their shares as well as the price at which they sell their shares.** The market price for shares of our common stock may be significantly affected by factors such as variations in quarterly and yearly operating results, general trends in the transportation and logistics industry, and changes in state or federal regulations affecting us and our industry. Furthermore, in recent years the stock market has experienced extreme price and volume fluctuations that are unrelated or disproportionate to the operating performance of the affected companies. Such broad market fluctuations may adversely affect the market price of our common stock if a market for it develops. **Our common stock price has fluctuated in recent years, and the trading price of our common stock is likely to continue to reflect changes, which could result in losses to investors and litigation.** In addition to changes to market prices based on our results of operations and the factors discussed elsewhere in this Risk Factors section, the market price of and trading volume for our common stock may change for a variety of other reasons, not necessarily related to our actual operating performance. The capital markets have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. These broad market fluctuations may adversely affect the trading price of our common stock. In addition, the average daily trading volume of the securities of small companies can be very low, which may contribute to future volatility. Factors that could cause the market price of our common stock to fluctuate significantly include: | | | the results of operating and financial performance and prospects of other companies in our industry; | | | | | strategic actions by us or our competitors, such as acquisitions or restructurings; | | | | | the publics reaction to our press releases, media coverage and other public announcements, and filings with the SEC; | | | | | lack of securities analyst coverage or speculation in the press or investment community about us or opportunities in the markets in which we compete; | | | | | changes in government policies in the United States; | | | | | changes in earnings estimates or recommendations by securities or research analysts who track our common stock or failure of our actual results of operations to meet those expectations; | | | | | dilution caused by the conversion into common stock of preferred shares and exercise of warrants; | | | | | market and industry perception of our success, or lack thereof, in pursuing our growth strategy; | | | | | changes in accounting standards, policies, guidance, interpretations, or principles; | | | | | any lawsuit involving us or our services; | | | | | arrival and departure of key personnel; | | | | | sales of common stock by us, our investors, or members of our management team; 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 and armed conflicts. | | Any of these factors, as well as broader market and industry factors, may result in large and sudden changes in the trading volume of our common stock and could seriously harm the market price of our common stock, regardless of our operating performance. This may prevent stockholders from being able to sell their shares at or above the price they paid for shares of our common stock, if at all. In addition, following periods of volatility in the market price of a companys securities, stockholders often institute securities class action litigation against that company. Our involvement in any class action suit or other legal proceeding, including the existing lawsuits filed against us and described elsewhere in this report, could divert our senior managements attention, and could adversely affect our business, financial condition, results of operations and prospects. **FINRA sales practice requirements may also limit a stockholders ability to buy and sell our common stock.** The Financial Industry Regulatory Authority (FINRA) has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customers financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares. **We could issue blank check preferred stock without stockholder approval with the effect of diluting then current stockholder interests and impairing their voting rights; and provisions in our charter documents could discourage a takeover that stockholders may consider favorable.** Our Articles of Incorporation, as amended (the Articles of Incorporation) authorizes the issuance of blank check preferred stock with designations, rights and preferences as may be determined from time to time by the Board. The Board is empowered, without stockholder approval, to issue a series of preferred stock with dividend, liquidation, conversion, voting or other rights which could dilute the interest of, or impair the voting power of, our common stockholders. The issuance of a series of preferred stock could be used as a method of discouraging, delaying or preventing a change in control. For example, it would be possible for the Board to issue preferred stock with voting or other rights or preferences that could impede the success of any attempt to change control of our Company. **** **We do not intend to pay cash dividends in the foreseeable future.** We have never paid dividends on our common stock and do not presently intend to pay any dividends in the foreseeable future. We anticipate that any funds available for payment of dividends will be re-invested into our company to further its business strategy. Because we do not anticipate paying dividends in the future, the only opportunity for our stockholders to realize value in our common stock will likely be through a sale of those shares. | 8 | | **If securities or industry analysts do not publish research or reports about our business, or publish negative reports about our business, our common stock price and trading volume could decline.** The trading market for our common stock may depend in part on the research and reports that securities or industry analysts may publish about us or our business, our market and our competitors. We do not have any control over such analysts. If one or more such analysts downgrade or publish a negative opinion of our common stock, the common stock price would likely decline. If analysts do not cover us or do not regularly publish reports on us, we may not be able to attain visibility in the financial markets, which could have a negative impact on our common stock price or trading volume. **You may experience future dilution as a result of issuance of the Shares, issuance of shares of common stock pursuant to any price protection features under the terms of our outstanding securities, future equity offerings by us and other issuances of our common stock or other securities. In addition, the issuance of the Shares and future equity offerings and other issuances of our common stock or other securities may adversely affect our common stock price.** In order to raise additional capital, we may in the future offer additional shares of our Common Stock or other securities convertible into or exchangeable for our common stock at prices that may not be the same as the price per share as prior issuances of common stock. We may not be able to sell shares or other securities in any other offering at a price per share that is equal to or greater than the price per share previously paid by investors, the terms of certain of our outstanding securities may contain price protection features that allow holders of such securities to acquire the same number of shares of common stock at a lower price if certain events occur, and investors purchasing shares or other securities in the future could have rights superior to existing stockholders. The price per share at which we sell additional shares of our common stock or securities convertible into common stock in future transactions may be higher or lower than the prices per share for previous issuances of common stock or securities convertible into common stock paid by certain investors. You will incur dilution upon exercise of any outstanding stock options, warrants or upon the issuance of shares of common stock under our equity incentive programs. In addition, the issuance of the Shares, the issuance of shares of common stock pursuant to our outstanding securities, and any future sales of a substantial number of shares of our common stock in the public market, or the perception that such issuances or sales may occur, could adversely affect the price of our common stock. We cannot predict the effect, if any, that market sales of those shares of common stock or the availability of those shares for sale will have on the market price of our common stock. **** **Substantial future sales of shares of our common stock could cause the market price of our common stock to decline.** We expect that significant additional capital will be needed in the near future to continue our planned operations. Sales of a substantial number of shares of our common stock in the public market, or the perception that these sales might occur, could depress the market price of our common stock and could impair our ability to raise capital through the sale of additional equity securities. We are unable to predict the effect that such sales may have on the prevailing market price of our shares. We have financed our operations, and we expect to continue to finance our operations, acquisitions, if any, and the development of strategic relationships by issuing equity, warrants and/or convertible securities, which could significantly reduce the percentage ownership of our existing stockholders. Further, any additional financing that we secure may require the granting of rights, preferences or privileges senior to, or *pari passu* with, those of common stock. Additionally, we may acquire other technologies or finance strategic alliances by issuing our equity or equity-linked securities, which may result in additional dilution. Any issuances by us of equity securities may be at or below the prevailing market price of our common stock and in any event may have a dilutive impact on your ownership interest, which could cause the market price of our common stock to decline. We may also raise additional funds through the incurrence of debt or the issuance or sale of other securities or instruments senior to our shares of common stock. The holders of any securities or instruments we may issue may have rights superior to the rights of our holders of our common stock. If we experience dilution from issuance of additional securities and we grant superior rights to new securities over common stockholders, it may negatively impact the trading price of our shares of common stock. **Item 1B. Unresolved Staff Comments.** As of the filing of this Annual Report on Form 10-K, there were no unresolved comments from the staff of the SEC. **Item 1C. Cybersecurity.** Given the size of our company and the nature of our operations, we do not believe that we face significant cybersecurity risk. We have not adopted any cybersecurity risk management program or formal processes for assessing cybersecurity risk. We utilize standard commercial software for business operations, which includes basic security features such as password protection and data encryption. Our management is generally responsible for assessing and managing any cybersecurity threats. To date, we have not experienced any material cybersecurity incidents, and there has been no known unauthorized access to our systems. Should any reportable cybersecurity incident arise, our management shall promptly report such matters to the Companys Board of Directors (the Board) for further actions, including regarding the appropriate disclosure in accordance with SEC regulations, mitigation, and other response or actions that the Board deems appropriate to take. **Item 2. Properties.** Our principal executive offices are located in the United States at 110 Chestnut Ridge Road, Montvale, New Jersey 07645. **Item 3. Legal Proceedings** From time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business. Other than discussed below, we are not currently a party to any other legal proceeding that we believe would have a material adverse effect on our business, financial condition, or operating results. **SCS, LLC v. TLSS** On November 17, 2020, a former financial consultant to the Company, SCS, LLC, filed an action against the Company in the Circuit Court of the 15th Judicial Circuit, Palm Beach County, Florida, captioned SCS, LLC v. Transportation and Logistics Systems, Inc. The case was assigned Case No. 50-2020-CA-012684. | 9 | | In this action, SCS alleges that it entered into a renewable six-month consulting agreement with the Company dated September 5, 2019, and that the Company failed to make certain monthly payments due thereunder for the months of October 2019 through March 2020, summing to $42,000. The complaint alleges claims for breach of contract, quantum meruit, unjust enrichment and account stated. In February 2025, the parties agreed to settle all claims in this matter and thereafter executed a Confidential Settlement Agreement and Mutual Release effective on February 13, 2025. On July 18, 2025, the court entered an Order which determined that the settlement of $36,000 in money the Company owed to SCS claimed in exchange for the issuance of 360 shares of Series J Preferred Stock was fair to SCS. On July 21, 2025, the court entered a final order which dismissed the action with prejudice. In July 2025, the Company issued 360 shares of Series J Preferred to SCS, LLC pursuant to the settlement of this action, which reduced accounts payable by $36,000. **Shareholder Derivative Action** On June 25, 2020, the Company was served with a putative stockholder derivative action filed in the Circuit Court of the 15th Judicial Circuit in and for Palm Beach County, Florida (the Court) captioned SCS, LLC, derivatively on behalf of Transportation and Logistics Systems, Inc. v. John Mercadante, Jr., Douglas Cerny, Sebastian Giordano, Ascentaur LLC and Transportation and Logistics Systems, Inc. The action has been assigned Case No. 2020-CA-006581. The plaintiff in this action, SCS, alleges it is a limited liability company formed by a former chief executive officer and director of the Company, Lawrence Sands. The complaint alleges that between April 2019 and June 2020, the immediately prior chairman and chief executive officer of the Company, Mercadante, the former chief development officer of the Company, Cerny, and, since February 2020, the Companys then restructuring consultant who is now chairman and chief executive officer of the Company, Giordano, breached fiduciary duties owed to the Company. Prior to becoming CEO, Giordano rendered his services to the Company through the final named defendant in the action, Ascentaur LLC. The complaint alleges that Mercadante breached duties to the Company by, among other things, requesting, in mid-2019, that certain preferred equity holders, including SCS, convert their preferred shares into Company common stock in order to facilitate an equity offering by the Company and then not consummating that offering. The complaint also alleges that Mercadante and Cerny caused the Company to engage in purportedly wasteful and unnecessary transactions such as taking merchant cash advances (MCA) on disadvantageous terms. The complaint further alleges that Mercadante and Cerny issued themselves over two million shares of common stock without consideration. The complaint seeks unspecified compensatory and punitive damages on behalf of the Company for breach of fiduciary duty, negligent breach of fiduciary duty, constructive fraud, civil conspiracy and the appointment of a receiver or custodian for the Company. Company management tendered the complaint to the Companys directors and officers liability carrier for defense and indemnity purposes, which coverage is subject to a $250,000 self-insured retention. Each of the individual defendants and Ascentaur LLC has advised that they vigorously deny each and every allegation of wrongdoing alleged in the complaint. Among other things, Mercadante asserts that he made every effort to consummate an equity offering in late 2019 and early 2020 and could not do so solely because of the Companys precarious financial condition. Mercadante also asserts that he made clear to SCS and other preferred equity holders, before they converted their shares into common stock, that there was no guarantee the Company would be able to consummate an equity offering in late 2019 or early 2020. In addition, Mercadante and Cerny assert that they received equity in the Company on terms that were entirely fair to the Company and entered into MCA transactions solely because no other financing was available to the Company. By order dated September 15, 2022, the Circuit Judge assigned to this case dismissed the original Complaint in the matter, finding (a) that SCS had failed to adequately allege it has standing and (b) that the complaint fails to adequately allege a cognizable claim. The dismissal was without prejudice, meaning SCS could attempt to replead its claims. On October 5, 2022, SCS filed an Amended Complaint in this action. By order dated December 19, 2022, the Circuit Judge assigned to this case once again dismissed the case, finding (a) that SCS still failed to adequately allege it has standing and (b) that the complaint still fails to adequately allege a cognizable claim. Once again, however, the dismissal was without prejudice. On January 18, 2023, SCS filed a Second Amended Complaint in this action. All defendants once again moved to dismiss the pleading or in the alternative for summary judgment on it in their favor. The Court heard argument on that motion on March 9, 2023. On May 15, 2023, the Court issued a summary order denying the defendants motion to dismiss. On June 1, 2023, all defendants moved for reconsideration of the May 15 order. On November 28, 2023, the Court denied the motion for reconsideration. In February 2025, the parties agreed to settle all claims in this matter and thereafter executed a Confidential Settlement Agreement and Mutual Release effective on February 13, 2025. On February 20, 2025, pursuant to a Stipulation of Dismissal with Prejudice, the Court entered a final order of dismissal with prejudice and dismissed the action with prejudice. **Jose R. Mercedes-Mejia v. Shypdirect LLC, Prime EFS LLC et al.** On August 4, 2020, an action was filed against Shypdirect, Prime EFS and others in the Superior Court of New Jersey for Bergen County captioned Jose R. Mercedes-Mejia v. Shypdirect LLC, Prime EFS LLC et al. The case was assigned docket number BER-L-004534-20. In this action, the plaintiff seeks reimbursement of his medical expenses and damages for personal injuries following an accident with a box truck leased by Shypdirect and subleased to Prime EFS and being driven by a Prime EFS employee, in which the plaintiffs ankle was injured. Plaintiff has thus far transmitted medical bills exceeding $789,000. Prime EFS and Shypdirect demanded their vehicle liability carrier assume the defense of this action. To date, the carrier has not done so, allegedly because, among other reasons, the box truck was not on the list of insured vehicles at the time of the accident. On November 9, 2020, Prime EFS and Shypdirect filed their answer to the complaint in this action and also filed a third-party action against the insurance company in an effort to obtain defense and indemnity for this action. On May 21, 2021, Prime EFS and Shypdirect also filed an action in the Supreme Court, State of New York, Suffolk County (the Suffolk County Action), seeking defense and indemnity for this claim from the insurance brokerage, TCE/Acrisure LLC, which sold the County Hall insurance policy to Shypdirect. On August 19, 2021, the Plaintiff filed a motion for leave to file a First Amended Complaint to name four (4) additional parties as defendants TLSS, Shyp CX, Inc., Shyp FX, Inc. and Cougar Express, Inc. In the claim against TLSS, Plaintiff seeks to pierce the corporate veil and hold TLSS responsible for the alleged liabilities of Prime and/or Shypdirect as the supposed alter ego of these subsidiaries. In the claims against Shyp CX, Inc., Shyp FX, Inc. and Cougar Express, Inc., Plaintiff seeks to hold these entities responsible for the alleged liabilities of Prime and/or Shypdirect on a successor liability theory. | 10 | | On September 16, 2021, each of these entities filed papers in opposition to this motion. On September 24, 2021, the Court granted Plaintiffs motion for leave to amend the complaint, thus adding TLSS, Shyp CX, Inc., Shyp FX, Inc. and Cougar Express, Inc. as Defendants. On October 22, 2021, Acrisure stipulated to consolidate the Suffolk County Action into and with the Bergen County action. On November 22, 2021, all Defendants filed their Answer to the First Amended Complaint. On November 3, 2021, Prime EFS and Shypdirect refiled their Third-Party Complaint against TCI/Acrisure in the Bergen County action. On December 23, 2021, Acrisure filed its Answer to the Third-Party Complaint, denying its material allegations. On March 2, 2022, Plaintiff sought and was granted leave to file a Second Amended Complaint, bringing claims against Prime and Shypdirects vehicle liability carrier, County Hall (for discovery) as well as the producing broker, TCE/Acrisure. Plaintiff also asserted additional alter ego allegations against TLSS. On February 15, 2023, Plaintiff filed a motion for leave to file a Third Amended Complaint in this action, seeking to assert claims against TLSSs former CEO, John Mercadante, also on a pierce the corporate veil theory. On March 9, 2023, TLSS, Prime and Shypdirect opposed the motion for leave to add Mercadante, arguing that any claim against Mercadante would be both futile and time-barred. On March 31, 2023, the Court denied Plaintiffs motion to add Mr. Mercadante as a party. In January and February 2023, numerous depositions were taken in the case, including those of Messrs. Giordano and Mercadante. On September 16, 2024, the court entered an order granting Plaintiffs motion for final judgment by default on liability against Defendants Shypdirect, Prime EFS, Shyp CX, Shyp FX, and Cougar Express. To date, to the best of the Companys knowledge, information and belief, no discovery has been taken in this action which would permit the imposition of alter ego liability on TLSS for the subject accident. To date, to the best of the Companys knowledge, information and belief, no discovery has been taken in this action which would permit the imposition of successor liability on Shyp CX, Inc., Shyp FX, Inc. and/or Cougar Express, Inc. for the subject accident. Under a so-called MCS-90 reimbursement endorsement to the County Hall policy, TLSS believes that Prime and Shypdirect may have up to $750,000 in coverage under a 1980 federal law under which County Hall is require[d] to pay damages for certain claims or suits that are not covered by the policy. (See Endorsement CHI 290 (02/19) to County Hall policy effective May 31, 2019.) All discovery in this case was completed on or before August 31, 2024. There were pending cross-motions for summary judgment filed by Plaintiff, Defendants/Third-Party Plaintiffs Jose A. Mercedes-Mejia, Prime EFS, Shypdirect, LLC, and TLSS, and Defendant/Third-Party Defendant County Hall Insurance. The insurance broker, Acrisure, had also filed a motion on the malpractice claim against it. On November 8, 2024, the court granted Defendant/Third-Party Plaintiff Ryder Truck Rental, Inc.s motion for summary judgment. On December 6, 2024, the parties engaged in a mediation session. While a settlement was not reached on the day the mediation session was held, the parties continued to discuss a potential resolution. On January 31, 2025, Plaintiff and TLSS, Shypdirect, and Prime EFS executed a binding term sheet which settled the matter with no liability on the part of TLSS, Shypdirect or Prime EFS and requires that a Stipulation of Dismissal will be filed with the court which dismisses all claims with prejudice. On February 10, 2025, the trial proceeding scheduled for February 10, 2025, was cancelled. On March 31, 2025, a Stipulation of Dismissal with Prejudice was filed with the Court in which it was stipulated and agreed that the Plaintiffs Complaint and any and all other Crossclaims, Counterclaims, and/or Third-Party Claims are dismissed with prejudice and without costs by and between all parties. **Josh Perez v. Cougar Express, Inc.** An attorney for a former Cougar Express (CE) employee, Josh Perez (Perez), has advised CE that he has filed a charge of discrimination against CE with the U.S. Equal Employment Opportunity Commission (EEOC). Perez allegedly is asserting claims against CE for: gender discrimination under Title VII and the New York State Human Rights Law (NYSHRL); pregnancy/childbirth discrimination under Title VII of the federal Civil Rights Act of 1964, as amended; retaliation under Title VII and NYSHRL; and familial status discrimination under NYSHRL. However, CE has not received a copy, nor any notification, of the filing. Perez was employed by CE as a dock worker beginning on March 8, 2022, and last worked September 27, 2022. He alleges that in or around July 2022, he informed CE that he was expecting a child. Perez has not provided any details regarding the individual(s) with CE he allegedly informed. On September 27, 2022, Perez requested that CE complete the employer section of his New York Paid Family Leave (PFL) paperwork, which CE did. Thereafter, Perez ceased communicating with CE. Further, CE did not receive any confirmation that Perez had in fact filed for PFL or that his PFL was approved. Because CE did not hear from Perez or receive any confirmation concerning his application for or approval of PFL, CE concluded that Perez had resigned. Another worker was hired to fill Perezs former position. Then, on or about December 27, 2022, Perez contacted CE attempting to return to work and was informed that there was no position for him. CE categorically denies Perezs allegations and any purported wrongdoing. Because this matter is apparently pending with the EEOC and CE has neither received a copy of the filing nor any notification of the filing, the Company cannot evaluate the likelihood of an adverse outcome or estimate the Companys liability, if any, in connection with it. | 11 | | **Emerson Swan v. Severance Trucking Co., Inc.** On April 1, 2024, a judgment was entered against Severance Trucking on behalf of Emerson Swan, Inc. (Emerson) in the amount of $96,226, including prejudgment interest, statutory costs and legal fees. Emerson, which was a customer of Severance Trucking, claimed that an employee of Severance Trucking stole $75,209 of Emersons products while under Severance Truckings control. We did not accrue this claim and believe it is not liable since the accusation was made prior to the Severance Trucking acquisition date in January 2023. **Ryder Truck Rental, Inc. v. Severance Trucking Co., Inc.** On April 30, 2024, Severance Trucking received a letter from Ryder Truck Rental, Inc. requesting payment in the amount of $581,507 comprised of outstanding unpaid Truck Lease and Service Agreement charges of $55,136 in open invoices, $399,177 in early termination charges and $134,194 in attorneys fees. As of December 31, 2025 and 2024, such amounts are recorded as a liability of Severance Trucking and included in liabilities of discontinued operations. **Akabas & Sproule v. Transportation and Logistics Systems, Inc.** On March 19, 2025, the Companys former law firm, Akabas & Sproule, filed a lawsuit against the Company in the Supreme Court of the State of New York, New York County, alleging three causes of action: (i) breach of contract; (ii) account stated, and (iii) unjust enrichment/quantum meruit. Akabas & Sproule seeks $86,571 in compensatory damages, $11,027 in interest through February 28, 2025, attorneys fees and costs, taxable costs of suit, and pre-judgment and post-judgment interest, all of which had been accrued as of September 30, 2025. Because the action was recently filed and no discovery has occurred in the case, it is not possible to evaluate the likelihood of a favorable or unfavorable outcome. On July 21, 2025, the Company entered into a Settlement Agreement and Mutual Release (the A&S Settlement Agreement) with Akabas & Sproule seeking $86,571 in compensatory damages, $14,274 in interest and not less than $24,155 in costs of collection, for a total of $125,000 (the A&S Claim) in which all claims were resolved by the issuance of 1,250 shares of Series J Preferred and upon the satisfaction of certain obligations and conditions, the action will be dismissed with prejudice. The A&S Settlement Agreement was on substantially the same form as the Liability Settlement Agreements (see Note 5). In August 2025, the Company issued 1,250 shares of Series J Preferred to Akabas & Sproule and, on August 18, 2025, a Stipulation of Discontinuance with Prejudice was agreed to and filed by the parties with the Court. **Diesel Direct, LLC v. Severance Trucking a/k/a Severance Trucking Co., Inc.** On May 19, 2025, Diesel Direct. LLC filed a lawsuit against Severance Trucking in the Commonwealth of Massachusetts, Superior Court Department of the Trial Court, for Severance Truckings alleged failure to pay for diesel fuel deliveries between October 23, 2023 and February 14, 2024. Diesel Direct alleges four counts against Severance Trucking for breach of contract, breach of implied covenant of good faith and fair dealing, quantum meruit/unjust enrichment, and violation of M.G.L. c. 93A, and seeks judgment for monetary damages in the amount of $58,020.30, plus interest, attorneys fees, and cost of collection, as well as an award of punitive, exemplary, and/or multiple damages to the extent permitted by law. On June 23, 2025, Diesel Direct filed a request for entry of default which was entered on June 26, 2025. On July 15, 2025, Diesel Direct filed a motion for default judgment. As of December 31, 2025, the amount of $57,199 is recorded as a liability of Severance Trucking and included in liabilities of discontinued operations. On October 23, 2025, a damages assessment hearing was held by the Court via video conference, but no decision has been issued to date. **RX Benefits v. TLSS Ops** On October 1, 2025, a former vendor of TLSS Ops filed a complaint against the Company in the Superior Court of New Jersey Law Division, Bergen County, captioned RX Benefits v. TLSS Operations Holding Company, Inc. The case was assigned Case No. BER L-006620-25. In this action, RX Benefits demands payment of contractual amounts due plus legal fees and interest aggregating $149,627. As of December 31, 2025 and 2024, the amounts due of $149,618 and $111,618, respectively, have been accrued and are included liabilities of discontinued operations on the accompany consolidated balance sheets. Other than discussed above, as of the date of this Annual Report, there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of our operations. **Item 4. Mine Safety Disclosures.** Not applicable. | 12 | | **PART II** **Item 5. Market for Registrants Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities.** Our common stock was quoted on the OTC PINK under the symbol TLSS from August 21, 2022 until July 17, 2024, when our common stock was moved to the OTC Experts Market. Since February 26, 2025, our common stock resumed trading on the OTC PINK. Trading in OTC Expert Market stocks can be volatile, sporadic, and risky, as thinly traded stocks tend to move more rapidly in price than more liquid securities. Such trading may also depress the market price of our common stock and make it difficult for our stockholders to resell their common stock. The following table reflects the high and low bid price for our common stock for the period indicated. The bid information for our common stock can be obtained from the OTC Markets Group, Inc. and reflects inter-dealer prices, without retail mark-up, markdown, or commission, and may not necessarily represent actual transactions. | | | Quarter | | High | | | Low | | | | Year ended December 31, 2025 | | First | | $ | 0.0002 | | | $ | 0.0000 | | | | | | Second | | $ | 0.0004 | | | $ | 0.0001 | | | | | | Third | | $ | 0.0002 | | | $ | 0.0000 | | | | | | Fourth | | $ | 0.0002 | | | $ | 0.0000 | | | | | | Quarter | | High | | | Low | | | | Year ended December 31, 2024 | | First | | $ | 0.0009 | | | $ | 0.0001 | | | | | | Second | | $ | 0.0002 | | | $ | 0.0000 | | | | | | Third | | $ | 0.0002 | | | $ | 0.0000 | | | | | | Fourth | | $ | 0.0001 | | | $ | 0.0000 | | | **Holders** As of March 27, 2026, there were 100 record holders of our common stock. **Dividends** We have not previously declared or paid any dividends on our common stock and do not anticipate declaring any dividends in the foreseeable future. The payment of dividends on our common stock is within the discretion of our board of directors. We intend to retain any earnings for use in our operations and the expansion of our business. Payment of dividends in the future will depend on our future earnings, future capital needs and our operating and financial condition, among other factors that our board of directors may deem relevant. We are not under any contractual restriction as to our present or future ability to pay dividends. **Securities Authorized for Issuance Under Equity Compensation Plans** The Company does not currently have any equity compensation plans. **Recent Sales of Unregistered Securities** On October 15, 2025, the Company entered into settlement agreements (the Board Settlement Agreements) with certain directors of the Company pursuant to which the directors settled an aggregate of $374,491 in outstanding liabilities, in exchange for the issuance of an aggregate of 3,785 shares of Series J Preferred. On November 12, 2025, the Company entered into exchange agreements (the November Exchange Agreements) with certain holders (the November Exchange Holders) of outstanding warrants to purchase up to an aggregate of 235,714,285 shares of common stock, pursuant to which the November Exchange Holders agreed to cancel, and we cancelled effective as of such date, their respective outstanding warrants in exchange for the issuance of an aggregate of 209 shares of Series J Preferred. On December 15, 2025, the Company entered into a settlement agreement (the CEO Settlement Agreement) with Sebastian Giordano, with respect to certain outstanding liabilities (the Outstanding Liabilities). Pursuant to the CEO Settlement Agreement, Mr. Giordano agreed to settle an aggregate of $1,400,712 in Outstanding Liabilities in exchange for the issuance of an aggregate of 10,007 shares of the Companys Series J Preferred Stock. **Purchases of Equity Securities by the Issuer and Affiliated Purchasers** None. **Item 6. Selected Financial Data.** Not applicable. **Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations.** **Overview** TLSS is a publicly-traded holding company whose common stock had been quoted on the OTC PINK since August 21, 2022, but was removed from the OTC PINK and listed on the OTC Expert Market on July 17, 2024. As of March 30, 2026, our shares of common stock are trading on the OTCID basic markets. The Company ceased all remaining operations as of mid-February 2024. Prior to that, the Company and its Subsidiaries provided a full suite of asset-based logistics and transportation services, specializing in ecommerce fulfillment, last mile deliveries, two-person home delivery, mid-mile, and long-haul services. An asset-based delivery company, as compared to a non-asset-based delivery company, owns the majority of its transportation equipment, and employs the majority of its drivers. The Company and its Subsidiaries operated several warehouse locations located in New York, New Jersey, Connecticut, and Massachusetts. On February 27, 2024, Cougar Express, filed a Chapter 7 bankruptcy petition in the State of New York under the United States Bankruptcy Code. The Companys other subsidiaries have all ceased operations since mid-February 2024 and have not filed bankruptcy. Subsequent to the cessation of all of the Companys revenue generating operations in February 2024 and through the date of this Annual Report, the Company continues to remain insolvent. The Company obtained financing to enable it to complete the preparation and review of the annual and interim financial statements through September 30, 2025 and file this Annual Report; however, the Company will require additional financing to fund the necessary costs related to the preparation and filing of one or more of the additional periodic reports due with respect to the 2026 calendar year. Between May 2025 and November 12, 2025, we entered into exchange agreements (the Series J Exchange Agreements) with certain then current and former holders (the Exchange Holders) of our Series E Convertible Preferred Stock (the Series E Preferred), Series G Convertible Preferred Stock (the Series G Preferred) and warrants to purchase shares of our Common Stock (the Exchanged Warrants). Pursuant to the Series J Exchange Agreements, (i) the Exchange Holders exchanged an aggregate of 21,418 shares of Series E Preferred and accrued dividends of $192,776, and exchanged an aggregate of 406,500 shares of Series G Preferred and accrued dividends of $925,047, and (ii) we cancelled warrants to purchase up to an aggregate of 864,357,146 shares of Common Stock all in exchange for the issuance of an aggregate of 54,975 shares of the Companys Series J Senior Convertible Preferred Stock, par value $0.001 per share (the Series J Preferred). Also, between May 2025 and September 30, 2025, we entered into settlement agreements (the Series J Settlement Agreements) with holders of our outstanding liabilities (the 2025 Creditors), pursuant to which, the 2025 Creditors agreed to settle an aggregate of $3,688,149 in outstanding liabilities and accrued interest in exchange for an aggregate of 36,882 shares of Series J Preferred. | 13 | | On October 15, 2025, we entered into settlement agreements (the Board Settlement Agreements) with certain directors of the Company pursuant to which the directors settled an aggregate of $374,491 in outstanding liabilities, in exchange for the issuance of an aggregate of 3,785 shares of Series J Preferred. $337,042, which was netted against additional paid-in capital and accordingly, no gain or loss was recognized on these settlements. On December 15, 2025, we entered into a settlement agreement (the CEO Settlement Agreement) with Sebastian Giordano, with respect to certain outstanding liabilities (the Outstanding Liabilities). Pursuant to the CEO Settlement Agreement, Mr. Giordano agreed to settle an aggregate of $1,400,712 in Outstanding Liabilities in exchange for the issuance of an aggregate of 10,007 shares of the Companys Series J Preferred Stock. In addition, we are also negotiating possible further restructuring of our remaining existing debts and obligations, as well as assessing the possibility of replacing our discontinued businesses and/or entering into new line(s) of business, whether by acquisition or otherwise. However, there can be no assurance that we will, in fact, be able to replace our former business and/or enter into new line(s) of business, or to do so profitably. The following discussion highlights the results of our operations and the principal factors that have affected the Companys consolidated financial condition as well as its liquidity and capital resources for the periods described and provides information that management believes is relevant for an assessment and understanding of the consolidated financial condition and results of operations presented herein. The following discussion and analysis are based on the unaudited consolidated financial statements contained in this Annual Report, which have been prepared in accordance with GAAP. You should read the discussion and analysis together with such unaudited consolidated financial statements and the related notes thereto. **Critical Accounting Policies and Estimates** The methods, estimates, and judgments that we use in applying our accounting policies have a significant impact on the results that we report in our consolidated financial statements. Some of our accounting policies require us to make difficult and subjective judgments, often as a result of the need to make estimates regarding matters that are inherently uncertain. Significant estimates included in the accompanying consolidated financial statements and footnotes include the valuation of accounts receivable, the useful life of property and equipment, the valuation of intangible assets, the valuation of assets acquired and liabilities assumed in a business combination, the valuation of right of use assets and related liabilities, assumptions used in assessing impairment of long-lived assets, estimates of current and deferred income taxes and deferred tax valuation allowances, the fair value of non-cash equity transactions, the valuation of assets and liabilities of discontinued operations, and the value of claims against the Company. Of the above significant estimates, we do not consider any to be critical given the discontinued operations presentation. Management believes the following critical accounting policies affect our more significant judgments and estimates used in the preparation of the consolidated financial statements. **Discontinued Operations** The Company has classified the related assets and liabilities associated with our logistics and transportation services business as discontinued operations in our consolidated balance sheets and the results of our logistics and transportation services business has been presented as discontinued operations in our consolidated statements of operations for all periods presented as the discontinuation of our business had a major effect on our operations and financial results. **RESULTS OF OPERATIONS** Our consolidated financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue our operation. Our results of operations reflect our continuing operations and reflect losses from discontinued operations related to the discontinuation of our logistics businesses. All financial information has been restated to reflect our discontinued operations for all periods presented. **For the year ended December 31, 2025 compared with the year ended December 31, 2024** The following table sets forth our revenues, expenses and net loss for the years ended December 31, 2025 and 2024. | | | For the Year Ended December 31, | | | | | | 2025 | | | 2024 | | | | Revenues | | $ | - | | | $ | - | | | | Operating expenses | | | 1,407,876 | | | | 1,873,250 | | | | Loss from operations | | | (1,407,876 | ) | | | (1,873,250 | ) | | | Other income (expenses), net | | | 1,849,519 | | | | (232,711 | ) | | | Income (loss) from continuing operations | | | 441,643 | | | | (2,105,961 | ) | | | Loss from discontinued operations | | | (407,810 | ) | | | (1,718,509 | ) | | | Net income (loss) | | | 33,833 | | | | (3,824,470 | ) | | | Deemed contribution on exchange of equity instruments | | | 800,380 | | | | - | | | | Deemed and accrued dividends | | | (730,906 | ) | | | (310,268 | ) | | | Net loss attributable to common stockholders | | $ | 103,307 | | | $ | (4,134,738 | ) | | | 14 | | **Results of Operations** **Revenue** For the years ended December 31, 2025 and 2024, total revenue is reflected as $0. During the year ended December 31, 2025, we generated no revenues. During the year ended December 31, 2024, total revenues were reflected as $0 as all activities of the Subsidiaries were reclassified as discontinued operations on our consolidated financial statements. **Operating Expenses** For the year ended December 31, 2025, total operating expenses amounted to $1,407,876 compared to $1,873,250 for the year ended December 31, 2024, a decrease of $465,374, or 24.8%, as reflected in the accompanying chart and described more fully below. For the years ended December 31, 2025 and 2024, operating expenses consisted of the following: | | | For the Year Ended December 31, | | | | | | 2025 | | | 2024 | | | | Compensation and related benefits | | $ | 673,026 | | | $ | 1,153,076 | | | | Legal and professional fees | | | 714,873 | | | | 590,695 | | | | General and administrative expenses | | | 19,977 | | | | 129,479 | | | | Total Operating Expenses | | $ | 1,407,876 | | | $ | 1,873,250 | | | **Compensation and related benefits** For the year ended December 31, 2025, compensation and related benefits amounted to $673,026 as compared to $1,153,076 for the year ended December 31, 2024, a decrease of $480,050, or 41.6%. During the year ended December 31, 2025, the overall decrease in compensation and related benefits as compared to the year ended December 31, 2024 was primarily attributable to a decrease in compensation paid to significant employees, a decrease in administrative staff due to the discontinuation of our trucking businesses in February 2024 aggregating $8,101, and a decrease in stock-based compensation of $71,949. Additionally, during the year ended December 31, 2024, we recorded a $400,000 severance expense as compared to $0 during the year ended December 31, 2025. **Legal and professional fees** For the year ended December 31, 2025, legal and professional fees were $714,873 as compared to $590,695 for the year ended December 31, 2024, an increase of $124,178, or 21.0%, which was primarily attributable to an increase in legal fees of $95,270, an increase in stock-based professional fees of $7,750, an increase in accounting and auditing fees of $13,221 and a net increase in other professional fees of $7,937. **General and administrative expenses** General and administrative expenses include insurance expense and other general and administrative expenses. For the year ended December 31, 2025, general and administrative expenses were $19,977 as compared to $129,479 for the year ended December 31, 2024, a decrease of $109,502, or 84.6%. The decrease was primarily attributable to a decrease in insurance expense related to directors and officers insurance and a net decrease in other general and administrative expenses. **Loss from operations** For the year ended December 31, 2025, loss from operations amounted to $1,407,876 as compared to $1,873,250 for the year ended December 31, 2024, a decrease of $465,374, or 24.8%, primarily due to: (i) decreases in compensation and other benefits of $480,050; and (ii) a decrease in general and administrative expenses of $109,502, offset by an increase in legal and professional fees of expenses of $124,178, as discussed above. **Other (expenses) income, net** Total other income (expenses) includes interest expense and gain on debt extinguishment. For the years ended December 31, 2025 and 2024, other income (expenses) consisted of the following: | | | For the Year Ended December 31, | | | | | | 2025 | | | 2024 | | | | Interest expense | | $ | (32,849 | ) | | $ | (11,453 | ) | | | Interest expense related parties | | | (106,563 | ) | | | (221,258 | ) | | | Gain on debt extinguishment, net | | | 1,988,931 | | | | - | | | | Total Other Income (Expenses), net | | $ | 1,849,519 | | | $ | (232,711 | ) | | For the year ended December 31, 2025 and 2024, aggregate interest expense was $139,412 and $232,711, respectively, a decrease of $93,299, or 40.1%. The decrease in interest expense was primarily attributable to an overall decrease in related party and third-party notes payable, as all notes payable and related accrued interest was converted to Series J Preferred Stock. During the year ended December 31, 2025, we recognized a gain on debt extinguishment of $1,988,931. We did not recognize any gain on debt extinguishment during the year ended December 31, 2024. | 15 | | **Loss from discontinued operations** In February 2024, we ceased operations of all logistic and transportation services subsidiaries, and on February 27, 2024, Cougar Express filed a Chapter 7 bankruptcy petition in the State of New York under the United States Bankruptcy Code. Accordingly, the financial position and results of operations of all our Subsidiaries are reflected as discontinued operations for all periods presented. The following table sets forth our revenues, expenses and net loss for the years ended December 31, 2025 and 2024 related to discontinued operations. | | | For the Year Ended December 31, | | | | | | 2025 | | | 2024 | | | | Revenues | | $ | - | | | $ | 1,371,993 | | | | Cost of revenues | | | - | | | | 1,452,171 | | | | Gross profit (loss) | | | - | | | | (80,178 | ) | | | Operating expenses | | | (33,257 | ) | | | (1,300,570 | ) | | | Other expenses, net | | | (374,553 | ) | | | (337,761 | ) | | | Loss from discontinued operations | | $ | (407,810 | ) | | $ | (1,718,509 | ) | | During the year ended December 31, 2024, operating expenses of discontinued operations included an impairment loss of $555,628 from the write down of property and equipment. **Net income (loss)** Due to factors discussed above, for the year ended December 31, 2025 and 2024, net income (loss) amounted to $33,833 and $(3,824,470), respectively. For the year ended December 31, 2025, net income attributable to common stockholders, which included dividends accrued on shares of the Companys Series E Convertible Preferred Stock (the Series E Preferred), shares of the Companys Series G Convertible Preferred Stock (the Series G Preferred), and shares of the Companys Series J Convertible Preferred Stock (the Series J Preferred) of $730,906, and the recording of a deemed contribution on exchange of equity instruments of $800,380, amounted to $103,307, or $0.00 per basic and diluted common share. For the year ended December 31, 2024, net loss attributable to common stockholders, which included dividends accrued on shares of the Companys Series E Convertible Preferred Stock (the Series E Preferred) and shares of the Companys Series G Convertible Preferred Stock (the Series G Preferred) of $310,268, amounted to $4,134,738, or $(0.00) per basic and diluted common share. **LIQUIDITY AND CAPITAL RESOURCES** On December 31, 2025, and 2024 we had a cash balance of $15,835 and $177,257, respectively. Our working capital deficit was $7,934,095 and $11,892,017 on December 31, 2025 and 2024, respectively. We reported a net decrease in cash for the year ended December 31, 2025 of $161,422 primarily as a result of cash used in operations of $486,422, which was offset by net cash proceeds received from notes payable of $325,000. As of March 27, 2026, the Company had $11,246 in cash, consisting of: (i) $10,925 remaining from the issuance of unsecured promissory notes and (ii) $321 related to Severance Trucking. Although we had historically raised capital from sales of shares of common stock, the sale of the Series E Preferred and the Series G Preferred, and from the issuance of convertible promissory notes and notes payable, the Company, in mid-February 2024, was unable to raise additional capital or secure additional lending to meet its debt and liability obligations and, as a result, the Company had to cease its remaining operations. Our consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying consolidated financial statements, we had net income (loss) of $33,833 and $(3,824,470) for the years ended December 31, 2025 and 2024, respectively. The net cash used in operations was $486,422 and $386,699 for the years ended December 31, 2025 and 2024, respectively. Additionally, we had an accumulated deficit and working capital deficit of $147,165,109 and $7,934,095 on December 31, 2025, respectively. These factors, in addition to the cessation of all operations, raise substantial doubt about our ability to continue as a going concern for a period of twelve months from the date of this Annual Report. Management cannot provide assurance that we will remain current in our SEC filings, successfully restructure our debts and liabilities, find a new business opportunity, achieve profitable operations, become cash flow positive or raise additional debt and/or equity capital. We are seeking to raise capital through additional debt and/or equity financing to fund the Company in the future and to pay our debt obligations. Although we have historically raised capital from sales of preferred shares, and from the issuance of promissory notes and convertible promissory notes, there is no assurance that it will be able to continue to do so. If the Company is unable to raise additional capital or secure additional lending in the near future, management expects that the Company would need to file bankruptcy. Our consolidated financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern. **Cash Flows** *Operating activities* Net cash flows used in operating activities for the year ended December 31, 2025, amounted to $486,422. During the year ended December 31, 2025, net cash used in operating activities was primarily attributable to net income of $33,833, adjusted for non-cash gains on debt extinguishment of $1,988,931 and stock-based compensation and professional fees of $47,750, and changes in operating assets and liabilities as a result of increases in accounts payable and accrued expenses of $831,158, accrued expenses related parties of $106,562, and an increase in accrued compensation and related benefits of $483,027. Net cash flows used in operating activities for the year ended December 31, 2024 amounted to $386,699. During the year ended December 31, 2024, net cash used in operating activities was primarily attributable to a net loss of $3,824,470, adjusted for the add back (reduction) of non-cash items such as depreciation and amortization expense of $39,018, non-cash impairment loss from discontinued operations of $555,628, and non-cash stock based compensation of $111,949, which were offset by credit loss recovery of $3,937 and non-cash gain from the deconsolidation of subsidiaries of $158,347 and changes in operating assets and liabilities as a result of decreases in accounts payable and accrued expenses of $963,079, accrued compensation and related benefits of $831,099, accounts receivable of $636,647, prepaid expenses and other current assets of $235,222, accrued expenses related parties of $221,258, and security deposit of $6,155. | 16 | | *Investing activities* Net cash used in investing activities for the year ended December 31, 2025 and 2024 amounted to $0. *Financing activities* For the year ended December 31, 2025, net cash provided by financing activities totaled $325,000. During the year ended December 31, 2025, we received cash proceeds of $325,000 from notes payable from unrelated third parties. For the year ended December 31, 2024, net cash provided by financing activities totaled $345,804. During the year ended December 31, 2024, we received cash proceeds of $391,838 from notes payable from related parties and $300,000 from notes payable from unrelated third parties, which were offset by the repayment of notes payable of $346,034. **Contractual Obligations** We have certain fixed contractual obligations and commitments that include future estimated payments. Changes in our business needs, cancellation provisions, changing interest rates, and other factors may result in actual payments differing from the estimates. We cannot provide certainty regarding the timing and amounts of payments. **Effects of Inflation** We do not believe that inflation has had a material impact on our business, revenues, or operating results during the periods presented. **Recently Enacted Accounting Standards** For a description of accounting changes and recent accounting standards, including the expected dates of adoption and estimated effects, if any, on our consolidated financial statements, see Note 2: Recent Accounting Pronouncements in the consolidated financial statements filed with this Annual Report. **Item 7A. Quantitative and Qualitative Disclosure About Market Risk.** Not Applicable | 17 | | **Item 8. Financial Statements and Supplementary Data.** **TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES** **INDEX TO CONSOLIDATED FINANCIAL STATEMENTS** **DECEMBER 31, 2025 AND 2024** | | Page | | | Report of Independent Registered Public Accounting Firm (PCAOB ID No. 106) | F-2 | | | | | | | Consolidated Financial Statements: | | | | | | | | Consolidated Balance Sheets as of December 31, 2025 and 2024 | F-3 | | | | | | | Consolidated Statements of Operations For the Years Ended December 31, 2025 and 2024 | F-4 | | | | | | | Consolidated Statements of Changes in Shareholders Deficit For the Years Ended December 31, 2025 and 2024 | F-5 | | | | | | | Consolidated Statements of Cash Flows For the Years Ended December 31, 2025 and 2024 | F-6 | | | | | | | Notes to Consolidated Financial Statements | F-7 to F-30 | | | F-1 | | **** ***** **Report of Independent Registered Public Accounting Firm** To the Shareholders and the Board of Directors of: Transportation and Logistics Systems, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Transportation and Logistics Systems, Inc. and Subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, changes in shareholders deficit and cash flows for each of the two years in the period ended December 31, 2025, and the related notes (collectively referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2025 and 2024, and the consolidated results of its operations and its cash flows for each of the two years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company had cash used in operations of $486,422 for the year ended December 31, 2025 and no revenue or continuing operations in fiscal 2025. Additionally, the Company had an accumulated deficit and working capital deficit of $147,165,109 and $7,934,095, respectively, on December 31, 2025. These factors raise substantial doubt about the Companys ability to continue as a going concern. Managements plans in regard to these matters are described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These consolidated financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on the Companys consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters. /s/ Salberg & Company, P.A. SALBERG & COMPANY, P.A. We have served as the Companys auditor since 2017.* Boca Raton, Florida March 30, 2026 2295 NW Corporate Blvd., Suite 240 Boca Raton, FL 33431-7328 Phone: (561) 995-8270 Toll Free: (866) CPA-8500 Fax: (561) 995-1920 www.salbergco.com info@salbergco.com *Member National Association of Certified Valuation Analysts Registered with the PCAOB* *Member CPAConnect with Affiliated Offices Worldwide Member AICPA Center for Audit Quality* | F-2 | | **TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES** **CONSOLIDATED BALANCE SHEETS** | | | December 31, | | | December 31, | | | | | | 2025 | | | 2024 | | | | | | | | | | | | | ASSETS | | | | | | | | | | | CURRENT ASSETS: | | | | | | | | | | | Cash | | $ | 15,835 | | | $ | 177,257 | | | | Prepaid expenses and other current assets | | | 1,500 | | | | 1,260 | | | | Assets of discontinued operations | | | - | | | | 419 | | | | | | | | | | | | | | | Total Current Assets | | | 17,335 | | | | 178,936 | | | | | | | | | | | | | | | TOTAL ASSETS | | $ | 17,335 | | | $ | 178,936 | | | | | | | | | | | | | | | LIABILITIES AND SHAREHOLDERS DEFICIT | | | | | | | | | | | | | | | | | | | | | | CURRENT LIABILITIES: | | | | | | | | | | | Notes payable | | $ | - | | | $ | 300,000 | | | | Notes payable - related parties | | | - | | | | 1,547,838 | | | | Notes payable | | | - | | | | 1,547,838 | | | | Accounts payable | | | 335,640 | | | | 1,167,795 | | | | Accrued expenses | | | 666,575 | | | | 1,188,485 | | | | Accrued expenses - related parties | | | - | | | | 290,133 | | | | Accrued expenses | | | - | | | | 290,133 | | | | Accrued compensation and related benefits | | | - | | | | 906,099 | | | | Liabilities of discontinued operations | | | 6,949,215 | | | | 6,670,603 | | | | | | | | | | | | | | | Total Current Liabilities | | | 7,951,430 | | | | 12,070,953 | | | | | | | | | | | | | | | Total Liabilities | | | 7,951,430 | | | | 12,070,953 | | | | | | | | | | | | | | | Series J convertible preferred stock, par value $0.001 per share; 1,000,000 shares designated; 110,424 and 0 shares issued and outstanding at December 31, 2025 and 2024, respectively ($12,146,640 redemption value as of December 31, 2025) | | | 12,146,640 | | | | - | | | | | | | | | | | | | | | Commitments and Contingencies (See Note 6) | | | - | | | | - | | | | | | | | | | | | | | | 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; No shares issued and outstanding at December 31, 2025 and 2024 (No per share liquidation value) | | | - | | | | - | | | | Series D convertible preferred stock, par value $0.001 per share; 1,250,000 shares designated; No shares issued and outstanding at December 31, 2025 and 2024 ($6.00 per share liquidation value) | | | - | | | | - | | | | Series E convertible preferred stock, par value $0.001 per share; 562,250 shares designated; 0 and 21,418 shares issued and outstanding at December 31, 2025 and 2024, respectively ($13.34 per share liquidation value) | | | - | | | | 21 | | | | Series G convertible preferred stock, par value $0.001 per share; 1,000,000 shares designated; 0 and 406,500 shares issued and outstanding at December 31, 2025 and 2024, respectively ($10.00 per share liquidation value) | | | - | | | | 407 | | | | Series H convertible preferred stock, par value $0.001 per share; 35,000 shares designated; 32,374 shares issued and outstanding at December 31, 2025 and 2024 (No per share liquidation value) | | | 32 | | | | 32 | | | | Preferred stock, value | | | 32 | | | | 32 | | | | Common stock, par value $0.001 per share; 50,000,000,000 shares authorized; 5,889,437,474 and 5,889,437,474 shares issued and outstanding at December 31, 2025 and 2024, respectively | | | 5,889,437 | | | | 5,889,437 | | | | Additional paid-in capital | | | 121,194,905 | | | | 128,686,122 | | | | Accumulated deficit | | | (147,165,109 | ) | | | (146,468,036 | ) | | | | | | | | | | | | | | Total Shareholders Deficit | | | (20,080,735 | ) | | | (11,892,017 | ) | | | | | | | | | | | | | | Total Liabilities and Shareholders Deficit | | $ | 17,335 | | | $ | 178,936 | | | See accompanying notes to consolidated financial statements. | F-3 | | **TRANSPORTATION AND LOGISTICS SYSTEMS INC. AND SUBSIDIARIES** **CONSOLIDATED STATEMENTS OF OPERATIONS** | | | 2025 | | | 2024 | | | | | | For the Year Ended | | | | | | December 31, | | | | | | 2025 | | | 2024 | | | | | | | | | | | | | REVENUES | | $ | - | | | $ | - | | | | | | | | | | | | | | | OPERATING EXPENSES: | | | | | | | | | | | Compensation and related benefits | | | 673,026 | | | | 1,153,076 | | | | Legal and professional fees | | | 714,873 | | | | 590,695 | | | | General and administrative expenses | | | 19,977 | | | | 129,479 | | | | | | | | | | | | | | | Total Operating Expenses | | | 1,407,876 | | | | 1,873,250 | | | | | | | | | | | | | | | LOSS FROM OPERATIONS | | | (1,407,876 | ) | | | (1,873,250 | ) | | | | | | | | | | | | | | OTHER INCOME (EXPENSES): | | | | | | | | | | | Gain on debt extinguishment, net | | | 1,988,931 | | | | - | | | | Interest expense | | | (32,849 | ) | | | (11,453 | ) | | | Interest expense - related parties | | | (106,563 | ) | | | (221,258 | ) | | | Interest expense | | | (106,563 | ) | | | (221,258 | ) | | | | | | | | | | | | | | Total Other Income (Expenses), net | | | 1,849,519 | | | | (232,711 | ) | | | | | | | | | | | | | | INCOME (LOSS) BEFORE INCOME TAXES | | | 441,643 | | | | (2,105,961 | ) | | | | | | | | | | | | | | Provision for income taxes | | | - | | | | - | | | | | | | | | | | | | | | INCOME (LOSS) FROM CONTINUING OPERATIONS | | | 441,643 | | | | (2,105,961 | ) | | | | | | | | | | | | | | DISCONTINUED OPERATIONS: | | | | | | | | | | | Loss from discontinued operations, net of tax | | | (407,810 | ) | | | (1,718,509 | ) | | | | | | | | | | | | | | LOSS FROM DISCONTINUED OPERATIONS | | | (407,810 | ) | | | (1,718,509 | ) | | | | | | | | | | | | | | NET INCOME (LOSS) | | | 33,833 | | | | (3,824,470 | ) | | | | | | | | | | | | | | Deemed contribution on exchange of equity instruments | | | 800,380 | | | | - | | | | Accrued dividends | | | (730,906 | ) | | | (310,268 | ) | | | | | | | | | | | | | | NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS | | $ | 103,307 | | | $ | (4,134,738 | ) | | | | | | | | | | | | | | NET INCOME (LOSS) PER COMMON SHARE - BASIC AND DILUTED | | | | | | | | | | | Net income (loss) per share from continuing operations -basic and diluted | | $ | 0.00 | | | $ | (0.00 | ) | | | Net loss per share from discontinued operations basic and diluted | | | (0.00 | ) | | | (0.00 | ) | | | Net income (loss) per share - basic and diluted | | $ | 0.00 | | | $ | (0.00 | ) | | | | | | | | | | | | | | WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | | | | | | | | | | | Basic | | | 5,889,437,474 | | | | 5,531,600,368 | | | | Diluted | | | 5,889,437,474 | | | | 5,531,600,368 | | | See accompanying notes to consolidated financial statements. | F-4 | | **TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES** **CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS DEFICIT** **FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024** | | | Shares | | | Amount | | | Shares | | | Amount | | | Shares | | | Amount | | | Shares | | | Amount | | | Capital | | | Deficit | | | Deficit | | | | | | Preferred Stock Series E | | | Preferred Stock Series G | | | Preferred Stock Series H | | | Common Stock | | | Additional Paid-in | | | Accumulated | | | Total Shareholders | | | | | | Shares | | | Amount | | | Shares | | | Amount | | | Shares | | | Amount | | | Shares | | | Amount | | | Capital | | | Deficit | | | Deficit | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Balance, December 31, 2023 | | | 21,418 | | | $ | 21 | | | | 475,500 | | | $ | 476 | | | | 32,374 | | | $ | 32 | | | | 4,481,102,346 | | | $ | 4,481,102 | | | $ | 129,854,231 | | | $ | (142,333,298 | ) | | $ | (7,997,436 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Accretion of stock-based compensation | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 111,949 | | | | - | | | | 111,949 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Common stock issued for conversion of Series G preferred shares | | | - | | | | - | | | | (69,000 | ) | | | (69 | ) | | | - | | | | - | | | | 1,408,335,128 | | | | 1,408,335 | | | | (1,280,058 | ) | | | - | | | | 128,208 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Dividends accrued | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | (310,268 | ) | | | (310,268 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Net loss | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | (3,824,470 | ) | | | (3,824,470 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Balance, December 31, 2024 | | | 21,418 | | | | 21 | | | | 406,500 | | | | 407 | | | | 32,374 | | | | 32 | | | | 5,889,437,474 | | | | 5,889,437 | | | | 128,686,122 | | | | (146,468,036 | ) | | | (11,892,017 | ) | | | Balance | | | 21,418 | | | | 21 | | | | 406,500 | | | | 407 | | | | 32,374 | | | | 32 | | | | 5,889,437,474 | | | | 5,889,437 | | | | 128,686,122 | | | | (146,468,036 | ) | | | (11,892,017 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Conversion of Series E and Series G preferred shares and accrued dividends and cancellation of warrants into Series J preferred shares | | | (21,418 | ) | | | (21 | ) | | | (406,500 | ) | | | (407 | ) | | | - | | | | - | | | | - | | | | - | | | | (4,358,364 | ) | | | - | | | | (4,358,792 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Series J redemption premium recorded | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | (1,104,240 | ) | | | - | | | | (1,104,240 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Gain on extinguishment of notes payable and accrued interest converted to Series J preferred shares | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | (587,080 | ) | | | - | | | | (587,080 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Gain on extinguishment of accounts payable and accrued expenses converted to Series J preferred shares | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | (982,210 | ) | | | - | | | | (982,210 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Gain on extinguishment of accrued dividends converted to Series J preferred shares | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | (429,585 | ) | | | - | | | | (429,585 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Contribution for forgiveness of accrued expenses - related party | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 400,012 | | | | - | | | | 400,012 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Issuance if Series J preferred shares for compensation and professional fees | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | (429,750 | ) | | | - | | | | (429,750 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Dividends accrued | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | (730,906 | ) | | | (730,906 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Net loss | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 33,833 | | | | 33,833 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Balance, December 31, 2025 | | | - | | | $ | - | | | | - | | | $ | - | | | | 32,374 | | | $ | 32 | | | | 5,889,437,474 | | | $ | 5,889,437 | | | $ | 121,194,905 | | | $ | (147,165,109 | ) | | $ | (20,080,735 | ) | | | Balance | | | - | | | $ | - | | | | - | | | $ | - | | | | 32,374 | | | $ | 32 | | | | 5,889,437,474 | | | $ | 5,889,437 | | | $ | 121,194,905 | | | $ | (147,165,109 | ) | | $ | (20,080,735 | ) | | See accompanying notes to consolidated financial statements. | F-5 | | **TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES** **CONSOLIDATED STATEMENTS OF CASH FLOWS** | | | 2025 | | | 2024 | | | | | | For the Year Ended | | | | | | December 31, | | | | | | 2025 | | | 2024 | | | | CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | | | | | Net income (loss) | | $ | 33,833 | | | $ | (3,824,470 | ) | | | Adjustments to reconcile net income (loss) to net cash used in operating activities: | | | | | | | | | | | Depreciation and amortization expense - discontinued operations | | | - | | | | 39,018 | | | | Stock-based compensation | | | 40,000 | | | | 111,949 | | | | Stock-based professional fees | | | 7,750 | | | | - | | | | Impairment loss - discontinued operations | | | - | | | | 555,628 | | | | Gain on deconsolidation of subsidiary - discontinued operations | | | - | | | | (158,347 | ) | | | Allowance for (recovery from) credit losses - discontinued operations | | | 419 | | | | (3,937 | ) | | | Gain on debt extinguishment | | | (1,988,931 | ) | | | - | | | | Change in operating assets and liabilities: | | | | | | | | | | | Accounts receivable | | | - | | | | 636,647 | | | | Prepaid expenses and other current assets | | | (240 | ) | | | 235,222 | | | | Security deposit | | | - | | | | 6,155 | | | | Accounts payable and accrued expenses | | | 831,158 | | | | 963,079 | | | | Accrued expenses - related parties | | | 106,562 | | | | 221,258 | | | | Accrued compensation and related benefits | | | 483,027 | | | | 831,099 | | | | | | | | | | | | | | | NET CASH USED IN OPERATING ACTIVITIES | | | (486,422 | ) | | | (386,699 | ) | | | | | | | | | | | | | | CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | | | | Proceeds from notes payable | | | 325,000 | | | | 300,000 | | | | Proceeds from notes payable - related parties | | | - | | | | 387,838 | | | | Proceeds from notes payable - related parties - discontinued operations | | | - | | | | 4,000 | | | | Repayment of notes payable | | | - | | | | (346,034 | ) | | | | | | | | | | | | | | NET CASH PROVIDED BY FINANCING ACTIVITIES | | | 325,000 | | | | 345,804 | | | | | | | | | | | | | | | NET DECREASE IN CASH | | | (161,422 | ) | | | (40,895 | ) | | | | | | | | | | | | | | CASH, beginning of year | | | 177,257 | | | | 218,152 | | | | | | | | | | | | | | | CASH, end of year | | $ | 15,835 | | | $ | 177,257 | | | | | | | | | | | | | | | SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | | | | | | | | | | | Cash paid for: | | | | | | | | | | | Interest | | $ | - | | | $ | 2,768 | | | | Income taxes | | $ | - | | | $ | - | | | | | | | | | | | | | | | SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | | | | | | | | | | | Conversion of Series G preferred stock and accrued dividends to common stock | | $ | - | | | $ | 128,208 | | | | Conversion of Series E and Series G preferred stock and accrued dividends to Series J preferred stock | | $ | 1,117,823 | | | $ | - | | | | Conversion of notes payable and notes payable - related parties and accrued interest to Series J preferred stock | | $ | 2,596,793 | | | $ | - | | | | Conversion of accounts payable and accrued expenses to Series J preferred stock | | $ | 1,465,847 | | | $ | - | | | | Conversion of accrued compensation and accounts payable to Series J preferred stock | | $ | 1,400,712 | | | $ | - | | | | Increase in Series J redemption premium applied against additional paid-in capital | | $ | 1,104,240 | | | $ | - | | | | Accrual of preferred stock dividends | | $ | 730,906 | | | $ | 310,268 | | | See accompanying notes to consolidated financial statements. | F-6 | | **TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **DECEMBER 31, 2025 AND 2024** **NOTE 1 ORGANIZATION AND BUSINESS OPERATIONS** Transportation and Logistics Systems, Inc. (TLSS or the Company) is a publicly-traded holding company incorporated under the laws of the State of Nevada on July 25, 2008. Prior to mid-February 2024, when the Company ceased all remaining operations, its subsidiaries, provided a full suite of logistics and transportation services, specializing in ecommerce fulfillment, last mile deliveries, two-person home delivery, mid-mile, and long-haul services. The Company and its subsidiaries also operated several warehouse locations located in New York, New Jersey, Connecticut, and Massachusetts. The subsidiaries of the Company during the years ended December 31, 2025 and 2024 include: Cougar Express, Inc. (Cougar Express) through date of deconsolidation of February 27, 2024; JFK Cartage, Inc. (JFK Cartage); Severance Trucking Co., Inc. (Severance Trucking); Severance Warehousing, Inc. (Severance Warehouse); McGrath Trailer Leasing, Inc. (McGrath, and together with Severance Trucking and Severance Warehouse, hereinafter, Severance); TLSS Acquisition, Inc. (TLSSA); TLSS Operations Holding Company, Inc. (TLSS Ops); Shyp CX, Inc. (Shyp CX); Shyp FX, Inc. (Shyp FX); TLSS-CE, Inc. (TLSS-CE); ; and TLSS-STI, Inc. (TLSS-STI). Prior to ceasing operations, the Companys historical business growth was primarily through a growth by acquisition strategy, as described below. On November 13, 2020, the Company formed a wholly-owned subsidiary, Shyp FX under the laws of the State of New Jersey. On January 15, 2021, through Shyp FX, the Company executed an agreement to acquire substantially all of the assets and certain liabilities of Double D Trucking, Inc., a northern New Jersey-based logistics provider specializing in servicing Federal Express over the past 25 years (DDTI), including last-mile delivery services using vans and box trucks. On April 28, 2022, the Company entered into an agreement with an unrelated third party to sell substantially all of Shyp FXs assets and specific liabilities in all-cash transactions that closed in June 2022. Shyp FX is inactive. On November 16, 2020, the Company formed a wholly-owned subsidiary, TLSSA under the laws of the State of Delaware. On March 24, 2021, TLSSA acquired all of the issued and outstanding shares of capital stock of Cougar Express, a New York-based full-service logistics provider specializing in pickup, warehousing, and delivery services in the tri-state area. On February 27, 2024, Cougar Express filed a Chapter 7 bankruptcy petition in the State of New York under the United States Bankruptcy Code (the Cougar Bankruptcy), assigning all of the Cougar Express assets to Mr. Andrew M. Thaler, Esq., as Trustee (the Cougar Express Trustee) for liquidation and unwinding of the business. The Cougar Express Trustee has been charged with liquidating the assets for the benefit of the Cougar Express creditors pursuant to the relevant provisions of the United States Bankruptcy Code. As a result of the Cougar Bankruptcy, the Cougar Express Trustee assumed all authority to manage Cougar Express. Additionally, as of February 27, 2024, Cougar Express no longer conducts any business and is not permitted by the Cougar Express Trustee to conduct any business. For these reasons, effective February 27, 2024, the Company relinquished control of Cougar Express. Therefore, the Company deconsolidated Cougar Express effective with the filing of the Cougar Bankruptcy on February 27, 2024. On February 21, 2021, the Company formed a wholly-owned subsidiary, Shyp CX under the laws of the State of New York. Shyp CX does not engage in any revenue-generating operations and is inactive. On August 4, 2022, Cougar Express closed on its acquisition of all outstanding stock of JFK Cartage, a New York-based full-service logistics provider specializing in pickup, warehousing, and delivery services in the tri-state area. Joan Ton, the sole shareholder of JFK Cartage, from whom the shares were acquired, is an unrelated party. The effective date of the acquisition was July 31, 2022. In February 2024, due to lack of working capital to conduct its business, JFK Cartage ceased its operations and no longer conducts any business, and all of its assets of the Company were voluntarily conveyed to the Cougar Express Trustee. During the years ended December 31, 2025 and 2024, all activities and balances of JFK Cartage are included as part of discontinued operations on the consolidated financial statements. As of the date of these consolidated financial statements, neither TLSS-CE, which owns 100% of the stock of Cougar Express, or JFK Cartage have not filed for bankruptcy. Effective February 3, 2023, the Companys wholly-owned subsidiary, TLSS-STI, closed on an acquisition of all outstanding stock of each of Severance Trucking, Severance Warehouse and McGrath, which together, offered less-than-truckload (LTL) trucking services throughout New England, with an effective date as of the close of business on January 31, 2023. The sellers of the stock of each entity were Kathryn Boyd, Clyde Severance, and Robert Severance, all individuals (the Severance Sellers). None of the Severance Sellers were affiliated with the Company or its affiliates. In February 2024, due to lack of working capital to conduct its business, Severance ceased its operations and no longer conducts any business, and all fixed assets of the Company were voluntarily surrendered to the Severance Sellers. For the years ended December 31, 2025, and 2024, all activities and balances of Severance are included as part of discontinued operations on the consolidated financial statements. As of the date of these consolidated financial statements, the Severance entities have not filed for bankruptcy. On May 31, 2023, the Company formed TLSS Ops and TLSS-CE, companies organized under the laws of Delaware. Simultaneous with the formation of these entities, Cougar Express became a wholly-owned subsidiary of TLSS-CE; Severance Warehousing and McGrath became wholly-owned subsidiaries of Severance Trucking; Severance Trucking became a wholly-owned subsidiary of TLSS-STI; and each of TLSS-CE, TLSS-STI and TLSS-FC became wholly-owned subsidiaries of TLSS Ops. Other than the TLSS parent company, all entities are included as part of discontinued operations on the consolidated financial statements for the years ended December 31, 2025, and 2024. As of the date of these consolidated financial statements, TLSS Ops has not filed for bankruptcy. On February 16, 2024, Severance Trucking, along with Cougar Express and JFK Cartage, ceased all operations and, as a result, all remaining employees of Cougar Express and Severance Trucking were laid off as of February 16, 2024. On February 29, 2024, all remaining support staff, employed by TLSS Ops, were laid off. Subsequent to the cessation of all of the Companys revenue generating operations in February 2024 and through the date of the issuance of these consolidated financial statements, the Company continues to remain insolvent and as a result, was unable to timely meet its annual and quarterly periodic reporting obligations under the Securities Exchange Act of 1934, as amended (the 34 Act), for 2024. The Company obtained financing to enable it to complete the preparation and review its interim financial statements and timely file its Quarterly Reports on Form 10-Q. The Company obtained additional financing to fund the necessary costs related to the preparation and filing of one or more of the additional periodic reports due with respect to the 2025 calendar year (See Note 10). | F-7 | | **TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **DECEMBER 31, 2025 AND 2024** In addition, the Company has restructured certain of its debt and obligations and is continuing to negotiate the restructuring of its remaining existing debts and obligations, as well as assessing the possibility of replacing its discontinued businesses and/or entering into new line(s) of business, whether by acquisition or otherwise. However, there can be no assurance that the Company will, in fact, be able to replace the Companys former business and/or enter into new line(s) of business, or to do so profitably. **NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION** Basis of presentation and principles of consolidation The summary of significant account policies of the Company is presented to assist in understanding the Companys consolidated financial statements. The consolidated financial statements and the notes are the representation of the Companys management, who are responsible for their integrity and objectivity. These accounting policies conform to U.S. generally accepted accounting principles (US GAAP) and have been consistently applied in the preparation of the consolidated financial statements. The consolidated financial statements of the Company include the accounts of TLSS and its wholly-owned subsidiaries, TLSSA, TLSS Ops, Shyp FX, Shyp CX, TLSS-CE, Cougar Express through its deconsolidation on February 27, 2024, JFK Cartage since its acquisition on July 31, 2022, TLSS-STI, and Severance since its acquisition on January 31, 2023. All intercompany accounts and transactions have been eliminated in consolidation. References below to a Company liability may be to a liability which is owed solely by a subsidiary and not by TLSS. Discontinued Operations The Company has classified the related assets and liabilities associated with its logistics and transportation services business as discontinued operations in its consolidated balance sheets and the results of its logistics and transportation services business has been presented as discontinued operations in its consolidated statements of operations for all periods presented as the discontinuation of its business had a major effect on its operations and financial results. Unless otherwise noted, discussion in the notes to consolidated financial statements refers to the Companys continuing operations. See Note 8 Discontinued Operations for additional information. Deconsolidation of subsidiaries The Company accounts for a gain or loss on deconsolidation of subsidiaries or derecognition of a group of assets in accordance with ASC 810-10-40-5. The Company measures the gain or loss as the difference between (a) the aggregate of fair value of any consideration received, the fair value of any retained noncontrolling investment and the carrying amount of any noncontrolling interest in the former subsidiary at the date the subsidiary is deconsolidated and (b) the carrying amount of the former subsidiarys assets and liabilities or the carrying amount of the group of assets. Going concern These consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in these consolidated financial statements, the Company had net income (loss) of $33,833 and $(3,824,470) for the years ended December 31, 2025 and 2024, respectively. The net cash used in operations was $486,422 and $386,699 for the years ended December 31, 2025 and 2024, respectively. Additionally, the Company had an accumulated deficit and working capital deficit of $147,165,109 and $7,934,095, respectively, on December 31, 2025. Furthermore, as of February 2024, the Company ceased operation of all its logistics and transportation services business and currently has no operating business. These factors raise substantial doubt about the Companys ability to continue as a going concern for a period of twelve months from the issuance date of this Annual Report. The Company has restructured certain of its debt and obligations and is continuing to negotiate the restructuring of its remaining debts and obligations, as well as assessing the possibility of replacing its discontinued businesses and/or enter into new line(s) of business, whether by acquisition or otherwise. However, there can be no assurance that it will, in fact, be able to replace its former business and/or enter into new line(s) of business, or to do so profitably. Management cannot provide assurance that the Company will ultimately achieve profitable operations or become cash flow positive or raise additional debt and/or equity capital. The Company is seeking to raise capital through additional debt and/or equity financings to fund its operations in the future. Although the Company has historically raised capital from sales of preferred shares, from the issuance of promissory notes and convertible promissory notes, and from the exercise of warrants, there is no assurance that it will be able to continue to do so. If the Company is unable to raise additional capital or secure additional lending in the near future, management expects that the Company will need to further curtail its operations. These consolidated financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Risks and uncertainties The Company maintains its cash in bank and financial institution deposits that at times may exceed federally insured limits. On December 31, 2025, the Company had no cash in the bank in excess of FDIC insured levels. | F-8 | | **TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **DECEMBER 31, 2025 AND 2024** Use of estimates The preparation of the consolidated financial statements, in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Significant estimates included in the accompanying consolidated financial statements and footnotes include the valuation of assets and liabilities of discontinued operations, estimates of current and deferred income taxes and deferred tax valuation allowances, the fair value of non-cash equity transactions, estimates of valuation of preferred stock, and the value of claims against the Company. Fair value of financial instruments The Financial Accounting Standards Board (FASB) issued ASC 820 Fair Value Measurements and Disclosures, which defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 requires disclosures about the fair value of all financial instruments, whether or not recognized, for financial statement purposes. Disclosures about the fair value of financial instruments are based on pertinent information available to the Company on December 31, 2025. Accordingly, the estimates presented in these consolidated financial statements are not necessarily indicative of the amounts that could be realized on disposition of the financial instruments. ASC 820 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are as follows: | | | Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date. | | | | | | | | | | Level 2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data. | | | | | | | | | | Level 3-Inputs are unobservable inputs which reflect the reporting entitys own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information. | | The Company measures certain financial instruments at fair value on a recurring basis. As of December 31, 2025 and 2024, the Company had no assets and liabilities measured at fair value on a recurring basis. ASC 825-10 Financial Instruments, allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. The Company did not elect to apply the fair value option to any outstanding instruments. The carrying amounts reported in the consolidated balance sheets for cash, prepaid expenses and other current assets, assets of discontinued operations, accounts payable, accrued expenses, liabilities of discontinued operations, and other payables approximate their fair values based on the short-term maturity of these instruments. The carrying amount of the Companys promissory note obligations approximate fair value, as the terms of these instruments are consistent with terms available in the market for instruments with similar risks. Cash and cash equivalents For purposes of the consolidated statements of cash flows, the Company considers all highly liquid instruments with a maturity of three months or less at the purchase date and money market accounts to be cash equivalents. On December 31, 2025 and 2024, the Company did not have any cash equivalents. Accounts receivable Accounts receivable was presented net of an allowance for credit losses. The Company maintains allowances for credit losses. The Company reviews the accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances along with general reserves for current accounts receivable that are projected to become uncollectable. In evaluating the collectability of individual receivable balances, the Company considers many factors, including the age of the balance, a customers historical payment history, its current credit-worthiness and current economic trends. Accounts are written off after exhaustive efforts at collection. Property and equipment Property and equipment are stated at cost and are depreciated using the straight-line method over their estimated useful lives of 1one to twenty years. Leasehold improvements are depreciated over the shorter of the useful life or lease term including scheduled renewal terms. Revenue equipment acquired through acquisitions is generally revalued to current market values as of the acquisition date. Assets obtained more than a year prior to the acquisition by the acquired company are depreciated on a straight-line basis aligned with the remaining period of expected use, whereas those obtained less than a year prior are depreciated consistent with newly purchased assets. In addition to purchasing new revenue equipment, the Company may rebuild the engines of its tractors. Because rebuilding an engine increases its useful life, the Company capitalizes these costs and depreciates the cost over the remaining useful life of the unit. Maintenance and repairs are charged to expense as incurred. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. The Company examines the possibility of decreases in the value of these assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable. | F-9 | | **TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **DECEMBER 31, 2025 AND 2024** Leases The Company uses Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842). The guidance requires lessees to recognize lease assets and lease liabilities for most operating leases. In addition, the guidance requires that lessors separate lease and non-lease components in a contract in accordance with the new revenue guidance in ASC 606. The Company applied the package of practical expedients to leases that commenced before the effective date whereby the Company elected to not reassess the following: (i) whether any expired or existing contracts contain leases and (ii) initial direct costs for any existing leases. For contracts entered into on or after the effective date, at the inception of a contract the Company assessed whether the contract is, or contains, a lease. The Companys assessment is based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether it obtains the right to substantially all the economic benefit from the use of the asset throughout the period, and (3) whether it has the right to direct the use of the asset. The Company will allocate the consideration in the contract to each lease component based on its relative stand-alone price to determine the lease payments. The Company has elected not to recognize right-of-use assets and lease liabilities for short-term leases that have a term of 12 months or less. Operating lease ROU assets represented the right to use the leased asset for the lease term and operating lease liabilities were recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most leases do not provide an implicit rate, the Company used an incremental borrowing rate based on the information available at the adoption date in determining the present value of future payments. Lease expense for minimum lease payments was amortized on a straight-line basis over the lease term. In connection with the discontinuation of the Companys logistic and transportation business, all ROU assets were either impaired or deconsolidated and any such impairment is included in discontinued operations as of December 31, 2025 and 2024 (see Note 8). Currently, all leased premises have been abandoned. Impairment of long-lived assets In accordance with ASC Topic 360, the Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the assets estimated fair value and its book value. Segment reporting In November 2023, the FASB issued ASU 2023-07, *Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,* which requires entities to report incremental information about significant segment expenses included in a segments profit or loss measure as well as the title and position of the chief operating decision maker (CODM). The new standard also requires interim disclosures related to reportable segment profit or loss and assets that had previously only been disclosed annually. The Company adopted ASU 2023-07 effective December 31, 2024, on a retrospective basis. Operating segments are defined as components of a business for which separate discrete financial information is available for evaluation by the chief operating decision maker in deciding how to allocate resources and assess performance. The Company operates as a single operating and reporting segment, reflecting our sole focus of seeking new business opportunities. Our Chief Executive Officer serves as the Chief Operating Decision Maker (CODM), responsible for assessing the Companys performance and making resource allocation decisions. The CODM evaluates financial information on a consolidated basis, focusing on key metrics such as general and administrative expenses, and other income/expenses. The CODM allocates resources based on the Companys available cash resources, forecasted cash flow, and expenditures on a consolidated basis, as well as an assessment of the probability of success of its business activities. Resource allocation decisions are informed by budgeted and forecasted expense information, along with actual expenses incurred to date. The measure of segment assets is reported on the balance sheet as total assets. Disaggregated profit or loss information at the program or functional level is *not* regularly provided to or relied upon by the CODM, as our integrated operating model emphasizes shared resources and centralized decision-making. Series J preferred stock subject to possible redemption The Company accounts for its Series J preferred stock subject to possible redemption in accordance with the guidance in ASC Topic 480 Distinguishing Liabilities from Equity. Conditionally redeemable Series J Preferred stock that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Companys control is classified as temporary equity. The Companys Series J Preferred stock features certain redemption rights that are considered to be outside of the Companys control and subject to occurrence of uncertain future events. Accordingly, Series J preferred stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders deficit section of the Companys consolidated balance sheets. Revenue recognition and cost of revenue The Company adopted Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers. This ASC is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASC also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer service orders, including significant judgments. | F-10 | | **TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **DECEMBER 31, 2025 AND 2024** The Company recognized revenues and the related direct costs of such revenue which generally include compensation and related benefits, gas costs, insurance, parking and tolls, truck rental fees, and maintenance fees, as of the date the freight is delivered which is when the performance obligation is satisfied. In accordance with ASC Topic 606, the Company recognized revenue on a gross basis. Our payment terms were generally net 30 days from acceptance of delivery. The Company did not incur incremental costs obtaining service orders from its customers, however, if the Company did, because all the Companys customer contracts were less than a year in duration, any contract costs incurred were expensed rather than capitalized. The revenue that the Company recognized arose from deliveries of freight on behalf of the Companys customers. Primarily, the Companys performance obligations under these service orders corresponded to each delivery of freight that the Company made under the service agreements. Control of the freight transfers to the recipient upon delivery. Once this occurred, the Company satisfied its performance obligation, and the Company recognized revenue. The Companys revenues were primarily derived from the transportation services it provided through the delivery of goods over the duration of a shipment. The bill of lading is a legally enforceable agreement between two parties, and where collectability was probable this document serves as the contract as its basis to recognized revenue under ASC 606- Revenue Recognition. The Company elected to expense initial direct costs as incurred because the average shipment cycle is less than five days. The Company recognized revenue and substantially all the purchased transportation expenses on a gross basis. Direct costs of such revenue generally included compensation and related benefits, gas costs, insurance, parking and tolls, truck rental fees, and maintenance fees. The Company directed the use of the transportation service provided and remained responsible for the complete and proper shipment. The Company recognized revenue for its performance obligations under its customer contracts over time, as its customers receive the benefits of the services in accordance with ASC 606- Revenue Recognition. Revenue generated from warehousing services was generally recognized as the service were performed, based upon a monthly or weekly rate. Inherent within the Companys revenue recognition practices were estimates for revenue associated with shipments in transit. For shipments in transit, the Company recorded revenue based on the percentage of service completed as of the period end and recognizes delivery costs as incurred. The percentage of service completed for each shipment was based on how far along in the shipment cycle each shipment was in relation to standard transit days. The estimated portion of revenue for all shipments in transit was accumulated at period end and recognized as revenue within discontinued operations. The significance of in-transit shipments to the consolidated financial statements was limited due to the short duration, generally less than five days, of the average shipment cycle. For the year ended December 31, 2024, all revenues and cost of revenues are included in discontinued operations. No revenue was generated during the year ended December 31, 2025. Stock-based compensation Stock-based compensation is accounted for based on the requirements of ASC 718 Compensation Stock Compensation, which requires recognition in the financial statements of the cost of employee, director, and non-employee services received in exchange for an award of equity instruments over the period the employee, director, or non-employee is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee, director, and non-employee services received in exchange for an award based on the grant-date fair value of the award. The Company has elected to recognize forfeitures as they occur as permitted under ASU 2016-09 Improvements to Employee Share-Based Payment. Basic and diluted income (loss) per share Pursuant to ASC 260-10-45, basic loss per common share is computed by dividing net income (loss) attributable to common stockholders by the weighted average number of shares of common stock outstanding for the periods presented. Diluted income (loss) per share is computed by dividing net income (loss) attributable to common stockholders by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period. Potentially dilutive shares of common stock consist of common stock issuable for stock options and warrants (using the treasury stock method) and shares issuable for Series E Convertible Preferred Stock (the Series E Preferred), Series G Convertible Preferred Stock (the Series G Preferred), Series H Convertible Preferred Stock (the Series H Preferred) and Series J Senior Convertible Preferred Stock (the Series J Preferred) (using the as-if converted method). Effective as of June 1, 2025, all of our outstanding shares of Series E Preferred and Series G Preferred were exchanged for shares of our Series J Preferred. These common stock equivalents may be dilutive in the future. The following table presents a reconciliation of basic and diluted net income (loss) per common share: SCHEDULE OF RECONCILIATION OF BASIC AND DILUTED NET INCOME (LOSS) PER COMMON SHARE | | | 2025 | | | 2024 | | | | | | Year Ended December 31, | | | | | | 2025 | | | 2024 | | | | Net income (loss) per common share - basic: | | | | | | | | | | | Net income (loss) | | $ | 33,833 | | | $ | (3,824,470 | ) | | | Add: deemed contribution on exchange of equity instruments | | | 800,380 | | | | - | | | | Less: accrued dividends | | | (730,906 | ) | | | (310,268 | ) | | | Net income (loss) attributable to common stockholders | | $ | 103,307 | | | $ | (4,134,738 | ) | | | Weighted average common shares outstanding basic | | | 5,889,437,474 | | | | 5,531,600,368 | | | | Net income (loss) per common share basic | | $ | 0.00 | | | $ | (0.00 | ) | | | | | | | | | | | | | | Net income (loss) per common share - diluted: | | | | | | | | | | | Net income (loss) attributable to common shareholders basic | | $ | 103,307 | | | $ | (4,134,738 | ) | | | Add: adjustments to net income (loss) | | | - | | | | - | | | | Numerator for income (loss) per common share diluted | | $ | 103,307 | | | $ | (4,134,738 | ) | | | | | | | | | | | | | | Weighted average common shares outstanding basic | | | 5,889,437,474 | | | | 5,531,600,368 | | | | Add: dilutive shares related to: | | | | | | | | | | | Stock warrants | | | - | | | | - | | | | Convertible preferred shares | | | - | | | | - | | | | Weighted average common shares outstanding diluted | | | 5,889,437,474 | | | | 5,531,600,368 | | | | Net income (loss) per common share diluted | | $ | 0.00 | | | $ | (0.00 | ) | | | F-11 | | **TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **DECEMBER 31, 2025 AND 2024** Potentially dilutive shares of common stock were excluded from the computation of diluted shares outstanding for the years ended December 31, 2025 and 2024 as they would have an anti-dilutive impact on the Companys net income (loss) in that period and consisted of the following: SCHEDULE OF POTENTIALLY DILUTIVE SHARES EXCLUDED FROM COMPUTING OF DILUTED SHARES | | | December 31, 2025 | | | December 31, 2024 | | | | Stock warrants | | | 52,857,143 | | | | 946,171,489 | | | | Series E convertible preferred stock | | | - | | | | 95,238,667 | | | | Series G convertible preferred stock | | | - | | | | 2,032,500,000 | | | | Series H convertible preferred stock | | | 323,740,000 | | | | 323,740,000 | | | | Series J convertible preferred stock | | | 11,042,400,000 | | | | - | | | | Antidilutive securities excluded from computation of earnings per share | | | 11,418,997,143 | | | | 3,397,650,156 | | | Income taxes Deferred income taxes are provided using the liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of the changes in tax laws and rates of the date of enactment. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceed the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Applicable interest and penalties associated with unrecognized tax benefits are classified as additional income taxes in the consolidated statements of operations. Recent accounting pronouncements In November 2024, the FASB issued ASU 2024-03, Income StatementReporting Comprehensive IncomeExpense Disaggregation Disclosures (Subtopic 220-40), which requires entities to provide more detailed disaggregation of expenses in the income statement, focusing on the nature of the expenses rather than their function. The new disclosures will require entities to separately present expenses for significant line items, including but not limited to, depreciation, amortization, and employee compensation. Entities will also be required to provide a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, disclose the total amount of selling expenses and, in annual reporting periods, provide a definition of what constitutes selling expenses. This pronouncement is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company does not expect the adoption of this new guidance to have a material impact on the consolidated financial statements. There are currently no other accounting standards that have been issued but not yet adopted that we believe will have a significant impact on our consolidated financial position, results of operations or cash flows upon adoption. **NOTE 3 NOTES PAYABLE RELATED PARTIES** On April 14, 2023, the Companys Board of Directors (Board) 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 provided for interest at 12% per annum. However, upon default, the interest rate shall be 17% per annum. The maturity date of the financing was December 31, 2023, provided, however, the Company may prepay a loan at any time without premium or penalty. Each loan under the Credit Facility was made on promissory notes. During April 2023, the Company received initial loans under the Credit Facility, in the following amounts: (a) $500,000 from John Mercadante (Mr. Mercadante) on April 17, 2023; Mr. Mercadante is the Companys Secretary and a Director of the Company; and (b) $100,000 from Sebastian Giordano on April 21, 2023; Mr. Giordano is the Companys Chief Executive Officer, Chief Financial Officer and Chairman of the Board. On May 21, 2024, the Company received default notices for its failure to pay outstanding principal and interest due on unsecured promissory notes that were issued on April 17, 2023, to Mr. Mercadante and on April 21, 2023, to Mr. Giordano with respect to $542,575 and $108,708, respectively, in aggregate principal and interest due on December 31, 2023. As such, the interest rate on both notes increased to 17% per annum calculated as of January 1, 2024. | F-12 | | **TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **DECEMBER 31, 2025 AND 2024** On October 3, 2023, and November 28, 2023, the Company issued unsecured promissory notes to Mr. Mercadante and from an individual, who is affiliated to Mr. Mercadante in the principal amount of $500,000 and $60,000, respectively. Each unsecured promissory note matured nine months and one year from the date of issuance and accrues interest at a rate per annum of 12%, respectively. On July 1, 2024, the Company received a default notice for its failure to pay outstanding principal and interest due on the October 3, 2023, unsecured promissory note to Mr. Mercadante in the principal amount of $500,000 and was due on June 30, 2024. As such, the interest rate on such note increased to 17% per annum as of July 1, 2024. Additionally, on December 9, 2024, the Company received a default notice for its failure to pay outstanding principal and interest due on the November 28, 2024, unsecured promissory note to an individual, who is affiliated to Mr. Mercadante in the principal amount of $60,000 and was due on November 28, 2024. As such, the interest rate on such note increased to 17% per annum as of November 29, 2024. On February 6, 2024, and February 15, 2024, the Company issued unsecured promissory notes to Mr. Mercadante, a Director of the Company, in the principal amounts of $64,534 and $319,195, respectively. Each unsecured promissory note will mature one year from the date of issuance and accrues interest at a rate per annum of 12%. On February 7, 2025, and February 21, 2025, the Company received default notices for its failure to pay outstanding principal and interest due on unsecured promissory notes that were issued on February 6, 2024 and February 15, 2024 to John Mercadante in the principal amount of $64,534 and $319,195, respectively, and were due on February 6, 2025 and February 15, 2025, respectively. As such, the interest rate on such notes increased to 17% per annum as of February 7, 2025 and February 15, 2025, respectively. On February 21, 2024, and February 23, 2024, the Company issued unsecured promissory notes to Norman Newton (Mr. Newton) and Charles Benton (Mr. Benton), both members of the Companys Board of Directors, in the principal amounts of $1,000 and $3,109, respectively. Each unsecured promissory note matured on September 30, 2024, and accrued interest at the rate per annum of 12%. On October 1, 2024, the Company received default notices for its failure to pay outstanding principal and interest due on unsecured promissory notes that were issued on February 21, 2024, and February 23, 2024 to Mr. Newton and Mr. Benton in the principal amounts of $1,000 and $3,109, respectively and that were both due on September 30, 2024. As such, the interest rate on such notes increased to 17% per annum as of October 1, 2024. On May 30, 2025, the Company entered into settlement agreements (the Series J Settlement Agreements) with certain holders of the Companys liabilities (the 2025 Creditors), including certain related party note holders (the Related Party Creditors). Pursuant to the Series J Settlement Agreements, the Related Party Creditors settled an aggregate of $1,547,838 in outstanding notes and accrued interest payable of $396,695 in exchange for the issuance of an aggregate of 19,446 shares of the Companys Series J Preferred, effective as of June 1, 2025. Among the debt settled with Related Party Creditors were all outstanding notes issued to Mr. Newton, Mr. Mercadante, Mr. Giordano and Mr. Benton. In connection with the exchange of the outstanding notes and related accrued interest payable for shares of Series J Preferred, the Company calculated a gain on debt extinguishment of $1,750,080, which was netted against additional paid-in capital due to the related party relationship and accordingly, no gain or loss was recognized on these settlements. As of December 31, 2025 and 2024, aggregate notes payable to related parties in the principal amounts of $0 and $1,547,838, respectively, were outstanding. As of December 31, 2025 and 2024, the aggregate accrued interest payable to related parties amounted to $0 and $290,133, respectively, which has been included in accrued expenses related parties on the accompanying consolidated balance sheets. For the years ended December 31, 2025 and 2024, interest expense related parties amounted to $106,563 and $221,258, respectively. **NOTE 4 NOTE PAYABLE** On August 12, 2024, the Company issued two (2) promissory notes (the August 2024 Notes) in the aggregate principal amount of $150,000, with an interest rate of 10% per annum that mature six (6) months from the date of issuance, to Mercer Street Global Opportunity Fund and Cavalry Fund I LP (each a 2024 Lender and together the 2024 Lenders). If the Company defaults on the August 2024 Notes, the 2024 Lenders have the right to demand repayment of the August 2024 Notes in full upon five (5) business days notice to the Company. In the event that full payment is not made upon the expiry of a thirty (30) day period, a default penalty equal to 5.0% per month during the period of default in addition to the 10% interest rate will apply to the entire amount of the August 2024 Notes outstanding, including any accrued but unpaid interest. Concurrently with the issuance of the August 2024 Notes, the Company also entered into a letter agreement of even date (the August 2024 Letter Agreement) with the August 2024 Lenders setting forth, among other items, the intended use of proceeds of the August 2024 Notes which include: (i) the completion of the Companys 2023 audit and reviews for the subsequent 2024 quarters; (ii) preparation and submission of any requisite filings with the SEC and OTC Expert Market; and (iii) maintaining good standing with requisite taxing authorities. On February 10, 2025, the August 2024 Notes were amended whereby the due date for the outstanding principal and interest of the August 2024 Notes to be due and paid in full was extended from February 12, 2025 to August 12, 2025. On October 9, 2024, the Company issued two (2) unsecured non-convertible promissory notes (the October 2024 Notes) in the aggregate principal amount of $100,000, with an interest rate of 10% per annum that mature six (6) months from the date of issuance to the 2024 Lenders. If the Company defaults on the October 2024 Notes, the 2024 Lenders have the right to demand repayment of the October 2024 Notes in full upon five (5) business days notice to the Company. In the event that full payment is not made upon the expiry of a thirty (30) day period, a default penalty equal to 5.0% per month during the period of default in addition to the 10% interest rate will apply to the entire amount of the October 2024 Notes outstanding, including any accrued but unpaid interest. Concurrently with the issuance of the October 2024 Notes, the Company also entered into a letter agreement of even date (the October 2024 Letter Agreement) with the 2024 Lenders setting forth, among other items, the intended use of proceeds of the October 2024 Notes which include: (i) the completion of the Companys 2023 audit and reviews for the subsequent 2024 quarters; (ii) preparation and submission of any requisite filings with the SEC and OTC Expert Market; (iii) maintaining good standing with requisite taxing authorities; and (iv) fees for routine litigation matters in the ordinary course of business. On April 9, 2025, the October 2024 Notes were amended to extend the due date for the outstanding principal and interest of the October 2024 Notes from April 9, 2025 to August 12, 2025. | F-13 | | **TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **DECEMBER 31, 2025 AND 2024** On November 22, 2024, Company issued an unsecured non-convertible promissory note (the November 2024 Note) in the aggregate principal amount of $50,000, with an interest rate of 10% per annum that mature six (6) months from the date of issuance to a 2024 Lender. If the Company defaults on the November 2024 Note, the 2024 Lender has the right to demand repayment of the November 2024 Note in full upon five (5) business days notice to the Company. In the event that full payment is not made upon the expiry of a thirty (30) day period, a default penalty equal to 5.0% per month during the period of default in addition to the 10% interest rate will apply to the entire amount of the November 2024 Note outstanding, including any accrued but unpaid interest. Concurrently with the issuance of the November 2024 Note, the Company also entered into a letter agreement of even date (the November 2024 Letter Agreement) with the 2024 Lender setting forth, among other items, the intended use of proceeds of the November 2024 Note which include: (i) the completion of the Companys 2023 audit and reviews for the subsequent 2024 quarters; (ii) preparation and submission of any requisite filings with the SEC and OTC Expert Market; (iii) maintaining good standing with requisite taxing authorities; and (iv) fees for routine litigation matters in the ordinary course of business. On January 21, 2025, the Company issued an unsecured non-convertible promissory note (the January 2025 Note) in the aggregate principal amount of $50,000, with an interest rate of 10% per annum that mature six (6) months from the date of issuance to one of the 2024 Lenders. If the Company defaults on the January 2025 Note, the 2024 Lender has the right to demand repayment of the January 2025 Note in full upon five (5) business days notice to the Company. In the event that full payment is not made upon the expiry of a thirty (30) day period, a default penalty equal to 5.0% per month during the period of default in addition to the 10% interest rate will apply to the entire amount of the January 2025 Note outstanding, including any accrued but unpaid interest. Concurrently with the issuance of the January 2025 Note, the Company also entered into a letter agreement of even date (the January 2025 Letter Agreement) with the 2024 Lenders setting forth, among other items, the intended use of proceeds of the January 2025 Notes which include: (i) the completion of the Companys 2024 second and third quarter reviews; (ii) preparation and submission of any requisite filings with the SEC and OTC Expert Market; (iii) maintaining good standing with requisite taxing authorities; and (iv) fees for routine litigation matters in the ordinary course of business. On March 10, 2025, the Company issued an unsecured non-convertible promissory note in the principal amount of $100,000, with interest at the rate of 10% per annum accruing and due at maturity in six months, to C/M Capital Master Fund, LP (the 2025 Lender) and on March 25, 2025, the Company issued a second unsecured non-convertible promissory note in the principal amount of $75,000, with interest at the rate of 10% per annum accruing and due at maturity in six months to the 2025 Lender. These notes and herein referred to as the March 2025 Notes. The March 2025 Notes are for the primary purpose of funding a portion of the costs related to: (i) the completion of the Companys 2024 annual financial statements and audit by the Companys independent auditor and 2025 first quarter financial statements and independent auditor review; (ii) preparation and submission of any requisite filings with the Securities and Exchange Commission and the OTC Expert Market; (iii) such tax-related and other activities as may be necessary or legally required from time to time to restore the Company to good standing with requisite taxing authorities; and (iv) fees for routine litigation matters in the ordinary course of business. The Company may repay the March 2025 Notes upon maturity or prior to maturity with the mutual agreement of the 2025 Lender. The March 2025 Notes also contain customary events of default, which include, without limitation, failure to pay principal, interest or other charges in respect of the March 2025 Note when due at maturity or otherwise, failure to satisfy any covenant in the March 2025 Notes or other agreements between the Company and the 2025 Lender or any other creditor, breach of representations and warranties set forth in the March 2025 Notes or any transaction document executed contemporaneously with the March 2025 Notes, and certain judgment defaults, events of bankruptcy or insolvency of the Company. Upon the occurrence of such an event of default under the March 2025 Notes, the Lender has the right to demand repayment of the March 2025 Notes in full upon five (5) business days notice to the Company. In the event that full payment is not made upon the expiry of a thirty (30) day period, a default penalty equal to 5.0% per month during the period of default in excess of the 10% interest rate will apply to the entire amount of the March 2025 Notes outstanding, including any accrued but unpaid interest. The 2025 Lender may then, at its sole discretion, declare the entire then-outstanding principal amount of the March 2025 Notes and any accrued but unpaid interest due thereunder immediately due and payable, in which event the 2025 Lender may, at its sole discretion, take any action it deems necessary to recover amounts due under the March 2025 Notes. Concurrently with the issuance of the March 2025 Notes, the Company also entered into letter agreements of even date (the March Letter Agreements) with the 2025 Lender setting forth, among other items, the intended use of proceeds of the March 2025 Notes as described above. The March 2025 Notes and the March Letter Agreements are on the same form as those entered in on August 12, 2024, October 9, 2024, and November 22, 2024, January 21, 2025. On April 9, 2025, we entered into amendment agreements with the 2024 Lenders, pursuant to which the maturity date of the October 2024 Notes were amended from April 9, 2025 to August 12, 2025. All other terms and conditions of the October 2024 Notes remain unchanged. On May 5, 2025, we entered into an amendment agreement with the 2024 Lender pursuant to which the maturity date of the November 2024 Note was amended from May 22, 2025, to August 12, 2025. All other terms and conditions of the November 2024 Note remain unchanged. On May 1, 2025, the Company issued an unsecured non-convertible promissory note in the principal amount of $50,000, with interest at the rate of 10% per annum accruing and due at maturity in six months, to the 2025 Lender (the May 2025 Note). The May 2025 Note is for the primary purpose of funding a portion of the costs related to: (i) the preparation and filing of the Companys prepare the Companys Certificate of Designation of Preferences, Rights, and Limitations of Series J Senior Convertible Preferred Stock (the Series J Certificate); (ii) preparation and submission of any requisite filings with the Securities and Exchange Commission and the OTC Expert Market; (iii) such tax-related and other activities as may be necessary or legally required from time to time to restore the Company to good standing with requisite taxing authorities; and (iv) fees for routine litigation matters in the ordinary course of business. The Company may repay the May 2025 Note upon maturity or prior to maturity with the mutual agreement of the 2025 Lender. The May 2025 Note also contains customary events of default, which include, without limitation, failure to pay principal, interest or other charges in respect of the May 2025 Note when due at maturity or otherwise, failure to satisfy any covenant in the May 2025 Note or other agreements between the Company and the Lender or any other creditor, breach of representations and warranties set forth in the May 2025 Note or any transaction document executed contemporaneously with the May 2025 Note, and certain judgment defaults, events of bankruptcy or insolvency of the Company. Upon the occurrence of such an event of default under the May 2025 Note, the Lender has the right to demand repayment of the May 2025 Note in full upon five (5) business days notice to the Company. In the event that full payment is not made upon the expiry of a thirty (30) day period, a default penalty equal to 5.0% per month during the period of default in excess of the 10% interest rate will apply to the entire amount of the May 2025 Note outstanding, including any accrued but unpaid interest. The 2025 Lender may then, at its sole discretion, declare the entire then-outstanding principal amount of the May 2025 Note and any accrued but unpaid interest due thereunder immediately due and payable, in which event the 2025 Lender may, at its sole discretion, take any action it deems necessary to recover amounts due under the May 2025 Note. | F-14 | | **TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **DECEMBER 31, 2025 AND 2024** On August 27, 2025, the Company issued an unsecured non-convertible promissory note in the principal amount of $50,000, with interest at the rate of 10% per annum accruing and due at maturity in six months, to the 2025 Lender (the August 2025 Note). The August 2025 Note was for the primary purpose of funding a portion of the costs related to (i) preparation and submission of any requisite filings with the Securities and Exchange Commission and the OTC Expert Market; (ii) such tax-related and other activities as may be necessary or legally required from time to time to restore the Company to good standing with requisite taxing authorities; and (iii) fees for routine litigation matters in the ordinary course of business. The Company may repay the August 2025 Note upon maturity or prior to maturity with the mutual agreement of the 2025 Lender. The August 2025 Note also contained customary events of default, which include, without limitation, failure to pay principal, interest or other charges in respect of the August 2025 Note when due at maturity or otherwise, failure to satisfy any covenant in the August 2025 Note or other agreements between the Company and the Lender or any other creditor, breach of representations and warranties set forth in the August 2025 Note or any transaction document executed contemporaneously with the August 2025 Note, and certain judgment defaults, events of bankruptcy or insolvency of the Company. Upon the occurrence of such an event of default under the August 2025 Note, the Lender has the right to demand repayment of the August 2025 Note in full upon five (5) business days notice to the Company. In the event that full payment is not made upon the expiry of a thirty (30) day period, a default penalty equal to 5.0% per month during the period of default in excess of the 10% interest rate will apply to the entire amount of the August 2025 Note outstanding, including any accrued but unpaid interest. The 2025 Lender may then, at its sole discretion, declare the entire then-outstanding principal amount of the August 2025 Note and any accrued but unpaid interest due thereunder immediately due and payable, in which event the 2025 Lender may, at its sole discretion, take any action it deems necessary to recover amounts due under the May 2025 Note. Between May 30, 2025 and December 31, 2025, the Company entered into Series J Settlement Agreements with the 2025 Creditors, pursuant to which, the 2025 Creditors, not including Related Party Creditors, settled an aggregate of $625,000 in outstanding notes and accrued interest payable of $27,260 in exchange for the issuance of an aggregate of 6,522 shares of Series J Preferred. In connection with the exchange of the outstanding notes and interest payable for shares of Series J Preferred, during the year ended December 31, 2025, the Company recorded a gain on debt extinguishment of $587,095, which is included in gain on debt extinguishment on the accompanying consolidated statement of operations. As of December 31, 2025 and 2024, aggregate notes payable in the aggregate principal amounts of $0 and $300,000, respectively, were outstanding. **NOTE 5 STOCKHOLDERS EQUITY (DEFICIT)** Preferred stock The Company has 10,000,000 authorized shares of preferred stock, $0.001 par value per share. The Companys Amended and Restated Articles of Incorporation explicitly authorize the Board to issue any or all of such shares of preferred stock in one (1) or more classes or series and to fix the designations, powers, preferences and rights, the qualifications, limitations or restrictions thereof, including dividend rights, dividend rates, conversion rights, voting rights, terms of redemption, redemption prices, liquidation preferences and the number of shares constituting any class or series, without further vote or action by the stockholders. **Series B preferred stock** On August 16, 2019, the Company filed the Certificate of Designation, Preferences, and Rights of Series B Convertible Preferred Shares with the Secretary of State of the State of Nevada (the Series B Preferred COD) designating 1,700,000 shares of Series B Convertible Preferred Stock with a par value of $0.001 and a stated value of $0.001 (the Series B Preferred). The Series B Preferred have no voting rights and are not redeemable. Each share of Series B Preferred stock is convertible into one share of common stock at the option of the holder subject to beneficial ownership limitation. A holder of Series B Preferred may not convert any shares of Series B Preferred into common stock if the holder (together with the holders affiliates and any persons acting as a group together with the holder or any of the holders affiliates) would beneficially own in excess of 4.99% of the number of shares of common stock outstanding immediately after giving effect to the conversion, as such percentage ownership is determined in accordance with the terms of the Series B Preferred COD. However, upon notice from the holder to the Company, the holder may decrease or increase the beneficial ownership limitation, which may not exceed 9.99% of the number of shares of common stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Series B Preferred COD, provided that any such increase or decrease in the beneficial ownership limitation will not take effect until 61 days following notice to the Company. As of December 31, 2025 and 2024, there were no Series B preferred stock issued or outstanding. **Series D preferred stock** On July 20, 2020, the Board filed the Certificate of Designation of Preferences (COD), Rights and Limitations of Series D Preferred Stock (the Series D COD) with the Secretary of State of the State of Nevada designating 1,250,000 shares of preferred stock as Series D. The Series D preferred stock (Series D Preferred) does not have the right to vote. The Series D Preferred has a stated value of $6.00 per share (the Series D Stated Value). Subject only to the liquidation rights of the holders of Series B Preferred that is currently issued and outstanding, upon the liquidation, dissolution or winding up of the business of the Company, whether voluntary or involuntary, the Series D Preferred holders are entitled to receive an amount per share equal to the Series D Stated Value and then receive a pro-rata portion of the remaining assets available for distribution to the holders of common stock on an as-converted to common stock basis. | F-15 | | **TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **DECEMBER 31, 2025 AND 2024** Subject to a beneficial ownership limitation and customary adjustments for stock dividends and stock splits, each share of Series D Preferred is convertible into 1,000 shares of common stock. A holder of Series D Preferred may not convert any shares of Series D Preferred into common stock if the holder (together with the holders affiliates and any persons acting as a group together with the holder or any of the holders affiliates) would beneficially own in excess of 4.99% of the number of shares of common stock outstanding immediately after giving effect to the conversion, as such percentage ownership is determined in accordance with the terms of the Series D COD. However, upon notice from the holder to the Company, the holder may decrease or increase the beneficial ownership limitation, which may not exceed 9.99% of the number of shares of common stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Series D COD, provided that any such increase or decrease in the beneficial ownership limitation will not take effect until 61 days following notice to the Company. Approval of at least a majority of the outstanding Series D Preferred is required to: (a) amend or repeal any provision of, or add any provision to, the Companys Articles of Incorporation or bylaws, or file any Certificate of Designation (however such document is named) or articles of amendment to create any class or any series of preferred stock, if such action would adversely alter or change in any respect the preferences, rights, privileges or powers, or restrictions provided for the benefit, of the Series D Preferred, regardless of whether any such action shall be by means of amendment to the Articles of Incorporation or bylaws or by merger, consolidation or otherwise or filing any Certificate of Designation, it being understood that the creation of a new security having rights, preferences or privileges senior to or on parity with the Series D Preferred in a future financing will not constitute an amendment, addition, alteration, filing, waiver or repeal for these purposes; (b) increase or decrease (other than by conversion) the authorized number of Series D Preferred; (c) issue any Series D Preferred, other than to the Investors; or (d) without limiting any provision hereunder, whether or not prohibited by the terms of the Series D Preferred, circumvent a right of the Series D Preferred. As of December 31, 2025 and 2024, no shares of Series D Preferred were outstanding. **Series E preferred stock** On October 6, 2020, the Board filed the Certificate of Designation of Preferences, Rights and Limitations of Series E Convertible Preferred Stock (the Series E COD) with the Secretary of State of the State of Nevada designating 562,250 shares of preferred stock as Series E Preferred. On December 28, 2020, the Board filed an Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of Series E Convertible Preferred Stock (the Amended Series E COD) with the Secretary of State of the State of Nevada. The Series E Preferred has a stated value of $13.34 per share (the Series E Stated Value). Pursuant with the Amended Series E COD: | | | Each holder of Series E Preferred has the right to cast the number of votes equal to the number of whole shares of common stock into which the shares of Series E Preferred held by such holder are convertible as of the applicable record date. | | | | | | | | | | Unless prohibited by Nevada law governing distributions to stockholders, for a period of one-year beginning with the Original Issuance Date, as defined, the Corporation shall have the right but not the obligation to redeem all outstanding Series E Preferred (and not any part of the Series E Preferred) at a price equal to 115% of (i) the Series E Stated Value per share plus (ii) all unpaid dividends thereon. If the Company fails to redeem all outstanding Series E on the redemption date, it shall be deemed to have waived its redemption right. | | Subject to a beneficial ownership limitation and customary adjustments for stock dividends and stock splits, each share of Series E Preferred shall be convertible into that number of shares of common stock calculated by dividing the Series E Stated Value of each share of Series E Preferred being converted by the conversion price. The initial conversion price was $0.01, subject to certain adjustments as provided below. In addition, the Company shall issue any holder of Series E Preferred converting all or any portion of their Series E Preferred an additional sum (the Make Good Amount) equal to $210 for each $1,000 of Series E Stated Value of the Series E Preferred converted pro-rated for amounts more or less than $1,000, increasing to $310 for each $1,000 of Series E Stated Value during the Triggering Event Period (the Extra Amount). Subject a beneficial ownership limitation of 4.99% or 9.99%, the Make Good Amount shall be paid in shares of common stock, as follows: The number of shares of common stock issuable as the Make Good Amount shall be calculated by dividing the Extra Amount by the product of 80% times the average VWAP for the five trading days prior to the date a holder delivered a notice of conversion to the Company (the Conversion Date). During the Triggering Event Period, the number of shares of common stock issuable as the Make Good Amount shall be calculated by dividing the Extra Amount by the product of 70% times the average VWAP for the five trading days prior to the Conversion Date. Subject to a beneficial ownership limitation of 4.99% or 9.99%, at any time during the period commencing on the date of the occurrence of a Triggering Event and ending on the date of the cure of such Triggering Event (the Triggering Event Period), a holder may, at such holders option, by delivery of a conversion notice to the Company to convert all, or any number of Series E Preferred (such conversion amount of the Series E Preferred to be converted pursuant to this Section 6(b) (the Triggering Event Conversion Amount), into shares of common stock at the Triggering Event Conversion Price. The Triggering Event Conversion Amount means 125% of the Series E Stated Value and the Triggering Event Conversion Price means $0.006. If and whenever on or after the initial issuance date but not after two years from the original issuance date, the Company issues or sells, or is deemed to have issued or sold, additional shares of common stock, options, warrants of convertible instruments, other than an exempt issuance, for a consideration per share (the Base Share Price) less than a price equal to the conversion price in effect immediately prior to such issuance or sale or deemed issuance or sale (such conversion price then in effect is reflected to herein as the Applicable Price) (the foregoing a Dilutive Issuance), then immediately after such Dilutive Issuance, the conversion price then in effect shall be reduced to an amount equal to the base share price. | F-16 | | **TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **DECEMBER 31, 2025 AND 2024** From and after the Original Issuance Date, cumulative dividends on each share of Series E Preferred shall accrue, whether or not declared by the Board and whether or not there are funds legally available for the payment of dividends, on a daily basis in arrears at the rate of 6% per annum based on a 360-day year on the Series E Stated Value plus all unpaid accrued and accumulated dividends thereon. On a pari passu basis with the holders of Series D Preferred that was issued and outstanding, upon the liquidation, dissolution or winding up of the business of the Company, whether voluntary or involuntary, the Series E Preferred is entitled to receive an amount per share equal to the Series E Stated Value and then receive a pro-rata portion of the remaining assets available for distribution to the holders of common stock on an as-converted to common stock basis. Until the date that such Series E Preferred holder no longer owns at least 50% of the Series E Preferred, the holders of Series E Preferred have the right to participate, pro rata, in each subsequent financing in an amount up to 25% of the total proceeds of such financing on the same terms, conditions and price otherwise available in such subsequent financing. Approval of at least a majority of the outstanding Series E Preferred is required to: (a) amend or repeal any provision of, or add any provision to, the Companys Articles of Incorporation or bylaws, or file any Certificate of Designation (however such document is named) or articles of amendment to create any class or any series of preferred stock, if such action would adversely alter or change in any respect the preferences, rights, privileges or powers, or restrictions provided for the benefit, of the Series E Preferred, regardless of whether any such action shall be by means of amendment to the Articles of Incorporation or bylaws or by merger, consolidation or otherwise or filing any Certificate of Designation, but the creation of a new security having rights, preferences or privileges senior to or on parity with the Series E Preferred in a future financing will not constitute an amendment, addition, alteration, filing, waiver or repeal for these purposes; (b) increase or decrease (other than by conversion) the authorized number of Series E Preferred; (c) issue any Series D Preferred, (d) issue any Series E Preferred in excess of 562,250 or (e) without limiting any provision under the Series E COD, whether or not prohibited by the terms of the Series E Preferred, circumvent a right of the Series E Preferred. These Series E Preferred issuances with redemption provisions that permit the issuer to settle in either cash or common stock, at the option of the issuer, were evaluated to determine whether temporary or permanent equity classification on the consolidated balance sheet was appropriate. As per the terms of the Amended Series E COD, the Company shall have the right but not the obligation to redeem all outstanding Series E Preferred (and not any part of the Series E Preferred) at a price equal to 115% of (i) the Series E Stated Value per share plus (ii) all unpaid dividends thereon. As such, since the Series E is redeemable upon the occurrence of an event that is within the Companys control, the Series E Preferred is classified as permanent equity. The Company concluded that the Series E Preferred represented an equity host and, therefore, the redemption feature of the Series E Preferred was considered to be clearly and closely related to the associated equity host instrument. The redemption features did not meet the net settlement criteria of a derivative and, therefore, were not considered embedded derivatives that required bifurcation. The Company also concluded that the conversion rights under the Series E Preferred were clearly and closely related to the equity host instrument. Accordingly, the conversion rights feature on the Series E Preferred were not considered an embedded derivative that required bifurcation. On June 17, 2025 and in July 2025, the Company entered into exchange agreements with holders of the Companys securities (the Exchange Agreements), including holders of shares of Series E Preferred (the Series E Preferred Shareholders) pursuant to which, the Series E Preferred Shareholders converted 21,418 Series E Preferred Shares and accrued dividends payable of $192,776 in exchange for the issuance of shares of Series J Preferred Stock, effective as of June 1, 2025 (See Series J preferred stock below**).** As of December 31, 2025 and 2024, the Company has accrued dividends payable of $9,741 and $191,104, respectively, which has been included in accrued expenses on the accompanying consolidated balance sheets. As of December 31, 2025 and 2024, 0 and 21,418 shares of Series E Preferred were issued and outstanding, respectively. **Series G preferred stock** On December 31, 2021, we entered into securities purchase agreements with investors pursuant to which the Company issued an aggregate of (i) 710,000 shares of a newly created series of preferred stock called the Series G Preferred and (ii) common stock purchase warrants to purchase up to 700,000,000 shares of the Companys common stock with an exercise price of $0.01 (the Series G Offering). In connection with the Series G Offering, on December 28, 2021, the Company filed the Certificate of Designation of Preferences, Rights and Limitations of Series G Convertible Preferred Stock (as amended, the Series G COD) with the Secretary of State of the State of Nevada designating 1,000,000 shares of preferred stock as Series G Preferred. The Series G Preferred has a stated value of $10.00 per share (the Series G Stated Value). The gross proceeds to the Company from the Series G Offering were $7,100,000. Pursuant to the Series G COD, | | | Each holder of Series G Preferred has the right to cast the number of votes equal to the number of whole shares of common stock into which the shares of Series G Preferred held by such holder are convertible as of the applicable record date. | | | | | | | | | | Unless prohibited by Nevada law governing distributions to stockholders, for a period of one-year beginning with the original issuance date, as defined, the Company shall have the right but not the obligation to redeem all outstanding Series G Preferred (and not any part of the Series G Preferred) at a price equal to 115% of (i) the Series G Stated Value per share plus (ii) all unpaid dividends thereon. If the Company fails to redeem all outstanding Series G Preferred on the redemption date, it shall be deemed to have waived its redemption right. | | | F-17 | | **TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **DECEMBER 31, 2025 AND 2024** Subject to a beneficial ownership limitation and customary adjustments for stock dividends and stock splits, each share of Series G Preferred shall be convertible into that number of shares of common stock calculated by dividing the Series G Stated Value of each share of Series G Preferred being converted by the applicable conversion price. The initial conversion price of the Series G Preferred is $0.01, subject to adjustment as provided below. In addition, the Company will issue a holder of Series G Preferred converting all or any portion of their Series G Preferred an additional sum (the Series G Make Good Amount) equal to $210 for each $1,000 of Series G Stated Value converted pro-rated for amounts more or less than $1,000 (the Series G Extra Amount). Subject to a beneficial ownership limitation, the Make Good Amount shall be paid in shares of common stock, as follows: the number of shares of common stock issuable as the Make Good Amount shall be calculated by dividing the Series G Extra Amount by the product of 80% times the average VWAP for the five trading days prior to the date a holder of Series G Preferred delivered a notice of conversion to the Company (the Conversion Date). If and whenever on or after the initial issuance date but not after two years from the original issuance date, the Company issues or sells, or is deemed to have issued or sold, additional shares of common stock, options, warrants of convertible instruments, subject to certain exceptions, for a consideration per share (the Base Share Price) less than a price equal to the applicable conversion price in effect immediately prior to such issuance or sale or deemed issuance or sale (such conversion price then in effect is reflected to herein as the Applicable Price) (the foregoing a Dilutive Issuance), then immediately after such Dilutive Issuance, the conversion price then in effect shall be reduced to an amount equal to the Base Share Price. From and after the original issuance date, cumulative dividends on each share of Series G Preferred shall accrue, whether or not declared by the Board and whether or not there are funds legally available for the payment of dividends, on a daily basis in arrears at the rate of 6% per annum based on a 360-day year on the Series G Stated Value plus all unpaid accrued and accumulated dividends thereon. On a pari passu basis with the holders of Series E Preferred, upon the liquidation, dissolution or winding up of the business of the Company, whether voluntary or involuntary, the Series G Preferred is entitled to receive an amount per share equal to the Series G Stated Value and then receive a pro-rata portion of the remaining assets available for distribution to the holders of common stock on an as-converted to common stock basis. The holders of Series G Preferred have the right to participate, pro rata, in each subsequent financing in an amount up to 40% of the total proceeds of such financing on the same terms, conditions and price otherwise available in such subsequent financing. Approval of at least two-thirds of the outstanding Series G Preferred is required to: (a) amend or repeal any provision of, or add any provision to, the Companys Articles of Incorporation or bylaws, or file any Certificate of Designation (however such document is named) or articles of amendment to create any class or any series of preferred stock, if such action would adversely alter or change in any respect the preferences, rights, privileges or powers, or restrictions provided for the benefit, of the Series G Preferred, regardless of whether any such action shall be by means of amendment to the Articles of Incorporation or bylaws or by merger, consolidation or otherwise or filing any Certificate of Designation, but the creation of a new security having rights, preferences or privileges senior to or on parity with the Series G Preferred in a future financing will not constitute an amendment, addition, alteration, filing, waiver or repeal for these purposes; (b) increase or decrease (other than by conversion) the authorized number of Series G Preferred; (c) issue any Series E Preferred or Series D Preferred, (d) issue any Series G Preferred in excess of 1,000,000 or (e) without limiting any provision under the Series G COD, whether or not prohibited by the terms of the Series G Preferred, circumvent a right of the Series G Preferred. Under the terms of the Series G Preferred, if the Company issues or sells (or is deemed to have issued or sold) additional shares of common stock for a price-per-share that is less than the price equal to the conversion price of the Series G Preferred held by the holders of the Series G Preferred immediately prior to such issuance, then the conversion price of the Series G Preferred will be reduced to the price per share of such dilutive issuance. As a result of the issuance of common stock on the exercise of certain Eligible Warrants at an exercise price of $0.002 per share, the conversion price for all 406,500 remaining outstanding Series G Preferred shall henceforth be $0.002 per share. The Series G Preferred share issuances with redemption provisions that permit the issuer to settle in either cash or common stock, at the option of the issuer, were evaluated to determine whether temporary or permanent equity classification on the consolidated balance sheet was appropriate. As per the terms of the Series G preferred stock agreements, the Company shall have the right but not the obligation to redeem all outstanding Series G Preferred (and not any part of the Series E Preferred) at a price equal to 115% of (i) the Series G Stated Value per share plus (ii) all unpaid dividends thereon. As such, since Series G Preferred is redeemable upon the occurrence of an event that is within the Companys control, the Series G Preferred is classified as permanent equity. The Company concluded that the Series G Preferred represented an equity host and, therefore, the redemption feature of the Series G Preferred was considered to be clearly and closely related to the associated equity host instrument. The redemption features did not meet the net settlement criteria of a derivative and, therefore, were not considered embedded derivatives that required bifurcation. The Company also concluded that the conversion rights under the Series G Preferred were clearly and closely related to the equity host instrument. Accordingly, the conversion rights feature on the Series G Preferred were not considered an embedded derivative that required bifurcation. During the year ended December 31, 2024, the Company issued 1,408,335,128 shares of its common stock in connection with the conversion of 69,000 shares of Series G Preferred and accrued dividends payable of $128,208. The conversion ratio was based on the Series G COD. During the year ended December 31, 2025, there were no conversions of Series G Preferred into common stock. Effective June 1, 2025, the Company entered into the Exchange Agreements with holders of the Companys securities, including holders of shares of Series G Preferred (the Series G Preferred Shareholders), pursuant to which, the Series G Preferred Shareholders agreed to convert 406,500 shares of Series G Preferred and accrued dividends of $925,047 in exchange for the issuance of Series J Preferred (See Series J preferred stock below**).** As of December 31, 2025 and 2024, the Company had accrued dividends payable of $0 and $785,845, respectively, which have been included in accrued expenses on the accompanying consolidated balance sheets. As of December 31, 2025 and 2024, 0 and 406,500 shares of Series G Preferred were issued and outstanding, respectively. | F-18 | | **TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **DECEMBER 31, 2025 AND 2024** **Series H preferred stock** On September 20, 2022, the Company filed the Certificate of Designation of Preferences, Rights and Limitations of Series H Convertible Preferred Stock (the Series H COD) with the Secretary of State of the State of Nevada designating 35,000 shares of preferred stock as Series H (Series H Preferred). The Series H Preferred has no stated value and pursuant to the Series H COD: | | | Each share of Series H Preferred shall have no voting rights. | | | | | | | | | | Each share of Series H Preferred shall be convertible into 10,000 shares of the Companys common stock, subject to the beneficial ownership limitations. The Beneficial Ownership Limitation shall be 4.99% of the number of shares of the common stock outstanding immediately after giving effect to the issuance of shares of common stock issuable upon conversion of the Series H Preferred held by such holder. The holder of Series H Preferred and the Company, by mutual consent, may increase or decrease the Beneficial Ownership Limitation provisions of the Series H COD, provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the common stock outstanding immediately after giving effect to the issuance of shares of common stock upon conversion of the Series H Preferred held by the Holder. | | | | | | | | | | Upon the liquidation, dissolution or winding up of the business of the Company, whether voluntary or involuntary, each holder of Series H Preferred stock shall be entitled to receive out of assets of the Company legally available therefor the same amount that a holder of the Companys common stock would receive on an as-converted basis (without regard to the beneficial ownership limitation or any other conversion limitations hereunder). The right of a Series H Holder to receive such payment shall be preferential to the right of holders of common stock but shall be subordinate to the rights of the holder of any other series of preferred stock of the Company. | | In connection with the acquisitions of Freight Connections, on September 16, 2022, the Company issued 32,374 shares of Series H Preferred. These shares were valued in the amount of $1,910,066 based on the as if converted fair value of the underlying common stock, or $0.0059 per share, based on the quoted closing price of the Companys common stock on the measurement date. As of both December 31, 2025 and 2024, 32,374 shares of Series H Preferred were outstanding. **Series J preferred stock** On May 5, 2025, we filed with the Secretary of State of the State of Nevada (the Nevada Secretary of State) the Certificate of Designation of Preferences, Rights, and Limitations of Series J Senior Convertible Preferred Stock to designate 1,000,000 shares of the Companys authorized and unissued preferred stock as Series J Preferred (the Series J Certificate). The Series J Certificate became effective upon its filing with the Nevada Secretary of State. On September 5, 2025, the Company filed an Amendment (the Series J Certificate Amendment) to the Series J Certificate with the Secretary of State of the State of Nevada. Each share of Series J Preferred has a stated value of $100. Beginning on June 1, 2025, and on each successive six-month anniversary, holders of the shares of the Series J Preferred are entitled to receive dividends, in either cash or stock at the option of the Company, equal to 10% of the aggregate stated value of each such holders Series J Preferred. Such dividends accrue and compound daily based on a 360-day year. Holders of the Series J Preferred are entitled to vote on matters in which the holders of shares of the Companys common stock are entitled to vote on an as-converted basis, which assumes each holder of Series J Preferred have converted their shares of Series J Preferred into shares of common stock. In addition, so long as any shares of Series J Preferred are outstanding, the Company cannot, without the affirmative vote of the holders of a majority of the then-outstanding shares of Series J Preferred, which vote as a separate class, (a) alter or change adversely the powers, preferences or rights given to the Series J Preferred or alter or amend the Series J Certificate of Designation, (b) amend the articles of incorporation of the Company or any other charter documents of the Company in any manner that adversely affects any rights of the Series J Preferred or (c) enter into any agreement with respect to any of the foregoing. The Series J Preferred, with respect to the preferences as to dividends, distributions and payments upon the liquidation, dissolution and winding up of the Company, are senior in rank to all shares of capital stock of the Company that are outstanding on the date that shares of Series J Preferred are issued. At any time from and after the date of issuance of any Series J Preferred, a holder of Series J Preferred may convert all, or any part, of the outstanding Series J Preferred, at any time at such holders option, into shares of common stock at an initial conversion price of $0.001, which is subject to proportional adjustment upon the occurrence of any stock split, stock dividend, stock combination and/or similar transactions. Subject to any applicable rules and regulations of the Nasdaq Capital Market, the Company has the right to, at any time, with the written consent of a majority of the holders of outstanding Series J Preferred, lower the conversion price to any amount. Each holder of Series J Preferred is prohibited from converting their shares of Series J Preferred if, after giving effect to the issuance of such shares of common stock, such holder together with its affiliates would beneficially own more than 4.99% of the outstanding common stock. A holder of Series J Preferred may increase such beneficial ownership limitation to 9.99% upon notice to the Company, with such increase becoming effective on the 61st day after such notice is delivered to the Company. In addition, holders of Series J Preferred are prohibited from converting their shares of Series J Preferred if such conversion would result in an amount of common stock being issued to such holder that is equal to more than 10% of the trading volume of the common stock, however, if the conversion price at the time of conversion is greater than $0.40, then such prohibition will not apply. During such time as any Series J Preferred are outstanding, if the Company declares or makes any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of common stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction), other than dividends or issuances of rights pursuant to the Companys existing rights agreement to holders of common stock, at any time after the issuance of the Series J Preferred, then, in each such case, the holder will be entitled to participate in such distribution to the same extent that the holder would have participated therein if the holder had held the number of shares of common stock acquirable upon complete conversion of the Series J Preferred (without regard to any limitations on conversion hereof, including without limitation, the beneficial ownership limitation) immediately before the date of which a record is taken for such distribution, or, if no such record is taken, the date as of which the record holders of shares of common stock are to be determined for the participation in such distribution. | F-19 | | **TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **DECEMBER 31, 2025 AND 2024** The shares of Series J Preferred are redeemable upon the occurrence of certain triggering events, excluding events, facts or circumstances that occurred prior to or were in existence as of the date of the Series J Certificate. Upon such triggering events, holders of Series J Preferred have the option to cause the Company to redeem all or part of such holders shares of Series J Preferred at a price per share equal to 110% of the stated value of such shares. The Company accounts for its Series J preferred stock subject to possible redemption in accordance with the guidance in ASC Topic 480 Distinguishing Liabilities from Equity. Conditionally redeemable Series J Preferred stock that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Companys control is classified as temporary equity. The Companys Series J Preferred stock features certain redemption rights that are considered to be outside of the Companys control and subject to occurrence of uncertain future events. Accordingly, Series J preferred stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders deficit section of the Companys consolidated balance sheets as of December 31, 2025. In connection with the recording of the 10% redemption premium, the Company increased the redemption value of the Series J preferred stock by $964,230, which was reflected as an offset against additional paid-in capital. In the event of any liquidation, dissolution or winding up of the Company, each holder of Series J Preferred is entitled to an amount in cash equal to 120% of the aggregate stated value of Series J Preferred held by such holder. In addition, holders of Series J Preferred are entitled to any accrued and unpaid dividends upon an event of liquidation, dissolution or winding up of the Company. On September 5, 2025, the Company filed an Amendment (the Series J Certificate Amendment) to the Series J Certificate with the Secretary of State of the State of Nevada to, among other things, amend what constitutes a triggering event to exclude events, facts or circumstances that occurred prior to or were in existence as of the date of the Series J Certificate. Between June 17, 2025 and June 30, 2025, the Company entered into Exchange Agreements with the holders of the Companys securities, pursuant to which (i) an aggregate of 21,418 shares of Series E Preferred and accrued dividends of $191,160 and 406,500 shares of Series G Preferred and accrued dividends of $925,047 were exchanged, and (ii) common stock purchase warrants to purchase up to 593,642,860 shares of common stock (the Cancelled Warrants) were cancelled for an aggregate of 54,719 shares of Series J Preferred, effective as of June 1, 2025. During July 2025, the Company entered into Series J Settlement Agreements with former holders of shares of Series E Preferred and Series G Preferred, pursuant to which, such former shareholders converted accrued dividends of $1,616 and cancelled warrants to purchase up to 35,000,000 shares of common stock in exchange for the issuance of an aggregate of 47 shares of Series J Preferred. In connection with the exchange of Series E Preferred and Series G Preferred and outstanding accrued dividends to Series J Preferred, during the year ended December 31, 2025, the Company recorded a gain on debt extinguishment of $429,585, respectively, which is included in gain on debt extinguishment on the accompanying consolidated statement of operations. Additionally, on June 1, 2025, in connection with the exchange of shares of Series E Preferred and Series G Preferred and the cancellation of the Cancelled Warrants, the Company determined that all such securities were extinguished as a result of such exchange and cancellation. As a result, the difference between the carrying amount of the shares of Series E Preferred and Series G Preferred and the fair value of the shares of Series J Preferred, in an amount equal to $800,380 was recognized as a deemed contribution in the year ended December 31, 2025 that increased additional paid-in capital and income attributable to common shareholders in calculating net income (loss) per common share in accordance with ASC 260-10. Between May 30, 2025 and September 30, 2025, the Company entered into Series J Settlement Agreements with the 2025 Creditors. Pursuant to the Series J Settlement Agreements, the 2025 Creditors, not including the Related Party Creditors, settled an aggregate of $625,000 in outstanding notes and accrued interest of $27,260 in exchange for the issuance of an aggregate of 6,522 shares of Series J Preferred, effective as of June 1, 2025. In connection with the exchange of such outstanding notes and related accrued interest to Series J Preferred, during the year ended December 31, 2025, the Company recorded a gain on debt extinguishment of $587,080, which is included in gain on debt extinguishment on the accompanying consolidated statement of operations. On May 30, 2025, the Company entered into Series J Settlement Agreements with the Related Party Creditors. Pursuant to the Series J Settlement Agreements, the Related Party Creditors settled an aggregate of $1,547,838 in outstanding notes and accrued interest payable of $396,695 in exchange for the issuance of an aggregate of 19,446 shares of Series J Preferred, effective as of June 1, 2025. In connection with the exchange of the outstanding notes and related accrued interest payable for shares of Series J Preferred, the Company calculated a gain on debt extinguishment of $1,750,080, which was netted against additional paid-in capital and accordingly, no gain or loss was recognized on these settlements. Between May 30, 2025 and July 21, 2025, the Company entered into Series J Settlement Agreements with certain vendors of the Company (the Vendors), pursuant to which the Vendors settled an aggregate of $550,395 in outstanding accounts payable and accrued expense payable in exchange for the issuance of an aggregate of 5,504 shares of Series J Preferred, effective as of June 1, 2025. Additionally, on July 21, 2025, the Company entered into the A&S Settlement Agreement in connection with the A&S Claim in which all claims aggregating $125,000 were resolved by the issuance of 1,250 shares of the Companys Series J Senior Convertible Preferred Stock. On July 21, 2025, the Company entered into a Series J Settlement Agreement with a vendor (the July Vendor), pursuant to which the July Vendor agreed to settle $379,961 in outstanding accounts payable and accrued expense payable in exchange for the issuance of an aggregate of 3,800 shares of Series J Preferred. On July 21, 2025, the Company entered into the Litigation Settlement Agreement with SCS, pursuant to which the Company settled $36,000 in money the Company owed to SCS in exchange for the issuance of 360 shares of Series J Preferred Stock, effective as of July 23, 2025. As of December 31, 2024, the settlement amount of $36,000 had been recorded and reflected in accounts payable on the accompanying consolidated balance sheet. In connection with the exchange of outstanding accounts payable and accrued expense to shares of Series J Preferred, during the year ended December 31, 2025, the Company recorded a gain on debt extinguishment of $982,210, which is included in gain on debt extinguishment on the accompanying consolidated statement of operations. | F-20 | | **TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **DECEMBER 31, 2025 AND 2024** On August 28, 2025, the Company issued aggregate of 4,775 shares of Series J Preferred to the Companys chief executive officer and certain consultants as compensation for services rendered to the Company. The Series J Preferred was valued at the as if converted fair value of $47,750 using the quoted price of the common stock on the issuance date. In connection with these issuances, for the year ended December 31, 2025, the Company recorded stock-based compensation of $40,000 and stock-based professional fees of $7,750. On October 15, 2025, the Company entered into settlement agreements (the Board Settlement Agreements) with certain directors of the Company pursuant to which the directors settled an aggregate of $374,491 in outstanding liabilities, in exchange for the issuance of an aggregate of 3,785 shares of Series J Preferred. In connection with the exchange of the outstanding liabilities for shares of Series J Preferred, the Company calculated a loss on debt extinguishment of $4,000 related to the issuance of an additional 40 shares of Series J Preferred to one director. Additionally, the Company calculated a gain on debt extinguishment of $337,042, which was netted against additional paid-in capital and accordingly, no gain or loss was recognized on these settlements. On November 12, 2025, the Company entered into exchange agreements (the November Exchange Agreements) with certain holders (the November Exchange Holders) of outstanding warrants to purchase up to an aggregate of 235,714,285 shares of common stock, pursuant to which the November Exchange Holders agreed to cancel, and we cancelled effective as of such date, their respective outstanding warrants in exchange for the issuance of an aggregate of 209 shares of Series J Preferred. In connection with the exchange of outstanding warrants to shares of Series J Preferred, during the year ended December 31, 2025, the Company recorded a loss on debt extinguishment of $20,900, which is included in gain on debt extinguishment on the accompanying consolidated statement of operations. On December 15, 2025, the Company entered into a settlement agreement (the CEO Settlement Agreement) with Sebastian Giordano, with respect to certain outstanding liabilities (the Outstanding Liabilities). Pursuant to the CEO Settlement Agreement, Mr. Giordano agreed to settle an aggregate of $1,400,712 in Outstanding Liabilities in exchange for the issuance of an aggregate of 10,007 shares of the Companys Series J Preferred Stock. In connection with the exchange of the Outstanding Liabilities for shares of Series J Preferred, the Company calculated a gain on debt extinguishment of $400,012 related to the forgiveness of $400,000 of accrued severance pay due, which was included in additional paid-in capital and no gain or loss was recognized. Additionally, the Company calculated a gain on debt extinguishment of $100,070, which was netted against additional paid-in capital and accordingly, no gain or loss was recognized on these settlements. **Common stock** Shares issued in connection with conversion of Series G preferred shares During the year ended December 31, 2024, the Company issued 1,408,335,128 shares of its common stock in connection with the conversion of 69,000 shares of Series G Preferred and accrued dividends payable of $128,208. The conversion ratio was based on the Series G COD. Shares issued for compensation During the years ended December 31, 2025 and 2024, aggregate accretion of stock-based compensation expense on the above granted shares, which is net of the reversal of previously recognized stock-based expense due to forfeiture, amounted to $0 and $111,949, respectively. Total unrecognized compensation expense related to these vested and unvested shares of common stock on December 31, 2025 amounted to $0. The following table summarizes activity related to non-vested shares: SUMMARY OF ACTIVITY RELATED TO NON-VESTED SHARES | | | Number of Non-Vested Shares | | | Weighted Average Grant Date Fair Value | | | | Non-vested, December 31, 2023 | | | 61,063,216 | | | $ | 0.011 | | | | Shares vested | | | (61,063,216 | ) | | | (0.011 | ) | | | Non-vested, December 31, 2024 and 2025 | | | - | | | $ | - | | | Warrants Warrant activities for the years ended December 31, 2025 and 2024 are summarized as follows: SUMMARY OF WARRANT ACTIVITIES | | | Number of Shares Issuable Upon Exercise of Warrants | | | Weighted Average Exercise Price | | | Weighted Average Remaining Contractual Term (Years) | | | Aggregate Intrinsic Value | | | | Balance Outstanding December 31, 2023 | | | 948,452,679 | | | $ | 0.008 | | | | 2.81 | | | $ | - | | | | Exercised | | | (2,281,190 | ) | | | (1.60 | ) | | | - | | | | - | | | | Balance Outstanding December 31, 2024 | | | 946,171,489 | | | $ | 0.004 | | | | 1.56 | | | | - | | | | Cancelled | | | (864,357,146 | ) | | | (0.002 | ) | | | | | | | - | | | | Expired | | | (28,957,200 | ) | | | (0.072 | ) | | | - | | | | - | | | | Balance Outstanding December 31, 2025 | | | 52,857,143 | | | $ | 0.002 | | | | 0.79 | | | $ | - | | | | Exercisable, December 31, 2025 | | | 52,857,143 | | | $ | 0.002 | | | | 0.79 | | | $ | - | | | | F-21 | | **TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **DECEMBER 31, 2025 AND 2024** Stock options Stock option activities for the years ended December 31, 2025 and 2024 are summarized as follows: SUMMARY OF STOCK OPTION ACTIVITIES | | | Number of Options | | | Weighted Average Exercise Price | | | Weighted Average Remaining Contractual Term (Years) | | | Aggregate Intrinsic Value | | | | Balance Outstanding December 31, 2023 | | | 80,000 | | | $ | 8.85 | | | | 0.33 | | | $ | - | | | | Granted/Cancelled | | | (80,000 | ) | | | - | | | | - | | | | - | | | | Balance Outstanding December 31, 2024 | | | - | | | | - | | | | - | | | | - | | | | Granted/Cancelled | | | - | | | | - | | | | - | | | | - | | | | Balance Outstanding December 31, 2025 | | | - | | | $ | - | | | | - | | | $ | - | | | | Exercisable, December 31, 2025 | | | - | | | $ | - | | | | - | | | $ | - | | | **NOTE 6 COMMITMENTS AND CONTINGENCIES** Legal matters From time to time, we may be involved in litigation or receive claims arising out of our operations in the normal course of business. Other than discussed below, we are not currently a party to any other legal proceeding or are aware of claims that we believe would, if decided adversely, have a material adverse effect on our business, financial condition, or operating results. We also disclose any recent settlements and accruals taken in connection therewith, as of December 31, 2025. **SCS, LLC v. TLSS** On November 17, 2020, a former financial consultant to the Company, SCS, LLC, filed an action against the Company in the Circuit Court of the 15th Judicial Circuit, Palm Beach County, Florida, captioned SCS, LLC v. Transportation and Logistics Systems, Inc. The case was assigned Case No. 50-2020-CA-012684. In this action, SCS alleges that it entered into a renewable six-month consulting agreement with the Company dated September 5, 2019, and that the Company failed to make certain monthly payments due thereunder for the months of October 2019 through March 2020, summing to $42,000. The complaint alleges claims for breach of contract, quantum meruit, unjust enrichment and account stated. In February 2025, the parties agreed to settle all claims in this matter and thereafter executed a Confidential Settlement Agreement and Mutual Release effective on February 13, 2025. On July 18, 2025, the court entered an Order which determined that the settlement of $36,000 in money the Company owed to SCS claimed in exchange for the issuance of 360 shares of Series J Preferred Stock was fair to SCS. On July 21, 2025, the court entered a final order which dismissed the action with prejudice. In July 2025, the Company issued 360 shares of Series J Preferred to SCS, LLC pursuant to the settlement of this action, which reduced accounts payable by $36,000. **Shareholder Derivative Action** On June 25, 2020, the Company was served with a putative stockholder derivative action filed in the Circuit Court of the 15th Judicial Circuit in and for Palm Beach County, Florida (the Court) captioned SCS, LLC, derivatively on behalf of Transportation and Logistics Systems, Inc. v. John Mercadante, Jr., Douglas Cerny, Sebastian Giordano, Ascentaur LLC and Transportation and Logistics Systems, Inc. The action has been assigned Case No. 2020-CA-006581. The plaintiff in this action, SCS, alleges it is a limited liability company formed by a former chief executive officer and director of the Company, Lawrence Sands. The complaint alleges that between April 2019 and June 2020, the immediately prior chairman and chief executive officer of the Company, Mercadante, the former chief development officer of the Company, Cerny, and, since February 2020, the Companys then restructuring consultant who is now chairman and chief executive officer of the Company, Giordano, breached fiduciary duties owed to the Company. Prior to becoming CEO, Giordano rendered his services to the Company through the final named defendant in the action, Ascentaur LLC. The complaint alleges that Mercadante breached duties to the Company by, among other things, requesting, in mid-2019, that certain preferred equity holders, including SCS, convert their preferred shares into Company common stock in order to facilitate an equity offering by the Company and then not consummating that offering. The complaint also alleges that Mercadante and Cerny caused the Company to engage in purportedly wasteful and unnecessary transactions such as taking merchant cash advances (MCA) on disadvantageous terms. The complaint further alleges that Mercadante and Cerny issued themselves over two million shares of common stock without consideration. The complaint seeks unspecified compensatory and punitive damages on behalf of the Company for breach of fiduciary duty, negligent breach of fiduciary duty, constructive fraud, civil conspiracy and the appointment of a receiver or custodian for the Company. | F-22 | | **TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **DECEMBER 31, 2025 AND 2024** Company management tendered the complaint to the Companys directors and officers liability carrier for defense and indemnity purposes, which coverage is subject to a $250,000 self-insured retention. Each of the individual defendants and Ascentaur LLC has advised that they vigorously deny each and every allegation of wrongdoing alleged in the complaint. Among other things, Mercadante asserts that he made every effort to consummate an equity offering in late 2019 and early 2020 and could not do so solely because of the Companys precarious financial condition. Mercadante also asserts that he made clear to SCS and other preferred equity holders, before they converted their shares into common stock, that there was no guarantee the Company would be able to consummate an equity offering in late 2019 or early 2020. In addition, Mercadante and Cerny assert that they received equity in the Company on terms that were entirely fair to the Company and entered into MCA transactions solely because no other financing was available to the Company. By order dated September 15, 2022, the Circuit Judge assigned to this case dismissed the original Complaint in the matter, finding (a) that SCS had failed to adequately allege it has standing and (b) that the complaint fails to adequately allege a cognizable claim. The dismissal was without prejudice, meaning SCS could attempt to replead its claims. On October 5, 2022, SCS filed an Amended Complaint in this action. By order dated December 19, 2022, the Circuit Judge assigned to this case once again dismissed the case, finding (a) that SCS still failed to adequately allege it has standing and (b) that the complaint still fails to adequately allege a cognizable claim. Once again, however, the dismissal was without prejudice. On January 18, 2023, SCS filed a Second Amended Complaint in this action. All defendants once again moved to dismiss the pleading or in the alternative for summary judgment on it in their favor. The Court heard argument on that motion on March 9, 2023. On May 15, 2023, the Court issued a summary order denying the defendants motion to dismiss. On June 1, 2023, all defendants moved for reconsideration of the May 15 order. On November 28, 2023, the Court denied the motion for reconsideration. In February 2025, the parties agreed to settle all claims in this matter and thereafter executed a Confidential Settlement Agreement and Mutual Release effective on February 13, 2025. On February 20, 2025, pursuant to a Stipulation of Dismissal with Prejudice, the Court entered a final order of dismissal with prejudice and dismissed the action with prejudice. **Jose R. Mercedes-Mejia v. Shypdirect LLC, Prime EFS LLC et al.** On August 4, 2020, an action was filed against Shypdirect, Prime EFS and others in the Superior Court of New Jersey for Bergen County captioned Jose R. Mercedes-Mejia v. Shypdirect LLC, Prime EFS LLC et al. The case was assigned docket number BER-L-004534-20. In this action, the plaintiff seeks reimbursement of his medical expenses and damages for personal injuries following an accident with a box truck leased by Shypdirect and subleased to Prime EFS and being driven by a Prime EFS employee, in which the plaintiffs ankle was injured. Plaintiff has thus far transmitted medical bills exceeding $789,000. Prime EFS and Shypdirect demanded their vehicle liability carrier assume the defense of this action. To date, the carrier has not done so, allegedly because, among other reasons, the box truck was not on the list of insured vehicles at the time of the accident. On November 9, 2020, Prime EFS and Shypdirect filed their answer to the complaint in this action and also filed a third-party action against the insurance company in an effort to obtain defense and indemnity for this action. On May 21, 2021, Prime EFS and Shypdirect also filed an action in the Supreme Court, State of New York, Suffolk County (the Suffolk County Action), seeking defense and indemnity for this claim from the insurance brokerage, TCE/Acrisure LLC, which sold the County Hall insurance policy to Shypdirect. On August 19, 2021, the Plaintiff filed a motion for leave to file a First Amended Complaint to name four (4) additional parties as defendants TLSS, Shyp CX, Inc., Shyp FX, Inc. and Cougar Express, Inc. In the claim against TLSS, Plaintiff seeks to pierce the corporate veil and hold TLSS responsible for the alleged liabilities of Prime and/or Shypdirect as the supposed alter ego of these subsidiaries. In the claims against Shyp CX, Inc., Shyp FX, Inc. and Cougar Express, Inc., Plaintiff seeks to hold these entities responsible for the alleged liabilities of Prime and/or Shypdirect on a successor liability theory. On September 16, 2021, each of these entities filed papers in opposition to this motion. On September 24, 2021, the Court granted Plaintiffs motion for leave to amend the complaint, thus adding TLSS, Shyp CX, Inc., Shyp FX, Inc. and Cougar Express, Inc. as Defendants. On October 22, 2021, Acrisure stipulated to consolidate the Suffolk County Action into and with the Bergen County action. On November 22, 2021, all Defendants filed their Answer to the First Amended Complaint. On November 3, 2021, Prime EFS and Shypdirect refiled their Third-Party Complaint against TCI/Acrisure in the Bergen County action. On December 23, 2021, Acrisure filed its Answer to the Third-Party Complaint, denying its material allegations. On March 2, 2022, Plaintiff sought and was granted leave to file a Second Amended Complaint, bringing claims against Prime and Shypdirects vehicle liability carrier, County Hall (for discovery) as well as the producing broker, TCE/Acrisure. Plaintiff also asserted additional alter ego allegations against TLSS. | F-23 | | **TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **DECEMBER 31, 2025 AND 2024** On February 15, 2023, Plaintiff filed a motion for leave to file a Third Amended Complaint in this action, seeking to assert claims against TLSSs former CEO, John Mercadante, also on a pierce the corporate veil theory. On March 9, 2023, TLSS, Prime and Shypdirect opposed the motion for leave to add Mercadante, arguing that any claim against Mercadante would be both futile and time-barred. On March 31, 2023, the Court denied Plaintiffs motion to add Mr. Mercadante as a party. In January and February 2023, numerous depositions were taken in the case, including those of Messrs. Giordano and Mercadante. On September 16, 2024, the court entered an order granting Plaintiffs motion for final judgment by default on liability against Defendants Shypdirect, Prime EFS, Shyp CX, Shyp FX, and Cougar Express. To date, to the best of the Companys knowledge, information and belief, no discovery has been taken in this action which would permit the imposition of alter ego liability on TLSS for the subject accident. To date, to the best of the Companys knowledge, information and belief, no discovery has been taken in this action which would permit the imposition of successor liability on Shyp CX, Inc., Shyp FX, Inc. and/or Cougar Express, Inc. for the subject accident. Under a so-called MCS-90 reimbursement endorsement to the County Hall policy, TLSS believes that Prime and Shypdirect may have up to $750,000 in coverage under a 1980 federal law under which County Hall is require[d] to pay damages for certain claims or suits that are not covered by the policy. (See Endorsement CHI 290 (02/19) to County Hall policy effective May 31, 2019.) All discovery in this case was completed on or before August 31, 2024. There were pending cross-motions for summary judgment filed by Plaintiff, Defendants/Third-Party Plaintiffs Jose A. Mercedes-Mejia, Prime EFS, Shypdirect, LLC, and TLSS, and Defendant/Third-Party Defendant County Hall Insurance. The insurance broker, Acrisure, had also filed a motion on the malpractice claim against it. On November 8, 2024, the court granted Defendant/Third-Party Plaintiff Ryder Truck Rental, Inc.s motion for summary judgment. On December 6, 2024, the parties engaged in a mediation session. While a settlement was not reached on the day the mediation session was held, the parties continued to discuss a potential resolution. On January 31, 2025, Plaintiff and TLSS, Shypdirect, and Prime EFS executed a binding term sheet which settled the matter with no liability on the part of TLSS, Shypdirect or Prime EFS and requires that a Stipulation of Dismissal will be filed with the court which dismisses all claims with prejudice. On February 10, 2025, the trial proceeding scheduled for February 10, 2025, was cancelled. On March 31, 2025, a Stipulation of Dismissal with Prejudice was filed with the Court in which it was stipulated and agreed that the Plaintiffs Complaint and any and all other Crossclaims, Counterclaims, and/or Third-Party Claims are dismissed with prejudice and without costs by and between all parties. **Josh Perez v. Cougar Express, Inc.** An attorney for a former Cougar Express (CE) employee, Josh Perez (Perez), has advised CE that he has filed a charge of discrimination against CE with the U.S. Equal Employment Opportunity Commission (EEOC). Perez allegedly is asserting claims against CE for: gender discrimination under Title VII and the New York State Human Rights Law (NYSHRL); pregnancy/childbirth discrimination under Title VII of the federal Civil Rights Act of 1964, as amended; retaliation under Title VII and NYSHRL; and familial status discrimination under NYSHRL. However, CE has not received a copy, nor any notification, of the filing. Perez was employed by CE as a dock worker beginning on March 8, 2022, and last worked September 27, 2022. He alleges that in or around July 2022, he informed CE that he was expecting a child. Perez has not provided any details regarding the individual(s) with CE he allegedly informed. On September 27, 2022, Perez requested that CE complete the employer section of his New York Paid Family Leave (PFL) paperwork, which CE did. Thereafter, Perez ceased communicating with CE. Further, CE did not receive any confirmation that Perez had in fact filed for PFL or that his PFL was approved. Because CE did not hear from Perez or receive any confirmation concerning his application for or approval of PFL, CE concluded that Perez had resigned. Another worker was hired to fill Perezs former position. Then, on or about December 27, 2022, Perez contacted CE attempting to return to work and was informed that there was no position for him. CE categorically denies Perezs allegations and any purported wrongdoing. Because this matter is apparently pending with the EEOC and CE has neither received a copy of the filing nor any notification of the filing, the Company cannot evaluate the likelihood of an adverse outcome or estimate the Companys liability, if any, in connection with it. **Emerson Swan v. Severance Trucking Co., Inc.** On April 1, 2024, a judgment was entered against Severance Trucking on behalf of Emerson Swan, Inc. (Emerson) in the amount of $96,226, including prejudgment interest, statutory costs and legal fees. Emerson, which was a customer of Severance Trucking, claimed that an employee of Severance Trucking stole $75,209 of Emersons products while under Severance Truckings control. We did not accrue this claim and believe it is not liable since the accusation was made prior to the Severance Trucking acquisition date in January 2023. | F-24 | | **TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **DECEMBER 31, 2025 AND 2024** **Ryder Truck Rental, Inc. v. Severance Trucking Co., Inc.** On April 30, 2024, Severance Trucking received a letter from Ryder Truck Rental, Inc. requesting payment in the amount of $581,507 comprised of outstanding unpaid Truck Lease and Service Agreement charges of $55,136 in open invoices, $399,177 in early termination charges and $134,194 in attorneys fees. As of December 31, 2025 and 2024, such amounts are recorded as a liability of Severance Trucking and included in liabilities of discontinued operations. **Akabas & Sproule v. Transportation and Logistics Systems, Inc.** On March 19, 2025, the Companys former law firm, Akabas & Sproule, filed a lawsuit against the Company in the Supreme Court of the State of New York, New York County, alleging three causes of action: (i) breach of contract; (ii) account stated, and (iii) unjust enrichment/quantum meruit. Akabas & Sproule seeks $86,571 in compensatory damages, $11,027 in interest through February 28, 2025, attorneys fees and costs, taxable costs of suit, and pre-judgment and post-judgment interest. On July 21, 2025, the Company entered into a Settlement Agreement and Mutual Release (the A&S Settlement Agreement) with Akabas & Sproule seeking $86,571 in compensatory damages, $14,274 in interest and not less than $24,155 in costs of collection, for a total of $125,000 (the A&S Claim) in which all claims were resolved by the issuance of 1,250 shares of Series J Preferred and upon the satisfaction of certain obligations and conditions, the action will be dismissed with prejudice. The A&S Settlement Agreement was on substantially the same form as the Liability Settlement Agreements (see Note 5). In August 2025, the Company issued 1,250 shares of Series J Preferred to Akabas & Sproule and, on August 18, 2025, a Stipulation of Discontinuance with Prejudice was agreed to and filed by the parties with the Court, which reduced accounts payable by $125,000. **Diesel Direct, LLC v. Severance Trucking a/k/a Severance Trucking Co., Inc.** On May 19, 2025, Diesel Direct. LLC filed a lawsuit against Severance Trucking in the Commonwealth of Massachusetts, Superior Court Department of the Trial Court, for Severance Truckings alleged failure to pay for diesel fuel deliveries between October 23, 2023 and February 14, 2024. Diesel Direct alleges four counts against Severance Trucking for breach of contract, breach of implied covenant of good faith and fair dealing, quantum meruit/unjust enrichment, and violation of M.G.L. c. 93A, and seeks judgment for monetary damages in the amount of $58,020.30, plus interest, attorneys fees, and cost of collection, as well as an award of punitive, exemplary, and/or multiple damages to the extent permitted by law. On June 23, 2025, Diesel Direct filed a request for entry of default which was entered on June 26, 2025. On July 15, 2025, Diesel Direct filed a motion for default judgment. As of December 31, 2025, the amount of $57,199 is recorded as a liability of Severance Trucking and included in liabilities of discontinued operations. On October 23, 2025, a damages assessment hearing was held by the Court via video conference, but no decision has been issued to date. **RX Benefits v. TLSS Ops** On October 1, 2025, a former vendor of TLSS Ops filed a complaint against the Company in the Superior Court of New Jersey Law Division, Bergen County, captioned RX Benefits v. TLSS Operations Holding Company, Inc. The case was assigned Case No. BER L-006620-25. In this action, RX Benefits demands payment of contractual amounts due plus legal fees and interest aggregating $149,627. As of December 31, 2025 and 2024, the amounts due of $149,618 and $111,618, respectively, have been accrued and are included liabilities of discontinued operations on the accompany consolidated balance sheets. Employment agreements On January 4, 2022, the Company and Mr. Sebastian Giordano entered into an employment agreement for the Chief Executive Officer (the CEO Employment Agreement) with a term extending through December 31, 2025, which provides for annual compensation of $400,000 as well as annual discretionary bonuses based on the Companys achievement of performance targets, grants of options, restricted stock or other equity (with prior grants made to Ascentaur), at the discretion of the Board, up to 5% of the outstanding common stock of the Company, vesting over the term of the CEO Employment Agreement, business expense reimbursement and benefits as generally made available to the Companys executives. On March 1, 2024, the Board, appointed Sebastian Giordano, the Companys Chairman and Chief Executive Officer, to the additional offices of Chief Financial Officer and Treasurer of the Company. Due to the Companys financial condition, beginning on February 16, 2024, Mr. Giordano agreed to temporarily defer cash compensation and receipt of benefits until a date that was to be mutually agreed upon; however, such compensation and other benefits due to Mr. Giordano under the CEO Employment Agreement, continue to accrue. On May 15, 2024, the Company received a termination notice (the Termination Notice), for the nonpayment of compensation and other benefits due under such CEO Employment Agreement. Under the terms of the CEO Employment Agreement, the Company had until July 15, 2024, to cure such default or else Mr. Giordanos termination pursuant to the Termination Notice would be effective on July 15, 2024. The Company was unable to cure such default; however, on July 15, 2024, the Company and Mr. Giordano agreed to extend the termination date until August 15, 2024. On August 15, 2024, the Company and Mr. Giordano further extended the termination date to November 15, 2024. On November 14, 2024, the parties further extended the termination date to February 15, 2025. On February 10, 2025, the parties further extended the termination date to May 31, 2025. and on May 5, 2025 the parties further extended the termination date to August 31, 2025. On August 26, 2025, the parties further extended the termination date to November 30, 2025. Through the extended termination date, all existing wage and benefit provisions of the CEO Employment Agreement shall continue to accrue; however, the claims under the Termination Notice remain in force, including that any granted, but unvested Restricted Stock Units, if any, have been deemed fully vested under the Termination Notice. In addition, the remaining 30,531,608 of unvested Restricted Stock Units (RSUs) of the 122,126,433 RSUs originally granted to Mr. Giordano in March 2022 were deemed fully vested as of the date the CEO Employment Agreement terminated. On December 15, 2025, we entered into a Retention Agreement (the Retention Agreement) with Mr. Giordano, pursuant to which Mr. Giordano agreed to continue to act as the Chairman, Chief Executive Officer and Chief Financial Officer of the Company and the Company agreed to pay Mr. Giordano up to $500,000 in cash bonuses upon the occurrence of certain events and the satisfaction or waiver of certain conditions. Pursuant to the Retention Agreement, upon the closing of a qualified financing in which the Company raises at least $1,000,000 in gross proceeds, we will pay Mr. Giordano a $250,000 cash bonus, and upon the closing of a financing in which we raise at least $2,500,000 in gross proceeds, we will pay Mr. Giordano an additional $250,000 cash bonus. In order for Mr. Giordano to receive such payments, among other things, Mr. Giordano was required to enter into the Settlement Agreement. In addition, the Company and Mr. Giordano agreed to, within 60 days of December 15, 2025, negotiate in good faith and enter into a new employment agreement with respect to services performed by Mr. Giordano for the Company on or after January 1, 2026. | F-25 | | **TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **DECEMBER 31, 2025 AND 2024** In connection with the entry into the Retention Agreement, on December 15, 2025, we entered into the CEO Settlement Agreement with Sebastian Giordano, with respect to certain outstanding liabilities incurred through December 31, 2025 (the Outstanding Liabilities). Pursuant to the CEO Settlement Agreement, Mr. Giordano agreed to settle an aggregate of $1,400,712 in Outstanding Liabilities in exchange for the issuance of an aggregate of 10,007 shares of the Companys Series J Preferred Stock. As of December 31, 2025 and 2024, in connection with the extension of the term of the CEO Employment Agreement, the amount of compensation and benefit amounts due to Mr. Giordano amounts to the following, which is included in accrued compensation and related benefits on the accompanying consolidated balance sheet: SCHEDULE OF ACCRUED COMPENSATION AND BENEFIT | | | December 31, 2025 | | | December 31, 2024 | | | | (i) Unpaid base salary since February 16, 2024 | | $ | - | | | $ | 378,875 | | | | (ii) Accrued vacation pay | | | - | | | | 104,244 | | | | (iii) Health insurance premium since February 16, 2024 | | | - | | | | 22,980 | | | | (iv) Severance payment due (a) | | | - | | | | 400,000 | | | | Total | | $ | - | (b) | | $ | 906,099 | | | | | (a) | The above amount consists of the severance payment that became due and payable under the terms of the CEO Employment Agreement as a result of the Companys failure to cure the default as discussed above, which is equal to Mr. Giordanos annual base salary for the one-year subsequent to the termination of the CEO Employment Agreement ($400,000). | | | | (b) | Converted to Series J Preferred in December 2025 (see above). | | **** **NOTE 7 RELATED PARTY TRANSACTIONS AND BALANCES** Notes payable related parties On April 14, 2023, the Board approved 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 provided for interest at 12% per annum. However, upon default, the interest rate shall be 17% per annum. The maturity date of the financing was December 31, 2023, provided, however, the Company may prepay a loan at any time without premium or penalty. Each loan under the Credit Facility was made on promissory notes. During April 2023, the Company received initial loans under the Credit Facility, in the following amounts: (a) $500,000 from Mr. Mercadante on April 17, 2023; and (b) $100,000 from Mr. Giordano on April 21, 2023. On May 21, 2024, the Company received default notices for its failure to pay outstanding principal and interest due on unsecured promissory notes that were issued on April 17, 2023, to Mr. Mercadante and on April 21, 2023, to Mr. Giordano with respect to $542,575 and $108,708, respectively, in aggregate principal and interest due on December 31, 2023. As such, the interest rate on both notes increased to 17% per annum calculated as of January 1, 2024. On October 3, 2023, and November 28, 2023, the Company issued unsecured promissory notes to Mr. Mercadante and from an individual, who is affiliated to Mr. Mercadante in the principal amounts of $500,000 and $60,000, respectively. Each unsecured promissory note matured nine months and one year from the date of issuance and accrues interest at a rate per annum of 12%, respectively. On July 1, 2024, the Company received a default notice for its failure to pay outstanding principal and interest due on the October 3, 2023, unsecured promissory note to Mr. Mercadante in the principal amount of $500,000 and was due on June 30, 2024. As such, the interest rate on such note increased to 17% per annum as of July 1, 2024. Additionally, on December 9, 2024, the Company received a default notice for its failure to pay outstanding principal and interest due on the November 28, 2024 unsecured promissory note to an individual, who is affiliated to Mr. Mercadante in the principal amount of $60,000 and was due on November 28, 2024. As such, the interest rate on such note was increased to 17% per annum as of November 29, 2024. On February 6, 2024 and February 15, 2024, the Company issued unsecured promissory notes to Mr. Mercadante in the principal amounts of $64,534 and $319,195, respectively. Each unsecured promissory note matures one year from the date of issuance and accrues interest at a rate per annum of 12%. On February 7, 2025 and February 21, 2025, the Company received a default notice for its failure to pay outstanding principal and interest due on unsecured promissory notes that were issued on February 6, 2024 and February 15, 2024 to Mr. Mercadante in the principal amount of $64,534 and $319,195, respectively, and were due on February 6, 2025 and February 15, 2025, respectively. As such, the interest rate on such notes was increased to 17% per annum as of February 7, 2025, and February 15, 2025, respectively. On February 21, 2024, and February 23, 2024, the Company issued unsecured promissory notes to Mr. Newton and Mr. Benton, both members of the Board, in the principal amounts of $1,000 and $3,109, respectively. Each unsecured promissory note matured on September 30, 2024, and accrued interest at the rate per annum of 12%. On October 1, 2024, both Mr. Newton and Mr. Benton each filed a notice of default, resulting in an increase in the rate of interest to 17% per annum as of the date of default. On May 31, 2025 and effective June 1, 2025, the Company entered into Series J Settlement Agreements with the Related Party Creditors. Pursuant to the Series J Settlement Agreements, the Related Party Creditors agreed to settle an aggregate of $1,547,838 in outstanding notes and accrued interest payable of $396,695 in exchange for the issuance of an aggregate of 19,446 shares of Series J Preferred. In connection with the exchange of the outstanding notes and related accrued interest payable for shares of Series J Preferred, the Company calculated a gain on debt extinguishment of $1,750,080, which was netted against additional paid-in capital and accordingly, no gain or loss was recognized on these settlements. As of December 31, 2025 and 2024, aggregate notes payable to related parties in the principal amounts of $0 and $1,547,838, respectively, were outstanding. As of December 31, 2025 and 2024, the aggregate accrued interest payable to related parties amounted to $0 and $290,133, respectively, which has been included in accrued expenses related parties on the accompanying consolidated balance sheets. For the years ended December 31, 2025, and 2024, interest expense related parties amounted to $106,563 and $221,258, respectively. **** | F-26 | | **** **TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **DECEMBER 31, 2025 AND 2024** **** **NOTE 8 DISCONTINUED OPERATIONS** On December 1, 2023, the Company ceased operations of its Freight Connections subsidiary and, in connection with the Freight Bankruptcy, all of the TLSS-FC and Freight Connections assets were assigned to the Freight Trustee for the liquidation and unwinding of the business. The Freight Trustee has been charged with liquidating the assets for the benefit of the TLSS-FC and Freight Connections creditors pursuant to the relevant provisions of the United States Bankruptcy Code. As a result of the Freight Bankruptcy, the Freight Trustee assumed all authority to manage TLSS-FC and Freight Connections. For these reasons, effective December 1, 2023, the Company relinquished control of TLSS-FC and Freight Connections. Therefore, the Company deconsolidated TLSS-FC and Freight Connections effective with the Freight Bankruptcy on December 3, 2023, and the Company recognized a loss on deconsolidation of $391,558. Additionally, on February 27, 2024, the Cougar Bankruptcy occurred. The Company and its other subsidiaries ceased all remaining logistic and transportation service operations in mid-February 2024. As a result, accordingly, the Company has classified the related assets and liabilities associated with its logistics and transportation services business as discontinued operations in its consolidated balance sheets and the results of its logistics and transportation services business has been presented as discontinued operations in its consolidated statements of operations for all periods presented as the discontinuation of its business had a major effect on its operations and financial results. Unless otherwise noted, discussion in the other notes to consolidated financial statements refers to the Companys continuing operations. The following table presents the major classes of assets and liabilities of the discontinued operations related to the Subsidiaries: SCHEDULE OF ASSETS AND LIABILITIES OPERATIONS OF DISCONTINUED OPERATIONS | | | December 31, | | | December 31, | | | | | | 2025 | | | 2024 | | | | Assets of discontinued operations: | | | | | | | | | | | Accounts receivable, net | | $ | - | | | $ | 419 | | | | Assets of discontinued operations, current portion | | | - | | | | 419 | | | | Total assets of discontinued operations | | $ | - | | | $ | 419 | | | | | | | | | | | | | | | Liabilities of discontinued operations: | | | | | | | | | | | Notes payable, current portion | | $ | 2,467,432 | | | $ | 2,467,432 | | | | Accounts payable | | | 1,206,575 | | | | 1,286,931 | | | | Accrued expenses | | | 753,166 | | | | 394,198 | | | | Lease liabilities, current portion | | | 2,522,042 | | | | 2,522,042 | | | | Liabilities of discontinued operations, current portion | | | 6,949,215 | | | | 6,670,603 | | | | Total liabilities of discontinued operations | | $ | 6,949,215 | | | $ | 6,670,603 | | | The following table summarizes the results of operations of discontinued operations: | | | 2025 | | | 2024 | | | | | | Year Ended December 31, | | | | | | 2025 | | | 2024 | | | | Revenues | | $ | - | | | $ | 1,371,993 | | | | Cost of revenues, excluding depreciation and amortization | | | - | | | | 1,452,171 | | | | Gross loss | | | - | | | | (80,178 | ) | | | Operating expenses | | | (33,257 | ) | | | (744,942 | ) | | | Impairment loss | | | - | | | | (555,628 | ) | | | Other expenses | | | (374,553 | ) | | | (337,761 | ) | | | Loss from discontinued operations | | $ | (407,810 | ) | | $ | (1,718,509 | ) | | Accounts receivable On December 31, 2025 and 2024, accounts receivable, net included in assets from discontinued operations consisted of the following: SCHEDULE OF ACCOUNTS RECEIVABLE NET FROM DISCONTINUED OPERATIONS | | | December 31, 2025 | | | December 31, 2024 | | | | Accounts receivable | | $ | - | | | $ | 419 | | | | Allowance for credit estimated losses | | | - | | | | - | | | | Accounts receivable, net | | $ | - | | | $ | 419 | | | Property and equipment, net For the years ended December 31, 2025 and 2024, depreciation expense amounted to $0 and $39,018, respectively, and are included in loss from discontinued operations. | F-27 | | **TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **DECEMBER 31, 2025 AND 2024** Due to the Cougar Express Bankruptcy and the assignment of all of the Cougar Express assets to the Cougar Express Trustee for liquidation and unwinding of the business, during the year ended December 31, 2024, the Company recognized a loss on deconsolidation of the Cougar Express property and equipment, net of $296,493, which is included in loss from discontinued operations on the accompanying consolidated statements of operations. During the year ended December 31, 2024, the Company wrote down property and equipment to net realizable value and recorded an impairment loss of $555,628, which is included in loss from discontinued operations on the accompanying consolidated statements of operations. Notes Payable On December 31, 2025 and 2024, notes payable included in liabilities of discontinued operations consisted of the following: SCHEDULE OF NOTES PAYABLE INCLUDED IN LIABILITIES | | | December 31, 2025 | | | December 31, 2024 | | | | Principal amounts | | $ | 2,467,432 | | | $ | 2,467,432 | | | | Less: current portion of notes payable | | | (2,467,432 | ) | | | (2,467,432 | ) | | | Notes payable long-term | | $ | - | | | $ | - | | | *JFK Cartage acquisition promissory note* On July 31, 2022, in connection with the acquisition of JFK Cartage, JFK Cartage issued a promissory note in the amount of $696,935. Principal amount of $98,448 was paid prior to December 31, 2022. The remaining balance of $598,487 was payable in three annual installments of $199,496, with interest at 5% per annum, payable on July 31, 2023, July 31, 2024, and July 31, 2025, respectively. On August 28, 2023, and effective on July 31, 2023, the Company and the JFK Cartage Seller entered into a First Amendment to Secured Promissory Note (the Amended Note) to extend the first annual installment due on July 31, 2023 which was treated as a note modification. Pursuant to the Amended Note, the Company paid or should have paid: | | (i) | An interest payment in the amount of $6,501 which was paid no later than July 28, 2023: | | | | (ii) | 23 equal weekly payments of interest only, each in the amount of $1,571 (each a Weekly Interest Payment) payable commencing on July 28, 2023, with the last Weekly Interest Payment due on or before December 29, 2023; | | | | (iii) | $199,495.67 was payable on December 31, 2023; | | | | (iv) | $199,495.67 was payable on July 31, 2024, plus interest at 5% per annum for the 7 months of January 2024 through July 2024, in the total amount of $11,637.25 and, | | | | (v) | $l99,499.68 was payable on July 31, 2025, plus interest at 5% per annum for the 12 months from August 2024 through July 2025 in the total amount of $9,975. | | On December 31, 2025 and 2024, the principal amount related to the Amended Note was $598,487, which is included in liabilities of discontinued operations on the accompanying consolidated balance sheets. This note is in default. *Severance Trucking acquisition promissory note* On January 31, 2023, in connection with the acquisition of the Severance entities, Severance Trucking issued a promissory note in the amount of $1,572,939 to the Severance Sellers (Secured Severance Note). The Secured Severance Note is a secured promissory note which accrues interest at the rate of 12% per annum. The entire unpaid principal under the Secured Severance Note was originally due and payable in three equal payments on August 1, 2023, February 1, 2024, and August 1, 2024, respectively, together with all accrued and unpaid interest thereunder, unless paid sooner. The Secured Severance Note was secured solely by the assets of Severance Trucking and a corporate guaranty from TLSS. During the fourth quarter ended December 31, 2023, the Company repaid $181,660 of this note. On December 31, 2025 and 2024, the principal amount related to this note was $1,395,768 and $1,395,768, respectively, which is included in liabilities of discontinued operations on the accompanying consolidated balance sheets. Subsequent to December 31, 2023, Severance Trucking ceased its operations, and all fixed assets of the Company were voluntarily surrendered to the Severance Sellers. On January 26, 2024, the Company received a: (i) Notice of Default and Demand Under Promissory Note and Security Agreement (Payment Default Notice) in connection with the Companys failure to timely pay in accordance with that certain loan agreement (the Severance Trucking Note) entered into by and among the Severance Sellers, collectively as lender (Severance Trucking Lenders) and TLSS-STI, Severance Trucking, Severance Warehouse and McGrath, collectively as promissors (each a Severance Trucking Debtor, and collectively, the Severance Trucking Debtors) and (ii) Notice of Default and Demand Under Guaranty (Guaranty Default Notice and together with the Payment Default Notice, the Default Notices), in connection with an Absolute, Unconditional and Continuing Guaranty, dated February 1, 2023 between TLSS, as guarantor (the Guarantor), and the Severance Trucking Lenders, which guaranty secured the Severance Trucking Note. The Severance Trucking Note became immediately due and payable upon the Severance Trucking Debtors failure to make a payment in the amount of Fifty-Three Thousand Dollars ($53,000) on January 1, 2024 due under the Severance Trucking Note (the Severance Trucking January Payment). The Severance Trucking Lenders demanded that the Severance Trucking Debtors and the Guarantor make the immediate full payment of (i) the entire principal balance due under the Severance Trucking Note, together with all interest accrued thereon, and (ii) a late charge of five percent (5%) of the Severance Trucking January Payment. The Severance Trucking Lenders also noted that if the full payment due under the Severance Trucking Note was not made to the Severance Trucking Lenders, then the Severance Trucking Lenders could immediately thereafter pursue all their rights and remedies under the Severance Trucking Note, including, without limitation, liquidation of all of the collateral of the Severance Trucking Debtors. If the Severance Trucking Lenders took such action, then, the Severance Trucking Debtors would be responsible for all costs and expenses in connection with the collection and enforcement (Expenses) of the payment due under the Default Notices, and that such Expenses shall accrue interest at a rate of 18% per annum. On February 26, 2024, the Company voluntarily surrendered the unencumbered owned fixed assets of Severance Trucking operations to the Severance Trucking Lenders. | F-28 | | **TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **DECEMBER 31, 2025 AND 2024** Equipment and auto notes payable On September 22, 2022, JFK Cartage entered into a promissory note for the purchase of a truck in the amount of $61,979. The note is due in forty-eight monthly installments of $1,645 which began in August 2022. The note was secured by the truck. On December 31, 2025 and 2024, the equipment note payable to this entity amounted to $41,624 and $41,624, respectively, which is included in liabilities of discontinued operations on the accompanying consolidated balance sheets. As of December 31, 2025, the trucks securing this loan were forfeited and returned to the lender. In connection with the acquisition of the Severance entities, on January 31, 2023, the Company assumed an equipment note payable due to an entity amounting to $23,000. On December 31, 2025 and 2024, equipment note payable to this entity amounted to $16,511, which is included in liabilities of discontinued operations on the accompanying consolidated balance sheets. As of December 31, 2025, the trucks securing this loan were forfeited and returned to the lender. On April 1, 2023, Severance Trucking entered into a promissory note for the purchase of a yard truck in the amount of $50,634. The note is due in 48 monthly installments of $1,254 which began in April 2023. The note was secured by the truck. On December 31, 2025 and 2024, the equipment note payable to this entity amounted to $40,537 and $40,537, respectively, which is included in liabilities of discontinued operations on the accompanying consolidated balance sheets. As of December 31, 2025, the trucks securing this loan were forfeited and returned to the lender. On April 14, 2023, Severance Trucking entered into a promissory note for the purchase of a truck in the amount of $53,275. The note is due in 48 monthly installments of $1,379 which began in April 2023. The note was secured by the truck. On December 31, 2025 and 2024, the equipment note payable to this entity amounted to $45,079 and $45,079, respectively, which is included in liabilities of discontinued operations on the accompanying consolidated balance sheets. As of December 31, 2025, the trucks securing this loan were forfeited and returned to the lender. On July 13, 2023, Severance Trucking entered into a promissory note for the purchase of three trucks in the amount of $278,085. The note is due in 60 monthly installments of $5,762 which began in August 2023. The note is secured by the trucks. On December 31, 2025 and 2024, the equipment note payable to this entity amounted to $253,277 and $253,277, respectively, which is included in liabilities of discontinued operations on the accompanying consolidated balance sheets. As of December 31, 2025, the trucks securing this loan were forfeited and returned to the lender. On September 8, 2023, Severance Trucking entered into a promissory note for the purchase of two trucks in the amount of $83,398. The note is due in 48 monthly installments of $2,107 which began in October 2023. The note is secured by the trucks. On December 31, 2025 and 2024, the equipment note payable to this entity amounted to $76,149 and $76,149, respectively, which is included in liabilities of discontinued operations on the accompanying consolidated balance sheets. As of December 31, 2025, the trucks securing this loan were forfeited and returned to the lender. *Operating and Financing Lease Right-Of-Use (Rou) Assets and Operating and Financing Lease Liabilities* In February 2024, the Company abandoned all remaining leased premises and as of December 31, 2023, the Company wrote off its remaining right of use assets and related security deposits. On December 31, 2025 and 2024, operating and financing lease liabilities related to the ROU assets are included in liabilities of discontinued operations and are summarized as follows: SCHEDULE OF OPERATING LEASE LIABILITY TO ROU ASSETS | | | December 31, 2025 | | | December 31, 2024 | | | | Lease liabilities related to office leases and revenue equipment right of use assets | | $ | 2,522,042 | | | $ | 2,522,042 | | | | Less: current portion of lease liabilities | | | (2,522,042 | ) | | | (2,522,042 | ) | | | Lease liabilities long-term | | $ | - | | | $ | - | | | *Other liabilities of discontinued operations* On April 1, 2024, a judgment was entered against Severance Trucking on behalf of Emerson in the amount of $96,226, including prejudgment interest, statutory costs, and legal fees. Emerson, which was a customer of Severance Trucking, claimed that an employee of Severance Trucking stole $75,209 of Emersons products while under Severance Truckings control. We did not accrue this claim and believe it is not liable since the accusation was made prior to the Severance Trucking acquisition date in January 2023. On April 30, 2024, Severance Trucking received a letter from Ryder Truck Rental, Inc. requesting payment in the amount of $581,507 comprised of outstanding unpaid Truck Lease and Service Agreement charges of $55,136 in open invoices, $399,177 in early termination charges and $134,194 in attorneys fees. As of and December 31, 2025 and 2024, such amounts are recorded as a liability of Severance Trucking and included in liabilities of discontinued operations. | F-29 | | **TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES** **NOTES TO CONSOLIDATED FINANCIAL STATEMENTS** **DECEMBER 31, 2025 AND 2024** On August 24, 2024, TLSS Ops received a Notice of Default and Demand for Payment from RxBenefits, Inc. (RxBenefits) due to the Companys failure to pay certain invoices, plus interest and late service charges due under the Administrative Services Agreement by and between RxBenefits and TLSS Operations Holding, in the amount of $111,618. On October 1, 2025, RxBenefits filed a complaint against the Company in the Superior Court of New Jersey Law Division, Bergen County, captioned RX Benefits v. TLSS Operations Holding Company, Inc. In this action, RX Benefits demands payment of contractual amounts due plus legal fees and interest aggregating $149,627. As of December 31, 2025 and 2024, the amounts due of $149,618 and $111,618, respectively, have been accrued and are included liabilities of discontinued operations on the accompany consolidated balance sheets. **NOTE 9 INCOME TAXES** The Company accounts for income tax using the liability method prescribed by ASC 740, Income Taxes. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the year in which the differences are expected to reverse. The deferred tax assets on December 31, 2025 and 2024 consist only of net operating loss carryforwards. The net deferred tax asset has been fully offset by a valuation allowance because of the uncertainty of the attainment of future taxable income. The items accounting for the difference between income taxes at the effective statutory rate and the Companys effective tax rate for the years ended December 31, 2025 and 2024 were as follows: SCHEDULE OF RECONCILIATION OF EFFECTIVE INCOME TAX RATE | | | Year Ended December 31, 2025 ($) | | | Year Ended December 31, 2025 (%) | | | Year Ended December 31, 2024 ($) | | | Year Ended December 31, 2024 (%) | | | | | | | | | | | | | | | | | | | Income tax provision (benefit) at U.S. statutory rate | | $ | 7,105 | | | | 21.00 | % | | $ | (803,139 | ) | | | (21.00 | )% | | | Income tax provision (benefit) State | | | 2,199 | | | | 6.50 | % | | | (248,591 | ) | | | (6.50 | )% | | | Permanent items | | | 13,131 | | | | 38.8 | % | | | 30,786 | | | | 0.8 | % | | | Effect of change in valuation allowance | | | (22,435 | ) | | | (66.3 | )% | | | 1,020,943 | | | | 26.7 | % | | | Effective income tax rate | | $ | - | | | | 0.00 | % | | $ | - | | | | 0.00 | % | | The Companys approximate net deferred tax asset as of December 31, 2025 and 2024 was as follows: SCHEDULE OF COMPONENTS OF DEFERRED TAX ASSETS | | | December 31, 2025 | | | December 31, 2024 | | | | Deferred Tax Asset: | | | | | | | | | | | Net operating loss carryover | | $ | 12,469,883 | | | $ | 12,492,318 | | | | Less: valuation allowance | | | (12,469,883 | ) | | | (12,492,318 | ) | | | Net deferred tax asset | | $ | - | | | $ | - | | | The net operating loss carryforward was approximately $47,851,000 on December 31, 2025. The Company provided a valuation allowance equal to the net deferred income tax asset as of December 31, 2025 and 2024 because it was not known whether future taxable income will be sufficient to utilize the loss carryforward. During the year ended December 31, 2025, the valuation allowance decreased by $22,435. Additionally, the future utilization of the net operating loss carryforward to offset future taxable income is subject to an annual limitation as a result of ownership changes that may occur in the future. The 2017 estimated loss carry forward of $120,600 expires on December 31, 2037. Subsequent to 2017, all estimated loss carry forwards may be carried forward indefinitely subject to annual usage limitations. The Company does not have any uncertain tax positions or events leading to uncertainty in a tax position. The Companys 2021 to 2025 Corporate Income Tax Returns are subject to Internal Revenue Service examination. **NOTE 10 SUBSEQUENT EVENTS** On January 9, 2026, the Company entered into an unsecured non-convertible promissory note (the January 2026 Note) in the principal amount of $75,000, with interest at the rate of 10% per annum accruing and due at maturity six months following the issuance date, with C/M Capital Master Fund, LP (the Lender) for the primary purpose of funding a portion of the costs related to: (i) the preparation and filing of the Companys Registration Statement on Form S-1 to register the resale of shares of common stock, par value $0.001 per share, issuable upon conversion of certain shares of the Companys Series J Senior Convertible Preferred Stock, par value $0.001; (ii) preparation and submission of any requisite filings with the Securities and Exchange Commission and the OTC Expert Market; (iii) such tax-related and other activities as may be necessary or legally required from time to time to restore the Company to good standing with requisite taxing authorities; (iv) transfer agent costs, and (v) fees for routine litigation matters and other legal fees in the ordinary course of business. The Company may repay the Note upon maturity or prior to maturity with the mutual agreement of the Lender. The Note also contains customary events of default, which include, without limitation, failure to pay principal, interest or other charges in respect of the Note when due at maturity or otherwise, failure to satisfy any covenant in the Note or other agreements between the Company and the Lender or any other creditor, breach of representations and warranties set forth in the Note or any transaction document executed contemporaneously with the Note, and certain judgment defaults, events of bankruptcy or insolvency of the Company. Upon the occurrence of such an event of default under the Note, the Lender has the right to demand repayment of the Note in full upon five (5) business days notice to the Company. In the event that full payment is not made upon the expiry of a thirty (30) day period, a default penalty equal to 5.0% per month during the period of default in excess of the 10% interest rate will apply to the entire amount of the Note outstanding, including any accrued but unpaid interest. The Lender may then, at its sole discretion, declare the entire then-outstanding principal amount of the Note and any accrued but unpaid interest due thereunder immediately due and payable, in which event the Lender may, at its sole discretion, take any action it deems necessary to recover amounts due under the Note. Concurrently with the issuance of the Note, the Company also entered into a letter agreement of even date (the Letter Agreement) with the Lender setting forth, among other items, the intended use of proceeds of the Note as described above. | F-30 | | **Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.** Not Applicable **Item 9A. Controls and Procedures.** Evaluation of Disclosure Controls and Procedures Based on their evaluation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as amended) our management, with the participation of our Chief Executive Officer who also serves as our Chief Financial Officer, has concluded that our disclosure controls and procedures were ineffective as of the end of the period covered by this report for the purpose of ensuring that the information required to be disclosed by us in this Annual Report is made known to them by others on a timely basis, and that the information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, in order to allow timely decisions regarding required disclosure, and that such information is recorded, processed, summarized, and reported by us within the time periods specified in the SECs rules and instructions for Form 10-K. The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board are described below and were identified by our Chief Executive Officer who also serves as our Chief Financial Officer in connection with the above annual evaluation in consultation with the Companys independent public accounting firm. Management believes that these material weaknesses did not have an effect on our financial results. However, management believes that these material weaknesses resulted in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods. Management recognizes that its controls and procedures would be substantially improved if the Company had adequate staffing and an audit committee and as such is actively seeking to remediate this issue. Our Chief Executive Officer who also serves as our Chief Financial Officer does not expect that our disclosure controls and procedures or our internal controls over financial reporting will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. Managements Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of our Chief Executive Officer, who also serves as our Chief Financial Officer, the Company conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal ControlIntegrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that (a) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (b) provide reasonable assurance that transactions are recorded as necessary to permit the preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the Company are being made only in accordance with authorizations of our management and directors; and (c) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Companys assets that could have a material effect on the financial statements. Based on our evaluation under the framework in Internal ControlIntegrated Framework (2013), our management concluded that our internal control over financial reporting was not effective as of December 31, 2025 due to the following material weaknesses: | | 1) | We currently lack multiple levels of management review on complex business, accounting, and financial reporting issues; and | | | | | | | | | 2) | We currently lack adequate segregation of duties as a result of our limited financial resources to support hiring of personnel. | | However, we do not believe the material weaknesses described above caused any significant misreporting of our consolidated financial condition and results of operations for the year ended December 31, 2025. Management Plan to Remediate Material Weaknesses Due to a lack of working capital in 2025 and 2024 and the departure of key accounting staff, we were not and are not able to implement a remediation plan in the foreseeable future. We plan on implementing policies and procedures to address and mitigate all material weaknesses if we receive additional funding and are able to expand our accounting staff. We are committed to the improvement of our internal control processes and will continue to review our financial reporting controls and procedures diligently and vigorously. As we continue to evaluate and work to improve our internal control over financial reporting, we may determine to take additional measures to address control deficiencies. Changes in Internal Control over Financial Reporting There were no changes in our internal control over financial reporting, except as discussed above (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the fourth quarter of 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. This Annual Report does not include an attestation report of the Companys independent registered public accounting firm regarding internal control over financial reporting. Managements report was not subject to attestation by the Companys registered public accounting firm pursuant to rules of the SEC that permit the Company to provide only the managements report in this Annual Report. **Item 9B. Other Information.** None. **Item 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections.** Not applicable. | 18 | | **PART III** **Item 10. Directors, Executive Officers, and Corporate Governance.** **Directors and Executive Officers** Below are the names of and certain information regarding the Companys current executive officers and directors: | Name | | Age | | Position | | Date Named to Board of Directors or as Executive Officer | | | Sebastian Giordano | | 68 | | Chief Executive Officer, Chief Financial Officer, Treasurer and Chairman of the Board of Directors | | January 4, 2022 | | | Charles Benton | | 75 | | Director | | January 20, 2022 | | | John Mercadante | | 81 | | Director | | April 16, 2019 | | | Norman Newton | | 59 | | Director | | January 20, 2022 | | *Sebastian Giordano - Chief Executive Officer, Chief Financial Officer, Treasurer and Chairman of the Board of Directors* Since 2002, Mr. Giordano, age 68, has been the Chief Executive Officer of Ascentaur, LLC (Ascentaur), providing C-Level consulting services to a diverse roster of predominantly technology-centric clients, including start-ups, turnarounds, and established businesses across many industries, including providing such consulting services to TLSS from 2020 through 2021, prior to becoming the Companys Chief Executive Officer and Chairman in January 2022 and its Chief Financial Officer in March 2024. From2013 to 2018, he served as Chief Executive Officer of WPCS International Incorporated, (Nasdaq:WPCS), a low-voltage contracting company. *Charles Benton Director* Mr. Benton, age 75, has served as a director and Chairman of the Audit Committee of Vision Hydrogen Corp. (OTC: VIHD), a company focused on the production, storage, and distribution of hydrogen for the green energy economy supply chain, from January 2019. From February 2014 to January 2018, Mr. Benton has served as Chairman of the Audit Committee of the Board of Directors of WPCS International Incorporated (Nasdaq:WPCS), a design-build engineering firm focused on the deployment of wireless networks and related services including site design, technology integration, electrical contracting, construction, and maintenance, and served as Chairman of the Board from April 2017 through January 2018. *John Mercadante - Director* Mr. Mercadante, age 81, served as the Chairman of the Board, Chief Executive Officer and Chief Financial Officer of the Company from April 16, 2019 until January 3, 2024. Since January 2022, Mr. Mercadante has been a consultant and a manager of his personal investments. Mr. Mercadante co-founded Leisure Line, Inc., a motor coach company serving New York City and Atlantic City, New Jersey, in 1970 and served as its Chief Executive Officer for a ten-year period through the sale of the company to Golden Nugget in 1980. *Norman Newton - Director* Mr. Newton, age 59, has served as the President and Chief Executive Officer of AmeriCasa Solutions, LLC, a vertically integrated provider of housing to the Hispanic Community in the United States, since 2017. Since 2008, Mr. Newton has served as the Managing Director of Newton Vision Corporation, a privately held investment and consulting company with deep experience in business process reengineering, optimization, and digital transformation. **Family Relationships** There are no family relationships among our directors and executive officers. **Involvement in Certain Legal Proceedings** Except as set forth below, our directors and executive officers have not been involved in any of the following events during the past 10 years: | | 1. | any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time, except that: (i) Mr. Mercadante was Chief Executive Officer of Prime EFS and Shypdirect at the time each filed an ABC when it filed for bankruptcy and (ii) Mr. Giordano was Chief Executive Officer of TLSS-FC and Freight Connections at the time each filed for bankruptcy and Chief Executive Officer and Chief Financial Officer of Cougar Express at the time it filed for bankruptcy; | | | 19 | | | | 2. | any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); | | | | | | | | | 3. | being subject to any order, judgment, or decree, not subsequently reversed, suspended, or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; | | | | | | | | | 4. | being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated; | | | | | | | | | 5. | being the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of: (i) any federal or state securities or commodities law or regulation; or (ii) any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease- and-desist order, or removal or prohibition order; or (iii) any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or | | | | | | | | | 6. | being the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member. | | **Code of Ethics** We have not yet adopted a Code of Ethics. We have had minimal operations and business, generated no revenues, and have a limited management team, comprising one sole executive officer. Due to this, we believe that the adoption of a **Code** of **Ethics** would not serve its primary purpose in providing a standard of conduct, as the development, execution, and enforcement of such a code would be carried out by the same persons and only those to whom the code applies. At such time as we commence more significant business operations, the current officers and directors will recommend that such a code be adopted. **Independent Directors** Mr. Charles Benton, Mr. John Mercadante, and Mr. Norman Newton are independent directors as defined under the rules of the SEC relating to director independence requirements. **Board of Directors and Board Committees** Directors are elected to serve until their successors are elected and qualified. Directors are elected by a plurality of the votes cast at the annual meeting of stockholders and hold office until the expiration of the term for which he or she was elected and until a successor has been elected and qualified. Our Board currently has three committees: the Audit Committee, the Compensation Committee, and the Nomination Committee. As of the date of this Annual Report, the members and Chairs of our standing Board committees were: | | | Audit | | Compensation | | Nominating | | | Independent Directors | | | | | | | | | Charles Benton | | Chair | | X | | | | | John Mercadante | | | | Chair | | X | | | Norman Newton | | X | | | | Chair | | | | | | | | | | | | Non-Independent Director | | | | | | | | | Sebastian Giordano | | | | | | | | **Audit Committee** All Audit Committee members are independent which satisfies the OTC Expert Market listing standards and the applicable SEC rules and regulations. Our Board of Directors has determined that one of the members of the Audit Committee, Mr. Benton, meets the definition of an audit committee financial expert as established by the SEC. The Audit Committee provides assistance to the Board in fulfilling its oversight responsibilities relating to the quality and integrity of the financial reports of the Company. The Audit Committee has the sole authority to appoint, review and discharge our independent accountants, and has established procedures for the receipt, retention, response to and treatment of complaints regarding accounting, internal controls, and audit matters. In addition, the Audit Committee is responsible for: | | | reviewing the scope, results, timing, and costs of the audit with our independent accountants and reviewing the results of the annual audit examination and any accompanying management letters; | | | | | | | | | | assessing the independence of the outside accountants on an annual basis, including receipt and review of a written report from the independent accountants regarding their independence consistent with the independence standards of the board; | | | | | | | | | | reviewing and approving the services provided by the independent accountants; | | | | | | | | | | overseeing the internal audit function; and | | | | | | | | | | reviewing our significant accounting policies, financial results and earnings releases, and the adequacy of our internal controls and procedures. | | | 20 | | **Compensation Committee** The Compensation Committee assists the Board in fulfilling its oversight responsibilities relating to executive compensation, employee compensation and benefit programs and plans, and leadership development and succession planning. In addition, the Compensation Committee is responsible for: | | | reviewing the performance of our Chief Executive Officer; | | | | | | | | | | determining the compensation and benefits for our Chief Executive Officer and other executive officers; | | | | | | | | | | establishing our compensation policies and practices; | | | | | | | | | | administering our incentive compensation and stock plans (except for the issuance of securities to non-employee directors for services which is administered by the Board); and | | | | | | | | | | approving the adoption of material changes to or the termination of our benefit plans. | | The Compensation Committee reviews and discusses with management the disclosures regarding executive compensation to be included in our annual proxy statement. The responsibilities of the Compensation Committee are more fully described in the Compensation Committees charter. **Nominating Committee** The Nominating Committee considers a number of qualifications relating to management and leadership experience, background and integrity and professionalism in evaluating a persons candidacy for membership on our board of directors. The Nominating Committee may have required certain skills or attributes, such as financial or accounting experience, to meet specific board needs that may arise from time to time and also considered the overall experience and makeup of its members to obtain a broad and diverse mix of board members. The Nominating Committee does not distinguish among nominees recommended by stockholders and other persons. **Item 11. Executive Compensation.** **EXECUTIVE COMPENSATION** **Summary Compensation Table** The following table sets forth information concerning the total compensation paid or accrued by us during the last two fiscal years indicated to the named executive officers: | Name & Principal Position | | Fiscal Year ended Dec. 31, | | | Salary ($) | | | Bonus ($) | | | Stock Awards ($) (2) | | | Option Awards ($) | | | Non-Equity Incentive Plan Compensation ($) | | | Non-Qualified Deferred Compensation Earnings ($) | | | All Other Compensation ($) | | | Total ($) | | | | Sebastian Giordano, | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Chief Executive Officer, Chief Financial Officer, Treasurer | | | 2025 | | | | 422,450 | | | | 0 | | | | 40,000 | | | | 0 | | | | 0 | | | | 0 | | | | 27,576 | | | | 490,026 | | | | and Chairman (1) | | | 2024 | | | | 400,000 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 424,580 | | | | 824,580 | | | | | (1) | Salary in 2025 includes $422,450 of accrued and unpaid salary. Salary in 2024 includes $50,000 of paid salary and $350,000 of accrued and unpaid salary. Other compensation in 2024 consists of an auto allowance of $1,600, an accrued and unpaid severance payment due to Mr. Giordano pursuant to his employment agreement of $400,000 and $22,980 of accrued and unpaid medical insurance reimbursement. The stock awards received in 2025 include the receipt of 4,000 shares of Series J Preferred for services rendered with a grant date fair value of $40,000. In December 2025, the Company issued 10,007 Series J Preferred to Mr. Giordano with a fair value of $100,070, calculated using the as if converted common stock fair value, in exchange for all 2025 and 2024 accrued compensation and benefits of $1,400,712. In connection with this exchange, the Company recorded a capital contribution of approximately $400,000. | | | | (2) | As required by SEC rules, the amounts in this column reflect the grant date or modification date fair value as required by FASB ASC Topic 718. | | | 21 | | **Outstanding Equity Awards at Fiscal Year-End** The following table sets forth information about options and stock awards outstanding on December 31, 2025. | OUTSTANDING EQUITY AWARDS AT 2025 FISCAL YEAR-END | | | | | | OPTION AWARDS | | | STOCK AWARDS | | | | Name | | Number of Securities Underlying Unexercised options (#) Exercisable | | | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) Unexercisable | | | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | | | Option Exercise Price ($) | | | Option Expiration Date | | | Number of Shares or Units of Stock that have not Vested (#) | | | Market Value of Shares or Units of Stock that Have not Vested ($) | | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that have not Vested (#) | | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or other Rights that have not Vested ($) | | | | Sebastian Giordano | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | **** **Mr. Sebastian Giordano** On March 1, 2024, the Board, appointed Sebastian Giordano, the Companys Chairman and Chief Executive Officer, to the additional offices of Chief Financial Officer and Treasurer of the Company. Due to the Companys financial condition, beginning on February 16, 2024, Mr. Giordano agreed to temporarily defer cash compensation and receipt of benefits until a date that was to be mutually agreed upon; however, such compensation and other benefits due to Mr. Giordano under the CEO Employment Agreement, continue to accrue. On May 15, 2024, the Company received the Termination Notice, for the nonpayment of compensation and other benefits due under such CEO Employment Agreement. Under the terms of the CEO Employment Agreement, the Company had until July 15, 2024 to cure such default or else Mr. Giordanos termination pursuant to the Termination Notice would be effective on July 15, 2024. The Company was unable to cure such default; however, on July 15, 2024, the Company and Mr. Giordano agreed to extend the termination date until August 15, 2024. On August 15, 2024, the Company and Mr. Giordano further extended the termination date to November 15, 2024. On November 14, 2024, the parties further extended the termination date to February 15, 2025. On February 10, 2025, the parties further extended the termination date to May 31, 2025, and on May 5, 2025 the parties further extended the termination date to August 31, 2025. On August 26, 2025, the parties further extended the termination date to November 30, 2025. Through the extended termination date, all existing wage and benefit provisions of the CEO Employment Agreement shall continue to accrue; however, the claims under the Termination Notice remain in force, including that any granted, but unvested Restricted Stock Units, if any, have been deemed fully vested under the Termination Notice. In addition, the remaining 30,531,608 of unvested Restricted Stock Units (RSUs) of the 122,126,433 RSUs originally granted to Mr. Giordano in March 2022 were deemed fully vested as of the date the CEO Employment Agreement terminated. We accrued a severance payment of $400,000 that became due and payable under the terms of the CEO Employment Agreement as a result of the Companys failure to cure the default as discussed above, which is equal to Mr. Giordanos annual base salary for the one-year subsequent to the termination of the CEO Employment Agreement. On December 15, 2025, we entered into a Retention Agreement (the Retention Agreement) with Mr. Giordano, pursuant to which Mr. Giordano agreed to continue to act as the Chairman, Chief Executive Officer and Chief Financial Officer of the Company and the Company agreed to pay Mr. Giordano up to $500,000 in cash bonuses upon the occurrence of certain events and the satisfaction or waiver of certain conditions. Pursuant to the Retention Agreement, upon the closing of a qualified financing in which the Company raises at least $1,000,000 in gross proceeds, we will pay Mr. Giordano a $250,000 cash bonus, and upon the closing of a financing in which we raise at least $2,500,000 in gross proceeds, we will pay Mr. Giordano an additional $250,000 cash bonus. In order for Mr. Giordano to receive such payments, among other things, Mr. Giordano was required to enter into the Giordano Settlement Agreement (defined below). In addition, the Company and Mr. Giordano agreed to, within 60 days of December 15, 2025, negotiate in good faith and enter into a new employment agreement with respect to services performed by Mr. Giordano for the Company on or after January 1, 2026. In connection with the entry into the Retention Agreement, on December 15, 2025, we entered into a settlement agreement (the Giordano Settlement Agreement) with Mr. Giordano, with respect to certain outstanding liabilities (the Giordano Outstanding Liabilities). Pursuant to the Giordano Settlement Agreement, Mr. Giordano agreed to settle an aggregate of $1,400,712 in Giordano Outstanding Liabilities in exchange for the issuance of an aggregate of 10,007 shares of Series J Preferred. **Director Compensation** The following table sets forth compensation paid, earned, or awarded during 2025 to each of our directors, other than Sebastian Giordano, whose compensation is described above in the 2025 Summary Compensation Table. **2025 Director Compensation** | Name | | Fees Earned or Paid in Cash ($) | | | Stock Awards ($) (1) | | | All Other Compensation ($) | | | Total ($) | | | | Charles Benton | | | - | | | | 5,000 | | | | - | | | | 5,000 | | | | John Mercadante | | | - | | | | 5,000 | | | | - | | | | 5,000 | | | | Norman Newton | | | - | | | | 5,000 | | | | - | | | | 5,000 | | | | | (1) | Reflects the fair value of 500 shares of Series J Preferred Stock received for 2025 compensation, calculated using the as if converted common stock fair value. | | **Director Compensation Program** Our current director compensation program is designed to align our director compensation program with the long-term interests of our stockholders by implementing a program comprised of cash and equity compensation. In setting director compensation, we consider the amount of time that directors expend in fulfilling their duties to the Company as well as the skill level and experience required by our board of directors. We also consider board compensation practices at similarly situated companies, while keeping in mind the compensation philosophy of us and the stockholders interests. The directors also receive reimbursement for expenses, including reasonable travel expenses to attend board and committee meetings, reasonable outside seminar expenses, and other special board-related expenses. | 22 | | **Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.** The following table sets forth information with respect to the beneficial ownership of our common stock and our outstanding series of preferred stock as of March 30, 2026, by (i) each stockholder known by us to be the beneficial owner of more than 5% of our capital stock, (ii) each of our directors and executive officers, and (iii) all of our directors and executive officers as a group. The percentage ownership information is based on 5,889,437,474 shares of common stock, 32,374 shares of Series H Convertible Preferred Stock (the Series H Preferred) outstanding as of March 30, 2026 and 110,424 shares of Series J Preferred outstanding as of March 30, 2026. Information with respect to beneficial ownership has been furnished by each director, officer, or beneficial owner of more than 5% of our common stock. We have determined beneficial ownership in accordance with the rules of the SEC. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities. In addition, the rules attribute beneficial ownership of securities as of a particular date to persons who hold convertible preferred stock, options or warrants to purchase shares of common stock and that are exercisable within 60 days of such date. These shares are deemed to be outstanding and beneficially owned by the person holding such convertible preferred stock, options or warrants for the purpose of computing the percentage ownership of that person, but they are not treated as outstanding for the purpose of computing the percentage ownership of any other person. Except as otherwise indicated, the persons named in the table below have sole voting and investment power with respect to all shares beneficially owned, subject to community property laws, where applicable. To the best of our knowledge, except as otherwise indicated, each of the persons named in the table has sole voting and investment power with respect to the shares of our common stock beneficially owned by such person, except to the extent such power may be shared with a spouse. To our knowledge, none of the shares listed below are held under a voting trust or similar agreement, except as noted. To our knowledge, there is no arrangement, including any pledge, by any person of securities of the Company or any of its parents, the operation of which may at a subsequent date result in a change of control of the Company. Unless otherwise indicated in the following table, the address for each person named in the table is 110 Chestnut Ridge Road, Unit 444, Montvale, NJ 07645. | | | Shares of Common Stock Beneficially Owned | | | Shares of Series J Preferred Beneficially Owned | | | Shares of Series H Preferred Beneficially Owned | | | | Name and address of beneficial owner | | Amount and nature of beneficial ownership | | | Percent of class(1) | | | Amount and nature of beneficial ownership | | | Percent of class (2) | | | Amount and nature of beneficial ownership (3) | | | Percent of class (4) | | | | Directors and Executive Officers | | | | | | | | | | | | | | | | | | | | | | | | | | | Sebastian Giordano(4) | | | 1,655,326,443 | | | | 4.99 | % | | | 1,533,200,000 | | | | 13.9 | % | | | - | | | | - | | | | Charles Benton(5) | | | 129,836,364 | | | | 2.16 | % | | | 126,200,000 | | | | 1.1 | % | | | - | | | | - | | | | John Mercadante (6) | | | 1,891,963,637 | | | | 4.99 | % | | | 1,864,300,000 | | | | 16.9 | % | | | - | | | | - | | | | Norman Newton(7) | | | 131,336,364 | | | | 2.18 | % | | | 127,700,000 | | | | 1.2 | % | | | - | | | | - | | | | All directors and executive officers as a group (4 persons) | | | 182,062,798 | | | | 14.32 | % | | | 3,651,400,000 | | | | 33.1 | % | | | - | | | | - | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 5% Stockholders | | | | | | | | | | | | | | | | | | | | | | | | | | | Joseph Corbisiero(8) | | | 502,651,844 | | | | 8.54 | % | | | - | | | | - | | | | 32,374 | | | | 100 | % | | | | * | less than 1%. | | | | (1) | Applicable percentage ownership is based on 5,889,437,474 shares of common stock outstanding as of March 30, 2026. | | | | (2) | Applicable percentage ownership is based on 110,424 shares of Series J Preferred outstanding as of March 30, 2026. | | | | (3) | Applicable percentage ownership is based on 32,374 shares of Series H Preferred outstanding as of March 30, 2026. | | | | (4) | Includes 122,126,433 shares of common stock held directly by Mr. Giordano and 1,533,200,000 shares of common issuable upon the conversion of 15,332 shares of Series J Preferred, at a conversion price of $0.001 per share. Mr. Giordano is prohibited from converting his shares of Series J Preferred if, after giving effect to the issuance of such shares of common stock, such holder together with its affiliates would beneficially own more than 4.99% of the outstanding common stock. | | | | (5) | Consists of 3,636,364 shares of common and 126,200,000 shares of common issuable upon the conversion of 1,262 shares of Series J Preferred, at a conversion price of $0.001 per share. | | | | (6) | Consists of 27,663,637 shares of common and 1,864,300,000 shares of common issuable upon the conversion of 18,643 shares of Series J Preferred, at a conversion price of $0.001 per share. Mr. Mercadante is prohibited from converting his shares of Series J Preferred if, after giving effect to the issuance of such shares of common stock, such holder together with its affiliates would beneficially own more than 4.99% of the outstanding common stock. | | | | (7) | Consists of 3,636,364 shares of common and 127,700,000 shares of common issuable upon the conversion of 1,262 shares of Series J Preferred, at a conversion price of $0.001 per share. | | | | (8) | Mr. Joseph Corbisiero was the chief executive officer of Freight Connections until December 1, 2023. Includes 178,911,844 shares of common stock held directly by Mr. Corbisiero and 323,740,000 shares of common issuable upon the conversion of 32,374 shares of Series H Preferred, at a conversion price of $0.0001 per share. | | **Securities Authorized for Issuance Under Equity Compensation Plans** The Company does not currently have any securities authorized for issuance under any equity compensation plans. **Item 13. Certain Relationships and Related Transactions, and Director Independence.** **Director Independence** Three of our four board members are independent. The Board has determined that each of Messrs. Benton, Mercadante, and Newton is an independent director pursuant to the OTC Expert Markets listing standards. Under the OTC Expert Markets listing standards, an independent director is a non-employee of the Company that does not have a relationship with the Company that, in the Boards opinion, would interfere with the exercise of independent judgment in carrying out director responsibilities. In assessing the independence of our directors, the Board considers all the business relationships between the Company and our directors and their respective affiliated companies. This review is based primarily on the Companys review of its own records and on responses of the directors to questions in a questionnaire regarding employment, business, familial, compensation and other relationships with the Company and our management. Where relationships exist, the Board determines whether the relationship between the Company and the directors or the directors affiliated companies impairs the directors independence. After consideration of the directors relationships with the Company, the Board has affirmatively determined that none of the individuals serving as non-employee directors as of the date of this Annual Report has a material relationship with us and that each of such non-employee directors is independent. | 23 | | **Related Party Transactions** Other than as described below, there have been no transactions since January 1, 2023, whether directly or indirectly, between us and any of the Companys officers, directors, beneficial owners of more than 5% of outstanding shares of common stock that exceeded the lesser of (i) $120,000 or (ii) one percent (1%) of the average of the Companys total assets at year-end for the last two fiscal years. Notes payable related parties On April 14, 2023, the Companys Board of Directors (Board) 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 provided for interest at 12% per annum. However, upon default, the interest rate shall be 17% per annum. The maturity date of the financing was December 31, 2023, provided, however, the Company may prepay a loan at any time without premium or penalty. Each loan under the Credit Facility was made on promissory notes. During April 2023, the Company received initial loans under the Credit Facility, in the following amounts: (a) $500,000 from John Mercadante (Mr. 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 Companys Chief Executive Officer, Chief Financial Officer and Chairman of the Board. On May 21, 2024, the Company received default notices for its failure to pay outstanding principal and interest due on unsecured promissory notes that were issued on April 17, 2023, to Mr. Mercadante and on April 21, 2023, to Mr. Giordano with respect to $542,575 and $108,708, respectively, in aggregate principal and interest due on December 31, 2023. As such, the interest rate on both notes increased to 17% per annum calculated as of January 1, 2024. On October 3, 2023, and November 28, 2023, the Company issued unsecured promissory notes to Mr. Mercadante and to an individual, who is affiliated to Mr. Mercadante in the principal amount of $500,000 and $60,000, respectively. Each unsecured promissory note matured nine months and one year from the date of issuance and accrues interest at a rate per annum of 12%, respectively. On July 1, 2024, the Company received a default notice for its failure to pay outstanding principal and interest due on the October 3, 2023, unsecured promissory note to Mr. Mercadante in the principal amount of $500,000 and was due on June 30, 2024. As such, the interest rate on such note increased to 17% per annum as of July 1, 2024. Additionally, on December 9, 2024, the Company received a default notice for its failure to pay outstanding principal and interest due on the November 28, 2024, unsecured promissory note to an individual, who is affiliated to Mr. Mercadante in the principal amount of $60,000 and was due on November 28, 2024. As such, the interest rate on such note increased to 17% per annum as of November 29, 2024. On February 6, 2024, and February 15, 2024, the Company issued unsecured promissory notes to Mr. Mercadante, a Director of the Company, in the principal amounts of $64,534 and $319,195, respectively. Each unsecured promissory note will mature one year from the date of issuance and accrues interest at a rate per annum of 12%. On February 7, 2025, and February 21, 2025, the Company received default notices for its failure to pay outstanding principal and interest due on unsecured promissory notes that were issued on February 6, 2024 and February 15, 2024 to John Mercadante in the principal amount of $64,534 and $319,195, respectively, and were due on February 6, 2025 and February 15, 2025, respectively. As such, the interest rate on such notes increased to 17% per annum as of February 7, 2025 and February 15, 2025, respectively. On February 21, 2024, and February 23, 2024, the Company issued unsecured promissory notes to Norman Newton (Mr. Newton) and Charles Benton (Mr. Benton), both members of the Companys Board of Directors, in the principal amounts of $1,000 and $3,109, respectively. Each unsecured promissory note matured on September 30, 2024, and accrued interest at the rate per annum of 12%. On October 1, 2024, the Company received default notices for its failure to pay outstanding principal and interest due on unsecured promissory notes that were issued on February 21, 2024, and February 23, 2024 to Mr. Newton and Mr. Benton in the principal amounts of $1,000 and $3,109, respectively and that were both due on September 30, 2024. As such, the interest rate on such notes increased to 17% per annum as of October 1, 2024. On May 30, 2025, the Company entered into settlement agreements (the Series J Settlement Agreements) with certain holders of the Companys liabilities (the 2025 Creditors), including certain related party note holders (the Related Party Creditors). Pursuant to the Series J Settlement Agreements, the Related Party Creditors settled an aggregate of $1,547,838 in outstanding notes and accrued interest payable of $396,695 in exchange for the issuance of an aggregate of 19,446 shares of the Companys Series J Preferred, effective as of June 1, 2025. Among the debt settled with Related Party Creditors were all outstanding notes issued to Mr. Newton, Mr. Mercadante, Mr. Giordano and Mr. Benton. In connection with the exchange of the outstanding notes and related accrued interest payable for shares of Series J Preferred, the Company calculated a gain on debt extinguishment of $1,750,080, which was netted against additional paid-in capital and accordingly, no gain or loss was recognized on these settlements. On December 15, 2025, the Company entered into a settlement agreement (the CEO Settlement Agreement) with Sebastian Giordano, with respect to certain outstanding liabilities (the Outstanding Liabilities). Pursuant to the CEO Settlement Agreement, Mr. Giordano agreed to settle an aggregate of $1,400,712 in Outstanding Liabilities in exchange for the issuance of an aggregate of 10,007 shares of the Companys Series J Preferred Stock. In connection with the exchange of the Outstanding Liabilities for shares of Series J Preferred, the Company calculated a gain on debt extinguishment of $400,012 related to the forgiveness of $400,000 of accrued severance pay due, which was included in additional paid-in capital and no gain or loss was recognized. Additionally, the Company calculated a gain on debt extinguishment of $100,070, which was netted against additional paid-in capital and accordingly, no gain or loss was recognized on these settlements. As of December 31, 2025 and 2024, aggregate notes payable to related parties in the principal amounts of $0 and $1,547,838, respectively, were outstanding. As of December 31, 2025 and 2024, the aggregate accrued interest payable to related parties amounted to $0 and $290,133, respectively, which has been included in accrued expenses related parties on the accompanying consolidated balance sheets. For the years ended December 31, 2025 and 2024, interest expense related parties amounted to $106,563 and $221,258, respectively. **Item 14. Principal Accountant Fees and Services.** Aggregate fees incurred related to the following years for professional services rendered by our independent registered public accounting firm, Salberg & Company, P.A. for the years ended December 31, 2025 and 2024 are set forth below. | | | 2025 | | | 2024 | | | | Audit fees | | $ | 58,600 | | | $ | 56,500 | | | | Audit-related fees | | | 1,900 | | | | - | | | | Tax fees | | | - | | | | - | | | | All other fees | | | - | | | | - | | | | Total | | $ | 60,500 | | | $ | 56,500 | | | | 24 | | **Audit Fees** Audit fees consist of fees billed for professional services rendered for the audit of our consolidated annual financial statements and review of the interim consolidated financial statements included in quarterly reports and services that are normally provided by our auditors in connection with statutory and regulatory filings or engagements. **Audit-Related Fees** Audit-related fees consist of services by our independent auditors that, including accounting consultations on transaction related matters, are reasonably related to the performance of the audit or review of our financial statements and are not reported above under audit fees. **Tax Fees** For the Companys years ended December 31, 2025 and December 31, 2024, Salberg & Company, P.A. did not provide any professional services for tax compliance, tax advice, and tax planning. **Pre-Approval of Services** The Audit Committee has reviewed and discussed with management the audited financial statements for the year ended December 31, 2025 The Audit Committee also discussed all the matters required by professional auditing standards to be discussed with the Companys independent registered public accounting firm, Salberg & Company, P.A., the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board and the Securities and Exchange Commission. In addition, Audit Committee has received from the independent registered public accounting firm written disclosure required by the Public Company Accounting Oversight Board Ethics and Independence Rule 3526 and has discussed with the independent registered public accounting firm its independence from the Company and its management. Based on its review and discussions, including discussions without management or members of the independent registered public accounting firm present, the board of directors has approved, that the audited financial statements be included in this Annual Report. To safeguard the continued independence of the Companys independent registered public accounting firm, the board of directors requires all audit and non-audit services, subject to a de minimis exception pursuant to SEC Regulation S-X Rule 2-01(c)(7)(i)(C), to be performed by the Companys independent registered public accounting firm, to be pre-approved by the board of directors prior to such services being performed. All audit services performed by the Companys independent registered public accounting firm during the year ended December 31, 2025 and 2024 were approved by the audit committee. **Item 15. Exhibits and Financial Statement Schedules.** The following financial information is filed as part of this report: (a) | | (1) | FINANCIAL STATEMENTS | | | | | | | | | (2) | SCHEDULES | | | | | | | | | (3) | EXHIBITS. | | | Exhibit Number | | Description | | | | | | | | 3.1 | | Amended and Restated Articles of Incorporation of Loran Connection Corp. (now known as Transportation and Logistics Systems, Inc.), as filed with the Nevada Secretary of State, on January 25, 2012 (incorporated by reference to Exhibit 3.1 to our Annual Report on Form 10-K for the year ended March 31, 2015 as filed with the Securities and Exchange Commission on June 30, 2015). | | | | | | | | 3.2 | | Certificate of Change to the Amended and Restated Articles of Incorporation of PetroTerra Corp. (now known as Transportation and Logistics Systems, Inc.), as filed with the Nevada Secretary of State, dated December 18, 2013 (incorporated by reference to Exhibit 3.1 to our Form 8-K, as filed with the Securities and Exchange Commission on December 24, 2013). | | | | | | | | 3.3 | | Certificate of Change to the Amended and Restated Articles of Incorporation of PetroTerra Corp. (now known as Transportation and Logistics Systems, Inc.), as filed with the Nevada Secretary of State, dated February 14, 2017 (incorporated by reference to Exhibit 3.5 to our Form S-1, as filed with the Securities and Exchange Commission on July 26, 2017) | | | | | | | | 3.4 | | Certificate of Change to the Amended and Restated Articles of Incorporation of PetroTerra Corp. (now known as Transportation and Logistics Systems, Inc.), as filed with the Nevada Secretary of State, dated July 16, 2018 (incorporated by reference to Exhibit 3.1 to our Form 8-K as filed with the Securities and Exchange Commission on July 23, 2018). | | | | | | | | 3.5 | | Certificate of Change to the Amended and Restated Articles of Incorporation of Transportation and Logistics Systems, Inc., as filed with the Nevada Secretary of State, dated April 15, 2021 (incorporated by reference to Exhibit 3.5 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 as filed with the Securities and Exchange Commission on November 15, 2021). | | | | | | | | 3.6 | | Certificate of Amendment to the Amended and Restated Articles of Incorporation of Transportation and Logistics Systems, Inc., as filed with the Nevada Secretary of State on December 1, 2023 (incorporated by reference to Exhibit 3.2 to our Current Report on Form 8-K as filed with the Securities and Exchange Commission on January 3, 2024). | | | 25 | | | 3.7 | | Certificate of Correction, as filed with the Nevada Secretary of State on November 25, 2024, to the Certificate of Change of the Company dated December 27, 2023 (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K as filed with the Securities and Exchange Commission on November 29, 2024). | | | | | | | | 3.8 | | Amended and Restated Bylaws of Transportation and Logistics Systems, Inc. (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on December 28, 2022). | | | | | | | | 4.1 | | Certificate of Designation, Preferences, Rights and Other Rights of Series B preferred Stock of the Company, dated October 7, 2019 (incorporated by reference to Exhibit 4.9 to our Annual Report on Form 10-K for the year ended December 31, 2019 filed with the Securities and Exchange Commission on May 29, 2020). | | | | | | | | 4.2 | | Form of Warrants dated between January 2020 and March 2020 (incorporated by reference to Exhibit 4.15 to our Annual Report on Form 10-K filed with the Securities and Exchange Commission on May 29, 2020). | | | | | | | | 4.3 | | Form of Common Stock Purchase Warrant dated June 16, 2020 by Transportation and Logistics Services, Inc (incorporated by reference to Exhibit 4.3 of our Annual Report on Form 10-K filed with the Securities and Exchange Commission on December 6, 2024). | | | | | | | | 4.4 | | Form of Common Stock Purchase Warrant issued in Series E Offering (incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on October 9, 2020). | | | | | | | | 4.5 | | Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of Series E Preferred Stock of the Company, filed on December 28, 2020 (incorporated by reference to Exhibit 10.28 to our Form S-1/A dated February 10, 2021. | | | | | | | | 4.6 | | Certificate of Designation of Preferences, Rights and Limitations of Series G Preferred Stock of the Company, filed on December 28, 2021 (incorporated by reference to Exhibit 3.14 to our registration statement on Form S-1 dated January 28, 2022). | | | | | | | | 4.7 | | Form of Common Stock Purchase Warrant dated December 31, 2021 (incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on January 3, 2022). | | | | | | | | 4.8 | | Form of Common Stock Purchase Warrant issued in Warrant Offering (incorporated by reference to Exhibit 4.1 to our registration statement on Form S-1 dated January 28, 2022). | | | | | | | | 4.9 | | Certificate of Designation, Preferences, Rights and Limitations of Series H Preferred Stock (incorporated by reference to Exhibit 10.3 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on September 20, 2022). | | | | | | | | 4.10 | | Certificate of Designation, of Preferences, Rights and Limitations of Series I Preferred Stock (incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on July 19, 2023). | | | | | | | | 4.11* | | Description of Securities. | | | | | | | | 4.12 | | Certificate of Designation of Preferences, Rights and Limitations of Series J Senior Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on May 7, 2025). | | | | | | | | 4.13 | | Certificate of Amendment to Transportation and Logistics Systems, Inc.s Certificate of Designations of Preferences, Rights and Limitations of Series J Senior Convertible Preferred Stock, filed with the Secretary of State of the State of Nevada on September 5, 2025 (incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on September 9, 2025). | | | | | | | | 10.1+ | | Employment Agreement, dated January 4, 2022, between TLSS and Mr. Sebastian Giordano (incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on January 7, 2022). | | | | | | | | 10.2 | | Secured Promissory Note, dated February 1, 2023, made by TLSS-STI, Inc., a Delaware corporation, Severance Trucking Co., Inc. a Massachusetts corporation, Severance Warehousing, Inc., a Massachusetts corporation and McGrath Trailer Leasing, Inc., a Maine corporation, in favor of Kathryn Boyd, Clyde J. Severance, and Robert H. Severance, Jr. (incorporated by reference to Exhibit 10.3 to our Form 8-K dated February 6, 2023). | | | | | | | | 10.3 | | Form of Promissory Note between Transportation and Logistics Systems, Inc. and Certain Investors (incorporated by reference to Exhibit 10.3 of our Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 15, 2025). | | | | | | | | 10.4 | | Letter Agreement, dated as of August 12, 2024, between Transportation Logistics Systems, Inc., and Mercer Street Global Opportunity Fund and Cavalry Fund I LP (incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed with the Securities and Exchange Commission on August 16, 2024). | | | | | | | | 10.5 | | Letter Agreement, dated as of October 9, 2024, between Transportation Logistics Systems, Inc., and Mercer Street Global Opportunity Fund and Cavalry Fund I LP (incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed with the Securities and Exchange Commission on October 15, 2024). | | | | | | | | 10.6 | | Letter Agreement, dated as of November 22, 2024, between Transportation Logistics Systems, Inc., and Cavalry Fund I LP (incorporated by reference to Exhibit 10.2 of our Current Report on Form 8-K filed with the Securities and Exchange Commission on November 29, 2024) | | | | | | | | 10.7 | | Form of Promissory Note between Transportation and Logistics Systems, Inc. and Certain Related Parties (incorporated by reference to Exhibit 10.15 of our Annual Report on Form 10-K filed with the Securities and Exchange Commission on December 6, 2024). | | | | | | | | 10.8 | | Letter Agreement, dated as of January 21, 2025, between Transportation Logistics Systems, Inc., and Mercer Street Global Opportunity Fund, LLC (incorporated by reference to Exhibit 10.2 of our Current Report on Form 8-K filed with the Securities and Exchange Commission on January 23, 2025). | | | | | | | | 10.9 | | Letter Agreement, dated as of March 10, 2025, between Transportation Logistics Systems, Inc., and C/M Capital Master Fund, LP (incorporated by reference to Exhibit 10.2 of our Current Report on Form 8-K filed with the Securities and Exchange Commission on March 12, 2025). | | | | | | | | 10.10 | | Letter Agreement, dated as of March 25, 2025, between Transportation Logistics Systems, Inc., and C/M Capital Master Fund, LP (incorporated by reference to Exhibit 10.2 of our Current Report on Form 8-K filed with the Securities and Exchange Commission on March 28, 2025). | | | 26 | | | 10.11 | | Letter Agreement, dated as of May 1, 2025, between Transportation Logistics Systems, Inc., and C/M Capital Master Fund, LP (incorporated by reference to Exhibit 10.2 of our Current Report on Form 8-K filed with the Securities and Exchange Commission on May 7, 2025). | | | | | | | | 10.12 | | Promissory Note, dated as of May 1, 2025 between Transportation Logistics Systems, Inc. and C/M Capital Master Fund, LP (incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed with the Securities and Exchange Commission on May 7, 2025). | | | | | | | | 10.13 | | Form of Promissory Note Amendment Agreement, dated as of May 5, 2025, between Transportation Logistics Systems, Inc. and C/M Capital Master Fund, LP (incorporated by reference to Exhibit 10.3 of our Current Report on Form 8-K filed with the Securities and Exchange Commission on May 7, 2025). | | | | | | | | 10.14 | | Form of Promissory Note Amendment Agreement between Transportation and Logistics Systems, Inc. and Certain Investors. (incorporated by reference to Exhibit 10.11 of our Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 15, 2025). | | | | | | | | 10.15 | | Form of Promissory Note between Transportation and Logistics Systems, Inc. and Certain Investors (incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 as filed with the Securities and Exchange Commission on May 13, 2025). | | | | | | | | 10.16 | | Form of Promissory Note Amendment Agreement between Transportation and Logistics Systems, Inc. and Certain Investors (incorporated by reference to Exhibit 10.5 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 as filed with the Securities and Exchange Commission on May 13, 2025). | | | | | | | | 10.17 | | Form of Settlement Agreement (Outstanding Liabilities) (incorporated by reference to Exhibit 10.5 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2025 as filed with the Securities and Exchange Commission on August 14, 2025). | | | | | | | | 10.18 | | Form of Settlement Agreement (Accrued Dividends) (incorporated by reference to Exhibit 10.3 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on June 24, 2025). | | | | | | | | 10.19 | | Form of Settlement Agreement (Accrued Dividends and Outstanding Warrants) (incorporated by reference to Exhibit 10.4 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on June 24, 2025). | | | | | | | | 10.20 | | Form of Settlement Agreement (Outstanding Liabilities and Warrants) (incorporated by reference to Exhibit 10.8 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2025 as filed with the Securities and Exchange Commission on August 14, 2025). | | | | | | | | 10.21 | | Form of Exchange Agreement (incorporated by reference to Exhibit 10.9 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2025 as filed with the Securities and Exchange Commission on August 14, 2025). | | | | | | | | 10.22 | | Form of Promissory Note, dated as of August 27, 2025 between Transportation Logistics Systems, Inc. and C/M Capital Master Fund, LP (incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed with the Securities and Exchange Commission on September 2, 2025). | | | | | | | | 10.23 | | Letter Agreement, dated as of August 27, 2025, between Transportation Logistics Systems, Inc., and C/M Capital Master Fund, LP (incorporated by reference to Exhibit 10.2 of our Current Report on Form 8-K filed with the Securities and Exchange Commission on September 2, 2025). | | | | | | | | 10.24 | | Form of Stock Award Agreement, between Transportation Logistics Systems, Inc., and employees, consultants and Sebastian Giordano (incorporated by reference to Exhibit 10.3 of our Current Report on Form 8-K filed with the Securities and Exchange Commission on September 2, 2025). | | | | | | | | 10.25 | | Form of Settlement Agreement (Outstanding Liabilities) (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on October 17, 2025). | | | | | | | | 10.26 | | Form of Exchange Agreement (incorporated by reference to Exhibit 10.8 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2025 as filed with the Securities and Exchange Commission on November 13, 2025). | | | | | | | | 10.27 | | Settlement Agreement, dated as of December 15, 2025 by and between Transportation Logistics Systems, Inc. and Sebastian Giordano (incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed with the Securities and Exchange Commission on December 17, 2025). | | | | | | | | 10.28+ | | Retention Agreement, dated as of December 15, 2025 by and between Transportation Logistics Systems, Inc. and Sebastian Giordano (incorporated by reference to Exhibit 10.2 of our Current Report on Form 8-K filed with the Securities and Exchange Commission on December 17, 2025). | | | | | | | | 10.29 | | Letter Agreement, dated as of January 9, 2026, between Transportation Logistics Systems, Inc., and C/M Capital Master Fund, LP (incorporated by reference to Exhibit 10.2 of our Current Report on Form 8-K filed with the Securities and Exchange Commission on January 13, 2026). | | | | | | | | 10.30 | | Form of Promissory Note, dated as of January 9, 2026 between Transportation Logistics Systems, Inc. and C/M Capital Master Fund, LP (incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed with the Securities and Exchange Commission on January 13, 2026). | | | | | | | | 21 | | Subsidiaries of Registrant (incorporated by reference to Exhibit 21 of our Annual Report on Form 10-K filed with the Securities and Exchange Commission on December 6, 2024). | | | | | | | | 23.1* | | Consent of Salberg & Company, P.A. | | | | | | | | 31.1# | | Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | | | | | | | | 32.1# | | Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | | | | | | | | 101.INS* | | Inline XBRL Instances Document | | | 101.SCH* | | Inline XBRL Taxonomy Extension Schema Document | | | 101.CAL* | | Inline XBRL Taxonomy Extension Calculation Linkbase Document | | | 101.DEF* | | Inline XBRL Taxonomy Extension Definition Linkbase Document | | | 101.LAB* | | Inline XBRL Taxonomy Extension Label Linkbase Document | | | 101.PRE* | | Inline XBRL Taxonomy Extension Presentation Linkbase Document | | | 104 | | Cover Page Interactive Data File (embedded within the Inline XBRL document) | | * Filed herewith. + Indicates a management contract or any compensatory plan, contract, or arrangement. # Furnished herewith. The certifications attached as Exhibit 31.1 and Exhibit 32.1 that accompany this Annual Report are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of Transportation and Logistics Systems, Inc. under the Securities Act or the Exchange Act, whether made before or after the date of this Form 10-K, irrespective of any general incorporation language contained in such filing. **Item 16. Form 10-K Summary.** None | 27 | | **SIGNATURES** Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. | | TRANSPORTATION AND LOGISTICS SYSTEMS, INC. | | | March 30, 2026 | | | | | | By: | /s/ Sebastian Giordano | | | | | Sebastian Giordano Chief Executive Officer and Chief Financial Officer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer) | | Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. | Signature | | Title | | Date | | | | | | | | | | /s/ Sebastian Giordano | | Chief Executive Officer, Chief Financial Officer, Treasurer and Chairman of the Board of Directors | | March 30, 2026 | | | Sebastian Giordano | | (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer) | | | | | | | | | | | | /s/ Charles Benton | | Director | | March 30, 2026 | | | Charles Benton | | | | | | | | | | | | | | /s/ John Mercadante | | Director | | March 30, 2026 | | | John Mercadante | | | | | | | | | | | | | | /s/ Norman Newton | | Director | | March 30, 2026 | | | Norman Newton | | | | | | | 28 | |