# EDGAR Filing Document

**Accession Number:** 0001463208
**File Stem:** 0001493152-25-011987
**Filing Date:** 2025-8
**Character Count:** 453311
**Document Hash:** 6154a139a00a8ecf07c9d7c6f6b67b2c
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001493152-25-011987.hdr.sgml**: 20250814

**ACCESSION NUMBER**: 0001493152-25-011987

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 60

**CONFORMED PERIOD OF REPORT**: 20250630

**FILED AS OF DATE**: 20250814

**DATE AS OF CHANGE**: 20250814

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Transportation & Logistics Systems, Inc.
- **CENTRAL INDEX KEY:** 0001463208
- **STANDARD INDUSTRIAL CLASSIFICATION:** TRANSPORTATION SERVICES [4700]
- **ORGANIZATION NAME:** 01 Energy & Transportation
- **EIN:** 263106763
- **STATE OF INCORPORATION:** NV
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-34970
- **FILM NUMBER:** 251219367

**BUSINESS ADDRESS:**
- **STREET 1:** 5500 MILITARY TRAIL
- **STREET 2:** SUITE 22-357
- **CITY:** JUPITER
- **STATE:** FL
- **ZIP:** 33458
- **BUSINESS PHONE:** 1.833.764.1443

**MAIL ADDRESS:**
- **STREET 1:** 5500 MILITARY TRAIL
- **STREET 2:** SUITE 22-357
- **CITY:** JUPITER
- **STATE:** FL
- **ZIP:** 33458

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** PETROTERRA CORP.
- **DATE OF NAME CHANGE:** 20120215

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** LORAN CONNECTION CORP
- **DATE OF NAME CHANGE:** 20090430

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-Q**

(Mark One)

☒ **QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the quarterly period ended June 30, 2025**

or

☐ **TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

For the transition period from ___________ to ___________

**Commission File Number: 001-34970**

**<u>Transportation and Logistics Systems, Inc.</u>**

(Exact name of registrant as specified in its charter)

---

| | |
|:---|:---|
| **Nevada** | **26-3106763** |
| (State or other jurisdiction of<br> incorporation or organization) | (IRS Employer<br> Identification No.) |

---

---

| | |
|:---|:---|
| **5500 Military Trail, Suite 22-357 Jupiter, FL** | **33458** |
| (Address of principal executive offices) | (Zip Code) |

---

**<u>(833) 764-1443</u>**

(Registrant's telephone number, including area code)

**<u>Not applicable</u>**

(Registrant's former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Exchange Act:

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol(s)** | **Name of exchange on which registered** |
| N/A | N/A | N/A |

---

Securities Registered Pursuant to Section 12(g) of the Act:

**<u>Common Stock, $0.001 Par Value</u>**

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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registration was required to submit such files). Yes ☐ No ☒

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the 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 ☐ <br> Non-accelerated filer ☒ Smaller reporting company ☒ <br> 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 any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's 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 ☒

As of August 14, 2025, the registrant had outstanding 5,889,437,474 shares of common stock.

**TRANSPORTATION AND LOGISTICS SYSTEMS, INC.**

**FORM 10-Q**

**JUNE 30, 2025**

**TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
|  |  | **Page** |
| **[PART I - FINANCIAL INFORMATION](#sp_001)** | **[PART I - FINANCIAL INFORMATION](#sp_001)** |  |
| Item 1. | [Financial Statements](#sp_002) | 3 |
|  | [Consolidated Balance Sheets as of June 30, 2025 (Unaudited) and December 31, 2024](#sp_003) | 3 |
|  | [Consolidated Statements of Operations - For the Three and Six Months Ended June 30, 2025 and 2024 (Unaudited)](#sp_004) | 4 |
|  | [Consolidated Statements of Changes in Shareholders' Deficit - For the Three and Six Months Ended June 30, 2025 and 2024 (Unaudited)](#sp_005) | 5 |
|  | [Consolidated Statements of Cash Flows - For the Six Months Ended June 30, 2025 and 2024 (Unaudited](#sp_006)) | 6 |
|  | [Notes to Consolidated Financial Statements (Unaudited)](#sp_007) | 7 |
| Item 2. | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#an_001) | 28 |
| Item 3. | [Quantitative and Qualitative Disclosures About Market Risk](#an_002) | 32 |
| Item 4. | [Controls and Procedures](#an_003) | 32 |
| **[PART II - OTHER INFORMATION](#an_004)** | **[PART II - OTHER INFORMATION](#an_004)** |  |
| Item 1. | [Legal Proceedings](#an_005) | 33 |
| Item 1A. | [Risk Factors](#an_006) | 36 |
| Item 2. | [Unregistered Sales of Equity Securities and Use of Proceeds](#an_007) | 36 |
| Item 3. | [Defaults Upon Senior Securities](#an_008) | 36 |
| Item 4. | [Mine Safety Disclosures](#an_009) | 36 |
| Item 5. | [Other Information](#an_010) | 36 |
| Item 6. | [Exhibits](#an_011) | 36 |
| [SIGNATURE](#an_012) |  | 39 |

---

-i-

For purposes of this Quarterly Report on Form 10-Q (this "Quarterly 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 FX, Inc. ("Shyp FX"), 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.

Hereinafter, TLSSA, TLSS Ops, Shyp FX, Shyp CX, TLSS-CE, TLSS-STI, Cougar Express, JFK Cartage, and Severance, are hereinafter, the "Subsidiaries". Other than the Company, the results of operations and all accounts of the Subsidiaries for the six months ended June 30, 2025 and 2024 are included as part of discontinued operations on the consolidated financial statements.

**Forward-Looking Statements**

Statements made in this Quarterly 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 our Annual Report on Form 10-K for the year ended December 31, 2024 (our "2024 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 shareholders' 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 Quarterly 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 letter. 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 Quarterly Report, as well as any amendments hereto or thereto, or other documents filed with the Securities and Exchange Commission (the "SEC").

-ii-

**PART I - FINANCIAL INFORMATION**

**ITEM 1. FINANCIAL STATEMENTS**

**TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES** 

**CONSOLIDATED BALANCE SHEETS** 

---

| | | |
|:---|:---|:---|
|  | June 30,<br>2025 | December 31,<br>2024 |
|  | (Unaudited) | |
| ASSETS |  |  |
| CURRENT ASSETS: |  |  |
| &nbsp;&nbsp;&nbsp;Cash | $62571 | $177257 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 1500 | 1260 |
| &nbsp;&nbsp;&nbsp;Assets of discontinued operations | 419 | 419 |
| &nbsp;&nbsp;&nbsp;Total Current Assets | 64490 | 178936 |
| TOTAL ASSETS | $64490 | $178936 |
| LIABILITIES AND SHAREHOLDERS' DEFICIT |  |  |
| CURRENT LIABILITIES: |  |  |
| &nbsp;&nbsp;&nbsp;Notes payable | $- | $300000 |
| &nbsp;&nbsp;&nbsp;Notes payable - related parties |  | 1547838 |
| &nbsp;&nbsp;&nbsp;Accounts payable | 862358 | 1167795 |
| &nbsp;&nbsp;&nbsp;Accrued expenses | 234478 | 1188485 |
| &nbsp;&nbsp;&nbsp;Accrued expenses - related parties |  | 290133 |
| &nbsp;&nbsp;&nbsp;Accrued compensation and related benefits | 1151779 | 906099 |
| &nbsp;&nbsp;&nbsp;Liabilities of discontinued operations | 6730526 | 6670603 |
| &nbsp;&nbsp;&nbsp;Total Current Liabilities | 8979141 | 12070953 |
| &nbsp;&nbsp;&nbsp;Total Liabilities | 8979141 | 12070953 |
| Series J convertible preferred stock, par value $0.001 per share; 1,000,000 shares designated; 85,688 and 0 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively ($9,425,680 redemption value as of June 30, 2025) | 9425680 | - |
| Commitments and Contingencies (See Note 6) |  |  |
| SHAREHOLDERS' DEFICIT: |  |  |
| &nbsp;&nbsp;&nbsp;Preferred stock, par value $0.001; authorized 10,000,000 shares: |  |  |
| &nbsp;&nbsp;&nbsp;Series B convertible preferred stock, par value $0.001 per share; 1,700,000 shares designated; No shares issued and outstanding at June 30, 2025 and December 31, 2024 (No per share liquidation value) |  |  |
| &nbsp;&nbsp;&nbsp;Series D convertible preferred stock, par value $0.001 per share; 1,250,000 shares designated; No shares issued and outstanding at June 30, 2025 and December 31, 2024 ($6.00 per share liquidation value) |  |  |
| &nbsp;&nbsp;&nbsp;Series E convertible preferred stock, par value $0.001 per share; 562,250 shares designated; 0 and 21,418 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively ($13.34 per share liquidation value) |  | 21 |
| &nbsp;&nbsp;&nbsp;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 June 30, 2025 and December 31, 2024, respectively ($10.00 per share liquidation value) |  | 407 |
| &nbsp;&nbsp;&nbsp;Series H convertible preferred stock, par value $0.001 per share; 35,000 shares designated; 32,374 shares issued and outstanding at June 30, 2025 and December 31, 2024 (No per share liquidation value) | 32 | 32 |
| &nbsp;&nbsp;&nbsp;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 June 30, 2025 and December 31, 2024, respectively | 5889437 | 5889437 |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 122007250 | 128686122 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (146237050) | (146468036) |
| Total Shareholders' Deficit | (18340331) | (11892017) |
| Total Liabilities and Shareholders' Deficit | $64490 | $178936 |

---

See accompanying notes to unaudited consolidated financial statements.

**TRANSPORTATION AND LOGISTICS SYSTEMS INC. AND SUBSIDIARIES** 

**CONSOLIDATED STATEMENTS OF OPERATIONS** 

**(Unaudited)** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended** | **For the Three Months Ended** | **For the Six Months Ended** | **For the Six Months Ended** |
|  | **June 30,** | **June 30,** | **June 30,** | **June 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| REVENUES | $- | $- | $- | $- |
| OPERATING EXPENSES: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Compensation and related benefits | 160340 | 187050 | 320680 | 785382 |
| &nbsp;&nbsp;&nbsp;Legal and professional fees | 226301 | 23544 | 397261 | 167977 |
| &nbsp;&nbsp;&nbsp;General and administrative expenses | 2734 | 27142 | 3705 | 113974 |
| &nbsp;&nbsp;&nbsp;Total Operating Expenses | 389375 | 237736 | 721646 | 1067333 |
| LOSS FROM OPERATIONS | (389375) | (237736) | (721646) | (1067333) |
| OTHER INCOME (EXPENSES): |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Gain of debt extinguishment | 1481742 |  | 1481742 |  |
| &nbsp;&nbsp;&nbsp;Interest expense | (9198) |  | (18301) | (2468) |
| &nbsp;&nbsp;&nbsp;Interest expense - related parties | (43976) | (53788) | (106563) | (99567) |
| &nbsp;&nbsp;&nbsp;Total Other Income (Expenses), net | 1428568 | (53788) | 1356878 | (102035) |
| INCOME (LOSS) BEFORE INCOME TAXES | 1039193 | (291524) | 635232 | (1169368) |
| Provision for income taxes | - | - | - | - |
| INCOME (LOSS) FROM CONTINUING OPERATIONS | 1039193 | (291524) | 635232 | (1169368) |
| DISCONTINUED OPERATIONS: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Loss from discontinued operations, net of tax | (92251) | (282050) | (186560) | (1469126) |
| LOSS FROM DISCONTINUED OPERATIONS | (92251) | (282050) | (186560) | (1469126) |
| NET INCOME (LOSS) | 946942 | (573574) | 448672 | (2638494) |
| Deemed contribution on exchange of equity instruments | 800380 |  | 800380 |  |
| Accrued dividends | (140696) | (76358) | (217686) | (156120) |
| NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS | $1606626 | $(649932) | $1031366 | $(2794614) |
| NET INCOME (LOSS) PER COMMON SHARE - BASIC AND DILUTED |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Net income (loss) per share from continuing operations - basic and diluted | $0.00 | $(0.00) | $0.00 | $(0.00) |
| &nbsp;&nbsp;&nbsp;Net loss per share from discontinued operations – basic and diluted | (0.00) | (0.00) | (0.00) | (0.00) |
| &nbsp;&nbsp;&nbsp;Net income (loss) per share - basic and diluted | $0.00 | $(0.00) | $0.00 | $(0.00) |
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic | 5889437474 | 5521935077 | 5889437474 | 5181449581 |
| &nbsp;&nbsp;&nbsp;Diluted | 5889437474 | 5521935077 | 5889437474 | 5181449581 |

---

See accompanying notes to unaudited consolidated financial statements.

**TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES** 

**CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIT**

**FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024**

 **(Unaudited)**

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Preferred Stock Series E** | **Preferred Stock Series E** | **Preferred Stock Series G** | **Preferred Stock Series G** | **Preferred Stock Series H** | **Preferred Stock Series H** | **Common Stock** | **Common Stock** | | | |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | **Additional<br> Paid-in**<br>**Capital** | **Accumulated**<br>**Deficit** | **Total<br> Shareholders'**<br>**Deficit** |
| Balance, December 31, 2024 | 21418 | $21 | 406500 | $407 | 32374 | $32 | 5889437474 | $5889437 | $128686122 | $(146468036) | $(11892017) |
| Dividends accrued |  |  |  |  |  |  |  |  |  | (76990) | (76990) |
| Net loss | - | - | - | - | - | - | - | - | - | (498270) | (498270) |
| Balance, March 31, 2025 | 21418 | 21 | 406500 | 407 | 32374 | 32 | 5889437474 | 5889437 | 128686122 | (147043296) | (12467277) |
| Conversion of Series E and Series G preferred shares and accrued dividends and cancellation of warrants into Series J preferred shares | (21418) | (21) | (406500) | (407) |  |  |  |  | (4355264) |  | (4355692) |
| Series J redemption premium recorded |  |  |  |  |  |  |  |  | (856880) |  | (856880) |
| Gain on extinguishment of notes payable and accrued interest converted to Series J preferred shares |  |  |  |  |  |  |  |  | (541788) |  | (541788) |
| Gain on extinguishment of accounts payable and accrued expenses converted to Series J preferred shares |  |  |  |  |  |  |  |  | (495355) |  | (495355) |
| Gain on extinguishment of accrued dividends converted to Series J preferred shares |  |  |  |  |  |  |  |  | (429585) |  | (429585) |
| Dividends accrued |  |  |  |  |  |  |  |  |  | (140696) | (140696) |
| Net income | - | - | - | - | - | - | - | - | - | 946942 | 946942 |
| Balance, June 30, 2025 | - | $- | - | $- | 32374 | $32 | 5889437474 | $5889437 | $122007250 | $(146237050) | $(18340331) |

---

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Preferred Stock Series E** | **Preferred Stock Series E** | **Preferred Stock Series G** | **Preferred Stock Series G** | **Preferred Stock Series H** | **Preferred Stock Series H** | **Common Stock** | **Common Stock** | | | |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | **Shares** | **Amount** | **Additional<br> Paid-in**<br>**Capital** | **Accumulated**<br>**Deficit** | **Total<br> Shareholders'**<br>**Deficit** |
| Balance, December 31, 2023 | 21418 | $21 | 475500 | $476 | 32374 | $32 | 4481102346 | $4481102 | $129854231 | $(142333298) | $(7997436) |
| Accretion of stock-based compensation |  |  |  |  |  |  |  |  | 27987 |  | 27987 |
| Common stock issued for conversion of Series G preferred shares |  |  | (44837) | (45) |  |  | 696876687 | 696877 | (574940) |  | 121892 |
| Dividends accrued |  |  |  |  |  |  |  |  |  | (79762) | (79762) |
| Net loss | - | - | - | - | - | - | - | - | - | (2064920) | (2064920) |
| Balance, March 31, 2024 | 21418 | 21 | 430663 | 431 | 32374 | 32 | 5177979033 | 5177979 | 129307278 | (144477980) | (9992239) |
| Accretion of stock-based compensation |  |  |  |  |  |  |  |  | 27987 |  | 27987 |
| Common stock issued for conversion of Series G preferred shares |  |  | (17506) | (18) |  |  | 500000000 | 500000 | (494765) |  | 5217 |
| Dividends accrued |  |  |  |  |  |  |  |  |  | (76358) | (76358) |
| Net loss | - | - | - | - | - | - | - | - | - | (573574) | (573574) |
| Balance, June 30, 2024 | 21418 | $21 | 413157 | $413 | 32374 | $32 | 5677979033 | $5677979 | $128840500 | $(145127912) | $(10608967) |

---

See accompanying notes to unaudited consolidated financial statements.

**TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES** 

**CONSOLIDATED STATEMENTS OF CASH FLOWS** 

**(Unaudited)** 

---

| | | |
|:---|:---|:---|
|  | **For the Six Months Ended** | **For the Six Months Ended** |
|  | **June 30,** | **June 30,** |
|  | **2025** | **2024** |
| CASH FLOWS FROM OPERATING ACTIVITIES: |  |  |
| &nbsp;&nbsp;&nbsp;Net income (loss) | $448672 | $(2638494) |
| &nbsp;&nbsp;&nbsp;Adjustments to reconcile net income (loss) to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization expense - discontinued operations |  | 39018 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation |  | 55974 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Impairment loss - discontinued operations |  | 555628 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain on deconsolidation of subsidiary - discontinued operations |  | (158347) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Recovery from (Allowance for) credit losses - discontinued operations |  | (3937) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain on debt extinguishment | (1481742) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable |  | 636293 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | (240) | 232908 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Security deposit |  | 6155 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | 291382 | 510741 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses - related parties | 106562 | 99567 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued compensation and related benefits | 245680 | 594651 |
| NET CASH USED IN OPERATING ACTIVITIES | (389686) | (69843) |
| CASH FLOWS FROM FINANCING ACTIVITIES: |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from notes payable | 275000 |  |
| &nbsp;&nbsp;&nbsp;Proceeds from notes payable - related parties |  | 387838 |
| &nbsp;&nbsp;&nbsp;Proceeds from notes payable - related parties - discontinued operations |  | 4000 |
| &nbsp;&nbsp;&nbsp;Repayment of notes payable | - | (346034) |
| NET CASH PROVIDED BY FINANCING ACTIVITIES | 275000 | 45804 |
| NET DECREASE IN CASH | (114686) | (24039) |
| CASH, beginning of period | 177257 | 218152 |
| CASH, end of period | $62571 | $194113 |
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION |  |  |
| Cash paid for: |  |  |
| &nbsp;&nbsp;&nbsp;Interest | $- | $2468 |
| &nbsp;&nbsp;&nbsp;Income taxes | $- | $- |
| SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: |  |  |
| &nbsp;&nbsp;&nbsp;Conversion of Series G preferred stock and accrued dividends to common stock | $- | $127109 |
| &nbsp;&nbsp;&nbsp;Conversion of Series E and Series G preferred stock and accrued dividends to Series J preferred stock | $1116208 | $- |
| &nbsp;&nbsp;&nbsp;Conversion of notes payable and notes payable - related parties and accrued interest to Series J preferred stock | $2546519 | $- |
| &nbsp;&nbsp;&nbsp;Conversion of accounts payable and accrued expenses to Series J preferred stock | $550395 | $- |
| &nbsp;&nbsp;&nbsp;Increase in Series J redemption premium applied against additional paid-in capital | $856880 | $- |
| &nbsp;&nbsp;&nbsp;Accrual of preferred stock dividends | $217686 | $156120 |

---

See accompanying notes to unaudited consolidated financial statements.

**TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**AS OF AND FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024**

**(Unaudited)**

**NOTE 1 – <u>ORGANIZATION AND BUSINESS OPERATIONS</u>**

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 six months ended June 30, 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 Company's 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 FX's 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 three and six months ended June 30, 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, TLSS-CE, which owns 100% of the stock of Cougar Express, has not filed for bankruptcy.

Effective February 3, 2023, the Company's 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 three and six months ended June 30, 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 the issuance of these unaudited 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 three and six months ended June 30, 2025, and 2024.

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 Company's revenue generating operations in February 2024 and through the date of the issuance of these unaudited 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 these interim financial statements and timely file this Quarterly Report on Form 10-Q for the quarter ended June 30, 2025 (this "Quarterly 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 2025 calendar year.

**TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**AS OF AND FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024**

**(Unaudited)**

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 Company's former business and/or enter into new line(s) of business, or to do so profitably.

**NOTE 2 – <u>SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION</u>**

Basis of presentation and principles of consolidation

The unaudited consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP") and the rules and regulations of the United States Securities and Exchange Commission ("SEC") for interim financial information. Accordingly, they do not include all the information and disclosures necessary for comprehensive presentation of financial position, results of operations or cash flow. However, these unaudited consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, which, in the opinion of management, are necessary for fair presentation of the information contained therein. It is suggested that these unaudited interim consolidated financial statements be read in conjunction with the consolidated financial statements of the Company for the year ended December 31, 2024 and notes thereto included in the Company's annual report on SEC Form 10-K, filed on April 15, 2025. The Company follows the same accounting policies in the preparation of its annual and interim reports. The results of operations for the interim periods are not necessarily an indication of operating results to be expected for the full year.

The unaudited 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 Company's 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 subsidiary's assets and liabilities or the carrying amount of the group of assets.

Going concern

These unaudited 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 $448,672 and $(2,638,494) for the six months ended June 30, 2025 and 2024, respectively. The net cash used in operations was $389,686 and $69,843 for the six months ended June 30, 2025 and 2024, respectively. Additionally, the Company had an accumulated deficit and working capital deficit of $146,237,050 and $8,914,651, respectively, on June 30, 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 Company's ability to continue as a going concern for a period of twelve months from the issuance date of this Quarterly 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 unaudited 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 June 30, 2025, the Company had no cash in the bank in excess of FDIC insured levels.

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 unaudited consolidated financial statements and footnotes include the valuation of accounts receivable, the valuation of right of use assets and related liabilities, assumptions used in assessing impairment of long-lived assets, 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.

**TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**AS OF AND FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024**

**(Unaudited)**

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 June 30, 2025. Accordingly, the estimates presented in these unaudited 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 entity's 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 June 30, 2025, and December 31, 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 unaudited 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 Company's 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 June 30, 2025, and December 31, 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 customer's 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 one 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.

**TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**AS OF AND FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024**

**(Unaudited)**

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 Company's 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 Company's logistic and transportation business, all ROU assets were either impaired or deconsolidated and any such impairment is included in discontinued operations as of June 30, 2025, and December 31, 2024. Currently, all leased premises have been abandoned (see Note 8).

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 asset's 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 segment's 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 Company's 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 Company's 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 Company's control is classified as temporary equity. The Company's Series J Preferred stock features certain redemption rights that are considered to be outside of the Company's 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 Company's unaudited 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.

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 Company's 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 Company's customers. Primarily, the Company's 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.

**TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**AS OF AND FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024**

**(Unaudited)**

The Company's 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 is performed, based upon a monthly or weekly rate.

Inherent within the Company's 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 three and six months ended June 30, 2024, all revenues and cost of revenues are included in discontinued operations. No revenue was generated during the three and six months ended June 30, 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 loss per share

Pursuant to ASC 260-10-45, basic loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding for the periods presented. Diluted loss per share is computed by dividing net 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:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended**<br> **June 30,** | **Three Months Ended**<br> **June 30,** | **Six Months Ended**<br> **June 30,** | **Six Months Ended**<br> **June 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| **Net income (loss) per common share - basic:** |  |  |  |  |
| Net income (loss) | $946942 | $(573574) | $448672 | $(2638494) |
| Add: deemed contribution on exchange of equity instruments | 800380 |  | 800380 |  |
| Less: accrued dividends | (140696) | (76358) | (217686) | (156120) |
| Net income (loss) attributable to common stockholders | $1606626 | $(649932) | $1031366 | $(2794614) |
| Weighted average common shares outstanding – basic | 5889437474 | 5521935077 | 5889437474 | 5181449581 |
| Net income (loss) per common share – basic | $0.00 | $(0.00) | $0.00 | $(0.00) |
| **Net income (loss) per common share - diluted:** |  |  |  |  |
| Net income (loss) attributable to common shareholders – basic | $1606626 | $(649932) | $1031366 | $(2794614) |
| Add: adjustments to net income (loss) | - | - | - | - |
| Numerator for income (loss) per common share – diluted | $1606626 | $(649932) | $1031366 | $(2794614) |
| Weighted average common shares outstanding – basic | 5889437474 | 5521935077 | 5889437474 | 5181449581 |
| Add: dilutive shares related to: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Stock warrants |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Convertible preferred shares | - | - | - | - |
| Weighted average common shares outstanding – diluted | 5889437474 | 5521935077 | 5889437474 | 5181449581 |
| Net income (loss) per common share – diluted | $0.00 | $(0.00) | $0.00 | $(0.00) |

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**TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**AS OF AND FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024**

**(Unaudited)**

Potentially dilutive shares of common stock were excluded from the computation of diluted shares outstanding for the three and six months ended June 30, 2025, and 2024 as they would have an anti-dilutive impact on the Company's net losses in that period and consisted of the following:

---

| | | |
|:---|:---|:---|
|  | June 30, 2025 | June 30, 2024 |
| Stock warrants | 323571429 | 948338679 |
| Series E convertible preferred stock |  | 95238667 |
| Series G convertible preferred stock |  | 2065785000 |
| Series H convertible preferred stock | 323740000 | 323740000 |
| Series J convertible preferred stock | 8568800000 | - |
|  | 9216111429 | 3433102346 |

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Recent accounting pronouncements

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense 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 – <u>NOTES PAYABLE – RELATED PARTIES</u>**

On April 14, 2023, the Company's 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 Company's Secretary and a Director of the Company; and (b) $100,000 from Sebastian Giordano on April 21, 2023; Mr. Giordano is the Company's Chief Executive Officer, 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 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 Company's 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 31, 2025, the Company entered into settlement agreements (the "Series J Settlement Agreements") with certain holders of the Company's 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 Company's 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, 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.

As of June 30, 2025, and December 31, 2024, aggregate notes payable to related parties in the principal amounts of $0 and $1,547,838, respectively, were outstanding. As of June 30, 2025, and December 31, 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 unaudited consolidated balance sheets. For the three months ended June 30, 2025, and 2024, interest expense – related parties amounted to $43,976 and $53,788, respectively. For the six months ended June 30, 2025, and 2024, interest expense – related parties amounted to $106,563 and $99,567, respectively.

**TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**AS OF AND FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024**

**(Unaudited)**

**NOTE 4 – <u>NOTE PAYABLE</u>**

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 Company's 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 Company's 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.

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 Company's 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 Company's 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 Company's 2024 annual financial statements and audit by the Company's 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.

**TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**AS OF AND FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024**

**(Unaudited)**

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 an amendment agreement 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 Company's prepare the Company's 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.

Between May 31, 2025 and June 30, 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 $575,000 in outstanding notes and accrued interest payable of $26,986 in exchange for the issuance of an aggregate of 6,019 shares of Series J Preferred, effective as of June 1, 2025. In connection with the exchange of the outstanding notes and interest payable for shares of Series J Preferred, during the three and six months ended June 30, 2025, the Company recorded a gain on debt extinguishment of $541,788, which is included in gain on debt extinguishment on the accompanying unaudited consolidated statement of operations.

As of June 30, 2025, and December 31, 2024, aggregate notes payable in the aggregate principal amounts of $0 and $300,000, respectively, were outstanding.

**NOTE 5– <u>STOCKHOLDERS' EQUITY (DEFICIT)</u>**

Preferred stock

The Company has 10,000,000 authorized shares of preferred stock, $0.001 par value per share. The Company's 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 holder's affiliates and any persons acting as a group together with the holder or any of the holder's 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 June 30, 2025 and December 31, 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.

**TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**AS OF AND FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024**

**(Unaudited)**

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 holder's affiliates and any persons acting as a group together with the holder or any of the holder's 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 Company's 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 June 30, 2025, and December 31, 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 holder's 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.

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. As of June 30, 2025, and December 31, 2024, the Company has accrued dividends of $11,357 and $195,425, respectively, which has been included in accrued expenses on the accompanying consolidated balance sheets. See discussion of Series E Preferred accrued dividends in following paragraphs.

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.

**TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**AS OF AND FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024**

**(Unaudited)**

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 Company's 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 Company's 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, the Company entered into exchange agreements with holders of the Company's 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 of $191,160 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 June 30, 2025, and December 31, 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 Company's 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.

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.

**TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**AS OF AND FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024**

**(Unaudited)**

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. As of June 30, 2025, and December 31, 2024, the Company has accrued dividends of $0 and $785,845, respectively, which has been included in accrued expenses on the accompanying unaudited consolidated balance sheets. See discussion of Series G Preferred accrued dividends in following paragraphs.

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 Company's 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 Company's 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 three months ended June 30, 2025 and 2024, the Company issued 0 and 500,000,000 shares of its common stock in connection with the conversion of 0 and 17,506 shares of Series G Preferred and accrued dividends payable of $0 and $5,217, respectively. The conversion ratio was based on the Series G COD.

During the six months ended June 30, 2025 and 2024, the Company issued 0 and 1,196,876,687 shares of its common stock in connection with the conversion of 0 and 62,343 shares of Series G Preferred and accrued dividends payable of $127,109, respectively. The conversion ratio was based on the Series G COD.

Effective June 1, 2025, the Company entered into the Exchange Agreements with holders of the Company's 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 June 30, 2025, and December 31, 2024, 0 and 406,500 shares of Series G Preferred were issued and outstanding, respectively.

***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 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 Company's 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 Company's 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.

As of both June 30, 2025, and December 31, 2024, 32,374 shares of Series H Preferred were outstanding.

**TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**AS OF AND FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024**

**(Unaudited)**

***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 Company's 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. 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 Company's 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 holder's 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 Company's 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.

The shares of Series J Preferred are redeemable upon the occurrence of certain triggering events. Upon such triggering events, holders of Series J Preferred have the option to cause the Company to redeem all or part of such holder's 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 Company's control is classified as temporary equity. The Company's Series J Preferred stock features certain redemption rights that are considered to be outside of the Company's 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 Company's unaudited consolidated balance sheets as of June 30, 2025. In connection with the recording of the 10% redemption premium, the Company increased the redemption value of the Series J preferred stock by $856,880, 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.

Between June 17, 2025 and June 30, 2025, the Company entered into Exchange Agreements with the holders of the Company's 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. In connection with the exchange of Series E Preferred and Series G Preferred and outstanding accrued dividends to Series J Preferred, during the three and six months ended June 30, 2025, the Company recorded a gain on debt extinguishment of $429,585, which is included in gain on debt extinguishment on the accompanying unaudited 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 three and six months ended June 30, 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.

**TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**AS OF AND FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024**

**(Unaudited)**

Between May 30, 2025 and July 21, 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 $575,000 in outstanding notes and accrued interest of $26,986 in exchange for the issuance of an aggregate of 6,019 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 three and six months ended June 30, 2025, the Company recorded a gain on debt extinguishment of $541,788, which is included in gain on debt extinguishment on the accompanying unaudited 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. In connection with the exchange of outstanding accounts payable and accrued expense to shares of Series J Preferred, during the three and six months ended June 30, 2025, the Company recorded a gain on debt extinguishment of $495,355, which is included in gain on debt extinguishment on the accompanying unaudited consolidated statement of operations.

***Common stock***

Shares issued in connection with conversion of Series G preferred shares

During the three months ended June 30, 2025 and 2024, the Company issued 0 and 500,000,000 shares of its common stock in connection with the conversion of 0 and 17,506 shares of Series G Preferred and accrued dividends payable of $0 and $5,217, respectively. The conversion ratio was based on the Series G COD.

During the six months ended June 30, 2025 and 2024, the Company issued 0 and 1,196,876,687 shares of its common stock in connection with the conversion of 0 and 62,343 shares of Series G Preferred and accrued dividends payable of $127,109, respectively. The conversion ratio was based on the Series G COD.

Shares issued for compensation

During the six months ended June 30, 2025, and 2024, aggregate accretion of stock-based compensation expense, which is net of the reversal of previously recognized stock-based expense due to forfeiture, amounted to $0 and $55,974, respectively. Total unrecognized compensation expense related to these vested and unvested shares of common stock on June 30, 2025, amounted to $0.

Warrants

Warrant activities for the six months ended June 30, 2025 are summarized as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | Number of Shares <br>Issuable Upon<br> Exercise of <br>Warrants | Weighted <br>Average Exercise <br>Price | Weighted Average <br>Remaining <br>Contractual Term<br> (Years) | Aggregate <br>Intrinsic Value |
| Balance Outstanding December 31, 2024 | 946171489 | $0.004 | 1.56 | $0 |
| Cancelled | (593642860) | (0.002) |  |  |
| Expired | (28957200) | (0072) | - | - |
| Balance Outstanding June 30, 2025 | 323571429 | $0.002 | 1.22 | $0 |
| Exercisable, June 30, 2025 | 323571429 | $0.002 | 1.22 | $0 |

---

**NOTE 6 – <u>COMMITMENTS AND CONTINGENCIES</u>**

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 June 30, 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.

**TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**AS OF AND FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024**

**(Unaudited)**

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 (see Note 9).

***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 Company's 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 Company's 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 Company's 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.

**TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**AS OF AND FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024**

**(Unaudited)**

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 plaintiff's 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 Plaintiff's 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 Shypdirect's 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 TLSS's 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 Plaintiff's 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 Plaintiff's 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 Company's 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 Company's 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.

**TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**AS OF AND FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024**

**(Unaudited)**

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 Plaintiff's 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 Perez's 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 Perez's 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 Company's 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 Emerson's products while under Severance Trucking's 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 attorney's fees. As of June 30, 2025, and December 31, 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 Company's 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 have been accrued as of June 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 9).

***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 Trucking's 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/iunjust 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 June 30, 2025, the amount of $57,199 is recorded as a liability of Severance Trucking and included in liabilities of discontinued operations.

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 Company's 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 Company's executives.

**TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**AS OF AND FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024**

**(Unaudited)**

On March 1, 2024, the Board, appointed Sebastian Giordano, the Company's Chairman and Chief Executive Officer, to the additional offices of Chief Financial Officer and Treasurer of the Company. Due to the Company's 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. Giordano's 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. 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.

As of June 30, 2025, and December 31, 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:

---

| | | |
|:---|:---|:---|
|  | June 30, 2025 | December 31, 2024 |
| (i) Unpaid base salary – since February 16, 2024 | $595375 | $378875 |
| (ii) Accrued vacation pay | 119636 | 104244 |
| (iii) Health insurance premium – since February 16, 2024 | 36768 | 22980 |
| (iv) Severance payment due (a) | 400000 | 400000 |
| Total | $1151779 | $906099 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(a) The
 above amount consist of the severance payment that became due and payable under the terms of the CEO Employment Agreement as
 a result of the Company's failure to cure the default as discussed above, which is equal to Mr. Giordano's annual base
 salary for the one-year subsequent to the termination of the CEO Employment Agreement ($400,000).

**NOTE 7– <u>RELATED PARTY TRANSACTIONS AND BALANCES</u>**

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.

**TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**AS OF AND FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024**

**(Unaudited)**

As of June 30, 2025, and December 31, 2024, aggregate notes payable to related parties in the principal amounts of $0 and $1,547,838, respectively, were outstanding. As of June 30, 2025, and December 31, 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 unaudited consolidated balance sheets. For the three months ended June 30, 2025, and 2024, interest expense – related parties amounted to $43,976 and $53,788, respectively. For the six months ended June 30, 2025, and 2024, interest expense – related parties amounted to $106,563 and $99,567, respectively.

**NOTE 8 – <u>DISCONTINUED OPERATIONS</u>**

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 Connection's 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, 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 Company's continuing operations.

The following table presents the major classes of assets and liabilities of the discontinued operations related to the Subsidiaries:

---

| | | |
|:---|:---|:---|
|  | **June 30,**<br>**2025** | **December 31,**<br>**2024** |
| Assets of discontinued operations: |  |  |
| Accounts receivable, net | $419 | $419 |
| Assets of discontinued operations, current portion | 419 | 419 |
| &nbsp;&nbsp;&nbsp;Total assets of discontinued operations | $419 | $419 |
| Liabilities of discontinued operations: |  |  |
| Notes payable, current portion | $2467432 | $2467432 |
| Accounts payable | 1167370 | 1286931 |
| Accrued expenses | 573682 | 394198 |
| Lease liabilities, current portion | 2522042 | 2522042 |
| Liabilities of discontinued operations, current portion | 6730526 | 6670603 |
| &nbsp;&nbsp;&nbsp;Total liabilities of discontinued operations | $6730526 | $6670603 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | Three Months Ended<br> June 30, | Three Months Ended<br> June 30, | Six Months Ended<br> June 30, | Six Months Ended<br> June 30, |
|  | 2025 | 2024 | 2025 | 2024 |
| Revenues | $- | $- | $- | $1371993 |
| Cost of revenues, excluding depreciation and amortization | - | 28124 | - | 1411953 |
| Gross profit (loss) |  | (28124) |  | (39960) |
| Operating expenses | (2510) | (123473) | (7491) | (716468) |
| Impairment loss |  |  |  | (555628) |
| Other (expenses) income, net | (89741) | (130453) | (179069) | (157070) |
| Loss from discontinued operations | $(92251) | $(282050) | $(186560) | $(1469126) |

---

Accounts receivable

On June 30, 2025 and December 31, 2024, accounts receivable, net included in assets from discontinued operations consisted of the following:

---

| | | |
|:---|:---|:---|
|  | June 30, 2025 | December 31, 2024 |
| Accounts receivable | $419 | $419 |
| Allowance for credit estimated losses | - | - |
| Accounts receivable, net | $419 | $419 |

---

**TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**AS OF AND FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024**

**(Unaudited)**

Property and equipment, net

For the three and six months ended June 30, 2024, depreciation expense amounted to $0 and $39,018, respectively, and are included in loss from discontinued operations. For the three and six months ended June 30, 2025, depreciation expense amounted to $0.

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 six months ended June 30, 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 unaudited consolidated statements of operations.

During the six months ended June 30, 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 unaudited consolidated statements of operations.

Notes Payable

On June 30, 2025, and December 31, 2024, notes payable included in liabilities of discontinued operations consisted of the following:

---

| | | |
|:---|:---|:---|
|  | June 30, 2025 | December 31, 2024 |
| Principal amounts | $2467432 | $2467432 |
| Less: current portion of notes payable | (2467432) | (2467432) |
| Notes payable – long-term | $- | $- |

---

*<u>JFK Cartage acquisition promissory note</u>*

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:

&nbsp;&nbsp;&nbsp;&nbsp;(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 June 30, 2025, and December 31, 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.

*<u>Severance Trucking acquisition promissory note</u>*

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 June 30, 2025, and December 31, 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 Company's 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.

**TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**AS OF AND FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024**

**(Unaudited)**

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 June 30, 2025, and December 31, 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 June 30, 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 June 30, 2025, and December 31, 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 June 30, 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 June 30, 2025, and December 31, 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 June 30, 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 June 30, 2025, and December 31, 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 June 30, 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 June 30, 2025, and December 31, 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 June 30, 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 June 30, 2025, and December 31, 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 June 30, 2025, the trucks securing this loan were forfeited and returned to the lender.

*<u>Operating and Financing Lease Right-Of-Use ("Rou") Assets and Operating and Financing Lease Liabilities</u>*

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 June 30, 2025, and December 31, 2024, operating and financing lease liabilities related to the ROU assets are included in liabilities of discontinued operations and are summarized as follows:

---

| | | |
|:---|:---|:---|
|  | June 30, 2025 | December 31, 2024 |
| Lease liabilities related to office leases and revenue equipment right of use assets | $2522042 | $2522042 |
| Less: current portion of lease liabilities | (2522042) | (2522042) |
| Lease liabilities – long-term | $- | $- |

---

*<u>Other liabilities of discontinued operations</u>*

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 Emerson's products while under Severance Trucking's control. Such amount is recorded as a liability of Severance Trucking and included in liabilities of discontinued operations.

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 attorney's fees. As of June 30, 2025, and December 31, 2024, such amounts are recorded as a liability of Severance Trucking and included in liabilities of discontinued operations.

On August 24, 2024, TLSS Ops received a Notice of Default and Demand for Payment from RxBenefits, Inc. ("RxBenefits") due to the Company's 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. Such amount is recorded as accounts payable of TLSS Ops, which is included in liabilities of discontinued operations.

**TRANSPORTATION AND LOGISTICS SYSTEMS, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**AS OF AND FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024**

**(Unaudited)**

**NOTE 9 – <u>SUBSEQUENT EVENTS</u>**

*Exchange of Accounts Payable and Accrued Expenses and Accrued Dividends and Warrants for Series J Preferred*

 

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.

On July 21, 2025, the Company entered into the A&S Settlement Agreement in connection with the A&S Claim in which all claims were resolved by the issuance of 1,250 shares of the Company's Series J Senior Convertible Preferred Stock. In connection with the exchange of the A&S Claim, to Series J Preferred Stock, on July 21, 2025, the Company recorded a gain on debt extinguishment of $74,071.

On July 21, 2025, the Company entered into a Series J Settlement Agreements 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. In connection with the exchange of outstanding accounts payable and accrued expense to Series J Preferred Stock, the Company recorded a gain on debt extinguishment of approximately $324,000.

On July 21, 2025, the Company entered into the Litigation Settlement Agreement with SCS. Pursuant to the Litigation Settlement Agreement, after determining that the Confidential Settlement Agreement and Mutual Release, effective on February 13, 2025 and its terms, the court 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, effective as of July 23, 2025, was fair to SCS. The court entered an order which dismissed the action with prejudice. As of June 30, 2025 and December 31, 2024, the settlement amount of $36,000 has been recorded and reflected in accounts payable on the accompanying unaudited consolidated balance sheets.

**ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

*You should read the following discussion and analysis of our financial condition and plan of operations together with unaudited consolidated financial statements and the related notes appearing elsewhere in this Quarterly Report. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled "Risk Factors" included in our 2024 Annual Report. All amounts in this report are in U.S. dollars, unless otherwise noted.*

**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 February 26, 2025, our shares of common stock resumed trading on the OTC PINK, now called the OTCID.

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 Company's other subsidiaries have all ceased operations since mid-February 2024 and have not filed bankruptcy.

Subsequent to the cessation of all of the Company's revenue generating operations in February 2024 and through the date of this Quarterly Report, the Company continues to remain insolvent and as a result, was unable to timely meet its annual and quarterly periodic reporting obligations under the 34 Act, for 2024. The Company obtained financing to enable it to complete the preparation and review of the interim financial statements for the quarter ended June 30, 2025 and file this Quarterly 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 2025 calendar year.

Between May 2025 and June 30, 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 $191,160, 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 593,642,860 shares of Common Stock all in exchange for the issuance of an aggregate of 54,719 shares of the Company's Series J Senior Convertible Preferred Stock, par value $0.001 per share (the "Series J Preferred").

Also between May 2025 and June 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 $3,096,914 in outstanding liabilities and accrued interest in exchange for an aggregate of 30,969 shares of Series J Preferred.

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 Company's 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 Quarterly 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.

**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 subsidiary's assets and liabilities or the carrying amount of the group of assets.

***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 three and six months ended June 30, 2025, compared with the three and six months ended June 30, 2024***

The following table sets forth our revenues, expenses and net loss for the three and six months ended June 30, 2025, and 2024.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | Three Months Ended<br> June 30, | Three Months Ended<br> June 30, | Six Months Ended<br> June 30, | Six Months Ended<br> June 30, |
|  | 2025 | 2024 | 2025 | 2024 |
| Revenues | $- | $- | $- | $- |
| Operating expenses | 389375 | 237736 | 721646 | 1067333 |
| Loss from operations | (389375) | (237736) | (721646) | (1067333) |
| Other income (expenses), net | 1428568 | (53788) | 1356878 | (102035) |
| Income (loss) from continuing operations | 1039193 | (291524) | 635232 | (1169368) |
| Loss from discontinued operations | (92251) | (282050) | (186560) | (1469126) |
| Net income (loss) | 946942 | (573574) | 448672 | (2638494) |
| Deemed contribution on exchange of equity instruments | 800380 |  | 800380 |  |
| Deemed and accrued dividends | (140696) | (76358) | (217686) | (156120) |
| Net income (loss) attributable to common shareholders | $1606626 | $(649932) | $1031366 | $(2794614) |

---

**Results of Operations**

***Revenue***

For the three and six months ended June 30, 2024, total revenue is reflected as $0 as all activities of the Subsidiaries were reclassified as discontinued operations on our consolidated financial statements. No revenue was recognized during the six months ended June 30, 2025.

***Operating Expenses***

For the three months ended June 30, 2025, total operating expenses amounted to $389,375 as compared to $237,736 for the three months ended June 30, 2024, an increase of $151,639, or 63.8%, as reflected in the accompanying chart and described more fully below. For the six months ended June 30, 2025, total operating expenses amounted to $721,646 as compared to $1,067,333 for the six months ended June 30, 2024, a decrease of $345,687, or 32.4%, as reflected in the accompanying chart and described more fully below.

For the three and six months ended June 30, 2025, and 2024, operating expenses consisted of the following:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | Three Months Ended<br> June 30, | Three Months Ended<br> June 30, | Six Months Ended<br> June 30, | Six Months Ended<br> June 30, |
|  | 2025 | 2024 | 2025 | 2024 |
| Compensation and related benefits | $160340 | $187050 | $320680 | $785382 |
| Legal and professional Fees | 226301 | 23544 | 397261 | 167977 |
| General and administrative expenses | 2734 | 27142 | 3705 | 113974 |
| Total Operating Expenses | $389375 | $237736 | $721646 | $1067333 |

---

***Compensation and related benefits***

For the three months ended June 30, 2025, compensation and related benefits amounted to $160,340 as compared to $187,050 for the three months ended June 30, 2024, a decrease of $26,710, or 14.3%. During the three months ended June 30, 2025, the overall decrease in compensation and related benefits as compared to the three months ended June 30, 2024 was primarily attributable to a decrease in stock-based compensation of $27,990.

For the six months ended June 30, 2025, compensation and related benefits amounted to $320,680 as compared to $785,382 for the six months ended June 30, 2024, a decrease of $464,702, or 59.2%. During the six months ended June 30, 2025, the overall decrease in compensation and related benefits as compared to the six months ended June 30, 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, and a decrease in stock-based compensation of $55,974.

***Legal and professional fees***

For the three months ended June 30, 2025, legal and professional fees were $226,301 as compared to $23,544 for the three months ended June 30, 2024, an increase of $202,757, or 861.2%, which was primarily attributable to an increase in accounting and auditing fees of $34,342 and an increase in legal fees of $163,986, offset by a net decrease in other professional fees of $5,480. The increase in legal fees related to 2025 period debt settlement agreements and litigation settlements.

For the six months ended June 30, 2025, legal and professional fees were $397,261 as compared to $167,977 for the six months ended June 30, 2024, an increase of $229,284, or 136.5%, which was primarily attributable to an increase in accounting and auditing fees of $87,390 and an increase in legal fees of $142,818, offset by a net decrease in other professional fees of $924. The increase in legal fees related to 2025 period debt settlement agreements and litigation settlements.

***General and administrative expenses***

General and administrative expenses include insurance expense and other general and administrative expenses.

For the three months ended June 30, 2025, general and administrative expenses were $2,734 as compared to $27,142 for the three months ended June 30, 2024, a decrease of $24,408, or 89.9%. For the six months ended June 30, 2025, general and administrative expenses were $3,705 as compared to $113,974 for the six months ended June 30, 2024, a decrease of $110,269, or 96.7%. The decreases were primarily attributable to a decrease in operations due to the discontinuation of our trucking businesses in February 2024 and cost-cutting measures. measures.

***Loss from operations***

For the three months ended June 30, 2025, loss from operations amounted to $389,375 as compared to $237,736 for the three months ended June 30, 2024, an increase of $151,639, or 63.8%, primarily due to an increase in legal and professional fees of $202,757, offset by (i) a decrease in general and administrative expenses of $24,408; and (ii) a decrease in compensation and other benefits of $26,710, as discussed above.

For the six months ended June 30, 2025, loss from operations amounted to $721,646 as compared to $1,067,333 for the six months ended June 30, 2024, a decrease of $345,687, or 32.4%, primarily due to: (i) a decrease in general and administrative expenses of $110,269; and (ii) a decrease in compensation and other benefits of $464,702, offset by an increase in legal and professional fees of $229,284, as discussed above.

**Other income (expenses), net**

Total other income (expenses), net include interest expenses and gains on debt extinguishment. For the three and six months ended June 30, 2025, and 2024, other income (expenses), net consisted of the following:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | Three Months Ended<br> June 30, | Three Months Ended<br> June 30, | Six Months Ended<br> June 30, | Six Months Ended<br> June 30, |
|  | 2025 | 2024 | 2025 | 2024 |
| Interest expense | $(9198) | $- | $(18301) | $(2.468) |
| Interest expense – related parties | (43976) | (53788) | (106563) | (99567) |
| Gain on debt extinguishment | 1481742 | - | 1481742 | - |
| Total Other Income (Expenses), net | $1428568 | $(53788) | $1356878 | $(102035) |

---

For the three months ended June 30, 2025 and 2024, aggregate interest expense was $53,174 and $53,788, respectively, a decrease of $614, or 1.1%. The increase in interest expense was primarily attributable to an increase in related party and third party notes payable. For the six months ended June 30, 2025 and 2024, aggregate interest expense was $124,864 and $102,035, respectively, an increase of $22,829, or 22.4%. The six-month increase in interest expense was primarily attributable to an increase in related party and third party notes payable. Effective June 1, 2025, all obligations under the related party and third party notes payable were converted to shares of Series J Preferred.

For the three and six months ended June 30, 2025, in connection with the Series J Settlement Agreements and Series J Exchange Agreements, the Company recognized a gain on debt extinguishment of $1,466,728. Additionally, during the three and six months ended June 30, 2025, we recognized a gain on other debt extinguishment of $15,014. We did not recognize any gain on debt extinguishment during the three and six months ended June 30, 2024.

**Loss from discontinued operations**

In February 2024, we ceased operations of all remaining 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 three and six months ended June 30, 2025 and 2024 related to discontinued operations.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | Three Months Ended<br> June 30, | Three Months Ended<br> June 30, | Six Months Ended<br> June 30, | Six Months Ended<br> June 30, |
|  | 2025 | 2024 | 2025 | 2024 |
| Revenues | $- | $- | $- | $1371993 |
| Cost of revenues, excluding depreciation and amortization | - | 28124 | - | 1411953 |
| Gross loss |  | (28124) |  | (39960) |
| Operating expenses | (2510) | (123473) | (7491) | (716468) |
| Impairment loss |  |  |  | (555628) |
| Other expenses, net | (89741) | (130453) | (179069) | (157070) |
| Loss from discontinued operations | $(92251) | $(282050) | $(186560) | $(1469126) |

---

During the six months ended June 30, 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 three months ended June 30, 2025, and 2024, net income (loss) amounted to $946,942 and $(573,574), respectively. For the three months ended June 30, 2025, net income attributable to common stockholders, which included dividends accrued on shares of Series E Preferred, Series G Preferred, and Series J Preferred of $140,696, and the recording of a deemed contribution on exchange of equity instruments of $800,380, amounted to $1,606,626, or $0.00 per basic and diluted common share. For the three months ended June 30, 2024, net loss attributable to common stockholders, which included dividends accrued on the Series E Preferred and the Series G Preferred of $76,358, amounted to $(649,932), or $(0.00) per basic and diluted common share.

Due to factors discussed above, for the six months ended June 30, 2025, and 2024, net income (loss) amounted to $448,672 and $(2,638,494), respectively. For the six months ended June 30, 2025, net income attributable to common stockholders, which included dividends accrued on shares of Series E Preferred, Series G Preferred, and Series J Preferred of $217,686, and the recording of a deemed contribution on exchange of equity instruments of $800,380, amounted to $1,031,366, or $0.00 per basic and diluted common share. For the six months ended June 30, 2024, net loss attributable to common stockholders, which included dividends accrued on shares of Series E Preferred and the Series G Preferred of $156,120, amounted to $(2,794,614), or $(0.00) per basic and diluted common share.

**LIQUIDITY AND CAPITAL RESOURCES**

On June 30, 2025, and December 31, 2024, we had a cash balance of $62,571 and $177,257, respectively. Our working capital deficit was $8,914,651 and $11,892,017 on June 30, 2025, and December 31, 2024, respectively. We reported a net decrease in cash for the six months ended June 30, 2025 of $114,686 primarily as a result of cash used in operations of $389,686, which were partially offset by net cash proceeds received from notes payable of $275,000.

As of August 12, 2025, the Company had $56,185 in cash, consisting of: (i) $36,561 remaining from the issuance of unsecured promissory notes and (ii) $19,624 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 a net income (loss) of $448,672 and $(2,638,494) for the six months ended June 30, 2025 and 2024, respectively. The net cash used in operations was $389,686 and $69,843 for the six months ended June 30, 2025, and 2024, respectively. Additionally, we had an accumulated deficit and working capital deficit of $146,237,050 and $8,914,651 on June 30, 2025, respectively. These factors, in addition to the cessation of all operations, raises substantial doubt about our ability to continue as a going concern for a period of twelve months from the date of this Quarterly Report.

From August 12, 2024 through May 1, 2025, the Company issued various promissory notes in the aggregate principal amount of $500,000 (the "Former Notes") to certain then-holders of shares of Series E Preferred and Series G Preferred (the "Former Lenders").

Between May 2025 and July 2025, we entered into settlement agreements (the "Series J Settlement Agreements") with holders of our outstanding liabilities (the "2025 Creditors"), including the Former Lenders, pursuant to which, the 2025 Creditors settled an aggregate of $3,096,914 in outstanding liabilities and accrued interest in exchange for an aggregate of 30,969 shares of Series J Preferred effective as of June 1, 2025. As a result of the Series J Settlement Agreements, the Former Notes are no longer outstanding.

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 filing 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 six months ended June 30, 2025, amounted to $389,686. During the six months ended June 30, 2025, net cash used in operating activities was primarily attributable to net income of $448,672, adjusted for non-cash gains on debt extinguishment of $1,481,742, and changes in operating assets and liabilities as a result of increases in accounts payable and accrued expenses of $291,382, accrued compensation and related benefits of $245,680, and accrued expenses – related parties of $106,562.

Net cash flows used in operating activities for the six months ended June 30, 2024 amounted to $69,843. During the six months ended June 30, 2024, net cash used in operating activities was primarily attributable to a net loss of $2,638,494, 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, non-cash gain from the deconsolidation of Cougar Express of $158,347, stock-based compensation of $55,974 and bad debt recovery of $3,937 and changes in operating assets and liabilities such as a decrease in accounts receivable of $636,293, a decrease in prepaid expenses and other current assets of $232,908, a decrease in security deposit of $6,155, an increase in accounts payable and accrued expenses of $510,741, an increase in accrued expenses – related parties of $99,567, and an increase in accrued compensation and related benefits of $594,651.

*Financing activities*

For the six months ended June 30, 2025, net cash provided by financing activities totaled $275,000. During the six months ended June 30, 2025, we received cash proceeds of $275,000 from notes payable from unrelated third parties.

For the six months ended June 30, 2024, net cash provided by financing activities totaled $45,804. During the six months ended June 30, 2024, we received cash proceeds of $391,838 from notes payable from related parties, offset by the repayment of notes payable of $346,034.

*Investing activities*

Net cash used in investing activities for the six months ended June 30, 2025 and 2024, amounted to $0.

**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 Quarterly Report.

**ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

We are not required to provide the information required by this Item as we are a "smaller reporting company," as defined in Rule 12b-2 of the 34 Act.

**ITEM 4. 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 Quarterly Report for the purpose of ensuring that the information required to be disclosed by us in this Quarterly 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 SEC's rules and instructions for Form 10-Q.

The ineffectiveness of our internal control over financial reporting was due to the following material weaknesses which we identified in our internal control over financial reporting:

● We lack segregation of duties within accounting functions duties as a result of our limited financial resources to support hiring of personnel; and.

● We have not implemented adequate system and manual controls.

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.

Until such time as we expand our staff to include additional accounting personnel, it is likely we will continue to report material weaknesses in our internal control over financial reporting.

**Changes in Internal Control Over Financial Reporting**

There have been no changes in our internal control over financial reporting that occurred during the period covered by this Quarterly Report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

**PART II - OTHER INFORMATION**

**ITEM 1. 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.

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.

***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 Company's 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 Company's 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 Company's 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 plaintiff's 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 Plaintiff's 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 Shypdirect's 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 TLSS's 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 Plaintiff's 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 Plaintiff's 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 Company's 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 Company's 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 Plaintiff's 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 Perez's 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 Perez's 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 Company's 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 Emerson's products while under Severance Trucking's 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 attorney's fees. As of December 31, 2024 and December 31, 2023, 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 Company's 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 have been accrued as of June 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, and the action will be dismissed with prejudice. The A&S Settlement Agreement was on substantially the same form as the Liability Settlement Agreements.

***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 Trucking's 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/iunjust 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 June 30, 2025, the amount of $57,199 is recorded as a liability of Severance Trucking and included in liabilities of discontinued operations.

Other than discussed above, as of the date of this Quarterly 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 1A. RISK FACTORS**

Risk factors that affect our business and financial results are discussed in Part I, Item 1A "Risk Factors," in our 2024 Annual Report. In addition to the risk factors below, you should carefully consider the risks described in our 2024 Annual Report, which could materially affect our business, financial condition or future results. The risks described below and in our 2024 Annual Report are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, and/or operating results. If any of the risks actually occur, our business, financial condition, and/or results of operations could be negatively affected.

***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. Furthermore, the Series J Preferred accrues 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 June 30, 2025, an aggregate of 8,568,800,000 shares of Common Stock were issuable upon conversion of the then-outstanding Series J Preferred, not including all dividends accrued as of such date.

**ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS**

None.

**ITEM 3. DEFAULTS UPON SENIOR SECURITIES**

None.

**ITEM 4. MINE SAFETY DISCLOSURES**

Not applicable.

**ITEM 5. OTHER INFORMATION**

**Rule 10b5-1 Trading Arrangement**

During the three months ended June 30, 2025, no director or officer of the Company adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408(a) of Regulation S-K.

**ITEM 6. EXHIBITS**

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| | |
|:---|:---|
| **Exhibit No.** | **Description of Exhibits** |
| 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).](https://www.sec.gov/Archives/edgar/data/1463208/000149315215002705/ex3-1.htm) |
| 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).](https://www.sec.gov/Archives/edgar/data/1463208/000149315213002772/ex3-1.htm) |
| 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)](https://www.sec.gov/Archives/edgar/data/1463208/000149315217008180/ex3-5.htm) |
| 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).](https://www.sec.gov/Archives/edgar/data/1463208/000149315218010346/ex3-1.htm) |
| 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).](https://www.sec.gov/Archives/edgar/data/1463208/000149315221019761/ex3-5.htm) |

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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 December 1, 2023).](https://www.sec.gov/Archives/edgar/data/1463208/000149315224000208/ex3-2.htm)

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).](https://www.sec.gov/Archives/edgar/data/1463208/000149315224048188/ex3-1.htm)

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).](https://www.sec.gov/Archives/edgar/data/1463208/000149315222036654/ex3-1.htm)

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).](https://www.sec.gov/Archives/edgar/data/1463208/000149315220010171/ex4-9.htm)

4.2 [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.](https://www.sec.gov/Archives/edgar/data/1463208/000149315221003119/ex10-28.htm)

4.3 [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).](https://www.sec.gov/Archives/edgar/data/1463208/000149315222002570/ex3-14.htm)

4.4 [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).](https://www.sec.gov/Archives/edgar/data/1463208/000149315222000044/ex10-2.htm)

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| | |
|:---|:---|
| 4.5 | [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).](https://www.sec.gov/Archives/edgar/data/1463208/000149315222002570/ex4-1.htm) |
| 4.6 | [Certificate of Designation of 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).](https://www.sec.gov/Archives/edgar/data/1463208/000149315222026317/ex10-3.htm) |
| 4.7 | [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).](https://www.sec.gov/Archives/edgar/data/1463208/000149315223024887/ex4-1.htm) |
| 4.8 | [Description of Securities (incorporated by reference to Exhibit 4.11 to our Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 15, 2025).](https://www.sec.gov/Archives/edgar/data/1463208/000164117225004796/ex4-11.htm) |
| 4.9 | [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).](https://www.sec.gov/Archives/edgar/data/1463208/000164117225008979/ex3-1.htm) |
| 10.1+ | [Termination Notice, dated as of May 5, 2025 (incorporated by reference to Exhibit 10.4 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on May 7, 2025).](https://www.sec.gov/Archives/edgar/data/1463208/000164117225008979/ex10-4.htm) |
| 10.2 | [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).](https://www.sec.gov/Archives/edgar/data/1463208/000164117225008979/ex10-2.htm) |

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| | |
|:---|:---|
| 10.3 | [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).](https://www.sec.gov/Archives/edgar/data/1463208/000164117225008979/ex10-1.htm) |
| 10.4 | [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).](https://www.sec.gov/Archives/edgar/data/1463208/000164117225008979/ex10-3.htm) |
| 10.5\* | [Form of Settlement Agreement (Outstanding Liabilities).](ex10-5.htm) |
| 10.6 | [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).](https://www.sec.gov/Archives/edgar/data/1463208/000164117225016288/ex10-3.htm) |
| 10.7 | [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).](https://www.sec.gov/Archives/edgar/data/1463208/000164117225016288/ex10-4.htm) |
| 10.8\* | [Form of Settlement Agreement (Outstanding Liabilities and Warrants).](ex10-8.htm) |
| 10.9\* | [Form of Exchange Agreement.](ex10-9.htm) |
| 10.10\* | [Form of Exchange Agreement (Warrants Only).](ex10-10.htm) |
| 10.11 | [Litigation Settlement Agreement (incorporated by reference to Exhibit 10.3 to our Current Report on Form 8-K filed with the Securities and Exchange Commission on July 23, 2025)](https://www.sec.gov/Archives/edgar/data/1463208/000149315225011354/ex10-3.htm) |
| 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).](https://www.sec.gov/Archives/edgar/data/1463208/000149315224048930/ex21.htm) |
| 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.](ex31-1.htm) |
| 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.](ex32-1.htm) |
| 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) |

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\* 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 Quarterly Report are not deemed filed with the Securities and Exchange Commission and 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.

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

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| | | |
|:---|:---|:---|
|  | **TRANSPORTATION AND LOGISTICS SYSTEMS, INC.** | **TRANSPORTATION AND LOGISTICS SYSTEMS, INC.** |
| Dated: August 14, 2025 | By: | */s/ Sebastian Giordano* |
|  | Name: | Sebastian Giordano |
|  | Title: | Chief Executive Officer and Chief Financial Officer<br> (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer) |

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## Exhibit 10.5

**Exhibit 10.5**

**FORM OF SETTLEMENT AGREEMENT AND MUTUAL RELEASE**

This Settlement Agreement and Mutual Release (this "Settlement Agreement"), dated as of the [●] day of [●], 2025, is made by and between [●] (the "Creditor") and Transportation & Logistics Systems, Inc., a Nevada corporation ("TLSS" or the "Company"). The Company and the Creditor may also be referred to each, as a "Party" and collectively, as the "Parties".

**WHEREAS**, the Parties entered into a [●] Agreement dated [●] (the "Agreement")<br> under which [●] (the "Payables");

**WHEREAS**, as of the date of this Settlement Agreement, the Creditor confirms that the total amount outstanding and owed by the Company is $[●];

**WHEREAS**, in order to avoid further expense, delay and uncertainty the Creditor and the Company desire to settle and compromise all claims that have been asserted or could have asserted against one another in connection with the Agreement, without the admission or acknowledgment of fact, liability or wrongdoing, and each wishes to release the others from liability between and among them as of the date of this Settlement Agreement, subject only to the terms hereto;

**NOW THEREFORE**, in consideration of the promises, mutual covenants and obligations of this Settlement Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereby agree as follows:

1. <u>Settlement of the Creditor's Claims</u>.

Subject to the satisfaction (or waiver) of the conditions set forth in Section 4(a) and 4(b) below, the Company and the Creditor hereby agree that, effective as of the Closing Date (as defined below), in full and complete satisfaction of all claims that the Creditor made or could have made against the Company arising in connection with the Agreement, including the Payables:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. The Company shall issue and deliver to the Creditor, [●] shares of Series J Senior Convertible Preferred Stock, par value $0.001 per share (the "Series J Preferred Stock"), as set forth on the Creditor's signature page hereto, such shares of Series J Preferred Stock having the designation, powers, privileges, preferences and relative participating, optional or other rights, if any, and the qualifications, limitations or restrictions as set forth in the Certificate of Designation of Preferences, Rights and Limitation of Series J Preferred Stock of the Company filed with the Secretary of State of the State of Nevada and attached hereto as <u>Exhibit A</u> (the "Certificate of Designations");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. the Creditor shall execute and deliver to the Company a Release substantially in the form attached hereto as <u>Exhibit B</u>; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. the Company shall execute and deliver to the Creditor a Release substantially in the form attached hereto as <u>Exhibit C</u>.

2. <u>Closing</u>.

The date and time of the closing (the "Closing") of the transactions specified in Section 1 above (the "Closing Date") shall be 10:00 a.m., New York City time, on June 1, 2025 (or such other date and time as is mutually agreed to by the Company and the Creditor excluding any Saturday, any Sunday or any day which is a federal legal holiday in the United States (each day, a "Business Day" and multiple, "Business Days")), subject to the notification and satisfaction (or waiver) of the conditions to Closing set forth in Sections 4(a) and 4(b) below. The Closing shall be undertaken remotely by electronic exchange of documentation.

3. <u>No Liability</u>.

The Parties agree that this Settlement Agreement constitutes the compromise of disputed claims with respect to the Agreement and that this Settlement Agreement is not and should not be considered or construed as an admission of any fact, liability or wrongdoing on the part of any Party.

4. <u>Closing Conditions</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Conditions to Company's obligations hereunder</u>. The obligations of the Company to the Creditor hereunder are subject to the satisfaction
 of each of the following conditions, provided that these conditions are for the Company's sole benefit and may be waived by
 the Company at any time in its sole discretion by providing the Creditor with prior written notice thereof:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The
 Creditor shall have duly executed this Settlement Agreement and delivered the same to the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The
 representations and warranties of the Creditor, including those in Section 11 hereto, shall be true and correct as of the date hereof
 and as of the Closing Date as though made at that time (except for representations and warranties that speak as of a specific date
 which shall be true and correct as of such specified date), and the Creditor shall have performed, satisfied and complied with the
 covenants, agreements and conditions required by this Settlement Agreement to be performed, satisfied or complied with by the Creditor
 at or prior to the Closing Date; and

(iii) At
 least fifty percent (50%) of the shares of each of (a) the Series E Convertible Preferred Stock issued by the Company between October,
 2020 and January, 2021 (the "Series E Preferred Stock") and (b) the Series G Convertible Preferred Stock issued by the
 Company on December 31, 2021 (the "Series G Preferred Stock") shall have been exchanged for Series J Preferred Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Conditions to Creditor's obligations hereunder</u>. The obligations of the Creditor hereunder are subject to the satisfaction of each
 of the following conditions, provided that these conditions are for the Creditor's sole benefit and may be waived by the Creditor
 in respect of itself at any time in its sole discretion by providing the Company with prior written notice thereof:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The
 Company shall have duly executed this Settlement Agreement and delivered the same to the
 Creditor;

(ii) The
 Company shall have used commercially reasonable efforts to obtain the listing of all of the shares of common stock, $0.001 par value
 (the "Common Stock") issuable upon conversion of the shares of Series J Preferred Stock on each market or exchange on
 which the Common Stock is then listed for trading or quoted (the "Trading Market"); and

(iii) The
 representations and warranties of the Company under this Settlement Agreement shall be true and correct in all respects as of the
 date hereof and as of the Closing Date as though made at that time (except for representations and warranties that speak as of a
 specific date which shall be true and correct as of such specified date) and the Company shall have performed, satisfied and complied
 in all respects with the covenants, agreements and conditions required by this Settlement Agreement to be performed, satisfied or
 complied with by the Company at or prior to the Closing Date; and

(iv) At
 least fifty percent (50%) of the shares of each of (a) the Series E Preferred Stock and (b) the Series G Preferred Stock shall have
 been exchanged for Series J Preferred Stock.

<br> 5. <u>Successors and Assigns</u>.

This Settlement Agreement shall be binding upon, and inure to the benefit of, the Party's successors and assigns, including any entity in which any Party merges, consolidates or reorganizes.

6. <u>Governing Law</u>.

The interpretation and enforcement of this Settlement Agreement shall be governed by the laws of the State of New York without regard to its conflict of law rules.

7. <u>Forum Selection</u>.

The Parties consent to the exclusive jurisdiction of the State and Federal Courts located in the State and City of New York, for any dispute arising out of this Settlement Agreement.

8. <u>Suits for Enforcement and Remedies</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. In any action to enforce the terms of this Settlement Agreement, no right or remedy herein is intended to be exclusive of any other right or remedy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. In any such action, the prevailing party shall be entitled to seek from the court its court costs and expenses and reasonable attorneys' fees from the opposing party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. No forbearance, indulgence, delay or failure to exercise any right or remedy herein shall operate as a waiver, nor as acquiescence in any default, nor shall any single or partial exercise of such right or remedy or the exercise of any other right or remedy operate as a waiver.

9. <u>Notices</u>.

Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Settlement Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by electronic mail; or (iii) one day after deposit with an overnight courier service, in each case properly addressed to the party to receive the same. The addresses, facsimile numbers and e-mail addresses for such communications shall be as follows, unless the Parties hereto are notified in writing of a different address:

If to the Creditor, in accordance with the contact information set forth on the Creditor's signature page hereto.

---

| | |
|:---|:---|
| If to the Company: | Sebastian Giordano, CEO<br>|
|  | Transportation and Logistics Systems, Inc. |
|  | 5500 Military Trail, Ste 22-357 |
|  | Email: |

---

---

| | |
|:---|:---|
| With a copy to: | David E. Danovitch, Esq. |
|  | Sullivan & Worcester LLP |
|  | 1251 Avenue of the Americas |
|  | New York, New York 10020 |
|  | Email: |

---

10. <u>Entire Agreement and Amendment</u>.

This Settlement Agreement together with the schedules and exhibits annexed hereto constitutes the entire agreement between the Parties concerning the subject matter hereof. All negotiations between and among the Parties with respect to the Payables are merged into this Settlement Agreement and there are no representations, warranties, covenants, understandings, agreements, oral or otherwise, in relation thereto between the Parties other than those incorporated herein and to be delivered hereunder. No provision of this Settlement Agreement may be amended other than by an instrument in writing signed by the Company and the Creditor. No provision hereof may be waived other than by an instrument in writing signed by the party against whom enforcement is sought. The Company hereby acknowledges and agrees that (i) all of the Company's securities issued to the Creditor continue to remain in full force and effect, (ii) the execution, delivery and effectiveness of this Settlement Agreement shall not operate as an amendment of any right, power or remedy of the Creditor, and (iii) all such other securities are hereby ratified and confirmed in all respects.

11. <u>Representations, Warranties and Covenants</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Creditor Representations, Warranties and Covenants</u>. The Creditor hereby represents and warrants to the Company that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Authorization; Enforcement; Validity</u>. The Creditor has the requisite power and authority to execute and deliver this Settlement Agreement and perform its obligations hereunder; and this Settlement Agreement and the transactions contemplated hereby have been duly authorized by the Creditor and the Creditor's general partner, advisor or Board of Directors, as the case may be. This Settlement Agreement has been duly and validly authorized, executed and delivered on behalf of the Creditor and constitutes the legal, valid and binding obligations of the Creditor enforceable against the Creditor in accordance with its terms, except as such enforceability may be limited by general principles of equity or to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors' rights and remedies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>No Conflicts</u>. The execution, delivery and performance by the Creditor of this Settlement Agreement and the consummation by the Creditor of the transactions contemplated hereby will not (i) result in a violation of the organizational documents of the Creditor or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Creditor is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws) applicable to the Creditor, except in the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of the Creditor to perform its obligations hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) <u>Settlement and Release</u>. The Creditor: (a) has read the terms of this Settlement Agreement and the Releases; (b) has been represented by counsel in connection with the review and execution of this Settlement Agreement; (c) fully understands the terms of this Settlement Agreement; (d) has been given sufficient time to consider whether to sign this Settlement Agreement; and (e) represents and warrants that no promises, statements or inducements have been made by the Company other than those expressly stated herein. The Creditor affirmatively represents that this Settlement Agreement is fair and executed freely.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) <u>Claims</u>. The Creditor has not heretofore assigned, transferred, pledged or hypothecated, or agreed or purported to assign, transfer, pledge or hypothecate, to any entity or individual, any of the claims that were made or that could have been made based on the subject matter of this settlement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) <u>Compliance with Federal and State Securities Laws</u>. For the purpose of compliance with federal and state securities laws, the Creditor hereby makes the representations and warranties to the Company which are set forth on Exhibit E of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) <u>Certificate of Designation for Series J Preferred Stock</u>. The Creditor has been provided with the Certificate of Designation and Summary of Terms of the Series J Preferred Stock (the "Term Sheet") attached hereto as <u>Exhibit D</u> in relation to the Series J Preferred Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Company Representations, Warranties and Covenants</u>. The Company hereby represents, warrants, agrees and covenants, as applicable, to and with the Creditor that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Organization and Qualification</u>. Each of the Company and each of its subsidiaries are entities duly organized and validly existing and in good standing under the laws of the jurisdiction in which they are formed, and have the requisite power and authorization to own their properties and to carry on their business as now being conducted and as presently proposed to be conducted. Each of the Company and each of its subsidiaries is duly qualified as a foreign entity to do business and is in good standing in every jurisdiction in which its ownership of property or the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing would not reasonably be expected to have a Material Adverse Effect. As used in this Settlement Agreement, "Material Adverse Effect" means any material adverse effect on the business, properties, assets, liabilities, operations, results of operations, condition (financial or otherwise) or prospects of the Company and its subsidiaries, individually or taken as a whole, or on the transactions contemplated hereby or by the agreements and instruments to be entered into in connection herewith, or on the authority or ability of the Company to perform any of its obligations hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>Authorization; Enforcement; Validity</u>. The Company has the requisite corporate power and authority to enter into and perform its obligations under this Settlement Agreement and to issue the Series J Preferred Stock in accordance with the terms hereof. The execution and delivery of this Settlement Agreement by the Company and the consummation by the Company of the transactions contemplated hereby, including, without limitation, the issuance of the Series J Preferred Stock, have been duly authorized by the Company's board of directors (the "Board of Directors") and no further filing, consent or authorization is required by the Company, its Board of Directors or its stockholders. This Settlement Agreement has been duly executed and delivered by the Company, and constitutes the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors' rights and remedies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) <u>Issuance of Securities</u>. The issuance of the shares of Series J Preferred Stock has been duly authorized and, upon issuance in accordance with the terms hereof, the shares of Series J Preferred Stock will be validly issued, fully paid and non-assessable and free from all preemptive or similar rights, taxes, liens and charges and other encumbrances with respect to the issue thereof and upon exercise in accordance with the Series J Preferred Stock, the shares of Common Stock issuable upon conversion of the Series J Preferred Stock have been duly authorized and, upon issuance in accordance with the terms of the Series J Preferred Stock, will be fully paid and nonassessable with the Creditor thereof being entitled to all rights accorded to a holder of Common Stock. The offer and issuance by the Company of the Series J Preferred Stock in conformity with this Settlement Agreement constitute transactions exempt from registration under the Securities Act of 1933, as amended (the "1933 Act").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) <u>No Conflicts</u>. The execution, delivery and performance of this Settlement Agreement by the Company and the consummation by the Company of the transactions contemplated hereby (including, without limitation, the issuance of the Series J Preferred Stock) will not (i) result in a violation of the Company's Articles of Incorporation or Bylaws or other organizational documents of the Company or any of its subsidiaries, any capital stock of the Company or any of its subsidiaries or the articles of association or bylaws of the Company or any of its subsidiaries or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) in any respect under, or give to others any rights of termination, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or any of its subsidiaries is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including foreign, federal and state securities laws and regulations and the rules and regulations of any Trading Market and including all applicable foreign, federal laws, rules and regulations) applicable to the Company or any of its subsidiaries or by which any property or asset of the Company or any of its subsidiaries is bound or affected.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) <u>Consents</u>. The Company is not required to obtain any consent from, authorization or order of, or make any filing or registration with any court, governmental agency or any regulatory or self-regulatory agency or any other Person in order for it to execute, deliver or perform any of its obligations under or contemplated by this Settlement Agreement in accordance with the terms hereof. All consents, authorizations, orders, filings and registrations which the Company is required to obtain pursuant to the preceding sentence have been obtained or effected on or prior to the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) <u>Listing</u>. The Company shall use commercially reasonable efforts to secure the listing or quotation of all of (i) the shares of Common Stock issuable upon conversion of the Series J Preferred Stock and (ii) any capital stock of the Company issued or issuable with respect to the shares of Common Stock issuable upon conversion of the Series J Preferred Stock, as applicable, as a result of any stock split, stock dividend, recapitalization, exchange or similar event or otherwise (the "Listed Securities") upon each national securities exchange and automated quotation system, if any, upon which the Common Stock is then listed (subject to official notice of issuance) and shall use commercially reasonable efforts to maintain such listing or quotation of all Listed Securities. The Company may be unable to meet the requirements to remain listed or quoted on any Trading Market as the Company is insolvent and therefore currently unable to meet its existing financial obligations. As a result, the Company may not be able to pay all fees and expenses required to satisfy the listing requirements of a Trading Market.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) <u>No Integration Actions</u>. None of the Company, any of its affiliates or any person acting on behalf of the Company or such affiliate will sell, offer for sale or solicit offers to buy in respect of any security (as defined in the 1933 Act) that would be integrated with the issuance of the Series J Preferred Stock or the shares of Common Stock issuable upon conversion of the Series J Preferred Stock in a manner that would require the registration under the 1933 Act of the issuance to the Creditor or require shareholder approval under the rules and regulations of the Trading Market, and the Company will take all action that is appropriate or necessary to assure that its offerings of other securities will not be integrated for purposes of the 1933 Act or the rules and regulations of the Trading Market with the issuance of Series J Preferred Stock contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) <u>Reservation of Shares</u>. From the date hereof until the Closing, the Company shall take all action necessary to at all times have authorized, and reserved for the purpose of issuance, no less than the maximum number of shares of Common Stock issuable upon conversion of the Series J Preferred Stock issuable under this Settlement Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) <u>Settlement and Release</u> The Company: (a) has read the terms of this Settlement Agreement and the Releases; (b) has been represented by counsel in connection with the review and execution of this Settlement Agreement; (c) fully understands the terms of this Settlement Agreement; (d) has been given sufficient time to consider whether to sign this Settlement Agreement; and (e) represents and warrants that no promises, statements or inducements have been made by the Creditor other than those expressly stated herein. The Company affirmatively represent that this Settlement Agreement is fair and executed freely.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii) <u>Claims</u>. The Company has not heretofore assigned, transferred, pledged or hypothecated, or agreed or purported to assign, transfer, pledge or hypothecate, to any entity or individual, any of the claims that were made or that could have been made based on the subject matter of this settlement.

12. <u>Reporting Status</u>.

The Company is currently up to date with its periodic reports required to be filed with the Securities and Exchange Commission (the "Commission") pursuant to the Securities Exchange Act of 1934, as amended (the "1934 Act"); however the Company has previously been untimely in its reporting obligations. Further, the Company may be unable to comply with its ongoing reporting requirements under the 1934 Act without additional funding as the Company has ceased all of its logistics and transportation operations and is currently unable to meet its existing financial obligations.

13. <u>Severability</u>.

The invalidity or unenforceability of any provision or covenant of this Settlement Agreement shall not affect the validity or enforceability of any other provision or covenant hereof, and any such invalid provision or covenant shall be deemed to be severable.

14. <u>No Construction Against Drafter</u>.

This Settlement Agreement shall be construed without regard to the Party or Parties responsible for the preparation of same and shall be deemed as prepared jointly by the Parties. Any ambiguity or uncertainty existing herein shall not be interpreted or construed against any Party.

15. <u>Further Assurances</u>.

The Parties agree to execute and deliver such further instruments, and to take such further actions, as may be reasonably necessary or proper to effectuate and carry the purposes of this Settlement Agreement.

16. <u>Taxes</u>

Each of the Parties shall be responsible for payment of its own taxes in connection with consideration paid or received in connection with this Settlement Agreement.

17. <u>Headings</u>.

The section headings contained in this Settlement Agreement are for the convenience of reference only and shall not affect the construction of any provision of this Settlement Agreement.

18. <u>Counterparts</u>.

This Settlement Agreement may be executed in two or more counterparts, via facsimile and/or PDF copies, each of which shall be deemed to be an original, and all the counterparts taken together constitute one and the same instrument.

IN WITNESS WHEREOF, the Parties have duly executed this Settlement Agreement as of the date first above written.

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| | |
|:---|:---|
| **TRANSPORTATION AND LOGISTICS SYSTEMS, INC.** | **TRANSPORTATION AND LOGISTICS SYSTEMS, INC.** |
| By: |  |
| Name: | Sebastian Giordano |
| Title: | Chief Executive Officer |

---

---

| |
|:---|
| **[CREDITOR]** |
| By: |
| Name: |
| Title |
| Address: |
| Email: |
| Number of shares of Series J Preferred Stock: |

---

**EXHIBIT A**

**AS FILED CERTIFICATE OF DESIGNATION OF PREFERENCES, RIGHTS AND LIMITATIONS OF SERIES J SENIOR CONVERTIBLE PREFERRED STOCK**

Please see [Exhibit 3.1](https://www.sec.gov/Archives/edgar/data/1463208/000164117225008979/ex3-1.htm) to our Current Report on Form 8-K filed on May 7, 2025.

**EXHIBIT B**

**(CREDITOR'S RELEASE TO TRANSPORTATION AND LOGISTICS SYSTEMS, INC.)**

<u>GENERAL RELEASE</u>

TO ALL TO WHOM THESE PRESENTS SHALL COME OR MAY CONCERN, KNOW THAT:

[__________] on behalf of itself and its past, present and future heirs, executors, administrators, successors and assigns, shareholders, partners, employees, agents, members, controlling persons, representatives, affiliates, subsidiaries or other entities controlled by them (hereinafter, collectively referred to as "RELEASORS"), in consideration of the securities provided for in the annexed Settlement Agreement and Mutual Release dated as of [●], 2025, executed by the RELEASEE and the RELEASOR (the "Settlement Agreement"), and other good and valuable consideration received from Transportation and Logistics Systems, Inc. (hereinafter, referred to as "RELEASEE"), receipt whereof is hereby acknowledged, release and discharge the RELEASEE, and the RELEASEE'S past, present and future heirs, executors, administrators, successors, assigns, shareholders, partners, employees, agents, members, controlling persons, representatives, affiliates, subsidiaries or other entities controlled by them, from all actions, causes of action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, extents, executions, claims and demands solely with respect to the Agreement, including the Payables (each as defined in the Settlement Agreement), in law, admiralty, or equity, which against the RELEASEE the RELEASOR ever had, now have or hereafter can, shall or may have, for, upon, or by reason of any matter, cause or thing with respect to the Agreement and the Payables from the beginning of the world to, and including, the date of this RELEASE, except for the obligations set forth in the Settlement Agreement.

The words "RELEASOR" and "RELEASEE" include all releasors and all releasees under this RELEASE.

This RELEASE may not be changed orally but only by a writing signed by all the parties.

**IN WITNESS WHEREOF**, the RELEASOR has caused this RELEASE to be executed on the [●] day of [●], 2025.

[______]

By:   <br> Name: <br> Title:

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| |
|:---|
| **Witness** |
| Name: |

---

**EXHIBIT C**

**(TRANSPORTATION AND LOGISTICS SYSTEMS, INC.'S RELEASE TO CREDITORS)**

<u>GENERAL RELEASE</u>

TO ALL TO WHOM THESE PRESENTS SHALL COME OR MAY CONCERN, KNOW THAT:

Transportation and Logistics Systems, Inc., on behalf of itself and its past, present and future heirs, executors, administrators, successors and assigns, shareholders, partners, employees, agents, members, controlling persons, representatives, affiliates, subsidiaries or other entities controlled by them (hereinafter, collectively referred to as "RELEASORS"), for good and valuable consideration received from [●] (hereinafter, referred to as "RELEASEE"), receipt whereof is hereby acknowledged, release and discharge the RELEASEE, RELEASES' past, present and future heirs, executors, administrators, successors, assigns, shareholders, partners, employees, agents, members, controlling persons, representatives, affiliates, subsidiaries or other entities controlled by them, from all actions, causes of action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, extents, executions, claims and demands solely with respect to the Agreement, including the Payables (each as defined in the Settlement Agreement (as defined below)), in law, admiralty, or equity, which against the RELEASEE the RELEASORS ever had, now have or hereafter can, shall or may have, for, upon, or by reason of any matter, cause or thing with respect to the Agreement and the Payables from the beginning of the world to, and including, the date of this RELEASE, except for the obligations set forth in the Settlement Agreement and Mutual Release dated as of [●], 2025, executed by the RELEASEE and the RELEASOR (the "Settlement Agreement").

The words "RELEASORS" and "RELEASEES" include all releasors and all releasees under this RELEASE.

This RELEASE may not be changed orally but only by a writing signed by all the parties.

**IN WITNESS WHEREOF**, the RELEASOR has caused this RELEASE to be executed on the [●] day of [●], 2025.

---

| | |
|:---|:---|
| **TRANSPORTATION AND LOGISTICS SYSTEMS, INC.** | **TRANSPORTATION AND LOGISTICS SYSTEMS, INC.** |
| By: |  |
| Name: | Sebastian Giordano |
| Title: | Chief Executive Officer |

---

---

| |
|:---|
| **<br> Witness** |
| Name |

---

**EXHIBIT D**

**SUMMARY OF TERMS FOR SERIES J SENIOR CONVERTIBLE PREFERRED STOCK**

**(See Attached)**

**SUMMARY OF TERMS**

**FOR** 

**SERIES J SENIOR CONVERTIBLE PREFERRED STOCK** 

**OF TRANSPORTATION AND LOGISITICS SYSTEMS, INC.**

---

| | |
|:---|:---|
| ***Issuer:*** | Transportation and Logistics Systems, Inc. (the "***Company***"). |
| ***Authorized:*** | 1 million of shares of Series J Senior Convertible Preferred Stock (the "***Preferred Stock***"), convertible into shares of the Company's common stock (the "***Common Stock***"). |
| ***Stated Value:*** | $100 per share of Preferred Stock. |
| ***Redemption:*** | Upon the occurrence of any trigger event, each holder shall have the right to cause the Company to redeem all or part of their Preferred Stock at a price per share equal to 110% of the stated value. Trigger events include, but are not limited to, (i) the failure to maintain listing on an eligible trading market for five consecutive trading days, (ii) failure to reserve sufficient number of Common Stock in case of full conversion of the Preferred Stock, and (iii) insolvency or bankruptcy. |
| ***Conversion:*** | At any time from and after the original issue date, subject to (i) the Common Stock beneficial ownership limitation of 4.99%, and (ii) limitation on converting more than 10% of the trading volume of the Common Stock on any given day except for if the conversion price is greater than $0.40 per share of Common Stock. |
| ***Conversion Price:*** | The Preferred Stock can be converted to Common Stock at any time for the conversion price of $0.001 per share, subject to adjustment including anti-dilution for subsequent equity issuances. |
| ***Liquidation Preference:*** | The Preferred Stock shall have a liquidation preference equal to and shall be entitled to receive out of the assets of the Company an amount in cash equal to 120% of the aggregate stated value of all shares of Series J Preferred Stock held by each holder, respectively, in addition to all accrued and unpaid dividends, prior and in preference to the Common Stock or any other series of preferred stock. |
| ***Dividends:*** | The Preferred Stock dividend is cumulative and accruing at the rate of ten percent (10%) per annum, payable at the option of the Company in shares of Common Stock or in cash, and shall be computed on the basis of a 360-day year and twelve 30-day months. Dividend payments are paid every six months beginning June 30, 2025. |
| ***Voting:*** | The Preferred Stock shall have voting rights on an as converted basis. Further, as long as any shares of Preferred Stock are outstanding, the Company shall not, without the affirmative vote of holders of a majority of the then-outstanding shares of Preferred Stock, (i) alter or change adversely the powers, preferences or rights given to the Preferred Stock or alter or amend the Certificate of Designation for the Preferred Stock, (ii) amend the Company's Articles of Incorporation or other charter documents of the Company in a manner adverse to the holders of Preferred Stock, (iii) increase the number of authorized Series J Preferred Stock, or (iv) enter into any agreement with respect to (i) – (iii). |

---

**EXHIBIT E**

**COMPLIANCE WITH FEDERAL AND STATE SECURITIES LAWS**

<u>Additional Representations and Warranties of the Creditor</u>. The Creditor hereby makes the following additional representations and warranties to the Company as of the date hereof and the date of any issuance of Series J Preferred Stock or any additional issuance of shares of Common Stock upon conversion thereof ("Securities"):

&nbsp;&nbsp;&nbsp;&nbsp;1. Creditor
 is acquiring the Securities for investment for its own account and without the intention
 of participating, directly or indirectly, in a distribution of the Securities, and not with
 a view to resale or any distribution of the Securities, or any portion thereof, except pursuant
 to an exemption from registration under the 1933 Act or a registration statement under the
 1933 Act.

2. Creditor
 has knowledge and experience in financial and business matters and has consulted with its
 own professional representatives as it has considered appropriate to assist in evaluating
 the merits and risks of this investment. Creditor has had access to and an opportunity to
 question the officers of the Company, or persons acting on their behalf, with respect to
 material information about the Company, and, in connection with the evaluation of this investment,
 has, to the best of its knowledge, received all information and data with respect to the
 Company that Creditor has requested and which is necessary to enable Creditor to make an
 informed decision regarding the purchase of the Securities. Creditor is acquiring the Securities
 based solely upon its independent examination and judgment as to the prospects of the Company.
 Creditor is not relying on any representation in connection with the subscription contemplated
 hereby, except for those representations set forth herein.

3. Creditor
 represents and warrants that it has reviewed and the Company's filings with the Commission.
 Creditor has not in connection with making its investment decision with respect to the Securities,
 relied on any representation or warranty about the Company, except as set forth herein.

4. The
 Securities were not offered to Creditor by means of publicly disseminated advertisements
 or sales literature.

5. In
 consideration of the acceptance of any Series J Preferred Stock pursuant to this Settlement
 Agreement, Creditor agrees that the Securities will not be offered for sale, sold or transferred
 by Creditor other than pursuant to (i) an exemption available under the 1933 Act; or (ii)
 a transaction that is otherwise in compliance with the 1933 Act; or (iii) an effective registration
 under the federal securities law or other jurisdiction applicable to the transaction, an
 exemption available under such laws, or a transaction that is otherwise in compliance with
 such laws.

6. Creditor
 understands that no U.S. federal or state agency has passed upon the offering of the Securities
 or has made any finding or determination as to the fairness of any investment in the Securities.

7. Creditor
 understands that the Series J Preferred Stock do not confer any rights of Common Stock ownership
 in excess of what is set forth in the Certificate of Designations and merely represent the
 right to acquire shares of Common Stock at a certain price. Creditor understands that there
 is no assurance that the market price of the Common Stock will ever equal or exceed the conversion
 price of the Series J Preferred Stock and, consequently, that the Creditor realize any profit
 from the conversion of the Series J Preferred Stock.

**SCHEDULE I TO EXHIBIT 10.5 FORM OF SETTLEMENT AGREEMENT (OUTSTANDING LIABILITIES)**

---

| | | |
|:---|:---|:---|
| **Creditor** | **Amount of Outstanding Liabilities** | **Number of Shares of Series J Preferred to be Issued** |
| C/M Capital Master Fund, LP | $229095.89 | 2291 |
| Mercer Street Opportunity Fund | $186034.25 | 1860 |
| Calvary Fund I LP | $186856.17 | 1868 |
| John Mercadante | $1734807.54 | 17348 |
| Charles Benton | $3686.76 | 37 |
| Norman Newton | $1186.49 | 12 |
| Sebastian Giordano | $132463.01 | 1325 |
| Westmount Financial Limited Partnership | $72389.59 | 724 |
| Access Newswire, Inc. | $4725.00 | 47 |
| Porzio Bromberg & Newman, P.C. | 149284.45 | 1493 |
| Terri Jane Freedman, Assignee for the Benefit of Creditors of Prime EFS, LLC and Shypdirect LLC | $50000.00 | 500 |
| JDA, Inc. | $10010.00 | 100 |
| R/A Feingold Law & Consulting, P.A. | $142875.00 | 1429 |
| CFO onCall, Inc. | $177500.00 | 1775 |
| Rosenberg Rich Baker Berman, P.A. | $16000.00 | 160 |

---

## Exhibit 10.8

**Exhibit 10.8**

**FORM OF SETTLEMENT AGREEMENT AND MUTUAL RELEASE (OUTSTANDING LIABILITIES AND WARRANTS)**

This Settlement Agreement and Mutual Release (this "Settlement Agreement"), dated as of the _____ day of _____, 2025, is made by and between [Creditor] (the "Creditor") and Transportation & Logistics Systems, Inc., a Nevada corporation ("TLSS" or the "Company"). The Company and the Creditor may also be referred to each, as a "Party" and collectively, as the "Parties".

**WHEREAS**, the Creditor was previously a holder of shares of the Company's Series E Convertible Preferred Stock, par value $0.001 per share (the "Series E Preferred Stock") and/or Series G Convertible Preferred Stock, par value $0.001 per share (the "Series G Preferred and together with the Series E Preferred Stock, the "Preferred Stock"), which the Creditor converted into shares of the Company's common stock, par value $0.001 per share (the "Common Stock"), other than accrued and unpaid dividends through the date of such conversion;

**WHEREAS**, as of the date of this Settlement Agreement, the Creditor confirms that the total amount of accrued and unpaid dividends on such shares of Series E Preferred Stock through the conversion date due to the Creditor is $2,019.58(the "Accrued Dividends");

WHEREAS, as of the date of this Settlement Agreement, the Creditor also currently holds warrants to purchase up to 14,285,715 shares of Series E Preferred Stock (the "Warrants"); and

**WHEREAS**, in order to avoid further expense, delay and uncertainty the Creditor and the Company desire to settle and compromise all claims that have been asserted or could have asserted against one another in connection with the Warrants and the conversion of the Preferred Stock, without the admission or acknowledgment of fact, liability or wrongdoing, and each wishes to release the others from liability between and among them as of the date of this Settlement Agreement, subject only to the terms hereto;

**NOW THEREFORE**, in consideration of the promises, mutual covenants and obligations of this Settlement Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereby agree as follows:

1. <u>Settlement of the Creditor's Claims</u>.

Subject to the satisfaction (or waiver) of the conditions set forth in Section 4(a) and 4(b) below, the Company and the Creditor hereby agree that, effective as of the Closing Date (as defined below), in full and complete satisfaction of all claims that the Creditor made or could have made against the Company arising in connection with the Warrants and the conversion of the Preferred Stock, including the Accrued Dividends:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. The Company shall issue and deliver to the Creditor, 20 shares of the Company's Series J Senior Convertible Preferred Stock, par value $0.001 per share (the "Series J Preferred Stock"), as set forth on the Creditor's signature page hereto, such shares of Series J Preferred Stock having the designation, powers, privileges, preferences and relative participating, optional or other rights, if any, and the qualifications, limitations or restrictions as set forth in the Certificate of Designation of Preferences, Rights and Limitation of Series J Preferred Stock of the Company filed with the Secretary of State of the State of Nevada and attached hereto as <u>Exhibit A</u> (the "Certificate of Designations");

B. <u>Cancellation of Warrants</u>. Immediately upon issuance and delivery of the Series J Preferred Stock, the Creditor acknowledges and agrees that the Warrants held by the Creditor are hereby cancelled for no additional consideration effective as of the Closing Date. The Creditor shall deliver to the Company the Warrants, or otherwise provide evidence that such Warrants have been destroyed or otherwise disposed of and the Company's books and records shall be updated to reflect such cancellation.

C. the
Creditor shall execute and deliver to the Company a Release substantially in the form attached hereto as <u>Exhibit B</u>; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. the
Company shall execute and deliver to the Creditor a Release substantially in the form attached hereto as <u>Exhibit C</u>.

2. <u>Closing</u>.

The date and time of the closing (the "Closing") of the transactions specified in Section 1 above (the "Closing Date") shall be effective as of 10:00 a.m., New York City time, on June 1, 2025 (or such other date and time as is mutually agreed to by the Company and the Creditor excluding any Saturday, any Sunday or any day which is a federal legal holiday in the United States (each day, a "Business Day" and multiple, "Business Days")), subject to the notification and satisfaction (or waiver) of the conditions to Closing set forth in Sections 4(a) and 4(b) below. The Closing shall be undertaken remotely by electronic exchange of documentation.

3. <u>No Liability</u>.

The Parties agree that this Settlement Agreement constitutes the compromise of disputed claims with respect to the Warrants and the conversion of the Preferred Stock and that this Settlement Agreement is not and should not be considered or construed as an admission of any fact, liability or wrongdoing on the part of any Party.

4. <u>Closing Conditions</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Conditions to Company's obligations hereunder</u>. The obligations of the Company to the Creditor hereunder are subject to the satisfaction of each of the following conditions, provided that these conditions are for the Company's sole benefit and may be waived by the Company at any time in its sole discretion by providing the Creditor with prior written notice thereof:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Creditor shall have duly executed this Settlement Agreement and delivered the same to the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The representations and warranties of the Creditor, including those in Section 11 hereto, shall be true and correct as of the date hereof and as of the Closing Date as though made at that time (except for representations and warranties that speak as of a specific date which shall be true and correct as of such specified date), and the Creditor shall have performed, satisfied and complied with the covenants, agreements and conditions required by this Settlement Agreement to be performed, satisfied or complied with by the Creditor at or prior to the Closing Date; and

(iii) At least fifty percent (50%) of the shares of each of (a) the Series E Preferred Stock and (b) the Series G Preferred Stock shall have been exchanged for Series J Preferred Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Conditions to Creditor's obligations hereunder</u>. The obligations of the Creditor hereunder are subject to the satisfaction of each of the following conditions, provided that these conditions are for the Creditor's sole benefit and may be waived by the Creditor in respect of itself at any time in its sole discretion by providing the Company with prior written notice thereof:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Company shall have duly executed this Settlement Agreement and delivered the same to the Creditor;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The Company shall have used commercially reasonable efforts to obtain the listing of all of the shares of Common Stock issuable upon conversion of the shares of Series J Preferred Stock on each market or exchange on which the Common Stock is then listed for trading or quoted (the "Trading Market"); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The representations and warranties of the Company under this Settlement Agreement shall be true and correct in all respects as of the date hereof and as of the Closing Date as though made at that time (except for representations and warranties that speak as of a specific date which shall be true and correct as of such specified date) and the Company shall have performed, satisfied and complied in all respects with the covenants, agreements and conditions required by this Settlement Agreement to be performed, satisfied or complied with by the Company at or prior to the Closing Date; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) At least fifty percent (50%) of the shares of each of (a) the Series E Preferred Stock and (b) the Series G Preferred Stock shall have been exchanged for Series J Preferred Stock.

5. <u>Successors and Assigns</u>.

This Settlement Agreement shall be binding upon, and inure to the benefit of, the Party's successors and assigns, including any entity in which any Party merges, consolidates or reorganizes.

6. <u>Governing Law</u>.

The interpretation and enforcement of this Settlement Agreement shall be governed by the laws of the State of New York without regard to its conflict of law rules.

7. <u>Forum Selection</u>.

The Parties consent to the exclusive jurisdiction of the State and Federal Courts located in the State and City of New York, for any dispute arising out of this Settlement Agreement.

8. <u>Suits for Enforcement and Remedies</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. In any action to enforce the terms of this Settlement Agreement, no right or remedy herein is intended to be exclusive of any other right or remedy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. In any such action, the prevailing party shall be entitled to seek from the court its court costs and expenses and reasonable attorneys' fees from the opposing party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. No forbearance, indulgence, delay or failure to exercise any right or remedy herein shall operate as a waiver, nor as acquiescence in any default, nor shall any single or partial exercise of such right or remedy or the exercise of any other right or remedy operate as a waiver.

9. <u>Notices</u>.

Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Settlement Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by electronic mail; or (iii) one day after deposit with an overnight courier service, in each case properly addressed to the party to receive the same. The addresses, facsimile numbers and e-mail addresses for such communications shall be as follows, unless the Parties hereto are notified in writing of a different address:

If to the Creditor, in accordance with the contact information set forth on the Creditor's signature page hereto.

If to the Company: Sebastian Giordano, CEO Transportation and Logistics Systems, Inc. <br> 5500 Military Trail, Ste 22-357 <br> Email: sebastian.giordano@tlss-inc.com

---

| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With a copy to: | David E. Danovitch, Esq. |
|  | Sullivan & Worcester LLP |
|  | 1251 Avenue of the Americas |
|  | New York, New York 10020 |
|  | Email: <u>ddanovitch@sullivanlaw.com</u> |

---

10. <u>Entire Agreement and Amendment</u>.

This Settlement Agreement together with the schedules and exhibits annexed hereto constitutes the entire agreement between the Parties concerning the subject matter hereof. All negotiations between and among the Parties with respect to the Accrued Dividends are merged into this Settlement Agreement and there are no representations, warranties, covenants, understandings, agreements, oral or otherwise, in relation thereto between the Parties other than those incorporated herein and to be delivered hereunder. No provision of this Settlement Agreement may be amended other than by an instrument in writing signed by the Company and the Creditor. No provision hereof may be waived other than by an instrument in writing signed by the party against whom enforcement is sought. The Company hereby acknowledges and agrees that (i) all of the Company's securities issued to the Creditor continue to remain in full force and effect, (ii) the execution, delivery and effectiveness of this Settlement Agreement shall not operate as an amendment of any right, power or remedy of the Creditor, and (iii) all such other securities are hereby ratified and confirmed in all respects.

11. <u>Representations, Warranties and Covenants</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Creditor Representations, Warranties and Covenants</u>. The Creditor hereby represents and warrants to the Company that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Authorization; Enforcement; Validity</u>. The Creditor has the requisite power and authority to execute and deliver this Settlement Agreement and perform its obligations hereunder; and this Settlement Agreement and the transactions contemplated hereby have been duly authorized by the Creditor and the Creditor's general partner, advisor or Board of Directors, as the case may be. This Settlement Agreement has been duly and validly authorized, executed and delivered on behalf of the Creditor and constitutes the legal, valid and binding obligations of the Creditor enforceable against the Creditor in accordance with its terms, except as such enforceability may be limited by general principles of equity or to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors' rights and remedies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>No Conflicts</u>. The execution, delivery and performance by the Creditor of this Settlement Agreement and the consummation by the Creditor of the transactions contemplated hereby will not (i) result in a violation of the organizational documents of the Creditor or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Creditor is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws) applicable to the Creditor, except in the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of the Creditor to perform its obligations hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) <u>Settlement and Release</u>. The Creditor: (a) has read the terms of this Settlement Agreement and the Releases; (b) has been represented by counsel in connection with the review and execution of this Settlement Agreement; (c) fully understands the terms of this Settlement Agreement; (d) has been given sufficient time to consider whether to sign this Settlement Agreement; and (e) represents and warrants that no promises, statements or inducements have been made by the Company other than those expressly stated herein. The Creditor affirmatively represents that this Settlement Agreement is fair and executed freely.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) <u>Claims</u>. The Creditor has not heretofore assigned, transferred, pledged or hypothecated, or agreed or purported to assign, transfer, pledge or hypothecate, to any entity or individual, any of the claims that were made or that could have been made based on the subject matter of this settlement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) <u>Compliance with Federal and State Securities Laws</u>. For the purpose of compliance with federal and state securities laws, the Creditor hereby makes the representations and warranties to the Company which are set forth on Exhibit E of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) <u>Certificate of Designation for Series J Preferred Stock</u>. The Creditor has been provided with the Certificate of Designation and Summary of Terms of the Series J Preferred Stock (the "Term Sheet") attached hereto as <u>Exhibit D</u> in relation to the Series J Preferred Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Company Representations, Warranties and Covenants</u>. The Company hereby represents, warrants, agrees and covenants, as applicable, to and with the Creditor that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Organization and Qualification</u>. Each of the Company and each of its subsidiaries are entities duly organized and validly existing and in good standing under the laws of the jurisdiction in which they are formed, and have the requisite power and authorization to own their properties and to carry on their business as now being conducted and as presently proposed to be conducted. Each of the Company and each of its subsidiaries is duly qualified as a foreign entity to do business and is in good standing in every jurisdiction in which its ownership of property or the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing would not reasonably be expected to have a Material Adverse Effect. As used in this Settlement Agreement, "Material Adverse Effect" means any material adverse effect on the business, properties, assets, liabilities, operations, results of operations, condition (financial or otherwise) or prospects of the Company and its subsidiaries, individually or taken as a whole, or on the transactions contemplated hereby or by the agreements and instruments to be entered into in connection herewith, or on the authority or ability of the Company to perform any of its obligations hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>Authorization; Enforcement; Validity</u>. The Company has the requisite corporate power and authority to enter into and perform its obligations under this Settlement Agreement and to issue the Series J Preferred Stock in accordance with the terms hereof. The execution and delivery of this Settlement Agreement by the Company and the consummation by the Company of the transactions contemplated hereby, including, without limitation, the issuance of the Series J Preferred Stock, have been duly authorized by the Company's board of directors (the "Board of Directors") and no further filing, consent or authorization is required by the Company, its Board of Directors or its stockholders. This Settlement Agreement has been duly executed and delivered by the Company, and constitutes the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors' rights and remedies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) <u>Issuance of Securities</u>. The issuance of the shares of Series J Preferred Stock has been duly authorized and, upon issuance in accordance with the terms hereof, the shares of Series J Preferred Stock will be validly issued, fully paid and non-assessable and free from all preemptive or similar rights, taxes, liens and charges and other encumbrances with respect to the issue thereof and upon exercise in accordance with the Series J Preferred Stock, the shares of Common Stock issuable upon conversion of the Series J Preferred Stock have been duly authorized and, upon issuance in accordance with the terms of the Series J Preferred Stock, will be fully paid and nonassessable with the Creditor thereof being entitled to all rights accorded to a holder of Common Stock. The offer and issuance by the Company of the Series J Preferred Stock in conformity with this Settlement Agreement constitute transactions exempt from registration under the Securities Act of 1933, as amended (the "1933 Act").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) <u>No Conflicts</u>. The execution, delivery and performance of this Settlement Agreement by the Company and the consummation by the Company of the transactions contemplated hereby (including, without limitation, the issuance of the Series J Preferred Stock) will not (i) result in a violation of the Company's Articles of Incorporation or Bylaws or other organizational documents of the Company or any of its subsidiaries, any capital stock of the Company or any of its subsidiaries or the articles of association or bylaws of the Company or any of its subsidiaries or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) in any respect under, or give to others any rights of termination, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or any of its subsidiaries is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including foreign, federal and state securities laws and regulations and the rules and regulations of any Trading Market and including all applicable foreign, federal laws, rules and regulations) applicable to the Company or any of its subsidiaries or by which any property or asset of the Company or any of its subsidiaries is bound or affected.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) <u>Consents</u>. The Company is not required to obtain any consent from, authorization or order of, or make any filing or registration with any court, governmental agency or any regulatory or self-regulatory agency or any other Person in order for it to execute, deliver or perform any of its obligations under or contemplated by this Settlement Agreement in accordance with the terms hereof. All consents, authorizations, orders, filings and registrations which the Company is required to obtain pursuant to the preceding sentence have been obtained or effected on or prior to the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) <u>Listing</u>. The Company shall use commercially reasonable efforts to secure the listing or quotation of all of (i) the shares of Common Stock issuable upon conversion of the Series J Preferred Stock and (ii) any capital stock of the Company issued or issuable with respect to the shares of Common Stock issuable upon conversion of the Series J Preferred Stock, as applicable, as a result of any stock split, stock dividend, recapitalization, exchange or similar event or otherwise (the "Listed Securities") upon each national securities exchange and automated quotation system, if any, upon which the Common Stock is then listed (subject to official notice of issuance) and shall use commercially reasonable efforts to maintain such listing or quotation of all Listed Securities. The Company may be unable to meet the requirements to remain listed or quoted on any Trading Market as the Company is insolvent and therefore currently unable to meet its existing financial obligations. As a result, the Company may not be able to pay all fees and expenses required to satisfy the listing requirements of a Trading Market.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) <u>No Integration Actions</u>. None of the Company, any of its affiliates or any person acting on behalf of the Company or such affiliate will sell, offer for sale or solicit offers to buy in respect of any security (as defined in the 1933 Act) that would be integrated with the issuance of the Series J Preferred Stock or the shares of Common Stock issuable upon conversion of the Series J Preferred Stock in a manner that would require the registration under the 1933 Act of the issuance to the Creditor or require shareholder approval under the rules and regulations of the Trading Market, and the Company will take all action that is appropriate or necessary to assure that its offerings of other securities will not be integrated for purposes of the 1933 Act or the rules and regulations of the Trading Market with the issuance of Series J Preferred Stock contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) <u>Reservation of Shares</u>. From the date hereof until the Closing, the Company shall take all action necessary to at all times have authorized, and reserved for the purpose of issuance, no less than the maximum number of shares of Common Stock issuable upon conversion of the Series J Preferred Stock issuable under this Settlement Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) <u>Settlement and Release</u> The Company: (a) has read the terms of this Settlement Agreement and the Releases; (b) has been represented by counsel in connection with the review and execution of this Settlement Agreement; (c) fully understands the terms of this Settlement Agreement; (d) has been given sufficient time to consider whether to sign this Settlement Agreement; and (e) represents and warrants that no promises, statements or inducements have been made by the Creditor other than those expressly stated herein. The Company affirmatively represent that this Settlement Agreement is fair and executed freely.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii) <u>Claims</u>. The Company has not heretofore assigned, transferred, pledged or hypothecated, or agreed or purported to assign, transfer, pledge or hypothecate, to any entity or individual, any of the claims that were made or that could have been made based on the subject matter of this settlement.

12. <u>Reporting Status</u>.

The Company is currently up to date with its periodic reports required to be filed with the Securities and Exchange Commission (the "Commission") pursuant to the Securities Exchange Act of 1934, as amended (the "1934 Act"); however the Company has previously been untimely in its reporting obligations. Further, the Company may be unable to comply with its ongoing reporting requirements under the 1934 Act without additional funding as the Company has ceased all of its logistics and transportation operations and is currently unable to meet its existing financial obligations.

13. <u>Severability</u>.

The invalidity or unenforceability of any provision or covenant of this Settlement Agreement shall not affect the validity or enforceability of any other provision or covenant hereof, and any such invalid provision or covenant shall be deemed to be severable.

14. <u>No Construction Against Drafter</u>.

This Settlement Agreement shall be construed without regard to the Party or Parties responsible for the preparation of same and shall be deemed as prepared jointly by the Parties. Any ambiguity or uncertainty existing herein shall not be interpreted or construed against any Party.

15. <u>Further Assurances</u>.

The Parties agree to execute and deliver such further instruments, and to take such further actions, as may be reasonably necessary or proper to effectuate and carry the purposes of this Settlement Agreement.

16. <u>Taxes</u>

Each of the Parties shall be responsible for payment of its own taxes in connection with consideration paid or received in connection with this Settlement Agreement.

17. <u>Headings</u>.

The section headings contained in this Settlement Agreement are for the convenience of reference only and shall not affect the construction of any provision of this Settlement Agreement.

18. <u>Counterparts</u>.

This Settlement Agreement may be executed in two or more counterparts, via facsimile and/or PDF copies, each of which shall be deemed to be an original, and all the counterparts taken together constitute one and the same instrument.

IN WITNESS WHEREOF, the Parties have duly executed this Settlement Agreement as of the date first above written.

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| |
|:---|
| **TRANSPORTATION AND LOGISTICS SYSTEMS, INC.** |
| By: |
| Name: |
| Title |

---

---

| |
|:---|
| **[CREDITOR]** |
| By: |
| Name: |
| Title |
| Address: |
| Email: |
| Number of shares of Series J Preferred Stock: |

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**EXHIBIT A**

**AS FILED CERTIFICATE OF DESIGNATION OF PREFERENCES, RIGHTS AND LIMITATIONS OF SERIES J SENIOR CONVERTIBLE PREFERRED STOCK**

**Please see [Exhibit 3.1](https://www.sec.gov/Archives/edgar/data/1463208/000164117225008979/ex3-1.htm) to our Current Report on Form 8-K filed on May 7, 2025.**

**EXHIBIT B**

**(CREDITOR'S RELEASE TO TRANSPORTATION AND LOGISTICS SYSTEMS, INC.)**

<u>GENERAL RELEASE</u>

TO ALL TO WHOM THESE PRESENTS SHALL COME OR MAY CONCERN, KNOW THAT:

[Creditor], on behalf of itself and its past, present and future heirs, executors, administrators, successors and assigns, shareholders, partners, employees, agents, members, controlling persons, representatives, affiliates, subsidiaries or other entities controlled by them (hereinafter, collectively referred to as "RELEASORS"), in consideration of the securities provided for in the annexed Settlement Agreement and Mutual Release dated as of _______, 2025, executed by the RELEASEE and the RELEASOR (the "Settlement Agreement"), and other good and valuable consideration received from Transportation and Logistics Systems, Inc. (hereinafter, referred to as "RELEASEE"), receipt whereof is hereby acknowledged, release and discharge the RELEASEE, and the RELEASEE'S past, present and future heirs, executors, administrators, successors, assigns, shareholders, partners, employees, agents, members, controlling persons, representatives, affiliates, subsidiaries or other entities controlled by them, from all actions, causes of action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, extents, executions, claims and demands solely with respect to the Warrants and the conversion of the Preferred Stock, including the Accrued Dividends (each as defined in the Settlement Agreement), in law, admiralty, or equity, which against the RELEASEE the RELEASOR ever had, now have or hereafter can, shall or may have, for, upon, or by reason of any matter, cause or thing with respect to the Warrants and the conversion of the Preferred Stock and the Accrued Dividends from the beginning of the world to, and including, the date of this RELEASE, except for the obligations set forth in the Settlement Agreement.

The words "RELEASOR" and "RELEASEE" include all releasors and all releasees under this RELEASE.

This RELEASE may not be changed orally but only by a writing signed by all the parties.

**IN WITNESS WHEREOF**, the RELEASOR has caused this RELEASE to be executed on the _____ day of ______, 2025.

[Creditor]

By:   <br> Name: <br> Title:

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| |
|:---|
| **Witness** |
| Name: |

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**EXHIBIT C**

**(TRANSPORTATION AND LOGISTICS SYSTEMS, INC.'S RELEASE TO CREDITORS)**

<u>GENERAL RELEASE</u>

TO ALL TO WHOM THESE PRESENTS SHALL COME OR MAY CONCERN, KNOW THAT:

Transportation and Logistics Systems, Inc., on behalf of itself and its past, present and future heirs, executors, administrators, successors and assigns, shareholders, partners, employees, agents, members, controlling persons, representatives, affiliates, subsidiaries or other entities controlled by them (hereinafter, collectively referred to as "RELEASORS"), for good and valuable consideration received from [Creditor] (hereinafter, referred to as "RELEASEE"), receipt whereof is hereby acknowledged, release and discharge the RELEASEE, RELEASES' past, present and future heirs, executors, administrators, successors, assigns, shareholders, partners, employees, agents, members, controlling persons, representatives, affiliates, subsidiaries or other entities controlled by them, from all actions, causes of action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, extents, executions, claims and demands solely with respect to the Warrants and the conversion of the Preferred Stock, including the Accrued Dividends (each as defined in the Settlement Agreement (as defined below)), in law, admiralty, or equity, which against the RELEASEE the RELEASORS ever had, now have or hereafter can, shall or may have, for, upon, or by reason of any matter, cause or thing with respect to the Warrants and the conversion of the Preferred Stock and the Accrued Dividends from the beginning of the world to, and including, the date of this RELEASE, except for the obligations set forth in the Settlement Agreement and Mutual Release dated as of _______, 2025, executed by the RELEASEE and the RELEASOR (the "Settlement Agreement").

The words "RELEASORS" and "RELEASEES" include all releasors and all releasees under this RELEASE.

This RELEASE may not be changed orally but only by a writing signed by all the parties.

**IN WITNESS WHEREOF**, the RELEASOR has caused this RELEASE to be executed on the ____ day of _____, 2025.

**TRANSPORTATION AND LOGISTICS SYSTEMS, INC.**

By:   <br> Name: Sebastian Giordano <br> Title: Chief Executive Officer

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| |
|:---|
| **Witness** |
| Name |

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**EXHIBIT D**

**SUMMARY OF TERMS FOR SERIES J SENIOR CONVERTIBLE PREFERRED STOCK**

*The purpose of this Summary of Terms (this "Term Sheet") is to summarize the terms and rights of the Series J Senior Convertible Preferred Stock (the "Preferred Stock") of Transportation and Logistics Systems, Inc. This Term Sheet is intended only to provide the basic terms of the Preferred Stock, and shall not be deemed, to be the definitive terms of the Preferred Stock. This Term Sheet is neither a commitment to sell securities nor the solicitation of an offer to purchase securities, which may only be accomplished by the execution and delivery of mutually satisfactory definitive agreements. For more details, please see the as-filed Certificate of Designation of Preferences, Rights and Limitations of Series J Senior Convertible Preferred Stock filed as Exhibit 3.1 of our Current Report on Form 8-K filed with the Securities and Exchange Commission on May 7, 2025.*

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| | |
|:---|:---|
| ***Issuer:*** | Transportation and Logistics Systems, Inc. (the "***Company***"). |
| ***Authorized:*** | 1 million of shares of Series J Senior Convertible Preferred Stock (the "***Preferred Stock***"), convertible into shares of the Company's common stock (the "***Common Stock***"). |
| ***Stated Value:*** | $100 per share of Preferred Stock. |
| ***Redemption:*** | Upon the occurrence of any trigger event, each holder shall have the right to cause the Company to redeem all or part of their Preferred Stock at a price per share equal to 110% of the stated value. Trigger events include, but are not limited to, (i) the failure to maintain listing on an eligible trading market for five consecutive trading days, (ii) failure to reserve sufficient number of Common Stock in case of full conversion of the Preferred Stock, and (iii) insolvency or bankruptcy. |
| ***Conversion:*** | At any time from and after the original issue date, subject to (i) the Common Stock beneficial ownership limitation of 4.99%, and (ii) limitation on converting more than 10% of the trading volume of the Common Stock on any given day except for if the conversion price is greater than $0.40 per share of Common Stock. |
| ***Conversion Price:*** | The Preferred Stock can be converted to Common Stock at any time for the conversion price of $0.001 per share, subject to adjustment including anti-dilution for subsequent equity issuances. |
| ***Liquidation Preference:*** | The Preferred Stock shall have a liquidation preference equal to and shall be entitled to receive out of the assets of the Company an amount in cash equal to 120% of the aggregate stated value of all shares of Series J Preferred Stock held by each holder, respectively, in addition to all accrued and unpaid dividends, prior and in preference to the Common Stock or any other series of preferred stock. |
| ***Dividends:*** | The Preferred Stock dividend is cumulative and accruing at the rate of ten percent (10%) per annum, payable at the option of the Company in shares of Common Stock or in cash, and shall be computed on the basis of a 360-day year and twelve 30-day months. Dividend payments are paid every six months beginning June 30, 2025. |
| ***Voting:*** | The Preferred Stock shall have voting rights on an as converted basis. Further, as long as any shares of Preferred Stock are outstanding, the Company shall not, without the affirmative vote of holders of a majority of the then-outstanding shares of Preferred Stock, (i) alter or change adversely the powers, preferences or rights given to the Preferred Stock or alter or amend the Certificate of Designation for the Preferred Stock, (ii) amend the Company's Articles of Incorporation or other charter documents of the Company in a manner adverse to the holders of Preferred Stock, (iii) increase the number of authorized Series J Preferred Stock, or (iv) enter into any agreement with respect to (i) – (iii). |

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**EXHIBIT E**

**COMPLIANCE WITH FEDERAL AND STATE SECURITIES LAWS**

<u>Additional Representations and Warranties of the Creditor</u>. The Creditor hereby makes the following additional representations and warranties to the Company as of the date hereof and the date of any issuance of Series J Preferred Stock or any additional issuance of shares of Common Stock upon conversion thereof ("Securities"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Creditor is acquiring the Securities for investment for its own account and without the intention of participating, directly or indirectly, in a distribution of the Securities, and not with a view to resale or any distribution of the Securities, or any portion thereof, except pursuant to an exemption from registration under the 1933 Act or a registration statement under the 1933 Act.

2. Creditor has knowledge and experience in financial and business matters and has consulted with its own professional representatives as it has considered appropriate to assist in evaluating the merits and risks of this investment. Creditor has had access to and an opportunity to question the officers of the Company, or persons acting on their behalf, with respect to material information about the Company, and, in connection with the evaluation of this investment, has, to the best of its knowledge, received all information and data with respect to the Company that Creditor has requested and which is necessary to enable Creditor to make an informed decision regarding the purchase of the Securities. Creditor is acquiring the Securities based solely upon its independent examination and judgment as to the prospects of the Company. Creditor is n ot relying on any representation in connection with the subscription contemplated hereby, except for those representations set forth herein.

3. Creditor represents and warrants that it has reviewed and the Company's filings with the Commission. Creditor has not in connection with making its investment decision with respect to the Securities, relied on any representation or warranty about the Company, except as set forth herein.

4. The Securities were not offered to Creditor by means of publicly disseminated advertisements or sales literature.

5. In consideration of the acceptance of any Series J Preferred Stock pursuant to this Settlement Agreement , Creditor agrees that the Securities will not be offered for sale, sold or transferred by Creditor other than pursuant to (i) an exemption available under the 1933 Act; or (ii) a transaction that is otherwise in compliance with the 1933 Act; or (iii) an effective registration under the federal securities law or other jurisdiction applicable to the transaction, an exemption available under such laws, or a transaction that is otherwise in compliance with such laws.

6. Creditor understands that no U.S. federal or state agency has passed upon the offering of the Securities or has made any finding or determination as to the fairness of any investment in the Securities.

7. Creditor understands that the Series J Preferred Stock do not confer any rights of Common Stock ownership in excess of what is set forth in the Certificate of Designations and merely represent the right to acquire shares of Common Stock at a certain price. Creditor understands that there is no assurance that the market price of the Common Stock will ever equal or exceed the conversion price of the Series J Preferred Stock and, consequently, that the Creditor realize any profit from the conversion of the Series J Preferred Stock.

**SCHEDULE I TO EXHIBIT 10.8 FORM OF SETTLEMENT AGREEMENT (OUTSTANDING LIABILITIES AND WARRANTS)**

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| | | | |
|:---|:---|:---|:---|
| **Holder** | **Dividends Exchanged** | **Number of Warrants to be Released** | **Number of Shares of Series J Preferred to be Issued** |
| Quick Capital, LLC | $422.74 | 17857143 | 4 |
| Tri-Bridge Ventures, LLC | $1615.63 |  | 16 |
| Sullivan & Worcester LLP | $379961.00 |  | 3800 |
| Akabas & Sproule | $125000.00 |  | 1250 |

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## Exhibit 10.9

**Exhibit 10.9**

**FORM OF EXCHANGE AGREEMENT**

This EXCHANGE AGREEMENT (this "<u>Agreement</u>") is dated this [_] day of [_], 2025, by and between Transportation and Logistics Systems, Inc., a Nevada corporation (the "<u>Company</u>"), and the undersigned holder (the "<u>Holder</u>") of shares of the Company's Series E Convertible Preferred Stock, par value $0.001 per share, (the "<u>Series E Preferred Stock</u>"), warrants to purchase shares of Series E Preferred Stock, shares of the Company's Series G Convertible Preferred Stock, par value $0.001 per share (the "<u>Series G Preferred Stock</u>", and together with the Series E Preferred Stock, the "<u>Original Preferred Stock</u>"), and warrants to purchase shares of Series G Preferred Stock (together with the warrants to purchase shares of Series E Preferred Stock, the "<u>Original Warrants</u>", and collectively with the Original Preferred Stock, the "<u>Original Securities</u>"), in the amounts as set forth on <u>Exhibit A</u> hereto.

WHEREAS, the Company and the Holder have come to an agreement to (a) exchange (the "<u>Exchange</u>") the Original Preferred Stock, including all accrued and unpaid dividends through and including May 31, 2025, for [_________] shares of a newly-created series of preferred stock of the Company known as the Series J Senior Convertible Preferred Stock, par value $0.001 per share (the "<u>Exchange Securities</u>"), as calculated as set forth on <u>Exhibit A</u>, the designation, powers, privileges, preferences and relative participating, optional or other rights, if any, and the qualifications, limitations or restrictions of which are set forth in the Certificate of Designation (the "<u>Certificate of Designation</u>") filed with the Secretary of State of the State of Nevada on May 5, 2025, a copy of which is attached hereto as <u>Exhibit B</u> (together with the Summary of Terms for the Series J Senior Convertible Preferred Stock (the "<u>Term Sheet</u>") attached hereto as <u>Exhibit C</u>, this Agreement, including all exhibits and schedules thereto and hereto and any other documents or agreements executed in connection with the transactions contemplated hereunder, the "<u>Transaction Documents</u>"), and the parties hereto are memorializing the Exchange on the terms and conditions set forth in this Agreement in reliance on the exemption from registration provided by Section 3(a)(9) of the Securities Act of 1933, as amended (the "<u>Securities Act</u>") and (b) in connection with the Exchange, cancel the Original Warrants; and

WHEREAS, upon the consummation of the transactions contemplated hereby, the Holder shall no longer own any Original Securities, and the Company shall cancel the certificate(s) and all other physical documents evidencing the ownership of the Original Securities, if any.

NOW, THEREFORE, in consideration of the terms and conditions contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and the Holder hereby agree as follows:

Section 1. <u>Exchange and Cancellation</u>. Subject to and upon the terms and conditions set forth in this Agreement, on the Closing Date, the Holder shall surrender to the Company the Original Securities and, in exchange therefor, the Company shall convey to the Holder the Exchange Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1 <u>Closing</u>. On the Closing Date (as defined below), the Company shall issue and deliver (or cause to be issued and delivered) the Exchange Securities to the Holder, or in the name of a custodian or nominee of the Holder, or as otherwise requested by the Holder in writing and, subject to <u>Section 4.1</u>, and the Holder shall surrender and deliver (or cause to be surrendered and delivered) to the Company the Original Securities (including any rights associated with such Original Securities) for cancellation or if the Original Securities are held book-entry form, the Original Securities shall be deemed to be surrendered, delivered and cancelled on the Company's stock transfer books. The closing of the Exchange shall occur effective as on June 1, 2025, or as soon thereafter as the parties hereto may mutually agree in writing (the "<u>Closing Date</u>"), subject to the provisions of <u>Section 4</u> and <u>Section 5</u> herein; *provided, however*, that the Closing Date shall occur, and Company shall be obligated to issue and deliver (or cause to be issued and delivered) the Exchange Securities to the Holder as specified in this <u>Section 1.1</u>, no later than the standard settlement period on the Company's primary Trading Market (as defined below). The parties hereto agree that any dividends with respect to the Original Securities shall cease to accrue effective as of May 31, 2025 and dividends with respect to the Exchange Securities shall begin accruing effective as of June 1, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2 <u>Release of Prior Reserves</u>. Immediately upon issuance and delivery of the Exchange Securities, the Holder hereby authorizes the release of any reserves of shares of the Company's common stock, $0.001 par value per share (the "<u>Common Stock</u>"), in connection with the Original Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3 <u>Cancellation of Original Warrants</u>. Immediately upon issuance and delivery of the Exchange Securities, the Holder acknowledges and agrees that the Original Warrants held by the Holder are hereby cancelled for no additional consideration effective as of the Closing Date. The Holder shall deliver to the Company the Original Warrants, or otherwise provide evidence that such warrants have been destroyed or otherwise disposed of and the Company's books and records shall be updated to reflect such cancellation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.4 <u>Section 3(a)(9)</u>. Assuming the accuracy of the representations and warranties of each of the Company and the Holder set forth in <u>Sections 2</u> and <u>3</u> of this Agreement, the parties hereto acknowledge and agree that the purpose of such representations and warranties is, among other things, to ensure that the Exchange qualifies as an exchange of securities under Section 3(a)(9) of the Securities Act.

Section 2. <u>Representations and Warranties of the Company</u>. The Company represents and warrants to the Holder that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 <u>Organization and Qualification</u>. The Company is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization. The Company is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability of this Agreement or any other Transaction Document, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company, taken as a whole, or (iii) a material adverse effect on the Company's ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a "<u>Material Adverse Effect</u>") and, to the best of the Company's knowledge, no proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2 <u>Authorization; Enforcement</u>. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, the board of directors of the Company or the Company's shareholders in connection herewith or therewith. This Agreement and each other Transaction Document to which it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors' rights generally; (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies; and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3 <u>Issuance of Exchange Securities</u>. The issuance the Exchange Securities by the Company has been duly authorized. The shares of Common Stock into which the Exchange Securities may be converted to from time to time (the "<u>Exchange Shares</u>"), have been duly authorized and when issued in accordance with the terms of the Exchange Securities, shall be validly issued, fully paid and nonassessable shares of Common Stock, and shall be free and clear of all liens, charges, taxes, security interests, encumbrances, rights of first refusal, preemptive or similar rights and other encumbrances, including without limitation under the Company's articles of incorporation, as amended (the "<u>Articles of Incorporation</u>"), its bylaws (the "<u>Bylaws</u>"). The Exchange Securities shall not bear any restrictive legend and the Holder may sell the Exchange Shares pursuant to an applicable exemption from registration under the Securities Act or pursuant to an effective registration statement. Upon issuance and delivery in accordance herewith, the issuance by the Company of the Exchange Securities in exchange for the Original Securities is exempt from the registration requirements of the Securities Act under Section 3(a)(9) of the Securities Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4 <u>No Conflicts</u>. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents and the consummation by it of the transactions contemplated hereby and thereby do not and will not: (i) conflict with or violate any provision of the Company's or any of the Company's subsidiary's (each, a "<u>Subsidiary</u>") articles or certificate of incorporation, bylaws or other organizational or charter documents; (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any options, contracts, agreements, liens, security interests, or other encumbrances ("<u>Liens</u>") upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected; or (iii) conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5 <u>Acknowledgment Regarding the Exchange</u>. The Company acknowledges and agrees that the Holder is acting solely in the capacity of an arm's length third party with respect to this Agreement and the other Transaction Documents and the transactions contemplated hereby and thereby. The Company further acknowledges the Holder is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement and the other Transaction Documents and the transactions contemplated hereby and thereby, and any advice given by the Holder or any of its representatives or agents in connection with this Agreement or any other Transaction Document is merely incidental to the Exchange.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.6 <u>No Commission; No Other Consideration</u>. The Company has not paid or given, and has not agreed to pay or give, directly or indirectly, any commission or other remuneration for soliciting the Exchange. The Exchange Securities are being issued exclusively in exchange for the Original Securities and no other consideration has or will be paid for the Exchange Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.7 <u>Section 3(a)(9) Representation</u>. The Company has not, nor has any person acting on its behalf, directly or indirectly made any offers or sales of any security or solicited any offers to buy any security under circumstances that would cause the Exchange and the issuance of the Exchange Securities pursuant to this Agreement to be integrated with prior offerings by the Company for purposes of the Securities Act which would prevent the Company from delivering the Exchange Securities to the Holder pursuant to Section 3(a)(9) of the Securities Act, nor will the Company take any action or steps that would cause the Exchange, issuance and delivery of the Exchange Securities to be integrated with other offerings to the effect that the delivery of the Exchange Securities to the Holder would be seen not to be exempt pursuant to Section 3(a)(9) of the Securities Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.8 <u>No Third-Party Advisors</u>. The Company has not engaged any third parties to assist in the solicitation with respect to the Exchange.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.9 <u>Subsidiaries</u>. All of the direct and indirect Subsidiaries of the Company are set forth in <u>Schedule 2.9</u>. Except as may be set forth in the <u>Schedule 2.9</u>, the Company owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary free and clear of any Liens, and all of the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.10 <u>Filings, Consents and Approvals</u>. Other than for any filings with OTCQB, OTCQX, or the Pink Open Market (collectively, the "<u>OTC</u>"), any filings required to be made with the U.S. Securities and Exchange Commission (the "<u>Commission</u>") pursuant to the Exchange Act or any state securities commission in connection with the transactions contemplated by this Agreement and any other Transaction Document, the Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or any natural person, firm, partnership, association, corporation, company, trust business trust or other entity (each, a "<u>Person</u>") in connection with the execution, delivery and performance by the Company of the Transaction Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.11 <u>Capitalization</u>. The capitalization of the Company is as set forth in <u>Schedule 2.11</u>. Except as set forth in the <u>Schedule 2.11</u>, No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents. Except as set forth on <u>Schedule 2.11</u>, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock, options or any securities of the Company which would entitle the holder thereof to acquire at any time shares of Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, shares of Common Stock. The issuance of the Exchange Securities will not obligate the Company to issue shares of Common Stock or other securities to any Person and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities; provided, however, except as explicitly provided herein, such waiver applies to the Exchange Securities and no other waivers are granted nor shall this provision impact the rights of any holder subsequent to this exchange. All of the outstanding shares of capital stock of the Company have been duly authorized and are validly issued, fully paid and nonassessable, and none of such outstanding shares were issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. There are no shareholders' agreements or other similar agreements with respect to the Company's capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company's shareholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.12 <u>DTC Eligibility</u>. The Company, through its transfer agent, currently participates in The Depository Trust Company ("<u>DTC</u>") Fast Automated Securities Transfer ("<u>FAST</u>") Program.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.13 <u>Litigation</u>. Other than as set forth in the <u>Schedule 2.13</u>, there is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an "<u>Action</u>") which (i) adversely affects or challenges the legality, validity or enforceability of any Transaction Document or the Exchange Securities or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.14 <u>Regulatory Permits</u>. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses (each, a "<u>Material Permit</u>"), except where the failure to possess such Material Permits could not reasonably be expected to result in a Material Adverse Effect, and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or modification of any Material Permit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.15 <u>Labor Relations</u>. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company, which could reasonably be expected to result in a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.16 <u>Title to Assets</u>. The Company and the Subsidiaries have good and marketable title in fee simple to all real property (to the extent owned by them) and good and marketable title in all personal property (to the extent owned by them) that is material to the business of the Company and the Subsidiaries, in each case free and clear of all Liens, except for (i) Liens as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries, and (ii) Liens for the payment of federal, state or other taxes, for which appropriate reserves have been made therefor in accordance with GAAP and, the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company and the Subsidiaries are in compliance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.17 <u>Insurance</u>. To the extent that the Company and the Subsidiaries are insured, the Company and Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged. Neither the Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage (to the extent such coverage exists) as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.18 <u>Certain Fees</u>. No brokerage or finder's fees or commissions are or will be payable by the Company or any Subsidiaries to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.19 <u>Investment Company</u>. The Company is not, and is not an Affiliate of, and immediately after consummation of the transactions contemplated hereunder, will not be or be an Affiliate of, an "investment company" within the meaning of the Investment Company Act of 1940, as amended. The Company shall conduct its business in a manner so that it will not become an "investment company" subject to registration under the Investment Company Act of 1940, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.20 <u>No Integrated Offering</u>. Assuming the accuracy of the Holder's representations and warranties set forth in <u>Section 3</u>, neither the Company, nor any of its Affiliates, nor any Person acting on their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause the Exchange to be integrated with prior offerings by the Company for purposes of (i) the Securities Act which would require the registration of any such securities under the Securities Act, or (ii) any applicable shareholder approval provisions of any trading markets or exchanges on which the Common Stock is listed, quoted or designated for trading on the date in question (each, a "<u>Trading Market</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.21 <u>Office of Foreign Assets Control</u>. Neither the Company nor any Subsidiary nor, to the Company's knowledge, any director, officer, agent, employee or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.22 <u>Disclosure</u>. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company confirms that neither it nor any other Person acting on its behalf has provided the Holder or its agents or counsel with any information that it believes constitutes or might constitute material, non-public information. The Company understands and confirms that the Holder will rely on the foregoing representation in effecting transactions in securities of the Company. All of the disclosure furnished by or on behalf of the Company to the Holder regarding the Company and the Subsidiaries, their respective businesses and the transactions contemplated hereby, including any Disclosure Schedules to this Agreement, is true and correct and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. The press releases disseminated by the Company during the twelve (12) months preceding the date of this Agreement taken as a whole do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made and when made, not misleading. The Company acknowledges and agrees that the Holder makes no, nor has made, any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 3 hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.23 <u>Tax Status</u>. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, the Company and its Subsidiaries each (i) has made or filed all United States federal, state and local income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company or of any subsidiary know of no basis for any such claim.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.24 <u>Foreign Corrupt Practices</u>. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any agent or other person acting on behalf of the Company or any Subsidiary, has: (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity; (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds; (iii) failed to disclose fully any contribution made by the Company or any subsidiary (or made by any person acting on its behalf of which the Company is aware) which is in violation of law or (iv) violated in any material respect any provision of the Foreign Corrupt Practices Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.25 <u>Regulation M Compliance</u>. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the issuance or resale of any shares of Common Stock, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any Common Stock, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.26 <u>Bank Holding Company Act</u>. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company Act of 1956, as amended (the "<u>BHCA</u>") and to regulation by the Board of Governors of the Federal Reserve System (the "<u>Federal Reserve</u>"). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent or more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its Subsidiaries or Affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.27 <u>Money Laundering</u>. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the "<u>Money Laundering Laws</u>"), and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened.

Section 3. <u>Representations and Warranties of the Holder</u>. The Holder represents and warrants to the Company that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 <u>Ownership of the Original Securities</u>. The Holder is the legal and beneficial owner of the Original Securities. The Holder paid for the Original Securities and has continuously held the Securities since its purchase. The Holder owns the Original Securities outright and free and clear of any options, contracts, agreements, liens, security interests, or other encumbrances.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2 <u>No Public Sale or Distribution</u>. The Holder is acquiring the Exchange Securities in the ordinary course of business for its own account and not with a view toward, or for resale in connection with, the public sale or distribution thereof; *provided, however*, that by making the representations herein, the Holder does not agree to hold any of the Exchange Securities, for any minimum or other specific term and reserves the right to dispose of the Exchange Securities at any time in accordance with an exemption from the registration requirements of the Securities Act and applicable state securities laws. Except as contemplated herein, the Holder does not presently have any agreement or understanding, directly or indirectly, with any person to distribute, or transfer any interest or grant participation rights in, the Original Securities or the Exchange Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3 <u>Accredited Investor and Affiliate Status</u>. The Holder is an "accredited investor" as that term is defined in Rule 501 of Regulation D under the Securities Act. The Holder is not, and has not been, for a period of at least three (3) months prior to the date of this Agreement (a) an officer or director of the Company, (b) an "affiliate" of the Company (as defined in Rule 405 of the Securities Act) or (c) a "beneficial owner" of more than ten percent (10%) of the Common Stock (as defined for purposes of Rule 13d-3 of the Exchange Act).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.4 <u>Reliance on Exemptions</u>. The Holder understands that the Exchange is being made in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying in part upon the truth and accuracy of, and the Holder's compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Holder set forth herein in order to determine the availability of such exemptions and the eligibility of the Holder to complete the Exchange and to acquire the Exchange Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.5 <u>Information</u>. The Holder has been furnished with certain materials relating to the business, finances and operations of the Company and certain documentation relating to the Exchange which have been requested by the Holder. The Holder has been afforded the opportunity to ask questions of the Company. Neither such inquiries nor any other due diligence investigations conducted by the Holder or its representatives shall modify, amend or affect the Holder's right to rely on the Company's representations and warranties contained herein. The Holder acknowledges that not all of the documents the Company is required have timely filed under Sections 13(a), 14(a) or 15(d) of the Exchange Act have been filed and/or posted on the Commission's EDGAR site, and the Holder has not relied on any statement of the Company not contained in such documents or in the Transaction Documents in connection with the Holder's decision to enter into this Agreement and the Exchange. Additionally, the Holder is aware that the Company may be in default of certain of its contractual obligations. The Holder further acknowledges that it has been provided and have reviewed a copy of the draft Certificate of Designation and the Term Sheet.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.6 <u>Risk</u>. The Holder understands that its investment in the Exchange Securities involves a high degree of risk. The Holder is able to bear the risk of an investment in the Exchange Securities including, without limitation, the risk of total loss of its investment. The Holder has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision with respect to the Exchange.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.7 <u>No Governmental Review</u>. The Holder understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement in connection with the Exchange or the fairness or suitability of the investment in the Exchange Securities nor have such authorities passed upon or endorsed the merits of the Exchange Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.8 <u>Organization; Authorization</u>. The Holder is either an individual or an entity duly organized, validly existing and in good standing under the laws of its jurisdiction of organization or formation, as the case may be, and has the requisite corporate or other power and authority to enter into and perform its obligations under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.9 <u>Validity; Enforcement</u>. This Agreement has been duly and validly authorized, executed and delivered on behalf of the Holder and shall constitute the legal, valid and binding obligations of the Holder enforceable against the Holder in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors' rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law. If applicable, the execution, delivery and performance of this Agreement by the Holder and the consummation by the Holder of the transactions contemplated hereby (including, without limitation, the irrevocable surrender of the Original Securities) will not result in a violation of the organizational documents of the Holder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.10 <u>Prior Investment Experience</u>. The Holder acknowledges that it has prior investment experience, including investment in securities of the type being exchanged, including the Original Securities and the Exchange Securities, and has read all of the documents furnished or made available by the Company to it and is able to evaluate the merits and risks of such an investment on its behalf, and that it recognizes the highly speculative nature of this investment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.11 <u>Tax Consequences</u>. The Holder acknowledges that the Company has made no representation regarding the potential or actual tax consequences for the Holder which will result from entering into the Agreement and from consummation of the Exchange. The Holder acknowledges that it bears complete responsibility for obtaining adequate tax advice regarding the Agreement and the Exchange.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.12 <u>No Registration, Review or Approval</u>. The Holder acknowledges, understands and agrees that the Exchange Securities are being exchanged for the Original Securities hereunder pursuant to an exchange offer exemption under Section 3(a)(9) of the Securities Act.

Section 4. <u>Conditions Precedent to Obligations of the Company</u>. The obligation of the Company to consummate the transactions contemplated by this Agreement is subject to the satisfaction of each of the following conditions, provided that these conditions are for the Company's sole benefit and may be waived by the Company at any time in its sole discretion by providing the Holder with prior written notice thereof:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 <u>Delivery</u>. The Holder shall have delivered to the Company the Original Securities or otherwise acknowledged in writing that it will deliver the Original Securities within ten (10) calendar days hereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 <u>No Prohibition</u>. No order of any court, arbitrator, or governmental or regulatory authority shall be in effect which purports to enjoin or restrain any of the transactions contemplated by this Agreement; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3 <u>Representations</u>. The accuracy in all material respects when made and on the Closing Date of the representations and warranties of the Holder contained herein (unless as of a specific date therein).

Section 5. <u>Conditions Precedent to Obligations of the Holder</u>. The obligation of the Holder to consummate the transactions contemplated by this Agreement is subject to the satisfaction of each of the following conditions, provided that these conditions are for the Holder's sole benefit and may be waived by the Holder at any time in its sole discretion by providing the Company with prior written notice thereof:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 <u>No Prohibition</u>. No order of any court, arbitrator, or governmental or regulatory authority shall be in effect which purports to enjoin or restrain any of the transactions contemplated by this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 <u>Representations</u>. The representations and warranties of the Company shall be true and correct in all material respects when made and on the Closing Date (unless as of a specific date therein), except for such representations and warranties contained herein that are qualified by "materiality" or "Material Adverse Effect," in which case such representations and warranties of the Company shall be true and correct in all respects when made and on the Closing Date (unless as of a specific date therein);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3 <u>All Obligations</u>. All obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been performed; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3 <u>No Suspension</u>. From the date hereof to the Closing Date, trading in the Common Stock shall not have been suspended by the Commission or any Trading Market and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg L.P. shall not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported by such service, or on any trading market, nor shall a banking moratorium have been declared either by the United States or New York State authorities nor shall there have occurred any material outbreak or escalation of hostilities or other national or international calamity of such magnitude in its effect on, or any material adverse change in, any financial market which, in each case, in the reasonable judgment of the Holder makes it impracticable or inadvisable to consummate the Exchange and accept the Exchange Securities on the Closing Date.

Section 6. <u>Other Agreements between the Parties</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1 <u>Integration</u>. The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the Exchange of the Original Securities in a manner that would require the registration under the Securities Act of the sale of the Exchange Securities or that would be integrated with the offer of the Exchange Securities for purposes of the rules and regulations of any Trading Market such that it would require shareholder approval prior to the closing of such other transaction unless shareholder approval is obtained before the closing of such subsequent transaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2 <u>Replacement of Securities</u>. If any certificate or instrument evidencing any of the Exchange Securities is mutilated, lost, stolen or destroyed, the Company shall convey or cause to be conveyed in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement Securities.

Section 7. <u>Governing Law; Jurisdiction; Waiver of Jury Trial</u>. This Agreement shall be construed under the laws of the state of New York, without regard to principles of conflicts of law or choice of law that would permit or require the application of the laws of another jurisdiction. The Company and the Holder each hereby agrees that all actions or proceedings arising directly or indirectly from or in connection with this Agreement shall be litigated only in the Supreme Court of the State of New York or the United States District Court for the Southern District of New York located in New York County, New York. The Company and the Holder each consents to the exclusive jurisdiction and venue of the foregoing courts and consents that any process or notice of motion or other application to either of said courts or a judge thereof may be served inside or outside the State of New York or the Southern District of New York by generally recognized overnight courier or certified or registered mail, return receipt requested, directed to such party at its or his address set forth below (and service so made shall be deemed "personal service") or by personal service or in such other manner as may be permissible under the rules of said courts. THE COMPANY AND THE HOLDER EACH HEREBY WAIVES ANY RIGHT TO A JURY TRIAL IN CONNECTION WITH ANY LITIGATION PURSUANT TO THIS AGREEMENT.

Section 8. <u>Counterparts</u>. This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party hereto and delivered to the other party hereto; provided that a facsimile or electronic signature shall be considered due execution and shall be binding upon the signatory thereto with the same force and effect as if the signature were an original, not a facsimile or electronic signature, as applicable.

Section 9. <u>Headings</u>. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement.

Section 10. <u>Severability</u>. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction.

Section 11. <u>No Strict Construction</u>. The language used in this Agreement will be deemed to be the language chosen by the parties hereto to express their mutual intent, and no rules of strict construction will be applied against any party hereto.

Section 12. <u>Entire Agreement; Amendments</u>. This Agreement supersedes all other prior oral or written agreements between the Holder, the Company, their Affiliates and Persons acting on their behalf with respect to the matters discussed herein, and this Agreement contains the entire understanding of the parties hereto with respect to the matters covered herein. No provision of this Agreement may be amended other than by an instrument in writing signed by the Company and the Holder. No provision hereof may be waived other than by an instrument in writing signed by the party against whom enforcement is sought.

Section 13. <u>Notices</u>. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (a) upon receipt, when delivered personally; (b) upon receipt, when sent by electronic mail (provided confirmation of transmission is electronically generated and kept on file by the sending party); or (c) one calendar day (excluding Saturdays, Sundays, and national banking holidays) after deposit with an overnight courier service, in each case properly addressed to the party to receive the same.

The addresses and e-mail addresses for such communications shall be:

If to the Company:

Transportation and Logistics Systems, Inc.

Attn: Sebastian Giordano

5500 Military Trail, Suite 22-357

Jupiter, Florida 33458 <br> E-mail: Sebastian.Giordano@tlss-inc.com

With a copy to:

Sullivan & Worcester LLP

Attn: David Danovitch, Esq.

1251 Avenue of the Americas

New York, New York 10020

Email: ddanovitch@sullivanlaw.com

If to the Holder:

to the address set forth on its signature page to this Agreement.

or to such other address, email address and/or facsimile number and/or to the attention of such other person as the recipient party has specified by written notice given to each other party five (5) calendar days prior to the effectiveness of such change.

Section 14. <u>Successors and Assigns</u>. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, including any purchasers of the Exchange Securities. Subject to its compliance with applicable federal and state securities laws, the Holder may assign some or all of its rights hereunder without the consent of the Company, in which event such assignee shall be deemed to be the Holder hereunder with respect to such assigned rights.

Section 15. <u>No Third-Party Beneficiaries</u>. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

Section 16. <u>Survival of Representations</u>. The representations and warranties of the Company and the Holder contained in <u>Sections 2</u> and <u>3</u>, respectively, will survive the closing of the transactions contemplated by this Agreement.

Section 17. <u>Securities Law Disclosure; Publicity</u>. The Company shall, by 5:30 pm (New York City Time) on the date hereof (or if this Agreement is executed after 5:30 pm (New York City Time) on the date hereof, no later than 9:30 am (New York City Time) on the next Trading Day), issue a press release and/or file a Form 8-K disclosing the material terms of the transactions contemplated hereby and attaching this Agreement, to the extent that it is required to be filed under the Exchange Act, that has not previously been filed with the Commission by the Company as an exhibit to such filing. From and after the release of such disclosure, the Company represents to the Holder that it shall have publicly disclosed all material, non-public information delivered to the Holder by the Company. In addition, effective upon the issuance of such disclosure, the Company acknowledges and agrees that any and all confidentiality or similar obligations under any agreement, whether written or oral, between the Company, on the one hand, and the Holder or any of their Affiliates on the other hand, shall terminate and be of no further force or effect. Without the prior written consent of the Holder (which may be granted or withheld in the Holder's sole discretion), except as required by applicable law, the Company shall not (and shall cause each of its Subsidiaries and Affiliates to not) disclose the name of the Holder in any filing, announcement, release or otherwise. The Company understands and confirms that the Holder shall be relying on the foregoing covenant in effecting transactions in securities of the Company.

Section 18. <u>[Reserved]</u>.

Section 19. <u>Most Favored Nation</u>. The Company hereby represents and warrants as of the date hereof and covenants and agrees from and after the date hereof until three (3) months following the date hereof (the "<u>MFN Period</u>"), that none of the terms offered to any other holder of the Company's preferred stock pursuant to any other securities exchange agreement (or any amendment, modification or waiver thereof including other exchange agreements signed concurrently with this Agreement), is or will be more favorable to such other holder(s) of the Company's securities than those of the Holder and this Agreement. If, and whenever on or after the date hereof during the MFN Period, the Company enters into another Exchange Agreement (or any amendment, modification or waiver with any other holder of warrants), then (i) the Company shall provide notice thereof to the Holder promptly following the occurrence thereof and (ii) the terms and conditions of this Agreement shall be, without any further action by the Holder or the Company, automatically amended and modified in an economically and legally equivalent manner such that the Holder shall receive the benefit of the more favorable terms and/or conditions (as the case may be) set forth in such other Agreement, provided that upon written notice to the Company at any time the Holder may elect not to accept the benefit of any such amended or modified term or condition, in which event the term or condition contained in this Agreement shall apply to the Holder as it was in effect immediately prior to such amendment or modification as if such amendment or modification never occurred with respect to the Holder. For the avoidance of doubt, this provision shall not apply to any new classes of preferred stock issued after the date of this Agreement nor to any other securities that are outstanding or may become outstanding after the date of this Agreement.

Section 20. <u>[Reserved]</u>.

Section 21. <u>Listing</u>. The Company shall promptly secure the listing or designation for quotation (as the case may be) of all of the Exchange Shares upon each national securities exchange and automated quotation system, if any, upon which the Common Stock is then listed or designated for quotation (as the case may be) (subject to official notice of issuance) and shall maintain such listing or designation for quotation (as the case may be) of all Exchange Shares from time to time issuable under the terms of this Agreement and any other Transaction Documents on such national securities exchange or automated quotation system. The Company shall maintain the Common Stock's listing or authorization for quotation (as the case may be) on any one (or more) of The New York Stock Exchange, the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, or the OTC (each, an "<u>Eligible Market</u>"). Neither the Company nor any of its Subsidiaries shall take any action which could be reasonably expected to result in the delisting or suspension of the Common Stock so that they are not listed or admitted for trading on any Eligible Market. The Company shall pay all fees and expenses in connection with satisfying its obligations under this Section 21.

Section 22. <u>Further Assurances</u>. Each party hereto shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party hereto may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and any other Transaction Documents and the consummation of the transactions contemplated hereby and thereby.

[***Signature Pages Follow***]

IN WITNESS WHEREOF, the parties hereto have executed this Exchange Agreement as of the date first written above.

---

| | |
|:---|:---|
| **TRANSPORTATION AND LOGISTICS SYSTEMS, INC.** | **TRANSPORTATION AND LOGISTICS SYSTEMS, INC.** |
| By: |  |
| Name: | Sebastian Giordano |
| Title: | Chief Executive Officer |

---

[Company Signature Page to the Exchange Agreement]

AGREED TO AND ACCEPTED:

**[HOLDER]**

By: <br> Name: <br> Title:

Notice and Information to: [●]

[Holder Signature Page to the Exchange Agreement]

**<u>Exhibit A</u>**

**Remaining Original Securities**

<u>Security</u> <u>Issue Date</u> <u>Quantity Held</u> <u>Stated Value</u> <u>Accrued Dividends</u> <br>

**Total Series J Shares Calculation**

---

| | |
|:---|:---|
| Total Stated Value | $|
| Total Accrued Dividends | $________ |
| Total Value to be Converted | $|
| Total Series J Shares | ________ |
| (Equals the Total Value to be Converted divided by $100) |  |

---

**<u>Exhibit B</u>**

**As Filed Certificate of Designation for Series J Senior Convertible Preferred Stock**

Please see [Exhibit 3.1](https://www.sec.gov/Archives/edgar/data/1463208/000164117225008979/ex3-1.htm) to our Current Report on Form 8-K filed on May 7, 2025.

**<u>Exhibit C</u>**

**SUMMARY OF TERMS OF THE SERIES J SENIOR CONVERTIBLE PREFERRED STOCK**

*The purpose of this Summary of Terms (this "Term Sheet") is to summarize the terms and rights of the Series J Senior Convertible Preferred Stock (the "Preferred Stock") of Transportation and Logistics Systems, Inc. This Term Sheet is intended only to provide the basic terms of the Preferred Stock, and shall not be deemed, to be the definitive terms of the Preferred Stock. For more details, please see the as-filed Certificate of Designation of Preferences, Rights and Limitations of Series J Senior Convertible Preferred Stock filed as Exhibit 3.1 of our Current Report on Form 8-K filed with the Securities and Exchange Commission on May 7, 2025.*

**SUMMARY OF TERMS**

**FOR**

**SERIES J SENIOR CONVERTIBLE PREFERRED STOCK**

**OF**

**TRANSPORTATION AND LOGISITICS SYSTEMS, INC.**

---

| | |
|:---|:---|
| ***Issuer:*** | Transportation and Logistics Systems, Inc. (the "***Company***"). |
| ***Authorized:*** | 1 million of shares of Series J Senior Convertible Preferred Stock (the "***Preferred Stock***"), convertible into shares of the Company's common stock (the "***Common Stock***"). |
| ***Stated Value:*** | $100 per share of Preferred Stock. |
| ***Redemption:*** | Upon the occurrence of any trigger event, each holder shall have the right to cause the Company to redeem all or part of their Preferred Stock at a price per share equal to 110% of the stated value. Trigger events include, but are not limited to, (i) the failure to maintain listing on an eligible trading market for five consecutive trading days, (ii) failure to reserve sufficient number of Common Stock in case of full conversion of the Preferred Stock, and (iii) insolvency or bankruptcy. |
| ***Conversion:*** | At any time from and after the original issue date, subject to (i) the Common Stock beneficial ownership limitation of 4.99%, and (ii) limitation on converting more than 10% of the trading volume of the Common Stock on any given day except for if the conversion price is greater than $0.40 per share of Common Stock. |
| ***Conversion Price:*** | The Preferred Stock can be converted to Common Stock at any time for the conversion price of $0.001 per share, subject to adjustment including anti-dilution for subsequent equity issuances. |
| ***Liquidation Preference:*** | The Preferred Stock shall have a liquidation preference equal to and shall be entitled to receive out of the assets of the Company an amount in cash equal to 120% of the aggregate stated value of all shares of Series J Preferred Stock held by each holder, respectively, in addition to all accrued and unpaid dividends, prior and in preference to the Common Stock or any other series of preferred stock. |
| ***Dividends:*** | The Preferred Stock dividend is cumulative and accruing at the rate of ten percent (10%) per annum, payable at the option of the Company in shares of Common Stock or in cash, and shall be computed on the basis of a 360-day year and twelve 30-day months. Dividend payments are paid every six months beginning June 30, 2025. |
| ***Voting:*** | The Preferred Stock shall have voting rights on an as converted basis. Further, as long as any shares of Preferred Stock are outstanding, the Company shall not, without the affirmative vote of holders of a majority of the then-outstanding shares of Preferred Stock, (i) alter or change adversely the powers, preferences or rights given to the Preferred Stock or alter or amend the Certificate of Designation for the Preferred Stock, (ii) amend the Company's Articles of Incorporation or other charter documents of the Company in a manner adverse to the holders of Preferred Stock, (iii) increase the number of authorized Series J Preferred Stock, or (iv) enter into any agreement with respect to (i) – (iii). |

---

**SCHEDULE I TO EXHIBIT 10.9 FORM OF EXCHANGE AGREEMENT**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Holder** | **Number of Shares of Series E Preferred Stock being Exchanged** | **Number of Shares of Series G Preferred Stock being Exchanged** | **Amount of Accrued Dividends being Exchanged** | **Number of Warrants to be Released** | **Number of Shares of Series J Preferred to be Issued** |
| BHP Capital NY, Inc. |  | 36000 | $80658.89 | 47142857 | 4408 |
| Cavalry Fund I LP | 21418 | 50000 | $221686.38 | 8000000 | 10074 |
| Cavalry Investment Fund LP |  | 25000 | $57329.14 |  | 3058 |
| Cavalry Special Ops Fund LP |  | 25000 | $57329.14 |  | 3058 |
| Efrat Investments LLC |  | 22500 | $64880.23 | 97857143 | 2899 |
| Jefferson Street Capital LLC |  | 15500 | $34920.84 | 25000000 | 1899 |
| Mercer Street Global Opportunity Fund LLC |  | 100000 | $244408.80 |  | 12444 |
| Joseph M. Riccio, Jr. |  | 112500 | $258863.62 |  | 13839 |
| Eagle Equities, LLC |  | 20000 | $46802.43 |  | 2468 |

---

## Exhibit 10.10

**Exhibit 10.10**

**FORM OF EXCHANGE AGREEMENT (WARRANTS ONLY)**

This EXCHANGE AGREEMENT (this "<u>Agreement</u>") is dated this [_] day of [_], 2025, by and between Transportation and Logistics Systems, Inc., a Nevada corporation (the "<u>Company</u>"), and the undersigned holder (the "<u>Holder</u>") of warrants (the "<u>Original Securities</u>") to purchase shares of the Company's common stock, par value $0.001 per share (the "<u>Common Stock</u>), in the amounts as set forth on <u>Exhibit A</u> hereto.

WHEREAS, the Company and the Holder have come to an agreement to (a) exchange (the "<u>Exchange</u>") the Original Securities for [_________] shares of a newly-created series of preferred stock of the Company known as the Series J Senior Convertible Preferred Stock, par value $0.001 per share (the "<u>Exchange Securities</u>"), as calculated as set forth on <u>Exhibit A</u>, the designation, powers, privileges, preferences and relative participating, optional or other rights, if any, and the qualifications, limitations or restrictions of which are set forth in the Certificate of Designation (the "<u>Certificate of Designation</u>") filed with the Secretary of State of the State of Nevada on May 5, 2025, a copy of which is attached hereto as <u>Exhibit B</u> (together with the Summary of Terms for the Series J Senior Convertible Preferred Stock (the "<u>Term Sheet</u>") attached hereto as <u>Exhibit C</u>, this Agreement, including all exhibits and schedules thereto and hereto and any other documents or agreements executed in connection with the transactions contemplated hereunder, the "<u>Transaction Documents</u>"), and the parties hereto are memorializing the Exchange on the terms and conditions set forth in this Agreement in reliance on the exemption from registration provided by Section 3(a)(9) of the Securities Act of 1933, as amended (the "<u>Securities Act</u>"), and (b) in connection with the Exchange, cancel the Original Securities; and

WHEREAS, upon the consummation of the transactions contemplated hereby, the Holder shall no longer hold any Original Securities, and the Company shall cancel and all documents evidencing the Original Securities.

NOW, THEREFORE, in consideration of the terms and conditions contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and the Holder hereby agree as follows:

Section 1. <u>Exchange and Cancellation</u>. Subject to and upon the terms and conditions set forth in this Agreement, on the Closing Date, the Holder shall surrender to the Company the Original Securities and, in exchange therefor, the Company shall issue and deliver to the Holder the Exchange Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1 <u>Closing</u>. On the Closing Date (as defined below), the Company shall issue and deliver (or cause to be issued and delivered) the Exchange Securities to the Holder, or in the name of a custodian or nominee of the Holder, or as otherwise requested by the Holder in writing and, subject to <u>Section 4.1</u>, and the Holder shall surrender and deliver (or cause to be surrendered and delivered) to the Company the Original Securities (including any rights associated with such Original Securities) for cancellation and the Original Securities shall be deemed to be surrendered, delivered and cancelled on the Company's stock transfer books. The closing of the Exchange shall occur effective as of June 1, 2025, or as soon thereafter as the parties hereto may mutually agree in writing (the "<u>Closing Date</u>"), subject to the provisions of <u>Section 4</u> and <u>Section 5</u> herein; *provided, however*, that the Closing Date shall occur, and Company shall be obligated to issue and deliver (or cause to be issued and delivered) the Exchange Securities to the Holder as specified in this <u>Section 1.1</u>, no later than the standard settlement period on the Company's primary Trading Market (as defined below).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2 <u>Release of Prior Reserves</u>. Immediately upon issuance and delivery of the Exchange Securities, the Holder hereby authorizes the release of any reserves of shares of the Company's common stock, $0.001 par value per share (the "<u>Common Stock</u>"), in connection with the Original Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3 <u>[Reserved]</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.4 <u>Section 3(a)(9)</u>. Assuming the accuracy of the representations and warranties of each of the Company and the Holder set forth in <u>Sections 2</u> and <u>3</u> of this Agreement, the parties hereto acknowledge and agree that the purpose of such representations and warranties is, among other things, to ensure that the Exchange qualifies as an exchange of securities under Section 3(a)(9) of the Securities Act.

Section 2. <u>Representations and Warranties of the Company</u>. The Company represents and warrants to the Holder that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 <u>Organization and Qualification</u>. The Company is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization. The Company is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability of this Agreement or any other Transaction Document, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company, taken as a whole, or (iii) a material adverse effect on the Company's ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a "<u>Material Adverse Effect</u>") and, to the best of the Company's knowledge, no proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2 <u>Authorization; Enforcement</u>. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, the board of directors of the Company or the Company's shareholders in connection herewith or therewith. This Agreement and each other Transaction Document to which it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors' rights generally; (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies; and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3 <u>Issuance of Exchange Securities</u>. The issuance the Exchange Securities by the Company has been duly authorized. The shares of Common Stock into which the Exchange Securities may be converted to from time to time (the "<u>Exchange Shares</u>"), have been duly authorized and when issued in accordance with the terms of the Exchange Securities, shall be validly issued, fully paid and nonassessable shares of Common Stock, and shall be free and clear of all liens, charges, taxes, security interests, encumbrances, rights of first refusal, preemptive or similar rights and other encumbrances, including without limitation under the Company's articles of incorporation, as amended (the "<u>Articles of Incorporation</u>"), its bylaws (the "<u>Bylaws</u>"). The Exchange Securities shall not bear any restrictive legend and the Holder may sell the Exchange Shares pursuant to an applicable exemption from registration under the Securities Act or pursuant to an effective registration statement. Upon issuance and delivery in accordance herewith, the issuance by the Company of the Exchange Securities in exchange for the Original Securities is exempt from the registration requirements of the Securities Act under Section 3(a)(9) of the Securities Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4 <u>No Conflicts</u>. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents and the consummation by it of the transactions contemplated hereby and thereby do not and will not: (i) conflict with or violate any provision of the Company's or any of the Company's subsidiary's (each, a "<u>Subsidiary</u>") articles or certificate of incorporation, bylaws or other organizational or charter documents; (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any options, contracts, agreements, liens, security interests, or other encumbrances ("<u>Liens</u>") upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected; or (iii) conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5 <u>Acknowledgment Regarding the Exchange</u>. The Company acknowledges and agrees that the Holder is acting solely in the capacity of an arm's length third party with respect to this Agreement and the other Transaction Documents and the transactions contemplated hereby and thereby. The Company further acknowledges the Holder is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement and the other Transaction Documents and the transactions contemplated hereby and thereby, and any advice given by the Holder or any of its representatives or agents in connection with this Agreement or any other Transaction Document is merely incidental to the Exchange.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.6 <u>No Commission; No Other Consideration</u>. The Company has not paid or given, and has not agreed to pay or give, directly or indirectly, any commission or other remuneration for soliciting the Exchange. The Exchange Securities are being issued exclusively in exchange for the Original Securities and no other consideration has or will be paid for the Exchange Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.7 <u>Section 3(a)(9) Representation</u>. The Company has not, nor has any person acting on its behalf, directly or indirectly made any offers or sales of any security or solicited any offers to buy any security under circumstances that would cause the Exchange and the issuance of the Exchange Securities pursuant to this Agreement to be integrated with prior offerings by the Company for purposes of the Securities Act which would prevent the Company from delivering the Exchange Securities to the Holder pursuant to Section 3(a)(9) of the Securities Act, nor will the Company take any action or steps that would cause the Exchange, issuance and delivery of the Exchange Securities to be integrated with other offerings to the effect that the delivery of the Exchange Securities to the Holder would be seen not to be exempt pursuant to Section 3(a)(9) of the Securities Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.8 <u>No Third-Party Advisors</u>. The Company has not engaged any third parties to assist in the solicitation with respect to the Exchange.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.9 <u>Subsidiaries</u>. All of the direct and indirect Subsidiaries of the Company are set forth in <u>Schedule 2.9</u>. Except as may be set forth in the <u>Schedule 2.9</u>, the Company owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary free and clear of any Liens, and all of the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.10 <u>Filings, Consents and Approvals</u>. Other than for any filings with OTCQB, OTCQX, or the Pink Open Market (collectively, the "<u>OTC</u>"), any filings required to be made with the U.S. Securities and Exchange Commission (the "<u>Commission</u>") pursuant to the Exchange Act or any state securities commission in connection with the transactions contemplated by this Agreement and any other Transaction Document, the Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or any natural person, firm, partnership, association, corporation, company, trust business trust or other entity (each, a "<u>Person</u>") in connection with the execution, delivery and performance by the Company of the Transaction Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.11 <u>Capitalization</u>. The capitalization of the Company is as set forth in <u>Schedule 2.11</u>. Except as set forth in the <u>Schedule 2.11</u>, No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents. Except as set forth on <u>Schedule 2.11</u>, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock, options or any securities of the Company which would entitle the holder thereof to acquire at any time shares of Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, shares of Common Stock. The issuance of the Exchange Securities will not obligate the Company to issue shares of Common Stock or other securities to any Person and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities; provided, however, except as explicitly provided herein, such waiver applies to the Exchange Securities and no other waivers are granted nor shall this provision impact the rights of any holder subsequent to this exchange. All of the outstanding shares of capital stock of the Company have been duly authorized and are validly issued, fully paid and nonassessable, and none of such outstanding shares were issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. There are no shareholders' agreements or other similar agreements with respect to the Company's capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company's shareholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.12 <u>DTC Eligibility</u>. The Company, through its transfer agent, currently participates in The Depository Trust Company ("<u>DTC</u>") Fast Automated Securities Transfer ("<u>FAST</u>") Program.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.13 <u>Litigation</u>. Other than as set forth in the <u>Schedule 2.13</u>, there is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an "<u>Action</u>") which (i) adversely affects or challenges the legality, validity or enforceability of any Transaction Document or the Exchange Securities or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.14 <u>Regulatory Permits</u>. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses (each, a "<u>Material Permit</u>"), except where the failure to possess such Material Permits could not reasonably be expected to result in a Material Adverse Effect, and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or modification of any Material Permit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.15 <u>Labor Relations</u>. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company, which could reasonably be expected to result in a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.16 <u>Title to Assets</u>. The Company and the Subsidiaries have good and marketable title in fee simple to all real property (to the extent owned by them) and good and marketable title in all personal property (to the extent owned by them) that is material to the business of the Company and the Subsidiaries, in each case free and clear of all Liens, except for (i) Liens as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries, and (ii) Liens for the payment of federal, state or other taxes, for which appropriate reserves have been made therefor in accordance with GAAP and, the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company and the Subsidiaries are in compliance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.17 <u>Insurance</u>. To the extent that the Company and the Subsidiaries are insured, the Company and Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged. Neither the Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage (to the extent such coverage exists) as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.18 <u>Certain Fees</u>. No brokerage or finder's fees or commissions are or will be payable by the Company or any Subsidiaries to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.19 <u>Investment Company</u>. The Company is not, and is not an Affiliate of, and immediately after consummation of the transactions contemplated hereunder, will not be or be an Affiliate of, an "investment company" within the meaning of the Investment Company Act of 1940, as amended. The Company shall conduct its business in a manner so that it will not become an "investment company" subject to registration under the Investment Company Act of 1940, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.20 <u>No Integrated Offering</u>. Assuming the accuracy of the Holder's representations and warranties set forth in <u>Section 3</u>, neither the Company, nor any of its Affiliates, nor any Person acting on their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause the Exchange to be integrated with prior offerings by the Company for purposes of (i) the Securities Act which would require the registration of any such securities under the Securities Act, or (ii) any applicable shareholder approval provisions of any trading markets or exchanges on which the Common Stock is listed, quoted or designated for trading on the date in question (each, a "<u>Trading Market</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.21 <u>Office of Foreign Assets Control</u>. Neither the Company nor any Subsidiary nor, to the Company's knowledge, any director, officer, agent, employee or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.22 <u>Disclosure</u>. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company confirms that neither it nor any other Person acting on its behalf has provided the Holder or its agents or counsel with any information that it believes constitutes or might constitute material, non-public information. The Company understands and confirms that the Holder will rely on the foregoing representation in effecting transactions in securities of the Company. All of the disclosure furnished by or on behalf of the Company to the Holder regarding the Company and the Subsidiaries, their respective businesses and the transactions contemplated hereby, including any Disclosure Schedules to this Agreement, is true and correct and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. The press releases disseminated by the Company during the twelve (12) months preceding the date of this Agreement taken as a whole do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made and when made, not misleading. The Company acknowledges and agrees that the Holder makes no, nor has made, any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 3 hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.23 <u>Tax Status</u>. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, the Company and its Subsidiaries each (i) has made or filed all United States federal, state and local income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company or of any subsidiary know of no basis for any such claim.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.24 <u>Foreign Corrupt Practices</u>. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any agent or other person acting on behalf of the Company or any Subsidiary, has: (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity; (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds; (iii) failed to disclose fully any contribution made by the Company or any subsidiary (or made by any person acting on its behalf of which the Company is aware) which is in violation of law or (iv) violated in any material respect any provision of the Foreign Corrupt Practices Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.25 <u>Regulation M Compliance</u>. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the issuance or resale of any shares of Common Stock, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any Common Stock, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.26 <u>Bank Holding Company Act</u>. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company Act of 1956, as amended (the "<u>BHCA</u>") and to regulation by the Board of Governors of the Federal Reserve System (the "<u>Federal Reserve</u>"). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent or more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its Subsidiaries or Affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.27 <u>Money Laundering</u>. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the "<u>Money Laundering Laws</u>"), and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened.

Section 3. <u>Representations and Warranties of the Holder</u>. The Holder represents and warrants to the Company that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 <u>Ownership of the Original Securities</u>. The Holder is the legal and beneficial owner of the Original Securities. The Holder paid for the Original Securities and has continuously held the Securities since its purchase. The Holder owns the Original Securities outright and free and clear of any options, contracts, agreements, liens, security interests, or other encumbrances.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2 <u>No Public Sale or Distribution</u>. The Holder is acquiring the Exchange Securities in the ordinary course of business for its own account and not with a view toward, or for resale in connection with, the public sale or distribution thereof; *provided, however*, that by making the representations herein, the Holder does not agree to hold any of the Exchange Securities, for any minimum or other specific term and reserves the right to dispose of the Exchange Securities at any time in accordance with an exemption from the registration requirements of the Securities Act and applicable state securities laws. Except as contemplated herein, the Holder does not presently have any agreement or understanding, directly or indirectly, with any person to distribute, or transfer any interest or grant participation rights in, the Original Securities or the Exchange Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3 <u>Accredited Investor and Affiliate Status</u>. The Holder is an "accredited investor" as that term is defined in Rule 501 of Regulation D under the Securities Act. The Holder is not, and has not been, for a period of at least three (3) months prior to the date of this Agreement (a) an officer or director of the Company, (b) an "affiliate" of the Company (as defined in Rule 405 of the Securities Act) or (c) a "beneficial owner" of more than ten percent (10%) of the Common Stock (as defined for purposes of Rule 13d-3 of the Exchange Act).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.4 <u>Reliance on Exemptions</u>. The Holder understands that the Exchange is being made in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying in part upon the truth and accuracy of, and the Holder's compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Holder set forth herein in order to determine the availability of such exemptions and the eligibility of the Holder to complete the Exchange and to acquire the Exchange Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.5 <u>Information</u>. The Holder has been furnished with certain materials relating to the business, finances and operations of the Company and certain documentation relating to the Exchange which have been requested by the Holder. The Holder has been afforded the opportunity to ask questions of the Company. Neither such inquiries nor any other due diligence investigations conducted by the Holder or its representatives shall modify, amend or affect the Holder's right to rely on the Company's representations and warranties contained herein. The Holder acknowledges that not all of the documents the Company is required have timely filed under Sections 13(a), 14(a) or 15(d) of the Exchange Act have been filed and/or posted on the Commission's EDGAR site, and the Holder has not relied on any statement of the Company not contained in such documents or in the Transaction Documents in connection with the Holder's decision to enter into this Agreement and the Exchange. Additionally, the Holder is aware that the Company may be in default of certain of its contractual obligations. The Holder further acknowledges that it has been provided and have reviewed a copy of the draft Certificate of Designation and the Term Sheet.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.6 <u>Risk</u>. The Holder understands that its investment in the Exchange Securities involves a high degree of risk. The Holder is able to bear the risk of an investment in the Exchange Securities including, without limitation, the risk of total loss of its investment. The Holder has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision with respect to the Exchange.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.7 <u>No Governmental Review</u>. The Holder understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement in connection with the Exchange or the fairness or suitability of the investment in the Exchange Securities nor have such authorities passed upon or endorsed the merits of the Exchange Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.8 <u>Organization; Authorization</u>. The Holder is either an individual or an entity duly organized, validly existing and in good standing under the laws of its jurisdiction of organization or formation, as the case may be, and has the requisite corporate or other power and authority to enter into and perform its obligations under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.9 <u>Validity; Enforcement</u>. This Agreement has been duly and validly authorized, executed and delivered on behalf of the Holder and shall constitute the legal, valid and binding obligations of the Holder enforceable against the Holder in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors' rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law. If applicable, the execution, delivery and performance of this Agreement by the Holder and the consummation by the Holder of the transactions contemplated hereby (including, without limitation, the irrevocable surrender of the Original Securities) will not result in a violation of the organizational documents of the Holder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.10 <u>Prior Investment Experience</u>. The Holder acknowledges that it has prior investment experience, including investment in securities of the type being exchanged, including the Original Securities and the Exchange Securities, and has read all of the documents furnished or made available by the Company to it and is able to evaluate the merits and risks of such an investment on its behalf, and that it recognizes the highly speculative nature of this investment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.11 <u>Tax Consequences</u>. The Holder acknowledges that the Company has made no representation regarding the potential or actual tax consequences for the Holder which will result from entering into the Agreement and from consummation of the Exchange. The Holder acknowledges that it bears complete responsibility for obtaining adequate tax advice regarding the Agreement and the Exchange.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.12 <u>No Registration, Review or Approval</u>. The Holder acknowledges, understands and agrees that the Exchange Securities are being exchanged for the Original Securities hereunder pursuant to an exchange offer exemption under Section 3(a)(9) of the Securities Act.

Section 4. <u>Conditions Precedent to Obligations of the Company</u>. The obligation of the Company to consummate the transactions contemplated by this Agreement is subject to the satisfaction of each of the following conditions, provided that these conditions are for the Company's sole benefit and may be waived by the Company at any time in its sole discretion by providing the Holder with prior written notice thereof:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 <u>Delivery</u>. The Holder shall have delivered to the Company the Original Securities or otherwise acknowledged in writing that it will deliver the Original Securities within ten (10) calendar days hereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 <u>No Prohibition</u>. No order of any court, arbitrator, or governmental or regulatory authority shall be in effect which purports to enjoin or restrain any of the transactions contemplated by this Agreement; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3 <u>Representations</u>. The accuracy in all material respects when made and on the Closing Date of the representations and warranties of the Holder contained herein (unless as of a specific date therein).

Section 5. <u>Conditions Precedent to Obligations of the Holder</u>. The obligation of the Holder to consummate the transactions contemplated by this Agreement is subject to the satisfaction of each of the following conditions, provided that these conditions are for the Holder's sole benefit and may be waived by the Holder at any time in its sole discretion by providing the Company with prior written notice thereof:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 <u>No Prohibition</u>. No order of any court, arbitrator, or governmental or regulatory authority shall be in effect which purports to enjoin or restrain any of the transactions contemplated by this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 <u>Representations</u>. The representations and warranties of the Company shall be true and correct in all material respects when made and on the Closing Date (unless as of a specific date therein), except for such representations and warranties contained herein that are qualified by "materiality" or "Material Adverse Effect," in which case such representations and warranties of the Company shall be true and correct in all respects when made and on the Closing Date (unless as of a specific date therein);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3 <u>All Obligations</u>. All obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been performed; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3 <u>No Suspension</u>. From the date hereof to the Closing Date, trading in the Common Stock shall not have been suspended by the Commission or any Trading Market and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg L.P. shall not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported by such service, or on any trading market, nor shall a banking moratorium have been declared either by the United States or New York State authorities nor shall there have occurred any material outbreak or escalation of hostilities or other national or international calamity of such magnitude in its effect on, or any material adverse change in, any financial market which, in each case, in the reasonable judgment of the Holder makes it impracticable or inadvisable to consummate the Exchange and accept the Exchange Securities on the Closing Date.

Section 6. <u>Other Agreements between the Parties</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1 <u>Integration</u>. The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the Exchange of the Original Securities in a manner that would require the registration under the Securities Act of the sale of the Exchange Securities or that would be integrated with the offer of the Exchange Securities for purposes of the rules and regulations of any Trading Market such that it would require shareholder approval prior to the closing of such other transaction unless shareholder approval is obtained before the closing of such subsequent transaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2 <u>Replacement of Securities</u>. If any certificate or instrument evidencing any of the Exchange Securities is mutilated, lost, stolen or destroyed, the Company shall convey or cause to be conveyed in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement Securities.

Section 7. <u>Governing Law; Jurisdiction; Waiver of Jury Trial</u>. This Agreement shall be construed under the laws of the state of New York, without regard to principles of conflicts of law or choice of law that would permit or require the application of the laws of another jurisdiction. The Company and the Holder each hereby agrees that all actions or proceedings arising directly or indirectly from or in connection with this Agreement shall be litigated only in the Supreme Court of the State of New York or the United States District Court for the Southern District of New York located in New York County, New York. The Company and the Holder each consents to the exclusive jurisdiction and venue of the foregoing courts and consents that any process or notice of motion or other application to either of said courts or a judge thereof may be served inside or outside the State of New York or the Southern District of New York by generally recognized overnight courier or certified or registered mail, return receipt requested, directed to such party at its or his address set forth below (and service so made shall be deemed "personal service") or by personal service or in such other manner as may be permissible under the rules of said courts. THE COMPANY AND THE HOLDER EACH HEREBY WAIVES ANY RIGHT TO A JURY TRIAL IN CONNECTION WITH ANY LITIGATION PURSUANT TO THIS AGREEMENT.

Section 8. <u>Counterparts</u>. This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party hereto and delivered to the other party hereto; provided that a facsimile or electronic signature shall be considered due execution and shall be binding upon the signatory thereto with the same force and effect as if the signature were an original, not a facsimile or electronic signature, as applicable.

Section 9. <u>Headings</u>. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement.

Section 10. <u>Severability</u>. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction.

Section 11. <u>No Strict Construction</u>. The language used in this Agreement will be deemed to be the language chosen by the parties hereto to express their mutual intent, and no rules of strict construction will be applied against any party hereto.

Section 12. <u>Entire Agreement; Amendments</u>. This Agreement supersedes all other prior oral or written agreements between the Holder, the Company, their Affiliates and Persons acting on their behalf with respect to the matters discussed herein, and this Agreement contains the entire understanding of the parties hereto with respect to the matters covered herein. No provision of this Agreement may be amended other than by an instrument in writing signed by the Company and the Holder. No provision hereof may be waived other than by an instrument in writing signed by the party against whom enforcement is sought.

Section 13. <u>Notices</u>. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (a) upon receipt, when delivered personally; (b) upon receipt, when sent by electronic mail (provided confirmation of transmission is electronically generated and kept on file by the sending party); or (c) one calendar day (excluding Saturdays, Sundays, and national banking holidays) after deposit with an overnight courier service, in each case properly addressed to the party to receive the same.

The addresses and e-mail addresses for such communications shall be:

If to the Company:

Transportation and Logistics Systems, Inc.

Attn: Sebastian Giordano

5500 Military Trail, Suite 22-357

Jupiter, Florida 33458<br> E-mail: Sebastian.Giordano@tlss-inc.com

With a copy to:

Sullivan & Worcester LLP

Attn: David Danovitch, Esq.

1251 Avenue of the Americas

New York, New York 10020

Email: ddanovitch@sullivanlaw.com

If to the Holder:

to the address set forth on its signature page to this Agreement.

or to such other address, email address and/or facsimile number and/or to the attention of such other person as the recipient party has specified by written notice given to each other party five (5) calendar days prior to the effectiveness of such change.

Section 14. <u>Successors and Assigns</u>. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, including any purchasers of the Exchange Securities. Subject to its compliance with applicable federal and state securities laws, the Holder may assign some or all of its rights hereunder without the consent of the Company, in which event such assignee shall be deemed to be the Holder hereunder with respect to such assigned rights.

Section 15. <u>No Third-Party Beneficiaries</u>. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

Section 16. <u>Survival of Representations</u>. The representations and warranties of the Company and the Holder contained in <u>Sections 2</u> and <u>3</u>, respectively, will survive the closing of the transactions contemplated by this Agreement.

Section 17. <u>Securities Law Disclosure; Publicity</u>. The Company shall, by 5:30 pm (New York City Time) on the date hereof (or if this Agreement is executed after 5:30 pm (New York City Time) on the date hereof, no later than 9:30 am (New York City Time) on the next Trading Day), issue a press release and/or file a Form 8-K disclosing the material terms of the transactions contemplated hereby and attaching this Agreement, to the extent that it is required to be filed under the Exchange Act, that has not previously been filed with the Commission by the Company as an exhibit to such filing. From and after the release of such disclosure, the Company represents to the Holder that it shall have publicly disclosed all material, non-public information delivered to the Holder by the Company. In addition, effective upon the issuance of such disclosure, the Company acknowledges and agrees that any and all confidentiality or similar obligations under any agreement, whether written or oral, between the Company, on the one hand, and the Holder or any of their Affiliates on the other hand, shall terminate and be of no further force or effect. Without the prior written consent of the Holder (which may be granted or withheld in the Holder's sole discretion), except as required by applicable law, the Company shall not (and shall cause each of its Subsidiaries and Affiliates to not) disclose the name of the Holder in any filing, announcement, release or otherwise. The Company understands and confirms that the Holder shall be relying on the foregoing covenant in effecting transactions in securities of the Company.

Section 18. <u>[Reserved]</u>.

Section 19. <u>Most Favored Nation</u>. The Company hereby represents and warrants as of the date hereof and covenants and agrees from and after the date hereof until three (3) months following the date hereof (the "<u>MFN Period</u>"), that none of the terms offered to any other holder of the Company's preferred stock pursuant to any other securities exchange agreement (or any amendment, modification or waiver thereof including other exchange agreements signed concurrently with this Agreement), is or will be more favorable to such other holder(s) of the Company's securities than those of the Holder and this Agreement. If, and whenever on or after the date hereof during the MFN Period, the Company enters into another Exchange Agreement (or any amendment, modification or waiver with any other holder of warrants), then (i) the Company shall provide notice thereof to the Holder promptly following the occurrence thereof and (ii) the terms and conditions of this Agreement shall be, without any further action by the Holder or the Company, automatically amended and modified in an economically and legally equivalent manner such that the Holder shall receive the benefit of the more favorable terms and/or conditions (as the case may be) set forth in such other Agreement, provided that upon written notice to the Company at any time the Holder may elect not to accept the benefit of any such amended or modified term or condition, in which event the term or condition contained in this Agreement shall apply to the Holder as it was in effect immediately prior to such amendment or modification as if such amendment or modification never occurred with respect to the Holder. For the avoidance of doubt, this provision shall not apply to any new classes of preferred stock issued after the date of this Agreement nor to any other securities that are outstanding or may become outstanding after the date of this Agreement.

Section 20. <u>[Reserved]</u>.

Section 21. <u>Listing</u>. The Company shall promptly secure the listing or designation for quotation (as the case may be) of all of the Exchange Shares upon each national securities exchange and automated quotation system, if any, upon which the Common Stock is then listed or designated for quotation (as the case may be) (subject to official notice of issuance) and shall maintain such listing or designation for quotation (as the case may be) of all Exchange Shares from time to time issuable under the terms of this Agreement and any other Transaction Documents on such national securities exchange or automated quotation system. The Company shall maintain the Common Stock's listing or authorization for quotation (as the case may be) on any one (or more) of The New York Stock Exchange, the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, or the OTC (each, an "<u>Eligible Market</u>"). Neither the Company nor any of its Subsidiaries shall take any action which could be reasonably expected to result in the delisting or suspension of the Common Stock so that they are not listed or admitted for trading on any Eligible Market. The Company shall pay all fees and expenses in connection with satisfying its obligations under this Section 21.

Section 22. <u>Further Assurances</u>. Each party hereto shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party hereto may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and any other Transaction Documents and the consummation of the transactions contemplated hereby and thereby.

[***Signature Pages Follow***]

IN WITNESS WHEREOF, the parties hereto have executed this Exchange Agreement as of the date first written above.

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| | |
|:---|:---|
| **TRANSPORTATION AND LOGISTICS SYSTEMS, INC.** | **TRANSPORTATION AND LOGISTICS SYSTEMS, INC.** |
| By: |  |
| Name: | Sebastian Giordano |
| Title: | Chief Executive Officer |

---

[Company Signature Page to the Exchange Agreement]

AGREED TO AND ACCEPTED:

**[●]**

By: <br> Name: <br> Title:

Notice and Information to: [●]

[Holder Signature Page to the Exchange Agreement]

**<u>Exhibit A</u>**

**Remaining Original Securities**

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| | | | | |
|:---|:---|:---|:---|:---|
| **Warrant** | **Issue Date** | **Expiration Date** | **# of Underlying Shares** | **Exercise Price** |

---

**<u>Exhibit B</u>**

**As Filed Certificate of Designation for Series J Senior Convertible Preferred Stock**

Please see [Exhibit 3.1](https://www.sec.gov/Archives/edgar/data/1463208/000164117225008979/ex3-1.htm) to our Current Report on Form 8-K filed on May 7, 2025.

**<u>Exhibit C</u>**

**SUMMARY OF TERMS OF THE SERIES J SENIOR CONVERTIBLE PREFERRED STOCK**

*The purpose of this Summary of Terms (this "Term Sheet") is to summarize the terms and rights of the Series J Senior Convertible Preferred Stock (the "Preferred Stock") of Transportation and Logistics Systems, Inc. This Term Sheet is intended only to provide the basic terms of the Preferred Stock, and shall not be deemed, to be the definitive terms of the Preferred Stock. For more details, please see the as-filed Certificate of Designation of Preferences, Rights and Limitations of Series J Senior Convertible Preferred Stock filed as Exhibit 3.1 of our Current Report on Form 8-K filed with the Securities and Exchange Commission on May 7, 2025.*

**SUMMARY OF TERMS**

**FOR**

**SERIES J SENIOR CONVERTIBLE PREFERRED STOCK**

**OF**

**TRANSPORTATION AND LOGISITICS SYSTEMS, INC.**

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| | |
|:---|:---|
| ***Issuer:*** | Transportation and Logistics Systems, Inc. (the "***Company***"). |
| ***Authorized:*** | 1 million of shares of Series J Senior Convertible Preferred Stock (the "***Preferred Stock***"), convertible into shares of the Company's common stock (the "***Common Stock***"). |
| ***Stated Value:*** | $100 per share of Preferred Stock. |
| ***Redemption:*** | Upon the occurrence of any trigger event, each holder shall have the right to cause the Company to redeem all or part of their Preferred Stock at a price per share equal to 110% of the stated value. Trigger events include, but are not limited to, (i) the failure to maintain listing on an eligible trading market for five consecutive trading days, (ii) failure to reserve sufficient number of Common Stock in case of full conversion of the Preferred Stock, and (iii) insolvency or bankruptcy. |
| ***Conversion:*** | At any time from and after the original issue date, subject to (i) the Common Stock beneficial ownership limitation of 4.99%, and (ii) limitation on converting more than 10% of the trading volume of the Common Stock on any given day except for if the conversion price is greater than $0.40 per share of Common Stock. |
| ***Conversion Price:*** | The Preferred Stock can be converted to Common Stock at any time for the conversion price of $0.001 per share, subject to adjustment including anti-dilution for subsequent equity issuances. |
| ***Liquidation Preference:*** | The Preferred Stock shall have a liquidation preference equal to and shall be entitled to receive out of the assets of the Company an amount in cash equal to 120% of the aggregate stated value of all shares of Series J Preferred Stock held by each holder, respectively, in addition to all accrued and unpaid dividends, prior and in preference to the Common Stock or any other series of preferred stock. |
| ***Dividends:*** | The Preferred Stock dividend is cumulative and accruing at the rate of ten percent (10%) per annum, payable at the option of the Company in shares of Common Stock or in cash, and shall be computed on the basis of a 360-day year and twelve 30-day months. Dividend payments are paid every six months beginning June 30, 2025. |
| ***Voting:*** | The Preferred Stock shall have voting rights on an as converted basis. Further, as long as any shares of Preferred Stock are outstanding, the Company shall not, without the affirmative vote of holders of a majority of the then-outstanding shares of Preferred Stock, (i) alter or change adversely the powers, preferences or rights given to the Preferred Stock or alter or amend the Certificate of Designation for the Preferred Stock, (ii) amend the Company's Articles of Incorporation or other charter documents of the Company in a manner adverse to the holders of Preferred Stock, (iii) increase the number of authorized Series J Preferred Stock, or (iv) enter into any agreement with respect to (i) – (iii). |

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**SCHEDULE I TO EXHIBIT 10.10 FORM OF EXCHANGE AGREEMENT (WARRANTS ONLY)**

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| | | | | |
|:---|:---|:---|:---|:---|
| **Holder** | **Number of Warrants to be Released** | **Number of Warrants to be Released** | **Number of Shares of Series J Preferred to be Issued** | **Number of Shares of Series J Preferred to be Issued** |
| MBS Gloeq Corp |  | 20000000 |  | 18 |
| AES Capital Management LLC |  | 10000000 |  | 9 |
| GS Capital Partners, LLC |  | 25000000 |  | 22 |

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## Exhibit 31.1

**Exhibit 31.1**

**<u>CERTIFICATION</u>**

**Pursuant to Rules 13a-14(a) and 15d-14(a)**

**Under the Securities Exchange Act of 1934**

**As adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002**

I, Sebastian Giordano, certify that:

1. I
 have reviewed this Quarterly Report on Form 10-Q of Transportation and Logistics Systems, Inc. (the "registrant");

2. Based
 on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
 to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to
 the period covered by this report;

3. Based
 on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
 respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in
 this report;

4. I
 am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant
 and have:

&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed
 such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
 to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others
 within those entities, particularly during the period in which this report is being prepared;

(b) Designed
 such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
 supervision, 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;

(c) Evaluated
 the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about
 the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation;
 and

(d) Disclosed
 in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's
 most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected,
 or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. I
 have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors
 and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;(a) All
 significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
 reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information;
 and

(b) Any
 fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's
 internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Dated: August 14, 2025 | Signature: | */s/ Sebastian Giordano* |
|  |  | Sebastian Giordano |
|  |  | Chief Executive Officer and Chief Financial Officer |
|  |  | (Principal Executive Officer and Principal Financial Officer) |

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## Exhibit 32.1

**Exhibit 32.1**

**<u>CERTIFICATION</u>**

**Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**

**(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)**

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), the undersigned principal executive officer and principal financial officer of Transportation and Logistics Systems, Inc. (the "Company") does hereby certify, to such officer's knowledge, that:

The Quarterly Report on Form 10-Q for the period ended June 30, 2025 (the "Form 10-Q") of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| | | |
|:---|:---|:---|
| Dated: August 14, 2025 | By: | */s/ Sebastian Giordano* |
|  |  | Sebastian Giordano |
|  |  | Chief Executive Officer and Chief Financial Officer<br> (Principal Executive Officer and Principal Financial Officer) |

---

The foregoing certification is being furnished solely pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) and is not being filed as part of Form 10-Q or as a separate disclosure document.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.