Transportation and Logistics Systems (TLSSD) Risk Analysis

In the future, we may seek additional capital through a combination of private and public equity offerings and debt financings. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms may include liquidation or other preferences that adversely affect your rights as a stockholder. Debt financing, if available, would result in increased fixed payment obligations and may involve agreements that include covenants limiting or restricting our ability to take specific actions such as incurring additional debt, making capital expenditures, or declaring dividends.

We have entered into preferred stock securities purchase agreements that contain covenants that restrict our ability to, among other things: - make certain payments, including the payment of dividends;   - redeem or repurchase our capital stock;   - incur additional indebtedness and issue additional preferred stock;   - make investments or create liens;   - merge or consolidate with another entity;   - sell certain assets; and   - enter into transactions with affiliates.

Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the "Exchange Act") defines a "shell company" as a registrant that has no or nominal operations and either no or nominal assets, assets consisting solely of cash and cash equivalents, or assets consisting of any amount of cash and cash equivalents and nominal other assets. As of the date of this Annual Report, the Company has no revenue-generating operations, one employee, and assets consisting of approximately $11,246 in cash. These characteristics cause the Company to meet the definition of a shell company. Our status as a shell company materially restricts our ability to raise capital from investors who require shorter liquidity timelines, may deter potential business combination partners, and imposes ongoing regulatory burdens that may be difficult for us to satisfy given our limited resources and personnel. There can be no assurance that the Company will be able to cease being a shell company within a timeframe, or at all, that would be acceptable to current or prospective investors.

Rule 144 under the Securities Act of 1933, as amended (the "Securities Act"), provides a safe harbor from the registration requirements of the Securities Act for the resale of restricted and control securities. However, Rule 144 is not available for the resale of securities initially issued by a shell company, or a former shell company, unless and until: (i) the issuer is no longer a shell company; (ii) the issuer has been subject to the reporting requirements of Section 13 or Section 15(d) of the Exchange Act for at least twelve months; (iii) the issuer has filed all required reports under Section 13 or Section 15(d) of the Exchange Act during the preceding twelve months; and (iv) at least one year has elapsed from the date that the issuer filed current "Form 10 information" with the SEC reflecting its status as an entity that is no longer a shell company. As a result, for so long as we remain a shell company, holders of our restricted shares of common stock will have no ability to resell their shares pursuant to Rule 144, regardless of how long they have held such shares or the volume of shares involved. Even after we cease to be a shell company, holders of restricted shares will not be able to rely on Rule 144 until all four of the conditions described above have been satisfied. This restriction significantly impairs the liquidity available to existing stockholders holding restricted shares and may make it substantially more difficult for the Company to attract future investors who would otherwise rely on the Rule 144 safe harbor for resale of their securities.

Investors and market participants are generally aware of the restrictions and risks associated with shell companies, including the limitations on the use of Rule 144 and the restriction on the use of Form S-1 registration statements described above. This awareness may cause some investors to avoid purchasing shares of our common stock in the secondary market, reduce the overall demand for and liquidity of our common stock, and further depress the already limited trading market that exists for our shares. Our common stock is currently traded on the OTCID Basic Market under the symbol "TLSS," and there can be no assurance that the trading market for our shares will improve or be sustained. A reduced investor base, combined with the regulatory restrictions associated with our shell company status, may result in greater volatility in the trading price of our common stock, increased difficulty in selling shares at or above the price at which they were acquired, and a higher risk of loss of the entire value of your investment.

We were previously quoted on the OTC PINK beginning on August 21, 2022, but were downgraded to the OTC Expert Market on July 17, 2024. As of March 30, 2026, our shares of common stock are trading on the OTCID basic market. There is currently a trading market for our common stock, but our common stock has traded in recent years only on a limited basis. Although there is a trading market for our common stock, there are no assurances that trading activity or volume will be sustained or will increase.

The market price for shares of our common stock may be significantly affected by factors such as variations in quarterly and yearly operating results, general trends in the transportation and logistics industry, and changes in state or federal regulations affecting us and our industry. Furthermore, in recent years the stock market has experienced extreme price and volume fluctuations that are unrelated or disproportionate to the operating performance of the affected companies. Such broad market fluctuations may adversely affect the market price of our common stock if a market for it develops.

In addition to changes to market prices based on our results of operations and the factors discussed elsewhere in this "Risk Factors" section, the market price of and trading volume for our common stock may change for a variety of other reasons, not necessarily related to our actual operating performance. The capital markets have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. These broad market fluctuations may adversely affect the trading price of our common stock. In addition, the average daily trading volume of the securities of small companies can be very low, which may contribute to future volatility. Factors that could cause the market price of our common stock to fluctuate significantly include: - the results of operating and financial performance and prospects of other companies in our industry;   - strategic actions by us or our competitors, such as acquisitions or restructurings;   - the public's reaction to our press releases, media coverage and other public announcements, and filings with the SEC;   - lack of securities analyst coverage or speculation in the press or investment community about us or opportunities in the markets in which we compete;   - changes in government policies in the United States;   - changes in earnings estimates or recommendations by securities or research analysts who track our common stock or failure of our actual results of operations to meet those expectations;   - dilution caused by the conversion into common stock of preferred shares and exercise of warrants;   - market and industry perception of our success, or lack thereof, in pursuing our growth strategy;   - changes in accounting standards, policies, guidance, interpretations, or principles;   - any lawsuit involving us or our services;   - arrival and departure of key personnel;   - sales of common stock by us, our investors, or members of our management team; and   - changes in general market, economic and political conditions in the United States and global economies or financial markets, including those resulting from natural or man-made disasters and armed conflicts. Any of these factors, as well as broader market and industry factors, may result in large and sudden changes in the trading volume of our common stock and could seriously harm the market price of our common stock, regardless of our operating performance. This may prevent stockholders from being able to sell their shares at or above the price they paid for shares of our common stock, if at all. In addition, following periods of volatility in the market price of a company's securities, stockholders often institute securities class action litigation against that company. Our involvement in any class action suit or other legal proceeding, including the existing lawsuits filed against us and described elsewhere in this report, could divert our senior management's attention, and could adversely affect our business, financial condition, results of operations and prospects.

The Financial Industry Regulatory Authority ("FINRA") has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.

Our Articles of Incorporation, as amended (the "Articles of Incorporation") authorizes the issuance of "blank check" preferred stock with designations, rights and preferences as may be determined from time to time by the Board. The Board is empowered, without stockholder approval, to issue a series of preferred stock with dividend, liquidation, conversion, voting or other rights which could dilute the interest of, or impair the voting power of, our common stockholders. The issuance of a series of preferred stock could be used as a method of discouraging, delaying or preventing a change in control. For example, it would be possible for the Board to issue preferred stock with voting or other rights or preferences that could impede the success of any attempt to change control of our Company.

The trading market for our common stock may depend in part on the research and reports that securities or industry analysts may publish about us or our business, our market and our competitors. We do not have any control over such analysts. If one or more such analysts downgrade or publish a negative opinion of our common stock, the common stock price would likely decline. If analysts do not cover us or do not regularly publish reports on us, we may not be able to attain visibility in the financial markets, which could have a negative impact on our common stock price or trading volume.

In order to raise additional capital, we may in the future offer additional shares of our Common Stock or other securities convertible into or exchangeable for our common stock at prices that may not be the same as the price per share as prior issuances of common stock. We may not be able to sell shares or other securities in any other offering at a price per share that is equal to or greater than the price per share previously paid by investors, the terms of certain of our outstanding securities may contain price protection features that allow holders of such securities to acquire the same number of shares of common stock at a lower price if certain events occur, and investors purchasing shares or other securities in the future could have rights superior to existing stockholders. The price per share at which we sell additional shares of our common stock or securities convertible into common stock in future transactions may be higher or lower than the prices per share for previous issuances of common stock or securities convertible into common stock paid by certain investors. You will incur dilution upon exercise of any outstanding stock options, warrants or upon the issuance of shares of common stock under our equity incentive programs. In addition, the issuance of the Shares, the issuance of shares of common stock pursuant to our outstanding securities, and any future sales of a substantial number of shares of our common stock in the public market, or the perception that such issuances or sales may occur, could adversely affect the price of our common stock. We cannot predict the effect, if any, that market sales of those shares of common stock or the availability of those shares for sale will have on the market price of our common stock.