Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

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 contain 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 2025 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 May 14, 2026, our shares of common stock are trading on the OTCID basic markets.

The Company ceased all remaining operations as of mid-February 2024. Prior to that, the Company and its Subsidiaries provided a full suite of asset-based logistics and transportation services, specializing in ecommerce fulfillment, last mile deliveries, two-person home delivery, mid-mile, and long-haul services. An asset-based delivery company, as compared to a non-asset-based delivery company, owns the majority of its transportation equipment, and employs the majority of its drivers. The Company and its Subsidiaries operated several warehouse locations located in New York, New Jersey, Connecticut, and Massachusetts.

On February 27, 2024, Cougar Express, filed a Chapter 7 bankruptcy petition in the State of New York under the United States Bankruptcy Code. The 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. The Company obtained financing to enable it to complete the preparation and review of the annual and interim financial statements through December 31, 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 2026 calendar year.

Between May 2025 and November 12, 2025, we entered into exchange agreements (the "Series J Exchange Agreements") with certain then current and former holders (the "Exchange Holders") of our Series E Convertible Preferred Stock (the "Series E Preferred"), Series G Convertible Preferred Stock (the "Series G Preferred") and warrants to purchase shares of our Common Stock (the "Exchanged Warrants"). Pursuant to the Series J Exchange Agreements, (i) the Exchange Holders exchanged an aggregate of 21,418 shares of Series E Preferred and accrued dividends of $192,776, and exchanged an aggregate of 406,500 shares of Series G Preferred and accrued dividends of $925,047, and (ii) we cancelled warrants to purchase up to an aggregate of 172,872 shares of Common Stock all in exchange for the issuance of an aggregate of 54,975 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 September 30, 2025, we entered into settlement agreements (the "Series J Settlement Agreements") with holders of our outstanding liabilities (the "2025 Creditors"), pursuant to which, the 2025 Creditors agreed to settle an aggregate of $3,688,149 in outstanding liabilities and accrued interest in exchange for an aggregate of 36,882 shares of Series J Preferred.

On October 15, 2025, we entered into settlement agreements (the "Board Settlement Agreements") with certain directors of the Company pursuant to which the directors settled an aggregate of $374,491 in outstanding liabilities, in exchange for the issuance of an aggregate of 3,785 shares of Series J Preferred. $337,042, which was netted against additional paid-in capital and accordingly, no gain or loss was recognized on these settlements.

On December 15, 2025, we entered into a settlement agreement (the "CEO Settlement Agreement") with Sebastian Giordano, with respect to certain outstanding liabilities (the "Outstanding Liabilities"). Pursuant to the CEO Settlement Agreement, Mr. Giordano agreed to settle an aggregate of $1,400,712 in Outstanding Liabilities in exchange for the issuance of an aggregate of 10,007 shares of the Company's Series J Preferred Stock.

In addition, we are also negotiating possible further restructuring of our remaining existing debts and obligations, as well as assessing the possibility of replacing our discontinued businesses and/or entering into new line(s) of business, whether by acquisition or otherwise. However, there can be no assurance that we will, in fact, be able to replace our former business and/or enter into new line(s) of business, or to do so profitably. The following discussion highlights the results of our operations and the principal factors that have affected the 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.

Recent events

On November 1, 2026 (the "Closing Date"), the Company completed the transactions contemplated by the Purchase Agreement. The Purchase Agreement was dated April 1, 2026 and was amended on June 1, 2026, July 7, 2026, August 19, 2026, September 22, 2026 and November 1, 2026 (the "Fifth Amendment"). It was also extended by a Notice of Extension of Closing Date dated July 31, 2026.

Under the Purchase Agreement, TLSSA merged with and into PGS in a reverse triangular merger, with PGS surviving. At closing, the following were exchanged and assigned to TLSSA:

	●	the Seller's 80% membership interest in PGS; and
	●	four U.S. patents owned by the Seller relating to nanotechnology for strengthening glass and glass products (the "Patents").

In exchange, the Company issued 47,500 shares of Series J Preferred Stock with a stated value of $100 per share, or an aggregate stated value of $4,750,000 (the "Merger Consideration"). The remaining 20% membership interest in PGS continues to be held by PGS's founder and Chief Executive Officer (the "PGS Minority Member"). TLSSA appoints all three managers of PGS.

At closing, TLSSA granted PGS a non-exclusive license to use the Patents in its business. The Seller assigned to PGS:

	●	the trademarks used in the PGS business, with the associated goodwill; and
	●	its distributor agreement with CB Nanoshield, LLC, under which PGS obtains C-Bond products.

PGS, which also does business as A1 Glass Coating, is based in Universal City, Texas. It is the North American distributor of C-Bond products. PGS markets, sells and installs nanotechnology-based glass-strengthening and ballistic-resistant window film systems. It sells directly to end users and through a nationwide network of authorized dealers and distributors. Its customers are principally educational institutions, government agencies, general contractors, and commercial and residential customers in the United States.

Our primary go-forward strategy is to become a leader in the safety and security technology industry. We expect to accomplish this goal, in part, by pursuing strategic acquisitions as a means of securing technologies and adding new markets in the United States, expanding its safety and security service offerings, adding talented management and operational employees, expanding and upgrading its technology platform and developing operational best practices. Moreover, one factor in assessing acquisition opportunities is the potential for subsequent organic growth post-acquisition.

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 right of use assets and related liabilities, estimates of current and deferred income taxes and deferred tax valuation allowances, the fair value of non-cash equity transactions, the valuation and measurement of liabilities of discontinued operations, and the value of claims against the Company. Of the above significant estimates, we do not consider any to be critical given the discontinued operations presentation.

Management believes the following critical accounting policies affect our more significant judgments and estimates used in the preparation of the consolidated financial statements.

Discontinued Operations

The Company has classified the related assets and liabilities associated with our logistics and transportation services business as discontinued operations in our consolidated balance sheets and the results of our logistics and transportation services business has been presented as discontinued operations in our consolidated statements of operations for all periods presented as the discontinuation of our business had a major effect on our operations and financial results.

RESULTS OF OPERATIONS

Our unaudited 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 recast to reflect our discontinued operations for all periods presented.

For the three and nine months ended September 30, 2026 compared with the three and nine months ended September 30, 2025

The following table sets forth our revenues, expenses and net loss for the three and nine months ended September 30, 2026 and 2025.

		Three Months Ended September 30,								Nine Months Ended September 30,
		2026				2025				2026				2025
Revenues		$	-			$	-			$	-			$	-
Operating expenses			340,414				395,368				801,372				1,117,014
Loss from operations			(340,414	)			(395,368	)			(801,372	)			(1,117,014	)
Other income (expenses), net			(5,465	)			517,549				(10,883	)			1,874,427
(Loss) income from continuing operations			(345,879	)			122,181				(812,255	)			757,413
Loss from discontinued operations			(89,742	)			(129,766	)			(269,225	)			(316,326	)
Net (loss) income			(435,621	)			(7,585	)			(1,081,480	)			441,087
Deemed contribution on exchange of equity instruments			-				-				-				800,380
Accrued dividends			(283,245	)			(253,880	)			(837,382	)			(471,566	)
Net (loss) income attributable to common shareholders		$	(718,866	)		$	(261,465	)		$	(1,918,862	)		$	769,901

Results of Operations

Revenue

For the three and nine months ended September 30, 2026 and 2025, we generated no revenues.

Operating Expenses

For the three months ended September 30, 2026, total operating expenses amounted to $340,414 compared to $395,368 for the three months ended September 30, 2025, a decrease of $54,954, or 13.9%, as reflected in the accompanying chart and described more fully below. For the nine months ended September 30, 2026, total operating expenses amounted to $801,372 compared to $1,117,014 for the nine months ended September 30, 2025, a decrease of $315,642, or 28.3%, as reflected in the accompanying chart and described more fully below.

For the three and nine months ended September 30, 2026 and 2025, operating expenses consisted of the following:

		Three Months Ended September 30,								Nine Months Ended September 30,
		2026				2025				2026				2025
Compensation and related benefits		$	134,999			$	192,006			$	424,997			$	512,686
Legal and professional Fees			191,796				190,552				360,799				587,813
General and administrative expenses			13,619				12,810				15,576				16,515
Total Operating Expenses		$	340,414			$	395,368			$	801,372			$	1,117,014

Compensation and related benefits

For the three months ended September 30, 2026, compensation and related benefits amounted to $134,999 as compared to $192,006 for the three months ended September 30, 2025, a decrease of $57,007, or 29.7%. During the three months ended September 30, 2026, the overall decrease in compensation and related benefits as compared to the three months ended September 30, 2025 was primarily attributable to a decrease in stock-based compensation of $40,000, a decrease in compensation and related benefits deferred to our chief executive officer of $14,507 and a decrease in deferred compensation deferred to our directors of $2,500.

For the nine months ended September 30, 2026, compensation and related benefits amounted to $424,997 as compared to $512,686 for the nine months ended September 30, 2025, a decrease of $87,689, or 17.1%. During the nine months ended September 30, 2026, the overall decrease in compensation and related benefits as compared to the nine months ended September 30, 2025 was primarily attributable to a decrease in stock-based compensation of $40,000 and a decrease in compensation deferred to our chief executive officer of $60,189, offset by an increase in deferred compensation deferred to our directors of $12,500.

Legal and professional fees

For the three months ended September 30, 2026, legal and professional fees were $191,796 as compared to $190,552 for the three months ended September 30, 2025, an increase of $1,244, or less than 1%.

For the nine months ended September 30, 2026, legal and professional fees were $360,799 as compared to $587,813 for the nine months ended September 30, 2025, a decrease of $227,014, or 38.6%, which was primarily attributable to a decrease in legal fees of $224,021 and a decrease in accounting and auditing fees of $63,281, offset by an increase in other professional fees of $60,288.

General and administrative expenses

General and administrative expenses include bank fees and other general and administrative expenses. For the three months ended September 30, 2026, general and administrative expenses were $13,619 as compared to $12,810 for the three months ended September 30, 2025, an increase of $809, or 6.3%.

General and administrative expenses include bank fees and other general and administrative expenses. For the nine months ended September 30, 2026, general and administrative expenses were $15,576 as compared to $16,515 for the nine months ended September 30, 2025, a decrease of $939, or 5.7%.

Loss from operations

For the three months ended September 30, 2026, loss from operations amounted to $340,414 as compared to $395,368 for the three months ended September 30, 2025, a decrease of $54,954, or 13.9%, primarily due to a decrease in compensation and other benefits of $57,007, an increase in legal and professional fees of $1,244, and an increase in general and administrative expenses of $809, as discussed above.

For the nine months ended September 30, 2026, loss from operations amounted to $801,372 as compared to $1,117,014 for the nine months ended September 30, 2025, a decrease of $315,642, or 28.3%, primarily due to a decrease in compensation and other benefits of $87,689, a decrease in legal and professional fees of $227,014, and a decrease in general and administrative expenses of $939, as discussed above.

Other income (expenses), net

Total other income (expenses) include interest expense and gain on debt extinguishment. For the three and nine months ended September 30, 2026 and 2025, other expenses, net consisted of the following:

		Three Months Ended September 30,								Nine Months Ended September 30,
		2026				2025				2026				2025
Interest expense		$	(5,465	)		$	(14,548	)		$	(10,883	)		$	(32,849	)
Interest expense - related parties			-				-				-				(106,563	)
Gain on debt extinguishment			-				532,097				-				2,013,839
Total Other Income (Expenses), net		$	(5,465	)		$	517,549			$	(10,883	)		$	1,874,427

For the three months ended September 30, 2026 and 2025, aggregate interest expense was $5,465 and $14,548, respectively, a decrease of $9,083, or 62.4%. For the nine months ended September 30, 2026 and 2025, aggregate interest expense was $10,883 and $139,412, respectively, a decrease of $128,529, or 92.2.%. The decrease in interest expense was primarily attributable to an overall decrease in related party and third-party notes payable, as all 2024 and 2025 notes payable and related accrued interest were converted to Series J Preferred Stock.

For the three and nine months ended September 30, 2025, in connection with the Series J Settlement Agreements and Series J Exchange Agreements, the Company recognized a gain on debt extinguishment of $532,097 and $1,998,839, respectively. Additionally, during the nine months ended September 30, 2025, we recognized a gain on other debt extinguishment of $15,000. We did not recognize any gain on debt extinguishment during the three and nine months ended September 30, 2026.

Loss from discontinued operations

In February 2024, we ceased operations of all logistic and transportation services subsidiaries. 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 nine months ended September 30, 2026 and 2025 related to discontinued operations.

		Three Months Ended September 30,								Nine Months Ended September 30,
		2026				2025				2026				2025
Revenues		$	-			$	-			$	-			$	-
Operating expenses			-				(24,024	)			-				(31,515	)
Interest expense			(89,742	)			(105,742	)			(269,225	)			(284,811	)
Loss from discontinued operations		$	(89,742	)		$	(129,766	)		$	(269,225	)		$	(316,326	)

The 2026 loss from discontinued operations consists entirely of interest accrued on defaulted debt of the discontinued subsidiaries.

Net loss

Due to factors discussed above, for the three months ended September 30, 2026, and 2025, net loss amounted to $435,621 and $7,585, respectively. For the three months ended September 30, 2026, net loss attributable to common stockholders, which included dividends accrued on shares of the Company's Series J Convertible Preferred Stock (the "Series J Preferred"), amounted to $718,866, or $(0.60) per basic and diluted common share. For the three months ended September 30, 2025, net loss attributable to common stockholders, which included dividends accrued on shares of Series E Preferred, Series G Preferred, and Series J Preferred of $253,880, amounted to $261,465, or $(0.22) per basic and diluted common share.

Due to factors discussed above, for the nine months ended September 30, 2026 and 2025, net (loss) income amounted to $(1,081,480) and $441,087, respectively. For the nine months ended September 30, 2026, net loss attributable to common stockholders, which included dividends accrued on shares of the Company's Series J Convertible Preferred Stock (the "Series J Preferred") amounted to $(1,918,862), or $(1.61) per basic and diluted common share. For the nine months ended September 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 $ 471,566, and the recording of a deemed contribution on exchange of equity instruments of $800,380, amounted to $769,901, or $0.65 per basic and diluted common share.

LIQUIDITY AND CAPITAL RESOURCES

On September 30, 2026 and December 31, 2025, we had a cash balance of $9,632 and $15,835, respectively. Our working capital deficit was $9,852,957 and $7,934,095 on September 30, 2026 and December 31, 2025, respectively.

As of November 13, 2026, the Company had $31,463 in cash, consisting of: (i) $31,103 remaining from the issuance of unsecured promissory notes, and (ii) $321 and $39 related to Severance Trucking and TLSS Ops, respectively.

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 unaudited consolidated financial statements, we had a net loss of $1,081,480 for the nine months ended September 30, 2026. The net cash used in operations was $231,203 and $458,574 for the nine months ended September 30, 2026 and 2025, respectively. Additionally, we had an accumulated deficit and working capital deficit of $149,083,971 and $9,852,957 on September 30, 2026, respectively. These factors, in addition to the cessation of all operations, raise substantial doubt about our ability to continue as a going concern for a period of twelve months from the date of this Quarterly Report.

Management cannot provide assurance that we will remain current in our SEC filings, successfully restructure our debts and liabilities, find a new business opportunity, achieve profitable operations, become cash flow positive or raise additional debt and/or equity capital. We are seeking to raise capital through additional debt and/or equity financing to fund the Company in the future and to pay our debt obligations. Although we have historically raised capital from sales of preferred shares, and from the issuance of promissory notes and convertible promissory notes, there is no assurance that it will be able to continue to do so. If the Company is unable to raise additional capital or secure additional lending in the near future, management expects that the Company would need to further curtail its operations. 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 nine months ended September 30, 2026, amounted to $231,203. During the nine months ended September 30, 2026, net cash used in operating activities was primarily attributable to a net loss of $1,081,480, adjusted for changes in operating assets and liabilities as a result of an increase in prepaid expenses of $2,500, an increase in accounts payable and accrued expenses of $158,555, an increase in liabilities of discontinued operations of $269,225 related to the accrual of interest on outstanding debt of discontinued operations, and an increase in deferred compensation and related benefits of $424,997.

Net cash flows used in operating activities for the nine months ended September 30, 2025, amounted to $458,574. During the nine months ended September 30, 2025, net cash used in operating activities was primarily attributable to net income of $441,087, adjusted for non-cash gains on debt extinguishment of $2,013,839 and stock-based compensation and professional fees of $47,750, and changes in operating assets and liabilities as a result of increases in accounts payable and accrued expenses of $601,750, accrued compensation and related benefits of $360,187, and accrued expenses - related parties of $106,562.

Investing activities

Net cash used in investing activities for the nine months ended September 30, 2026 and 2025, amounted to $0.

Financing activities

For the nine months ended September 30, 2026, net cash provided by financing activities totaled $225,000. During the nine months ended September 30, 2026, we received cash proceeds of $225,000 from notes payable from unrelated third parties.

For the nine months ended September 30, 2025, net cash provided by financing activities totaled $325,000. During the nine months ended September 30, 2025, we received cash proceeds of $325,000 from notes payable from unrelated third parties.

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 unaudited consolidated financial statements filed with this Quarterly Report.