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News per Fidelity
Delivery Firm Got PPP Loan Even as Demand Rose During Pandemic
BY Dow Jones & Company, Inc.
— 5:30 AM ET 06/23/2020
WASHINGTON -- John Mercadante's e-commerce delivery business was burning cash, missing debt payments and struggling to raise capital, regulatory filings show, before two events brightened his company's fortunes.
First the coronavirus pandemic hit, leading to increased delivery orders for his Transportation and Logistics Systems Inc. ( TLSS
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) of Jupiter, Fla. And even as the business got busier, two of its subsidiaries qualified for forgivable loans totaling $3.4 million under the federal government's Paycheck Protection Program.
The publicly traded company, known by its ticker symbol TLSS, hasn't been accused of impropriety. But its financial situation and those of other public companies that received PPP loans are expected to come under scrutiny as the Treasury Department and Small Business Administration determine whether PPP loans qualify for forgiveness.
In April, Treasury asked publicly traded companies that received loans to return the money, and updated its guidance to make it clear that borrowers must take into account "their current business activity," including their ability to access cash to support ongoing operations.
David Bamberger, a lawyer representing TLSS, said the company's request for a loan was appropriate, and it plans to seek to have the loan forgiven.
"The federal government offered a lifesaver, we qualified and we were kept afloat. As a result, so were our employees," Mr. Bamberger said in response to emailed questions.
But others say that companies that haven't suffered during the crisis should have to pay back the loans, which were designed to help small companies -- generally defined as having 500 or fewer full-time employees -- maintain their payroll through the pandemic.
"In terms of loan forgiveness, I'm concerned about circumstances where businesses applied for a loan, received money, but actually saw no reduction in revenues at all," said Sen. Mitt Romney (R., Utah) at a recent Senate hearing. " It should not qualify for forgiveness."
In its 2019 annual report dated May 29, Transportation and Logistics Systems ( TLSS
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) said the pandemic "had minimal effects on our results of operations." The company has yet to report its 2020 revenue.
Spokesmen for the Treasury Department and the Small Business Administration, the two agencies running the program, declined to comment on TLSS.
Under the federal stimulus legislation, companies that meet the requirements for eligibility and spending of PPP loans can have both principal and interest forgiven. PPP loans now total more than $514 billion to more than 4.6 million borrowers.
Joshua French, a partner at Boston-based law firm Nutter McClennen & Fish LLP who has been advising PPP borrowers, noted that legislation simply requires PPP borrowers to certify that "the uncertainty of current economic conditions makes necessary the loan request to support the ongoing operations of the eligible recipient."
"My immediate first reaction when the statute first came out was, 'You can drive a truck through that,'" he said.
After Mr. Romney raised his concern at the June 10 hearing, Sen. Marco Rubio (R., Fla.), one of the key drafters of the PPP, told him there was a reason Congress didn't explicitly force companies to demonstrate they lost revenue to get their loans forgiven. Doing so would create paperwork burdens and might even punish entrepreneurs who found creative new ways to make money during the crisis, Mr. Rubio said.
The government's loan forgiveness application asks businesses to provide information about payroll costs and other expenses. It doesn't ask about revenue.
TLSS does 99% of its business with Amazon.com Inc., with a fleet of about 250 trucks carrying packages, according to public filings.
Revenue more than doubled last year, the company says, but so did operational costs. Interest on its debt more than tripled. It reported a $14.5 million loss in 2018 and a $44.9 million loss last year.
Early in 2020, before the pandemic took hold, TLSS was "virtually insolvent," said Mr. Bamberger. "The situation was so dire the company was actively considering closing some of its locations and terminating drivers."
Two TLSS subsidiaries, Prime EFS and ShypDirect, applied for PPP loans with M&T Bank Corp. on April 8, attesting that the loans were necessary because of economic uncertainty.
The day after sending in the application, Mr. Mercadante wrote a letter to shareholders. "Shipping has been classified as an 'essential business, '" the chairman and CEO said. "Consumers have been increasing their online purchases due to sequestering, leading to growing demand for our services."
Mr. Bamberger said increased demand for shipping didn't necessarily translate into profits for TLSS, given the intense competition in the delivery sector. He also said the pandemic created uncertainty about many aspects of the business, such as the health or availability of drivers.
Without the PPP loan, "the company would likely have had to cut staff, reduce or eliminate certain operations, and possibly even file for bankruptcy protection. We likely would not have been able to survive," he said.
The bank approved both loans by late April, sending $2,941,212.50 to Prime EFS and $504,940 to ShypDirect. An M&T spokesman had no immediate comment.
Write to Ryan Tracy at ryan.tracy@wsj.com
(END) Dow Jones Newswires
06-23-20 0530ET
Copyright (c) 2020 Dow Jones & Company, Inc.
Gator, I think the extreme corporate silence is so deafening that those on this board are bored to tears.
I am extremely long here and getting unbelievably frustrated with the lack of news. And I really don't care to hear about any silent period due to the S-1 filing. That is virtually the only thing we have been hearing about and it has been going on for months now. Sorry, I find it difficult to believe that nothing can even be released about when the S-1 was submitted and who is representing us in that submission.
This board used to have some new information posted on a regular basis. What happened to all the shareholder/distributors? Are any of them still in business? Are they gaining new business or remaining status quo?
If the company does not publicly report anything on the status of the company, my opinion is that this stock will enter a lethargic drift into sub-penny land.
I don't even think that our farm equipment representative even expected the agony we are experiencing on this board!
Perhaps someone that still visits here and has enough clout to obtain a response from shareholder relations could at least get a list of the names and locations of their current distributors here in the U.S.
Normally 45 days after end of quarter which would be Aug. 15.. But not sure if there may be extensions allowed with the Covid issues.
Been flipping shares from time to time to increase my position here but becoming fearful that when the quiet time ends, this will make a strong move north, never to return to these bargain basement prices again. Just sitting tight with my significant holdings here and being happy with what I have.
Wouldn't surprise me if they made an offer like that public and turned it down, it would show such confidence that the share price could easily move well beyond that.
And how many people are going to pay over $12 for a small bottle of mixer, let alone the additional $5 to $10 to ship it? We would need millions of repeat buyers, no tens of millions of repeat buyers to make any difference here with 10 billion shares out there.
Believe me, I used to be a strong believer in this company, check my early posts, now they can't even get an audited financial statement to prove that the revenue is properly being utilized and the revenue per share is not very good even as it is currently being reported.
Have you tried googling the shelf life of isopropyl style alcohols. -- under ideal conditions it is widely shown to only maintain full potency for 2 to 3 years. I hardly consider sitting outside in the weather ideal conditions. That potency will timeframe will also transition to the product being made.
Any idea after they get current how long it will take to take down the stop sign?
Changing zip codes headed for the slums!
OMG, how much can they expect to realistically sell in one year only being available in Oregon! What a pipe dream that is.
And that would have to be 10 billion bottles a year for your GROSS revenue numbers. Then consider their cost of doing business filling those 10 billion bottles, that is if they could ever sell 1% of that per year.
I have already liquidated a fair amount but am planning on holding the millions of shares I still have and continue to attempt to periodically bring this board back to reality.
Saw a pic on fb about alcohol for hand sanitizer but again wonder if the inroads for sales can really justify that inventory. Wonder how long it can sit around outdoors in direct sunlight before going bad.
The management just keeps tilting at windmills trying to hit a get rich quick scheme. Like that will happen as management, in my opinion, can't keep their focus on one item let alone a basket full.
looks like clay's efforts to me
Let's see, say their first run is 100,000 bottles. If my math is correct they would have to repeat that run 100,000 times to give each of the 10 billion shares the equivalent of revenue for one bottle!
Makes me really want to buy millions more shares, NOT
FWIW, Z I actually tried that email along with several others I had found the other day and they all came back as blocked. Too late today and if I were not having surgery tomorrow I would try calling. Hopefully I will be up for it Monday early morning. Used to have customers in Europe and have to plan calls for the time change.
If I get lucky, I will post what I find out unless someone else is able to find something in the interim.
I also posted a message on Twitter about how unethical I believe it would be to RS the UWRL shareholders.
Z, while we all tend to rely on the information that others provide, ultimately we, as individuals, are responsible for doing our own dd and no one is holding a gun to our respective heads to make any investment.
I personally appreciate information reported by others and while there are some of us that try to be fair and honest in sharing what information we find, there are a few that are manipulators that we often get thrown in the barrel with if a stock does go south and not work out.
I have always been a believer in treating others the way I would like to be treated and believe you have a very similar philosophy of wanting us all to be winners in our investments.
Perhaps this will prove out to be a winner for us all and I will continue to hope for an optimistic outcome. Accordingly, I think we should all be watchful and, if we come across new FACTUAL information here, hope we are all willing to share it and not try to report things to help an individual cause to the detriment of others.
Working together we all stand a better chance of being successful.
Best of luck to you and I do hope you find it in your interest financially to stick around here.
I had a great outlook for tomorrow here..................... until the kiss of death video just showed up. Hope that TLSS is strong enough to push beyond this.
Thanks for your response, G. Quiet period issues due to name change or some other reason if you are aware? Very much appreciated.
I have tried several email addresses for Steve Saunders that I found that were all associated with Bubblr and all came back blocked. I also posed the same questions to the Contact Bubblr on their website as well as both public and messaging through Twitter to Steve Saunders and Bubblr.
My questions were 2. Is Steve Saunders active with Bubblr and will shareholders of UWRL receive the same number of shares of Bubblr stock.
I suggest others that have the interest and ability to Tweet questions to both Bubblr and Steve Saunders.
Perhaps one of us will get a response. I will certainly share any response I receive.
Wonder if that somebody has an inside track on something about to happen??????
Would be nice for sure. There are so many potential great positives on the horizon.
Wonder which Steve gets that email. Steve Saunders or Steve Morris? Strange because most things show Steve Saunders as the CEO but I thought for sure I saw a filing correction with Steve Morris as the CEO. Even though there was also a reported comment somewhere that I recall with Steve Morris saying he was not CEO material -- guessing because of his disposition.
I still believe in value here but am becoming very confused about things.
Additionally, I did send an email about a week ago to a link for shareholder relations with a couple of questions but have yet to receive the courtesy of a reply. Perhaps they didn't think I am a large enough shareholder to merit a response.
Good luck to all here and I hope we do get some clarifications and see some positive movement back to where it should be.
Thanks for your response, big.
I actually appreciate what OC does for us. Just thought that many of us would like to know his thoughts about new revelations. While we try to do our own dd, often times we do tend to rely on the opinions of others that we trust.
I also enjoy your opinions.
Thanks again for all of your efforts.
That is the way I feel about this company as well, Me! Great new internet thinking with patents to boot!
Thanks BlackSnake, to me at least it means a lot! Let's keep a positive thought on this.
Many of us may be bag holders, Me. Let's hope not and perhaps it will come back. Would be nice to hear the current thoughts of those that were touting this so much. Show us that this is still a "real deal", guys!
I believe we all would like to know OC's thoughts on this, in fairness. Please let us all know your thoughts as they would be greatly appreciated.
Thanks, Z -- I really am happy to be a part of this in the early stages. I made a couple of purchases almost 2 weeks ago. Had an open order for more over the past week and kept raising the bid price hoping it would drop back down. Finally yesterday I decided that it was time to bite the bullet and buy in more at the going price.
I doubt these bargain basement prices will be available for long as more and more become aware of the fine champagne that is Bubbling away here.
Great things coming that will change the way we think of the internet and with patents to boot!
BlackSnake, don't forget for those Apple owners, Newzmine is also a FREE APP for them as well!
MeLotsOfMoney, go to OTCMarkets and look at the 8-K in January for UWRL. It shows what you ned to see there.
CRAP,
I think this stock has the ability for mind control. Just couldn't help myself and bought more, lol.
My brain just started Bubbling
Great info, Z
My biggest mistake here is that I didn't buy more a couple of weeks ago. I think this is in the right place at the right time.
I hope so, tb, To be a major player in the internet industry, they need to be on top of their game. I do believe their ideas are on the right track and very novel for these times.
BUBBLR needs to get its website info in order and be on top of that if it is in fact a player in this industry as it purports. Sorry but miscues like that should have been addressed prior to the filings.
I also think it is interesting that the BUBBLR site itself still shows Steve Saunders as the CEO and I wonder what position he actually holds considering he appears to be a key spokesperson for the new company.
chsapeak, I agree with you wholeheartedly. Then couple that with the stock signing bonus and that pretty much locks out any potential thought of a reverse split. They would not consider that sort of a reduction of shares. The shares were a key incentive to make the move in my opinion.
I like your thinking, carp. I am actually hopeful that once these AB Distributors start signing and the economy begins to normalize we might very well see pops that take us higher than that by fall. Also hopeful that by then the .20 will be our low base. Trying not to count the proverbial chickens before they hatch though, lol.
Go. $KGKG !!!!!!
I think you are right, jtf.
I have a little more to grasp hold of. Think about the shares these key employee hires have and what their positive efforts can do, not only for the company but also their vested interests. Look at the potential increase in their individual wealth if they can get the company to its recent high price of about .15 per share, let alone where we think this product line is capable of ultimately going.
Also consider how much they and Clark would not want to see or be a part of a R/S with regard to the diminishing their investments here.
Finally, to those concerned about larger chains with shelf space allocation, think about how much more power the AB Distributors and others like them have relative to gaining that precious shelf space for a product they believe in.
Kona and Clark are going in the right direction for ultimate success in my mind!!!
$KGKG
Not that I can see, Aston but perhaps there will be a PR release or public statement by Eakle or Kaufman about where the company is going. In view of the past projections by them that have never proven out, I doubt that much would be believable anyway.
We do have another year, hopefully, of that blueberry run contract and if they were smart they would put that revenue towards reducing their toxic debt rather than more R and D trying to find the next great overnight get rich quick scheme.
To me, the gross revenue numbers just don't reflect all the staff and multiple shifts they say are running. It just doesn't add up.
Many years ago, I worked directly for a guy that had a large company going with his own lear jet and three large timeshare resorts among other things. Whenever we would talk and potential investors he sounded so confident and believable that in retrospect I think he had truly convinced himself, as he did others about the greatness of the company. Within a year of working with him and seeing what was really going on, I was seeing things that were not adding up and kept digging myself only to find out it was basically a scam he was running. I then turned him in to the authorities, knowing what was really happening. Among many unfortunate casualties from the scams, he also caused a couple of small banks to fail.
I seriously was convinced that he had gotten into his role so deeply that he actually believed what he was spewing as the truth. Perhaps Eakle and Kaufman are in the same mindset to the detriment of the shareholders and perhaps others.
I hate to say it but for being so busy, their gross revenue numbers were pretty low. But then these fins are unaudited so it sadly would not be difficult to divert revenue somewhere away from ALKM. Not saying it has been done but lets face it with unaudited financials it is very easy to play a shell game. To me, 2 and 2 are not adding up to 4 and this is just my opinion.
I just glanced at it but I believe in part the additional was due to late payment penalties.
First quarter was a net loss of nearly $700k. That's exciting, lol!