Toppoint Holdings Inc.: Form 10-Q for the period ended Jun 30, 2025

The following management’s discussion and analysis of financial condition and results of operations provides information that management believes is relevant to an assessment and understanding of our plans and financial condition. The following financial information is derived from our financial statements and should be read in conjunction with such financial statements and notes thereto set forth elsewhere herein.

Use of Terms

Except as otherwise indicated by the context and for the purposes of this report only, references in this report to “we,” “us,” “our,” the “Company,” “Toppoint Holdings,” and “our company” refer to the consolidated operations of Toppoint Holdings Inc., a Nevada corporation. “Common stock” refers to the Company’s common stock, par value $0.0001 per share.

Note Regarding Forward-Looking Statements

This report contains forward-looking statements that are based on our management’s beliefs and assumptions and on information currently available to us. All statements other than statements of historical facts are forward-looking statements. These statements relate to future events or to our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Forward-looking statements include, but are not limited to, statements about:

• our goals and strategies;
• our future business development, financial condition and results of operations;
• expected changes in our revenue, costs or expenditures;
• growth of and competition trends in our industry;
• our expectations regarding demand for, and market acceptance of, our services;
• our expectations regarding our relationships with investors and other parties with whom we collaborate;
• fluctuations in general economic and business conditions in the markets in which we operate; and
• relevant government policies and regulations relating to our industry.

In some cases, you can identify forward-looking statements by terms such as “may,” “could,” “will,” “should,” “would,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “project” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond our control and which could materially affect results. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under Item 1A. “Risk Factors” of our most recent annual report on Form 10-K. If one or more of these risks or uncertainties occur, or if our underlying assumptions prove to be incorrect, actual events or results may vary significantly from those implied or projected by the forward-looking statements. No forward-looking statement is a guarantee of future performance.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

The forward-looking statements made in this report relate only to events or information as of the date on which the statements are made in this report. Except as expressly required by the federal securities laws, there is no undertaking to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason.

Overview

We are a truckload services and solutions provider focused on the recycling export supply chain. We have become a key player in the New Jersey and Pennsylvania regional trucking market for waste paper. In addition to waste paper, our portfolio also includes the shipment of scrap metal and wooden logs from large waste companies, recycling centers and commodity traders to the ports of Newark, NJ, and Philadelphia, PA. Additionally, we are rapidly expanding in the import vertical of drayage trucking as a final mile provider. This strategic expansion allows for double usage of each container—handling inbound freight via import orders and reusing containers for outbound freight via export orders—thereby generating revenue in both directions per move without requiring doubling our fleet. To support this strategy, we have upgraded our chassis, purchasing brand new adjustable 20’/40’ models to add versatility to handle any standard-size container without requiring a swap.

Our client base includes largest Fortune 500 waste companies and over 280 recycling centers and commodity traders that operate in nearly 2,300 locations. Our growing client base relies on us as their partner to provide a “white glove service” to ensure their time-sensitive, ultra-high throughput commodities are safely loaded and delivered right to container ships. In addition, capitalizing on our know-how in developing logistics solutions over the years, we are able to propose integrated transportation solutions that cover loading, transport, port drayage and unloading.

On January 23, 2025, we closed our initial public offering of 2,500,000 shares of common stock, at an offering price of $4.00 per share, for gross proceeds of $10,000,000. Our common stock began trading on NYSE American on January 22, 2025, under the symbol “TOPP.”

Recent Developments

We have expanded our operations by securing additional clients, introducing new service offerings, growing partnerships with existing clients and entering new geographic markets since early 2025:

• Import Drayage Expansion: Secured a new partnership with a New Jersey freight broker, managing 200+ monthly import loads with potential fourfold growth, improving operational efficiency, which is expected to generate over $2.1 million in additional revenue in 2025.
• Latin America Market Expansion: Executed an memorandum of understanding with the Chancay, Peru municipality to continue to explore logistics and recycling infrastructure improvements led by the rapidly developing Port of Chancay. Once all phases of development of this port are complete, the container volume generated for us at this port is expected to outpace and exceed the total volume from all 3 major U.S. ports—Long Beach, Los Angeles and New York/New Jersey.
• Refrigerated Logistics Growth: Launched cold-chain logistics services, managing refrigerated containers at major ports to diversify service offerings, stabilize revenue, and capitalize on a high-growth market.
• Recycling & Waste Management Expansion: Secured a new partnership with Casella Waste Systems (“Casella”), an industry leader in resource renewal and sustainability, to support Casella’s Springfield, Massachusetts facility; and increased service capacity with existing client Waste Management, adding 1,000 new loads and up to $2 million in additional annual revenue in 2025.
• Vietnam Freight Operations: Expanded import logistics through a new partnership with a premier Vietnamese freight company, which will optimize fleet utilization and is expected to drive 30% year-over-year revenue growth in 2025.

Emerging Growth Company Status and Smaller Reporting Company Status

We are an emerging growth company, as defined in the JOBS Act. The JOBS Act permits an emerging growth company such as us to take advantage of an extended transition period to comply with new or revised accounting standards. We have elected to avail ourselves of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we can adopt the new or revised standard at the time private companies adopt the new or revised standard and may do so until such time that we either (i) irrevocably elect to opt out of such extended transition period or (ii) no longer qualify as an emerging growth company. We may choose to early adopt any new or revised accounting standards whenever such early adoption is permitted for private companies. We will continue to remain an emerging growth company until the earliest of the following: (1) the last day of the fiscal year following the fifth anniversary of the date of the completion of our initial public offering; (2) the last day of the fiscal year in which our total annual gross revenue is equal to or more than $1.235 billion; (3) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years; or (4) the date on which we are deemed to be a large accelerated filer under the rules of the SEC.

We are also a smaller reporting company as defined in the Exchange Act. We may continue to be a smaller reporting company even after we are no longer an emerging growth company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as our voting and non-voting common stock held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter, or our annual revenue is less than $100.0 million during the most recently completed fiscal year and our voting and non-voting common stock held by non-affiliates is less than $700.0 million measured on the last business day of our second fiscal quarter.

Principal Factors Affecting Our Financial Performance

Our operating results are primarily affected by the following factors:

• our ability to acquire new customers or retain existing customers;
• our ability to offer competitive product pricing;
• our ability to broaden product offerings;
• industry demand and competition;
• our ability to leverage technology and use and develop efficient processes;
• our ability to attract and retain talented employees; and
• market conditions and our market position.

Results of Operations

Comparison of Three Months Ended June 30, 2025 and 2024

The following table sets forth key components of our results of operations during the three months ended June 30, 2025 and 2024, together with the corresponding period-over-period changes.

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Revenue

Revenue for the three months ended June 30, 2025 and 2024 was $3,968,924 and $4,697,387, respectively, representing a decrease of $728,463 or 16%. The revenue decrease in the second quarter of 2025 was mainly due to a decrease in production, which was compared against the anomalous increase resulting from servicing container recovery following the force majeure caused by the Baltimore bridge collapse in 2024, as well as ship volume interruption due to the global tariffs.

Our revenue consisted of the following during the three months ended June 30, 2025, and 2024:

Waste Paper. Revenue attributable to the transportation of waste paper fell to $2,082,561in the three months ended June 30, 2025, a 23.2% change from $2,710,019 in the prior-year period. The variance was principally influenced by (i) a lower volume of outbound loads originating from recycling plants, driven by a shift in domestic mill demand to fulfill the increased containerboard recycling capacity.

Import. Import-related revenue dropped to $1,231,751 compared with $1,469,671 in the three-month period ended June 30, 2024, representing a 16.2% change. The decrease was primarily attributable to a reduction in production, which was compared against the anomalous increase resulting from servicing container recovery following the force majeure caused by the Baltimore bridge collapse in 2024. Despite the decrease, the Company continued to service high volumes of import containers organically and shipping volume into the Port of New York/New Jersey was experiencing record volume from importers aiming to beat tariffs on their good during the three months ended June 30, 2025.

Metal. Revenue derived from the movement of ferrous and non-ferrous scrap metals grew to $467,353, as compared to $338,727 in the prior-year quarter, a period-over-period increase of 38.0%. The swing largely reflects growth in the volume our scrap metal customers produced in the second quarter. The tariffs imposed on imported non-ferrous metals along with metal recycling mills being full of inventory have helped keep non-ferrous and scrap metal exports strong.

Log. Log-hauling revenue totaled $130,605, up 53.5% from $85,100 in the three months ended June 30, 2024. China’s suspension of processing hardwood lumber in March 2025 led to a decrease in log exports compared to the same period last year. However, rerouting to Vietnam resulted in a 90% surge in demand.

Plastic. Revenue from the plastic commodity vertical reached $56,655, a period-over-period decrease of 40.0% compared with $93,870 in the prior-year quarter. This decrease is led by a decrease in US plastics exports to China caused by tariff negotiations.

Cost and expenses

Costs of revenue Our cost of revenue includes all directly related costs to deliver our services, which includes independent contractor drivers, insurance, truck maintenance costs, equipment rental and other directly related costs. Our costs of revenue for the three months ended June 30, 2025 and 2024 was $3,513,680 and $3,844,400, respectively, representing a decrease of 9%. Such decrease was in line with our decreased revenue.

Gross profit As a result of the foregoing, our gross profit decreased by $397,743 or 47% to $455,244 for the three months ended June 30, 2025 from $852,987 for the three months ended June 30, 2024. As a percentage of revenue, gross profit decreased to 11% for the three months ended June 30, 2025, as compared to 18% for the three months ended June 30, 2024.

General and administrative expenses Our general and administrative expenses consist primarily of automobile, office, insurance, payroll and rent expenses. Our general and administrative expenses increased by $1,397,468 or 216% to $2,044,357 for the three months ended June 30, 2025 from $646,889 for the three months ended June 30, 2024. This change primarily results from an increase in professional fees from going public, travel expenses related to business development and depreciation expense, as well as the recognition of stock-based compensation in the amount of $985,550, see condensed unaudited financial statements Note 9 for details.

Income tax expense

We recorded a provision for income benefits of $(108,819) for the three months ended June 30, 2025, as compared to $60,608 for the three months ended June 30, 2024, a decrease of $(169,427) or 280%. The decrease in the income tax expense mainly resulted from a net loss for the three months ended June 30, 2025.

Net (loss) income

Net (loss) income for the three months ended June 30, 2025 and 2024 was $(1,531,523) and $144,120, respectively. The change of net income was primarily due to the increase in general and administrative expenses, which included approximately $1 million of stock-based compensation recognized during the second quarter of 2025.

Comparison of Six Months Ended June 30, 2025 and 2024

The following table sets forth key components of our results of operations during the six months ended June 30, 2025 and 2024, together with the corresponding period-over-period changes.

Revenue

Revenue for the six months ended June 30, 2025 and 2024 was $7,780,534 and $8,431,284, respectively, representing a decrease of $650,750 or 8%. The revenue decrease in 2025 was mainly due to a decrease in the second quarter production that was compared against the anomalous increase resulting from servicing container recovery following the force majeure caused by the Baltimore bridge collapse in 2024, as well as ship volume interruption due to the global tariffs. We received a significant increase in the number of orders in both scrap metal and imports in alignment with the increased revenue in these commodities.

Our revenue consisted of the following during the six months ended June 30, 2025, and 2024:

Waste Paper. Waste Paper revenue for the six months ended June 30, 2025 totaled $4,670,576, a 14.4% decrease from the $5,584,838 recognized in the prior period. The year-over-year variance primarily reflects a lower volume of outbound loads originating from recycling plants attributable to steady demand from domestic recyclers as well as trade interruptions due to US tariffs causing a decrease in export volumes to Southeast Asia.

Import. Import revenue, which comprises drayage and inland transit of containerized freight arriving at New York/New Jersey, Philadelphia, and Baltimore Ports, amounted to $2,102,465, reflecting a 1.0% increase as compared to $2,082,343 in the prior-year period. The Baltimore Bridge collapse and increased order volume due to the force majeure were the reason for a surge of import orders in 2024. However, containerized import freight volumes have been stronger into the North East ports in 2025 due to shifting retailer inventory strategies and higher inbound ship flow for importers to beat impact of US tariffs, resulting in an increase in the load count in 2025.

Metal. Scrap metal revenue reached $680,996 in the six months ended June 30, 2025, a 23.8% increase from $549,945 in the prior period. The variance was principally driven by a resurgence in scrap generation and recycling activity, which translated into higher demand for outbound scrap metal movements.

Log. Log revenue totaled $214,053, representing a 32.7% increase relative to $161,325 in the prior-year period. Though the Company is showing consistent strength, the softness in log export volume stemmed from a suspension of Chinese production of US lumber that went into effect in March 2025. Volumes may hold consistent as log exporters increase their near-term shipments in response to the “New York Deforestation Act” currently Bill A8673, which will limit deforestation in the localized area if passed.

Plastic. Plastic revenue was $112,445 for the six months ended June 30, 2025, a 37.1% decrease compared with $178,833 in the prior-year period. The decline in resin production during refinery turnaround season reduced outbound shipment counts early in the year, compounded by a decrease in demand for exported recycled plastic to China. The Company continues to service this vertical, but, due to the volatility, focuses on more stabilized commodities.

Management believes the first-half results demonstrate our ability to leverage specialized equipment, disciplined pricing, and data-driven network optimization to navigate dynamic demand conditions across diverse commodity sectors. While customer order patterns in the back half of the year will continue to be influenced by macroeconomic trends, we remain focused on driving profitable revenue growth through strategic fleet investments, targeted lane expansions, and continuous service enhancements.

Cost and expenses

Costs of revenue Our cost of revenue includes all directly related costs to deliver our services, which includes independent contractor drivers, insurance, truck maintenance costs, equipment rental and other directly related costs. Our costs of revenue for the six months ended June 30, 2025 and 2024 was $6,827,247 and $7,099,346, respectively, representing a decrease of 4%. Such decrease was in line with our decreased revenue.

Gross profit As a result of the foregoing, our gross profit decreased by $378,651 to $953,287 for the six months ended June 30, 2025 from $1,331,938 for the six months ended June 30, 2024. As a percentage of revenue, gross profit remained consistent from 12% for the six months ended June 30, 2025, as compared to 16% for the six months ended June 30, 2024.

General and administrative expenses Our general and administrative expenses consist primarily of automobile, office, insurance, payroll and rent expenses. Our general and administrative expenses increased by $1,971,573 or 202% to $2,949,517 for the six months ended June 30, 2025 from $977,944 for the six months ended June 30, 2024. This change primarily results from an increase in professional fees from going public, travel expenses related to business development and depreciation expense, as well as the recognition of stock-based compensation in the amount of $985,550.

Income tax expense

We recorded a provision for income benefits of $(15,159) for the six months ended June 30, 2025, as compared to $96,044 for the six months ended June 30, 2024, a decrease of $111,203 or 118%. The decrease in the income tax expense mainly resulted from a net loss for the six months ended June 30, 2025.

Net (loss) income

Net (loss) income for the six months ended June 30, 2025 and 2024 was $(2,059,997) and $255,212, respectively. The change of net income was primarily due to the increase in general and administrative expenses.

Other Performance Indicator

We use Number of Loads Completed, or NLC, as a key performance indicator to help us evaluate our business, identify trends affecting our business, formulate business plans, and make strategic decisions. This measure may be used by other companies in our industry who may calculate it differently than we do, limiting its usefulness as a comparative measure. Therefore, NLC may have limitations as an analytical tool.

We define NLC as the total number of loads delivered during a period. As our fleet exclusively offers full truckload shipping, tracking NLC is straightforward. We recognize a completed load when our dispatch team receives the receipt paperwork from the driver at the port or other destination. We simultaneously notify the client of the delivery. We use our proprietary analytics system to record NLC.

The NLC information has been prepared by, and is the responsibility of, the Company’s management. Such information has not been audited, reviewed, examined, compiled or applied agreed-upon procedures by our auditor.

The table below shows both the total NLCs and a breakdown of NLCs by commodity type during the six months ended June 30, 2025 and 2024. Our revenue generation directly corresponds to NLC but is also impacted by the rates charged to customers.

For the six months ended June 30, 2025, the NLC for Waste Paper declined by 1,277, or 15.6%, to 6,915, from 8,192 for the six months ended June 30, 2024. The decrease was primarily attributed to an industry-wide decrease in scrap paper export volume with domestic demand still rising from US paper mills.

For the six months ended June 30, 2025, the NLC for Waste Metal increased by 234 or 40.7%, to 809, from 575 for the six months ended June 30, 2024. The increase was due to consistent orders from metal clients acquired in 2024 in the waste metal space and domestic aluminum mills being full prompting an increase in the export of non-ferrous metals.

For the six months ended June 30, 2025, the NLC for Forestry increased by 38, or 24.8%, to 191, from 153 for the six months ended June 30, 2024. The increase primarily reflected a push by log exported to beat limitations on the volume of trees deforested for logging in the New York state we service and a suspension of production on US lumber by China in March of 2025 that was rerouted to Vietnam at a higher demand.

For the six months ended June 30, 2025, the NLC for Import increased by 423, or 18.0%, to 2,775, from 2,352 for the six months ended June 30, 2024. The increase was due to an increased consistent work from new import customers and a surge in ship volume to the ports the Company services in an effort for importers to beat tariffs. The Company continues to grow it’s import customer strategy.

For the six months ended June 30, 2025, the NLC for Plastic decreased by 99, or 40.4%, to 146, from 245 for the six months ended June 30, 2024. The decrease was due to industry-wide decreases in exports for plastics.

For the six months ended June 30, 2025, the total NLC decreased by 681, or 5.9%, to 10,836, from 11,517 for the six months ended June 30, 2024. Despite a strong second quarter in 2024 due to an increase in demand for transporting distressed containers from Baltimore Bridge Collapse, the Company has shown strength and less volatility for the first six months of 2025. This is led by growth in the targeted import vertical enabling the Company to be more efficient in its ability to provide a double usage of a single container via import and export.

Liquidity and Capital Resources

As of June 30, 2025 and December 31, 2024, we had cash of $1,487,357 and $557,619, respectively. To date, we have financed our operations primarily through revenue generated from operations as well as our proceeds received from our IPO in January 2025.

During the six months ended June 30, 2025, we had a net loss of $2,059,997 and net cash used in operations of $1,139,576, which resulted primarily from an increase in professional fees resulting from our IPO, stock-based compensation expense, as well as increased current income tax expense from prior years liabilities. We believe that our current levels of cash will be sufficient to meet our anticipated cash needs for our operations for at least the next 12 months, including our anticipated costs associated with becoming a public reporting company. We may, however, in the future require additional cash resources due to changing business conditions, implementation of our strategy to expand our business, or other investments or acquisitions we may decide to pursue. If our own financial resources are insufficient to satisfy our capital requirements, we may seek to sell additional equity or debt securities or obtain additional loans. The sale of additional equity securities could result in dilution to our shareholders. The incurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financial covenants that would restrict our operations. Financing may not be available in amounts or on terms acceptable to us, if at all. Any failure by us to raise additional funds on terms favorable to us, or at all, could limit our ability to expand our business operations and could harm our overall business prospects.

Summary of Cash Flow

The following table provides detailed information about our net cash flow for the six months ended June 30, 2025 and 2024:

Operating Activities

Operating activities used net cash of $1,139,576 during the six months ended June 30, 2025, and used $176,876 during the six months ended June 30, 2024. Cash used in operating activities increased by approximately $962,700 primarily due to a in net loss of $2,059,997, increase in amortization of ROU of $35,956, increase in depreciation of $200,798, stock-based compensation of $985,550, increase in amortization of $134,436, deferred taxes of $243,244, and an overall decrease of $239,012 from the change in operating assets and liabilities, for the six months ended June 30, 2025 in comparison of the six months ended June 30, 2024.

Investing Activities

Investing activities used net cash of $6,712,944 during the six months ended June 30, 2025, and ($118,777) during the six months ended June 30, 2024. Cash used in investing activities increased by $6,594,167 from the corresponding period of the prior year. The change is mainly due to $1,012,944 from the purchases of property and equipment and $5,700,000 from the issuance of notes receivable.

Financing Activities

Financing activities provided net cash of $8,782,257 during the six months ended June 30, 2025, and used $137,218 during the six months ended June 30, 2024. Cash from financing activities increased by $8,919,475. The change is primally due to $8,459,232 received from the issuance of common stock and $328,500 from proceeds of loans payable and net off repayments of $5,457. The June 30, 2024 amount is due to $137,218 paid for deferred offering costs.

Material Cash Requirements from Known Contractual and Other Obligations

The following table summarizes our contractual obligations as of June 30, 2025 and as for the 12 months thereafter:

We intend to fund our contractual obligations with working capital.

Initial Public Offering and Underwriting Agreement

On January 21, 2025, we entered into an Underwriting Agreement (the “Underwriting Agreement”), with A.G.P./Alliance Global Partners (“AGP”), as representative of the underwriters named on Schedule 1 thereto, relating to the Company’s initial public offering of 2,500,000 shares of common stock (the “IPO Shares”). Pursuant to the Underwriting Agreement, in exchange for AGP’s firm commitment to purchase the IPO Shares, the Company agreed to sell the IPO Shares to AGP at a purchase price of $3.72 (93% of the public offering price per share of $4.00, after deducting underwriting discounts and before deducting a 1% non-accountable expense allowance). The Company also agreed to issue AGP warrants (the “Representative’s Warrant”) to purchase 5% of the aggregate number of the IPO Shares, at an exercise price equal to $4.80, equal to 120% of the public offering price, subject to adjustment.

On January 22, 2025, the IPO Shares were listed and commenced trading on the NYSE American.

The closing of the initial public offering took place on January 23, 2025. At the closing, the Company sold the IPO Shares for total gross proceeds of $10,000,000. After deducting the underwriting discounts, non-accountable expense allowance, and other expenses from the gross proceeds, the Company received net proceeds of approximately $8.28 million. The Company also issued AGP the Representative’s Warrant exercisable for the purchase of 125,000 shares of common stock at an exercise price of $4.80 per share, subject to adjustment. The Representative’s Warrant may be exercised by payment of cash or by a cashless exercise provision, and may be exercised at any time for three (3) years following the date of commencement of sales of the initial public offering, in whole or in part.

The offer and sale of the IPO Shares, and the issuance of the Representative’s Warrant, were registered pursuant to the Company’s Registration Statement on Form S-1 (File No. 333-281474), as amended (the “IPO Registration Statement”), initially filed with the SEC on August 12, 2024, and declared effective by the SEC on January 21, 2025, and by means of the final prospectus, dated January 21, 2025, filed with the SEC on January 22, 2025 pursuant to Rule 424(b)(4) of the Securities Act, or the Final IPO Prospectus.

The IPO Registration Statement included the registration for sale of an additional 375,000 shares of common stock at the public offering price of $4.00 per share upon full exercise of the underwriters’ over-allotment option. The additional shares of common stock underlying the Representative’s Warrant registered for sale by the IPO Registration Statement included 18,750 shares of common stock that the underwriters had the option to purchase upon exercise of the Representative’s Warrant which would be issuable upon full exercise of the underwriters’ over-allotment option. The underwriters’ over-allotment option expired unexercised.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Critical Accounting Policies and Estimates

The following discussion relates to critical accounting policies for our company. The preparation of financial statements in conformity with GAAP requires our management to make assumptions, estimates and judgments that affect the amounts reported, including the notes thereto, and related disclosures of commitments and contingencies, if any. We have identified certain accounting policies that are significant to the preparation of our financial statements. These accounting policies are important for an understanding of our financial condition and results of operations. Critical accounting policies are those that are most important to the portrayal of our financial condition and results of operations and require management’s difficult, subjective, or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Certain accounting estimates are particularly sensitive because of their significance to financial statements and because of the possibility that future events affecting the estimate may differ significantly from management’s current judgments. We believe the following critical accounting policies involve the most significant estimates and judgments used in the preparation of our financial statements:

Revenue Recognition

The Company’s revenue recognition policy is based on the revenue recognition criteria established under the Financial Accounting Standards Board (“FASB”) – Accounting Standards Codification 606 ”*Revenue From Contracts With Customers” (“*ASC 606”), which has established a five-step process to govern contract revenue and satisfy each element is as follows: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when or as you satisfy a performance obligation. The Company records the revenue once all the above steps are completed and services are performed.

The Company’s contracts with customers only include one performance obligation, which is to provide the delivery of truckload services. Revenue is recognized in the gross amount at a point in time when the service is completed and the benefit of our services has been transferred to the customer. This has been determined to be when the goods are delivered to its final destination point. At this point in time, the Company has a present right to payment, and the performance obligation has been met. It is not until delivery is completed that the Company completed its performance obligation. The customer is not simultaneously receiving and consuming the benefit of the performance until the delivery to its final destination. The Company has determined that during transit, which is typically within twenty four hours, it would be impractical for another entity to complete its performance obligation due to various circumstances which would not lend it to be feasible. Additionally, every performance obligation of the Company is related to a unique order number between the customer and the final destination point. If that specific order cannot be completed, the Company or another provider would need to go through a process change of receiving a new order number due to homeland security and customs restrictions which results in the customer not simultaneously receiving benefits during transit time. The Company is primarily responsible for fulfilling the promise to provide the specified service to its customers. In addition, the Company has discretion in establishing the price for the specified services and bears risk of loss of goods until delivery is completed. Transport time from pick up to the delivery of truckloads is typically within the same day. Revenue is measured as the amount of consideration the Company expects to be entitled to in exchange for those services. Because revenue is recognized at the point in time services are sold to customers, there are no contract liability balances except for when an amount is billed before the service is performed, however there may be contract asset balances for any services provided that were not billed. The Company’s revenue recognition is the same for whether the Company engages independent contractors or its brokerage model for owner operators.

Accounts Receivable, Net

Accounts receivable represent revenue earned for which the Company has not yet received payment. Accounts receivable are recorded at the invoiced amount and adjusted for amounts management expects to collect from balances outstanding at period-end. The Company adopt the current expected credit loss model (“CECL model”) to estimate the expected credit losses, which is determined by multiplying the probability of default. The Company estimates the allowance for credit loss based on an analysis of specific accounts and an assessment of the customer’s ability to pay, among other factors. At June 30, 2025, and December 31, 2024, the Company recorded an allowance for credit losses accounts in the amount of $123,371. The balance of accounts receivable, net as of June 30, 2025 and December 31, 2024 amounted to $1,048,533 and $1,203,001, respectively.

Income Taxes

Historically and through December 31, 2021, the Company elected, by consent of its stockholders, to be taxed under the provisions of Subchapter S of the Internal Revenue Code and applicable state statutes. The Company made a qualified Subchapter S subsidiary election with the Internal Revenue Service and accordingly the Company’s income is to be included in the Parent’s income tax return for Federal tax purposes. The Company has also elected S Corporation status for Pennsylvania State tax purposes. The Company revoked its Subchapter S election with the Internal Revenue Service and Pennsylvania as of January 1, 2022.

As of January 1 2022, the Company accounts for income taxes utilizing the asset and liability approach. Under this approach, deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid. The provision for income taxes generally represents income taxes paid or payable for the current year plus the change in deferred taxes during the year. Deferred taxes result from the differences between the financial and tax bases of the Company’s assets and liabilities and are adjusted for changes in tax rates and tax laws when changes are enacted.

The calculation of tax liabilities involves dealing with uncertainties in the application of complex tax regulations. The Company recognizes liabilities for anticipated tax audit issues based on the Company’s estimate of whether, and the extent to which, additional taxes will be due. If payment of these amounts ultimately proves to be unnecessary, the reversal of the liabilities would result in tax benefits being recognized in the period when the liabilities are no longer determined to be necessary. If the estimate of tax liabilities proves to be less than the ultimate assessment, a further charge to expense would result.

The Company evaluates uncertain income tax positions taken or expected to be taken in a tax return for recognition in its consolidated financial statements. The Company was not required to recognize any amounts from uncertain tax positions for the six months ended June 30, 2025 and 2024. The Company’s conclusions regarding uncertain tax positions may be subject to review and adjustment at a later date based upon ongoing analyses of tax laws, regulations and interpretations thereof, as well as other factors. Generally, federal, state and local authorities may examine the Company’s tax returns for three years from the date of filing.

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15 under the Exchange Act, our management has carried out an evaluation, with the participation and under the supervision of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2025. Disclosure controls and procedures refer to controls and other procedures designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating and implementing possible controls and procedures.

Management conducted its evaluation of disclosure controls and procedures under the supervision of our Chief Executive Officer and our Chief Financial Officer. Based upon, and as of the date of this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of June 30, 2025.

As we disclosed in our Annual Report on Form 10-K filed with the SEC on April 15, 2025, management identified significant deficiencies in our internal control over financial reporting. The significant deficiencies that have been identified relate to our lack of robust and formal financial reporting policies and procedures in place to address SEC disclosure requirements.

We have engaged external financial consultant with U.S. GAAP experience to help our management in financial reporting processes and are in the process of developing and implementing a comprehensive set of processes and internal controls to timely and appropriately (i) identify transactions that may be subject to complex U.S. GAAP accounting treatment, (ii) analyze the transactions in accordance with the relevant U.S. GAAP, and (iii) review the accounting technical analysis.

Designing and implementing effective disclosure controls and procedures are a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environments and to devote significant resources to maintaining a financial reporting system that adequately satisfies our reporting obligations. The remedial measures that we have taken and intend to take may not fully address the significant deficiencies that we have identified.

Changes in Internal Control Over Financial Reporting

Except for the matters described above, there were no changes in our internal controls over financial reporting during the quarter ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II

OTHER INFORMATION