What changed in this filing

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Item 1A. Risk Factors

2026-03-31 compared with 2025-03-31 · 450 added, 368 removed, 405 unchanged (67% of the section changed)

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as well as a discussion of other risks related to the Company’s business and an investment in its common stock.

Increased competition in the auto transportation and logistics industry could result

in a loss of our market share or a reduction in our rates, which could have a material adverse effect on our operations.

We are highly dependent on the automotive industry, and a decline in the automotive industry

could have a material adverse effect on our operations.

We are dependent on a small number of customers for a large portion of our revenue.

Our business depends upon compliance with numerous government regulations.

Arrangements with independent contractors expose us to risks that we do not face with

Any unionization efforts or labor regulation changes in certain jurisdictions in which

we operate could divert management’s attention and could have a materially adverse effect on our operating results or limit

our operational flexibility.

Increases in driver compensation or difficulties attracting and retaining qualified drivers could have a materially adverse effect on our profitability and the ability to maintain or grow our business.

We will need to integrate information technology systems, and our business may be seriously harmed if we fail to maintain, upgrade, enhance, protect, and integrate our information technology systems.

Operational risks, including the risk of cyberattacks, may disrupt our business and could have a material adverse effect on our operations.

Risks Related to Our Business and Operations

Increased competition in

the auto transportation and logistics industry could result in a loss of our market share or a reduction in our rates, which could

have a material adverse effect on our operations.

We are highly dependent

on the automotive industry, and a decline in the automotive industry could have a material adverse effect on our operations.

We are dependent on a small

number of customers for a large portion of our revenue.

Our business depends upon

compliance with numerous government regulations.

Arrangements with independent

contractors expose us to risks that we do not face with employees.

Any unionization efforts

or labor regulation changes in certain jurisdictions in which we operate could divert management’s attention and could have

a materially adverse effect on our operating results or limit our operational flexibility.

Increases in driver compensation

or difficulties attracting and retaining qualified drivers could have a materially adverse effect on our profitability and the ability

to maintain or grow our business.

We operate enterprise information

technology systems, and our business may be seriously harmed if we fail to maintain, upgrade, enhance, protect, and integrate our

information technology systems.

Operational risks, including

the risk of cyberattacks, may disrupt our business and could have a material adverse effect on our operations.

Risks associated with climate change, including

increased regulations of our emissions, and the potential increased impacts of severe weather events on our properties.

Geopolitical events, unstable economic and

market conditions may have serious adverse consequences on our business, financial condition and stock price.

Related to Our Business and Operations

competition in the auto transportation and logistics industry could result in a loss of our market share or a reduction in our rates,

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may result in more large carriers with greater financial resources, and the development of new methods or technologies for hauling vehicles

could lead to increased investments to remain competitive, either of which may lead to new market entrants and increased competition overall.

could lead to increased investments to remain competitive, any of which may lead to new market entrants and increased competition overall.

If we lose market share to these competitors or have to reduce our rates in order to retain our market share, our financial condition

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The automotive

industry is highly cyclical, and the demand for new automobiles, SUVs and light trucks is directly affected by such external factors as

general economic conditions in the United States, Canada and Mexico, unemployment rates, labor shortages or strikes, consumer confidence,

government policies, including tariffs, continuing activities of war, terrorist activities and the availability of affordable new car

As a result, our results of operations could be adversely affected by downturns in the general economy and in the automotive

industry, and by changing consumer preferences in purchasing new automobiles, SUVs and light trucks or the overall financial condition

of our major customers.

A significant decline in the volume of automobiles, SUVs and light trucks manufactured, imported and sold in the

United States could have a material adverse effect on our operations.

industry is highly cyclical, and the demand for new automobiles, SUVs and light trucks is directly affected by such external factors

as general economic conditions in the United States, Canada and Mexico, unemployment rates, labor shortages or strikes, consumer

confidence, government policies, including tariffs, continuing activities of war, terrorist activities and the availability of affordable

new car financing.

As a result, our results of operations could be adversely affected by downturns in the general economy and in the

automotive industry, and by changing consumer preferences in purchasing new automobiles, SUVs and light trucks or the overall financial

condition of our major customers.

A significant decline in the volume of automobiles, SUVs and light trucks manufactured, imported and

sold in the United States could have a material adverse effect on our operations.

are dependent on a small number of customers for a large portion of our revenue.

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a small group of our customers have made up a majority of our revenue.

Specifically, for the year ended December 31, 2024 our top four

Specifically, for the year ended December 31, 2025, our top five

customers accounted for 59%, and for the year ended December 31, 2024, our top five customers accounted for 49.6% of our combined operating

revenue, and our top ten customers accounted for 73.8% and 70.9% of our combined total operating revenue during the same periods, respectively.

General Motors Company accounted for 22% of our combined operating revenue for the year ended December 31, 2024.

assurance any of our customers, including this select group of customers, will continue to utilize our services, renew our existing contracts,

or continue at the same volume levels.

Despite the existence of contractual arrangements, certain of our customers may engage in competitive

bidding processes that could negatively impact our contractual relationships.

A loss of any of these customers would have a material adverse

effect on the Company’s results of operations and financial condition.

We have one customer that accounted for 29% and 22% of our combined operating revenue for the year ended December 31, 2025 and 2024,

respectively.

There is no assurance any of our customers, including this select group of customers, will continue to utilize our services,

renew our existing contracts, or continue at the same volume level.

Despite the existence of contractual arrangements, our customers

may engage in competitive bidding processes that could negatively impact our contractual relationships.

A loss of any of these customers

or major contracts within these customers would have a material adverse effect on the Company’s results of operations and financial

business depends upon compliance with numerous government regulations.

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transportation industry, generally governing such activities as operations of and authorization to engage in motor carrier freight transportation,

safety, contract compliance, insurance requirements, tariff and trade policies, taxation, and financial reporting.

are audited periodically by the DOT to ensure that we are in compliance with various safety, hours-of-service, and other rules and

safety, driver licensing and qualifications, contract compliance, insurance requirements, tariff and trade policies, taxation, and financial

may be audited periodically by the DOT to ensure that we are in compliance with various safety, hours-of-service, and other rules

and regulations.

If we were found to be out of compliance or receive an unsatisfactory DOT safety rating, the DOT could restrict or otherwise

materially adversely impact our business, financial conditions and results of operations.

could become subject to new or more restrictive regulations, such as regulations relating to U.S.

Environmental Protection Agency mandated

engine emissions requirements, drivers’ hours of service, occupational safety and health, ergonomics, cargo security, collective

bargaining, and other matters affecting safety or operating methods.

Our drivers also must comply with the safety and fitness regulations

promulgated by the DOT, including those relating to drug and alcohol testing and hours of service.

Compliance with all such regulations

could substantially require changes in our operating practices, influence the demand for auto transportation and logistics services,

reduce equipment and driver productivity and our load factor, and the costs of compliance could incur significant additional expenses.

such change in an applicable regulation or ruling in a judicial proceeding could have a material adverse effect on our business.

could become subject to new or more restrictive regulations, such as regulations relating to English language proficiency, commercial

drivers licensing standards, U.S.

Environmental Protection Agency-mandated engine emissions requirements, drivers’ hours of

service, occupational safety and health, ergonomics, cargo security, collective bargaining, and other matters affecting safety or operating

Our drivers also must comply with the safety and fitness regulations promulgated by the DOT, including those relating to drug

and alcohol testing and hours of service.

Compliance with all such regulations could substantially require changes in our operating

practices, influence the demand for auto transportation and logistics services, reduce equipment and driver availability and productivity,

and the costs of compliance could incur significant additional expenses.

material change in applicable regulation or a ruling in a judicial proceeding could have a material adverse effect on our business.

cannot predict the impact that future regulations may have on our business.

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to comply with applicable regulations, could result in substantial fines or revocation of our operating permits and licenses.

engagement of owner-operators to provide a portion of our capacity exposes us to different risks than we face with our company drivers.

face a complex and increasingly stringent regulatory and statutory scheme relating to wages, classification of employees and alternate

work arrangements.

Tax and other regulatory authorities, as well as owner-operators themselves, have increasingly asserted that owner-operators

within our industry are employees, rather than independent contractors.

Automotive transportation companies have been, and may continue

to be, subject to lawsuits alleging that their drivers were misclassified as independent contractors rather than employees.

class actions and other lawsuits have been filed against us and others in our industry seeking to reclassify owner-operators as employees

for a variety of purposes, including workers’ compensation and health care coverage.

If any such cases are judicially determined

in a manner adverse to us or our businesses, there could be an adverse impact on our operations in the effected jurisdictions.

and other regulatory authorities and courts apply a variety of standards in their determination of independent contractor status.

the owner-operators we contract with are deemed employees, we could incur additional exposure under laws for federal and state tax, workers’

compensation, unemployment benefits, labor, employment and tort.

The exposure could include prior period compensation, as well as potential

liability for employee benefits and tax withholdings.

For example, Sierra and Deluxe, in 2022 and 2020, respectively, reclassified their

owner-operators in California as sub-haulers and employees, as appropriate.

While the entities experienced increased expenses associated

with additional employees, the reclassification did not impact revenue recognition.

We continue to evaluate the classification of drivers

to ensure compliance with all relevant laws.

While we continue to engage owner-operators where permissible and do not believe any future

engagement of owner-operators and third-party carriers to provide a portion of our capacity exposes us to different risks than we face

with our Company drivers.

We face a complex and increasingly stringent regulatory and statutory

scheme relating to wages, classification of employees and alternate work arrangements.

Tax and certain federal and state regulatory authorities,

as well as owner-operators and third-party carriers themselves, have increasingly asserted that independent contractors within our industry

should be classified as employees under particular jurisdictions.

Automotive transportation companies have been, and may continue to be,

subject to lawsuits alleging that their drivers were misclassified as independent contractors rather than employees.

Further, class actions

and other lawsuits have been filed against us and others in our industry seeking to reclassify owner-operators and third-party carriers

as employees for a variety of purposes, including workers’ compensation and health care coverage.

If any such cases are judicially

determined in a manner adverse to us or our businesses, there could be an adverse impact on our operations in the affected jurisdiction.

Taxing and other regulatory authorities and courts apply a variety of standards in their determination of independent contractor status.

If the owner-operators and third-party carriers we contract are deemed employees, we could incur additional exposure under laws for federal

and state tax, workers’ compensation, unemployment benefits, labor, employment and tort.

The exposure could include prior period

compensation, as well as potential liability for employee benefits and tax withholdings.

We continue to evaluate the classification of

drivers, and ensure appropriate treatment of independent contractors where they perform services on our behalf, to ensure compliance with

all relevant laws.

While we continue to engage owner-operators and third-party carriers where permissible and do not believe any future

reclassifications would be material, we cannot guarantee an immaterial impact.

Any such change in applicable regulation or ruling in

a judicial proceeding could have a material adverse effect on our business.

Any such change in applicable regulation or ruling in a

judicial proceeding could have a material adverse effect on our business.

addition, our lease contracts with owner-operators are governed by federal leasing regulators, which impose specific requirements

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an adverse effect on our operating results.

typically are able to pass through a portion of our fuel costs to our customers.

typically are able to recover a portion of our fuel costs from our customers.

Changes in fuel costs will not result in a direct offset

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incur certain liens;

consolidate, merge or sell or otherwise dispose of our assets;

make investments, loans, advances, guarantees and acquisitions;

consolidate, merge or sell

or otherwise dispose of our assets;

make investments, loans,

advances, guarantees and acquisitions;

enter into swap agreements;

redeem, repurchase or refinance our other indebtedness;

amend or modify our governing documents.

redeem, repurchase or refinance

our other indebtedness;

amend or modify our governing

covenants may make it more difficult for us to operate our business, obtain additional capital and pursue business opportunities, including

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operating and financial systems and controls may be inadequate to deal with our growth;

and the risks of entering markets in which we

have limited or no prior experience and the loss of key employees.

Furthermore, even if we are able to identify attractive acquisition

candidates, we may not be able to obtain the financing to complete such acquisitions.

these factors limit our ability to integrate the operations of our acquisitions, successfully or on a timely basis, our expectations

of future results of operations may not be met.

the risks of entering markets in which we have

limited or no prior experience;

and the loss of key employees.

Furthermore, even if we are able to identify attractive acquisition candidates,

we may not be able to obtain the financing to complete such acquisitions.

these factors limit our ability to integrate the operations of our acquisitions successfully or on a timely basis, our expectations of

future results of operations may not be met.

In addition, our growth and operating strategies for any business we acquire may be different

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business to achieve cost savings.

there may be liabilities that we do not discover in the course of performing due diligence investigations on each company or business

we have already acquired or may acquire in the future.

Such liabilities could include those arising from employee benefits contribution

obligations of a prior owner or noncompliance with, or liability pursuant to, applicable federal, state or local environmental requirements

by prior owners for which we, as a successor owner, may be responsible.

In addition, there may be additional costs relating to acquisitions

including, but not limited to, possible purchase price adjustments.

Rights to indemnification by sellers of assets to us, even if obtained,

may not be enforceable, collectible or sufficient in amount, scope or duration to fully offset the possible liabilities associated with

the business or property acquired.

Any such liabilities, individually or in the aggregate, could have a material adverse effect on our

there may be liabilities that we do not discover in the course of performing due diligence on each company or business we have already

acquired or may acquire in the future.

Such liabilities could include those arising from employee benefits contribution obligations of

a prior owner or noncompliance with, or liability pursuant to, applicable federal, state or local environmental requirements by prior

owners for which we, as a successor owner, may be responsible.

In addition, there may be additional costs relating to acquisitions including,

but not limited to, possible purchase price adjustments.

Rights to indemnification by sellers of assets to us, even if obtained, may

not be enforceable, collectible or sufficient in amount, scope or duration to fully offset the possible liabilities associated with the

business or property acquired.

Any such liabilities, individually or in the aggregate, could have a material adverse effect on our business.

currently intend to finance future acquisitions by using a combination of common stock, cash and debt.

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services, any of which could materially and adversely affect our business.

we have operated as a combined company for less than one year, we do not have a long-term reputation of success.

we have only operated as a combined company since May 2024, we do not have the long-term reputation of success that other well-established companies

Particularly in the transportation market, in which trust is important, the absence of a proven reputation could make it more difficult

to establish new customers.

As a result, we rely more heavily on the brand value and reputation of the individual Founding Companies.

transportation infrastructure continues to be a target of terrorists.

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by the nature of our operations, are exposed to the potential for a variety of claims, including personal injury claims, vehicular collisions

and accidents, alleged violations of federal and state labor and employment laws, such as class-action lawsuits alleging wage and

hour violations and improper pay, commercial and contract disputes, cargo loss and property damage claims.

We maintain insurance coverage

with established insurance companies at levels deemed to be adequate.

The trucking business has experienced significant increases in the

cost of liability insurance, in the size of jury verdicts in personal injury cases arising from trucking accidents and in the cost of

settling such claims.

If the number or severity of future claims increases, claims expenses might exceed historical levels or could exceed

the amounts of our insurance coverage or the amount of our reserves for self-insured claims or deductible levels, which could materially

adversely affect our financial condition, results of operations, liquidity and cash flows.

and accidents, commercial and contract disputes, cargo loss and property damage claims.

We maintain insurance coverage with established

insurance companies at levels deemed to be adequate.

The trucking business has experienced significant increases in the cost of liability

insurance, in the size of jury verdicts in personal injury cases arising from trucking accidents and in the cost of settling such claims.

If the number or severity of future claims increases, claims expenses might exceed historical levels or could exceed the amounts of our

insurance coverage or the amount of our reserves for self-insured claims or deductible levels, which could materially adversely

affect our financial condition, results of operations, liquidity and cash flows.

recent years, several insurance companies have completely stopped offering coverage to trucking companies or have significantly

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of adequate insurance in the future.

in driver compensation or difficulties attracting and retaining qualified drivers, independent contractors or third party capacity providers

could have a materially adverse effect on our profitability.

in attracting and retaining sufficient numbers of qualified drivers, independent contractors, and third-party capacity providers,

could have a materially adverse effect on our growth and profitability.

The transportation industries are subject to a shortage of qualified

Such shortage is exacerbated during periods of economic expansion, in which there may be alternative employment opportunities,

or during periods of economic downturns, in which unemployment benefits might be extended and financing is limited for independent contractors

who seek to purchase equipment or for students who seek financial aid for driving school.

Furthermore, capacity at driving schools may

be limited by other future outbreaks similar to COVID-19 and any governmental imposed lockdown or other attempts to reduce the spread

of such an outbreak may reduce the pool of potential drivers available to us.

Regulatory requirements could further reduce the number

of eligible drivers.

Our inability to engage a sufficient number of drivers and independent contractors may negatively affect our operations.

Further, our driver compensation and independent contractor expenses are subject to market conditions, and we may find it necessary to

increase driver and independent contractor rates in future periods.

connection with the preparation of the Company’s audited financial statements for the year ended December 31, 2024, a material weakness

in the Company’s internal controls over financial reporting was identified and, if our remediation is not effective, or if we fail

to maintain an effective system of internal controls over financial reporting in the future, we may not be able to accurately or timely

report our financial condition or results of operations, which may adversely affect investor confidence and profitability .

in driver compensation or difficulties attracting and retaining qualified drivers, independent contractors or third-party carrier capacity

providers could have a materially adverse effect on our profitability.

Difficulty in attracting and retaining sufficient numbers of qualified

drivers, independent contractors, and third-party carrier capacity providers, could have a materially adverse effect on our growth

and profitability.

The transportation industry is subject to a shortage of qualified drivers, and drivers for our specialty automotive

transport must have additional qualifications.

Driver shortage is exacerbated during periods of economic expansion, in which there may

be alternative employment opportunities, or during periods of economic or industry downturns, in which unemployment benefits might be

extended and financing is limited for independent contractors who seek to purchase equipment or for students who seek financial aid for

driving school.

Furthermore, capacity at driving schools and the criteria to qualify for a commercial driver’s license may be limited

by new rules and regulations, which may reduce the pool of potential drivers available to us in the future.

Our inability to engage a

sufficient number of drivers and independent contractors may negatively affect our operations.

Further, our driver compensation and independent

contractor expenses are subject to market conditions, and we may find it necessary to increase driver and independent contractor rates

in future periods.

connection with the preparation of the Company’s audited financial statements for the year ended December 31, 2025, a material

weakness in the Company’s internal controls over financial reporting was identified and, if our remediation is not effective, or

if we fail to maintain an effective system of internal controls over financial reporting in the future, we may not be able to accurately

or timely report our financial condition or results of operations, which may adversely affect investor confidence and profitability.

have identified a material weakness in the Company’s internal controls over financial reporting.

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The material weakness

identified was related to IT general controls in Company’s financial systems and closing processes including account reconciliations

and review surrounding the close process.

steps are being taken designed to improve the Company’s internal controls over financial reporting to address the underlying causes,

designing and implementing increased controls, increased oversight and review of technical systems and engaging third-parties.

We continue to work on other remediation initiatives.

we believe that these efforts will improve the Company’s internal controls over financial reporting, the implementation of these

measures is ongoing and will require validation and testing of the design and operating effectiveness of internal controls over a sustained

period of financial reporting cycles.

If the steps we take do not remediate the material weaknesses in a timely manner, there could continue

to be a reasonable possibility that these control deficiencies or others could result in a material misstatement of our annual or interim

financial statements that would not be prevented or detected on a timely basis.

If we are unable to successfully remediate our existing

or any future material weakness, the accuracy of our financial reporting may be adversely affected, which could cause investors to lose

confidence in our financial reporting and our share price and profitability may decline as a result.

identified was related to IT general controls in Company’s financial systems and closing processes in the period after our IPO

and prior to full integration of systems, including account reconciliations and review surrounding the close process.

Remediation steps have been taken to improve the Company’s internal

controls over financial reporting to address the underlying causes, including:

completion of systems integration to a common enterprise

transportation management and accounting platform, designing and implementing increased controls, increased oversight and review of technical

systems and engaging third-parties to support control design and testing.

As of December 31, 2025, all operating companies have been converted

to one accounting technology platform, with the repair facilities scheduled for mid-2026.

Having all companies operating under one accounting

technology platform has allowed the Company to implement improved internal controls related to financial reporting and has given us more

oversight over the financial information being generated.

We have hired an independent consulting firm to assist with redesigning our

internal controls over financial reporting and information technology and anticipate being completed with all remaining remediation steps

we believe that our efforts have improved the Company’s internal controls over financial reporting, the implementation and oversight

of control measures is ongoing and will require validation and testing of the design and operating effectiveness of internal controls

over a sustained period of financial reporting cycles..

If, however, we are unable to successfully remediate the existing or any future

material weakness, the accuracy of our financial reporting may be adversely affected, which could cause investors to lose confidence

in our financial reporting and our share price and profitability may decline as a result.

prices for new equipment, trucks and their parts, and the decreased availability of new equipment or the failure of manufacturers to

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success depends in part on the contributions of our executives and managers, including those who were employees of the Founding Companies.

are highly dependent upon our senior management team.

In particular, the loss of the services of Richard O’Dell, Amy Rice or Brad

Wright could have a material adverse effect on our business, financial condition and results of operations.

We do not presently maintain

“key man” life insurance with respect to members of senior management.

In addition, our operating facilities are managed

by regional and local managers who have an average of 15 years of auto transportation and logistics experience and substantial knowledge

of the local markets served, including certain former owners and employees of the Founding Companies.

We are highly dependent upon our senior management team.

In particular,

the loss of the services of Richard O’Dell, Amy Rice or Brad Wright could have a material adverse effect on our business, financial

condition and results of operations, although we do have succession plans in place for these roles.

We do not presently maintain “key

man” life insurance with respect to members of senior management.

In addition, our operations are managed by regional and local

managers who have an average of 15 years of auto transportation and logistics experience and substantial knowledge of the local markets

served, including certain former owners and employees of the Founding Companies and those acquired thereafter.

We believe these employees’

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difficult to replicate.

The loss of one or more of these managers may have a material adverse effect on our business, financial condition

and results of operations in the event that we are unable to find a suitable replacement in a timely manner.

The loss of management talent could have a material adverse effect on our business, financial condition and results

of operations in the event that we are unable to find a suitable replacement in a timely manner.

timely, professional and dependable service required by auto transportation and logistics customers requires an adequate supply of skilled

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business may be seriously harmed if we fail to maintain, upgrade, enhance, protect, and integrate our information technology systems.

must ensure that our information technology systems remain competitive.

If our systems are unable to maintain high volumes with reliability,

accuracy and speed as the information technology systems are centralized and we continue to grow, our service levels and operating efficiencies

Additionally, if we fail to enhance our systems to meet customer needs, our results of operations could be harmed.

We must ensure that our information technology systems remain modern,

secure and effective to meet the needs of our business.

If our systems are unable to maintain high volumes with reliability, accuracy

and speed as we continue to grow, our service levels and operating efficiencies may decline.

Additionally, if we fail to enhance our systems

to meet customer needs and evolving cybersecurity best practices, our results of operations could be harmed.

technology risks, including the risk of cyberattacks, may disrupt our business, result in losses or limit our growth.

rely heavily on our financial, accounting, treasury, communications and other data processing systems and a continued and efficient operation

of such systems.

Such systems may fail to operate properly or become disabled because of tampering or a breach of the network security

systems or otherwise.

In addition, such systems are from time to time subject to cyberattacks which may continue to increase in sophistication

and frequency in the future.

security incidents and cyber-attacks have been occurring globally at a more frequent and severe levels and will likely continue

to increase in frequency in the future.

Our information and technology systems may be vulnerable to damage or interruption from cyber

security breaches, computer viruses or other malicious code, network failures, computer and telecommunication failures, infiltration

by unauthorized persons and other security breaches, usage errors by their respective professionals or service providers, power, communications

or other service outages and catastrophic events such as fires, tornadoes, floods, hurricanes and earthquakes.

Cyberattacks and other

security threats could originate from a wide variety of sources, including cyber criminals, nation state hackers, hacktivists and other

outside parties.

If successful, these types of attacks on our network or other systems could have a material adverse effect on our business

and results of operations, due to, among other things, the loss of proprietary data, interruptions or delays in the operation of our

business and damage to our reputation.

There can be no assurance that measures we take to evaluate the integrity of our systems will

provide protection, especially because cyberattack techniques used change frequently or are not recognized until successful.

risk management systems could prove to be inadequate and, if compromised, could become inoperable for extended periods of time, cease

to function properly or fail to adequately secure private information.

We do not control the cyber security plans and systems put in

place by third-party service providers, and such third-party service providers may have limited indemnification obligations

Breaches such as those involving covertly introduced malware, impersonation of authorized users and industrial or other espionage

may not be identified even with sophisticated prevention and detection systems, potentially resulting in further harm and preventing

them from being addressed appropriately.

The failure of these systems or of disaster recovery plans for any reason could cause significant

interruptions in our operations and result in a failure to maintain the security, confidentiality or privacy of sensitive data, including

personal information relating to stockholders and material nonpublic information.

We could be required to make a significant investment

to remedy the effects of any such failures, harm to our reputations, legal claims we may be subjected to, regulatory action or enforcement

arising out of applicable privacy and other laws, adverse publicity and other events that may affect our business and financial performance.

contractual agreements with our owner-operators expose us to risks that we do not face with company drivers.

reliance on independent owner-operators creates numerous risks for our business.

For example, if our independent owner-operators fail

to meet our contractual obligations or otherwise fail to perform in a manner consistent with our requirements, we may be required to

utilize alternative service providers at potentially higher prices or with some degree of disruption of the services that we provide

to customers.

If we fail to deliver on time, if the contractual obligations are not otherwise met, or if the costs of our services increase,

then our profitability and customer relationships could be harmed.

Owner-operators are

third-party service providers, as compared to company drivers who are employed by us.

As independent business owners, our owner-operators may

make business or personal decisions that conflict with our best interests.

For example, if a load is unprofitable, route distance is too

far from home or personal scheduling conflicts arise, an owner-operator may deny loads of freight from time to time.

circumstances, we must be able to timely deliver the freight in order to maintain relationships with customers.

In addition, adverse changes

in the financial condition of our independent contractor owner-operators or increases in their equipment or operating costs could

cause them to seek higher revenues.

We rely heavily on our financial, accounting, treasury, communications

and other data processing systems and continued and efficient operation of such systems.

Despite cybersecurity programs and policies,

such systems may fail to operate properly or become disabled because of tampering or a breach of the network security systems or otherwise.

In addition, such systems could be subject to cyberattacks, which may continue to increase in sophistication and frequency in the future.

Cybersecurity

incidents and cyber-attacks have been occurring globally at a more frequent and severe levels and will likely continue to increase

in frequency in the future.

Our information and technology systems may be vulnerable to damage or interruption from cybersecurity breaches,

computer viruses or other malicious code, network failures, computer and telecommunication failures, infiltration by unauthorized persons

and other security breaches, usage errors by their respective professionals or service providers, power, communications or other service

outages and catastrophic events such as fires, tornadoes, floods, hurricanes and earthquakes.

Cyberattacks and other security threats

could originate from a wide variety of sources, including cyber criminals, nation state hackers, hacktivists and other outside parties.

If successful, these types of attacks on our network or other systems could have a material adverse effect on our business and results

of operations, due to, among other things, the loss of proprietary data, interruptions or delays in the operation of our business and

damage to our reputation.

There can be no assurance that measures we take to evaluate the integrity of our systems will provide protection,

especially because cyberattack techniques used change frequently or are not recognized until successful.

risk management systems, though consistent with best practices, could prove to be inadequate and, if compromised, we could become inoperable

for extended periods of time, cease to function properly or fail to adequately secure private information.

We do not control the cybersecurity

plans and systems put in place by third-party service providers, and such third-party service providers may have limited indemnification

obligations to us.

Breaches such as those involving covertly introduced malware, impersonation of authorized users and industrial or

other espionage may not be identified even with sophisticated prevention and detection systems, potentially resulting in further harm

and preventing them from being addressed appropriately.

The failure of these systems or of disaster recovery plans for any reason could

cause significant interruptions in our operations and result in a failure to maintain the security, confidentiality or privacy of sensitive

data, including personal information relating to stockholders and material nonpublic information.

We could be required to make a significant

investment to remedy the effects of any such failures, harm to our reputations, legal claims we may be subjected to, regulatory action

or enforcement arising out of applicable privacy and other laws, adverse publicity and other events that may affect our business and

financial performance.

contractual agreements with independent contractor owner-operators and third-party carriers expose us to risks that we do not

face with Company drivers.

use of independent contractor owner-operators and third-party carriers for portions of capacity creates numerous risks for our business.

For example, if these independent contractors fail to meet contractual obligations or otherwise fail to perform in a manner consistent

with customer requirements, we may be required to utilize alternative service providers at potentially higher prices or with some degree

of disruption of the services that we provide to customers.

If we fail to deliver on time, if the contractual obligations are not otherwise

met, or if the costs of our services increase, then our profitability and customer relationships could be harmed.

Owner-operators and third-party carriers are independent contractor service

providers, as compared to Company drivers, who are employees.

As independent business owners, these independent contractors may make

business or personal decisions that conflict with our best interests.

For example, if a load is unprofitable, route distance is too far

from home or personal scheduling conflicts arise, an independent contractor may deny loads of freight.

In these circumstances,

we must be able to timely deliver the freight in order to maintain relationships with customers.

In addition, adverse changes in the financial

condition of our independent contractor network or increases in their equipment or operating costs could pose a threat to their viability

to support this industry.

are directly affected by the state of the global economy and geopolitical developments.

transportation industry is susceptible to trends in economic activity.

As our business is to transport automobiles, our business levels

are directly tied to the purchase and production of goods and the rate of growth of global trade — key macroeconomic measurements

influenced by, among other things, inflation and deflation, supply chain disruptions, interest rates and currency exchange rates, labor

costs and unemployment rates, labor shortages or strikes, fuel and energy prices, public health crises, inventory levels, buying patterns

and disposable income, debt levels, and credit availability.

In addition, the current presidential administration has stated its intention

to impose new or increased tariffs on imported goods – specifically automobiles – from countries that include Canada, Mexico

and the European Union.

Such trade policies and tariff implementations, and any related retaliatory trade policies and tariff implementations

by foreign governments may result in decreased shipping volumes and increased product costs, and could have a material adverse effect

on our revenues and results of operations.

The transportation industry is susceptible to trends in economic activity.

As our business is to transport automobiles, our business levels are directly tied to the purchase and production of goods and the rate

of growth of global trade — key macroeconomic measurements influenced by, among other things, inflation and deflation,

supply chain disruptions, interest rates and currency exchange rates, labor costs and unemployment rates, labor shortages or strikes,

fuel and energy prices, public health crises, military conflicts, inventory levels, buying patterns and disposable income, debt levels,

and credit availability.

In addition, the current presidential administration has imposed tariffs on imported goods – specifically

automobiles – from countries that include Canada, Mexico, the European Union, and Asian countries.

Such trade policies and tariff

implementation, and any related retaliatory trade policies and tariff implementation by foreign governments, have resulted and may continue

to result in decreased shipping volumes and increased product costs, and could have a material adverse effect on our revenues and results

of operations.

quarterly results may fluctuate significantly and may not fully reflect the underlying performance of our business.

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our success in integrating acquired companies;

the loss of significant customers

or contracts;

the gain or loss of significant

customers or contracts;

the timing of expenditures for new equipment and the disposition of used equipment;

variation in the level of self-insured

claims costs;

variation in the level of

self-insured claims costs;

price changes in response to competitive factors;

and general economic conditions.

As a result of these fluctuations, results

for any one quarter should not be relied upon as being indicative of performance in future quarters.

As a result of these fluctuations,

results for any one quarter should not be relied upon as being indicative of performance in future quarters.

business and operating results are subject to seasonal fluctuations, which could result in fluctuations in our operating results and

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Specifically, there are times when auto manufacturing

plants have maintenance time off which impacts the auto delivery cycle.

Auto transportation and logistics tends to be strongest in the months

with the mildest weather because inclement weather tends to slow the delivery of vehicles.

plants have maintenance down time, which can be prolonged from time to time and impacts the auto production and delivery cycle.

transportation and logistics tends to be stronger in the months with the mildest weather because inclement weather tends to slow

the delivery of vehicles.

stockholders and management will have significant control over stockholder matters .

Approximately

24.3% of our outstanding common stock is beneficially owned by the executive officers and directors and the former stockholders of

the Founding Companies, including their respective affiliates.

Approximately 13.2% of our outstanding common stock is beneficially

owned by the executive officers and directors, as of March 16, 2026.

Accordingly, these persons, if acting in concert, will hold sufficient

voting power to enable them to significantly influence the election of all of the directors and the outcome of all issues submitted to

a vote of our stockholders.

Such concentration of ownership may have the effect of delaying, deferring or preventing a change in control

of the Company, including transactions in which the holders of common stock might receive a premium for their shares over prevailing

market prices.

Risks Related to

the Securities Markets and Ownership of Our Common Stock

active and liquid trading market for our common stock may not be sustained and the lack of an active and liquid market could affect a

shareholder’s ability to sell shares of the Company’s common stock or the price at which they may be sold.

voting power to enable them to significantly influence the election of directors and the outcome of all issues submitted to a vote of

our stockholders.

Such concentration of ownership may have the effect of delaying, deferring or preventing a change in control of the

Company, including transactions in which the holders of common stock might receive a premium for their shares over prevailing market prices.

Related to the Securities Markets and Ownership of Our Common Stock

An active and liquid trading market for our common stock may not be

sustained and the lack of an active and liquid market could affect a stockholder’s ability to sell shares of the Company’s

common stock or the price at which they may be sold.

to May 2024, no market for shares of our common stock existed.

Our common stock is listed on the Nasdaq Global Market under the symbol

“PAL.” An active or liquid trading market for our common stock may not be sustained.

An active or liquid trading market for our common stock may not be sustained.

The lack of an active market may also

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stock price may be volatile, which could cause you to lose all or part of your investment in our common stock.

market price of our common stock may be volatile and could fluctuate widely in response to many factors, some of which are beyond our

These fluctuations could cause you to lose all or part of your investment in our common stock since you might be unable to sell

your shares at or above the price you paid for such shares.

The following factors, in addition to other factors included elsewhere in

this Annual Report, may have a significant impact on the market price of our common stock:

volatility and instability in the financial and capital markets;

our operating and financial performance, quarterly or annual earnings relative to similar companies;

announcements by competitors that impact our competitive outlook;

publication of news stories about us, our competitors or our industry;

the public’s reaction to our press releases, our other public announcements and

our filings with the SEC;

announcements relating to strategic transactions, including acquisitions, collaborations,

or similar arrangements;

sales of our common stock by the Company, our insiders, or other stockholders,

or issuances by the Company of shares of our common stock in connection with strategic transactions;

regulatory developments or legal developments;

The market price of our common stock may be volatile and could fluctuate

widely in response to many factors, some of which are beyond our control.

These fluctuations could cause an investor to lose all or part

of their investment in our common stock since one might be unable to sell shares at or above the price paid for such shares.

The following

factors, in addition to other factors included elsewhere in this Annual Report, may have a significant impact on the market price of our

common stock:

volatility and instability

in the financial and capital markets;

our operating and financial performance, quarterly

or annual earnings relative to similar companies;

announcements by competitors

that impact our competitive outlook;

publication of news stories

about us, our competitors or our industry;

the public’s reaction

to our press releases, our other public announcements and our filings with the SEC;

announcements relating

to strategic transactions, including acquisitions, collaborations, or similar arrangements;

sales of our common stock

by the Company, our insiders, or other stockholders, or issuances by the Company of shares of our common stock in connection with

strategic transactions;

regulatory developments

or legal developments;

litigation or arbitration;

changes in accounting standards, policies, guidance, interpretations or principles;

general economic, political and market conditions and other factors;

the occurrence of any of the risks described in this section titled “Risk Factors.”

changes in accounting standards,

policies, guidance, interpretations or principles;

general economic, political

and market conditions and other factors;

the occurrence of any of

the risks described in this section titled “Risk Factors.”

securities or industry analysts discontinue publishing research or reports about our business, or if they publish inaccurate or unfavorable

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We do not have any control over the industry or securities analysts, or the content and opinions included in

their reports and may never obtain research coverage by securities and industry analysts.

their reports and we may not obtain research coverage by securities and industry analysts.

If securities or industry analysts discontinue

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of a substantial number of our shares of common stock in the public market could cause our stock price to fall.

common stock price could decline as a result of sales of a large number of shares of common stock or the perception that these sales could

These sales, or the possibility that these sales may occur, might also make it more difficult for the Company to sell equity securities

in the future at a time and price that the Company deems appropriate.

common stock price could decline as a result of sales of a large number of shares of common stock or the perception that these sales

These sales, or the possibility that these sales may occur, might also make it more difficult for the Company to sell equity

securities in the future at a time and price that the Company deems appropriate.

of December 31, 2025, we had 27,834,799 shares of common stock outstanding, all of which were freely tradable without restriction

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“affiliates” as defined in Rule 144 under the Securities Act.

In addition, in the future, the Company may issue additional shares

of common stock, or other equity or debt securities convertible into common stock, in connection with a financing, acquisition, employee

arrangement or otherwise.

Any such issuance could result in substantial dilution to our existing stockholders and could cause the price

of our common stock to decline.

addition, in the future, the Company may issue additional shares of common stock, or other equity or debt securities convertible into

common stock, in connection with a financing, acquisition, employee arrangement or otherwise.

Any such issuance could result in substantial

dilution to our existing stockholders and could cause the price of our common stock to decline.

Anti-takeover provisions

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and may prevent attempts by our stockholders to replace or remove our current management.

restated certificate of incorporation and our amended and restated bylaws contain provisions that could depress the market price of our

common stock by acting to discourage, delay or prevent a change in control of the Company.

These provisions could also make it difficult

for stockholders to elect directors who are not nominated by current members of our Board of Directors (the “Board”) or take

other corporate actions, including effecting changes in our management.

Our amended and restated certificate of incorporation and our amended

and restated bylaws contain provisions that could depress the market price of our common stock by acting to discourage, delay or prevent

a change in control of the Company.

These provisions could also make it difficult for stockholders to elect directors who are not nominated

by current members of our Board of Directors (the “Board”) or take other corporate actions, including effecting changes in

our management.

These provisions:

permit only the Board to establish the number of directors and fill vacancies on the

board of directors;

provide that directors may only be removed “for cause” and only with the

approval of two-thirds of our stockholders;

require super-majority voting to amend some provisions in our restated certificate

of incorporation and amended and restated bylaws;

authorize the issuance of “blank check” preferred stock that our board of

directors could use to implement a stockholder rights plan;

eliminate the ability of our stockholders to call special meetings of stockholders;

prohibit stockholder action by written consent, which requires all stockholder actions

to be taken at a meeting of our stockholders;

permit only the Board to

establish the number of directors and fill vacancies on the board of directors;

provide that directors

may only be removed “for cause” and only with the approval of two-thirds of our stockholders;

require super-majority voting to amend some provisions in our amended and restated certificate of incorporation and amended and restated bylaws;

authorize the issuance

of “blank check” preferred stock that our board of directors could use to implement a stockholder rights plan;

eliminate the ability of

our stockholders to call special meetings of stockholders;

prohibit stockholder action

by written consent, which requires all stockholder actions to be taken at a meeting of our stockholders;

prohibit cumulative voting;

establish advance notice requirements for nominations for election to our board of directors

or for proposing matters that can be acted upon by stockholders at annual stockholder meetings.

establish advance notice

requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders

at annual stockholder meetings.

addition, Section 203 of the Delaware General Corporation Law (the “DGCL”) prohibits a publicly held Delaware corporation

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in which the person became an interested stockholder, unless the transaction is approved in a prescribed manner.

provision of our certificate of incorporation, amended and restated bylaws or Delaware law that has the effect of delaying or preventing

a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock and could

also affect the price that some investors are willing to pay for our common stock.

Any provision of our certificate of incorporation, amended and restated

bylaws or the DGCL that has the effect of delaying or preventing a change in control could limit the opportunity for our stockholders

to receive a premium for their shares of our common stock and could also affect the price that some investors are willing to pay for our

common stock.

exclusive forum provisions in our organizational documents may limit a stockholder’s ability to bring a claim in a judicial forum

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to such claims.

amended and restated certificate of incorporation, to the fullest extent permitted by law, provides that the Court of Chancery of the

State of Delaware (or, if such court does not have subject matter jurisdiction thereof, the federal district court of the District of

Delaware or other state courts of the State of Delaware) is the exclusive forum for:

any derivative action or proceeding brought on our

Our amended and restated certificate of incorporation, to the fullest

extent permitted by law, provides that the Court of Chancery of the State of Delaware (or, if such court does not have subject matter

jurisdiction thereof, the federal district court of the District of Delaware or other state courts of the State of Delaware) is the exclusive

any derivative action or proceeding brought on our behalf;

any action asserting a breach of fiduciary duty;

any action asserting a claim against us arising pursuant to the DGCL, our restated

certificate of incorporation, or our amended and restated bylaws;

or any action asserting a claim that is governed by the internal affairs

This exclusive forum provision does not apply to suits brought to enforce a duty or liability created by the Exchange Act.

choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes

with us or any of our directors, officers, or other employees, which may discourage lawsuits with respect to such claims.

Alternatively,

if a court were to find the choice of forum provisions contained in our restated certificate of incorporation to be inapplicable or unenforceable

in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business,

financial condition, results of operations and prospects.

any action asserting

a claim against us arising pursuant to the DGCL, our amended and restated certificate of incorporation, or our amended and restated bylaws;

or any action asserting a claim that is governed by the internal affairs doctrine.

This exclusive forum provision does not apply to suits

brought to enforce a duty or liability created by the Exchange Act.

This choice of forum provision may limit a stockholder’s ability

to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers, or other employees,

which may discourage lawsuits with respect to such claims.

Alternatively, if a court were to find the choice of forum provisions contained

in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs

associated with resolving such action in other jurisdictions, which could harm our business, financial condition, results of operations

and prospects.

of the Securities Act creates concurrent jurisdiction for federal and state courts over all claims brought to enforce any duty or liability

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sole source of gain.

have never declared nor paid dividends on our capital stock.

We currently intend to retain all of our future earnings, if any, to finance

the growth and development, operation and expansion of our business and we do not anticipate declaring or paying any dividends in the

foreseeable future.

As a result, capital appreciation of our common stock, which may never occur, will be your sole source of gain on

your investment for the foreseeable future.

General Risk Factors

We have never declared nor paid dividends on our capital stock.

expect to prioritize the retention of our future earnings, if any, to finance the growth and development, operation and expansion of our

business and we do not anticipate declaring or paying any dividends in the foreseeable future.

As a result, capital appreciation of our

common stock, which may never occur, will be your sole source of gain on your investment for the foreseeable future.

requirements of being a public company may strain our resources, result in more litigation and divert management’s attention.

a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Wall

Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), the listing requirements of the Nasdaq Global Market

and other applicable securities rules and regulations.

Complying with these rules and regulations has increased and will increase our

legal and financial compliance costs, make some activities more difficult, time consuming or costly and increase demand on our systems

and resources.

The Exchange Act requires, among other things, that we file annual, quarterly and current reports with respect to

our business and results of operations.

The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure

controls and procedures and internal control over financial reporting.

We are required to disclose changes made in our internal control

and procedures on a quarterly basis.

In order to maintain and, if required, improve our disclosure controls and procedures and internal

control over financial reporting to meet this standard, significant resources and management oversight may be required.

management’s attention may be diverted from other business concerns, which could adversely affect our business and results of operations.

We may also need to hire additional employees or engage outside consultants to comply with these requirements, which will increase our

costs and expenses.

As a public company, we are subject to the reporting requirements of

the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements

of the Nasdaq Global Market and other applicable securities rules and regulations.

Complying with these rules and regulations has increased

and will increase our legal and financial compliance costs, make some activities more difficult, time consuming or costly and increase

demand on our systems and resources.

The Exchange Act requires, among other things, that we file annual, quarterly and current reports

with respect to our business and results of operations.

The Sarbanes-Oxley Act requires, among other things, that we maintain effective

disclosure controls and procedures and internal control over financial reporting.

We are required to disclose changes made in our internal

control and procedures on a quarterly basis.

In order to maintain and, if required, improve our disclosure controls and procedures and

internal control over financial reporting to meet this standard, significant resources and management oversight may be required.

result, management’s attention may be diverted from other business concerns, which could adversely affect our business and results

of operations.

We may also need to hire additional employees or engage outside consultants to comply with these requirements, which will

increase our costs and expenses.

addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for

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Committee, and qualified executive officers.

By disclosing information in this Annual Report and in future filings

required of a public company, our business and financial condition will become more visible, which we believe may result in threatened

or actual litigation, including by competitors and other third parties.

If those claims are successful, our business could be seriously

Even if the claims do not result in litigation or are resolved in our favor, the time and resources needed to resolve them could

divert our management’s resources and seriously harm our business.

disclosing information in this Annual Report and in future filings required of a public company, our business and financial condition

will become more visible, which we believe may result in threatened or actual litigation, including by competitors and other third parties.

If those claims were successful, our business could be seriously harmed.

Even if the claims did not result in litigation or were resolved

in our favor, the time and resources needed to resolve them could divert our management’s resources and seriously harm our business.

are an “emerging growth company” and we cannot be certain if the reduced reporting requirements applicable to emerging growth

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and stockholder approval of any golden parachute payments not approved previously.

could be an emerging growth company for up to five years following the completion of the IPO, although circumstances could cause

us to lose that status earlier, including if we are deemed to be a “large accelerated filer,” or if we have total annual

gross revenue of $1.235 billion or more during any fiscal year before that time, in which cases we would no longer be an emerging

growth company as of the December 31 of such year, or if we issue more than $1.0 billion in non-convertible debt during

any three-year period before that time, in which case we would no longer be an emerging growth company immediately.

We could be an emerging growth company for up to five years following

the completion of the IPO, although circumstances could cause us to lose that status earlier, including if we are deemed to be a “large

accelerated filer,” or if we have total annual gross revenue of $1.235 billion or more during any fiscal year before that time,

in which cases we would no longer be an emerging growth company as of December 31st, or if we issue more than $1.0 billion in

non-convertible debt during any three-year period before that time, in which case we would no longer be an emerging growth company

the JOBS Act, emerging growth companies can also delay adopting new or revised accounting standards until such time as those standards

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increases in unemployment rates, recession risks, and uncertainty about economic and geopolitical stability (e.g., related to the ongoing

Russia-Ukraine conflict and Israel-Palestine conflict).

The extent of the impact of these conditions on our operational and

financial performance, including our ability to execute our business strategies and initiatives in the expected timeframe, as well as

that of third parties upon whom we rely, will depend on future developments which are uncertain and cannot be predicted.

no assurance that further deterioration in economic or market conditions will not occur, or how long these challenges will persist.

the current equity and credit markets further deteriorate, or do not improve, it may make any necessary debt or equity financing more

difficult, more costly, and more dilutive.

Furthermore, our stock price may decline due in part to the volatility of the stock market

and the general economic downturn.

Russia-Ukraine conflict and Middle East conflict).

The extent of the impact of these conditions on our operational and financial

performance, including our ability to execute our business strategies and initiatives in the expected timeframe, as well as that of third

parties upon whom we rely, will depend on future developments which are uncertain and cannot be predicted.

There can be no assurance

that further deterioration in economic or market conditions will not occur, or how long these challenges will persist.

If the current

equity and credit markets further deteriorate, or do not improve, it may make any necessary debt or equity financing more difficult,

more costly, and more dilutive.

Furthermore, our stock price may decline due in part to the volatility of the stock market and the general

economic downturn.

success of our business is dependent on our brand equity .

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increased impacts of severe weather events on our operations.

over climate change, including the effect of global warming, has led to significant U.S.

and international legislative and regulatory

efforts to limit emissions, including vehicle engine emissions.

Increasingly, state and local governments are also considering greenhouse

gas regulatory (“GHG”) requirements.

Compliance with such regulation and the associated potential cost is complicated by

the fact that various countries and regions are following different approaches to the regulation of climate change.

Increased regulation

regarding GHG emissions, vehicle engine emissions, could impose substantial costs on us.

These costs include an increase in the cost

of the fuel and other energy we purchase to transport vehicles.

Until the timing, scope, and extent of such possible regulation becomes

known, we cannot predict its effect on our cost structure or our operating results.

It is reasonably possible, however, that it could

materially increase our operating expenses and have an adverse direct or indirect effect on our business, if instituted.

Company is subject to risks associated with climate change, including potential regulation of GHG emissions, fuel efficiency standards,

and severe weather impacts on auto haul operations.

Under the current federal administration, certain existing and/or proposed standards

face review, potential rollback or delays, though core requirements remain subject to ongoing implementation and litigation, and we remain

mindful of state-specific mandates.

March 2024, the EPA –with National Highway Traffic Safety Administration (“NHTSA”) coordination on fuel efficiency–finalized

Phase 3 GHG and fuel efficiency standards for heavy-duty vehicles and tractors, phasing in from model year 2027 with substantial reductions

through 2032 and beyond.

However, on February 12, 2026, the EPA finalized rescission of the 2009 GHG Endangerment Finding and repealed

all subsequent federal GHG standards for light-, medium-, and heavy-duty vehicles/engines, including Phase 3.

Published February 18,

2026, and effective April 20, 2026, this removes federal compliance, testing, reporting, and reduction obligations absent further developments.

The rescission faces legal challenges with uncertain outcomes that could stay, remand, or reinstate standards.

the state level, California and certain Section 177 states (including Colorado, Maryland, Massachusetts, New Jersey, New Mexico, New

York, Oregon, Rhode Island, and Washington) had implemented rules like the Advanced Clean Trucks (“ACT”) regulation, mandating

increasing ZEV percentages in medium- and heavy-duty truck sales.

Following June 2025 Congressional Review Act (“CRA”) revocation

of related EPA waivers and the February 2026 federal rescission, enforcement has been paused or delayed in several states amid ongoing

State and local governments continue considering additional GHG requirements for trucking.

Company continues to monitor these developments and related federal, state, and international regulations concerning GHG emissions, fuel

efficiency, zero-emission mandates, and alternative technologies in the transportation sector, as changes could impact compliance costs,

vehicle design, and the supply chain.

regulation of GHG emissions, fuel efficiency, and vehicle standards—along with tariffs on imported equipment, steel, aluminum,

and components—could pose substantial costs on our auto haul trucking business.

Recent tariffs, including 25% duties on medium-

and heavy-duty trucks and parts and elevated rates on steel and aluminum, may raise acquisition costs for new vehicles and maintenance

components, potentially delaying fleet modernization and investments in fuel-efficient or low-emission technologies.

These costs may

include higher prices for compliant equipment;

increased fuel costs;

investments in fleet retrofits;

and expenses related to emissions

credits, offsets, or reporting.

Furthermore, the operating performance of next-generation tractors has not yet been demonstrated at scale

for auto haul operations, representing implementation risk to be managed in addition to the cost risks.

Additionally,

the potential acute and chronic physical effects of climate change—such as increased frequency and severity of storms, floods,

fires, sea-level rise, excessive heat, longer-term changes in weather patterns and other climate-related events, could

affect our operations, infrastructure and financial results.

Operational impacts, such as more frequent delays in our ability to transport

cargo, could result in loss of revenue.

We could incur significant costs to improve the climate resiliency of our infrastructure and

otherwise prepare for, respond to, and mitigate such physical effects of climate change.

We are not able to predict accurately

the materiality of any potential losses or costs associated with the physical effects of climate change.

wildfires, extreme heat, droughts, and longer-term shifts in weather patterns—could disrupt our auto haul operations, which involve

transporting vehicles across North America via highways, interstates, and terminals exposed to these risks.

For example, severe weather

events like Hurricane Helene in 2024, which disrupted Southeast auto logistics corridors, could cause road closures, bridge outages,

or port delays, leading to shipment rerouting, extended transit times, and penalties for late deliveries to automobile manufacturers

Damage to terminals, yards, or third-party rail ramps from floods or wildfires could halt operations and require costly

disruptions may result in lost revenue, higher insurance premiums or claims, and customer attrition.

The Company maintains insurance

coverage for auto liability, general liability, cargo damage, property damage, and other risks customary in our industry;

are partially self-insured and retain significant deductibles or retentions.

Insurance premiums and availability are subject to volatility

driven by market conditions, our claims history, accident rates, catastrophic events (including severe weather), and broader industry

If claims exceed our coverage limits or self-insured retentions, premiums increase materially, or coverage becomes limited or

unavailable, it could have a material adverse effect on our operating results and financial condition.

Company could incur significant capital expenditures to enhance infrastructure resiliency (e.g., hardening facilities against high winds,

backup power).

The frequency, severity, or materiality of losses/costs from physical climate effects on operations, facilities, or supply

chain cannot be accurately predicted.

To mitigate risks and advance sustainability, the Company pursues initiatives

such as in-cab telematics for optimization/efficiency, driver coaching, proactive maintenance, and fuel management (detailed in “Item

Business—Environment and Sustainability”).

The Company owns or leases six U.S.

maintenance facilities, all retrofitted

with light-emitting diode (“LED”) lighting and high-efficiency heating, ventilation, and air conditioning (“HVAC”)

to reduce energy use.

A comprehensive recycling program covers tires, used oil, coolant, batteries, combustible materials, and other waste;

replacement parts are recycled or refurbished where feasible.

No assurances are provided that these measures will fully offset climate

impacts or achieve specific outcomes, as results depend on factors including regulations, technology, and conditions.

The Company continues

monitoring risks and opportunities and may adopt further initiatives.

may be subject to securities litigation, which is expensive and could divert management attention.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors