What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-03-31 compared with 2025-03-31 · 495 added, 620 removed, 234 unchanged (83% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

following discussion should be read in conjunction with the consolidated financial statements and the notes to those statements included

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Actual results could differ materially from the results referenced in forward-looking statements.

are a leading specialized freight company focused on providing auto

transportation and logistics services.

Formed in connection with the IPO through the combination of five industry-leading operating

companies, we operate one of the largest auto transportation fleets in North America based upon information obtained from leadership of

the Auto Haulers Association of America, utilizing roughly 1,145 auto transport vehicles and trailers on a daily basis, including approximately

845 Company-owned transport vehicles and trailers, and employing 671 dedicated employees as of December 31, 2024.

Prior to the completion

of the IPO, we had not operated as a combined company.

From our 50 strategically located facilities across the United States, we

offer a broad range of auto transportation and logistics services, primarily focused on transporting finished vehicles from automotive

production facilities, marine ports of entry or regional rail yards to auto dealerships around the country.

We have developed a differentiated

business model due to our scale, breadth of geographic coverage and embedded customer relationships with leading auto OEMs.

are a leading specialized freight company focused on providing auto transportation and logistics services.

Formed in connection with

the IPO through the combination of five industry-leading operating companies, we operate one of the largest auto transportation fleets

in North America with an operating fleet of approximately 800 owned assets and employing 825 dedicated employees as of December 31, 2025.

From our 57 strategically located facilities across the United States, we offer a broad range of auto transportation and logistics services,

primarily focused on transporting finished vehicles from automotive production facilities, marine ports of entry or regional rail yards

to auto dealerships around the country.

We have developed a differentiated business model due to our scale, breadth of geographic coverage

and embedded customer relationships with leading auto original equipment manufacturing companies (“OEMs”).

Our customers

range from large, global auto companies, such as General Motors, BMW, Stellantis, and Mercedes-Benz, to EV producers, such as Tesla and

Additional customers include auto dealers, auto auctions, rental car companies and auto leasing companies.

include nearly all of the global auto manufacturing companies who operate in the U.S.

Additional customers include auto dealers,

auto auctions, rental car companies and auto leasing companies.

of the Combinations

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Subsequently on November 1, 2024, the Company acquired

Utah Truck & Trailer Repair, LLC, (“UTT”), a repair facility located at the ATG headquarters terminal in Ogden, Utah for

$4.5 million in cash.

Utah Truck & Trailer Repair, LLC, (“UTT”), a repair facility located at the ATG headquarters terminal in Ogden, Utah

for $4.5 million in cash.

These acquisitions expanded the Company’s geographic presence and services offered.

The Combinations and subsequent

acquisitions are accounted for as business combinations under ASC 805.

On April 1, 2025,

the Company acquired Brothers Auto Transport (“Brothers”), for approximately $12.4 million in cash and 395,322 shares of

our common stock.

Then on May 27, 2025, the Company acquired PVT Truck & Trailer Repair, LLC, a repair facility located at the Brothers

headquarters terminal in Wind Gap, Pennsylvania for $1.0 million in cash.

The Combinations and subsequent acquisitions are accounted

for as business combinations under ASC 805.

Under this method of accounting, Proficient Auto Logistics, Inc.

is treated as the “accounting acquirer.”

is treated as the “accounting

Auto Logistics, Inc.

has been identified as the designated accounting acquirer (“Successor”) of each of the Founding

Companies and Proficient Transport has been identified as the designated accounting predecessor (“Predecessor”) to the

As a result, the Management’s Discussion and Analysis of Results of Operations and Financial Condition for the twelve

months ended December 31, 2024 for each of Proficient and Proficient Transport are included in this Annual Report.

between the Successor and Predecessor periods has been placed in the financial tables below to highlight the lack of comparability

between these two periods.

has been identified as the designated accounting acquirer (“Successor”) of each of the Founding Companies

and Proficient Transport has been identified as the designated accounting predecessor (“Predecessor”) to the Company.

a result, the Management’s Discussion and Analysis of Results of Operations and Financial Condition for the twelve months ended

December 31, 2025 and 2024 for each of Proficient and Proficient Transport are included in this Annual Report.

A black-line between the

Successor and Predecessor periods has been placed in the financial tables below to highlight the lack of comparability between these

Please refer to Note 3, “Business Combinations.”

Statement Components

generate revenue by transporting autos for our customers in our OEM contract and spot arrangements, secondary market auto moves, and our

contract services arrangements.

Our OEM contract and spot arrangements provide auto transportation and logistics services through movements

of autos over routes across the United States.

generate revenue by transporting autos for our customers in OEM contract and spot arrangements, secondary market auto moves, and contract

services arrangements.

Our OEM contract and spot arrangements provide auto transportation and logistics services through movements of

autos over routes across the United States.

Secondary market auto moves are for customers other than OEMs.

Our contract services

offering devotes the use of equipment to specific customers and provides services through long-term contracts.

Our business provides

services that are geographically diversified but have similar economic and other relevant characteristics, as they all provide transportation

and logistics of automobiles.

are typically paid a predetermined rate per unit for our Company Drivers services.

Consistent with industry practice, our typical customer

contracts do not guarantee load levels or tractor availability.

This gives us and our customers a certain degree of flexibility in response

to changes in auto demand and truck capacity.

offering uses Company-owned equipment to service specific customers and provides services through long-term contracts.

provides services that are geographically diversified but have similar economic and other relevant characteristics, as they all provide

transportation and logistics of automobiles.

are typically paid a predetermined rate per unit for our services.

Consistent with industry practice, our typical customer contracts

do not guarantee load levels or tractor availability.

This gives us and our customers a certain degree of flexibility in response to

changes in auto demand and truck capacity.

we receive fuel surcharges on the miles moved for which we are compensated by customers.

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however, these revenues may not fully protect us from all fuel price

monitor as key operating metrics average revenue per unit and average revenue per loaded mile, as applicable to the portions of our business

that contract on each of these bases.

monitor as key operating metrics the volume of units delivered, average revenue per unit and adjusted operating ratio, as applicable

to the portions of our business that contract on each of these bases.

most significant operating expenses vary with miles traveled and include (i) fuel and fuel taxes, (ii) driver related expenses,

such as salaries, wages, benefits, training and recruitment, (iii) the cost of purchased transportation that we pay to third-party carriers

and (iv) maintenance of our fleet.

Expenses that have both fixed and variable components include maintenance and tire expense and

our total cost of insurance and claims.

These expenses generally vary with the miles we travel, but also have a controllable component

based on safety, fleet age, efficiency and other factors.

Our main fixed costs include depreciation of long-term assets, such as

revenue equipment and service center facilities, the compensation of non-driver personnel and other general and administrative expenses.

such as salaries, wages, benefits, training and recruitment, (iii) the cost of purchased transportation that we pay independent

contractors and to third-party carriers and (iv) maintenance of our fleet.

Expenses that have both fixed and variable components

include maintenance and truck expenses and our total cost of insurance and claims.

These expenses generally vary with the miles we travel,

but also have a controllable component based on safety, fleet age, efficiency and other factors.

Our main fixed costs include depreciation

of long-term assets, such as revenue equipment and leasing costs for our service center facilities, the compensation of non-driver personnel

and other general and administrative expenses.

Accounting Policies and Estimates

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most subjective and complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently

See Note 2 of the accompanying condensed consolidated financial statements of the Company for additional information

about our critical accounting policies and estimates.

See Note 2 of the accompanying consolidated financial statements of the Company for additional information about our

critical accounting policies and estimates.

and equipment

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The depreciable lives of our revenue equipment represent the estimated usage period of the equipment, which

may be less than the economic lives.

may be more or less than the economic lives.

Periodically,

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Combinations.

For each acquisition, the Company recognizes the assets acquired and liabilities assumed at their respective fair

values as of the acquisition date.

Valuations of certain assets acquired, including customer relationships, developed technology and

trade names involve significant judgment and estimation.

The Company uses independent valuation specialists to help determine fair value

of certain assets and liabilities.

For each acquisition, the Company recognizes the assets acquired and liabilities assumed at their respective fair values

as of the acquisition date.

Valuations of certain assets acquired, including customer relationships, developed technology and trade names

involve significant judgment and estimation.

The Company uses independent valuation specialists to help determine fair value of certain

assets and liabilities.

Valuations utilize significant estimates, such as forecasted revenues and profits.

Changes in these

estimates could significantly impact on the value of certain assets and liabilities.

ASC 805 establishes a measurement period to provide

the Company with a reasonable amount of time to obtain the information necessary to identify and measure various items in a business

combination and cannot extend beyond one year from the acquisition date.

Measurement period adjustments are recognized in the reporting

period in which the adjustments are determined and calculated as if the accounting had been completed as of the acquisition date.

Company expects to complete the final fair value determination of the assets acquired and liabilities assumed as soon as practicable

within the measurement period, but not to exceed one year from the acquisition date.

Changes in these estimates

could significantly impact the value of certain assets and liabilities.

ASC 805 establishes a measurement period to provide the Company

with a reasonable amount of time to obtain the information necessary to identify and measure various items in a business combination

and cannot extend beyond one year from the acquisition date.

Measurement period adjustments are recognized in the reporting period in

which the adjustments are determined and calculated as if the accounting had been completed as of the acquisition date.

The Company completes

the final fair value determination of the assets acquired and liabilities assumed for each acquired business as soon as practicable within

the measurement period, but not to exceed one year from the acquisition date.

Goodwill is recorded when the purchase price paid in a business combination exceeds the fair value of assets acquired and liabilities

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interest and penalties related to unrecognized tax benefits are recognized as a component of income tax expense.

business is organized into two reportable segments, Company Drivers and Brokered.

The Company Drivers segment offers automobile transport

and contract services under an asset-based model.

The Company’s dedicated service offering devotes the use of equipment to

specific customers and provides transportation services through long-term contracts.

The Company’s Brokered segment offers

transportation services utilizing an asset-light model focusing on outsourcing transportation of loads to third-party carriers.

business is organized into two operating segments, Company Drivers and Subhaulers, which represent the Company’s reportable segments.

The Company Drivers segment offers automobile transport and contract services under an asset-based model.

The Company’s contract

service offering uses Company-owned equipment to service specific customers and provides transportation services through long-term contracts.

The Company’s Subhaulers segment offers transportation services utilizing an asset-light model focusing on outsourcing transportation

of loads to third-party carriers.

Drivers Segment

our Company Drivers Segment, we generate revenue by transporting autos for our customers in our OEM contract and spot arrangements, secondary

market auto moves, and our contract services arrangements.

our Company Drivers segment, we generate revenue by transporting autos for our customers in OEM contract and spot arrangements, secondary

market auto moves, and contract services arrangements.

Our OEM contract and spot arrangements provide auto transportation and logistics

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Secondary market auto moves are for customers other than

Our contract services offering devotes the use of equipment to specific customers and provides services through long-term contracts.

Our Company Drivers segment provides services that are geographically diversified but have similar economic and other relevant characteristics,

as they all provide Company Drivers carrier services of automobiles.

The main factors that affect operating revenue in the Company Drivers

Segment are the average revenue per unit received from customers and the number of vehicles transported.

Our contract services offering uses Company-owned equipment to service specific customers and provides services through long-term contracts.

Our Company Drivers segment provides services that are geographically diversified but have similar economic and other relevant

characteristics, as they all provide Company Drivers carrier services of automobiles.

The main factors that affect operating revenue

in the Company Drivers Segment are the average revenue per unit received from customers and the number of vehicles transported.

are typically paid a predetermined rate per unit for our Company Drivers services.

Our executed contracts contain fixed terms and rates

and are often used by our customers with high-service and high-priority freight.

We continually strive to increase our revenues

derived from contracts as a percentage of total revenue by continuing to build upon our existing relations and acquire new relations

contracts with customers in the Company Drivers segment generally include a fuel surcharge to account for fluctuating fuel prices.

into our predetermined contract rates with each customer is a baseline fuel price and when fuel prices rise above this baseline price

our customers compensate us for the variance in the form of additional revenue.

If fuel prices drop below the baseline price, we may in

turn owe our customers this variance and record a discount.

This additional revenue/discount is represented on the Fuel Surcharge and

Other Reimbursements line in our condensed consolidated financial statements.

our Company Drivers segment, our most significant operating expenses vary with miles traveled and include (i) fuel, and (ii) driver

related expenses, such as wages, benefits, training and recruitment.

Our executed contracts generally contain fixed terms

and rates and are often used by our customers with high-service and high-priority freight.

We strive to increase our revenues

derived from contracts by delivering a high-quality service and continuing to build upon our relationships and reputation with OEMs.

contracts with customers generally include fuel surcharge to account for fluctuating fuel prices.

Built into the predetermined contract

rates with each customer is a baseline fuel price and when fuel prices rise above this baseline price, our customers compensate us for

the variance in the form of additional revenue.

If fuel prices drop below the baseline price, we may in turn owe our customers this variance

and record a discount.

This additional revenue/discount is represented on the Fuel Surcharge and Other Reimbursements line in the consolidated

financial statements.

our Company Drivers segment, our most significant operating expenses vary with miles traveled and include (i) fuel, and (ii) driver-related

expenses, such as wages, benefits, training and recruitment.

Expenses that have both fixed and variable components include maintenance

and tire expense and our total cost of insurance and claims.

These expenses generally vary with the miles we travel, but also have a

controllable component based on safety, fleet age, efficiency and other factors.

and truck expenses and our total cost of insurance and claims.

These expenses generally vary with the miles we travel, but also have

a controllable component based on safety, fleet age, efficiency and other factors.

Our main fixed costs include depreciation of long-term assets,

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and other general and administrative expenses.

Company Drivers segment requires substantial capital expenditures for purchase of new revenue equipment.

We use a combination of financing

leases and secured long-term debt to acquire revenue equipment.

When we finance revenue equipment acquisitions with either finance

leases or long-term debt, the asset and liability are recorded on our consolidated balance sheet, and we record expense under “Depreciation”

and “Interest expense.” We expect our depreciation and interest expense will be impacted by changes in the percentage of

Company Drivers segment requires capital expenditures for the purchase of new revenue equipment.

We use a combination of financing leases

and secured long-term debt to acquire revenue equipment.

When we finance revenue equipment acquisitions with either finance leases

or long-term debt, the asset and liability are recorded on our consolidated balance sheet, and we record expense under “Depreciation”

and “Interest expense”.

We expect our depreciation and interest expense to increase by changes in the quality and value of

our revenue equipment acquired in any given year.

our Brokerage Segment, we generate revenue by utilizing our independent owner operators (who run under our DOT) and independent third-party

carriers to assist in transporting autos for our customers in our OEM contract and spot arrangements, and secondary market auto moves.

The primary performance indicator in our Company Drivers segment is

operating margin (Company Driver operating revenue, less Company Driver operating expenses, as a percentage of Company Driver operating

Operating margin can be impacted by the rates charged to customers, Company Driver pay, fuel, trucking and maintenance expense.

our Subhaulers segment, we generate revenue by independent owner operators (who run under our DOT authority) and independent third-party

carriers, which assist in transporting autos for customers in our OEM contract and spot arrangements, and secondary market auto

We maintain the customer relationship, including billing and collection, but outsource the transportation of the loads.

The main factors

that affect operating revenue in our Brokered segment are our customers’ excess inventory needs, the rates we obtain from customers,

the auto volumes we ship through the brokered segment and our ability to secure these carriers.

We generally do not have contracted long-term rates

for the cost of third-party carriers, and we cannot assure that our results of operations will not be adversely impacted in the future

if our ability to obtain third-party carriers changes or the rates of such providers increase.

most significant expense of our Brokered segment, which is primarily variable, is the cost of purchased transportation that we pay to

third-party carriers and is included in the “Purchased transportation” line item.

This expense generally varies directly

with the amount of Brokered revenue, rates charged by third party carriers and current demand and customer shipping needs.

Other operating

expenses are generally fixed and primarily include the compensation and benefits of non-driver personnel (which are recorded in

the “Salaries, wages and benefits” line item).

primary performance indicator in our Brokered segment is operating margin (brokered operating revenue, less brokered operating expenses,

as a percentage of brokered operating revenue).

factors that affect operating revenue in our Subhaulers segment are our customers’ excess inventory needs, the rates we obtain

from customers, the auto volumes we ship through the Subhaulers segment and our ability to secure capacity using independent contractors

and carriers.

most significant expense of our Subhaulers segment, which is primarily variable, is the cost of purchased transportation that we pay

to independent contractors and third-party carriers and is included in the “Purchased transportation” line item.

expense generally varies directly with the amount of Subhauler revenue, rates paid to independent contractors and third party carriers

and current demand and customer shipping needs.

Other operating expenses are generally fixed and primarily include the compensation and

benefits of non-driver personnel supporting this segment (which are recorded in the “Salaries, wages and benefits” line

primary performance indicator in our Subhaulers segment is operating margin (Subhauler operating revenue, less Subhauler operating expenses,

as a percentage of Subhauler operating revenue).

Operating margin can be impacted by the rates charged to customers and the rates paid

to third-party carriers.

Brokered segment does not require significant capital expenditures and is not asset-intensive like our Company Drivers segment.

Non-GAAP Financial

report our financial results in accordance with accounting principles GAAP.

However, management believes that EBITDA and Operating Ratio

provide useful information in measuring our operating performance, generating future operating plans and making strategic decisions regarding

allocation of capital.

Management believes this information presents helpful comparisons of financial performance between periods by

excluding the effect of certain non-recurring items.

report our financial results in accordance with US generally accepted accounting principles (“GAAP”).

However, management

believes that EBITDA and Operating Ratio provide useful information in measuring our operating performance, generating future operating

plans and making strategic decisions regarding allocation of capital.

Management believes this information presents helpful comparisons

of financial performance between periods by excluding the effect of certain non-recurring items.

and Operating Ratio do not have a standardized meaning prescribed by GAAP and therefore they may not be comparable to similarly titled

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prepared in accordance with GAAP.

is defined as net income (loss) for the period adjusted for interest expense, income tax expense (benefit) and depreciation expense and

is defined as net income (loss) for the period adjusted for interest expense, income tax expense (benefit), depreciation expense and

intangible amortization expense.

EBITDA represents net income (loss) plus interest expense, income tax expense (benefit), depreciation expense, intangible amortization

expense, and share-based compensation expenses.

expense, share-based compensation expenses, restructuring costs and goodwill and intangible impairment.

following table provides a reconciliation of net income, the most closely comparable GAAP financial measure, to EBITDA and Adjusted EBITDA:

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$ 135,755,993

Net (loss) income

$ (36,019,566 )

$ (8,475,268 )

$ (15,384,676 )

Interest expense

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Stock-based compensation

Adjusted EBITDA

Restructuring Costs

Goodwill & Intangibles

$ (20,082,899 )

Adjusted EBITDA Margin

Operating ratio is calculated

as total operating expenses as a percentage of operating revenue.

Adjusted operating ratio

is calculated as total operating expenses reduced for share-based compensation expense and amortization of intangibles as a percentage

of operating revenue.

The following table provides

a reconciliation of total operating revenue and operating (loss) income, to operating margin and adjusted operating margin:

Total operating revenue

Ratio is calculated as total operating expenses as a percentage of operating revenue.

Operating Ratio is calculated as total operating expenses reduced for share-based compensation expense, amortization of intangibles and

goodwill and intangible impairment as a percentage of operating revenue.

following table provides a reconciliation of total operating revenue and operating (loss) income, to operating margin and adjusted operating

Total operating

$ 430,425,174

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(35,334,882 )

(21,019,965 )

Operating Ratio

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Intangible amortization

Adjusted Total Operating Expenses

Goodwill and intangibles

Adjusted Total Operating

$ 422,665,991

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Adjusted Operating Ratio

Results of Operations

for the Twelve Months Ended December 31, 2024 (Successor), Period from January 1, 2024 to May 12, 2024 (Predecessor), Twelve Months Ended

December 31, 2023 (Predecessor), and Twelve Months Ended December 31, 2022 (Predecessor)

Proficient Auto

of Operations for the Twelve Months Ended December 31, 2025 and 2024 (Successor), Period from January 1, 2024 to May 12, 2024 (Predecessor),

and Twelve Months Ended December 31, 2023

Logistics, Inc.

Proficient Auto

Transport, Inc.

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Lease revenue

Total operating revenue

operating revenue

Operating Expenses

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Loss (Gain) on sale of equipment

Goodwill Impairment

Insurance premiums and claims

General, selling, and other operating expenses

General, selling, and

other operating expenses

Total Operating Expenses

Operating (loss) income

(loss) income

Other income and expense

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Earn Out Contingency Gain

Other income (expense), net

Restructuring Costs

Other income (expense),

Total other income (expense)

(Loss) Income before income taxes

before income taxes

Income tax expense (benefit)

Net (loss) income

Operating Revenue — The

Company generates revenue from two primary sources:

transporting freight for customers, including related fuel surcharge revenue and other

reimbursements (Company Drivers), and arranging for the transportation of customer freight by third-party carriers (Brokered).

Drivers revenue, before fuel surcharges and other reimbursements, is primarily generated through trucking services provided by the Company’s

Company Drivers service offerings to OEMs and the secondary market.

Brokered revenue before fuel surcharges and other reimbursements is

primarily generated through brokering freight to third-party carriers.

Fuel surcharges and other reimbursements represent additional

revenue the Company earns based on mileage driven and other reimbursable costs incurred for which it is compensated by its customers.

(loss) income

Revenue — The Company generates revenue from two primary sources:

transporting freight for customers, including related

fuel surcharge revenue and other reimbursements (Company Drivers), and arranging for the transportation of customer freight by independent

contractors and third-party carriers (Subhaulers).

Company Drivers revenue, before fuel surcharges and other reimbursements, is

primarily generated through trucking services provided by the Company’s Company Drivers service offerings to OEMs and the secondary

Subhaulers revenue before fuel surcharges and other reimbursements is primarily generated through brokering freight to third-party carriers.

Fuel surcharges and other reimbursements represent additional revenue the Company earns based on mileage driven and other reimbursable

costs incurred for which it is compensated by its customers.

Company’s total operating revenue is affected by, among other things, the general level of economic activity in the United States,

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marketing and sales efforts and the availability of drivers and third-party carriers.

The Company disaggregates revenue

from contracts with its customers for Company Drivers and Brokered operations between (1) revenue, before fuel surcharges and reimbursements

and (2) fuel surcharges and reimbursements.

A summary of the Company’s revenue generated by type for the periods indicated

is as follows:

Company disaggregates revenue from contracts with its customers for Company Drivers and Subhaulers operations between (1) revenue,

before fuel surcharges and reimbursements and (2) fuel surcharges and reimbursements.

A summary of the Company’s revenue generated

by type for the periods indicated is as follows:

Operating Revenue:

Revenue, before fuel surcharge and other reimbursements

Revenue, before fuel surcharge

and other reimbursements

$ 396,627,459

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Lease Interest Income

Total operating revenue

operating revenue

$ 430,425,174

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$ 135,755,993

The increases in total operating

revenue and revenue before fuel surcharge, were primarily due to the Successor period including revenues from the acquired entities from

May 13, 2024 to December 31, 2024

In 2024, approximately 49.6%

of the Company’s operating revenue was derived from its four largest customers, General Motors, Glovis (the logistics arm of Hyundai

and Kia), BMW and Ford.

increases in total operating revenue and revenue before fuel surcharge for Successor between 2025 and 2024 was primarily due to 2025

showing a full year of the companies acquired in 2024 plus acquisition of Brothers in 2025.

2025, approximately 59 % of the Company’s operating revenue was derived from its five largest customers.

summary of the Company’s revenue generated by segment for the periods indicated is as follows:

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Company Driver

$ 143,603,890

Company Driver fuel surcharge and other reimbursements

Lease Revenue

Other Revenue

Total Company Driver revenue

Brokerage fuel surcharge and other reimbursements

Lease Revenue

Total Company Driver

Subhauler fuel surcharge and other reimbursements

Other Revenue

Total Brokerage revenue

Lease Revenue

Subhauler revenue

Total operating revenue

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$ 135,755,993

Results of Operations

for the years ended December 31, 2024 (Successor) and 2023 (Predecessor)

In the Company Driver segment,

operating revenues increased by $43.9 million, or 101.1%, to $87.3 million in 2024 compared to $43.4 million in 2023.

The increase in

the Company Driver segment’s revenue was driven by the Successor period including revenue from the acquired entities.

Additionally,

we leveraged our expanded company drivers to replace historical brokered lanes and secured new contracts, along with contract renewal

pricing increases.

During the first quarter of

2025, market conditions and other competitive pressures resulted in the cessation of business by one of the Company’s largest competitors.

The immediate result of this development has been a redistribution among market participants of a significant amount of OEM contract business.

New contract business in place at the Company is expected to ramp during 2025 to a run rate that would represent an approximate 15% increase

to pro forma combined revenue in 2024 and with contribution margins consistent with the remainder of the contract portfolio.

In the Brokered segment, operating

revenues increased by $61.2 million, or 66.3%, to $153.6 million in 2024 compared to $92.4 million in 2023.

The increase in the Brokerage

segment’s revenue was driven by the Successor period including revenue from the acquired entities, as well as synergies from sharing

subhauler resources, new contracts and spot buy opportunities.

of Operations for the years ended December 31, 2025 and 2024 (Successor)

the Company Driver segment, operating revenues increased by $67.3 million, or 77%, to $154.6 million for the year ended December 31,

2025, compared to $87.3 million for the same period last year.

The increase in the Company Drivers segment’s revenue is driven

by 2024 only showing a partial year of revenues for the acquired companies and our Brothers acquisition, which occurred in the second

quarter of 2025.

In the Subhaulers segment, operating revenues increased by $122.2 million,

or 80%, to $275.8 million for the year ended December 31, 2025, compared to $153.6 million for the same period last year.

in the Subhaulers segment’s revenue is driven by 2024 only showing a partial year of revenues for the acquired companies and our

Brothers acquisition, which occurred in the second quarter of 2025.

The independent owner operators contributed 33% and 32% of the total

Subhauler revenue and fuel surcharge and other reimbursements for the years ended December 31, 2025 and 2024, respectively, with the remainder

coming from independent third-party carriers.

wages and benefits — Salaries, wages, and benefits consist primarily of compensation for all employees.

Salaries, wages, and benefits

— Salaries, wages, and benefits consist primarily of compensation for all employees.

Salaries, wages, and benefits are primarily

affected by the amount paid to company drivers, which is a function of the amount of freight hauled and units delivered.

Salaries, wages

and benefits are also affected by employee benefits such as health care and workers’ compensation, and to a lesser extent by the

number of, and compensation and benefits paid to, non-driver employees.

are primarily affected by the amount paid to company drivers, which is a function of the amount of freight hauled and units delivered.

Salaries, wages and benefits are also affected by employee benefits such as health care and workers’ compensation, and to a lesser

extent by the number of, and compensation and benefits paid to, non-driver employees.

wages and benefits increased by $39.6 million, or 86.8%, to $85.2 million for the year ended December 31, 2025, compared to $45.6 million

for the same period last year.

This increase was primarily driven by 2024 including only seven and a half months of salary expenses for

the acquired companies, as well as additional hires on our Corporate Leadership Team to ensure we have the expertise and experience necessary

to support our growth as a public company.

compensation — Stock-based compensation consists primarily of compensation for certain employees, officers, and directors as a

key component of our overall compensation strategy.

This non-cash expense reflects the amortization of RSU grants over the term specified

in each grant.

compensation decreased by $3.4 million or 37.8%, to $5.5 million for the year ended December 31, 2025, compared to $8.9 million for the

same period last year.

The prior year included a one-time $6 million expense related to the issuance of restricted stock units to the

current CEO as an inducement to join the Company leading up to its IPO.

and fuel taxes — Fuel and fuel taxes consist primarily of diesel fuel expense and fuel taxes for the Company’s company-owned

The primary factors affecting the Company’s fuel and fuel taxes expense are the cost of fuel per mile and the number

of miles driven by company drivers.

As noted above, our contracts with customers generally include a fuel surcharge to account for fluctuating

Any additional revenue/discount is represented on the Fuel Surcharge and Other Reimbursements line in the consolidated financial

and fuel taxes increased by $9.6 million, or 59.7%, to $25.7 million for the year ended December 31, 2025, compared to $16.1 million

for the same period last year.

This increase was primarily driven by 2024 including only seven and a half months of fuel expenses for

the acquired companies.

transportation — Purchased transportation consists of the payments the Company makes to owner-operators and third-party carriers.

Purchased transportation increased by $95.2 million, or 79.4%, to $215.2 million in for the year ended December 31, 2025, compared to

$120.0 million for the same period last year.

This increase was primarily driven by 2024 including only seven and a half months of expenses

for the acquired companies.

Expenses — Truck expenses consist of operating expenses and supplies incurred for ordinary vehicle repairs and maintenance costs,

driver on-the-road expenses and tolls.

expenses and supplies are primarily affected by the age of the Company’s owned and leased fleet of trucks and trailers, the number

of miles driven in a period and driver turnover.

Truck expenses increased 97.3% to $25.5 million for the year ended December 31, 2025,

compared to $13.0 million for the same period last year.

This increase was primarily driven by 2024 including only seven and a half months

of expenses for the acquired companies.

and amortization — Depreciation and amortization consist primarily of depreciation for owned trucks and trailers and to a lesser

extent computer software amortization.

The primary factors affecting these expense items include the size and age of the Company’s

truck and trailer fleets, the cost of new equipment and the relative percentage of owned revenue equipment and equipment acquired through

debt or finance leases.

and amortization and the gain on sale of equipment increased by $13.8 million, or 88.1%, to $29.5 million for the year ended December

31, 2025, compared to $15.7 million in the same period last year.

This increase was primarily driven by 2024 including only seven and

a half months of depreciation for the acquired companies and assets purchased during 2025.

Amortization — Intangible amortization is the amortization of our intangible assets, including customer relationships and trade

names, recognized during each acquisition, as applicable.

amortization increased by $4.1 million to $9.8 million for the year ended December 31, 2025, compared to $5.7 million for the same period

as last year.

This increase was primarily driven by 2024 including only seven and a half months of amortization for the acquired companies.

and Intangibles Impairment – In 2025, the company performed our annual goodwill evaluation which resulted in a subhauler segment

impairment charge of $27.8 million.

premiums and claims — Insurance premiums and claims consist primarily of retained amounts for liability (personal injury and property

damage), physical damage and cargo damage, as well as insurance premiums.

The primary factors affecting the Company’s insurance

premiums and claims are the frequency and severity of accidents, and developments in prior year claims.

The number of accidents tends

to vary with the miles we travel.

With our significant retained amounts, insurance claims expense may fluctuate significantly and impact

the cost of insurance premiums and claims from period-to-period, and any increase in frequency or severity of claims or adverse loss

development of prior period claims would adversely affect the Company financial condition and results of operations.

August 2025, we consolidated our auto liability, general liability and worker’s compensation insurance plans into a single policy

and then in November 2025 we consolidated our cargo insurance plans into a single plan.

These consolidations will benefit the Company

by not only providing cost savings relative to similar coverage levels spread across numerous carriers, but also simplifying administration,

streamlining the claims process, and ensuring better coverage consistency.

premiums and claims increased by $10.8 million, or 80.7% to $24.2 million for the year ended December 31, 2025, compared to $13.4 million

for the same period last year.

This increase was primarily driven by 2024 including only seven and a half months of expenses for the

acquired companies.

selling, and other operating expenses — General, selling, and other operating expenses consist primarily of legal and professional

services fees, occupancy and other costs.

General, selling, and other operating increased by $6.9 million, or 65.3% to $17.5 million

for the year ended December 31, 2025, compared to $10.6 million in the same period last year.

This increase was primarily driven by 2024

including only seven and a half months of expenses for the acquired companies.

expense, net — Interest expense, net consists of cash interest, amortization of deferred financing fees, net of any interest income

received from financial institutions.

Interest expense, net increased by $2.6 million, or 64.4%, to $6.6 million for the year ended December

31, 2025, compared to $4.0 million for the same period last year.

This increase was primarily driven by 2024 including only seven and

a half months of expenses for the acquired companies and the term loan entered into in November 2024.

ratio — Operating ratio is calculated as total operating expenses as a percentage of operating revenue.

The Company’s operating

ratio increased to 108.2% for the year ended December 31, 2025, compared to 103.3% for the period last year.

This increase can be attributed

to costs incurred by the Company to achieve synergies across all operating companies, which should reduce the operating ratio over time.

See “—Non-GAAP Financial Measures” above for the Company’s calculation of operating ratio and adjusted operating

Operating ratio — Adjusted Operating ratio is calculated as adjusted total operating expenses as a percentage of operating revenue.

Adjusted total operating expenses are operating expenses adjusted for stock-based compensation and intangible amortization.

The Company’s

adjusted operating ratio increased slightly to 98.2% for the year ended December 31, 2025, compared to 97.2% for the period last year.

See “—Non-GAAP Financial Measures” section for the Company’s calculation of adjusted operating ratio.

— EBITDA decreased by $13.0 million, or 83.1%, to $2.7 million for the year ended December 31, 2025 compared to $15.7 million for

the same period last year.

This decrease was primarily driven by a goodwill and intangibles impairment charge of $27.8 million recorded

See “—Non-GAAP Financial Measures” above for the Company’s calculation of EBITDA.

EBITDA — Adjusted EBITDA represents net income (loss) plus interest expense, income tax expense (benefit), depreciation expense,

intangible amortization expense, share-based compensation expenses and non-recurring items.

Adjusted EBITDA increased by $12.6 million,

or 51.4%, to $37.2 million for the year ended December 31, 2025 compared to $24.6 million for the period same period last year.

increase was primarily driven by 2024 including only seven and a half months of revenue and expenses.

See “—Non-GAAP Financial

Measures” above for the Company’s calculation of Adjusted EBITDA.

of Operations for the years ended December 31, 2024 (Successor) and 2023 (Predecessor)

the Company Driver segment, operating revenues increased by $43.9 million, or 101.1%, to $87.3 million in 2024 compared to $43.4 million

The increase in the Company Driver segment’s revenue was driven by the Successor period including revenue from the acquired

Additionally, we leveraged our expanded company drivers and secured new contracts, along with contract renewal pricing increases.

the Subhaulers segment, operating revenues increased by $61.2 million, or 66.3%, to $153.6 million in 2024 compared to $92.4 million

The increase in the Subhaulers segment’s revenue was driven by the Successor period including revenue from the acquired

entities, as well as synergies from sharing subhauler resources, new contracts and spot buy opportunities.

Salaries, wages and benefits

increased by $25.2 million, or 123.5%, to $45.6 million in 2024 compared to $20.4 million in 2023.

The increase is primarily related to

the Successor period which includes expenses from the acquired entities.

Additionally, we expanded our Corporate Leadership Team to ensure

we have the expertise and experience needed to support our growth as a public company.

Stock-based compensation —

Stock-based compensation consists primarily of compensation for certain employees, officers, and directors as a key component of our overall

compensation strategy.

Stock-based compensation increased

to $8.9 million in 2024 compared to $0 in 2023.

The increase is due to the result of stock-based compensation being offered following

the Company’s IPO during 2024.

Fuel and fuel taxes

— Fuel and fuel taxes consist primarily of diesel fuel expense and fuel taxes for the Company’s company-owned equipment.

primary factors affecting the Company’s fuel and fuel taxes expense are the cost of fuel per mile and the number of miles driven

by company drivers.

Fuel and fuel taxes increased by $11.6 million, or 257.8%, to $16.1

million in 2024 compared to $4.5 million in 2023.

The increase in fuel and fuel taxes was driven primarily by the Successor period including

— Salaries, wages, and benefits consist primarily of compensation for all employees.

wages, and benefits are primarily affected by the amount paid to company drivers, which is a function of the amount of freight hauled

and units delivered.

Salaries, wages and benefits are also affected by employee benefits such as health care and workers’ compensation,

and to a lesser extent by the number of, and compensation and benefits paid to, non-driver employees.

wages and benefits increased by $25.2 million, or 123.5%, to $45.6 million in 2024 compared to $20.4 million in 2023.

The increase is

primarily related to the Successor period which includes expenses from the acquired entities.

Additionally, we expanded our Corporate

Leadership Team to ensure we have the expertise and experience needed to support our growth as a public company.

compensation— Stock-based compensation consists primarily of compensation for certain employees, officers, and directors as a key

component of our overall compensation strategy.

Stock-based compensation increased to $8.9 million in 2024 compared to $0 in 2023.

increase is due to the result of stock-based compensation being offered as part of and following the Company’s IPO during 2024.

and fuel taxes — Fuel and fuel taxes consist primarily of diesel fuel expense and fuel taxes for the Company’s company-owned

The primary factors affecting the Company’s fuel and fuel taxes expense are the cost of fuel per mile and the number

of miles driven by company drivers.

and fuel taxes increased by $11.6 million, or 257.8%, to $16.1 million in 2024 compared to $4.5 million in 2023.

The increase in fuel

and fuel taxes was driven primarily by the Successor period including expenses from the acquired entities.

transportation — Purchased transportation consists of the payments the Company makes to owner-operators and third-party carriers.

transportation increased by $36.1 million, or 43.1%, to $119.9 million in 2024 compared to $83.8 million in 2023.

The increase in purchased

transportation was driven by the Successor period includes expenses from the acquired entities, as well as the expansion of our subhauler

database, revenue from new contracts and spot buy opportunities.

Expenses — Truck expenses consist of operating expenses and supplies incurred for ordinary vehicle repairs and maintenance costs,

driver on-the-road expenses and tolls.

expenses and supplies are primarily affected by the age of the Company’s company-owned and leased fleet of trucks and trailers,

the number of miles driven in a period and driver turnover.

Truck expenses increased 85.7% to $13.0 million in 2024 compared to $7.0

million in 2023.

This is primarily due to the Successor period including expenses from the acquired entities.

and amortization — Depreciation and amortization consist primarily of depreciation for owned trucks and trailers and to a lesser

extent computer software amortization.

The primary factors affecting these expense items include the size and age of the Company’s

truck and trailer fleets, the cost of new equipment and the relative percentage of owned revenue equipment and equipment acquired through

debt or finance leases.

and amortization and the gain on sale of equipment increased by $13.2 million, or 528.0%, to $15.7 million in 2024 compared to $2.5 million

The increase in depreciation and amortization and the gain on sale of equipment was driven by the Successor period including

expenses from the acquired entities.

Purchased transportation

— Purchased transportation consists of the payments the Company makes to owner-operators and third-party carriers.

Purchased transportation increased

by $36.1 million, or 43.1%, to $119.9 million in 2024 compared to $83.8 million in 2023.

The increase in purchased transportation was

driven by the Successor period includes expenses from the acquired entities, as well as the expansion of our subhauler database, revenue

from new contracts and spot buy opportunities.

Truck Expenses —

Truck expenses consist of operating expenses and supplies incurred for ordinary vehicle repairs and maintenance costs, driver on-the-road

expenses and tolls.

Truck expenses and supplies

are primarily affected by the age of the Company’s company-owned and leased fleet of trucks and trailers, the number of miles driven

in a period and driver turnover.

Truck expenses increased 85.7% to $13.0 million in 2024 compared to $7.0 million in 2023.

This is primarily

due to the Successor period including expenses from the acquired entities.

Depreciation and amortization

— Depreciation and amortization consist primarily of depreciation for owned trucks and trailers and to a lesser extent computer

software amortization.

The primary factors affecting these expense items include the size and age of the Company’s truck and trailer

fleets, the cost of new equipment and the relative percentage of owned revenue equipment and equipment acquired through debt or finance

Depreciation and amortization and the gain on sale of equipment increased

by $13.2 million, or 528.0%, to $15.7 million in 2024 compared to $2.5 million in 2023.

The increase in depreciation and amortization

and the gain on sale of equipment was driven by the Successor period including expenses from the acquired entities.

Intangible Amortization

— Intangible amortization is the amortization of our intangible assets, including customer relationships and trade names, recognized

during each acquisition, as applicable.

Intangible amortization increased

$5.7 million in 2024 compared to $0 in 2023.

Amortization — Intangible amortization is the amortization of our intangible assets, including customer relationships and trade

names, recognized during each acquisition, as applicable.

amortization increased $5.7 million in 2024 compared to $0 in 2023.

This is due to the Predecessor not having any intangible assets.

premiums and claims — Insurance premiums and claims consist primarily of retained amounts for liability (personal injury and

property damage), physical damage and cargo damage, as well as insurance premiums.

The primary factors affecting the Company’s

insurance premiums and claims are the frequency and severity of accidents, trends in the development factors used in the Company’s

actuarial accruals and developments in large, prior year claims.

The number of accidents tends to increase with the miles we travel.

With our significant retained amounts, insurance claims expense may fluctuate significantly and impact the cost of insurance premiums

and claims from period-to-period, and any increase in frequency or severity of claims or adverse loss development of prior period claims

would adversely affect the Company financial condition and results of operations.

Insurance premiums and claims

increased by $10.2 million, or 318.8%, to $13.4 million in 2024 compared to $3.2 million in 2023.

The increase in insurance premiums and

claims was driven by the Successor period includes expenses from the acquired entities.

We are working toward consolidating our insurance

plans into a single policy, which will benefit the company by not only providing cost savings relative to similar coverage levels spread

across numerous carriers, but also simplifying administration, streamlining the claims process, and ensuring better coverage consistency.

General, selling, and other

operating expenses — General, selling, and other operating expenses consist primarily of legal and professional services fees,

occupancy and other costs.

General, selling, and other operating expenses increased by $6.5 million, or 158.6%, to $10.6 million in 2024

compared to $4.1 million in 2023.

The increase in general, selling, and other operating expenses was primarily due to the Successor period

includes expenses from the acquired entities.

Interest expense, net

— Interest expense, net consists of cash interest, amortization of deferred financing fees, net of any interest income received

from financial institutions.

Interest expense, net increased by $3.0 million, or 300.0%, to $4.0 million in 2024 compared to $1.0 million

premiums and claims — Insurance premiums and claims consist primarily of retained amounts for liability (personal injury and property

damage), physical damage and cargo damage, as well as insurance premiums.

The primary factors affecting the Company’s insurance

premiums and claims are the frequency and severity of accidents, and developments in prior year claims.

The number of accidents tends

to increase with the miles we travel.

With our significant retained amounts, insurance claims expense may fluctuate significantly and

impact the cost of insurance premiums and claims from period-to-period, and any increase in frequency or severity of claims or adverse

loss development of prior period claims would adversely affect the Company financial condition and results of operations.

premiums and claims increased by $10.2 million, or 318.8%, to $13.4 million in 2024 compared to $3.2 million in 2023.

The increase in

insurance premiums and claims was driven by the Successor period includes expenses from the acquired entities.

We are working toward

consolidating our insurance plans into a single policy, which will benefit the company by not only providing cost savings relative to

similar coverage levels spread across numerous carriers, but also simplifying administration, streamlining the claims process, and ensuring

better coverage consistency.

selling, and other operating expenses — General, selling, and other operating expenses consist primarily of legal and professional

services fees, occupancy and other costs.

General, selling, and other operating expenses increased by $6.5 million, or 158.6%, to $10.6

million in 2024 compared to $4.1 million in 2023.

The increase in general, selling, and other operating expenses was primarily due to

the Successor period includes expenses from the acquired entities.

expense, net — Interest expense, net consists of cash interest, amortization of deferred financing fees, net of any interest income

received from financial institutions.

Interest expense, net increased by $3.0 million, or 300.0%, to $4.0 million in 2024 compared to

$1.0 million in 2023.

The increase was primarily due to the Successor period includes interest expense from the acquired entities.

Operating ratio —

Operating ratio is calculated as total operating expenses as a percentage of operating revenue.

The Company’s operating ratio increased

by 10.9% to 103.3% in 2024 as compared to 92.4% in 2023.

The increase in costs was primarily due to expenses that the Predecessor did

not incur, including stock compensation expense ($8.9 million) and intangible amortization expense ($5.7 million).

Excluding these expenses,

the operating ratio for 2024 would be 97.2%.

We are working to achieve synergies across all operating companies, which should help reduce

the operating ratio over time.

See “Non-GAAP Financial Measure” section for the Company’s calculation of operating ratio.

EBITDA — EBITDA

increased by $2.8 million, or 21.7%, to $15.7 million in 2024 compared to $12.9 million in 2023.

The increase was due to the Successor

period having more revenue from the acquired entities.

ratio — Operating ratio is calculated as total operating expenses as a percentage of operating revenue.

The Company’s operating

ratio increased by 10.9% to 103.3% in 2024 as compared to 92.4% in 2023.

The increase in costs was primarily due to expenses that the

Predecessor did not incur, including stock compensation expense ($8.9 million) and intangible amortization expense ($5.7 million).

these expenses, the operating ratio for 2024 would be 97.2%.

We are working to achieve synergies across all operating companies, which

should help reduce the operating ratio over time.

See “Non-GAAP Financial Measure” section for the Company’s calculation

Adjusted EBITDA —

Adjusted EBITDA represents net income (loss) plus interest expense,

income tax expense (benefit), depreciation expense, intangible amortization expense, and share-based compensation expenses.

Adjusted EBITDA

increased by $11.7 million, or 90.7%, to $24.6 million in 2024 compared to $12.9 million in 2023.

The increase was due to was primarily

due to Predecessor not incurring any stock compensation expense or intangible amortization expense.

See “Non-GAAP Financial Measure”

section for the Company’s calculation of Adjusted EBITDA.

Results of Operations for

the Period from June 13, 2023 (Inception) through December 31, 2023 (Successor)

Results of Operations

Revenue — Proficient

did not generate any revenue for the period from June 13, 2023 through December 31, 2023.

Operating Expenses

— Proficient’s general and administrative expenses for the period from June 13, 2023 through December 31, 2023 totaled $0.6

The expenses were incurred for various legal and accounting services in preparation of this offering and the Combinations.

Net Loss — Proficient’s

net loss was $0.6 million for the period from June 13, 2023 through December 31, 2023.

Liquidity and Capital Resources

—Proficient’s source of funding was capital raises of $0.9 million of cash through December 31, 2023 from a small group

of investors.

Proficient may obtain additional financing as needed.

Net cash used in operating

activities totaled $0.5 million for the period from June 13, 2023 through December 31, 2023, which resulted in $0.4 million of the cash

capital raise left on hand as of December 31, 2023.

Proficient Transport’s Results of Operations

for the years ended December 31, 2023 to 2022

The following table sets forth

items derived from Proficient Transport’s Consolidated Statements of Comprehensive Income for the years ended December 31,

2023 and 2022 presented as a percentage of operating revenues:

For the years ended

Operating revenue

Revenue, before fuel surcharges

Fuel surcharges and reimbursements

Total operating revenue

Operating expenses

Salaries, wages, and benefits

Fuel and fuel taxes

Purchased transportation

Truck expenses

Depreciation and amortization

Gain on sale of equipment

Insurance premiums and claims

Operating taxes and licenses

General, selling, and other operating expenses

Total operating expenses

Total operating income

Other expense

Interest expense, net

Total other expense

Income before income taxes

Income tax expense

Fiscal year 2023 compared to Fiscal year 2022

Operating Revenue — Proficient

Transport generates revenue from two primary sources:

transporting freight for its customers (including related fuel surcharge revenue

and other reimbursements) and arranging for the transportation of customer freight by third-party carriers.

Proficient Transport has two

reportable segments:

its Truckload segment and its Brokerage segment.

Truckload revenue, before fuel surcharges and other reimbursements,

is primarily generated through trucking services provided by Proficient Transport’s two Truckload service offerings:

OEM transports

and contract.

Brokerage revenue before fuel surcharges and other reimbursements is primarily generated through brokering freight to third-party

Fuel surcharges and other reimbursements represent additional revenue Proficient Transport earns based on mileage driven and

other reimbursable costs incurred for which it is compensated by its customers.

Proficient Transport’s

total operating revenue is affected by, among other things, the general level of economic activity in the United States, customer

inventory levels, specific customer demand, the level of capacity in the truckload and brokerage industry, the success of our marketing

and sales efforts and the availability of drivers and third-party carriers.

Proficient Transport disaggregates

revenue from contracts with its customers for Truckload and Brokerage operations between (1) revenue, before fuel surcharges and reimbursements

and (2) fuel surcharges and reimbursements.

A summary of Proficient Transport’s revenue generated by type for the periods indicated

is as follows:

Operating revenue:

Revenue, before fuel surcharge and other reimbursements

$ 126,437,360

$ 116,108,865

Fuel surcharges and other reimbursements

Total operating revenue

The increases in total operating

revenue and revenue before fuel surcharge, were primarily due to the increases in volume of activity (in the Truckload Segment) and secondarily

due to increases in Proficient Transport’s contract pricing.

In 2023, Proficient Transport delivered 296,352 units (174,434 Truckload

Segment) compared to 297,204 units (168,938 in the Truckload Segment) in 2022.

The increases in volume in the Truckload Segment were primarily

driven by the reduction in backlog of undelivered cars that had built up over 2021 and 2022.

In 2021, Proficient Transport’s OEMs

experienced significant microchip supply shortages which resulted in new automobiles being only partially manufactured and not ready for

This shortage continued, albeit to a lesser extent, into 2022.

Once the microchip supply shortages were resolved, OEMs completed

the production of unfinished cars, creating a need to deliver the excess automobile inventory.

Proficient Transport serviced the OEMs’

excess inventory through company-owned vehicles as well as Proficient Transport’s Brokerage segment.

In 2023, approximately 81.5%

of Proficient Transport’s operating revenue was derived from its four largest customers, General Motors, Glovis (the logistics arm

of Hyundai and Kia), Ford and Mercedes Benz.

A summary of Proficient Transport’s

revenue generated by segment for the periods indicated is as follows:

Operating revenue:

Truckload fuel surcharge and other reimbursements

Total Truckload revenue

Brokerage fuel surcharge and other reimbursements

Total Brokerage revenue

Total operating revenue

$ 135,755,993

$ 130,160,074

In the Truckload segment,

operating revenues increased by $3.8 million, or 9.7%, to $43.4 million in 2023 compared to $39.6 million in 2022.

revenue per unit increased to $220 from $197 in 2022.

The increase in the Truckload segment’s revenue was driven by a $5.2 million

increase in truckload services and a $1.4 million decrease in fuel surcharges and other reimbursements.

The $5.2 million increase

in truckload services was comprised of contractual increases in revenue per unit hauled and the utilization of additional owner operators.

The decrease in Proficient Transport’s Truckload fuel surcharge and other reimbursements primarily related to the decrease in fuel

prices, which resulted in lower fuel surcharge compensation from Proficient Transport’s customers, as well as fewer reimbursements

Proficient Transport earned from the contracts that expired mid-year.

In the Brokerage segment,

operating revenues increased by $1.7 million, or 1.9%, to $92.4 million in 2023 compared to $90.6 million in 2022.

increase in the Brokerage segment’s revenue was driven by a $5.1 million increase in brokerage services offset by a $3.4 million

decrease in fuel surcharges and other reimbursements.

The primary factors driving the increase in brokerage services revenue was Proficient

Transport’s ability to expand services under its contract service arrangements to third-party carriers as well as the need for timely

transportation of the excess inventory of Proficient Transport’s OEMs.

Salaries, wages and benefits — Salaries,

wages, and benefits consist primarily of compensation for all employees.

Salaries, wages, and benefits are primarily affected by the amount

paid to company drivers, which is a function of the amount of freight hauled and includes units delivered.

Salaries, wages and benefits

are also affected by employee benefits such as health care and workers’ compensation, and to a lesser extent by the number of, and

compensation and benefits paid to, non-driver employees.

Salaries, wages and benefits

decreased by $2.5 million, or 10.7%, to $20.4 million in 2023 compared to $22.9 million in 2022.

The decrease is primarily

related to Proficient Transport’s smallest contract expiring in June of 2023, which resulted in the termination of approximately

Additionally, approximately 20 drivers transitioned from company drivers to owner-operators during 2023.

Fuel and fuel taxes — Fuel

and fuel taxes consist primarily of diesel fuel expense and fuel taxes for Proficient Transport’s company-owned equipment.

factors affecting Proficient Transport’s fuel and fuel taxes expense are the cost of fuel per mile and the number of miles driven

by company drivers.

Fuel and fuel taxes decreased

by $2.7 million, or 38.2%, to $4.5 million in 2023 compared to $7.2 million in 2022.

The decrease in fuel and fuel taxes

was driven primarily by the decrease in price per gallon for diesel fuel, which declined from an annual average of $4.99 per gallon in

2022 to $4.21 per gallon in 2023, according to the Department of Energy.

For 2023, the average cost of fuel per mile was $0.79 compared

to $1.11 in 2022 and the total number of miles driven in 2023 was 10 million compared to 9.2 million in 2022.

Additionally,

the expiration of Proficient Transport’s smallest fleet contract mid-year resulted in less fuel being purchased in 2023.

Purchased transportation — Purchased

transportation consists of the payments Proficient Transport makes to owner-operators and third-party carriers.

Purchased transportation increased

by $13.5 million, or 19.2%, to $83.8 million in 2023 compared to $70.3 million in 2022.

The increase in purchased transportation

was driven by two factors:

Proficient Transport had approximately 20 company drivers become owner-operators during 2023 and Proficient

Transport added third-party carriers to its contract service arrangement.

Truck Expenses — Truck

expenses consist of operating expenses and supplies incurred for ordinary vehicle repairs and maintenance costs, driver on-the-road expenses

Operating expenses and supplies

are primarily affected by the age of Proficient Transport’s company-owned and leased fleet of trucks and trailers, the number of

miles driven in a period and driver turnover.

Truck expenses decreased 0.4% to $7.0 million in 2023 compared to $7.1 million

Truck expenses as a percentage of operating revenue decreased from 5.4% in 2022 to 5.2% in 2023 due to the disproportional increase

in Brokerage segment activity, which operates under an asset-light model and does not incur truck expenses.

Depreciation and amortization — Depreciation

and amortization consist primarily of depreciation for owned trucks and trailers and to a lesser extent computer software amortization.

The primary factors affecting these expense items include the size and age of Proficient Transport’s truck and trailer fleets, the

cost of new equipment and the relative percentage of owned revenue equipment and equipment acquired through debt or finance leases.

Depreciation and amortization

and the gain on sale of equipment increased by $0.1 million, or 4.9%, to $2.3 million in 2023 compared to $2.2 million

The increase in depreciation and amortization and the gain on sale of equipment was driven by an increase in the average depreciation

offset by gains recognized on sold equipment.

Insurance premiums and

claims — Insurance premiums and claims consist primarily of retained amounts for liability (personal injury and property

damage), physical damage and cargo damage, as well as insurance premiums.

The primary factors affecting Proficient Transport’s insurance

premiums and claims are the frequency and severity of accidents, trends in the development factors used in Proficient Transport’s

actuarial accruals and developments in large, prior year claims.

The number of accidents tends to increase with the miles we travel.

our significant retained amounts, insurance claims expense may fluctuate significantly and impact the cost of insurance premiums and claims

from period-to-period, and any increase in frequency or severity of claims or adverse loss development of prior period claims would adversely

affect Proficient Transport’s financial condition and results of operations.

Insurance premiums and claims

increased by $0.6 million, or 23.8%, to $3.2 million in 2023 compared to $2.6 million in 2022.

The increase in insurance

premiums and claims was driven by an increase in Proficient Transport’s premiums.

Operating taxes and licenses — Operating

taxes and licenses consist of property and use taxes.

Operating taxes and licenses increased by $114,599 or 83.5%, to $251,789 in 2023

compared to $137,190 in 2022.

The increase in operating taxes and licenses was driven by the increase in operating revenue.

General, selling, and other

operating expenses — General, selling, and other operating expenses consist primarily of legal and professional services

fees, general and administrative expenses, and other costs.

General, selling, and other operating expenses increased by $0.8 million,

or 27.6%, to $3.9 million in 2023 compared to $3.0 million in 2022.

The increase in general, selling, and other operating expenses

was primarily due to increased legal fees, as well as the overall increase in general expenses such as repairs and maintenance at our

owned facility, operations, and utilities.

Interest expense, net — Interest

expense, net consists of cash interest, amortization of deferred financing fees, net of any interest income received from financial institutions.

Interest expense, net decreased by $0.2 million, or 18.0%, to $1.0 million in 2023 compared to $1.2 million in 2022.

decrease was primarily due to the interest income earned from the Lease to Purchase program with our owner-operators.

Operating ratio — Operating

ratio is calculated as total operating expenses as a percentage of operating revenue.

Proficient Transport’s operating ratio increased

by 3.7% to 92.4% in 2023 as compared to 88.7% in 2022.

The increase in costs was primarily due to the increase in purchase transportation

activity in Proficient Transport’s Brokerage segment.

EBITDA — EBITDA

decreased by $4.1 million, or 24.2%, to $12.9 million in 2023 compared to $17.0 million in 2022.

The decrease was primarily

due to the $3.2 million decrease in net income as well as the $0.9 million decrease in income taxes, which is an add back for

the EBITDA calculation.

See “Non-GAAP Financial Measure” section below for Proficient Transport’s calculation of EBITDA.

Non-GAAP Financial Measure

EBITDA is a supplemental non-GAAP

financial measure used by management of Proficient Transport.

Proficient Transport defines EBITDA as net income (loss) before (i) interest

expense, net, (ii) tax expense (benefit), and (iii) depreciation and amortization expense.

Proficient Transport believes that EBITDA is

useful because it provides a more effective evaluation of Proficient Transport’s operating performance and allows comparison of

Proficient Transport’s results of operations from period to period without regard to Proficient Transport’s financing methods

or other items that impact comparability of financial results from period to period such as fluctuations in interest expense or effective

tax rates, levels of depreciation and amortization, or any unusual items.

EBITDA should not be considered as an alternative to, or more

meaningful than, net income, operating ratio, or any other measure as determined in accordance with GAAP.

Proficient Transport’s

computation of EBITDA may not be comparable to EBITDA of other companies.

Proficient Transport presents EBITDA because management believes

these metrics provide useful information regarding the factors affecting Proficient Transport’s operations.

The following table presents

a reconciliation of EBITDA to the GAAP financial measure of net income for each of the periods indicated.

Interest expense, net

Income tax expense

Depreciation and amortization expense

Liquidity and Capital

business requires substantial amounts of cash to cover operating expenses as well as to fund capital expenditures, working capital changes,

principal and interest payments on our debt obligations, lease payments and tax payments when we generate taxable income.

have financed our capital requirements with cash flows from operating activities, direct equipment financing, and proceeds from our IPO.

We intend to spend between $5 - $10 million per year on new revenue equipment to maintain our desired average age of the fleet.

to finance the purchases through a combination of operating cash flows and direct equipment financing.

Additional purchases of revenue

equipment in a given year will depend on new business added as well as management’s desire to shift delivery volume away from subhaulers

in favor of company drivers which will require growth in the aggregate fleet.

of operating ratio.

— EBITDA increased by $2.8 million, or 21.7%, to $15.7 million in 2024 compared to $12.9 million in 2023.

The increase was due

to the Successor period having more revenue from the acquired entities.

See “Non-GAAP Financial Measure” section for the

Company’s calculation of EBITDA.

Adjusted EBITDA — Adjusted EBITDA represents net income (loss) plus interest expense, income

tax expense (benefit), depreciation expense, intangible amortization expense, and share-based compensation expenses.

EBITDA increased by $11.7 million, or 90.7%, to $24.6 million in 2024 compared to $12.9 million in 2023.

The increase was due to the

Successor period having more revenue from the acquired entities.

See “Non-GAAP Financial Measure” section for the Company’s

calculation of Adjusted EBITDA.

and Capital Resources

Our business requires substantial amounts of cash to cover operating

expenses as well as to fund capital expenditures, working capital changes, principal and interest payments on our debt obligations, lease

payments and tax payments when we generate taxable income.

Recently, we have financed our capital requirements with cash flows from operating

activities, direct equipment financing, and proceeds from our IPO.

We intend to spend between $10 to $15 million per year on new revenue

equipment to maintain our desired average age of the fleet.

We plan to finance the purchases through a combination of operating cash flows

and direct equipment financing.

Additional purchases of revenue equipment in a given year will depend on new business added as well as

management’s desire to shift the mix of delivery to have higher volume in the Company Drivers segment which will require growth

in the aggregate fleet.

believe we can fund our expected cash needs in the short-term, including debt repayment and the capital purchases described above, with

projected cash flows from operating activities, borrowings under our credit facility and direct debt and lease financing we believe to

be available for at least the next 12 months.

Over the long-term, we expect that we will continue to have significant capital requirements,

which may require us to seek additional borrowings or lease financing.

The availability of financing will depend upon our financial condition

and results of operations as well as prevailing market conditions.

May 2024, we raised money in the capital markets through an IPO and then subsequently in June sold additional shares through an over-allotment

The approximately $30 million remaining after acquiring the Founding Companies was used to support operations for 2024 and to

partially fund strategic acquisitions.

We anticipate that our cash flows from operations and available direct equipment financing will

provide adequate liquidity for our planned capital expenditures during fiscal year 2025.

For any new capital expenditures in 2025 and

beyond that exceed our cash flow from operations, we have negotiated credit agreements with financial institutions in amounts sufficient

to fund planned purchases.

While we generally control the timing and extent of our capital expenditures, there is no assurance that we

can obtain financing arrangements on terms acceptable to the Company.

Loan Agreement

On November 8, 2024, the Company and certain of its subsidiaries, as

borrowers, entered into a Loan and Security Agreement (the “Loan Agreement”) with Pinnacle Bank, as lender (the “Lender”).

The Loan Agreement provides for (i) a delayed draw term loan facility of up to an aggregate principal amount of $25 million (the “Term

Loan Facility”) and (ii) a revolving credit facility of up to an aggregate principal amount of $20 million at any time outstanding

(the “Revolving Credit Facility”), in each case, subject to the terms of the Loan Agreement.

Proceeds of the Term Loan Facility

may be used to refinance existing indebtedness of the Company, to finance certain permitted acquisitions and fees and expenses related

thereto, and to pay fees and transaction expenses associated with the Loan Agreement.

Proceeds of the Revolving Credit Facility may be

used for general working capital, to pay the fees and transaction expenses associated with the Loan Agreement, and to pay any of the Company’s

obligations thereunder.

The loans under the Loan Agreement may be voluntarily prepaid at any time, in whole or in part, without premium

The maturity date of the Term Loan Facility is May 8, 2031, and the maturity date of the Revolving Credit Facility is November

projected cash flows from operating activities, borrowings under our credit facility and direct debt and lease financing that we believe

to be available for at least the next 12 months.

Over the long-term, we expect that we will continue to have significant capital

requirements, which may require us to seek additional borrowings or lease financing.

The availability of financing will depend upon our

financial condition and results of operations as well as prevailing market conditions.

May 2024, we raised money in the capital markets through an IPO and then subsequently in June 2024 sold additional shares through an

over-allotment option.

The approximately $30 million remaining after acquiring the Founding Companies was used to support operations

for 2024 and to partially fund strategic acquisitions.

We anticipate that our cash flows from operations and available direct equipment

financing will provide adequate liquidity for our planned capital expenditures during fiscal year 2026.

For any new capital expenditures

in 2026 and beyond that exceed our cash flow from operations, we have negotiated credit agreements with financial institutions in amounts

sufficient to fund planned purchases.

While we generally control the timing and extent of our capital expenditures, there is no assurance

that we can obtain financing arrangements on terms acceptable to the Company.

November 8, 2024, the Company and certain of its subsidiaries, as borrowers, entered into a Loan and Security Agreement (the “Loan

Agreement”) with Pinnacle Bank, as lender (the “Lender”).

The Loan Agreement provides for (i) a delayed draw term loan

facility of up to an aggregate principal amount of $25 million (the “Term Loan Facility”) and (ii) a revolving credit facility

of up to an aggregate principal amount of $20 million at any time outstanding (the “Revolving Credit Facility”), in each

case, subject to the terms of the Loan Agreement.

Proceeds of the Term Loan Facility may be used to refinance existing indebtedness of

the Company, to finance certain permitted acquisitions and fees and expenses related thereto, and to pay fees and transaction expenses

associated with the Loan Agreement.

Proceeds of the Revolving Credit Facility may be used for general working capital, to pay the fees

and transaction expenses associated with the Loan Agreement, and to pay any of the Company’s obligations thereunder.

under the Loan Agreement may be voluntarily prepaid at any time, in whole or in part, without premium or penalty.

The maturity date of

the Term Loan Facility is May 8, 2031, and the maturity date of the Revolving Credit Facility is November 8, 2029.

under the Loan Agreement bear interest at a rate per annum equal to Term SOFR for an interest period equal to one month plus a margin

10 unchanged sentences

Funded Debt to Adjusted EBITDA Ratio (as defined in the Loan Agreement) of less than or equal to 3.00 to 1.00, in each case, as of the

end of each fiscal quarter, commencing with the fiscal quarter ending March 31, 2025.

end of each fiscal quarter.

The Company was in compliance with its debt covenants as of December 31, 2025.

obligations under the Loan Agreement and the guarantees of those obligations are secured, subject to certain exceptions, by a security

interest on substantially all of the property of the Company and its subsidiaries.

Upon closing, the Company drew $16.0 million from the available term

debt, a portion of which was used to repay and terminate the Proficient Transport line of credit.

As of December 31, 2024, there was $16.0 million

outstanding under the Loan Agreement.

the twelve months ended December 31, 2024, cash flows from operating activities of $ 10,718,960, was down slightly from the twelve months

ended December 31, 2023.

the twelve months ended December 31, 2024, cash flows used in investing activities was $(205,033,308).

This decrease of $(205,227,563)

compared to December 31, 2023 is mainly due to the cash paid to acquire the Founding Companies, ATG and UTT as discussed above in Note

3 — Business Combinations.

the twelve months ended December 31, 2024, cash flows provided by financing activities was $209,254,829, which was an increase of $220,181,913

compared to the twelve months ended December 31, 2023.

This increase is due to our issuance of common stock in the Company’s IPO

plus proceeds from debt.

Cash flows provided by operating activities

Cash flows provided by (used in) investing activities

closing, the Company drew $16.0 million from the available term debt, a portion of which was used to repay and terminate the Proficient

Transport line of credit.

On April 1, 2025, the Company drew $9.0 million to fund the cash portion of the Brothers Auto Transport, LLC

On December 31, 2025, the amount outstanding on the term debt facility was approximately $22 million and there was no drawn

balance on the line of credit.

the twelve months ended December 31, 2025, cash flows from operating activities of $33.2 million compared to $10.7 million for the twelve

months ended December 31, 2024.

The increase was primarily driven by adjusted operating income of $35.6 million, compared to $18.4 million

in the prior period, after accounting for non-cash adjustments.

Additionally, we saw a $5.3 million increase in working capital, further

contributing to the overall improvement in operating cash flows.

the twelve months ended December 31, 2025, cash flows used in investing activities was $11.5 million when compared to $205.0 million for

the twelve months ended December 31, 2024.

This decrease is mainly due to the cash paid to acquire the Founding Companies, ATG and UTT

as discussed below in Note 3 — Business Combinations.

For the twelve months ended December 31, 2025, cash flows used in financing

activities was $22.8 million, which was a decrease compared to last year’s cash used in financing activities of $209.3 million.

In 2024 we issued $212.2 million in common stock to finance the Company’s IPO offset and proceeds from debt.

Cash flows provided by operating

Cash flows provided by (used in) investing

(11,523,173 )

Cash flows provided by (used in) financing activities

(205,033,308 )

Net increase (decrease) in cash, cash equivalents, and restricted cash

Cash, cash equivalents, and restricted cash, beginning of period

Cash, cash equivalents, and restricted cash, end of period

Cash flows provided

by (used in) financing activities

(22,771,331 )

(10,927,084 )

Net change in cash and

cash equivalents

$ (1,112,969 )

cash equivalents, and restricted cash, beginning of period

Cash, cash equivalents, and restricted cash,

end of period

table below summarizes the Company’s contractual obligations as of December 31, 2025:

15 unchanged sentences

Oversight Board regarding the communication of critical audit matters in the auditor’s report on the financial statements.

may take advantage of these exemptions for up to five years or such earlier time that we are no longer an emerging growth company.

We would cease to be an emerging growth company on the date that is the earliest of (i) the last day of the fiscal year in

which we have total annual gross revenues of $1.235 billion or more;

(ii) the last day of our fiscal year following the

fifth anniversary of the date of the completion of the IPO;

(iii) the date on which we have issued more than $1.0 billion in

nonconvertible debt during the previous three years;

or (iv) the date on which we are deemed to be a large accelerated filer

under the rules of the SEC.

We may choose to take advantage of some but not all of these exemptions.

We have taken advantage of

reduced reporting requirements in this Quarterly Report.

Accordingly, the information contained herein may be different from the information

you receive from other public companies in which you hold stock.

Additionally, the JOBS Act provides that an emerging growth company

can take advantage of an extended transition period for complying with new or revised accounting standards.

This allows an emerging growth

company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.

elected to avail ourselves of this exemption and, therefore, while we are an emerging growth company, we will not be subject to new or

revised accounting standards at the same time that they become applicable to other public companies that are not emerging growth companies.

As a result of this election, our financial statements may not be comparable to those of other public companies that comply with new

or revised accounting pronouncements as of public company effective dates.

We may choose to early adopt any new or revised accounting

standards whenever such early adoption is permitted for private companies.

We may take advantage of these exemptions for up to five years

or such earlier time that we are no longer an emerging growth company.

We would cease to be an emerging growth company on the date that

is the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.235 billion or

(ii) the last day of our fiscal year following the fifth anniversary of the date of the completion of the IPO;

date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years;

date on which we are deemed to be a large accelerated filer under the rules of the SEC.

We may choose to take advantage of some but

not all of these exemptions.

We have taken advantage of reduced reporting requirements in this Annual Report.

Accordingly, the information

contained herein may be different from the information you receive from other public companies in which you hold stock.

Additionally,

the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised

accounting standards.

This allows an emerging growth company to delay the adoption of certain accounting standards until those standards

would otherwise apply to private companies.

We have elected to avail ourselves of this exemption and, therefore, while we are an emerging

growth company, we will not be subject to new or revised accounting standards at the same time that they become applicable to other public

companies that are not emerging growth companies.

As a result of this election, our financial statements may not be comparable to those

of other public companies that comply with new or revised accounting pronouncements as of public company effective dates.

We may choose

to early adopt any new or revised accounting standards whenever such early adoption is permitted for private companies.

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 7. Management’s Discussion and Analysis