What changed in this filing

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Item 9A. Controls and Procedures

2026-03-31 compared with 2025-03-31 · 1365 added, 1536 removed, 520 unchanged (85% of the section changed)

16 unchanged sentences

Based on this evaluation of our disclosure controls and procedures

as of December 31, 2024, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures

were not effective due to the material weakness in internal controls over financial reporting described below.

as of December 31, 2024 and 2025, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures

were not effective due to the material weakness in internal controls over financial reporting related to IT general controls in Company’s

financial systems and closing processes including account reconciliations and review surrounding the close process.

Notwithstanding

the material weakness in our internal control over financial reporting, our Chief Executive Officer and Chief Financial Officer have

concluded that our Condensed Consolidated Financial Statements present fairly, in all material respects, our financial position, results

of operations and cash flows in accordance with GAAP.

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

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

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

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

We have identified a material weakness in the Company’s internal

controls over financial reporting.

A material weakness is a deficiency, or a combination of deficiencies, in internal controls over financial

reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will

not be prevented or detected on a timely basis.

The material weakness identified was related to IT general controls in Company’s

financial systems and closing processes including account reconciliations and review surrounding the close process.

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

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

We continue to work on other remediation initiatives.

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

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

period of financial reporting cycles.

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

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

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

If we are unable to successfully remediate our existing

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

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

concluded that our Consolidated Financial Statements present fairly, in all material respects, our financial position, results of operations

and cash flows in accordance with GAAP.

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

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

completion of systems integration to a common enterprise

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

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

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

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

Having all companies operating under one accounting

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

oversight over the financial information being generated.

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

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

While we believe that our efforts have improved the Company’s

internal controls over financial reporting, the implementation and oversight of control measures is ongoing and will require validation

and testing of the design and operating effectiveness of internal controls over a sustained period of financial reporting cycles.

however, we are unable to successfully remediate the existing or any future material weakness, the accuracy and timeliness of our financial

reporting may be adversely affected, which could cause investors to lose confidence in our financial reporting and our share price and

profitability may decline as a result.

Report on Internal Control Over Financial Reporting

Annual Report does not include a report of management’s assessment regarding internal control over financial reporting or an attestation

report of the company’s registered public accounting firm due to a transition period established by rules of the SEC for newly public

management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f)

and 15d-15(f) under the Exchange Act.

Our internal control over financial reporting is designed to provide reasonable assurance regarding

the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with

accounting principles generally accepted in the United States and include policies and procedures that (1) pertain to the maintenance

of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;

(2) provide reasonable

assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with accounting

principles generally accepted in the United States, and that our receipts and expenditures are being made only in accordance with authorizations

of our management and directors;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition,

use, or disposition of our assets that could have a material effect on the consolidated financial statements.

management, including our chief executive officer and chief financial officer, assessed the effectiveness of our internal control over

financial reporting as of December 31, 2025 using the criteria established in the updated Internal Control — Integrated Framework

(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Based on the assessment, management determined

that the Company’s internal control over financial reporting as of December 31, 2025 was not effective due to the material weaknesses

described above.

in Internal Control Over Financial Reporting

3 unchanged sentences

OTHER INFORMATION

Rule 10b5-1 Plans

None of our officers or directors,

as defined in Rule 16a-1(f), adopted, modified, or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1

trading arrangement,” as defined in Item 408 of Regulation S-K, during the three months ended December 31, 2024.

2025 Annual Meeting

of Stockholders

We currently plan to hold

our 2025 Annual Meeting of Stockholders (the “2025 Annual Meeting”) on May 6, 2025.

The time and location of the 2025 Annual

Meeting, and the matters to be considered, will be as set forth in our definitive proxy statement for the 2025 Annual Meeting to be filed

with the SEC.

In order for a stockholder

to submit a proposal for inclusion in the Company’s proxy materials for the 2025 Annual Meeting, the stockholder must comply with

the requirements set forth in the Company’s amended and restated bylaws and Rule 14a-8, including with respect to the subject matter

of the proposal, and must deliver the proposal and all required documentation to the Company no later than April 7, 2025.

The public announcement

of an adjournment or postponement of the date of the 2025 Annual Meeting will not commence a new time period (or extend any time period)

for submitting a proposal pursuant to Rule 14a-8.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT

PREVENT INSPECTIONS

of our officers or directors, as defined in Rule 16a-1(f), adopted , modified , or terminated a “Rule 10b5-1 trading arrangement”

or a “non-Rule 10b5-1 trading arrangement,” as defined in Item 408 of Regulation S-K, during the three months ended December

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The following table summarizes information about

each one of our executive officers as of December 31, 2024.

Richard O'Dell

Chief Executive Officer

President and Chief Operating Officer

Chief Financial Officer and Secretary

Information required to be furnished in response

to this Item 10 can be found in the Company’s proxy statement for the 2025 annual meeting of stockholders, which will be filed within

120 days after the close of the 2024 fiscal year (the “Proxy Statement”) under the headings “ Proposal

Item 1 - Election of the Board of Directors,” "Other Matters - Delinquent Section 16(a) Reports," “Stockholder

Engagement – Stockholder Recommendations and Nominations of Director Candidates” and “ Proposal

Item 1 - Election of the Board of Directors- Board of Directors – Audit Committee,” That information is incorporated

into this report by reference.

Code of Ethics and Business Conduct

have adopted a code of ethics that applies to all of our employees, including our principal executive officer, our principal financial

officer and our principal accounting officer.

This code of ethics can be found on the investor relations portion of our website, at www.proficientautologistics.com

We intend to disclose any amendment to, or waiver from, a provision of this code of ethics by posting such information on the investor

relations portion of our website.

Information found on our website is not part of this Annual Report or any other report filed with the

Insider Trading Policies

The Company has adopted an insider trading policy

that governs the purchase, sale, and/or other transactions of our securities by our directors, officers and employees.

A copy of our insider

trading policy is filed as Exhibit 19.1 to this Annual Report.

In addition, with regard to the Company’s trading in its own securities,

it is the Company’s policy to comply with the federal securities laws and the applicable exchange listing requirements.

Business Conduct

have adopted a Code of Business Conduct on matters of ethics and conduct that applies to all of our employees, including our principal

executive officer, our principal financial officer and our principal accounting officer.

This Code of Business Conduct can be found on

the investor relations portion of our website, at www.proficientautologistics.com .

We intend to disclose any amendment to, or waiver

from, a provision of this Code of Business Conduct by posting such information on the investor relations portion of our website.

found on our website is not part of this Annual Report or any other report filed with the SEC.

Trading Policies

The Company has adopted an Insider Trading Policy that governs the

purchase, sale, and/or other transactions of our securities by our directors, officers and employees.

A copy of our Insider Trading Policy

is filed as Exhibit 19.1 to this Annual Report.

In addition, with regard to the Company’s trading in its own securities, it is the

Company’s policy to comply with the federal securities laws and the applicable exchange listing requirements.

EXECUTIVE COMPENSATION

Information required to be

furnished in response to this Item 11 can be found in the Proxy Statement under the headings “Compensation discussion and analysis,”

“Compensation Committee report,” “Corporate governance - Compensation Committee Interlocks and Insider Participation,”

“Executive compensation” and “Director compensation.” That information is incorporated into this report by reference.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Additional information in response to this Item

12 can be found in the Proxy Statement under the heading “Security ownership of certain beneficial owners and management.”

Information required to be furnished in response to this Item 11 can

be found in the Company’s proxy statement for the 2026 annual meeting of stockholders, which will be filed within 120 days after

the close of the 2025 fiscal year (the “Proxy Statement”).

That information is incorporated into this report by reference.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

AND RELATED STOCKHOLDER MATTERS

Additional information in response to this Item 12 can be found in

the Proxy Statement.

That information is incorporated into this Annual Report by reference.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

Information in response to this Item 13 can be

found in the Proxy Statement under the headings “Corporate governance - Director independence,” “Corporate Governance

- Committee member qualifications” and “Certain relationships and related transactions.” That information is incorporated

into this Annual Report by reference.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR

Information in response to this Item 13 can be found in the Proxy Statement.

That information is incorporated into this Annual Report by reference.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

Information in response to this Item 14 can be

found in the Proxy Statement under the headings “Audit Committee report and payment of fees to auditor - Fees to independent auditor”

and “Audit Committee report and payment of fees to auditor - Administration of engagement of independent auditor.” That information

is incorporated into this Annual Report by reference.

Information in response to this Item 14 can be found in the Proxy Statement.

That information is incorporated into this Annual Report by reference.

EXHIBITS AND FINANCIAL STATEMENTS

(a) Financial Statements and Notes to the Consolidated Financial

See Index to Consolidated Financial Statements on page F-1 at beginning of attached financial statements.

Stock Purchase Agreement, dated as of December 21, 2023, by and among the Company, PAL Stock Acquiror, Inc., Leonel Munoz, Ramon Munoz and Tribeca Automotive Inc.

(filed as Exhibit 10.8 to the Company’s Registration Statement on Form S-1 filed on April 11, 2024, and incorporated herein by reference).

Contribution Agreement, dated as of December 21, 2023, by and among the Company, Leonel Munoz, Ramon Munoz and Tribeca Truck Leasing LLC (filed as Exhibit 10.9 to the Company’s Registration Statement on Form S-1 filed on April 11, 2024, and incorporated herein by reference).

Agreement and Plan of Merger, dated as of December 21, 2023, by and among the Company, ELI Merger Sub, Inc., Jesus Holguin, Raul Silva and Excel Leasing, Inc.

(filed as Exhibit 10.10 to the Company’s Registration Statement on Form S-1 filed on April 11, 2024, and incorporated herein by reference).

Stock Purchase Agreement, dated as of December 21, 2023, by and among the Company, PAL Stock Acquiror, Inc., Jesus Holguin, Raul Silva, and Deluxe Auto Carriers, Inc.

(filed as Exhibit 10.11 to the Company’s Registration Statement on Form S-1 filed on April 11, 2024, and incorporated herein by reference).

Contribution Agreement, dated as of December 21, 2023, by and among the Company, Proficient Auto Transport, Inc., the shareholder listed thereto and BOCF, LLC (filed as Exhibit 10.12 to the Company’s Registration Statement on Form S-1 filed on April 11, 2024, and incorporated herein by reference).

Stock Purchase Agreement, dated as of December 21, 2023, by and among the Company, PAL Stock Acquiror, Inc., Proficient Auto Transport, Inc., the shareholder listed thereto and BOCF, LLC (filed as Exhibit 10.13 to the Company’s Registration Statement on Form S-1 filed on April 11, 2024, and incorporated herein by reference).

Agreement and Plan of Merger, dated as of December 21, 2023, by and among the Company, WCL Merger Sub, Inc., William E.

Scanlon, Trustee of the William E.

Financial Statements

and Notes to the Consolidated Financial Statements

Index to Consolidated Financial Statements on page F-1 at beginning of attached financial statements.

Purchase Agreement, dated as of December 21, 2023, by and among the Company, PAL Stock Acquiror, Inc., Leonel Munoz, Ramon Munoz

and Tribeca Automotive Inc.

(filed as Exhibit 10.8 to the Company’s Registration Statement on Form S-1 filed on April 11, 2024,

and incorporated herein by reference).

Agreement, dated as of December 21, 2023, by and among the Company, Leonel Munoz, Ramon Munoz and Tribeca Truck Leasing LLC (filed

as Exhibit 10.9 to the Company’s Registration Statement on Form S-1 filed on April 11, 2024, and incorporated herein by reference).

and Plan of Merger, dated as of December 21, 2023, by and among the Company, ELI Merger Sub, Inc., Jesus Holguin, Raul Silva and

Excel Leasing, Inc.

(filed as Exhibit 10.10 to the Company’s Registration Statement on Form S-1 filed on April 11, 2024, and

incorporated herein by reference).

Purchase Agreement, dated as of December 21, 2023, by and among the Company, PAL Stock Acquiror, Inc., Jesus Holguin, Raul Silva,

and Deluxe Auto Carriers, Inc.

(filed as Exhibit 10.11 to the Company’s Registration Statement on Form S-1 filed on April 11,

2024, and incorporated herein by reference).

Agreement, dated as of December 21, 2023, by and among the Company, Proficient Auto Transport, Inc., the shareholder listed thereto

and BOCF, LLC (filed as Exhibit 10.12 to the Company’s Registration Statement on Form S-1 filed on April 11, 2024, and incorporated

herein by reference).

Purchase Agreement, dated as of December 21, 2023, by and among the Company, PAL Stock Acquiror, Inc., Proficient Auto Transport,

Inc., the shareholder listed thereto and BOCF, LLC (filed as Exhibit 10.13 to the Company’s Registration Statement on Form

S-1 filed on April 11, 2024, and incorporated herein by reference).

and Plan of Merger, dated as of December 21, 2023, by and among the Company, WCL Merger Sub, Inc., William E.

Scanlon, Trustee of

the William E.

Scanlon Living Trust Utd 7/29/05 and West Coast Leasing Company, Inc.

(filed as Exhibit 10.14 to the Company’s Registration Statement on Form S-1 filed on April 11, 2024, and incorporated herein by reference).

Stock Purchase Agreement, dated as of December 21, 2023, by and among the Company, PAL Stock Acquiror, Inc., William E.

Scanlon Living Trust Utd 7/29/05 and Sierra Mountain Group, Inc.

(filed as Exhibit 10.15 to the Company’s Registration Statement on Form S-1 filed on April 11, 2024, and incorporated herein by reference).

Contribution Agreement, dated as of December 21, 2023, by and among the Company, John Skiadas, Delta Auto Brokers, LLC, North East Fleet Services, Inc., Delta Automotive Services, Inc.

and the sellers listed thereto (filed as Exhibit 10.16 to the Company’s Registration Statement on Form S-1 filed on April 11, 2024, and incorporated herein by reference).

(filed as Exhibit 10.14 to the Company’s

Registration Statement on Form S-1 filed on April 11, 2024, and incorporated herein by reference).

Purchase Agreement, dated as of December 21, 2023, by and among the Company, PAL Stock Acquiror, Inc., William E.

Scanlon Living

Trust Utd 7/29/05 and Sierra Mountain Group, Inc.

(filed as Exhibit 10.15 to the Company’s Registration Statement on Form S-1

filed on April 11, 2024, and incorporated herein by reference).

Agreement, dated as of December 21, 2023, by and among the Company, John Skiadas, Delta Auto Brokers, LLC, North East Fleet Services,

Inc., Delta Automotive Services, Inc.

and the sellers listed thereto (filed as Exhibit 10.16 to the Company’s Registration

Statement on Form S-1 filed on April 11, 2024, and incorporated herein by reference).

1 to Contribution Agreement, dated as of April 26, 2024, by and among the Company, John Skiadas, Delta Auto Brokers, LLC, North

East Fleet Services, Inc., Delta Automotive Services, Inc.

and the sellers listed thereto (filed as Exhibit 10.21 to the Company’s

Registration Statement on Form S-1 filed on April 29, 2024, and incorporated herein by reference).

Agreement, dated as of December 21, 2023, by and among the Company, PAL Stock Acquiror, Inc., John Skiadas, Delta Automotive Services,

and the sellers listed thereto (filed as Exhibit 10.17 to the Company’s Registration Statement on Form S-1 filed on April

11, 2024, and incorporated herein by reference).

Amended and Restated Certificate of Incorporation of the Company (filed as Exhibit 3.1 to the Company’s Current Report on Form

8-K filed on May 15, 2024, and incorporated herein by reference).

and Restated Bylaws of the Company (filed as Exhibit 3.2 to the Company’s Current Report on Form 8-K filed on May 15, 2024,

and incorporated herein by reference).

Description of the Company’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 (filed as Exhibit 4.1 to the Company’s Annual Report on Form 10-K filed on March 31, 2025, and incorporated herein by reference).

of Common Stock Certificate (filed as Exhibit 4.1 to the Company’s Registration Statement on Form S-1 filed on April 29, 2024,

and incorporated herein by reference).

of Indemnification Agreement, between the Company and its directors and officers (filed as Exhibit 10.1 to the Company’s Registration

Statement on Form S-1 filed on April 23, 2024, and incorporated herein by reference).

Auto Logistics, Inc.

2024 Long-Term Incentive Plan, and forms of award agreements (filed as Exhibit 10.2 to the Company’s Registration

Statement on Form S-1 filed on April 23, 2024, and incorporated herein by reference).

2024 Non-Employee Director Compensation Policy (filed as Exhibit 10.3 to the Company’s Annual Report on Form 10-K filed on March 31, 2025, and incorporated herein by reference).

Employment Agreement, dated as of November 30, 2023, by and between Brad Wright and the Company (filed as Exhibit 10.5 to the Company’s

Registration Statement on Form S-1 filed on April 23, 2024, and incorporated herein by reference).

Employment Agreement, dated as of April 22, 2024, by and between Richard O’Dell and the Company (filed as Exhibit 10.7 to the

Company’s Registration Statement on Form S-1 filed on April 29, 2024, and incorporated herein by reference).

Amendment No.

1 to Contribution Agreement, dated as of April 26, 2024, by and among the Company, John Skiadas, Delta Auto Brokers, LLC, North East Fleet Services, Inc., Delta Automotive Services, Inc.

and the sellers listed thereto (filed as Exhibit 10.21 to the Company’s Registration Statement on Form S-1 filed on April 29, 2024, and incorporated herein by reference).

Purchase Agreement, dated as of December 21, 2023, by and among the Company, PAL Stock Acquiror, Inc., John Skiadas, Delta Automotive Services, Inc.

and the sellers listed thereto (filed as Exhibit 10.17 to the Company’s Registration Statement on Form S-1 filed on April 11, 2024, and incorporated herein by reference).

Third Amended and Restated Certificate of Incorporation of the Company (filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on May 15, 2024, and incorporated herein by reference).

Amended and Restated Bylaws of the Company (filed as Exhibit 3.2 to the Company’s Current Report on Form 8-K filed on May 15, 2024, and incorporated herein by reference).

Description of the Company’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934

Form of Common Stock Certificate (filed as Exhibit 4.1 to the Company’s Registration Statement on Form S-1 filed on April 29, 2024, and incorporated herein by reference).

Form of Indemnification Agreement, between the Company and its directors and officers (filed as Exhibit 10.1 to the Company’s Registration Statement on Form S-1 filed on April 23, 2024, and incorporated herein by reference).

Proficient Auto Logistics, Inc.

2024 Long-Term Incentive Plan, and forms of award agreements (filed as Exhibit 10.2 to the Company’s Registration Statement on Form S-1 filed on April 23, 2024, and incorporated herein by reference).

2024 Non-Employee Director Compensation Policy (filed as Exhibit 10.3 to the Company’s Registration Statement on Form S-1 filed on April 23, 2024, and incorporated herein by reference).

Executive Employment Agreement, dated as of November 30, 2023, by and between Brad Wright and the Company (filed as Exhibit 10.5 to the Company’s Registration Statement on Form S-1 filed on April 23, 2024, and incorporated herein by reference).

Executive Employment Agreement, dated as of April 22, 2024, by and between Richard O’Dell and the Company (filed as Exhibit 10.7 to the Company’s Registration Statement on Form S-1 filed on April 29, 2024, and incorporated herein by reference).

1 to the Executive Employment Agreement, dated as of August 14, 2025, by and between Richard O’Dell and the Company (filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on August 14, 2025, and incorporated herein by reference).

Executive employment agreement, dated August 14, 2024, between Proficient Auto Logistics, Inc.

3 unchanged sentences

and certain of its subsidiaries, as the borrower, and Pinnacle Bank, as lender (filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on November 14, 2024, and incorporated herein by reference).

Consulting Agreement, dated January 26, 2025, by and among Proficient Auto Logistics, Inc., Delta Automotive Services, LLC (d/b/a Delta Transport), and John Skiadas (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 30, 2025, and incorporated herein by reference).

Insider Trading Policy

Insider Trading Policy (filed as Exhibit 19.1 to the Company’s Annual Report on Form 10-K filed on March 31, 2025, and incorporated herein by reference).

Subsidiaries of the Registrant

6 unchanged sentences

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Clawback Policy

Inline XBRL Instance Document

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Cover Page Interactive Data File (embedded within the Inline XBRL document)

Indicates a management contract or compensatory plan or

Information in this exhibit has been omitted pursuant to Item

601(b)(10)(iv) of Regulation S-K.

Clawback Policy (filed as Exhibit 97.1 to the Company’s Annual Report on Form 10-K filed on March 31, 2025, and incorporated herein by reference).

XBRL Instance Document

XBRL Taxonomy Extension Schema

XBRL Taxonomy Extension Calculation Linkbase

XBRL Taxonomy Extension Definition Linkbase

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Page Interactive Data File (embedded within the Inline XBRL document)

Indicates a management contract or compensatory plan

or arrangement.

FORM 10-K SUMMARY

Pursuant to the requirements

of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by

the undersigned thereunto duly authorized.

to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed

on its behalf by the undersigned thereunto duly authorized.

PROFICIENT AUTO LOGISTICS, INC.

March 30, 2026

/s/ Richard O’Dell

Richard O’Dell

Chief Executive Officer

3 unchanged sentences

Chief Financial Officer and Secretary

(Principal Financial and Accounting Officer)

Pursuant to the requirements of the Securities

Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities on March 28,

(Principal Financial and Accounting

Pursuant to the requirements

of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant

and in the capacities on March 30, 2026.

/s/ Richard O’Dell

6 unchanged sentences

/s/ Brenda R.

/s/ Rohit Lal

/s/ Steve Lux

1 unchanged sentence

Schraudenbach

/s/ John Skaidas

Proficient Auto Logistics, Inc.

For the Fiscal Year Ended December 31, 2024

Item 8, and Item 15(a)

Index to Financial Statements and Schedule

/s/ John Skiadas

Auto Logistics, Inc.

the Fiscal Year Ended December 31, 2025

8, and Item 15(a)

to Financial Statements and Schedule

Report of Independent Registered Public Accounting Firm [PCAOB ID Number 248 ] F-2

24 unchanged sentences

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Shareholders

Proficient Auto Logistics, Inc.

Opinion on the financial statements

We have audited the accompanying consolidated

balance sheet of Proficient Auto Logistics, Inc.

(Successor) (a Delaware corporation) and subsidiaries (the “Company”) as

of December 31, 2024 and the consolidated balance sheet of Proficient Auto Transport, Inc.

(Predecessor) (a Delaware corporation) and

subsidiaries as of December 31, 2023;

the related consolidated statements of operations, changes in stockholders’ equity (deficit),

and cash flows for the year ended December 31, 2024 (Successor), the period from January 1, 2024 to May 12, 2024 (Predecessor), and the

years ended December 31, 2023 and December 31, 2022 (Predecessor);

and the related notes (collectively referred to as the “consolidated

financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial

position of the Company as of December 31, 2024 (Successor) and of the Predecessor as of December 31, 2023, and the results of their operations

and their cash flows for the year ended December 31, 2024 (Successor), the period from January 1, 2024 to May 12, 2024 (Predecessor),

and the years ended December 31, 2023 and December 31, 2022 (Predecessor), in conformity with accounting principles generally accepted

in the United States of America.

Basis for opinion

These consolidated financial statements are the responsibility of

the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements

based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”)

and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable

rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are

free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an

audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding of internal

control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal

control over financial reporting.

Directors and Shareholders

Auto Logistics, Inc.

on the financial statements

have audited the accompanying consolidated balance sheet of Proficient Auto Logistics, Inc.

(Successor) (a Delaware corporation) and

subsidiaries (the “Company”) as of December 31, 2025 and 2024;

the related consolidated statements of operations, changes

in stockholders’ equity (deficit), and cash flows for the year ended December 31, 2025 and 2024 (Successor), the period from January

1, 2024 to May 12, 2024 for Proficient Auto Transport, Inc.

(Predecessor) (a Delaware corporation) and subsidiaries, and the year ended

December 31, 2023 (Predecessor);

and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company

as of December 31, 2025 and 2024 (Successor), and the results of its operations and its cash flows for each of the years ended December

31, 2025 and 2024 (Successor), the period from January 1, 2024 to May 12, 2024 (Predecessor), and the year ended December 31, 2023 (Predecessor),

in conformity with accounting principles generally accepted in the United States of America.

consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion

on the Company’s consolidated financial statements based on our audits.

We are a public accounting firm registered with the Public

Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company

in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission

and the PCAOB.

conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits

we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion

on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material

misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall

presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

/s/ GRANT THORNTON LLP

We have served as the Company’s auditor since 2023.

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error

or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding

the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits

provide a reasonable basis for our opinion.

We have served

as the Company’s auditor since 2023.

Tulsa, Oklahoma

March 28, 2025

PROFICIENT AUTO LOGISTICS, INC.

AUTO LOGISTICS, INC.

AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

BALANCE SHEETS

Current assets:

6 unchanged sentences

Income tax receivable

Prepaid expenses and other current

Prepaid expenses and other current assets

Total current assets

4 unchanged sentences

Intangible assets, net of accumulated amortization (2025 - $ 17,615,109 ;

2024 - $ 5,709,360 )

Other long-term assets

$ 477,977,509

Liabilities, mezzanine equity, and stockholders’

$ 508,086,944

Liabilities and stockholders’ equity

Current liabilities:

Accounts payable

Book overdraft

Accrued liabilities

Income tax payable

Finance lease liabilities, current portion

11 unchanged sentences

Commitments and contingencies (Note 18)

Mezzanine equity:

Series A convertible, redeemable, preferred stock, $ 0.01 par value;

10,000,000 shares authorized;

0 and 3,066,923 shares issued and outstanding as of December 31, 2024 and December 31, 2023 respectively

Stockholders’ equity:

2 unchanged sentences

27,834,799 and 27,069,114 shares issued and outstanding as of December 31, 2025 and December 31, 2024 respectively

Common stock, $ 0.01 par value;

10,000,000 shares authorized;

392,825 shares issued and outstanding

Additional paid in capital

1 unchanged sentence

( 45,067,663 )

( 9,048,097 )

Total stockholders’ equity

Total liabilities, mezzanine equity

and stockholders’ equity

Total liabilities and stockholders’ equity

$ 477,977,509

The accompanying notes to the consolidated financial statements are

an integral part of these statements.

PROFICIENT AUTO LOGISTICS, INC.

$ 508,086,944

The accompanying

notes to the consolidated financial statements are an integral part of these statements.

AUTO LOGISTICS, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

STATEMENTS OF OPERATIONS

Operating revenue

15 unchanged sentences

Gain on sale of equipment

Goodwill & Intangibles Impairment

Insurance premiums and claims

4 unchanged sentences

( 7,892,541 )

( 21,019,965 )

Other income and (expense)

5 unchanged sentences

Adjustment of Earn Out Contingency

Restructuring Costs

( 1,243,171 )

Other income, net

5 unchanged sentences

( 9,720,652 )

( 21,735,318 )

Income tax (benefit) expense

1 unchanged sentence

( 1,245,384 )

( 6,350,642 )

Net (loss) income

1 unchanged sentence

$ ( 8,475,268 )

$ ( 15,384,676 )

Loss Per Share

2 unchanged sentences

Basic & Diluted

The accompanying notes to the consolidated financial statements are

an integral part of these statements.

PROFICIENT AUTO LOGISTICS, INC.

The accompanying

notes to the consolidated financial statements are an integral part of these statements.

AUTO LOGISTICS, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’

EQUITY (DEFICIT)

STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

Balance, December 31,

$ ( 572,829 )

Issuance of shares through IPO

Issuance of shares for business combinations

Issuance of restricted shares

Stock-based compensation

Issuance of shares through

of shares for business combinations

Issuance of restricted

( 8,475,268 )

4 unchanged sentences

$ 337,979,523

Balance, December 31, 2021

of shares for business combinations

Issuance of restricted

( 36,019,566 )

Accrued and unpaid dividends on Series A preferred stock

December 31, 2025

$ 356,179,787

$ ( 45,067,663 )

$ 311,390,471

Balance, December

Accrued and unpaid dividends on Series A preferred stock

and unpaid dividends on Series A preferred stock

Balance, December 31, 2023

Accrued and unpaid dividends on Series A preferred stock

and unpaid dividends on Series A preferred stock

( 15,384,676 )

Balance, May 12, 2024

$ ( 7,896,410 )

$ ( 7,892,482 )

The accompanying notes to the consolidated financial statements are

an integral part of these statements.

PROFICIENT AUTO LOGISTICS, INC.

The accompanying

notes to the consolidated financial statements are an integral part of these statements.

AUTO LOGISTICS, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

STATEMENTS OF CASH FLOWS

Cash flows from operating activities:

2 unchanged sentences

$ ( 8,475,268 )

Adjustments to reconcile net (loss) income to net cash flows provided by operating activities:

$ ( 15,384,676 )

to reconcile net (loss) income to net cash flows provided by operating activities:

Stock-based compensation

Provision for credit losses

Depreciation and amortization expense

Depreciation and amortization

Gain on sale of equipment

1 unchanged sentence

Interest income

Amortization of debt issuance costs

Deferred income tax expense (benefit)

Amortization of debt issuance

Deferred income tax expense

( 7,737,639 )

( 1,406,439 )

( 3,697,804 )

Operating lease expense

1 unchanged sentence

( 3,095,114 )

Change in operating assets and liabilities:

Change in operating assets

and liabilities:

Accounts receivable

5 unchanged sentences

( 2,640,127 )

Prepaid expenses and other assets

Prepaid expenses and other

( 2,686,326 )

1 unchanged sentence

( 2,305,808 )

( 5,767,241 )

Book overdraft

2 unchanged sentences

( 1,174,959 )

Settlement liability

lease liabilities

( 2,780,646 )

Operating lease liabilities

Net cash flows provided by operating activities

cash flows provided by operating activities

Cash flows from investing activities:

Proceeds from sale of equipment

Purchases of property and equipment

property and equipment

( 3,899,791 )

Business combinations, net of cash acquired

( 6,176,910 )

Net cash flows (used in) provided by investing activities

combinations, net of cash acquired

( 8,765,636 )

( 200,437,521 )

cash flows (used in) provided by investing activities

( 11,523,173 )

( 205,033,308 )

Cash flows from financing activities:

Proceeds from line of credit

Proceeds from long-term debt

Proceeds from long-term

Repayments of line of credit

3 unchanged sentences

( 137,737,169 )

Repayments of long-term debt

Repayments of long-term

( 24,682,562 )

( 23,268,572 )

Repayment of SBA Loan

( 1,877,266 )

Repayments of finance lease obligations

Repayment of SBA Loan

( 3,838,654 )

Repayments of finance lease

( 1,427,821 )

1 unchanged sentence

Payment of finance fees

Dividend Paid on Series A Preferred Stock

Dividend Paid on Series

A Preferred Stock

( 5,000,000 )

Common stock issued at IPO

Net cash flows provided by (used in) financing activities

stock issued at IPO

cash flows provided by (used in) financing activities

( 22,771,331 )

1 unchanged sentence

( 10,927,084 )

Net change in cash and cash equivalents

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

Net change in cash and cash

( 1,112,969 )

and cash equivalents, beginning of period

and cash equivalents, end of period

Supplemental disclosure of cash flow information:

Cash paid for interest

Cash paid for taxes

paid for interest

paid for taxes

Noncash investing and financing activity:

Addition of right-of-use asset upon adoption of ASC 842

Right of use assets obtained in exchange for lease liability

Equipment financed through long-term debt

Accrued and unpaid dividends

Issuance of shares for business combinations

of use assets obtained in exchange for lease liability

financed through long-term debt

and unpaid dividends

of shares for business combinations

$ 123,864,097

The accompanying notes to the consolidated financial statements are

an integral part of these statements.

PROFICIENT AUTO LOGISTICS, INC.

The accompanying

notes to the consolidated financial statements are an integral part of these statements.

AUTO LOGISTICS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 — Nature of operations

AH Acquisition Corp.

was formed on June 13, 2023, pursuant to

the laws of the State of Delaware to become a holding company for the consolidation of several operating companies within the automobile

transportation industry.

Subsequently, on October 17, 2023, AH Acquisition Corp.

legally changed its name to Proficient Auto Logistics,

Inc (“Proficient,” the “Company,” or “We”).

Proficient is an industry leading specialized freight company focused

on providing auto transportation and logistics services.

The Company offers 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 electric vehicle (“EV”)

producers, such as Tesla and Rivian.

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

Proficient operates an asset-based Company Drivers service (“Company Drivers”) on behalf of the manufacturers

as well as various third-party logistics management companies or brokers.

TO CONSOLIDATED FINANCIAL STATEMENTS

— Nature of operations

Acquisition Corp.

was formed on June 13, 2023, pursuant to the laws of the State of Delaware to become a holding company for the

consolidation of several operating companies within the automobile transportation industry.

Subsequently, on October 17, 2023, AH

Acquisition Corp.

legally changed its name to Proficient Auto Logistics, Inc (“Proficient,” the “Company,” or

is an industry leading specialized freight company focused on providing auto transportation and logistics services.

The Company offers

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, to electric vehicle (“EV”)

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

Proficient operates

an asset-based Company Drivers service (“Company Drivers”) on behalf of the manufacturers as well as various independent

contractors and third-party logistics management companies or brokers.

In addition, Proficient provides third party logistics to other

transportation companies under an asset-light freight model (“Brokered”).

Note 2 — Summary of significant accounting policies

Basis of Presentation — The consolidated financial statements

and footnotes have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S.

On May 13, 2024, Proficient Auto Logistics, Inc.

(“Proficient”)

completed the initial public offering (the “IPO”) of its common stock.

Prior to the IPO, Proficient had entered into agreements

(the “Combination Agreements”) to acquire in multiple, separate acquisitions (the “Combinations”) five operating

businesses and their respective affiliated entities, as applicable, operating under the following names:

(i) Delta Automotive Services,

(which converted to Delta Automotive Services, LLC in an F-reorganization on April 29, 2024), doing business as Delta Auto Transport,

(“Delta”), (ii) Deluxe Auto Carriers, Inc.

transportation companies under an asset-light freight model (“Subhaulers”).

— Summary of significant accounting policies

of Presentation — The consolidated financial statements and footnotes have been prepared in conformity with accounting principles

generally accepted in the United States of America (“U.S.

May 13, 2024, Proficient Auto Logistics, Inc.

(“Proficient”) completed the initial public offering (the “IPO”)

of its common stock.

Prior to the IPO, Proficient had entered into agreements (the “Combination Agreements”) to acquire in

multiple, separate acquisitions (the “Combinations”) five operating businesses and their respective affiliated entities,

as applicable, operating under the following names:

(i) Delta Automotive Services, Inc.

(which converted to Delta Automotive Services,

LLC in an F-reorganization on April 29, 2024), doing business as Delta Auto Transport,.

(“Delta”), (ii) Deluxe Auto Carriers,

(“Deluxe”), (iii) Sierra Mountain Group, Inc.

(iv) Proficient Auto Transport, Inc.

(“Proficient Transport”), and (v) Tribeca Automotive Inc.

(“Tribeca” and,

together with Delta, Deluxe, Sierra, and Proficient Transport, the “Founding Companies”).

On May 13, 2024, in connection

with the closing of the IPO, Proficient also completed the acquisitions of all the Founding Companies.

Thereafter, on August 16, 2024, the Company acquired Auto Transport

Group, LC, (“ATG”) for approximately $ 28.9 million in cash and 1,069,346 shares of our common stock.

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.

These acquisitions expanded the Company’s geographic presence and services

The Combinations and subsequent acquisitions are accounted for as business

combinations under ASC 805.

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

(“Sierra”), (iv) Proficient Auto Transport, Inc.

Transport”), and (v) Tribeca Automotive Inc.

(“Tribeca” and, together with Delta, Deluxe, Sierra, and Proficient Transport,

the “Founding Companies”).

Each of Deluxe, Sierra, Proficient Transport and Tribeca converted into a limited liability company

on December 31, 2025.

On May 13, 2024, in connection with the closing of the IPO, Proficient also completed the acquisitions of all the

Founding Companies.

August 16, 2024, the Company acquired Auto Transport Group, LC, (“ATG,” which was converted to a limited liability company

after closing), located in Ogden, Utah and on November 1, 2024, acquired Utah Truck & Trailer Repair, LLC, (“UTT,” which

subsequently converted into Proficient Repair Services LLC), a repair facility located at the ATG headquarters.

On April 1, 2025,

the Company acquired Brothers Auto Transport, LLC, (“Brothers”), located in Wind Gap, Pennsylvania, and on May 27, 2025,

acquired PVT Truck & Trailer Repair, LLC, (“PVT”), a repair facility located at the Brothers headquarters.

These acquisitions

expanded the Company’s geographic presence and services offered.

Amounts related to ATG and Brothers are included only since August

16, 2024 and April 1, 2025, respectively, the respective dates of acquisition.

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.”

Proficient 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.

As a result, the consolidated financial statements as of, and for period

ended, December 31, 2024 for Proficient (which includes results of operations from the period May 13, 2024 to December, 2024 from the

acquired businesses as well as expenses from the acquiring entity for the year ended December 31, 2024) and consolidated financial statements

for the period January 1, 2024 through May 12, 2024 for Proficient Transport are included in this Annual Report on Form 10-K.

between the Successor and Predecessor periods has been placed in the Consolidated Balance Sheets, Consolidated Statements of Operations,

Consolidated Statements of Stockholders’ Equity (Deficit), Consolidated Statements of Cash Flows and in the tables to the notes

to the consolidated financial statements to highlight the lack of comparability between these two periods.

Please refer to Note 3,

“Business Combinations.”

PROFICIENT AUTO LOGISTICS,

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.

As a result, the consolidated

financial statements as of, and for the period ended, December 31, 2024 for Proficient (which includes results of operations from the

period May 13, 2024 to December 31, 2024 from the acquired businesses as well as expenses from the acquiring entity for the year ended

December 31, 2024) and consolidated financial statements for the period January 1, 2024 through May 12, 2024 for Proficient Transport

are included in this Annual Report on Form 10-K.

A black-line between the Successor and Predecessor periods has been placed in the Consolidated

Statements of Operations, Consolidated Statements of Stockholders’ Equity (Deficit), Consolidated Statements of Cash Flows and

in the tables to the notes to the consolidated financial statements to highlight the lack of comparability between these two periods.

refer to Note 3, “Business Combinations.”

AUTO LOGISTICS, INC.

AND SUBSIDIARIES

Principles of Consolidation — The consolidated

financial statements include the accounts of the Company and its wholly owned subsidiaries.

All significant intercompany transactions

and accounts have been eliminated.

Use of Estimates – The

preparation of these consolidated financial statements in conformity with U.S.

generally accepted accounting principles (“GAAP”)

requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent

assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during

the reporting period.

Actual results could differ from those estimates, and such differences could be material.

Significant estimates

include the accrual for insurance and claims liabilities;

of Consolidation — The consolidated financial statements include the accounts of the Company and its wholly owned

subsidiaries.

All significant intercompany transactions and accounts have been eliminated.

of Estimates – The preparation of these consolidated financial statements in conformity with U.S.

generally accepted accounting

principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and

liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported

amounts of revenues and expenses during the reporting period.

Actual results could differ from those estimates, and such differences

could be material.

Significant estimates include the accrual for insurance and claims liabilities;

litigation and loss contingency claims;

initial value and ongoing adjustments

to earn out contingencies;

initial value and ongoing adjustments to earn out contingencies;

income tax liabilities;

and several aspects of property and equipment and intangible assets including determining

useful lives, upfront purchase price allocation valuation of these assets, and ongoing assessments of impairment.

Cash and Cash Equivalents – Cash includes all highly liquid

investment instruments with an original maturity of three months or less.

Cash balances with institutions may be in excess of Federal

Deposit Insurance Corporation (“FDIC”) limits or may be invested in sweep accounts that are not insured by the institution,

the FDIC, or any other government agency.

As of December 31, 2024, and 2023, the Company had cash balances in excess of $ 250,000 FDIC

insured limits of $ 12,124,330 , and $ 0 , respectively.

Accounts Receivable — Accounts

receivable represents customer obligations due under normal trade terms.

At the beginning of the year ended December 31, 2022 (Predecessor),

and several aspects of property and equipment

and intangible assets including determining useful lives, upfront purchase price allocation valuation of these assets, and ongoing assessments

of impairment.

and Cash Equivalents – Cash includes all highly liquid investment instruments with an original maturity of three months or

Cash balances with institutions may be in excess of Federal Deposit Insurance Corporation (“FDIC”) limits or may be

invested in sweep accounts that are not insured by the institution, the FDIC, or any other government agency.

As of December 31, 2025,

and 2024, the Company had cash balances in excess of $ 250,000 FDIC insured limits of $ 9,589,637 , and $ 12,124,330 , respectively.

Receivable — Accounts receivable represents customer obligations due under normal trade terms.

At the end of December

31, 2023, the balance of Accounts Receivable, net of provisions of $ 342,576 , was $ 18,479,768 .

Accounts receivable originating in the normal course

of business are recorded at cost, and balances acquired from business combinations are recorded at fair value which approximates their

net book value due to the short term nature of the balances.

Accounts receivable originating in the

normal course of business are recorded at cost, and balances acquired from business combinations are recorded at fair value which approximates

their net book value due to the short term nature of the balances.

The Company reviews accounts receivable on a continuing basis to determine

8 unchanged sentences

To gather information

regarding these trends and factors, the Company performs ongoing credit evaluations of customers, an analysis of accounts receivable aging

by business segment, and an analysis of future economic conditions at period end.

regarding these trends and factors, the Company performs ongoing credit evaluations of customers, an analysis of accounts receivable

aging by business segment, and an analysis of future economic conditions at period end.

Provisions for estimated credit losses are recorded

5 unchanged sentences

Refer to Note 3 for further information.

PROFICIENT AUTO LOGISTICS,

AUTO LOGISTICS, INC.

AND SUBSIDIARIES

Maintenance Supplies – Maintenance supplies consist primarily

of parts, materials and supplies for servicing the Company’s revenue and service equipment that are held for maintenance on the

Company’s transportation equipment and are not available for sale to the general public.

Deposits - The Company maintains deposits

in a financial institution that, at times, exceed the $ 250,000 insured by the FDIC.

The Company believes there is no significant risk

with respect to these deposits.

As of December 31, 2024, and 2023, deposit balances in excess of $ 250,000 FDIC insured limits of $ 3,423,331 ,

and $ 0 , respectively.

Property and Equipment – Property and equipment is stated

The Company depreciates its property and equipment using the straight-line method over the following estimated useful lives:

Supplies – Maintenance supplies consist primarily of parts, materials and supplies for servicing the Company’s revenue

and service equipment that are held for maintenance on the Company’s transportation equipment.

- The Company maintains deposits in a financial institution that, at times, exceed the $ 250,000 insured by the FDIC.

believes there is no significant risk with respect to these deposits.

As of December 31, 2025, and 2024, deposit balances in excess of

$ 250,000 FDIC insured limits of $ 3,962,874 , and $ 3,423,331 , respectively.

and Equipment – Property and equipment is stated at cost.

The Company depreciates its property and equipment using the straight-line

method over the following estimated useful lives:

Buildings and improvements

3 unchanged sentences

Transportation equipment

Leasehold improvements are amortized over the lesser of the estimated

useful lives or the length of the lease.

At December 31, 2024, the weighted-average remaining lease term was 7.2 years.

Significant renewals and betterments are capitalized, while expenditures

for normal repairs and maintenance are charged to expense as incurred.

Upon the retirement of property and equipment, the related asset cost

and accumulated depreciation are removed from the accounts and any gain or loss is recorded in the Company’s consolidated statements

of Operations.

PROFICIENT AUTO LOGISTICS, INC.

AND SUBSIDIARIES

Claims and Insurance Accruals - Claims and insurance accruals

consist of cargo loss, physical damage, group health, liability (personal injury and property damage) and workers’ compensation

claims and associated legal and other expenses within the Company’s established retention levels.

Claims in excess of retention

levels are generally covered by insurance in amounts the Company considers adequate.

Claims accruals represent the uninsured portion

of the loss and if we are the primary obligor, the insured portion of pending claims at December 31, 2024, and 2023, plus an estimated

liability for incurred but not reported claims and the associated expense.

Accruals for cargo loss, physical damage, group health, liability

and workers’ compensation claims are estimated based on the Company’s evaluation of the type and severity of individual claims

and future development based on historical trends.

As of December 31, 2024, and 2023, the Company recorded total claims and insurance

accruals of $ 5,721,891 and $ 2,209,173 , respectively, within accrued liabilities on the consolidated balance sheet.

Proficient Transport

is the only entity that is self-insured for its group health insurance plan.

The amount recorded for the Proficient Transport’s

group health accrual as of December 31, 2024 and 2023, was based in part upon actuarial studies performed by a third-party actuary.

Revenue Recognition – The Company generates revenue primarily

from shipments of automobiles through the Company’s Company Drivers and Brokered operations.

These shipments represent the Company’s

single performance obligation for each delivery arising from contracts entered into with customers who are mostly automobile manufacturers.

Revenue is recognized in an amount that reflects the consideration that is expected to be received in exchange for the transportation

and logistical services performed, which are based on fixed contractual cash payments.

Revenue is recognized when the performance obligation

is satisfied, which occurs over time with the transit of the shipments from origin to destination.

Revenue is recognized based on the

miles driven compared to the total miles scheduled for each delivery.

The Company estimates the number of miles driven as the basis for

determining the amount of revenue to be recognized for partially fulfilled obligations as of the reporting period.

Accessorial charges

for fuel surcharges as well as other reimbursements are part of the consideration we receive for the single performance obligation of

delivering shipments.

The Company has elected to utilize the practical expedient in ASC 606-10-32-18

and does not account for the effects of a significant financing component if the period between when the Company transfers a good or service

to the customer and when the customer pays for that good or service is one year or less.

Contracts entered with our customers do not contain

any material financing components as standard payment terms range from 30 to 60 days.

Payments terms in the Company’s contracts

vary by the type and location of the Company’s customer and services offered.

In some instances, the Company outsources the transportation of the

loads to third-party carriers.

The Company is a principal in these arrangements, as we have the primary responsibility to meet the customer’s

requirements and have discretion over the pricing of the services charged to the customer.

In these instances, the Company records the

revenue collected on a gross basis, and recognizes the corresponding costs incurred within purchased transportation on the consolidated

statements of operations.

The Company’s revenue disaggregation is presented on the consolidated

statements of operations and within Note 15 Segment reporting.

PROFICIENT AUTO LOGISTICS,

improvements are amortized over the lesser of the estimated useful lives or the length of the lease.

At December 31, 2025 and 2024, the

weighted-average remaining lease term was 8.1 and 7.2 years, respectively.

renewals and betterments are capitalized, while expenditures for normal repairs and maintenance are charged to expense as incurred.

the retirement of property and equipment, the related asset cost and accumulated depreciation are removed from the accounts and any gain

or loss is recorded in the Company’s consolidated statements of Operations.

and Insurance Accruals - Claims and insurance accruals consist of cargo loss, physical damage, group health, liability (personal

injury and property damage) and workers’ compensation claims and associated legal and other expenses within the Company’s

established retention levels.

Claims in excess of retention levels are generally covered by insurance in amounts the Company considers

Claims accruals represent the uninsured portion of the loss and if we are the primary obligor, the insured portion of pending

claims at December 31, 2025, and 2024, plus an estimated liability for incurred but not reported claims and the associated expense.

for cargo loss, physical damage, group health, liability and workers’ compensation claims are estimated based on the Company’s

evaluation of the type and severity of individual claims and future development based on historical trends.

As of December 31, 2025,

and 2024, the Company recorded total claims and insurance accruals of $ 10,758,083 and $ 5,721,891 , respectively, within accrued liabilities

on the consolidated balance sheet.

For the Predecessor entity, the amount recorded for the Proficient Transport’s group health

accrual as of December 31, 2024 and 2023, was based in part upon actuarial studies performed by a third-party actuary for its self insured

AUTO LOGISTICS, INC.

AND SUBSIDIARIES

The Company has elected to use the practical expedient in ASC 340-40-25-4

and recognizes the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that

would have been recognized is one year or less.

The Company does not typically incur incremental costs in obtaining a contract from its

customers, however, if the Company did, the costs would be expensed as incurred as its sales contracts have a duration of less than one

Such costs would be included in the General, selling, and other operating expenses caption of the consolidated statements of operations.

Defined contribution plans –The Company

and its subsidiaries have defined contribution 401(k) plans that cover substantially all employees.

The plans permit eligible participants

to defer a portion of their eligible compensation, defined by each subsidiaries plan, ranging from 90 % to 100 %, not to exceed $ 69,000

as determined under Section 401(k) of the IRC.

For our Safe Harbor Plans, the Company matches 100 % of participant contributions up to

the first 4 % of annual compensation.

Recognition – The Company generates revenue primarily from shipments of automobiles through the Company’s Company Drivers

and Subhaulers operations.

These shipments represent the Company’s single performance obligation for each delivery arising from

contracts entered into with customers who are mostly automobile manufacturers.

Revenue is recognized in an amount that reflects the consideration

that is expected to be received in exchange for the transportation and logistical services performed, which are based on fixed contractual

cash payments.

Revenue is recognized when the performance obligation is satisfied, which occurs over time with the transit of the shipments

from origin to destination.

Revenue is recognized based on the miles driven compared to the total miles scheduled for each delivery.

The Company estimates the number of miles driven as the basis for determining the amount of revenue to be recognized for partially fulfilled

obligations as of the reporting period.

Accessorial charges for fuel surcharges as well as other reimbursements are part of the consideration

we receive for the single performance obligation of delivering shipments.

Company has elected to utilize the practical expedient in ASC 606-10-32-18 and does not account for the effects of a significant financing

component if the period between when the Company transfers a good or service to the customer and when the customer pays for that good

or service is one year or less.

Contracts entered with our customers do not contain any material financing components as standard payment

terms range from 30 to 60 days.

Payments terms in the Company’s contracts vary by the type and location of the Company’s

customer and services offered.

some instances, the Company outsources the transportation of the loads to third-party carriers.

The Company is a principal in these arrangements,

as we have the primary responsibility to meet the customer’s requirements and have discretion over the pricing of the services

charged to the customer.

In these instances, the Company records the revenue collected on a gross basis, and recognizes the corresponding

costs incurred within purchased transportation on the consolidated statements of operations.

Company’s revenue disaggregation is presented on the consolidated statements of operations and within Note 15 Segment reporting.

Company has elected to use the practical expedient in ASC 340-40-25-4 and recognizes the incremental costs of obtaining a contract as

an expense when incurred if the amortization period of the asset that would have been recognized is one year or less.

The Company does

not typically incur incremental costs in obtaining a contract from its customers, however, if the Company did, the costs would be expensed

as incurred as its sales contracts have a duration of less than one year.

Such costs would be included in the General, selling, and other

operating expenses caption of the consolidated statements of operations.

contribution plans – In 2024, the Company and its subsidiaries have defined contribution 401(k) plans that cover substantially

all employees.

The plans permit eligible participants to defer a portion of their eligible compensation, defined by each subsidiaries

plan, ranging from 90 % to 100 %, not to exceed $ 69,000 as determined under Section 401(k) of the IRC.

For our Safe Harbor Plans, the Company

matches 100 % of participant contributions up to the first 4 % of annual compensation.

For the non-safe harbor plans, matching is discretionary.

The Company’s matching expense for

the 401(k) plans totaled $ 357,161 , $ 87,740 , $ 283,000 and $ 287,000 for period year-ended December 31, 2024 (Successor), for the period

from January 1, 2024 to May 12, 2024 (Predecessor) and for the years ended December 31, 2023 and December 31, 2022 (Predecessor), respectively.

Our plans have various vesting schedules ranging from three to six years of service.

Leases – The Company determines if an arrangement is

a lease or contains a lease at inception and performs an analysis to determine whether the lease is an operating lease or a finance lease.

The Company measures right-of-use (“ROU”) assets and lease liabilities at the lease commencement date based on the present

value of the remaining lease payments.

The Company uses the implicit rate when readily determinable.

When the implicit rate is not readily

determinable, the Company estimates an incremental borrowing rate based on the credit quality of the Company and by comparing interest

rates available in the market for similar borrowings, and adjusting this amount based on the impact of collateral over the term of each

These rates are used to discount the remaining lease payments in measuring the ROU asset and lease liability.

Lease expense for operating leases is recognized on a straight-line

basis over the lease term.

For finance leases, the Company recognizes depreciation expense from the depreciation of the ROU asset and

interest expense on the related lease liability.

The Company does not separate lease and non-lease components of contracts.

of the non-lease components in the Company’s leases include common area maintenance and related services as part of its building

Leases with an initial term of twelve months or less are not recorded on the consolidated balance sheet and lease expense is

recognized on a straight-line basis over the lease term.

Advertising Costs – Advertising costs

are expensed when incurred.

Advertising costs totaled $ 31,117 , $ 2,859 , $ 6,800 and $ 32,089 for the years ended December 31, 2024, for the

period from January 1, 2024 to May 12, 2024 (Predecessor), for the years ended December 31, 2023 and December 31, 2022 (Predecessor),

respectively, and are included in general, selling and other operating expenses on the consolidated statements of operations.

PROFICIENT AUTO LOGISTICS, INC.

In 2025, the Company merged all plans into Proficient Auto Logistics Plan, which is a Safe Harbor Plan and allows for discretionary matching.

The Company’s matching expense for the 401(k) plans totaled $ 928,140 , $ 357,161 , $ 87,740 , and $ 283,000 for the year-ended December

31, 2025 (Successor), December 31, 2024 (Successor), for the period from January 1, 2024 to May 12, 2024 (Predecessor) and for the year

ended December 31, 2023 (Predecessor), respectively.

– The Company determines if an arrangement is a lease or contains a lease at inception and performs an analysis to determine whether

the lease is an operating lease or a finance lease.

The Company measures right-of-use (“ROU”) assets and lease liabilities

at the lease commencement date based on the present value of the remaining lease payments.

The Company uses the implicit rate when readily

determinable.

When the implicit rate is not readily determinable, the Company estimates an incremental borrowing rate based on the credit

quality of the Company and by comparing interest rates available in the market for similar borrowings, and adjusting this amount based

on the impact of collateral over the term of each lease.

These rates are used to discount the remaining lease payments in measuring the

ROU asset and lease liability.

AUTO LOGISTICS, INC.

AND SUBSIDIARIES

Income Taxes – Income taxes are accounted for under the

asset-and-liability method.

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences

between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases and operating loss

and tax credit carryforwards.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income

in the years in which those temporary differences are expected to be recovered or settled.

The effect on deferred tax assets and liabilities

of a change in tax rates is recognized as income or expense in the period that includes the enactment date.

The Company evaluates the need for a valuation allowance on deferred

tax assets based on whether it believes that it is more likely than not all deferred tax assets will be realized.

A consideration of

future taxable income is made as well as on-going prudent feasible tax planning strategies in assessing the need for valuation allowances.

In the event it is determined all or part of a deferred tax asset would not be able to be realized, management would record an adjustment

to the deferred tax asset and recognize a charge against income at that time.

The Company’s estimate of the potential outcome of any uncertain

tax issue is subject to its assessment of relevant risks, facts and circumstances existing at that time.

The Company accounts for uncertain

tax positions in accordance with Accounting Standards Codification (“ASC”) 740, Income Taxes, and records a liability when

such uncertainties meet the more likely than not recognition threshold.

Potential accrued interest and penalties related to unrecognized

tax benefits are recognized as a component of income tax expense.

Concentration of Credit

Risks – For the year ended December 31, 2024 (Successor), our largest customer accounted for approximately 22 % of operating

As of December 31, 2024, our largest customer had accounted for approximately 24 % of net accounts receivable.

The monitors the

credit risk of its customers, offering normal payment terms without collateral held or available for the balances owed.

For the year ended December

31, 2023 (Predecessor), two of our largest customers accounted for approximately 62.7 % of operating revenue.

expense for operating leases is recognized on a straight-line basis over the lease term.

For finance leases, the Company recognizes depreciation

expense from the depreciation of the ROU asset and interest expense on the related lease liability.

The Company does not separate lease

and non-lease components of contracts.

The nature of the non-lease components in the Company’s leases include common area maintenance

and related services as part of its building leases.

Leases with an initial term of twelve months or less are not recorded on the consolidated

balance sheet and lease expense is recognized on a straight-line basis over the lease term.

Costs – Advertising costs are expensed when incurred.

Advertising costs totaled $ 52,187 , $ 31,117 , $ 2,859 , and $ 6,800 for the

years ended December 31, 2025, December 31, 2024, for the period from January 1, 2024 to May 12, 2024 (Predecessor), and for the years

ended December 31, 2023 (Predecessor), respectively, and are included in general, selling and other operating expenses on the consolidated

statements of operations.

Taxes – Income taxes are accounted for under the asset-and-liability method.

Deferred tax assets and liabilities are recognized

for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and

liabilities and their respective tax bases and operating loss and tax credit carryforwards.

Deferred tax assets and liabilities are measured

using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered

The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income or expense in the period

that includes the enactment date.

Company evaluates the need for a valuation allowance on deferred tax assets based on whether it believes that it is more likely than

not all deferred tax assets will be realized.

A consideration of future taxable income is made as well as on-going prudent feasible tax

planning strategies in assessing the need for valuation allowances.

In the event it is determined all or part of a deferred tax asset

would not be able to be realized, management would record an adjustment to the deferred tax asset and recognize a charge against income

at that time.

Company’s estimate of the potential outcome of any uncertain tax issue is subject to its assessment of relevant risks, facts and

circumstances existing at that time.

The Company accounts for uncertain tax positions in accordance with Accounting Standards Codification

(“ASC”) 740, Income Taxes, and records a liability when such uncertainties meet the more likely than not recognition threshold.

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

Concentration

of Credit Risks – For the year ended December 31, 2025 (Successor), our largest customer accounted for approximately 29 % of

operating revenue.

As of December 31, 2025, our largest customer accounted for approximately 42 % of net accounts receivable.

monitors the credit risk of its customers, offering normal payment terms without collateral held or available for the balances owed.

the year ended December 31, 2024 (Successor), our largest customer accounted for approximately 22 % of operating revenue.

As of December

our largest two customers had accounted for approximately 73 % of gross accounts receivable.

For the year ended December 31, 2022(Predecessor),

two of our largest customers accounted for approximately 66.0 % of operating revenue.

Labor concentration – At December

31, 2024 (Successor) or December 31, 2023 (Predecessor), the Company’s employees are not subject to union or other collective bargaining

Business Combinations — The Company accounts for business

combinations using the acquisition method pursuant to ASC 805, Business 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, 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.

The 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.

PROFICIENT AUTO LOGISTICS,

31, 2024, our largest customer had accounted for approximately 24 % of net accounts receivable.

The Company monitors the credit risk of

its customers, offering normal payment terms without collateral held or available for the balances owed.

the year ended December 31, 2023 (Predecessor), two of our largest customers accounted for approximately 62.7 % of operating revenue.

As of December 31, 2023, our largest two customers had accounted for approximately 73 % of gross accounts receivable.

concentration – At December 31, 2025 and December 31, 2024 (Successor), the Company’s employees are not subject to union

or other collective bargaining agreements.

AUTO LOGISTICS, INC.

AND SUBSIDIARIES

Goodwill — Goodwill is recorded when the purchase price

paid in a business combination exceeds the fair value of assets acquired and liabilities assumed.

Goodwill is reviewed for impairment

on an annual basis, or upon an occurrence of an event or changes in circumstances that indicate that the carrying value may not be recoverable.

Goodwill impairment is the amount by which a reporting unit’s

carrying value exceeds its fair value, not to exceed the carrying amount of goodwill.

When testing goodwill for impairment, the Company

may first perform a qualitative assessment to determine whether the fair value of a reporting unit is less than its carrying amount.

The Company then completes a quantitative impairment test if the qualitative assessment indicates that it is more likely than not that

the reporting unit’s fair value is less than the carrying value of its assets.

If the estimated fair value of the reporting unit

exceeds the carrying value, goodwill is not considered impaired, and no additional steps are needed.

If, however, the fair value of the

reporting unit is less than its carrying value, then the amount of the impairment loss is the amount by which the reporting unit’s

carrying value exceeds its fair value, not to exceed the carrying amount of goodwill.

Intangible Assets, Net — The Company’s intangible

assets consist of acquired customer relationships and trade names.

Intangible assets with finite lives are amortized over their estimated

useful lives using the straight-line method.

Intangible assets historically have been acquired through business combinations and recorded

at their purchase date estimated fair value – see Note 3.

When determining the fair value of acquired intangible assets, management

makes significant estimates and assumptions, including, but not limited to, expected long-term market growth, customer retention, future

expected operating expenses, costs of capital and appropriate discount rates.

Finite-lived intangible assets are amortized using the

straight-line method over their respective estimated useful lives.

The Company amortizes its intangible assets using the straight-line

method over their estimated useful lives of 15 years for customer relationships, and 10 years for trade names.

Stock-Based Compensation — Restricted

Stock Units (“RSUs”) have been granted to eligible employees and independent board members of the Company.

As the requirement

to remain employed for the necessary service period and the performance vesting criteria are based on the performance of the Company.

The Company has recorded the compensation expense within stock-based compensation in the consolidated statement of operations.

In accounting

for stock-based compensation awards, the Company measures and recognizes the cost of employee services received in exchange for awards

of equity instruments based on the grant date fair value of those awards.

Compensation expense for time-vesting awards is recognized ratably

using the straight-line attribution method over the vesting period, which is considered to be the requisite service period.

The estimated

fair value of the RSU’s was determined using the fair value of the Company’s common stock on the grant date.

PROFICIENT AUTO LOGISTICS,

Business Combinations — The Company accounts for business combinations using the acquisition method pursuant to ASC 805, Business 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, 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.

The 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.

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

liabilities assumed.

Goodwill is reviewed for impairment on an annual basis with the assessment date of November 30th, or upon an occurrence

of an event or changes in circumstances that indicate that the carrying value may not be recoverable.

impairment is the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of

When testing goodwill for impairment, the Company may first perform a qualitative assessment to determine whether the fair

value of a reporting unit is less than its carrying amount.

The Company then completes a quantitative impairment test if the qualitative

assessment indicates that it is more likely than not that the reporting unit’s fair value is less than the carrying value of its

As part of the Company’s impairment analysis, fair value of a reporting unit is generally determined using the income and

market approaches.

The income approach requires management to estimate a number of factors for each reporting unit, including projected

future operating results, economic projections, anticipated future cash flows and discount rates.

The market approach estimates fair

value using comparable marketplace fair value data from within a comparable industry grouping, as well as recent guideline transactions.

The determination of the fair value of the reporting units requires the Company to make significant estimates and assumptions with respect

to the business and financial performance of the Company’s reporting units.

These estimates and assumptions primarily include,

but are not limited to, the selection of appropriate peer group companies, control premiums appropriate for acquisitions in the industry

in which we compete, discount rates, terminal growth rates, forecasts of revenue, operating income, working capital requirements, and

capital expenditures.

the estimated fair value of the reporting unit exceeds the carrying value, goodwill is not considered impaired, and no additional steps

If, however, the fair value of the reporting unit is less than it’s carrying value, then the amount of the impairment

loss is the amount by which the reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill.

Note 5 Goodwill, for further information regarding the Company’s Goodwill.

AUTO LOGISTICS, INC.

AND SUBSIDIARIES

Fair Value Measurements — The Company determines fair

value based upon the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between

market participants at the measurement date, as determined by either the principal market or the most advantageous market in which it

The Company applies fair value accounting for all the financial assets and liabilities that are recognized or disclosed at

fair value in the consolidated financial statements on a recurring basis.

The Company applies the following fair value hierarchy, which

prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest

level of input that is available and significant to the fair value measurement:

Level 1 – Observable inputs such as unadjusted, quoted prices

in active markets for identical assets or liabilities at the measurement date;

Level 2 – Observable inputs other than Level 1 prices, such

as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable

or can be corroborated by observable market data for substantially the full term of the assets or liabilities;

Level 3 – Unobservable inputs that are supported by little or

no market activity and that are significant to the fair value of the assets or liabilities.

These inputs are based on the Company’s

own assumptions about current market conditions and require significant management judgment or estimation.

As of December 31, 2024 and December 31, 2023, the carrying value

of cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, and other current assets and liabilities approximates

fair value due to the short maturities of these instruments.

Interest rates on borrowings under long-term debt and finance lease obligations

approximate the interest rates that would currently be available to the Company under similar terms, and as such, carrying value approximates

Certain assets, including goodwill, intangible assets and other long-lived assets, are also subject to measurement at fair

value on a nonrecurring basis (1) when they are acquired during a business combination as discussed in Note 3, and (2) if they are deemed

to be impaired as a result of an impairment review.

The earn-out liability relates to the acquisition of Deluxe as discussed

in Note 3 and is contingent consideration that is measured at the estimated fair value as of the date of acquisition, with subsequent

changes in fair value recorded in the consolidated statements of operations.

Contingent consideration is measured at fair value using

a discounted cash flow model utilizing significant unobservable inputs including the probability of achieving each of the potential milestones,

making it a Level 3 fair value measurement.

The Company reassesses the actual consideration earned and the probability-weighted future

earn-out payments at each balance sheet date.

Any adjustment to the contingent consideration will be recorded in the consolidated statements

of operations.

On September 30, 2024, the Company evaluated the earn-out and determined the probability of payment was remote and therefore

recorded a gain of $ 3,095,114 in the consolidated statements of operations to fully derecognize the amount initially recorded at the

acquisition date as the agreement expired in the fourth quarter of 2024 resulting in no amounts owed by the Company.

The earn out liability

was previously recorded in Accrued expenses on the consolidated balance sheets from the May 2024 acquisition date until the derecognition

was recorded in the third quarter of 2024.

Segment Reporting — In

accordance with ASC 280, Segment Reportin g, operating segments are defined as components of an enterprise for which separate

financial information is available and are regularly reviewed by the chief operating decision maker (“CODM”) in deciding how

to allocate resources and in assessing performance.

The CODM primarily evaluates performance based on operational results from the services

provided by Company Drivers and Brokered, which represent the Company’s operating segments for the period ended December 31, 2024

(Successor), for the period from January 1, 2024 to May 12, 2024 (Predecessor), for the periods ended December 31, 2023 and December 31,

2022 (Predecessor), respectively.

The Company’s CODM has been identified to collectively include the Company’s Chief

Executive Officer, Chief Financial Officer, and Chief Operating Officer.

PROFICIENT AUTO LOGISTICS,

Assets , Net — The Company’s intangible assets consist of acquired customer relationships and trade names.

assets with finite lives are amortized over their estimated useful lives using the straight-line method.

Intangible assets historically

have been acquired through business combinations and recorded at their purchase date estimated fair value – see Note 3.

determining the fair value of acquired intangible assets, management makes significant estimates and assumptions, including, but not

limited to, expected long-term market growth, customer retention, future expected operating expenses, costs of capital and appropriate

discount rates.

Finite-lived intangible assets are amortized using the straight-line method over their respective estimated useful lives.

The Company amortizes its intangible assets using the straight-line method over their estimated useful lives of 15 years for customer

relationships, and 10 years for trade names.

In 2025, the company recognized a non-cash intangible asset impairment of $ 2,126,000 to

customer relationships.

Compensation — Restricted Stock Units (“RSUs”) have been granted to eligible employees and independent board members

of the Company.

As the requirement to remain employed for the necessary service period and the performance vesting criteria are based

on the performance of the Company.

The Company has recorded the compensation expense within stock-based compensation in the consolidated

statement of operations.

In accounting for stock-based compensation awards, the Company measures and recognizes the cost of employee

services received in exchange for awards of equity instruments based on the grant date fair value of those awards.

Compensation expense

for time-vesting awards is recognized ratably using the straight-line attribution method over the vesting period, which is considered

to be the requisite service period.

The estimated fair value of the RSU’s was determined using the fair value of the Company’s

common stock on the grant date.

Value Measurements — The Company determines fair value based upon the price that would be received to sell an asset or paid

to transfer a liability in an orderly transaction between market participants at the measurement date, as determined by either the principal

market or the most advantageous market in which it transacts.

The Company applies fair value accounting for all the financial assets

and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis.

applies the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization

within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

1 – Observable inputs such as unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement

2 – Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets

that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full

term of the assets or liabilities;

3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets

or liabilities.

These inputs are based on the Company’s own assumptions about current market conditions and require significant

management judgment or estimation.

of December 31, 2025 and December 31, 2024, the carrying value of cash and cash equivalents, accounts receivable, accounts payable, accrued

liabilities, and other current assets and liabilities approximates fair value due to the short maturities of these instruments.

rates on borrowings under long-term debt and finance lease obligations approximate the interest rates that would currently be available

to the Company under similar terms, and as such, carrying value approximates fair value.

Certain assets, including goodwill, intangible

assets and other long-lived assets, are also subject to measurement at fair value on a nonrecurring basis (1) when they are acquired

during a business combination as discussed in Note 3, and (2) if they are deemed to be impaired as a result of an impairment review.

earn-out liability relates to the acquisition of Deluxe as discussed in Note 3 and is contingent consideration that is measured at the

estimated fair value as of the date of acquisition, with subsequent changes in fair value recorded in the consolidated statements of

Contingent consideration is measured at fair value using a discounted cash flow model utilizing significant unobservable

inputs including the probability of achieving each of the potential milestones, making it a Level 3 fair value measurement.

reassesses the actual consideration earned and the probability-weighted future earn-out payments at each balance sheet date.

Any adjustment

to the contingent consideration will be recorded in the consolidated statements of operations.

On September 30, 2024, the Company evaluated

the earn-out and determined the probability of payment was remote and therefore recorded a gain of $ 3,095,114 in the consolidated statements

of operations to fully derecognize the amount initially recorded at the acquisition date as the agreement expired in the fourth quarter

of 2024 resulting in no amounts owed by the Company.

The earn out liability was previously recorded in Accrued expenses on the consolidated

balance sheets from the May 2024 acquisition date until the derecognition was recorded in the third quarter of 2024.

AUTO LOGISTICS, INC.

AND SUBSIDIARIES

The CODM uses the Segment Operating profit or loss measure to evaluate

the profitability and operational efficiency of each segment, identify areas for improvement, and make informed decisions about resource

allocation, strategic planning, and performance targets.

This measure of segment profit or loss is consistent with the measurement principles

used in the consolidated financial statements.

The CODM reviews the segment Operating profit or loss on a quarterly basis during executive

meetings and uses this information to assess segment performance (analyzing margins, revenue changes, and expense management), allocate

resources (capital deployment and personnel allocation to executive strategic initiatives), strategic planning (setting short and longer

term goals for expansion), and performance targets (establishing key performance indicators, monitoring progress, and revising plans).

Adopted Accounting Pronouncements — In November 2023,

the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which

requires enhanced disclosures about significant segment expenses and information used to assess segment performance.

This standard is

effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15,

2024, with early adoption permitted.

The Company adopted the amendment on a retrospective basis for the 2024 annual reporting period

with the impact limited to incremental disclosures in our consolidated financial statements, with conforming presentation for 2023 in

Note 15 – Segment reporting.

Accounting Pronouncements Not Yet Adopted – In December 2023,

the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which would require

additional transparency for income tax disclosures, including the income tax rate reconciliation table and cash taxes paid both in the

United States and foreign jurisdictions.

Reporting — In accordance with ASC 280, Segment Reportin g, operating segments are defined as components

of an enterprise for which separate financial information is available and are regularly reviewed by the chief operating decision maker

(“CODM”) in deciding how to allocate resources and in assessing performance.

The CODM primarily evaluates performance based

on operational results from the services provided by Company Drivers and Subhaulers, which represent the Company’s operating segments

for the period ended December 31, 2025 and December 31, 2024 (Successor), for the period from January 1, 2024 to May 12, 2024 (Predecessor),

and for the periods ended December 31, 2023 (Predecessor), respectively.

The Company’s CODM has been identified to collectively

include the Company’s Chief Executive Officer, Chief Financial Officer, and Chief Operating Officer .

CODM uses the Segment Operating profit or loss measure to evaluate the profitability and operational efficiency of each segment, identify

areas for improvement, and make informed decisions about resource allocation, strategic planning, and performance targets.

of segment profit or loss is consistent with the measurement principles used in the consolidated financial statements.

The CODM reviews

the segment Operating profit or loss on a quarterly basis during executive meetings and uses this information to assess segment performance

(analyzing margins, revenue changes, and expense management), allocate resources (capital deployment and personnel allocation to executive

strategic initiatives), strategic planning (setting short and longer term goals for expansion), and performance targets (establishing

key performance indicators, monitoring progress, and revising plans).

Restructuring

Charges - In fiscal year 2025, management committed to a series of consolidation and organizational alignment initiatives aimed at

improving operational efficiency and long-term profitability.

As part of this commitment, we incurred a one-time restructuring charge

of $ 1.2 million in 2025.

These charges primarily consisted of separation payments related to headcount reductions.

Pronouncements —

December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which would require additional

transparency for income tax disclosures, including the income tax rate reconciliation table and cash taxes paid both in the United States

and foreign jurisdictions.

This standard is effective for annual periods beginning after December 15, 2024.

Company is currently assessing the impact this standard will have on its disclosures.

In March 2024, the SEC adopted final rules under SEC Release Nos.

33-11275 and 33-99678, The Enhancement and Standardization of Climate-Related Disclosures for Investors , that will require registrants

to provide certain climate-related information in their registration statements and annual reports.

Subsequent to issuance, the rules

became the subject of litigation, and the SEC has issued a stay to allow the legal process to proceed.

The Company is currently assessing

the impact this standard will have on its disclosures.

In November 2024, the FASB issued ASU 2024-03, Disaggregation of

Income Statement Expenses (Topic 220) , which requires additional disclosure about certain costs and expenses.

The ASU is effective

for fiscal years beginning after December 15, 2026, while early adoption is permitted.

The Company is currently assessing the impact

this standard will have on its disclosures.

PROFICIENT AUTO LOGISTICS, INC.

The Company has adopted the

new disclosure requirements, and they did not have a material impact on our disclosures.

March 2024, the SEC adopted final rules under SEC Release Nos.

33-11275 and 33-99678, The Enhancement and Standardization of Climate-Related

Disclosures for Investors , that will require registrants to provide certain climate-related information in their registration statements

and annual reports.

Subsequent to issuance, the rules became the subject of litigation, and the SEC has issued a stay to allow the legal

process to proceed.

The Company is currently assessing the impact this standard will have on its disclosures.

November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (Topic 220) , which requires additional

disclosure about certain costs and expenses.

The ASU is effective for fiscal years beginning after December 15, 2026, while early adoption

is permitted.

The Company is currently assessing the impact this standard will have on its disclosures.

September 2025, the FASB issued ASU 2025-06, Intangibles – Goodwill and Other – Internal Use Software (Subtopic 350-40),

which removes project development stages when developing internal use software.

The ASU is effective for fiscal years beginning after

December 15, 2027, while early adoption is permitted.

The Company is currently assessing any changes to capitalization that may be required.

AUTO LOGISTICS, INC.

AND SUBSIDIARIES

Note 3 — Business combinations

Acquisition of the Founding Companies

On December 21, 2023, Proficient Auto Logistics, Inc.

agreements to acquire in multiple, separate acquisitions five operating businesses and their respective affiliated entities to found

the Company, as applicable:

(i) Delta, (ii) Deluxe, (iii) Sierra, (iv) Proficient Transport, and (v) Tribeca.

The closing of the acquisitions

occurred concurrently with the closing of the Company’s IPO of its common stock on May 13, 2024.

The various agreements to acquire the Founding Companies are briefly

described below:

● The Company entered

into a Membership Interest Purchase Agreement and a Contribution Agreement to acquire all

of the outstanding equity of Delta for cash and shares of common stock.

business is transporting vehicles for automobile manufacturers to their dealers from the

manufacturing site, marine port or rail hub, but it also derives a non-insignificant portion

of its revenue from delivering used cars from and to auction companies, leasing companies,

automobile dealers, manufacturers and individuals, primarily in the Southeast and East Coast

of the United States.

— Business combinations

of the Founding Companies

December 21, 2023, Proficient Auto Logistics, Inc.

entered into agreements to acquire in multiple, separate acquisitions five operating

businesses and their respective affiliated entities to found the Company, as applicable:

(i) Delta, (ii) Deluxe, (iii) Sierra, (iv) Proficient

Transport, and (v) Tribeca.

The closing of the acquisitions occurred concurrently with the closing of the Company’s IPO of its

common stock on May 13, 2024.

various agreements to acquire the Founding Companies are briefly described below:

The Company entered into

a Membership Interest Purchase Agreement and a Contribution Agreement to acquire all of the outstanding equity of Delta for cash

and shares of common stock.

Delta’s main business is transporting vehicles for automobile manufacturers to their dealers from

the manufacturing site, marine port or rail hub, but it also derives a non-insignificant portion of its revenue from delivering used

cars from and to auction companies, leasing companies, automobile dealers, manufacturers and individuals, primarily in the Southeast

and East Coast of the United States.

● The Company entered into a Stock Purchase Agreement and a Merger Agreement to acquire all of the outstanding equity of Deluxe for cash, shares of common stock and contingent consideration in the form of an earn-out provision.

2 unchanged sentences

Deluxe’s primary business is transporting vehicles for automobile manufacturers to their dealers from the manufacturing site, marine port or rail hub, but it also derives a non-insignificant portion of its revenue from delivering used cars from and to auction companies, leasing companies, automobile dealers, manufacturers and individuals, primarily in the West Coast and South of the United States.

Company entered into a Stock Purchase Agreement and a Contribution Agreement to acquire all

of the outstanding equity of Proficient Transport for cash and shares of common stock.

Transport’s primary business is transporting vehicles for automobile manufacturers

to their dealers from the manufacturing site, marine port or rail hub, but it also derives

a non-insignificant portion of its revenue from delivering used cars from and to auction

companies, leasing companies, automobile dealers, manufacturers and individuals, primarily

The Company entered into

a Stock Purchase Agreement and a Contribution Agreement to acquire all of the outstanding equity of Proficient Transport for cash

and shares of common stock.

Proficient Transport’s primary business is transporting vehicles for automobile manufacturers to

their dealers from the manufacturing site, marine port or rail hub, but it also derives a non-insignificant portion of its revenue

from delivering used cars from and to auction companies, leasing companies, automobile dealers, manufacturers and individuals, primarily

in the South, Southeast and East Coast of the United States.

Company entered into a Stock Purchase Agreement and a Merger Agreement to acquire all of

the outstanding equity of Sierra for cash and shares of common stock.

Sierra Mountain’s

primary business is transporting vehicles for automobile manufacturers to their dealers from

the manufacturing site, marine port or rail hub, but it also derives a non-insignificant

portion of its revenue from delivering used cars from and to auction companies, leasing companies,

automobile dealers, manufacturers and individuals, primarily in the West Coast and the Midwest

The Company entered into

a Stock Purchase Agreement and a Merger Agreement to acquire all of the outstanding equity of Sierra for cash and shares of common

Sierra Mountain’s primary business is transporting vehicles for automobile manufacturers to their dealers from the manufacturing

site, marine port or rail hub, but it also derives a non-insignificant portion of its revenue from delivering used cars from and

to auction companies, leasing companies, automobile dealers, manufacturers and individuals, primarily in the West Coast and the Midwest

of the United States.

Company entered into a Stock Purchase Agreement and a Contribution Agreement to acquire all

of the outstanding equity of Tribeca for cash and shares of common stock.

primary business is transporting vehicles for automobile manufacturers to their dealers from

the manufacturing site, marine port or rail hub, but it also derives a non-insignificant

portion of its revenue from delivering used cars from and to auction companies, leasing companies,

automobile dealers, manufacturers and individuals, primarily in the East Coast and Southeast

The Company entered into

a Stock Purchase Agreement and a Contribution Agreement to acquire all of the outstanding equity of Tribeca for cash and shares of

common stock.

Tribeca’s primary business is transporting vehicles for automobile manufacturers to their dealers from the manufacturing

site, marine port or rail hub, but it also derives a non-insignificant portion of its revenue from delivering used cars from and

to auction companies, leasing companies, automobile dealers, manufacturers and individuals, primarily in the East Coast and Southeast

of the United States.

PROFICIENT AUTO LOGISTICS, INC.

AND SUBSIDIARIES

The acquisitions were accounted for using the

acquisition method of accounting, in accordance with ASC 805, Business Combinations .

Proficient Auto Logistics, Inc was the accounting

The tables below present the consideration transferred and the allocation of the total consideration to tangible and intangible

assets acquired and liabilities assumed from the acquisition of the Founding Companies based on the respective fair values as of May 13,

The preliminary purchase price allocation was based upon a preliminary

valuation, and the Company’s estimates and assumptions are subject to change within the measurement period (defined as one year

following the acquisition date).

As a result of further refining its estimates and assumptions since the date of the acquisition, the

Company recorded measurement period adjustments to the initial opening balance sheet as shown in the tables below.

Adjustments were primarily

made to property and equipment, operating lease right-of-use assets, goodwill, and deferred income taxes.

The property and equipment

fair value revision had an impact to depreciation expense and an adjustment to reduce depreciation by $ 848,000 was recorded in depreciation

on the consolidated statements of operations.

Acquisition Date

Recognized, As

Purchase consideration

Cash consideration paid

Stock consideration issued

Total purchase price

Allocation of purchase price

Cash and cash equivalents

Accounts receivable

Prepaid expenses and other current assets

Property and equipment

( 1,046,000 )

Operating right-of-use asset

( 2,848,030 )

Intangible assets

Accounts payable

( 1,938,014 )

( 1,960,184 )

Insurance payable

( 1,018,808 )

Operating lease liabilities

( 3,429,316 )

Long-term debt

( 16,854,781 )

Deferred tax liability

( 8,182,907 )

( 3,264,331 )

( 11,447,238 )

Fair value of net assets acquired

$ ( 4,736,500 )

PROFICIENT AUTO LOGISTICS,

AND SUBSIDIARIES

Acquisition Date

Recognized, As

Purchase consideration

Cash consideration paid

Stock consideration issued

Contingent consideration –

Total purchase price

$ ( 3,599,373 )

Allocation of purchase price

Cash and cash equivalents

Accounts receivable

Maintenance supplies

Prepaid expenses and other current assets

Property and equipment

( 2,461,198 )

Operating right-of-use asset

Net investment in leases

Intangible assets

Accounts payable

( 5,313,958 )

Accrued liabilities

( 5,975,871 )

( 5,641,377 )

Line of credit

( 2,911,720 )

Operating lease liabilities

( 1,455,919 )

Long-term debt

( 7,301,372 )

( 7,113,187 )

Deferred tax liability

( 6,161,897 )

( 4,714,617 )

Long-term liabilities

( 2,241,923 )

Fair value of net assets acquired

$ ( 2,733,162 )

$ ( 866,211 )

1 As of October 9, 2024, as part of the Stock Purchase Agreement and a Merger Agreement to acquire all of the outstanding equity of Deluxe, the Company and Deluxe acknowledged and agreed to the final calculation of the tangible and intangible assets acquired and liabilities assumed of Deluxe as defined in the Stock Purchase Agreement and a Merger Agreement.

As a result, the final consideration is less than the estimated closing consideration.

Accordingly, the Company reduced the purchase consideration paid to Deluxe by $ 3,599,373 as a measurement period adjustment.

Payment was received from Deluxe’s sellers on October 11, 2024.

2 On September 30, 2024, the Company evaluated the earn-out and determined the probability of payment was remote and therefore recorded a gain of $ 3,095,114 in the consolidated statements of operations.

There is no remaining earn-out liability expected to be settled as at December 31, 2024.

PROFICIENT AUTO LOGISTICS,

AND SUBSIDIARIES

Proficient Transport

Acquisition Date

Recognized, As

Purchase consideration

Cash consideration paid

Stock consideration issued

Total purchase price

$ 108,761,111

Allocation of purchase price

Cash and cash equivalents

Accounts receivable

Maintenance supplies

Assets held for sale

Income Tax Receivable

Prepaid expenses and other current assets

Property and equipment

( 2,457,302 )

Operating right-of-use asset

Net investment in leases

Other long-term assets

Intangible assets

Accounts payable

( 2,379,536 )

Accrued liabilities

( 6,482,594 )

( 6,688,183 )

Income tax payable

Finance lease liabilities

Operating lease liabilities

Long-term debt

( 5,920,400 )

Deferred tax liability

( 7,320,667 )

( 2,617,343 )

( 9,938,010 )

Fair value of net assets acquired

$ ( 2,579,724 )

PROFICIENT AUTO LOGISTICS, INC.

AND SUBSIDIARIES

Acquisition Date

Recognized, As

Purchase consideration

Cash consideration paid

Stock consideration issued

Total purchase price

$ ( 730,888 )

Allocation of purchase price

Cash and cash equivalents

Accounts receivable

Assets held for sale

Prepaid expenses and other current assets

Property and equipment

( 4,024,458 )

Operating right-of-use asset

Other long-term assets

Intangible assets

Accounts payable

( 2,347,239 )

Accrued liabilities

( 5,279,472 )

( 5,543,557 )

Income Tax Payable

Owner operator deposits

( 1,245,163 )

Lease deposits

Equipment obligations

( 15,113,309 )

Operating lease liabilities

Deferred tax liability

( 8,543,273 )

( 6,867,476 )

Fair value of net assets acquired

$ ( 2,612,746 )

1 In November 2024, the Company used escrow funds to partially pay for litigation settlement.

Further discussion on the settlement can be found in Note 18, Commitments and Contingencies.

PROFICIENT AUTO LOGISTICS, INC.

AUTO LOGISTICS, INC.

AND SUBSIDIARIES

Acquisition Date

Recognized, As

acquisitions were accounted for using the acquisition method of accounting, in accordance with ASC 805, Business Combinations .

Proficient Auto Logistics, Inc was the accounting acquirer.

The tables below present the consideration transferred and the allocation

of the total consideration to tangible and intangible assets acquired and liabilities assumed from the acquisition of the Founding Companies

based on the respective fair values as of May 13, 2024.

preliminary purchase price allocation was based upon a preliminary valuation, and the Company’s estimates and assumptions are subject

to change within the measurement period (defined as one year following the acquisition date).

As a result of further refining its estimates

and assumptions since the date of the acquisition, the Company recorded measurement period adjustments to the initial opening balance

sheet as shown in the tables below.

Adjustments were primarily made to property and equipment, operating lease right-of-use assets, goodwill,

and deferred income taxes.

The property and equipment fair value revision had an impact to depreciation expense and an adjustment to

reduce depreciation by $ 848,000 was recorded in depreciation on the consolidated statements of operations.

Acquisition Date Amounts Recognized as of December 31, 2024

Purchase consideration

Cash consideration paid

Stock consideration issued

Total purchase price

Allocation of purchase price

Cash and cash equivalents

Accounts receivable

Prepaid expenses and other current assets

Property and equipment

( 2,605,233 )

Operating right-of-use asset

Intangible assets

Accounts payable

( 1,988,465 )

( 2,938,060 )

Accrued liabilities

Operating lease liabilities

( 8,173,047 )

( 8,142,800 )

Long-term debt

consideration paid

$ 178,528,051

consideration issued

consideration – earn-out

purchase price

$ 108,761,111

Deferred tax liability

$ 284,945,125

Allocation of purchase

value of net assets acquired

$ 144,841,925

Fair value of net assets acquired

$ 140,103,200

Total Acquisition Date Amounts Recognized

Acquisition Date Amounts Recognized as of May 12, 2025

Purchase consideration

Cash consideration paid

consideration paid

$ 177,491,107

Stock consideration issued

Contingent consideration –

Total purchase price

consideration issued

consideration – earn-out

purchase price

$ 108,761,111

$ 283,908,181

Allocation of purchase price

Fair value of net assets acquired

Allocation of

purchase price

value of net assets acquired

$ 142,387,816

$ 141,520,365

PROFICIENT AUTO LOGISTICS, INC.

1 Final adjustments were made to Deluxe and Proficient Transport.

At Deluxe, the Company withheld $ 1,036,944 of the escrow payment and incurred $ 1,381,957 in additional liabilities and deferred taxes.

At Proficient Transport, an adjustment was made to income tax receivable of $ 1,072,152 .

AUTO LOGISTICS, INC.

AND SUBSIDIARIES

Total Acquisition Date Amounts Recognized, As Adjusted

Purchase consideration

Cash consideration paid

$ 178,528,051

Stock consideration issued

Contingent consideration –

Total purchase price

$ 108,761,111

$ 284,945,125

Allocation of purchase price

Fair value of net assets acquired

$ 144,841,925

$ 140,103,200

The Company recognized intangible assets as follows, none of which

are expected to have a residual value at the end of their estimated useful lives:

Company recognized intangible assets as follows:

Useful Life Delta Deluxe Proficient

3 unchanged sentences

Total $ 36,000,000 $ 19,300,000 $ 36,900,000 $ 19,200,000 $ 3,500,000 $ 114,900,000

The Combinations resulted in $ 140,103,200 of goodwill

consisting largely of the expected synergies from combining operations as well as the value of the workforce.

As a result of the types

of acquisitions the Company engaged in 2024, asset, stock acquisitions, and stock acquisitions with the 338(h)(10) election made, the

Company expects approximately $ 120.4 million of the total goodwill reported will be tax deductible.

During the measurement period, which

is up to one year from the acquisition date, the Company may record adjustments to the fair value of assets acquired and liabilities assumed

with the corresponding offset to goodwill.

At December 31, 2024, the values are substantially complete with the exception of identifiable

other intangible assets, property, income taxes and goodwill which remain open pending final review and valuations.

Upon the conclusion

of the measurement period, any subsequent adjustments are recorded to earnings.

The Company recorded remeasurement adjustments of the

Founding Companies as indicated in the respective entity table columns above.

Combinations resulted in $ 141.5 million of goodwill consisting largely of the expected synergies from combining operations as well

as the value of the workforce.

As a result of the types of acquisitions in which the Company engaged for the period April 1 to May 12,

2024, asset, stock acquisitions, and stock acquisitions with a 338(h)(10) election made, the Company expects approximately $ 120.6 million

of the total goodwill reported will be tax deductible.

During the measurement period, which is up to one year from the acquisition date,

the Company may record adjustments to the fair value of assets acquired and liabilities assumed with the corresponding offset to goodwill.

At December 31, 2025, the values of the founding companies are complete.

Any subsequent adjustments will now be recorded to earnings.

The Company recorded remeasurement adjustments of the Founding Companies as indicated in the respective entity table columns above.

August 8, 2024, PAL Stock Acquiror, Inc.

and PAL Merger Sub, LLC, subsidiaries of the Company, executed an Agreement and Plan of Merger

(the “Merger Agreement”) with Auto Transport Group, LC, (“ATG”) pursuant to which the Company acquired all of

the outstanding equity of ATG to expand the Company’s geographic presence and services offered.

ATG provides vehicle transportation

and shipping services in the Mountain Western region.

The transaction closed on August 15, 2024.

The acquisition was accounted for using

the acquisition method of accounting, in accordance with ASC 805, Business Combinations .

Proficient Auto Logistics, Inc.

AND SUBSIDIARIES

Earn-out liability

As part of the Company’s acquisition of

Deluxe, the purchase price consideration included an earn-out provision which provided that the Company would make earn-out payments,

fifty percent ( 50 %) in cash and fifty percent ( 50 %) in shares of common stock, to Deluxe under certain terms and conditions related to

Deluxe Auto’s EBITDA for the period commencing on January 1, 2024 and ending December 31, 2024.

The earn-out liability associated

with the Deluxe Business Combination was remeasured in the period ending September 30, 2024 based upon the best and most available information

that exists as of the balance sheet date concluding the probability of the payment was remote and therefore the Company recorded a gain

of $ 3,095,114 in the consolidated statements of operations.

The earn-out liability expired December 31, 2024 with the Company owing no

amounts under the agreement.

Auto Transport Group Acquisition

On August 8, 2024, PAL Stock Acquiror, Inc.

and PAL Merger Sub, LLC,

subsidiaries of the Company, executed an Agreement and Plan of Merger (the “Merger Agreement”) with Auto Transport Group,

LC, (“ATG”) pursuant to which the Company acquired all of the outstanding equity of ATG to expand the Company’s geographic

presence and services offered.

ATG provides vehicle transportation and shipping services in the Mountain Western region.

The transaction

closed on August 15, 2024.

The acquisition was accounted for using the acquisition method of accounting, in accordance with ASC 805,

Business Combinations .

Proficient Auto Logistics, Inc was the accounting acquirer, and the Company elected to apply pushdown accounting.

The table below presents the consideration transferred and the allocation of the total consideration to tangible and intangible assets

acquired and liabilities assumed from the acquisition of ATG based on the respective fair values as of August 15, 2024 as well as the

measurement period adjustments recorded as of December 31, 2024:

was the accounting acquirer, and the Company elected to apply pushdown accounting.

The table below presents the consideration transferred

and the allocation of the total consideration to tangible and intangible assets acquired and liabilities assumed from the acquisition

of ATG based on the respective fair values as of December 31, 2024 as well as the measurement period adjustments recorded as of August

Purchase consideration

Cash consideration paid

Stock consideration issued

Total purchase price

Allocation of purchase price

Cash and cash equivalents

Accounts receivable

Prepaid expenses and other current assets

Property and equipment

Operating right-of-use asset

Net investment in leases

Intangible assets

Accounts payable

( 1,134,536 )

Accrued liabilities

Operating lease liabilities

Long-term debt

( 4,700,710 )

Deferred Tax Liability

( 7,129,446 )

( 1,926,791 )

( 9,056,237 )

Fair value of net assets acquired

$ ( 1,931,143 )

PROFICIENT AUTO LOGISTICS, INC.

AND SUBSIDIARIES

The Company recognized intangible assets as follows:

consideration paid

consideration issued

purchase price

of purchase price

value of net assets acquired

Company recognized intangible assets as follows:

Useful Life Auto

2 unchanged sentences

Total $ 23,300,000

The acquisition of ATG resulted in $ 24,593,929

goodwill, consisting largely of the expected synergies from combining operations as well as the value of the workforce.

As a result of

this asset acquisition the Company engaged in 2024, no portion of the total goodwill reported will be tax deductible.

During the measurement

period, which is up to one year from the acquisition date, the Company may record adjustments to the fair value of assets acquired and

liabilities assumed with the corresponding offset to goodwill.

At December 31, 2024, the values are substantially complete with the exception

of identifiable other intangible assets, property, income taxes and goodwill which remain open pending final review and valuations.

the conclusion of the measurement period, any subsequent adjustments are recorded to earnings.

The Company recorded remeasurement adjustments

of the ATG Goodwill, Deferred Tax Liability and Accrued Liabilities as indicated in the respective entity table columns above.

Utah Truck & Trailer Acquisition

On November 1, 2024, PAL Stock Acquiror, Inc.

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

The Company purchased UTT for $ 4,515,004 in an all-cash transaction to expand the Company’s ability to maintain its revenue

generating fleet in the Western region of the country.

acquisition of ATG resulted in $ 23,875,491 of goodwill, consisting largely of the expected synergies from combining operations, as well

as the value of the workforce.

In this asset acquisition, no portion of the total goodwill reported will be tax deductible.

measurement period, which is up to one year from the acquisition date, the Company may record adjustments to the fair value of assets

acquired and liabilities assumed with the corresponding offset to goodwill.

At December 31, 2025, the value of ATG acquisition is complete.

Any subsequent adjustments will now be recorded to earnings.

AUTO LOGISTICS, INC.

AND SUBSIDIARIES

Truck & Trailer Acquisition

November 1, 2024, PAL Stock Acquiror, Inc.

purchased Utah Truck & Trailer Repair, LLC, (“UTT”), a repair facility located

at the ATG headquarters terminal in Ogden, Utah.

The Company purchased UTT for $ 4,515,004 in an all-cash transaction to expand the

Company’s ability to maintain its revenue generating fleet in the Western region of the country.

In connection with this acquisition,

the Company recognized $ 155,458 in net tangible assets and $ 4,359,546 in goodwill consisting largely of the expected synergies

from combining operations as well as the value of the workforce.

As a result of this asset acquisition, the Company expects all of the

goodwill reported will be tax deductible.

At December 31, 2025, the value of UTT acquisition is complete.

Any subsequent adjustments

will now be recorded to earnings.

Auto Transport Acquisition

April 1, 2025, PAL Stock Acquiror, Inc.

purchased all the outstanding equity of Brothers Auto Transport, LLC, (“Brothers”),

which provides vehicle transportation and shipping services in the Northeast and MidAtlantic regions of the country.

Brothers was purchased

for $ 12,448,011 , a combination of cash and stock.

In connection with this acquisition, the Company recognized $ 6,674,876 in net tangible

assets and $ 4,359,546 in Goodwill consisting largely of the expected synergies from combining operations as well as the value of the workforce.

As a result of this asset acquisition the Company engaged in 2024, the Company expects all of the goodwill reported will be tax deductible.

During the measurement period, which is up to one year from the acquisition date, the Company may record adjustments to the fair value

of assets acquired and liabilities assumed with the corresponding offset to goodwill.

Upon the conclusion of the measurement period, any

subsequent adjustments are recorded to earnings.

Unaudited Proforma and Revenue and Earnings

of Acquirees from Acquisition Date through December 31, 2024

The amounts shown below reflect the unaudited

proforma summary combined financial results of the five Founding Companies, ATG, and UTT for the full twelve-month periods presented without

any pro forma adjustments that would give effect to the completion of the IPO or any related transaction expenses or adjustments recognized

as a result of the IPO and concurrent Combinations.

The results of Proficient (acquiror entity) are included in the year ended December

however, they reflect only those operating expenses incurred following the closing of the IPO and concurrent Combinations (May

13 – December 31, 2024).

There are no comparative expenses of Proficient during the year ended December 31, 2023.

Unaudited Proforma

Year Ended December 31,

assets which includes $ 6,338,899 in equipment notes, and $ 2,220,000 in intangible assets and $ 3,553,135 in goodwill consisting largely

of the expected synergies from combining operations as well as the value of the workforce.

As a result of this acquisition, the Company

expects all of the goodwill reported will be tax deductible.

During the measurement period, which is up to one year from the acquisition

date, the Company may record adjustments to the fair value of assets acquired and liabilities assumed with the corresponding offset to

Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings.

Truck and Trailer Acquisition

May 27, 2025, Proficient Repairs Services, LLC purchased PVT Truck & Trailer Repair, LLC, (“PVT”), a repair facility

located at the Brothers headquarters terminal in Wind Gap, Pennsylvania.

The Company purchased PVT for $ 1,032,995 in an all-cash

transaction to expand the Company’s ability to maintain its revenue generating fleet in the Northeast and MidAtlantic regions of

In connection with this acquisition, the Company recognized $ 310,129 in net tangible assets and $ 722,866 in goodwill

consisting largely of the expected synergies from combining operations as well as the value of the workforce.

As a result of this asset

acquisition, the Company expects all of the goodwill reported will be tax deductible.

During the measurement period, which is up to one

year from the acquisition date, the Company may record adjustments to the fair value of assets acquired and liabilities assumed with

the corresponding offset to goodwill.

Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings.

Proforma and Revenue and Earnings of Acquirees from Acquisition Date through December 31, 2025

amounts shown below reflect the unaudited proforma summary combined financial results of the five Founding Companies, ATG, and UTT for

the full twelve-month periods presented without any pro forma adjustments that would give effect to the completion of the IPO or any

related transaction expenses or adjustments recognized as a result of the IPO and concurrent Combinations.

The results of Proficient

(acquiror entity) are included in the year ended December 31, 2024;

however, they reflect only those operating expenses incurred following

the closing of the IPO and concurrent Combinations (May 13 – December 31, 2024).

There are no comparative expenses of Proficient

during the year ended December 31, 2023.

Ended December 31,

Total operating revenue

2 unchanged sentences

$ 418,267,000

Total operating income

Total Operating revenue and Operating income of acquirees of the five

Founding Companies, ATG, and UTT incorporated within the consolidated financial results of Proficient (acquiror entity) since their acquisition

dates comprise the following:

Total operating (loss) income

$ ( 32,334,882 )

Operating revenue and Operating income of acquirees of the five Founding Companies, ATG, and UTT incorporated within the consolidated

financial results of Proficient (acquiror entity) since their acquisition dates comprise the following:

Total Operating Revenue

1 unchanged sentence

Total Operating Income

PROFICIENT AUTO LOGISTICS,

AUTO LOGISTICS, INC.

AND SUBSIDIARIES

Note 4 — Prepaid expenses and other current assets

Prepaid expenses and other current assets consist of the following:

Prepaid Insurance

Other Current Assets

Note 5 — Goodwill

The changes in the carrying amount of goodwill and allocation to reportable

segment are as follows:

4 — Prepaid expenses and other current assets

Prepaid expenses

and other current assets consist of the following:

Current Assets

is evaluated for impairment annually as of November 30, or more frequently if an event occurs or circumstances change that would more

likely than not reduce the fair value of a reporting unit below its carrying value.

of November 30, 2025, the company completed a quantitative impairment analysis for goodwill related to its Company Driver and Subhauler

reporting units during its annual assessment.

Based on this analysis, the Company recognized goodwill impairment of $ 25.6 million within

its Subhauler reporting unit, reflected in Goodwill & Intangibles Impairment within the Consolidated Statements of Operations.

revisions to forecasts in the analysis was the primary reason for the impairment charge As of November 30, 2025, the Company believes

the carrying value of the Subhauler reporting unit approximates its fair value.

As of November 30, 2025, the carrying value of goodwill

within the Subhauler reporting unit was $ 57.8 million.

part of the Company’s impairment analyses, fair value of the reporting units were determined using both the income and market approach.

The income approach requires management to estimate a number of factors, including the projected future operating results, economic projections,

anticipated future cash flow and discount rates.

The market approach estimates fair value using comparable marketplace fair value data

from within a comparable industry grouping as well as recent guideline transactions.

determination of the fair value of the reporting unit requires the Company to make significant estimates and assumptions related to the

business and financial performance of the Company’s reporting units.

These estimates and assumptions primarily include but are

not limited to;

the selection of appropriate peer group companies, control premiums appropriate for acquisitions in the industry which

the Company competes, discount rates, terminal growth rates, forecasts of revenue, operating income, depreciation, amortization, working

capital requirements and capital expenditures.

Future increases in discount rates or deterioration in the observable prices for guideline

companies could result in further goodwill impairment in subsequent periods.

AUTO LOGISTICS, INC.

AND SUBSIDIARIES

in the carrying amount of goodwill and allocation to reportable segment are as follows:

Balance – December 31, 2024

$ 169,056,675

( 25,555,000 )

Balance – December 31, 2025

$ 148,476,407

Note 6 — Intangible assets, net

December 31, 2024

6 — Intangible assets, net

Customer relationships

5 unchanged sentences

$ ( 17,615,109 )

There were no intangible assets, accumulated amortization or amortization

expense prior to the Founding Companies acquisitions in May 2024 as discussed in Note 3 above.

In the year ended December 31, 2024, amortization

expense was $ 4,882,778 for Customer relationships and $ 826,582 for Trade names.

Amortization expense related to finite lived intangible

assets is included in intangible amortization expenses in the consolidated statement of operations.

As of December 31, 2024, the expected amortization expense associated

with the Company’s identifiable intangible assets with estimable useful lives over the next five years was as follows:

$ 122,804,891

As of December 31, 2024, the weighted average amortization period

for all intangible assets was 13.9 years, with 14.3 years for Customer relationships and 9.3 years for Trade names.

PROFICIENT AUTO LOGISTICS,

Customer relationships

$ 124,700,000

$ ( 4,882,778 )

$ 119,817,222

$ 138,200,000

$ ( 5,709,360 )

$ 132,490,640

Company evaluates the recoverability of definite-lives intangible assets whenever events or changes in circumstance indicate that the

carrying value of such an asset may not be recoverable.

The evaluation of definite-lived intangible assets is performed at the lowest

level of identifiable cash flows.

As a result of factors leading from the assessment of goodwill, the Company evaluated intangible and

long-lived assets for impairment.

The assessment resulted in an impairment charge of $ 2.1 million within customer relationships.

charge was recognized within the Subhauler segment, reflected on the Consolidated Statement of Operation within Goodwill & Intangibles

The fair value of the intangible assets were determined using the income approach.

were no intangible assets , accumulated amortization or amortization expense prior to the Founding Companies acquisitions in May 2024

as discussed in Note 3 above.

In the year ended December 31, 2025 and 2024, amortization expense was $ 8,413,483 and $ 4,882,778 for Customer

relationships and $ 1,366,266 and $ 826,582 for Trade names, respectively.

Amortization expense related to finite lived intangible assets

is included in intangible amortization expenses in the consolidated statement of operations.

AUTO LOGISTICS, INC.

AND SUBSIDIARIES

Note 7 — Property and equipment

Property and equipment, net of accumulated depreciation, consists

of the following

of December 31, 2025, the expected amortization expense associated with the Company’s identifiable intangible assets with estimable

useful lives over the next five years was as follows:

$ 122,804,891

of December 31, 2025, the weighted average amortization period for all intangible assets was 13.0 years, with 13.4 years for Customer

relationships and 8.4 years for Trade names.

— Property and equipment

and equipment, net of accumulated depreciation, consists of the following

Buildings and improvements

3 unchanged sentences

Transportation equipment

Less accumulated amortization and depreciation

Less accumulated amortization

and depreciation

( 43,500,044 )

( 15,541,572 )

Property and equipment, net

Property and equipment,

$ 115,850,061

The Company recorded a gain on the disposal of

equipment of $ 149,683 , $ 235,081 , $ 173,859 , and $ 47,847 in the consolidated statements of operations for the year ended December 31, 2024

(Successor), for the period from January 1, 2024 to May 12, 2024 (Predecessor), for the year ended December 31, 2023 (Predecessor), and

for the year ended December 31, 2022 (Predecessor), respectively.

Note 8 — Accrued liabilities

Accrued liabilities consist of the following:

Claims, insurance and litigation reserves

Accrued purchased transportation

$ 122,636,636

Company recorded a gain on the disposal of equipment of $ 257,864 , $ 149,683 , $ 235,081 , and $ 173,859 , in the consolidated statements of

operations for the year ended December 31, 2025(Successor), December 2024 (Successor), for the period from January 1, 2024 to May 12,

2024 (Predecessor), and for the year ended December 31, 2023 (Predecessor), respectively.

— Accrued liabilities

Accrued liabilities

consist of the following:

Claims, insurance and litigation

Deferred leased to purchase payments

Salaries, wages and benefits

Accrued purchased transportation

Owner operator deposits

Customer Deposits

Escrow payments

Other accrued expenses

Accrued liabilities

Accrued purchased transportation represents obligations to external

carriers, including subhauler expenses, outside carrier and driver expenses, and in-transit purchased transport.

Owner-operator deposits

consist of truck escrow payments and damage repair fund.

Other accrued expenses primarily include costs incurred but not yet invoiced,

and estimates for property, sales and other taxes.

PROFICIENT AUTO LOGISTICS,

purchased transportation represents obligations to external carriers, including subhauler expenses, outside carrier and driver expenses,

and in-transit purchased transport.

Owner operator deposits consist of truck escrow payments and damage repair fund.

Other accrued expenses

primarily include costs incurred but not yet invoiced, and estimates for property, sales and other taxes.

AUTO LOGISTICS, INC.

AND SUBSIDIARIES

Note 9 — Income taxes

Deferred income tax assets and liabilities consist of the following

as of December 31:

— Income taxes

income tax assets and liabilities consist of the following as of December 31:

Deferred tax assets:

5 unchanged sentences

Stock compensation

Deferred revenue

Other deferred assets

3 unchanged sentences

$ ( 1,415,903 )

$ ( 2,381,137 )

Property and equipment, net

3 unchanged sentences

( 28,830,141 )

( 33,720,352 )

Other deferred liabilities

5 unchanged sentences

$ ( 42,638,079 )

The Company has a Federal Net Operating Loss (NOL) of $ 11.2 million

at December 31, 2024 and acquired Federal NOL of $ 14.2 million from the Predecessor.

The net operating losses relate to years after 2017

and are not subject to expiration.

Company expects to increase the Federal Net Operating Loss (“NOL”) by $ 3.0 resulting in a NOL carryforward of $ 35.2 million

at December 31, 2025, including acquired Federal NOL of $ 13.6 million from the Predecessor.

The net operating losses relate to years

after 2017 and are not subject to expiration.

The acquired NOL is subject to limitation on use under IRC 382.

However, based on the calculations,

the cumulative limitation applicable for 2025 and forward would allow for unrestricted use as needed in future periods.

There are accompanying State jurisdiction NOLs that vary in amount

and carryforward period from the Federal NOL discussion above.

However, based

on our calculations, the cumulative limitation applicable for 2024, 2025, and forward would allow for unrestricted use as needed in future

are accompanying State jurisdiction NOLs that vary in amount and carryforward period from the Federal NOL discussion above.

adjustments from Federal NOL to State NOL are represented by decoupling from bonus depreciation and application of the 163j interest

limitation at the state levels.

There are also State level applications of IRC 382 in certain jurisdictions.

In general, there is approximately $ 11.1 M of gross State NOLs from the current period and $ 10.6 M of acquired NOLs from Predecessor

that are subject to expiration between 15- and 20-year periods depending upon the State jurisdiction.

Additionally, many states

have legislated an annual limitation on use in addition to any IRC 382 considerations.

Income tax expense consists of the following:

There are expected

net usage of State NOLS for the period ending December 31, 2025, leaving $ 15.2 million of gross State NOL carryforward from December

31, 2024, including $ 8.7 million of acquired NOLs from Predecessor;

all of which are subject to expiration between 15 - and 20 -year periods

depending upon the State jurisdiction.

Additionally, many states have legislated an annual limitation on use in addition to any

IRC 382 considerations.

The geographical

breakdown of our income (loss) before income taxes is as follows:

United States

( 43,241,214 )

( 9,720,652 )

( 21,735,318 )

(Loss) Income Before

( 43,241,214 )

( 9,720,652 )

( 21,735,318 )

AUTO LOGISTICS, INC.

AND SUBSIDIARIES

expense consists of the following:

Current income taxes:

$ ( 2,741,786 )

Total current income taxes

Total current income

( 2,653,133 )

1 unchanged sentence

( 5,513,609 )

Total deferred income taxes (benefit)

( 2,891,551 )

( 2,224,030 )

Total deferred income

taxes (benefit)

( 7,737,639 )

( 1,382,562 )

( 3,697,509 )

Total income tax expense

1 unchanged sentence

$ ( 1,245,384 )

PROFICIENT AUTO LOGISTICS,

AND SUBSIDIARIES

The income tax provision differs from the amount determined by applying

$ ( 6,350,642 )

ended December 31, 2025, following the adoption of ASU 2023-09, our tax payments by jurisdiction are as follows:

Massachusetts

Total income taxes paid

tax provision differs from the amount determined by applying the U.S.

federal tax rate as follows:

Disclosures as adopted by ASU 2023-09

statutory rate

$ ( 9,080,655 )

State and local income taxes (1)

( 1,599,150 )

Non-taxable or non-deductible items:

Stock based compensation

Goodwill impairment

to provision and def.

rate adjustment

Total tax provision and

effective rate

$ ( 7,221,648 )

(1) State Taxes of Delaware, California, Texas, New York and Massachusetts made up the majority (greater than 50%) of the tax effect in this category.

AUTO LOGISTICS, INC.

AND SUBSIDIARIES

Disclosures prior to the adoption of ASU 2023-09

Federal (benefit) tax at statutory rate ( 21 %)

2 unchanged sentences

State taxes, net of federal benefit

Change in effective income tax rate

Permanent differences to return 1

Other Discrete

Other discrete items

( 1,360,966 )

Total income tax (benefit) expense

Total income tax (benefit)

$ ( 1,245,384 )

$ ( 6,350,642 )

(1) For the period twelve months ending December 31, 2024, stock-based

compensation deduction limitation accounts for $ 1.2 million of the permanent item above.

The Founding Companies’ tax years

2019 and forward remain subject to examination by federal and state jurisdictions.

The Founding Companies are not currently under an

IRS examination as of the date these financials were available to be issued.

The Company has no uncertain tax positions.

Note 10 — Line of credit

At December 31, 2023, Proficient Transport had an outstanding balance

on the revolving line of credit of $ 3,450,129 .

The revolving line of credit for Proficient Transport was with a financial institution

which provided for borrowings up to $ 18,000,000 subject to a borrowing base calculation of Qualified Accounts Receivable plus Qualified

Rolling Stock (trucks, tractors, and trailers that transport goods in interstate commerce purchased on the line).

Interest was payable

monthly at the Prime Rate plus 0.75 % per annum, but no less than 4 % per annum ( 9.25 % as of December 31, 2023).

Borrowings against the

line of credit was secured by all assets of Proficient Transport.

The line of credit required Proficient Transport to comply with certain

restrictive covenants, including but not limited to a debt service coverage ratio, tangible net worth plus subordinated debt, and liabilities

to tangible net worth plus subordinated debt ratio.

Proficient Transport was in compliance with all covenants as December 31, 2023.

July 9, 2024, Proficient Transport terminated its revolving line of credit.

In June 2024, Proficient Transport entered into a revolving line of

credit agreement with a financial institution which provides for borrowing up to $ 12,000,000 subject to a borrowing base calculation of

Qualified Accounts Receivable.

Interest is payable monthly at the Prime Rate but no less than 3 % annum.

Borrowings against the line of

credit are secured by all of Proficient Transport’s assets and matures in June 2026, when all accrued interest and unpaid principal

(1) For the period twelve months ending December 31, 2024, stock-based compensation deduction limitation accounts for $ 1.2 million of the permanent item above.

Founding Companies’ tax years 2020 and forward remain subject to examination by federal and/or state jurisdictions dependent

upon their respective statutory periods.

The Founding Companies are not currently under an IRS examination as of the date these

financials were issued.

Company has no uncertain tax positions.

— Line of credit

December 31, 2023, Proficient Transport had an outstanding balance on the revolving line of credit of $ 3,450,129 .

The revolving line

of credit for Proficient Transport was with a financial institution which provided for borrowings up to $ 18,000,000 subject to a borrowing

base calculation of Qualified Accounts Receivable plus Qualified Rolling Stock (trucks, tractors, and trailers that transport goods in

interstate commerce purchased on the line).

Interest was payable monthly at the Prime Rate plus 0.75 % per annum, but no less than 4 %

per annum ( 9.25 % as of December 31, 2023).

Borrowings against the line of credit was secured by all assets of Proficient Transport.

line of credit required Proficient Transport to comply with certain restrictive covenants, including but not limited to a debt service

coverage ratio, tangible net worth plus subordinated debt, and liabilities to tangible net worth plus subordinated debt ratio.

Transport was in compliance with all covenants as December 31, 2023.

On July 9, 2024, Proficient Transport terminated its revolving line

June 2024, Proficient Transport entered into a revolving line of credit agreement with a financial institution which provides for borrowing

up to $ 12,000,000 subject to a borrowing base calculation of Qualified Accounts Receivable.

Interest is payable monthly at the Prime

Rate but no less than 3 % annum.

Borrowings against the line of credit are secured by all of Proficient Transport’s assets and matures

in June 2026, when all accrued interest and unpaid principal is due.

This line of credit was repaid and terminated on November 8, 2024.

At the time of termination, the revolving line of credit had

an outstanding balance of $ 9,514,907 including interest.

In May 2024, Deluxe entered into a line of credit agreement with a

Under this agreement, Deluxe, or any of its subsidiaries or affiliates, may request the issuance of letters of credit by the bank

or any bank affiliate, subject to the bank’s approval and the terms of the agreement.

The agreement established a credit facility

(the “Facility”) with a maximum borrowing base of $ 6,000,000 .

At the time of termination, the revolving line of credit had an outstanding balance of $ 9,514,907 including interest.

May 2024, Deluxe entered into a line of credit agreement with a bank.

Under this agreement, Deluxe, or any of its subsidiaries or affiliates,

may request the issuance of letters of credit by the bank or any bank affiliate, subject to the bank’s approval and the terms of

the agreement.

The agreement established a credit facility (the “Facility”) with a maximum borrowing base of $ 6,000,000 .

In May 2024, the agreement was amended and extended to August 2024.

The line of credit was paid off and terminated on August 8, 2024.

On November 8, 2024, Proficient entered into

a credit facility with a commercial bank that includes up to $ 25 million in term debt and up to another $ 20 million in a revolving

line of credit with a maturity date of November 8, 2029 .

The term debt portion bears interest at the Secured Overnight Financing Rate

(“SOFR”), plus 2.50 %, with interest only payments for the first six months and the balance at the end of six months with

principal amortizing over the ensuing five years with 60 monthly payments.

Drawn balances from the revolving line of credit bear

interest at SOFR, plus 2.20 %, with all principal and interest to be repaid at the end of five years.

The amount available to be

drawn from the line of credit at any point in time is based on a percentage of consolidated accounts receivable and inventory

reported by Proficient and its subsidiaries subject to certain conditions, including limitations on the ageing of invoices over 90

days, and maximum customer concentration.

November 8, 2024, Proficient entered into a credit facility with a commercial bank that includes up to $ 25 million in term debt and up

to another $ 20 million in a revolving line of credit with a maturity date of November 8, 2029 .

The term debt portion bears interest at

the Secured Overnight Financing Rate (“SOFR”), plus 2.50 %, with interest only payments for the first six months and the balance

at the end of six months with principal amortizing over the ensuing five years with 60 monthly payments.

Drawn balances from the revolving

line of credit bear interest at SOFR, plus 2.20 %, with all principal and interest to be repaid at the end of five years.

The amount available

to be drawn from the line of credit at any point in time is based on a percentage of consolidated accounts receivable and inventory reported

by Proficient and its subsidiaries subject to certain conditions, including limitations on the ageing of invoices over 90 days, and maximum

customer concentration.

The amount available to be drawn under the line of credit was $ 20 million on December 31, 2025.

At December 31, 2024, there was $ 7,000,000 outstanding on the revolving line of credit.

The term debt includes financial

covenants that include maximum leverage (debt / adjusted EBITDA) and debt service coverage ratio (total principal and interest /

adjusted EBITDA), both measured quarterly starting from March 2025.

Collateral for the facility includes Accounts Receivable

balances owed to the Company, and truck maintenance inventory.

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.

Balances outstanding on the term

debt are included in the Long-term debt, less current portion caption on the consolidated balance sheets.

PROFICIENT AUTO LOGISTICS, INC.

The term debt

includes financial covenants that include maximum leverage (debt / adjusted EBITDA) and debt service coverage ratio (total principal

and interest / adjusted EBITDA).

As of December 31, 2025, Proficient was in compliance with its debt covenants.

Collateral for the facility

includes Accounts Receivable balances owed to the Company and truck maintenance inventory.

Upon closing of the credit facility, 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

In April 2025, the Company drew an additional $ 9 million from the available term debt to fund the cash portion of the acquisition

At December 31, 2025, there was no outstanding borrowings on the revolving line of credit and the ending balance on the

term debt was $ 22,011,534 .

AUTO LOGISTICS, INC.

AND SUBSIDIARIES

Note 11 — Long-term debt

Long-term debt consists of the following:

Equipment notes payable to financial institutions, requiring monthly principal and interest payments totaling $ 43,359 .

The notes bear interest ranging from 4.99 % to 9.32 %, mature between November 2024 November 2026 and are secured by the Company’s transportation equipment.

Note payable to a financial institution requiring monthly principal and interest payment of $ 6,751 and a balloon payment at maturity, bears interest at 6 %, maturing December 2025 .

The note is secured by a mortgage on real property.

Equipment notes payable to a financial institution, requiring monthly principal and interest payments totaling $ 128,733 .

One note payable was used to refinance existing capital lease obligations in 2022.

The notes bear interest ranging from 3.95 % to 6.80 %, mature between June 2024 and December 2028 , and are secured by transportation equipment.

unamortized debt issuance costs ( 16,633 )

current maturities ( 1,599,699 )

Total long-term debt $ 5,035,478

— Long-term debt

debt consists of the following:

2025 December 31,

Equipment and vehicle notes payable to financial institutions, requiring monthly principal and interest payments totaling $ 1,658,163 .

The notes bear interest ranging from 1.9 % to 13.0 %, mature between January 2025 to December 2030 and are secured by the Company’s transportation equipment and vehicles.

The notes bear interest ranging from 3.47 % to 10.8 %, mature between January 2026 and November 2031 , and are secured by the Company’s transportation equipment and vehicles $ 52,595,562 $ 59,740,532

Term Loan payable to Pinnacle Bank, requiring principal payments of $ 415,255 per month commencing June 2025.

The notes bear interest at SOFR (Currently 3.87 %) + 2.5 % margin per month and mature April 2031 1 22,011,534 16,000,000

74,607,096 75,740,532

unamortized debt issuance costs ( 277,051 ) ( 350,718 )

1 unchanged sentence

Total long-term debt $ 54,026,968 $ 56,336,911

(1) The Term Loan and Line of Credit

includes financial covenants that include maximum leverage (debt / adjusted EBITDA) and debt service coverage ratio (total principal

and interest / adjusted EBITDA), both measured quarterly starting from March 2025.

PROFICIENT AUTO LOGISTICS, INC.

AND SUBSIDIARIES

Future maturities of long-term debt are as follows:

(1) The Term Loan and Line of Credit includes financial covenants comprised of maximum leverage (debt / adjusted EBITDA) and debt service coverage ratio (total principal and interest / adjusted EBITDA), both measured quarterly.

Future maturities

of long-term debt are as follows:

For the years ending December 31:

The Company capitalized debt issuance costs

of $ 386,825 during the period ended December 31, 2024 (Successor) and none in the period December 31, 2023 (Predecessor),

Company capitalized debt issuance costs of $0 and $ 386,825 during the period ended December 31, 2025 (Successor) and 2024 (Successor),

respectively.

Amortization expense related to the debt issuance costs totaled $ 92,559 , $ 4,795 , $ 13,115 , and $ 38,392 for period ended

December 31, 2024 (Successor), for the for the period from January 1, 2024 to May 12, 2024 (Predecessor), for the period ended

December 31, 2023 (Predecessor), and for the period ended December 31, 2022 (Predecessor), respectively, and was recorded within

interest expense on the consolidated statements of operations.

As of December 31, 2024 and 2023, the assets that are pledged as collateral

related to our debt obligations are $ 69,620,421 and $ 7,467,232 , respectively and were recorded within property and equipment, net on

the consolidated balance sheet.

Note 12 — Leases

Lessee — The Company leases real estate and

transportation-related equipment under operating and finance leases.

The real estate operating leases, which generally have fixed payments

with expiration dates ranging from one to three years and primarily include office buildings and trailers.

The operating leases and finance

leases for equipment generally have fixed payments with expiration dates ranging from four to six years and include transportation equipment,

such as trucks and trailers.

The Company’s leases can include an option to extend the lease, or to terminate the lease early, which

may include a termination penalty.

The Company includes these options to extend or terminate the lease in the lease term when the Company

is reasonably certain to exercise these options.

The Company has leases with related parties – see discussion at Note 17 Related

party transactions.

The Company has certain leases which have initial terms of twelve

months or less (“short-term leases”).

The Company elected to exclude these leases from recognition, and these leases have

not been included in the Company’s recognized ROU assets and operating lease liabilities.

The Company records rent expense related

to the short-term leases within general, selling, and other operating expense on the consolidated statements of operations.

The following table presents certain information related to lease

costs for finance and operating leases as of:

Amortization expense related to the debt issuance costs totaled $ 73,666 , $ 92,559 , $ 4,795 , and $ 13,115 , for the period ended

December 31, 2025 (Successor), December 31, 2024 (Successor), for the period from January 1, 2024 to May 12, 2024 (Predecessor), and

for the period ended December 31, 2023 (Predecessor), respectively, and was recorded within interest expense on the consolidated statements

of operations.

of December 31, 2025 and 2024, the assets that are pledged as collateral related to our debt obligations are $ 59,258,394 and $ 69,620,421 ,

respectively and were recorded within property and equipment, net on the consolidated balance sheet.

Company leases real estate and transportation-related equipment under operating and finance leases.

The real estate operating leases,

which generally have fixed payments with expiration dates ranging from one to three years and primarily include office buildings and

The operating leases and finance leases for equipment generally have fixed payments with expiration dates ranging from four

to six years and include transportation equipment, such as trucks and trailers.

The Company’s leases can include an option to extend

the lease, or to terminate the lease early, which may include a termination penalty.

The Company includes these options to extend or

terminate the lease in the lease term when the Company is reasonably certain to exercise these options.

The Company has leases with related

parties – see discussion at Note 17 Related party transactions.

Company has certain leases which have initial terms of twelve months or less (“short-term leases”).

The Company elected to

exclude these leases from recognition, and these leases have not been included in the Company’s recognized ROU assets and operating

lease liabilities.

The Company records rent expense related to the short-term leases within general, selling, and other operating expense

on the consolidated statements of operations.

AUTO LOGISTICS, INC.

AND SUBSIDIARIES

following table presents certain information related to lease costs for finance and operating leases as of:

Operating lease cost

Finance lease costs:

Amortization of finance lease assets

Amortization of finance

Interest on lease liabilities

1 unchanged sentence

Total lease costs

PROFICIENT AUTO LOGISTICS, INC.

AND SUBSIDIARIES

As of December 31, 2024 (Successor) and December 31, 2023 (Predecessor),

the weighted-average discount rate for operating leases was 6.88 % and 0.86 %, respectively.

The weighted-average remaining lease term as

of December 31, 2024 (Successor) and December 31, 2023 (Predecessor), was 7.2 years and less than a year respectively.

of December 31, 2025 (Successor), December 2024 (Successor) and December 31, 2023 (Predecessor), the weighted-average discount rate

for operating leases was 6.95 %, 6.88 % and 0.86 %, respectively.

The weighted-average remaining lease term as of December 31, 2025 (Successor),

December 31, 2024 (Successor) and December 31, 2023 (Predecessor), was 8.1 years, 7.2 years and less than a year respectively.

of December 31, 2025 (Successor), December 31, 2024 (Successor) and December 31, 2023 (Predecessor), the weighted-average discount

rate for finance leases was 12.08 %, 12.08 % and 9.26 %, respectively and the weighted-average remaining lease term was 0.5 years, 1.05

years and 1.07 years, respectively.

As of December

31, 2024 (Successor) and December 31, 2023 (Predecessor), the weighted-average discount rate for finance leases was 12.08 % and 9.26 %,

respectively and the weighted-average remaining lease term was 1.05 years and 1.07 years, respectively.

As of December 31, 2024, future maturities of the lease

liabilities were as follows:

31, 2025, future maturities of the lease liabilities were as follows:

For the year ending December 31:

5 unchanged sentences

( 2,249,651 )

Total long-term lease liabilities

As of December 31, 2024 and 2023, the right-of-use assets net book

value related to the Company’s finance lease obligations totaled $ 201,501 and $ 3,535,854 , respectively, and were recorded within

property and equipment, net on the consolidated balance sheet.

Lessor — The Company finances

various types of transportation-related equipment to independent third parties under lease contracts which are generally for a term of

one to eight years and contain an option for the lessee to return or purchase the equipment at a bargain purchase price.

classifies these leases as a sales-type lease.

The Company assesses a third party’s ability to pay based on the financial capacity

and intention to pay, considering all relevant facts and circumstances, including past experiences with that third party or similar third

For those leases classified as sales-type leases where collectability is not probable at lease commencement, the Company does

not derecognize the underlying asset, and the payments received for these leases are recorded as deposit liabilities.

Deposit liabilities

of $ 4,578,301 and $ 348,134 were reported in accrued liabilities on the consolidated balance sheet as of December 31, 2024 (Successor)

and December 31, 2023 (Predecessor), respectively.

The determination of collectability is an ongoing assessment, at the time that

collectability is determined probable, including in instances where a lease is terminated where collectability is determined probable,

the liability and assets will be derecognized with a corresponding earnings recognition.

PROFICIENT AUTO LOGISTICS, INC.

Total long-term lease

of December 31, 2025 and 2024, the right-of-use assets net book value related to the Company’s finance lease obligations totaled

$ 132,862 and $ 201,501 , respectively, and were recorded within property and equipment, net on the consolidated balance sheet.

Company leases various types of transportation-related equipment to independent third parties under lease contracts which are generally

for a term of one to eight years and contain an option for the lessee to return or purchase the equipment.

Depending on the lease

agreement the Company has recorded these as either sales-type leases or operating leases.

The Company assesses a third party’s

ability to pay based on the financial capacity and intention to pay, considering all relevant facts and circumstances, including past

experiences with that third party or similar third parties.

For those leases classified as sales-type leases where collectability is

not probable at lease commencement, the Company does not derecognize the underlying asset, and the payments received for these leases

are recorded as deposit liabilities.

Deposit liabilities of $ 8,497,950 and $ 4,578,301 were reported in accrued liabilities on the consolidated

balance sheet as of December 31, 2025 (Successor) and December 31, 2024, respectively.

The determination of collectability is an ongoing

assessment, at the time that collectability is determined probable, including in instances where a lease is terminated where collectability

is determined probable, the liability and assets will be derecognized with a corresponding earnings recognition.

AUTO LOGISTICS, INC.

AND SUBSIDIARIES

Lease receivables are carried at the aggregate

of lease payments receivable plus the estimated residual value of the leased assets and any initial direct costs incurred to originate

these leases, less unearned income, which is accreted to interest income over the lease term using the interest method.

Lease receivables

of $ 441,177 and $ 35,055 are reported as net investment in leases on the consolidated balance sheet as of December 31, 2024 (Successor)

and December 31, 2023 (Predecessor), respectively.

For the period ended December 31, 2024 (Successor),

for the period from January 1, 2024 to May 12, 2024 (Predecessor), for the period ended December 31, 2023 (Predecessor), and for the period

December 31, 2022 (Predecessor), the Company recorded sales-type lease revenue of $ 887,357 , $ 196,814 , $ 25,000 , and $ 60,094 , respectively,

within operating revenue on the consolidated statement of operations.

For the period ended December 31, 2024 (Successor),

for the period from January 1, 2024 to May 12, 2024 (Predecessor), for the period December 31, 2023 (Predecessor), and for the period

December 31, 2022 (Predecessor), the Company recorded interest income of $ 24,466 , $ 0 , $ 2,488 , and $ 3,488 , respectively, within interest

expense, net on the consolidated statements of operations.

As of December 31, 2024, future minimum lease payments

expected to be collected were as follows:

receivables are carried at the aggregate of lease payments receivable plus the estimated residual value of the leased assets and any

initial direct costs incurred to originate these leases, less unearned income, which is accreted to interest income over the lease term

using the interest method.

Lease receivables of $ 148,511 and $ 441,177 are reported as net investment in leases on the consolidated balance

sheet as of December 31, 2025 (Successor) and December 31, 2024 (Successor), respectively.

For the leases classified as sales-type leases, the Company recorded

the sales-type lease revenue of $ 2,575,356 , $ 887,357 , $ 196,814 , and $ 25,000 , respectively, within operating revenue on the consolidated

statement of operations for the period ended December 31, 2025 (Successor) and December 31, 2024 (Successor), for the period from January

1, 2024 to May 12, 2024 (Predecessor), and for the period ended December 31, 2023 (Predecessor), respectively.

For the leases classified as operating leases the Company recorded

the operating lease revenue of $ 950,728 , $ 100,060 , $ 0 , and $ 0 , respectively, within operating revenue on the consolidated statement of

operations for the period ended December 31, 2025 (Successor) and December 31, 2024 (Successor), for the period from January 1, 2024 to

May 12, 2024 (Predecessor), and for the period ended December 31, 2023 (Predecessor), respectively.

the period ended December 31, 2025 (Successor), December 31, 2024 (Successor), for the period from January 1, 2024 to May 12, 2024 (Predecessor),

and for the period December 31, 2023 (Predecessor), the Company recorded interest income of $ 31,866 , $ 24,466 , $ 0 , and $ 2,488 , respectively,

within interest expense, net on the consolidated statements of operations.

of December 31, 2025, future minimum lease payments expected to be collected were as follows:

For the year ending December 31:

Total undiscounted cash payments

present value factor

Total undiscounted cash

present value

Total net investment in lease

current portion

Total net investment in lease, less current portion

PROFICIENT AUTO LOGISTICS, INC.

AND SUBSIDIARIES

Note 13 — Stockholders’ Equity (Deficit)

and Preferred Stock

Series A preferred stock (Predecessor)

Proficient Transport was authorized to issue 10,000,000 shares of

Series A preferred stock, with a par value of $ 0.01 per share.

The holders of Series A preferred stock were entitled to vote as common

shareholders and had certain liquidation preferences to every other class or series of stock.

The Series A preferred stock was redeemable

at the option of the Series A preferred stockholders at the greater of the fair market value of the Series A preferred stock at the date

of redemption or a value determined using a discounted cash flow model, as defined.

The Series A preferred stock was converted to shares

of common stock of the Company in connection with the IPO and business combinations (Note 3) on May 13, 2024.

The Series A preferred stock earned a cumulative preferred return

equal to 8 % per annum on the sum of $ 1.00 per share invested plus accrued and unpaid Series A returns.

The Series A returns accrue on

a quarterly basis and will be fully cumulative, whether or not declared by Proficient Transport’s Board of Directors.

Since the holder of the Series A preferred stock has the option to

redeem their shares at any time, the Series A preferred stock is considered contingently redeemable, and accordingly, is classified as

mezzanine equity on the consolidated balance sheet as of December 31, 2023.

The Series A preferred stock is recorded at its redemption value of

$ 8,880,672 as of December 31, 2023.

The accumulated but undistributed preferred returns were $ 0 and $ 5,813,749 as of December 31, 2024

and 2023, respectively.

Activity related to the Series A preferred stock

is as follows:

Balance as of December 31, 2021

Accrued and unpaid dividend

Balance as of December 31, 2022

Accrued and unpaid dividend

Dividend Paid

( 5,000,000 )

Total net investment

in lease, less current portion

— Stockholders’ Equity (Deficit) and Preferred Stock

preferred stock (Predecessor)

Transport was authorized to issue 10,000,000 shares of Series A preferred stock, with a par value of $ 0.01 per share.

The holders of

Series A preferred stock were entitled to vote as common stockholders and had certain liquidation preferences to every other class or

series of stock.

The Series A preferred stock was redeemable at the option of the Series A preferred stockholders at the greater of the

fair market value of the Series A preferred stock at the date of redemption or a value determined using a discounted cash flow model,

The Series A preferred stock was converted to shares of common stock of the Company in connection with the IPO and business

combinations (Note 3) on May 13, 2024.

Series A preferred stock earned a cumulative preferred return equal to 8 % per annum on the sum of $ 1.00 per share invested plus accrued

and unpaid Series A returns.

The Series A returns accrue on a quarterly basis and will be fully cumulative, whether or not declared by

Proficient Transport’s Board of Directors.

Series A preferred stock was recorded at its redemption value of $ 8,880,672 as of December 31, 2023.

The accumulated but undistributed

preferred returns were $ 0 and $ 5,813,749 as of December 31, 2024 and 2023, respectively.

related to the Series A preferred stock is as follows:

Balance as of December 31, 2023

Accrued and unpaid dividend

and unpaid dividend

Balance as of March 31, 2024

Accrued and unpaid dividend

and unpaid dividend

Balance as of May 12, 2024

Stockholders’ Equity (Successor)

The Company is authorized to issue 50,000,000 shares of common stock,

which has a par value of $ 0.01 per share.

In May 2024, the Company completed its IPO of its common stock and

issued 14,333,333 shares of its common stock at a price of $ 15.00 per share for total gross proceeds of $ 215,000,000 and net proceeds

of $ 192,273,599 after underwriting fees and transaction costs.

The Company issued 6,888,128 shares of its common stock to the Founding

Companies in connection with the Combinations and 1,069,346 , common shares to the ATG Sellers.

Please see Note 3 for additional information.

In May 2024, the Company issued 404,177 shares of common stock for

vested RSU’s.

In connection with its IPO, the Company granted the underwriters of

its IPO a customary 30-day over-allotment option to buy up to an additional 2,149,999 shares of common stock from the Company at the

IPO price, less underwriting discounts and commissions.

In June 2024, the Company issued 1,435,000 shares of its common stock pursuant

to the partial exercise of the over-allotment option.

The shares were sold at the initial public offering price of $ 15.00 per share for

total gross proceeds of $ 21,500,000 and net proceeds of $ 20,018,250 after underwriting fees and transaction costs.

All of the shares

of common stock were sold by the Company.

PROFICIENT AUTO LOGISTICS, INC.

AUTO LOGISTICS, INC.

AND SUBSIDIARIES

Note 14 — Stock-based compensation

In May 2024, the Company adopted its 2024 Long-Term Incentive Plan

(“the 2024 Plan”).

The 2024 Plan provides for the grant of incentive stock options (“ISOs”) to employees, including

employees of any parent or subsidiary, and for the grant of nonstatutory stock options (“NSOs”), stock appreciation rights,

restricted stock awards, restricted stock unit awards, performance awards and other forms of stock awards to employees and directors,

including employees of our affiliates.

After taking into account restricted stock units granted in connection with the IPO in concurrent

business combinations (Note 3), the maximum number of shares of our common stock that may be issued under our 2024 Plan is 3,260,000

The awards under the 2024 Plan vest over periods ranging between one

(1) and five (5) years after the grant date.

The Company uses straight line vesting to record compensation expense.

All awards granted

are settled in common stock.

If an employee terminates employment with the Company prior to awards

vesting, the unvested awards are forfeited, and the historical compensation expense is reversed in the period of termination.

Shares subject to stock awards granted under the

2024 Plan that expire or terminate do not reduce the number of shares available for issuance under the 2024 Plan.

Additionally, shares

become available for future grants under the 2024 Plan if they were stock awards issued under the 2024 Plan, and we repurchase them or

they are forfeited.

This includes shares used to pay the exercise price of a stock award or to satisfy the tax withholding obligations

related to a stock award.

At December 31, 2024, there were 1,043,656 remaining shares available to be issued under the 2024 Plan.

PROFICIENT AUTO LOGISTICS,

Stockholders’

Equity (Successor)

Company is authorized to issue 50,000,000 shares of common stock, which has a par value of $ 0.01 per share.

May 2024, the Company completed its IPO of its common stock and issued 14,333,333 shares of its common stock at a price of $ 15.00 per

share for total gross proceeds of $ 215,000,000 and net proceeds of $ 192,273,599 after underwriting fees and transaction costs.

Company issued 6,888,128 shares of its common stock to the Founding Companies in connection with the Combinations, 1,069,346 , common

shares to the ATG Sellers and 395,322 common shares to the Brothers seller.

Please see Note 3 for additional information.

2025 and 2024, the Company issued 369,113 and 404,177 shares of common stock for vested RSU’s, respectively.

connection with its IPO, the Company granted the underwriters of its IPO a customary 30 -day over-allotment option to buy up to an additional

2,149,999 shares of common stock from the Company at the IPO price, less underwriting discounts and commissions.

In June 2024, the Company

issued 1,435,000 shares of its common stock pursuant to the partial exercise of the over-allotment option.

The shares were sold at the

initial public offering price of $ 15.00 per share for total gross proceeds of $ 21,500,000 and net proceeds of $ 20,018,250 after underwriting

fees and transaction costs.

All of the shares of common stock were sold by the Company.

— Stock-based compensation

May 2024, the Company adopted its 2024 Long-Term Incentive Plan (“the 2024 Plan”).

The 2024 Plan provides for the grant of

incentive stock options (“ISOs”) to employees, including employees of any parent or subsidiary, and for the grant of nonstatutory

stock options (“NSOs”), stock appreciation rights, restricted stock awards, restricted stock unit awards, performance awards

and other forms of stock awards to employees and directors, including employees of our affiliates.

The 2024 Plan allows for up to 3,260,000

shares of common stock to be issued.

awards under the 2024 Plan vest over periods ranging between one (1) and five (5) years after the grant date.

The Company uses straight

line vesting to record compensation expense.

All awards granted are settled in common stock.

an employee terminates employment with the Company prior to awards vesting, the unvested awards are forfeited and the historical compensation

expense is reversed in the period of termination, unless the employee terminates without cause then a pro-rata portion of the then-unvested

awards will vest immediately.

subject to stock awards granted under the 2024 Plan that expire or terminate do not reduce the number of shares available for issuance

under the 2024 Plan.

Additionally, shares become available for future grants under the 2024 Plan if they were stock awards issued under

the 2024 Plan and we repurchase them or they are forfeited.

This includes shares used to pay the exercise price of a stock award or to

satisfy the tax withholding obligations related to a stock award.

As of December 31, 2025, there were 971,777 remaining shares available

AUTO LOGISTICS, INC.

AND SUBSIDIARIES

Restricted Stock Units

Total compensation expense related to these restricted stock awards

was $ 8.8 million for the year ended December 31, 2024, respectively.

As of December 31, 2024, there was a total of $ 16,221,092 of unrecognized

compensation expense related to these restricted stock awards, which is expected to be recognized over the next four years .

value of restricted stock awards are valued at the closing price of the Company’s common stock on the date of grant.

A summary of all restricted stock/units outstanding as of December

31, 2024 and activity during the year ended December 31, 2024 is presented below:

Number of Shares Weighted Average Grant Date Fair Value Total

Grant Date Fair Value Weighted Average

Remaining Contractual Life

Stock Units (Successor)

compensation expense related to these restricted stock awards was $ 5.5 million and $ 8.8 million for the years ended December 31, 2025

and 2024, respectively.

As of December 31, 2025 and 2024, there was a total of $ 11,227,588 and $ 16,221,092 of unrecognized compensation

expense related to these restricted stock awards, which is expected to be recognized over the next 3.4 and 4.4 years, respectively.

fair value of restricted stock awards are valued at the closing price of the Company’s common stock on the date of grant.

summary of all restricted stock/units outstanding as of December 31, 2025 and activity during the year ended December 31, 2025 is presented

Shares Weighted

Fair Value Total

Fair Value Weighted

Outstanding, December 31, 2024 1,264,459 15.06 $ 19,041,263

3 unchanged sentences

Outstanding, December 31, 2025 967,225 $ 14.47 $ 13,994,016 2.7

Phantom Stock Plan (Predecessor) — In June 2018,

Proficient Transport granted a phantom stock award of 565,463 units (the “Units”), of which 188,488 Units vested

immediately, to a member of the Board of Directors of Proficient Transport.

The remaining 376,975 Units vested in connection

with the business combination (Note 3) on May 13, 2024.

Note 15 — Segment reporting

The Company’s business is organized into two operating segments,

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 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.

PROFICIENT AUTO LOGISTICS, INC.

Stock Plan (Predecessor) — In June 2018, Proficient Transport granted a phantom stock award of 565,463 units

(the “Units”), of which 188,488 Units vested immediately, to a member of the Board of Directors of Proficient Transport.

The remaining 376,975 Units vested in connection with the business combination (Note 3) on May 13, 2024.

— Segment reporting

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

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

Subhauler segment offers transportation services utilizing an asset-light model focusing on outsourcing transportation of loads to independent

contractors and third-party carriers.

AUTO LOGISTICS, INC.

AND SUBSIDIARIES

The following table summarizes information about our reportable segments:

ended December 31, 2024

Revenue, before fuel surcharge

The following

table summarizes information about our reportable segments:

Year ended December 31,

Revenue, before

fuel surcharge

$ 143,603,890

$ 253,023,569

Fuel surcharge and other reimbursements

$ 396,627,459

Fuel surcharge and other

reimbursements

Other Revenue

Lease Revenue

Segment Revenue

$ 154,598,735

$ 275,826,439

$ 430,425,174

Total consolidated

4 unchanged sentences

Truck expenses

Other segment items(1)

Goodwill & Intangible

segment items (1)

Segment Operating profit/(loss)

Reconciliation of segment operating profit to income before income taxes:

$ ( 12,435,313 )

$ ( 5,088,458 )

Reconciliation of segment

operating profit to income before income taxes:

Other profit/(loss) (2)

3 unchanged sentences

Acquisition Costs

Earn Out Contingency Gain

( 1,243,171 )

Earn Out Contingency Gain / Loss

Other Income, net

Income Before Income Taxes

Before Income Taxes

$ ( 43,241,214 )

Other Segment Disclosures:

Segment Disclosures:

Depreciation and amortization (3)

Intangible amortization (2)

Consolidated Depreciation and Amortization

(1) Other segment items for each reportable

segment include General, selling, and other operating expenses, Gain on sale of equipment and Insurance premiums and claims.

(2) Other profit/(loss) relates to items not included within the Company’s

measure of Segment Operating profit / (loss), these include corporate and unallocated expenses which were not included within the measures

of segment profitability regularly reviewed by the CODM.

These include $ 2,894,687 in Salaries, wages and benefits, $ 8,883,142 in Stock

Based Compensation, $ 5,388 in Depreciation and amortization, $ 5,709,360 in Intangible Amortization, $ 757,028 in Insurance Premiums and

Claims, and $ 3,439,195 in General Selling, and other Operating expenses.

(3) The amounts of depreciation and

amortization disclosed by reportable segment are included within the other segment items captions.

PROFICIENT AUTO LOGISTICS, INC.

Depreciation and Amortization

(1) Other segment items for each reportable segment include General, selling, and other operating expenses, Gain on sale of equipment and Insurance premiums and claims.

(2) Other profit/(loss) relates to items not included within the Company’s measure of Segment Operating profit / (loss), these include corporate and unallocated expenses which were not included within the measures of segment profitability regularly reviewed by the CODM.

These include $ 5,041,528 in Salaries, wages and benefits, $ 5,527,316 in Stock Based Compensation, $ 88,321 in Depreciation and amortization, $ 9,779,749 in Intangible Amortization, $ 4,226,175 in Insurance Premiums and Claims, and $ 5,583,335 in General Selling, and other Operating expenses.

(3) The amounts of depreciation and amortization disclosed by reportable segment are included within the other segment items captions.

AUTO LOGISTICS, INC.

AND SUBSIDIARIES

For the period from January 1 to May 12, 2024

Revenue, before fuel surcharge

December 31, 2024

Revenue, before

fuel surcharge

Fuel surcharge and other reimbursements

7 unchanged sentences

Truck expenses

Depreciation & Amortization

Other segment items (1)

Segment Operating profit/(loss)

$ ( 2,625,201 )

$ ( 18,394,764 )

$ ( 21,019,965 )

Reconciliation of segment operating profit to income before income taxes:

Reconciliation of segment operating profit to income

before income taxes:

Other profit/(loss) (2)

Interest Expense

Acquisition Costs

Earn Out Contingency Gain

Other Income, net

Income Before Income Taxes

$ ( 21,735,318 )

Other Segment Disclosures:

Depreciation and amortization (3)

Consolidated Depreciation and Amortization

(1) Other segment items for each reportable

segment include General, selling, and other operating expenses, Gain on sale of equipment and Insurance premiums and claims.

(2) The amounts of depreciation and

amortization disclosed by reportable segment are included within the other segment items captions.

PROFICIENT AUTO LOGISTICS,

Intangible amortization (2)

Consolidated Depreciation

and Amortization

(1) Other segment items for each reportable segment include General, selling, and other operating expenses, Gain on sale of equipment and Insurance premiums and claims.

These include $ 2,894,687 in Salaries, wages and benefits, $ 8,883,142 in Stock Based Compensation, $ 5,388 in Depreciation and amortization, $ 5,709,360 in Intangible Amortization, $ 757,028 in Insurance Premiums and Claims, and $ 3,439,195 in General Selling, and other Operating expenses.

(3) The amounts of depreciation and amortization disclosed by reportable segment are included within the other segment items captions.

AUTO LOGISTICS, INC.

AND SUBSIDIARIES

Year ended December 31, 2023

Company Drivers

Revenue, before fuel surcharge

$ 126,437,360

Fuel surcharge and other reimbursements

For the period from January

1 to May 12, 2024

Revenue, before

fuel surcharge

Fuel surcharge and other

reimbursements

Other Revenue

Lease Revenue

Segment Revenue

$ 135,755,993

Total consolidated

$ 135,755,993

Salaries, wages and benefits

2 unchanged sentences

Truck expenses

Other segment items (1)

Depreciation & Amortization

segment items (1)

Segment Operating profit/(loss)

Reconciliation of segment operating profit to income before income taxes:

$ ( 2,625,201 )

$ ( 18,394,764 )

$ ( 21,019,965 )

Reconciliation of segment

operating profit to income before income taxes:

Interest Expense

Income Before Income Taxes

Before Income Taxes

$ ( 21,735,318 )

Other Segment Disclosures:

Depreciation and amortization (3)

Consolidated Depreciation and Amortization

(1) Other segment items for each reportable

segment include General, selling, and other operating expenses, Gain on sale of equipment and Insurance premiums and claims.

(2) General, selling, and other operating

expenses not attributable to operating segments.

These amounts relate to corporate overhead and other activities not attributable to

a reporting segment.

(3) The amounts of depreciation and

amortization disclosed by reportable segment are included within the other segment items captions.

PROFICIENT AUTO LOGISTICS, INC.

and amortization (3)

Consolidated Depreciation

and Amortization

(1) Other segment items for each reportable segment include General, selling, and other operating expenses, Gain on sale of equipment and Insurance premiums and claims.

(2) The amounts of depreciation and amortization disclosed by reportable segment are included within the other segment items captions.

AUTO LOGISTICS, INC.

AND SUBSIDIARIES

December 31, 2022

Revenue, before fuel surcharge

Year ended December 31,

Revenue, before

fuel surcharge

$ 126,437,360

Fuel surcharge and other reimbursements

Fuel surcharge and other

reimbursements

Other Revenue

Lease Revenue

Segment Revenue

$ 135,755,993

5 unchanged sentences

Truck expenses

Other segment items (1)

segment items (1)

Segment Operating profit/(loss)

Reconciliation of segment operating profit to income before income taxes:

Interest Expense

( 1,163,508 )

Income Before Income Taxes

Reconciliation of segment

operating profit to income before income taxes:

Before Income Taxes

Other Segment Disclosures:

Depreciation and amortization (3)

Consolidated Depreciation and Amortization

and amortization (3)

Consolidated Depreciation

and Amortization

(1) Other segment items for each reportable segment include General, selling, and other operating expenses, Gain on sale of equipment and Insurance premiums and claims.

2 unchanged sentences

(3) The amounts of depreciation and amortization disclosed by reportable segment are included within the other segment items captions.

PROFICIENT AUTO LOGISTICS, INC.

AUTO LOGISTICS, INC.

AND SUBSIDIARIES

Assets and other balance sheet information are not disclosed by reportable

segment as the Company does not track assets by reportable segment and certain assets are not specific to any reportable segment.

Significant segment expenses listed above include Salaries, wages

and benefits, Fuel and fuel taxes, Purchased transportation, Truck Expenses, Depreciation and Intangible Amortization, and the CODM monitors

these expenses as part of assessing the efficiency and performance of the Company Drivers and Brokered Segments.

Note 16 — Loss per share

Basic loss per share is based upon the weighted average common shares

outstanding during each year.

Diluted loss per share is based on the basic weighted earnings per share with additional weighted

common shares for common stock equivalents.

During the period ended December 31, 2024, the Company had outstanding restricted shares

of common stock to certain of our employees and directors, under the Company’s restricted stock award plans.

The diluted shares

include the dilutive effect of restricted stock units based on the treasury stock method.

A reconciliation of the numerator (net loss) and denominator (weighted

average number of shares outstanding of the basic loss per share) for the period ended December 31, 2024 and is as follows:

and other balance sheet information are not disclosed by reportable segment as the Company does not track assets by reportable segment

and certain assets are not specific to any reportable segment.

segment expenses listed above include Salaries, wages and benefits, Fuel and fuel taxes, Purchased transportation, Truck Expenses, Depreciation

and Intangible Amortization, and the CODM monitors these expenses as part of assessing the efficiency and performance of the Company

Drivers and Subhaulers Segments.

16 — Loss per share

loss per share is based upon the weighted average common shares outstanding during each year.

Diluted loss per share is based on

the basic weighted earnings per share with additional weighted common shares for common stock equivalents.

During the period ended

December 31, 2024, the Company had outstanding restricted shares of common stock to certain of our employees and directors, under the

Company’s restricted stock award plans.

The diluted shares include the dilutive effect of restricted stock units based on the treasury

stock method.

reconciliation of the numerator (net loss) and denominator (weighted average number of shares outstanding of the basic loss per share)

for the period ended December 31, 2025 and 2024 and is as follows:

$ ( 36,019,566 )

Weighted-Average Number of Shares of Common Stock

$ ( 8,475,268 )

Weighted-Average Number of Shares of Common

Basic Loss per Share

The Company excluded 1,264,459 of unvested RSU’s from the computation

of weighted-average number of shares of common stock in computing the diluted loss per share for the periods presented because including

them would have had an anti-dilutive effect for the period ended December 31, 2024.

PROFICIENT AUTO LOGISTICS, INC.

Company excluded 967,225 and 1,264,459 of unvested RSU’s from the computation of weighted-average number of shares of common stock

in computing the diluted loss per share for the periods presented because including them would have had an anti-dilutive effect for the

period ended December 31, 2025 and December 31, 2024, respectively.

AUTO LOGISTICS, INC.

AND SUBSIDIARIES

Note 17 — Related Party Transactions

The Company has entered into related party transactions with entities

associated with, and under control of, the selling owners of Founding Companies and other businesses acquired by the Company (see Note

Management believes these transactions were conducted on terms equivalent to those prevailing in an arm’s-length transaction.

17 — Related Party Transactions

Company has entered into related party transactions with entities associated with, and under control of, the selling owners of Founding

Companies and other businesses acquired by the Company (see Note 3).

Management believes these transactions were conducted on terms equivalent

to those prevailing in an arm’s-length transaction.

See below for a description of transactions with related parties.

Leases from Related Parties

Certain officers, employees of the Company, and

selling owners of Founding companies are lessors of real property to the company for Office space.

Total Lease liability and rent paid

at December 31, 2024 (Successor) was $ 10,813,041 and $ 1,461,661 , respectively.

We had no related party leases for the Predecessor for

the period January 1, 2024 to May 12, 2024, the period ending December 31, 2023, or the period ending December 31, 2022:

The following table is a schedule of future payments at December 31,

from Related Parties

officers, employees of the Company, and selling owners of Founding companies are lessors of real property to the company for Office space.

Total Lease liability at December 31, 2025 (Successor) and December 31, 2024 (Successor) was $ 12,143,369 and $ 10,813,041 , respectively.

Total rent paid at December 31, 2025 (Successor) and December 31, 2024 (Successor) was $ 2,585,304 and $ 1,461,661 , respectively.

no related party leases for the Predecessor for the period January 1, 2024 to May 12, 2024, or the period ending December 31, 2023.

The following

table is a schedule of future payments at December 31, 2025:

2030 and thereafter

Total undiscounted cash payments

Other Transactions with Related Parties

At December 31, 2024, we had debt with a related party of $ 1,073,635

recorded on our consolidated balance sheet.

The debt bears an interest rate of 6 % and matures in April 2028 .

Our recurring monthly principal

and interest payments are $ 29,681 .

In agreement with our Deluxe purchase price agreement, we have agreed

to pay the sellers the collateral insurance deposit of $ 2,241,923 associated with their cargo captive once returned from the insurance

This amount is expected to be received in 2026 and is long term liabilities on the consolidated balance sheet.

Note 18 — Commitments and contingencies

The Company is involved in certain claims and pending litigation primarily

arising in the normal course of business.

The majority of these claims relate to workers compensation, auto collision and liability,

and physical and cargo damage.

The Company expenses legal fees as incurred and accrues for the uninsured portion of contingent losses

from these and other pending claims when it is both probable that a liability has been incurred and the amount of the loss can be reasonably

It is at least reasonably possible that the effect on the financial statements of significant estimates involving contingencies

will change within one year of the date of the financial statements due to one or more future confirming events.

If such changes occur,

they could be material to the financial statements.

The Company has disclosed all significant estimates and assumptions that could potentially

be affected by future confirming events.

PROFICIENT AUTO LOGISTICS, INC.

Total undiscounted cash

Transactions with Related Parties

December 31, 2025, we had debt with a related party of $ 773,720 recorded on our consolidated balance sheet.

The debt bears an interest

rate of 6 % and matures in April 2028 .

Our recurring monthly principal and interest payments are $ 29,681 .

accordance with our Deluxe purchase price agreement, we have agreed to pay the sellers the collateral insurance deposit of $ 2,241,923

associated with their cargo captive once returned from the insurance provider.

This amount is expected to be received in 2026 and is

shown under long term liabilities on the consolidated balance sheet.

— Commitments and contingencies

Company is involved in certain claims and pending litigation primarily arising in the normal course of business.

The majority of these

claims relate to workers compensation, auto collision and liability, and physical and cargo damage.

The Company expenses legal fees as

incurred and accrues for the uninsured portion of contingent losses from these and other pending claims when it is both probable that

a liability has been incurred and the amount of the loss can be reasonably estimated.

It is at least reasonably possible that the effect

on the financial statements of significant estimates involving contingencies will change within one year of the date of the financial

statements due to one or more future confirming events.

If such changes occur, they could be material to the financial statements.

Company has disclosed all significant estimates and assumptions that could potentially be affected by future confirming events.

AUTO LOGISTICS, INC.

AND SUBSIDIARIES

Independent Contractors Misclassification Class Action

In May 2020, a Brokered employee filed claim against Sierra Mountain

and an officer of the Company in Sacramento County Superior Court in California.

The putative class alleges that Sierra misclassified

owner/operators as independent contractors, not as employees, in violation of the California Labor Code applicable to employees (meal

and rest breaks, minimum wage, etc.).

Sierra denies liability and filed a counterclaim against the Plaintiff for costs and attorneys’

In August 2023, all parties reached an agreement

on material settlement terms and signed a Memorandum of Understanding pursuant to which the defined class would be paid approximately

$ 4,000,000 pending approval of a long-term settlement agreement currently in process.

On October 16, 2024, the court signed and entered

the final approval order for the class action for $ 3,947,725 , which the Company paid on November 20, 2024.

An indemnity escrow established

at the time of the Combinations included amounts to cover this liability.

Former Employee Class Action

In May 2024, a former employee filed claim against

Deluxe Auto Carriers, Inc., in Riverside County Superior Court in California.

The putative class alleges that Deluxe failed to pay for

meal and rest periods for time worked, off the clock work, overtime, business expenses, itemized wage statements, among other things.

The Company is still evaluating this contingency and has included its best estimate of potential liability within accrued liabilities

on the consolidated balance sheet as of December 31, 2024.

We believe we are entitled to indemnification from the sellers of Deluxe for

the potential liability relating to this contingency.

Delinquent Filings with Department of Labor

Deluxe Auto Carriers, Inc.

was delinquent in its filings with the

Department of Labor (DOL) with respect to its Retirement Plan Information Returns for plan years 2019 through 2022.

As of December

31, 2024, all delinquent filings had been made.

These delinquencies could result in penalties and interest from the DOL and the Internal

Revenue Service (IRS).

We have not received any notices from the DOL or the IRS regarding the delinquent filings, therefore, the Company

does not have a reasonable estimate for any additional potential penalties or interest.

We believe we are entitled to indemnification

from the sellers of Deluxe for the potential liability relating to this contingency.

Note 19 — Subsequent events

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.

business in place at Proficient is representative of the Company’s overall market share and is expected to ramp up over the remainder

Contractors Misclassification Class Action

August 2016, a truck driver who contracted with Tribeca Automotive, Inc.

filed a Complaint in Essex County Superior Court of New Jersey,

bringing claims on behalf of himself and those similarly situated against Tribeca and its owners.

An amended class complaint was filed

in April 2022.

The putative class alleges Tribeca misclassified contracted truck drivers as independent contractors, rather than “employees”

under applicable law.

As a result, the class seeks overtime and unlawful deductions in violation of New Jersey Wage and Hour Law

and New Jersey Wage Payment Law.

Tribeca denies liability and the parties are engaged in mediation.

We are entitled to the stated

indemnity in the Purchase Agreement from the sellers of Tribeca relating to this potential liability.

Employee Class Action

May 2024, a former employee filed a class action lawsuit against Deluxe Auto Carriers, Inc., in Riverside County Superior Court in California.

The lawsuit alleges class claims against Deluxe for unpaid minimum and overtime wages, non-compliant meal and rest periods, unreimbursed

business expenses, and inaccurate wage statements, among other claims.

A class settlement was reached for $ 400,000 , in which Deluxe continues

to deny liability.

The settlement was been approved by the court on February 18, 2026, payment is due in April 2026, and is included

within accrued liabilities on the consolidated balance sheet as of December 31, 2025.

We are entitled to indemnification from the sellers

of Deluxe for the liability relating to this contingency.

Filings with Department of Labor

Auto Carriers, Inc.

was delinquent in its filings with the Department of Labor (DOL) with respect to its Retirement Plan Information

Returns for plan years 2019 through 2022.

As of December 31, 2024, all delinquent filings had been made.

These delinquencies could

result in penalties and interest from the DOL and the Internal Revenue Service.

In September 2025, the Company received a final determination

letter from the DOL assessing penalties and interest totaling $ 6,650 .

This amount has been paid as of December 31, 2025.

indemnification from the sellers of Deluxe for the liability relating to this contingency.

19 — Subsequent events

Repurchase Program

March 2, 2026, the Company announced that its Board of Directors authorized a share repurchase program under which the Company may repurchase

up to $ 15 million of its common stock.

The repurchase program authorizes the Company to purchase its common stock from time to time in

the open market, in block transactions, in privately negotiated transactions, through accelerated stock repurchase programs, through

option or other forward transactions or otherwise, all in compliance with applicable laws, rules, regulations and other restrictions.

As of March 25, 2026, we have repurchased 82,877 shares of common stock at an average price of $ 6.25 .

November 2025, a second amended civil complaint was filed in federal court in South Carolina against the Company, its subsidiaries Tribeca

Automotive, Inc.

(“Tribeca”) and Proficient Services, Inc.

(f/k/a PAL Stock Acquiror, Inc.) and an individual employee of

Tribeca arising out of a vehicular accident involving one of Tribeca’s vehicles.

In March 2026, the Company agreed

in principle to settle the case to avoid the cost, risk and distraction of continued litigation.

While the non-financial terms

of the settlement have yet to be finalized, the Company recorded a legal settlement reserve of $ 3 million in the fourth quarter of 2025

for this matter.

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 9A. Controls and Procedures