Elite Express Holding Inc.

NOTE 1 — ORGANIZATION AND BUSINESS DESCRIPTION

Elite Express Holding Inc. (“ETS” or the “Company”) was incorporated on April 3, 2024, under the laws of the State of Delaware. The Company is a holding entity that was formed for the purpose of acquiring JAR Transportation Inc (“JAR”).

JAR was incorporated in the State of California on May 27, 2020 under Subchapter S of the Internal Revenue Code. The Company operated as an Independent Service Provider (“ISP”) for Federal Ground Package System, Inc. (“FXG”), providing last-mile package delivery services. As part of FedEx Corporation’s “One FedEx” consolidation, effective June 1, 2024, FXG merged into Federal Express Corporation (“FedEx”). JAR’s ISP contract with FXG remained in place until October 12, 2024, after which the subsequent agreement was signed with FedEx. Unless otherwise specified, references to “FedEx” in this document include FXG for periods before October 12, 2024, and Federal Express Corporation thereafter.

On October 25, 2024, the Company acquired all issued and outstanding shares of JAR for a total consideration of $1,367,169 in cash, pursuant to a stock purchase agreement dated September 16, 2024 along with Amendment No.2 to stock purchase agreement dated November 22, 2024 (the “JAR Acquisition”). As of October 25, 2024, JAR ceased to be an S-Corporation and became a wholly owned subsidiary of ETS, a C-Corporation. Refer to Note 6Acquisition, for additional information.

References to “Successor” or “Successor Company” relate to the financial position and results of operations of the Company after the JAR Acquisition. References to “Predecessor” or “Predecessor Company” refer to the financial position and results of operations of JAR.

The Company operates exclusively within the State of California. As an ISP, the Company is granted relative exclusivity in certain service areas by FedEx, which minimizes direct competition within those regions and enables the Company to focus on operational efficiency and service quality.

Details of the subsidiaries of the Company as of the reporting date are set out below:

Completion of the Initial Public Offering (“IPO”)

On August 22, 2025, the Company closed its IPO of 3,800,000 shares of Class A common stock at a public offering price of $4.00 per share, for gross proceeds of approximately $15.2 million, before deducting underwriting discounts and offering expenses. The net proceeds to the Company from the IPO were approximately $13.7 million. The shares of Class A common stock were approved to list on the Nasdaq Capital Market and commenced trading under the ticker symbol “ETS” on August 21, 2025. On August 20, 2025, the Company entered into an underwriting agreement with Dominari Securities LLC, as representative (the “Representative”) of the several underwriters. The Company also granted the Underwriters a 45-day option to purchase up to 570,000 additional shares of Class A Common Stock on the same terms and conditions for the purpose of covering any over-allotments in connection with the IPO.

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the accounting principles generally accepted in the U.S. (“U.S. GAAP”) for interim financial information and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). Accordingly, the unaudited condensed consolidated financial statements do

not include all of the information and footnotes required by U.S. GAAP. The unaudited condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto for the fiscal year ended November 30, 2024 and 2023 included in the Company’s Registration Statement on Form S-1. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary to make the unaudited condensed consolidated financial statements not misleading have been included. Operating results for the interim period ended August 31, 2025 are not necessarily indicative of the results that may be expected for the fiscal year ended November 30, 2025. The accompanying unaudited condensed consolidated financial statements include the financial statements of the Company and its wholly owned subsidiary. All intercompany balances and transactions are eliminated upon consolidation.

Uses of estimates

In preparing the consolidated financial statements in conformity with U.S. GAAP, management makes 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 revenue and expenses during the reporting period. These estimates are based on information as of the date of the consolidated financial statements. Significant estimates required to be made by management include, but are not limited to, the allowance for credit losses of accounts receivables, useful lives of property and equipment, the recoverability of long-lived assets, impairment of goodwill, revenue recognition, and the realization of deferred tax assets. Actual results could differ from those estimates.

Risks and Uncertainties

The operations of the Company are located in the U.S., with its business activities primarily focused on route delivery services as an ISP for FedEx. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by economic, regulatory, and operational environments in the U.S., as well as the general state of the U.S. economy. The Company’s results may be subject to the following risks and uncertainties:

Cash and cash equivalents

Cash includes demand deposits held by banks that can be added to or withdrawn without limitation. Cash equivalent represents certificates of deposits with banks or other financial institutions with maturity periods of 90 days (three months) or less. The Company maintains cash balances at financial institutions that management believes are high-credit, quality financial institutions, where our deposits at times exceed Federal Deposit Insurance Corporation (“FDIC”) limits.

Accounts receivable, net

The Company adopted Accounting Standards Update (“ASU”) 2016-13 Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (Accounting Standards Codification (“ASC”) 326). This standard replaced the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (“CECL”) methodology. CECL requires an estimate of credit losses for the remaining estimated life of the financial asset using historical experience, current conditions, and reasonable and supportable forecasts and generally applies to financial assets measured at amortized

cost, including loan receivables and held-to-maturity debt securities, and some off-balance sheet credit exposures such as unfunded commitments to extend credit. Financial assets measured at amortized cost will be presented at the net amount expected to be collected by using an allowance for credit losses. In addition, CECL made changes to the accounting for available-for-sale debt securities. One such change is to require credit losses to be presented as an allowance rather than as a write-down on available-for-sale debt securities if management does not intend to sell and does not believe that it is more likely than not they will be required to sell.

Accounts receivable represent amounts due to the Company upon the completion of performance obligations for last-mile delivery services. Revenue is recognized in accordance with the Company’s revenue recognition policy, as verified by the Weekly Independent Service Provider Charge Statement. Payments are typically received withintwo days of invoicing, and the Company does not extend credit or maintain significant outstanding receivables. The Company reviews the accounts receivable on a periodic basis and makes allowances when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including historical losses, the age of the receivable balance, the customer’s historical payment patterns, its current credit-worthiness and financial condition, and current market conditions and economic trends. Accounts are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. As of August 31, 2025 and November 30, 2024, no allowance for credit losses was recorded, as all outstanding balances were considered fully collectible.

Property and equipment, net

Property and equipment is stated at cost less accumulated depreciation and impairment charges, if any. Expenditures for maintenance and repairs, which do not materially extend the useful lives of the assets, are charged to expense as incurred. Depreciation is calculated primarily based on the straight-line method over the estimated useful lives of the assets:

Impairment of Long-lived Assets

The Company reviews long-lived assets to be held-and-used for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. If an impairment indicator is present, the Company evaluates recoverability by comparing the carrying amount of the asset group to the sum of the undiscounted expected future cash flow over the remaining useful life of the asset group. If the carrying amount exceeds the recoverable amount, an impairment loss is measured as the amount by which the carrying amount exceeds the fair value of the asset. The Company estimates fair value using the expected future cash flows discounted at a rate consistent with the risks associated with the recovery of the assets. Based on the above analysis, no impairment loss was recognized for the three and nine months ended August 31, 2025 (Successor).

Fair value of financial instruments

Fair value is defined as 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. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

Unless otherwise disclosed, the fair value of the Company’s financial instruments, including cash, accounts receivable, prepaid expenses and other current assets, accounts payable, due to a related party, loans payable, other payables and other current liabilities, approximate

the fair value of the respective assets and liabilities as of August 31, 2025 and November 30, 2024, based upon the short-term nature of the assets and liabilities.

Prepaid D&O Insurance and Premium Financing Payable

The Company may obtain certain insurance coverage through premium financing arrangements. Under these arrangements, the financing company pays the insurance premiums directly to the insurance carrier on behalf of the Company, and the Company is obligated to repay the financing company in periodic installments, including interest. (See Note 9).

At inception, the full amount of the insurance premium is recorded as prepaid D&O insurance on the unaudited condensed consolidated balance sheets, with a corresponding premium financing payable recorded within current liabilities. Prepaid D&O insurance is amortized to insurance expense on a straight-line basis over the coverage period of the related policies. Interest incurred on the financing arrangement is recognized separately as interest expense as incurred. As of August 31, 2025 and November 30, 2024, the outstanding balance of Prepaid D&O Insurance was $137,993 and $nil, respectively.

Business Combinations

Business combinations are accounted for using the acquisition method of accounting. Amounts paid for an acquisition are allocated to the assets acquired and liabilities assumed based on their fair values at the date of acquisition. The accounting for business combinations requires estimates and judgment in determining the fair value of assets acquired, liabilities assumed, and contingent consideration transferred, if any, regarding expectations of future cash flows of the acquired business, and the allocation of those cash flows to the identifiable intangible assets. The determination of fair value is based on management’s estimates and assumptions, as well as other information compiled by management, including valuations that utilize customary valuation procedures and techniques. If actual results differ from these estimates, the amounts recorded in the financial statements could result in a possible impairment of intangible assets and goodwill. Consideration transferred in a business acquisition is measured at the fair value as of the date of acquisition. Acquisition-related expenses are expensed when incurred.

Goodwill and Intangible Assets

The Company records goodwill as the excess of the consideration transferred over the fair value of net assets acquired in business combinations. Goodwill was recognized in connection with the acquisition of JAR on October 25, 2024 (See Note 6, “Acquisition”). Goodwill is not amortized but is tested for impairment annually at the reporting unit level or more frequently if events or changes in circumstances indicate that it may be impaired. The Company has an option to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. In the qualitative assessment, the Company considers primary factors such as industry and market considerations, overall financial performance of the reporting unit which is described in more detail below, and other specific information related to the operations. Based on the qualitative assessment, if it is more likely than not that the fair value of each reporting unit is less than the carrying amount, the quantitative impairment test is performed.

The Company tests goodwill and intangible assets that are not subject to amortization for impairment annually on November 30, and the Company’s goodwill impairment review involves the following steps: 1) qualitative assessment – evaluate qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. The factors the Company considers include, but are not limited to, macroeconomic conditions, industry and market considerations, cost factors, financial performance, and events specific to that reporting unit. If, or when, the Company determines it is more likely than not that the fair value of a reporting unit is less than the carrying amount, including goodwill, the Company would then change to the quantitative method; 2) quantitative method –the Company performs the quantitative fair value test by comparing the fair value of a reporting unit with its carrying amount and an impairment charge is measured as the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The Company hasone reporting unit. Impairment is measured as the amount by which the carrying amount of the reporting unit exceeds its fair value, not to exceed the carrying value of goodwill. No impairment of goodwill was recorded for the three and nine months ended August 31, 2025 (Successor).

The Company’s intangible asset consists of the customer relationship acquired as part of the JAR Acquisition. The asset is amortized on a straight-line basis over the estimated useful life, as outlined below:

Revenue recognition

ASC 606 establishes principles for reporting information about the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration it expects to receive in exchange for those goods or services as performance obligations are satisfied. ASC 606 applies a five-step model for revenue recognition, which requires the Company to: (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation.

The Company is engaged in providing last-mile delivery services as an ISP for FedEx. The Company derives revenue from both fixed service charges and activity-based charges under its ISP Agreement. Performance obligations include (i) weekly service coverage (fixed weekly service charges), (ii) delivery and pickup stops (stop charges and e-commerce stop charges), (iii) handling and delivering packages (package charges, including e-commerce and large package deliveries), and (iv) compliance with branding requirements (apparel and vehicle branding).

Revenue is recognized as follows:

The Company recognizes revenue on a gross basis under the ISP Agreement with FedEx. The Company is responsible for fulfilling the promised services, managing operational resources, and ensuring compliance with FedEx’s performance standards. All contracts with FedEx contain a single performance obligation for each revenue stream, with no separately identifiable promises.

Cost of revenue

Cost of revenue primarily includes direct expenses incurred to fulfill the Company’s obligations under the ISP Agreement with FedEx. These costs consist of (i) driver compensation and benefits; (ii) depreciation and amortization expenses; (iii) fuel expenses; (iv) vehicle maintenance and leasing expenses; (v) insurance premiums related to vehicle and liability coverage, and (vi) other operational expenses such as route management systems, uniforms, and branding compliance. All expenses are directly attributable to the Company’s delivery operations and are recognized in the same period as the corresponding revenue.

Concentration of Credit Risk

The Company is exposed to a concentration of credit risk due to its reliance on a single customer, FedEx, which accounted for 100% of the Company’s revenue for all periods presented in this report. Accounts receivable are unsecured and derived from revenue earned under the Company’s ISP Agreement with FedEx. The Company’s accounts receivable are typically collected withintwo days of invoicing, andno allowance for credit loss was recorded as of August 31, 2025, and November 30, 2024. The Company’s reliance on FedEx represents a significant concentration of revenue and accounts receivable. This concentration reflects the Company’s business model as an exclusive service provider to FedEx under its ISP Agreement.

Income Taxes

Income taxes are accounted for using the asset and liability method, as prescribed under ASC 740, Income Taxes (“ASC 740”). Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases.

Prior to its acquisition by the Company, JAR (the Predecessor), as an S-Corporation, was not subject to federal corporate income tax, and its taxable income, deductions, and credits were passed through to its stockholders. The Predecessor was subject to the California corporate franchise tax under RTC § 23802, which requires S-Corporations to pay the greater of a minimum tax of $800 or 1.5% of net taxable income derived from California sources. In accordance with ASC 740-10-15-4, deferred tax assets and liabilities were recognized for state-level temporary differences and net operating loss (“NOL”) carryforwards. Following the Acquisition, the Predecessor became a wholly owned subsidiary of the Company, a C-Corporation, and is subject to corporate income tax under the Internal Revenue Code and applicable state tax laws.

ASC 740 requires a tax position to meet a recognition threshold before it is recognized in the financial statements. The Company assesses uncertain tax positions based on management’s evaluation of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. This assessment includes consideration of any potential appeals or litigation processes based on the technical merits of the tax position. Because significant assumptions and judgments are involved in determining whether a tax benefit is more likely than not to be sustained, actual results may differ from estimates under different assumptions or conditions. The Company recognizes interest and penalties related to unrecognized tax benefits as part of the income tax provision in the consolidated statements of operations.

Loss per share

The Company computes loss per share (“EPS”) in accordance with ASC 260, “Earnings per Share” (“ASC 260”). ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS is measured as net loss divided by the weighted average common shares outstanding for the period. Diluted EPS presents the dilutive effect on a per share basis of potential common shares (e.g., convertible securities, options, and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. For the three and nine months ended August 31, 2025, there wereno dilutive shares outstanding.

Net losses for the Predecessor incurred during the three and nine months ended August 31, 2024, were entirely allocable to Predecessor members. Additionally, due to the impact of the JAR Acquisition, the Company’s capital structure for the Predecessor and Successor periods is not comparable. As a result, the presentation of loss per share for the periods prior to such transaction is not meaningful and only the loss per share for periods subsequent to the JAR Acquisition are presented herein.

Related parties and transactions

The Company identifies related parties, and accounts for and discloses related party transactions in accordance with ASC 850, “Related Party Disclosures” and other relevant ASC standards.

Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. Companies are also considered to be related if they are subject to common control or common significant influence.

Transactions between related parties commonly occurring in the normal course of business are considered to be related party transactions. Transactions between related parties are considered to be related party transactions even though they may not be given accounting recognition.

Segment reporting

The Company uses the management approach in determining reportable operating segments. The management approach considers the internal reporting used by the Company’s Chief Executive Officer for making operating decisions about the allocation of resources and

the assessment of performance. Management has determined that the Company operates as a single reportable segment, providing last-mile delivery services under its ISP Agreement with FedEx.

Recently Adopted Accounting Standards

In October 2021, the FASB issued Accounting Standards Update (“ASU”) 2021-08,* Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (Topic 805)*, which requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities (deferred revenue) from acquired contracts using the revenue recognition guidance in ASC 606,Revenue from Contracts with Customers. At the acquisition date, the acquirer applies the revenue model as if it had originated the acquired contracts. The Company adopted this guidance in connection with the JAR acquisition in October 2024, and accounted for the transaction using the acquisition method, consistent with the requirements of Topic 805.

Recent Accounting Pronouncements

The Company considers the applicability and impact of all ASUs. Management periodically reviews new accounting standards that are issued. Under the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), the Company meets the definition of an emerging growth company and has elected the extended transition period for complying with new or revised accounting standards, which delays the adoption of these accounting standards until they would apply to private companies.

In November 2024, the FASB issuedASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires the disaggregation of certain expense captions into specified categories in disclosures within the notes to the consolidated financial statements to provide enhanced transparency into the expense captions presented on the face of the statement of operations and comprehensive income. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, with early adoption permitted, and may be applied either prospectively or retrospectively to financial statements issued for reporting periods after the effective date of ASU 2024-03 or retrospectively to any or all prior periods presented in the financial statements. On January 6, 2025, FASB issued ASU 2025-01 that clarifies for non-calendar year-end entities the interim effective date of ASU 2024-03. Public business entities are required to adopt the guidance in Update 2024-03 in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. The Company is currently evaluating the impact that the adoption of ASU 2024-03 will have on its related disclosures.

In January 2025, the FASB issuedASU 2025-01 Income Statement-Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40). The FASB issued ASU 2024-03 on November 4, 2024-03 states that the amendments are effective for public business entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Following the issuance of ASU 2024-03, the FASB was asked to clarify the initial effective date for entities that do not have an annual reporting period that ends on December 31 (referred to as non-calendar year-end entities). Because of how the effective date guidance was written, a non-calendar year-end entity may have concluded that it would be required to initially adopt the disclosure requirements in ASU 2024-03 in an interim reporting period, rather than in annual reporting period. The FASB’s intent in the basis for conclusions of ASU 2024-03 is clear that all public business entities should initially adopt the disclosure requirements in the first annual reporting period beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027.

In March 2025, the FASB issuedASU 2025-02—Liabilities (405): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 122. The amendments in this Update are effective immediately and on a fully retrospective basis to annual periods beginning after December 15, 2024. The Company is currently evaluating the effect of adoption of this standard to its consolidated financial statements and disclosures.

The Company’s management does not believe that any other recently issued, but not yet effective, authoritative guidance, if currently adopted, would have a material impact on the Company’s financial statement presentation or disclosures.

NOTE 3 — LIQUIDITY

The Company has incurred net losses and negative cash flows since inception. For the nine months ended August 31, 2025, the Company reported a net loss of $0.5 million and used $0.6 million of cash in operating activities. As of August 31, 2025, the Company had an accumulated deficit of $0.8 million. On August 22, 2025, the Company completed its initial public offering (“IPO”) resulting in net proceeds of approximately $13.7 million, after deducting underwriting discounts and commissions and offering expenses payable by the Company. Management believes that the current cash and cash equivalents, including the net proceeds from the IPO, will be sufficient to fund its operating and capital expenditure requirements in excess of the next 12 months from the issuance date of these financial statements.

In February 2025, the Company obtainedtwo separate $2.0 million revolving credit facilities from major stockholders providing an additional liquidity buffer of $4.0 million (see Note 12(f)). Borrowings under these facilities are repayable at the end of the 24-month term but may be extended for an additional 12 month term. As of August 31, 2025, the Company hadnot drawn under these revolving credit facilities.

The Company’s future capital requirements will depend on many factors, including the rate of revenue growth, the timing and amount of cash received from customers, the expansion of sales and marketing activities, the timing and cost of new service efforts, and the success of its efforts to expand business with its current client and to acquire additional businesses. The Company may require additional equity or debt financing to fund its future operations. There can be no assurance that such financing will be available on acceptable terms, or at all. If the Company is unable to raise additional capital when needed, it could be forced to delay, reduce, or eliminate its research and development programs or future commercialization efforts, which could adversely affect its business prospects.

NOTE 4 — ACCOUNTS RECEIVABLE, NET

Accounts receivable consists of the following:

The August 31, 2025, and November 30, 2024, accounts receivable balances have been fully collected as of the issuance date of this report.

NOTE 5 — PROPERTY AND EQUIPMENT, NET

Property and equipment, net, consists of the following:

As of October 25, 2024, upon closing of the JAR Acquisition, the Successor revalued its vehicles to a fair value of $295,912. No additional asset transfers occurred post-acquisition, and the Predecessor’s vehicles, with a historical cost of $1,137,130, were fully retained.

Depreciation expense was $50,532 and $60,618, respectively, for the three months ended August 31, 2025 (Successor) and August 31, 2024 (Predecessor), and $147,268 and $180,445, respectively, for the nine months ended August 31, 2025 (Successor) and August 31, 2024 (Predecessor).

NOTE 6 — ACQUISITION

On September 16, 2024, the Company entered into a Stock Purchase Agreement (“Purchase Agreement”) to acquire 100% of JAR with the total gross price of $1,475,000 as specified in the original Purchase Agreement. In accordance with the terms of the Purchase agreement, the Company made an initial payment of $44,250 (“First Payment”) to the Escrow Account within three days after the Purchase Agreement was signed. The Company subsequently made payment of $398,250 (“Second Payment”) on October 22, 2024. Following these payments, the transaction terms were revised through two amendments. Following revisions in the first amendment, the final consideration was reduced to $1,367,169. Pursuant to the second amendment, the stock transfer date was set as October 25, 2024, which is considered the acquisition date for accounting purposes under ASC 805,Business Combinations (“ASC 805”). The Company made two additional payments totaling $899,669 (“Third and Fourth Payments”) after the acquisition date of October 25, 2024 and prior to the transaction’s official closing date of December 3, 2024. The remaining $25,000, which is contractually due within thirty days of the first anniversary of the Fourth Payment, has been accrued and included in the total purchase consideration recognized in connection with the acquisition.

The Company and JAR were unrelated parties. There was no common control between the Company and JAR prior to JAR’s acquisition by the Company. Immediately after the acquisition date on October 25, 2024, the Company took control of JAR in accordance with the Purchase Agreement. No members of JAR remain in governance or management positions in the Company post-acquisition. Based on the above factors, the Company assessed the appropriate accounting treatment under ASC 805 and concluded that the Company is the accounting acquirer. JAR became a 100% owned subsidiary of the Company after the acquisition date of October 25, 2024.

As part of the transaction structure, certain assets and liabilities, including cash, accounts receivable, and outstanding debt, were excluded from the acquisition and remained the responsibility of the sellers of JAR. The Acquisition was accounted for as a business combination using the acquisition method of accounting. In accordance with ASC 805, the purchase price was allocated to the acquired assets and assumed liabilities based on their estimated fair values at the acquisition date.

The Company completed the initial purchase price allocation for the acquisition of JAR as of October 25, 2024. Assets (vehicles) acquired were recorded at estimated fair values as of the acquisition date based on management’s estimates, available information, and supportable assumptions that management considered reasonable. No liabilities were assumed per the Purchase Agreement.

As part of the purchase price allocation, a deferred tax liability (“DTL”) was recognized for the basis difference in the acquired identifiable intangible asset—customer relationships. In accordance with ASC 805-740-25-3, no DTL was recognized for the reported amount of goodwill that is not deductible for tax purposes. The recognition of the DTL related to customer relationships resulted in a corresponding increase in goodwill, as required under ASC 805. Although the Company recognized a portion of DTL and goodwill based on its initial assessment, the valuation process is ongoing, and the final purchase price allocation, including the measurement of goodwill and deferred taxes, may be subject to further adjustments. The Company will continue to evaluate and refine the allocation based on additional information obtained during the measurement period in accordance with ASC 805.

The allocation of the purchase price to the major classes of assets as of October 25, 2024 is as follows:

The fair value of customer relationship was determined using assumptions that are representative of those typically used by a market participant in estimating fair value.

The fair value of the identified intangible asset, i.e. customer relationship, and its estimated average useful life as of August 31, 2025 and November 30, 2024 are as follows:

Amortization expense of the customer relationship was $13,800 and $41,400 for the three and nine months ended August 31, 2025 (Successor), respectively.

NOTE 7 — Other Payables and other current liabilities

A summary of the Company’s other payables and other liabilities:

NOTE 8 — Insurance Premium Financing Payable

A summary of the Company’s insurance premium financing payable is as follows:

On August 26, 2026, the Company entered into a premium finance agreement with First Insurance Funding, whereby the Company was loaned a total principal amount of $142,197 for the purpose of financing the Company’s D&O insurance policy. This loan bears an interest rate of 7.35% per annum, and is repayable in 9 monthly installments of principal and interest through May 2026. As of August 31, 2025, a principal amount of $106,236 remains outstanding. Related prepaid D&O insurance at August 31, 2025 of $137,993 is included in prepaid D&O insurance (See Note 2).

During the three and nine months ended August 31, 2025, the Company did not incur any material interest expense associated with its insurance premium financing payable.

NOTE 9 — INCOME TAXES

The Company and its operating subsidiary in the United States are subject to the tax law of the United States. The Company elected to file income taxes as a corporation for the tax year ended November 30, 2024.

*(i)*The components of the income tax provision were as follows:

*(ii)*Reconciliations of the statutory income tax rate to the effective income tax rate were as follows:

*(iii)*Deferred tax liabilities were composed of the following:

Valuation Allowance

The Company recognizes income taxes using the asset and liability method. Management establishes deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of assets and liabilities, using the tax rates expected to be in effect when the temporary differences reverse. Deferred tax assets are also recognized for tax attributes such as net operating loss carry forwards. Realization of the Company’s gross deferred tax asset depends on its ability to generate sufficient taxable income of the appropriate character within the carryforward periods of the jurisdictions in which the net operating and capital losses, deductible temporary differences and credits are generated. In assessing its ability to realize deferred tax assets, the Company considers all available evidence and records valuation allowances to reduce deferred tax assets to the amounts that management concludes are more-likely-than-not to be realized. As of August 31, 2025 and November 30, 2024, no valuation allowance was required as the Company was in a net deferred tax liability position.

Uncertain Tax Position

The Company recognizes income tax benefits associated with uncertain tax positions, when, in management’s judgment, it is more likely than not that the position will be sustained upon examination by a taxing authority. For a tax position that meets the more likely than not recognition threshold, management initially and subsequently measures the tax benefit as the largest amount judged to have a greater than 50% likelihood of being realized upon ultimate settlement with the taxing authority. The Company has concluded that there areno uncertain tax positions requiring recognition in its financial statements as of August 31, 2025.

State Income Tax

For the three months ended August 31, 2025 (Successor) and August 31, 2024 (Predecessor), the Company recorded a tax provision of $43,346 and $0, respectively. For the nine months ended August 31, 2025 (Successor) and August 31, 2024 (Predecessor), the Company recorded a tax (benefit) provision of $ (62,552) and $800, respectively.

NOTE 10 — CONCENTRATIONS

Credit risk

As of August 31, 2025 and November 30, 2024, $6.6 million and $0.2 million of the Company’s cash was on deposit at financial institutions in the U.S. and insured by the Federal Deposit Insurance Corporation (FDIC) subject to applicable insurance limits. The Company has not experienced any losses in such accounts. As of August 31, 2025 and November 30, 2024, $7 million and $0, respectively, of the Company’s cash was deposited in U.S. dollar accounts in financial institutions in Hong Kong. Per Hong Kong regulations, bank deposits may be insured by up to HKD 800,000 (approximately $102,560) for each financial institution. The Company’s total uninsured cash held in Hong Kong banks amounted to approximately $6.9 million and $0 as of August 31, 2025 and November 30, 2024, respectively. The Company has not experienced any losses in such accounts. Accounts receivable are unsecured and derived entirely from revenue earned under the Company’s ISP Agreement with FedEx.

Concentrations

The Company’s sole customer, accounted for 100% of the Company’s revenue for the three and nine months ended August 31, 2025 (Successor) and 2024 (Predecessor). Accordingly, all of the accounts receivable are derived from FedEx. The Company’s revenue and accounts receivable concentration is consistent with its business model as an exclusive service provider under the ISP Agreement.

NOTE 11 — STOCKHOLDERS’ EQUITY

Common Stock

The Company was incorporated on April 3, 2024, under the laws of the State of Delaware. Under the Company’s amended and restated articles of incorporation on December 19, 2024, the total authorized number of shares of common stock is 1,000,000,000 with a par value of $0.000001, which consists of 900,000,000 shares of Class A common stock and 100,000,000 shares of Class B common stock. The Company also has the authority to issue 5,000,000 shares of preferred stock as deemed necessary with a par value per share equal to the par value per share of the Class A common stock. Holders of Class A common stock and Class B common stock have the same rights except for voting and conversion rights. With respect to matters requiring the votes of stockholders, each share of Class A common stock is entitled toone vote, and each share of Class B common stock is entitled to 15 votes. Class B common stock is convertible into Class A common stock at any time after issuance at the option of the holder on aone-to-one basis. Class A common stock is not convertible into shares of any other class. The numbers of outstanding common stock have been retroactively adjusted to reflect the 1-for-6 reverse stock split effected on December 23, 2024, as if it had occurred at the beginning of all periods presented. All share and per-share amounts in the financial statements have also been adjusted accordingly.

On August 27, 2024, the Company entered intotwo separate subscription agreements withtwo investors, Eternal Blessing Holdings Limited and Centurion Tech Holdings Limited (the “Investors”), whereby the Company agreed to sell, and each Investor agreed to purchase,500,000 shares of Class A common stock at a purchase price of $0.90 per share. The gross proceeds from each subscription agreement were $450,000, respectively, resulting in total gross proceeds of $900,000. As of November 30, 2024, all proceeds were fully received by the Company.

During the period from October 26, 2024 to November 30, 2024, the Company received a capital contribution of $589,000 fromtwo shareholders, consisting of $300,000 from one shareholder, Grand Bright International Holdings Limited, and $289,000 from Mr. Huan Liu through his third-party business contacts on his behalf.

During the three and nine months periods ended August 31, 2025, the Company received capital contributions of $150,000 and $630,000, respectively, from three shareholders, which included $430,000 from Grand Bright International Holdings Ltd., $50,000 from Mr. Huan Liu though his third-party business contacts on his behalf and $150,000 from Apex Management Limited.

On August 22, 2025, the Company closed its IPO of 3,800,000 shares of Class A common stock at a public offering price of $4.00 per share, for gross proceeds of approximately $15.2 million, before deducting underwriting discounts and offering expenses. The net proceeds to the Company from the IPO were approximately $13.7 million. The shares of Class A common stock were approved to list on the Nasdaq Capital Market and commenced trading under the ticker symbol “ETS” on August 21, 2025. On August 20, 2025, the Company entered into an underwriting agreement with Dominari Securities LLC, as representative (the “Representative”) of the several underwriters. The Company also granted the Underwriters a 45-day option to purchase up to 570,000 additional shares of Class A Common Stock on the same terms and conditions for the purpose of covering any over-allotments in connection with the IPO.

Reverse Stock Split

On December 19, 2024, the Company’s board of directors approved and adopted the Amended and Restated Certificate of Incorporation, pursuant to Sections 242 and 245 of the Delaware General Corporation Law (DGCL), which authorized a reverse stock split at a ratio ofone share of new common stock for each six shares of old common stock. The Company subsequently filed the Amended and Restated Certificate of Incorporation with the State of Delaware, and the Reverse Stock Split became effective at 12:00 AM, Eastern Time, on December 23, 2024. All share information included in the financial statements has been retrospectively adjusted to reflect the Reverse Stock Split as if it had occurred at the beginning of the earliest period presented. Immediately after the reverse stock split, there were 8,750,005 shares of Class A common stock and 4,166,667 shares of Class B common stock issued and outstanding.

As of August 31, 2025 and November 30, 2024, there were 12,550,005 and 8,750,005 shares of Class A common stock, respectively, and 4,166,667 shares of Class B common stock issued and outstanding as of August 31, 2025 and November 30, 2024.

NOTE 12 — COMMITMENTS AND CONTINGENCIES

From time to time, the Company may be a party to various legal actions arising in the ordinary course of business. The Company accrues expenses associated with these matters when they become probable and the amount can be reasonably estimated. Legal expenses incurred in connection with loss contingencies are expensed as incurred.

On April 26, 2021, a class action lawsuit was filed against JAR(Predecessor) and Raymond Paul June in the Superior Court of California, County of Los Angeles, by a former employee, Joaquin Rojas. The lawsuit alleged various wage and hour violations, including failure to pay wages, overtime, and meal and rest break violations, as well as claims under the California Private Attorneys General Act (“PAGA”).

On November 6, 2023, the Superior Court of California granted final approval of a settlement agreement between the parties, under which JAR agreed to pay a Gross Settlement Amount of $165,000. The settlement covered payments to class members, attorney fees, and a $10,000 PAGA penalty. Following court approval, JAR fully funded the settlement account and, as of December 11, 2023, settlement payments were distributed to the eligible class members, attorneys, and other recipients.

Settlement funds unclaimed after June 8, 2024 will be remitted to the Controller of the State of California under the Unclaimed Property Law (California Civil Code § 1500). This completes the settlement process.

In February 2025, Pablo Aguero (a former employee of JAR, the subsidiary, the “Applicant”) filed a workers’ compensation claim with the California Workers’ Compensation Appeals Board (WCAB Case No: ADJ20520242). This claim relates to his employment in or around May 2023, prior to the acquisition of JAR. While the WCAB filing does not specify a monetary demand, the Applicant previously issued a pre-litigation demand letter asserting claims totaling approximately $46,600. Pursuant to the terms of the stock purchase agreement for the acquisition of JAR, liabilities arising from pre-closing employment matters remain the responsibility of the sellers. Accordingly, the claim is currently being handled by the sellers and legal counsel designated by JAR’s employment practices liability insurance carrier. The Company has requested their assistance in responding to subpoenas issued in connection with the WCAB proceeding, which seek personnel and payroll records related to the Applicant, and they are currently in the process of providing the requested documents. Based on the information available to date, the Company does not anticipate that the outcome of this proceeding will have a material impact on the Company’s business or financial condition.

In June 2025, Rafael Perez Linarez (a former employee of JAR, our subsidiary) filed a workers’ compensation claim with the California Workers’ Compensation Appeals Board (WCAB Case No: unassigned). This claim relates to his employment from around July 2020 to June 2022, prior to our acquisition of JAR. Pursuant to the terms of the stock purchase agreement for the acquisition of JAR, liabilities arising from pre-closing employment matters remain the responsibility of the sellers.

In June 2025, Elma Asusena Oliveros filed a workers’ compensation claim with the California Workers’ Compensation Appeals Board (WCAB Case No: ADJ21112337). This claim relates to her employment from around May 2025. As of the date of this report, this matter has been referred to our workers’ compensation insurance carrier and no cost estimates are currently available.

In July 2025, Joseph McNeal (a former employee of JAR, our subsidiary) filed a workers’ compensation claim with the California Workers’ Compensation Appeals Board (WCAB Case No: ADJ21061503). This claim relates to his employment from October 2024 to April 2025. The Company had responded related subpoenas. No cost estimates are currently available

As of August 31, 2025, the Company did not have any other material legal claims or litigation that, individually or in aggregate, could have a material adverse impact on the Company’s unaudited condensed consolidated financial position, results of operations, and cash flows.

NOTE 13 — RELATED PARTY TRANSACTIONS

a. Nature of relationship with related parties

b. Due to a related party

Amount due to a related party represents funds borrowed from the Company’s Chairman of the Board of Directors, Mr. Huan Liu, to support its operating working capital and investing activities, specifically for the acquisition of JAR. These payables are unsecured, non-interest bearing, and due on demand. During the period from October 26, 2024 through November 30, 2024 (Successor), the Company borrowed an aggregate of $100,088 from Mr. Huan Liu, either directly or through his third-party business contacts on his behalf. The funds were primarily used for investing activities related to the acquisition of JAR. The Company also made repayments to Mr. Huan Liu in the amount of $71,050. Subsequently, on December 2, 2024, the Company received additional funding of $120,000 from Mr. Huan Liu again through his third-party business contacts on his behalf, which was fully repaid. During the nine months ended August 31, 2025, the Company made an additional $5,000 repayment to Mr. Huan Liu. As a result of these transactions, the balance due to Mr. Huan Liu was $24,038 as of August 31, 2025. On September 4, 2025, the Company repaid $24,038 to Mr. Huan Liu, in full settlement of the outstanding borrowing. As a result, the balance of such borrowing was reduced to $0 as of the date of this report.

On March 31, 2025, the Company issued a promissory note to Mr. Huan Liu, pursuant to which the Company may periodically borrow up to $120,000 from Mr. Huan Liu to fund its working capital needs. Borrowings made pursuant to this note are unsecured, non-interest bearing and repayable upon demand of Mr. Huan Liu.

c. Capital contribution from shareholders

During the nine months ended August 31, 2025, the Company received a capital contribution of $630,000 from three shareholders, which included $430,000 from one shareholder, Grand Bright International Holding Ltd., $50,000 from Mr. Huan Liu through his third-party business contacts on his behalf and $150,000 from Apex Management Limited.

d. Stockholder Loan for Litigation Settlement

On November 20, 2023, JAR entered into a secured loan agreement with a stockholder for a principal amount of $166,847, at an annual interest rate of 7.0%. The loan was secured by JAR’s property and equipment and accounts receivable, and required 60 monthly payments of $3,303.77, beginning December 20, 2023. The loan was used to fund the settlement of a class-action lawsuit (see Note 11).

During the nine months ended August 31, 2024 (Predecessor), JAR made loan repayments of $29,734, including principal and interest of $21,464 and $8,270, respectively.

On November 22, 2024, the Company and JAR entered into a second amended stock purchase agreement, establishing October 25, 2024, as the effective acquisition date. In accordance with the agreement, the remaining balance of the stockholder loan was fully repaid prior to closing of the transaction in November 2024, andno related party balances remained outstanding as of November 30, 2024.

e. Business Loan Guarantees

Between August 2020 and January 2022 (Predecessor period), JAR entered into multiple secured term loan agreements with three financial institutions to finance vehicle acquisitions. The aggregate principal amount of these borrowings was approximately $845,588. Mr. Raymond June, former president and stockholder of JAR, personally provided unlimited guarantees in connection with most of the above loans at the time of origination, with an aggregate principle amount of $544,394. The guaranteed amounts included the full principal balance as well as any accrued interest associated with the respective borrowings.

In connection with the acquisition of JAR by the Company on October 25, 2024, the outstanding balances of these loans were fully repaid at carrying value by JAR’s former stockholders, and the personal guarantees provided by Mr. June were released prior to the closing of the transaction.

f. Revolving credit

In February 2025, the Company obtainedtwo separate $2.0 million revolving credit facilities from the major stockholders, Centurion Tech Holdings Limited and Eternal Blessing Holdings Limited, providing a total liquidity buffer of $4.0 million. These facilities carry a 12% annual interest rate, require quarterly interest payments, full principal repayment due at the end of the 24-month term and offer a flexible extension option for an additional 12 months. As of August 31, 2025, the Company hadnot drawn under these revolving credit facilities.

NOTE 14 — SUBSEQUENT EVENTS

On September 4, 2025, the Company paid $80,000 in cash to the Chairman, Mr. Huan Liu. Of this amount, approximately $18,406 represented reimbursement of travel expenses, approximately $24,038 was applied to offset borrowings previously received from Mr. Liu, and the remaining $37,556 was recorded as an advance payment for future Chairman travel expenses.

The Company has performed an evaluation of subsequent events occurring since September 1, 2025 and has determined that, except for the matters mentioned above, no adjustment to or disclosure in the unaudited condensed consolidated financial statements is required.