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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended May 31, 2026

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-42811

Elite Express Holding Inc.

(Exact name of registrant as specified in its charter)


Delaware		99-2516128
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

23046 Avenida De La Carlota, Suite 600

Laguna Hills, CA 92653

(Address of principal executive offices) (Zip Code)

(949) 758-0650

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each Class		Trading Symbol(s)		Name of each exchange on which registered
Class A Common Stock		ETS		The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of July 14, 2026, there were 48,716,672 shares of common stock, consisting of (i) 44,550,005 shares of Class A common stock, par value $0.000001 per share, and (ii) 4,166,667 shares of Class B common stock, par value $0.000001 per share, outstanding.

Table of Contents

Elite Express Holding Inc.

Form 10-Q

For the Quarterly Period Ended May 31, 2026

Contents

		Page
Part I	Financial Information	1

Item 1	Financial Statements (Unaudited)	1

	Condensed Consolidated Balance Sheets (Unaudited)	1

	Condensed Consolidated Statements of Operations (Unaudited)	2

	Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)	3

	Condensed Consolidated Statements of Cash Flows (Unaudited)	4

	Notes to Unaudited Condensed Consolidated Financial Statements	5

Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21

Item 3	Quantitative and Qualitative Disclosures about Market Risk	31

Item 4	Controls and Procedures	31

Part II	Other Information	33

Item 1	Legal Proceedings	33

Item 1A	Risk Factors	33

Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	34

Item 3	Defaults Upon Senior Securities	35

Item 4	Mine Safety Disclosures	35

Item 5	Other Information	35

Item 6	Exhibits	35

Signatures		38

Table of Contents

Elite Express Holding Inc.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

ELITE EXPRESS HOLDING INC. & ITS SUBSIDIARY

(Unaudited) CONDENSED CONSOLIDATED BALANCE SHEETS


		As of May 31,			As of November 30,
		2026			2025
		(UNAUDITED)			(AUDITED)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	5,235,991		$	1,308,529
Accounts receivable			58,676			72,582
Loans receivable			9,649,811			9,999,811
Prepaid D&O insurance			31,345			102,443
Prepaid expenses and other current assets			2,548,873			898,191
TOTAL CURRENT ASSETS			17,524,696			12,381,556
NON-CURRENT ASSETS:
Plant and equipment			141,414			167,008
Intangible assets			460,000			487,600
Goodwill			668,858			668,858
TOTAL ASSETS		$	18,794,968		$	13,705,022

LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable		$	26,347		$	20,918
Insurance premium financing payable			—			71,470
Tax payable			800			2,400
Other payables and other current liabilities			219,000			418,367
TOTAL CURRENT LIABILITIES			246,147			513,155
NONCURRENT LIABILITY:

TOTAL LIABILITIES			246,147			513,155

COMMITMENTS AND CONTINGENCIES			—			—

STOCKHOLDERS’ EQUITY
Common stock, $0.000001 par value, 1,000,000,000 shares authorized; 16,716,672 shares issued and outstanding as of May 31, 2026, and November 30, 2025, including: *
Class A common stock, $0.000001 par value - 900,000,000 shares authorized; 12,550,005 shares issued and outstanding as of May 31, 2026, and November 30, 2025			13			13
Class B common stock, $0.000001 par value - 100,000,000 shares authorized, 4,166,667 shares issued and outstanding			4			4
Additional paid-in capital			23,686,846			15,686,846
Accumulated deficit			(5,138,042)			(2,494,996)
TOTAL STOCKHOLDERS’ EQUITY			18,548,821			13,191,867

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	18,794,968		$	13,705,022

*Retrospectively adjusted for the reverse split of the Company’s common stock at a ratio of 1-for-6, which took effect on December 23, 2024 (the “Reverse Stock Split”). See also Note 12.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

ELITE EXPRESS HOLDING INC. & ITS SUBSIDIARY

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


		For the Three Months Ended					For the Six Months Ended
		May 31,					May 31,
		2026			2025		2026			2025
REVENUE		$	726,829		$	630,250	$	1,532,127		$	1,322,393

COST OF REVENUE
Cost of service			67,041			49,851		158,296			120,010
Cost of labor			343,973			347,132		730,934			737,940
Depreciation and amortization			33,744			62,168		50,272			124,336
Fuel			117,157			102,033		222,266			209,946
Maintenance and repairs			83,877			51,064		131,957			144,566
Total cost of revenue			645,792			612,248		1,293,725			1,336,798

GROSS PROFIT (LOSS)			81,037			18,002		238,402			(14,405)

OPERATING EXPENSES
R&D expenses			2,150,000			—		2,150,000			—
General and administrative expenses			706,072			141,762		1,170,678			425,381
Total operating expenses			2,856,072			141,762		3,320,678			425,381

LOSS FROM OPERATIONS			(2,775,035)			(123,760)		(3,082,276)			(439,786)

OTHER INCOME (EXPENSE)
Interest income, net			216,101			—		414,838			—
Other income, net			25,992			16,556		25,992			21,285
Total other income, net			242,093			16,556		440,830			21,285

LOSS BEFORE INCOME TAX BENEFIT			(2,532,942)			(107,204)		(2,641,446)			(418,501)

Income tax expense (benefit)			—			400		1,600			(105,898)

NET LOSS		$	(2,532,942)		$	(107,604)	$	(2,643,046)		$	(312,603)

Loss per common share - basic and diluted		$	(0.15)		$	(0.01)	$	(0.16)		$	(0.02)
Weighted average shares - basic and diluted*			16,716,672			12,916,667		16,716,672			12,916,672

*Retrospectively adjusted for the reverse split of the Company’s common stock at a ratio of 1-for-6, which took effect on December 23, 2024 (the “Reverse Stock Split”). See Note 12.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

Table of Contents

ELITE EXPRESS HOLDING INC. & ITS SUBSIDIARY

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE SIX MONTHS ENDED MAY 31, 2026 AND 2025


		Common Stock*
		Class A			Class B			Additional				Total
		Common			Common			paid-in		Accumulated		Stockholders’
		stock	Amount		stock	Amount		capital		Deficit		Equity
Balance, November 30, 2024		8,750,005	$	9	4,166,667	$	4	$	1,684,988	$	(309,009)	$	1,375,992
Capital Contributions from a stockholder		—		—	—		—		300,000		—		300,000
Net loss for the period		—		—	—		—		—		(204,999)		(204,999)
Balance, February 28, 2025		8,750,005	$	9	4,166,667	$	4	$	1,984,988	$	(514,008)	$	1,470,993
Capital Contributions from a stockholder		—		—	—		—		180,000		—		180,000
Net loss for the period		—		—	—		—		—		(107,604)		(107,604)
Balance, May 31, 2025		8,750,005	$	9	4,166,667	$	4	$	2,164,988	$	(621,612)	$	1,543,389

*Retrospectively adjusted for the reverse split of the Company’s common stock at a ratio of 1-for-6, which took effect on December 23, 2024 (the “Reverse Stock Split”). See Note 12.


		Common Stock
		Class A					Class B					Additional						Total
		Common					Common					paid-in			Accumulated			Stockholders’
		stock		Amount			stock		Amount			capital			Deficit			Equity
Balance, November 30, 2025		12,550,005		$	13		4,166,667		$	4		$	15,686,846		$	(2,494,996)		$	13,191,867
Net loss for the period		—			—		—			—			—			(110,104)			(110,104)
Balance, February 28, 2026		12,550,005		$	13		4,166,667		$	4		$	15,686,846		$	(2,605,100)		$	13,081,763
Advances from Stock Issuance		—			—		—			—			8,000,000			—			8,000,000
Net loss for the period		—			—		—			—			—			(2,532,942)			(2,532,942)
Balance, May 31, 2026		12,550,005		$	13		4,166,667		$	4		$	23,686,846		$	(5,138,042)		$	18,548,821

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

ELITE EXPRESS HOLDING INC. & ITS SUBSIDIARY

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


		For the Six Months Ended
		May 31,
		2026			2025
Cash flows from operating activities:
Net loss		$	(2,643,046)		$	(312,603)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of intangible assets			27,600			27,600
Depreciation of plant and equipment			22,672			96,736
Plant and equipment written off			9,340			—
Accrued interest income			(425,382)			—
Deferred tax (benefit)			—			(106,698)
Accrued current income tax expense			(1,600)			800
Changes in operating assets and liabilities:
Decrease in accounts receivable			13,906			7,642
Decrease in prepaid D&O insurance			71,098			—
(Decrease) increase in prepaid expenses and other current assets			(1,225,300)			89,860
(Decrease) increase in accounts payable			5,429			(92)
Decrease in other payables and other current liabilities			(199,367)			(97,297)
Net cash used in operating activities			(4,344,650)			(294,052)
Cash flows from investing activities:
Purchase of property and equipment			(6,418)			—
Repayments from loans to non-related companies			350,000			—
Net cash provided by investing activities			343,582			—
Cash flows from financing activities:
Proceeds from issuance of common stock under private placement agreement			8,000,000			—
Payment for deferred listing cost			—			(296,078)
Repayments made to a related party			—			(5,000)
Capital contributions from a shareholder			—			480,000
Repayment to premium finance			(71,470)			—
Net cash provided by financing activities			7,928,530			178,922

Net increase (decrease) in cash			3,927,462			(115,130)
Cash, beginning of period			1,308,529			170,157
Cash, end of period		$	5,235,991		$	55,027

Supplemental cash flow information
Cash paid for interest			10,549			—

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

ELITE EXPRESS HOLDING INC. (SUCCESSOR) AND JAR TRANSPORTATION INC (PREDECESSOR)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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. JAR 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 7 — Acquisition, 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:


		Date of		State of		% of
Name of Entity		Incorporation		Incorporation		Ownership		Principal Activities
Elite Express Holding Inc.		April 3, 2024		Delaware		Parent		Holding company
Subsidiary of the parent:
JAR Transportation Inc		May 27, 2020		California		100	%	Route business operator and provider of last-mile delivery services

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The accompanying consolidated financial statements have been prepared in accordance with the accounting principles generally accepted in the U.S. (the “U.S. GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). The accompanying consolidated financial statements include the financial statements of the Company and its wholly owned subsidiary. All intercompany balances and transactions are eliminated upon consolidation.

Principles of Consolidation

The consolidated financial statements include the financial statements of the Company and its subsidiaries, which include the California-registered entities directly owned by the Company. All transactions and balances among the Company and its subsidiaries have been eliminated upon consolidation. The results of subsidiaries acquired or disposed of are recorded in the consolidated income statements from the effective date of acquisition or up to the effective date of disposal, as appropriate.

Table of Contents

A subsidiary is an entity in which (i) the Company directly or indirectly controls more than 50% of the voting power; or (ii) the Company has the power to appoint or remove the majority of the members of the board of directors or to cast a majority of votes at the meetings of the board of directors or to govern the financial and operating policies of the investee pursuant to a statute or under an agreement among the shareholders or equity holders.

Uses of estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities on the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, management reviews these estimates and assumptions using the currently available information. Changes in facts and circumstances may cause the Company to revise its estimates. In accordance with ASC 250, the changes in estimates will be recognized in the same period of changes in facts and circumstances. The Company bases its estimates on past experiences and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Estimates are used when accounting for items and matters including, but not limited to, the allowance for credit losses of accounts receivable and loans receivable, useful lives of plant and equipment, the recoverability of long-lived assets, impairment of goodwill, and revenue recognition.

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:

●

The Company generates 100% of its revenue from FedEx, its sole customer. Any material change in the terms of the agreement, service demand, or the relationship itself could adversely affect the Company’s financial performance.

●

The route delivery industry is competitive, and the Company faces competition from both large national service providers and smaller regional operators. Changes in competitive dynamics may impact pricing, service demand, and profitability.

●

Seasonal demand fluctuations, particularly during peak periods such as holidays, may create challenges in resource allocation and operational scalability, potentially affecting the Company’s performance.

●

The Company is subject to various local, state, and federal transportation regulations. Changes in these regulations, or non-compliance with them, may result in increased costs or disruptions to operations.

●

The Company’s operations may also be affected by external events such as natural disasters, extreme weather conditions, and other events beyond its control, which could disrupt delivery schedules and operations.

Cash and cash equivalents

Cash includes cash at banks that can be added to or withdrawn without limitation and time deposits with banks or other financial institutions with maturity periods of 90 days (three months) or less.

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Accounts receivable, Other receivables, and Loans Receivable

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. Other receivables and loans receivable arise from transactions with non-trade customers.

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 within two 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 May 31, 2026 and November 30, 2025, no allowance for credit losses was recorded, as all outstanding balances were considered fully collectible.

Plant and equipment

Plant 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:


Categories		Estimated useful life
Vehicles		5 years

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 flows 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 months and six months ended May 31, 2026 and 2025.

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:

●

Level 1 — inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

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●

Level 2 — inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted market prices for identical or similar assets in markets that are not active, inputs other than quoted prices that are observable and inputs derived from or corroborated by observable market data.

●

Level 3 — inputs to the valuation methodology are unobservable.

Unless otherwise disclosed, the fair value of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, loans receivable, and other current assets, accounts payable, due to a related party, other payables and other current liabilities, approximate the fair value of the respective assets and liabilities as of May 31, 2026 and November 30, 2025, based upon the short-term nature of the assets and liabilities.

Prepaid Insurance and Premium Financing

The Company obtains 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.

At inception, the full amount of the insurance premium is recorded as prepaid insurance within prepaid expenses and other current assets on the consolidated balance sheets, with a corresponding premium financing payable recorded within current liabilities. Prepaid 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.

Business Combinations

Business combinations are accounted for using the acquisition method of accounting in accordance with ASC 805, Business Combinations. 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 indefinite-lived intangible assets acquired in a business combination are not amortized but are tested for impairment at least annually, or more frequently if events or changes in circumstances indicate that the carrying value may not be recoverable, in accordance with ASC 350, Intangibles—Goodwill and Other.

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 7, “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.

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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 has one 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 months and six months ended May 31, 2026 and 2025.

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:


Categories		Estimated useful life
Customer Relationship		10 years

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 Independent Service Provider (ISP) for FedEx and provides logistics solutions primarily in the United States. The Company coordinates with FedEx for the transport of goods pursuant to FedEx’s instructions and the end-recipient’s designated destination (the end-recipient is FedEx’s customer, not the Company’s). Once the goods arrive at the end-recipient’s designated destination, the end-recipient acknowledges the delivery note—this confirmation serves as evidence of the Company’s completion of delivery services for FedEx, and the transfer of control of the service obligation to FedEx is deemed complete, marking the successful fulfillment of the logistics services for FedEx. The Company derives all revenue from both fixed service charges and activity-based charges under its ISP Agreement with FedEx. Performance obligations under the ISP Agreement include (i) weekly continuous service coverage for designated service areas (fixed weekly service charges), (ii) execution of delivery and pickup stops for FedEx (stop charges and e-commerce stop charges), (iii) handling and delivering packages for FedEx (package charges, including e-commerce and large package deliveries), and (iv) compliance with FedEx’s brand and branding requirements (apparel and vehicle branding fees).

Revenue is recognized as follows:

●

Over Time: Fixed weekly service charges and branding-related revenue (e.g., apparel and vehicle branding) are recognized evenly over the contractual service period, as the Company satisfies the performance obligation of continuous service coverage and branding compliance over time for FedEx.

●

Point-in-Time: Activity-based revenue, including stop charges, package charges, and fuel surcharges, is recognized upon completion of the respective performance obligation (e.g., completing a delivery or pickup stop for FedEx and obtaining the end-recipient’s delivery confirmation). Recognition of this revenue is further subject to verification and confirmation of the actual completed activity volume by FedEx via its proprietary systems, consistent with the terms of the ISP Agreement.

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Each service task assigned by FedEx (including stop execution and package delivery) is a distinct component of the overall performance obligations under the ISP Agreement; the aggregate of these tasks constitutes the single ongoing performance obligation of providing last-mile delivery services to FedEx as an ISP. The transaction price under the ISP Agreement is determined based on mutually negotiated fixed and variable charges (Negotiated Charges) between the Company and FedEx, documented in the ISP Agreement’s Schedule C and related attachments. The fixed component (weekly service charges) is set at the inception of the rate term; the variable component (activity-based charges) is tied to the actual volume of services completed (e.g., number of stops, packages handled) and includes fuel surcharges that adjust weekly based on market fuel prices. There are no rebates, returns, or other material variable consideration provisions outside of the agreed activity-based charges. As FedEx is the Company’s sole counterparty, there is no prepayment requirement from customers; the Company and FedEx settle service fees based on FedEx’s official confirmation of the actual completed service volume for each settlement period. Since the fixed and activity-based charges under the ISP Agreement are explicitly tied to separate, distinct performance obligations (continuous service coverage vs. per-unit activity execution), no allocation of the transaction price is required under ASC 606. For activity-based revenue, it is recognized at a point in time when control of the service (for FedEx) is transferred and the delivery is completed to the end-recipient’s designated destination, as evidenced by the end-recipient’s signature on the delivery note and subsequent verification by FedEx. Transit periods for individual delivery tasks typically do not exceed one month, and the Company and FedEx settle all service fees on a regular contractual basis. The Company has a contractual credit term with FedEx for service fee settlement, with standard payment terms of one week.

Revenue is presented on a gross basis, as the Company acts as the principal in the transaction with FedEx. This conclusion is based on the following considerations: i) the Company manages all aspects of the last-mile delivery process for FedEx and exercises full control over the delivery service before transferring the completed service to FedEx; ii) the Company has the contractual right to negotiate all fixed and activity-based charges (Negotiated Charges) with FedEx and bears the operational and market risks associated with service delivery (e.g., fluctuations in labor, fuel, and equipment costs); iii) The Company is primarily responsible for fulfilling the promise to provide delivery services in meeting FedEx’s service requirements and FedEx’s customer (end-recipient) delivery expectations, including resolving delivery-related complaints and assuming liability for service failures.

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 within two days of invoicing, and no allowance for credit loss was recorded as of May 31, 2026 and November 30, 2025. 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 JAR 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.

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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 income 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 months and six months ended May 31, 2026 and 2025, there were no dilutive shares outstanding.

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

An operating segment is a component of the Company that engages in business activities from which it may earn revenue and incur expenses and is identified on the basis of the internal financial reports that are provided to and regularly reviewed by the Company’s chief operating decision maker in order to allocate resources and assess performance of the segment.

In accordance with ASC 280, Segment Reporting, operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”), in deciding how to allocate resources and in assessing performance. The Company’s revenue segments have similar economic characteristics, and they are managed as a single business unit. The Company uses the “management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. The Company’s CODM has been identified as the chief executive officer (the “CEO”), who reviews consolidated results when making decisions about allocating resources and assessing performance of the Company. The Company has determined that there is only one reportable operating segment.

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.

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In July 2025, the FASB issued ASU 2025-05, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The amendment provides (1) all entities with a practical expedient to assume that current conditions as of the balance sheet date do not change for the remaining life of the assets and (2) entities other than public business entities with an accounting policy election to consider collection activity after the balance sheet date when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606. This guidance is effective for annual reporting periods beginning after December 15, 2025 and interim reporting periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the impact of the above new accounting pronouncements or guidance on the combined financial statements.

In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-use Software: Targeted Improvements to the Accounting for Internal-use Software which amends the guidance in ASC 350-40, Intangibles-Goodwill and Other-Internal-Use Software. The amendments modernize the recognition and disclosure framework for internal-use software costs, removing the previous “development stage” model and introducing a more judgment-based approach. ASU 2025-06 is effective for fiscal years beginning after December 15, 2027 with early adoption permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures.

In December 2025, the FASB issued ASU 2025-10 – Accounting for Government Grants Received by Business Entities (“ASU 2025-10”), to establish guidance on the recognition, measurement, and presentation of government grants received by business entities. ASU 2025-10 is effective for annual periods beginning after December 15, 2028 and interim periods within those fiscal years. The Company is currently evaluating the impact the adoption of ASU 2025-10 will have on its consolidated financial statements.

In December 2025, the FASB issued ASU 2025-11—Interim Reporting (Topic 270): Narrow Scope Improvements, which clarifies the current requirements under Topic 270. The ASU provides a comprehensive list of required interim disclosures and requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. ASU 2025-11 is effective for public entities for interim periods in fiscal years beginning after December 15, 2027 with early adoption permitted. The Company is currently evaluating the impact the standard will have to the consolidated financial statements and related 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 — ACCOUNTS RECEIVABLE

Accounts receivable consists of the following:


		As of May 31,			As of November 30,
		2026			2025
		(Unaudited)			(Audited)
Accounts receivable		$	58,676		$	72,582

As of the issuance date of this report, the May 31, 2026 and November 30, 2025 accounts receivable balances have been fully collected.

NOTE 4 — LOANS RECEIVABLE

Loans receivable consists of the following:


		As of May 31,			As of November 30,
		2026			2025
		(Unaudited)				(Audited)
Working funds to third party companies-principal		$	9,649,811		$	9,999,811
Loans receivable		$	9,649,811		$	9,999,811

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During fiscal year 2025, the Company entered into short-term loan agreements with five unrelated third parties, in an aggregate principal amount of $9,999,811. Each loan bore interest at an annual rate of 8% and was secured by an irrevocable personal unlimited joint and several liability guarantee provided by the shareholders or chief executive officers of the respective borrowers. The loans were made to earn interest income on the net proceeds from the Company’s initial public offering (“IPO”) prior to their deployment for the purposes described in the Company’s prospectus (see Part II, Item 2 — Unregistered Sales of Equity Securities and Use of Proceeds).

During the six months ended May 31, 2026, the Company received principal repayments totaling $350,000, reducing the outstanding principal balance to $9,649,811 as of May 31, 2026. As of the issuance date of this report, the Company has received aggregate interest payments of $400,000 under the loan agreements.

Subsequent to May 31, 2026, the Company renewed the loan agreements, extending the maturity date of the remaining outstanding loans to November 30, 2026. Under extended terms, the loans bear interest at an annual rate of 5%.

NOTE 5 — PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets consist of the following:


		As of May 31,			As of November 30,
		2026			2025
		(Unaudited)			(Audited)
Other prepaid insurance		$	34,545		$	1,803
Professional services			208,625			167,067
Prepayment for R&D service			1,650,000			500,000
Interest accrued			604,691			179,309
Other current assets			51,012			50,012
Total Prepaid expenses and other current assets		$	2,548,873		$	898,191

The balance of $500,000 as of November 30, 2025 and $1,650,000 as of May 31, 2026 in prepayment for R&D service represents the advance payment made to certain third-party providers for the Company’s proprietary application used for delivery services related to the Company’s operational and technology expansion initiatives. As of May 31, 2026, services under this arrangement had been partially delivered and accordingly R&D expense was recognized during either period. The Company expects to recognize this prepayment as expense consistent with the service delivery schedule, which is expected to commence through fiscal year 2026.

The increase in professional services prepayments from $167,067 as of November 30, 2025 to $208,625 as of May 31, 2026 (an increase of $41,558) primarily reflects advance payments made to legal, audit, and investor relations advisors in connection with the Company’s ongoing public reporting obligations, market expansion activities, and potential acquisition evaluation.

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NOTE 6 — PLANT AND EQUIPMENT

Plant and equipment consists of the following:


		As of May 31,			As of November 30,
		2026			2025
		(Unaudited)			(Audited)
Vehicles		$	337,232		$	382,237
Subtotal			337,232			382,237
Less: accumulated depreciation			(195,818)			(215,229)
Plant and equipment		$	141,414		$	167,008

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 $19,944 and $48,368 for the three months ended May 31, 2026 and May 31, 2025, respectively, and $22,672 and $96,736 for the six months ended May 31, 2026 and May 31, 2025, respectively.

NOTE 7 — ACQUISITION

On September 16, 2024, the Company entered into a Stock Purchase Agreement (“Purchase Agreement”) to acquire 100% of the equity interests in JAR for a total purchase price of $1,475,000, as specified in the 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 designated in the Purchase Agreement within three days after the Purchase Agreement was signed. The Company subsequently made another payment of $398,250 (“Second Payment”) on October 22, 2024. Following these payments, the transaction terms of the JAR Acquisition were further revised. Following the 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 the JAR Acquisition. Immediately after the JAR Acquisition, the Company took control of JAR in accordance with the Purchase Agreement. No former owners 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 purchase 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.

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


Plant and equipment		295,912
Customer relationship		552,000
Deferred tax liabilities		(149,601)
Goodwill		668,858
Total purchase consideration	$	1,367,169

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 May 31, 2026 are as follows:


					Average
	As of May 31,		As of November 30,		Useful Life
	2026		2025		(in Years)
Customer relationship	$	552,000	$	552,000	8.33
Less: accumulated amortization		(92,000)		(64,400)
Total intangible assets	$	460,000	$	487,600

Amortization expense was $13,800 and $13,800 for the three months ended May 31, 2026 and May 31, 2025, respectively, and $27,600 and $27,600 for the six months ended May 31, 2026 and May 31, 2025, respectively.

NOTE 8 — OTHER PAYABLES AND OTHER CURRENT LIABILITIES

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


		As of May 31,			As of November 30,
		2026			2025
		(Unaudited)			(Audited)
Compensation payable		$	53,275		$	87,357
Credit card			55,494			38,526
Other accrued expense			110,231			292,484
Total other payables and other liabilities		$	219,000		$	418,367

NOTE 9 — INSURANCE PREMIUM FINANCING PAYABLE

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


Lender		As of May 31, 2026			As of November 30, 2025			Interest rate
		(Unaudited)			(Audited)
First Insurance Funding		$	—		$	71,470		7.35	%
Total Insurance premium financing payable		$	—		$	71,470		—

On August 26, 2025, the Company entered into a premium finance agreement with First Insurance Funding, whereby the Company was loaned a total principal amount of $142,197.35 for the purpose of funding the Company’s D&O insurance policy. This loan bears an interest rate of 7.35% per annum, and is repayable in nine monthly installments of principal and interest through May 2026. As of May 31, 2026, a principal amount of $nil remains outstanding. Related prepaid insurance at May 31, 2026 of $31,345 is included in Prepaid D&O insurance.

Interest Expense on Insurance Premium Financing Payable

During the three months ended May 31, 2026 and 2025, the Company recognized $1,540 and $nil interest expense associated with its insurance premium financing payable, respectively.

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During the six months ended May 31, 2026 and 2025, the Company recognized $2,637 and $nil interest expense associated with its insurance premium financing payable.

NOTE 10 — INCOME TAXES

The Company and JAR 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:


		For the Three Months						For the Six Months
		Ended May 31,						Ended May 31,
		2026				2025		2026			2025

		(Unaudited)				(Unaudited)		(Unaudited)			(Unaudited)
Current tax provision
Federal		$	—		$	—		$	—		$	—
State			—			400			1,600			800
			—			400			1,600			800
Deferred tax provision (benefit)
Federal			—			—			—			(72,992)
State			—			—			—			(33,706)
			—			—			—			(106,698)
Income tax provision (benefit)		$	—		$	400		$	1,600		$	(105,898)

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


		For the Three Months						For the Six Months
		Ended May 31,						Ended May 31,
		2026			2025			2026			2025
		(Unaudited)			(Unaudited)				(Unaudited)			(Unaudited)
Federal statutory tax rate			21.00	%		21.0	%		21.00	%		21.0	%
Permanent Items		$	—	%	$	—	%	$	—	%	$	—	%
State statutory tax rate			6.98	%		(7.3)	%		6.96	%		8.9	%
Non-deductible expenses			—	%		(14.0)	%		—	%		(4.6)	%
Return to Provision			—	%		—	%		—	%		—	%
DTA True Up			0.02	%		—	%		0.01	%		—	%
Other			—	%		—	%		—	%		—	%
Change in valuation allowance			(28.00)	%		—	%		(28.00)	%		—	%
Effective tax rate		$	—	%	$	(0.3)	%	$	(0.03)	%	$	25.3	%

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


		As of May 31,			As of November 30,
		2026			2025
		(Unaudited)			(Audited)
Deferred tax assets:
Net operating loss carry-forwards			2,023,110			551,538
Depreciation expense			—			—
Less: Valuation allowance			(1,890,820)			(410,994)
Total deferred tax assets			132,290			140,544

Deferred tax liabilities:
Customer relationship recognized upon JAR Acquisition			(128,720)			(136,449)
Depreciation expense			(3,570)			(4,095)
Total deferred tax liabilities			(132,290)			(140,544)
Total deferred tax assets (liabilities)		$	—		$	—

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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 carryforwards. 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 May 31, 2026 and November 30, 2025, the Company believes that a valuation allowance is required.

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 are no uncertain tax positions requiring recognition in its financial statements as of May 31, 2026.

State Income Tax

To the extent there is state nexus based on sales, location of employees, inventory, and/or other property, a tax provision is prepared and recorded. In 2026, the Company identified nexus in California.

For the three months ended May 31, 2026, the Company recorded a tax provision of $nil. For the three months ended May 31, 2025, the Company recorded a tax provision of $400. For the six months ended May 31, 2026, the Company recorded a tax provision of $1,600. For the six months ended May 31, 2025, the Company recorded a tax benefit of $105,898.

NOTE 11 — CONCENTRATIONS

Credit risk

As of May 31, 2026 and November 30, 2025, $0.2 million and $1.2 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 standard insurance amount is $250,000 per depositor, per insured bank, for each account ownership category. The bank deposits exceeding the standard insurance amount will not be covered. The Company’s total unprotected cash held in banks amounted to approximately $nil and $0.5 million as of May 31, 2026 and November 30, 2025, respectively. The Company has not experienced any losses in such accounts.

As of May 31, 2026 and November 30, 2025, $5.0 million and $0.1 million of the Company’s cash was on deposit at financial institutions in Hong Kong, respectively. Per Hong Kong regulations, the maximum insured bank deposit amount is HKD800,000 for each financial institution. The Company’s total unprotected cash held in banks amounted to $4.9 million and $nil as of May 31, 2026 and November 30, 2025, 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, FedEx, accounted for 100% of the Company’s revenue for both the three months and six months ended May 31, 2026 and May 31, 2025. 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 with FedEx.

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NOTE 12 — 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 certificate 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 to one 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 a one-to-one basis. Class A common stock is not convertible into shares of any other class. The numbers of authorized and 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 per-share amounts in the financial statements have also been adjusted accordingly.

On August 27, 2024, the Company entered into two separate subscription agreements with two investors, Eternal Blessing Holdings Limited and Centurion Tech Holdings Limited, 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 from two 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 year ended November 30, 2025, the Company received capital contributions of $630,000 from three shareholders, which included $430,000 from Grand Bright International Holdings Ltd., $50,000 from Mr. Huan Liu through 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.

On March 10, 2026, the Company entered into Stock Purchase Agreements with eight non-U.S. investors, pursuant to which the Company agreed to issue and sell in a private placement an aggregate of 32,000,000 shares of the Company’s Class A Common Stock, par value $0.000001 per share, at a purchase price of $0.25 per share, for aggregate gross proceeds of $8,000,000. The offering was conducted in offshore transactions pursuant to Rule 903 of Regulation S promulgated under the Securities Act of 1933, as amended. On June 4, 2026, the transaction was closed, and 32,000,000 shares were issued pursuant to this private placement. As of June 4, 2026, there were 44,550,005 shares of Class A common stock and 4,166,667 shares of Class B common stock issued and outstanding.

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 of one 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.

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As of May 31, 2026, there were 12,550,005 shares of Class A common stock and 4,166,667 shares of Class B common stock issued and outstanding.

NOTE 13 — COMMITMENTS AND CONTINGENCIES

Lease commitments

The total future minimum lease payments of short-term lease under the non-cancellable operating lease with respect to the office as of May 31, 2026 are payable as follows:


		Lease Commitment
Within 1 year		$	8,145

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.

In February 2025, Pablo Aguero (a former employee of JAR, the “Applicant”) filed a workers’ compensation claim with the California Workers’ Compensation Appeals Board (the “WCAB”) (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) 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 the Company’s 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. 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 Rafael Perez Linarez, 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, 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 the Company’s workers’ compensation insurance carrier and no cost estimates are currently available.

In July 2025, Joseph McNeal (a former employee of JAR) 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 has responded to related subpoenas. No cost estimates are currently available.

In January 2026, the Company received a demand letter from a former employee of JAR, asserting certain employment-related claims. No legal proceeding has been initiated in connection with this matter. The Company has reached an agreement in principle to settle the claims. The Company does not believe this matter is material to its financial condition or results of operations.

In February 2026, a former employee of JAR filed a wage claim with the California Labor Commissioner (State Case No. WC-CM-1110021). The claim relates to employment from approximately November 2024 to July 2025. The Company was served with the notice in March 2026 and is evaluating the matter. The Company does not believe the matter will have a material adverse effect on its financial condition or results of operations.

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As of May 31, 2026, 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 audited condensed consolidated financial position, results of operations, and cash flows.

NOTE 14 — RELATED PARTY TRANSACTIONS

a. Nature of relationship with related parties


Name		Relationship with the Company
Mr. Huan Liu		Chairman of the Board of Directors
Mr. Raymond June		Former President and former stockholder of JAR
Centurion Tech Holdings Limited		Stockholder
Eternal Blessing Holdings Limited		Stockholder
Grand Bright International Holdings Ltd		Stockholder

During the three months ended May 31, 2026, the Company had no related party transactions required to be disclosed in accordance with ASC 850, Related Party Disclosures. There were no outstanding balances, loans, guarantees, or other transactions with related parties during the period.

NOTE 15 — SUBSEQUENT EVENTS

The Company has evaluated subsequent events from May 31, 2026 through July 14, 2026. Based on this evaluation, the Company has determined that no subsequent events have occurred that require recognition or disclosure in the consolidated financial statements for the three months ended May 31, 2026, except (i) as disclosed in Note 13 with respect to the service of process received in March 2026 in connection with the California Labor Commissioner wage claim; and (ii) as set forth below.

On June 1, 2026, the Company entered into extension agreements to its outstanding loan agreements with the borrowers, extending the maturity date of the remaining outstanding principal balance to November 30, 2026 with an interest at an annual rate of 5%.

On July 10, 2026, the Company received aggregate interest payments of $400,000 related to the outstanding loans.

On July 10, 2026, the Company entered into a Software Development Agreement with Leyan Management Ltd. (the “Developer”) for the phased development, upgrade and customization of the Company’s AI-enabled logistics operations platform, which is currently under development. The total consideration under the agreement is $3.3 million. The Developer will deliver the software, source code and related documentation on a milestone basis, subject to the Company’s testing and acceptance. The Company will own all intellectual property and work product developed under the agreement. The Company may terminate the agreement at any time upon written notice, subject only to payment obligations for completed and accepted deliverables.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the consolidated financial statements and the related notes included elsewhere in this quarterly report on Form 10-Q.

Forward-Looking Statements

This quarterly report on Form 10-Q contains “forward-looking statements.” All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to: any projections of earnings, revenue, or other financial items; any statements regarding the adequacy, availability, and sources of capital, any statements of the plans, strategies, and objectives of management for future operations; any statements concerning proposed new products, services, or developments; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing. Forward-looking statements may include the words “may,” “will,” “estimate,” “intend,” “continue,” “believe,” “expect,” “plan,” “project,” or “anticipate,” and other similar words. In addition to any assumptions and other factors and matters referred to specifically in connection with such forward-looking statements, factors that could cause actual results or outcomes to differ materially from those contained in the forward-looking statements include those factors set forth under “Item 1A. Risk Factors” in the Annual Report on Form 10-K (File No. 001-41761) (the “Annual Report”), which was filed with the SEC on February 27, 2026, as amended on March 18, 2026.

Although we believe that the expectations reflected in our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent risks and uncertainties, such as those disclosed in this quarterly report. We do not intend, and undertake no obligation, to update any forward-looking statement, except as required by law.

The information included in this Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our unaudited condensed consolidated financial statements and the notes included in this quarterly report on Form 10-Q.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

We are a holding company incorporated in Delaware. Through our wholly owned subsidiary, JAR, a California-based operating entity, we specialize in last-mile delivery services within California. Our core business focuses on retrieving packages from distribution hubs and ensuring their prompt and secure delivery to recipients’ doorsteps. Committed to innovation and efficiency, our mission is to optimize last-mile logistics by providing efficient, reliable, and innovative delivery solutions.

As of the date of this report, we employ approximately 29 full-time staff, including approximately 23 drivers. Our fleet consists of approximately 22 trucks and trailers. We provide exclusive pickup and delivery services within our designated service area, covering approximately 1,665.28 square miles. We utilize GroundCloud, a leading logistics software, during our course of business, for route optimization, driver management, and compliance monitoring. Additionally, we are actively expanding our investment in advanced technologies to enhance our scalability, automate our operations, and drive our data-driven decision-making. On an average day, we complete between 1,100 to 1,700 stops, facilitating the pickup and delivery of approximately 1,800 to 2,500 packages. During peak seasons, our daily stops rise to an estimated 2,000, allowing us to meet heightened demand with efficiency and reliability.

Currently, we pick up packages from the distribution hubs of FedEx and deliver them to recipients within designated service areas. While FedEx has been our only customer under an Independent Service Provider (“ISP”) agreement, we are actively exploring opportunities to expand our customer base, diversify our revenue streams and strengthen our market presence.

The holding company, prior to the acquisition of JAR on October 25, 2024 (the “Acquisition Date”), did not have any active business operations.

Key Factors Affecting Our Results of Operations

Our results of operations are influenced by several interrelated factors that reflect the dynamic nature of our business environment. The following are the key factors that impact our performance:

●

E-Commerce Growth: We believe the rapid growth of e-commerce is a driving force behind the increased demand for last-mile delivery services. As consumer habits continue to shift toward online shopping, we anticipate benefitting from rising delivery volumes. Meeting customer expectations for fast and reliable service requires ongoing investments in technology and operational capacity.

●

Labor Costs and Workforce Management: Labor costs are one of the largest components of our cost structure, accounting for approximately 50% or more of our total costs through May 31, 2026 and 2025. Retaining a skilled and motivated workforce is critical to maintaining service quality. We strive to mitigate these challenges by optimizing staffing models, including employing part-time and gig workers during peak demand periods, and investing in workforce training and retention programs to improve driver efficiency and reduce turnover.

●

Fuel Costs and Operational Efficiency: Fuel costs are another significant component of our cost of revenue and fluctuations in fuel prices can directly affect our profitability. We managed fuel expenses through standard route planning and operational adjustments on or prior to the Acquisition Date. To further enhance efficiency, we have implemented route optimization strategies aimed at reducing mileage and improving fuel efficiency. In addition, we are exploring the integration of electric vehicles to reduce our reliance on traditional fuel sources and align with our sustainability objectives.

●

Seasonal Demand and Resource Scaling: Peak seasons, such as the holiday period, account for a substantial portion of our annual revenue. Managing this demand requires precise planning and execution, including the temporary hiring of additional drivers, flexible routing strategies, and leveraging the FedEx DRO system, a predictive tool to anticipate delivery patterns. Successfully navigating these high-demand periods is essential to maintaining our reputation and customer relationships.

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●

Technology Investments: We utilize GroundCloud, a leading logistics software, for route optimization, driver management, and compliance monitoring. While continuing to leverage this system, we are also expanding our investments in advanced technologies to enhance operational scalability, data-driven decision-making, and automation. By continuously evaluating and adopting innovative solutions, we aim to enhance efficiency, improve service reliability, and optimize operational costs. These ongoing investments in logistics technology are expected to strengthen our capacity to manage growing delivery volumes and position us for long-term success.

●

Customer Concentration and Diversification: As of the date of this report, 100% of our revenue is derived from FedEx. While this partnership provides operational stability, it also exposes us to risks associated with customer dependency. To mitigate these risks, we are actively exploring opportunities to partner with additional carriers and expand our customer base, which we believe will diversify our revenue streams and reduce dependency on a single client.

●

Capital Investments in Infrastructure: Sustained growth depends on strategic investments in vehicles, the transition to electric vehicle, and operational infrastructure, which includes tools and software that support our operations. We focused primarily on maintaining existing operations prior to the Acquisition Date. Following the Acquisition Date, we are adopting a more proactive investment strategy to expand capacity, enhance efficiency, and integrate advanced logistics solutions. These investments support our ability to scale operations, meet customer expectations, and enhance operational efficiency. While these expenditures may impact short-term profitability, they are essential for long-term success.

Results of Operations

Comparison of Results of Operations for the Three Months and Six Months ended May 31, 2026 and May 31, 2025:


		For the Three Months															For the Six Months
		Ended May 31,															Ended May 31,
		2026					2025										2026					2025
		(Successor)					(Predecessor)					Change					(Successor)					(Predecessor)					Change
		Amount			%		Amount			%		Amount			%		Amount			%		Amount			%		Amount			%
Revenue		$	726,829		100.0	%	$	630,250		100.0	%	$	96,579		15.3	%	$	1,532,127		100.0	%	$	1,322,393		100.0	%	$	209,734		15.9	%
Cost of Revenue
Cost of service			67,041		9.2	%		49,851		7.9	%		17,190		34.5	%		158,296		10.3	%		120,010		9.1	%		38,286		31.9	%
Cost of labor			343,973		47.3	%		347,132		55.1	%		(3,159)		(0.9)	%		730,934		47.7	%		737,940		55.8	%		(7,006)		(0.9)	%
Fuel			117,157		16.1	%		102,033		16.2	%		15,124		14.8	%		222,266		14.5	%		209,946		15.9	%		12,320		5.9	%
Maintenance and repairs			83,877		11.5	%		51,064		8.1	%		32,813		64.3	%		131,957		8.6	%		144,566		10.9	%		(12,609)		(8.7)	%
Depreciation and amortization			33,744		4.6	%		62,168		9.9	%		(28,424)		(45.7)	%		50,272		3.3	%		124,336		9.4	%		(74,064)		(59.6)	%
Total cost of revenue			645,792		88.7	%		612,248		97.2	%		33,544		5.5	%		1,293,725		84.4	%		1,336,798		101.1	%		(43,073)		(3.2)	%

Gross Profit (Loss)			81,037		11.3	%		18,002		2.8	%		63,035		350.2	%		238,402		15.6	%		(14,405)		(1.1)	%		252,807		1,755.0	%

General and administrative expenses			706,072		97.1	%		141,762		22.5	%		564,310		398.1	%		1,170,678		76.4	%		425,381		32.2	%		745,297		175.2	%
R&D expenses			2,150,000		295.8	%		—		—	%		2,150,000		100.0	%		2,150,000		140.3	%		—		—	%		2,150,000		100.0	%
Total operating expenses			2,856,072		392.9	%		141,762		22.5	%		2,714,310		1,914.7	%		3,320,678		216.7	%		425,381		32.2	%		2,895,297		680.6	%

Loss from Operations			(2,775,035)		(381.6)	%		(123,760)		(19.7)	%		(2,651,275)		2,142.3	%		(3,082,276)		(201.1)	%		(439,786)		(33.3)	%		(2,642,490)		600.9	%

Other Income (Expense)
Interest income, net			216,101		29.7	%		—		—	%		216,101		—	%		414,838		27.1	%		—		—	%		414,838		—	%
Other income, net			25,992		3.6	%		16,556		2.6	%		9,436		57.0	%		25,992		1.7	%		21,285		1.6	%		4,707		22.1	%
Total other income, net			242,093		33.3	%		16,556		2.6	%		225,537		1,362.3	%		440,830		28.8	%		21,285		1.6	%		419,545		(1,971.1)	%

Loss before Income Tax Expense			(2,532,942)		(348.3)	%		(107,204)		(17.1)	%		(2,425,738)		2,262.7	%		(2,641,446)		(172.3)	%		(418,501)		(31.7)	%		(2,222,945)		(531.2)	%

Income Tax Provision (Benefit)			—		—	%		400		0.10	%		(400)		100.0	%		1,600		0.1	%		(105,898)		(8.0)	%		107,498		(101.5)	%
Net Loss		$	(2,532,942)		(348.3)	%	$	(107,604)		(17.2)	%	$	(2,425,338)		2,253.9	%	$	(2,643,046)		(172.4)	%	$	(312,603)		(23.7)	%	$	(2,330,443)		745.5	%

Revenue

Our revenue is structured into two main categories: (i) fixed revenue, which includes weekly service charges, branding-related reimbursements, and peak season surcharges, and (ii) activity-based revenue, which includes charges based on the number of stops, packages delivered, e-commerce orders, fuel surcharges, and other variable components.

For the three months ended May 31, 2026, we generated total revenue of $726,829, representing an increase of $96,579, or 15.3%, compared with $630,250 for the three months ended May 31, 2025. These increases were primarily attributable to increased weekly service charge standard under our updated service contract and higher volume-based activity revenue contributed by fuel surcharge payment.

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For the six months ended May 31, 2026, we generated total revenue of $1,532,127, representing an increase of $209,734, or 15.9%, compared with $1,322,393 for the six months ended May 31, 2025. These increases were primarily attributable to higher volume-based activity revenue, particularly from e-commerce deliveries and fuel surcharges payment driven by an increasing population and the expansion of commercial activity in the areas we serve.

The table below sets forth a breakdown of revenue components for the periods indicated:


		For the Three Months												For the Six Months
		Ended May 31,												Ended May 31,
		2026				2025				Change				2026				2025				Change
		Amount		%		Amount		%		Amount		%		Amount		%		Amount		%		Amount		%
Fixed:
Weekly service charges		$	203,541	28.0	%	$	147,717	23.4	%	$	55,824	37.8	%	$	353,230	23.1	%	$	291,961	22.1	%	$	61,269	21.0	%
Branding-related			10,792	1.5	%		8,756	1.4	%		2,036	23.3	%		20,710	1.4	%		17,306	1.3	%		3,404	19.7	%
Subtotal:			214,333	29.5	%		156,473	24.8	%		57,860	37.0	%		373,940	24.5	%		309,267	23.4	%		64,673	20.9	%
Activity-based:
Stops			108,596	14.9	%		103,031	16.3	%		5,565	5.4	%		218,916	14.3	%		203,902	15.4	%		15,014	7.4	%
Packages			16,607	2.3	%		15,928	2.5	%		679	4.3	%		31,892	2.1	%		29,714	2.2	%		2,178	7.3	%
E-Commerce			253,840	34.9	%		263,757	41.8	%		(9,917)	(3.8)	%		602,377	39.3	%		566,919	42.9	%		35,458	6.3	%
Large packages			19,374	2.7	%		19,017	3.0	%		357	1.9	%		38,142	2.5	%		36,040	2.7	%		2,102	5.8	%
Fuel Surcharge			113,706	15.6	%		69,093	11.0	%		44,613	64.6	%		200,805	13.1	%		143,119	10.8	%		57,686	40.3	%
Surge Stops			—	—	%		—	—	%		—	—	%		41,328	2.7	%		29,983	2.3	%		11,345	37.8	%
Subtotal:			512,123	70.4	%		470,826	74.6	%		41,297	8.8	%		1,133,460	74.0	%		1,009,677	76.3	%		123,783	12.3	%

Other Pickup and Delivery (P&D)			373	0.1	%		2,951	0.7	%		(2,578)	(87.4)	%		24,727	1.6	%		3,449	0.3	%		21,278	616.9	%

Total Revenue		$	726,829	100.0	%	$	630,250	100.0	%	$	96,579	15.3	%	$	1,532,127	100.0	%	$	1,322,393	100.0	%	$	209,734	15.9	%

On February 21, 2026, we renewed our agreement with FedEx. The new contract is valid until January 1, 2027. Under the new contract, the weekly service charge within the fixed fees has increased, while the fee standards for certain types of services under the activity-based model have decreased. This has resulted in varying degrees of increase and decrease across the components of our revenue.

For the three months ended May 31, 2026, total fixed revenue was $214,333, accounting for approximately 29.5% of total revenue, representing an increase of $57,860, or 37.0%, compared to the fixed revenue of $156,473, or approximately 24.8% of total revenue for the three months ended May 31, 2025. For the six months ended May 31, 2026, total fixed revenue was $373,940, accounting for approximately 24.5% of total revenue, representing an increase of $64,673, or 20.9%, compared to the fixed revenue of $309,267, or approximately 23.4% for the six months ended May 31, 2025. The increase primarily due to the increase of weekly service charge standard under our updated service contract from February 2026.

For the three months ended May 31, 2026, total activity-based revenue accounted for $512,123, or 70.4% of total revenue up from $470,826, or 74.6% of total revenue in the same period of the prior year. For the six months ended May 31, 2026, total activity-based revenue accounted for $1,133,460, or 74.0% of total revenue up from $1,009,677, or 76.3% of total revenue in the same period of the prior year. This growth was primarily driven by an increase in the number of parcels we handled and increased fuel surcharge payment as a result of general increasing fuel price.

Among all revenue categories, e-commerce deliveries and weekly service charges continued to be the two largest contributors to our total revenue for both three months and six months ended May 31, 2026 and May 31, 2025.

●

E-commerce deliveries generated $253,840 in revenue during the three months ended May 31, 2026, or 34.9% of total revenue, compared with $263,757, or 41.8%, during the three months ended May 31, 2025. The decrease was mainly due to decreased service unit price from early 2026, together with the increase of fixed price increase. E-commerce deliveries generated $602,377 in revenue during the six months ended May 31, 2026, or 39.3% of total revenue, compared with $566,919, or 42.9%, during the six months ended May 31, 2025. The increases were primarily driven by sustained residential delivery demand within our assigned FedEx service areas and the ever-increasing proficiency and professionalism of our staff in their delivery work. E-commerce deliveries represented the largest revenue component in all reported periods.

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●

Weekly service charges totaled $203,541, or 28.0% of total revenue, for the three months ended May 31, 2026, compared with $147,717, or 23.4%, during the three months ended May 31, 2025. Weekly service charges totaled $353,230, or 23.1% of total revenue, for the six months ended May 31, 2026, compared with $291,961, or 22.1%, during the six months ended May 31, 2025. The increases in both periods, $55,824, or 37.8% during the second quarter of 2026 and $61,269, or 21.0% during the six months ended May 31, 2026, was primarily attributable to the increase in the baseline contractual rates under our updated ISP agreement with FedEx. Under the renewed ISP agreement effective February 21, 2026, the increased weekly service charge standard is expected to continue contributing stable fixed revenue and to help offset any seasonal decline in activity-based revenue during the off-season.

Cost of Revenue

The table below summarizes the total cost of revenue and its components for the interim periods presented:


		For the Three Months												For the Six Months
		Ended May 31,												Ended May 31,
		2026				2025				Change				2026				2025				Change
		Amount		%		Amount		%		Amount		%		Amount		%		Amount		%		Amount		%
Cost of service		$	67,041	10.4	%	$	49,851	8.1	%	$	17,190	34.5	%	$	158,296	12.2	%	$	120,010	9.0	%	$	38,286	31.9	%
Cost of Labor			343,973	53.3	%		347,132	56.7	%		(3,159)	(0.9)	%		730,934	56.5	%		737,940	55.3	%		(7,006)	(0.9)	%
Fuel			117,157	18.1	%		102,033	16.7	%		15,124	14.8	%		222,266	17.2	%		209,946	15.7	%		12,320	5.9	%
Maintenance and repairs			83,877	13.0	%		51,064	8.3	%		32,813	64.3	%		131,957	10.2	%		144,566	10.8	%		(12,609)	(8.7)	%
Depreciation and amortization			33,744	5.2	%		62,168	10.2	%		(28,424)	(45.7)	%		50,272	3.9	%		124,336	9.2	%		(74,064)	(59.6)	%
Total Cost of Revenue		$	645,792	100.0	%	$	612,248	100.0	%	$	33,544	5.5	%	$	1,293,725	100.0	%	$	1,336,798	100.0	%	$	(43,073)	(3.2)	%

For the three months ended May 31, 2026, our cost of revenue was $645,792, or 88.7% of total revenue, compared with $612,248, or 97.2%, for the three months ended May 31, 2025. This increase was primarily due to increased maintenance and repair fees and cost of service arising from the rental of additional vehicles to fulfill our delivery volume obligations.

For the six months ended May 31, 2026, our cost of revenue was $1,293,725, or 84.4 % of total revenue, compared with $1,336,798, or 101.1%, for the six months ended May 31, 2025. The decrease in the cost of revenue, as well as the cost as a percentage of revenue, was mainly driven by lower maintenance and repair expenses, and depreciation expenses as certain fleets been fully depreciated, partially offset by increase in cost of service and fuel expenses.

The cost of revenue consists of labor, fuel, depreciation and amortization, service and maintenance related expenses. Overall, our cost of main operations has been well managed compared to revenue growth, reflecting our continuously improving operational management capabilities. Each component of our cost of revenue impacted the overall cost structure during the three and six months ended May 31, 2026 and May 31, 2025, as discussed below:

●

Cost of Service: Service expenses totaled $67,041, or 10.4 % of total cost of revenue, during the three months ended May 31, 2026, compared with $49,851 during the three months ended May 31, 2025. For the six months ended May 31, 2026 and May 31, 2025, service expenses totaled $158,296, or 12.2% of total cost of revenue, and $120,010 or 9.0% of total cost of revenue respectively. These increases were primarily attributable to higher insurance premiums and rental of more vehicles to complete the parcel delivery tasks.

●

Cost of Labor: Cost of labor expenses remained the largest component of our costs of revenue, totaling $343,973, or 53.3% during the three months ended May 31, 2026, a decrease of $3,159, or 0.9%, compared with the three months ended May 31, 2025. Labor expenses for the six months ended May 31, 2026 totaled $730,934, or 56.5% of total cost of revenues, compared with $737,940, or 55.3%, of total cost of revenues for the six months ended May 31, 2025. The decrease of cost of labor, coupled with an increase in revenue, was primarily due to the higher proportion of skilled drivers in our workforce. This enabled us to handle the growing volume of parcel deliveries with fewer drivers. Using fewer, more skilled drivers to deliver the same and even more volume of parcels reduces costs and ensures a higher standard of service. This is the objective and driving force behind our ongoing driver training and efforts to improve operational management.

●

Maintenance and Repair: Maintenance and repair expense increased by $32,813, or 64.3%, to $83,877 during the three months ended May 31, 2026, compared with $51,064 for the three months ended May 31, 2025. This increase occurred primarily as a result of route and scheduling improvements annually. Some of our vehicles have exceeded their depreciation period but are still in service, so we have carried out an annual major overhaul on them. The maintenance costs for this quarter are primarily due to repairs carried out on these vehicles. Maintenance and repair expense decreased by $12,609, or 8.7% to $131,957 during

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the six months ended May 31, 2026, compared with $144,566 for the six months ended May 31, 2025. The high vehicle maintenance costs in the first half of 2025 were mainly due to the poor condition of many of the vehicles when we first took them over, with a number of them requiring major repairs. This situation did not arise in the first half of 2026, however, resulting in a reduction in maintenance costs.

●

Depreciation and Amortization: Depreciation and amortization expenses totaled $33,744 during the three months ended May 31, 2026, a decrease of $28,424, or 45.7%, compared with $62,168 for the three months ended May 31, 2025. For the six months ended May 31, 2026, depreciation and amortization expense totaled $50,272, down $74,064 or 59.6%, compared with $124,336 for the six months ended May 31, 2025. The decrease was primarily due to a reduction resulting from vehicles being written off and an overall reduction in the size of the vehicle fleet.

●

Fuel: Fuel expense increased by $15,124, or 14.8%, to $117,157 for the three months ended May 31, 2026. The increase of fuel, compared with the activity-based decrease of revenue, was primarily driven by the increasing price level of fuel, partially offset by our improved energy management and toute improvement. For the six months ended May 31, 2026, fuel expense increased by $12,320, or 5.9%, to $222,266 primarily due to improved energy management and improved route planning and enhanced driver operations, which contributed to more efficient fuel utilization and lower average mileage per route, and the introduction of new electric trucks into operations beginning this fiscal quarter against the background of an overall increase in fuel prices.

Gross Profit

For the three months ended May 31, 2026, we recorded our gross profit of $81,037, or 11.3% of total revenue, compared with a gross profit of $18,002, or 2.8%, for the three months ended May 31, 2025. The increase of $63,035 was primarily driven by increased revenue.

For the six months ended May 31, 2026, we recorded a gross profit of $238,402, or 15.6% of total revenue, compared with a gross loss of $14,405, or 1.1 % of total revenue for the six months ended May 31, 2025. The increase of $252,807 was primarily driven by an increase in revenue.

General and Administrative Expenses

The following table sets forth the breakdown of our general and administrative expenses for the periods presented.


		For the Three Months												For the Six Months
		Ended May 31,												Ended May 31,
		2026				2025				Change				2026				2025				Change
		Amount		%		Amount		%		Amount		%		Amount		%		Amount		%		Amount		%
General and administrative expenses
Professional fees		$	170,948	24.2	%	$	55,636	39.2	%	$	115,312	207.3	%	$	426,356	36.4	%	$	261,206	61.4	%	$	165,150	63.2	%
Payroll Expense			277,683	39.3	%		80,986	57.1	%		196,697	242.9	%		431,237	36.8	%		151,689	35.7	%		279,548	184.3	%
Franchise Tax			200,000	28.3	%		—	—	%		200,000	100.0	%		200,000	17.1	%		—	—	%		200,000	100.0	%
Others			57,441	8.1	%		5,140	3.7	%		52,301	1,017.5	%		113,085	9.7v	%		12,486	2.9	%		100,599	805.7	%
Total general and administrative expenses		$	706,072	100.0	%	$	141,762	100.0	%	$	564,310	398.1	%	$	1,170,678	100.0	%	$	425,381	100.0	%	$	745,297	175.2	%

For the three months ended May 31, 2026, general and administrative expenses were $706,072, compared with $141,762 for the three months ended May 31, 2025, representing an increase of $564,310, or 398.1%. The increase in administrative expenses was primarily due to higher management and staff remuneration following the Company’s listing, increased expenditure on various professional services and higher compensation expenses, and increased franchise tax as a result of becoming a listed company.

For the six months ended May 31, 2026, general and administrative expenses were $1,170,678, compared with $425,381 for the six months ended May 31, 2025, representing an increase of $745,297, or 175.2%. The increase in administrative expenses was primarily due to higher management and staff remuneration following the Company’s listing, increased expenditure on various professional services, human resources expenses and higher insurance costs, and increased franchise tax as a result of becoming a listed company.

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Other Income (Expenses)

Interest income

Interest income was $216,101 and $414,838, respectively, for the three and six months ended May 31, 2026, compared with an interest expense of $nil and $nil, respectively, for the three and six months ended May 31, 2025. This increase in interest income was primarily attributable to interest earned on funds lent to unrelated third parties on a short-term basis to optimize the return on proceeds raised through our IPO, before allocating and utilizing those funds in accordance with the purposes set forth in the prospectus.

Income Tax Expense (Benefit)

Our income tax provision was $nil for the three months ended May 31, 2026, compared with an income tax provision of $400 for the three months ended May 31, 2025 due to the tax provision adjustment in the third quarter of fiscal year 2025 related to nondeductible IPO-related costs.

We recorded a tax provision of $1,600 for the six months ended May 31, 2026, compared with a benefit of $105,898 for the six months ended May 31, 2025. The realization of a tax benefit was mainly driven by the loss before income taxes we incurred during the six months ended May 31, 2026.

Net Loss

As a result of the above factors, for the three months ended May 31, 2026, we reported a net loss of $2,532,942, compared with a net loss for the three months ended May 31, 2025 of $107,604. For the six months ended May 31, 2026, we reported a net loss of $2,643,046, compared with a net loss for the six months ended May 31, 2025 of $312,603.

Liquidity and Capital Resources

In assessing our liquidity, we monitor and analyze our cash on hand, our ability to generate sufficient revenue, the collection of our accounts receivable, our ability to obtain additional financial support in the future, and our operating and capital expenditure commitments. As of May 31, 2026, we reported cash of $5,235,991 and working capital of $17,275,349, attributable primarily to our IPO completed in August 2025. Working capital as of May 31, 2026 is composed principally of $9,649,811 in loans receivable that mature in May 2026, with cash and other current assets comprising the remainder. Our near-term liquidity is therefore dependent primarily on the timely collection of the outstanding loan balances upon their maturity. Each loan is secured by an irrevocable personal unlimited joint and several liability guarantee provided by the shareholders or chief executive officers of the respective borrowing parties. We expect to collect substantially all outstanding loan principal upon maturity in May 2026 and intend to redeploy those proceeds in accordance with the intended uses set forth in our prospectus. As of the issuance date of this report, $150,000 of the outstanding balance has been received. In the period between the balance sheet date and the expected May 2026 loan maturities, we expect to fund ongoing operating requirements through a combination of cash on hand, operating revenues, and any advance repayments received from borrowers prior to maturity.

In August 2024, we sold 1,000,000 shares of Class A common stock at a price of $0.90 per share. The gross proceeds amounted to $0.9 million. All proceeds were received prior to November 30, 2024.

On August 20, 2025, we completed our IPO resulting in net proceeds of approximately $13.7 million, after deducting underwriting discounts and commissions and offering expenses payable by us.

Our 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. If additional resources are required, we may issue additional equity or debt securities. The sale of additional equity or equity-linked securities could result in further dilution to stockholders. Incurring additional debt would increase our debt service obligations and could impose operating and financial covenants that may limit our operations. Further, financing may not be available in amounts or on terms that are acceptable to us, or it may not be available at all.

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Cash Flows for the Six Months ended May 31, 2026 and May 31, 2025

The following table summarizes our cash flows for the periods presented:


		For the Six Months			For the Six Months
		Ended May 31, 2026			Ended May 31, 2025
Net cash used in operating activities		$	(4,344,650)		$	(294,052)
Net cash provided by investing activities			343,582			—
Net cash provided by financing activities			7,928,530			178,922
Net increase in cash		$	3,927,462		$	(115,130)

Operating Activities

Net cash used in operations was $4,344,650 for the six months ended May 31, 2026, compared with net cash used in operations of $294,052 during the six months ended May 31, 2025. The increase in operating cash outflows was primarily attributable to the following factors: (i) a $1,201,361 increase in prepaid expenses and other current assets, primarily reflecting advance payments made for professional services (representing approximately $723,000 of the increase) and ongoing research and development service costs in connection with our market expansion and potential acquisition activities; (ii) a $28,682 decrease in other payables and current liabilities, primarily due to the settlement of accrued compensation and other operating obligations carried from the prior fiscal year; and (iii) $225,552 in interest income on our loans receivable portfolio that was accrued during the period but not yet received in cash.

Investing Activities

Net cash provided by investing activities was $343,582 for the six months ended May 31, 2026, reflecting repayments received on short-term loans extended in the prior fiscal year. For the six months ended May 31, 2025, net cash from investing activities was $nil.

Financing Activities

Net cash provided by financing activities amounted to $7,928,530 for the six months ended May 31, 2026, mainly attributable to proceeds from issuance of common stock under private placement agreement.

Net cash used in financing activities amounted to $178,922 for the six months ended May 31, 2025, consisting of $480,000 capital contribution from a shareholder, and $296,078 payment for deferred listing cost.

Contractual Obligations and Other Commitments

We have no long-term fixed contractual obligations or commitments as of May 31, 2026.

Off-Balance Sheet Arrangements

We did not have during the period presented, and we do not currently have, any off-balance sheet financing arrangements as defined under the rules and regulations of the SEC, or any relationships with unconsolidated entities or financial partnerships, including entities sometimes referred to as structured finance or special purpose entities, that were established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Critical Accounting Policies and Estimates

We prepare our financial statements in conformity with the accounting principles generally accepted in the U.S. (“U.S. GAAP”), which require us to make judgments, estimates, and assumptions that affect our reported amount of assets, liabilities, revenue, costs and expenses, and any related disclosures. Although there were no material changes made to the accounting estimates and assumptions in the past fiscal year, we continually evaluate these estimates and assumptions based on the most recently available information, our own historical experience and various other assumptions that we believe to be reasonable under the circumstances. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from our expectations as a result of changes in our estimates.

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We believe the following critical accounting policies involve the most significant estimates and judgments used in the preparation of our consolidated financial statements.

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 plant and equipment, the recoverability of long-lived assets, impairment of goodwill, and revenue recognition. Actual results could differ from those estimates.

Fair value of financial instruments

●

Level 1 — inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

●

Level 3 — inputs to the valuation methodology are unobservable.

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, other payables and other current liabilities, approximate the fair value of the respective assets and liabilities as of May 31, 2026 and November 30, 2025, based upon the short-term nature of the assets and liabilities.

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.

Income Taxes

Prior to JAR Acquisition, as an S-Corporation, the Predecessor was not subject to federal corporate income taxation, 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 JAR Acquisition, the Predecessor became a wholly

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owned subsidiary of the Company, and a C-Corporation, and is subject to corporate income taxation 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. We assess 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. We recognize interest and penalties related to unrecognized tax benefits as part of the income tax provision in the consolidated statements of income.

Impairment of Long-Lived Assets

We review 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, we evaluate recoverability by comparing the carrying amount of the asset group to the sum of the undiscounted expected future cash flows 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. We estimate fair value using the expected future cash flow 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 three months and six months ended May 31, 2026 and May 31, 2025.

Revenue recognition

●

Over Time: Fixed weekly service charges and branding-related revenue (e.g., apparel and vehicle branding) are recognized evenly over the contractual service period, as the Company satisfies the performance obligation of continuous service coverage and branding compliance over time for FedEx.

●

Point-in-Time: Activity-based revenue, including stop charges, package charges, and fuel surcharges, is recognized upon completion of the respective performance obligation (e.g., completing a delivery or pickup stop for FedEx and obtaining the end-recipient’s delivery confirmation). Recognition of this revenue is further subject to verification and confirmation of the actual completed activity volume by FedEx via its proprietary systems, consistent with the terms of the ISP Agreement.

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negotiated fixed and variable charges (Negotiated Charges) between the Company and FedEx, documented in the ISP Agreement’s Schedule C and related attachments. The fixed component (weekly service charges) is set at the inception of the rate term; the variable component (activity-based charges) is tied to the actual volume of services completed (e.g., number of stops, packages handled) and includes fuel surcharges that adjust weekly based on market fuel prices. There are no rebates, returns, or other material variable consideration provisions outside of the agreed activity-based charges. As FedEx is the Company’s sole counterparty, there is no prepayment requirement from customers; the Company and FedEx settle service fees based on FedEx’s official confirmation of the actual completed service volume for each settlement period. Since the fixed and activity-based charges under the ISP Agreement are explicitly tied to separate, distinct performance obligations (continuous service coverage vs. per-unit activity execution), no allocation of the transaction price is required under ASC 606. For activity-based revenue, it is recognized at a point in time when control of the service (for FedEx) is transferred and the delivery is completed to the end-recipient’s designated destination, as evidenced by the end-recipient’s signature on the delivery note and subsequent verification by FedEx. Transit periods for individual delivery tasks typically do not exceed one month, and the Company and FedEx settle all service fees on a regular contractual basis. The Company has a contractual credit term with FedEx for service fee settlement, with standard payment terms of one week.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

As a smaller reporting company, we are not required to provide this information.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) that are designed to provide reasonable assurance that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, we recognize that no controls and procedures, no matter how well designed and operated, can provide absolute assurance of achieving the desired control objectives.

In accordance with Rules 13a-15(b) and 15d-15(b) of the Exchange Act, management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures as of May 31, 2026 and identified one material weakness and two significant deficiencies in our internal control over financial reporting as of May 31, 2026. Based on the evaluation described above and in light of the material weakness and significant deficiencies identified, management has concluded that our disclosure controls and procedures were not effective as of May 31, 2026. A “material weakness” is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. A “significant deficiency” is a deficiency, or combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness yet important enough to merit attention by those responsible for oversight of the Company’s financial reporting. The material weakness and significant deficiencies identified are as follows:

Insufficient Management Review Controls Over Financial Reporting Processes. The Company lacks sufficient management review controls to monitor the execution of financial reporting processes and to detect and prevent potential material misstatements in the financial statements. This material weakness relates to the Company’s lack of an adequate internal review function to monitor control execution, which may lead to material audit adjustments to the financial statements.

Lack of Dedicated Personnel with Specialized US GAAP Reporting Expertise. The Company’s finance team includes personnel with Certified Public Accountant (“CPA”) credentials and extensive financial reporting experience; however, the Company does not currently

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have dedicated personnel with specialized expertise in U.S. Generally Accepted Accounting Principles (“US GAAP”) financial statement preparation and disclosure, particularly with respect to complex accounting standards. This deficiency arises from recent personnel changes in the finance function, including the resignation of the Chief Financial Officer, and the Company’s size and resource constraints as a small business.

Inability to Obtain SOC 2 Report from FedEx. The Company’s revenue recognition process, financial reporting, and operational activities are fully dependent on proprietary systems owned and maintained by FedEx (the Company’s key counterparty), including FedEx Software, leased Scanners, and the My Ground Biz Account platform. These systems are critical to the Company’s ability to track service activity, confirm workload, verify pricing, and fulfill its financial reporting obligations. As of the end of the reporting period, the Company has been unable to obtain a Service Organization Control (“SOC”) 2 report from FedEx. A SOC 2 report assesses the effectiveness of FedEx’s controls over the security, availability, and confidentiality of its systems-controls that are critical to ensuring the reliability of the data generated by FedEx’s systems and used by the Company in its financial reporting. This deficiency impairs the Company’s ability to independently verify the effectiveness of FedEx’s controls over the systems that are core to the Company’s financial reporting process. Without a SOC 2 report, the Company cannot fully assess the security, availability, or confidentiality of FedEx’s systems, which increases the risk of: (i) inaccurate, incomplete, or untimely data (e.g., workload counts, pricing information) used in revenue recognition and financial reporting; (ii) system outages or data breaches that disrupt the Company’s financial reporting process; and (iii) the Company’s independent registered public accounting firm being unable to obtain sufficient appropriate audit evidence regarding the reliability of FedEx system-generated data, which could result in a scope limitation in the audit of the Company’s financial statements.

Neither of the two significant deficiencies has resulted in a material misstatement of the Company’s consolidated financial statements for the reporting period.

Following the identification of the material weakness and two significant deficiencies described above, we are taking comprehensive remedial measures to strengthen our internal control over financial reporting. The Company’s finance team is in the process of developing and implementing financial procedures and entity-level controls designed to achieve and maintain effective internal control over financial reporting. These efforts include the design and execution of robust financial closing policies and procedures, as well as the institution of an effective internal review process to monitor control execution. The Company is also actively engaging with FedEx to request access to Service Organization Control (SOC) 1 and SOC 2 reports to obtain independent assurance over controls supporting FedEx’s systems that affect the Company’s revenue recognition process; however, there is no guarantee that FedEx will provide such reports in a timely manner, or at all. To further strengthen our financial reporting function and control framework, the Company plans to implement additional remedial measures as necessary, including (i) enhancing U.S. GAAP accounting and financial reporting training for its accounting and financial reporting personnel; (ii) hiring more qualified accounting personnel with relevant U.S. GAAP and SEC reporting experience; and (iii) engaging an external consulting firm to assist our assessment of Sarbanes-Oxley compliance requirements and improvement of our overall internal control.

In addition, Mr. Huaqin He, one of the Company’s independent directors, is a professor at the College of Life Sciences of Fujian Agriculture and Forestry University with a major expertise in data analytics and systematic research, which can support the Company’s development in digital logistics, operational optimization, and technology-driven decision-making. Another independent director, Ms. Huanhuan Tian, has extensive experience in financial management, auditing, IPO preparation, and corporate compliance.

The implementation of the remedial measures described above may not fully address the material weakness or significant deficiencies in our internal control over financial reporting. Our failure to correct these control deficiencies could result in inaccuracies in our financial statements and could impair our ability to comply with applicable financial reporting requirements and related regulatory filings on a timely basis.

Internal Control Over Financial Reporting

Changes in internal control over financial reporting. There were no changes in our internal control over financial reporting (as the term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter ended May 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Elite Express Holding Inc.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

There have been no material developments in the legal proceedings previously disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended November 30, 2025, filed with the SEC on February 27, 2026, as amended on March 17, 2026.

Item 1A. Risk Factors

The following risk factors supplements and should be read in conjunction with the risk factors previously disclosed in the Annual Report. Except as set forth below, there have been no material changes to our previously disclosed risk factors.

Risks Related to Our Cash Deposits at Financial Institutions in Hong Kong

As of May 31, 2026 and November 30, 2025, $5.01 million and $0.1 million, 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 $102,085) for each financial institution. The Company’s total uninsured cash held in Bank of China (Hong Kong) Limited amounted to $4.9 million and $nil as of May 31, 2026 and November 30, 2025, respectively. As of the date of this quarterly report, the Company has not experienced any losses in such accounts.

However, because the Company does not otherwise conduct business operations in Hong Kong, the placement of a substantial portion of its cash in that jurisdiction exposes it to additional risks associated with the political, legal, and economic environment of a foreign country. These include risks arising from potential changes in Hong Kong’s financial system, banking regulations, capital controls, or its relationship with the People’s Republic of China, as well as the possible impact of international sanctions, foreign exchange restrictions, or governmental interventions. In the event of adverse political developments, sovereign actions, or a deterioration in the financial condition of the relevant institutions, the Company may experience delays or difficulties in accessing its funds, or incur losses that are not covered by deposit insurance. Any such events could materially and adversely affect the Company’s liquidity, financial condition, and results of operations.

Risks Related to Our Continued Listing Status

As previously disclosed, on October 31, 2025, we received a deficiency letter from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) notifying us that, based upon the closing bid price of our listed securities for the previous 30 consecutive business days, we were not in compliance with the minimum bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2), which requires listed securities to maintain a minimum bid price of $1.00 per share. The deficiency letter provided us with 180 calendar days, or until April 29, 2026, to regain compliance.

On April 30, 2026, we received a notification from Nasdaq advising us that, although we had not regained compliance with the minimum bid price requirement, Nasdaq had determined that we were eligible for an additional 180 calendar days, or until October 26, 2026, to regain compliance. Nasdaq’s determination was based on our meeting the continued listing requirement for market value of publicly held shares and all other applicable requirements for initial listing on The Nasdaq Capital Market, other than the bid price requirement, and our written notice of our intention to cure the deficiency during the second compliance period, if necessary, by effecting a reverse stock split.

If at any time during the second compliance period the closing bid price of our listed securities is at least $1.00 per share for a minimum of 10 consecutive business days, subject to Nasdaq’s discretion under the Nasdaq Listing Rules, Nasdaq will provide written confirmation of compliance and the matter will be closed. The notification has no immediate effect on the listing or trading of our Class A common stock on The Nasdaq Capital Market.

We intend to continue monitoring the bid price of our listed securities and will consider available options to regain compliance with Nasdaq Listing Rule 5550(a)(2), including, if necessary, effecting a reverse stock split at a ratio within the range previously approved by our stockholders. If we do not regain compliance by October 26, 2026, Nasdaq will provide written notification that our securities will be subject to delisting. Although we intend to use all reasonable efforts to regain compliance with Nasdaq Listing Rule 5550(a)(2), there can be no assurance that we will regain compliance during the second compliance period or otherwise maintain compliance with Nasdaq’s continued listing requirements. A delisting of our Class A common stock could substantially decrease trading in our Class A

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common stock, adversely affect the liquidity and market price of our Class A common stock, impair our ability to raise additional capital, and result in a loss of investor confidence.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Unregistered Sales of Equity Securities

On March 10, 2026, the Company entered into Stock Purchase Agreements with eight non-U.S. investors, pursuant to which the Company agreed to issue and sell in a private placement an aggregate of 32,000,000 shares of the Company’s Class A common stock, par value $0.000001 per share, at a purchase price of $0.25 per share, for aggregate gross proceeds of $8,000,000. The offering was conducted in offshore transactions pursuant to Rule 903 of Regulation S under the Securities Act of 1933, as amended. On June 4, 2026, the transaction closed, and 32,000,000 shares of Class A common stock were issued pursuant to this private placement.

Use of Proceeds

The following “Use of Proceeds” information relates to the registration statement on Form S-1, as amended (File Number 333-286965), for our IPO, which was declared effective by the SEC on August 20, 2025. On August 22, 2025, we completed our IPO, in which we issued and sold an aggregate of 3,800,000 shares of Class A Common Stock at a public offering price of $4.00 per share for aggregate gross proceeds of approximately $15.2 million. Dominari Securities LLC was the representative of the underwriters of our IPO.

We incurred approximately $1,482,060 in expenses in connection with our IPO, which included approximately $1,064,000 in underwriting discounts, approximately $152,000 in non-accountable expenses paid to the underwriters, and approximately $266,060 in other expenses. None of the transaction expenses included payments to directors or officers of our Company or their associates, persons owning 10% or more of our equity securities, or our affiliates. None of the net proceeds we received from the IPO were paid, directly or indirectly, to any of our directors or officers or their associates, persons owning 10% or more of our equity securities, or our affiliates.

The net proceeds raised from the IPO were approximately $13.7 million, after deducting underwriting discounts and the offering expenses payable by us. As of the date of this report, we have deployed the net proceeds as follows: (i) approximately $0.4 million has been used for working capital; and (ii) approximately $9.9 million has been lent to unrelated third parties pursuant to short-term loan agreements at an annual interest rate of 8%, as further described in Note 4 to the condensed consolidated financial statements. The short-term loans represent a change from the use of net proceeds described in our prospectus. Our prospectus contemplated that net proceeds not immediately deployed for their designated purposes would be invested in short-term, interest-bearing bank deposits or debt instruments. Management determined that the short-term loans, which are each secured by irrevocable personal guarantees, provided a more favorable return on the net proceeds while maintaining liquidity in advance of the planned deployment. The loans matured in May 2026 and were extended for six months. The remainder of the net proceeds is held in cash accounts.

As of the date of this report, we have not yet deployed any net proceeds toward the equity or asset acquisitions, fleet upgrades, or mobile application development described in our prospectus.

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Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

During the three months ended May 31, 2026, no director or officer (as defined in Rule 16a-1(f) under the Exchange Act) of the Company adopted, modified, or terminated any “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.

On June 8, 2026, the Company appointed Mr. Ye Hua as Chief Financial Officer of the Company, effective the same date. In connection with his appointment, Mr. Hua entered into an Employment Agreement and an Indemnification Agreement with the Company. Ms. Yidan Chen, who had served as the Company’s Interim Chief Financial Officer, ceased to hold that position upon Mr. Hua’s appointment and continues to serve as Chief Executive Officer, President, and Director of the Company.

Item 6. Exhibits

The exhibits listed below are filed as part of this quarterly report on Form 10-Q.

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Index to Exhibits

		Incorporated by Reference (Unless Otherwise Indicated)
Exhibit Number	Exhibit Title	Form	File	Exhibit	Filing Date

3.1	Amended and Restated Certificate of Incorporation	S-1	333-286965	3.1	May 5, 2025

3.2	Amended and Restated Bylaws	S-1	333-286965	3.2	May 5, 2025

10.1	Director Offer Letter dated December 2, 2025 by and between Huanhuan Tian and the Company	8-K	001-42811	10.1	December 4, 2025

Elite Express Holding Inc. 10-Q